E2: Rebooting the economy, understanding corporate debt, steps to avoid a depression & more with David Sacks

Follow @chamath: https://twitter.com/chamath Follow @jason: https://twitter.com/Jason https://linktr.ee/calacanis 0:01 Jason & Chamath catch us up on their quarantines 1:20 Chamath intros David Sacks 4:40 David explains what their poker group chat has been like since COVID-19 started, and how Jason, Chamath & himself fall on the optimistic/pessimistic spectrum 6:58 How have the past few months defined David's view on the world, and what is his reaction to the US government's response? 12:22 Did the US health apparatus do its job? How could it improve? Why aren't masks already mandated? 19:33 Culture clash between scientific experts & entrepreneurs, thoughts on Chloroquine as a treatment method 27:00 Are US bureaucrats taking the intelligence of US citizens for granted? How liable is Trump? 30:08 David gives his plan to reboot the economy: what now? How does the US avoid a recession/depression? 36:22 Chamath & Jason assess David's plan 43:21 Have the stimulus packages & SMB loans been enough? Will the trickle-down approach work? 49:21 Should the US be allowing companies to declare bankruptcy? How should they decide who gets aid and who does not? 52:02 Chamath explains how corporate debt works through the lens of Ford 56:42 Why is the US not giving a larger % of the stimulus to average Americans? Chances of unrest if quarantine continues? 1:02:17 Trump vs. Biden: who has the edge in 2020 right now? 1:11:24 Was Jack Dorsey's $1B donation the strongest move of 2020 so far?

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

• 0:00Jason Calacanis?

  All right, everybody. Welcome to episode two of the All In Podcast with Jason and Chamath. Some basic ground rules here. If you're not into speculation, you don't like to debate, you don't like to question authority, and you don't like to get a shit ton of inside information, I'm going to actually turn the podcast off right now and go download the Daily from the New York Times, or All Things Considered, or some other bullshit. But we're here to do speculating and talking about inside information and the real deal. With me, as always, my co-host Chamath Poli-Hapatia. If you don't know how to pronounce it, Poli-Hapatia. Chamath, how you doing? You holding up okay?

• 0:34Chamath Palihapitiya?

  I am doing fabulously well. We are in week four of our lockdown sheltering in place here.

• 0:40Jason Calacanis?

  You losing your mind?

• 0:42Chamath Palihapitiya?

  I'm not, because I'm fortunate to be in the suburbs. I think if I was cooped up in an apartment in the city, I would feel a lot worse than I do right now. But there's a lot of fresh air. The weather's finally turned. It's not raining as much. So we get to see the sun a little bit. Makes a big difference.

• 0:59Jason Calacanis?

  Yeah, can you imagine 15, 20 years ago, holed up in an apartment with three kids who are home from school? Like, these people who are in a city, they must be going insane.

• 1:08Chamath Palihapitiya?

  I mean, there's so much value to visiting New York, but if you're stuck there in a quarantine lockdown, I don't know what I'd do.

• 1:16Jason Calacanis?

  All right. Well, we got a great guest today. Why don't you introduce our guest, Chamath?

• 1:21Chamath Palihapitiya?

  Well, we are really lucky here. This is a person who I've known now for, I don't know, maybe 15, 20 years. What I would call him is one of my best show ponies. I have ridden this motherfucker up and down in everything he's done. He has made me so much money. It's like owning the publishing rights to the YouTube back catalog. This is how prolific this guy is.

• 1:46Jason Calacanis?

  It's like owning the Beatles' back catalog, right? You're like, Michael Jackson, you bought the...

• 1:52Chamath Palihapitiya?

  So David Sacks, though, no, all kidding aside, David Sacks is one of the most incredible people that we know, one of our closest friends. Big bit of a background on David, he almost became a lawyer, but dropped out of law school after going to Stanford and worked with Peter Thiel at PayPal. And was a chief operating officer there, left PayPal, moved to Los Angeles, unsuccessfully kept his virginity, found a way to not get laid as a movie producer in Hollywood, which seems to be impossible, but David found a way of doing it.

• 2:31Chamath Palihapitiya?

  Produced a movie, one of the best known movies of that generation called Thank You For Smoking. Then moved back up here, started Genie, pivoted, started Yammer, sold that for more than a billion dollars to Microsoft and became during that time, frankly, one of the most unsung heroes of company founders and was a prolific investor in some of the most well-known iconic businesses of this last generation, Airbnb, Uber, Slack, the list goes on and on, and now is the co-founder

• 3:15Chamath Palihapitiya?

  of Kraft Ventures, which is essentially David's early-stage venture business where he

• 3:22Chamath Palihapitiya?

  helps a lot of really great companies get to the next level and frankly, the level that he's been playing at for a while. Despite all of that, again, I just see him as a show pony.

• 3:34Jason Calacanis?

  Yeah, some money printing machine. If you can get in on that fund, if you can get in on those companies, you're gonna do well. Sacks is an operating machine. Welcome to the program.

• 3:43Chamath Palihapitiya?

  David Sacks.

• 3:44Jason Calacanis?

  David, welcome to the pod.

• 3:45David Sacks?

  Thanks for having me.

• 3:47Jason Calacanis?

  How are you holding up, Sacks, just personally, family, everything, companies, just generally psychologically? How is this impacting you?

• 3:56David Sacks?

  You know, I think we're all fortunate to be safe. And, you know, we started paying attention to to the virus, I guess, in February because of Twitter tech. You know, there are a bunch of people on the tech ecosystem who started tweeting very alarming things and. In February or even going as far back as like January 30th. And I didn't know for sure if they were right, but some of them were friends of mine. And so I, we were to get seriously. And we started doing work from home, I think on March 1st and we've all been kind of self-isolated since then. And fortunately, everyone has been safe and, you know, holding it pretty well.

• 4:41Chamath Palihapitiya?

  Saxypoo, tell, uh, tell everybody on the pod, um, our group chat and, um,

• 4:49Chamath Palihapitiya?

  basically what it is, um, what we do on that group chat and, um, what you think about it.

• 4:57David Sacks?

  Yeah. So, I mean, basically our poker group and sort of extended poker group, which is about, um, I don't know, it's probably about 20 players who rotated in and out of our poker game. We have a chat group and, um, we used to just talk about cards and stuff like that, but, uh, but very rapidly it became a, a place to share information about the virus and the response and what was going to happen. And the remarkable thing is that whatever we talk about ends up becoming like, it's like everyone else has figures it out about a week or two later. And I think it has helped to stay about a week or two ahead of the curve on this thing.

• 5:32Chamath Palihapitiya?

  Has it, has it generally been mentally reassuring or has it amplified your anxiety talking about it all the time in that chat?

• 5:39David Sacks?

  Um, well, the interesting thing is that we have people in that chat who are very optimistic. We have people who are very pessimistic. We have people in between and then we have people who swing around quite a bit. And, um, so I think you get like all the perspectives. Um, and I think, I guess my view of, of the future is that very hard to try and figure out what's going to happen. You have to think about it in terms of scenarios. Um, and so the, you know, the chat group helps, you know, understand like what those scenarios, you know, might look like.

• 6:11Chamath Palihapitiya?

  So where would you describe each of us then on the positive, negative, and then swingy? You're, you're in which camp? Are you swingy?

• 6:19David Sacks?

  Um, so, so I think the three basic scenarios are V, U and, and L. And, um, Jason, I would describe you as, as, as a V. Um, I think Chamath is closer to the U, which is the, the most pessimistic. Uh, sorry, the, the L is the most pessimistic and then the U is sort of somewhere in between. And, um, I I sort of swing between the U and the L, um, but um, but I also understand the case for the V, uh, and and and those initials really refer to the shape of the recovery to come and how quickly we'll we'll come out of this.

• 6:58Chamath Palihapitiya?

  So David, before we drill down into your beliefs on the future, let's talk about the past.

• 7:06Chamath Palihapitiya?

  What do you think this entire episode has shown us, whether it's from a public health perspective or an economic perspective, but how would you summarize your view of the world as it's been revealed to you in the past two months?

• 7:24David Sacks?

  Um, yeah, I mean, I think that, um, uh, what what I really should, you know, we live most of our lives during, you know, the these relatively calm periods and then our lives get redefined by these, you know, apocalyptic events. And, uh, and, you know, we're not really wired for this this rate of change. Um, I think it was Lenin who said something like there there are some decades when nothing happens and there's some weeks where decades happen. And, um, and I think that that's basically what what's happening here. And it feels like, I mean, a little bit, the last thing that was like this was was was nine 11 where, you know, you woke up that morning, saw the the twin towers coming

• 8:08David Sacks?

  down on TV and you realize that we were now in a different era. And, um, something like that's happening here as well, just in in slow motion.

• 8:18Chamath Palihapitiya?

  What do you think, um, the government did right? And what do you think that the government did wrong?

• 8:25David Sacks?

  Well, I mean, um,

• 8:29David Sacks?

  you know, limiting the flights in from for Wuhan or China was a good initial step. But after that, um, it seemed like the response was very slow and, um, and and sort of, um, disbelieving and kind of incredulous. And and we've seen this basically everywhere. The initial response of just about every country with a few notable exceptions, um, in in Asia that had previous experience with SARS. But, um, but what we've seen in just about every country is that nobody believes it's going to happen to them until it happens to them. And then even in the United States, um,

• 9:06David Sacks?

  You know, it's, it's, it's, it's like no one believes it's gonna happen in their city until someone in their social network gets, gets the virus and then all of a sudden they take it seriously. And so there's always been this like, it's like this slow moving train wreck where you see it coming and people are just a little bit too slow to react. And you know, the problem is it's all about the doubling time. So if the virus doubles, you know, every two or three days, um, in the absence of any action at all, maybe even doubles every day in a, in a very dense city like New York City, just waiting two or three weeks can make a thousand X difference. Um, in, you know, it's somewhere between, I guess 10 X and a thousand X difference depending on the doubling time, whether if

• 9:48David Sacks?

  you wait two weeks or three weeks. Um, I saw an article on, there's a bunch of articles now talking about, um, why has New York been hit so hard and California has been relatively mild? And, um, and the articles were saying, you know, California only declared shelter in place one week ahead of New York. How can it be doing so much better? And they're looking for all these different causes and explanations. And, you know, even one week makes a huge difference. If in New York, um, New York's been hit about 12 times harder than California, but if the doubling time is just two days, um, one week is a 12 X difference. That's how the exponential, uh, exponentiality works. And so like being

• 10:31David Sacks?

  at a week, but, uh, you know, or two weeks or three weeks behind the curve is incredibly costly.

• 10:37Jason Calacanis?

  How do you break down, um, local government versus federal government and the action there? And is America's architecture with states' rights and powers a benefit in this case? Or, um, is it a negative? Cause we did see the blue states take it very seriously. The red states take it less seriously. The red states have a lot more distance between individuals. The blue states tend to be coastal cities. They're more dense. Maybe you could handicap for us the, the spread of the virus with the layer on top of it of local governments and the political climate we're in.

• 11:13David Sacks?

  Yeah, I think the decentralized nature of the American system is both a blessing and a curse in this type of situation. The curse is that it's been very hard to create a unified national strategy. We're doing lockdowns piecemeal. And so the lockdowns get thwarted as people move around between areas that are not locked down and start new outbreaks. Very hard to control a virus that way. We're also not able to act in the authoritarian way that we saw China act and Wuhan to control the virus very early on. But the blessing of decentralization is that it's allowed the governors of states to react,

• 11:57David Sacks?

  and it's allowed private companies to react, and it's allowed entrepreneurs to react. And you see a lot of people helping in different ways. And that can make up for having a more ineffectual centralized response, which isn't likely to work completely in a country the size anyway.

• 12:20Chamath Palihapitiya?

  Do you think that the health apparatus of the United States did its job? And where do you think the areas of opportunity are to improve?

• 12:32David Sacks?

  Well, if you're talking about the health system, it seems like the health system has done a great job in reacting to the virus in terms of hospitalizations, adding hospital beds, adding ICU capacity. Even in New York, it looks like, I think Cuomo just said today that they've got ICU capacity, they've got hospital beds. I think the hospital system's done a great job rapidly creating more capacity. We haven't seen a situation like in Italy or even the UK where they're literally rationing ventilators and making horrible triage decisions about who's going to get a ventilator and who's not.

• 13:16David Sacks?

  We haven't seen those types of horrors in the US. But if by health system we mean the FDA, the CDC, the WHO, which is part of the US system, but we do rely on them to some extent, you've just seen, I think, amazing...

• 13:35David Sacks?

  Really malpractice or negligence, if they're a pharma company, I think they'd be sued. You have, you know, you have on the CDC website, things that, I haven't checked it today, but as of a few days ago, were just blatantly not true. I mean, saying that you only needed a mask if you were actually taking care of a person with, with, with COVID-19, that, that standing, say, a three-foot distance was sufficient, that that was sort of an acceptable amount of social distancing, even if the other person is coughing or sneezing, and that's not true. They're just saying things that weren't true. And then, you know, on the, you know, the CDC

• 14:17David Sacks?

  and the Surgeon General, until basically the last few days, were telling us that masks didn't work, were ineffective, didn't, and then now they've, they've flipped to recommending them, but they're still not required. And I just wrote a blog today that I published about half an hour ago that.

• 14:35Jason Calacanis?

  I thought the best part of that blog post, by the way, it's up on Medium, and Sacks has tweeted it, and I retweeted it, David, is what you said at the end, which is, we're taking the most draconian measure, quarantining people, which we use this softer term, shelter in place, but it's a quarantine, call it what it is, you're not allowed to leave your house, except under rare circumstances. But we won't do the basic thing of wearing the mask, it makes no sense. And Chamath, I think you had a really interesting question early on here, which I think we should all circle back on one more time, which is, what, what is this reveal, right? Like, in this kind of a crises, and I love the statement of Sacks, where, you know, some decades, nothing happens, and then a week, you have a decade happen. The

• 15:17Jason Calacanis?

  thing that I am, I think is the big takeaway for me, is handicapping who you can trust, and what people's agendas are, and how they behave in a crisis, because there are a group of people building models. And what is the motivation of somebody who builds a model? We think about, we all get pitched as investors, or when we worked inside of companies, we build models, and we know the models mean nothing, they're made by humans. And what's the motivation of somebody building a model in today's climate?

• 15:45Jason Calacanis?

  Then people adopt that model and there's life or death. What would you handicap? Would you go conservative? Would you go aggressive? Would you lean into people dying in the case of supporting the economy? And so the there's the model makers, there's the government, local and federal. You have the media who are trying to get clicks in some cases. You have capitalists who are trying to, you know, protect their book and their bets. How did we all look at and think about? People's agendas and like the CDC having an agenda, the local government and the model makers having agenda. Chamath, maybe you could take that one.

• 16:19Chamath Palihapitiya?

  Yeah, I um, I think that the masks issue is actually the most instructive thing uh, in this whole debacle. Um, and the reason is that there was pretty obvious data very early on that it was um, something that had unknown but pretty useful upside and absolutely zero deleterious downside. Right? So if you were thinking about risk management and I gave you some options. Option one is do nothing. Option two is here's some drugs that you can take prophylactically.

• 17:03Chamath Palihapitiya?

  And I don't really know the either the efficacy or the long-term damage to a broad-based population of people taking them. And option three was a piece of cloth over your nose and mouth.

• 17:15Jason Calacanis?

  Yeah.

• 17:16Chamath Palihapitiya?

  And

• 17:17Jason Calacanis?

  For 10 cents.

• 17:18Chamath Palihapitiya?

  And apparently at a minimum, it prevents other people from smelling your bad breath. But at a maximum, it prevents projectiles of of disease, glade and spit getting into your orifice.

• 17:30Jason Calacanis?

  Death vapor.

• 17:31Chamath Palihapitiya?

  Causing you to die.

• 17:33Jason Calacanis?

  Yes.

• 17:33Chamath Palihapitiya?

  And and we couldn't agree that that was a

• 17:37Jason Calacanis?

  Why? Why? Why is this? Was the agenda here because they didn't want people buying up the masks? And not going to healthcare workers? Why couldn't we agree on something this simple?

• 17:48Chamath Palihapitiya?

  Because it was never about the N95 masks. You could have worn a cloth mask, a teacloth could have covered it up and given you 70% efficacy. This has everything to do with incentives and everything to do with your other question as well, which is like, you know, how, why do modelers behave the way that they do? All of this is about being taken seriously. And so to be taken seriously, you have to understand the incentives in the game that you're playing. So for a modeler and a forecaster, the incentive is all around being conservative because that's how you're taken seriously. There's nobody that has any upside in showing a model that shows 10,000 people dying.

• 18:33Chamath Palihapitiya?

  All of the attention and the the gravity with which you're taken and the attention that you get is when you first put out a model that shows that 2 million people could die, which is what Imperial College did. And then eventually you walk it back and you walk it back. And after the actuals exceed the forecast, then the data converges on what actually happens and you see that these models were woefully inaccurate. It's the same with why the CDC or the WHO are just so completely incompetent. Because the incentives in those organizations are essentially to play their game. And that game is not one of public health, but it's one of politics.

• 19:15Jason Calacanis?

  Right.

• 19:16Chamath Palihapitiya?

  And so you have these people fighting each other over political territory and the right to basically make decisions versus the actual substance and the validity of the decision.

• 19:27Jason Calacanis?

  David, does that does that correlate with your thinking and then superimpose the media on top of that?

• 19:33David Sacks?

  Yeah, I mean, so I think there's a couple of things going on. One is that that there is a huge culture clash going on between the people who need conclusive scientific proof before they're willing to recommend any course of action. And then between other people who are willing to take a more experimental approach to try things to iterate the way that we do in startup land when confronted with kind of. You know, company existential issues. And, and the latter approach is smart when, you know, there's a lot of upside in trying something and not much downside, you know, and, and the, and, and the, the, the, the other approach

• 20:17David Sacks?

  of this sort of this scientific, the pseudo-scientific sounding approach where you're constantly demanding conclusive evidence. It's actually people pretending to be smart, you know, as people who want to sound smart, but it's actually a pretty dumb approach. And so we've seen this like culture clash playing out over and over again.

• 20:38David Sacks?

  You know, and.

• 20:40Jason Calacanis?

  So experts, should read it, repeat it back to you, David. Experts are afraid to do something experimental with low downside because they have reputations and they want to sound smart. Whereas entrepreneurs, or maybe capitalists or other problem solvers, or perhaps even gamblers, are going to say, there's no downside here. What's the downside to putting a mask on? Nothing, let's try it. The same thing with chloroquine and the Z-Pak. Very early on, people were saying, like Elon and other folks in our circle, why not just do it?

• 21:06Chamath Palihapitiya?

  Well, hold on a second, hold on a second. Chloroquine, let's not put that in the same category.

• 21:09Jason Calacanis?

  Okay, why?

• 21:10Chamath Palihapitiya?

  This is the point. Because it's a drug, Jason.

• 21:12Jason Calacanis?

  Yes.

• 21:12Chamath Palihapitiya?

  It's a drug for malaria.

• 21:14Jason Calacanis?

  Okay, but on the spectrum.

• 21:15Chamath Palihapitiya?

  You have zero evidence, so, no, no, Jason.

• 21:17Jason Calacanis?

  Of taking it if you're, it's sick already.

• 21:19Chamath Palihapitiya?

  No. We still don't know.

• 21:21Jason Calacanis?

  Right.

• 21:22Chamath Palihapitiya?

  Let's be clear, okay? So masks is a wholly different thing. This is why I said it that way.

• 21:27Jason Calacanis?

  Yeah.

• 21:27Chamath Palihapitiya?

  You, you, if, the, the minute you start to add drugs, you come off as a armchair epidemiologist and anybody reasonably smart can poke holes in your theory and you sound like a fucking moron. You cannot sound like a moron by telling people to wear a cloth over their nose and their mouth.

• 21:43Jason Calacanis?

  Okay, but the next step, if you were in the hospital and you've been diagnosed and they said, hey, the doctor says, you might want to try this. There were people who were saying, don't even try it. And there was a direct correlation when Trump said he was behind it. It seemed like the media and everybody were like, this is the worst idea ever.

• 22:00Chamath Palihapitiya?

  I don't know, but, but, but this is your point, which is that the incentives of that game are to politicize things versus think about what's in the best interest and the public health interests of either the United States or the world.

• 22:11Jason Calacanis?

  But aren't we in agreement to try it if you were, if you were in the ICU and they said, hey, you want to try this? You wouldn't try it?

• 22:17Chamath Palihapitiya?

  No, but this is the problem is like the posture of the American and political infrastructure is broken. And moments like this shine a light on how broken it is because as David said. All of the testing and iteration, all of those things are must haves in peacetime. They are nice to haves in wartime.

• 22:39Jason Calacanis?

  Right.

• 22:39Chamath Palihapitiya?

  You don't have a time to walk around and test fire a gun and make sure this works and that works. The enemy is in front of you, you shoot and you fire and you aim later.

• 22:50Jason Calacanis?

  Yeah.

• 22:51Chamath Palihapitiya?

  And in that posture, we have to have a set of rules that contemplate giving people at the ground floor, on the border of, you know, where their life is at risk, the right to make a decision as well informed as it can be about what they can try to do to save their life. And doctors need to be equally empowered and, you know, we've effectively done that, but we just did it in fits and starts. And in that, there is all of this noise that delays the right decision, which is not that hydrochloroquine is good or bad, but it's that here's all the published data into the hands of the doctor who can actually read and understand it so that he or she and the patient can make a decision together.

• 23:33Jason Calacanis?

  Yeah, agreed. Sax, uh, what are your thoughts on chloroquine and the Z-Pak and, and that whole sort of unraveling of this is the miracle, it's not the miracle, it's worth looking at? And how that debate occurred, let's say on the Twitter, um, and then also in our stream when we were talking?

• 23:51David Sacks?

  Well, well, Trump was not the first to, um, embrace the potential of hydroxychloroquine. Um, in fact, we were talking about it in our chat group before, you know, it became national news. Of course, once he did embrace it, it became political football and, um, a lot of people wanted to prove him wrong. And so now it's hard to have a conversation about it without it becoming political. But the, you know, the argument for hydroxychloroquine really started with some research papers that showed that it worked in vitro, basically in test tubes against the virus. Um, and it worked against, uh, SARS, um, you know, which is a related sort of category of virus.

• 24:30David Sacks?

  Um, I'm not, I'm not an expert or anything. This is just sort of, you know, me telling you what, what I, what I know as a consumer of information. And so it was not crazy to think this is something that should be tried in the context of COVID-19. Now, we don't know if it's going to work or not. I saw an interesting presentation by UCSF and their working theory on it is that hydroxychloroquine plus Z-Pak might have some impact in the first week of the virus when, before peak viral replication takes place. And this might help interfere with the virus replicating. Once you're in respiratory distress, distress, though, and it's in your lungs, you have to, you're into a different

• 25:15David Sacks?

  phase of this and, and they don't believe that. They think you need to look at other things. So, so it sounded like this was potentially valid treatment in week one, less effective in week two. And, you know, by week three, when you're in severe ARDS, you know, it's, you got to find other things. So, you know, in terms of like what the right policy is, you know, this, you know, I'd be in favor of the right to try. I mean, ultimately, we should let patients and doctors make this decision together. And, and so, you know, I think the FDA did the right thing, giving emergency trial authorization to doctors to

• 25:58David Sacks?

  be able to try this with their, their patients. And, and what I think is happening is, is that there's your sort of rapid decentralized information sharing happening among doctors and hospitals. And, you know, I think they're, they're getting to the right answer here.

• 26:14Jason Calacanis?

  Okay. Do we, do we feel comfortable moving on to financial implications of this? Or are there things about the modeling?

• 26:22David Sacks?

  On, on upside downside, I agree with Jamat that hydroxychloroquine is a little bit more complicated. Masks are sort of the really unambiguous one. Because it's just so easy. There's so little downside. It's just cloth. It's cotton. Right.

• 26:37Jason Calacanis?

  You literally could put a bandana on.

• 26:39Chamath Palihapitiya?

  You could use your underwear. You could use your own underwear and just put it across your face. I mean, this is what's so insane. That David's right. I remember having this argument with someone because on the CDC website, as David said, it would only recommend it not as a preventative measure for you, but if you were, you should use a mask only if you were treating somebody with COVID-19.

• 27:00David Sacks?

  There's such an element of these authorities trying to manage us, you know, I really hate that. That, I mean, I do think that they thought about, will we create a run on mass? Well, you know, that they don't want to tell us the truth because they're afraid of some of the consequences of telling us the truth. And, you know, I hate that feeling of being lied to by public officials because they're trying to manage us.

• 27:26Jason Calacanis?

  I'm willing to be infantiled by people that are smarter than me. Yeah. So can you give us a list of the four people you think are smarter than you? Go ahead, Chamath.

• 27:35Chamath Palihapitiya?

  I am not willing to be infantiled by nameless bureaucracies. And I think that Americans deserve to not be infantiled. I mean, for the amount of money that we pay and the amount in taxes and the amount of power that we give folks, the one thing that I'm realizing through this whole thing is like, you know, the, it is true in some respect that the countries that had some level of authoritarian management did well. But it's also true that the countries that had robust civil services, filled with people who are at the top of their class, also did well. Singapore, South Korea, where it is a stature, it's a point of pride to work for the government, where it's some of the best paying jobs. Japan.

• 28:20Chamath Palihapitiya?

  And so, you know, one of the things that I realize is like, career bureaucrats really do infantile Americans in a way that's really unproductive and unhealthy. I mean, you know, doesn't it surprise you and kind of like perturb you that the ex-head of the FDA is way more prominent and out front with his point of view than the current head of the FDA? I mean, what the hell is going on?

• 28:47Jason Calacanis?

  I think what we know is going on is, I mean, Trump was elected and he dismantled some of this and the system was broken when he inherited it.

• 28:55Chamath Palihapitiya?

  I think, no, I think that that's unfair. And, you know, I'm not, I'm not a big Trump supporter, but I think it's unfair to pin it on him. The reality is maybe he defunded or underfunded a bunch of things, but the hollowing out of our institutions have been happening for 40 years and it started with Reagan, to be clear. Because we tilted the scales towards free market trickle-down economics where

• 29:19Chamath Palihapitiya?

  Government was viewed as a stop for really smart people to inject themselves into industry at higher levels, or it was a place that capable people would never go because capitalism, the way that it was structured, was set up in such an aggressive tilted manner for those that were capable. And unfortunately, it hollowed out the government from people that were really strong of character in a broadly speaking kind of way. And so what happens is that then bureaucracies form, the incentives change, and you get what you've gotten right now, which is again, it is a point of argument on something as

• 30:04Chamath Palihapitiya?

  simple and frankly idiotic as a mask.

• 30:07Jason Calacanis?

  Okay, let's move on to talking about the economy. And David, you've been quite a heretic on Twitter because you decided to engage in the one conversation you're not allowed to have, which is talking about people's livelihoods as opposed to their lives. You can only keep one thought in your mind as far as the kind of woke far left is concerned and the Twitter mobs, you can only talk about people and life and death, you can't talk about their livelihoods. But you've been talking and starting a dialogue on how you would structure teams in a startup for how do we deal with the crisis versus how do we go back to work?

• 30:52Jason Calacanis?

  So explain how you would do this if this was a startup company, if you were doing it on an entrepreneurial level, and what you think the road looks like. Let's start with San Francisco Bay area and then we'll extrapolate to the most acute area in America, New York.

• 31:07David Sacks?

  Yeah, well, the big question that everyone's going to be asking by the end of April is what now? Because I do think you're already seeing this in the New York data that quarantines work, but that shouldn't be a total surprise to us. Historically, quarantines have always worked. I mean, quarantines were the way that people dealt with plagues when they didn't have any technology. The problem is just they're incredibly costly and if the quarantine goes on for months as our only way of dealing with the virus, then you know, we could be looking at a depression. So the question really is, you know, once we've Arrested the exponentiality of the virus and I, you know, I think we have to do that first.

• 31:53David Sacks?

  But once we've arrested the exponentiality, the big question is going to be, well, now how do we get out of this? And what I worry about is that the, the daily update mentality, you know, I think it's great that our leaders are giving us these daily updates, showing that they, you know, this, they're showing a bias for action, which I think is good, but I worry that we're not going to be ready, that this precious time that we're buying with quarantine is not going to lead to a better plan in May, because no one's really working on that plan. They're just working on sort of the, the triage, the, the immediate response, the making sure that, that, you know, hospitals around the country have the ventilators and beds they need and we put in the orders.

• 32:34Jason Calacanis?

  Why is it, David, that people can't keep these two parallel processes in their mind at once? You've been attacked viciously on Twitter. The media attacks anybody who brings this up as like only caring about capitalism when in fact you need to do both plans. You need to figure out how people get back to their livelihoods and we avoid a depression, which would kill more people ultimately, right? I mean, I think there's consensus about that, whether it's depression or suicide, et cetera. Or people not being able to feed themselves or, you know, have nutritious food and healthcare. So why can't people put these two things in their mind at once? And then let's talk about the actual plan. If you were planning and you were the mayor of San Francisco or you were

• 33:17Jason Calacanis?

  in Trump's cabinet and they said, okay, David, you make the plan for the Bay Area to go back to work. Take us through your one, two, three, and then we'll throw it to you, Mo.

• 33:24David Sacks?

  What, what I would do is like, I would do what I would do in a company for a product release is I'd have, you know, in a company, I'd have a product manager for the one dot O release and I have a different product manager for the two dot O release. Because it's very hard for, you know, somebody to be all in on two different leases, which have two different schedules. So, um, you know, I think the team that we have right now, that's basically concerned with the immediate response, the, the triage, that you keep doing what they're doing, make sure that, you know, the country's reacting the right way, that it has all the supplies they need, that, you know, they're berating 3M into giving us more PPE or whatever it is. But I think that there should be a separate

• 34:03David Sacks?

  team, kind of a, a, um, you know, a, a czar for the 2.0 response, which should be focused on how do we create a new system that gets us out of lockdown, but doesn't, um, re-trigger the exponentiality of the virus. And I think that, that person and that team should be ready to slide the new system into place in May. I don't know if it's beginning of May, end of May, or whatever, but sometime in May, they should be ready to slide that new system into place, so that this precious time we're buying isn't wasted.

• 34:35Jason Calacanis?

  Give us your 1, 2, 3. 1 is masks, obviously, I would think.

• 34:40David Sacks?

  Masks are a total no-brainer.

• 34:42Jason Calacanis?

  So that's number 1. Give us your 2, 3, 4, if you, if you want to riff here a little bit.

• 34:46David Sacks?

  Yeah, I mean, the other elements of the plan that people keep talking about, um, it's, it's, uh, you know, rapid ubiquitous testing. I mean, you ha- and you have to have same-day results. This, this business of it taking 2, 3, 4 days in the lab. Uh, the problem is if someone is infected, they could be passing it on during that time. You don't, you don't, you don't isolate them in time. So we have to have massive ubiquitous same-day testing, along with contact tracing, so that when you do find out that somebody's got it, you can, uh, not isolate not just them, but all of their contacts. Um, that's a system that seems to have worked in South Korea. Um, and, um, I mean, th- th- those seem to be the, the, the pillars.

• 35:28Jason Calacanis?

  And, and is quarantining the high-risk? During this first phase of the rollout with testing, social distancing and masks, that's, that seems to be the no-brainer, I would add, fourth bullet point, which is if you're obese, diabetic, asthma, or some combination of those and over 60 and/or over 60, you gotta stay home now and you cannot be in touch with anybody who's out and about and part of that first wave to go back to society.

• 35:56David Sacks?

  Right. We, we know that certain segments of the population are at much higher risk than, than others. And so, part of having a more fine-tuned response to the virus other than just shutting everything down, would say, well, let the people who are at very, very low risk go back out, still wearing masks, and having the right protocols and hygiene and all that, all that stuff. But, um, but, but you keep the high-risk population, um, isolated rather than shutting down the entire economy.

• 36:23Jason Calacanis?

  All right, Chamath, if you're on the board of directors and David was the czar of the May plan to go back, um, how would you, uh, what questions would you have for him and how critical can you be of his plan? Uh, let's make this as if we were actually in charge. Chamath, savage David's plan.

• 36:38Chamath Palihapitiya?

  Well, I, I, I probably would push David to consider, um, a more aggressive, um, approach here. And, um, this is something that I've talked about before. Jason, you and I have talked about this on the podcast before, but, um, we need a biological patriot act. Um, I know that it's unpalatable for people on the left for certain reasons and people on the right for other reasons, but it just doesn't matter what they think. Um, it was reported today, by the way, that the CDC and the task force at the White House is considering immunity cards, um, but a much more beefed up version of them. They, these, these need to be, um, cards that have, um, you know, uh,

• 37:25Chamath Palihapitiya?

  Some kind of chip inside them that are non-hackable and issued by the government. But you know, my, what I would push David to think about if he was the czar of getting back to work is the following, which is, I agree with the broad-based testing. I think that you need to have some kind of, you know, wristband that allows you to be inside of certain green zones in every single city or town in the country that allow you to, you know, in some way be back to normal. But there also needs to be red zones where you cannot. We need to have a very, very quick way of restarting a quarantine if there are hotspots that develop.

• 38:10Chamath Palihapitiya?

  But all of it needs to be supported by broad-based testing and a biological patriot act. We do need to have immunity cards. And the simple, basic reason is that it is the only way that one can prioritize the economic salvation of the US economy. Because I think once we have paid the cost from the public health perspective, which we are doing at the end of this quarantine in flattening the curve or crushing the curve. Our immediate focus has to be in resuscitating the GDP of this country. Because otherwise, the number of deaths and the amount of pain

• 38:48Chamath Palihapitiya?

  that is caused by economic destruction will far outnumber the number of people that die from this, which is tragic already. And the only way that I can see for us to do that in a scalable way is with an immunity card,

• 39:05Chamath Palihapitiya?

  a biological patriot act. So I would be pushing David to think about that and rip the Band-Aid off and get that done.

• 39:10Jason Calacanis?

  And David, I would also push you on thinking about.

• 39:15Jason Calacanis?

  Quarantining not just at home, but maybe by region and hot zones. So if we know the New York corridor or the Northeast corridor is severely infected, nobody in or out of that corridor without a visa, without, and I know this is a very touchy issue, well, in terms of civil liberties, but until we're through this, I don't see why people from New York need to go to Florida without maybe a rare exception or, you know, something to that effect, right? So if we know we got California out of it, or if SoCal is still in the thick of it, but NorCal isn't, maybe we have some level of testing required to get on a flight to come to San Francisco or to go to leave New York. So those are two, uh, two punch-ups.

• 39:57Jason Calacanis?

  How would you look at those, David, as the new czar of getting back to work?

• 40:01David Sacks?

  I think it's all on the table. I mean, I like the green zone, red zone idea. I like, um, I like using immunity information. Um, we've been talking in our chat group for, I think, a month about these blood serology tests. I tweeted, I took one of those tests, um, weeks ago, I think like three weeks ago before the FDA had even approved it, and I tweeted about it. Um, so yeah, I think all that, I think the immunity cards, I think we should use all that information. Um, I mean, it would all be on the table for sure. Um, and I, but, but I think most of all, these ideas need to be tied together into a coherent system. And I'm worried that our approach to date has been so ad hoc that we're not going to

• 40:42David Sacks?

  have a coherent system ready to go, uh, as a replacement to shutdowns, uh, in May when we need it.

• 40:48Jason Calacanis?

  Is part of this, you talked before about how you didn't like to be managed. I think we all agree we're being managed and massaged because they really do not want to even talk to us about going back to work in May or what happens, because they're afraid that we're going to jump the gun and we're all going to just go to Chrissy Field or, you know, whatever park or Central Park and, uh, just throw a giant party. But people are not stupid. There's a, there is a certain self-preservation here that should be inherent in all these discussions, which is, you know, any reasonable person watching the death toll in New York does not want to leave their house. And so, why can't, how much of the lack of discussion about this issue do you think,

• 41:33Jason Calacanis?

  David, is because people are afraid to treat people like adults because they think they're going to just go out to Chrissy Field or, you know, Dolores Park?

• 41:42David Sacks?

  No, I mean, I think you're right that there was this long period of time where the authorities were just trying to get everyone to buy into the idea that the virus was dangerous, they needed to shelter in place, and they didn't want to hear any views that that appeared to be contradicting. I don't think they were contradicting it. You know, I remember when the Imperial College study came, model came out, and they said that 2.2 million people would die in the US, and I tweeted that. I thought that number was insane. It was fear mongering. And I think, you know, that's turned out to be the case. But, you know, people responded, well, good. I mean, even if it is fear mongering, we need to make people afraid because otherwise

• 42:24David Sacks?

  they won't do the right things. I guess that's true in a situation in which we're relying on everyone's voluntary compliance to engage in a quarantine or to wear masks. And I guess part of the response here is to figure out what, what, what action items should not be voluntary that we just need to do in order to get past this.

• 42:45Chamath Palihapitiya?

  Trumath, your thoughts? I think that getting back to work is going to be much, much more difficult than people think. I think that in the absence of a vaccine, which looks like at best 18 to 24 months from now, we will never get to 100% of where we were before, or at least the potential to be at 100%. And so I just think that over the next two years, we're in for a tremendous amount of difficulty. And this is sort of where, you know, I'd like to shift the conversation. I think that, you know, we've now poured between the United States government and the Fed. Almost 10 trillion dollars.

• 43:30Chamath Palihapitiya?

  We smeared it into the economy. And only 3 cents of every dollar has gone into people's pockets. And I think we're hoping that the other 97 cents somehow trickles down into their pockets in some way, shape or form. Now, when you look at that 97 cents, half of it was, you know, things like propping up the commercial paper market, propping up the repo market. But it's also been things like propping up investment grade debt, propping up high yield debt. And I have a real issue with this because I think that if we're going to take two years to get back to normal, and I really do think it's two years, because Jason,

• 44:10Chamath Palihapitiya?

  a lot of the fears that you expressed, people will have as lingering doubts and will prevent them from being at 100%, which means businesses will not be at 100% until you can get an injection and know that you're protected. We're doing an enormous amount of damage because we're taking trillions of dollars and flooding it into the economy in a way that's just not going to be effective. And I don't think that we're taking enough time to really think through these things. So, you know, on the one hand, while I appreciate the Velocity? Or not the velocity, the intention, you know, like I think Jerome Powell's commentary, I applaud, which is like, you know, he's saying all the right things, which is we will do everything possible.

• 44:53Chamath Palihapitiya?

  But the lending program to companies has been haphazard and difficult. But it did get started in three weeks and some people have gotten money in week four of this. I mean, it's pretty incredible. No, you know, the, the, the numbers that I've read is that, you know, on average, the loans are turning out to be sort of like, you know, in the tens of thousands. And on top of that, you know, David and I talked about this in the group chat, but the math makes it so that you're better off furloughing or letting people go than you are taking PPP, which means that a lot of this money may never get taken. And so, you know, but again, all of that is still a small rounding error. We're talking about less than 10 cents on the dollar. 90 cents of the dollar have gone into areas that will not really touch

• 45:38Chamath Palihapitiya?

  an average American citizen. And I think that's just fundamentally wrong because The trickle down theory of all of this, you know, was started 40 years ago and we can see now that it doesn't work.

• 45:51David Sacks?

  David, any thoughts on the stimulus? Well, I think, I think what's happened is that we have a 30% hole in our economy right now. You've got, you know, like a 15% unemployment rate going to, going to 25 or 30, maybe as high as that, we don't know yet. Uh, you've got a, you know, we think that GDP is going to contract in, in the next quarter by a quarter to a third. And so you've got this giant hole in the economy and what the, the, the Fed and Treasury are trying to do is plug that hole. For a period of time until they, we can get through this, this, this health crisis and, um. And if the crisis only lasts a few months, maybe they can hold it all together, but I, I do worry that if it lasts longer.

• 46:37David Sacks?

  It, the, it's going to slip out of their hands and, um. And the result is going to be a cascade of, of defaults and bankruptcies and, uh, and, and effectively a great unraveling of our economy.

• 46:51Chamath Palihapitiya?

  Yeah, I think that, I think that though, in fairness, like this is where I think bankruptcy, it's almost viewed as a four letter word. But it's not. And in many ways, the bankruptcy process could actually be the saving grace of American business in this moment. And the reason I say that is that it allows in a bankruptcy, these companies to discharge. A lot of the debt and we could set up a mechanism where these bankruptcies could be done in a way where, again, similar to taking PPP. You don't let people go, you know, a percentage of the, of the cap table must go to the pensions if they have them. A certain percentage of the cap table must go to employees. And then the remaining percentage goes to the secured bondholders.

• 47:34Chamath Palihapitiya?

  And so the existing equity holders and the unsecured bondholders would effectively, um, you know, not be made whole. But in that, all the employees would be. And if you combine that with a UBI program where you put, look, there, in, in the United States economy. Only eight trillion dollars is wages.

• 47:55Chamath Palihapitiya?

  So, you know, we could do so much if we had given every United States citizen their absolute salary of 2019, right now, we'd still have 2 trillion left to bail out companies.

• 48:09Jason Calacanis?

  And everybody could take a year and get paid, like literally have a year sabbatical and be paid.

• 48:14Chamath Palihapitiya?

  Well, I think what it really does is it guarantees the chances, or it maximizes, sorry, the chances of a consumer-led recovery. Like, the United States has never been an economic system that's been vibrant because of government spending or other things. We've always been vibrant because we've been consumer-led. It's consumer consumption, and it's customers of companies buying products that they need or want that drive the economy forward. And if you think about our largest customer base, they are the US population. And by guaranteeing their revenue, so to speak, you actually allow them to then spend, once they get out of quarantine, and you'll see them spend even in fits and starts. In this way, you know,

• 48:58Chamath Palihapitiya?

  you could spend $500 billion buying a bunch of junk debt. I really don't see, as a reasonably, you know, savvy participant in the markets, how it actually helps anything. I think all it does is it saddles you and me and all of our listeners with a bunch of toxic junk debt that eventually has to get sold by the Fed, as David said, in the grand unraveling.

• 49:20Jason Calacanis?

  And it would be more healthy, wouldn't it be more healthy, David, to allow a certain percentage of these companies, the weaker ones, to fail, so that the stronger ones could then pick up those employees and there'd be some stability? And I'm curious if you'd think that we're going to be living in a world where, and people have speculated about this, maybe some, the individual consumer changes their perspective, and maybe people come out of this crises with a different worldview. I don't necessarily subscribe to this, but, Schmatt, you do. We've had this conversation. And so I'm curious, David, if you think the American consumer will forever change, and maybe they upgrade their phone

• 49:59Jason Calacanis?

  half as much, they, you know, spend less, and they basically live a more modest rural lifestyle, and people maybe stay out in Tahoe or Colorado, wherever they went during this crises. What are your thoughts?

• 50:11David Sacks?

  Well, you're really talking about Depression-era values, and...

• 50:16David Sacks?

  The the the problem is if we acquire those values via depression, that that would be a pretty bad outcome here. So, um, but yes, that could happen. Um, you know, I think where I agree with Jamath is that I think that, um, even though the the federal government, the Fed, the Treasury, have a tremendous amount of firepower in a situation like this, it may not be inexhaustible. And we have to kind of pick and choose and prioritize who's going to get, um, aid and and who's going to get bailouts. And right now, it feels a little bit willy nilly, um, you know, and it feels like it it it it under those circumstances, the bailouts default to the

• 50:59David Sacks?

  people who are politically connected and powerful, um, as opposed to the workers, the pension funds, uh, you know, the main street small business owner who's worked their whole life on a business now all of a sudden, uh, is is underwater. Um, and I think, you know, it's, it's, it's going to be very hard to get the the the aid to the right people.

• 51:21Chamath Palihapitiya?

  Look, um, in the last four weeks, in the last four weeks, oh, sorry, in the last week, this is an incredible set. I apologize. In the last week, the amount of distressed debt in the U. S. Has quadrupled in one week to a trillion dollars.

• 51:38David Sacks?

  Right.

• 51:39Chamath Palihapitiya?

  So as an example to David's point, um, that's much more visible to Jay Powell, um, or to Steve Mnuchin, um, in the Fed and at the Treasury than, um, than it is that, you know, uh, thousands and thousands of nameless anonymous small business owners.

• 51:56Jason Calacanis?

  Who owns that debt?

• 51:57Chamath Palihapitiya?

  Can you give an example of what that debt would be for the listeners? Sure, like, you know, I mean, I mean, so, you know, I mean, a a fallen angel today is Ford. So we were not to pick, we're not going to pick on Ford, but we're just going to point to it as a well-known company. So this is a car manufacturer. Um, they employ hundreds and hundreds of thousands of people, um, in very important, uh, political states, um, you know, uh, Michigan, uh, Ohio, I think, uh, Tennessee, probably.

• 52:30Chamath Palihapitiya?

  But Ohio and Michigan, obviously, critical states. And they, you know, issue debt into the market to fund, you know, building factories or buying equipment. Who buys that debt? Pension funds buy the debt, family offices buy the debt, hedge funds buy the debt.

• 52:50Chamath Palihapitiya?

  Now, those guys were giving out a coupon, and they were paying, let's just say, four, five, or six percent a year on this interest. But now, because of all this economic uncertainty, people think that their ability to pay that back has gone way down. And so now, they have to issue debt at much higher interest rates. And the existing debt has a much lower credit quality. It's effectively like you having a credit card, and, you know, American Express calling you and saying, "Jason, I think the odds of you paying your credit card balance have gone way down, so I'm increasing your interest rate to 24% from 17%."

• 53:26Jason Calacanis?

  Yeah, and then I get another credit card to pay it off.

• 53:29Chamath Palihapitiya?

  And so essentially, what's happened is the Federal Reserve has decided to become that next credit card issuer.

• 53:37Jason Calacanis?

  What could go wrong?

• 53:39Chamath Palihapitiya?

  Instead of doing it for you, they're doing it for companies, but not for you. And the question is, is that okay? Well, at some level, companies like Ford should be saved, because I think these are iconic businesses that employ hundreds of thousands of people, and they're critical linchpins in the economy, right? Because they have a massive supply chain network, and, you know, they're really important for many other things beyond just the economics that they themselves represent. But there are better ways to help Ford. You could lend Ford as much money as they needed to meet their short-term obligations, similarly to the way that the Federal Reserve would allow a bank to borrow from their window. And I think that that's a very reasonable approach.

• 54:24Chamath Palihapitiya?

  The question is really, when the Fed then basically acts as a buyer of last resort and obfuscates the price of these bonds, and essentially is saying, "The American taxpayer will own these bonds for the foreseeable future." If you think that at some point, those bonds that you bought for, you know, 90 cents on the dollar are worth 90 cents on the dollar, then everything is okay. But if there's a chance that 90 cents goes to 70 cents, the people that really eat that cost are us in the short term and our children in the medium.

• 54:58Jason Calacanis?

  I have a silly question. It's obviously not my wheelhouse, corporate debt like this. Why wouldn't there be a clause that if they didn't pay back that 90 cents on the dollar that the American government bought it for, it converts into equity in the company?

• 55:13Chamath Palihapitiya?

  It's a great question because the Federal Reserve has chosen to go and essentially the equivalent of open an E-Trade account and step into the markets by themselves and just buy. So they're buying bonds and they're buying individual bonds and they're buying indices that control or that have exposure to certain bonds. What they are not doing is going directly to these companies and negotiating, essentially saying, I will give you four or five billion dollars and what I want you to do is retire that old debt and replace it with this new instrument. And here are the terms of this new instrument. The United States taxpayer gets, you know, 3% or 4% warrant coverage of the company.

• 55:55Jason Calacanis?

  Yum, yum.

• 55:56Chamath Palihapitiya?

  You know, you must make sure that the pension holders are made whole.

• 55:58Jason Calacanis?

  A no-brainer. Why wouldn't we have those clauses? It's a basic blocking and tackling that, you know, seed funds have. David Sacks, what do you, why is this not like a no-brainer?

• 56:09David Sacks?

  Well, I mean, I think we've got to get a good deal for taxpayers. I mean, Chamath has said it. I've heard Mark Cuban say it pretty eloquently. I even heard Trump say that we have to get a good deal for taxpayers. I just think that they're in such an emergency, they're not really taking the time to do that. They're, you know, they're trying to do things they can do immediately.

• 56:29Jason Calacanis?

  Yeah, the forgivableness of these, of this money to me is the thing I don't understand. Why is any of it forgivable? Why isn't any, all of it just, you know, a 10-year law or 20-year-long loan that converts into equity over some tranches?

• 56:43Chamath Palihapitiya?

  But Jason, this is why if you're, if you're going to haphazardly fire trillions of dollars out of a bazooka, why not give more than three cents on the dollar to average Americans? Why not put it into the pockets of every single bank account? You know, you know, who knows how much everybody made? The IRS does. And, you know, the IRS has a mailing address for everybody. And the IRS either gets a check or mails a check to every single taxpayer in the United States, which also

• 57:10Jason Calacanis?

  And they also have direct deposit for half of the people.

• 57:12Chamath Palihapitiya?

  And so, you know, there's nothing stopping us from saying, well, you know what? Why don't we do 10%, 10 cents of every dollar? Why don't we do 15 cents of every dollar to Americans? I really think this is the way that you limit the amount of waste that's going to happen. So the intention isn't wrong. And we shouldn't castigate people for wanting to put money in the system, as David said, to plug the hole. But we can't be so haphazard as to not think about the moral hazards we're creating and try to fix them in real time. And so this 10 trillion has already gone out the door. But if the next trillion or two don't touch Americans, I think it's going to create an enormous amount of damage.

• 57:57Chamath Palihapitiya?

  We've only given people a few weeks of a lifeline. And they need more. And you can't tell companies that they can have effectively a limitless lifeline, but not the individuals. Because I do think at some point, companies will find a way to get out of these loans and/or break the covenants with not much repercussion.

• 58:20Jason Calacanis?

  Okay, I want to wrap with two sort of not doomsday scenarios, but want to touch on politics. And I also want to know, in the chance that this quarantine goes on for May and June, in other words, San Francisco says, you know what? We're going to keep going and New York says, we're keeping going. And we're talking about not just April being in quarantine, but May and/or June, and we're looking at June 1st or July 1st. What are the chances, David, that people say, you know what? I am a free person. I want to take my life into my own hands. I want to make my own decision. I'm going out. I'm going to go surfing. I'm going to do this. And we have this social unrest. And how do politicians?

• 59:03Jason Calacanis?

  Handicap that in this new world.

• 59:07David Sacks?

  I think that could happen. I mean, particularly among young populations who are not at risk as much, you know, for the relatively younger, healthier people who don't have comorbidity factors could say, look, I've got a one in a thousand chance, or, you know, or less of dying if, even if I do get this. And I'm just going to take that chance. But it's all the more reason why I think we need a strategy to get out of lockdown that already includes the idea of letting out these people who are at much lower risk and and isolates the people who are at higher risk.

• 59:46Jason Calacanis?

  And against the, you have anything to add to that, Chamath? That kind of doomsday scenario or that eventuality?

• 59:54Chamath Palihapitiya?

  Well, I think that you're very right, Jason, that I don't think we're going to get out of lockdown until June 1st at the earliest. And I think that's in California. I think nuisance posture is basically that if April looks like the curves are decaying, it's going to be mid-May to late-May before he lifts this thing.

• 1:00:13Jason Calacanis?

  I don't know if I can handle this.

• 1:00:15Chamath Palihapitiya?

  And but, but it's also important that that we understand, like, you know, we just talked about companies. The only entity that's in even worse shape than companies and people are states and cities and counties.

• 1:00:29Jason Calacanis?

  Yeah, their debt is incredible. They have no revenue and massive costs.

• 1:00:33Chamath Palihapitiya?

  Massive costs and they're nonprofits. And think of the, the, you know, the garbage collector, the fireman, the police officer, the teacher. These are like, these are the backbones and the pillars of our, of our communities.

• 1:00:46Jason Calacanis?

  It's such a good thing that we were so resilient and we thought ahead and built up massive surpluses in our tax bases. Oh, wait, we didn't do that.

• 1:00:54Chamath Palihapitiya?

  Well, there, there, there were, there were some provisions to do that, these rainy day funds, but those are going to get exhausted. And, you know, we're going to have to bail those guys out as well. So this is what I'm saying, which is that when you're pumping in trillions of dollars haphazardly into the capital markets before you think about people or you think about the states and cities and communities in America, I just think it's a recipe for disaster.

• 1:01:18Jason Calacanis?

  Let me ask this even more simply, David. Under what circumstance would you be willing to go back to our poker game on a Monday night? And have six, seven of us around a table, sharing a meal and playing cards for six hours?

• 1:01:33David Sacks?

  Well, if there was, if there was a treatment for, for the virus so that you knew that if you got it, you weren't going to die, that would be a big deal.

• 1:01:41Jason Calacanis?

  Okay, that's the obvious one after that.

• 1:01:44David Sacks?

  There, there's a Russian roulette aspect to, to the virus right now, where even if your odds are low, um, you know, you, you, you still don't want to take the chance. Um, I think the, the next thing that would probably help would, would be that if we had this rapid ubiquitous testing, so I could know that the people who are in the room with me, um, are

• 1:02:04Jason Calacanis?

  We're all tested.

• 1:02:05David Sacks?

  We're all tested and we're all negative and you know, they could repeat the, the test on a frequent enough basis that we can all trust in the result. Um, that, that would make a big difference, I think.

• 1:02:17Jason Calacanis?

  All right, let's wrap with politics. All of this is occurring in an election year. Um, Bernie is out of the race. Biden, um, is doing a daily, uh, webcast. Uh, Trump's ratings are through the roof as he is, uh, more than willing to let us all know in his abhorrent narcissistic way that his ratings are just tremendous right now in the middle of thousands of Americans dying a day. Um, but we have to touch on this because elections are how we, uh, govern and make these decisions is by who we put into these positions. So

• 1:02:58Jason Calacanis?

  what do we think? And let's just make odds here. Odds that Trump wins again? Odds that Biden wins? If you had to lay the odds, if you had to give it a percentage or you want to set a line, what, what do you, what are your thoughts, David?

• 1:03:13David Sacks?

  Um, I, I always think that these things are basically a coin flip. I mean, this far out. Um, I mean, right now it seems like, um, you know, uh, Trump's ratings have never been higher. Uh, he's polling relatively well. Um, and, and Biden just seems completely irrelevant. But if we're still dealing with the virus by November, if we've cycled in and out of lockdown, if we have kind of an unresolved situation, if the economy is, um, in a very, very deep recession or depression, I think, you know, it's, it's up for grabs.

• 1:03:46Jason Calacanis?

  Chamath.

• 1:03:47Chamath Palihapitiya?

  I think that if if there is a V-shaped recovery of any kind, uh, Trump will win in a landslide.

• 1:03:55Jason Calacanis?

  Right now, we are in a V-shaped recovery. The market has come back.

• 1:03:58Chamath Palihapitiya?

  No, we're not. No, we're not.

• 1:04:00Jason Calacanis?

  Well, if you use the market as a guide.

• 1:04:03Chamath Palihapitiya?

  No, the market is the market is completely decoupled from Main Street. And so what Wall Street does is irrelevant right now. What I mean by recovery is what happens on Main Street.

• 1:04:12Jason Calacanis?

  Okay.

• 1:04:13Chamath Palihapitiya?

  Uh, because if you have sixteen, seventeen, twenty, twenty-two percent unemployment, um, I mean, you could feel the prancing dog and he'll beat Trump.

• 1:04:22Jason Calacanis?

  Yeah.

• 1:04:23Chamath Palihapitiya?

  Um, so, um, I think that, uh, uh, the president needs, um, a massive victory here. So what does the game theory say? The game theory probably says that he'll try to force people to go back to work as quickly as possible. And if there's even a modicum, a shred of evidence on some kind of, you know, therapeutic, they'll, you know, drum it up like it's, um, like it's a cure and try to confuse people that there's a vaccine. Um, but I think he needs that because in the absence of that, again, I just go back to, how difficult will it be to start real life? I think it's going to be difficult.

• 1:05:04Chamath Palihapitiya?

  And I think in that, um, people won't have a lot of patience for the fact that, you know, the debt will have ballooned, um, deficits will have ballooned, trillions of dollars will have gone out the door, and people will be meaningfully struggling going into election day. I don't think that that helps Trump at all. And, you know, by the way, and we'll talk about this in our next podcast because we should probably get an economist to talk about it, but, you know, what is putting ten trillion dollars or whatever the final number is, it'll probably be twenty trillion, you know, one, one times US GDP. What does that do to the economy? What does that do to long-term inflation? Like, if you see what's happening in China.

• 1:05:43Jason Calacanis?

  Didn't that what Japan did and they went through a lost decade or two?

• 1:05:46Chamath Palihapitiya?

  No, I, I think the best, better example is what happened in China, which is a combination of fiscal and monetary stimulus in two thousand nine and ten. And the results are basically a lot of fake growth and massive inflation. Um, and so, you know, it's, it's probably useful to debate that, uh, in the next, in the next pod.

• 1:06:05Jason Calacanis?

  What, what are the chances?

• 1:06:06Chamath Palihapitiya?

  I think it creates a lot of risk for Trump.

• 1:06:08Jason Calacanis?

  What, what are the chances of a dark horse candidate? Yeah. Uh, in, in, on the

• 1:06:13Chamath Palihapitiya?

  Zero.

• 1:06:13Jason Calacanis?

  Zero. So it's Biden for sure.

• 1:06:16Chamath Palihapitiya?

  Yeah, it's

• 1:06:16Jason Calacanis?

  No chance.

• 1:06:18David Sacks?

  Barring a Biden health emergency. I mean,

• 1:06:21Chamath Palihapitiya?

  Yeah.

• 1:06:22David Sacks?

  I mean, he is, he's, you know, not a spring chicken. So

• 1:06:26Jason Calacanis?

  So either person, either person gets coronavirus. It could be. Yeah.

• 1:06:32David Sacks?

  Well, no, I, I, I, look, if anything happened to him.

• 1:06:34Jason Calacanis?

  Yeah.

• 1:06:35David Sacks?

  Uh, yeah, I'm, I, we shouldn't even talk about these possibilities. So I don't want to sound like, you know, it's not like we, no one wants this to happen, but I, look, I think Chamath is right. They're not going to replace the head of the ticket absent. You know, so something health wise happened.

• 1:06:48Jason Calacanis?

  What is your game theory then on how Trump will play this? Because in Chamath's mind, getting back to work earlier. Um, makes it seem like we're getting back to normal and he did that. But a politician might also say, you know what? I, I think there's a chance of the second wave, so I want to keep it closed until June or July 1st and then time it. And I know this sounds incredibly cynical that a, a elected official would make health and economic policy decisions on their reelection. But that is the reality we live in, is it not?

• 1:07:20David Sacks?

  Sure, of course. Um, I, I think the next big political debate is, is going to be around this, what now? You know, we, yes, the quarantines have arrested the exponential, the, the virus, but how do we get out of them? And, um, and, you know, Trump's going to have to make a, a decision about when and, and how we get out. And, um, he's going to be eager to, to get out of lockdown, to, to restart the economy. But on the other hand, if he mistimes it and we cycle, you know, the virus then takes off again and we cycle back into another lockdown. Um, that's, that's very dangerous for him politically too. So, um, he, he's got a needle to, to thread there.

• 1:08:00David Sacks?

  Um, I agree, I agree with Chamath that if, if this ends up being V shaped, um, Trump is a shoe in, but if it ends up being a recession, deep recession or depression, if we end up, then I think the question's gonna be, does he appear to be more in the, is he a Hoover or is he more in the folder of an FDR, you know, and?

• 1:08:24Jason Calacanis?

  Explain that for people listening.

• 1:08:26David Sacks?

  Well, I mean, so, so Hoover took, took the blame for the Great Depression, FDR gets elected in 1932. We're still in the Great Depression in 1936 when he gets reelected, you know, and because he's seen as, as a, as a man of action, he does these fireside chats and he's, he's doing things. And, and I, I do think that, you know, Trump kind of pivoted from initially being

• 1:08:53Jason Calacanis?

  Denier, denier.

• 1:08:55David Sacks?

  A little bit flat footed on the virus, now doing these daily briefings. And I think the American public is giving him credit for action right now. And so, so, so obviously if those actions work, I think he gets reelected. And if they don't work, the question is, you know, does he get blamed for that? Is it, is he a Hoover or is he an FDR?

• 1:09:14Jason Calacanis?

  All right. On that note, I encourage everybody to wear masks, social distancing, and for those people in the audience who are startups and investors, keep, keep the faith, keep investing, keep starting companies. Never a bad time to start a great company in my mind. And Chima, any final thoughts? Here we are. It's, what is today's date? Is it, I know it's April. I think it's somewhere around the 10th. Am I even close? It's Friday, right?

• 1:09:46Chamath Palihapitiya?

  April 10th. Let's, let's just make a decision to be all in on masks.

• 1:09:53Jason Calacanis?

  All in masks.

• 1:09:54Chamath Palihapitiya?

  All in on masks. And take it into our own arms. We don't need to be told that these things make sense. They make sense. You're an idiot if you think otherwise.

• 1:10:03Jason Calacanis?

  David, closing thoughts? Oh, keep going, Chima, any other thoughts?

• 1:10:06David Sacks?

  Totally agree. That was my block today.

• 1:10:10David Sacks?

  We shouldn't have to make it the law, but I think we should because there's still people who aren't adopting it, but it's the lowest cost thing we can do. And if you look at the Asian countries that have controlled the virus, every single person wears a mask when they go out in public, every single person.

• 1:10:26Jason Calacanis?

  It's a simple no brainer. Give people a thousand dollar fine if you're not wearing a mask. Give them a warning first and hand them a mask. Like literally the cops should have masks and they should hand them to you, say, put this mask on and if I see you again, you get a thousand dollar fine.

• 1:10:39David Sacks?

  The, the, the, the post office should put one or a number of these in everyone's mailbox. Um, this is the first step to having a more fine tuned policy than just quarantine. And if we can't even get this right, then you know, I, I fear for, for what's coming next.

• 1:10:56Jason Calacanis?

  If you, this is a great execution idea. The mail carriers, every mail carrier leaves them and then you could also get the private sector to, you tell every UPS FedEx driver, uh, the government gives them those masks.

• 1:11:08Chamath Palihapitiya?

  Amazon.

• 1:11:09Jason Calacanis?

  Amazon, they just all have it. Hey, Jeff, somebody clip this and send it to Jeff, Jeff, if you want to do a mitzvah, uh, give all these masks to the drivers and just leave masks on everybody's doorstep and forget about Trump and whatever government official is going to drag their heels on it. Go ahead, you do it, Jeff Bezos. Uh, and hey, how great was Jack giving away a billion dollars? I mean, we saw him get barbecued on social media, but what a strong move, huh? And he's going to, you put it in a Google sheet.

• 1:11:33Chamath Palihapitiya?

  He's like, here's a Google sheet. And made the sheet open. I mean, it's the strongest move ever. It's like, you know, everybody, you know, I've, I've always been very skeptical of philanthropy because I feel like it's, you know, a, a dalliance of the established rich in North America because they like to have their names on things. And here's a guy who just basically pwned all of that. I don't need a hospital with my name on it. I don't need a building with my name on it. Here's a billion dollars and here's a Google spreadsheet to track it, which means I'm going to have zero in, you know, overhead and running it. I mean, it's, it's so strong.

• 1:12:07Jason Calacanis?

  It's literally like, he, the only thing that could be stronger is if he connected it to a Stripe account and like as he, as he swiped his credit card, it just.

• 1:12:14Chamath Palihapitiya?

  It's just so strong.

• 1:12:16Jason Calacanis?

  He should put a Zapier that tweets it.

• 1:12:18Chamath Palihapitiya?

  I mean, he has a Google Doc which is set so that everybody could read it at all times. I mean, for a billion dollars, it's just amazing.

• 1:12:25Jason Calacanis?

  He should start a Slack instance with like each of those nonprofits having their own channel.

• 1:12:30Chamath Palihapitiya?

  He completely, by the way, he completely pwned the giving pledge in one fell swoop.

• 1:12:34Jason Calacanis?

  Yes. The giving pledge, which nobody has any, it's pretty opaque. Now it's just like here it is.

• 1:12:38Chamath Palihapitiya?

  It's basically pretend you're gonna give your money away. We don't need to know how much. You don't really need to do it. There's no accountability, but we have this fun party. Once a year, we can all hang out and you know,

• 1:12:47Jason Calacanis?

  How is the party? Is it good?

• 1:12:48Chamath Palihapitiya?

  Each other. Uh, I haven't signed it. I'm not signing.

• 1:12:51Jason Calacanis?

  It's like the giving pledge. Yeah.

• 1:12:53Chamath Palihapitiya?

  So stupid. It's like the sign of insecurity.

• 1:12:56Jason Calacanis?

  Uh, Saxy Poo, thanks for coming on the pod, Rain Man. We appreciate it.

• 1:13:00Chamath Palihapitiya?

  Love you, Saxy Poo.

• 1:13:01Jason Calacanis?

  We love you, Saxy Poo.

• 1:13:02Chamath Palihapitiya?

  Love you, J. Cal.

• 1:13:03Jason Calacanis?

  Love you too, Chamath. Besty C. Uh, we love you. Uh, and, uh, everybody stay safe. Seriously. And oh, and I just wanted to close.

• 1:13:10Chamath Palihapitiya?

  Wear a mask.

• 1:13:10Jason Calacanis?

  Wear a mask. And to those people on the front lines, the janitors, the Google, uh, the Amazon drivers, Instacart, people in the food supply. You are the best. It's amazing what you're doing. What a sacrifice.

• 1:13:23Chamath Palihapitiya?

  Get the money to them.

• 1:13:25Jason Calacanis?

  Yeah. And seriously, give it, Amazon, let us tip those drivers, uh, in our.

• 1:13:29Chamath Palihapitiya?

  Get the money to them.

• 1:13:31Jason Calacanis?

  For sure. Double the pay. Okay. We'll see you all next time. Bye bye.