E35: Biogen's controversial Alzheimer's drug approval, the billionaire space race, Bitcoin & more

like jacob can you get any closer to the camera i mean your face is like right up in there we can see your bloodshot eyes oh god it's really um 9am start times a little rough by jake out a little rough by jake out that's true i want my second cup of coffee already this is this is a lifestyle choice we may regret we'll let your winners ride rain man [Music] david source [Music] hey everybody hey everybody welcome to another episode of the all in podcast it's saturday morning it's ridiculously early but we're taping the show because one of the besties happens to

have left the continent with us from an undisclosed location chamath polyhapatia are you in a wine cellar or in catacombs i am in i am and look at it wait for it wait for it wow were you able to see that or no no what was that are you in are you in the cathedral somewhere you mean the ceiling of your it's room you paid for the four walls and now you can afford the roof okay hold on hold on okay hold on i'll do a little i'll do a little uh let's see if you can just see outside and get a sense of the view oh you can't oh no we can't just oh whoa bestie lifestyle happening there

just got to hold it for a second and then there well no that's my architect hold on look at this wow i love how i love how the house is already built and he's still paying the architect yeah he's like do me a favor this came out great but you rip down these four rooms and then just start over all right well we lost uh bestie c as he walks around his castle in some european country welcome to the lifestyles of the rich and famous what time is it there for you well it's uh six in the afternoon six in the evening i was in london last week and holy mackerel

the weather if you want to see climate change spend some time in europe because literally day over day uh london on the first day i landed was call it 24 degrees celsius so whatever that is 80 78 maybe beautiful literally the next day it was 62 and raining and it just kept bouncing back and forth it is the weirdest thing and if you're in europe right now you you just see some of the craziest weather patterns literally day over day massive thundershowers then you know it's completely normal i mean no wonder everybody here takes climate change so seriously you actually

feel it every day and with us as well uh david sacks is here the rain man himself tearing up the twitter we've been off for two weeks so there's a lot to cover and of course the queen of quinoa chairman of the production board david friedberg right off the bat i think we got to go science and get the freedberg ratio up from the get biogen has an alzheimer's drug that on monday the fda approved it's the first new treatment for alzheimer's in almost two decades and biogen's drug is not a cure for alzheimer's and freeberg will get into that it does not reverse the disease's progression

but it does mitigate it gets it getting worse very strange moment in time the fda's advisory panel three members of it have quit because they didn't want to approve this drug because it had such a modest efficacy three quit but unanimous vote against approval right so unanimous vote against then three quit and this is i think out of 10 or 11 individuals um so this is truly significant the drug is going to cost 55 000 it still requires brain scans and all this kind of stuff but it's hope for people suffering uh and so the fda approved it um friedberg tell us on a science basis

what we're seeing here is what's happening in journalism and social media now happening in science or is this some other you know search for truth uh or some other issue the biogen drug that was approved this week is called adjukanymab remember any drug that ends with mab mab means monoclonal antibody so it's an antibody and antibodies you know as we've talked about in the past are proteins that can be made by our immune system and proteins that bind to a specific target that then tells your immune system to clear that target out of your body so that's what monoclonal antibodies do

and we have been using biological drugs monoclonal antibody drugs for decades now to target specific cells or specific proteins in our body that we can then remove from our body and that can reverse or change you know human health in very significant ways so this is a you know a class of drugs that is very efficacious for having specific outcomes across many disease states and so years ago researchers at the university of zurich were looking at people with alzheimer's that were having slowly progressive dementia and they looked at antibodies that they could find in their brain and they found this antibody that they

saw was binding to amyloid plaque and amyloid plaque is one of the theorized mechanisms by which alzheimer's progresses that as amyloid plaque builds up in your brain you know you start to have dysfunction and inflammation and the amyloid plaque kind of may be the driver of alzheimer's but that is not proven so they then you know ultimately gave it to a company called neuromune who licensed it the biogen and biogen started testing it and they took this antibody um that they discovered and they turned it into a a you know an antibody you can now get injected

into your body goes into your brain it by the idea is it binds to amyloid plaque and removes it from your brain and so theoretically this should slow down or stop alzheimer's but it turns out that as they ran this test across thousands of patients it didn't have as much of an effect and in fact the data across many many patients showed that it didn't really off of a placebo baseline meaning people that didn't get the drug versus people that did get the drug that it wasn't really that different in terms of cognitive scores and tests and all this other stuff so they abandoned it a few years ago

they kind of got this they stopped the trial they had this kind of negative outcome and you know biogen got beat up for it and then all of a sudden they refiled about nine months later with the fda saying well look when we look at the patients with the highest dosage of the drug because they gave it in three different doses so the people that got the most antibodies this particular group of people had a 23 decline in the progression of their alzheimer's which is kind of one way of slicing the data and and as a result they went back to the fda and people were like well you know some

of the tests don't really show that still there was some cognitive test results that didn't show that that was the case and they fought back against and so some people were pushing back against it and we're not sure no one knows for sure how it all kind of came together at the end but the fda ultimately approved this drug and here's what's challenging about this you basically will go in you'll get an injection of this this antibody just like you do with many other antibody based therapies it costs roughly five dollars to make

antibody therapy just to be clear so when you make them five bucks roughly is the cost and they're charging fifty six thousand dollars for this treatment so that's problem one in the pharmaceutical kind of debate is should we be charging the you know the quality of life premium and then number two yeah and then part uh you know the kind of second issue is like should this thing have been approved when it wasn't really that efficacious and you could slice the data slightly and now all payers you know meaning all people who are insured or the government or whoever it is that's responsible for insurance payments

is ultimately bearing the cost of everyone with alzheimer's and there's 15 million people in the united states of alzheimer's they're going to raise their hand and say oh my god anything that gives me any chance or any hope i want to get but if it costs 56 000 is it really the responsibility of the insurance company and all the payers to give everyone a hope even if the drug may not work now the downside in the side effects is negligible there's no risk to taking this drug so it's all about the cost and the upside and that that that is the big philosophical debate right now is like first of all should we approve drugs

like this should we allow pharma companies to charge whatever they want even when the efficacy is very low and the cost is very low to make this stuff and how do we ultimately decide what so this is a classic risk reward chamoth how do you look at this on a financial basis yeah let me let me let me give you sort of like a a market investing kind of view on this um look i've been taking biotech pretty seriously over the last 18 months just trying to learn because i think basically freeberg ins you know incepted me with uh this idea that you you have to know it

um so here's what's interesting in the setup for what i've learned and putting a little bit of my knowledge together which is dangerous but the setup for alzheimer's is really scary if you're black you're 20 more likely to get it if you look at the distribution of all patients 60 and upwards of you know 64 65 are women so if you think about the distribution of this disease it's it's the disease of minorities and it's the disease of women now that's problematic in and of itself because if you want to have any form of equality it seems like this is something

that we have to tackle the second interesting thing as a as a setup to this is every single alzheimer's drug that's ever gone through the fda has been rejected and has failed and what's interesting and the the the more social science around this is this was also where two of the more infamous insider trading events ever happened was around failed alzheimer's drug um the first which is less known but inside baseball is what happened at sac which was a huge hedge fund but the second that's very well known as martha stewart and why she went to jail was around the

speculation in the insider trading of the phase three results of an alzheimer's drug which ultimately turned out to fail it was almost the surest money on wall street which is every time some one of these drugs came to market you just bet against it and it would turn out that these stocks would collapse so there's the social and market setup i am super torn but i think there are some positive points to make on this thing so but let me give you the negative case the negative cases what is the fda doing approving a drug where there's no clear evidence that it leads to clinical benefits and

it could give families a sense of false hope what are you doing in terms of process if you have a unanimous vote against approval so why do you even bother having an fda advisory committee of outside experts if they're just going to do what you want and it could set a precedent where companies can get drugs approved on limited evidence now here's the positive point which is they may be taking a long-term view and what they could be really doing is creating a market that ultimately incentivizes other folks to come in where then ultimately those people are

the ones that find the solution right because this biogen drug biogen came out and basically said we think this is a 100 billion dollar market so now all of a sudden you must believe capitalism is going to take hold and a lot of young startups will say well i should be going after this market as well and so by going after that after biogen then maybe you actually do get to the solution and just a kind of a little bit of trivia it turns out that the acting fda commissioner in 2016 this woman janet woodcock she was the one that approved a different form of

drug in the exact same setup that one was eta leprosine which is basically for duchene muscular dystrophy he had a negative panel vote she basically said no we're going with this the scientific community reacted similarly back then but she basically took the view that you know you're doing no harm exactly what you said free bro because the safety says it's fine you're doing no harm to the patients by approving this drug and maybe it might turn out to work in the end and in that specific case for duchenne muscular dystrophy what we see four years later is that now there are a lot more companies focused

on finding a solution and they're pouring a ton of money into r d and maybe one of those things will break through so i think she could just be running the same playbook here in alzheimer's which is important enough that somebody needs to do something you're saying the economic incentive could drive further innovation in the space that ultimately could benefit patients more truly than this current drug i think so and i think like you know what look a lot of like i think drugs that that are potential solutions in many ways i think what the fda is doing are two things which i think are

really positive the first is that they're accelerating their approval timelines right so you can have breakthrough approval and innovations and so you can get to market much much faster the best example is what we've seen in these vaccines but the second thing is if you have a well-structured safety study that says that these things are not harmful to humans then yeah david it's it's basically saying sell a 56 000 drug there's a 10 000 copay now we should talk about that because that shows how broken medicare plan b is uh part b sorry um but yeah they're

creating a hundred billion dollar market out of nothing yeah but should should that be the case chamoth or should it be regulated because ultimately if the regulators are approving the drug and enabling the commercial opportunity shouldn't the regulators also say you know what you can have this commercial opportunity but you can only charge x because we're not going to have the taxpayer pay the y uh or package hey freeberg let me ask a really basic question here why is there no you know document put out by the fda saying here's how we came to this decision in plain english or is there because i

looked for that couldn't find it in other words you know the same way there was a vote they could say hey listen we understand the vote we're overruling it for this reason and why isn't there an interim step the fda is not the fda is not your doctor right so i think the way things are set up is your doctor is meant to be informed about the panel's review of drugs and they and there are labels that doctors need to be able to read and understand and then the doctor's job is to make a decision on treatment for their patients and make a recommendation to their

patients so ultimately the fda is not a consumer organization the labels that get approved what the pharmaceutical companies have to say about their drug all of that stuff is overseen by the regulators of the fda and then that is then used by the doctors to make treatment decisions and and they couldn't kick this back and say listen no jason but couldn't they kick it back and say we want you to do one more trial or some bridge step here hey you can do 10 000 people over the next three years they do that and by the way and they are going to do continuing studies on ad you can map as it goes into market they always do that and they

always ask for more data and they do this continuous review the fda is a really strong body and a really strong regulatory body and we should all feel kind of pretty well you know safe and secure but the issue is really i think the economic question on the other end which is they could approve a hundred drugs tomorrow and then what happens to the economics of health care if everyone's allowed to charge any price they want for any care if it has even the slightest range of efficacy we're not going to be able to afford anything you know so just so this is where like you know regulatory bodies run

run into each other because the effort so alzheimer's alzheimer's is a drug of the old right health care expenses are covered by medicare and in medicare there's a section called medicare part b which effectively is a way for these drugs to go to market just so you guys know under a medicare part b plan a physician gets a six percent kickback of the price of the drug your doctor gets six percent of that fifty seven thousand dollars that's a terrible incentive it's a it's an incredibly bad incentive and so three thousand dollars every time you put somebody on this it's quite a spiff it is and so and so

you know medicare part b has been this mechanism that people have wanted to undo for a long time now if you're sitting in the fda you can't change that because that's covered by cms yeah that's not your that's not your jurisdiction i think it's like this weird inter governmental agency warfare push and pull and trying to move the incentives this all goes back to if congress can't act then all these folks have all of these other random tools they just have to throw the spaghetti against the wall and this is the kind of stuff that

happens because congress should actually be fixing this in a more substantive holistic way and until they do it this is what's going to happen this is no different than what we saw during the pandemic where we had health regulators coming in local health regulators public health officials saying everything's shut down because their incentive is to save lives their incentive is not to balance the trade-off between saving lives and protecting the people versus the economic damage and the fallout and the cost of it and there are two different agencies and ultimately the synthesis of these decisions isn't being managed

by a leader anywhere or by a leading organization anywhere and that's where things inflate and get ugly and get nasty over time okay uh saks as a free as a free market monster what do you think saks how would you approach releasing these drugs as a no but you're for less regulation when you see this regulatory mess of spaghetti and you know costs and and price gouging you know if we take the most cynical look at it because 15 million people times 55 000 a year i'm no genius at math i but i my sats tell me enough that that's going to be this drug's going to make what 10

billion a year 20 billion a year something in that range if they just get a fraction of those people so i mean i i agree with friberg and schmoth that we shouldn't give doctors an incentive to choose one treatment or another right i mean that just seems totally warped but going to the sort of larger issue of fda approval um i would make it a little bit easier to to get drugs approved i mean look i i think that you know double blind test is the gold standard if the drug clearly doesn't work you don't approve it but this is a case where the evidence is a little bit inconclusive and in a situation like

that where it's a drug that might help people who are facing a deadly disease and you know alzheimer's is one of the worst it's not only you know event the prognosis is terminal but it also is deteriorative and it's devastating for patients and their families these people have nothing to lose and so i would let the drug through i think and then watch how it performs over the next couple of years they could always revoke the approval in two years you know in other words almost consider the usage of the drug over the next couple years as a stage four trial you know the the one group who's not

complaining about this are patients i mean alzheimer's patients want the ability to test this and generally speaking i think we should give people who are facing again a terminal prognosis the ability to try these drugs yeah and free bro correct me if i'm wrong the reason or maybe chemotherapy you're better for this but just looking at the economics of this taking care of somebody with alzheimer's and if you it starts to hit people at 65 and people start living to 78 85 years old they need to have care a person with alzheimer's the issue is not their ongoing maintenance in terms of their brain it's their day-to-day life

they cannot be left alone so they have to be either institutionalized or have home care and then you're talking about a hundred thousand a year and i think medicare and some other people pay for that so 55k if the person can take care of themselves that's how price is done that's exactly right is that how they do it so pricing is typically done based on the long-term cost benefit of their of the drug of the the to the to the paying system so you know they'll take a look at like hey here's how much we're going to

benefit people or benefit the paying system therefore we can charge x dollars for getting this drug that's why today you can go get a um a car t therapy or something you know some sort of therapy that that is going to be highly efficacious and they'll charge you a million dollars or genetic um there there's a few that are getting approved now uh for genetic diseases and that you know million dollar one-time fee because you get you get the treatment once it costs you know technically nothing the cogs are zero to make this stuff you get that treatment they charge you a

million dollars because the long-term care of the progression of that disease is so high that they can economically rationalize that um and so is that ethical or moral on the pricing clarify one thing so we're talking about it at 56 6 000 a year that is true but it's basically 4 800 per shot you get a shot once per month and that costs 4 800 and so you multiply that by 12 and you get to the 56 000 number now it's 4 800 to get this monthly shot an outrageous amount of money for what could be a breakthrough alzheimer's treatment i don't necessarily think so i mean that

is the sticker price that's not what the patient is going to pay right the patient's going to pay the ten thousand dollar copay but divide that by 12 you're going to pay about 850 per month for what could be a breakthrough treatment i mean to me the real issue is whether it works and since it's since there are some positive indications but it's inconclusive inclusive i would say tie goes to the runner here meaning you can try it and let's revisit it in two years and see if it works but but it wasn't a tie as far as scientists were concerned so what is the disconnect there chamath

because i think what they were looking for no but they were looking for a causal link and the problem is at some point along the way over the last few years we started with the hypothesis that amyloid plaque was causal of alzheimer's and then we moved to a place where there was some correlation and then we moved to a place where we said actually it may not do much of anything but i actually agree with saks i think the fda did something really novel here which is that they applied an extremely aggressive free market approach to a market that has been completely bereft of solutions and so if you can create a hundred

billion dollar market overnight i think it stands to reason that a lot of people will look at the increase in biogen's market cap and the profits that biogen can make over the next 10 or 15 years and say i will attack that and do that cheaper faster better it happens in every other market i think the point here is that it probably shouldn't have been the fda's role to create competition but for whatever reason whether it's how the capital markets and biotechnology are structured or the way that you know medicare part b kind of works and creates these odd incentives we are where we are and so i tend to

think that it's probably better that this drug was approved i also agree with saks that in general i think as long as you have a reasonably defensible safety study we should probably be in the business of getting more drugs approved faster and the reason is that it allows smart clever hardworking people to connect the dots in ways that right now we don't know anything about like just like you know a random factoid to prove this point like when you look inside for example of who wins a nobel prize right particularly in the fields of biology and chemistry etc

you have people that are in their 60s and 70s that win awards for research done in their 20s and 30s so clearly people at some point when they are somewhat less jaded you know and somewhat more naive maybe have the ability to really transform the world for all of us and if you can marry that to economic incentives so folks that understand the markets can also be along for that ride that in my mind i think is generally better than a nanny state of babysitters i agree with that point i i think i think let me frame this to you in a question for you of those scientists on that board who voted against this if their parent or spouse god forbid

we're suffering from alzheimer's how many of them would take the drug out of this this is my point is and and it's a point i was going to make which is everyone wants that lottery ticket there's no downside and only upside because you're not paying for the lottery ticket and so the way the system works in terms of paying right now as a patient and as a doctor i have no incentive to manage cost down right all i have is opportunity in front of me and so as we add more opportunities we give everyone the ability to have a lottery ticket that potentially could cure their disease or

or you know make them kind of live forever have a healthier state of being uh you know we are going to see this proliferation of approvals that end up costing all of us so much that the inflation that we've already experienced in terms of paying costs for health care continues to climb so the challenge is like you know if we are going to continue to operate a socialized model of medicine or even partially socialized where the government's paying some amount of of the uh of the premium or employers are paying part of the premium where the individual that's getting the treatment doesn't bear the cost

you're going to end up seeing everything in flight because you're creating this incentive now companies are going to rush in they're going to try and get 10 things approved everyone's going to be taking an alzheimer's drug in a couple of years because there's going to be so many available on the market and none of them may actually be curing alzheimer's maybe 10 of people get cured 90 don't but the cost is going to be millions of dollars you know per person for these treatments and everyone pays that i'm not saying that's necessarily a bad thing you know we need to have a proliferation of innovation certainly

the challenge is in the interim period the inflation we've already experienced in healthcare which is just extraordinary will continue to climb if you know we don't regulate the actual market for pricing on these things and on the other side we pay all the bills or there's some socialized pool to pay all the bills you can't have it both ways i'll give you the other side of the argument as well which um is the reason why this could be so valuable again if you look back to what jane lockwood did um was it muscular muscular disorder yeah in duchesne muscular dystrophy you know for janet janet woodcock sorry part of me jenna woodcock

um but if you if you know anybody whose child has duchene muscular dystrophy my gosh what an incredibly debilitating disease you would not want anybody in the world to have it and again by approving that drug what she did i think is something pretty incredible because now there are of the the number of companies that have again come after that market opportunity because she helped define a market four of them are already public just to give you a sense of it and they're you know and so the odds at least numerically are greater today than they were four years ago and that was a you know potentially

non-efficacious drug that that frankly though had a had a legitimate safety study to your guests chamath and friedberg 10 out of 10 of those people on the fda board would have a spouse or a loved one take it because there's no downside if you look at biogen's market cap just to wrap up here uh they added 20 billion dollars in market cap in the five days since you know this announcement happened so in terms of incentives you got to think every other drug company is saying hey i've got something that kind of sort of works and it's really expensive can i get a free ticket now can i do

this compassion hopefully it's just the former thing kind of sort of works and then you know yeah from there all right moving on to our uh next topic bezos has decided that he will be the first billionaire in space uh three people are going to be going to space in quotes on an 11-minute flight on july 20th 2021 uh jeff bezos in a promotional video on his instagram uh sprung this on his best friend his bestie his brother mark who agreed to go with him and there's bidding of three million dollars i guess to it's up to 4.8 oh my god 4.8 now on blue origin site uh and just doing back of the envelope math

which i which i did uh uh last week when i heard this announcement 600 people or so have gone to space some of them have gone multiple times blue origin's done 20 some odd flights two of which went south and probably would have resulted in death so i think five to ten percent of blue origin's fight flights would have killed uh uh sadly they joseph had been on them but obviously they've made progress since then two of the 120 plus flights that spacex have done but none in the last six years um have had an accident uh and obviously uh virgin galactic had one tragic accident as well

so is this a wise idea and where would we put the percentage risk of ruin slash fatality i just i just wanna i just wanna do statistics for a second jason sure yeah just because there were blue origin accidents in the past doesn't necessarily mean that it has any bearing in predicting the future likelihood of there being an accident because the data from the past is from different machines and different techniques and different processes so i don't think you know to your tweet and the controversy with your tweet and you know your point now i don't think you can necessarily look at the past

this is much more of a kind of deterministic conversation about like hey look here are the things we have done with our systems and here's why we have a high confidence in this thing you know kind of working which is obviously why people don't go on the first 50 rockets or first 20 rockets whatever it happens to be but statistically it's it's non-zero so i guess the question is is this a wise move and where would you actually put the odds at but it could it could very well be zero now could yeah you don't know right we don't know how well their safety systems have been developed i mean we don't know how

you know the i don't know anything about this but i'm pretty sure that if bezos is go he's a pretty smart guy he's not going in anything that's going to have some high some some even nominal likelihood of death right like and he knows probabilities and he's been there in the last 15 test flights and he's seen the data and he's probably seen a string of nominal flights and at some point you just feel like you know okay this is this is really dialed in here my prediction is bezos is going to come back and he's going to announce that he's going to be the ceo of blue origin i think this is what he's going all in

on blue i think this is what he wants to do with the rest of his life i think it's been pretty clear that this is such a passion for him and like you know he's he's got the world's greatest money machine ever it's a flywheel it'll run as a monopoly for decades he can do whatever he wants to do now and so when he takes a look at this what's greater after you've conquered earth than leaving earth and moving on so to me this seems to be so intellectually interesting to him and um and so kind of existentially interesting my guess is he goes in full time on blue origin now that he's kind of transitioned to the chairman role and he's kind of been pretty public about it

100 100 david are you conservative and typically very scared of anything dangerous go ahead well i'll give bezos credit for dog food in his own product but um to me i would take a contrarian view overall um you know i think sometimes people get so rich and so powerful that there's nobody around them to tell them when they have a bad idea and quite frankly i think this is a brain fart that the people around him are telling him smells like perfume and they should be telling him dude what are you thinking you know if if jakow said to me he was going up on a rocket i'd be like

dude you got at least 30 good years here you know bezos don't screw up the podcast yeah we need the hosts we need you down here what are you thinking bezos has got like 170 billion after the divorce he's you know still a young guy and he's gonna risk it to go up in space for like three minutes um i mean now yeah they've this is the they have sent the crash test dummy up there successfully 15 times but this is the first manned flight the first flight with humans on it he's determined to be on it if i were his advisor i would say put a gopro on the head of the crash test

dummy and experience it in virtual reality exactly what are you thinking yeah i mean if this was a stunt that you know um uh richard branson did early in his career remember he did the ballooning things and he was trying to become a billionaire and trying to get excitement around his brand but i think this is totally unnecessary and it is not a the the risk of rooney is not zero it might be close to zero but it's definitely not zero i mean well now branson's trying to beat bezos into space so he's announced he's gonna go up two and you know so these guys are both um being dirty is

he going up on the um uh galactic uh chamoth what's he do how's he going up this space is that a virgin galactic flight i don't know if it wasn't public is it you're saying sorry did you say it was a public thing no i said it virgin galactic is a public company of which i'm chairman of said board of directors i'm not saying anything about anything branson is is trying to beat bezos into space by going up before him there is now a space race going on and you have to wonder and then meanwhile elon i i wonder how much of this is because of bezos's pride because elon tweeted

that bezos couldn't get it up because his rocket bezos rocket is only going to actual space yeah it goes to like suborbital like low earth orbit you know space he gets it halfway up i think he's somewhere in the 50 to 70 range i think how much if he had a little blue pill blue origin if he got the little blue origin pill he might get to 100 how great is this space race by the way this is so freaking cool right i mean like the government is pretty amazing i mean the government creates all these great contract

incentives this is a this is a good role for government right they come in they create all these contract incentives spacex has been making all this money from the us government and then they take that money and they invest in creating the space race this industry that you know could absolutely transform humanity for the centuries to come uh it really speaks to kind of like how semiconductors and computing came out of the space race of the mid 20th century and we could see this kind of like next industrial age arise for the space industrial age uh because of these incentives that have been created

by the government it seems to me like there's a good role here the government's played and this is super super cool isn't this in stark contrast to the government doing the space shuttle program which if you look at the fatalities there have been about 30 fatalities and going to space 14 of which were on the two shuttles one that tragically blew up on the way up and one that disintegrated on the way down in our childhoods in the 80s i believe um it was also incredibly expensive look this is privatization for the win right instead of having the government

doing all the r d and the government is good at some things but r d is not one of them so you you let the private sector do the r d and then nasa's contracting with these private sector companies the government is a phenomenal balance sheet yes how do you feel about the government funding this work right because they're not doing the work but it's the taxpayers money that's going to spacex and others for contract services that ultimately fuels this innovation engine do you feel like this is a good role for government spending is to kind of well the question the question for government

as a policy matter is whether we want to go to space and then the question is how do we get there i definitely believe that if we believe it's important to have a space station to get to space to kind of advance the frontiers of you know humankind yeah then then then it's it's a worthy program to fund and then the question is well how do you get there and i think you know funding spacex and these or it's not funding it's contracts with spacex to deliver the product is a much better idea than having the government trying to develop it itself right yeah because those are milestone

based with some level of competition even if people might complain about the bidding process et cetera the contract is for a duration of time and for deliverables if the deliverables are not bad or the contract expires then we start the whole process over again and this correct me if i'm wrong is a must do for us because we cannot let the communist and authoritarians own space we have no choice being the democratic west of owning space and getting there before them and dominating space nobody can own space but i think the united states is an incredible balance sheet nobody can own space i mean are you kidding me what if

somebody gets up there who decides to put nuclear missiles up there and decides anybody else who puts satellites up there we're gonna just nuke them and laser them you're not gonna own it you don't even need a nuke quite frankly you could drop a tungsten rod from space okay just a like a giant steel rod and by the time it hits the ground it's going so fast that it basically can blow up or assassinate anybody what the hell are the two of you i mean have the two of you become no this is real like the two of you are like that like be arthur and the golden girls jesus christ the guys in the muppets arthur here blathering on the

the south military applications have you not seen the chinese putting rockets over taiwan and military exercises these people are not chasing playing games jason i understand nobody no all i'm saying is there's no owning it okay it's too vast it's effectively infinite you can't own it okay you can have certain areas you can be dominated you can't yeah of course you can dominate space they go up there and they don't play by the rules i mean did you guys not see what happened with hitler in europe he dominated europe number of years jason listen of all parts of space that you can

dominate maybe the one planet is uranus other than that there's nothing you guys are so naive about the intentions of russia and china it is phenomenal they have 100 year plans to dominate humanity and they are willing to put millions of people into concentration camps they have no problem going to space and deciding we're going to own the satellites and we're going to knock other satellites i can't believe you were so anti-trump and and and it's just you're saying it's unbelievable you're so funny can i just say one thing i think i think back to

what we said before the u.s is an incredible balance sheet and what free brook said is so true which is like coming out of the apollo program we really created so much technological innovation it propelled the u.s forward we unfortunately gave a lot of it up but hopefully this time around we can do it again and by the way just last week i guess it was or i guess it was last week um or a month ago you know where we got that chips act in play which is a quarter trillion dollars you know for semiconductors and other things um so we're slowly getting there but

this is where the u.s can do a lot of good which is just to act as a funding source and then let private markets kind of take over the rest by the way we've talked about this on the past couple of podcasts but there is i think 90 billion dollars earmarked in this new bill for enabling american manufacturing progress and so it will be through a similar sort of funding mechanism it looks like as what we're seeing here it could be a fantastic boon for innovation and um and infrastructure yeah what other categories should we model this after sax should we do this for nuclear should we do it for

education for housing before we move on i mean look jake i want to come to your defense on this point because i think it's it's um because i think it's just wrong to say that there aren't like vast and important military applications of space the fact of the matter is you look at the history of warfare it's critical to have the high ground whoever has the high ground ultimately wins the war this is why the first thing we do oh the greeks the greeks had the highest let me finish the point the first thing we do in a in a war or a conflict is establish

total air superiority it's the reason why our infantry doesn't take massive losses um it's you know we want to establish you know artillery um that that sort of protects the infantry look the future artillery is going to be from space it is the ultimate high ground uh it is i agree with jcal it's naive to think that the other side that other powers are not pursuing military applications we have to have the ability to defend ourselves against space-based attacks and to have those those abilities ourselves those capabilities and so that is part of what's factoring in here with the space

i get it i get it i know what you guys want a you want giant giant laser in space i don't i don't think it has to be a laser i think it can be low-tech you know just if you just literally shot ball bearings at other satellites it would rip through them right i mean the tungsten rock program is an actual program right zach yeah yeah it's a funded military program oh my god by the time you if you drop something from space it hits the ground at like mach 35 phil hellmuth has invaded our podcast and taken the body of david no but in all seriousness this um program that we're seeing great success with

inspiring the greatest you know entrepreneurs of our time to go after big prizes like this could we not do this with nuclear energy housing and education or are is that kind of out of the question let me just point out by the way the things you just pointed out are the things that are now most regulated and it's the regulatory burden which ultimately stifles innovation whereas in this case we're enabling innovation without putting a lot of regulatory burden on space at this stage right and so as soon as itar which is one of these

regulatory bodies starts to step in and maybe we start to limit things that can be done in space and so on and so forth you may see things kind of get damaged like nuclear energy got damaged because the fear of the downside ends up um you know kind of counterbalancing the opportunity of the upside and it's something we've seen time and time again with every innovation cycle in every industry and you know you're right right now we're in this opportunistic moment in the space race but as soon as kind of the regulatory burden becomes heavy you're gonna see the same thing that happened with housing the same thing that happened

nuclear energy and all the other kind of innovation cycles that that kind of got stifled uh not just in the us but globally yeah so we don't think for nuclear we'll see this happening anytime soon man that would be an incredible uh nobody nobody wants nuclear if there's a huge nimby problem with nuclear right which is who really wants a nuclear power plant in their backyard i mean not gonna happen i don't think it's realistic it's it's one of these ideas that you know sounds great in theory but then in practice no one's willing to raise their hand and say i want that really easy solution for

that why don't you just make anybody who has to live within x zone of a nuclear power plant have a tax credit of a million dollars a year they still don't want it look i think the future of alternative energy is solar um it's it's an inexhaustible supply the cost of solar panels keeps going down exponentially the cost curve is going down exponentially and look ultimately all life on this planet is solar powered right because fossil fuels come from the remains of dead dinosaurs who were ate plants and plants are solar powered so ultimately the sun is the ultimate source of energy not wind not nuclear

not windmills well geothermal it's going to be solar geothermal capacity is still like 100 billion years based on our current um consumption rate but uh there's limited uh research relative to the opportunity in general thermal but yeah totally agree with you sac in a microcosm of uh you know the reopening of the pandemic we've been at record low case loads um and debts are so low now from covet 19 in the low hundreds that it's probably hard to know freedberg you tell me if i'm wrong or right if people are of those three or four hundred people dying a day that's with covid from covet et cetera

um but anybody i think it's intellectually correct to say that anybody who over the age of 12 who wants a vaccine can get it and anybody who's in a high-risk group certainly now has had over six months to to get a vaccine so we're basically done and now the question becomes what happens to society are we gonna go back to work uh apple employees uh wrote a letter um about apple's uh demand i'm using air quotes here that people come back to work three days a week amazon just adjusted their return to work policy uh backing off their claim of uh in march that they're going to return to an

office-centric uh culture they announced that employees can do two days remote three days in the office that seems to be the three for two um google has a similar policy they're expecting people to return to the office three days a week in september twitter said you can work from home forever because jack is an introvert and doesn't want to come back to work i guess uh facebook employees either need approval to continue work from home full-time or they will need to be back in the office 50 of the time but zuckerberg personally uh said that he is embracing remote work here's the quote i found that working remotely has given

me more space for long-term thinking and helped me spend more time with my family which has made me happier and more productive at work which i guess is either devastating for real estate or this is a great negotiation that's going on you had some choice quotes about apple employees doing three um uh letters uh petitions in three weeks yeah yeah so look i i i don't have a problem with the work from home policy my my problem is with the fact that the apple employees keep doing what they do which is sign these petitions and of course the it's all the snowflake language around we're not being listened to

we're not being heard you know and then they want to dictate to management uh the way that the company should work and so they circulate petitions to get other employees fired they circulated petitions to make tim cook take his stance against israel now they're circulating petition on work from home and of course that is what apple employees do and apple management is doing what it seems to do which is cave to these petitions every time and so they're in an infinite loop where the employees have realized they can run the company by forming these these sort of boycotts and petition mobs

and it's working now again my objection is not to work from home most of my portfolio companies are now working from home or fully distributed they're hiring employees everywhere it's been very liberating for them to be able to hire talent anywhere in the world and so i think the work from home question the reason why these big companies are struggling with it i think quite frankly is this because it's about their ability to supervise their employees i think that work from home makes the best employees better but it allows the worst employees to hide and i think what this really comes down to is a fear

on the part of apple and google and facebook they've got thousands of employees who aren't really working and are going to be able to completely hide and and i think that's what this policy comes down failure of management or just the nature of workforce i think the nature of these gigantic companies where they've got so many employees that they're trying to figure out how to supervise them all and make sure they're actually doing work there's this funny tweet that's going around i don't know if it's true or not but it got retweeted about somebody saying that i've gotten six jobs during the pandemic

they're all work from home and i'm waiting to get fired from them for you know people realizing i'm not doing anything and so i think this work from home controversy ultimately is about the ability of these large companies to supervise a workforce that they don't know what they're doing if anything oh my god what a brilliant idea the big unstopped problem in the pandemic with respect to work from home is how do you onboard new people in my opinion like if you have an established company with established people where everybody knows each other it seems like uh all positive to be able to work

from home because there's trust there's decorum there's social norms there's all these things that were established together but what happens when all of a sudden you introduce one two three four five five hundred new people into the mix how do you onboard these folks how do you get and i think that's not a solved problem and until you do that i'm not sure that work from home will be as effective as it can be because i think you'll just get a lot of people that that uh languish a little bit as they switch jobs now maybe what that means is they'll switch jobs less because they'll just say

actually this is net better my crappy job got a little bit better so there's no reason to move the on your point of commercial real estate jkl i actually think it just brings the utilization down but i'm not sure it destroys it because i think people need the physical plant now maybe over time they'll get much smarter um about getting smaller spaces and having flex spaces so like things like wework do better um because then you use that for overflow space or that's how you how you actually have a primary outfit um but yeah those are my thoughts freeberg

any thoughts i think it's gonna be hard to what i'm hearing i don't know if you guys have talked to a lot of ceos but i just hear it's kind of a little bit tough right now to find the balance of the rules around when to be in work because people have meetings um in the off they'll have a meeting eighty percent of the people will show up to the meeting 20 will be remote and then it's a huge headache for everyone to be like okay we're all in the room we're all having a conversation now we got to zoom the people in that aren't here and this person decided not to show up today and it's kind of become a little

bit of a a weird photo or what what's the the right word to comment right to not come into work while everyone else is meeting in person and it's just becoming a little bit of a conflict across the organization right now um there's good it's going to be sticky for a while i'm not sure there's going to be a great um solution and it's going to vary by company also it's very different as you guys know when you know when i was single in my early 20s working at google oh here it comes oh well no it was like it was it was going to work it was like

it's cool no it was like it was cool like it was it was great to go to campus every day now that i'm married with kids you know like being with being around your kids more often you got obligations at home it's very different right your priorities change and so when you have a diversity in the workforce of people with different home lives and so on what if you're married but you don't know and you have kids but you can't remember their names david overdue sucks i mean but at that moment in time correct me if i'm wrong fredberg you know google was taking people out of stanford harvard mit whatever

and they were basically giving them another four years in college with this like college campus experience you've got a great experience it was a freaking barista made your coffees anytime you wanted coffee you walk over to a counter and there's a barista he makes you whatever you want you get all these amazing snacks and you go you go down the slide to your meeting i mean it's like when you say it was great experience do you mean that it was like fun and for the employees like it was like a fun life experience or do you mean they actually got good work experience fun life experience yeah yeah it was but

it was like useless it was useless from like a skills or like resume like for me from building your career it was useless right well the work itself was useful at least for me at least at that era at google when it was a private company i loved that work it was an incredible experience for me i made a lot of friends and and built incredible career experience working at google when it was a private company um but what about now i mean google has this reputation that there's thousands of employees not doing anything it was satirized totally by by the employees on sitting on the roof of the show silicon valley hulu yeah exactly

yeah so look i mean instead of sitting on the roof they're going to be sitting on their couch at home you know that's right i guess i guess it's an improvement but i think that's really what it comes down to what what facebook said in its statement was kind of interesting there was a a part in there where they kind of implied that work from home would be like a perk you know and that high performers would get it and then low performers would have to come into the office more and that probably is the right approach because in order to let people work from home you have to trust them

to be much more self-motivated to get their work done and quite frankly the employees who want to hide you got to make those people come into the office you can say it's like in jail where the good inmates get their own stuff totally yeah absolutely if you get time in the yard exactly it's conjugal visits if you're running a 500 to a thousand employee sas company based in silicon valley with offices around the country or whatever what would you do right now what would your your work from home policy be today well most of my companies that are in that position are going fully remote fully distributed and it is and they're going to be some

challenges to be sure but i just think it's inevitable now some of them i i do think there is a strong cultural advantage we've talked about this before chamoth has made this point around having everyone in the same office or at least having hubs so i am a fan of developing hubs you might have like an engineering hub somewhere that you know and then you've got some remote engineers you might have like a customer service hub i i do think that like call centers for example you're much better off having everybody work from the same call center uh

because that that is like a total productivity job where it's about like how many units of work can you do within a certain amount of time it's way easier to measure and manage that work when it's all happening in one place and those call centers tend to be in locations that aren't as expensive as the bay area at metro mile we have a big customer service and claim center in tempe arizona and we have gone fully remote since the pandemic and productivity per unit uh per employee has gone up uh since going distributed because it turns out that you know i'm not i'm

not going to pine too deeply on this but you know the the the throughput increases when people are kind of maybe not being distracted in the office or something so you can actually track it and that's a very measurable job right so the throughput and everything can be measured um so i would kind of make a counter point there that maybe we're seeing something different yeah i mean look you maybe you may be right about that i mean it all comes down to do you have the ability do you have systems that can manage the the sort of sprawl and if you do i mean and you can really measure the output and you can ensure the employees are

delivering results that's it's a win-win i i created a super lightweight version of this um where since slack is so dominant i just tell people you need to have a start and end to the day so you can like get on with your personal life just at the start of the day do an sod in slack in the general channel you just say two or three bullet points of what you're working on today and then at the end of the day reply to that same one with your eod just what you got done today and then inform your employees and then you don't need to be managed so if you can do that for five

minutes at the start of the day and just five minutes into the day and then on friday before you leave for the close up the week give me an eow of what you got done this week and then on saturdays like today when we're taping this i go through have a cup of coffee read all the eows and i give feedback and it has made it so clear who's a contributor in the company and who's not and when i i instituted this pre-pandemic and i had two people quit because they were like i don't want to do it and it turned out that those people were the lowest performers i think you should call it a tps report

it you know i i would you could frame it as such like micromanaging and i said you can either frame this as micromanaging or you're setting an intention of what you're going to do in your workout and then you record what you did in your workout since i started using the tonal system and since i started using hydro i'm not advertising them here but they both have measurements and i i did 6 500 pounds on the tonal and i'm like i want to break that record this weekend i want to do 7000 pounds i want to do five exercises and i went from doing three exercises

three reps to five exercises four reps and and if i want to measure it if i if i do slash apple slices into slack do i get apple slices absolutely we will bring you you can also pick milk or chocolate milk or strawberry milk what did you guys think of that's press release that salesforce sent out which said something to the effect of like they are becoming an entirely slack centric company they're going to rebuild i guess the entire architecture of sfdc around or salesforce around of course we predicted that on the show slack is going to be the re they're going to rename sales for slack no but i

don't really understand what that meant other than the actual headline of the statement i'm wondering if you guys understand what it means well i i think i understand what benioff is getting at which i saw an interview that he did recently where he talked about their quarterly results which i guess were their best ever it was like a fabulous quarter for them um what he talked about benioff is very good at connecting his products to larger societal trends and the big trend that he's kind of hooking on to is this distributed work trend and the way he described it is is you know basically this is the future

companies are trying to figure it out but they need a saddle because i guess this this is a trend that could sort of buck them off the horse and he's trying to say that slack is going to be the thing that anchors your company now for this new era of remote distributed work i think it's kind of brilliant marketing brilliant um yeah absolutely i mean there's brilliant they're there he's absolutely brilliant he has built such an incredible organization i mean the scale of salesforce over these last 20 years my gosh he is he is a star star of stars i mean in i set you guys in the slack

the or i sent you guys in the chat this uh socketsite.com which is a cool real estate site for san francisco that's been around for two decades i think um it's hilarious they calculate how much open office space by how many salesforce towers are empty in uh and it's 16 million of square feet of vacant office space now spread across uh san francisco this seems to me at the same time we're having a crazy housing crisis i don't know if you're monitoring this but it turns out that banks and hedge funds and now redfin and you know uh open door and all these

companies are buying homes homes are getting bit up at the same time mortgage uh mortgages are an all-time low and people are moving around and we're not constructing so i think we had a 60 or 70 decline in new housing uh being released into the market and now we've got a full-blown housing crisis in the country i'm going to go back uh otto the limb and put up my uh 10-year break even i think this whole inflation thing is a head fake and i think that um the right now we're in this weird position where the the home builders are not necessarily sure whether they're going to rip in the capital necessary to build a bunch

of homes the reason they would slow down is if they think that inflation is coming rates go up mortgage rates go up and then demand falls off but if it turns out to be a head fake the builders will then actually build what's necessary and they have the capital capacity to do it but i don't think that they've had the the economic justification and the courage to do it and and in fairness to them it's because the 10-year break even has gone straight up since the depths of the pandemic which is essentially again just to you know get everybody up to speed it's it's how the market thinks about

the future forward inflation rate anyways over the last three or four months or three or four weeks sorry since we talked about it it's kind of steadily started to fall off and i think there's a prevailing sentiment that you know we're gonna see some short-term spikes we saw it this past week in cpi energy went bananas right the cost of energy the cost of certain things but then we're going to get back to normal and when we get back to normal inflation will be okay and i think jason that's probably a solution because if it gets you know if that if that boogie is actually not real and um we put it away then um uh the builders will be back in

size and and they'll green light a lot of projects and i think you'll see housing supply kick back up really aggressively that'll be good for us yeah two two points there i think one it so i i hope jamath is right about the long-term inflation prognosis um it's been you know it's it's very important for investment in growth companies growth stocks and high-tech companies that the inflation the long-term interest rate remains low so i hope you're right i think that ultimately what's happening is there's a battle going on between um sort of fiscal and monetary policy

coming out of washington which is highly inflationary and then technological deflation so for the last 25 years because we've had this explosion of productivity around technology it's driven down the prices of pretty much everything that's not where the prices aren't set by the government so healthcare uh universities things like that the prices have gone up because the government's paying for it everything else the price has come down massively so we've we were kind of in this battle between sort of government inflation and technological deflation i don't know

which one's going to win um i do think that the sort of the the policies we're seeing creating a lot of government debt and uh the fed continuing on this never-ending qe are are pretty scary but in any event i hope you're right about where this ends up i think on the the other point was um was sorry we were on we're talking about the housing yeah the housing so this is a really interesting sort of populist narrative that's evolving where you've got i mean it's i think both the left and the right can agree that it's a pretty scary thing that you now have major hedge funds

buying up huge stocks of housing in the u.s driving up prices so first-time homebuyers can't buy a home i mean that is a very uh scary it's a nightmare it's a nightmare trend and i think you're seeing a reaction to it on the left that california now proposed some new policy where they want the state of california to pay for 50 percent of first-time homebuyers houses which just seems insane to me but you know and then on the on the right uh tucker just did a segment coming down attacking blackrock and these big hedge funds for for basically for for driving up the prices so i think you're going to see a

unanimity on the populist left and right in reaction to these hedge funds but the thing that no one's really talking about that they need to be talking about is the nimbyism i mean jason you mentioned it the reason why we don't have enough housing is because it's too hard to build and chamath is right that the builders could get the capital for it but it is too hard to get these projects approved that is the thing we've got to uh that that is the change we got to make to build on that i think what's happening now becomes the catalyst to break that enemyism if you all these black

rocks are buying up all the homes if young people and young families can't buy a home despite mortgage rates being ridiculously low and despite them having the money to do it and the desire to do it then that's going to create a massive societal upheaval i believe and then that's going to either drive people to other states like texas is benefiting because they're pro development it's going to catalyze the massive movement of people out of new york out of california whatever states are are giving too much red tape it's going to drive people to those states because that's where the housing people it's going to be built or those states

are going to crack under the pressure and say you know what we're going to let you build in sacramento and you know you guys know i'm i have a housing company in my portfolio and they are they are getting absolutely deluged with people begging them to do affordable housing in different locations and the biggest problem they're having is sorting through all the projects and what are we going to do but the great news is technology exists now to build modular homes in factories like tesla dust cars and ship them to site and take six months to a year out of the construction

process so then it just becomes a matter of regulations and which state decides that they're gonna let people buy a home for the first time and if california doesn't let people buy a home for a first time who's going to pay taxes here where's the growth going to come from this is going to be a motorcycle this is a stall moment i think just just you know then the other the other really terrible thing about home ownership is that it is where the preponderance of wealth creation for average americans comes from and so when you lock people out of home ownership you're essentially ripping away 60 to 70 percent of how they're ever

going to make real wealth and so yet again you exacerbate jason to your point the inequality that we have where a few folks make all the money and then everybody else they're kind of shut up from the equity market they're shut up from private investing and then they're shut up from owning a home and no wonder people are pissed because it's like you throw your hands in the air you're literally creating a revolution you pulled up three ladders at once you can't invest you can't tell me how i could tell me how i can just earn some money so that i can pay for my kids to go to college take a vacation and have a nice life

whenever tell me how to do it then yeah because look and nobody has a summary government doesn't have a good answer you you're we're pulling up the ladder of home ownership we've pulled up the ladder with the credit innovation you can't invest in private companies we've made higher education far too expensive we pulled up that ladder i mean what's left for the average citizen to to to grow their wealth this is a crazy thing we pull up the latter and then in response government creates a program to subsidize people and bail them out at the end i mean it doesn't make any sense

i mean mike salana had mike selena had a really funny tweet about the the california uh program which was it's amazing the lengths to which people will go to avoid building new housing you know new supply it's like we subsidize home buyers for this artificial price increase we've caused by limiting the supply this is like eliminating people's uh student loans just allow supply and demand yeah just make more colleges and make them cheaper what do you guys think about this whole pro-public speaking of wealth inequality this pro-publica league of tax records somebody inside the irs or it was hacked we don't know yeah this is

clearly a whole person got a hold of basically 3 000 uh the tax records many going back many years of 3 000 of the wealthiest americans and propublica has slowly started to digest and and issue um news reports about them and it shows that you know in some years guys like bezos paid no tax um whatsoever were able to take huge deductions you know at one point actually bezos in the year where we made you know kind of like billion dollars was able to essentially didn't uh claim he made nothing and then made so little or made negative dollars

that he got a four thousand dollar tax credit that's typically reserved for people you know people people who it was a tax credit for your kids yeah it's not meant for a billionaire essentially but you know they this was a lot i think the big story here is the leak more than uh capital gains how capital gains works we all know how capital gains work propublica has got an agenda obviously this is a left-leaning uh investigative journalism uh funded by the left uh and donations and uh they do a great job with investigations but in this case they're just telling everybody what we

already know which is if you have giant holdings you can get a loan against them whether it's you own a home and you can get a mortgage against it or equity line or if you own a bunch of stock you can get a margin loan i mean it's not really news i think this is like stirring the pot and the big news is who who released this data and then you know there are some countries i believe sweden is one of them where tax records are politically published top level yeah they have to be published and so i think the way the united states is going is we're going to force people to publish their tax records and we're going to force some sort of

minimum uh for people with holdings aka a wealth tax and i'm not saying i agree with either of those but i think that this is the way it's going and somebody posted to our i'd be in favor of seven thousand more irs agents are coming online i'd be in favor of publishing tax returns i i have no i i i think that that's a really good idea that's the flax mostly no no no i think it's a really smart thing to do i think like you would see a lot less shady behavior if you had to publish this stuff when you publish your tax return uh chamath would you do a shirtless holding up your tax return in a mirror and take

a selfie and then that's how you would publish it or listening and sweat yeah more like more like a one tier one tier it should just be a picture of you with a wheelbarrow of cash just you dumping it into a fight i think one thing i'll say is i think these stories have highlighted just an incredible um ability to shift the narrative and create a different kind of dialogue around taxation because as we all know the principle of taxation in the united states is that you are taxed on income and income is a recognized gain meaning when you sell an asset for cash or for some other asset or you do a

job or you do a job and then you get paid you get that cash that you can now go use to go buy something or to to do whatever you want to do with that is the transaction moment that you get taxed on and everyone's saying well this guy's a billionaire he has these billions of dollars he paid no taxes he didn't necessarily make billions of dollars of income that year his stock value may have gone up billions of dollars but if we all taxed each other when our stock values went up each year and we didn't get a rebate when our stocks went down people would feel pretty upset the

average american the average person would probably feel pretty upset if they got taxed every time their stock portfolio went up and then they didn't get to have a rebate when their stock portfolio went down so the principle of taxation is such that when you sell those shares and you ultimately generate income that's when you get taxed but the narrative is very quickly shifting where people are like oh this guy's a billionaire state stated you know he didn't pay the taxes they don't say anything about how much income he actually made and a lot of these guys don't need income because they have a dollar salary they

pay like you know well they effectively have a credit card one way to think about it is wealthy people have a credit card as jamal pointed out because they can buy everything on loan they can buy everything they want on credit because down the road everyone knows you guys have billions of dollars when aren't they paying consumption taxes on those so if they do take the billion and you buy houses you're paying consumption more it's actually even more uh perverted so if you take a loan and then you use that loan to actually invest the united states tax law says that all that interest you pay

is deductible as well and so the arbitrage that you find yourself in is if you're a happy person yeah it's like you have these assets you go to a bank they'll they'll lend it against because they want you know what is the bank's job the bank's job is to generate interest right so you know they want these big fish as customers right and so and then and then uh part of the tax code is that it's tax deductible and so it's one of these things that i think structurally gets people very confused about what's right or wrong but it happens and it happens um is there any common sense solution sex

well i was gonna say just keep in mind that when somebody lives on a credit card like one day that credit card comes to you and it's not a problem for bezos because amazon's talk just keeps going up and up and up but you will occasionally hear about some rich person going broke and the reason is always that they took on too much debt and then their stock price went down and all of a sudden they owe more than the value of the collateral and then they're just done and so yeah exactly so you do take it for granted when you live on margin you are taking a big risk most people don't do that

most people who have gains will eventually cash out they'll do that by selling their company or they'll sell a piece of their stock they'll have a stock selling plan and then they pay tax exactly and i feel so i feel like it's really unfair how i look i don't want to say it's unfair because people get really riled up when rich people aren't paying taxes but it's interesting to me how the narrative has been kind of very quickly reframed without the specificity of the income that was generated by these individuals and they're just saying look this person has all this wealth they didn't pay any taxes without actually recognizing that this

person may have had an income generating event earlier in their life which they did pay taxes on or they will have an income generating event later in their life which they will pay taxes on um and so the the truth is a little bit more nuanced than i think you know the very quick kind of sound body press stories kind of indicate and it's um it's just really it's been really interesting to watch how many people get so riled up and frothy about this moment and i get that we all you know everyone kind of dislikes wealthy people um you know i certainly did when when you know i was

i had no money and i felt like i was getting screwed by this thing you certainly did when we started this podcast but i think freeberg raises a great point which is that with bezos take for example and look by the way maybe he should be paying more tax in other ways but with respect to his amazon stock he built this machine called amazon it's this machine that makes all of our lives better um for for the most part in terms of the delivery of goods and services you know you press a button somebody shows up the next day so he builds this incredible machine he owns a piece of it he's merely

holding on to his ownership in that machine but the way that the public market is valuing that machine keeps going up and up and up but to freeburg's point he hasn't recognized more income he doesn't have more cash in his bank account um and so should he be paying taxes here's the thing if you change the hold on if you change the rule chamath correct me if i'm wrong here and you said you have to pay on the gain then somebody who bought a house in 1980 and it appreciated 100x in california by the time they were 70 and they bought it in their 30s they would get caught up in this wealth tax or paying for it as they go

the appreciation this mechanism exists now jason you said a key thing this mechanism exists at all parts of the tax code so yes a billionaire can basically go to jpmorgan or goldman sachs or morgan stanley you know get a margin loan on their stock and live their life but individual folks who are not billionaires can do that via a heloc on their home and a lot of people do that as well they take home equity lines of credit and they use that to forward finance things as well the difference is that because the quantums are so much bigger you have this ability for rich people to

accelerate their wealth creation in a way that normal folks don't so i'll give you another example so one example that i just spoke about is you basically take a loan instead of selling things right you use that to make investments all of that interest is tax deductible number one number two is even if you don't need to do that you can just take a loan on a small percentage of your capital reinvest that again pay the interest and now you're running implicitly a little bit of leverage and just to give you a sense of it there's a really great study by um aqr i think is the name of the hedge fund and um they reverse engineered uh buffett's returns and what they saw

was that buffett ran about 20 to 30 percent levered his entire career and the way he did that was synthetically by the float of geico the point i'm trying to make is even the best investors in the world prove that a small amount of margin and leverage is the key between being average and being the best in the world and if that if he needed that let's be honest we all need that and again we all can't have that it's only available to a few and so i'm not saying that the rules are wrong but the rules do stifle the ability to basically move up and move down that curve it's clear how often people

move down people get stopped out they get margined out happens all the time it's very hard to see examples of people moving up it's because it's harder and harder to get that first little bit of capital that then you can go and run with yeah and see i think the great the great reconciliation is what we need to work on as a society and if you look at what the great reconciliation would be it's can i get a great education can i get great health care and can i have a nice home and if you just said we're going to have uh health care for everybody in the united states

very easy to pay and if you just said we're going to allow the building of single-family homes two or three bedroom homes and you cannot stop them and any state that tries to stop them is not going to get whatever amount of federal funding and then finally we said all trade schools are free those are three very simple things that's a great idea by the way this what a fabulous idea jason i love it i reconciled and charter schools and charter schools and school choice for everybody yeah because that is the number one thing to create equality of opportunities these are incredible ideas guys and safe

communities because the number one thing kids need is a great education and a safe household and you cannot have that when care and health care you can't have that when gun violence is exploding across the country our communities are no longer safe we have to fix that problem all right listen we're at 75 minutes do we want to talk about toxic bitcoin insanity in miami yeah what the hell is going on over there what are these guys doing all right so very simple there was a bitcoin conference in miami if you go to that conference you have to

agree to not mention other cryptocurrencies there is a we all have heard of bitcoin maximalization or being a bitcoin maximalist this means you believe that bitcoin is the one true cryptocurrency all other cryptocurrencies do not exist this conference has codified that to the point at which people are jumping on stage like maniacs ripping off their clothes to reveal dogecoin shirts and then people are saying bitcoin maximalism now has evolved into bitcoin toxicity which is a subset of the bitcoin movement what bitcoin toxicity says is in order

for bitcoin to become the one true currency and the reserve currency we must attack anybody who attacks it in other words cult-like behavior either except muhammad jesus moses whoever hindi hindu god zeus for the greeks you have to accept our god or else we're going to attack you so if you can actually see this in practice i tweeted if a if bitcoin was replaced by technology what would that look like and you get massively ratioed on twitter which means more comments than likes i'll take i'll take the other side of this if you want yeah go ahead well so bitcoin toxicity is now a thing and it's actually i believe

making the movement um toxic to people and people are not going to want to participate so it's actually collapsing the project people do not want to be involved in toxicity and people think that there's many ways to win in crypto there are so the crypto community because of the recent loss of 50 i think now is in a debt spiral of toxicity go sex well i think this is a fake moral panic on your part um look if if toxicity means that you think that all these cryptocurrencies are a scam then jason you are guilty of toxicity too because you don't think you're using nobody has been on twitter more saying

that all these cryptocurrencies are a scam the only disagreement that you and the bitcoin maximals have is with respect to bitcoin but you both agree both sides agree that you and the maximums believe that all these other cryptocurrencies are this is a real technology there are scammers in it you've contributed you've contributed to the toxicity by basically absolutely not i don't know by constantly denouncing every crypto it's icos and scams i believe technology it's a real technology uh but anyway it's it's it's just gross and i think it's i think that in general

if i had to summarize what i see i i see like there's a vein of young men basically who are super super frustrated and um in cells and well i don't know if they're intel's or not but like you know i think that they they basically i think like ran the race the way they were told they checked all the boxes they went to the schools they got the jobs they did the thing they did that and it's kind of not working and so whenever they find a thing that's new i think they find acceptance in the community and then man do they get really rigid about it and they in some ways just stop thinking for

themselves and that's a shame called the cult man can i quote something we've all been raised on television to believe that one day we'd all be millionaires and movie gods and rock stars but we won't and we're slowly learning that fact and we're very very pissed off so that's fine of course it's fight club that's a great quote it's so true so true it's so true that basically summarizes twitter i feel like that summarizes twitter it's instagram instagram made it a hundred times worse you could see everyday people suddenly becoming rich and famous or at least the perception and using filters to look better and

then everyone feels like they're being left out or everyone feels like they want something that they don't have and then you're left in this constant state of want and desire and this constant state of unhappiness so uh this isn't new by the way you know these are buddhist principles that daca this source of unhappiness is really um about desire and if you can let go of and we create more comparing yourself to others yeah i think there's a a different answer to to the fight club nihilism um than just sort of uh giving up all desire i understand the sort of buddhist approach i actually wrote in 1999 when i

joined paypal i wrote an article called silicon valley's fight clubs in which i basically said that startups were the answer to this sort of you got remember fight club came out in 1999 and so you had this sort of nihilism associated with this empty materialism people wanted all these materialistic things but it didn't really make them happy but i think that creating something great and being part of creating something great is the answer to this and it's about it's about creation it's about purpose it's having meaning mastery mastery and we are robbing people of having that experience

when we do stuff like universal basic income or or tell them they don't need to work you know we should be encouraging them to have these great experiences and this is why i kind of react to these like apple snowflakes who don't want to come into their billion dollar spaceship campus it's like you know they're just punching a time clock you know they're not really getting any meaning out of their work and that's the thing i sort of react to that's so um you'd rather than find another place where they can actually find purpose and mastery rather than be at apple be mad right contribute control did the iphone

have been created by a remote team it could let's be clear the iphone would never have happened had it not been for steve jobs okay period you need to have the founder yeah you need to know you just needed to have him i mean he could have been anybody but he him if with him with a remote team could they have made the iphone i don't think so i don't know i mean i think i think apple will probably be a different company if steve we're still here who knows which is why i think they want people to come back and i think what's happening here i mean i hate to be super cynical is i think a

lot of people left the bay area didn't tell apple because you're supposed to tell them if you relocate and they're just trying to extend their tenure at apple because there is no way to come in three days a week if you're living you know in tahoe or further out i mean what are you supposed to do get a hotel for two nights a week and then drive back to tahoe or phoenix i mean these people have left if steve were still around those apple employees be racing back to the office because they'd be so excited about what they're working on they'd be working on new products

and if they didn't if they didn't have that passion steve would have weeded them out in two seconds at the end of the day snowflake by the way you mentioned snowflake although you said apple snowflakes but the founder of snowflakes said in a cnbc episode essentially we care about diversity but we care first and foremost about being a high performing organization i'm paraphrasing that services our customers and our shareholders and so while diversity is important we're going to fill a role with the best person we can find and so now the grand debate that has started is and i think it's related to what happened at

coinbase and shopify with you know no more political speech at work is meritocracy and uh can meritocracy live alongside equity and equality and diversification um or diversity so diversity and meritocracy in the same organization which wins mike moritz wrote this um pretty fabulous essay i think it was in the financial times a couple of years ago he got in a little bit of heat for doing it but essentially what he said was you know while we are all talking about the things that we think are important there's an entire cadre of engineer in china that are coding 24 7. i think he

actually said like it's 996 exactly yeah 9 a.m to 9 p.m six days a week and they use the same tea bag three times and he used that to illustrate he know he used it to illustrate their commitment to excellence and what he used to see in silicon valley where people on the weekends the parking lots were full keep going um but i i just bring this up because it's like we've lost the ability to have both things be true meaning it's it's maybe like at the end of the day frank slootman is a representative and a spokesperson for the values of a company that's a hundred billion dollar company that came

out of nowhere and built something fabulous for people in a matter of a few years i doubt that he speaks for himself only no he specifically said in this comment so if he was speaking for other people who were too scared to talk about it okay but i'm saying he but i'm saying he also he's but he's i don't care about other companies he speaks for snowflake so to the extent he says that as the ceo of snowflake why can't we respect that an entire company has decided to do something for example you know the other opposite end of this do you remember this bakery i think it was in colorado that like

you know refused to make a cake yeah refused to make a cake for a lesbian couple it went all the way to the supreme court and they said that this guy had the right to deny them making the cake to me it it makes my blood boil but at least i live in a country where he has the right to have that opinion and it's in within a legal boundary of reasonableness i guess now i learn from that and i say okay that's a legal bound of reasonableness and until that law is overturned that's what it is this is so much less than that and we can't you know let this guy actually just go about his day without issuing an apology

yeah he's not the american engineers that are working 996 in china eating our lunch every day yeah i mean in america you have to you have to give you another example i'll give you another example you have to capitulate and agree to the diversity uh jason let me give you let me give you another example there is a massive um play right now going on in the uranium market it was brought to my attention i was like let me just go look at this i don't know anything about this but i just was curious about what's going on and effectively what it is there is a fund that was trying to basically corner

uranium and drive the price up and the entire thing about uranium which was interesting is okay what is it used for it's used for nuclear reactors well then you spend a little time understanding nuclear reactors and i was shocked to learn how clean how safe yep how reliable how repeatable i had all these stupid cobwebs in my head based on a random couple of press releases three mile island fukushima etc so when i cleared all of that bias away and i learned about it then i'm like why aren't nuclear reactors everywhere because it is the fastest way for us to get to carbon neutral and then i find out the same people who

want carbon neutral i.e greenpeace is the one of the largest advocates against nuclear and i thought how do we not again be in a position to actually hold two thoughts that are slightly divergent at the same time we want nuclear energy because it actually supports something that's even more important to the sustainable ecosystem that greenpeace is there to protect in the first place and you can't have it and to me i find so i find all of this stuff again ad nauseam in this list of while we're all naval gazing on this china's progress china is 996. right we have to have four progress and

by the way uh slotman he put out a release comments i made during a media review of last week may have led some to infer that i believe that diversity and merit are mutually exclusive when it comes to recruitment hiring and promotion i do not believe this and i want to personally apologize to anyone who may have been hurt or offended by my comments so been added said in a statement posted monday i've accepted personal responsibility for the lack of clarity in my comments i think slootman's apology actually only buttresses the original point he was making which is that ceos are afraid to say what they really think

yes he came out he had the bravery encouraged to say what he really thought he then got piled on on twitter and now he's apologizing for it and walking it back it's really kind of a shame to chamas point how can we have honest conversations when people are just afraid to say what they think whether i agree with frank slupin or not is not the point the point is that if his entire company and his employees and his executive team have made a specific decision that they view merit as you know incredibly important and then they they layer diversity in as a result who am i to cherry pick those words

and all of a sudden i have a wording issue with that because i don't even understand the hiring criteria it's not as if he published those stuff so it's not not like anybody on the outside had any shred of ability to know the details right and and yeah i agree and here's my problem with all the people who attacked frank on twitter is you know have any of those people said one word about school choice or charter schools the need to release the stranglehold that the education unions have on our kids they're running these schools for the benefit of the unions not for the benefit of the kids

they're abolishing advanced math and how many of the people attacking frank have said one word about that because if we want to achieve if we want to achieve a quality of opportunity in our society we have to fix the schools and so it's so easy to attack frank but they're unwilling to say one word about school choice because the unions are a political ally and it's inconvenient for them to do so what about again going and actually understanding the cleanliness and safety of nuclear and you know being able to tell folks on the environmental left that actually this is a path to sustainable energy and a better ecology

and biodiversity in the shortest path possible they just want to shut down the conversation they don't want there to be any real conversation or difficulty we're shutting down to be really honest with you words and we're shutting down rather superficial conversations and nobody ends up addressing the root cause issues of anything that's the shame i just think that we are screaming at each other about things that none of us really understand without taking the time to understand each other meanwhile china is 996. i just can't say which is why we need to now you agree chamath we have to win space meanwhile china is 996. they're 996 and they're

going to win billion people that are born in a collectivist system against against holistically defined goals over a multi-decade period of time they're the only by the way the going back to where we started just to end maybe the podcast biotech is the last bastion where america is completely dominant right software too not really there are incredible advances that it's it's been american biotechnological ingenuity through and through and the question there is going to be how do we make sure we wrap our arms around this category and continue to do great things because in the absence of it and if we get

again if we lose the script some other country is going to 996 that market from us as well yeah i think you know what you're pointing out is we're in this generational competition sort of um sort of cold war type conflict with with china i think our foreign policy is starting to realign around that you're seeing both democrats republicans really get on the same page now about the the threat that china represents but our domestic policy is not realigned around that if we really want to win this cold war against china we have to be competitive and we keep doing things to our schools

our kids and other parts of our system and our economy that are anti-competitive we need more freed works you know and if you get rid of like advanced programs we have no freedbergs we need to clone freedberg freebart what's the chances we could just clone you and have like a 2000 more freebergs to solve this biotech problem would you be open to that can we can we start the clone wars with you do you think you would get along with your clone or would you want to destroy your clone destroyed that's that's mimetic i want 10 clones of myself are you kidding me

can you imagine the round table you know renee girard wrote about this very eloquently many many decades ago this goes in one place which is you know it goes it goes into it goes into uh capital merger i want a clone army of myself would you like to just sit down and play chess with your clone all day not chess but he'd like to do something else oh no oh no that's not an image i wanted oh no you're gonna have a threesome with yourself no nothing sexual no no no no stop that's sort of what you were saying i'd be cool with clones i'd i'd create wrestle with your own clone wrestling i

feel like there's all these different things i want to do in my life that you know different careers or whatever and i could send one sacks out to different lifestyles one stack could be an architect and one could be a director and one could want to be a whatever one champ to be a lawyer do you guys want to have your mind blown for a second yes please okay so there's a concept a capability called induced pluripotent stem cells where you can basically take any cell in your body and apply a bunch of chemicals to it and effectively get that cell to convert into a stem cell once it converts into us and so the

the copy of the cell becomes a stem cell and this was uh these guys yamanaka factor they won the nobel prize for this now you could take that stem cell and turn it into an ova cell turn it into a um effectively uh um an egg cell a fetus and then you could induce that fetus to start dividing based on a discovery that was made recently which hasn't been done in mammals yet but effectively get it to start dividing without being fertilized and grow up and it would effectively grow a clone so this has been done in plants it has not been done in animals so in theory in the next decade or two we could take any

any hair cell from our own body convert it into a stem cell this is totally sci-fi by the way it's not proven there's no there's a bunch of there's a bunch of discoveries that have been made research that's been done that points to this trajectory that you could then take that stem cell from take a cell from your body turn it to a stem cell turn into an egg cell induce it to start growing and turn it into effectively equations i just want to say as you've been saying i've been shaking my head jason has no reaction saks is grinning from interior i mean he cannot wait exactly sign me up

i'm gonna be like saddam hussein with like myself i love you besties uh for the queen of quinoa rain man himself and the dictator i'm jake al and this has been a double episode of the all-in podcast we'll see you all next time bye-bye [Music] besties [Music] we need to get i'm going on