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jacob what's it feel like to be a guest on your own podcast today i'm excited oh good so delightful you did a great job
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by the way really like um the punch up to the formatting where you actually put the questions in yeah i think it's because i want us to all agree on the
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stuff we want to grok on you know in a professional tv show they would have pre-interviews with everybody get all their positions then they put the
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positions into the document and they you know they basically do what was called a pre-interview or here's
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another idea you could do your job well i mean how about that how about you try that
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yeah or you know or how about i turned you three miserable [ __ ] into actual likable people in 91 episodes which
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nobody thought was possible i actually think i'm becoming less likable the longer i'm on this show
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i think that's i think that correlates with all of us all of our like abilities
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[Music]
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[Music] hello and welcome to the all in pod i am
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your moderator for today out of the hot seat doing the easy beat dave friedberg
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i'm joined today by our esteemed panel back from his european shopping spree
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our national treasure america's favorite dictator paulie apatia jamal
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how are you feeling i'm feeling great you're okay you're recovered yeah i'm a little i've got i got a little head cold
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though oh well sorry to hear that hope it's not covet 2.0 no i test it i'm covered negative thank god okay
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also with us as usual from his emergency bunker ahead of the u.s civil war the rain man david sacks how are you david
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good happy with the late start this morning i'm sure and of course everyone's favorite ski bum
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producer of the woodstock of tech conferences the one and done all in summit in miami jason calif jason what's
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it like to be a guestie today oh it's so delightful when you said you wanted to moderate that to me was chef's kiss i
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get to i get to comment and not be the moderator i love it yeah so we're mixing it up a little bit today i'm
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going to take the lead jkl's going to sit back i'll say a couple of words before we start because i think last week we got a
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little nasty uh definitely heard that from listeners um you know i know and so i want to kind
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of just address it real quick and then we can uh kick off the show i think it's important to say that none of us really
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started out doing this pod as a job or thinking that it would become a real regular thing
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right we started doing it for fun ad hoc from time to time and then it became this thing that people listened
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to and it became this thing that we started doing every week and people actually cared about it and suddenly became this real obligation
00:02:44
it's almost like we got pregnant and had a baby and now it's like four men and a baby and so you know i think we all feel
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this like you know challenging obligation that we never expected to take on of like taking
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care of the show taking care of the pod and we all have like different points of view on what we want the pod to be and
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what we want it to become jcal cares about you know getting up in the rankings and listening to the audience
00:03:06
and ultimately has shared that he wants to monetize but you know at points we've not always agreed on different points
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about that you know chamath has the things he wants to bring to the table saks says things he wants to talk about
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and so you know it's really difficult kind of running the pod managing the pod with four very different points of view
00:03:23
very different perspectives on what it is we all want to kind of get out of this over time and i think it causes us to get really
00:03:30
frustrated with each other we end up having real fights you know you have the biggest fights
00:03:35
with your best friends uh you know you really let loose and lash out i think last week i
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listened back i was pretty contemptuous in my kind of retort to jaycal about hitting up on the inflation topic and i
00:03:47
want to apologize to j cal for doing that i think it was uh you know i think yeah i think it was a little rough
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but at the same time i just want to point out like you know we're going to keep doing the show because i think you know as much as we
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all disagree as much as we fight and as much as we may even start to dislike each other
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uh and not get along i think it's really important that we keep doing this and i think restating that commitment and trying to
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do better is really important so you know we're gonna try different stuff out try and find ways to find common ground and keep
00:04:16
doing the show productively with each other uh as one experiment this week i'm gonna moderate and we're gonna you know
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try and take it that way but you know i just wanted to say those few words before we kick this off guys because i thought it was important especially
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after the last couple of weeks i think it's been a bit of a struggle we've been having a tough time and i just want to be open about it and you know highlight
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that you know as an example you can fight with people you can disagree with them and you can still keep trying
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and i want to set that example i want to keep doing that so anyway just i would just like to say apology
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accepted and uh i thought that was a lovely opening
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one thing i would just punch up there is the real reason we did this was because we missed each other we missed hanging
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out with each other and then this is you know something that's become more successful than any
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of us ever imagined uh it's got an audience size that is just
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you know hard to imagine how many people are listening to this which then does put a little bit of pressure on it we
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want it to be great for the audience and i just want to say like i don't take it personally when we when we battle on
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stuff even with politics and sacks and stuff like that i respect each of you you are each
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brothers to me i love each of you deeply uh and when we fight and things don't work out i look at it as like personal
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growth or progress towards some other goals that we each have the amount of support
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i've gotten in my career from david sacks and chamath uh has been
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unparalleled david sachs was my first uh lp he encouraged me to create my first venture fund
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chamath s'more supported me relentlessly in my career uh showed up for me every event i ever did and i tried to do those
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same things for them uh you and i haven't done much business together freeberg but i'm enjoying uh the business that we've
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started yeah and i showed up for both of your uh events when you needed me yeah doing
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some syndicates with you and uh i i love doing this each week i love doing this each week yeah it's like like i think my
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point was it's a lot easier to be friends and have wine together and play poker together than it is to do a job
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together and this has become really a job and so you know you can have really good friends and then you try and start
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a company together or do a job together and you can hate each other i think it doesn't mean that you guys stopped being friends or that we should
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stop doing the work i think we should still keep trying to do the work figure out a way to make it work so anyway that
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was the point i wanted to make of this and that's the end of my my statements okay those weren't prepared those are just a reaction to yours i don't know if
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that's nice to say anything but i doubt it okay you have any emotions right now
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sacked what are you feeling yeah i mean chamoth do you think grass fed is better or the regular uh built up
00:06:58
sax and i were texting while you guys were we're hugging it out talking about different kinds of jerky
00:07:05
beef jerky well we were jerking each other off you guys were researching jerky great
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i was recommending uh bill talk to him oh great awesome speaking of jerky let's get into adam newman okay so now hey
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hello okay so uh first uh thing to talk about today and i kind of wanted to take it in
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a little bit of a different direction than i think all the other tech media have kind of addressed this you know
00:07:27
adam newman is back he raised 350 million dollars from andreessen horowitz there was announcement this week
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for his new company called flow which as we understand it is trying to develop residential apartments
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you know in the same sort of vibe quality and attention to experience as maybe was
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intended with wework and flow you know seems to have
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started originated with adam doing a bunch of acquisitions of real estate with his own capital and now he seems to
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have turned this into a real business and raised money from andreessen so there's all the commentary
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and joking about andreessen putting this money in are they crazy as well as all
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the you know commentary about adam newman how could anyone back him the guy was so awful the first time around
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let me just do a quick round the horn with you guys you know initial reactions to the to the adam
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newman deal and then i'd love to talk about founders having a second act because you know adam
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happens to be high profile so his failure was high profile but a lot of founders have a failed
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low profile first experience and come back and kick ass the second time around and investors have taken notice of that
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and so i'd love to to go there but maybe we just do a quick reaction jkl i know you've talked about this on your other show maybe you can kind of give us your
00:08:45
your quick commentary on on the opportunity of the transaction and what are people talking about with
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respect to this this deal happening you know people are wondering why he's able to raise money and what i always tell
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founders is when you see these like weird fundings and you can't get your heads around them it typically has to do with track record and credible audacity
00:09:03
trump's prior blunders so say what you will about uh adam newman he is audacious and he has credibility
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people forget his origin story they only remember the masa yoshi-san four billion dollars and what happened and what he
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did with that and that was a complete [ __ ] it went off the rails he did all kinds of inside dealing and and it
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was it was madness but before that he did green desk he was a bootstrapped entrepreneur and then he created the
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category defining co-working space which to this day when you say i need to get an office the first thing people say is
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get a we work just like they say take an uber just like they say google it just like you know any other verb that
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we talk about and so it's very easy to dismiss him and say the tech industry has no morals they
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just they'll back anybody he has a publicly traded company that's in the market right now he defined the category
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and he also put 300 million dollars apparently of his own money at stake to buy these apartments
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uh so i think it's uh i i would say the bet makes sense to me and i think it
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will make sense if we go into the bet which i'd love to hear everybody else's thoughts on it's an audacious bet
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because housing is one of the hardest industries to tackle and he already did it for
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commercial so why wouldn't he be able to do it for residential saks did you see this opportunity in the market didn't
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did you guys take a look at it or have any points of view on it no i mean we we don't write 350 million dollar size
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check so it's just not something that we're going to take a look at for that matter we don't really do
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non-software investments we don't do you know in the you know physical role type investments
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and i've kind of learned that doing anything in the physical world with atoms is 10 times harder than doing
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anything with bits so you know one of my takeaways over the last few years is you know we tend to like pure software
00:10:53
models not even hybrid or tech enabled models because it really does take a 10x
00:10:59
entrepreneur to do anything in the physical world so yeah we you know we
00:11:04
software is kind of our knitting and we we like to stick to that uh in terms of you know andreessen
00:11:09
horowitz making this investment here's right or your larger topic of repeat founders look most startups fail
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and most founders or good founders have an entrepreneurial streak in them and so you combine those two things and there's
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going to be a lot of repeat second time founders people who are fundamentally entrepreneurial and their first thing doesn't work out i
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think that that can be a positive thing to invest in because they've gotten some of their mistakes out of the way and
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they've learned from that experience so i think the question we would just ask is what were the learnings and did they
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conduct their failed startup honorably you know like if they lie to investors or misled
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investors then obviously we don't want any part of that but i don't think most failures are like that
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and um and so as long as the founder i think conducted themselves honorably had
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some good learnings it's certainly not a disqualifier for their next startup i mean chamoth you've been open
00:12:02
in the past about startups that waste money and do the kind bars and red brick
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you know offices and you know easy living at the office there's no better example of over-the-top exuberance as
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there was at wework right i mean does that indicate to you that this guy doesn't have a clue in
00:12:20
terms of how to be prudent with investors capital and it's not backable or how do you think about it i have a couple thoughts the first is
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that wework is a really interesting business
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but that business had been built many times before and it's called the reit and i think what adam was able to
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arbitrage was a period of time where he pitched a non-real estate investor
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a technology company that was really just a real estate investment trust and that's why he was able to get these
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incredibly heady valuations i think the peak valuation of wework was like 45 or 50 billion dollars but what happened
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which is that when wework ultimately went public the collective intelligence of the
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public markets imposed a reit based valuation model on wework
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and it is now a 3.6 billion dollar public company and i don't think you can dunk on adam
00:13:15
for that it's hard to build any kind of company let alone a 3.6 billion dollar company and he was instrumental in that
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so he should get some amount of credit but the reality was that he was pitching people
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that didn't want to hear about a business that was a real estate investment trust they wanted to hear
00:13:32
about some technology and all of these other things but ultimately when you stripped it away it was a read
00:13:38
now you started again and from the outside in not knowing anything because we don't know anything
00:13:44
what it looks like is the beginnings of another reit except focused on residential
00:13:49
right so when you buy hundreds or thousands of apartments but again same pig different lipstick
00:13:55
the the the issue at hand though is that again he has found a technology investor to buy a
00:14:02
technology story and again time will tell whether there is a technology business here but if it
00:14:07
ultimately is an amalgamation of a bunch of apartments with some sort of you know
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interconnected technology that helps enable a better community or what have you those kinds of reits have also been
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built before and reits are valued in a very structured way on this thing called ffo funds from operations
00:14:28
and you know what the upper bound evaluation is which is if you go and you know look in the stock market the most
00:14:34
valuable reit in the world is a company called prologis they have about a billion square feet
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under management they're about a hundred billion dollar company wework has about 45 million square feet
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under management they're a 3.6 billion dollar company so if you just interpolate from those two data points
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on the residential side adam's gonna have to buy you know if you think an average apartment is 1500 square feet he has to buy you know
00:14:58
665 000 more apartments in order for that to be pro lodge of
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scale you know i don't know to invest in a billion dollar valuation or 1.5 or two whatever the number turns
00:15:10
out to be makes sense if you think the upper bound is unlimited but if you think the upper bound is three or four billion the only reason to do it by the
00:15:17
way it still makes sense for end reason to do it and this is why i think people get tilted
00:15:22
because now this comes to my second point which is that what adam newman is able to take advantage of
00:15:29
is a very obvious powerful understanding of the venture capital business model
00:15:35
that other founders don't especially the ones that dunk on him and let me just explain this
00:15:41
we talked about this last week the only mistake i think that softbank really made was a velocity of money
00:15:48
mistake which is not setting the investment cycle of their vision fund to be 10 years instead of five
00:15:55
well every other fund has a five year investment cycle too including ahs and so when you have tens of billions of
00:16:01
dollars under management guys guess what they have the same problem softbank did except with just a different quantum of
00:16:07
capital they want velocity of money and so if a founder comes and asks for 350 million
00:16:14
dollars it actually in a perverse way makes your life easier because now that's saying yes once
00:16:21
versus saying five or six times to people asking for 50 million dollars or heaven forbid 350 times for people
00:16:28
asking for a million dollars and so if you're if you're in that seat chemok if you're the in the investor seat are you
00:16:34
putting all that capital once with the one guy who's managed that money before or do you want to find the guy who has
00:16:41
it or the gal who hasn't you have to understand the and recent business model and recent horowitz business model is to
00:16:46
become blackstone but for technology they have like 30 billion aom now right right which is
00:16:52
still you know a drop in the bucket something like that so if you look at blackstone right a trillion blackstone
00:16:58
is a 100 plus billion dollar market cap company right built on three pillars credit
00:17:04
private equity and real estate you can make the argument that technology is near is as important as
00:17:09
those three categories and so you know if i think it's pretty obvious that andreessen is trying to build a publicly
00:17:17
ownable security that represents all things in technology so again i don't think that they're
00:17:24
necessarily out to generate massive returns for lps they want to become a credible
00:17:30
reliable institution for to absorb hundreds of billions of dollars and so ultimately
00:17:37
the objective you think is to increase to monetize their own their their ultimate goal is to mod is
00:17:43
for andreessen and horowitz to monetize the equity of andres and horowitz of the management company yeah that's the goal
00:17:49
and that's a that's a by the way that's a laudable goal it's really hard to build a business they've built an incredible business and then they should
00:17:56
get credit for that zach's do you agree well i mean they are they i think jamaat is right that their stated goal is to
00:18:03
build like a larger institutional vc type investor i mean doesn't andreessen
00:18:09
have a portrait of jp morgan hanging on his wall or something i mean they want to turn vc from being like a little craft
00:18:15
business and something larger or more institutional so yeah i'm sure they jump at the chance to write a 350 million
00:18:20
dollar check if they believe in the company but can i shift this conversation for a second so i've done a lot of commercial real estate investing
00:18:27
i think there are reasons to think that flow this new company could actually be better than we
00:18:33
work and let me just explain so with wework you know if you talk to commercial office space owners landlords
00:18:41
about wework like 10 years ago what they would have told you is yeah look that model is great but we
00:18:47
want tenants who are high credit and sign long-term leases why because
00:18:52
they're not worried about what happens in a bull market they're worried about what happens in a recession and they want to make sure they can cover their
00:18:59
bank debt so landlords have always cared not just about rents but also about
00:19:04
having high credit long term leases what wework basically did is arbitrage
00:19:10
that of course it was a much better deal for startups because if you're a startup you don't have to go through a complicated process inside a lease you
00:19:16
could just go month to month at a wework and you'd be willing to pay a premium for that so weworks business worked
00:19:22
great during an up market because they would rent space for say 50 bucks a foot lease it for 100 and they would capture
00:19:27
the spread the problem is the business was highly levered to a boom cycle and
00:19:33
at the first recession or bus cycle all of a sudden they're gonna have massive vacancy because everyone can leave and
00:19:39
all of a sudden their rents go below their the rents are collecting go below the rent they're paying and the arbitrage
00:19:45
goes away they magnified that problem by making two mistakes number one they signed a lot of top and market leases
00:19:50
right they were signing leases at 100 plus per foot in hot markets and the other thing is they didn't seem to have
00:19:56
a lot of financial discipline you know i guess that show kind of makes fun of
00:20:01
these sort of bacchanalian parties they had and so forth like that you can get away with a lack of spending discipline
00:20:07
if you're a 90 gross margin business like a google but when you're a real estate business who's got real cogs not
00:20:14
having spending discipline is actually a problem so for all those reasons i think
00:20:19
we were kind of contained the seeds of its own implosion inside of their model and they needed to
00:20:25
manage or mitigate those risks a lot better that's not to say though that it wasn't a great product i mean for
00:20:30
everyone it was an amazing product yeah i mean in the early days sex so to your point they
00:20:35
were taking under market like really low uh cost per square foot space like in the
00:20:41
tenderloin and then selling it for you know bryant and third street rents right
00:20:48
i mean that was the arbitrage and it worked it's only they lost that discipline it sounds like in the second
00:20:53
half of the company's history right what i think is interesting about flow is that it's sort of multi-family these
00:20:58
apartment type buildings those tend to be you know let's call it one year leases anyway and they're owning them
00:21:04
they're not leasing from a landlord they're basically so chamas right it's basically a standard apartment replay
00:21:10
where newman is going to create a consistent experience and brand across the country i'm not sure that's really
00:21:15
been done before where there's like a brand for apartment living it's never been done yeah and so actually it's
00:21:21
pretty simple in terms of measuring if it's going to work or not which is simply can adam newman deliver lower
00:21:27
vacancy rates and higher rents and then you know buy apartment buildings at market prices so in other words that's
00:21:33
the arbitrage is can he extract more rent and less vacancy from apartment units by creating this
00:21:40
national brand and this experience but this is simply to do with financial aid
00:21:45
but this is my point everything you talked about is how we would actually do a tear down of any other reit that was
00:21:51
looking for money david you know we would look at what is the ffo ultimately it's like you know what's the implied
00:21:56
cap rate what's the ffo can you get paid for owning this how much do you have to spend and can you get paid and this is
00:22:01
where this is where i think like you know trying to then you know so if if if on the if on the inside of
00:22:08
it what what instead it was not that but it was pitched as some you know convoluted technology play it's a little
00:22:15
bit harder to believe again we don't know the details so right sure
00:22:20
what i would say building on uh sacks and champs if they are going to do 700 000 apartments you can actually put some
00:22:25
numbers on this you know seven hundred thousand apartments you think they can get an extra 100 maybe 150 bucks out of a
00:22:31
renter i think they could for like that experience right people pay a little bit they're not going to pay 300 more 400
00:22:36
more because then they would just get a larger apartment and you know they could spend that money because it would be better spent if they have
00:22:42
700 000 of those you're talking about a billion dollars in revenue a year that's with 700 000 apartments
00:22:48
okay 10 times profits you know whatever 10 billion evaluation if andreessen hurts is buying in at one point five or
00:22:53
two like chamoth saying is probably correct somewhere in that range they want twenty percent okay yeah maybe they get a six or seven bagger out of this
00:22:59
but it's a six or seven bagger on a big number 350. it's not like a 20x or a 50x and you also get the branding which i
00:23:07
would not under value here of being the firm
00:23:12
that backs bad boy entrepreneurs and is like willing to go there and support i think it's a real
00:23:19
positive friend reason it's like look yeah i do you know you you just raised a ton of money well guess what you got to
00:23:25
put that money out because it's not as if they're going to think to themselves oh i really only want to run this fund
00:23:30
over three years instead of two they're not thinking that they're like i want to keep going out because i think their
00:23:36
business model works by taking as much oxygen in the room as possible which means to be actively fundraising always
00:23:44
that's it's tied it's true of blackstone it's true of apollo it's true of carlyle
00:23:49
it's true of kkr any of these publicly traded
00:23:54
investment managers they live and die by their ability to constantly be raising funds which
00:24:00
implicitly means you have to constantly be writing funds the returns decay but that's okay because now you're feeding
00:24:08
you're you're taking money from pension funds and other institutional limited partners who are fine because their
00:24:14
hurdle is like six or seven percent so if you deliver eleven you still look like a genius because you can absorb so
00:24:20
much money so andreessen wins by showing that adam newman goes and picks him and
00:24:25
driesen wins because they have the ability to write a 350 million dollar check and recent wins because they have
00:24:32
350 million dollars less that they have to actually put into the hands of other entrepreneurs now they can do it with
00:24:37
just one check so it's a multi-faceted win for them and it's a multi-faceted win for newman
00:24:43
i think there's also brand value for the entrepreneurs that have had failed startups or issues with their first
00:24:49
startup imploding and knowing that there's still a second bite at the apple i remember a survey and i just tried to
00:24:55
pull it up but i couldn't find it so i may be wrong on this but first around capital years ago surveyed
00:25:02
or did an analysis of all the investments they had made and i think one of the biggest predictors of success in a startup was that it was the
00:25:08
founders second startup and so if you've had failings the first time around you're more likely to have
00:25:15
learned from those failings to improve your performance the second time around and so as an entrepreneur i look to
00:25:20
andreessen horowitz after this investment and think you know these guys will still back
00:25:25
you know great entrepreneurs even if things went sideways or there was an issue the first time and you've got you know the ultimate kind of case for that
00:25:32
okay speaking of andreessen i'm going to move us along you guys wanted to cover this topic not my favorite topic
00:25:37
just because i want to be careful uh about i mean you guys decide what you want to
00:25:42
say but um i'm going to bring up the uh the andreessa nimbyism thing in atherton you guys wanted to
00:25:48
cover this right yeah thumbs up sure i mean i mean it's like
00:25:54
okay well i mean everybody's talking about why wouldn't everyone's talking about it okay so
00:25:59
during covet marc andreessen wrote a um an essay uh uh called build and i i'm gonna read
00:26:06
an excerpt he says you don't just see the smug complacency the satisfaction with the status quo and the
00:26:11
unwillingness to build in the pandemic or in healthcare generally you see it throughout western life and specifically
00:26:17
throughout american life you see it in housing and the physical footprint of our cities we can't build nearly enough
00:26:23
housing in our cities with surging economic potential which results in crazily skyrocketing housing prices in
00:26:29
places like san francisco making it nearly impossible for regular people to move in and take the jobs of the future
00:26:35
and then last week mark and his wife laura submitted a letter to the town of atherton
00:26:42
to fight against multi-family housing saying i'm writing this letter to communicate our immense objection to the
00:26:49
creation of multi-family overlay zones in atherton please immediately remove all multi-family overlay zoning projects
00:26:54
from the housing element which will be submitted to the state in july they will massively decrease our home values the
00:27:00
quality of life ourselves and our neighbors and immensely increase the noise pollution and traffic
00:27:05
sex i'm just going to hand the mic over well i mean
00:27:11
i'm happy to defend the residents of atherton on this i'm going to take the contrarian standpoint
00:27:17
but does anyone i i was going to do the same i thought you guys were gonna match them so go ahead well look i mean do we have a problem where
00:27:24
housing is too hard to construct in the state of california yes and there's a bunch of reasons for that the permitting
00:27:30
process is byzantine it takes years all those delays cost money the tenant rights movement has gone so far that
00:27:36
landlords basically can't um you know it's almost impossible to evict anybody and that makes it so no
00:27:42
one wants to be a landlord so no one wants to build these um multi-family uh
00:27:48
buildings uh or or buy them and then you know you've got like all these uh taxes
00:27:53
so you're just in calif in san francisco for example they just passed a six percent transfer tax where we talked
00:27:59
about the show on they basically just took six percent of my home and there's like nothing you can do about it so
00:28:04
there's a lot of reasons why people don't want to invest in more housing in california and i think that
00:28:11
this athlete example is sort of cherry picked because what this is is really zoning you know um there are these
00:28:17
suburbs and it's not just atherton i mean you got the east bay as well where people live in these areas that are
00:28:23
zoned for single-family residences as opposed to multifamily and that determines the character of the
00:28:29
neighborhood now if you go buy a house in one of those neighborhoods with that zoning then that's what you
00:28:35
expect to be the case i mean you have to spend more money buying a house in that neighborhood because you're investing in
00:28:41
the character of that neighborhood so it is unfair to the residents of that neighborhood for a developer to come
00:28:47
along and say hey i'm going to change the character of this place so i can make money i'm going to take a bunch of
00:28:52
single-family lots turn them into multi-family apartment complexes or something like that so i can understand
00:28:58
why the residents would be against that so i would differentiate between legitimate reasons for zoning and then
00:29:06
things that the state or cities have done to undermine the market for housing
00:29:12
basically creating frictions are impediments to the market for housing now it is the case that as cities get
00:29:17
bigger and need to free up land that you might need to rezone but the areas that you should look at for that should make
00:29:23
sense right i mean i don't think you go off to atherton and change the character of that
00:29:28
neighborhood so that you can buy five more units yeah i mean you should you should look at like why not look at the
00:29:34
areas around say public transit like the bart's and so forth where you could basically go up around
00:29:40
there and it would make sense for the neighborhood i mean the example i would give
00:29:46
to kind of paint an extreme picture is let's say you own a farm in the countryside someone buys the farm next
00:29:52
to you and then decides they want to build a 50-story tall skyscraper next to your farm
00:29:57
you would have a serious objection because i think that the i mean look look at the town of venice in italy i mean chamath you you've been
00:30:04
there recently but um you know communities local communities can define the character of their community by by making zoning laws
00:30:12
that you know allow a small city to remain like a small city i've also always been
00:30:18
against this notion that we should allow any developer to build any size building anywhere they want in san francisco which has been an
00:30:24
ardent cry from silicon valley progressives for years that we need to let them build let them build but at the
00:30:30
end of the day i moved to san francisco 22 years ago and it was a small quaint city it felt like a small city and
00:30:37
building skyscrapers made it more congested made it less inviting made it feel more industrial and it wasn't
00:30:42
appealing to me as a resident and i think that residents need to have the right to define what they want their
00:30:48
community to be the question it brings up then is where do you build because all residents everywhere would want to
00:30:53
block family housing multi-family housing skyscrapers so i mean i don't know if you have a point of view to
00:30:59
counter what we're saying but you know how do we think about solving this problem at scale if everyone wants their
00:31:05
local communities to remain quaint and interesting and not be built out well i i think i think that's true for people
00:31:11
who can afford really nice homes in the suburbs right but there are a lot of people that live in highly dense housing
00:31:18
in urban environments and i think that's where we need to focus first if you look at the data california needs to build
00:31:26
three and a half million extra homes by 2025. that's a rule right that's like a so david's right like focusing on a town
00:31:32
with a population of seven thousand people is not going to solve the three and a half million homes we need to build
00:31:39
and it brings up a bigger question which is then who is going to pay for all the physical infrastructure that's going to be required let's just say you're able
00:31:45
to actually double the population of atherton to 14 000. well you know i live near that area so what i'll tell
00:31:51
you is atherton has uh bad flooding dave you know sax actually used to live
00:31:58
near there too so sacks can confirm this you know depending on when it rains huge
00:32:03
pockets of water just collect everywhere that infrastructure is bad there are no sidewalks
00:32:08
right so you kind of walk just on the road some cars whipping by
00:32:14
uh you know could pick you off at any moment now those were decisions that as david said the residents of that town
00:32:21
made decades ago because of the lifestyle that it created and they traded away a highly dense
00:32:28
urban environment whereas if you just moved a mile you know south there are parts of menlo park
00:32:35
and parts of palo alto that are already in a situation to absorb
00:32:41
very dense housing where you could put that extra seven or eight thousand people pretty easily
00:32:46
what do you do when those people in that neighborhood in menlo park say i don't want another apartment building here i want it to be down the road in atherton
00:32:53
right how do you resolve this conflict and i just want to remind everyone in september cal governor signed these
00:32:59
bills right he signed 31 affordable housing bills which mandate by zip code and by city and by town the building of
00:33:06
affordable housing to create equity in this problem uh or uh which basically means all these cities and all these
00:33:12
towns are now scrambling to figure out how do we meet our state mandated
00:33:17
objectives of new affordable housing in our zip code or in our town and by the way yeah i mean look the and i think exactly
00:33:24
as you said what will happen now is it goes to some state commission and i think that state commission can issue some sort of
00:33:30
penalty or something so you know it's it's i think the the the residents will pay for that
00:33:36
freedom if you will to to not have that building happen but again i just go back to it doesn't
00:33:42
solve the crux of the problem the crux of the problem is we need to solve this
00:33:47
housing crisis in the order of magnitude of millions of homes
00:33:52
okay and so millions of homes can only be absorbed mostly in cities
00:33:58
so the real conversation and you know is i have more sympathy for the residents
00:34:04
of atherton than i do for residents of the city of san francisco okay because there is dense housing in
00:34:10
san francisco there already is an infrastructure social services that were
00:34:16
designed and built there are sidewalks again simple example there are stoplights you know in san
00:34:22
francisco that a lot of these towns don't actually have now again that was a decision they made 50 years ago and they
00:34:28
would have to change that decision but my point is like there are there are places that are already shovel ready
00:34:34
and the real question is why can't we build hundreds of thousands of units and so this is a good article to write
00:34:41
because it's a tony neighborhood and you know there's a few thousand folks but i think the real issue won't get
00:34:47
solved until we figure out how to green light hundreds of thousands and millions because we are three and a half million
00:34:52
homes short jkl what do you think i mean are you well i you know the the truth here is that this is not about atherton
00:34:59
this is every town every city in california is fighting all development because if you fight the development
00:35:05
well yeah you would obviously have less traffic and supply and demand your homes become more valuable the place that's
00:35:10
fought at most of all is san francisco in the city where you cannot convert homes you cannot take your victorian and
00:35:17
make it into a a town home and then if you look at what's actually happening here what they're fighting against and you know this the hypocrisy of it is
00:35:23
you know these are town homes this isn't like a 20-story you know giant
00:35:29
apartment building they're townhomes and they're going to be three million dollars each and they're not going to be for scary people and criminals and
00:35:36
ruining people's quality of life it's going to be the venture partner or the receptionist
00:35:42
not even the reception it's gonna be a venture partner it's gonna be a cto at a tech company who's gonna be able to buy this and then be that much closer to
00:35:48
work and so it does reek of hypocrisy and there's a really simple solution here which is you know there are cal
00:35:55
train stations up and down the peninsula there are you know in some places uh you have
00:36:02
other municipal transportation along those corridors they should build up and they should build ten-story apartments
00:36:08
et cetera redwood city did this recently we've all been there and seen the apartments they're sick
00:36:13
you're talking about you're talking about the exact kind of solution we need because instead of trying to solve a hundred units here or there redwood city
00:36:20
did an incredible job they solved it in the scale of tens of thousands of units and it completely changed the downtown
00:36:26
of redwood city it is it's awesome and it's awesome incredible and sort of what is that afraid of so what it's incredibly afraid
00:36:32
of this is nimbyism at its worst in my mind i'm not going to specifically make it about mark andreas and i think everybody you know has the right to live
00:36:39
in the neighborhood they want they they get to state their feelings i think what we need to do is convince people and i think there's two really good arguments
00:36:45
here number one do you want your chef convince people to let their neighborhoods change
00:36:51
to let them evolve modestly to have homes that their own children or their
00:36:57
own chefs and housekeepers and associates we all know people in the in the area who have bought apartment
00:37:02
buildings for their nannies because you couldn't get a nanny well you couldn't get a chef so you you bought some unit
00:37:08
in redwood city and you rented it for your nannies or whatever like we don't literally i know people that have not everyone i do i know multiple um or who
00:37:15
have considered it and so that's the way you would convince nimby people to to evolve here and then there's a second
00:37:21
one this has to do with work from home when you commute you know the issues of domestic violence
00:37:27
depression drug abuse substance abuse alcohol abuse all of that goes way up and it's it's somewhere between 30 and
00:37:34
40 minutes of a commute you start to see people's quality of life seriously deteriorates and so if we want people to
00:37:40
come back to offices which apple just mandated last week everybody's coming back three days a week like it or not
00:37:46
tuesday thursdays and you pick the other wednesday you want to come to work i guess
00:37:52
if we want people to come back to work well yeah we're gonna have to build some taller homes the ceos the founders of
00:37:57
the companies the founders of the venture firms it's not about market reasons it's about everybody they don't
00:38:02
have to commute the office is within walking distance or a bike ride of their office people need to start thinking
00:38:08
about their nanny their chef their firefighter and their employees jason i i may have misread it but it wouldn't
00:38:14
have solved the problem for the nanny the chef the teacher it should be three million dollar units no they wouldn't
00:38:19
even be that because the way that it read because i read it said that it you would have qualified it by building
00:38:25
what's called an adu on your property yes so people so people would have built it for
00:38:30
their grandmother or their in-law a lot of people are doing that so my point is the law as proposed was already hacked
00:38:37
and so it would never have accomplished what you were saying i think the answer to what you're saying is what redwood
00:38:42
city did it's what towns all around the country should be doing which is like in and around particularly like
00:38:48
transportation hubs you should be green lighting a lot of dense housing but jason those are not adus that sit on a
00:38:55
product those are those are 500 and by the way those also require not
00:39:00
just the infrastructure but it also requires the financing and all of the you know the banks and construction
00:39:06
markets there to construct it that's not a problem in california the opposition is the problem which is why the federal
00:39:11
i'm sorry the state government's getting involved and superseding or trying to supersede what happens on a local level
00:39:16
that's why gavin newsom is passing these things is because each town is refusing to do it but another possible solution is if atherton is so good at blocking
00:39:23
this stuff and they have so much money let them pay a penalty and have redwood city or san
00:39:29
carlos or another neighborhood millbrae yeah that wants money and they want to build up millbrae is building because
00:39:35
that's where the bart station ends is it millbrae they're building up there where you're describing like are all these
00:39:40
contortions and what should be a more free market for housing construction i
00:39:45
mean the reality is we've done so many things to distort the market agreed with these labyrinthine permit process
00:39:52
processes that delay projects for years and years to um you know to all the
00:39:57
taxes and other well they fight it they fight with all these
00:40:03
environmental stuff zoning is a little different yeah so the nemesis factors into the permitting process but
00:40:09
but i would again i would differentiate zoning but my point is just we've like so broken the free market for housing that
00:40:16
we then come along and say see the free market's not working we need more government mandates and look is this
00:40:22
happening in miami no go to miami there are cranes everywhere there are buildings they're building multi-family or exactly
00:40:28
so in these frankly red cities red states which are much more lightly regulated
00:40:34
they're building a lot more but at the same time it's not like and in new york which is constrained so you have to
00:40:40
build up yeah but houston has no zoning yeah new york city has always had a very
00:40:46
non-sentimental view towards construction the city has always said okay if you want to build something
00:40:53
bigger and better you can tear it down and start over i mean they have like air rights and so on that you have to
00:40:58
respect but but new york city has never they by and large they don't constantly um
00:41:04
label buildings as historic and say you can't touch them and things like that it's new york city has always wanted to
00:41:09
keep being dynamic and growing um so there are other places that just don't have this problem and they're able
00:41:14
to achieve this growth without building an apartment complex like in the lot next to you if you live in the suburbs and
00:41:22
have a single family residence i mean right so i i just think like you know the the politicians in
00:41:28
california have so thoroughly broken the market for housing and now what happens is
00:41:33
you get an article like this that's basically scapegoating the resonance of a suburb
00:41:40
as being the source of the problem when they didn't create this problem they're just fighting to keep the status quo so they're perpetuating it i would say but
00:41:46
you know like so first of all i have no special love for athens toronto i lived there for a couple years and it's kind of like a step for community i mean
00:41:53
i had to move back to well i'm like you know somehow i'm just more comfortable stepping over dirty needles
00:41:59
and excrement you're voting with your dollar i moved back to san francisco but
00:42:05
massachusetts yeah but look at it's like a really weird place because this is like
00:42:11
al pacino and the devil's advocate go ahead sex in addition to there being no sidewalks there's literally no offices
00:42:17
there's no grocery store there's no commercial real estate of any kind there is no downtown there is there you know
00:42:24
so i don't know like where the hook is that you would all of a sudden put an apartment complex i mean you're literally gonna be building it in
00:42:31
someone's backyard so the character of that neighborhood just doesn't support it and i think you know people coming together to form
00:42:37
their own cities you know under the principle of subsidiarity should be allowed reasonable freedom to basically
00:42:43
construct a city as they in the way that they want to live and there are other cities that competition freedberg there's other
00:42:49
cities like competition houston has no zoning essentially so you can if you have a lot and you want to make it into
00:42:55
a school or a hotel or a restaurant you can do it and then outside of austin you
00:43:00
you kind of have that same thing people build all kinds of weird compounds and stuff out there are you guys following so it's a competition between those
00:43:06
cities and i think san francisco is losing yeah are you guys following any of the startup cities that are being built where there's like a new city
00:43:12
being built from the ground up and any of those seem like pole to sac you mean i don't know the names of any of them
00:43:17
but cul-de-sac is one yeah i mean are these real or these real projects are we gonna see these emerging like next-gen
00:43:23
cities that you know could be viable places to move to and live or is it really just about
00:43:28
you know transforming some of these cities that are less regulatory and that's ultimately what will win in the market you know part of why the the
00:43:34
regulation has gotten so perverted in a lot of these towns is because you've been able to gerrymander how you know
00:43:40
these public school districts get funded yeah and so you know why folks are so protective of of it is is again and and
00:43:47
you know to to underscore one of sax's points this is much more prevalent in democratic
00:43:53
states and democratic cities where you know coastal elites have really gerrymandered
00:43:59
these school districts and that's a large reason why they uh they don't want a lot of
00:44:05
building they want to protect the tax base and they want to be able to funnel those specific tax dollars into a few
00:44:11
schools for their kids and that's it yeah and so it's it's that it's actually a really good point people don't know this
00:44:18
undercurrent which is oh it is down the peninsula by the way this is the dirtiest little secret in these
00:44:23
democratic states again mostly democratic but if you look inside
00:44:28
of california and a couple of other states how horrendously gerrymandered it
00:44:33
is so that you can basically redistrict in a way to cordon off tax dollars to
00:44:39
only then send to one or two public schools that sit inside of your area your zip code because that's what the
00:44:44
law says it's a zip code oriented scheme it's perverse it's created incredibly horrible incentives for people so i
00:44:52
think david is right which is that there's a there's a contortion of laws that come together that underlie some of these decisions
00:44:59
that then manifest in a petition like this and etc they all need to get cleaned up
00:45:04
and chamath it's it's even worse than that because the same people who have rigged it so that all their tax dollars
00:45:10
stay in their non-development community then they're over funding their public schools they could easily afford private
00:45:16
but they're using all that money for just their private school and the one in the town next to it east palo alto whatever they have no money and then
00:45:24
these people have the audacity to fight against school choice so that those poor people can take tax dollars and then
00:45:30
pick up a better school so it's hypocrisy all the way up and down and you know i think this is why people are
00:45:35
are largely moving to different places around the country and it's a competition between states and cities okay we're gonna go from super local to
00:45:43
global um you know this is a topic i wanted to talk about today because i want to bring together a
00:45:48
couple of threads and get your guys's take on you know all
00:45:53
of these things kind of coming together and what it means for foreign policy and um how things might play out on the
00:46:00
global stage in the next um you know call it years to decades xi jinping it's been reported this week
00:46:08
is taking a trip to saudi arabia you know this is just a few weeks after
00:46:13
uh joe biden made his trip uh to saudi arabia i'll read a just an excerpt um
00:46:18
he's gonna end his more than two years of self-imposed in-person diplomatic isolation and his first trip is gonna be
00:46:24
to saudi arabia uh you know this is uh from unnamed saudi sources so it's unclear this isn't
00:46:30
an official statement uh this is just reporting you know the wall street journal reported in
00:46:37
march that after six years of negotiations china and saudi arabia are getting close
00:46:42
uh for china to start pay uh um uh paying yuan for oil that they would
00:46:48
be buying from the saudis um so there's an important kind of economic tie-up that may be emerging that could affect
00:46:54
the u.s dollar and the the importance of the us dollar on the global economic stage
00:47:00
and meanwhile this week as well it's been reported that china is doing military exercises with russia
00:47:06
inside russia so there is um an extension of china and their influence
00:47:12
and their economic tie-ups and their military activity with both china sorry with both russia and saudi i also
00:47:19
want to highlight another important point that came out this week saudi aramco reported their earnings the
00:47:24
largest earnings ever for a company 48 billion dollars of net profit in a
00:47:30
quarter that is more profit than microsoft apple facebook and tesla combined in a single quarter
00:47:38
it is the most profitable business and saudis have been very public about their intention of divesting their interest in
00:47:45
saudi aramco which is their state-owned and state-run oil company and moving into other businesses over the past
00:47:52
couple of months it's been reported that they've accumulated a nearly 100 billion dollar equity portfolio owning stocks
00:47:58
like alphabet zoom microsoft and others it's also been reported that they own over 160 billion dollars of u.s
00:48:06
treasuries so the us is very dependent in the private equity community in the vc community and in the
00:48:12
public markets on saudi dollars saudis have been large holders of u.s dollars and now through china it looks like the
00:48:18
saudis may be having a tie up that brings them closer to china through this trade relationship with the yuan and the
00:48:24
visit from xi jinping while china is actively exercising um you know their
00:48:29
military inside of russia is the future a china russia saudi access and should we be
00:48:37
concerned and should we be changing any of our tactics on foreign policy david sacks as this um you know set of threads
00:48:44
plays out uh over the next couple of months and and you know going in yes i think we do need to make some changes
00:48:50
brian's backing away from this now but in his first year he declared the saudis be pariahs and he did push them into
00:48:57
china's arms what was the point of that bain recently had to go to the middle
00:49:02
east to basically beg saudi arabia to increase their production of oil so he's already acknowledged that policy didn't
00:49:08
work and one of the reasons it didn't work is because simultaneously with declaring these allies to be enemies he
00:49:14
basically restricted us to energy production which is you know strategically
00:49:19
undermined and the us has military bases in saudi arabia very strategic assets
00:49:24
for the u.s military yeah let's listen and we sell them weapons the u.s relationship with saudi arabia is always going to be
00:49:31
complex they're a complicated friend to have but it's much better to have them as a friend than basically drive them
00:49:36
into china's arms and the reality is whatever you think about the regime there and how oppressive it is
00:49:43
first of all we don't get to choose the people running these countries that's the lesson we should have learned over and over again from all these failed
00:49:49
regime change operations second do we have any reason to believe that if that regime got toppled it would get replaced
00:49:55
with something better i think we all know that if the regime there fell it would probably be replaced with
00:50:01
something fundamentalist that we would like even less and certainly if another nation were to basically
00:50:07
dominate the region like iran that would be worse for us as well so our relationship with them is complicated
00:50:13
but ultimately they should be i think allies of the united states and we should not be working overtime to push
00:50:18
them into china's arms and i think similarly with russia we've basically declared ourselves to be engaged in this
00:50:25
proxy war with russia which strategically there's just nothing in it
00:50:30
for us you can sympathize with the people of ukraine all you want yeah i mean it's dangerous you've said that in the past
00:50:36
and i think the question is does this china military exercise in russia indicate an escalation
00:50:42
of our conflict with china to you um you know or is this something that
00:50:48
you know just kind of par for the course in terms of you know neighbors you know conducting
00:50:53
mirsheimer just said an article in foreign affairs talking about uh the ukraine war reminding us that it's still
00:50:58
going on i think people somehow think that this war is just stable and it'll settle into forever war status kind of
00:51:05
like like afghanistan these conflicts in the middle east went on forever it's actually very dangerous it could always
00:51:10
escalate out of control and as long as it's going on i think we just have to remember that it's going on
00:51:16
it poses a huge global risk and i would say that one of the things that again we should
00:51:21
be aware of is this idea that even though we have problems and conflicts
00:51:27
with multiple nations we still don't actually want to push them into each other's arms again the soviet union and
00:51:32
china during the cold war being the key example i mean this principle of geopolitics goes back thousands of years
00:51:38
the romans right davide at impera divide and rule you do not want to unite your enemies and what we've done here is we
00:51:45
keep pushing them together you know china and russia historically have not been friends they
00:51:52
share long borders together neighbors generally have problems with each other these are nations with serious
00:51:58
conflicts or differences of interest and we've made it really easy for china to
00:52:04
to turn russia into the junior partner in that relationship jamaat do you think u.s foreign policy needs to change and
00:52:10
that we're setting up this you know axis of conflict um this access of
00:52:16
allies that we don't want to have the allies and you know would you kind of
00:52:21
advise and also you know do you get concerned about this oil yuan trade where there may be some
00:52:29
you know economic tie-ups that that really could affect uh uh you know the the dollar as a reserve
00:52:34
currency look couple things i i think it's really dramatic to kind of paint it in these dark kind of like
00:52:41
bipolar terms i think we are post all of that so i i understand how
00:52:46
in the cold war it was easy to fall into binary definitions of good and evil one and zero us versus them team a versus team b
00:52:54
but in 2022 i don't think that's how things work anymore we're in a highly interconnected highly global world it's
00:53:01
very complicated uh dollar flows are real time they're massive cooperation is
00:53:08
real time it's all over the world it's with every country so it allows every country actually the first chance that
00:53:14
they've ever really had to maximize their own potential for their own citizens and that's really
00:53:19
what every country's goal is right and so in that lens look what just happened today
00:53:25
gasprom said they're going to shut off nordstrom one just for you know a few days right but as a result of that eu
00:53:31
nat gas has just gone absolutely nuclear and just closed at all time highest teen x 14 x where it was pandemic right uh
00:53:39
you know price per unit for a year ahead so if you so if you take a step back we are at max
00:53:46
energy production with all of the capacity all around the world 100 plus odd million barrels a day
00:53:52
okay global productivity absorbs that there is very little room right now
00:53:58
to expand that without pushing the date in which that capacity is available
00:54:04
out until you know 2028 to 2030 so effectively a decade from now
00:54:09
so if you're in this situation and you're a country with vast natural resources of which i'll just remind us
00:54:15
america is one i think the most important thing you can do for your own citizens is to monetize
00:54:22
these petrochemicals now get it out of the ground in a reasonable way
00:54:27
sell them in the marketplace because there's demand for it take that money and reinvest it in your
00:54:32
people and i think if you look at it that way the best run countries are responding to
00:54:39
this moment in time like any company would how do you maximize demand and sell the product you have to the most
00:54:45
number of customers globally and so i think the middle east is doing an incredible job the us by the way by
00:54:51
passing the ira finally i think is on the right footing because we can talk about this in a
00:54:57
moment but the path to permitting and the path to clean up and by the way it puts fossil fuels
00:55:02
on a level playing field with with clean energy alternatives emerging
00:55:08
alternatives yeah the best thing that could have happened okay so i think we're all behaving
00:55:14
in a very rational market-focused way and so i would focus less on trying to
00:55:21
dramatically kind of resolve these things as a few countries versus everybody else i don't think that's what's happening
00:55:26
yeah much more complex much more complicated than that but i think the simple explanation is
00:55:32
people with resources in the ground of the country in which they rule have a responsibility if they believe that
00:55:39
there's market demand to absorb that so that they can take the revenue that comes from it and reinvest it in their
00:55:44
people that is true for the united states it's true for saudi arabia it's true for every country in the world
00:55:50
saudi arabia is clearly making these investments right not just on yeah and by the way i mean like but also housing
00:55:55
and new industry and education and then by the way saudi arabia and saudi arabia is becoming much more
00:56:01
liberal as a result too right the education standards yeah and if you look at the investment like you know you
00:56:07
didn't you you didn't need to go to dave swenson and understand portfolio allocation although i think the guys in
00:56:13
saudi are smart enough to have probably done it but if you're if you have a lot of money
00:56:19
coming from one kind of business and you need to make sure that you can diversify so that you can reinvest over
00:56:25
a long period of time if you look at countries that had huge petrochemical related revenue flows the nordics what
00:56:32
did they do they stood up these huge sovereign wealth funds and those sovereign wealth funds went abroad and they bought all kinds of
00:56:38
non-correlated assets to those petrochemicals that is the same thing that saudi is
00:56:43
doing that financial security for their people but it's like it's like what is the furthest uncorrelated asset from oil it turns out
00:56:50
it's apple facebook meta and google and uf us treasuries yeah yeah uber yeah hey
00:56:56
so jk let me let me ask this contrarian question for you because you you often talk about the authoritarianism uh of
00:57:03
these states saudi china russia you know it seems to me as we observe
00:57:08
what's going on in saudi and maybe the case could be made in china to some degree although there are
00:57:14
steps taken back but also in russia that the u.s influence the the economic
00:57:20
and the political influence associated with these these foreign policy conversions could they maybe be driving
00:57:28
these business these countries to be more liberal you know we're seeing in in saudi arabia that women can drive that
00:57:34
there's new industry that there's education that there's a technology industry booming that the you don't need
00:57:39
to have a turnover of government and a turnover of what is often classified as
00:57:45
authoritarian regime for the operating model to be influenced by the west in such a way that change
00:57:51
happens more slowly and you do see liberalism emerge in these countries with better educational standards more
00:57:57
equality more more human rights and so do you think we're because you often kind of paint a picture that it's
00:58:04
bad guys versus us you know do you not think that we're making an influence on these places locally and that we're
00:58:09
seeing well i would take exception to like it's bad guys versus us i don't i don't think we want to create a legion
00:58:15
of dictators and nor do i think that's what this is i would actually agree with sacks we should be embracing these folks and having strong
00:58:22
relationships with them even though we are fundamentally different uh operating systems for our countries democracy do
00:58:27
you think we should be embracing you so you think we should have a relationship with putin just 100 i mean and we did right i mean obama
00:58:35
was making some progress on that and we we did some great work um when
00:58:40
and obviously trump has a very very long standing very deep we don't exactly have
00:58:46
deep relationship with uh putin and we did great work with we did i mean they did the
00:58:52
he did his pageant over there i'm making some jokes they bought a lot of apartments yeah that was that was a joke okay just a little joke there but who
00:58:58
knows i suppose okay but we did great work with china in terms of containing north
00:59:03
korea's nuclear ambitions right and so there are things we can collaborate on i think the
00:59:10
most important thing though is that while we're embracing them building fabric between them communication trade
00:59:15
whatever it is we are not relying on them and that's really what we have to look at when it comes to
00:59:20
the kingdom because if not for the fact that the kingdom won the you know born on top of you know oil
00:59:26
fields uh lottery we would not be uh in a deep relationship with this country
00:59:31
they're living under a 10th century you know rule uh in terms of how they treat women gay people et cetera and the
00:59:38
human rights is an important issue and we wouldn't have a deep relationship with them if we didn't have to deal with the oil but we do and so
00:59:45
what i think we really need to be focusing on here is maintaining great relationships with them yeah we don't want to drive them to each other's arms
00:59:51
but to chamat's point i i don't think they're creating the legion of doom to take on the us i think they're just
00:59:57
doing what's in their economic interest and we need to do what's in our economic interest which really is investing in
01:00:02
nuclear investing in solar batteries wind and even britain and bridge fuels
01:00:07
in the interest of the free world and europe exactly and if we are independent of them then
01:00:13
we don't have to go over there and kiss the ring like biden had to do we don't have to
01:00:18
you know deal with excuses uh when they do horrible things like murder khashoggi or you know just this
01:00:24
past week they put uh sama al-shahab in jail she's a phd student from the
01:00:30
university of leeds she's now going to go to jail for decades because uh when she went back to
01:00:35
saudi arabia on vacation this happened last week um gentlemen because she retweeted people and so
01:00:41
these human rights violations the murder of khashoggi all these things add up the uyghurs et cetera and and we'll have a
01:00:46
better ability to negotiate and lead them as the shining city on the hill when we work on being that shining city on the
01:00:53
hill and we're not dependent on them and that's really what i think we have to focus on is reducing the dependency on these countries i think we all agree
01:00:58
whether it's medical devices ppe drugs making our iphones or or oil to keep us
01:01:06
right and then so does europe and that's where nuclear comes in speaking of reducing dependency you know joe biden
01:01:12
signed the inflation reduction act some people have said this is the most important bill signed in years if not
01:01:20
decades by uh you know passed by a u.s congress signed by a president
01:01:26
because it touches on so many points um that folks believe
01:01:31
will really move the needle with respect to climate change jamal i think you made an interesting
01:01:37
point in our group chat and i think maybe we should start there which is you know at the end of the day
01:01:44
the systems of industrial production on planet earth were made in such a way that we never
01:01:51
accounted for the costs of the external output of these systems meaning we can
01:01:58
burn fuel put co2 into the atmosphere or put methane into the atmosphere in the case
01:02:03
of animal agriculture and we get a low-cost product that we consume and ultimately no one
01:02:09
specifically pays for the cost of the carbon going into the atmosphere which i
01:02:14
and you know many scientists would argue is having an anthropogenic effect on um
01:02:20
the warming of the planet and more catastrophic weather and and all these other risks that we're now facing and so
01:02:26
the idea was you know first principles you should tax people
01:02:31
for tax industry tax businesses for the production of atmospheric carbon that causes an
01:02:37
effect that we're all going to have to pay to repair over time so you know is that a point of view that
01:02:43
you hold chamoth because you know you kind of brought this up in our group text but that's the that would be the the ideal scenario to resolve climate
01:02:50
change is if you just tax carbon we kind of you know have our have a real solution here and that this whole bill
01:02:56
is ultimately uh you know meant to kind of resolve the fact that we simply cannot find a way to a carbon tax i actually
01:03:02
think that what this bill did was kill the idea of a carbon tax i think it makes it completely
01:03:10
unimportant and it'll never see the light of day why i think it's because
01:03:16
in the absence of what we did in the ira there wasn't a clear way
01:03:23
of doing exactly what you said which is letting people figure out what the equivalent
01:03:30
trading price would be for burning a pound of coal versus you know generating the energy needed to run
01:03:36
something off of nuclear there was no market clearing function for that and the reason is because you couldn't
01:03:42
get an equivalent amount of capacity effectively available online so that they could compete one for one
01:03:48
what we did through this ira was essentially use money
01:03:54
to create so many subsidies and then to also green light the way that incremental fossil fuel
01:04:01
projects would come to market so that now they actually going to be put on a level playing field
01:04:08
in the broad open market so they can compete when that happens i think you will make those trade-offs
01:04:14
better yourself and as a result i don't think that there will be a necessary offset
01:04:20
mechanism that will be required because this plan will still get us to about 40 percent of the way there where
01:04:25
we wanted to be by 2030 which is still a pretty decent leap forward there is no plan that gets us to where
01:04:32
we all need to be anyways and i think that the appetite to go from this plan
01:04:38
to where we need to be doesn't really exist so i think that we're just going to have
01:04:43
to kind of grit our teeth get through the implementation of the ira and realize that this is the
01:04:49
beginning of a probably a hundred plus year project nothing's going to get solved by 2050
01:04:56
maybe you'll see something done by 2100 probably not it'll probably be a 2150 2200 kind of an
01:05:03
objective and in that lens i think like a whole bunch of business models got turned upside down so
01:05:10
i think carbon markets and carbon trading are not going to be the thing that we thought it was going to be
01:05:15
i think stuff like direct air capture again are going to be toy projects off to the side i don't think that those are
01:05:21
toads are not those are not going to be credible businesses totally like we thought they were going to be
01:05:26
instead the raw tonnage of dollars will do what america was able to do for
01:05:31
solar and pv over 2000 to 2022 which is just crush the cost per watt into the pennies so
01:05:38
that it can be equivalent to hydro coal and nuclear and put everything on a level playing field and
01:05:44
then allow the market to figure it out yeah i mean there's a lot of other stuff in this bill
01:05:51
i want to highlight for you guys i don't know if any of you looked at the cbo so the cbo the congressional budget office
01:05:57
anytime a bill is being voted on they do an accounting analysis
01:06:02
on how much spending and how much revenue there will be as a result of this bill for attendance is actually
01:06:07
awesome yeah i checked it out so yeah if you look at every year for the next 10 years the cbo score for this bill is
01:06:13
that we're going to spend an incremental we're going to increase the deficit by 330 billion dollars for the next five
01:06:19
years and then we're going to decrease the deficit by 320 billion in the five years after that so the net effect over 10
01:06:26
years is we're only spending 17 billion dollars on the on the bill and then on
01:06:32
the revenue basis the expectation is we're going to generate 67 billion in revenue in the first five years and
01:06:38
then another 20 billion in the in the back five years so this is actually being accounted for and presented as
01:06:45
deficit reduction and that's because there's 87 000 new irs agents being hired to go out and
01:06:50
audit people and find new revenue and there's a 15 corporate minimum tax being imposed on all companies and what this
01:06:57
means is that companies public companies private companies doing over a billion in revenue historically pay taxes on a
01:07:03
book basis now they're paying taxes on a financial statement basis meaning the actual accounting that they present to
01:07:09
their shareholders can i can i ask you guys a question how much was given to the irs 87 billion
01:07:15
yeah yeah tens of billions yeah 80 billion how much do you think it would cost
01:07:20
i don't know pick your pick to pick the most excruciatingly expensive third-party outsourcing firm you could
01:07:29
okay to build an entire system to basically
01:07:34
automatically review every single tax return and throw exceptions and machine learn and machine learning what fraud
01:07:42
looked like or what misrepresentation let's say five billion dollars it'd be
01:07:47
the most expensive it'd be the most expensive piece of software ever written and this is what was so kind of like
01:07:54
that was the only part of the bill that made not a less sense to me i think like if you put really smart computers on the
01:08:00
case or gave it to deepmind at google and said can you guys build this this system or machine learning and ai you'd
01:08:07
be tax and a simpler tax which i guess this is trying to do but you know freebird when i looked at this and you sent it my initial reaction was
01:08:14
you know this old adage it'll be impossible for these guys to find 87 000 humans that want to work at the irs
01:08:20
number one by the way there's a funny video on the recruiting that's been going on for that but yeah go ahead yeah it's pretty good i mean you know because
01:08:26
they were they were asking for people who were ready to like have guns and like be put their body in harm and i was like that's crazy i was like that can't
01:08:33
be real anyway the greatest this is what i got from this excel spreadsheet the greatest tool for writing fiction is not
01:08:39
microsoft word it's excel like there is no way this thing is netting out to zero like this thing's gonna cost us a
01:08:46
fortune government is in shambles we don't know what we're doing i thought that the links you sent for the podcast
01:08:51
with the pros and cons of the carbon tax was really interesting because it is so complicated when i
01:08:58
heard these tax experts explaining how you would implement a carbon tax and the import and export and then how often it
01:09:04
would have to be tweaked and then who decides what your corporate footprint of your watch is and and where did the
01:09:10
minerals come from to make the watch and who gets paid on carbon it just seemed to me there's a fool's errand it would
01:09:15
be much better to just what if your watch is made from diamond and not carbon well in that case
01:09:21
you should just pay a million dollars because you are the latest coastal elite
01:09:27
and we should just start with yachts and watches what i realized was
01:09:32
what we really need to focus on and you tell me if what you think um freedberg
01:09:37
instead of doing this carbon tax which seems incredibly elegant but we all know it's impossible to get consensus across
01:09:43
hundreds of governments and locales to to to negotiate this it'll never happen at least not effectively and in real
01:09:49
time wouldn't it be a much better technique to do what we do in venture which is here are the biggest problems
01:09:55
in the world here are the which in this case would be the biggest emitters here are the best solutions here are the teams working on the best solutions
01:10:01
let's give the teams working on the best solutions to work down that list and if it happens to be
01:10:07
you know ships coming from china you know with a bunch of containers arm and container ships we we measure that and you know the the
01:10:14
thing i've learned after the first six months of investing in carbon because we have a syndicate now at mollywood who's working with me on um this climate
01:10:22
syndicate we couldn't find a lot of great investments you know that made sense that weren't
01:10:27
you know asset heavy but then we started to find uh we found two great monitoring companies and they're monitoring air
01:10:34
pollution and they're monitoring ship pollution and we made investments in both of those and that seems to be where
01:10:39
we're at is we should be monitoring and figuring out where the carbon is and then trying to solve it
01:10:44
based on which ones are the easiest to solve let me just say two things on that bill gates has done a great job of this you can read his latest book or go to
01:10:50
gates notes and he's done exactly what you described which is break it all down show what we should do and that's actually how he's investing his own
01:10:56
money he's putting his money where his mouth is so there's a really good blueprint for this he's done the best job of anyone i've
01:11:01
seen the issue with the carbon tax is you have to come up with a consistent reliable way of measuring the carbon and then you have to do it consistently and
01:11:08
broadly how do you miss you know if you miss one factory or another then you have to ratchet up the price over time
01:11:13
so first thing is the challenge of how do you agree on measuring second is how do you agree on broad accountability
01:11:18
third thing is how do you ratchet the pricing over time fourth thing is how do you deal with the offshoring problem as soon as you start taxing companies in
01:11:25
the u.s for carbon emissions all the production is going to go offshore where they're not taxing for carbon emissions and there's no way to account for what
01:11:30
they're doing offshore and this has been the challenge with china there is so one there is because it's part of your first
01:11:36
project yeah sorry let me just hit the final one we'll come back to it but the final big one is just the equity in carbon tax people have said that the
01:11:43
ultimate increment in cost of production is going to adversely affect lower income people because they cannot afford
01:11:49
the price of some stuff going up by 25 to 50 and it's really you know a luxury good a
01:11:56
luxury um kind of privilege to be able to pay for the incremental cost of stuff uh to account for the carbon offset
01:12:02
needed so that that's that's the set of issues that have been pushed back against the carbon tax and it's why it's
01:12:07
been impossible to get implemented and to really get into markets all right chemo go ahead i was just going to say
01:12:12
part of the the problem in in in all of those issues if you offshore is still that there's people pushing for what's
01:12:18
called the scope 3 accounting which is like you know you got to go back to your supplier and your supplier supplier and
01:12:23
your supplier supplier supplier and what is it it's impossible where does it end it's it's not credible so you know i
01:12:29
think that the bill has actually cleaned up a lot of future question marks about
01:12:35
what we have to do as a country to go about doing our part for climate change and i think it probably creates a
01:12:41
reasonable blueprint for everybody else and now they're going to have to do some version of the same thing and
01:12:46
what's amazing is that if we actually pass this framework which is still yet to be written
01:12:52
around how to make permitting more seamless and efficient for these hydrocarbon projects
01:12:58
it will really unleash a massive torrent of both revenues back
01:13:04
to the united states um it'll increase our national security and it'll allow us to really kind of put
01:13:11
a dent in this thing because it'll pull forward the amount of competition that it creates to actually
01:13:16
get off those hydrocarbons which is a i'll tell you i got i i got a notice from someone who's an investor so
01:13:22
there's a lot of climate tech funds now a lot of funds jkl you said you got a syndicate and carbon but there's a lot of funds and a lot of investors that are
01:13:28
putting a lot of capital just into early stage climate technologies um which travels everything from energy
01:13:35
to materials to food to industrial and manufacturing and so on and i got a note from one of
01:13:42
these these companies a startup that highlighted that the dollar 25 per gallon credit uh tax credit uh for uh
01:13:50
you know clean production of fuel which ca which has to demonstrate a 50
01:13:56
emissions reduction in the manufacturing process will now make this startup profitable and by the way you get an
01:14:01
extra penny per gallon for every one percent reduction in emissions below that 50 threshold
01:14:07
and so there's a lot of startups that i'm hearing about that their unit economic models were questionable before
01:14:14
now because of this bill they are flipping profitable and so i personally think we are going to see a significant
01:14:20
influx of venture capital and support for a lot of these climate tech and you know new energy material and
01:14:26
manufacturing projects that otherwise may have been held back because the subsidy will kick-start the
01:14:32
question for me that i still don't have a good answer to is are they sustainable over the long run if this bill gets shut
01:14:38
down or repealed and the funding sources stop and the subsidy stop do these businesses survive or are we simply
01:14:44
creating regulatory capture models like we did with other energy products in the past and with food if you're not
01:14:50
contribution margin positive today free this bill in climate change
01:14:55
and the bill is the only way that you get there your doa you just don't know great point yep sax the biggest line in
01:15:02
this bill is the corporate minimum tax i don't know if you saw this but 15 minimum tax applied to the accounting
01:15:08
profit reported by any company over a billion dollars and they're estimating it'll generate 313 billion of
01:15:15
incremental tax revenue over the next 10 years do you have a point of view on whether this corporate minimum tax is going to
01:15:21
cause an issue with startups and companies going public or the valuation in the public markets or is this just
01:15:28
you know hey this should happen it doesn't matter i mean i don't know if you spend much time on this well no i mean i think the the issue here is that
01:15:36
why is it that these companies are able to pay so little taxes well the reason is because there's a zillion loopholes
01:15:42
and incentives and tax breaks in the existing code that they're taking advantage of i mean these large companies have lots of accountants and
01:15:48
lawyers they're not deliberately violating the law they're scrupulously adhering to it and taking advantage of
01:15:54
it so it's all these tax breaks that they're able to use to pay no taxes well what does this bill do
01:16:01
you talk about the the spending on climate you know the 386 billion most of it is
01:16:07
tax incentives and some block grants so this is now the preferred form of you
01:16:13
know quote unquote spending in these bills are tax credits and incentives this is the way they're going to change
01:16:19
people's behavior so in other words the bill on the one hand is complaining that corporations don't pay enough taxes
01:16:25
because there's too many tax breaks while on the other hand creating a whole slew of new tax breaks
01:16:30
so there's a little bit of a contradiction there again why do al why are companies paying no taxes because of the last 10 bills tax breaks that
01:16:38
we're supposed to move the behavior of businesses and consumers in a certain direction
01:16:43
so just recognize that that's the case i think you also made a really good point about the phantom deficit
01:16:50
reduction here so like you mentioned and we see this in lots of bills all the
01:16:55
excess spending all the deficit spending occurs in the first five years and all the deficit reduction occurs in the last
01:17:01
five years something always intervenes to prevent the the uh savings from starting places it's like startup
01:17:07
projections right sex yeah it's like we're i lost my sales guy we'll cut the budget next year you know
01:17:13
and so just to give one example of this so this aca subsidy extension so this is the obamacare
01:17:20
subsidy it's about 60 something billion a year they're extending it for three years but they're assuming it's going to
01:17:25
die at that point as opposed to keeping extended and no one's going to want to vote to make that go away in three years just
01:17:31
like they don't want to vote to make it go away now so if you extend that subsidy three years from now just that
01:17:37
one item alone makes the deficit reduction of this bill go from 305 billion over the 10-year period to
01:17:44
negative 155 billion so just that one item if you continue it and don't sunset
01:17:50
it just that one thing makes this a hugely deficit
01:17:55
not reducing bill but deficit increasing bill and so you wonder what problem is this
01:18:00
bill really solving and they can't seem to agree on that i mean first they're telling us it's a deficit reduction bill then they're telling us it's a climate
01:18:06
bill then they're telling us it's an inflation reduction bill it seems to me that if they're really proud of this and believe in it they would choose a name
01:18:13
for the bill that actually reflected what it was well all bills would be named something for everyone sex i mean
01:18:18
like that's how all these bills get in order to pass a bill a bipartisan bill you got to give something to everyone i mean
01:18:24
but this is mostly you know this is mostly a climate related bill you know this is mostly this is mostly tax breaks
01:18:32
and block grants related i mean there's a huge tax issue with the the the irs agents yeah corporate minimum tax but
01:18:39
there's also a huge component on prescription drugs jamath i don't know if you spent any time looking at this
01:18:44
but sorry just on the irs agent i kind of say add one detail on that yeah so the claim of the administration and the
01:18:50
sponsors of the bill is that this would not increase taxes on any one sort of middle class and so the republicans i
01:18:57
think is one of the few politically smart things they did they introduced an amendment basically prohibiting these
01:19:03
new 87 000 irs agents from conducting audits of anyone making less than 400
01:19:08
000 a year which was what biden said you know he wouldn't increase taxes anyone below 400 000. that amendment was
01:19:15
rejected on straight party lines so this idea yes it's called the krepo amendment it was 50 50
01:19:21
and vice president harris had to come in and make the tie-breaking vote so obviously they know that there's gonna
01:19:28
be a lot of net new audits on people making lessons yes exactly so
01:19:34
my understanding of this is it's like small business owners people who run a small business and a service business and are they really accounting for their
01:19:40
books correctly are they really expensing the right things et cetera are they accounting for course
01:19:45
they're going to get win yeah they're going to get whammy by this because look let's face it billionaire
01:19:50
is already getting audited you know elon had a tweet saying listen i get audited as a matter of course every year you
01:19:56
know these people already have say yeah dude i use a big four accounting firm yeah i mean i mean the amount of
01:20:05
crazy i have a partner at like anderson that is literally like you know covered being like a fortune 500 [ __ ] company
01:20:11
might as well be in ridiculousness put them in your eye your your uh put them in your unit
01:20:17
i mean by the way sax is right like if if you look at the you know the ultra wealthy
01:20:23
i i think it would be i would be shocked if any of those folks were actually evading taxes at all because it's
01:20:30
impossible the way that this infrastructure runs like you know you're getting k1s from blackstone what are you
01:20:35
going to do you're going to change that like totally you know like do you guys even know the pin number of your bank
01:20:41
card i have no idea so complicated yeah okay so so my point is i don't think
01:20:46
that if there is if there is cheating of taxes that's happening at that level
01:20:51
what's happening at that level are much more structural issues like carried interest which they decided not to touch
01:20:57
or state law in history those are those no i don't think that's my point it's not mistakes there's nobody with a
01:21:03
pencil really filling out a k1 for bill gates dummy that's my point
01:21:09
no i know but people can make mistakes what if a k1 gets left off that's what i'm saying is when they find something it's usually easily
01:21:15
found it doesn't happen it doesn't happen when i get my tax return it's it's done by an accounting firm and i just signed
01:21:22
it i don't know i know that what i'm talking about is what are the irs people going to find is you know i'll tell you
01:21:27
what they're going to find they're going to fly they're going to find a lot of middle class and upper middle class folks
01:21:34
and they're going to have to focus on them because individually it may not represent a lot
01:21:39
but when you multiply it by the number of people inside the united states and this is what the wall street journal and
01:21:45
a bunch of other folks have been saying now when you apply 87 000 people and
01:21:50
task them incrementally with doing a job it's not going to touch these folks that
01:21:55
are already audited it's going to touch the folks that are not audited and by and large a much much larger majority
01:22:02
of middle income and upper middle income people are not audited which is why i
01:22:07
think you could spend a lot less than 80 billion dollars and just build software that guarantees only those that should
01:22:13
be audited are and uses machines to help figure out these leaks or start simplifying the tax
01:22:18
code because when you add this 15 minimum freedberg what is that going to do to the strategy of a public company
01:22:25
okay so we should show less earnings put more to work oh we're not going to be able to depreciate this or you know
01:22:30
whatever i mean it's going to create all these second and third order impact impacts that we don't know well i think sax's point is important which is one
01:22:37
that we don't yet have insight into which is what is this gonna cannibalize because ultimately if there is a minimum
01:22:43
tax it doesn't make sense to pursue um incentives that create a tax break
01:22:48
today and therefore those incentives won't be invested in whatever those incentives are i don't know what they
01:22:53
are you know low-income uh manufacturing zone development or whatever who knows um you know what they
01:23:00
are you know come and build your business here and get tax breaks et cetera et cetera local state and federal tax breaks um if
01:23:07
those start to um get written over then there's going to be really adverse effects and i think that that's
01:23:13
something to watch i don't understand it well enough certainly i'm not an accountant but i i would be kind of uh
01:23:19
worried about and keeping an eye on that front i do think the bigger question which is a biotech one
01:23:25
the prescription drug price cap minimizes the profits that a number of pharmaceutical companies will be making
01:23:32
it gives the authority to go and negotiate prices this is the second largest line in the bill
01:23:38
and there was a survey done by healthaffairs.org on an r d survey
01:23:44
which said will you guys reduce your your investment in new drug development
01:23:51
and i think that they ca based on this bill and i think that they came up with some estimate
01:23:56
that there would be um two uh the number two fewer drugs that would be kind of you
01:24:03
know made available per year because of reduced spending as a result of the price cap which
01:24:09
basically reduces revenue which will in essence reduce r d investment you know guys like bernie sanders will
01:24:16
say hey that's not true all that money is going to share buybacks and dividends uh and so on but it is a fact that those
01:24:24
share buybacks and those dividends will still continue and if they are reduced so will the r d expense and if the r d
01:24:30
expense is reduced fewer drugs will come to market and so you know there's also a question
01:24:35
mark and people will debate this for the next decade which is how much will this prescription drug price cap actually
01:24:42
have an effect on r d investment and ultimately on new drugs that come to market sorry let me just say my personal
01:24:48
opinion is i don't think that this will have a huge effect i think this is an excellent part of the bill i think that the government should have authority to
01:24:54
go and negotiate they're the largest buyer of these drugs and typically when the us government the federal government steps in to be the largest spender on a
01:25:00
particular line the cost of that line balloons like we've seen in health care
01:25:06
like we've seen in education and like we've seen in military and
01:25:11
defense spending and so i i'm hopeful that this will actually provide a more effective market
01:25:17
force in allowing the biggest customer in the market to negotiate prices and that the the vcs instead of making
01:25:25
48 irr they'll ultimately make 28 irr on the investments that they're making in biotech startups
01:25:33
what exactly does it mean for the government to negotiate prices as opposed to the government just to fix
01:25:38
prices i mean is this just price fixing well in this example in this example is the right answer if they're the
01:25:44
largest single largest customer sacks right i mean you know and they are the market i mean what's the right thing to do
01:25:52
well i mean you're you're saying that these drug companies are going to make a lot less money well obviously that's
01:25:58
going to have a downstream impact in the willingness to fund new drugs
01:26:03
new investment you are indeed yeah yeah now no one likes pharma companies i'm not defending exorbitant profits or
01:26:08
whatever but i don't really know what it means for the government to say they're negotiating i mean the government just tells you what it's going to be that's
01:26:15
price fixing and these companies are going to adjust yes the government will pay less money in
01:26:21
the near term in the long term there could be reduced investment in r d i think there'll be a balance of you
01:26:28
know do you don't all governments don't all governments i know that you're close to some of these uh drug companies
01:26:34
don't all governments negotiate um the purchase of these drugs and then if they don't like the price there are
01:26:40
alternative drugs and they'll say hey listen your drug is too expensive compared to these other two solutions so we're going to buy this one primarily
01:26:46
for our universal health care there's an interesting thing that happens which is that there's a there's these drugs that are proprietary and
01:26:53
under patent okay these could be chemical drugs or they could be biologics okay
01:26:59
and eventually what happens is when they go generic then folks will step in and
01:27:05
make lower-cost versions of those generics like you know i mean i'm on a statin i think a couple of you guys are on a statin like i don't
01:27:11
it it it's it's lipitor but it's not lipitor right it's a torvastatin it's like some generic drug that i just take
01:27:18
okay as an example um and uh there's a lot of folks that make that and the cost of those pills
01:27:24
basically go to zero but there's a bunch of categories particularly for biologic drugs where it's very different it's
01:27:30
very difficult to make a what's called a biosimilar this is a generic drug so long and short of it is there's all
01:27:36
these classes of drugs that kind of like stand alone without enough competition and i think there are two ways to solve
01:27:42
this problem one is where the government steps in which i think is is good but the better
01:27:48
way has already is already been happening in the united states so you know there's a non-profit which is a collective between a bunch of hospitals
01:27:55
called civica and i think that's a really interesting example and what those guys do was they said we're just going to create our own generic drug
01:28:02
manufacturer and we're going to make the drugs we want we're just going to make them super cheap and you know they're they're in the
01:28:07
midst right now of completing a massive facility i think it's in virginia where they'll be able to make
01:28:14
as much insulin as is needed for the entirety of america
01:28:19
for no more than 35 bucks a dose that's gangster that's gangster it's just super gangster we'll make our own
01:28:27
and by the way when california said they're gonna make their own what they really meant was that they're gonna go and rfp it out
01:28:34
and my hope is that they end up going with somebody like civica who has the experience of actually building it
01:28:39
otherwise it's just gonna california's just gonna waste hundreds of millions of dollars proposal if you don't know what rfb is request for yeah but there are
01:28:46
these emerging non-profits that are basically doing the work of the government i think that's a
01:28:52
better solution to what sacs is actually competition right yeah it kind of creates competition yeah competition we got to move along because i think
01:28:59
you're doing a great job freedberg right just one moderator to another exceptional job you know i appreciate it i think one of the interesting things
01:29:05
sitting in your seat j-cal is you see everyone else's face and you see the boredom and the annoyance that people
01:29:12
experience during the the podcast watch the island right leave for a drink i think i think chamoth is eating funyuns uh saxons no
01:29:19
jerky jerky i've been eating jerky you shouldn't be don't tube in on the podcast please yeah i know and i think
01:29:25
that the um don't what the don't do a jeffrey twoubin on this podcast
01:29:30
no that's jeffy was a cnn anchor who on zoom accidentally no he masturbated on a zoom call with
01:29:38
his what the [ __ ] does that have to do with beef jerky you said jerking and i just thought i said i was eating jerky
01:29:43
dummy you said you were jerking something that's all i heard i'm sorry oh by the way so i am no longer fighting
01:29:49
with phil hellmuth i oh my god guys i'm still blocked no so i was so mad at him
01:29:55
okay so you know i finished i finished this transition i finished i finished the [ __ ]
01:30:01
transaction to sell the warriors you know this is a this is a six-month ordeal okay i started in november right
01:30:07
i'm starting to sell things i decide i'm gonna sell the warriors i sell it to a large
01:30:14
private equity fund in november december and then we had to wait for them to close the second fund and then we sold
01:30:19
the rest of it and it closed in june or july and then i put out this tweet right like thanking everybody and thanking
01:30:26
hellmuth the same line in which i i i'm like i thanked peter thiel and i thank joe laker
01:30:32
everybody is happy except for hellmuth who calls me and is angry and he's like i i you know he had this issue with how
01:30:38
it was characterized at how he had introduced me or something where he wanted credit for wasn't it
01:30:44
of the tweet storm he should have been higher up or you know and i was like well phil what if it hadn't made me money would you have just made me whole
01:30:50
like what would you have done like it's like you were like the architect of this thing anyways i was so mad
01:30:56
i just said i'm not talking to this [ __ ] anymore i'm done with him i'm done i'm breaking up with him
01:31:01
and he would call me when i was in europe and i would ignore and i would get this incredible enjoyment from just pressing
01:31:07
to voicemail he would send me text messages ignore and then i
01:31:12
i mean this is always happens this way i did it once and that caught me she's like why did you ignore his phone call
01:31:17
and i said i hate phil i'm done with hellmuth i told her the story she got so
01:31:22
[ __ ] mad at me and then i had to send this text i'll just read you the text because i think it's just so [ __ ]
01:31:28
hilarious i was going to ignore you for the rest of my life based on your tantrum with me earlier this year but
01:31:35
nat has convinced me to see where you are coming from in part anyways we're good call me later
01:31:41
he called me one second later he was waiting he had your deck for me to open
01:31:46
i just pictured that mia he's your friend you gotta be you're such a jerk he's
01:31:51
your friend you have no friends all your friends are going away
01:32:03
before we wrap sax is going to give us instead of doing science corner mar-a-lago corner oh tell us what it's
01:32:10
like yeah what is mar-a-lago like you've had your membership now for eighteen years never been there never been there but no
01:32:16
i wanna i wanted to um i wanted to give a shout out to this article because
01:32:21
last week i took some heat because somehow i guess you're not allowed to question anymore the rectitude of the
01:32:27
fbi the j edgar hoover's fbi we're not allowed to question anymore or a lot of people feel that way there was an
01:32:32
article that came out in real clear investigations just i think yesterday and what it exposed is pretty amazing
01:32:40
the group the unit within the fbi that conducted the raid on mar-a-lago is the
01:32:47
the same group that conducted the investigation into trump back in 2016
01:32:52
that lied to the fisa court that had its members as leaders peter strzok were
01:32:57
fired for basically wrongdoing whose members are actually under
01:33:03
investigation right now by the special counsel john durham and you've got people who are on probation right now so
01:33:09
this is the same unit that basically conducted the raid on mar-a-lago so i think there's still more to come out about this but it's just
01:33:16
amazing to me actually that christopher wray the head of the fbi and merrick garland the head of the doj thought that
01:33:22
this wouldn't create the appearance of a conflict of interest or impropriety the
01:33:27
fact that you've got the same unit that previously was disciplined for wrongdoing
01:33:33
in an investigation of trump can is the one conducting the raid on mar-a-lago so pretty amazing
01:33:38
cacao retort i'm sorry what we're talking about um no i i'll i'll tell you it's so
01:33:44
brutal no i i just want to make sure i have a couple of child actors oh look at these
01:33:50
problems they're on camera look at these props amazing good work nice props
01:33:55
and that's what you're seeing there hold on sex before you get back to trump what you're seeing there is a family unit
01:34:01
this is when a family gets together and expresses love towards each other but continue about mar-a-lago that's wonderful that's wonderful that's
01:34:07
wonderful you could take a picture of this and you could send it to your friends on christmas all right jason you you are um
01:34:14
you do not accept the real clear investigation report that maybe there is some long-term i i'll um
01:34:21
here i have actually some feedback it's nothing to do with saks i just think a lot of times i get positioned as
01:34:28
sometimes when i'm moderating i like to challenge sex last week i chose to stay out of it i let him go and i think one
01:34:33
of the reasons people didn't like your comments last week saks was other than you know j.r hoover being
01:34:40
dead for 50 years putting that aside and it being irrelevant i think the reason people didn't like it was because i
01:34:45
didn't come back at you and question some of the things you were saying and so i think they felt it was an unbalanced discussion they expect me to
01:34:52
do that but i don't want to be pinned as the adversary to sax's positions in every case because i'm an independent
01:34:58
i'm a moderate i've voted for probably i voted uh democrat my whole life i voted for both of those parties
01:35:04
but i do think that what's happening here is
01:35:09
you know trump is under five different investigations he's got a career of doing disgraceful criminal fraudulent things
01:35:15
and i feel very bad for gop friends i feel bad for republicans because they have to carry water for him and it's
01:35:22
they put themselves in this really difficult position of defending him and you know we've talked on this podcast
01:35:28
about january 6th we talked about voter fraud my good friend one of my besties david
01:35:33
sacks has said he doesn't believe that the election was there was election fraud and he doesn't he thought january 6 was disgusting i'm not speaking for
01:35:40
you that's what you said and so i think you know the fact that the republicans feel the need to defend him constantly
01:35:47
is one of the big problems here and i think on the other side the fact that the media is forcing republicans to
01:35:53
defend him and creating this narrative and this hysterics like oh my god csb espionage act he's doing espionage this
01:35:59
might be very simple trump lied cheated stole his whole career from trump university to what's
01:36:05
happening with you know the trump corporation now with the cfo and his non-profit this is his life is a
01:36:13
history of griffs and crimes and unethical behavior what the gop needs to
01:36:18
do is stop defending him and just let him go off into the sunset as sacks pointed out last week and that's what
01:36:24
this podcast needs to do because there's no reason for me to sit here and do the left-wing talking points or for you know
01:36:30
sacks to do the right-wing talking points the fact is first principles trump's a grifter
01:36:35
he's a democrat the gop that's it my point is not to defend every shady deal that
01:36:41
trump's ever done or even to defend trump at all my interest is having a doj
01:36:46
and fbi that's not politicized it is not used as a political weapon or to pursue political targeting or vendettas and the
01:36:54
reality is at some point we're going to move past trump as a country but the precedents that are created now are
01:36:59
going to stick with us for a long time and the reality is we should not have an fbi and a unit within the fbi that is
01:37:06
pursuing these political vendettas and in this article by real clear politics the amazing thing yeah the amazing thing
01:37:13
is christopher wray prohibited this unit from seeking warrants from the fisa
01:37:19
court so he knew there was enough misbehavior last time to basically prohibit them but
01:37:24
it seems to me that's a very narrow takeaway it seems to me that the takeaway should be we don't allow this unit to pursue trump again because they
01:37:31
committed so much wrongdoing yeah it'll be cleaner to have a clean unit right why wouldn't they do that yeah so let's
01:37:36
see if that's if it's true because that is from a biased source and if it is true i mean real clear policy is kind of like
01:37:42
a politico look guys this has been a lot of fun jkl thank you for letting me sit in your seat today yeah you did great
01:37:48
awesome i appreciate that it was it was a lot of fun maybe saks would like to have a run in the seat at some point here he doesn't
01:37:54
want to but uh for your as your guest uh moderator for uh today i'm dave friedberg and this is your all-in-pot
01:38:01
thank you bye-bye we'll let your winners ride
01:38:07
rain man david and it said we open source it to the
01:38:13
fans and they've just gone crazy with it [Music]
01:38:24
besties [Music]
01:38:48
we need to get [Music]
01:38:57
i'm back in
