00:00:00
sex what essay were you writing last
00:00:01
night till 3: in the morning oh I was
00:00:02
blasting people on Twitter yesterday I
00:00:04
was collecting
00:00:07
scalps
00:00:08
SC I keep these receipts of people who
00:00:11
attack me on Ukraine and then like six
00:00:14
months later you know they'll write a
00:00:16
tweet admitting they were wrong I'll rub
00:00:18
it in their face you have a little
00:00:19
Google doc and you just go BK I just
00:00:22
bookmark
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them you have like your Kill Bill list
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yeah you are so petty oh my God I love
00:00:29
it I mean I love that about you some
00:00:31
would say that's a good defense
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mechanism right this way yeah they got
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to know they're not going to take any
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free shots because if they do and then
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you know invariably I I'm proven correct
00:00:42
then uh you're gonna clap back I'm gonna
00:00:45
smack them very trumping isn't it yeah
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it's a very hard burden for you to carry
00:00:50
just being right all the time I respect
00:00:53
the way you do it with such Grace and
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magn let your
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ride Rainman
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David and in said we open sources to the
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fans and they've just gone
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[Music]
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crazy all right welcome back to the all
00:01:16
in pod really excited to have a guest
00:01:18
with us today Jared Kushner I'm sure
00:01:21
everyone knows who he is we obviously
00:01:22
talked about Jared's interview with Lex
00:01:24
fredman on the Pod a couple of weeks ago
00:01:27
and what happened chamat you DM Jared
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started chatting and said hey would you
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be interested in coming to talk with us
00:01:34
yeah about these matters jar very you
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know kindly agreed to do it so we're
00:01:37
really excited to uh have Jared join us
00:01:40
today Jared welcome thank you for having
00:01:42
me so I don't think you need much of an
00:01:44
introduction obviously you were a senior
00:01:46
adviser to uh president Trump from 2017
00:01:48
to
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2021 and uh you worked on the US Mexico
00:01:53
relationship as well as led the Middle
00:01:55
East peace efforts which I think is
00:01:57
going to make up the bulk of what we're
00:01:58
excited to talk about today uh just
00:02:02
really briefly since leaving um office
00:02:07
you've been investing running a firm
00:02:09
called Affinity Partners is that right
00:02:10
um maybe you can share with us just a
00:02:12
little bit about what you've been up to
00:02:13
and then we'll you know kind of get into
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it here perfect Affinity Partners is a
00:02:17
private Equity Firm that I started when
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we left doing growth investing private
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Equity investing globally we raised just
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over 3.1 billion uh doing a lot of
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Investments trying to uh bring Gulf
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money into Israel into the us trying to
00:02:29
figure out how through uh Investments
00:02:31
you could bring countries closer
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together people closer together uh
00:02:35
looking at a lot of areas where there's
00:02:36
uh structural transitions happening at
00:02:39
large in the global economy whether it's
00:02:41
near Shoring from offline to online uh
00:02:43
you know software a lot of uh different
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interesting areas a lot in the the
00:02:46
fintech space and financial services
00:02:48
right now uh but you know enjoying it
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and the goal is really to bring the
00:02:53
experience that we had from the
00:02:54
previously being an investor and um then
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the time in government and then thinking
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through how you could use those macro
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learnings and connections and
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relationships uh and navigational skills
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to the investing side right so we're
00:03:08
going to try and talk later in the show
00:03:09
uh about macro markets a bit talk a
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little bit about some of the activity in
00:03:13
AI this week we think it's all pretty
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pressant and hopefully we can all
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dialogue about
00:03:18
that I think it'd be helpful when you
00:03:20
and I talked just to get ready for the
00:03:22
show today you mentioned that you had a
00:03:25
very liberal upbringing in the Upper
00:03:26
East Side New York and your perspective
00:03:28
began to shift as you started to travel
00:03:30
the country then you were in the Trump
00:03:32
White House and have become very active
00:03:35
since would love to hear a little bit
00:03:37
about how your perspective shifted in
00:03:39
the time you spent because you mentioned
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you started traveling the country and
00:03:41
seeing things that you otherwise hadn't
00:03:42
seen living in the Upper East Side would
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love to hear that part of your story
00:03:46
before we kind of get into things if you
00:03:48
wouldn't mind Sharon yeah sure so one
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thing about my life is that nothing has
00:03:53
gone according to the plan I grew up in
00:03:55
uh New Jersey uh really nice place in
00:03:57
Livingston uh my father was an
00:03:59
entrepreneur or in the real estate
00:04:00
business banking Insurance did a lot of
00:04:02
different things uh really brought up uh
00:04:04
me and my siblings to be focused on
00:04:06
business and it really for us was a uh
00:04:09
good experience growing up uh obviously
00:04:11
went to uh Harvard and then after that
00:04:13
chose to go to uh law school and
00:04:15
Business School uh where I was at NYU
00:04:18
during that time my my father had a
00:04:19
legal issue and I was forced to take
00:04:21
over the business um and so I got into
00:04:23
the real estate business and then after
00:04:25
that uh bought a media company in New
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York and that's really where I got
00:04:28
exposured to a lot of of what I would
00:04:30
call New York Society um my wife and I
00:04:33
uh we met got married and uh through
00:04:35
that experience thought we had a very
00:04:37
expanded worldview uh at our house in
00:04:39
the upper side we' have dinner parties
00:04:40
we'd have heads of Banks and hedge funds
00:04:42
and technology companies and fashion and
00:04:45
um and then it was just you know really
00:04:47
nice life and then her father announced
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she was running for office and that was
00:04:51
an interesting experience for us as
00:04:53
Republican we didn't know too many
00:04:55
Republicans um were you register
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Democrat prior uh I was registered
00:05:00
Democrat going up uh my father was a big
00:05:02
Democrat donor we were we'd have in our
00:05:04
house whether it be you know Chuck
00:05:05
Schumer Hillary Clinton I think my
00:05:07
father gave uh Cory Booker his first
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campaign donation so I know Corey since
00:05:10
I'm 15 years old uh so really grew up
00:05:13
around Democrat politics uh all of our
00:05:15
life but over time I I think during the
00:05:17
Obama years I I changed my registration
00:05:19
to an independent I didn't feel uh like
00:05:22
the Democrat Party was fully
00:05:23
representing my my viewpoint so I felt
00:05:25
more independent minded and then um
00:05:28
during the time with u my father-in-law
00:05:30
when he was running uh for office uh he
00:05:32
invited me to go with him to a rally in
00:05:33
Springfield Illinois we flew out there I
00:05:35
got off the plane and um you know we we
00:05:38
pull up to an arena and the guy comes up
00:05:39
to Trump and says uh congratulations sir
00:05:42
you just broke the record for the arena
00:05:43
for attendance uh and he says well well
00:05:45
who had the who had the record before
00:05:47
and he says well was Elton John 36 years
00:05:49
earlier and he says Jared look I don't
00:05:51
even have a guitar or a piano this is
00:05:53
impressive you know so you know he gets
00:05:55
up on stage and and um Without Really
00:05:57
notes you know riffs for over an hour
00:05:59
and it was interesting for me because I
00:06:01
was watching you know CNN and the New
00:06:02
York Times and all my friends the media
00:06:04
basically were describing his rallies as
00:06:06
almost like KKK conventions but I walked
00:06:09
around the crowd nobody knew who I was
00:06:10
then and what I saw was that these were
00:06:12
just you know they were people were old
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young male female white minority and um
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and uh and it was just people who were
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hardworking Americans who who you know
00:06:23
really felt like Trump was giving them a
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voice and what was interesting to me was
00:06:26
a couple weeks earlier we'd been at uh
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the Rob Hood Foundation which is the big
00:06:31
uh philanthropy in New York where a lot
00:06:32
of the hedge fund managers uh support I
00:06:34
remember the chairman of Robin Hood
00:06:36
getting up and saying you know if we
00:06:38
want to save uh you know the Next
00:06:39
Generation we want to save uh the kids
00:06:41
in the inner cities uh we have to uh we
00:06:44
have to support Common Core that's the
00:06:45
way that we can save people and I
00:06:47
remember Trump gets up there and he says
00:06:49
uh you know if we want to save education
00:06:51
we have to end Common Core and send it
00:06:53
to the states I'm saying wait I thought
00:06:54
I thought commic Corp was this great
00:06:56
thing and but why are all these people
00:06:58
against it and so it really just kind of
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pequ my interest and made me realize
00:07:02
that maybe my aperture was was way
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smaller um way more closed that than I
00:07:07
thought it was and it really led me to
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to to seek out a lot of people who had
00:07:11
differing points of view than the people
00:07:13
I'd been around before I really opened
00:07:15
my aperture explored a lot and over the
00:07:18
years I really got the chance to meet
00:07:19
with people from both sides so you know
00:07:21
I have a lot of friends who are
00:07:22
independent friends who are liberal
00:07:24
friends who are very Republican and uh
00:07:27
you know my personal view was I thought
00:07:28
of myself more as a pragmatist
00:07:30
fact-based and data driven and based on
00:07:33
that I tried to pursue uh the different
00:07:36
policies that I thought made the most
00:07:37
sense uh in as unemotional a way as
00:07:39
possible how did you figure out that
00:07:42
that moment in Springfield could
00:07:44
translate all throughout the country
00:07:45
like was there a process that you guys
00:07:47
went through to validate like hold on is
00:07:49
this just a moment in time or is this
00:07:50
just a specific area or what is how did
00:07:54
you guys get to the ground truth of what
00:07:56
the
00:07:57
scalable marketable candidate look like
00:08:00
because I'm sure that was part of the
00:08:01
calculus in what you did because it I
00:08:03
think the to your point maybe the
00:08:06
media's perspective was hold on a second
00:08:08
this this guy is riffing but it clearly
00:08:11
went very quickly from riffing to a
00:08:12
methodical plan and I don't think that
00:08:15
that's ever really been talked about do
00:08:17
you want to just tell us a little bit
00:08:18
about that sure well I would say it was
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less planned and way more
00:08:22
entrepreneurial and and I say
00:08:23
entrepreneurial in in two different
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senses you know one is the campaign was
00:08:27
one was run incredibly entrepreneurially
00:08:30
people were told that if you work for
00:08:31
Trump you'll never get a job in
00:08:33
Washington again which is why he really
00:08:35
wasn't able to hire a lot of people
00:08:36
initially and why a lot of the
00:08:37
responsibility for the campaign fell to
00:08:39
people like myself who uh really just
00:08:41
cared about him personally and wanted to
00:08:43
make sure that he was able to do a
00:08:44
competent job uh with the operations of
00:08:46
a campaign that led to us doing a lot of
00:08:49
things in an untraditional way but we
00:08:50
actually were able to make the dollars
00:08:52
go a lot further whether was building a
00:08:53
data operation or how we targeted
00:08:55
advertisers or how we um you know did
00:08:57
our events we were able to just do it a
00:08:59
much different way but from a viability
00:09:01
of the candidate perspective I really
00:09:03
give all the credit to him because what
00:09:05
I saw with politicians is a lot of
00:09:06
politicians will take polls and then
00:09:09
moderate their perspectives uh this is
00:09:11
somebody who without pollsters and
00:09:12
without any political experience um
00:09:15
really put forward a lot of points of
00:09:16
view and and keep in mind in a
00:09:18
Republican primary a lot of his
00:09:19
viewpoints on trade were very
00:09:21
heterodoxical they were they were not
00:09:23
what was conventionally thought of and
00:09:25
what I saw with Trump was that he was
00:09:26
able to move the polls to him and that
00:09:29
was a that was a talent and just a skill
00:09:31
of persuasion uh and his willingness to
00:09:33
kind of stick to the issues I mean at
00:09:35
that point in time I remember seeing
00:09:36
polls that illegal immigration was not
00:09:38
like a top five issue when he started
00:09:40
the campaign and by you know the middle
00:09:42
the end of the campaign people were
00:09:43
really seeing uh the craziness that was
00:09:45
happening at the southern border and why
00:09:47
that was uh critical to our national
00:09:49
security and so um I think that for him
00:09:51
he found a lot of his message and with
00:09:53
him he was not a perfectly uh always on
00:09:56
message candidate but what he did do was
00:09:57
he was constantly evolving and learning
00:09:59
and you know and would learn from the
00:10:01
different things that happened and
00:10:03
constantly evolving to uh find ways to
00:10:05
to persist amazing like a startup
00:10:08
finding a product Market fit yeah what's
00:10:11
he like as a father-in-law I'm curious
00:10:13
uh as a father-in-law he's been great
00:10:15
you know that obviously brought us a lot
00:10:16
closer together you know until that time
00:10:18
our time was mostly either playing golf
00:10:20
together or we'd be together at family
00:10:22
events uh working together was uh was
00:10:25
was a different element of our
00:10:26
relationship but I think one of the
00:10:28
benefits I had with him was that he knew
00:10:30
I was always going to tell him the truth
00:10:31
uh whether I agreed with him or not I
00:10:33
also I think one of the things he liked
00:10:36
about me was that I I was not obviously
00:10:39
worked hard I gave him straight answers
00:10:40
and I didn't aine on things where I
00:10:42
didn't feel like I had an expertise so
00:10:44
if you would ask me a question um and I
00:10:46
didn't feel like I knew the answer I
00:10:47
would say well this is not my expertise
00:10:48
these are the people who I would
00:10:49
recommend i' speak to to get perspective
00:10:51
and let me bring you their their
00:10:53
opinions and so I think he saw me as
00:10:55
somebody who was who was competent
00:10:57
obviously had his best interest at heart
00:10:59
um again I wasn't accepting money for
00:11:00
any of these jobs so it wasn't doing it
00:11:02
for for financial gain um and I just
00:11:04
started to really believe in a lot of
00:11:06
the policies that he was pushing and
00:11:08
wanted to help him maybe translate it
00:11:09
from a a campaign speech to kind of
00:11:11
technical policy and then see once he
00:11:14
got the opportunity uh to help him
00:11:15
implement it as well that's really cool
00:11:17
why did you agree to do Lex and why are
00:11:19
you doing the show today we were kind of
00:11:21
surprised to see you on Lex and
00:11:23
obviously like Le said it was a very
00:11:26
different conversation than I think any
00:11:28
of us would have expected having the
00:11:31
only exposure to you being through you
00:11:33
know some sort of media channels what's
00:11:35
motivating you to kind of do this today
00:11:37
before we get into it so Lex um again
00:11:40
him my wife are friends and I I I really
00:11:42
follow and and listen to what he does I
00:11:45
I think in society today the the news uh
00:11:48
it's kind of just one person's you know
00:11:50
point of view and and they're they're
00:11:52
they're picking and choosing and and
00:11:53
editing what they put into it one way or
00:11:55
the other but the medium of the podcast
00:11:57
is something that uh I my personal
00:11:59
consumption uh was growing with and and
00:12:01
I felt like it was a place where you
00:12:03
could have real conversations I think
00:12:05
the people who are listening to podcasts
00:12:06
are people who are looking to have a
00:12:09
more nuanced uh perspective on something
00:12:11
and and really want to you know try to
00:12:13
understand something deeper and uh I
00:12:15
respect Lex I all my private
00:12:16
conversations with him I I really
00:12:18
enjoyed um and I love that he was really
00:12:20
trying to um find perspectives from
00:12:25
people that maybe others didn't
00:12:28
understand to try to bring greater
00:12:30
understanding um across and so I agreed
00:12:33
to do it after a while I was really
00:12:34
really glad I did and uh based on the
00:12:36
the great feedback I got uh there uh my
00:12:39
sense is is that the podcast format is
00:12:41
is something that's um you could have a
00:12:43
real conversation you can go back and
00:12:45
forth you could argue you could disagree
00:12:47
um I think that that's where people
00:12:49
really want to get their information
00:12:50
from so I I turned down a lot of you
00:12:51
know cable news or different uh
00:12:53
interview requests um because I find
00:12:55
that you can't have as nuanced a
00:12:57
discussion and you know I wish things
00:12:58
were as simple as you know the black and
00:13:00
white are the political slogans that
00:13:01
people use but the reality is things are
00:13:03
a lot more nuanced so when shth reached
00:13:05
out I followed you guys and I've
00:13:07
listened to you for for some time I was
00:13:09
um I was really happy to come do it
00:13:11
awesome well thanks for doing it SX you
00:13:13
want to kick us off on the Gaza conflict
00:13:16
and framing up the present day sure
00:13:19
based on what I've read it seems like
00:13:22
Israel has now formed a perimeter around
00:13:25
uh Gaza City they've sort of bisected
00:13:28
Gaza between this North and uh South and
00:13:31
they've been trying to bomb entry or
00:13:33
exit points from the Hamas tunnel
00:13:35
Network and it seems like their strategy
00:13:38
is to kind of gradually close in on that
00:13:41
tunnel Network and basically try and
00:13:44
eliminate Hamas from from sort of this
00:13:47
northern part of Gaza and then one
00:13:48
assumes they'll move to the South and I
00:13:50
guess one other element to add to it is
00:13:52
that you know while Israel is doing that
00:13:56
you're seeing protests both in the West
00:13:59
and in the Arab or Muslim world you're
00:14:02
starting to see statements condemning
00:14:05
Israel by leaders of these other
00:14:08
countries in the region I'd say the one
00:14:10
by turkey by erdogan was notably harsh
00:14:13
and
00:14:14
threatening but you're starting to see
00:14:16
again as Israel proceeds with this
00:14:18
operation you're starting to see more
00:14:20
and more condemnation from various parts
00:14:22
of the International Community so let's
00:14:24
start with that is you know how do you
00:14:26
assess what's happening on the ground
00:14:27
what do you think the prospects for
00:14:29
Success are and how do you assess the
00:14:31
risk that this sort of escalates
00:14:34
horizontally in ways that are kind of
00:14:37
hard to predict and could spiral out of
00:14:39
control yeah so so there's a lot of
00:14:41
different ways you can go with that but
00:14:42
I'll start with kind of the first
00:14:44
question which is um in the immediate
00:14:47
aftermath of the attack my my biggest
00:14:49
concern was that Israel was clearly
00:14:52
caught off guard from an intelligence
00:14:53
and Military perspective with the attack
00:14:55
and the attacks
00:14:57
were they shook a lot of people they
00:14:59
were they were very very heinous Beyond
00:15:02
um really comprehension it's it's crazy
00:15:05
the more and more stuff that comes out
00:15:06
and we were seeing a lot of it in real
00:15:07
time thanks to you know the fact that
00:15:09
right now with X and what what elon's
00:15:11
done there to uh to not try to censor
00:15:13
things in the way that it was happening
00:15:15
before so we were all getting a lot of
00:15:17
information real time and it was really
00:15:18
pulling in a lot of people's
00:15:19
heartstrings my big fear initially was
00:15:21
that Israel would react uh emotionally
00:15:24
as opposed to uh to to pragmatically and
00:15:26
I think that uh the steps that they
00:15:28
taken since then have been uh very wise
00:15:31
I think the fact that they took their
00:15:32
time and have been very methodical about
00:15:34
getting their supply uh lines ready
00:15:36
about working how to Garner as much
00:15:39
international support I mean you have to
00:15:41
remember these weren't just Israeli
00:15:42
citizens that were killed these were
00:15:43
American citizens they were German
00:15:45
citizens they were Thai citizens uh they
00:15:47
were UK citizens and and the hostages as
00:15:49
well are not just Israeli citizens so I
00:15:52
think that Israel took its time to get
00:15:53
the military operation set I've seen
00:15:56
them go slowly methodically I mean Gaza
00:15:58
is a very very complicated place I mean
00:16:00
we studied it for four years we we we we
00:16:02
were very closely watching all the
00:16:04
different incursions and we managed toas
00:16:06
and and their uh their malicious
00:16:08
activities uh very very closely uh to
00:16:10
avoid situations like this and uh the
00:16:12
place is booby trapped like like crazy
00:16:14
and so I do think the fact that the
00:16:16
Israelis have taken their time and been
00:16:18
very methodical and have come up with a
00:16:20
strategy has given me more hope mean
00:16:22
every morning I I wake up and I look to
00:16:23
see you know praying there hasn't been
00:16:25
more casualties um in Israel and and the
00:16:29
hope is that they continue to do it in
00:16:30
the best way possible um so I think that
00:16:33
the goal for them is really the
00:16:34
elimination of Hamas I think that um you
00:16:37
know the the big point that I really
00:16:38
want to make in the Lex podcast which is
00:16:40
why I went back uh to to really do the
00:16:42
point was that um the people who are
00:16:45
protesting um in favor of the
00:16:48
Palestinians a lot of the Israelis and
00:16:50
Palestinians want the same thing which
00:16:52
is uh they want security for Israel and
00:16:54
a better life for the Palestinians and I
00:16:55
think what people have failed to really
00:16:57
grasp um for for a long time is that
00:16:59
Hamas has been the root cause of a lot
00:17:01
of the the the bad lives for the
00:17:03
Palestinians if you think about Gaza uh
00:17:05
before this recent before October 7th I
00:17:08
mean over half the population lived
00:17:09
under the poverty line um you know
00:17:11
people were were really trapped there
00:17:13
and people would blame Israel for the
00:17:15
blockade but what's also happened over
00:17:16
the last 30 days is a lot of the worst
00:17:18
fears that we had during the
00:17:20
administration or things that Israel
00:17:21
would be saying have totally been proven
00:17:23
true I mean you've seen now them going
00:17:25
to some of these School houses where
00:17:26
there's you know there's 500 or or 50
00:17:29
different you know rocket launchers um
00:17:31
you know in the school houses the
00:17:32
hospitals all the terrorists that
00:17:33
they've captured that they're
00:17:34
interrogating are saying well that's
00:17:36
where the military headquarters are you
00:17:38
know now we're learning about this um
00:17:40
this tunnel Network which they're saying
00:17:42
is hundreds of miles of of tunnels
00:17:43
underground well that's why you know
00:17:45
Israel wasn't allowing cement and a lot
00:17:47
of these these materials in the cement
00:17:49
that went in which was supposed to build
00:17:50
houses for for the people of Gaza was
00:17:52
then stolen by Hamas to to build these
00:17:55
tunnels the uh the pipes that went into
00:17:58
to fix the water were then taken and
00:17:59
turned into to Rockets the the fuel was
00:18:02
was was stolen and and not used for for
00:18:05
for the hospitals or for people to have
00:18:06
better lives it was stolen for them to
00:18:08
operate their tunnel Network and then to
00:18:10
fuel the Rockets so um It's a situation
00:18:12
that that really does have to be dealt
00:18:14
with again Israel you guys are I know
00:18:16
poker players so uh so Israel definitely
00:18:18
has the stronger you know hand to play
00:18:20
here so I think time is on the one hand
00:18:22
in their in their favor uh but on the
00:18:24
other hand obviously you know the
00:18:26
International Community has hisor Al
00:18:28
been very uh anti-israel and
00:18:30
anti-semitic in the way that they've
00:18:32
approached a lot of these uh these
00:18:33
skirmishes uh to date but I will say I
00:18:35
think there's been more International
00:18:37
support for Israel this time than I've
00:18:39
ever seen um and I do think that that's
00:18:41
a very important thing so that that's
00:18:43
maybe General if there were some of the
00:18:45
specific questions that you want to get
00:18:46
to in there I can what about the risk of
00:18:48
horizontal escalation let's just talk
00:18:49
about that for a second because you do
00:18:51
hear I think a growing chorus of
00:18:54
countries who are denouncing Israel
00:18:57
they're saying that that this is
00:18:58
collective punishment that the bombing
00:19:01
of Gaza is indiscriminate they want it
00:19:03
to stop there's genocide genocide yeah
00:19:06
I'm not saying I agree with that
00:19:08
rhetoric but you you do hear it you know
00:19:10
there's a effort at the UN to um to pass
00:19:13
the ceasefire resolution so there's a
00:19:15
lot of people who want the ceasefire and
00:19:17
there's a lot of inter growing
00:19:19
International pressure for that and then
00:19:21
you've heard threats from you know again
00:19:23
erdogan and turkey that if there's not a
00:19:25
ceasefire at some point they're going to
00:19:26
have to get involved they're going to
00:19:27
have to act
00:19:29
has said similar kinds of things
00:19:31
although I think it's pretty clear they
00:19:32
don't want to get involved they don't
00:19:34
want this to escalate in a into a wider
00:19:35
Regional War but they've sort of
00:19:37
intimated that if the bombing continues
00:19:41
that they might have to take action they
00:19:42
might feel pressure to do that so I
00:19:44
guess one question there is is time on
00:19:46
Israel's side it does seem
00:19:49
like again there's more pressure to stop
00:19:51
the military operation over
00:19:53
time as opposed to less yeah so so the
00:19:57
answer is everyone's talking their book
00:19:59
and that's what they should be doing
00:20:00
they're talking to their populations the
00:20:03
question is what people will actually do
00:20:04
I would say that you know the hardest
00:20:06
thing for us all is obviously you see
00:20:07
civilians in Gaza who are being used as
00:20:10
human Shields and the last thing that
00:20:12
anyone wants is for more civilian deaths
00:20:13
to occur uh it's funny this morning I
00:20:15
was speaking to a friend uh in Israel
00:20:17
who was telling me that yesterday there
00:20:19
was a a major evacuation of of uh
00:20:22
civilians in Gaza and uh a lot of people
00:20:25
are surprised that the Israeli Defense
00:20:26
Forces were basic putting themselves in
00:20:29
between the Hamas militants and the
00:20:31
gazen civilians to protect them and open
00:20:33
up a corridor and again one thing that
00:20:35
Israel's done I think a good job of is
00:20:37
getting out a lot of the facts about how
00:20:39
uh they've been warning the gazen
00:20:40
civilians to flee asking them to go and
00:20:43
U and what happened was Hamas was you
00:20:44
know shooting them down with snipers and
00:20:46
trying to prevent them from going
00:20:47
because they wanted them to stay in
00:20:49
place as human shields uh in in the
00:20:51
schools and the hospitals where they
00:20:52
were conducting their Terror activities
00:20:54
and so what was interesting to me was um
00:20:57
when my friend was telling me is
00:20:58
speaking to a friend of his who was a
00:21:00
soldier was that uh was that um is that
00:21:03
a lot of the civilians are really
00:21:04
thanking them for liberating them from
00:21:06
from Hamas and for risking their lives
00:21:08
to help them uh get out of Gaza and a
00:21:10
lot of these people again they've been
00:21:11
prisoners to Hamas more than anything
00:21:14
else for a long time and they want to
00:21:16
see themselves you know out of there so
00:21:17
that they can you know perhaps have a
00:21:19
better opportunity to live a better life
00:21:21
and so um so I think that the current
00:21:24
region I think the biggest immediate
00:21:25
threat is is from Hezbollah the north I
00:21:27
think that's been um I think Israel
00:21:30
going to full ready alert uh was a
00:21:32
really smart thing I think the us moving
00:21:34
uh the battle carriers there I think was
00:21:36
also good I think the uh the statements
00:21:38
from uh from the US administration were
00:21:41
strong upfront again whether people uh
00:21:43
believe that they'll they'll they'll
00:21:44
back up those statements is is another
00:21:46
thing because they do have a little bit
00:21:47
of a credibility deficit in the region
00:21:49
based on what they've done over the last
00:21:50
couple of years um but I think that's
00:21:53
all been very helpful in kind of
00:21:55
pushing um pushing Iran back and and and
00:21:58
and sending a strong message to
00:22:00
Hezbollah which is if you want to attack
00:22:02
Israel don't do it when they're at full
00:22:03
military Readiness Israel's a nuclear
00:22:05
power and I think everyone is starting
00:22:07
to realize that this has been Iran
00:22:09
trying to manipulate things and as long
00:22:11
as they think there's a threat that
00:22:13
you're not going to go after one of
00:22:14
their proxies but you may go after them
00:22:15
that's been the best way of keeping uh
00:22:17
deescalation I think with turkey and
00:22:19
others I I've spent you know many hours
00:22:21
with erdan uh personally talking about
00:22:23
Gaza and I know that you know he has a
00:22:25
big heart for the Palestinian people he
00:22:27
hates uh to see their suffering and it's
00:22:29
also good politics from him you know
00:22:30
he's also from a Muslim Brotherhood uh
00:22:33
you know leading party uh but I think
00:22:36
you know in his heart of heart he does
00:22:37
have to acknowledge that a lot of their
00:22:39
plight is is is led to by bad governance
00:22:41
um he may not want to admit it publicly
00:22:43
but the reality is is the best way to
00:22:45
improve the lives of the people of Gaza
00:22:47
is to eliminate Hamas and put in place a
00:22:50
structure where people can finally have
00:22:52
the opportunity to to live uh more
00:22:54
freely and and and make better lives for
00:22:56
themselves Jared you you said something
00:22:58
that I think is really interesting you
00:22:59
said erdogan has a soft spot for the
00:23:01
Palestinians can I just take that
00:23:02
concept and just can you explain the
00:23:05
historical context of Arabs the Arab
00:23:09
world and their relationship with the
00:23:10
Palestinians sort of because it's
00:23:12
definitely had its es and flows over the
00:23:14
Arc of history and so how do people
00:23:17
think about it as just broadly speaking
00:23:19
just in terms of like the big historical
00:23:22
arcs that have kind of shaped this
00:23:23
relationship between Arabs and and
00:23:25
Palestinians specifically well a that's
00:23:28
a question we could spend about three
00:23:29
days talking about but I'll try to give
00:23:31
you kind of a very quick uh version of
00:23:33
it so I think that you know a lot of
00:23:35
this goes back really to uh people say
00:23:38
it goes back to a lot of times but I I
00:23:40
think that the the we have to probably
00:23:42
go back to and I'll try to do this very
00:23:44
quick is is really in 1948 which was a
00:23:46
complicated time it's post Holocaust
00:23:48
post World War II um you know again the
00:23:51
Middle East really in the early 1900s
00:23:53
was a lot of was created by a lot of
00:23:55
arbitrary lines drawn by foreigners and
00:23:58
you had a situation where Israel uh is
00:24:00
is the UN puts forth the partition plan
00:24:02
Israel uh they're willing to recognize
00:24:04
Israel as a state for the Jewish
00:24:07
people and also give a state to the
00:24:09
Palestinians uh the Arabs reject that
00:24:11
and attack Israel and there's a whole
00:24:12
War during that war um it was flared up
00:24:15
really by uh General Nasser from Egypt
00:24:17
who at the time was the leader of the
00:24:18
Muslim world uh during that war um
00:24:20
Israel was able to defy the odds and win
00:24:23
and a lot of Palestinians were either
00:24:25
forced from their homes or displac from
00:24:26
their homes you know there's there's
00:24:27
versions where they say the Arabs said
00:24:29
leave your homes and then um you know
00:24:31
when the war is over you're going to
00:24:31
come back and take take everything uh
00:24:34
some Arabs uh stayed in their homes and
00:24:35
actually today they're Israeli citizens
00:24:37
with full you know equal rights as as
00:24:39
other Israelis um and so so that
00:24:41
happened um then in 1967 uh that's when
00:24:45
Egypt attacked again and during that war
00:24:47
again Israel miraculously won and um and
00:24:51
that was really kind of the the time
00:24:52
where um Israel was able to expand their
00:24:55
territory they took over the West Bank
00:24:57
at the time which wasn't didn't belong
00:24:58
to the Palestinians as much as it
00:25:00
belonged to Jordan it was part of trans
00:25:01
Jordan at the time and then they also
00:25:03
gained control of the Gaza Strip which
00:25:05
also uh was previously uh administered
00:25:08
by Egypt although when Egypt was
00:25:09
administering it they didn't take it as
00:25:11
their territory they never granted
00:25:13
citizenship to the people who were there
00:25:14
so between 1948 and 1967 when The Six
00:25:18
Day War occurred um most of the leaders
00:25:21
in the Arab world enjoyed uh leaving
00:25:23
this issue out it was a great way to
00:25:24
stoke nationalism and to uh it was a
00:25:27
very easy political issue for them to
00:25:28
have to say well we need to do this and
00:25:30
you know to to to fight for the
00:25:32
Palestinian people so in a lot of ways
00:25:33
there was a way to deflect from their
00:25:34
shortcomings at home and to justify
00:25:37
certain actions they were taking because
00:25:38
they were fighting for this uh this
00:25:40
group of people then it gets really
00:25:42
interesting after The Six Day War so
00:25:44
this was the second time that the Arab
00:25:46
countries had failed to to destroy
00:25:48
Israel which is what they had promised
00:25:50
they would do so there's a young
00:25:52
terrorist at the time named yaser Arafat
00:25:54
and he was part of a party called fata
00:25:56
and what he said is you know what all
00:25:58
these Arab leaders they're lying to you
00:26:00
they're failing you uh I'm going to be
00:26:01
the one to start creating a Liberation
00:26:03
and opportunity for the Palestinian
00:26:04
people so he took on this mantle uh was
00:26:07
able to use his fat group and and some
00:26:09
pretty uh thuery ways to take over the
00:26:11
Palestinian Liberation Organization
00:26:13
which is way that he got some
00:26:14
International claim and at the time he
00:26:16
was doing that from Jordan so this about
00:26:18
1968 1969 uh they caus so much trouble
00:26:21
in Jordan uh that uh King Hussein at the
00:26:24
time who's King abdullah's father who
00:26:26
really was a very very uh special um
00:26:29
Diplomat and leader in the Middle East
00:26:31
got so fed up with with arod I mean at
00:26:34
the time he was causing trouble they it
00:26:35
was it was steering people away people
00:26:36
wouldn't invest there uh they wouldn't
00:26:38
it was it was hurting tourism and then
00:26:40
they took a little further and they
00:26:41
tried to assassinate him which was
00:26:43
probably the final straw so the
00:26:45
Jordanian leader said get these people
00:26:46
the hell out of my country um it was a
00:26:49
big clash between the PLO um uh and and
00:26:53
fata uh terrorists and then the
00:26:55
Jordanian police and military and they
00:26:57
were able to expel them and then the
00:26:59
Palestinians went to Lebanon uh that's
00:27:01
where yasar AR front was so they were
00:27:02
there for about 12 years again they went
00:27:04
back to their old ways of of of
00:27:07
fermenting uh radicalism and finding
00:27:09
ways to to cause trouble uh when Israel
00:27:12
uh invaded Lebanon in 1982 uh then yaser
00:27:15
arat fled again uh this time to Tunisia
00:27:18
um in Tunisia they were living pretty
00:27:20
well as a beachfront place they're in
00:27:22
these beautiful Villas on the beach and
00:27:23
they kind of became a little bit
00:27:24
disconnected uh from the Palestinian
00:27:26
people but there was a lot of resentment
00:27:29
uh of the broader uh Arab world because
00:27:31
they felt like again the Arab world
00:27:33
didn't really they would say they were
00:27:34
for the Palestinian people but never
00:27:36
really stood up for them in the way that
00:27:37
they felt like they deserved so it was
00:27:41
it took until about 1988 that finally uh
00:27:44
This is 40 years after 1948 the war of
00:27:47
independence where uh the pl was finally
00:27:49
able to get the Arab League to say and
00:27:51
this is really because Jordan was just
00:27:52
like done with this issue to say okay
00:27:55
we're going to acknowledge that this
00:27:56
land here should become a Palestinian
00:27:58
state so the notion of a Palestinian
00:27:59
State really didn't emerge till about uh
00:28:01
1987 1988 which is the same time that
00:28:05
Hamas actually you know came about and
00:28:07
they came about really from they were an
00:28:09
a Sho of the Egyptian Muslim Brotherhood
00:28:11
um and their whole thing was basically
00:28:12
we're g to uh do full terrorism in order
00:28:15
to uh prevent uh prevent any compromise
00:28:18
or any deals with Israel so then you go
00:28:20
to 1991 which is a very very important
00:28:23
uh time for the Palestinians mostly
00:28:25
because uh Saddam Hussein in Iraq and
00:28:27
Kuwait um and that was very scary for a
00:28:30
lot of the Arab leaders right they
00:28:32
didn't want they did fear Saddam he was
00:28:34
a he was seen as the radical Arafat uh
00:28:37
and the Palestinian leadership back
00:28:39
Saddam Hussein mostly because they knew
00:28:41
that he was seen as the Revolutionary
00:28:42
and popular with the more common man um
00:28:45
and this pissed off every single Gulf
00:28:47
leader because they basically said wait
00:28:48
this guy if he's going to take over
00:28:50
Kuwait he could come for Saudi Arabia
00:28:51
he'd come for UAE so they were all very
00:28:53
against that and at the time there's
00:28:55
about over 200,000 Palestinians in
00:28:57
Kuwait what happened at that time though
00:28:59
was that that made the Palestinian
00:29:01
leadership so weak because a lot of the
00:29:03
Arab countries cut off the funding it
00:29:04
was just done with them and that's
00:29:06
really what led to the oso Accords so
00:29:08
the oso Accords happened not because our
00:29:10
fought necessarily you know all of a
00:29:12
sudden said after you know 37 or 27
00:29:15
years of trying you know Terror and and
00:29:17
pushing forward uh he basically ran out
00:29:19
of other options and this was his only
00:29:21
way to get some form of legitimacy so
00:29:22
they dropped from their Charter uh the
00:29:24
whole notion of destroying Israel and
00:29:26
said let's try to create this area we
00:29:28
could have governance and try this whole
00:29:30
effort for a Palestinian state so that's
00:29:31
really kind of this a a long short
00:29:34
version of kind of how we got to then
00:29:36
and then in the last I'd say 30 years
00:29:39
the big change that I would say between
00:29:41
then and today is that you have a lot
00:29:43
you have a new Middle East form again a
00:29:45
lot of the work we did in the Trump
00:29:46
Administration was really to help what
00:29:49
I'd call the new Middle East emerge
00:29:50
where you have a lot of economic
00:29:52
opportunities now happening in Saudi
00:29:54
Arabia UAE Qatar uh there's been a
00:29:57
massive mind shift where if you go kind
00:29:59
of post Arab Spring a lot of these
00:30:01
leaders are saying uh you know how do we
00:30:03
create opportunity for our people when I
00:30:05
got into my job in 2017 all the experts
00:30:08
were saying to me the big divide in the
00:30:10
Middle East is between the suis the the
00:30:12
sunnis and the Shia and when I got there
00:30:14
I said no no no the Divide is between
00:30:16
leaders who want to give opportunity uh
00:30:18
and betterment of life to their people
00:30:20
and people who want to use religion or
00:30:22
um or or whatever issue they want to
00:30:24
hold on to from the past in order to
00:30:26
deflect from their shortcomings and
00:30:28
justify bad leadership so um so I think
00:30:30
what's happened today is you have a lot
00:30:32
of the gulf countries really wanting to
00:30:33
see this issue uh get resolved which is
00:30:36
different than you had in in Camp David
00:30:38
in in in 2000 when Bill Clinton was uh
00:30:40
getting close to a deal with yaser
00:30:41
Arafat I think the Saudis and others at
00:30:43
the time didn't want this issue to go
00:30:45
away but now the issue is really no
00:30:47
longer useful for the Arabs the only
00:30:49
people it's useful to quite frankly is
00:30:50
Iran and that's why they've been backing
00:30:52
Hamas and Hezbollah and all these other
00:30:54
fun factions in order to continue their
00:30:56
project of instability so uh the way I
00:30:59
kind of view this period right now is
00:31:00
that the Middle East today is way
00:31:03
stronger U than it's been in the past
00:31:05
and this is what I would say the last
00:31:07
gasp of Iran and those who have you know
00:31:09
pushed for destabilization and kind of
00:31:11
this whole um you know islamist jihadist
00:31:14
project at the expense of kind of a
00:31:16
collaborative uh Middle East which had
00:31:18
which would then will create a lot of
00:31:19
opportunity uh for the Next Generation
00:31:21
to to Really Thrive Jared isn't there
00:31:25
like at this point then
00:31:28
like is it hard or easy to create an
00:31:31
objective Target we we call individuals
00:31:34
that Israel wants to Target Hamas but
00:31:37
there's no card carrying members of
00:31:39
Hamas you don't wear a jacket that says
00:31:41
I'm a member of Hamas and walk around
00:31:43
with an ID card
00:31:44
and there are some folks who are
00:31:46
sympathetic who believe that Hamas
00:31:49
represents a resistance movement there
00:31:51
are some folks who obviously
00:31:53
feel terrorized uh and ruled over and
00:31:59
there are some folks who support the
00:32:01
cause but don't pull the trigger there
00:32:03
are some folks who pull the trigger but
00:32:05
don't want to support the cause but are
00:32:06
being forced to by some uh reports how
00:32:10
easy and how hard is it to really direct
00:32:12
a military operation at such a fluid
00:32:17
population that there it's very hard to
00:32:19
ID and Target and as we've seen in years
00:32:24
past there's always another group that
00:32:27
seems to emerge you cut off one group
00:32:29
you get rid of al-Qaeda Isis
00:32:32
emerges and there's this almost like you
00:32:35
know fluid
00:32:36
transition of uh of this intention and
00:32:39
particularly in this Gaza Community it's
00:32:41
very difficult perhaps to distinguish
00:32:43
between who's Hamas and who's not Hamas
00:32:45
so how do you actually achieve the
00:32:47
objective there and you know how does
00:32:49
the military
00:32:51
Target yeah so so that's probably the
00:32:53
most important question that I think
00:32:55
people have to um really be thinking
00:32:58
about as we kind of enter this phase
00:33:00
right so uh it's both how do you do this
00:33:03
in the short term and then the long term
00:33:04
and so you can't kill your way out of an
00:33:07
ideology but there obviously are some
00:33:09
bad leaders at the top who are culpable
00:33:11
who um who who are military targets and
00:33:13
I imagine that it's really you know
00:33:15
knowing the capabilities of Israel and
00:33:17
the mad it's just a matter of you know
00:33:18
when and how as opposed to anything else
00:33:21
but then you have a lot of mid-level and
00:33:22
and and younger members of this group
00:33:25
and I do think that a lot of these
00:33:26
people are in this situation more
00:33:28
circumstantially I think this is what
00:33:29
they've been taught to believe I think
00:33:31
this is uh really the place they were
00:33:32
and this was the the system in Gaza
00:33:35
where if you wanted to advance and live
00:33:36
a better life then you really had to
00:33:37
succumb to this tiered system so how
00:33:40
deep the ideology is um people will
00:33:43
debate that in different ways if you go
00:33:44
back to 2016 in the campaign when we
00:33:47
were dealing with Isis uh the talking
00:33:49
point that everyone used was you have to
00:33:51
defeat the territorial calate of Isis
00:33:53
and then you have to win the long-term
00:33:54
battle against extremism uh one of the
00:33:56
things that president Trump did when he
00:33:57
went to Saudi Arabia in
00:33:59
2017 uh the reason we went there was
00:34:01
that the Middle East was basically on
00:34:02
fire I mean if you had Isis had a
00:34:04
califate the size of Ohio they were
00:34:06
ruling over eight million people they
00:34:08
were beheading uh journalists and and
00:34:10
killing Christians uh Syria was in a
00:34:12
civil war where
00:34:13
500,000 uh people were killed a lot of
00:34:15
Muslims and you didn't see the same
00:34:16
protest on college campuses when that
00:34:18
was happening as uh you know Assad was
00:34:20
gassing his own people uh Libya was
00:34:22
destabilized Yemen was destabilized and
00:34:25
Iran was on a Glide path to nuclear
00:34:27
weapon having just been given $150
00:34:29
billion in cash through the uh
00:34:31
disastrous jcpoa uh deal that uh that
00:34:34
car and Obama negotiated so it was a
00:34:36
mess and so Trump went there and um and
00:34:40
basically was was pretty tough with what
00:34:41
he said and he said this isn't our
00:34:43
problem this isn't your problem to solve
00:34:44
our problem and we need to to root this
00:34:46
ideology get it out of your your homes
00:34:48
get it out of your mosques get it out of
00:34:50
this Earth and uh the king of Saudi
00:34:52
Arabia stood up at the time and said
00:34:53
there's no glory in death and that was
00:34:55
really important uh two two of the big
00:34:57
uh deals that came out of that people
00:34:58
talk about the big uh Investments did
00:35:00
over $500 billion of Investments uh in
00:35:03
arm sales with Saudi Arabia that created
00:35:05
a lot of us jobs uh but the two
00:35:07
agreements we made that didn't get a lot
00:35:08
of coverage during that time was that we
00:35:10
did a counter tariff Finance Center that
00:35:12
we set up where we got all the gulf
00:35:13
countries to really allow treasury to
00:35:16
work closely with their Banks to stop a
00:35:17
lot of the funding to the terrorist
00:35:18
organizations and then these kind of
00:35:20
borderline organizations and the second
00:35:22
one was in Saudi Arabia which is the
00:35:24
custodian of the two holy sites in in
00:35:26
Islam meca Medina um they started a
00:35:28
counter extremism Center where basically
00:35:30
they were uh combating online um
00:35:33
radicalization that was occurring and if
00:35:35
you remember in the US in 2016 we had
00:35:38
the San bernido shooting we had the
00:35:39
Pulse Nightclub shooting and a lot of
00:35:41
people being radicalized online uh one
00:35:44
of the things that I'm very proud of
00:35:45
from the Trump Administration is the
00:35:47
work that we did uh to really help Saudi
00:35:49
Arabia change their trajectory and what
00:35:51
I realized quickly was that in the US we
00:35:53
just did not have the capabilities to
00:35:54
win the long-term ideological battle
00:35:56
ourselves so um we could be mad at you
00:35:58
know Saudi for some of the things that
00:36:00
they've done in the past but they were
00:36:02
the the most powerful partner we could
00:36:03
have in order to uh try to uh combat the
00:36:07
radicalization that was occurring both
00:36:09
in terms of stopping the funding but
00:36:10
also uh you know replacing the clerics
00:36:13
who were doing the radicalization with
00:36:14
clerics who were uh restoring Islam to a
00:36:17
more peaceful and and more proper uh
00:36:20
place so uh that was something that
00:36:21
that's really occurred it's made a big
00:36:22
difference I was just in Saudi Arabia a
00:36:24
couple weeks ago at their big investment
00:36:25
conference uh and what was really
00:36:27
exciting to me was I was meeting with a
00:36:28
lot of the younger Saudi entrepreneurs
00:36:31
and I did a a conference in Bahrain to
00:36:33
talk about the Palestinians uh in 2019
00:36:36
and one of the big challenges we had
00:36:38
when we were putting that together is we
00:36:39
were thinking about who are the role
00:36:41
models for these young Palestinian kids
00:36:43
and in the in the Muslim world you know
00:36:46
they had some sports stars they had some
00:36:47
Business Leaders uh but it wasn't really
00:36:49
uh people who were necessarily um
00:36:52
relatable to a lot of the younger
00:36:53
generation in Saudi I was at an event
00:36:55
with all these young Tech entrepreneur
00:36:56
there who are building uh amazing
00:36:58
companies there's a lot of unicorns
00:37:00
there uh they're doing a lot of the you
00:37:01
know the the companies that are dominant
00:37:03
in the US and in Asia and now they're
00:37:05
building them for the Middle East there
00:37:07
and it's very very exciting and these
00:37:08
really are the next generation of role
00:37:10
models for a lot of these kids so U
00:37:12
that's a long way of saying that you
00:37:14
know obviously you have to do what you
00:37:15
have to do from a military perspective
00:37:17
and and the Hope obviously is that uh it
00:37:19
can be as quick as possible and that as
00:37:21
few civilians as possible uh are are are
00:37:23
hurt by this um but the notion is that
00:37:26
once that's once that's completed you
00:37:28
need to then create a framework where
00:37:30
people don't just have more despair uh
00:37:32
because in an area where there's no hope
00:37:34
and opportunity then obviously the
00:37:36
radicalists and the jihadists that's
00:37:38
really where they do their best
00:37:39
recruiting and they flourish so uh so so
00:37:41
once this occurs there needs to be a
00:37:43
paradigm created where the next
00:37:44
generation feels like it's better for
00:37:46
them to get a job be part of the economy
00:37:49
uh and where they can live a better life
00:37:50
through capitalism uh than by going to
00:37:52
to these jihadist groups but it's
00:37:55
leadership targeting right now that's
00:37:56
the objective effectively I mean that's
00:37:58
what I'm
00:37:59
hearing leadership and then degrading of
00:38:02
capabilities right so because again what
00:38:03
you've seen as well you've seen this
00:38:04
with cartels in in in uh in South
00:38:06
America and you've seen this with Terror
00:38:08
organizations you know you you kill the
00:38:10
top guy and and sometimes you cut the
00:38:11
head off the snake and the snake dies
00:38:13
and sometimes it just you know it
00:38:14
scatters into a lot of little pieces and
00:38:16
then you end up it ends up becoming more
00:38:17
complicated not less but I think here
00:38:19
obviously leadership but but
00:38:21
significantly degrading uh the
00:38:23
capabilities for anything in Gaza to uh
00:38:26
to to threaten Israel and then actively
00:38:30
Build A Better Way actively build a
00:38:32
better solution that's the only way and
00:38:34
by the way even today it's it's much
00:38:36
more easy to visualize that than it was
00:38:37
in 2019 when I was talking about this
00:38:40
because you're seeing the economic
00:38:41
project in Saudi Arabia you're seeing
00:38:42
what they're doing in UAE I mean that
00:38:44
the fact that Saudi shifted so much in
00:38:46
five years should give you hope that
00:38:47
it's really really possible and they've
00:38:49
been pushing the rest of the countries
00:38:51
to try to emulate and and compete with
00:38:52
them which is also an amazing thing I'd
00:38:55
love to get your reaction to to the
00:38:57
difference in tone and messaging from
00:38:59
Western governments versus what you're
00:39:02
seeing sometimes on the ground with some
00:39:03
of these protests and just how almost
00:39:06
diametrically opposed the language and
00:39:09
the rhetoric and the point of view is
00:39:10
how is it that and sort of this is why I
00:39:13
kind of asked you just for a little bit
00:39:14
of a a history how is it that people
00:39:18
aren't taking all of these views in how
00:39:20
is it that there is this radicalization
00:39:22
that may not be happening in the same
00:39:25
level in the Middle East but is maybe
00:39:28
happening actually in the
00:39:29
west whether it's in our universities or
00:39:32
other ones yeah so that's something like
00:39:35
my friends in the Middle East a lot of
00:39:36
them are laughing at the West because
00:39:38
they're basically saying you know we we
00:39:40
got all these islamist radical Muslim
00:39:42
Brother people the hell out of our
00:39:43
countries you don't see the same
00:39:44
protests uh in those places that you see
00:39:46
in the west and um and I think that in
00:39:50
in in the west what's occurred is is
00:39:52
people I saw this a lot when I dealt
00:39:54
with the Europeans where people's
00:39:55
understanding of the issue uh is more
00:39:57
with their heart than it is with their
00:39:59
head and obviously nobody wants to see
00:40:00
any suffering um of any human beings but
00:40:03
the reality is is that you know the the
00:40:05
solutions that they've proposed for the
00:40:07
last 75 years have all been uh just
00:40:09
nonsensical and they they've more often
00:40:11
than not perpetuated the problem then
00:40:13
they've been solutions to the problem
00:40:14
and you know I faced tons of criticism
00:40:16
when I was you know in my role working
00:40:18
on this issue and mostly because I I
00:40:20
kind of looked at all the things that
00:40:21
have been done in the past and keep mind
00:40:23
being asked to to work on you know the
00:40:25
Middle East it's like it's almost like a
00:40:27
joke right it's it's the hardest problem
00:40:28
set you can get in the world and I think
00:40:31
we almost made it look too easy getting
00:40:32
the results that we did and we left it
00:40:34
very quiet and uh I think now people are
00:40:36
starting to appreciate that it wasn't
00:40:38
that easy and it's not um it's not a
00:40:41
simple problem set to deal with and uh
00:40:43
but I think that a lot of people um were
00:40:46
were were kind of looking at um at what
00:40:51
they thought was wrong but looking at
00:40:52
the wrong root causes for how it got
00:40:55
there I have a question for you and saxs
00:40:58
I'd love to get your guys' opinion on
00:40:59
this India dealt with a terrorist attack
00:41:03
when M Mahan Singh was prime minister
00:41:05
and basically it was an extremist Muslim
00:41:07
group from Pakistan lakari TBA that came
00:41:10
in and killed a lot of Indians but a lot
00:41:12
of foreigners as well right attacked
00:41:14
some of the major hotels in Bombay Etc
00:41:17
and what happened was manahan sing
00:41:21
didn't do anything and in hindsight what
00:41:24
was written is you know they debated to
00:41:26
do they debated do we go after this
00:41:28
group do we show
00:41:32
some proactive demonstration of force do
00:41:35
we invade Pakistan ultimately they went
00:41:39
on a more covert path to sort of
00:41:40
dismantle that Terror Network and there
00:41:42
was just a lot of international support
00:41:44
that came around
00:41:45
it can we steal man whether it would
00:41:48
have been possible for Netanyahu to take
00:41:51
that path or was it really not even
00:41:55
reasonable just curious what you guys
00:41:57
think about
00:41:58
that do you want to go
00:42:01
first uh no you should go first jar okay
00:42:04
so um look anything's possible uh chth
00:42:09
and I think that there's different ways
00:42:10
look I think the big fears initially
00:42:13
were that going into Gaza number one
00:42:15
you'd be walking into a big trap and
00:42:16
number two is you would be inviting a
00:42:19
major escalation in the region the the
00:42:20
third fear was obviously the degration
00:42:22
of the Israeli economy when we did uh
00:42:25
the Abraham Accord one of the big uh
00:42:28
attractive uh things to a lot of these
00:42:30
countries to be partners with Israel was
00:42:31
their massively robust economy and what
00:42:34
could happen if they go to war and it's
00:42:35
a prolonged war is that economy can go
00:42:37
off track I think GDP will take a big
00:42:39
hit there in Q4 but obviously you know
00:42:41
in Israel they do have a history of
00:42:42
coming back right away but if this is a
00:42:44
prolonged uh war effort uh there could
00:42:47
be big hits and then you also think
00:42:48
about in the age of you know Ai and
00:42:49
software development losing you know a
00:42:51
day of productivity is the equivalent of
00:42:53
losing you know a week or a month and uh
00:42:55
and they don't want to fall behind in
00:42:57
what they're doing so there is an
00:42:59
argument to be made for doing that but I
00:43:00
do think that from Israel's
00:43:02
perspective um I do think that they
00:43:05
understand this threat I think that they
00:43:06
want to eliminate this threat and I
00:43:08
think their view is is uh we can't live
00:43:11
like this anymore uh we we
00:43:12
underestimated it before uh and and we
00:43:15
will not let that happen again and I
00:43:16
think also the psychology of of really
00:43:18
the Jewish people is you know it's funny
00:43:20
Once I was sitting with h with prime
00:43:22
minister Netanyahu and one of the
00:43:23
generals and uh and BB was basically
00:43:26
saying like you know if if Iran gets too
00:43:27
close this is what I'm going to do we're
00:43:29
going to have to take matters to hands
00:43:30
and the general basically said to me he
00:43:32
said you know I get it you know you guys
00:43:33
aren't going back to the ovens and I was
00:43:34
just like wow you know it was it was a
00:43:36
real acknowledgement of like the way
00:43:38
that Israel operates with kind of no
00:43:40
margin for error and I would always say
00:43:41
when I would negotiate with the Israelis
00:43:43
that you know sometimes you do a
00:43:44
contract and there's like you know
00:43:46
there's there's two issues at R 10 and
00:43:47
like a couple issues at r five and like
00:43:49
a whole bunch you know whole bag of
00:43:50
issues that are like twos and threes and
00:43:52
when I would negotiate with the Israelis
00:43:53
like they would treat every issue like
00:43:56
it was like a 10 you know what I mean in
00:43:57
the sense that like they they just
00:43:58
operate like there's no margin for error
00:44:01
um and uh and I do think that obviously
00:44:03
there was some complacency and and and
00:44:05
the internal division you know led to
00:44:07
them being caught off guard here but I
00:44:08
think that uh they're going to do what
00:44:10
they're going to do to make sure this
00:44:12
this happens and I think there's also a
00:44:13
way where Israel feels mentally like we
00:44:16
have to show that we're strong or else
00:44:17
people will will go after us and I think
00:44:19
that that's what they've done and I will
00:44:21
say you know the fact that Israel's gone
00:44:22
from being completely divided to now uh
00:44:25
fully United in this effort I mean even
00:44:27
the people on the far left um in Israel
00:44:29
who were all peace who were you know
00:44:30
funding you know jobs with Palestinians
00:44:32
and you know housing them in their homes
00:44:34
I mean they're basically saying they
00:44:35
want to go to war so the mentality there
00:44:37
is very much we need to do what we need
00:44:39
to do now to keep ourselves safe people
00:44:41
are very very heartbroken for those who
00:44:43
are who are passed they're they're
00:44:45
they're praying very closely for the
00:44:46
hostages um and uh but they've given a
00:44:49
lot of latitude to their government to
00:44:50
do what it needs to do to make sure this
00:44:52
this is this is not U this does not
00:44:54
occur again and I will say to like
00:44:56
Israel also recognizes that I think now
00:44:58
they have the world more on their side
00:45:01
than they have in in uh in past
00:45:03
conflicts and and I think their view is
00:45:05
to um their view is to to to do it while
00:45:08
they have that situation saak what do
00:45:10
you think could Netanyahu have taken the
00:45:14
the path of doing nothing no I don't
00:45:16
think so I mean not given his domestic
00:45:19
political situation I think the Israeli
00:45:22
people demand a response and look one of
00:45:26
the arguments that Israel would make is
00:45:28
that if this happened to you the United
00:45:31
States or you Russia or you China what
00:45:33
would you do I mean I think we know we
00:45:35
would turn Gaza into fuah or mosul
00:45:39
Russia would turn it into gry so I think
00:45:42
Israel is taking the response that I
00:45:45
think most countries would take given
00:45:49
their situation the thing I worry about
00:45:51
is that Israel is not the United States
00:45:53
I mean the United States because it's so
00:45:55
powerful can act largely with impunity
00:45:57
we don't have to worry as much about
00:45:59
blowback and Israel does because at the
00:46:01
end of the day they're a small country
00:46:03
and a very hostile region and so I do
00:46:05
worry about the potential for unintended
00:46:07
consequences here one potential
00:46:09
consequence is hor horizontal escalation
00:46:11
does this war somehow spin out of
00:46:13
control and it could lead to a much
00:46:15
wider Regional war that would not be in
00:46:16
Israel's interest the other is
00:46:19
diplomatic isolation because I do think
00:46:20
that Israel is taking a big hit right
00:46:22
now in the information War the war of a
00:46:23
public opinion and then finally do have
00:46:26
a lot of Civilian casualties and and
00:46:28
those civilians have brothers and
00:46:29
sisters and cousins and so forth and
00:46:31
that's going to lead to the next
00:46:32
generation of terrorists and so even
00:46:35
success in this operation against Hamas
00:46:38
doesn't solve the long-term problem I
00:46:40
mean it just kind of keeps it going so I
00:46:42
think all of those things are potential
00:46:45
problems but at the end of the day if
00:46:49
Israel can have a successful military
00:46:51
operation here that significantly
00:46:53
degrades or destroys Hamas
00:46:56
without this thing spiraling out of
00:46:58
control that buys them time to find a
00:47:01
political solution then maybe it will be
00:47:04
worthwhile I mean I think a lot depends
00:47:05
here on what the outcome ultimately is I
00:47:07
think it's like a very tough thing to
00:47:09
judge without knowing what the outcome
00:47:10
is going to be the King of Jordan a
00:47:12
couple of weeks ago gave a
00:47:14
speech and uh in the
00:47:17
speech he said there is no peace
00:47:19
possible in the Middle East without the
00:47:21
emergence of a Palestinian state with a
00:47:24
two-state solution being the only path
00:47:26
forward a Palestinian independent and
00:47:28
sovereign state should be on June 4th
00:47:30
1967 lines with East Jerusalem as its
00:47:34
capital and so that the cycles of
00:47:36
killing whose ultimate victims are
00:47:37
innocent civilians
00:47:41
end is this the only path to
00:47:45
stabilization Jared and is that where
00:47:48
we're headed so that statement is is the
00:47:50
same throwaway statement right that's
00:47:52
the safest statement for anyone to say
00:47:54
because that became the internet ational
00:47:56
consensus so you know one thing that was
00:47:58
super interesting to me when I was
00:47:59
working on this was um I kind of said to
00:48:02
my team once I was like where does the
00:48:03
Palestinian claim for East Jerusalem as
00:48:05
the capital come from and I had a guy on
00:48:07
my team who is a a military guy who
00:48:09
actually worked for John krey and I'd
00:48:11
always have him in the room because he
00:48:12
would represent the Palestinian
00:48:13
perspective um we had a bunch of
00:48:15
Orthodox Jews and and you know we tried
00:48:16
to be impartial but you know we we did
00:48:18
the best we could to have you know all
00:48:20
perspectives represented and um and he
00:48:23
came said I actually don't know then
00:48:25
what's interesting is you know when when
00:48:29
the West Bank was actually uh governed
00:48:31
by Jordan the capital at the time was
00:48:33
Aman and so it really wasn't until the
00:48:35
uh the 1988 um uh launch of of this
00:48:40
right for Palestinian state that they
00:48:41
self declar that the capital should be
00:48:43
East Jerusalem and so that was actually
00:48:45
an interesting notion as well and I
00:48:46
think that you know everyone knows that
00:48:48
that's not going to be the case and I
00:48:49
asked one of the leaders once why they
00:48:51
say that and they said well it's a
00:48:52
cliche and I said well maybe we need a
00:48:54
new cliche and he says yeah that's
00:48:55
that's a good idea let's come up with a
00:48:56
nu cliche so I think whatever solution
00:48:59
is going to occur has to be pragmatic
00:49:01
right you you the reality is is that if
00:49:04
if we're going to learn from Gaza
00:49:06
there's a couple of lessons to learn
00:49:08
right number one is you know Israel
00:49:09
withdrew from Gaza in 2005 or 2006 uh
00:49:13
they forcibly removed 50,000 Israeli
00:49:16
settlers uh from Gaza um all those
00:49:19
people they they left their their homes
00:49:20
they left their businesses um thinking
00:49:22
that would be peace they they
00:49:23
transferred governance of Gaza to the
00:49:26
Palestinians the Palestinians then had
00:49:28
an election again it was uh you know the
00:49:30
the PA at the time convinced the Bush
00:49:32
Administration to allow for Hamas even
00:49:34
though their Charter called for the
00:49:36
destruction of Israel to participate in
00:49:38
the election and they won in a
00:49:39
democratic election since that time
00:49:41
there's been no improvement in the
00:49:43
economy uh it's become a a real security
00:49:45
risk for Israel and so Israel withdrew
00:49:48
and then let them govern themselves and
00:49:50
now you have what's happened today be
00:49:52
the case so I think the reality is is
00:49:55
that you know if you look at the
00:49:57
Historical um maps and the historical
00:49:59
lines I mean there there's really no uh
00:50:02
making a claim there there's no uh other
00:50:05
example in history where somebody's lost
00:50:07
three offensive Wars and then has been
00:50:09
able to maintain their claim over a
00:50:10
territory uh that they had before but I
00:50:13
do think that there is an international
00:50:15
consensus and I do even think in Israel
00:50:17
there's a consensus to give the
00:50:18
Palestinian people the ability to kind
00:50:20
of uh have their own land and then also
00:50:23
to govern themselves so um the word
00:50:25
state is is a very loaded term because
00:50:27
it it comes with a lot of definitions to
00:50:29
different people but I think the
00:50:30
constructs of what's achievable is um is
00:50:34
in the West Bank or Gaza uh there can be
00:50:36
no security threat to Israel and this is
00:50:39
something that that they were insisting
00:50:40
on before and I was sympathetic uh this
00:50:42
was even before October 7th and if you
00:50:44
go back and look at the work we did and
00:50:45
what we put out we had a security regime
00:50:47
that we designed with uh us intelligence
00:50:49
and Military and and Israeli
00:50:51
intelligence and Israeli military uh
00:50:53
that we thought actually gave a lot of
00:50:54
autonomy from police force perspective
00:50:56
to the Palestinians allowed them to
00:50:58
build their capabilities and and they
00:51:00
kind of like earned their way into more
00:51:01
and more security control which I
00:51:03
thought was the right way to do that
00:51:04
because you don't want to take a ton of
00:51:05
risk there the other part of it though
00:51:07
in any state is you need a functioning
00:51:10
economy otherwise obviously you have a
00:51:11
big grievance party the biggest problem
00:51:14
the Palestinians have faced over the
00:51:16
last called 25 years since since Oslo I
00:51:19
guess almost 30 years now since Oslo is
00:51:21
uh is just bad governance so the problem
00:51:23
with the PA is is they were elected I
00:51:25
think in 2005 and uh they haven't
00:51:28
another election since so I think
00:51:29
president boss is in the 16th 17th 18th
00:51:32
year of like a four-year term um very
00:51:34
not popular he's more popular in
00:51:36
Washington and in you know the United
00:51:37
Nations than he is you know in his own
00:51:39
country um he's uh there it's a very
00:51:42
corrupt system again a lot of the
00:51:43
money's gone for uh for for the
00:51:45
leadership their family for the top
00:51:47
people but not to the it hasn't trickled
00:51:49
down to the people and so there there's
00:51:51
not a lot of trust on it uh you know I
00:51:52
held a conference in Bahrain where I
00:51:54
brought all the top inv ERS in the
00:51:55
Middle East I brought Steve schwarzman
00:51:57
from Blackstone came we had Randle
00:51:59
Stevenson came from from AT&T and
00:52:02
everyone came and said you know what we
00:52:04
actually would love to help the
00:52:05
Palestinian people we'd love to invest
00:52:07
here uh and then they looked at the
00:52:08
magnitude of it I mean it's three
00:52:10
million people which is like a small
00:52:11
state in the West Bank and two million
00:52:12
in Gaza again it's like a small state in
00:52:14
the US um and obviously to build things
00:52:16
it's much cheaper I mean the GDP per
00:52:18
capita there is about 3,000 per person
00:52:20
so uh you know it's it's it's cheaper
00:52:22
labor it's it's it's do it and it's
00:52:23
connected right to Israel right which is
00:52:25
like you know California not being
00:52:27
connected to Silicon Valley so the
00:52:29
prospects for Prosperity spillover are
00:52:31
are massive uh being sandwiched between
00:52:33
the rich Gulf and the the growing Israel
00:52:36
so but the thing that's missing in for
00:52:38
the Palestinians is very basic things
00:52:40
right there's no fair Judiciary there's
00:52:41
no rule of law the governance is
00:52:44
terrible the institutions are incredibly
00:52:46
opaque and what all these people were
00:52:47
saying is we'd love to invest here but
00:52:50
it's just not an investable place and so
00:52:52
the thing that's been holding back the
00:52:53
Palestinian people has not been Israel
00:52:55
it's been their bad leadership and again
00:52:57
you're seeing in other places in the
00:52:58
Middle East that with the proper
00:53:00
leadership Investments can come and
00:53:02
those investments will actually lead to
00:53:03
people living a much better life how
00:53:05
does that leadership change in your view
00:53:08
so the way that I would think about this
00:53:11
is that if you're waiting for a solution
00:53:12
to come to you you're not going to find
00:53:14
it right if you say okay let's go back
00:53:16
to the UN well they have a perfect track
00:53:18
record of failure let's go back to the
00:53:19
PA well they have a perfect track record
00:53:21
of failure you're definitely not going
00:53:22
to go back to a MOS so you need to find
00:53:25
something different so I think you
00:53:26
either need to create something new or
00:53:28
you need to um look at what's working
00:53:30
and put it together so some places that
00:53:32
could do it mean the World Bank has a
00:53:34
lot of good uh institutional knowledge
00:53:36
they helped us work on the plan the
00:53:37
World Bank and the IMF um you know some
00:53:39
of the other Regional governments I mean
00:53:40
Jordan their government is is pretty
00:53:43
pretty capable I mean they're they're
00:53:44
better at military than economy but I
00:53:45
think they're they're starting to focus
00:53:47
more on economy um as they realize that
00:53:49
that that's necessary um if you look at
00:53:51
the benefits of that area the
00:53:54
Palestinian people are are are like a
00:53:56
99% literacy rate again through the
00:53:58
taxpayer US taxpayer dollars and
00:54:00
international donations we've paid for
00:54:01
them to become uh very educated
00:54:03
unfortunately I think we've poisoned uh
00:54:05
their minds with a lot of what's been
00:54:06
taught um in their curriculums um they
00:54:09
have a pretty good health care System
00:54:10
there again I think it could be improved
00:54:12
because it's been done very kind of
00:54:13
peacemeal versus holistic um and then in
00:54:16
addition to that um they obviously have
00:54:18
uh tremendous amount of tourism sites I
00:54:20
mean you know Jewish Christian Muslim
00:54:21
tourism sites so if they ever get their
00:54:23
acts together I mean the the Boom in
00:54:25
that area can be uh unbelievable and I
00:54:28
think it could work very very well um
00:54:30
there was one time where the Palestinian
00:54:32
economy was working I think it was about
00:54:34
2007 there was a guy named Salam fad who
00:54:36
was uh the first time somebody came in
00:54:38
who was uh he was not corrupt uh things
00:54:40
were happening uh you know wages were
00:54:42
Rising uh projects were moving the money
00:54:45
was actually getting to the people and
00:54:46
he became so popular because he was such
00:54:48
doing such a good job administering that
00:54:51
uh that the president got rid of him
00:54:52
that a boss got rid of him because he
00:54:54
saw him as a threat to his power so you
00:54:56
know what's happened is not different
00:54:57
right you always have kind of a tyranny
00:54:58
of the minority in some way uh with with
00:55:01
with most forms of of government and so
00:55:04
uh what happened was is as he was
00:55:05
starting to gain popularity he became a
00:55:07
threat to kind of the cronyism that
00:55:09
occurred and so I think that the
00:55:11
International Community if they're going
00:55:12
to put money into this again to either
00:55:15
rebuild number one it has to be
00:55:16
conditions based again we've put tens of
00:55:18
billions of dollars into this situation
00:55:21
right I mean this this Refugee group has
00:55:22
gotten more money uh over time than any
00:55:24
refugee group in history by a factor of
00:55:26
maybe a hundred right and then you know
00:55:29
you you you've none of it's been
00:55:30
conditions based and it has to be in in
00:55:33
a set where people are trying to create
00:55:35
outcomes I think one of the problems is
00:55:36
a lot of the people working on this
00:55:37
don't have business backgrounds they
00:55:39
understand you know human rights or they
00:55:41
understand politics but uh they don't
00:55:43
understand capitalism and they don't
00:55:44
understand what kind of framework you
00:55:45
need in order to allow a society to
00:55:47
thrive has treasury ever tried to trace
00:55:50
these dollars or some other organization
00:55:52
to just show where the theft happened
00:55:55
and where these pools of money have gone
00:55:57
to there's some intelligence on it that
00:56:00
I can't go into but uh but I think most
00:56:02
people don't want to know to be honest
00:56:04
jamat I mean you could just look at it
00:56:05
in a couple of ways like you know you
00:56:07
look at um you know we would meet with
00:56:09
prime minister Netanyahu in Washington
00:56:11
and he would take a commercial LL flight
00:56:13
to come meet us and he runs a military
00:56:15
superpower an economic superpower uh in
00:56:18
the region uh president abas would come
00:56:20
visit us in Washington and he uh
00:56:22
obviously represents a refugee group and
00:56:25
he would fly in a $60 million Boeing
00:56:26
Business Jet private jet to to
00:56:28
Washington I mean I'd meet with him and
00:56:30
we'd be sitting around and uh you know
00:56:32
he'd put a cigarette in his mouth and
00:56:33
then somebody would come over and they'd
00:56:35
like the cigarette for him and I'd be
00:56:36
like am I meeting with the head of a
00:56:37
refugee group am I meeting with like a
00:56:38
king you know it's just it it was a
00:56:40
different situation and um but I think
00:56:43
people just but he's the reasonable one
00:56:44
right the alternative is Hamas and those
00:56:47
guys I mean those are billionaire
00:56:49
Hypocrites who live in Kar at the Four
00:56:52
Seasons right yeah but but my sense is
00:56:55
is you're you're going to get what you
00:56:56
Demand right and I think that from the
00:56:58
US's perspective right we give about $4
00:57:00
billion do a year in foreign aid to the
00:57:02
PA to unra to Jordan to Egypt and uh and
00:57:06
we've we've tolerated you know status
00:57:08
quo that's not acceptable and you know
00:57:10
one of the difference again Trump had a
00:57:12
lot of tension with the foreign policy
00:57:14
you know establishment and it was over a
00:57:16
lot of things right obviously he wanted
00:57:17
to end the forever Wars he felt like we
00:57:20
should get some return on the
00:57:21
Investments we were making he felt like
00:57:22
us Aid wasn't an entitlement but I think
00:57:25
the biggest difference was they wanted
00:57:26
to all maintain the world they wanted
00:57:28
just to manage it and he wanted to
00:57:30
change it and you know what we did by
00:57:32
the by the time again this was one of
00:57:33
the disagreements I had with the
00:57:34
incoming Administration um is that when
00:57:37
we turned over the Middle East to them
00:57:39
again we I spoke earlier about what a
00:57:40
mess U you know we kind of inherited
00:57:42
when we started but we had five piece
00:57:45
deals between Israel and and majority
00:57:47
Muslim countries uh Iran was totally
00:57:50
broke again under Obama uh when he left
00:57:53
they were selling about 2.6 million
00:57:54
barrels of oil a day under Trump when he
00:57:56
left office they were selling 100,000
00:57:58
barrels of oil a day they were out of
00:58:00
foreign currency reserves they were dead
00:58:02
broke uh now they're back up to three
00:58:04
million barrels a day of of sales
00:58:06
they've done over hundred billion
00:58:07
dollars uh of oil Revenue uh since we
00:58:10
left office the Palestinians you know
00:58:11
one of the things we did uh after I
00:58:13
think the first year is we cut the
00:58:14
funding to UNR very controversial we
00:58:16
saying oh this is for refugees we said
00:58:18
it's not for refugees it's to build
00:58:19
Terror tunnels and Rockets and they're
00:58:21
saying no it's for schools and hospitals
00:58:22
and we were saying those are the
00:58:23
military bases and were saying you guys
00:58:25
are crazy you're cruel and our whole
00:58:28
thing and so when we left the PA was was
00:58:30
basically broke um the Arabs had kind of
00:58:32
lost interest in in that cause uh
00:58:34
because they kind of saw that it was it
00:58:36
was morally bankrupt and that uh every
00:58:38
time we gave a boss the opportunity to
00:58:40
do something better for his people he
00:58:42
refused and and they kind of saw that
00:58:44
you know we kind of we smoked him out a
00:58:46
little bit and so we kind of took the
00:58:47
issue and We Shrunk it tremendously and
00:58:49
the final deal we did was between Qatar
00:58:51
Saudi Arabia UAE Egypt and Barra and
00:58:55
that was a critical uh deal to do
00:58:57
because that was what really made it
00:58:58
possible for uh Saudi and Israel to then
00:59:01
do the deal and that was really on the
00:59:03
table right when we left but it took too
00:59:05
much time they allowed Iran to get too
00:59:07
strong they started allowing Iran to get
00:59:08
money they started funding the
00:59:10
Palestinians and and unra again and uh
00:59:13
and now you have a situation where it's
00:59:14
just become you know a mess it could be
00:59:16
fixed it definitely can be fixed if
00:59:17
you're strong and if you're smart but if
00:59:19
you're going to go back to kind of the
00:59:21
old ideas uh you're going to get the old
00:59:23
results you need new ideas you need to
00:59:25
create the ideas and force them you
00:59:27
can't just wait for them to occur and
00:59:29
then go back to the old institutions the
00:59:31
old people who have failed before who do
00:59:33
you think should be Secretary of State
00:59:34
in the next
00:59:35
Administration I think Jared
00:59:38
should he could do a pretty good job let
00:59:40
me ask you about the two two-state
00:59:42
solution let's just double click on this
00:59:43
I mean my my view on this and I think by
00:59:46
the standards of Israeli politics I'd be
00:59:48
a liberal there is that the only
00:59:50
solution the only way out of this is the
00:59:52
two-state solution you you know we can't
00:59:54
have a situation of indefinite permanent
00:59:57
occupation of the Palestinian people at
00:59:59
some point they developed a national
01:00:01
Consciousness and if you have conditions
01:00:03
of permanent occupation they're going to
01:00:05
resist and you're going to have
01:00:06
outbursts of
01:00:08
terrorism at the same time if Israel
01:00:11
just outright annexes these territories
01:00:14
or continues on a program of call it
01:00:16
creeping annexation where it keeps
01:00:17
building settlements in the West Bank
01:00:19
and you have a greater Israel that
01:00:23
eventually Jews and Israel will not be
01:00:25
the majority of the population I think
01:00:26
if you look at kind of Greater Israel
01:00:28
there's about 7.3 million Jews there's
01:00:30
about 7.3 million Palestinian Arabs
01:00:35
so if if the plan is a single greater
01:00:38
Israel is either going to stop being a
01:00:41
Jewish State because you know the
01:00:43
Palestinians will vote for something
01:00:45
different or it'll continue being the
01:00:47
Jewish state but there's going to be
01:00:48
some sort of two-tier system where a lot
01:00:50
of Palestinians won't have the vote and
01:00:52
So eventually a greater Israel have to
01:00:54
choose between whether it wants to be
01:00:55
Democratic or whether it wants to be
01:00:57
Jewish and that seems like a very bad
01:00:59
choice it seems like we want both those
01:01:01
things to be true so again that kind of
01:01:03
brings you back to a two-state solution
01:01:05
as the only option here and yet it seems
01:01:08
to me that the two-state solution has
01:01:10
never been further away it seems like
01:01:13
it's never been further away in terms of
01:01:16
Israeli domestic politics and it's never
01:01:19
been further away in terms of having uh
01:01:22
a negotiating partner to negotiate
01:01:24
something like this with
01:01:27
so that would be sort of my pessimistic
01:01:29
Outlook I mean I know you're pretty
01:01:30
optimistic about the situation do you
01:01:32
see it differently than that is that
01:01:34
framing wrong somehow how how would you
01:01:36
how would you see it so number one is
01:01:39
I'm naturally optimistic and I I just
01:01:41
find it's more fun to be optimistic than
01:01:43
pessimistic but I'll say everything I'm
01:01:45
saying in the context of the fact that
01:01:46
this is a really really really really
01:01:49
hard problem set right so um I'll try to
01:01:52
say this um in the right order so number
01:01:55
one is I I don't think there's any
01:01:57
viability to a one state and I don't
01:01:58
think that that's something that will
01:02:00
ever occur um number two is um and I
01:02:04
actually you know what's interesting one
01:02:05
of the problems is a lot of the uh the
01:02:07
Arabs and the Palestinians would
01:02:09
actually prefer to be part of Israel
01:02:10
than a Palestinian state so right before
01:02:12
coid we released the Trump peace plan
01:02:14
which uh which again you can you can
01:02:16
still find online and U I think the
01:02:19
political part of it was about 54 Pages
01:02:20
the economic part and the political part
01:02:22
was about 181 pages in detail um we at
01:02:25
the time got the right-wing and the left
01:02:27
wing again it was they were in the third
01:02:28
election and we had uh prime minister
01:02:30
Netanyahu and Benny Gans who's also an
01:02:32
amazing um person came in and they they
01:02:35
all endorsed it and so what I would find
01:02:38
what I tell you is that semantics you
01:02:39
know state has to do a lot with
01:02:40
semantics so uh you can definitely give
01:02:42
them a state the question is is you know
01:02:44
you have to give Israel certain
01:02:45
overriding security controls so that uh
01:02:48
so that the state cannot be a threat to
01:02:50
them and then you can let them kind of
01:02:51
earn their way out of that with good
01:02:52
behavior and and showing that it's a
01:02:54
true partnership but what I will just
01:02:56
tell you is that whatever you call it
01:02:58
you give them a flag you can give them
01:02:59
whatever you want unless there's a
01:03:01
system where people can live a better
01:03:03
life then the grievance will overtake uh
01:03:06
will overtake whatever Independence they
01:03:08
have and it will just become a problem
01:03:10
again and so um so I do think a
01:03:12
two-state solution is is possible again
01:03:14
what you do with Gaza is very much you
01:03:16
know TBD um but I do think especially in
01:03:18
the West Bank there there's definitely
01:03:20
possibility to do it and I think that
01:03:21
from Israel they'd like to see that
01:03:23
happen where uh they'd like the
01:03:25
Palestinians to be able to govern
01:03:26
themselves but it's it's a couple big
01:03:28
ifs if it's not a security threat and if
01:03:30
they can have a viable economy that's
01:03:31
going to happen one of the big things
01:03:33
that's happening now that I'm hearing
01:03:34
about is that I think the number was
01:03:36
like 250,000 Palestinians who had work
01:03:38
visas from the West Bank to uh to go
01:03:41
into Israel and now with the threat
01:03:43
there's just such a great distrust that
01:03:44
has that has occurred that those are now
01:03:46
not being renewed so I think Israel is
01:03:47
gonna have to bring in workers from
01:03:49
other parts of the world but that was an
01:03:51
amazing thing right you had Muslims and
01:03:52
Jews you know working together you had
01:03:55
uh you know Palestinians whose lives
01:03:57
were better off because they were
01:03:58
working with Israel so the vast majority
01:04:00
of the Palestinians maybe not the vast I
01:04:02
don't know it's people have different
01:04:04
perspectives on this but I I I just
01:04:05
believe that fundamentally human beings
01:04:07
want to live a better life uh I don't
01:04:09
think our natural state is is to hate
01:04:11
each other or to be uh or to not be
01:04:13
together again if you look at the Middle
01:04:14
East for you know a thousand years
01:04:16
before the second World War I mean Jews
01:04:18
and Muslims and Christians they lived
01:04:20
very peacefully together so you know
01:04:22
what I was seeing with the Abraham
01:04:23
Accords and what I was oping would occur
01:04:24
would really be a reversion to the
01:04:26
pre-World War II era where people were
01:04:28
starting to live peacefully together but
01:04:30
there's been a lot of hate that's been
01:04:32
fermented and manipulated over over this
01:04:34
time but the best way to start it is
01:04:36
just you know take it one day at a time
01:04:37
you know we used to say in government we
01:04:38
get a hard problem you know used to say
01:04:40
you know how do you eat an elephant you
01:04:42
know one bite at a time and so just have
01:04:44
to kind of outline where you want to get
01:04:45
to put in place the right system and
01:04:47
then just start you know step after step
01:04:49
after step and then you get to a place
01:04:50
and and maybe you're able to do
01:04:51
something that becomes viable with time
01:04:54
Jared did you see the um debates last
01:04:57
night did you watch them uh no I did not
01:05:00
SX did you watch
01:05:02
them uh I didn't watch the whole thing
01:05:04
I've seen Clips on social media do you
01:05:06
have any takeaways I mean was it even
01:05:09
worth watching yeah I thought I thought
01:05:11
the the clips did a pretty good job of
01:05:14
actually showing some of the punchier
01:05:16
moments but the crazy thing is that the
01:05:18
the mainstream
01:05:20
media has completely erased PC's
01:05:24
candidacy I don't even think it exists
01:05:26
in the eyes of the mainstream media but
01:05:28
if you look on on X all the posts were
01:05:31
like he clearly won and he was basically
01:05:33
throwing Fireballs everywhere but then
01:05:35
if you go to you know CNN or Fox you
01:05:38
don't even hear his name right so it's
01:05:40
it's a real real difference the
01:05:43
mainstream media coverage is what they
01:05:45
want you to believe and social media is
01:05:47
what actually happened it's what people
01:05:50
actually believe and I think that if you
01:05:52
look at social media what it shows is
01:05:55
that V dominated the debate and he was
01:05:57
throwing fireballs and he was slamming
01:06:01
the neocons on the stage and showing
01:06:05
that there's been I think an irreparable
01:06:08
break between the neocon establishment
01:06:10
Wing in the Republican party and the
01:06:12
more populist Maga Wing So I think
01:06:15
that's that's kind of what social media
01:06:17
is showing and then you know if you
01:06:18
listen to mainstream media they they to
01:06:20
the extent they talk about vake it's
01:06:22
said he had some sort of meltdown and he
01:06:23
insult Ed Nikki Haley's daughter or
01:06:25
whatever something like that about her
01:06:27
Tik Tok usage yeah by the way all he
01:06:29
said is that that they he was being
01:06:32
berated for why he created a Tik Tok
01:06:33
account and he's like I want to reach
01:06:35
young people you know like your daughter
01:06:36
who's on there and um and for that Nikki
01:06:40
yeah that's what he said and Nikki Haley
01:06:41
called him scum for that well no but she
01:06:44
also she also pulled like the Will Smith
01:06:45
line like get your my daughter's name
01:06:48
out your mouth did she slap him no she
01:06:52
didn't I think it's a pretty good point
01:06:53
there's like 75 million Young Americans
01:06:55
on Tik Tok if you want to reach them
01:06:57
that's where you post your
01:06:58
messages I have seen VES stuff on there
01:07:01
I've seen RFK
01:07:03
Junior's videos on there yeah like
01:07:05
everyone uses Tik Tok now if you want to
01:07:07
reach people that's his reality Nikki
01:07:10
Haley doesn't I'm not sure I don't know
01:07:13
that she has much of a social media
01:07:14
following because I don't think her
01:07:17
campaign inspires any real Grassroots I
01:07:19
think her campaign is supported and
01:07:21
propped up by the GOP establishment Wing
01:07:24
I don't think there's any market for
01:07:25
what she's selling among the Grassroots
01:07:27
so social media is kind of pointless for
01:07:29
her but if you actually want to reach
01:07:31
people especially young people use
01:07:33
social media well it was pretty intense
01:07:35
when Vive said that the the head of the
01:07:38
RNC should just be fired for all the
01:07:40
losing and kind of went through every
01:07:42
single election in the midterms and
01:07:44
whatnot that they've lost since she
01:07:46
became the head of the RNC and
01:07:48
apparently on social media uh she
01:07:50
mouthed something to the effect of this
01:07:52
guy's an a-hole he's going to get a
01:07:54
single set from
01:07:56
us yeah R McDaniel who I know I mean I
01:08:00
like ra but I mean has she done a good
01:08:02
job sax look I it's hard for me to speak
01:08:04
to the job she's actually done because I
01:08:06
don't know the activities are actually
01:08:08
involved in being RNC chair so but I
01:08:12
mean the's point is look at the results
01:08:15
so if we were on the board of a company
01:08:17
that kept missing quarter after quarter
01:08:19
and the CEO said no look at all the good
01:08:21
things I'm doing we would probably still
01:08:22
fire that CEO just because you're like
01:08:25
how do things get worse right you just
01:08:27
take the chance that you bring in a new
01:08:29
CEO they're going to do better so the
01:08:31
reality is our results in the Republican
01:08:33
Party have been shitty lately now is
01:08:34
that all R's fault no it may not be much
01:08:37
of her fault at all but how do you do
01:08:39
worse I think a big reason for the
01:08:42
crappy
01:08:43
results have been the abortion issue
01:08:46
we've now had this issue on the ballot
01:08:49
in at least six states most of which
01:08:52
were red States a couple of them were
01:08:53
purple States it's lost every time the
01:08:56
anti-abortion or pro-life side has lost
01:08:58
decisively every time and I think
01:09:01
there's a lot of reasons to vote
01:09:04
Republican I think Republicans have the
01:09:05
advantage on the economy on border on
01:09:10
anything related to to woke on um crime
01:09:14
and homelessness these are all issues
01:09:16
that should be big winners for
01:09:18
Republicans but the public by I think
01:09:21
probably a two-third majority does not
01:09:24
want to ban abortion and as long as that
01:09:27
issue is in the Forefront Republicans
01:09:29
are going to lose and actually it was
01:09:31
Anne Coulter who just said this um an
01:09:33
cter had a really good blog post about
01:09:35
this saying that the pro-life yeah I I
01:09:38
retweeted it by the way she's very
01:09:40
pro-life I mean she's a social
01:09:42
conservative but she says that prif is
01:09:44
is going to wipe out the Republican
01:09:46
party they need to focus on
01:09:48
non-political activities which is
01:09:51
winning over hearts and minds they have
01:09:52
to make the case to the country have to
01:09:54
persuade more people because they're not
01:09:57
in a position they're not popular enough
01:09:58
to actually win elections you concur
01:10:00
Jared you think the Republican part's
01:10:02
going to change their position or need
01:10:03
to change their position to win
01:10:05
elections presidential election aside
01:10:08
well ultimately if you don't win then
01:10:09
you can't govern and you can't impact
01:10:11
the change you want to do so I do think
01:10:13
that uh people are definitely paying
01:10:14
attention you know the results are the
01:10:16
results I will say that you know one
01:10:18
thing with with Trump e won you know
01:10:19
with his operation we were able to
01:10:21
overperform our polling I think here
01:10:24
in these last times there's been
01:10:25
underperformance of of polling and so
01:10:27
that's something that obviously you have
01:10:28
to look at which is uh very troubling
01:10:30
but I'll also say that with you know
01:10:32
what I found again you know I'm not
01:10:33
really um as somebody who's newer to the
01:10:36
Republican party what I found is that
01:10:38
you know both parties are really I would
01:10:39
say collections of of of tribes right
01:10:41
you have different tribes that kind of
01:10:43
make up the party but what I found in
01:10:44
the Republican party was that there was
01:10:46
a ton of infighting and finger pointing
01:10:48
and Purity tests and um you know instead
01:10:51
of saying like you know you know I'm
01:10:52
happy you agree with me on on 70% or 80%
01:10:55
it was basically saying well if you
01:10:56
don't agree with me on 100% then then
01:10:58
then you're a bad Republican and I think
01:11:00
that uh that's a that's a culture that's
01:11:02
going to lead to you um having very
01:11:04
strong opinions but having no ability to
01:11:06
AFF effectuate things I think that
01:11:07
people have to you know say where do we
01:11:09
agree on on different issues uh that uh
01:11:12
where do we agree on issues how can we
01:11:13
work together to do it but if you don't
01:11:14
win then you're not going to be able to
01:11:16
effectuate the things you want and even
01:11:17
worse the other side's going to be
01:11:19
effectuating the things they want and
01:11:20
you look at where the world is today
01:11:21
because of that there's a lot of intern
01:11:23
seen fighting in the Republican party I
01:11:26
think Trump's instincts on abortion
01:11:28
actually have been very good I said this
01:11:30
a couple of months ago there was kind of
01:11:31
a brew HaHa on the right when Trump gave
01:11:35
an interview in which he said that that
01:11:38
actually what the santis had done in
01:11:39
Florida with the six-week ban was a
01:11:41
mistake and that he sort of up leveled
01:11:44
the issue and just said I'm going to
01:11:45
find a compromise that makes everybody
01:11:47
happy and this created a lot of upset
01:11:50
people on the right because they thought
01:11:51
that Trump was kind of selling them out
01:11:52
on the abortion issue and I made this
01:11:54
case on Megan Kelly a couple months ago
01:11:56
that I thought that what Trump was doing
01:11:59
was pretty smart because he doesn't want
01:12:01
to get pinned down on an issue that's
01:12:04
going to hurt him in the general and I
01:12:06
think part of the reason why he was
01:12:07
being a little bit Cy on that issue is
01:12:09
because he knows it would hurt him in
01:12:13
the general and he's starting to think
01:12:14
about that and I think the results that
01:12:16
we just had the other day are strong
01:12:18
Vindication of that and just let me say
01:12:20
just more generally that whenever Trump
01:12:23
has opposed Republican group think on an
01:12:26
issue I think he's invariably been
01:12:28
proven correct if you go all the way
01:12:30
back to
01:12:31
2016 you know think about all the um
01:12:34
heresies that he committed in the
01:12:36
Republican Party he spoke out against
01:12:37
the forever Wars against Bush's forever
01:12:40
Wars I think he was right about that at
01:12:42
the time the Republican Party either
01:12:44
wasn't talking about immigration or
01:12:46
didn't really seem to care he basically
01:12:49
made uh the Border a huge issue I think
01:12:50
he's proven right about that the issue
01:12:53
of China and China trade was not a issue
01:12:56
in the Republican party if anything it
01:12:58
was sort of
01:13:00
this this sort of unreconstructed free
01:13:02
trade total free trade issue going back
01:13:04
was pushing the TPP that year right
01:13:06
exactly so Trump defied the Orthodoxy on
01:13:08
that I think his prove incorrect Paul
01:13:10
Ryan also wanted to ratchet back
01:13:12
entitlements like Social Security
01:13:14
Medicare and Trump thought that was
01:13:15
suicidal for the GOP so he opposed that
01:13:18
I think on all these issues whenever he
01:13:20
has defied the Orthodoxy he's been
01:13:22
proven correct and um you know I don't
01:13:24
know if it's a conscious thing or it's
01:13:26
just that he's got tremendous gut
01:13:27
instincts as a politician be curious to
01:13:30
get Jared's take on that like how much
01:13:31
of this is sort of him working things
01:13:33
out and how much of it is just his gut
01:13:36
but I think this is why he's still the
01:13:39
candidate to beat for the Republican
01:13:40
nomination is at the end of the day for
01:13:43
all of Trump's issues he's actually the
01:13:45
best politician in the Republican party
01:13:47
you know I would see the way that he
01:13:48
would work on trade and again uh you
01:13:50
know trade deals usually take five six
01:13:52
years and and you know his attitude on
01:13:54
on trade was that uh whenever there's a
01:13:56
multilateral it's the the weaker
01:13:57
countries all ganging up on the stronger
01:13:59
party and so he says like I want to do
01:14:01
them bilaterally so he withdrew from TPP
01:14:04
uh which everyone went crazy and said it
01:14:05
was a disaster well we ended up
01:14:06
negotiating with Japan and Korea and
01:14:08
everyone and we got basically 95% of the
01:14:11
market access that was in TPP without
01:14:12
giving up any of the things that would
01:14:14
have absolutely decimated our Auto
01:14:15
industry uh we renegotiated the the
01:14:18
NAFTA which you know everyone said Obama
01:14:20
said they would Bush said he wanted to
01:14:21
fix it uh meanwhile Trump came in in a
01:14:23
year and a half we renegotiated naftan
01:14:25
it got over 80 votes in the Senate it
01:14:27
was a bipartisan uh win and it it set
01:14:29
the highest standards for labor
01:14:30
protection it it did a lot of great
01:14:32
things uh that I think make America way
01:14:34
more competitive and hopefully will
01:14:36
reduce our trade deficit so these were
01:14:38
all things that he took on that people
01:14:40
weren't willing to and again he said you
01:14:42
know look if I'm wrong you know putting
01:14:44
tariffs on these different countries I
01:14:45
remember people coming into him saying
01:14:47
uh saying if you put these tariffs on
01:14:48
the whole world's going to explode the
01:14:49
US economy is going to blow up and I
01:14:51
remember sitting with him privately and
01:14:53
he said to me you know Jared we had a
01:14:55
year debate and we had some people who
01:14:56
were more religious about this issue
01:14:58
than anything else and he says you know
01:15:00
Jared I've been saying this for 30 years
01:15:02
I believe it uh I campaigned on it I won
01:15:05
on it I have to see it like I have to
01:15:07
see it through it you know what if it
01:15:08
turns out it's a big disaster I could
01:15:09
always take him off you know and so that
01:15:11
was kind of like his way of thinking
01:15:12
about it where he had his Instinct he
01:15:14
follow his Instinct but he knew he could
01:15:16
always back off and I think his
01:15:17
flexibility and unpredictability were
01:15:19
some of his greatest assets and I think
01:15:21
also on on the border and immigration
01:15:22
again it's an issue somebody you know
01:15:24
grew up you know in New Jersey and then
01:15:25
was living on the upper e side that I
01:15:27
didn't a lot of residents for but now
01:15:29
you're seeing my friends in New York now
01:15:30
they're getting a taste of what it can
01:15:31
do you know to to the country they're
01:15:33
they're becoming you know big
01:15:34
immigration Hawks like Trump the thing
01:15:36
that the Republicans need to realize
01:15:38
right now is that if you pick these
01:15:41
topics that go down a rabbit hole you're
01:15:43
going to be in a really tough spot in
01:15:45
the general because the economy is also
01:15:48
going to be in reasonable shape now if
01:15:51
we were going to go into a November
01:15:52
election where there were we were going
01:15:53
to be in a recession that's very bad for
01:15:55
Biden but sort of the tea leaves for
01:15:58
whatever it's worth all the predictions
01:16:00
all the predictive markets show that
01:16:02
we're going to be in a reasonable place
01:16:04
and so the Republicans get need to get
01:16:06
very very focused sacks as you say on
01:16:08
the real issues list here right because
01:16:11
they're not going to have the benefit of
01:16:12
the Tailwind of a bad economy to say
01:16:15
President Biden has done a bad job
01:16:16
necessarily and so the message will need
01:16:18
to be even more precise and focused and
01:16:20
so I think that that's going to be an
01:16:21
important thing I I did a Tea Leaf
01:16:24
reading on macro if you guys want it I
01:16:25
have some charts just I'm just give you
01:16:28
a little rundown of because I I went and
01:16:31
you know look we used to talk about
01:16:32
these things when I was when we were
01:16:34
doing a lot of forecasting going into
01:16:38
this cycle but
01:16:39
so here's like a couple of really
01:16:42
interesting observations so the first
01:16:44
one is when you look at this M2 money
01:16:47
supply look how much it's actually
01:16:49
shrunk now why that's interesting to me
01:16:53
me is that you have these two forces
01:16:56
that are opposing each other one is we
01:16:58
have these huge deficits so we're
01:17:00
technically still frankly issuing a lot
01:17:02
of money right but then on the other
01:17:04
side we we have QT so when debt rolls
01:17:07
off we're not reissuing it and the
01:17:09
balance of that is still a really
01:17:12
constructive thing where now you can see
01:17:14
that you know M2 has materially started
01:17:16
to shrink and I think that that's a
01:17:18
really positive thing because now what
01:17:20
that does it it combats inflation in a
01:17:22
good way
01:17:23
unfortunately for all of us it hurts
01:17:25
Financial assets which is not so good I
01:17:27
think we've all felt that pain but the
01:17:29
reality is that that's been working so
01:17:31
then Nick if you go to the second chart
01:17:34
so what you see now is like we are in a
01:17:36
really decent place with inflation and
01:17:38
if you think about what's going to
01:17:40
happen over the next six months it's
01:17:42
mostly in the bag and meaning we talked
01:17:46
about this before but there's a lag
01:17:48
effect on a handful of components
01:17:51
specifically rents which when you roll
01:17:53
them into this inflation rate you're
01:17:55
going to see it really really turn over
01:17:57
very quickly right so we know that
01:18:00
inflation is falling it's going to fall
01:18:03
even
01:18:04
more the second thing Nick the third
01:18:06
chart here is you can see that now
01:18:08
validated in these 10-year break events
01:18:10
remember this was the chart we used to
01:18:12
look at when we were like holy mackerel
01:18:14
something's going to break in November
01:18:16
of
01:18:17
21 I think we probably should have just
01:18:20
sold everything we had in November 21 we
01:18:21
didn't do it but
01:18:23
the point is now we know and what you
01:18:26
see here is the 10-year break evens are
01:18:28
also telling us okay guys we're going to
01:18:30
be in a pretty decent
01:18:32
place and so I think the setup is
01:18:34
basically the following there's less
01:18:36
money in the system that's a
01:18:38
positive Nick if you show the last chart
01:18:40
there's more money on the sidelines and
01:18:43
this is just a picture of I mean look at
01:18:45
the amount of money in Money Market
01:18:46
funds 6 trillion and growing so that's a
01:18:51
really positive sign which is that money
01:18:53
will need to find a
01:18:55
home once Dr once no even just now
01:18:59
because you're gonna you're going to be
01:19:01
in a situation where and I'll get to
01:19:03
this in a second but companies are now
01:19:04
starting to perform because they've been
01:19:06
able to rebaseline against very very
01:19:08
lower expectations right and and money
01:19:10
managers have to do their job in deploy
01:19:13
capital and that's something we
01:19:14
mentioned I think last week but this is
01:19:16
now the beginning of the new fiscal year
01:19:18
for the entire mutual fund complex so
01:19:21
that's trillions of dollars that have to
01:19:23
get deployed because even though you pay
01:19:25
them a very small fee per year you're
01:19:28
not paying them to hold cash you're
01:19:29
paying them to make decisions and own
01:19:31
assets and then as you said freedberg
01:19:33
the last part of this is now you
01:19:35
introduce rate cuts and that's a real
01:19:37
accelerant now more than likely I think
01:19:40
what that means is that markets are set
01:19:42
up to to do pretty well Equity markets
01:19:45
specifically and so I went and I said
01:19:47
well how can we see some data that
01:19:50
proves that this is happening and what's
01:19:52
amazing is if you look at the
01:19:54
performance of what I would call the
01:19:56
most risk adjusted seeking companies so
01:19:59
those are Tech businesses that have been
01:20:02
absolutely hammered what you see in the
01:20:04
last month is they have gone just
01:20:06
nuclear aen up 30% in a matter of a week
01:20:10
door Dash is up you know 25 30% in a
01:20:13
matter of a week data dog up 30% in the
01:20:16
matter of a week these are the
01:20:17
businesses that were just completely
01:20:21
decimated so what is all of this saying
01:20:23
I think what what it's kind of saying is
01:20:25
inflation is very much in the rearview
01:20:27
mirror rates are going to get cut by the
01:20:30
middle part of the year the economy
01:20:32
looks like it's going to be a soft
01:20:34
Landing that is actually very beneficial
01:20:37
for the sitting
01:20:38
president it's also good for equities
01:20:40
it's good for
01:20:41
us so it's really interesting actually I
01:20:44
think we've had a fundamental kind of
01:20:45
now change J do you think this will have
01:20:47
an effect on the election cycle I think
01:20:49
it definitely could but I do think a lot
01:20:50
of people are still very concerned I
01:20:52
know the
01:20:53
the the the the inflation the the wages
01:20:56
wage inflation is still about 4% I think
01:20:58
that people are um are still just
01:21:02
nervous about what could come I think
01:21:03
there's been a lot of shocks and there's
01:21:04
been a couple of times where it's felt
01:21:06
that way um and I think that you know
01:21:08
election years traditionally bring a lot
01:21:09
more volatility to the market because
01:21:11
there's unpredictability about what the
01:21:13
policy will be going forward so I think
01:21:14
that of people who have kind of been a
01:21:16
little Whiplash from the the transition
01:21:19
of over the last year to 18 months see
01:21:22
that they're going into another cycle of
01:21:23
uncertainty I do think that you know now
01:21:25
you're actually getting paid to not do
01:21:27
anything uh with your money in those
01:21:28
money market accounts so there's less of
01:21:30
a maybe less of a fomo to kind of go out
01:21:32
and do something uh there so uh so I
01:21:35
think that a lot of people are still G
01:21:37
to be very much in kind of wait and see
01:21:38
mode and obviously look for for special
01:21:40
opportunities which I think will only
01:21:42
further exacerbate uh a potential
01:21:44
decline as well Jared last week we
01:21:46
talked about real estate you used to be
01:21:48
in the real estate business what do you
01:21:50
have any thoughts on Commercial Real
01:21:51
Estate and how
01:21:53
good bad average things are so I still
01:21:56
have a lot of exposure to commercial
01:21:58
real estate through my family's company
01:21:59
and uh we're mostly in the multif family
01:22:02
space I think the office space right now
01:22:04
is in for a massive uh change in the
01:22:07
industry I think you're going to see a
01:22:08
lot of the older buildings get uh get
01:22:10
transitioned a lot of them are trading
01:22:11
now for below uh land price which is
01:22:14
which is pretty remarkable I think you
01:22:15
have um you also have a transition in
01:22:18
kind of what are the cities of growth
01:22:19
right so you look at a place like San
01:22:21
Francisco uh and there's a big debate
01:22:23
over whether you know AI is going to
01:22:24
save you know the office Market there or
01:22:26
whether it's kind of like the Detroit of
01:22:28
this Industrial Revolution and it's just
01:22:30
never going to come back and then you're
01:22:31
seeing a lot of these San Francisco
01:22:32
companies move to New York and the New
01:22:34
York people are saying oh there's too
01:22:36
much crime and homelessness and they're
01:22:37
saying compared to San Francisco this
01:22:38
looks like a you know super it's it's a
01:22:42
beautiful place and so you know New York
01:22:44
is still doing I think okay but you're
01:22:46
seeing a lot of plays throughout the
01:22:47
country that that are but the
01:22:49
fundamental with real estate is it's
01:22:51
correlated to interest rates and so you
01:22:53
know if interest rates you know right
01:22:54
now I think the 10 years at like four
01:22:55
and a half if it goes up to to six
01:22:57
you're just going to see a repricing in
01:22:59
real estate assets if it settles at at
01:23:01
four and a half five then you'll you'll
01:23:03
probably see more stability and what
01:23:04
that will be but ultimately uh real
01:23:06
estates become much more
01:23:07
institutionalized over the last call it
01:23:09
two decades and it's really a function
01:23:11
of you know what are your your rent and
01:23:13
expense growths and then what kind of
01:23:14
what what can you borrow at and can you
01:23:16
create you know a positive yield that's
01:23:18
hopefully a good hedge against inflation
01:23:20
so I I think net net it will be great
01:23:22
asset class I mean it's probably one of
01:23:24
the biggest asset classes in the world
01:23:26
um I think right now though a lot of
01:23:28
people are just holding back because
01:23:29
they're not certain what the what the uh
01:23:32
what the multiples or cap rates as they
01:23:34
call them in real estate are going to be
01:23:35
on a forward basis but they're really
01:23:36
going to be a function of of what's the
01:23:39
growth in the economy going to be and
01:23:40
then also uh what the forward interest
01:23:42
rates will
01:23:44
be that's fair I think that everything's
01:23:47
challenged in real estate I mean the
01:23:48
demand size challenged because you've
01:23:50
had the whole work from home Co
01:23:52
disruption and a lot of cities haven't
01:23:54
fully come back I think New York's come
01:23:56
back at this point but like San
01:23:57
Francisco definitely hasn't I think New
01:23:59
York is something like 95% of workers
01:24:02
are back in the office I think in San
01:24:04
Francisco it's only like 45% so you've
01:24:06
got demand issues then you've got
01:24:07
financing issues you know um refinancing
01:24:11
is much more expensive because interest
01:24:12
rates are higher and then you've got
01:24:14
these cap rate issues where no one knows
01:24:16
what the long-term valuations are going
01:24:17
to be so everything's a mess and by the
01:24:20
way that that gets compounded by the
01:24:22
fact that now banks that have office
01:24:24
exposure are pulling back their lending
01:24:25
so you have a combination of you know uh
01:24:27
cost of borrowing being higher and then
01:24:29
the availability availability of
01:24:31
liquidity going lower and that's could
01:24:33
further compound a lot of these
01:24:34
refinances but a lot of what the people
01:24:36
I know in the industry are telling me is
01:24:37
that they're able just to work with
01:24:39
existing lenders and just do some kind
01:24:40
of uh extension and and you know just
01:24:43
kind of live to fight for another day to
01:24:44
get through the cycle and I will say in
01:24:46
New York that the the rental rates for
01:24:48
residential I think are at historic
01:24:50
highs and and actually what what my
01:24:52
family seen in their portfolio is that
01:24:54
their properties in Jersey City which is
01:24:56
basically like the six burrow of New
01:24:57
York are just absolutely on fire because
01:24:59
it's basically you know you go to New
01:25:01
York now you go to a CVS everything's
01:25:03
locked up you can't buy anything it
01:25:04
doesn't feel necessarily like the safest
01:25:06
city you go to Jersey City they actually
01:25:08
have like you know Law and Order and
01:25:09
rule of law and so um so you still take
01:25:12
a train to New York and that's actually
01:25:14
been a place that's done incredibly well
01:25:15
so you always have Micro markets and you
01:25:17
have different trends that that work and
01:25:19
don't work but uh but I wouldn't bet
01:25:20
against New York it's still amazing City
01:25:23
and one thing about New York is every
01:25:24
time I'm there I I always talk with some
01:25:26
of the cops and I basically ask them I
01:25:28
say if you had a mayor that said uh go
01:25:31
be cops go Be Cops nobody's gonna you
01:25:33
know hold you back you know get out of
01:25:35
the car do you do we got you back how
01:25:37
long would it take you to clean this
01:25:38
place up and the answer I get is usually
01:25:40
anywhere from like three months to six
01:25:41
months so like we could have this place
01:25:43
fixed so clearly they have to let us be
01:25:44
cops again and um and so I am hopeful
01:25:47
that you know eventually there'll be the
01:25:48
political will to just you know let New
01:25:50
York be what is it has the potential
01:25:52
poal to be it's such an amazing Dynamic
01:25:54
place it's such a good point I mean it
01:25:56
really is is just a matter of political
01:25:58
will yeah if you hire more cops and let
01:26:01
them do their job that will stop the
01:26:04
crime or certainly the incentive for
01:26:06
Crime right now people think they can
01:26:07
get away with this stuff and they don't
01:26:09
get prosecuted when they get caught the
01:26:11
jails are like a revolving door yeah
01:26:13
they have plenty of cops they just have
01:26:14
to let them do their jobs and they need
01:26:15
prosecutors who will Who will do their
01:26:17
jobs as well I I worked at Manan
01:26:18
District Attorney's office when I was at
01:26:20
myu law for the summer I mean you have
01:26:22
amazing people there and if they are
01:26:24
allowed to kind of follow the procedures
01:26:25
and just just do the job in the way it's
01:26:27
been done before uh you can make that
01:26:30
City very very safe very quickly we we
01:26:33
actually have a cop shortage in San
01:26:34
Francisco as well it's not just a matter
01:26:36
of not letting them do their job we
01:26:38
actually have a massive shortage the
01:26:40
city needs to hire a lot more they
01:26:43
allowed uh a pretty high rate of
01:26:45
attrition in the role I don't think
01:26:46
there's a lot of people who want to be
01:26:47
cops in San Francisco it's a pretty
01:26:49
tough job and they'll get a lot of
01:26:51
support so yeah we actually have a
01:26:53
shortage here and that's a big problem
01:26:55
yeah but it's very solvable as you say I
01:26:57
mean just hire more train them let them
01:27:00
do their jobs Jared how much do you
01:27:01
think um Federal deficits and the
01:27:04
federal debt matters going to this
01:27:06
election cycle is it going to be a top
01:27:08
topic or is it not really going to
01:27:09
matter and then more importantly how
01:27:10
consequential is it in reality I think
01:27:14
in reality it's it's massively
01:27:15
consequential um I think in the election
01:27:17
cycle I think both parties are going to
01:27:19
probably try to avoid talking about it
01:27:21
because I think that you know everyone
01:27:22
knows you know what I find in politics
01:27:24
is when some things are really big issue
01:27:26
people try not to talk about it that
01:27:27
much and um are gonna have to get cut
01:27:31
right the hope is is that you know um
01:27:34
once you get through the election things
01:27:35
can be done to to to have to deal with
01:27:37
it but it's definitely an issue that
01:27:39
needs to be dealt
01:27:40
with what do you think that is Raising
01:27:42
ra raising revenue or cutting expenses
01:27:44
or
01:27:46
both growth growth is the answer
01:27:48
everyone always gives that's that's the
01:27:51
political Cop Out answer growth 6%
01:27:53
economic GDP growth how about we freeze
01:27:55
spending until till the denominator can
01:27:57
grow big enough to reduce the I mean
01:27:59
balance budget amendment Etc but but
01:28:01
speaking of GDB growth I mean do you
01:28:03
guys want to cover Tech stories at AI
01:28:06
this week real quick before we WRA I
01:28:07
mean it's really can I get can I just uh
01:28:10
I got I can't resist getting Jared on
01:28:11
the record about uh the Russia Ukraine
01:28:14
war oh so I mean this is a war that I
01:28:17
thought was very easily avoidable you
01:28:18
have a one minute budget one minute
01:28:20
budget one minute that's all I need
01:28:22
starting the shot clock to's gonna ring
01:28:24
the gavl I'm gonna take a break go you
01:28:25
got 60 seconds well I think U I think
01:28:29
David's happy to have somebody on who
01:28:31
agrees with him on on on most of what
01:28:32
he's been saying uh so yeah we we worked
01:28:35
with uh with Ukraine and we worked well
01:28:36
with Russia uh during our four years uh
01:28:39
i' like to point out to people that uh
01:28:41
when we were in kind of our worst
01:28:42
moments in coid the the second country
01:28:44
that sent us plain load of supplies and
01:28:46
ventilators when New York looked like it
01:28:48
was you know on the verge of going under
01:28:49
was Russia and that was because we were
01:28:51
offering them the possibility of of
01:28:53
working together we armed Ukraine but we
01:28:55
also told Ukraine you know don't even
01:28:56
think about raising NATO um as a
01:28:59
membership as as a way to go I think
01:29:01
what happened was is the Biden
01:29:02
Administration uh you know had
01:29:04
conversations with Ukraine about joining
01:29:06
NATO Russia basically pushed their their
01:29:08
military to the front line to say we are
01:29:09
never going to let this happen if you go
01:29:11
through uh kind of the geography and the
01:29:13
history you understand why um you know
01:29:15
Russia you know we'll never let that
01:29:16
occur and I think it was right after you
01:29:18
know the embarrassment of what happened
01:29:20
with our withdrawal in Afghanistan where
01:29:21
they thought that we had a weak America
01:29:23
that was going to come and do much to it
01:29:25
so um I think it was all very very
01:29:27
avoidable I think that you know from
01:29:29
what I read and again I wasn't involved
01:29:30
in these conversations it did feel like
01:29:32
there were some off-ramps uh initially
01:29:34
but I do think that from our perspective
01:29:36
I think the number one interest has
01:29:37
always been how do we avoid a nuclear
01:29:39
war I don't think that that's uh that's
01:29:41
something we we want to see happen and I
01:29:42
do think that um I do think that
01:29:46
hopefully they'll be able to find some
01:29:47
kind of resolution to uh to to not have
01:29:49
that be a problem and I will say too
01:29:50
that that's impacting the middle least I
01:29:52
mean right now what's happening with uh
01:29:54
with Israel and with uh with the
01:29:55
Palestinians and Iran is basically a
01:29:57
proxy war for Russia I mean if the
01:29:59
America decided tomorrow let's change
01:30:01
and support the Palestinians then Russia
01:30:02
would come and be for Israel I mean
01:30:03
there's not a lot of ideology for them
01:30:06
in that but I think Russia and China
01:30:07
want to see the US stretched and
01:30:09
distracted so that we're we're less
01:30:11
focused on kind of the areas where we're
01:30:13
more directly uh in um in in conflict
01:30:16
with them and so I think that that's a
01:30:18
very major thing and I will say too like
01:30:19
I I think that you know I I don't
01:30:21
believe that that countries have
01:30:23
permanent allies or permanent enemies
01:30:25
you know I during my time in government
01:30:26
we deal with the Germans and the
01:30:27
Japanese who uh were vicious in World
01:30:30
War II and we'd be against the Chinese
01:30:31
and we'd be against the Russians who
01:30:32
were basically our our allies in World
01:30:34
War II and so um I don't think countries
01:30:37
really have friends I think countries
01:30:39
have have interests and I think that uh
01:30:41
with with most countries you have areas
01:30:43
of overlapping interest and I think that
01:30:45
uh you can find those even with
01:30:46
countries where you're in opposition for
01:30:48
so you know one of the the the operating
01:30:50
principles I I brought uh to all the
01:30:52
different foreign policy problem sets I
01:30:53
was given was don't condemn tomorrow to
01:30:56
be like yesterday because you think it
01:30:59
has to be and so I would always look at
01:31:01
something I'd try to pull whatever
01:31:02
optimism I could find and then say you
01:31:05
know what's the best case scenario from
01:31:07
a first principal's perspective I'd
01:31:08
start there and then I'd work through
01:31:10
all the problems uh that you had to try
01:31:12
to get there so um so so David I think
01:31:15
you've been uh way more right on Ukraine
01:31:17
than than others and uh and I do think
01:31:19
there's been a tremendous amount that's
01:31:21
been mismanaged by uh by the US and and
01:31:23
by the world in that in that scenario
01:31:25
and I think it's unfortunate too because
01:31:26
I think a lot of uh people have been
01:31:28
killed in that war and I I do think that
01:31:30
obviously the invasion of Ukraine was
01:31:32
was was a terrible thing it should never
01:31:33
have happened uh but I do think there's
01:31:35
a lot of um acts by leaders that could
01:31:38
have been done in order to either
01:31:40
prevent it or or minimize it and and I
01:31:42
still think that that's the job of of
01:31:44
leaders in the world is to try to do the
01:31:45
hard things and try to do the things to
01:31:47
to make the world a less volatile and
01:31:49
dangerous place you think it's coming to
01:31:51
an end
01:31:52
it's definitely lost its prominence it
01:31:54
does seem militarily um again I'm I'm
01:31:57
sitting here in Miami you know reading
01:31:59
you know you know X and and newspapers
01:32:01
and talking to folks so I mean I'm not
01:32:03
going to Pine like I'm a general on the
01:32:05
front lines but um but it does seem like
01:32:08
it's kind of reached the point where
01:32:09
it's not much is going to change
01:32:11
militarily and uh and and you know again
01:32:14
like every day that goes on there's just
01:32:16
more life that's being lost and again I
01:32:17
said the same thing with Israel that I'd
01:32:19
say here I mean Russia and Ukraine both
01:32:21
have unbelievably brilliant people if
01:32:23
you take all these these young men and
01:32:24
you take them off the battle lines and
01:32:26
put them back into you know their jobs
01:32:28
of of creating things I just think that
01:32:29
that that's just a much better thing for
01:32:31
the world so uh my hope is that you know
01:32:34
the leaders involved try to find a way
01:32:35
to get to a resolution uh again you know
01:32:37
I think that you know both sides have
01:32:39
maybe over promised their people what
01:32:41
what victory looks like but that's the
01:32:42
job of negotiation right you need to you
01:32:44
know you need to find an off-ramp for
01:32:46
everyone and get them to a place where
01:32:47
we can you know start focusing on how to
01:32:49
make tomorrow better instead of
01:32:51
grievances from the past do you guys see
01:32:53
that sunny sunny tweeted this thing he
01:32:55
had dinner last night with
01:32:58
Farhan who the VP of engineering at
01:33:00
Shopify did you see his tweet can you
01:33:03
find it he said that
01:33:05
Shopify has written more than a million
01:33:08
lines of code with co-pilot already oh
01:33:11
wow I was like what yeah I mean I don't
01:33:16
exactly know how there's your there's
01:33:17
your GDP growth Jared well that's
01:33:21
definitely growth I wonder whether it'll
01:33:23
be it'll be
01:33:25
GD I mean I think I think it will I
01:33:28
think a lot of product productivity
01:33:30
gains are going to drive the economy
01:33:32
forward historically I was just talking
01:33:34
with someone this past week about over
01:33:36
the last couple of decades we've seen a
01:33:38
massive shift on GDP growth being driven
01:33:42
largely by labor the labor force growing
01:33:44
and labor participation and increasingly
01:33:47
in the last couple of years there's been
01:33:48
this tremendous shift that all GDP
01:33:50
growth has predominantly driven by
01:33:53
productivity gains and productivity
01:33:55
gains you know economically net their
01:33:57
way through the uh the system and you
01:33:59
see the the total GDP grow this is the
01:34:01
whole argument for AI particularly at A
01:34:03
Moment Like This that if you're having a
01:34:05
declining population you're having
01:34:06
declining labor
01:34:07
participation people want to work fewer
01:34:09
hours if you want to keep growing the
01:34:12
economy in order to sustain the debt and
01:34:13
the services that you provide through uh
01:34:16
government infrastructure you have to
01:34:18
grow the economy and you have to
01:34:19
increase productivity it's the only Way
01:34:21
Forward I mean like you could have one
01:34:24
it's not like you're going to fire
01:34:24
Engineers you're just going to have one
01:34:26
engineer do five times as much da you
01:34:28
just solved the whole budget deficit and
01:34:30
a debt issue you found the answer it's
01:34:34
Pro productivity driven by by the AI
01:34:36
advancements which by the way there is a
01:34:37
lot of tremendous productivity gains
01:34:39
that will occur because of this I always
01:34:41
give people the example of the tractor
01:34:43
like when the tractor came around it's
01:34:45
not like you know people were like Hey
01:34:47
we're going to make less food now or you
01:34:48
know what happened was we were able to
01:34:50
farm 10 times as much
01:34:52
and you know total output increased and
01:34:54
when total output increased there was an
01:34:56
abundance of surplus of food of calories
01:34:58
that fed people population grew the
01:35:01
overall economy grew there's no point in
01:35:03
history that we've had a productivity
01:35:05
gain through technology that didn't
01:35:08
ultimately grow the economy like it's
01:35:10
never well ever gone the other way in
01:35:13
1900 I think about 50% of workers in
01:35:16
America Were Somehow involved in
01:35:18
agriculture and by don't Yeah by 2000 it
01:35:22
was down to like 2% so it's not like we
01:35:24
had a 40% unemployment rate all lab
01:35:27
figured out a way to do new and
01:35:29
productive things and that led to more
01:35:31
wealth that being said it did cause a
01:35:33
lot of social disruption and I think
01:35:35
certain job classes went away it had to
01:35:37
get replaced by others that had to be
01:35:39
invented if you think about a world
01:35:41
where there's a
01:35:42
million little companies or 50 million
01:35:45
companies or 500 million companies that
01:35:48
exist because they're one in two person
01:35:50
teams that can build stuff that seems
01:35:52
pretty reasonable and logical as the
01:35:55
outcome there's a lot of sort of
01:35:59
like Financial
01:36:02
engineering that kind of goes away in
01:36:04
that world right I think the job of the
01:36:06
venture capitalist changes really
01:36:08
profoundly I think there's a reasonable
01:36:10
case to make that it doesn't exist it's
01:36:12
more of an automated system of capital
01:36:15
against objectives right and that you
01:36:18
want to be making many many many small
01:36:21
,000 $500,000
01:36:23
bets and then you get to this much
01:36:25
larger scale where then you once you get
01:36:27
someplace you can go and get the $200
01:36:29
million checks I don't I don't know how
01:36:32
else all of this gets supported
01:36:34
financially well so there were there
01:36:36
were a couple big news stories this week
01:36:38
one was Elon launched grock which is a
01:36:42
uh chat GPT call it competitor it took
01:36:46
them about under his xai business unit
01:36:49
took him about eight months to train
01:36:50
grock one which is the model uh and by
01:36:54
many measures is as performative as GPT
01:36:56
3 and a half GPT 4 at the same no no
01:36:59
grock zero it took three months to train
01:37:01
grock zero he's still training grock one
01:37:03
sorry three months to train grock zero
01:37:04
yeah Kaiu Lee you guys know Kaiu yeah he
01:37:09
was at Google he was at microsof search
01:37:11
yeah and he is um in China and
01:37:15
built uh his business starting eight
01:37:18
months ago and in those eight months uh
01:37:22
he's now delivered a 34 billion
01:37:26
parameter model that he's completely
01:37:28
open source that he shows by again some
01:37:30
performative metrics outperforms llama
01:37:34
2 and again doing it from China speaks I
01:37:38
think really clearly and importantly to
01:37:39
the point we talked about last week
01:37:41
about if the US tries to
01:37:50
overregulation move and again this was
01:37:52
done in 8 months and then it's almost
01:37:56
like the timing was perfect CU in the
01:37:58
same week open aai responds with
01:38:01
developer day they didn't necessarily
01:38:03
respond but they had developer day on
01:38:04
the books for a long time and at
01:38:06
developer day open AI released a number
01:38:08
of really powerful tools for developers
01:38:11
that allow them to build really powerful
01:38:13
applications and infrastructure on top
01:38:16
of open ai's platform so they uh
01:38:19
released apis for Dolly 3
01:38:21
four cents to generate an image using
01:38:24
the dolly 3 API they launched a tool to
01:38:27
create your own GPT which can actually
01:38:30
leverage proprietary data so from within
01:38:32
your own database you're in your your
01:38:34
own data Lake you can build a a GPT that
01:38:37
you can then integrate into applications
01:38:40
and GPT 4 Turbo with two versions that
01:38:44
had you know pretty powerful pricing
01:38:46
improvements all of this um being said
01:38:48
it's a it's a big leap forward in what
01:38:51
feels like a lowcost low friction
01:38:52
multimodal developer friendly set of
01:38:55
tools from open AI that allows them to
01:38:58
move away from having the quote best
01:39:00
model to now having what feels like much
01:39:03
more of a platform business that as more
01:39:05
um applications and more developers
01:39:07
start to utilize open AI toolkit and
01:39:11
services a real uh ecosystem starts to
01:39:14
develop and that creates a sustainable
01:39:16
business mode rather than just the
01:39:18
technical mode that open AI started with
01:39:20
so I think the big point is that we're
01:39:22
seeing the technical Gap narrow between
01:39:26
the best and the average or the worst
01:39:27
and the median in model development
01:39:31
we're also now seeing that the Evolution
01:39:33
for a lot of these businesses is through
01:39:35
open AI trying to build you know
01:39:37
applications on top of a platform and
01:39:40
build a business mode and so there's a
01:39:41
real shift underway but net net I think
01:39:43
what the Market's forcing everyone to do
01:39:45
is really compete and build these
01:39:47
incredible capabilities that are really
01:39:48
going to launch a number of new business
01:39:50
models new Innovations I the question is
01:39:53
are we building apps for the IOS app
01:39:55
store or are we
01:39:56
building web pages for the open internet
01:39:59
and I think open ai's hope is that it's
01:40:01
apps for the App Store because it's
01:40:02
proprietary and they own it they could
01:40:04
take a share I think the reality is it's
01:40:06
going to end
01:40:07
up as the open web and again I think
01:40:11
it's mostly because everybody else just
01:40:14
can't afford to let one company run away
01:40:16
with it and so you know whether it's
01:40:18
llama or mistol or even grock when Elon
01:40:20
opens ources it it's going to allow
01:40:24
people to have access to these tools
01:40:27
basically for
01:40:28
free the problem that I think it creates
01:40:31
is you know we had a you know when I
01:40:33
first came to the United States my the
01:40:36
the company that I worked at AOL they
01:40:40
were the ones that believed in a
01:40:41
fundamentally closed internet right and
01:40:43
you had this service and you went into
01:40:46
the Walled Garden of AOL and then the
01:40:48
pendulum swung over the last 20 years
01:40:50
and we opened it up at Facebook and at
01:40:52
other places and now we have this
01:40:53
fundamentally open architecture the
01:40:56
problem now is these models will not get
01:40:58
better unless you have fine-tuning that
01:41:00
happens by yourself or these
01:41:02
reinforcement learning loops that come
01:41:04
from data that you
01:41:06
control and you can see it with Gro Zero
01:41:09
part of what makes grock really
01:41:11
successful is that Elon and only Elon
01:41:15
can give access to the xire hose to Gro
01:41:19
now that's a ginormous repos repository
01:41:21
of proprietary data that they're going
01:41:22
to be able to train on so then the
01:41:25
question is well obviously then Facebook
01:41:26
will want to train their models on
01:41:28
Instagram and their models on WhatsApp
01:41:30
Google will want to train Gemini on
01:41:33
Gmail none of those companies will want
01:41:36
to make that available to any other
01:41:38
model and so the unfortunate byproduct
01:41:41
of a more of of foundational models that
01:41:44
are more pervasive is going to be that
01:41:46
the internet gets a little bit more
01:41:48
closed in the short term and we're going
01:41:50
to have to really figure out what the
01:41:52
implications of that are so I think what
01:41:53
that means economically is there's just
01:41:55
going to
01:41:56
be a lot more small companies and a lot
01:42:00
fewer of these ginormous outcomes and
01:42:02
that's on balance probably better for
01:42:05
you know Innovation and the economy
01:42:07
probably yeah data is the advantage not
01:42:09
the model itself you have to you have to
01:42:12
own some data asset that is unique so
01:42:15
that you can train these models and then
01:42:17
you have to close it off so nobody else
01:42:19
can have access to it and that has to be
01:42:21
an explicit business decision because it
01:42:23
would be foolish for you to not do that
01:42:27
sax did you take anything away from this
01:42:28
week's announcements with Kaiu Elon and
01:42:31
open AI developer day grock is
01:42:33
interesting as an AI because it has a
01:42:34
sense of humor I mean that's what's kind
01:42:37
of interesting about the user experience
01:42:38
is it tries to be funny it has a sense
01:42:40
of irony um it's also willing to be more
01:42:43
Politically Incorrect and I think one of
01:42:45
the concerns about cat GPT early on was
01:42:48
that it was programmed to be woke and
01:42:50
that it wasn't giving people you know
01:42:53
truthful answers about a lot of things
01:42:54
that the censorship was being built in
01:42:56
to the to the answers and there was a
01:42:57
lot of examples very early on where it
01:43:00
seemed like there was some sort of trust
01:43:01
and safety layer that had been built on
01:43:03
top of the AI and sometimes it would
01:43:05
intervene and not give you the true
01:43:08
answer that came from the AI it would
01:43:09
give you kind of some madeup boiler
01:43:11
plate and so having something like grock
01:43:14
around will at a minimum keep open AI
01:43:18
honest and keep you know keep chat GPT
01:43:20
honest
01:43:21
because if it's willing to give you
01:43:23
truthful answers about things that you
01:43:24
can compare to the chat GPT answer then
01:43:27
we're going to know when these like
01:43:28
so-called trust and safety interventions
01:43:30
are are happening so I think that's kind
01:43:32
of
01:43:33
interesting separately the open AI
01:43:36
developer day shows that that company if
01:43:40
you want to call it that I don't know if
01:43:41
it's a company or Foundation or what but
01:43:43
it's a complicated legal entity uh I
01:43:46
mean what say those are details are yeah
01:43:49
those are details um I mean they are
01:43:52
really um Trucking along at full speed I
01:43:55
mean it is pretty impressive what
01:43:57
they're shipping yeah the and even if
01:44:01
the underlying language models get
01:44:03
somewhat commoditized it does seem like
01:44:06
they're building a very robust developer
01:44:08
ecosystem so you could analogize it to
01:44:11
something like stripe where credit card
01:44:13
payments are pretty much a commodity but
01:44:15
everyone uses a stripe because their Dev
01:44:17
tools are so good and then they're able
01:44:19
to get to a bunch of scale Network
01:44:21
effects because again their developer
01:44:23
platform is so good so I do think that
01:44:25
that's the advantage of open AI may not
01:44:27
be the model itself although I think I
01:44:30
think their model is actually pretty
01:44:31
good but it's is it that much better
01:44:32
than llama 2 probably not but the the
01:44:35
developer platform is getting really
01:44:36
good and I that's a really interesting
01:44:39
analogy because if you play that out and
01:44:40
you say is AI like
01:44:43
payments well what does a payments
01:44:45
landscape look like in terms of
01:44:46
companies that have real Enterprise
01:44:48
Value there are I guess three or four
01:44:50
big ones and then there's a bunch of
01:44:53
longtail ones in specific geographies
01:44:55
because there're these random rules in a
01:44:57
country and you build something to be
01:44:59
very specific to it and you have value
01:45:02
in that market or in that use case and
01:45:05
maybe there's a maybe there's an analogy
01:45:07
there and how this Market develops in
01:45:08
that sense there's four or five big
01:45:10
foundational models and then there's a
01:45:11
bunch of small vertical use applications
01:45:13
that you use depending on what the task
01:45:15
is well the time and the cost to build
01:45:16
new foundational model seems to be
01:45:17
shrinking at a pretty fast clip so by
01:45:20
the way all of this happened on h100s
01:45:24
yeah and a bunch of these happened on
01:45:26
a100 so we're still one generation of
01:45:28
silicon behind so to your point this
01:45:31
thing is going to be like people will be
01:45:32
training models in weeks yeah so let's
01:45:35
go ahead and track all the world's
01:45:37
models and have a federal regulatory
01:45:39
body overseeing all of this
01:45:42
well I have a guy from the UK on an H1B
01:45:45
so I'm still filling out the TPS report
01:45:47
because he I told him don't touch the
01:45:48
model and he did yeah
01:45:51
jar you follow all this yeah yeah
01:45:54
definitely following high level from my
01:45:55
perspective I I think it's it's great
01:45:57
especially with what you mentioned about
01:45:58
Kaiu Lee it just confirms what we've
01:46:00
what we've thought which is that America
01:46:02
is definitely leading in this and I
01:46:03
think that it's just important to to
01:46:05
note that they're leading be really
01:46:06
because of the private sector and the
01:46:07
fact that the private sector has been
01:46:08
allowed to do what they do and you as we
01:46:10
start to think about the regulatory
01:46:12
Frameworks I mean you could think of a
01:46:13
open AI as a as a company or a
01:46:15
foundation or even as a nation state
01:46:17
with with kind of the amount of power
01:46:18
that these things will have the ability
01:46:20
to to harness once they're they're fully
01:46:23
scaled and I I just think it's it's it's
01:46:25
going to be very interesting to see I
01:46:26
think the more uh compe competition you
01:46:29
have here I think the better uh will be
01:46:30
very very good but I do think you want
01:46:32
the most powerful um uh models the most
01:46:35
powerful platforms to be in the hands of
01:46:37
people who are going to try to apply it
01:46:39
for all the right uh all the right
01:46:41
things for society so I think that
01:46:43
there's a lot of positive applications
01:46:44
there's a lot of negative applications
01:46:46
that can come from this um and my hope
01:46:48
is that the regulatory Frameworks that
01:46:49
are developed uh won't stifle Innovation
01:46:52
at the expense of allowing others to get
01:46:53
ahead of us who will probably use them
01:46:55
in um in ways that we would not want to
01:46:57
see them used right can I fly a couple
01:46:59
of features that open AI announced that
01:47:01
I think are interesting yeah yeah as
01:47:03
long as you don't repeat what I said
01:47:04
because you weren't paying attention but
01:47:05
yeah go for well did you mention the
01:47:07
well if I got this wrong we'll delete it
01:47:09
but did you mention the 128k context
01:47:11
window no he did not I did not I did not
01:47:15
I think it's kind of a big deal what
01:47:17
that means is you can have a prompt that
01:47:19
has pages of text in it yes I'll tell
01:47:23
you like several months ago I was trying
01:47:24
to figure out like is there a way where
01:47:26
I could just put all of my blog posts in
01:47:29
a prompt for chat GPT and have it turn
01:47:31
into a book for example and I was I was
01:47:35
kind of like a problem I just started
01:47:37
working on it was actually very
01:47:38
complicated try and solve that also like
01:47:40
also Vector DBS were a totally useless
01:47:43
intermed like that abstraction didn't
01:47:44
need to exist that's all gone now too
01:47:46
they're doing those guys are firing on
01:47:48
all cylinders it's really it's really
01:47:50
impressive to see yeah the other thing
01:47:52
is multimodal I mean so they're really
01:47:54
stressing the idea of
01:47:56
combining text with photos I guess
01:48:00
videos will eventually come later um
01:48:03
Text to Speech but again having multiple
01:48:05
kinds of inputs and outputs for the AI I
01:48:08
think it's kind and proprietary where
01:48:10
you can plug in your own proprietary
01:48:12
data source I mean it's just a game
01:48:13
changer for a lot of Enterprise
01:48:15
customers I think those developers are
01:48:16
going to go nuts I heard a lot of
01:48:18
positive feedback from developer I know
01:48:20
who attended and sounds like it was very
01:48:23
positively
01:48:24
received okay well this has been great
01:48:26
Jared thank you so much for joining us
01:48:28
today it was really great to spend time
01:48:30
together this is the point in the show
01:48:31
where you tell David saaks that you love
01:48:33
him and uh he says right back at you
01:48:36
guys I want to say stick in 153 episodes
01:48:40
but finally there's a person that I can
01:48:42
say I'm now the second best looking guy
01:48:44
on this pod so Jared thank you for
01:48:46
coming on
01:48:48
oh you guys are the best I'm going to
01:48:50
come back more often that if you'll have
01:48:52
I get treated better here than I do in
01:48:54
my home so it's good so so do we that's
01:48:56
what expect so much yeah try we hang out
01:48:59
together but thank you guys for having
01:49:01
me on and and really thank you for all
01:49:02
the different um you know important
01:49:04
conversations you have and again I've
01:49:06
met a lot of people who listen to you
01:49:07
guys over the time and uh they all find
01:49:09
that you guys give them a lot of good
01:49:10
input into a lot of the issues that are
01:49:13
impacting our our daily life so thank
01:49:14
you for the opportunity to be with here
01:49:16
today thanks for being here yeah thanks
01:49:17
for being here thank you very much
01:49:20
let your winners
01:49:22
ride Rainman
01:49:27
David said we open source it to the fans
01:49:30
and they've just gone crazy with it love
01:49:32
queen
01:49:34
[Music]
01:49:39
of Besties
01:49:42
are that's my dog taking your
01:49:46
driveway man oh man myit
01:49:51
we should all just get a room and just
01:49:52
have one big huge orgy cuz they're all
01:49:54
this useless it's like this like sexual
01:49:56
tension that they just need to release
01:49:57
[Music]
01:50:03
somehow we need to get
01:50:09
[Music]
01:50:17
mer
