00:00:00
all right everybody welcome to episode
00:00:01
94 of all in this is a summer unprepared
00:00:05
episode there's not much news we're
00:00:07
gonna wing it
00:00:09
with me again
00:00:11
in his uh golfing cap
00:00:13
the rain man himself
00:00:15
david sachs you do okay buddy yeah
00:00:18
that's good yeah all right i'm kind of
00:00:19
annoyed that we're taping on a wednesday
00:00:22
you know this is a slow news week it's a
00:00:24
slow news well that's not why we're
00:00:25
taping on wednesdays because you have to
00:00:27
want to go to burning man well whatever
00:00:28
i mean listen everybody has to get their
00:00:30
burn on sex have you ever been to
00:00:31
burning man yeah i've been before did
00:00:33
you like this was that burning man
00:00:34
really he was there on threesome
00:00:36
thursday
00:00:38
i've been a couple of times i think it's
00:00:40
uh it's a cool experience doing worth
00:00:43
doing you know
00:00:44
once or twice in your life it's not
00:00:46
something i want to do every year but um
00:00:48
i know a lot of people do like doing it
00:00:50
every year they're like really into it
00:00:52
i'm not really into it that way but i
00:00:54
think it was a worthwhile experience to
00:00:55
go at least once
00:00:56
have you been uh no
00:00:59
freeburg have you been i've not been now
00:01:02
i have no desire no i don't like driving
00:01:04
in the car for a long period of time and
00:01:05
well by the way i'll tell you i'll tell
00:01:07
you why i don't really have a huge
00:01:09
desire to go
00:01:11
i uh
00:01:12
i don't really have a huge desire at
00:01:14
this point in my life
00:01:15
to want to do a ton of drugs that's not
00:01:18
that's not just about that really
00:01:20
no really exactly what it's really about
00:01:22
is art are we joking right now
00:01:25
it's if you like art and you like music
00:01:27
it's amazing it's amazing i really i
00:01:30
really like art i think i actually
00:01:32
collect phenomenal art in fact i like to
00:01:33
go to like freeze the biennale
00:01:36
it would blow your
00:01:38
music no you have no idea the scale of
00:01:40
the art there is tremendous it is
00:01:42
extraordinary and if you're into music
00:01:43
can we just can we just call it what it
00:01:45
is it started out as a festival that did
00:01:48
celebrate art and creativity yeah and
00:01:50
over time became mass market and in
00:01:53
order to become mass market there is
00:01:55
still an element of that but it's a huge
00:01:57
party and i think people should just be
00:01:58
more honest that it's super fun
00:02:01
you can really rage for a weekend or for
00:02:03
an entire week
00:02:04
and people should enjoy themselves but
00:02:06
let's not like have to put all these
00:02:08
labels about how like intellectually
00:02:10
superior it is and how you feel like
00:02:11
[ __ ] i don't think it's just people
00:02:13
doing really it's okay it's okay to go
00:02:15
and do drugs the thing that's
00:02:17
interesting about it is it's really
00:02:18
about community a large number of people
00:02:20
get together they build cancer do drugs
00:02:22
no in a community no you've never been
00:02:24
you would
00:02:25
literally that's not the vibe there the
00:02:27
vibe is really dancing and creativity
00:02:29
and art and community but anyway so it's
00:02:31
like a rave it's where everybody is on
00:02:34
drugs
00:02:42
are the best when you're sober best best
00:02:44
you have to understand that they're
00:02:45
going to be going to edc sober i've
00:02:47
never been to edc but this there's a
00:02:49
great filter here which is
00:02:51
you've got to drive six seven hours into
00:02:53
the desert and you have to survive you
00:02:54
have to bring everything with you and
00:02:55
bring everything out you know whatever
00:02:57
it is a bathroom water food and it is
00:03:00
harsh i mean it's a hundred plus degrees
00:03:02
in a day and it's 40 degrees at night
00:03:04
it's not easy to survive it's hard it
00:03:07
used to be that way when i went home
00:03:09
when i went i went with a bunch of guys
00:03:10
who had the whole thing like wired in
00:03:12
and they had like these yurts and it was
00:03:15
like a whole community and they had like
00:03:17
running water and a kitchen and it was
00:03:20
basically glamping it was glamping there
00:03:22
are people how's that hard to survive no
00:03:24
they're i mean it's hard to do there are
00:03:26
people who glam it is hard to do that
00:03:28
because you have to you have to go
00:03:36
yes they spent the whole year whatever
00:03:37
setting it up and it was really
00:03:38
elaborate and then there was an article
00:03:40
like in the new york times basically
00:03:43
saying that you know that they were
00:03:44
ruining burning man
00:03:46
because they were making it too nice
00:03:48
that was part of the problem you
00:03:50
remember this that's when i went i went
00:03:52
to the two nice experiences so they
00:03:53
wrote that about you yeah yeah basically
00:03:55
great you ruined burning man great time
00:03:57
saks thanks for ruining birdie man
00:04:00
[Music]
00:04:12
[Music]
00:04:16
i don't know if you've been following
00:04:17
the nft story we'll cue that up as our
00:04:20
next story uh open c the marketplace the
00:04:23
ebay of nfts if you will the volume has
00:04:25
dropped
00:04:26
99
00:04:27
since they first peak of 406 million
00:04:30
dollars in a single day
00:04:34
on august 28th volume dropped to around
00:04:36
5 million dollars
00:04:38
down 99 according to decentralized app
00:04:41
tracker dap radar
00:04:43
on a monthly basis open seas volume has
00:04:45
dropped ninety percent according to dune
00:04:47
analytics the floor price of a board ape
00:04:49
has now dropped by 53 percent
00:04:52
uh if you remember openc raised 300
00:04:55
million
00:04:57
at a 13.3
00:04:59
billion dollar valuation december
00:05:02
2021
00:05:04
in a round led by kotu in paradigm
00:05:07
to put that in perspective that was nine
00:05:09
whole months ago
00:05:10
my how the world has changed
00:05:12
fredbear what's your take on nfts and
00:05:14
this whole boondoggle i don't know how
00:05:16
to how will we look back on it yeah i
00:05:18
don't know i mean we've had a lot of
00:05:20
bubbles as a species this is just
00:05:22
another one
00:05:24
i thought we're going to stop doing
00:05:25
stock market crashing stories well this
00:05:28
is different this is a different market
00:05:30
what do you think did you invest in any
00:05:31
of these nfc month of this story which
00:05:33
is fill in the blank
00:05:35
asset class crashed yeah this one scene
00:05:39
the question i have here sax is do you
00:05:41
think that this is the end of the
00:05:42
category though do you think that's like
00:05:44
category ending do you think there was
00:05:46
ever anything interesting here because
00:05:47
you took you heard a lot of pitches like
00:05:49
i did for how nfts were going to change
00:05:51
everything you know what i'll i'll say
00:05:53
something because i liken this to the
00:05:55
point um just to tie it back to what we
00:05:57
just talked about
00:05:59
at the end of the day
00:06:02
you know i think i've said this in the
00:06:03
past but like what differentiates humans
00:06:06
from all other species on earth is our
00:06:07
ability to tell to communicate and tell
00:06:10
stories a story is like a narrative
00:06:12
about something that doesn't exist and
00:06:14
by telling that narrative you can create
00:06:15
collective belief in something
00:06:17
and then that collective belief drives
00:06:19
behavioral change and action in the
00:06:21
world right i mean everything from
00:06:23
religion to government to money to art
00:06:26
is all kind of driven all markets are
00:06:28
driven by this notion of narrative and
00:06:31
collective belief that arises from that
00:06:32
narrative so when you go to an art
00:06:34
dealer and you have a sit down with an
00:06:36
art dealer you might appreciate the art
00:06:38
but then the narrative begins and the
00:06:40
narrative is this artist did this and
00:06:42
they came from this and the artist that
00:06:44
looks like this created at 6.8 million
00:06:46
and this artist is only trading for 3.2
00:06:48
million and the whole narrative takes
00:06:49
you away into okay i should pay 3.2
00:06:52
million for this piece of art and
00:06:54
ultimately it'll be worth more and
00:06:56
that's the fundamental premise of
00:06:57
markets is you're buying into something
00:07:00
not necessarily always and this is such
00:07:02
a minority now it's scary used to be
00:07:04
that you own a piece of a business
00:07:06
or a productive asset you pull cash out
00:07:08
of it hopefully you get more cash out
00:07:10
than you put in when you buy it nowadays
00:07:12
markets allow you to trade therefore the
00:07:14
majority of market-based decisions are
00:07:16
driven by if i buy something for x i'm
00:07:19
going to be able to sell it to someone
00:07:20
else for y and so the narrative is
00:07:22
driven around i'm paying this someone
00:07:24
else will pay y down the road i'll make
00:07:26
money from that and this has been
00:07:28
repeated a thousand times over it's been
00:07:30
repeated in the ico tokens it's been
00:07:33
repeated
00:07:34
in the tulip bubble it's been repeated
00:07:36
in every art market and subsidiary of
00:07:38
every art market since the dawn of time
00:07:40
since the dawn of of markets and i think
00:07:42
the nfts are really just one more kind
00:07:44
of example where this beautiful
00:07:46
narrative has formed the the
00:07:48
digitization of art but it is no
00:07:50
different than any other form of assets
00:07:52
that we tell ourselves the story around
00:07:54
and we convince ourselves that i'm
00:07:55
paying something today and someone else
00:07:57
will pay something more for me tomorrow
00:07:58
and i will also say that in the last
00:08:00
year with the liquidity that we saw the
00:08:02
last two years it leached into the stock
00:08:04
market where there's supposed to be more
00:08:06
rational behavior that ultimately the
00:08:08
cash flows of an asset you're buying
00:08:10
should generate more for you than the
00:08:11
money you're spending to buy that that
00:08:13
asset and ultimately you can maybe trade
00:08:15
out of it early but still so much of it
00:08:18
became about well the stock is going up
00:08:20
therefore if i spend x someone else will
00:08:22
spend y and i'll make money on the stock
00:08:24
with no underlying assertion of what's
00:08:26
the productivity of that business what's
00:08:28
the return on cash gonna be based on the
00:08:30
cash flows coming out of that business
00:08:31
over time or any of the fundamentals
00:08:33
around it and so so much of our
00:08:35
discussion and distortion has really
00:08:37
been driven by this narrative fueling
00:08:39
and i think the nfts are an example but
00:08:41
there are many others and we're going to
00:08:43
see many more as long as humans have the
00:08:45
ability to communicate with each other
00:08:46
any do you have any take on it jamal i
00:08:48
think freeberg's mostly right like
00:08:50
i do think that there's this thing the
00:08:52
the burning man coachella example
00:08:55
is the best way to describe this a lot
00:08:57
of these things are the same
00:08:59
but when a few people approach something
00:09:02
early
00:09:04
they're too insecure to admit that it's
00:09:06
the same as something else and so they
00:09:08
spend a lot of time trying to tell you a
00:09:10
narrative about why it's totally
00:09:11
different
00:09:13
the buffett example you know would be
00:09:15
the quote you know whenever somebody
00:09:17
tells you that this time is different
00:09:18
it's probably not that different
00:09:21
or the other quote that's well worn in
00:09:22
history is like you know
00:09:24
things don't necessarily repeat in
00:09:26
history but they rhyme all of this is
00:09:28
trying to say that
00:09:30
other than like fundamental leaps of
00:09:32
science there's not a lot of stuff
00:09:33
that's new in the world you know we are
00:09:36
repeating things over and over and one
00:09:38
of the things we repeat
00:09:40
is the social capital that you get
00:09:42
from having certain choices
00:09:44
and then getting other people to
00:09:45
validate those choices because you want
00:09:47
to feel like you're
00:09:49
you know worthwhile
00:09:52
and this happened in nfts and i'm sure
00:09:54
in the first phase of different
00:09:56
movements in art
00:09:58
that also happened it's probably
00:10:00
happened in a bunch of other markets as
00:10:02
well so
00:10:03
these things are more similar than they
00:10:05
are different
00:10:06
coachella and burning man the same nfts
00:10:10
and part of the art market the same
00:10:12
everybody that runs to you with why it's
00:10:14
so different i would just have a grain
00:10:16
of salt and say you don't need to be
00:10:17
different just enjoy it because you
00:10:18
think it's cool all right we can go
00:10:20
either to this california fast food
00:10:22
wages story or we can go to goldman
00:10:24
sachs workers
00:10:25
are quitting on mass because
00:10:28
goldman sachs is saying you got to come
00:10:29
back to the office five days a week
00:10:30
where do you want to go boys
00:10:32
i think the california thing is really
00:10:33
interesting just the
00:10:35
the three things that california did in
00:10:37
the last week i don't know if you guys
00:10:38
saw but number one is they
00:10:40
basically uh said that you know you have
00:10:42
they're going to ban
00:10:44
ice combustion engines i think by 2035.
00:10:47
so you have to be battery ev
00:10:49
um and then you have the new sales you
00:10:51
can still have sales sorry yeah new
00:10:52
sales
00:10:53
um which is the first in the country to
00:10:55
do it and just to go back to a second
00:10:57
california is the largest auto market in
00:10:59
the united states
00:11:00
and effectively you know trump and
00:11:02
california got into a huge spat because
00:11:04
california had certain emission
00:11:06
standards
00:11:07
that were tougher than the rest of the
00:11:09
united states and you know the federal
00:11:10
government tried to sue california and
00:11:12
back and forth all of this rigmarole so
00:11:14
california's always sort of led on
00:11:16
climate
00:11:17
that was one thing
00:11:18
then the second thing is they said we're
00:11:20
going to create you know a state
00:11:22
sponsored organization
00:11:24
to set the minimum wage rates for fast
00:11:26
food workers pause what we think about
00:11:29
that and then the third thing is that um
00:11:31
this congresswoman i think or this
00:11:33
assembly person buffy wicks
00:11:35
passed the law
00:11:36
um through the senate and through the
00:11:38
the house that essentially holds social
00:11:41
media companies liable for the mental
00:11:44
well-being and the mental health
00:11:46
of kids
00:11:48
um
00:11:49
and depending on where you're lying on
00:11:50
all these issues
00:11:52
it's like an interesting
00:11:54
kind of lens in which where like
00:11:55
california is really becoming
00:11:57
extremely extremely um
00:12:00
legislatively active and basically
00:12:02
imposing their will on free markets in
00:12:04
the economy there yeah and for people
00:12:07
who don't know the fact the fast food
00:12:09
issue was they want to move to a more
00:12:11
european style where instead of unions
00:12:14
debating with individual corporations
00:12:17
mcdonald's burger king whoever what
00:12:19
they're going to pay their employees uh
00:12:21
or employees uh having that discussion
00:12:23
one-on-one
00:12:24
they want the state
00:12:26
some state authority to pick the amount
00:12:29
per hour fast food companies pay
00:12:33
and then i guess disintermediate the
00:12:35
unions uh it's kind of confusing but
00:12:38
interestingly uh of uh our friend uh
00:12:41
lorena gonzalez if you remember she's
00:12:43
the one who told elon to you know f off
00:12:46
um
00:12:47
and was a former uh democratic
00:12:49
legislator
00:12:51
she introduced the bill when she was in
00:12:52
the assembly and so
00:12:54
it's kind of a weird
00:12:56
approach
00:12:57
uh i'm not sure why the government no
00:12:58
it's not about it's not it's not
00:13:00
discriminating the unions she lorena
00:13:02
gonzalez fletcher i guess now she's the
00:13:05
former democratic legislature who drove
00:13:07
elon out of the state remember when she
00:13:09
said sure you know f elon
00:13:11
now she works message received yes and
00:13:13
he left uh great great move for for the
00:13:16
state so she is now running one of the
00:13:18
biggest unions and what
00:13:20
she said is that
00:13:22
this bill will move california closer to
00:13:24
the labor model used in europe where
00:13:27
unions negotiate the unions are still
00:13:29
negotiating for wages and work
00:13:30
conditions but in an entire sector with
00:13:33
some sort of government board rather
00:13:35
than company by company so in other
00:13:37
words it's too slow to unionize
00:13:39
you know company by company they would
00:13:41
just want to unionize entire sectors of
00:13:44
the economy now the thing that's really
00:13:46
crazy about this minimum wage proposal
00:13:49
is that
00:13:50
like you said jason it isn't just that
00:13:53
they set a minimum wage they created a
00:13:56
10 person panel so there's a new
00:13:58
government agency that's going to
00:14:00
regulate fast food the fast food
00:14:02
industry you know they're not going to
00:14:03
stop at minimum wage it's going to be
00:14:05
work conditions so now you're turning
00:14:07
fast food restaurants into a highly
00:14:09
regulated part of the economy and the
00:14:12
weird thing is it's not even just all
00:14:13
fast food it's basically chains
00:14:16
that have more than 100 fast food
00:14:18
restaurants nationally so in other words
00:14:21
if you're a
00:14:22
local operator
00:14:24
of two mcdonald's you'd be subject to
00:14:26
this 10 person board but if you own 20
00:14:30
restaurants that aren't part of a
00:14:32
national chain in california then you're
00:14:34
not and so the weird thing is that some
00:14:37
workers in the fast food industry could
00:14:39
get this new minimum wage of 22
00:14:41
where other or as other workers who work
00:14:44
for you know they're not part of a major
00:14:46
chain would get the statewide minimum
00:14:48
wage at 15. so it's it's um it's kind of
00:14:51
unfair in that some parts of the
00:14:53
restaurant industry are being regulated
00:14:55
and others aren't
00:14:56
is there any justification here that you
00:14:59
can think of to not let the free market
00:15:01
do its thing frudberg
00:15:04
well if you represent the workers you're
00:15:07
saying hey pay him 22
00:15:09
and you can and here's what that points
00:15:11
out
00:15:12
it actually points out that there's
00:15:13
probably a pretty big business flaw in a
00:15:16
business that's so reliant on commodity
00:15:18
labor
00:15:19
and that business in and of itself is
00:15:21
not as valuable as you might have
00:15:22
thought it was before think about it
00:15:24
this way there's a company called
00:15:26
mcdonald's
00:15:27
and then there's another company called
00:15:28
mcdonald's
00:15:30
labor
00:15:32
and what happened before is mcdonald's
00:15:33
employed people to do work at mcdonald's
00:15:37
and maybe what happens in the future is
00:15:38
all those people are looking left and
00:15:40
looking right and they're like you know
00:15:41
what mcdonald's has nothing without us
00:15:44
we are the business we deserve the value
00:15:47
so in terms of how much of the value of
00:15:49
the business flows to the shareholders
00:15:50
of mcdonald's versus the employees that
00:15:53
work at mcdonald's
00:15:54
the employees that work at mcdonald's
00:15:55
are saying let's go do a startup and our
00:15:58
startup is called union and our business
00:16:00
that's called union is now going to
00:16:02
provide a bunch of services to
00:16:03
mcdonald's and those services we're
00:16:05
going to start to value capture what
00:16:07
they're doing and it indicates that
00:16:08
maybe there's something inherently
00:16:11
disadvantaged in that model and it could
00:16:13
be that the argument could be made that
00:16:14
that business in the early 20th century
00:16:17
in the late
00:16:20
19th century yeah the 19th century early
00:16:22
20th century and beyond
00:16:24
that you could build a good advantaged
00:16:26
business because there was such an eager
00:16:28
hungry workforce people looking for work
00:16:30
you people would come and work for
00:16:31
nickel an hour or whatever and so you as
00:16:34
a business owner could make a lot of
00:16:35
money doing that you could sell a
00:16:36
product for a dollar pay people five
00:16:38
cents to make it for you but nowadays
00:16:40
those people are looking left they're
00:16:41
looking right they're like wait a second
00:16:43
we are the business or we're 90 of the
00:16:45
value of this business
00:16:46
and so couple things will happen number
00:16:48
one is the inherent business model of a
00:16:51
company that's so dependent on commodity
00:16:53
service is going to be flawed and
00:16:55
challenged in the 21st century and fast
00:16:57
food restaurants aren't going to be as
00:16:58
valuable businesses that rely on
00:17:00
commodity service are not going to be as
00:17:01
valuable number two businesses are going
00:17:04
to automate so new businesses will
00:17:06
emerge that actually do the fast food
00:17:08
work or do the car building work or do
00:17:10
the dock loading and unloading work that
00:17:12
are automated and they'll have an
00:17:13
inherent advantage in the economy and
00:17:15
they'll win and i think number three is
00:17:17
that in the near term consumers will
00:17:19
suffer because prices will go up because
00:17:21
someone has to pay for the incremental
00:17:23
cost of running this unionized business
00:17:25
and that will ultimately be the customer
00:17:26
of that business i'll say the fourth
00:17:28
point is i am concerned about this sort
00:17:31
of behavior in regulated spaces where
00:17:33
the government has actually control over
00:17:35
the market itself so this a good example
00:17:38
of this is the you know we had um
00:17:40
our friend ryan from flexport on a few
00:17:42
times but you can't just start up a
00:17:45
shipping company and have a dock the
00:17:47
docks are run by the cities and they're
00:17:49
run by the state and so those docks
00:17:51
access to those docks access to that
00:17:52
market is regulated by the government so
00:17:55
then what happens is the union right the
00:17:57
the labor company can actually have
00:17:59
regulatory capture through the
00:18:00
government of a segment of the economy
00:18:03
and that's where things start to get
00:18:04
dangerous so look i'm all for unions if
00:18:06
they want to show that a business is
00:18:08
reliant on a commodity labor force and
00:18:10
commodity service and they all band
00:18:11
together and start a startup i mean
00:18:13
that's what we do we all start a company
00:18:14
yeah and go and compete but the issue is
00:18:17
then when the government creates
00:18:18
regulatory capture over a segment of the
00:18:20
economy and make it difficult for the
00:18:21
free market to ultimately do its job of
00:18:23
either automating or creating a newly
00:18:25
advantaged business model or all those
00:18:27
things that allow us to progress
00:18:29
automating's coming a couple of us made
00:18:31
a bet on a crazy idea of like automated
00:18:34
uh
00:18:35
robotic coffee called cafe x uh not to
00:18:38
talk our own book here and the company
00:18:39
really struggled during the pandemic but
00:18:41
they have two units at sfo jamal they're
00:18:44
doing 73 000 in two units last month and
00:18:48
i'm like wow the the company figured it
00:18:50
out and there's another company doing
00:18:51
french fries this is the this is the sad
00:18:54
thing that california doesn't realize is
00:18:55
like i think that the folks writing
00:18:57
these laws
00:18:58
have just an extremely poor
00:19:00
understanding of economics
00:19:02
and capitalism
00:19:03
because the first thing that it does
00:19:06
effectively and everybody can understand
00:19:08
this is it caps the profitability of a
00:19:12
company
00:19:13
right because it effectively says if you
00:19:15
look at an industry
00:19:17
that is over earning
00:19:19
then this council will essentially see
00:19:21
money that should be reappropriated to
00:19:23
employees now that idea is not
00:19:25
necessarily a bad thing
00:19:28
for example you see that all the time in
00:19:29
technology right if you look at the
00:19:31
ebitda margins of like big tech
00:19:34
and how they've changed they've actually
00:19:36
eroded over time as the companies have
00:19:38
had to generate more revenue because
00:19:40
employees demand more and more
00:19:42
of those gains that's an implicit part
00:19:44
of how the free market economy
00:19:46
works in technology so you know if you
00:19:48
don't feel like you're getting paid well
00:19:50
at you know google you go to meta and
00:19:52
you get paid more and vice versa
00:19:54
so there's a natural effect of people
00:19:57
being able to do that in certain markets
00:19:59
but when you impose a margin and
00:20:01
essentially say you can only make 10
00:20:03
because the rest of these profits i'm
00:20:04
giving to these folks because i've
00:20:05
imputed
00:20:06
their new wage to be something that's
00:20:08
much greater than what they were paying
00:20:10
before
00:20:10
the unfortunate thing is what freebrook
00:20:12
said which is that you will rebuild that
00:20:15
business without those people
00:20:17
because it is the rational
00:20:19
thing to do
00:20:20
and so unfortunately what you'll do is
00:20:22
you'll take a bunch of people that
00:20:23
should be in the economy right think
00:20:25
about like new immigrants or young
00:20:27
people that are first getting on their
00:20:29
feet they'll take these jobs you know i
00:20:31
mean
00:20:33
i worked at burger king when i was
00:20:34
fourteen that's how i got somebody first
00:20:37
you you those jobs won't be there to be
00:20:39
had and that has
00:20:41
ripple effects as these folks get older
00:20:43
or try to get more ingrained in the
00:20:44
economy and this is what i wish
00:20:46
california would understand is that
00:20:49
these things aren't free and even though
00:20:51
they seem like you're coming to
00:20:53
someone's rescue
00:20:55
there's all kinds of unintended
00:20:56
consequences and very obvious
00:20:59
consequences that you're ignoring
00:21:01
by not really understanding how the
00:21:03
economy works i'll just say like look
00:21:04
these people can i'll start a sec but i
00:21:07
mean you know the people that are
00:21:08
elected
00:21:09
are elected by the people to represent
00:21:12
the people they're not elected to govern
00:21:14
over the long term plan necessarily for
00:21:17
the state and while you think that those
00:21:19
two may be the same
00:21:20
the near-term incentive and the
00:21:22
near-term motivation
00:21:23
of someone who's voting is i want to get
00:21:26
a benefit for myself sooner rather than
00:21:29
later not necessarily i want to make an
00:21:31
investment for 30 or 40 years down the
00:21:33
road and if you're an individual that's
00:21:35
struggling in some way you're going to
00:21:37
prioritize the former over the latter
00:21:39
and you're going to elect someone who's
00:21:41
going to go put in place public policy
00:21:43
that's going to benefit you so i don't
00:21:45
necessarily raise my hand and say i
00:21:46
blame the people that have been elected
00:21:49
i raise my hand and i say look this is
00:21:51
the natural evolution of what happens in
00:21:53
a democracy where there is a struggling
00:21:55
class and there were where there is some
00:21:57
sort of view disparity or considered
00:21:59
disparity that this is what's going to
00:22:01
happen in a democracy under this
00:22:03
condition is that you're going to elect
00:22:04
individuals who are going to go and
00:22:06
govern and they're going to make
00:22:07
decisions they're going to benefit those
00:22:09
individuals that got them elected over
00:22:10
the short term and there may be some
00:22:12
real long-term damage that results
00:22:14
saks is a part of this problem is that
00:22:16
uh
00:22:17
people are now looking to the government
00:22:19
to solve their problems in life versus
00:22:21
maybe looking internally to solve their
00:22:23
problems and you know negotiate better
00:22:26
salaries and hold on i think you have to
00:22:28
give people a little bit more credit
00:22:29
nobody was asking for them to step in
00:22:31
like this look this is as much for the
00:22:33
politicians as it is for any of the
00:22:35
workers um what's happening right now
00:22:37
the national restaurant association and
00:22:39
all these restaurant lobbying groups are
00:22:40
flooding the state the legislators the
00:22:43
governor with lobbying money because
00:22:45
they want to get this bill modified
00:22:47
tempered or thrown out
00:22:49
and so this is basically a racket like
00:22:52
look as a public policy matter it makes
00:22:54
zero sense
00:22:55
for
00:22:56
the same worker if they go work at say
00:22:59
jiffy lube or something outside the
00:23:01
wrestling industry they get the
00:23:02
california minimum wage of 15
00:23:04
if they go to a mom-and-pop restaurant
00:23:06
they get the minimum wage of fifteen
00:23:07
dollars but if they go to mcdonald's
00:23:09
they now get a new minimum wage
00:23:11
specifically for chain restaurants of
00:23:12
twenty two dollars that simply makes no
00:23:15
sense
00:23:16
there's no public policy rationale but
00:23:18
the real question you have to ask and
00:23:19
trump is kind of getting at this is why
00:23:21
shouldn't it be fifty dollars why
00:23:22
shouldn't it be a hundred dollars well
00:23:23
the reason is because if you raise the
00:23:25
minimum wage too much then these um
00:23:28
employers have a huge incentive to
00:23:31
replace that labor with automation and
00:23:33
so the unintended consequence that your
00:23:35
mouth is talking about is that these big
00:23:37
chain restaurants are gonna rely even
00:23:40
more heavily on automation now and
00:23:42
they're gonna basically employ less of
00:23:44
this labor where the price has been
00:23:46
artificially erased for that sub-sector
00:23:48
of the economy from 15 to 22 for reasons
00:23:51
that no one can really explain so again
00:23:53
this is not for the benefit of workers
00:23:55
it's for the benefit of the politicians
00:23:56
look what's happening right now
00:23:58
there's all these articles talking about
00:24:00
the lobbyists coming in they're going to
00:24:02
nav gavin newsom begging him to be their
00:24:04
savior right now and this is the game
00:24:06
that the california democratic party
00:24:08
plays it's a one-party state where they
00:24:11
where basically business loves gavin
00:24:12
newsom because he's their protector he's
00:24:14
a protection end of the extortion racket
00:24:16
lorena gonzalez gets this bill passed
00:24:18
which is basically incredibly damaging
00:24:22
to these chain restaurants and they have
00:24:23
to go running to gavin newsom and beg
00:24:25
him to either veto it or modify it
00:24:28
temper the bill so it's not as
00:24:29
destructive to their business he's a
00:24:31
protection in the extortion racket but
00:24:33
it's the same racket this is a one-party
00:24:35
state and what they're doing with chain
00:24:37
restaurants they would do with every
00:24:38
sector of the economy if they could it's
00:24:40
just a matter of time
00:24:42
and what is the purpose of the
00:24:43
california government like are there
00:24:45
things they could be focusing on other
00:24:47
than this like maybe the free market
00:24:48
settles this issue and they can extract
00:24:50
benefits from the private sector from
00:24:53
basically the wealth producing part of
00:24:55
the economy and to line their pockets in
00:24:57
the pockets of their supporters you know
00:24:59
that the typical government worker in
00:25:01
california makes 53 percent more than
00:25:04
their private sector or counterpart and
00:25:06
if you factor in all the pensions that
00:25:08
have been promised it's a hundred
00:25:09
percent more okay so basically there's a
00:25:12
huge wealth transfer that's taking place
00:25:15
where the where basically the
00:25:17
legislatures the party they are
00:25:20
transferring wealth from the private
00:25:21
sector to their supporters their backers
00:25:24
and friedrich you talk about democracy
00:25:26
listen i mean
00:25:27
california is a one-party state and
00:25:29
ballot harvesting is legal here i'm not
00:25:31
saying the votes are fake or anything
00:25:32
like that but there's a giant party
00:25:34
machinery and apparatus that literally
00:25:36
just goes door-to-door and collects the
00:25:39
ballots from their supporters they
00:25:41
literally know who their supporters are
00:25:43
on a door-by-door household by household
00:25:45
level it has gotten to the point now
00:25:47
where the party machine is so powerful
00:25:51
they can pretty much run anybody for any
00:25:53
post and get them elected it's very hard
00:25:56
for an outsider candidate
00:25:58
it does feel like people are getting
00:26:00
tired of it no but guys that's exactly
00:26:02
how it works i mean like if you look at
00:26:04
gavin newsom's run to the governorship
00:26:07
um he paid his dues he did the right
00:26:09
jobs he waited in line he didn't you
00:26:11
know rock the boat independent of any of
00:26:14
the things he did right or wrong and he
00:26:16
had some pretty big moral transgressions
00:26:18
it didn't matter because it is about
00:26:20
paying your dues and waiting in line
00:26:22
because there aren't any meaningful
00:26:24
challenges here none i'll tell you so in
00:26:27
l.a
00:26:28
l.a in l.a right now there's a mayoral
00:26:30
race going on and the two there's a
00:26:32
runoff between rick caruso and and karen
00:26:34
bass
00:26:35
it karen bass is basically a product of
00:26:37
the political machine she's basically
00:26:39
worked her way up in the democratic
00:26:40
party forever sort of uninspiring
00:26:42
candidate she's just basically a puppet
00:26:44
of the machine
00:26:45
caruso is actually he's a real estate
00:26:48
developer who's built some of the
00:26:49
most landmark
00:26:51
you know spots in la like the grove like
00:26:54
the pacific palisades development he's
00:26:56
made incredible
00:26:58
he's created incredible amenities for
00:27:01
the la area he's also been on a bunch of
00:27:03
civic boards um you know i had lunch
00:27:06
with him at the grove and people were
00:27:07
coming up to him he's like a celebrity
00:27:09
they were taking photos with him he's
00:27:10
the best possible candidate
00:27:13
that you could have in a place like la
00:27:15
he actually understands business i think
00:27:17
he would restore law and order i mean
00:27:19
all this kind of stuff right he's spoken
00:27:21
out about the homeless problem being out
00:27:22
of control
00:27:24
and on election night he had the most
00:27:26
votes but five days later when they
00:27:28
counted all the
00:27:29
the basically the collected ballots
00:27:31
through ballot harvesting karen bass was
00:27:33
up by like five points that is the power
00:27:35
of the ballot harvesting and i still
00:27:38
hope that he wins but the party machine
00:27:41
is so powerful they can basically get
00:27:43
almost anyone elected in the state can't
00:27:45
the battle
00:27:48
what's that just devil's advocate here
00:27:50
the the ballot harvesting can work both
00:27:51
ways like you could go collect
00:27:53
republican votes
00:27:54
no but you have to have the party
00:27:55
infrastructure to literally go back okay
00:27:58
so the republican hasn't the republicans
00:27:59
haven't done that
00:28:01
think about it this way okay so
00:28:03
you know like your phone there's a
00:28:05
platform and there's an app think about
00:28:07
the party as the platform and the
00:28:09
candidate as the app okay the platform
00:28:12
can drive a ton of traffic to whatever
00:28:13
app they want a guy like caruso doesn't
00:28:16
have the party behind him so he has to
00:28:18
build his own operating system
00:28:21
exactly so he has to build his own
00:28:23
platform then he has to build his own
00:28:24
candidacy so when you think about the
00:28:26
amount of money that's required to do
00:28:28
something like that about how hard it is
00:28:29
to do it
00:28:30
it's it's very very hard so he spent
00:28:33
something like 100 million of his own
00:28:35
money hopefully he wins but if he
00:28:37
doesn't all the infrastructure all the
00:28:39
platform that he created just goes away
00:28:42
and then the next candidate has to start
00:28:43
from scratch this is why outsiders is
00:28:46
almost impossible why isn't the gop
00:28:47
invested in california they just don't
00:28:49
think they have any shot because it
00:28:50
seems like the the democrats are
00:28:51
investing heavily in trying to flip you
00:28:53
know um look there's a two to one party
00:28:55
affiliation there's a two to one party
00:28:57
affiliation in california towards
00:28:59
democrats so look i mean the republican
00:29:01
party here is a mess and that's part of
00:29:03
the problem is the republican party in
00:29:05
california needs to move to the center
00:29:07
it's a plus 30 blue state unless they're
00:29:09
willing to do that they're not going to
00:29:10
make progress but that could take you
00:29:13
know generations to fix and with roe v
00:29:15
wade and that kind of stuff it's going
00:29:16
to be really hard to look there are
00:29:18
pro-choice republicans in california but
00:29:21
all newsom has to do is point to what's
00:29:24
happening in texas and
00:29:27
you know all of a sudden people kind of
00:29:28
revert to their tribal political
00:29:30
affiliations i'll make i'll make one
00:29:32
more simple point the average voter in
00:29:34
california probably knows more people
00:29:36
that work at mcdonald's than our
00:29:38
shareholders of mcdonald's
00:29:40
and i think in any time that there's
00:29:42
policy that gets voted or gets suggested
00:29:45
or ultimately gets passed there's a side
00:29:48
that benefits and there's a side that
00:29:49
doesn't and if you know more people that
00:29:52
benefit on one side than are hurt you're
00:29:54
probably going to be supportive of that
00:29:55
policy and i think that's probably a
00:29:57
pretty simple rubric for thinking about
00:29:59
how these things over time evolve
00:30:02
that's true nationally why is that only
00:30:04
true for california
00:30:06
i mean like in florida yeah
00:30:08
first person in florida knows more
00:30:10
people who work at mcdonald's than
00:30:12
shareholders mcdonald's and they're not
00:30:14
engaged in a systematic takeover of the
00:30:17
private sector philosophically they're
00:30:19
they believe in independence and
00:30:21
businesses not being interfered by the
00:30:23
government right that's a core tenant of
00:30:24
the republican party also the sad
00:30:26
reality is that within a few years
00:30:30
unfortunately you'll know a lot fewer
00:30:31
people that work at mcdonald's because
00:30:33
the number of jobs for humans will be
00:30:35
dramatically lower they got rid of the
00:30:37
cashiers that's gone already or what
00:30:39
people will be more acutely aware of in
00:30:41
a number of years is how expensive
00:30:42
mcdonald's has gotten
00:30:44
because if the price doesn't know that
00:30:45
that won't be because like again
00:30:47
mcdonald's has a very simple no not not
00:30:49
even the market mcdonald's is not stupid
00:30:51
they understand how to use excel and so
00:30:53
they'll think well i can amortize a
00:30:54
robot
00:30:56
versus actually jacking up um
00:30:59
prices because what mcdonald's
00:31:00
understands is the sensitivity of
00:31:02
pricing to demand for their product yeah
00:31:04
that's right right i mean they are the
00:31:06
most intelligent about how they price
00:31:08
every anything at the sort of the lower
00:31:10
end where you're capturing you know
00:31:12
nickels and dimes they are the most
00:31:14
sophisticated and understanding supply
00:31:16
demand and and and the curves and so to
00:31:19
think that they're not going to just
00:31:21
invest heavily now at the corporate
00:31:22
level the next franchisee of mcdonald's
00:31:25
will still pay a million dollars for
00:31:26
franchise fee but will give will be
00:31:28
given a bevy of robots that they rent
00:31:29
for mcdonald's and they'll have to hire
00:31:31
half or a third less
00:31:33
that's that's the real shame of this
00:31:35
which is the number of people that
00:31:36
should actually be gainfully employed in
00:31:38
the economy will then shrink again but
00:31:40
in this case
00:31:42
it was because legislators just
00:31:44
completely don't understand
00:31:46
how incentives work and how the economy
00:31:48
works and people are not clued into
00:31:51
exactly how well narrow ai machine
00:31:54
learning is doing right now by the way
00:31:55
i'll say like
00:31:56
it's really moving quickly one general
00:31:59
way to think about this is is technology
00:32:01
is introduced and the technology creator
00:32:03
captures roughly a third to a half of
00:32:06
the value increment because of the
00:32:07
delivery of that technology the
00:32:09
productivity increment
00:32:10
so let's say that it costs 12 15 an hour
00:32:13
to employ a mcdonald's labor today
00:32:16
and let's say that you can build
00:32:17
technology that the amortized robotic
00:32:19
cost is ten dollars an hour there will
00:32:21
be a technology company that will make
00:32:23
250 an hour off of that so net net what
00:32:25
ends up happening is productivity has to
00:32:28
be gained and prices will reduce and so
00:32:31
you know there are moments like this
00:32:32
where there could be an acceleration of
00:32:34
technology and also an opportunity for
00:32:36
new industries to emerge and when that
00:32:38
happens new jobs emerge too
00:32:40
so it's you know maybe look i mean at
00:32:42
the end of the day it seems luddite-ish
00:32:44
but
00:32:45
you know there's going to be a mark a
00:32:46
market opportunity that will arise i
00:32:48
think we need to like just step back and
00:32:50
and ask what is the type of economy that
00:32:53
california is creating here with this
00:32:55
fast food law with these other laws
00:32:56
we're talking about
00:32:57
this is a state in which you have a
00:33:00
disappearing middle class the middle
00:33:02
class has been moving out of the state
00:33:04
by the hundreds of thousands in fact
00:33:06
last year we had for the first time net
00:33:08
migration out of the state this has
00:33:11
basically become a state where the only
00:33:12
middle class are basically the
00:33:14
government workers who like we talked
00:33:16
about are making twice as much as their
00:33:18
private sector counterparts it's a state
00:33:20
where you have the very rich and very
00:33:21
poor and the only middle class are
00:33:23
government workers that is what we're
00:33:24
creating the rich in the state have done
00:33:26
really well over the last few decades
00:33:29
why because of globalization so you take
00:33:31
the two big industries in the state tech
00:33:33
and
00:33:34
hollywood entertainment they have
00:33:36
benefited enormously through
00:33:37
globalization because now you can sell
00:33:39
software or you can sell movies or music
00:33:42
exactly so now these these industries
00:33:44
have become
00:33:45
you know massive global exports and so
00:33:48
if you're in those industries in
00:33:50
california you've done really well
00:33:52
because now
00:33:54
your market is the whole world
00:33:56
so the super rich have done really well
00:33:58
that's funded the state that's allowed
00:34:00
the state it's almost like a resource
00:34:02
course to have all these bad policies
00:34:05
that really hurt small business owners
00:34:07
they've been moving out of the state and
00:34:09
so again you've got the very rich and
00:34:10
very poor this is not an economic model
00:34:12
for the entire nation this is what you
00:34:14
know gavin newsom says he wants to take
00:34:16
to all of america this is not a model
00:34:18
for all of america in order for
00:34:21
democracy to function we need a thriving
00:34:22
middle class and this is not a recipe
00:34:25
for delivering
00:34:26
a thriving middle class to america and
00:34:29
the i just want to show you guys a quick
00:34:30
video um we'll just play for five
00:34:32
seconds here we had invested in this
00:34:35
company and got sold i'm not going to
00:34:37
say the name of it but
00:34:38
if you watch this quick robot
00:34:41
this is a computer vision company out of
00:34:43
boston and like they're doing high-speed
00:34:46
picking
00:34:47
of tomatoes and berries like this is a
00:34:50
two-year-old video when we invested and
00:34:51
wound up getting bought by another
00:34:52
company and they're doing vertical
00:34:54
farming but
00:34:56
and
00:34:57
there's companies doing this now for
00:34:58
french fries it's over like we are
00:35:00
within you know i think five ten years
00:35:03
of a lot of these jobs and we're talking
00:35:05
tens of millions of manual labor jobs
00:35:08
being gone and and we're going to look
00:35:09
at this moment in time where we try to
00:35:12
squeeze an extra 10 or 20 percent out of
00:35:15
these you know uh
00:35:17
employers
00:35:18
and then you're going to see these
00:35:19
employers say you know what 24-hour day
00:35:21
robot
00:35:22
yeah it's a little bit upfront cost i'll
00:35:24
put it on a lease and they're just going
00:35:26
to move to these robots it's it's really
00:35:28
very close to being game over for manual
00:35:30
labor
00:35:31
and you can see it also with cyber truck
00:35:33
and you know what elon's doing with ai
00:35:35
and these things are getting so close
00:35:38
and it's been i don't know when did you
00:35:40
invest in your first
00:35:42
robotics or ai company saks or chama do
00:35:44
you remember the first robotic or ai
00:35:46
company you invested in and how long ago
00:35:48
was
00:35:49
2014
00:35:51
[Music]
00:35:53
it's a company called relativity space
00:35:55
which is 3d printing rockets and engines
00:35:59
and basically they're able to use
00:36:01
machines to learn
00:36:02
how to actually fix the morphology of
00:36:04
all the materials that they use to print
00:36:06
better and cheaper and more useful
00:36:08
rocketry that's an example but then that
00:36:10
led me down the garden path i was just
00:36:13
going to say something more generic
00:36:15
instead of talking her book which is
00:36:18
i think people misunderstand
00:36:21
that moore's law
00:36:24
has actually not ended
00:36:27
um and this is something that
00:36:30
a friend of mine adam deangelo
00:36:32
characterized to me
00:36:34
a beautiful human being from work
00:36:36
together he well he was a cto facebook
00:36:38
when i worked there so we this is you
00:36:39
know we we've known each other for 15 16
00:36:41
years and now he's a ceo and founder of
00:36:43
quora
00:36:44
but you know the the way that he
00:36:46
described it to me which is so true the
00:36:48
minute he said it i was like my gosh
00:36:49
it's like moore's law never ended it
00:36:51
just shifted to gpus
00:36:53
you know because the inherent lack of
00:36:54
parallelization that cpus
00:36:56
have you solve the gpus and so that's
00:37:00
why
00:37:01
the the surface area of compute
00:37:03
of innovation has actually shifted json
00:37:05
to what you're saying which is you know
00:37:07
all of these new kinds of machine
00:37:09
learned models because you can just now
00:37:12
brute force and create such a tonnage of
00:37:14
compute capabilities and resources
00:37:16
to solve these problems that weren't
00:37:18
possible before so
00:37:20
you know you see this thing you know fun
00:37:22
things like wall-e or you know dally
00:37:24
sorry
00:37:26
and more sophisticated things like gpt3
00:37:29
but he's right which is that you know we
00:37:31
are at a point now where all kinds of
00:37:34
expert systems which is sort of like v1
00:37:36
simple forms of ai
00:37:37
are going to be completely next level
00:37:39
well you think about the data sets
00:37:41
adding to that and so when gov exactly
00:37:43
and so when governments don't understand
00:37:45
this and they try to it you know step in
00:37:48
they're going to be shocked at how much
00:37:50
faster they're pulling forward the
00:37:51
actual future they actually are trying
00:37:52
to prevent
00:37:53
yeah the the data sets is the other
00:37:55
issue fredberg you look at you know the
00:37:58
the data sets that are available to
00:37:59
train so you have the gpus still
00:38:04
escalating massively the amount of
00:38:05
compute power can do you have cloud
00:38:06
computing at the same time and then you
00:38:07
have these data sets one of the most
00:38:09
interesting things about you know dolly
00:38:11
and a lot of these is the corpus of data
00:38:13
they're able to absorb and a second
00:38:16
factor issue that is starting to come up
00:38:18
is who owns the derivative work
00:38:20
in copyright so if you train your data
00:38:22
set
00:38:23
on a bunch of images and those images
00:38:25
are owned by disney or whoever you know
00:38:27
photographer getty and then the ai makes
00:38:30
you a new photo so here's another here's
00:38:33
another example of this here's another
00:38:35
here's another example of this in a law
00:38:36
that just passed so in the ira
00:38:38
uh the inflation reduction act you know
00:38:40
we granted
00:38:42
cms and medicare the ability to
00:38:44
negotiate drug prices and we actually
00:38:46
also capped
00:38:48
um the total prescription costs that any
00:38:51
american can pay at two thousand dollars
00:38:53
now it turns out that
00:38:55
overwhelmingly most americans
00:38:57
will never spend two thousand dollars a
00:38:59
year on prescription medications but
00:39:01
there will be a few and they bump up
00:39:03
against drugs that cost billions of
00:39:05
dollars so there was a you know there's
00:39:07
a drug for you know uh sma um that's
00:39:10
like you know 2.4 million and like you
00:39:13
know beta thalassemia like 2.8 million
00:39:17
and you're and and we will all bear the
00:39:19
cost of that now
00:39:21
if cms and medicare
00:39:23
go and really crunch those costs what is
00:39:27
pharma going to do well pharma is going
00:39:29
to do
00:39:30
what is the obvious thing which is like
00:39:33
if you're going to cap what i can make i
00:39:35
have to completely change my r d model
00:39:38
and they're just going to use alpha fold
00:39:40
you know and what it's really going to
00:39:41
do is potentially put a bunch of
00:39:43
research scientists
00:39:45
out of work and those are folks that
00:39:47
should probably in the you know for our
00:39:49
general future be gainfully employed but
00:39:52
the nature of their job is going to
00:39:53
change completely because the economic
00:39:55
capitalist incentive of big pharma is
00:39:58
going to move towards technology which
00:39:59
is you know an alpha fold
00:40:01
and their protein library is the
00:40:03
equivalent of ai and automation for
00:40:05
mcdonald's so
00:40:07
this is where again governments have to
00:40:09
be super careful that they understand
00:40:10
what's actually happening because
00:40:11
they're creating incentives i think that
00:40:13
they don't completely understand
00:40:15
all right we can go to raw meet for sax
00:40:18
zuckerberg's uh admission of fbi
00:40:20
meddling
00:40:21
truth social uh well you guys disputed
00:40:24
me and like how dare you imply that j
00:40:27
edgar hoover and jim comey's fbi is
00:40:29
politicized
00:40:31
remember you guys were debating against
00:40:33
that was about the investigation
00:40:35
you didn't but some of you were saying i
00:40:37
can't believe saksa you're part of the
00:40:38
35 of americans who don't believe fully
00:40:42
in the rectitude and integrity of the
00:40:44
fbi
00:40:46
i don't know if this is fbi oh man comes
00:40:48
this bombshell
00:40:50
i mean you gotta admit this was a
00:40:51
bombshell what was the bombshell okay so
00:40:53
i'll okay okay so joe uh joe rogan had
00:40:56
zuck on and he asked him about
00:40:58
this very specific thing remember the
00:41:00
new york post story on hunter biden's
00:41:02
laptop in like the week or two before
00:41:04
the election was censored right and it
00:41:06
was a very controversial thing because
00:41:08
the fbi was dealing with known
00:41:11
uh russian interference and hacks and
00:41:13
all this stuff uh part of which trump
00:41:15
was like asking people to hack other
00:41:17
candidates okay you're not even setting
00:41:19
this up correctly well okay i'm gonna
00:41:20
keep going and then so this is what
00:41:22
zuckerberg said hey look let's see let's
00:41:24
moderate this segment well i mean i'm
00:41:26
just gonna read the federalist which is
00:41:28
you know right wing but he says i'll
00:41:30
just read you what zuck said because
00:41:31
that's says it all he says hey look if
00:41:34
the fbi which i still view as a
00:41:36
legitimate institution in this country
00:41:37
i'm quoting from the federalists which
00:41:39
is quoting him from joe rogan um it's a
00:41:41
very professional law enforcement they
00:41:42
come to us and tell us we need to be on
00:41:44
guard about something i want to take it
00:41:46
seriously so uh when the new york post
00:41:48
broke the hunter by the laptop story on
00:41:50
october 14th 2020 facebook treated the
00:41:52
story as potentially misinformation
00:41:54
important misinformation for five to
00:41:56
seven days while the tech giants team
00:41:58
could determine whether it was false or
00:42:00
not during that time uh this is federal
00:42:02
speaking decreased its
00:42:05
facebook decreased distribution of the
00:42:06
story by making the story rank lower in
00:42:09
the news feed
00:42:11
and this is his quote zuckerberg's you
00:42:13
could still share it you could still
00:42:15
consume it zuckerberg explained but
00:42:17
quote fewer people saw it than would
00:42:19
have otherwise
00:42:22
and while he would not quantify the
00:42:24
impact the facebook founder said the
00:42:26
decreased distribution was quote unquote
00:42:28
meaningful in a follow-up rogan asked if
00:42:31
the fbi had specifically said
00:42:34
quote to be on guard about that story
00:42:36
meaning the laptop story after
00:42:37
originally responding no zuckerberg
00:42:39
corrective says i don't remember if it
00:42:41
was that specifically but it was
00:42:42
basically the pattern so basically
00:42:44
i guess you would agree sax zuck didn't
00:42:46
know exactly what to do here with this
00:42:48
information
00:42:49
um and if it was real or not which you
00:42:51
know it turned out to be very real and
00:42:54
it probably could have swayed the
00:42:55
election i mean i do think if
00:42:57
people thought there was a connection
00:43:00
between
00:43:01
hunter bind maybe it could have i don't
00:43:03
know if we want people being hacked to
00:43:05
do that so what's your take on it sexy
00:43:07
you know just hacking in general and
00:43:08
this specific thing what should the fbi
00:43:10
do
00:43:10
if these kind of hacks are getting
00:43:12
released of people's families
00:43:14
okay so yeah here's the complicated
00:43:16
issue right there's many vectors yeah
00:43:18
what zuck basically says the fbi came to
00:43:20
to them and encouraged them to suppress
00:43:22
this story or to suppress a story that
00:43:25
they described that would be just like
00:43:27
this okay
00:43:28
so now look a lot of conservatives are
00:43:30
dragging zuckerberg and facebook for
00:43:32
doing for doing the fbi's bidding but i
00:43:35
think a lot of people
00:43:36
i think most people in zuckerberg's
00:43:37
position would have believed the fbi
00:43:39
when the fbi comes to you and says
00:43:41
you're about to be targeted by russian's
00:43:43
information you need to do something
00:43:44
about it you would have listened to the
00:43:46
fbi he believed the fbi
00:43:49
my point and so i don't blame facebook
00:43:51
too much for that i think it's
00:43:52
understandable that he would have
00:43:53
believed them the issue here is the
00:43:55
politicization of the fbi look let's
00:43:57
back up what was happening so the new
00:43:59
york post gets this story about the leak
00:44:02
contents of hunter biden's hard drive in
00:44:04
response to that
00:44:06
you had 50 former security state
00:44:09
officials
00:44:10
many of whom were democratic partisans
00:44:13
like clapper like brennan they signed a
00:44:16
letter saying that this story has all
00:44:19
the hallmarks of russian disinformation
00:44:21
now the truth is they had not inspected
00:44:24
the hard drive they simply said this is
00:44:26
the hallmarks of it and as a result of
00:44:28
that
00:44:29
we thought that the social networks and
00:44:31
so forth censored the story okay
00:44:34
now it turns out that the fbi by the way
00:44:36
the fbi had the hard drive they had the
00:44:38
hard drive for over a year it was an
00:44:40
image of the hard drive or the actual
00:44:41
hard drive they had the actual hard
00:44:43
drive the leak of the story was
00:44:46
was likely prompted because the fbi
00:44:48
didn't appear to be doing anything with
00:44:50
the hard drive so somebody leaked the
00:44:52
story
00:44:53
to
00:44:54
you know to rudy giuliani and then he
00:44:56
leaked and so forth the new york post
00:44:57
but the point is that the fbi had the
00:44:59
hard drive so they knew it was authentic
00:45:02
okay so they knew that this hallmarks of
00:45:04
russian information was not the truth
00:45:07
because again they had the authenticated
00:45:09
hard drive in their possession and yet
00:45:11
they still went to zuckerberg and
00:45:13
basically played into this narrative
00:45:15
this phony narrative
00:45:17
that you know democratic partisans like
00:45:19
clapper and like brennan had created was
00:45:22
there anything meaningful by the way
00:45:23
about what was on the laptop in your
00:45:25
mind like do you think it's relevant do
00:45:27
you think we want people's laptops being
00:45:29
hacked like this who are in people's
00:45:30
political families
00:45:32
yeah i don't think the laptop was hacked
00:45:34
i mean there's a weird convoluted story
00:45:37
about how the laptop ended up but but
00:45:39
look the the point of people's personal
00:45:41
pictures you know and stuff like that be
00:45:43
released i never liked the part
00:45:45
where they were showing
00:45:47
uh hunter biden's you know drug use and
00:45:49
the other personal stuff i thought that
00:45:51
was scarce
00:45:52
and i didn't i didn't like it and i
00:45:54
didn't think that was uh particularly
00:45:56
germaine so i think and i think it was
00:45:58
an invasion of his privacy however there
00:46:00
were materials on there related to his
00:46:02
business dealings in ukraine and i don't
00:46:04
say see how you can say those weren't
00:46:06
relevant oh i think they're trying to
00:46:07
relational he's being investigated for
00:46:09
them too now i mean a lot of this has to
00:46:11
do with timing too you know it's like
00:46:13
how do you deal with something like this
00:46:14
seven days before an election when you
00:46:16
know the russians are hacking it if it
00:46:18
has been or not it's a really difficult
00:46:19
situation for everybody i think so so
00:46:21
look my point my point is this that um i
00:46:23
i can agree with you about the personal
00:46:25
stuff about hunter buy and shouldn't
00:46:26
come out but but with respect to the
00:46:28
ukraine stuff that was legitimate it was
00:46:30
fair game and the in most importantly i
00:46:33
don't know whether it would have sworn
00:46:34
the election not probably not probably
00:46:36
by itself it's not but the real point
00:46:37
here is that the fbi went to facebook to
00:46:41
censor a story that they must have known
00:46:43
was true because they had the laptop in
00:46:46
their possession they should not be
00:46:48
intervening in elections that way that
00:46:50
is the bombshell here that's
00:46:51
unbelievable i i think they didn't know
00:46:54
the providence of this but i guess we'll
00:46:55
find out
00:46:56
where are you landing in the providence
00:46:57
of a hard drive that's in their
00:46:58
possession
00:46:59
i didn't have an nft
00:47:01
exactly um where do you how are you uh i
00:47:04
think you always start culture exactly
00:47:06
that's exactly audience wants to know
00:47:07
saks audience really wants to know where
00:47:10
you were going to reserve judgment on
00:47:11
the mar-a-lago search where do you and
00:47:14
or
00:47:15
republicans come out on all this now
00:47:17
when you see
00:47:18
[ __ ] he did in fact have a ton of
00:47:20
really sensitive stuff like it'll define
00:47:22
a ton and of defined terms of really
00:47:25
sensitive stuff yeah i mean listen
00:47:27
like what's your what do you have 300
00:47:29
pages of documents mark classified
00:47:31
if you were to go to the 30 000 boxes of
00:47:34
documents that obama took are you
00:47:36
telling me you really couldn't find 300
00:47:38
pages that have classified markings on
00:47:40
them well the fact that he wouldn't give
00:47:40
it back
00:47:42
by the way i never disputed it hold on a
00:47:43
second i never disputed
00:47:45
that they would find documents with
00:47:47
classified markings in trump's basement
00:47:49
i still think that the approach was
00:47:50
heavy-handed and we don't know enough
00:47:53
because we don't know what those
00:47:54
documents are yeah
00:47:55
every document they stick in front of
00:47:57
the president or not every but many of
00:47:59
them are more classified but okay so let
00:48:01
me ask you this aside from these like
00:48:02
kind of details what is what is trump's
00:48:05
deal that he just wouldn't give them
00:48:06
back do you think what do you think his
00:48:07
motivation was i mean i have my own
00:48:09
theory which he likes memorabilia he's
00:48:11
always liked to show off i think that's
00:48:12
it i think you got it i mean honestly if
00:48:14
i had to guess what this whole thing was
00:48:15
about it's probably that the archivist
00:48:18
at the national archives wants the
00:48:20
original copy of those letters with
00:48:21
little rocket man and he doesn't want to
00:48:23
give him up right yeah i really think
00:48:26
that's what this is about i think it's
00:48:27
about something as silly as memorable
00:48:29
memorabilia i think it's about
00:48:30
memorabilia i do not think these
00:48:32
documents pose a threat trump just give
00:48:34
it all back it's so dumb
00:48:36
but why would the fbi feel the need to
00:48:38
do a race by the way
00:48:39
remember when we first discussed this
00:48:40
one second when we first discussed this
00:48:42
issue we were told it was nuclear it was
00:48:45
nuclear secrets could be yeah no they've
00:48:48
backed off that completely it was not in
00:48:50
the affidavit it's not about nuclear
00:48:52
that was something they leaked to get
00:48:53
them through a tough press cycle so but
00:48:55
look my point about all this stuff just
00:48:57
to wrap it up so people are clear was
00:48:59
never to defend trump per se my real
00:49:01
concern is the politicization of the fbi
00:49:03
our law enforcement agencies should not
00:49:05
be weaponized
00:49:07
by either party to pursue their you
00:49:09
believe they are at this point and
00:49:11
we just saw with the zuckerberg thing
00:49:12
what business did the fbi have going to
00:49:15
zuckerberg to get them to censor a new
00:49:18
york post story that turned out to be
00:49:19
completely true hold on a second that is
00:49:21
election interference they should not be
00:49:23
doing that
00:49:24
yeah that is
00:49:26
a tough job if they don't know if it's
00:49:27
been stolen or not yeah it's a tough job
00:49:29
by the way the government of the united
00:49:31
states has no business censoring a free
00:49:34
press that is a violation of the first
00:49:36
amendment when the government instructs
00:49:39
a private company to censor
00:49:42
a press story that the government itself
00:49:44
does not have the authority to censor
00:49:46
that is a violation of the first
00:49:48
amendment we thought remember when jack
00:49:50
dorsey said that he regretted the
00:49:52
censorship that twitter did
00:49:54
and he came out with that apology we
00:49:55
thought it was just twitter's decision
00:49:57
now we find out from zuck that he was
00:49:59
leaned on by the fbi and i think that
00:50:02
these big tech companies like twitter
00:50:04
like facebook they're gonna have to have
00:50:05
a new policy which is when the
00:50:07
government says we want you to censor
00:50:09
something their response needs to be
00:50:12
show us a court order they do not just
00:50:15
censor now based on the say-so of some
00:50:18
operative framework
00:50:19
i would agree with you i agree with you
00:50:20
on that i think it was a bad decision
00:50:22
obviously
00:50:23
the one big tech company that really
00:50:25
nailed this i think was apple you know
00:50:27
very early on
00:50:29
they drew a really hard line in the sand
00:50:30
with the san bernardino shooter because
00:50:32
they said if
00:50:34
we allow the fbi to get into this
00:50:36
person's phone even though you know what
00:50:38
he did was completely heinous
00:50:40
we are going to create a back door that
00:50:42
will become an exploit for everybody and
00:50:45
we are drawing the line on privacy and
00:50:47
security now different set of issues but
00:50:49
it just goes to show you
00:50:51
there have been a few examples where
00:50:52
some of these companies have drawn a
00:50:54
hard line and then in that example and i
00:50:55
think jason you mentioned this they went
00:50:57
to israel and had that company hacked
00:50:59
the phone
00:51:00
okay whatever
00:51:02
but it didn't come with um
00:51:04
they were able to stand up to the
00:51:05
pressure so i think there are some
00:51:07
example stats where you you can say no i
00:51:09
mean the
00:51:10
the idea that twitter would block a new
00:51:13
york post url it's like ah such a jump
00:51:16
ball like if it was the sex material i
00:51:18
could understand them saying like you
00:51:20
can't hack it that's against our terms
00:51:21
of service for and we agree on that sex
00:51:24
but in this case like i i don't know
00:51:25
let's go to something more interesting
00:51:26
cause well heat wave i think and the
00:51:28
drowning i know this is interesting to
00:51:29
sacks but i think it's interesting to
00:51:30
everybody else in the audience uh heat
00:51:32
waves and droughts are uh just flash is
00:51:34
hot in summer
00:51:36
yeah i think this might have to do with
00:51:38
global warming and be a little unique
00:51:40
just i'm kidding i'm kidding
00:51:42
before all the esg people get into sex
00:51:45
and say you know you're a globe
00:51:57
and then we'll come back around and give
00:51:58
you your raw meaning what's your what's
00:52:00
your what's your point of view on
00:52:02
climate change the impact it will have
00:52:04
on the planet
00:52:06
and whether like urgent action is needed
00:52:12
listen i'm not an expert in that area
00:52:13
i'm not going to pretend to be i do
00:52:15
think that um that we can't save the
00:52:19
planet by destroying the economy
00:52:21
and it seems to me that too many of
00:52:23
these save the planet people like want
00:52:25
to take reckless extreme actions that
00:52:28
would wreck our economy you just saw
00:52:30
actually elon just gave a talk this and
00:52:32
made news this past week from norway
00:52:36
where he said that we still need oil and
00:52:38
gas he's the leading innovator in
00:52:40
basically moving i don't
00:52:42
disagree
00:52:43
and he said listen unfortunately we got
00:52:45
to rely on oil and gas because it's too
00:52:47
important for civilization if we cut the
00:52:50
stuff off too quickly we end
00:52:52
civilization yeah so look i mean i think
00:52:54
this is a long-term problem but and i
00:52:56
think we need to have long-term global
00:52:59
warming just full stop
00:53:01
the planet is warming you agree with
00:53:03
this
00:53:04
it's not just about warming just just to
00:53:06
use a different term
00:53:08
that there are more frequent extreme
00:53:10
events that can severely
00:53:12
uh hurt
00:53:13
people hurt the economy hurt the food
00:53:15
supply hurt the energy supply all the
00:53:18
things that
00:53:19
you know i think were like all the way
00:53:21
on the bottom of maslow's hierarchy like
00:53:23
these are the things that are most
00:53:24
critical that they're starting to get
00:53:25
disrupted in a pretty severe way
00:53:29
you know i think that that's that's i
00:53:31
mean that's the big question so sax
00:53:33
it's i think it's becoming and this is
00:53:35
where the transition starts to happen
00:53:37
that a lot of people kind of say hey
00:53:39
over the long run the temperature is
00:53:40
going to go up by one degree celsius
00:53:42
over a century you know who cares
00:53:45
but there are the problem the problem is
00:53:47
this is that you know and by the way
00:53:50
whenever somebody like me points out how
00:53:52
insane some of these policies are
00:53:54
the topic has shifted to are you a
00:53:56
denier of some science or other no
00:53:58
listen my point is not about the science
00:54:00
my point is look at the collapse of the
00:54:02
sri lankan economy because they
00:54:04
implemented these esg rules on
00:54:06
fertilizer look at what's happening to
00:54:08
the dutch farmers who are being put out
00:54:09
of work because of esg california
00:54:12
california today governor governor
00:54:14
newsom today said please don't use your
00:54:17
electric power to charge your electric
00:54:19
cars
00:54:20
a week after they said uh gas cars are
00:54:23
now going to be banned in the state and
00:54:25
so there's a grid is going to go yeah
00:54:27
there's a deep irony underway today in
00:54:28
california because and fox news has
00:54:31
obviously latched on to this story
00:54:33
that that has to do with the grid though
00:54:35
i mean
00:54:36
look
00:54:37
suspicious whenever whenever politicians
00:54:39
invoke some crisis as the r as the
00:54:42
reason i'm talking about some political
00:54:43
arguments i'm not talking about the
00:54:44
political shock i've learned to distrust
00:54:46
it that's the point and so
00:54:49
i'm talking about you know what's
00:54:50
happening in europe right now is
00:54:52
obviously gas is through the roof
00:54:53
because of the ukraine war the you know
00:54:55
the price has basically gone through the
00:54:56
roof and so because of that they're not
00:54:59
able to produce fertilizer and one of
00:55:01
the byproducts of the production
00:55:03
fertilizer is co2
00:55:05
which gets added to the production of
00:55:08
beer to make it fizzy well guess what
00:55:10
the germans are not only about to run
00:55:12
out of gas they're about to run out of
00:55:13
beer
00:55:14
you think you think they're going to
00:55:15
keep supporting the ukraine war when
00:55:17
they find out that there's no beer for
00:55:19
oktoberfest
00:55:21
not not be able to eat they heat their
00:55:23
homes
00:55:24
they can't drink beer in october yeah
00:55:26
this is the west
00:55:29
sit down we got we need to sit
00:55:31
down just taking up just taking apart
00:55:33
just taking a beat for a minute like
00:55:35
taking
00:55:36
taking off the table the political
00:55:38
response
00:55:39
are you as an individual concerned uh
00:55:41
about the the impact of a changing
00:55:43
climate
00:55:44
on people
00:55:46
and on the economy and and are you
00:55:48
interested as an investor in the private
00:55:50
market solutions to resolve some of
00:55:52
those things that are obviously going to
00:55:53
become market driven problems
00:55:56
take the government out of the equation
00:55:58
i i think there there may be a long-term
00:56:00
problem here i'm not sure
00:56:02
like how long it takes i definitely
00:56:04
think i'm skeptical of this claim that
00:56:06
you know the world's going to end in the
00:56:08
next 10 years because frankly we've been
00:56:10
hearing that since the 1990s i mean 1988
00:56:13
there's a great headline article by the
00:56:14
way in new york times where it was like
00:56:16
scientists in 1988 said that all the
00:56:18
oceans all the ice caps will melt the
00:56:21
oceans will flood the land by the year
00:56:23
2000. so there is a credibility
00:56:25
challenge associated with predicting you
00:56:27
know kind of long-term outcomes like
00:56:28
this that that continues to kind of
00:56:31
foment unfortunately right yeah all my
00:56:33
beachfront property would be underwater
00:56:34
right now if all that came true
00:56:36
um no i'm just kidding but no but but
00:56:38
look it hasn't escaped my attention that
00:56:40
many of the political leaders
00:56:43
who are claiming that were facing an
00:56:45
imminent threat of being under water in
00:56:47
10 years own beachfront property
00:56:50
and fly on private jets so obviously
00:56:54
you know i'm not saying this isn't a
00:56:55
long-term problem but i do think they
00:56:57
try to create an imminent crisis so they
00:57:00
can shove through a bunch of bad
00:57:01
policies that are very destructive to
00:57:03
them
00:57:05
would you define what's happening with
00:57:06
temperature and extreme weather
00:57:08
as a crisis or not
00:57:12
um yeah i mean there's there's a i would
00:57:15
say there's a critical impact
00:57:17
in um
00:57:19
and will continue to be a critical
00:57:20
impact in the food supply chain
00:57:23
in um the quarters and years ahead
00:57:26
because of what we're seeing so severe
00:57:28
drought and heat wave in china right now
00:57:31
um and by the way food is not the only
00:57:32
one there's there's also the
00:57:34
manufacturing supply chain so in the
00:57:36
province of shechem in china they
00:57:38
actually lost power because so much of
00:57:40
the power is driven by hydroelectric pet
00:57:42
plants so uh streams and water flow has
00:57:45
slowed down and stopped as a result
00:57:47
there's less power as a result the
00:57:48
factories are being shut down as a
00:57:50
result key components for manufacturing
00:57:53
in the computing industry
00:57:55
and um
00:57:56
and in kind of mechanical goods
00:57:59
are not being produced at the rate that
00:58:00
they were being produced before that has
00:58:02
a ripple effect in the supply chain
00:58:04
similar to what we saw in covent and
00:58:05
then in the food supply chain we're
00:58:07
seeing a drought and a heat wave right
00:58:09
now we're coming out of it in the
00:58:11
midwest in the united states where we
00:58:13
grow corn and soybeans throughout europe
00:58:15
and also in china and in china they had
00:58:17
70 days in a row of record-setting
00:58:19
temperatures
00:58:25
no water high temperatures the they're
00:58:28
just starting to assess the crop damage
00:58:29
it looks pretty severe there was massive
00:58:31
crop damage in the midwest
00:58:33
uh in the corner the corn belt this year
00:58:36
um and then obviously european farmers
00:58:37
are having issues and combine that with
00:58:39
the geopolitical issues of the ukraine
00:58:41
crisis and the natural gas pricing being
00:58:43
so high
00:58:44
one-third
00:58:46
of
00:58:47
uh fertilizer of ammonia plants have
00:58:49
been shut down in europe and they think
00:58:50
that ammonia and fertilizer production
00:58:52
may drop by as much as one half in
00:58:54
europe because of the crisis so energy
00:58:56
prices are so high you can't make
00:58:58
fertilizer so that energy is being also
00:58:59
redirected into other industry and
00:59:01
support homes so you believe it's a
00:59:02
crisis so i guess the question yeah
00:59:04
people are turning on their acs in
00:59:06
california this week you know you see
00:59:07
that governor newsome just said our grid
00:59:10
in california cannot support excess
00:59:13
electricity consumption therefore one of
00:59:15
the biggest variables is electric cars
00:59:17
he's saying don't plug in your electric
00:59:18
cars this week and that's because of
00:59:20
record high temperatures they're about
00:59:21
to hit california in two days so look
00:59:23
everyone says hey these are kind of um
00:59:26
anecdotal stories but no it's exactly
00:59:29
statistically the frequency of extreme
00:59:32
things happening is continuing to climb
00:59:34
and then the impact is in the food
00:59:36
supply chain the energy supply chain and
00:59:38
the manufacturing supply chain and there
00:59:40
are follow-on effects now i'm optimistic
00:59:42
that private market solutions will
00:59:44
resolve these issues yeah that was my
00:59:45
next question
00:59:48
yeah of course i mean look we've had
00:59:49
crises since the dawn of humanity i mean
00:59:52
we were a starving you know we need a
00:59:54
crisis to solve some of these problems
00:59:56
these are pretty economically obvious
00:59:58
yeah and that's that's my point the the
01:00:00
private market will resolve because
01:00:02
people want to have electricity they
01:00:04
want to have food they want to have not
01:00:06
want to need they need and so so so the
01:00:09
market will pay for those things and
01:00:10
therefore producers and technologists
01:00:13
will resolve to solutions to make that
01:00:15
happen so we just have to have the pain
01:00:16
and suffering and see it firsthand
01:00:18
the market to kick in
01:00:20
our friend
01:00:22
in the group chat that shall not be
01:00:24
named posted this
01:00:25
meme
01:00:27
you guys saw it right which said like
01:00:29
an autistic school girl takes what was
01:00:32
it i have it here quit school this is
01:00:34
the dominoes
01:00:36
you you can show the dominoes but
01:00:38
basically it said an autistic swedish
01:00:40
girl decides to skip school is the
01:00:42
little domino and seven dominoes later
01:00:44
this huge domino it says the collapse of
01:00:47
europe's energy grid
01:00:49
and without commenting on the language
01:00:51
used in the meme for a second
01:00:53
what is the point the point is
01:00:55
these conversations can so quickly
01:00:58
go off the rails and are not about
01:01:00
national security and economics and
01:01:02
quickly become about moral virtue
01:01:04
signaling that you miss the point
01:01:06
the point in the united states just to
01:01:07
be very blunt
01:01:09
is that the cost of electricity
01:01:12
has gone up
01:01:13
by 46 percent in the last decade
01:01:16
it will go up by another 40 odd percent
01:01:20
through 2030 so between 2010
01:01:23
and 2030
01:01:25
the cost of electricity for every single
01:01:26
american will have effectively doubled
01:01:29
even though
01:01:30
the ability to generate particularly
01:01:33
from wind and solar
01:01:35
have been reduced by 90 percent now why
01:01:37
is that well it turns out that if you
01:01:39
look inside
01:01:40
the p l's of these utilities it actually
01:01:42
gives you the answer
01:01:44
so over the next 10 years we have to
01:01:46
spend
01:01:47
as a nation
01:01:48
just
01:01:50
just on upgrading power lines
01:01:53
two trillion dollars
01:01:56
this is all cap this is all like crazy
01:01:58
crazy opex right capex improvements for
01:02:01
sunk cost investments our power line
01:02:03
infrastructure in america is 20 plus
01:02:05
years old
01:02:07
30 years old
01:02:08
our
01:02:09
generation infrastructure is pretty poor
01:02:12
um we have all of these failures we
01:02:14
don't have enough peakers we don't have
01:02:16
ability to store energy when we need it
01:02:18
so if you add this all up i do think
01:02:20
that there's a huge economic incentive
01:02:22
to solve it and there are practical ways
01:02:24
to solve it and
01:02:26
that's what we have to stay focused on
01:02:27
because if we allow the moral virtue
01:02:29
signaling to get in the way we're going
01:02:31
to make some really stupid decisions
01:02:32
we're going to keep trying to turn off
01:02:34
nuclear another thing that elon said you
01:02:36
know we're we're not going to green
01:02:38
light uh shale and that gas
01:02:40
we don't have time for this if you
01:02:42
actually believe this is a cataclysmic
01:02:44
issue
01:02:46
you need to basically be okay with
01:02:47
hydrocarbons because it is the only
01:02:49
credible bridge fuel we have to keep the
01:02:52
world working properly because otherwise
01:02:54
what david said
01:02:55
is right we are going to economically
01:02:57
destroy parts of the world by trying to
01:03:00
race towards this net zero goal by the
01:03:02
way guys i just want to take the you
01:03:04
know rip the band aid off
01:03:06
net zero by 20 50 26 it is not possible
01:03:09
there is zero credible plans that the
01:03:12
world has to do it so we have to take
01:03:14
small incremental steps and many of them
01:03:18
yeah this is that we should stay focused
01:03:20
on that yeah the interesting thing
01:03:22
and you cannot let people guilt-trip you
01:03:24
because this is when you make these
01:03:26
stupid mistakes like the entire
01:03:27
continent of europe made yeah it really
01:03:30
does which is now going to [ __ ]
01:03:33
here's the economies of that of that
01:03:35
entire continent unnecessarily here's
01:03:37
the good news all this virtue signaling
01:03:39
and people wanting to be green and and
01:03:41
for whatever reason
01:03:43
all of that now economics and
01:03:45
geopolitical is forcing people to
01:03:47
rethink nuclear
01:03:48
the diablo canyon
01:03:51
nuclear power plant which is the last
01:03:52
one in california that's operational
01:03:55
it's being voted on today as we're
01:03:56
taping this and it's expected that
01:03:58
they're going to keep it online the
01:03:59
governor with the great hair wants to
01:04:01
keep it going and the fascinating part
01:04:03
about this is how choice does he have
01:04:05
exactly and so now the awareness is so
01:04:08
high about power and
01:04:10
us losing it and asking people to turn
01:04:12
off their air conditioners turn on don't
01:04:13
plug in your cars but people people
01:04:15
don't understand how nuclear energy even
01:04:18
works and they're like get rid of it
01:04:19
they went to a no nukes concert in 1978
01:04:21
and they haven't changed their position
01:04:23
since but this is interesting this guy
01:04:24
gene nilsson
01:04:25
who's been a champion of this stuff
01:04:27
he said i thought our chances were zero
01:04:29
of keeping this thing open um and he
01:04:31
said what's
01:04:33
you know and he said he told this
01:04:35
conference of attendees nuclear
01:04:36
conference
01:04:38
that the effort
01:04:39
to maintain it he said what's happened
01:04:41
since you know the last six months has
01:04:43
been like a snowball
01:04:45
that everybody has changed their
01:04:47
position just in the last year
01:04:48
on shutting these things down and we saw
01:04:50
obviously germany is re you know
01:04:52
thinking the the three remaining of
01:04:54
their six that they were gonna turn off
01:04:56
they're putting back on and i think
01:04:57
we're gonna see new ground broken and
01:04:59
japan
01:05:00
came out just in the last week and said
01:05:02
they're gonna build more nuclear power
01:05:04
uh and nuclear power plants now think
01:05:06
about that that's awesome that's
01:05:08
unbelievable they had fukushima the
01:05:10
germans shut off their nuclear because
01:05:12
of fukushima but guys the japanese are
01:05:14
saying we're building more
01:05:16
guys fukushima didn't happen by accident
01:05:18
there was a like
01:05:20
an
01:05:20
incredible tsunami which was triggered
01:05:23
by once at 100 earthquake
01:05:25
you're talking about these extremely
01:05:27
long tail events yes the retaining walls
01:05:30
could have been built better but these
01:05:32
are things we find we iterate and we
01:05:34
solve it was not the reason to shut down
01:05:36
an entire mechanism of energy generation
01:05:39
stupid mistakes where they put it just
01:05:41
too low in the wrong place if they just
01:05:43
put it up the hill a couple of miles it
01:05:45
would have been fine
01:05:46
but also if you look inside of what
01:05:48
happened there was enormous pressure
01:05:50
inside of these companies to basically
01:05:52
you know
01:05:53
take take actual direct blame and
01:05:55
responsibility i get all of that but
01:05:58
these organizations were shamed into
01:06:00
turning these things off that is not the
01:06:02
way to make good smart decisions okay so
01:06:05
uh gorbachev the last ruler of the ussr
01:06:09
uh passed away this week saks robots
01:06:12
yeah i mean i think this was a real
01:06:13
milestone
01:06:15
you go back to the 1980s and
01:06:18
ronald reagan the who had spent his
01:06:20
entire
01:06:21
career being a cold warrior
01:06:24
saw the opportunity to
01:06:27
basically do business with with
01:06:29
gorbachev margaret thatcher had told him
01:06:31
that this is a man we can do business
01:06:33
with gorbachev had come to power in 1985
01:06:35
he had initiated reforms of the soviet
01:06:37
system he was a communist to be sure but
01:06:39
he introduced political reforms called
01:06:41
glasnost and economic reforms called
01:06:43
perestroika and reagan sees the
01:06:45
opportunity to go meet with him and they
01:06:47
signed
01:06:48
arms control treaty after arms control
01:06:50
treaty and ended
01:06:52
the threat of mutually assured
01:06:54
destruction that the world had been
01:06:55
living with since the beginning of the
01:06:57
cold war you got to remember that you
01:06:58
know the cold war began shortly after
01:07:00
world war ii
01:07:01
and we had this doctrine of mutually
01:07:04
assured destruction or mad and the whole
01:07:06
world was living under the shadow of
01:07:09
nuclear annihilation this was showed
01:07:11
repeatedly when i was a kid there was a
01:07:13
tv movie called um
01:07:16
the day after the day after it was
01:07:17
serious it was really scary
01:07:20
they terrorized us that america were all
01:07:22
gonna die we had did you ever have
01:07:24
nuclear uh bomb drills we had to get
01:07:26
under your desk
01:07:27
yeah i mean so
01:07:29
yeah so if you're like our age you
01:07:31
remember this that that movie by the way
01:07:33
that that was a tv event movie that was
01:07:35
one of the most widely watched movies
01:07:37
but there were others you know jim
01:07:38
cameron used this concept in the
01:07:40
terminator movies um you know it was
01:07:42
something that people were really afraid
01:07:44
of and
01:07:45
reagan sees the opportunity he thought
01:07:47
fundamentally that
01:07:48
uh nuclear deterrence
01:07:50
was immoral that yeah better to have
01:07:52
deterrence than a nuclear war but that
01:07:55
he if he could he seized the opportunity
01:07:58
to negotiate the end of the cold war and
01:08:00
by the way there were hardliners in his
01:08:02
administration who did not want him to
01:08:03
negotiate with gorbachev but they ended
01:08:05
up doing a series of uh meetings uh it
01:08:09
culminated in 1986 at the reykjavik
01:08:11
summit and they signed uh deals to
01:08:13
remove uh you know these these inf
01:08:16
system deals now
01:08:18
and that ended the cold war and then
01:08:19
basically what happened is in 1989 the
01:08:21
berlin walk came down
01:08:23
gorbachev allowed the wester the warsaw
01:08:26
pac countries to leave and then in 1991
01:08:28
the soviet union collapsed
01:08:31
so
01:08:32
you know he gets a lot of credit for
01:08:33
being willing to reform that system
01:08:36
now the sad thing is if we were fast
01:08:38
forward 30 years later where are we
01:08:40
today we're back in a new cold war
01:08:43
with russia i mean that we've been
01:08:44
spending a good part of this year
01:08:47
talking about the threat of a nuclear
01:08:49
use
01:08:50
and you know this was a problem that we
01:08:52
thought was solved 30 years ago
01:08:55
um and now we're back with it today and
01:08:57
you've got to ask
01:08:59
have
01:08:59
the successors
01:09:01
of you know reagan and and and george
01:09:04
herbert walker bush the people who
01:09:06
inherited our foreign policy over the
01:09:09
last 30 years have they done as good a
01:09:11
job um as reagan did reagan ended the
01:09:15
cold war we are back in a new cold war
01:09:17
why
01:09:18
what is the reason for this there's been
01:09:20
a a a series of stupid policies that now
01:09:25
have put the risk of nuclear war back on
01:09:27
the table
01:09:28
my interest in gorbachev is slightly
01:09:30
different um he is an incredibly
01:09:33
important character
01:09:36
of the second half of the 20th century
01:09:37
undeniable you know won the nobel prize
01:09:40
as you said david kind of ended the cold
01:09:42
war
01:09:43
but the most important thing in my
01:09:44
opinion was
01:09:46
the precursor to praero strika and why
01:09:49
he did it and as you said like you know
01:09:52
this is a fairly art and communist
01:09:53
although he had really interesting views
01:09:55
like he ran a very kind of like open
01:09:58
um kind of politburo where folks could
01:10:00
debate and he you know promoted a lot of
01:10:03
young people from within
01:10:04
all of these interesting things but
01:10:07
the most important thing and he's
01:10:08
written about this a lot is the reason
01:10:10
that he embarked on perestroika was
01:10:12
because
01:10:13
ussr at the time had an incredibly poor
01:10:16
work ethic
01:10:17
terrible productivity and horrible
01:10:19
quality goods
01:10:21
and i think that there's something to be
01:10:23
learned by that because at the tail end
01:10:25
of communism essentially where you had
01:10:28
central planning central imposed
01:10:31
economic principles
01:10:33
what happened people did not feel that
01:10:36
they had any ownership in the outcome
01:10:38
no agency
01:10:40
no agency whatsoever and i think that
01:10:42
there's a really important lesson to
01:10:43
observe there which is that if
01:10:45
governments get too actively involved
01:10:48
this doesn't just happen in russia it
01:10:50
happens everywhere it's happening in
01:10:52
california we just talked about it it's
01:10:54
happening where we live right now and if
01:10:56
you look at then what happened
01:10:58
afterwards it became the
01:11:00
aristocracy that basically ruled the
01:11:03
ussr before
01:11:05
and then fighting against all these
01:11:06
folks that wanted reforms and that
01:11:08
created the schism which then perverted
01:11:12
capitalism for you know seven or eight
01:11:14
years through yeltsin until putin got
01:11:16
there and that's what created the
01:11:18
oligarch class and you know really
01:11:20
exacerbated a bunch of wealth capture by
01:11:23
a handful of folks that may or may not
01:11:24
have deserved it and i'm not going to
01:11:25
judge that
01:11:27
but i just think it's really important
01:11:28
to understand that he was forced to
01:11:30
embark on this
01:11:32
because of all of these state central
01:11:35
planning policies and so it's just an
01:11:37
important lesson for americans in
01:11:39
democracy which is be careful if you
01:11:41
want more government
01:11:42
you might need start work guys
01:11:45
the soviet union their economy used to
01:11:47
run on what they called five year plans
01:11:49
it was incredibly centralized it was all
01:11:51
run by the government and you know this
01:11:54
was communism and the 20th century the
01:11:56
second half of it especially was a giant
01:11:59
battle of systems not just of countries
01:12:01
not just the western bloc um you know
01:12:04
led by the u.s the free world versus the
01:12:06
soviet union the warsaw pact it was also
01:12:08
a battle of philosophies and systems it
01:12:10
was the philosophy of state control
01:12:13
versus freedom
01:12:14
and uh in a free economy and freedom won
01:12:17
you know the free economy won in that
01:12:19
battle and the crazy thing is 30 years
01:12:22
later we're talking about socialism
01:12:24
being a viable doctrine you have
01:12:26
politicians
01:12:28
basically saying that they are
01:12:29
socialists but 30 years ago you would
01:12:31
have been
01:12:32
like that was unelectable and the point
01:12:34
is example after example
01:12:37
empirical evidence well documented of
01:12:40
just how it doesn't work
01:12:42
and i guess the thing is you know we all
01:12:44
say like you just have to learn it for
01:12:45
yourself you know like you'll tell your
01:12:47
kids to do to not do something add
01:12:50
inside i gotta touch the stove yeah they
01:12:51
gotta touch the stove themselves and get
01:12:53
burned we are about to go do that in
01:12:55
california can you imagine if like
01:12:58
people who want to be social is here who
01:13:00
bind us if they had to be in a food line
01:13:02
or have rations literally russia had
01:13:04
food lines and they were rationing food
01:13:06
in the 1980s like well yeah that's how
01:13:08
dysfunctional it got yeah a large driver
01:13:11
of gorbachev basically negotiating these
01:13:13
peace settlements with you know with
01:13:15
reagan and this nuclear you know uh
01:13:17
demilitarization
01:13:18
was in part because he knew he couldn't
01:13:20
fight
01:13:21
right
01:13:22
it was this was collapsing
01:13:26
yeah they could not keep up reagan began
01:13:29
an arms buildup and there was an arms
01:13:31
race and they were losing they were
01:13:33
losing they were releasing and this is
01:13:35
and this is why like people should not
01:13:36
misunderstand what gorbachev was he was
01:13:39
not necessarily some democratic freedom
01:13:41
fighter he was a person who was
01:13:42
observing the on the ground conditions
01:13:44
of a socialist system
01:13:46
decay their ability to compete and so he
01:13:48
had to capitulate before it was forced
01:13:50
upon him right
01:13:53
right this is why i don't think he
01:13:54
deserves as much credit as ronald reagan
01:13:56
is because at the end of the day
01:13:57
gorbachev would have kept communism
01:13:59
going if he could have if he could have
01:14:01
if he could he wanted the soviet union
01:14:03
to stick together i mean that's right
01:14:05
but his but but i think to his credit
01:14:07
when the things start to collapse he
01:14:09
didn't
01:14:10
silence and repression to try and hold
01:14:12
it together so you know he was a he was
01:14:15
a reformer he was a liberalizer
01:14:17
maybe and a pragmatism didn't use
01:14:19
violence but and ultimately he was a
01:14:20
partner for ronald reagan remember
01:14:22
ronald reagan began this gigantic arms
01:14:24
buildup he was denounced as a cowboy who
01:14:26
would get us in world war three but when
01:14:28
he had the chance to negotiate a deal
01:14:30
with gorbachev he took it and they
01:14:32
basically got arms control and it was
01:14:35
because reagan was able to sit on top of
01:14:38
an extremely productive capitalist
01:14:40
system that allowed him to make those
01:14:42
investments that made that capitulation
01:14:45
basically a fata complete and i think
01:14:46
that that's another thing for a lot of
01:14:48
us to to understand which is free market
01:14:51
capitalism removing these degrees of
01:14:54
decision making give us degrees of
01:14:56
freedom and i've said this before on the
01:14:57
last part the great thing about the ira
01:15:00
and what chuck schumer did
01:15:01
is actually will be written in 10 or 15
01:15:04
years from now because when we get to
01:15:06
energy independence when every home is
01:15:09
resilient
01:15:10
the national security calculus in
01:15:12
america changes wholeheartedly overnight
01:15:14
yeah i mean
01:15:15
think about it
01:15:16
years ago
01:15:18
right but i didn't cancel it
01:15:20
okay wow listen uh no it's true if
01:15:23
you're willing to use natural gas and
01:15:24
fracking america
01:15:26
is one of the richest energy countries
01:15:28
in the world oh we produce a lot of oil
01:15:29
too yeah i mean listen it it will change
01:15:32
everything if we can really go all in on
01:15:34
all of the categories nuclear
01:15:36
uh
01:15:39
if you let the capital markets do and
01:15:41
the free markets do what they're meant
01:15:43
to do
01:15:44
they will empower the government to do
01:15:46
great things for all of you all citizens
01:15:48
yes i agree with that hundred percent
01:15:50
and the reason we want to stop it is
01:15:52
because we have a couple of examples of
01:15:54
you know extreme wealth and i think
01:15:55
that's something we have to think about
01:15:57
is like are the extreme is the extreme
01:15:58
wealth created for a certain class
01:16:01
enough to stop the prosperity train that
01:16:03
we actually have in america listen jason
01:16:04
the politicians in california think they
01:16:06
can run fast food businesses better than
01:16:09
the people who own those those
01:16:11
restaurants these people have never
01:16:13
worked in their lives no i mean we have
01:16:15
they could work they wouldn't yeah
01:16:17
the great thing is we have a running a b
01:16:19
test which will show whether this state
01:16:22
central planning can work or not
01:16:25
and again if we refuse to want to listen
01:16:27
to the examples of russia or all of
01:16:30
these other countries that have tried
01:16:31
this
01:16:32
then so be it we will know
01:16:35
in the next three to five years that
01:16:36
these policies actually don't work and
01:16:38
actually that it actually accelerates
01:16:41
the exact hellscape that they think
01:16:42
they're trying to avoid but you know not
01:16:44
only to my point about foreign policy
01:16:46
not only are we forgetting the lessons
01:16:49
of this cold war the economic lessons
01:16:52
that a free enterprise system generates
01:16:54
more wealth and prosperity and more
01:16:56
national greatness more ability to fund
01:16:59
a defense budget create a better economy
01:17:01
not only does it do all those things we
01:17:03
forgot not only have we forgotten that
01:17:05
but also
01:17:07
we have abrogated we have ended every
01:17:09
single defense control and arms control
01:17:12
treaty with the russians that reagan and
01:17:14
gorbachev signed why
01:17:17
why why did we do that
01:17:19
now our nuclear missiles are pointing
01:17:20
each other again and you know what
01:17:22
russia's a much poorer country in the us
01:17:24
we're actually 15 times richer than them
01:17:27
during the cold war
01:17:28
at their peak we were only three times
01:17:30
richer than them but we're 15 times
01:17:32
richer but they still got over 6 000
01:17:34
nukes why did we get rid of all those
01:17:35
arms control treaties why have we
01:17:37
basically alienated them yeah you we
01:17:39
talked we said it before like you're
01:17:41
dealing with a pragmatist uh and putin's
01:17:44
a kgb
01:17:45
maybe you feel like putin isn't someone
01:17:47
we can deal with now but he was someone
01:17:48
we could have dealt with 10 years ago 20
01:17:50
years ago we missed the opportunity to
01:17:52
deal with him jason if he was a rational
01:17:54
actor if he was a rational actor we
01:17:56
would be able to deal with him i think
01:17:57
the only way he's actually going to be
01:17:59
really the only way we'll be able to
01:18:00
deal with him is if he doesn't have the
01:18:02
oil uh market he has like he just has
01:18:05
too much power from that oil and over
01:18:07
time that's the solution we have to be
01:18:09
energy independent you know i think
01:18:10
europe has learned that
01:18:12
he was a communist he was an heir to
01:18:15
stalin and yet reagan's could still do
01:18:17
business with him and sign an arms
01:18:19
control treaty
01:18:21
so that we could end the risk of
01:18:22
mutually assured destruction
01:18:26
you do not have to believe that putin is
01:18:27
a good guy in order for us to avoid
01:18:30
getting back into a cold war which is
01:18:32
the situation we find ourselves in now
01:18:35
how does it benefit us to have russian
01:18:37
nukes once again pointed at our heads
01:18:41
yeah i mean and the reason why the
01:18:43
reason why we alienated him jason has
01:18:44
nothing to do with him being a madman or
01:18:46
whatever it is because we brought nato
01:18:49
which he views as a hostile military
01:18:51
alliance right up to his border and and
01:18:54
by the way listen to this video from
01:18:56
gorbachev gorbachev was asked about nato
01:18:58
expansion in front of the us congress he
01:19:00
was giving a talk to them and they asked
01:19:02
him gorbachev what do you think about
01:19:04
nato and what did he say he said that
01:19:06
you cannot humiliate a country this way
01:19:08
and expect there to be no consequences
01:19:10
gorbachev was against nato expansion
01:19:12
when when basically george herbert
01:19:14
walker bush and the secretary of state
01:19:16
james baker went to gorbachev to argue
01:19:18
on behalf of german reunification this
01:19:20
is basically in 1990.
01:19:22
baker made the promise to gorbachev not
01:19:25
one inch eastward gorbachev said yes
01:19:27
okay they can reunify but we do not want
01:19:30
nato moving up to our border baker made
01:19:32
that promise we have brought nato up to
01:19:34
their border that is why putin regards
01:19:37
us with hostility
01:19:39
yeah and i think europe regards him with
01:19:42
hostility and they're scared of him
01:19:43
because he keeps invading countries so
01:19:45
yeah there's takes two to tango but hey
01:19:47
this has been episode 94. it does it
01:19:49
does take two to tango but you have to
01:19:51
ask has the u.s foreign policy over the
01:19:54
last 30 years that's gotten us in a new
01:19:56
cold war with russia has that been a
01:19:58
successful par foreign policy they have
01:20:00
undermined all the good work that ronald
01:20:02
reagan and gorbachev did together to end
01:20:04
the cold war we are back in a new cold
01:20:06
war and you need to find reagan in
01:20:08
hollister you need to find a new right
01:20:09
some blame putin has some blame but so
01:20:11
does the us state department so does the
01:20:13
u.s state department and europe europe
01:20:15
has a big part of the blame to here
01:20:17
because he's their neighbor yeah for
01:20:19
the sultan of science the rain man and
01:20:22
uh reagan library chairman are you the
01:20:24
chairman of the reagan library let me
01:20:26
ask you this when you were a kid did you
01:20:27
have a reagan poster in your room
01:20:29
have you ever owned a reagan poster
01:20:32
i'm sure i'm sure i've definitely owned
01:20:34
a picture of of reagan and um
01:20:37
ronald reagan listen jason wrong do you
01:20:39
ever hang around reagan poster or a
01:20:41
picture in your dorm at stanford yes or
01:20:43
no
01:20:44
listen ronald reagan that's a yes
01:20:46
hold on a second
01:20:47
ronald reagan won the cold war without
01:20:49
firing a shot he gave us the greatest
01:20:51
economy the us has ever had he ended the
01:20:54
inflation and stagflation in the 1970s
01:20:57
and again he he avoided getting us into
01:21:00
any of these major wars tell me the
01:21:02
politician who if you could have lunch
01:21:04
with anybody who is the historian who
01:21:05
you revere who has a track record like
01:21:07
that
01:21:09
um
01:21:10
yeah i mean i i guess one would say bill
01:21:12
clinton you know would be the closest
01:21:14
you know great president of our
01:21:16
lifetimes right you would agree with
01:21:16
that
01:21:17
i think he's a good good president
01:21:19
especially number two behind reagan in
01:21:21
our lives remember he benefited from the
01:21:23
economy that whatever reason you would
01:21:24
agree with me clinton is right behind
01:21:26
reagan reagan and clinton in since like
01:21:29
1950 something
01:21:31
easily top two yeah right easily easily
01:21:34
it's hard for their sacks to say
01:21:36
hour was very good listen i mean but
01:21:38
head and shoulders i think like for
01:21:39
practically what they dealt with at
01:21:41
their point of time
01:21:42
amazing all right listen
01:21:44
saks i know you love reagan
01:21:47
and uh reagan i think that's what you
01:21:49
should put you should be bringing
01:21:50
nixon reagan and bill clinton one on
01:21:53
each side of you for next week will you
01:21:54
do that for us i gotta go guys i gotta
01:21:56
go too all right love you sexy poop i
01:21:57
love you all next time bye
01:21:59
love you too happy birthday thanks bro
01:22:03
we'll let your winners ride
01:22:06
rain man david
01:22:13
and they've just gone crazy with it
01:22:17
[Music]
01:22:34
we should all just get a room and just
01:22:35
have one big
01:22:36
huge all just useless it's like this
01:22:38
like sexual tension that they just need
01:22:40
to release
01:22:41
[Music]
01:22:44
your feet
01:22:52
[Music]
01:22:56
i'm going on
01:22:58
[Music]
