00:00:00
All right, Saxs, how you doing, brother? Wait, wait, what's this? Why are you wearing a tie? I'm in DC today, so it's a it's a
00:00:05
government day. Ah, so you suited up with the ties. You suited up with ties. Well, maybe I'll join you. Maybe I'll join you. Oh, look.
00:00:11
Oh, look. What is this box I just got? Oh, that's for my guy Tom. Oh, just for JCAL, Mr. Jason Calakas. Let's see
00:00:18
what's in the box here. Oh, what's going on here? Tom Ford sent you something. Oh, Tom sent me a nice tie. And you
00:00:24
don't go I uh I heard that Moose ate your invitation to the White House.
00:00:30
He did. He did. Sorry about that. Sorry about that. [Music]
00:00:37
Let your winners ride. Rainman David.
00:00:44
We open sources to the fans and they've just gone crazy with it.
00:00:52
All right, everybody. Welcome back to the number one podcast in the universe
00:00:58
in the universe. It's been proven time and time again. Oh, this I'm not putting the tie up. Ah, it. It's just It's
00:01:05
enough already. I I guess Friday. We We moved the show to Friday. Sorry you're getting this on Saturday. You can't come to the White House. You
00:01:11
can't figure out a tie. Yeah. Well, maybe you could show me how to do this next time I'm in town. I got
00:01:16
to practice with you. We'll go in the mirror. You could. That'd be great. Bit you behind me. Show me how to do a tie.
00:01:22
We didn't have ties in Brooklyn. What do you want me to do? All right. Well, it was an eventful week. Some of our
00:01:28
besties, some, not all, were invited apparently to a uh a little suare at the White
00:01:35
House with the president, Saxs and Cham. Here's a photo. Some pretty good seeing
00:01:40
arrangement here. Looks like Zuckerberg got the pole position on the right hand of the father followed by Saxi Pooh and
00:01:47
Chimath and Amo sitting right across from Sam Alman and Tim Cook. What a
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crowd. What a crowd. What was the um what was the uh impetus for this dinner?
00:02:00
Sachs, tell us. Well, this was a tech dinner at the White House. I think it originally
00:02:05
started with a group that Chimath organized in Silicon Valley and they were kind of the core nucleus of this
00:02:12
and then more and more people just wanted to come and try to get in and the president invited some of the top tech
00:02:18
leaders and pretty soon it turned into the room that you saw there. I mean it's really pretty amazing President Trump's
00:02:25
ability to convene all these people. You normally don't get these people in a room together. Many of them are
00:02:30
competitors and it's remarkable. You pretty much had I'd say like maybe half the tech industry was there
00:02:36
by market cap. Certainly. By market cap for sure. Yeah. And uh Chimath, you obviously were
00:02:42
involved here and you got a pretty good seat. Any uh great inside stories? Any inside baseball? What did they serve? By
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the way, I'm curious what gets served at a dinner like this. That was a very elegant menu.
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And they they try to keep it light so that it's not overwhelming, which I think can get in the way. So it was like
00:03:00
So no prime rib, right? There was a barata salad and then there was a a fillet and then a nice raspberry
00:03:05
dessert. Okay, here's what I'll tell you. Sax said it well. What was incredible
00:03:10
for me just to frankly be in the room felt very surreal. You're seeing the leaders of the most important companies
00:03:16
in the world sitting together and I just felt like there was a sense
00:03:22
of alignment and cooperation and that was really cool. I think none of those
00:03:27
folks have to really show up anywhere that they don't have to. I think they're at a place in their career and the
00:03:33
importance of the businesses that they run. But the fact that the president can convene them, I think says a lot about him and the agenda. And then they to a
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one were incredibly supportive of what he has done and clearing the way and
00:03:47
allowing them to build their businesses with a lot more clarity. It was just very clear the juxtaposition of what it
00:03:53
was like and the difficulty under Biden versus what it was now. And you saw some very truly hard cast liberals who have
00:04:00
now completely embraced President Trump. Folks like Tim Cook, folks like Bill Gates. And I think that that's an
00:04:06
incredible testament to him and his agenda. And then the second thing, which is more personal, is I was so proud of
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Sachs. Every single one of these guys, and you're talking like the Titans of
00:04:17
Titans, they took a moment to say that he was just doing an incredible job and the president was really proud of it. It
00:04:23
was like as a brother. It's like you're seeing your brother just get completely It was It was great. So, that was really
00:04:30
special. Freeberg, any any take on this? I I noticed you didn't make it. You didn't make the cut. My invite got eaten
00:04:36
by moose obviously as we heard earlier, but uh I thought you for sure would get a seat. What happened for you? bring no
00:04:42
seat for you. I work in agriculture, Jay Cal. So, we're doing the agriculture dinner next month. It's going to be great. The president and I are arranging a round
00:04:49
table. It's going to be fantastic. Yeah, just kidding. No, but I was in DC. So, if I eat my vegetables, I can come
00:04:55
to them. No, no, I was in DC with the guys. I actually did an interview with Senator Rand Paul, which you'll which I think is
00:05:01
out on YouTube now and on our podcast channels. It was great to sit down with
00:05:06
the Senator. What was the highlight of the uh of the the Paul interview? I didn't get to watch it yet. Apologies. as I was
00:05:11
getting ready for the summit. But did you have a highlight or two you want to share with us? I mean he he's an interesting guy. A lot
00:05:17
of people have challenged him because he's an independent thinker. He really
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is true kind of libertarian views and libertarian beliefs and he's held firm to them despite bucking with the party
00:05:30
which he did recently on the big beautiful bill. You know he was one of three Republicans to vote against it. So he's criticized and chastised and, you
00:05:38
know, ousted in a lot of different circles in DC because he doesn't kind of fall in line. But I do think that
00:05:43
dissent and debate is critical and important for us to find the better path
00:05:48
forward. And I I like the role that he plays. And I think he's very first principled. And I think his talking
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about his ability to get elected despite not being willing to always fall in line with the party is a really important
00:06:01
point. and he hopes it will inspire other politicians to follow the same path and for voters to see that there is
00:06:07
a role for independent thinkers in Congress. Yeah, I mean that is something we need.
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It seems like these parties just get locked step. They're expected to vote the same. They're vote on party lines
00:06:18
and sachs that is definitely a weakness I think of the two-party system. your
00:06:23
thoughts on uh Ran Paul and his you know being a bit of an agitator maybe like
00:06:30
Mansion was that there's a role for this. Yeah. In our democracy. Well, I think it's good to hear from a
00:06:35
libertarian voice once in a while they're going to have a different sort of conservative once in a while. I caught that too.
00:06:42
They're going to have a different sort of viewpoint that could be called conservative. So, I like grandp. But can
00:06:47
we just go back to the the dinner? I want to just yeah build on a point that Chimath made about
00:06:52
the level of sort of comey in in the room. I think that the the people in the room
00:06:57
there it was remarkable even though a lot of these companies are competing with each other they were largely on the
00:07:04
same page with respect to what was happening in the economy and the world
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and with the kind of support they needed for the tech industry to do well and for the US economy to do well. And I think
00:07:17
the reason why they were largely happy with the Trump administration is because
00:07:23
the Trump administration has been pro- innovation, pro- infrastructure, which includes being pro- energy, pro- export,
00:07:30
so these companies can sell their products internationally. And then also the thing that's been very important to the Trump administration is proworker.
00:07:36
And you heard the president make all of those points in his critical AI speech that he gave on July
00:07:43
23rd at the AI summit that we co-sponsored with Hill and Valley. So I think a lot of the compliments that we
00:07:49
received were due to the agenda that the president articulated so well at the AI
00:07:54
summit and the people in that room are largely supportive of that policy. So, I don't know if I would call it a love
00:08:00
fest, but I think it was an opportunity for these tech leaders to articulate
00:08:05
their concerns where they could use help. And I think the president, he's a great listener, and he wanted to take in
00:08:12
their feedback and figure out how to make the economy grow even faster. I had so many questions from, you know,
00:08:18
behind the scenes, etc., like seating arrangement, how's that discussed? The first thing I'll say is the president
00:08:23
takes tremendous control over these details. So I've said
00:08:29
this before about how conscientious he is, but one of the things that he noticed before was it was very difficult
00:08:35
to host press conferences or world leaders outside in the Rose Garden. So the way that it started was around 4:00
00:08:43
what happened was that David, and I'll tell you because there was a joke about this at dinner. David asked the
00:08:48
president, "Can we do a tour of the Oval for all of the fans of Allin?" And the
00:08:54
president said, "Absolutely." So me, Freeberg, Sachs,
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we went and Caroline Levit meets us and walks us in. By the way, if you want to
00:09:06
see a star of stars, like I've I've met few people like this
00:09:12
who exudes this level of competence. I mean, I think it was the first thing that Freeberg said after maybe like two
00:09:18
minutes of interacting with her. It's like, "Wow, this may be the most competent person I've ever spoken to. She's outrageously good." So, she gets
00:09:25
us all, she cleans up some stuff that had to be cleaned up, walks us in, and the president gave us this tour. And the
00:09:33
beautiful thing about the tour, if you are a student of American history, is
00:09:38
the history is on the walls. I mean from George Washington to Abe Lincoln to even
00:09:43
Ben Franklin and the Declaration of Independence Jason. And so we were able to see all of that and and see all of
00:09:49
that in detail and he was able to talk about it and then as it kind of always does it veers where
00:09:55
you know he does the weave and he's like guys what do we want to talk about and free was able to ask some questions and
00:10:01
saxs and I and then it just became a little bit more freewheeling like well it turned into like a hang
00:10:06
a hang. Yeah. We we hung with the president and then after we hung we turned the cameras off and then we hung
00:10:12
like another half hour 45 minutes with him. People are coming in the oval but it's literally like an episode of
00:10:19
West Wing meets VEP meets like you know it was like everyone's just chatting going in and out. You meet all the
00:10:24
characters. So then that ends and Sax had to do some meetings in the oval with the president.
00:10:29
So we all leave and we're escorted into I think it's the Roosevelt room. Sax, is
00:10:35
that right? Is that So when we get into the Roosevelt room, this is where it becomes surreal.
00:10:40
You're seeing the most powerful people that have built these incredible businesses. I think there's 30 people,
00:10:48
but the table can only fit like 15 people. And so you have like Tim and Sam
00:10:54
and Satia sitting on the couch over here by these two chairs just like Dylan Field and Alan Wag. And it's like the
00:11:01
funniest scene because everybody at that moment all the ears are gone because
00:11:07
they know the context in which they're they're there. Yeah. In their own worlds, they're like kings. But in the White House, you're
00:11:14
back. You're sharing the backbench. You're an American citizen who's there to meet the president, right? But there
00:11:20
were some incredible people there. Some people I I'd not really met before. Safatz, lovely, and her husband. And
00:11:26
then there were some other people that were just amazing. Jared Isaacman, which is wonderful to see him. There was a
00:11:32
whole group of folks that were there. And then
00:11:38
they say, "Hey guys, can you just get into a single file line?" And so again, it's like a it's like a surreal scene
00:11:45
where it's like Sundar Satya, Bill Gates, survey
00:11:50
these people in a single file line. I mean, you guys sound like you went backstage at a Zeppelin concert.
00:11:55
Incredible. No, dude. And then we're we're escorted into the oval and this is like what's so
00:12:02
kind about what he does. He sits at the at the Resolute desk and Mirith Or who's
00:12:09
incredible, she introduces everybody one by one so that they hear their name. I
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don't I it may sound like a a weird thing, Jason, but like to hear your name called
00:12:20
in the oval and then you stand beside the president. He's seated and they have
00:12:26
a photo. They take this beautiful photo and then the first person was Saffra and
00:12:32
her husband and her husband says, "Could I take a pen?" I swear. So the president
00:12:39
says, "Of course, that's what they're there for." So he gives him a challenge coin and a pen.
00:12:46
Everybody takes one. So again, you're seeing the leaders of these incredible businesses. One by one, they get
00:12:53
announced. They go stand by the president. They take a beautiful picture and they take a coin and a pen. And then we're all just kind of milling in the
00:12:59
oval after that's all done. And he says, "Well, guys, we're going to talk at dinner, but do you want to just start?"
00:13:05
And it was amazing because Sergey, does he sit behind the desk then? He's still sitting at the he's still
00:13:10
sitting. So anyways, Sergey asks a few questions, really starts to get the conversation going, which I which I think was really good. And then he says,
00:13:17
"Okay guys, let's continue this conversation at dinner." And so we exit into the rose garden and this is where
00:13:24
our friend Sunonny Madro says on the way like as we're walking says sir I hear
00:13:30
you have a playlist. Can we hear the music? And so he takes the iPad turns the music on and he apparently had been
00:13:36
tuning it and so now it's like he's got a great playlist by the way. It's like Fleetwood Mac. I mean like you're hearing like all the classics and it's
00:13:43
just blasting in the Rose. I mean blasting. Lisa Sue posted one of the photos. You can see them all because
00:13:49
like the oval is small. Okay. So, just to be clear. So, then that's dinner. Oh, wow. There you go. It's stuffed. I mean, I'm right to the
00:13:57
left of Tim and Jamie Simmonoff is right at the end. I And I think it's VC Rana Dbe who's the owner of the Kings is
00:14:04
right there of the Sacramento Kings started typical and then I think it's me. I think I was standing kind of more in the front there. Anyways, so we
00:14:11
leave. So, so if you just pause there. So that window that's Sham Sankar who's the CTO of Palanteer and behind him is
00:14:18
Dave Limp and then you can see Dylan Field the founder and CEO of Figma. That's the door you exit. You go into
00:14:23
the Rose Garden and then you walk through and we walk down the hallway.
00:14:29
You guys have seen that before. And we go into the to the east wing and they say want to introduce the first lady.
00:14:37
So what happens is you walk into the east wing, you walk upstairs and there's
00:14:43
a very elegant seating chart that they make. It's actually a really good way of doing it because normally what you would
00:14:49
do is you would walk around the table. Yeah. No, this is a much better system. So you
00:14:54
actually have a small model of the table and so what happens is you go you you
00:15:00
can see where everybody is sitting and then you see where you're sitting and then there's an escort that takes you to
00:15:06
your seat. So, it's a really it's it's done really well. I mean, for it's very thoughtful. Yeah, it's very thoughtful.
00:15:11
It was in the East Room where we also did the crypto summit at the White House and there's been other events there. But
00:15:17
let me just give a shout out to the first lady, Melania Trump. She's very interested in this topic of AI. And in
00:15:22
fact, earlier that day, we did an event at the White House with the AI education
00:15:28
task force, which she's chairing. and she's very passionate about making sure that every school child in America has
00:15:34
access to AI so they can get AI education. And we had dozens of
00:15:40
companies there at the White House making pledges of resources to make sure that teachers and students and families
00:15:46
will be able to have everything they need for kids to learn AI so they have the skills for this critical tool. So
00:15:54
this is a topic she's very interested in. So she wanted to be at that dinner. So then we get seated and people are
00:16:00
talking a little bit and he goes, "Guys, if it's okay with you, we're just going to let the press in." And I thought what that meant was a few people, I mean,
00:16:09
I've never seen anything like this before. It It's like a zoo entered
00:16:14
the East Wing like cameras, boom, microphones. Oh, the gaggle.
00:16:20
The gaggle. They start screaming because like everybody's trying to shout over
00:16:25
each other to try to be able to ask questions. But then, you know, the president kind of imposes control and
00:16:30
says, "Guys, hold on." And then he allowed the CEOs of the of the big companies to say something and then
00:16:37
Gates said something and then that kind of set the tone and obviously he said something and then he
00:16:42
said, "Anybody have any questions?" And then they just start screaming. I mean, and there are people running around with
00:16:49
mics. I don't know how you pick who gets to say something quite honestly because the question
00:16:55
procedure it's out of control. No, but but you know what's crazy is the questions are so all over the place. I
00:17:00
don't know how you can be prepared like he knows what he's saying. He's very purposeful with what he's saying. I don't know how you do that because the
00:17:06
questions are all over the place and you could tell like cuz one of them asked Zuck questions. Zuck was like what's
00:17:11
going on Zuck? Zuck Zuck what about your 12 houses in Palo Alto Zuck? I mean, no, it was a tougher question.
00:17:18
What was that? I It was about free speech and the UK and he did a pretty good job. Zach, my Instagram account's locked. Can
00:17:25
you help me? My Instagram. Anyway, so then so then they leave and then Well, by the way, they have to be like
00:17:30
thrown out, you know. They don't just leave. They're out of control. They make coral, you know. Yeah. And then we had this lovely three
00:17:37
course dinner and then right after the appetizer, I think like he starts going around and people just start talking and
00:17:42
saying things and things that are on their mind. And I'm I'm not going to share anything from that from that. But I thought I thought that was pretty
00:17:48
illuminating and pretty awesome. Let me ask you a candid question. And challenge him on any topics. Were
00:17:53
there any I mean we saw there's a lot of agilation. People thank you Mr. President. There's a lot of difference. Anybody throw him a fastball, curveball?
00:18:00
Was there any challenging question in that format? It's not about asking him questions like you're interviewing him. But there are
00:18:06
people that brought up challenging things that they are dealing with. Yeah, that's what I mean. But that No, that is not what you said.
00:18:12
So, no, no, it's something that maybe is not aligned with maybe how the administration is doing things. That's
00:18:18
what I'm sort of getting at. Okay. No, but that's again you're trying to like Nobody's there to gotcha. People are like, "Sir, I'm dealing with this
00:18:25
specific issue in this specific country. Can you help?" Ah, got it. Well, I was thinking like immigration, high skilled in
00:18:30
immigration. That seems like a topic everybody cares about in our industry. I'll tell you what we talked about. The
00:18:36
issues that they had are many and they have to deal with how American companies
00:18:43
can build businesses in a seamless, straightforward way. And what they said
00:18:50
is since Biden, what Trump has done is clean the decks and allowed them. They
00:18:55
all said that. They didn't they weren't forced to say that. They all said it, which I thought was really cool. This is again why I said earlier, super proud of
00:19:02
what David has done. Like it was palpable the respect that all these guys had for him, which is awesome. But then
00:19:08
what the president says is, I could take care of this. I can do that. That's not going to stand. He's like what you see
00:19:15
is you have these American titans of industry. I've said this before, Jason. The whole premise of the American dream,
00:19:22
I think, rests on economic and military supremacy. That is derived from technical supremacy.
00:19:29
That group of people are the geniuses that create the technical
00:19:34
supremacy for the world. And he is their biggest advocate. And that's inspiring
00:19:39
because it's like they are like sir here's what we need and he's like great I'm going to go to that for you and try
00:19:45
to get what you need. And so there was that conversation and then there was a joke and he said at the end something to
00:19:51
along the lines of ah you know I had to it's a tough day or something like I had to I had to film a segment for David's
00:19:58
dumb podcast. Just said it like as a joke. So everybody everybody everybody starts laughing
00:20:04
and then Zuck piles on. He goes, "Well, the only dumb parts are Chimat's parts and
00:20:10
everybody else starts laughing." But when Zuck said it, he's leaning back.
00:20:15
And then he loses his balance. Sax Saxs with the tism is just looking straight ahead at Timco.
00:20:23
I I am like I don't know what to do. Nat caught Zuck. Nat pulls her arm. I don't
00:20:29
know how she got there. It was a really sweet moment. And then I had a favorite moment actually. It occurred after you guys left the White
00:20:35
House. Here it is. This is Chimat's greatest moment. There is a Chimat super fan. As you can
00:20:41
see there, that's a Chimat super fan. And he's signing multiple pictures from all different eras. Those will be on eBay
00:20:48
later. Look at this guy. I just want to back up and say one of the reasons why I thought
00:20:55
it would be cool for us to kind of do this interview in the Oval where the president kind of gave us a tour of the
00:21:01
changes he had made to the White House is I was getting a tour with my family one weekend of the White House and the
00:21:07
guides who do these tours were telling us about how much care the president takes in the condition of the White
00:21:15
House and all the upgrades that he's made. And they've seen him walking around and he'll pick out paintings and
00:21:21
art. they'll move things around. He got a whole bunch of paintings out of storage. All the paintings that are now
00:21:26
in the Oval Office are ones that he directly picked out. And they also said that when he sees something wrong, like
00:21:34
with the landscaping or, you know, he'll call a gardener over and give him notes on how to make it look better. And the
00:21:40
president himself posted a truth a few days ago where the new pavers on the
00:21:46
Rose Garden patio got damaged. There was like a big scratch and see that video.
00:21:52
He caught them online. He caught the He caught he caught the delivery guys. He went to the tape to figure out who
00:21:57
did it. Yeah. Yeah. That's That's a New York developer. And not only that, he fired
00:22:02
them and he's making them pay for it and they got to buff it or something. Yeah. It's funny. He told us the story at the dinner that the the contractor who got
00:22:09
fired was devastated. So, he's probably going to have to hire them back cuz, you know, he's he's too nice. And he asked everybody. He's like, "Do you
00:22:15
guys think I should hire him back?" We're like, "Yes, I heard the guy." He's like, "I'll probably hire him back." It started as a tour. It was supposed to
00:22:21
be a tour. We were going to see the Rose Garden and other things. And then it rained and so we just stayed in the oval
00:22:27
and then it became like more of like a hang. Oh, wow. You guys are going to make that
00:22:33
into an episode. That's going to be an episode. Oh, that's incredible. Okay. So, Jason, like look, you see the
00:22:39
couple days before and the president tweeted about this, Nick. I sent that to you. You have India, Russia and China
00:22:44
kind of like fratinizing and then one or two days later the president convenes
00:22:50
this dinner of I think you know some incredible entrepreneurs building a lot of the really important things that the
00:22:56
world needs in the future. I don't know what your reaction is when you see the kind of like I mean yeah there's a legion of doom
00:23:02
there the uh Putin and she and uh not Modi maybe but he he's obviously making
00:23:08
a point but you know overall I had a lot of thoughts about it. But I did a I did a press hit.
00:23:14
Of the 20 people there or so, I'm not sure what the exact number was. I'm just eyeballing it here. I think we're at 2930.
00:23:20
I think about 19 of them are lifelong Democrats who have switched to this
00:23:25
party. And and I I think the Democrats need to look at this. This opportunity was always there for the Democrats. But
00:23:31
what did they choose? They chose to take the position of ban the billionaires and an agenda that makes no sense. And if
00:23:38
you had invited this group of people, if you were Biden or Kamla and you invited this group of people to come to the White House, they would have come as
00:23:43
well and you could have a really thoughtful conversation about them. What the Democratic positions might be, you
00:23:49
know, wages, healthcare, and and this same group of people would have engaged,
00:23:55
but they were not allowed to access the White House. They were not allowed to have a dialogue. And I think they
00:24:01
pursued, you know, very weird agenda. And you got Nancy Pelosi out there day trading. got AOC and the socialists, you
00:24:08
know, pursuing some crazy agenda. What do you expect people to do if you tell
00:24:13
them we don't want to hear your concerns? We don't want to engage with
00:24:19
you in debate. You can have all kinds of differences with Trump on style. I do. You could have policy issues. I do. But
00:24:26
as a moderate, when I see something like this, I just got to give, you know, you a lot of credit, Saxs, for being able to
00:24:33
give access to the president and give the president access to these individuals and let an all these
00:24:39
important discussions happen and then the group can act as one in the American people's interest. And I think it's very
00:24:44
important for the Democrats to learn something here, which is 90% of Americans aspire to be billionaires. and
00:24:51
10% maybe they're you know socialists moon communists whatever they are it's
00:24:57
fine they can pick and choose what they believe is important in the world but Americans love these individuals they
00:25:03
love these products and services and 70% of the top 50 companies in the world by
00:25:10
market cap are American companies this is the best of America this is the best of the American dream and it's great
00:25:17
that they can go and have debates with the president that was you know to my earlier question like I know a lot of these guys have some issues with the
00:25:23
president or certain issues tariffs etc. This is an important I think moment in
00:25:30
time to just say Trump 2.0 I know is engaging the business community and
00:25:35
meeting them where they are and saying how can I help you grow faster? How can we compete? America is not the only game
00:25:41
in town. Now, as you saw with Modi, you know, creating this alliance with she and Putin, it's imperative for the
00:25:48
American companies to excel and create jobs. And we have the lowest unemployment. We'll talk about employment today. There's some new
00:25:55
statistics. We have the lowest unemployment of our lifetimes. It's for a reason. It's not because of any president. It's because of these great
00:26:00
companies. We should be celebrating them. And the president's done an exceptional job of doing what all
00:26:06
Americans do. We celebrate these companies. We love the iPhone. We love Teslas. We We love these products and
00:26:11
services people are building. People love Google. They love chat GBT. It's fantastic. And so it's easy to be
00:26:16
cynical, you know, about business or business leaders, but uh this was really, I
00:26:22
think, a great show of force and it shows the country's getting in sync on what matters and that has it should be
00:26:28
independent of political parties. So I was very proud of you, David, that you built this bridge and you built it brick
00:26:33
by brick and I think yet to come. Well, I mean, just to be clear, I mean, obviously the president already had
00:26:39
access to all these people and in fact, many of them were already on speed dial and he already knew them and he he's the
00:26:45
one who convened them at the White House. I've just been helping with policy. So, I don't want to just be
00:26:51
clear about that. Well, I'm not overstating it, but I'm I'm I'm even going back six months when you guys held
00:26:56
the fundraiser and then just, you know, you see like a very close friend of mine, Mark Pinkis, lifelong Democrat,
00:27:02
has donated, you know, probably eight figures to the Dems in total over the years and he got frustrated at a certain
00:27:08
point that he couldn't get his calls returned or he couldn't have important discussions. Well, here we are. He was at that dinner. I think that's a very
00:27:15
important lesson. The Democrats need to feel moderates, business leaders. They got their Bob Igor, they got Jamie
00:27:20
Diamond, they got a bunch of people who could help, you know, build an agenda that's not lunacy.
00:27:26
Yeah. And what I would say is is look, maybe half the people at the dinner have
00:27:31
actually moved to the center or to the right relative to where they were. And I think Mark Pinkis has basically put
00:27:37
himself in that category. So there's people who have like been red pilling and moving over to our side. And then
00:27:44
I'd say the other half people in the room haven't necessarily changed their politics and they're just there to do business. They want to have a good relationship with the government. But
00:27:50
the same is true on the part of the president. You I saw some conservative influencers saying, "How can the president meet with this person or that
00:27:56
person? He's been such an opponent in the past." I mean, look, the president is doing business as well. He asks all
00:28:01
the attendees of the dinner, "How much are you investing in America?" You know, what do you need to invest more? He
00:28:06
wants to see the infrastructure investment. Why? Because it benefits all Americans, not just software companies.
00:28:12
It benefits the construction industry, the trades, the electricians, the carpenters, the energy companies,
00:28:18
fracking and so on. So he he's there representing the interests of the country and then many of those CEOs are
00:28:24
representing the interests of their companies and there's a dialogue going on and it doesn't mean that everyone has
00:28:29
to like suddenly become a Republican or change their politics. But it's constructive and this is all in
00:28:35
furtherance of having the US economy grow better. All right, perfect segue. We got lots to
00:28:41
talk about in terms of the economy. And uh first story here, Trump's tariffs got
00:28:47
overturned in court. Federal appeals court ruled 74 that Trump exceeded his authority when it comes to the Emergency
00:28:55
Economic Powers Act. Okay, we'll get into the details here. Historically, Congress was in charge of tariffs, but
00:29:02
under an emergency, a national emergency, the president can get involved with tariffs. and they cited
00:29:10
the 47th administration fentinyl crisis at the borders, Mexico, Canada, China, etc., and the trade deficits. Well, the
00:29:18
White House got sued by a group representing small businesses. In May, two federal courts ruled that he
00:29:25
wrongfully uh invoked the EA and the
00:29:31
White House appealed that. They've now lost and Trump's tariffs will remain in effect until October 14th allowing the
00:29:38
Supreme Court to appeal this. These tariffs have been tremendously unpopular
00:29:43
in the business sector. Uh I think maybe 70 80% of business leaders in a recent survey sack said that they don't they're
00:29:50
not crazy about them. But they have on the other side generated over $150 billion in revenue in a couple of short
00:29:57
months. So they could generate trillions of dollars in the next decade according
00:30:02
to estimates. I guess the question I have for you Sachs is you guys are moving uh at the White House there in
00:30:09
this administration, the executive branch at startup speed, moving fast and break things is something we talk about
00:30:15
doing in our industry and uh is this just the natural extension of that? The
00:30:21
president is doing a lot of aggressive things and sometimes they're going to be allowed, sometimes they're not. What's your take? Well, I'm not concerned about
00:30:27
the fate of tariffs at the Supreme Court, even though it's probably a coin flip, whether the Supreme Court's going
00:30:33
to allow the tariffs under AIPA, but there are five different laws under
00:30:39
which the president has the authority to impose these tariffs. So, there's a chart here that we can throw up on the
00:30:45
screen. There's section 232, there's section 2011, section 301, section 122,
00:30:51
section 338. There are at least five different bases for the president's authority to impose tariffs. So, at the
00:30:58
end of the day, I think it's actually quite unlikely that the Supreme Court's going to force a change in tariff
00:31:04
policy. And I don't think the Supreme Court sees it as this urgent matter that requires a a quick resolution. So, I'm
00:31:12
not particularly worried about it. In terms of the popularity of the tariffs, my guess is that they're not going to be reversed in the future by a future
00:31:19
president because I think they actually are quite popular with the country, with workers. Among the business elite, it's
00:31:25
more mixed. I'll grant you that. But if you change the way you ask the question from are you in favor of these tariffs
00:31:32
to are you in favor of raising 4 trillion in revenue over the next decade
00:31:38
through tariffs to fund a tax cut like we had in the big beautiful bill then that might change people's perception of
00:31:44
it. So that's really the question is is how do you want to raise revenue for the government? And between big beautiful
00:31:51
bill and the tariffs, what you see is a substitution from taxing Americans to
00:31:58
taxing foreign companies unless those foreign companies then make a big investment in America. So look, there's
00:32:05
no great way to extract revenue from the private sector. all taxation is is
00:32:11
unfortunate and undesirable and be better if we didn't have to tax so much. But the reality is I think that if you
00:32:18
have a choice between taxing American people or imposing tariffs, I think tariffs may be the better way to do it.
00:32:24
And I just want to note that the CBO has now increased their projection of
00:32:30
what tariffs will raise to 4 trillion over the next decade. So 400 billion a year. It's pretty
00:32:37
significant, right? And initially it started as a lower number and it completely pays for the one big beautiful bill.
00:32:43
Chimoth, here's the chart. Tar Trump's tariffs were meant to help manufacturers. Do manufacturing firms think they're helping? Has your business
00:32:50
been impacted by higher tariffs this year? And uh here negative impact 72% of
00:32:55
manufacturers. 3.7% think it helped and uh 17% said no impact. 7% don't know
00:33:01
yet. Your thoughts on tariffs? are obviously unpopular with people in retail manufacturing in those
00:33:07
businesses, but as Axe points out, hey, maybe the American people like them and they like the idea of a new revenue
00:33:13
stream. What are your thoughts, Shiman? I think that the tariffs on balance are a pretty smart master stroke of
00:33:20
strategy. I think that we did not understand what the impact of tariffs would be
00:33:27
except for hypothetical econ wonk talk.
00:33:34
And so that hypothetical econ wonk talk basically said that tariffs were always
00:33:39
going to be a disaster. And if you ask them, well, what is the actual practical data that you would point to? They
00:33:45
didn't have any. It was just more hypothesis. But what is the practical data now? I
00:33:50
think that the United States is going to book
00:33:55
probably close to half a trillion of of incremental revenue. It's actually forced a stabilization in
00:34:03
the dollar, which I think that people were always very concerned with. What's going to
00:34:09
happen to the dollar complex? Everybody always screams like with a like their hair is on fire.
00:34:17
But the dollar complex has stabilized, I think, because of tariffs. So, there's been some real positives. And what Sax
00:34:23
says is right, which is whoever is president over the next, you know, 5,
00:34:29
10, 15, 20, 30 years, there'll be some Democrats, there'll be some Republicans.
00:34:34
It's going to be very hard to justify why you would undo this now because this source of revenue is going to be an
00:34:40
incredibly important one. Well, and also it's not just the fact that the revenue is very important. You rais a great point, which is the US
00:34:46
government's going to become dependent on that revenue, but also just workers. I think the tariffs are very popular with bluecollar workers.
00:34:52
auto workers really like it. Well, here's what I was going to this the the pie chart that you showed
00:35:00
is not accurate. And the reason it's not accurate is that the investment cases
00:35:06
that you would underwrite because of tariffs and the big beautiful bill haven't happened. So, I'll give you an
00:35:12
example. I am a person that started a business that is building a factory to
00:35:18
make batteries in my specific example in Michigan. So to delever away from China
00:35:24
for the battery supply chain and what I will tell you Jason is after the big beautiful bill and because of tariffs it
00:35:31
is much easier now for me to underwrite. Why? Because I have 100% depreciation across all my capex it's a complete
00:35:37
changer on the IRRa of these projects. So before where I would have to raise billions of dollars from outsiders, I
00:35:45
can subsidize a lot more of it internally because I can actually underwrite to a better gain because the
00:35:50
the tax savings are so meaningful. Same thing for this data center that I'm building in Arizona. So in all of these
00:35:57
cases, I think that a you have this uptick in revenue because of tariffs on the short term and b the important thing
00:36:04
is to redo this pie chart in probably a year. Like for example, our groundbreaking in Michigan will be in
00:36:09
July of next year for that factory. It'll be online 2 years after that. The
00:36:15
real story, Jason, of all of this will be really known in that period. But right now, what I'll tell you is the
00:36:21
underwriting case for putting a ton of money into the United States has changed to the positive because of these
00:36:27
because that 100% depreciation. It's a huge deal. Yeah. Whether you're buying plane,
00:36:33
yum yum. All in aviation. Freeberg, here's your poly market. Will tariffs generate greater than 250 billion? It's
00:36:41
uh peaked at like 30%, it's come back down to five. Most people are betting. So, this could be a case of free money
00:36:47
if people want to go get it on poly market because it has a pretty good chance of hitting that. But well, the number the number I said,
00:36:52
Jason, is like a yearly run rate. So, technically, if you just look at the calendar 25, you you only get a stub of
00:36:58
eight months because it starts April 1st. 8 months, 50k a month, 50 uh billion a month to get to 400 billion. So they
00:37:04
should be able actually think they're going to hit that bogey. But Freeberg, the
00:37:10
reports from people who have been impacted by tariffs. Obviously these could become inflationary, but the
00:37:17
people who are being impacted said they've been eating them to date, but they're not going to be able to eat them
00:37:22
forever. So it could become inflationary. What are your thoughts on the tariff kfluffle here and and the
00:37:28
legal battle over them as well as the impact it might have on inflation which
00:37:33
is something we do not want to see come back and we have been teetering just under that 3% number which then puts the
00:37:39
Fed obviously in difficult position with their mandate to get to two Freeberg I'll address the legal kurfuffle point
00:37:46
which I think is a good one because I do think that the great debate that's going to happen from this presidency
00:37:53
and will likely shape the next set of presidencies
00:37:58
will be the right for presidents to declare emergencies to move forward their legislative agenda
00:38:05
and arguably the tariff institution by many members of Congress
00:38:12
should have gone through a congressional process. In the meeting I did with Ran Paul this week which has now been
00:38:18
posted, he talked about the challenge that they have had with Democratic presidents Biden and prior to that using
00:38:26
emergency authorization vested to them under the National Emergencies Act which is a 1976 statutory authority to take
00:38:34
action and then in order for the emergency powers to be turned off,
00:38:39
Congress actually has to vote and they can only do so after 30 days. And when Congress makes that vote, the president
00:38:47
can veto their vote. So the president can then say, "Send it back." So then they have to get a two-third supermajority to get it to pass. So it
00:38:55
creates a system whereby the president can have this emergency authorization to progress much of their legislative
00:39:01
agenda under the guise of emergency powers, which you know, for many people
00:39:07
they would say is not the right way to do it. So, Senator Paul and others have proposed bills, for example, that the
00:39:12
president has to get any emergency power reauthorized after 30 days and then it can only be a maximum of 90
00:39:19
days without Congress enacting a a renewal. And so, it requires actual congressional action to continue the
00:39:25
authority of that emergency power depending on what the Supreme Court does or doesn't do. I think it is going to
00:39:31
catalyze a legislative push and the Republicans are likely not going to embrace it this presidency or this term
00:39:37
because President Trump is in office. But I think the conversation that some, you know, out of the box Republicans
00:39:44
like Senator Paul and others are saying is, well, what's going to happen next time? What's going to happen when there's a Democrat president and we
00:39:50
don't AOC is going to emergency powers to do something you might not like, right? Is
00:39:55
that your point? Yeah. And so as it relates to both the AIPA of 1977, which is the act that this
00:40:01
case is about, but also the National Emergencies Act of 1976, should they go
00:40:06
back and pass a new law that basically forces the president to have to get congressional approval for any emergency
00:40:12
to last longer than 30 days? So I do think that's going to be the big debate that's going to come out of this. As it
00:40:18
relates to the tariff revenue, I am most worried about the fact that we use the
00:40:23
tariff revenue, as I said before, to offset spending and basically keep a baseline of spending without actually
00:40:29
getting ourselves to that deficit target. Right now, we are going to vaporize and create debt of $2 trillion
00:40:36
this fiscal year. So, we're using the the tariff revenue under the CDO scoring
00:40:44
to basically say, "Hey, we can do these tax cuts because it's offset." But the goal shouldn't be to offset. The goal
00:40:50
should be to get cuts to actually reduce the deficit. And so, that's the biggest concern I have with respect to the
00:40:55
tariffs long term is it's now a new revenue source that we don't actually treat as incremental to reduce deficit.
00:41:01
We just use it as a way to introduce new spending or continue spending. Sachs, just to um you know talk about the three
00:41:08
branches of government, wouldn't it also be an option for the president just to go to Congress with some of these
00:41:13
tariffs and say, "Hey, can I get these approved?" Would that be the worst thing in the world? Wouldn't they vote for it?
00:41:20
I mean, but yeah, things take time. Do you have concerns that President AOC might do some things with executive
00:41:26
powers that the Republican party might be opposed to if she winds up winning in 2028? That's an important question, Sax,
00:41:32
is if AOCC's president and then she uses her emergency authorization to do things that you disagree with, wouldn't the
00:41:38
Republicans then feel regret that they didn't pass one of these acts that limits emergency authorization and
00:41:44
power? Well, look, I I think that in general, when you have a policy that you want to last for a long time, the best thing to
00:41:51
do is to codify it into law because executive orders obviously only last
00:41:56
until the next president decides they don't want them anymore. So yeah, it may make sense after the administration
00:42:04
hopefully wins its case to seek to codify these things into law. We have a few years to do that, but I don't think
00:42:11
it makes sense to wait for Congress to act because they may never act. And in fact, it was President Trump who shifted the whole debate on this topic. I mean,
00:42:18
the whole establishment of both the Republican and Democrat parties were very against tariffs and it's pretty
00:42:24
obvious that nothing would have happened on this issue and he's completely moved the debate. So, this is just one where I
00:42:30
think he's acted unilaterally because he had to. But I think that once these
00:42:36
tariffs are in place for a few years, I don't think they're going to get pulled back by a future president because I
00:42:41
think they're going to it's too much money become quite popular. It's too much money. Okay. In the other cases, two more lower
00:42:47
courts have ruled against Trump. One said the deployment of the Marines and the National Guard were illegal. One said he can't freeze research funds for
00:42:54
Harvard. So, again, back to moving fast and breaking things. These cases are making their way through
00:43:01
the courts and there has been some resistance to sending in the National Guard which
00:43:08
is something there's been a bit of saber rattling chimoth about maybe going into Chicago next. What are your thoughts on
00:43:14
the National Guard issue? They should look here's the thing. Who is against safety and security?
00:43:22
Who and why? I don't understand. So if you
00:43:27
can't do your job, look, you have to remember Jason, let's take where we live in California, where you used to live.
00:43:34
Yep. Not anymore. 13% of our income goes towards state coffers
00:43:41
and then we pay real estate taxes and all of the stuff that goes to local municipalities. What are you doing with
00:43:46
that money if you're not making the places we live safe? And then the second thing would be making the schools good.
00:43:52
And so if you can't do it, if you can't do it, of course somebody else should
00:43:57
step in. And frankly, what I have heard consistently is even though the talking point has to be, "Oh my god, woe is me.
00:44:03
We can do the job." Everybody behind the scenes like, "Oh, thank God they're here." Anybody who is being impacted by crime would like to see the National
00:44:10
Guard come in and remove encampments or drug dealers or get drugs off the streets. Saxs, you know, you're a um my
00:44:19
perception would be that you think that there should be separations between the executive branch and uh maybe the states
00:44:26
and that this rule breaking of sending in the national guard that would go against the rules of the sovereignty of
00:44:31
the states. So, putting aside Chamat's point, which is completely valid, that they haven't done a good job here and it
00:44:38
it is illegal as the judges are pointing out, do you have concerns about that? Okay. Well, first of all, I reject this
00:44:44
characterization that it's the Trump administration that's moved fast and breaking things. If you recall
00:44:50
fast, let's just say moving fast. Well, I think the president is taking swift executive actions that are popular. And you see this actually in
00:44:58
his poll ratings. He got the highest approval rating he's ever had just in the last week. And a big part of it is
00:45:04
because of the reduction in crime in DC. I think he got to 55% approval on poll rating. And even in DC, by the way, the
00:45:11
mayor and her staff have said all sorts of positive things about the help they've received now from the National
00:45:17
Guard and from the federal government. And the citizens are extremely happy. Crime is down. I think we had the first
00:45:24
two weeks where there was no murders in the capital in a long time. The residents are very happy. So, this is
00:45:29
definitely working. Now, with respect to California, let me just point out that
00:45:35
the National Guard wasn't called in specifically to enforce laws on the street. What happened was that you had
00:45:42
ICE and Homeland Security agents and workers were doing their job and they
00:45:48
were conducting some deportations and then you had protests turn into riots
00:45:53
and those protesters were threatening to burn down their headquarters and that's why the National Guard had to be sent
00:45:59
in. So, it wasn't the Trump administration breaking things. It was riers who were breaking things. I can't
00:46:05
understand for the life of me why the administration wouldn't be able to send in the National Guard to protect federal
00:46:11
workers against riers, but apparently that's the case. So, look, I think the court reached a very specific decision
00:46:17
about what happened in California. We still haven't had a case adjudicating the question of whether the proposed
00:46:24
interventions in in these blue states to clean up crime will be allowed over the objections of Democrat governors. We
00:46:30
don't know. I think it's pretty clear that the DC intervention will be allowed and it's
00:46:36
extremely popular. And look, the DC one he's legally allowed to do. So yeah, he's got he's got his what was it? A 30-day mandate. He can take it
00:46:42
over. And so here's your popularity from the economist. It is ticking up, but um
00:46:49
Trump uh and the country still seems pretty divided. 41% approved, 55% disapproved, 3% unsure, but he has moved
00:46:56
up significantly in the last week. Today, some big news came out Friday with the uh soft jobs report. Pretty
00:47:02
much bad across the board. Jobs came in super light, 22,000 added versus 75,000 expected. Most of the gains came from
00:47:10
part-time jobs. US lost 357 full-time jobs while gaining 597,000 part-time
00:47:15
jobs last month. And uh this is after a bunch of revisions. You guys remember we
00:47:21
talked about here a couple of times with these revisions. And we'll show up some uh charts with long-term revisions. July
00:47:28
revised up slightly by 6K, 73,000 to 79. In June was revised down significantly.
00:47:35
Remember that impacted the market by 27,000. This makes June the first month with a net loss of jobs since July of
00:47:41
2021. So there's an account on XCOV letter and they did this uh revisions chart. It's
00:47:48
pretty crazy as you can see. May and June revisions were in the six
00:47:54
figures and they're constantly revising these down it seems. All right. Uh free
00:47:59
break had some internet connectivity issues apparently. But Shimoth, let's talk about the revisions here and the
00:48:05
softness in the job market concerning. Did maybe the Fed take too long to uh
00:48:11
get towards cuts in September? Uh what what is what's your read on this and the
00:48:16
endless revisions? Look, I think that I've said this yes last week, I think, right? So I'll just
00:48:22
say it again this week. You can't run the most sophisticated economy in the
00:48:27
world if you have data that is completely unreliable in either direction.
00:48:34
And so the problem with this jobs report is there are already two competing
00:48:40
versions of the truth. One group of people are trying to paint the jobs report as
00:48:47
everything is working. There's nothing to see here. Another group of people are saying, "Oh, well, hold on. there's a
00:48:52
birth stats number where if you extract that out the jobs numbers is actually
00:48:59
negative. I don't know which one is actually better in terms of
00:49:05
where we want to be right now going into a rate cut cycle. So my general commentary is the following. The BLS
00:49:14
and their approach is incredibly brittle. It doesn't work.
00:49:20
I think commerce has taken the first right step which is to start publishing
00:49:25
useful economic data into the blockchain. I think we need to figure out a way and
00:49:30
this is where Congress should get their act together and pass an incentive or a
00:49:35
requirement for certain parts of the critical economic infrastructure of America to report their data in an
00:49:42
anonymized way into a broad set of blockchains. And the reason is that you will have
00:49:49
very astute and precise pricing oracles help distill that information. So if
00:49:56
you're ADP, if you're American Express, if you're Stripe, there's an imperative
00:50:01
now for you to contribute the information you have into a broad collection of information so that we
00:50:06
have an accurate sense of what the hell is actually going on. Because I can't react to this number because I don't
00:50:12
know how it's going to change. It could literally swing by 200,000 in either direction. Jason, this is a I think a really good point.
00:50:18
Here's some research. I had my uh put one of my researchers at launch on this. Here's 2021
00:50:24
and the initial reading first revision and we did this for the year sach. So, as you can see in 2021, they missed it
00:50:30
by 1.9 million uh which was about 15%. 2022 they miraculously nailed it. 2023
00:50:37
they were off by 10%. 2024 it looks like they were off again by 10%. All this is
00:50:44
revising down by the way. in the first half of this year. Let me just finish the chart. First half of this year,
00:50:50
initial reading 985, first revision 732, second revision 497. So they were off by
00:50:55
50% so far this year alone. This chart is itself inaccurate. The
00:51:01
table is and and it's because it's coming from the same people that measured. So you're asking the people that measured to grade
00:51:07
themselves and I suspect that the answer is actually much worse than all of this.
00:51:14
Now, what is the implication of it? The implication of it is if you take the most positive view possible, it's that
00:51:20
the people that then control the levers of the economy don't actually have accurate data. So, they'll be hesitant
00:51:25
to act until the data is overwhelming. The most important lens of that will be
00:51:30
the Fed and what they do with rates. And so, everybody's like, "Oh, wow. There's a 99% chance of a 25 basis point cut."
00:51:38
That may be wildly wildly wildly conservative in terms of the the total amount that they need to be thinking
00:51:44
about and how they should phase that in. But how would I actually prove that to you? I can point to a whole litany of
00:51:51
private data, but the problem is the federal actors use public data and this data is not
00:51:58
useful. And I think that when you get private data into your hands, which I know that
00:52:06
other folks have, hedge funds, banks, the White House, what they see is
00:52:13
different than what the Fed sees. So what I would
00:52:19
tell you from this jobs report is it's going to start again this clamor of what
00:52:24
is your plan? Clapping is not a strategy. So a 25 basis point cut to a $32 trillion
00:52:33
economy is not a strategy. And I think that the reason they don't know what to
00:52:38
do exactly is because they have extremely faulty data. Again, this is not I'm I'm not taking a position on
00:52:44
this or framing it as if I'm taking a position. I'm just reporting the data here as they've reported it. So I'm I'm
00:52:50
just doing that here just to be clear here that I'm not endorsing any side of this. I'm an independent. I'm a
00:52:55
moderate. I'm just giving you the data as it stands. Here's the Fred chart just so we can zoom out and see unemployment
00:53:01
since the 50s. We're still at historic lows and there's a slight uptick 4.3%
00:53:06
which is the highest unemployment since 2021 but it's absurdly low historically.
00:53:11
So even we're looking historically sachs we're still at very low but do you have concerns that the economy could be
00:53:18
slowing and that we could have a jobs issue? That I guess is the question that is filling the airwaves on CNBC and that
00:53:25
everybody's talking about in group chats. Are we uh maybe didn't make the Fed cuts in time for what clearly is
00:53:32
some amount of slowing? Now, we could argue over if they're getting the data right or not. The Fed says they look at all data, not just this data. They say
00:53:39
they look at the private data as well. But what are your thoughts here, Sachs? Well, we had 22,000 jobs added in
00:53:46
August. And yet, while the number of jobs went up, unemployment rose, like you said, from 4.2 to 4.3%.
00:53:53
Which is a little bit of a contradiction, but that happened because more people started looking for jobs.
00:53:59
Yeah. But there are huge error bars around this data. Like Jamal said, I mean, like you showed, there's roughly 50%
00:54:06
revisions to all of this data over time over the course of a year. So, we don't
00:54:12
really have great visibility in what's going on. And that's why you see such huge disparities in how people are
00:54:17
interpreting this data. So if you want to look at some of the people who are pessimistic, you've got coobe letter,
00:54:23
but they're pessimistic about everything. You've got Moody's economist Mark Xandandy. He says we're on the
00:54:28
precipice of a recession and he has a bunch of reasons why. But then if you look at Poly Market, people on Poly
00:54:34
Market are strongly betting against a recession this year. I think the number is at about 8%. So, it appears that most
00:54:42
people still feel like the economy is doing well. And remember, we just had a 3.3%
00:54:47
GDP growth rate for Q2. So, I I'd be surprised if if there's a recession. I
00:54:53
think there's a lot of factors against it. I guess I would also note that if there's any weakness in the job numbers,
00:54:59
it's coming from foreignb born workers more than native born workers. Around 2 million more Americanborn workers have
00:55:07
jobs in 2025 so far. And I think meanwhile about a million foreignb born
00:55:14
workers roughly have lost jobs. So the net increase is about a million. But what you're seeing is a repatriation in
00:55:21
a way of jobs within the economy. The other thing that's happening is a
00:55:27
reprivatization of the economy. So in August the federal government shed about 15,000 jobs and there's been 100,000
00:55:34
federal jobs lost over the course of the whole year. So that makes the overall
00:55:40
numbers look worse than they are. But I a lot of us would argue that having fewer federal workers is a good thing for the economy. So you've got those
00:55:46
factors. Then you've got blue collar real wages are rising the second fastest
00:55:51
in history. You had 3.7% wage growth this year versus 2.7% average inflation.
00:55:57
So you have a net 1% wage growth during most of the Biden presidency. It was negative.
00:56:04
And then I would also point to I think several factors which would make me optimistic about the economy moving
00:56:11
ahead. You've had massive investment in the US by both private companies and foreign governments. You know, according
00:56:17
to these new trade deals, I think roughly $8 trillion of new investment. You've got this AI boom you're seeing.
00:56:23
And that's going to land over the next year, right? That hasn't actually been dumped in. So we should see that in
00:56:29
2027, maybe late 2026. Yeah. Yeah. This is the outlook for 2026 and
00:56:34
beyond. I mean, this would be the bull case is number one, $8 trillion of of new investment in the US economy by
00:56:40
private companies and by foreign governments. Number two, the AI boom. You've got this massive buildout of data
00:56:46
centers and AI infrastructure underway. And that includes energy and the manufacturing sectors are going to boom
00:56:52
alongside tech. Number three, this has been the most affordable summer at the pump since 2021,
00:56:59
and low gas prices don't seem to be going anywhere anytime soon. So, lowest gas prices since 2021. Number four, you
00:57:06
have these huge new tax incentives for business expansion. You've got the accelerated depreciation on equipment
00:57:12
purchases, on R&D. I think those are going to kick in once the big beautiful bill goes into effect. And then the last
00:57:19
thing I would say is that interest rate cuts are coming. I would say that now in light of the latest jobs report, Pal
00:57:26
should really cut 50 basis points. I doubt he will in September 25.
00:57:31
Yeah, I doubt he will. It's probably be 25 and then hopefully another 25. But I think you can make the case that they
00:57:36
should do 50 now and then 25 after that. But regardless of what it is, I think that most people think interest rates
00:57:42
are coming and that's going to juice the economy and further improve our fiscal position. So look for 26, I think
00:57:48
there's a lot of bullish factors here. All right, just before we wrap here,
00:57:53
Google, uh, as we know, was found liable in this antitrust case, but the sanctions seem to not be as harsh as
00:58:02
people thought they would be. Judge Meta rejected the request that Google have to
00:58:09
spin off Chrome, Android, and pointed out that Google is uh having
00:58:15
massive competition. So we had four years of Lena Khan, you know, in these aggressive cases. There were there were
00:58:21
tactical things we talked about here like uh dark patterns, etc. that we all agreed with. I think there was consensus
00:58:26
there, but this one we found a little confusing because gosh, Google's under so much pressure. What are your thoughts
00:58:32
on I thought this was excellent. Unpack it all. Essentially, the crux of
00:58:40
the ruling was look, there are some restrictions that Google has to live by. don't get me wrong, but the most
00:58:46
punitive remedies that were suggested were thrown out. And the reason they were thrown out was because the judge
00:58:52
very eloquently cited competition in a fair and free and open market. And that
00:58:59
is incredibly refreshing because the real question is would this judge have had the wherewithal and the courage to
00:59:05
actually be able to rule this way a few years ago when there would have
00:59:11
been an enormous amount of political pressure. They probably would have found a way to to run this case in a in a
00:59:17
different place etc etc. But now what you saw was just very simple logic
00:59:22
intervene. And at the core of it was, you know, when we started this lawsuit, things like OpenAI and Chat GPT didn't
00:59:29
exist. And when you fast forward, it's incredibly fastm moving. We are reallocating hundreds of millions or
00:59:35
billions of users intentions. As a byproduct, we're reallocating tens of
00:59:41
maybe hundreds of billions of dollars of revenue. And so the judge said the most severe remedies aren't necessary because
00:59:47
the free market is doing its job. Yes. So I I just think that's incredibly refreshing because we forget
00:59:53
that if the market is left to deal with these issues on its own, they do a very
00:59:59
good job of cleaning things up. And it's because as you said earlier, Jason, consumers want creative destruction.
01:00:06
They want the next best thing. They want to be better prices better services. It's it happens by the free market. They're
01:00:11
willing they're willing to reward better companies and better products. So I think the the great news for Google is
01:00:16
that this takes an enormous risk off the table. And now I think that
01:00:24
they probably have even more ambition and energy to just go for it and try to compete because they're not
01:00:30
going to be worried about everybody on the outside and probably some percentage of employees on the inside who are
01:00:36
always trying to slow things down. Yeah. and and it out correctly and I'll let you comment on this Sachs is that
01:00:43
they did get some tactical, you know, penalties here. Uh, and they
01:00:48
make sense doing deals that are exclusive when you are a Monopoly
01:00:53
player, like getting Firefox and Apple to only do an exclusive deal with you.
01:01:00
They're not going to be allowed to do that. And man, that would change the game on the field if somebody like Duck.Go or Bing or a new entrant,
01:01:07
Proplexity, whoever who's doing search would be able to say to Apple, we will outbid Google for 10% of the searches.
01:01:13
We'd like to buy 5% of the searches from the Safari browser going to Firefox and saying, "Hey, we'd like to one up and
01:01:20
we'd like some percentage of that." So, that seemed like a good part of the ruling. Your thoughts overall about this? So on this podcast, I think it was
01:01:28
two or three years ago when this case first came up. I think I took the position that Google Street broken up
01:01:33
into two or three companies because I thought it was this invulnerable monopoly and I don't think monopolies
01:01:38
are great for the SAR ecosystem. And what I mean by that is they had the Google search monopoly and that YouTube
01:01:45
business which is basically a monopoly and so forth and so on. So, I I was in favor of breaking this up, but I've got to admit I was wrong about that for the
01:01:52
reasons that the judge said, which is Google for the first time in a long while, is existentially threatened by
01:01:59
what's happened with AI. I mean, their cash cow, the core of their business is search, and people are starting to
01:02:04
substitute in droves from traditional Google search, which they own, or
01:02:10
keyword search, where they have this monopoly or dominant share to AI. And if
01:02:16
you look at AI revenue, I think something like 90% of it is going to
01:02:22
open AI. I mean, they have the dominant position among consumers for now for now. And there's, let's say,
01:02:29
five major AI companies that are hot on their heels and very competitive and performing equally if not better on
01:02:35
performance benchmarks. So the point is just I think everyone can now see that
01:02:40
the search business is either going away or transforming into something else which is it's basically merging with the
01:02:47
it's called AI chatbot business. It's an answers business now. It's not a like give me links. It's just give me
01:02:53
the damn answer, right? And we've been talking about this for a while where it's so obvious that
01:02:58
having AI just give you the answer is better than 20 blue links. especially as
01:03:03
the quality improves and it gets better at synthesizing those 20 blue links into the exact right answer and the speed
01:03:10
improves. One of the things that Google's really good at is just fast responses. You they've always shown you in milliseconds how long it takes to
01:03:17
give you the search result. And obviously if you're looking for something quick and an AI chatbot's
01:03:22
going to take 30 seconds, you're going to go with Google. But that's going to get better, too. So I think Google is
01:03:28
kind of in the fight of its life right now. And I think this is why Sergey's come back. You know, we saw him at the
01:03:34
at the dinner at the White House yesterday and he said he's very involved in Google Deep Mind. He's going to the office all the time.
01:03:40
Yeah. Right. And so you're seeing that founder involvement again because they know that they've got a real existential threat to
01:03:46
their business. And this is the argument that opponents of strong antitrust
01:03:52
enforcement have always made, which is that the free market will eventually break up, even the strongest monopolies,
01:03:58
if you just give it the chance to do it. And that's what appears to be in motion right now. By the way, I'm not saying
01:04:04
that Google's going to get destroyed. I'm not saying it's going away. I'm just saying that they have to pivot here in a
01:04:10
big way. their business is being disrupted and they suddenly have competition I think in their core
01:04:15
business like they've never had before. So I do think that we don't need to bring the hammer down on them in the
01:04:22
same way that maybe we did a few years ago. I still would not let them pursue anti-competitive tactics against say
01:04:29
applications in the Android store where they basically have a duopoly. So I'm not saying I would let them do anything
01:04:35
but I certainly agree with this judge that we don't need to break up that company right now. Yeah. Yeah. And there's there's rules in
01:04:41
the field that need to be adjudicated. So having a very simple approach with
01:04:46
the FTC of saying, "Hey, these exclusive deals when you have 90% market share, that's not allowable. But you can
01:04:52
compete and you can fight versus the five new entrance and uh have at it and and give consumers a better product at a
01:04:59
cheaper price." That's really the goal of the FTC is to to have some basic rules of the field. We saw it in the
01:05:05
media business as well. We spend a decade or two trying to fight the consolidation of media companies and
01:05:11
then Netflix has trounced them all and YouTube as well in terms of viewership.
01:05:16
Netflix and YouTube are crushing the cable monopolies that we spend all this time trying to regulate. All right
01:05:22
everybody, there's your episode. We have to get back to work and get to Los Angeles for the amazing fourth edition
01:05:29
of the Allin Summit. It's going to be amazing and all the great content including some surprise speakers that'll
01:05:36
be released over the next week or two after the event. So, you're going to get massive amounts of content. Make sure
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01:05:54
be a lot of fun. My guy TK and I, we might be doing a little back gammon uh tournament. All right, everybody. Thanks
01:06:01
for tuning in to the All-In podcast. We're finished. Bye-bye, besties. Love you. Love you guys.
01:06:07
Let your winners ride. [Music]
01:06:14
We open sourced it to the fans and they've just gone crazy with it. Love you.
01:06:21
[Music]
01:06:26
Besties are gone. That is my dog taking a notice in your driveway.
01:06:34
Oh man, my dasher will meet. We should all just get a room and just have like one big huge orgy cuz they're
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all just useless. It's like this like sexual tension that they just need to release somehow.
01:06:47
Wet your feet. We need to get merch.
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[Music]
01:07:00
I'm going all in.
