00:00:00
All right, we have a massive show for
00:00:02
you today, besties, but it's not going
00:00:05
to be our prediction show. We thought we
00:00:06
were doing predictions end of the year,
00:00:08
but we had so many amazing stories to
00:00:10
cover in the news that we're going to do
00:00:12
predictions next week. The first story
00:00:14
is we have investigative journalist Nick
00:00:16
Shirley on. He has uncovered in a
00:00:20
breaking 42-minute video that went viral
00:00:23
$110 million in potential fraud in
00:00:26
Minnesota. It's part of $9 billion in
00:00:28
overall fraud. and we've got him on the
00:00:30
show here exclusively. This video
00:00:32
apparently perhaps prompted responses
00:00:34
from Cash Patel and DHS Secretary
00:00:37
Christy Gnome who have sent agents in to
00:00:40
inspect these facilities. Here's some
00:00:43
sort of important context. These
00:00:45
entitlement frauds in Minnesota have
00:00:46
been going on for over 10 years. It's a
00:00:49
13 14 year old story. It started by an
00:00:52
investigative reporter named Jeff Balon.
00:00:55
launched his first investigation into
00:00:57
this in February of 2013
00:00:59
at Fox 9 News, local investigative
00:01:02
journalist. Uh, and after that expose,
00:01:04
charges were brought in 2014 against a
00:01:07
Somali woman and her husband. They skip
00:01:09
bow. They never faced trial. Here's a
00:01:11
45se secondond clip from 2016 from
00:01:13
Balon.
00:01:14
>> Ali is facing numerous counts of theft
00:01:17
by swindle and racketeering. She ran a
00:01:19
daycare business and home healthcare
00:01:21
company that catered to lowincome
00:01:23
families. But former employees told the
00:01:26
Fox 9 investigators back in 2013 that it
00:01:29
was really part of a scam to collect
00:01:31
millions in public subsidies.
00:01:34
>> When I saw the bank account for the
00:01:36
business, there were large Cath
00:01:38
withdrawals on a continuous basis.
00:01:41
>> Can I ask you a few questions?
00:01:42
>> A year after our investigation, Ali was
00:01:44
arrested and charged with billing the
00:01:47
state out of about $4 million.
00:01:50
>> Okay. Since 2018, Minnesota has seen 9
00:01:54
billion around 9 billion in entitlement
00:01:56
frauds according to federal prosecutors.
00:01:59
Just to give you guys a a concept of uh
00:02:03
what that means, that's half of the
00:02:04
total amount spent on 14 entitlement
00:02:06
programs in the state. So, here's the
00:02:09
direct quote from the federal prosecutor
00:02:10
on the Minnesota fraud. The magnitude
00:02:12
cannot be overstated. It's staggering.
00:02:14
Industrialcale
00:02:16
fraud. There have been over 90
00:02:18
convictions for more than $800 million
00:02:20
in fraud since 2022.
00:02:23
In 2022, 47 defendants were charged in a
00:02:26
$250 million fraud scheme called Feeding
00:02:29
Our Future that was supposed to feed
00:02:30
hungry kids. Then up to 220 million was
00:02:33
stolen in funds for kids with autism.
00:02:36
Then 300 million was stolen in Medicaid
00:02:39
funds meant to help people with
00:02:40
disabilities avoid homelessness. So
00:02:45
starting with that feeding our futures
00:02:46
fraud in 2022, 82 of 92 people charged
00:02:50
have been
00:02:52
Somalian. Joining us right now,
00:02:55
23-year-old investigative journalist
00:02:57
Nick Shirley. Welcome to the program.
00:03:00
>> Thank you. It's been a crazy past few
00:03:02
days out here in Minnesota.
00:03:04
>> So I guess a good place to start is uh
00:03:07
you could tell the audience a little bit
00:03:10
about your background. uh when you got
00:03:12
into investigative journalism.
00:03:14
Obviously, you've got a YouTube channel.
00:03:16
I watched some of your early videos when
00:03:18
you were 16, 17 years old. I would say
00:03:20
along the Mr. Beast vibes and then
00:03:23
suddenly making a turn into politics
00:03:26
specifically around immigration and some
00:03:29
Vox pop uh kind of man on the street
00:03:31
stuff. But maybe you could tell us a
00:03:33
little bit of how you got into all this
00:03:35
and how you got into this specific
00:03:38
story. Yeah. So, I've been doing YouTube
00:03:40
as far as I can pretty much remember
00:03:42
since as I was as a sophomore in high
00:03:43
school. It was just uh something I
00:03:45
thought I could would be good at. So,
00:03:46
I'd do YouTube videos and all I could do
00:03:49
in high school was to do prank videos,
00:03:51
sneaking into places, just kind of a fun
00:03:53
stuff you can do on the weekend. And
00:03:55
then as I've grown older and I've had
00:03:57
other experiences, um I've matured and
00:04:01
I've wanted to get more into more
00:04:02
serious topics. And so, uh, as I've been
00:04:04
able to go places and kind of see the
00:04:06
world for what it is in different
00:04:08
countries and whatnot and have different
00:04:09
experiences, um, it kind of led me to
00:04:12
get into this more investigative
00:04:13
journalism content. And also, back in
00:04:17
around 2020, you couldn't even make
00:04:19
political content on YouTube without
00:04:21
word without being demonetized. For
00:04:24
instance, if you were to put Trump in a
00:04:26
YouTube title or thumbnail on my
00:04:27
channel, you would get demonetized cuz I
00:04:29
was a smaller channel. So, it was
00:04:31
impossible to make that sort of content
00:04:33
and I was younger. I was about 17, 18
00:04:35
years old at that time.
00:04:36
>> And now YouTube allows you to monetize.
00:04:39
I noticed you had ads baked into the
00:04:41
program like many podcasters. And you're
00:04:43
not affiliated with any news source. And
00:04:45
I to the best of my knowledge, you're
00:04:47
not backed by any special interest
00:04:49
groups. You're not backed by some rich
00:04:52
billionaire. Where's the money coming to
00:04:54
do this reporting from? and and just to
00:04:56
confirm that with the audience.
00:04:58
>> Yeah. Everything I do, I'm 100%
00:05:00
independent and so I make my money off
00:05:02
of YouTube, off of brand deals inside of
00:05:04
YouTube videos. And if people want to
00:05:06
donate money, they can do that. However,
00:05:09
everything I do is straight from my own
00:05:12
hands and I don't have any other people
00:05:13
really working for me other than me,
00:05:15
myself, my mom, and a few other editors.
00:05:18
>> So, tell us about the origin of this
00:05:20
story, and then I'll hand it off to the
00:05:21
rest of the besties to do some follow-up
00:05:23
questions. Yeah. So, I've been looking
00:05:24
into this fraud for a long time. Since
00:05:26
last June, I came to Minnesota to kind
00:05:28
of do a video on what was happening with
00:05:30
the Somali population as far as like how
00:05:32
much it was increasing and and how
00:05:34
certain towns have been uh the
00:05:36
demographics have changed um and how
00:05:39
churches are turning into mosque and how
00:05:41
mosques are growing inside of
00:05:44
Minnesota. I thought it'd be an
00:05:44
interesting topic for people to see. And
00:05:47
when I was there, a lot of people were
00:05:48
starting to tell me about the fraud that
00:05:49
was taking place. And I was like, well,
00:05:50
how do I I just can't come and label
00:05:52
everyone saying there's fraud happening.
00:05:54
I need evidence. I need actual proof.
00:05:58
And so I I've been doing my own
00:06:00
investigation. And then a man by the
00:06:02
name of David who's inside my YouTube
00:06:03
video, he's been doing his own
00:06:05
investigation for years as he's as he
00:06:07
works next to some of these childcare
00:06:09
centers and he's driven by and he's
00:06:10
never seen a single child at any of
00:06:12
these daycarees. And so he started
00:06:13
looking into the funding and he was able
00:06:15
to get the numbers of how much money
00:06:17
these people were receiving from CCAP
00:06:19
funding
00:06:21
which is tax exempt and it was in the
00:06:22
millions of dollars. And so I was I told
00:06:25
him, "All right, I'm coming to
00:06:26
Minnesota. Let's go see what's happening
00:06:27
on these daycarees." And when I got
00:06:29
there, I was shocked to see when the
00:06:31
first daycare we went to, all the
00:06:32
windows were blacked out and you didn't
00:06:34
even have the option to open the door.
00:06:36
Everything was locked. So explain the
00:06:39
the mechanics of the fraud just so the
00:06:41
audience if they haven't seen this
00:06:43
understand how these frauds are being
00:06:46
played out.
00:06:47
>> Yeah. So massive welfare frauds being
00:06:49
committed. People are opening up these
00:06:50
dayc carees, home healthcare clinics,
00:06:53
you name it. anything that has anything
00:06:55
to do with like health welfare or even
00:06:58
just like helping people in general like
00:07:00
with daycare or with uh healthcare,
00:07:04
they're opening up these companies and
00:07:06
then they're able to receive millions of
00:07:08
dollars. And the state, for instance, I
00:07:12
don't know if they're doing any checkups
00:07:14
on these places because these places
00:07:16
literally had signs that said learing
00:07:17
instead of learning on their on their
00:07:19
doors on outside. And what business is
00:07:22
operating in a way where you can't even
00:07:24
go inside or the windows are all blocked
00:07:26
out? Very strange.
00:07:28
>> Nick, let me ask you a question that I
00:07:30
think a lot of people have, which is
00:07:33
when your video, first of all, let me
00:07:35
just say, took a lot of courage and it
00:07:38
was well produced and you communicated
00:07:40
some very complicated information in a
00:07:42
very simple way, which I think is a
00:07:44
tremendous skill.
00:07:47
But the question that everybody asks is
00:07:50
how do we know that you are right? And
00:07:53
in traditional investigative journalism,
00:07:56
there's a process that people follow and
00:07:58
there's insurance that you have to get
00:08:00
and then there's errors and omissions
00:08:02
and you typically have to deal with
00:08:04
lawyers.
00:08:06
Did you go through that process when you
00:08:08
made this? And do you think that it's an
00:08:10
important part of what needs to be done
00:08:13
for your credibility and for this piece
00:08:15
to stand on its own?
00:08:17
>> Yeah, I think everyone knows that
00:08:18
fraud's been going on for years now.
00:08:20
Like Jason was just saying, everyone
00:08:22
knows that the fraud's being committed,
00:08:23
but nobody's actually went to go see it
00:08:25
firsthand. They know this fraud's been
00:08:27
happening, right? And that's why it's
00:08:28
been so hard for people to say, "Well,
00:08:30
this is happening." Or this is why
00:08:31
mainstream media's had such a hard time
00:08:32
to actually get exposure on the fraud
00:08:35
because they've actually never gone and
00:08:36
seen it firsthand or they've had the
00:08:38
opportunity to have a platform where
00:08:40
they can share on their own. Right. But
00:08:43
did you check all the traditional boxes
00:08:45
that the New York Times or other people?
00:08:47
Because what I'm trying to get to is how
00:08:49
do we make sure that then you're not
00:08:50
attacked and that you're not discredited
00:08:52
and that people say this process is
00:08:54
faulty and he's mudslinging and how do
00:08:57
we make sure that you're not sued into
00:09:00
oblivion?
00:09:01
>> Yeah. And to specific to build on that
00:09:03
Shimoth the allegation has come out. Oh,
00:09:05
you went on a Saturday. Oh, you went
00:09:07
during Christmas. And I guess you could
00:09:09
address that because now people are
00:09:10
obviously vetting your journalism. Yeah.
00:09:12
Well, it's on I went on December 16th is
00:09:14
a weekday before Christmas break. So,
00:09:18
there's that. And then, um, sorry, the
00:09:20
question as far as like did I do the
00:09:22
vetting and whatnot. The man who helped
00:09:24
me like lead the investigation himself,
00:09:26
David, he had all the paperwork from the
00:09:28
capital. He had somebody from inside the
00:09:30
capital leaking him the information. So,
00:09:33
there was my like fact check, per se,
00:09:35
was he had a source from inside the
00:09:36
capital. That's how we were able to get
00:09:38
the number specifically. Do you think
00:09:40
that it's going to be important for you
00:09:42
to
00:09:44
have lawyers that help you navigate?
00:09:46
Because like if you build on this,
00:09:48
there's obviously more fraud in
00:09:49
Minnesota.
00:09:51
>> There's a bunch of stuff in our home
00:09:52
state. A lot of people would love you
00:09:54
and people like you to start looking in
00:09:57
all of these crevices.
00:10:00
But how important will it be that you
00:10:02
have all of the legal eyes dotted, tees
00:10:05
crossed here?
00:10:06
>> Yeah, that's a good question. I haven't
00:10:08
really thought too much about that
00:10:09
because every I've never been in this
00:10:11
position where you have hundreds of
00:10:13
millions like I think over 500 million
00:10:16
people saw that video just alone just
00:10:18
from all the impressions aside from the
00:10:20
main video getting 100 million 125
00:10:22
million views, right?
00:10:23
>> So yeah, that's something I definitely
00:10:25
need to think about. But I think more
00:10:27
than anything, I'm not trying to go in
00:10:29
and I'm more so just giving people
00:10:32
transparency from the outside where
00:10:34
people can't see it when they're sitting
00:10:35
from behind a desk talking about it.
00:10:37
Right. Right. I wasn't trying to barge
00:10:39
in any of these businesses. I was simply
00:10:41
asking like, okay, like is it possible
00:10:43
to enroll in ch a child into here? And
00:10:45
they would say no. Like what daycare
00:10:47
center doesn't have a paper for somebody
00:10:48
enroll a child? So I think like yeah, I
00:10:53
guess if I wanted if I was going to do
00:10:55
defamation on specific people and stuff
00:10:57
like James O'Keefe style, I know he's
00:10:59
always having to lawyer up which I don't
00:11:01
want to ever have to do. That's like
00:11:02
would suck cuz that I hate getting I
00:11:04
don't want to ever have to deal with
00:11:05
that stuff. Are you done with Minnesota?
00:11:08
Like, have you uncovered everything you
00:11:10
need to uncover and now you're going to
00:11:12
look at another state? There was a lot
00:11:13
of traffic this weekend about Ohio,
00:11:16
Illinois, California. What do you do
00:11:18
now?
00:11:19
>> Yeah. So, I've been making YouTube
00:11:21
videos consistently for the past 104
00:11:23
days, and I'll continue to def show the
00:11:25
fraud that's taking place here inside
00:11:27
Minnesota. It's not like I only just do
00:11:28
videos on fraud, but um I think just
00:11:31
showing people what's happening inside
00:11:33
the country is super important. And yes,
00:11:34
there's a lot more fraud taking place
00:11:36
here in Minnesota. And I do have a part
00:11:38
two episode on a whole different segment
00:11:39
of the fraud that is taking place within
00:11:43
the the state of Minnesota. And like you
00:11:45
said, a lot of people have reached out
00:11:46
to me, whether it be California, Ohio,
00:11:48
and uh at that point, I will have to
00:11:50
kind of I'll be doing my research as
00:11:53
well to then not have to be in a
00:11:56
position where somebody can try and sue
00:11:58
me.
00:11:58
>> What does it make you feel, Nick, as an
00:12:00
American and also as a young American?
00:12:02
you grow up, whatever your belief system
00:12:05
is, what do you think? Put aside the
00:12:07
investigative journalist pardon, what do
00:12:08
you think as just an American, as a
00:12:10
young American
00:12:10
>> about the fraud?
00:12:12
>> Yeah.
00:12:12
>> Yeah. I think it's very upsetting. I
00:12:14
mean, so many of my friends and so many
00:12:16
people are working. We're like, we're
00:12:18
working so hard just to be able to get
00:12:20
by. Like, I don't even have a friend
00:12:21
that owns a house at this point in their
00:12:23
life. And they're 23 years old. And we
00:12:24
talk to our grandparents and they're all
00:12:26
like talking about how they bought their
00:12:27
first house. We're married. And it's
00:12:28
like that's not even a possibility for
00:12:31
most of us, right? And so when you see
00:12:33
that people are making millions of
00:12:35
dollars and not only is it millions of
00:12:37
dollars, it's tax exempt money. They're
00:12:39
getting it from CCAP funding, which is
00:12:41
uh tax exempt, right? And so when we're
00:12:44
working hard and we're paying anywhere
00:12:46
from 20 to 50% of our money back into
00:12:49
the hands of the government while people
00:12:50
are just funneling money, it makes us
00:12:52
all mad and it's not fair to anybody
00:12:54
quite frankly.
00:12:56
>> It's interesting. Freeberg, I know
00:12:58
you're you're interested in the media as
00:13:01
well, like I am. This story has been
00:13:04
covered for over 10 years by local news.
00:13:06
You came in and did this. It became
00:13:08
essentially a national story. But when
00:13:10
we did our research, we did find a New
00:13:12
York Times story last month, but none of
00:13:13
the CNN's of the world have actually
00:13:16
covered this. So, there seems to be a
00:13:17
little pocketing going on here,
00:13:19
Freeberg. the local news covering it
00:13:22
doggedly,
00:13:24
uh, running gun journalists like
00:13:25
yourself, Nick, doing an incredible job
00:13:27
knocking on doors, but there's this
00:13:29
vacuum, Freedberg, on the national
00:13:31
level. Any thoughts on that? Well, Nick,
00:13:34
I think one of the things that makes
00:13:35
your content so compelling is that it is
00:13:38
long form. When you watch 60 Minutes or
00:13:41
CBS or whatever, they're cut down.
00:13:44
They're sort of like segment pieces.
00:13:46
It's seven minutes long. What's so great
00:13:49
about your footage is you get the raw
00:13:51
true experience. It really is what
00:13:53
citizen journalism is meant to be and
00:13:56
you and I have talked for a while. I
00:13:57
think you know we talked months ago
00:13:59
about some of the work you were doing in
00:14:02
Portland cuz like I was asking all these
00:14:04
questions like well what is everyone
00:14:06
else in Portland up to cuz all the video
00:14:08
from all the news stations was what's
00:14:09
going on right outside that gate where
00:14:12
the ice facility was and there was like
00:14:14
20 people going crazy but like what's
00:14:16
the rest of Portland like? and you went
00:14:17
out and collected that content. That's
00:14:19
the sort of stuff that I think makes
00:14:21
your work so compelling is it feels so
00:14:22
real. There just isn't a way for a
00:14:24
network news station or CNN to do that
00:14:27
sort of work where you can sit down and
00:14:29
spend 45 minutes looking at like the
00:14:31
very real footage that you put out,
00:14:33
which is awesome. Can I ask you a
00:14:35
question? So, you grew up Mormon, is
00:14:36
that right?
00:14:37
>> Yeah.
00:14:38
>> And did you do a mission?
00:14:40
>> Yeah, I did do a two-year mission in
00:14:41
Chile. Do you think that that prepared
00:14:44
you like knocking on doors or engaging
00:14:47
people openly in your missionary work to
00:14:51
be able to do this? Because I can tell
00:14:52
you I know so many journalists who would
00:14:54
be scared shitless to go do the stuff
00:14:56
you've done in New York City and
00:14:57
Portland now in Minneapolis where you're
00:14:59
actually going into these facilities
00:15:01
looking people face to face. Like how
00:15:03
did you develop that that capability?
00:15:05
Was it rooted in your missionary work? I
00:15:06
mean, I think that might come from a
00:15:08
little of it, but I think being the
00:15:10
youngest brother also really just always
00:15:13
having to impress your older brothers
00:15:15
and being the daredevil for him and his
00:15:17
friends. Like, I just didn't grow up
00:15:19
with fear. Like, it wasn't even a
00:15:21
concept for me to go and do go do the
00:15:24
bike jump when I was 5 years old, right?
00:15:26
So, it's always been something that I
00:15:27
haven't been afraid of and I've never
00:15:29
been afraid of rejection as well. I used
00:15:32
to do door cells and the mission you
00:15:35
literally are just walking around trying
00:15:37
to talk to people about Jesus for two
00:15:39
years straight and you just get denied
00:15:41
every single day and you're just hoping
00:15:43
to have like a small sliver of success
00:15:46
for what you actually do. And so that
00:15:49
definitely helped.
00:15:50
My mission more so taught me about the
00:15:53
effects of mass migration because I
00:15:55
would see so many people fleeing
00:15:56
countries like Venezuela and then I came
00:15:58
to the back to the US and I saw what was
00:16:00
happening at the border and I was able
00:16:02
to learn Spanish. But the I think just
00:16:04
like my upbringing in general being the
00:16:06
youngest brother and then also uh my
00:16:09
morals from being a member of the Church
00:16:11
of Jesus Christ Latterday Saints. I
00:16:12
don't drink, I don't smoke, I don't do
00:16:14
any of that. So I feel like I have a
00:16:16
advantage for compared to a lot of
00:16:18
people as far as like my mind's always
00:16:21
I'm not getting skewed with addictions
00:16:23
or trying to go and do something else.
00:16:26
>> Nick, are you still very religious?
00:16:28
>> Yeah, I am.
00:16:29
>> Sax, what's your take on this? And um
00:16:32
the question I asked Freeberg, which you
00:16:33
didn't get to, maybe you could take,
00:16:35
which is this hasn't seemed to made the
00:16:37
make the the national uh press, but it
00:16:40
has been on the local and obviously it's
00:16:43
on X. Maybe you could give your
00:16:44
handicapping of the media sphere and
00:16:48
Nick's role in it as you see it in 2025.
00:16:51
>> Well, I think it's an indictment of the
00:16:53
press. They haven't covered this and
00:16:55
they still haven't covered Nick's video,
00:16:57
which is now, like you said, a viral
00:16:59
video with hundreds of millions of views
00:17:01
and everyone can see what's happening.
00:17:02
You basically have this huge
00:17:05
multi-billion dollar fraud taking place.
00:17:08
Yes, there were stories going back a
00:17:10
decade like you said Jason, but they
00:17:12
were isolated stories where they could
00:17:13
be portrayed that way. And I think what
00:17:16
Nick has done is show that the fraud is
00:17:18
massive and in plain sight and no one
00:17:20
bothered, no one cared enough to expose
00:17:22
it. And you know, Nick, you did this by
00:17:25
just going around to all these supposed
00:17:27
daycare centers which are receiving
00:17:29
vouchers from the government anywhere
00:17:30
from what one and a half to $4 million
00:17:33
per daycare center per year based on
00:17:36
fictional enrollments of children. And
00:17:39
these centers aren't even operating and
00:17:41
they're collecting millions from the
00:17:42
government. All told, I guess it's adds
00:17:44
up to 8 to 10 billion. So this is
00:17:47
taxpayer money that's being stolen from
00:17:49
Minnesota that's being stolen by this
00:17:52
Somali
00:17:53
community basically. And I think the
00:17:56
story's gone viral because it includes
00:17:58
so many aspects of dysfunction. I mean,
00:18:01
you've got the issue of illegal
00:18:03
immigrants. Some of the people in the
00:18:05
Somali community got here illegally.
00:18:07
Some of them didn't. You then have these
00:18:10
progressive judges who foolishly voided
00:18:15
convictions of some of the fraudsters
00:18:17
who were doing this. I mean it's just um
00:18:19
classic example of suicidal empathy or
00:18:21
something like that. So you have that
00:18:23
aspect of the story and then you've got
00:18:25
the political corruption. Again these
00:18:26
are not isolated incidents. This is a a
00:18:29
case where I think we have to see this
00:18:31
as a system at work not just an example
00:18:34
of like a few isolated fraudsters.
00:18:36
There's some roundt tripping here where
00:18:38
some of the funds that are going into
00:18:40
the pockets of the Somali community
00:18:41
through this fraud end up back in the
00:18:43
hands of politicians. And the really
00:18:45
extreme example of this is that Tim
00:18:47
Waltz even changed the flag of Minnesota
00:18:51
to resemble the Somali flag. I mean, he
00:18:54
lowered the old flag and raised this new
00:18:55
flag to that resembles the Somali flag,
00:18:59
which shows the political clout of this
00:19:01
community, which is why I think a lot of
00:19:03
politicians turned a blind eye to what
00:19:04
was going on. So, I just think you've
00:19:06
got all the ingredients here of this
00:19:08
story. You've got this suicidal
00:19:10
immigration policy that we've had
00:19:11
combined with massive government fraud
00:19:14
with dereliction of duty and
00:19:16
incompetence
00:19:18
combined with political corruption. And
00:19:20
that's why the story is going viral and
00:19:22
has gotten hundreds of millions of
00:19:23
views. So kudos to you, Nick. And of
00:19:25
course, the way that they are defending
00:19:28
themselves. Well, first of all, the
00:19:29
press is trying to ignore the story as
00:19:30
much as possible. But to the extent that
00:19:32
they
00:19:34
have to confront it, what they do is
00:19:36
just accuse us of being white supremacy,
00:19:38
that anyone who notices that this fraud
00:19:41
is being perpetrated by this Somalian
00:19:43
community, that somehow that must be
00:19:45
racial animist, that's the only reason
00:19:46
people care about or something like
00:19:48
that. And so they've accused Nick. And
00:19:50
that actually is the last element here,
00:19:51
which is again this tired, worn out
00:19:54
trope of accusing anyone who threatens
00:19:58
this corrupt government machine of being
00:20:00
somehow racist. Any event, let me stop
00:20:02
there. Nick, let me get your reaction to
00:20:04
all of that.
00:20:04
>> Yeah. No, I love everything you said
00:20:06
because it's so true, especially like
00:20:08
for instance, they found a man here with
00:20:09
$7 million he had committed in fraud and
00:20:11
then the judge overturned it, right? And
00:20:14
then Tim Waltz is calling people like me
00:20:16
a white sup white supremacy. He says
00:20:18
we're acting on white supremacy. No,
00:20:21
Tim, it's millions and billions of
00:20:23
dollars in fraud of hardworking motan
00:20:25
people that's being sent who knows
00:20:27
where. And so it's not like and then
00:20:29
today I'm just looking at the media and
00:20:31
people are it was the craziest thing. I
00:20:34
get on there and people are starting to
00:20:35
say all these like crazy allegations
00:20:37
about me. I'm like whoa where are you
00:20:39
guys? People have even came out say said
00:20:41
I'm like a a pedto. It's like what? Like
00:20:44
I literally just went and did the job
00:20:45
that everyone's been wanting to see done
00:20:47
for years, right? And I just brought
00:20:50
limelight to everything, tried to make
00:20:51
it as uh just a simple issue about fraud
00:20:55
happening.
00:20:55
>> Let's just be clear. You just went to
00:20:57
these daycarees and just I I looked up
00:20:59
the CCAP that you mentioned. It's the
00:21:02
Minnesota Child Care Assistance Program
00:21:04
is what CCAP stands for. And it's a
00:21:06
state administered program, but it's
00:21:08
funded largely by federal dollars to
00:21:11
subsidize childare for low-income
00:21:13
families. So, it's not just motans who
00:21:15
are paying for this. It's all of us
00:21:17
through our federal tax dollars. And I'm
00:21:19
seeing a lot of follow-on commentators
00:21:22
in other states now saying, "Hey, you
00:21:24
know what? In Ohio or in the state of
00:21:26
Washington, we're looking at the
00:21:28
government roles and we're seeing that
00:21:30
there's over 500 Somali owned daycare
00:21:33
centers." And by the way, that's just
00:21:35
like one type of fraud or one type of
00:21:38
very suspicious behavior, but you can
00:21:40
start to see that people are starting to
00:21:42
pull the thread here and they're seeing
00:21:44
like where this fraud goes. And it's
00:21:46
starting to raise questions about lots
00:21:47
of other government programs as well.
00:21:50
For example, in California, we have $24
00:21:53
billion going to quote unquote homeless
00:21:56
programs. And yet, the number of
00:21:57
homeless people keeps rising. And you
00:21:59
know, everyone knows it's called the
00:22:00
homeless industrial complex. they can't
00:22:02
pass an audit. The state refuses to even
00:22:05
permit an audit. So, we know there's
00:22:07
massive fraud going on in that program.
00:22:08
There's massive fraud going on in
00:22:11
entitlements across the country. And I
00:22:13
think part of the reason why Nick's
00:22:15
video has gone viral here is people can
00:22:17
kind of feel that the whole country is
00:22:19
really being eaten alive by this fraud
00:22:22
and corruption. And it is a huge part of
00:22:25
why we have such a huge deficit, why we
00:22:27
have so much government debt. And it
00:22:29
feels like finally someone's blowing a
00:22:31
lid on it. And Nick, it feels like
00:22:33
you're achieving what Doge set out to
00:22:36
do. And I think there's no one feeling
00:22:37
more vindicated right now than Elon Musk
00:22:40
because literally some of the things
00:22:42
that he was saying back in February, you
00:22:45
have now proven true that there's huge
00:22:47
amounts of of entitlement fraud. Some of
00:22:49
that money that is stolen then goes to
00:22:51
politicians who then either support the
00:22:54
expansion of that system or turn a blind
00:22:56
eye to what's going on. And some of this
00:22:58
is even connected, I think, to voter
00:23:00
fraud. So, you're talking about here
00:23:02
stolen money maybe leading to stolen
00:23:04
elections. I mean, it really feels like
00:23:06
you've kicked this rock over and we're
00:23:09
starting to see a bunch of nasty things
00:23:12
underneath it. And what I think is
00:23:15
really cool is that you're inspiring
00:23:16
copycats. Now, some people have called
00:23:18
this decentralized Doge where now, you
00:23:20
know, hopefully we get a thousand or a
00:23:22
million Nick Shirley's all over the
00:23:24
country who start to show up and try to
00:23:27
shine a spotlight on what's going on
00:23:29
with all these government programs.
00:23:32
>> Yeah, I think it's essential that people
00:23:33
realize what's actually happening and
00:23:35
realize that, like you said, like we are
00:23:37
getting eaten from the inside. Like, why
00:23:39
is our money going to these places? We
00:23:41
we always talk about Tim WS was ranting
00:23:43
about healthcare the other week. I'm
00:23:44
like, well, maybe you shouldn't be
00:23:46
giving hundreds of millions of dollars
00:23:47
to healthcare companies that have
00:23:49
nothing to show when you go to their
00:23:51
business
00:23:53
and all the other stuff that goes along
00:23:55
with what you were saying. Like, yes,
00:23:57
this like I think Elon's why it sparked
00:23:59
Elon's interest is because it's
00:24:01
physically showing people with their
00:24:02
eyes, not just a contract. And it's
00:24:06
sparked such con such conversation
00:24:08
across the internet because it's
00:24:10
something people can physically see and
00:24:12
people are actually feeling inside of
00:24:14
their communities.
00:24:15
>> Nick, do you think that the fraudsters
00:24:17
are going to get a little bit better at
00:24:18
covering their tracks now that you've
00:24:20
exposed them? Cuz I I feel like one of
00:24:21
the things that was really amazing is
00:24:24
you would just show up at these
00:24:26
daycarees that, you know, you can see
00:24:27
from the government roles are receiving
00:24:29
millions of dollars. They call
00:24:30
themselves a learning center, but they
00:24:32
misspell the word learning. So, it's a
00:24:34
learing center and it's these cinder
00:24:37
block buildings like there's there's no
00:24:40
reception. There's no one there. I mean,
00:24:42
it's almost like they've made it too
00:24:44
obvious. Then there were cases where you
00:24:46
would have people that got busted a
00:24:48
decade ago. The locations didn't even
00:24:49
change. They just renamed those
00:24:51
fraudulent businesses and they were
00:24:52
literally operating from the same
00:24:54
locations a decade later. I mean, it's
00:24:56
almost like there was just no attention
00:24:59
paid whatsoever to where this money was
00:25:01
going. And I'm just I I guess the only
00:25:04
thing I'm kind of worried about now is
00:25:05
that with you blowing the lid off this
00:25:07
thing is whether the frauders are just
00:25:09
going to get better at covering their
00:25:10
tracks.
00:25:11
>> Yeah. Well, I think that they're gonna
00:25:12
have to look into where they're sending
00:25:14
all this money, right? Because they if
00:25:16
they wanted to really confront this
00:25:17
fraud, they could have just cut off the
00:25:19
they could have just cut off the money
00:25:20
and said, "All right, one sec. Let's
00:25:22
take a month. Let's figure this out."
00:25:23
But no, they just kept giving more and
00:25:25
more and more and they even started
00:25:27
expanding it. For instance, how does a
00:25:29
place just have an increase in autism?
00:25:31
like how does that happen? Yeah, it
00:25:33
start it made me wonder whether a lot of
00:25:35
our statistics about issues like that
00:25:38
like autism like to what extent are they
00:25:40
manufactured because we're creating this
00:25:43
huge incentive for people to create
00:25:46
cases of autism of these like you know
00:25:48
fraudulent
00:25:49
healthcare centers and it does make me
00:25:51
wonder like well can we trust any of the
00:25:53
numbers
00:25:54
>> just to be specific in the areas that
00:25:55
you guys are talking about where they
00:25:57
think there was fraud Medicaid claims
00:26:00
for autism in Minnesota spike like 130x
00:26:04
in 5 years.
00:26:06
>> X what the heck
00:26:09
X
00:26:10
130 not to 1.3. Oh my god.
00:26:13
>> From 2018 to 2023 it went from 3 million
00:26:16
to $400 million.
00:26:18
>> It's probably the water. It's probably
00:26:19
the water or vaccines. It could be
00:26:20
anything. Who knows what it could be? It
00:26:22
could be fraud.
00:26:24
>> Jason, I have a question for you which
00:26:25
is twofold. One, what do you think of
00:26:27
what Nick did if you've watched the
00:26:28
video? two, why are your former brethren
00:26:32
trying to bury this story?
00:26:34
>> So, I think Nick is doing the most
00:26:36
fundamental act of journalism for which
00:26:38
he should be lauded and is correctly
00:26:39
being lauded, which is just go knock on
00:26:41
a door, right? And asked the most simple
00:26:43
question in the most unbiased way. Now,
00:26:46
>> are there kids here? And can I send my
00:26:48
kid here?
00:26:49
>> You know, I I looked into Nick. I looked
00:26:51
into your videos.
00:26:52
>> Most basic could you get?
00:26:53
>> Yeah. Incredible. And they failed test.
00:26:56
They failed the most basic test. the
00:26:58
most basic simple test and you know I
00:27:00
looked into all of Nick's videos because
00:27:02
I saw
00:27:03
>> anytime you do something like this
00:27:04
investigative journalism people will
00:27:06
correctly and you alluded to this chumat
00:27:08
in the beginning start to vet the veter
00:27:10
right and I was like okay tell me
00:27:11
everything about Nick Shirley let's look
00:27:13
at all his Twitter feed let's look at
00:27:14
his YouTube videos like who is this
00:27:16
person why are they doing what they're
00:27:18
doing and I watched Nick as you ask
00:27:20
questions at a Bernie rally uh and uh
00:27:24
some other events when you're doing your
00:27:25
man on the street stuff which is also
00:27:26
very brave because you can get your ass
00:27:28
kicked. I don't know if you have
00:27:29
security or not yet, but you're going to
00:27:30
need it. Do you have security?
00:27:32
>> Yeah, now I have to.
00:27:33
>> Yeah, of course. So, this is brave
00:27:35
stuff, but this is the core task of
00:27:38
journalism is to get this primary
00:27:40
information and let the viewer decide
00:27:41
without bias. And we can criticize 60
00:27:44
Minutes and the New York Times and there
00:27:46
there's plenty to go around, but if you
00:27:47
look at the history of it, I think Nick,
00:27:48
you've got incredible potential to sort
00:27:50
of take the baton that you saw from that
00:27:52
local newscaster on Fox 9 and keep
00:27:54
building on that. And to your point,
00:27:56
David, I think Freberg you made about uh
00:27:58
crowdfunding and crowdsourcing this
00:28:01
journalism, it's it's going to be very
00:28:03
powerful in the future. If you look at
00:28:06
how long it takes though to do this,
00:28:08
these things take decades. So I think
00:28:09
you got to stay on the story and if you
00:28:12
look at the Catholic Church spotlight,
00:28:13
the frontline documentary, you look at
00:28:15
60 Minutes
00:28:17
and what they did with Big Tobacco,
00:28:19
these things do take a long time. So you
00:28:21
should keep your hooks into them and
00:28:23
keep working it. The other thing I
00:28:24
thought that's really interesting here
00:28:26
is this could be the opportunity right
00:28:28
now is everybody in the United States
00:28:31
who is a taxpayer does not want to see
00:28:32
fraud. They don't want to see waste.
00:28:34
They don't want to see abuse. So
00:28:36
although Nick, I I think your leanings
00:28:37
are right.
00:28:38
>> Are you sure?
00:28:39
>> I am pretty sure that 90% of Americans
00:28:42
don't want to see their tax dollars
00:28:44
wasted.
00:28:45
>> What if there's a group of people that
00:28:47
would be okay with it even if they were
00:28:49
told it was fraudulent, but it allows
00:28:50
their side to keep winning? Yeah, I I
00:28:53
that's like a conspiracy there. I don't
00:28:55
think
00:28:55
>> No, it's not a I'm just saying it's a
00:28:57
boundary condition. I just wonder if you
00:29:00
actually put it there that you would get
00:29:02
95% that says this is wrong.
00:29:04
>> Yeah, I think you'll get 95% that will
00:29:06
say it's wrong. But we'll see. And what
00:29:07
I think could happen here is that this
00:29:09
could be the issue that pulls Americans
00:29:11
together that we could have consensus
00:29:12
on, which is we don't want to waste our
00:29:15
tax dollars. Putting aside the fact,
00:29:16
Nick, that you're conservative, it
00:29:18
doesn't matter. You're religious. It
00:29:20
doesn't matter. What matters is the
00:29:21
truth. And the truth here is there's
00:29:23
massive waste, fraud, and abuse. And
00:29:25
Elon saw it. Elon told us, he confirmed
00:29:28
it. And he got attacked for it. Elon was
00:29:31
100% right. Everybody who attacked him,
00:29:34
they may not have liked his tactics and
00:29:35
how fast he was going and locking doors
00:29:37
and turning off credit cards, his
00:29:38
techniques, they may not have liked, but
00:29:40
we as Americans can all get behind not
00:29:43
allowing any more fraud. And we should
00:29:45
not be increasing taxes into a system
00:29:48
that is ripe with fraud. that I think
00:29:50
everybody will agree on. And when all
00:29:52
that fraud happens, it keeps us from
00:29:54
actually sending the money to things
00:29:56
that we might actually as a country uh
00:29:58
that might pull us together even more,
00:30:00
which is like I don't know, maybe we
00:30:01
could have universal healthcare like the
00:30:03
other 80 most developed countries in the
00:30:04
world if we rooted out this fraud
00:30:06
because there's just far too much waste.
00:30:08
And so I I think you did a great job,
00:30:09
Nick. And I think this is where we could
00:30:13
see massive opportunity for investment
00:30:16
in new publications
00:30:18
and new news sources that take folks
00:30:20
like Nick, pair them with two or three
00:30:22
other folks and now you got a team which
00:30:24
it seems like you're building and then
00:30:26
you could have a permanent funding
00:30:27
source. So if you could get
00:30:29
>> You only have GoFundMe Nick right now.
00:30:31
>> No, I don't have GoFundMe. I just accept
00:30:33
donations via Venmo or if you want to
00:30:36
send
00:30:36
>> Yeah. You should start a subscription
00:30:37
service, you know, like Substack or any
00:30:39
of the other ones, Beehive, and you
00:30:41
should literally use this momentum to
00:30:43
get to 10 to 100 to a million dollars a
00:30:46
month in donations that reoccur. That's
00:30:48
the key is the reoccurring. Go ahead.
00:30:49
>> You have young people reaching out to
00:30:50
you that want to do this work with you
00:30:52
now.
00:30:53
>> Yes. I think people are interested like
00:30:55
people are like, "How do we start or how
00:30:56
do we do it?" And uh it's a good
00:30:58
question. I think most people like I
00:31:00
didn't I didn't go ask somebody how to
00:31:02
do it. I just went and did it.
00:31:03
>> Mhm. And so a lot of people are so
00:31:06
scared to take those steps when in
00:31:07
reality you just have to go do things if
00:31:09
you want to make stuff happen.
00:31:10
>> There was an image that I saw on X and
00:31:13
it had a ship
00:31:16
running into the iceberg. Nick, maybe
00:31:18
you can find it. And the ship's name was
00:31:21
the USS taxpayer. And the top of the
00:31:24
iceberg that was visible was Minnesota,
00:31:27
but the bottom of the iceberg was
00:31:28
California,
00:31:30
which
00:31:31
>> that's great. which is the fourth
00:31:33
largest economy in the world is just the
00:31:36
state of California. I don't know if you
00:31:37
can just show the tweet from Kevin
00:31:39
Kylie,
00:31:41
which I retweeted with a couple of
00:31:42
things on. Here it is. What he says is a
00:31:44
third of college applicants were fake.
00:31:48
17 billion was spent on high-speed rail
00:31:50
with no track. 24 billion in
00:31:53
homelessness funds disappeared. 32
00:31:56
billion was lost to unemployment fraud.
00:31:59
medical and SNAP are rife with improper
00:32:01
payments. It's probably a hundred
00:32:03
billion dollars a year that's being just
00:32:05
completely pilered out of California.
00:32:07
So, I don't know if Nick Shirley you
00:32:10
have the time to come out west, but if
00:32:12
you do, you're just going to find an
00:32:14
entire treasure trove of opportunities
00:32:15
to look at. Oh, there's massive fraud in
00:32:18
California. I mean, the homelessness has
00:32:20
just increased as they receive more
00:32:22
money. And that's just one part of it.
00:32:24
And like you talked about the the light
00:32:25
rail and everything like that. Yeah. The
00:32:27
fraud is like crazy in California and
00:32:30
they have the highest taxes.
00:32:31
>> Yeah. They want more.
00:32:33
>> Yeah.
00:32:34
>> Nick, has anybody approached you about
00:32:35
this thing? I tweeted it about it. I had
00:32:37
never heard about it, but these guys
00:32:39
educated me on it called Quit, which is
00:32:41
this framework where you can actually
00:32:44
sue on behalf of the state and on behalf
00:32:47
of taxpayers. Has anybody approached you
00:32:49
about thinking about using all of the
00:32:52
information that you've garnered to try
00:32:53
to launch some of these lawsuits or No.
00:32:56
Yeah, I actually had somebody reach out
00:32:57
to me the other day about it. So, I'm
00:32:59
going to actually hop on a phone call
00:33:00
with that guy.
00:33:01
>> Yeah. Also, as I understand it, some of
00:33:03
these whistleblower laws reward the
00:33:05
whistleblower with something like 20 to
00:33:06
30% of amounts that
00:33:08
>> up to 50% in some cases.
00:33:10
>> Yeah. That are I don't know if it's like
00:33:12
fines or it's amounts that are
00:33:13
recaptured.
00:33:14
>> Recaptured. Yeah.
00:33:15
>> But I don't know, Nick, you could become
00:33:17
a billionaire here just with all the
00:33:18
billions you've exposed.
00:33:21
>> I got I got to sit down and figure it
00:33:22
out. I know that's not why you're in it,
00:33:24
but
00:33:24
>> you'd be the most well-loved billionaire
00:33:26
in America if you didn't.
00:33:27
>> Absolutely. Well, the way to do it is,
00:33:28
you know, since you're drafting off of
00:33:30
these other news reports, is to set up
00:33:32
your own tip line. So, Nick, what's your
00:33:33
website or do you have a website where
00:33:35
people can donate? And do you have a tip
00:33:37
line? Because you wouldn't get the
00:33:40
whistleblow awards for the stuff Fox9's
00:33:42
been doing for a decade, but for the
00:33:44
next one, you could. So, what is your
00:33:46
website where people can donate, Nick?
00:33:48
>> Yeah, everything just on social media.
00:33:50
So they can message me on any platform.
00:33:52
I should probably get a website going.
00:33:54
Um, so
00:33:57
>> Nick, what's your social media handle
00:33:59
where people can DM you and donate?
00:34:01
>> Yeah, it's just Nick Shirley. And if you
00:34:02
go on X, I do have my tip section open.
00:34:04
So if you would like to donate there,
00:34:06
that gives them all the whether it be
00:34:08
Venmo, Cash App, Crypto, you can all do
00:34:11
it right there.
00:34:11
>> So X.com/nickshirley,
00:34:14
you can go right there and you can tip
00:34:15
if you want to support this kind of
00:34:16
research. Well done, Nick.
00:34:19
>> Thank you. Are you spending all your
00:34:21
time in the US or are you still thinking
00:34:22
about some international stuff?
00:34:25
>> Yeah, I have a international trips
00:34:27
planned for this month as well that I
00:34:29
had planned before this because it's
00:34:31
funny that like everyone's talking about
00:34:32
this fraud stuff, but I I have a
00:34:34
business I have to run with my YouTube
00:34:36
videos. I've been posting every week
00:34:37
consistently for the past 104 weeks or
00:34:40
so at this point. And so I have to keep
00:34:42
moving on and keep producing content for
00:34:43
my followers. So yeah, I do have other
00:34:45
videos and I have other places I'm going
00:34:47
to go film as well. Look into those
00:34:48
whistleblower laws. I think uh
00:34:50
>> Yeah, make some money. Make some money,
00:34:52
man.
00:34:55
>> No shame in the profit. You probably get
00:34:57
a ton of investors.
00:34:59
>> Yeah. Yeah. I need to look into all that
00:35:01
stuff. So, it's been cool. Like the cryp
00:35:03
I've had like some crypto communities
00:35:05
that have like even like funded money. I
00:35:07
have I'm like just down on my laptop at
00:35:09
night and people are sending me money.
00:35:10
I'm like, what's going on?
00:35:11
>> It's awesome.
00:35:12
>> Well done.
00:35:12
>> What's the sweatshirt you're wearing?
00:35:14
Just show us the sweatshirt. the quality
00:35:16
of
00:35:16
>> lyricsing
00:35:17
center. Is that for sale now? Is that
00:35:19
the merch?
00:35:19
>> Yeah. I'm going to go do a video outside
00:35:21
of it right now. And uh
00:35:23
>> you put on your YouTube channel for
00:35:24
merch?
00:35:25
>> Yeah, I'll put on my YouTube and I'll
00:35:26
just put like on X. I'll probably like a
00:35:28
one time drop.
00:35:28
>> Oh my god, dude.
00:35:30
>> You saw the guy who I guess runs that
00:35:32
place or owns it. He had a video on X
00:35:35
today saying that. No, no, no, no, no,
00:35:37
no. This is a real daycare center. Nick
00:35:39
just happened to come by in the morning
00:35:41
and that's when all the kids are at
00:35:42
school. So, he just came at the wrong
00:35:45
time.
00:35:45
>> What was super funny about that too is
00:35:48
the Department of Children was doing a
00:35:50
live feed at that same time and she said
00:35:52
that the daycare had was closed one week
00:35:55
ago and it closed after I posted my
00:35:58
initial video. So, like while he while
00:36:01
he was saying that it's open, the lady
00:36:03
who runs the whole thing or runs
00:36:05
something in the government said they
00:36:06
closed it last week.
00:36:08
>> Sorry, Nick. Just one before we lose
00:36:09
you, do do you have evidence or have you
00:36:11
collected evidence that people within
00:36:13
the agencies are part of the fraud
00:36:16
syndicate and that they're participating
00:36:18
in the fraud?
00:36:21
It's hard to say like that you have like
00:36:23
the paper trail of it because you don't
00:36:24
it's hard to get get me the access to
00:36:26
that. But um I think if you just look at
00:36:29
like Elon Omar's net worth, if it's true
00:36:31
that went from negative to 30 million
00:36:33
since she's been in Congress.
00:36:36
>> Yeah.
00:36:38
Let's Yeah, let's make sure we put a
00:36:39
couple allegedly.
00:36:40
>> No, it's all over Yeah, you're right.
00:36:41
It's all over social media, but
00:36:43
>> Yeah, which means it could be wrong. It
00:36:45
could be wrong.
00:36:45
>> I haven't seen a fact check. I mean,
00:36:47
I've not seen it.
00:36:49
>> Always put an allegedly there. Just
00:36:50
>> Yeah. Also, I think I think Congress
00:36:52
people can report a range. I think the
00:36:53
range is 6 to 30. So, they use the
00:36:56
upper, but let's just throw in a couple
00:36:58
of allegedly.
00:36:58
>> Still, she went from negative to being a
00:37:00
multi-millionaire in
00:37:01
>> I'm not debating that. I think the trend
00:37:03
the trend is quite curious, Nick. I'm
00:37:05
not talking about the federal
00:37:07
congressperson. I'm talking about people
00:37:09
within these agencies that are signing
00:37:11
off on the check, signing off on these
00:37:12
centers. In your investigation and the
00:37:14
conversations you have, do you have
00:37:16
reason to believe that the individuals
00:37:18
within the agencies within the
00:37:20
government agencies are complicit and
00:37:22
partnering and participating in the
00:37:25
economic fraud?
00:37:26
>> Yeah, 100%. Because a lot of these
00:37:28
daycarees, there's six, seven violations
00:37:31
and they're still continuing to give
00:37:32
funding to these daycarees. Um, and they
00:37:35
have the same name, the same person has
00:37:37
opened up. I was in one of their fraud
00:37:39
committee meetings. The same person had
00:37:40
been opening up daycarees and healthcare
00:37:43
companies and it was all big. W They had
00:37:46
all the they had all mapped out and
00:37:48
somebody from inside the government in
00:37:50
Minnesota still continuing to write
00:37:52
these checks. So,
00:37:54
>> they're not they can't be dumb, right?
00:37:56
They can't be that dumb, I guess, is the
00:37:58
point. Well, I mean, it's possible that
00:38:00
they're totally incompetent or they're
00:38:02
turning a blind eye or they're getting
00:38:05
payments. Probably one of the first two,
00:38:07
but who knows, right?
00:38:08
>> Well, the thing with the money they're
00:38:09
receiving is that CCAP money, it's a tax
00:38:12
exempt. And so, they they literally get
00:38:14
like the the money and they get it in
00:38:16
cash somehow. They don't pay the women
00:38:18
that are working there. Like, there's
00:38:19
videos of them just handing the ladies
00:38:21
cash. In Muslims, they're able to have
00:38:22
four wives and so they're able to
00:38:24
collect the welfare on top of that.
00:38:26
That's why 81% of the population, small
00:38:28
population side of Minnesota is on
00:38:29
welfare because they're actually not
00:38:31
paying the people. They're just
00:38:32
collecting the welfare from it. And then
00:38:34
if you go into any of the grocery stores
00:38:36
here, they're not grocery stores. They
00:38:38
have like six different shops inside of
00:38:39
them. And they all have money
00:38:40
transferring sites inside there where
00:38:42
they're just siphoning money out to
00:38:44
other countries and back home. And a lot
00:38:47
of time you can there's actually a Fox
00:38:50
did a thing on it in 2017. Um, and I
00:38:53
actually had somebody who's going to be
00:38:54
in my next video talking about this. He
00:38:56
used to work at TSA. And the Somalians
00:38:58
would literally bring in millions of
00:38:59
dollars in cash through TSA and they'd
00:39:02
fly from there to Atlanta and then to
00:39:04
Dubai and then cuz there's no taxes in
00:39:06
Dubai, they then send that money back to
00:39:08
Somalia. And so like the rumors of them
00:39:11
funding al-Shabaab, they're real because
00:39:14
they've been able to funnel all this
00:39:15
money and once they go through the TSA
00:39:18
with a luggage full of cash and they
00:39:20
make it to Dubai, they're able to send
00:39:22
it to wherever they'd like.
00:39:23
>> That's a terrorist group or
00:39:24
>> Yeah, the terrorist group. Nick, let me
00:39:27
ask you another question.
00:39:30
In the last two days since your video
00:39:32
went viral, we've seen the mayor of
00:39:34
Minneapolis and the governor come out
00:39:37
and effectively say, "Hey, we need to
00:39:39
protect this community." Why do you
00:39:41
think the leadership is not up in arms
00:39:44
on the obvious fraud that you've
00:39:46
demonstrated so clearly? Why are the
00:39:48
government officials within Minnesota
00:39:50
not throwing their hands up saying, "We
00:39:51
have to make this stop right away." Why
00:39:53
are they taking a defensive posturing?
00:39:56
they're like incompetent or do you think
00:39:57
there's like complicit behavior here?
00:39:59
>> It's because if there that's such a
00:40:02
large group of votes that they can
00:40:03
receive and David said it as well,
00:40:06
there's some weird voter fraud that's
00:40:07
also taking place here where you just
00:40:09
literally need a license. Like even in
00:40:11
one of their committee meeting meetings,
00:40:13
they said that. But essentially like
00:40:15
this happens in the UK too is that when
00:40:17
they bring in uh specifically Muslims to
00:40:20
a lot of these areas and then comes time
00:40:22
to vote, the leader of the mosque or the
00:40:24
leader of this apartment complex will
00:40:25
say, "All right, everyone, now it's time
00:40:27
to go vote and let's go vote for this
00:40:29
person." And because it it the the
00:40:33
it's tough because of uh Islam and
00:40:35
everything like their religion
00:40:39
like they should be more conservative if
00:40:40
they're actually voting off what they
00:40:42
care for because of their values, but
00:40:45
they're always voting democratically.
00:40:46
They're always voting for the Democrats.
00:40:49
Like if you people are going to give
00:40:51
more money
00:40:53
and so they're not really voting for
00:40:55
what they actually believe in. They're
00:40:56
voting for who's going to keep funding
00:40:57
them and who's going to keep writing the
00:40:59
checks. And so that's why you'll see
00:41:01
them going to eat at a Somalian
00:41:03
restaurant and you can tell the guys are
00:41:05
ready to barf when he's trying to put
00:41:07
the food into his mouth and then the
00:41:08
lady putting the hijab on inside of one
00:41:11
of their grocery stores. It's just all
00:41:13
panhandering to get the most.
00:41:15
>> Nick, you mentioned this terrorist
00:41:17
allegation and the funding of terrorism
00:41:19
from the social programs. Is that
00:41:21
something you've firsthand investigated
00:41:24
or something you read online or
00:41:27
something you talked to an insider
00:41:28
about? Can you unpack that first because
00:41:30
that's a pretty explosive one and I know
00:41:32
Bessant has mentioned it but you can
00:41:34
unpack your firsthand knowledge of it if
00:41:37
>> well there's the reports from 2017 and
00:41:40
then it's also came out still coming out
00:41:42
and people are talking about that. I
00:41:44
think even the government, the US
00:41:46
government has said that as well. And
00:41:48
also I've talked to people as well
00:41:50
inside of these grocery shops where they
00:41:52
have 10 different stores and I asked
00:41:54
them like what do they do and they have
00:41:55
these shops where they wire off the
00:41:57
money to Africa.
00:41:59
>> Right. But specifically the funding of
00:42:01
terrorism, you don't have firsthand
00:42:02
knowledge of that just to be clear.
00:42:04
>> Well, I don't think uh Somalia I I don't
00:42:07
think it's like very ran very well. So
00:42:10
>> I mean there's a lot of corruption
00:42:11
there. I mean when your main import and
00:42:13
exports pirates and piracy I don't think
00:42:16
that's probably the best thing.
00:42:17
>> Okay, got it. Just want to confirm
00:42:19
because it's like a explosive
00:42:20
allegation. Want to make sure you're not
00:42:22
saying you know this
00:42:23
>> said it on national TV today Jay Cal
00:42:26
this morning.
00:42:26
>> Yeah. No, no, I know. That's why I'm the
00:42:28
way Nick phrased it. I wanted to make
00:42:30
sure if there was firsthand knowledge he
00:42:32
had or if he was just referencing the
00:42:33
the best and stuff.
00:42:34
>> Yeah, it's really tough to say like it
00:42:36
firsthand because it's always like how
00:42:39
how does somebody just go get the
00:42:40
papers? And so that's why you rely on
00:42:42
the government for instance like he just
00:42:44
said like Besset comes out and talks
00:42:45
about it and so like it's our
00:42:47
responsibility to keep investigating and
00:42:49
looking into it and then also trusting
00:42:51
the people that we trust.
00:42:52
>> Is that going to be your international
00:42:54
trip? Are you going to go try to track
00:42:55
that down on the international if even
00:42:57
$1, if even $1 went abroad to a terror
00:43:02
network?
00:43:03
>> This is an entirely whole new kettle of
00:43:05
fish because now you're not just talking
00:43:07
about domestic fraud. Now you're talking
00:43:08
about international terrorism. And now
00:43:11
you're going to bring in every single
00:43:13
agency of the United States of America
00:43:16
who will have an opinion.
00:43:17
>> Yeah.
00:43:18
>> That is bad news bearsers for these
00:43:20
guys. If this is true,
00:43:21
>> I'll tell you where you double clicked
00:43:23
on it. This is like this could be the
00:43:24
next story.
00:43:25
>> Watch out. Yeah. And I'll tell you where
00:43:27
I have the most concern as a citizen.
00:43:30
I'd be most concerned about these
00:43:33
members of the government that are
00:43:36
complicit or turning a blind eye to
00:43:38
allow this capital to flow to
00:43:40
individuals who then turn around and use
00:43:42
that capital to make donations to those
00:43:44
government representatives campaigns. If
00:43:46
that paper trail is found that the
00:43:48
government representatives are causing
00:43:50
money to flow basically back into their
00:43:52
own pockets or their own campaign
00:43:54
coffers, that to me is the most
00:43:56
offensive thing as a citizen that not
00:43:58
only are they fraud, but
00:44:00
>> we already know that.
00:44:01
>> I've had mayors in California tell me
00:44:03
about that. Um who've given me firsthand
00:44:06
accounts of them knowing the family
00:44:07
members of people inside of the
00:44:09
government opening up nonprofits and
00:44:11
then that's how they get a lot of
00:44:13
campaign money.
00:44:14
>> Yeah. Look, there's a very important
00:44:15
word here that we haven't used. We've
00:44:18
talked about incompetence, greed, theft.
00:44:20
There's a very important word,
00:44:21
patronage. This is a patronage system.
00:44:24
An exac account called Amuse wrote a
00:44:26
really good blog post about this. Let me
00:44:28
just read you this part. Basically, this
00:44:29
fraud is is not incidental misconduct.
00:44:32
It is the patronage system operating
00:44:34
exactly as designed. Large welfare
00:44:36
states generate predictable cash flows.
00:44:38
Fragmented bureaucracies create blind
00:44:40
spots. Language barriers, slow audits,
00:44:42
cultural difference paralyzes
00:44:44
enforcement. When one operation is shut
00:44:46
down, another opens under a new name, a
00:44:49
new board, and the same people. Money
00:44:51
moves through layered nonprofits, shell
00:44:53
entities, and informal remittance
00:44:55
networks. Accountability evaporates. And
00:44:57
then, crucially, the system does not
00:44:59
require that all patrons be Somali. It
00:45:01
requires only that patrons be paid.
00:45:04
Non-Somali politicians learn quickly.
00:45:06
They adopt the language, symbolism, and
00:45:07
rituals of the community. They attend
00:45:09
the right events. They avoid
00:45:10
uncomfortable questions. In return, they
00:45:13
receive votes. Campaign muscle and money
00:45:16
and insulation from accusations of
00:45:18
racism or Islamophobia. Investigations
00:45:21
stall. Prosecutors hesitate. Regulators
00:45:23
retreat. The system expands. And play
00:45:25
this video. This is of Tim Waltz. Just
00:45:28
play that video.
00:45:29
>> Whoa. Wait a minute.
00:45:32
This is Tim Walsh, the governor of the
00:45:33
state, replacing their old flag with a
00:45:36
new flag that's designed to resemble the
00:45:39
flag of Somalia.
00:45:40
>> So the allegation, Saxs, just to be
00:45:43
clear, is they are giving this money
00:45:46
knowing it buys votes and knowing that
00:45:50
>> Somalian community is incredibly
00:45:51
wellorganized in Minnesota. There was an
00:45:54
interview with the attorney general
00:45:55
where he was saying that this is another
00:45:58
ex video that you can find. I think his
00:46:00
name is Keith Ellison. Anyway, he was
00:46:02
saying that the Somali community was
00:46:03
incredibly potent politically and was a
00:46:06
big reason why he got elected. And like
00:46:09
I said, it's very well organized and
00:46:12
they're turning to get their votes by
00:46:14
giving them this money to steal.
00:46:17
>> It's not even a question. It's a fact
00:46:18
that that's why they're g only after and
00:46:22
so they're they're allowing the fraud to
00:46:23
happen because of the votes. Wait,
00:46:25
that's just again that you're saying
00:46:28
that's a fact that they are
00:46:30
>> Please don't act shocked. Come on.
00:46:32
>> No, no, no. It's a It's an allegation. I
00:46:34
I just I would I would tell you a
00:46:36
journalist in training Nick to put
00:46:38
>> You think that's a coincidence allegedly
00:46:40
in the front of these things until you
00:46:42
actually know it's
00:46:42
>> Where did that new flag come from?
00:46:44
>> I I I'm not saying it's not pandering to
00:46:46
them, but to say it's quit proquo. Just
00:46:47
>> that's the same thing. Yeah. In instead
00:46:49
instead of taking Sax's advice here, my
00:46:51
best advice, put the word allegedly
00:46:53
until you know it's a fact. Don't say
00:46:55
it's a fact. Unless you know it's a
00:46:56
fact.
00:46:57
>> Allegedly. Okay.
00:46:58
>> Yeah. Just just so you don't get sued
00:47:00
and you know
00:47:01
>> I mean like is speaking the truth like
00:47:04
criminal because it is a fact.
00:47:06
>> Okay. Great. You say it's a fact.
00:47:08
>> How much more proof do you need, Jacob?
00:47:10
>> No. No. It's
00:47:10
>> You won't believe it until Tim Walls is
00:47:12
caught on video accepting an envelope
00:47:14
from, you know, one of these small
00:47:17
frauders. Not my point. My point is this
00:47:19
is political patronage and look, a lot
00:47:22
of it is incompetence and they probably
00:47:24
didn't think they're going to get
00:47:25
caught. But on top of that, it's turning
00:47:27
a blind eye to an obvious problem
00:47:29
because it's going to alienate a
00:47:31
critical demographic who supports and
00:47:34
has supported you in all of your
00:47:35
elections. It's that simple.
00:47:37
>> What's the poly market say, Jay Cullen,
00:47:39
whether Waltz is going to get
00:47:40
prosecuted, go to jail?
00:47:41
>> Let's find out from our friends at Poly
00:47:43
Market. Tim Waltz charged by dot dot dot
00:47:47
and there's a lightly traded uh $60,000
00:47:51
9% chance
00:47:53
>> 29% before 2027
00:47:55
>> and here's your other poly market will
00:47:57
anyone be charged over daycare fraud in
00:47:59
Minnesota by
00:48:01
the end of January the end of June the
00:48:03
end of December 56 91 94 so people are
00:48:06
betting somebody is going to be charged
00:48:08
over this and if Tim Waltz is
00:48:12
specifically knows about this and did it
00:48:14
to buy votes and that can be proven, he
00:48:15
should go to jail. And if he knows and
00:48:17
anyone over there knows that this money
00:48:19
has been routed to a terrorist
00:48:21
organization, that would be treasonous
00:48:22
and that would be an even higher level.
00:48:25
Uh so we need to investigate this
00:48:27
massively. So if Besson is listening,
00:48:29
friend of the pot, yeah, double click,
00:48:32
double click, double click.
00:48:34
>> It's already on Scott's agenda. That's
00:48:36
why he talked on TV talking about it,
00:48:38
dude. He's been all over it.
00:48:40
>> You can't hide now. that that this is
00:48:42
Pandora's
00:48:42
>> as part of that investigation. Someone
00:48:44
needs to investigate why these three
00:48:47
liberal judges have repeatedly refused
00:48:50
to hold Somali fraudsters accountable
00:48:53
even when the evidence is overwhelming
00:48:54
and a jury has convicted them.
00:48:57
>> Unbelievable.
00:48:57
>> These three judges set aside
00:48:59
convictions.
00:49:00
>> Well done, Nick Shirley. And uh next
00:49:02
time you have a great office,
00:49:04
>> please come on the pot again and and let
00:49:06
us know. Thank you. I appreciate you
00:49:07
guys. Appreciate all the side of
00:49:09
history.
00:49:09
>> Support on uh X and everything like that
00:49:11
means a lot.
00:49:12
>> And believe me, there's there's a ton
00:49:13
more in California.
00:49:15
>> Okay, let me just go around the horn
00:49:16
here. Lightning round Sachs. A year from
00:49:18
now, what will happen in relation to
00:49:21
what we've seen in Minnesota?
00:49:23
>> Well, I hope that there will be a
00:49:25
serious investigation. I hope that there
00:49:27
will be indictments. I hope there will
00:49:28
be deportations, hopefully massive
00:49:30
amounts of deportations. And I hope
00:49:32
there'll be impeachments of some of
00:49:34
these officials who let the fraud
00:49:36
happen.
00:49:37
>> So the country is being eaten alive it
00:49:40
feels like by fraud. Government funds
00:49:43
are being stolen. Votes are being
00:49:44
stolen. I believe elections are being
00:49:46
stolen. And it all comes from the fact
00:49:48
that the party of government doesn't
00:49:51
really care where the money goes. It's
00:49:53
all just patronage to them. Whether it's
00:49:55
to Somali daycarees or whether it's to
00:49:58
this high-speed rail line that doesn't
00:49:59
have one piece of track. I mean, how
00:50:01
much has California wasted on that?
00:50:03
>> Yeah.
00:50:04
>> Or 24 billion to the homelessness only
00:50:06
to see the homeless population increase.
00:50:07
Look, these politicians don't care how
00:50:10
the money is spent at all. All they care
00:50:13
about is rewarding their supporters.
00:50:15
That's the whole game. And then those
00:50:16
supporters round trip a portion of the
00:50:19
illotten gains they've gotten from the
00:50:20
government back to those politicians.
00:50:22
That's the whole game. And then when the
00:50:24
whole thing blows up because it's just
00:50:27
so corrupt and inefficient and so
00:50:29
absurd, what do they do? They try to
00:50:31
find productive people to scapegoat. And
00:50:34
they say that billionaires are your
00:50:35
problems. They'll blame billionaires for
00:50:36
that or they'll blame the tech
00:50:38
community. Look, the startup community
00:50:39
or the tech community is one of the I'd
00:50:41
say last extremely well functioning
00:50:44
parts of American society, but they
00:50:46
don't control it yet. And so that's what
00:50:48
the politicians will do is they will try
00:50:50
to find scapegoats to expand their
00:50:52
control and expand the size and scope of
00:50:54
the corrupt system that they're running.
00:50:56
>> Freeberg,
00:50:58
what do you think a year from now, where
00:51:01
will we be? And
00:51:04
what do you think this um says about
00:51:06
America at the end of the empire? And
00:51:08
yeah, which you've been focused on.
00:51:09
Yeah,
00:51:10
>> probably two things. So this is like
00:51:12
everyone pocketing the silverware as the
00:51:13
Titanic is sinking because the spiraling
00:51:16
spending, the lack of audits, the lack
00:51:19
of accountability
00:51:21
effectively enables an environment like
00:51:23
this because we've basically increased
00:51:25
government spending so much to basically
00:51:28
try and grow the economy, prop up the
00:51:30
debt, keep the debt service payments
00:51:32
flowing,
00:51:33
etc. So as a result, anytime you have a
00:51:36
bubble, and in this case, we have a
00:51:37
bubble in government spending, you have
00:51:40
frothy, fraud behavior. There's my guess
00:51:44
tip of the iceberg. Elon's estimate was
00:51:46
20% of federal spending falls under this
00:51:48
kind of fraud camp, could be more. And
00:51:50
then when you add in state and local
00:51:52
spending and you start to do the
00:51:54
accounting on all of this, we're
00:51:56
probably talking about a sizable
00:51:57
percentage of overall GDP that is
00:52:00
effectively theft through government
00:52:03
agencies or government checks being
00:52:05
written. And I think that's going to be
00:52:07
the great uncovering of 2026 is we're
00:52:10
going to see on the order of trillions
00:52:12
of dollars of
00:52:14
>> trillions
00:52:15
>> trillions of dollars of this sort of
00:52:16
behavior happening across the economy.
00:52:18
And I also think the other side, nothing
00:52:20
will happen. And and I think nothing
00:52:23
will happen because the cost is going to
00:52:25
be so significant. It's almost like
00:52:27
staring into the abyss. It's gonna make
00:52:28
people feel sick to try and address it.
00:52:31
>> Actually, let me ask you a question. How
00:52:33
do you differentiate between legal theft
00:52:35
and illegal theft? Meaning, I think what
00:52:37
the Somali daycarees were doing was
00:52:39
outright fraud and is illegal. But when
00:52:41
Stacy Abrams creates a NGO in the final
00:52:44
days of the Biden administration and
00:52:46
that gets stuffed with$2 billion
00:52:47
dollars, I mean technically I guess
00:52:50
that's legal, but it's clearly a
00:52:52
different kind of theft and fraud.
00:52:54
>> Would you throw up in your mouth when
00:52:55
you heard the news? That's the that's
00:52:57
the test.
00:52:58
>> That's the little test
00:53:01
that Yeah. And I call that the common
00:53:03
sense vomit in the mouth test. If you
00:53:06
don't pass the common sense vomit in the
00:53:08
mouth test, it doesn't matter whether
00:53:09
it's legal or illegal. It's [ __ ] up
00:53:12
and you'll realize that pretty quickly.
00:53:15
>> Chimath, your thoughts on what we just
00:53:18
discussed and maybe a year from now,
00:53:20
will any of this change? It is a
00:53:23
crucible moment for American society.
00:53:28
If nothing happens and we deem this kind
00:53:32
of theft acceptable, it is the beginning
00:53:35
of the end of the American Empire.
00:53:39
It's just a level of
00:53:42
disrespect and
00:53:46
lack of care
00:53:49
for this country. I think so. I will be
00:53:55
waiting and observing how important it
00:53:58
is to root this out. That's number one.
00:54:00
The second, which is more tactical
00:54:03
political calculus, this is an enormous
00:54:06
opportunity
00:54:09
for the Republican party. If they take
00:54:12
this and run with this, is there waste,
00:54:14
fraud, and abuse in every state?
00:54:16
Absolutely. I don't think this is
00:54:18
endemically a Democratic problem, but
00:54:21
the scale of it is so gargantuan in
00:54:24
these Democratic states that if the
00:54:26
Republicans don't take advantage of it,
00:54:31
I think it is a huge political
00:54:33
miscalculation. So there is this
00:54:35
tactical opportunity which I think if
00:54:37
you want to have a chance in the
00:54:38
midterms and if you generally want to
00:54:40
have a chance to
00:54:42
level set the country you must take this
00:54:46
and run with it.
00:54:47
>> Yeah.
00:54:48
>> And separately if as Freebrook says it
00:54:51
does die on the vine
00:54:53
it is the beginning of the end of the
00:54:55
American empire unfortunately.
00:54:57
>> Yeah. I was thinking the same thing as
00:54:59
you. These Democrats have nothing to
00:55:01
hang their hat on. They have no
00:55:04
platform. They're lost. They're a drift.
00:55:07
If you know, it's going to be impossible
00:55:10
for Gavin to do this because there's
00:55:11
been so much corruption in California.
00:55:12
But if he did, theoretically, Gavin
00:55:15
Newsome, Josh Shapiro, Pritsker, if they
00:55:17
came out and said Elon was right, Doge
00:55:20
is the right idea. We should take what
00:55:23
Elon did and we should take every
00:55:25
agency, audit them, and we should
00:55:28
prosecute anybody and fire anybody who's
00:55:30
incompetent, prosecute anybody who's a
00:55:31
criminal, and we should cut these
00:55:34
programs, you know, 10% a year for two
00:55:36
or three years and tighten them up and
00:55:38
make them perfect for the American
00:55:39
people so we can lower taxes and we can
00:55:42
provide better services. And that's my
00:55:44
platform for 2026 and 2028 for
00:55:47
president. that is going to be the
00:55:49
easiest path to victory and rebooting
00:55:52
the failed dopey Democratic party.
00:55:54
>> Yeah, I think you're you're right, Jay
00:55:56
Cal. If the message from both parties is
00:55:58
enough is enough and let me just end on
00:56:00
an optimistic note and they say enough
00:56:03
is enough. We've seen it. It's
00:56:06
staggering. We are going to fix it. That
00:56:09
is the party's message. That is the
00:56:11
country's message. That is the
00:56:12
government's message. Whether they're
00:56:14
holding hands or yelling across the
00:56:15
aisle saying, "We're going to fix it."
00:56:16
No, we're going to fix it. It's an
00:56:17
opportunity. And the reality is if the
00:56:21
fraud, waste, and abuse is of the scale
00:56:23
that it seems it might be based on what
00:56:25
we're just seeing with the tip of the
00:56:26
iceberg here, then there is a very
00:56:28
significant opportunity for us to
00:56:31
significantly reduce government spending
00:56:32
and get out of the debt spiral at a
00:56:34
federal, state, and local level. If it
00:56:36
is this easy to just stop this sort of
00:56:38
[ __ ] and you could actually save
00:56:40
trillions of dollars of wasteful
00:56:42
spending, we could be in a very good
00:56:43
position with a growing economy. Here's
00:56:46
why I think it will actually happen.
00:56:49
I'll build on something that Freeberg
00:56:51
and I talked about over the holidays
00:56:54
last week. We were talking about all of
00:56:56
this fraud in California and he said,
00:56:58
"Chimmoff, mark my words, wait until the
00:57:01
bond market sniffs out how fake and
00:57:05
propped up the California economy and
00:57:08
balance sheet and pension system is."
00:57:11
and he said, "You're going to see these
00:57:12
bonds run because those folks don't care
00:57:17
about anything other than the ones and
00:57:19
zeros of their own financial survival."
00:57:22
I completely agree with that. So, if you
00:57:25
take that to the limit, the optimistic
00:57:29
part of this is that now that this is
00:57:32
being exposed,
00:57:34
you are going to see risk get repriced.
00:57:38
And if risk gets massively repriced and
00:57:41
MUN [ __ ] the bed and a bunch of state
00:57:44
bonds [ __ ] the bed and a bunch of these
00:57:46
issues get broken,
00:57:49
these folks will have no choice except
00:57:51
to run and hide and cover their ass
00:57:53
>> and and that is a very and by the way so
00:57:55
that falls on the feet of a lot of
00:57:57
people outside of the United States who
00:57:59
when they see this issue will have a lot
00:58:02
less tolerance even if Americans
00:58:05
may not run to solve it. So the good
00:58:07
news is that there is an overwhelming
00:58:10
amount of debt in the United States.
00:58:13
There is an even larger amount of debt
00:58:15
that's owned by outsiders
00:58:17
and those folks fortunately I think will
00:58:20
have zero tolerance for this. They will
00:58:22
want their debts paid back.
00:58:24
>> This is so key because mun bonds have
00:58:26
been the tax-free stable. I mean I've
00:58:29
tra
00:58:29
>> tax advantage but not for much longer.
00:58:31
If you if you know that this is
00:58:33
happening
00:58:34
>> yeah if you break munis
00:58:35
>> you can't underwrite this. I mean what
00:58:36
happens to bridges and schools and all
00:58:39
these in order to build infrastructure
00:58:41
you need these mun bonds to work and it
00:58:44
all starts with three words Elon was
00:58:46
right that's why I said at the beginning
00:58:48
the first Democrats to say Elon was
00:58:49
right they are going to win the prize if
00:58:52
you don't say that you don't win the
00:58:53
prize
00:58:55
>> I don't think they're going to say that
00:58:56
>> those are wonderful sentiment those are
00:58:58
wonderful sentiments Jay Cal
00:59:00
>> but Democrats can't do that look
00:59:02
Democrats denouncing government waste is
00:59:04
like Don Corley Leon denouncing the
00:59:06
mafia. Okay.
00:59:09
>> It's a myth. It's an urban legend.
00:59:11
>> No, that is what they are. It's not like
00:59:16
it's like
00:59:17
>> the Democrat party is the party of
00:59:21
government waste and spending tax. It's
00:59:23
the party of government, okay? And they
00:59:25
just want the government to be as large
00:59:27
as possible. And if a big chunk of that
00:59:29
goes to fraudsters, so be it. You know
00:59:31
what? Those fraudsters are donors, too.
00:59:34
And that's the issue here is this is all
00:59:36
just political patronage. So yeah, you
00:59:38
know, it would be a smart strategy for
00:59:39
some Democrat to say the words that
00:59:42
you're saying. And in fact, Roana just
00:59:44
did. He said, "I support having an
00:59:46
investigation to root out government
00:59:48
inefficiency."
00:59:49
>> Perfectly to our next story. Thank you
00:59:51
for the master.
00:59:52
>> I don't I don't believe them. I don't
00:59:54
believe them because they are the party
00:59:55
of government. And so and it's the
00:59:57
Republican party when it functions well
01:00:00
>> is the party of the people,
01:00:01
>> right? It's a party of everyone else.
01:00:04
>> No. When it functions well, it's the
01:00:06
party attack comes from the rich. And
01:00:09
Trump marshals that populist energy.
01:00:11
>> So, it's got to come from the
01:00:12
Republicans may not deliver.
01:00:14
>> I'm not saying the Republicans are
01:00:16
perfect, but the Republicans, let me
01:00:18
just explain to Marshall that populist
01:00:19
energy.
01:00:20
>> Okay. Go ahead.
01:00:20
>> The Tik Tok of this is you have all this
01:00:22
fraud.
01:00:23
>> Let's say in California
01:00:25
>> or Minnesota, you're going to bury it.
01:00:28
Okay. Per Freeberg. Nobody wants to do
01:00:30
anything. They want to just sweep it
01:00:31
under the rug and keep it going. Okay,
01:00:34
the fraud needs to keep going. The
01:00:37
deficits keep growing because again,
01:00:39
it's fraudulent, right? You're not
01:00:40
accomplishing your goals. You keep
01:00:42
raising taxes and eventually people
01:00:45
start leaving. First, it's the people
01:00:47
that can leave, then it's the people
01:00:49
that must leave, and then you have
01:00:51
whoever is left over left over. Now your
01:00:54
tax roles actually start to shrink at
01:00:57
some point and your deficits start to
01:00:59
become bigger and bigger again because
01:01:01
you've decided to not root out the
01:01:02
fraud. The bond market will look at that
01:01:06
and they will throw up in their mouths
01:01:08
first. So they will pass the throw up in
01:01:10
your mouth test that Freeberg talked
01:01:11
about and then they are going to down
01:01:14
the throat of these state balance
01:01:16
sheets. That is the technical term that
01:01:19
I want you to understand down the
01:01:22
throat. And what that means is that the
01:01:25
401ks and the pension systems that all
01:01:28
rely on these mun bonds and all these
01:01:31
tax advantages to actually generate
01:01:33
yield will start to turn and it will be
01:01:36
the fault of these politicians who let
01:01:39
that happen.
01:01:41
And what I am warning all of the
01:01:43
governors and all the politicians that
01:01:46
listen to this pod is you need to get in
01:01:48
front of this issue because even if you
01:01:50
think the voting population will not
01:01:52
force you to do something, the financial
01:01:55
markets will. And now that they seen
01:01:58
this, they will not stop. They will
01:02:00
repric and repric and repric this risk
01:02:04
until they get you to capitulate.
01:02:06
California has half a trillion dollars
01:02:09
of bonds outstanding and the state of
01:02:12
California is looking at an 18 billion
01:02:14
dollar deficit. They're going to
01:02:15
continue to issue bonds over the next
01:02:16
year. That number is going to climb to
01:02:18
30 billion. So, the bond market is
01:02:20
crucial for California to continue to
01:02:22
operate. This is the world's fourth
01:02:23
largest economy, the state of
01:02:25
California, and it is already in a bit
01:02:28
of a fiscal bind. Not to mention what
01:02:30
we've talked about in the past, which is
01:02:32
the looming pension obligations. The
01:02:34
state of California is going to have to
01:02:36
borrow somewhere on the order of
01:02:38
another, this is going to sound crazy,
01:02:41
half a trillion dollars plus in order to
01:02:44
pay out their current pension
01:02:45
obligations. How the hell is that going
01:02:47
to happen? The US government will give
01:02:49
it to them. That's it. That they're
01:02:51
going to go to the Fed. Obviously,
01:02:53
they're going to try to get bailed out,
01:02:54
which is what the states always do. Just
01:02:56
go for the bail out.
01:02:57
>> My point is the pressure the pressure is
01:02:58
on. And I think Chimath is is right that
01:03:01
this market is going to start to
01:03:03
basically put pen to paper on the
01:03:06
reality of how things are operating.
01:03:09
It's not just going to be
01:03:10
>> And by the way, we're about to light the
01:03:12
spark, which is the billionaire tax act.
01:03:15
Once the BTA, if it gets on the ballot
01:03:17
and gets passed, it lights the spark on
01:03:20
the death spiral of these states.
01:03:22
>> Right. Yes.
01:03:23
>> Yeah. I think you're all right. I think
01:03:24
you're all right. And I think Jay's
01:03:26
right about you. Look, California,
01:03:28
Illinois, New York, these states are all
01:03:29
in a death spiral. They're all in the
01:03:31
process of collapsing. And they will try
01:03:33
to get bailed out by the feds. That's
01:03:34
their only potential savior cuz they're
01:03:36
not allowed to declare bankruptcy. By
01:03:38
the way, that would be a good thing if
01:03:39
states could declare bankruptcy so you
01:03:41
could unwind some of these crazy
01:03:43
obligations they've taken on. But you
01:03:45
can't do that. So, they will go to the
01:03:47
feds. And I think they're all just
01:03:49
trying to hold on until they can get
01:03:51
Democrats elected back in Washington. So
01:03:55
2028 will become a very very important
01:03:57
election because this going to determine
01:03:59
whether these states have to finally
01:04:02
make ends meet or whether they will
01:04:04
basically just try and federalize their
01:04:05
problems.
01:04:06
>> No, the bill always comes due. That's
01:04:07
the truth. The bill always comes due.
01:04:09
>> I've gone through that scenario analysis
01:04:11
with a bunch of macro folks and a couple
01:04:14
of external
01:04:16
central bank folks. That's not going to
01:04:18
happen. And the reason that's not going
01:04:20
to happen is then you'll see a 20 to 30%
01:04:22
of the bond buyers just leave the US
01:04:24
bond market. And so you will have
01:04:27
auctions that start to fail. This is
01:04:29
what I'm saying. There is no way out for
01:04:30
these states. If the states think that
01:04:32
they can fail and they will federalize
01:04:34
it, that's not going to happen. Because
01:04:35
once whoever is the then sitting
01:04:38
secretary of the Treasury starts to call
01:04:40
and says we're going to run this
01:04:41
auction, they are not going to like what
01:04:43
they see. And the reason is because of
01:04:46
what Nick Shirley has exposed. Because
01:04:48
everybody will go back to this and say,
01:04:50
"Hold on a second. If you could have cut
01:04:51
20 to 30% of all of your budgets over
01:04:54
the last 10 years, that's 25 or 30
01:04:57
trillion dollars you could have used to
01:04:59
pay down your debts and you chose not to
01:05:01
and now you want to come to us." So I
01:05:03
just think that it's an untenable
01:05:04
situation. The dollar will basically
01:05:06
have decayed in that entire process
01:05:08
another 90%. So, whoever is sitting in
01:05:11
the seat of government at the federal
01:05:13
level will not be able to do anything at
01:05:16
that time. That could be 28, it could be
01:05:18
32, it could be 36. My point is, this is
01:05:22
just a wakeup call for America. We don't
01:05:24
have a choice. As much as you thought
01:05:26
you could hide it, you can't hide it
01:05:27
anymore. So, you're just going to have
01:05:29
to clean it up.
01:05:30
>> Do you think that Gavin Newsome will cut
01:05:32
$1 of state spending? I don't think so.
01:05:34
>> No, no, no. I'm What I'm not I'm not I'm
01:05:36
not saying he will cut a single dollar
01:05:37
of it proactively. he will try to keep
01:05:39
the gravy train going growing. What I'm
01:05:40
saying is whoever is the then secretary
01:05:44
of the treasury, if somebody goes
01:05:46
bankrupt at the state level and they ask
01:05:48
to federalize the debt, what he or she
01:05:51
will do is sensitize the United States
01:05:53
balance sheet to absorb that and then
01:05:55
have to go and see who's willing to buy
01:05:57
the debt of the United States of America
01:05:59
to backs stop that. What I'm saying,
01:06:01
David, is that's when it fails.
01:06:02
>> That's your prediction. Yes. And it
01:06:03
makes sense. Yeah.
01:06:04
>> I think that these scenarios can be run
01:06:07
now.
01:06:08
And I think that that's why it probably
01:06:11
makes sense for the Federal Reserve and
01:06:13
all these folks to basically write the
01:06:15
white paper now that says we're not in a
01:06:17
position to do it. So the states get the
01:06:19
memo.
01:06:20
>> This is all going to require
01:06:22
somebody to get elected who has the
01:06:25
platform of austerity and fiscal
01:06:28
responsibility. And
01:06:29
>> you don't need austerity. These programs
01:06:31
can work. Stop pilfering and stop
01:06:34
stealing.
01:06:34
>> Number one, it's
01:06:35
>> be competent.
01:06:36
>> Yeah. But it's going to require a
01:06:39
message to the American people, Chimath,
01:06:41
that I am not going to allow not only
01:06:42
fraud, which people agree on, but we're
01:06:44
going to need to have some level of
01:06:45
austerity as a country. And nobody has
01:06:48
gotten elected on that.
01:06:49
>> You don't need austerity.
01:06:50
>> You need fiscal responsibility. I do
01:06:52
think that is different than austerity.
01:06:54
You don't need to cut these programs.
01:06:56
These programs don't work. They don't
01:06:58
work because everybody's stealing all
01:06:59
the money. Why don't you first spend the
01:07:01
money for what you told us you were
01:07:03
going to spend it on when you asked us
01:07:04
to give you the money and forced us to
01:07:06
give you the money, then measure it,
01:07:08
then tell us it's not working and before
01:07:10
you ask for more.
01:07:11
>> I mean, I I I think this is the core of
01:07:14
this issue is going to be can somebody
01:07:15
get elected on the platform of fiscal
01:07:18
responsibility and nobody has been able
01:07:20
to. I will say this, we did have, I
01:07:23
think, a bit of impact on this podcast
01:07:25
when we kept harping on, you know,
01:07:28
lowering the deficit. Even though that
01:07:31
hasn't happened, it's still top of mind
01:07:32
in the country. And I think putting
01:07:35
above that, my number one issue going
01:07:37
into these elections going to be who is
01:07:39
Doge positive and will run Doge at all
01:07:42
levels of government. If you're not
01:07:43
willing to say, I attack fraud first and
01:07:45
then second, balancing the
01:07:47
budget/reducing the deficit, then why
01:07:49
are you even running for office now? You
01:07:51
have to do those first two things. If
01:07:52
you don't do those first two things,
01:07:54
everything's ex existential from that
01:07:56
point on, which leads to our next story.
01:07:58
>> Well, I hope you can admit that closing
01:08:00
the border was a big win in this regard.
01:08:02
>> 100%. like that was long overdue and I
01:08:05
was wrong about how many people were
01:08:07
coming in because it made no logical
01:08:09
sense to watch it go like this and my
01:08:11
hand is going straight across at a
01:08:13
million a year or so and then pop up to
01:08:15
three or four and there was no data to
01:08:17
support it other than people sharing
01:08:19
random clips which I don't trust. The
01:08:22
the border problem has exacerbated this
01:08:25
massively because there are some there
01:08:28
are states giving entitlements to people
01:08:30
who are here illegally. That's insane.
01:08:32
And if we want to maintain a low
01:08:34
unemployment rate while jobs are
01:08:37
displaced, the best way to do that is to
01:08:39
shut the border and not let more people
01:08:40
in because they're going to take jobs,
01:08:42
obviously. So, that actually could be
01:08:44
the mitigating factor in all of this.
01:08:45
And it's probably the I would say that's
01:08:47
the topic that got Trump elected. Uh the
01:08:50
number one reason Trump got elected is
01:08:52
because Biden was a was is scenile. And
01:08:54
the second is because Kamala was an
01:08:56
idiot and couldn't even debate. So you
01:08:57
take those two things together, you
01:09:00
know, the third issue was obviously
01:09:01
immigration. Okay, but we have to get on
01:09:03
to this next story because I don't want
01:09:04
to run out of time for it, which is
01:09:07
California wants to do an act called
01:09:10
BTA. This act stands for Besties to
01:09:13
Austin. This is the Besties to Austin,
01:09:18
and it's marked. Two of four besties, I
01:09:21
believe.
01:09:22
>> Well, no, no, four of four. The other
01:09:24
two are actively looking for houses. We
01:09:26
just haven't. They're circling. They're
01:09:28
They're in India.
01:09:28
>> We haven't found something we like. I
01:09:30
don't want to say where I'm living, but
01:09:32
>> Okay. Besties to Austin,
01:09:34
boys.
01:09:37
Let's go. Ride them, boys. There's the
01:09:40
four of us on horses.
01:09:43
Let's go. Let's get some Terry Blacks.
01:09:47
Oh, man. Sax and I Terry Blacks eating
01:09:49
beef ribs with our shotguns and our
01:09:51
pistols. It's going to be a good time.
01:09:53
Let's go. Uh anyway, we brought this up
01:09:56
back in October. A lot of people taking
01:09:57
victory laps. U but we got on this
01:09:59
first. This tax for billionaires is
01:10:02
going to target residents with over a
01:10:03
billion in net worth. The history of
01:10:06
this is really interesting. Freeberg,
01:10:08
why don't you walk the all-in audience
01:10:10
through how this came to be? So,
01:10:13
California has a direct democratic
01:10:16
ballot process. So anyone can file for
01:10:19
something to go on the ballot and it
01:10:22
allows them to get around the state
01:10:23
senate and the assembly and basically
01:10:25
allow the citizens to vote directly on
01:10:27
an issue. When they make a filing, it
01:10:29
costs $2,000. Anyone can file for a
01:10:31
ballot measure and then you have to go
01:10:33
collect signatures and you have to
01:10:35
collect roughly 900,000 signatures. Once
01:10:37
you've collected those signatures, it
01:10:38
makes it on the next ballot. The state
01:10:40
attorney general looks at it to make
01:10:42
sure that it's legally compliant and so
01:10:43
on. They write their summary of it and
01:10:45
then it makes it on the ballot. people
01:10:47
vote for it and if it votes it passes.
01:10:48
So in this particular case, the
01:10:50
billionaire tax act as it's titled which
01:10:52
is likely going to get retitled when
01:10:54
it's finally filed for people to review
01:10:57
is a 5% tax on the assets of anyone
01:11:02
that's got a net worth over a billion
01:11:03
dollars. It was proposed by a guy named
01:11:05
Dave Rean who runs SEIU which is one of
01:11:07
the unions in order to make up for the
01:11:10
healthc care shortfall
01:11:12
that his members are going to be
01:11:14
experiencing. So, this was not a broad
01:11:15
coalition that filed this. This is not
01:11:18
filed by the state. This is not filed by
01:11:19
anyone in the Assembly or the Senate.
01:11:21
This is one individual at one union
01:11:23
that's put it forward and is now trying
01:11:24
to collect signatures to get it put on
01:11:26
the ball.
01:11:26
>> To be clear, I just want to read it back
01:11:28
to you. It's a union leader who has a
01:11:30
shortfall in health care for some number
01:11:33
of members. I don't know how many
01:11:34
members are in that union. and they just
01:11:36
came up with the idea, people hate
01:11:38
billionaires, we'll seize their money,
01:11:40
5% of it, to get health care for our
01:11:42
members of this very specific union.
01:11:45
>> And the truth, the truth is it's
01:11:46
actually been set up as a negotiating
01:11:48
technique. So, it's primarily it's it it
01:11:51
may be. Yeah. I mean, look, there's a
01:11:52
momentum behind it at this point, but
01:11:54
it's fundamentally a point that creates
01:11:56
leverage that allows this individual to
01:11:58
go out and negotiate with other parties
01:12:00
to try and find a way for this money to
01:12:02
show up so that he can reduce the
01:12:04
healthcare costs for his members, which
01:12:06
is what his objective is. And this is
01:12:08
the way the direct democratic process
01:12:09
works in California. Now, it's not the
01:12:11
first time a wealth tax has been
01:12:12
proposed in California. And I want to be
01:12:14
really clear on this. I think this is
01:12:15
very important for everyone to
01:12:16
understand. Forget the term billionaire.
01:12:18
Forget the term wealth. What we are
01:12:21
talking about and this is now being
01:12:23
proposed in multiple places in the
01:12:24
United States and there's also a federal
01:12:26
bill being proposed several federal
01:12:28
bills that have been considered. We are
01:12:31
talking about for the first time a tax
01:12:33
on individual people's private property
01:12:35
not on your income. So the way taxes
01:12:38
work today is when you earn income
01:12:41
either via labor so you collect a
01:12:43
paycheck or via the sale of an asset. So
01:12:46
you sell a house and make a profit or
01:12:48
you sell a stock or bond and make a
01:12:49
profit. You are earning income and you
01:12:52
pay a tax on that income and you only
01:12:54
pay taxes when you realize income when
01:12:56
you sell something or do work and get a
01:12:58
paycheck. So only when you get paid
01:12:59
cash. So for the first time ever we are
01:13:03
talking about placing a tax on people's
01:13:06
private property that hasn't turned into
01:13:08
cash. For example, you own some real
01:13:10
estate, you own an apartment building.
01:13:12
>> Well, I think it's worse than that. I
01:13:13
think it's worse than that because a lot
01:13:14
of people were calling this an
01:13:15
unrealized gains tax, but it's not an
01:13:17
unrealized gains tax. You could have
01:13:20
realized, let's say, let's say that you
01:13:22
had just had a a big outcome
01:13:24
>> and you sold your stock and you made a
01:13:26
billion dollars. You were fully paid up
01:13:28
on all of your taxes.
01:13:29
>> Let me Yeah, let me just say not even a
01:13:31
billion dollars, right?
01:13:32
>> Forget about a billion. Let's say that
01:13:33
this asset tax because in some cases
01:13:35
it's being proposed on anyone over 50
01:13:36
million or anyone over a million dollars
01:13:39
>> in the country and and wait a second.
01:13:41
This story just got really important to
01:13:43
me
01:13:43
>> in the country of and this is why this
01:13:45
is such a principled discussion and I'm
01:13:47
trying to avoid this current California
01:13:49
thing as the primary topic because there
01:13:51
are multiple of these being proposed
01:13:52
around the country and they have been
01:13:54
tried in the past. You sell a stock or
01:13:56
you do some work, you make some money,
01:13:58
that money now sits in your bank
01:14:00
account. You've paid your taxes on that
01:14:01
money. You sold your stock. You sold
01:14:03
your house. You did your work. You got
01:14:06
paid. You pay your taxes. After you pay
01:14:09
your taxes, the government comes and
01:14:10
says, "Hey, how much money do you have
01:14:12
in your bank account? What's the value
01:14:13
of your car? What's the value of the
01:14:15
thing that your grandma gave you? Give
01:14:17
me the value of everything you have in
01:14:19
your house. Add it all up and give me a
01:14:21
percentage of it." That's what this is.
01:14:23
It's a private property seizure. It is a
01:14:26
seizure of your assets to pay a tax
01:14:29
based on all the things you own, even if
01:14:31
you've already paid your taxes on all
01:14:33
those things. Correct? Now, this has
01:14:35
been tried and I'll give you guys a
01:14:36
couple of
01:14:38
anecdotes about this. In France in 1988,
01:14:41
1989, they passed this millionaire tax.
01:14:44
Anyone with 1.3 million euro or greater
01:14:46
net worth had to pay a tax of like 1% a
01:14:49
year, 1 and a half% a year of their
01:14:51
total assets.
01:14:53
And it raised 4 to 5 billion euro a year
01:14:55
in new tax revenue. But what
01:14:57
happened?€200 billion euro of net worth
01:15:01
left France and the total income tax
01:15:03
went down by 8 billion. So they ended up
01:15:06
seeing a complete reduction in overall
01:15:09
tax revenue for the country of France
01:15:11
when they passed this. So by the year
01:15:12
2018, they tried to revamp it a bunch of
01:15:14
times. They never got it to work. 20
01:15:16
years later in 2018, it got completely
01:15:18
turned off. So there's no longer this
01:15:20
asset tax in France and that was a small
01:15:22
asset tax. The reason they're calling it
01:15:24
a billionaire tax is to make it easier
01:15:26
for people to vote for it and sign up to
01:15:29
this entirely new tax system that
01:15:32
they're proposing to put on all
01:15:33
Americans at some point in the United
01:15:35
States and for the first time ever
01:15:37
degrading our private property rights.
01:15:39
Forget about how much wealth you have.
01:15:41
Forget about how rich you are. Forget
01:15:42
about the term billionaire, millionaire,
01:15:44
whatever it is. We're creating or
01:15:46
proposing the creation of a new tax
01:15:48
system that allows the government for
01:15:50
the first time ever to come in and audit
01:15:52
everything you own. All the jewelry your
01:15:54
grandma gave you, all the value of all
01:15:56
your couches in your house, the value of
01:15:58
your car, the value of all your stocks
01:16:01
and bonds, and the government can now in
01:16:03
and for the first time look through the
01:16:04
veil into your personal property and
01:16:06
say, "Here's how much all this stuff is
01:16:08
worth. I'm charging you a percentage of
01:16:10
that. That's what I need to get paid."
01:16:11
And it doesn't matter that it starts
01:16:12
with billionaires. What matters is that
01:16:14
we're giving the government the right to
01:16:16
look into our private property and take
01:16:18
a percentage of it every year, which is
01:16:20
different than an income tax where every
01:16:22
time you sell a stock or bond or your
01:16:24
house or get a paycheck, you pay tax,
01:16:26
which is totally reasonable because all
01:16:28
of that is trackable and that's a
01:16:29
transaction that's happening legally in
01:16:31
the public and so on. So, the government
01:16:33
has a right to look at that stuff, but
01:16:34
we're giving the government the right to
01:16:36
look into our private property. Now,
01:16:37
I'll say another thing. It's totally
01:16:40
reasonable to say that billionaires
01:16:41
aren't paying their fair share of taxes.
01:16:43
And it's totally reasonable to say that
01:16:44
ultra high net worth people aren't
01:16:45
paying their fair share in taxes. They
01:16:47
pay an income tax, but the truth is a
01:16:50
lot of ultra wealthy people borrow money
01:16:53
against their assets and live off of
01:16:54
that borrowed money so they never have
01:16:56
to pay taxes by selling the stuff that
01:16:58
they own. That's the core fundamental
01:17:01
issue that people are trying to address
01:17:03
when they say that folks aren't paying
01:17:04
enough. And there's a simple way to
01:17:06
address it, which is to charge them a
01:17:08
capital gains tax if they borrow against
01:17:10
their assets that they haven't paid
01:17:11
capital gains tax on. Very simple that
01:17:13
can resolve this. Another thing you can
01:17:16
do, you can raise the capital gains tax
01:17:17
rate. Sounds unpopular. I don't agree
01:17:20
with that, but that's another way to
01:17:21
deal with this, which is take the
01:17:22
capital gains tax rate from 20 to 30.
01:17:24
Make it sound more make it more like an
01:17:26
income tax. You could do that. And I'll
01:17:28
give you guys another statistic. In the
01:17:30
state of California, these billionaires,
01:17:33
there's 200 of them. The total net worth
01:17:35
of billionaires in the state of
01:17:37
California is $2 trillion.
01:17:39
So you're talking about raising hundred
01:17:41
billion on this onetime 5% tax or as
01:17:44
Roano would say 20 billion a year.
01:17:47
California is looking again at a $1.5
01:17:52
trillion liability hole that it's
01:17:54
facing. Taxing billionaires doesn't
01:17:56
solve any of our problems. We have more
01:17:59
fundamental problems with respect to
01:18:01
spending and the overall debt levels
01:18:03
that we've already taken on. And if you
01:18:04
tax billionaires of the whole country,
01:18:06
let me give you guys the statistic on
01:18:07
this. There's about 900 billionaires in
01:18:08
the United States. The total net worth
01:18:10
of billionaires in the United States, $8
01:18:12
trillion. So if you took, let's say 1% a
01:18:16
year, every year you take 1% of the
01:18:18
billionaire's worth, that's $80 billion
01:18:21
of income for the federal government
01:18:22
every year. That will pay 20 days of
01:18:25
interest on our debt. 20 days.
01:18:28
>> Yeah. The real money is in the middle
01:18:30
class. The net worth of the United
01:18:31
States, the middle class, and everyone
01:18:33
else is 170 trillion compared to 8
01:18:36
trillion of the billionaire.
01:18:37
>> They need a way to open the door so that
01:18:39
they can go after the real honeypot. The
01:18:41
real honey.
01:18:42
>> So the real the real goal of this, just
01:18:44
so everyone understands, the real goal
01:18:45
of this is not to tax billionaires
01:18:47
because there are other ways to tax
01:18:49
billionaires. real goal of this is to
01:18:50
create for the first time in American
01:18:52
history a private property asset seizure
01:18:54
tax
01:18:55
>> and to use that as a way to take a
01:18:57
percentage because they're going after
01:18:59
the they're going after the 170 trillion
01:19:01
not the 80 trillion of the billionaire
01:19:02
normalize auditing every American to
01:19:05
understand what they own and then take a
01:19:07
percentage of it every year it's been
01:19:09
tried in France it's been tried in other
01:19:10
countries it never works people leave
01:19:12
>> never worked it normally
01:19:14
>> that's why this is so offensive why not
01:19:17
just raise as you said capital gains or
01:19:18
an here. Yeah.
01:19:20
>> The biggest lie in this whole debate
01:19:23
over this supposed tax is the term one
01:19:26
time. They keep describing as a one-time
01:19:28
tax. See, even you said a one-time tax.
01:19:30
It's not a one-time tax. There's no
01:19:32
guarantee in the language of this ballot
01:19:35
initiative that they'll never do it
01:19:36
again. They're not writing into the
01:19:37
Constitution that, okay, we're just
01:19:39
going to take 5% this one time and then
01:19:41
we're going to prohibit doing it
01:19:42
thereafter. This is the first of many.
01:19:45
This is not a one-time tax. It's a first
01:19:47
of many tax. It's a presidential tax and
01:19:50
like you said the goal here is to create
01:19:52
a new I don't like using the word tax
01:19:55
because
01:19:56
>> it's not it's it's a taking it's not
01:19:58
based on
01:19:59
>> income it is it's an asset seizure and
01:20:01
the idea
01:20:02
>> property seizure system
01:20:03
>> it's a it's a private property seizure
01:20:05
it doesn't matter whether the assets are
01:20:07
realized unrealized whether you pay tax
01:20:09
to do it again
01:20:10
>> but look the point is that it
01:20:12
establishes a precedent that we can
01:20:14
define an arbitrary group of people and
01:20:18
confiscate a bunch of their property
01:20:20
because they're politically unpopular.
01:20:22
And if it succeeds here, it it will be
01:20:25
replicated over and over and over again.
01:20:27
And obviously, the line will come way
01:20:29
down below billionaires because there's
01:20:30
not enough money there.
01:20:33
8 trillion out of 170 trillion of
01:20:35
assets. The billionaires aren't the
01:20:37
target. At the end of the day, the
01:20:38
billionaires don't make a dent. If you
01:20:39
took 1% of the billionaire's net worth
01:20:41
every year, even if you took all their
01:20:42
net worth, you still wouldn't make a
01:20:44
dent. You've still got 40 trillion of
01:20:45
debt outstanding at the federal level
01:20:46
and we're adding nearly 2 trillion a
01:20:48
year. It's not going to make a
01:20:49
difference. The impact is in the middle
01:20:51
class.
01:20:51
>> Let me tell you another lie about this.
01:20:53
>> That's where the money is.
01:20:53
>> So when you got into that debate with
01:20:54
Roana, who by the way I think is
01:20:56
actually very smart and as far as
01:20:58
progressives go, I like him in a lot of
01:20:59
ways. But he was trying to frame this
01:21:01
thing as oh it's only 1% right 1% a year
01:21:04
for 5 years.
01:21:05
>> That was the first line.
01:21:06
>> Yeah. And again this minimizing language
01:21:08
they're using 1% one time. They're
01:21:12
trying to say, "Well, this is just an
01:21:13
insy beansy little thing." It's like,
01:21:15
"We're only gonna use the pinky, not
01:21:17
>> not the fist, right? Uh, we're gonna use
01:21:20
as well.
01:21:22
>> Just the tip of the pinky."
01:21:23
>> This just the tip of the pinky here.
01:21:25
>> Oh, too much. Too much. Too much.
01:21:28
>> Too much. No, the point is they're
01:21:30
trying to minimize it because they know
01:21:31
that the real value here is in
01:21:33
establishing a new precedent that now
01:21:36
asset seizures are permitted and that's
01:21:38
the beginning of basically the
01:21:40
government owning all of your property.
01:21:42
In fact, all of your property is
01:21:44
effectively owned by the government
01:21:47
subject to people thinking that you're a
01:21:50
good enough person that you should be
01:21:51
allowed to keep your property. Because
01:21:52
basically what they're saying is look,
01:21:53
there's an old line about democracy that
01:21:56
democracy can't be two wolves and a
01:21:59
sheep voting on what they're going to
01:22:00
have for dinner. In other words, people
01:22:02
have rights. And so you have the system
01:22:04
of of democracy, but you also have this
01:22:07
system of of rights. And those two
01:22:09
things go together. And so we have a
01:22:11
bill of rights. We have protections.
01:22:12
There's some things that a majority of
01:22:15
the population cannot take from you. A
01:22:17
lynch mob cannot hold on. A lynch mob
01:22:19
cannot vote to take your life. You have
01:22:22
rights. You have due process.
01:22:23
>> I just want to make it clear. Look, I
01:22:26
think what's going to happen is that if
01:22:28
people don't see the forest from the
01:22:29
trees here and this thing passes, it's
01:22:33
going to get litigated because I think
01:22:35
many of us feel that this is
01:22:38
fundamentally
01:22:40
illegal. That's going to take 6 7 8
01:22:43
years to resolve itself. And I suspect
01:22:45
that it will go all the way to the
01:22:47
Supreme Court. Let's just say that it
01:22:49
does pass. The thing is, it's much
01:22:51
easier for 900 Americans
01:22:55
to litigate in tax court
01:22:58
that this asset was mispriced, that
01:23:00
other asset was mispriced, because
01:23:01
you're going to be talking about big
01:23:03
chunky things. But by the time that that
01:23:06
rule, if it's valid and it stands, legal
01:23:10
scrutiny,
01:23:11
rolls down the hill to 170 million
01:23:15
Americans,
01:23:17
they're not going to be in a position to
01:23:19
take it to tax court. And what's going
01:23:21
to happen is that there's going to be
01:23:23
these frameworks and these actuarial
01:23:25
tables and all these other things that
01:23:26
are set up that says, "Oh, you have a
01:23:29
2025 Lexus. It's worth this." and you'll
01:23:33
say, "But I don't think it's worth that.
01:23:34
It's a little beaten up. I had a car
01:23:36
crash in it. You know, this and that.
01:23:38
Sorry, that's the price." And you're
01:23:40
going to have no recourse. You live in a
01:23:43
certain neighborhood. Your house is
01:23:44
worth that. You have a certain asset.
01:23:46
Okay. Well, we think it's worth this.
01:23:47
Your wedding ring, which is a class C
01:23:49
diamond, it's worth this. And you'll
01:23:51
say, "But, you know, it's kind of nicked
01:23:53
and it's not." Sorry. And when you
01:23:55
multiply that by 170 million people,
01:23:57
there is no recourse. And now you have
01:24:00
this level of taking
01:24:04
which is just I think egregious. And
01:24:05
then on top of that, what are you
01:24:07
actually taking it for? Because we've
01:24:10
now just already proven that you can't
01:24:12
spend properly what you're already being
01:24:14
given. And you're creating some kind of
01:24:17
corrupt money wheel, but you're going to
01:24:19
create this another avenue of just
01:24:21
taking more and more and more. I think
01:24:24
it's crazy. And the fact that this story
01:24:27
broke the same week that you had this
01:24:29
California state auditor released a
01:24:31
92page report that over $70 billion in
01:24:34
taxpayer funds had been quote lost. I
01:24:37
think that's a euphemism for stolen. It
01:24:40
can't be accounted for, you know, and
01:24:42
this includes things like the 24 billion
01:24:43
on homelessness, the 18 billion for the
01:24:46
highspeed rail where not a single track
01:24:47
has been laid, 2.5 billion for snap
01:24:49
fraud. I don't even think this includes
01:24:51
the 30
01:24:52
>> that 72 billion would have paid for the
01:24:54
healthare and it would have plugged the
01:24:55
deficit
01:24:55
>> and that's kind of where I was going
01:24:56
>> just by not allowing it to leak out.
01:24:59
>> And that's kind of my point. But it's
01:25:01
politically easier to say that you're
01:25:04
going to plug this hole by confiscating
01:25:07
the wealth of an unpopular group or a
01:25:09
group of people that you can demonize as
01:25:11
opposed to actually making the
01:25:12
government more efficient. Because
01:25:14
again, every single one of those
01:25:15
fraudsters who receive the government
01:25:16
payment, they're basically a political
01:25:18
supporter. I mean, those people don't
01:25:20
get chosen by accident, right? It's a
01:25:22
patronage system and they're the ones
01:25:24
who are part of the Democrat machine.
01:25:26
You know, this homelessness industrial
01:25:27
complex and all the rest of it. So,
01:25:29
they're never going to see cuts.
01:25:31
And by the way, the only reason this
01:25:34
hole happened, this cut, if you want to
01:25:36
call it that, is because in Big
01:25:37
Beautiful Bill, it said that you can't
01:25:39
use federal Medicaid funding anymore for
01:25:42
illegal aliens. That's the origin of
01:25:45
this whole thing. That's why they're
01:25:46
trying to plug this hole. But look, this
01:25:48
is why these deep blue states are
01:25:50
fundamentally broken and probably
01:25:52
unfixable. I don't want that to be the
01:25:54
case. But Sax, is the Trump
01:25:56
administration or Congress, if that's
01:25:58
what it's going to take, going to be
01:26:00
able to get legislation passed or an
01:26:03
order passed that will allow for
01:26:06
bankruptcy of states? Because some
01:26:08
people, I think you've mentioned this,
01:26:09
but some people have suggested that
01:26:10
that's going to ultimately be a path to
01:26:12
resolution on the bad fiscal condition
01:26:15
that these states are in and will allow
01:26:16
them a way to kind of crawl out of the
01:26:18
holes with respect to all the
01:26:19
obligations that they've accured that
01:26:21
they can't actually pay for.
01:26:22
>> I just don't know. I mean, I I think
01:26:24
it's a great idea. I think that states
01:26:26
should be able to declare bankruptcy. I
01:26:27
also think that if states go broke,
01:26:29
there needs to be a way to put them in
01:26:30
some sort of receiverhip, right?
01:26:32
>> They're not allowed to today, right?
01:26:33
There's no mechanism.
01:26:35
>> Yeah.
01:26:35
>> I don't understand what happens when a
01:26:37
state goes broke, which these states are
01:26:39
on the verge of of being. So, I don't
01:26:42
know what happens. But, you know, to get
01:26:44
something like that passed, either you
01:26:45
do it through reconciliation, get 50
01:26:47
votes. Maybe that's possible. But, I
01:26:49
don't know. I haven't heard a lot of
01:26:50
conversation about that in Washington.
01:26:52
Not yet. But it should be on the docket.
01:26:55
If anyone's listening, I think it's a
01:26:57
good thing to start thinking about.
01:26:58
>> You have the ear of certain people that
01:27:00
might be able to do something about it
01:27:02
to keep us posted.
01:27:03
>> Just to uh do a little self-reflection
01:27:05
here. I always like to think why or how
01:27:09
did we get to this billionaire's tax?
01:27:11
And I think the fundamental issue is
01:27:14
that people really don't feel safe in
01:27:16
this country when it comes to healthcare
01:27:18
and housing. We heard that come up with
01:27:20
our guest earlier. He said, "None of my
01:27:22
friends have a home." And then obviously
01:27:24
we hear it come up all the time with,
01:27:25
"Hey, can I get some forgiveness for my
01:27:27
student loans?" But just looking at
01:27:28
healthare, the fact that the United
01:27:30
States does not have universal house
01:27:32
health care is complete disgra. There
01:27:34
are 80 countries in the world that have
01:27:36
it. We are the second biggest economy in
01:27:40
the world. We are the leader of the free
01:27:42
world still to this day. The fact that
01:27:44
we are so polarized as a country and we
01:27:46
have so much fraud as a country that we
01:27:48
can't solve something as simple and
01:27:50
basic as universal healthcare that is
01:27:52
the root of this evil and I think the
01:27:54
technology industry has not participated
01:27:56
in universal healthcare but there is a
01:27:59
solution to it and I think if we as very
01:28:02
affluent people and as leaders cannot
01:28:05
come up with a way to give the poorest
01:28:07
people in this country and this is not
01:28:08
virtue signaling this is just catching
01:28:10
up to the modern world where people can
01:28:13
feel some base level that they can go
01:28:16
and get healthcare. We're going to
01:28:18
continue to see people go to a
01:28:20
billionaire's tax. We're going to
01:28:21
continue to see people like, you know,
01:28:23
the CEO of United Health get murdered.
01:28:26
That's where this is coming from. There
01:28:27
is a deep fear in poor people, in the
01:28:31
lower classes in this country that feel
01:28:33
like, hey, if I get sick, I could go
01:28:35
bankrupt. We must solve this problem.
01:28:37
And it's become such a political hot
01:28:39
potato that there's no creativity.
01:28:41
There's no plan. It's just fighting and
01:28:44
Obamacare is terrible and you know back
01:28:47
and forth. That's what needs to be
01:28:49
solved. I don't know which politician is
01:28:51
going to be able to create some unity on
01:28:52
this entrepreneurs
01:28:54
>> as poor people get incredible
01:28:55
healthcare. It's the middle class that
01:28:57
gets screwed over.
01:28:58
>> Okay. The the people in this country
01:28:59
still feel fear that we don't have
01:29:01
universal healthcare. And if we solve
01:29:04
this problem, I believe that a lot of
01:29:05
this resentment
01:29:06
>> the problem is the middle class is
01:29:07
getting squeezed because the price of it
01:29:09
keeps going up because Obamacare did not
01:29:11
bring down the price. It made it more
01:29:12
expensive.
01:29:13
>> Yeah. So what's your solution?
01:29:14
>> You keep wanting to give away for free.
01:29:17
>> I know you guys can criticize it. What
01:29:19
is your plan? What is your plan for
01:29:21
doing? And you don't have to give it to
01:29:22
me now, but I think as an industry, we
01:29:25
represent the technology industry here.
01:29:26
Sax, you represent uh the 47th
01:29:28
administration in some way. You're part
01:29:30
of it. We need to come up with a plan
01:29:33
for America.
01:29:34
>> If you look at healthare just as an
01:29:36
example and you can graph it, there was
01:29:38
a trend line in the cost of healthcare.
01:29:40
It was going up. And to your point,
01:29:42
which is fair, under all
01:29:44
administrations, we had not yet cracked
01:29:45
that code. Okay. But there was something
01:29:48
that was massively discontinuous that
01:29:50
happened in Obama passed in 2010,
01:29:52
implemented in 2014. And what was that?
01:29:55
Obamacare had this one incredibly fatal
01:29:57
flaw, which I still cannot understand
01:30:00
how these folks did not understand this.
01:30:02
They cap the gross margin. Some people
01:30:04
at the extremely high level would say,
01:30:07
"Well, that makes sense." Except it
01:30:09
doesn't because then how you make more
01:30:11
money is by just charging more. If you
01:30:13
can only make 15%, instead of making 15%
01:30:16
on $1,000, you'd rather make 15% on
01:30:19
$10,000.
01:30:21
That is what's happened. It has just
01:30:23
gotten steadily up up up up and then the
01:30:26
quality has obviously decayed. So if
01:30:28
we're going to unwind this, we need to
01:30:30
unwind the gross margin caps that exist
01:30:33
in Obamacare and try to wind these cost
01:30:36
curves back to normaly.
01:30:38
>> Frag if we look at ourselves globally.
01:30:41
I'm curious what you think. Actually,
01:30:44
hold on. Let me just
01:30:44
>> You mentioned 80 countries that are
01:30:46
supposedly better than us. Would you
01:30:47
want to have surgery in any of those
01:30:48
countries? Just wondering.
01:30:50
>> Oh, for me, I'm rich. I can do whatever
01:30:52
I want. I would go to the best place.
01:30:54
And if you look at Americans,
01:30:56
>> in your view,
01:30:57
>> absolutely America.
01:30:58
>> Oh, unless it was plastic surgery, then
01:31:01
South Korea.
01:31:02
>> Yeah. But
01:31:03
>> so these 80 countries supposedly that
01:31:05
have figured it out somehow the
01:31:07
healthcare you would not want to go
01:31:08
there for.
01:31:09
>> No, no,
01:31:09
>> just wondering. No, I'm just wondering
01:31:11
>> if if you looked at the price to value,
01:31:14
which is the point I was about to get
01:31:15
to,
01:31:15
>> where would you get your next
01:31:16
proctologology exam
01:31:18
>> on the All-In podcast? They have to
01:31:20
remove a gerbble from your ass. Where
01:31:21
are you going?
01:31:22
>> I would go to you. You seem to have the
01:31:24
most experience.
01:31:26
>> I would look to you for a referral. Sax,
01:31:28
where did you get your stuff?
01:31:30
>> Good sir.
01:31:31
>> But the point is, let's get serious. I
01:31:32
No, I want to finish my thought. Thank
01:31:34
you. If you look Freeberg at the cost
01:31:36
here, knee surgery in the top five uh
01:31:40
you know health care providers that have
01:31:43
countries that have universal
01:31:44
healthcare, it's six to eight times more
01:31:48
for bypass surgery, four times more for
01:31:50
a knee replacement. You know, just
01:31:52
getting an MRI is 5 to 10 times more
01:31:54
than the United States. Obviously,
01:31:56
there's some problem here with where
01:31:58
we're paying a lot more than everybody
01:32:00
else and we're not getting 5 to 10%
01:32:03
more. What do you think if you had a
01:32:05
creative solution? If you put your great
01:32:08
entrepreneurial mind to this, how do we
01:32:11
solve the problem of America not having
01:32:13
universal healthcare?
01:32:15
>> I'm not the guy to answer that question.
01:32:16
>> AI jali,
01:32:18
>> there are people there are people that
01:32:19
study this and
01:32:20
>> is going to solve all these problems.
01:32:21
>> There are a lot of proposals out there.
01:32:23
>> This I want to throw up this one chart
01:32:24
because I do think this is our politics
01:32:26
in a nutshell.
01:32:27
>> Here we go.
01:32:27
>> Someone had this great tweet. I've got
01:32:29
to just show this and then we then we
01:32:30
got to move on. But the the people who
01:32:33
created the red lines are blaming the
01:32:36
people who created the blue lines. This
01:32:37
is our politics in a nutshell.
01:32:39
>> Yeah.
01:32:39
>> So look how the the issue with the more
01:32:42
the government gets involved and I agree
01:32:44
you got to have healthcare for poor
01:32:45
people. I understand
01:32:46
>> but the more the government gets
01:32:47
involved in healthcare the more
01:32:49
expensive it gets. And the same thing
01:32:50
for college tuition and every other
01:32:52
category
01:32:53
>> sack. What would you do?
01:32:54
>> Well I mean look you got to have market
01:32:55
forces. That's what that chart shows is
01:32:57
that where you have the most market
01:32:59
forces, which is technology,
01:33:02
>> that's where you have continual quality
01:33:04
improvements and price decreases.
01:33:06
>> And while that's happening, the people
01:33:08
who create the red lines, basically the
01:33:09
people who create this out of control
01:33:11
fraud and corruption and cost problem,
01:33:14
they're the ones attacking the people
01:33:17
needs to attack this with innovation and
01:33:19
marketplace dynamics and get the
01:33:21
government out of it. That's the
01:33:22
solution in part. It's a solution
01:33:25
>> in part.
01:33:26
>> That's what I'm trying to get across
01:33:27
here is that we are actually our
01:33:29
industry is uniquely qualified to lower
01:33:31
costs and create marketplaces and
01:33:33
competition. I would like to inspire our
01:33:35
industry to maybe get back on this. I
01:33:37
know that none of us do it because it's
01:33:38
the hardest castle to take, but we could
01:33:41
as an industry, I think, have a dramatic
01:33:43
impact on this, just like our friend
01:33:45
from Spotify, Daniel, is, you know,
01:33:47
doing his 3D scanning and then you have
01:33:49
function health superpower. Tons of
01:33:51
these companies trying to get
01:33:53
self-directed healthcare going and lower
01:33:55
costs. Anyway, we have one thing we need
01:33:57
to get to here on the docket, which is a
01:34:00
victory lap for our bestie, Chim Poly
01:34:03
Hapaya. This week, Nvidia entered into a
01:34:06
licensing agreement to uh license
01:34:09
Brock's technology for inference chips.
01:34:12
Chamath was the backer of this company
01:34:16
for close to a decade and um had to come
01:34:19
rescue it a couple of times. It was a
01:34:21
brutal non-conensus bet. Uh you invested
01:34:25
in Grock essentially formed the company
01:34:28
with your partners 5 years, 6 years
01:34:30
before chat GPT even debuted. So this
01:34:33
was a visionary thing to do and it was a
01:34:36
hard bet and so congratulations from one
01:34:38
Bessie to another on uh this incredible
01:34:41
non-conensus bet you made Chamath but
01:34:43
maybe take us through a little bit of
01:34:45
the backstory. We started the business
01:34:47
10 years ago and the whole idea was just
01:34:52
observing that there is these patterns
01:34:56
that was happening inside of AI that we
01:34:58
wanted to be ready for. And I think that
01:35:01
this is going to be really important
01:35:02
over the next 5 to 10 years. So to the
01:35:04
extent that you're either a technologist
01:35:06
or an investor, let's just take 30
01:35:07
seconds. So in a world of kind of these
01:35:10
LLMs, there's two terms that I think
01:35:13
you're going to hear a ton about over
01:35:15
these next few years. The first term is
01:35:16
prefill and the next is decode. Gavin
01:35:18
Baker had an excellent tweet that broke
01:35:21
this down. Nick, you can include that in
01:35:22
the show notes. What prefill and decode
01:35:24
are is two very distinct ways of how
01:35:27
models think and how a model goes
01:35:30
through the process of answering a
01:35:32
question that you ask it. And so when
01:35:34
you send a prompt to AI, what happens is
01:35:37
that the model processes it. This is
01:35:39
called the reading phase or prefill. It
01:35:41
reads your entire prompt all at once and
01:35:43
then it does a bunch of math. Okay?
01:35:45
Calculates all these relationships
01:35:46
between all the words and it stores them
01:35:48
in temporary memory.
01:35:51
The problem is that this is really
01:35:52
compute bound. So it requires massive
01:35:55
brute force and NVIDIA GPUs crush you
01:35:58
and their architecture is designed for
01:36:00
massive parallel processing which makes
01:36:02
them really amazing at digesting these
01:36:04
long prompts, right? And Sax and a bunch
01:36:07
of other people have talked about
01:36:08
context windows growing and growing. So
01:36:10
the problem just gets bigger and bigger.
01:36:11
Nvidia just completely dominates. But
01:36:13
the next phase though, this critical
01:36:15
phase, the decode phase is the writing
01:36:18
phase, right? So the model starts to
01:36:20
generate a response. You ask it a
01:36:22
question and its response one token at a
01:36:26
time and then to pick the next token to
01:36:28
pick the next word it has to look back
01:36:30
at everything it has said already so
01:36:32
that it doesn't hallucinate.
01:36:34
The problem is that this is incredibly
01:36:36
memory bandwidth constrained. The math
01:36:39
of all of this is easy but then you got
01:36:40
to do all of this nonsense. Imagine like
01:36:42
a building and from getting from point A
01:36:44
to point B, you got to take an elevator,
01:36:46
go up to the 10th floor, take the next
01:36:48
elevator, go back down to the ground
01:36:49
floor, then walk across. That would
01:36:50
never make any sense. You'd want to just
01:36:52
walk across the hallway, right? And in
01:36:55
our architecture a long time ago, we
01:36:58
made these design decisions from day
01:37:00
one. We said, you know what, there's an
01:37:02
entire technology stack that Nvidia and
01:37:05
Google have pioneered. If we try to go
01:37:08
and build a building that looks like
01:37:10
that, we will fail. they're too smart,
01:37:12
they're too capitalized, they're too
01:37:14
good, they're too big, they'll get the
01:37:16
best deals, and we'll just be shut out.
01:37:18
And so what we did was we took a very
01:37:21
different architectural approach. We
01:37:23
took a very conservative process
01:37:24
technology. We weren't pushing the
01:37:26
boundaries of physics and we used a lot
01:37:29
of what's called SRAMM, so memory on the
01:37:31
chip so that we could do this decode
01:37:33
thing as well or better than everybody
01:37:35
else. And so now when you put these two
01:37:37
things together, I just think it's going
01:37:39
to create
01:37:40
a huge acceleration in
01:37:44
the ability for this entire
01:37:46
infrastructure layer to get much cheaper
01:37:48
and much more valuable, which I suspect
01:37:51
then it'll have a lot more developer
01:37:54
pull. You'll get a lot more applications
01:37:56
being built, billions and billions of
01:37:59
more people using it. So think about it
01:38:02
as pre-filled decode. We were really
01:38:04
great at decode and I think partnering
01:38:06
up was the strategic rational. And so
01:38:08
essentially what happened was last May
01:38:10
Nvidia announced this thing which
01:38:12
allowed their chip to talk to other
01:38:14
things and our team reached out and said
01:38:17
hey can we experiment to see if our chip
01:38:19
could talk to your chip and we could do
01:38:22
this thing better. And over the summer
01:38:24
there was some kind of like spreadsheet
01:38:26
work that happened. Then they were
01:38:30
interested enough where they were like,
01:38:31
"I'll give you a couple engineers." And
01:38:32
Jensen was kind of curious about it.
01:38:36
And then about a month ago, he and I had
01:38:38
a call on a Saturday and he's like, "I
01:38:40
think this thing is really real."
01:38:43
And I called Jonathan and Sunny right
01:38:45
away and I said, "You should be prepared
01:38:47
that if this thing works, there's going
01:38:48
to be something interesting to be done
01:38:49
here." And one thing led to another and
01:38:52
they acted decisively. Here's what I'll
01:38:53
tell you about Jensen. to seeing a
01:38:55
little bit up close. He is operating at
01:38:58
a level of insight about what's
01:38:59
happening in this industry that I've
01:39:01
really never seen with other folks in
01:39:02
other industries other than Elon in his
01:39:04
industries. It's a level of mastery and
01:39:07
a level of skill that is really
01:39:08
impressive.
01:39:11
Obviously, it's a really big deal and
01:39:14
I'm really thankful to have been a part
01:39:15
of it. Yeah, it's great.
01:39:16
>> Slack 25 billion, Grock 20 billion. Two
01:39:19
incredible
01:39:20
>> but Slack we sold to Salesforce. The
01:39:22
thing with rock is I just think that it
01:39:24
wasn't a point product. I think what
01:39:25
will happen here is if successful we
01:39:28
will be a foundational layer that Nvidia
01:39:30
can use to again make AI much more
01:39:33
accessible, much cheaper, much more
01:39:34
beneficial to everybody.
01:39:36
>> Was there a point just as a capital
01:39:38
allocator, as an entrepreneur, which I
01:39:39
consider you very entrepreneurial in the
01:39:41
case of Grock,
01:39:42
>> that this looked like it was going to
01:39:44
get not make it because we went through
01:39:46
co we went through things and and
01:39:49
>> years first eight years. I mean look,
01:39:51
Jonathan is a genius. I said this on X
01:39:53
of biblical proportions. His vision for
01:39:56
the V2 chip, V3, V4 chips. He is a
01:39:59
volcano of technical creativity, a true
01:40:01
volcano. He was the inventor of TPU at
01:40:04
Google. There is very few people like
01:40:06
this in Silicon Valley or the world.
01:40:09
>> Savant,
01:40:10
>> but he's not a Savant. I just think he's
01:40:12
incredibly brilliant. Okay. So if that
01:40:15
road map can be married with Jensen's
01:40:17
brilliance, I think that like I said
01:40:19
it'll be hugely beneficial for AI in
01:40:21
general. And then separately though two
01:40:23
years ago they acquired definitive and
01:40:26
we were able to bring one of our other
01:40:27
besties Sunonny Madra in as president
01:40:30
and I think the combo of those two
01:40:32
Sunny's team which are very practical
01:40:34
kind of like put your head down go to
01:40:36
market technologists plus Jonathan's
01:40:38
vision and technical brilliance frankly
01:40:41
allowed a lot of this to happen. It
01:40:42
wouldn't have happened without those two
01:40:44
working together.
01:40:45
>> Well, congratulations. It's awesome to
01:40:46
see you get a win.
01:40:47
>> Yeah. I'd like to I'd like to say a
01:40:49
couple things to a couple of people.
01:40:51
>> Yeah, you do. Absolutely. It's like the
01:40:53
my ostensible, you know,
01:41:02
you got
01:41:08
okay to number two to the VC community.
01:41:11
You can also
01:41:30
number three. I have a message to all
01:41:33
the people on social media, Reddit. You
01:41:36
can also
01:41:39
>> now the audience knows what it's like to
01:41:41
lose a huge pot.
01:41:44
>> Yes. Wow. For your turn, B
01:41:48
for your pre.
01:41:49
>> He's a sore winner. He's a sore winner.
01:41:51
>> Winner loser.
01:41:53
>> He doesn't give a speech when he loses
01:41:55
like Helmouth. He gives a speech when he
01:41:56
wins and he berates you.
01:41:58
>> Yeah.
01:41:59
>> And how stupidly you played the hand.
01:42:01
>> They were terrible. And I hit my TWO
01:42:03
OUTER. LIKE LITERALLY Grock was a two
01:42:05
outer. He bakes it and he's like, "I
01:42:08
TOLD YOU IT WAS COMING. SO MUCH FOR YOUR
01:42:11
NUT FLUSH."
01:42:12
>> All right, boys.
01:42:13
>> All right, everybody. This has been
01:42:14
another amazing episode of the All-In
01:42:16
podcast. We'll see you next week for our
01:42:18
prediction show. Sorry it got delayed.
01:42:20
We just had too much on this document.
01:42:21
Love you besties.
01:42:23
>> We'll let your winners ride.
01:42:31
We open sourced it to the fans and
01:42:33
they've just gone crazy with it.
01:42:35
>> Love you. Queen of
01:42:38
>> yours.
01:42:44
Besties are gone.
01:42:46
>> That is my dog taking your driveway.
01:42:51
>> Oh man, myasher will eat me.
01:42:54
>> We should all just get a room and just
01:42:55
have one big huge orgy cuz they're all
01:42:57
just useless. It's like this like sexual
01:42:59
tension that you just need to release
01:43:00
somehow.
01:43:06
>> That's going to be good. We need to get
01:43:08
merch.
01:43:09
>> I'm going all in.
01:43:17
I'm going all in.
