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i want to play the theme music for this
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episode okay hold on a second here we go
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[Applause]
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if you let the indian government plant
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spies in your office give a little
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whistle
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[Music]
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if you have too many bots you can come
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up with your own metric mdaus
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fda use
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when you want to incent your staff to
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not look at the bots give them bonuses
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based on dows
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based on taos
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[Music]
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always let your bonus be your guide
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when you're on the board and you see
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metrics that you don't like turn a blind
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eye
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turn a blind eye
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i'm sorry sorry
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i just got subpoenaed
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[ __ ] everybody's getting subpoenaed
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again
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this is j cal at his best
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we gotta stop he's getting ourselves
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[Music]
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your winners troubles
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rain man
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[Music]
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david source it to the fans and they've
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just gone crazy
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[Music]
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is going to be the story of 2022 for
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sure right before i guess the big case
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between
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elon and twitter is about to happen i
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guess in october at some point a twitter
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whistleblower
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has come forward and dropped
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a nuke into the middle of
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what was basically the story of the year
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in business i think the former head of
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security hired by jack himself
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and incredibly well respected uh peter
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mudge
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zat co he's referred to as mudge one of
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the most respected people in uh the
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security industry again recruited by
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jack in 2020 after a team of hackers you
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may remember took over all these
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verified accounts obama biden and and
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elon's account as well
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and he was um head of security until
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january of this year eight months ago
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and
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he claims
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through explosive documents a huge
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document dump that
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twitter execs ignored these twitter
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executives ignored multiple security
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vulnerabilities now why is this
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important well obviously if obama biden
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and other heads of state have their
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twitter handles they could say something
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that could cause an international
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incident and that's actually happened
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with hacks before
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he also says they were not following
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even the most basic security protocols
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like safeguarding staff access to core
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software of course all this comes after
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there were
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saudi
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infiltrator spies essentially inside of
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twitter i mean the list of things here
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that he is alleging is truly colossal he
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dumped these documents to the department
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of justice the sec
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congress and
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the washington post he alleges that the
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vulnerabilities make twitter extremely
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vulnerable to foreign spies hacking and
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disinformation campaigns
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and perhaps most importantly to the
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acquisition the complaint also adds that
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twitter's policy towards fake accounts
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incentivize quote deliberate ignorance
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by undercounting spam accounts and
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giving bonuses to execs for increasing
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users but not finding
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bots
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saks your thoughts i mean
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on this we you talked about your uh
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subpoena
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or whatever that was uh
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i don't know it's a subpoena i'm being
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depositioned
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it's so you're you're having a
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deposition yeah they want they want to
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depot me too which is kind of amazing
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but let's let's save that because i
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think this is um more more newsworthy
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so
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you'll recall on a previous show we
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talked about this idea that if twitter
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sues elon to go after the kill fee or to
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go after damages the question will very
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rapidly become
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about whether twitter has a bot problem
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and will discovery reveal
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documents that show that twitter
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executives knew or should have known
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there was a problem
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and so i said you know the question will
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very rapidly become what did twitter
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executives know and when did they know
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it
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now i couldn't have predicted that this
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whistleblower would come forward but
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what he's basically saying is not only
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is there a bot problem there is a
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cover-up of the bot problem he's
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accusing the company of
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positively nixonian
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uh tactics here so just to build on what
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you said j-cal
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he said that
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twitter executives don't have the
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resources to fully understand the true
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number of bots in the platform and their
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executives are disincentivized to count
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them properly because doing so would
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negatively affect their bonuses so i
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didn't know that their bonuses were in
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any way tied
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to uh to this bot issue so he's
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basically he's making the upton sinclair
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argument that it's hard to get a man to
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understand a problem when his salary
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depends on not understanding it so
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that's part of what he's saying he's
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also saying
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that he's a he's accusing twitter ceo
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prague agarwal directly let's just say
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these are allegations right these are
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not proven yet uh but here's what he's
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saying basically he's saying
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that perag and his lieutenants
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repeatedly discourage him from providing
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a full accounting of twitter security
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problems to the company's board of
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directors they basically prevented him
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from producing a written report
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he also says that the company's
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executives ordered him to knowingly
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present cherry-picked and misrepresented
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data to create the false perception of
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progress on urgent cyber security issues
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he also alleges that they went behind
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his back to have a third party
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consulting firm
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their report scrubbed to hide the true
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extent of the company's problems and as
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a result of this he's basically
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saying that twitter executives committed
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securities law violations by making
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material misrepresentations and
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omissions and sec filings and this is
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what got elon to to sort of commemorate
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zacco's revelations with one of his
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trademark memes which was the meme of
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jiminy cricket singing give a little
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whistle from the film pinocchio which i
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think becomes a called open here
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which just became our cold open
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so yeah look these are very serious
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allegations they're not proven yet he's
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working with the same group who worked
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with
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francis hogan and
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i certainly questioned some of the
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things she was saying so i'm not going
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to automatically accept on faith
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everything he's saying but i think by
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the same token because he's working with
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groups
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that backed francis hogan who was very
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much not on the free speech side of this
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debate i'd also think you can't just
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accuse this guy being an elon stooge
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this guy
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is a respected cyber security
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authority he's one of these like white
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hat hackers he's somebody who was an
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early actor literally
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if you were to ask before all of this
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before we worked on twitter like
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who would you want as your chief
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security officer you know give me a
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short list he'd be on it for any company
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right one of the most respected people
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who points out vulnerabilities like
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chemotherapy burger i have a question
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about corporate governance and what
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seems to be a dysfunctional relationship
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here you have jack hires somebody to
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solve the security problems then when
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presenting to the board he's not allowed
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to tell the truth and they
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the board has given incentives to the
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management team he's a top five top
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seven member of the management team so
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what's going on here with this
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dysfunction where he's hired to tell the
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truth
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to fix the problems the board
00:07:42
is turning a blind eye to it and maybe
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the management team is not giving the
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board the data they need to make better
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decisions who
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how do you game theory this yeah i'm not
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sure that it's you can come to all those
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conclusions
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yeah i'm not coming to the conclusion
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i'm just my mind is wandering of how
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this i read this function comes up i
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read parts of
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of his whistleblower i can't claim to
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have read at all it actually isn't super
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supportive of elon's case
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the most problematic thing that he
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points out
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is the following and this is a quote
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from his complaint
00:08:15
he said twitter quote already doing a
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decent job excluding spambots and other
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worthless accounts
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from its calculation of mdow
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at best he's alleging that twitter
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omitted details not that it lied
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directly
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so if you kind of take that i think what
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he's really pointing
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his sights on
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are as you said disclosures that have
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nothing to do with the spam issue but
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have a lot to do
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with security and that is something that
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typically in a in a public company board
00:08:49
filters up through the audit committee
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typically that gets a readout right once
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a quarter from the rep from the right
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people who talk about here's our cyber
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security threats and vulnerabilities and
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then there is a readout from that
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committee chair
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to the board
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and then those are
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noted
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in your quarterly
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in your quarterly reports that the
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secretary
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writes down so
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i think part of why this guy may not
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have had the audience is
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it was also written that he was a pretty
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terrible manager and there were hundreds
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of people in his organization who were
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just kind of running here and there
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and so you know you guys have all been
00:09:31
in the situation where we hire somebody
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who is an exceptional performer
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and then we miscast that person by
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putting them in a point of leadership
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and and being a team manager versus um
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you know a single kind of like
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um product or engineering expert and it
00:09:49
seems that there was a part of that at
00:09:51
play as well which decayed the ability
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for management to actually have enough
00:09:55
faith and trust in this guy to put him
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in front of the board so and that's all
00:09:59
that's just come out in the last few
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days so
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i don't know my
00:10:02
my reading of the whistleblower claim is
00:10:05
really that
00:10:06
this is the kind of thing that companies
00:10:09
like facebook and google and others have
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had issues with the ftc in the past
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they typically settle those claims they
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pay a fine snap
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but those things take three to five
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years
00:10:21
to play out so i suspect
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that this body of content
00:10:27
more leads to that outcome
00:10:29
than is a smoking gun that really helps
00:10:32
elon in fact this the the fact that he's
00:10:34
actually affirmatively stating
00:10:37
that their calculation of mdow is
00:10:38
actually pretty decent
00:10:40
actually hurts the claim that elon is
00:10:42
making
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i don't know if i agree with that
00:10:44
actually okay go ahead sex so i agree
00:10:47
with with chamath that the claims he's
00:10:49
making are far broader than the bot
00:10:51
issue um and far broader than the issues
00:10:54
that elon's raised so i agree with you
00:10:56
about that chamath however
00:10:58
i don't agree that what he's saying
00:11:00
isn't specifically helpful to elon's
00:11:02
case so what he said is so this is from
00:11:05
a cnn business article he said
00:11:08
zacco's disclosure argues that by
00:11:10
reporting bots only as a percentage of m
00:11:13
dao rather than as a percentage of total
00:11:15
number of accounts on the platform
00:11:16
twitter obscures the true scale of fake
00:11:19
and spam accounts on the service a move
00:11:21
zacho alleges is deliberately misleading
00:11:24
and then uh cnn what you're saying here
00:11:27
just to do the math the denominator
00:11:29
matters here if the denominator was all
00:11:31
accounts the percentage of bots would be
00:11:32
much higher if the denominator is
00:11:35
monthly
00:11:36
m dows whatever they created it would be
00:11:37
a much lower denominator and the
00:11:40
percentage would change i think as well
00:11:41
i'm just i'm just reporting what yeah
00:11:43
what cnn is reporting in terms of what
00:11:45
zacco is alleging i just want to get out
00:11:47
on the table cnn broke the story along
00:11:49
with um what other news was washington
00:11:51
post yeah basically what happened is
00:11:53
this guy got fired in january and
00:11:54
started working with these whistleblower
00:11:56
lawyers they put together a big report
00:11:58
and then that report got leaked to the
00:12:00
washington post and cnn as well as
00:12:02
people on capitol hill so that's kind of
00:12:04
what happened here so cnn goes on to say
00:12:07
zacco says he began asking about the
00:12:09
prevalence of bot accounts on twitter in
00:12:12
early 2021 and was told by twitter's
00:12:15
head of site integrity that the company
00:12:17
didn't know how many total bots are on
00:12:19
its platform he alleges that he came
00:12:21
away from conversations with the
00:12:22
integrity team with the understanding
00:12:24
that the company had quote no appetite
00:12:26
to properly measure the prevalence of
00:12:29
bots end quote in part because if the
00:12:31
true number became public it could harm
00:12:33
the company's value and image
00:12:35
so this is again the options to clear
00:12:37
problem that they're
00:12:39
i mean
00:12:40
david you have to agree this guy is
00:12:42
basically speaking on both sides of his
00:12:43
mouth i mean these are both direct
00:12:44
quotes from his complaint so his
00:12:46
complaint at best is very confusing and
00:12:49
a little schizophrenic
00:12:50
well it's also just coming out so
00:12:52
there'll be more data that that comes
00:12:54
from by the way i don't i'm not saying
00:12:55
that i believe him or disbelieve him but
00:12:57
i'm saying if you if you look at the
00:12:58
quotes the quotes aren't the smoking gun
00:13:01
one would want if one was trying to look
00:13:04
i think we have to remember the the
00:13:06
lawsuit has really nothing to do with
00:13:08
this problem the lawsuit really boils
00:13:11
down to one very specific clause which
00:13:13
is the pinnacle
00:13:16
question at hand which is there is a
00:13:17
specific
00:13:18
performance
00:13:21
clause that elon signed up to
00:13:24
right which you know his lawyers could
00:13:26
have struck out and either chose not to
00:13:29
or you know couldn't get the deal done
00:13:31
without and that specific performance
00:13:33
clause says that twitter can't force him
00:13:37
to close at 54.20 a share
00:13:40
and i think the the issue at hand at the
00:13:42
delaware business court is going to be
00:13:44
that because twitter's going to point to
00:13:46
all of these
00:13:47
you know gotchas and disclaimers that
00:13:49
they have around this bot issue
00:13:52
as
00:13:53
their cover story
00:13:56
and
00:13:56
i think that really you know this kind
00:13:59
of again builds more and more momentum
00:14:01
in my mind that the most likely outcome
00:14:04
here
00:14:05
is a settlement where
00:14:07
you have to pay
00:14:09
the economic difference between where
00:14:11
the stock is now and 54 20 which is more
00:14:14
than a billion dollars or
00:14:17
you close at some number below 54
00:14:19
dollars and 20 cents a share
00:14:22
and i think that that is like you know
00:14:23
if you had to be a betting person that's
00:14:25
probably and if you look at the
00:14:27
the way the stock is traded and if you
00:14:29
also look at the way the options market
00:14:31
trades that's what people are assuming
00:14:33
that there's a 7 to 10 billion dollar
00:14:35
swing
00:14:37
and if you impute that into the stock
00:14:38
price you kind of get into the 51 a
00:14:41
share kind of a an acquisition price
00:14:43
again i'm not saying that
00:14:44
that is right or should be right that's
00:14:46
just sort of what the market says
00:14:47
friedberg what's your take on this do
00:14:49
you find this person credible highly
00:14:51
credible and how damaging do you think
00:14:53
this is to twitter independent of the
00:14:56
uh deal to sell the company i think
00:14:58
there's two
00:15:00
tests one is the materiality of what
00:15:02
they've reported so
00:15:03
and really that comes down to just the
00:15:05
um
00:15:07
the endow reported numbers so if there
00:15:09
really is some misstatement knowing this
00:15:11
statement based on what he's saying
00:15:14
that's an issue the other one is the the
00:15:16
duty of care
00:15:18
responsibility of the board meaning
00:15:20
um did the information that he's
00:15:22
providing actually find its way to the
00:15:23
board if it was blocked by management
00:15:27
you know it's it's a judgment call on
00:15:30
you know whether or not management was
00:15:32
trying to deceive or whether they were
00:15:33
trying to investigate and identify more
00:15:36
if the information was brought to the
00:15:37
board and the board did not act then
00:15:39
there's an issue with the boards meeting
00:15:42
their duty of care responsibility as
00:15:44
fiduciaries of the company and that's
00:15:46
really what he did pitch the board at
00:15:48
some point or explain this but not in
00:15:50
writing yeah if what he's claiming
00:15:53
did
00:15:54
not make its way to the board
00:15:57
then it's hard to say that the board was
00:15:59
in breach of their duty of care
00:16:01
if the ceo
00:16:03
and if the ceo blocked it
00:16:05
then there's a question on what then the
00:16:07
ceo can be fired right then there's a
00:16:08
good case for the ceo to be fired i see
00:16:10
so i see you know probably one of three
00:16:13
scenarios here one is you know nothing
00:16:15
happens two is that the board is
00:16:16
actually
00:16:18
violating the which i doubt knowing this
00:16:20
board i mean knowing who's on this board
00:16:22
it's probably more likely that the ceo
00:16:24
or some executives that block this
00:16:26
information from getting to the board
00:16:27
the board then has to act now that they
00:16:29
have the information and they say hey
00:16:30
you blocked this information from
00:16:32
getting to us we need to act and maybe
00:16:34
they removed the the leadership that was
00:16:36
responsible for that sex in terms of
00:16:38
board governance how much of this has to
00:16:40
do with the fact that nobody really
00:16:41
owned on the board any significant
00:16:43
equity
00:16:44
in twitter is that true
00:16:47
yeah i mean i think i mean on the board
00:16:49
was the highest right he owned two or
00:16:50
three percent how much did silver lake
00:16:52
on jack owned silver lake egon's on the
00:16:54
board i mean they're they're they're
00:16:55
owners on the board right
00:16:57
this is
00:16:58
board yeah we're low to be clear zacco
00:17:01
doesn't seem to be pointing his finger
00:17:03
at the board
00:17:04
in fact quite the contrary he's saying
00:17:06
he wasn't allowed to present to the
00:17:07
board in the amount of detail that he
00:17:09
wanted in written form like he wanted so
00:17:11
in a way he seems to be exonerating the
00:17:13
board he is pointing the finger at
00:17:15
twitter executives and the timeline here
00:17:17
is instructive basically what happened
00:17:19
is he was hired by jack dorsey back when
00:17:22
jack was ceo this is in
00:17:25
i think um november of 2020 and at that
00:17:28
time
00:17:29
jack had zacco report directly to him he
00:17:32
actually took responsibility away from
00:17:34
these issues away from prague who was
00:17:37
running engineering gave it to zacco
00:17:39
zacco reported directly to him now fast
00:17:42
forward about a year later
00:17:44
and jack steps down prague's becomes ceo
00:17:48
and then two months later perrog fires
00:17:50
uh zacco and it's in that time period
00:17:53
that couple of months where zacco
00:17:55
alleges that he's prevented from
00:17:58
providing a written report to the board
00:18:00
that twitter executives instruct him to
00:18:03
cherry pick that they basically
00:18:05
um try to
00:18:07
amend this third-party consulting firm's
00:18:09
report in order to make the situation
00:18:11
look better in order to hide the extent
00:18:13
of the company's problems so i think
00:18:15
this is i think the allegations as far
00:18:17
as they go are mainly a problem for
00:18:20
twitter executives and and look i you
00:18:22
know i don't know the truth these things
00:18:23
they're just allegations uh i think this
00:18:25
guy is a respected super sort of white
00:18:28
hat hacker in the cyber community at the
00:18:31
same time i don't know maybe is a bad
00:18:32
manager or maybe there are other reasons
00:18:34
for removing him could be a bad man
00:18:37
yeah and you can't ignore the fact that
00:18:39
under whistleblower laws if twitter gets
00:18:42
fined as a result of these allegations
00:18:44
he could get 30
00:18:45
so listen we don't know the truth of it
00:18:47
however
00:18:49
i do think that this whole thing is a
00:18:51
windfall for elon's case
00:18:54
because it does seem to provide
00:18:56
substantiation
00:18:58
for
00:18:59
elon's assertion that there's a bot prom
00:19:01
at twitter now and a cover-up about it
00:19:03
and a cover-up about it exactly yes and
00:19:05
a cover-up
00:19:06
that would basically potentially
00:19:08
invalidate the company's
00:19:11
sec disclosures on the subject
00:19:13
there's a question there's a question of
00:19:15
law and a question of fact with regard
00:19:17
to elon's case so in other words at the
00:19:19
end of the day what they're going to be
00:19:20
litigating in delaware is a contract
00:19:23
dispute is elon contractually required
00:19:26
to close and elon's assertion is i'm not
00:19:29
because this bot issue so there's a
00:19:31
question of law where if if everything
00:19:33
elon says about the bots is true
00:19:36
is he required to close and i don't know
00:19:38
what the legal ramifications that are
00:19:41
but i think with respect to the question
00:19:42
of fact which is is elon right about the
00:19:45
bot issue there's no question that this
00:19:47
is a bombshell that can only help his
00:19:49
case by the way to your point the
00:19:52
the
00:19:52
the stock was kind of pricing in
00:19:55
a 70 likelihood of this thing closing if
00:19:58
you looked at just how all this stuff
00:19:59
was trading and it went down to 60 once
00:20:01
that whistleblower report came out and
00:20:03
people had a chance to digest it so to
00:20:06
your point it definitely moved the goal
00:20:07
posts a little bit
00:20:08
towards to elon's favor
00:20:11
there is uh you know an important thing
00:20:13
to point out here which stacks just uh
00:20:14
touched on there was a whistleblower
00:20:16
program that was created in 2012 and uh
00:20:19
by the sec uh as part of dodd-frank i
00:20:21
believe or in part of the evolution of
00:20:24
dodd-frank
00:20:25
uh and they've given out now over one
00:20:28
billion dollars in whistleblower awards
00:20:30
these awards come out of the sec fine so
00:20:32
you often wonder like hey they give this
00:20:33
huge se c fine who got it well it turns
00:20:36
out whistleblowers now are massively
00:20:38
incented because if you're a
00:20:39
whistleblower it's a career ending
00:20:41
potentially jason you're not you're not
00:20:43
saying the other part which is when you
00:20:45
go to these organizations to now help
00:20:47
develop a whistleblower lawsuit what has
00:20:49
actually happened is you're not
00:20:50
whistleblowing
00:20:52
moral or ethical breaches you're
00:20:54
whistleblowing things that can come back
00:20:56
to an issue that the sec and the ftc can
00:20:58
make an issue of because that's where
00:20:59
the financial fines come and that's
00:21:01
where the remuneration and motivation so
00:21:03
for example like you could have a
00:21:04
company that's illegally um
00:21:07
i don't know killing dogs horrible
00:21:11
but you know the whistleblower claim
00:21:12
will be about you know their disclosures
00:21:14
in a 10k of how many dogs they killed to
00:21:17
the sec right in this case you know how
00:21:19
many what did they tell the yeah uh and
00:21:21
that's why he gave this to the sec doj
00:21:23
the other interesting wrinkle here and
00:21:25
by the way there's been two the
00:21:26
whistleblower program i did a bunch of
00:21:28
reading on it this week
00:21:29
they also don't disclose who the
00:21:31
whistleblowers are so this isn't a case
00:21:33
where you have to come out like francis
00:21:34
did uh or mudge did you a lot of these
00:21:37
awards are being given quietly so and
00:21:39
there's been two rewards over a hundred
00:21:42
million dollars and they don't say what
00:21:44
the award was based on you know who did
00:21:46
who who the whistleblower is or who the
00:21:48
company is they've been doing this in a
00:21:49
very stealthy way and it seems to be
00:21:52
highly uh effective the big difference i
00:21:54
think with francis compared to this one
00:21:56
is francis just a pm you know who was
00:21:58
not a top five or 10 employee not even
00:22:00
close to that
00:22:02
this is a top five top seven employee
00:22:04
who had access to the board and was
00:22:06
giving reports to the board at least
00:22:07
orally the final point on this i would
00:22:09
like to get everybody's um
00:22:12
commentary on if it is true
00:22:14
that they essentially um
00:22:18
were forced twitter was forced by the
00:22:19
indian government to put a government
00:22:21
agent on the payroll i think agent means
00:22:23
spy how explosive is that and then how
00:22:25
many
00:22:26
that to me is the most important thing
00:22:27
that is not getting nearly enough
00:22:29
coverage it's like you had a government
00:22:31
come to a company that's based in
00:22:33
america
00:22:35
and it's not it's not the united states
00:22:37
government that did it and basically
00:22:38
said we need you to place an agent of
00:22:40
our intelligence services inside of your
00:22:42
company and it seems like they were like
00:22:45
okay where do you want them to sit
00:22:47
now
00:22:48
sacks if that's true
00:22:49
would i wonder if they would be required
00:22:51
to tell the cia and our government that
00:22:53
their arms being twisted
00:22:55
like
00:22:56
this seems unprecedented to me and if
00:22:58
they didn't
00:23:00
well
00:23:01
this is all alleged so but if true sacks
00:23:03
what i think the bigger button over
00:23:04
jason you should also ask the next one
00:23:07
which is if they did it to twitter which
00:23:08
is kind of small
00:23:10
what about the big honeypots of users
00:23:12
google
00:23:14
apple google facebook
00:23:17
tick tock snap and what about
00:23:19
countries outside of just india what
00:23:22
about
00:23:23
the united states no i mean what about
00:23:25
the united states
00:23:27
uh well yeah we have access to the stuff
00:23:29
you know through the courts there's
00:23:30
supposed to be a process
00:23:32
the process is you go to court and you
00:23:34
get a warrant not that it's a high bar
00:23:36
but
00:23:36
a prosecutor has to go show probable
00:23:39
cause and get a search warrant present
00:23:40
it to the company and then they turn
00:23:42
over the data
00:23:43
this you're right it's explosive in the
00:23:46
sense that what they're saying is that
00:23:48
these government agents this is what
00:23:50
zacco says according to time magazine
00:23:52
the purported agents had direct
00:23:54
unsupervised access to internal
00:23:56
information
00:23:57
which i think means dms when the
00:23:59
accounts are created who owned which
00:24:01
account the ip addresses that's what i'm
00:24:02
guessing they had access to which is you
00:24:06
you do not want to trust me i'm guessing
00:24:07
i'm guessing don't put anything in your
00:24:09
dms folks i'm guessing what it doesn't
00:24:10
mean is the twitter menu in the
00:24:12
cafeteria
00:24:13
yeah no
00:24:15
yeah not that i mean not that anybody's
00:24:17
been to that cafeteria in three years
00:24:19
anyway i mean there's literally
00:24:22
forty seven dollars olive oil they had
00:24:24
direct unsupervised access to the salad
00:24:26
bar
00:24:28
i think i think you can basically
00:24:31
i think you could you have to make an
00:24:32
assumption that if if
00:24:35
governments are doing this to one
00:24:36
company they're doing it to all
00:24:37
companies yeah but you would think
00:24:39
right that you know because
00:24:41
would put up a fight or apple would put
00:24:43
up a fight
00:24:44
but who knows you think they probably
00:24:46
fight when they went into china the
00:24:47
opposite
00:24:49
don't you think they do the opposite
00:24:51
well actually what they did what there's
00:24:52
actually an even sneaker way to do it
00:24:54
what apple did when they went there is
00:24:55
they said we're not providing cloud
00:24:57
services in china uh but all the cloud
00:25:00
services are provided by this
00:25:01
third-party company so then they could
00:25:02
have plausible data that's not what this
00:25:04
is about this is just giving an example
00:25:06
of how you this is understand but i'm
00:25:08
asking you a question do you think
00:25:10
that
00:25:11
uh foreign governments have put pressure
00:25:13
on the largest american tech companies
00:25:15
to place agents and do you think they
00:25:17
exist in there
00:25:18
they've definitely put to the first part
00:25:20
they've definitely put pressure we see
00:25:21
that obviously then the question is
00:25:23
would arg would the would apple or
00:25:26
google do this and not inform the
00:25:28
government or not put up a fight i don't
00:25:29
know well i think it's fair to say that
00:25:31
the the senate intelligence committee is
00:25:33
going to halt
00:25:34
twitter and have like a closed-door
00:25:36
meeting and then the question is you
00:25:37
know will they haul everybody else in
00:25:39
and it's just is i i think what what is
00:25:42
what what is an important question is
00:25:44
is this a duriger kind of business
00:25:46
tactic at the highest levels of every
00:25:48
company and we just don't know it and
00:25:50
are typically not read into it and we
00:25:51
would never know in the absence of this
00:25:53
whistleblower thing and my question is
00:25:55
do does our government know that our
00:25:57
companies are acquiescing to these
00:25:59
governments well that's been a problem
00:26:00
for a long time actually so there was a
00:26:02
op-ed by a microsoft executive talking
00:26:04
about this a number of months back where
00:26:06
the argument was well the government has
00:26:08
to go get a search warrant to get your
00:26:10
data from these companies but these
00:26:11
companies don't put up a fight like they
00:26:12
don't it's they don't challenge the
00:26:14
warrant at all
00:26:16
and why because they don't have an
00:26:17
interest they have an interest in being
00:26:19
cooperative right the article is
00:26:21
basically saying that if you're
00:26:23
the subject of a search warrant meaning
00:26:25
they're going to google to get
00:26:27
information about jason the government
00:26:29
should have a duty to inform jason so
00:26:31
that your lawyers can go challenge it
00:26:33
and that was the legal change that
00:26:35
needed to be made we had this
00:26:36
conversation i think last year
00:26:39
that is a change that should be made
00:26:40
because in the old days when the
00:26:42
government would present you with a
00:26:43
search warrant they'd have to go to you
00:26:45
because all of your documents were in
00:26:47
your possession they would be at your
00:26:48
office they'd be at your house so they
00:26:50
would come knocking in your door give
00:26:51
you the search warrant you could give it
00:26:53
to your lawyer they could challenge it
00:26:54
that doesn't happen anymore now the
00:26:56
government just goes and gives a search
00:26:57
warrant to a big tech company because
00:26:59
your data is in the cloud but their
00:27:01
argument is you don't own that data the
00:27:02
big tech company does the big tech
00:27:04
company has no incentive to fight the
00:27:06
government and they just get access to
00:27:07
all of your data and you don't even know
00:27:09
well you're not an investigator it's not
00:27:10
an argument you agree to that when you
00:27:12
sign their terms of service yeah the
00:27:14
current situation is bad enough that
00:27:16
essentially you have very little
00:27:18
protection and rights over your data but
00:27:21
what's happening here the allegation is
00:27:23
even worse which is that government
00:27:25
operatives are working with the company
00:27:27
in a way that provides them access
00:27:29
without them even getting a search
00:27:30
warrant yeah they can just spy on their
00:27:32
ex-girlfriend their you know
00:27:34
brother-in-law whoever they can just spy
00:27:36
on a celebrity do whatever they want
00:27:39
i'd always assumed that
00:27:41
this was happening covertly meaning like
00:27:43
look if you're a tech company and you
00:27:45
know you have a very bright i don't know
00:27:47
phd on a visa and you hire that person
00:27:50
to work in computer vision i'm just
00:27:51
making this up
00:27:53
how do you really know that that person
00:27:55
is not an agent
00:27:56
of another foreign country and obviously
00:27:58
the overwhelming majority
00:28:01
are not but once you have hundreds or
00:28:04
thousands of people
00:28:07
you know that that you brought into your
00:28:08
company all it takes is one person you
00:28:11
know for example we just saw i think in
00:28:12
apple
00:28:14
there were two people that were just
00:28:16
recently arrested for stealing all of
00:28:18
apple's autonomous um
00:28:21
auto
00:28:22
data and documents and design schematics
00:28:25
and all of that stuff and one of the
00:28:26
guys was um arrested right before he was
00:28:30
trying to fly back to china
00:28:32
and so somehow they figured it out they
00:28:34
were able to get him he was not a us
00:28:35
citizen but then another guy that did it
00:28:37
was a u.s citizen but both were of
00:28:39
chinese origin it just goes to show you
00:28:41
that
00:28:41
the covert nature of industrial
00:28:44
espionage is probably at an all-time
00:28:47
high right and i think that's that's a
00:28:49
risk that
00:28:51
every company has to manage and do the
00:28:52
best that they can but this is different
00:28:54
this is an overt
00:28:56
risk this is just a literature and
00:28:58
saying open the door give us a badge
00:29:00
we're coming in and this is why i think
00:29:02
you have to deal with this case very
00:29:03
delicately and in a different way yeah
00:29:05
uh and for people who don't know google
00:29:07
does what's called the transparency
00:29:09
report twitter also has one so they they
00:29:11
do
00:29:12
try to put out by category search
00:29:15
warrants subpoenas etc
00:29:17
exactly how many warrants they're
00:29:19
getting and the the tech companies are
00:29:22
at least trying to be transparent about
00:29:23
it to the extent they can but this is
00:29:25
going to lead to a lot of people moving
00:29:27
off of the cloud i predict
00:29:29
we're seeing
00:29:30
and in fact apple is now storing your
00:29:32
data
00:29:33
uh and a lot of your privacy information
00:29:35
locally on your phone and if it's
00:29:36
encrypted they can't hand it over as we
00:29:39
saw with the um
00:29:41
the terrorist shooting it was at san
00:29:42
bernardino uh where they couldn't unlock
00:29:44
the phone and they went to the israeli
00:29:46
spy company to do it so
00:29:47
you know i think i think the companies
00:29:49
here at least in the united states want
00:29:50
to defend their users but this is could
00:29:52
be uh make people rethink the cloud and
00:29:55
i've seen a couple of pitches from
00:29:56
startups i think you're confusing issues
00:29:58
of course they're going to try to defend
00:29:59
their users in the united states but
00:30:01
what if you have if you let somebody
00:30:02
into a different country and that's not
00:30:04
as if it's not as if those servers are
00:30:06
not accessible yeah and i'm not
00:30:07
confusing this year i'm just talking
00:30:09
about the united states here for a
00:30:10
minute i do think you're going to see
00:30:11
people buy
00:30:13
many servers to put uh or rent their own
00:30:16
cloud services that are encrypted and
00:30:18
impossible to unlock and so look for
00:30:20
that trend to come or more companies to
00:30:22
encrypt it and say we don't have the
00:30:24
keys to mop so isn't it crazy that like
00:30:26
you know we spent the last 20 years
00:30:28
pushing the cloud and the thing that may
00:30:30
actually unwind the cloud is just the
00:30:33
utter lack of privacy that we all have
00:30:35
now
00:30:36
i've just had like we've just created
00:30:38
these massive honey pots where you know
00:30:41
any state or non-state actor can
00:30:43
essentially just have
00:30:45
an incredibly detailed understanding of
00:30:46
who you are
00:30:48
yep and
00:30:49
why because we weren't willing to pay
00:30:50
five bucks a month for storage
00:30:53
everything needed to be free
00:30:55
i think it's part of isn't this part of
00:30:56
the
00:30:59
philosophy behind decentralized services
00:31:02
that you know it gets crypto
00:31:05
yeah i mean i i don't like using that
00:31:06
term but just decentralized services
00:31:08
where the data doesn't sit on some
00:31:10
centralized
00:31:12
enterprise controlled servers
00:31:14
but the data is distributed either on a
00:31:16
chain or in your phone or in some way
00:31:20
you know your identity your information
00:31:22
your content
00:31:23
isn't uh isn't centrally controlled
00:31:27
and that that fundamental principle may
00:31:28
actually
00:31:29
come to kind of bear over the next
00:31:31
couple of years and decades that
00:31:35
yeah that model is more appropriate for
00:31:36
us for me and therefore the services
00:31:39
that are built that way are gonna win in
00:31:40
the market the challenge is ultimately
00:31:42
how do you finance those because those
00:31:44
services
00:31:45
right i mean they they they don't have
00:31:46
as much of it you have to pay you have
00:31:48
to pay for them you know if you're
00:31:49
willing to pay five or ten dollars a
00:31:51
month for your privacy consumers are
00:31:53
doing it for you i i use the brave
00:31:55
browser in vpns and these are becoming a
00:31:58
major category uh you hear it on podcast
00:32:00
advertising all the time uh duckduckgo
00:32:04
brave vpns are like vpns aren't just for
00:32:07
hackers anymore they're like real like
00:32:09
um
00:32:11
something that i think that's really
00:32:12
important which is that you know over
00:32:14
the last 20 years for all of us we've
00:32:15
been building these products on the
00:32:17
internet we've actually done a little
00:32:18
bit of a disservice because we've
00:32:20
basically created these expectations of
00:32:22
consumer surplus
00:32:24
and we've never given people true sets
00:32:27
of trade-offs we've always said oh
00:32:28
you'll get more and it's essentially
00:32:30
free because we'll back into an
00:32:32
advertising model that that supports us
00:32:34
being able to give you more and more for
00:32:36
free but it turns out that it has some
00:32:38
real consequences and i do think that
00:32:41
not enough of us actually understand why
00:32:43
privacy is important but when you start
00:32:45
to hear these examples and it'll be
00:32:46
important to see what what the true
00:32:48
details of this twitter situation are
00:32:51
i think that the pendulum starts to
00:32:53
swing in the other direction where we
00:32:54
say okay you know what i'll eat out at
00:32:57
chipotle one night a week less and
00:33:00
instead i'm going to reallocate that
00:33:01
money to making sure that i have you
00:33:03
know some amount of privacy you can do
00:33:05
it for 25 bucks a month you know two or
00:33:07
three hundred bucks a year which is a
00:33:08
big number for you know maybe the
00:33:10
average joe but it's it's it's it's
00:33:12
being packaged and bundled
00:33:14
right now so that you're seeing the vpns
00:33:17
the anonymous search engines
00:33:20
the browsers all starting to bundle
00:33:22
they're bundling a set a suite of
00:33:24
services and so i i think this is upon
00:33:26
us now and consumers get it and they
00:33:28
want to protect their privacy so and
00:33:30
apple has said this is going to be our
00:33:32
reason
00:33:33
for you to choose our cloud is that
00:33:35
we're going to put the local settings
00:33:36
we're gonna put your data on your phone
00:33:38
encrypt it we don't have access to it
00:33:41
use use apple for this reason of course
00:33:43
they're also building a multi-billion
00:33:44
dollar ad business at the same time in
00:33:47
apple news and their app store so
00:33:50
there's that i guess we should move on
00:33:52
here we'll we'll see what happens with
00:33:53
this the other big news story
00:33:56
that people are talking about this week
00:33:57
and we talked about i guess last year
00:33:59
was student loan debt relief
00:34:02
interestingly uh about 85 days before
00:34:05
the midterms
00:34:07
joe biden has decided to unilaterally
00:34:10
give 10 to 20k of
00:34:13
debt relief
00:34:14
to people who have student loans you
00:34:17
have to
00:34:18
have under 125 k in yearly income as an
00:34:22
individual 250 as a household
00:34:25
and
00:34:26
the student loan pause program which
00:34:28
happened during covet has been extended
00:34:29
to the end of this year i'm not sure why
00:34:32
there's they explained why
00:34:35
apparently it takes four months for them
00:34:37
to turn on their cobol written software
00:34:40
that runs these loan services mighty so
00:34:43
i'm supposed to change takes more
00:34:44
questions it's gonna take it's gonna
00:34:45
take four months to restart the software
00:34:47
that that calculates your loan balance
00:34:50
and is able to print a bill we're so
00:34:51
incompetent okay anyway you have to
00:34:53
apply for this um
00:34:55
and as we know student loan is student
00:34:56
loan debt is 1.75
00:34:59
trillion uh this is going to cost us
00:35:01
another 300 billion
00:35:03
can't imagine what's going to happen
00:35:04
with this 1020k
00:35:06
people buying nfts and stocks and
00:35:09
housing and we're going to hit the uh i
00:35:11
guess
00:35:12
bloomberg had a report that said that
00:35:15
look we we we passed the inflation
00:35:18
reduction act we talked about it last
00:35:20
week but one of the key pillars of that
00:35:21
is that there's a
00:35:22
300 billion of expected revenues coming
00:35:25
in and we essentially turned around and
00:35:27
just gave that back
00:35:30
to a very very small segment of the
00:35:31
american population
00:35:33
bloomberg's analysis was that it's going
00:35:35
to create somewhere between 0.1 and 0.3
00:35:38
percent extra inflation
00:35:40
on top of all of that
00:35:43
and so you know you really have to ask
00:35:45
yourself like what
00:35:46
what was the white house trying to
00:35:48
accomplish i think number one
00:35:50
they made a campaign promise and so you
00:35:52
know i think biden needed to make sure
00:35:54
that he fulfilled that
00:35:57
but nobody was really happy right the
00:35:59
progressives wanted something extreme
00:36:01
everybody else said you know this is not
00:36:03
really the right thing to do
00:36:06
because it doesn't really solve the sim
00:36:08
the the root cause of what we're dealing
00:36:10
with you know if it would have been much
00:36:11
better if you said hey listen um you
00:36:14
know we're going to make this stuff
00:36:15
expungeable on bankruptcy that would
00:36:17
have been really useful um what happens
00:36:19
if you actually tried to i don't know
00:36:20
you were from the inner city and you
00:36:22
worked your ass off you became a doctor
00:36:23
you have 300 000 in debt but now you're
00:36:26
uh you know a resident and you make 120
00:36:28
6 000. well you know you're you know
00:36:31
you're kind of sol here so there's a lot
00:36:32
of folks that they probably wanted
00:36:35
wanted to help that they didn't help
00:36:37
then there's all the blue collar folks
00:36:38
who are like why why this giveaway only
00:36:41
to these folks then there are the people
00:36:43
that paid off their loans thinking why
00:36:45
did i pay my loans off
00:36:46
then there's the incentives that it
00:36:48
creates for colleges which is well i'm
00:36:50
just going to keep jacking up tuition
00:36:51
because if they did it once they may do
00:36:53
it again
00:36:55
so all of these things i think are sort
00:36:57
of a little bit of
00:36:59
you know uh it's a little bit of a head
00:37:01
scratcher and then the last thing which
00:37:02
we can talk about at the end is
00:37:05
i don't think this is what gets people
00:37:06
out to vote and i don't think it's what
00:37:08
people care about ultimately at the
00:37:10
polls which if there is a political
00:37:11
calculation to make that's important and
00:37:14
specifically
00:37:15
when you look at what happened last
00:37:17
night in a bunch of these districts
00:37:20
every progressive candidate got
00:37:23
absolutely shellacked
00:37:25
they lost across the board and so the
00:37:28
progressive talking points around this
00:37:30
stuff fundamentally when push comes to
00:37:32
shove
00:37:33
doesn't work for democratic voters and
00:37:35
then second
00:37:37
is there was a really hotly contested
00:37:39
seat
00:37:40
which was a democrat versus a republican
00:37:43
i think it's pat ryan versus this guy
00:37:45
mark molinaro
00:37:47
the republican he was leading the entire
00:37:49
way and then this guy won 51-49 and this
00:37:52
is a very centrist down the middle
00:37:54
dem so
00:37:56
all the signs are like this may not have
00:37:58
been the smartest thing to do but i
00:38:00
don't think joe biden had a choice
00:38:01
because he made the promise and he had
00:38:03
to live up to it freeburg is this a fair
00:38:05
thing to do a smart thing to do a
00:38:07
cynical thing to do to buy votes where
00:38:09
do you fall down on this issue this is
00:38:12
absolutely moronic
00:38:14
i think that the fact that
00:38:17
eight million households are eligible
00:38:19
for this relief
00:38:21
and ten to twenty thousand dollars is
00:38:23
relief uh is provided to a a minority of
00:38:26
americans
00:38:28
is uh exactly what jamal said which is
00:38:31
kind of distorted politics at its worst
00:38:35
there
00:38:36
this is a 300 billion dollar bill to the
00:38:38
u.s taxpayer
00:38:40
and the ultimate beneficiary of that
00:38:41
bill while we all might want to say it's
00:38:43
the people that are getting debt relief
00:38:44
that have taken out these student loans
00:38:46
that money was transferred to somewhere
00:38:48
and you know where it was transferred to
00:38:50
university endowments and the profit and
00:38:54
the pockets of for-profit
00:38:56
educational institutions
00:38:58
if there were a free market
00:39:00
for education in the united states and
00:39:02
the government was not involved in the
00:39:04
process of funding and supporting the
00:39:06
educational infrastructure in this
00:39:08
country individual citizens would have
00:39:10
the right and the obligation to make
00:39:12
decisions about whether or not the money
00:39:14
that they're spending on tuition
00:39:16
actually has a positive roi for them by
00:39:19
spending ten thousand or a hundred
00:39:20
thousand dollars am i going to make more
00:39:22
than that much money back when i
00:39:23
graduate and unfortunately we've lulled
00:39:26
our citizenry we've lulled our country
00:39:29
into complacency where that decision and
00:39:31
that calculus is no longer required
00:39:34
because uncle sam is there to give you
00:39:35
all the money you want to go to college
00:39:37
and the hungry money-hungry institutions
00:39:39
that are there to educate you are taking
00:39:41
that money putting it in their
00:39:43
endowments or in the pockets of their
00:39:44
shareholders and at the end of the day
00:39:46
it turns out that that decision may not
00:39:47
have been the best decision and we're no
00:39:49
longer holding ourselves individually to
00:39:52
take responsibility for the decisions
00:39:54
that we've made and we're creating
00:39:56
misincentives because of the government
00:39:58
programs that have been created by
00:40:00
telling people you need to get a higher
00:40:01
education the government is going to pay
00:40:03
for it for you and it doesn't matter if
00:40:05
it does or doesn't work because at the
00:40:06
end of the day if it doesn't work we're
00:40:08
just going to pay it back for you anyway
00:40:09
we'll bail you out and there's a middle
00:40:12
class in the united states of america
00:40:13
that is going to end up paying the tax
00:40:15
bill primarily because that's where most
00:40:17
tax dollars come from
00:40:18
for the minority of people that made a
00:40:20
bad decision and it's not necessarily
00:40:23
their fault they made that decision
00:40:25
because the infrastructure in the system
00:40:27
was set up to tell they were duped yeah
00:40:29
go to college get a good degree it'll
00:40:32
always work having a good life you'll
00:40:33
make more money and the and the reality
00:40:35
is that they aren't and that they don't
00:40:37
the roi for many of these degrees has
00:40:39
been negative
00:40:40
you make less money than you would have
00:40:42
if you were actually in the workforce
00:40:44
earning an on-the-ground experience and
00:40:46
progressing your career you do not need
00:40:48
a degree in philosophy or history or
00:40:50
german studies to be able to go and be
00:40:52
effective in the technology workforce or
00:40:55
in the services workforce and i think
00:40:56
that we're seeing that play out the
00:40:58
biggest challenge now
00:41:00
is if we're going to provide this loan
00:41:01
relief
00:41:02
and not reform the educational
00:41:04
infrastructure and the and the
00:41:05
requirements for whether or not an
00:41:08
educational system is eligible for
00:41:10
support from the federal loan program we
00:41:12
are not actually solving the fundamental
00:41:14
problem we are keeping this gravy train
00:41:16
running and we're not actually getting
00:41:18
to the root cause of where this money is
00:41:19
flowing and this is exactly what happens
00:41:21
i will rehash my point that i've made a
00:41:23
hundred times at the end of empires
00:41:25
everyone sees that the money train is
00:41:27
leaving the station and everyone jumps
00:41:29
and grabs what they can and that's
00:41:31
exactly what's going on we think that
00:41:32
we're a rich nation but we're becoming
00:41:34
complacent and this is unfortunate and
00:41:36
it's a really sad sign i think we need
00:41:37
to fix this educational infrastructure
00:41:39
we need to make eligibility requirements
00:41:41
for whether or not loans are actually
00:41:43
going to have a positive roi for
00:41:44
students and then individuals ultimately
00:41:46
need to be educated on that and made
00:41:47
held accountable to whether or not
00:41:49
they're making the right decisions for
00:41:50
themselves sachs should each american
00:41:52
pay a thousand dollars to let these
00:41:54
eight million people off the hook
00:41:56
because that's what this is going to
00:41:57
cost no of course not i agree with
00:41:59
everything if people say i don't like
00:42:00
you i just gave you the softball of all
00:42:02
softballs no i mean look i think this is
00:42:04
an issue where all four of us are on the
00:42:06
same page i agree with everything that
00:42:07
jamasa and what freeberg said i mean
00:42:09
this bill is unfair or it rewards
00:42:13
relatively well-off college grads over
00:42:15
working class people it's going to add
00:42:17
300 billion to the deficit i mean joe
00:42:19
manchin should feel like a sucker right
00:42:21
now because they just spent the 300
00:42:23
billion of supposed savings that he just
00:42:26
agreed to
00:42:28
i just add it's it's unconstitutional i
00:42:31
mean that the constitution expressly
00:42:33
says no money shall be drawn from the
00:42:35
treasury but in consequence of
00:42:37
appropriations made by law so i don't
00:42:40
understand how biden can even do this by
00:42:43
an executive order i expect this to be
00:42:44
challenged and taken to the supreme
00:42:46
court and i think there's a very good
00:42:48
chance it'll end up like biden's other
00:42:50
executive orders that were ruled
00:42:51
unconstitutional remember there was the
00:42:53
vaccine mandate that he tried to do and
00:42:55
there was the eviction moratorium that
00:42:56
he tried to do and they're both ruled
00:42:58
unconstitutional i think there's a good
00:42:59
chance that this will also be ruled
00:43:01
unconstitutional
00:43:03
and like like you guys mentioned it's
00:43:05
inflationary i mean these are basically
00:43:06
stimmy checks which we don't need right
00:43:08
now and it's going to make tuition go up
00:43:10
because the more government subsidizes
00:43:12
something the more those providers have
00:43:15
an incentive to raise the cost so this
00:43:17
is just a jump the shark moment i think
00:43:19
for policy making the question is why
00:43:21
are they doing it and i think it really
00:43:23
speaks to the nature of the democratic
00:43:26
party today which is the democratic
00:43:28
party has shifted from being
00:43:31
a blue collar sort of more economically
00:43:34
populist party economically left party
00:43:37
to being a professional class that is
00:43:39
college educated culturally left more
00:43:42
woke party and this is the ultimate
00:43:44
example of that where the democratic
00:43:46
party is basically
00:43:47
passing this payoff and giveaway to
00:43:50
their sort of woke college graduates at
00:43:52
the expense of their blue-collar
00:43:54
the blue-collar part of their coalition
00:43:56
and you know a democratic political
00:43:58
scientist that i like to read roy
00:44:00
tuchera just today he had a blog post
00:44:03
called the democrat shifting coalition
00:44:05
where he pointed out that if you look at
00:44:07
polling if you look at the generic
00:44:09
ballot among white college graduates
00:44:12
they favor democrats by 12 points
00:44:14
whereas the white working class which is
00:44:17
say non-college voters they favor
00:44:19
republicans by 25 points so one of the
00:44:21
biggest gaps in the electorate is
00:44:24
college versus non-college that is the
00:44:26
fundamental gap it's bigger than even
00:44:29
you know than any other gap than racial
00:44:31
gaps or anything like that this is
00:44:32
really the key gap in the electorate and
00:44:34
this is a payoff to the basically to the
00:44:37
foot the new foot soldiers of the
00:44:39
democratic party if you think about it
00:44:40
the old
00:44:42
stereotype of a foot soldier of the
00:44:44
democratic party would be a union
00:44:46
representative they were the ones
00:44:47
getting out the vote that person's been
00:44:49
replaced with sort of a woke college
00:44:51
graduate who joins the democratic
00:44:53
socialist of america and they go out and
00:44:55
they're the ones pounding the pavement
00:44:57
and doing the ballot harvesting so
00:44:59
there's been a real change in what this
00:45:00
party is about and i think that's the
00:45:02
explanation for why they're passing this
00:45:05
legislation
00:45:06
and then we'll go to your freebird the
00:45:08
mfas from sarah lawrence college have
00:45:09
taken over the democratic party
00:45:12
well let me ask you guys let me ask you
00:45:13
guys a question yeah when you guys
00:45:15
graduated
00:45:17
uh everyone went to undergrads tomorrow
00:45:19
you went to undergrad in canada right
00:45:21
i have no grad degree
00:45:22
right
00:45:23
but when you guys graduated college
00:45:26
what do you think the ratio 80 20 90 10
00:45:29
50 50 00 100
00:45:31
was the first two years of experience
00:45:33
you guys had in the workforce
00:45:35
versus um the education and knowledge
00:45:37
you you garnered in college how
00:45:39
important 90 percent workforce
00:45:41
90 percent offers first time i went to
00:45:43
school at night so i was working while i
00:45:45
was at school right i went to high
00:45:47
school a hundred and zero i i went to
00:45:49
school university of waterloo that has a
00:45:52
program called co-op where you have to
00:45:54
alternate school and work it takes an
00:45:55
extra year to graduate but you end up
00:45:58
getting 24 months of full-time work
00:46:00
experience so it was the same and you
00:46:02
graduate with a lot less debt i
00:46:04
graduated with half the debt i would
00:46:05
have otherwise sacks i mean do you feel
00:46:07
the same
00:46:08
i mean you wouldn't got a law degree
00:46:10
that's different
00:46:11
i mean look i think that it used to be
00:46:14
the case that people would go get these
00:46:16
degrees and they would take out these
00:46:17
loans because there was a perceived roi
00:46:20
of getting this education and i think
00:46:22
one of the deeper issues we have today
00:46:24
is it's very unclear what the roi is i
00:46:27
mean what is the return on getting a
00:46:29
degree in you know social studies or art
00:46:33
history or frankly some woke studies at
00:46:36
one of these prestigious universities
00:46:37
their graduates go out and they're not
00:46:39
especially qualified for a higher paying
00:46:41
job and actually i think one of the
00:46:43
really revealing parts of this executive
00:46:45
order is not just the debt forgiveness
00:46:48
part we haven't really touched on
00:46:49
there's another provision that caps
00:46:51
repayment levels so basically it says
00:46:53
that the monthly
00:46:54
payments on undergraduate loans be
00:46:56
limited to five percent of monthly
00:46:58
income now who is that the payoff to
00:47:00
that is the payoff to the art history
00:47:02
major from amherst who ends up being a
00:47:04
barista at starbucks you know or
00:47:07
the democratic political operative who
00:47:09
works for the dsa gathering votes i mean
00:47:12
that is who this would be
00:47:14
or the let me give the let me give the
00:47:15
counter argument to you saxon i want to
00:47:17
hear your response to this so the
00:47:18
counter argument is hey listen
00:47:20
the airlines got bailed out for a
00:47:22
trillion dollars you know cumulatively
00:47:24
um
00:47:25
2008 financial crisis 700 billion or
00:47:28
something to that number i'm going to
00:47:29
respond there is a caveat to that which
00:47:31
is we actually made money on that bill
00:47:33
i'm going to respond
00:47:35
okay great and then number three hold on
00:47:37
and number three um me too airlines
00:47:40
banks and then the trump tax break 1.5
00:47:43
billion so why can't a bunch of students
00:47:45
get but 300 billion that is the counter
00:47:49
argument everybody we don't complain
00:47:51
when you know the rich people get
00:47:53
bailouts and the rich corporations and
00:47:55
airlines do but now we're suddenly
00:47:56
complaining about this little pittance
00:47:57
here what's your best response to that
00:47:59
free bird well i'm not saying that's my
00:48:01
position
00:48:02
former uh treasury secretary of the
00:48:04
united states had a tweet storm about
00:48:06
this and he said you know the student
00:48:08
loan issue arises arouses passion
00:48:11
um here are some observations and some
00:48:13
responses there is no analogy with bank
00:48:15
bailouts student loans are grants that
00:48:17
cost the government money the bank
00:48:19
bailouts were loans at premium interest
00:48:22
in which the government actually turned
00:48:24
a profit and it's important to think
00:48:26
about all government services being
00:48:29
infrastructure funding where you are
00:48:31
funding some underlying tubing or
00:48:33
mechanism that allows society and the
00:48:36
economy to progress
00:48:38
versus making up for the dollar mistakes
00:48:40
or decisions that were made in the past
00:48:42
i also have issues not just with this
00:48:45
but with the issues of people buying
00:48:46
homes in coastal cities that they get
00:48:49
bailed out at the price of that home at
00:48:51
the fair market price when a hurricane
00:48:52
hits because they paid a premium taking
00:48:55
on the risk of a hurricane or a flooding
00:48:57
event hitting their home why should the
00:48:59
u.s government and the u.s taxpayer come
00:49:01
in and say you know what i'm going to
00:49:02
reimburse you for the full value of your
00:49:04
home which frankly should have been 50
00:49:06
of what you paid for it because it's
00:49:07
sitting on a coastline and that's a big
00:49:09
problem that we generally have is we try
00:49:11
and use the government as a system for
00:49:14
providing bailouts to make up for past
00:49:16
investment mistakes made by individuals
00:49:18
and businesses and i think that there's
00:49:20
a very clear distinction that you can
00:49:21
make when you decide whether or not a
00:49:24
and we use the term bailout anytime
00:49:25
we're spending money but the reality is
00:49:27
if you're making an investment that has
00:49:29
some payoff for economic growth and for
00:49:32
people and for this country to progress
00:49:34
in some measurable way that is a good
00:49:37
way to assess whether or not that is a
00:49:38
reasonable investment versus saying you
00:49:40
know what i'm covering someone else's
00:49:42
liability and when you do that we're
00:49:44
actually burning money and we're putting
00:49:46
ourselves deeper in a hole as a nation
00:49:48
and making it harder to do the former to
00:49:51
make the infrastructure investments and
00:49:53
make the investments that allow us to
00:49:54
move forward and i think that that's a
00:49:56
really good way to clarify these things
00:49:58
and frankly the list of things that
00:49:59
people say this is fair this this is not
00:50:01
fair yada yada go down that list and ask
00:50:04
yourself that question is it a positive
00:50:06
roi to progress our country forward or
00:50:08
is it a bailout for people that had some
00:50:10
liability they took on that they can't
00:50:12
cover and i think for all those things
00:50:14
that are unfair a really important point
00:50:16
we cannot get caught up in the endless
00:50:19
cycle of making up for other people's
00:50:21
unfair uh um benefits that they got from
00:50:24
this from this government because at the
00:50:26
end of the day that's a road to nowhere
00:50:28
we will burn through everything we have
00:50:30
and everyone will scramble for money and
00:50:32
that's the state that we're in right now
00:50:33
where everyone's raising their hand and
00:50:35
they're seeing 800 billion dollar bills
00:50:37
600 billion bills coveted relief
00:50:40
pandemic relief ppp loan relief and
00:50:42
everyone says well what about me
00:50:45
and at the end of the day everyone's
00:50:46
what about me is going to drive us into
00:50:48
an infinite black hole that we will
00:50:50
never get out of and we have to change
00:50:52
our mindset and take individual
00:50:53
responsibility and recognize that the
00:50:55
dollars that we're spending have to have
00:50:57
an roi for progression of us as a whole
00:51:00
and this is a really dangerous place
00:51:02
that we're in right now
00:51:04
if the education comments okay can i
00:51:06
make can i make it i'm sure you're
00:51:07
making something last question to sex am
00:51:09
i am i too monologue today i feel like
00:51:10
i'm very passionate no no you're doing
00:51:11
great i mean
00:51:12
the fact that you have passion about
00:51:14
something maybe it was an extreme video
00:51:15
game yeah that almond milk gave you a
00:51:17
little bit those cashews
00:51:19
maybe four cashews going forward mean
00:51:21
this is definitely bug this guys this
00:51:22
stuff really bugs me i'll be honest take
00:51:23
it easy on the dates yeah i'm like dude
00:51:25
like this stuff just it makes me feel
00:51:27
like what are we doing it's just uh
00:51:29
did you put chia seeds in your see yeah
00:51:31
that's it was it was it the goji berries
00:51:34
the goji version go easy on the goji
00:51:35
berries that's a super food right there
00:51:37
if you if you have if you have chia
00:51:38
seeds in the morning it's a huge bm
00:51:40
that's about to hit it's just you're
00:51:41
just waiting for the wave to yeah yes i
00:51:43
mean for sure i have two comments
00:51:45
comment number one is i think the thing
00:51:48
that shows that this could have been
00:51:50
better is that it was completely silent
00:51:53
on the ability to expunge your student
00:51:56
loans in bankruptcy the ability to
00:51:58
discharge that is the single biggest
00:52:01
change you could make to the system to
00:52:03
be fair to everybody and introduce a
00:52:06
better roi
00:52:07
risk scoring calculation mechanism
00:52:11
okay so great so this is in all direct
00:52:13
agreement but go ahead and i'll explain
00:52:14
it okay in all debt markets right
00:52:16
whenever you lend money
00:52:18
there is an assumption of risk that
00:52:20
you're taking and that fits on a curve
00:52:22
of highly likely to default zero
00:52:24
likelihood of default and that manifests
00:52:27
in a risk scoring so a fico score but in
00:52:30
the debt markets right and there's these
00:52:31
companies that provide that moody's and
00:52:33
s p they say
00:52:34
you're an investment grade debt you know
00:52:36
you're a triple a plus
00:52:38
you're a junk debt so you're you know
00:52:40
you're a triple b minus or whatever
00:52:42
and depending on where you are you pay
00:52:44
different rates this is the same in car
00:52:47
insurance it's the same in home
00:52:49
insurance it's the same in health
00:52:51
insurance
00:52:53
but in all of those cases if you go
00:52:55
upside down you can declare bankruptcy
00:52:57
and you can discharge those nets
00:52:59
here we don't have that idea so if you
00:53:02
go bankrupt for whatever reason this
00:53:04
debt will stay with you forever which is
00:53:06
deeply unfair second is if you actually
00:53:09
flipped it and you could allow it to be
00:53:10
discharged
00:53:12
then the companies that provided these
00:53:14
loans would be forced to risk score you
00:53:17
and the reason why that would be so
00:53:19
powerful
00:53:20
is that that would then create
00:53:22
the forcing function for universities to
00:53:25
actually deliver what they promise
00:53:28
and so who do you think
00:53:30
is really against the ability to
00:53:32
discharge in bankruptcy it's the
00:53:34
universities and the university
00:53:35
endowments so you know if i were
00:53:37
progressives
00:53:39
the thing that i would have pushed more
00:53:40
than a handout to a few people which by
00:53:43
the way didn't even
00:53:45
you know really scratch the surface of
00:53:47
the debt that they have anyways
00:53:49
and it also served to piss off everybody
00:53:51
else
00:53:52
i would have focused on this bankruptcy
00:53:54
issue because that is a meaningful
00:53:56
lasting change
00:53:57
and the second is why don't you go and
00:53:59
actually get a large portion of this
00:54:01
money from all these university
00:54:02
endowments because the longer that these
00:54:05
folks
00:54:07
run what is effectively a multi-trillion
00:54:10
dollar asset management business
00:54:13
they're always going to treat education
00:54:15
and the roi that comes from it as a
00:54:17
second-class citizen
00:54:19
okay
00:54:20
and that is what i think is wrong and if
00:54:22
you were to just fix this one thing
00:54:25
and then even the threat of actually
00:54:27
confiscating some of the 50 billion
00:54:29
dollars that harvard has or the 49
00:54:31
billion dollars that utimco has you
00:54:33
would start or the ut system has you
00:54:35
would start to see
00:54:37
the seeds of change where administrators
00:54:39
would think to themselves i have to
00:54:42
deliver something of value
00:54:44
because these kids are getting loans
00:54:46
they're going to be risk scored and i
00:54:48
don't want to be the person that's like
00:54:49
a low end borrower right i'm not serving
00:54:52
junk paper to the market i want to serve
00:54:55
people that are going to go and really
00:54:56
drive a huge roi so then saks you'd have
00:54:59
an alignment between the people giving
00:55:01
the loan and perhaps the value of the
00:55:03
degree and so you could say hey we'll
00:55:05
give loans to stem degrees at a
00:55:07
different rate uh or a different number
00:55:10
of them or a different amount of cash or
00:55:12
a different interest rate than we would
00:55:15
for i don't know
00:55:17
getting a degree in philosophy or like i
00:55:19
did psychology right you just give a
00:55:21
different one based on the outcome that
00:55:23
makes total sense to you yes yeah i i've
00:55:26
said well for a long time that we should
00:55:27
be allowing
00:55:29
student debt to be discharged in
00:55:30
bankruptcy just like any other type of
00:55:32
debt just like credit card debt just
00:55:33
like other types of debt jamal's right
00:55:35
that would create
00:55:36
some risk to the underwriter so that
00:55:39
they would have to actually assess
00:55:41
whether this person getting that degree
00:55:43
would be able to repay the debt but you
00:55:45
have to ask the question is it a bug or
00:55:47
a feature that they're trying to remove
00:55:49
market forces and i would argue that
00:55:52
this is deliberate that progressives in
00:55:54
the democratic party
00:55:56
don't want there to be accountability
00:55:58
for what you learn in college why
00:56:00
because as i mentioned it's these
00:56:02
colleges that are putting out the foot
00:56:03
soldiers of the democratic party i mean
00:56:06
listen there's a 37 point gap in party
00:56:09
preference just based on one variable
00:56:12
which is whether you are professional
00:56:14
class or working class meaning college
00:56:16
degree or no college degree and that
00:56:19
spans across different racial groups and
00:56:21
other party lines so the fact of the
00:56:23
matter is that if you
00:56:25
go
00:56:26
to college and get a degree you are much
00:56:28
much more likely to become progressive
00:56:31
now why is that
00:56:33
i think it's because a lot of these
00:56:35
colleges have basically become
00:56:36
re-education camps i mean these are the
00:56:38
woke madrasas
00:56:40
of uh
00:56:54
yes but look these places are worth
00:56:56
madrasas and what do they do they
00:56:58
graduate these people
00:57:00
clerics of our woke theocracy these
00:57:03
people go on and then they go
00:57:05
enforcers become suicide bombers yes
00:57:09
it's not it's not like violent like that
00:57:11
but listen we we look down on some of
00:57:13
these theocratic societies and we don't
00:57:15
realize how like them we are i mean look
00:57:17
these kids who graduate from these woke
00:57:19
madrassas they go off to become the
00:57:20
speech police i mean they go enforce
00:57:23
community moderation at social networks
00:57:26
they become the foot soldiers all right
00:57:28
let me just wake up
00:57:30
no no this is the check out
00:57:32
let me say one thing it's true right how
00:57:34
did you explain it 37 point gap okay so
00:57:38
if you're in the democratic party
00:57:39
listen if you're the democratic party
00:57:41
which is run by woke progressive
00:57:43
political operatives why would you want
00:57:45
to defund the factories that are
00:57:47
brainwashing more young students to
00:57:49
basically join your ranks okay i want to
00:57:51
say two things i want to say two things
00:57:52
one is um i think that the the
00:57:55
university in the college degree
00:57:57
has been used as um a heuristic
00:58:01
uh for progression out of um blue collar
00:58:04
to white collar it says if you get a
00:58:06
hollow and j cal you i know you can
00:58:08
speak to this because you know you come
00:58:10
from a family
00:58:12
that uh that works blue collar and you
00:58:15
know you got a college degree but i
00:58:16
think there is this um uh you know kind
00:58:18
of
00:58:20
assertion in the united states and and
00:58:22
it has now become one could argue a meme
00:58:24
that if you get a college degree you're
00:58:26
no longer blue collar you're now white
00:58:27
collar and the reality is that the
00:58:29
quality of that degree varies greatly
00:58:32
based on where you go the major and the
00:58:34
experience you get to accompany that
00:58:36
degree and as a result you may not
00:58:38
necessarily transfer from blue collar to
00:58:39
white collar but you have the degree you
00:58:41
say you're now white collar and then
00:58:42
you're working a blue collar job with a
00:58:44
hundred and twenty thousand dollars of
00:58:45
debt um and so
00:58:47
that heuristic isn't true
00:58:50
and what we need to examine is why that
00:58:52
heuristic is no longer true and what we
00:58:55
can do about it yeah i mean
00:58:57
secondly secondly i do want to make a
00:58:58
defense for college i think that there
00:59:00
there is a incredible benefit to
00:59:02
broadening individuals exposure to
00:59:05
topics research um and areas that they
00:59:09
may not have naturally been interested
00:59:10
in or that they will not necessarily get
00:59:12
trained in and there is an important
00:59:13
role that that educational
00:59:15
infrastructure has in allowing us to be
00:59:17
a more enlightened populace meaning we
00:59:19
can understand history we can understand
00:59:21
philosophy we can understand the things
00:59:23
that shaped our our world and our
00:59:25
livelihoods and what makes us who we are
00:59:27
today and we can understand the sciences
00:59:29
and the maps that affect us so we can
00:59:30
better understand the world and the
00:59:32
people around us so there is a role but
00:59:34
the real question is how do you
00:59:35
integrate that educational role into a
00:59:38
technical training program or into a
00:59:40
real world development program skills
00:59:42
that that basically make an educational
00:59:44
system more than just a checkbox that
00:59:47
doesn't actually do anything for you but
00:59:49
gives you that exposure accompanied by
00:59:51
and maybe that's the requirement with
00:59:53
you know with federal loans is that
00:59:54
there should be some skill or some i
00:59:56
think i think the minute i think the
00:59:58
minute i don't want to lose the
00:59:59
important breadth of exposure that
01:00:01
college is meant to bring to people
01:00:04
yeah yes and that's valid go ahead chip
01:00:06
off and then i'll wrap up my final
01:00:07
account no i was just going to say i i
01:00:09
really think people do not understand
01:00:11
how how meaningful of a change it would
01:00:14
be if you were able to discharge your
01:00:16
student debt in bankruptcy
01:00:17
it is the most powerful market function
01:00:20
we could create to make these
01:00:22
universities more accountable and
01:00:25
i think if you guys look at my annual
01:00:27
letter i put a chart in there but you
01:00:29
know part of the problem that we have in
01:00:30
these universities these leading
01:00:32
universities is that these have become
01:00:34
graveyards
01:00:36
okay there is a geruntocracy that runs
01:00:38
these things with an iron fist
01:00:41
and as these folks have stayed in these
01:00:43
jobs for enormous amounts of time now 40
01:00:46
50 plus years the average person is in
01:00:48
their mid to late 70s now who are the
01:00:51
administrators of our leading
01:00:52
institutions
01:00:54
they are focused on running up
01:00:55
endowments and they are focused on the
01:00:58
power and the influence that comes with
01:01:00
their position
01:01:01
so i i implore anybody who has any
01:01:05
ability to to actually achieve this
01:01:07
change
01:01:08
there should not be a single logical
01:01:11
person
01:01:12
that should not support
01:01:14
the ability to discharge student debt in
01:01:16
bankruptcy and you will identify
01:01:20
the insider establishment by those that
01:01:23
try to stop you
01:01:25
you will expose them 100 and i just want
01:01:27
to put a closing thing here for the
01:01:28
people listening who have young people
01:01:30
making these decisions when we all went
01:01:32
to college as gen xers college was 9 10
01:01:34
11 000 a year in tuition and if you came
01:01:37
out with 10 or 20k and you had an
01:01:39
average job or a salary of double or
01:01:41
triple that when you graduated it seemed
01:01:43
like a good deal the roi broke now
01:01:46
market forces are at work here i just
01:01:48
want to point out two of them number one
01:01:50
there is a website grow with google you
01:01:52
can just look up right now they're
01:01:54
allowing people to get professional
01:01:56
certificates and this is free
01:01:58
and if you could pull up grow with
01:02:00
google they've identified five different
01:02:02
paths to jobs
01:02:04
one of them is digital marketing and
01:02:05
e-commerce one's it support data
01:02:07
analytics project management and ux
01:02:09
design they have essentially
01:02:12
looked at what's needed in the world and
01:02:14
aligned a three to six months online
01:02:16
course for [ __ ] free that'll get you
01:02:19
a job and you if you have executive
01:02:21
function the ability to sit down shut up
01:02:24
and learn
01:02:25
can do this first before you make the
01:02:27
decision to go a hundred thousand
01:02:28
dollars in debt and then get a 50 000 a
01:02:31
year job here at these jobs average you
01:02:34
know 60 70 80k a year and you can do it
01:02:37
for free the next piece that the private
01:02:39
market is doing you and i looked into
01:02:40
this chamath actually together isas
01:02:42
income sharing agreements uh we were
01:02:45
lucky enough to invest in a company
01:02:46
called maritos they are providing isas
01:02:49
for a college colorado mountain college
01:02:51
for nursing what this means is
01:02:54
they will give you
01:02:55
your tuition for free it's educate now
01:02:57
pay later
01:02:59
you if you go to one of these colleges
01:03:00
for nursing you get educated and then
01:03:02
you pay it back and you're capped at
01:03:04
paying back like two times whatever the
01:03:05
loan is one and a half whatever the
01:03:06
college decides but they take the risk
01:03:09
as opposed to harvard with 40 billion
01:03:11
that takes no [ __ ] risk and so the
01:03:13
free market i think can also solve this
01:03:15
but you have to sit down with your kids
01:03:17
and say let's have an roi calculation
01:03:20
at 20k in debt you know okay fine you
01:03:23
got a philosophy degree by the way sign
01:03:24
off saks final question for you uh i
01:03:27
posted this thing in the group chat but
01:03:29
what do you guys think about this
01:03:31
you know uh republican
01:03:33
tidal wave becoming a republican ripple
01:03:36
that's what uh
01:03:38
yeah that's that's what that's it was it
01:03:40
was an odd set of outcomes don't you
01:03:41
think
01:03:42
i mean biden look biden has had a good
01:03:45
run over the last few weeks um i'm sorry
01:03:48
my audio cut out one more time sex can
01:03:50
you say it again
01:03:51
i'll say it again the second political
01:03:53
report says that the red wave looks more
01:03:55
like a red ripple no i think i think
01:03:57
it's right well look i i think a couple
01:03:59
of things happened so first biden has
01:04:01
got some wins legislatively i don't
01:04:03
think it's good policy i don't think
01:04:04
this executive order is good policy i
01:04:06
don't think the 750 billion of climate
01:04:09
that pretends to be an inflation
01:04:11
reduction act i don't think that's good
01:04:12
policy but nonetheless he has delivered
01:04:15
some goodies for his his base for his
01:04:17
donors and that has basically
01:04:19
ameliorated this story in the press that
01:04:21
democrats are in disarray so you're not
01:04:23
hearing that in addition
01:04:25
i think bain's got two things going for
01:04:26
him jobs and jobs i mean dobbs there's
01:04:29
no question dobbs has helped the
01:04:31
democrats quite a bit
01:04:33
it certainly has motivated their base
01:04:34
and then the jobs report has been strong
01:04:36
look i think overall the economic data
01:04:38
is mixed real wages are not keeping up
01:04:40
with inflation but jobs have so far been
01:04:43
strong so yeah there's no question that
01:04:45
democrats are in a materially better
01:04:46
position they were in june when it
01:04:48
looked like a tsunami that being said
01:04:50
the election's still 10 weeks away and i
01:04:52
think we'll have to see what happens
01:04:54
and i think the economy is still in a
01:04:56
pretty fragile state so 10 weeks is
01:04:59
still a long time but yes you're right
01:05:01
yeah for what's more things are looking
01:05:03
right now things are a lot better for
01:05:04
biden and by the way i do think the
01:05:05
republicans have some issues with
01:05:08
candidate quality
01:05:11
and so there's a couple of races that
01:05:13
you know should have been
01:05:15
more slam dunks and that are not but
01:05:17
what was the first word you used there
01:05:19
you said dobbs and jobs what was the
01:05:20
first
01:05:21
jobs abortion
01:05:22
ah the dobbs case yeah got it got it
01:05:24
okay okay that i just didn't hear it
01:05:26
perfectly weren't a lot of these wins
01:05:28
for biden uh bipartisan
01:05:32
well no the inflation reduction act was
01:05:34
passed on straight party lines this this
01:05:36
uh college loan forgiveness is something
01:05:37
they can't even get through the senate
01:05:39
it's being done as an executive order
01:05:41
the the things that were bipartisan hold
01:05:43
on the things that were bipartisan there
01:05:45
was that chips act where they got some
01:05:46
votes that's great and um and then there
01:05:49
was the guns bill so
01:05:51
um yeah look he did get some bipartisan
01:05:53
wins there's no question about it i
01:05:55
think the republicans
01:05:57
i think the republicans got hoodwinked
01:05:58
basically the republicans foolishly
01:06:03
went along
01:06:04
with infrastructure and with the chips
01:06:06
act they should have forced biden to use
01:06:09
up reconciliation on one of those bills
01:06:11
and then they wouldn't be able to get
01:06:13
through the 750 billion inflation
01:06:15
reduction act so republicans you know as
01:06:17
much of a
01:06:19
sort of
01:06:20
master strategist as mcconnell is
01:06:24
reputed to be they really got snowed on
01:06:26
this one
01:06:28
if it's possible for somebody to
01:06:31
um masturbate themselves from the inside
01:06:33
out jason's doing it right now
01:06:37
there's a reason why we do this from the
01:06:38
chest up okay i think what's likely to
01:06:40
happen in november is still that the
01:06:42
republicans win one of the chambers
01:06:43
probably the house i think the senate is
01:06:45
still up for grabs i don't think it's
01:06:46
over i think that'll be important
01:06:48
because biden won't be able to pass some
01:06:50
of this
01:06:51
legislation that's i think destructive
01:06:54
from a deficit standpoint from an
01:06:56
economic standpoint and we've talked
01:06:57
about in this pod and i don't think you
01:06:59
guys are too excited about most of the
01:07:01
legislation he's passing so
01:07:03
quite frankly i'm just hoping for
01:07:05
gridlock i'd like to get back to a
01:07:06
situation of gridlock less spending
01:07:09
would be certainly great at this point i
01:07:10
mean well if we're trying to fight
01:07:12
inflation here while we keep spending
01:07:14
money over here it's
01:07:15
it's challenging yeah if you want to get
01:07:17
back to
01:07:18
uh fiscal responsibility you you got to
01:07:21
vote for gridlock
01:07:22
or hopefully moderates come all right
01:07:25
we'll uh we'll let sachs go anyway we're
01:07:26
going to go to science anyway and zach's
01:07:28
checks his email during that segment so
01:07:30
by the way there's there's an article
01:07:31
now you know when we talked about quiet
01:07:33
quitting it's now become this huge thing
01:07:35
that everybody's talking about yes and
01:07:37
and what's so funny about quiet quitting
01:07:39
is just yet another example of gen z
01:07:41
again co-opting something we've already
01:07:42
done when we used to do it it was called
01:07:44
coasting and you just be like
01:07:47
rest invest yeah but but now it's called
01:07:50
quiet quitting yeah they're all up in
01:07:52
their feelings do we want to talk about
01:07:54
guy bio uh want to hear about the gut
01:07:56
bio so there was a there was a paper
01:07:58
published
01:08:00
in um
01:08:02
so the journal cell
01:08:04
the paper was done by a research team
01:08:06
out of herzelia so i'll take a step back
01:08:09
the human body is made up of roughly 10
01:08:12
trillion cells
01:08:14
um and there are also somewhere between
01:08:16
10 and 40 trillion bacterial cells that
01:08:19
live in your body primarily in your
01:08:21
small intestine in your and what people
01:08:23
call the gut biome and so this is a
01:08:25
population of microbes bacteria that are
01:08:28
basically chemical factors they eat
01:08:30
stuff up and they spit out chemicals and
01:08:32
those chemicals end up in our body and
01:08:34
it turns out that the gut biome the
01:08:37
bacteria in our gut can actually
01:08:39
regulate our health in a very
01:08:41
significant way and this was the basis
01:08:43
of our company unique you guys can bleep
01:08:45
that out if you want which is now called
01:08:46
supergut and jkl i know you've tried the
01:08:48
product which
01:08:49
is awesome thank you sent me i bought
01:08:51
munique that helped me with my weight
01:08:53
loss and then i just got super gut bar
01:08:55
the principle of that business is that
01:08:56
there is a known product a molecule
01:08:59
amylose that you can feed the gut biome
01:09:02
it doesn't get absorbed by the human
01:09:04
body it sits in the gut biome and the
01:09:06
bacteria in your gut certain types of
01:09:08
bacteria will eat it their population
01:09:10
will grow and other population of bad
01:09:12
bacteria will shrink and the good
01:09:14
bacteria release chemicals called short
01:09:17
chain fatty acids that go into your
01:09:19
blood and reduce your blood sugar and
01:09:21
have a profound effect on on your
01:09:23
metabolism and there are also known gut
01:09:25
bacteria that can regulate your sleep
01:09:28
your mood your anxiety your energy
01:09:30
levels and
01:09:32
your glycemic control the control of
01:09:34
blood sugar so it's an incredible are
01:09:36
you telling me are you telling me that
01:09:38
cialis is a natural compound is it
01:09:41
bacteria
01:09:44
are you saying we have to cancel our
01:09:45
cialis prescriptions oh no
01:09:48
yeah so guys there's there's a known um
01:09:51
there's a known principle that's really
01:09:52
deeply studied now in neurology uh in
01:09:55
neuroscience um uh
01:09:57
called the gut brain axis that you can
01:09:59
actually profoundly affect um disease
01:10:03
and the condition of the brain
01:10:06
and neural conditions by changing the
01:10:08
gut biome and so this is this is
01:10:10
something that's just being studied the
01:10:11
reason it's all coming to light in the
01:10:14
last few years is because of the cost of
01:10:16
dna sequencing we it used to be very
01:10:18
very expensive to sequence the dna from
01:10:21
your gut biome which you do by looking
01:10:22
at your poop and then you know looking
01:10:24
at all the dna that's in the poop and
01:10:25
that tells you what you're good by what
01:10:26
bacteria in your gut that used to cost a
01:10:28
thousand bucks now it costs five bucks
01:10:30
and so in the last couple of years there
01:10:32
is this absolute explosion in research
01:10:34
into the gut microbiome and more
01:10:36
importantly how the gut microbiome
01:10:38
affects human health so this particular
01:10:40
paper looked at the effect that eating
01:10:44
artificial sweeteners had on the gut
01:10:46
biome and on human health
01:10:48
and so what these researchers did
01:10:50
is they um they took 120 people they
01:10:53
gave them nothing or gave them sugar or
01:10:56
gave them saccharin or sucralose or
01:10:58
aspartame or stevia the four most
01:10:59
popular artificial sweeteners and then
01:11:02
they looked at how their gut biome
01:11:03
changed and importantly they looked at
01:11:06
how their glycemic control or ability to
01:11:08
control blood glucose changed blood
01:11:10
glucose as you guys may recall you know
01:11:12
you always have glucose in your blood
01:11:14
the more if you have over you know a
01:11:15
level of 100
01:11:17
you know you can and it persists you can
01:11:19
actually have really bad health effects
01:11:21
and it causes high a1c over time which
01:11:23
is diabetes um and so hot and it stores
01:11:25
more fat when you're spiking and so you
01:11:28
get yeah when when you have high blood
01:11:29
glucose it's actually damaging to organs
01:11:31
it's damaging to cells and over time it
01:11:34
can cause very significant deleterious
01:11:35
effects to the human body that's what
01:11:37
the disease of diabetes is and does is
01:11:39
it's about high blood
01:11:41
high blood sugar blood glucose so what
01:11:43
these guys did is they gave people
01:11:45
uh saccharin sucralose aspartame and
01:11:47
stevia and then measured their blood
01:11:48
glucose and their ability
01:11:50
to convert
01:11:52
sugar in the blood and absorb it and use
01:11:53
it and that's called glycemic control
01:11:56
the way you guys you guys have probably
01:11:57
done this in the doctor you take a
01:11:58
glycemic control test you drink a bunch
01:12:00
of sugar water and they measure your
01:12:02
blood sugar every couple of minutes and
01:12:03
then they show the curve on how
01:12:05
effectively your body can metabolize
01:12:07
that glucose and if it cannot metabolize
01:12:10
that glucose well you have bad glycemic
01:12:12
control and ultimately that is diabetes
01:12:15
and what they found was that if you eat
01:12:18
saccharin and sucralose which we always
01:12:20
assumed were better than sugar
01:12:22
they actually adversely affect your
01:12:25
ability to control um blood glucose
01:12:28
saccharin and sucralose in particular
01:12:30
drive up your blood glucose and makes it
01:12:33
harder for your body to metabolize
01:12:35
glucose out of your blood
01:12:37
aspartame and stevia were relatively
01:12:40
benign
01:12:42
oh really because that's what's in coke
01:12:43
zero that's what i drink there you go
01:12:45
and so so that was kind of the
01:12:46
realization and then they went deep and
01:12:48
they actually analyzed the microbiome
01:12:51
and they showed that there were profound
01:12:52
differences in how these compounds
01:12:55
affected the microbiome it turns out
01:12:57
that sucralose for example is more
01:12:59
likely not being absorbed by your
01:13:00
intestines so it's sitting in the
01:13:02
intestinal walls and the bad bacteria
01:13:04
are eating it and the the good bacteria
01:13:06
that are supposed to be making short
01:13:07
chain fatty acids and all these
01:13:09
chemicals that regulate blood sugar um
01:13:11
have a lower population and so we
01:13:14
actually see a profoundly negative
01:13:15
effect from eating certain compounds
01:13:17
have you shipped your poop to test these
01:13:20
like
01:13:22
yeah
01:13:22
we just did a clinical trial at supergut
01:13:24
by the way and we found uh and we
01:13:26
published it so it's it's public but
01:13:28
wait ha just the audience doesn't even
01:13:30
know the stuff exists in all likelihood
01:13:32
you basically take a poop and you put it
01:13:35
in a vial and you send it and they
01:13:37
analyze your poop i don't mean to be
01:13:38
graphic here but have you done this
01:13:40
before how does this work i i i do it
01:13:42
everywhere i've done it yeah and and i
01:13:44
think it's um look here's here's the
01:13:45
issue jason
01:13:47
i think and i want to i want to say two
01:13:48
things that i think are really important
01:13:49
to say
01:13:50
number one is um
01:13:53
we know very little
01:13:55
about what bacteria do what in your gut
01:13:58
how which we're starting to understand
01:14:00
which ones are beneficial which ones
01:14:01
make good chemicals that your body use
01:14:03
and regulate your cells and regulate
01:14:04
your health and and remember we have a
01:14:06
symbiotic relationship with the bacteria
01:14:08
in our gut they're making chemicals and
01:14:10
they're eating chemicals the chemicals
01:14:12
they make affect our cells the chemicals
01:14:14
they eat affect our body so the way that
01:14:16
we um evolve our health is actually
01:14:18
profoundly affected by our gut biome so
01:14:21
we don't know enough yet to say
01:14:22
definitively this bacteria is good this
01:14:24
bacteria is bad we're starting to have a
01:14:26
good sense of that the second way just
01:14:28
yeah just so you know just to double
01:14:30
down on this like there's a form of
01:14:32
therapy it's experimental but it's
01:14:33
called fecal microbiome
01:14:35
uh transplantation fmt you heard about
01:14:37
us but you know we are finding now that
01:14:40
you can take
01:14:41
feces from healthy individuals that have
01:14:43
good you know gut biome and good
01:14:45
bacterial counts and if you put it you
01:14:47
know injected into people that are
01:14:50
suffering from a bunch of different
01:14:51
diseases it actually is looking like
01:14:53
it's curative so parkinson's ms
01:14:57
ibs colitis
01:14:59
so it just goes to show you that this
01:15:01
that somebody would put a good gut by
01:15:03
but there's
01:15:04
bacteria
01:15:06
into another person's intestines where
01:15:08
do you put the poop it's no you don't
01:15:10
walk through the bum
01:15:11
no no yeah you can do it there or you
01:15:13
can take a pill uh so there's a little
01:15:14
tilt and it's got the the fecal stuff in
01:15:16
it you swallow it and it and it no no
01:15:18
you want to eat somebody else's poop you
01:15:20
give you a picture i said i said it in a
01:15:22
way
01:15:23
so that we could see his reaction to in
01:15:25
the bum and jason was like this
01:15:28
how does this impact your anus that's
01:15:30
what everything the audience wants to
01:15:31
know freyberg how actually your reign is
01:15:34
here's the other point i wanted to make
01:15:35
which ties to what jamal said this is
01:15:37
really important jkl yeah so the gut
01:15:39
biome is an ecosystem like a rainforest
01:15:42
there are trees that grow monkeys climb
01:15:44
the trees they poop there's jaguars
01:15:47
jaguars eat the monkeys the trees grow
01:15:48
because of the monkey poop there's a
01:15:49
whole ecosystem all these organisms all
01:15:52
these microbes regulate one another and
01:15:54
feed one another and this is why
01:15:56
probiotics do not work
01:15:58
probiotics are single microbes single
01:16:01
bacterial strains or fungal strains that
01:16:02
we put into a pill and we swallow it and
01:16:05
just because that microbe happens to
01:16:07
have some beneficial effect you know on
01:16:10
its own in a petri dish it does not
01:16:12
survive in your gut biome because it's
01:16:15
like putting a house cat in a rain
01:16:16
forest the jaguar will eat the house cat
01:16:18
the house cat has nothing to eat etc it
01:16:20
doesn't inoculate inoculate means that
01:16:22
it survives thrives and the population
01:16:24
grows so when we take probiotics it's
01:16:26
just passing right through our gut it
01:16:28
doesn't stay there and doesn't matter
01:16:30
and it turns out that the reason fecal
01:16:32
microbiome
01:16:34
fecal transplants work is because you're
01:16:36
taking the whole microbiome from someone
01:16:38
else's gut and you're putting it in your
01:16:40
gut that's the rain forest the whole
01:16:42
rain forest and so all the organisms
01:16:44
that are needed that self that regulate
01:16:45
one another all of the small molecules
01:16:48
that that regulate that cross regulate
01:16:49
each other they all go in your gut and
01:16:51
then they actually change your entire
01:16:53
gut and your gut becomes the rainforest
01:16:55
of someone else's gut and so if someone
01:16:57
else has a healthy gut meaning
01:17:00
my anus can be uranus jason
01:17:02
wait there it is so we put our anuses
01:17:04
together and then a monkey goes between
01:17:05
them and then the rain forest is well
01:17:07
let me ask you questions the fda has not
01:17:09
approved any of this yet when will the
01:17:11
fda be approving these treatments there
01:17:13
are a lot of there are a lot of clinical
01:17:15
trials going on for fecal transplant
01:17:16
ucsf has a huge clinical trial for ms as
01:17:18
chamath pointed out right now
01:17:21
where they are actually doing fecal
01:17:22
transplants on patients without ms into
01:17:24
people with ms and significant you know
01:17:26
the early data of these sorts of
01:17:28
treatments as indicated that there can
01:17:30
be a very profound effect on the
01:17:32
frequency of lesions appearing on the
01:17:34
brain uh which is one of the primary
01:17:36
symptoms of ms and so these organisms we
01:17:40
don't yet know why but some of them will
01:17:49
it's already coming out there's no it's
01:17:51
not like a binary switch we're
01:17:52
discovering new things there's a cup
01:17:54
there's a set of companies that are
01:17:55
discovering what are called small
01:17:56
molecules so they're finding what are
01:17:58
the little chemicals that those good
01:18:00
bacteria are making in your gut and what
01:18:02
can we turn those chemicals into drugs
01:18:05
and so they're trying to turn those into
01:18:06
drugs other companies are saying you
01:18:08
know what this is a set of good bacteria
01:18:10
let's just put them in your body and
01:18:11
figure out a way to get them to
01:18:12
inoculate and stay other companies are
01:18:14
saying let's do fecal transplants and
01:18:16
other companies are basically just
01:18:17
saying let's change this is what we do
01:18:18
at supergut let's just change the
01:18:20
feedstock for your gut biome and you can
01:18:23
actually evolve the rainforest into a
01:18:25
different state by changing what you're
01:18:27
feeding the bacteria in your gut and
01:18:29
there's certain molecules you can feed
01:18:30
the gut bacteria and then the
01:18:32
populations will change into a more
01:18:33
beneficial state why are people saying
01:18:36
like eating drinking kombucha and
01:18:38
fermented um vegetables pickles whatever
01:18:42
uh apples are like great at fixing your
01:18:45
biome and then taking sugar out is good
01:18:47
for your biome this is another thing i
01:18:49
keep hearing like
01:18:51
people are sick are making
01:18:53
single-point claims like that because
01:18:55
they have invested in a lifestyle and
01:18:57
they want to defend their choices it's
01:18:59
not the same
01:19:00
it's not to say that those things are
01:19:01
bad those are all good but i think what
01:19:03
we know and the fecal transplantation is
01:19:06
the most simple way of pointing this out
01:19:08
is that it's a broad scale holistic
01:19:11
approach that gets the best results so
01:19:12
as you know like if you if you had if
01:19:14
you've had a kid that's had you know
01:19:16
diarrhea for example right you know
01:19:18
sometimes what we'll do now is instead
01:19:20
of giving the kid some sort of diuretic
01:19:22
suppressant what you actually give them
01:19:24
is
01:19:25
a probiotic
01:19:27
right and what you're trying to do is to
01:19:29
reintroduce healthy bacteria into that
01:19:31
child's stomach in a way that allows
01:19:33
them to self-manage and self-heal while
01:19:37
the bad you know
01:19:39
uh diarrhea-causing stuff kind of gets
01:19:41
washed away as an example so
01:19:44
will one thing be a cure-all for you no
01:19:47
i think that you should be very
01:19:48
skeptical of those claims that's why
01:19:50
everybody says a healthy well-balanced
01:19:52
diet is really important because we do
01:19:55
not know
01:19:56
conclusively this is why you know i i
01:19:59
tend to believe that the broad holistic
01:20:01
diet works the best in moderation yep
01:20:04
because you just don't know what you're
01:20:06
not getting we don't know that you know
01:20:09
we don't know you can't say conclusively
01:20:10
that there isn't a form of bacteria that
01:20:13
is created specifically when you consume
01:20:16
animal protein that is extremely helpful
01:20:18
to you we don't know that that's not
01:20:19
true not now we don't know that that is
01:20:21
true either
01:20:22
right
01:20:23
and there's a ton of research going on
01:20:24
to try and figure that out right now
01:20:26
have we figured out any of it though
01:20:27
like yeah yeah this whole genetic ginger
01:20:30
movement yeah we could we could do 12
01:20:31
episodes on this there is so much
01:20:33
amazing discovery happening this is a
01:20:34
good paper to highlight that which is
01:20:36
like hey maybe avoid products that have
01:20:38
saccharine and sucralose in them but my
01:20:41
my big thing is there is no diet
01:20:43
whether it's keto whether it's the south
01:20:46
beach diet whether it's specific
01:20:47
vegetarianism whether it's veganism
01:20:49
nothing is a cure-all for what ails you
01:20:52
there is nothing
01:20:54
and by the way one important point in
01:20:55
this paper one of the points that these
01:20:57
guys highlighted which we see all the
01:20:59
time in microbiome research is that
01:21:01
there are what are called responders and
01:21:03
non-responders that within a population
01:21:05
it's not like everyone that eats
01:21:07
sucralose has the same negative effect
01:21:09
some people have a really negative
01:21:10
effect and some people have a mild to
01:21:12
moderate to neutral effect
01:21:14
and so there's a range of your
01:21:15
particular physiology your particular
01:21:18
gut biome that will respond differently
01:21:20
to different inputs into your body and
01:21:22
that's the most important thing to
01:21:24
figure out because people need to spend
01:21:26
time
01:21:27
eating and sampling to understand what
01:21:30
makes you feel better or worse this is
01:21:31
why i
01:21:32
i have an issue with
01:21:34
you know the broad-based claims of this
01:21:36
path will solve all your problems it's
01:21:38
just not true you have to solve it for
01:21:39
yourself and it's it's through iteration
01:21:41
and then the the the yeah anyways it
01:21:44
does seem like non-processed foods whole
01:21:46
foods things that exist in nature
01:21:49
that seems to me directionally correct
01:21:50
as the way to go and then the fake stuff
01:21:52
and the processed stuff may be less good
01:21:54
for you you agree with that this is why
01:21:56
i think that there there is a little bit
01:21:57
of a scam being run on people who want
01:21:59
to be healthy like for example have you
01:22:01
guys looked at the ingredient list on
01:22:03
oatley you know everybody loves oat milk
01:22:05
but have you looked at the ingredient
01:22:07
list
01:22:08
are you really telling me conclusively
01:22:10
that that is healthier than milk
01:22:12
it's insane
01:22:13
i mean i could tell i could argue both
01:22:15
ways but yeah i mean look at the
01:22:17
chemicals look at the chemicals in a box
01:22:19
of oatly i mean just drink water guys i
01:22:21
can also tell you the chemical name for
01:22:24
every chemical that's in milk which is
01:22:26
all chemical like all everything around
01:22:27
us is chemicals so
01:22:29
i understand i understand natural
01:22:30
chemicals but you understand
01:22:32
synthetically made man-made chemicals
01:22:34
that are explicit that have to be put on
01:22:36
an ingredient list because of its danger
01:22:38
in high quantities should be treated
01:22:40
slightly differently in my opinion all
01:22:41
right yeah i mean olis just gave us
01:22:44
three subpoenas we're all [ __ ] we're
01:22:45
being deposed by holy now
01:22:47
all right everybody we'll see you next
01:22:49
time on the all-in-pot love you boys
01:22:55
[Music]
01:23:04
and they've just gone crazy with it
01:23:09
[Music]
01:23:15
besties
01:23:18
[Music]
01:23:26
we should all just get a room and just
01:23:27
have one big huge orgy because they're
01:23:28
all just useless it's like this like
01:23:30
sexual tension that they just need to
01:23:32
release somehow
01:23:39
we need to get
01:23:40
back
01:23:44
[Music]
01:23:48
i'm going on
01:23:50
[Music]
