All-In with Chamath, Jason, Sacks & Friedberg

Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

E33: Apple’s hypocrisy, America’s math failure, crypto’s regulatory correction, Clubhouse’s future, UFOs & more

E33: Apple’s hypocrisy, America’s math failure, crypto’s regulatory correction, Clubhouse’s future, UFOs & more

Sat, 22 May 2021 04:09

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Referenced in the show:

The Verge - Apple employees circulate petition demanding investigation into ‘misogynistic’ new hire

The Verge - Apple employees call for company to support Palestinians in internal letter

Vox - Full transcript: 'Chaos Monkeys' author Antonio García-Martinez on Recode Decode

Business Insider - Tobi Lutke's Email

TK News by Matt Taibi - On the Hypocrites at Apple Who Fired Antonio Garcia-Martinez

The Information - Seven Apple Suppliers Accused of Using Forced Labor From Xinjiang

Persuasion - America Is Flunking Math

Bloomberg - Gap With White House on Infrastructure Is Widening, GOP Says

St. Louis FED - 10-Year Breakeven Inflation Rate

TED - A prosecutor's vision for a better justice system


Show Notes:

0:00 Apple's hypocrisy re: AGM firing

25:48 America is failing math

40:10 Inflation fears slowing down, infrastructure bill restructuring, corporate tax loopholes

50:10 Clubhouse's plummeting download numbers, David Sacks gives the besties a scoop

57:46 Crypto correction: regulation, centralized coins, potential black swans

1:13:30 Friedberg's science corner: UFOs

1:19:18 Sacks presses other billionaires on their support Chesa Boudin

#allin #tech #news

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Freeburg? Freeburg. What's up? It seems like you have a ***** ** **** on the side of your mouth. Or is that a birthmark? Oh no, it's a birthday gotcha. Did you record that? Yeah, absolutely. Jesus, look at this guy. He takes his shirt off for one ******* selfie and now everybody who's fat and pal on the show, the other three of us is going to be ridiculed. I'm having steak tonight as TEA K tonight. I'm lifting twice a week now. Come on, sax. Come get some. Let's ******* go 3/2. Let your winners ride. Hey, man, David. We open sources to the fans and they've just gone crazy. Queen. Hey everybody. Hey everybody, welcome to another episode of the All In podcast with me again. The dictator himself. Through Poly Hypatia. Rain Man David Sacks definitely with us. Definitely a great driver. His dad lets him drive in the driveway. And of course everybody's favorite. The Queen of Kinowa, the science conductor himself. David Frieberg, Queen, the Queen, a lot of activity online. It's been a little bit of chaos since we all got together here. I guess we should talk about this Apple story with Antonio Garcia Martinez. You may have heard that he was hired by Apple to, I guess, run their ad efforts. And I have a little bit of information on kind of what he was going to do there in terms of ads, which is really interesting. But tell us, tell us, tell us, tell us. OK, well, anyway, you know how we're basically start at the beginning and assume people don't know who? Antonio Garcia. Marco Antonio Garcia Martinez. Was a Facebook developer. He is some really smart guy who uses a lot of big words and wrote a book called Chaos Monkeys which is a great book where he takes. The very Jack Kerouac kind of, you know, a lot of pros. And he wrote this book about his time at Facebook. The problem is he said some things in the book that would be five years later, problematic. At the time they were actually considered problematic by some folks and. In the full quote maybe less problematic, but he was essentially ousted because of the following problematic quote. The quote is most women in the Bay Area are soft and weak, cosseted and naive despite their claims of worldliness and generally full of ****. They have their self regarding entitlement, feminism and ceaselessly vaunt their independence. But the reality is come the epidemic. Plague or foreign invasion, they become precisely the sort of useless baggage you trade for a box of shotgun shells or a Jerry can of diesel. And they shorten that quote to be that most women are soft and weak. And full of ****. So in context, in context, in this book he was contrasting the Bay Area women he had dated with the mother of his kids, who he describes as strong and tall and tough and amazing. But still the quotes a little gnarly and the quote out of, you know, when it's out of context becomes particularly and of course. This led to a petition at Apple, which then led to him being fired, which now is going to lead to him probably getting a $10 million settlement. Of course, there's a lot of hypocrisy being brought up here because Apple has allegedly been using or Apple supply chain has slave labor in it from the Uighurs and other ethnic minorities, and obviously Apple gave Doctor Dre. Billions of dollars for beats by Dre and. He has a even more misogynistic series of lyrics and was also accused of physically assaulting. I believe his wife and other people he dated. Who? Doctor Dre. Doctor Dre? Yeah. Uh, so anyway, uh. What do you think? OK, there you go. Next story. No, I'm happy to jump into this. I think Jason, I think you're you're you focus a little bit too much and I saw your your pod with Zach Coleus on this lot of good takes. But I think you're a little too focused on what a GM as I think it's easier to just call him by his initials, what he did as opposed to what the employees at Apple did. And there is at least four things that Apple did or five things that Apple did wrong. I mean, number one, I think there was a very good reason not to hire this guy, which is that. He wrote a bestselling tell all book about the last big tech company he worked at. So why if you're a big tech company, why in the world would you hire him? So that was stupid decision number one. But they did decide to hire him and once they hire him, they got to treat him like any other employee and give him a chance to show what he can do. And so that leads to mistake #2, which is these 2000 employees who signed this petition. Really distorted and took out of context that passage and I know the passage is cringe OK and Marley and and it could you know certainly appear sexist but you have to put it in its context and the the larger this is a work of literature this is a best selling book. It's what 150,000 words are taking 150 words out of context and the context was like you said he's describing the mother of his children the love of his life in as this sort of Linda Hamilton Esque in Terminator type figure or. Charlize Theron in Mad Max. And this passage is not in there to describe all women. It's just basically a literary flourish to contrast the the this the woman that he loves being such a *** *** compared to every other woman. And and you know, when Kara Swisher interviewed a GM five years ago, she bought this passage, he explained it and she said, yeah, OK, I get it, so you know it. It's certainly the case that people can understand the context if they choose to, and they simply are not. Choosing to understand the context, which brings me to mistake #3, which is these 2000 employees lied in their petition by claiming that their safety is threatened by Apple hiring a GM. That is simply untrue. It's physically impossible in the era of zoom when everyone's working from home, but this guy is not a threat to anyone safety but they you. But they use that claim. They make that claim because they know that if you accuse someone of threatening your safety, it will trigger the machinery of. Which are to remove that person from the workplace. This is the language of safety ISM and it's a specific tactic to basically get somebody cancelled and removed from the workplace. OK, and then that leads to the the the next mistake, I think mistake #4, which is the bosses. As Apple caved into this pressure, they were total cowards. They never even gave a GM the chance to explain himself. They never asked him what did you intend by this passage, what were you trying to do? And by the way, they knew about this book when they hired. Even worse, they knew about the book they had vetted and they talked to many people as when it when a big tech company hires somebody for a major position like this, they call all the references and all of this is uncovered and dealt with. Of course they knew about it. And then when the mob complaints, they fire him summarily without subjecting the decision to proper HR processes. This is HR by MOB rule. It's totally unacceptable. No company should be run this way. And then finally that brings us #5 is that in explaining their decision and trying to justify. Their cowardice and giving it to the mob. They said that they fired him because of his behavior. AGM never had a chance to engage in any behavior. He had barely started at the job. This wasn't because of his behavior, this is because of the book that he wrote five years ago. So what they're saying is that if you ever publish a written work at any time in your life years and years ago, that that could somehow constitute present day behavior and that other people in the workplace can have a problem with that. Be that this is not behavior and This is why he's going to have a giant. Defamation suit and settlement because they are making him unemployable in the tech industry by claiming that he was fired for some some sexist behavior he was not. What do you think he'll get paid in a settlement? I put it at 10. 10 million, well, I was just thinking he's a half, $1,000,000 a year employee to a million with his RSU. So let's just put it out, a million unemployed for 10 to 20 years because of this or the damages to his reputation and present value of that back. Yeah, so and so I think 10 million is the number. My curiosity in this was just did those 2000 employees feel the same way about Doctor Dre? Did they? Do they feel the same way about some of the movies that they sell in the iTunes store, or do they feel the same way about some of the games that they enable? Store or some of the subscriptions that are sold. Right. Do they care? Do they care that much about what's happening in their Chinese supply chain? I mean, I think it seems, at least on the outside, the answer is no. But it would be interesting to get an explanation of that from the same HR people. I don't know whether the guy should have been fired or not, but I do think that you should have a predictable standard and every company is allowed to do what they want. If the standard at Apple is that we are going to hold you accountable for everything you've done in the past, irrespective of whether you've disavowed it or not. So be it. That's their right. And I think that the employees of that company have a right to do that I think is that if you start to arbitrarily enforce it, you go down this weird place, which is like basically I think what they're saying is if it's good for business, we're going to ignore it. If it's not obvious that it's good for business, we'll act because it's a low cost way of keeping the masses, you know that the medicated and I think that's what's even scarier to the 2000 people. It's not that, you know. Maybe they should feel proud that they got their pound of flesh, but they really should figure out how they want to stand on all these other points. Because to cherry pick puts puts the whole company in just a weird posture that's that's not scalable freeberg. I'm less interested in the hypocrisy and the values debate, which is obvious. That's kind of the 1st order point with all this stuff. It's like, do the employees have the right values? Is their hypocrisy by management? Is their hypocrisy by the employees? What what strikes me, though, is a failure of leadership at these organizations. You know, you guys think back to Brian Armstrong's kind of purging of the woke mob and the political discourse that was happening at Coinbase a few months ago. He took a point of strong leadership to a new level. And I think it highlighted when the leader steps up and says, this is how we're going to operate, these are how we're going to make decisions and puts his foot down, people will leave and you evolve the culture. And I think it indicates to me that certain companies. As they've gotten really big and really successful, like Apple and even Alphabet and various other kind of large tech companies, the leader is no longer lead the employees lead the narrative on culture and the narrative on values. And you know, it speaks to two things. One is that they're perhaps aren't founder leaders running those organizations anymore, that there are managers whose job is critically important, whose job is to keep the wheels on and keep the wheels from falling off. They have more to lose and they are constantly trying to protect the downside than they are trying to be aggressive about growing to the upside. And then I think it's just, you know, secondly, this kind of, you know, failure to kind of define what your values are from a leadership perspective. And the void gets filled by the employees, the void gets filled by the mob. And so while it's this one kind of, you know, debatable point today and this one kind of hypocritical point today, it's really interesting to see that. This isn't happening at other companies that are found or LED and if it is the, you know, the culture gets results would have handled this completely different. Steve Jobs would not have let his employees tell him who or should have stopped. Let's have a discussion about really clear point of view about who we hire, why we hire them and how we make decisions and not let the Democrat democratic kind of rule or the, you know, employee rule. It's not like all employees took a vote. How much of this chamath has to do with the coddling of Silicon Valley employees for two decades? These are very, you know, you get driven to school on your school bus, you sit on, you know, you get your lunch prepared for you. We do your dry cleaning every Friday. You get to come and ask challenging questions to the leaders. And this concept of like, you know, everybody has a voice at work as opposed to this is a company controlled by shareholders and or a founder and you work for it. And there is a trade of services here, Visa V what Toby had to say at Shopify, which is this is not a family, this is a sports team. You are here. To perform, we are here to perform for our customers the end. So the in fact if you if you had a chance and maybe Nick, we can post it in the show notes, but the e-mail that Toby Luke wrote to Shopify employees was unbelievable. That to me is like that's a Tour de force that should be basically like that should be minted and sold as an FTP. You know it. We forgot about those and it was it was it was just an incredible e-mail, Jason, to your point. And the way that that started. If I I I may be getting these facts wrong, but there was an emoji of a noose. Inside of a slack channel. And then and then folks got quite upset with it. And so I think Toby's response was to basically shut down the whole channel and say, hey guys? You know we're losing the script about why we're here. And, you know, I think Brian Armstrong's essay was a version of that. The question is, why are we here? If I had to guess, I think it's because we've pumped so much money into Silicon Valley companies they didn't know where to spend it. And so I actually think that what we've really done is over hired far too many people into many of these companies. And so they kind of are very smart people sitting around twiddling their thumbs. And so obviously they're just going to get distracted, meaning I remember like, you know. At Facebook, there was barely enough people to keep the lights on for a while. Then I remember by the time I was leaving, I was like, wow, there's way too many people here. A lot of them, and most of them are all really, really smart. But it wasn't obvious to me what many of them did. And, you know, people would look at me and then say, oh, you know, that's a really arrogant thing to say, and that's not true. And everybody's valuable. I don't know, you know, if you look at Google. I've always thought like that company could probably run by 2000 people, but you know, there's 200,000 people, so the 198 other thousand of them need to find something to do. It's probably the same at Apple, it's probably the same at all these big tech companies. And that's the leverage that you get from technology. It's naturally massively deflationary. So but if you keep pumping billions and billions and billions of dollars into these companies where the app experience is written by 50 or 100 critical people or managed by 500 or 1000. Critical people. This is the natural byproduct, I think, which of all of that, by the way, Freeberg said, organizations want to grow, right? Like, how many organizations say, you know, we should be smaller? We don't need this many people. You know, you're saying something really important. Not enough. Founders and boards understand the difference between growing a business and growing an org. Those are two totally different things. And the reason is because we've lost sight of very simple financial metrics in Silicon Valley, meaning if you go to any other industry where there is a cost of capital. People understand what return on invested capital means. They know how to measure it. Yeah. They know what operating leverage means. They know what margin expansion means. We we only have valuation and they seek that out here. We think about exactly, as you said, valuation. And so this idea that having 100 people do the work and see margins lift is antithetical to the Silicon Valley culture. It's, oh, as margins go up, let's just keep running the same profitable business, but instead have a 500 people, 1000 people. Do you think you're an operations machine, people would say. Wanna CEO basis? You're one of the top three to five in the history of the valley. What do you say, Co men? Yeah, I mean, look, chamath is right that in a company that's well run and well led, where people people don't have time on their hands to engage in these shenanigans. So, yeah, I mean, I think I think that's absolutely right. I think companies in startups are increasingly have to choose whether they want to be Apple or whether they want to be. Coinbase or Shopify for that matter. And just this this week at Apple, there's a new petition circling. Now there's a petition called by thousands of employees calling for Tim Cook to denounce the Israelis and endorse the Palestinian side of the conflict. Well, does he have a position on abortion? Is there an abortion position at. Well, yeah. But but now that they've given in to the the woke mob, there's no reason for the mob to stop. They're gonna be circulating a petition every week, and that's kind of the point is. So and actually AGM himself had a really good quote about this. He did a great interview with Matt Taibbi and he, he laid out the choice that companies face like this. He said it's interjected, this is Antonio Garcia Martinez saying is interjecting the whole ******* Twitter cesspool with all the dog. Wells and all the performances, signalling and all that crap into a corporate setting and replicating those dynamics and calling it work. That's basically what happened is what's happening is you you're there. These employees are performing Twitter at work and they're on Slack and they're pretending like it's really work and it's not. And I think, you know, founders are going to have to make a decision. Do you stand up and take a a Brian Armstrong life position or a Toby position, or do you eventually degenerate? Into some sort of or a base camp by the way or even base camp, the most woke virtual signaling founders on Twitter decided to take. That's right, the most libertarian or Spartan approach. You know stoic approach of Toby to give you Toby's quote, but well base camp, just to finish the base camp thought so. So base camp try to accommodate this sort of like woke mentality and what they found is that they got pushed so far, it became so distracting they eventually had to move to the Armstrong. Position. And that's kind of my point is once you get, everybody's gonna move to that. Yeah, that's my point. I mean, and if you don't believe what I what I said was like, listen, if you believe that a organization that allows political speech and this kind of stuff as a primary function inside the company will then go build a competitor to Basecamp and show that that system works better. Here's Toby's quote to help you make this more clear to team members, here are some pointers about what Shopify is not Shopify like any for profit. Company is not a family. The very idea is preposterous. You are born into a family. You never choose it, and they can't unfairly you. It should be massively obvious that Shopify is not a family, but I see people, even leaders, casually use the term like shoppie fam, which will cause the members of our teams, especially junior ones that have never worked anywhere else, to get the wrong impression. The dangers of family thinking in quotes are that it becomes incredibly hard to let poor performers go. Shopify is a team italicized, not a family. We literally only want the best people in the world. The reason why you join Shopify is because I hope all other people you met during the interview process were really smart, caring and committed. This is magic and it creates a virtuous magnetism on talented people because very few people in the world have this in themselves. People who don't should not be part of this team. I mean when I was, when I was a face strong, when I was a Facebook, we used to convene the senior team and you know, I was like, I want, I, I really want to fire the bottom 5 or 10% of the company for you. And we would force stack rank and we did it for about three or four years and then the excuse was it's too big and there are too many people and the roles are too diverse and you can't rank. I actually don't believe that, even to this day. I think it's pretty obvious who the real thousand X kind of employee contributors are. And by the way, they exist in every function. There are thousand X salespeople, there's thousand X, you know, product managers, there's there's the thousand X people that work in facilities. They exist in every job function, and companies I don't think do a good enough job of figuring out who they are. And so instead, what happens is people that are not even 100X or not even a 10X are really more like a one or one point 1X can basically hide in all of that. Noise, and I think that if you could separate HR into two things, but there's really three things. One is like benefits, which is critical. The second is actually like safety and the ability to whistle blow if there's something really nefarious or bad that's happened. And then the third that's really valuable I think is organizational design, right. How do you put people in good jobs and how do you allow them to have a huge amount of autonomy to run and build a career? But all of this other policing stuff to me just seems like it coddles to the lowest 25%. I don't know if and this is my intuition to the lowest 25% performers of every course, of course it does. And just to close this story up and wrap to our next and tone, a GM announced that he is going to take a year wait for it. Right, for sub stack, so he is gonna get paid $10 million. I I would guesstimate in a settlement by Apple he's going to get a half $1,000,000 advance over. I'll take you over. Get on this. I set such a good line. We get on. Yeah, we can bet on it. I'll take the over the line at 10. Anybody want the under? I'll take, you'll take the. Go, go. Give it. Give a different bed now. Then I'll figure out what you want and you can set different line. Set a different line. I think that's a good line. Because you gotta think like if they offer him 7 or 8,000,000. And it's gonna be something like that. I don't know what the big, what the number is, but we'll never know. I'll, I'll, I'll make a line 15.16 under. I'll take the under. Wow, take the under. Yeah, 15 is way too David. Way too that Dave is quiet. So I'd say under 15. Yeah. That's not a good line. 11.5 is a good line. OK, let me do the 11.5. What do you take tomorrow? Could afford the book against all three of us. 11.5 Tremont takes the over 11.5 free bricks. Yeah, I don't know. Under. Can I just tell you why? If you look at the last four year compounding of Apple stock, right. And so if you think about reasonable number of grants as his level of seniority plus the imputed compounding plus whatever he would have, you should be part of his team. Somebody said in this clip, because that's the argument is I I do think you end up getting. They probably, yeah. And then you got to include the information out. Yeah, you get a buy it now price at 15 in college. And they've also also, you could make the argument they've rendered him unemployable in the industry. So he needs foregone income for the future. Then it could be 20. Some mental suffering. What about suffering? He is going to suffer. He's going to need to be on meds. My client is suffering. He's in therapy twice a week, he can't get out of bed, he's not going to be able to be in functional relationships and he's too scared to leave the house. He should wait on the sub stack. Is going to make so much money on sub stack it's going to mitigate his damages. Yeah, don't take the Subtact deal. Don't wait. Just wait on the. I'll give you another step. Do you guys know what Apple's market cap divided by employees is? Apple is Apple's market 7,000,000 in employee? Anyone else? Wait a second. 100,000 employees and it's worth 2 trillion. OK. There's 150,000 employees 2.1 trillion. So it's 14 million in employee. So the other way to think about it is if apples like going to lose one or two good employees over this, you know, they they they happily pay up to get to get the guy to be quiet. So it's worth one employee to pay $14 million. No, I mean, well you're, you're you're not dividing by all the slave labor in China. And I'll recall they cost, they actually cost 0, so. That was bad, sorry. Yeah, I mean, it's dark, but it's true. I mean, this is the hypocrisy of Apple. They've literally got slave labor in their supply chain, not that they wanted in their supply chains, but those employees, how do you know employees? How do you know that? Let's just go through this because like, this is a common narrative, but has anyone actually like gotten to the bottom of, well, that's why I said reported. I mean, yeah, it is, it is known again, like, I don't know, neighbors are pushing, I don't like pushing narratives that are actually I tweeted something that, well, I retweeted something that came from. I think it. Pretty valid source that author from The Atlantic who I think is pretty legit. Also, I just think just in terms of his quote, if he had taken the word woman out of the quote. Most people in the Bay Area are soft and weak and the zombie apocalypse. I don't think you're recruiting from the Bay Area, but related to this story in terms of Chamath's point about. You know, 1000X performers America is really doing a bad job at math. And Gary Tan, the venture capitalist, retweeted and and participated in a tweet thread about immigrants who know that standardized test is probably your best shot at getting somewhere your money social status can take you. The rules are well standardized, and he tells his story about this. But there is a persuasion article about us failing math and that they're going to be in California. Getting rid of the gifted programs for math because it's unfair to the kids who are not gifted as a kid who is was not gifted and to the three kids on the program who weren't gifted programs or at least two of you were. I have no problem with her being a gifted program, but any thoughts on this? I think it's shameful. And like we are, we are really doing our level best to just completely **** our population. Why? I mean, why is this even? How could this even be possible? It's like, like just is like, it's it's kind of like the equivalent, it's the moral equivalent of actually saying, you know what, we're going to eliminate welfare for the bottom four 5%. Like our job as a society is to kind of like find. The broadest set of solutions for the most number of people, and solve for both extremes. So when you're dealing with education, you both need to understand that there are folks that need some kind of structural support. Look, when I came to Canada, I had ESL, right? English as a second language. You take that so that you can learn the native language of a country. It didn't mean that I was stupid. It just meant that I was behind. You know, if I had dyslexia or something else, I would need some kind of support. One of my children had a speech impediment. We had a speech therapist. This is what you do. But on the other side, if you have a kid who's an incredibly high performer who has the potential to just completely crush. Hey, like you should be able to give that kid a pathway to achieve and give back. So the idea that you would eliminate anything at the extremes is kind of completely uncompassionate and stupid. Just totally ******* stupid. Well, it's in the name of having a more equitable math class. Again, I hate that word. Please do that to trigger you. Please don't use that word. That is let. That is the least. I mean, this goes back to the point I made a few episodes ago that, you know, you can have progress or you can have a quality, but it's very difficult to have both. And you know, if you want to try and make everyone equal and give no one the opportunity to have more or get more than anyone else because of whatever the circumstance may be, whether it's earned no or whether it's right, no. But this is my point. Like, you know, you limit the ability for everyone to to progress as a group because we're now limiting the ability for folks to take calculus. I know equality. Look, I'll use a video game example. Equality means we all get to play Grand Theft Auto. Not that we have a somebody who actually plays for us and gets to the same answer and just gives you a ticket. So we don't get the same score on don't get the same score, yeah. So, so the. So the. That's that is what equality means is that we all get to play and we all get a chance versus equity, which is leveling everyone's equity is leveling everybody and saying here's your result. And by the way, it's the same as this other person, whatever the number is. But the notion of levelling everyone where no one can be ahead of anyone else by too far, obviously limits as a group our ability for the top decile to to increment or the top quartile to increment. Again, use yeah, let's again use our friends because instead of ours. But you know, we know a lot of really smart people who have really, really smart kids. We also know people in general that are in tough circumstances who also probably have really smart kids. Just purely selfishly for me, I want those kids doing the best they can to figure out what the hell they can invent for us in the future. Why would you slow those kids down? You know, it's kind of like saying, you know what? Like, how about a black athlete? Would you, would it be preposterous to say, you know what? You don't have a right to go to the NBA and make money for your family? I'm going to slow you down because there's another white kid that's going to go through four years of college. So you know what? You're going to have to go through four years of college and you're gonna have to pay for it. Well, actually, what I would propose is, is when I go up to dunk that we just the rim automatically lowers 2 feet. Yeah. Yeah. So I can dunk. And then when you go for a layup, we'll just raise it 6 inches. It's more equitable for me. That's more equitable. Yeah, it's more accurate. Let me, let me, let me add another layer to this. So I, I agree with you, with you guys that what we should be thinking about is opportunity. We should always be asking what increases opportunity for the most people. And that's how we should measure political programs. And we're not doing that here. We are sort of leveling down. But I would say it's even more nefarious than that, which is I think what's happening is that the education establishment is completely failing our kids and our schools and what they're trying to do is destroy the evidence of that. Failure. And and so they're hiding, they're hiding the results. Now, this persuasion piece. Yes, this persuasion piece lays out the statistics, which are pretty grim. OK, so according to these, like, global measurements by OCD, OK. Math proficiency in the US, we rank 37 in the world. OK. And there's only 37 developed nations in the world, according to the developer. So we're last among developed countries. China, which is our main global competitor, is number one. OK. And we achieved these horrible results despite ranking fifth in the world in per pupil spending. So it's not a spending problem, OK? And as we know the extent we do have high performing math students in the US, a huge majority of them are actually foreign born. And so we're actually kind of cheating our our numbers a little bit. It's even worse than it appears now. What is the education establishment doing about this? How are they hiding the failure? Well, when school comes back in the fall, they're planning to eliminate accelerated math. OK, that means that there's no more algebra for 8th graders who are ready to take it on. There's no more calculus for high schoolers who want to, you know, do like the AP. Losses and get a jump on STEM. You know, for college, the entire idea of gifted students is now under attack, like we talked about in the name of equity. It's become a catch all for every bad idea. And the University of California system has now abandoned the SAT and ACT, so they temporarily got rid of those requirements during the pandemic, but now they've used. Crisis. And now they say they're not bringing back their requirements until at least 2025, and you can bet it's never going to return at all. And so here's the thing, they're trying to get rid of measuring how bad we are at mass so we won't have to think about it. They just want to give everyone a Gold Star and a pat on the back and just say how you know. This reminds me of sacks is when you threw away the the digital scale. I got you. Right. Yeah, I'm not. I'm not fat because I'm not measuring it. Great. I'm soft. Perfect. Oh my God, it's like we really. It's it's the movie Idiocracy. It literally, literally we are doing the movie idiot. Have you guys seen Idiocracy? Why don't we just. Why don't we just eliminate all admissions programs at every university and just have one global admissions board where every campus is the same? What is the difference between MIT and Stanford and Caltech and the University of Arkansas? In my opinion, there shouldn't be. It's more equitable to just have somebody go close to home because you can save money. You know carbon emissions are lower, right? You can just take the bus to the local school. Petition is 1 centralized place teach you why have anybody in basic course? I mean, if I said this you you think that I was a crazy person? Except that's basically what we're now telling all of our high schools. So getting rid of Michelin stars and I'd like Yelp to take off their review system because it's not equitable. Like we should not have Michelin stars anymore. Every should restaurants the same. Every restaurant you get 3/4 of a star. We should not, the health department should not give ranks of letters and they should. Not be forced to post it because that's inequitable. Absolutely. You know, yeah. Also, you can game. You can game the health test. You could literally just follow the rules. Let me just ask the the counterpoint question, which is? Standardized testing for example, benefits people that can afford tutors and special you know, classes to get ahead and therefore tutors therefore well therefore it's higher income people that can always. The point is they can always layer on additional tutoring, they can always layer on additional classes and they're therefore they can finance number of math. It's a finite score Friedberg, you can only get 800 on the math SAT. I'll, I'll, I'll be somewhat flip floppy here. I don't believe in standardized tests that much. I never did. Well, particularly in standardized tests, I do think that they can be gained, but that's different from what we're talking about. What we're saying is if kids show aptitude, we are explicitly choosing to not give them a chance to develop at their potential. And the problem is, we do this in other areas. We do it in athletics, we do it in music, we do it in the arts. But we're not going to do it in stem. That's what we're choosing to do. That is what's crazy. So choose to get rid of the SAT or ACT whatever you want. I don't care. But if you are the LeBron James of Physics, Jesus Christ, like, let that kid become the LeBron James official you like. I I am. I got into UC Berkeley because I had great standardized test scores, because I had. An aptitude for SAT freeberg. Let's do this. I got a let's do this an 800 math and I think it was a 720 verbal. OK, so you got a 1520 out of 1600. At the time I got an 11, I was eleven 6800 on the math. I was just obviously sad. I was 750 math, 720 verbal. 1470, are you writing this down this Jeffrey, this is pre the inflation. There was a big that's it. I was, I was a I was 1510 on the SAT. Ohh we were OK. So I woke up 400 points, 500 points behind each of you in Canada. It was just kind of like we didn't even write it, but I went and I wrote it just for ***** and giggles and I didn't do. You said you were good at standardized test. So what are you talking about? You're in the top 3%. Yeah, yeah, I know. But generally, like I was in a good test taker, I was in probation and college, academic probation. I'm not a good testing. But look, the, the, the reason why these tests got invented was actually to prevent discrimination. I think it was back in like the 50s, you know, I think it was like and at that time it was Jews being kept out of the Ivy League. And one of the ways that they corrected for that was they made everyone take the same test as you could see the scores and it would shine some light on, you know? Making sure that people didn't just get in because they were legacies that they got in because, you know, they they had, they had good, good scores and there's been decades of work since then to try and eliminate bias in the test. And so the, the, the, the claims of bias now and the tests really aren't supported now to, to freeburg's point, obviously that if you take some rich kid who lives in the suburbs who gets a 1400 and you compare that to a kid in the inner city who doesn't have, who grew up poor. Doesn't have the advantages. And that kid gets a 1300. Well, which score is better? Probably the 1300. And so you can take that into account, in my view, in the admissions process. But eliminating the scores altogether, why would you want to have less information to make a decision? There's no reason not to get rid of these. I would just think more holistically about how you accept students. And I mean, is it more competition and having better teachers, what we should be focusing on here as opposed to even standardized testing or, God forbid, cancelling? Programs, let's just invest in more competition for schools. Well, so in Canada we had this thing where when when I was graduating, we had specific, different kinds of math contests and computer science contests and other things that you could write, the Putnam, et cetera. And those things were actually really instructive because they were purely verticalized things that could test your aptitude. And the school that I went to, University of Waterloo, would look at a lot of those things and adjust for it because my grades were decent. But my some of those one, this one specific math test I took was pretty good. I remember. And then they would adjust it exactly as David said to what is this kid's background and his circumstances and they called it a French factor. They would just adjust my Marks and that's how I got into Waterloo and I didn't think I was going to. So there's all kinds of ways where you can be smart about it. But again, we're talking about guys. Don't lose sight of what you're saying. We are actually going to cut all these kids off at the knees starting in grade 8. So forget about all of this stuff by the time that these kids. Graduate. They're going to be I. Honestly, they're going to be like, really dumb. This really has the problem. The problem ultimately isn't just measurement, it's the denial of opportunity to learn. It's about it's about getting rid of the learning and the classes. That's the biggest problem. You have to move to a state with the gifted program. Now, if your kid is really smart, you have to give out of public education, which doesn't help anybody. I mean, literally. Schools don't have to teach. We we put it. We've now designed a system to summarize. Schools don't have to compete for students. Teachers don't have to compete. For jobs or for their employment? And now we're saying students don't have to compete. So if you remove competition from the human condition, you're just not going to have any performance there. There's going to be no progress. And as a species, we need progress. We need to solve global warming, we need to solve a lot of issues and don't we want to live longer and better lives? Like, where is the optimistic nature of the human species? Competition is at the core of excellence. And to just take it out of everything, the whole stack out. That's the smartest thing you've ever said. Way smarter than 11/20 SAT score. Thank you. Thank you. I bet you. Sure it's only 1120. How lame is it that we're still talking about our SAT scores? Like 30 years. There was the average. So Brooklyn when you're 320 points above average, David. So it's a BFD. What's lame is the four of us all remember down to the number what our score is. That's what's 11201150. I gotta, I gotta look it up. All right. Uh, do we want to go to the crypto meltdown or talk about inflation or do we should we dovetail those together or just want to go straight to UFOs? Well, Brian Biden, just they they just a press release just hit the wire and they just cut the infrastructure bill from 2.3 trillion to 1.7 trillion. So we're doing our job here at the end podcast and I, I, I had heard from somebody that there just is not the broad based support for the capital gains tax. So that's not going to happen. And it looks like the corporate tax will probably go to 25%, not even up to 28%. And interestingly, I didn't realize this, but one of the biggest features of the bill that has the most popularity is that they're closing this loophole around IP that sits outside the United States and that more than the corporate taxes will raise almost a trillion dollars of revenue. I agree with that one. Why should you put your why is Apple? I mean, you wanna talk about hypocrisy, putting their IP and Ireland so they don't pay taxes and metal company same. It was everybody doing there. How does that exist? It's so unamerican. Well, it's a subsidiary that has different taxation on it than, you know, to kind of. That capital and that and that earnings, it sits outside the US that IP was made in California. It was not made in Dublin. No offense to you know my home country. I remember Facebook, we did that, we did this exact thing. We signed over all the IP and then the IRS sued Facebook and I remember like I was called either to I was subpoenaed and we went through like a whole multi year trial. It may still be going on and it was around this issue which was the IRS said hey Facebook, how come you you know? You poured at this over there, and I think Facebook's answer was, yeah, we paid the tax, and I think they did. They don't think they did anything wrong because the laws allowed it, but it effectively helped shield then 10s of billions of dollars of future taxes. I mean, I remember reading about this and I'm like, how does this pass the sniff test? Well, it's where the revenue is recognized jakal. So you basically can produce the IP here and then transfer it to your subsidiary. When you transfer it to your subsidiary, you can recognize the earnings in that subsidiary and that subsidiary pays taxes. It's local jurisdiction. The I think the issue Facebook had was that they transferred the IP and they undervalued what the future value would be from that IP transfer and that's why the IRS sued them. Is this accounting snafu in terms of like what do you value it out at the moment you transferred it? Here's another idea. Why doesn't why don't they look at as part of this IP licensing, where does the consumption of that IP occur and where do the employees who maintain that IP live? JL. It's a very smart The other problem is that's the slippery slope that then gets to local taxation. You know, The thing is, we have all these global tax treaties where these large corporate entities can basically play this game and they're not subject to local tax. But that's the thing that's going to really start the undoing of the big monopolies. Because if you start to abandon these global tax treaties and you're starting to see it, France is trying to do some stuff, the UK is trying to do some stuff. States individually in the United States are trying to sue these companies or tax them more. That's the, that's the 1st way to chip away at these monopolies is to basically say, **** your global tax treaty, you need to pay X amount of dollars to be here. And it already exists because of these, you know, really sorry, the retail tax Nexus and how ecommerce companies have to pay local tax in the areas. But once it's sort of touches a whole bunch of other industries and countries, I think that you're going to have that. That's why I think Yellen, Janet Yellen yesterday said that, you know, she's in support of. Trying to have a global minimum tax of 12%. Basically trying to get to the end state and tell every country, let's all circle the wagons and agree that we'll all just charge everybody 12% and then we won't go all our separate ways. The the problem is that if you have a lot of usage in a country, you know that country doesn't care what the taxation is in Zimbabwe, right? Or Canada. They're like if I'm the UK or France, I'm like, I look at the top 20 apps in my country and I'm like, wait a minute, these guys would be paying me $50 billion a year in tax. It's hard to get away from the incentive to to not want to taxes. Companies right now, Sachs. And that's yeah, I don't have a huge thought in the the IP issue if it seems like I know there that the Republican proposal on the infrastructure was 6 to 800 billion. Biden's proposal initially was 2.3 chamath is right, now they're down to 1.7. I think that the markets have been choking on the size of all of this tax and spend and the there's been all these reports of inflation spiking and so the growth stocks have just been hammered because we're all expecting. The interest rate increases to control this future inflation. So vines been horrible for growth stocks so far. And it really, I guess that what it shows is that you know what our growth stocks, growth stocks are a future investment and it shows the way that the government can crowd out. When you have excess government spending, I guess you can call it an investment if you want, but when you have excess government spending, it starts to crowd out private investment because it raises interest rates and that. You know, decreases the the value of growth stocks and there's less money that flows into that. Yeah, it does seem like the market reaction to the infrastructure bill and to inflation has made Biden reconsider his approach. And maybe he just came out too hot is that I don't think Biden's reconsidering. I think it's people like Joe Manchin. Remember, it's a foreigner. Mark Warner, Christian cinema, the the moderate. There's a 3 or 4 moderate Democrats in the Senate who I think are receiving the message. Mammoth put it really well. The last pod that the markets are sending a message. The Washington I think some of those centrist Democrats read the message. I don't think Biden's aware of it. I don't know what he's aware of. He doesn't seem too aware of anything to me. But I think the moderate Democrats are getting the message and they're telling they're telling the White House the package is too big and they they're and I think that's why it's coming down. The other thing that I think people may be getting their heads around, here's what's changed since last week. There's a growing body, if I had to say, like, you know, the beautiful thing about the the markets is that it is an extremely elegant voting mechanism in the short term. Right. I mean, Buffett says it's it's a voting machine in the short term and a weighing machine in the long term. But if you look at sentiment and how things are voted on in the public markets in real time, it's incredibly illustrative. So there's a body of people now that are voting a very different scenario than inflation. What they're voting for now is this idea that by the fall. A lot of this short-term pent up demand will have worked its way through the system. And instead we'll be back to this realization that we've had for the last 20 years, which is, hey, wait a minute, people don't actually want to buy more of these physical goods. They're going to go back to consuming the way they did before. It's going to reflexively push towards technology companies again, and we're going to have this rebirth of growth. And you would say, well, how would you know that? That vote is likely. And this one incredible thing happened this last week, which I just want to throw out here. One thing that I look at is this thing. Or 10 year break evens, which is basically a thing that the Federal Reserve of Saint Louis publishes. And what it basically shows is like what people think collectively, trillions of dollars, what the 10 year break even interest rate is going to be. And it peaked last week at 2.54% and it's fallen 13 basis points just in the last week down to 241. And I don't know whether it's sustained or whatever, but there is a growing idea that the worst may be behind us and if you layer on top of this now. Biden pulling back right on stimulus because he can't get it done, pulling back on cap gains, pulling back on corporate taxation and a more measured policy of investment. We we could all be back. So we're basically taking the medicine and getting back to where we were. But we still have massive asset inflation that we're seeing in houses, cars and other things. While we may have just pulled forward demand, meaning, you know, people are like, OK, I'm flush with money. The savings rate in the United States has been, you know, going at an incredible clip. People may pull forward all that spending and say I was going to buy a car 18 months from now or I was going to buy a house two years from now, **** it. I'm going to do it now because prices are going up too fast. I don't want to miss out, but then they're out of the market now for the next many number of years. And this is what I'm saying. Where you see this short-term spike of demand and then things get back to normal. If that's what we see. Good times are back in growth stocks. All in podcast September levels go high again. I've, I've literally I did like two or three early stage deals recently and I had members of my syndicates say like how does this valuation make sense? And I said to them you know it, it actually doesn't make sense if you're looking at it with the traditional metrics. But all valuations are higher at all stages. So I'm going to selectively you know overpay compared to what we were paying a year or two ago. You know, if I really love a company, but I will sit out a lot of, I'm sitting out a lot of rounds right now that I just can't get my head around the valuation. So hopefully some. Well, there's always a trickle down. There's always a trickle down from growth stocks in the public markets to to venture, right, because the the last private investors like the big funds who do the Super late stage stuff, they're just doing an arbitrage on what they pay versus what the company is going to list for publicly. So when they see those valuations go down, they adjust and then it works its way all the way down the stack. So, you know, growth stocks have just been hammered and especially all the recent listings, the IPO's and specs and everything and and that's going to trickle its way down, I think to venture systematic, we have the. Yeah. And I think we have the lead indicator on that as clubhouse, right, which will be the Canary in the coal mine. I don't know how you guys reconcile plain explain what's going on with clubhouse just for those of us explain what it is. OK, so clubhouse is a casual audio space. You go into a room and you're immediately taken to a live conversation. With people speaking on stage and an audience, audience members can be promoted to the stage and start talking. And so you're wait, hold on. It's in an app and it's all audio. So there's an audio. There's an app. You go in and it's all audio. Yes, right. So it's like amateur night at a strip club. But for words or more comedy club or whatever, you just bring people on stage. Yeah, it's kind of like the champagne room, but a little different. So anyway. More from the pod Apple 2000 signatures from Apple to remove all in from the podcasting app yeah, we just lost three rags in the Apple Podcasting app. So what's very interesting about this app is that it had a massive number of downloads during the pandemic because people were home and people were not doing anything at night because they were sheltering in place. And they had in, you know, 2,000,000 downloads in January, 9.5 million in February of this year and then came crashing down 2.7 million in March and 922 in April. But at the same time their valuation over 18 months went from 100 million in their seed when they had like 3 or 4000. Users to a billion to 4 billion in the last round of financing for our company with zero revenue and let's call it a couple of million people using the app. And what's really interesting is the same venture firm led all three rounds, Allah sequoias, investment in WhatsApp where they did all the private funding. She have no outside capital marketing this valuation, a $4 billion valuation, $4 billion. Well, they got a, they got an acquisition offer from Twitter for 4 billion and they they turned, they did. Were confirmed. I've heard it was real. So, so but so basically the reason why the four billion private round happened was so they would keep going as independent company. They could basically take some chips off the table through secondary and kind of go for the bigger outcome. But yeah, they could have just sold to Twitter for 4 billion. So they may end up regretting that. But like is this really a function of a broader inflation valuation inflation or is this just a function of there was a company that was a social network? Hyper growth. And then it turns out that the product had no stickiness and the hyper growth went away. The souffle collapsed, the souffle collapsed. Can I, can I, can I just point out like and and forgive me if any any of you guys are investors in this company or anyone that's listening cares. But like if this thing came out before YouTube, people would say, you know, this is interesting, but it needs an asynchronous killer. It needs a thing where you can like record a conversation, post it online and people can come and watch it and listen to it when they want. It was always so crazy to me that you had. Be logged into the app to listen to what was going on and if you didn't, you missed the conversation and there was no way to like, go watch the recording of the conversation. Like, am I crazy to think that this was just like. You nailed it that they don't have async in there and actually I've got a little disclosure to make here, Ohio. What? What? The beat got wet, but it's. Story breaking news story. OK so I think I understand what clubhouse did wrong. Async is a huge part of it but rather than tell you exactly I'm going to show you because I've been incubating a new app what that we're we're we're on test flight right now and you guys after this pod. I can I can demo it for you and if you guys if you guys want to invest. I'm going to close around this week for it's getting wet and so if you guys want to watch evaluation what's the value. Are insiders all in? What's the Bestival? Yeah, what's the best? I'll talk to you offline. How much? How much money do you want to raise? We're raising 10 million bucks and we already have commitments and but I'm creating room for you guys. Yeah, it's 500K each. Sounds like 500K each. Where is it? A million about it offline, but but the apps on test flight I think will be ready to launch in a few weeks. Can I? Can I say one thing? Wait, what's it called? Can you tell us? Yeah, no, I'll say it. It's called call in, call in. I thought it was going to be called clubhouse. Does this have a called after all? Like are we going to do the podcast on it? We absolutely could do the podcast on it and it would be awesome. Nick would be out of a job, so I don't think he would like that too much quality level. I think it's good for Collins. If we wanted to do a call in show, it would be good for that. Yeah, would be great. It'd be great to do exactly. That's why it's called call in is because the ability for you to take callers is obviously a huge feature. But also like, we could host after parties for our fans to like, you know, chop up the latest episode and talk about it. These fans are getting crazy. Did you guys see that all in stats? Twitter handle? I don't know the Twitter handle off the top of my head, but somebody's these kids are doing. They're using machine learning or something to know what percentage of time we each speak on the pod and how many monologues, and they're doing all these statistics. It's crazy. That's really cool. I was going to say in defense of clubhouse for a second, I don't, I don't know the app per se, but I think, like why Andreessen did all of that, in my opinion, is because they're pressing a hot hand, which makes a ton of sense from their perspective. It's like, you know, I think that they're going for the kill shot because I think they're basically set up. They're basically set up to become Sequoia if if they really, I mean I think if you think about like which two firms are really crushing on all cylinders right now, obviously Sequoia has always been the perennial #1, but if you think about the the heater that andreesen it's on, it's incredible. And so from their perspective the $4 billion valuation is less important than what is their real capital at risk and that's probably 100 or 150 million which in the grand scheme of having 40 or $50 billion of AUM if you consider the value of all their public positions as well. That's a really reasonable risk to take. So I think if you're in that way, it's kind of like they're taking a shot to try to just, you know, go if it does become worth 10 billion or 50 billion. Also if it if it only gets sold for 500 million, they get their money out first. So what does it matter? What does it matter going for the $100 billion outcome? I mean, they've seen that Instagram sold too soon. They saw that snap, turned down a $3 billion offer from Facebook, and now it's worth 80 billion. So they're going for the $100 billion YouTube 1.6 billion, yeah. And now it's worth hundreds of billions. So. They're hoping it's going to be like that, but Jamal Jamath is right. Look, if they had taken what, say, 20% of a $4 billion outcome, 800 million, that doesn't even pay back their fund, right? But if it ends up being $100 billion outcome, they make 20 billion now, it's like a coin base for them. And what do you think they gave to the founders? Well, who keep them in the game? Because 4 billion they owned, 80%, yeah, they took out, they took chips off the table. But here's the thing, all those decisions were made before the recent collapse and engagement at Clubhouse. I'm not sure anybody would be paying 4 billion for it now given everything that's gone wrong. But you know, who knows? It's still pretty early. And just for people who are curious, there is a Twitter handle all in under score stats and yeah, it's all in I don't know, we're not affiliated with these maniacs. That Umm we we love the stands and we're going to do something in person in September. Congratulations to the stands for losing their minds. I think it's a pretty good way for them to capture a bunch of attention on the Twitter, all right? Crypto is getting absolutely hammered and I it's the Chinese have once again said. That they're basically Saber rattling about cryptocurrency, they're obviously gonna do their own. I think you, I think you have to talk about China in a in a slightly broader lens than just what's happening in crypto because like this is the same week where they basically, they've, they forced, you know, Zhang Yao Ming to resign from bike dance. I mean, you know, last week, last week it was or last month it was the CEO of Pinduoduo and these guys, they're going for the jugular. I mean it's like, what why are they taking out all their top CEO's? This would be like putting Elon and Jeff Bezos on the bench is that they just don't want any heroes. I don't know. I mean, I I guess maybe the speculative part in me would say they're showing them who's really in charge of these companies. I mean, it would be crazy, to your point, if the government of the United States forced Sundar Pichai and Tim Cook and Mark Zuckerberg and Elon Musk to resign. It's like, hey, sorry, I'm sorry. You need to leave right now and put somebody else in and debate their badges. We just relentlessly criticize them, right? But but yeah, we just demonize them. We just try to cancel them. But look, but they deserve that level of scrutiny because the amount of power they have. But but yeah, that we don't. We don't put them in jail or house arrest or drive them out of their companies. And that is a big advantage for the US economy. The Treasury Department here in the United States is doing a little Saber rattling. They want to know anytime there is a $10,000 transaction in any kind of digital token, and they're talking about CBDC to do their own cryptocurrency. So they're putting out a white paper for feedback this summer. And we are now seeing a pullback on Bitcoin from you know, mid 60s to, you know, now into the 3637 thousand per Bitcoin. Do you think this is the end of the beginning, beginning of the end? It's the beginning of the beginning. David Rubenstein was on CNBC today and David Rubenstein for those you guys don't know is was a cofounder of Carlyle Group. You know more blue chip and blue blooded you cannot get and very connected in Washington. And you know he said it best where he said, you know, effectively people want this and the government will have no choice except to support it because you can't take something like this with this much institutional and retail demand. OK, so we have to go to the place where now crypto needs to be like everything else. And maybe the crypto stands get upset with that because they don't like it. That, you know, a bunch of their parents are all of a sudden going to be buying tokens and stuff, but they got to get over it. Then this stuff should be, you know, transacted in the same way. You transact anything else. You buy it, you sell it, you get a tax return, you pay your taxes and you move on. This reminds me of the transition that we all went through with. I don't know if you remember Kazaa and Napster and BitTorrent. Like everybody, all the, we, a lot of our contemporaries in their 30s, you know, whatever 1020 years ago were like, you can't stop it, you can't stop it. And it got stopped, you know, like you made it illegal and you prosecuted people and then you came up with solutions that were regulated like Spotify or, you know, Netflix and you gave the consumers what they wanted. So David, do you think this is a similar path right now that we're going through, which is the crypto zealots and the and the and the stands are going to. Basically have to get used to as Tremont saying their parents buying it and and crypto not being this underground thing, but being regulated in in a major way in the United States and is that a good or bad thing? I I think the thing that that's happening quietly behind the scenes is that Major Wall Street players, institutions, endowments and so forth over the past year have decided that Bitcoin and crypto is a legitimate asset class and they've been allocating to it huge, huge pools of capital, balance sheet capital have been allocating into it. I don't think that's. Gonna change. This is probably a pretty good buying opportunity. We've seen these crashes and Bitcoin many, many times over the years. It plummets down and then it goes back up and it eventually goes back up, reaches a new peak. So this is probably a pretty good entry point for the next rally. We don't know when that's going to be, but the whole point of Bitcoin is that it's censorship resistant and China can do its best to try and stamp it out. But I don't think they'll be successful at that. You don't. You're so wrong about that. The most naive take, worst take you've ever had. How's China going to stop Bitcoin? How do they stop VPNs? They put people in jail. How do they stop religion? They put people in jail. They may make it incredibly hard for Chinese citizens to get ahold of Bitcoin. I agree with that. But they're not gonna be able to stop Bitcoin. They're not going to stop Bitcoin in the West, but they will stop it in China. They were 100%. And you know how many servers are in China? I mean, go talk to the people who were in Tiananmen Square about what miners will have to move out. The miners. Miners are done. And then. If it'll be an underground thing, like it would be like having a VPN, which is five years in jail for selling VPNs. What do you think about the IRS requirement that you have to report any Bitcoin transaction over $10,000? Do you think that that and and Americans can be prosecuted for not reporting? Right? So I don't know how much that's right, do it. So get over it. 20% of the transactions that might have been different. This is the Silk Road fallacy, that you know that the only legitimate use for crypto. Or was that 20%? I didn't say OK, fine, but so maybe that makes it that small fraction of illegitimate or illicit use cases. No sex. I think the point is that they're trying to chase down. It's not about illegal use cases, it's about not reporting a taxable gain on your Bitcoin before you use that money to buy something. So. But look, but that, but that's not that's not going to stop Bitcoin usage. You know, smart people who've been training Bitcoin, been paying taxes on it for years, that's not, I don't think that's really an issue. If you were in China and you have created your wealth in China or many, many other countries all over the world, and there were currency restrictions and controls and the government was asserting more and more power and we're putting business leaders under house arrest and and seeking to put them under their thumb. You'd be trying to convert as much of your net worth into Bitcoin as possible. So that all you have to do is if you ever had to flee the country, you wouldn't have to have dollars in your suitcase or gold bricks or diamonds. You'd simply have to have a password in your brain that you could access at any computer terminal when you got out of the country. And so that I think that sort of digital gold is a phenomenal use case of Bitcoin. And the more oppressive all these countries become, the more they increase the value of that use case. What do you think is the Black Swan event in crypto and Bitcoin in particular? Taxation in the United States. Taxation like you do on a cigarettes, that would be for me, the United States putting a tax on it that makes it less competitive with our our national coming cryptocurrency this CBDC that the United States will launch in the next two or three years. They're going to say if you want to use any of these other currencies, there is a 10% tax on them. We want you using ours, the legitimate one there. There's there's a very negative Black Swan that obviously has never occurred. But if anyone ever manages to counterfeit a Bitcoin, or this is the double spend problem, right? If you could ever, if you could ever double spend or or or figure out a way to create bitcoins or counterfeit them, whatever, that weren't in the blockchain. If the number of bitcoins ever grew beyond the 21 million that's just built into. The way that the whole thing works, if that ever happened, Bitcoin is instantly worthless. That would be the Black Swan on the negative side, I think. The Black Swan on the pot. If it didn't happen in the 1st 11 years, what do you think the light of it on a percentage basis? That it happens in the 20th? Exactly. It's too expensive now, and it's too it's too visible. Like the the way that it would have happened. It would have happened in the first two or three years. Well, the argument could be made the opposite, that now it's so valuable that it's worth investing to figure out your target. Yeah, yeah. And and and and and and rather than have it be about a diminishing probability, it could be an increasing. Probability over time, which is that the pathways to get there start to get resolved, whereas in the past you didn't have enough time to resolve those pathways. Speaking highly theoretical here, but like, certainly there's a lot to take into account that it's open source and that everybody can see it. So you would think that everybody would discover the vulnerability at the same time, right, in an open source project? Well, no, I think that I think the issue, practically speaking in this would be that you would see those resources getting organized, meaning you'd see silicon being bought. Volume by some centralized player, and then you'd have to see water and power come together as well. And this is where I think it's just not realistic where today that I think the horse has left the barn because if you try to basically capture enough hash rate to kind of like overpower this network. It's it's it's like the scene in Austin Powers where he's screaming in front of a steamroller, but the steamroller is moving at like 1 foot a minute, right? You see a comment. It's just like, you just see it coming. Well, would you have a Black Swan? Freedberg? You asked a lot of questions. So do you have one? I think about it a lot. I don't really. I mean, it's a Black Swan. It's because it's a Black Swan, so you don't really see it coming, but like. You know the thing about Bitcoin. Which has always given me pause. Is the fact that the only way it works is if everyone believes that more people are going to believe in it tomorrow than believe in it today? Well, that's the only way it appreciates. Yeah, but the for for a variety of reasons, it it's also the only way that it works because if it starts to depreciate, it becomes almost like this unwinding circumstance. And there are moments where it unwinds. But then people kind of say, well, you know what more people get on this. There's the Chinese argument, there's the Argentinian argument, there's all the reasons why people will try and store wealth in this system. And that becomes a rationale for continuing to bet on it. And my observation is so many people that are active in Bitcoin. Compare Bitcoin to the price of the dollar, which to me seems like it doesn't make sense relative to the intention of Bitcoin, which is to not be part of the monetary system that uses the dollar as kind of the de facto, you know, system of value. And so why have the comparison to the dollar as the objective for Bitcoin? Why is the objective not transactions, use cases, number of people that are active on the network, etcetera, etcetera, and nobody buying it is buying it as a substitute for dollars? Buying it as a lottery ticket. So, yeah, that's that. That's right. And so then it becomes this rationale that it's like it's an investment that you put money in in the form of dollars or your local currency with the intention that you will be able to get more of your local currency out at some point in the future. And the only way that works is if you expect someone else will buy it from you at a higher price in the future. Therefore, it's all about propagating the, you know, the marketing around the Bitcoin. Whereas if your objective was really about making this become a replacement currency system or replacement monetary system. You would ultimately care less about, you know, what's the dollar value per coin and you would care more about how many people are using it. You know how active. Let me build on that question on it. So sacks or chamath, if the CBDC and Americans currency you know, starts to move towards a Bitcoin blockchain like experience, what would America start to look like if 10 or 20% of your dollars instead of being held in a bank, were on a blockchain with an American, a government, a government backed? Blockchain doesn't accomplish anything. It's still that people are. It's centralized and not only is it centralized, but also it's still prone to to basement, right? And so look, human beings have used everything from gold coins to sea shells as money. We can make anything money that's easy to transact if we all agree on it. That's the sense in which Bitcoin is the bubble that becomes true if everyone believes it. It provided provided the number of bitcoins to 821,000,000 and that the technology. And forces the scarcity. The problem we have with the US dollar is the government can just print as many of them as they want. Yeah, you change the nominator problems. Yeah. And so I think there's a positive Black Swan as well for positive for Bitcoin. Which is. Stanley Druckenmiller thinks in the next 15 years, the US dollar will no longer be the world's reserve currency. Well, what's going to replace it? The positive Black Swan would be that Bitcoin becomes, if not the a world reserve currency, an unofficial world reserve currency. Why? Because people trust it. They trust the decentralization more than they trust any government, and that would that would be a. Is the United States and China? Are they going to let Bitcoin become the world's reserve currency? Well, it's not a choice that they have. You sure? So yeah. There's nothing they can do. What about the law and guns and jail and tax? I don't. I don't know what that means. There's there's nothing that they there. There was nothing that they could do to stop it before. There's nothing that they can do to stop it now. Well, you can't get the New York Times and China and you can't practice religion there. So they have a pretty easy system. They put you in jail. They want to stop Bitcoin. They could just put you in jail. How? By finding out that you have Bitcoin and just, well, because they have 100% view into the Internet there. They have how on? Because they have routers. That's how they capture all the Uighurs is they know their location because they have mobile phones and when they use signal or any other encrypted technology, they catch them. No, I don't. I don't think that's how it works, but that's how they catch all the dissidents. There they they have them and they also have apples. Entire data center is controlled by the Chinese government. There's no Ledger somewhere that says this specific wallet address equals David Sachs, and there's not going to be one anytime soon. And so you'll have these centralized wallet authorities that actually, you know, have a lot of account information. But the reality is the sophisticated actors, you know. Used tumblers. They they, they washed sort of like their their paths in a way where it's very difficult to figure out who these people are. Now, if you, if you don't, if you use a site that doesn't have KYC, that's always going to be the case. And you know, people with huge amounts of Bitcoin are sophisticated enough to know how to stay anonymous if they want to for everybody else who doesn't care. Because for them it's sort of an investment asset class and an, you know, a hedge, then they're not going to care either. And the point is when enough people own it. Governments aren't in a position to track record of them. Just waking up one day and pulling the plug on anything is 0. That's not what how people do things you have to have like centralized policy and support. And I don't see it one way or the other. Of all the things that China and the United States will face over the next 30 or 40 years, this is like 50th on the list. Sex. What do you think? In the closing thoughts, I mean, I think we've said it. So yeah, I mean, look, I think, I think if you're going to stay in a place like the United States, you need to comply with tax law. You're absolutely going to report your Bitcoin holdings if it's required. But if the reason you're buying Bitcoin is because you're fleeing a country or you're worried about fleeing a country, you're obviously not going to report it. And that's the, that's the advantage of it is that it's a portable money supply that, again, you can just, you don't have to carry anything with you, you just. Put a password in your brain wallet. Tell me about UFO's before we leave. I mean, Can you believe this thing? This is the craziest thing I I so there was a yeah. There's a 60 minutes episode that just happened. Deputy Assistant Secretary of Defense for intelligence literally said the crafts we're seeing are and then in quotes far beyond anything that we're capable of. There's nothing we could build that would be strong enough to endure the amount of force and acceleration. Imagine a technology that can do 700G forces flight 13 mph evade radar and. That's average, no obvious signs of propulsion, and yet can clearly defy the effects of Earth's gravity. That's precisely what we're seeing from the director of Advanced Aerospace Threat Identification Program. I mean, is this real? Like, how is what? What are we do? What? Our government says there are crafts that outstrip are arsenal by at least 100 years to 1000 years at the moment. And we're like, hmm what do you think Friedberg, you're the scientist here. There's a if you read the original treatment written by Arthur Clark for the movie 2001, a Space odyssey, which was written before the movie and then the book was written after the movie. He makes a really compelling point, and the point he makes is that when civilizations achieve a sophisticated enough level of technology, there's no longer a need to physically transport yourself from star to star and transport yourself around the universe. Think about this for a second. Take what we have from virtual reality today and Fast forward 200 years, and then take what we have in terms of, you know, the ability to print and create anything we want. On demand and Fast forward 2 or 300 years, those two conditions alone might give us the ability to ***** ** something to our brain. And literally, and remember, our brain is simply sensing what our body is given. And if you can control what your brain is sensing through some ******** device or whatever, you don't actually need to physically be in the place where that happens. So if we can remotely sense what's going on somewhere else in the universe or some other part of our planet, and we can remotely pick up those signals and view them or experience them. Just, you know, you don't need to physically be there. And then secondly, all this. Sorry, all this via ********. OK, yeah. And then secondly, I should have used it. I shouldn't use the term. And then secondly, if you could print it, you are able. Yeah. But think about if you guys ever watched the TV show Star Trek Next generation, which I would guess maybe one of the Replicator or the Replicator or the holodeck and you could walk right #3 on my list of Star Trek series. You, if you walk in and you could literally recreate the physical space that you want to be in to accomplish anything, the holiday. And then you could print anything. Why would you use all the energy and all of this work to transport physical matter from one part of the universe to the other when all matter is transmutable and the only thing that differentiates things is the photons coming off that matter, which is just to sense it. So if you can sense things remotely while you're physically here, why go through the trouble? Why go through the trouble? And so they are for the same reason that we go to Hawaii and not just watch a movie. No, because we don't have enough of the sensing capabilities to date to to truly recreate being in Hawaii, but imagine if we did. And and we are very much on the path to doing that. And in two 300 years we have the ability to physically recreate what it's like for our body to be in Hawaii in every form, smell, taste, color, everything about being there physically and our body experiences it. Why the hell would you fly to Hawaii? You could meet people, you could socialize. So in a world, in a world where that technology exists, which could by the way be neuralink, right, where you can you know, put these signals directly into the brain, etcetera, moving physical matter from one part of the universe to the other makes zero sense. All matter is transmutable you can convert. And add them to another using a technology locally so you wouldn't do that. And so that's the premise of 2001, is that you've got these local communication pods that just transmit information from different parts of the universe. You don't need to physically transport yourself. So that's the, that's the the macro kind of argument against this notion that UFO's or aliens or in a physical spacecraft visiting, it's so old school technology that it makes no sense. It's like saying, you know, Oh my gosh, all these people are coming over to the United States on horses from Europe, you know, like it. It's just like, why would they do that? Why would they use a horse? So, so I think that's the argument against UFOs being aliens and spacecraft. Now, is there a really cool technology that has this advanced capability and they're these crafts that are in our sky and someone has that technology? Maybe, but I'm not sure about this. General pieces, you blew my mind with that. So, sacks, you obviously don't care, so I just. I have no way for this to increase the IRR of my fund or to get me another home. People pop up on planet Earth. Why would I want to go? I just somehow feel like if they're really UFO's would be like an even bigger story. Like, we'd all know it, you know? It's not going to be some, like, weird fringe conspiracy thing. Here's the here's the thing. I do not care about emotions like humans. You why this is. I care about the emotions of others. Every single photograph that's been taken in the last year. Is absolutely recognizably better than the one taken 10 years ago. And every single photo or video of these aliens looks like it was shot in a on a camera from 1950 on film that was left in somebody's basement. Meanwhile, Pixar movies can recreate, literally, the ocean glimmering recording this on zoom. Why can't I get me a clear shot? There's not one clear shot of this. Show me the alien and 4K high def and then I'll believe it. Did you ever see SpaceX launch where it has a camera by the engine and we could see the engine? Like, why can't we get a shot of the. Until then, I will be traveling between my homes, living my best life. I am living my best life. Not in San Francisco. We will get chesa, Boudin recalled. I will tell you sex. I don't think you need to harp on the chessa point anymore because I don't hear anyone making the case on the other side anymore. Dustin Moskovitz. He. Dustin Moskovitz? Yes. What? From a yes. Yes. Nick, pull up the tweet. So you know, I don't. Sleep. Because look, there we fired him up. Here we go. We're gonna take off. So insert quarter here and now you have my range upgrade for the updation inserted. Run rate function now. No, look, we're we're taking all this heat from these stupid reporters. They're talking about our donations, you know, like asking what are we up to? Look, we're very public about what we're up to, but this has been several tweet from Dustin there. There have been these tech billionaires, Dustin Moskovitz, Reed Hastings, and Mike Krieger, and they've been donating money to to chase a boudin and Gascony. Know what's disappointing? Horrible. So I asked. I just said. Why you donating money? This insanity. And Dustin still defending it? I said I'm gonna mute you now because you know, you didn't wanna you didn't wanna Take Me Out. Wait, just in fairness, let me pull this up. Dustin's quote is I live in the city and I'm not going anywhere. Crime happens to me too. Trust me. We write extensively about why all of our grants here. You know, here's the thing. I think Dustin Reed Hastings and their spouses are very involved in criminal justice reform. And what we have to do is give somebody like Dustin. Reed Hastings, the benefit of the doubt here and say we understand your donations were meaningful to you and you wanted to maybe lower the incarceration of black people in jail for crimes that were not violent. And we agree. Let's parse this conversation into two because not giving them the benefit of the doubt, let me explain why. OK, so read. So this is a good example. This Reed Hastings thing is a good example. By the way, just today it was announced that he donated 3,000,000 to Gavin Newsom. In any event, so. You know, he keeps he look, he's on that side of the spectrum. By the way, there's a little back story there. I don't know if you guys remember when there was pressure on the Facebook board to kick Peter Thiel off, but back in 2016 it was reading from read. That was from Reed Hastings. OK, so the guy is very close minded. I think it's his wife is actually handling this well. He, he was the board member who pushed to get Peter off because he couldn't handle the fact that there might be another board member who had disagreed with him politically. So it's a very close minded point of view, but let's take, let's take this example of crime. In LA, OK. So we had this election where George Gascon, who was a failure as a DA in San Francisco, he goes down to LA and runs against the the veteran DA down there, Jackie Lacey, who happens to be a black woman, a veteran, seasoned DA, competent. Nobody had a problem with her. I think she's a Democrat. OK. It's not like this is a right wing person. And so George Gascon basically fails his way out of San Francisco, goes down to LA and he basically. Dislodges her from that seat with $15 million, an unprecedented amount spent. And election, where did that money come from? 5,000,000 came from source. 5,000,000 came from Reed Hastings. 5,000,000 came from BLM. Now, you know in any other context the idea that you're going to fire a talented, competent, seasoned veteran black woman and replace her with an incompetent white male? That would be seen as institutional racism. But nobody complained about it at all. But it's outrageous. And what is there? What is the most charitable? What's behind that? What is the most charitable view of why they're supporting Gasconne and Chesapeake? Well, there there's this decarceration list agenda. And so, yes, you're you're right that they see mass incarceration as a problem, but the problems it is. But the solution is not mass decarceration that we need something in between and the problem with gasconne. And chase aboudi, they just want to let everybody out. They don't wanna put me on so don't wanna add anybody. So I think if their agenda is to lower the number adding people as against that there are people who need to go to jail. Murderers need to go to jail. People dying every day in San Francisco by at the hands of repeat offenders who chased a boudin has made the decision to let them out of jail even though they should be in jail. These are dangerous violent felons. The problem with this is I think chamath, I would like to get your feedback. When it is, you know you. When a person gives these kind of donations and they make it their public persona and it doesn't go well, how does one? You know, I don't know, disentangle or reconcile. They made a bet that had a bad outcome because this is obviously a bad outcome. You don't want the city to. Devolve into chaos. I don't particularly care about San Francisco, and I think, I think the two, the two of you guys can talk about it on no, I'm gonna get rid of my place in the city. Call in. But I I could. I couldn't care less about how that's closing down free bird. Got nothing to say. OK, I want to add just one thing. Look, I so I care because I live there. But but this trend, this is not just San Francisco, this whole idea of these radical decarceration lists, they are running for DA in every major city. This is going to be a national trend. And they're going to cause a lot of carnage, a lot of death and destruction until the people realize. And there will inevitably be a backlash to this and hopefully just not too many people. Fair enough. I don't want to be too flippant. My point is. It's a really important debate. It's going to happen in every city, but folks need to get engaged in those cities and do something about it. If you want to hear the argument of why this is happening, you can go watch the Ted talk on YouTube of Adam Foss Foss, he was the original like proponent of the DA's coming in to drive the decarceration decarceration movements. And you know, I just think it's important to be informed of the other perspective and in evaluating where folks are coming from that are that are that are proponents. This movement, yeah. I'm trying to be charitable towards their position, Dustin, and read if you want to come on the pod and be a bestie, guestie, I guess maybe Dustin, Dustin, respond to me and said, listen, we don't know what the counterfactual is. If we had a more aggressive DA, that was his arguments. We don't know the contractor. So I of course, so I posted a list of people of innocent victims who've died. OK because directly because of a decision that Chase Aberdeen made. That's your counterfactual. That's your counterfactual. Right. Listen, it's been an amazing episode. And no plugs, no ads, no nothing. If you like the show, great. And if you don't like it, how the hell did you make it to the minute? 75 for the Queen of Kiwa? The dictator himself? Chamale popotillo. I'm having steak tonight. It could not. If you're vegan. David Friedberg, you're not invited to steak dinner. Yours tonight, I'm having beers tonight. You're having beers and roasted eggplant tonight. You've never eaten fish in your life. Never had sushi. And sacks is everything. I don't know. All three dishes. Jack, you need to talk about Zaxby's health. Where's your first, second, and 3rd dinner tonight? I'm I'm on a seafood diet. I eat, I see the food, and I eat it. If we take out your post mates slash ingrates account right now. Gonna be in and out, in and out. What? Cappuccino? So I guess you mean the fat guy on this pod. I don't get it. This is not. I just bought my third machine. I just can't be happening. It's happening. This is your twilight zone episode I just bought. I'm going. I decided I'm going twice a week with the trainer and I just bought the hydro, so now I have tonal. Peloton, tread and I got the hydro. I'm going from smart machine to smart machine. Hey, are you spatial? I gotta extra math. Oh, good question. No, no, no. Comment. Comment. OK. Sorry. I from tweet. People have other things to do. Guys, I wanna know you don't we gotta do. I gotta go. Alright, everybody. Love you. Love you. Love you. Yeah. Get a salad. OK, we love you. Bye. Besties. And of course the dictator here dictation. He's back. Master himself. Dictator. A minimum of $100 million personal. Like thousands and millions of computers. It's hard to make good investments. It's hard to build a company. From the picture. On the details. Whatever complete byproduct of the social safety. And at some point you have to figure out whether you actually want your kids to look or not, or you care more about the land grass. I'm king. And planning is free and it's not. It is free, but it's not. Again, thousands and millions confused. I get thousands and millions firing on also with this. Ultra launching billionaire has blocked the French laundry. Do you expect this? Just wanna be called King? The little guy getting run over? I just can't stand that. Flash. It's hard to make it. It's hard to make good investments. It's hard to build a company because if it was easy, everybody would be doing it all the time. This one man for yourself, it's all about you. You can figure it out with the rugged individualism. That's just not realistic like. You want who's listening to this? Who wants to go to the French laundry? Stay at home, pour a bunch of salt on whatever you're going to eat. OK, melt a stick of butter in the microwave, stick of butter in the microwave, drink it, and then basically take it $1500. Light it on fire. You've been to the. It's hard to make it. It's hard to make good investments. It's hard to build a company because it's always easy. Everybody would be doing it all the time. Just one man for yourself. It's all about you. You can figure it out. The rugged individualism, that's just not realistic like.