E153: In conversation with Jared Kushner: Israel-Hamas War, paths forward, macro picture, AI

00:00:00.000 | sex what essay were you writing last night till three in the morning oh I was blasting

00:00:03.300 | people on Twitter yesterday I was collecting scalps I keep these receipts of people who

00:00:11.880 | attack me on Ukraine and then like six months later you know they all write a tweet admitting

00:00:17.100 | they were wrong I'll rub it in their face you have a little Google Doc and you just go

00:00:20.880 | you have like your kill Bill list yeah you are so petty oh my God I love it I mean I love that

00:00:30.960 | about you someone would say that's a good defense mechanism right this way yeah they gotta know

00:00:36.120 | they're not gonna take any free shots because if they do and then you know invariably I I'm proven

00:00:42.000 | correct then uh you're gonna clap back I'm gonna smack him very Trumpian isn't it yeah it's a very

00:00:49.200 | hard burden for you to carry it just being right

00:00:50.820 | all the time I respect the way you do it with such grace and uh

00:00:55.080 | all right welcome back to the all-in pod really excited to have a guest with us today Jared

00:01:20.040 | Kushner

00:01:20.460 | I'm sure everyone knows who he is we obviously talked about Jared's interview with Lex Friedman

00:01:25.380 | on the pod a couple of weeks ago and what happened to Matthew DM Jared and started chatting and said

00:01:31.320 | hey would you be interested in coming to talk with us yeah about these matters very you know

00:01:36.600 | kindly agreed to do it so we're really excited to uh have Jared join us today Jared welcome thank

00:01:42.240 | you for having me so I don't think you need much of an introduction obviously you were a senior

00:01:46.140 | advisor to President Trump from 2017 to 2021 and you worked on the U.S Mexico relationship as well

00:01:54.300 | as led the Middle East peace efforts which I think is going to make up the bulk of what we're excited

00:01:58.980 | to talk about today just really briefly since leaving um office you've been investing running

00:02:09.060 | a firm called affinity partners is that right maybe you can share with us just a little bit

00:02:12.360 | about what you've been up to and then we'll you know kind of get into it here perfect

00:02:16.020 | affinity Partners is a private equity firm that I started when we left doing growth investing

00:02:20.520 | private equity investing globally we raised just over 3.1 billion doing a lot of investments trying

00:02:26.040 | to bring Gulf money into Israel into the U.S trying to figure out how through investments

00:02:31.980 | you could bring countries closer together people closer together looking at a lot of areas where

00:02:36.480 | there's structural transitions happening at large in the global economy whether it's near shoring

00:02:42.060 | from offline to online you know software a lot of different interesting areas

00:02:45.960 | a lot of the the Fintech space and Financial Services right now but you know enjoying it and

00:02:51.360 | the goal is really to bring the experience that we had from the previously being an investor and

00:02:56.820 | then the time in government and then thinking through how you could use those macro learnings

00:03:02.280 | and connections and relationships and navigational skills to the investing side right so we're going

00:03:08.340 | to try and talk later in the show uh about macro markets a bit talk a little bit about some of the

00:03:13.680 | activity in AI this week we think it's all pretty fresh in the

00:03:15.940 | world hopefully we can call dialogue about that I think it'd be helpful when you and I talk just to

00:03:21.640 | get ready for the show today you mentioned that you had a very liberal upbringing in the Upper East

00:03:26.920 | Side in New York and your perspective began to shift as you started to travel the country then

00:03:31.360 | you were in the Trump White House and have become very active since would love to hear a little bit

00:03:37.840 | about how your perspective shifted in the time you spent because you mentioned you started traveling

00:03:41.140 | the country and seeing things that you otherwise hadn't seen living in the Upper East Side would

00:03:45.100 | love to hear that part of your story and then we'll see you in the next episode.

00:03:45.880 | story before we kind of get into things if you wouldn't mind sharing yeah sure so one thing about

00:03:51.340 | my life is that nothing has gone according to the plan I grew up in New Jersey a really nice place

00:03:57.700 | in Livingston my father was an entrepreneur in the real estate business banking insurance did a lot

00:04:02.500 | of different things really brought up me and my siblings to be focused on business and it really

00:04:08.260 | for us was a good experience growing up I actually went to Harvard and then after that chose to go to

00:04:14.680 | law school and business school where I was at NYU during that time my my father had a legal issue

00:04:20.560 | and I was forced to take over the business and so I got into the real estate business and then after

00:04:25.360 | that bought a media company in New York and that's really where I got exposure to a lot of what are

00:04:30.640 | called New York society my wife and I we met got married and through that experience I thought we

00:04:36.820 | had a very expanded world view at our house in the Upper East Side we have dinner parties we

00:04:41.260 | have heads of banks and hedge funds and technology companies and fashion

00:04:44.620 | and and um and then it was just you know really nice life and then her father announced he was

00:04:50.500 | running for office and that was a an interesting experience for us as Republican we didn't know too

00:04:55.060 | many Republicans um were you registered Democrat prior uh I was registered Democrat going up uh my

00:05:02.080 | father was a big Democrat donor we were we'd have in our house whether it be you know Chuck Schumer

00:05:06.160 | Hillary Clinton I think my father gave uh Cory Booker his first campaign donation so I know

00:05:10.600 | Cory since I'm 15 years old uh so really grew up around Democrat politics

00:05:14.500 | uh all of our life but over time I I think during the Obama years I I changed my registration to an

00:05:20.260 | independent I didn't feel uh like the Democrat party was fully representing my my viewpoints I

00:05:25.600 | felt more independent-minded and then um during the time with my father-in-law when he was running

00:05:30.880 | for office he invited me to go with him to a rally in Springfield Illinois we flew out there I got

00:05:35.980 | off the plane and um you know we we pull up to an arena and the guy comes up to Trump and says

00:05:40.900 | uh congratulations sir you just broke the record for the arena for

00:05:44.380 | independence uh then he says well who had the who had the record before and he says well it's Elton

00:05:49.060 | John 36 years earlier and he says Jared look I don't even have a guitar or piano this is impressive

00:05:53.920 | you know so you know he gets up on stage and and without really notes you know riffs for over an

00:05:59.020 | hour and it was interesting for me because I was watching you know CNN and the New York Times and

00:06:03.640 | all my friends the media basically were describing his rallies as almost like KKK conventions but I

00:06:08.920 | walked around the crowd nobody knew who I was then and what I saw was that these were just you know

00:06:13.540 | they were people were

00:06:14.320 | old young male female white minority and um and uh and it was just people who were hard-working

00:06:21.760 | Americans who who you know really felt like Trump was giving them a voice and what was interesting

00:06:26.380 | to me was a couple weeks earlier we'd been at the Robin Hood Foundation which is the big uh

00:06:31.300 | philanthropy in New York where a lot of the hedge fund managers uh support I remember the chairman

00:06:35.920 | of Robin Hood getting up and saying you know if we want to save you know the next generation we

00:06:40.600 | want to save the kids in the inner cities uh we have to uh we have to

00:06:43.960 | we have to support Common Core that's the way that we can save people and I remember Trump gets up

00:06:48.400 | there and he says uh you know if we want to save education we have to end Common Core and send it

00:06:53.260 | to the states I'm saying wait I thought I thought Common Core was this great thing and but why are

00:06:57.340 | all these people against it and so it really just kind of piqued my interest and made me realize

00:07:02.560 | that maybe my aperture was was way smaller um way more closed than I thought it was and it

00:07:08.860 | really led me to to seek out a lot of people who had differing points of view than the people I'd

00:07:13.840 | been around before I really opened my aperture explored a lot and over the years I really got

00:07:19.180 | the chance to meet with people from both sides so you know I have a lot of friends who are independent

00:07:23.260 | friends who are liberal friends who are very Republican and uh you know my personal view

00:07:28.420 | was I thought of myself more as a pragmatist fact-based and data-driven and based on that

00:07:33.700 | I tried to pursue uh the different policies that I thought made the most sense uh in as

00:07:38.620 | unemotional a way as possible how did you figure out that that moment in Springfield

00:07:43.780 | could translate all throughout the country like was there a process that you guys went through to

00:07:48.040 | validate like hold on is this just a moment in time or is this just a specific area or what is

00:07:53.560 | how did you guys get to the ground truth of what the scalable marketable candidate looked like

00:08:00.400 | because I'm sure that was part of the calculus in what you did because it I think the to your point

00:08:05.140 | maybe the media's perspective was hold on a second this this guy is riffing but it clearly went very

00:08:11.800 | quickly from riffing to a methodical plan

00:08:13.720 | and I don't think that that's ever really been talked about do you want to just tell us a little

00:08:18.160 | bit about that sure well I would say it was less planned and way more entrepreneurial and I say

00:08:23.560 | entrepreneurial in in two different senses you know one is the campaign was one was run incredibly

00:08:28.780 | entrepreneurially people were told that if you work for Trump you'll never get a job in Washington

00:08:33.700 | again which is why he really wasn't able to hire a lot of people initially and why a lot of the

00:08:38.140 | responsibility for the campaign fell to people like myself who really just cared about him

00:08:42.460 | personally and wanted to make

00:08:43.660 | sure that he was able to do a competent job with the operations of a campaign that led to us doing

00:08:48.760 | a lot of things in an untraditional way but we actually were able to make the dollars go a lot

00:08:52.600 | further whether it was building a data operation or how we targeted advertisers or how we you know

00:08:57.880 | did our events we were able to just do it in a much different way but from a viability of the

00:09:02.140 | candidate perspective I really give all the credit to him because what I saw with politicians is a

00:09:06.760 | lot of politicians will take polls and then moderate their perspectives this is somebody

00:09:11.620 | who without pollsters and without any political

00:09:13.540 | experience um really put forward a lot of points of view and keep in mind in a Republican primary a

00:09:19.840 | lot of his viewpoints on trade were very uh heterodoxical they were they were not what

00:09:23.740 | was conventionally thought of and what I saw with Trump was that he was able to move the polls to

00:09:28.660 | him and that was uh that was a talent and just a skill of persuasion uh and his willingness to kind

00:09:34.240 | of stick to the issues I mean at that point in time I remember seeing polls that illegal immigration

00:09:38.620 | was not like a top five issue when he started the campaign by you know the middle to end of the

00:09:42.940 | campaign people were really seeing uh the craziness that was happening at the southern border and why

00:09:47.440 | that was uh critical to our National Security and so um I think that for him he found a lot of his

00:09:52.720 | message and with him he was not a perfectly uh always on message candidate but what he did do

00:09:57.940 | was he was constantly evolving and learning and you know and would learn from the different things

00:10:02.500 | that happened and constantly evolving to uh find ways to to persist amazing like a startup finding

00:10:09.400 | a product Market fit yeah and what's he like as a father-in-law I'm curious

00:10:12.880 | uh as a father-in-law he's been great you know that obviously brought us a lot closer together

00:10:17.320 | you know until that time our time was mostly they're playing golf together or we'd be together

00:10:21.640 | at family events uh working together was uh was was a different element of our relationship but

00:10:27.760 | I think one of the benefits I had with him was that he knew I was always going to tell him the

00:10:31.120 | truth uh whether I agreed with him or not I also I think one of the things he liked about me was

00:10:37.060 | that I I was not obviously worked hard I gave him straight answers and I didn't opine on things where

00:10:42.460 | I didn't feel like I had an expertise so if you would ask me a question and I didn't feel like I

00:10:46.780 | knew the answer I would say well this is not my expertise these are the people who I would

00:10:50.140 | recommend I speak to to get perspective and let me bring you their their opinions and so I think

00:10:55.120 | he saw me as somebody who was who was competent obviously had his best interests at heart again

00:10:59.980 | I wasn't accepting money for any of these jobs so it wasn't doing it for for financial gain

00:11:03.820 | um and I just started to really believe in a lot of the policies that he was pushing and wanted

00:11:08.560 | to help him maybe translate it from a campaign speech to kind of technical

00:11:12.160 | policy and then see once he got the opportunity to help him implement it as well that's really

00:11:17.260 | cool why did you agree to do Lex and why are you doing the show today we were kind of surprised to

00:11:22.420 | see you on Lex and obviously like Lex said it was a very different conversation than I think any of

00:11:29.020 | us would have expected having the only exposure to you being through you know some sort of media

00:11:34.300 | channels what's motivating you to kind of do this today before we get into it so Lex um again him my

00:11:40.960 | wife are friends and I I'm not sure if you've heard of him but he's a great guy he's a great guy

00:11:42.100 | I I really follow and listen to what he does I I think in Society Today the the news uh it's kind

00:11:49.060 | of just one person's you know point of view and and they're they're they're picking and choosing

00:11:53.680 | and editing what they put into it one way or the other but the medium of the podcast is something

00:11:58.120 | that I my personal consumption uh was growing with and I felt like it was a place where you

00:12:03.520 | could have real conversations I think the people who are listening to podcasts are people who are

00:12:08.080 | looking to have a more nuanced uh perspective on something and really want to

00:12:12.040 | you know try to understand something deeper and and I respect Lex I all my private conversations

00:12:17.320 | with him I I really enjoyed um and I love that he was really trying to um find perspectives from

00:12:25.540 | people that maybe others didn't understand to try to bring greater understanding across

00:12:31.720 | and so I agreed to do it after a while I was really really glad I did and uh based on the

00:12:37.060 | the great feedback I got uh there uh my sense is is that the podcast format is is something

00:12:41.980 | that's um you could have a real conversation you can go back and forth you could argue you

00:12:46.300 | could disagree um I think that that's where people really want to get their information from so I I

00:12:51.160 | turned down a lot of you know cable news or different uh interview requests um because I

00:12:55.480 | find that you can't have as nuanced a discussion and you know I wish things were as simple as you

00:13:00.040 | know the black and white or the political slogans that people use but the reality is things are a

00:13:04.240 | lot more nuanced so when shemoth reached out I followed you guys and I've listened to you for

00:13:08.020 | for some time I was uh I was really happy to come do it awesome

00:13:11.920 | well thanks for doing it uh sex you want to kick us off on the Gaza conflict and

00:13:16.480 | framing up the present day sure based on what I've read it seems like Israel has now formed

00:13:23.860 | a perimeter around uh Gaza City they've sort of bisected Gaza between this north and uh South

00:13:31.240 | and they've been trying to bomb entry or exit points from the Hamas tunnel network

00:13:36.340 | and it seems like their strategy is to kind of gradually close in on that

00:13:41.860 | tunnel network and basically try and eliminate Hamas from from sort of this northern part of

00:13:48.040 | Gaza and then one assumes they'll move to the south and I guess one other element to add to

00:13:52.120 | it is that you know while Israel is doing that you're seeing protests both in the West and in the

00:14:00.700 | Arab or Muslim world you're starting to see statements condemning Israel by

00:14:06.700 | leaders of these other countries in the region I'd say the one by Turkey by

00:14:11.800 | Taiwan was notably harsh and threatening but you're starting to see again as Israel proceeds

00:14:18.040 | with this operation you're starting to see more and more condemnation from various parts of the

00:14:22.960 | international community so let's start with that is you know how do you assess what's happening on

00:14:27.160 | the ground what do you think the prospects for success are and how do you assess the risk that

00:14:32.260 | this sort of escalates horizontally in ways that are kind of hard to predict and could spiral out

00:14:38.800 | of control yeah so so there's a lot of different

00:14:41.740 | ways you can go with that but I'll start with kind of the first question which is

00:14:45.100 | um in the immediate aftermath of the attack my biggest concern was that Israel was clearly

00:14:52.180 | caught off guard from an intelligence and military perspective with the attack and the attacks were

00:14:56.800 | they shook a lot of people they were they were very very heinous beyond

00:15:01.900 | um really comprehension it's it's crazy the more and more stuff that comes out and we were seeing

00:15:07.420 | a lot of in a real time thanks to you know the fact that right now with X and what what Elon's

00:15:11.440 | done there's a lot of things that we're seeing in real time thanks to you know the fact that right now with X and what what Elon's done there's a lot of things that we're seeing in real time thanks to you know the fact that right now with X and what what Elon's done there's a lot of things that we're seeing in real time thanks to you know the fact that right now with X and what what Elon's done

00:15:11.680 | there's a lot of things that we're seeing in real time thanks to you know the fact that right now with X and what what Elon's done there to to not try to censor things in the way

00:15:14.620 | that was happening before so we were all getting a lot of information real time and it was really

00:15:18.640 | pulling at a lot of people's heartstrings my big fear initially was that Israel would react

00:15:23.500 | uh emotionally as opposed to uh to pragmatically and I think that the steps that they've taken since

00:15:29.380 | then have been uh very wise I think the fact that they took their time and have been very methodical

00:15:34.360 | about getting their supply lines ready about working how to Garner's much international support

00:15:40.420 | I mean you have to remember these

00:15:41.620 | weren't just Israeli citizens that were killed these were American citizens they were German

00:15:45.220 | citizens they were Thai citizens they were UK citizens and and the hostages as well are not

00:15:50.260 | just Israeli citizens so I think that Israel took its time to get the military operations set I've

00:15:56.020 | seen them go slowly methodically I mean Gaza is a very very complicated place I mean we studied

00:16:00.820 | it for four years we we we were very closely watching all the different incursions we managed

00:16:05.620 | Hamas and and their uh their malicious activities uh very very closely uh to avoid situations

00:16:11.560 | like this and uh the place is booby trapped like like crazy and so I do think the fact that the

00:16:17.020 | Israelis have taken their time and been very methodical and I've come up with a strategy

00:16:20.740 | has given me more hope every morning I wake up and I look to see you know praying there hasn't

00:16:25.720 | been more casualties um in Israel and um and the hope is that they continue to do it in the

00:16:30.640 | best way possible um so I think that the goal for them is really the elimination of Hamas I

00:16:36.580 | think that um you know the the big point that I really want to make in the Lex podcast which is why

00:16:40.960 | I went back uh to really do the point was that um the people who are protesting um in favor of

00:16:47.500 | the Palestinians a lot of the Israelis and Palestinians want the same thing which is uh

00:16:52.660 | they want security for Israel and a better life for the Palestinians and I think what people have

00:16:56.560 | failed to really grasp for a long time is that Hamas has been the root cause of a lot of the the

00:17:02.320 | the bad lives for the Palestinians if you think about Gaza uh before this recent before October

00:17:07.780 | 7th I mean over half the population lived under the poverty line

00:17:10.600 | um you know people were really trapped there and people would blame Israel for the blockade but

00:17:16.060 | what's also happened over the last 30 days is a lot of the worst fears that we had during the

00:17:20.260 | administration or things that Israel would be saying I have totally been proven true I mean

00:17:24.100 | you've seen now I'm going to some of these uh school houses where there's you know there's 500

00:17:28.240 | or 50 different you know rocket launchers um you know in the school houses the hospitals all the

00:17:33.460 | terrorists that they've captured that they're interrogating are saying well that's where the

00:17:36.580 | military headquarters are you know now we're learning about this um

00:17:40.240 | this tunnel Network which they're saying is hundreds of miles of tunnels underground well

00:17:44.860 | that's why you know Israel wasn't allowing cement and a lot of these these materials in the cement

00:17:49.240 | that went in which was supposed to build houses for for the people of Gaza was then stolen by Hamas

00:17:54.400 | to to build these tunnels the uh the pipes that went in to to fix the water were then taken and

00:18:00.040 | turned into to rockets that the fuel was was was stolen and and not used for for for the hospitals

00:18:06.040 | or for people to have better lives it was stolen for them to operate their tunnel network and then

00:18:10.180 | then to fuel the rockets so um it's a situation that that really does have to be dealt with again

00:18:14.980 | Israel you guys are I know poker players so uh so Israel definitely has the stronger you know hand

00:18:20.380 | to play here so I think time is on the one hand in their in their favor uh but on the other hand

00:18:25.300 | obviously you know the international community has historically been very uh anti-israel and

00:18:30.640 | anti-semitic in the way that they've approached a lot of these uh these skirmishes uh to date but

00:18:35.500 | I will say I think there's been more international support for Israel this time than I've ever seen

00:18:39.760 | um and I do think that that's a very important thing so that that's maybe General if there were

00:18:45.100 | some of the specific questions that you wanted to get to in there I can what about the risk of

00:18:48.340 | horizontal escalation let's just talk about that for a second because you do hear I think a growing

00:18:53.020 | chorus of countries who are denouncing Israel they're saying that this is collective punishment

00:19:00.040 | that the bombing of Gaza is indiscriminate they want it to stop there's genocide genocide yeah

00:19:07.060 | I'm not saying I agree with that rhetoric but you you do hear it

00:19:09.700 | you know there's a effort at the UN to um to pass a ceasefire resolution so there's a lot of people

00:19:15.940 | who want the ceasefire and there's a lot of growing international pressure for that and

00:19:21.040 | then you've heard threats from you know again Erdogan in Turkey that if there's not a ceasefire

00:19:25.720 | at some point they're gonna have to get involved they're gonna have to act Iran has said similar

00:19:31.420 | kinds of things although I think it's pretty clear they don't want to get involved they don't want

00:19:34.360 | this to escalate in a into a wider regional war but they've sort of intimated that if

00:19:39.520 | the bombing continues that they might have to take action they might feel pressure to do that

00:19:43.720 | so I guess one question there is is time on Israel's side it does seem like

00:19:48.640 | again there's more pressure to stop the military operation over time

00:19:53.380 | as opposed to less yeah so so the answer is everyone's talking their book and that's what

00:20:00.340 | they should be doing they're talking to their populations the question is what people will

00:20:04.240 | actually do I would say that you know the hardest thing for us all is obviously you see civilians in

00:20:08.800 | Gaza who are being used as human shields and the last thing that anyone wants is for more civilian

00:20:13.660 | deaths to occur it's funny this morning I was speaking to a friend in Israel who was telling

00:20:18.280 | me that yesterday there was a a major evacuation of of civilians in Gaza and a lot of people were

00:20:25.420 | surprised that the Israeli defense forces were basically putting themselves in between the Hamas

00:20:30.280 | militants and the Gazan civilians to protect them and open up a corridor and again one thing that

00:20:35.320 | Israel has done I think a good job of is getting out a lot of the facts about

00:20:38.740 | how they've been warning the Gazan civilians to flee asked them to go and and what happened was

00:20:44.380 | Hamas was you know shooting them down with snipers and trying to prevent them from going because they

00:20:48.400 | wanted them to stay in place as human shields in in the schools and the hospitals where they

00:20:53.080 | were conducting their terror activities and so what was interesting to me was um well my friend

00:20:58.420 | was telling me is speaking to a friend of his who was a soldier was that uh was that um is that a

00:21:03.520 | lot of the civilians are really thanking them for liberating them from from Hamas and for risking

00:21:08.080 | their lives to help them out and you know I think that's that's a really important thing to think

00:21:08.680 | them get out of Gaza. A lot of these people, again, they've been prisoners to Hamas more than

00:21:14.060 | anything else for a long time. They want to see themselves out of there so that they can perhaps

00:21:18.920 | have a better opportunity to live a better life. I think that the current region, I think the

00:21:24.780 | biggest immediate threat is from Hezbollah to the north. I think Israel going to full ready alert

00:21:31.440 | was a really smart thing. I think the US moving the battle carriers there, I think was also good.

00:21:36.780 | I think the statements from the US administration were strong up front. Again, whether people

00:21:42.700 | believe that they'll back up those statements is another thing because they do have a little bit

00:21:47.360 | of a credibility deficit in the region based on what they've done over the last couple of years.

00:21:51.620 | I think that's all been very helpful in pushing Iran back and sending a strong message to Hezbollah,

00:22:00.800 | which is if you want to attack Israel, don't do it when they're at full military readiness.

00:22:04.240 | Israel's a nuclear power.

00:22:05.500 | Aaron Ross Powell, Ph.D.:

00:22:06.280 | I think every-

00:22:06.600 | Aaron Ross Powell, Ph.D.:

00:22:06.760 | everyone is starting to realize that this has been Iran trying to manipulate things. As long as

00:22:11.620 | they think there's a threat that you're not going to go after one of their proxies, but you may go

00:22:15.400 | after them, that's been the best way of keeping de-escalation. I think with Turkey and others,

00:22:19.680 | I've spent many hours with Erdogan personally talking about Gaza. I know that he has a big

00:22:25.440 | heart for the Palestinian people. He hates to see their suffering. It's also good politics from him.

00:22:30.640 | He's also from a Muslim Brotherhood leading party. I think in a

00:22:36.740 | very religious heart, he does have to acknowledge that a lot of their plight is led to by bad

00:22:41.000 | governance. He may not want to admit it publicly, but the reality is the best way to improve the

00:22:45.920 | lives of the people of Gaza is to eliminate Hamas and put in place a structure where people can

00:22:51.860 | finally have the opportunity to live more freely and make better lives for themselves.

00:22:57.200 | Aaron Ross Powell, Ph.D.:

00:22:57.500 | Jared, you said something that I think is really interesting. You said Erdogan has

00:23:00.620 | a soft spot for the Palestinians. Can I just take that concept and just can you explain the

00:23:05.540 | historical context of the situation? Can you explain the historical context of the situation?

00:23:06.560 | Jared Ranere:

00:23:07.560 | Sure. I think it's really interesting to see the context of Arabs, the Arab world and their

00:23:10.160 | relationship with the Palestinians, because it's definitely had its ebbs and flows over the arc of

00:23:15.380 | history. How do people think about it, just broadly speaking, just in terms of the big

00:23:20.840 | historical arcs that have shaped this relationship between Arabs and Palestinians specifically?

00:23:26.960 | Aaron Ross Powell, Ph.D.:

00:23:27.380 | Well, that's a question we could spend about three days talking about,

00:23:30.680 | but I'll try to give you a very quick version of it. I think that a lot of this goes back really,

00:23:36.380 | to people say it goes back to a lot of times, but I think that we have to probably go back to,

00:23:43.220 | and I'll try to do this very quick, is really in 1948, which was a complicated time. It's post

00:23:48.080 | Holocaust, post World War II. Again, the Middle East really in the early 1900s was created by a

00:23:55.280 | lot of arbitrary lines drawn by foreigners. And you had a situation where Israel is,

00:24:00.800 | the UN puts forth the partition plan, Israel, they're willing to recognize Israel as a state for

00:24:06.200 | Jewish people and also give a state to the Palestinians. The Arabs reject that and attack

00:24:11.660 | Israel and there's a whole war. During that war, it was flared up really by General Nasser from

00:24:17.000 | Egypt, who at the time was the leader of the Muslim world. During that war, Israel was able

00:24:21.860 | to defy the odds and win. And a lot of Palestinians were either forced from their homes or displaced

00:24:26.720 | from their homes. There's versions where they say the Arabs said, "Leave your homes." And then

00:24:30.200 | when the war is over, you're going to come back and take everything. Some Arabs stayed in their homes

00:24:36.020 | and actually today they're Israeli citizens with full equal rights as other Israelis.

00:24:40.160 | So that happened. Then in 1967, that's when Egypt attacked again. During that war again,

00:24:48.140 | Israel miraculously won. That was really the time where Israel was able to expand their territory.

00:24:56.300 | They took over the West Bank at the time, which didn't belong to the Palestinians as much as it

00:25:00.200 | belonged to Jordan. It was part of Transjordan at the time. Then they also gained control of the

00:25:04.880 | Gaza Strip, which also was a part of the Gaza Strip. So that was a very important time for Israel.

00:25:05.840 | It was previously administered by Egypt, although when Egypt was administering it,

00:25:10.700 | they didn't take it as their territory. They never granted citizenship to the people who were there.

00:25:14.720 | So between 1948 and 1967, when the Six-Day War occurred, most of the leaders in the Arab world

00:25:21.980 | enjoyed leaving this issue out. It was a great way to stoke nationalism. And two,

00:25:26.480 | it was a very easy political issue for them to have to say, "Well, we need to do this and to

00:25:31.820 | fight for the Palestinian people." So in a lot of ways, it was a way to deflect in their shortcomings

00:25:35.660 | at home and to justify certain actions they were taking because they were fighting for this group

00:25:40.820 | of people. Then it gets really interesting after the Six-Day War. So this was the second time that

00:25:45.440 | the Arab countries had failed to destroy Israel, which is what they had promised they would do.

00:25:50.960 | So there's a young terrorist at the time named Yasser Arafat, and he was part of a party called

00:25:55.820 | Fatah. And what he said is, "You know what? All these Arab leaders, they're lying to you. They're

00:26:00.380 | failing you. I'm going to be the one to start creating a liberation and opportunity for the

00:26:04.580 | Palestinian people." So he took over. And then he took over the Arab countries. And then he took over

00:26:05.480 | the Arab countries. And then he took over the Arab countries. And then he took over the Arab countries.

00:26:05.960 | He took on this mantle, was able to use his Fatah group and some pretty thuggery ways to take over

00:26:11.480 | the Palestinian Liberation Organization, which was a way that he got some international acclaim. And

00:26:15.800 | at the time, he was doing that from Jordan. So this is about 1968, 1969. They caused so much

00:26:21.740 | trouble in Jordan that King Hussein at the time, who was King Abdullah's father, who really was a

00:26:27.140 | very, very special diplomat and leader in the Middle East, got so fed up with Arafat. At the

00:26:34.280 | time, he was causing trouble. He was going to be the leader of the Arab countries. And then he

00:26:35.300 | it was it was steering people away people wouldn't invest there uh they wouldn't it was hurting

00:26:39.540 | terrorism and then they took a little further and they tried to assassinate him which was probably

00:26:43.940 | uh the final straw so the jordanian leader said get these people the hell out of my country

00:26:48.260 | um it was a big clash between the plo uh and and fata uh terrorists and then the jordanian police

00:26:56.500 | and military uh and they were able to expel them and then the palestinians went to lebanon uh

00:27:01.060 | that's where yasir our front was so they were there for about 12 years again they went back

00:27:04.820 | to their old ways of of fermenting uh radicalism and finding ways to cause trouble uh when israel

00:27:12.660 | invaded lebanon in 1982 then yasir fat fled again this time to tunisia in tunisia they were living

00:27:20.420 | pretty well as a beachfront place they're in these beautiful villas on the beach and they kind of

00:27:23.780 | became a little bit disconnected from the palestinian people but there was a lot of resentment

00:27:28.420 | of the broader arab world because they felt like again the arab world didn't really they would

00:27:34.340 | say they were for the palestinian people but never really stood up for them in the way that they

00:27:37.860 | felt like they deserved so it was it took until about 1988 that finally

00:27:43.940 | uh this is 40 years after 1948 the war of independence where uh the plo was finally

00:27:49.460 | able to get the arab league to say and this is really because jordan was just like done

00:27:53.540 | with this issue to say okay we're going to acknowledge that this land here should become

00:27:57.380 | a palestinian state so the notion of a palestinian state really didn't emerge until about 1987 1988

00:28:03.860 | uh which is the same time that hamas actually you know came about and they came about really from

00:28:08.660 | they were not shoot of the egyptian muslim brotherhood and their whole thing was basically

00:28:12.900 | we're gonna do full terrorism in order to prevent uh prevent any compromise or any deals with israel

00:28:20.100 | so then you go to 1991 which is a very very important

00:28:22.820 | time for the palestinians mostly because saddam hussein in iraq invades kuwait

00:28:28.020 | and that was very scary for a lot of the arab leaders right they didn't want they did fear saddam

00:28:33.380 | uh he was a he was seen as the radical arafat uh and the palestinian leadership backed saddam

00:28:40.020 | hussein mostly because they knew that he was seen as the revolutionary and popular with the more

00:28:44.180 | common man um and this pissed off every single gulf leader because they basically said wait

00:28:48.820 | this guy if he's going to take over kuwait he could come for saudi arabia he'd come for uae so

00:28:53.060 | they were all very against that and at the time there's about over 200 000 palestinians in kuwait

00:28:58.020 | what happened at that time though was that that made the palestinian leadership so weak because a

00:29:02.900 | lot of the arab countries cut off the funding it was just done with them and that's really what led

00:29:06.900 | to the oslo accords so the oslo accords happened not because our fought necessarily you know all

00:29:12.020 | of a sudden said after you know 37 or 27 years of trying you know terror and and pushing forward uh

00:29:18.820 | he basically ran out of other options and this was his only way to get some form of legitimacy so

00:29:22.900 | they dropped from their charter uh the whole notion of destroying israel and said let's try to

00:29:26.980 | create this area we can have governance and try this whole effort for a palestinian state so

00:29:31.380 | that's really kind of that's a long short version of kind of how we got to then and then in the last

00:29:38.020 | i'd say 30 years the big change that i would say between then and today is that you have a lot you

00:29:44.100 | have a new middle east for me and a lot of the work we did in the trump administration was really

00:29:47.940 | to help what i'd call the new middle east emerge where you have a lot of economic opportunities now

00:29:53.460 | happening in saudi arabia uae qatar there's been a massive mind shift where if you go kind of post

00:30:00.260 | arab spring a lot of these leaders are saying uh you know how do we create opportunity for our

00:30:04.740 | people when i got into my job in 2017 all the experts were saying to me the big divide in the

00:30:10.260 | middle east is between the sues the the sunnis and the shias and when i got there i said no no

00:30:14.900 | the divide is between leaders who want to give opportunity and betterment of life to their people

00:30:20.020 | and people who want to use religion or or whatever issue they want to hold on to from the past in

00:30:25.780 | order to deflect from their shortcomings and justify bad leadership so um i think that's a

00:30:30.180 | really important thing to think about um so i think what's happened today is you have a lot of

00:30:32.020 | the gulf countries really wanting to see this issue uh get resolved which is different than

00:30:36.580 | you had in in camp david and in in 2000 when bill clinton was uh getting close to a deal with yasser

00:30:41.780 | arafat i think the saudis and others at the time didn't want this issue to go away but now the

00:30:46.020 | issue is really no longer useful for the arabs the only people it's useful to quite frankly is

00:30:50.820 | iran and that's why they've been backing hamas and hezbollah and all these other functions

00:30:54.580 | factions in order to continue their project of instability so uh the way i kind of view this peri

00:31:00.180 | right now is that the middle east today is way stronger uh than it's been in the past and this

00:31:05.780 | is what i would say the last gasp of iran and those who have you know pushed for destabilization

00:31:11.140 | and kind of this whole um you know islamist jihadist project at the expense of kind of a

00:31:16.180 | collaborative uh middle east which which would then will create a lot of opportunity uh for the

00:31:20.660 | next generation to to really thrive jared isn't there like at this point then like is it hard or

00:31:29.380 | easy to create an objective target we we call individuals that israel wants to target hamas but

00:31:37.860 | there's no card carrying members of hamas you don't wear a jacket that says i'm a member of hamas and

00:31:42.900 | walk around with an id card and there are some folks who are sympathetic who believe that hamas

00:31:48.980 | represents a resistance movement there are some folks who obviously feel terrorized and ruled over

00:31:57.700 | and there are some folks who support the cause but don't pull the trigger there are some folks who

00:32:04.260 | pull the trigger but don't want to support the cause but are being forced to by some

00:32:07.300 | reports how easy and how hard is it to really direct a military operation at such a fluid

00:32:16.500 | population that it's very hard to id and target and as we've seen in years past

00:32:24.260 | there's always another group that seems to emerge

00:32:27.620 | you cut off one group you get rid of al-qaeda isis emerges and there's this almost like you know

00:32:35.380 | fluid transition of uh of this intention and particularly in this gaza community it's very

00:32:41.540 | difficult perhaps to distinguish between who's hamas and who's not hamas so how do you actually

00:32:46.660 | achieve the objective there and you know how does the military target yeah so so that's probably the

00:32:53.460 | most important question that i think people have to um

00:32:57.940 | really be thinking about as we kind of enter this phase right so

00:33:00.900 | it's both how do you do this in the short term and then the long term and so you can't kill your way

00:33:06.820 | out of an ideology but there obviously are some bad leaders at the top who are culpable who um

00:33:12.260 | who who are military targets and i imagine that it's really you know knowing the capabilities of

00:33:16.660 | israel and the masad it's just a matter of you know when and how as opposed to anything else

00:33:21.140 | but then you have a lot of mid-level and and younger members of this group and i do think that

00:33:26.340 | a lot of these people are you know they're not they're not they're not they're not they're not

00:33:27.200 | in this situation more circumstantially i think this is what they've been taught to believe i

00:33:30.880 | think this is uh really the place they were and this was the the system in gaza where if you wanted

00:33:35.680 | to advance and live a better life then you really had to succumb to this uh tiered system so how

00:33:40.080 | deep the ideology is um people will debate that in different ways if you go back to 2016 in the

00:33:46.640 | campaign when we were dealing with isis the talking point that everyone used was you have to defeat

00:33:51.200 | the territorial caliphate of isis and then you have to win the long-term battle against extremism

00:33:55.520 | uh one of the things that president

00:33:57.180 | trump did when he went to saudi arabia in 2017 uh the reason we went there was that the middle east

00:34:02.120 | was basically on fire i mean if you had isis had a caliphate the size of ohio they were ruling over

00:34:07.080 | eight million people they were beheading uh journalists and killing christians uh syria

00:34:11.880 | was in a civil war where 500 000 uh people were killed a lot of muslims and you didn't see the

00:34:16.680 | same protests on college campuses when that was happening as uh you know assad was gassing his

00:34:21.080 | own people uh libya was destabilized yemen was destabilized and iran was on a glide path to a

00:34:26.880 | nuclear weapon having just been given 150 billion dollars in cash through the disastrous jcpoa deal

00:34:33.660 | that uh that kerry and obama negotiated so it was a mess and so trump went there and um and basically

00:34:40.420 | was was pretty tough with what he said and he said this isn't our problem this isn't your problem to

00:34:44.380 | solve our problem and we need to to root this ideology get it out of your your homes get it

00:34:48.820 | out of your mosques get it out of this earth and uh the king of saudi arabia stood up at the time

00:34:53.380 | and said there's no glory in death and that was really important uh two of the things that we've

00:34:56.720 | talked about two of the big deals that came out of that people talk about the big investments did

00:35:01.220 | over 500 billion dollars of investments uh in arms sales with saudi arabia that created a lot of u.s

00:35:06.260 | jobs but the two agreements we made that didn't get a lot of coverage during that time was that

00:35:10.520 | we did a counter-terror finance center that we set up where we got all the gulf countries to really

00:35:15.020 | allow treasury to work closely with their banks to stop a lot of the funding to the terrorist

00:35:19.040 | organizations and then these kind of borderline organizations and the second one was in saudi

00:35:23.780 | arabia which is the custodian of the two holy sites in islam and the second one was in the

00:35:26.560 | islam mecca medina they started a counter-extremism center where basically they were combating online

00:35:32.800 | um radicalization that was occurring and if you remember in the us in 2016 we had the

00:35:38.320 | San Bernardino shooting we had the pulse nightclub shooting and a lot of people being radicalized

00:35:42.460 | online one of the things that I'm very proud of from the trump administration is the work

00:35:47.320 | that we did to really help saudi arabia change their trajectory and what I realized quickly

00:35:51.820 | was that in the us we just did not have the capabilities to win the long-term ideological

00:35:56.400 | battle ourselves so um we could be mad at you know saudi for some of the things that they've

00:36:00.360 | done in the past but they were the the most powerful partner we could have in order to

00:36:04.860 | uh try to uh combat uh the radicalization that was occurring both in terms of stopping the funding but

00:36:10.740 | also uh you know replacing the clerics who were doing the radicalization with the clerics who were

00:36:15.660 | uh restoring Islam to a more peaceful and more proper uh place so that was something that that's

00:36:22.140 | really current it's made a big difference I was just in saudi arabia a couple weeks ago at their

00:36:25.260 | economic investment conference and what was really exciting to me was I was meeting with a lot of the

00:36:29.400 | younger saudi entrepreneurs and I did a a conference in Bahrain to talk about the Palestinians in 2019

00:36:36.420 | and one of the big challenges we had when we were putting that together is we were thinking about

00:36:40.860 | who are the role models for these young Palestinian kids and in the in the Muslim

00:36:45.600 | world the you know they had some sports stars they had some business leaders but it wasn't

00:36:49.500 | really people who were necessarily relatable to a lot of the younger generation in saudi I was at an

00:36:55.100 | event with all these young tech entrepreneurs there who are building uh amazing companies a lot

00:36:59.600 | of Unicorns there they're doing a lot of the you know the companies that are dominant in the US and

00:37:04.460 | in Asia and now they're building them for the Middle East there and it's very very exciting and

00:37:08.360 | these really are the next generation of role models for a lot of these kids so uh that's a long

00:37:13.280 | way of saying that you know obviously you have to do what you have to do from a military perspective

00:37:17.300 | and the hope obviously is that it could be as quick as possible and that as few civilians as possible

00:37:22.400 | uh are hurt by this

00:37:24.440 | um but the notion is that once that's once that's completed you need to then create a framework

00:37:30.080 | where people don't just have more despair because in an area where there's no hope and opportunity

00:37:35.300 | then obviously the radicalists and the jihadists that's really where they do their best recruiting

00:37:39.980 | and they flourish so uh so so once this occurs there needs to be a paradigm created where the

00:37:44.720 | next generation feels like it's better for them to get a job be part of the economy uh and where

00:37:49.520 | they can live a better life through capitalism uh than by going to to these jihadist groups

00:37:54.380 | but it's leadership targeting right now that's the objective effectively I mean that's what I'm

00:37:58.940 | hearing is I think it's leadership and then degrading of capabilities right so because

00:38:03.500 | again what you've seen as well you've seen this with cartels in in in South America and you've

00:38:07.760 | seen this with terror organizations you know you you kill the top guy and sometimes you cut the

00:38:11.960 | head off the snake and the snake dies and sometimes it just you know it scatters into a lot of little

00:38:15.800 | pieces and then you end up it ends up becoming more complicated not less but I think here

00:38:19.340 | obviously leadership but but significantly degrading uh the capabilities for

00:38:24.260 | for anything in Gaza to uh to to threaten Israel and then actively build a better way

00:38:30.980 | actively build a better solution that's the only way and by the way even today it's it's much more

00:38:36.440 | easy to visualize that than it was in 2019 when I was talking about this because you're seeing the

00:38:41.060 | economic project in Saudi Arabia you're seeing what they're doing in UAE I mean the fact that

00:38:45.380 | Saudi shifted so much in five years should give you hope that it's really really possible and

00:38:49.340 | they've been pushing the rest of the countries to try to emulate and compete with them which is

00:38:53.780 | uh

00:38:54.200 | also an amazing thing I'd love to get your reaction to the difference in tone and messaging

00:38:59.180 | from Western governments versus what you're seeing sometimes on the ground with some of these

00:39:04.340 | protests and just how almost diametrically opposed the language and the rhetoric and the point of

00:39:10.220 | view is how is it that and sort of this is why I kind of asked you just for a little bit of a history

00:39:15.800 | how is it that people aren't taking all of these views in how is it that there is this

00:39:22.160 | radicalization that may not be a

00:39:24.140 | happening in the same level in the Middle East but is maybe happening actually in the West

00:39:29.660 | whether it's in our universities or other ones yeah so that's something like my friends in the

00:39:35.840 | Middle East a lot of them are laughing at the West because they're basically saying you know

00:39:39.800 | we we got all these Islamist radical Muslim Brotherhood people the hell out of our countries

00:39:44.000 | you don't see the same protests uh in those places that you see in the West and um and I

00:39:49.400 | think that in in in the West what's occurred is is people I saw this a lot when I dealt with the

00:39:54.560 | Europeans where people's understanding of the issue uh is more with their heart than it is

00:39:58.880 | with their head and obviously nobody wants to see any suffering um of any human beings but

00:40:03.680 | the reality is is that you know the the solutions that they've proposed for the last 75 years have

00:40:08.900 | all been uh just nonsensical they've more often than not perpetuated the problem than they've

00:40:13.580 | been solutions to the problem and you know I faced tons of criticism when I was you know in my role

00:40:18.140 | working on this issue and mostly because I I kind of looked at all the things that have been done in

00:40:22.580 | the past and keep my being asked to work on you know the Middle East it's like uh it's almost

00:40:27.200 | like a joke right it's it's the hardest problem set you can get in the world and I think we almost

00:40:31.460 | made it look too easy getting the results that we did and we left it very quiet and I think now

00:40:36.620 | people are starting to appreciate that it wasn't that easy and it's not um it's not a simple problem

00:40:41.960 | set to deal with and uh but I think that a lot of people um were were were kind of

00:40:48.020 | looking at um at what they thought was wrong but looking at the wrong fruit causes for how it got

00:40:54.380 | there I have a question for you and Sax I'd love to get your guys opinion on this India dealt with

00:41:01.880 | a terrorist attack when manohan Singh was prime minister and basically it was an extremist Muslim

00:41:07.760 | group from Pakistan Lakshari taiba that came in and killed a lot of Indians but a lot of

00:41:12.860 | foreigners as well right attacked some of the major hotels in Bombay Etc and

00:41:17.360 | what happened was manohan Singh didn't do anything and in hindsight what was written

00:41:25.220 | is you know they debated what to do they debated do we go after this group do we show some proactive

00:41:33.920 | demonstration of force do we invade Pakistan ultimately they went on a more covert path to

00:41:40.640 | sort of dismantle that terror Network and there was just a lot of international support that came

00:41:44.900 | around it can we steal men whether it would have been possible for netanyahu to take that path

00:41:51.980 | or was it really not even reasonable just curious what you guys think about that

00:41:58.220 | do you want to go first uh no you should go for a chair okay so um look at anything's possible uh

00:42:08.900 | chamath and I think that there's different ways look I think the big fears initially were that

00:42:13.580 | going into Gaza

00:42:14.540 | uh number one you'd be walking into a big trap and number two is you would be inviting a major

00:42:19.520 | escalation in the region the the third fear was obviously the degradation of the Israeli economy

00:42:24.140 | when we did the Abraham Accords one of the big uh attractive uh things to a lot of these countries

00:42:30.380 | to be partners with Israel was their massively robust economy and what could happen if they go

00:42:35.420 | to war and it's a prolonged war is that economy can go off track I think GDP will take a big hit

00:42:39.380 | there in Q4 but obviously you know in Israel they do have a history of coming back right away but if

00:42:44.180 | if this is a prolonged uh war effort uh there could be big hits and then you also think about in the

00:42:49.100 | age of you know AI and software development losing you know a day of productivity is the equivalent

00:42:53.360 | of losing you know a week or a month and uh and they don't want to fall behind in what they're

00:42:57.560 | doing so there is an argument to be made for doing that but I do think that from Israel's perspective

00:43:02.480 | um I do think that they understand this threat I think that they want to eliminate this threat

00:43:08.420 | and I think their view is is uh we we can't live like this anymore uh we underestimated it before

00:43:14.060 | uh and and we will not let that happen again and I think also the psychology of really the Jewish

00:43:18.920 | people is you know it's funny once I was sitting with uh with uh Prime Minister Netanyahu and one

00:43:23.660 | of the generals and uh and BB was basically saying like you know if Iran gets too close

00:43:28.280 | this is what I'm going to do we're going to have to take matters into our hands and the general

00:43:31.400 | basically said to me said you know I get it you know you guys aren't going back to the ovens and

00:43:34.760 | I was just like wow you know so it was a real acknowledgement of like the way that Israel

00:43:39.080 | operates with kind of no margin for error and I would always say when I would negotiate with the

00:43:43.040 | Israelis that you know sometimes you do a contract and there's like you know there's there's two issues

00:43:46.940 | that are a 10 and like a couple issues that are five and like a whole bunch you know a whole bag

00:43:50.120 | of issues that are like twos and threes and when I would negotiate with the Israelis like they would

00:43:54.500 | treat every issue like it was like a 10. you know what I mean in the sense that like they they just

00:43:58.820 | operate like there's no margin for error um and uh and I do think that obviously there was some

00:44:04.400 | complacency and and and the internal division you know led to them being caught off guard here but

00:44:08.960 | I think that uh they're going to do what they're going to do to make sure this this happens and I

00:44:12.980 | think there's also a way where Israel feels mentally like we have to show that we're strong

00:44:17.360 | or else people will will go after us and I think that that's what they've done and I will say you

00:44:21.920 | know the fact that Israel's gone from being completely divided to now uh fully United in

00:44:26.360 | this effort I mean even the people on the far left um in Israel who are all peace who are you

00:44:31.100 | know funding you know jobs with the Palestinians and you know housing them in their homes I mean

00:44:35.060 | they're basically saying they want to go to war so the mentality there is very much we need to

00:44:38.840 | do what we need to do now to keep ourselves safe people are very very uh heartbroken and they're

00:44:42.800 | heartbroken for those who are who are passed um they're they're praying very closely for the

00:44:46.580 | hostages um and uh but they've given a lot of latitude to their government to do what it needs

00:44:51.680 | to do to make sure this this is this is not uh this does not occur again and I will say too like

00:44:56.600 | Israel also recognizes that I think now they have the world more on their side uh than they have in

00:45:02.120 | in uh in past conflicts and I think their view is to um their view is to to do it while they

00:45:08.960 | have that situation sacks what do you think could Netanyahu have

00:45:12.440 | taken the the path of doing nothing no I don't think so I mean not given his domestic political

00:45:19.700 | situation I think the Israeli people demand a response and look one of the arguments that Israel

00:45:27.800 | would make is that if this happened to you the United States or you Russia or you China what

00:45:33.260 | would you do I mean I think we know we would turn Gaza into Fallujah or Mosul Russia would turn it

00:45:40.460 | into Grozny so I think

00:45:41.600 | Israel is taking the response that I think most countries would take and given their situation the

00:45:51.020 | thing I worry about is that Israel is not the United States I mean the United States because

00:45:54.860 | it's so powerful can act largely with impunity we don't have to worry as much about blowback

00:46:00.380 | and Israel does because at the end of the day they're a small country in a very hostile region

00:46:04.280 | and so I do worry about the potential for unintended consequences here one potential

00:46:09.860 | consequence is horizontal

00:46:11.540 | escalation does this war somehow spin out of control and it could lead to a much wider

00:46:15.500 | regional war that would not be in Israel's interest the other is diplomatic isolation

00:46:20.120 | because I do think that Israel is taking a big hit right now and the information war the war of

00:46:24.020 | Republic opinion and then finally you do have a lot of civilian casualties and and those civilians

00:46:29.240 | have brothers and sisters and cousins and so forth and that's going to lead to the next generation of

00:46:33.080 | terrorists and so even success in this operation against Hamas doesn't solve the long-term problem

00:46:40.280 | I mean it just kind of keeps it going

00:46:41.480 | going so I think all of those things are potential problems but at the end of the day if Israel can

00:46:50.420 | have a successful military operation here that significantly degrades or destroys Hamas without

00:46:56.780 | this thing spiraling out of control that buys them time to find a political solution then maybe it

00:47:04.280 | will be worthwhile I mean I think a lot depends here on what the outcome ultimately is I think

00:47:08.120 | it's like a very tough thing to judge without knowing what the outcome is going to be the

00:47:11.360 | the King of Jordan a couple of weeks ago gave a speech and in the speech he said there is no peace

00:47:19.340 | possible in the Middle East without the emergence of a Palestinian state with a two-state solution

00:47:25.100 | being the only path forward a Palestinian independent and sovereign state should be on June

00:47:30.020 | 4th 1967 lines with East Jerusalem as its capital and so that the cycles of killing whose ultimate

00:47:37.460 | victims are innocent civilians and

00:47:39.440 | is this the only path to stabilization Jared and is that where we're headed so that statement is is

00:47:50.900 | the same throwaway statement right that's the safest statement for anyone to say because that

00:47:54.980 | became the international consensus so you know one thing that was super interesting to me when

00:47:59.660 | I was working on this was um I kind of said to my team once I was like where does the Palestinian

00:48:04.520 | claim for East Jerusalem as the capital come from and I had a guy on my team who was a military guy

00:48:09.380 | who actually worked for John Kerry and I'd always have him in the room because he would represent

00:48:12.680 | the Palestinian perspective um because he had made a bunch of Orthodox Jews and you know we tried to

00:48:17.240 | be impartial but you know we did the best we could to have you know all perspectives represented and

00:48:22.460 | um and he came said I actually don't know and then what's interesting is you know when when the West

00:48:29.540 | Bank was actually governed by Jordan the capital at the time was Amman and so it really wasn't till

00:48:35.540 | the uh the the 1988 um uh uh

00:48:39.320 | launch of of this right for a Palestinian state that they self-declared that the capital should

00:48:43.220 | be East Jerusalem and so that was actually an interesting notion as well and I think that you

00:48:47.600 | know everyone knows that that's not going to be the case and I asked one of the leaders once why

00:48:51.200 | they say that and they said well it's a cliche and I said well maybe we need a new cliche and

00:48:54.860 | he says yeah that's a good idea let's come up with a new cliche so I think whatever solution

00:48:59.600 | is going to occur has to be pragmatic right you you the reality is is that if if we're

00:49:04.820 | going to learn from Gaza there's a couple of lessons to learn right number one is

00:49:09.080 | you know Israel withdrew from Gaza in 2005 or 2006. uh they forcibly removed 50 000 Israeli

00:49:16.460 | settlers uh from Gaza um all those people they they left their their homes they left their

00:49:21.260 | businesses um thinking that would be peace they they transferred governance of Gaza to the

00:49:26.240 | Palestinians the Palestinians then had an election again it was uh you know the the PA at the time

00:49:31.820 | convinced the Bush administration to allow for Hamas even though their charter called for the

00:49:36.260 | destruction of Israel to participate in the election

00:49:38.660 | and they won in a democratic election since that time there's been no improvement in the economy

00:49:43.400 | uh it's become a a real security risk for Israel and so Israel withdrew and then let them govern

00:49:49.700 | themselves and now you have what's happened today be the case so I I think the reality is is that

00:49:55.400 | you know if you look at the historical um maps and the historical lines I mean there's really no

00:50:01.820 | uh making a claim there's no other example in history where somebody's lost three offensive

00:50:08.240 | wars and then has been able to maintain their claim over a territory uh that they had before

00:50:12.680 | but I do think that there is an international consensus and I do even think in Israel there's

00:50:17.420 | consensus to give the Palestinian people the ability to kind of have their own land and then

00:50:22.940 | also to govern themselves so the word state is is a very loaded term because it comes with a lot of

00:50:28.580 | definitions to different people but I think the constructs of what's achievable is um is in the

00:50:34.820 | West Bank or Gaza there can be no security threats

00:50:38.180 | threat to Israel this is something that that they were insistent on before and I was sympathetic this

00:50:42.500 | was even before October 7th and if you go back and look at the work we did and what we put out

00:50:46.220 | we had a security regime that we designed with U.S intelligence and military and Israeli intelligence

00:50:51.740 | and Israeli military that we thought actually gave a lot of autonomy from police force perspective to

00:50:56.900 | the Palestinians allowed them to build their capabilities and and they kind of like earned

00:51:00.920 | their way into more and more security control which I thought was the right way to do that

00:51:04.880 | because you don't want to take a ton of risk there the other part of it though

00:51:08.000 | in any state is you need a functioning economy otherwise obviously you have a big grievance party

00:51:13.340 | the biggest problem the Palestinians have faced over the last called 25 years since since Oslo I

00:51:19.160 | guess almost 30 years now since Oslo is is just bad governance so the problem with the PA is is they

00:51:25.040 | were elected I think in 2005 and they haven't another election since so I think president boss

00:51:30.260 | is in the 16th 17th 18th year of like a four-year term very not popular he's more popular in

00:51:36.380 | Washington and in you know the United

00:51:37.940 | States than he is you know in his own country um he's uh it's a very corrupt system again a lot of

00:51:44.060 | the money's gone for uh for the leadership their family for the top people but not to the it hasn't

00:51:49.100 | trickled down to the people and so there's not a lot of trust on it uh you know I held a conference

00:51:53.660 | in Bahrain where I brought all the top investors in the Middle East I brought uh Steve Schwartzman

00:51:57.920 | from Blackstone came we had uh Randall Stevenson came from from AT&T and everyone came and said

00:52:03.200 | you know what we actually would love to help the Palestinian people we'd love to invest here

00:52:07.340 | uh and then they looked at the magnitude of it I mean it's three million people which is like a small

00:52:11.540 | state in the West Bank and two million in Gaza again it's like a small state in the U.S um and

00:52:15.980 | obviously to build things it's much cheaper I mean the GDP per capita there is about 3 000 per person

00:52:20.240 | so uh you know it's it's it's cheaper labor it's it's it's people do it and it's connected right to

00:52:24.800 | Israel right which is like you know California not being connected to Silicon Valley so the prospects

00:52:29.660 | for prosperity spillover are massive uh being sandwiched between the rich Gulf and the growing

00:52:35.180 | Israel so but the thing that's missing in for the Palestinians is very basic things right there's no

00:52:40.880 | fair judiciary there's no rule of law the governance is terrible the institutions are incredibly opaque

00:52:46.640 | and what all these people were saying is we'd love to invest here but it's just not an investible

00:52:51.380 | place and so the thing that's been holding back the Palestinian people has not been Israel it's

00:52:55.760 | been their bad leadership and again you're seeing in other places in the Middle East that with the

00:52:59.840 | proper leadership investments can come and those investments will actually lead to people living a

00:53:04.820 | much better life how does that leadership change in your view so the way that I would think about

00:53:11.000 | this is that if you're waiting for a solution to come to you you're not going to find it right if

00:53:15.500 | you say okay let's go back to the UN well they have a perfect track record of failure let's go

00:53:19.580 | back to the PA well they have a perfect track record of failure you're definitely not going

00:53:22.880 | to go back to a mosque so you need to find something different so I think you either need

00:53:27.140 | to create something new or you need to um look at what's working and put it together so some places

00:53:32.720 | that could do it I mean the World Bank has a lot of good

00:53:34.760 | uh institutional knowledge they helped us work on the plan the World Bank and the IMF

00:53:38.780 | uh you know some of the other regional governments I mean Jordan their government is pretty pretty

00:53:43.220 | capable I mean they're they're better at military than economy but I think they're they're starting

00:53:46.880 | to focus more on economy as they realize that that's necessary if you look at the benefits of

00:53:53.120 | that area the Palestinian people are are like a 99 literacy rate again through the taxpayer US

00:53:59.420 | taxpayer dollars in international donations we've paid them to become very educated unfortunately I

00:54:04.220 | think we've poisoned uh their minds with a lot of what's been taught in their curriculums

00:54:08.420 | um they have a pretty good health care system there again I think it could be improved because

00:54:12.680 | it's been done very kind of piecemeal versus holistic and then in addition to that they

00:54:17.600 | obviously have a tremendous amount of tourism sites I mean you know Jewish Christian Muslim

00:54:21.920 | tourism sites so if they ever get their acts together I mean the boom in that area can be

00:54:26.780 | uh unbelievable and I think it could work very very well there was one time where the Palestinian

00:54:32.300 | economy was working I think it was about

00:54:33.920 | 2007 there was a guy named Salam Fayyad who was the first time somebody came in who was uh he was

00:54:39.680 | not corrupt things were happening uh you know wages were rising uh projects were moving the

00:54:45.080 | money was actually getting to the people and he became so popular because he was such a doing such

00:54:49.520 | a good job administering that uh that the president got rid of him that a boss got rid of him because

00:54:54.020 | he saw him as a threat to his power so you know what's happened is not different right you always

00:54:58.040 | have kind of a tyranny of the minority in some way uh with with with most forms of of government and

00:55:03.560 | so uh what happened was is as he was starting to gain popularity he became a threat to kind of the

00:55:08.780 | cronyism that occurred and so I think that the international community if they're going to put

00:55:12.980 | money into this again to either rebuild number one it has to be conditions based again we've put

00:55:18.380 | tens of billions of dollars into this situation right I mean this this refugee group has gotten

00:55:22.880 | more money over time than any refugee group in history by a factor of maybe a hundred right and

00:55:28.520 | then you know you you've none of it's been conditions based and it has to be in in a set

00:55:33.980 | where people are trying to create outcomes I think one of the problems is a lot of the people working

00:55:37.700 | on this don't have business backgrounds they understand you know human rights or they

00:55:41.420 | understand politics but they don't understand capitalism and they don't understand what kind

00:55:45.260 | of framework you need in order to allow a society to thrive has Treasury ever tried to trace these

00:55:50.900 | dollars or some other organization to just show where the theft happened and where these pools of

00:55:56.780 | money have gone to there's some intelligence on it that I can't go into but uh but I think most

00:56:02.660 | people don't want to know to be honest I mean you could just look at it in a couple of ways like you

00:56:07.160 | know you look at um you know we would meet with Prime Minister Netanyahu in Washington and he

00:56:12.260 | would take a commercial ll flight to come meet us and he runs a military superpower an economic

00:56:16.880 | superpower in the region uh President Abbas would come visit us in Washington and he uh obviously

00:56:23.240 | represents a refugee group and he would fly in a 60 million dollar

00:56:26.480 | Boeing business jet a private jet to Washington I mean I'd meet with him and we'd be sitting around

00:56:31.400 | and uh you know he'd put a cigarette in his mouth and then somebody would come over and they'd like

00:56:35.360 | the cigarette for him and I'd be like am I meeting with the head of a refugee group I'm meeting with

00:56:38.540 | like a thing you know it's just it was a different situation and um but I think people just but he's

00:56:43.880 | the reasonable one right the alternative is Hamas and those guys I mean those are billionaire

00:56:49.160 | hypocrites who live in Qatar at the four seasons right yeah but but my sense is is you're you're

00:56:56.180 | going to get a lot of money and you're going to get a lot of money and you're going to get a lot of money

00:56:56.460 | at what you demand right and I think that from the U.S's perspective right we give about four billion

00:57:00.720 | dollars a year in foreign aid to the PA to UNRWA to Jordan to Egypt and uh and we've we've tolerated

00:57:08.040 | you know status quo that's not acceptable and you know one of the difference again Trump had a lot

00:57:12.780 | of tension with the foreign policy you know establishment and it was over a lot of things

00:57:17.040 | right obviously he wanted to end the forever Wars uh he felt like we should get some return on the

00:57:21.240 | investments we were making he felt like USAID wasn't an entitlement um but I think the biggest

00:57:26.160 | difference was they wanted to all maintain the world they wanted just to manage it and he wanted

00:57:30.360 | to change it and you know what we did by the by the time again this was one of the disagreements

00:57:34.620 | I had with the incoming administration um is that when we turned over the Middle East to them again

00:57:39.300 | we I spoke earlier about what a mess uh you know we kind of inherited when we started but we had

00:57:44.460 | uh five peace deals between Israel and majority Muslim countries uh Iran was totally broke again

00:57:50.880 | under Obama uh when he left they were selling about 2.6 million barrels of oil a day

00:57:55.860 | under Trump when he left office they were selling a hundred thousand barrels of oil a day they were

00:58:00.120 | out of foreign currency reserves they were dead broke uh now they're back up to three million

00:58:04.920 | barrels a day of sales they've done over a hundred billion dollars uh of oil revenue uh since we left

00:58:10.320 | office the Palestinians you know one of the things we did uh after I think the first year is we cut

00:58:15.000 | the funding to under us very controversial we're saying oh this is for refugees we said it's not

00:58:18.900 | for refugees it's to build Terror tunnels and rockets and they're saying no it's for schools

00:58:22.560 | and hospitals and we were saying those are the military bases and they were saying you guys

00:58:25.560 | are crazy you're cruel and our whole thing and so when we left the PA was was basically broke

00:58:31.380 | um the Arabs had kind of lost interest in in that cause uh because they kind of saw that it was it

00:58:36.420 | was morally bankrupt and that uh every time we gave a boss the opportunity to do something better

00:58:41.100 | for his people he refused and and they kind of saw that you know we kind of we smoked him out

00:58:46.200 | a little bit and so we kind of took the issue and we shrunk it tremendously and the final deal

00:58:50.160 | we did was between Qatar Saudi Arabia UAE Egypt and Bahrain and that

00:58:55.260 | was a critical uh deal to do because that was what really made it possible for uh Saudi and

00:59:01.080 | Israel to then do the deal and that was really on the table right when we left but it took too

00:59:05.580 | much time they allowed Iran to get too strong they started allowing Iran to get money they started

00:59:09.960 | funding the Palestinians and and under again and uh and now you have a situation where it's just

00:59:15.120 | become you know a mess it could be fixed it definitely can be fixed if you're strong and if

00:59:18.840 | you're smart but if you're going to go back to kind of the old ideas you're going to get the

00:59:23.400 | results you need new ideas you need to create the ideas and force them you can't just wait for them

00:59:28.800 | to occur and then go back to the old institutions and the old people who have failed before

00:59:32.280 | who do you think should be Secretary of State in the next administration I think Jared should

00:59:37.740 | let me ask you about the two-state solution let's just double click on this I mean my view

00:59:45.180 | on this and I think by the standards of Israeli politics I'd be a liberal there

00:59:48.780 | is that the only solution the only way out of this is the two-state solution

00:59:53.100 | you know we can't have a situation of indefinite permanent occupation of the Palestinian people

00:59:59.340 | at some point they developed a national Consciousness and if you have conditions

01:00:03.840 | of permanent occupation they're going to resist and you're going to have outbursts of terrorism

01:00:07.440 | at the same time if Israel just outright annexes these territories or continues on a program of

01:00:16.200 | call it creeping annexation or keeps building settlements in the West Bank and you have a

01:00:20.220 | greater Israel that

01:00:22.800 | eventually Jews in Israel will not be the majority of the population I think if you look at kind of

01:00:27.780 | greater Israel there's about 7.3 million Jews there's about 7.3 million Palestinian Arabs so

01:00:34.740 | if if the plan is a single greater Israel it's either going to stop being a Jewish state because

01:00:42.660 | you know the Palestinians will vote for something different or it'll continue being the Jewish state

01:00:48.120 | but there's going to be some sort of two-tier system where a lot of Palestinians won't have the

01:00:52.140 | vote

01:00:52.500 | and so eventually a greater is will have to choose between whether it wants to be Democratic or

01:00:57.000 | whether it wants to be Jewish and that seems like a very bad choice it seems like we want both those

01:01:01.200 | things to be true so again that kind of brings you back to a two-state solution as the only option

01:01:07.200 | here and yet it seems to me that the two-state solution has never been further away it seems like

01:01:13.980 | it's never been further away in terms of Israeli domestic politics and it's never been further away

01:01:20.760 | in terms of having a

01:01:22.200 | negotiating partner to negotiate something like this with so that would be sort of my pessimistic

01:01:29.700 | Outlook I mean I know you're pretty optimistic about the situation do you see it differently

01:01:33.540 | than that is that framing wrong somehow how would you how would you see it okay so number one is I'm

01:01:39.900 | naturally optimistic and I I just find it's more fun to be optimistic than pessimistic but I'll say

01:01:44.820 | everything I'm saying in the context of the fact that this is a really really really really hard

01:01:49.560 | problem set right so

01:01:51.900 | um I'll try to say this um in the right order so number one is I I don't think there's any

01:01:57.360 | viability to a one state and I don't think that that's something that will ever occur

01:02:00.960 | um number two is um and I'll actually you know what's interesting one of the problems is a lot

01:02:06.780 | of the uh the Arabs and the Palestinians would actually prefer to be part of Israel than a

01:02:11.160 | Palestinian state so right before covid we released the Trump peace plan which uh which again you can

01:02:16.500 | you can still find online and uh I think the political part of it was about 54 pages the economic

01:02:21.600 | part and the political part is about 181 pages in detail um we at the time got the right wing and

01:02:27.120 | the left wing again it was they were in the third election and we had uh Prime Minister Netanyahu and

01:02:31.680 | Benny Gantz who's also an amazing um person came in and they all endorsed it and so what I would

01:02:37.920 | find what I tell you is that semantics you know state has to do a lot with semantics so you can

01:02:42.300 | definitely give them a state the question is is you know you have to give Israel certain overriding

01:02:46.560 | security controls so that uh so that the state cannot be a threat to them and then you can let

01:02:51.300 | them kind of earn their way out of that with good behavior and and showing that it's a true

01:02:54.780 | partnership but what I will just tell you is that whatever you call it you give them a flag you can

01:02:59.700 | give them whatever you want unless there's a system where people can live a better life then

01:03:04.320 | the grievance will overtake uh will overtake whatever Independence they have and it will just

01:03:09.600 | become a problem again and so um so I do think a two-state solution is is possible again what you

01:03:14.760 | do with Gaza is very much you know TBD um but I do think especially in the West Bank there's definitely a possibility

01:03:21.000 | to do it and I think that from Israel they'd like to see that happen where uh they'd like the

01:03:25.380 | Palestinians to be able to govern themselves but it's it's a couple big ifs if it's not a security

01:03:29.700 | threat and if they can have a viable economy that's going to happen one of the big things

01:03:33.540 | that's happening now that I'm hearing about is that I think the number was like 250 000

01:03:37.740 | Palestinians who had worked visas from the West Bank to uh to go into Israel and now with the

01:03:43.020 | threat there's just such a great distrust that has that has occurred that those are now not being

01:03:47.040 | renewed so I think Israel is going to have to bring in workers from other parts of the world but that

01:03:50.700 | is an amazing thing right you had Muslims and Jews uh you know working together you had uh you know

01:03:56.160 | Palestinians whose lives were better off because they were working with Israel so the vast majority

01:04:00.780 | of the Palestinians maybe not the vast I don't know it's people have different perspectives on

01:04:04.800 | this but I I just believe that fundamentally human beings want to live a better life uh I don't think

01:04:09.780 | our natural state is is to hate each other or to be uh or to not be together again if you look at

01:04:14.640 | the Middle East for you know a thousand years before the Second World War I mean Jews and Muslims and

01:04:19.740 | Christians they lived very peacefully together so you know what I was seeing with the Abraham Accords

01:04:23.880 | and what I was hoping would occur would really be a reversion to the pre-World War II error where

01:04:28.440 | people were starting to live peacefully together but there's been a lot of hate that's been fermented

01:04:33.000 | and manipulated over over this time but the best way to start it is just you know take it one day

01:04:37.500 | at a time you know we used to say in government we get a hard problem you know used to say you

01:04:41.220 | know how do you eat an elephant you know one bite at a time and so you just have to kind of outline

01:04:45.000 | where you want to get to put in place the right system and then just start you know step after step

01:04:49.440 | and then you get to a place and maybe you're able to do something that becomes viable with time

01:04:53.580 | Jared did you see the um debates last night did you watch them uh no I did not sex did you watch them

01:05:01.740 | uh I didn't watch the whole thing I've seen clips on social media do you have any takeaways I mean

01:05:08.340 | was it even worth watching yeah I thought I thought the the clips did a pretty good job of

01:05:13.800 | actually showing some of the punchier moments but the crazy thing is that the the mainstream media

01:05:19.140 | has completely erased Vivek's candidacy I don't even think it exists in the eyes of the mainstream

01:05:27.240 | media but if you look on on X all the posts were like he clearly won and he was basically throwing

01:05:34.320 | fireballs everywhere but then if you go to you know CNN or Fox you don't even hear his name right

01:05:40.320 | so it's it's a real real difference the mainstream media coverage is what they want you to believe and

01:05:47.040 | social media is what actually happened

01:05:48.840 | it's what people actually believe and I think that if you look at social media

01:05:53.580 | what it shows is that Vivek dominated the debate and he was throwing fireballs and he was slamming

01:06:01.740 | the neocons on the stage and showing that there's been I think an irreparable break between the

01:06:09.900 | neocon establishment the Republican Party and the more Populist maga wing so I think that's

01:06:15.660 | that's kind of what social media is showing and then you know if you listen to mainstream media

01:06:20.040 | there they they said they talked about Vivek it said he had some sort of meltdown and he insulted

01:06:24.480 | Nikki Haley's daughter or whatever or something like that about her tick-tock usage yeah by the

01:06:29.460 | way all he said is that they he was being berated for why he created a tick-tock account and he's

01:06:34.620 | like I want to reach young people you know like your daughter who's on there and um yeah that's

01:06:40.680 | what he said and Nikki Haley called him scum for that well no but she also she also pulled like the

01:06:41.580 | Will Smith line like get your my daughter's name out your mouth did she slap him no she didn't I

01:06:53.160 | think it's a pretty good point there's like 75 million young Americans on TikTok if you want to

01:06:57.180 | reach them that's where you post your messages I have seen Vivek's stuff on there I've seen RFK

01:07:02.880 | Juniors videos on there like everyone uses TikTok now if you want to reach people that's just reality

01:07:09.960 | Nikki Haley doesn't

01:07:11.160 | I'm not sure I don't know that she has much of a social media following because I don't think

01:07:16.080 | her campaign inspires any real grassroots I think her campaign is supported and propped up by the

01:07:23.340 | GOP establishment wing I don't think there's any market for what she's selling among the grassroots

01:07:27.960 | so social media is kind of pointless for her but if you actually want to reach people especially

01:07:32.160 | young people use social media well it's pretty intense when Vivek said that the the head of the

01:07:39.060 | RNC should just be fired for all the losing

01:07:40.980 | and kind of went through every single election in the midterms and whatnot that they've lost since

01:07:45.960 | she became the head of the RNC and apparently on social media uh she mouthed something to the

01:07:51.900 | effect of this guy's an a-hole he's not gonna get a single cent from us yeah no it's Ronna McDaniel

01:07:59.160 | who I know I mean I like Ronna but I mean has she done a good job sex look I it's hard for me to

01:08:04.800 | speak to the job she's actually done because I don't know the activities are actually involved in

01:08:09.480 | being RNC chair

01:08:10.620 | so but I mean Vivek's point is look at the results so if we were on the board of a company that kept

01:08:17.880 | missing quarter after quarter and the CEO said no look at all the good things I'm doing we would

01:08:22.680 | probably still fire that CEO just because you're like how do things get worse right you just take

01:08:27.720 | the chance that you bring in a new CEO they're going to do better so the reality is our results

01:08:32.400 | in the Republican Party have been shitty lately now is that all Ronna's fault no it may not be

01:08:36.540 | much of her fault at all but how do you do worse

01:08:39.240 | I think a big reason for the crappy results have been the abortion issue we've now had

01:08:47.400 | this issue on the ballot in at least six states most of which were red states a couple of them

01:08:53.880 | were purple states it's lost every time the anti-abortion or pro-life side has lost decisively

01:08:59.460 | every time and I think there's a lot of reasons to vote Republican I think Republicans have the

01:09:06.180 | advantage on the economy on border

01:09:09.060 | on anything related to to woke on um Prime and homelessness these are all issues that should be

01:09:17.460 | big winners for Republicans but the public by I think probably a two-thirds majority does not want

01:09:24.660 | to ban abortion and as long as that issue is in the Forefront Republicans are going to lose and

01:09:30.780 | actually it was Ann Coulter who just said this Ann Coulter had a really good blog post about this

01:09:35.820 | saying that the pro-life yeah I retweeted it by the way she's very pro-life I mean she's a social

01:09:42.960 | conservative but she says that pro-lifer is going to wipe out the Republican Party they need to

01:09:47.400 | focus on non-political activities which is winning over hearts and minds they have to make the case

01:09:53.340 | to the country they have to persuade more people because they're not in a position they are not

01:09:58.380 | popular enough to actually win elections you concur Jared you think the Republican Party is

01:10:02.220 | going to change their position or need to change their position to win

01:10:05.220 | elections presidential election aside well ultimately if you don't win then you can't

01:10:10.320 | govern and you can't impact the changes you want to do so I do think that uh people are definitely

01:10:14.700 | paying attention you know the results are the results I will say that you know one thing with

01:10:18.600 | with Trump he won you know with his operation we were able to over perform our polling I think here

01:10:23.340 | in these last times there's been under performance of polling and so that's something that obviously

01:10:28.500 | you have to look at which is uh very troubling but I'll also say that with you know what I found

01:10:32.880 | again you know I'm not really um

01:10:34.560 | as somebody who was newer to the Republican Party what I found is that you know both parties are

01:10:39.360 | really I would say collections of of tribes right you have different tribes that kind of make up the

01:10:43.680 | party but what I found in the Republican Party was that there was a ton of infighting and finger

01:10:48.300 | pointing and purity tests and um you know instead of saying like you know you know I'm happy you

01:10:52.980 | agree with me on on 70 or 80 it was basically saying well if you don't agree with me on 100

01:10:57.720 | then then you're a bad Republican and I think that uh that's a that's a culture that's going to lead

01:11:02.820 | to you having very strong opinions but having no ability to effectuate things I think that people

01:11:07.680 | have to you know say where do we agree on on different issues uh that uh where do we agree

01:11:12.900 | on issues how can we work together to do it but if you don't win then you're not gonna be able to

01:11:16.740 | effectuate the things you want and even worse the other side is going to be effectuating the things

01:11:19.980 | they want and you look at where the world is today because of that there's a lot of internet fighting

01:11:24.300 | in the Republican Party I think Trump's instincts on abortion actually have been very good I said

01:11:30.240 | this a couple of months ago there was kind of a brouhaha on the right when Trump gave an interview

01:11:35.820 | in which he said that that actually went to Santa's had done in Florida with the six-week ban was a

01:11:41.520 | mistake and that he sort of up leveled the issue and just said I'm going to find a compromise that

01:11:46.800 | makes everybody happy and this created a lot of upset people on the right because they thought

01:11:51.600 | that Trump was kind of selling them out on the abortion issue and I made this case on Megan

01:11:55.620 | Kelly a couple months ago that I thought that what Trump was doing was pretty smart

01:12:00.120 | because he doesn't want to get pinned down on an issue that's going to hurt him in the general and

01:12:06.180 | I think part of the reason why he was being a little bit cagey on that issue is because he

01:12:10.740 | knows it would hurt him in the general and he's starting to think about that and I think the

01:12:16.500 | results that we just had the other day are strong vindication of that and just let me say just more

01:12:21.300 | generally that whenever Trump has opposed Republican groups think on an issue I think he's invariably

01:12:28.380 | been proven correct

01:12:29.340 | if you go all the way back to 2016 you know think about all the heresies that he committed in the

01:12:36.600 | Republican Party he spoke out against the forever Wars against Bush's forever Wars I think he was

01:12:40.980 | right about that at the time the Republican Party either wasn't talking about immigration or didn't

01:12:46.800 | really seem to care he basically made the border a huge issue I think it's proven right about that

01:12:51.900 | the issue of China and China trade was not a issue in the Republican Party if anything it was sort of

01:12:55.440 | the issue of China and China trade was not a issue in the Republican Party if anything it was sort of

01:12:57.420 | if anything it was sort of this the sort of unreconstructed free trade total free trade

01:13:04.320 | issue Brian was pushing the TPP value right exactly so Trump defied the orthodoxy on that I think it's

01:13:09.540 | proven correct Paul Ryan also wanted to ratchet back entitlements like Social Security Medicare

01:13:14.760 | and Trump thought that was suicidal for the GOP so he opposed that I think on all these issues

01:13:19.500 | whenever he has defied the orthodoxy he's been proven correct and um you know I don't know if

01:13:25.260 | it's a conscious thing or it's just that he's got tremendous

01:13:27.360 | gut instincts as a politician be curious to get Jared's take on that like how much of this is sort

01:13:33.060 | of him working things out and how much it is just his gut but I think this is why he stole the

01:13:39.180 | candidate to beat for the Republican nomination is at the end of the day for all of Trump's issues

01:13:44.520 | he's actually the best politician in the Republican Party you know I would see the

01:13:48.240 | way that he would work on trade and again uh you know trade deals usually take five six years and

01:13:52.800 | and you know his attitude on on trade was that whenever there's a multilateral it's

01:13:57.300 | the the weaker countries all ganging up on the stronger party and so he says like I want to do

01:14:01.320 | them bilaterally so he withdrew from TPP uh which everyone went crazy and said it was a disaster

01:14:06.360 | well we ended up negotiating with Japan and Korea and everyone and we got basically 95 of the market

01:14:11.460 | access that was in TPP without giving up any of the things that would have absolutely decimated

01:14:15.540 | our auto industry we renegotiated the the nafta which you know everyone said Obama said they would

01:14:20.940 | Bush said he wanted to fix it uh meanwhile Trump came in in a year and a half we renegotiated nafta

01:14:25.800 | and got over 80 votes in the Senate it was a bipartisan uh win and it set the highest standards

01:14:30.540 | for labor protection it did a lot of great things uh that I think make America way more competitive

01:14:35.580 | and hopefully will reduce our trade deficits so these were all things that he took on that people

01:14:40.680 | weren't willing to and again he said you know look if I'm wrong you know putting tariffs on

01:14:44.940 | these different countries I remember people coming into him saying uh say if you put these tariffs on

01:14:48.720 | the whole world's going to explode the U.S economy is going to blow up and I remember

01:14:51.540 | sitting with him privately and he said to me you know Jared I literally we had a year

01:14:55.740 | of debate and we had some people who were more religious about this issue than anything else

01:14:59.220 | and he says you know Jared I've been saying this for 30 years I believe it uh I campaigned on it

01:15:04.860 | I won on it I have to see it like I have to see it through it you know what if it turns out it's

01:15:08.940 | a big disaster I can always take him off you know and so that was kind of like his way of thinking

01:15:12.960 | about it where he had his instinct he followed his instinct but he knew he could always back

01:15:16.620 | off and I think his flexibility and unpredictability were some of his greatest assets and I think also

01:15:21.300 | on on the border and immigration again it's an issue with somebody you know grew up you know in

01:15:25.680 | the United States and then was living on the Upper East Side that I didn't a lot of resonance for but

01:15:29.160 | now you're seeing my friends in New York now they're getting a taste of what it can do you

01:15:32.640 | know to the country they're they're becoming you know big immigration Hawks like Trump the

01:15:36.240 | thing that the Republicans need to realize right now is that if you pick these topics

01:15:41.640 | that go down a rabbit hole you're going to be in a really tough spot in the general because

01:15:46.200 | the economy is also going to be in reasonable shape now if we were going to go into a November

01:15:52.380 | election where there were we were going to be in a recession that's very bad for Biden

01:15:55.620 | but sort of the tea leaves for whatever it's worth all the predictions all the predictive markets

01:16:01.680 | show that we're going to be in a reasonable place and so the Republicans get need to get very very

01:16:07.320 | focused acts as you say on the real issues list here right because they're not going to have the

01:16:12.120 | benefit of the tailwind of a bad economy to say President Biden has done a bad job necessarily

01:16:17.280 | and so the message will need to be even more precise and focused and so I think that that's

01:16:21.540 | going to be an important thing I did a little tea leaf reading on macro if you guys want to

01:16:25.560 | I have some charts yeah just let me just give you a little rundown of because I I went and I you know

01:16:31.560 | look we used to talk about these things when I was when we were doing a lot of forecasting going into

01:16:38.160 | this cycle but so here's like a couple of really interesting observations so the first one is when

01:16:46.260 | you look at this M2 money supply look how much it's actually shrunk now why that's interesting

01:16:52.920 | to me is that you have these two

01:16:55.500 | forces that are opposing each other one is we have these huge deficits so we're technically

01:17:00.660 | still frankly issuing a lot of money right but then on the other side we have QT so when debt

01:17:07.380 | rolls off we're not reissuing it and the balance of that is still a really constructive thing where

01:17:13.620 | now you can see that you know M2 has materially started to shrink and I think that that's a really

01:17:18.480 | positive thing because now what that does it combats inflation in a good way unfortunately

01:17:24.360 | for all of us it hurts

01:17:25.440 | financial assets which is not so good I think we've all felt that pain but the reality is that

01:17:30.360 | that's been working so then Nick if you go to the second chart so what you see now is like we are in

01:17:36.480 | a really decent place with inflation and if you think about what's going to happen over the next

01:17:41.220 | six months it's mostly in the bag and meaning we talked about this before but there's a lag effect

01:17:48.540 | on a handful of components specifically rents which when you roll them into this inflation rate

01:17:55.380 | you're going to see it really really turn over very quickly right so we know that inflation is

01:18:01.080 | falling it's going to fall even more the second thing Nick the third chart here is you can see

01:18:08.160 | that now validated in these 10-year break events remember this was the chart we used to look at

01:18:12.540 | when we were like holy mackerel something's going to break in November of 21. I think

01:18:18.840 | we probably should have just sold everything we had in November 21. we didn't do it but the point is

01:18:24.420 | now we know

01:18:25.020 | and what you see here is the 10-year break evens are also telling us okay guys we're going to be

01:18:30.780 | in a pretty decent place and so I think the setup is basically the following there's less money in

01:18:37.080 | the system that's a positive Nick if you show the last chart there's more money on the sidelines and

01:18:43.380 | this is just a picture of I mean look at the amount of money in money market funds six trillion and

01:18:49.080 | growing so that's a really positive sign which is that money will need to find a home

01:18:54.960 | once we have once well no even just now because you're gonna you're gonna be in a situation where

01:19:02.280 | and I'll get to this in a second but companies are now starting to perform because they've been

01:19:06.540 | able to re-baseline against very very lowered expectations right and and money managers have

01:19:11.640 | to do their job and deploy capital and that's something we mentioned I think last week but

01:19:16.200 | this is now the beginning of the new fiscal year for the entire mutual fund complex

01:19:20.700 | so that's trillions of dollars that have to get deployed because

01:19:24.300 | even though you pay them a very small fee per year you're not paying them to hold cash you're

01:19:29.940 | paying them to make decisions and own assets and then as you said freebird the last part of this is

01:19:34.920 | now you introduce rate cuts and that's a real accelerant now more than likely I think what that

01:19:41.220 | means is that markets are set up to do pretty well equity markets specifically and so I went and I

01:19:47.640 | looked at the data and I said well how can we see some data that proves that this is happening and

01:19:52.380 | what's amazing is if you look at the performance of what I would call the most risk adjusted seeking

01:19:59.160 | companies so those are tech businesses that have been absolutely hammered what you see in the last

01:20:04.860 | month is they have gone just nuclear adyen up 30 in a matter of a week doordash is up you know 25

01:20:12.360 | 30 percent in a matter of a week Datadog up 30 percent in the matter of a week these are the

01:20:17.580 | businesses that were just completely decimated so what is all of this saying I think what what

01:20:24.600 | it's kind of saying is inflation is very much in the rearview mirror rates are going to get cut by

01:20:30.660 | the middle part of the year the economy looks like it's going to be a soft landing that is

01:20:36.060 | actually very beneficial for the sitting president it's also good for equities it's good for us

01:20:41.580 | so it's really interesting actually I think we've had a fundamental kind of now change Jared do you

01:20:47.520 | think it could still have an effect on the election cycle I think it definitely could but I

01:20:50.400 | do think a lot of people are still very concerned I know the the the the inflation the the wages

01:20:55.920 | wage inflation is still about four percent I think that people are um are still just nervous about

01:21:02.880 | what could come I think there's been a lot of shocks and there's been a couple of times where

01:21:05.880 | it's felt that way and I think that you know election years traditionally bring a lot more

01:21:09.900 | volatility to the market because there's unpredictability about what the policy will

01:21:13.740 | be going forward so I think that of people who have kind of been a little uh

01:21:17.460 | whiplash from the the transition of over the last year to 18 months see that they're going

01:21:22.620 | into another cycle of uncertainty I do think that you know now you're actually getting paid to not

01:21:27.180 | do anything uh with your money in those money market accounts so there's less of a maybe less

01:21:31.860 | of a FOMO to kind of go out and do something uh there so so I think that a lot of people are still

01:21:37.260 | going to be very much in kind of wait and see mode and obviously look for for special opportunities

01:21:41.160 | which I think will only further exacerbate uh a potential decline as well Jared last week we talked

01:21:47.400 | about real estate you used to be in the real estate business what do you have any thoughts

01:21:50.880 | on commercial real estate and how good bad average things are so I still have a lot of

01:21:57.300 | exposure to commercial real estate through my family's company and uh we're mostly in the

01:22:01.740 | multi-family space I think the office space right now is in for a massive uh change in the industry

01:22:07.560 | I think you're going to see a lot of the older buildings get uh get transitioned a lot of them

01:22:11.580 | are trading now for below uh land price which is which is pretty remarkable I think you have um you

01:22:17.340 | also have a transition kind of what are the cities of growth right so you look at a place like San

01:22:21.300 | Francisco and there's a big debate over whether you know AI is going to save you know the office

01:22:25.800 | market there or whether it's kind of like the Detroit of this Industrial Revolution and it's

01:22:30.120 | just never going to come back and then you're seeing a lot of these San Francisco companies

01:22:33.120 | move to New York and the New York people are saying oh there's too much crime and homelessness

01:22:37.260 | and they're saying compared to San Francisco this looks like uh you know a super it's a beautiful

01:22:42.480 | place and so you know New York is still doing I think okay but you're seeing a lot of plays

01:22:47.280 | throughout the country that that are but the fundamental with real estate is it's correlated

01:22:51.660 | to interest rates and so you know if interest rates you know right now I think the 10 years

01:22:55.320 | like four and a half if it goes up to to six and you're just going to see it repricing and real

01:22:59.520 | estate assets if it settles at at four and a half five then you'll you'll probably see more stability

01:23:04.500 | and what that will be but ultimately uh real estate's become much more institutionalized

01:23:08.880 | over the last call it two decades and it's really a function of you know what are your your rent and

01:23:13.440 | expense growths and then what kind of what can you borrow at and can you create you

01:23:17.220 | a positive yield that's hopefully a good hedge against inflation so I I think net it will be

01:23:22.620 | a great asset class I mean it's probably one of the biggest asset classes in the world

01:23:25.680 | um I think right now though a lot of people are just holding back because they're not certain what

01:23:30.960 | the what the uh what the multiples or cap rates as they call them in real estate are going to be

01:23:35.700 | on a forward basis but they're really going to be a function of of what's the growth in the economy

01:23:39.960 | going to be and then also uh what the forward interest rates will be that's fair I think that

01:23:47.160 | the things challenged in real estate I mean the demand size challenge because you've had the whole

01:23:51.360 | work from home covet disruption and a lot of cities haven't fully come back I think New York's come

01:23:56.520 | back at this point but like San Francisco definitely hasn't I think New York is something

01:24:01.200 | like 95 of workers are back in the office I think in San Francisco it's only like 45

01:24:05.340 | so you've got demand issues then you've got financing issues you know um refinancing is

01:24:11.940 | much more expensive because interest rates are higher and then you've got these cap rate issues

01:24:15.660 | where no one knows what the

01:24:17.100 | long-term valuations are going to be so everything's a mess and by the way that gets

01:24:21.720 | compounded by the fact that now banks that have office exposure are pulling back their lending

01:24:25.920 | so you have a combination of you know cost of borrowing being higher and then the availability

01:24:30.720 | availability of liquidity going lower and that could further compound a lot of these refinances

01:24:35.580 | but a lot of what the people I know in the industry are telling me is that they're able

01:24:38.820 | just to work with existing lenders and just do some kind of uh extension and and you know just

01:24:43.200 | kind of live to fight for another day to get through the cycle and I will say in New York that

01:24:47.040 | the the rental rates for residential I think are at a historic highs and and actually what my family

01:24:52.980 | seen in their portfolio is that their properties in Jersey City which is basically like the sixth

01:24:57.180 | borough of New York are just absolutely on fire because it's basically you know you go in New York

01:25:01.320 | now you go to a CVS everything's locked up you can't buy anything it doesn't feel necessarily

01:25:06.180 | like the safest City you go to Jersey City they actually have like you know law and order and rule

01:25:10.320 | of law and so um so you still take a train to New York and that's actually been a place that's done

01:25:15.000 | incredibly well so you always have micro markets and you have different Trends that that work and

01:25:19.260 | don't work but uh but I wouldn't bet against New York it's still an amazing City and one thing about

01:25:23.820 | New York is every time I'm there I always talk with some of the cops and I basically ask them I

01:25:28.980 | say if you had a mayor that said uh go be cops go be cops nobody's gonna you know hold you back you

01:25:35.100 | know get out of the car do what you do we got you back how long would it take you to clean this place

01:25:39.180 | up and the answer I get is usually anywhere from like three months to six months so like we could

01:25:42.780 | have this place fixed so clearly they just have to let us be

01:25:44.940 | cops again and um and so I am hopeful that you know eventually there will be the political will

01:25:49.680 | to just you know let New York be what is it has the potential to be it's such an amazing dynamic

01:25:54.060 | place it's such a good point I mean it really is is just a matter of political will yeah if

01:26:00.360 | you hire more cops and let them do their job that will stop the crime or certainly the incentive for

01:26:06.660 | crime right now people think they can get away with this stuff and they don't get prosecuted

01:26:10.080 | when they get caught the jails are like a revolving door yeah they have plenty of cops they just have

01:26:14.880 | to do their jobs and they need prosecutors who will who will do their jobs as well and I worked

01:26:18.540 | at Manhattan District Attorney's office when I was at NYU law for the summer I mean you have amazing

01:26:22.740 | people there and if they are allowed to kind of follow the procedures and just just do the job

01:26:27.480 | in the way it's been done before uh you could make that city very very safe very quickly we

01:26:33.060 | actually have a cop shortage in San Francisco as well it's not just a matter of not letting them do

01:26:37.620 | their job we actually have a massive shortage the city needs to hire a lot more they allowed a pretty

01:26:44.820 | great rate of attrition in the role I don't think there's a lot of people who want to be cops in San

01:26:48.360 | Francisco it's a pretty tough job and they'll get a lot of support so yeah we actually have a shortage

01:26:53.580 | here and that's a big problem yeah but it's very solvable as you say I mean just hire more train

01:26:59.340 | them let them do their jobs Jared how much do you think um federal deficits and the federal

01:27:05.280 | debt matters going into this election cycle is it going to be a top topic or is it not really

01:27:09.240 | going to matter and then more importantly how consequential is it in reality I think in reality

01:27:14.760 | it's it's massively consequential um I think in the election cycle I think both parties are going to

01:27:19.860 | probably try to avoid talking about it because I think that you know everyone knows you know what

01:27:24.000 | I find in politics is when some things are really big issue people try not to talk about it that

01:27:28.080 | much and um but the hope is they're going to have to get cut right the hope is is that you know um

01:27:33.900 | once you get through the election things can be done to to to have to deal with it but it's

01:27:38.580 | definitely an issue that needs to be dealt with what do you think that is raising revenue or cutting

01:27:44.700 | expenses or both growth growth is the answer everyone that's that's the political cop-out

01:27:52.140 | answers growth six percent economic GDP growth how about we free spending until until the denominator

01:27:57.780 | can grow big enough to reduce the I mean balance budget Amendment Etc but but speaking of GDP

01:28:02.700 | growth I mean do you guys want to cover tech stories and AI this week real quick before we

01:28:07.260 | mean it's really incredible can I just uh I got I can't resist getting Jared on the record about uh

01:28:13.680 | the Russia Ukraine war

01:28:14.640 | oh so I mean this is a war that I thought was very easily avoidable you have a one minute budget one

01:28:20.520 | minute budget that's all I need I'm starting the shot clock Chamath is gonna ring the gavel I'm

01:28:25.080 | gonna take a break go you got 60 seconds I think uh I think David's happy to have somebody on uh

01:28:31.020 | who agrees with him on on most of what he's been saying uh so yeah we we worked with uh

01:28:35.880 | with Ukraine and we worked well with Russia uh during our four years uh I I'd like to point

01:28:40.200 | out of people that uh when we were in kind of our worst moments in covid the the second

01:28:44.580 | country that sent us a plane load of supplies and ventilators when New York looked like it was

01:28:48.360 | you know on the verge of going under was Russia and that was because we were offering them the

01:28:52.680 | possibility of of working together we armed Ukraine but we also told Ukraine you know don't

01:28:56.880 | even think about raising NATO uh as a membership as a way to go I think what happened was is the

01:29:02.640 | Biden administration uh you know had conversations with Ukraine about joining NATO Russia basically

01:29:07.740 | pushed their their military to the front line to say we are never going to let this happen

01:29:11.100 | if you go through uh kind of the geography and the history you understand why it's going to happen

01:29:14.520 | why um you know Russia you know will never let that occur and I think it was right after you

01:29:18.900 | know the embarrassment of what happened with our withdrawal in Afghanistan where they thought that

01:29:22.500 | we had a weak America that was going to come and do much to it so I think it was all very very

01:29:27.900 | avoidable I think that you know from what I read and again I wasn't involved in these conversations

01:29:31.620 | it did feel like there were some off-ramps uh initially but I do think that from our

01:29:36.060 | perspective I think the number one interest has always been how do we avoid a nuclear war I don't

01:29:39.960 | think that that's uh that's something we want to see happen and I do think that

01:29:44.460 | um I do think that hopefully they'll be able to find some kind of resolution to uh to not have

01:29:49.860 | that be a problem and I will say too that that's impacting the Middle East I mean right now what's

01:29:53.040 | happening with uh with Israel and with uh with the Palestinians and Iran is basically a proxy war for

01:29:59.040 | Russia I mean if America decided tomorrow let's change and support the Palestinians that Russia

01:30:02.760 | would come and be for Israel I mean there's not a lot of ideology for them in that but I think Russia

01:30:07.440 | and China want to see the U.S stretched and distracted so that we're less focused on kind

01:30:12.300 | of the areas where we're more directly uh uh you know you know you know you know you know you know

01:30:14.400 | uh in um in in conflict with them and so I think that that's a very major thing and I will say too

01:30:19.620 | like I I think that you know I I don't believe that the countries have permanent allies or

01:30:24.780 | permanent enemies you know I during my time in government we deal with the Germans and the

01:30:28.080 | Japanese who were vicious in World War II and we'd be against the Chinese and we'd be against the

01:30:32.640 | Russians who were basically our allies in World War II and so um I don't think countries really have

01:30:38.460 | friends I think countries have interests and I think that with with most countries you have areas

01:30:44.340 | of interest and I think that you can find those even with countries where you're in opposition for

01:30:48.300 | so you know one of the the operating principles I I brought to all the different foreign policy

01:30:53.160 | problem sets I was given was don't condemn tomorrow to be like yesterday uh because you

01:30:59.100 | think it has to be and so I would always look at something I try to pull whatever optimism I could

01:31:03.720 | find and then say you know what's the best case scenario from a first principles perspective I'd

01:31:09.000 | start there and then I'd work through all the problems uh that you had to try to get there so

01:31:13.260 | um so so

01:31:14.280 | um so David I think you've been uh way more right on Ukraine than than others and uh and I do think

01:31:19.380 | there's been a tremendous amount that's been mismanaged by uh by the US and and by the world

01:31:24.000 | in that in that scenario and I think it's unfortunate too because I think a lot of people

01:31:27.960 | have been killed in that war and I I do think that obviously the invasion of Ukraine was was a

01:31:32.760 | terrible thing it should never have happened but I do think there's a lot of um acts by leaders that

01:31:38.460 | could have been done in order to either prevent it or or minimize it and and I still think that that's

01:31:44.220 | one of the leaders in the world is to try to do the hard things and try to do the things to to make

01:31:48.300 | the world a less volatile and dangerous place you think it's coming to an end it's definitely lost

01:31:53.760 | its prominence it does seem militarily um again I'm sitting here in Miami you know reading you

01:31:59.880 | know you know X and newspapers and talking to folks so I'm not going to opine like I'm a general

01:32:05.040 | on the front lines but um but it does seem like it's kind of reached the point where it's not much

01:32:11.040 | is going to change militarily and uh and and and uh I think that's that's what I think is the most important thing

01:32:14.160 | um you know again like every day that goes on there's just more life that's being lost and again

01:32:17.820 | I said the same thing with Israel that I'd say here I mean Russia and Ukraine both have you know

01:32:22.020 | unbelievably brilliant people if you take all these these young men and you take them off the

01:32:25.680 | battle lines and put it back into you know their jobs of of creating things I just think that that

01:32:30.180 | that's just a much better thing for the world so uh my hope is that you know the leaders involved

01:32:35.100 | try to find a way to get to a resolution uh again you know I think that you know both sides have

01:32:39.840 | maybe over promised their people what what Victory looks like but that's the job of negotiation right

01:32:44.100 | you need to you know you need to find an off-ramp for everyone and get them to a place where we can

01:32:48.480 | you know start focusing on how to make tomorrow better instead of litigating grievances from the

01:32:52.920 | past do you guys see that Sunny Sunny tweeted this thing he had dinner last night with Farhan

01:32:57.960 | Thawar who is the VP of engineering at Shopify did you see his tweet yeah can you find it he said that

01:33:04.440 | Shopify has written more than a million lines of code with copilot already oh wow I was like what

01:33:12.360 | yeah

01:33:14.040 | I mean I don't exactly know how much there's your GDP growth Jared well that's definitely

01:33:21.600 | growth I wonder whether it'll be it'll be GD I mean I think it will I think a lot of product

01:33:29.460 | productivity gains are going to drive the economy forward historically I was just talking with

01:33:35.100 | someone this past week about over the last couple of decades we've seen a massive shift on GDP growth

01:33:41.100 | being driven largely by labor the labor force growing and labor participation and increasingly

01:33:47.460 | in the last couple of years there's been this tremendous shift that all GDP growth is predominantly

01:33:52.200 | driven by productivity gains and productivity gains you know economically net their way through

01:33:57.840 | the uh the system and you see the the total GDP grow this is the whole argument for AI particularly

01:34:03.780 | at a moment like this that if you're having a declining population you're having declining labor

01:34:07.440 | participation people want to work fewer hours

01:34:10.260 | if you want to keep growing the economy in order to sustain the debt and the services that you provide

01:34:15.240 | through a government infrastructure you have to grow the economy and you have to increase

01:34:20.280 | productivity it's the only way forward it's I mean like you could have one it's not like you're

01:34:24.720 | going to fire Engineers you're just going to have one engineer do five times as much

01:34:27.480 | Dave you just solved the whole budget deficit and debt issue you found the answer it's productivity

01:34:35.100 | driven by by the AI Advancements which by the way there is a lot of tremendous productivity gains

01:34:39.420 | that will occur because of this I always give people the example of the tractor like when the

01:34:44.160 | tractor came around it's not like you know people were like hey we're going to make less food now or

01:34:48.780 | you know what happened was we were able to farm 10 times as much and you know total output increased

01:34:54.240 | and when total output increased there was an abundance of surplus of food of calories that

01:34:59.100 | fed people population grew the overall economy grew there's no point in history

01:35:03.720 | that we've had a productivity gain through technology that didn't ultimately grow the

01:35:09.300 | economy like it's never well ever gone the other way in 1900 I think about 50 of workers in America

01:35:17.040 | were somehow involved in agriculture yeah by more than that yeah by 2000 it was down to like two

01:35:23.340 | percent one so it's not like we had a 40 unemployment rate all these other figures

01:35:27.720 | figure it out a way to do new and productive things and that led to more wealth that being

01:35:33.000 | said it did cause a lot of social disruption and I think certain job classes went away it had to get

01:35:38.220 | replaced by others that had to be invented if you think about a world where there's a million

01:35:42.120 | little companies or 50 million companies or 500 million companies that exist because there are

01:35:49.440 | one and two person teams that can build stuff that seems pretty reasonable and logical as the outcome

01:35:54.720 | there's a lot of sort of like

01:35:58.260 | financial engineering

01:36:02.280 | that kind of goes away in that world right I think the job of the Venture capitalist change is really

01:36:07.860 | profound

01:36:08.100 | I think there's a reasonable case to make that it doesn't exist it's more of an automated system of

01:36:14.940 | capital against objectives right and that you want to be making many many many small hundred

01:36:21.600 | thousand five hundred thousand dollar bets and then you get to this much larger scale where then

01:36:26.460 | you once you get someplace you can go and get the 100 and 200 million dollar checks I don't I don't

01:36:32.280 | know how else all of this gets supported financially well so there were a couple big news stories this

01:36:37.680 | week

01:36:37.980 | one was Elon launched grok which is a chat GPT call it competitor it took them about under his

01:36:47.820 | xai business unit took him about eight months to train grok one which is the model and by many

01:36:54.360 | measures is as performative as GPT three and a half GPT four at the same no no rock zero it took

01:37:01.020 | three months to train grok zero he's still training grok one sorry three months to train grok zero

01:37:04.920 | yeah kaifu Lee you guys know

01:37:07.860 | kaifu yeah he was at Google he was at Microsoft yeah and he is um in China and built

01:37:15.060 | uh his business starting eight months ago and in those eight months uh he's now delivered a

01:37:25.260 | 34 billion parameter model that he's completely open source that he shows by again some

01:37:30.960 | performative metrics outperformed llama too and again doing it from China speaks

01:37:37.740 | I think really clearly and importantly to the point we talked about last week about

01:37:41.760 | if the U.S tries to overregulate AI model development there are alternatives out there

01:37:47.400 | particularly open source alternatives that will continue to proliferate and improve and again this

01:37:52.560 | was done in eight months and then it's almost like the timing was perfect because in the same week

01:37:59.400 | open AI responds with developer day they didn't necessarily respond but they had developer day

01:38:04.500 | on the books for a long time and at developer day open

01:38:07.620 | AI released a number of really powerful tools for developers that allow them to build really

01:38:13.080 | powerful applications and infrastructure on top of open AI's platform so they released

01:38:19.680 | APIs for dolly 3. a four cents to generate an image using the dolly 3 API they launched a tool

01:38:27.300 | to create your own GPT which can actually leverage proprietary data so from within your own database

01:38:33.540 | you're in your your own data Lake you can build a GPT

01:38:37.500 | that you can then integrate into applications and GPT-4 Turbo with two versions that had you

01:38:45.600 | know pretty powerful pricing improvements all of this um being said it's a it's a big

01:38:49.980 | leap forward in what feels like a low-cost low friction multimodal developer-friendly

01:38:54.840 | set of tools from open AI that allows them to move away from having the quote best model

01:39:00.840 | to now having what feels like much more of a platform business that has more applications and

01:39:07.380 | more developers start to utilize open AI's toolkit and services a real ecosystem starts to develop

01:39:14.940 | and that creates a sustainable business mode rather than just the technical mode that open

01:39:19.680 | AI started with so I think the big point is that we're seeing the technical Gap narrow

01:39:25.680 | between the best and the average or the worst in the median in model development

01:39:30.780 | we're also now seeing that the evolution for a lot of these businesses is through open AI trying to

01:39:37.260 | you know applications on top of a platform and build a business mode and so there's a real shift

01:39:42.540 | underway but net net I think what the market's forcing everyone to do is really compete and build

01:39:46.980 | these incredible capabilities that are really going to launch a number of new business models

01:39:50.820 | new innovations I think the question is are we building apps for the iOS app store are we building

01:39:56.280 | web pages for the open internet and I think open AI's hope is that it's apps for the app

01:40:02.160 | store because it's proprietary and they own it they could take a share I think the reality is it's going to end

01:40:07.140 | up as the open web and again I think it's mostly because everybody else just can't afford to let one

01:40:15.300 | company run away with it and so you know whether it's llama or Mistral or even grok when Elon open

01:40:21.060 | source is it it's going to allow people to have access to these tools basically for free

01:40:28.320 | the problem that I think it creates is you know we had a you know when I first came to the United

01:40:35.700 | States my the

01:40:37.020 | the company that I worked at AOL they were the ones that believed in a fundamentally closed

01:40:42.840 | internet right and you had this service and you went into the walled Garden of AOL and then the

01:40:48.900 | pendulum swung over the last 20 years and we opened it up at Facebook and at other places and now we

01:40:53.880 | have this fundamentally open architecture the problem now is these models will not get better

01:40:58.500 | unless you have fine tuning that happens by yourself or these reinforcement learning loops

01:41:04.440 | that come from data that you control

01:41:06.900 | and you can see it with grog zero part of what makes grok really successful is that

01:41:13.080 | Elon and only Elon can give access to the x fire hose to grok now that's a ginormous

01:41:20.760 | repository of proprietary data that they're going to be able to train on so then the question is

01:41:25.560 | well obviously then Facebook will want to train their models on Instagram and their models on

01:41:30.180 | WhatsApp Google will want to train Gemini on Gmail none of those companies will want to make that

01:41:36.780 | available to any other model and so the unfortunate byproduct of a more of foundational

01:41:44.160 | models that are more pervasive is going to be that the internet gets a little bit more closed

01:41:48.600 | in the short term and we're going to have to really figure out what the implications of that

01:41:52.920 | are so I think what that means economically is there's just going to be a lot more small

01:41:58.800 | companies and a lot fewer of these ginormous outcomes and that's on balance probably better for

01:42:05.160 | you know innovation

01:42:06.660 | in the economy probably yeah data is the advantage not the model itself you have to you have to own

01:42:12.720 | some data asset that is unique so that you can train these models and then you have to close

01:42:18.360 | it off so nobody else can have access to it and that has to be an explicit business decision

01:42:22.620 | because it would be foolish for you to not do that did you take anything away from this week's

01:42:29.280 | announcements with kaifu Elon and openai's developer day grok is interesting as an AI

01:42:34.200 | because it has a sense of humor

01:42:36.540 | um that's what's kind of interesting about the user experience is it tries to be funny it has

01:42:40.560 | a sense of irony it's also willing to be more politically incorrect and I think one of the

01:42:46.080 | concerns about chat GPT early on was that it was programmed to be woke and that it wasn't giving

01:42:51.660 | people you know truthful answers about a lot of things that the censorship was being built in to

01:42:56.940 | the to the answers and there was a lot of examples very early on where it seemed like there was some

01:43:01.260 | sort of trust and safety layer that had been built on top of the AI and sometimes it would intervene

01:43:06.420 | and not give you the true answer that came from the AI would give you kind of some made up boiler

01:43:11.580 | plate and so having something like rock around will at a minimum keep open AI honest and keep

01:43:19.140 | you know keep chat GPT honest because if it's willing to give you truthful answers about things

01:43:24.540 | that you compare to the chat GPT answer then we're going to know when these like so-called trust and

01:43:29.580 | safety interventions are are happening so I think that's kind of interesting separately

01:43:36.300 | the open AI developer day shows that that company if you want to call it that I don't know if it's a

01:43:42.120 | company or Foundation or what but it's a complicated legal entity uh I mean those are details yeah

01:43:49.680 | those are details um I mean they are really um trucking along at full speed I mean it is pretty

01:43:56.640 | impressive what they're shipping yeah and even if the underlying language models get somewhat

01:44:06.180 | seem like they're building a very robust developer ecosystem so you could analogize

01:44:10.920 | it to something like stripe where credit card payments are pretty much a commodity but everyone

01:44:16.020 | uses a stripe because their dev tools are so good and then they're able to get to a bunch of scale

01:44:21.300 | network effects because again their developer platform is so good so I do think that that's

01:44:26.280 | the advantage of open AI may not be the model itself although I think I think their model is

01:44:31.080 | actually pretty good but it's is it that much better than llama 2 probably not but the developer platform

01:44:36.060 | is getting really good by the way that's a really interesting analogy because if you play that out

01:44:40.620 | and you say is AI like payments well what does the payments landscape look like in terms of companies

01:44:47.400 | that have real Enterprise value there are I guess three or four big ones and then there's a bunch of

01:44:53.220 | long tail ones in specific geographies because there are these random rules in a country and you

01:44:58.800 | build something to be very specific to it and you have value in that market or in that use case and

01:45:05.940 | uh maybe there's an analogy there and how this market develops in that sense there's four or five

01:45:10.020 | big foundational models and then there's a bunch of small vertical use applications that you use

01:45:13.800 | depending on what the task is well the time and the cost to build new foundational model seems to

01:45:17.940 | be shrinking had a pretty fast clip so and by the way all of this happened on H100s yeah

01:45:24.480 | and a bunch of these happened on a100 so we're still one generation of silicon behind so to your

01:45:31.080 | point this thing is going to be like people will be training models in weeks yeah so let's go ahead

01:45:35.820 | and track all the world's models and have a federal regulatory body overseeing all of this

01:45:41.520 | well I'm I have a guy from the UK on an H1B so I'm still filling out the TPS report because he

01:45:47.580 | I told him don't touch the model and he did yeah yeah definitely following high level from my

01:45:55.980 | perspective I I think it's it's great especially with what you mentioned about kaifuli it just

01:45:59.820 | confirms what we've thought what we've thought which is that America is definitely leading in

01:46:03.000 | this and I think that it's just important to to note

01:46:05.700 | that they're leading be really because of the private sector and the fact that the private

01:46:08.580 | sector has been allowed to do what they do and as we start to think about the regulatory frameworks

01:46:12.720 | I mean you could think of a open AI as a as a company or a foundation or even as a nation state

01:46:17.520 | with with kind of the amount of power that these things will have the ability to to harness once

01:46:21.960 | they're they're fully scaled and I I just think it's it's it's going to be very interesting to

01:46:26.400 | see I think the more uh competitive competition you have here I think the better uh it will be

01:46:31.080 | very very good but I do think you want the most powerful um models the

01:46:35.580 | most powerful platforms to be in the hands of people who are going to try to apply it for all

01:46:40.380 | the right uh all the right things for society so I think that there's a lot of positive applications

01:46:44.880 | there's a lot of negative applications that can come from this and my hope is that the

01:46:48.660 | regulatory frameworks that are developed won't stifle Innovation at the expense of allowing

01:46:53.640 | others to get ahead of us who will probably use them in in ways that we would not want to see

01:46:58.140 | them used right can I fly a couple of features that open AI announced that I think are interesting

01:47:02.280 | yeah yeah as long as you don't repeat what I said because you weren't paying attention

01:47:05.460 | but yeah no go for it well did you mention the well if I got this wrong with delete it but did

01:47:09.780 | you mention the 128k context window no I did not I did not no good job it's kind of a big deal

01:47:16.440 | what that means is you can have a prompt that has 300 pages of text in it yes I'll tell you

01:47:23.280 | like several months ago I was trying to figure out like is there a way where I could just put

01:47:27.360 | all of my blog posts in a prompt for chat GPT and have it turn into a book for example and I

01:47:35.340 | was kind of like a problem I just started working on it was actually very complicated to try and

01:47:39.060 | solve that yeah also like also vector DBs were a totally useless intermediate like that abstraction

01:47:44.880 | didn't need to exist that's all gone now too they're doing those guys are firing on all

01:47:48.720 | cylinders it's really it's really impressive to see yeah the other thing is multimodal I

01:47:53.640 | mean so they're really stressing the idea of combining text with

01:47:58.800 | photos I guess videos will eventually come later um text-to-speech but again having

01:48:05.220 | multiple kinds of inputs and outputs for the AI I think yeah and proprietary where you can plug in

01:48:11.340 | your own proprietary data sources I mean it's just a game changer for a lot of Enterprise customers I

01:48:16.080 | think those developers are going to go nuts I heard a lot of positive feedback from developer

01:48:20.040 | folks I know who attended and sounds like it was very positively received

01:48:24.480 | okay well this has been great Jared thank you so much for joining us today it was really great

01:48:29.520 | to spend time together this is the point in the show where you tell David Sachs that you love him

01:48:33.360 | and uh

01:48:35.100 | he says right back at you guys I want to say sticking 153 episodes but finally there's a

01:48:41.700 | person that I can say I'm now the second best looking guy on this pod so Jared thank you for

01:48:46.440 | coming on oh you guys are the best I'm gonna come back more often than if you'll have me I

01:48:52.980 | get treated better here than I do in my home so it's good so so do we that's yeah yeah together

01:48:59.760 | but thank you guys for having me on and and really thank you for all the different um you know

01:49:04.020 | important conversations you have and again I've met a lot of people who listen to you guys over

01:49:07.980 | the time and uh they all find that you guys give them a lot of good input into a lot of the issues

01:49:12.600 | that are impacting our daily lives so thank you for the opportunity to be with you thanks man thanks

01:49:17.100 | for being here thanks for being here thank you very much we'll let your winners ride

01:49:21.960 | brain man David Sachs

01:49:24.960 | and it said we open source it to the fans and they've just gone crazy with it love you guys

01:49:32.520 | I'm queen of kinwah

01:49:33.900 | we should all just get a room and just have one big huge orgy because they're all just useless it's

01:49:55.260 | like this like sexual tension but we just need to release that now what you're about B what your B

01:50:02.760 | we need to get merch

01:50:05.580 | I'm doing all in

01:50:07.620 | I'm doing all in

01:50:15.660 | you

E153: In conversation with Jared Kushner: Israel-Hamas War, paths forward, macro picture, AI

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