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all right everybody welcome back to your favorite podcast the Allin podcast it's
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episode 164 I'm down here in Miami with me again of course the dictator chairman
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himself J off poly hoaa and the Rainman yeah burn baby David saaks unfortunately we had a little bit of a
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challenge this week we don't know where freedberg is he's somewhere lost in his Apple Vision Pros but he'll be back next
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week as you guys know I'm incredibly generous with my friend so I sent all the besties the Apple Pro goggles and so
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these Apple Pro goggles are amazing but uh you bought me a pair of the Apple Pro
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yeah we talked about this yeah they all you guys actually you were using them you just forgot but uh freiberg's been
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using them nobody can find freedberg right now because apparently he went to Uranus I recorded
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in all of these sacks what's happening inside each of our Apple goggles God oh my God and so but trath here they
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are we actually took a picture I had Nat take a picture of you wearing them you want s you want to see what jamat was
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doing in his goggles yeah let's see I recorded it oh yeah look at that see he he imagined that he did leg day look at
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those legs leg day oh my God he's reing he's still reving in that uh thirst trap that
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he posted in he I know but you see those legs the Apple Vision Pro Tim Cook can I
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sorry look at that can I say something funny about this which is that my legs are actually darker than my torso and my
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upper body it's the weirdest thing and so you have it in reverse but it is true that my my legs are a different shade
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than my my trunk and my arms and my body okay well Sachs by the way saaks you know he loves his goggles CH do you have
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any interest in seeing what sax was doing with his goggles oh my God I can't imagine there it is s was speed running
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he was doing the speed run on DJ absolutely getting in there that's uh Saving Private Ryan right yeah that's
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you that's you you were speedr running Saving Private Ryan there oh I got them too yes I but I didn't record myself I
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didn't record myself I maybe nicked it oh I was in there oh look what am I doing ohing
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the let your winners ride [Music] Ravid said we open source it to the fans and they've just gone crazy with it love
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you queen of Quin wait you're telling me that they didn't have the third or fourth investor in
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Uber up at ringing the bell with them at the original moment I could tell you the
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backstory I was invited by TK to come to the the ringing of the Bell TK was disinvited so he was there on the
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floor it was very awkward and then they didn't have him go up and ring the bell or be even there when Dar rang the bell
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it was because it was so controversial they didn't they banned him oh that's sad it was really it was really sad it
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was super sad U but anyway everybody I hope you're enjoying your so you were there or not I didn't go because okay he
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was like I'm we're gonna have a party but we're not gonna be able to ring the bell and it was just all like very did
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you go to the party I didn't I should have I regret not going but it was unclear if there was even going to be a
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party or if TK was going to go because of all the drama I don't know if you remember on CNBC they were like TK's in
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the building but he's not on the thing and it became a big brewhaha but yeah so I missed my window
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I mean if you had known that this was going to be the Big Exit in your life really the only one then you would have
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made every effort to attend everything right absolutely absolutely yeah I mean you're still riding on that ymer in
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PayPal I was I was talking to somebody about this the other day most people's careers you have like you know it's not
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like a smooth up upward trajectory there's like maybe a few Pops that you get you're lucky actually if you get a
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few because most people only have one or maybe two yes it's like a power law it's
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like anything else in Venture right abolutely like I'm sure if you think back on like the big outcomes in your
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life it's not like there's one every year and like some sort of smooth no gradient it's basically there's like one
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two or three over the course of your entire career that you remember right yeah absolutely yeah I mean it's it's
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good it's good to consider that because you have to enjoy every sandwich you have to enjoy every day what you're
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doing because those pops are out of your control you don't know when they're going to happen how they're going to
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manifest so but you guys didn't get these you didn't get the goggles but these goggles came out this week I don't
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know if you saw it what I will say is at the poker game three of the guys were talking about these goggles huh Sammy
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woke up at 5: in the morning on the first day he was he got them and then and Robo were telling me that they
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just like bought them randomly in the next couple of days and it was civilians there was no like waiting in line they
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were able to just order them is what they do yes but they're civilians just to be clear like in Silicon Valley we're
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kind of like H whatever you know we we played with oculus for so long but now these are out and there's a bunch of
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demos going around this one I thought was interesting I don't know if you saw this but watching in a basketball game
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it actually is quite compelling to have all the stats on the screen with you and
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you can kind of move them around I maybe could see myself doing this I don't know
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do you think you would do this watching a game maybe so wait are you watching the TV through the goggles like what
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part is real world and what part is augmented obviously all the stats are augmented reality but the TV itself is
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is that that's a stream that's a stream coming into the goggles yeah it's not your actual TV so you know I think he's
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just putting it on the TV there but you could literally be outside on your deck you could be on an airplane and do this
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so that's like but you can see through the goggles right is that the idea it's you can if you want I think you can
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still see through the goggles yeah is the idea yeah you know that you could you can see the fact that you live in a
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tattered apartment without a girlfriend dressed poorly you can see the dishes in
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your sink you can see the cupboard being be bare you can see the spoiled milk in
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your refrigerator your half-used bong that you use to soothe yourself to sleep at night whatever all of these 20 and 30
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year olds do to cope you'll see all of that while still being in an immersive environment it's amazing yes I mean it
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is so dystopian I just think like if you take out your phone your spouse is like
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what are you doing on your phone I can you imagine the audacity of being with your spouse or your family and being
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like hey guys I'll be right back and you put the goggles on to watch the next game with the Warriors I mean I think
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that's a snap divorce I don't know you said it very well about the the Oculus one which is you had a turn of phrase
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which I really like but basically it's like you were very quick to try it and then there was like a period and then
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you lost interest I think that's just going to be the key thing with this and the fact that it costs $3,500 they
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have to get the price down fast enough for average folks to want and be able to buy it right yeah I call this experience
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try the try oh my goodbye you try it you're like oh my God this is incredible and then you're like we put it in your
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draw you never use it again because there's not an application it's really a proof of concept look I think it's a
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great thing for Innovation that they're starting with this you know like you said expensive headset that maybe is not
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that ergonomic but eventually it'll come down and the form factor will be glasses
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or sunglasses Facebook I don't know if the product's out yet but do you see their product where the ren yeah it has
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the AI built into it and you can ask it questions and it will do computer vision
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and give you answers based on what it's seeing it was a phenomenal demo I don't know if that's actually real yet but did
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you see that demo yeah these are the Facebook Rayband glasses and I I do think these are meta smart glasses they
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work particularly well taking pictures and sharing them on Instagram so they're kind of single function he you know how
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Zuckerberg is he he cribed what Evan Spiegel did a couple years ago with the Snapchat but he put out a demo that was
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a little different the demo was like he was in his closet he was wearing this and he had picked out a shirt or
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something and that's like give me you know tell me what I should match this with yeah what goes with a gray shirt
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that I've worn for the last 14 years did you guys see this thing where they all had to testify in front of the
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Senate yeah we might as well I guess could just jump right to that it was like a public flogging yeah once again a
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public public flogging we'll just jump to it real quick since we didn't want to go too deep on that one but Josh Holly
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made Zuck turn around and apologize to to people in the audience it was really intense yeah so this is the name of this
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hearing was big Tech and online child sexual exploitation crisis Zuckerberg he was questioned along with the CEO of Tik
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Tok Discord X and snap but obviously this is all around kids online safety and also section 230
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which I think these senators are this is one of the few bipartisan moments I think they're honing in on it yeah they
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they realize this is kind of like a winning they're gonna take a run at this they're taking a run at it for sure they
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realize it's a winning ticket but let's just play the clip and then I'll get your thought saaks and Jamal let me ask
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you this there's families of victims here today have you apologized to the victims I would you like to do so now
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well they're here you're on National Television would you like now to apologize to the victims who have been
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harmed by your product show them the pictures would you like to apologize for what you've done to these good people
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I I I I'm sorry for everything that you have all gone through it's terrible no one should have to go through the things
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that your families have have suffered and this is why we invest so much and are going to continue doing industry
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leading efforts to uh to make sure that no one has to go through the types of things that your families have had to
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suffer um a powerful moment and for Zuckerberg to get up and actually face the parents he turned around he faces
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par this a very dramatic moment and he apologized n n you respect him for for doing that and you think that was like a
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a powerful moment as well and and where does this all end up this was a kangaroo
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court I mean this was basically all theatrics this is basically a bipartisan moral Panic where all these senators are
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basically grandstanding and these are the same types of accusations that we've been hearing for years remember this
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goes back to the whole Francis Hogan claims where she says that Facebook wasn't doing enough to prevent various
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kinds of online harms and I think that we're going to regret where this All Leads because where it's going to lead
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if they do repeal section 230 is towards greater censorship all these companies are going to spend even more resources
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restricting what we can say and here online which is not the right direction listen do some harms occur online yes do
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I believe that Facebook is taking substantial measures to stop them yes I mean but edge cases are always going to
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get through when you're operating at that kind of scale there are going to be these edge cases of kids who got
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harassed or content that shouldn't have getting through it's just part of the fact that the internet operates a
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gigantic scale and these harms have always been out there I think that these companies do their best to try and stop
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them but they're always going to get through and you can't make every aspect of our society perfectly safe and
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harm-free somehow we have this expectation that we can eliminate 100% of every harm that occurs and I do think
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that these online companies have been unfairly picked on in a sense I mean if you're going to talk about these types
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of harms why aren't you targeting the music industry for all their incendiary lyrics that basically encourage all
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sorts of violent or sexist Behavior why don't you target the advertising industry for
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creating unrealistic body image expectations why don't you target the Kardashians for
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setting unrealistic expectations around image and you could go on down the list I mean why don't you Target
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Hollywood for releasing a show like Euphoria which is a hit it seems to me that the problem in our culture is not
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coming from the edge cases it's coming from the mainstream entertainment that is fully allowed and
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is popular and is our hit shows and hit records and hit products I mean that's where the toxic pollution is coming from
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in our culture so to turn around and now blame the online companies for creating
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all of this I think is just I I think basically they're being scape coded I mean again this is a moral Panic shath
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do you think it's a moral Panic or you know there have been statistics and studies done about what is viral on
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social media the algorithms targeting users The Addictive nature of it you spoke earlier about the addictive nature
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of just gamification on watches social media is a little bit different than music and some of these other things
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because they have these algorithms to increase watch time and engagement so I think that's what the other side would
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say where do you say what do you say chamat where do you stand on this let me just give a Cod out to a couple things
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that sack said it is true that we've taken turns attacking other forms of media when they were ascending in their
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popularity so in the 1990s if you guys remember politicians and their censorship attempts around gangster rap
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and NWA and two life crew and certain songs Al gor's wife right what was her name
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TI tiate against rap lyrics what was the NWA song you know the police that whole
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thing just sent off a huge fur about people potentially David being motivated to kill cops or something right in the
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80s there was a trial Judas Priest went on trial right because if you played one
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of their records backwards supposedly it promoted devil devil worship I don't know who's playing records backwards but
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if you did then it promoted devil worship and I think a kid committed suicide and so they basic prosecuted
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Judas Priest for it so that's comment number one which is this is not new and the reason why social media is in the
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crosshairs is because instead of having this really diverse ecosystem of many small players
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you have three or four folks and so it's easier to bring them up on stage and sort of Piller them second is I actually
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thought that Zuck had a lot of moral Clarity because it's like that's a tough position to be in and the fact that he
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had the courage to turn around and actually apologize to those people shows he's trying to do the right thing but
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the reality is and saxs is right if you apply a very very small error rate to an
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incredibly large number so they have a network of three and a half billion people monthly right or daily or
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whatever the thing is even if you say that there's one tenth of 1% of an error rate meaning things that
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are unintended well that's three million unintended consequences right that's a lot of unintended consequences and so
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there's this massive law of large numbers at place so what what do we do I guess is the
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question and I think that there is enough knowledge that we have to know that the ability for a 35y old to use
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certain products today is very different than the ability for a 12-year-old to use that same product because of where
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they are physiologically right I think we we all know that to be scientifically true on
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the dimension of many products and I think what we need to decide as a society is whether software and
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electronic products fall into that categorization and if so what does it mean so in the case of china they
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mandate top down what products can be used and how many hours you can use specifically video games you're
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referring to yeah yeah and David's right which is that if we go there and we rewrite the law then there's going to be
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a different set of unintended consequences that's going to create create I think a much poorer business landscape
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frankly to innovate and a bunch of other things and building on your comments there's clearly an age at which kids can
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shouldn't be on these systems and an age where you know maybe with some guidance
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they can yeah you want to add something J yeah and then I think the third thing is around the section 230 thing
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itself I think that Sak I'll give you a slightly different take I don't think that the section to 30 rewrite is going
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to be Broad and sweeping what I noticed from a bipartisan perspective by both the Democrats and the Republicans is
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that the one single narrow issue that they all seem to align on is not necessarily about all of the different
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rules around censorship but that the lack of liability for these folks should be relieved and I think that if you were
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to write a narrow amendment to section 230 that said that these social media companies or other organizations that
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had certain characteristics were more liable where today they have no liability I'm not saying that it's right
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but my read of the temperature in that room was that that is the very narrow change in section 230 that I think they
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all seem to want to make and so that seems like a very likely thing that will happen in the next two or three years
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unpack that for the audience who who might not know how they would do that section 230 says if you're a publisher
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you're a common carrier you're not responsible for what people post on your your system blog web host or social
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media company but where these social media companies move from being just a common carrier you know like paper might
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be or or a website hosting company like WordPress or Squarespace is when when they flip over and they have an
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algorithm and then they start picking and choosing so once you start doing editorial like the New York Times and
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you have editors then you're liable if you're CNN you're liable if you're Fox as we start in the Dominion case that's
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where the liability comes in so I guess the question to USX is you know at the end of the day now that we've seen these
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things that scale is there not an argument that when you start editorializing through an algorithm and
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you start promoting certain content that you have some level of responsibility like Fox News CNN or the New York Times
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has where would you stand on that issue some liability if you're picking winners
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and losers in terms of what gets promoted in the system well apparently I'm the last person in America who
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thinks that section 230 was a good idea and a Visionary piece of legislation that actually enabled the creation of
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user generated content platforms just to kind of slightly modify your description
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of how it works I would analogize it to a news stand where there's magazines on the new stand they're Publishers and
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then there's the news stand itself which is a distributor if a a magazine engages
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in defamation they're liable for it but the new stand is not the new stand can't
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be sued so the question is when you have these massive user generated content platforms are they operating as a
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publisher or as a distributor and I think what section 230 made clear is look if you don't write the content if
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the content is generated by users you're a distributor and that is I believe the
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better analogy to make for these huge ugc platforms now at the same time what section 230 said is that if you take
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Good Samaritan actions to reduce things like sex and violence on your platform forms then we won't make you liable
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because what happens in a lot of cases is that you can wave your protection legally by basically getting involved
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and so the legislation didn't want to deter these platforms for taking again Good Samaritan steps I think it's a
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pretty good combination of legislation and that's what you see right now is that Zuckerberg doesn't want to let
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these edge cases through I actually believe that they are taking huge efforts at scale they have 40,000 people
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to to give him some credit 40,000 people moderating stuff that's a big number yeah these are edge cases that get
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through and by the way you have to wonder where were the parents when all this stuff happened I mean they're
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acting like they're victims in the audience and I'm sorry for their particular cases but at the end of the
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day we do need the parents to step up here if we want to have social media at scale at all the parents have to play a
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more active role but in any event to go back to section 230 I just think that Republicans in particular are going to
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really regret getting rid of section 230 because it's only going to lead to more
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censorship I think what they're going to do if I had to bet is that they're going
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to write a very narrow amendment to that law and during some budget process or some other thing where you have a big
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Christmas tree bill this will get in there and I think it will have bipartisan support that effectively
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removes the liability protection that these companies have I I have that's not a small change that's the entirety of
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section 230 I think like these companies will not be able to use that a massive change listen there are plaintiff's
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lawyers the the plaintiff's lawyers bar you know the trial lawyers bar is salivating over the possibility that
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would happen that's why this is going to happen you know the way this is how America Works personal injury hold on
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they have personal injury lawsuits and lawsuits lined up in every jurisdiction of the United States and here's the
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thing is because Facebook and all these other sites operate you know across the entire nation and across the entire
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world they can be sued in every single jurisdiction if you allow these types of lawsuits okay Cham you go then I'm going
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to get my position and'll move on I'm going to say this in as unopinionated as a way as possible whether we like it or
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not there's an element of American capitalism that takes companies through seasons and there are seasons where
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you're growing and then there are seasons where you're ere earning and then there are seasons where if it is
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possible the Machinery if you see that you are being you are over earning for a long time the Machinery of the economy
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comes and kind of pulls you back down to earth You've Won too much and you're perceived as too powerful yeah and I'm
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not saying this whether or not it's right I'm just saying it if you look back in history these chapters have been
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written times and I and I think David what you said is the absolute single most important thing if you had to
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figure out where this was going to go is exactly that the plaintiff's lawyers the
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class action lawsuits the amount of money that they think they can extract and they compare it to the
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amount of money that they were able to extract in two different kinds of cases one was tobacco and then the second was
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Pharma and I think that they look at this class of app and the lack of empathy or the lack
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of popularity that the leaders of these companies have in Washington as a reason
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why they will probably be able to get this done to create this again I'm not saying I think that's good I'm saying
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that I think it's likely and I think when that does happen you will see a replay again it'll be slightly different
00:23:12
in terms of how it plays out but exactly the kinds of plaintiff's lawsuits that we saw in Pharma and in tobacco and I
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think it's going to play out here and David you're right that hearing to me was a setup for that yeah and if you if
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you look at this through that lens there will be some sort of negotiation and it
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might be age because when you look at this really what Americans are upset about is the impact this is having on
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kids we have a limit for the age of smoking vaping Etc and when these things happen I think an easy concession that
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Zuckerberg and others will make is hey these products will be for 16 years old and up that's my that's the age I think
00:23:50
it's appropriate 15 or 16 seems to be well he also said by the way Jason to to your point Lindsey Graham was the one
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that brought this up and Lindsey Graham made the connection to tobacco and also to Firearms yeah and then Mark at some
00:24:02
point in there basically said well listen like let's look at Apple and Google we should expect them to do the
00:24:08
actual age verification not us right because they have the devices and they have the credit cards Etc that that's
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actually a very reasonable thing for for Americans to come to the only thing that
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breaks down a little bit saxs in your argument and listen there's no perfect analogies here but if there was a
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repeated offense of a magazine on a news for example if there was some magazine that had underage you know an adult
00:24:30
magazine that had underage kids in it and people knew that and a new continued to publish it they would have liability
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for trafficking in child pornography or whatever it happens to be and so the new
00:24:41
St does get some liability so there's again no perfect analogies here but I think but Facebook and all these other
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sites are trying to remove the child porn or whatever I don't think much of that gets through at
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all you know I think maybe you have a better argument and and there is the argument that people make is that
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because of the feed they're making editorial judgments and that's publishing not Distributing however my
00:25:01
counterargument to that is that the fee just gives you more what you want I mean
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it just looks at what you're clicking on what you're viewing the time you're spending and they just give you more of
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that I don't think it's editorializing now back to Chamas point about this is the way things are headed that may well
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be right but I think we're going to regret it I mean first of all the democrat's interest one of their biggest
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donors is the trial lawyers bar and they generally will support any legislation that opens up the causes of actions and
00:25:27
that's where this has had it and what's going to happen is if they get rid of section 230 is that every time there's
00:25:33
an alleged harm that occurs every time a kid gets bullied or beat up in school every time something goes wrong in their
00:25:41
life they're going to try and pin it on social media and try to show that they embibe something on social media that
00:25:48
led them down this dark path and these types of companies are going to get sued in every jurisdiction in America
00:25:55
recently we've seen huge huge judgments related to defamation where if you have say a red politically red defendant in a
00:26:04
blue jurisdiction huge Awards I think we could probably see the opposite as well
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that basically you'll start seeing blue defendants taken on in red jurisdictions
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we've seen completely disproportionate judgments and again around defamation disproportionate relative to the harm
00:26:20
that would actually took place you're going to see that on steroids if we get rid of section 230 now historically it
00:26:25
was the job of Republicans to oppose Democrats on this stuff because they knew that Democrats were
00:26:31
Shilling for the plaintiff's bar Republicans have not done that because they're so mad at these social
00:26:37
media companies for censorship so remember when I talked about Good Samaritan liability these companies created
00:26:44
content moderation to basically try and remove the violent material the pornographic material the sexual
00:26:50
material the harassing material but in the process of doing that they started making political judgments and and they
00:26:58
started engaging in political censorship and that has made the Republicans so angry that they have now turned against
00:27:04
these companies and they are willing to remove section 230 my point is I think Republicans at the end of day are going
00:27:09
to regret that because if you remove section 230 it's going to open up this flood of litigation it'll be a
00:27:15
free-for-all it'll be a free-for-all and what's going to happen is that these companies just driven by simple
00:27:22
corporate risk aversion are going to clamp down even more I mean the content moderation is going to be even stricter
00:27:29
and because the content moderators of these companies basically are are liberals if you Empower them to take
00:27:34
down even more content they're going to take down Republican stuff even more and
00:27:39
it'll be very e it'll be very easy for the plaintiffs to Target that type of content they'll say that oh that you
00:27:46
know all of that Republican or conservative content that influenced people in a very negative direction that
00:27:51
created all of these harms there'll be lawsuits targeting that sort of content and Facebook and others will respond in
00:27:57
the economically rational way which is to shut it down completely so I think Senators like Josh Holly are not going
00:28:03
to get what they want they're not thinking straight yeah chath it's gonna backfire it's GNA backfire cham the
00:28:07
reason why this is going to happen if it does happen and and you wanted to try to
00:28:12
be probabilistic about it is because when you look back at the tobacco settlement the original settlement in
00:28:18
today's dollars is about $370 billion if you if you were the trial lawyers and you're looking at a
00:28:25
combination of Facebook and T to and all of the all of that money I suspect that they probably think
00:28:34
that the potential that they can extract from these companies is going to be multiples of that number and then as a
00:28:41
result their fees will be between 20 and 50% of that so you're talking about hundreds of billions of
00:28:50
dollars of Revenue potential that will motivate I think these folks FKS to get the law changed and then the
00:29:04
byproduct will not be framed in terms of dollars it's these are highly kinetic issues when you're talking about sexual
00:29:11
exploitation and young people and mental health and suicide and bullying the these are very kinetic issues right and
00:29:17
so bringing these to jury trials all across the United States I think that they probably think that they're on the
00:29:25
right side of history and winning those things so you know again I'm not saying it's
00:29:30
right highly emotional I mean listen it's win is to win you bring a case of say teen suicide okay horrible that it
00:29:41
happens but there's gonna every time something like that happens there's going to be a huge Temptation I'm sure
00:29:46
there'll be trial lawyers who specialize in this to bring a case against Facebook
00:29:51
or some other social media company and they're going to scour through the these accounts and try to point to
00:29:58
examples that could have led to this result and the truth of the matter is that maybe social media contributed a
00:30:04
little but what about popular culture and popular entertainment what about all the messages I'm not debating any of
00:30:10
know I'm just I'm pointing out what's going to happen what about all the messages they received not not through
00:30:15
the edge cases I got through on social media but through the mainstream entertainment I mean all the shows
00:30:19
they're watching on television all the music they're listening to the things that happened in their schools and
00:30:24
day-to-day conversations with other kids but you can't really Sue any of those other things but you can sue social
00:30:30
media the the crazy thing about all of this is that all of these lawsuits are funded in part by these hedge funds who
00:30:37
will do litigation finance and part of putting together a well performing litigation Finance fund is underwriting
00:30:44
the probability of success and I think when you flow through the probabilities and you apply it to these companies
00:30:51
largely because of their profitability and their ability to over earn and generate profits
00:30:57
I suspect that Wall Street is probably already involved if and if not they'll probably get involved in due
00:31:05
course but it's it's an unfortunate thing David I agree because this is sort of like hey the rules on the field were
00:31:12
X and folks operated by those and they are clear they are trying to do their best but again this is where capitalism
00:31:18
the part of capitalism that can be awkward and uncomfortable is when Industries over earn for long periods of
00:31:24
time other folks say I am going to compete away the returns somehow and I want a share of those profits and I
00:31:29
think that that's going to be the large motivator and it's just going to result in I think these things changing and a
00:31:35
plethora of lawsuits and at the end of the day this is about children and protecting children so the obvious
00:31:42
solution here is society has to come up with a number well sadly I think that could be a veneer Jason you know what I
00:31:47
mean hold on let me finish my thought here the the key thing is there's some age in which we all agree it's
00:31:53
reasonable for kids to be using social media and there's a certain age when we think it's not reasonable and back to
00:31:58
capitalism I think a very good point you made shth these companies are going to have to saywell if we lose the 12 to 15
00:32:04
year olds is that better for society and better for our business and we just all
00:32:08
agree that social media should start at 15 or 16 and then the handset manufacturers and the and the social
00:32:15
sites all have you have to get permission from your parents to use them period full stop and that's it and that
00:32:20
may be where this all winds up I think and then also explaining the algorithms I think is the next thing that's going
00:32:24
to happen people are going to have to disclose how these work I think you're making a very good point which is that
00:32:29
is the right conversation to have my point was that instead of having that conversation which is more societal it
00:32:36
involves David's right parental responsibility what is our role absolutely when being actively involved
00:32:41
and by the way the trends around family formation and the fact that there's way more single parent families make this
00:32:48
problem even harder because now there's only one person to check in and not two people to check in so all these things
00:32:54
societally build on itself Jason that is the absolute right conversation to have my point is
00:32:59
that's not going to be why the the rules need to get Rewritten the rules will get
00:33:04
Rewritten because there's an economic argument by a different sector of the economy in this case the trial lawyers
00:33:09
and other folks that say there's a trillion dollars to be had if we get this law changed they are motivated
00:33:15
enough to do that yeah a parasitic sector so there is a bill right now working its way through the California
00:33:20
Assembly that would go to Gavin Nome that would prohibit the use of social media by under 16y olds so that is
00:33:27
actually happening yeah I agree with you that's a better debate to have than changing section 230 in a way that's
00:33:33
going to lead to more censorship by the way just just on that point I think Republicans need to understand this in
00:33:39
particular is that the anger towards these companies is bipartisan the the outrage is bipartisan the moral Panic is
00:33:46
bipartisan you saw it on in that hearing you couldn't really tell the difference
00:33:49
between Republicans and Democrats okay so full display I wouldn't be surprised if they agreed like jamas said on some
00:33:57
sort of change to section 230 but here's the catch is that Republicans and Democrats have fundamentally different
00:34:03
objectives fundamentally Democrats want there to be more censorship they say this all the time we want you taking
00:34:08
down more content not less Republicans want there to be less censorship okay so if they agree on the same piece of
00:34:15
legislation only one of them can be right okay and the question is who's going to be right my guess is that if
00:34:22
Democrats and Republicans agree on a section 230 modification the Democrats know what they're doing and the
00:34:27
Republicans generally being the stupid party who get outsmarted all the time by democrats are going to agree to
00:34:32
something that they later regret so at the end of the day I don't think that bipartisan legislation should be
00:34:38
possible the anger is bipartisan but the objectives are not and if something gets
00:34:43
through it's going to be because Republicans make a huge mistake and just to give a tangible example of this okay
00:34:48
take the Second Amendment okay do you think that in this world where there's no section 230 that Republicans are
00:34:55
still going to be have conversations online about say gun enthusiasm no way because every time some harm happens
00:35:03
every time there's a shooting of some kind a plainist lawyer a planus lawyer is going to Su not the person who posted
00:35:10
the content talking about how much they love their guns and you know and it look
00:35:14
it could be totally innocuous okay it could be a a forum on Facebook or Reddit where people are just having
00:35:22
conversations about reviews or could be totally innocuous conversations okay people having the right kind of
00:35:29
conversations about guns okay but you know that every one of those websites that host those conversations will be
00:35:38
targeted in relation to any harm that occurs in the real world and very soon Reddit and Facebook and all the rest
00:35:44
will feel compelled to ban any conversation related to even second amendment rights okay y this is where it
00:35:52
will lead if Republicans get rid of section 230 you will be the ones targeted not not liberals all right
00:35:59
great discussion you know it's important to have the right discussion this reminds me of the abortion discussion
00:36:04
where nobody would ever talk about the number of weeks like that's at the core of the issue we could agree on the
00:36:08
number of weeks we can agree on the age here you know for for kids to to use these things maybe we could move forward
00:36:15
let's move forward on the docket here we got so much to talk about and I think the number one story of the week was
00:36:21
elon's pay package and this ruling that occurred in Delaware let me just te this
00:36:27
up here many of you probably know about this already but in 2018 Tesla's board approved a performance-based
00:36:33
compensation package for Elon was approved by 73% of shareholders Elon and his brother Kimble would have put that
00:36:41
at 80% but they were excluded obviously this is lower than maybe some other support levels according to Reuters you
00:36:48
typically see 95% for a executive compensation packet but this one was very unique it was all stock there's no
00:36:55
cash bonus no salary 12 tunes of stock was very creative in how this was put together because Elon got nothing if he
00:37:02
doubled the value of Tesla but then if he you know increased the value of the Topline revenue and the market cap
00:37:10
increased by $50 billion he got 1% more of the outstanding shares which is an amazing deal for shareholders obviously
00:37:18
because the market cap of the company wenton up 50 billion the initial plan was only worth about 2.6 billion but
00:37:25
since Tesla crushed it from 2018 to 2023 we'll throw up a chart here it's one of
00:37:28
the great runs in the history of capitalism how revenue and sales grew at this company so it made it the largest
00:37:35
comp package in the history of public markets and if you compare Tesla to Apple the second highest increasing
00:37:41
stock price during that same time period Apple went up 345 per. Tesla went up 800% in 2018 a Tesla shareholder suit
00:37:49
Elon and Tesla's board claiming the pay package was unfair the guy had nine shares a full nine shares not 10 nine
00:37:56
where $2,500 his stake went 10x in those six years so he made a fortune on that bet and then on Tuesday a Delaware judge
00:38:03
voided Elon spay package siding with the investor Elon can appeal it to the Delaware Supreme Court Sachs your
00:38:13
thoughts on this ruling I teed it up I think I got all the details in there if I missed any please add them well I
00:38:19
think in order to reach this ruling the judge had to find three things and all of them had to be the case in in her
00:38:26
opinion number one that the pay package was excessive number two that the process by which they came up with the
00:38:32
pay package was not fair meaning it was not sufficiently adversarial enough that
00:38:37
the directors in her opinion had too many ties to Elon and didn't again take enough of a
00:38:45
antagonistic role in negotiating that package and number three and I think most importantly that the shareholder
00:38:53
vote was invalid because even if the first two had been true the shareholders approved it and that would have been
00:38:58
good enough but she said that the shareholders weren't sufficiently informed and specifically I think this
00:39:04
argument hung on a few internal emails where people said that they thought that they could hit the numbers I think that
00:39:10
of the three legs of this well all three have been challenged by opponents of this verdict I mean number one yes the
00:39:17
pay package ended up being a gargant amount but you have to look at an ex Ane not expost nobody thought Elon could hit
00:39:24
all these numbers back at the time this package was negotiated let's be frank it
00:39:29
was absurd the idea that he would 10x it was a great clip with Andrew Ross sorin
00:39:34
where they're all laughing at the idea that he's going to hit these numbers remember this was at a time when Elon
00:39:38
was going through what was called production hell where he was sleeping on the floor Factory yeah the model 3
00:39:43
hadn't come out yet and nobody nobody believed that the model 3 was going to be the hit that it was in fact all the
00:39:48
stories were poo pooing that idea and basically saying that Tesla is basically screwed because they can't get the
00:39:53
production line working correctly yep you want to play this Tesla now announcing a radical new Compensation
00:40:00
Plan it could be perhaps the most radical Compensation Plan uh in history the executive will receive no guaranteed
00:40:06
compensation of any time of any kind at all he gets no salary cash bonus Equity uh he only gets Equity that that vests
00:40:13
over time but only if he reaches uh these hurdle rates which are dare I say crazy the only part of it that I think
00:40:20
is really relevant is where sorin says that the Milestones are crazy meaning that everyone thought it was a pipe
00:40:28
dream that the company would ever hit these numbers okay so that's Point number one on on magnitude on the second
00:40:34
part of the ruling about the process it is true that like in most Venture back startups there's a long-standing
00:40:43
relationship between the founder and the investors because they work collaboratively to try and make the
00:40:48
company a success there were emails that came out where Elon shows that I'm not trying to go for the maximum here so you
00:40:56
know did did the investors go in with a hostile antagonistic attitude that we're
00:40:59
going to try and pay you the least no but did Elon go in with the attitude that I'm going to try and take the most
00:41:04
no the the email showed that what they tried to do was come up with something that they thought was fair that would
00:41:11
fairly reward him for outsized performance and if he had merely increased the the value of Tesla from 59
00:41:19
billion to a 100 billion he would have gotten nothing let's just keep that in mind so they tried to come up with
00:41:24
something that would reward him for outside performance and give him absolutely nothing for merely decent or
00:41:30
good performance the third point about the shareholder vote I don't think that there was anything about the shareholder
00:41:38
vote that the shareholders didn't know I don't think that the company didn't release Elon always said yeah we're
00:41:43
going to do this we're going to be one of the most valuable companies in the world he's always been super optimistic
00:41:48
about their ability to reach these targets but if you looked at all the Wall Street analysts including sorin
00:41:53
there they thought that these targets were unreachable well also to add to that sax this had the largest short
00:42:02
position I believe at that time of any company ever people were betting with their dollars that this company was
00:42:07
going to zero there were a ton of people who the narrative was this they'll never
00:42:12
delivered the model 3 it was two years late right or something in that range it was they they kept trying to get the
00:42:17
model 3 out it was taking forever so yeah it's it's absurd also in that case sorin said in that same clip there's
00:42:23
been a lot of speculation of Elon stepping down after the model 3 is in production in the judge's ruling
00:42:28
she said the exact opposite there is no reason to believe Elon would leave except that he was running like two or
00:42:33
three other companies so it was actually quite possible that he would leave he never wanted to be CEO of Tesla people
00:42:39
forget that too he had tried three CEOs of Tesla and he only took over Tesla and
00:42:43
I remember it was because he said Jason this thing's gonna fail if I don't take it over he he tried three different C
00:42:50
CEOs in the beginning people forget that fact and there was scuttlebutt that he would hire somebody I remember there was
00:42:56
like rumors about cherl Samberg maybe getting off for the job or something like that I remember he was he was going
00:43:01
through production Hill he was sleeping on the factory floor yeah and he was talking in interviews about how
00:43:06
miserable his life was at that time I mean can confirm yeah exactly so look did he have leverage to basically say
00:43:11
you know what let's just hire a CEO yeah absolutely okay shth any uh Steelman you
00:43:16
can do of the other side here like as an investor Public Market investor sometimes when you saw that pay package
00:43:23
what did you think and I I don't know if you were sure holder of Tesla at the time or not in the mid teens I started
00:43:31
investing in public stocks as well as private tech companies and I got invited to give a presentation at the iris own
00:43:40
conference which is like the most pre prestigious Conference of public market investors you in may you show up at um
00:43:47
Lincoln Center and everybody in the audience is paying like 10,000 bucks a ticket or something and all the proceeds
00:43:52
go to a uh a foundation in support of this this gentleman irone who passed away but in any event it's like Amman
00:44:01
Tepper Einhorn and I picked Tesla and I was a very big supporter in many ways and still
00:44:10
am and I think that I knew the company frankly better than most people except for him obviously but I think that I
00:44:17
studied this company quite deeply when I and I'm just setting the context when I
00:44:21
saw the pay package I thought he's making a mistake this is unachievable I thought the probabilities
00:44:30
were in the low single digits and then he did it which just kinds of shows how incredibly Adept he
00:44:39
is as a CEO and a manager and an Executor so then you know to go back five or six years later after he
00:44:50
actually does something that so massively disproportionately positively impacted
00:44:58
investors and then to just resend it and unwind it I think is really unamerican and unfair and I think it sets a very
00:45:07
poor standard for why anybody should actually build a company governed in Delaware it makes no sense anymore and
00:45:14
just to give you that example he he and I have both now done this but like these
00:45:18
incremental companies that I've started are in Nevada they're in different places because I find the Delaware Court
00:45:25
slightly and increasingly unpredictable and acting with other mandates that they weren't ever given so
00:45:33
you what do you think that mandate is you had a place where there was highly predictable governance and they had very
00:45:41
narrow ways in which they would act and opine and I think in a situation like this where you had every opportunity to
00:45:51
actually vote this thing down and what little of the document that I saw about the communication back and forth doesn't
00:45:59
seem to support this theory that he rammed it through nobody Rams anything through over nine months where he takes
00:46:06
month-long breaks and he tells the GC this is actually more than I wanted Nobody Does that if you're ra it's the
00:46:12
opposite of grabing something through it was and and I suspect if you really asked him and I haven't but I would he
00:46:20
probably thought it was like largely crazy and so I think a lot of people thought that we that we were as
00:46:26
shareholders and I'll tell you that I felt this way getting his hard work and that he may have just mathematically
00:46:33
been mistaken so yes he got 55 or that package is worth 55.8 billion but you're missing the point where every other
00:46:42
investor made $500 billion do right and the investors investors did approve it it will have a chilling
00:46:49
effect I think and how people think about compensation it will cause companies to be even more constipated
00:46:56
and sclerotic and unimaginative as a result of this because the most talented individual
00:47:04
entrepreneurs now have even more of an incentive for incorporating in other places and also staying private and I
00:47:12
think what that deprives is the broader shareholders including this gentleman look we live in
00:47:18
America he had the right to sue he had nine shares and he was able to bring this lawsuit nine shares
00:47:26
I mean David goath yeah I mean the idea that nine Shar who 10x their money unimag I I don't know if he
00:47:34
remained a shareholder through this whole period but even those nine shares 10x in value yes yes but he would now be
00:47:42
deprived of that in this next iteration of Elon musk's because why would they ever go through this to put that
00:47:50
much work into something to be so at risk personally your own mental and phys physical health we saw him in those
00:47:57
periods and then to have it taken away I think is deeply deeply unfair sex you're
00:48:03
right this this deal was a win-win I mean if Elon could achieve these numbers it was good for him and it was great for
00:48:10
shareholders and that's why I think the key point is that 73 or 80% depending on
00:48:15
how you want to count it approved this deal I think they knew everything relevant that they needed to know when
00:48:21
they approved it this is the deal that most shareholders and most comp would want for the
00:48:27
CEO the deal is you get nothing unless you deliver an outsized return for shareholders most CEOs won't sign up for
00:48:35
this deal most CEOs work their way up through the corporate ladder they get into the CEO chair and then they pay
00:48:41
themselves huge amounts of money regards of whether the company succeeds or fails
00:48:45
and that's the deal they want because they don't really have confidence in themselves to deliver what sorcin called
00:48:52
the crazy outcome Elon had the confidence in self to deliver the crazy outcome and nobody was really
00:48:58
complaining about this until like you said this small shareholder who's really basically just you know a name plan of
00:49:06
for the trial lawyers bar or somebody who wants to get Elon to bring the suit 6% to create 600 billion in value I
00:49:15
mean it's quite a bargain folks and I think if you went to Ford or GM and said hey would you like Elon to be your CEO I
00:49:22
think that'd often half the company Mary Barett doesn't want this deal yeah no jcal Sac said something really important
00:49:28
that you just mentioned as well which is that if you actually look at the average
00:49:31
Compensation Plan of most public company CEOs it actually is very much counter to
00:49:38
shareholder value I'll give you one simple example if you look at the number of of CEO comp packages that are tied to
00:49:44
earnings per share growth but then if you actually look at how these CEOs achieve their EPS targets yeah they do
00:49:52
it by raising debt so indebting the company right increasing the Enterprise Value by by loading the company up with
00:49:58
debt and then driving repurchase plans and what what do those do I mean look if you look at Disney where do their
00:50:04
repurchases come from from debt so does debt help an equity shareholder it categorically does not under no world
00:50:11
does it do that however for the CEO and for the handful of investors that that can hold on for a long periods of time
00:50:19
what have you they benefit from a lower share count they benefit from increased EPs and then the CEO gets compensated
00:50:25
and so to say that tacitly what you disapprove of are performance incentives and what you are actually approving of
00:50:35
are mechanics that saddle a company with debt and allow basically gaming of numbers is what you've implicitly also
00:50:45
said and this is where I think the Delaware Court used to be known for a level of intellectual Clarity that would
00:50:53
have prevented that implicit assumption but that's now what's left on the table and I think it will have a ripple effect
00:51:00
across how so many other companies design design their compensation plans how CEOs think about risk no CEO as sack
00:51:08
said will ever want an incentive Laden plan like this ever they will want because 10 years later you could do all
00:51:14
the work and then it gets cancelled canell so why would take risk they will want something that is totally
00:51:21
gameable right where you'll have 90 plus% support and approval because of how vanilla and benign it is on the
00:51:29
surface but it will actually be quite a terrible plan underneath the surface and
00:51:34
what I mean specifically are these EPS targets for CEOs so Elon did the one thing that was crazy which was I'm just
00:51:41
going to do it based on pure profitability and performance and he gets punished and all
00:51:47
these CEOs in this other class who were like let me Saddle these companies with debt that actually undermine
00:51:52
shareholders have been rewarded there is already a mechanism for somebody who disagrees with the comp package this
00:51:58
person who owned the nine shares could have sold their shares it's a liquid Market at any point in time that person
00:52:02
could say I don't agree with this I'm taking my nine shares and $2500 I'm gonna put it in apple I'm gonna put it
00:52:08
into I like Tim Cook's pay package better I like Benny off package better and I'll make my bet there person had
00:52:14
Choice yes SX this person was not a victim he's not a victim because he could have sold the
00:52:19
shares and bought other shares and he's not a victim because he 10x his shares and beat the market yeah I mean look I I
00:52:23
don't place the blame on the shareholder per se because this is really about a judge's interpretation of Delaware law
00:52:32
and what companies are allowed to do so whether the shareholder was harmed or not or had one share or million shares
00:52:39
that's just the way that this case gets into court the question is the interpretation of Delaware law and again
00:52:45
the part of this that I would go back to that that I think was the mistake is that I think the shareholder vote was
00:52:50
valid um I think the process was valid as well I don't know that the process has to be this extremely adversarial
00:52:58
process where one side's pulling for the most and one side's pulling for the least I don't think either side operated
00:53:03
that way but again I think shareholders knew what they needed to know and the evidence of that is in all of the public
00:53:09
coverage at that time nobody thought Elon was getting a good deal right no one thought he was getting
00:53:15
sucessfully good they thought he was getting a delusional deal meaning delusional for him and everybody seemed
00:53:23
to be okay with the idea that if somehow Elon could pull off this miracle that he
00:53:28
would be entitled to this compensation and he would get nothing if he didn't now again I would go back to do you
00:53:35
think Mary Bara would have wanted this deal while Elon was spending the last five six years making Tesla go 10x let's
00:53:44
look at GM GM stock price was trading more or less in a flat range I don't even think the share price
00:53:52
doubled yeah compare it to see the compare two button there put compare two and then put Tesla in there right so if
00:53:58
Mary Bara GM had signed up for that comp package she would have gotten absolutely
00:54:01
nothing which is why I'm sure that the thought in everyone crossed their mind of having an all incentive based comp
00:54:08
package that doesn't even start until you at least double the value of the company by the way on those
00:54:13
Milestones it wasn't just the share price it was share price and revenue or profit targets being met so in other
00:54:21
words if the stock just rallied because of macroeconomic condition like for example interest rates go down
00:54:27
and then all of a sudden the whole stock market goes up that was not good enough
00:54:31
it was also tied to the combination of stock value increases with revenue and profit targets being met it was a comp
00:54:40
package that couldn't be gamed I mean you have to hit the numbers in order to get the the comp package that's what she
00:54:46
got and I don't want to pick too much on Mary Barry here I guess I'm picking her
00:54:50
out because Joe Biden said that she created the EV Revolution yeah well done they've sold 17 cars and I think they
00:54:57
canceled the car yeah congratulations by the way there was there was a remarkable
00:55:02
article in the Wall Street Journal just in December where they finally admitted that this whole idea that GM had been
00:55:09
leading any kind of Revolution or had been a transformational company was revealed as basically a
00:55:14
ruse but look you you have to wonder how much of this is political I mean Delaware is Joe Biden's State he's the
00:55:22
senator there were articles describing how this judge was connected to a law firm that had helped Joe Biden
00:55:31
get elected and you just kind of wonder whether Biden's directive from the White
00:55:37
House Podium that we got to get this guy or we got to look into this guy that he's an enemy which has been reflected
00:55:43
through all these different administrative agencies sudden actions against elon's companies for The Glass
00:55:49
House starlink in the FCC yeah there's been a whole bunch of these issues and you just wonder is is this another
00:55:56
manifestation of that yeah I mean the the conspiracy theories are quickly becoming closer to reality and we
00:56:06
definitely need to investigate that for sure because the FCC thing is crazy spending $15,000 putting fiber into
00:56:13
people's homes when you could spend $1,500 giving them starlink makes no sense and those same people who have to
00:56:17
wait for fiber this on our previous episode they're just get starlink anyway they're gonna buy starlink while they're
00:56:23
waiting for the government fiber for 10 years it's absurd I do want to uplevel this just back to what I was saying and
00:56:29
and I'll try to I'll try to make the point better I think I think it's really really
00:56:34
unfair what's happening to Elon but I want to take a step back and think about just the bigger picture if we want an
00:56:44
economy of vibrant companies that do great things we're going to need to reward people to work at those companies
00:56:52
and in order for the United States to sort of continue to exert some amount of dominance in the
00:57:00
areas that we think are important we need to be economically vibrant right and fair and fair and the problem is
00:57:06
that this really perverts incentives and it's going to exacerbate a trend that I
00:57:11
think has actually held a bunch of our companies back so the first thing I just wanted to show you guys was just this
00:57:16
little thing that it's just a pie chart that shows okay how do CEOs get paid right so we want CEOs go and run really
00:57:26
important companies right we want those companies to do great things in the world we want
00:57:31
these CEOs to be deeply motivated to go and push the boundaries of what's possible right we want all that and so
00:57:37
we want to compensate them to do those things this is just a representation of how CEOs have structured their pay
00:57:43
packages and you'd say wow all of these numbers seem reasonable return on Capital total shareholder return
00:57:49
earnings per share so what you need to do then is double click into this right so this is how CEO pay packages are made
00:57:58
but the problem is and Jason this is my problem with a bunch of these companies that all the returns all that
00:58:04
shareholder return that you saw the return it's all driven by share BuyBacks Yep this is an artificial gamesmanship
00:58:12
of performance this is not companies pushing the boundaries you know this is not Disney figuring out it's not
00:58:18
Innovation this is this isney this is Disney creating foot faults and falling into potholes of their own making
00:58:25
but you can drive great compensation because you can game the way that you are paid this doesn't make America great
00:58:34
it doesn't create American exceptionalism in fact it just creates a bunch of financial engineering that
00:58:41
results in marginal companies and David just gave an example of one that could be considered that so the point is that
00:58:48
when you have one person that tries to Buck this trend I just think it has a huge
00:58:55
impact by basically saying hey play the game like everybody else just game it just dial it in from your country club
00:59:04
make sure that you become a member of Augusta that's more important to us than actually sleeping on the factory floor
00:59:10
and don't take risk I mean if you think about what do you do if you're Apple you're Google you're Microsoft you're
00:59:15
sitting on tons of cash is the safe thing to do you see what they do you just buy back the shares buy back the
00:59:21
shares you can't do m&a you issue debt yeah and then you buy back the shares Arbitrage you encumber the shareholders
00:59:29
with debt and then you artificially inflate total shareholder return and earnings per share and the return on
00:59:36
invested Capital because of how we can play these games in America so right now what we are doing is we are not
00:59:42
motivating CEOs to run great companies we're motivating CEOs to understand Financial
00:59:49
Arbitrage the result will be crappier companies that dimin American exceptionalism that is the only outcome
00:59:57
perfectly said and and there really are two caveats there number one we have to let m&a occur as well because that's a
01:00:03
better thing to do in some cases with this with this excess Capital profits people have sitting there and the only
01:00:08
time really to buy shares back is when you think they're undervalued you would agree well to your point I actually
01:00:13
think you're absolutely right if you have a bunch of CEOs that don't know what they're doing which is what these
01:00:17
charts kind of show let them buy whatever they want because they're going to screw it up and that's fine for us
01:00:21
anyways great for fluid Marketplace the CEO that you don't want to have be able to buy companies is the actually
01:00:29
motivated one to get paid when things go really well and to be you know to be more profitable so that would be the CEO
01:00:36
where you would be scared oh my gosh more m&a for that person may be bad but more m&a for these CEOs is who cares
01:00:42
yeah Microsoft starts buying a bunch of stuff Google starts buying stuff at their primes man that's scary right when
01:00:47
Bill Gates went on a heat or he bought I think he bought PowerPoint a bunch of the sweet
01:00:53
was bought not created and then Google and Facebook man they went on heaters YouTube Instagram WhatsApp and that was
01:00:59
the Golden Age of m&a all right we got a couple more things on the docket I want
01:01:03
I just found these stats go ahead sex great conversation so just while we were talking I just looked up what Mary
01:01:08
Bear's compensation was over the past several years and according to this Source she was paid $167 million for
01:01:18
four years so while Elon got zero thanks to the judge's decision Mary Barett basically if you add in probably the
01:01:24
fifth year let's call it roughly $200 million of compensation over the last five years now look at the stock chart
01:01:31
of GM literally this it is the same price today as it was five years ago it's $38 a share today it was $38 a
01:01:40
share five years ago no but it's worse it's probably worse because they've issued options since then so there's
01:01:44
dilution you have to take in so it's it's worse than that actually but at best the stock price is flat and the
01:01:51
stock basically fluctuated in line with market trends so when there was an asset
01:01:56
bubble in 2021 the the share price went up about 50% and she got even more stock
01:02:02
and options during that time but it was it was a no loose proposition basically she got paided regardless of how the
01:02:08
stock did and then when there was simply Market volatility she did even better one of the nice things about elon's
01:02:14
package is that unless Tesla at least doubled in value he would get nothing and it was tied to Milestones around
01:02:22
revenue and profit so he couldn't just Market volatility no to getting more comp if you gave this executive the same
01:02:29
deal as Elon she would have had to double 38 so you know she would have had to get to
01:02:36
76 rough 80 bucks a share she have to get to 80 bucks a share before she got anything I bet you if she got zero she
01:02:42
got paid $1 in her healthare and she had to get to $80 a share I bet you that would be an80 stock price well I don't I
01:02:48
don't know if she has the ability to engineer that outcome but I doubt I oh so she's saying she's
01:02:56
unqualified no well the Wall Street Journal said it The Wall Street Journal just had this tenure no that's my where
01:03:01
they said that she failed they they're they're hiding the incence then yeah well look I mean I don't want to say
01:03:08
she's incompetent I just want to say that the stock price is the same The Wall Street Journal had an article
01:03:11
talking about all her trans all of her transformation initiatives have failed she swept roughly 200 million over just
01:03:17
the last five years I think she's been there 10 so how is she in charge she's probably made several hundred million
01:03:23
dollars and and the company hasn't created any value for shareholders so how is she still in charge because Jason
01:03:29
this is the way the Fortune 500 works it's a country club okay who gets appointed to these companies these
01:03:37
companies are not run by Founders they're not even run by VCS who have serious skin of the game the kind of
01:03:42
directors that this judge didn't like okay it's run by people who play the game they basically are on other boards
01:03:50
and it's basically a backs scratching club and they choose the CEO they choose someone who's politically Savvy who's
01:03:57
worked their way up through the system who donates to the right people who can get Joe Biden to come to a factory and
01:04:02
talk about how great they are and and hold an EV Summit at the White House and invent this this fiction that they were
01:04:09
responsible for this Innovation this is basically how the system works so corrupt I'm glad that women have been
01:04:15
admitted to this country club it is still a country club it is still a backs scratching Club it is basically a
01:04:22
collection of people who don't create any value but pay themselves enormous amounts of money hob out with the right
01:04:26
people and work their way in with the powers that be at the White House who then talk about how great they are while
01:04:33
actually accomplishing nothing nothing 0.0 I think the common through line in these two conversations we've had this
01:04:40
morning is about just how capitalism can be perverted if you will by a small group of actors in the first example I
01:04:51
think what we were talking about is the Trial Lawyers Association and their ability to impact and influence what is
01:04:58
going to happen around section 230 and in this example I think what it speaks to is the influence that a small group
01:05:05
of Consultants can have in having built a very thriving business in designing these compensation plans for CEOs and it
01:05:12
reminds me of a of a clip of Buffett and Munger and Nick if you just want to play
01:05:18
it I think they say it in very clear plain English and not to debate their opinion just to State it but Nick if you
01:05:23
want to we do not bring in compensation Consultants we don't have a human relations department that we don't have
01:05:29
we don't the headquarters as you could see we don't have any human relations department we don't have a legal
01:05:33
department we don't have a public relations department we don't have an investor relations department we don't
01:05:37
have those things uh because they make life way more complicated and everybody gets a vested interest in going to
01:05:44
conferences and calling another consultants and it takes on a life of its own well I would rather throw a
01:05:50
Viper down my shirt front than hire a compensation consern consultant [Laughter]
01:05:59
um tell me which kind of Consultants you actually like oh man wal darford Statler you know
01:06:06
from uh the Muppet sacks remind me of Statler or waldor wellar yeah well you mentioned grumpy you mentioned this is a
01:06:15
problem in capitalism I think there's two kinds of capitalism broadly speaking there's crony capitalism and there's
01:06:20
risk capitalism risk capitalism is the founder who starts with nothing but an idea along with the investors who are
01:06:29
willing to write a check knowing that n9ine times out of 10 it's going to be a zero but maybe in that one out of 10
01:06:36
chance it's going to be an outsize return that is true risk capitalism everyone has skin in the game they work
01:06:41
together entrepreneur board members to try and create a great outcome and they work out an arrangement where everyone
01:06:49
benefits it's a win-win situation okay that is risk capitalism that's the part of our economy that drives all the
01:06:56
Innovation all of the progress all of the job creation then you got crony capitalism you got these companies that
01:07:01
have been around for a hundred years the value was created by people long dead and it is now managed by both directors
01:07:09
and professional managers who work their way up through they go to like the right
01:07:13
business schools and they join the right organizations they donate the right politicians and they somehow engineer a
01:07:21
situation where they get in control and then they pay them eles as much comp as they can possibly justify whether or not
01:07:28
they create any value for the shareholder that's what we saw at GM and that's crony capitalism and you know
01:07:34
while they're doing it the president's son is probably going to figure out a way to take a nice big chunk out of it
01:07:39
too okay that's that's the system that we have K Co with the great here we go now which of these two systems receives
01:07:49
the brunt of the criticism by the mainstream media who is attacked and who is celebrated okay here we go there's your
01:07:59
rant a great Point I've seen a zillion attacks on Elon Musk I saw one article pointing out that all of Mary Bear's
01:08:06
transformation in General Motors was a failure created no value for shareholders and the whole thing was
01:08:11
basically a fraud well how's the union doing and how did the Union One article and I'm frankly shocked that the Wall
01:08:17
Street Journal even ran that article yeah okay yeah and how did the Union do and and who did the Union get behind and
01:08:23
vote for yeah let's maybe double click on a couple items there we'll see all right listen I want to go over one more
01:08:27
thing we're cooking with oil here and I just wanted to talk a little bit about IPOs possibly coming back I just
01:08:33
interviewed Alexis Ohan and the founder of Reddit which according to Bloomberg they've been advised by
01:08:39
potential IPO investors to Target a $5 billion valuation they're going to go public possibly in March which is wild
01:08:46
that's only a couple weeks away in Peak Zer Reddit had raised at a $10 billion valuation that was back in 2021 they
01:08:53
were valued in 15 billion in the secondary Market that's where people like previous employees Angel Investors
01:08:58
Etc might trade their shares and so if it goes out of five it's going to be between a 50% two3
01:09:07
haircut and it is trading at 4.5 billion jamat we talked about this a bunch uh the down run IPOs instacart I think
01:09:15
being the best example they got out but they've been hovering at a really low number for a long time and people have
01:09:22
been talking about them possibly being a out candidate by door Dash or Amazon or
01:09:26
Uber so your thoughts on the the Reddit IPO news I think that if I had to price the
01:09:33
IPO I would be modeling two important levers in the business the first is what is the actual attainable revenue from my
01:09:44
audience and so what is the arpo of the average Reddit user and you can model it
01:09:53
as a distribution and I think Facebook has the best data because they've been publishing it in their quarterly returns
01:09:58
for a very long time now for over a decade which is there is a distribution of value of a Facebook user economically
01:10:06
right at the upper end you have the folks that are on Facebook proper in America in a certain age band in certain
01:10:13
states that are probably like 3040 $50 arpus all the way down to in developing countries those users are worth low
01:10:22
singled digigit dollars economically and I think that people will have to very much understand what is the average
01:10:29
Reddit user and what is the distribution of economic value that they represent that's the first thing and I think that
01:10:36
that's really the thing that will determine whether it's worth 5 billion or 10 billion or frankly two
01:10:41
billion and then the second key lever it will be the risk factors in the IPO because where the
01:10:49
shareholder lawsuits will come from which will really dictate if if the how the hedge fund Community buys this
01:10:57
thing is going to be the potential for my ad ran against content that is deeply offensive to me that whole construct and
01:11:07
I think that they are going to have to very carefully ring fence that liability to get this IPO to be successful but
01:11:14
also for them to execute a scaled ad Revenue business and not spending enough time on
01:11:22
Reddit don't know how bad of a problem this is I don't think it's 4chan or 8chan as an example but I also don't
01:11:30
think it's Facebook and Instagram and so it's kind of somewhere in the middle and
01:11:33
I think that those risks are really what's going to determine its terminal valuation you naed it they they've
01:11:38
always been under monetized $800 million in Revenue reportedly and 400 million monthly active user so two bucks a user
01:11:47
compared to you know 2030 40 for the prime users in yeah on Facebook's Network so it's
01:11:55
totally underutilized part of it is it's a little bit of spicy content part of it
01:11:59
is that that's the number including all the international users of course sax there is this concept that Reddit has
01:12:05
the greatest pool of data for large language models and um you know with something like say Kora Maybe YouTube
01:12:14
amongst the great pools of data so you think there's a play here with that they have talked about they want to get paid
01:12:20
for licensing and that if you want to use their data for your language mod you gotta get
01:12:24
your thoughts a sure I mean that's going to be an incremental Revenue source for
01:12:27
sure it's hard to know exactly how valuable that is because we're still in the early Innings but um I mean they can
01:12:31
definitely do something with that data grock's whole competitive Advantage is having exclusive access to Twitter's
01:12:37
data which is updated in real time basically by hundreds of millions of users so yeah look that data is valuable
01:12:43
we don't know how much I guess the numbers I saw were that they're doing about 800 million of Revenue growing
01:12:49
about 20% a year the $5 billion valuation seems I think pretty good I mean is it down from
01:12:56
10 at the peak in 2021 sure but everything is down since that Peak I mean that was definitely a bubble I mean
01:13:02
I can tell you we we bought some shares as a late stage investment I think in 2018 at a $2 billion
01:13:09
valuation so you know a 2 and a half X in five years I mean it's not setting the world on fire but it's not a bad
01:13:15
outcome yeah and you know the investment bankers will know how to price this to take it out and make it successful yeah
01:13:21
and if it had a if it was a becomes a billion dollars in revenue and they have a 20% profit margin 200 million you you
01:13:29
can you can start doing your back of the envelope math there for 25 EA you know 20 times price earnings ratio so it it
01:13:36
doesn't seem outrageous it does seem like such valuable and own under monetized uh asset do you think there's
01:13:42
a likely acquirer here if you were to think about somebody who might want to own this do you think it's a Microsoft
01:13:47
for the data Google for the data yeah I think there's probably people who' like to own this but the problem is that well
01:13:53
two problems one is they just can't get it through we've talked about this before the m&a window is even more
01:14:00
closed than the IPO window I would say yeah and the other thing is just because of the runchy content and all of the
01:14:08
brand issues that come with that it's not clear to me that let's say a Microsoft would want to own that
01:14:13
headache you know they might not want to be hauled up in front of these Congressional hearings that we talked
01:14:17
about these kangaroo courts where it's very easy to go on Reddit and pick out well what about this post what what
01:14:23
about that post why you let that one through why' you let that one through well because it's a it's a platform of
01:14:28
user generated content where hundreds of millions of people post what billions of
01:14:32
items and you can have the best content moderation policy in the world there's always going to be edge cases that get
01:14:37
through I think that Reddit is the Honeypot of of edge cases it is the place you go when you're just so
01:14:43
disaffected that you can just let loose anonymously it's not right I mean at a certain point you have to you have to
01:14:48
realize that when people cherry-pick those edge cases what they're really saying is a platform like this shouldn't
01:14:54
exist yeah right because there's no way to eliminate every single one or which is basically like saying if you just
01:15:01
take platform you just say conversation you're saying this conversation shouldn't be allowed to exist they don't
01:15:06
want user generated content to exist they don't want un what remember what the New York Times called unfettered
01:15:11
conversations unfettered conversations they want controlled conversations yeah yeah pretty dangerous it just reminds me
01:15:19
of remember that Bob Iger for like 10 seconds was actually considering Disney buying Twitter can you imagine if they
01:15:27
actually bought it what would have happened I mean it would have been chaos well it would have been it would have
01:15:33
been content moderation on steroids where yeah they would have massively empowered and scaled up content
01:15:38
moderation even more than what Jack dorsey's Twitter was doing so I think Jack actually he was unable to
01:15:44
operationalize his principles but he did have principles in favor of free speech
01:15:47
to some degree whereas Disney I don't even think has those principles so they would have censored everything yeah
01:15:56
you know it's paradoxically the most censored social media platform is Tik Tock like my Tik Tok is bulldogs and
01:16:04
sandwiches like you chamath and then Soprano's clips and every time there's a Sopranos Clips when somebody gets
01:16:09
whacked they have to blur it out or they the person who's uploading it takes that
01:16:13
clip and and cuts out the actual person being whacked it's crazy all right I got
01:16:17
to give saaks his red meat we're going to now go to our war correspondent David saaks but in all serious
01:16:24
tragically we had a terrorist attack and the response from some of our Republican Senators was absolutely
01:16:34
insane they want to bomb Tran and go after Iran and start World War I saak I know you have some strong feelings on
01:16:41
this and you're always about diplomacy and pursuing peace what's your reaction to Lindsey Graham and the
01:16:48
neocons well you had several Republican Senators try to go Biden into striking Iran immediately it was you know not
01:16:55
just Lindsey Graham who's in favor of every war but it was Mitch McConnell the Senate repan leader John Corin and there
01:17:03
are some other ones who were you know demanding immediate retaliatory strikes it's very unfortunate that we had three
01:17:10
of our troops get killed and another dozen or so get injured this was at a a base on the border between Syria and
01:17:19
Jordan some of us have been saying that we have no business being in Syria I mean I tweeted 10 months ago that all we
01:17:26
were doing was putting our troops In Harm's Way and risking getting drawn into a larger configration and that's
01:17:35
exactly where we are right now I mean you had to know and many commentators pointed out that these bases are very
01:17:42
exposed they're very vulnerable they don't have good enough air defense against they don't really have a good
01:17:47
answer to the Swarms of drones that these local militias have and based on the intelligence we
01:17:55
have right now our this base is Tower 22 was attacked by an Iraqi militia that's
01:18:02
operating that there why did they get attacked well these militias want the United States
01:18:08
out of their countries they want them out of Iraq the government of Iraq has said we want the us out of Iraq the
01:18:14
government of Syria says we want you out of Syria we are there without a congressional
01:18:20
authorization for milit Force I mean what are we doing in Syria we're just occupying that country without again
01:18:29
without a war being ever declared against the Assad regime so some of us have been saying we need to get out of
01:18:35
there for some time and if we don't it's inevitable that something like this going to happen and sure enough it did
01:18:40
and when it does happen you get this lunatic friends who unfortunately are some of the leaders of the Republican
01:18:45
Party calling for a larger war against Iran and I think Biden to his credit is so far held back and he has not lot of
01:18:53
restraint lot of rest has shown some restraint however they've been actively talking about this and all the reports
01:18:59
are they're gaming this out and there is going to be some sort of retaliatory strike it might be focused on these
01:19:06
militias in Syria and Iraq it could be attacking Iranian assets we don't know if they do attack Iranian assets Iran
01:19:15
has promised a response so I think the Biden presidency is at a little bit of a Crossroads here depending on the action
01:19:21
they choose we could very rapidly find ourselves engaged in a wider Regional war on five different fronts I mean a
01:19:28
war with Iran would in involve Us in Iran Iraq Syria Lebanon and Yemen where we're already bombing so this could turn
01:19:38
into a huge congration in the Middle East I don't think should be drawn into this yeah no the answers here and yeah
01:19:47
the the craziness to me chath is like these people want to go bomb Tran because you
01:19:54
have you know some militias doing these activities I mean this like would be you
01:19:59
know some terrorist uh who's French we're going to just blow up Paris and a bunch of civilians are going to die it's
01:20:04
there's no proportionality here and there's and there's there's no direct relationship here it's like two or three
01:20:10
steps removed what are your thoughts Shaman I think the thing that we've lost in this whole issue is how is it
01:20:18
possible that a multi- decillion dollar drone system was designed by the military-industrial
01:20:26
complex in a way where when one of our drones is coming back and there's an inbound drone that doesn't seem like a
01:20:32
weird Edge case where we couldn't handle it because at the at the root cause of what happened was a pretty faulty way in
01:20:40
which we were dealing with confusion about what was our drone and what was the enemy
01:20:47
drone and I think that that's also worth talking about before we talk about bombing another country is
01:20:53
we're the most sophisticated technological country in the world our weapon systems are the most
01:20:57
sophisticated weapon systems in the world am I supposed to believe that if Palmer lucky and andril were building
01:21:04
this system that this is what would have happened absolutely not yeah that there's no beaconing system on these
01:21:09
drones that you can turn on remotely that there's no way when you see the number of drones in an aerospace that
01:21:14
are yours so that you can quickly triangulate which ones are not yours and all of this to me I think is also worth
01:21:20
exploring because if it's really again faulty engineering because of this Monopoly
01:21:29
oligopoly in certain sectors of our economy that then cause us to go and make a foreign relations decision about
01:21:35
going to war and we don't even talk about this thing as a root cause it's worth talking about a different example
01:21:41
on the same vein of this is like it turned out that in that Alaska Airlines issue they actually ship the plane
01:21:49
without the door plugs oops we are are the most sophisticated country in the world
01:21:55
guys our our most sophisticated Industries are not showing their best in this moment and I think that this is yet
01:22:04
another example before we make totally separate decisions about war and implicating our children's
01:22:11
safety we can also just ask wait we spent billions of dollars on this thing how is it possible that this that this
01:22:18
like honestly like this is exception handling this is like CS 101 type stuff guys door plugs put the plugs in the
01:22:28
door it's it's regulatory captures the answer this is crazy there's no competition and they're they're charging
01:22:34
Cost Plus they're not innovating anymore and they need competition right just like SpaceX was massive competition for
01:22:42
all of the governmental agencies around doing space extion in our industrial complex and now the way to answer that
01:22:52
turns out to be a foreign policy decision to go to war and I think that those two things need to be decoupled
01:22:58
for a second so that we can deescalate and say hold on a second this thing happened but why did it happen meaning
01:23:05
of course people are going to attack us we are the bright shining beacon on a hill people should hate us and want to
01:23:11
attack us that's just the nature of being a winner to be fair they're not attacking us because we're The Shining
01:23:16
city on a hill over here just minding our own business they're attacking us cuz we're I Iraq
01:23:24
expect that we should expect that these things work we should expect it so there's a few things happening here with
01:23:30
our military-industrial complex so the first one is that drones have been a huge game changer we've seen this in the
01:23:35
Ukraine war the one really new technological element has been drones has completely changed the face of war
01:23:42
and one of the things it does it's a huge leveler because these cheap drones give these militias in Syria and Iraq or
01:23:50
it gives the houis in Yemen a capability to strike at us that they didn't have before and we saw that our air defenses
01:23:58
are just not really cut out to deal with this there was that article describing how it was costing us $2 million to use
01:24:06
an air defense missile to shoot down a drone or a cheap rocket that costs just a few thousand dollars so you have this
01:24:14
asymmetric Warfare now where we simply cannot afford over a sustained period to shoot down all these drones but wait
01:24:23
sorry can I ask a question yeah our most important partner in that region is Israel Israel has what we have thought
01:24:32
to up until now an impregnable system right the Iron Dome and which is meant to deal with all of these edge cases
01:24:40
right projectiles of All Sorts shapes and sizes coming in every direction yeah I've never heard of when the Iron Dome
01:24:46
has failed and we are sending Israel billions of dollars why couldn't we actually just buy the Iron Dome system
01:24:53
for them and say you know what we're going to secure our bases in Syria and in all of these other places yeah well
01:24:59
I'll tell you so there's a a military analyst named Steven Bryan who I follow he's a former under Secretary of Defense
01:25:05
and he talked about this he has been calling now for before this attack happened to send two iron Don systems to
01:25:12
Syria to Iraq to basically the Middle East to protect our troops sense he says he said in his article that the reason
01:25:18
why the US Army hasn't done that is because they didn't want to buy the Israeli system they favoring some
01:25:23
homegrown system that hasn't corrup corruption so there's a there's a big problem there that we should be
01:25:28
deploying Iron Dome there look I would just get out of that area I don't think we should be there but at a minimum if
01:25:33
we are going to stay there we have to protect our troops so yes we should be deploying Iron Dome but the problem is
01:25:39
that again just these drones are a GameChanger and they can overwhelm a system even Iron Dome can be overwhelmed
01:25:48
if uh Israel gets into a war with hisbah which supposedly has drone it's n equals
01:25:53
1 we were overwhelmed by n equals 1 well I mean I'm just I'm saying like it's true right we were overwhelmed when
01:26:02
n equals one there was a report just the other day that one of our ships in the uh red SE it was fired on by a a missile
01:26:11
from Yemen and it made it through the Aegis system and they they took it down with their last line of defense these
01:26:18
like close in guns that was kind of scary because the hoochies have missiles that are capable
01:26:25
of making it through our main air defense system for ships so I'm just saying like these what's happening with
01:26:30
these cheap rockets and these drones is it's giving our opponents capabilities that level the playing field a little
01:26:37
bit but this is what I'm saying I understand that concept but I also understand that we have people on the
01:26:41
ground that work for Team America again I'll just I'll take Palmer lucky as the example who frankly I would bet on a
01:26:48
thousand times over a hooti rebel he'll outsmart and outow these guys why aren't
01:26:53
our best and brightest people in a position to make these things because you're right the defense industry is
01:26:58
dominated by five of these Prime defense contractors who work on Cost Plus or basically an oligopoly they're not
01:27:04
particularly Innovative but they just keep charging more every year for the same product so we're getting less for
01:27:10
more money and they're led by a leadership who are motivated in a way where the returns that they generate and
01:27:17
the success and the progress they make is not really coupled to progress right it's not really coupled to building an
01:27:23
even better version of Iron Dome it's about as you said having a job that you've earned over many years of fty and
01:27:31
then getting paid an enormous amount of money to just keep it going in the same direction even if that direction means
01:27:37
you've been a drift for decades that's the shame of it and then you're seeing every day like isn't it incredible
01:27:42
Lindsey Graham is saying hit Iran and I bet you Lindsey Graham is to getting donations from those five companies I
01:27:48
don't I don't know but look there's no question that we we need to shake up the military-industrial complex we need to
01:27:54
get a lot more startups in there there's a lot of VCS now who are funding defense
01:28:00
startups so it is a big area andrel obviously is kind of the leader of the pack but there's a bunch of others
01:28:05
getting funded I saw that Eric Schmidt even created a drone company so this is going to be a huge area of innovation
01:28:12
and I think that because of the Ukraine war the Pentagon must now realize the urgency of being able to mass produce
01:28:21
effective drones as well as create effective drone air def counter measures yeah counter measures yeah just to give
01:28:28
you a sense of this like we led the series a in a company called sa drone about seven years ago and they
01:28:36
make drones for the Seas right and what we did was we put these massive sensor arrays in these drones and because of
01:28:45
because of these sensors it has perfect visibility into what's going on in any condition of weather right day night it
01:28:53
doesn't matter and so these drones in the Middle East all over the waterways allows us to have perfect understanding
01:29:00
of what's going on but despite that it has taken years for us to be in a position to generate enough revenue and
01:29:07
now we're finally at that scale with the Navy and and whatnot but David to your point it is
01:29:13
incredibly hard for startups no matter how in Innovative we've been to break through this log Gem and it and the
01:29:20
reason is because what we are at is not what's rewarded we are good at engineering and execution but what is
01:29:26
rewarded to your point is this very lobbying specific form of relationship management right and cultivating certain
01:29:36
pockets of influence it's a very difficult game to play if what we come as brigh eyed bushy tailed from
01:29:42
California with a product that we think is superior that actually helps Advance American
01:29:47
exceptionalism it still doesn't always land it takes a lot longer than it needs to in some cas cases yeah I mean so the
01:29:53
Pentagon and the military industrial complex are is going to to be a lot more permeable to this type of innovation I I
01:30:00
think that they're going to be incentivized to do it now because they have to see what's happening in Ukraine
01:30:05
what's happening in the Middle East and they realize that the Gap is closed and we had three innocent people that were
01:30:10
killed these people didn't deserve to die they didn't deserve to die in an N of one it's not an edge case n of one
01:30:16
there was a drone come on guys we're better than that and so what do you think's going to
01:30:21
happen if we get into a war with Iran every single one of our bases in Syria and Iraq and we have a lot are going to
01:30:27
be sitting ducks to your point you're forcasting you're you're orchestrating a game plan for them because it's like if
01:30:33
you if you were going to enter a war does it take a brilliant strategist to sit in the room and say wait a minute if
01:30:38
they can't defend against one what happens when we send 12 yeah what happens when we send 12 to every single
01:30:43
place and and to your point Jason it's this is like the unnecessary escalation that then happens because then we have
01:30:50
to respond with more Force energy it it was a certainty look we I've been talking on the show about
01:30:59
how our bases in Syria and Iraq have been under attack by these militias for months I think the last time we talked
01:31:05
about it there had been something like 80 attacks and it was just a matter of time before Americans servicemen were
01:31:12
were killed unfortunately and so like you said jamat this was predictable what's also predictable is that if we
01:31:19
get in a war with Iran every single one of our bases will be attack act if we strike on their soil they will strike
01:31:24
back and they have Hypersonic missiles they have Precision missiles they can destroy every one of these bases unless
01:31:31
those bases have the top-of-the line air defense which most of them don't but if
01:31:36
you go to someone like Lindsey Graham and say listen our troops are vulnerable we need to basically either pull out of
01:31:43
Syria and Iraq or we need to consolidate down to a few bases that have Iron Dome
01:31:47
or the best systems these neocons will say absolutely not we're not conceding anything
01:31:52
yeah so and they would they would never pick up a gun theyd never wear a uniform
01:31:56
hypoc they want us to strike Iran so these these strategies don't line up if you wanted to attack Iran the first
01:32:04
thing you would do is basically get all of our troops out of harms way who are currently sitting ducks for Iranian
01:32:10
retaliation by the way I think that'd be a terrible idea but that's what You' do
01:32:14
so they have these strategies that don't make any sense all right everybody this
01:32:18
has been an amazing show for the dictator chairman himself sham poaa the Rainman yeah David Sachs I am the
01:32:27
world's greatest moderator we miss you uh sultant of science David freberg could have make the show and uh we'll
01:32:33
see he's still in the if anybody gets into the Apple Pro Vision Vision Pro and is somewhere out in the universe by
01:32:41
Uranus and you see him bring him back for next week somebody go find him we got to send out a search party to your
01:32:45
Uranus love you boys byebye byebye to let your winners ride Rainman David and in said we open source it to
01:33:00
the fans and they've just gone crazy with it love queen [Music] of Besties are my dog taking your
01:33:16
driveways man oh man my habiter will meet me at we should all just get a room and just have one big huge orgy cuz
01:33:24
they're all this useless it's like this like sexual tension that they just need to release
01:33:28
[Music] somehow we need to get [Music] mer I'm [Music] doing