00:00:00
I can't see what's on your hat what does
00:00:01
it say super gut one of my most exciting
00:00:04
companies called oh Hollow oh Mahalo I
00:00:06
still have mahalo.com no not Mahalo
00:00:08
unrelated completely unrelated nothing
00:00:10
whatsoever to do with Mahalo I remember
00:00:12
Mahalo great product sorry didn't
00:00:16
work up against you know we were making
00:00:18
10 million dollars in Revenue uh at the
00:00:20
peak yeah about 100 people writing like
00:00:23
human curated search result Pages
00:00:26
look at chat she's doing so well you're
00:00:28
a great guy to reference the chat GPT
00:00:30
thing coming out of that well then what
00:00:32
happened was they did the panda update
00:00:34
and we went from 10 million down to
00:00:37
500 000 in Revenue overnight what was
00:00:40
the panda update they looked at who the
00:00:42
top sites were e Hao Mahalo yeah
00:00:46
Etc and they just said nobody can get
00:00:48
any more than this amount of traffic and
00:00:50
they literally throttled the number of
00:00:52
unique users they would send to you
00:00:54
and that was it game over and um then
00:00:58
everybody I knew at Google wouldn't
00:00:59
return my emails and they were like we
00:01:01
don't have Partnerships
00:01:02
with anybody that's what Matt cutts told
00:01:04
me are you saying that mahalo's lack of
00:01:07
success had nothing to do with the poor
00:01:08
product engine execution it was Google's
00:01:11
malfeasance it got really rave reviews
00:01:13
it was backed by Sequoia so did the
00:01:15
movie but it sucked you know when you
00:01:17
build a company that gets to 10 million
00:01:19
in Revenue in 18 months you can talk for
00:01:21
a month but basically looking at your
00:01:23
resume here I see that you've created
00:01:24
nothing in your entire career
00:01:26
when you get in the arena
00:01:29
the arena and you actually build a
00:01:31
product then you can talk to me I had
00:01:33
the number one blog in the world one of
00:01:35
the top five tech magazines in the world
00:01:36
and this is the number one Tech and
00:01:38
business podcast oh good I touched the
00:01:40
soft spot I got to the warm underbelly
00:01:42
there Jacob so rarely goes after chavoth
00:01:45
when he does it's just gold it's like
00:01:47
it's incredible you're talking to three
00:01:49
founders here chamoth you're the odd
00:01:51
person now so when you want to talk
00:01:52
about product then make one okay so
00:01:55
gross and yet I'm the richest it's so
00:01:57
tilting it must tilt you totally fine so
00:02:00
is Kim Jong-un so's Putin okay there's a
00:02:02
lot of rich people in the world but
00:02:04
these are three products okay dictator
00:02:07
there's your cold open let's go
00:02:14
[Music]
00:02:18
quinoa
00:02:19
[Music]
00:02:25
all right let's get started everybody
00:02:27
it's been a big week there's a lot to
00:02:29
talk about it might be a little bit of a
00:02:31
controversial spicy agenda today here on
00:02:33
the all-in podcast with me again the
00:02:37
Sultan of science who is tearing up the
00:02:40
YouTube comments everybody asking the
00:02:42
Sultan of Silence to contribute more and
00:02:45
to speak more but when he does speak my
00:02:46
Lord he drops those knowledge bombs how
00:02:48
you doing Sultan of science I'm hanging
00:02:50
in there you're hanging in there okay
00:02:52
wow I'm hanging in there man a few words
00:02:55
I guess hanging in there okay great with
00:02:57
us again of course another Android David
00:03:00
sacks sax how are you doing I am doing
00:03:03
fine how are you thank you wait let me
00:03:06
ask GPT what's the question how are you
00:03:09
doing uh let me ask it hold on let me
00:03:10
see what it says I mean basically Chachi
00:03:13
T4 is the ultimate Asperger's equalizer
00:03:16
you guys are gonna benefit most from
00:03:18
this I asked it how are you it says as
00:03:20
an AI language model I don't have
00:03:21
feelings or Consciousness so I don't
00:03:23
experience emotions or states of being
00:03:25
like human does however I'm here and
00:03:27
ready to help you with any questions or
00:03:29
topics you'd like to discuss how can I
00:03:31
assist you today that's pretty similar
00:03:33
to how you feel except you don't offer
00:03:35
to help anybody okay also with us is the
00:03:38
dictator himself here to talk about
00:03:40
topics looking forward to today's
00:03:42
episode and with us the dictator with a
00:03:45
shockingly
00:03:46
shockingly low cut there's only one
00:03:48
button on this shirt only one button
00:03:50
okay made from a tiny albino baby right
00:03:54
here they were like should we put
00:03:55
buttons and they're like no why put
00:03:58
buttons
00:03:59
conservation movement exactly no no no
00:04:02
the one button is what counts that is a
00:04:04
baby albino rhinoceros that was killed
00:04:07
fed to chamoth on his vacation and then
00:04:10
attached to his linen shirt I guess
00:04:13
let's just get this out of the way Trump
00:04:14
was a arraigned I guess is the term he
00:04:17
was charged in New York
00:04:19
with 34 felony counts of falsifying
00:04:21
business records Alvin Bragg alleged
00:04:24
Trump orchestrated catching kill scheme
00:04:26
as well to suppress damaging information
00:04:28
before the 2016 election
00:04:31
of course Trump pleaded not guilty and
00:04:33
did a feisty press conference or speech
00:04:37
rally uh Mar-A-Lago after that
00:04:39
prosecutors say the scheme involve
00:04:40
falsifying business records to conceal
00:04:42
payments to Stormy Daniels we know all
00:04:43
that same thing Michael Cohen went to
00:04:46
jail for the indictment wasn't a
00:04:48
speaking indictment where it explained
00:04:50
all the details so Alvin Bragg hasn't
00:04:52
tipped his cards by explaining in detail
00:04:54
what the legal theories are and which
00:04:56
information he has and he was pretty
00:04:57
clear about that that he was not going
00:04:59
to tip his cards which makes us even
00:05:01
more
00:05:03
hard to understand what's going on and
00:05:04
creates even more divisiveness
00:05:06
predictably the ride is framing this as
00:05:08
a Witch Hunt but surprisingly many on
00:05:10
the left including former sdny head
00:05:12
preet bharara of the amazing podcast
00:05:15
stay tuned with preet which I love
00:05:17
he felt this was the weakest of the four
00:05:19
major investigations that trunk is under
00:05:21
and he expressed some concerns uh on his
00:05:24
podcast that it was light and not
00:05:25
detailed
00:05:27
and he might have not actually pursue
00:05:30
this unless he had a 99 or something
00:05:32
like that chance because it is the
00:05:34
president's
00:05:35
sex I guess everybody's expecting us to
00:05:37
fight over this but to just be a little
00:05:39
preemptive here
00:05:41
as much as I think Trump is like the
00:05:43
most unethical person to ever hold the
00:05:45
office this does seem a little light and
00:05:48
I'm hoping brag
00:05:50
has the goods on him because why bring a
00:05:53
Mr Mina case
00:05:54
you know and these are all I guess
00:05:56
misdemeanors that are being elevated to
00:05:58
felonies because of tax evasion possibly
00:06:01
or election interference so what what
00:06:04
are you Steel Man or just generally
00:06:06
speak about the the case here because I
00:06:08
know that you're a man of Law and Order
00:06:10
well many people on the left are
00:06:13
criticizing this case uh Jonathan Chate
00:06:15
who's a liberal writer for the New York
00:06:17
Magazine wrote a good column about it
00:06:19
and look here are the reasons why number
00:06:21
one the underlying Behavior here is that
00:06:24
Trump engaged in a private settlement
00:06:26
with Stormy Daniels that's not illegal
00:06:29
even if it is you know so-called hush
00:06:31
money that is legal you're allowed to do
00:06:33
that
00:06:34
number two
00:06:36
is that he used personal funds to do it
00:06:39
he did not use campaign funds and this
00:06:42
is why Alvin Bragg has had to make this
00:06:44
kind of distorted ridiculous claim that
00:06:46
he should have used campaign funds to do
00:06:48
it but does anyone believe that if Trump
00:06:51
had used campaign funds that wouldn't be
00:06:54
alleged as the crime so he's kind of
00:06:57
damned if he does damned if he doesn't
00:06:58
here I think that you know what the law
00:07:00
is trying to do with these rules around
00:07:02
campaign funds is protect donors from
00:07:04
Canada's misappropriating them and Trump
00:07:06
had every right to use personal funds to
00:07:08
engage in the settlement it's a major
00:07:10
Distortion of campaign Finance rules
00:07:12
third these campaign financials are
00:07:15
federal laws they're not state laws so
00:07:18
it's not up to Alvin Bragg to enforce
00:07:21
them and in fact the feds looked at this
00:07:23
and decided not to prosecute it because
00:07:25
if they did they'd have to enforce
00:07:28
similar laws against Hillary Clinton
00:07:29
recall
00:07:30
that Hillary Clinton had a problem where
00:07:33
she used campaign funds to fund the
00:07:36
payment to Christopher Steele to write
00:07:38
the Steele dossier
00:07:40
and that was a real problem and it was
00:07:41
miscategorized as legal fees and she had
00:07:44
to pay a fine for that but no one talked
00:07:46
about locking her up over it and no one
00:07:47
was talking about you know indicting her
00:07:49
and sending her to jail and so part of
00:07:51
the reason why I think the feds didn't
00:07:53
want to look at this is because they'd
00:07:55
have to look at similar cases that are
00:07:57
even more egregious and then finally the
00:07:59
last thing is that we're well past the
00:08:00
statute of limitations on this whole
00:08:02
matter
00:08:03
so Alvin Bragg is really out here on the
00:08:06
limb he's past the statue of limitations
00:08:08
he's enforcing laws that are not his
00:08:10
business to enforce they're distorted
00:08:12
interpretations of those laws and the
00:08:14
underlying conduct here is fully legal
00:08:16
so I think everybody is kind of like
00:08:18
wondering why he's doing this and I
00:08:20
think there's two theories either Alvin
00:08:22
Bragg is incredibly stupid which he's
00:08:24
not or he's incredibly smart yeah and
00:08:26
the the sort of three-dimensional chess
00:08:27
explanation that Ann Coulter has is that
00:08:30
this is all a giant Honeypot for
00:08:32
Republicans because they're all rallying
00:08:34
around Trump here because they perceive
00:08:37
I think correctly that he's being
00:08:38
railroaded and he's being he is the
00:08:40
victim of a political prosecution but in
00:08:42
rallying around him to defend him you
00:08:44
see that Trump's poll ratings among
00:08:46
Republicans in the primary are going
00:08:47
through the roof distances are going
00:08:49
down and so what and culture fears is
00:08:52
that this is all elaborate ruse to make
00:08:55
Trump the nominee
00:08:57
because Biden would much rather face a
00:08:59
re-election against Trump than against a
00:09:02
young youthful vigorous Governor like a
00:09:04
DeSantis do you think Bragg has a bunch
00:09:05
of more information and maybe that tax
00:09:08
evasion is the issue he'll go after
00:09:09
because that seems to be the other
00:09:12
Theory here is he's not going to do the
00:09:14
federal you know election stuff he's
00:09:17
going to go after the tax evasion which
00:09:18
is what they already got the Trump
00:09:20
organization on when weisel I guess the
00:09:22
CFO is going to jail for six months it's
00:09:23
going to be hard to connect 1.6 million
00:09:25
fine for that company these are
00:09:27
misdemeanor crimes and to convert them
00:09:30
to a felony the crime needs to have been
00:09:33
done
00:09:33
in the process of aiding and abetting
00:09:36
another crime and tax evasion is the
00:09:39
concept here when he listed the bullet
00:09:42
point list of all of the reasons that or
00:09:45
all of his evidence
00:09:46
it seemed to point to what David said
00:09:48
which was just he's camping Finance
00:09:50
violations yeah this whole thing just
00:09:52
seems like such an enormous waste of
00:09:55
time just think about the amount of
00:09:58
money that will have to be spent on just
00:10:02
securing New York City every time he
00:10:05
shows up
00:10:06
the five-car motorcades the Secret
00:10:10
Service the police the this that the
00:10:12
disruption to people for what really
00:10:15
ultimately I think is right is kind of
00:10:16
like you know it's a bit of like man
00:10:19
this case should have been brought years
00:10:20
ago well not at all in relation to that
00:10:23
they were told to stand down from doing
00:10:25
that because of the you can't indict a
00:10:27
sitting president and that's paused so
00:10:29
that's another legal Theory that's going
00:10:31
to have to be tested Jason the feds
00:10:33
looked at this years ago and they
00:10:34
decided not to press charges they were
00:10:36
told to not do it because he was a city
00:10:38
president no they were no he's been kind
00:10:40
of office now for a couple of years why
00:10:41
didn't they move forward they were that
00:10:43
was the process they were doing so that
00:10:46
takes two years the previous D.A said he
00:10:50
was told to stand down because
00:10:52
decided not to prosecute on the same
00:10:55
underlying offenses that was his
00:10:57
decision he decided not to who who told
00:10:59
him to stand down no one could tell him
00:11:01
to stand down yeah the office of Cyrus
00:11:03
Vance has decided not to move forward
00:11:05
with this very same case when the
00:11:07
statute of limitations had not expired
00:11:09
now it has and Alvin Braggs moved
00:11:11
forward yeah I mean you really have to
00:11:13
stretch here to come up with any kind of
00:11:15
plausibility to this
00:11:17
to this case and I mean you have to
00:11:20
wonder why he's doing it is it just
00:11:22
naked partisanship or are they trying to
00:11:25
make Trump the Republican nominee well
00:11:27
here's what Vance said on Meet the Press
00:11:29
this weekend I was asked by the U.S
00:11:30
attorney's Office in the southern
00:11:31
district to stand down on the
00:11:33
investigation
00:11:34
and they were asked to stand down as
00:11:36
well because of the you can't indict a
00:11:38
sitting president so anyway all this
00:11:40
stuff's going to get done in the wash
00:11:41
I don't think we have to spend too much
00:11:42
time on it because we'll find out I
00:11:45
think in the coming weeks do the
00:11:46
Democrats actually want him to get
00:11:49
convicted then what he's going to be
00:11:51
under house arrest in Mar-A-Lago because
00:11:53
he's not going to be sent to jail and
00:11:54
then what then DeSantis actually will
00:11:56
win the nomination so what exactly is
00:11:58
the perfect outcome which is to create
00:12:00
this theater waste taxpayer resources
00:12:04
only to have Trump acquitted just so
00:12:06
that he can win the nomination and then
00:12:07
he can go against Biden and lose this
00:12:09
seems so far-fetched and idiotic
00:12:11
move on right close this chapter and
00:12:14
move on totally this is ripping the
00:12:16
country apart for no reason and such a
00:12:18
stupid case such a stupid case even the
00:12:21
people who would like to prosecute Trump
00:12:22
like you Jason I think have a problem
00:12:24
with it and one of the reasons why this
00:12:26
is going to be counterproductive even to
00:12:28
the the anti-trump forces is that by
00:12:32
going first with this case yeah Alvin
00:12:34
Bragg is poisoning the well for any
00:12:36
future case they might bring against
00:12:37
Trump because now all future cases
00:12:40
against Trump are going to be seen as
00:12:41
painted with the same brush which is a
00:12:44
nakedly partisan sort of Witch Hunt
00:12:46
there may be other cases out there that
00:12:49
have more validity to them but they're
00:12:51
all going to be seen as of a piece with
00:12:54
this sort of Alvin Bragg uh yes that was
00:12:56
preet's position I think it's a it's a
00:12:58
logical one I don't disagree what do you
00:12:59
think of the other three cases January 6
00:13:01
the interference in Georgia where they
00:13:04
recorded them on tape and then the
00:13:05
stolen documents in the
00:13:07
obstruction of justice or do you think
00:13:09
all four cases are politically motivated
00:13:11
and none of them have any validity to
00:13:12
them sex I mean look the question you
00:13:14
have to ask is if Donald Trump was a
00:13:16
private citizen who never ran for
00:13:17
president would he be the target of any
00:13:19
of these prosecutions I mean he was
00:13:22
you know high profile business figure
00:13:23
for decades and he wasn't prosecuted
00:13:25
like this and so that's really the
00:13:27
question you have to ask and yeah
00:13:29
go to jail Cohen did go to jail for the
00:13:32
same crime so the answer is yes what
00:13:34
Michael Cohen wasn't prosecuted until
00:13:36
after Trump was president what I'm
00:13:37
saying is you asked if
00:13:39
if he was not do you really believe if
00:13:42
he would let me finish you you asked if
00:13:44
if Trump was not a president if he would
00:13:46
have been prosecuted for this crime in
00:13:48
fact another person Michael Cohen was
00:13:49
prosecuted for this crime and did serve
00:13:51
jail time so the answer is yes he would
00:13:52
have been
00:13:53
and they've and they brought these cases
00:13:55
the spanking kind of cases and they
00:13:56
brought the other one for the 1.6
00:13:58
million fine and weasel were going to
00:14:00
jail so I think they would actually but
00:14:02
anyway
00:14:04
do you think all four are politically
00:14:06
motivated is my question to you
00:14:08
or you think anything I can't I don't
00:14:10
want to comment on the other cases until
00:14:12
I see what case is actually made and
00:14:14
what the merits of them are however I
00:14:16
don't believe that all these prosecutors
00:14:18
all over the country be looking at
00:14:19
Donald Trump this way if he was just a
00:14:21
private citizen who never ran for office
00:14:22
and I think we have a big problem in our
00:14:24
political system
00:14:26
when political disagreements are
00:14:28
criminalized and this has been a nasty
00:14:30
Trend that's been going on for many
00:14:32
years it was usually I guess practice
00:14:35
against staffers you know here or there
00:14:38
you'd have some you'd have some
00:14:40
executive branch staffer would you know
00:14:42
find themselves on the wrong end of a
00:14:43
prosecution and they'd end up going to
00:14:45
jail maybe they get pardoned or not but
00:14:47
now it's reached all the way to the the
00:14:49
top and you have presidential candidates
00:14:51
basically being prosecuted and I do not
00:14:53
believe they'd be prosecuted if they
00:14:55
were not major political figures and it
00:14:57
looks really bad for the political
00:15:00
figure who is leading it right now in
00:15:03
the Republican party to be Joe Biden's
00:15:05
opponent in the next election to be
00:15:07
prosecuted by one of Joe Biden's
00:15:09
political allies I mean if this were
00:15:11
happening in some other country the
00:15:13
United States would be criticizing it as
00:15:14
some sort of you know Banana Republic
00:15:16
Type move so this is not the direction
00:15:19
we want our politics to go and and look
00:15:21
I don't I I don't want to disagree Trump
00:15:23
to be the nominee I support a different
00:15:25
candidate but I think that to be
00:15:29
interfering in our elections for Alvin
00:15:32
Brock to be interfering in the political
00:15:34
process this way is a reach and it's
00:15:38
setting a horrible precedent for the
00:15:40
future I mean we're talking about major
00:15:41
presidential candidates
00:15:43
by local DA's I mean why would we want
00:15:46
this so let me ask a follow-up question
00:15:48
then do you the doj is currently
00:15:50
investigating Hunter Biden and then
00:15:52
obviously that goes up to the big guy
00:15:53
with the 10 do you think the doj should
00:15:55
be investigating Hunter Biden or do you
00:15:57
think we should be giving a pass to
00:15:59
presidential
00:16:00
presidents and their families
00:16:03
well the hunter Biden case I mean this
00:16:05
is one where you've got foreign
00:16:07
governments basically paying off Hunter
00:16:08
Biden for political access now that may
00:16:12
ultimately be legal because I think
00:16:15
influence peddling is kind of a business
00:16:17
that takes place all over Washington but
00:16:20
that actually does speak to the
00:16:22
Integrity of our political system
00:16:24
at the end of the day would I send
00:16:26
Hunter by into jail no I don't think so
00:16:28
like I said I don't like criminalizing
00:16:29
political disagreements but what honor
00:16:32
Biden did was definitely pretty shady
00:16:33
and for sure you know and I think Hunter
00:16:37
Biden and Trump and his family are both
00:16:39
shady is my feeling on it we got to get
00:16:41
better candidates in here Nikki Haley
00:16:42
your candidate hmoth raised 11 million
00:16:44
dollars last week she's on fire
00:16:46
Freeburg you want to jump into this and
00:16:48
and touch the third rail you want us to
00:16:49
move on
00:16:51
uh let's move on all right so there's
00:16:54
been a lot of Twitter
00:16:56
back and forth about the D dollarization
00:16:58
and if it's real if it's happening if
00:17:01
it's not last week China and Brazil
00:17:02
struck a deal to trade in their own
00:17:05
currencies uh the Brazilian government
00:17:07
announced the two countries were no
00:17:09
longer use the U.S dollar as an
00:17:10
intermediary I don't know if that's for
00:17:12
everything they trade or for certain
00:17:14
things they're trading it'll be a
00:17:16
straight one for Ray eyes trade China is
00:17:19
the top us rival obviously and Brazil is
00:17:21
one of the largest economies in Latin
00:17:23
America
00:17:24
what are your thoughts generally
00:17:26
speaking Freiburg I know that you have
00:17:27
some exposure here
00:17:30
you know with your company that I think
00:17:32
you spacked recently and you have some
00:17:35
knowledge of the space right well I mean
00:17:36
China and Brazil are pretty sizable
00:17:39
trade partners
00:17:41
I think it's around 150 billion dollars
00:17:43
a year of bilateral trade so
00:17:46
China historically has made a lot of
00:17:48
Investments through their companies in
00:17:51
Railways infrastructure waterways ports
00:17:54
and infrastructure to support
00:17:57
the agriculture manufacturing economies
00:18:01
in Brazil and it's a very deep tie
00:18:04
obviously the closeness of that
00:18:05
relationship China became a bigger
00:18:08
trading partner for Brazil in 2009
00:18:10
surpassing the U.S by the way China has
00:18:13
had similar trading strategies in Africa
00:18:16
in Australia they've bought several
00:18:18
companies in Australia they've made
00:18:20
massive infrastructure Investments the
00:18:22
currency of trade
00:18:25
it's one element of a broader
00:18:29
intertwining that China has kind of
00:18:31
enabled by using its resources to invest
00:18:34
in infrastructure development and then
00:18:36
participating in the economic value and
00:18:37
gain that arises from that it still also
00:18:40
supports the local country the local
00:18:42
population the local economies in a
00:18:44
meaningful way
00:18:46
I think it's worth noting that the
00:18:49
anti-globalization moment that we're
00:18:51
having in the U.S and it may be a longer
00:18:53
term Trend doesn't mean that
00:18:55
globalization and global trade is going
00:18:58
to slow down between China and other
00:19:00
really important well-resourced Nations
00:19:02
around the world so the Brazil China
00:19:04
Summit that happened a week ago
00:19:07
where a lot of Brazilian Executives went
00:19:11
to China and had a very deep
00:19:13
set of dialogues but they also signed a
00:19:15
ton of agreements on trade and also in
00:19:18
some of those cases the trade being done
00:19:20
in non-us dollar denominated currency
00:19:24
it's worth noting as being that if the
00:19:26
U.S does continue to push for
00:19:29
deglobalization
00:19:30
we can only leverage our side of those
00:19:33
relationships China will continue to
00:19:36
make investments continue to develop
00:19:37
trade and continue to develop really
00:19:39
deep tie-ins with countries around the
00:19:41
world
00:19:42
from a resource perspective from an
00:19:44
economic perspective and ultimately The
00:19:46
Leverage will sit with them on what
00:19:47
currency folks are going to trade in so
00:19:50
you know what we're seeing with the
00:19:51
China Saudi discussion around the Petro
00:19:53
Yuan which doesn't seem to be really a
00:19:55
standard thing yet
00:19:57
but we're starting to see inclines of
00:19:58
some deals happening in Yuan but it's
00:20:01
more related to the depth of the Chinese
00:20:02
trade relationship with all these
00:20:04
nations around the world so the more we
00:20:07
kind of as the US think we want to
00:20:10
de-globalize and reduce our trade
00:20:12
relationships with other nations the
00:20:14
more you know we're out of the way in
00:20:15
allowing China to do that I think it's
00:20:17
worth observing that the Chinese economy
00:20:19
will grow the depth of their
00:20:20
relationships will grow potentially the
00:20:22
strength and importance of their
00:20:23
currency will continue to mount as they
00:20:26
build these really deep infrastructure
00:20:28
and investment tie-ins around the world
00:20:29
chamoth what does a party trading in one
00:20:32
do with the one do they buy a bunch of
00:20:34
stuff from China what happens to the one
00:20:37
yeah this whole thing is a huge nothing
00:20:39
Burger this is the third deal that that
00:20:41
China has done the other two countries
00:20:43
are Pakistan and Brazil
00:20:45
and the reason why is I've see like
00:20:47
people on Twitter now breathlessly
00:20:50
rambling on about D dollarization and
00:20:53
all of this stuff and
00:20:55
I think if any of these people would
00:20:57
think from first principles the first
00:20:59
thing that you would know is that the
00:21:01
yuan is pegged to the US dollar
00:21:04
and so as long as it's pegged whether
00:21:06
you trade through the US dollar or you
00:21:09
don't and you directly go to Yuan your
00:21:11
index to the US dollar and then you use
00:21:14
a dollar swap to convert it into the
00:21:16
currency you need so I don't know I
00:21:19
think this is kind of like a lot of
00:21:20
folks who don't really know what's going
00:21:22
on what do you think about the the depth
00:21:24
of China's trade relationship so forget
00:21:26
about the denomination of the currency
00:21:28
but the fact that
00:21:30
um the statistics now is that you can't
00:21:32
find the top trading partner with 120
00:21:35
countries you know they surpassed the US
00:21:37
with many of these countries over the
00:21:39
last you know decade or two in
00:21:41
particular
00:21:42
and continue to increase the the scale
00:21:44
relative to the US where we're kind of
00:21:46
decreasing our dependence on
00:21:48
on Nations and reducing our trading the
00:21:50
reason why China has had
00:21:53
so much dominance as a trading partner
00:21:56
and the reason why China's central bank
00:21:58
has the largest amount of foreign US
00:22:01
dollar reserves about three and a half
00:22:02
trillion dollars is exactly because of
00:22:05
the thing that you want to ignore in
00:22:07
order to have this highfaluting
00:22:08
intellectual conversation
00:22:10
it is pegged to the US dollar and until
00:22:13
it is unpacked in a free-floating
00:22:15
currency we will never know
00:22:17
what the real market clearing price is
00:22:19
and just so China has been able to hold
00:22:22
on China has been very effectively able
00:22:23
to manipulate this currency since they
00:22:26
were brought into the WTO in order to
00:22:29
engender that trading partner status
00:22:32
they were able to
00:22:33
artificially suppress the value of their
00:22:37
currency so that exports from China
00:22:40
could gain Traction in countries all
00:22:43
around the world you have to take into
00:22:45
account this currency Peg and you have
00:22:47
to ask the question
00:22:49
where would the currency be if it wasn't
00:22:51
free-floating and then what would the
00:22:53
incentives be for folks to replace
00:22:56
the dollar
00:22:57
and I think that there's a lot of
00:22:59
interesting questions there that are
00:23:00
worth asking but I think you have to be
00:23:02
a little bit more intellectually honest
00:23:03
to have the discussion and just for
00:23:04
clarity tremath you said they already
00:23:06
have these deals with
00:23:08
Pakistan and Pakistan she met Pakistan
00:23:10
and Russia I think they already have
00:23:12
those deals with those two Pakistan and
00:23:13
Russia
00:23:15
right okay good I just want to make sure
00:23:16
it's clear there sax do you have any
00:23:19
thoughts on this is is this an example
00:23:21
of people just maybe
00:23:23
taking the ray dalio book and it fits a
00:23:25
certain narrative and over hyping it or
00:23:27
do you think this is an actual real
00:23:28
Trend in the world
00:23:30
that to be concerned about I think the
00:23:32
dollarization hasn't happened yet but I
00:23:34
think it's a risk and I think there's a
00:23:36
bunch of reasons why the risk is growing
00:23:40
so first of all we have 32 trillion
00:23:43
dollars in debt someone has to finance
00:23:44
that debt and the bigger that number
00:23:47
gets the more unattractive our debt is
00:23:49
because they're they have to be
00:23:51
concerned that we're eventually going to
00:23:52
monetize The Debt Pay It Back by
00:23:53
printing a bunch of new dollars so
00:23:56
that's Point number one is we have these
00:23:58
massive deficits and debts number two is
00:24:02
that we have I think in the last couple
00:24:05
of years really weaponized the dollar
00:24:08
so if you look at like what we've done
00:24:09
with Ukraine and and Russia we basically
00:24:13
seized
00:24:15
hundreds of billions of dollars of
00:24:17
Russian reserves that were held in
00:24:19
dollars we've excluded them from the
00:24:21
Swift banking system we've imposed
00:24:23
massive sanctions on them and in fact we
00:24:26
now have sanctions on a huge number of
00:24:28
countries all over the world so we're
00:24:30
very sanctioned happy all of which makes
00:24:33
these countries
00:24:35
view the dollar as an unreliable store
00:24:37
of value why would you store your money
00:24:40
in something that can be taken away by
00:24:43
the US and specifically by the state
00:24:46
department so I think this is a major
00:24:49
change in the way that we view the
00:24:51
dollar the last couple years is we're
00:24:52
going to use it as a weapon that again
00:24:54
that makes it
00:24:56
view that's not the first time we've
00:24:57
ever done that right we've done
00:24:58
sanctions against many different we've
00:25:00
done sanctions but as far as I know
00:25:02
we've never seized foreign currency
00:25:03
reserves and excluded a country from
00:25:05
Swift which is the banking system so as
00:25:07
as an instrument of U.S foreign policy
00:25:09
so I mean I could be wrong about that
00:25:11
but this was a major event when it
00:25:13
happened remember we also did stuff like
00:25:16
Seas the the yachts and the the foreign
00:25:19
Holdings of Russian oligarchs remember
00:25:21
there are ill-gotten gains we suddenly
00:25:23
decided they were all gone let me tell
00:25:25
you we didn't think they were ill-gotten
00:25:27
when those Russian billionaires were
00:25:28
buying those Yachts or buying New York
00:25:30
real estate or London real estate or
00:25:32
investing in Facebook or investing in
00:25:35
companies here or buying sports teams or
00:25:38
what have you
00:25:40
hold on we didn't think they were
00:25:42
ill-gotten at the time that they were
00:25:44
actually made and spent but we decided
00:25:46
subsequently we're just going to seize
00:25:48
those things well again if you are
00:25:51
a foreign country or a wealthy person in
00:25:54
a foreign country or decided to decide
00:25:55
where you're going to keep your money
00:25:57
you may not want it to be liable to the
00:26:00
vagaries of U.S foreign policy
00:26:02
so I think all these things do matter
00:26:05
and when you're running the kind of debt
00:26:07
and deficits we have and you're making
00:26:09
the US dollar less attractive you are
00:26:11
running a risk I mean
00:26:13
people we have disagreements with on the
00:26:16
dollar standard because that's good in
00:26:17
terms of power
00:26:18
for us which I think opens us up to a
00:26:21
broader discussion okay just to clarify
00:26:24
this it's not even the dollar standard
00:26:25
right like what this deal was is to use
00:26:28
this thing called sips and sips is the
00:26:31
non-dollar competitor to Swift and so
00:26:35
you settle right
00:26:37
across let's just say you have two
00:26:39
trading partners in two completely
00:26:41
different countries that use a bank in
00:26:43
each of their local areas
00:26:45
they typically swap to Dollars and then
00:26:47
they transfer right using this this
00:26:49
backbone of the financial infrastructure
00:26:51
called Swift
00:26:53
China has built a competitor to it
00:26:55
called sips cips and China's been going
00:26:58
around and signing Folks up makes a ton
00:27:01
of sense right Hey listen if we're
00:27:02
trading between each other let's just
00:27:04
use that so I think it's important to
00:27:06
not paint this with more of a brush than
00:27:08
it should be I'm not saying that D
00:27:10
dollarization couldn't happen
00:27:12
I just think that everybody tries to
00:27:14
take one random data point and conflate
00:27:16
it all together to reinforce a ray dalio
00:27:18
point from a book three years ago I do
00:27:20
think there's a group of catastrophists
00:27:22
who maybe are maybe hoping this happens
00:27:24
or it's a great Twitter fodder I think
00:27:26
we are headed for some sort of
00:27:27
government debt crisis I said that
00:27:29
there's gonna be three prongs to this
00:27:30
financial crisis one was these
00:27:33
long-dated bonds having unrealized
00:27:35
losses which is causing problems in
00:27:37
Regional and Community Banks the second
00:27:39
piece of it's the commercial real estate
00:27:41
crisis which I think is metastizing
00:27:44
right now which is also going to be a
00:27:46
banking crisis once all those unrealized
00:27:48
losses come to you and the third piece
00:27:50
of it is government debt crisis we have
00:27:52
this 32 trillion dollar debt that we're
00:27:55
now having to refinance at much higher
00:27:57
interest rates I read somewhere that
00:27:59
half our government debt so 16 billion
00:28:01
is going to come to you 16 sorry
00:28:04
trillion yeah and it's going to have to
00:28:06
be refinanced in the next three years
00:28:08
the average rate on that debt is 1.7
00:28:11
percent well if you want to refinance it
00:28:14
at 10-year rates you're going to be
00:28:16
looking at somewhere between three and a
00:28:17
half and four percent maybe more so
00:28:19
you're looking at a doubling of the
00:28:21
interest costs and I also read that by
00:28:24
2030 we're going to have over a trillion
00:28:26
dollars of interest expense
00:28:28
owed by the U.S government every year
00:28:30
that is money that's not funding
00:28:32
anyone's Social Security it's not
00:28:33
funding anyone's health care it's not
00:28:35
funding one weapons program
00:28:37
we want it's this event it's going to be
00:28:40
more than a quarter of our total federal
00:28:42
budget yeah and this is where you start
00:28:44
gambling when you're chasing that big
00:28:45
payment you start taking risks this is
00:28:47
also where you have to expect the FED
00:28:48
will really want inflation to stay high
00:28:51
that's sort of what we've said before
00:28:52
the only way out of this mathematically
00:28:54
is to keep rates high but the other
00:28:56
thing David that you when you mention
00:28:57
all of this is what about every other
00:28:59
country if you think that's happening in
00:29:01
the United States I think it's important
00:29:04
to make sure we at least consider every
00:29:06
other major economy because it's not as
00:29:08
if they're pristinely sitting on the
00:29:09
sidelines while this happens to the U.S
00:29:11
this is my whole argument the whole time
00:29:13
which is if you're going to have this
00:29:15
argument
00:29:16
you need to do it thoughtfully and
00:29:18
relatively right because the euro is in
00:29:21
the same amount of trouble
00:29:22
if you look across it's not as if China
00:29:24
is actually sitting pretty and smelling
00:29:27
like roses either every major economy or
00:29:30
trading block in the world is going to
00:29:31
go through this at the same time so it
00:29:33
becomes a relative trade argument and
00:29:35
there I just don't know enough to know
00:29:36
whether the US is poorly positioned
00:29:39
versus Europe or China but it just seems
00:29:42
like you get back to a place where it's
00:29:43
like okay we need to find the flight to
00:29:45
safety what is the canonical flight to
00:29:47
safety if it's not a commodity like gold
00:29:50
it's probably the dollar until it's not
00:29:52
yeah okay Freebird obviously other
00:29:55
countries have even more acute problems
00:29:57
higher debt to GB GDP which means higher
00:30:00
debt payments
00:30:01
just rounding third here on this issue
00:30:03
any final thoughts on the dollarization
00:30:05
and
00:30:07
servicing or debt look it's we're in
00:30:10
trouble
00:30:11
and it's uh it's unclear the timing and
00:30:15
the path but the arithmetic is pretty
00:30:17
simple
00:30:18
in addition to the point Sachs made you
00:30:21
guys saw the news the city of Chicago
00:30:22
has a 44 billion dollar pension hole
00:30:26
that's just the tip of the iceberg on
00:30:28
unfunded pension liabilities
00:30:30
from both state government city
00:30:32
government
00:30:34
even private institutions this is again
00:30:37
hundreds of millions of people worldwide
00:30:40
that are expecting money coming to them
00:30:41
from institutions that ultimately the
00:30:44
federal government of the US is likely
00:30:46
going to have to backstop to some degree
00:30:48
so that's another huge check that's
00:30:50
going to need to be written that the
00:30:52
federal government is inevitably going
00:30:53
to have to write because we're not going
00:30:54
to just let all these people have no
00:30:55
money and become starving
00:30:57
and Social Security right now is
00:30:59
projected to go bankrupt sometime
00:31:01
between 2030 and 2035. so we're gonna
00:31:04
have to write a check
00:31:05
to cover the hole there
00:31:08
plus the interest payment checks what
00:31:11
about your mocks Point Freeburg of like
00:31:13
relatively on that uh
00:31:16
relative to other societies other
00:31:18
countries yeah so the very likely case
00:31:22
is that
00:31:26
relative wealth will decline
00:31:30
so in the near term I think it's
00:31:32
inevitable we have higher tax rates I've
00:31:33
said this before because in order to
00:31:35
kind of Meet The Gap even if we have
00:31:37
these austerity measures or reduce costs
00:31:39
or reduce the budget as the Republicans
00:31:41
are going to push for is this debt
00:31:42
ceiling
00:31:43
debate reaches its apex in uh 60 days
00:31:47
from now which you better believe this
00:31:49
is going to be pretty pretty damn
00:31:50
dramatic
00:31:52
and there's going to be real questions
00:31:53
of what happens if the U.S defaults on
00:31:55
its treasuries if the U.S defaults on
00:31:58
obligations it has on treasuries
00:32:02
there will be a real shift away from
00:32:06
using those assets as the Baseline of
00:32:08
the risk-free rate worldwide what what
00:32:10
the net what the other thing will be I
00:32:12
don't know
00:32:13
I I I'll speak about the challenges I
00:32:15
see with Bitcoin you know if we want to
00:32:17
at some point oh did you hit it but did
00:32:19
it hit a million yet but if you put all
00:32:22
of this together
00:32:24
you're gonna have to Source income
00:32:27
somewhere you're gonna have to take a
00:32:28
piece of the assets and a piece of the
00:32:29
income away from the private citizenry
00:32:32
so you're going to have to tax
00:32:33
and that tax will be used to kind of
00:32:35
fill some of the hole and then more of
00:32:37
the hole will be filled by printing
00:32:39
money
00:32:40
and that will lead to this kind of
00:32:42
inflation of asset values which
00:32:43
ultimately means that the relative cost
00:32:45
of things go up and relative wealth goes
00:32:47
down and I think that's the point to
00:32:50
take note is that anyone who's
00:32:52
concentrated assets is going to have
00:32:53
them effectively
00:33:02
went pretty quickly over a couple of
00:33:04
those examples so just to take that that
00:33:06
Chicago case the numbers I saw in an
00:33:08
article this week I think I was in the
00:33:09
Wall Street Journal was that 80 percent
00:33:12
of the property taxes in Chicago are now
00:33:14
going just to pay for pensions so 80 are
00:33:17
going to pay former workers not current
00:33:20
city workers and moreover those uh
00:33:22
pensions are only 25 percent funded
00:33:25
so they've already over promised by 75
00:33:28
percent benefits that they can't afford
00:33:31
how is this going to work and you saw
00:33:33
that we just had an election there and
00:33:36
rather than fix the problem they voted
00:33:39
for a candidate Brandon Johnson who is
00:33:41
even
00:33:42
softer on crime than Lori Lightfoot
00:33:45
and the reason for that is because the
00:33:48
the government workers unions basically
00:33:50
all supported him
00:33:52
so you have a situation in these blue
00:33:54
cities and states where there's a
00:33:56
massive Civil Service they are the
00:33:58
strongest special interest in local and
00:34:01
state politics they have already taken
00:34:04
huge Appropriations out of the state
00:34:07
budget in the form of these pensions
00:34:08
which aren't even adequately funded we
00:34:10
can barely afford them as they are
00:34:12
should we have pension sacks what do you
00:34:14
think
00:34:16
sure so what what happened in the 1980s
00:34:19
when there was a lot of pension reform
00:34:20
in the private sector As you move from
00:34:23
defined benefit to Define contribution
00:34:26
so you start having more defined
00:34:28
contribution like 401k
00:34:30
the way that these public pensions work
00:34:31
is to find benefits so you know what
00:34:34
they'll do is they'll say that we're
00:34:35
going to take your last year of
00:34:37
employment with the city or state and
00:34:40
whatever your whatever the amount of
00:34:43
money was you made that last year you're
00:34:44
going to get 80 or 90 of it for the rest
00:34:46
of your not just your life but your
00:34:48
spouse's life too and moreover any
00:34:50
overtime you earned it becomes part of
00:34:53
that calculation so everyone knows this
00:34:56
game and so what you see is in their
00:34:57
final year state or city employees will
00:35:00
load up on the overtime they'll earn
00:35:02
twice as much and then 90 of that yeah
00:35:05
they get 90 of that for the rest of them
00:35:07
and their spouse's life we just can't
00:35:09
afford to have rules like that that
00:35:12
don't make any sense and so but the
00:35:13
point is that the benefit that's been
00:35:16
defined Bears no relationship to the
00:35:19
amount of money that's gone into these
00:35:21
pensions right and so you have there's a
00:35:23
simple solution here you have a huge
00:35:24
unfunded liability yeah but to
00:35:26
freeburg's point every blue city and
00:35:28
state in the country is going to have
00:35:30
this problem and who's going to pick up
00:35:32
these expenses you bring up great points
00:35:34
but you just mash them all together in
00:35:36
this mashed potato of random things like
00:35:39
unfunded pension liabilities you won
00:35:42
remember Ray eyes trading and they're
00:35:45
like the same thing they're not the same
00:35:47
thing
00:35:48
they're driven by two different subjects
00:35:50
here but we're talking about listening
00:35:53
amalgam soup an outcome the conversation
00:35:57
classification so I'm just saying like
00:35:58
if these are important topics but I'm
00:36:00
just saying I do think they're motivated
00:36:01
by totally different things
00:36:03
and they're not related as much as we
00:36:06
think they are related I think they're
00:36:07
related let me walk you through how
00:36:09
they're related okay I want to hear how
00:36:10
the real eyes you want trade is
00:36:12
connected to the Chicago pension system
00:36:14
the holes need to be filled so the money
00:36:18
is not going to just not get paid to the
00:36:20
pensioners Social Security is not going
00:36:22
to go away just like we saw in France if
00:36:25
you start to do that you have
00:36:26
Revolutions in the street
00:36:28
there's literally bonfires at
00:36:31
intersections in France in Paris today
00:36:33
because people don't want to wait
00:36:35
another two years before they get their
00:36:36
pension payments so ultimately that
00:36:38
check has to be written when you add up
00:36:40
the column of how much money is not on
00:36:43
the balance sheet today how much
00:36:44
liability is not on the balance sheet
00:36:46
today that is ultimately gonna have to
00:36:47
get paid out and the US government is
00:36:49
going to print money to pay it out it
00:36:52
indicates that there is a higher degree
00:36:53
of uncertainty on whether or not I'm
00:36:55
actually going to get the value back for
00:36:57
the bonds that I'm buying in US dollar
00:36:59
denominated form or that the US dollar
00:37:01
is actually going to be strong enough to
00:37:03
cover the cost or it has enough kind of
00:37:05
you know or has too much volatility
00:37:07
because of this uncertainty and I think
00:37:10
that that's really where people start to
00:37:11
say well maybe the US dollar isn't that
00:37:13
risk-free rate where it's a strong
00:37:14
economy with a great balance sheet great
00:37:17
economic growth there's certainly
00:37:18
extraordinary potential because of the
00:37:20
freedoms that we have to operate in this
00:37:22
country as individuals through the
00:37:24
Enterprise through the Innovation
00:37:25
through the entrepreneurship through the
00:37:26
attraction of talent from all over the
00:37:28
world to come here but at the end of the
00:37:30
day we do seem to have a very big set of
00:37:32
checks that we're going to have to write
00:37:33
and as those you know liabilities start
00:37:35
to mount there becomes a real question
00:37:37
on do I really want to hold dollars
00:37:39
maybe I want to hold something else and
00:37:41
maybe I diversify a little bit and maybe
00:37:43
instead of holding just dollars I also
00:37:44
hold other things and as that starts to
00:37:46
happen you see a little bit of a shift
00:37:47
it's not an overnight thing it's all
00:37:49
catastrophic one or the other but it
00:37:51
starts to bring into question whether
00:37:52
the US dollar is the standard de facto
00:37:55
system that's used for trade around the
00:37:57
world that's the point and sax there is
00:37:59
a solution to this superannuation is
00:38:01
done in the UK and in Australia where
00:38:05
you contribute you're forced to
00:38:07
contribute to your 401k essentially but
00:38:09
you get to learn how to put money away
00:38:12
and you become a little more
00:38:15
you have a little more authority over
00:38:18
your future with these pensions where
00:38:20
you're responsible for saving and you're
00:38:22
kind of forced to save and it seems to
00:38:24
have worked really well in Australia and
00:38:26
other places where people have great
00:38:27
savings and you don't have this major
00:38:29
debt load by the government doing it so
00:38:31
it's something for people to look into
00:38:32
sex did you want to add anything to this
00:38:34
yeah this one to the death just make it
00:38:36
quick yes I don't think we're just
00:38:38
leaving it to death because I think it
00:38:40
is a huge issue I mean look the part of
00:38:41
Chamas argument that I agree with is
00:38:44
that you do have to evaluate the Dollar
00:38:46
on relative terms and you know you can
00:38:49
argue that the US and the dollar it's
00:38:51
it's still the you know let's let's call
00:38:54
it the most eligible bachelor in the
00:38:56
leper colony
00:38:57
um you know nothing started falling off
00:38:59
on the man yet but um but that doesn't
00:39:01
mean that it won't
00:39:03
that's really good that's really good by
00:39:06
the way the first default might be the
00:39:08
nose is falling off you know the
00:39:10
economist herb Stein once said that if
00:39:12
something cannot go on forever it won't
00:39:14
what we're doing right now cannot go on
00:39:16
forever we are running deficits and
00:39:17
debts and unfunded liabilities that we
00:39:20
cannot afford and so it will stop and
00:39:23
the only question is how it stops well I
00:39:26
think there's yeah and it may stop in a
00:39:29
way that is not it's not a voluntary
00:39:33
Choice by us basically you guys want to
00:39:36
make a bet a friendly wager for charity
00:39:38
oh you know what happens in June
00:39:40
I'll make a bet with you guys June you
00:39:42
mean the debt ceiling yeah what what do
00:39:44
you guys think happens you think this is
00:39:45
going to be a fractious chaotic thing
00:39:47
where the markets get roiled no I think
00:39:49
it's going to be a pretty
00:39:51
rubber straightforward deal where
00:39:53
they're gonna it's gonna come down to
00:39:54
the wire but my guess is No One's Gonna
00:39:56
Want to default on the debt yep and
00:39:58
there's going to be some concessions on
00:39:59
spending
00:40:01
and ultimately
00:40:04
the debt ceiling will get extended and
00:40:06
that those concessions on spending will
00:40:08
allow the Republican party to save face
00:40:10
with their voters and say look we we got
00:40:13
some concessions here I'm not sure
00:40:15
they're going to be enough to really
00:40:16
address any of the major problems that
00:40:19
the US is facing over the longer term
00:40:22
but you know certainly letting the
00:40:25
debt ceiling hit and defaulting is
00:40:27
catastrophic I think the majority case
00:40:30
is a bunch of hand ringing and then they
00:40:32
make a concession people that are
00:40:33
interested in this topic I would go use
00:40:35
the way back machine and go and read all
00:40:38
of the articles in the 80s where you
00:40:40
could replace China with Japan
00:40:43
and what happened with Japan is that
00:40:45
Japan just hit a demographic wall not
00:40:48
dissimilar to what China is about to hit
00:40:49
in the next 15 or 20 years right it's a
00:40:51
good counter argument yeah that's a
00:40:53
really good point and I think that there
00:40:54
is this element of you know China as the
00:40:57
primary threat but I think the the
00:40:58
bigger problem chamat is that we have
00:41:00
voted ourselves into a stupor we have
00:41:03
allowed ourselves to accrue these
00:41:06
liabilities that are in many cases not
00:41:09
on the balance sheet that we simply
00:41:11
cannot afford to pay and the social
00:41:13
unrest that will arise what if and when
00:41:15
we don't pay them or the economic cost
00:41:17
of us actually paying them either of
00:41:20
those are going to be pretty significant
00:41:21
but that's under that's water under the
00:41:23
bridge and it has nothing to do with
00:41:24
China it has just everything to do with
00:41:26
how the US is spending thank you for
00:41:28
being intellectually honest this is my
00:41:29
point I agree with you about the
00:41:31
importance of these unfunded liabilities
00:41:33
I just completely disagree with you that
00:41:35
this argument about these things being
00:41:38
so hyper-connected
00:41:40
or that all of a sudden we're at the
00:41:42
Cliff of D dollarization I don't think
00:41:44
it's rooted in facts and I think again
00:41:45
it ignores this unbelievably important
00:41:48
piece of logic that all of you guys that
00:41:50
say this tend to ignore and it's still
00:41:53
in it's not even well addressed in
00:41:54
Dalia's book which is it is a pegged
00:41:57
currency
00:42:00
and the minute you unpack it none of you
00:42:03
know what happens to it except that it
00:42:05
probably isn't where it's trading today
00:42:06
and if you actually didn't have to
00:42:08
factor in dollar reserves that everybody
00:42:10
holds that thing would Skyrocket in
00:42:12
value and it would crush the export
00:42:13
value of the Yuan and it happens to all
00:42:16
currencies and this is this funny thing
00:42:18
that has happened to the United States
00:42:20
which is that it ran forward and it
00:42:23
transitioned its economy to a
00:42:24
service-led economy faster than other
00:42:27
countries and other economies and other
00:42:28
currencies did
00:42:31
and nobody wants to just talk about that
00:42:33
except we're talking about that's what
00:42:36
sort of drives us good sex I don't think
00:42:38
the big risk is that all of a sudden the
00:42:40
dollar gets replaced by the Yuan as
00:42:42
world's Reserve currency I think
00:42:43
Freeburg lays out a more intermediate
00:42:46
path which is people start to hedge
00:42:49
their dollar exposure and decisions that
00:42:52
used to be automatic like trading oil
00:42:54
and dollars you know the so-called Petro
00:42:56
dollar now it becomes a little bit you
00:42:59
know more of a decision so you know the
00:43:01
sounds that's what happened with the
00:43:02
pound sterling it was a similar story
00:43:04
and it was not an overnight collapse I
00:43:06
mean there were certainly these kind of
00:43:07
punctuated moments where there were hits
00:43:09
but you know the history is that there
00:43:11
was a slow devaluation over time and the
00:43:13
you know as a result of obviously the
00:43:15
economic pressure and the uncertainty
00:43:17
actually no what happened to pound
00:43:18
sterling was that it was pegged to the
00:43:20
US dollar and then it became unpegged so
00:43:22
exactly what I'm talking about no even
00:43:23
post that even post that if it's a
00:43:25
free-floating currency yeah
00:43:28
no dude you're proving my point when
00:43:30
Soros broke the back of the US dollar
00:43:31
what he forced George Brown or when he
00:43:33
forced the chancellor of the extractor
00:43:35
could do was to basically depeg the
00:43:37
pound and then yes you're right it's
00:43:39
been like this ever since
00:43:42
yeah that was what I'm saying if you let
00:43:44
it be free-floating nobody wants to
00:43:46
trade in that other currency everybody
00:43:47
wants the dollar
00:43:51
the worst affected leper in the leper
00:43:54
colony
00:43:55
yes we're still in the colony this is
00:43:58
why you have to have if you're going to
00:44:00
be intellectually honest just have a
00:44:01
relative conversation about all of the
00:44:03
currencies and all the things that
00:44:04
they're also going through which are
00:44:06
also not not perfect the debt payments
00:44:08
for the emerging and the frontier
00:44:09
markets are extraordinary and just
00:44:11
realize that if you want to go and Peg
00:44:13
your economy to somebody else's back
00:44:16
they also come with their own trials and
00:44:18
tribulations that you have to risk
00:44:20
manage as well
00:44:21
and now you have to decide on balance do
00:44:23
you want to risk manage a centrally
00:44:25
governed economy
00:44:26
right from a central Bureau or a
00:44:29
freewheeling Democratic like these are
00:44:31
all the discussions yeah there's a lot
00:44:34
of
00:44:35
Trace is there just back to the the
00:44:37
non-currency part of this for a second
00:44:38
there are a lot of like connections
00:44:39
between these things I I actually think
00:44:41
there is a strong connection between
00:44:44
what's happening for example in Chicago
00:44:46
with the out of control civil service
00:44:48
and the unfunded pensions all the way to
00:44:51
the dollar status but there's also a
00:44:53
connection between commercial real
00:44:55
estate and these pensions so on a
00:44:57
previous show we talked about the
00:44:59
commercial real estate
00:45:01
the looming crisis
00:45:03
and a lot of people thought that you
00:45:05
know some of the comments we were just
00:45:06
talking our book which is not true I
00:45:08
don't own I don't have a dollar invested
00:45:11
in these office Towers but you know who
00:45:13
does Pension funds yes who owns these
00:45:16
office Towers so you're talking about
00:45:18
Pension funds that are three-quarters
00:45:20
unfunded and they may have a lot less
00:45:23
funds than they even think they do
00:45:24
because we're about to have a huge
00:45:26
Reckoning where all of a sudden these
00:45:28
office towers that were supposed to be
00:45:30
blue chip that were supposed to have the
00:45:32
Best Collateral there was in major
00:45:35
American cities now all of a sudden they
00:45:38
may not be nearly as valuable as they
00:45:39
thought they were yeah and and if they
00:45:41
don't own the building they definitely
00:45:43
own the debt a hundred percent for sure
00:45:46
in the fixed income portfolios of all
00:45:48
these pension systems are the debt that
00:45:49
was used to finance these buildings by
00:45:52
the REITs and buy you know the big real
00:45:54
estate funds that put those things
00:45:55
together so you're absolutely right they
00:45:56
are a hundred percent impacted by what's
00:45:58
about to happen we're not we're not
00:46:00
going to allow given the civil unrest
00:46:02
and social unrest risk and obviously as
00:46:04
a democracy we're not going to allow
00:46:06
that all to go
00:46:08
to zero and we're not going to let
00:46:09
pensioners not get paid ultimately
00:46:11
that's just a kiss of death maybe
00:46:13
pension payments are reduced to some
00:46:15
degree but again Paris is a really great
00:46:17
example of as you start to try and shift
00:46:20
the economic guarantees that have been
00:46:22
made to pensioners even slightly yeah
00:46:24
what was it two years in retirement
00:46:27
62.62 yeah and it was certainly like you
00:46:30
know you could sit here and argue what
00:46:32
people for years for their whole life
00:46:34
have this expectation set we have all
00:46:37
for our whole careers invested in the
00:46:39
Social Security
00:46:41
benefits that were owed as retirees
00:46:43
through every paycheck that we've
00:46:45
received and those Social Security
00:46:47
payments may not end up coming back to
00:46:49
us if Social Security is a lot to go
00:46:51
bankrupt so ultimately the government
00:46:53
has to set step in and issue new dollars
00:46:56
to make that up then the economic
00:46:58
question is what happens to the value of
00:47:00
the dollar what happens to the value of
00:47:01
the economy and so on as you issue
00:47:03
trillions of dollars to fill these holes
00:47:04
let me ask a um a question that's a
00:47:07
little more positive here perhaps which
00:47:09
is is there a path
00:47:12
out of this
00:47:13
you know debt cycle we're in and what
00:47:16
are the top ways in which we're going to
00:47:19
get ourselves out of this I I have three
00:47:21
that come off the top of my increased
00:47:23
productivity hold on I have three off
00:47:24
the top of my head number one is
00:47:26
austerity measures number two is
00:47:27
productivity through technology and
00:47:30
perhaps number three is maybe uh
00:47:33
recruiting more entrepreneurs here to
00:47:35
start more companies and you know fill
00:47:38
some of these jobs so intelligent
00:47:40
immigration
00:47:42
yeah number one is higher taxes
00:47:49
yeah so look higher taxes because you
00:47:52
can go after assets you can go after
00:47:53
wealth so there will be higher taxes
00:47:55
okay so I still think I still think
00:47:57
we'll end up seeing 70 tax rates on the
00:48:00
wealthiest uh people seventy percent I
00:48:03
don't see I don't see it being like
00:48:05
unpopular I think it's going to be
00:48:07
unpopular with the wealthy it's going to
00:48:08
be popular elsewhere to fill the hole
00:48:10
second is cut back on spending but
00:48:12
that's a really hard thing to do because
00:48:14
you know as we've talked about in the
00:48:15
past people vote to get more stuff so
00:48:18
you put the politician in is going to
00:48:20
vote to get you more stuff you don't
00:48:21
vote people in to go cut spending
00:48:23
so generally you know we're going to
00:48:25
likely see uh number one happen first
00:48:28
maybe there'll be a Reckoning where you
00:48:30
kind of reduce spending it's going to
00:48:31
take extraordinary political will and an
00:48:33
extraordinary depth of education and
00:48:36
diffusion of understanding of this this
00:48:38
key critical economic problem amongst
00:48:40
the voting class uh which is a really
00:48:43
hard thing to realize I think number
00:48:45
three are you saying get the public to
00:48:48
understand to understand that we have to
00:48:50
have austerity measures yeah and then
00:48:52
number three and and basically people
00:48:54
are going to have to make sacrifices so
00:48:56
the first sacrifice will be the wealthy
00:48:58
they're gonna have to sacrifice through
00:48:59
higher taxes the second sacrifice will
00:49:01
be everyone else by seeing reduced
00:49:03
spending and reduce kind of surveys the
00:49:05
services Etc the third is
00:49:08
the hopeful one but we don't have a
00:49:10
guarantee on this which is do we see
00:49:12
economic growth through productivity
00:49:15
gains can we create leverage with our
00:49:17
resources and our people by using new
00:49:19
technologies to get more with less and
00:49:21
so you know anytime yeah like again I
00:49:23
gave the example last time but when a
00:49:25
tractor was introduced in agriculture
00:49:27
all the people that were farming the
00:49:28
ground didn't have a job anymore but
00:49:30
what happened is new jobs emerge in
00:49:31
making tractors and servicing those
00:49:33
tractors in uh you know gas pipelines to
00:49:35
get gas to the tractors all these
00:49:37
economies emerged as a result of that
00:49:39
economic technical Innovation so I think
00:49:41
as we see Ai and other Innovations hit
00:49:43
the market
00:49:44
you know new economies and new
00:49:46
Industries hopefully really Blossom and
00:49:49
and we can benefit from that economic
00:49:51
growth and also lower costs for people
00:49:52
on purchasing goods and services we've
00:49:55
identified four things when Reagan came
00:49:57
in wasn't wasn't the highest tax rate
00:49:59
like like 70 yes yeah that was the top
00:50:02
marginal tax rate 70 and 70 is not
00:50:04
unheard of it will happen again in this
00:50:06
uh in the U.S well and but Reagan
00:50:07
unleash an economic boom by flattening
00:50:10
the tax structure because marginal tax
00:50:12
rates created a disincentive for people
00:50:14
to work and produce more and so there is
00:50:17
a big economic hit from this yeah and
00:50:20
remember what this 1970s were like it
00:50:22
was the malays days of Jimmy Carter we
00:50:24
had a horrible economy with high
00:50:26
inflation and everybody was paying high
00:50:29
tax rates and the government wasn't
00:50:30
making that much revenue because there
00:50:32
wasn't as much economic activity going
00:50:34
on and during the 1980s we had an
00:50:36
economic boom and the government
00:50:37
actually collected more Revenue with
00:50:40
lower tax rates because so much economic
00:50:42
progress was unlocked sex we identified
00:50:46
four things so it's like we've learned
00:50:47
nothing which one is the most important
00:50:49
here which ones are the most important
00:50:50
we talked about austerity we talked
00:50:52
about increasing taxes we talked about
00:50:53
Innovation and efficiency and then we
00:50:55
talked about immigration recruiting more
00:50:57
highly talented people when you look at
00:50:58
those Fords you have any to add to that
00:51:00
list to get out of this and which ones
00:51:02
do you think are the most important and
00:51:03
why when you look at Federal
00:51:06
tax revenue over a 50-year period go
00:51:10
look at the Fred charts what you see is
00:51:13
that
00:51:14
quite independent of the top marginal
00:51:16
tax rate the amount of
00:51:19
Federal receipts that the government's
00:51:20
able to collect is roughly around 19
00:51:23
percent plus or minus two percent
00:51:26
and so you can only get so much blood
00:51:28
from a stone you can try to raise the
00:51:29
top marginal rates but
00:51:31
then rich people have an incentive to
00:51:33
basically find more tax protected
00:51:36
strategies
00:51:37
so the history of this thing going back
00:51:39
to 50 years is you can only extract so
00:51:42
much from taxes and what you're better
00:51:44
off is a lower tax rate that is broader
00:51:47
based and you go for economic growth
00:51:49
that produces more activity but look if
00:51:51
you if you're spending too much there's
00:51:54
no way out of that so austerity
00:51:56
critically important and
00:51:58
Entrepreneurship I mean when Bill
00:51:59
Clinton left office and I I think Reagan
00:52:02
through Clinton was the biggest 25-year
00:52:04
period of economic boom we've ever had
00:52:06
federal spending
00:52:08
as a percentage of GDP was 18 and a half
00:52:11
percent he got it down from like 22
00:52:13
percent and he did it through economic
00:52:14
growth and he bragged about it yep so
00:52:17
you know look where you want to be is I
00:52:20
think federal spending
00:52:22
should be in the low 20s I think you
00:52:25
want tax revenue to be in the High Teens
00:52:28
19 you can have a small deficit those
00:52:30
are the conditions for economic growth
00:52:33
chamoth
00:52:34
any thoughts here on our way out I'm
00:52:37
going to take the complete opposite of
00:52:38
all of this which is the
00:52:41
um anti-chicken little version which is
00:52:43
I think not much at all changes I think
00:52:45
that jet debt to GDP
00:52:49
will continue to rise
00:52:51
not just for us but for every other
00:52:53
country in the world whose fate is worse
00:52:55
than the United States
00:52:57
and I think that on a relative basis the
00:53:01
United States will continue to be
00:53:03
exceptional
00:53:04
and that
00:53:06
this will not really be an issue in our
00:53:08
lifetimes
00:53:10
okay and I'm not saying that's a good
00:53:11
thing
00:53:12
and I'm not saying that's a just thing
00:53:14
and I'm not saying that's what I want to
00:53:16
happen but pragmatically I think that
00:53:20
that's what will happen and I don't
00:53:22
think that there is a magic number
00:53:24
where all of a sudden things start to
00:53:26
break where there's some magic number
00:53:28
for Jet debt to GDP where all of a
00:53:30
sudden everybody finds religion instead
00:53:32
I think that it just creeps higher and
00:53:34
by the way
00:53:35
if you look at where debt to GDP was at
00:53:37
the turn of the 19th century and then
00:53:39
what happened through the World War II
00:53:41
what we've really done is you know we've
00:53:43
retraced a lot as well so there have
00:53:45
been moments where we've been out over
00:53:47
our ski tips a lot
00:53:49
and so I think it's just important to
00:53:51
keep in mind that sometimes
00:53:54
what works just continues to work and I
00:53:57
keep asking myself the relative question
00:53:59
which is what country
00:54:02
what economy what group of human capital
00:54:05
is better positioned in the United
00:54:07
States and despite all of the things
00:54:09
that are screwed up with this country
00:54:10
it's hard to find a better example
00:54:13
so yeah unless you happen to have the
00:54:16
lucky
00:54:17
mineral or oil club like Norway or Saudi
00:54:21
Arabia you're you're going to be
00:54:23
hard-pressed to find a better place to
00:54:24
plant your money and I think
00:54:25
entrepreneurship and immigration are the
00:54:27
two most important things we can do as
00:54:30
well as austerity and I think Joe
00:54:31
manchin is like or these moderate
00:54:33
candidates in the middle who might
00:54:34
actually be able to talk about cutting
00:54:36
but by the way you said something you
00:54:39
said something really interesting which
00:54:40
is if you look at the Norway Saudi Abu
00:54:42
Dhabi what are those countries
00:54:44
effectively becoming by monetizing the
00:54:46
oil they invest in all of the economies
00:54:48
that are working perfect segue thank you
00:54:50
it's not as if the Saudis and Abu Dhabi
00:54:52
and the Norwegians aren't trying to
00:54:54
invest in America
00:54:55
they're trying to put as much money to
00:54:57
work as possible they're just trying to
00:54:59
Pace it out so that they have time
00:55:01
diversity and asset diversity so to your
00:55:03
point Jason so this is a it's sort of a
00:55:05
bit of a self-fulfilling prophecy I
00:55:06
think that what has worked continues to
00:55:09
work and then the burden for disruption
00:55:12
gets higher and higher yeah that changes
00:55:13
there's two things that work in the
00:55:15
world having those natural resources or
00:55:17
having entrepreneurship let's make a
00:55:19
segue here this is the final point on
00:55:22
that oh God we've been final pointing
00:55:23
for 20 minutes here go ahead quick final
00:55:24
point this is an important discussion I
00:55:26
think okay so Adam Smith once said that
00:55:29
there's a great deal of Rune in a Nation
00:55:31
meaning it takes a lot of political
00:55:32
bungling to screw up something as big as
00:55:35
a nation especially a nation that's the
00:55:38
number one superpower in the world that
00:55:39
has the world's Reserve currency so we
00:55:42
are in some ways the beneficiary and
00:55:44
coasting on hundreds of years of
00:55:47
Excellence of economic performance and
00:55:49
great political leadership in this
00:55:50
country and the question to ask is not
00:55:53
whether we can still post on that but
00:55:57
whether the political leadership we have
00:55:59
today is living up to the standard we
00:56:00
had in the past and I think it's clearly
00:56:02
not and the only question is when it
00:56:05
breaks and it's hard to predict exactly
00:56:07
when it's going to break but what I do
00:56:09
believe is that if we keep going the way
00:56:11
we're going it it will have to stop well
00:56:13
said we're definitely bending it right
00:56:15
now and when you bend it sometimes it
00:56:17
breaks right and and by the way the
00:56:19
reason why we are going to pursue AI at
00:56:21
Breakneck speed
00:56:22
even though it may lead to some sort of
00:56:25
weird dystopian future
00:56:27
is because we need that productivity
00:56:29
boost we need a choice now 100 because
00:56:31
we are so frankly better us than the
00:56:33
next guy
00:56:34
whoever gets their first choice another
00:56:37
perfect example Choice two major stories
00:56:39
this week
00:56:40
that we need to discuss the first is
00:56:42
Saudi Arabia's public investment VC arm
00:56:46
took a very interesting PR step of
00:56:48
listing
00:56:50
their funds that they have backed and
00:56:52
it's a significant list everybody from
00:56:55
Andreessen Horowitz to go to not
00:56:57
surprising there and Mark Andreessen and
00:57:01
Ben Horowitz and
00:57:03
Adam Newman had a major keynote at a
00:57:08
Saudi
00:57:09
startup conference I was actually asked
00:57:12
to Keynote the next one in Riyadh which
00:57:14
I'm debating doing
00:57:16
and then in sync with that happening at
00:57:19
the same time there's been a debate of
00:57:21
should
00:57:22
LPS in America
00:57:25
be backing firms like Sequoia China
00:57:28
Matrix China Etc because those firms are
00:57:32
now backing open AI competitors and a if
00:57:36
we believe AI is the big race here uh
00:57:39
should we as a country we don't we're
00:57:41
not allowed to to back military stuff
00:57:43
obviously in these countries but how do
00:57:46
we on this Global chess board decide
00:57:49
should we be taking money from Saudi
00:57:51
should we be investing money in AI
00:57:53
startups in China so I think tremath
00:57:56
you've got a big perspective here
00:57:57
globally let's start with you two
00:58:01
separate issues any surprises here by
00:58:03
Saudi the kingdom actually releasing the
00:58:06
list of who they're backing and why
00:58:07
would they do that at this point in time
00:58:08
and then us investing in China because
00:58:11
we are at a moment here a Crossroads I
00:58:13
think of should we be engaging or not
00:58:16
engaging and Building Bridges with China
00:58:18
and Saudi
00:58:20
you know for obvious reasons look Saudi
00:58:22
Arabia Abu Dhabi all of the UAE these
00:58:25
are countries that are really important
00:58:27
on the world stage and increasingly so
00:58:29
because they manage peace and prosperity
00:58:31
regionally now right they have huge
00:58:35
balance sheets that can accelerate all
00:58:37
kinds of projects all around the world
00:58:40
and so they have to be taken seriously
00:58:42
and so this is a very smart marketing
00:58:44
move
00:58:45
by the pif which is to essentially say
00:58:47
look we are an established Blue Chip LP
00:58:51
of the Blue Chip organizations that
00:58:54
you're used to hearing about and
00:58:55
celebrating
00:58:56
and I think that's very smart of them
00:58:58
because what it does is it reinforces
00:59:01
the feedback loop that other great firms
00:59:03
should be going to them to raise Capital
00:59:05
when it comes time for them to raise
00:59:07
their n plus first fund and so I suspect
00:59:10
especially now it makes even more sense
00:59:13
because everything we've heard Friedberg
00:59:15
mentioned in a couple of episodes ago
00:59:17
the United States limited partner Market
00:59:20
is essentially closed for business they
00:59:22
have huge misallocation problems the
00:59:24
endowments are sort of closed the
00:59:26
universities are closed a lot of the
00:59:27
family offices
00:59:29
are licking their wounds and so this is
00:59:31
a perfect time for folks in Saudi Arabia
00:59:34
and the UAE to basically put the foot on
00:59:36
the gas and basically tell everybody hey
00:59:38
we are open for business
00:59:40
so I think that that makes a lot of
00:59:42
sense
00:59:43
and I think that it'll be successful
00:59:45
it'll work especially in a moment now
00:59:47
where U.S dollar flows from US dollar
00:59:49
limited partners are very difficult and
00:59:53
harder to come by well and we're also
00:59:55
selling billions of dollars in weapons
00:59:57
to the kingdom
00:59:59
and we are a major part of ours are
01:00:01
valuable they're a valuable security
01:00:03
partner of the United States they're
01:00:04
valuable economic partnering the United
01:00:06
States it's no different than doing
01:00:07
business with any other country I think
01:00:09
it's smart by the pif on the other thing
01:00:10
though with U.S firms investing in
01:00:12
China's AI it should not be allowed and
01:00:14
I do think that
01:00:16
the folks that are responsible for
01:00:18
sypheus need to get a handle on this
01:00:20
look I've done a bunch of deals where I
01:00:23
have had to jump through a bunch of
01:00:25
cipius Hoops where explain stuff yes
01:00:27
please so basically cepheus is the
01:00:29
committee on foreign investment in the
01:00:31
United States now what that means is if
01:00:33
folks want to invest in certain things
01:00:35
that are on a list of things and I'll
01:00:37
and I'll tell you the things that I've
01:00:38
been involved with but that came under
01:00:39
cypius rocketry
01:00:41
and certain chip Technologies are so
01:00:44
Advanced that the United States has very
01:00:46
specific rules
01:00:48
that limit the ability for foreign
01:00:51
actors to invest in those businesses
01:00:54
and in those situations where a few
01:00:56
folks invested beside me in some of
01:00:58
these companies we had to go through a
01:01:00
process to get cypheus approval before
01:01:03
that investment was allowed now what's
01:01:05
interesting about that is that's about
01:01:06
money coming in
01:01:09
but I do think that the reverse now
01:01:11
becomes important because if U.S dollars
01:01:13
are going to go and see these extremely
01:01:16
complicated Advanced Technologies abroad
01:01:19
especially into the hands of countries
01:01:22
that are Frenemies at Best of the United
01:01:24
States
01:01:25
I think we have a responsibility to have
01:01:27
a point of view on that and so I think
01:01:29
Keith were boy was the one that was very
01:01:31
definitive and said this should not be
01:01:33
allowed I do think it is so early Jason
01:01:35
we talked about this we're on this curve
01:01:36
of [ __ ] around and find out which means
01:01:38
there will be some crazy examples of
01:01:41
stuff that are very uncomfortable yep I
01:01:45
don't think we want U.S fingerprints on
01:01:47
this stuff being perfected outside of
01:01:49
U.S borders sex when we look at the
01:01:52
history of Engagement with China maybe
01:01:54
we can take a multi-decade globalization
01:01:57
perspective here
01:01:58
when you look back on it the engagement
01:02:00
with China created so much Prosperity so
01:02:03
much intertwined dependency iPhones
01:02:06
being the the best example possibly
01:02:08
we're selling them in China we're making
01:02:09
them in China
01:02:11
China loses apple as a customer that
01:02:14
would be absolutely
01:02:16
devastating for them and it would
01:02:17
obviously be devastating for apple as
01:02:19
well so when we look back on that as a
01:02:22
general rubric here do you think
01:02:24
we enabled a competitor
01:02:27
or we
01:02:28
avoided future conflict because of the
01:02:30
interdependency and where do you sit in
01:02:32
terms of thinking about engagement
01:02:34
versus maybe isolation or something in
01:02:38
between those two for enemies best of
01:02:40
Frenemies Etc the policy of constructive
01:02:42
engagement as it was called 20 something
01:02:44
years ago the the idea behind it was
01:02:47
that if we engaged with China
01:02:49
economically and help make them Rich
01:02:52
then that they would become more like us
01:02:54
they would somehow turn into democracy
01:02:56
and they would have tremendous gratitude
01:02:58
towards us and we'd become friends
01:03:02
it's not the way it worked out there
01:03:04
were people who warned that this was a
01:03:06
foolish approach so most notably the
01:03:08
realist scholar John muirsheimer at the
01:03:11
University of Chicago warned back in
01:03:13
2002 that that was not the way this is
01:03:16
going to play out if we made China Rich
01:03:18
they would seek to convert that wealth
01:03:20
into political power and then they would
01:03:23
act the way that all other great Powers
01:03:25
have behaved throughout human history
01:03:27
which is they want to dominate their
01:03:29
region and they would seek to push the
01:03:32
United States out of Asia
01:03:34
and the future that he predicted 20
01:03:36
years ago is the future that's come true
01:03:37
and I think the you know all the
01:03:39
constructive engagers I think has some
01:03:41
egg on their face now
01:03:43
I understand where they're coming from
01:03:44
this is a fundamental difference between
01:03:46
whether you see the world in economic
01:03:48
terms which is about creating positive
01:03:51
sum games basically trade or whether you
01:03:54
see the world fundamentally in
01:03:56
geopolitical terms which is about the
01:03:58
balance of power which is more of a
01:03:59
zero-sum game
01:04:00
and I think that both views they're both
01:04:03
extremely important we want to engage in
01:04:06
positive some relationships that
01:04:07
generate more trade and more wealth to
01:04:09
the United States at the same time we
01:04:11
have to be aware and concerned about the
01:04:13
balance of power we do not want a number
01:04:16
two country in the world who can rival
01:04:19
the United States in terms of power who
01:04:22
basically could win a security
01:04:23
competition with us and we certainly
01:04:25
don't want a country in the world to be
01:04:27
more powerful than us so I think this is
01:04:29
sort of the yin and the Yang is
01:04:30
geopolitics versus economics and I think
01:04:33
what's happened with China over the last
01:04:34
several years is it's flipped I think we
01:04:36
used to see the relationship primarily
01:04:38
in positive some economic terms and now
01:04:40
we see it in geopolitical terms and I
01:04:43
think there's a lot of firms now
01:04:46
in the United States you haven't
01:04:48
embraced this new reality and to go back
01:04:51
to your question about you know when
01:04:52
should a venture capital firm take money
01:04:55
from a foreign country when it should
01:04:56
and I think there's a very simple rule
01:04:58
for this which is if the country is a
01:05:00
U.S Ally
01:05:02
I think it's fair game because the U.S
01:05:04
has said this is a partner of ours so
01:05:05
why can't you do business with them but
01:05:07
if the United States government has said
01:05:09
this is an adversary you're putting
01:05:11
yourself in a really difficult
01:05:12
precarious spot by doing business with
01:05:15
them because then you have to explain
01:05:16
yourself to the US government yeah this
01:05:18
is the very simple rule we would use is
01:05:20
I don't we would never consider taking
01:05:21
money from Russia or
01:05:24
North Korea any country that the US
01:05:27
government says is an adversary of ours
01:05:29
but if the US government assistance is a
01:05:31
partner and an ally then I think you
01:05:32
could consider it do you think there's a
01:05:34
way Saks to salvage the the relationship
01:05:36
with China and make it productive or do
01:05:39
you think it's a fargone conclusion at
01:05:40
this point because one might argue and
01:05:42
I've heard people argue this
01:05:44
maybe China would have invaded Taiwan
01:05:47
already if it wasn't for the
01:05:48
interdependency so I know we're dealing
01:05:51
with you know a lot of we're doing a lot
01:05:52
of predictions here but do you think it
01:05:54
can be salvaged and do you think it
01:05:55
would have been a worse relationship if
01:05:57
we hadn't had this interdependency
01:05:59
that's been built up I'm not quite sure
01:06:01
that the economic interdependence Theory
01:06:04
preventing War has been definitively
01:06:06
proven if you go back to World War One
01:06:08
For example it was the case that Britain
01:06:11
and Germany actually were each other's
01:06:14
number one trading partners and they
01:06:15
still got in World War one for reasons
01:06:18
that in hindsight seemed really silly so
01:06:20
I'm not sure that economic
01:06:23
interdependence can prevent it certainly
01:06:26
doesn't prevent security competitions
01:06:27
from arising and and therefore I don't
01:06:29
think it can necessarily prevent a war
01:06:31
although you know having business ties
01:06:34
can lead to positive interactions yeah
01:06:38
so I I'm just saying the jury's still
01:06:39
out on that theory but I think that like
01:06:43
I said I think once you're in a security
01:06:44
competition the way that we are with
01:06:46
China I think geopolitics rather than
01:06:48
economics is in the driver's seat and
01:06:50
that's what's happening right now yeah
01:06:51
Freeburg intellectually way I think to
01:06:54
process this you would never invest in a
01:06:57
North Korean AI company a Russian AI
01:06:59
company or an Iranian AI company how do
01:07:03
you think about China and then just
01:07:05
generally this topic of when to engage
01:07:07
when Venture capitalists when startups
01:07:10
uh you know and trade Partners should
01:07:13
engage with various countries
01:07:15
how do you think about a free bird in
01:07:17
what role as an investor well we could
01:07:20
we could take multiple roles here
01:07:21
founder investor would be the top two
01:07:23
for this program I think
01:07:26
or taking money from yeah those three
01:07:28
possibilities very few portfolio
01:07:31
companies that don't benefit some way
01:07:33
from the trade relationship with China
01:07:36
so
01:07:38
you know to Sax's point I'm not sure you
01:07:41
can really
01:07:42
say China is a true and complete
01:07:45
adversary in the sense that we're on
01:07:47
opposite sides there's obviously deep
01:07:49
interdependencies so you know it's hard
01:07:52
to kind of say I draw the line at this
01:07:55
kind of Technology investing there but
01:07:57
identified from their technology
01:07:59
investing that's going on there in other
01:08:00
ways with some of my other businesses
01:08:02
right I think that that's really where
01:08:04
you kind of run into a a bit of a
01:08:06
conundrum that we do have a deep
01:08:09
interdependency
01:08:12
so you know like with respect to like
01:08:15
investing in China I don't know I think
01:08:17
the investing in China I think is pretty
01:08:18
difficult given that there is a single
01:08:21
power that gets to decide what does or
01:08:24
doesn't happen I mean look at what
01:08:25
happened with Alibaba a lot of
01:08:27
shareholders got pretty wiped out there
01:08:30
these are these governments where you
01:08:33
have like
01:08:34
the op the potential of getting
01:08:36
completely wiped out by government
01:08:37
action is a pretty scary place to invest
01:08:39
in general
01:08:40
I'd be more oriented as an investor
01:08:42
around those concerns than I am about
01:08:44
you know it's really hard to do the
01:08:46
calculus on on am I helping or hurting
01:08:48
America versus China you know you you
01:08:51
could argue
01:08:52
100 ways each of those sides what do you
01:08:55
think of Sax's framework if we're
01:08:57
partners
01:08:58
you know fair game if not Partners not a
01:09:01
good idea to put your neck out
01:09:03
but we're part sorry are you asked are
01:09:05
you saying like we're not partners with
01:09:06
China
01:09:07
well it seems like the US government has
01:09:10
said we're adversaries now and that
01:09:13
we're in a in a pretty dogged
01:09:14
competition well Jake out just be
01:09:15
specific I'm talking about a situation
01:09:17
in which you're taking money from them
01:09:19
yes the situation we're taking money I
01:09:21
do think that selling them products
01:09:25
that are you know not like super
01:09:28
strategic like I think selling them our
01:09:29
most advanced chips is dangerous but you
01:09:32
know look I think if you're selling them
01:09:34
products that help restore the trade
01:09:36
deficit and correct that movie I have a
01:09:38
problem with that yeah I don't have a
01:09:39
problem with
01:09:41
uh-selling movies or cars or something
01:09:43
like that to China the question is
01:09:44
though I think if you're a venture
01:09:46
capital firm do you take their money
01:09:47
that's what I'm specifically talking
01:09:48
about and I think whether you're allowed
01:09:50
to or not we don't because we just don't
01:09:54
have to think about what complications
01:09:56
that could cause down the road
01:09:59
also getting your money out of China
01:10:00
also a difficult task it seems these
01:10:02
days cash app creator Bob Lee AKA crazy
01:10:05
Bob on Twitter that was his Twitter
01:10:07
handle was stabbed to death The
01:10:08
Tragically in San Francisco earlier this
01:10:10
week
01:10:11
he was squares for our CTO he worked at
01:10:13
Google on Android
01:10:16
who is the chief product officer at
01:10:17
mobile coin also an angel investor and a
01:10:20
ton of companies figma Space X Clubhouse
01:10:23
well known in the industry officers
01:10:25
responded at about 2 35 am to report a
01:10:27
stabbing on the 300 block
01:10:31
of Main Street and arrive to find Lee
01:10:34
who had maintained her hospital to come
01:10:35
to his injuries there no arrests has
01:10:37
been made
01:10:38
a lot of San Francisco
01:10:42
politicians are sending their thoughts
01:10:45
and prayers but obviously San Francisco
01:10:47
is still
01:10:49
very dangerous place it seems any
01:10:51
thoughts on this and how it might act as
01:10:54
some sort of uh Crossroads or not and
01:10:58
thoughts and prayers obviously to his
01:11:00
family I think this um
01:11:03
this was a pretty tragic event there's a
01:11:05
lot of people who I knew that were
01:11:07
pretty close with him I got several
01:11:09
messages on his passing he was I didn't
01:11:11
know him uh personally I think we met
01:11:13
maybe once or twice he worked on Android
01:11:15
at Google and obviously had a key role
01:11:18
at Square in the early days and was a
01:11:20
pretty uh impactful and important person
01:11:22
but also supposedly I didn't know him
01:11:24
very well again but everyone says just
01:11:25
such an incredibly kind and generous
01:11:27
person so uh tragic loss um I used to
01:11:30
live two blocks from
01:11:32
uh where the the event happened I'll
01:11:35
I'll zoom out where is it Freeburg is it
01:11:37
a bad place in Soma at Rincon Center
01:11:40
right by the big condo Towers there and
01:11:42
it's right where the Salesforce uh
01:11:44
offices used to be
01:11:46
and
01:11:47
you know block from the wall
01:11:49
is it part of all that drug craziness
01:11:53
it's not in the heart of the camping
01:11:55
District it's just a nice area and so
01:11:58
I'm a quiet area right so at night
01:11:59
there's no one there I went to San
01:12:01
Francisco a few weeks ago I told you
01:12:02
guys I pulled up to a restaurant on the
01:12:04
Embarcadero and I joked with my buddy in
01:12:06
the car I'm like Oh my car's gonna get
01:12:07
broken into while we're at dinner
01:12:08
because I'm parking on the street we
01:12:10
went to dinner 90 minutes later it came
01:12:11
out of course my car had been broken
01:12:13
into the trunk had been popped up and
01:12:14
it's just like this is
01:12:17
very fancy area Soma look here's the
01:12:19
thing if you park at a parking meter in
01:12:21
San Francisco for eight minutes too long
01:12:23
you get a 60 to 100 parking ticket and
01:12:26
San Francisco has become an upside down
01:12:28
town
01:12:29
what I mean by that is I think that like
01:12:31
so much of the response that we've had
01:12:34
in the last couple of years to power
01:12:36
dynamics and concerns about the powerful
01:12:39
having too much influence
01:12:41
over those who are less powerful who
01:12:43
have less influence and who suffer as a
01:12:45
result of their demeaned influence
01:12:49
the response has been to turn things
01:12:51
upside down which is to give those who
01:12:54
were lacking in the power structure
01:12:55
everything and to try and take
01:12:57
everything away from those who are at
01:12:58
the top of the power structure so if you
01:13:00
want to deal drugs in the open air if
01:13:02
you want to walk into Walgreens and
01:13:03
steal thousands of dollars of goods and
01:13:05
walk out nothing will happen to you
01:13:07
because you were embedded with this
01:13:09
powerless kind of position in life but
01:13:12
if you have a car and you park at a
01:13:14
parking meter and you stay at the
01:13:16
parking meter for more than 10 minutes
01:13:17
you get a ticket and the consequences of
01:13:20
responding to power dynamics by flipping
01:13:22
the power structure upside down is
01:13:24
obviously
01:13:25
can be more negative as we're kind of
01:13:28
experiencing I think acutely in San
01:13:29
Francisco but also around the nation and
01:13:31
by the way I think that this applies in
01:13:33
a lot of other ways in terms of how
01:13:34
we're doing College admissions in terms
01:13:36
of how we're selecting people for jobs
01:13:38
in terms of you know recent applications
01:13:40
for Pilots for doctors where the
01:13:44
assessment is less about
01:13:46
did the person who was disadvantaged at
01:13:49
the beginning of their life or career or
01:13:51
trajectory or educational path be given
01:13:54
greater opportunity and greater
01:13:56
resources to catch up and to get there
01:13:59
or did we just flip the power Dynamic
01:14:01
upside down and just give them the end
01:14:03
point and as a result there's a massive
01:14:05
kind of detriment that I think can arise
01:14:07
and it's not necessarily always the case
01:14:10
that it will arise it is not necessarily
01:14:12
the case that selecting someone based on
01:14:14
some demographic profiling to be an
01:14:16
airline pilot necessarily means that
01:14:18
that Airline is more likely to have
01:14:19
airplane crashes but in certain cases
01:14:22
when you don't prosecute certain crimes
01:14:24
like robberies or
01:14:27
people walking into stores or breaking
01:14:30
windows or dealing drugs in the middle
01:14:31
of the street or camping on the street
01:14:33
and you fast forward a couple of years
01:14:35
that power Dynamic the flip of that
01:14:37
power Dynamic causes the whole town to
01:14:39
go upside down and everyone who's
01:14:41
sitting on the bottom ends up becoming a
01:14:42
victim themselves and I think we're
01:14:44
starting to see inklings of this in San
01:14:45
Francisco we certainly have for years
01:14:47
Saks is ranted on about this with
01:14:49
respect to some of the non-prosecution
01:14:51
that's happened historically and I
01:14:52
totally agree with him
01:14:54
on those points and I think that it's
01:14:55
come to a Breaking Point in San
01:14:57
Francisco but that's really a beacon for
01:14:59
what else is going on and you know some
01:15:01
people call it wokism I I think maybe
01:15:03
this notion of wokism is one small
01:15:05
element or segment of the broader issue
01:15:07
with how we are tackling with and
01:15:09
dealing with embedded power structure
01:15:11
issues in this world today and the
01:15:14
flipping of those power structures
01:15:15
upside down doesn't necessarily yield
01:15:17
the outcome we all want and I think
01:15:19
we're starting to see reasons why Zach's
01:15:21
any thoughts here that's my rant I can't
01:15:23
disagree with you yeah so similar
01:15:25
Freeburg I I didn't know bobbly but I I
01:15:27
know many people who knew him and I was
01:15:29
getting texts and obviously we feel
01:15:31
really bad for him his whole family his
01:15:34
kids as a father his co-workers friends
01:15:37
we don't know exactly what happened yet
01:15:39
but I think we suspect and I would bet
01:15:42
dollars to dimes that the story is very
01:15:44
similar to a case we had in La recently
01:15:46
the Brianna kupfer case where a young
01:15:49
woman was basically stabbed for no
01:15:51
reason by a psychotic homeless person
01:15:53
who had been through the revolving door
01:15:55
of the jail and Criminal Justice System
01:15:57
who could have been locked up who was
01:15:59
arrested multiple times but was not kept
01:16:01
locked up because of this push for
01:16:03
decarceration and you can argue that
01:16:06
maybe it'd be better for that person to
01:16:07
be in mandatory treatment or in a even
01:16:10
maybe a mental Asylum but this idea of
01:16:12
just releasing these people onto the
01:16:14
street I just think is an outrageous
01:16:17
abdication of responsibility by our
01:16:20
elected officials who run the criminal
01:16:22
justice system who passed our laws and
01:16:24
the thing I just wish is that I could
01:16:26
lock for 24 hours
01:16:29
the the people alike are supervisors or
01:16:32
our governor or the people who basically
01:16:34
make these laws or the people who are
01:16:36
pushing for decarceration of these
01:16:38
violent offenders by these non-profits I
01:16:41
wish I could lock them up in a room for
01:16:43
24 hours with the people that they think
01:16:46
are safe to release on our streets
01:16:50
let's see if they really would take that
01:16:52
test because it seems to me that these
01:16:55
these elected leaders and these
01:16:57
non-profits are pushing for these
01:16:59
outcomes they are setting loose on us a
01:17:03
predatory criminal or psychotic element
01:17:07
that jeopardizes our safety and makes
01:17:09
these cities unlivable and we should not
01:17:11
tolerate that and quite frankly the
01:17:13
responsibility goes beyond those elected
01:17:16
leaders it goes to all the voters as
01:17:17
well because we keep putting up with
01:17:19
this
01:17:19
and where is our governor when this
01:17:21
happened he was in Florida doing some
01:17:23
sing-along at some high school where he
01:17:26
was trolling Ron DeSantis because
01:17:28
DeSantis has taken on di at that school
01:17:31
so that's where Newsome was and he's
01:17:33
extremely popular in California culture
01:17:35
wars instead of saying culture wars in a
01:17:37
distant state
01:17:39
instead of basically
01:17:41
fixing the criminal justice system in
01:17:43
California it's even worse than that
01:17:44
because he's actually shut down two
01:17:45
prisons and released lots of people so
01:17:47
where is the push for Criminal Justice
01:17:49
Reform in California and protecting the
01:17:51
citizenry and until the voters in San
01:17:55
Francisco and California start demanding
01:17:57
this there's never going to be a change
01:17:58
and at the same time listening to Gary
01:18:00
tan you know just vote for who are the
01:18:03
Gary tan tells you to vote for okay I
01:18:05
think it's probably a good guy I can't
01:18:08
disagree and this the supervisor seemed
01:18:10
to control a lot of this and
01:18:12
uh chamat shared just this week mayor
01:18:14
Francis Suarez is talking about on his
01:18:17
Twitter the reduction in homicide
01:18:19
shootings and they have literally
01:18:22
counted the
01:18:24
if you want to say a drug addicted
01:18:27
mentally ill homeless there's obviously
01:18:29
three or four different things going on
01:18:31
here when you look at the population
01:18:32
that's living on the street some number
01:18:34
of them down on their lot some number
01:18:36
mentally ill some number addicted to
01:18:38
drugs and some number a combination of
01:18:40
those things
01:18:41
he seems to be getting it done in Miami
01:18:43
and you know other states seem to and
01:18:47
other cities seem to have gotten this
01:18:48
under control is there any hope for San
01:18:50
Francisco tomorrow or is this just gonna
01:18:52
take five or ten years to bottom out I
01:18:54
mean it takes regime change
01:18:57
I think New York
01:18:58
had a long period of lawlessness where
01:19:01
people were afraid to walk down the
01:19:02
streets it took a handful of mirrors to
01:19:05
draw a hard Line in the Sand
01:19:07
to increase policing
01:19:09
sometimes to introduce some pretty
01:19:11
controversial Concepts at the time or at
01:19:13
the time that were supported which now
01:19:15
seemed controversial you're talking
01:19:16
about stop asking Frisk I think it was
01:19:18
called the broken windows theory of
01:19:19
policing yep take care of them
01:19:22
take care of the little things so that
01:19:24
the little things don't compound into
01:19:25
the big things
01:19:27
but whatever you believe needs to get
01:19:29
done
01:19:31
I think it's pretty clear that what is
01:19:33
being done isn't working
01:19:35
and so the real question is can people
01:19:38
see through the naked partisanship to
01:19:42
agree that this is not working
01:19:45
and sadly what I would tell you guys is
01:19:48
that I don't think
01:19:49
they're there yet
01:19:51
and the reason is because America is the
01:19:53
most divided it's ever been
01:19:56
especially on issues of race and social
01:19:59
justice and social norms
01:20:03
and I think that crime has gotten caught
01:20:07
and painted with that brush
01:20:09
which means that the idea of very
01:20:13
aggressive policing and safety are now
01:20:18
viewed as opposite and antithetical to
01:20:20
social justice
01:20:22
and I don't know how that happened but
01:20:25
the result of it is this which is these
01:20:27
folks will never agree that this is not
01:20:28
working
01:20:29
and you'll have to go through recall
01:20:32
election after recall election and even
01:20:34
then it's not going to be enough because
01:20:36
the smart politicians will say
01:20:40
what they want
01:20:41
in terms of like safety matters
01:20:45
but then a lot of Voters will vote the
01:20:47
opposite the example in Chicago that
01:20:49
David brought up earlier is really
01:20:51
interesting because it was essentially a
01:20:53
social justice candidate versus a Law
01:20:55
and Order candidate through their
01:20:56
Democratic ranks
01:20:58
and the social justice candidate won
01:21:01
the progressive candidate one and the
01:21:03
person that wanted to tax
01:21:06
businesses and individuals one and the
01:21:08
person that wanted to sort of focus on
01:21:10
Law and Order Lost
01:21:12
so what does that say it says that we
01:21:14
are still in a moment where we can't
01:21:16
agree on what is important yep that's
01:21:19
really scary and so I think you kind of
01:21:22
have to unfortunately vote with your
01:21:23
feet if you are lucky enough to do so I
01:21:26
think that's the key yeah
01:21:28
who's left over or a lot of people who
01:21:31
are not in a position to just up and
01:21:33
leave
01:21:33
and then they are unfortunately left
01:21:35
behind
01:21:37
tragic situation
01:21:39
all around
01:21:40
and I will never host a conference or
01:21:43
any event in San Francisco until this is
01:21:46
solved because I um when people ask us
01:21:48
to do events I'm like people don't want
01:21:50
to come to San Francisco they're afraid
01:21:52
so I do my events in Napa or in San
01:21:54
Mateo Nat started a Bilingual School
01:21:57
Italian English that is on the IB system
01:22:00
International Baccalaureate system and
01:22:02
it's a sister school to a school in the
01:22:04
city we had a fundraiser which was
01:22:06
literally right downtown in that
01:22:08
encampment area
01:22:10
and when I pulled up I was like is this
01:22:13
for real it's an open-air drug Market
01:22:15
where
01:22:16
folks are doing drugs selling drugs
01:22:19
right in front of you they're passed out
01:22:22
completely incapacitated about a third
01:22:24
of the guys are wearing balaclavas so
01:22:26
you can't identify them you have no idea
01:22:28
what they look like I grew up in
01:22:30
Brooklyn in the 70s and 80s when it was
01:22:32
legit dangerous and when I walk in San
01:22:35
Francisco it feels much more dangerous
01:22:40
then though that crazy era it feels
01:22:43
random it doesn't feel like there's
01:22:45
organized crime gang crime like I grew
01:22:47
up in a pretty crappy neighborhood and
01:22:49
you knew who the gangs were you knew who
01:22:52
the tough guys were you knew how to
01:22:53
avoid trouble they didn't come and
01:22:55
randomly come and stab you to death
01:22:57
right and so yeah Jason you become
01:23:00
Street Smart growing up in a culture
01:23:01
like that because you know how to avoid
01:23:03
it you know how to be alert this doesn't
01:23:04
feel like that this is no it's just like
01:23:06
a bad roll of the dice and you could get
01:23:09
stabbed to death just walking down the
01:23:11
street not just not
01:23:12
where where are the politicians to stop
01:23:16
this I mean they don't care there's a
01:23:19
the level of corruption in San Francisco
01:23:20
is unbelievable the incompetence amongst
01:23:23
those supervisors the mayor the DA's
01:23:26
everybody it's just incompetence and
01:23:28
nobody has the hood spa or the
01:23:31
wherewithal to say enough and I think
01:23:33
the other group to blame are all the
01:23:36
rich people and powerful people who just
01:23:38
haven't been active in politics and I
01:23:40
know some of us have
01:23:42
in different ways but I think it's going
01:23:44
to take a coordinated effort by people
01:23:46
who really care to vote out all these
01:23:48
supervisors and bring in
01:23:49
it's got to be regime change and I just
01:23:51
don't know if there's the wherewithal to
01:23:52
do because every time as a person who
01:23:55
has some means or is successful in some
01:23:57
way that you stick your neck out there
01:23:59
like you have done sex the the attacks
01:24:02
that you will get from this insane left
01:24:05
I I don't want to even use the word woke
01:24:07
I think it's a different derangement I
01:24:09
think it's actual corruption where
01:24:11
they're making so much money offer this
01:24:13
homeless industrial complex they're
01:24:15
getting paid so much money that the
01:24:17
grift is so deep
01:24:18
that they are going to fight for this
01:24:20
and it's going to take some really
01:24:22
courageous people like Gary tan and
01:24:24
maybe David sacks and other folks to
01:24:26
back a slate of people
01:24:28
um to change this and we need people to
01:24:32
run for government who are brave and who
01:24:34
want to put their neck out there and say
01:24:35
enough is enough we're going to police
01:24:36
the city I just don't know if it uh it's
01:24:39
gonna happen all right listen yeah I
01:24:40
mean the the issue is that it takes it
01:24:42
takes more than one election so listen I
01:24:44
think we made a positive change by
01:24:46
removing Chase of Boudin I think Brooke
01:24:48
Jenkins has the right attitude she cares
01:24:50
about victims I think she wants to
01:24:52
prosecute the issue is that you've got a
01:24:56
police department that's 50 of the
01:24:58
number of officers that they want
01:24:59
because they flirted with this whole
01:25:01
defund the police movement you've got
01:25:03
the Board of Supervisors and you've got
01:25:05
like an oversight board on the police
01:25:07
that basically make their jobs harder
01:25:08
and it's not it's not one election
01:25:10
because even the mayor doesn't control
01:25:12
it because the Board of Supervisors
01:25:13
really has all the power in San
01:25:15
Francisco so they take a job that really
01:25:18
should be one or two people's jobs like
01:25:20
the D.A like the mayor and they break it
01:25:22
up into this like Board of Supervisors
01:25:25
where you've now got to be familiar with
01:25:28
a dozen different races in order to
01:25:31
effectuate a change well the machine
01:25:33
knows how to do that but the average
01:25:35
citizen doesn't so they make it really
01:25:36
hard to effectuate change but there are
01:25:39
groups that are springing up in San
01:25:42
Francisco like grow SF and you know
01:25:44
people like Gary who are on top of it
01:25:46
and that's why just follow them and and
01:25:48
vote for their recommendations because
01:25:50
they're actually tracking how to make a
01:25:52
difference
01:25:54
all right I think on that we will wrap
01:25:57
for the dictator tramath polyhapatia the
01:25:59
Rayman David sacks and the Sultan of
01:26:02
science
01:26:06
I am the world's greatest moderator
01:26:08
we'll see at the all in Summit 20. love
01:26:10
you boys
01:26:16
[Music]
01:26:24
and they've just gone crazy
01:26:26
[Music]
01:26:31
besties
01:26:34
[Music]
01:26:40
foreign
01:26:42
[Music]
01:27:04
[Music]
