E30: Ramifications of Biden's proposed capital gains tax hike, federal budget, India's COVID surge, founder psychology & more

Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Referenced in the show: Federal Net Outlays as Percent of GDP https://fred.stlouisfed.org/series/FYONGDA188S Wayback Machine / WhiteHouse.gov https://web.archive.org/web/20010118204900/http://www1.whitehouse.gov Reuters https://www.reuters.com/business/healthcare-pharmaceuticals/india-posts-daily-rise-over-300000-covid-19-cases-record-death-toll-2021-04-22 Show Notes: 0:00 Intro 1:19 Biden's capital gains tax hike 21:33 Addressing the federal budget problems 42:16 Chauvin verdict, media coverage 50:06 Hulu WeWork documentary, Founder psychology 59:46 COVID surge in India 1:11:01 Poor media performance in 2021

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Jason Calacanis?

  Shout out to

• 0:03Jason Calacanis?

  a company Sax and I

• 0:04David Friedberg?

  What the hell are you doing?

• 0:05Jason Calacanis?

  What are you doing? What the fuck are you doing?

• 0:07David Friedberg?

  No, fuck it, wait. Nick, Nick, cut that shit out. Cut that shit out.

• 0:12Chamath Palihapitiya?

  Shut the fuck up. Beat that shit out.

• 0:14Jason Calacanis?

  I just wanted to give a founder a plug.

• 0:16Chamath Palihapitiya?

  You are such a scumbag.

• 0:17David Friedberg?

  What the fuck?

• 0:18Chamath Palihapitiya?

  Despite how tired I am, I've woken up now. Now I'm awake. You've awakened the drug.

• 0:22David Friedberg?

  I'm done. I quit.

• 0:23David Sacks?

  I'll give a shout out to which just got acquired by

• 0:27Jason Calacanis?

  Oh, my God.

• 0:29David Friedberg?

  Shut the fuck up.

• 0:30Jason Calacanis?

  We're needing plugs.

• 0:33David Sacks?

  Let your winners ride. Rain Man David.

• 0:40David Sacks?

  And it said, we open source it to the fans and they've just gone crazy with it.

• 0:44Jason Calacanis?

  Love you guys.

• 0:44David Sacks?

  I'm the queen of Kinoa.

• 0:49Jason Calacanis?

  Hey, everybody. Welcome to the All In Podcast. I'm Jason Calacanis. With us today, the Rain Man himself calling in from an undisclosed location, the Queen of Kinoa, and of course, the dictator himself, Chamath Palihapitiya. All right, boys. How are we doing?

• 1:06David Friedberg?

  Feel flow energy today. What's going on?

• 1:07Chamath Palihapitiya?

  Great. How are you?

• 1:09David Friedberg?

  What's going on?

• 1:09Chamath Palihapitiya?

  Let's go. Let's do this. I love this. I love it. Let's go.

• 1:13Jason Calacanis?

  You love it? All right. You're hot. You're coming in hot.

• 1:16Chamath Palihapitiya?

  Yeah.

• 1:17Jason Calacanis?

  Breaking news. Breaking news. Biden has announced his capital gains tax hike. I don't think this impacts any of us, but Biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20% to not 25, not 28, 39.6% to help pay for the social spending and inequality for those earning 1 million or more. So, nobody on this call. Federal tax rates could be as high as 43.4%. The capital gains increase would raise 370 billion over a decade. Yada, yada. For New Yorkers, the combined state and federal capital gains rate could be as high

• 2:02Jason Calacanis?

  as 52.22% and Californians, 56.7%. Biden has previously warned that those earning over 400,000 can expect to pay more in taxes. This was just breaking news a couple of hours before we started the pod and the stock market is down and people are freaking out.

• 2:25David Sacks?

  Well, Jake, I want to hear your take on this, actually.

• 2:29Jason Calacanis?

  Why didn't you tell me Biden was gonna do this? I would have voted for Trump. You didn't tell me this is gonna hit me so hard.

• 2:36David Sacks?

  Jake, Jake, I was ranting on this topic 15 minutes ago. We were talking and I'm like, dummy, what did you think was gonna happen? You know? He's sitting there going off. He's sitting there going off. It's like, what did you expect?

• 2:49David Friedberg?

  Just before we get into it, we should do a quick primer on what this means, right? So capital gains taxes are the taxes you pay when you make an investment and you sell that investment at a profit. You pay a tax on the profit you make. And there's a difference between capital gains on the short term, which means less than one year and long term, which means you've had the investment for more than a year. So economic policy historically has dictated that having a low capital gains tax rate relative to what, you know, an income tax rate might make, it might be incentivizes people to make long-term investments and it, you know, gets more money moving in the economy. And as a result, um, you know, the economy will grow. And so the idea of increasing the long-term capital gains tax from 20%, which it currently

• 3:31David Friedberg?

  is to 40%, um, is a real striking, you know, economic policy shift rationalized as, you know, we're gonna save, uh, you know, we're gonna use this money for social spending. But I think the historical context and what this is, is really important as we get into the conversation. Um, and just speaking historically, you know, the, the, the maximum tax rate on long-term capital gains got up to 40%. Sax, you probably have the history on this in 1978 for a year, right? Or like 76 to 78. And then it's been largely, you know, 15 to 20% for the last 20 years or so. Um, and so to jump up, yeah. And prior to that, in the early part of the 20th century, it was like 25% pretty consistently for a long time.

• 4:13David Friedberg?

  So to jump up to 40% is a really big shift and the, there's a lot of debate around the economic implications of doing this. Uh, I thought that was important. Yeah.

• 4:21Chamath Palihapitiya?

  Let's take a step back and actually see the forest from the trees. And the forest from the trees is that I don't think Biden, um, Thinks that it's a credible plan in as much as I probably think he needs, you know, this is like it's performative because it was a lot larger, the number, the headline number was a lot larger than what people were whispering was going to be the number, right? It was supposed to be like in the low 30s or maybe kind of like, you know, 33, 34. And then all of a sudden like to come out of 39.6, I think it's almost like, okay,

• 5:00Chamath Palihapitiya?

  he's, he's giving the pound of flesh to the, the left, kind of like woke mob of the Democratic Party, who probably doesn't understand how capitalism works in the first place and doesn't care because they're not, they're not participants in it. Now, the, my reaction is, I don't think it's going to pass. I think it's going to be really tough to get done. And I think it probably, you know, maybe, maybe there's a watered down version, but this version, I, I'm not super worried about. And then it just comes back to the same thing over and over. The, the fewer, the number of people that get to participate in the growth and see the upside, the more there are that just wants to just kind of, you know, tear it all down. And so, I don't know, it's just yet another signal that we have these structural issues to fix.

• 5:45Chamath Palihapitiya?

  It's not reasonable that a few people get super rich and everybody else gets left on the sidelines.

• 5:50Jason Calacanis?

  Sax, where are you at? It's not going to pass, but it's not going to pass. It's not going to pass. Sax, is it going to pass? Is it an opening salvo where he wants to get to 32? So he's starting at 39?

• 6:00David Sacks?

  I think, I think it could pass because I think they're, they're planning to do this tax increase as part of the, the second infrastructure bill. It's not really an infrastructure bill. They're calling it human infrastructure. We've talked about this. Infrastructure is one of the last categories of federal spending that's still popular. So they're rebranding a bunch of social programs as, as human infrastructure. I think that bill will pass. I don't know if the, the rate will stay at 39.6, but I think there will be a big increase, clearly, in the, the cap gains rate. I mean, I think it's worth remembering how it got to 20%. It got to 20% because Bill Clinton lowered it from 28 to 20 as part of an overall

• 6:39David Sacks?

  package of, of, of tax reforms that he did in the, in the sort of the, the mid 90s. And, you know, that led to some of the best years of economic performance, GDP growth in the US, productivity growth, deficit reduction, you know, and so.

• 6:59David Sacks?

  You know, I think we're, we're, we are experimenting with breaking something that's been working, I think, pretty well since the Reagan Clinton years, which is to have reasonably low taxes on capital formation and investment. I think it's a category error to treat capital gains or to think about it just as income. You have to remember that all of this money has already been taxed once, right? So you make the money the first time as income, you earn it, you pay tax on it, then you decide to save some of it and invest it, and then you get taxed again on that amount. And so, so capital gains is a form of double taxation. That was the original reason, one of the reasons to have a different tax rate

• 7:42David Sacks?

  for it. And, you know, I think that this risk kind of messing up the economic recovery that's really underway already.

• 7:51Chamath Palihapitiya?

  By the way, think about what just happens to any organization that has to pay cap gains, right? It's not just individuals. Like, last time I checked, organizations aren't exempt from cap gains, for-profit organizations. And I don't exactly know what they will do as well. So, you know, you, you, you're putting a lot of people under a huge strain when you double the, the effective rate of return. So, you know, if you're, for example, like, a pension fund, right? And you have an enormous investment in a private equity fund or a hedge fund. Part of these things is that, you know, they're these complete pass-through vehicles. And so as long as like you've structured yourself in a way where you don't have to

• 8:35Chamath Palihapitiya?

  pay that tax, I think, I guess you're indifferent. But if you're any organization or institution or a person or a collection of people that bears that tax, all of a sudden, you know, your returns have been basically cut in half. That's pretty nuts.

• 8:50Jason Calacanis?

  Let's talk about the average Joe for a second, or Jane, as it were. 401ks would take a hit here and then when you go to your retirement and you have to liquidate them.

• 9:00David Friedberg?

  You don't pay tax on the.

• 9:01Jason Calacanis?

  You don't pay tax on that.

• 9:02David Friedberg?

  Yeah, you don't pay tax on the 401k gains during the.

• 9:05Jason Calacanis?

  Otherwise, your portfolio, because 401k is going to be a small amount, you can contribute to it a year. So retirees who happen to have stock market gains or cryptocurrency people trading that.

• 9:15David Friedberg?

  Yeah, you'll basically pay the same as income tax as opposed to paying a lower tax.

• 9:20Jason Calacanis?

  So would a.

• 9:21Chamath Palihapitiya?

  It'll diminish investment, Jason. It's exactly what David says, which is that on the, on a marginal basis, what will happen is inflation probably goes up because people just decide to consume rather than invest because they think, well, what's the point? You know, there's already risk that I bear. And so, you know, the, the earliest risk assets, right? The riskiest ones that we all participate in, which is early stage venture and company formation. There's, you, you may not be thinking about the capital gains rate, but it's implicit in the returns that you're expecting for the risk and the time you're going to take. And, you know, we've been trained to feel that rate. And if you double that rate from 20 to 40, I suspect that there's a lot of people whose risk tolerance changes.

• 10:02Chamath Palihapitiya?

  And they're going to feel their after-tax gains differently and they'll wonder to themselves, is this worth it? And then I think what happens as a result is entrepreneurship drags. I don't know if anybody's done an analysis, but I suspect part of the reason why America is such a, you know, an amazing like sink for capital, right? It absorbs capital all around the world is that you've created incentives that get people very excited because they think they can get rewarded. If you take those rewards away, I think the implications are much bigger than just the cap gains rates here. Because as the people change their behavior, then the capital formation pools outside of the United States change their behavior. And the whole thing has a knock on effect and it was more muted in Clinton.

• 10:44Chamath Palihapitiya?

  It was less muted in 78. It basically didn't exist in the 40s and 50s, but it is a huge force today. I mean, like we are an indebted nation that owes money to all kinds of countries around the world, including China. We're supposed to generate growth and sort of pay it back.

• 10:59Jason Calacanis?

  And where will the growth come from if LPs don't want to back venture funds or venture funds?

• 11:04David Friedberg?

  But let's be, uh, let's be honest.

• 11:05Jason Calacanis?

  Maybe I'll check out.

• 11:06David Friedberg?

  Let's be honest and direct. I mean, are any of you guys going to change your investment behavior if the cap gains tax goes to 40%?

• 11:15David Sacks?

  No, but there'll be less of it, you know?

• 11:17Chamath Palihapitiya?

  Yeah.

• 11:18David Sacks?

  So, look, anything, anything-

• 11:19Chamath Palihapitiya?

  My behavior has changed. I think my behavior will change, yeah.

• 11:22David Friedberg?

  How will it change?

• 11:24Chamath Palihapitiya?

  Yeah, it's exactly what David said. So I just put in a hundred million dollars into a climate change company two weeks ago. Uh, under this promise, uh, I could only put in 50. So there's 50 million less progress that's going to happen on that business. I'm not sure that that was, that's the right answer for what that company is trying to do in the world. And the way it will change-

• 11:43David Friedberg?

  You're saying, you're saying that, you're saying the profits you would have had from before are diminished in half, therefore you would only have half as much money to invest as an investor.

• 11:51Chamath Palihapitiya?

  Right. So, so however way you want to cut it, whether it's like the, the 10 companies gets cut down into five, or the five, 10 companies that I invest in get half my money. The point is at some point, the money starts to run out, not just for me, but for everybody else.

• 12:05David Friedberg?

  Yeah, basically, at the end of the day, the money goes into the hands of, you know, government legislators and administrators to decide how that money gets spent, and it's not in the hands of, uh, capitalist investors to decide where to invest. That, that's the fundamental kind of shift that, that's gonna happen.

• 12:21David Sacks?

  Right, right. Capital, capital's been taken out of the econ, risk capital's been taken out of the economy and it's now gonna be, you know, spent by, by government. Look, anything that you tax, you punish and disincentivize, and anything you subsidize, you, you've created incentive for there to be more of. And, you know, so this is just, we, we, we always talk about these things in terms of, well, who they gonna hurt? Is it that there, that this only falls on the backs of rich people, um, so we shouldn't care. The, but the real question is what is this gonna do to the economy? And, you know, I think we've talked in previous podcasts, the, the last part that we have with Brad Gerson, it feels like everything in the American system is kind of broken, except for one thing, which is this sort

• 13:02David Sacks?

  of opportunity economy that's, that's been created by risk capital, right? And, and people creating new companies, you know, like these big, stultifying political corporations, the S and P 500 are completely broken, government's completely broken, the federal debt is out of control, everything's, the media's broken, everything in America is either broken or needs to be revitalized or reformed, except one thing is working really- Really well, which is risk capital and its allocation to founders who have nothing but a good idea, right? And when all of a sudden you double the cap gains rate, that is an attack on that opportunity society. Now, I think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people. I think like Brad framed

• 13:47David Sacks?

  it really well in the last episode. Like, how do we get more people involved in that? I would submit the answer has a lot to do with school choice and charter schools, giving people, everyone in this country deserves to have a first rate education. And so that is a very legitimate conversation to have. But I think to have punitive taxation on it is, I think it's risk breaking, that last thing that is working so well in the American system.

• 14:10Jason Calacanis?

  I think it's really well said, and I think this is going to take redomiciling to another level. I mean, if you're in New York or California right now, and you were thinking about Wyoming, or Utah, or Texas, or Florida, I mean, this kind of makes the decision for you if it does go to 40, and because that's, you could actually make, would you get to neutral if you left? And so I

• 14:34Chamath Palihapitiya?

  Well, I remember, I remember when I moved to the United States in 2000, the marginal tax bracket that I was in, and I was making maybe, you know, 100, no, I was probably making 80 or 90,000 dollars a year, was 55%. And I remember coming to the United States and seeing my after, my take home pay, my first paycheck, and I was shocked because I was like, you know, I was paying maybe 36% all blended in federal and local at the time, or state at the time in California. And slowly, slowly, it's creeping up with, if you play it out today where we are, plus New York State just passed laws, you're going to be sort of in the 50 to 55%, almost upwards of 56% for certain folks. And

• 15:18Chamath Palihapitiya?

  maybe the answer is that's the right thing. But I think we have to acknowledge that there's going to be a bunch of unintended consequences. So maybe the intended consequence is to actually create more equality between the richest few and, you know, not even the poorest, frankly.

• 15:34Chamath Palihapitiya?

  Because but it'll just be the richest few and the the next richest few. Quite honestly, because like, you know, the investing class is still a small number of people. But the unintended consequences of that decision, I think, is what exactly what David said, which is that over the next five or 10 year period, you will, at a practical level, see less investment. And the the only way to make that whole is if the government then takes all that money and all of a sudden allocates it from their own coffers back into the economy. And we know that that's not going to happen well, right? That's just going to be riddled with waste and graft and corruption. So unfortunately, the setup is that, you know, you're going to really impact entrepreneurship. And then I and then I wondered to myself, by the way, guys, like, what was the actual goal of this?

• 16:19Chamath Palihapitiya?

  Meaning there was 20 or 30 guys that were just making so much money on their equity. But then that's then then we need to blame like the these lists like the Forbes billionaires list, because those are inaccurate, because a lot of these stuff is like unrealized realized paper gains.

• 16:36David Friedberg?

  Yeah.

• 16:37Chamath Palihapitiya?

  Right? And so they're not they're not paying any capital gains because they haven't sold anything. And most of these guys that are uber uber rich, you know, have no desire to sell because it's for them, it's a control issue to sell.

• 16:47David Friedberg?

  I'm not sure the I'm not sure the the consequence of taxing uber rich people is the true motivation. I think for some people, maybe it is. But if we just take a step back, I mean, a year ago, the US debt level was significantly lower than it is today. We've taken on a tremendous amount of of federal debt to fund a series of programs that we believe we're going to kind of keep, you know, the American population employed and keep our economy moving. That was a massive burden we accrued and in the past year. So ultimately, over time, the only way to kind of support this this new federal budget and, you know, the this new servicing costs that we've taken on at the government level,

• 17:30David Friedberg?

  you really only have kind of like three options. Option one is you're going to continue to raise more debt and massively kind of inflate everything and the dollar declines in value. Option two is to reduce spending, which means starting to cut these programs and Option three is to raise taxes. And it's pretty clear that option one is one where we're kind of already at the economic limit. Option two is going to be very hard to swallow at a time like this. So you can't just cut spending right now. Across the board, so many aspects of the US economy and so many individuals in the United States are dependent on the federal government for support. And so option three is the only real one that's left on the table. And so then the question is, who are you taxing?

• 18:11David Friedberg?

  You're not going to go tax the people that are struggling. You're going to tax the corporations and the wealthy. And the capital gains tax is the one place where you can kind of say, look, the tax rate that you're paying today is half of what an income tax rate would be if you were earning that as income. Let's get it to be fair and even. And I think just to argue this other side, like there's a motivation, there's a point of view where this is coming from. It's not just let's go tax the rich, screw the economy. It's that we find ourselves in a circumstance where we need to do one of those three things. The most rational to do is to, or the most kind of sensible politically to do is to increase taxation. And this is the first place to go, the most obvious place to go.

• 18:50Chamath Palihapitiya?

  It's not because so when you think about like, so for example, like, you know, you would say, okay, who are the folks that we're talking about? There can be entrepreneurs that are building companies. Again, they're never selling, so they're never going to pay these taxes. Like, it's not the case that Elon Musk or Mark Zuckerberg is all of a sudden going to write a $40 billion check because that's not how much they make. That may be how much they're worth, but they will never sell a single share unless they have to to fund some other project, in which case.

• 19:18David Friedberg?

  So which of those three things would you do, Jamal?

• 19:20Chamath Palihapitiya?

  So what I was going to say is, so and then you look at somebody else, like maybe you say, oh, well, you know, the people that manage money, like, let's go after those guys because like those guys shouldn't be, you know, rich. But then the problem is those guys are already paying W2 income. They're already paying nominal income tax rates. That's how the entire hedge fund industry works right now. You know, you get paid in current income.

• 19:43Chamath Palihapitiya?

  And so, okay, so you're not getting their money because they're already paying at the prevailing rate. So again, this goes back to if you actually trace the problem and see who it affects, it's exactly what David said. It's these folks that are in the middle. That are actually putting the money to work, that are trying to invest in things that now have a very different return profile. And you're right, the core business that they do, they may still keep doing, but then all of the incremental things in the future that they want to do, they won't do. For example, look at all of the talk right now about how everybody needs to stand up, you know, more angel investing, more minority investing, more women GPs, all of this stuff. Well, all of the folks, let's just be honest, all the folks that were in a position to put money into those folks are now 50% on a

• 20:27Chamath Palihapitiya?

  dollar rated basis poorer if this thing passes. And I bet you what they're going to do is they're not going to cut their allocations in Sequoia, they're going to cut their allocations to all these other folks.

• 20:37Jason Calacanis?

  Yeah, that's exactly what I was thinking, Chamath, is I

• 20:39Chamath Palihapitiya?

  Who's it going to hurt? It's again, it's going to hurt all the people that you want to get into the game. It's going to hurt all the people that are here, but the richest, richest, rich folks, that is not unless you

• 20:48Jason Calacanis?

  Zero impact.

• 20:49Chamath Palihapitiya?

  Unless you ex appropriate the money from them, that's not, you're not going to get a single cent.

• 20:53Jason Calacanis?

  And then that was the, that was the concept of the wealth tax, wasn't it? That you would take the total value, what you have and just take away 1% a year from Bezos's, you know, or Zuckerberg's $100 billion. So would that not have been a better solution than this? If you had to pick one, a 1% wealth tax for whoever?

• 21:11Chamath Palihapitiya?

  Jason, then, then we're no better than a banana republic that could also then ex appropriate a mine because we don't like the way that the mining is happening or, you know, another critical asset because the government decides that it's important. I mean, what's the difference between a stock and any other asset that either a person or a corporation owns? It's, it's, it's very, I think that the definitions are thin. They're all the same things at the end of the day.

• 21:34David Friedberg?

  But let's go back, let's go back to the federal budget problem. Like, how do you address it, Sax? I mean, what's the right course here?

• 21:39David Sacks?

  What I think is amazing is we're, we're about to spend, we're raising this hundreds of billions of taxes in order to fund, you know, trillions of new spending. I don't really hear the administration selling these new programs, selling the spending. All we're really talking about is that there's too many rich people, you know, we have these millionaires and billionaires, we gotta tax them more. And so all, all we're really talking about is whether it's appropriate to be punishing. The rich and super rich, we're not really talking about where's this money going? Are these programs justified? What do we get out of it? Exactly. And my point is forget about like who it's gonna hurt. I think it's eventually gonna hurt the economy. And the question is, what do we get out of it?

• 22:20David Sacks?

  And I think what's amazing is this isn't even paying for the big ticket items on the progressive wishlist. We're not getting to universal healthcare with this. We're not getting to universal higher education. We're not getting to any of the, we're not getting to like forgiveness of student loans or anything like that. We're not getting to any of the really big ticket items on the progressive wishlist. And yet we're maxing out the taxes relative to anything we've done historically. And so where do you go from here? You know, because this is just, this is just the tip of the iceberg in terms of the progressive agenda.

• 22:52David Friedberg?

  Doesn't that speak to the problem? Like the fact that we have such an extraordinarily high debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make ends meet effectively, right? I mean, because our alternative again is to just let massive inflation run, you know, issue a ton of, a ton of new debt or to cut spending.

• 23:12Chamath Palihapitiya?

  No, no, no, but David.

• 23:13David Friedberg?

  But either of those seem to be on the table.

• 23:15Chamath Palihapitiya?

  No, no, no. You're going to exacerbate this issue. I'm, I'm telling you, I know it doesn't seem likely, but I think on a marginal basis, this will be an incentive to spend. And the reason is that it's a very frustrating idea for somebody to think about putting money in the ground, especially a sophisticated investor at a rate of return that just changed in half. And so from my perspective, I would be more likely to spend because I would rather just YOLO the money than I would rather put it into the ground because I would be worried that that could then get taken away from me. It could also change even further and further. And I think that's a very frustrating idea. I'd rather take a vacation. Again, let's go back to the example. I'd rather take a vacation with that $10,000 than go onto Jason's syndicate and put it into the hands of folks.

• 23:59Chamath Palihapitiya?

  Because I'm just like, you know what? It's gonna turn into, even if, even if Jason hits it and I get back, you know, I'd rather just go on vacation. Enough of those decisions and I think I think you have a very different kind of economy. You have, you know what you have? You have what everybody else has.

• 24:14David Friedberg?

  So do we reduce spending?

• 24:15Chamath Palihapitiya?

  I think you have to reduce expenses. I think that we have an infrastructure that is not well accounted for. Meaning if you're a company, you can go to a company like Tableau. You can go to a company like, you know, pick your, pick your metrics company. And within, you know, a few weeks and months of work, you can literally understand where all the dollars are. Right? You can understand your business and you can figure out where money is being wasted and where it's not. In a government, that's impossible to do. Right? Because you have these laws and these laws are artificial constructs that we construct. And those artificial constructs are influenced by money in and of itself. And so these dollar flows are impossible to map. So you don't know where it goes. So for example, the $700 billion budget in the Pentagon.

• 24:59Chamath Palihapitiya?

  Does anybody have any idea what the ROI is on that? Or even a way to measure it, like even to actually make it simple? What, like if you were, if you had $700 billion of investment capital? The, the market has a really simple way of saying, okay, David, what's your ROIC? What's your return on invested capital? And you can say all kinds of fancy things. You can have all kinds of fancy projects or simple projects. But at the end of the day, what is measurable is a dollar in and what that dollar grew into. And that's a return on invested capital. It is impossible to know that. And so, you know, we could say, for example, you could define it and say, well, I'm going to basically get every single person to graduate high school.

• 25:40Chamath Palihapitiya?

  And now I'm going to spend $500 billion a year to make sure that the graduation rate is 100%. That would be an incredible goal. You know what? That is absolutely measurable. Right? And, and you'd be able to back into all of these programs and the one that's, ones that didn't work, you'd cut. You know, and you'd end up with what David said, which is school vouchers. Uh, I mean, just to-

• 25:59David Friedberg?

  I think, I think the absence of that accountability, Chamath, has led us to a scary dilemma. And the dilemma is over 10 million Americans are directly employed by federal government. And a large swath of the remainder of the economy is supported by federal government spending.

• 26:15Chamath Palihapitiya?

  Which is basically your-

• 26:16David Friedberg?

  Right? So large, large amounts of defense and military, construction, healthcare and pharma. I mean, the list goes on, but like the direct employees of the federal government plus the amount of revenue that depends on federal spending is so significant now as a percent of the total income generated by Americans that it is very hard to say like, let's create accountability in a system when so much of the economy is functionally dependent on it. Am I missing something, Sax? Like, I mean, isn't that the circumstance we're in right now?

• 26:44David Sacks?

  Yeah, I mean, the thing that like is amazing to me is, you know, I lived through the 1980s and 1990s like, like you guys did. From 1982 to 2000, that 18-year period, we had sort of an unrivaled economic performance. It was roughly around, we had two bad years under George Herbert Walker Bush. That's why he lost reelection, but we had close to 40% growth in GDP. Every year, we had great productivity. And we had massive deficit reduction. It's the last year.

• 27:14Jason Calacanis?

  4% a year in GDP.

• 27:15David Sacks?

  Yeah, and we, and we had, we actually had governments, uh, surpluses, budget surpluses the last few years. So it seems to me that we had the winning formula as a country. And look, this is not partisan. I think it's bipartisan. I think it, the, the, the right solution is somewhere between what, what Reagan and Bill Clinton did. And, you know, Clinton, uh, he rose, he increased the individual tax rate to 39.6. So he did do that from 36%, but he cut it from, he cut the investment, the cap gains rate from 28 to 20. It was in that ballpark. You know, we know that works. You know, we know that works. I, and, and, and, you know, somehow we've moved

• 27:55David Sacks?

  away from what we learnt in that time period because, you know, I think the, the left in this country has, has become kind of, you know, has embraced this.

• 28:05Chamath Palihapitiya?

  We're saying the same thing. You set up the incentives for people to invest, they do. If you set up the incentives for people to spend, they will do that as well.

• 28:13Jason Calacanis?

  I, I see this, I think Chamath is exactly right. There are a lot of people, and you use the example of the Syndicate.com. When I do my Syndicate deals, there are people who are recreationally saying, you know what? I love the idea of putting five or 10K into a flyer. They're gonna. You know, half of them will go away, a third of them. All these people who are, you know, involved in day trading or crypto or real estate investing. They're going to look at it and say, is this worth the time? Or is it worth this amount of time? Maybe I'll cut back from doing 40 hours a week of this to 20. And if you look at what happened with crypto people, they went to Puerto Rico. You look what happened to venture capitalists and CEOs. They went to Florida, Miami, Austin. This is going to, if it does pass, you could be pushing people to Singapore.

• 28:55Chamath Palihapitiya?

  Well, we have another very complicated problem. And this is what Friedberg brought up, which is, and I don't know the answer, David. So I'm trying to, I'm actually talking around your question because I think it's, it's, it's the right absolute question. But think about this, what happens in a world where now, let's just say that the revenue of the government goes up. Right? But outcomes stay the same or get worse. And at the same time, and you could claim that that's effectively what's been happening over the last 20 or 30 years. Right? Government revenues have gone up, impact has stayed the same or probably been net negative. But then at the same time, you have this, you know, program of quantitative easing where then you can essentially print money on demand. And when you think about that, it's like, wait a minute, I am giving you money.

• 29:38Chamath Palihapitiya?

  But then then you are also going to the photocopy machine with my money to make more money. And all of that total money does less than what it did when it was half that or a quarter or a third of it. That's a very scary realization, I think, that people, you know, will eventually come to. And I don't know what the answer to that is. I, you know, I, I, I think David Saxipu said it, which is like, you know, the states are this incredible A B test. Right? Because you get to test like theories, right? And you have, you have now every complexion of theory. You have like, you know, the low tax states, the no tax states, the mid tax states. You have high real estate taxes, low real estate taxes, high estate tax, whatever. You get every grab bag of incentives and you're going to see. But the problem is that was assuming that the federal government kind of mostly stayed out of the way.

• 30:21Chamath Palihapitiya?

  When you have this massive overlay.

• 30:24David Sacks?

  Yeah, I just posted a chart in the chat that Nick can put up, which is federal spending, federal outlays of percentage of GDP. And it's really interesting because federal outlays of percent of GDP have generally been around the 20% line, plus or minus a couple of percent since, you know, the 1980s. And last year, in 2019, it was 20.7%. It jumped to 31.3% under COVID. And it now feels like we're trying to make this new level of, you know, going from 20 to 30 permanent.

• 30:58David Friedberg?

  It's like mask, mask wearing.

• 30:59Chamath Palihapitiya?

  Well, the, the problem, the problem is the only time we did that in history was in World War II. Now we were trying to fight the Nazis, which was worth spending the money on.

• 31:07Jason Calacanis?

  Yeah, I would say that was a good use of capital.

• 31:09David Friedberg?

  But it's very hard to step back, right? I mean, what, what starts out as temporary becomes permanent? Is that kind of the concern?

• 31:15David Sacks?

  Well, that's what, that's what Milton Friedman said is there's nothing quite so permanent as a temporary government program.

• 31:19David Friedberg?

  Right.

• 31:20David Sacks?

  But, but, but what they're threatening to make permanent is this new permanently higher level of federal spending in the economy. And I think it's a very dangerous experiment because it either takes tremendous money printing to support it or tremendous tax burden. And neither one of them is good for the economy. By the way, you know, again, when Bill Clinton left office, I remember, you know, you can go to the, the time machine for whitehouse.gov when he left in 2000 and he bragged about how under his terms, under his eight years as president, they reduced federal spending from 22% of the economy to 18% of the economy. Can you imagine a Democrat today boasting of that?

• 31:59Jason Calacanis?

  Or even a Republican? I mean, what, who was the guy who was your guy who was like, uh, the Tea Party people? Who, there was somebody who was like in charge of the Senate, who I don't know who it was, but it was just like, we gotta cut spending.

• 32:12David Sacks?

  Oh, yeah. Oh, yeah. Ryan, yeah. Speaker, the Speaker of the House, Paul Ryan. Yeah. No, you're right. You're right.

• 32:19Jason Calacanis?

  Based on this.

• 32:20David Sacks?

  Yes. Spending restraint's kind of gone out the window in, in both parties and the Republican, and it did, it did happen under Trump. The Republicans don't seem to find their principles on spending unless and until there's a Democrat in the White House. So they definitely deserve their share of the blame on this. But, but we do seem to be entering a new territory here of, you know, this, again. Levels of spending we've never seen before.

• 32:43Chamath Palihapitiya?

  It's incredible. It's absolutely. The problem is it would be so much better if we just said, we're going to do this one very specific thing with a huge number attached to it. Like, I would rather say, we're going to Mars. Here's a trillion dollars. We're cutting student debt. Here's a trillion dollars. We're going to double down on cyber and we're going to get, you know, completely pivot the military or something.

• 33:05Jason Calacanis?

  Green, green new deal, whatever. Something aspirational that is not just anti-rich people. Let's tax the rich.

• 33:12Chamath Palihapitiya?

  We have, we have labels. We have a label. And then we have a spaghetti mess of spending that just isn't really attached to what the label means. And none of it is accountable. And so you don't really get anything for it.

• 33:24Jason Calacanis?

  I, I know this is a silly question, but why wouldn't we test this and say, hey, 20, 40, there are numbers between these two. Maybe we'll increase it 2% a year for eight years and we'll see what happens.

• 33:39Chamath Palihapitiya?

  This is, this is the other problem with like this idea of American exceptionalism. We believe that we can't learn anything from anybody else. And that's also not true. We actually know what it looks like when you have government as a massive portion of the economy. And we also know examples where government basically enables human capital outcomes, but remains relatively, you know, small and fixed. Singapore, right? There's this, there's this incredible, you know, there's this incredible example where I think, uh, right when Lee Kuan Yew became, um, the head of Singapore, the GDP of Singapore was the same as the GDP of Jamaica, right? And what you saw was this complete, just, just complete divergence in, in these two countries.

• 34:21Chamath Palihapitiya?

  And think about this country, which is basically this like, you know, this little spot of land surrounded, you know, and, you know, apolitical, a-religious, surrounded by these Muslim countries, and they still thrived and they kicked ass. You know, they were never invaded, et cetera, et cetera. Um, and underneath that was this belief that it's what you said, Friedberg, where you focus on an outcome, you spend against the outcome, and you try to measure in a reasonable way. And you double down on the things that work. And then on the other hand, if you look at Europe, Europe is a good example when, you know, spending sometimes for the greater good in the best interest can run them up. And really what happens is you start to stagnate.

• 34:59Jason Calacanis?

  Yeah, and Singapore is only what 6 million people? I mean, it's like Ireland or Norway or Denmark. I mean, it's this is not a huge place.

• 35:06David Friedberg?

  Sounds like we didn't solve any problems in that last piece.

• 35:09Jason Calacanis?

  Yeah, we didn't solve. I mean, I mean, what do we think is going to happen in four years? Does Donald, does this give Donald Trump a clear path into office if he said, hey, we're lower taxes again?

• 35:18David Friedberg?

  You know, the worst case scenario is you see what happened in France when they had that 75% super tax and then they introduced the wealth tax and they had massive immigration of of invested dollars out of the country and people out of the country.

• 35:30Jason Calacanis?

  They did get rid of George, didn't they? That was a bonus.

• 35:33David Friedberg?

  That was a bonus.

• 35:34Jason Calacanis?

  Yeah.

• 35:35David Sacks?

  Yeah. At what point, how many red pills do you guys have to take before you're willing to reassess your political party? Because it seems obvious to me. Now, look, we could talk about how bad-

• 35:45David Friedberg?

  What political party do they-

• 35:46David Sacks?

  Hold on, hold on. We can talk about, we can talk about how bad the Republican Party is, but there's no question in my mind that the Democratic Party, all the energy, the base, the activists and the politicians who have the microphone, they are woke socialists. Okay, that is the dominant ideology in the Democratic Party. And what Biden is doing right now is catering to that. He's compromising with it.

• 36:07Jason Calacanis?

  He wasn't catering to that until this point. He he didn't put Bernie or Elizabeth Warren into any cabinet positions. He kind of marginalized them. And now he's like, okay, let's do something. I mean, would Warren and Bernie have done this?

• 36:20Chamath Palihapitiya?

  No, but Jason, I think you're right. This is why I think this is like a sacrificial lamb, and I don't think anything's going to happen. I don't, I think Biden is a fundamental centrist. That's why I like him. I think he's a-

• 36:28Jason Calacanis?

  Boring.

• 36:29Chamath Palihapitiya?

  He's a stable, he's a stable predictable figure. And that's, I think, what you want in the in the presidency. I I think that this is sort of like, okay, you guys want a pound of flesh? Here you go. But I think he's so politically smart that he probably does have a bunch of millennial woke socialist whispering and chattering like, hey, do this, do that, do the other. But he's probably the only one there who's smart enough to realize none of this won't get passed. You know, it's not going to muster enough support.

• 36:55David Friedberg?

  I don't know. I think I-

• 36:55David Sacks?

  Biden is not governing like a centrist right now. He's he's proposing, you know, what, 4 trillion of new spending, you know, new tax increases, and he's just getting started. But look, and I would challenge this idea just slightly of him being a centrist. What I would say is, he's always- is tacked to the center of the Democratic Party. So I do, I do think he's, he's a triangulator, and a calibrator. He's not like a conviction politician, the way that Bernie Sanders is or an Elizabeth Warren. But what he's tacked to is the center of the Democratic Party. And the center of the Democratic Party has moved very far left because all the activists have moved to the left. And so he's been dragged left. Remember, Biden was Clinton's floor manager in the Senate

• 37:36David Sacks?

  when he passed all this legislation. And so now Biden is very far to the left of where Biden was in the 1990s. And the reason for that is because the Democratic Party has moved. So once again, I guess, you know, my question to all of you guys is, what does it take? How far does the Democratic Party have to go to the left?

• 37:54David Friedberg?

  Not Donald Trump.

• 37:55David Sacks?

  Okay.

• 37:55David Friedberg?

  I wouldn't, I wouldn't, I wouldn't call this. That's the problem is Donald Trump. I wouldn't call this as much of a radical policy shift as I think it's being framed. I honestly think this is a natural and inevitable consequence of the circumstances we find ourselves in right now with respect to the spending level, the dependence we have on federal spending across the board with respect to individual employment and the economy, the need for a variety of social services to get us through this COVID economic collapse. I just don't see another way out. And I feel like it's the natural course to do exactly what's going on right now. I think it's gonna pass. I think something like it's gonna pass. And I think something like it's gonna pass, but I don't think it's gonna pass. Yeah. Where do we put it at? You think it's gonna be equidistant? I'm not saying, I'm not saying it's good or bad. I think obviously, we just find ourselves

• 38:37David Friedberg?

  in this circumstance in this country in this moment in time, that this is the only path. I'm just not sure you could go in and go slash a ton of spending right now. And, and, you know, and anyone would win reelection, or any, you know, or most Americans would be anything but unhappy. It's just, it's just the consequence of where we are.

• 38:55Chamath Palihapitiya?

  Let's play the glass half full. Here's a crazy idea. Okay. You know, for example, somebody like me, what I would think about, which I think is, is a little, it's crazy, but I would do it, is, okay, I'm just gonna move literally every single thing, every dollar that isn't nailed down.

• 39:13Chamath Palihapitiya?

  Into a charitable vehicle and I will invest through my charity because I still have to donate 5% a year, but then I can compound tax free. Now, I care more about the businesses that I'm a part of and the progress that I can create. So that may be okay and I'll just pay myself a salary to like fund my lifestyle. But that could be a way around this. To me, the biggest issue isn't how much money I have personally. The biggest issue is how much money I will have to put back into the world. And the idea that then it goes to a place where it's profligately spent in a way that isn't accountable really bothers me. That idea bothers me a lot. David, that would cause me to tack, you know, even more to the right if I could find somebody who understood that principle. Because what I don't want to have is, you know, in the absence of social programs, like the problem

• 39:58Chamath Palihapitiya?

  that the Republicans leave is this no man's land where then you're forced to believe that this one man for yourself, it's all about you, you can figure it out, you know, the rugged individualism. That's just not realistic. Like I, I am a complete byproduct of a social safety net. And that should exist. And the problem is that Republicans don't give you that option to have then accountability on spending. Then just somebody, please just say that. I don't care what you call yourself.

• 40:26David Sacks?

  Yeah. Well, look, I think, you know, I think Republicans have gotten a lot more comfortable with the idea of entitlements and the social safety net. I don't really hear anyone opposing that anymore. I mean, it's the same thing's happened with like the Tories in, in England. You know, no one's really trying to roll back the social safety net. We need a Republican messenger to come forward and say, listen, we don't care, you know, who you love, what you smoke, where you're from, what you look like, you know, we believe in an opportunity society. We want to spread that opportunity to everybody, but ultimately opportunity comes from the private sector. We're going to have a strong social safety net. And we're going to basically give everybody the, the most opportunity

• 41:08David Sacks?

  to participate by giving them a great education. That's basically what the agenda should be.

• 41:12Jason Calacanis?

  Yeah, I'm in. I'm in. I mean, I, to your point-

• 41:15Chamath Palihapitiya?

  Even the starting line, hallelujah.

• 41:16Jason Calacanis?

  I like it. I mean, I, I would-

• 41:18Chamath Palihapitiya?

  The problem is your boy tried to dismantle Obamacare, you know?

• 41:22Jason Calacanis?

  The problem is Trump, like Trump, I'm a never Trumper, obviously, but I'm kind of purple. I would, you know, I'm considering Austin or Miami as a, as a place to locate myself. And so a decision like this makes it easier.

• 41:33Chamath Palihapitiya?

  I would never do that.

• 41:35Jason Calacanis?

  I'm actually ver- I, I love Texas. I love Austin. Austin's the kind of purple I like. Like, I like personal freedom and I like what you're saying, like love who you love, smoke what you want.

• 41:45David Friedberg?

  What year did you move to the Bay Area?

• 41:48Jason Calacanis?

  Five, six years ago. I was in LA for 10, New York for 30.

• 41:52David Friedberg?

  I feel like it's a last in, first out thing that's going on right now with respect to immigration out of California.

• 41:57Chamath Palihapitiya?

  I've been here since 2000. I'm not leaving.

• 41:59David Friedberg?

  Yeah, I've been here my, since I was six years old in California and I'm not leaving. And I, and I've been in the Bay Area since college. So I'm not, you know, I feel like it's a lot harder to leave when you've been here longer. It's a lot easier to leave when you've been here less time. That certainly seems to be the pattern I've seen amongst friends and colleagues with respect to leaving the state.

• 42:16Jason Calacanis?

  Uh, all right. Uh, the Chauvin trial, uh, came back guilty, all three charges.

• 42:23David Friedberg?

  What is there to even talk about here? What is there to talk about?

• 42:25Jason Calacanis?

  I don't, I don't even know. I mean, I feel like we should.

• 42:28Chamath Palihapitiya?

  Can I get, can I give it, can I give a shout out to, um, a really good friend of mine? His name is Neil Kachal. He was the former Solicitor General under Obama. Um, he, uh, he was, uh, one of the prosecutors that, that worked on that case. Um, he's a, he's a partner at Hogan's, um, runs a Supreme Court practice here, but basically went and did this pro bono trial, uh, on, on behalf of the state of Minnesota, uh, working with the, the, the district attorney. And I'm just, I just want to say, Neil, proud of you. It's an incredible thing. Um, thank you for keeping America safe.

• 43:03David Friedberg?

  Yeah.

• 43:04Chamath Palihapitiya?

  I mean, uh, you know, what's crazy is like, but then, you know, the same day there was, there was a shooting of this, this unfortunate shooting of this, I think, I think she was 16 year old, 16 years old, this black girl in Ohio. And then, you know, LeBron tweeted something out and then LeBron had to basically delete the tweet because it was causing people to go absolutely crazy.

• 43:22Jason Calacanis?

  Well, I mean, each of these situations is unique. And in that situation, somebody was going to stab another person. The cop didn't know what was going to happen. And, you know, in another time period, like, maybe that would have been saving somebody's life who had potentially been stabbed. And, you know, the George Floyd, I think you had to reserve judgment on each of these until you get all the information. But the information here was just super conclusive. Like, the gymnastics Ben Shapiro and some of these far-right people had to go through to say what you saw in George Floyd being murdered was not what happened?

• 43:58Chamath Palihapitiya?

  Well, that's performative theater, trying to get people to watch something.

• 44:01Jason Calacanis?

  And it was, I mean, it was just gross to watch.

• 44:03Chamath Palihapitiya?

  You might as well call it what it is. Like, that's acting. I feel like probably if anybody, if any one of us found Ben Shapiro in a bar and just hung out and had a beer, you'd find out that he was like, he was like the Meryl Streep of our generation. You know, like this incredible actor.

• 44:16Jason Calacanis?

  What does that mean?

• 44:18Chamath Palihapitiya?

  Like, an incredible actor.

• 44:19Jason Calacanis?

  Well, no, I mean, I think Adam's and his podcast, all these guys are just trying to figure out how to say that this was a travesty of justice. And I'm like, I don't know what you saw, but...

• 44:29David Sacks?

  Yeah, let me explain where they went wrong. Okay, so, so, look, I agree with you guys fundamentally. This was an easy, look, this was, you know, finding a fact by the jury, guilty on all charges, obvious, right? The tape shows it, his, the chauvin's record as a cop, numerous complaints, you know, this was a bad apple, this was a bad cop, he deserved to be convicted, end of story. That's where the analysis should end. But, of course, the people on cable news would have nothing to say if that was the end of it. And, so, look, I think both the right and the left kind of went off the rails on this, where, you know, the right kind of went off the rails is you had, well, what happened

• 45:11David Sacks?

  is you had Maxine Waters, you know, come out, and while the jury was still deliberating, she was basically calling for activists to get more confrontational in the streets if the verdict went the wrong way. And so then the defense...

• 45:23Jason Calacanis?

  Not helpful.

• 45:24David Sacks?

  Not helpful, right? And so then the defense made a motion saying that this was affecting the deliberations, there's no... Proof of that, the jewel, the, the judge ruled against that motion, but he did. The judge reiterated his desire for the politicians to stop talking about the case, right? And so then what happened is the, the right wing commentators were criticizing Maxine Waters and implying that, that there was an effort to try and coerce the jury. And there's no proof of that, right? And, and, and, and I think there's, the mistake isn't somehow framing Derek Chauvin as like a sacrificial lamb to the mob. He was not, he was guilty, he deserved it. That being said, I do think that the judge had a point that it'd be

• 46:09David Sacks?

  helpful if these politicians would just stay out of it, stop commenting on it while the jury is deliberating. I think there was a legit point there. Um, but you know, the, the, the left made some, some weird comments as well. You had Nancy Pelosi made this really bizarre.

• 46:25Jason Calacanis?

  That was very strange. I think that was like a slip up of like just trying to say something not, I mean, being charitable. She was trying to say something nice. That George Floyd is going to create a wave of justice and that would be, that's a great idea.

• 46:40David Sacks?

  She said, yeah, she said, thank you, George Floyd for sacrificing your life for, for justice.

• 46:44Jason Calacanis?

  Yeah, that didn't come out exactly as she intended.

• 46:46David Sacks?

  No, no, I mean, because look, George Floyd did not go out that day intending to be a martyr. You know, and, um, and so it, it, it sort of gay, it expressed kind of what she's thinking, which is how am I going to use this politically? You know?

• 47:04Jason Calacanis?

  Train.

• 47:05David Sacks?

  It came out pretty gross, right?

• 47:06Jason Calacanis?

  It came out gross for sure.

• 47:08Chamath Palihapitiya?

  I think that's how they're trained. It's kind of like, you know, if you, if you take a finely tuned athlete into sport and give them, you know, they're, they're just, they're reactive because they're so instinctual. I think it's kind of like this. She's an incredibly finely trained athlete and her domain is politics. And so, you know, what, what is that phrase? Every crisis is an opportunity kind of thing. So I think.

• 47:29Jason Calacanis?

  Yeah. I mean, they all flew there to be there for the, for the trial, et cetera. And that couldn't have helped the judge with, you know, the impartial jury and maybe that causes a mistrial. I mean, I don't know, David, you're an attorney. Is there any chance on appeal that a Maxi Water quote like that could result in?

• 47:48David Sacks?

  Well, the judge, the judge actually said that the, that the defense could reserve that issue and use it on appeal. So yeah, they could use it, but I, but I don't think it's good. I don't think it's going to work unless they can prove that somehow the jury was contaminated by what they were hearing on TV.

• 48:03Chamath Palihapitiya?

  The judge's instructions were pretty clear. Like I, I watched a couple of the ending days and he's very clear. Like he's like, guys, I don't want you to watch the news, you know, this stuff like that. He was very directive in making sure that they tried to be as uncontaminated as possible. So I think the, the surface area for an appeal is pretty thin here.

• 48:19Jason Calacanis?

  The fact that the police chief and everybody who worked with him said like, this is not standard. This, and they just threw him right under the bus. They didn't want to be associated with this in any way.

• 48:29Chamath Palihapitiya?

  By the way, while, you know, they're, they're not going to be able to hide much longer though. Cause the DOJ said they're opening an investigation into Minnesota police force. So I think they're just trying to crack open the police reform in that state and just get those guys on the right side. And it's going to be, you know, but again, here's this other issue where it's like, okay. This is where like there, it's very difficult for the federal government to do anything. But you know, so whatever they try to do, won't really result in what, what you want to have. Because every state, again, Jason, to your point, has completely different political ideologies. Nobody wants to behave the same. Everybody wants to be independent. Everybody wants to get reelected as not kowtowing to somebody else. And so you just don't get these consistent outcomes. And then people are forced to vote with their feet and move across the country.

• 49:11Chamath Palihapitiya?

  You know, to get a bunch of simple things that I think should be pretty consistent across the entire country.

• 49:16Jason Calacanis?

  The thing that I found particularly deranged was these people who are like, listen, he's a fentanyl addict. He's an opioid addict, which by the way, there are tons of affluent people. Everybody in this country is addicted to opioids. Fentanyl is everywhere. Fentanyl is everywhere. And then you're trying to say like, because he had that addiction, but in some way that negates the person kneeling on his back while he's in handcuffs. Like you're, you have a duty as a police officer to take care of somebody when he's in handcuffs. How is he any threat in any way? And then to listen to Scott Adams and Ben Shapiro on these absolute. Pieces of garbage, try to say, oh, you know, there was the fentanyl that killed him. It's like, ah, yeah, no, the person on his back kneeling on him for nine minutes.

• 49:59Chamath Palihapitiya?

  It's about, it's about ratings. Now, switching topics and to talk about ratings, something a little lighter.

• 50:06Chamath Palihapitiya?

  The most interesting popcorn thing that I watched was the Hulu documentary.

• 50:11Jason Calacanis?

  You did watch the Hulu documentary on WeWork?

• 50:13Chamath Palihapitiya?

  WeWork, yeah.

• 50:14David Friedberg?

  I gotta watch it. I gotta watch it.

• 50:16David Sacks?

  I haven't seen it yet, yeah.

• 50:17Chamath Palihapitiya?

  It is, it is in a word, I think, I think the good, I think the right word is like outrageous. I think the guy who stole it, Jason, was the lawyer who they interviewed.

• 50:26Jason Calacanis?

  Yep.

• 50:26Chamath Palihapitiya?

  He, he had some incredible kind of like one-liners.

• 50:29Jason Calacanis?

  Yeah. I think it's, yeah, the, the.

• 50:33Chamath Palihapitiya?

  I had a G, I, I'll be honest, and this may sound crazy, but I actually had a fair amount of sympathy for Adam Newman in watching it. I think that he, at least in the documentary, it came out that he, you know, not, not that he didn't create this issue, but that I think it was a little overly scapegoated because it's very hard for you to incinerate $45 billion without the complicity at a minimum of your board of directors. Right? And, and a bunch of like extremely well-heeled thoughtful investors. And so there was just, there was just so much complicity in this thing. So if anything, my takeaway was that he, he shares, he shares the blame with a lot of other people and it's not, it wasn't, you know, him and him only, but my gosh, that documentary, some of the things guys are just, they're fabulous.

• 51:18David Friedberg?

  This is, this is always true in these businesses that end up with, you know, bad actors that are enabled, right? I mean, it's been the case in public and public success stories and failures, right? I mean, there's a cult of personality, the personality provides, the, the high beta personality provides the alpha. And it can also, it can also provide like a Theranos outcome and, you know, the.

• 51:43Jason Calacanis?

  The thing that when you'll see when you watch this is, I don't know if you guys watched the vow about that NXIVM cult, which is just. Equally loathsome, horrible people behaving badly. But he really targeted young people to work there and indoctrinated them into this. We're changing the world. And then there were no adults there and you see him behind the scenes when he's talking at the IPO roadshow and he's having basically a panic attack. And he's psychotic. I mean, he was really deranged and they have this video of him trying to get through the IPO roadshow.

• 52:16David Friedberg?

  What show is it? What movie is this?

• 52:17Jason Calacanis?

  It's the WeWork documentary.

• 52:19Chamath Palihapitiya?

  The WeWork documentary.

• 52:20Jason Calacanis?

  Just get Hulu. It is so deranged, it's awesome.

• 52:25Chamath Palihapitiya?

  Hold on, hold on. Level. Deranged is a big word. I don't, I'm not sure that it's deranged, but I think it's like, it's juicy. It's, uh, it's.

• 52:32Jason Calacanis?

  What about his wife? And like that whole thing, like we school, they're like, we have to democratize education for 60,000 a year.

• 52:41David Friedberg?

  Have you guys, have you guys ever, have you guys ever regretted enabling, um, you know, quirky personality entrepreneurs that you've backed and then you've regretted it later?

• 52:50Chamath Palihapitiya?

  Yeah, so, um, the, the problem is it's hard, it's hard to know in the midst of it, you know, I guess it's like, kind of like that line, like the line between genius and insanity is very thin. Um, but yeah, I mean, the, the one thing I will say is I've only ever had one issue of outright fraud. Um, and so, you know.

• 53:08David Friedberg?

  Do tell.

• 53:09Chamath Palihapitiya?

  Well, no, I mean, in, in hundreds of, in hundreds of companies that, that I've, that I've invested in, luckily I, I've, I've only, uh, I've only seen one issue where, you know, the CEO was extremely, I don't know, aggressive in how they accounted for and booked revenue and, you know, this is where one thing that we don't have at the early stage companies, we don't have the check and balance of, of reporting infrastructure and a third party watchdog and all these other people. And so, you know, you guys all know this, when we go in and we sit in a meeting, in a board meeting and, you know, the entrepreneur puts slides up, there is an inherent 100% categorical belief that they're, that they aren't lying, right? Like you don't, you don't even have to check that assumption.

• 53:53Chamath Palihapitiya?

  It's just assumed that nobody's lying, you know, good or bad, we're just presenting the data. And I had one case where the guy lied and it wasn't one was it was. And our CFO and, you know, our team figured it out and, um, you know, there were other investors and it was, uh, we all were just really shocked and we had to kind of clean it up as best we could and.

• 54:13Jason Calacanis?

  I have literally a dozen and they, we didn't wind up investing in, I think 10 of the 12. And the reason is, we took diligence to your point, Chamath, like do you, how do you even know in a board meeting, I just said, screw it, I'm going to build a diligence team and we ask people for all their bank statements and for their iTunes account and for their Google analytics. And if a company doesn't give those to us, we just know that something's up and we figure it out before we invest because the two times we did get dinged on this, we had one where somebody was giving themselves a loan and

• 54:45David Friedberg?

  So you did diligence?

• 54:47Jason Calacanis?

  We did, we just basically have a diligence list that says, give us the incorporation docs and all these bank statements. Now, somebody could fraudulently change a bank statement, that is possible. So there, it depends on how deep people want to go in the fraud.

• 55:00David Friedberg?

  But did you guys ever like enable a personality that was just like so over the top and then you're like, oh shit, this is actually going to, this is actually an explosion. Like it's a total disaster.

• 55:09Jason Calacanis?

  Only my top three investments.

• 55:12David Sacks?

  Well, actually, that's a good point there.

• 55:14David Friedberg?

  That's a good point, right?

• 55:15David Sacks?

  Yeah. So because, okay, so I wrote about this in my blog post Blitz Fail, about the, the sort of how, how founder psychology can actually cause a company to go off the rails.

• 55:24Jason Calacanis?

  It's a difference.

• 55:26David Sacks?

  The, the thing, the thing is that founder, founders do need to be much more aggressive than the average person. You know, we like to think that a quality, that a personality trait like aggressiveness, there's like some sort of normal distribution of it. And you kind of want to be, you know, somewhere in the middle of the curve. And it's actually not true. You want founders to be much more aggressive than the average person, because if they're not, they're just not going to persevere and push hard enough, right? And Jay, I mean, we saw this with, with Uber, right? I mean, TK was a super aggressive personality. The company would not have been as successful. How do you not push that hard? And so the curve in the real world, it's not a normal distribution. It looks more like a curve where there are returns to aggressiveness and they're keeping

• 56:09David Sacks?

  increasing returns to it until suddenly the person goes too far and then they jump the shark and the whole thing craters in practice.

• 56:15Chamath Palihapitiya?

  Can I, can I, can I say something? Like, you know, having been in the engine room with Zuck in a critical moment, Zuck was an aggressive guy, but he wasn't over the top and he wasn't just this like crazy weirdo personality. He wasn't enabling sexual harassment. He wasn't doing any of that stuff.

• 56:31Jason Calacanis?

  Would you say?

• 56:32Chamath Palihapitiya?

  Yeah, he was, he was, he was, he was an intellectually incisive, he was an aggressive thinker. So this is why my reaction to David's question is, I haven't backed assholes because I just think that that archetype doesn't work.

• 56:44David Sacks?

  Zuck's a very cool analytical personality. There are these founders that, you know, we, I've heard the term wild stallion to, to describe them where they are, you know, they're like these, these wild stallions. They have tremendous upside, but they're also a little bit, you know, wild. And unless they sort of

• 57:02Jason Calacanis?

  You can get hit with the hoof.

• 57:03David Sacks?

  Yeah, I mean,

• 57:04Jason Calacanis?

  The hoof.

• 57:06David Sacks?

  They're, they're, they're, they've got a lot of talent, right? The, the talent is, the amount of talent you have is like the horse you're riding on. And some people are riding on a Bronco. They got a lot of talent, but it might buck them off.

• 57:18Chamath Palihapitiya?

  I just think the real, the real edge in investing is figuring out what is bluster and window dressing and show, and what is actually aggressive thinking. Like John and Patrick Collison, there's zero bluster with those guys.

• 57:31David Friedberg?

  Yeah, those guys.

• 57:31Jason Calacanis?

  Toby Luchy, zero.

• 57:33David Friedberg?

  That company's gonna be, that's gonna be the most valuable, valuable company that's private right now besides SpaceX.

• 57:38Chamath Palihapitiya?

  These guys are, these guys are incredible intellectually thoughtful killers.

• 57:42David Sacks?

  Right.

• 57:42Chamath Palihapitiya?

  That's what they are.

• 57:43David Sacks?

  That's true.

• 57:43Chamath Palihapitiya?

  They outthink everybody.

• 57:45David Sacks?

  But there's also a maturation process that a lot of founders go through, right? I mean, the Collisons and Zuck, I think, got very mature, very young. I think there's other founders that it takes them a while to get more polished, get more disciplined, rein in the, you know, the, those emotions. I'm not saying they're fraudulent. We don't want to bet on fraudulent founders, but some founders need to learn how to harness the talent they have.

• 58:10David Friedberg?

  Yeah, I agree with that. I agree with that.

• 58:13David Sacks?

  And, and those are the ones where it's very hard to know earlier in their career whether to bet on them or not, right?

• 58:18David Friedberg?

  I agree.

• 58:19David Sacks?

  Because they, they may get it under control or they may not. It's, you can't tell at the beginning.

• 58:23Jason Calacanis?

  Here's the analogy we use internally. It's like being Professor X and the X-Men. You could have a Jean Grey or a Wolverine and like everybody's got a different superpower, but you need to teach them how to use that superpower so they don't self-destruct or cause chaos.

• 58:36David Friedberg?

  Bifurcate the other way, right?

• 58:38Jason Calacanis?

  They could be Magneto, right? You could, you could go the other way.

• 58:41David Friedberg?

  Not sure I get all the references, but I hear you.

• 58:44Jason Calacanis?

  Well, I mean, I'm kind of shocked given how much of a huge nerd you are that you don't understand the X-Men.

• 58:50Chamath Palihapitiya?

  I love that movie. I love that movie with the guy who's made of all the rocks and the little tree guy who's his buddy. That's

• 58:56Jason Calacanis?

  Guardians of the Galaxy, yes.

• 58:58David Sacks?

  I think, I think Jason's favorite character is the Blob.

• 59:01Jason Calacanis?

  That's coming from you? You put on COVID 20, I dropped COVID 15. What are you talking about? How many, how many Cubano sandwiches are you having? Look at your face, dude. How many cro- no croquetas, Sax.

• 59:17David Sacks?

  You're right.

• 59:17Jason Calacanis?

  Side salad.

• 59:19David Sacks?

  Bad idea, shouldn't have gotten there, you're right.

• 59:21Jason Calacanis?

  Side salad.

• 59:23David Friedberg?

  Sax, what is your, what is your, well Sax, what is your health plan? Are you, uh, now that we're coming out of COVID, are you running?

• 59:28Jason Calacanis?

  Yes, we got an intervention right now. You look terrible.

• 59:33Chamath Palihapitiya?

  You do look a little bloated. You look like a, you look like a puffed fish.

• 59:36David Sacks?

  Oh geez, I need to lose like 20 pounds.

• 59:40Jason Calacanis?

  I'm down 12 from my peak of the COVID peak, I'm feeling good. Just get a personal trainer.

• 59:45Chamath Palihapitiya?

  Speaking of COVID, what the hell is going on in India?

• 59:48Jason Calacanis?

  Oh my lord, scary.

• 59:50Chamath Palihapitiya?

  I thought the whole thing was, they were taking hydroxychloroquine for totally different reasons and this is why it's all fine.

• 59:55Jason Calacanis?

  They had some immunity or that it was hot. I mean, there was a million reasons of why they were not going to get hit and then now they're surging. And we have 60 million shots on the shelf and the number of people getting shots is going down. This is America's chance to use, uh, instead of battleships and nuclear weapons. We can use this COVID to shape global policy. We should be getting vaccines to other countries and be, once again, the shining light of the entire planet and humanity. But why are we not bringing shots to India now? We have so many extras.

• 1:00:30David Friedberg?

  I'm not sure, I'm just trying to pull up the India vax data per day. I'm not sure that there's a, um, that's as much of the issue, right?

• 1:00:40Jason Calacanis?

  I mean, it is scary to watch their, I mean, you're, you're our, our go-to science guy, Friedberg. Tell us what we're looking at here on this chart. I mean, the daily COVID cases are now hitting 250,000. 300,000 a day, Jason, right now. It broke 300, oh my lord, and the United States has gotten down to like 50, 60. Our deaths are under 800.

• 1:00:59David Friedberg?

  India is now past the peak of the US. You know, India is now seeing more cases per day than any country has seen worldwide during the whole pandemic. At over, um, you know, 300,000 a day right now. Now, and it's, you know, it doesn't seem to be letting up and we're now questioning whether it's testing. That's the limiting factor in terms of reporting on these cases. So it's, it's pretty nasty. Now there's a famous Indian politician who, who had been double vaxxed, who claims that he is COVID positive, as is his mother and sister. And so it's also creating a little bit of a concern in the market about,

• 1:01:37David Friedberg?

  you know, getting COVID. Now, he doesn't seem to be having a severe case, which is, you know, one of the, the kind of important things to take note of in vaccination is, is it's not necessarily binary. But it's certainly making a lot of, creating a lot of fear as a result of his kind of public statement about this.

• 1:01:56Jason Calacanis?

  This isn't just about cases either. 30 days ago, they were at 200 deaths a day. And I mean tragically, they're at 2100. So it's 10xed in 30 days. If it 10x's again, that's 20,000 people a day dying. This is a different level than any other country has experienced.

• 1:02:16David Friedberg?

  It's tragic.

• 1:02:17Jason Calacanis?

  And they don't have-

• 1:02:17David Sacks?

  Look, at the end, at the end of the day-

• 1:02:19Jason Calacanis?

  They don't have the hospitals, hospitals to handle this, do they? This could become a crisis of epic proportions.

• 1:02:25David Sacks?

  At the end of the day, a country's success in battling COVID is going to be about how fast they can get their population vaccinated. It's very simple, right? I mean, Israel was first, they got everyone vaccinated. Now their cases are down to almost nothing. The US is doing pretty well, although there's some room for concern. We were doing, you know, close to 4 million vaccinations a day. Now we're at like 3, 3 and a half. They're starting to slip a little bit.

• 1:02:49Jason Calacanis?

  And that doesn't have to do with Johnson and Johnson, right? That has to do with people not showing up for appointments.

• 1:02:55David Sacks?

  Yeah, and I think you gotta blame the media a little bit because they keep running all these vaccine scare stories about, you know, how this person or that person, the vaccine punched through and they got sick despite getting the vaccine. They keep selling, they keep selling all this like, you know, COVID scariant porn, you know, the, the-

• 1:03:12Jason Calacanis?

  You're so right. Do you know what I noticed the other day on CNN? This is how insincere and ratings desperate they are. When they put up their COVID stats- They put up cumulative cases and cumulative deaths. That's what they obsess on. And it's like, hey, dummies, we know what you're doing here. You're trying to scare people. You should show the graph of the deaths going down. And then why can't you take your mask off if you're vaccinated and you're outside? Let's give a reward. You were talking about this last week, didn't you?

• 1:03:40David Sacks?

  Yeah, Nate Silver had a really good tweet about this. He said that wearing a mask after you're vaccinated is now, it's like the, the blue equivalent of the red MAGA hat, where it's completely performative to say, hey, I'm on team blue. You know, even though like scientifically, it's meaningless. I, it's like the press, they keep talking about this possibility that even after you're vaccinated and you could somehow, you know, keep transmitting the virus to other people. Look. Viruses, I mean, Friedberg can explain this better than me, but viruses do not have in themselves the machinery for replication, right? They have to take over your cells, hijack your cells machinery to replicate themselves. So first they have to infect somebody. Then that person gets, you know, gets the virus, starts producing a lot of it. Then they start shedding it.

• 1:04:25David Sacks?

  If you don't get really sick, you're not going to be shedding a lot of the virus. You're not going to be transmitting it to a lot of other people. And, you know, they talk about this, this possibility as if it's like a real possibility that people could still be transmitting the virus after they're vaccinated. I mean, it's not a statistically relevant possibility.

• 1:04:43David Friedberg?

  Right. It comes down to this interpretation of everything being binary. And the reality is that all of this is on, um, you know, a, a, a statistical curve or on a kind of a grayscale. And, you know, the Sacks's point is a hundred percent correct that the probability of someone who's been double vaccinated getting infected, getting infected and then being infectious in a meaningful way is so remote. Um, that it is not even worth kind of considering, uh, in a way, and, and being double vaccinated gives you such a significant typically, right? Not for everyone, right? All immune systems are different and some of what we, we might be seeing is the difference in kind of how people develop immunity.

• 1:05:23David Friedberg?

  Um, but it is such a rare case that one could have a severe infection after getting a, uh, you know, a vaccination. Is such that it shouldn't even be considered and kind of, you know, mentioned as being a reason for continuing to wear masks and not gather and not do things. And so, you know, we started out, as Sacks pointed out, and I think this is such a true and important point. We started out with this like immediate politicization of what's the right thing to do to reduce the spread of the virus. And then that became the mainstay for that political affiliation. And now, the transition of the new world that we live in, where most people are vaccinated, we have a better understanding of the science and the statistics and the mechanisms of

• 1:06:02David Friedberg?

  transmission, we hold on and we grasp on to that initiating kind of belief system that was correct at the time, but isn't correct anymore. And it seems so difficult to get people to shift their mind, this kind of, this behavior is an ignorant behavior, and you see it in so many manifestations right now, in particular with respect to masks and behavior after vaccination and so on. And it's really brutal to watch. But we obviously digress a bit from the Indian circumstance, which is a really nasty one.

• 1:06:36Chamath Palihapitiya?

  But why now and not a year ago?

• 1:06:38David Friedberg?

  You know, it's not clear, right? So there's, someone provided an indication today that there may be as many as somewhere between 100 and 200 unique variants that we're seeing emerge in India. So there may be a lot of interesting variants, interesting technically, but not obviously for human life, but a lot of dramatic variants or significant variants that might be increasing the infectiousness right now. And in particular, you know, behavior has shifted in a way that's enabling, you know, some of these transmissions to occur. You know, a lot of people let their guard down and so on in a way that maybe they weren't six months ago. And, you know, there may be some forced evolution associated with partial vaccination, totally

• 1:07:23David Friedberg?

  a theory right now, where, you know, 110 million doses have been given in India so far. So, you know, in order for a virus to succeed, the viral variants that are going to infect more likely, you know, through a partially transmitted, a partially vaccinated population are the ones that are winning out. So there's a lot of... You know, confounding factors here. We're not really sure. Um, but it is, uh, it is pretty brutal. Um, what is, uh, what is going on? Um, I will say like this notion that vaccination does not prevent uh, protection against variants is not a binary statement either. This is really, really important. I've been wanting to say this for a couple of our shows.

• 1:08:01David Friedberg?

  When you get this vaccine, um, what you're doing is you're training your cells. You're giving your cells the RNA to print the spike protein and that protein is now in your body. Everyone's immune system then reacts differently to create antibodies to that protein. The antibodies that Chamath makes and Jason makes and Sax makes and I make are all going to be different.

• 1:08:20Chamath Palihapitiya?

  But if you had to pick, whose would be better?

• 1:08:23David Friedberg?

  I can tell you Sax is probably going to be the worst off, but yeah.

• 1:08:26Chamath Palihapitiya?

  Jason's sort of the most sluggish for sure. They're the slowest.

• 1:08:29David Friedberg?

  Yeah, but, but there, there are, there are likely tens of thousands of novel variants that our B cells will make that will, that will bind to that spike protein and get rid of it. And we will each have many hundreds of potentially thousands of novel antibodies that our immune system will make. So keep that in mind. You now have a portfolio of antibodies that your body is producing to that spike protein. So now when, when a, when a COVID, uh, when a SARS-CoV-2 virus shows up in your body, some of those proteins, some of those antibodies are going to be really effective at getting rid of it. Some of them are not. Now the protein in the SARS-CoV-2 virus changes slightly. Some of the other antibodies you have are going to be effective and some of the other ones are not. And it is that portfolio that is, um, that is going to change, uh, sorry, that, that portfolio that is going to define

• 1:09:13David Friedberg?

  your success at fighting off a specific variant of SARS-CoV-2 where the spike protein is changing slightly with each variant, right? So these variants change the composition of the protein. The antibodies that you have are going to be, you know, more or less successful depending on how that variant changes. And that's, um, where there may be cases where the number of antibodies that you are producing or, or the success of the antibodies that you particularly have are a little bit lower for a particularly new variant. It doesn't mean that you're going to have an infection that's going to be a runaway infection in your body. It means that it might take you longer or it might be a little bit harder for you to clear that particular variant, given the repertoire of antibodies that you've produced. And that's why this isn't, that's why this isn't binary, right? It could be that it's like, hey, this variant shows up, boom, instantly I got rid of it.

• 1:09:57David Friedberg?

  I don't have any infection, but someone else might have like, you know, maybe a slight bit of, you know, there might be a couple of days where they'll feel a cold as your body's clearing it out. And the measure of this is this, um, this neutralizing tyder, which is the way they take people's blood with all of their antibodies in it and they put these different variants in. And they can measure how effective your antibodies are getting rid of that new variant. Um, and the, the less effective your antibodies are, the higher this, this, this tyder needs to be. And as a result, it could be a little bit longer, a little bit harder for you to get rid of that, that virus. And so, so again, like when viral variants start to emerge in the population and as they kind of take off, um, and become more dominant, it doesn't mean that we don't have immunity.

• 1:10:39David Friedberg?

  It means that immunity might be slightly affected, um, but not, not, it's not one or zero, right? Because you've got hundreds or thousands of antibodies to, to fight against COVID uh, in your body. And I think that's really important. So we should, you know, while there may be some variants that might be what we call variants of concern, meaning they can kind of slip away a little bit from most of the antibodies you have. It doesn't mean you're not going to be able to fight them off with the antibodies. And so I don't know if that was too technical or too difficult to understand, but I think it's really important.

• 1:11:04Jason Calacanis?

  It makes total sense.

• 1:11:05David Sacks?

  Yeah. And, and, and one thing just to add to that is, is that most of the variants that the press keeps reporting with alarm that are somehow, that, that basically are going to be vaccine proof, they turn out not to be, you know, that we, they're, very shortly, uh, there, there comes out a new article basically saying that the vaccines work. And so the press keeps reporting these isolated cases as proof of something that's not actually true.

• 1:11:33Jason Calacanis?

  Yeah. I mean, this is, I just want to give the press, um, a kind of, I just want to, and accounting for the press in the last 30 days. One, obsessing about every single shooting and then inspiring more shootings. When you obsess about these mass shootings, you inspire more of them. It is a proven fact. It is inducing people to do this more. It's not. Exactly correlated, but there is proof about this. Same thing with suicides. That's why we don't cover any young people killing themselves in the Bay Area in a certain town that we all know had a rash of them, or we don't cover suicides on the Golden Gate Bridge anymore because when they used to cover them and put it on the cover of the Chronicle,

• 1:12:13Jason Calacanis?

  two more people would jump off the next week. Number two, they were obsessing about riots. I mean, I don't know if you turned on the TV during the deliberations. They were absolutely gleeful about the potential of trouble happening. And that, of course, incends more people to go out and see what's going on because you're going to get on TV and because other people are doing it. And humans model other humans. And then finally, with the goddamn Johnson and Johnson, eight people have blood cuts. Nobody died. Am I correct in that?

• 1:12:45Chamath Palihapitiya?

  One person died.

• 1:12:47Jason Calacanis?

  One person died. Okay. So we don't even know. And then they obsess about that for days. Like, you can't cover these things wall to wall and not think that you don't have culpability. The CNNs, the Foxes, etc. You're obsessing over these things and it's scaring people to not take vaccines. It's incenting people who are crazy, you're dog whistling crazy people to go get a gun and to use that as a way to get famous. And you're doing the same thing, you know, with these riots in the streets.

• 1:13:17Chamath Palihapitiya?

  We're all in the opinion business.

• 1:13:21David Sacks?

  But the problem is when they don't just hype things, but they actually give you factually incorrect information because, you know, they're trying to scare people into getting higher ratings. You know, fear porn.

• 1:13:31Jason Calacanis?

  It's also framing, David, which is a different thing than lying about statistics. They would say, we're not lying about the statistics. That's how many people died of COVID. But what they're doing is they're framing the cumulative number to make you scared. Today, 400,000 people have died from COVID. It's like, no, over 14 months, 400 people died of COVID, 700 people died today. And that's the lowest number since November. But that wouldn't get more people to tune in.

• 1:13:54Chamath Palihapitiya?

  Boys, I want to tell you guys something.

• 1:13:56Jason Calacanis?

  It's frustrating.

• 1:13:58Chamath Palihapitiya?

  Uh, I'm vaccinated. Um, I want to, I want to see you. I want to hug you.

• 1:14:05Jason Calacanis?

  Keep your shirt on.

• 1:14:06Chamath Palihapitiya?

  And it's, uh, it's 5:30 PM and I've been, uh, working since 5 AM this morning.

• 1:14:11Jason Calacanis?

  Oh, is that what that look is? Exhausted?

• 1:14:13Chamath Palihapitiya?

  Exhausted.

• 1:14:16Chamath Palihapitiya?

  I came back from Easter vacation, guys, and I've been up between either at 5 AM or 6 AM every fucking morning.

• 1:14:24Jason Calacanis?

  You're working hard.

• 1:14:24Chamath Palihapitiya?

  I am grinding, but I am tired.

• 1:14:27Jason Calacanis?

  All right, let's wrap here. When we, as we wrap, what, what's going on? Just because people have been asking, um, what's going on with the SEC and Sacks and, and just some more reporting or something? Cause I, I was watching CNBC and they said, hey, you're doing everything right, but there's a lot of other people who are doing things wrong. Explain to us what's going on.

• 1:14:43Chamath Palihapitiya?

  Uh, it's, I mean, it's a, it's a very specific, um, accounting issue, which is that some Sacks, many Sacks, and in fact, many companies, let's just put it that way, not just Sacks, but many companies use warrants. And the prevailing guidance on certain warrants was that they were equity. And basically that gets put into a balance sheet statement where you have equities, assets and liabilities. And, you know, it sits on one side. And, uh, basically what they said was they issued some refined guidance that said, actually, in these specific cases, these should be really listed as liabilities. So then it needs to move from this column to that column. But when that, when you do that, you go through, you know, a bunch of cascading implications and effects and, you know, revisions and restatements.

• 1:15:26Chamath Palihapitiya?

  And so that's what the, that's what the entire securities industry is dealing with right now, which was, um, you know, this guidance by the SEC and the implication. So that was on the 12th. I mean, just so you know, today we just filed the updated, um, all of our updated docs, plus the updated S4 for so far. So we were able to work around the clock and just kind of get it done. And hopefully what we've also done is create a, a bit of a way forward and a path that other folks can use to kind of like accelerate their, their progress. But, um, it's definitely created, um, a ton of work. Um, but, uh, but we're, I think we're, I think we found the right answer. So.

• 1:16:00Jason Calacanis?

  Ultimately good for you because you want to see it be buttoned up, right?

• 1:16:04Chamath Palihapitiya?

  Yeah, and also, I think like the simpler path forward. So I mean, if you just think about capital market stability for a moment, like warrant coverage should probably go away. Number one, right? So take all the warrants to zero. Second thing that should happen is that, you know, I think this is an opportunity to take a step back and figure out how to really make sure that the SPAC sponsors are of the highest quality. Somebody told me this incredible thing today. I am one of five groups that put up any money when we do a pipe in our deals. Meaning, he said to me, 95% of sponsors put up literally a zero dollars.

• 1:16:35Jason Calacanis?

  No skin in the game.

• 1:16:36Chamath Palihapitiya?

  Zero. And so, of course, you're going to have, you know, extremely loose underwriting requirements if that's the case. And so, you know, the idea that I'm thinking about, which someone proposed to me, which I think is very clever, is this idea that, you know, you earn more of the promote, more money you put up, right? So for example, like, you know, in SoFi, I think we put in $275 million. So, I mean, we really, you know, that's a meaningful commitment. And it closes the gap between, you know, what your equity is issued at and what investors are buying at. And that's very healthy, right? And so I think there's all these mechanisms that will clean up the SPAC market. We need to have a much

• 1:17:18Chamath Palihapitiya?

  more refined criteria to allow people to be sponsors. And we need to make sponsors in a position where they must put in money so that they actually do the work. If you get something for free, let's be honest, you won't do the work. If you're forced to write a check, you're going to really think about it.

• 1:17:36Jason Calacanis?

  It's 100% true. Show me an incentive, I'll show you the outcome. And this happened on Angel List, where in the beginning days of Angel List, you had some "angels," quote unquote, who didn't have any money. So they put 1,000 or 2,000 into a deal. Then they would have 500,000 come behind them. And so you had this 500 to 1 ratio of dollars to skin in the game. And it was like, well, why wouldn't a syndicate lead put every company out there and not even put, you know, they have no skin, which is why when you have a venture fund, I don't know what they expect us to put in typically.

• 1:18:05Chamath Palihapitiya?

  Well, the problem is venture funds are 1% to 2%. I was 25%.

• 1:18:09Jason Calacanis?

  Well, 1% to 2% is, it can be pretty significant if you're doing a fund every three years. I'm doing this and it's, it winds up being millions of dollars for me, but I'm happy to do it because I believe in my own ability. All right. As we wrap, anybody have a plug or anything they want to let people know about?

• 1:18:22Chamath Palihapitiya?

  Oh, I want to talk about this one little thing. I just, not to talk about it, but I would like to tell you guys to read it because it is so interesting. Basically like European soccer tried to incite a revolt where like the top teams across all the different leagues came together to try to create a super league, but it ended up like they were like a band of evil villains and like fans erupted, everybody erupted and then you know it existed for 24 hours, but in that 24 hours it looked like a complete rewriting of sports and sports like laws and you know, it was an incredible thing. There's an article in the New York Times, I'll post it in here and folks want to read it. It's really, really fucking funny.

• 1:19:04Jason Calacanis?

  And that will be on season two of Ted Lasso. I don't know if you guys watched Tim Cook's keynote this week with the new IMAX, which are really beautiful. He was so excited about Ted Lasso and Ted Lasso is a great show, but I mean, it literally is the the Apple show. Did anybody, you guys see Ted Lasso yet?

• 1:19:23Chamath Palihapitiya?

  What is it? The television show?

• 1:19:25Jason Calacanis?

  You guys haven't seen Ted Lasso, the TV show yet?

• 1:19:27Chamath Palihapitiya?

  Is it on NBC or CBS or what channel is it on?

• 1:19:30Jason Calacanis?

  TV plus, whatever that is.

• 1:19:32Chamath Palihapitiya?

  Channel six? Is it on channel six?

• 1:19:34Jason Calacanis?

  Apple TV plus. You gotta go on your Apple TV and then find an Apple TV plus on your TV and you'll find it eventually. It's one of their paid, you know, they have their own Netflix competitor called Apple TV plus. So on your phone, if you type Apple TV, you'll have Apple TV.

• 1:19:49Chamath Palihapitiya?

  I have Apple TVs. I have Apple TVs behind my TVs.

• 1:19:52Jason Calacanis?

  No, no, but there's Apple TV plus, which is their Netflix. So there's a plus.

• 1:19:56Chamath Palihapitiya?

  Is it a better, is it a better Apple TV?

• 1:19:57Jason Calacanis?

  No, no, no, it's content. It's a content subscription you could have. They just, they screwed that part up. Hey, shout out. I just wanted to get.

• 1:20:07Chamath Palihapitiya?

  Sorry. So who's Ted Lasso?

• 1:20:09Jason Calacanis?

  Ted Lasso is a Jason Sudeikis comedy that is incredibly heartwarming about a really heartwarming, joyful, kind person who goes from America to the UK to become a soccer coach.

• 1:20:23Chamath Palihapitiya?

  Yeah.

• 1:20:23Jason Calacanis?

  That's really great.

• 1:20:25Chamath Palihapitiya?

  I hate it. That's boring. That's really boring.

• 1:20:27Jason Calacanis?

  It's really kind. You would hate it, David. It's not cynical.

• 1:20:29Chamath Palihapitiya?

  I do. I hate it. You should watch, you should watch, you should watch Gamora on HBO Max.

• 1:20:35Jason Calacanis?

  I started it. Yeah.

• 1:20:37Chamath Palihapitiya?

  Unbelievable.

• 1:20:39Jason Calacanis?

  I watched the first episode. I was like, whoa, here we go.

• 1:20:42Chamath Palihapitiya?

  It is so super. And also you should watch it in the original language because it's not really Italian. It's like Neapolitan. And so like, you know, I can catch and understand maybe 20% of the words. And I said to Nat, I said, what language is this? She's like, I had no idea. I watched it in Italian subtitles. So it was, it was beaut- it's beautiful, beautiful. It's so intense. It's like The Wire, but like, I mean, you know, set in Italy. It's incredible.

• 1:21:06Jason Calacanis?

  Uh, Afterlife is also good. Ricky Gervais, if you want something cynical and heartwarming, that's for you, Sax.

• 1:21:11Chamath Palihapitiya?

  Love you guys.

• 1:21:11Jason Calacanis?

  Love you Sax.

• 1:21:12Chamath Palihapitiya?

  I'll see you.

• 1:21:13Jason Calacanis?

  Sax, can you please come back to the Bay Area so we can play poker?

• 1:21:16Chamath Palihapitiya?

  Yeah.

• 1:21:17Jason Calacanis?

  Why don't you just fly to on the way back?

• 1:21:19David Friedberg?

  To Miami? Are we going to Miami?

• 1:21:21Jason Calacanis?

  I'm going to, I'm going on a trip. I'll just leave it at that. I'll talk to you guys.

• 1:21:27Jason Calacanis?

  Recognizance trip.

• 1:21:29Chamath Palihapitiya?

  What?

• 1:21:30Jason Calacanis?

  Recognizance.

• 1:21:31Chamath Palihapitiya?

  Yeah, recognizance. I'm gonna be able to understand what's going on. Do you understand that that, that that term is more associated with bail and in jail than it is what you think it means?

• 1:21:42Jason Calacanis?

  Recognizance like.

• 1:21:44Chamath Palihapitiya?

  Jason, you are released on your own recognizance.

• 1:21:46Jason Calacanis?

  That's what I'm talking about.

• 1:21:47Chamath Palihapitiya?

  You want to do reconnaissance.

• 1:21:50Jason Calacanis?

  Reconnaissance. That's what I said. Reconnaissance.

• 1:21:53David Sacks?

  Yeah, I think you'll be wearing an ankle bracelet on your recognizance.

• 1:21:58Chamath Palihapitiya?

  Actually, no, they don't, they don't fit on his ankles.

• 1:22:02Jason Calacanis?

  I always have to mispronounce one word to make it a good episode.

• 1:22:05David Sacks?

  For Jason, it'll be a cankle bracelet.

• 1:22:08Jason Calacanis?

  You just can't talk, Mr. Doughboy. What are you talking about? My God.

• 1:22:12Chamath Palihapitiya?

  What? Do you, is it called a bracelet if your calf and your ankle are the same circumference?

• 1:22:18Jason Calacanis?

  Put it this way, if Sax, Sax is wearing two of them right now, you'd never know. Sax is wearing one on his neck. What happened to your neck Sax?

• 1:22:25David Sacks?

  We're out, we're out.

• 1:22:26Jason Calacanis?

  Where's your neck, Jabba?

• 1:22:28David Sacks?

  See ya, see ya.

• 1:22:30Jason Calacanis?

  Jabba the Hutt over here.

• 1:22:32Chamath Palihapitiya?

  Love you guys.

• 1:22:32Jason Calacanis?

  Love you. Love you besties. Bye bye. We'll see you all next time.

• 1:22:57David Sacks?

  Besties are back!

• 1:22:59David Friedberg?

  That is my dog taking a piss in your driveway.

• 1:23:07Chamath Palihapitiya?

  We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension that they just need to release somehow.

• 1:23:15David Sacks?

  What your B B? What your B? What your B? B? What? We need to get merch! Besties are back!