00:00:00
check out you have a really long nose
00:00:02
hair thank you on your on your left this
00:00:04
one here this side yeah yeah okay hold
00:00:06
on one side you see it Nick you see it
00:00:08
see that you can see it take care of it
00:00:10
every show we have this issue every show
00:00:12
he's got all this like I'm getting old
00:00:14
man here so I feel like sex oh you gotta
00:00:16
get a grooming tool I am tired of
00:00:18
treasure hunting
00:00:19
a lawn mower manscape makes one I'm
00:00:22
gonna get it yeah just look in the
00:00:24
mirror bro can you come over on the way
00:00:26
to Parker Freeburg and help me manscape
00:00:28
yeah you're not coming to Poker don't
00:00:30
come to Poker if I manscape can I come
00:00:32
to poke foreign
00:00:35
[Music]
00:00:49
okay so jaycal you're gonna be a
00:00:51
participant today
00:00:53
the world's greatest moderator is taking
00:00:55
a week off to allow his voice to recoup
00:00:57
to recover to heal so he can come back
00:01:00
blaring with his usual mid-sentence
00:01:03
interruptions and excellent moderating
00:01:05
tactics next week we with his Foghorn
00:01:08
Leghorn moderation we are gonna We Are
00:01:10
Gonna Miss You at the moderation welcome
00:01:12
to the top 20. sax you're welcome
00:01:14
welcome to the top 20 podcast in the
00:01:16
world okay well hold on who should be
00:01:18
thinking whom I mean you've been doing
00:01:19
this for 10 years I walk in here off the
00:01:21
street all of a sudden we're top 20.
00:01:23
yeah let me explain something to you
00:01:24
number one blog in the world I created
00:01:26
it with my guys Engadget okay top five
00:01:29
magazine in the world then I do a
00:01:30
podcast with you three idiots and all of
00:01:32
a sudden I drop down to top 20 in this
00:01:33
medium so drop what are you talking
00:01:35
about yeah exactly I drop this has been
00:01:38
a b tested no I mean this week it
00:01:40
started I don't want to embarrass you
00:01:41
but look at twist ratings compared to
00:01:43
ours this weekend startups is about
00:01:45
startups it is a niche Audience by
00:01:47
Design and it's the number one startup
00:01:49
podcast in the world that's what you
00:01:50
wanted this show to be the show is about
00:01:52
all topics
00:01:54
every time we try to talk politics
00:01:56
you're like it's too much politic sex I
00:01:58
think you're talking about free bird I
00:01:59
think you're talking about Freeburg
00:02:00
let's focus on narrow legalistic
00:02:03
technicians that's true you we had this
00:02:05
discussion sax and I said we should
00:02:07
always do the top story of the week even
00:02:08
if it's politics and now it's taking
00:02:10
credit for my insight about McLaughlin
00:02:12
group I saw you on some pod who was it I
00:02:16
absolutely designed this pod around
00:02:17
McLaughlin
00:02:19
group everybody said McLaughlin group
00:02:22
okay it's possible for two people to
00:02:24
have the same idea sex we both grew up
00:02:27
on McLaughlin group that's why we're
00:02:28
both cantankerous [ __ ] moderator
00:02:30
intervention cut it out
00:02:32
no one is individually responsible for
00:02:35
this podcast it was Tim Ferriss Yeah Tim
00:02:37
Ferriss here's what happened so I was on
00:02:40
YouTube and um you know I'm not gonna
00:02:42
watch some two-hour like podcasts with
00:02:44
Jay Cal of course but for some reason
00:02:47
for some reason Tim Ferris
00:02:51
10 minutes of Jacob the video is called
00:02:54
the origin of the all-in podcast I can't
00:02:56
stand what he does oh God here we go I
00:02:58
can't stand what he does that yeah so
00:02:59
I'm like okay so I gotta watch this it's
00:03:01
in the partnership agreement he said
00:03:02
here's the the party line and jaycal
00:03:04
will not stick with it because we're
00:03:05
going to recreate and watch this I got
00:03:07
to see this alternative reality that
00:03:09
Jacob's trying to create about the
00:03:10
origin of the ball excuse me I wrote I
00:03:13
wrote in our leadership history yes and
00:03:15
I changed no yeah the origin story that
00:03:18
you signed up to are you saying you
00:03:19
changed the origin story
00:03:21
Remains the Same no it doesn't you call
00:03:23
me after CNBC the origin story that he
00:03:26
told Tim Ferriss which is like a
00:03:27
10-minute story of how he created the
00:03:29
whole thing the concept was his it was
00:03:30
based on McLaughlin Group which I'm the
00:03:32
one creation concept is mine obviously
00:03:34
by default how I moderate the program is
00:03:36
by my design yes you didn't come up with
00:03:39
this concept especially your Chagrin of
00:03:41
course I did no of course I designed my
00:03:44
moderation I was the first one who said
00:03:46
we should record us having conversations
00:03:49
at the poker table no that idea came
00:03:52
from him right that's why it's called
00:03:53
the all in pod no I came up with the
00:03:55
name all in number one number two was
00:03:57
his idea to tape a pod because he came
00:03:59
out to see me anyway who cares the pod's
00:04:01
here it's successful
00:04:03
why do you keep going on podcasts
00:04:05
telling everyone that you're the
00:04:06
Mastermind of the all in pod people are
00:04:08
saying out the game other podcasters
00:04:11
I'll explain to you other podcasters are
00:04:13
in awe of my ability to moderate you
00:04:15
three mile contents you did not have the
00:04:18
idea for the foursome based on
00:04:19
McLaughlin group that happened that
00:04:21
happened spontaneously as a result of
00:04:24
the fact that no Freeburg was I think
00:04:26
the first guest I was the second guest
00:04:28
then we did the four of us together okay
00:04:33
it was a jam session that worked out
00:04:35
that's okay fine the way that the way I
00:04:38
moderate this is of note to the world's
00:04:41
greatest podcasters they want to know
00:04:42
Jake out how do you take three
00:04:44
misanthropic malcontents and make them
00:04:48
actually palatable to the world and I
00:04:49
say you know what because I am the
00:04:51
world's greatest moderator and someone
00:04:52
like Tim Ferriss wants to know excuse me
00:04:53
excuse me what makes me a misanthropic
00:04:56
male content exactly just your behavior
00:04:59
in world view
00:05:03
and what does my world view your
00:05:05
absolute contempt for Humanity
00:05:09
no you're amazing it's a joke it's
00:05:12
called a joke it's called a joke oh now
00:05:15
you set them off jaycal you really that
00:05:16
that hurt you should apologize
00:05:18
it's called a joke I think you guys are
00:05:21
wonderful
00:05:22
I think you guys were wondering well I
00:05:23
mean I may be misanthropic but
00:05:24
malcontent I'm not no Saxon freebing are
00:05:26
the mountain that's for sure I'm not
00:05:28
content I'm pretty damn happy you're
00:05:29
happy the last descriptor anybody who
00:05:32
knows you would ascribe to Friedberg was
00:05:34
happy no I would say no I think he's
00:05:36
happy he's anxious but he's happy yeah
00:05:38
he's anxious but happy did you see the
00:05:41
roast
00:05:42
that was not a happy man that was
00:05:44
tearing you up that was funny yeah that
00:05:47
was okay
00:05:49
yeah that was venting yeah that was rage
00:05:53
no I think I think when Freebird tries
00:05:55
to be funny it comes out kind of mean
00:05:57
yeah maybe that's true it's been a rage
00:06:00
the only person that sets me off into
00:06:02
making me unhappy is you Jay Cal I mean
00:06:04
like the four of us could go to therapy
00:06:07
or we could keep recording this podcast
00:06:08
every week which is cheaper I think it's
00:06:11
cheaper for us to just record the Pod
00:06:13
you know what I for one am thankful to
00:06:15
whoever gave you whatever sickness you
00:06:18
have that causes you to not be able to
00:06:19
talk this week okay great you're talking
00:06:21
a lot for a guy who can't talk cause
00:06:24
you're coming at me
00:06:26
be nice to me while we're talking about
00:06:28
all kinds of random stuff
00:06:30
the number two thing that I see in the
00:06:33
what's happening tab on Twitter right
00:06:34
now is how Ron DeSantis is getting
00:06:37
blasted for Banning AP African-American
00:06:40
studies because he thinks it falls under
00:06:43
the stop woke act that's this the
00:06:46
headlines it's going absolutely nuclear
00:06:49
on Twitter right now here are some of
00:06:50
the quotes shocking Ron DeSantis has
00:06:53
banned all caps the teaching of AP
00:06:54
African American studies in Florida
00:06:56
Florida has gone from don't say gay to
00:06:59
don't say black next tweet claiming it
00:07:01
violates the stop book act and has no
00:07:03
educational value Florida Governor Ron
00:07:05
DeSantis has banned AP African American
00:07:07
studies from schools let me make a
00:07:09
prediction right now this will all red
00:07:10
down to his advantage
00:07:12
the same people who said that he was
00:07:14
death scientists for basically not
00:07:17
instituting coveted lockdowns he was
00:07:18
proven correct then they said that this
00:07:20
bill that prohibited the teaching of
00:07:22
gender fluidity to five-year-olds they
00:07:25
quite try to claim that was a don't say
00:07:27
gay Bill 70 of Florida supports that
00:07:29
that went down to his Advantage I don't
00:07:31
know the story behind this particular
00:07:34
course but if the question is whether
00:07:36
CRT is going to be funded by the state
00:07:39
and he's preventing that again I think
00:07:40
that'll be a 70 popular issue so let's
00:07:43
just wait and see how this plays out
00:07:44
fair enough I just want to claim that my
00:07:47
spread trade maybe it's tough to be the
00:07:50
leader in the Republican nomination
00:07:52
process in January of 2022. it's
00:07:55
starting yeah
00:07:57
the front runner in either party but I'd
00:08:00
say the bigger threat to the santis is
00:08:02
there's a new poll
00:08:03
where Trump came out on top so Trump's
00:08:07
still his biggest threat yeah so
00:08:09
unfortunately jaycal may be right that
00:08:12
the Republicans may do something stupid
00:08:13
here and a nominate a candidate who's I
00:08:17
think less electable than DeSantis I
00:08:19
actually don't take any joy in it I
00:08:20
actually I think Nikki Haley's going to
00:08:22
come out of nowhere and win this thing
00:08:23
well it's possible I you know I I really
00:08:26
would like to see some non-political
00:08:29
non-career politicians run for office
00:08:32
the Bloomberg you know sort of category
00:08:34
it feels like these career politicians
00:08:37
are just really really bad at executing
00:08:40
his scumbags you know you know who likes
00:08:42
Nikki Haley who
00:08:44
Democrats Democrats why you guys why why
00:08:48
do we like her obviously polarizing
00:08:50
she's polarized so she's a safe
00:08:52
establishment Republican who basically
00:08:54
is not going to put up any Fierce
00:08:56
resistance to what the Davos crowd wants
00:08:59
to do I don't think that's true I think
00:09:01
she was pretty she liked another
00:09:02
Republican nomination I don't think she
00:09:04
cares about Davos people to save her
00:09:06
life I think that she is a moderate
00:09:08
reasonable person who had to govern in a
00:09:10
Southern state and got everybody on
00:09:12
board
00:09:13
that's that's pretty crazy she's a
00:09:15
pro-life person who negotiated a 20-week
00:09:19
support for abortion in 2014. so this is
00:09:24
a person that knows how to get stuff
00:09:25
done South Carolina happens to be the
00:09:28
state that's actually at the Leading
00:09:29
Edge of climate transition she's had
00:09:32
more jobs and more money coming into a
00:09:35
southern red state of people and
00:09:37
companies willing to build for climate
00:09:39
change than any other state in the
00:09:40
country so you like her I don't know
00:09:42
she's just she's so I just think that
00:09:44
she's actually like normal and sane and
00:09:46
not an idiot would you vote for her
00:09:48
absolutely over Biden absolutely
00:09:50
absolutely interesting 100
00:09:53
so yeah look if you're really willing to
00:09:55
vote for then that's interesting
00:09:56
absolutely I would she's you know she's
00:09:59
young her parents had a small business
00:10:01
she was a small business person
00:10:03
it's tough to be a winner at all of
00:10:06
those levels
00:10:08
and she managed to do it I mean how do
00:10:10
you as a brown woman get elected to
00:10:12
governor of South Carolina and do a lot
00:10:16
of really good stuff that's kind of
00:10:18
tough yeah so I don't know I think she
00:10:20
deserves a close look and she's the only
00:10:22
one that didn't kowtow to Trump she was
00:10:24
able to play the game manipulate him get
00:10:27
him to be on her side and then still
00:10:28
told him to go pounce in that's pretty
00:10:30
cool well a lot of a lot of Governors
00:10:32
managed to do that I don't know what I'm
00:10:34
saying I'm saying she got she she went
00:10:36
to the United Nations she did what she
00:10:38
needed to do there
00:10:39
that's an important role at that time
00:10:42
actually Nikki Haley expressly has said
00:10:44
she will not run if Trump runs so she's
00:10:46
kowtowed to Trump too she wanted to be
00:10:48
his VP right like she was trying to
00:10:50
shank uh Pence right that was her plan
00:10:52
maybe it's a smart strategy but she said
00:10:55
she will not run against Trump the main
00:10:57
alternative to Trump in the Republican
00:10:58
party is DeSantis and then I'd say the
00:10:59
number three in the Republican party
00:11:01
after Trump into census Glenn young
00:11:02
right now huh based on what metrics
00:11:05
based on interest in the party and you
00:11:08
know I've talked to people and I think
00:11:09
the polling will eventually reflect this
00:11:10
he's very talented Jake how you talk
00:11:13
about appealing to Independence he was
00:11:15
able to win a blue State remember
00:11:17
Virginia went for Biden by 10 points and
00:11:21
Yanko was able to win that state if you
00:11:23
ever listen to any game campaign he's a
00:11:24
very talented campaigner I think yonkin
00:11:26
is very very talented don't get me wrong
00:11:28
and I think that he would be an
00:11:29
extremely credible candidate for
00:11:31
president here's the thing that yonkin
00:11:33
will get destroyed on is he's literally
00:11:36
not been in the job for but for a few
00:11:38
you know 18 months so he hasn't done
00:11:42
anything and I think that if it does
00:11:44
boil down now it may not matter
00:11:46
right because look Obama was a senator
00:11:49
for two years or whatever right so it
00:11:51
may not matter but to the extent that
00:11:53
Republicans demand some Bona fides I
00:11:56
think that you'll see Trump and DeSantis
00:11:58
attack yankin more viciously
00:12:01
in a presidential primary then they
00:12:03
attack Haley on that dimension of you
00:12:06
have no experience and it'll be hard for
00:12:08
him to back it up just one final point
00:12:10
you know forget the Steel Man the other
00:12:12
side so final point we got it we got to
00:12:14
get started final Point Virginia has
00:12:16
this wonky one-term term limit on
00:12:18
Governors so you know he's got no choice
00:12:21
but to make a play in 20 uh 24. because
00:12:24
he's gonna be termed out anyway okay Jay
00:12:26
Cal has a lifelong independent who's
00:12:28
only ever voted Democrat which of these
00:12:31
Republicans
00:12:32
Republican to be clear
00:12:34
so which of these candidates for
00:12:37
Republican one time when he was 12. yeah
00:12:38
no no I voted it three times
00:12:40
young kid three times
00:12:45
I would like somebody who's younger and
00:12:47
actually I've been quite influenced by
00:12:49
your framing of a person who can control
00:12:52
the budget and reduce spending because I
00:12:54
do think it's kind of the most
00:12:55
existential
00:12:56
risk we have right now so I might be
00:12:58
moving to more of a single issue uh Vote
00:13:01
for This presidential election I love
00:13:03
that issue I love that about you I just
00:13:05
think like we we have to have somebody
00:13:07
younger who is not going to bankrupt the
00:13:10
company and the more these candidates
00:13:12
talk about social issues and not
00:13:14
economic ones I think it's a tell that
00:13:17
they're not the right person for the job
00:13:18
that's where I'm personally at is like
00:13:21
this country has a serious Financial
00:13:24
existential crisis on its hands and we
00:13:27
have to get off social issues and we
00:13:29
have to get on to financial
00:13:31
standpoint so I assume then you support
00:13:33
the Republicans in this looming budget
00:13:36
Showdown
00:13:37
I actually do yes I do think we should
00:13:39
hold the line on spending so you support
00:13:42
the Republicans voting no on raising the
00:13:45
debt ceiling yeah I actually do I think
00:13:48
we should start pumping the brakes on
00:13:50
spending and I do think the Tea Party
00:13:53
no that doesn't mean I like those
00:13:55
candidates they're kind of whack jobs
00:13:57
actually but you think George Santos is
00:13:59
a whack job listen it's the whack pack
00:14:02
the Republican party has turned into
00:14:04
some crazy Howard Stern whack pack
00:14:07
sax is appalled by it he just can't some
00:14:10
elements of both parties look exactly
00:14:12
would you ever invite to Mark Santos to
00:14:14
your house who would you invite okay
00:14:16
actually
00:14:17
are you kidding me who would you be
00:14:19
willing to hold a dinner it's not a
00:14:22
fundraising dinner but just invite to
00:14:23
the house you can pick between two
00:14:24
people oh no Alexandro ocasio-cortez or
00:14:27
George Campos who would you pick
00:14:29
for I'd rather probably meet and talk to
00:14:33
AOC of course because it would be
00:14:35
interesting do I want a fundraise for
00:14:37
her no but no no I'm not asking
00:14:38
fundraising who just let in the door
00:14:40
front door unlock the front door for me
00:14:43
to AOC yeah what would you do to George
00:14:46
would you not even return the email if
00:14:48
he said David I'm in town I wouldn't let
00:14:50
him in the house for dinner don't let
00:14:51
him know him yeah he might he might
00:14:54
steal the silverware or something
00:14:57
it's so crazy
00:14:59
I mean it's so nuts Listen Hold on hold
00:15:02
on hold on we gotta get started um as
00:15:04
your moderator I'm gonna try and keep us
00:15:06
on track good luck uh yeah no look it's
00:15:08
a it's an energetic day I appreciate I
00:15:11
appreciate my co-hosts and their
00:15:12
enthusiasm enough recognition for
00:15:15
supporting the Republicans in this
00:15:17
budget Showdown I mean I'm like blown
00:15:19
away by this I think it's great I think
00:15:21
it's great as you guys know just to
00:15:22
restate it's my number one concern on
00:15:25
Earth today yep and I I think that the
00:15:27
importance of this topic really needs to
00:15:30
kind of Rise Above politics of all the
00:15:32
things you've said Freeburg in the last
00:15:33
like six months on this program it's the
00:15:35
one thing that stuck with me and it's
00:15:37
one thing that has like actually now I
00:15:39
realize is the most important thing for
00:15:41
this country is fiscal responsibility
00:15:43
austerity measures and looking at how
00:15:45
we're spending money and looking at
00:15:47
immigration and looking at economic
00:15:49
velocity and employment
00:15:51
and competing on the world stage with a
00:15:54
solid balance sheet is the balance sheet
00:15:56
is how you compete the balance sheet is
00:15:59
how you compete I think it rises above
00:16:01
social issues and it rises above climate
00:16:03
change cannot you you cannot address
00:16:05
climate change or social issues or
00:16:08
infrastructure or unemployment unless we
00:16:11
have the ability to operate as a country
00:16:13
over the long term and have the ability
00:16:15
to have for the continuing credit of the
00:16:18
United States dollar
00:16:20
and that's why I think it's so important
00:16:21
free break I'm dealing this with with
00:16:23
startups I have right now and I tell
00:16:24
them the balance sheet is how you
00:16:26
compete if your balance sheet is flipped
00:16:29
upside down and you're going to be out
00:16:30
of business in nine months you're not
00:16:31
competing with these two other companies
00:16:33
in your sector you have to have a strong
00:16:35
balance sheet take the austerity
00:16:36
measures make the cuts and then compete
00:16:39
with a strong balance sheet it's just so
00:16:42
obvious this country's balance sheet is
00:16:43
getting flipped upside down and we are
00:16:46
going to have so many yeah very complex
00:16:49
second and third order effects with the
00:16:52
interest payments if you value austerity
00:16:54
if you value austerity if you look back
00:16:56
in history and you actually ask of the
00:16:59
prime ministers or presidents of various
00:17:01
countries particularly First World
00:17:02
countries that have actually had an
00:17:04
impact in implementing austerity you
00:17:06
know what the unifying thing that I can
00:17:08
say is women do a much better job than
00:17:10
men
00:17:11
okay you want austerity you're better
00:17:13
off with with Margaret Thatcher with
00:17:16
then with a dude
00:17:18
AKA Nikki Haley enter station
00:17:22
it's a very hard position to be in as a
00:17:25
politician because you have to position
00:17:28
your objective as one of taking things
00:17:31
away and the primary way to get elected
00:17:33
in a democracy just like in junior high
00:17:35
when you run for president of the junior
00:17:36
high class is I'm going to make the
00:17:38
vending machines free you get elected
00:17:40
and when you run in politics you always
00:17:42
promise your constituents what they're
00:17:43
gonna get that they don't have today and
00:17:45
that's the model for getting elected
00:17:47
whatever the issue is of the day
00:17:48
whatever the issue deserved a decade
00:17:50
whatever it's all about what I'm going
00:17:52
to give you that you don't have today
00:17:53
and so to flip that conversation around
00:17:55
we all have to sacrifice together for
00:17:58
the long-term viability of our economic
00:18:01
Prosperity we need to do we need to give
00:18:04
up the following things that is a very
00:18:06
hard platform to run on when someone on
00:18:08
the other side of the podium on the
00:18:09
other side of the stage is saying I'm
00:18:11
going to give you these 10 things and
00:18:12
it's very hard to get elected and that's
00:18:13
why democracies ultimately eat
00:18:15
themselves and I forgot who said it but
00:18:17
ultimately all democracies end up
00:18:19
realizing they can vote themselves all
00:18:21
the money and then you have this big
00:18:23
cycle
00:18:24
applicants did the most brilliant thing
00:18:26
ever recently they moved from stop to
00:18:28
steal to stop the spend this is a genius
00:18:32
they may stumbled into nobody wants to
00:18:34
hear them talking about the election
00:18:36
being stolen that's complete nonsense
00:18:38
but stop the span
00:18:41
everybody is seeing in their own
00:18:42
personal balance sheets they're seeing
00:18:44
it in their companies they're seeing it
00:18:45
in their families they're seeing it with
00:18:47
their mortgage payment they're looking
00:18:49
at their you know uh College tuition
00:18:51
bills they're looking at their
00:18:53
car payments going from 400 to 700 and
00:18:57
they're seeing what variable interest
00:18:58
does we have variable interest debt this
00:19:00
stuff is going to Skyrocket whether it's
00:19:02
elon's payments for Twitter or your
00:19:04
payments for your mortgage or our
00:19:06
country's payments for our debt we have
00:19:08
to stop the spend
00:19:10
effective interest rates yes yeah but
00:19:13
guys let's just continue the
00:19:15
conversation
00:19:16
and talk a little bit about this world
00:19:18
economic Forum Gathering that that took
00:19:21
place in Douglas I know you guys wanted
00:19:22
to talk about it this week
00:19:24
intellectual honesty I'm like blown away
00:19:27
right now because he's sick okay so look
00:19:29
um no it's because I'm not moderating
00:19:30
when I moderate I'm always trying to get
00:19:32
the best out of you sex the
00:19:35
as it relates also to the global economy
00:19:38
and growth
00:19:39
so Davos took place uh you know over
00:19:41
this past week
00:19:42
just so everyone knows and I remember
00:19:45
you know working at Google 2004 I
00:19:49
remember like how exciting it was for
00:19:50
the executives to kind of start to
00:19:52
transition into the davo stage it became
00:19:54
this moment where you're kind of finally
00:19:56
on the world stage it's an exciting
00:19:58
moment for CEOs for world leaders for
00:20:02
Global economists to get together talk
00:20:04
about the state of the global economy
00:20:06
where the world is headed what we can
00:20:08
and should be doing about it and Davos
00:20:10
is also this this place of Pride and
00:20:13
Prestige for being invited and being a
00:20:15
part of the party the global Elite party
00:20:17
as some people are now calling it and
00:20:19
that's what I think is the important
00:20:20
conversation
00:20:21
is that the world economic Forum
00:20:23
gathering in Davos has recently been
00:20:25
cast as this Gathering of the global
00:20:27
Elites those who are trying to take
00:20:29
control and run the world as they see
00:20:32
fit and sax I'd love your point of view
00:20:34
on how that transition has happened
00:20:36
because one of the important ways that
00:20:38
the Davos Gathering has been cast in the
00:20:40
world economic Forum has been cast is in
00:20:43
the negative light of being globalists
00:20:44
and globalism has had a really important
00:20:47
role in driving global economic growth
00:20:50
and prosperity and it has had these
00:20:52
adverse effects in the US as we've seen
00:20:54
with wealth inequality loss of jobs
00:20:56
offshoring
00:20:58
gutting of Industries and so on I think
00:21:00
that there's a really important way that
00:21:02
Davos has been politicized but the risk
00:21:05
of that is significant because if we do
00:21:06
lean into this globalist notion and say
00:21:09
it's all about Elites trying to take
00:21:10
control of our world and we all become
00:21:12
isolationists that countries around the
00:21:14
world can suffer deeply from The
00:21:16
Economic Consequences of that shift so
00:21:18
maybe tax you can kick this off and
00:21:20
especially in light of our conversation
00:21:22
today about the need for economic growth
00:21:24
and the reduction of global debt to
00:21:25
support you know a more prosperous world
00:21:27
in the future this idea that right now
00:21:29
we're talking about Davos and the world
00:21:31
economic Forum as a gathering of global
00:21:33
Elites and maybe sax you can kind of
00:21:34
give us the history and the point of
00:21:36
view on how that positioning has come
00:21:37
about well it's a meeting of of global
00:21:40
business and government leaders so they
00:21:43
are the elites I mean you add them all
00:21:44
together and they do control a
00:21:46
substantial portion of the world economy
00:21:48
and most of the you know nations with
00:21:52
the biggest economies so there's no
00:21:54
question these are some of the most
00:21:55
important people in the world the bunch
00:21:57
of the Articles coming out of Davos
00:21:58
reported the somber mood and tone of the
00:22:01
conference the level of anxiety and
00:22:03
worry was very high and I think that
00:22:07
for a brief moment it looked like these
00:22:09
people were staring in the mirror and
00:22:11
realizing that their management of the
00:22:14
global economy over the last couple of
00:22:15
decades has been a bit of a disaster I
00:22:18
mean you do have ruinous deficits and
00:22:21
debts piling up in the U.S and across
00:22:24
the world something like 350 percent
00:22:25
debt to GDP globally so we've talked
00:22:28
about that you've got this war in
00:22:31
Ukraine that I and many people around
00:22:33
the world think was easily avoidable and
00:22:35
was a diplomatic failure you're coming
00:22:37
off of two years of badly botched covid
00:22:40
mismanagement where the governments of
00:22:43
the world pursued a horrible policy on
00:22:45
covet and made everything worse you've
00:22:47
got Decades of energy policy promoted by
00:22:50
the world economic Forum where they want
00:22:52
to get people off fossil fuels and
00:22:55
natural gas and get them onto less dense
00:22:58
less reliable energy including promoting
00:23:01
things like organic farming in Sri Lanka
00:23:03
which we talked about on the show cause
00:23:04
their economy to collapse you've got the
00:23:06
world economic on promoting ideas like
00:23:08
you're going to own nothing in the year
00:23:10
2030 and you're going to be eating
00:23:12
insects because no one should be eating
00:23:14
meat so you've got these like wacky
00:23:16
extreme you know environmentalist ideas
00:23:19
and anti-capitalist anti-property ideas
00:23:22
coming out of Davos so I think the whole
00:23:25
thing's been a bit of a disaster and for
00:23:27
a brief moment it looked like these
00:23:28
people again were self-reflecting on
00:23:31
their role in creating these disasters
00:23:33
but of course the tone quickly shifted
00:23:36
to blaming disinformation on social
00:23:38
media as the root cause of all these
00:23:40
problems as opposed to their Decades of
00:23:42
decision making running you know the
00:23:45
leading nations of the world and the
00:23:46
leading companies of the world and I
00:23:48
think that the blame is properly put not
00:23:51
on social media but on these leaders for
00:23:55
making you know bad decisions do you
00:23:57
believe in the benefits of global trade
00:24:00
where countries trade with one another
00:24:02
and shift the sourcing of supply and
00:24:05
labor to the cheaper source so that that
00:24:07
the buyer can benefit from having things
00:24:09
at a lower price and ultimately the
00:24:11
global economy grows
00:24:13
as kind of being beneficial to the us
00:24:15
over the last 30 years
00:24:17
or net negative because we talked you
00:24:19
know about the the obvious consequences
00:24:23
of global trade where we've had
00:24:25
Industries gutted in the United States
00:24:26
and now we're trying to onshore them
00:24:28
again and build redundancy and so on but
00:24:30
that's becoming very expensive and
00:24:32
ultimately leads to the inflation of
00:24:33
goods and services
00:24:35
and so as you look at kind of the yeah
00:24:37
the positive agenda of the world
00:24:40
economic Forum over the last 30 years
00:24:42
being about improving global trade and
00:24:44
Global relations to enable global trade
00:24:45
are you an anti-globalist and you know
00:24:48
do you start to see yourself falling
00:24:49
more in that camp
00:24:50
as you see and hear more of what comes
00:24:53
out of Davos and from these
00:24:54
organizations like them well look all
00:24:57
economic Prosperity comes from trade if
00:24:59
we didn't have trade then we would all
00:25:01
be subsistence farmers and hundreds and
00:25:03
gatherers so we
00:25:05
basically specialize in something and
00:25:08
then create an over a bunch of that and
00:25:09
trade it for the rest of our Necessities
00:25:11
the issue is that trade
00:25:14
not only creates Prosperity it creates
00:25:15
dependencies because you're dependent on
00:25:17
the people you're trading with and also
00:25:19
it has distributional effects in terms
00:25:22
of geopolitical consequences so
00:25:25
trade with China has created some
00:25:28
Prosperity but it's also hollowed out
00:25:31
the American Manufacturing
00:25:34
sector while also making China very rich
00:25:37
which has basically turned China into a
00:25:39
major geopolitical competitor for the
00:25:40
United States so I'm not like a free
00:25:42
trade fanatic I mean I understand the
00:25:44
ways that trade creates wealth but I
00:25:46
think it can also create these downsides
00:25:49
that have to be managed and the fact of
00:25:50
the matter is that this unfettered free
00:25:52
trade ideology contained the seats of
00:25:54
its own destruction because all the
00:25:57
revisionist powers who are seeking to
00:25:59
revise the U.S led Global Order they
00:26:02
were basically enriched
00:26:04
and built up by the very free trade
00:26:07
ideology that neoliberals were promoting
00:26:11
so this neoliberal world order has kind
00:26:14
of created the seeds of its own
00:26:15
destruction I think that it would have
00:26:17
been much smarter for us two decades ago
00:26:20
to be much more restrained in the China
00:26:23
trade and to not throw up in our markets
00:26:25
to Chinese products we basically gave
00:26:27
them mfn status this is back in the
00:26:30
early 2000s and it was a bipartisan
00:26:32
project a bipartisan decision but the
00:26:35
result of that has been the rapid rise
00:26:37
of China at the expense of our
00:26:39
manufacturing sectors and to the benefit
00:26:41
of our consumer class right I mean we do
00:26:42
you have 600 iPhones because of it and
00:26:45
we do have cheap TVs and there has been
00:26:47
a consumer Market that's demanded these
00:26:49
low price Goods to live a better life
00:26:51
right like so yeah but so so everyone
00:26:53
gets cheap Goods at Target but in
00:26:55
exchange for that we now have a real
00:26:57
peer competitor to the United States
00:26:59
which is capable of disrupting
00:27:03
let's say our Primacy in East Asia and
00:27:05
you know is creating a much more
00:27:07
challenging world so look I I can
00:27:09
understand the reasons why people bought
00:27:10
into this two decades ago but I think
00:27:13
that if we had it to do all over again I
00:27:16
think most people would recognize that
00:27:18
we should not have given China permanent
00:27:20
mfn status and we should have been more
00:27:23
temperate in our willingness to throw up
00:27:26
in our markets to these countries do you
00:27:29
think that the world economic Forum has
00:27:30
kind of transitioned into this kind of
00:27:33
neoliberal organization now that's
00:27:36
promoting these neoliberal beliefs that
00:27:38
aren't really tied to the original
00:27:40
construct of
00:27:42
Global enabling and supporting global
00:27:44
trade and
00:27:46
supporting the global economy and
00:27:48
creating more prosperity and security
00:27:49
around the world I think it appeals to
00:27:51
the insecure overachiever Elite
00:27:53
yeah and nobody building anything really
00:27:56
gives a [ __ ] about Davos nobody is
00:27:58
thinking what's going on nobody even
00:27:59
knows when it happens right
00:28:02
so who cares about it people who like
00:28:04
status and went to fancy schools and
00:28:07
wants to feel like they're in the club
00:28:09
and that's how they've made it is going
00:28:12
to this place which underneath
00:28:14
is a membership organization where
00:28:16
people pay based on the number of people
00:28:18
that get to go
00:28:20
so is it really that important
00:28:23
substantively no
00:28:25
but overachieving Surplus Elites in the
00:28:28
west really valued the signal that it
00:28:30
represents to other overachieving
00:28:31
Surplus Elites in the West
00:28:34
so that's what Davos is that's what the
00:28:36
Allen and Company conference has become
00:28:38
a lot of these things started off
00:28:40
much purer than what they are today but
00:28:43
these are all membership driven
00:28:45
Revenue generating efforts
00:28:49
in 30 or 40 years the all-in summit will
00:28:51
probably become that too
00:28:54
it's just the nature of things so I
00:28:57
wouldn't spend so much time focused on a
00:28:59
group of people getting together the
00:29:01
funniest thing about Davos that I saw
00:29:03
was Zero Hedge which said that the
00:29:05
amount of prostitution is at record
00:29:06
levels in Davos and so it just kind of
00:29:10
boils down to what it is which is like
00:29:12
any other conference it just happens to
00:29:14
be with more security guards and less
00:29:16
security guards and the same stupid
00:29:18
stuff happens at Davos that happens in
00:29:20
Vegas at name your conference CES it's
00:29:24
just a different kind of attendee so I
00:29:26
think the bigger thing is that
00:29:30
we are learning that the world tends to
00:29:33
have these policy perspectives that
00:29:35
swing in a pendulum and the problem with
00:29:37
the pendulum is that it it is at
00:29:39
extremes and sax is right we went from
00:29:42
an extreme where we were very closed off
00:29:45
and we were essentially subsistence
00:29:47
Farmers all of us were
00:29:49
and then the pendulum has essentially
00:29:51
peaked probably in the mid teens of this
00:29:53
decade
00:29:54
or of this Century where we realized too
00:29:57
much globalization actually Hollows out
00:29:59
local economies so we need to find the
00:30:01
equilibrium point and that inherently
00:30:03
has more inflation
00:30:05
that inherently has higher prices
00:30:08
and that inherently has slower progress
00:30:11
but more consistent progress that
00:30:14
benefits more people and this is what is
00:30:17
so
00:30:18
ideologically disruptive to again
00:30:21
Surplus Elites because they need the 600
00:30:24
iPhone the idea that they can't upgrade
00:30:26
every year
00:30:28
drives them into such a tizzy that they
00:30:31
need to export all the jobs whereas a
00:30:34
thousand dollar iPhone or a fifteen
00:30:36
hundred dollar iPhone may just mean that
00:30:39
your upgrade cycle is two years and just
00:30:41
ask yourself
00:30:43
how many times have you upgraded as soon
00:30:45
as the phone came out to realize man
00:30:47
this phone is actually worse than the
00:30:48
previous version
00:30:49
and I probably could have just waited
00:30:52
and there's a lot of work that actually
00:30:53
goes into building these things to
00:30:54
actually make them better so all you're
00:30:56
doing is you're giving up optionality
00:30:58
you're allowing your brothers and
00:30:59
sisters to struggle to basically Feed
00:31:01
The Profit motives of one company
00:31:03
that in hindsight doesn't need to happen
00:31:05
so there's an equilibrium and I think
00:31:07
that these next few decades
00:31:10
will be about finding it we have decided
00:31:12
it's categorical
00:31:14
that that level of globalization that we
00:31:16
have had this unitary singular
00:31:18
monocultural way of thinking about
00:31:20
things is over
00:31:22
and David's right it's because that
00:31:24
system has created too many threats to
00:31:28
the hegemony that brought us there
00:31:30
Jacob and you that's a good thing I
00:31:32
think in general it'll be it'll be more
00:31:34
prosperity for more people but it'll be
00:31:36
slower and it will create points of
00:31:39
friction that are represented in
00:31:40
inflation in higher prices right that's
00:31:42
right so as jaycal as you know chamoth
00:31:44
points out like if you're upgrading
00:31:46
every two years instead of one year your
00:31:48
economy doesn't grow as fast you have
00:31:49
less spending yeah if the price of
00:31:51
things go up you have inflation the net
00:31:54
cost of de-globalization is higher
00:31:57
prices and lower economic growth that's
00:31:59
just fundamental kind of macroeconomics
00:32:01
no that's not true that's not true
00:32:03
because the deglobalization in an
00:32:05
individual economy will actually create
00:32:07
GDP because you'll have to rebuild the
00:32:09
things that are used to import that's
00:32:11
right yeah and over a period of time
00:32:12
theoretically you could catch up and
00:32:14
accelerate but jaycal like when you
00:32:16
weigh this conversation about
00:32:18
Davos and globalization and U.S security
00:32:22
against the one we just had which is why
00:32:24
I wanted to talk about this
00:32:25
we're running into a debt crisis
00:32:28
we have limited spending capacity we
00:32:30
have a significant amount of investment
00:32:32
needed if we are going to cut global
00:32:36
trade ties that we've depended on
00:32:37
historically and start to build
00:32:39
redundancy can we afford this as a
00:32:41
country can the West afford this given
00:32:44
the economic slowdowns and inflation
00:32:45
right now and you know how do we balance
00:32:48
kind of these conversations against our
00:32:51
domestic challenges economic Davos has a
00:32:54
pretty serious PR problem they have
00:32:57
dubbed themselves like essentially a
00:33:00
self-appointed illuminati for the rest
00:33:01
of us and that they're going to set some
00:33:04
Global agenda I think this year's agenda
00:33:06
was like finding the future or defining
00:33:09
the future
00:33:10
nobody asked these people to be in
00:33:13
charge and if you look at what's
00:33:15
happened in the world the chaos of covid
00:33:18
and you look at what's happened in terms
00:33:20
of energy policy in Europe
00:33:23
and then this obsession with social
00:33:25
issues and being told you know these
00:33:27
Farmers these truckers you're bad people
00:33:29
you're not woke whatever it is I think
00:33:32
the public looks at Davos as the
00:33:34
manifestation of these Global Elites who
00:33:37
are lording over them some master plan
00:33:39
whether it's real or not that they're
00:33:41
not part of and that doesn't take them
00:33:43
into consideration and that takes into
00:33:45
consideration only their profits and
00:33:47
when you actually peel it back as
00:33:50
chimoff correctly pointed out
00:33:52
Dolphus is a huge grift they they
00:33:55
recruited me to be part of their world
00:33:57
leaders
00:33:58
15 years ago after I had sold did you go
00:34:00
to Second company and I met Claus the
00:34:02
guy who runs it uh some New York Four
00:34:05
Seasons event and uh then I got the bill
00:34:08
and to be a world leader
00:34:12
was 40 [ __ ] thousand dollars and I
00:34:16
was like what a global future leader I
00:34:18
don't know what that means uh but I'm
00:34:20
not giving you forty thousand dollars
00:34:21
you had to pay you had to pay to be a
00:34:25
global what future leader and you didn't
00:34:27
have to pay for a six thousand dollar
00:34:29
Ted ticket at the time this was 40 large
00:34:34
and uh I just thought you know this is
00:34:37
not for me uh and what a joke I think
00:34:40
people would much rather see some
00:34:43
resiliency in the supply chain
00:34:45
and they would rather see the origins of
00:34:48
kovid and why we spent two years in a
00:34:51
lockdown and was that a cover-up of the
00:34:55
United States funding
00:34:57
gain of research
00:35:00
you know being done in Wuhan like and
00:35:03
and why are we shutting down nuclear
00:35:05
power plants and what exactly is the
00:35:07
energy policy in Germany people are
00:35:09
looking at incompetent Elites
00:35:12
going to Davos having a big party and
00:35:15
then setting an agenda for them that
00:35:16
they don't understand or want
00:35:18
and I think this is where you know the
00:35:21
the the contempt for Davos is peaking
00:35:23
this year and it should if you're being
00:35:25
invited to Davos and other people are
00:35:28
not being invited and they don't have a
00:35:30
seat at the table and a voice at the
00:35:31
table you can tell that all the
00:35:33
journalists there are on an access
00:35:34
journalism pass what does that mean
00:35:36
access journalism they get to come there
00:35:38
and they get to hang out with Elites if
00:35:42
and only if their coverage fits a
00:35:44
certain profile and if you find me the
00:35:46
top 10 most critical anti-globalization
00:35:49
journalists in the world I can guarantee
00:35:52
you that they don't have credentials I
00:35:54
think it's like a bankrupt organization
00:35:56
that should just be shut down and the
00:35:57
people who are going there are involved
00:35:59
no I think it's culturally bad you guys
00:36:01
have so much disdain it's interesting no
00:36:03
idea
00:36:05
not what the world wants right now the
00:36:07
world wants transparency and the world
00:36:09
wants ownership of all the screw-ups
00:36:13
you know from kovid yeah to energy
00:36:16
policy we want ownership of those issues
00:36:18
not a bunch of Elites drinking champagne
00:36:21
I'd rather spend a week with
00:36:22
entrepreneurs or frankly spend a week
00:36:24
with my kids or Frank yeah spend a week
00:36:25
playing poker with my friends of course
00:36:27
let's do it they're they're like umpteen
00:36:29
things that are above the list so it's
00:36:30
kind of like let them get together I
00:36:32
think it's fine for them to get together
00:36:33
they should do it I just think that if
00:36:35
you're not there I would not weigh these
00:36:37
things so heavily because it speaks more
00:36:39
to your own insecurity than it does to
00:36:41
their actual influence on things yeah
00:36:43
the term Elite is an interesting one you
00:36:45
you could companies need a CEO to run
00:36:47
the company it's not run by 10 000
00:36:48
employees and governments need a
00:36:51
president to oversee the government and
00:36:53
I think the idea that some small number
00:36:56
of people that are in charge getting
00:36:58
together is now being cast as an elite
00:37:01
Gathering and elitism in itself is the
00:37:03
failure
00:37:06
I think it's very important to get this
00:37:08
nuanced rights it's a gathering of
00:37:10
Elites and that's very different than an
00:37:12
elite Gathering an elite Gathering is
00:37:14
when like Michael Jordan and LeBron
00:37:16
James and Steph Curry get together and
00:37:18
work on their basketball game that's an
00:37:20
elite Gathering a gathering of Elites is
00:37:23
what's happening in Davos
00:37:26
but they are the presidents of their
00:37:28
companies and the presidents of their
00:37:29
countries so I would differentiate
00:37:31
between the people who are merely
00:37:32
attending who are paying the Forty
00:37:34
thousand dollars you know probably a
00:37:36
bunch of hangers on it's now 250 by the
00:37:38
way 250 000 250 yeah anyone willing to
00:37:41
pay that is like you know totally an
00:37:44
insecure you know Surplus Elite by the
00:37:46
way I just got back from Davos oh you
00:37:48
did okay well congratulations
00:37:50
looks good on you though go ahead what's
00:37:53
good on you did you spend your own money
00:37:55
or your LP's money no I didn't get it
00:37:57
down oh my Lord
00:37:58
if I mean one person that went to Davos
00:38:01
and spent their own money that's like
00:38:02
probably not right exactly so then
00:38:04
there's the hangers on you're spraying
00:38:05
250 000 to feel important but then
00:38:08
there's the people who are invited who
00:38:10
probably don't spend any money who are
00:38:11
basically speaking right and you got to
00:38:13
say that the the group of people who are
00:38:16
speaking at Davos individually and
00:38:18
collectively are quite influential they
00:38:21
are the leaders of countries and and
00:38:24
Fortune 500 companies sure but you can
00:38:26
agree that they literally don't say
00:38:28
anything that's noteworthy because
00:38:29
they're not allowed to they're not
00:38:31
saying anything that's that different of
00:38:32
what they would say the previous week or
00:38:33
the following week so but it's it's a
00:38:35
forum it's a platform for yeah it's a
00:38:38
44. yeah to get together look in terms
00:38:42
of the critique of it
00:38:43
Freebird you asked how far back does
00:38:45
this go it's this is not like a new
00:38:48
thing the the term Davos man was coined
00:38:51
back in 2004 by a Harvard Professor
00:38:54
Named Sam Huntington who wrote a book
00:38:56
called class civilizations he's the
00:38:58
Press of international relations at
00:39:00
Harvard and he coined the term Davos man
00:39:03
to refer to a globalist Who quote had
00:39:07
little need for National loyalty who
00:39:08
viewed National boundaries as obstacles
00:39:10
that are thankfully uh Vanishing that's
00:39:13
how Huntington defined Davos man and
00:39:16
there's been a reaction to these Thomas
00:39:20
men that's been growing for a couple of
00:39:21
decades I mean obviously the election of
00:39:24
trump was a reaction to that brexit was
00:39:27
a huge reaction to that
00:39:29
and I think that the resistance to the
00:39:33
imposition of their again their
00:39:34
globalist policies which I guess you
00:39:36
could Define as believing in this like
00:39:38
borderless world you know economically
00:39:41
and politically I think that's been
00:39:43
receding in favor of more nationalist
00:39:45
leaders who want to promote their own
00:39:47
country's interests and I think that
00:39:49
that trend is going to continue
00:39:51
let's let's transition this to the the
00:39:53
broader question that I think we got
00:39:56
into it a couple episodes ago on how can
00:40:00
we
00:40:00
afford this transition
00:40:03
if there is this mounting
00:40:06
kind of trend against globalization
00:40:08
that's mounting deglobalization movement
00:40:10
and effort particularly in the U.S and
00:40:13
again as sax pointed out Global debt to
00:40:14
GDP is something like 300 to 350
00:40:17
depending on how you count and we're
00:40:21
running into a debt ceiling here in the
00:40:22
U.S
00:40:23
I guess the question is how do we afford
00:40:26
to build the infrastructure redundancy
00:40:28
and make the Investments at home to
00:40:31
replace global trade can we afford to do
00:40:33
it and how's this going to play out as
00:40:35
we run into this you know debt ceiling
00:40:37
vote I don't think that's the right
00:40:38
question I think it's the inverse of
00:40:40
that question how can we afford not to
00:40:42
with the amount of discontent and the
00:40:45
amount of economic strain that people
00:40:46
feel
00:40:48
if you want to really call populism
00:40:50
you're going to have to create economic
00:40:52
vibrancy at home when people are making
00:40:54
money and they find purpose
00:40:57
they're less agitated they're not
00:40:58
storming the capital they're not
00:41:00
electing Fringe candidates they're not
00:41:03
doing domestic terrorism they're just
00:41:05
going to work and building a life right
00:41:08
we know that so how can we afford not to
00:41:10
how can we afford not to like bring back
00:41:13
jobs to the heartland of America so the
00:41:16
reality that I have and I think a lot of
00:41:18
people have is that this debt to GDP
00:41:21
thing is a bit of an intellectual red
00:41:23
herring and the reason is people talk
00:41:26
about this thing constantly in these
00:41:28
absolute terms with no historical
00:41:31
precedent that relates well to our
00:41:33
current moment there is no magic number
00:41:35
at which thing this experiment that's
00:41:38
called America fails
00:41:40
so I think that you have to be a little
00:41:42
bit more intellectually honest and say
00:41:43
that at best it's a relative problem
00:41:46
and it's relative to the countries that
00:41:49
have already established dominance of
00:41:51
which there are eight or nine
00:41:53
and then the emerging economies and then
00:41:56
thinking about what critical things will
00:41:58
they bring to the table in 15 or 20
00:41:59
years from now
00:42:00
and in that context I think that people
00:42:03
will him and ha But ultimately they'll
00:42:06
capitulate they will raise the debt
00:42:08
ceiling and they'll continue to fund
00:42:10
this transition away from globalism and
00:42:13
I think that's the argument that we'll
00:42:14
get the Republicans over the line
00:42:16
because it's going to bring a lot of
00:42:18
spending and stimulus and jobs to
00:42:22
frankly a lot of red states that would
00:42:23
otherwise kind of continue to wither and
00:42:25
die on the vine I think here's my
00:42:27
biggest concern
00:42:29
we're either trying to walk a tightrope
00:42:31
or there's no tightrope to walk and
00:42:34
if we make these Investments and they're
00:42:37
not economically viable Investments
00:42:40
it's a path to ruin
00:42:42
and what I mean by that is if we're
00:42:44
building factories manufacturing
00:42:47
facilities infrastructure that relies on
00:42:50
yesteryear's technology and systems of
00:42:53
production and Glo and and kind of
00:42:55
economic systems and there are
00:42:57
alternatives that are competing on a
00:42:59
global stage that are better more
00:43:01
productive more advanced then we lose
00:43:04
and we've made an investment in a
00:43:05
negative Roi way
00:43:08
can I ask you a question yeah see when
00:43:11
you say that though you're making a very
00:43:13
basic assumption which I think you can
00:43:14
question which is you are underpinning
00:43:16
that on fundamental economics that can
00:43:19
change if we choose to for example let's
00:43:22
take like natural resources okay every
00:43:24
time you do a plan the industry and I
00:43:27
Define the industry as every for-profit
00:43:29
company and Wall Street and the debt
00:43:31
markets they refuse to underwrite this
00:43:34
thing at a higher cost of capital they
00:43:36
use a whack of six or seven or eight and
00:43:39
they will fight tooth and nail to use
00:43:42
the smallest discount rate possible
00:43:44
because it allows them to capture more
00:43:46
of the profit dollars but if you
00:43:49
actually had a realistic whack of like
00:43:51
10 percent on an on a massive
00:43:53
infrastructure project guess what you're
00:43:56
actually pretty equivalent to a
00:43:57
government and in fact in many cases a
00:44:00
government becomes cheaper so I think
00:44:02
the thing that is worth debating and I'd
00:44:04
like your reaction to this it's not that
00:44:05
what you're saying it's we refuse to
00:44:08
change the guard rails on our
00:44:10
profit-making ability and if you
00:44:12
extended the window if you change a
00:44:14
discount rate if you said PES can be
00:44:16
different you would have a very
00:44:17
different economic justification for
00:44:18
what you just said it completely changes
00:44:20
a hundred basis points changes
00:44:22
everything you're saying by tens of
00:44:24
years one way to describe that yeah is
00:44:26
another way to reframe what you just
00:44:28
said is that the youthful lifespan of an
00:44:32
investment isn't 40 years or 50 years
00:44:34
but it may be 12 years and if you if you
00:44:38
recast the investment decision as this
00:44:40
has to be a 12-year return instead of
00:44:42
allowing it to be modeled as a 40-year
00:44:45
return then you start to really filter
00:44:47
out a lot of the nonsense and you can
00:44:49
actually see real payback it doesn't
00:44:50
make sense to spend a hundred billion
00:44:52
dollars on a train to take people from
00:44:55
LA to Fresno or whatever craziness the
00:44:58
the California High-Speed Rail program
00:45:00
has turned into it was originally like a
00:45:02
billion dollars to go from LA to San
00:45:04
Francisco there was economic
00:45:06
justification to get payback on 100
00:45:08
billion dollars or whatever it's
00:45:09
ballooned into
00:45:11
the whole system should be shut down so
00:45:13
I guess there's a from a policy
00:45:15
perspective an accountability framing
00:45:17
that's missing but also bringing in the
00:45:20
time Horizon on which we need to get
00:45:22
paid back for these things my point was
00:45:24
that in China and I've made this point
00:45:26
many times but I just think it's a
00:45:28
really important one that'll play out
00:45:29
over the next couple of years they're
00:45:31
building 450 nuclear power plants
00:45:33
they're going to get the cost of
00:45:34
industrial power below five cents or
00:45:36
four cents a kilowatt hour and they're
00:45:37
electrifying all their factories as they
00:45:40
do that it's no longer a unit of human
00:45:41
labor that's needed to produce Goods
00:45:43
it's a unit of electricity and if
00:45:46
they're driving down the cost of
00:45:47
electricity and all products can be made
00:45:49
using electricity you have a huge
00:45:51
economic Advantage it's not the cure-all
00:45:53
that you think that is even if you have
00:45:55
free energy you have to think about the
00:45:57
inputs and the thing about China but no
00:45:59
sorry I'm not talking about energy I'm
00:46:00
just saying a general framing like no no
00:46:02
I understand my point being like the
00:46:04
Investments we should be making are
00:46:06
where is the puck headed not where has
00:46:08
the puck been no no so I just I just
00:46:10
wanted to comment on where the setting
00:46:12
even if energy is zero in China you have
00:46:14
to think about inputs meaning factories
00:46:16
make things with inputs and if you look
00:46:18
for example in natural resources the
00:46:21
inputs by and large don't exist in China
00:46:23
and so all I'm saying is that all of
00:46:27
these inputs whether again you can take
00:46:29
natural resources that proliferate
00:46:31
massively in the United States it turns
00:46:33
out that India is utterly utterly
00:46:36
utterly poorly addressed in a
00:46:38
geographical survey perspective and
00:46:39
we're finding that India's raw resources
00:46:42
are off the charts okay there are
00:46:44
certain places in Africa tons of stuff
00:46:46
in Indonesia and Australia all of those
00:46:49
things may not have to go to China
00:46:52
because there are subsidies or there are
00:46:55
equivalently cheaper decisions that
00:46:57
governments can make so that they choose
00:46:59
not to send it and all of a sudden all
00:47:01
of that spending doesn't matter as much
00:47:02
because the Australian government makes
00:47:05
a trade-off that says you know what I'd
00:47:07
rather have these jobs here and I'm
00:47:09
willing to have a longer payback cycle
00:47:11
for these jobs to be here then instead
00:47:13
of ship it to China
00:47:14
and he they tell that they tell the
00:47:16
Australian citizens I'm sorry guys but
00:47:18
you're gonna have to replace your car
00:47:19
every seven years as opposed to every
00:47:22
five I hope you're okay with that but
00:47:23
that'll mean full employment and it'll
00:47:25
prevent Fringe candidates and populism
00:47:29
and let's go forward where do you invest
00:47:32
ing I am investing a lot of money
00:47:38
in those places that control the natural
00:47:41
resources that are poorly understood
00:47:43
meaning there are places like India
00:47:46
where
00:47:48
our Geological Survey capacity is
00:47:51
relatively naive and it turns out that
00:47:54
in critical parts of the energy supply
00:47:57
chain or other places
00:47:59
they can play a huge role and the Indian
00:48:03
government's cost of capital
00:48:05
has an element they're sophisticated
00:48:07
enough
00:48:08
to add a an element to the formula that
00:48:12
accounts for Full Employment
00:48:13
if I build it in this state and if I try
00:48:17
to get this many jobs created
00:48:19
the full circle feedback of that allows
00:48:22
me to actually transfer price it into
00:48:24
the Indian Market at this price which is
00:48:26
cheaper than anything that China can do
00:48:28
even at zero energy
00:48:30
that's the kind of sophisticated
00:48:32
decision making that is emerging because
00:48:34
of this deglobalization trend and it's
00:48:36
happening everywhere so the Indians are
00:48:38
doing it the Germans are doing it and
00:48:40
then the US is doing it and then on top
00:48:42
of that what they're what they're doing
00:48:44
in terms of Game Theory which I think is
00:48:46
even more sophisticated is
00:48:48
they're not letting China be alone
00:48:49
they're actually now slowing China down
00:48:52
because China turns out actually needs
00:48:54
inputs from these Western economies and
00:48:56
they're like we're just not going to
00:48:57
give them to you anymore so do the best
00:48:58
you can for example in semiconductors
00:49:00
the Dutch the Germans the Americans
00:49:03
we've now essentially embargoed all of
00:49:05
our most sophisticated equipment from
00:49:06
ever getting in there that will increase
00:49:09
even with zero energy the cost of what
00:49:12
comes out of there and that will balance
00:49:14
the playing field so that the Germans
00:49:16
the Dutch the Americans can bring other
00:49:19
partners in at a different cost of
00:49:21
capital to make it economically neutral
00:49:24
in that parity and the reason they'll do
00:49:26
it is to create jobs for Americans or
00:49:28
the Dutch or for the Germans okay I
00:49:31
think the most yeah go ahead Jacob
00:49:32
freeberg I I just I I think the most
00:49:34
important thing here isn't like energy I
00:49:37
don't think it's infrastructure I don't
00:49:39
think it's natural resources at least
00:49:40
for America it's entrepreneurs and
00:49:43
that's what it's always been for this
00:49:45
country and it's immigration
00:49:47
is the Silver Bullet here and
00:49:50
inspiration and the freedom that this
00:49:52
country has for entrepreneurs and
00:49:54
Founders to pursue a vision to start a
00:49:57
company that's why we've won so big
00:49:59
historically is the the combination of
00:50:02
immigration and the inspiration that
00:50:04
these entrepreneurs
00:50:06
do on a global basis to get more
00:50:08
entrepreneurs to come to this country to
00:50:10
go to Stanford to start companies and
00:50:13
that's why China is now losing they
00:50:16
cribed this incredible formula we had of
00:50:18
letting Jack ma do Alibaba and then they
00:50:22
decided to for whatever you know
00:50:24
insecure or stupid reason or pragmatic
00:50:27
reason to consolidate power and that's
00:50:30
what will push the world forward and and
00:50:32
make our country Thrive we have to fix
00:50:35
immigration we have to keep letting
00:50:37
entrepreneurs
00:50:38
Define the future because the government
00:50:40
can do so much they can underwrite a
00:50:43
couple of Chip factories here or there
00:50:44
sure we could put money into nuclear or
00:50:47
fission or fusion and whatever the next
00:50:49
technology is but you need a singular
00:50:51
person who wants to make it their life's
00:50:53
mission who wants to have
00:50:56
their sense of Pride and Innovation push
00:50:59
the world forward and those people are
00:51:00
rare and we are in a competition
00:51:03
globally that we are not focused on that
00:51:06
we need to get refocused on to recruit
00:51:08
the greatest Minds in the world who want
00:51:11
to change the world to do it on American
00:51:13
soil I do not disagree with you jaycal I
00:51:16
think
00:51:17
you know to my earlier comment about how
00:51:19
do we walk the tightrope of the debt
00:51:21
burden the deglobalization and populism
00:51:22
movements
00:51:24
and the and the challenges and
00:51:25
opportunities ahead it has to come
00:51:27
through Innovation I think that's how
00:51:28
you you have to invent a new tightrope
00:51:30
basically I think the challenge though
00:51:31
is Freeburg that
00:51:34
it takes a recognition that there are
00:51:36
singular individuals in the world one in
00:51:39
a million one in ten million one in a
00:51:41
hundred thousand whatever it is
00:51:42
who can just drive an entire economy
00:51:45
forward whether it's gates with
00:51:47
Microsoft or Steve Jobs with apple there
00:51:50
are singular individuals who come to
00:51:52
this country Bam Bam Brogan with uh the
00:51:55
tunneling company
00:51:59
nobody knows what you're talking about
00:52:01
except for me
00:52:03
there are people who will push these
00:52:05
things forward and and take risks and we
00:52:07
have to yeah recognize that it's a small
00:52:10
number of individuals backed by a large
00:52:12
amount of capital
00:52:14
that create massive jobs and great
00:52:16
prosperity it's an uncomfortable
00:52:18
conversation for people to realize that
00:52:19
it might just be a couple of dozen
00:52:21
people a year
00:52:23
immigrating to this country that change
00:52:25
the fate of this country yeah why do you
00:52:28
need to allow three million migrants to
00:52:30
stream across the Sun border every year
00:52:31
because you don't know which one it's
00:52:33
going to be
00:52:34
that's why really you know that's that's
00:52:37
your immigration policy is open border
00:52:39
so that one is a millionaire I said
00:52:41
recruitment
00:52:43
so you're immigration yeah explain that
00:52:46
it's a great question sex there are
00:52:48
there are two things to look at here
00:52:49
there is Jason let me finish my sentence
00:52:52
no I'm just going to ask you to just
00:52:53
verify as you say it's you're are you
00:52:55
saying that the PHD student that starts
00:52:57
Google is streaming across the border or
00:52:59
actually applying for no absolutely
00:53:03
notified
00:53:05
for you there's immigration and then
00:53:07
there's Recruitment and if we frame this
00:53:11
process with those two different words
00:53:13
there are people who are yes immigrating
00:53:15
streaming across the border however you
00:53:16
want to frame it sax I don't look at it
00:53:19
in a political way and then there's
00:53:21
recruiting the most elite talents in the
00:53:23
world we can do both of these things
00:53:25
one of them you know uh helps
00:53:29
Farmers have people to work the fields
00:53:31
to have people take entry-level jobs to
00:53:34
work in the service industry we should
00:53:35
bring in two or three million of those
00:53:37
people per year we should make it legal
00:53:40
and we should celebrate it because we
00:53:41
have so many of those positions open
00:53:43
that Americans don't want to take we
00:53:44
should then also in parallel and without
00:53:48
confusing the issue for political
00:53:50
reasons recruit people to come to our
00:53:53
universities and when they graduate have
00:53:56
their citizenship staple to that diploma
00:53:58
and not let them leave the company
00:53:59
country and let them start companies
00:54:02
here instead what we do is we make them
00:54:04
fight to stay here we should be
00:54:06
recruiting the smartest most talented
00:54:08
people that will be hundreds of
00:54:10
thousands of people per year low
00:54:11
hundreds of thousands okay Millions
00:54:13
coming across the border sick J Cal is
00:54:15
very reasonable no yeah it's great yeah
00:54:18
I think he's so much better when he
00:54:20
doesn't moderate yeah yeah go ahead sex
00:54:22
you know I'm an immigrant
00:54:25
you know my dad came over yeah my dad
00:54:28
came over in 1977 when I was five years
00:54:31
old of course he had an MD he was a
00:54:34
doctor he actually had like skills and
00:54:37
wasn't immediately can become a net
00:54:39
government dependent so
00:54:41
I think that it makes sense to allow
00:54:43
immigrants who can actually add
00:54:44
something to our economy and bring
00:54:46
skills and all the rest of it but the
00:54:47
problem we have is that if you want to
00:54:49
take that reasonable position you're
00:54:51
told that you basically have to accept a
00:54:54
situation of de facto open borders which
00:54:56
is ridiculous no you don't these are two
00:54:59
separate things and they've become
00:55:01
inflated it's the number one party that
00:55:05
conflates these two issues you know
00:55:07
they're two separates Democratic party
00:55:08
is conflated these issues okay both
00:55:10
parties are conflating them here at the
00:55:12
all-in podcast can we agree that yeah a
00:55:14
group of people could recruit people for
00:55:17
PHD programs more than one group of
00:55:18
people allows across the border to take
00:55:20
service jobs
00:55:22
is the way to go but but look let me tie
00:55:25
this back to Davos man what was the
00:55:27
definition of Davos man it was somebody
00:55:29
who is pushing this ideology of free
00:55:33
trade and open borders to such an extent
00:55:34
that it creates a nationalist backlash
00:55:37
or populist backlash fair enough yeah
00:55:39
that's exactly what's happened at our
00:55:41
Southern border is you have the people
00:55:44
who believe in Immigration push that
00:55:45
ideology to such an extent that they
00:55:48
won't create a rational sensible
00:55:50
Southern border and process in our
00:55:53
Southern border it's chaos down there
00:55:55
I'm in favor of bringing in the Dream
00:55:57
Team yeah in favor of bringing the Dream
00:55:59
Team but the response of open borders is
00:56:02
the creation of this nationalist
00:56:03
movement right the Nationalist movement
00:56:05
only exists in the face of open borders
00:56:07
I think that's that's the point right
00:56:09
like the extreme
00:56:10
there's the extreme I think the
00:56:13
immigration system should be based on
00:56:14
points just like Canada Davos men don't
00:56:17
if the Davos men don't start taking in
00:56:19
start taking into account these National
00:56:21
considerations
00:56:23
around the defense of their borders and
00:56:26
these issues around trade hollowing out
00:56:28
the middle class then there's going to
00:56:30
be an intense backlash and I don't think
00:56:32
those Elites have been managing the
00:56:33
situation very well it would have been
00:56:35
better for them to pursue the more
00:56:37
nuanced policy you're talking about why
00:56:39
are we conflating the issue then why do
00:56:40
the Democrats and the Republicans sacks
00:56:43
make this such a polarizing issue
00:56:44
instead of stating it the way I did
00:56:46
recruitment
00:56:47
because it's so busy
00:56:50
you know when you when you conflate them
00:56:52
you can incite an emotional response
00:56:55
from your voting base that's it that's
00:56:57
100 of these issues that's why all of
00:56:59
these issues get based out they get
00:57:01
spaced out to the point that then you
00:57:03
can drive someone to vote for you
00:57:04
because you've now framed the other side
00:57:06
as this extreme side and yeah you
00:57:09
earlier said hold on before you got
00:57:10
suddenly very reasonable you said that
00:57:13
we have it's always where you haven't
00:57:14
listened
00:57:15
I'm in a quote something you just said a
00:57:18
minute ago you said that we had to allow
00:57:19
two to three million two to three
00:57:22
million completely destitute practically
00:57:24
illiterate migrants to stream across our
00:57:26
border because one in a million of them
00:57:28
might be an Elon Musk no no this could
00:57:30
be no no hold on I was talking about you
00:57:32
can take it back
00:57:34
immigration typically includes when you
00:57:37
say that word
00:57:38
the Corpus of people coming in for
00:57:40
education and the people coming across
00:57:41
the southern border so if you were to
00:57:43
say immigration most people would
00:57:45
recently say that's both of those
00:57:46
buckets I separated them out here so we
00:57:48
could have a reasonable discussion
00:57:49
recruitment of higher education talented
00:57:52
people with low
00:57:54
education
00:57:56
migrant workers they are two different
00:57:58
buckets and you have to be able to say
00:58:00
these are two different buckets and that
00:58:03
we should have a point based system if
00:58:05
and this is the conversation that
00:58:06
doesn't happen amongst politicians but
00:58:08
can happen here look at Canada look at
00:58:10
Australia they have what's called a
00:58:11
point-based immigration system they give
00:58:13
you points for everything that you bring
00:58:16
to the country if you bring money if you
00:58:18
speak the native language if you have a
00:58:20
degree if you have a higher education
00:58:21
degree or you have skills that that
00:58:23
country needs our country needs to move
00:58:26
to a point-based system if you're coming
00:58:28
across the board and you don't speak the
00:58:29
language and you don't have an education
00:58:30
you have zero points if you have a
00:58:32
master's degree
00:58:34
two or three points and you can let in
00:58:36
buckets of people based on compassion
00:58:38
based on meeting service workers and
00:58:41
based on needing the next Elon Musk or
00:58:44
the next David sacks or Shabbat
00:58:45
polyhapatia I think the the argument
00:58:47
jaycal is that the compassion argument
00:58:49
falls on deaf ears in a time where
00:58:52
people feel we cannot afford it and it's
00:58:54
a luxury to embrace that's the level of
00:58:56
immigration right now just pick a number
00:58:57
we can reasonably absorb this is what
00:58:59
finally look at the southern border and
00:59:01
see chaos obviously they want to get
00:59:03
that under control before they're going
00:59:05
to adopt your you know point-based
00:59:07
system we can do two things at once we
00:59:09
could do another point-based systems
00:59:13
I like the idea of I don't know if my
00:59:15
point was your points but in concept I
00:59:17
like to find your points
00:59:18
no no we don't need to I like the idea
00:59:20
of admitting immigrants based on skills
00:59:23
the country actually needs and a simple
00:59:25
recognition that's better to bring in
00:59:27
people who are neatly productive hold on
00:59:29
they could add to our economy as opposed
00:59:30
to being net government recipients
00:59:32
dependents we're done we're done there
00:59:34
are countries I just want to make a
00:59:35
point there are countries the
00:59:37
Scandinavian country specifically that
00:59:39
have said we can accept up to this many
00:59:41
folks who are uneducated who don't speak
00:59:44
the language because we have this many
00:59:46
teachers and this many slots in school
00:59:48
and so I think it was Finland and Sweden
00:59:50
they said we can accept 50 000 per year
00:59:52
of this type of immigration based on
00:59:55
compassion that's the reasonable
00:59:57
discussion that has to happen here
00:59:58
did you just say that we have to do
01:00:00
these two things at the same time
01:00:01
meaning that until we impose a an
01:00:04
overhaul of our entire immigration
01:00:06
system to be based on skills and points
01:00:08
that we can't enforce the southern
01:00:10
border no I think you can enforce the
01:00:12
southern border and do it at the same
01:00:15
time
01:00:16
let me just tell you there's going to be
01:00:18
Canada and Australia are already doing
01:00:21
it let me just tell you there's not
01:00:22
going to be a broad-based constituency
01:00:23
in this country for the type of
01:00:24
immigration reform you're talking about
01:00:25
until you get the southern border under
01:00:28
control because people look at that on
01:00:29
the news and see chaos
01:00:31
and there's no excuse me they should be
01:00:33
thoughtful they should be thoughtful and
01:00:35
they should just look at what Canada and
01:00:36
Australia have done those countries have
01:00:38
actually controlled this and it's not a
01:00:40
polarizing issue there it's a pragmatic
01:00:42
issue okay guys I'm going to move us
01:00:43
forward
01:00:45
to the uh
01:00:46
the Banning of tick tock so I want to
01:00:48
kind of change the the tone a little bit
01:00:51
this uh story recently
01:00:54
is that Tick Tock has been banned for
01:00:58
use on the campus Wi-Fi network let's go
01:01:00
at a number of universities including UT
01:01:03
Austin Auburn Boise State the University
01:01:05
of Oklahoma so college students can't
01:01:07
access the app when they're on the
01:01:08
campus Network this is following 19
01:01:11
states that recently banned Tick-Tock
01:01:13
and government devices as everyone knows
01:01:15
Tick Tock is a product
01:01:17
from bike dance which is a chinese-based
01:01:19
company and there's been quite a lot of
01:01:23
political and Regulatory Huffs and
01:01:25
Gruffs about bike dance having this
01:01:27
level of insight and access
01:01:30
to users in the United States with the
01:01:33
Assumption being that much of the data
01:01:34
that they're pulling out of the app is
01:01:36
available to the Chinese Communist party
01:01:38
which creates a security threat to the
01:01:42
United States
01:01:44
that's one argument
01:01:46
I think there is also a significant
01:01:49
tie-in to bike dance there's over eight
01:01:52
billion dollars of capital invested in
01:01:53
bike Dance by firms that we know well
01:01:56
like Sequoia Capital tiger Global kotu
01:01:58
Susquehanna and others they're trying to
01:02:00
find a way to monetize their investment
01:02:02
in what is truly the most viral fastest
01:02:05
growing highest revenue growing biggest
01:02:07
startup in the world right now in bike
01:02:10
dance so there's a restructuring
01:02:12
proposal apparently underway that's
01:02:13
being discussed in Washington DC right
01:02:15
now to try and restructure the
01:02:17
organization and the ownership structure
01:02:18
and the oversight of tick tock and bike
01:02:21
dance such that U.S regulators and U.S
01:02:24
companies can oversee the data the use
01:02:26
of the data the algorithms underlying
01:02:28
Tick Tock and monitor them from within
01:02:30
the United States question for this
01:02:32
group here on the McLaughlin group
01:02:34
of 2023 is does that do enough for you
01:02:38
McLaughlin
01:02:39
do you guys think that that's enough
01:02:41
first up is uh chamoth who's been
01:02:44
silenced for a bit I think this is
01:02:45
really bad news for bite dense basically
01:02:47
what's happening is that and tick tock
01:02:49
all the frustration that all these
01:02:51
legislature legislators and politicians
01:02:54
have had over
01:02:56
Facebook and Google
01:02:59
and other sort of big tech companies
01:03:02
is going to get focused on bite dance
01:03:04
because you have this common enemy that
01:03:06
you can point to as a boogeyman of sorts
01:03:08
and I'm not saying that it's right but I
01:03:10
think that what you're starting to see
01:03:12
is it's much easier
01:03:13
to pick a fight with the Chinese company
01:03:15
and win and get broad-based support than
01:03:18
it is to pick a fight against an
01:03:20
American company with a bunch of
01:03:22
American employees and American market
01:03:24
cap and American know-how and American
01:03:26
IP that gets impacted so
01:03:30
I don't think this is going to end well
01:03:32
for tick tock and
01:03:33
I think the goal if I were any of these
01:03:36
people on the cap table
01:03:37
would be to sell it in secondary to
01:03:41
somebody else and get out I think the
01:03:43
next big shoe to drop
01:03:46
is going to be advertisers who come
01:03:48
under a lot of pressure
01:03:50
so for example think of all the
01:03:52
advertisers that have left Twitter
01:03:54
there is a point of efficiency where you
01:03:56
can live with all of the mess that
01:03:58
Twitter has because it comes with a lot
01:04:00
less scrutiny and oversight and
01:04:02
political pressure than advertising on
01:04:03
tick tock and that I think is the next
01:04:06
kind of like big wave here so I think
01:04:08
it's very very bad I think the
01:04:10
Enterprise value of this company is
01:04:12
quite challenged
01:04:14
and these guys should try to sell and
01:04:17
get up who are the buyers in that
01:04:19
secondary Market though I mean that's a
01:04:21
lot of capital the thing is the cap
01:04:23
tables haven't been segregated so what
01:04:25
you own is equity and bite dance right
01:04:27
but the problem is the look through
01:04:28
ownership would will discount a lot of
01:04:32
tick tock if they see a lot more of this
01:04:33
stuff happening you guys have to
01:04:34
remember this is the first three or four
01:04:36
weeks of 2023. wait till we're here in
01:04:39
September and October or November wait
01:04:40
till the election year starts
01:04:43
it's not good so
01:04:46
it's a discount on bike dance that
01:04:48
probably
01:04:49
takes bike dance down by 70 or 80
01:04:51
billion so that's a 35 40 discount to
01:04:54
their last mark
01:04:57
so you know if somebody can sell in the
01:04:58
high 100 billions of dollars I think you
01:05:00
should I think they should probably they
01:05:01
should consider it there's
01:05:03
it's worth it I think Jacob I know
01:05:05
you've got strong opinions I think you
01:05:07
have to be incredibly pragmatic here
01:05:08
this is the same as the 5G issue you
01:05:11
cannot trust the Chinese government to
01:05:13
not steal intellectual property or to
01:05:16
put back doors into the software it is
01:05:18
common business practice there Huawei
01:05:20
was banned they basically stole the
01:05:22
source code from Cisco that was proven
01:05:24
and it was proven that they were spying
01:05:26
on people Canada the UK the United
01:05:29
States Vietnam everybody has banned
01:05:31
using 5G technology from China for a
01:05:34
reason because they will use it to spy
01:05:36
on you this is uh the nature of an
01:05:40
authoritarian government it is far too
01:05:42
powerful to have a
01:05:44
not only the surveillance capabilities
01:05:46
that are built into owning Tick Tock in
01:05:48
the hands of the Chinese Communist Party
01:05:52
to have the ability to very in a very
01:05:55
nuanced fashion
01:05:57
Trends certain videos that would steer
01:05:59
the United States in a certain direction
01:06:02
yeah stupidity is one of course right
01:06:06
they're letting their you need 16
01:06:08
minutes that 60 Minutes clip is
01:06:09
incredible right
01:06:11
they're showing science videos to the
01:06:13
kids in China exactly and they're
01:06:14
showing stupid nonsense to the kids in
01:06:16
America what do you think over they're
01:06:18
trying videos
01:06:19
our children versus their children you
01:06:22
can be 100 certain they're doing psyops
01:06:23
on our children as we speak they are
01:06:25
trying to make us dumb and distracted
01:06:27
while they get smart and sharp by the
01:06:29
way it's very simple if you're a Zucker
01:06:31
so this is not the choices of our kids
01:06:34
the algorithm just gives you more what
01:06:36
you want exactly of course but that
01:06:38
that's like saying if you gave kids a
01:06:40
choice between broccoli and chocolate
01:06:41
bars of course chocolate bars if you put
01:06:43
this on the supermarket and say eat
01:06:45
they're gonna go right to the cereal the
01:06:46
job of a parent tax is number one know
01:06:48
their name and then number two
01:06:49
differentiate genetic pen and Pad sex
01:06:52
good things and that's your questions
01:06:54
the future is not bright for tick tock
01:06:57
here because it's gotten caught up in
01:06:59
the geopolitical Rivalry between China
01:07:01
and the United States and that's only
01:07:03
going to keep getting more and more
01:07:04
intense the US and China are headed for
01:07:06
a big security competition and by dance
01:07:09
is caught in the middle so I agree with
01:07:10
Jamal about the future but you know this
01:07:13
claim is made that
01:07:15
Tick Tock is spyware
01:07:17
and you know it's listening to you it's
01:07:19
surveilling you it's keeping track of
01:07:20
you like what is the evidence for that
01:07:23
claim I just want to understand that a
01:07:24
little better like has anyone ever
01:07:25
proven that like Tick Tock is spyware
01:07:28
and if it is why doesn't Apple stop it
01:07:32
can you just explain that to me yeah I
01:07:33
think apple has a complicated
01:07:35
relationship with China so the claim
01:07:37
that they're not going to believe all
01:07:38
right so Jake your claim is let me I
01:07:41
just want to pin Jake out down on the
01:07:42
first section your claim is that 100
01:07:45
Tick Tock is spyware and apple is
01:07:48
letting it happen because their
01:07:49
relationship with the CCP I do not have
01:07:52
the evidence of specific instances of
01:07:54
them spying but I do know that this is
01:07:57
what the Chinese government uh
01:07:58
aspiration is is to be able to have back
01:08:00
doors to spy on all Americans that's why
01:08:03
they you know are trying to get wow away
01:08:06
well you don't even need to know that
01:08:09
because you can just open your eyes and
01:08:11
look at and I mean that's an insult but
01:08:13
you can just look at what Tick Tock has
01:08:15
the access to it has access to your
01:08:16
location has access to your camera roll
01:08:18
and it knows
01:08:21
you know uh everybody in your Social
01:08:23
Circle because it has your address book
01:08:25
so by having your address book having
01:08:27
your location and having access to your
01:08:29
photo role they have you compromised by
01:08:31
default the default settings when you
01:08:33
install Tick Tock it turns on local
01:08:35
network turns on microphone turns on
01:08:37
camera
01:08:39
turns on background app refresh and
01:08:40
turns on cell data so
01:08:42
tick knock is no worse than anybody else
01:08:45
in that because a lot of other apps are
01:08:48
very aggressively trying to harvest all
01:08:49
that data as well sucks like it's like
01:08:51
Alexa's always listening to you right
01:08:53
but you feel but you feel safer with
01:08:55
Alexa because it's a it's an American
01:08:57
company or the perception of safety is
01:08:59
there so I don't think there's a huge
01:09:02
thing to prove other than yeah there's a
01:09:04
setting that allows you to turn on the
01:09:06
microphone and it's a default and they
01:09:08
do it but they were caught I just want
01:09:10
to make sure you guys understand this
01:09:11
according to the New York Times by dance
01:09:13
the Chinese parent company of tick tock
01:09:14
said on Thursday that an internal
01:09:16
investigation found that employees had
01:09:17
inappropriately obtained the data of U.S
01:09:20
Tick Tock users including that of two
01:09:22
reporters over the summer a few
01:09:24
employees on a bite dance team
01:09:26
responsible for monitoring employee
01:09:28
conduct tried to find the source of
01:09:29
suspected leaks of internal conversation
01:09:31
and business documents to journalists in
01:09:32
doing so the employees gained access to
01:09:34
the IP addresses and other data of two
01:09:36
reporters and a small number of people
01:09:38
connected with reporters via their Tick
01:09:40
Tock accounts they were trying to
01:09:41
determine if those individuals were
01:09:43
within the proximity of by dance
01:09:44
employees according to this company so
01:09:46
there's an example of them using the
01:09:47
technology to try to track down leaks
01:09:49
hold on a second that's exactly what any
01:09:51
app a company can do the photos the
01:09:54
screenshots we got from Twitter that
01:09:57
were shared in all those files or
01:09:59
whatever that happened a few weeks ago
01:10:00
showed that that many Twitter employees
01:10:03
were able to log in and just view the
01:10:05
direct messages between Twitter users
01:10:07
and that there's no necessarily blogging
01:10:09
or access privileges required to have
01:10:12
access to that information there are
01:10:14
these holes in all of these social
01:10:15
networking and consumer uh digital
01:10:18
consumer product companies that allow
01:10:20
individuals to go in and do things
01:10:23
it's a feature sure but it doesn't
01:10:25
reference like some systematic
01:10:28
um yeah but those aren't controlled by a
01:10:29
government agency no that's that's the
01:10:31
key thing what Jay Cal just said is a
01:10:33
key thing everybody tries to get these
01:10:35
things turned default on every app tries
01:10:37
to get access to your camera roll to
01:10:39
your contacts to turn on the microphone
01:10:40
the problem isn't that those settings
01:10:42
exist because Apple created them and
01:10:45
Apple created a privacy framework where
01:10:47
you have to opt out of it okay the issue
01:10:49
is that that data instead of going to an
01:10:52
American company with American on a with
01:10:54
American data centers and American
01:10:56
Service it's going to somebody in China
01:10:58
or it's the perception that that's
01:11:00
happening that I think is a Death Note
01:11:03
and
01:11:04
this is also excluding all of the work
01:11:07
that every single big tech company must
01:11:10
be doing to point the finger away from
01:11:12
them and this is something they can all
01:11:14
agree on if yeah if you got Andy jassy
01:11:17
and Zuck and Sundar and Satya Nadella in
01:11:20
a room what do you think they could all
01:11:22
agree on hey guys are we better off
01:11:23
pointing the fingers at each other or
01:11:25
should we just point it over there to a
01:11:26
company based in China
01:11:28
so do you think do you think that Tick
01:11:31
Tock in a way is being scapegoated here
01:11:32
or do you think it's a real security
01:11:33
threat both both yeah that's yes to both
01:11:36
and you know what I think what we saw
01:11:38
with the the Twitter files for me
01:11:40
personally the one that uh was most
01:11:43
concerning
01:11:44
was the fact that the FBI
01:11:47
was being treated they didn't have
01:11:50
control of it like the Chinese
01:11:51
government has control over by dance at
01:11:53
a wholesale level but they were being
01:11:55
given
01:11:56
you know pretty
01:11:58
um close to giving God privileges but
01:12:01
they had more influence than they should
01:12:03
have and they should have gotten
01:12:03
subpoenas right so even in a democracy
01:12:05
like the United States you can see the
01:12:07
FBI using techniques to get employees on
01:12:11
their side
01:12:13
to get information on specific users
01:12:15
imagine if the FBI just had God Mode for
01:12:18
Twitter or Facebook like what would
01:12:20
happen even in a democracy we see it
01:12:21
happen we see abuse
01:12:23
the Chinese government is a Communist
01:12:26
party they have no problem sucking the
01:12:28
data down of every single person and
01:12:31
using it however they want
01:12:33
I think the the problematic thing is
01:12:35
that when you look at the capital
01:12:36
structure of these Chinese companies
01:12:38
post now XI being ruler for life is the
01:12:42
Chinese government has typically a seat
01:12:44
on all of these boards
01:12:46
they also typically have a golden vote
01:12:49
and so when you think about the
01:12:51
governance the governance of these
01:12:52
companies has tilted far away from a
01:12:56
normal cap table where it's one
01:12:58
shareholder one vote two you are allowed
01:13:01
to exist on this cap table at the
01:13:03
benevolence
01:13:04
of the government and so I think that
01:13:07
you have to factor that in as well Sac
01:13:08
so you know is it Amplified probably but
01:13:12
is there also non-trivial risk that we
01:13:15
would never give to any other company
01:13:17
absolutely like you know take the
01:13:19
opposite example
01:13:20
how would we react if the government had
01:13:24
a golden vote and a board seat on meta
01:13:30
going into an election
01:13:33
I mean one party would be crazy and the
01:13:36
other party would stay mum's the word
01:13:37
that's what would happen well I mean
01:13:39
let's talk about but let's let's be
01:13:41
pragmatic the news reports that came out
01:13:43
this week indicate that they're talking
01:13:45
about restructuring bike dance so let me
01:13:48
propose this to you guys if Tick Tock us
01:13:50
were set up as Tick Tock us Inc it's its
01:13:53
own C Corp it's based in the U.S and
01:13:55
bite dance owns
01:13:57
passive non-voting shares in Texas all
01:14:01
the software all the services the
01:14:03
algorithms are all run in the US the
01:14:05
data is only sitting on servers and the
01:14:07
Chinese have an economic interest
01:14:08
ultimately and what happens with that
01:14:10
asset but that asset is entirely managed
01:14:12
right that's totally fine that should be
01:14:14
a goal in the US shut it down or do that
01:14:17
and if that happens you trigger cepheus
01:14:19
so you'd have to then make an exception
01:14:21
that sounds like it's part of the
01:14:23
discussion that's underway right now is
01:14:24
how do we get past this regulatory
01:14:26
hurdle because I don't know guys I don't
01:14:28
know how you turn off Tick Tock for 100
01:14:30
million people that are using it for two
01:14:31
hours a day guys
01:14:36
we're rejecting deals left right and
01:14:39
Center at much much smaller thresholds
01:14:40
because of cepheus because it's we're
01:14:42
not and we're not even dealing with
01:14:43
China assume you get past if yes assume
01:14:46
that there's no that thing that's right
01:14:47
away it's a bad assumption right but
01:14:50
like that's obviously there's eight
01:14:51
billion dollars a capital that's right
01:14:54
the minute that if you at the Chinese
01:14:55
government
01:14:56
around and do an end around on cepheus
01:14:59
to own 30 passively then everybody who's
01:15:02
had a deal rejected for a much smaller
01:15:04
threshold for a much more benign issue
01:15:06
will sue
01:15:08
except that they started with this asset
01:15:10
versus buying into it right that's the
01:15:11
difference and what they're doing is
01:15:13
they're seeding that the difference here
01:15:15
is their seeding control of the asset to
01:15:17
U.S investors and oversight by the US
01:15:19
government versus the reverse which is
01:15:21
trying to come in and buy an economics
01:15:23
that's not what cepheus adjudicates it
01:15:25
doesn't adjudicate where was this
01:15:26
originated adjudicates in this cap table
01:15:28
does this person exist should they exist
01:15:31
at what threshold what do they know and
01:15:33
are we giving something that we
01:15:34
shouldn't give and I'm saying yeah let
01:15:36
me give you another um interesting if
01:15:38
the pragmatic answer is you can't just
01:15:40
make up a bunch of stuff that blows up a
01:15:42
bunch of others though let me frame it
01:15:43
differently what if bike dance sold Tick
01:15:46
Tock us to a U.S owned private Equity
01:15:49
Consortium I'm a U.S private Equity
01:15:50
Consortium that effectively bought Tick
01:15:52
Tock us and operated it here in the US
01:15:54
but that's exactly what should happen
01:15:55
but my point is those people are smart
01:15:57
enough to not pay full price they'll say
01:15:59
you're [ __ ] that asset is worth zero I
01:16:03
will buy it for 10 billion dollars take
01:16:05
it or leave it and you know what they'll
01:16:07
have to do they'll have to take it so my
01:16:09
point is the equity value is so impaired
01:16:11
in this thing would you buy that for 10
01:16:13
billion of course I'm a buyer but these
01:16:15
guys are smart enough to drive a huge
01:16:17
barg a hard bargain so if you're
01:16:19
existing on the cap table and you've
01:16:20
marked it at 320 I would be [ __ ]
01:16:23
selling it okay well look something like
01:16:25
this is gonna happen so it'll be
01:16:26
interesting to watch and if any group of
01:16:28
people got together and tried to
01:16:30
actually buy it for what the fair market
01:16:32
value
01:16:33
is worth via a spreadsheet is a horrible
01:16:36
investor In This Moment
01:16:38
if you should hold a gun to their head
01:16:40
and you should extract a massive pound
01:16:42
of Flesh that gives you a huge margin of
01:16:44
safety and makes you money good we know
01:16:45
people who are shareholders if they
01:16:47
could have sold it at 320 or 120 they
01:16:49
would have sold already well no there
01:16:51
are there are people that will buy this
01:16:52
thing in the hundreds that's in size
01:16:54
then sell everything you can and then
01:16:56
put it into another company now the
01:16:58
problem is you have to show a markdown
01:16:59
because you've already marked it at 320
01:17:01
so I got to take a 65 discount yeah if
01:17:04
you're if if you're underwater you're
01:17:05
underwater but for anybody who got into
01:17:07
the sub 1 billion round you can't eat
01:17:10
irr and you can't eat paper markups you
01:17:13
can only eat the distribution so get the
01:17:15
DPI and move on as well get the DPI and
01:17:16
move on it's another bet you could place
01:17:18
Why Try to okay be greedy and get the
01:17:20
last 3x out of this investment I want to
01:17:22
move away from software meets Leisure to
01:17:25
software meets human health and
01:17:27
productivity
01:17:28
a couple weeks ago we were going to talk
01:17:30
about this last week it was announced
01:17:31
that bio and Tech was buying insta-deep
01:17:33
insta-deep is a broad horizontal AI or
01:17:36
machine learning tools company services
01:17:38
business they partner with big
01:17:40
businesses
01:17:41
to help them build out ml driven
01:17:43
infrastructure
01:17:44
to improve their products and their
01:17:46
operations and their businesses
01:17:49
one of their customers was bioentech the
01:17:52
company that designed and owned VIP for
01:17:56
the original Pfizer covid vaccine one of
01:17:59
the original Originators of
01:18:02
mrna-based technology bioentec doesn't
01:18:05
just focus on mRNA technology they also
01:18:07
focus on cell and Gene therapies the the
01:18:10
novel new kind of modalities that are
01:18:12
emerging in
01:18:14
in Therapeutics
01:18:16
and you know it was a really interesting
01:18:18
acquisition it was a 250 I think person
01:18:20
team that they bought the company for
01:18:22
about 600 million dollars specifically
01:18:24
to improve how AI can be used to
01:18:27
accelerate drug discovery
01:18:29
I'll just make a comment on this and
01:18:31
then sax I'd love to kind of hear your
01:18:32
point of view on these types of
01:18:34
businesses broadly
01:18:36
the capabilities of machine learning
01:18:39
when applied to a particular vertical
01:18:40
are quite profound I you know I've
01:18:42
certainly been involved in this space in
01:18:44
agriculture and increasingly doing more
01:18:46
of this work in Pharmaceuticals and and
01:18:48
biotech
01:18:50
and you know when you can have large
01:18:52
unique data sets that you can then model
01:18:55
using these tools and these capabilities
01:18:57
and be predictive about what the next
01:19:00
product iteration should be
01:19:02
it can really change the value and the
01:19:04
trajectory of your business one of the
01:19:06
big trends in Pharma right now is to
01:19:08
move from in vitro testing meaning
01:19:10
you're running biochemical experiments
01:19:12
in labs in assays iterating testing
01:19:14
experimenting to see what molecules work
01:19:16
or what protein does what and if it
01:19:18
binds to the Target and doing more of
01:19:21
this in silica as it's being called
01:19:22
which is in software and rather than
01:19:24
just doing testing and software you can
01:19:26
actually use tools like Alpha fold that
01:19:28
can be predictive of large molecules and
01:19:31
how they can drive outcomes
01:19:33
to make decisions about what to put in
01:19:34
your pipeline so if you take 99 of the
01:19:37
junk out of the top of your pipeline and
01:19:39
you only focus on the one percent that
01:19:40
the software predicts will be more
01:19:42
successful you much more quickly get
01:19:44
drug Discovery through the pipeline and
01:19:46
you have a much higher hit rate so the
01:19:48
ROI is extraordinary particularly when
01:19:50
you're talking about multi-billion
01:19:51
dollar revenue streams coming out the
01:19:53
other end of that pipeline and so I
01:19:55
think you know the way this reads these
01:19:56
guys raised 100 million dollars in a
01:19:58
round last year sold the company for 600
01:20:00
million it seems very similar to
01:20:02
deepmind being bought by alphabet a few
01:20:03
years ago where the application of the
01:20:05
the team is pretty broad across a number
01:20:07
of opportunities but bioentec bought
01:20:10
them to focus on the kind of Pharma
01:20:12
space so I guess tax you know in in the
01:20:15
earlier stage and you know I see a lot
01:20:16
of teams now that are like Hey we're AI
01:20:18
for this or ml for that a lot of
01:20:21
Pharma and biotech deals have to have
01:20:24
the catchphrase ml or AI in their
01:20:27
writing now because of the economic
01:20:28
Improvement of those businesses are you
01:20:31
looking at Enterprise software
01:20:32
businesses that aren't necessarily about
01:20:34
the typical
01:20:35
subscription model where you sell a seat
01:20:38
license and people pay for that but have
01:20:40
this broad tool set and toolkit where
01:20:43
these folks are earning Revenue share or
01:20:45
participating in a Services Revenue
01:20:46
stream
01:20:47
for enhancing the value of their their
01:20:49
their partner in the AI or ml space and
01:20:52
what's the Better Business model because
01:20:53
I think this is where so many new teams
01:20:55
are starting out is what's the business
01:20:57
model and what should we be focused on
01:20:59
with our ml toolkit
01:21:02
I mean the short answer is no we're
01:21:04
having done any deals like that uh I
01:21:07
mean we're not Pharma investors so I
01:21:09
don't know how I would be able to
01:21:10
evaluate even if it is a software
01:21:11
product I don't know how to evaluate its
01:21:14
um effect on Pharma outcomes so I mean
01:21:18
we haven't done any deals other
01:21:19
verticals I mean like do you look at ML
01:21:20
and AI companies that are more services
01:21:22
or partner oriented versus just selling
01:21:24
seat licenses to a software tool I mean
01:21:26
is that a big Trend you're seeing I
01:21:27
don't think we have enough data to
01:21:29
tell you what the trend is we did a deal
01:21:31
called Pearl which is creating an AI for
01:21:34
Dentistry
01:21:36
so what it'll do is it scans in all of
01:21:39
the x-rays and you know down records
01:21:41
from from Dental practices and it gives
01:21:44
a kind of a second opinion it can spot
01:21:47
things like cavities and things like
01:21:48
that or just changes in the condition
01:21:50
where it's really powerful is over time
01:21:51
right if it's got your last six sets of
01:21:55
x-rays over uh whatever six year period
01:21:57
it can detect changes that are probably
01:22:00
you know hard for a human to see
01:22:03
so they think they can get to like
01:22:04
better than human sort of diagnosis by
01:22:08
using computer vision
01:22:10
and then we invested in
01:22:12
sort of after that where we realized
01:22:14
okay this is kind of like a powerful
01:22:15
application so we invested in a company
01:22:18
called Robo flow which creates tools for
01:22:21
computer vision so Pearl created its own
01:22:24
tools for taking a large number of you
01:22:28
know X-rays and classifying them and
01:22:30
then creating their own AI tools
01:22:32
roboflow gives you that same tool set
01:22:35
but you can run it on any computer
01:22:37
vision project and they seem to be
01:22:39
building a pretty big universe of
01:22:41
software developers who are using their
01:22:43
tools and in this case this was a team
01:22:45
that was bought they bought a 250 person
01:22:47
team for 600 million dollars that just
01:22:48
had this capability set really and a
01:22:50
toolkit does that change your outlook
01:22:52
for investing in mlai companies when you
01:22:55
see a 600 million dollar exit for
01:22:58
effectively a capability they didn't
01:22:59
have you know a core product that was in
01:23:01
Market they were doing kind of these
01:23:02
co-development deals but I mean how much
01:23:05
does this
01:23:06
already yeah ai's already the hot thing
01:23:09
and everyone's kind of looking at this
01:23:10
now I don't know like you know ever want
01:23:13
to base an investment decision on the
01:23:15
fact that some acquirer might come in
01:23:18
and buy you for a large amount of money
01:23:20
when you have no revenue or
01:23:23
business model I just think like that's
01:23:24
not really a
01:23:25
sustainable although it does seem that
01:23:28
AI Engineers go for 2 million each I
01:23:31
think is kind of your point Dave on an m
01:23:33
a basis yeah I mean your Deep Mind got
01:23:35
bought for what 600 by Google and I
01:23:37
think they had 200 people I think it was
01:23:39
like 400 yeah it was like was it 400
01:23:40
yeah so yeah
01:23:41
it does seem like and I think deepmind
01:23:44
did not have a business Concept in mind
01:23:47
when they were funded they just wanted
01:23:49
to do research right that was kind of
01:23:50
thing about that company platform
01:23:52
capability similar to instant deep I
01:23:53
mean there's a lot of these that's what
01:23:55
I'm pointing out is like some of these
01:23:56
platform capabilities end up just
01:23:58
getting fought for
01:24:00
you know huge Psalms yeah
01:24:04
the amount you can't invest in a company
01:24:07
hoping for an unreasonable acquisition
01:24:09
meaning unreasonable meaning that
01:24:11
unreasonable acquire yeah yeah like
01:24:14
unreasonable meaning that your own
01:24:15
metrics don't reflect that valuation as
01:24:18
a business you might be worth it as a
01:24:20
strategic acquisition of somebody else
01:24:22
but you you actually raise interesting
01:24:24
question which is is a seat model the
01:24:28
right way for one of these companies to
01:24:30
price the product and you may be right
01:24:31
that that the seat license model doesn't
01:24:33
really work because
01:24:35
like how many seats do you really need
01:24:36
to buy for these companies look I mean
01:24:38
one of my like one product engineer yeah
01:24:40
like I mean we've seen this we've even
01:24:43
seen we've had these debates inside the
01:24:46
companies I mentioned where like you
01:24:48
know charging a 10 or even 100 a month
01:24:51
seat doesn't doesn't really reflect the
01:24:54
value of the insights that are being
01:24:55
created and so yeah there are like you
01:24:58
know they're I don't think this has been
01:25:00
figured out yet but this is the big
01:25:01
question in ml and AI when I was at
01:25:03
Monsanto you know we had all this IP
01:25:05
licensing deals we do or um new products
01:25:07
would come to Market and it was never
01:25:09
Cost Plus or simple pricing it was
01:25:11
always about value capture it's in an
01:25:13
Enterprise setting you know because we
01:25:14
sold to Farmers it's like how much value
01:25:16
Are you delivering for the farmers if
01:25:17
it's a hundred dollars a profit an acre
01:25:18
you try and charge an incremental thirty
01:25:20
dollars an acre for that product and it
01:25:22
was always a one-third value capture
01:25:24
model and the same is true in biotech
01:25:26
and Pharma the producer of the product
01:25:28
or the co-developer of the product is
01:25:30
often front of value capture and it's
01:25:32
not a site seat license and it's not a
01:25:34
service fee it's more ultimately we want
01:25:36
to get a royalty on the outcome on the
01:25:37
Improvement that we can deliver to you
01:25:39
and so there's all these novel business
01:25:40
models that are emerging at least that
01:25:42
I'm seeing in Pharma and biotech to
01:25:44
participate more meaningfully ultimately
01:25:45
in the drug development outcome versus
01:25:47
just getting charged a fee for doing a
01:25:49
service or a fee for a license to a
01:25:51
software packet the value of these
01:25:52
companies has gone down I was a early
01:25:54
investor series a investor in a company
01:25:57
called Flatiron Health we sold it for
01:25:59
1.9 billion dollars to Roche that's the
01:26:02
biggest exit in this space for this
01:26:03
machine learning enabled stuff it
01:26:05
happened in 2018
01:26:06
and so what's really happened is the
01:26:08
value of acquisition in M A has gone
01:26:09
down even as a technology capability has
01:26:12
gone way way up and why is that it's
01:26:14
because this stuff has yet to be proven
01:26:17
to actually meaningfully improve the hit
01:26:20
rate for these drug companies so whether
01:26:22
it's biotech or Roche or anybody else
01:26:24
the biggest problem we still have is
01:26:27
getting the design space
01:26:30
guessing that better and these machines
01:26:33
are better at doing raw calculations but
01:26:35
they're not necessarily better at
01:26:36
veering towards this design space over
01:26:39
this design space and so as a result
01:26:40
you're not improving the the either the
01:26:44
slugging percentage or the batting
01:26:47
average of these Pharma companies and
01:26:49
that's why they're paying less and less
01:26:50
so everybody will have this capability
01:26:52
as an adjunct
01:26:53
the thing that you have to do is sort of
01:26:56
what
01:26:57
what you guys have said which is if
01:27:00
there's a company that can actually do
01:27:01
better guessing at the top of the funnel
01:27:04
the thing that you should probably do is
01:27:06
just give it away in return for a
01:27:08
back-end rev share and a royalty and
01:27:10
that business also exists so you know
01:27:12
the best performing company in Pharma is
01:27:14
a company called royalty Pharma it's a
01:27:16
22.5 billion dollar company that has 90
01:27:18
ebitda margins it exists in Ireland it's
01:27:22
run in New York by this wonderful
01:27:23
entrepreneur Pablo lagaretta but that's
01:27:25
what he does he buys small pieces of
01:27:27
royalties and his whole thing is like
01:27:30
the Paul Graham thing at YC
01:27:32
I'll give you just that little amount of
01:27:34
support and all you need is a little
01:27:36
lift in valuation to justify giving me
01:27:38
the six percent
01:27:39
and the tooling company the AI company
01:27:42
that does that could win who would go to
01:27:45
Roche and buy on Tech or lily or
01:27:47
somebody else and just say look use my
01:27:49
tools and whatever drug you generate off
01:27:52
of me
01:27:53
I just want a three percent royalty and
01:27:55
all you need to do is just show a three
01:27:57
percent lift across a portfolio of
01:27:59
assets that would be a killer business
01:28:01
model because if you look at what
01:28:02
Pablo's done
01:28:03
over a large number of successes that's
01:28:06
a ginormous company
01:28:08
Jacob I mean are you investing in the
01:28:11
seed stage mlai companies and are there
01:28:13
novel business models that you're seeing
01:28:15
we're not sensors yet to be honest we
01:28:18
are seeing people play with chat GPT and
01:28:21
kind of
01:28:22
do you know
01:28:24
experiments but you know the more I've
01:28:28
used chat GPT we've connected it to our
01:28:31
slack so you can actually ask a question
01:28:35
in our slack in a channel called AI
01:28:37
testing and it will give the answer and
01:28:39
everybody can see people like playing
01:28:40
with it he you know it's kind of like a
01:28:43
parlor trick
01:28:45
now I'm in like that phase where I'm
01:28:47
like yeah this is impressive but it
01:28:50
didn't actually solve my problem
01:28:52
and it's slightly faster than doing a
01:28:55
Google search so
01:28:57
I am thinking there's going to be
01:29:00
a really good business uh created in
01:29:03
taking
01:29:04
the open source projects and forking
01:29:07
them and verticalizing them like you
01:29:09
know saxes
01:29:10
one that's doing dental work you know
01:29:12
like this makes sense to me somebody
01:29:14
should do it in accounting somebody
01:29:15
should learn all of Gap accounting which
01:29:18
is pretty simple because it's published
01:29:19
fasbi all of this nonsensical accounting
01:29:22
rules and give you a hundred percent
01:29:24
guarantee of no malfeasance so for
01:29:27
example you guys saw this Brazilian
01:29:29
company you want AI accounting that's
01:29:31
your that's your look at this company
01:29:32
Logistics
01:29:36
look at this company americanas in
01:29:38
Brazil which just torched 20 billion
01:29:40
dollars of Enterprise Value why because
01:29:42
these guys were using Excel to do a
01:29:45
bunch of complicated capitalization and
01:29:48
cost accounting made two or three years
01:29:50
of mistakes it added up to two or three
01:29:52
billion dollars and they're basically
01:29:54
going to file bankruptcy in the next few
01:29:56
days that's completely avoidable human
01:30:00
error that should never happen
01:30:02
and an AI would be perfect for that like
01:30:05
this is not super controversial to just
01:30:07
follow Gap accounting right yeah I don't
01:30:10
know if you need AI for that I think you
01:30:12
just need software like a database would
01:30:14
be good but no the problem is the
01:30:17
database exists today like everybody
01:30:18
sits on top of Oracle GL or workday it
01:30:20
doesn't prevent these errors so my point
01:30:22
is you got to get humans out of the
01:30:24
system and the AI should be the
01:30:25
accountant the AI knows the rules
01:30:27
generates the p l and says this is it
01:30:30
and by the way
01:30:31
that's way better risk management for
01:30:33
the CEO and the CFO because as you guys
01:30:34
know if you're the CEO of a public
01:30:36
company
01:30:37
you have to sign your signature that
01:30:39
these things are legitimate and how do
01:30:41
you know right I would way better know
01:30:43
that a computer did it like an open AI
01:30:45
algorithm tells me Tremont this p l is
01:30:46
perfect then some dude I don't know at
01:30:49
Ernst Young
01:30:50
okay
01:30:52
I have a question for socks
01:30:54
saxypoo can you please explain to me why
01:30:56
Alec Baldwin is going to get charged
01:30:58
with manslaughter for this rust thing
01:31:00
that seems really crazy can you just say
01:31:02
could you explain what happens on a set
01:31:04
with guns and how the hell did this
01:31:05
happen like what the hell is going on
01:31:07
well I've produced two movies but
01:31:09
neither one of them involved you know
01:31:11
guns or shootouts or anything like that
01:31:13
so I haven't had like first-hand
01:31:14
experience with this I have you're a gun
01:31:16
owner so you're an intersection of movie
01:31:18
producer and gun owner so it's a good
01:31:19
yeah I understand the rules of gun
01:31:21
safety and and that kind of stuff
01:31:23
look Alec Baldwin did not follow the
01:31:26
rules of gun safety the first thing I
01:31:28
would do if I was ever handed a gun
01:31:30
would be to clear it I'd like check to
01:31:33
see if it was loaded and clear it
01:31:35
I mean you never pointed at you at
01:31:37
somebody you always treat a gun as if
01:31:39
it's loaded even if you think it's not
01:31:40
but he was in a very specific situation
01:31:43
which is he's on a movie set and the
01:31:45
person who's handing him the gun is the
01:31:47
armorer and someone whose job it is and
01:31:50
said Colt gun yeah exactly it's somebody
01:31:52
whose job it is to make sure that the
01:31:54
gun is handled properly and unloaded and
01:31:57
all that kind of stuff and they're using
01:31:59
it on a set so I agree with you I don't
01:32:02
quite understand why Alec Baldwin is
01:32:05
liable in that situation for the gun
01:32:09
going off the person who screwed up here
01:32:11
the person who screwed up is the armor
01:32:12
the armor I have a question a person
01:32:14
whose job it was to never allow live
01:32:16
ammunition on the set but to handle the
01:32:19
guns properly this person
01:32:21
movies was that they were flying blanks
01:32:24
yeah they were so you're in blanks but
01:32:27
they had blanks and regular ones in
01:32:30
their kit for whatever reason because
01:32:32
they were shooting real ones as well but
01:32:34
this is involuntary manslaughter and I
01:32:36
think Baldwin is also the producer of
01:32:39
the film so I don't know it has to do
01:32:42
with his hiring of the armorer you know
01:32:44
what I'm saying that I can that I can
01:32:46
speak to listen yeah you you frequently
01:32:48
give stars in an independent movie a
01:32:51
producer title he's not responsible for
01:32:54
the physical production of the movie I
01:32:56
bet anything he's not there's a guy
01:32:57
called the line producer who's
01:32:59
responsible for the physical production
01:33:00
and my guess is he wasn't even
01:33:01
responsible for the business side of the
01:33:04
production they've got other producers
01:33:05
for that so it doesn't make sense to me
01:33:07
if they're going to charge him for
01:33:10
having some sort of overall liability as
01:33:11
a producer to then not charge the other
01:33:13
producers that just doesn't make any
01:33:15
sense so I think this producer credit
01:33:17
thing's probably a red herring like I
01:33:19
said I think the armorer is the person
01:33:21
who is seriously responsible for this
01:33:24
situation there are the ones who screwed
01:33:25
up they're the ones who had a
01:33:27
responsibility to make sure that the gun
01:33:29
handed to an actor I mean Alec Baldwin's
01:33:31
an actor yeah look conservatives in
01:33:33
social media are dragging the guy
01:33:35
because they think he's a douchebag and
01:33:36
he doesn't know how to handle guns but
01:33:38
that's not his job he doesn't he's
01:33:40
asking questions
01:33:41
in movies why would you ever have live
01:33:44
ammunition on a movie set you shouldn't
01:33:46
they shouldn't have you shouldn't it's a
01:33:48
mistake so so it's not as if like the
01:33:50
scene is different if you have a real
01:33:52
Bullet versus a blank
01:33:56
if I remember right there was a story
01:33:59
about how the gun Armory people were
01:34:02
taking members of the cast and crew and
01:34:05
they were shooting guns for fun in the
01:34:07
distance
01:34:08
they were doing like targets and messing
01:34:11
around and teaching people gun stuff and
01:34:12
just playing around but using live
01:34:14
ammunition and that that led into an
01:34:16
accident that there wasn't good kind of
01:34:18
transition that's really bad that sounds
01:34:20
like the kind of negligence that caused
01:34:22
this but unless there are facts we don't
01:34:24
know about I don't know why being
01:34:27
charged by the way
01:34:30
the armor that sounds totally legit to
01:34:33
me so guys listen I need to run another
01:34:36
call I was going to talk about this
01:34:39
really fantastic paper on the one of the
01:34:44
driving forces of Aging as demonstrated
01:34:46
by a team from Harvard
01:34:48
in in collaboration with many others
01:34:51
on epigenetics and the loss of data
01:34:55
integrity and epigenetics really being
01:34:56
the core driver of Aging in mammalian
01:34:58
cells it's an incredible paper it speaks
01:35:00
a lot to what we talked about last year
01:35:02
yamanaka factors and partial epigenetic
01:35:04
reprogramming of cells how they can
01:35:06
reverse aging these guys have
01:35:07
demonstrated it in a really powerful way
01:35:09
I'd love to spend some time on it maybe
01:35:11
we pump that science corner to next week
01:35:13
wrap up for today I think we've talked
01:35:14
about all sorts of fun stuff it's been a
01:35:17
real pleasure and an honor to be in the
01:35:20
seat of the world's greatest moderator
01:35:21
we missed him today we honor him we look
01:35:24
forward to having his return next week
01:35:27
chatting with you gentlemen and on
01:35:30
behalf of the all-in Pod and my
01:35:32
co-hostia David sacks Jason callicanus
01:35:34
thank you for listening bye bye love you
01:35:37
boys
01:35:41
your Winner's ride
01:35:43
rain man
01:35:44
[Music]
01:35:48
we open source it to the fans and
01:35:50
they've just gone crazy
01:35:51
[Music]
01:35:56
besties
01:35:59
[Music]
01:36:24
we need to get Mercies
01:36:29
[Music]
