SPEAKER_00: I mean, Jason and Sax look like fucking two accountants who've just been fired from Lehman Brothers in 2000. Absolutely.
SPEAKER_02: We're carrying our boxes out to the street and getting a taxi.
SPEAKER_01: Sax does look appropriate for his setting.
SPEAKER_02: How long in DC for Sax appeal you in and out one day? What are you doing?
SPEAKER_03: Yeah, I'm fine. I tonight for the fundraiser tomorrow morning.
SPEAKER_02: Who's the fundraiser with? You want to tell everybody? Big boy? Yeah, it's an April Fool's joke.
SPEAKER_03: I'm hosting a fundraiser for a Democrat.
SPEAKER_02: Blue State. He's trolling everybody with his Blue State. Put your red tie on. Put your red tie. You have a red tie with you, Sax?
SPEAKER_03: I wore a blue tie today. Really?
SPEAKER_00: Oh, you're trolling? Oh, the full troll is on. Oh, the full troll is on. Wow.
SPEAKER_02: What a little troll artist. All right, let's get started. Rain Man David Sax. We open source it to the fans and they've just gone crazy with it. Love you, besties. Queen of Kenwa. All right, everybody. Welcome to another episode of the show. I'm going all in.
SPEAKER_00: I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in. I'm going all in.
SPEAKER_02: I'm going all in. All right, everybody, welcome to another episode of the All In podcast with us back from his Tahoe vacation. You were certainly missed even though the episode was record setting. The Queen of Kenwa himself, he'll reboot your physique with his Munique, puts the mana in the kana and he's your pal from NorCal, the Sultan of Science. David Friedberg, how are you doing, brother? You have a whole sequence of these things?
SPEAKER_00: This is great. You actually do work for this podcast?
SPEAKER_01: You can keep this going every week.
SPEAKER_03: It'll be amazing. I just felt like getting a plug in from Munique and Kana.
SPEAKER_02: That was my, if I could get two portfolio companies in one. Hit Saks and me. Let's go. All right. Well, you know that he's back with us again. The czar of ARR, the savant of SaaS.
SPEAKER_02: He puts the ass in Asperger's. He's the sucker. He's a sucker for Tucker, the Rain Man himself. David Saks.
SPEAKER_02: That's so good. All right. Next up, the dictator agitator and our frequent collaborator. He's back to back with the SPACs, a trendsetter with his sweaters.
SPEAKER_02: The future he can foresee a Chumath Palihapitiya. We got you everybody.
SPEAKER_00: It's not as good as David's, I got to say. Well, there's a lot to go with Asperger's, Tucker.
SPEAKER_02: I mean, he's the material for Saks. I could have done 20 minutes. 20 minutes. I could have done 20 minutes on Saks. You are of course in DC with some Star Chamber thing. You, Bannon, T.L. What Star Chamber bullshit are you doing in a lot of... No, I spoke at a foreign policy conference today called...
SPEAKER_03: What's the name of it? It's called Up From Chaos and sponsored by a group called the American Moment and the American Conservative. What did you speak about?
SPEAKER_03: Well, it's called Up From Chaos because our foreign policy has been chaos for the last 30 years. The United States has been in seven wars. How many trillions have we spent on nation building? We've lost all of those wars. Only one war we've won. Look at all the lives that have been lost, thousands and thousands of our soldiers, and then millions of innocent people all over the world. I've said it before, this is what happens when the United States goes around the world stampeding like a raging elephant. We need a more restrained foreign policy. So that's what I've been articulating. I don't know what about that makes it either conservative or liberal. But what we need is more restraint and less interventionism. Well, first of all, it's too logical. Right? Yeah. You know, it's pretty much everyone in this town. I mean, there's no lobby for decreasing our involvement, right? Because I mean, the military industrial complex has gotten so big and so powerful.
SPEAKER_02: I mean, Trump did not want to start wars. It was a key piece of his platform. And it did seem up until and we'll get into this, obviously, up until the gaffe from Biden, and 12 hours after I said you weren't giving him the benefit of the doubt. It threw me right under just declared a new world order.
SPEAKER_03: I mean, he is changed with Putin. Yeah. And he said regime change. I mean, he's bought into this liberal interventionism. Obama was much better. I mean, Obama had all the right instincts. He de escalated things in Ukraine, we could have had the situation back in 2014. Obama pulled the plug, and he de escalated in Syria, over the over the objections of his staff. And the problem is, if you, the Obama basically got played by the staff and the establishment, because Obama was there for eight years.
SPEAKER_00: And he knew that, you know, it was all about doing the right thing. And also what the legacy and the judgment that would look back on his decisions, whereas everybody else is like, well, I'm here for this four year grift, and I'll be back for another four years later. So you know, the more chaos, the better for a lot of those people.
SPEAKER_02: He couldn't get us out of Afghanistan. Why couldn't he get us out of Afghanistan? Zach, because he wanted to write, he got played by the general.
SPEAKER_03: So Ben Rhodes wrote a book, Ben Rhodes was sort of one of Obama's right hand guys, and he coined a term that stuck for called the blob, which is the term for this sort of Washington foreign policy establishment, all the people in the State Department, and the think tanks and the sort of the journalists who love being the drums of war. I mean, that whole establishment that just is addicted to war. And you know, if you read that Atlantic magazine interview called the Obama doctrine, where Obama's interviewed, he lays it out, he says, Look, there is a foreign policy playbook that presidents are expected to follow in response to any provocation, any incident, you're supposed to react in a highly militarized way. And if you don't, you get attacked. And the generals, he wanted to get out of Afghanistan, but the general started leaking against him, that would be a fiasco. And then, unfortunately, Obama didn't stick to his guns, he didn't want to take those political hits. It was unfortunate, he really showed up,
SPEAKER_02: we'll get into Ukraine at the end of the show. But let's talk a little bit about markets up top here, the US yield curve inversion is upon us, maybe you could give us a CPA a little primer on what this means the inverted yield yield curve, and why people are talking about it this week? Well, I think people were talking about it.
SPEAKER_00: The reason they were is that they believe that it predicts a recession. And specifically, what they look at is the interest rate on a two year bond, and an interest rate on a 10 year bond, and you subtract one from the other. And when it inverts, what effectively what it means is that, you know, typically in a healthy economy, you want rising interest rates over a long period of time. And the reason you would want that is that you are guessing that the economy will be healthy, there'll be a nominal amount of inflation, so things will tenderly increase in price. And as a result of that, you need to get paid more for the future than today. Right? So if you want me to take 10 year risk, you need to pay me a little bit more than if you want me to take two year risk. And so things should go up into the right. But when all that stuff 10 years out, all of a sudden, is trading for a lower yield than today. What people think will happen is that, you know, governments will cut interest rates massively. They tend to do that in order to stimulate the economy, right, to get money back into the system. And they tend to do that because of a recession. And so people look at the difference between the two year bond and the 10 year bond, and they try to guess what's going to happen. Here's the problem with all of this. It turns out that it's not as correlated as one thinks. And Nick, I posted this link, so you can just put it up there. But a bunch of economists at the Fed actually went and, you know, you have access to this data. They backtested this. And what they found was that there was actually a more predictive signal of recessions, which is the difference between the three month T-bill and the 18 month T-bill. And if you look at the three's 18 spread, they call that the forward spread at the Fed. That's actually not showing a recession at all. In fact, that shows a very healthy ascent, largely taking into account the fact that the Fed has told us that they're going to rip in a bunch of rate increases over the next year to 18 months. So what are we to do with all of this? Well, when there's been a recession, it has typically been true that both the two's 10s and the forward spread have collapsed to zero or gone negative. That's this inversion. It has never really been the case that two's 10s inverts while the forward spread stays up and you have a recession. In the past, we've mentioned that when oil has these kinds of price spikes, it typically forecasts a recession. So if you put all of this data together, it's a really murky picture. So what are you supposed to do? It's not totally clear to me, but I think that the general way that I think the market is reacting to this is probably inappropriate and I'll tell you why. And the setup, by the way, because of this inappropriateness is actually quite interesting. So why is the reaction inappropriate? Look, if you think about where we were in November and where we are today, almost April 1st, right? So it's been four months, five months. We've had massive exposition of inflation. We've had massive disruptions to the supply chain. We've had the beginning of a war whose end is somewhat indeterminate today. That's causing a bunch of spikes in a bunch of really critical commodities the entire world needs. We've had a Federal Reserve that went from hiking 50 or 75 basis points to hiking 200 to 250 basis points by the estimated average. All of these things have happened, yet the market is basically at an all-time high, plus or minus 5%. That really doesn't hang together at some really basic logical level, right? So what's going to happen? Well, Brad said this last week. What has actually happened under the hood is a dispersion, which means the crappy companies have gotten crushed and the good companies have gotten whacked but not crushed. And then when they rally, they rally disproportionately in favor of the good companies. So what are we doing right now? I think we are going to see this diversion of companies and we're about to go through earnings season, right? We're at the end of Q1. And I think what's going to happen is really interesting. You're going to have a handful of companies who have a great handle on their business, who actually project strength. I know what I'm doing. I know how I'm going to perform. The levers are in my control. I'm going to invest for the future. I'm going to go and consolidate a market. Those companies will get rewarded. And then anybody else who has a whiff of indecision or whose structural business is flawed and then they use all of these other issues as a reason to explain their flawed business will get completely whacked. Two examples over this last week, and we had this debate, people were talking about restoration hardware and the CEO basically saying the sky is falling and there's a huge recession. And you know, my comment is, well, if you take the other side of the coin, restoration hardware sells overpriced crappy furniture into a housing market that's basically shut down because refi rates are at 5%. There's the other explanation for why his business is crappy. It doesn't necessarily have to be a recession.
SPEAKER_02: And just to clearly define it, a recession is two quarters or more of negative growth. The economy contracting. And we've had about a dozen of these since World War Two. We remember a couple of them in our lifetimes, obviously, the COVID situation created a recession for a couple of quarters. And then we had the great recession, which lasted I think that was almost was over a year, right? That was six quarters, I think five quarters. So these happen every 10 years or so. So if we do have a recession, and it seems implausible to me that we would have negative growth for two quarters.
SPEAKER_00: So the other the other interesting company, for example, was UiPath, which UiPath got whacked today 25 or 26%. And what they actually reported was that they thought that they were going to increase ARR to you know, 1.2 billion from like 900. So that's a huge at that scale to grow 35-40% in ARR in a year is really quite incredible. But their ACV numbers and the revenue numbers were a little soft, they got whacked. And now they're trading, you know, like 11 times ARR. So you have some of these companies that are going to blame macro headwinds, but they may actually just have a, you know, a flawed business model. You'll have these other companies who actually overperform but may have been a little bit too highly valued, who will get valuation reset on any faint weakness. And so, you know, it's going to be really up to the CEOs and these boards when they write their earnings releases. To be very precise, those that have a handle on their business, I think are going to get really rewarded. And those that don't need to blame the macro market and just get all the bad news out now because this is the quarter it doesn't get any better from here.
SPEAKER_02: Tax, best ways to fight a recession, cut spending, I'm sorry, increased government spending, cut taxes. Where are we at in terms of how many bullets we have left to do these kind of things? We don't really have a, you know, ability to spend more money. And I guess lowering interest rates is the other way to stimulate it. Do we even know we're going into a recession? So do you think we're going into a recession? If we are, is there a way to reverse it through the normal tactics?
SPEAKER_03: We're definitely going into a slowdown. And whether it becomes a recession is to be determined, I think there's a very good chance because we already were headed for a slowdown because of interest rate increases because of inflation. And now on top of it, we've got all the supply chain disruptions from this war. And we know that, you know, unplugging the 144 million Russians in the Russian economy, we've basically unplugged that from the global economy. So that's going to hit our economy. If there's a little bit of a delayed reaction there. So these are all negative indicators. And I think we're either going to have a recession or something very close to it. And they typically last 11 months, right, Sax?
SPEAKER_02: So how long would the recession be? I think it's typically 11 months, two quarters, six quarters.
SPEAKER_03: Yeah. Normally it's like 18 months till you get back to where you're supposed to be or something like that. But you're right. We have very limited tools to fight this because we've already spent, I mean, we've already broken the glass in case of emergency for COVID. We spent something like 10 trillion. By the way, that's what caused a lot of the problems is we flooded the zone with liquidity. Now we're trying to mop that up with interest rate increases that's slowing down the economy. So there's nothing left to really spend. You can't really drop interest rates much more. And if you do, you'll get much worse inflation. So it seems to me that we don't have a lot of tools here. And we could end up with something like a stack 1970 style stagflation where we continue to see inflation with the slowing economy.
SPEAKER_02: Let's unpack what that experience would be like. economy slowing, there's less job openings, people are spending less money, while the prices of goods and services continue to go up.
SPEAKER_01: That's why they spend less money. And that's why there's there's recession. Like, I mean, you're paying six bucks for gas, you have less money to go out for dinner every week, right? You pay, you know, twice as much for an airplane ticket, you don't spend as much on the hotel. I mean, like, you know, the rippling effects of the rate of inflation are decreased spending. And there isn't enough time for, you know, the the new job creation engine to catch up. And you know, without a stimulus effect, you're in trouble. That's really the situation we're in. And that's what, you know, can kind of cause the stagflationary effects to drag on almost
SPEAKER_02: every other time we've had a recession. People couldn't find jobs. And I can remember them qualitatively people saying, Hey, I want to get a job, I need more money, I can't find one. And now we're sitting here with more jobs than we can fill still over 10 million jobs available and people are still resigning from jobs. So how do we factor in the labor market? Shama? Well, it's all this is super confounding. It's not like previous ones.
SPEAKER_00: It is I actually think Jason, the explanation for all of this is not necessarily about the supply demand dynamics of labor, but our social policies related to our birth rate and immigration. I posted this article link for you guys to read in the Atlantic, but basically, our birth rate in 2021 absolutely fell off a cliff. It was less than 300,000 net births in the entire country. And net birth is defined as immigration plus births minus deaths. And when you look under the covers, you know, we had two really discontinuously bad things. One that has been building since Trump and one that was acute. The thing that was acute was that in 2021, after we had vaccines, which is crazy thing to think about, we had a million deaths basically, right, because of COVID. So that's a million people that largely exited the workforce plus or minus. Obviously, some not all of those people working, but I think the overwhelming majority of probably 50% we have 50 60% of our participation.
SPEAKER_00: More more I suspect I suspect some could have been retired, right? That's what I'm saying. I think it's probably like 70 80% of the people that died were probably in the workforce in some way. So you had you had all those people leave.
SPEAKER_00: We have a you know, troublesome issue with birth and birth rates. All Western economies do basically as a standard of living goes up and as the equality between men and women go up, birth rates go down without commenting on the the dynamics of that. That's just that is just true. And so, you know, we should celebrate that in the sense that like, you know, you want increasing equality, you want people to have more choice, etc, all these things. So how do you make up for the gap? While you make up for the gap in immigration, and the problem is that Trump closed the door. And Biden has not reopened the door. And so, you know, we have had a meaningful fall off in immigration. It doubly compounded because then because of COVID, we had border controls, and we shut the borders completely. So even if, you know, you were a student that will come here, odds were maybe you'd get a master's or a PhD and then stay here, none of those people get to nobody can get in. So that's the real problem that we have to solve, Jason, which is that you're not going to get, you know, families to all of a sudden have kids, you know, that that's a 18 year problem if you started that problem today to get them into the workforce or 25 year problem. So immigration is really the only solution. And we don't really have the sponsorship to do that at a domestic policy level. Well, then you add to that the fact that labor participation, which when we were coming up,
SPEAKER_02: 67 68% of people in the country were work choosing to work. And now we're, we're down in the 60% to maybe ticking up to Yeah, 62%. It looks like on that Fred website. So we need to greatly increase the number of people in the country and the people participating in the labor force if we're to avoid a recession, right? More people working, we need more economic, we need to boost it.
SPEAKER_00: Yeah, I would encourage everybody to read this Atlantic article because I think Nick Thompson does a very good job of just basically summarizing the issues that that we have.
SPEAKER_02: Freeburg, what are your thoughts here? Is it getting more people to participate in the labor force importing more people both and then how do you how do you get that to actually happen? Sorry, Derek Thompson, not Nick Thompson.
SPEAKER_01: Look, I'm, I'm not an economist, but I don't know if that really solves the acute runaway problem that we're experiencing right now. One thing I'll say about inflation, let's say you're running a company, and you raise your prices, you're not often going back and dropping your prices again. And you know, you have to have a catch up effect for income and savings to make up for the increment in pricing. And that's really, you know, a key driver right now that the rate at which prices are going up, and you know, short gas and other commodities trade back down, but consumables, durables typically stay high after they inflate, you end up having, you know, kind of this persisting effect, and it's really hard to kind of just grow your way out of that. So you know, without stimulus. And so, you know, I'm not sure the labor solution is going to solve this kind of acute problem that we're going to be facing that seems to be dragging on.
SPEAKER_00: What do you think about the argument, though, that there's a substitutional effect, meaning, when prices of goods rise, people find cheaper goods. And then separately, what happens is, you know, part of a productive society is you make better and more interesting and more useful goods and services. And you know, incrementally, especially if you use technology, those things tend to be deflationary. So they do get cheaper, meaning, you know, you used to pay for photo storage, Dropbox comes along gives it away for free, then Google comes along and gives everything away for free. Yeah. So you have this deflationary natural deflationary effect where you tend to save money on the things you used to pay for it, because a lot of people find that they can build a different kind of business model to monetize giving it to you or subsidizing. I think that's the key to math is that if people if prices go up, that entrepreneurs
SPEAKER_02: are gonna look at say, you know what, there's a better way to do this. You want to go on vacation, you want to stay somewhere for two weeks, you can't afford the hotel. Okay, let's try this new thing like this Airbnb, somebody rents you their apartment, they move in with another person for the week you use their apartment and you can rent for 150 night instead of 350 at a hotel that that pricing, when there's runaway pricing, people come up with better solutions for people.
SPEAKER_00: Yeah, I think I think that that's generally been true. And by the way, the if you think about the the biggest areas that have been sticky, which are energy policy and housing policy, the way that we'll have to unlock better pricing in those markets will be because we deregulate not not by increasing regulation, but by massive deregulation. You know, we have massive NIMBY ism up and down the stack that prevents us from building the housing supply we need that has to get fixed, right. And we need to have better energy policy. Like for example, you take a state like California, you know, it's the most populous state in the country, it's the richest state in the country, but it has an electricity prices that are three times higher than the national average. That doesn't make any sense. Right. And so you know, how do you expect renewables to really compete when people are still incentivized to fire coal and net gas, it doesn't make any sense whatsoever. These prices cannot be this high, they're high because of lobbying and because of lobbyists and special interests. And so if you rip that stuff out by deregulation, you actually allow, as you said, Jason entrepreneurs to do the right thing, and they will push prices back down.
SPEAKER_00: Sax, what's your question?
SPEAKER_03: Well, I thought you might want to comment on what we're talking about entrepreneurs
SPEAKER_02: creating products and services that lower prices that then you know, maybe create the the exit ramp here to inflation, and stagflation, some combination of that that's going to be upon us.
SPEAKER_03: Sure. I mean, there's a lot of entrepreneurial energy in the US strong there that technology does cause deflation. It's deflationary. But this is not going to help us get out of what's coming over the next year or two. Look, the bottom line is that we had a massive government overreaction to COVID in which we printed and spent way too much money, something like 10 trillion plus. And you know, this is the classic hangover after the party. You know, they put the punch bowl out for way too long. And now we're all gonna pay the price for it. They spike the punch bowl. They spike the punch bowl big time. Yeah. And we're already seeing it. We're seeing all the advice we're giving our portfolio companies to slow down their spending and extend their runway. Every board in America is going to be doing that. So it becomes a self-fulfilling prophecy. But this yield curve inversion is, you know, fairly predictive. I mean, it's not perfect, but you know, CNBC had this report today. Historically, it's met when the yield curve inverts has been a better than two-thirds chance of recession at some point in the next year, and greater than 98% chance of recession at some point in the next two years. So it looks to me like… It needs to be inverted for at least 90 days typically.
SPEAKER_00: But again, I think if you look at the forward spread from the Fed, it's more accurate than the two-stents. But your point is the same. Something is happening that we need to take seriously, and none of the outcomes here are growthy good outcomes. And the policy wonks in Washington really need to figure out what their position is going to be on this stuff and what they push next in terms of legislation, because we're going to be going into the back half of the year in a midterm election where the economy is slowing, interest rates are high, prices are high. This is a horrible setup for the day. Yeah, and let's think about what the priorities of the administration have been throughout
SPEAKER_03: all of this. I mean, one year ago, they did that whole $2 trillion American Rescue Plan. They were warned by people like Stanley Druckenmiller that retail was back, the consumer was back, and yet they still printed $2 trillion. That caused a huge amount of inflation. It totally backfired. And that wasn't the end of it. If they had their way, we would have had $4 trillion more of spending and the whole bill back better. Now Biden just floated this new trial balloon over this unrealized gains tax. So last year, they floated the trial balloon about basically doing a wealth tax, and everyone hated it. And now they just proposed it again. It was insane. And even when they brought it out, they leaked that they had mansion support behind it. And then the next day, mansion came out and disavowed and said, No, no, I don't support this. I mean, what is the administration thinking? It makes no sense. Well, I mean, clearly foreign policy. I mean, I strongly believe we could have cut a deal on Ukraine a year ago to diffuse this whole situation before it turned into a war. Now we got a war over there.
SPEAKER_02: Let's talk about what they should do. I mean, number one on the list for me is we should be getting every entrepreneur from around the world, any really intelligent person who wants to go to graduate school here into this country, we need to have like a Manhattan Project to just scoop up all these mutant geniuses from around the world and get them here and get them starting companies here.
SPEAKER_00: You don't even need to do that. It was working. I don't fuck it up. Bush, Obama, all you had to do was just leave it alone.
SPEAKER_00: Everybody who was any good at anything, wanted to come to the United States, including the three of us.
SPEAKER_00: Yeah. And all of a sudden, it's like, nah, it's good. Yeah, I pass.
SPEAKER_02: Yeah. Okay, I guess. Yeah. Well, I mean, if you set out that you hate entrepreneurs, and you resent them for success, don't be surprised if they want to stay in a country that, but I don't think that's what
SPEAKER_00: it was. I think it was much crueler than that. I think that we went to a posture that said, Okay, you know what, net new immigration was viewed as something that was displacing people wasn't a net value creator was, you know, in some cases viewed very xenophobic Lee. And that is really problematic, because it's actually about a large population issue. And it's about how you construct a healthy, thriving population.
SPEAKER_02: Yeah, this was Trump's worst. Yeah, worst approach. He was best approach, clearly not starting wars, worst approach, shutting the borders down for some populist reason when we actually need people in the country. Well, hold on.
SPEAKER_03: But see, the way you just framed that is why I think there's a problem, which is look, obviously, the immigration is a very fraught issue. But the choice that's being presented to us by our political parties is either you're in favor of immigration, you know, like bringing in all these superstars, like we have founders in Silicon Valley, that makes sense. Or you're in favor of open borders. I mean, why are those two choices that we either have h1 b's or you have an open border? I mean, that makes no sense. I mean, what we should have is a sensible immigration. First of all, we should strip the border security issue out of it. Because whatever the number of immigrants that you want to allow pro border security,
SPEAKER_02: I mean, we need a point based system, we need to be have a reasonable discussion between Democrats and Republicans about a point based system. Right qualitative distance. You got to do that for a long time.
SPEAKER_00: And it works in Canada. And you're I think you're absolutely Australia, New Zealand, UK, they all have this.
SPEAKER_02: It's like, what what does our country need right now? Okay, do we need people, you know, who are laborers? Or do we need people starting companies? Do we need, you know, scientists, you've noticed, but to me, this is very equivalent to the
SPEAKER_01: removal of SAT and ACT scoring and admissions in college, explain the notion of merit, the notion of performance is not one that really matters in this country as much right now, as much as the notion of equity. And equity really has kind of become the mainstay of not just how we're making policy decisions on a local level, but a lot of these kind of national issues are becoming about equity. And it's about, you know, equitable consideration for wealth creation for existing citizens in the United States, and the perception that a minority of people or some majority of people actually missed out on significant wealth creation over the past couple of decades as globalization and technology advances have accelerated growth in our economy, and the share of that growth has been disproportionately assigned to a small percentage of people. And I think it is that same notion that drives a lot of the kind of sub decisions, the local decisions that we're making, as well as these important policy decisions. And the point that I think is critical, it's really hard to get across to everyone, or anyone for that matter, is that, you know, and I've talked about this a lot, but progress brings everyone forward, but it doesn't bring everyone forward symmetrically, right? Progress brings everyone forward. Give an example, Freeburg. So Amazon's a great example. I've used it a lot. With Amazon, we've all been given access to more goods and cheaper goods than we would have had before. So we all benefit from that progress, right? Everyone can get on an app and get a friggin inflatable swimming pool delivered to their home and the vitamins they need within 24 hours at half the price of what it would have cost them to go down to the local Ace Hardware store. That's an incredible benefit for all of us. So our share of wallet on that sort of goods has gone down, therefore we can spend more, get access to more stuff, and we're all prospering. And if you think back to what life was like 30 years ago, 20 years ago, to those of you who, you know, were spending money 20 years ago or whatever, it's an incredibly different proposition than what we had back then. And it really has changed the world and changed all of us as consumers' ability to consume more. That's amazing. The problem is Jeff Bezos is worth $160 billion. So everyone looks at that and they want to land base Jeff Bezos and they want to say, this is unfair. And equity becomes the discussion, which is why is one guy worth $160 billion? The reality is he benefited everyone. Everyone got benefit from the value that he helped create in this world, in this market. And then the reaction is, we got to stop this from happening. We can't let people be worth $160 billion without putting their eye on the point that, you know what, I'm spending three grand a year less because of this technology that he brought to market. And so there's a lot of these solutions that I would say are progressive. They progress us all as a society. Everything from biotech to technology and software to any sort of business or services innovation that people are willing to pay money for, that people are willing to embrace in an open and free market. And then what happens is the spoils of that progress aggregate in a small way to a small number of people. And that's the payoff in capitalism. But when that happens over and over again for 250 years, you fast forward and, by the way, a lot of those compound, people wake up and they say, I don't want that anymore. And they miss the fact that progress is taken for granted. And here we are. We want to give up progress and we want to get equity. And it's going to cause a real ripple effect that's going to last for decades. And it's not the first time we've seen it, right? This has happened historically over cycles that last hundreds of years. And it's happening now in the United States and in the entire Western world. And I think it's going to be really unfortunate generally for progress. And all the ones, all the advocates for equity are going to kind of raise their hand.
SPEAKER_00: I think you're totally right. What's the solution? Because it's just a really sad place to be. I've thought about this a lot.
SPEAKER_01: And I look at what China did. And everyone's going to say I'm pro-China. But what was interesting about China recently is they ratchet up and they ratchet down that free market system. So they allow progress and then they disallow progress when the equity meter goes the wrong way. And so if you kind of think about an equity meter and a progress meter, you have to balance those two over time. Because otherwise what happens is you spring back. And then the springing back is when governments change, revolutions happen, democracy falls apart, autocracies arise, all those sorts of awful things. And really, I would say those cyclical things that happen, I don't want to characterize any of them as good or bad, but the cyclical things that happen with society over time. And so that is effectively what's happening, guys. Like the ultra high tax rate, the regulatory regime, the government coming in and stopping Facebook. I mean, these sorts of behaviors are almost like an attempt to mute and ratchet down both inequity as well as the unfortunate side effect of progress. And I think we're basically punishing excellence.
SPEAKER_02: And that is challenging for long term growth. You're minimizing progress to improve the rate of equity of distribution of gains, right?
SPEAKER_01: And it's very hard. Because by the way, what you're also doing is you're relating a first derivative and a second derivative effect. And so, first order and second order effect. So, it becomes a really difficult thing to… and people don't really see it this way. People see kind of the very myopic view of I got to redistribute wealth, I got to help people that are out of jobs. These guys have only seen their income go up by 10% while everyone else's income has gone up by 40%. And so, politicians, legislators react to that circumstance. But the zooming out is that circumstance arose as we all made progress with respect to security, with respect to health, with respect to food availability, with respect to consumables being cheaper, etc, etc, all these great things that progress has given us. And there's a ratcheting effect. The hope I have is that that ratcheting isn't too binary. It doesn't flip too far back the other way too fast, in which case you have a socialist state arise, a revolution arise, all the things that we've seen kind of come out of… Or people just canceling AP Math in California.
SPEAKER_02: Precisely.
SPEAKER_01: And then and then the rippling effects of no more AP Math and no more SATs is, you know, RORO, like, you know, yeah, fast forward 20… MIT brought back the…
SPEAKER_02: I don't know if you saw this week, MIT brought back SATs as a qualifier after they paused it. I think a lot of people are starting to realize this is a road to nowhere. Sax, what do you think is to Chamat's point, like, is there a solution to get America behind excellence and pragmatic, you know, kind of solutions for immigration? And if there is a way to do that, how would you do it?
SPEAKER_03: Well, I think like we're talking about, you got to kind of unpack the issue. So like we talked about strip border security out of it, don't make that part of it, then I think you got to differentiate between high school and low school immigration, like what you call the point system. I mean, if you look at who's founding companies in Silicon Valley, something like 40% of startups have an immigrant co-founder. So clearly, immigrants bring a ton of entrepreneurial energy to the US. But we also, it's in our selfish interest to make sure that the immigrants were letting in actually have the skills that make them potential founders. So I think it's just would be smart for us to think that way. And you can't even really have that conversation, it seems like today to have more of a skills based immigration system. I mean, who's willing to say that?
SPEAKER_02: Well, you could just say three buckets, you know, here's people who need amnesty, right, because they're being prosecuted, persecuted in their country, and they're here because of humanitarian reasons. Here's a bucket for high performers who are going to add to our economy and create jobs. And then here's another bucket, which is a lottery and a lineup system. Hey, you want to come here because you don't have skill, but you want to come here because the country is so great. Okay, you know, each of those buckets is going to have its own process. And your your odds might be different in each bucket. You know, is that so hard for people to grok?
SPEAKER_03: Right. But you know, we're sitting in the economy. I mean, it's very easy for us to say this, because we are sitting in Silicon Valley. And for us, immigration is an economic good, it's a benefit. But if you are in a part of the country or a part of the economy where you're in a low wage job, maybe you're a service employee, or you're a union employee in the Midwest, the more immigrants that are let in that are low skill, they compete with you and drive your wages down. And that's why people are against it. So that's basically the conundrum is as long as you're talking about immigration as being a single thing, it's going to have a lot of political opposition. That's why we need to, you know, bifurcate it between high school and low skill, high school people and exactly less low skill,
SPEAKER_00: the least if you had to rank them from least controversial to most controversial. I think letting in high skilled labor is probably the least controversial thing. And there is always controversy around this. It's always on the bucket of people for humanitarian grounds, right? Some people agree, some people disagree. Should these people be considered refugees? Should they not? How many of your family members should you be able to sponsor? How many not? Et cetera, et cetera. And that's somewhat controversial. But I think we can all agree the most controversial bucket are folks that would otherwise come that would be considered lower skill because they are the ones that really put pressure in very practical, measurable ways into the economy. And we just have to, to your point, segregate and differentiate how we think about this problem because, again, if you take immigration, the word away and actually just use immigration as an input to this equation on population stability, we have population instability right now. So unless we figure out something between live births and deaths, which I don't think we're going to solve tomorrow, oh, it's interesting. A very large imbalance that our economy in our country cannot really recover from.
SPEAKER_02: You know what it's you sparked my thinking there. It really is a framing issue. We should not call high skilled labor coming here as immigration. We should be flipping that to talent acquisition. We should be looking at it as America is trying to get more talent here so we can win the industries that matter. And if we looked at it as this is talent acquisition has nothing to do with immigration. This is us going out and sourcing the smartest people to come here. So our companies win against other companies in the global economy to create more jobs for American talent acquisition could be something we could be investing in. We should be thinking, how do we win that all the problems that a less the solution
SPEAKER_00: is in some hard working group of men and women of which some will be entrepreneurs who want to be here. You know, we're trying to figure out how to actually build our own chips while there are semiconductor experts getting trained whether here or abroad who would want to be here to do that job on behalf of the United States. We want to figure out climate independence. There are men and women being trained here and abroad who want to be here and solve that problem on behalf of the United States on and on and on and on. And that's what it means to be and I'll use a sports analogy, the LA Lakers. That's what it means to be the New England Patriots. Everybody wants to play for you. And so when you're in that position and you have that branding tailwind, you have to use it to your advantage to stack the deck in your favor so that you're constantly winning championships. Otherwise, you're being really derelict in your duty. And I think, you know, hopefully if people look at the broad population level issue that we just exposed because of COVID, there is a stat in this article as an example. In the county of Los Angeles, we are now in the last 20 years, we've seen a 50% reduction in the birth rate in LA from 150,000 births here to about 100. And if you forecast that forward, you know, before the turn of the century, the county of Los Angeles will have zero net births if you run the...that's insane. So we need to figure out how to solve this problem. Because it really impacts GDP, it impacts all these other issues that Freeberg just talked about as well, the sense of equality and fairness. If we're not creating and growing, we are going to fight over how to split a shrinking pie. And that does tend to lead to revolution.
SPEAKER_02: Yeah, that's when people...it could get really gnarly. We're not growing, entrepreneurs are not coming here, new jobs are not being created. Imagine if Amazon wasn't created.
SPEAKER_00: The historical implications for what Freeberg said are really well defined in history. If you go back thousands of years, you look at every single time, you know, an empire goes through that period of decline. When they have net negative growth, economic growth, and they have this sort of rising populism, what they end up doing is they end up fighting, and they have different ways of fighting, right, but they end up fighting over how to reallocate a shrinking pie. And there are many of those outcomes when they fight that ends up in, you know, really turbulent moments in history.
SPEAKER_02: And that's where this wealth tax... That's right.
SPEAKER_00: That's where we have a responsibility to make sure you don't end up going through, you know, a Russia scenario, a China scenario, you know, and there are more productive ways to solve these problems.
SPEAKER_02: Oh, that's where the wealth tax that was floated, which seems that's the DOA already, but this concept of everybody having who's over $100 million having to assess all their worth and give 20% back minimum each year is that dividing of the pie and maybe they can allocate less money towards...
SPEAKER_00: Can we all agree that like, you know, on the margins, when you make a lot of money, you can and should pay more taxes? I don't think that's a super controversial idea. You know, on the margins, if you are a massive polluter, you should pay some taxes to compensate for the damage you're creating to the environment. These are not controversial ideas. The problem is that, you know, what Sacks said is true. You take a sensible concept and then you pervert it because you have to contort it with all
SPEAKER_00: this language to make it political and it loses all of its value. So for example, you know, why does the administration have to write this law, potential law or proposal in a way that so obviously violates the Constitution of the United States? Are they that dumb? I don't think they're that dumb. But they do it to appease some political aspect of the Democratic Party and then as a result, it becomes DOA within eight minutes of it being announced, Manchin says, this is dead. What is the point of that theater?
SPEAKER_02: It's virtual signaling. Yeah.
SPEAKER_01: Aren't you a donor? You should know, right? What would they tell you? I mean, what's the Democratic Party saying about... I think what they would say off the record is that these were sacrificial totems to the
SPEAKER_00: progressive left, meaning that they do it for window dressing to destroy... It's like throwing a cat a ball of yarn.
SPEAKER_01: It seems like that populist progressive left is becoming a bigger base than it was historically.
SPEAKER_03: In the Democratic Party it is. I'm not sure how big it is, but in the Democratic Party, yeah. Look, it's where all the energy is in the Democratic Party. It's where a lot of the donors are.
SPEAKER_03: That is who's driving the agenda in the Democratic Party today. That is why the Democrats are gonna get schlacked in November. Read Rory Tushar's sub stack. He is the Democratic political consultant who wrote the emerging Democratic majority predicting... This is back in 2002. He wrote a book about how there would be a new Democratic coalition of young voters and minorities and women, and they would come together and that would create Democratic majorities and Democratic presidents forever. And then Obama wins in 2008, and it looks like Tushar's prediction is coming true. And he recently in the last two years has been warning that something has happened that he could never have predicted, which is that working class voters are now moving out of the Democratic Party. Not just whites, but also Hispanics and Asians, even black voters who are working class, they're all moving to the Republican Party. So he believes the Republican Party is losing its national majority. Why? Because progressives have taken over and on cultural and social issues, they are much more liberal than the working class of this country. So basically what's happened is the Democrats have become a professional class party, and the Republicans are in the process of transforming into a working class party, and that's turning everything upside down. But ultimately, you know, with Youngkin winning in Virginia last year, and I think the Republicans on a generic ballot are up like, what, plus 10, plus 12, I mean, they're gonna have a huge, I think, wave in November. You know, you gotta remember that professionals, meaning college-educated voters, are only about a third of the electorate, I think about 37%. And then the other 63% are working class. The working class does not like this extreme socio-cultural progressive agenda. They don't like seeing their statues ripped down. They don't like this sort of, what they see as kind of this antagonism towards American history and American icons. They don't believe in socialism, you know, and so on down the line. And the Democratic Party is increasingly speaking only to itself. I mean, they are in an echo chamber. And I think these progressives are gonna have to lose a few elections before they realize. I mean, the same thing happened to the Democratic Party back in the 1980s, right? You had Ronald Reagan, and then George Herbert Walker Bush win three landslide elections, 1984, 88, and then the Democrats nominate these horrible candidates, Jimmy Carter, Walter Mondale, Dukakis, and then who comes along? Bill Clinton comes along. Easy on the Greeks.
SPEAKER_02: Easy on the Greeks. Dukakis was pretty great.
SPEAKER_03: Okay, like we found the one fan. We found the one fan. He was terrible. He was terrible. Yeah, who comes along in 1992? Bill Clinton. And he has this whole new faction within the Democratic Party, the DLC, and his explicit mandate was to lead them back to the center. And then he chooses Al Gore as his running mate to double down on that image. I don't think Al Gore actually was that centrist, I think, but his image at that time was that he was pretty centrist. He was. So you had, yes, I mean, I think at that time, so their Democratic Party had to lose for
SPEAKER_03: about 12 years before they nominated a candidate and put him at the leadership of the party who could drag them back to the center. Now, listen, I mean, all we have right now are foreshadowings of this. We have the Youngkin victory last year. We have the fact those three school board members in San Francisco got kicked out. We'll see what happens to Chasen Boudin on June 7th. So we're getting these glimmers, and I think November will be a big test. But where I think this thing is headed is that the working class voters of this country don't like this radical progressive shift in the Democratic Party. And the Democratic Party is going to keep losing until they're willing to make changes. Well, and immigration is just such an easy one.
SPEAKER_02: And courting the working person is what the Democrats did forever. So I don't know how they how they can screw this up.
SPEAKER_03: But remember, working class voters don't work class voters are not in favor of immigration, Jake. They do not want unlimited number of immigrants coming. They don't want unlimited, but they would like to see their family members driving their wages down. But they do want their family members to be allowed in.
SPEAKER_02: So for the folks who know you talk to you talk to Hispanic voters who are citizens in
SPEAKER_03: America, they are not in favor of unlimited immigration. Because it creates weight pressure for them. I'm telling you, it's not it's not like what you think. The more the higher you are economically in the social strata, the more professional you are, the more you like immigration. Because like for people like us, we like immigrants because they found companies and we invest in them. We see the economic vitality that they bring. But if you are a working class, okay, you do not want that wage pressure. You just don't. So unless the democrats figure out a way to talk about it the way we're talking about it, where we separate high skill and low skill, they will lose with that message. All right, let's get into some other things happening in the market.
SPEAKER_02: SEC is proposing a new set of rules to regulate SPACs. I wonder if anybody here can chime in on this. Well, I wrote a I wrote an editorial in Bloomberg, basically a year ago, spelling out a bunch
SPEAKER_00: of new regulations that I thought the SEC should adopt. I adopted a lot of them in this draft. So I think that that's really good. They missed a couple of key things. And this is again tying back to this other thing. When we're in this phase right now where we are really questioning how capitalism should work, I think that there are two reactions that people can have. One is you pass more regulation that entrenches existing advantages. And the other is you pass regulation that either deregulates or democratizes the market. And if I had to cast the half of my proposals that the SEC adopted, I would say it falls more into the first bucket than the second. And Jason, you've spoken to the second bucket of laws that the SEC could also change, which is, you know, it's in their power to give people an onramp to prove that they are qualified and accredited so that they can participate in some of these really, you know, vibrant ways of making money beyond just investing in the S&P 500, like investing in startups if you if you're educated and capable of doing. The SEC at the same time proposed a bunch of legislation around reporting requirements for ESG. And if you look at both of these two buckets of laws, I think they're rooted in good ideas. And I think that there's some good concepts in it. But who really wins? I think if you look at it, the American Bar Association had a huge victory here because the amount of incremental regulation is going up, which means, you know, what was a 300 page filing with the SEC will now be 350 pages, right? I think that benefits lawyers. I think it benefits consultants. I think it benefits the accountants. I think it benefits the ecosystem people that participate. It's not so clear how normal everyday folks benefit from a lot of this stuff. So I think if you strip it all away, what I would say is, I think the SEC is trying to do the right thing. But I would really encourage them to do the second half of what they should be doing, which is making these onramps better built.
SPEAKER_02: Generally speaking, what do you think happens in the SPAC space? We had 600 of them. It's going to consolidate to the 10 of us that know what we're doing.
SPEAKER_00: Just like, you know, look, the IPO rules are extremely sophisticated. Did it hurt Morgan Stanley or Goldman Sachs' IPO business? No, it just meant that the 95 small banks that did IPOs went away and it consolidated to six and the league tables, you know, just churned between the six. JP Morgan one year is the top, you know, then it's Morgan Stanley, then it's Goldman Sachs, then it's B of A, then it's Credit Suisse. Similarly, SPACs will consolidate around six or seven players and you know, will do most of the business.
SPEAKER_02: What do you think, Friedberg, of this new SEC announcement that they're considering climate disclosures for public trading companies? This would basically not only what they're doing in terms of consuming or, you know, allowing greenhouse gases emissions, but also this scope three concept, your inputs, what is your supply chain doing? And what are your consumers doing? So if you're making the iPhone, what happens to the iPhone when the consumer gets rid of it? Or what did it take to get those minerals out of the ground to make the iPhone? What do you think? Is this a net benefit? Is it the lawyers win? Or does measuring all this actually mean we're going to see publicly traded companies manage it better? A lot of opting into it already, like Google and Apple are doing it on their own accord. But what do you think generally of this regulation? Well, I'll say, let me just say something on the SPACs and I'll answer that question.
SPEAKER_01: You know, if you read the comment, the first SEC proposed rule, it was to amend the definition of a blank check company to make the liability safe harbor for forward looking statements, such as business forecasts unavailable and filings by SPACs. So you know, this was, you know, I think one of the primary points of appeal over the past couple of years, we've all been private market, sophisticated private market investors. When we take a pitch or hear a pitch from a company, we all have the experience and the know how, not always correctly, but at least we know what to look for, what to ask. And over time have learned through our wounds, and our failures, to appropriately diligence forecasts and understand what they mean and what they say. And, you know, because the public markets historically through an IPO are available to retail investors, you know, generally, whatever the definition is of unqualified or, you know, folks who may not have the level of sophistication that, you know, some regulatory body has deemed is needed to be able to do that level of diligence. The statements that are made in an IPO in an S1 need to be kind of factually referenced, referenceable. And that's not true when it comes to forecasts. And that's why they're not included in S1s in an IPO. But in a SPAC, the appeal was you can tell your forward looking forecast, paint the rosy picture like you would for a startup. And then theoretically, the investors should make an assessment of the risk and the upside and the objectives that the business is saying they're going to go shoot for and achieve. And it's pretty evident, and I think we all knew this, you know, coming out of last year that, you know, many investors made investments on the basis of those forecasts, you know, being to some degree, reasonably achievable or likely achievable. And it turns out that in many cases, they were not and were not achieved. And that's the big motivation here. So the real fundamental question with respect to Chamath's point about markets is how much do you want to have the government and a regulator play the role of deciding who is and who isn't sophisticated enough to make an assessment about a business's forward looking prospects? Or should we simply keep all forward looking prospects or, you know, forecasts like this, you know, out of those documents? And it's an important conversation to have. Because for years, people have been saying, I want to invest in private companies, but I'm not a qualified investor. Therefore, I'm only going to be able to invest in public companies. And as we're seeing the problem with investing in private companies or speculative companies is that you're investing on the come and more often than not, that doesn't end up happening. And that's a really hard lesson to learn. And SPACs have kind of forced the retail market that have not historically invested in private companies to learn that lesson very fast.
SPEAKER_00: This is why by the way, in my what I what I was asking the SEC to do on top of the things that they already did was I said, make us all invest our own money. You know, make the sponsor really monetarily at risk. I've invested a minimum of $100 million in every single deal I've done as a SPAC sponsor. That's a lot of money, more skin in the game and disclosing that would be great.
SPEAKER_02: And maybe even having a clearinghouse where you could see the percentage of cash to the ultimate raise that the promoter has that stuff for great all of that stuff, Jason is
SPEAKER_00: in the spirit of disclosure and transparency. I just – But you still think it's important to have forward-looking statements in SPACs.
SPEAKER_01: I mean, if that ends up becoming, you know, the cornerstone of this proposed regulation.
SPEAKER_00: I don't think it's a cornerstone. I think the thing is that there are really important businesses that need good stewards to help them get into the public markets to raise money to fund their business. And there are some people who really understand that and there are many others who don't. And the thing that the SEC should make a decision on is whether just having a bunch of middlemen serves a market better or having a combination of some middlemen and some principals all competing is better. Because remember what – like what is capitalism really? You have these trapped sources of money, right? When you buy an equity, right, or you buy a bond, you're putting money into a trapped asset. It's an unproductive asset. It may yield some return. But it's not really generating it. It is dead money.
SPEAKER_00: Capitalism is about creating an incentive for you to take that money out of that dead asset, that unproductive asset, and put it directly into the hands of somebody who will make it productive. I'm going to, you know, build some oil fields. I'm going to make – A battery factory. A battery factory. I'm going to make shoes. Product service. Yeah. Whatever it is, right? And so, you know, having more competition that creates the incentives for that process to happen, to go from point A to point B, should be the goal of the government.
SPEAKER_00: Because in the absence of that, again, going back to the previous conversation, you're going to basically shrink the incentives of productivity. And I don't think that's what anybody wants to have happen in these instances. It's such an easy solution to all of this.
SPEAKER_02: We have a test if you want to drive a car. And if you want to drive a big car called the truck, you have to get a different test. You want to drive a motorcycle? So I didn't take that. By the way, Jason, I just want to – Why not have a test?
SPEAKER_00: You brought up a really good point earlier, and I just wanted to put a fine point on what you said. Yeah. Let's just say all these companies, that's all of our startups included, will now, when we go public, have to create these disclosures around scope one, scope two, scope three emissions. And there's this weird concept called materiality that exists in law, which will now, again, have to get adjudicated. Let's say Apple doesn't disclose what's actually happening in their factories. Somebody can now sue them because they will say, that's a material disclosure that you didn't disclose. Well, guess what will happen? That will wind its way and meander its way through the courts. It'll take years. There will be tens and tens of millions of dollars spent on that litigation because Apple will vehemently defend the right that it wasn't a material disclosure because the implications otherwise will be measured in the billions or tens of billions of dollars. So who really wins? Consultants win. Yeah. Trial experts win. The lawyers win. Lobbyists. Lobbyists.
SPEAKER_01: I just want to frame this up for a second because I think it's important for people to think about costs that are external to the business operation, meaning costs that are borne by the broader society, by other members of society, not the business itself. So let's say that you're a company that makes products with a lot of sugar or cigarettes. We know when people consume a lot of sugar, cancer goes up, obesity goes up, diabetes goes up. The cost for cancer treatment, the cost for diabetes treatment, the cost for medical treatment associated with smoking or sugar or alcohol is borne by a health system where the ultimate cost is shared by a large group of society, by all number of members, whether that's a public health insurance program or a private one. There's a group that shares that cost. And so you as a consumer are not paying that cost today. The question is, should you be paying that cost? And this is true for CO2 emissions, for carbon emissions. You drive a gas-guzzling car, you purchase gasoline, there is carbon that goes in the atmosphere. You're not going to end up individually fixing the carbon out of the atmosphere later. The rest of us are going to have to bear that cost as our homes burn down, as floods cause houses to wash away, as all the catastrophe that we're all predicting is going to happen starts to happen. So the question is, how do you account for those external costs? And then the second question that will arise in a market-based system that we have is, who's going to pay for those costs? Right now, we all assume those costs and we don't charge anyone for them. We don't charge anyone for the obesity epidemic. We don't charge anyone for the cancer epidemic associated with cigarettes until we had that big legislation that the DOJ knocked that off. We don't charge anyone today for carbon emissions that we're all going to have to pay the cost for. And so the first step is identifying and quantifying the external costs of the product or service that you're providing and deciding whether or not to tax the consumer of that product, whether or not to tax the seller of that product, and ultimately how to transition that capital back to the repair mechanism for pulling the effects of that product back out of the system. So in this analogy, Coca-Cola, if people drank too much of it and got fat, would be responsible
SPEAKER_02: for their diabetes treatment?
SPEAKER_01: Well, this goes back to the sugar tax point, which is, should we have a sugar tax because there's a quantifiable effect that too much sugar has on human health, obesity, diabetes, cancer. I mean, so that's an argument, right? And so in order to do that, the first step is disclose the risks, disclose the associated conditions that arise from the product or service that you're offering. And I think that's part of the intention. And a lot of very smart, progressive people in capital markets, some good friends of mine, we spend been taught have been talking for years about the importance of this level of disclosure, because it is the first step in truly accounting for climate you're talking about. Yes.
SPEAKER_02: For climate. Yeah, pretty controversial. Actually, you think we should charge, we should charge Coca Cola for diabetes?
SPEAKER_01: Well, ask the question of should you charge for a carbon related product for Okay, I'll
SPEAKER_02: ask both carbon. Should corporations be responsible for the downstream carbon from their customers and the upstream inputs at least disclosed inside, who is ultimately going to have to pay for
SPEAKER_01: that? The answer to the former is yes.
SPEAKER_00: The answer to the latter is, if you you know, there's a there's a term shit in shit out. Yeah, garbage in garbage out. I've spent a lot of time in climate. I know what's measurable and what's not. I've looked at the space a lot. And I just think that there is no credible way to execute on David, what you're saying you want. All it's going to do is going to create a bunch of money that flows to consultants that create BS nonsensical reports. And the downstream and the downstream implication of that will be lawsuit upon lawsuit that gets adjudicated by the courts on this concept of materiality.
SPEAKER_02: You think we should be recording a free burger now you agree disagree or agree with trauma? No, I agree it should be recorded.
SPEAKER_00: I'm saying Oh, that's not possible. I'm saying the only winners in this will be the consultants.
SPEAKER_01: You agree with that? Look, I'll agree these carbon markets are absolute BS carbon sequestration mechanisms are absolutely yes. I mean, none of this stuff is real right now. It's all fraudulent markets. It's all grifter. That's all BS. You know, trash, yeah, I'm not trying to be too disparaging with everyone. There are good actors out there and good intentions for sure. There is a tree, but there's a lot of ways that you can kind of take this stuff apart and say, you know what, this doesn't actually add up. And there's a good business to be out in the meantime, and everyone feels good running that business.
SPEAKER_00: Simple example, Jason, how will you know that a sensor that's on a flu of a manufacturing plant is accurate? How do you know that it's not been doctored? How do you know? Just to say just a very, very simple question just that.
SPEAKER_02: Well, when it came to Volkswagen, a leaker leaked the information and that's and the press got on it. And that's how it was regulated. It was it was in the review mirror. That's how Volkswagen got busted. So we're gonna we're gonna fix a bunch of whistleblowers.
SPEAKER_02: I mean, that's what happened also with an RJ of Nabisco and the cigarettes as well. What changed as a result of that?
SPEAKER_00: Nothing?
SPEAKER_02: No, in the cigarette industry. That led to the largest fines in the history of corporate America. I think up until that time, we still don't have a tax.
SPEAKER_00: We still don't have a pool. We have a tax. We have a big tax on cigarettes.
SPEAKER_02: Yeah. To lower consumption. Yeah.
SPEAKER_00: Yeah. But we don't you know, we don't force these companies to basically subsidize a portion of our health care costs. Every time somebody shows up with lung cancer. It's not like we say, you know what, that's going to be half borne by RGR Nabisco.
SPEAKER_02: Yeah, so I mean, this is the measurement can't be bad. But I guess it's what you're saying the magneto I'm saying the concept is good.
SPEAKER_00: The measurement is literally so terrible as to be worthless.
SPEAKER_02: And so wouldn't there be a bunch of new companies that come up though, that then create the auditing trail. So you say, hey, we're going to put that you have to have one of these companies put the sensors on your factory and earn some young after all.
SPEAKER_00: It's a small oddity of, you know, again, there's a lot of companies, for example, this is where Silicon Valley, I think it's a little, you know, caught up in their own nonsense. There's a lot of companies in Silicon Valley that have made a lot of money measuring bits, right? And then there's analytics companies, because the exhaust of a tech company is sitting in some log file somewhere. That's just a matter of being parsed, right? Do some ETL, do some transformations, put it in some beautiful table, run some query on top of it. Lo and behold, you can know everything about your company. When you're measuring atoms, it's just a little bit more complicated. And I think that people underestimate that complexity. So while the desire of this is good, I think the whole point is that, you know, if you draft this language the wrong way, again, my own, I want to be very precise what I'm saying. What I think it will do instead of actually causing more conformity and have people emitting less carbon, it'll create a shadow industry of measurement and consulting around this industry while people debate materiality when they get caught. That is not the point of this. But when you draft laws like this, you have to think about these implications.
SPEAKER_02: So is there an easy answer here or just no easy answers? In terms of if we want companies to be somewhat more knowledgeable and responsible in their carbon emissions? Well, I think that the responsibility ultimately comes from the end consumer, buyer, customer
SPEAKER_00: of a product. Because if they have an alternative that offers them those tradeoffs, whether it's at a higher price or a lower price or the same price and they adopt it, then these companies really pay attention, right? Because ultimately, what they really care about is their downstream profitability. Otherwise, I worry that a lot of what's happening in corporate America today is basically some form of greenwashing. You know, so for example, like we joke, but it's true. When you look at these carbon offset markets, these indirect offset markets, what are they? A company spews all kinds of gnarly stuff into the environment. They hire a consulting firm. I just want to explain to you how it works today. They hire a consulting firm who uses an Excel spreadsheet to guesstimate how badly they have polluted the environment. Okay, it's a fundamental guess. Then they go to another company that says, well, can you buy me some equal and offsetting amount of credits? And that company then will go and plant some trees or buy some trees, claim the trees exist, measure and impute again in a different Excel spreadsheet how much carbon capture is happening by those trees. Do we know that those trees aren't getting sold 10 times over to 10 other companies? We don't know that. So my point is that we have a lot of work to do to solve these problems. I would rather see again, raw capitalism solve this problem. And I think in climate change, the most productive thing we could do is lower the barriers for trapped unproductive capital to get into the hands of really amazing scientists and entrepreneurs who are building things that can measurably remove carbon from the environment.
SPEAKER_02: And there's really two ways to do it. One is have a test. And the other is on the roads, we have a speed limit. So if you are a non affluent person already, but you want to dabble in this, it's a very simple way to do it. She might I propose, have a written test just like you have a handgun or a car test a driving test. And then how about you can deploy 10%? It's so incredible.
SPEAKER_00: You just said this, you can allow an 18 year old person to buy an AR, give me the name of the gun AR 15, and a car and go speed down the highway, but they're not allowed to invest
SPEAKER_00: in go puff.
SPEAKER_02: Yeah, no, they're too not sophisticated. You can shoot the bullets in the air while you're going down the road is going on. Well, I mean, there's no path to it. That's the frustrating part. Like in some places, it's hard to get a gun, you got to take a eight hour test other places, you can just buy them on wherever you allow 18 year olds, you can allow an 18 year old
SPEAKER_00: to take psychedelics and marijuana legally, yes, open in a market by a gun, but they are not like secondary shares of stripe.
SPEAKER_02: No, they're just Yes. And so this is the stupidity of it. Well, here and here's the other thing, you can have two different things. You have the test. So now you know, the person is educated. But you could also say, hey, listen, whatever's on your tax return for the last two years, you can invest 10% of that a year in, you know, private companies. So if you made, I don't know, 150,000 the last two years, you made 75,000 a year, okay, you can put 15,000 other companies, you will allow people to go and work for startups,
SPEAKER_00: to help build the enterprise value of a startup. Let's pick our favorite startup like an Uber, but not invest in their equity before they go public, right?
SPEAKER_02: You're not sophisticated enough to build it, you're sophisticated enough to drive for them
SPEAKER_00: for years to help them build a $50 billion company, but not buy a piece of that company along the way. That doesn't seem right either.
SPEAKER_02: But you could pull over and buy scratch off tickets and lottery tickets to the cows come home. But you can't buy a scratch off ticket in a store makes no sense.
SPEAKER_02: All right, so actually been quiet and all of this I know that you hate the environment and regulation. What's your thoughts?
SPEAKER_03: I'm not I'm just not deep in this topic. So I don't want to weigh in. All right.
SPEAKER_02: Well, here's when you are deep in Facebook hired a GOP lobbying firm to smear tik tok according to the Washington Post. Here's some of your deep head is the GOP.
SPEAKER_01: You said he's like into destroying the environment or something. Yeah, no, he doesn't care about the environment.
SPEAKER_02: So he sucks is never going to go into the forest and even go near a tree. He doesn't go outside.
SPEAKER_00: He's in a sealed bedroom. He closed the curtains. He's like, Oh, beautiful view of the sky.
SPEAKER_02: Oh, nature like the Pope, his car has one of these things.
SPEAKER_00: He doesn't even have to sit down. It's just enclosed. He stands up his bulletproof glass. You know, he just waves as he goes by.
SPEAKER_03: I go outside sometimes I'd much prefer going to an outdoor shooting range. So you go in shooting center outdoor one.
SPEAKER_02: So this is a really crazy story teller runs broke it. Facebook paid the GOP lobbying friend. Actually, I had her on the show. Here is the excerpted from the internal targeted victory email obtained by the Washington Post quote, get the message out that while meta Facebook is currently a punching bag, tik tok is the real threat, especially as a foreign owned app that is number one in sharing data, that young teens are using bonus point if we can fit this into a broader message that current bills, proposals aren't where state attorney generals or member of Congress should be focused. So what do we think? I mean, we've talked here many times about reciprocity. We can't have our social networks in China. Why should tik tok be here?
SPEAKER_02: I think we all agree.
SPEAKER_03: It sounds like they want to do a PR initiative around the points that you've always made on this pod.
SPEAKER_02: Exactly. No, I mean, that's the that's the they could be right about this, but doing a dirty tack.
SPEAKER_03: It's a dirty trick in a way for them to deflect attention from the cells onto some other companies problems. So there's something distasteful about that. But the point that they're making is kind of true. I mean, we should not allow I mean, I'm not saying we shouldn't allow them but I think
SPEAKER_03: what you think tik tok should be allowed in United States really?
SPEAKER_02: I don't know about that.
SPEAKER_03: But I just think that what do you think about problems people have with Facebook, they should have them like 10 x with tik tok. That's kind of my point.
SPEAKER_02: A thousand percent in agreement on this tik tok is run by a country that we wondered, do they care about the data and then they literally passed a law. If you want to run your company, the government has to have the data.
SPEAKER_00: I have fallen into a tik tok rabbit hole and I would like to come clean with you guys. There's something there's something on tik tok called sandwich Bros. What are these guys? These guys are guys that make sandwiches. And then they cut the sandwich and then they open it up so that you can see what's in the inside of gooey cheese. I mean, this is no some of these fucking sandwiches. These guys are making Sammy, dude, I have watched an hour straight sandwich talk. Wow. Wait, here's the best part. So then there is this woman who I thought was going to be incredible. She's like, you know, I'm tired of these sandwich Bros. I'm going to be the first woman that really breaks through making sandwiches. I was like, you go get it. And she made a vegan sandwich. God damn it. And I was like, where's the meat? I wanted to be I wanted to be deep into it. But like, you know, chicken,
SPEAKER_02:
SPEAKER_00: roast chicken. Oh, my God. Bacon, avocado, bacon, bacon, maybe some pickles in there.
SPEAKER_02: Get a little Yeah, I mean, this is the thing that I find so chicken chicken masala burrito.
SPEAKER_00: That's probably my one. And the guy made it from scratch, like everything from scratch. I love that.
SPEAKER_02: Here's the problem. It's such a compelling product. You feel so terrible using it. So you love it at something and then you feel very vapid for having used and you have regret. And then the Chinese are running it. And they're programming our children and have all their data and locations. You know, it's a lot of conflicted feelings. What do you think you're trying to program in me with all this sandwich stuff?
SPEAKER_02: Maybe you're too then you need to do sandwich. Maybe they're trying to be vegan.
SPEAKER_00: But that sandwich yuck. It looked horrible.
SPEAKER_02: I think this use UGS they're trying to program. No offense again. But yuck. That's what they want. They want you to get fat. What are you seeing on your chick talk feed right now? freeberg since you're so obsessed with your phone? And should should take talk be banned? Should the Chinese be allowed to program our children with their algorithm? Yes or no freeberg?
SPEAKER_01: So I can't look at that.
SPEAKER_03: Well, just mentioning the product makes me want to use it. So it's so addicting.
SPEAKER_02: What is so addicting about it? Freeberg tell me the best vegan sandwich you ever had like the best one like is there one
SPEAKER_00: that sawdust? quinoa, quinoa, cucumbers, there's a great sandwich shop in Berkeley guys.
SPEAKER_01: None of you I don't think ever go to Berkeley. I live in Palo Alto. It's too Yeah, Berkeley is I'll get one. I'll actually get one over to you.
SPEAKER_02: What what is it? What's on avocado sprouts? Yeah, there's sprouts. I don't like actually, there's one I like that's got the the feta cheese like the real
SPEAKER_01: really good sharp, salty feta cheese. Yeah. Okay. So feta cheese is actually voted one of the best sandwich shops in California. I think.
SPEAKER_00: Yeah, yeah. Really good.
SPEAKER_01: No, I made myself a tempeh avocado. What for lunch today? Oh, yeah.
SPEAKER_02: That's Yeah, that's fantastic. You know what I was gonna do that myself. But instead, I just decided to slam my hand with a hammer. enjoyable. Like smash my hand bag.
SPEAKER_00: I had crab ravioli. Oh, wonderful.
SPEAKER_02: It's absolutely great. You murdered those crabs. Delicious. Okay, but let's just go around the horn. Should yes or no? Tick tock be banned? Should a Chinese company be allowed to have a social network at scale in the United States? Yes or no? Friedberg?
SPEAKER_01: No, yes, I don't think that we should be restricting the products and services that people choose to use.
SPEAKER_02: Even from a communist country that is likely spying on them. Okay, got it. We know you stand sex.
SPEAKER_03: Well, I'd want to know that they're not that it's not spyware. Right. So yeah, if it's spyware, that's illegal.
SPEAKER_01: If it's illegal, stop it. But like, so you're saying you trust you trust the Chinese government?
SPEAKER_02: No, I don't trust them.
SPEAKER_03: It would be a serious it would be an issue. I'd seriously look at I might come out on the India side of things. But I'd like to understand a little better like what the India side of things being that
SPEAKER_02: India has a band. Yeah, they they're smart. Indians are smart. I would I would think about that. I just think it's a it's a slippery slope.
SPEAKER_01: Then you end up seeing China ban iPhones. And I mean, you know, the whole thing kind of already banned.
SPEAKER_02: They already banned Twitter, Facebook and Instagram in their country. There's still a lot.
SPEAKER_01: There's a big consumer market in China for us goods and services. And it just seems like a slippery slope. Where do you say I think you guys nailed it, which is that I think these things have to
SPEAKER_00: be quick pro quo. It doesn't make any sense, in my opinion, for us to allow a non American company to thrive where in that same end market, our products are not allowed to compete. So I think there are two things that matter to me, which is that, you know, if we're going to allow TikTok to thrive here, it seems like there needs to be some version of a deal that says Facebook, Google, you know, these core products and services just need to have a chance where consumers can vote. That's one thing. And I do think separately, what David said is really importantly true. And I don't think it applies to just TikTok. But whenever a product gets to a certain level of scale, and we can define what that threshold is, but it's probably in the half a billion to billion mal kind of range, monthly active users range. You do have to weigh of like, you know, going through the source and making sure there's no crazy spyware in there. And I don't know exactly how to do that. But I think that that that should just be a general expectation for any product because look, let's let's be honest. And I've we've had this conversation before. You don't think the odds are high that at some point, some very talented knowledge worker that is on an immigrant visa inside of one of these large tech companies isn't actually working on behalf of a foreign
SPEAKER_02: Oh, they had Twitter had it they had two people from the kingdom right there.
SPEAKER_00: So So my point is, I think that that these things are probably true, right? Like in the 10s of 1000s employees that work in big tech, there's probably at least five or 10 of these people that work on behalf of foreign government. So we don't know what they may or may not have introduced in certain elements of the code. So it's not unreasonable to fund a, you know, an organization that can audit this code base. But I think that I would rather let them stay in order to open up that end market for our products.
SPEAKER_02: All right, we have to wrap on this. A free break a couple weeks ago, you outline the pasta, the potential of famines caused by Putin's insane, you know, war in Ukraine.
SPEAKER_01: That's not what I said, but sure. Okay, I like the framing and framing the way I want, but you commented on the possible
SPEAKER_02: famine caused by the insane war. Again, not what I said, but yeah, well, let's go to famine before Saxe loses his mind about
SPEAKER_02: Biden's quote of regime change, which I'll let you end on section get your victory lap. But somebody came for you and said, Hey, listen, free break basically doesn't know what he's talking about. Because commodity markets are showing that India and other folks are going to step up and there's not going to be a problem with famine. So can you unpack that for us?
SPEAKER_01: I will tell you that we are already seeing a lot of scrambling happening for redundancy in these commodity supply chains. And there's a couple of issues, which I highlighted before I'll highlight again, number one is just the ability to export. So while there may be product commodity products sitting in these markets, getting them on ships out of Russia, out of Ukraine, even if sanctions and trade restrictions are lifted and make them available, it's very difficult because a lot of the carriers are concerned about insurance and liability, as they would be forced to go into a port and do a transaction with an entity that they're supposed to not do transactions with. So there's a lot of reasons why these ships are not going to port, not picking a product and not bringing it to where it needs to go. Critical risk in Africa in the near term. So this is an acute problem with respect to transport. The next problem is with respect to planting. As of this week, and I'm going to put a couple of links in here. And these links, Nick, are not in order with respect to what I'll say. But I'll kind of put a bunch of these things out here. But there is an expectation that we could see up to an 80% decline in planted acres in the Ukraine. And there's a bunch of really good anecdotes in this particular story about how farmers are scared about going out and planting because groans might blow them up. I mean, look, you're in the middle of a war zone, you're not in a rush to go out and plant. And so there's a lot of planting that needs to happen in order for us to have the expectation of the supply coming out of the field in about six months. So that's kind of the second stage of the problem is a large export market for goods coming out of Ukraine and Russia. We might have a kind of significant reduction in inventory as the number of acres that are planted goes down. And then the third thing that I highlighted before, which is absolutely still very true, and I have put some data in here that you can all look at, is related to the price of fertilizer. So, fertilizer prices through the roof because nat gas has gone up, so ammonia prices have gone up, potash exports are prohibited from Russia, so potash has gone up. And so as a result, we're seeing fertilizer prices shoot up. And in a lot of countries, what I've included here in this particular link in the chat, and Nick on the YouTube, you can kind of put this on the screen, but there's a guy named Gary Schnitke. Gary is the ag economist. He's like the number one ag economist in the world. He's at University of Illinois. Everyone reads all his stuff in the industry. This guy breaks everything down to unit economics numbers, helps people make decisions about what to plant, when, what the economics are. And he highlights the current economics for planting in Illinois. Illinois is the largest corn producing state in the US and a critical supplier of our national kind of food supply. And he points out that as of right now, you would have to invest in Illinois about $810 to have a $243 return on corn because the price of fertilizer has gone so high. So, you invest $810, you expect to make a little over $1,000, and these are not assuming rent. The problem is when you factor in the cost of rent, the average rent in Illinois is $227. So, a lot of farmers in Illinois rent their land, about half do. And so, for a lot of farmers, it's actually uneconomical, not just in Illinois, but around the world now where the cost of the inputs, the cost of rent, the cost of production exceeds the expected profit coming out of the farm. And so, farmers are not going to plant. And so, we're seeing kind of a major issue with these farmers around the world kind of making planting decisions right now that are informed by upside down economics. This is being monitored. Fortunately, in the US, the USDA reported today that it looks like the price of corn is such that a lot of farmers are going to go back and plant soybeans. And we're seeing basically a historic planting survey coming out today that says farmers are in fact going to go out in the field. They are in fact going to plant. But this is not true everywhere. We haven't done the calculus on it yet. But there's a ton of anecdotal support and a ton of survey data that's coming out showing that farmers aren't going to plant the acres that they normally would plant because costs are so high. That means there's going to be less production over the next year. That means famine hits us in a year. That's a big problem.
SPEAKER_02: Sachs wants to know why they don't just use DoorDash or Uber Eats to just order more food if they can't get the wheat. This is not what's going through David's mind right now.
SPEAKER_00: David's mind is... David is honing in, he's like LeBron in the fourth quarter. There's a minute left. He's like, everybody get out of the way. Get out of the way. Just iso ball. He's going to do his iso. He's about to play iso ball. Clear out. All right.
SPEAKER_02: Here we go. Three, two, one, David, go. All right, here we go. So right as we got off air and I was defending, hey, listen, you're mind reading Biden. He's never said regime change. You got to give him some credit here. You're taking madman Putin's, you know, version of events over our own presidents. And then 12 hours later, I'm on the ski lift and crazy grandpa decides to say for God's
SPEAKER_02: sake, this man referring to Putin cannot remain in power. Of course, the White House walked this back but go ahead and take your victory lap sacks. Oh my god, am I getting an apology here from J Cal to
SPEAKER_03: an apology, you know, I was right, but you said I was it was basically pro Putin because
SPEAKER_03: of what I said. And now you're admitting that I was telling the truth.
SPEAKER_02: No, I admit that. Biden crazy grandpa said something he shouldn't have said. And that maybe that reflects truly how he feels. And right, that's called so in Washington, they call it that a Kinsley gaffe, a Kinsley
SPEAKER_03: gaffe, the New Republic editor Michael Kinsley, who said, a gaffe in Washington is when a politician accidentally tells the truth. That's what Biden did. He actually told the truth about what the administration policy has been. Yes. And you know, you can see this in the fact that look who's playing peacemaker right now in these peace conversations. It's been Macron from France, it's been enough Taliban from Israel, it's been Iran from Turkey, it has not been anyone from the United States, we've been strangely absent. And to the extent we said anything about the peace process, it always seems to be us throwing cold water on it. So there's been a lot of people, you know, prominent commentators like Neil Ferguson, who I quoted before, and others who have speculated that the United States' goal here is not a rapid resolution to the conflict, but rather to protract it in order to make Russia bleed in order to destabilize and topple the Russian regime. I think it was actually quite...and the problem with that is it's very dangerous. I mean, just look at what Freiberg just said about the food insecurity that's causing. It is very dangerous for us to protract this conflict so that, you know, famine could be worse, the war could spread, it could degenerate, we could get drawn into it somehow. We want this thing to be over as quickly as possible. And I think it was actually the Biden-Gaff net-net was a very positive thing because they had to walk it back so quickly. And severely. And severely that it basically...it showed the whole world and, you know, the media and administration, no, we really need to end this quickly. We can't be dragging this thing out. So I think by stating what their clandestine policy was so clearly, it forced them to have to disavow it. And the only people who were upset at the end of the day were these, like, neocons who were like, no, no, no, what Biden said is true. We should try and topple Putin.
SPEAKER_02: Yeah, theoretically, he should go, but not right now. Right. It's like, well, which is it? Everybody had to disavow it.
SPEAKER_03: And that was actually very clarifying for US policy because regime change should not be our goal.
SPEAKER_00: I think the administration said something to the effect of he was speaking as a man as a president.
SPEAKER_02: I mean, let's be honest about Biden. I mean, they don't know what he's gonna say next. I mean, he's his...I mean, I don't mean to, you know, speak ill of anybody, but cognitively,
SPEAKER_02: this is a huge gaffe. It's a huge mistake. We're trying to resolve this thing. And then you give Putin exactly the ammunition he wants. Look, it's regime change, see? And I think what we may have here is two crazy grandpas, one that wants to put the USSR back together, and one that wants to be the person who ousts Putin. Neither of those is what the world wants.
SPEAKER_00: It's a real bummer that we are kind of on the second stage here, just idling around looking around while these other countries are sort of creating a, you know, almost like this new world order around us. That's a bummer. Yeah.
SPEAKER_03: We played our hands, right? We played our hand very badly because we keep intervening in all these countries where there's no upside. I mean, I keep talking about it. All of these wars where we spent trillions and we got nothing out of it. You're a peacenik. We like it. I'm just...I don't see the... Peace is a beautiful thing. I'm a realist. Beautiful thing. First of all, I do like peace better than war, but I don't understand the point of going to war when there's no vital American interest that's been jeopardized. Our security is not jeopardized. Our economy is not jeopardized. In fact, us protecting the war is going to jeopardize those things. So I don't get what American policy is designed to achieve or has been designed to achieve for the last 20 years. We've just been stumbling around the world, making all these like virtue signaling statements about values. And then meanwhile, we end up like bombing the hell out of these countries. Well, the Middle East was clearly for oil and energy. Iraq, Libya, Syria, Afghanistan. Let me be honest. Those were about oil.
SPEAKER_03: There's no oil in Afghanistan. That was our vital interest. What were we doing there trying to build a new state a new, new sort of democracy in Afghanistan? They were it was revenge for 9-11. Yeah, that was legitimate. That was a legitimate reason to go there, which was to get Osama bin Laden. That was the just cause whack. But you know what once and you know what, we should have gotten a tour of bore instead of outsourcing absolute to the locals. That was a total stir up huge mistake. Once that job was done. We should have been out of there. Absolutely.
SPEAKER_02: Absolutely. What a what a misadventure. What do we have? Do you have any thoughts acts on like the endgame here? Because it does seem like Putin is getting exhausted. And maybe he gets the win. I think we know what the endgame is gonna be.
SPEAKER_03: It's basically Ukraine is going to be neutral. They can be part of NATO, they get some security guarantees from the Western exchange for that. Crimea is part of Russia. That's a fait accompli. It happened in 2014. And then the last part is the what they're really fighting over, which is this Donbass region, where you've got Russian ethnic speakers going up against Ukrainian far right nationalists, how close and they can't agree with both those sides are willing to fight. So that's the issue. And look, the truth of matter is, I think it's going to result in some form of independence for these disputed territories of donettes and Luhansk. Right. I mean, and but the reality is, the United States of America doesn't have a vital interest 37 days into this.
SPEAKER_02: Is it gonna end in under 60?
SPEAKER_00: Yes, it's actually suggested the right approach, I think, a month ago, which is let all of those people vote.
SPEAKER_03: So I have a plebiscite, I have a referendum,
SPEAKER_00: create a create a referendum, let them vote, let them be self deterministic. And that may be the most reasonable middle ground for both sides to say, Okay, let's give this a shot. But I if you're right, if you could achieve a ceasefire, if you could get a ceasefire here,
SPEAKER_03: worst end this.
SPEAKER_00: Yeah, if you could get a ceasefire, have the UN observers come in and minister an election
SPEAKER_03: Crimea, there's no doubt which way Crimea would go. I don't know what would happen in Luhansk or donettes, I think they probably would go independent. So let's just do a vote. It'll be about self determination, not appeasement. And let's find out. That's what we should be pushing for.
SPEAKER_02: Yeah, people getting to vote on their future. Wow, crazy idea. I mean, it's got to end. I mean, it's got to end a month. This is becoming super damaging for Putin, right? I mean, these economic sanctions. Plus, you see, there's a story that was on MSN 37% approval ratings have gone up.
SPEAKER_03: We thought you could say it's fake or whatever. But apparently, this is a reasonably decent polling operation. This is a poll by Levada Center and independent pollster Moscow. Apparently his polling his poll numbers were 69% in January, they've gone up. Russians will rally around the flag just like what about the resources and they're suffering
SPEAKER_02: in that country and they are suffering but the Russians are very good at suffering to
SPEAKER_03: Cal this international pastime. You ever read just Dostoevsky? Yeah, no, no, I don't like to read War and Peace. Actually, I would much rather watch the next Marvel movie or occurs our film.
SPEAKER_02: I am not interested in. Yeah, listen, my whole speech was about the fact that American diplomacy could have prevented
SPEAKER_03: the situation last year. That's not to say that we caused it. It was Putin's decision to invade. It's his war. The bloodshed is on him. However, more effective diplomacy could have diffused the situation a year ago. And we totally blew it. We just totally blew it.
SPEAKER_03: And this is gonna hurt us. I mean, look, this is one of those things that the administration thinks doesn't affect them. But you know what, when our economy goes into recession, because this is a straw that breaks its camel's back, voters are gonna take it into consideration.
SPEAKER_00: We do we do hire people in many, many industries to do their job and the people that are hired to be diplomats. Their job is to be diplomatic and to find compromises.
SPEAKER_02: All right, everybody, it's time to wrap here. Some exciting news on the conference front Palmer lucky of Andrew technologies building weapons and systems and defensive systems is going to come to the event. He's not. He's a fan of the pot. Apparently, he's a big fan of David Saxe's. So we're going to talk about the military and just as a general concept. I have a theme I was gonna float by y'all think a lot of the talks and a lot of the the psych ice is around the problem I want to solve. So I'd like you all to think about that. I think this will be a celebration of people who are trying to solve important problems in the world. So what are you solving for is going to be the I think the theme of the event? What are you trying to solve for? And so free break, if you can give maybe a little talk, Shemagh, David, I would be great if the four besties gave a little 15 minutes solo talk, we're gonna have a lot of these solo talks position. Hey, here's what I'm solving for. And then conversations about free bird.
SPEAKER_00: Do you know dahlia you should get dahlia I think he'd be great. I don't know.
SPEAKER_02: And Kathy would be like, I think Kathy was coming to but by the way, there's a new video
SPEAKER_03: that dahlia just put out, which is like the 45 minute animated documentary version of his really good. And really good. I watched it. I watched it. I watched it and I thought it was really great. It's all about how empires rise and fall and it's pretty clear that he thinks we're a late stage empire. And he talks about a lot of the things that we're talking about on the show. And I watched it this week.
SPEAKER_00: I thought it was exceptional. The book. Yeah, I thought it was really, I'm halfway through.
SPEAKER_02: Look at you guys coming around.
SPEAKER_01: You're gonna listen to me like you're watching on YouTube because his animations are excellent.
SPEAKER_00: Very nice. Yeah. Superb.
SPEAKER_03: It's very accessible. I mean, anybody incredibly good.
SPEAKER_00: Highly recommend. Yeah. I mean, look, I agree with you. One of you guys get dahlia on the thing. Let's get him.
SPEAKER_02: Yeah. dahlia reach out. I know we know you're listening. So can somebody question to ask dahlia? I think he is actually I think it's fan of the show. I think the question to ask dahlia is how do you revitalize a late stage empire?
SPEAKER_03: That's right.
SPEAKER_02: That's a good that is the question question. Can it be? Well, can it? No, can it be done? I think is the real question. All in Summit made 15 1617 can is to theoretical I think it's more How would you do it?
SPEAKER_00: Yeah, yeah, if it's possible, what would the path be?
SPEAKER_02: Oh, man, it'd be something about building the pie, not shrinking it. That's for sure. May 15 1617. The conference is the 16th and 17 625 of 700 tickets allocated. If you'd like to apply for a scholarship guide and do that. It's not going to be a bro down the ratio has Congrats to you, Jason, for really pushing
SPEAKER_00: the diversity and yeah, getting a lot of scholarships and women and people of color. It's good.
SPEAKER_02: Thank you. Really, really, really great to see so many people applying. If you didn't get a response back for your application, you'll get it by April 15. That's going to be when we tell everybody if they're officially in or out, but we have been increasing the ratio was organically 90 95% male female, and now it's a 65 35. So we're really making progress on that front. So it's not going to be a bro down. Sorry, sacks. It's not gonna be a bro down. It's gonna be diversity here. Diversity equals power sacks.
SPEAKER_03: I hope there's diversity of ideas too. Yeah.
SPEAKER_02: Okay. Well, there you have it, folks. Laura the rain man, David Sachs, Sultan of science, wait to see one.
SPEAKER_00: One third of my besties tonight. Thanks a lot, guys.
SPEAKER_02: Yeah, I'm showing up. I mean, you got to see you're the one over three. Well, I mean, these guys, you got to remember you can these guys would have their drivers translator, but these guys would have to have their drivers make beat the name. Yeah, these guys would have to have their drivers, drive them 30 minutes and then wait for them outside and then drive them home after they've drank in $5,000 worth of your wine. It's a little bit overbearing.
SPEAKER_01: What are you gonna pour tonight?
SPEAKER_00: You mark? It'll be some really good stuff. Probably some like older sassakaya. I'm thinking 85. But free bird. If you come I can also make some 10. 10.
SPEAKER_02: 10. 10. 10. 10. 10.
SPEAKER_01: 10. 10. 10. 10.
SPEAKER_01: 10. So many fermented soybeans. It's delicious.
SPEAKER_00: You know what can I can tell you what are we, what I think that yuck, yuck.
SPEAKER_02: But I mean, in fairness, your chef always makes something exceptional for freebird when he comes to dinner. Yeah, it's always you're always a generous host and your chef is always so you know get
SPEAKER_02: your get saxes driver and come down comes in the help. Send the heli up from Iran to grab me.
SPEAKER_00: Free burgers come. Come. Come. Just get a driver. late late tonight. I'm cool on tilt. Come on tilt. No, no, no,
SPEAKER_03: no, like 3am or something. Oh, 3am. My game's over by then.
SPEAKER_02: Alright, see you later. Besties. Love you guys. Bye bye. Bye bye. Bye bye.
SPEAKER_02: Let your winners ride. Rain Man David Saks. We open source it to
SPEAKER_03: the fans and they've just gone crazy with it. Love you.
SPEAKER_03: We should all just get a room and just have one big huge door because it's like this like sexual tension that we just need to be. We need to get merges.
