特朗普被起诉、去美元化、风投该不该投中国 AI？别了，Bob Lee

Jason Calacanis (00:00:00): I can't see what's on your hat. What does it say? Supergut? David Friedberg (00:00:02): One of my most exciting companies called Ojalo. Jason Calacanis (00:00:05): Oh, Mahalo. Speaker 3 (00:00:06): I Jason Calacanis (00:00:06): still have mahalo.com. No. David Friedberg (00:00:07): Not Mahalo. unrelated, completely unrelated, nothing whatsoever to do with Mahalo. I remember Mahalo, great product. Sorry to become Jason Calacanis (00:00:16): like it. -- against you know, we were making $10,000,000 in revenue at the peak -- Yeah. -- at a hundred people writing like, human curated search result pages. I wrote that. David Friedberg (00:00:26): Look at chat gpt thing. Chamath Palihapitiya (00:00:27): You're you're David Friedberg (00:00:28): a great guy to reference the chat gpt thing coming out of that. Jason Calacanis (00:00:32): then what happened was they did the Panda update, and we went from 10,000,000 down to 500,000 in revenue overnight. David Friedberg (00:00:39): What was the Panda update? Jason Calacanis (00:00:40): they looked at who the top sites were, EHA, Apollo -- Yeah. -- etcetera. And they just said nobody can get any more than this amount of traffic. and they literally throttled the number of unique users they would send to you. And that was it. Game over. And then everybody I knew at Google wouldn't return my emails, and they were like, we don't have partnerships with anybody. That's what Matt Kutch told me. Chamath Palihapitiya (00:01:04): Are you saying that Mahalo's lack of success had nothing to do with the poor product and execution. It was Google's malfeasance. Jason Calacanis (00:01:12): It got really rave reviews. It was backed by Sequoia. Speaker 3 (00:01:14): The number Jason Calacanis (00:01:14): -- Speaker 3 (00:01:14): So did Chamath Palihapitiya (00:01:15): the movie but it sucks. Jason Calacanis (00:01:16): You know, when you build a company that gets to 10,000,000 in revenue in 18 months, you can talk your month, but basically looking at your resume I see that you've created nothing in your entire career. Okay? When you get in the arena, the arena, and you actually build a product, then you can talk to me I had the number one blog in the world. 1 of the top 5 tech magazines in the world. And this is the number one tech and business podcast Speaker 3 (00:01:38): in the world. Jason Calacanis (00:01:39): -- Chamath Palihapitiya (00:01:39): good. I touched a soft spot. I got to the warm underbelly there. David Friedberg (00:01:42): Jake House so rarely goes after Chamath when he does. It's just gold. Speaker 3 (00:01:46): It's like Jason Calacanis (00:01:46): -- So it's incredible. You're talking to 3 founders here, Chamath? You're the odd person out. So when you wanna talk about product, then make one. Okay? So gross. And yet, I'm the richest. Chamath Palihapitiya (00:01:57): It's so tilting. Let's tilt you. Jason Calacanis (00:01:59): Totally fine. So it's Kim Jong Un, so it's Putin. Okay? There's a lot of rich people in Speaker 3 (00:02:03): the world. Oh my god. Jason Calacanis (00:02:04): But the these are 3 product. Okay, dictator? There's your Hold open. Let's go. The way your winter is wide. Rainman, David. Speaker 3 (00:02:18): We open source it to the fans and they discover reason. Jason Calacanis (00:02:26): Alright. Let's get started, everybody. It's been a big week. There's a lot to talk about. Might be a little bit of a controversial spicy agenda today here on the all in podcast with me again. The Sultan of Science who is tearing up the YouTube comments, everybody asking the Sultan of silence to contribute more and to speak more. But when he does speak, my lord, he drops those knowledge bombs. How are you doing, Sultan of Science? David Friedberg (00:02:50): I'm hanging in there. Jason Calacanis (00:02:51): You're hanging in there. Okay. Wow. I'm hanging in there. Man, a few words, I guess. Hanging in there. Okay. Great. With us, again, of course, another Android David Sacks, Sachs, how are you doing? David Sacks (00:03:02): I am doing fine. How are you? Thank you. Wait. Let me ask GPT. What's the question? Chamath Palihapitiya (00:03:08): Hey. How are you doing? David Sacks (00:03:09): May I ask you? Hold on. Let me see what it says. Jason Calacanis (00:03:11): I mean, basically, Chachypif T4 is the ultimate Asperger's equalizer. You guys are gonna benefit most from this. David Sacks (00:03:18): I asked it, how are you? It says as an AI language model, I don't have feelings or consciousness, so I don't experience emotions. or states of being like a human does. However, I'm here and ready to help you with any questions or topics you'd like to discuss. How can I assist you today? Jason Calacanis (00:03:32): That's pretty similar to how you feel except you don't offer to help anybody. Okay. Also with us is the dictator himself. Speaker 3 (00:03:39): I'm here David Sacks (00:03:39): to talk about topics Jason Calacanis (00:03:40): looking forward to today's episode. And with us, the dictator with a shockingly, shockingly low cut Chamath Palihapitiya (00:03:47): There's only one button on the shirt. Jason Calacanis (00:03:49): Only one button. Okay. Made from a tiny albino baby -- Chamath Palihapitiya (00:03:53): Like right here, they were like, should we put buttons in there like Jason Calacanis (00:03:57): Why put buttons? Why put why put Chamath Palihapitiya (00:03:59): and then Jason Calacanis (00:04:00): -- -- David Sacks (00:04:00): conservation movement. Jason Calacanis (00:04:01): Exactly. No. No. No. No. The one button is what counts. That is a baby Albino Reynosaros that was killed, fed to Chamath on his vacation, and then attached to his linen shirt. I guess, let's just get this out of the way. Trump was a arraigned, I guess, is the term. He was charged in New York with 34 felony counts of falsifying business records, Alvin Bragg, alleged Trump orchestrated catch and kill scheme as well to suppress damaging information before the 2016 election Of course, Trump pleaded not guilty and did a feisty press conference or speech rally. Morilago after that, prosecutors say the scheme involve falsifying business records to conceal payments to Stormy Daniels. We know all that. Same thing, Michael Cohen went to jail for. The indictment wasn't a speaking indictment where it explained all the details. So Alvin Bragg hasn't tipped his cards by explaining in detail what the legal theories are, which information he has, and he was pretty clear about that, that he was not going to tip his cards, which makes us even more. hard to understand what's going on and creates even more divisiveness. Predictably, the right is framing this as a witch hunt. But surprisingly, many on the left, including former SDNY head pre Barrara of the amazing podcast, Stay tuned with Preeth, which I love. He felt this was the weakest of the 4 major investigations that Trunk is under, and he expressed some concerns on his podcast that it was light and not detailed. And he might have not actually pursued this unless he had a 99% or something like that chance because it is the president's Sachs, I guess, everybody's expecting us to fight over this, but to just be a little preemptive here, as much as I think Trump is, like, the most eth unethical person ever hold the office. This does seem a little light, and I'm hoping Bragg has the goods on him because why bring a misdemeanor case You know? And these are all, I guess, misdemeanors that are being elevated to felonies because of tax evasion possibly or election interference. So What what are you Steelman or just generally speak about the the case here? because I know that you're a man of law and water. David Sacks (00:06:10): Well, many People on the left are criticizing this case, Jonathan Chait, who's a liberal writer for the New York magazine wrote a good column about it. And look, here are the reasons why. Number 1, the underlying behavior here is that Trump engaged in a private settlement with Stormy Daniels. That's not illegal. Even if it is, you know, so called hush money, that is legal. You're allowed to do that. Number 2 is that he used personal funds to do it. He did not use campaign funds. And this is why Alvin Bragg has had to make this kind of distorted, ridiculous claim that he should have used campaign funds to do it. But does anyone believe that if Trump had used campaign funds, that wouldn't be alleged as the crime. So he's kinda damned if he does damned if he doesn't here. I think that, you know, what the law's trying to do with these rules around campaign funds is protect donors from candidates misappropriating them. And Trump had every right to use personal funds to engage in the settlement. It's a major distortion of campaign finance rules. 3rd, these campaign financials are federal laws. They're not state laws. So it's not up to Alvin Bragg to enforce them. And in fact, the feds looked at this and decided not to prosecute it. Because if they did, they'd have to enforce similar laws against Hillary Clinton recall. that Hillary Clinton had a problem where she used campaign funds to fund the payment to Christopher Steele to write the steel dossier. And that was a real problem. And it was miscategorized as legal fees, and she had to pay a fine for that. But no one talked about locking her up over it and no one was talking about you know, indicting her and sending her to jail. And so part of the reason why I think the feds didn't wanna look at this is because they'd have to look at similar cases that are even more egregious. And then finally, the last thing is that we're well past the statute of limitations on this whole matter. David Sacks (00:08:03): So Alvin Bragg is really out here on a limb He's passed the statute of limitations. He's enforcing laws that are not his business to enforce. They're distorted interpretations of those laws. And the underlying conduct here is fully legal. So I think everybody is kind of, like, wondering why he's doing this, and I think there's 2 theories. Either Alvin Bragg is incredibly stupid -- Which Speaker 3 (00:08:23): he's not. Jason Calacanis (00:08:24): -- David Sacks (00:08:24): or he's incredibly smart. Jason Calacanis (00:08:25): Yeah. David Sacks (00:08:25): And the the to the three-dimensional chess explanation that Anne Coulter has is that this is all a giant honeypot for Republicans because they're all rallying around Trump here because they perceive, I think, correctly, that he's being railroaded and he's being he is the victim of a political prosecution. But in rallying around him to defend him, you see that Trump's poll ratings among Republicans in the primary are going through the roof. Disances are going down. And so what agriculture fear is is that this is all an elaborate ruse. to make Trump the nominee because Biden would much rather face a reelection against Trump than against a young youthful, vigorous, governor like Advantis. Jason Calacanis (00:09:04): Do you think Bragg has a bunch of more information and maybe that tax evasion is the issue he'll go after? Because that seems to be the other theory here is he's not gonna do the federal, you know, election stuff. He's gonna go after the tax evasion, which is what they already got. The try organization on when Weisel, I guess, the CFO is going to jail for 6 months. It's gonna Chamath Palihapitiya (00:09:23): be hard to connect the dots on Speaker 3 (00:09:24): these things. Jason Calacanis (00:09:25): -- 600,000. Fine for that company. Good job. Chamath Palihapitiya (00:09:27): These are misdemeanor crimes. and to convert them to a felony, the crime needs to have been done in the process of aiding and abetting another crime. Speaker 3 (00:09:37): And Jason Calacanis (00:09:37): -- Right. -- tax evasion is the the concept here, Chamath Palihapitiya (00:09:40): Jamal. When he listed the bullet point list of all of the reasons that or all of his evidence. It seemed to point to what David said, which was just these campaign finance violations. Yeah. This whole thing just seems like such an enormous waste of time. Just think about the amount of money that will have to be spent. on just securing New York City. Every time he shows up, the 5 car motorcades, the secret service, the police, the this, the that, the disruption to people. For what really ultimately, I think, is right, is kind of like You know? It's a bit of like, man, this case should have been brought years ago, but not at all. Jason Calacanis (00:10:22): In relation to that, they were told to stand down from doing that because of the you can't indict a sitting president, and that's paused. So that's another legal theory that's gonna have to be tested. David Sacks (00:10:32): Jason, the feds looked at this years ago, and they decided not to press charges. Jason Calacanis (00:10:35): -- told to not do it because he was a city president. No. They weren't. David Sacks (00:10:39): No. He's been out of office now for a couple years. Why didn't they move forward? Jason Calacanis (00:10:43): They were. That was the process they were doing. So that that's that's been established. The previous DA said he was told to stand down. Because the David Sacks (00:10:52): situation -- -- has decided not to prosecute on the same underlying offenses. That was his decision he decided not to. who who told him to stand down? No one could tell him to stand down. Jason Calacanis (00:11:01): Yeah. The office of David Sacks (00:11:03): Cyrus Vance has decided not to move forward with his very same case. when the statute of limitations had not expired. Now it has, and Alwyn Braggs moved forward. Yeah. That's -- You really have to stretch here to come up with any kind of plausibility to this to this case. And, I mean, you have to wonder why he's doing it. Is it just naked partisanship? Or are they trying to make Trump the Republican nominee? Jason Calacanis (00:11:26): Well, here's what Vance said on meet the press this weekend. I was asked by the US attorney's office in the southern district to stand on the investigation. And they were asked to stand down as well because of the you can't indict a setting precedent. So, anyway, all this stuff's gonna get done in the watch. I don't think we have to spend too much time on it because we'll find out, I think, in the coming weeks. Chamath Palihapitiya (00:11:46): Do the Democrats actually want him to get convicted then what? He's gonna be under House Arrest in Mar a Lago because he's not gonna be sent to jail. And then what? Then DeSantis actually will win the nomination. So what exactly is the perfect outcome, which is to create this theater, waste taxpayer resources only to have Trump acquitted just so that he can win the nomination, and then he can go against Biden and lose this seems so far fetched and idiotic. Move on. Speaker 3 (00:12:13): Right. Chamath Palihapitiya (00:12:13): Close this chapter and move on. David Sacks (00:12:15): Totally. This is ripping the country part for no reason and such a stupid case such a stupid case. Jason Calacanis (00:12:20): What do you mean about me? David Sacks (00:12:21): who had liked to prosecute Trump like you, Jason, I think, have a problem with it. And one of the reasons why This is gonna be counterproductive even to the the anti Trump forces is that by going first with this case, Jason Calacanis (00:12:34): Yeah. David Sacks (00:12:34): Alvin Bragg is poisoning the well for any future case he might bring against Trump. Because now all future cases against Trump are gonna be seen as painted with the same brush. which is a nakedly partisan sort of witch hunt. And there may be other cases out there that have more validity to them but they're all gonna be seen as of a piece with this sort of Albembrag Jason Calacanis (00:12:55): -- Yes. That that was Pete's position. I think it's a it's a logical one. I don't disagree. What do you think of the other three cases January 6th, the interference in Georgia, where they recorded it on my tape, and then the stolen documents and the obstruction of justice. Or do you think all four cases are politically motivated and none of them have any validity to them, sex? David Sacks (00:13:13): I mean, look, the question you have to ask is if Donald Trump was a private citizen who never ran for president, would he be the target of any of these prosecutions. I mean, he was, you know, a high profile business figure for decades, and he wasn't prosecuted like this. And So that's really the question you have to ask. And if we wanna do you wanna live Jason Calacanis (00:13:30): -- -- go to jail. Cohen did go to jail for the same crime, so the answer is yes. David Sacks (00:13:34): what? Michael Cohen wasn't prosecuted till after Trump was president. Jason Calacanis (00:13:37): What I'm saying is, you you asked if if he was not David Sacks (00:13:40): Do do really believe if Jason Calacanis (00:13:41): he would let me finish. You you asked if if Trump was not a president, if he would have been prosecuted for this crime. In fact, another person Michael Cohen was prosecuted for this crime and did serve jail time. So the answer is yes. He would have been. And they and they brought these cases, this banking kind of cases, and they brought the other one for the 1,600,000 fine in Weaselberg going to jail. So I think they would, actually. But, anyway, David Sacks (00:14:02): I don't think so. I think this is I Jason Calacanis (00:14:04): I think that -- Speaker 3 (00:14:05): Do you Jason Calacanis (00:14:05): think all 4 politically motivated is my question to you, Chamath Palihapitiya (00:14:08): or do you think any of them David Sacks (00:14:09): have validity? I can't. I don't wanna comment on the other cases until I see what case is actually made and what the merits of them are. However Jason Calacanis (00:14:16): -- Speaker 3 (00:14:16): Sure. -- I David Sacks (00:14:16): don't believe that all these prosecutors all over the country be looking at Donald Trump this way he was a surviving citizen who never ran for office. And I think we have a big problem in our political system when political disagreements are criminalized. And this has been a nasty trend that's been going on for many years. It was usually, I guess, practiced against staffers. You know? Here or there, you'd have some you'd have some executive branch staffer who would, you know, find themselves on the wrong end of a prosecution, and they'd end up going to jail. Maybe they get pardoned or not. But now it's reached all the way to the the top, and you have presidential candidates basically being prosecuted. And I do not believe they'd be prosecuted if they were not major political figures. And it looks really bad for the political figure who is Speaker 3 (00:15:01): leading it right now in the Republican Party David Sacks (00:15:01): to be Joe Biden's opponent in the next election to be prosecuted by 1 of Joe Biden's political allies. I mean, if this were happening in some other country, United States would be criticizing it as some sort of, you know, Banana Republic type move. So this is not the direction we want our politics to go. And and look, I don't I I don't want -- Don't disagree. Jason Calacanis (00:15:23): -- David Sacks (00:15:23): Trump to be the nominee. I support a different candidate. But I think that to be interfering in our elections for Alvin Brackley interfering in the political process this way is a reach, and it's setting a horrible precedent for the future. I mean, we're talking about major presidential candidates Jason Calacanis (00:15:42): being prosecuted. -- question then, Saks. David Sacks (00:15:44): By local DA's. I mean, why would we want this? Jason Calacanis (00:15:47): let me ask a follow-up question then. Do you the DOJ is currently investigating Hunter Biden, and then, obviously, that goes up to the big guy with the 10%. Do you think the DOJ should be investigating Hunter you think we should be giving a pass to presidential of presidents and their families? David Sacks (00:16:03): Well, the Hunter Biden case, I mean, this is one where you've got foreign governments basically paying off Hunter Biden for political access. Now that may ultimately be legal because I think influence peddling is kind of a business that takes place all over Washington. But that actually does speak to the integrity of our political system. At the end of the day, would I send Hunter Biden to jail? No. I don't think so. Like I said, I don't like criminalizing political disagreements. But what Hunter Biden did was definitely pretty shady. And -- For sure. Jason Calacanis (00:16:34): -- David Sacks (00:16:34): you know, the and it puts nothing to be looked at. Jason Calacanis (00:16:36): Hunter Biden and Trump and his family are both shady is my feeling on it. We gotta get better candidates in here. Nikki your candidate, Chumaz raised $11,000,000 last week. She's on fire. Freeburg, you wanna jump into this and and touch the 3rd rail you want us to move on. David Friedberg (00:16:52): Let's move on. Jason Calacanis (00:16:52): Alright. So there's been a lot of Twitter back and forth about the dedollarization And if it's real, if it's happening, if it's not, last week, China and Brazil struck a deal to trade in their own currencies, the Brazilian government announced 2 countries will no longer use the US dollar as an intermediary. I don't know if that's for everything they trade or for certain things they're trading. It'll be a straight one for reais, trade. China is the top US rival, obviously. And Brazil is one of the largest economies in Latin America. What are your thoughts, generally speaking, Free Burger, I know that you have some exposure here, you know, with your company that I think you spacked recently. And you have some knowledge of the space. Right? David Friedberg (00:17:35): Well, I mean, China and Brazil are pretty sizable trade partners. I think it's around a $150,000,000,000 a year of bilateral trade. So China historically has made a lot of investments through their companies in Railways, infrastructure, waterways, ports, and infrastructure to support the agriculture, manufacturing economies in Brazil, and it's a very deep tie. Obviously, the closeness of that relationship China became a bigger trading partner for Brazil in 2009 surpassing the US. By the way, China has had similar trading strategies in Africa, in Australia. They've bought several companies in Australia. They've made massive infrastructure investments. The currency of trade It's one element of a broader intertwining that China has kind of enabled by using its resources to invest in infrastructure development and then participating in the economic value and gain that arises from that it still also supports the local country, the local population, the local economies in a meaningful way. I think it's worth noting that the anti globalization moment that we're having in the US, and it may be a longer term trend, doesn't mean that globalization and global trade is gonna slow down between China and other really important well, resource nations around the world. So the Brazil China summit that happened a week ago where a lot of Brazilian executives went to China and had a very deep set of dialogues, but they also signed a ton of agreements on trade. And also, in some of those cases, the trade being done in non US dollar denominated currency, It's worth noting as being that if the US does continue to push for deglobalization, We can only leverage our side of those relationships. China will continue to make investments continue to develop trade and continue to develop really deep dives with countries around the world from a resource perspective, from an economic perspective, and, ultimately, the leverage will sit with them on what currency folks are gonna trade in. So, you know, what we're seeing with the China Saudi discussion around the Petro Yuan, which doesn't seem to be really a standard thing yet. But we're starting to see inklings of some deals happening in Yuan, but it's more related to the depth of the Chinese trade relationship with all these nations around the world. So the more we kind of, as the US, think we wanna de globalize and reduce our trade relationships with other nations, the more we're out of the way and allowing China to do that. David Friedberg (00:20:16): I think it's worth observing that the Chinese economy will grow. The depth of their relationships will grow. Potentially, the strength and importance of their currency will continue to mount as they build these really deep infrastructure and investment tie ins around the world. Jason Calacanis (00:20:29): Chamath, what does a party trading in 1 do with the 1? Do they buy a bunch of stuff from China? What happens to the 1? Nothing. Yeah. Chamath Palihapitiya (00:20:38): This whole thing is a huge nothing burger. This is the 3rd deal that that China has done. The other two countries are Pakistan and Brazil. And the reason why is I've seen like people on Twitter now breathlessly rambling on about de dollarization and all of this stuff and I think if any of these people would think from 1st principles, the first thing that you would know is that the yuan is pegged to the US dollar. And so as long as it's pegged, whether you trade through the US dollar or you don't and you directly go to yuan, Your index to the US dollar and then you use a dollar swap to convert it into the currency you need. So I don't know. I think this is kind of like a lot of folks who don't really know what's going on. David Friedberg (00:21:22): What do you think about the the depth of China's trade relationship. So forget about the denomination of the currency, but the fact that the statistic now is that -- You can't forget it. -- top trading partner with a 120 countries. You know, they surpassed the US with many of these countries over the last, you know, decade or 2, in particular, and continue to increase the the scale relative to the US where we're kind of decreasing our dependence on on on Nations and reducing our trading Chamath Palihapitiya (00:21:50): The reason why China has had so much dominance as a trading partner and the reason why China's Central Bank has the largest amount of foreign US dollar reserves, about 3 and a half Jason Calacanis (00:22:02): $1,000,000,000,000 Chamath Palihapitiya (00:22:04): is exactly because of the thing that you wanna ignore in order to have this faluting intellectual conversation. It is pegged to the US dollar. And until it is unpegged in a free floating currency, we will never know what the real market clearing price is. And so China has been able to hold on. China has been very effectively able to manipulate this currency Since they were brought into the WTO, in order to engender that trading partner status, they were able to artificially suppress the value of their currency so that exports from China could gain traction in countries all around the world. You have to take into account this currency peg and you have to ask the question Where would the currency be if it wasn't free floating? And then, what would the incentives be for folks to replace the dollar and I think that there's a lot of interesting questions there that are worth asking but I think you have to be a little bit more intellectually honest to have the discussion. Jason Calacanis (00:23:03): And just for clarity, Chamath said they already have these deals with. Pakistan and Pakistan and Russia. You meant Pakistan and Russia, I think. already have those deals with those 2. Pakistan Chamath Palihapitiya (00:23:13): and Russia. Jason Calacanis (00:23:15): Right. Okay. Good. I just wanna make sure it's clear there. Sachs, do you have any thoughts on this as is this an example of people just maybe taking the Ray Dollyo book and it fits a certain narrative and overhyping it, or do you think this is an actual real trend in the world? to be concerned about. David Sacks (00:23:32): I think de dollarization hasn't happened yet, but I think it's a risk. And I think there's a bunch of reasons why the risk is growing. So first of all, we have $32,000,000,000,000 in debt. Someone has to finance that debt. And the bigger that number gets the more unattractive our debt is because they're they have to be concerned that we're eventually gonna monetize the debt, pay it back by printing a bunch of new dollars. So that's point number Jason Calacanis (00:23:56): 1 David Sacks (00:23:57): is we have the these massive deficits and deaths. Number 2 is that we have, I think, in the last couple of years really weaponized the dollar. So if you look at, like, what we've done with Ukraine and and Russia, we basically seized 100 of Jason Calacanis (00:24:15): 1,000,000,000 David Sacks (00:24:16): of dollars of Russian reserves that were held in dollars. We've excluded them from the SWIFT banking system. We've imposed massive sanctions on them. And in fact, we now have sanctions on a huge number of countries all over the world. So we're very sanctioned and happy, all of which makes these countries view the dollar as an unreliable store value. Why would you store your money in something that can be taken away by the US and specifically by the state department. So I think this is a major change in the way that we view the dollar the last couple years is we're gonna use it as a weapon. that, again, that makes it Speaker 3 (00:24:56): view. Well, that's not the Jason Calacanis (00:24:57): first time we've ever done that. Right? We've done sanctions against many different -- David Sacks (00:25:00): We've done sanctions. But as far as I know, we've never sees foreign currency reserves and excluded a country from SWIFT, which is the banking system. So as as an instrument of US foreign policy, So, I mean, I could be wrong about that, but this was a major event when it happened. Remember, we also did stuff like seize the the yachts and the the foreign holdings of Russian oligarchs, my mother, ill gotten gains. We suddenly decided they were ill gotten. Let me tell you. We didn't think they were ill gotten when those Russian billionaires were buying those yachts or buying New York real estate or London real estate -- Or Jason Calacanis (00:25:32): investing in Facebook. -- David Sacks (00:25:34): or investing in companies here or buying sports teams or what have you. So we didn't think they were ill gotten hold on. We didn't think they were ill gotten at the time that they were actually made and spent. we decided subsequently, we're just gonna see those things. Well, again, if you are a foreign country or a wealthy person in a foreign country or decide to decide where you're gonna keep your money, you may not want it to be liable to the vagaries of US foreign policy. So I think all these things do matter. And when you're running the kind of debt and deficits we have and you're making the US dollar less attractive, you are running a risk. Speaker 3 (00:26:12): I mean, Jason Calacanis (00:26:13): that's -- So we keep keeping people we have disagreements with on the dollar standard because that's good in terms of power for us, which I think opens us up to a broader discussion. David Friedberg (00:26:22): Just to Jason Calacanis (00:26:22): -- Chamath Palihapitiya (00:26:22): Okay. Just to clarify this. It's not even the dollar standard. Right? Like, what this deal was is to use this thing called SIPs. And SIPs is the non dollar competitor to swift and So you settle, right, across let's just say you have 2 trading partners in 2 completely different countries that use a bank in each of their low areas, they typically swapped the dollars and then they transfer. Right? Using this this backbone of the financial infrastructure called Swift. China has built a competitor to it called SIPs, the CIPS, and China has been going around and signing folks up makes a ton of sense. Right? Hey. Listen. If we're trading between each other, let's just use that. So I think it's important to not paint this with more of a brush than it should be. I'm not saying that dedollarization couldn't happen. I just think that everybody tries to take one random data point and conflate it altogether to reinforce a re Dahlio point from book 3 years ago. David Friedberg (00:27:19): I do Jason Calacanis (00:27:19): think there's a group of catastrophes who maybe are maybe hoping this happens or It's a great Twitter fodder. Speaker 3 (00:27:25): I David Sacks (00:27:26): think we are headed for some sort of government debt crisis. I said that there's gonna be 3 prongs to this financial crisis. 1, was these long dated bonds having unrealized losses, which is causing problems in regional and community banks. The second piece of it is the commercial real estate crisis, which I think is metastizing right now, which is also gonna be a banking crisis once all those unrealized losses come to you. And the third piece of it is government debt crisis. We have this $32,000,000,000,000 debt that we're now having to refinance at much higher interest rates. I've read somewhere that half our government debt, so 16,000,000,000 is going to come due 16, sorry, trillion. Yeah. and it's gonna have to be refinanced in the next three years. The average rate on that debt is 1.7%. Well, if you wanna refinance it at 10 year rates, you're gonna be looking at somewhere between 3 a half 4%, maybe more. So you're looking at a doubling of the interest costs And I also read that by Jason Calacanis (00:28:23): 2030, David Sacks (00:28:24): we're gonna be have over a $1,000,000,000,000 of interest expense owed by the US government every year. That is money. That's not funding anyone's Social Security. It's not funding anyone's health care. It's not funding 1 weapons program. It's not funding anything we want. It's just a big. It's gonna be more than a quarter of our total federal budget. Speaker 3 (00:28:42): Yeah. Jason Calacanis (00:28:43): And this is where you start gambling. When you're chasing that big payment, you start taking risk. Chamath Palihapitiya (00:28:46): This is also where you have to expect the Fed will really want inflation to stay high. That's sort of what we've said before. The only way out of this mathematically is to keep rates high. But the other thing, David, that you When you mention all of this is, what about every other country? If you think that's happening in the United States, I think it's important to make sure we at least consider every other major economy because it's not as if they're pristinely sitting on the sidelines. while this happens to the US. This is my whole argument the whole time, which is if you're gonna have this argument, you need to do it thoughtfully and relatively Right? Because the euro is in the same amount of trouble. If you look across, it's not as if China is actually sitting pretty and smelling like roses either. Every major economy or trading block in the world is gonna go through this at the same time. So it becomes a relative trade argument and there I just don't know enough to know whether the US is poorly positioned versus Europe or China, but it just seems like you get back to a place where it's like, okay. We need to find the flight to safety. What is the canonical flight to safety? If it's not a commodity like gold, it's probably the dollar until it's not. Jason Calacanis (00:29:52): Yeah. Okay. Freeport, obviously, other countries have even more acute problems, higher debt to g b GDP, which means higher debt payments. Just rounding 3rd here on this issue. Any final thoughts on dedollarization and servicing our debt? David Friedberg (00:30:08): Look. It's we're in trouble. And it's it's unclear the timing and the path, but the arithmetic is pretty simple. In addition to the point Saks made, you guys saw the news. The city of Chicago has a Jason Calacanis (00:30:23): $44,000,000,000 David Friedberg (00:30:25): pension hole. That's just the tip of the iceberg on unfunded pension liabilities from both state government, city government, even private institutions. This is, again, hundreds of millions of people worldwide that are expecting money coming to them from institutions that, ultimately, the federal government of the US is likely gonna have to backstop to some degree. So that's another huge check that's gonna need to be written. that the federal government is inevitably gonna have to write because we're not gonna just let all these people have no money and become starving. And Social Security right now is projected to go bankrupt sometime between 20302035. So we're gonna have to write a check to cover the hole there. Plus the interest payment checks. Jason Calacanis (00:31:10): So -- -- at Mach Point Friedberg of, like -- Right. Can I take 2 other on that? Hold on just a few things. -- finish. Relative to other societies, other countries. David Friedberg (00:31:19): Yeah. So the the very likely case is that Relative wealth will decline. So in the near term, I think it's inevitable we have higher tax rates. I've said this before because in order to to kind of meet the gap, even if we have these austerity measures or reduce costs or reduce the budget as The Republicans are gonna push for as the stat ceiling debate reaches its apex in 60 days from now, which you better believe this is gonna be pretty pretty damn dramatic. And there's gonna be real questions of what happens if the US defaults on its treasuries. If the US defaults, on obligations it has on treasuries, there will be a real shift away from using those assets as the baseline of the risk free rate worldwide. What what the net what the other thing will be? I don't know. I I I'll speak about the challenges I see with Bitcoin, you know, if we want to at some point. Oh, did you hit did you hit Jason Calacanis (00:32:19): a 1,000,000 yet? How's But if but if David Friedberg (00:32:21): if you put all of this together, you're gonna have to source income somewhere. You're gonna have to take a piece of the assets and a piece of the income away from the private citizenry, so you're gonna have to tax. And that tax will be used to kind of fill some of the hole, and then more of the hole will be filled by printing money And that will lead to this kind of inflation of asset values, which ultimately means that the relative cost of things go up and relative wealth goes down. And I think that's the point to to take note is that anyone who's concentrated assets is gonna have them effectively lost in the washout long term. -- dead? David Sacks (00:32:59): Well, I yeah. I just wanna add a couple of details there because Pureberg went pretty quickly over a couple of those examples. So just to take that that Chicago case. The numbers I saw in an article this week, I think, is in the Wall Street Journal, was that 80% of the property taxes in Chicago are now going just to pay for pensions. So 80% are going to pay former workers, not current city workers. And moreover, those pensions are only Jason Calacanis (00:33:23): 25% David Sacks (00:33:24): funded. so they've already overpromised by 75% benefits that they can't afford. How is this gonna work? And you saw that we just had an election there. And rather than fix the problem, they voted for a candidate, Brandon Johnson, who has even softer on crime than Lori Lightfoot. And the reason for that is because the the government workers' unions basically all supported him. So you have a situation in these blue cities and states where there's a massive civil service. They are the strongest special interest in local and state politics. They have already taken huge appropriations out of the state budget in the form of these pensions. which aren't even adequately funded. We can barely afford them as they are. Jason Calacanis (00:34:12): Should we have pension sacks? What do you think? Should we just have either with 401 Chase? Sure. David Sacks (00:34:17): So what the what happened in the 19 eighties when there was a lot of pension reform in the private sectors, you move from defined benefit to defined contribution. So you start having more defined contribution like 401k. The way that these public pensions work is defined benefit. So you know, what they'll do is they'll say that we're gonna take your last year of employment with the city or state. And whatever your whatever the amount of money was you made in that last year, you're gonna get 80 or 90 percent of it for the rest of your not just your life, but your spouse's life too. And moreover, any overtime you earned becomes part of that calculation. So everyone knows this game. And so what you see is in their final year, state or city employees will load up on the overtime. They'll earn twice as much. And then they get Jason Calacanis (00:35:04): 90% David Sacks (00:35:04): of that. Yeah. They get 90% of that for the rest of them and their spouse's life. We just can't afford to have rules like that that don't make any sense. And so but the point is that the benefit that's been defined bears no relationship to the amount of money that's gone into these pensions. Right? And so you have Jason Calacanis (00:35:22): a huge solution here. David Sacks (00:35:24): You have a huge unfunded liability. Yeah. But to FreeBird's point, every blue city and state in the country is gonna have this problem, and who's gonna pick up these expenses? Chamath Palihapitiya (00:35:33): You bring up great points, but you just mash them all together in this mashed potato of random things like unfunded pension liabilities, you want renminbi reais trading, and they're, like, the same thing. They're not the same thing. Speaker 3 (00:35:48): They're driven by totally different. Jason Calacanis (00:35:48): But we're know, listen. Chamath Palihapitiya (00:35:51): I -- And you just can't throw them in this, like, Jason Calacanis (00:35:53): this debt. Chamath Palihapitiya (00:35:54): Amalgam soup, an outcome -- For the conversation -- -- notification. So I'm just saying, like, if you these are important topics, but I'm just saying, I do think they're motivated by totally different things, and they're not related as much as we think they are related. David Sacks (00:36:07): I think they're related. David Friedberg (00:36:07): Let me walk you through how they're related. Chamath Palihapitiya (00:36:09): Okay. I wanna hear how the reais you want trade is connected to the Chicago Pension System. Jason Calacanis (00:36:14): The David Friedberg (00:36:15): holes need to be filled. So the the money is not gonna just not get paid to the pensioners. Social security is not gonna go away. Just like we saw in France, If you start to do that, you have revolutions in the street. There's literally bonfires at intersections in France in Paris today because people don't wanna wait another 2 years before they get their pension payments. So ultimately, that check has to be written. When you add up the column, of how much money is not on the balance sheet today, how much liability is not on the balance sheet today, that is ultimately gonna have to get paid out. And the US government is going to print money to pay it out. It indicates that there is a higher degree of uncertainty on whether or not I'm actually gonna get the value back for the bonds that I'm buying in US dollar denominated form that the US dollar is actually gonna be strong enough to cover the costs or has enough kind of, you know or has too much volatility because of this uncertainty. And I think that that's really where people start to say, well, maybe the US dollar isn't that risk free rate where it's a strong economy with a great balance sheet. great economic growth. There's certainly extraordinary potential because of the freedoms that we have to operate in this country as individuals through the enterprise. through the innovation, through the entrepreneurship, through the attraction of talent from all over the world to come here. But at the end of the day, we do seem to have a very big set of checks that we're gonna have to write. And as those, you know, liability start to mount, there becomes a real question on do I really wanna hold dollars? Maybe I wanna hold something else. and maybe I diversify a little bit. And maybe instead of holding just dollars, I also hold other things. And as that starts to happen, you see a little bit of a shift. Jason Calacanis (00:37:47): Got it. It's not David Friedberg (00:37:48): an overnight thing. It's all catastrophic one or the other, but it starts to bring into question whether the US dollar is the standard de facto system that's used for trade around the world. That's the point. Jason Calacanis (00:37:58): And, Saks, there is a solution to this. Superannuation is done in the UK and in Australia where you contribute you're forced to contribute to your 401 k essentially, but you get to learn how to put money away and you become a little more You have a little more authority over your future with these pensions where you're responsible for saving, and you're kind of forced to save. And and it seems to have worked really well in Australia and other places where people have great savings, and you don't have this major debt load by the government doing it. So it's something for people to look into. Sacks, did you wanna add anything to this? Because I think we can beat this one to death. Just make it quick. Yeah. Speaker 3 (00:38:37): So keep Jason Calacanis (00:38:37): -- David Sacks (00:38:37): I don't think we're gonna sleep beating it to death. because I think it is a huge issue. I mean, look. The the part of Chamath argument that I agree with is that you do have to evaluate the dollar on relative terms. And, you know, you can argue that the US and the dollar, it's it's still the, you know, the let's call it the most eligible bachelor in the leper colony. You know, nothing started falling off on the man yet, but but that doesn't mean that it it won't. Chamath Palihapitiya (00:39:04): That's really good. That's really good. David Friedberg (00:39:06): By the way, the first default might be the noses follow-up. You know? David Sacks (00:39:10): The Economist Herb sign once said that if something cannot go forever, it won't. What we're doing right now cannot go on forever. We are running deficits and debts and unfunded liabilities. that we cannot afford. And so it will stop. And the only question is how it stops? Jason Calacanis (00:39:25): Well, I think there's Yeah. David Sacks (00:39:27): And it may stop in a way that is not vol it's not a voluntary choice by us. Jason Calacanis (00:39:33): We crash the car, basically. Yes. Chamath Palihapitiya (00:39:35): You guys wanna make a bet a friendly wager for charity Jason Calacanis (00:39:38): -- Chamath Palihapitiya (00:39:38): Oh. -- about what happens in June? David Friedberg (00:39:40): I'll make a bet with you guys. Jason Calacanis (00:39:41): Wait. June, you mean the debt ceiling? Chamath Palihapitiya (00:39:43): Yeah. What what do you guys think happens? Do you think this is gonna be a fract just chaotic thing where the markets get roiled. David Friedberg (00:39:49): No. I think it's gonna be a pretty Speaker 3 (00:39:51): rubber straightforward deal where they're gonna David Friedberg (00:39:53): in come down to the wire, but my guess is no one's gonna wanna default on the debt. Yep. And there's gonna be some concessions on spending. And, ultimately, the debt ceiling will get extended, and that those concessions on spending will allow the Republican Party to save face with their voters and say, look. We we got some concessions here. I'm not sure they're gonna be enough to really address any of the major problems. that the US is facing over the longer term but, you know, certainly letting the debts dealing hit and defaulting is catastrophic. Everyone knows that. Jason Calacanis (00:40:29): -- Friedberg. I think the majority case is a bunch of hand wringing, and then they make a concession. -- Chamath Palihapitiya (00:40:33): people that are interested in this topic, I would go the way back machine and go and read all of the articles in the eighties where you could replace China with Japan. And what happened with Japan is that Japan just hit a demographic wall. Not dissimilar to what China is about to hit in the next 15 or 20 years. David Friedberg (00:40:51): Right. It's a good counterargument. Yeah. That's a really good point. And I think that there is this element of, you know, China as the primary threat. But I think the The bigger problem Chemab is that we have voted ourselves into a stupor. We have allowed ourselves to accrue these liabilities. that are, in many cases, not on the balance sheet, that we simply cannot afford to pay. And the social unrest that will arise what if and when we don't pay them or the economic cost of us actually paying them, either either of those are gonna be pretty significant. But that's under that's water under the bridge, and it has nothing to do with China. It has just everything to do with how the US is spending. Chamath Palihapitiya (00:41:27): Thank you for being intellectually honest. This is my point. I agree with you about the importance of these unfunded liabilities. I just completely disagree with you that this argument about these things being so hyper connected or that all of a sudden we're at cliff of dedollarization. I don't think it's rooted in facts. And I think, again, it ignores this unbelievably important piece of logic that all of you guys that say this tend to ignore and it's still in in it's not even well addressed in Dahlio's book, which is it is a pegged currency. And the minute you unpack it, none of you know what happens to it except that it probably isn't where it's trading today. And if you actually then have to factor in dollar reserves that everybody holds, that thing would skyrock in value and it would crush the export value of the yuan. And it happens to all currencies. And this is this funny thing that has happened to the United States which is that it ran forward and it transitioned its economy to a service led economy faster than other countries and other economies and other currencies did. And nobody wants to just talk about that. Jason Calacanis (00:42:34): except this affects -- We're talking about it. -- and that's what sort of drives us. Go ahead, Saxon. David Sacks (00:42:38): I don't think the big risk is that all of a sudden the dollar gets replaced by the yuan as the world's reserve currency see. I think Friedberg lays out a more intermediate path, which is people start to hedge their dollar exposure. and decisions that used to be automatic like trading oil and dollars, you know, the so called petrol dollar. Now it becomes a little bit you know, more of a decision. So, you know, the Southeast -- That's David Friedberg (00:43:01): what happened that's what happened with the pound sterling. It was a similar story, and it was not an overnight collapse. I mean, there were certainly these kind of punctuated moments where there were hits. But, you know, the history is that there was a slow devaluation over time, and the you know, as a result of, obviously, the economic pressure and uncertainties. Chamath Palihapitiya (00:43:17): Actually, no. What happened to pound sterling was that it was pegged to the US dollar and that it became unpacked. David Friedberg (00:43:21): So exactly what I'm talking about. No. Even post that, Jamath. Chamath Palihapitiya (00:43:24): Even post that if it's a free floating currency yeah. You're pre you're proving Post David Friedberg (00:43:28): spreading words. Chamath Palihapitiya (00:43:29): No, dude. You're pre point, when Soros broke the back of the US dollar, what he forced George Brown or what he forced the chance for the extra to do was to basically depeg the pound. And then yes. You're right. It's been like this ever since. Speaker 3 (00:43:42): Yeah. They David Friedberg (00:43:42): would lose -- -- what I'm saying. Chamath Palihapitiya (00:43:44): If you let it be free floating, nobody wants to trade in that other See, everybody wants the dollar. As a bad as the dollar is, David's right. It is the the worst affected leper in the leper colony. Jason Calacanis (00:43:56): Yes. We have all the -- -- saw David Sacks (00:43:57): in the column. Chamath Palihapitiya (00:43:58): This is why you have to have if you're gonna be intellectually honest, just have a relative conversation about all of the currencies and all the things that they're also going through, which are also not not perfect. Jason Calacanis (00:44:07): The debt payments are emerging, and the frontier markets are extraordinary. Chamath Palihapitiya (00:44:11): Just realize that if you wanna go and peg your economy to somebody else's back, they also come with their own trials and tribulations that you have to risk manage as well. And now you have to decide on balance. Do you wanna risk manage a centrally governed economy? Right. From a central bureau, or a freewheeling democratic? Like, these are all the discussions that people should need to have. Jason Calacanis (00:44:33): Yeah. There's a lot of choices there. David Sacks (00:44:35): Just back to the the non currency part of for a second. There are a lot of, like, connections between these things. I I actually think there is a strong connection between what's happening, for example, in Chicago with the out of control civil service and the unfunded pensions all the way to the dollar status. But there's also a connection between commercial real estate and these pensions. So on a previous show, we talked about the commercial real estate the looming crisis. And a lot of people thought that, you know, some of the comments where we're just talking our book, which is not true. I don't own I don't have a dollar invested in any of these office towers. But you know who does? Pension funds. That's who owns these office towers. So you're talking about pension funds that are three quarters unfunded, and they may have a lot less funds than they even think they do because we're about to have a huge reckoning where all of a sudden these office towers that were supposed to be blue chip, that were supposed to have the best collateral there was in major American cities, Now all of a sudden, they may not be nearly as valuable as they thought they were. Chamath Palihapitiya (00:45:40): Yeah. And and if they don't own the building, they definitely own the debt. A 100% for sure In the fixed income portfolios of all these pension systems are the debt that was used to finance these buildings by the REITs and by, you know, the big real estate funds that put those things together. So you're absolutely right. They are a 100% impacted by what's about to happen. David Friedberg (00:45:59): We're not we're not gonna allow given the civil unrest and social unrest risk and obviously, as a democracy, we're not gonna allow that all to go to 0, and we're not gonna let pensioners not get paid. ultimately, that's just a kiss of death. Maybe pension payments are reduced to some degree. But again, Paris is a really great example. of as you start to try and shift the economic guarantees that have been made to pensioners even slightly. Jason Calacanis (00:46:24): Yeah. What was it 2 years in retirement? 62 -- Yeah. I tried to move retirement. -- 62. David Friedberg (00:46:28): And it was certainly like, you know, you could sit here and argue what people, for yours, for their whole life, have this expectation set. we have all, for our whole careers, invested in the Social Security benefits that were owed as retirees through every paycheck that we've received, And those social security payments may not end up coming back to us if Social Security is allowed to go bankrupt. So, ultimately, the government best to set step in and issue new dollars to make that up. Then the economic question is what happens to the value of the dollar? What happens to the value of the economy? And so on as you issued 1,000,000,000,000 of dollars to fill these holes. Jason Calacanis (00:47:05): Let me ask a a question that's a little more positive here, perhaps, which is, is there a path out of this, you know, debt cycle we're in. And what are the top ways in which we're going to get ourselves out of this? I I I have 3 that come off the top of my David Friedberg (00:47:22): head. productivity. Jason Calacanis (00:47:23): Hold on. I have 3 off the top of my head. Number 1 is austerity measures. Number 2 is productivity through technology and Perhaps number 3 is maybe recruiting more entrepreneurs here to start more companies and you know, fill some of these jobs. So in intelligent immigration, which I don't wanna refer David Friedberg (00:47:42): to. -- taxes. Yeah. Number 1 is higher taxes in terms of what's likely to have for a David Sacks (00:47:46): new landing. Jason Calacanis (00:47:47): or do someone? David Friedberg (00:47:49): That's outstanding. Yeah. So so look. Higher taxes because you can go after assets, you can go after wealth. So there will be higher taxes. Jason Calacanis (00:47:55): Okay. Right. I I David Friedberg (00:47:56): still think I still think we're we'll end up seeing 70% tax rates on the the wealthiest people in the treasury. Jason Calacanis (00:48:02): 70% David Friedberg (00:48:03): I don't see I don't see it being, like, unpopular. I think it's gonna be unpopular with the wealthy. It's gonna be popular elsewhere to fill the hole 2nd is cut back on spending, but that's a really hard thing to do because, you know, as we've talked about in the past, people vote to get more stuff. So you put the politician in, it's gonna vote to get you more stuff, you don't vote people in to go cut spending. So, generally, you know, we're gonna likely see number one happened first, maybe there'll be a reckoning where you kind of reduce spending. It's gonna take extraordinary political will and an extraordinary depth of education and diffusion of understanding of this this key critical economic problem amongst the voting class, which is a really hard thing to realize. I think number 3 is -- Get Jason Calacanis (00:48:46): the public to understand to understand that we have to have austerity measures. Yeah. David Friedberg (00:48:52): And then number 3 and and and, basically, people gonna have to make sacrifices. So the first sacrifice will be the wealthy. They're gonna have to sacrifice through higher taxes. The second sacrifice will be everyone else, by seeing reduced spending and reduced kind of Jason Calacanis (00:49:04): -- Services. -- David Friedberg (00:49:05): the services, etcetera. The third is the hopeful one, but we don't have a guarantee on this, which is Do we see economic growth through productivity gains? Can we create leverage with our resources and our people by using new technologies to get more with less? And, you know, anytime yeah. Like, again, I I gave the example last time, but when a tractor was introduced in agriculture, all the people that were farming the ground didn't have a job anymore, But what happened is new jobs emerged in making tractors and servicing those tractors in, you know, gas pipelines to get gas to the tractors. All these economies emerged as a result of that economic technical innovation. So I think as we see AI and other innovations hit the market, you know, new economies and new industries, hopefully, really blossom, and and we can benefit from that economic growth and also lower costs for people on purchasing goods and services. Jason Calacanis (00:49:55): We've identified 4 things. When Reagan came in, wasn't wasn't Chamath Palihapitiya (00:49:59): the highest tax rate, like like Jason Calacanis (00:50:00): 70%. David Sacks (00:50:01): Yes. That was the top marginal tax rate. Jason Calacanis (00:50:02): 70%. David Friedberg (00:50:03): And -- 70% is not unheard will happen again in this in the US. David Sacks (00:50:06): Well and but Reagan unleashed an economic boom by flattening the tax structure because marginal tax rates create a disincentive people to work and produce more. And so there is a big economic hit from this. Yeah. And remember what this 19 seventies were like? It was the Malaysia's days days Jimmy Carter. We had a horrible economy with high inflation, and everybody was paying high tax rates, and the government wasn't making that much revenue. because there wasn't as much economic activity going on. And during the 19 eighties, we had an economic boom and the government actually collected more revenue with lower tax rates because so much economic progress was unlocked. Jason Calacanis (00:50:44): Sucks. We identified 4 things. David Sacks (00:50:46): Just like we've learned nothing. Jason Calacanis (00:50:47): Which one is the most important here? ones are the most important? We talked about austerity. We talked about increasing taxes. We talked about innovation and efficiency, and then we talked about immigration, recruiting, where highly talented people. When you look at those 4, do you have any to add to that list to get out of this? And which ones do you think are the most important and why? David Sacks (00:51:03): When you look at federal tax revenue over a 50 year period. Go look at the Fred charts. What you see is that quite independent of the top marginal tax rate, the amount of federal receipts that the government's able to collect is roughly around 19%, plus or minus 2%. And so you can only get so much blood from a stone. You can try to raise the top marginal rates, but then rich people have an incentive to basically find more tax protected strategies. So the history of this thing going back 50 years is you can only extract so much from taxes. And what you're better off is a lower tax rate that is broader based. and you go for economic growth that produces more activity. But, look, if you if you're spending too much, there's no way out of that. Jason Calacanis (00:51:55): So austerity critically important and entrepreneurship. Chamath Palihapitiya (00:51:58): I David Sacks (00:51:58): mean, when when Bill Clinton left office and I I think Reagan through Clinton was the biggest 25 year period of economic boom we've ever had. Federal spending as a percentage of GDP was 18 and a half percent. he got it down from, like, 22%. And he did a 3 economic growth, and he bragged about it. Chamath Palihapitiya (00:52:17): Yep. David Sacks (00:52:17): So, you know, look, where you wanna be is I think federal spending should be in the low twenties. I think you want tax revenue to be in the high teens, Jason Calacanis (00:52:28): 19%, David Sacks (00:52:28): You can have a small deficit. Those are the conditions for economic growth. Jason Calacanis (00:52:33): Chamath? Any thoughts here on are way out. Chamath Palihapitiya (00:52:36): I'm gonna take the complete opposite of all of this, which is the anti chicken little version, which is I think not much at all changes. I think that jet debt to GDP will continue to rise. Not just for us, but for every other country in the world whose fate is worse than the United States. And I think that On a relative basis, the United States will continue to be exceptional and that this will not really be an issue in our lifetimes. Jason Calacanis (00:53:10): Okay. Chamath Palihapitiya (00:53:10): And I'm not saying that's a good thing and I'm not saying that's a just thing and I'm not saying that's what I want to happen But pragmatically, I think that that's what will happen and I don't think that there is a magic number Where all of a sudden things start to break where there's some magic number for debt debt to GDP where all of a sudden everybody finds religion. Instead, I think that It just creeps higher. And by the way, if you look at where debt to GDP was at the turn of 19th century and then what happened through to world war 2, what we've really done is, you know, we've retraced a lot as well. So there have been moments where we've been out over our ski tips a lot. And so I think it's just important to keep in mind that sometimes what works just continues to work and I keep asking myself the relative question which is what country, what economy, what group of human capital is better positioned than the United States. And despite all of the things that are screwed up with this country, it's hard to find a better example. Jason Calacanis (00:54:13): So Yeah. Unless you happen to have the lucky mineral or oil club like Norway or Saudi Arabia, you're you're you're gonna be hard pressed to find a better place to plant your money. And I think entrepreneurship and immigration are the 2 most important things we can do. as well as a starter. And I think Joe Manchen is, like, at where these moderate candidates in the middle who might actually be able to talk about cutting Chamath Palihapitiya (00:54:37): But by the way, you said something you said something really interesting, which is if you look at the Norway, Saudi, Abu Dhabi, what are those countries effectively becoming by monetizing the oil? they invest in all of the economies that are working. Jason Calacanis (00:54:49): Perfect segue. Thank you. Chamath Palihapitiya (00:54:50): It's not as if the Saudis and Abu Dhabi and the Norwegians aren't trying to invest in America. They're trying to put as much money to work as possible. They're just trying to pace it out so that they have time diversity and asset diversity. So to your point, Jason, Jason Calacanis (00:55:03): it's so this is a Chamath Palihapitiya (00:55:04): It's sort of a bit of a self fulfilling prophecy. I think that what has worked continues to work and then The burden for disruption gets higher and higher Jason Calacanis (00:55:13): -- Chamath Palihapitiya (00:55:13): Yeah. -- that changes the same. Jason Calacanis (00:55:13): There's two things that work in the world. Having those natural resources or having entrepreneurship. Let's make a segue here. David Sacks (00:55:20): Wait. Can I can I have the final point on that? Jason Calacanis (00:55:22): Oh, god. We've been final pointy for 20 minutes here. Go ahead. Quick final point. David Sacks (00:55:24): This is an important discussion, I think. Speaker 3 (00:55:26): Okay. David Sacks (00:55:27): So Adam Adam Smith once said that there's a great deal of ruin in a nation. Meaning, it takes a lot of political bumbling to screw up something as big as a nation, especially a nation. That's the number one superpower in the world that has the world's reserve currency. So we are in some ways, the beneficiary and coasting on 100 years of excellence of economic performance and great political leadership in this country. And the question to ask is not whether we can still post on that, but whether the political leadership we today is living up to the standard we had in the past. And I think it's clearly not, and the only question is when it breaks. And it's hard to predict exactly when it's gonna break, but what I do believe is that if we keep going the way we're going, it it will have to stop. Jason Calacanis (00:56:13): Well said, we're definitely bending it right now. And when you bend it, sometimes it breaks. David Sacks (00:56:17): Right. And and by the way, the the reason why we are gonna pursue AI at breakneck speed, even though it may lead to some sort of weird dystopian future, is because we need that productivity boost. We have no choice now because we David Friedberg (00:56:31): are so -- And frankly better us than Chamath Palihapitiya (00:56:32): the next guy. Absolutely. the next step. Jason Calacanis (00:56:34): Whoever gets their first name, another perfect template. Two major stories this week. that we need to discuss the first is Saudi Arabia's public investment VC arm took a very interesting PR step of listing Their funds that they have backed, and it's a significant list. Everybody from Andreessen Horowitz to Coates to Not surprising there. And Mark Andreessen and Ben Horowitz and Adam Neumann had a major keynote at a Saudi startup conference. I was actually asked to keynote the next one in Riyadh, which I'm debating doing. And then in sync with that happening, at the same time, there has been a debate of should LPs in America, be backing firms like Sequoia, China, Matrix China, etcetera, because those firms are now backing open AI competitors and a we believe AI is the big race here, should we, as a country, we don't we're not allowed to to back military stuff, obviously, in these countries. But how do we, on this global chessboard decide should we be taking money from Saudi? Should we be investing money in AI startups in China? So I think Chamath have got a big perspective here globally. Let's start with you. 2 separate issues. any surprises here by Saudi, the kingdom, actually releasing the list of who they're backing, and why would they do that at this point in time? And then us investing in China because we are at a moment here at Crossroads setting, of should we be engaging or not engaging and building bridges with China and Saudi You know, for obvious reasons. Chamath Palihapitiya (00:58:22): Look, Saudi Arabia, Abu Dhabi, all of the UAE. These are countries that are really important on the world stage and increasingly so because they manage peace and prosperity regionally now. Right? they have huge balance sheets that can accelerate all kinds of projects all around the world. And so they have to be taken serious And so this is a very smart marketing move by the p i f which is to essentially say, look, we are an established blue chip l p of the blue chip organizations that you're used to hearing about in celebrating. And I think that's very smart of them because what it does is It reinforces the feedback loop that other great firms should be going to them to raise capital when it comes time for them to raise their n plus first fund. And so I suspect especially now it makes even more sense because everything we've heard Friedberg mentioned it a couple of episodes ago The United States limited partner market is essentially closed for business. They have huge misallocation problems. The in down are sort of closed. The universities are closed. A lot of the family offices are licking their wounds. And so this is a perfect time for folks in Saudi Arabia and the UAE to basically put the foot on the gas and basically tell everybody, hey. We are open for business. So I think that that makes a lot of sense and I think that it'll be successful. It'll work especially in a moment now where US dollar flows from US dollar limited partners are very difficult and harder to come by. Jason Calacanis (00:59:54): Well and we're also selling 1,000,000,000 of dollars in weapons to the kingdom, and we are a major partner there. Chamath Palihapitiya (01:00:01): valuable a valuable security partner of the United States. They're a valuable economic partner in the United States. It's no different than doing business with any other country. I think it's smart by the PIF On the other thing though, with US Firms Investing in Chinese AI, it should not be allowed and I do think that the folks that are responsible for CFIUS need to get a handle on this. Look. I've done a bunch of deals where I have had to jump through a bunch of CFIUS hoops where Jason Calacanis (01:00:26): Explain CFIUS, please. Chamath Palihapitiya (01:00:27): So, basically, CFIUS is the committee on foreign investment in the United States. Now what that means is if folks want to invest in certain things that are on the list of things and I'll and I'll tell you the things that I've been involved with that that came under CFIUS. rocketry and certain chip technologies are so advanced that the United States has very specific rules that limit the ability for foreign actors to invest in those businesses. And in those situations where a few folks invested beside me in some of these companies, we have to go through a process to get SIFIOUS approval before that investment was allowed. Now what's interesting about that is that's about money coming in. But I do think that the reverse now becomes important because if US dollars are going to go and see these extremely complicated advanced technologies abroad, especially into the hands of countries that are frenemies at best of the United States, I think we have a responsibility to have a point of view on that. And so I think Keith Reboy was the one that was very definitive and said this should not be allowed. I do think it is so early. Jason, we talked about we're on this curve of fuck around and find out, which means there will be some crazy examples of stuff that are very uncomfortable. Jason Calacanis (01:01:43): Yep. Chamath Palihapitiya (01:01:44): I don't think we want US fingerprints on this stuff being perfected outside of US borders. Jason Calacanis (01:01:51): Sex, when we look at the history of engagement with China. Maybe we can take a a multi decade globalization perspective here. When you look back on it, the engagement with China created so much prosperity, so much intertwined dependency, iPhones being the the best example possibly. We're selling them in China. We're making them in China. China loses Apple as a customer. That would be absolutely devastating for them, and it would obviously be devastating for Apple as well. So when we look back on that as a general rubric here, do you think We enabled a competitor, or we avoided future conflict because of the interdependency. And where do you sit in terms of thinking about engagement versus maybe isolation or something in between those 2, frenemies, best of frenemies, etcetera. David Sacks (01:02:41): The policy of as it was called 20 something years ago. The the idea behind it was that if we engaged with China economically and help make them rich, then that they would become more like us. It would somehow turn into democracy, and they would have tremendous gratitude towards us, and we've become friends. It's not the way it worked out. There were people who warned that this was a foolish approach. So most notably, the realist scholar, John Muersheimer, at the University of Chicago, warned back in 2002 that that was not the way this was gonna play out. If we made China rich, they would seek to convert that wealth into political power. And then they would act the way that all other great powers have behaved throughout human history, which is they wanna dominate their region. and they would seek to push the United States out of Asia. And the future that he predicted 20 years ago is the future that's come true. I think the you know, all the constructive engagers, I think, has some egg on their face. Now I understand where they're coming from. This is a fundamental difference between whether you see the world in economic terms, which is about creating positive sum games, basically trade, or whether you see the world fundamentally in geopolitical terms, which is about the balance of power, which is more of a 0 sum game. And I think that both views, they're both extremely important. We want to engage in positive some relationships that generate more trade and more wealth through United States. At the same time, we have to be aware and concerned about the balance of power. We do not want a number 2 country in the world who can rival the United States in terms of power who basically could win a security competition with us. And we certainly don't want a country in the world to be more powerful than us. So I think this is sort of the yen and the yen as geopolitics versus economics. And I think what's happened with China over the last several years is it's flipped. David Sacks (01:04:35): I think we used to see the relationship primarily in positive some economic terms, and now we see it in geopolitical terms. And I think there's a lot of firms now in the United States who haven't embraced this new reality. And to go back to your question about, you know, when should a venture capital firm take money from a foreign country and when it should. And I think there's a very simple rule for this, which is if the country is a US ally, I think it's fair game because the US has said this is a partner of ours. So why can't you do business with them? But if the United States government has said, this is an adversary, you're putting yourself in a really difficult precarious spot. by doing business with them. Speaker 3 (01:05:15): because Jason Calacanis (01:05:15): then you have to explain yourself to the US government. Yeah. David Sacks (01:05:18): This is the very simple rule we would use is I don't we would never consider taking money from Russia or China, any country that the US government says is an adversary of ours. But if the US government says this is a partner in an ally, then I think you consider it. Jason Calacanis (01:05:33): Do you think there's a way, Saxx, to salvage the the relationship with China and make it productive? Or do you think it's a far gone conclusion at this point? Because One might argue, and I've heard people argue this. Maybe China would have invaded Taiwan already if it wasn't for the interdependency. So I I know we're dealing with, you know, a lot of we're doing a lot of predictions here, but do do you think it could be salvage, and do you think it would have been a worse relationship if We hadn't had this interdependency that's been built up. David Sacks (01:06:00): I'm not quite sure that the economic interdependency theory preventing war has been definitively proven. If you go back to war 1, for example, it was the case that Britain and Germany actually were each other's number one trading partners, and they still got in world war 1 for reasons that in hindsight seemed really silly. So I'm not sure that economic interdependence can prevent it certainly doesn't prevent security competitions from arising, and and therefore, I don't think it can necessarily prevent a war. Although, you know, having business ties can lead to positive interactions. Jason Calacanis (01:06:37): Yes. David Sacks (01:06:38): So I I'm just saying that jury's still out on that theory. But I think that, like I said, I think once you're in a security competition the way that we are with China, I think geopolitics rather, economics is in the driver's seat. And that's what's happening right now. Jason Calacanis (01:06:51): -- Friedberg intellectually way. I think to process this, you would never invest in a North Korean AI company, a Russian AI company, or an Iranian AI company, How do you think about China and then just generally this topic of when to engage, when venture capitalists, when startups, you know, and trade partners should engage with various countries. How do you think about a free bird? David Friedberg (01:07:17): In what role as an investor? Jason Calacanis (01:07:19): Well, we could we could take multiple roles here. Founder, investor would be the top 2 for this program, I think. or taking money from any of those 3 possibilities. David Friedberg (01:07:29): Very few portfolio companies that don't benefit some way from the trade relationship with China. So, you know, to Saks's point, I'm not sure you can really say China is a true and complete adversary in the sense that we're on opposite sides. There's obviously deep interdependencies. So You know, it's it's hard to kinda say, I draw the line at this kind of technology investing there, but I benefit from their technology investing going on there in other ways with some of my other businesses. Right? I think that that's really where you kind of run into a a bit of a conundrum that we do have a deep interdependency. So, you know, like, with respect to, like, investing in China, I I don't know. I think the investing in China thing pretty difficult given that there is a single power that gets to decide what does or doesn't happen. I mean, look at what happened with Alibaba. A lot of shareholders got pretty wiped out there. These these governments where you have, like, the op the the potential of getting completely wiped out by government action is a pretty scary place to invest in general. I'd be more oriented as an investor around those concerns than I am about. you know, it's it's really hard to do the calculus on on am I helping or hurting America versus China. You know, you're you you could argue a hundred wastes each of those sides. Jason Calacanis (01:08:54): What do you think of Saks's framework? If we're partners, you know, fair game, if not partners, not a good idea to put your neck out. David Friedberg (01:09:03): But we're part sorry. Are you ask are you saying, like, we're not partners of China? Jason Calacanis (01:09:07): Well, it seems like the US government has said we're adversaries now. and that we're in a in a pretty dogged competition. David Sacks (01:09:14): Well, Jake, I'll just be specific. I'm talking about a situation in which you're taking money from them. Jason Calacanis (01:09:19): Yes. situation where you're taking money? David Sacks (01:09:21): I do think that selling them products that are, you know, not like, super strategic. Like, I think selling them our most advanced chips is dangerous. But, you know, look, I think if you're selling them products that help restore the trade deficit and correct that. Movies. Speaker 3 (01:09:38): I don't have a David Sacks (01:09:38): problem with that. Yeah. I don't have a problem with selling movies or cars or something like that to China. The question is, though, I think if you're a venture capital firm, do you take their money? That's what I'm specifically talking about. And I think whether you're allowed to or not, We don't because we just don't wanna have to think about what complications that could cause down the road. Jason Calacanis (01:09:59): Also getting your money out of China also a difficult task it seems these days, Cash App creator, Bob Lee, aka crazy bob on Twitter. That was his Twitter handle, stabbed to death tragically in San Francisco earlier this week. He was Squares for our CTM. He worked at Google. on Android. He was a chief product officer at Mobilecoin, also an angel investor in a ton of companies, FigmaSpace, Clubhouse, Well known in the industry. Officers responded at about 2:35 AM to report of a stabbing on the 300 Block. Of Main Street and arrived to find Lee who had been taking to hospitals to come to his injuries there. No arrests has been made. A lot of San Francisco politicians are sending their thoughts and prayers. But, obviously, San Francisco is still very dangerous place, it seems. Any thoughts on this and how it might act as some sort of a crossroads or not. And thoughts and prayers obviously to his family interest. David Friedberg (01:11:00): I think this This is a pretty tragic event. There's a lot of people who I knew that were pretty close with him. I got several messages on his passing. He was I didn't know him personally. I think we met maybe once or twice. He worked on Android at Google, and, obviously, had a key role at Square in the early days, and was a pretty impactful and important person, but, also, supposedly, I didn't know him very well again, but everyone says just such an incredibly kind and generous person. So tragic loss. I used to live Two Blocks from where the the event happened. I'll I'll I'll zoom out. Jason Calacanis (01:11:36): Where is it? Freeberg? Chamath Palihapitiya (01:11:37): Is it a bad place? Jason Calacanis (01:11:37): It's David Friedberg (01:11:37): in Soma at Rincon Center right by the big condo towers there, and that's right where the Salesforce offices used to be. and, you know, block from the waterfront and block from the market out. Speaker 3 (01:11:49): Is it Chamath Palihapitiya (01:11:50): is it part of all that drug craziness? Jason Calacanis (01:11:53): No. Not necessarily. No. It's it's David Friedberg (01:11:54): not in the heart of the camping district. It's just a nice area in Soma, quiet area. Right? So at night, there's no one there. went to San Francisco a few weeks ago. I told you guys I pulled up to a restaurant on the Embarcadero, and I joked with my buddy in the car. I'm like, oh, my car's gonna get broken into while we're at dinner because I'm parked on the went to dinner 90 minutes later, it came out. Of course, my car had been broken into. The trunk had been popped up, and it's Speaker 3 (01:12:14): just like Jason Calacanis (01:12:14): -- This is the fancy area of Soma Chamath. Very fancy area Soma. David Friedberg (01:12:19): Look, here's the thing. If you park at a parking meter in San Francisco, for 8 minutes too long, you get a 60 to a $100 parking ticket. And San Francisco has become an upside downtown. What I mean by that is I think that, like, so much of the response that we've had in the last couple of years to power dynamics and concerns about the powerful having too much influence over those who are less powerful who have less influence and who suffer as a result of their demeaned influence. The the response has been to turn things upside down, which is to give those who were lacking in the power structure, everything and to try and take everything away from those who are at the top of the power structure. So if you wanna deal drugs in the open air, if you wanna walk into Walgreens and steal, 1000 of dollars of goods and walk out, nothing will happen to you because you were embedded with this powerless kind of position in life. But if you have a car and you park at a parking meter and you stay at a parking meter for more than 10 minutes, you get a ticket. And the consequences of responding to power dynamics by flipping the power structure upside down is obviously can be more negative as we're kind of experiencing, I think, acutely in Francisco, but also around the nation. And by the way, I think that this applies in a lot of other ways in terms of how we're doing college admissions. In terms of how we're selecting people for jobs, in terms of, you know, recent applications for pilots, for doctors, where the assessment is less about Did the person who was disadvantaged at the beginning of their life or career or trajectory or educational path be given greater opportunity and greater resources to catch up and to get there? Or did we just flip the power dynamic upside down and just give them the endpoint? And as a result, there's a massive kind of detriment that I think can arise. And it's not necessarily always the case that it will arise. It is not necessarily the case. that selecting someone based on some demographic profiling to be an airline pilot necessarily means that that airline is more likely to have airplane crashes. David Friedberg (01:14:21): But, in certain cases, when you don't prosecute certain crimes like robberies or people walking into stores, or breaking windows or dealing drugs in the middle of the street or camping on the street. And you fast forward a couple of years, that power dynamic, the flip of that power dynamic causes the whole town to go upside down. And everyone who's sitting on the bottom ends up becoming a victim themselves. And I think we're starting to see inklings of this in San Francisco. We certainly have for years. Sachs is ranting on about this. with respect to some of the non prosecution that's happened historically, and I totally agree with him on those points. And I think that it's come to a breaking point in San Francisco, but that's really a beacon for what else is going on. And, you know, some people call it wokism. I I think maybe this notion of wokism is one small element or segment. of the broader issue with how we are tackling with and dealing with embedded power structure issues in this world today. And the flipping of those power structures upside down doesn't necessarily yield the outcome we all want. And I think we're starting to see reasons why. Sack City thoughts here? That's my rant. I can't disagree with you. David Sacks (01:15:24): Yeah. So similar to Friedberg, I I didn't know Bobily, but I I know many people who knew him and I was getting tech And, obviously, we feel really bad for him, his whole family, his kids, his father, his coworkers, friends, We don't know exactly what happened yet, but I think we suspect, and I would bet dollars to Dimes, that the story is very similar to a case we had in LA recently. the Brianna Cuppfer case where a young woman was basically stabbed for no reason by a psychotic homeless person who had been through the revolving door of the jail and criminal justice system, who could have been locked up, who has arrested multiple times that was not kept locked up, because of this push for decarceration. And you can argue that maybe it'd be better for that person to be in mandatory treatment, or in a even a maybe a a mental asylum, but this idea of just releasing these people onto the street, I just think is an outrageous abdication over responsibility by our elected officials, who run the criminal justice system, who pass our laws. And the thing I just wish is that I could lock for 24 hours. The the people like our supervisors or our governor or the people who basically make these laws or the people who are pushing for decarceration of these violent offenders by these nonprofits, I wish I could lock them up in a room for 24 hours with the people that they think are safe to release on our streets. Let's see if they really would take that test. because it seems to me that these these elected leaders and these nonprofits are pushing for these outcomes, they are setting loose on us a predatory, criminal, or psychotic element that jeopardizes our safety and makes these cities unlivable. And we should not tolerate that. And quite frankly, the responsibility goes beyond those elected leaders. David Sacks (01:17:16): It goes to all the voters as well because we keep putting up with this. And where was our governor when this happened? He was in Florida doing some sing along at some high school where he was trolling Ron DeSantis because DeSantis has taken on DEI at that school. So that's where Newsom was, and he's extremely popular in California. Jason Calacanis (01:17:34): Fighting culture war instead of David Sacks (01:17:36): saving people -- -- in a in a distant state. Instead of basically fixing the criminal justice system in California, it's even worse than that because he's shut down 2 prisons and released lots of people. So where is the push for criminal justice reform in California and protecting the citizenry And until the voters in San Francisco and California start demanding this, there's never gonna be a change. Jason Calacanis (01:17:59): And at the same time -- Start David Sacks (01:18:00): listening to Gary Tan. You know? Yeah. Just vote for who are the Gary Tan tells you to vote for. Okay? Jason Calacanis (01:18:05): I I think it's probably a good guy. I I can't disagree, and the the supervisor seemed to control a lot of this. And Chamath shared just this week, Mayor Francis Suarez, is talking about on his Twitter, the reduction in homicide, shootings. And they have literally counted the if you wanna say a drug addicted, mentally ill, homeless. There's obviously 3 or 4 different things going on here when you look at the population that's living on the street. Some number of them down on their luck, some number mentally ill, some number addicted to drugs, and some number a combination of those things, He seems to be getting it done in Miami. And, you know, other states seem to and other cities seem to have gotten this under control. Is there any hope for San Francisco to moth, or is this just gonna take 5 or 10 years to bottom out? Chamath Palihapitiya (01:18:54): I mean, it takes regime change. I think New York had a long period of lawlessness where people were afraid to walk down the streets. It took the handful of mayors to draw a hard line in the sand, to increase policing, sometimes to introduce some pretty controversial concepts at the time. at the time that were supported, which now seemed controversial. Jason Calacanis (01:19:16): You're talking about stop, ask, and frisk. Chamath Palihapitiya (01:19:17): I think it was called the broken windows theory of policing. Jason Calacanis (01:19:20): Yep. Take care of the little things. Chamath Palihapitiya (01:19:22): Take care of the little things so that the little things don't compound into the big things. But whatever you believe needs to get done, I think it's pretty clear that what is being done isn't working. And so the real question is, can people see through the naked partisanship to agree that this is not working? And sadly what I would tell you guys is that I don't think they're there yet. And the reason is because America is the most divided it's ever been especially on issues of race and social justice and social norms. And I think that grime has gotten caught and painted with that brush, which means that the idea of very aggressive policing and safety are now viewed as opposite and antithetical to social justice. And I don't know how that happened but the result of it is this which is these folks will never agree that this is not working. And you'll have to go through recall election after recall election and even then it's not gonna be enough because the smart politicians will say what they want in terms of like safety matters. But then a lot of voters We'll vote the opposite. The example in Chicago that David brought up earlier is really interesting because it was essentially a social justice candidate versus a law and order candidate through their democratic ranks and the social justice candidate won. The progressive candidate won and the person that wanted to tax businesses and individuals won. And the person that wanted to sort of focus on law and order lost So what does that say? It says that -- Yeah. Jason Calacanis (01:21:14): -- Chamath Palihapitiya (01:21:14): we are still in a moment where we can't agree on what is important. Yep. That's really scary. And so I think you kinda have to unfortunately vote with your feet if you are lucky enough to do so. And then Yeah. who's left over or a lot of people who are not in a position to just up and leave. And then they are unfortunately left behind. Jason Calacanis (01:21:37): tragic situation all around. And I will never host a conference or any event in San Francisco until this is solved Chamath Palihapitiya (01:21:46): because when people ask us Jason Calacanis (01:21:48): to do events, I'm like, hey. People don't wanna come to San Francisco. They're afraid. So I do my events in Napa Chamath Palihapitiya (01:21:53): or in San Mateo. Nat Nat started a bilingual school Italian English that is on the IB system. international baccalaureate system. And it's a sister school to a school in the city. We had a fundraiser which was literally right downtown in that encampment area. And when I pulled up, I was like, is this for real? It's an open air drug market where folks are doing drugs selling drugs right in front of you. They're passed out completely incapacitated. About a third of the guys are wearing balaclavas So you can't identify them. You have no idea what they look like. Jason Calacanis (01:22:29): I grew up in Brooklyn in the seventies eighties when it was legit, dangerous, and when I walk in San Francisco, it feels much more dangerous than the that crazy era. Chamath Palihapitiya (01:22:43): It feels random. It doesn't feel like there's organized crime, gang crime. Like, I grew up in a pretty crappy neighborhood. And you knew who the gangs were. You knew who the tough guys were. You knew how to avoid trouble. They didn't come and randomly come and stab you to death. Right? And so, yeah, Jason, you become street smart growing up in a culture like that because you know how to avoid it. You know how to be alert. This doesn't feel like that. Jason Calacanis (01:23:05): This -- No. -- Chamath Palihapitiya (01:23:05): is just like a bad roll of the dice and you could get stabbed to death just walking down the street. That does not where where are the politicians to stop this? Jason Calacanis (01:23:16): I mean, they don't care. There's a the level of corruption in San Francisco is unbelievable. The incompetence amongst those supervisors, the mayor, the DA's, everybody. It's just incompetence. And nobody has the Hutzbauer, the Wherewithal to say enough And I think the other group to blame are all the rich people and powerful people who just haven't been active in politics. And I know some of us have in different ways. But I think it's gonna take a coordinated effort by people who really care to vote out all these supervisors and bring in It's gotta be regime change. And I I just don't know if there's the wherewithal to do because every time as a person who has some means or is successful in some way, you stick your neck out there like you have done, Saxx, the the attacks that you will get from this insane left I don't wanna even use the word woke. I think it's a different derangement. I think it's actual corruption where they're making so much money off of this homeless industrial complex. they're getting paid so much money that the gift is so deep that they are gonna fight for this. And it's gonna take some really courageous people like Gary Tan and maybe David Sachs and other folks to back a slate of people to to change this. And we need people to run for government who are brave and who wanna put their neck out there and say, enough is enough. We're gonna police the city. I just don't know if it it's gonna happen. Alright. Listen. Yeah. Speaker 3 (01:24:40): I mean, David Sacks (01:24:40): the the the issue is that it takes it takes more than 1 election. So listen. I think we made a positive change by removing Chase of Budine. I think Brooke Jenkins has the right attitude. She cares about victims. I think she wants to prosecute. The issue is that you've got a police department that's 50% of the number of officers that they want because they flirted with this whole defund the police movement. You've got the board of supervisors, and you've got, like, an oversight board on the police that basically make their jobs harder. And it's not it's not one election because even the mayor doesn't control it because the board of supervisors really has all the power in San Francisco. So they take a job that really should be 1 or 2 people's jobs like the DA, like the mayor, and they break it up into this, like, board of supervisors where You've now gotta be familiar with a dozen different races in order to effectuate a change. Well, the machine knows how to do that. but the average system doesn't. So they make it really hard to effectuate change. But there are groups that are springing up in San Francisco, like Grow SF, and, you know, people like Gary who are on top of it. And that's why just follow them and and vote for their recommendations because they're actually tracking how to make a difference. Chamath Palihapitiya (01:25:54): Alright. I think on Jason Calacanis (01:25:55): that, we will wrap for the dictator Chomov Palihapitiya, the Raymond, David Sachs. and the sultan of science -- Chamath Palihapitiya (01:26:03): For Friedberg. Jason Calacanis (01:26:04): -- Chamath Palihapitiya (01:26:05): for Aveda. Jason Calacanis (01:26:07): I am the world's greatest moderator. We'll see you at the all in Sun 2020 to 3. Bye bye. Bye bye. Bye bye. Speaker 3 (01:26:15): We'll let your winners ride. Jason Calacanis (01:26:18): Rainman, David Sachs. Speaker 3 (01:26:22): And it said -- We open source it to fans, and they've just gone crazy weather. Jason Calacanis (01:26:32): want airliners ride. Speaker 3 (01:26:35): Besty's our car. COVID Jason Calacanis (01:26:37): 13. Speaker 3 (01:26:38): That is Jason Calacanis (01:26:38): my dog thinking, and I wish driveway checks. Chamath Palihapitiya (01:26:46): We should all just get a room and just have a think you, George, because they're all these useless. It's like this, like, sexual tension, but we just need to release them out. Jason Calacanis (01:26:54): What? You're the bee bee. flirt David Sacks (01:26:57): your feet. Jason Calacanis (01:26:58): What? Where did you get Murphy's artifact?