00:00:00
oh baby no skin on skin you just got to
00:00:03
keep the shirt on listen to me only the
00:00:05
best for my daughter this is 100%
00:00:08
laurana vuna she's gonna PE any minute
00:00:12
there is not you're using laurana to
00:00:14
wipe her when she mom no this is the
00:00:16
sweater that she's she's got her face on
00:00:18
but this is the softest material human
00:00:20
you know I mean natural material on
00:00:22
Earth really this is not subject to any
00:00:25
supply chain
00:00:26
constraints a in fact when you buy one
00:00:29
from Laura Piana fly one right to
00:00:33
you let your winners
00:00:36
ride Rainman
00:00:40
David and instead we open source it to
00:00:43
the fans and they've just gone crazy
00:00:45
with it love
00:00:46
[Music]
00:00:49
you guys isn't it amazing how people in
00:00:52
power cannot take any time off and still
00:00:55
remain in power and engaged when you
00:00:57
have a baby
00:01:00
J K what's the reference okay our friend
00:01:02
Joe
00:01:03
Lonsdale venture capitalist living in
00:01:06
Austin had a tweet that uh went viral
00:01:09
but maybe not for the best reasons he
00:01:11
said uh in response to a Dan primr tweet
00:01:15
a Dan works at axios who was talking
00:01:17
about Joe Rogan criticizing uh the
00:01:21
amount of time budha was taking on
00:01:23
paternity leave and Joe Londale
00:01:26
responded wow great for fathers to spend
00:01:28
time with their kids and support moms
00:01:29
but any man in an important position who
00:01:31
takes six months of leave for a newborn
00:01:33
is a loser in the old days men had
00:01:36
babies and worked harder to provide for
00:01:38
their future that's the correct
00:01:40
masculine response uh well it was an
00:01:42
opinion from 1957 that's either his or
00:01:46
I'm in the way back machine but Joe's
00:01:49
old school Joe is a unique individual
00:01:53
and he just happened to I think in this
00:01:57
whole like not get cancelled debate or
00:01:59
don't let yourself get canceled debate
00:02:01
the right is now saying like I'm just
00:02:02
going to tell you how I actually feel
00:02:05
and so Joe told us actually how he felt
00:02:07
I don't think he said anything offensive
00:02:09
I think you can have a different opinion
00:02:11
than what he said but I don't think he
00:02:13
said it shouldn't exist he said if
00:02:15
you're in a position of power and you
00:02:17
check out for six months it puts
00:02:20
everything that you're doing under a lot
00:02:22
of
00:02:22
pressure that's I think what he said and
00:02:24
he called those very specific people
00:02:27
losers the context is Joe Rogan called
00:02:30
Pete budajudge because Pete
00:02:32
Budaj had two kids via surrogate and I
00:02:36
guess it's taking six months or I don't
00:02:38
know I don't even know how much time
00:02:39
he's taking he's at three months but
00:02:41
nobody knows if he's like working half
00:02:43
time full time but Rogan had an issue
00:02:45
with it and then Dan prac basically said
00:02:48
what Rogan doesn't know is at his own
00:02:50
company I.E Spotify there's a six-month
00:02:53
policy which by the way Joe Rogan does
00:02:56
not work for Spotify they license his
00:02:58
show so there is no way for Joe Rogan to
00:03:00
know the internal policies he is not an
00:03:02
employee I mean Jason if you want if you
00:03:05
want to hang your hat on that little fig
00:03:06
Leaf okay no I'm just saying it's I'm
00:03:09
not defending Joe but I'm also saying
00:03:11
like how would he know it's not like he
00:03:12
went to HR and was like hey uh what's
00:03:14
our fraternity he doesn't work there
00:03:17
yeah fine well 6 months is is a long
00:03:19
time especially I mean that is a long
00:03:22
time to take off the word loser is a
00:03:25
very strong word do you think men who
00:03:27
take fraternity are losers no no it's
00:03:29
there choice you think men who take six
00:03:31
months of fraternity are no no I
00:03:34
wouldn't I wouldn't necess call him a
00:03:36
loser I do think that is a long time for
00:03:39
somebody who you know prioritizes work I
00:03:42
mean if an entrepreneur took six months
00:03:45
of fraternity would you would that
00:03:46
influence whether or not you invest in
00:03:48
his business well look if you are the
00:03:50
principal of a business and you just
00:03:52
disappear for six months that's not
00:03:53
going to work I mean let's be realistic
00:03:55
here unless unless it does in which case
00:03:58
then you have other problems well or
00:04:00
look if you're at like the stage that
00:04:01
Google is at or whatever the founders
00:04:03
can disappear and move to you know
00:04:05
islands and private islands and it
00:04:07
doesn't matter basically what they did
00:04:08
but but look we all know I mean that
00:04:10
when you're a startup you face
00:04:12
existential decisions daily weekly or
00:04:15
monthly you can't just disappear for six
00:04:17
months it's not going to work you might
00:04:18
only have six months of Runway so if you
00:04:19
did take six months of fraternity there
00:04:21
would be no company when you came back
00:04:22
in all likelihood let me speak for
00:04:24
myself uh I couldn't ever take six
00:04:27
months I'll I'll probably take three
00:04:30
weeks to a month and honestly I agree
00:04:33
with David I really didn't do much of
00:04:35
anything Nat had to do frankly all of
00:04:37
this by herself and so I'm there to just
00:04:40
be moral support and help where I can
00:04:43
you
00:04:44
know baby needs a diaper change I do
00:04:47
that I'll hand feed in a bottle because
00:04:50
she's tired of pumping and you know
00:04:52
breastfeeding like but I am so
00:04:54
peripherally at the edges trying to help
00:04:55
and be relevant and try to give her a
00:04:57
break here or there that's my role and
00:05:00
at some point when the kid gets on a
00:05:01
schedule um there's even less stuff
00:05:05
necessarily for me to do other than
00:05:06
again just be moral and emotional
00:05:08
support then of course there's bonding
00:05:10
and stuff but you know to be honest with
00:05:11
you like I have found as a parent the
00:05:15
the connection that I have with my
00:05:16
children has gotten meaningfully better
00:05:19
as they've gotten older and maybe that's
00:05:21
just the limitation that I have in my
00:05:24
need to communicate and how I want to
00:05:26
connect with my kids and how I feel I
00:05:27
get feedback back that gives me energy
00:05:29
to app parent it is much easier for
00:05:33
me to find that equation with my
00:05:37
12-year-old than it is with my you know
00:05:38
two-day
00:05:40
old so that's just me you know I'm going
00:05:42
to be out for three weeks to a month and
00:05:44
well me the other thing we're leaving
00:05:45
out here is the question of resources so
00:05:48
Joe Lonsdale uh according to his podcast
00:05:51
is a billionaire and his podcast title
00:05:53
and so if you're a billionaire and you
00:05:56
have unlimited resources at home and
00:05:58
24-hour night nurses which
00:06:00
you know we all know what those cost uh
00:06:02
you're talking about a th000 or $2,000 a
00:06:04
day uh to have 24-hour coverage but
00:06:06
that's nothing to a billionaire so if
00:06:07
you I don't make it about class but if
00:06:09
you were two working parents and you
00:06:13
didn't have the money to hire somebody
00:06:15
this is actually practically the only
00:06:17
thing you can do somebody has to be with
00:06:19
a kid and can one spouse be at
00:06:22
home 24 hours alone with the kid all the
00:06:24
time as you guys know I'm from Canada in
00:06:27
Canada we have a one-year maternity and
00:06:30
paternity leave policy it can kind of go
00:06:32
both ways the the basically the family
00:06:34
gets it and you can allocate it as and
00:06:36
how you need
00:06:37
it and who pays for their salary the
00:06:40
government basically guarantees your job
00:06:44
you go on effectively unemployment
00:06:46
insurance after some period of time
00:06:47
where you go from 100% of your salary to
00:06:49
about I think it's 50% somebody will
00:06:52
correct me if I get these details wrong
00:06:53
um and then you go through the rest of
00:06:55
the year now in both cases my my sister
00:06:58
you know when she had both kids you know
00:07:00
on the way in she was like I think I
00:07:02
want to take the full year and by the
00:07:05
six-month Mark she was losing her mind
00:07:07
and you know she's a lawyer at a yeah
00:07:09
really good research hospital and you
00:07:11
know she does work that's really
00:07:12
valuable to her and that she finds
00:07:14
really stimulating and she just needed
00:07:16
more adult connection after six months
00:07:19
it was very hard for her to kind of be
00:07:21
there yeah I just think six months for
00:07:23
the second parent is that seems like a
00:07:26
long time I I don't think I could take
00:07:27
six months off but uh I also think if
00:07:31
you have resources there's pockets of
00:07:33
time even when I did stay home for I
00:07:36
don't know the first couple weeks after
00:07:37
the kids were born you know they're
00:07:40
asleep for three hours and then you
00:07:41
clean the diapers feed them they play
00:07:43
for an hour or two and then they go back
00:07:44
on a nap you know it's like you're it's
00:07:46
constantly the stop and start I mean
00:07:47
that's the thing that's hardest about is
00:07:49
the lack of sleep I think oh my god it
00:07:51
feels like I mean it's funny but like I
00:07:53
I forgot what it's like but you know you
00:07:55
you reminded quickly it feels like
00:07:57
you're drunk yes two hours you wake up
00:08:01
you get a 10-minute catnap you wake up
00:08:04
and this is where again I go to and I'm
00:08:06
such a bit player in this play right now
00:08:08
you know at the edges we like not
00:08:11
sleeping I can take care of T but I I
00:08:14
don't know how women do it it's it's
00:08:16
incredible and for those of you
00:08:17
listening chth has got his newborn on
00:08:19
his chest uh and uh swallowed quite
00:08:23
nicely there this is why you should
00:08:24
subscribe on YouTube and you can see you
00:08:27
can see yes he's using his new daughter
00:08:28
to get YouTube subscriptions up this is
00:08:31
they should blow us past 100,000 SI but
00:08:34
how do you feel it's so special I feel
00:08:36
so lucky um I feel so so lucky this is
00:08:41
going to be the most popular Cameo on
00:08:43
the Pod since free Burg's dog yeah I
00:08:46
mean she this chick is so deliciously
00:08:48
cute she's so she's so delicious and I
00:08:51
forgot how beautiful the sounds that
00:08:54
girls makes versus boys having three
00:08:55
boys and two girls now I remember the
00:08:58
boys they make kind of interesting
00:09:00
noises but not really but my gosh like
00:09:03
little baby girl noises oh and you guys
00:09:05
SX has two girls you have three free
00:09:07
Brig girls it's girls are incredible my
00:09:10
go we're all basically girl dads like
00:09:12
Kobe oh so what a blessing what a
00:09:16
blessing any news on your front well we
00:09:18
had a baby the day after chath had a
00:09:19
baby so we're oh right I did see the B
00:09:22
congratulations thank you freeberg
00:09:24
where's your swaddled infant you're
00:09:26
letting you're letting chamath uh win
00:09:28
sweep swe here what's going on yeah his
00:09:30
vun is on the way I haven't I haven't
00:09:33
are you in the Joe laale you you did one
00:09:35
day off and then went right back to work
00:09:37
she's in the the place where you drop
00:09:39
the kids off to get raised and then you
00:09:40
pick them up in a year okay you're like
00:09:42
Oh you mean like Vulcans you're like
00:09:44
Vulcans where you into a learning pod
00:09:46
and come back a year later I mean they
00:09:48
they sleep most of the day so she's
00:09:50
asleep right now actually Alison just
00:09:52
sent me a picture she's sitting on the
00:09:53
rocking chair where they're outside
00:09:54
right now pretty amazing I give Lono a
00:09:57
lot of Courage for saying what he
00:09:58
thought
00:09:59
I really don't think that uh what he
00:10:01
said was altogether that like
00:10:09
vilified better language but I think
00:10:11
where he was coming from I think a lot
00:10:13
of us probably wouldn't do it ourselves
00:10:15
we may never judge anybody else I would
00:10:17
never judge anybody who wants to take
00:10:18
six months I know that I could not I
00:10:20
would just I think either I'm too
00:10:22
selfish or whatever but um I'm not sure
00:10:25
there's just that much to do as the
00:10:27
secondary and to David's point if I was
00:10:29
asked to be the primary I think I could
00:10:31
probably step in and do 10% of what Nat
00:10:34
would do but here here's Joe lonsdale's
00:10:36
super blind spot he made this very
00:10:39
gender specific with men and women in
00:10:42
certain roles and he basically is saying
00:10:45
you know a man who takes six months off
00:10:48
is a loser so he is not just giving his
00:10:52
opinion he's attacking people who do
00:10:54
take the time off and then he says
00:10:55
listen in the old days men had babies
00:10:57
and worked harder to provide for the
00:10:59
future that's the correct masculine
00:11:01
response so I think what triggered
00:11:02
people about his response and perhaps
00:11:04
rightfully so is that this is just a
00:11:06
view but Jason here can I say something
00:11:08
this is degrading men who take time to
00:11:10
take care of their kids but look we've
00:11:12
talked about this a lot there is an
00:11:13
opportunity for folks like
00:11:15
us to take a step back and slow down in
00:11:18
how we interpret a tweet that's written
00:11:22
at 8: a.m in the morning super quickly
00:11:24
I'm not advocating he' be canceled and
00:11:26
not and and not just him but everybody
00:11:27
else but like there's an opportunity to
00:11:30
teach empathy here where I'm not saying
00:11:32
you have to agree with him but you can
00:11:34
also choose to see what he's trying to
00:11:36
say through the exact words that he used
00:11:39
decide that you agree or disagree and
00:11:41
then just move on yeah of course you
00:11:44
know what I mean and and I think that
00:11:46
the reason why folks may want to do that
00:11:49
in this case but in most other cases is
00:11:51
eventually it will be you that makes a
00:11:54
mistake sure and you want to be let off
00:11:57
the hook by other people that are
00:11:58
empathetic enough to say I really
00:12:00
disagree with what you're saying but you
00:12:02
don't deserve to be punished Beyond
00:12:05
disagreement I love what jamath just
00:12:07
said you know the mistake that we make
00:12:09
might even be on this pod
00:12:12
today I might have already made it I
00:12:15
already I agree that we should all just
00:12:17
be a little bit less judgmental and um
00:12:20
there there there the there is an
00:12:22
element there is a judgmental element in
00:12:25
Joe's tweet that that's probably the
00:12:27
part I don't agree with is look if
00:12:29
someone wants to do that fine take the
00:12:31
time doesn't make them a loser but it's
00:12:34
not a choice that I would realistically
00:12:35
make yeah it's totally unrealistic it's
00:12:37
not even startups like you know I'm I'm
00:12:39
getting these I'm getting put to these
00:12:41
multi hundred million dollar decisions a
00:12:43
day I can't you know I could pause the
00:12:46
business but that'll have so many
00:12:47
Downstream implications unfortunately I
00:12:50
picked a job or am in a position where I
00:12:51
can't check out even if I wanted to to
00:12:53
so I try to do my best that's the point
00:12:55
you was trying to make that wasn't that
00:12:57
well articulated I think I don't think
00:12:58
any of us are a situation where we can
00:13:00
straight up walk away from work for any
00:13:02
meaningful time I mean on a daily basis
00:13:04
desty it would destroy my business yeah
00:13:05
we get texts we get emails we get phone
00:13:07
calls that we have to answer and so it's
00:13:10
not it it you know almost definitionally
00:13:13
isn't an option to just walk away but
00:13:15
for those who it is and if that's their
00:13:17
choice that's what it is the the great
00:13:19
thing about Freedom isn't that you can
00:13:22
say whatever you want it's that you
00:13:24
don't have to listen to what anyone else
00:13:25
is saying and you know for people that
00:13:28
that disagree with Joe I feel like you
00:13:29
always have the option to not listen and
00:13:31
you always have the option to walk away
00:13:33
unfollow and yeah and unfollow and the
00:13:36
whole idea of cancel culture and you
00:13:39
know punishing people for the things
00:13:40
they say regardless of what they say and
00:13:42
and the censorship and all the shutdown
00:13:44
of of voices and channels for people to
00:13:46
have a voice I think it um it takes the
00:13:50
freedom away that's inherent in the idea
00:13:53
of you know your choice to not listen
00:13:56
yeah and and it and it's almost always
00:13:58
totally hypocritical so just as a
00:13:59
postcript on the whole Chappelle debate
00:14:01
it turns out that the leader of the the
00:14:04
anti- Chappelle protest who''s been
00:14:05
trying to get him cancelled at Netflix
00:14:08
it turns out this this person has like a
00:14:11
treasure Trove of the most angry hateful
00:14:15
vile tweets that I or anybody has ever
00:14:19
seen when you put it in the group chat I
00:14:21
thought that that was a joke the the
00:14:23
things that she wrote were so beyond the
00:14:27
pale Beyond
00:14:30
they're like they're like the worst play
00:14:32
them on the show no we can't I I don't
00:14:34
even want anybody to speak these things
00:14:36
I don't want to include it in the show
00:14:37
notes they're literally the worst tweets
00:14:39
I've seen Ser most racist like like I've
00:14:44
never seen such explicit racism in the
00:14:47
21st century basically aside from these
00:14:49
tweets and um and this is the person
00:14:52
who's trying to cancel Chappelle was out
00:14:53
there with the megaphone and who the
00:14:55
Press was fawning over by the way and
00:14:57
she said in her thing yeah those were
00:15:00
from a long time ago I've already owned
00:15:01
up to those so let's move
00:15:03
on
00:15:05
wait owned up how owned up how and it's
00:15:09
kind of like you know let me play the
00:15:11
empathy card on me but then you know I
00:15:14
so meaning I expect you to see through
00:15:16
what I'm going through and that those
00:15:19
expressions were in a moment in time so
00:15:20
see past them and see my true character
00:15:22
that's what she's asking that's what
00:15:24
she's asking the world to do you know
00:15:26
about her but then you're not willing to
00:15:29
do it to any for anybody else and that's
00:15:31
where I think that double standard just
00:15:33
doesn't work anymore and I think this is
00:15:35
what people are getting really fed up
00:15:36
with and yeah and I would also say that
00:15:39
her tweets weren't funny they weren't
00:15:41
attempting to be funny oh God they are
00:15:42
so
00:15:43
gross have a customer service problem
00:15:45
with this beeping beep they so I want to
00:15:48
bash I want to bash this you know
00:15:50
beeping Asian or whatever over the head
00:15:53
blah blah blah blah like a lot of racism
00:15:55
towards Asia you know um Asian people no
00:15:57
there was homophobic tweets there was
00:15:59
Asia Asian hate tweets I mean it Latina
00:16:02
Hispanic I mean it she wasn't even
00:16:04
trying to be funny that's the thing it
00:16:05
wasn't even it wasn't even a failed
00:16:07
attempted humor so you here you have
00:16:08
Chappelle who I think is dishing it out
00:16:12
in an equal opportunity way making you
00:16:15
know funny uh observations about really
00:16:18
he's criticizing our culture not
00:16:21
specific groups and he's being
00:16:22
deliberately misinterpreted by the
00:16:25
people who want to cancel him they're
00:16:27
really to think that
00:16:29
Chappelle's standup routine is hateful
00:16:32
really requires I think deliberate uh
00:16:35
obtuseness you have to deliberately
00:16:36
misinterpret what he's saying and so you
00:16:38
have these people out there trying to do
00:16:40
that and meanwhile they are guilty of
00:16:42
the it's a total Act of projection
00:16:44
because they are guilty of everything
00:16:46
they accuse Chappelle of well not all of
00:16:49
them this person in particular the
00:16:50
leader the leader and of course the
00:16:53
Press doesn't dig any of this up it all
00:16:56
happens through the through kind of
00:16:58
Internet sleo that would be a narrative
00:17:00
violation David if if somebody is virtue
00:17:02
signaling and they are leading a
00:17:04
cancellation movement it's it's kind of
00:17:06
a narrative violation to say well they
00:17:08
maybe they should be canceled by the
00:17:09
same standard or you know quite easily I
00:17:12
think the thing that I don't think she
00:17:13
should get canceled let's just there go
00:17:15
yeah yeah yeah I don't I don't think she
00:17:16
should be cancelled but I and and this
00:17:18
what if she said it when she was drunk
00:17:20
what if she had a nervous break I can
00:17:22
only imagine the the difficult path that
00:17:24
this lady has gone through and on the
00:17:26
off chance that she's listening I'm
00:17:29
totally cool with your journey I
00:17:31
understand you made some mistakes we've
00:17:32
all I'm going to let you off the hook
00:17:34
can you please try to let the next
00:17:35
person off the hook I think that would
00:17:38
be a nice place for everybody to aim to
00:17:39
go and then and just to Circle back with
00:17:41
with Joe when he started explaining
00:17:44
himself self in the thread when it
00:17:46
became a conversation with a wider group
00:17:48
of people the journalists went on the
00:17:50
pure dunk cancellation route but then
00:17:52
there was actually a productive
00:17:53
discussion about between CEOs Etc and I
00:17:56
thought what was very interesting about
00:17:57
it was he he started talking to Gary tan
00:17:59
who you know was like listen we have a
00:18:01
four-month leave practice at our Venture
00:18:03
firm and and Joe said do you really take
00:18:05
100% off cold turkey or did you work
00:18:07
parttime and stay in touch like a
00:18:08
responsible leader of your firm and of
00:18:10
course Gary did just that right and then
00:18:13
Joe says you know what I shouldn't have
00:18:14
written loser and appreciate the PUSH
00:18:15
Pack in more intensive operational
00:18:17
context losing key leaders cold turkey
00:18:19
for six months seems unnecessary but I
00:18:22
respect the different takes here and I
00:18:23
think that really is an actual good
00:18:27
discussion about this is hey well maybe
00:18:29
if you're an intense leader and you
00:18:30
don't have the ability to take a couple
00:18:32
of months off well maybe you should take
00:18:34
a couple of Fridays off and and then
00:18:37
there was a really interesting
00:18:38
discussion what's better for a leader to
00:18:41
do spend a little more time every year
00:18:44
or to spend three or four or six months
00:18:45
in the beginning when you're as you just
00:18:47
said chamath on the periphery here and
00:18:49
trying to be helpful on the margins
00:18:51
maybe for the secondary person if it is
00:18:53
in 5050 sacks it is actually better for
00:18:56
you to pick up some Fridays or whatever
00:18:59
and and take over the whole well I'm
00:19:00
glad I'm glad you read that
00:19:01
clarification by Joe because I think
00:19:03
what he basically is saying is that yeah
00:19:06
he the initial language he used he he
00:19:08
would he basically clarified that and it
00:19:10
sounds like what he's saying is listen
00:19:12
if you're on a high performance team and
00:19:14
you're the star player and you disappear
00:19:16
for six months that's going to cause
00:19:17
your team to lose so I think that's
00:19:19
maybe what he was saying that's a
00:19:21
Perfect Analogy saxs because if we were
00:19:23
looking at Lebron James or Kevin Durant
00:19:25
and they had a baby mid-season or
00:19:26
Draymond had a baby mid-season which I'm
00:19:28
sure has happened to you know folks it's
00:19:31
not like they say I'm not playing the
00:19:32
next six months of games they miss one
00:19:34
game maybe two they go back on the road
00:19:37
and I think everybody understands like
00:19:39
yeah you can't give up one of your 10
00:19:41
primary years or three years left that
00:19:43
LeBron and KD have left I'll give you
00:19:45
one final anecdote to end this chapter
00:19:48
of our discussion today uh 2007 at
00:19:51
Facebook at one point in like one of the
00:19:54
UMP reorgs we were doing as we were
00:19:56
trying to get out of the primordial ooze
00:19:58
I was in charge of HR and everybody at
00:20:01
that company was young except for a
00:20:03
handful of people and then there was
00:20:05
finally a person and I think it was our
00:20:08
this HR person that that at some through
00:20:10
some weird convolution of events
00:20:13
reported to
00:20:14
me uh who got pregnant who was pregnant
00:20:18
and we didn't have a policy because
00:20:19
nobody had ever gotten pregnant before
00:20:21
and you know I remember saying oh we
00:20:24
have to come up with a policy and what I
00:20:26
did was I was like well what would I
00:20:27
want which is the easiest way for me to
00:20:30
answer most questions and I came up with
00:20:32
four months for either the father or the
00:20:35
mother irrespective of the context and
00:20:37
that's how we started the original
00:20:38
policy four years later though when I
00:20:40
had my first kid um I took like three
00:20:41
weeks and it came back because the grind
00:20:43
was too hard yeah all right I think I
00:20:45
think where we have to go is it's been a
00:20:46
crazy week of uh the reconciliation Bill
00:20:50
the infrastructure Bill and how to pay
00:20:52
for this uh incredible spending it's
00:20:54
been a meta week meta it's been it's
00:20:56
been a meta week I mean and this Builds
00:20:58
on on top of our discussions about
00:21:00
inflation uh as well as the supply chain
00:21:03
issues that builds on the conversation
00:21:05
we had about covid and the new president
00:21:08
so we're trying to get the wealth we're
00:21:10
trying to get the reconciliation Bill
00:21:12
done and part of that is hey how is this
00:21:14
going to get paid for and in the course
00:21:16
of one week we've seen uh the tax
00:21:19
proposals flip I think multiple times to
00:21:23
ones that have never been tested and and
00:21:25
may not even be legal in the United
00:21:27
States of course I'm referring to a
00:21:29
billionaire tax which was proposed uh
00:21:32
which would be a penalty or a tax
00:21:35
on assets that are liquid but that have
00:21:39
not yet been sold and it would look back
00:21:41
three years essentially going after
00:21:42
Bezos or Elon lar Sergey basically going
00:21:46
after the top 10 billionaires in the
00:21:47
world and then maybe it was going to be
00:21:48
the top 700 then it became a millionaire
00:21:51
tax all of this to try to pay for these
00:21:53
bills while so much money has been
00:21:56
poured into the system that you know
00:21:59
nfts and stocks are going through the
00:22:02
roof where do we want to begin gentlemen
00:22:05
should we does anybody have thoughts on
00:22:06
this brief billionaire tax that was
00:22:08
floated and what that
00:22:11
says about where we are as a country in
00:22:14
terms of how we think about the success
00:22:16
of our greatest entrepreneurs do we want
00:22:17
to talk about what's fair or the process
00:22:20
well I thought the the process was
00:22:22
insane and what was crazy was that you
00:22:24
know Ron weiden had been working on this
00:22:26
proposal theoretically for the past two
00:22:29
years and at no point did he bother to
00:22:31
float the trial balloon with his
00:22:33
colleagues in the Senate to even see
00:22:35
whether these people actually supported
00:22:37
it Beyond some um folks on the
00:22:39
Progressive left who are ideologically
00:22:42
fixated on you know this confiscatory
00:22:45
way of running the
00:22:47
country the funniest thing about that
00:22:49
bill to me and I let the powers at B
00:22:52
know this is hey guys I've always been
00:22:55
on the record I'm happy to pay whatever
00:22:56
tax you want I feel super blessed to be
00:22:58
in America whatever we want me to pay
00:23:01
30% 80% I don't care but I had a real
00:23:04
issue with the way that bill was written
00:23:05
because I'm like um the Democrats are
00:23:07
writing a bill that will
00:23:10
disproportionately
00:23:11
tax
00:23:13
Democratic uh successful
00:23:16
billionaires and it'll leave intact the
00:23:18
coax who is literally the boogeyman to
00:23:21
the progressive left who wants to write
00:23:23
this bill and I thought how could you
00:23:25
even write this bill this way it is so
00:23:27
stupid you're saying because those
00:23:30
people own private assets and this goes
00:23:31
after guys like me would have been
00:23:33
paying billions of dollars and the CES
00:23:37
would not have paid zero because their
00:23:39
entities are private and yours are
00:23:41
public just so the audience understands
00:23:43
yes how insane is that and yet we're the
00:23:45
ones that is a a great second order
00:23:48
observation these people clearly didn't
00:23:50
think through that was my only issue
00:23:52
with the thing it's like if you want to
00:23:53
try to RAM and jam this thing through go
00:23:55
ahead and try I'm not going to be the
00:23:57
one that that you know
00:23:59
files a lawsuit the day after it's
00:24:01
passed and takes it to the Supreme Court
00:24:03
which will get heard and you know this
00:24:04
conservative Supreme Court would not
00:24:06
have allowed this this tax to stand you
00:24:08
can't Target 700 people uh but by the
00:24:12
way the reason you can't Target 700
00:24:14
because there's a slippery slope from
00:24:15
700 to 7 million to 70 million and what
00:24:19
it does is it allows tax and spend
00:24:23
politicians a blank ledger to go
00:24:25
absolutely crazy and just fund every
00:24:28
single hairbrained pork barrel scheme
00:24:30
that they can come up with and that's
00:24:33
really what we stopped was an important
00:24:35
slippery slope and then in its place I
00:24:38
think is a tax that is fair a simple Sur
00:24:41
tax on adjusted gross income if you're
00:24:43
above X you pay five million and if
00:24:45
you're above y you pay another three so
00:24:47
eight% 5% three% on every kind of income
00:24:51
and I think like that's a really
00:24:52
reasonable way to get folks to pay more
00:24:55
that seems like a good start but the
00:24:56
first version of the bill was so stupid
00:24:58
and the thing that really anchored me
00:24:59
though was it targeted Democratic
00:25:02
successful people and left alone
00:25:04
Republican successful people written by
00:25:06
the Democrats free bir what are your
00:25:08
thoughts on the confiscatory nature of
00:25:12
this I've never heard the word used that
00:25:14
way confiscatory where we're going back
00:25:16
and saying listen you won so much we're
00:25:18
just going to take 20 to 30% of it we
00:25:20
all pay property taxes so we there is a
00:25:24
experience we've all had with paying a
00:25:26
percentage of some of assets that we own
00:25:28
people of all income brackets every year
00:25:31
to your local government to fund local
00:25:34
services that everyone uh participates
00:25:36
in so you know I don't think it's
00:25:39
unfounded now if you look at history as
00:25:42
a guide you know France introduced a
00:25:44
wealth tax to people making over uh I
00:25:48
think it was 1.3 million euro per year
00:25:52
um and it was shut down and came back
00:25:53
basically 1999 2000 and between the year
00:25:57
2000 in the year
00:25:59
2016
00:26:01
25% of millionaire households immigrated
00:26:04
out of France uh during this period and
00:26:07
the amount of tax revenue that was lost
00:26:09
during that period of time was greater
00:26:11
than the new revenue generated from the
00:26:13
wealth tax that was introduced and so
00:26:15
France ultimately scrapped the wealth
00:26:18
tax um and there have been a number of
00:26:20
other you know reasonably good examples
00:26:21
of European countries putting in place
00:26:24
these wealth taxes and then kind of
00:26:26
removing them uh later so um you know on
00:26:29
the one hand I I I think that we've all
00:26:31
seen this experience and Switzerland
00:26:32
does this I think you get taxed on your
00:26:34
total assets in Switzerland and you have
00:26:35
to go negotiate every year uh with
00:26:37
respect to how much you pay it's a very
00:26:39
weird process so on the one hand there
00:26:41
is this kind of experience and and
00:26:44
precedent for paying some percentage of
00:26:46
assets sometimes it's a targeted asset
00:26:48
and sometimes it's not but the longer
00:26:51
range consequences we've seen is like
00:26:53
you know immigration and people realize
00:26:56
there's always a better choice the CH
00:26:57
the question we have in the United
00:26:58
States if we introduce a wealth tax like
00:27:00
this where will successful Americans
00:27:02
immigrate to um you can see how people
00:27:05
could leave France and go to Belgium or
00:27:06
go to the UK or go to Switzerland or go
00:27:09
somewhere else where they might be
00:27:10
better off uh where where are Americans
00:27:12
going to move toada you're a successful
00:27:15
Canada I mean are you going to move to
00:27:16
Vancouver I mean you're from Canada but
00:27:18
saaks would you move you know where
00:27:20
would you move to you know it's almost
00:27:22
like there ends up being this kind
00:27:24
of you know I think really interesting
00:27:27
experiment that'll be run here now
00:27:29
remember this wealth tax was introduced
00:27:30
by Warren and others last year so this
00:27:32
wasn't some New Concept that that was
00:27:34
Fly by Night this has been one of those
00:27:36
things that's been on the shelf for a
00:27:37
while what happened is they pulled it
00:27:38
down from the shelf and said let's try
00:27:40
this now they've never they've never had
00:27:42
committee hearings on it uh they've
00:27:44
never had committee markups on it it's
00:27:46
been tried and repealed in European
00:27:48
countries and like you said they pull it
00:27:50
down on the 11th Hour why because their
00:27:53
carefully laid plans which they've been
00:27:55
concocting for three months were thrown
00:27:57
overboard Cinema said she wouldn't
00:27:59
support the rate increases now I don't
00:28:01
know why they wouldn't go to her at the
00:28:02
beginning of the process instead of
00:28:03
waiting till the end of the process but
00:28:05
so because of that they're scrambling
00:28:07
around trying to find any source of
00:28:09
Revenue so it's oh well a billionaire
00:28:11
tax work no well what about a corporate
00:28:13
AMT how about that no what about a
00:28:15
millionaire search charge these guys are
00:28:17
like burglars rubbing through the house
00:28:20
they hear they hear the sirens they hear
00:28:23
the sirens coming and they're like what
00:28:25
can we take oh the TVs are bolted down
00:28:28
can't get that where's the jewelry what
00:28:30
can we take and it's just you can't set
00:28:33
you can't set tax policy this way and
00:28:35
this whole idea that we can set tax
00:28:38
policy based on our intuitions of
00:28:40
fairness without having hearings to ask
00:28:43
the question what will this do to the
00:28:45
economy how much damage will it cause
00:28:47
this is absurd I'll say it's it's really
00:28:49
important to note um the market is
00:28:53
telling Congress something here and the
00:28:54
market is members of Congress informed
00:28:56
by their uh their constituents the
00:28:59
market is saying maybe we shouldn't be
00:29:01
spending this much because there isn't a
00:29:04
place to fund it and no one's raising
00:29:05
their hand and saying this is something
00:29:06
we can all align on and so I think the
00:29:09
the more important fundamental question
00:29:11
is are we really equipped and do we
00:29:14
really have a general economic interest
00:29:17
economic interests meaning people
00:29:18
measure things and vote with dollars to
00:29:21
support these sorts of social programs
00:29:22
and it seems to me the indication is no
00:29:24
and this seems to me to be primarily a
00:29:27
response of the pendulum swinging the
00:29:29
other way post the Trump era where you
00:29:32
know the Trump era was all about blowing
00:29:33
up these ineffective overregulation
00:29:36
bloated government infrastructure and
00:29:38
and programs and people and and
00:29:41
bureaucracies and now we've kind of
00:29:43
found ourselves through our our voted
00:29:45
Representatives swinging this other way
00:29:47
but it turns out maybe we've swung too
00:29:48
far and the market is now voting and
00:29:50
saying this just isn't a playing field
00:29:53
we should be on and so you know where
00:29:55
they end up here I think regardless it's
00:29:57
going to end up needing to be some sort
00:29:58
of reconciliation on spending to make
00:30:00
this all work let's be honest Bernie
00:30:03
Sanders and Elizabeth Warren were did
00:30:06
not win the nomination the country
00:30:08
specifically wanted a moderate uh Biden
00:30:11
was sold as a moderate go back to the
00:30:13
way it was moderate Dems like Clinton
00:30:17
like Obama this is the classic Coca-Cola
00:30:19
this isn't new Pepsi nonsense and we got
00:30:22
Hoodwinked basically and I think what a
00:30:24
lot of Democrats are seeing now
00:30:25
especially the moderate ones is hey wait
00:30:28
a second Biden is Warren and Bernie and
00:30:30
sheep's clothing perhaps uh and and we
00:30:32
didn't want this this we didn't want
00:30:34
Trump he was too hot and we don't want
00:30:36
this to left crazy let's just take
00:30:40
everybody's money randomly change the
00:30:42
tax code I don't think American citizens
00:30:44
want to live in a world where we change
00:30:47
tax code at the 11th Hour that is scary
00:30:50
to people all people people who have
00:30:52
savings if you care about the economy
00:30:54
but but these progressives I think these
00:30:56
progressives so so used to be that
00:30:59
taxation was a necessary evil you you
00:31:02
you tax people because you got to pay
00:31:03
for government and government programs
00:31:05
everybody hates it but but you do it and
00:31:07
you try to figure out the way of
00:31:08
achieving the revenue government needs
00:31:10
in the least destructive way possible
00:31:12
but I think progressives now they're so
00:31:14
focused and monomaniacal about this
00:31:16
issue of income inequality the fact that
00:31:18
there's some people who've gotten richer
00:31:19
than everybody else that I think they're
00:31:21
willing to tax those people I mean they
00:31:23
would like to siphon off money from
00:31:25
those people I think they would siphon
00:31:26
it off just to light it on fire just to
00:31:28
level people and so they don't really
00:31:30
care what the impact is going to be on
00:31:32
the economy well I mean and their
00:31:34
position was in fact ban the
00:31:36
billionaires that was their roof but uh
00:31:37
you know before we get to that I just
00:31:38
want to say these rules I think
00:31:41
Americans want the rules to be simple
00:31:43
and I don't think people want you
00:31:45
changing the rules at the last minute
00:31:46
and then making them retroactive I think
00:31:48
all Americans want taxes to be
00:31:50
predictable and simple not just change
00:31:53
them willy-nilly because you change the
00:31:55
budget this seems so unthoughtful crazy
00:31:58
chamat your point I have two points to
00:32:00
make the first is that I don't think
00:32:02
anybody really knows what's in these
00:32:05
bills and as a result of nobody really
00:32:08
knowing what's in these bills they're
00:32:10
used as negotiating chits so case in
00:32:13
point when Biden came out and said you
00:32:16
know we have a$
00:32:17
1.85 trillion dollar bill now and we're
00:32:20
ready to get this done so that he could
00:32:22
you know fly to Europe and you know fly
00:32:25
to cop 26 and kind of you know declare
00:32:28
Victory unfortunately the progressive
00:32:30
wing of the democratic party in the
00:32:32
house said no I'm not ready to dance yet
00:32:35
and you know they have consistently
00:32:37
refused to sign an infrastructure Bill
00:32:40
until they got what they
00:32:42
needed from this other Bill and so when
00:32:45
Pelosi called the vote she had to pull
00:32:46
it because they weren't going to get the
00:32:48
votes necessary to get this bill passed
00:32:51
so what this says to me is that even
00:32:53
with spending it doesn't matter whether
00:32:55
you're spending five because that's a I
00:32:56
think it's a trillion dollar bill bill
00:32:58
right that's a$1 trillion bill this is
00:33:00
a$ 1.875 trillion bill nobody cares
00:33:03
about the quantity and nobody cares
00:33:06
about the details they care about some
00:33:08
perceived moral Victory this is the only
00:33:10
reason why we're seeing this you know
00:33:13
Mexican standoff that we're seeing today
00:33:15
if these things were so substantively
00:33:17
important we would have passed the first
00:33:19
bill we would have negotiated a
00:33:21
reasonable second version and pass that
00:33:22
too instead we're here going through the
00:33:25
end of the year with nothing done and I
00:33:27
just want you know the Democratic
00:33:30
Leadership who listens to this because
00:33:31
we know a lot of people in Washington
00:33:32
listen to this
00:33:34
podcast you guys got to get something
00:33:36
done because if you go into the midterms
00:33:38
with nothing done with a Democratic
00:33:41
president Democratic Senate and
00:33:43
Democratic house this is going to be a
00:33:46
bloodbath well this is why something
00:33:48
will will get done but uh you know I
00:33:51
think the political realities are that
00:33:53
at the end of the day the Democrats will
00:33:55
come together and pass something but
00:33:58
it's concerning that we're just talking
00:34:00
about doing something because it will
00:34:02
help you in the
00:34:03
midterms you know in the immortal words
00:34:05
of Nancy Pelosi you have to vote for the
00:34:07
bill in order to find out what's in it I
00:34:09
mean at the end of the day we're not
00:34:09
even going to know what's in this thing
00:34:12
and um you know we're spending another
00:34:15
it'll probably end up being a$ 1.75
00:34:16
trillion bill it'll be stacked on top of
00:34:18
the spending that's already happened one
00:34:20
point remember Biden already pass 1.9
00:34:22
trillion of covid relief another 1.2
00:34:24
trillion of infrastructure no that
00:34:27
hasn't passed yet well it's going to
00:34:28
along with this now 1.75 million sorry
00:34:31
1.75 trillion of this new social
00:34:34
spending Bill assuming right so it's
00:34:36
about five5 trillion 5 trillion wealth
00:34:39
redist progressives have will have set
00:34:42
the stage for this to be perceived as
00:34:43
some sort of failure it's by the way
00:34:45
David if you go back then if you take
00:34:46
that five trillion and add it to the all
00:34:49
the covid before and all of the uh the
00:34:52
FED buying we've probably had one entire
00:34:56
turn of GDP
00:34:58
so call it 20 to 22 trillion doar of
00:35:01
money created in the last three or four
00:35:04
years right now you go back J so so now
00:35:07
so now you go back to Jason what you
00:35:09
started the thing that I have struggled
00:35:11
with the most in these last few weeks is
00:35:13
trying to come to a conclusion on
00:35:15
inflation My worry is that it's here and
00:35:17
it will be persistent and inflation
00:35:19
comes in two ways way number one is if
00:35:22
you massively increase the supply of
00:35:25
money why let's just say the economy at
00:35:28
$100 and now all of a sudden you just
00:35:30
print another 100 so now there's $200
00:35:32
what will happen is all of the goods and
00:35:35
services that make up that 100 will get
00:35:38
repriced to absorb the 200 so prices go
00:35:41
up inflation goes up the second way that
00:35:44
inflation can happen is if middle and
00:35:46
lower inome people buy and spend because
00:35:50
when rich people have extra money they
00:35:52
just buy Financial assets that's why you
00:35:53
get financial bubbles but practical
00:35:56
goods and service are bought by average
00:35:59
everyday normal working folks and their
00:36:03
wages are going up and so I think what
00:36:06
we've created is a really distortive
00:36:09
inflationary cycle that's going to
00:36:12
really hurt the United States because as
00:36:14
saaks talked about we cannot print
00:36:16
enough money to pay for the debt when
00:36:19
interest rates go up this is this is the
00:36:22
this is the number one thing causing me
00:36:24
concern as well is that you look around
00:36:27
it's alltime highs for everything it's
00:36:30
alltime best everything NASDAQ and S&P
00:36:32
alltime highs crypto markets all-time
00:36:35
highs Shibu enu worth 3040 billion do
00:36:39
bubble uh I'm seeing SAS mules real
00:36:42
estate I'm seeing SAS multiples at
00:36:44
all-time highs and so you have to wonder
00:36:46
is this a new normal is this sustainable
00:36:49
or is it some sort of inflated bubble
00:36:52
then you look at the inflation ratees
00:36:54
5.1% to Chamas point it might be
00:36:57
persistent
00:36:58
you look at treasury the treasury uh
00:37:00
interest rates the yield is 1.6% on the
00:37:04
10-year T Bill okay so effectively your
00:37:07
real interest rate for Savers is 1.6%
00:37:10
minus the 5.1% inflation rate you're at
00:37:13
-
00:37:14
3.5% if you just save your money in t-
00:37:17
bills in sort of uh risk-free you take
00:37:20
the risk-free return Nega 3.5% so now
00:37:24
you have everybody going out there
00:37:26
trying to chase yield because how do you
00:37:28
earn a return on your money you don't
00:37:30
want it to be bu you buy stocks or nfts
00:37:32
or houses so people start going into
00:37:34
riskier and riskier assets to basically
00:37:36
try and make up for the loss of
00:37:38
inflation and so you have to wonder
00:37:40
they're trying to hit the one outter
00:37:42
yeah so then okay so so you have to ask
00:37:44
yourself okay so back to this point
00:37:46
about all-time highs is this because
00:37:49
everything is really this great or how
00:37:51
much this is driven by these sort of
00:37:53
distortions
00:37:55
50/50 I mean I'm just putting a number
00:37:57
on it like obviously the industry and E
00:37:59
and economy is doing fantastic but seems
00:38:01
50/50 here's the other thing that I
00:38:03
wanted to make in just the last portion
00:38:04
which is I think what we've realized as
00:38:08
well at the end of this is I I actually
00:38:11
again now to use this empathy card I'm
00:38:12
going to give the progressives my
00:38:14
empathy card and say I understand what
00:38:16
you're trying to do and I believe in a
00:38:18
lot of what you're trying to do is to
00:38:20
even the starting line for everybody
00:38:22
right now a lot of what you end up
00:38:24
proposing distorts that goal by trying
00:38:27
to you know even out the outcomes and
00:38:29
even the finish line but I really do
00:38:31
think they want to even the starting
00:38:33
line but here's a thing that we all have
00:38:35
to realize now all the things that the
00:38:38
progressives want to tax and fund are
00:38:40
actually being done by private
00:38:43
corporations and I think we just have to
00:38:45
acknowledge that and make a decision
00:38:47
about whether as a society that's okay
00:38:49
or not I'll give you two examples number
00:38:52
one is the federal minimum wage we have
00:38:54
tried for years and we have debated
00:38:56
raising this minimum wage it's still
00:38:57
sits today at
00:38:59
$725 just this week McDonald's moved
00:39:02
their minimum wage up Starbucks moved
00:39:04
their minimum wage up we're talking
00:39:06
about you know entrylevel quick service
00:39:08
jobs that now pay1 17 to $25 per
00:39:12
hour right some two and a half to three
00:39:16
plus times the proposed federal minimum
00:39:19
wage the fre Mar and so and so what
00:39:22
government didn't and wasn't able to do
00:39:25
the free markets have done second
00:39:27
example we tried to get free Community
00:39:29
College inside of one of these bills it
00:39:31
was dropped now depending on where you
00:39:34
go the the nation's largest employer
00:39:39
Amazon actually will just pay you to go
00:39:41
to
00:39:42
college right so they are replacing that
00:39:45
intention and a version of the GI bill
00:39:48
but as a private organization so I think
00:39:51
what we also have to realize is that
00:39:53
maybe some of these policy decisions is
00:39:56
actually a little bit of you know
00:39:58
getting tilted by the fact that private
00:40:00
organizations are acting more nimbly to
00:40:02
actually implement this Progressive
00:40:04
agenda because it actually exists in
00:40:06
America if you're willing to take the
00:40:07
time to look let me ask a question about
00:40:09
inflation if who is inflation going to
00:40:12
um hurt the most and who's going to gain
00:40:15
the most from it because it does seem
00:40:16
like
00:40:17
consumables gas station you know
00:40:20
Supermarket trips Etc are going through
00:40:22
the roof in that case you know that's
00:40:25
going to have no impact on the top third
00:40:27
of people because gallon of milk at 36
00:40:29
$9 doesn't matter but then you look at
00:40:33
inflation on stocks it's going to make
00:40:34
it go up so a rich person isn't impacted
00:40:38
by their gas or their groceries but
00:40:40
somebody in the middle class or uh who's
00:40:42
poor that's going to dramatically impact
00:40:44
them so if we spend more does that
00:40:47
actually create a larger wealth Gap
00:40:49
Sachs look inflation is devastating for
00:40:52
the middle class um if you have savings
00:40:55
it if you can afford to put all your
00:40:57
savings and financial assets the way
00:40:59
that the super wealthy can then your
00:41:02
financial assets will go up but if you
00:41:04
have a good sort of middle class income
00:41:08
and you don't have your and your savings
00:41:09
are in something more conservative
00:41:11
you're going to get absolutely uh eroded
00:41:14
by inflation over time it's going to
00:41:16
kill you and you know housing prices
00:41:18
will go up the the um the the middle
00:41:20
class young couple that wants to buy a
00:41:22
house for the first time that's going to
00:41:24
be much harder to achieve because
00:41:26
housing prices will inflate away so I
00:41:29
think you know there is there are some
00:41:31
effects that are a wash so for example
00:41:34
prices go up and then uh wages go up at
00:41:36
the same time but savings can really get
00:41:38
hammered if you're not in financial
00:41:40
assets it hurts the middle class first
00:41:43
but it also hurts it hurts everybody
00:41:45
because again unless you're perfectly
00:41:47
hedged going into a rising rate
00:41:48
environment you will own assets that are
00:41:50
just specul freedberg a scientific
00:41:53
question here are we starting to go into
00:41:55
a self-fulfilling prophecy around around
00:41:57
inflation Allah what happened in the 70s
00:42:00
which is we've been talking about it so
00:42:02
much that anybody who is thinking about
00:42:04
raising prices says well everybody else
00:42:06
is Raising prices so even if my grilled
00:42:08
cheese sandwich hasn't been impacted by
00:42:10
all of this and I didn't have to give
00:42:12
raises to my employees they're happy at
00:42:13
their current salaries I'm just going to
00:42:15
put $2 on my grilled cheese and we just
00:42:17
get this cycle of everybody saying how
00:42:19
much can I add to the cost of something
00:42:21
I trying to remember there's an earnings
00:42:23
uh interview I saw yesterday uh God
00:42:27
which was the company anyway they're um
00:42:29
their company in the industrial supply
00:42:31
chain and he said that they're raising
00:42:34
rates to get ahead of the supply cost
00:42:36
going up for them um so that their
00:42:38
margins won't get squeezed and I think
00:42:40
that's uh it's almost like that what
00:42:42
you're referencing is a little bit of a
00:42:44
run on the bank mentality where um those
00:42:48
with pricing power raise ra raise prices
00:42:51
and as a result you end up kind of
00:42:53
seeing the the the trickling effects
00:42:54
because competition can't catch up so if
00:42:56
everyone's kind of raising rates and
00:42:57
there's not enough competitive Advantage
00:42:59
the one thing that's making this even
00:43:00
harder right now is the gluts in the
00:43:02
supply chain which are reducing the
00:43:04
competitive um uh market dynamics that
00:43:07
we might normally see where One customer
00:43:10
raises one company raises rates and
00:43:11
another company says wait our rates are
00:43:13
going to stay the same but because so
00:43:15
many people are challenged by getting
00:43:16
product there's enough demand for their
00:43:18
product everyone can raise rates
00:43:19
together we're seeing this in the energy
00:43:21
markets now so um yeah I mean this is
00:43:24
kind of part of the scary uh scenario
00:43:27
that that everyone's trying to manage
00:43:28
against um I don't know what the science
00:43:30
is and I'm not an economist but it
00:43:32
certainly seems to me like the
00:43:34
psychology of managers and business
00:43:36
owners and and Boards is such that
00:43:38
they're saying let's get ahead of the
00:43:40
curve let's raise rates and as a result
00:43:41
you're seeing the trickling effect of
00:43:44
inflation throughout the whole economy
00:43:46
so um little scary Sox what do you think
00:43:49
psychologically is going on with raising
00:43:52
prices yeah so so expectations are
00:43:54
definitely part of the inflation game
00:43:55
people raise prices if they expect
00:43:57
inflation in the near future and then
00:43:59
that feeds on itself and that's how if
00:44:01
you look at countries that have had
00:44:02
hyperinflation that's how you get a
00:44:04
spiral now I don't think we're going to
00:44:05
have hyperinflation here but we're at
00:44:07
5.1% now and if people think it's going
00:44:09
to be worse next year and the fed's not
00:44:11
going to raise rates it could even be
00:44:13
higher next year and I think people are
00:44:15
going to start getting upset about this
00:44:17
you know when they buy their
00:44:19
Thanksgiving turkey and their Christmas
00:44:21
ham and those prices are way higher than
00:44:23
they think and they're already paying
00:44:25
gas prices that are a lot higher than
00:44:27
they're used to um I think you could see
00:44:30
a lot of unhappiness out there one other
00:44:32
thing I'm thinking about is is the
00:44:34
logical thing for a person to do in this
00:44:37
hyperinflationary you know Market is to
00:44:39
say you know what the these I went to
00:44:41
look at a car that I wanted to get to
00:44:43
drive in the snow and I was like you
00:44:45
know what I'm just going to hold off
00:44:46
buying this because I'm not paying 15K
00:44:47
over sticker so and I can pay 15
00:44:50
stickers I was like ah do I want to do
00:44:51
that H the other car is okay I'll just
00:44:53
put snow tires on it so are a lot of
00:44:54
people chimen as part of this
00:44:57
psychological you know spiraling out of
00:44:59
control situation then some group of
00:45:01
people might say you know what I'm going
00:45:02
to opt out of consumerism and I'm just
00:45:05
going to lower my burn rate and stop
00:45:06
consuming which is also bad for the how
00:45:08
you going to stop consuming
00:45:09
food food prices
00:45:12
are instead of getting you know Fame
00:45:15
andan you might get chicken okay well
00:45:17
there's gon to be a lot of unhappy
00:45:18
people who are eating chicken for
00:45:20
Christmas instead of fet I me serious
00:45:22
I'm coming to your house so I'm getting
00:45:24
fet so I'm good I'm going to go your
00:45:26
house for lunch and I'm going chamat for
00:45:28
the surf and turf after guys rich people
00:45:31
don't create inflation the middle class
00:45:33
and lower middle class create inflation
00:45:35
there's just not enough rich people to
00:45:37
matter they're irrelevant so when you
00:45:39
look at the last two or three spikes and
00:45:41
waves of risk that we've seen globally
00:45:43
they've come from large multi hundred
00:45:45
million person cohorts of people right
00:45:48
those could be in Asia those could be
00:45:51
specifically in China those could be in
00:45:54
the United States plus all around the
00:45:56
world of certain loose monetary
00:45:58
conditions that's what we have now we
00:46:00
have a multi hundred million probably
00:46:02
approaching more than a billion person
00:46:05
strong liquid buying pool of people that
00:46:07
are again as I said if the if the lowest
00:46:11
on the packing order is now making 17
00:46:13
bucks an hour we all know this guys it's
00:46:16
not as if the inflation stops at 50,000
00:46:19
bucks a year everybody's wag is
00:46:21
Rise so consistent and persistent wage
00:46:25
inflation will allow allow you to spend
00:46:27
more because that's just what people do
00:46:29
we also have high savings rates so
00:46:31
people will feel more flush with money
00:46:32
the point is that everybody will spend
00:46:35
they will spend more you know you can't
00:46:37
get cars you can't get this you can't
00:46:39
get that all this pent up demand will
00:46:41
get
00:46:42
fed and the downstream implication is I
00:46:45
think that prices will rise but it will
00:46:47
disproportionately hurt the middle class
00:46:49
and the lower middle class and then
00:46:51
these asset bubbles will probably
00:46:53
deflate or they'll have to get rated
00:46:57
and If the Fed stops tapering and you
00:47:00
know hikes rates two or three times over
00:47:02
the next 12 or to 18 months man this is
00:47:05
an ugly ugly uh stock market one of the
00:47:09
things people have been asking me to ask
00:47:10
all of us on the Pod is what are our
00:47:13
strategies right now given the turmoil
00:47:15
we're in so maybe we can go around the
00:47:17
horn and what we're thinking about in
00:47:19
terms of our strategies to deal with
00:47:23
inflation while maybe not getting ahead
00:47:25
of our skis and being the bag holders
00:47:27
anybody
00:47:29
have I'm Not Gon I'm not going to answer
00:47:31
this question and you you know why
00:47:32
because I can't got it okay because of
00:47:34
the public Mark I don't I don't want to
00:47:35
even answer this question yet okay well
00:47:38
let can I I'll let me further describe
00:47:40
the the the problem um so this happened
00:47:44
in the late 1970s we had stagflation we
00:47:47
had sort of um every year we had um
00:47:49
increasing inflation because of the
00:47:51
expectation game and the thing that
00:47:53
broke it was you had Paul vulker come in
00:47:55
at the fed and he jacked up interest
00:47:57
rates and uh he actually caused a pretty
00:48:00
severe recession in like 80 I think it
00:48:03
was like 82 uh 81 82 I think by 83 we
00:48:07
were coming out of it and then the
00:48:08
economy absolutely boomed interest rates
00:48:10
came way down because he broke the back
00:48:12
uh back of inflation and actually
00:48:15
interest rates came down for you know as
00:48:17
a result of vulker and the FED
00:48:19
controlling inflation they came down for
00:48:21
40 40 years basically and that those
00:48:24
that decrease in interest rates fueled
00:48:27
everything it made debt a lot cheaper it
00:48:30
uh in it made the stock market boom
00:48:32
because the Net Present Value the
00:48:34
discount rate went down so the net
00:48:35
present value of all those future
00:48:36
earnings went up um so you had it it set
00:48:39
the stage for the Boom in the Reagan Era
00:48:41
and Beyond and and the Clinton ero as
00:48:43
well now what's the difference between
00:48:46
then and now um well for one thing the
00:48:49
government debt as a percentage of GDP
00:48:52
when Reagan took office was around 31%
00:48:56
okay
00:48:57
so when vulker jacked up interest rates
00:49:01
it didn't really create that much more
00:49:03
of a Debt Service cost for the United
00:49:05
States for the federal government now
00:49:07
today the uh the government debt uh is
00:49:12
125% of GDP so if and this goes back to
00:49:16
the to the Dr and Miller point from
00:49:18
previous pod if the the FED were to jack
00:49:21
up interest rates to say the historical
00:49:23
Norm of 4.9% Debt Service would go from
00:49:26
from 2% of the federal budget to 30% you
00:49:29
would have a massive crowding out of
00:49:31
government programs so how we fund all
00:49:33
that Debt Service very unclear so we're
00:49:36
caught between a rock and a hard place
00:49:37
the rock is we have inflation that could
00:49:40
be persistent the hard place is The Debt
00:49:43
Service so you know the tools for
00:49:46
controlling this aren't exactly clear so
00:49:49
this I think is fundamentally the the
00:49:51
problem is it's it's not clear whether
00:49:53
we're going to have you know interest
00:49:55
rates going up or consistent High
00:49:57
inflation uh those are the threats to
00:49:59
the the sort of economic boom we're
00:50:01
seeing now the full side of it is that
00:50:03
the reason why the stock market is one
00:50:04
of the reasons is at an all-time high is
00:50:06
because earnings right now are fantastic
00:50:09
so the economy is doing very companies
00:50:13
are doing very well but we just had for
00:50:16
Q3 the GDP growth was at 2% annualized
00:50:20
which was sort of an anemic number it's
00:50:22
the lowest it's been since this Co
00:50:24
recovery started so it's um you know
00:50:27
it's it's interesting we're at all-time
00:50:29
Highs but there's also these like major
00:50:30
storm clouds on the horizon and I'm not
00:50:32
going to like pretend like I know what's
00:50:34
going to happen I just you know when
00:50:36
when things are this good I start
00:50:38
getting nervous when it's this easy to
00:50:40
make money across everything the stock
00:50:43
market the crypto Market the SAS
00:50:45
investing we're
00:50:46
doing can I can I say that's the that's
00:50:49
the part that really scares me so for
00:50:50
example when everybody gets tilted
00:50:53
because there's some Sheba wallet where
00:50:55
8,000 turns into 5.7 billion right so
00:50:58
for those that don't know there was a
00:51:00
you know Sheba enu coin which is a
00:51:02
shitcoin which was basically there to
00:51:04
ape uh the other shitcoin Dogecoin the
00:51:08
Dogecoin right a mcoin um all of a
00:51:11
sudden some guy uh 13 months ago put 8K
00:51:14
into it because the whole market cap was
00:51:17
80k and then all of a sudden over the
00:51:19
course of these 400 Days that wallet
00:51:22
holds $5.7 billion doar of value or 10%
00:51:25
the entire market cap of sheiba
00:51:27
um people get tilted by that then then
00:51:29
there was an article today in Bloomberg
00:51:31
where there's a gentleman a 66y old man
00:51:33
in Singapore who's a billionaire right
00:51:36
so he was successful in his own right
00:51:38
however he had made in his entire career
00:51:39
about one or two billion and he has made
00:51:42
seven billion in the last two years
00:51:44
speculating on Tesla call
00:51:48
options wow I'm not kidding so buying
00:51:52
short dated calls right riding the
00:51:55
riding the way making money allocating
00:51:57
the gains buying the underlying Tesla
00:51:59
security over and over and over again
00:52:02
and so you know I was talking to Nat
00:52:04
about this and I was telling her these
00:52:06
these examples and she's like that's
00:52:08
what sounds like a bubble because it
00:52:10
really is very difficult to be in
00:52:11
business and to make these decisions and
00:52:13
to be reasonable also if you're a
00:52:15
capital allocator or you're building
00:52:17
companies like how do you know if you're
00:52:19
doing a good job if everybody just is
00:52:23
I'm gonna be right back guys I have to I
00:52:24
have to deliver the goods yeah yeah okay
00:52:26
got a quick baby change I think what's
00:52:28
hard about this is okay so so one of the
00:52:30
areas where it's sort of like best times
00:52:32
ever are is the SAS Market which is
00:52:35
where I invest in and I'm obviously
00:52:36
investing in very very early stage
00:52:38
companies but we're seeing valuations
00:52:41
now go to multiples of ARR that we've
00:52:44
never seen before 50 75 I would say 100
00:52:47
time I'd say 100 times AR is sort of the
00:52:49
rule of thumb right now um and you're
00:52:51
seeing what scale a $5 million company
00:52:53
is worth 500 million uh anywhere from 1
00:52:56
million to 10 million I mean absolutely
00:52:58
is worth between hundred and a billion
00:53:00
dollars which makes no sense well no it
00:53:03
does if well let me give you the
00:53:04
argument for why it could make sense
00:53:06
okay let's say the company is expected
00:53:07
to go
00:53:09
3.3x this year and 3X next year that's
00:53:12
basically a 10x over the next two two
00:53:15
years so that 100x in two years will
00:53:17
only be a 10 times AR multiple and by
00:53:20
the way if you look at the comps for the
00:53:23
companies that have gone public the SAS
00:53:25
companies have gone public
00:53:27
like look at toast being worth what 30
00:53:29
40 billion so they're trading at 30 40
00:53:33
50 60 times ARR in the public markets on
00:53:36
big big numbers so how hard is it to go
00:53:39
3X 3X that is I mean going 3x is hard
00:53:42
going 3X 3X back to back that's like
00:53:45
winning two you know NBA championships
00:53:47
being in the finals it's hard I don't
00:53:49
think it's that hard I mean not for you
00:53:51
but you're the king of
00:53:53
SAS no I'm being dead serious for the
00:53:55
for a sax founder with a million to go
00:53:57
from 1 to three and then 3 to n how many
00:54:00
out of a 100 actually go from 1 to nine
00:54:02
yeah I'll tell you yammer's trajectory
00:54:03
and this is back this is over a decade
00:54:05
old we went from 1 million in our first
00:54:08
full year selling the product to uh well
00:54:12
back in those days we looked at total
00:54:13
contract value of 7 million of tcv that
00:54:15
was about 5 million of ARR and then it
00:54:18
it tripled the year after that so you
00:54:21
know and then we tripled the year after
00:54:22
that well a category defining SAS
00:54:25
company so you're taking Microsoft but
00:54:27
but but I'm just saying that it's
00:54:28
entirely possible there's a lot more
00:54:30
Yammer today or companies with that
00:54:32
growth trajectory so I mean but look
00:54:35
this is what's led to you know our fund
00:54:37
to which we started investing in 2019
00:54:40
which has a SAS Focus already has five
00:54:43
unicorns in it from companies that we
00:54:45
invested in the Cedar series crazy so
00:54:47
but look I mean when you're seeing like
00:54:50
results that good where my head goes is
00:54:52
okay this is too good you know what am I
00:54:54
missing here or like what's the downside
00:54:56
and how long will this sustain just to
00:54:58
build your just to build on your point
00:55:00
there are these businesses that
00:55:03
have I I I would say interesting
00:55:06
products that are growing well but they
00:55:09
may not actually be very important
00:55:11
companies yet they trade at enormous
00:55:14
valuations and then you have these
00:55:16
companies that are just so superb and
00:55:20
I'm talking about Microsoft Google Apple
00:55:22
and Facebook that now trade in many
00:55:24
cases at some pretty deep discounts um
00:55:27
to their intrinsic value but this is the
00:55:30
sign of this histrionic behavior that I
00:55:34
think um embellishes the end of a bubble
00:55:38
right it's this thing where you look at
00:55:40
a growth rate and you don't even ask the
00:55:42
structural questions about business
00:55:45
quality viability sustainability
00:55:48
competitive modes you're like oh well
00:55:50
it's going from
00:55:51
300% you know it's only decaying to 200%
00:55:54
I buy well it's like but yeah but what
00:55:57
are you buying and is there any
00:55:59
longevity and staying power this is why
00:56:01
you know I've I think there are some
00:56:03
great businesses in SAS but I also think
00:56:05
there's a lot of head fakes and in the
00:56:07
public markets particularly people just
00:56:10
want to buy that growth as David said
00:56:12
because they're chasing yield they're
00:56:14
not you know do they really understand
00:56:16
am I buying this company because I
00:56:17
really believe in this database
00:56:19
technology versus that streaming
00:56:20
technology versus this container
00:56:22
technology they don't know any of those
00:56:24
things well I to to so so this is the
00:56:27
conundrum is I actually do believe like
00:56:29
so I believe in my own portfolio and I'm
00:56:31
doubling down on all these companies and
00:56:33
I do believe in SAS and I think the
00:56:34
reason why these SAS companies get such
00:56:36
great multiples is because they're pure
00:56:38
software businesses very high gross
00:56:39
margins 80% plus gross margins you know
00:56:42
once the flywheel gets going they're
00:56:44
very hard to displace I mean they have
00:56:46
uh it's not just a recurring Revenue
00:56:49
subscription type business but you get
00:56:51
expansion out of your current customer
00:56:52
base so you know on January 1 of a new
00:56:55
year you're starting with 120% 150% of
00:56:59
last year's Revenue just from your
00:57:00
existing customers and then you're
00:57:02
stacking the new Revenue courts on top
00:57:04
of that so I am a believer in SAS but
00:57:06
when I see everything going so well it's
00:57:10
SAS and NASDAQ and S&P and crypto and
00:57:14
and then I see you know 125% debt to GDP
00:57:17
and the the sort of radical uh spending
00:57:21
that's coming out of Washington I just
00:57:23
start getting nervous and I don't know
00:57:25
if I have like a prescription for people
00:57:27
out there I would just be a little bit
00:57:29
cautious right now and temper Your
00:57:31
Enthusiasm but but look the fli side of
00:57:33
it is we could keep having a boom for
00:57:35
five more years you know and so
00:57:38
theet while inflation going sit out you
00:57:41
can't sit out out but but but but you
00:57:43
know but on on um I was listening to
00:57:45
Vinnie lingham's um show on uh beep on
00:57:50
Callin it's called it's called crypto
00:57:52
music no he and sunny MRA do a great
00:57:55
show that you just got 25 bips we just
00:57:58
you guys should all listen to a show
00:57:59
it's called crypto musings they they
00:58:01
were talking about all the the dog coins
00:58:03
the other night it was Sheba enu and
00:58:06
Dogecoin and there's a couple others
00:58:09
Vinnie made a great point he said listen
00:58:10
if you're out there listening and you're
00:58:12
sitting on lifechanging money in Sheba
00:58:14
youu sell take it off the table if you
00:58:18
can key words being if you can so look I
00:58:20
you know this boom could last for
00:58:22
another five years it could last for
00:58:23
another 10 years and the Valu valuations
00:58:26
keep going up the earnings could keep
00:58:28
going you don't want to miss out on that
00:58:29
bull run but if you've got lifechanging
00:58:32
money in a in a highly risky position
00:58:35
that's not I'm amending my advice of let
00:58:38
your winners ride to take some take some
00:58:40
chips off the table prudently doesn't
00:58:42
mean you sell everything but just take
00:58:44
some chips off the table to diversify
00:58:46
specifically diversify yes yeah I mean I
00:58:48
think it's absolutely I mean I got to
00:58:50
say when when you saw these quarterly
00:58:52
earnings there is no better business in
00:58:55
the world than Google
00:58:57
singlehandedly par excellance the most
00:59:00
incredible moneymaking machine that's
00:59:02
ever been created and a close second as
00:59:04
it turns out is Microsoft unbelievable I
00:59:07
mean just to which is now the most
00:59:09
valuable company in the world greater
00:59:10
than Apple well and and freedberg has
00:59:11
been saying this on the podcast forever
00:59:13
but just to give people an idea qy
00:59:15
Revenue at Google was up
00:59:19
41% year-over-year
00:59:22
to $65 billion dollar in a quarter by
00:59:26
the way that is high margin high margin
00:59:28
the incremental revenue on the core
00:59:31
Google
00:59:33
product uh generated an increment
00:59:35
operated at an incremental 50% ebit
00:59:38
margin and they just adjusted their
00:59:40
their capex depreciation amortization
00:59:43
schedule because they realized that
00:59:46
their computers that they use in their
00:59:48
data centers last four years instead of
00:59:50
three and the networking equipment lasts
00:59:52
5 years instead of three so they're like
00:59:54
and and I've been saying this since the
00:59:56
beginning because I worked at Google and
00:59:57
ERS is still there and he runs all the
00:59:59
data centers and the networking
01:00:01
infrastructure when I worked at Google
01:00:02
there was this Amazing Project where we
01:00:04
built a 10,000 I we didn't build it they
01:00:06
built it a 10,000 ports switch called
01:00:08
fire hose which helped increase the
01:00:10
throughput of the data centers and have
01:00:12
these massively parallelized indexing
01:00:14
and um uh and uh and production
01:00:18
servers um and there was so much
01:00:20
investment made from the beginning in
01:00:22
building the infrastructure stack the
01:00:24
flywheel continues to move spin faster
01:00:27
and faster and faster and here they are
01:00:28
building their own servers building
01:00:29
their own racks their own data centers
01:00:31
literally the most they have their own
01:00:33
fiber across the oceans um literally the
01:00:36
most vertically integrated business in
01:00:38
history with a moat that no one will
01:00:40
ever be able to catch up on and I read
01:00:41
all these nonsense comments on the
01:00:43
internet about people being like why
01:00:44
doesn't someone else go after search
01:00:46
it's so crazy to me people fail to
01:00:48
recognize that what we see is the tip of
01:00:50
the iceberg at Google and this flywheel
01:00:52
is built by layers and layers of
01:00:55
Monopoly istic in a good way
01:00:57
monopolistic technical advantages that
01:01:00
they've built into this business over
01:01:01
the period of the past two decades and
01:01:03
it is extraordinary beyond anything
01:01:06
we've ever seen in human history how
01:01:07
well this commercial enterpris has run
01:01:09
and the reinvestment of capital has been
01:01:11
extraordinary they' if you look at
01:01:13
YouTube in the quarter uh YouTube
01:01:16
generated this is insanity YouTube is
01:01:19
now operating in a nearly $30 billion
01:01:21
Revenue run rate and that's just like
01:01:23
pure margin incremental revenue for
01:01:25
Google layered on um you know built off
01:01:27
of the same ad ad network uh that they
01:01:30
were originally running on Google
01:01:31
obviously they have a different ad team
01:01:33
now at YouTube but YouTube now has more
01:01:35
Revenue than Netflix and is growing at
01:01:38
likely 40 to 60% year-over-year Revenue
01:01:42
growth rate whereas Netflix is you know
01:01:44
considered one of the Fang stocks you
01:01:45
know one of the top stocks and Netflix
01:01:48
is only growing at 22% remove Netflix
01:01:50
and just put Google twice it should be
01:01:52
and then you look at Google YouTube in
01:01:54
there on its own Google cloud is now
01:01:56
operating at a 20 billion run rate and
01:01:59
you know they can just throw these
01:02:00
services on top of um all these
01:02:02
flywheels that they've built and they
01:02:04
become massive Enterprises unto
01:02:06
themselves I mean it is a behemoth that
01:02:08
is effectively not attacks in a bad way
01:02:11
but attacks on the internet because they
01:02:13
are core infrastructure to service
01:02:15
almost everything that we all consume
01:02:16
and use they give it to everybody free
01:02:19
and they build the internet for every
01:02:21
they been they have been extremely smart
01:02:23
about competitive pricing as we saw
01:02:24
recently they dropped the in the store
01:02:27
to 15% if I'm making an app and I'm
01:02:30
giving Apple 30% now I give Google 15%
01:02:33
I'm more inclined to promote my Android
01:02:34
app and that's going to affect users and
01:02:36
you know they're putting out this pixel
01:02:37
6 phone that looks like an incredible
01:02:39
piece of equipment that's cheaper than
01:02:41
the iPhone they're an incredible
01:02:43
company they are so incredibly well-run
01:02:45
at the top Sundar is an incredible CEO
01:02:50
um and they are they're running a money
01:02:53
printing pest uh at Amphitheater Parkway
01:02:55
in Mountain View I was going to say
01:02:57
Jason to your
01:02:58
point I was talking to
01:03:01
somebody and one really interesting
01:03:05
thing that this organization did was um
01:03:10
a couple of years ago they basically
01:03:12
went long Google and Microsoft and they
01:03:15
shorted Apple Amazon and Facebook
01:03:18
against it and I asked them why and they
01:03:22
said it's the best inflation hedge we
01:03:25
could come up with with at massive
01:03:27
scale that could work in a way where you
01:03:30
know we're long growth but we're hedged
01:03:33
where you know the types of Supply
01:03:35
constraints that could come in and you
01:03:37
know kick us in the ass would never
01:03:38
affect Microsoft and Google the same way
01:03:40
that it would affect apple and Amazon
01:03:43
which by the way in their earnings
01:03:44
results they said right Amazon has huge
01:03:46
issues on the supply chain side Apple
01:03:48
has huge issues on the supply chain side
01:03:50
Amazon was up 15% they missed their
01:03:53
numbers although Amazon web services is
01:03:57
a 40% year-over-year also on a big
01:03:59
number $16 billion in
01:04:02
AWS revenue for Q3 so that as a
01:04:06
standalone company is now on a what do
01:04:08
what did you guys think about meta 60
01:04:09
billion oh my God I mean that was did
01:04:12
you watch the video I watched the whole
01:04:15
thing I watched two minutes of it and
01:04:17
then I stopped watching pts I mean it's
01:04:21
basically you you have Facebook in the
01:04:24
face of all of the things all the times
01:04:27
they got their hand caught in the cookie
01:04:29
jar saying this is going to be the new
01:04:32
world but instead of us doing everything
01:04:34
wrong and screwing the users and their
01:04:36
privacy and democracy and creating
01:04:38
Strife in the world this time we're
01:04:40
going to make it open source this time
01:04:42
we're going to build a coalition and
01:04:43
partnership and this time it's going to
01:04:45
be awesome and it's it's like a
01:04:47
dystopian SNL skit where Zuckerberg is
01:04:50
describing the future and he literally
01:04:52
describes how proud he is that you're
01:04:54
going to be able to play Grand Theft
01:04:56
Auto and Nick C is like yeah this is
01:04:58
going to be amazing this time we're
01:05:00
going to bring all the regulators and
01:05:02
the scientists in to tell us how to
01:05:04
build it and we'll have consensus of how
01:05:05
to build the future and you're like did
01:05:08
you just say that everybody in 3D is
01:05:10
going to be in a virtual space beating
01:05:12
each other up with bats and guns and
01:05:14
killing police officers in Grand Theft
01:05:16
Auto luckily they didn't show a clip of
01:05:18
it uh but it was basically Zuckerberg
01:05:20
taking credit for every single uh
01:05:23
virtual reality or augmented real thing
01:05:26
you've seen over the last 20 years he
01:05:28
literally took everything from education
01:05:31
to hollow lens to you know poker games
01:05:35
and he took basically credit that this
01:05:38
is going to be the future and that
01:05:39
instead of this time it being a closed
01:05:41
ecosystem it would be an open one that
01:05:43
supports nfts and don't worry this time
01:05:46
I think any developer who puts any
01:05:47
amount of their effort into supporting
01:05:50
in any way Zuckerberg's view of the
01:05:52
metaverse is crazy when they could do it
01:05:55
on a distributed decentralized Crypt
01:05:58
based open-source platform you do not
01:06:01
want to give Zuckerberg any more power
01:06:03
and if there is even a 10 or 20% chance
01:06:05
that this is the next big computer
01:06:06
platform Zuckerberg needs to be stopped
01:06:09
from doing it by the market jcal I
01:06:12
you're I think you're crazy I think
01:06:13
you've lost your mind I haven't yeah I I
01:06:16
think lost your mind oh my God I have a
01:06:18
counterargument too okay David you start
01:06:20
well I I don't even know if if I could
01:06:22
categorize what I'm about to say as a
01:06:24
counterargument I don't even know how
01:06:25
counter that all I would say Insanity
01:06:28
all I would say is look I think it's
01:06:30
really great that Facebook is spending
01:06:32
all this R&D money on metav verse
01:06:35
virtual reality Oculus is a really cool
01:06:37
product I think Jason you've made the
01:06:39
observation that people use it once say
01:06:41
it's the coolest thing ever and never
01:06:42
use it again there is that element to it
01:06:45
they have to solve that um using Oculus
01:06:47
for the first time was one of the most
01:06:50
unique experien I've ever had with
01:06:51
Computing but I admit I don't use it
01:06:54
anymore it's just not better or worse
01:06:56
than PornHub the first
01:06:58
[Laughter]
01:06:59
time but any event look I think I think
01:07:02
the that's his way of saying
01:07:05
words I think that the fact that
01:07:07
Facebook wants to do all this R&D and
01:07:09
virtual reality great um changing the
01:07:11
name of the company however at this
01:07:13
point in time it felt to me like a
01:07:16
little bit like Philip Morris changing
01:07:17
his name to Altria Group and by the way
01:07:19
I don't buy the idea that Facebook is
01:07:22
like cigarettes I don't believe that at
01:07:23
all I don't think it's it's bad for
01:07:25
people in the way that it's been hyped
01:07:27
up to be you're saying this is a PR
01:07:29
marketing straty but it feels like
01:07:30
they're running from their name and uh
01:07:33
and and basically it's almost like
01:07:35
saying you know this whole business of
01:07:37
social networking has been so sullied
01:07:39
that we need to appear to be a
01:07:41
diversified portfolio of companies of
01:07:43
Which social networking is just one
01:07:45
small piece a deprecating piece yeah
01:07:47
exactly and I don't I don't really buy
01:07:50
into that and I I I think if that was
01:07:52
any part of their motivation it's a
01:07:54
mistake because I think the only thing
01:07:56
Facebook should do about all these
01:07:58
accusations is get up on their hind legs
01:08:00
and fight because I think like all this
01:08:03
these leaks from the so-called
01:08:04
whistleblower I think this is a
01:08:06
completely orchestrated political hit
01:08:09
and they should just fight back and push
01:08:10
back on it I think the dangers of social
01:08:12
networking have been vastly exaggerated
01:08:15
so it seems to me like they're buying
01:08:16
into that nonsense by running from their
01:08:19
name I so I at least would not have done
01:08:21
this right now I would have won that
01:08:23
battle and then if it was still
01:08:24
important to change their name then I
01:08:26
would have changed the name uh well
01:08:28
they're losing young people at an
01:08:30
extraordinary rate on Facebook us
01:08:32
teenagers were projected to decrease by
01:08:34
45% over the next two years young adults
01:08:36
between the ages of 20 Ina were expected
01:08:39
to decline by 4% or Tik Tok I think is
01:08:41
probably more accurate yeah Tik Tok is
01:08:42
Big yeah yeah during that same time
01:08:44
frame via leaked memo obtained by by way
01:08:46
I mean how in the world is Facebook or
01:08:48
Instagram more dangerous than Tik Tok I
01:08:51
I don't get it no Tik Tok is dren which
01:08:54
but by the way are Stan making our Henry
01:08:57
bcer of uh Tik Tok is reporting that we
01:09:01
have like millions of views over there
01:09:02
so there's some Rogue did I say that how
01:09:05
much I love Tik Tok I love Tik Tok he's
01:09:07
building our audience we're connecting
01:09:09
with J
01:09:10
finally Tik Tok Tik Tok you're right
01:09:14
you're right the Tik Tok account there's
01:09:16
an all-in Tik Tok account done by a fan
01:09:18
and we got like 2 million views in the
01:09:20
last week it is absolutely boners we
01:09:22
just passed Rachel mat and a bunch of uh
01:09:24
folks more popular than all of MSNBC
01:09:27
yeah well I mean come on way to set the
01:09:29
Benchmark fredberg do you guys do you
01:09:33
guys remember a year ago Larry Ellison
01:09:35
negotiated this deal with Trump to buy
01:09:37
Tik Tok for he's going to throw in laai
01:09:40
fredberg is uh and Masa son was supposed
01:09:43
to be on Tik tok's board yeah that's by
01:09:45
the way uh xiin ping is on laai right
01:09:48
now and Larry Ellison got tick to fair
01:09:51
trade nobody talks about the Billy that
01:09:53
uh Ellison kicked into Tesla right
01:09:55
before to that he AOS he made like1
01:10:00
billion
01:10:02
15 billion he's such a bus he he put a
01:10:05
billion dollar investment joined the
01:10:06
board told everyone talk all talk all
01:10:10
the the the smack you want about this
01:10:11
guy but he's Landing spaceships on a
01:10:14
drone ship in the middle of the ocean
01:10:16
what are you do he'll figure it out
01:10:17
he'll figure it out and 15 eggs that's
01:10:20
insane but wait I have one question for
01:10:21
freeberg is Zuckerberg pulling a Larry
01:10:24
Page I
01:10:26
somebody else becomes CEO of the
01:10:27
Facebook collection of companies and
01:10:29
then he becomes the chief product
01:10:31
officer and then doesn't have to go to
01:10:32
Senate hearings no I think he's way more
01:10:35
active and driven in terms of product
01:10:36
Direction than Larry ever was so I don't
01:10:39
think they're the same person and I
01:10:40
wouldn't liking these two what about the
01:10:42
meta strategy of changing the company
01:10:44
name um by the way my prediction was
01:10:46
that they were I should have done this
01:10:47
on the Pod a month ago I said they were
01:10:48
going to change their name The Meta I I
01:10:51
think that uh at some point as you
01:10:53
diversify these businesses
01:10:56
um away from your core and you have this
01:10:58
core engine driving the business um you
01:11:01
know you have to make it look like these
01:11:03
businesses can and will operate
01:11:05
independently while they might get some
01:11:07
leverage off of one another and one
01:11:08
might feed into the other um they need
01:11:10
to be able to operate independently from
01:11:12
a kind of public perception operating
01:11:14
and management perspective that's what
01:11:16
alphabet did it's a natural progression
01:11:17
of States as you start to do things that
01:11:19
are too far distinguished from one
01:11:21
another um and so it feels reasonable I
01:11:23
think you know is this a whole like PR
01:11:26
rebranding maybe to some extent that's
01:11:28
helpful but I do think that this idea
01:11:30
that we need to do more than we're doing
01:11:31
today and we need to make a big hard
01:11:33
cold bed on it um is what this
01:11:35
represents now the the the the the the
01:11:38
important psychological question is he
01:11:41
doing it out of a matter of Defense
01:11:43
meaning like does this signal fear about
01:11:45
the Core Business um or is it about
01:11:48
ambition and aggression and and rebets
01:11:51
on New Opportunities and emerging
01:11:52
opportunities that he thinks and that's
01:11:53
the big debate that I think is kind of
01:11:55
going on right now is how much often
01:11:57
when you see people make big moves like
01:11:58
this it's either out of greed or out of
01:12:00
fear and I think um some people are
01:12:03
asking the question how much should we
01:12:05
be afraid of the core business being
01:12:06
eroded based on his making this sort of
01:12:08
a big bet oh you think this could
01:12:10
perpetuate that or it's a bit of a tell
01:12:12
that this is happening a tell got right
01:12:15
and and I'm not saying that's the case
01:12:16
I'm saying that's the question right and
01:12:18
that's the question a lot of people are
01:12:19
asking is this a tell that the core
01:12:22
business is at serious risk well he's
01:12:25
putting 10 billion into it this year for
01:12:27
example this apple you know ad Revenue
01:12:30
business I think is climbing by billions
01:12:32
of dollars while Facebook's Core
01:12:33
Business is being affected by the the uh
01:12:35
TR cookie tracking policy change on
01:12:37
Apple iOS uh so at the same time that
01:12:40
you know Apple's reaping these benefits
01:12:42
from the changes that they've made uh in
01:12:44
iOS you know people don't really have
01:12:46
great visibility into how much it's
01:12:48
really affecting Facebook's ad Revenue
01:12:49
at this point and this could be as you
01:12:51
point out the tell um that maybe things
01:12:53
aren't that good and he needs to
01:12:54
diversify he needs to make a big
01:12:56
aggressive bet elsewhere so um you know
01:12:58
we'll see I mean important question
01:13:00
chamath are we going to celebrate the
01:13:02
birth of both your and friberg's
01:13:05
daughters with a poker
01:13:08
game with my
01:13:10
gambling do you want me do you want me
01:13:11
to give you my thoughts on meta or no
01:13:13
you don't care no it's a joke can you
01:13:15
take a paternity to go
01:13:17
toen I got a board meeting I gotta go
01:13:19
bite all right uh for the queen of
01:13:22
quinoa wait wait wait don't you want to
01:13:24
know what I think I think on The Meta
01:13:26
thing I think the the risk is if Google
01:13:29
and apple take the hardware costs to
01:13:32
zero because I think there's an
01:13:34
incentive in a highly fragmented
01:13:36
ecosystem you have to remember when
01:13:37
Apple introduced the iPhone there was
01:13:39
nothing that came before it so it was
01:13:41
completely groundbreaking and I think
01:13:43
what Facebook has to figure out is how
01:13:44
to make their VR experience so
01:13:46
revolutionary that it attracts
01:13:48
developers and in the meantime if Apple
01:13:51
and Google figure out how to kind of
01:13:52
give it away for free and just kind of
01:13:54
make it a lowcost Hardware game where
01:13:58
everything else Jason as you say is this
01:13:59
kind of Open Source thing where it's
01:14:01
like a browser yeah right where
01:14:03
everything just exists in a dii kind of
01:14:05
world like the web and the internet then
01:14:07
then it's a little bit more problematic
01:14:08
for all the money spent that's what they
01:14:10
have to figure out you think it's GNA be
01:14:12
VR or
01:14:15
ar what wins the day with
01:14:18
consumers well that's a good question I
01:14:20
mean they're very different
01:14:22
experiences um both can win but talking
01:14:27
20 years from now which one will be used
01:14:29
more or 10 years from now 10 to 20 years
01:14:30
from now which one will make more money
01:14:32
be more relevant be more utilized well I
01:14:35
mean AR the dream there is that you wear
01:14:38
these glasses that have like the
01:14:39
Terminator view where it's like scanning
01:14:41
the world and giving information you'll
01:14:42
never forget anyone's name again stuff
01:14:45
like that um that would be kind of
01:14:47
useful maybe um VR I think is more about
01:14:50
immersion uh it's really like a gaming
01:14:53
experience I think at least now I think
01:14:55
it's all about AR basically what he was
01:14:57
saying there he was talking about VR I
01:14:59
think VR let you make the worlds and
01:15:01
then AR let you experience them
01:15:03
concurrently with the real world and
01:15:05
it's the same Tools in libraries and
01:15:07
kits as a developer making it for VR AR
01:15:10
is going to be
01:15:11
pretty I think seamless and so I think
01:15:14
Apple has skipped VR on purpose and
01:15:16
they're going to AR I think Google is
01:15:20
basically going to go directly to AR and
01:15:23
then where does that leave then
01:15:25
Microsoft already has hollow lens that
01:15:26
they've been investing in heavily and
01:15:28
they think they got the biggest lead uh
01:15:30
that at least we publicly know about so
01:15:31
I think it's going to be a race for who
01:15:32
can get AR to work and VR is just like
01:15:35
kind of a waypoint on the way
01:15:39
there there's a lot of stuff going on
01:15:41
and I'm I'm sure that people will want
01:15:43
to check out of the real world for some
01:15:45
amount of their life but they'll
01:15:48
probably also want to be in the real
01:15:49
world for some part of their life and at
01:15:52
some point maybe if those two things
01:15:53
merge that won't matter as much and I
01:15:56
think if the experience is compelling
01:15:59
enough it could happen well I mean if
01:16:02
you think about us playing poker on the
01:16:03
poker one of those poker apps if we
01:16:05
could put our glasses on sit in our room
01:16:07
and see each other at a poker table you
01:16:10
know like if bogot wanted to play from
01:16:12
Australia and he was you know projected
01:16:14
into the seat on the game and we all saw
01:16:15
them there with glasses AR glasses that
01:16:17
would be amazing wouldn't it be able to
01:16:20
you know have two of the people at the
01:16:21
game be projected in as it were
01:16:25
could be especially if it was Diego I
01:16:27
mean that would be pretty great I mean
01:16:29
for I'm saying for the good of the game
01:16:31
I I did a tweet where I said listen VR
01:16:33
people leave it on the shelf and you
01:16:34
know Palmer lucky and a bunch of people
01:16:37
got in my face about it and then we had
01:16:39
like a actually really good discussion
01:16:41
um and I said well what about serious
01:16:43
Gamers because I'm talking about serious
01:16:45
Gamers they all buy it and then they
01:16:46
never use it and they said yeah it's not
01:16:47
for serious Gamers I said okay well what
01:16:48
about iPad Gamers and casual gamers and
01:16:50
bejweled and Candy Crush they're like oh
01:16:52
yeah they're not interested in it and
01:16:54
I'm like well who are The Gamers then is
01:16:56
it the intense ones or the Casual ones
01:16:57
they said no there's a new category the
01:16:59
number one game like wck room beat saber
01:17:02
and golf are like crushing it uh with a
01:17:05
million users a month in some cases you
01:17:08
know what they all have in common their
01:17:10
physical activities where you get some
01:17:11
amount of exercise and it would be very
01:17:13
difficult to coordinate in the real
01:17:14
world I know but Jason when you look at
01:17:16
things like like axi Infinity where you
01:17:18
know there are play to earn movements
01:17:20
that are happening in in sort of this
01:17:22
you know layer three kind of defi world
01:17:25
where you're getting paid to basically
01:17:27
you know play games that could be a job
01:17:29
and then you will spend 8 to 10 hours in
01:17:31
a metaverse of some sort so these things
01:17:33
are very possible I find it so dystopian
01:17:37
uh yeah that's true but I'm sure that
01:17:39
our parents find some parts of our
01:17:41
lifestyle dystopian and you know we find
01:17:44
certain parts of our kids lives
01:17:45
dystopian it's just what happens yeah I
01:17:48
don't know all right everybody we will
01:17:50
play poker we will play poker yeah we
01:17:52
got to play poker at some point I mean
01:17:53
we will play poker either either Tuesday
01:17:55
or Thursday okay yeah well that's good
01:17:57
perfect babies will be like almost a
01:17:59
week which which days are you going to
01:18:01
flake Tuesday and Thursday which day
01:18:03
will you play Tuesday and Thursday
01:18:04
Tuesday and Thursday sey I mean do I
01:18:06
have to come pick you up I can play on
01:18:08
Tuesday all right everybody four the
01:18:10
queen of quinoa the Rainman and the
01:18:13
dictator I'm Jason kenis we'll see you
01:18:15
all next time on all in love you
01:18:19
besties let your winners
01:18:22
ride Rainman David
01:18:27
and instead we open source it to the
01:18:29
fans and they've just gone crazy with it
01:18:31
love you
01:18:36
[Music]
01:18:39
Queen besties
01:18:42
are that's my dog taking your
01:18:47
driveway oh man my habiter will meet me
01:18:50
at we should all just get a room and
01:18:52
just have one big huge orgy cuz they're
01:18:53
all useless it's like this like sexual
01:18:55
tension that they just need to release
01:18:58
Som
01:19:00
your
01:19:03
your we need to get merch
01:19:08
[Music]
01:19:12
our I'm going
01:19:15
[Music]
