E123: Trump indictment, de-dollarization, should VCs back Chinese AI? RIP Bob Lee

00:00:00.000 | I can't see what's on your hat. What does it say? Super gut?

00:00:02.400 | One of my most exciting companies called Oh, hollow. Oh,

00:00:05.800 | Mahalo. I still have Mahalo calm. No, not Mahalo. unrelated,

00:00:09.000 | completely unrelated. Nothing whatsoever to do with Mahalo. I

00:00:11.960 | remember Mahalo great product. Sorry, didn't

00:00:14.880 | become like up against, you know, we were making $10 million

00:00:19.040 | in revenue at the peak. Yeah, and 100 people writing, like

00:00:23.560 | human curated search result pages.

00:00:25.400 | I remember that. Look at Chad, she's doing so well. You're a

00:00:28.560 | great guy to reference the chat GPT thing coming out of that.

00:00:32.120 | Well, then what happened was they did the Panda update and we

00:00:34.800 | went from 10 million down to 500,000 in revenue overnight.

00:00:39.400 | What was the Panda update?

00:00:40.640 | They looked at who the top sites were. He how hollow, etc. And

00:00:46.880 | they just said nobody can get any more than this amount of

00:00:49.440 | traffic. And they literally throttled the number of unique

00:00:52.320 | users they would send to you. And that was it game over. And

00:00:57.880 | then everybody I knew at Google wouldn't return my emails. And

00:01:00.440 | they were like, we don't have partnerships with anybody. That's

00:01:03.920 | what Matt cuts told me.

00:01:04.720 | Are you saying that Mahalo is lack of success had nothing to

00:01:07.920 | do with the poor product execution. It was Google's

00:01:11.240 | malfeasance.

00:01:12.080 | It got really rave reviews. It was backed by Sequoia.

00:01:14.480 | The movie, but it's

00:01:16.040 | you know, when you build a company that gets to 10 million

00:01:19.040 | in revenue in 18 months, you can talk to him off. But basically

00:01:22.400 | looking at your resume here, I see that you've created nothing

00:01:24.800 | in your entire career.

00:01:27.400 | When you get in the arena, the arena, and you actually build a

00:01:31.200 | product, then you can talk to me. I had the number one blog in

00:01:34.280 | the world, one of the top five tech magazines in the world. And

00:01:36.960 | this is the number one tech and business podcast.

00:01:38.880 | I touched a soft spot. I got to the warm underbelly there.

00:01:42.760 | Jake out so rarely goes after Chamath when he does. It's just

00:01:46.200 | gold. It's like, it's incredible.

00:01:48.000 | You're talking to three founders here, Chamath. You're the odd

00:01:51.280 | person out. So when you want to talk about product, then make

00:01:54.120 | one. Okay, so gross.

00:01:55.920 | And yet I'm the richest. It's so tilting. It must tilt you

00:01:59.040 | totally fine. So Kim Jong Un, so Putin. Okay, there's a lot of

00:02:02.920 | rich people in the world. But these are three product. Okay,

00:02:06.080 | dictator. There's your cold open. Let's go.

00:02:09.640 | Rain Man David.

00:02:15.040 | Love you.

00:02:23.120 | We

00:02:23.560 | All right, let's get started. Everybody. It's been a big week.

00:02:28.720 | There's a lot to talk about might be a little bit of a

00:02:30.960 | controversial spicy agenda today here on the all in podcast with

00:02:36.080 | me again. The Sultan of science, who is tearing up the YouTube

00:02:40.560 | comments, everybody asking the Sultan of silence to contribute

00:02:44.520 | more and to speak more. But when he does speak, my lord, he

00:02:47.160 | drops those knowledge bombs. How you doing Sultan of science?

00:02:49.720 | I'm hanging in there.

00:02:51.240 | You're hanging in there. Okay, well,

00:02:52.720 | I'm hanging in there.

00:02:53.960 | Man, a few words, I guess hanging in there. Okay, great.

00:02:56.680 | With us again, of course, another Android David Sachs.

00:03:00.640 | Sachs, how are you doing?

00:03:02.120 | I am doing fine. How are you? Let me ask GPT. What's the

00:03:07.040 | question?

00:03:07.440 | How are you doing?

00:03:09.400 | Let me ask you to hold on. Let me see what it says.

00:03:11.440 | I mean, basically, chat GPT for is the ultimate Asperger's

00:03:15.480 | equalizer. You guys are going to benefit most from this.

00:03:18.280 | I asked it. How are you? It says as an AI language model, I

00:03:21.440 | don't have feelings or consciousness. So I don't

00:03:23.160 | experience emotions, or states of being like a human does.

00:03:26.240 | However, I'm here and ready to help you with any questions or

00:03:29.240 | topics you'd like to discuss. How can I assist you today?

00:03:32.200 | That's pretty similar to how you feel, except you don't offer to

00:03:35.560 | help anybody. Okay. Also, with us is the dictator himself.

00:03:39.480 | Here to talk about topics.

00:03:40.800 | Looking forward to today's episode. And with us the

00:03:43.400 | dictator with a shockingly, shockingly low cut.

00:03:47.960 | There's only one button on the shirt.

00:03:49.640 | Only one button. Okay, made from a tiny baby like right here.

00:03:54.520 | They were like, should we put buttons in there? Like,

00:03:56.600 | wipe the buttons, wipe the button conservation movement.

00:04:01.360 | Exactly. No, no, no, no, the one button is what counts. That is a

00:04:04.480 | baby albino rhinoceros that was killed, fed to Chamath on his

00:04:09.080 | vacation and then attached to his linen shirt. I guess let's

00:04:13.080 | just get this out of the way. Trump was a rain, I guess is the

00:04:16.960 | term he was charged in New York with 34 felony counts of

00:04:21.040 | falsifying business records. Alvin Bragg alleged Trump

00:04:24.440 | orchestrated a catch and kill scheme as well to suppress

00:04:27.360 | damaging information before the 2016 election. Of course, Trump

00:04:31.800 | pleaded not guilty and did a feisty press conference or

00:04:36.480 | speech rally at Mar-a-Lago after that prosecutors say the scheme

00:04:40.240 | involved falsifying business records to conceal payments to

00:04:42.640 | stormy Daniels. We know all that. Same thing Michael Cohen

00:04:45.640 | went to jail for the indictment wasn't a speaking indictment,

00:04:48.880 | where it explained all the details. So Alvin Bragg hasn't

00:04:52.800 | tipped his cards by explaining in detail what the legal

00:04:55.240 | theories are, and which information he has. And he was

00:04:57.600 | pretty clear about that, that he was not going to tip his cards,

00:05:00.040 | which makes us even more hard to understand what's going on and

00:05:04.600 | creates even more divisiveness. Predictably, the right is

00:05:07.880 | framing this as a witch hunt. But surprisingly, many on the

00:05:10.640 | left, including former SDNY head, Preet Bharara of the

00:05:14.200 | amazing podcast, stay tuned with Preet, which I love. He felt

00:05:18.280 | this was the weakest of the four major investigations that Trump

00:05:21.080 | is under and he expressed some concerns on his podcast that it

00:05:24.880 | was light and not detailed. And he might have not actually

00:05:29.480 | pursued this unless he had a 99% or something like that chance

00:05:33.840 | because it is the President's sacks, I guess everybody's

00:05:37.080 | expecting us to fight over this, but to just be a little

00:05:38.960 | preemptive here. As much as I think Trump is like the most

00:05:43.520 | unethical person to ever hold the office, this does seem a

00:05:46.840 | little light. And I'm hoping Bragg has the goods on him

00:05:51.920 | because why bring a Mr. Meener case? You know, and these are

00:05:55.760 | all I guess, Mr. Meener's that are being elevated to felonies

00:05:59.240 | because of tax evasion, possibly or election interference. So

00:06:03.000 | what are you a steel man, or just generally speak about the

00:06:07.360 | case here? Because I know that you're a man of law and order.

00:06:10.680 | Well, many people on the left are criticizing this case.

00:06:14.120 | Jonathan Chait, who's a liberal writer for the New York

00:06:17.800 | magazine, wrote a good column about it. And look, here are the

00:06:20.520 | reasons why. Number one, the underlying behavior here is that

00:06:24.160 | Trump engaged in a private settlement with Stormy Daniels.

00:06:28.280 | That's not illegal, even if it is, you know, so called hush

00:06:31.000 | money, that is legal, you're allowed to do that. Number two,

00:06:35.480 | is that he used personal funds to do it. He did not use

00:06:40.280 | campaign funds. And this is why Alvin Bragg has had to make this

00:06:43.800 | kind of distorted, ridiculous claim that he should have used

00:06:47.000 | campaign funds to do it. But does anyone believe that if

00:06:51.400 | Trump had used campaign funds, that wouldn't be alleged as the

00:06:55.520 | crime? So he's kind of damned if he does damned if he doesn't

00:06:58.800 | here, I think that you know, what the law is trying to do

00:07:01.040 | with these rules around campaign funds is protect donors from

00:07:04.440 | candidates misappropriating them. And Trump had every right

00:07:07.760 | to use personal funds to engage in the settlement. It's a major

00:07:10.240 | distortion of campaign finance rules. Third, these campaign

00:07:14.640 | finance rules are federal laws. They're not state laws. So it's

00:07:18.120 | not up to Alvin Bragg to enforce them. And in fact, the feds

00:07:22.240 | looked at this and decided not to prosecute it. Because if they

00:07:26.520 | did, they'd have to enforce similar laws against Hillary

00:07:29.440 | Clinton recall that Hillary Clinton had a problem where she

00:07:33.880 | used campaign funds to fund the payment to Christopher Steele

00:07:37.920 | to write the Steele dossier. And that was a real problem. And it

00:07:41.280 | was miscategorized as legal fees. And she had to pay a fine

00:07:44.880 | for that. But no one talked about locking her up over it. And

00:07:47.120 | no one was talking about, you know, indicting her and sending

00:07:49.840 | her to jail. And so part of the reason why I think the feds

00:07:53.080 | didn't want to look at this is because they'd have to look at

00:07:55.520 | similar cases that are even more egregious. And then finally, the

00:07:58.840 | last thing is that we're well past the statute of limitations

00:08:01.680 | on this whole matter. So Alvin Bragg is really out here on a

00:08:06.000 | limb, he's passed the statute of limitations, he's enforcing laws

00:08:09.480 | are not his business to enforce their distorted interpretations

00:08:13.040 | of those laws, and the underlying conduct here is fully

00:08:15.760 | legal. So I think everybody is kind of like wondering why he's

00:08:19.960 | doing this. And I think there's two theories either Alvin Bragg

00:08:22.480 | is incredibly stupid, which is not or is incredibly smart. And

00:08:25.960 | the the sort of three dimensional chess explanation

00:08:28.480 | that Ann Coulter has is that this is all a giant honeypot for

00:08:32.480 | Republicans, because they're all rallying around Trump here,

00:08:35.680 | because they perceive I think correctly that he's being

00:08:38.280 | railroaded and he's being he is the victim of a political

00:08:41.040 | prosecution. But in rallying around him to defend him, you

00:08:44.200 | see that Trump's poll ratings among Republicans in the

00:08:46.560 | primary are going through the roof, dissenters are going down.

00:08:49.320 | And so what Ann Coulter fears is that this is all an elaborate

00:08:53.600 | ruse to make Trump the nominee. Because Biden would much rather

00:08:58.440 | face a reelection against Trump than against a young, youthful,

00:09:02.480 | vigorous governor like a dissenters.

00:09:04.560 | Do you think Bragg has a bunch of more information and maybe

00:09:07.640 | that tax evasion is the issue he'll go after because that

00:09:10.600 | seems to be the other theory here is he's not going to do the

00:09:14.120 | federal, you know, election stuff. He's going to go after

00:09:17.760 | the tax evasion, which is what they already got the Trump

00:09:20.080 | organization on when why so I guess the CFO is going to jail

00:09:22.960 | for six months, it'd be hard to connect. And they did 1.6

00:09:25.320 | million fine for that company.

00:09:26.760 | These are misdemeanor crimes. And to convert them to a felony,

00:09:31.360 | the crime needs to have been done in the process of aiding

00:09:35.400 | and abetting another crime. And right tax evasion is the concept

00:09:39.640 | here. Come on, when he listed the bullet point list of all of

00:09:43.360 | the reasons that are all of his evidence. It seemed to point to

00:09:47.960 | what David said, which is just these campaign finance

00:09:50.200 | violations. Yeah, this whole thing just seems like such an

00:09:53.880 | enormous waste of time. Just think about the amount of money

00:09:58.640 | that will have to be spent on just securing New York City,

00:10:04.200 | every time he shows up the five car motorcades, the Secret

00:10:10.000 | Service, the police, the this that the disruption to people

00:10:13.960 | for what really ultimately I think is right is kind of like,

00:10:17.000 | you know, it's a bit of like, man, this case should have been

00:10:20.000 | brought years ago.

00:10:21.040 | Well, not at all in relation to that, they were told to stand

00:10:24.680 | down from doing that because of the, you can't indict a sitting

00:10:27.920 | president. And that's paused. So that's another legal theory

00:10:31.160 | that's going to have to be tested.

00:10:32.240 | Jason, the feds looked at this years ago, and they decided not

00:10:34.600 | to press charges.

00:10:35.720 | They were told to not do it because he was a sitting

00:10:37.920 | president. No, they were.

00:10:39.200 | No, he's been out of office now for a couple of years. Why

00:10:41.640 | didn't they move forward?

00:10:42.520 | They were, that was the process they were doing. So that takes

00:10:46.520 | two years. The previous DA said he was told to stand down,

00:10:51.360 | because

00:10:52.160 | Cyrus Vance decided not to prosecute on the same underlying

00:10:55.760 | offenses. That was his decision. He decided not to. Who told him

00:10:59.840 | to stand down? No one can tell him to stand down.

00:11:01.600 | Yeah, the office of...

00:11:02.920 | Cyrus Vance decided not to move forward with this very same

00:11:06.400 | case, when the statute of limitations had not expired. Now

00:11:09.440 | it has, and Alvin Bragg's moved forward.

00:11:11.600 | Yeah, that's...

00:11:12.240 | I mean, you really have to stretch here to come up with any

00:11:15.400 | kind of plausibility to this case. And I mean, you have to

00:11:19.720 | wonder why he's doing it. Is it just naked partisanship? Or are

00:11:24.040 | they trying to make Trump the Republican nominee?

00:11:26.720 | Well, here's what Vance said on Meet the Press this weekend. I

00:11:29.400 | was asked by the US Attorney's Office in the Southern District

00:11:32.440 | to stand down on the investigation. And they were

00:11:35.200 | asked to stand down as well, because of the, you can't

00:11:37.920 | indict a sitting president. So anyway, all this stuff's going

00:11:40.120 | to get done in the wash. I don't think we have to spend too much

00:11:42.800 | time on it, because we'll find out, I think, in the coming

00:11:46.040 | weeks.

00:11:46.360 | Do the Democrats actually want him to get convicted? Then what?

00:11:50.800 | He's going to be under house arrest in Mar-a-Lago, because

00:11:53.240 | he's not going to be sent to jail. And then what then

00:11:55.320 | DeSantis actually will win the nomination. So what exactly is

00:11:58.200 | the perfect outcome, which is to create this theater, waste

00:12:02.400 | taxpayer resources only to have Trump acquitted, just so that he

00:12:06.320 | can win the nomination, and then he can go against Biden and

00:12:08.760 | lose? This seems so farfetched and idiotic. Move on. Close this

00:12:13.640 | chapter and move on.

00:12:15.120 | Totally. This is ripping the country apart for no reason. And

00:12:18.040 | such a stupid case. Such a stupid case. Even the people who

00:12:21.240 | would like to prosecute Trump, like you, Jason, I think have a

00:12:24.400 | problem with it. And one of the reasons why this is going to be

00:12:27.120 | counterproductive, even to the anti-Trump forces, is that by

00:12:31.840 | going first with this case, Alvin Bragg is poisoning the

00:12:35.560 | well for any future case he might bring against Trump,

00:12:37.840 | because now all future cases against Trump are going to be

00:12:41.040 | seen as painted with the same brush, which is a nakedly

00:12:44.720 | partisan sort of witch hunt. And there may be other cases out

00:12:48.520 | there that have more validity to them. But they're all going to

00:12:51.440 | be seen as of a piece with this sort of Alvin Bragg.

00:12:55.280 | Yeah, that was Preet's position. I think it's a logical one. I

00:12:58.720 | don't disagree. What do you think of the other three cases,

00:13:01.080 | January 6, the interference in Georgia, where they recorded

00:13:04.480 | them on tape, and then the stolen documents and the

00:13:06.520 | obstruction of justice? Or do you think all four cases are

00:13:10.080 | politically motivated, and none of them have any validity to

00:13:12.520 | them, Sax?

00:13:13.040 | I mean, look, the question you have to ask is if Donald Trump

00:13:15.600 | was a private citizen who never ran for president, would he be

00:13:18.360 | the target of any of these prosecutions? I mean, he was,

00:13:21.680 | you know, a high profile business figure for decades, and

00:13:24.480 | he wasn't prosecuted like this. And so that's really the

00:13:27.080 | question you have to ask.

00:13:28.320 | And do we want to go to jail? Cohen did go to jail for the

00:13:32.320 | same crime. So the answer is yes.

00:13:34.080 | What Michael Cohen wasn't prosecuted till after Trump was

00:13:36.680 | president.

00:13:37.120 | But I'm saying is you asked if, if he was not, he would let me

00:13:42.520 | finish. You asked if if Trump was not a president, if he would

00:13:46.560 | have been prosecuted for this crime. In fact, another person,

00:13:49.160 | Michael Cohen was prosecuted for this crime and did serve jail

00:13:51.200 | time. So the answer is yes, he would have been. And they've

00:13:53.760 | and they brought these cases, this banking kind of cases, and

00:13:56.360 | they brought the other one for the 1.6 million fine and weasel

00:14:00.000 | were going to jail. So I think they would actually, but anyway,

00:14:02.400 | I don't

00:14:03.200 | do you think all four are politically motivated is my

00:14:07.360 | question to you? Or you think any of them have?

00:14:09.800 | Look, I can't I don't want to comment on the other cases until

00:14:12.280 | I see what cases actually made and what the merits of them are.

00:14:15.640 | However, I don't believe that all these prosecutors all over

00:14:18.560 | the country be looking at Donald Trump this way, if he was just a

00:14:21.120 | private citizen who never ran for office. And I think we have

00:14:23.640 | a big problem in our political system. When political

00:14:27.480 | disagreements are criminalized, and this has been a nasty trend

00:14:30.720 | that's been going on for many years. It was usually, I guess,

00:14:34.880 | practice against staffers, you know, here or there, you'd have

00:14:38.320 | some, you'd have some executive branch staffer would, you know,

00:14:42.040 | find themselves on the wrong end of a prosecution that ended up

00:14:44.720 | going to jail, maybe they get pardoned or not. But now it's

00:14:47.640 | reached all the way to the top. And we have presidential

00:14:50.560 | candidates basically being prosecuted. And I do not believe

00:14:53.840 | they'd be prosecuted if they were not major political

00:14:56.080 | figures. And it looks really bad for the political figure who is

00:15:01.320 | leading it right now in the Republican Party to be Joe

00:15:04.480 | Biden's opponent in the next election, to be prosecuted by

00:15:08.240 | one of Joe Biden's political allies. I mean, if this were

00:15:10.800 | happening in some other country, the United States would be

00:15:13.400 | criticizing it as some sort of, you know, banana republic type

00:15:17.000 | move. So this is not the direction we want our politics

00:15:20.160 | to go. And look, I don't I don't want to disagree Trump to be the

00:15:24.000 | nominee, I support a different candidate. But I think that to

00:15:27.880 | be interfering in our elections for Alvin Brackley, interfering

00:15:33.520 | in the political process this way, is a reach, and it's

00:15:37.800 | setting a horrible precedent for the future. I mean, we're

00:15:40.600 | talking about major presidential candidates being

00:15:42.760 | prosecuted question then, by local DAs. I mean, why would we

00:15:46.200 | want this?

00:15:46.880 | So let me ask a follow up question, then do you the DOJ is

00:15:50.040 | currently investigating Hunter Biden? And then obviously, that

00:15:52.720 | goes up to the big guy with the 10% Do you think the DOJ should

00:15:55.720 | be investigating Hunter Biden? Or do you think we should be

00:15:57.960 | giving a pass to presidential presidents and their families?

00:16:01.720 | Well, the Hunter Biden case, I mean, this is one where you've

00:16:06.320 | got foreign governments basically paying off Hunter

00:16:08.680 | Biden for political access. Now, that may ultimately be legal,

00:16:14.000 | because I think influence peddling is kind of a business

00:16:17.320 | that takes place all over Washington. But that actually

00:16:21.280 | does speak to the integrity of our political system. At the end

00:16:25.000 | of the day, would I send a hundred by into jail? No, I

00:16:27.400 | don't think so. Like I said, I don't like criminalizing

00:16:29.800 | political disagreements. But what Hunter Biden did was

00:16:32.720 | definitely pretty shady. And you know,

00:16:36.800 | Hunter Biden and Trump and his family are both shady is my

00:16:40.160 | feeling on it. We gotta get better candidates in here. Nikki

00:16:42.480 | Haley, your candidate Chamath raised $11 million last week.

00:16:45.040 | She's on fire. Freeberg, you want to jump into this and touch

00:16:48.640 | the third rail you want us to move on?

00:16:49.800 | Let's move on.

00:16:52.760 | All right. So there's been a lot of Twitter, back and forth about

00:16:57.680 | the D dollarization. And if it's real, if it's happening, if it's

00:17:01.360 | not last week, China and Brazil struck a deal to trade in their

00:17:05.240 | own currencies, the Brazilian government announced the two

00:17:08.720 | countries will no longer use the US dollar as an intermediary. I

00:17:11.880 | don't know if that's for everything they trade or for

00:17:14.160 | certain things they're trading. It'll be a straight one for

00:17:16.840 | Reyes trade. China is the top US rival, obviously, and Brazil is

00:17:21.440 | one of the largest economies in Latin America. What are your

00:17:24.960 | thoughts? Generally speaking, free burger know that you have

00:17:27.440 | some exposure here, you know, with your company that I think

00:17:32.640 | you spacked recently, and you have some knowledge of the space,

00:17:35.760 | right? Well, I mean, China and Brazil are pretty sizable trade

00:17:39.440 | partners. I think it's around $150 billion a year of

00:17:44.040 | bilateral trade. So China historically has made a lot of

00:17:47.960 | investments through their companies in railways,

00:17:52.000 | infrastructure, waterways, ports, and infrastructure to

00:17:56.080 | support the agriculture manufacturing economies. In

00:18:01.640 | Brazil, and it's a very deep tie. Obviously, the closeness

00:18:05.400 | of that relationship, China became a bigger trading partner

00:18:08.400 | for Brazil in 2009, surpassing the US. By the way, China has

00:18:13.520 | had similar trading strategies in Africa, in Australia, they've

00:18:17.800 | bought several companies in Australia, they've made massive

00:18:20.640 | infrastructure investments, the currency of trade is one element

00:18:26.720 | of a broader intertwining that China has kind of enabled by

00:18:32.640 | using its resources to invest in infrastructure development and

00:18:35.840 | then participating in the economic value and gain that

00:18:38.480 | arises from that. It's still also supports the local country,

00:18:41.680 | the local population, the local economies in a meaningful way. I

00:18:46.280 | think it's worth noting that the anti globalization moment that

00:18:51.280 | we're having in the US and it may be a longer term trend

00:18:54.320 | doesn't mean that globalization and global trade is going to

00:18:58.080 | slow down between China and other really important well

00:19:01.680 | resourced nations around the world. So the Brazil China

00:19:04.840 | summit that happened a week ago, where a lot of Brazilian

00:19:09.120 | executives went to China and had a very deep set of dialogues,

00:19:14.760 | but they also signed a ton of agreements on trade. And also in

00:19:18.280 | some of those cases, the trade being done in non US dollar

00:19:21.520 | denominated currency is worth noting as being that if the US

00:19:26.440 | does continue to push for de globalization, we can only

00:19:31.440 | leverage our side of those relationships, China will

00:19:34.800 | continue to make investments continue to develop trade and

00:19:37.920 | continue to develop really deep tie ins with countries around

00:19:40.680 | the world. From a resource perspective from an economic

00:19:44.240 | perspective, and ultimately, the leverage will sit with them on

00:19:47.440 | what currency folks are going to trade in. So you know what we're

00:19:50.640 | seeing with the China Saudi discussion around the Petro

00:19:53.200 | yuan, which doesn't seem to be really a standard thing yet. But

00:19:57.400 | we're starting to see inklings of some deals happening in you

00:20:00.360 | want, but it's more related to the depth of the Chinese trade

00:20:02.840 | relationship with all these nations around the world. So the

00:20:06.960 | more we kind of as the US think we want to de globalize and

00:20:11.280 | reduce our trade relationships with other nations, the more you

00:20:14.480 | know, we're out of the way and allowing China to do that. I

00:20:16.600 | think it's worth observing that the Chinese economy will grow

00:20:19.720 | the depth of their relationships will grow, potentially, the

00:20:22.520 | strength and importance of their currency will continue to mount

00:20:25.600 | as they build these really deep infrastructure and investment

00:20:28.400 | tie ins around the world.

00:20:29.640 | Chamath, what does a party trading in one do with the one

00:20:33.160 | did they buy a bunch of stuff from China? What happens to the

00:20:37.280 | one? Yeah,

00:20:37.920 | this whole thing is a huge nothing burger. This is the

00:20:40.520 | third deal that that China has done. The other two countries

00:20:43.280 | are Pakistan and Brazil. And the reason why is I've seen like

00:20:47.800 | people on Twitter now breathlessly rambling on about

00:20:51.720 | de dollarization and all of this stuff. And I think if any of

00:20:56.600 | these people would think from first principles, the first

00:20:58.920 | thing that you would know is that the yuan is pegged to the

00:21:02.360 | US dollar. And so as long as it's pegged, whether you trade

00:21:07.320 | through the US dollar, or you don't, and you directly go to

00:21:10.400 | you want your index to the US dollar, and then you use a

00:21:14.320 | dollar swap to convert it into the currency you need. So I

00:21:18.360 | don't know, I think this is kind of like a lot of folks who don't

00:21:21.320 | really know what's going on.

00:21:22.720 | What do you think about the, the depth of China's trade

00:21:25.720 | relationship? So forget about the denomination of the

00:21:27.840 | currency. But the fact that the statistic now is that you can't

00:21:32.320 | forget a top trading partner with 120 countries, you know,

00:21:36.160 | they surpassed the US with many of these countries over the last,

00:21:39.520 | you know, decade or two in particular, and continue to

00:21:43.040 | increase the scale relative to the US where we're kind of

00:21:46.040 | decreasing our dependence on on nations and reducing our

00:21:49.920 | trading.

00:21:50.280 | The reason why China has had so much dominance as a trading

00:21:54.760 | partner. And the reason why China's central bank has the

00:21:59.320 | largest amount of foreign US dollar reserves, about three and

00:22:02.520 | a half trillion dollars, is exactly because of the thing

00:22:05.520 | that you want to ignore in order to have this highfalutin

00:22:08.200 | intellectual conversation. It is pegged to the US dollar. And

00:22:13.080 | until it is unpegged in a free floating currency, we will never

00:22:16.400 | know what the real market clearing prices and just China

00:22:20.400 | has been able to hold on China has been very effectively able

00:22:23.720 | to manipulate this currency. Since they were brought into the

00:22:27.440 | WTO. In order to engender that trading partner status, they

00:22:32.160 | were able to artificially suppress the value of their

00:22:37.200 | currency, so that exports from China could gain traction in

00:22:42.560 | countries all around the world, you have to take into account

00:22:45.560 | this currency peg. And you have to ask the question, where would

00:22:49.840 | the currency be if it wasn't free floating? And then what

00:22:52.960 | would the incentives be for folks to replace the dollar? And

00:22:57.800 | I think that there's a lot of interesting questions that are

00:23:00.360 | worth asking. But I think you have to be a little bit more

00:23:02.400 | intellectually honest to have the discussion.

00:23:03.880 | And just for clarity, Chamath, you said they already have these

00:23:06.520 | deals with Pakistan and Pakistan, Russia, you met

00:23:10.400 | Pakistan and Russia, I think they already have those deals

00:23:12.480 | with those two Pakistan and Russia. Right? Okay, good. I

00:23:16.280 | just want to make sure it's clear there. Saks, do you have

00:23:18.720 | any thoughts on this? Is is this an example of people just maybe

00:23:22.360 | taking the Ray Dalio book and it fits a certain narrative and

00:23:26.280 | overhyping it? Or do you think this is an actual real trend in

00:23:29.080 | the world? To be concerned about?

00:23:31.600 | I think D dollar ization hasn't happened yet. But I think it's a

00:23:35.120 | risk. And I think there's a bunch of reasons why the risk is

00:23:38.600 | growing. So first of all, we have $32 trillion in debt,

00:23:43.680 | someone has to finance that debt. And the bigger that

00:23:46.960 | number gets, the more unattractive our debt is,

00:23:49.880 | because they have to be concerned that we're eventually

00:23:51.920 | going to monetize the debt, pay it back by printing a bunch of

00:23:54.320 | new dollars. So that's point number one is we have these

00:23:57.920 | massive deficits and debts. Number two is that we have, I

00:24:04.680 | think, in the last couple of years really weaponized the

00:24:07.080 | dollar. So if you look at like what we've done with Ukraine and

00:24:11.680 | Russia, we basically seized hundreds of billions of dollars

00:24:16.600 | of Russian reserves that were held in dollars, we've excluded

00:24:20.680 | them from the swift banking system, we've imposed massive

00:24:24.160 | sanctions on them. And in fact, we now have sanctions on a huge

00:24:28.240 | number of countries all over the world. So we're very sanction

00:24:31.120 | happy, all of which makes these countries view the dollar as an

00:24:36.640 | unreliable store of value, why would you store your money in

00:24:41.320 | something that can be taken away by the US, and specifically by

00:24:46.360 | the State Department. So I think this is a major change in the

00:24:50.480 | way that we view the dollar over the last couple of years is

00:24:52.480 | we're going to use it as a weapon that again, that makes

00:24:54.880 | it view that's not the first time we've ever done that,

00:24:58.160 | right. We've done sanctions against many different

00:25:00.080 | we've done sanctions. But as far as I know, we've never seized

00:25:02.960 | foreign currency reserves and excluded a country from SWIFT,

00:25:06.000 | which the banking system, so as as an instrument of US foreign

00:25:09.240 | policy. So I mean, I could be wrong about that. But this was a

00:25:13.080 | major event when it happened. Remember, we also did stuff like

00:25:15.960 | seize the the yachts and the the foreign holdings of Russian

00:25:20.400 | oligarchs member, their ill gotten gains, we suddenly

00:25:23.520 | decided they were all gotten, let me tell you, we didn't think

00:25:26.080 | they were ill gotten when those Russian billionaires were buying

00:25:29.160 | those yachts or buying New York real estate or London real

00:25:32.320 | estate or investing in Facebook or investing in companies here

00:25:36.640 | or buying sports teams or what have you. So we got hold on, we

00:25:41.960 | didn't think they were ill gotten at the time that they

00:25:43.800 | were actually made and spent. But we decided subsequently,

00:25:47.200 | we're just going to seize those things. Well, again, if you are

00:25:50.840 | a foreign country, or a wealthy person in a foreign country, or

00:25:55.000 | just trying to decide where you're going to keep your money,

00:25:57.840 | you may not want it to be liable to the vagaries of US foreign

00:26:01.280 | policy. So I think all these things do matter. And when

00:26:05.960 | you're running the kind of debt and deficits we have, and you're

00:26:08.840 | making the US dollar less attractive, you are running a

00:26:12.000 | risk. I mean,

00:26:13.200 | that's, we should be keeping people we have disagreements

00:26:15.760 | with on the dollar standard, because that's good in terms of

00:26:17.920 | power for us, which I think opens us up to a broader

00:26:21.760 | discussion.

00:26:22.200 | Okay, just to clarify this, it's not even the dollar standard,

00:26:25.480 | right? Like what this deal was, is to use this thing called

00:26:28.480 | SIPs. And SIPs is the non dollar competitor to SWIFT. And so you

00:26:35.520 | settle right across, let's just say you have two trading

00:26:39.280 | partners in two completely different countries that use a

00:26:42.800 | bank in each of their local areas. They typically swap the

00:26:46.480 | dollars and then they transfer right using this this backbone

00:26:50.200 | of the financial infrastructure called SWIFT. China has built a

00:26:54.720 | competitor to it called SIPs, CIPs. And China has been going

00:26:58.480 | around and signing folks up makes a ton of sense, right? Hey,

00:27:01.960 | listen, if we're trading between each other, let's just use that.

00:27:04.760 | So I think it's important to not paint this with more of a brush

00:27:08.600 | than it should be. I'm not saying that de dollarization

00:27:11.120 | couldn't happen. I just think that everybody tries to take one

00:27:14.920 | random data point and conflate it all together to reinforce a

00:27:18.080 | Ray Dalio point from book three years ago,

00:27:19.720 | I do think there's a group of catastrophists who maybe are

00:27:22.960 | maybe hoping this happens, or it's great Twitter fodder.

00:27:26.040 | I think we are headed for some sort of government debt crisis.

00:27:28.880 | I said that there's gonna be three prongs to this financial

00:27:30.960 | crisis. One was these long dated bonds having unrealized losses,

00:27:35.560 | which is causing problems in regional community banks. The

00:27:39.160 | second piece of it's the commercial real estate crisis,

00:27:42.600 | which I think is metastasizing right now, which is also going

00:27:45.800 | to be a banking crisis once all those unrealized losses come due.

00:27:49.800 | And the third piece of it is government debt crisis, we have

00:27:52.920 | this $32 trillion debt that we're now having to refinance at

00:27:56.640 | much higher interest rates. I've read somewhere that half our

00:27:59.720 | government debt to 16 billion is going to come due 16 sorry,

00:28:04.320 | trillion Yeah. And it's gonna have to be refinanced in the

00:28:07.560 | next three years, the average rate on that debt is 1.7%. Well,

00:28:13.000 | if you want to refinance it at 10 year rates, you're going to be

00:28:16.320 | looking at somewhere between three and a half, 4%, maybe more.

00:28:19.360 | So you're looking at a doubling of the interest costs. And I

00:28:22.920 | also read that by 2030, we're going to have over a trillion

00:28:26.320 | dollars of interest expense owed by the US government every year.

00:28:30.520 | That is money that's not funding anyone. So security is not

00:28:33.320 | funding anyone's health care. It's not funding one weapons

00:28:36.280 | program. It's not funny. We want it's this the VIG it's gonna be

00:28:39.880 | more than a quarter of our total federal budget.

00:28:42.680 | Yeah. And this is where you start gambling. When you're

00:28:44.640 | chasing that VIG payment, you start taking risks. This is also

00:28:47.480 | where you have to expect the Fed will really want inflation to

00:28:50.760 | stay high. That's sort of what we've said before. The only way

00:28:53.160 | out of this mathematically is to keep rates high. But the other

00:28:56.200 | thing, David, that you when you mentioned all of this is, what

00:28:58.880 | about every other country? If you think that's happening in

00:29:01.800 | the United States, I think it's important to make sure we at

00:29:05.320 | least consider every other major economy because it's not as if

00:29:08.240 | they're pristinely sitting on the sidelines. While this

00:29:10.800 | happens to the US. This is my whole argument the whole time,

00:29:13.840 | which is if you're going to have this argument, you need to do it

00:29:17.080 | thoughtfully and relatively, right, because the euro is in

00:29:20.760 | the same amount of trouble. If you look across, it's not as if

00:29:24.280 | China is actually sitting pretty and smelling like roses, either.

00:29:28.320 | Every major economy or trading block in the world is going to

00:29:31.640 | go through this at the same time. So it becomes a relative

00:29:34.360 | trade argument. And there, I just don't know enough to know

00:29:36.640 | whether the US is poorly positioned versus Europe or

00:29:40.200 | China. But it just seems like you get back to a place where

00:29:43.560 | it's like, okay, we need to find the flight to safety. What is

00:29:46.520 | the canonical flight to safety? If it's not a commodity like

00:29:49.680 | gold, it's probably the dollar until it's not.

00:29:52.080 | Yeah, okay, freeberg. Obviously, other countries have even more

00:29:56.520 | acute problems, higher debt to GB GDP, which means higher debt

00:30:00.080 | payments. Just rounding third here on this issue. Any final

00:30:04.000 | thoughts on de dollar ization and servicing our debt?

00:30:08.360 | Look, it's we're in trouble. And it's, it's unclear the timing

00:30:14.880 | and the path. But the arithmetic is pretty simple. In addition to

00:30:19.440 | the point sacks made, you guys saw the news, the city of

00:30:22.480 | Chicago has a $44 billion pension hole. That's just the

00:30:27.120 | tip of the iceberg on unfunded pension liabilities from both

00:30:31.240 | state government, city government, even private

00:30:35.040 | institutions. This is, again, hundreds of millions of people

00:30:39.480 | worldwide that are expecting money coming to them from

00:30:42.400 | institutions, that ultimately, the federal government of the US

00:30:45.920 | is likely going to have to backstop to some degree. So

00:30:48.800 | that's another huge check that's going to need to be written, but

00:30:51.680 | the federal government is inevitably going to have to

00:30:53.360 | write because we're not going to just let all these people have

00:30:55.280 | no money and come starving. And Social Security right now is

00:30:59.360 | projected to go bankrupt sometime between 2030 and 2035.

00:31:03.080 | So we're gonna have to write a check to cover the hole there.

00:31:07.000 | Plus, the interest payment checks.

00:31:10.760 | So much a mox point freeberg of like,

00:31:12.840 | let me just say,

00:31:15.480 | relative to other societies, other countries.

00:31:19.040 | Yeah. So the very likely case is that

00:31:23.400 | relative wealth will decline.

00:31:28.840 | So in the near term, I think it's inevitable we have higher

00:31:32.960 | tax rates. I've said this before, because in order to kind

00:31:35.320 | of meet the gap, even if we have these austerity measures or

00:31:38.600 | reduce costs or reduce the budget as the republicans are

00:31:41.360 | going to push for is the stat ceiling debate reaches its apex

00:31:45.320 | in 60 days from now, which you better believe this is going to

00:31:49.440 | be pretty, pretty damn dramatic.

00:31:51.280 | And there's going to be real questions of what happens if the

00:31:54.680 | US defaults on its treasuries, if the US defaults on

00:31:58.560 | obligations, it has on treasuries,

00:32:00.440 | there will be a real shift away from using those assets as the

00:32:08.040 | baseline of the risk free rate worldwide, what the net what the

00:32:10.960 | other thing will be, I don't know. I'll speak about the

00:32:14.600 | challenges I see with Bitcoin. You know, if we want to at some

00:32:17.640 | point,

00:32:18.000 | oh, did you hit a million yet? How's

00:32:20.280 | Bob, but if you put all of this together,

00:32:23.240 | you're gonna have to source income somewhere, you're gonna

00:32:27.400 | have to take a piece of the assets and a piece of the income

00:32:29.800 | away from the private citizenry. So you're gonna have to tax. And

00:32:34.200 | that tax will be used to kind of fill some of the hole. And

00:32:37.400 | then more of the hole will be filled by printing money. And

00:32:40.640 | that will lead to this kind of inflation of asset values, which

00:32:43.480 | ultimately means that the relative cost of things go up

00:32:46.360 | and relative wealth goes down. And I think that's the point to

00:32:50.320 | take note is that anyone who's concentrated assets is going to

00:32:53.200 | have them effectively

00:32:54.640 | lost in the washout.

00:32:57.760 | SACs, you want to add?

00:32:59.240 | Well, I just want to add a couple of details there, because

00:33:02.360 | Friberg went pretty quickly over a couple of those examples. So

00:33:05.400 | just to take that, that Chicago case, the numbers I saw in an

00:33:08.240 | article this week, I think it was in the Wall Street Journal

00:33:09.840 | was that 80% of the property taxes in Chicago are now going

00:33:14.920 | just to pay for pensions. So 80% are going to pay former workers,

00:33:19.240 | not current city workers. And moreover, those pensions are

00:33:23.280 | only 25% funded. So they've already over promised by 75%

00:33:29.240 | benefits that they can't afford. How is this going to work? And

00:33:33.280 | you saw that we just had an election there. And rather than

00:33:36.920 | fix the problem, they voted for a candidate, Brandon Johnson, who

00:33:40.880 | is even softer on crime than Lori Lightfoot. And the reason for

00:33:46.480 | that is because the government workers unions basically all

00:33:50.840 | supported him. So you have a situation in these blue cities

00:33:54.520 | and states where there is a massive civil service. They are

00:33:58.480 | the strongest special interest in local and state politics. They

00:34:02.480 | have already taken huge appropriations out of the state

00:34:07.120 | budget in the form of these pensions, which aren't even

00:34:09.680 | adequately funded, we can barely afford them as they are.

00:34:11.960 | Should we have pension sacks? What do you think?

00:34:14.280 | Sure. So what what happened in the 1980s, when there was a lot

00:34:19.480 | of pension reform in the private sector, as you move from defined

00:34:23.880 | benefit to define contribution. So you start having more defined

00:34:28.200 | contribution, like 401k. The way that these public pensions work

00:34:31.760 | is defined benefit. So, you know, what they'll do is they'll

00:34:34.880 | say that we're going to take your last year of employment with

00:34:39.040 | the city or state. And whatever your whatever the amount of

00:34:42.760 | money was you made that last year, you're going to get 80 or

00:34:44.920 | 90% of it for the rest of your not just your life, but your

00:34:48.160 | spouse's life too. And moreover, any overtime you earned becomes

00:34:52.640 | part of that calculation. So everyone knows this game. And so

00:34:56.400 | what you see is in their final year, state or city employees

00:35:00.480 | will load up on the overtime, they'll earn twice as much. And

00:35:03.800 | then they'll get 90% of that. Yeah, they get 90% of that for

00:35:06.400 | the rest of them and their spouse's life. We just can't

00:35:09.440 | afford to have rules like that, that don't make any sense. And

00:35:12.920 | so but the point is that the benefit that's been defined

00:35:16.800 | bears no relationship to the amount of money that's gone into

00:35:21.080 | these pensions, right. And so you have a simple solution here,

00:35:24.000 | you have a huge unfunded liability. Yeah. But to

00:35:26.440 | freebirg's point, every blue city and state in the country is

00:35:30.120 | going to have this problem. And who's going to pick up these

00:35:32.560 | expenses,

00:35:33.280 | you bring up great points, but you just mash them all together

00:35:36.120 | in this mashed potato of random things like unfunded pension

00:35:40.840 | liabilities, you want remember, re eyes trading, and they're

00:35:45.520 | like the same thing. They're not the same thing. They're driven

00:35:49.000 | by totally different, but we're talking about

00:35:50.880 | throw them in this like, is that amalgam soup and outcomes

00:35:56.280 | like conversations, I'm just saying like, if these are

00:35:59.240 | important topics, but I'm just saying, I do think they're

00:36:01.280 | motivated by totally different things. And they're not related

00:36:05.360 | as much as we think they are related.

00:36:06.960 | I think they're related. Let me walk you through how they're

00:36:08.920 | related. Okay, I want to hear how the re eyes you want trade is

00:36:12.440 | connected to the Chicago pension system,

00:36:14.480 | the holes need to be filled. So the money is not going to just

00:36:19.240 | not get paid to the pensioners, social security is not going to

00:36:22.320 | go away. Just like we saw in France. If you start to do that,

00:36:26.240 | you have revolutions in the street. There's literally

00:36:29.800 | bonfires at intersections in France in Paris today, because

00:36:33.720 | people don't want to wait another two years before they

00:36:36.120 | get their pension payments. So ultimately, that check has to be

00:36:39.200 | written. When you add up the column of how much money is not

00:36:43.080 | on the balance sheet today, how much liability is not on the

00:36:45.360 | balance sheet today, that is ultimately going to have to get

00:36:47.920 | paid out. And the US government is going to print money to pay

00:36:50.920 | it out. It indicates that there is a higher degree of

00:36:53.600 | uncertainty on whether or not I'm actually going to get the

00:36:56.200 | value back for the bonds that I'm buying in US dollar

00:36:59.480 | denominated form, or that the US dollar is actually going to be

00:37:02.160 | strong enough to cover the cost or has enough kind of, you know,

00:37:05.960 | or has too much volatility, because of this uncertainty. And

00:37:09.920 | I think that that's really where people start to say, well, maybe

00:37:12.240 | the US dollar isn't that risk free rate where it's a strong

00:37:14.720 | economy with a great balance sheet, great economic growth,

00:37:17.800 | there's certainly extraordinary potential because of the

00:37:20.080 | freedoms that we have to operate in this country as individuals.

00:37:23.520 | Through the enterprise, through the innovation, through the

00:37:25.600 | entrepreneurship, through the attraction of talent from all

00:37:27.640 | over the world to come here. But at the end of the day, we do

00:37:30.600 | seem to have a very big set of checks that we're gonna have to

00:37:32.960 | write. And as those, you know, liabilities start to mount,

00:37:36.040 | there becomes a real question on do I really want to hold

00:37:38.440 | dollars, maybe I want to hold something else. And maybe I

00:37:41.400 | diversify a little bit. And maybe instead of holding just

00:37:43.760 | dollars, I also hold other things. And as that starts to

00:37:46.400 | happen, you see a little bit of a shift. It's not an overnight

00:37:49.080 | thing. It's all catastrophic one or the other. But it starts to

00:37:51.920 | bring into question whether the US dollar is the standard de

00:37:54.920 | facto system that's used for trade around the world. That's

00:37:58.080 | the point.

00:37:58.480 | And sacks, there is a solution to this superannuation is done

00:38:02.200 | in the UK and in Australia, where you contribute, you're

00:38:06.720 | forced to contribute to your 401k, essentially, but you get

00:38:09.440 | to learn how to put money away and you become a little more.

00:38:13.880 | You have a little more authority over your future with these

00:38:19.480 | pensions where you're responsible for saving and

00:38:22.520 | you're kind of forced to save and it seems to have worked

00:38:24.640 | really well in Australia and other places where people have

00:38:27.160 | great savings, and you don't have this major debt load by the

00:38:30.280 | government doing it. So it's something for people to look

00:38:32.560 | into. Saxe, did you want to add anything to this? Yeah, I mean,

00:38:35.160 | being this one to death, just make it quick. Yes.

00:38:37.160 | I don't think we're necessarily being there to death, because I

00:38:39.440 | think it is a huge issue. I mean, look, the part of Chamas

00:38:42.240 | argument that I agree with is that you do have to evaluate the

00:38:46.520 | dollar on relative terms. And you know, you can argue that the

00:38:50.480 | US and the dollar it's it's still the, you know, this, let's

00:38:54.080 | call it the most eligible bachelor in the leper colony.

00:38:56.720 | You know, nothing started falling off on the man yet. But

00:39:00.200 | but that doesn't mean that it won't.

00:39:02.520 | That's really good. That's really good. By the way, the

00:39:06.960 | first default might be the nose is falling. You know,

00:39:10.080 | the economist Herb Stein once said that if something cannot go

00:39:12.520 | on forever, it won't. What we're doing right now cannot go on

00:39:16.000 | forever. We are running deficits and debts and unfunded

00:39:18.600 | liabilities that we cannot afford. And so it will stop. And

00:39:23.280 | the only question is how it stops. Well, I think there's

00:39:26.880 | Yeah, and it may stop in a way that is not vault. It's not a

00:39:32.720 | voluntary choice by us.

00:39:33.880 | We crashed the car basically, guys want to make a bet a

00:39:36.720 | friendly wager for charity. Oh, what happens in June? I'll make

00:39:40.920 | a bet with you guys. June. You mean the debt ceiling? Yeah.

00:39:43.280 | What do you guys think happens? You think this is going to be a

00:39:45.720 | fractious chaotic thing where the markets get roiled? No, I

00:39:49.360 | think is going to be a pretty

00:39:50.680 | rubber stamp forward deal where they're gonna it's going to come

00:39:54.160 | down to the wire. But my guess is no one's going to want to

00:39:56.240 | default on the debt. Yep. And there's going to be some

00:39:58.960 | concessions on spending. And ultimately, the debt ceiling

00:40:04.840 | will get extended. And that those concessions on spending

00:40:07.880 | will allow the Republican Party to save face with their voters

00:40:11.960 | and say, Look, we, we got some concessions here. I'm not sure

00:40:15.480 | they're going to be enough to really address any of the major

00:40:17.800 | problems that the US is facing over the longer term. But you

00:40:22.600 | know, certainly letting the debt ceiling hit and defaulting is

00:40:27.880 | catastrophic. Everyone

00:40:28.880 | knows, I think the majority case is a bunch of hand wringing, and

00:40:32.000 | then they make a concession

00:40:33.400 | that are interested in this topic, I would go use the way

00:40:35.800 | back machine, and go and read all of the articles in the 80s,

00:40:39.760 | where you could replace China with Japan. And what happened

00:40:44.680 | with Japan is that Japan just hit a demographic wall, not

00:40:48.240 | dissimilar to what China is about to hit in the next 15 or

00:40:50.320 | 20 years.

00:40:50.840 | Right? It's a good counter argument. Yeah, that's a really

00:40:53.000 | good point. And I think that there is this element of, you

00:40:55.880 | know, China as the primary threat. But I think the bigger

00:40:58.800 | problem, Chamath is that we have voted ourselves into a stupor,

00:41:02.720 | we have allowed ourselves to accrue these liabilities that

00:41:08.080 | are, in many cases, not on the balance sheet, that we simply

00:41:11.680 | cannot afford to pay. And the social unrest that will arise

00:41:14.760 | with if and when we don't pay them, or the economic cost of us

00:41:18.160 | actually paying them, either of those are going to be pretty

00:41:20.800 | significant. But that's under that's water under the bridge.

00:41:23.680 | And it has nothing to do with China. It has just everything to

00:41:25.880 | do with how the US is spending.

00:41:27.000 | Thank you for being intellectually honest. This is my

00:41:29.200 | point. I agree with you about the importance of these

00:41:32.080 | unfunded liabilities. I just completely disagree with you

00:41:35.360 | that this argument about these things being so hyper connected,

00:41:40.160 | or that all of a sudden, we're at the cliff of D dollarization.

00:41:43.360 | I don't think it's rooted in facts. And I think, again, it

00:41:45.800 | ignores this unbelievably important piece of logic that

00:41:49.520 | all of you guys that say this tend to ignore. And it's still

00:41:52.880 | an it's not even well addressed in Dalio's book, which is it is

00:41:56.760 | a pegged currency. And the minute you unpack it, none of

00:42:02.800 | you know what happens to it, except that it probably isn't

00:42:05.720 | where it's trading today. And if you actually then have to factor

00:42:08.520 | in dollar reserves that everybody holds, that thing

00:42:11.440 | would skyrocket in value, and it would crush the export value of

00:42:14.320 | the yuan. And it happens to all currencies. And this is this

00:42:18.000 | funny thing that has happened to the United States, which is that

00:42:20.520 | it ran forward, and it transitioned its economy to a

00:42:24.680 | service led economy faster than other countries and other

00:42:27.800 | economies and other currencies did. And nobody wants to just

00:42:32.560 | talk about that. Except it's the facts. We're talking about

00:42:36.000 | that sort of drives us.

00:42:37.520 | Good. I don't think the big risk is that all of a sudden the

00:42:40.160 | dollar gets replaced by the yuan as the world's reserve currency.

00:42:43.280 | I think freeberg lays out a more intermediate path, which is

00:42:47.640 | people start to hedge their dollar exposure. And decisions

00:42:51.760 | that used to be automatic, like trading oil and dollars, you

00:42:55.200 | know, the so called petrodollar now becomes a little bit, you

00:42:59.160 | know, more of a decision. So you know, the

00:43:01.240 | sound happened. That's what happened with the pound sterling.

00:43:03.280 | It was a similar story. And it was not an overnight collapse. I

00:43:06.440 | mean, there were certainly these kind of punctuated moments where

00:43:08.640 | there were hits. But, you know, the history is that there was a

00:43:11.240 | slow devaluation over time. And the, you know, as a result of

00:43:15.040 | obviously the economic pressure and uncertainty,

00:43:17.480 | you know, what happened to pound sterling was that it was pegged

00:43:19.640 | to the US dollar and then it became unpegged. So exactly what

00:43:22.800 | I'm talking about. No, even post that, even post that if it's a

00:43:25.640 | free floating currency, yeah, you're proving my point. When

00:43:30.160 | Soros broke the back of the US dollar, what he forced George

00:43:33.080 | Brown, or what he forced the Chancellor of the exchequer to

00:43:35.120 | do was to basically depend upon and then yes, you're right. It's

00:43:38.920 | been like this ever since. Yeah, that was what I'm saying was not

00:43:44.160 | if you let it be free floating, nobody wants to trade in that

00:43:46.800 | other currency. Everybody wants the dollar. As bad as the dollar

00:43:50.760 | is David's right. It is the worst affected leper in the

00:43:54.120 | leper colony. Yes,

00:43:56.520 | we're still in the colony. This is why you have to have if

00:43:59.680 | you're going to be intellectually honest, just have

00:44:01.200 | a relative conversation about all of the currencies, and all

00:44:04.160 | the things that they're also going through, which are also

00:44:06.120 | not not perfect,

00:44:07.400 | the debt payments for the emerging and the frontier

00:44:09.400 | markets are extraordinary.

00:44:10.960 | Just realize that if you want to go and peg your economy to

00:44:15.080 | somebody else's back, they also come with their own trials and

00:44:18.800 | tribulations that you have to risk manage as well. And now you

00:44:22.080 | have to decide on balance. Do you want to risk manage a

00:44:24.720 | centrally governed economy? Right from a central bureau, or

00:44:29.240 | a freewheeling democratic like these are all the discussions

00:44:31.680 | that people should have? Yeah, there's a lot of choices there

00:44:35.920 | just back to the the non currency part of this for a

00:44:38.040 | second. There are a lot of like connections between these

00:44:40.160 | things. I actually think there is a strong connection between

00:44:43.680 | what's happening, for example, in Chicago with the out of

00:44:47.840 | control civil service and unfunded pensions all the way to

00:44:51.280 | the dollar status. But there's also a connection between

00:44:54.080 | commercial real estate and these pensions. So on a previous

00:44:57.880 | show, we talked about the commercial real estate looming

00:45:02.520 | crisis. And a lot of people thought that, you know, some of

00:45:05.800 | the comments we were just talking our book, which is not

00:45:07.880 | true. I don't own, I don't have a dollar invested in these

00:45:11.200 | office towers. But you know, who does pension funds? Yes, who

00:45:15.640 | owns these office towers. So you're talking about pension

00:45:19.320 | funds that are three quarters unfunded. And they may have a

00:45:23.000 | lot less funds than they even think they do, because we're

00:45:25.320 | about to have a huge reckoning, where all of a sudden these

00:45:28.640 | office towers that were supposed to be blue chip, that we're

00:45:32.160 | supposed to have the best collateral there was in major

00:45:35.360 | American cities. Now, all of a sudden, they may not be nearly

00:45:38.760 | as valuable as they thought they were.

00:45:40.040 | Yeah. And, and if they don't own the building, they definitely

00:45:43.200 | own the debt 100% for sure. In the fixed income portfolios of

00:45:47.720 | all these pension systems are the debt that was used to

00:45:50.280 | finance these buildings by the REITs and by you know, the big

00:45:53.680 | real estate funds that put those things together. So you're

00:45:55.840 | absolutely right. They are 100% impacted by what's about to

00:45:59.160 | happen. We're not, we're not going to allow given the civil

00:46:01.920 | unrest and social unrest risk. And obviously, as a democracy,

00:46:05.480 | we're not going to allow that all to go to zero. And we're not

00:46:09.400 | going to let pensioners not get paid. Ultimately, that's just a

00:46:12.640 | kiss of death, maybe pension payments are reduced to some

00:46:15.040 | degree. But again, Paris is a really great example of as you

00:46:19.640 | start to try and shift the economic guarantees that have

00:46:22.460 | been made to pensioners even slightly.

00:46:24.160 | Yeah, what was it two years in retirement? 60?

00:46:26.280 | Yeah, and it was certainly like, you know, you could sit here and

00:46:31.560 | argue what people for years for their whole life had this

00:46:35.200 | expectation set. We have all for our whole careers invested in

00:46:39.400 | the Social Security benefits that were owed as retirees

00:46:43.640 | through every paycheck that we've received. And those Social

00:46:47.540 | Security payments may not end up coming back to us if Social

00:46:50.120 | Security is allowed to go bankrupt. So ultimately, the

00:46:53.040 | government has to set step in and issue new dollars to make

00:46:57.280 | that up. Then the economic question is what happens to the

00:46:59.600 | value of the dollar, what happens to the value of the

00:47:01.280 | economy, and so on as you issue trillions of dollars to fill

00:47:04.280 | these holes.

00:47:04.720 | Let me ask a question that's a little more positive here,

00:47:08.240 | perhaps, which is, is there a path out of this, you know, debt

00:47:14.480 | cycle we're in? And what are the top ways in which we're going to

00:47:19.240 | get ourselves out of this? I have three that come off the top

00:47:22.280 | of my head. Hold on, I have three off the top of my head.

00:47:25.320 | Number one is austerity measures. Number two is

00:47:27.520 | productivity through technology. And perhaps number three is

00:47:32.720 | maybe recruiting more entrepreneurs here to start more

00:47:36.200 | companies and, you know, fill some of these jobs. So

00:47:39.880 | intelligent immigration, which

00:47:41.560 | number one is higher taxes. Yeah, number one is higher taxes

00:47:44.880 | in terms of what's likely to happen.

00:47:47.520 | That would be a fourth one. That's

00:47:49.200 | austerity. Yeah, so look, higher taxes, because you can go after

00:47:52.520 | assets, you can go after wealth. So there will be higher taxes.

00:47:55.520 | Okay. So I still think I still think we'll end up seeing 70%

00:47:59.240 | tax rates on the wealthiest people 70%. I don't see I don't

00:48:04.000 | see it being like unpopular. I think it's going to be unpopular

00:48:07.560 | with the wealthy, it's going to be popular elsewhere to fill the

00:48:10.320 | hole. Second is cut back on spending. But that's a really

00:48:12.880 | hard thing to do. Because, you know, as we've talked about in

00:48:15.320 | the past, people vote to get more stuff. So you put the

00:48:19.000 | politician in is going to vote to get you more stuff, you don't

00:48:21.200 | vote people in to go cut spending. So generally, you

00:48:24.840 | know, we're going to likely see number one happened first, maybe

00:48:28.960 | there'll be a reckoning where you kind of reduce spending,

00:48:31.000 | it's going to take extraordinary political will, and an

00:48:33.720 | extraordinary depth of education and diffusion of understanding

00:48:37.800 | of this, this key critical economic problem amongst the

00:48:41.040 | voting class, which is a really hard thing to realize. I think

00:48:45.240 | number three, you're saying get the public to understand to

00:48:48.880 | understand that we have to have austerity measures.

00:48:51.520 | Yeah, and then number three, and basically people are going to

00:48:55.120 | have to make sacrifices. So the first sacrifice will be the

00:48:57.800 | wealthy, they're gonna have to sacrifice through higher taxes.

00:48:59.920 | The second sacrifice will be everyone else by seeing reduced

00:49:03.080 | spending and reduced kind of services, the services, etc. The

00:49:07.040 | third is the hopeful one, but we don't have a guarantee on this,

00:49:10.640 | which is, do we see economic growth through productivity

00:49:15.000 | gains? Can we create leverage with our resources and our

00:49:17.640 | people by using new technologies to get more with less? And you

00:49:21.560 | know, anytime? Yeah, like, again, I gave the example last

00:49:24.640 | time, but when a tractor was introduced in agriculture, all

00:49:27.480 | the people that were farming the ground didn't have a job

00:49:29.440 | anymore. But what happened is new jobs emerged and making

00:49:32.040 | tractors and servicing those tractors in, you know, gas

00:49:35.120 | pipelines to get gas to the tractors, all these economies

00:49:37.960 | emerged as a result of that economic, technical innovation.

00:49:41.000 | So I think as we see AI and other innovations hit the

00:49:43.640 | market, you know, new economies and new industries, hopefully,

00:49:47.200 | really blossom, and and we can benefit from that economic

00:49:51.080 | growth and also lower costs for people on purchasing goods and

00:49:54.680 | services. We've identified four things when Reagan came in,

00:49:57.920 | wasn't wasn't the highest tax rate, like, like 70%. Yes, yeah,

00:50:01.600 | that was the top marginal tax rate is 70%. And 70% is not

00:50:04.720 | unheard of, it will happen again in the US. Well, and but Reagan

00:50:07.760 | unleashed an economic boom by flattening the tax structure,

00:50:10.880 | because marginal tax rates created disincentive for people

00:50:14.720 | to work and produce more. And so there is a big economic hit from

00:50:18.880 | this. Yeah. And remember what this 1970s were like, it was the

00:50:22.680 | Malaise days of Jimmy Carter, we had a horrible economy with high

00:50:26.280 | inflation, and everybody was paying high tax rates, and the

00:50:30.040 | government wasn't making that much revenue, because there

00:50:32.440 | wasn't as much economic activity going on. And during the 1980s,

00:50:36.160 | we had an economic boom, and the government actually collected

00:50:38.440 | more revenue with lower tax rates, because so much economic

00:50:42.880 | progress was unlocked.

00:50:43.880 | Sacks, we identified four things, just like we've learned

00:50:47.280 | nothing, which one is the most important here? Which ones are

00:50:50.160 | the most important? We talked about austerity, we talked about

00:50:52.400 | increasing taxes, we talked about innovation, and efficiency.

00:50:55.160 | And then we talked about immigration, recruiting more

00:50:57.240 | highly talented people, when you look at those four, do you have

00:50:59.640 | any to add to that list to get out of this? And which ones do

00:51:02.160 | you think are the most important? And why?

00:51:03.540 | When you look at federal tax revenue, over a 50 year period,

00:51:10.380 | go look at the Fred charts, what you see is that quite independent

00:51:15.340 | of the top marginal tax rate, the amount of federal receipts

00:51:19.820 | that the government's able to collect is roughly around 19%,

00:51:23.940 | plus or minus 2%. And so you can only get so much blood from a

00:51:28.220 | stone, you can try to raise the top marginal rates, but then

00:51:32.020 | rich people have an incentive to basically find more tax

00:51:35.540 | protected strategies. So the history of this thing going back

00:51:39.020 | 50 years is you can only extract so much from taxes. And what

00:51:43.620 | you're better off is a lower tax rate that is broader based. And

00:51:48.660 | you go for economic growth that produces more activity. But

00:51:51.340 | look, if you if you're spending too much, there's no way out of

00:51:55.100 | that.

00:51:55.380 | So austerity, critically important, and

00:51:58.180 | entrepreneurship,

00:51:58.740 | I mean, when Bill Clinton left office, and I think Reagan

00:52:02.220 | through Clinton was the biggest 25 year period of economic boom

00:52:05.620 | we've ever had. federal spending as a percentage of GDP was 18

00:52:10.780 | and a half percent. He got it down from like 22%. And he did

00:52:14.180 | it through economic growth. And he bragged about it. Yep. So you

00:52:17.820 | know, look where you want to be is I think, federal spending

00:52:22.060 | should be in the low 20s. I think you want tax revenue to be

00:52:27.180 | in the high teens 19%. You have a small deficit. Those are the

00:52:30.780 | conditions for economic growth.

00:52:33.180 | Jamal, any thoughts here on our way out?

00:52:36.260 | I'm going to take the complete opposite of all of this, which

00:52:39.420 | is the anti chicken little version, which is I think not

00:52:43.700 | much at all changes. I think that jet debt to GDP will

00:52:49.340 | continue to rise, not just for us, but for every other country

00:52:53.820 | in the world whose fate is worse than the United States.

00:52:57.460 | And I think that on a relative basis, the United States will

00:53:02.020 | continue to be exceptional. And that this will not really be an

00:53:07.540 | issue in our lifetimes. Okay. And I'm not saying that's a good

00:53:11.620 | thing. And I'm not saying that's a just thing. And I'm not saying

00:53:15.460 | that's what I want to happen. But pragmatically, I think that

00:53:19.420 | that's what will happen. And I don't think that there is a

00:53:22.900 | magic number, where all of a sudden things start to break

00:53:26.580 | where there's some magic number for jet debt to GDP, where all

00:53:29.780 | of a sudden everybody finds religion. Instead, I think that

00:53:32.420 | it just creeps higher. And by the way, if you look at where

00:53:35.780 | debt to GDP was at the turn of the 19th century, and then what

00:53:39.140 | happened through the World War Two, what we've really done is,

00:53:42.540 | you know, we've retraced a lot as well. So there have been

00:53:45.580 | moments where we've been out over our ski tips a lot. And so

00:53:49.580 | I think it's just important to keep in mind that sometimes what

00:53:54.660 | works just continues to work. And I keep asking myself the

00:53:58.220 | relative question, which is what country, what economy, what

00:54:04.300 | group of human capital is better positioned in the United States.

00:54:08.180 | And despite all of the things that are screwed up with this

00:54:10.340 | country, it's hard to find a better example. So yeah, unless

00:54:14.580 | you happen to have the lucky mineral or oil club, like Norway

00:54:20.940 | or Saudi Arabia, you're, you're going to be hard pressed to find

00:54:23.820 | a better place to plant your money. And I think

00:54:25.380 | entrepreneurship and immigration are the two most

00:54:28.260 | important things we can do, as well as austerity. And I think

00:54:31.140 | Joe Manchin is like it or these moderate candidates in the

00:54:33.980 | middle who might actually be able to talk about cutting.

00:54:36.700 | But by the way, you said something you said something

00:54:39.180 | really interesting, which is if you look at Norway, Saudi

00:54:41.740 | Abu Dhabi, what are those countries effectively becoming

00:54:45.260 | by monetizing the oil, they invest in all of the economies

00:54:48.460 | that are working. Perfect segue. Thank you. It's not as if the

00:54:50.940 | Saudis and Abu Dhabi and the Norwegians aren't trying to

00:54:53.820 | invest in America. They're trying to put as much money to

00:54:56.740 | work as possible. They're just trying to pace it out so that

00:55:00.300 | they have time diversity and asset diversity. So to your

00:55:03.180 | point, Jason, so this is a it's sort of a bit of a self

00:55:05.580 | fulfilling prophecy. I think that what has worked continues

00:55:08.780 | to work and then the burden for disruption gets higher and

00:55:12.700 | higher. Yeah, that changes. There's two things that work in

00:55:14.940 | the world, having those natural resources, or having

00:55:17.980 | entrepreneurship. Let's make a segue here.

00:55:19.900 | Well, I have a final point on that.

00:55:21.980 | Oh, God, we've been final point for 20 minutes here. Go ahead.

00:55:24.060 | Quick final point.

00:55:24.820 | This is an important discussion, I think. Okay. So Adam, Adam

00:55:28.060 | Smith, once said that there's a great deal of root in a nation,

00:55:30.940 | meaning it takes a lot of political bungling to screw up

00:55:33.740 | something as big as a nation, especially a nation. That's the

00:55:37.820 | number one superpower in the world that has the world's

00:55:40.060 | reserve currency. So we are, in some ways, the beneficiary and

00:55:44.620 | coasting on hundreds of years of excellence of economic

00:55:48.140 | performance and great political leadership in this country. And

00:55:51.620 | the question to ask is not whether we can still post on

00:55:56.580 | that, but whether the political leadership we have today is

00:55:59.540 | living up to the standard we had in the past. And I think it's

00:56:01.620 | clearly not. And the only question is when it breaks. And

00:56:06.180 | it's hard to predict exactly when it's going to break. But

00:56:08.500 | what I do believe is that if we keep going the way we're going,

00:56:11.700 | it, it will have to stop.

00:56:13.340 | Well said, we're definitely bending it right now. And when

00:56:15.820 | you bend it, sometimes it breaks.

00:56:17.540 | Right. And by the way, the reason why we are going to

00:56:20.140 | pursue AI at breakneck speed, even though it may lead to some

00:56:24.900 | sort of weird dystopian future is because we need that

00:56:28.460 | productivity boost. We have no choice now.

00:56:30.500 | 100%

00:56:31.140 | We are so mired in debt.

00:56:31.900 | And frankly, better us than the next guy.

00:56:33.220 | And better us than the next guy.

00:56:34.700 | Whoever gets there first wins.

00:56:36.340 | Another perfect set of words. Two major stories this week that

00:56:41.140 | we need to discuss. The first is Saudi Arabia's public

00:56:44.060 | investment VC arm took a very interesting PR step of listing

00:56:49.460 | their funds that they have backed. And it's a significant

00:56:53.220 | list. Everybody from Andreessen Horowitz to KOTU, not surprising

00:56:57.940 | there. And Mark Andreessen and Ben Horowitz and Adam Newman

00:57:04.300 | had a major keynote at a Saudi startup conference, I was

00:57:11.100 | actually asked to keynote the next one in Riyadh, which I'm

00:57:14.500 | debating doing. And then, in sync with that happening, at the

00:57:19.260 | same time, there's been a debate of should LPS in America be

00:57:25.980 | backing firms like Sequoia, China, Matrix, China, etc.

00:57:30.460 | Because those firms are now backing open AI competitors. And

00:57:35.860 | if we believe AI is the big race here, should we as a country,

00:57:41.180 | we don't we're not allowed to back military stuff, obviously,

00:57:44.260 | in these countries. But how do we on this global chessboard

00:57:48.700 | decide should we be taking money from Saudi? Should we be

00:57:52.140 | investing money in AI startups in China? So I think Chamath,

00:57:56.260 | you've got a big perspective here, globally. Let's start

00:57:59.740 | with you. Two separate issues. Any surprises here by Saudi, the

00:58:04.380 | kingdom actually releasing the list of who they're backing, and

00:58:06.940 | why would they do that at this point in time? And then us

00:58:10.460 | investing in China, because we are at a moment here, a

00:58:12.780 | crossroads, I think, of should we be engaging or not engaging

00:58:16.980 | and building bridges with China and Saudi? You know, for obvious

00:58:21.580 | reasons,

00:58:22.020 | look, Saudi Arabia, Abu Dhabi, all of the UAE, these are

00:58:25.540 | countries that are really important on the world stage,

00:58:28.580 | and increasingly so because they manage peace and prosperity

00:58:31.620 | regionally now, right, they have huge balance sheets that can

00:58:36.100 | accelerate all kinds of projects all around the world. And so

00:58:40.420 | they have to be taken seriously. And so this is a very smart

00:58:43.660 | marketing move by the PIF, which is to essentially say, look, we

00:58:48.180 | are an established blue chip LP of the blue chip organizations

00:58:53.580 | that you're used to hearing about and celebrating. And I

00:58:57.060 | think that's very smart of them. Because what it does is it

00:59:00.140 | reinforces the feedback loop that other great firms should be

00:59:04.180 | going to them to raise capital when it comes time for them to

00:59:07.020 | raise their n plus first fund. And so I suspect, especially now

00:59:12.380 | it makes even more sense because everything we've heard,

00:59:14.780 | Friedberg mentioned it a couple of episodes ago, the United

00:59:18.540 | States limited partner market is essentially closed for business,

00:59:21.780 | they have huge misallocation problems, the endowments are

00:59:25.220 | sort of closed, the universities are closed, a lot of the family

00:59:28.100 | offices are licking their wounds. And so this is a perfect

00:59:31.940 | time for folks in Saudi Arabia and the UAE to basically put the

00:59:35.940 | foot on the gas and basically tell everybody, hey, we are open

00:59:39.060 | for business. So I think that that makes a lot of sense. And I

00:59:43.900 | think that it'll be successful, it'll work, especially in a

00:59:46.580 | moment now where US dollar flows from US dollar limited partners

00:59:50.300 | are very difficult and harder to come by.

00:59:54.980 | Well, and we're also selling billions of dollars in weapons

00:59:57.700 | to the kingdom. And we are a major part of our valuable

01:00:01.860 | they're a valuable security partner of the United States,

01:00:04.300 | they're valuable economic partner in the United States, no

01:00:06.540 | different than doing business with any other country. I think

01:00:08.820 | it's smart by the PIF. On the other thing, though, with us

01:00:11.780 | firms investing in China's AI, it should not be allowed. And I

01:00:14.820 | do think that the folks that are responsible for CFS need to get

01:00:18.660 | a handle on this. Look, I've done a bunch of deals where I

01:00:23.660 | have had to jump through a bunch of CFS hoops where explain

01:00:27.100 | CFS, please. So basically, CFS is the Committee on foreign

01:00:30.220 | investment in the United States. Now what that means is if folks

01:00:34.140 | want to invest in certain things that are on the list of things,

01:00:36.940 | and I'll tell you the things that I've been involved with

01:00:38.900 | that that came under CFS, rocketry, and certain chip

01:00:42.700 | technologies are so advanced that the United States has very

01:00:46.780 | specific rules that limit the ability for foreign actors to

01:00:51.860 | invest in those businesses. And in those situations where a few

01:00:56.540 | folks invested beside me in some of these companies, we had to go

01:01:00.060 | through a process to get CFS approval before that investment

01:01:03.740 | was allowed. Now, what's interesting about that is that's

01:01:06.540 | about money coming in. But I do think that the reverse now

01:01:10.900 | becomes important because if us dollars are going to go and see

01:01:15.460 | these extremely complicated advanced technologies abroad,

01:01:19.300 | especially into the hands of countries that are frenemies at

01:01:23.140 | best of the United States, I think we have a responsibility

01:01:27.100 | to have a point of view on that. And so I think Keith Raboi was

01:01:30.380 | the one that was very definitive and said this should not be

01:01:33.020 | allowed. I do think it is so early, Jason, we talked about

01:01:35.820 | this, we're on this curve of fuck around and find out which

01:01:38.380 | means there will be some crazy examples of stuff that are very

01:01:42.740 | uncomfortable. Yep. I don't think we want us fingerprints on

01:01:47.300 | this stuff being perfected outside of us borders.

01:01:50.500 | sacks when we look at the history of engagement with

01:01:53.900 | China, maybe we can take a multi decade globalization

01:01:57.180 | perspective here. When you look back on it, the engagement with

01:02:01.100 | China created so much prosperity, so much intertwined

01:02:04.500 | dependency, iPhones being the best example, possibly we're

01:02:08.580 | selling them in China, we're making them in China. China

01:02:12.060 | loses Apple as a customer, that would be absolutely devastating

01:02:16.700 | for them. And it would obviously be devastating for Apple as

01:02:19.220 | well. So when we look back on that, as a general rubric here,

01:02:23.020 | do you think we enabled a competitor? Or we avoided future

01:02:29.620 | conflict because of the interdependency? And where do you

01:02:31.900 | sit in terms of thinking about engagement, versus maybe

01:02:36.260 | isolation or something in between those two frenemies,

01:02:39.780 | best of frenemies, etc.

01:02:41.020 | The policy of constructive engagement, as it was called 20

01:02:44.460 | something years ago, the the idea behind it was that if we

01:02:48.500 | engage with China economically, and help make them rich, then

01:02:52.420 | that they would become more like us, they would somehow turn into

01:02:55.540 | a democracy, and they would have tremendous gratitude towards us.

01:02:59.540 | And we'd become friends. It's not the way it worked out. There

01:03:03.820 | were people who warned that this was a foolish approach. So most

01:03:07.380 | notably, the realist scholar john Mearsheimer at the

01:03:11.220 | University of Chicago, Warren back in 2002, that that was not

01:03:15.740 | the way this was going to play out. If we made China rich, they

01:03:18.660 | would seek to convert that wealth into political power. And

01:03:22.580 | then they would act the way that all other great powers have

01:03:26.180 | behaved throughout human history, which is they want to

01:03:28.540 | dominate their region, and they would seek to push the United

01:03:32.180 | States out of Asia. And the future that he predicted 20

01:03:36.180 | years ago is the future that's come true. And I think the you

01:03:38.860 | know, all the constructive engagers, I think, has some egg

01:03:41.500 | on their face. Now, I understand where they're coming from. This

01:03:44.580 | is a fundamental difference between whether you see the

01:03:47.460 | world in economic terms, which is about creating positive sum

01:03:51.500 | games, basically trade, or whether you see the world

01:03:55.420 | fundamentally in geopolitical terms, which is about the

01:03:57.940 | balance of power, which is more of a zero sum game. And I think

01:04:01.700 | that both views, they're both extremely important, we want to

01:04:05.300 | engage in positive some relationships that generate more

01:04:08.300 | trade and more wealth for United States. At the same time, we

01:04:11.220 | have to be aware and concerned about the balance of power, we

01:04:14.660 | do not want a number two country in the world who can rival the

01:04:19.940 | United States, in terms of power, who basically could win a

01:04:23.420 | security competition with us. And we certainly don't want a

01:04:26.540 | country in the world to be more powerful than us. So I think

01:04:29.380 | this is sort of the yin and the yang is geopolitics versus

01:04:31.820 | economics. And I think what's happened with China over the

01:04:34.420 | last several years is it's flipped, I think we used to see

01:04:37.300 | the relationship primarily in positive some economic terms,

01:04:40.500 | and now we see it in geopolitical terms. And I think

01:04:43.300 | there's a lot of firms now in the United States who haven't

01:04:48.260 | embraced this new reality. And to go back to your question

01:04:51.460 | about, you know, when should a venture capital firm take money

01:04:54.940 | from a foreign country when it should, and I think there's a

01:04:57.300 | very simple rule for this, which is, if the country's a US ally,

01:05:01.620 | I think it's fair game, because the US has said this is a

01:05:04.380 | partner of ours. So why can't you do business with them? But

01:05:07.500 | if the United States government has said this is an adversary,

01:05:10.380 | you're putting yourself in a really difficult, precarious

01:05:13.460 | spot by doing business with them,

01:05:15.580 | because then you have to explain yourself to the US

01:05:17.420 | government. Yeah,

01:05:18.060 | this is the very simple rule we would use as I don't we would

01:05:21.020 | never consider taking money from Russia or China, any country

01:05:27.020 | that the US government says is an adversary of ours. But if the

01:05:29.940 | US government says this is a partner and an ally, then I

01:05:32.100 | think you can consider it.

01:05:33.200 | Do you think there's a way sacks to salvage the relationship

01:05:36.980 | with China and make it productive? Or do you think it's

01:05:39.460 | a far gone conclusion at this point, because one might argue,

01:05:42.620 | and I've heard people argue this, maybe China would have

01:05:46.380 | invaded Taiwan already if it wasn't for the interdependency.

01:05:49.460 | So I know we're dealing with, you know, a lot of we're doing a

01:05:52.580 | lot of predictions here. But do you think it can be salvaged?

01:05:55.420 | And do you think it would have been a worse relationship if we

01:05:57.980 | hadn't had this interdependency that's been built up?

01:06:00.180 | I'm not quite sure that the economic interdependence theory

01:06:03.600 | preventing war has been definitively proven. If you go

01:06:06.920 | back to World War One, for example, it was the case that

01:06:11.040 | Britain and Germany actually were each other's number one

01:06:14.480 | trading partners, and they still got in World War One, for

01:06:17.440 | reasons that in hindsight seem really silly. So I'm not sure

01:06:22.380 | that economic interdependence can prevent, it certainly

01:06:26.220 | doesn't prevent security competitions from arising. And

01:06:28.880 | therefore, I don't think it can necessarily prevent a war.

01:06:31.780 | Although, you know, having business ties can lead to

01:06:36.220 | positive interactions. Yeah, so I'm just saying the jury's still

01:06:39.580 | out on that. But I think that, like I said, I think once you're

01:06:44.180 | in a security competition, the way that we are with China, I

01:06:47.120 | think geopolitics rather than economics is in the driver's

01:06:49.620 | seat. And

01:06:50.460 | Freiburg intellectually way, I think to process this, you would

01:06:55.520 | never invest in a North Korean AI company, a Russian AI company

01:07:00.140 | or an Iranian AI company. How do you think about China, and then

01:07:04.900 | just generally this topic of when to engage when venture

01:07:08.500 | capitalists when startups, you know, and trade partners should

01:07:13.380 | engage with various countries? How do you think about a

01:07:16.620 | Freiburg? In what role as an investor? Well, we could we

01:07:20.020 | could take multiple roles here. Founder investor would be the

01:07:23.240 | top two for this program, I think. Or taking money from any

01:07:28.220 | of those three possibilities, very few

01:07:30.220 | portfolio companies that don't benefit some way from the trade

01:07:34.100 | relationship with China. So, you know, to sexist point, I'm not

01:07:40.140 | sure you can really say China is a true and complete adversary in

01:07:46.340 | the sense that we're on opposite sides. There's obviously deep

01:07:49.340 | interdependency. So, you know, it's hard to kind of say, I draw

01:07:54.140 | the line at this kind of technology investing there, but

01:07:56.960 | I benefit from their technology investing that's going on there

01:08:00.540 | in other ways with some of my other businesses. Right? I think

01:08:03.340 | that that's really where you kind of run into a bit of a

01:08:06.300 | conundrum that we do have a deep interdependency. So, you know,

01:08:13.580 | like with respect to like investing in China, I don't know,

01:08:16.700 | I think the investing in China thing, it's pretty difficult

01:08:19.300 | given that there is a single power that gets to decide what

01:08:24.340 | does or doesn't happen. I mean, look at what happened with

01:08:25.820 | Alibaba. A lot of shareholders got pretty wiped out there.

01:08:29.940 | These, these governments where you have like, the, the

01:08:35.140 | potential of getting completely wiped out by government action

01:08:37.620 | is a pretty scary place to invest in general, I'd be more

01:08:40.980 | oriented as an investor around those concerns than I am about,

01:08:44.020 | you know, it's really hard to do the calculus on on Am I helping

01:08:47.620 | or hurting America versus China? You know, you could argue 100

01:08:53.420 | ways each of those sides.

01:08:54.660 | What do you think of sexes framework? If we're partners?

01:08:57.620 | You know, fair game, if not partners, not a good idea to put

01:09:01.700 | your neck out.

01:09:02.180 | But we're part sorry, are you asking? Are you saying like,

01:09:05.420 | we're not partners with China?

01:09:06.700 | Well, it seems like the US government has said we're

01:09:11.260 | adversaries now, and that we're in a pretty dogged competition.

01:09:14.940 | Well, Jake, I'll just be specific. I'm talking about a

01:09:16.940 | situation in which you're taking money from them. Yes, in a

01:09:20.220 | situation where you're taking money, I do think that selling

01:09:22.540 | them products that are, you know, not like super strategic,

01:09:28.540 | like I think selling them our most advanced chips is

01:09:30.860 | dangerous. But, you know, I look, I think if you're selling

01:09:33.940 | them products that help restore the trade deficit, and correct

01:09:37.580 | that movie, I don't have a problem with that. Yeah, I don't

01:09:39.580 | have a problem with selling movies or cars or something like

01:09:43.060 | that to China. The question is, though, I think if you're a

01:09:45.660 | venture capital firm, do you take their money? That's what I'm

01:09:47.980 | specifically talking about. And I think whether you're allowed

01:09:50.580 | to or not, we don't because we just don't have to think about

01:09:55.220 | what complications that could cause down the road.

01:09:57.820 | Also getting your money out of China also a difficult task, it

01:10:01.660 | seems these days. Cash App creator Bob Lee, aka crazy Bob

01:10:06.260 | on Twitter, that was his Twitter handle was stabbed to death

01:10:08.580 | tragically in San Francisco earlier this week. He was

01:10:11.940 | squares for CTO. He worked at Google on Android. He was the

01:10:16.620 | chief product officer at mobile coin. Also an angel investor in

01:10:20.100 | a ton of companies figma space x clubhouse. Well known in the

01:10:24.020 | industry. Officers responded at about 235am to report of a

01:10:27.340 | stabbing on the 300 block of Main Street and arrived to find

01:10:33.940 | Lee who had been taken to a hospital and succumb to his

01:10:35.780 | injuries there. No arrests has been made. A lot of San

01:10:40.300 | Francisco. Politicians are sending their thoughts and

01:10:44.940 | prayers. But obviously, San Francisco is still very

01:10:49.420 | dangerous place, it seems. Any thoughts on this and how it

01:10:53.060 | might act as some sort of crossroads or not? And thoughts

01:10:58.860 | and prayers, obviously to his family.

01:11:00.180 | Like I think this

01:11:01.020 | was a pretty tragic event. There's a lot of people who I

01:11:06.660 | knew that were pretty close with him. I got several messages on

01:11:10.060 | his passing. He was I didn't know him. Personally, I think we

01:11:13.420 | met maybe once or twice. He worked on Android at Google and

01:11:16.820 | obviously had a key role at square in the early days and was

01:11:20.020 | a pretty impactful and important person. But also supposedly, I

01:11:23.660 | didn't know him very well again. But everyone says just such an

01:11:26.140 | incredibly kind and generous person. So tragic loss. I used

01:11:30.620 | to live two blocks from where the the event happened. I'll

01:11:35.460 | zoom out.

01:11:36.060 | Where is it? Is it a bad place in Soma at Rincon Center?

01:11:40.580 | Right by the big condo towers there. And that's right where

01:11:42.860 | the Salesforce offices used to be. And, you know, block from

01:11:47.900 | the waterfront.

01:11:48.500 | Is it part of all that drug craziness?

01:11:52.620 | No, so it's not in the heart of the camping district. It's just

01:11:56.740 | a nice area. And so I'm a quiet area, right? So at night,

01:11:59.660 | there's no one there. I went to San Francisco a few weeks ago,

01:12:02.140 | I told you guys I pulled up to a restaurant on the Embarcadero

01:12:05.100 | and I joked with my buddy in the car. I'm like, Oh, my car is

01:12:07.500 | gonna get broken into while we're at dinner because I'm

01:12:09.060 | parking on the street. We went to dinner 90 minutes later came

01:12:11.300 | out. Of course, my car been broken into the trunk had been

01:12:13.860 | popped up. And it's just like,

01:12:15.020 | this is a fancy area of Soma, Chamath. Very fancy area of

01:12:18.540 | Soma.

01:12:18.900 | Look, here's the thing. If you park at a parking meter in San

01:12:21.420 | Francisco for eight minutes too long, you get a 60 to $100

01:12:24.780 | parking ticket. And San Francisco has become an upside

01:12:28.100 | downtown. What I mean by that is I think that like so much of the

01:12:32.820 | response that we've had in the last couple of years to power

01:12:36.460 | dynamics and concerns about the powerful having too much

01:12:40.060 | influence over those who are less powerful, who have less

01:12:44.220 | influence and who suffer as a result of their demeaned

01:12:47.700 | influence. The response has been to turn things upside down,

01:12:51.820 | which is to give those who are lacking in the power structure

01:12:55.580 | everything and to try and take everything away from those who

01:12:58.340 | are at the top of the power structure. So if you want to

01:13:00.860 | deal drugs in the open air, if you want to walk into Walgreens

01:13:03.460 | and steal 1000s of dollars of goods and walk out, nothing will

01:13:06.820 | happen to you, because you were embedded with this powerless kind

01:13:10.340 | of position in life. But if you have a car and you park at a

01:13:14.500 | parking meter, and you say at the parking meter for more than

01:13:16.740 | 10 minutes, you get a ticket. And the consequences of

01:13:19.820 | responding to power dynamics by flipping the power structure

01:13:23.100 | upside down is obviously can be more negative as we're kind of

01:13:27.780 | experiencing, I think, acutely in San Francisco, but also

01:13:30.260 | around the nation. And by the way, I think that this applies

01:13:32.780 | in a lot of other ways in terms of how we're doing college

01:13:34.820 | admissions, in terms of how we're selecting people for jobs

01:13:38.340 | in terms of, you know, recent applications for pilots for

01:13:42.460 | doctors, where the assessment is less about that the person who

01:13:47.740 | was disadvantaged at the beginning of their life or

01:13:50.660 | career or trajectory, or educational path, be given

01:13:54.060 | greater opportunity, and greater resources to catch up and to get

01:13:58.820 | there. Or did we just flip the power dynamic upside down and

01:14:02.020 | just give them the endpoint. And as a result, there's a massive

01:14:05.620 | kind of detriment that I think can arise. And it's not

01:14:08.300 | necessarily always the case that it will arise, it is not

01:14:11.300 | necessarily the case that selecting someone based on some

01:14:14.460 | demographic profiling to be an airline pilot necessarily means

01:14:17.940 | that that airline is more likely to have airplane crashes. But in

01:14:21.540 | certain cases, when you don't prosecute certain crimes, like

01:14:25.300 | robberies, or people walking into stores, or breaking

01:14:29.820 | windows, or dealing drugs in the middle of the street, or camping

01:14:32.540 | on the street, and you fast forward a couple of years, that

01:14:35.820 | power dynamic, the flip of that power dynamic causes the whole

01:14:38.580 | town to go upside down. And everyone who's sitting on the

01:14:41.500 | bottom ends up becoming a victim themselves. And I think we're

01:14:44.180 | starting to see inklings of this in San Francisco, we certainly

01:14:46.620 | have for years, sacks has ranted on about this, with respect to

01:14:49.900 | some of the non prosecution that's happened historically.

01:14:52.140 | And I totally agree with him on those points. And I think that

01:14:55.500 | it's come to a breaking point in San Francisco. But that's really

01:14:58.540 | a beacon for what else is going on. And you know, some people

01:15:01.540 | call it wokeism. I think maybe this notion of wokeism is one

01:15:05.060 | small element or segment of the broader issue with how we are

01:15:08.700 | tackling with and dealing with embedded power structure issues

01:15:12.260 | in this world today. And the flipping of those power

01:15:15.260 | structures upside down doesn't necessarily yield the outcome we

01:15:18.340 | all want. And I think we're starting to see reasons why

01:15:20.740 | sacks any thoughts here? That's my rant. I can't disagree with

01:15:24.180 | you. Yeah. So similar freeberg. I didn't know Bob Lee, but I

01:15:27.700 | know many people who knew him and I was getting texts and

01:15:30.380 | obviously, we feel really bad for him, his whole family, his

01:15:34.540 | kids, his father, his co workers, friends. We don't know

01:15:38.420 | exactly what happened yet. But I think we suspect and I would bet

01:15:42.220 | dollars to dimes that the story is very similar to a case we had

01:15:45.660 | in LA recently, the Brianna Kupfer case, where a young

01:15:49.060 | woman was basically stabbed for no reason by a psychotic

01:15:52.700 | homeless person who had been through the revolving door of

01:15:55.740 | the jail and criminal justice system, who could have been

01:15:58.580 | locked up, who was arrested multiple times, but was not kept

01:16:01.140 | locked up, because of this push for decarceration. And you can

01:16:05.620 | argue that maybe it'd be better for that person to be in

01:16:07.780 | mandatory treatment, or in a even a maybe a mental asylum.

01:16:11.820 | But this idea of just releasing these people onto the street, I

01:16:14.980 | just think is an outrageous abdication of responsibility by

01:16:19.460 | our elected officials who run the criminal justice system who

01:16:23.180 | pass our laws. And the thing I just wish is that I could lock

01:16:26.940 | for 24 hours, the the people like our supervisors, or

01:16:32.700 | governor, or the people who basically make these laws or the

01:16:35.860 | people who are pushing for decarceration of these violent

01:16:38.700 | offenders by these nonprofits, I wish I could lock them up in a

01:16:42.660 | room for 24 hours with the people that they think are safe

01:16:47.540 | to release on our streets. Let's see if they really would take

01:16:52.220 | that test. Because it seems to me that these these elected

01:16:56.380 | leaders, and these nonprofits are pushing for these outcomes.

01:16:59.620 | They are setting loose on us a predatory, criminal or psychotic

01:17:06.300 | element that jeopardizes our safety and makes these cities

01:17:09.860 | unlivable. And we should not tolerate that. And quite

01:17:12.780 | frankly, the responsibility goes beyond those elected leaders, it

01:17:16.580 | goes to all the voters as well, because we keep putting up with

01:17:19.020 | this. And where was our governor when this happened? He was in

01:17:22.300 | Florida, doing some singalong at some high school where he was

01:17:26.420 | trolling Ron DeSantis, because DeSantis has taken on DI at that

01:17:30.580 | school. So that's where Newsom was. And he's extremely popular

01:17:34.300 | in California, culture wars, instead of saving culture wars

01:17:37.260 | in a distant state, instead of basically fixing the criminal

01:17:42.380 | justice system in California, it's even worse than that,

01:17:44.220 | because he's actually shut down two prisons and released lots of

01:17:46.580 | people. So where is the push for criminal justice reform in

01:17:49.900 | California and protecting the citizenry? And until the voters

01:17:54.860 | in San Francisco and California start demanding this, there's

01:17:57.740 | never going to be a change. And at the same time, listen to Gary

01:18:00.820 | Tan, you know, just vote for who are the Gary Tan tells you to

01:18:04.580 | vote for? Okay, I think it's a probably good.

01:18:06.540 | I can't disagree. And this, the supervisor seemed to control a

01:18:10.620 | lot of this. And Chamath shared just this week, Mayor Francis

01:18:15.100 | Juarez is talking about on his Twitter, the reduction in

01:18:18.300 | homicide shootings, and they have literally counted the if

01:18:24.900 | you want to say, drug addicted, mentally ill homeless, there's

01:18:29.260 | obviously three or four different things going on here

01:18:31.340 | when you look at the population that's living on the street,

01:18:33.700 | some number of them down on their luck, some number mentally

01:18:36.820 | ill, some number, addicted to drugs, and some number, a

01:18:39.420 | combination of those things. He seems to be getting it done in

01:18:42.660 | Miami. And, you know, other states seem to and other cities

01:18:47.580 | seem to have gotten this under control. Is there any hope for

01:18:50.260 | San Francisco to Martha? Or is this just going to take five or

01:18:53.060 | 10 years to bottom out?

01:18:54.220 | I mean, it takes regime change. I think New York had a long

01:18:59.260 | period of lawlessness, where people were afraid to walk down

01:19:02.620 | the streets, it took a handful of mayors to draw a hard line in

01:19:05.980 | the sand, to increase policing, sometimes to introduce some

01:19:11.180 | pretty controversial concepts at the time, or at the time that

01:19:14.140 | were supported, which now seem controversial.

01:19:15.980 | You're talking about stop asking for us,

01:19:17.700 | I think it was called the broken windows theory of policing. Yep,

01:19:21.180 | take care of the where take care of the little things so that the

01:19:24.380 | little things don't compound into the big things. But

01:19:27.940 | whatever you believe needs to get done. I think it's pretty

01:19:32.460 | clear that what is being done isn't working. And so the real

01:19:36.340 | question is, can people see through the naked partisanship

01:19:42.100 | to agree that this is not working? And sadly, what I would

01:19:46.620 | tell you guys is that I don't think they're there yet. And the

01:19:51.540 | reason is because America is the most divided it's ever been,

01:19:55.700 | especially on issues of race and social justice and social norms.

01:20:03.460 | And I think that crime has gotten caught and painted with

01:20:08.020 | that brush, which means that the idea of very aggressive policing

01:20:15.060 | and safety are now viewed as opposite and antithetical to

01:20:20.220 | social justice. And I don't know how that happened. But the

01:20:25.220 | result of it is this, which is these folks will never agree

01:20:27.900 | that this is not working. And you'll have to go through recall

01:20:32.220 | election after recall election. And even then, it's not going to

01:20:35.140 | be enough, because the smart politicians will say what they

01:20:40.540 | want, in terms of like, safety matters. But then a lot of

01:20:46.180 | voters will vote the opposite. The example in Chicago that

01:20:49.660 | David brought up earlier is really interesting, because it

01:20:52.540 | was essentially a social justice candidate versus a law and order

01:20:55.500 | candidate through their democratic ranks. And the social

01:20:59.380 | justice candidate won the progressive candidate one and

01:21:03.020 | the person that wanted to tax businesses and individuals one,

01:21:08.060 | and the person that wanted to sort of focus on law and order

01:21:10.780 | lost. So what does that say? It says that we are still in a

01:21:15.180 | moment where we can't agree on what is important. Yeah, that's

01:21:19.660 | really scary. And so I think you kind of have to unfortunately

01:21:23.220 | vote with your feet if you're lucky enough to do so. And that's

01:21:27.020 | the key. Yeah. Who's left over, or a lot of people who are not

01:21:31.380 | in a position to just up and leave. And then they are

01:21:34.820 | unfortunately left behind.

01:21:36.020 | tragic situation all around. And I will never host a conference

01:21:42.540 | or any event in San Francisco until this is solved. Because I

01:21:46.660 | look when people ask us to do events. I'm like, people don't

01:21:50.740 | want to come to San Francisco, they're afraid. So I do my

01:21:52.700 | events in Napa, or in San Mateo,

01:21:54.700 | Nat Nat started a bilingual school, Italian English that is

01:21:58.860 | on the IB system, International Baccalaureate system. And it's a

01:22:02.580 | sister school to a school in the city. We had a fundraiser, which

01:22:05.460 | was literally right downtown in that encampment area. And when I

01:22:11.780 | pulled up, I was like, Is this for real? It's an open air drug

01:22:14.860 | market, where folks are doing drugs, selling drugs right in

01:22:20.020 | front of you. They're passed out completely incapacitated about a

01:22:24.020 | third of the guys are wearing balaclavas. So you can't identify

01:22:27.540 | them, you have no idea what they look like.

01:22:29.340 | I grew up in Brooklyn in the 70s and 80s, when it was legit,

01:22:33.100 | dangerous. And when I walk in San Francisco, it feels much

01:22:37.540 | more dangerous.

01:22:38.900 | Then the that crazy era,

01:22:42.820 | it feels random, it doesn't feel like there's organized crime,

01:22:46.540 | gang crime, like I grew up in a pretty crappy neighborhood. And

01:22:49.780 | you knew who the gangs were, you knew who the tough guys were,

01:22:52.980 | you knew how to avoid trouble, it didn't come in randomly, come

01:22:56.540 | and stab you to death, right? And so yeah, Jason, you become

01:23:00.340 | street smart growing up in a culture like that, because you

01:23:02.340 | know how to avoid it, you know how to be alert. This doesn't

01:23:04.620 | feel like that. This is just like, a bad roll of the dice,

01:23:08.740 | and you could get stabbed to death just walking down the

01:23:10.860 | street that does not. Where Where are the politicians to

01:23:15.700 | stop this?

01:23:16.380 | I mean, they don't care. There's the level of corruption in San

01:23:20.020 | Francisco is unbelievable. The incompetence amongst those

01:23:24.060 | supervisors, the mayor, the DAs, everybody, it's just

01:23:27.460 | incompetence. And nobody has the chutzpah or the wherewithal to

01:23:31.700 | say enough. And I think the other group to blame are all the

01:23:36.020 | rich people and powerful people who just haven't been active in

01:23:38.940 | politics. And I know some of us have in different ways, but I

01:23:43.580 | think it's going to take a coordinated effort by people who

01:23:46.020 | really care to vote out all these supervisors and bring in

01:23:49.940 | it's got to be regime change. And I just don't know if there's

01:23:52.140 | the wherewithal to do because every time as a person who has

01:23:55.540 | some means or is successful in some way that you stick your

01:23:58.780 | neck out there like you have done sacks, the the attacks that

01:24:02.220 | you will get from this insane, left. I don't want to even use

01:24:06.780 | the word woke. I think it's a different derangement. I think

01:24:09.740 | it's actual corruption where they're making so much money

01:24:12.580 | off of this homeless industrial complex. They're getting paid so

01:24:16.180 | much money that the grift is so deep that they are going to

01:24:19.700 | fight for this. And it's going to take some really courageous

01:24:22.220 | people like Gary Tan and maybe David Sachs and other folks to

01:24:26.020 | back a slate of people to change this. And we need people to run

01:24:32.460 | for government who are brave and who want to put their neck out

01:24:34.980 | there and say enough is enough. We're going to police the city.

01:24:37.340 | I just don't know if it is going to happen. All right, listen.

01:24:40.300 | Yeah, I mean, the the issue is that it takes it takes more than

01:24:43.020 | one election. So listen, I think we made a positive change by

01:24:46.420 | removing chase a booty. And I think Brooke Jenkins has the

01:24:49.380 | right attitude. She cares about victims. I think she wants to

01:24:52.460 | prosecute. The issue is that you've got a police department

01:24:56.880 | that 30% of the number of officers that they want because

01:25:00.260 | they flirted with this whole defund the police movement.

01:25:02.740 | You've got the board of supervisors and you've got like

01:25:05.220 | an oversight board on the police that basically make their jobs

01:25:08.260 | harder. And it's not it's not one election because even the

01:25:11.340 | mayor doesn't control it because the board of supervisors really

01:25:14.340 | has all the power in San Francisco. So they take a job

01:25:17.460 | that really should be one or two people's jobs like the DA like

01:25:20.660 | the mayor, and they break it up into this like board of

01:25:24.700 | supervisors where you've now got to be familiar with a dozen

01:25:29.500 | different races in order to effectuate a change. Well, the

01:25:32.580 | machine knows how to do that. But the average citizen doesn't

01:25:35.900 | so they make it really hard to effectuate change. But there are

01:25:39.540 | groups that are springing up in San Francisco like grow SF and

01:25:44.100 | you know, people like Gary, who are on top of it and that's why

01:25:47.340 | just follow them and vote for their recommendations because

01:25:50.740 | they're actually tracking how to make a difference.

01:25:53.300 | All right, I think on that we will wrap for the dictator

01:25:58.140 | Chamath Palihapitiya, the Rayman David Sachs, and the

01:26:01.380 | Sultan of science, David Friedberg. I am the world's

01:26:07.900 | greatest moderator. We'll see you at the online summit.

01:26:10.100 | Love you boys. Bye bye. Bye bye.

01:26:13.780 | Let your winners ride. Rayman David Sachs. And it said we open

01:26:24.420 | sources to the fans and they've just gone crazy with it. Love

01:26:27.980 | you. I'm the queen of Kinhua. Besties are gone. That's my dog

01:26:40.180 | driveway. We should all just get a room and just have one big

01:26:48.380 | huge orgy because they're all just useless. It's like this

01:26:50.580 | like sexual tension that they just need to release somehow.

01:26:53.020 | What? You're a B. We need to get merch.

01:27:00.940 | I'm going all in.

01:27:02.940 | I'm going all in.

01:27:10.940 | you

E123: Trump indictment, de-dollarization, should VCs back Chinese AI? RIP Bob Lee

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