Shout out to a company, Sax and I were doing. What the hell are you doing? What are you doing? What the fuck are you doing? No, I cannot do that. Nick, Nick, cut that shit out. Nick, cut that shit out. Shut the fuck up. Beat that shit out. I just wanted to give a founder a plug.

You are such a scumbag. What the fuck? Despite how tired I am, I've woken up now. Now I'm awake. You've awakened the drug. I'm done. I quit. I'll give a shout out to which just got acquired by. Oh my God. We need plugs. Let your winners ride. Rain man, David.

And it said, we open source it to the fans and they've just gone crazy with it. Love you guys. Nice. Queen of. Hey, everybody. Welcome to the all in podcast. I'm Jason Calacanis with us today. The rain man himself calling in from an undisclosed location. The queen of. And of course the dictator himself.

Chamath Pali. Hopped to you. All right, boys. How are we doing? Feel flow energy today. What's going on? Great. How are you? What's going on? Let's go. Let's do this. I love it. Let's go. Love it. All right. You're hot. You're coming in hot. Well, yeah. Breaking news. Breaking news.

Uh, Biden has announced, uh, his capital gains tax hike. I don't think this impacts any of us. But Biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20% to not 25, not 28, 39.6% to help pay for the social spending. And in equality for those earning 1 million or more.

So nobody on this call federal tax rates could be as high as 43.4%. The capital gains increase would raise 370 billion over a decade. Yada, yada. For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22% in Californians. 56.7%. Biden has previously warned that those earning over 400,000 can expect to pay more in taxes.

This was just breaking news a couple of hours before we started the pod and the stock market is, uh, down and people are freaking out. We should do a. J Cal, I want to hear your take on this. Actually. Why didn't you tell me Biden was going to do this?

I would have voted for Trump. You didn't tell me this is going to hit me so hard. No, J Cal was ranting on this topic 15 minutes ago. We were talking and I'm like, dummy, what did you think was going to happen? You know, he's sitting there going off.

He's sitting there going off. It's like, what did you expect? Just before we get into it, we should do a quick primer on what this means, right? So capital gains taxes are the taxes you pay when you make an investment and you sell that investment at a profit. The, the, you pay a tax on the profit you make, and there's a difference between capital gains on the short term, which means less than one year and long-term, which means you've had the investment for more than a year.

So economic policy historically has dictated that having a low capital gains tax rate relative to what, you know, an income tax rate might make. It might be incentivizes people to make long-term investments and it gets more money moving in the economy. And as a result, um, you know, the economy will grow.

And so the idea of. Yeah. Increasing the long-term capital gains tax from 20%, which it currently is to 40%, um, is a real striking, you know, economic policy shift rationalized as, you know, we're going to save, uh, you know, we're going to use this money for social spending. But I think the historical context and what this is, is really important as we get into the conversation.

Um, and just speaking historically, you know, the, the, the maximum tax rate on long-term capital gains got up to 40% sacks. You probably have the history on this in 19. 78 for a year, right. Or like 76 to 78. And then it's been largely, you know, 15 to 20% for the last 20 years or so.

Um, and so to jump up, yeah. And prior to that, in the early part of the 20th century, it was like 25% pretty consistently for a long time. So to jump up to 40%, it's a really big shift. And there's a lot of debate around the economic implications of doing this.

Uh, I thought that was important. Yeah. Let's take a step back and actually see the forest from the trees and the forest from the trees is that. I don't think. Biden, um, thinks that it's a credible plan. Um, in as much as I probably think, uh, he needs, you know, this is like it's performative, um, because it was a lot larger.

The number, the headline number was a lot larger than, um, what people were whispering was going to be the number, right. It was supposed to be like in the low thirties or maybe kind of like, you know, 33, 34. Um, and then all of a sudden, like to come out of.

39.6, I think it's almost like, okay, he's, he's giving the pound of flesh to, uh, the, the left. Kind of like woke mob of the democratic party who probably doesn't understand how capitalism works in the first place and doesn't care because they're not, they're not participants in it. Now, the, the, my reaction is, I don't think it's going to pass.

I think it's going to be really tough to get done. And I think it probably, you know, maybe, maybe there's a watered down version, but this version, I, I, I'm not sure. I'm not super worried about, and then it just comes back to the same thing over and over the, the fewer, the number of people that get to participate in the growth and see the upside, the more there are that just wants to just kind of, you know, tear it all down.

And so, I don't know, it's just yet another signal that we have these structural issues to fix. It's not reasonable that a few people get super rich and everybody else gets left on the sidelines. Sacks. Where are your thoughts? It's not going to pass, but it's not going to pass.

It's not going to pass. Is it going to pass? Is it an opening salvo? Where he wants to get to 32. So he's starting at 39. I think it could pass because I think they're, they're planning to do this tax increase as part of the second infrastructure bill. It's not really an infrastructure bill.

They're calling it human infrastructure. We've talked about this infrastructure is one of the last categories of federal spending. That's still popular. So they're rebranding a bunch of social programs as human infrastructure. I think that bill will pass. I don't know if the rate will stay at 39.6, but I think there will be a big increase.

Clearly in the cap gains rate. I mean, I think it's worth remembering how it got to 20%. It got to 20% because Bill Clinton lowered it from 28 to 20 as part of an overall package of tax reforms that he did in the, in the sort of the mid nineties.

And, you know, that led to some of the best years of economic performance, GDP growth in the U S productivity growth deficit reduction. You know, and so, you know, I think we're, we're, we are experimenting with breaking something that's been working, I think pretty well since the, the Reagan Clinton years which is to have, you know, reasonably low taxes on capital formation and investment.

I think it's a category error to treat capital gains or to think about it just as income. You have to remember that all of this money has already been taxed once, right? So you make the money the first time. As income you earn it, you pay tax on it.

Then you decide to save some of it and invest it. And then you get taxed again on that amount. And so, so capital gains is a form of double taxation. That was the original reason. One of the reasons to have a different tax rate for it. And you know, I think that this risk kind of messing up the economic recovery that's really underway already.

By the way, think about what just happens to any organization. I mean, you know, you have a lot of people in the organization that has to pay cap gains, right? It's not just individuals. Like last time I checked organizations aren't exempt from cap gains for profit organizations. And I don't exactly know what they will do as well.

So, you know, you, you, you're putting a lot of people under a huge strain when you double the, the, the effective rate of return. So, you know, if you're, for example, like a pension fund, right? And you have an enormous investment in, in a private equity fund or a hedge fund.

Part of these things is that, you know, there are these complete pass through vehicles. And so as long as like you've structured yourself in a way where you don't have to pay that tax, I think, I guess you're indifferent, but if you're any organization or institution or a person or a collection of people that bears that tax, all of a sudden, you know, your returns have been basically cut in half.

That's pretty nuts. Let's talk about the average Joe for a second or Jane, as it were. 401ks would take a hit here. And then when you go to your retirement and you have to liquidate them. You know, you don't pay tax on the, on the gains. You don't pay tax on that.

Yeah. You don't pay tax on the 401k gains during your. Otherwise your portfolio, because 401k is going to be a small amount. You can contribute to it in a year. So retirees who happen to have stock market gains or cryptocurrency, people trading that. Yeah. You'll basically pay the same as income tax as opposed to paying a lower tax.

So would a. It'll diminish investment, Jason. It's exactly what David says, which is that. On the, on a marginal basis, what will happen is inflation probably goes up because people just decide to consume rather than invest because they think, well, what's the point? You know, there's already risk that I bear.

And so, you know, the, the earliest risk assets, right? The riskiest ones that we all participate in, which is early stage venture and company formation. There's you, you may not be thinking about the capital gains rate, but it's implicit in the returns that you're expecting for the risk and the time you're going to take.

And, you know, we've been trained to feel that rate. And if you double that rate from 20 to 40, I suspect that there's a lot of people whose risk tolerance changes and they're going to feel their after-tax gains differently. And they'll wonder to themselves, is this worth it? And then I think what happens as a result is entrepreneurship drags.

I don't know if anybody's done an analysis, but I suspect part of the reason why America is such a, you know, an amazing like sink for capital, right? It absorbs capital all around the world is that. You've created incentives that get people very excited because they think they can get rewarded.

If you take those rewards away, I think the implications are much bigger than just the cap gains rates here, because as the people change their behavior, then the capital formation pools outside of the United States changed their behavior. And the whole thing has a knock-on effect and it was more muted in Clinton.

It was less muted in 78. It basically didn't exist in the forties and fifties, but it is a huge force today. I mean, like we are an indebted nation that owes money. We owe money to all kinds of countries around the world, including China. We're supposed to generate growth and sort of pay it back.

And where will the growth come from? If LPs don't want to back venture funds or venture funds, but let's be honest and check out. Let's be honest and direct. I mean, are any of you guys going to change your investment behavior? If the cap gains tax goes to 40%.

No, but there'll be less of it, you know? Yeah. So look, anything, anything. My behavior has changed. I think my behavior will change. Yeah. How will it change? I think it will change. It's exactly what David said. So I just put in a hundred million dollars into a climate change company two weeks ago.

Under this promise, I could only put in 50. So there's 50 million less progress that's going to happen on that business. I'm not sure that that was, that's the right answer for what that company is trying to do in the world. And the way you're saying that you're saying the profits you would have had from before are diminished in half.

Therefore you would only have half as much money to invest as an investor. Right. So, so however way you want to cut it, whether it's. Like the 10 companies gets cut down into five or the five, 10 companies that I invest in, get half my money. The point is at some point.

The money starts to run out, not just for me, but for everybody else. Yeah. Basically at the end of the day, the money goes into the hands of, you know, government legislators and administrators to decide how that money gets spent. And it's not in the hands of, uh, capitalist investors to decide where to invest.

That's the fundamental kind of. Shift that that's going to happen. Right. Capital capital has been. Taken out of the economy. Risk capital has been taken out of the economy and it's now going to be, you know, spent by, by government. Look, any, anything that you tax you punish and disincentivize and anything you subsidize, you, you create an incentive for there to be more of.

And, you know, so this is just, we, we always talk about these things in terms of, well, who they're going to hurt. Is it the, the, or the, this only falls on the backs of rich people. Um, so we shouldn't care, but the real question is what is this going to do to the economy?

And, you know, I think we've talked in previous podcasts. The, the last part that we have with Brad Gerstner, it feels like everything. In the American system is kind of broken except for one thing, which is this sort of opportunity economy. That's that's been created by risk capital, right.

And, and people creating new companies, you know, like these big stultifying political corporations, the S and P 500 are completely broken. Government's completely broken. The federal debt is out of control. Everything's the media is broken. Everything in America is either broken or needs to be revitalized. Or reformed, except one thing is working really well, which is risk capital and its allocation to founders who have nothing but a good idea.

Right. And when all of a sudden you double the cap gains rate, that is an attack on that opportunity society. Now, I think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people. I think like Brad framed it really well in the last episode, like, how do we get more people involved in that?

I would submit the answer has a lot to do with. School choice and charter schools giving people, everyone in this country deserves to have a first rate education. And so that is a very legitimate conversation to have, but I think to have punitive taxation on it is I think it's at risk breaking that last thing that is working so well in, in, in the American system.

I, I think it's really well said. And I think this is gonna take redomiciling to another level. I mean, if you were in New York or California right now, and you were thinking about Wyoming or Utah or Texas. Or Florida. I mean, this kind of makes the decision for you if it does go to 40 and because that's actually me, would you get to neutral if you left?

And so I, well, I remember, I remember when I moved to the United States in 2000, the marginal tax bracket that I was in and I was making maybe, you know, a hundred, no, I was probably making 80 or $90,000 a year was 55%. And I remember coming to the United States.

And seeing my after my take home pay my first paycheck. And I was shocked because I was like, you know, I was paying maybe 36% all blended in federal and local at the time or state at the time in California. And slowly, slowly, it's creeping up with, with, if you play it out today, where we are plus New York state just passed laws.

You're gonna be sort of in the 50 to 55%, almost upwards of 56% for certain folks. And maybe the answer is that's the right thing. But I think we have to acknowledge that that's. There's going to be a bunch of unintended consequences. So maybe the intended consequence is to actually create more equality between the richest few and, you know, not even the poorest, frankly, because but it'll just be the richest few and the next richest few, quite honestly, because like, you know, the investing class is still a small number of people.

But the unintended consequences of that decision, I think, is what exactly what David said, which is that over the next five or 10 year period, you will, at a practical level, see less investment. And the the only way to make that whole is if the government then takes all that money, and all of a sudden allocates it from their own coffers back into the economy.

And we know that that's not going to happen. Well, right, that's just going to be riddled with waste and graft and corruption. So unfortunately, the setup is that, you know, you're going to really impact entrepreneurship. And then and then I wonder to myself, by the way, guys, like, what was the actual goal of this, meaning there was 20 or 30 guys that were just making so much money on their equity.

But then that's then then we need to blame like the these lists like the Forbes billionaires list, because those are inaccurate, because a lot of these stuff is like, unrealized, realized paper gains. Right. And so they're not they're not paying any capital gains, because they haven't sold anything. And most of these guys that are uber uber rich, you know, have no desire to sell because it's for them.

It's a control issue to sell. I'm not sure the car I'm not sure that the consequence of taxing uber rich people is the true motivation. I think for some people, maybe it is. But if we just take a step back, I mean, a year ago, the US debt level was significantly lower than it is today, we've taken on a tremendous amount of federal debt to fund a series of programs that we believe we're going to kind of keep, you know, the American population employed and keep our economy moving.

That was a massive burden we accrued and in the past year, so ultimately, over time, the only way to kind of support this, this new federal budget, and you know, the this new servicing costs that we've taken on at the government level, you really only have kind of like three options.

Option one is you're going to continue to raise more debt and massively kind of inflate everything and the dollar declines in value. Option two is to reduce spending, which means starting to cut these programs. And option three is to raise taxes. And it's pretty clear that option one is one where we're kind of already at the economic limit.

And option two is going to be very hard to swallow at a time like this. So you can't just cut spending right now. Across the board, so many aspects of the US economy and so many individuals in the United States are dependent on the federal government for support. And so option three is the only real one that's left on the table.

And so then the question is, who are you taxing, you're not going to go tax the people that are struggling, you're going to tax the corporations and the wealthy. And then the capital gains tax is the one place where you can kind of say, look, the tax rate that you're paying today is half of what an income tax rate would be if you were earning that as income.

Let's get it to be fair and even. And I think just just to argue this other side, like there's a motivation, there's a there's a point of view where this is coming from. It's not just let's go tax the rich, screw the economy. It's that we find ourselves in a circumstance where we need to do one of those three things.

The most rational to do is to or the most kind of sensible politically to do is to increase taxation. And this is the first place to go the most obvious place to go. It's not because so when you think about like, so for example, like, you know, you would say, okay, who are the folks that we're talking about, there can be entrepreneurs that are building companies, again, they're never selling, so they're never going to pay these taxes.

Like it's not the case that Elon Musk or Mark Zuckerberg is all of a sudden going to write a $40 billion check because that's, that's not how much they make. That may be how much they're worth, but they will never sell a single share unless they have to fund some other project, in which case, three things would you do?

So, so what I was going to say is, so, and then and then you look at somebody else, like, maybe you say, Oh, well, you know, the people that manage money, like, let's go after those guys, because like, those guys shouldn't be, you know, rich. But then the problem is, those guys are already paying w two income, they're already paying nominal income tax rates.

That's how the entire hedge fund industry works right now. You know, you get paid in current income. And so, okay, so you're not getting their money, because they're already paying at the prevailing rate. So again, this goes back to if you actually trace the problem and see who it affects, it's exactly what David said, it's these folks that are in the middle, that are actually putting the money to work, that are trying to invest in things that now have a very different return profile.

And you're right, the core business that they do, they may still keep doing, but then all of the incremental things in the future that they want to do, they won't do for example, look at all of the talk right now about how everybody needs to stand up, you know, more angel investing, more minority investing, more women, GPS, all of this stuff.

Well, all of the folks, let's just be honest, all the folks that are in a position to put money into those folks are now 50% on a dollar rated basis poorer if this thing passes. And I bet you what they're going to do is they're not going to cut their allocations in Sequoia.

They're going to cut their allocations to all these other folks. Yeah, that's exactly what I was thinking, Chamath is, I was it going to hurt it's again, it's going to hurt all the people that you want to get into the game. It's going to hurt all the people that are here.

But the richest richest rich folks that is not unless you expropriate the money from them. You're not you're not going to get a single cent. And then that was the that was the concept of the wealth tax wasn't it that you would take the total value what you have and just take away 1% a year from Bezos is you know, or Zuckerberg's $100 billion.

So would that not have been a better solution than this if you had to pick one a 1% wealth? That's just that's a people over whatever, Jason, then then we're no better than a banana republic that could also expropriate a mine, because we don't like the way that the mining is happening or you know, another critical asset because the government does decide that it's important.

I mean, what's the difference between a stock and any other asset that either a person or a corporation owns? It's, it's it's very, I think that the definitions are thin. They're all the same things at the end of the day. Let's go back. Let's go back to the federal budget problem.

Like how do you address it, Sax? I mean, what's the right course here? What I think is amazing is we're we're about to spend we're raising this hundreds of billions of taxes in order to fund you know, trillions of new spending. I don't really hear the administration's voice. I don't really hear the government's voice.

I don't really hear the government's voice. I don't really hear the government's voice. I don't really hear the government's voice. All we're really talking about is that there's too many rich people, you know, we have these millionaires and billionaires, we got to tax them more. And so all we're really talking about is whether it's appropriate to be punishing the rich and super rich.

We're not really talking about where's this money going? Are these programs just fine? What do we get out of it? Exactly. And my point is, forget about like who it's gonna hurt. I think it's eventually gonna hurt the economy. And the question is, what do we get out of it?

And I think what's amazing is, this isn't even paying for the big ticket items on the progressive wish list. We're not getting to universal healthcare with this. We're not getting to universal higher education. We're not getting to any of the, we're not getting to like forgiveness of student loans or anything like that.

We're not getting to any of the really big ticket items on the progressive wish list. And yet we're maxing out the taxes relative to anything we've done historically. And so where do you go from here? You know, because this is just the tip of the iceberg in terms of the progressive agenda.

Doesn't that speak to the problem? Like the fact that we have such an extraordinarily high debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make ends meet effectively, right? I mean, because our alternative again, is to just let massive inflation run, you know, issue a ton of new debt or to cut spending.

No, no, no. But David, either of those seem to be on the table. No, no, no. You're going to exacerbate this issue. I'm telling you, I know it doesn't seem likely, but I think on a marginal basis, this will be an incentive to spend. And the reason is that it's a very frustrating idea for somebody to think about putting money in the ground, especially a sophisticated investor at a rate of return that just changed in half.

And so from my perspective, I would be more likely to spend because I would rather just YOLO the money than I would rather put it into the ground because I would be worried that that could then get taken away from me. It could also change even further and further.

And I think that's a very frustrating idea. I'd rather take a vacation. Again, let's go back to the example. I'd rather take a vacation with that $10,000 than go on to Jason Syndicate and put it into the hands of folks because I'm just like, you know what, it's going to turn into even if Jason hits it and I get back, you know, I'd rather just go on vacation.

Enough of those decisions. And I think you have a very different kind of economy. You have, you know what you have? You have what everybody else has. So do we reduce spending? I think you have to reduce expenses. I think that we have an infrastructure that is not well accounted for.

Meaning if you're a company, you can go to a company like Tableau, you can go to a company like, you know, pick your pick your metrics company. And within, you know, a few weeks and months of work, you can literally understand where all the dollars are, right? You can understand your business and you can figure out where money is being wasted and where it's not.

In a government that's impossible to do, right? Because you have these laws and these laws are artificial constructs that we construct. And those artificial constructs are influenced by money in and of itself. And so these dollar flows are impossible to map. So you don't know where it goes. So for example, the $700 billion budget in the Pentagon, does anybody have any idea what the ROI is on that?

Or even a way to measure it, like even to actually make it simple? What like if you were if you had $700 billion of investment capital, the market has a really simple way of saying, Okay, David, what's your ROIC? What's your return on invested capital, and you can say all kinds of fancy things, you can have all kinds of fancy projects or simple projects.

But at the end of the day, what is measurable is a dollar in and what that dollar grew into. And that's a return on invested capital, it is impossible to know that. And so you know, we could say, for example, you could define it and say, Well, I'm going to basically get every single person to graduate high school.

And now I'm going to spend $500 billion a year to make sure that the graduation rate is 100%. That would be an incredible goal. You know what, that is absolutely measurable, right? And and you'd be able to back into all of these programs and the one that's ones that didn't work, you'd cut, you know, and you'd end up with what David said, which is school vouchers.

I mean, just I think I think the absence of that accountability, Chamath has led us to a scary dilemma. And the dilemma is over 10 million Americans are directly employed by federal government. And a large swath of the remainder of the economy is supported by federal government spending, which is basically your point, right?

So large, large amounts of defense and military construction, health care and pharma, I mean, the list goes on, but like the direct employees of the federal government, plus the amount of revenue that depends on federal spending is so significant now, as a percent of the total income generated by Americans, that it is very hard to say, like, let's create accountability in a system when so much of the economy is functionally dependent on it.

Am I missing something? Sachs? Like, I mean, isn't that the circumstance we're in right now? Yeah, I mean, the thing that like, is amazing to me is, you know, I lived through the 1980s and 1990s, like, like, you know, it's like, you know, you're a business owner, you're a business owner, you guys did from 1982 to 2000.

That 18 year period, we had sort of an unrivaled economic performance, it was roughly around, we had two bad years under George Herbert Walker Bush, that's why he lost reelection. But we had close to 40% growth in GDP. Every year, we had great productivity. And we had massive deficit reduction.

It's the last 4% a year. Yeah, and we and we had we actually had government's surpluses, budget surpluses. Yeah, we had a lot of that. Yeah, we had a lot of that. And, you know, we had a lot of that. And, you know, we had a lot of that.

And, you know, we had a lot of that. And, you know, we had a lot of that. And, you know, we had a lot of that. And, you know, we had a lot of that. And, you know, we had a lot of that. And, you know, we had a lot that.

And, you know, we had a lot of that. And, you know, we had a lot of that. And, you know, we know that works, you know, we know that works. I and you know, somehow we've moved away from what we learned in that time period, because, you know, I think the the left in this country has has become kind of, you know, has embraced this, we're saying the same thing, you set up the incentives for people to invest, they do, if you set up the incentives for people to spend, they will do that as well.

And I see this, I think Chamath is exactly right, there are a lot of people and you use the example of the syndicate.com. When I do my syndicate, deals, there are people who are recreationally saying, you know what, I love the idea of putting five or 10k into a flyer, they're gonna, you know, half of them will go away a third of them, all these people who are, you know, involved in day trading, or crypto or real estate investing, they're gonna look at and say, Is this worth the time?

Or is it worth this amount of time, maybe I'll cut back from doing 40 hours a week of this to 20. And if you look at what happened, crypto people, they went to Puerto Rico, you look what happened to venture capitalists and CEOs, they went to Florida, Miami, Austin, New York, this is gonna, if it does pass, you could be pushing people to Singapore.

Well, we have another very complicated problem. And this is what freebird brought up, which is, and I don't know the answer, David. So I'm trying to I'm actually talking around your question, because I think it's a it's, it's the right absolute question. But think about this, what happens in a world where now let's just say that the revenue of the government goes up, right?

But outcomes stay the same or get worse. And at the same time, and you could claim that that's effectively what's been happening over the last 20 years. 20 or 30 years, right? Government revenues have gone up, impact to stay the same or probably been net negative. But then at the same time, you have this, you know, program of quantitative easing, where then you can essentially print money on demand.

And when you think about that, it's like, wait a minute, I am giving you money. But then then you are also going to the photocopier machine with my money to make more money. And all of that total money does less than what it did when it was half that or a quarter or a third of it.

That's a very scary real ization, I think that people, you know, will eventually come to. And I don't know what the answer to that is. I, you know, I think David Saxey, who said it was just like, you know, the states are this incredible a B test, right? Because you get to test like theories, right?

And you have you have now every complexion of theory, you have like, you know, the low tax dates, the no tax dates, the mid tax dates, you have high real estate taxes, low real estate taxes, high estate tax, whatever, you get every grab bag of incentives. And you're going to see but the problem is that was assuming that the federal government kind of mostly stayed out of the way.

Right? You have this massive overlay. Yeah, I just posted a chart in the chat that Nick can put up, which is federal spending, federal outlays of percentage of GDP. And it's really interesting, because federal outlays of percent of GDP have generally been around the 20% line plus or minus a couple of percent since you know, the 1980s.

And last year, in 2019, it was 20.7%. It jumped to 31.7%. It was 2.3% under COVID. And it now feels like we're trying to make this new level of, you know, going from 20 to 30 permanent. It's like mask mask wearing. Well, the the problem. The problem is the only time we did that in history was in World War Two.

Now we were trying to fight the Nazis, which was worth spending the money on. Yeah, I would say that was a good use of capital. But it's very step back, right? I mean, what starts out as temporary becomes permanent? Is that kind of the concern? Well, that's what that's what Milton Friedman said is there's nothing quite so permanent as a temporary government program.

Right? Right. But but what they're threatening to make permanent is this new permanently higher level of federal spending in the economy. And I think it's a very dangerous experiment because it either takes tremendous money printing to support it, or a tremendous tax burden. And neither one of them is good for the economy.

By the way, you know, again, when Bill Clinton left office, I remember, you know, you can go to the time machine for whitehouse.gov when he left in 2000. And he bragged about how his eight years as president, they reduce federal spending from 22% of the economy to 18% of the economy.

Can you imagine a Democrat today boasting of that? Or even a Republican? I mean, what? Who was the guy who was your guy who was like, the Tea Party people who there was somebody who was like in charge of the Senate? Rand Paul? I don't know who it was.

But it was just like, we got to cut spending. Oh, yeah. Ryan, the Speaker, the Speaker of the House, Paul Ryan. Yeah. Paul Ryan was like, based on this. Yes. But spending restraints kind of gone out the window and in both parties, and the Republic, it did, it did happen under Trump, the Republicans don't seem to find their principles on spending unless and until there's a Democrat in the White House.

So they definitely deserve their share of the blame on this. But But we do seem to be entering a new territory here of you know, this, again, levels of spending we've never seen before. It's incredible. It's absolutely the problem. The problem is, it would be so much better if we just said we're going to do this one very specific thing.

With a huge number attached to it, like I would rather say, we're going to Mars, here's a trillion dollars, we're cutting student debt, here's a trillion dollars, we're going to double down on cyber, and we're going to get, you know, completely pivot the military or something. And here's 500 billion, whatever, something aspirational, that is not just anti rich people.

Let's tax. Right now we have we have labels, we have a label. And then we have a spaghetti mess of spending that just isn't really attached to what we're doing. And that's why we're doing this. And then we're what the label means and none of it is accountable. And so you don't really get anything for it.

I know this is a silly question, but why wouldn't we test this and say, "Hey, 20, 40, there are numbers between these two, maybe we'll increase it two percent a year for eight years, and we'll see what happens." I'm sorry, but Jason, this is the other problem with like this idea of American exceptionalism, we believe that we can't learn anything from anybody else and that's also not true.

We actually know what it looks like when you have government as a massive portion of the economy. We also know examples where government basically enables human capital outcomes but remains relatively small and fixed. Singapore, there's this incredible example where I think right when Lee Kuan Yew became the head of Singapore, the GDP of Singapore was the same as the GDP of Jamaica.

What you saw was this complete divergence in these two countries. And think about this country, which is basically this little spot of land surrounded and apolitical, areligious, surrounded by these Muslim countries, and they still thrived and they kicked ass. They were never invaded, et cetera, et cetera. And underneath that was this belief that it's what you said, Friedberg, where you focus on an outcome, you spend against the outcome, and you try to measure in a reasonable way, and you double down on the things that work.

Jason: And then on the other hand, if you look at Europe, Europe is a good example when spending sometimes for the greater good in the best interest can run amok. And really what happens is you start to stagnate. Yeah. And Singapore is only what, six million people? I mean, it's like Ireland or Norway or Denmark.

I mean, this is not a huge place. It sounds like we didn't solve any problems in that last piece. Yeah, we didn't solve it. I mean, what do we think is going to happen in four years? Does this give Donald Trump a clear path into office if he said, "Hey, we're on lower taxes again?" The worst case scenario is you see what happened in France when they had that 75% super tax, and then they introduced the wealth tax, and they had massive emigration of invested dollars out of the country and people out of the country.

They did get rid of George D.A. Pardue. That was a bonus. He went to Russia. Yeah. Yeah. At what point... How many red pills do you guys have to take before you're willing to reassess your political party? Because it seems obvious to me... Now look, we could talk about how bad they're...

What political party do you think... Hold on. Hold on. We could talk about how bad the Republican Party is, but there's no question in my mind that the Democratic Party, all the energy, the base, the activists, and the politicians who have the microphone, they are woke socialists, okay? That is the dominant ideology in the Democratic Party.

And what Biden is doing right now is catering to that. He's compromising with it. Yeah, but he wasn't catering to that until this point. He didn't put Bernie or Elizabeth Warren into any cabinet positions. He kind of marginalized them. And now he's like, "Okay, let's do something." I mean, would Warren and Bernie have done this?

No, but Jason, I think you're right. This is why I think this is like a sacrificial lamb, and I don't think anything's going to happen. I think Biden is a fundamental centrist. That's why I like him. I think he's a... Boring. He's a stable, predictable figure. And that's, I think, what you want in the presidency.

I think that this is sort of like, "Okay, you guys want a pound of flesh? Here you go." But I think he's so politically smart that he probably does have a bunch of millennial woke socialists. He's probably the only one there who's smart enough to realize this won't get passed.

It's not going to muster enough support. I don't know. I think I... Biden is not governing like a centrist right now. He's proposing, what, four trillion of new spending, new tax increases, and he's just getting started. But look, and I would challenge this idea just slightly of him being a centrist.

What I would say is he's always tacked to the center of the Democratic Party. So I do think he's a triangle between the two. I think he's a triangle between a triangulator and a calibrator. He's not like a conviction politician the way that Bernie Sanders is or an Elizabeth Warren.

But what he's tacked to is the center of the Democratic Party. And the center of the Democratic Party has moved very far left because all the activists have moved to the left. And so he's been dragged left. Remember, Biden was Clinton's floor manager in the Senate when he passed all this legislation.

And so now Biden is very far to the left of where Biden was in the 1990s. And the reason for that is because the Democratic Party has moved. So once again, I guess my question to all of you guys is, what does it take? How far does the Democratic Party have to go to the left?

Not Donald Trump. Okay. Not Donald Trump. I wouldn't call this- That's the problem is Donald Trump. I wouldn't call this as much of a radical policy shift as I think it's being framed. I honestly think this is a natural and inevitable consequence of the circumstances we find ourselves in right now with respect to the spending level, the dependence we have on federal spending across the board with respect to individual employment and the the economy, the need for a variety of social services to get us through this COVID economic collapse.

I just don't see another way out. And I feel like it's the natural course to do exactly what's going on right now. I think it's going to pass. I think something like it's going to pass. I think something like it's going to pass, but I don't think it's going to pass.

Yeah. Where do you put it at? You think it's going to be equidistant? I'm not saying it's good or bad. I think obviously we just find ourselves in this circumstance in this country in this moment in time, that this is the only path. I'm just not sure you can go in and go slash a ton of spending right now.

And anyone would win reelection or most Americans would be anything but unhappy. It's just the consequence of where we are. Let's play the glass half full. Here's a crazy idea. For example, somebody like me, what I would think about, which I think is a little crazy, but I would do it is, okay, I'm just going to move literally every single thing, every dollar that isn't nailed down into a charitable vehicle.

And I will invest through my charity, because I still have to donate 5% a year. But then I can compound tax free. Now, I care more about the businesses that I'm a part of and the progress that I can create. So that may be okay. And I'll just pay myself a salary to like fund my lifestyle.

But that could be a way around this. To me, the biggest issue isn't how much money I have personally, the biggest issue is how much money I will have to put back into the world. And the idea that then it goes to a place where it's profligately spent in a way that isn't accountable really bothers me.

That idea bothers me a lot. David, that would cause me to attack, you know, more even more to the right if I could find somebody who understood that principle, because what I don't want to have is, you know, in the absence of social programs, like the problem that the republicans leave is this no man's land where then you're forced to believe that this one man for yourself, it's all about you, you can figure it out, you know, the rugged individualism.

That's just not realistic. Like I, I completely agree with you. I think that's a really good point. I think that's a really good point. I think that's a really good point. And I think that's a really good point. And I think that's a really good point. And I think that's a really good point.

And I think that's a really good point. And the problem is that republicans don't give you that option to have then accountability on spending. And just somebody please just say that I don't care what you call yourself. Yeah, well, look, I think, you know, the I think republicans have gotten a lot more comfortable with the idea of entitlements and the social safety net.

I don't really hear anyone opposing that anymore. I mean, it's the same things happened with like the Tories in England. No one's really trying to roll back the social safety net. We need a republican message to come forward and say, listen, we don't care, you know, who you love, what you smoke, where you're from, what you look like, you know, we believe in an opportunity society, we want to spread that option to everybody.

But ultimately, opportunity comes from the private sector, we're going to have a strong social safety net. And we're going to basically give everybody the most opportunity to participate by giving them a great education. That's basically what the agenda should be. Yeah, I'm in. I'm in. I mean, to your point, Even the starting line.

Hallelujah. I like it. I mean, I would, I've The problem is your boy tried to dismantle Obamacare, you know, unfortunately. The problem is Trump, like Trump, I'm a never Trumper, obviously, but I'm kind of purple, I would, you know, I'm considering Austin or Miami as a place to locate myself.

And a decision like this makes it easier. I would never do that. I'm actually very, I love Texas. I love Austin. Austin's the kind of purple I like. Like I like personal freedom. And I like what you're saying, like love who you love smoke what you want. What year did you move to the Bay Area?

Five, six years ago. I was in LA for 10, New York for 30. I feel like it's a last in first out thing that's going on right now with respect to immigration out of California. Yeah. I've been here since 2000. I'm not leaving. Yeah, I've been here since I was six years old in California, and I'm not leaving.

And I've been in the Bay Area since college. So I'm not, you know, I feel like it's a lot harder to leave when you've been here longer. It's a lot easier to leave when you've been here less time. That certainly seems to be the pattern I've seen amongst friends and colleagues with respect to leaving the state.

All right. The Chauvin trial came back guilty all three charges. What is there to even talk about here? What is there to talk about? I don't even know. I mean, I feel like we should. Can I give it, can I give a shout out to a really good friend of mine?

His name is Neil Kotschall. He was the former Solicitor General under Obama. He, he was one of the prosecutors that worked on that. He's a, he's a partner at Hogan's, runs a Supreme Court practice there, but basically went and did this pro bono trial on behalf of the state of Minnesota, working with the, the district attorney.

And I'm just, I just want to say Neil, proud of you. It's an incredible thing. Thank you for keeping America safe. Okay. I mean, you know, what's crazy is like, but then, you know, the same day there was a shooting of this, this unfortunate shooting. And I was like, I'm going to go to the Supreme Court.

I'm going to go to the Supreme Court. I'm going to go to the Supreme Court. I'm going to go to the Supreme Court. I think, I think she was 16 year old, 16 years old, this black girl in Ohio. And then, you know, LeBron tweeted something out and then LeBron had to basically delete the tweet because it was causing people to go absolutely crazy.

Well, I mean, each of these situations is unique. And in that situation, somebody was going to stab another person. The cop didn't know what was going to happen. And, you know, in another time period, like maybe that would have been saving somebody's life who had potentially been stabbed and, you know, the George Floyd, I think he had a real life story.

I think you got to reserve judgment on each of these until you get all the information. But the information here was just super conclusive. Like the gymnastics, Ben Shapiro, and some of these far right people had to go through to say what you saw in George Floyd being murdered was not what happened.

Well, that's, that's performative theater trying to get people to watch something. And it was, I mean, it was just gross to watch. Might as well call it what it is like that's acting. I feel like probably if anybody, if any one of us found Ben Shapiro in a bar and just hung out and had a beer.

Yeah. You'd find out that he was like, he was like the Meryl Streep of our generation, you know, like this incredible actor. What does that mean? Like an incredible actor. Well, no, I mean, I think Scott Adams and his podcast, all these guys are just trying to figure out how to say that this was a travesty of justice.

And I'm like, I don't know what you saw, but. Yeah. Let me explain where they went wrong. Okay. So, so look, I, I, I agree with you guys. Fundamentally, this was an easy, look, this, this was, uh, you know, a finding a fact by the jury. Guilty on all charges, obvious, right?

The tape shows it, his, uh, the Chauvin's, uh, record as a cop, numerous complaints, you know, this was a bad apple. This was a bad cop. He deserved to be convicted. End of story. That's really the analysis should end. But of course the people on cable news would have nothing to say if that was the end of it.

And so look, I think both the right and the left kind of went off the rails on this where you're the right kind of went off the rails is you had, well, yeah. I mean, I think the right kind of went off the rails is you had, well, what happened is you had Maxine waters, you know, come out and while the jury was still deliberating, she was basically calling for activists to get more confrontational on the streets.

If the verdict went the wrong way. And so then the defense helpful, not helpful. Right. And so the, so then the, the defense made a motion saying that, uh, this, this was affecting the deliberations. There was no proof of that. The jewel, the, the judge ruled against that motion, but he did.

The judge reiterated his desire for the politicians. To stop talking about the case. Right. And so then what happened is the right-wing commentators were criticizing Maxine waters and implying that, that there was an effort to try and coerce the jury. And there's no proof of that. Right. And, and, and, and I think there's the mistake is in somehow framing the Derek Chauvin as like a sacrificial lamb to the mob.

He was not, he was guilty. He deserved it. That being said, I do think that the judge had a point that it would be helpful if these politicians would just stay out of it, stop commenting on it while the jury is deliberating. I think there was a legit point there.

Um, but you know, the, the, the, the left made some, some weird comments as well. You had Nancy Pelosi made this really bizarre statement. That was very strange. I think that was like a slip up of like, just trying to say something, not, I mean, being charitable, she was trying to say something nice that George Floyd is going to create a wave of justice.

And that would be, that's, that's, that's, that would be, that's a great idea. She said, yeah, she said, thank you, George Floyd for sacrificing your life for, for justice. Yeah. That didn't come out exactly as she intended. No, no. I mean, because look, George Floyd did not go out that day intending to be a martyr.

Um, no, you know, and, um, and so it, it, it sort of gay, it expressed kind of what she's thinking, which is how am I going to use this politically? Uh, you know, train pretty gross. I think you're right. It came out gross for sure. I think that's how they're trained.

It's kind of like, you know, if you, if you take a finely tuned athlete in a sport and give them, you know, they're, they're just, they're reactive because they're so instinctual. I think it's kind of like this, she's an incredibly finely trained athlete and her domain is politics. And so, you know, what is that phrase?

Uh, uh, every crisis is an opportunity kind of thing. So I think, yeah, I mean, they all flew there to be there for the, for the trial, et cetera. And that couldn't have helped the judge with, you know, the impartial jury and maybe that causes a mistrial. I mean, I don't know, David, you were an attorney.

Is there any chance on appeal that a maxi water quote like that could result in. Well, the judge, the judge actually said that, that the defense could reserve that issue and use it on appeal. So yeah, they could use it, but I, but I don't think it's good. I don't think it's going to work unless they can prove that somehow the jury was contaminated by what they were hearing on TV or something like that.

The judge's instructions were pretty clear. Like I watched a couple of the ending days and he's very clear. Like he's like, guys, I don't want you to watch the news. You know, there's stuff like that. He was very directive in making sure that they tried to be as uncontaminated as possible.

So I think the surface area for an appeal is pretty thin here. The fact that the police chief and everybody who worked with him said like, this is not standard this, and they just threw him right under the bus. They didn't want to be associated with this in any way.

By the way, well, you know, they're, they're not going to be able to hide much longer though. Cause the DOJ said they're over, they're, the DOJ said they're opening an investigation at the Minnesota police force. So I think they're just trying to crack open the police reform in that state and just get those guys on the right side.

And it's going to be, you know, again, here's this other issue where it's like, okay, this is where like there it's very difficult for the federal government to do anything, but you know, so whatever they try to do won't really result in what, what you want to have, because every state, again, Jason, to your point has completely different political ideologies.

Nobody wants to behave the same. Everybody wants to be independent. Everybody wants to get reelected as not kowtowing to somebody else. And so you just don't get these consistent outcomes. And then people are forced to vote with their feet and move across the country, you know, to get a bunch of simple things that I think should be pretty consistent across the entire country.

The thing that I found particularly deranged was these people who are like, listen, he's a fentanyl addict. He's an opioid addict, which by the way, there are tons of affluent people. Everybody in this country is addicted to opioids. Fentanyls are everywhere. And then you're trying to say like, because he had that addiction, but in some way that negates the person kneeling on his back while he's in handcuffs.

Like you're you have a duty as a police officer to take care of somebody when he's in handcuffs. How is he any threat in any way and then to listen to Scott Adams and Ben Shapiro on these absolute pieces of garbage try to say, oh, you know, there was the fentanyl that killed him.

It's like, yeah, no, the person on his back kneeling on him for nine minutes. Because it's about ratings. Now, switching topics and to talk about ratings, something a little lighter. The most interesting popcorn thing that I watched was the Hulu documentary. You did watch the Hulu documentary on WeWork?

On WeWork, yeah. I gotta watch it. I gotta watch it. I haven't seen it yet. Yeah. Oh, it is in a word. I think the right word is like, outrageous. I think the guy who stole it, Jason, was the lawyer who they interviewed. Yep. He had some incredible kind of like one-liners.

One-liners. Yeah. I think it's, yeah, the- I had a, I'll be honest, and this may sound crazy, but I actually had a fair amount of sympathy for Adam Neumann in watching it. I think that he, at least in the documentary, it came out that he, you know, not that he didn't create this issue, but that I think it was a little overly scapegoated because it's very hard for you to incinerate $45 billion without the complicity at a minimum of your board of directors.

Right? And, and a bunch of like extremely well-heeled thoughtful investors. And so there was just, there was just this so much complicity in this thing. So if anything, my takeaway was that he, he shares, he shares the blame with a lot of other people and it's not, it wasn't, you know, him and him only, but my gosh, that documentary, some of the things guys are just, they're fabulous.

But this is, this is always true in these businesses that end up with, you know, bad actors that are enabled, right? I mean, it's been the case in public and public success stories and failures, right? I mean, there's a cult of personality. The personality provides that the high beta personality provides the alpha and it can also provide like a Theranos outcome.

And you know, the, the thing that you'll see when you watch this is, I don't know if you guys watched the vow about that NXIVM cult, which is just equally loathsome, horrible people behaving badly, but he really targeted young people to work there and indoctrinated him into this. We're changing the world.

And then there were no adults there. And you see him behind the scenes when he's talking at the IPO road show, and he's having basically a panic attack and he's psychotic. I mean, he was really deranged and they have this video of him trying to get through the IPO road show.

What show is it? What movie is this? It's the, we work documentary documentary. It is so deranged. It's awesome. Deranged is a big word. I don't, I'm not sure that it's deranged, but I think it's like, it's juicy. It's a, it's gossipy. What about his wife and like that whole thing?

Like we school they're like, we have to democratize education for 60,000 a year. Have you guys ever regretted enabling, um, you know, quirky personality entrepreneurs that you've backed and then you've regretted it later. Yeah. So, um, the, the problem is it's hard, it's hard to know in the midst of it, you know, I guess it's like kind of like that line, like the line between genius and insanity is very thin.

Um, but yeah, I mean, the, the one thing I will say is I've only ever had one issue of outright fraud. Um, and so, you know, well, no, I mean, in, in hundreds of, in hundreds of companies that I've, that I've invested in, luckily I I've, I've only, uh, I've only seen one issue where, you know, the CEO was extremely, I don't know, aggressive in, how they accounted for and book revenue.

And, you know, this is where one thing that we don't have at the early stage companies, we don't have the check and balance of a reporting infrastructure and a third party watchdog and all these other people. And so, you know, you guys all know this when we go in and we sit in a meeting in a board meeting and, you know, the entrepreneur puts slides up, there is an inherent 100% categorical belief that they're, that they aren't lying, right?

Like you don't, you don't even have to check that assumption. It's just assumed that nobody's lying, you know, good or bad, we're just presenting the data. And I had one case where the guy lied and it wasn't one was, it was, and our CFO and, you know, our team figured it out.

And, um, you know, there were other investors and it was, uh, we all were just really shocked and we had to kind of clean it up as best we could. And I have literally a dozen, uh, and they, we didn't wind up investing in, I think 10 of the 12.

And the reason is we took diligence to your point. Do you, how do you even know in a board meeting? I just said, screw it. I'm going to build a diligence team. And we ask people for all their bank statements and for their iTunes account and for their Google analytics.

And if a company doesn't give those to us, we just know that something's up and we figure it out before we invest because the two times we did get dinged on this, we had one where somebody was giving themselves a loan and paying. So you did diligence. We did.

We just basically have a diligence list that says, give us the incorporation docs and all these bank statements. Now somebody could fraudulently change a bank statement that is possible. So there, it depends on how deep people want to go in the fraud. But did you guys ever like enable a personality that was just like, so over the top and then you're like, oh shit, this is actually going to, this is actually an explosion.

Like it's a total disaster. Only my top three investments. Well, actually that's a good point there. That's a good point, right? Yeah. So because, okay. So I wrote about this in my blog post blitz fail about the sort of how, how founder psychology can actually cause a company to go off the rails.

Oh, it's in offense. The thing, the thing is that founder founders do need to be much more aggressive than the average person. You know, we like to think that a quality, that a personality trait, like aggressiveness, there's like some sort of normal distribution of it. And you kind of want to be, you know, somewhere in the middle of the curve and it's actually not true.

You want founders to be much more aggressive than the average person, because if they're not, they're just not going to persevere and push hard enough. Right. And Jay, I mean, we saw, we saw this with, with Uber, right? I mean, TK was a super aggressive personality. The company would not have been as successful.

How do you not push that hard? And so the curve in the real world, it's not a normal distribution. It looks more like a curve where there are returns to aggressiveness and they're keeping increasing returns to it until suddenly the person goes too far and then they jumped the shark and the whole thing craters.

But wait, can I, can I say something like, you know, having been in the engine room with Zuck in a critical moment, Zuck was an aggressive guy, but he wasn't over the top and he wasn't just this like crazy weirdo personality. He wasn't enabling sexual harassment. Was he thoughtful?

He wasn't doing any of that stuff. Would you say? Yeah. He was, he was, he was, he was, he was an intellectually incisive, he was an aggressive thinker. So this is why my reaction to David's question is I haven't backed assholes because I just think that that archetype doesn't work.

Zuck's a very cool analytical personality. There are these founders that, you know, we, um, I've heard the term wild stallion to, uh, to destroy. Describe them where they are, you know, they're like these, these wild stallions, they have tremendous upside, but they're also a little bit, you know, um, wild and unless they sort of learn to.

You can get hit with the hoof. Yeah. I mean, they're, they're, they're, they've got a lot of talent, right? Uh, the, the, the talent is the amount of talent you have is like the horse you're riding on. And some people are riding on a Bronco. They got a lot of talent, but it might buck them off.

I just think the real, the real edge in investing is figuring out what is blood, luster and window dressing and show. And what is actually aggressive thinking like John and Patrick Collison. There's zero bluster with those guys. Yeah. Those guys are Shopify zero. That company is going to be zero.

That's going to be the most valuable, valuable company that's private right now. Besides these guys are, these guys are incredible, intellectually thoughtful killers, right? That's what they are. That's true. They out, they out think everybody, but there's also a maturation process. A lot of founders go through, right? I mean, the Colson's and Zuck, I think got very mature, very young.

I think there's other founders that it takes them a while to get more polished, get more disciplined, reign in that, you know, those emotions. I'm not saying they're fraudulent. We don't want to bet on fraudulent founders, but some founders need to learn how to harness the talent they have.

Yeah. I agree with that. I agree with that. And those are the ones where it's very hard to know earlier in their career, whether to bet on them or not. Right. Because they may get it under control or they may not. It's, you can't tell at the beginning. Here's the analogy we use internally.

It's like being professor X and the X-Men, you could have a Jean gray or a Wolverine and like, everybody's got a different superpower, but you need to teach them how to use that superpower so they don't self-destruct or cause chaos. They can bifurcate the other way, right? They could be Magneto, right?

You could, it could go the other way. Not sure I get all the references, but I hear you. Well, I mean, I'm kind of shocked given how much of a huge nerd you are that you don't understand the X-Men. I love that movie. I love that movie with the guy who's made of all the rocks and the little tree guy.

Who's his buddy. That's a Guardians of the Galaxy. Yes. I think, I think Jason's favorite character is the blob. Is that the one? That's coming from you? You brought COVID-20, I dropped COVID-15. What are you talking about? How many, how many of those Cubano sandwiches are you having? Look at your face, dude.

How many cro, no croquetas, Sax. Are you right? I shouldn't have gotten there. Side salad. Bad idea. I shouldn't have gotten there. You're right. Yeah. Side salad. I started training. Well, Sax, what is your health plan? Are you, now that we're coming out of COVID, are you running or like?

Yes, we got an intervention right now. What's the plan? You look terrible. You do look a little bloated. You look like a, you look like a puffed fish. Oh, geez. I need to lose like 20 pounds. A puffed fish. I'm down 12 from my peak of the COVID peak.

I'm feeling good. Just get a personal trainer. Speaking of COVID, what the hell is going on in India? Oh my lord. It's brutal. It's scary. I thought the whole thing was we would, they were taking hydroxychloroquine for totally different reasons and this is why it's all fine. Or that they had some immunity or that it was hot.

I mean, there was a million reasons of why they were not going to get hit and then now they're surging and we have 60 million shots on the shelf and the number of people getting shots is going down. This is America's chance to use instead of battleships and nuclear weapons, we can use this COVID to shape global policy.

We should be getting vaccines to other countries and be once again, the shining light of the entire planet and humanity. Well, why are we not bringing shots to India now? We have so many extra. I'm not sure. I'm just trying to pull up the India vax data per day.

I'm not sure that there's a, that's as much the issue, right? I mean, it is scary to watch their, I mean, you're our go-to science guy, Freeberg. Tell us what we're looking at here on this chart. I mean, the daily COVID cases are now hitting 250,000. 350,000. 300,000 a day, Jason, right now.

It broke 300. Oh my Lord. And the United States has gotten down to like 50, 60. India is now past the peak of the US. You know, India is now seeing more cases per day than any country has seen worldwide during the whole pandemic at over, you know, 300,000 a day right now.

And it's, you know, it doesn't seem to be letting up and we're now questioning whether it's testing. That's the limiting factor in terms of reporting on these cases. So it's pretty nasty. Now there's a famous, famous Indian politician who, who had been double vaxxed, who claims that he is COVID positive as is his mother and sister.

And so it's also creating a little bit of a concern in the market about, you know, getting COVID. Now he doesn't seem to be having a severe case, which is, you know, one of the kind of important things to take note of in vaccination is it's not necessarily binary.

But it's certainly making a, a lot of sense. Yeah. lot of creating a lot of fear uh as a result of his um kind of public statement about this this isn't just about cases either um 30 days ago they were at 200 deaths a day and uh i mean tragically they're at 2100.

so it's 10x in 30 days if it 10x is again that's 20 000 people a day dying this is a different level than any other country has experienced tragic and they don't look at the end at the end of the day they don't have the the hospitals hospitals to handle this do they this could become a crisis of epic proportions at the end of the day a country's success in battling cove it's going to be about how fast they can get their population vaccinated it's very simple right i mean israel was first they got everyone vaccinated now their cases are down to almost nothing the us is doing pretty well although there's some room for concern we were doing you know close to four million vaccinations a day now we're at like three three and a half they're starting to slip a little bit um and that doesn't have to do with johnson and johnson right that has to do with people not showing up for appointments yeah and i think you got to blame the media a little bit because they keep running all these vaccine scare stories about you know how this person or that person the vaccine punched through and they got sick despite getting the vaccine they keep selling they keep selling all this like you know covid um scary and porn you know the the fear point do you know what i noticed the other day on cnn this is how insincere and um ratings desperate they are when they put up their covet stats they put up cumulative cases and cumulative deaths that's what they obsess on and it's like hey dummies we know what you're doing here you're trying to scare people you should show the graph of the debts going down and then why can't you take your mask off if you're vaccinated and you're outside reward you were talking about this last week yeah nate silver had a really good tweet about this he said that wearing a mask after you're vaccinated is now it's like the the blue equivalent of the red maga hat where it's completely performative to say hey i'm on team blue you know even though like scientifically it's meaningless i it's like the press they keep talking about this possibility that even after you're vaccinated and you could somehow you know keep transmitting the virus to other people look viruses i mean freebird can explain this better than me but viruses do not have in themselves the machinery for replication right they have to take over your cells hijack your cells machinery to replicate themselves so first they have to infect somebody then that person gets you know gets the virus starts producing a lot of it then they start shedding it if you don't get really sick you're not going to be shedding a lot of the virus you're not going to be transmitting it to a lot of other people and you know they talk about this this possibility as if it's like a real possibility that people could still be transmitting the virus after they're vaccinated i mean it's not a statistically relevant possibility right it's kind of a gray scale it comes down to this interpretation of everything being binary and the reality is that all of this is on um you know a a a statistical curve or on a kind of a gray scale and you know the sax's point is a hundred percent correct that the probability of someone who's been double vaccinated getting infection getting infected and then being infectious in a meaningful way is so remote um that it is not even worth kind of considering uh in a way and and being double vaccinated such a significant typically right not for everyone right all immune systems are different and some of what we we might be seeing is the difference in kind of how people develop immunity um but it is such a rare case that one could have a severe infection after getting a uh you know a vaccination um is such that it it shouldn't even be considered and kind of you know mentioned as being a reason for continuing to wear masks and not gather and not do things and so you know we started out as sax pointed out and i think this is such a true and important point we started out with this like immediate politis politicization of what's the right thing to do to reduce the spread of the virus and then that became the mainstay for that political affiliation and now the transition of the new world that we live in where most people are vaccinated we have a better understanding of the science and the statistics and the mechanisms of transmission we hold on and we grasp on to that initiating kind of belief system that was correct at the time but isn't correct anymore and it is it seems so difficult to get people to shift their mind this kind of um this behavior is an ignorant behavior and you see it in so many manifestations um uh right now uh in particular with respect to masks and behavior after vaccination and so on uh and it's uh it's really brutal to watch um but we obviously digress a bit from the indian uh circuit the indian circumstance which is a really nasty one so it looks like why why now and not a year ago you know it's it's not clear right so there's um someone uh uh provided a indication today that there may be as many as somewhere between 100 and 200 unique variants that we're seeing emerge in india so there may be a a lot of interesting very interesting technically but not obviously for human life but a lot of dramatic um variants or significant variants uh that might be increasing the the infectiousness right now um and uh and in particular uh you know behavior has shifted in a way that's enabling you know some of these transmissions to occur you know a lot of people let their guard down and so on in a way that maybe they weren't six months ago um and uh you know there may be some forced evolution associated with partial vaccination totally a theory right now where you know 110 million doses have been given in india so far so you know in order for a virus to succeed the viral variants that are going to infect more likely um you know through a partially transmitted a partially vaccinated population are the ones that are winning out so there's a lot of you know confounding factors here we're not really sure um but it is uh it is pretty brutal um what is uh what is going on um i will say like this notion that vaccination does not prevent uh protection against variants is not a binary statement either this is really really important i've been wanting to say this for a couple of our shows when you get this vaccine um what you're doing is you're training your cells you're giving yourselves the rna to print the spike protein and that protein is now in your body everyone's immune system then reacts differently and then it's like you're giving yourself the rna to print the spike protein and then you're giving yourself the rna to print the spike protein and then you're giving yourself the rna to to create antibodies to that protein the antibodies that chamath makes and jason makes and sax makes and i make are all going to be different but if you had to pick whose would be better i mean i could tell you sax is probably going to be the worst off but yeah jason's sort of the most sluggish for sure they're the slowest yeah but there are likely tens of thousands of novel variants that our b cells will make that will that will bind to that spike protein and get rid of it and we will each have many hundreds or potentially thousands of novel antibodies that our immune system will create.

we'll make so keep that in mind you now have a portfolio of antibodies that your body is producing to that spike protein so now when when a when a covid uh when the sars cov2 virus shows up in your body some of those proteins some of those antibodies are going to be really effective at getting rid of it some of them are not now the protein in the sars cov2 virus changes slightly some of the other antibodies you have are going to be effective and some of the other ones are not and it is that portfolio that is um that is going to change sorry that portfolio that is going to define your success at fighting off a specific variant of sars cov2 where the spike protein is changing slightly with each variant right so these variants change the composition of the protein the antibodies that you have are going to be you know more or less successful depending on how that variant changes and that's um where there may be cases where the number of antibodies that you are producing or the success of the antibodies that you particularly have are a little bit lower for a particularly new variant it doesn't mean that you're going to have an infection that's going to be a runaway infection in your body it means that it might take you longer or it might be a little bit harder for you to clear that particular variant given the repertoire of antibodies that you've produced and that's why this isn't that's why this isn't binary right it could be that it's like hey this variant shows up boom instantly i got rid of it i don't have any infection but someone else might have like you know maybe a slight bit of um uh you know there might be a couple days where they'll feel a cold as your body's going to get rid of it and the other way that that could happen is that they're not going to be able to get rid of it so you're going to have to do something like a blood test to see if that's going to be the best way to get rid of it and then the other way is you're going to have to do something like a blood test to see if that's going to be the best way to get rid of it and so that's why this is a very important thing to do and so that's why we've been doing this for a long time and so i think that's going to be a very important thing to do and so i think that's why we've been doing this for a long time and so we're going to have to do it a little bit more often and so we're going to have to do it a little bit more often and so we're going to have to do it a little bit more often but we're going to have to do it a little bit more often but we're going to have to do it a little bit more often and so again like when viral variants start to emerge in the population and as they kind of take off um and become more dominant it doesn't mean that we don't have immunity it means that immunity might be slightly affected um but not not it's not one or zero right because you've got hundreds or thousands of antibodies to fight against covid in your body and i think that's really important so we should you know while there may be some variants that might be what we call variants of concern meaning they can kind of slip away a little bit from most of the antibodies you have these and so i don't know if that was too technical or too difficult to understand but i think it's really important it makes total sense yeah yeah and and and one thing just to add to that is is that most of the variants that the press keeps reporting with alarm that are somehow that that basically are going to be vaccine proof they turn out not to be you know that we they're very shortly uh there there comes out a new article basically saying that the vaccines work and so the press keeps reporting these isolated cases and so i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because i think that's a really important thing to think about because what's going on with the SEC and SPACs and just some more reporting or something?

Because I was watching CNBC, and they said, Hey, you're doing everything right. But there's a lot of other people are doing things wrong. Explain to us what's going on. It's I mean, it's a it's a very specific accounting issue, which is that some specs many specs and in fact, many companies, let's just put it that way, not just backs, but many companies use warrants.

And the prevailing guidance on certain warrants was that they were equity. And basically, that gets put into a balance sheet statement where you have equities, assets and liabilities. And you know, it sits on one side. And basically, what they said was they issued some refined guidance that said actually, in these specific cases, these should be really listed as liability.

So then it needs to move from this column to that column. But when that when you do that, you go through, you know, a bunch of cascading implications and effects and, you know, revisions and restatements. And so that's what the that's what the entire securities industry is dealing with right now, which was, you know, this guidance by the SEC and the implication.

So that was on the 12th. I mean, just so you know, today, we just filed the updated, all of our updated docs plus the updated s4 for so far, so we were able to work around the clock and just kind of get it done. And hopefully, what we've also done is create a bit of a way forward and a path that other folks can use to kind of like accelerate their their progress, but it's definitely created a ton of work.

But, but we're I think we're I think we found the right answer. So ultimately, good for you, because you want to see it. Yeah, and also, I think like the simpler path forward. So I mean, if you just think about capital market stability for a moment, like warrant coverage should probably go away.

Number one, right, so take all the warrants to zero. Second thing that should happen is that, you know, I think this is an opportunity to take a step back and figure out how to really make sure that the SPAC sponsors are of the highest quality. Somebody told me this incredible thing today, I am one of five groups that put up any money when we do a pipe in our deals.

Meaning, he's said to me, 95% of sponsors put up literally a zero, zero. And so of course, you're going to have, you know, extremely loose underwriting requirements, if that's the case. And so, you know, the idea that I'm thinking about, which someone proposed to me, which I think is very clever is this idea that, you know, you earn more of the promote more money you put up, right.

So for example, like, you know, in, you know, in SoFi, I think we put in $275 million. So I mean, we really, we're really, we're really really, you know, that's a meaningful commitment. And it closes the gap between, you know, what your equity is issued at and what investors are buying at.

And that's very healthy, right. And so I think there's all these mechanisms that will clean up the SPAC market, we need to have a much more refined criteria to allow people to be sponsors. And we need to make sponsors in a position where they must put in money, so that they actually do the work.

If you get something for free, let's be honest, you won't do the work. If you're forced to write a check, it's 100% about it, show me an incentive, I'll show you the outcome. And this happened on AngelList, where in the beginning days of AngelList, you had some angels, quote, unquote, who didn't have any money.

So they put 1000 or 2000 into a deal, then they would have 500,000 come behind them. And so you had this 500 to one ratio of dollars to skin in the game. And it was like, well, why wouldn't a syndicate lead put every company in the game, and then they would have 500,000 come behind them.

And so you had this 500 to one ratio of dollars to skin in the game. And it was like, well, why wouldn't a syndicate lead put every company in out there, and not even put it, you know, they have no skin, which is why when you have a venture fund, I don't know what they expect us to put in typically, well, the problem is venture funds are one to 2%.

I was 25%. Well, one to 2% is it could be pretty significant. If you're doing a fund every three years, I'm doing this. And it's, it winds up being millions of dollars for me, but I'm happy to do it because I believe in my own ability. All right, as we wrap anybody have a plug or anything they want to let people know about?

Oh, I want to talk about this one little thing. I just not to talk about it. But I would like to tell you guys to read it because it is so interesting. Basically, like European soccer tried to incite a revolt, where like the top teams across all the different leagues came together to try to create a Super League, but it ended up like they were like a band of evil villains and like fans erupted, everybody erupted.

And then, you know, it existed for 24 hours. But in that 24 hours, it looked like a complete rewriting of sports and sports, like laws and you know, it was an incredible thing. There's an article in the New York Times, I'll post it in here and folks want to read it.

It's really, really fucking funny. And that will be on season two of Ted Lasso. I don't know if you guys watched Tim Cook's keynote this week with the new IMAX, which are really beautiful. He was so excited about Ted Lasso and Ted Lasso is a great show. But I mean, it literally is the the Apple show.

Do you guys see Ted Lasso yet? What is it this television show? You guys haven't seen Ted Lasso the TV show yet? Is it on NBC or CBS? What channel is it on? TV plus, whatever that is. Channel six? Is it on channel six? TV plus, you got to go on your Apple TV and then find an Apple TV plus on your TV.

And you'll find it eventually. It's one of their paid, you know, they have their own Netflix competitor called Apple TV plus. So on your phone, if you type Apple TV, you'll have Apple TV. I have Apple TVs. I have Apple TVs behind my TV. No, no, but there's Apple TV plus, which is their Netflix.

So there's a better is it a better Apple TV? No, no, no, it's content. It's a content subscription you could have. They just, they screwed that part up. Hey, shout out. I just wanted to get sorry. So who's who's Ted Lasso? Ted Lasso is adjacent to Dacus comedy that is incredibly heartwarming, about a really heartwarming, joyful, kind person who goes from America to the UK to become a soccer coach.

Yeah, really great. I hate it's boring. That sounds really common. Mind you, it's not cynical. I do. I hate it. You should watch. You should watch Gamora on HBO. I started it. Yeah, woof. On time. Yeah, I got the first episode. Oh, here we go. It is so super.

And also, you should watch it in the original language because it's not really Italian. It's like Neapolitan. And so like, you know, I can catch and understand maybe 20% of the words and I said to Nat I said, What language is she's like, I had no idea. I watched it in Italian subtitles.

So it was, it was beautiful. It's beautiful. Beautiful. It's so intense. It's like the wire but like I mean, you know, set in Italy. It's incredible. Afterlife is also good Ricky Gervais. If you want something cynical and heartwarming. That's for you, Sax. Love you guys. Love you, Sax. I'll see you.

Actually, what can you just come back to the Bay Area so we can play poker? Yeah. When he just wanted to Miami Are we going to Miami? I'm going to I'm going on a trip. I'll just leave it at that. I'll talk to you guys. Recognizance trip. What? Recognizance?

Yeah, recognizance. I'm gonna be able to understand what's going on. Do you understand that that term is more associated with bail and in jail than it is what you think it means? Jason, you are released on your own recognizance. That's what I'm talking about. You want to do reconnaissance?

Reconnaissance. That's what I said. Reconnaissance. Yeah, I think you'd be wearing an ankle bracelet on your recognizance. Actually, no, they don't fit on his ankles. I always have to mispronounce one word to make it a good episode. For Jason, it'll be a cankle bracelet. You can't talk, Mr. Doughboy.

What are you talking about? My God. What? Is it called a bracelet if your calf and your ankle are the same circumference? Put it this way. If Sax is wearing two of them right now, you'd never know. Sax is wearing one on his neck. What happened to your neck, Sax?

We're out. We're out. We're out. We're out. Where's your neck, Jabba? See ya. See ya. Jabba the Hutt over here. Love you guys. Love you. Love you, besties. Bye-bye. We'll see you all next time. We'll let your winners ride. Rain Man, David Sax. And it said, we open sourced it to the fans and they've just gone crazy with it.

Love you, besties. Queen of Kinwa. I'm going all in. Let your winners ride. Besties are gone. Go 13. That's my dog taking a notice in your driveway. Sax. Wait, no, no. Oh, man. Oh, man. Oh, man. Oh, man. My avatars will meet me at . We should all just get a room and just have one big huge orgy because they're all just used to this.

It's like this sexual tension that they just need to release somehow. Wet your feet. Wet your feet. Wet your feet. We need to get merch. Besties are back. I'm going all in. What? What? What? What? What? What? What? What? What? What? What? What? you Thank you. Thank you.