Robinhood 事件收尾、局内人与局外人、加州的不及格成绩单

Speaker 1 (00:00:00): I'm going all in with your b. With your b. Speaker 2 (00:00:06): With your b. Speaker 1 (00:00:06): With your b. Speaker 3 (00:00:07): 50s are back. Go Speaker 2 (00:00:11): The LET Your Winter Friedberg. Rainman, David Saffens. Speaker 4 (00:00:18): open source it to the fans and make discoveries. Speaker 3 (00:00:26): Fine, everybody. Welcome. It is the podcast. You've been waiting for the all in pod emergency episode Speaker 1 (00:00:32): 20 Speaker 3 (00:00:33): the number 11 podcast in the world. Number 1 in tech, number 11 overall. Joe Rogan Sway, Pivot, NPR, Rachel Maddow, left in the dust. Welcome to the number 11 podcast in the world? Can you believe at besties with us? The queen of Kin Y himself, David Friedberg, Rainman. David Sachs, hot off. the banger by Young Spielberg Jason Calacanis (00:01:03): closing up episode 19. And, of course, the dictator, Chamath Polyhappatthieu. How are we doing, boys? Chamath Palihapitiya (00:01:09): Lovely. How are you, Shikha? David Friedberg (00:01:13): Lovely. Lovely. It's a lovely Tuesday emergency pod. And Sachs Jason Calacanis (00:01:20): retired from Craft Ventures to pursue his dream of being a Fox News host. How is that going for his acts now that you've got full media blitz? David Sacks (00:01:30): Well, yeah, I've been I've been invited. I was on Bloomberg. I invited on CNBC tomorrow. I might even be on Fox on Thursday. So everybody maybe Tucker. Everybody wants a piece of the bestie. Everybody wants a piece. Jason Calacanis (00:01:44): Unbelievable. We're pariahs in our own industry, and now we've transcended tech Speaker 3 (00:01:50): taken our rightful position got invited on CNN, Jason Calacanis (00:01:54): which is crazy. Chamath Palihapitiya (00:01:55): On what show? On what show? Jason Calacanis (00:01:56): The guy with the British accent, he he kinda does -- Pierce Morgan? No. There's another guy who does CNN International. They were doing, like, a whole Chamath Palihapitiya (00:02:05): Oh, that guy. Yeah. Yeah. Yeah. Yeah. You know the guy with the glasses? He's funny. Jason Calacanis (00:02:08): He's pretty funny. Yeah. I I didn't do it. I really do not want to speak for Robinhood, but we do need to pick up where we left off in episode 19, which a lot of people were wondering, Chamath, are we still friends? Speaker 1 (00:02:24): Are we Chamath Palihapitiya (00:02:25): still besties? we are. But I I do wanna say one thing. Jason and I talked this weekend, and he said something to me, which I actually thought about a lot. which is that, h Chamath, when you get that emotional, you know, I think the the point of what you're saying gets lost. And I had I had a lot of time to think about that, So one, I wanted to say, Jake, out. If if anything I said, you know, hurt your feelings. I wanna say I'm sorry. I think you are the most incredibly loyal person, and that, you know, spans friendship to being an investor too. So I just wanted to say I'm sorry to you. And to be quite honest with you, when I when I listened to a couple of my comments, I was like, wow. You know, I was a little emotional. And I think it didn't need to be that super extreme. I think, you know, the thing that it touches for me is, like, I forget sometimes maybe where I'm at today, and I go back to where I was 20 years ago or how I felt as a sixteen year old, and I channeled that a little bit. So, anyways, Jake, I just wanna say I love you with all my hard I Jason Calacanis (00:03:28): I love you too, Chamath. And, you know, it it did get a little bit personal, and we are all passionate about, you know, our positions. And, you know, it it was a little difficult for me because I'm trying to give my guys my team or Robinhood the benefit of the doubt And it wasn't an easy week, obviously, to do that. But just to to recap here, Sunday Vlad was on clubhouse with Elon Musk, our pal. who almost blew up clubhouse. And there were so many people trying to get into that room, and I think it tops out at 5000 on clubhouse that people were holding their phones up to their YouTube accounts. I think that's probably how most of us listened to it was the YouTube people were just syndicating it live to YouTube. But Elon did a tremendous job interviewing Vlad, which is leads to a really interesting topic, David, about subjects just routing around the press and going directly. I mean, Elon is now the best interviewer in the business. And he basically said, listen, did you have a gun to your head? And I think It was pretty much that. According to the reports that have come out, the depository and trust and clearing corporation, which is Wall Street's mean clearing house for stock trades, demand $3,000,000,000 in addition to collateral from Robinhood, which they said was an order of magnitude more than usually required We all know they raised 2,400,000,000 this week on top of the 1,000,000,000 from Wednesday on top of the $600,000,000 credit line. That's 4,000,000,000 in cash. Apparently, the requirement for them went from 3000000000 to 700,000,000. So it seems like that's there's some equaling out of what they have to cover. And the GME short interest dropped in half. Today, it's Monday. I'm sorry. It's Tuesday, but yesterday, it had dropped in half. The squeeze seems to have settled down. Jason Calacanis (00:05:14): Wall Street bats is clearly 1. And, of course, episode Speaker 1 (00:05:18): -- Chamath Palihapitiya (00:05:19): Did Jason did Speaker 1 (00:05:20): -- Jason Calacanis (00:05:20): Supernova. Chamath Palihapitiya (00:05:21): I I I didn't listen to it, but did do you guys think that Elon and Vlad got to the truth? Like, was it clear -- Saks? Jason Calacanis (00:05:29): Well, let's get an independent party here, Saks. David Sacks (00:05:30): Yeah. So I I thought the the interview was was a bit curious because it it it took Elon several tries to get Vlad to say the the quite frankly, the obvious answer. Elon set it up saying, you know, what what I think all of us were thinking which is, look, were you either forced to do this or is it an action that you decided to take? And if so, why? And, you know, and and and Elon kept trying to get him to say, yeah. We were forced to do this, and Vlad wouldn't quite say that. He gave these very vague and biggest answers, which is why Elon finally said, listen. Did you have a gun to your head or not blink twice? You know? Yeah. And so it was I don't know whether it was a function of miscommunication or whether we just don't know all the facts yet. But I don't feel like the interview put everything to rest the way that it easily could have. And and I and look. I I don't wanna be I don't wanna pile on to the situation. I you know, I'm I'm pro founder. I'm gonna give Vlad and Robinhood, the benefit of the doubt here, I think probably they were compelled in some way to do this. I don't think they wanted to do it. But know, if we're gonna make this a teaching moment, what I would say is, like to any founder, if you're ever in the position of having to take an action that is a nimical to your stated mission. Right? And their stated mission is freedom to trade. Jason Calacanis (00:06:56): What was the word you used? Animical? David Sacks (00:06:58): Animical. Anathema. Sure. Yeah. If if you're gonna basically violate your stated mission, you either need to post the government order that required you to do that. or you need to post a very well reasoned blog explaining why you're doing that. And, you know, if I were Robin Hood and I got a call in the middle of the night, saying that you have to basically take this trade offline. I would say, well, give that to me in writing because I'm gonna have to post that on my website. Right? If I don't have a choice about that, I, you know, I need to be able to refer back to this industry order that I'm receiving. And the fact they didn't do that and the fact that they didn't post a blog explaining the reasons behind the choice. And in fact, Vlad's now had to go back three times to explain it. I think that's created this world of problems for them. David Friedberg (00:07:43): There's a difference between this being a regulatory requirement and a commercial requirement. Jason Calacanis (00:07:49): Correct. David Friedberg (00:07:49): Like, if you think about the you know, the the the law the the regulatory body that oversees the law that that that kind of oversees what they're doing, business wise, the SEC or whomever could have come in and said, here's the here's what I'm telling you you have to do on your regulator. But what happened was there are there are these clearing firms that they partner with that said, I need you to post more capital. And rather than post more capital or take the risk of going bankrupt, they said we are gonna restrict trading to minimize the capital requirements that we have on our book. so if you think about what that decision comes down to, it's a decision of either our customers are gonna lose money or we're gonna lose money. And and I know that it's not that black and white, but, you know, it's very difficult to kind of explain the nuance of what took place there But it really was a point of, like, we are gonna lose money or we are gonna go bankrupt or our customers are gonna have to lose money. And that's such a tough decision. I can't imagine any executive, any of us being in that situation. And deciding do you protect your shareholders? Do you protect your customers? And how much do you let your shareholders lose? How much do you let your customers lose? And it was a very complicated situation that they found themselves in because their business model was predicated on this clearing, you know, on this model that they ran that when suddenly a lot of risk came on the book, they didn't have the capital to cover it. and and they had to basically, you know, limit their their customers as a result. It was a pretty ugly situation. David Sacks (00:09:18): But but, David well, can I just say one thing? I I think that if the choice is simply between you losing money, you the company or your customers or your lose your users losing money, I think that's an easy choice. I think the company eats it. Look what Airbnb did during COVID. Right? When they had a whole ton of cancellations because of COVID, they ate that the they ate all those deposits. They made good on that. And I actually think if that's all that was involved, that was a big mistake. I think Robinhood shoulda eaten it. Jason Calacanis (00:09:47): Jamati, you wanna chime in here as we go around Chamath Palihapitiya (00:09:49): the horn? Look. I think here's what we've learned, which is that there's all kinds of ways in which this financial infrastructure works that none of us really understand. Mhmm. It turns out that it may have also included the people running Robinhood, to be quite honest. Yep. And so, you know, we know what payment for order flow is now. We know that, you know, some companies like public have completely issued it. you know, folks like Robinhood make a ton of money from it. I think it's clear that, you know, Elizabeth Warren, to AOC, to whomever are gonna now spend a bunch of time talking about it. It may or may not change. But before the problem with the whole situation of GameStop actually doesn't really surround that because it's more of a symptom. The real problem was what led up to it. And what led up to it was, you know, the insistence that A bunch of organizations needed access to a preferential set of data so that they could theoretically participate in that order flow before And the second was that the rules for, you know, certain organizations are different than those for banks. And so, you know, hedge funds can leverage themselves up to such a massive degree that you create that, you know, LTCM type of issue where, you know, you should take 5,000,000,000 and all of a sudden you have 1,500,000,000,000. So that that that shouldn't happen. Right? So we need to figure out how we can actually deal with those systemic issues upstream. And then we need to have better disclosure downstream so that consumers could choose. Hey. Listen. If you want, you know, PFO, by the way, as I've learned in the last couple days, payment for order flow is actually not necessarily such a bad thing in certain cases because it actually guarantees better price execution. In some cases, but that's not always true for options. I think it's somewhat more true for stocks. There are you know, for example, like, Jason, when you asked me, you know, I asked the team at SoFi like, you know, what's the how much how much is how much is made on payment for order flow, and the answer was Speaker 1 (00:11:46): $1,500,000. Chamath Palihapitiya (00:11:48): And the forecast for next year was, like, 400 k. So that's materially different than $400,000,000. Right? So you can start to figure out, like, okay. How should we think about these problems? And I think that's what we have to face. We have to get answers to these questions now. Jason Calacanis (00:12:02): Yeah. There's definitely gonna be a lot of investigations into this. And thinking it through, I think there are kind of 3 possibilities here. When you when we analyze this, now that we're a week out from it, I think, all going down, which is was there poor communications or other non disclosures in place? Right? We're trying to figure that out with Robinhood. It feels like there's both. Right? They're they're could very well be non disclosures with this private company, the DTCC. I mean, obviously, they could have optimized communications. And then Was this a black swan event or to your point is it poor preparedness, Jamoth? We have to figure that out of how prepared are these companies to deal with this kind of stuff. And then is it really bad optics that sit at Dell and all these people are involved? Or is it a a grand conspiracy? And then if there's gonna be an investigation, it's gonna be pretty hard to cover up any conspiracy. Right? Can can I offer one idea? I think that there are certain Chamath Palihapitiya (00:12:56): there are certain parts of the economy or, you know, the way in which the world works where you you can't distinguish, you know, bad operational capability and black swan events. I'll give you an example, airplanes. There is just no situation where you can say a plane crash was a black swan event and you move on. Right? And we we decided that a long time ago. And so as a result, just the amount of risk management and compliance so high that every time something like that happens, it's it's an enormous process, and we've seen that in the 737 thing for Boeing. Speaker 1 (00:13:34): 7 37 Jason Calacanis (00:13:34): max. By the way, they could just got settled too for just Speaker 1 (00:13:36): 2,500,000,000, Jason Calacanis (00:13:38): which is kinda crazy. Those planes are back on, and nobody went to jail. Chamath Palihapitiya (00:13:41): Right. So that that's an example. At the other end of the example, you know, we have things that have happened like on Facebook and Twitter and Instagram and Snapchat, which is like hey, all of a sudden, like, you know, certain kinds of content or certain things happened like the Christchurch mass shooting. The the the societal judgment there was that that was a black one event. You know, we don't need rules and regulations. And so I think that another important question that we have to ask is, is the financial plumbing that, you know, sort of allows the capital markets to work and specifically the financial plumbing that allows retail normal folks to participate in order to try to make money and get ahead, should that be deemed more like what you said, Jason, black swan like infrastructure where it's like sometimes shit happens and we move on, or is it more like an airplane crashing where you say none of this stuff should be allowed to happen? David Sacks (00:14:29): Can can I can I add one one more point to that, which is I I think that it's frankly spin to be trying to characterize concerns about what happened a conspiracy theory. You know? I heard Vlad use that word, and, Jason, now you're you're echoing the company's talking points. The reason this is not a conspiracy is because Citadel is on both sides of the trade. It's a conflict of interest. We should be using the word conflict, not conspiracy. Now the question is, do we interpret that conflict of interest? You have company you have Citadel providing payment for order flow, so they're basically executing Robinhood's trades. They're their biggest customer. And at the same time, they're moving in, and they're backing up citron and Melvin. So they're on both sides of this trade. How does that work? How can we not have questions about that? And to then characterize that, oh, it's a conspiracy theory. If you have questions about it, really? Jason Calacanis (00:15:29): No. No. I'm totally fine with people having investigating if there is a conspiracy, right, and the conspiracy that people were floating is Robinhood was told to stop trading these stocks by Citadel. that did not happen. If that did happen, that would be explosive and impossible to cover up. What it was is this is d CTCC have some influence or does Citadel have influence on the DTCC? You know, that those are the questions that Chamath Palihapitiya (00:15:54): I think remain unanswered. the DTCC is a is a cooperative, so it's a collection of its member organizations. So by so I think what we'll we'll we'll find out which organizations were part of DTCC, who made the decision? Who then told Robinhood? You know, we'll also find out, by the way, who put in the money to Robinhood? you know, did they have a direct beneficial interest in them having these DTCC make that decision? And so I think where David's right is, like, imagine this conflict of interest. I now let's just use me as an example, I as social capital, I am buying their order flow, I am also a member of the cooperative, also backstopping their investment. And now all of a sudden, you would say, Chamath, your hands are way too messy here. Right? Like, your your fingers are in a lot of pots. And how do I know what, you know, exploding message on signal wasn't sent? Jason Calacanis (00:16:49): You don't know. You don't know. David Sacks (00:16:51): Yeah. All all all all we do know is that you had all these insiders. Right? You had You had Citadel. You had, you know, this industry consortium. Whether it's the collective or Citadel individually, they were under pressure by the industry. And at the same time, you had these outsiders, you had these Reddit kids who had basically taken them for $20,000,000,000. Right? They had finally figured out a way to beat the insiders at their own game. And just at the moment that these outsiders were winning and about to deliver the coup de grace and bust these guys out of the business for good, somehow the insiders manage to tip the board over and start a new game. That is what people are reacting to. And look. I mean, You know, I I I'm not saying that. I I don't know why Vlad would have done it unless he was frankly forced to do it. Right? Because why would he? So I'm not blaming him, but there is something fundamentally very corrupt at the way that the system and these insiders who have all the power and all the money when they finally got threatened they basically figured out a way to turn the board over at the outsiders. Chamath Palihapitiya (00:17:54): By the way, the the other thing that isn't getting covered, and this is gonna be the tragedy of this is None of us really knows the cost of the $3,400,000,000 that they took in. I'll tell you the only group of people that are for sure going to get completely creamed in this, which are employees. Right? I mean, we know that Speaker 1 (00:18:12): -- -- Jason Calacanis (00:18:13): you think they're gonna get too much preference stack? David Friedberg (00:18:15): because they got they got diluted. Chamath Palihapitiya (00:18:16): Oh my gosh. I mean, how do you not put 3 do you put $3,400,000,000 in at par? Who would do that for you? Jason Calacanis (00:18:22): I think that's what's exactly happened. I don't have inside information. But I that's exactly what happened. Yeah. That's my guess. Chamath Palihapitiya (00:18:28): I mean, if -- I think Jason Calacanis (00:18:28): that or perhaps a discount to the IPO, which is imminent from what I've been reading online. David Friedberg (00:18:34): Yeah. Talk about terrible timing too. Right? I mean, they were trying to go public this year. Mike. Or like this Speaker 1 (00:18:38): -- Jason Calacanis (00:18:38): Maybe terrible timing or maybe perfect timing. I mean, it may be that Chamath Palihapitiya (00:18:41): Jason, if it turns out that they were able to I mean, then it then it creates a whole host of issues, which is how stupid are these investors. But if if that is in fact what happened because you look at the, for example, the the pound of flesh that, you know, Silver Lake got out of Airbnb. What a brilliant trait? I mean, so like, there was one organization -- Explain it to you. -- looking. David Friedberg (00:18:59): That that was my deal of the year from last year from our from our bestie awards. Jason Calacanis (00:19:02): Yeah. Go ahead. Explain it, Friedberg. David Friedberg (00:19:04): Yeah. they put in debt, and then they got warrants, and and the warrants end up making them, like, Speaker 1 (00:19:08): 4 4 David Friedberg (00:19:09): x. It's insane. They made they made, like, Speaker 1 (00:19:11): 3, $4,000,000,000. Jason Calacanis (00:19:12): Right. But the company's worth over a 100,000,000,000 now. So as as downside protection during a pandemic that could have gone on for 3 years -- No. Chamath Palihapitiya (00:19:19): No. No. But that's the whole point. If you think about the if you think about the trade of the great financial crisis, there was Warren Buffett putting capital into Goldman Sachs, which David Friedberg (00:19:26): was -- And and Swiss 3. He did the 6th deal. Yeah. He did 5,000,000,000 into each of them the same weekend. Chamath Palihapitiya (00:19:32): Exactly. And he said, hey, guys. Everything is fine. These guys are going to be fine. They're backed by by Berkshire, and it turned out everything was fine. And know, he made an incredible fortune. And I think, I mean, on top of his already fortune. So the point is he made a great trade. I think that in the in the Silver Lake example, they did the exact same thing. They were like, hey, guys. We believe in this. Everything's gonna be fine. And when all of us were literally losing our mind because we were stuck in our apartments and houses thinking the world was gonna end. Silver Lake saw they had clarity. they did a deal which was the trade of the year. David's right. And so similarly, you would have thought that this moment was the opportunity for the trade of the year of 2021. I mean, we're early on. But -- All Jason Calacanis (00:20:13): I know is I've been getting increasing offers for my Robinhood shares in the secondary market throughout two questions here. We have been having a hard time understanding who short what the short interest is. There's a bunch of, like, data companies that are providing estimates, and maybe the data is only clear. Chamath Palihapitiya (00:20:32): Best you're right. The best source of data that I have access to is a company called market, markit. they're they're they're they're quite large. But as of this Friday, the short interest was still, I think, about 50% in GameStop. And so it's been it's been ebbing down. I didn't check today. Jason Calacanis (00:20:51): Well, the the report was it got cut in half again and that there was a very small short interest now. David Friedberg (00:20:58): But the stock dropped another 60% today. So, obviously, if you're short the stock, you may start buying and and take your profit and your gains and going home at this point. Jason Calacanis (00:21:06): And moving on. So do we need to is this gonna start a discussion of transparency and shorting, and should all that information be short? Should you be allowed to short more than the shares that are available or that are available in the flow? Chamath Palihapitiya (00:21:19): I think -- And should we readdress shorting in general? No. There's a sim there's an even I think shorting is a healthy component of the market, and I wouldn't I would leave it alone because there I think there are some legitimate organizations that short for 3 reasons. Reason number 1 is that they are developing a market neutral strategy for their clients, and people are should be allowed to pay for them. Right? Number Speaker 1 (00:21:40): 2 Chamath Palihapitiya (00:21:41): is people are directionally betting on a trend or investing on a trend, and they are trading that against potentially some other position where they are long. So that's an explicit view less about being market neutral. And then the third is that some people see outright frauds, and they're trying to vote loudly that, hey. Listen. There's something untoward happening here. So I think shorting is really good. I actually think the simpler solution and list and tell me if you guys agree is just go to t plus 0 settlement. Why? All these margin requirements go away altogether. The prob the reason why we have all these margin requirements is all of a sudden you have weird 20 48 hour period that, you know, it's like, oh, wait. Who's got the shares? Do I have the shares? No. Do you have the shares? So they Did I lend them to you? Did you lend them to me? Are you gonna pay me first? Am I gonna pay you first? And instead, you know, this is the kind of thing where it's like in 2021, this should be real time and automatic. David Friedberg (00:22:29): Yeah. We know. Every share should be every share should be ID'd. Right? Boom. And then you should know exactly where it is. Boom. You know, by the way, there there's another point that there's another point that Chemak didn't make, which is that there is a benefit to the long holders and equities when there is shorting of that equity in the market, which is that they're getting paid borrow on those shares. So for folks that don't realize or their broker is, but you can access that borrow. If you own shares in a company that you're gonna keep holding, let's say you own some shares in Amazon, and someone else wants to short Amazon. They have to borrow those shares from someone, and they're paying a fee, an interest rate, to borrow those shares And so the cost to short a stock is actually not 0. You have to pay a borrow to borrow someone else's shares. So if you're holding those shares in Amazon, you can actually make money if you have the appropriate broker relationship for those shares being sold short by someone else. And so this isn't just a people are coming in the market and slamming down stocks. They are paying the people that are along the stock for the right to borrow their shares and and and sell them ahead of, you know, buying them back later. And so in the case of GameStop, I think the cost to borrow got so high that you're basically paying 30, 40, 50, 60 percent, you know, interest rate to borrow GameStop shares to sell them short because there is so much interest in selling short. But there, you know, there is a market dynamic in in the cost to sell short that, you know, that doesn't come at a at a at a kind of negligible or free cost. Chamath Palihapitiya (00:23:56): The my initial my introduction to Shorting in that example was when I first bought Tesla that you know, my broker said, you know, Chamath, if you lend your shares out, you can make 24% I remember this conversation, 24% to your interest. Jason Calacanis (00:24:11): Right. Chamath Palihapitiya (00:24:12): And I thought, oh my god. And then I said, well, what what am I really doing? And he's like, well, you're allowing people to bet against Tesla. And I said, no. And I just kept the shares, and I was like, I'm never gonna allow people to borrow. And since then, to be clear, I've never I've never ever ever allowed my shares to be borrowed. Ever. And it's just a philosophical decision. I don't like shorting, but I believe that you should be allowed to do it. David Friedberg (00:24:36): if you're gonna be a long holder anyway, you're saying I'm gonna hold these shares for 5 years, 10 years, whatever Speaker 1 (00:24:40): -- Chamath Palihapitiya (00:24:41): I just David Friedberg (00:24:41): need to wait. -- to juice your returns. It's kinda it's it's how a lot of people think especially mutual funds that own large positions and stocks, they'll they'll make really good juice returns because they're getting paid to to borrowers. You know? Chamath Palihapitiya (00:24:52): It gets even better if you're if you're running a levered book because then, you know -- Right. Speaker 1 (00:24:55): -- Chamath Palihapitiya (00:24:55): you take a buck, you spin it up to 6 bucks, you buy 6 bucks at Tesla, now all of a sudden you're earning 24 percent on 6 shares even though you've notionally bought 1 share. David Friedberg (00:25:03): Right. Chamath Palihapitiya (00:25:03): I've still never done it. I can't I can't bring myself to do it. I just feel like it's just so I just can't do it. Just like it's like, how can you be long and then bet against your own company, I guess? Jason Calacanis (00:25:14): Well, yeah, it doesn't make sense. But Shamal I'm sorry. Saks, should we limit the amount of shares that can go short against a company in some way? And should we add a transparency where if you short more than x percentage of those shares, we know you're short position because that seems to be Also very confusing here. There are people speculating on Twitter that the Wall Street bets crew, and I have no knowledge of this, or other hedge funds came in and saw this mess And that what we've seen in the last couple of days where other people's shorting at 300 or it could have even been the same traders or some portion of the traders who ran this up with the short squeeze then flipped their position from long to short. David Sacks (00:25:53): Yeah. I look. I I clearly, we need more transparency. We need to resolve some of these conflicts of interest prevent them from happening. I think a lot of the the users of Robinhood didn't understand that they were the product, not the customer. that that is a real issue. But let me let me kinda uplevel this and speak to the politics of this because something really interesting happened. You had everybody from AOC to Ted Cruz, basically denouncing what happened here, taking the side of Wall Street bets against these Wall Street mobiles. And so what you're seeing now is a new fault line in American politics in the post Trump era. It's not just about left and right anymore. It's about insider versus outsider. And I think this is gonna be a major major theme that we see And let me actually I wanna I wanna share something. You know, I I just wrote a a a blog post called the insider's game about this idea. And I found a passage in Elizabeth Warren Elizabeth Warren's book, which is really interesting because it describes how the insider's game works. And the person who described it to to Warren is Speaker 1 (00:26:58): -- Chamath Palihapitiya (00:26:58): Larry Summers. David Sacks (00:26:59): No. No. Yeah. None of the the Larry Summers who was the former treasury secretary under Obama. He was president of Harvard. He's the consummate insider, and he taught the insiders game to generations of Harvard students. So here's what he said. He he presented Warren with a choice. He said to to her well, she she said, I could be an insider or I could be an outsider. This is from her memoir in 2014, a fighting chance. She she wrote outsider quoting Larry's numbers. outsiders can say whatever they want but people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas, people, powerful people, listen to what they have to say. But insiders also understand one unbreakable rule. They don't criticize other insiders. That is the insiders game. It's a protection racket where these powerful insiders, these powerful elites of Wall Street, of big business, big media, and politics they get together, and they protect each other no matter how incompetent they are, how corrupt they Speaker 2 (00:28:05): are. Chamath Palihapitiya (00:28:06): Silicon Valley? David Sacks (00:28:07): Silicon Valley, they're involved in this too, but big tech. And this is the revolution I think that's gonna happen. I think Trump was kind of a a forerunner of that is that we are gonna see a movement of people across this country who are sick and tired of the insiders game, and they're gonna is up and vote these insiders out of office and put in some new people who aren't beholden to these powerful special interests. David Friedberg (00:28:31): What you're speaking to is populism. Right, sex? David Sacks (00:28:34): You can call it populism. I call it insiders versus outsiders. Chamath Palihapitiya (00:28:39): I think it's it's going to be very important for folks to not be a career anything, meaning career executive, career politician, career regulator, career, what if if ever you're in sort of like if you can put that word in front of your sort of existence, I think what people will see as someone who as you said thrives on being an insider. And I think that there's just gonna be a ton of distrust, career school administration official, career admissions person. career or anything now is not what you wanna be. You wanna be sort of a little bit more dynamic because you can have multiple arcs to your life, and you're not beholden to anybody. David Friedberg (00:29:18): I mean, I think it's a it's not as black and white as institutions are bad or institutions are good. I there are there are many examples where the institutional framework allows for continuity and performance over time. You know, a lot of Trump's rhetoric Oh, and I, you know, I I know that we're we're past the Trump there at this point, but there there was a lot of conversation about this notion of a deep state because there was frustration with how some or or many of these institutions government institutions were operating. But if not for that, the state, we may have found ourselves in a lot of very ugly situations over the last 4 years that there really were layers and layers of career public servants that did incredible and incredibly heroic things to preserve democracy, to preserve the rights that we all hold dear in the constitution, And those were, you know, really important roles, and the institution played a really important role in in in providing continuity and providing trust and and and security. And so I I think it's easy to bash institutions when things aren't working perfectly, but we also have keep in mind that it's not that all institutions are always bad. It is absolutely true that there is corruption, but there are certainly benefits that we have to kinda not not allow populism to become a runaway framework for how we deal with everything we're frustrated with. Chamath Palihapitiya (00:30:37): I'm not saying that. I think I think what I'm saying is institutions are critically important. But now I think we have to change the rules for how you can be a part of them and then how long you could stay. So for example, like, if the rule was, you know, you can only be a 2 term politician. Wow. That would be what a cleansing effect that would have on anybody that chose to serve in politics. up and down the board, you know, at the federal level, at the state level, two terms in and out. David Friedberg (00:31:03): California Calacanis has that. You know, we have a Speaker 1 (00:31:05): 12 David Friedberg (00:31:05): year limit. in the the state assembly and senate. And so, you know, I think we're seeing that happen in progressive places like California. you know, obviously, a good segue. But very I I think very much agree that the that the notion that there needs to be You know, we talked about this last time. We need to ensure that the institutions don't become beholden to special interests. And and that there isn't accountability. because because the failure the the the lack of accountability is really where things bloat over time because you just add stuff on. You don't ever take stuff apart, and and, ultimately, you have kind of in a net non functioning institution. Chamath Palihapitiya (00:31:46): So let me give you the report card on California, and then we can figure out If term limits can't fix it, what can fix it? So here here's just some some data points. First, I'll do one section first section number 1, economy and jobs. nearly the highest unemployment rate in the US at 8% plus, highest poverty rate in the US, 18 a half percent of all Californians, highest income taxes in the US, 13.3 percent. Speaker 1 (00:32:08): $30,000,000,000 Chamath Palihapitiya (00:32:09): of potential fraudulent unemployment benefits from Speaker 1 (00:32:12): 2020, 11,000,000,000 Chamath Palihapitiya (00:32:14): already determined fraudulent, double the double the oil and gas drilling permits instead of incentivizing, you know, maybe climate or biotech or tech jobs, a Speaker 1 (00:32:24): $227,000,000,000 Chamath Palihapitiya (00:32:26): spending pan bending plan for 2021 in terms of quality of life, highest homelessness in the country, worse graduation rate in the around 17% of students in California don't graduate. The worst slash highest cost of living in the country and the worst wildfires in the country, 1,800,000 plus acres burned. On COVID 19, 3rd highest rate of COVID 19 in the world, 658 cases per hundred thousand people, and then the worst vaccination deployment in the US around 50%. And then culturally, I didn't know this. I don't know if you guys know this, but Here are the number of companies. This is just a subset that have left California, Toyota, Charles Schwab, Tesla, and Oracle. in some way, shape, or form, which is estimated now to have cost California Speaker 1 (00:33:10): $77,000,000,000 Chamath Palihapitiya (00:33:12): of future revenues and 300,000 jobs. Over the past few years, nearly 3 million people have left the state. 53% of Californians want to leave the state, and 63% of Californians believe the American dream is dead. Okay. So if let's let's go and figure out. Okay. So if if if term limits At 12 years, don't work. What do we do? David Sacks (00:33:34): Well, I think I think we have to have politicians who stand up to special interests and aren't in the pocket of special interests. I mean, the problem we have in California, the biggest problem. The reason why California is such a mess is that we have government of the special interests by the special interests for the special interests. I mean, the politicians in Sacramento, they we have a 1 party state effectively. and they are beholden completely to these special interests. Look at the deals they make. I mean, so example, in California, we have over 340,000 public employees who make over a Speaker 1 (00:34:08): $100,000 David Sacks (00:34:10): a year that cost taxpayers over Speaker 1 (00:34:11): 45,000,000,000. David Sacks (00:34:13): Okay? And, you know, we have lifeguards making a quarter $1,000,000 a year. It's crazy. Right? I mean, because the the people making these deals are are in the pocket of these of these government unions. They are the biggest contributors to California politicians. And, you know, this is my fundamental, I guess, concern or or or beef with with Gavin Newsom. is that, you know, fundamentally, you know, he's worked his way up the the ladder of California Politics by, you know, by basically benefiting from these special interests. Throughout his rise, you know, you step by step, he's never challenged the insiders. or any special interests. He just kinda caters to this political class. And so that's why I think fundamentally, he's not gonna be part of the solution. It just feels like every job he's had in politics is just a stepping stone to the get to the next step. And even the governorship now is just a stepping stone to get whatever's next. And I think, you know, California's are tired of being stepped on in this way. David Friedberg (00:35:19): There's I mean, there are some structural challenges in the state. Right? Guys, I mean, like, we should not for forget the fact that there are some voter mandated supported propositions that have passed over the last couple of decades that really create a structural challenge in terms of how do you allocate resources and capital, and how can you effectively govern in the state. You know, the the 3 that are often highlighted is Prop 13, which passed in 1978, which is the state property tax limits. We've talked about that 1, I believe, in the past. There was a proposition 4 in 1979 that limits the amount of money that states can appropriate, that the state can appropriate, and then Prop 98, which passed in 1988, and this is the big one. Prop Speaker 1 (00:36:08): 98 David Friedberg (00:36:09): has been challenged in courts, and there there have been, you know, many, many kind of efforts at finding loopholes and getting around it and and litigating it. But it mandates funding levels in the state from pre k through community colleges. And it creates a a structure that is really difficult to navigate around and really difficult to operate or manage. It's almost as if you guys were running a a private company And your board said, here's how much you as the CEO have to spend this year, and here's how you have to spend it. It is such a difficult decision you know, for the for the governor to have to kinda say, well, you know, I'm gonna make some changes to that because he'll end up in court. And so, you know, I wanna just kinda highlight that there there are structural challenges to the way the state operates. And, obviously, to get a lot of things done, you still have to pass through the state assembly and the state senate And it's not as as simple as making, you know, better decisions than the governor's mansion. I think there's a there's a lot that we have to kinda resolve structurally in the state, it's gonna take a long freaking time and a lot of cooperating parties to get there. And so, you know, I know for those of us who are very much about making fast, quick, and accurate decisions, you know, good decisions. This is a really difficult place to do that this state. The way the way the laws have been set up and and the way that that the legislature has oversight. David Sacks (00:37:28): Well, I mean, look. You're you're right, but this is why we need real leadership. We need somebody who's gonna come forward and say, listen. We need to change this proposition. Another one we need to change is prop 47 that decriminalized a whole bunch of behavior. I mean, crime is exploding in the state. That proposition needs to be looked at as well. Right. I mean, we we need somebody who's gonna come at government from a completely different perspective, which is to think about the citizens of California, first of all, to pay attention to the middle class of California and to think about us as consumers of government services who need to be satisfied. And right now, we have if you were to think about the services governments providing, people are churning off of it. We had net immigration of a Speaker 1 (00:38:11): 135,000 David Sacks (00:38:12): people, net left the state. Right? You know, 40,000 families in California pay about half the taxes. If say 10,000 of them leave, we've got a giant hole in the budget that no one knows how to replace, and we have no idea how many people have even left. How many families have left the state? So we really need leadership here to to not just go along with the special interests who are empowering and who are willing to stand up and and push for some of these these reforms. David Friedberg (00:38:40): By the way, I think it's worth just highlighting some of these numbers because they they also speak to the structural challenge in the state. state of California generates about a Speaker 1 (00:38:48): $140,000,000,000 David Friedberg (00:38:49): in revenue. 70% of that comes from personal income tax. And as Saks pointed out, half of that comes from the top Speaker 1 (00:38:55): 1% David Friedberg (00:38:56): or 40,000 households. It is a it is a, you know, a heavy weighting on and by the way, that that top tax rate of 13.3 percent applies to households over a $1,000,000 of income. And for those that don't know, you know, there's income strata that are defined by the state. And depending on what strata you end, you you you pay a different tax rate. The highest strata is making over a $1,000,000 a year where you pay 13.3 percent. and that's where these 40,000 households cover most of that budget. And 20% to sales and use tax and 10% is corporate tax. To speak to the corporate tax rate for a second, you know, that's 10% of our revenue as a state. We charge a 9% average corporate tax rate in the state to operate. that's incredibly high. And it's one of the reasons besides kind of the challenge that that Elon and others kind of made very public here over the past year, But that that corporate tax rate makes it very difficult to operate in the state relative to other states that are offering no tax rate lower employ lower cost of of labor and less of a regulatory burden to operate. And it's why we're seeing an just of people from the state because the services are obviously not being well managed, but also of businesses, you know, finding a better place to operate. Chamath Palihapitiya (00:40:10): In in Canada, there is an approach that I think is really useful here, which is that, you know, the Canadian government offers credits called shred credits. I I can't remember if it's at the federal level, but it's definitely in the state of Ontario because I've used this for for some of our companies. You hire engineers, and you can basically capitalize their salary, and you can offset their costs so that when you're a young company, you're effectively playing 0 tax. Or if you're a small company, you effectively pay 0 tax. And that seems really right. You know? Where you're a small business person and, you know, you're holding you know, 510 employees and you're making, you know, a million bucks a year in revenue, whether you're a restaurant or a software company, you basically pay nothing. But then at the other end of the spectrum, you know, when those credits when those credits burn off, theoretically, if you're a Facebook or a Google or an Amazon, now all of a sudden, know, you can pay a much larger percentage of of of what to do. And I I think that there's all kinds of progressive tax schemes that work on the corporate side. There's a bunch of tax credits that you can use to sort of incentivize certain kinds of jobs. And I I I think you're just much better off because then, you know, these companies can't leave if all the people wanna stay in one place. David Friedberg (00:41:24): I wanna highlight one more structural problem. So even if you do resolve that, even if you do resolve these propositions that have passed that have passed in the past and are causing us problems in terms of budgeting and and and ability to budget adequately going forward, One of the other challenge and and even if you do resolve the tax structure to generate a more balanced revenue model that allows for innovation and allows for employment, allows for opportunity, We have a a this is an interesting stat I found this week. How what what how many Americans I'll just say the number. Speaker 1 (00:41:56): 1 David Friedberg (00:41:56): out of 9 Californians are a member of a public pension fund in the state of California, 1 out of 9. And the public pension funds in California as of the last reporting are roughly Speaker 1 (00:42:08): $250,000,000,000 David Friedberg (00:42:10): underfunded. relative to the payment obligations they have to their members. Think about that for a second. So not only does the state have a lot of debt, we've got a $250,000,000,000 hole for paying people money that they believe they're owed in the future. And that is creating a massive problem where the state needs to figure out how do we fill that hole? How do we meet these obligations to our citizens who worked, who earned what they believe to be a fair income stream for the rest of their lives that they may not ever get. You know? And so so we we've got both this the the the legislative problem in terms of how the state is structured. We've got these propositions that have passed that kind of you know, buckle down the governor and buckle down the decision makers in terms of what they can and can't do legally. We've got an income generation problem with respect to concentration. And we've got some of these, you know, heavy burdens on us like help its services, but also this underfund attention liability that is almost like such a priority and no one's really paying attention to it because the sirens are going off. And meanwhile, the service providers in the state are completely effing up the service that they're supposed to be providing. know, Timov highlighted a bunch of great ones in terms of fire response and whatnot at the beginning. And, obviously, the vaccine rollout, we know it's it's it's just completely flawed. But, you know, here here's another interesting stat. The California EDD, this is the the link I just sent out, by the way, on our on our Zoom Chamath. But there's a Speaker 1 (00:43:27): $114,000,000,000, David Friedberg (00:43:29): and employment claims paid since COVID. This is an insane statistic, but it looks like roughly 27% or Speaker 1 (00:43:36): $30,000,000,000 David Friedberg (00:43:37): of fraudulent claims were paid. by the EDD on those unemployment claims. So the folks that are actually running these institutions themselves aren't even operating well you know, not to mention the actual huge liabilities the state has accrued over the years and the structural deficiencies. So as much as I would love to you know, kind of propose that we could all come up with a simple solution. This is a complex frigging set of problems that probably require several books to resolve I just want us to be honest and real about that that this is, you know, this is gonna be a challenging issue probably for decades to come for this state to get itself out of the holes it's dug into. Chamath Palihapitiya (00:44:12): You know, one thing I'll say is as goes California, so goes every other state and so goes America. Because if there is one state that theoretically, you think would have been positioned from a human capital perspective to figure these out and political will? It's this state. And if this state can't figure it out, we're in a whole fucked out of trouble. David Sacks (00:44:30): Well, we're we're we're not doing a very good job figuring it out right now. That's why we need to make a change. I mean, David, you're right about the magnitude of the problems and the challenges, but it all starts with some sort of, you know, outside a rebellion, and that's what's going on with this recall. That's why we have to support it. That's why I support it. It's not gonna be the end of the the it's not the it's the beginning of the solution, not Jason Calacanis (00:44:50): the end Chamath Palihapitiya (00:44:50): of the solution. -- the beginning. David Sacks (00:44:51): The beginning it's the beginning of the beginning. David Friedberg (00:44:53): But we need to create an institution to solve the problems over time. Right? It's it it's gonna be it's gonna be the coalescence of what you're pointing out, Zach, which is the the the, you know, the the the will of strong a will of the the rebellion to figure this out and and resolve David Sacks (00:45:06): the pot. The the institution may be the all in pot, but but But but let me let me rebuild already. Yeah. But let me let me build on yeah. I would actually, Jake, how you posted a tweet saying what should we call our party? And Anyway, my session was the Jason Calacanis (00:45:21): outsider prize. Party? David Sacks (00:45:23): Yeah. Surprise party. Citrus. But let me let me build let me build on on Friedberg point about the pensions. Okay? Where did these giant underfunded pension obligations come from? because I think this is a really important point to explain. So here's what what basically happens. If you're a government worker in California, you could typically retire after 20 years with all of your benefits and and and not just a 100% of your salary, but the the salary you made in your last year. And so what happens is When people get to that 20 year mark, they get a lot of overtime. And so that's why we've seen articles about people retiring, you know, after you know, if you're retiring after 20 years, you could be forties. Okay? Speaker 3 (00:46:04): Well, wait. Once you get Jason Calacanis (00:46:06): half pay for your pension, so they double up their overtime. They get to 250 k, then they get a pension of Speaker 1 (00:46:11): 125. Jason Calacanis (00:46:12): You don't get your full salary every time you get David Sacks (00:46:13): your accent. There's a there's a complicated formula, but the point is you can stuff it with overtime, and it's very generous. And then they can go because they're still in their forties, they can go get a another government job somewhere else and then stack that pension on top. And then by the way, it doesn't just last until they die, but it lasts until their spouse dies. So now there was a proposal years ago to move this whole system to, like, a 401k type of system, and it was squashed by who, the unions, and Newsom opposed it because, you know, he doesn't do anything that the unions don't want. And so we have these completely unsustainable pension liabilities. Everybody can see this train wreck coming, but nobody has the guts to stand up the unions and do something. Jason Calacanis (00:46:56): I mean, there's very few careers that still offer pensions. Even the New York Times, you know, over a decade ago got rid of their pension because people lived too long. They retired too early. And then the cost of health care is just so ginormous here that it's gonna crush any pension fund. So you have to move to a 401 k, and we're we're It's kinda hard to say to a cop or a firefighter who's running into a burning building or putting themselves in in harm's way that they don't get one because it's such a high risk job. But we really do need to think of something more reasonable like a 401k, and that's coming from my entire family is, you know, cops and firefighters and of service in New York City, and they all have pensions. And you are right, David. There is a tradition of trying to get a little extra overtime because they average out usually, your last 3 or 4 years to give your average salary the to base your pension off of them. And then, of course, you can do another job or go work go from a firefighter to a cop, vice versa, garbage, sanitation worker to get those things. We didn't talk about the nimbyism and how extraordinarily hard it is to build homes here and how extremely expensive it is. A lot of the young people who are thinking of coming to California are looking at the housing prices. They wanna come here to start companies. They love the California vibe, but the the housing is a nonstarter. You can't live in the peninsula or anywhere in the the wider Bay area unless you are, you know, a dual household income with what? Speaker 1 (00:48:22): 4 100, 500, $600,000 Chamath Palihapitiya (00:48:24): minimum. Minimum. Jason Calacanis (00:48:25): Minimum. Minimum. And that's not even counting private school, but you're you're talking about where are their sub $1,000,000 homes within the proximity of the Bay Area? They don't exist. You go to Austin, and I've been looking at Austin Real Estate just coincidentally. And there are many homes that are $300,000 that are $400 a Square Foot everywhere within 30, 40 minutes of downtown Austin, and that's where young people are going. And then finally, if we look at our to to law and order, David, we are not treating fentanyl like the super drug it is. You know, it it's one thing to have drug reform and to have prison reform. We we know these are important, but you can keep that in your mind that we want to make a more just legal system while at the same time not allowing people to deal fentanyl. And if you just type into Google, fentanyl versus heroin lethal dose and click on the image search, you will see 2 vials, and it's a very famous photo where there's like, you know, a pinch of you know, heroin. That's the lethal dose. And then in the other vial, there are like 7 grains of fentanyl, and that's the lethal dose. And we are conflating a homeless problem with a super drug. David Sacks (00:49:43): Yeah. Can I can I can I add to that? So Speaker 1 (00:49:44): -- David Sacks (00:49:45): Yes, please. So So, you know, I was on the side of decriminalizing cannabis, and I think that there were and I think that there we we overcharged too many people for drug crimes when they were just users and should have been in treatment, and that's why I think there's been a a reaction against over incarceration. And I understand that. But I agree with you that fentanyl is in a separate category. It is this super drug. And here's the problem. It is so powerful. It is so addictive. It is so destructive. Nobody can hold down a job and get off that drug once they start once they start taking it. I mean, it's just game over. So they end up living in the streets and turning to crime and petty theft to support their habit. And that's the situation we're in today. And we have this growing mass this massive numbers of people living in the streets addicted to this super drug. And we gotta stop it. We gotta get tough on this because it's just you know, Right now, the the the the the solution that our our DA seems to be pushing, whether it's gas going to LA or Chase and Booty in San Francisco, is they're just not prosecuting anything? You know? We had prop 47 downgrade a whole bunch of property felonies to misdemeanors, and now the DA is not prosecuting the misdemeanors. So they basically just decriminalize burglary. And so you've got all these, you know, drug addicts living on the streets committing these crimes, and they need to be in treatment. So I think part of what we need to do here I actually think this is a big investment California is to make. We need giant treatment centers to address this problem. And if somebody gets caught committing a crime and they they're they're addicted to drugs, I I don't wanna send them to jail, but I would make them go to treatment. Jason Calacanis (00:51:23): We have to think about true compassion. True compassion for somebody who is addicted to fentanyl is getting them off the street and getting them into a rehab program or giving them the choice of going to jail for the crimes they may have committed so that there is this pressure to go into treatment Just to give you a stat, in 1999, we had, like, 18,000 overdoses. We're now over 70,000. And if you look just in San Francisco. We're talking four or 5 times the number of overdose deaths to COVID deaths. This is a level of human suffering just makes no sense. And it's such a nuanced discussion. Right? You can't you can you have to be able to hold into your brain that cannabis you know, psychedelics, MDMA, psilocybin, a Speaker 1 (00:52:06): 1 Speaker 9 (00:52:06): year class of drug. Chamath Palihapitiya (00:52:07): You have a log list, Jason. I have Speaker 9 (00:52:08): a log list here of the drummer. Have your own drug Chamath Palihapitiya (00:52:11): that you ought to be recreational. Jason Calacanis (00:52:12): Here are the drugs I'm a fan of. Good. Speaker 9 (00:52:14): Here are Jason Calacanis (00:52:14): the drugs that I don't take bad. No. Fentanyl, I I think you just have to look at the the chance of recovery and the chance of addiction, and fentanyl and heroin are just tragedies. Tradges, and you Chamath Palihapitiya (00:52:26): don't -- You have to you have we also have to, like, have the courage to actually not look at just the symptom. Like, I think treatment centers are a great idea. I think not sending people to jail is, like, an obvious idea I also think if you take two or three steps back and you think about what are the 2 things that send people off the rails? Number 1, I think is lack of a job And then number 2 is a lack of mental health resources. You put those 2 things together. It's you're done. It's like it's like kindling and it's like kerosene and a match all in one, and boom it goes. And, you know, we didn't need to know that answer because you saw that over the last decade building up in the rust belt. So we knew that that was the those are the boundary conditions for this. So how do you get people back to work? How do you actually give cement? You know, the the crazy thing about Reagan, I mean, we all forget, but Reagan was the one that defunded all of the mental health institutions, you know, when he was governor of California and sent all these folks billing into Yes. Jason Calacanis (00:53:20): Well, think about how many jobs that would create if we brought back, you know, psychiatric facilities and made them free. This is where if we look at health care, not having a national health care program, especially for mental health, is costing us more on the other side when we comes to suicide. your point, Chamath Palihapitiya (00:53:37): like, etcetera. If we're gonna spend money and if we're gonna be in debt, be in debt for the right reasons. Like, sure, find a way to be accountable and transparently spend money. That's fine. Spending money is fine. Government should not be for profit. You know, government should I don't even think government should be breaking even. I think that government should be generally running at a loss And then the net GDP, as long as that's positive and accretive, we're doing right as a society. Right? So government should be doing the things that that they need to do for people to have an even starting But David Friedberg (00:54:06): I just wanna yeah. Go ahead. Sorry, Tamara. Chamath Palihapitiya (00:54:08): No. I was just gonna say that that's where we get it wrong because, like, we, you know, we we we like pat ourselves on the back when a government turns a surplus And then, you know, we, like, explode when a government runs a deficit. Instead, they're managing to the political theater of a number instead of really understand how to run a business. David Friedberg (00:54:24): But I just wanna be clear, like, the entire premise of how that is run and how we think about this from an economic point of view, is that we have to have GDP growth. And if you don't have GDP growth, the whole formula fails. So let's just break this down in a simple way. If I'm working and I'm making $60 a year, I can take out some credit card debt knowing that I'm gonna make an extra 10% next year in 10% the year after. If I know my income's gonna climb, I can afford to take on some debt, which means spending more than I'm making right now because I know that in the future, I'll be making more than today, and I'll be able to pay down that debt. And so the whole premise of how we run government is we should run at a deficit. We should accrue debt. we should build infrastructure. But in order for that work to work, I have to increase my tax revenue in the future. And there's two ways to do that. Raise taxes, or see significant GDP growth. And if you raise taxes, you suffer the problem that California may be suffering now, which is very high net worth people leaving the state, which is gonna cause a collapse in the revenue stream and the whole system fails. If you want GDP growth, well, you have to kind of enable the system to allow for GDP growth. which means reducing taxes and growing housing. But the problem is the life that people wanna live doesn't necessarily mean that we need to have. And so this goes back to the housing question. Do we need to have more business growth in the state? Therefore, do we need to reduce tax rates to encourage business growth And by doing so, we have to also build more housing. And the reason people wanna build more housing is because they wanna see more business here. And the whole premise is kind of flawed, if at the end of the day getting more business here means you also have to lower tax rates and cause all this problem. Chamath Palihapitiya (00:56:11): It's also how you have community, and it's also how you have diversity. Like, nobody wants to live in a monoculture where everybody's really, really poor or everybody's really, really rich. I grew up. It's so sickening. I grew up in a place where everybody was really, really poor. I now live in a place where everybody is really, really rich, and the monoculture sucks. And instead what you want is you wanna transitions. You want people moving up. You want people moving down. You want the hard luck story. You want the god lucky story. You want it all. And this is this is where we've lost it. I'm gonna ask you a question, Frebert. are you saying that if forty thousand people left California, we would blow a $70,000,000,000 hole in the budget? David Friedberg (00:56:53): No. We would we would blow a yeah. About 40,000 count for half the income tax. So it's about 35 percent of 140. Yeah. So we would we would blow a 50, $60,000,000,000 hole in the budget. 40,000 people. Speaker 1 (00:57:07): 40,000. Chamath Palihapitiya (00:57:08): Yeah. Out of 60,000,000. 40,000 homes. 40,000 homes out of Speaker 1 (00:57:12): 60,000,000. 40,000,000. Speaker 9 (00:57:13): Out of Speaker 1 (00:57:13): 40,000,000. David Friedberg (00:57:14): Yeah. Yeah. 40,000 -- The similar thing happened Jason Calacanis (00:57:17): to New Jersey in Connecticut when they had everybody moving down to Florida. And so this is not unprecedented. It's especially with hedge funds and really high taxpayers. You know? David Friedberg (00:57:26): But what I'm yeah. What what I'm asking is is there a better way where you don't have to depend on GDP growth to balance your budget and to provide the social services you wanna provide to the state. David Sacks (00:57:35): You know? Of course of course not yet. It all it all starts with having a healthy economy. me. I mean, always. Right? Because that that's what generates the the prosperity to pay for all the social programs. David Friedberg (00:57:46): And -- It's to pay ahead of the curve. Right? That's my point. is, like, we're always paying ahead of the curve, which forces us to find GDP growth, which is how we get stuck in these cycles and these problems. And this is true not just of the state, but of nations as well, and the US faces this and and others. But by by spending ahead of the curve, by creating infrastructure, by creating social services, by setting up these pension obligations, the only way to get out of the debt you've just taken on is to grow. And that creates all of the make problems and ultimately lead to populism and all of these kind of frameworks for failure that are gonna ultimately end. Here's here's an idea. David Sacks (00:58:19): No. No. No. No. No. Hold on. Kaisko disagree with that. Look. Yeah. Growth is a precondition for everything else that's good. Okay? Growth growth needs to be managed. okay, but it doesn't growth is not the problem here. The problem is a set of policies that are actually killing growth and driving entrepreneurs and innovators out of the state. We saw Elon Musk leave the state why he said that California was starting to take its successor granted, and it had been winning too long. Okay? California needs to realize it's in a highly competitive situation now. And because of COVID, you can work from anywhere. And Austin has become a tech hub, and Miami's become a tech hub, and those states have no income tax. And we have politicians in California just keep raising taxes as if as if we're not competing at these other states where we are, and people are leaving. We're seeing a mass exit here. We've gotta realize that we can't raise tax rates beyond the point where people are willing to bear them. Jason Calacanis (00:59:13): This is the this is your, I think, your best point, David, is that what the great pause did was it let people reassess their lives. How many people do we know who either left the state, changed job, you know, broke up with the spouse, whatever it is. People reassessed everything in their life. And what people uniformly came to was Why am I paying this much and getting this little in the Bay Area in California when I could get twice as much, 3 basically three times as much in Austin or Miami and not pay this amount of taxes, and be happier. And that is an existential problem for the Bay Area. If, you know, this is not just Elon Musk, or Larry Ellison in Oracle, it's also rank and file developers, and the developers don't need to be in the office. So you could have this massive middle leave too that nobody anticipates. And if all the developers, then you know what? I wanna be on the Reno side of Lake Tahoe. You know? I wanna be in Austin or wherever. I'm paying less taxes, and I'm making the same money, and I got a better quality of life. Chamath Palihapitiya (01:00:16): What do you guys think happens, though? Jay Cal, what do you what happens to California or Connecticut or New Jersey and what happens to Florida. Just tell me Jason Calacanis (01:00:26): what happens. I think it's a I think it's a death spiral for New York and for California where unless the representatives in government start to represent the people who are voting and living there, and voting their interests as opposed to the special interests. To David's point about the insiders, we have disconnected what the citizens of California want from what the government officials are providing. They're just not in sync. They're basically cow towing to teachers' unions or special interests and not the people who are building companies or just people living here. People wanna build housing and they won't let them. You can't build apartments in Palo Alto or, you know, anywhere in the city. I mean, this is crazy. David Sacks (01:01:08): You're right. And the the only middle gonna be left in California pretty soon. Our government workers. I mean, that's it. That's the only people are gonna be making over a Speaker 1 (01:01:16): $100,000 David Sacks (01:01:17): a year. in California are the government workers because everyone who's middle class who's running a business is just is finding it too difficult. And too difficult to earn with the the level of taxation that's run their business, and they're leaving. Regulation, and they're leaving. Jason Calacanis (01:01:33): I mean, just think about the regulation issues of doing any real world I mean, you've done construction in San Francisco. We've had businesses that are real world businesses with storefronts. It's it's jumping over hurdle after hurdle after hurdle Speaker 1 (01:01:46): -- Jason Calacanis (01:01:46): I have an idea. -- shutdown. It's brutal. Chamath Palihapitiya (01:01:48): What if whenever you started a company in California, you got you know, 3 or 4 years worth of tax credits for engineers in return for 1% of the equity that California was not allowed to sell. Jason Calacanis (01:02:01): Sure. I mean, some equity upside would be great. David Sacks (01:02:04): I have an idea. Shamal, how about you run for governor? Speaker 9 (01:02:07): Yeah. Shamab. That's a personal idea. Jason Calacanis (01:02:09): Why don't you Speaker 1 (01:02:10): -- David Friedberg (01:02:10): Isn't that why we're doing the emergency pod? Chamath Palihapitiya (01:02:12): Saks. Saks. Saks. I think you should run. Jason Calacanis (01:02:14): We'll be right behind you. David Friedberg (01:02:16): Have we disparaged you too much, or has this been too difficult? Chamath Palihapitiya (01:02:18): I am. Let me let speaking of politics, though, I do I do need to tell the story. This is a complete complete non sequitor. In 2012, 12 or 13, I can't remember which year. Mike Bloomberg invites a bunch of us from technology to to the White House correspondent center. We're like, yes. The White House correspondent center. David Friedberg (01:02:38): Did you go? Chamath Palihapitiya (01:02:39): Of course, I went once here. So -- My gosh. Speaker 1 (01:02:41): -- Chamath Palihapitiya (01:02:41): you know, myself, Ian Osborne, Jose Raman, the founder of Jawbone. And I have two amazing stories about this my experience at the White House correspondent center. Number 1 well, three. Number 1 is like the dinner itself is kind of like a prom just because there's just so many people. Right? And so, you know, you have to have a rubber chicken dinner because there's just like a thousand people in the room. But the second was that Ella McPherson was there, and I've never seen more incredible hair in my life. Just I have this image of this person's hair, and it was, like, the thickest Like, it was, like, curly, but, like, it looks so soft. And after this, this is the most incredible hair I've ever seen. I Jason Calacanis (01:03:21): think those are called tensions are a wing, but go ahead. Chamath Palihapitiya (01:03:24): It didn't look like that. It looked like real hair, but it just it looked incredible. Like like a lion, like the man of a lion. And then the third story is I we're we're in a reception. There's an after party at the French ambassador's place. I start talking to this person randomly like, all these stars everywhere, but I just start talking to this to this person and, you know, she she's she's very chatty, and I'm chatty, chatty, chatty, blah blah blah blah. We're talking talking And then at the end of this, like, sort of, like, 5 minute conversation, and we had not really introduced each other. She just kinda said, hey. And I said, hi. And so we started talking She says to me, do you mind if we take a picture? And I'm like, Jeff, of course. And I and I and I had no idea what was coming. So I was like, so we take a picture. And she seers to me and she says, you know, I think you're really fantastic in Parks And Recreation. Oh my lord. Jason Calacanis (01:04:17): And I thought so hard, Jamal. Chamath Palihapitiya (01:04:19): Thought? I was a z's. I'm sorry. Jesus Christ. How does this happen? Jason Calacanis (01:04:25): At least she didn't Speaker 9 (01:04:26): call you Ercol. I mean -- Oh my gosh. Jason Calacanis (01:04:28): That was her second choice. Chamath Palihapitiya (01:04:30): Oh my gosh. I love you in parts and rec. Anyways, that's my that's my interaction with politics. David Friedberg (01:04:35): I think you're ready for politics because you just avoided the question. No. No. No. Look. Chamath Palihapitiya (01:04:40): Let let let's let's let's be really honest. Like, I I'm not ready to to do any of that. I what I need to do is I need to figure out, you know, a, my business and where it's going. And then b, I do think it's worth figuring out what are the conflict of interest laws and what do you have to do if if all of this were to come to pass because I could not make a credible decision unless I knew that because I I just have things that I wanna do. And that that to me are the most important things. Like, I'll really honest with you. Like, I'm working on something in batteries that I think is it's important for a lot of places much, you know, more than just California. And so, like, if I have to abandon this battery project, I wouldn't do it. You know? Just that simple. So I gotta figure that out. David Friedberg (01:05:20): And you gotta write down all the illegal things you've done on a piece paper and all the illegal things you're doing on a daily basis, and then we gotta make sure Do Jason Calacanis (01:05:26): you have a mayor? Do you have a case of Moleskins? because I could start for Tremont. I could start filling that in. David Friedberg (01:05:31): They're never gonna get uncovered. Speaker 9 (01:05:33): Yeah. The Oppo research has begun. David Friedberg (01:05:36): Right. Right. That's the that's what the dinner on Thursday should be about. and start the outbound research program. Speaker 9 (01:05:41): Oh my gosh. That's a that's Chamath Palihapitiya (01:05:43): a that's a long program. David Friedberg (01:05:46): But there's certainly there's certainly a groundswell in interest right, Saxon? There's certainly Speaker 1 (01:05:49): -- David Sacks (01:05:49): Oh, yeah. David Friedberg (01:05:50): It's crazy. Like, I think I think Shamab has a lot of folks that that love his passion and the way he speaks to them, and that's you know, he has a real sense for what I think people are feeling and can speak to that and obviously has experience and kind of making decisions and allocating resources. Right? So, you know, I think there's a lot of interest, Jamath, and a lot of drive to see you -- Here's here's what David Sacks (01:06:12): I'll say. Speaker 1 (01:06:13): -- David Friedberg (01:06:13): shit or Chamath Palihapitiya (01:06:13): get off the pond. Here's what I'll say. Here's what I'll say. I've grown up with nothing and getting to the other side I'm completely convinced that poverty is a disease that it is except in this disease, it is systematically reinforced. You know what I mean? So Jason, stop Speaker 9 (01:06:40): that, Jason. The fucking talking job is good. Yeah. Chamath Palihapitiya (01:06:44): And I would like to say, Jason Calacanis (01:06:46): all Americans and the citizens of California David Friedberg (01:06:49): came from nothing. Jason Calacanis (01:06:50): I came from fry now. I would eat rice 3 days a week, and then I would eat the plate the other Speaker 1 (01:06:55): 4. Chamath Palihapitiya (01:06:56): By the way, the the the the the reality is that if if I were to do it, if, like, all the checks came back and it seemed like it was a plausible thing, I would only do it for the 18 months and just kind of You know? But you'd have to get elected on a mandate where it was so clear that it's like all of California wanted these 5 or 6 laws to pass. Like, I think it's, like, You're not running a candidate. You're running a platform. So it doesn't matter who it is. You know, whoever goes in, it it could be me, but it could be frankly Kim Kardashian or The Rock or David Sax, I think what's really important is we should get alignment on a handful of laws that change the trajectory of the state. And the reason why that's important is if those laws can pass and the state turns around, then that's the road map for the other 40 9 states. And I think that's a big deal. That's a really big deal. David Friedberg (01:07:39): I think it's about a getting adoption of a playbook Speaker 1 (01:07:41): a a David Friedberg (01:07:41): playbook a playbook to fix California. And if that playbook is something that a group of people from different parties and different backgrounds can coalesce around, and, you know, publish that playbook in a way that's easily understood and Chamath Palihapitiya (01:07:53): and you could take it and run it. Let's let's Jason Calacanis (01:07:55): just pick what our top item would be. For me, it's the building of multifamily unit housing, I think, would be in my top 3. What's in your top 3, Zach? David Sacks (01:08:06): Well, if if if I were to write a a met a a a sort of catchphrase for for a campaign It it it would not be make make California great again, but it would be something more like tough and tolerant because that's what I think California So tolerant on LGBTQ rights, you know, tolerant towards people of different nationalities towards immigration, you know, tolerant on social issues, but I think what California's really want now is tough on crime, tough on hard drugs. negotiate tougher deals with these unions and special interests who are just pillaging the state. We and then, you know and frankly, tougher on the politicians because they're making it too tough on the people to, you know, to to live and to run their businesses. And, you know, we need to make it easier on the people and tougher on the politicians. Jason Calacanis (01:09:01): Freeburg, what do you got in your top 3 items? If you if we if we could only put 3 items on the docket, you know, 1, 2, and Speaker 1 (01:09:08): 3. Jason Calacanis (01:09:08): I think from creating much more affordable housing through multifamily, you know, going up as opposed to building out and just allowing, you know, anybody who wants to add a couple of stories, add a couple of stories, and just more housing would lower the price of housing. And maybe we have to change you know, the taxation and maybe reevaluate the value of homes? because right now, you buy a home in 1970 for 50 k. You're paying 1% of that for the rest of your life, right, which then makes it impossible to move. And you got two people living in Five Thousand Five bedroom Square Foot Home. because they can't move because their tax basis is so low on it. Right? What do you got, Friedberg? David Friedberg (01:09:48): I mean, look, the challenge is with any one of these things you have to balance it. It's like we talked about last time. You know, we talked about adding a transaction tax to to trading on markets, but you also have to get rid of the capital gains tax. Right? If you're gonna get rid of that, you know, that that proposition that locks in the property tax rate I I think it's prop 13. Right, Saks? If you're gonna get rid of prop 13, you've gotta phase it out over time. But to create the opportunity on the other side, which means how create more affordable housing at the same time that you get rid of prop 13. You've got to enable, as you pointed out, the ability for more rapid housing to be developed and dropping regulatory constraints and maybe removing some of the union pricing and some of the work that gets done and the supply chain and so on. And so, you know, I I think it's about the the balance trade off amongst these things. You know, if we're gonna talk about trying to keep the the top 40,000 households in California, and you're gonna drop the tax rate on them to keep them here, which is an extremely controversial anti populist move and and, you know, right now. you'd have to find another way to kind of resolve resolve that gap or at the same time kind of reduce the cost of our top cost is education. So you need education reform, Our second top cost is health care and and and and other related services and and how you resolve that. That there's a lot of structural things in there. It's probably a checklist of 10 things. that you would say, let's go negotiate better prescription drug prices. Let's make, you know, the services more efficient, meaning how many patients does a doctor get to see per hour per day per year, per week, whatever. There's all these things that you kinda go through, and you could make each one of those dollars that are being spent more efficient. So as much as I'd love to kinda rattle it up to 3 different things, This is a management problem. And, you know, as as those of us who have run businesses that are struggling or challenged have experienced, there isn't one thing to do to fix a a problem when something is not operating well, but you really it really does come down to talent. David Friedberg (01:11:43): And so, you know, I would think that the people that are sitting in those assembly and senate seats need to be the right people, and the person sitting in the governor's mansion needs to be the right person who will surround him or herself with the right people who are operators and leaders who know how to resolve these problems and go through and do just like that guy did and Dave with the napkin and, you know, write out look. Here's the ten simple things we can do to HHS, and here's the 10 simple things we can do to fix higher education and go in and cut half the expense. And if you cut half the expense, you have a lot of things you can start to do. And so, yeah, I I I I don't have a simple answer for you, Jakeel, but I think it comes down to balance. Would you say Jason Calacanis (01:12:20): school voucher since you brought education are the quickest solution there is to create more competition quickly by giving parents the ability to take their voucher and go to whatever school they want. David Friedberg (01:12:28): I'll be honest. I haven't read enough on school batches to know the the ramifications of the program programs that have been proposed. So I'm not gonna be very well very thoughtful in that. David Sacks (01:12:37): Well, I'll I'll I'll I'll speak in favor of the idea of giving parents more choice. I mean, these schools are being are they being run for the students or for the special interests because right now, the parents don't really get any choice. I mean, look. If we can recall the governor can't we why can't the parents of a school recall the headmaster? I mean, why don't we give them the ability to circulate a petition if they're unhappy I think in the case of the governor recall, if we get 12% of voters to sign the recall petition, then you get a recall election. So what if you had a a system where the parents of a school could sign a petition? And then they vote. And if the majority of a parent Speaker 1 (01:13:16): -- -- 10%. David Sacks (01:13:17): If they're yeah. I mean, majority of the parents vote to recall a school, then they can basically replace the headmaster and and run it in a different way. Why shouldn't they have that choice? It's crazy to me. With your pay for who's Speaker 1 (01:13:27): -- Jason Calacanis (01:13:27): That's what Speaker 1 (01:13:28): -- David Friedberg (01:13:28): Yeah. Yeah. David Sacks (01:13:28): Yeah. And but but but yeah. Let me give you let me give you a little math I just did on my on my calculator here. So the average student in California cost $18,000 a year roughly. Okay? And we have a classroom size on average of about 25 students. It's actually higher than that average. So you multiply 18,000 by 25. That's Speaker 1 (01:13:49): $450,000 David Sacks (01:13:51): per classroom. Okay. Now how much does a teacher cost? I mean okay. Jason Calacanis (01:13:55): No. That's the average in California for teachers. It's -- Right. David Sacks (01:13:59): But let let let let's let's say let's say that we paid teachers a extremely well. Let's say we paid the teachers a 100,000 a year because we all believe in having great teachers. Okay? That would still leave $350,000 left to over. And remember, you don't have the real estate cost. Right? The state already owns all these schools. So where is the money going? Chamath Palihapitiya (01:14:18): We systematically entrenched poverty. I think that what happened to you, Friedberg or Sacks or me or Jay Cal, I don't think it's possible anymore. And I think that we are aberrations, and I think that folks that are younger than us would look at us. And they look at us, I think, in part because they're like, god, I I would love to have that shot And I don't think they know where to start. And I think they also see a system that feels very much rigged against them. Jason Calacanis (01:14:42): So -- -- by Bitcoin. I mean, this is why they're attracted to buying Bitcoin. or doing what they did with GameStop? And why Wall Street Chamath Palihapitiya (01:14:48): Insiders versus outsiders. Jason Calacanis (01:14:49): They feel like they have this opportunity to show the man, and they don't that's why they don't wanna take on school I mean, I I don't blame millennials for being disgruntled. If they got a 100 or 200 k in debt, And they were told this degree would get them you know, this should be their ticket. And it was it's a lot been disconnected. Chamath Palihapitiya (01:15:07): It's a lot. It's a it's a great lie. It's a great lie. And so -- That's a Jason Calacanis (01:15:10): big lie. Yeah. Chamath Palihapitiya (01:15:11): That's that's one of the big lies. And and I think we're sacrificing it now because, like, you know, we're we're we're making this great sacrifice because we're exposing these lies to be exactly as they are. So, I mean, if you if I had to pick a couple things, Jaikal, I would say the most important thing for me is school vouchers tied to like, I would increase public school salaries. You pick your number. I don't really care what it is. A $100. A Speaker 1 (01:15:35): $125. Chamath Palihapitiya (01:15:37): But you need to tie it to school vouchers so that any parent can put their kid into the best school that is for them. Jason Calacanis (01:15:44): or start their own school. Like, there needs to be a competition. Like, if 5 parents get together and they each get an e t 18 k voucher, they can spend a 100,000 on a teacher to teach 5 students. And if they hit their goals, like, they're gonna do better. What what 5 parents? Even the you know, the most disadvantaged parents would take advantage of this. Chamath Palihapitiya (01:16:04): To me, that would be the that's, like, the first above all else because I think it creates accountability. And it it allows our kids to have a decent shot. The second thing I would probably do is I would actually just cut all taxes to 0 on the personal side, but I would introduce a progressive taxation system for corporate And I would try some of these novel things like getting equity in turn for in turn for credits and allowing folks to capitalize certain expenses. I mean, These are like I I know people think that's also stupid, but, like, you know, if all we did was just own 1% of Apple Google Facebook, you'd have Speaker 1 (01:16:33): $3,000,000,000,000. $4,000,000,000,000,000,000 Chamath Palihapitiya (01:16:37): with a t. You know what I mean? Well, not not you that's $4,000,000,000,000 in the market cap, but you know you know what I'm trying to say. Like, if you control 1% of that, it goes a long way. So there's that. And then I do think that there's something that we need to do for people to be able to live. I remember interviewing somebody. And, you know, he's what he said to me just made me so sad. He's like, I you know, he drives an hour a half into work every day and then drives an hour and a half home. And I was like, how how how is this possible? And and I just thought to myself, like, what does that do to you and your family? He goes, I don't see my family. And and I'm like, well, can't can't we just increase your salary? And, you know, that's not possible because of the job that he had. And then he couldn't afford to live. And so All these things just build up in the system. So those would be my 3 things. David Sacks (01:17:24): It sounds like we have a bestie platform. Chamath Palihapitiya (01:17:27): Bestie. David Sacks (01:17:28): We we we need to figure out who the best candidates gonna be. Hopefully, we can convince Tremoth to do it. But the next thing but the first thing we gotta do is we gotta make sure recall happens. There's another 5 weeks or so to gather signatures. So everybody should check out the website. It's rescuecalifornia org. trescuecalifornia.org. If you have the means to donate, please do. I donated $50,000 to it. They are taking donations. And even if you're out of state but believe in this cause, like Shamas said, what happens in California or as California goes, so goes to the nation, you know, it would be a really good thing to send a message even if you're out of state to these special interests who are ruining the state this isn't gonna be tolerated because every politician in the country is gonna hear that, and they're gonna start realizing, oh, I can't just pay attention to the insiders. I need to start paying attention to the outsiders to the majority of citizens who've never been organized before, but now they are getting organized. And so we need to send this message That is the first step. We're not gonna get any positive change in this state until the politicians are held accountable, and this recalls the the starting point for that. Jason Calacanis (01:18:39): And if you take a picture with the form and cc your besties, we'll follow you back or retweet you or like you saw combination of that. I saw a couple of people did it after the last pod. So print out the form and go ahead and take the picture Chamath Palihapitiya (01:18:52): and cc it. The next podcast, just for everybody to know, episode Speaker 1 (01:19:00): 21, Chamath Palihapitiya (01:19:01): we are gonna start by reading mean tweets. There have been some there have been some unbelievably vicious tweets targeted. You typically, at Jason, and then and then at me, a little bit of David Sacks. But, finally -- Really? They went after the queen? We've broken the seal, and the queen has been targeted. Really? He was called he was called sanctimonious. He was called sanctimonious on Twitter. We are gonna make him read his tweet tweet to kick off episode Speaker 1 (01:19:29): 21. Jason Calacanis (01:19:30): And we will see you all next time Chamath Palihapitiya (01:19:32): on the all in podcast. Love you, guys. Speaker 2 (01:19:36): year winner's ride. Jason Calacanis (01:19:38): Rainman, David Sachs. Speaker 4 (01:19:43): We opened so said to the fans, and they've just gone crazy like that. Speaker 2 (01:19:52): on air when they're trying. Besty's our dog. Don't hurt to death. That is my dog's we should all just get a have one big huge order because they're all just useless. It's like it's like sexual tension that we just need to release somehow. Speaker 9 (01:20:14): What? You're the b p What? David Sacks (01:20:16): You're a thief. Speaker 9 (01:20:18): What? Where did Speaker 3 (01:20:20): you get Murphy's arm back?