E94: NFT volume plummets, California's overreach, FBI meddling, climate change & national security

(0:00) Bestie intros + Burning Man debate (4:16) NFT trading volume plummets (10:20) California's new fast food wages bill, government creating bad incentives, how the free market response will further the labor issue (40:15) Zuckerberg on Rogan, FBI interference with the Hunter Biden laptop story (52:00) Balancing fighting climate change without harming the economy or national security, EU energy policy failure (1:06:04) Besties reflect on Mikhail Gorbachev's passing 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 Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://cointelegraph.com/news/looks-bare-opensea-turns-into-nft-ghost-town-after-volume-plunges-99-in-90-days https://www.youtube.com/watch?v=XlXSGqvP-A8 https://thefederalist.com/2022/08/30/zuckerbergs-admission-of-fbi-meddling-in-2020-election-is-even-bigger-than-it-seems/ https://www.nytimes.com/2022/08/23/us/california-nuclear-power-diablo.html https://www.wsj.com/articles/california-fast-food-wages-would-be-set-by-government-under-bill-passed-by-state-senate-11661811509

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 94 of All In. This is a summer unprepared episode. There's not much news. We're gonna wing it. With me again, in his golfing cap, the Rain Man himself, David Sacks. You do okay, buddy?

• 0:17David Sacks?

  Yeah, it's good.

• 0:18Jason Calacanis?

  Yeah, all right.

• 0:19David Sacks?

  I'm kind of annoyed that we're taping on a Wednesday.

• 0:22Jason Calacanis?

  Yeah, this is a slow news week. It's a slow news week.

• 0:24Chamath Palihapitiya?

  Well, that's not why we're taping on a Wednesday is because you have to want to go to Burning Man.

• 0:28Jason Calacanis?

  Well, whatever. I mean, listen, everybody has to get their burn on.

• 0:30David Friedberg?

  Sacks, have you ever been to Burning Man?

• 0:32David Sacks?

  Yeah, I've been before.

• 0:33Jason Calacanis?

  Did you like it? Sacks was a Burning Man, really?

• 0:35Chamath Palihapitiya?

  He was there on Threesome Thursday.

• 0:38David Sacks?

  I've been a couple of times. I think it's a cool experience doing, worth doing, you know, once or twice in your life. It's not something I want to do every year, but I know a lot of people do like doing it every year. They're like really into it. I'm not really into it that way, but I think it was a worthwhile experience to go at least once.

• 0:56David Friedberg?

  Chamath, have you been?

• 0:58Chamath Palihapitiya?

  Uh, no.

• 0:59Jason Calacanis?

  Friedberg, have you been?

• 1:01David Friedberg?

  I've not been, no.

• 1:02Chamath Palihapitiya?

  I have no desire, no.

• 1:03David Friedberg?

  I don't like driving in the car for a long period of time and...

• 1:06Chamath Palihapitiya?

  Well, by the way, I'll tell you, I'll tell you why I don't really have a huge desire to go. I, uh, I don't really have a huge desire at this point in my life to want to do a ton of drugs.

• 1:17Jason Calacanis?

  That's not, that's not just about that.

• 1:19Chamath Palihapitiya?

  Really?

• 1:21Jason Calacanis?

  No, really, seriously, it's not. What it's really about is art.

• 1:23Chamath Palihapitiya?

  Are we joking right now?

• 1:25Jason Calacanis?

  It's, if you like art and you like music, it's amazing. It's amazing.

• 1:30Chamath Palihapitiya?

  I really, I really like art. I think I actually collect phenomenal art. In fact, I like to go to like Frieze, the Biennale.

• 1:37Jason Calacanis?

  It would blow your mind.

• 1:38Chamath Palihapitiya?

  Museums.

• 1:38Jason Calacanis?

  No, no, no. You have no idea. The scale of the art there is tremendous. It is extraordinary. And if you're into music...

• 1:43Chamath Palihapitiya?

  Can we just, can we just call it what it is? It started out as a festival that did celebrate art and creativity.

• 1:50Jason Calacanis?

  Yeah.

• 1:50Chamath Palihapitiya?

  And over time became mass market. And in order to become mass market, there is still an element of that, but it's a huge party. And I think people should just be more honest that it's super fun. You can really rage for a weekend or for an entire week. And people should enjoy themselves, but let's not like have to put all these labels about how like intellectually superior it is and how you feel like bullshit.

• 2:12Jason Calacanis?

  I don't think it's intellectually superior.

• 2:14Chamath Palihapitiya?

  It's okay. It's okay to go and do drugs.

• 2:16Jason Calacanis?

  The thing that's interesting about it is it's really about community. A large number of people get together, they build camps.

• 2:21Chamath Palihapitiya?

  To do drugs?

• 2:22Jason Calacanis?

  No.

• 2:22Chamath Palihapitiya?

  In a community?

• 2:23Jason Calacanis?

  No, you've never been. You would literally, that's not the vibe there. The vibe is really dancing and creativity and art and community, but anyway.

• 2:31Chamath Palihapitiya?

  So it's like a rave?

• 2:32Jason Calacanis?

  It's

• 2:32Chamath Palihapitiya?

  Where everybody's on drugs?

• 2:35Jason Calacanis?

  I mean, sure. I mean.

• 2:37David Sacks?

  With neon, with a lot of neon.

• 2:39Jason Calacanis?

  With a lot of neon. No, it's kind of, it's much be-

• 2:41Chamath Palihapitiya?

  Those experiences are the best when you're sober. Best, best.

• 2:44Jason Calacanis?

  You have to understand the great-

• 2:45Chamath Palihapitiya?

  Going to EDC sober.

• 2:47Jason Calacanis?

  I've never been to EDC, but this, there's a great filter here, which is you've got to drive six, seven hours into the desert and you have to survive. You have to bring everything with you and bring everything out, you know, whatever it is, a bathroom, water, food. And it is harsh. I mean, it's a hundred plus degrees in the day and it's forty degrees at night. It's not easy to survive. It's hard.

• 3:06David Sacks?

  It used to be that way. When I went, hold on, when I went, I went with a bunch of guys who had the whole thing like wired in and they had like these yurts and it was like a whole community and they had like running water and a kitchen and it was basically glamping. It was glamping.

• 3:22Jason Calacanis?

  There are people-

• 3:22Chamath Palihapitiya?

  And then-

• 3:23Jason Calacanis?

  How's that hard to survive? No, there, I mean, it's hard to do the, there are people who glamp. It is hard to do that because you have to seriously get your-

• 3:30David Sacks?

  You have to go with people who know what they're doing and are highly organized, so.

• 3:34Jason Calacanis?

  Yes, they take months to set that up.

• 3:36David Sacks?

  So, yes, they spent the whole year, whatever, setting it up and it was really elaborate. And then there was an article like in the New York Times, basically saying that, you know, that they were ruining Burning Man because they were making it too nice.

• 3:48Jason Calacanis?

  That was part of the problem.

• 3:50David Sacks?

  You remember this? That's when I went. I went to the Too Nice Experience.

• 3:53Jason Calacanis?

  So they wrote that about you?

• 3:54David Sacks?

  Yeah, basically.

• 3:55Jason Calacanis?

  You ruined Burning Man. Great. Thanks, Sacks. Thanks for ruining Burning Man.

• 4:16Jason Calacanis?

  I don't know if you've been following the NFT story. We'll queue that up as our next story. OpenSea, the marketplace, the eBay of NFTs, if you will, the volume has dropped 99% since their first peak of $406 million in a single day. On August 28th, volume dropped to around $5 million, down 99%, according to decentralized app tracker Dap Radar. On a monthly basis, OpenSea's volume has dropped 90% according to Dune Analytics. The floor price of a Bored Ape has now dropped by 53%. If you remember, OpenSea raised $300 million

• 4:57Jason Calacanis?

  at a $13.3 billion valuation, December 2021, in a round led by Kotu and Paradigm. To put that in perspective, that was nine whole months ago. My how the world has changed. Fabio, what's your take on NFTs and this whole boondoggle?

• 5:15David Friedberg?

  I don't know how to

• 5:17Jason Calacanis?

  How will we look back on it?

• 5:18David Friedberg?

  Yeah, I don't know. I mean, we've had a lot of bubbles as a species. This is just another one.

• 5:24David Sacks?

  I thought we were going to stop doing stock market crashing stories.

• 5:27Jason Calacanis?

  Well, this is a different market. What do you think? Did you invest in any of these?

• 5:32David Sacks?

  We're in the eighth month of this story, which is fill in the blank, asset class crashed.

• 5:37Jason Calacanis?

  Yeah. This one scene, the question I have here, Sacks, is do you think that this is the end of the category, though? Do you think that's a category ending? Do you think there was ever anything interesting here? Because you heard a lot of pitches like I did for how NFTs were going to change everything.

• 5:52David Friedberg?

  You know what? I'll say something, because I liken this to the point, just to tie it back to what we just talked about. At the end of the day,

• 6:02David Friedberg?

  You know, I think I've said this in the past, but like what differentiates humans from all other species on earth is our ability to tell, to communicate and tell stories. A story is like a narrative about something that doesn't exist. And by telling that narrative, you can create collective belief in something. And then that collective belief drives behavioral change and action in the world. Right? I mean, everything from religion to government to money to art is all kind of driven, all markets are driven by this notion of narrative and collective belief that arises from that narrative. So when you go to an art dealer and you have a sit down with an art dealer, you might appreciate the art, but then the narrative begins. And the narrative is this artist did this and they came from this and the artist that

• 6:44David Friedberg?

  looks like this traded at 6.8 million and this artist is only trading for 3.2 million. And the whole narrative takes you away into, okay, I should pay 3.2 million for this piece of art. And ultimately it'll be worth more. And that's the fundamental premise of markets is you're buying into something, not necessarily always, and this is such a minority now, it's scary. It used to be that you don't own a piece of a business or a productive asset, you pull cash out of it. Hopefully you get more cash out than you put in when you buy it. Nowadays, markets allow you to trade. Therefore, the majority of market-based decisions are driven by if I buy something for X, I'm going to be able to sell it to someone else for Y. And so the narrative is driven around, I'm paying this, someone else will pay Y down the road, I'll make money from that.

• 7:27David Friedberg?

  And this has been repeated a thousand times over. It's been repeated in the ICO tokens. It's been repeated in the Tulip bubble. It's been repeated in every art market and subsidiary of every art market since the dawn of time, since the dawn of markets. And I think the NFTs are really just one more kind of example where this beautiful narrative has formed the digitization of art, but it is no different than any other form of assets that we tell ourselves a story around and we convince ourselves that I'm paying something today and someone else will pay something more for me tomorrow. And I will also say that in the last year, with the liquidity that we saw the last two years, it leached into the stock market where there's supposed to be more rational behavior that ultimately the cash flows of an asset you're buying should generate more for you.

• 8:11David Friedberg?

  than the money you're spending to buy that asset. And ultimately, you can maybe trade out of it early. But still, so much of it became about, well, the stock is going up. Therefore, if I spend X, someone else will spend Y, and I'll make money on the stock. With no underlying assertion of what's the productivity of that business? What's the return on cash going to be? Based on the cash flows coming out of that business over time? Or any of the fundamentals around it? And so so much of our discussion and distortion has really been driven by this narrative fueling. And I think the NFTs are an example, but there are many others. And we're going to see many more as long as humans have the ability to communicate with each other.

• 8:47Jason Calacanis?

  And you have any take on it, Chama?

• 8:48Chamath Palihapitiya?

  I think Friedberg's mostly right. Like, I do think that there is this thing, the Burning Man, Coachella example is the best way to describe this. A lot of these things are the same. But when a few people approach something early, they're too insecure to admit that it's the same as something else. And so they spend a lot of time trying to tell you a narrative about why it's totally different. The Buffett example, you know, would be the quote, you know, whenever somebody tells you that this time is different, it's probably not that different. Or the other quote that's well worn in history is like, you know,

• 9:25Chamath Palihapitiya?

  things don't necessarily repeat in history, but they rhyme. All of this is trying to say that other than like fundamental leaps of science, there's not a lot of stuff that's new in the world. You know, we are repeating things over and over. And one of the things we repeat is the social capital that you get from having certain choices. And then getting other people to validate those choices because you want to feel like you're, you know, worthwhile.

• 9:52Chamath Palihapitiya?

  And this happened in NFTs. And I'm sure in the first phase of different movements in art, that also happened. It's probably happened in a bunch of other markets as well. So these things are more similar than they are different. Coachella and Burning Man, the same. NFTs and part of the art market, the same. Everybody that runs to you with why it's so different, I would just have a grain of salt and say, you don't need to be different. Just enjoy it because you think it's cool.

• 10:19Jason Calacanis?

  All right, we can go either to this California fast food wages story. Or we can go to Goldman Sachs workers are quitting en masse because Goldman Sachs is saying, you got to come back to the office five days a week. Where do you want to go, boys?

• 10:32Chamath Palihapitiya?

  I think the California thing is really interesting, just the the three things that California did in the last week, I don't know if you guys saw, but number one is they basically said that, you know, you have, they're gonna ban ICE combustion engines, I think by 2035. So you have to be battery EV.

• 10:49Jason Calacanis?

  New sales, you could still have all.

• 10:52Chamath Palihapitiya?

  New sales, sorry, yeah, new sales, which is the first in the country to do it. And just to go back to a second, California is the largest auto market in the United States. And effectively, you know, Trump and California got into a huge spat because California had certain emission standards that were tougher than the rest of the United States. And, you know, the federal government tried to sue California and back and forth, all of this rigmarole. So California's always sort of led on climate. That was one thing. Then the second thing is they said, we're gonna create, you know, a state-sponsored organization to set the minimum wage rates for fast food workers. Pause what we think about that. And then the third thing is that this Congresswoman, I think, or this assembly person, Buffy

• 11:34Chamath Palihapitiya?

  Wicks, passed a law through the Senate and through the the House that essentially holds social media companies liable for the mental well-being and the mental health of kids. And depending on where you're lying on all these issues, it's like an interesting kind of lens in which we're like California is really becoming extremely, extremely legislatively active and basically imposing their will on free markets in the economy there.

• 12:06Jason Calacanis?

  Yeah, and for people who don't know, the fast food issue was, they want to move to a more European style where instead of unions debating with individual corporations, McDonald's, Burger King, whoever, what they're gonna pay their employees, or employees having that discussion one-on-one, they want the state, some state authority, to pick the amount per hour fast food companies pay, and then, I guess, disintermediate the unions? It's kind of confusing, but interestingly, our friend, Lorena Gonzalez, if you remember, she's the one who told Elon to, you know, F off, and was a former Democratic legislator.

• 12:51Jason Calacanis?

  She introduced the bill when she was in the Assembly. And so. It's kind of a weird approach. I'm not sure why the government

• 12:58David Sacks?

  No, it's not. It's not. It's not disintermediating the unions. She, Lorraine Gonzalez Fletcher, I guess now. She's the former Democratic legislature who drove Elon out of the state. Remember when she said,

• 13:09Jason Calacanis?

  Sure.

• 13:10David Sacks?

  you know, F Elon?

• 13:11Jason Calacanis?

  And Elon responded, message received.

• 13:13David Sacks?

  Yes, and he left. A great, great move for, for the state. So she is now running one of the biggest unions. And what she said is that this bill will move California closer to the labor model used in Europe, where unions negotiate, the unions are still negotiating for wages and work conditions, but in an entire sector with some sort of government board rather than company by company. So in other words, it's too slow to unionize, you know, company by company. They would just want to unionize entire sectors of the economy. Now, the thing that's really crazy about this minimum wage proposal is that, like you said, Jason, it isn't just that they set a minimum wage. They created a 10-person panel.

• 13:57David Sacks?

  So there's a new government agency that's going to regulate fast food, the fast food industry. You know, they're not going to stop a minimum wage. It's going to be work conditions. So now you're turning fast food restaurants into a highly regulated part of the economy. And the weird thing is, it's not even just all fast food. It's basically chains that have more than 100 fast food restaurants nationally. So in other words, if you're a local operator of two McDonald's, you'd be subject to this 10-person board. But if you own 20 restaurants that aren't part of a national chain in California, then you're not. And so the weird thing is that some workers in the fast food industry could get this new minimum wage of $22,

• 14:42David Sacks?

  whereas other workers who work for, you know, they're not part of a major chain, would get the statewide minimum wage of 15. So it's, it's, it's kind of unfair in that some parts of the restaurant industry are being regulated and others aren't.

• 14:57Jason Calacanis?

  Is there any justification here that you can think of to not let the free market do its thing, Friedberg?

• 15:04David Friedberg?

  Well, if you represent the workers, you're saying, hey, pay them $22. And you can't. And here's what that points out. It actually points out that there's probably a pretty big business flaw in a business that's so reliant on commodity labor. And that business, in and of itself, is not as valuable as you might have thought it was before. Think about it this way. There's a company called McDonald's. And then there's another company called McDonald's Labor. And what happened before is McDonald's employed people to do work at McDonald's. And maybe what happens in the future is all those people are looking left and looking right. And they're like, you know what? McDonald's has nothing without us. We are the business. We deserve the value.

• 15:47David Friedberg?

  So in terms of how much of the value of the business flows to the shareholders of McDonald's versus the employees that work at McDonald's. The employees that work at McDonald's are saying, let's go do a startup. And our startup is called Union. And our business that's called Union is now going to provide a bunch of services to McDonald's. And those services, we're going to start to value capture what they're doing. And it indicates that maybe there's something inherently disadvantaged in that model. And it could be that the argument could be made that that business in the early 20th century, in the late 19th century, yeah, the 19th century, early 20th century and beyond, that you could build a good advantaged business because there was such an eager, hungry workforce, people looking for work.

• 16:30David Friedberg?

  People would come and work for nickel an hour or whatever. And so you, as a business owner, could make a lot of money doing that. You could sell a product for a dollar, pay people five cents to make it for you. But nowadays, those people are looking left, they're looking right, and they're like, wait a second, we are the business, or we're 90% of the value of this business. And so a couple of things will happen. Number one is the inherent business model of a company that's so dependent on commodity service is going to be flawed and challenged in the 21st century. And fast food restaurants aren't going to be as valuable. Businesses that rely on commodity service are not going to be as valuable. Number two, businesses are going to automate. So new businesses will emerge that actually do the fast food work, or do the car building work, or do the dock loading and unloading work,

• 17:12David Friedberg?

  that are automated, and they'll have an inherent advantage in the economy, and they'll win. And I think number three is that in the near term, consumers will suffer because prices will go up because someone has to pay for the incremental cost of running this unionized business and that will ultimately be the customer of that business. I'll say the fourth point is I am concerned about this sort of behavior in regulated spaces where the government has actually control over the market itself. So this is a good example of this is, you know, we had our friend Ryan from Flexport on a few times, but you can't just start up a shipping company and have a dock. The docks are run by the cities and they're run by the state. And so those docks, access to those docks, access to that market is regulated by the government.

• 17:55David Friedberg?

  So then what happens is the union, right, the labor company can actually have regulatory capture through the government of a segment of the economy. And that's where things start to get dangerous. So, look, I'm all for unions if they want to show that a business is reliant on a commodity labor force and commodity service and they all band together and start a startup. I mean, that's what we do. We all start a company and go and compete. But the issue is then when the government creates regulatory capture over a segment of the economy and make it difficult for the free market to ultimately do its job of either automating or creating a newly advantaged business model or all those things that allow us to progress.

• 18:28Jason Calacanis?

  Automating is coming. A couple of us made a bet on a crazy idea of like automated robotic coffee called Cafe X. Not to talk our own book here, and the company really struggled during the pandemic, but they have two units at SFO, they're doing $73,000 in two units last month. And I'm like, wow, the company figured it out. And there's another company doing french fries.

• 18:52Chamath Palihapitiya?

  This is the, this is the sad thing that California doesn't realize is like, I think that the folks writing these laws have just an extremely poor understanding of economics and capitalism. Because the first thing that it does effectively, and everybody can understand this, is it caps the profitability of a company, right? Because it effectively says, if you look at an industry that is over earning, Then this council will essentially see money that should be re-appropriated to employees. Now, that idea is not necessarily a bad thing. For example, you see that all the time in technology, right? If you look at the EBITDA margins of like Big Tech and how they've changed,

• 19:35Chamath Palihapitiya?

  they've actually eroded over time as the companies have had to generate more revenue because employees demand more and more of those gains. That's an implicit part of how the free market economy works in technology. So, you know, if you don't feel like you're getting paid well at, you know, Google, you go to Meta and you get paid more and vice versa. So there's a natural effect of people being able to do that in certain markets. But when you impose a margin and essentially say you can only make 10% because the rest of these profits I'm giving to these folks because I've imputed their new wage to be something that's much greater than what they were paying before. The unfortunate thing is what Friedberg said, which is that you will rebuild that business without those people. Because it is the rational thing to do.

• 20:20Chamath Palihapitiya?

  And so unfortunately, what you'll do is you'll take a bunch of people that should be in the economy. Right? Think about like new immigrants or young people that are first getting on their feet. They'll take these jobs, you know, I mean.

• 20:31David Friedberg?

  First run jobs, yeah.

• 20:33Chamath Palihapitiya?

  I worked at Burger King when I was 14. That's how I got my first. You, you, you, those jobs won't be there to be had. And that has ripple effects as these folks get older or try to get more ingrained in the economy. And this is what I wish California would understand is that these things aren't free. And even though they seem like you're coming to someone's rescue, there's all kinds of unintended consequences and very obvious consequences that you're ignoring by not really understanding how the economy works.

• 21:03David Friedberg?

  I'll just say like, look, these people, I can, I'll say a sec, but I mean, you know, the, the people that are elected. Are elected by the people to represent the people. They're not elected to govern over the long-term plan necessarily for the state. And while you think that those two may be the same, the near-term incentive and the near-term motivation of someone who's voting is I want to get a benefit for myself sooner rather than later. Not necessarily I want to make an investment for 30 or 40 years down the road. And if you're an individual that's struggling in some way, you're going to prioritize the former over the latter. And you're going to elect someone who's going to go put in place public policy that's going to benefit you.

• 21:44David Friedberg?

  So I don't necessarily raise my hand and say I blame the people that have been elected. I raise my hand and I say, look, this is the natural evolution of what happens in a democracy where there is a struggling class and there were where there is some sort of viewed disparity or considered disparity, that this is what's going to happen in a democracy under this condition, is that you're going to elect individuals who are going to go and govern and they're going to make decisions that are going to benefit those individuals that got them elected over the short term. And there may be some real long-term damage that results.

• 22:14Jason Calacanis?

  Sacks is a part of this problem is that people are now looking to the government to solve their problems in life versus maybe looking internally to solve their problems and you know, negotiate better salaries and more skills.

• 22:27Chamath Palihapitiya?

  No, but hold on, I think you have to give people a little bit more credit. Nobody was asking for them to step in like this.

• 22:32David Sacks?

  Look, this is as much for the politicians as it is for any of the workers. What's happening right now? The National Restaurant Association and all these restaurant lobbying groups are flooding the state, the legislators, the governor with lobbying money because they want to get this bill modified, tempered, or thrown out. And so this is basically a racket. Like, look, as a public policy matter, it makes zero sense for the same worker, if they go work at, say, Jiffy Lube or something outside the restaurant industry, they get the California minimum wage of $15. If they go to a mom and pop restaurant, they get the minimum wage of $15. But if they go to McDonald's, they now get a new minimum wage specifically for chain restaurants of $22. That simply makes no sense. There's no public policy rationale.

• 23:17David Sacks?

  But the real question you have to ask in kind of getting at this is why shouldn't it be fifty dollars? Why shouldn't it be a hundred dollars? Well, the reason is because if you raise the minimum wage too much, then these employers have a huge incentive to replace that labor with automation. And so the unintended consequence that Trumath is talking about is that these big chain restaurants are gonna rely even more heavily on automation now, and they're gonna basically employ less of this labor where the price has been artificially erased for that subsector of the economy from fifteen to twenty-two dollars for reasons that no one can really explain. So again, this is not for the benefit of workers. It's for the benefit of the politicians. Look what's happening right now.

• 23:58David Sacks?

  Is all these articles talking about the lobbyists coming in. They're going to have Gavin Newsom begging him to be their savior right now. And this is the game that the California Democratic Party plays. It's a one-party state where they where basically business loves Gavin Newsom because he's their protector. He's the protection end of the extortion racket. Lorena Gonzalez gets this bill passed, which is basically incredibly damaging to these chain restaurants, and they have to go running to Gavin Newsom and beg him to either veto it or modify it, temper the bill. So it's not as destructive to their business. He's the protection in the extortion racket, but it's the same racket. This is a one-party state, and what they're doing with chain restaurants, they would do with every sector of the economy. If they could, it's just a matter of time.

• 24:42Jason Calacanis?

  And what is the purpose of the California government? Like, are there things they could be focusing on other than this? Like, maybe the free market settles this issue and they could focus on the schools.

• 24:50David Sacks?

  Benefits from the private sector, from basically the wealth-producing part of the economy, and to line their pockets and the pockets of their supporters. You know that the typical government worker in California makes fifty-three percent more than their private sector counterpart. And if you factor in all the pensions that have been promised, it's a hundred percent more. Okay? So basically, there is a huge wealth transfer that's taking place where the where basically the legislatures, the party, they are transferring wealth from the private sector to their supporters, their backers. And Friedberg, you talk about democracy. Listen, I mean, California is a one-party state and Ballot harvesting is legal here. I'm not saying the votes are fake or anything like that,

• 25:32David Sacks?

  but there's a giant party machinery and apparatus that literally just goes door to door and collects the ballots from their supporters. They literally know who their supporters are on a door by door, household by household level. It has gotten to the point now where the party machine is so powerful, they can pretty much run anybody for any post and get them elected. It's very hard for an outsider candidate.

• 25:57Jason Calacanis?

  It does feel like we're getting tired of it here.

• 26:00Chamath Palihapitiya?

  No, but guys, that's exactly how it works. I mean, like, if you look at Gavin Newsom's run to the governorship, um, he paid his dues, he did the right jobs, he waited in line, he didn't, you know, rock the boat, independent of any of the things he did right or wrong, and he had some pretty big moral transgressions. It didn't matter because it is about paying your dues and waiting in line because there aren't any meaningful challenges here. None.

• 26:26David Sacks?

  So in LA, in LA, in LA right now, there's a mayoral race going on, and the two, there's a runoff between Rick Caruso and Karen Bass. Karen Bass is basically a product of the political machine. She's basically worked her way up in the Democratic Party forever, sort of uninspiring candidate. She's just basically a puppet of the machine. Caruso is actually, he's a real estate developer who's built some of the most landmark, you know, spots in LA, like the Grove, like the Pacific Palisades Development. He's made incredible, he's created incredible amenities for the LA area. He's also been on a bunch of civic boards. Um, you know, I had lunch with him at the Grove and people were coming up to him. He's like a celebrity. They were taking photos

• 27:10David Sacks?

  with him. He's the best possible candidate that you could have in a place like LA. He actually understands business. I think he would restore law and order. I mean, all this kind of stuff, right? He's spoken out about the homeless problem being out of control. And on election night, he had the most votes, but five days later, when they counted all the, the, basically the collected ballots through ballot harvesting, Karen Bass was up by like five points. That is the power of the ballot harvesting. And I still hope that he wins, but the party machine is so powerful, they can basically get almost anyone elected in the state.

• 27:45Jason Calacanis?

  Can't the ballot harvesting work both ways?

• 27:47David Sacks?

  What's it gonna take to change it? What's that?

• 27:49Jason Calacanis?

  Just devil's advocate here. The ballot harvesting can work both ways. Like, you could go collect Republican votes.

• 27:54David Sacks?

  No, but you have to have the party infrastructure to literally go door to door.

• 27:58Jason Calacanis?

  So the Republicans haven't, the Republicans haven't built that in this state?

• 28:00David Sacks?

  Think about it this way, okay? So, you know, like your phone, there's a platform and there's an app. Think about the party as the platform and the candidate as the app, okay? The platform can drive a ton of traffic to whatever app they want. A guy like Caruso doesn't have the party behind him, so he has to build his own operating system.

• 28:20Jason Calacanis?

  He uses the media, right.

• 28:21David Sacks?

  Exactly, so he has to build his own platform, then he has to build his own candidacy. So when you think about the amount of money that's required to do something like that, about how hard it is to do it, it's, it's very, very hard. So he spent something like a hundred million dollars of his own money. Hopefully he wins, but if he doesn't, all the infrastructure, all the platform that he created just goes away. And then the next candidate has to start from scratch. This is why outsiders, it's almost impossible.

• 28:47Jason Calacanis?

  Why hasn't the GOP invested in California? They just don't think they have any shot? Because it seems like the Democrats are investing heavily in trying to flip, you know, um...

• 28:54David Sacks?

  Look, there's a two to one party affiliation. There's a two to one party affiliation in California towards Democrats. So, look, I mean, the Republican Party here is a mess, and that's part of the problem, is the Republican Party in California needs to move to the center. It's a plus thirty blue state. Unless they're willing to do that, they're not going to make progress. But that could take, you know, generations to fix.

• 29:15Jason Calacanis?

  And with Roe v. Wade and that kind of stuff, it's going to be really hard to...

• 29:18David Sacks?

  Look, there are pro-choice Republicans in California, but all Newsom has to do is point to what's happening in Texas, and, um, you know, all of a sudden, people kind of revert to their tribal political affiliations.

• 29:31David Friedberg?

  I'll make, I'll make one more simple point. The average voter in California probably knows more people that work at McDonald's than are shareholders of McDonald's. And I think in any time that there's policy that gets voted, or gets suggested, or ultimately gets passed, there's a side that benefits and there's a side that doesn't. And if you know more people that benefit on one side than are hurt, you're probably going to be supportive of that policy. And I think that's probably a pretty simple rubric for thinking about how these things over time evolve.

• 30:02David Sacks?

  But don't you think that's true nationally? Why, why is it only true for California? I mean, like in Florida, like the Irish person in Florida knows more people who work at McDonald's than shareholders at McDonald's. And they're not engaged in a systematic takeover of the private sector.

• 30:17Jason Calacanis?

  Philosophically, they're they believe in independence and businesses not being interfered by the government, right? That's a core tenet of the Republican Party.

• 30:25Chamath Palihapitiya?

  Also, the sad reality is that within a few years, unfortunately, you'll know a lot fewer people that work at McDonald's because the number of jobs for humans will be dramatically lower.

• 30:37Jason Calacanis?

  They got rid of the cashiers. That's gone already.

• 30:39David Friedberg?

  Or what people will be more acutely aware of in a number of years is how expensive McDonald's has gotten. Because if the price doubles.

• 30:45Chamath Palihapitiya?

  No, that that won't be because, like, again, McDonald's has a very simple. No, not not even the market. McDonald's is not stupid. They understand how to use Excel. And so they'll think, well, I can amortize a robot versus actually jacking up prices because what McDonald's understands is the sensitivity of pricing to demand for their product.

• 31:04David Friedberg?

  Yeah, that's right.

• 31:05Chamath Palihapitiya?

  I mean, they are the most intelligent about how they price. Every anything at the sort of the lower end where you're capturing, you know, nickels and dimes. They are the most sophisticated in understanding supply, demand, and and and the curves. And so to think that they are not going to just invest heavily now at the corporate level. The next franchisee of McDonald's will still pay a million dollars for a franchise fee, but will give will be given a bevy of robots that they run for McDonald's, and they'll have to hire half or a third less. That's that's the real shame of this, which is the number of people that should actually be gainfully employed in the economy will then shrink again. But in this case, it was because legislators just completely don't understand how incentives work and how the economy works.

• 31:49Jason Calacanis?

  And people are not clued into exactly how well narrow AI machine learning is doing right now.

• 31:55David Friedberg?

  By the way, I'll say like.

• 31:56Jason Calacanis?

  It's really moving quickly.

• 31:58David Friedberg?

  One general way to think about this is is technology is introduced and the technology creator captures roughly a third to a half of the value increment because of the delivery of that technology, the productivity increment. So let's say that it costs 12, $15 an hour to employ a McDonald's laborer today. And let's say that you can build technology that the amortized robotic cost is $10 an hour. There will be a technology company that will make $2.50 an hour off of that. So net-net, what ends up happening is productivity has to be gained and prices will reduce. And so, you know, there are moments like this where there could be an acceleration of technology and also an opportunity for new industries to emerge. And when that happens, new jobs emerge too.

• 32:40David Friedberg?

  So it's, you know, maybe, look, I mean, at the end of the day, it seems Luddite-ish, but, you know, there's going to be a market opportunity that will arise.

• 32:48David Sacks?

  I think we need to like just step back and, and ask, what is the type of economy that California is creating here with this fast food law, with these other laws we're talking about? This is a state in which you have a disappearing middle class. The middle class has been moving out of the state by the hundreds of thousands. In fact, last year, we had for the first time net migration out of the state. This has basically become a state where the only middle class are basically the government workers who, like we talked about, are making twice as much as their private sector counterparts. It's a state where you have the very rich and very poor, and the only middle class are government workers. That is what we're creating. The rich in the state have done really well over the last few decades. Why? Because of globalization.

• 33:30David Sacks?

  So you take the two big industries in the state, tech and Hollywood, entertainment. They have benefited enormously through globalization because now you can sell software or you can sell movies or music. Exactly. So now these, these industries have become, you know, massive global exports. And so if you're in those industries in California, you've done really well. Because now your market is the whole world. So the super rich have done really well. That's funded the state. That's allowed the state, it's almost like a resource curse, to have all of these bad policies that really hurt small business owners. They've been moving out of the state. And so again, you've got the very rich and very poor. This is not an economic model for the entire nation.

• 34:14David Sacks?

  This is what, you know, Gavin Newsom says he wants to take to all of America. This is not a model for all of America. In order for a democracy to function, we need a thriving middle class. And this is not a recipe for delivering a thriving middle class to America.

• 34:28Jason Calacanis?

  And I just want to show you guys a quick video. Um, we'll just play it for five seconds here. We had invested in this company and it got sold. I'm not going to even say the name of it. But if you watch this Quick Robot, this is a computer vision company out of Boston. And like, they're doing high-speed picking of tomatoes and berries. Like, this is a two-year-old video when we invested and wound up getting bought by another company and they're doing vertical farming.

• 34:56Jason Calacanis?

  And there's companies doing this now for french fries. It's over. Like, we are within, you know, I think, five, 10 years of a lot of these jobs. We're talking tens of millions of manual labor jobs being gone. And we're going to look at this moment in time where we try to squeeze an extra 10% or 20% out of these, you know, employers. And then you're going to see these employers say, you know what? 24-hour-a-day robot, hmm, yeah, it's a little bit upfront cost. I'll put it on a lease and they're just going to move to these robots. It's really very close to being game over for manual labor. And you can see it also with Cybertruck and, you know, what Elon's doing with AI. And these things are getting so close.

• 35:38Jason Calacanis?

  And it's been, I don't know, when did you invest in your first robotics or AI company? Saks or Trama? Do you remember the first robotic or AI company you invested in? And how long ago it was?

• 35:49Chamath Palihapitiya?

  2014. It's a company called Relativity Space, which is 3D-printing rockets and engines.

• 35:59Chamath Palihapitiya?

  And basically, they're able to use machines to learn how to actually fix the morphology of all the materials that they use to print better and cheaper and more useful rocketry. That's an example, but then that led me down the garden path. I was just going to say something more generic, instead of talking our book, which is, I think people misunderstand that Moore's Law...

• 36:24Chamath Palihapitiya?

  Has actually not ended. And this is something that a friend of mine, Adam D'Angelo, characterized to me. Beautiful human being.

• 36:35Jason Calacanis?

  From Quora?

• 36:35Chamath Palihapitiya?

  Together. He was a CEO of Facebook when I worked there. So we've known each other for 15, 16 years. And now he's a CEO and founder of Quora. But the way that he described it to me, which is so true. The minute he said it, I was like, my gosh. It's like Moore's Law never ended. It just shifted to GPUs. You know, because inherent lack of parallelization that CPUs have, you solve the GPUs. And so that's why the surface area of compute, of innovation, has actually shifted, Jason, to what you're saying, which is, you know, all of these new kinds of machine learned models, because you can just now brute force and create such a tonnage of compute capabilities and resources to solve these problems that weren't possible before.

• 37:19Chamath Palihapitiya?

  So, you know, you see this thing, you know, fun things like Wally or, you know, DALL-E, sorry. And more sophisticated things like GPT-3. But he's right, which is that, you know, we are at a point now where all kinds of expert systems, which is sort of like V1, simple forms of AI, are going to be completely next level.

• 37:39Jason Calacanis?

  Well, you think about the data sets adding to that.

• 37:42Chamath Palihapitiya?

  And so when governments, exactly. And so when governments don't understand this and they try to, you know, step in, they're going to be shocked at how much faster they're pulling forward the actual future they actually are trying to prevent.

• 37:53Jason Calacanis?

  Yeah. The data sets is the other issue, Friedberg. You look at, you know, the data sets that are available to train. So you have the GPUs still escalating massively the amount of compute power it can do. You have cloud computing at the same time. And then you have these data sets. One of the most interesting things about, you know, DALL-E and a lot of these is the corpus of data they're able to absorb. And a second factor issue that is starting to come up is who owns the derivative work in copyright? So if you train your data set on a bunch of images and those images are owned by Disney or whoever, you know, photographer Getty, and then the AI makes you a new photo?

• 38:32Chamath Palihapitiya?

  So here's another, here's another example of this. Here's another, here's another example of this in a law that just passed. So in the IRA, the Inflation Reduction Act, you know, we granted CMS and Medicare the ability to negotiate drug prices. And we actually also capped. Um, the total prescription costs that any American can pay at $2,000. Now, it turns out that overwhelmingly, most Americans will never spend $2,000 a year on prescription medications. But there will be a few, and they bump up against drugs that cost millions of dollars. So there was a, you know, there's a drug for, you know, SMA, um, that's like, you know, 2.4 million and like, you know, beta thalassemia of like 2.8 million.

• 39:17Chamath Palihapitiya?

  And you're, and, and we will all bear the cost of that. Now, if CMS and Medicare go and really crunch those costs, what is Pharma gonna do? Well, Pharma is going to do what is the obvious thing, which is like, if you're gonna cap what I can make, I have to completely change my R and D model. And they're just gonna use AlphaFold, you know? And what it's really gonna do is potentially put a bunch of research scientists out of work. And those are folks that should probably in the, you know, for our general future, be gainfully employed. But the nature of their job is gonna change completely because the economic capitalist incentive of Big Pharma is gonna move towards technology, which is, you know, an AlphaFold

• 40:01Chamath Palihapitiya?

  and their protein library is the equivalent of AI and automation for McDonald's. So this is where, again, governments have to be super careful that they understand what's actually happening because they're creating incentives, I think, that they don't completely understand.

• 40:15Jason Calacanis?

  All right, we can go to raw meat for Sacks. Zuckerberg's, uh, admission of FBI meddling. Truth Social.

• 40:23David Sacks?

  Well, after you guys disputed me and like, how dare you imply that J. Edgar Hoover and Jim Comey's FBI is politicized? Remember you guys were debating and...

• 40:32Jason Calacanis?

  No, I said that. That was about the investigator.

• 40:35David Sacks?

  I didn't say that. You didn't, but some of you were saying, I can't believe Sacks that you're part of the 35% of Americans who don't believe fully in the rectitude and integrity of the FBI.

• 40:45Jason Calacanis?

  I don't know if this is FBI.

• 40:47David Sacks?

  Now comes this bombshell. I mean, you got to admit, this was a bombshell.

• 40:52Jason Calacanis?

  What was a bombshell? Okay, so I'll okay, okay. So Joe, Joe Rogan had Zuck on and he asked him about this very specific thing. Remember the New York Post story on Hunter Biden's laptop in like the week or two before the election was censored, right? And it was a very controversial thing because the FBI was dealing with known Russian interference and hacks and all this stuff, part of which Trump was like asking people to hack other candidates.

• 41:18David Sacks?

  Okay, you're not even setting this up correctly.

• 41:20Jason Calacanis?

  Well, okay, I'm gonna keep going. And then so this is what Zuckerberg said, hey, look.

• 41:23David Friedberg?

  Let's let's act moderate this segment.

• 41:26Jason Calacanis?

  Well, I mean, I'm just gonna read the Federalist, which is, you know, a super right wing. But he says, I'll just read you what Zuck said, because that's says it all. He says, hey, look, if the FBI, which I still view as a legitimate institution in this country, I'm quoting from the Federalist, which is quoting him from Joe Rogan, it's a very professional law enforcement. They come to us and tell us we need to be on guard about something. I want to take it seriously. So when the New York Post broke the Hunter Biden laptop story on October 14, 2020, Facebook treated the story as potentially misinformation, important misinformation for five to seven days while the tech giant's team could determine whether it was false or not. During that time, this is federal speaking, decreased its Facebook decreased distribution of the story by making the story rank lower in the news

• 42:10Jason Calacanis?

  feed. And this is his quote, Zuckerberg's, you could still share it. You could still consume it, Zuckerberg explained, but, quote, fewer people saw it than would have otherwise.

• 42:22Jason Calacanis?

  And while he would not quantify the impact, the Facebook founder said the decreased distribution was, quote, unquote, meaningful. In a follow up, Rogan asked if the FBI had specifically said, quote, to be on guard about that story, meaning the laptop story, after originally responding, no, Zuckerberg corrected, says, I don't remember if it was that specifically, but it was basically the pattern. So basically, I guess you would agree, Sacks, Zuck didn't know exactly what to do here with this information. And if it was real or not, which, you know, it turned out to be very real, and it probably could have swayed the election. I mean, I do think if people thought there was a connection between.

• 43:01Jason Calacanis?

  Hunter Biden, maybe it could have. I don't know if we want people being hacked to do that. So what's your take on it? Sax, you know, just hacking in general and this specific thing, what should the FBI do if these kind of hacks are getting released of people's families?

• 43:14David Sacks?

  Okay, so yeah, here's

• 43:16Jason Calacanis?

  It's a complicated issue, right? There's many vectors. Yeah.

• 43:18David Sacks?

  What Zuck basically says, the FBI came to them and encouraged them to suppress the story or to suppress a story that they described that would be just like this. Okay. So now, look, a lot of conservatives are dragging Zuckerberg and Facebook for doing for doing the FBI's bidding. But I think a lot of people, I think most people in Zuckerberg's position would have believed the FBI. When the FBI comes to you and says, you're about to be targeted by Russians's information, you need to do something about it. You would have listened to the FBI. He believed the FBI. My point, and so I don't blame Facebook too much for that. I think it's understandable that he would have believed them. The issue here is the politicization of the FBI. Look, let's back up. What was happening? So the

• 43:59David Sacks?

  New York Post gets this story about the leaked contents of Hunter Biden's hard drive. In response to that, you had 50 former security state officials, many of whom were Democratic partisans, like Clapper, like Brennan, they signed a letter saying that this story has all the hallmarks of Russian disinformation. Now, the truth is, they had not inspected the hard drive. They simply said this is the hallmarks of it. And as a result of that, we thought that the social networks and so forth censored the story. Okay. Now it turns out that the FBI, by the way, the FBI had the hard drive. They had the hard drive for over a year. It was

• 44:40Jason Calacanis?

  They had the image of the hard drive or the actual hard drive?

• 44:42David Sacks?

  They had the actual hard drive. The leak of the story was was likely prompted because the FBI didn't appear to be doing anything with the hard drive. So somebody leaked the story to, you know, to Rudy Giuliani, and then he leaked it so forth to New York Post. But the point is that the FBI had the hard drive. So they knew it was authentic. Okay. So they knew that this hallmarks of Russian disinformation was not the truth. Because again, they had the authenticated hard drive in their possession. And yet they They still went to Zuckerberg and basically played into this narrative, this phony narrative that, you know, Democratic partisans like Clapper and like Brennan had created.

• 45:22Jason Calacanis?

  Was there anything meaningful, by the way, about what was on the laptop in your mind? Like, do you think it's relevant? Do you think we want people's laptops being hacked like this? Who are in people's political families?

• 45:32David Sacks?

  I don't think the laptop was hacked. I mean, there's a weird convoluted story about how the laptop ended up. But, but look, the, the point is that-

• 45:40Jason Calacanis?

  Should people's personal pictures, you know, and stuff like that be released?

• 45:43David Sacks?

  I never liked the part where they were showing Hunter Biden's, you know, drug use and the other personal stuff. I thought that was sardonic. And I didn't, I didn't like it. And I didn't think that was particularly germane. So I think, and I think it was an invasion of his privacy. However, there were materials on there related to his business dealings in Ukraine. And I don't say, see how you can say those weren't relevant to an election.

• 46:08Jason Calacanis?

  He's being investigated for them too now. I mean, a lot of this has to do with timing too, you know? It's like, how, how do you deal with something like this seven days before an election? When you know the Russians are hacking it, if it has been or not? It's a really difficult situation for everybody, I think.

• 46:21David Sacks?

  So, so, so look, my point, my point is this, that I can agree with you about the personal stuff about Hunter Biden shouldn't have come out. But, but with respect to the Ukraine stuff, that was legitimate. It was fair game. And the, and most importantly, I don't know whether it would have swung the election or not, probably not. Probably by itself, it's not. But the real point here is that the FBI went to Facebook to censor a story that they must have known was true because they had the laptop in their possession. They should not be intervening in elections that way. That is the bombshell here. That's unbelievable.

• 46:52Jason Calacanis?

  I, I, I think they didn't know the providence of this, but I guess we'll find out. Where are you landing?

• 46:57David Sacks?

  The providence of a hard drive that's in their possession.

• 47:00Jason Calacanis?

  They didn't have an NFT. Exactly. Where do you, how are you, uh?

• 47:04David Sacks?

  You're running full circle, Chamath.

• 47:05Jason Calacanis?

  Exactly. Audience wants to know, Saks, audience really wants to know where- You were going to reserve judgment on the Mar-a-Lago search. Where do you and/or Republicans come out on all this now when you see, fuck, he did in fact have a ton of really sensitive stuff, like it's not-

• 47:22David Sacks?

  Define ton, and define ton of really sensitive stuff.

• 47:25Jason Calacanis?

  Yeah, I mean, listen, he wouldn't give it back. Like, what's your-

• 47:28David Sacks?

  He had 300 pages of documents marked classified. If you were to go to the 30,000 boxes of documents that Obama took, are you telling me you really couldn't find 300 pages that have classified markings on them?

• 47:40Jason Calacanis?

  Well, the fact that he wouldn't give it back, I mean, ask him, I guess.

• 47:42David Sacks?

  I never disputed, by the way, I never disputed, hold on a second, I never disputed that they would find documents with classified markings in Trump's basement. I still think that the approach was heavy-handed, and we don't know enough because we don't know what those documents are. Listen, every document they stick in front of the president, or not every, but many of them, are marked classified.

• 48:00Jason Calacanis?

  Okay, so let me ask you this. Aside from these, like, kind of details, what is Trump's deal that he just wouldn't give them back? Do you think, what do you think his motivation was? I mean, I have my own theory, which he likes memorabilia. He's always liked to show off memorabilia.

• 48:12David Sacks?

  I think that's it. I think you got it. I mean, honestly, if I had to guess what this whole thing was about, it's probably that the archivist at the National Archives wants the original copy of those letters with little Rocket Man, and he doesn't want to give them up.

• 48:24Jason Calacanis?

  Right.

• 48:25David Sacks?

  And I literally think that's what this is about. I think it's about something as silly as that.

• 48:29Jason Calacanis?

  Memorable, memorabilia.

• 48:30David Sacks?

  I think it's about memorabilia. I do not think these documents pose a threat to national security.

• 48:34Jason Calacanis?

  Why wouldn't Trump just give it all back? It's so dumb.

• 48:36David Sacks?

  But why would the FBI feel the need to do a raid?

• 48:38Jason Calacanis?

  Well, because it's so much classified stuff, I guess.

• 48:40David Sacks?

  By the way, remember, when we first discussed this, hold on a second, when we first discussed this issue, we were told it was nuclear. It was nuclear secrets.

• 48:46Jason Calacanis?

  Could be, yeah.

• 48:47David Sacks?

  No, they've backed off that completely. It was not in the affidavit. It's not about nuclear. That was something they leaked to get them through a tough press cycle. So, but look, my point about all this stuff, just to wrap it up so people are clear, was never to defend Trump per se. My real concern is the politicization of the FBI. Our law enforcement agencies should not be weaponized by either party to pursue their political agenda.

• 49:10Jason Calacanis?

  But you believe they are at this point?

• 49:11David Sacks?

  We just saw with the Zuckerberg thing, what business did the FBI have going to Zuckerberg to get them to censor a New York Post story that turned out to be completely true? Hold on a second. That is election interference. They should not be doing that.

• 49:24Jason Calacanis?

  Yeah, it's a tough job if they don't know if it's been stolen or not. Yeah, it's a tough job.

• 49:29David Sacks?

  By the way, the government of the United States has no business censoring a free press. That is a violation of the First Amendment. When the government instructs a private company to censor a press story that the government itself does not have the authority to censor, that is a violation of the First Amendment. We thought, remember when Jack Dorsey said that he regretted the censorship that Twitter did? And he came out with that apology. We thought it was just Twitter's decision. Now we find out from Zuck that he was leaned on by the FBI. And I think that these big tech companies like Twitter, like Facebook, they're gonna have to have a new policy, which is when the government says, we want you to censor something, their response needs to be,

• 50:12David Sacks?

  show us a court order. They cannot just censor now based on the say so of some operative from the government.

• 50:19Jason Calacanis?

  I would agree with you. I agree with you on that. I think it was a bad decision, obviously.

• 50:23Chamath Palihapitiya?

  The one big tech company that really nailed this, I think, was Apple. You know, very early on, they drew a really hard line in the sand with the San Bernardino shooter, because they said, if we allow the FBI to get into this person's phone, even though, you know, what he did was completely heinous, we are going to create a backdoor that will become an exploit for everybody, and we are drawing the line on privacy and security. Now, different set of issues, but it just goes to show you, there have been a few examples where some of these companies have drawn a hard line. And then in that example, and I think, Jason, you mentioned this, they went to Israel and had that company hack the phone.

• 51:00Jason Calacanis?

  San Bernardino.

• 51:01Chamath Palihapitiya?

  Okay, whatever. But it didn't come with, um, they were able to stand up to the pressure. So I think there are some examples, Sacks, where you can say no.

• 51:09Jason Calacanis?

  I mean, the idea that Twitter would block a New York Post URL, it's like, ah, such a jump ball. Like, if it was the sex material, I could understand them saying, like, you can't hack it, that's against our terms of service, and we agree on that sex. But in this case, like, I don't know.

• 51:25Chamath Palihapitiya?

  Let's go to something more interesting.

• 51:26Jason Calacanis?

  Well, heat wave, I think, and the drowning, I know this is interesting to Sacks, but I think it's interesting to everybody else in the audience. Uh, heat waves and droughts are, uh...

• 51:34David Sacks?

  Newsflash, it's hot in summer.

• 51:36Jason Calacanis?

  Yeah, I think this might have to do with global warming and be a little unique.

• 51:40David Sacks?

  I'm kidding, I'm kidding.

• 51:41Jason Calacanis?

  You're kidding, before all the ESG people get into sex and say, you know, you're global, you believe in global warming.

• 51:48David Sacks?

  By the way, I do think the death of Gorbachev is a big story.

• 51:52Jason Calacanis?

  Okay, we'll get to that after this.

• 51:53David Sacks?

  Gorbachev dying is a big story too.

• 51:55Jason Calacanis?

  Let's give Free Burke his science corner and then we'll come back around. I give you your warm.

• 51:59David Friedberg?

  Zach, what's your, what's your, what's your point of view on climate change, the impact it will have on the planet and whether like urgent action is needed?

• 52:12David Sacks?

  Listen, I'm not an expert in that area. I'm not going to pretend to be. I do think that, um, that we can't save the planet by destroying the economy. And it seems to me that too many of the save the planet people like want to take reckless extreme actions that would wreck our economy. You just saw, actually Elon just gave a, a talk this and made news this past week from Norway where he said that we still need oil and gas. He's the leading innovator in basically moving to solar and renewables.

• 52:43David Friedberg?

  I don't disagree with you, but, but.

• 52:44David Sacks?

  And he said, listen, unfortunately we got to rely on oil and gas because it's too important for civilization. If we cut this stuff off too quickly, we end civilization.

• 52:53David Friedberg?

  Yeah.

• 52:54David Sacks?

  So, look, I mean, I think this is a long-term problem, but I, and I think we need to have long-term solutions.

• 52:59Jason Calacanis?

  You believe in global warming, just full stop. The, the planet is warming. You agree with the science.

• 53:04David Friedberg?

  It's not just about warming, just, just, just to use a different term, that there are more frequent extreme events that can severely, uh, hurt people, hurt the economy, hurt the food supply, hurt the energy supply, all the things that, you know, I think we're, we're like all the way on the bottom of Maslow's hierarchy. Like, these are the things that are most critical that, that they're starting to get disrupted in a pretty severe way.

• 53:29David Friedberg?

  You know, I think that's, that's, I mean, that's the big question. So Sax, it's, I think it's becoming, and this is where the transition starts to happen, that a lot of people kind of say, hey, over the long run, the temperature is going to go up by one degree Celsius over a century, you know, who cares?

• 53:45David Sacks?

  The problem, the problem is this, is that, you know,

• 53:49David Friedberg?

  And by the way, I don't disagree with your comment.

• 53:50David Sacks?

  Whenever, whenever somebody like me points out how insane some of these policies are, the topic has shifted to, are you a denier of some science or other?

• 53:58David Friedberg?

  No.

• 53:58David Sacks?

  No. Listen, my point is not about the science. My point is, look at the collapse of the Sri Lankan economy, because they implemented these ESG rules on fertilizer. Look at what's happening to the Dutch farmers who are being put out of work because of ESG rules.

• 54:11David Friedberg?

  And California, California today, Governor Newsom today said, please don't use your electric power to charge your electric cars, a week after they said, uh, gas cars are now going to be banned in the state. And so the grid is going to go. There's a deep irony underway today in California because, and Fox News has obviously latched onto this story, that, um... That has to do with the grid, though. I mean.

• 54:36David Sacks?

  Look, I've, I've become suspicious. Whenever, whenever politicians invoke some crisis as the, as the reason for some authoritarian measure, I've learned to distrust it. That's the point. And so, look, you know what's happening in Europe right now, is obviously gas is through the roof because of the Ukraine war. The, you know, the price has basically gone through the roof. And so because of that, they're not able to produce fertilizer. And one of the byproducts of the production of fertilizer is CO2, which gets added to the production of beer to make it fizzy. Well, guess what? The Germans are not only about to run out of gas, they're about to run out of beer.

• 55:14David Friedberg?

  This is my boy.

• 55:14David Sacks?

  You think, you think they're going to keep supporting the Ukraine war when they find out that there's no beer for Oktoberfest? Forget about not being able to eat their, eat their homes. They can't drink beer in October.

• 55:26David Friedberg?

  This is...

• 55:27David Sacks?

  The Westerlies are going to fracture very quickly.

• 55:29David Friedberg?

  We need to sit down. We got, we need to sit. But Sax, just taking up, just taking a, just taking a beat for a minute, like, taking, taking off the table the political response. Are you, as an individual, concerned about the, the impact of a change in climate on people and on the economy? And, and, and are you interested, as an investor, in the private market solutions to resolve some of those things that are obviously going to become market-driven problems? Take the government out of the equation.

• 55:59David Sacks?

  I think there may be a long-term problem here. I'm not sure like how long it takes. I definitely think, I'm skeptical of this claim that, you know, the world's going to end in the next 10 years because frankly, we've been hearing that since the 1990s.

• 56:12David Friedberg?

  1988, there's a great headline article, by the way, in New York Times where it was like, scientists in 1988 said that all the oceans, all the ice caps will melt, the oceans will flood the land by the year 2000. So there is a credibility challenge associated with predicting, you know, kind of long-term outcomes like this, that continues to kind of foment unfortunately, right?

• 56:32David Sacks?

  Yeah, all my beachfront property would be underwater right now if all that came true. No, I'm just kidding. But no, but, but look, it hasn't escaped my attention that many of the political leaders who are claiming that we're facing imminent threat of being underwater in 10 years own beachfront property and fly on private jets. So obviously, you know, I'm not saying this isn't a long-term problem, but I do think they try to create an imminent crisis so they can shove through a bunch of bad policies that are very destructive to the environment.

• 57:04Jason Calacanis?

  Friedberg, would you define what's happening with temperature and extreme weather as a crisis or not?

• 57:12David Friedberg?

  Um, yeah, I mean, there's, there's a, I would say there's a critical impact in, um, and will continue to be a critical impact in the food supply chain in the quarters and years ahead because of what we're seeing. So severe drought and heat wave in China right now. Um, and by the way, food is not the only one. There's also the manufacturing supply chain. So in the province of Xishan in China, they actually lost power because so much of the power is driven by hydroelectric plants. So streams and water flow has slowed down and stopped. As a result, there's less power. As a result, the factories are being shut down. As a result, key components for manufacturing in the computing industry

• 57:55David Friedberg?

  and, um, and in kind of mechanical goods are not being produced at the rate that they were being produced before. That has a ripple effect in the supply chain, similar to what we saw in COVID. And then in the food supply chain, we're seeing a drought and a heat wave. Right now, we're coming out of it in the Midwest in the United States where we grow corn and soybeans, throughout Europe, and also in China. And in China, they had 70 days in a row of record-setting temperatures.

• 58:20Jason Calacanis?

  70 days in a row?

• 58:22David Friedberg?

  Every day was a record. No water, high temperatures, they're just starting to assess the crop damage. It looks pretty severe. There was massive crop damage in the Midwest, in the Corn Belt this year. And then obviously, European farmers are having issues. And combine that with the geopolitical issues of the Ukraine crisis and the natural gas pricing being so high, one-third of fertilizer, of ammonia plants have been shut down in Europe. And they think that ammonia and fertilizer production may drop by as much as one-half in Europe because of the crisis. So, energy prices are so high, you can't make fertilizer, so that energy is being also redirected into other industry and support homes. So you believe it's a crisis? So I guess the question... Yeah, people are turning on their ACs in California this week.

• 59:07David Friedberg?

  You know, you see that Governor Newsom just said, "Our grid in California cannot support excess electricity consumption." Therefore, one of the biggest variables is electric cars. He's saying, "Don't plug in your electric cars this week." And that's because of record-high temperatures that are about to hit California in two days. So, look, everyone says, "Hey, these are kind of anecdotal stories." No, it's a trend. Statistically, the frequency of extreme things happening is continuing to climb. And then the impact is in the food supply chain, the energy supply chain, and the manufacturing supply chain, and there are follow-on effects. Now, I'm optimistic that private market solutions will resolve these issues. Yeah, that was my next question, is can we solve this or not? Yeah, of course. I mean, look, we've had crises since the dawn of humanity.

• 59:52David Friedberg?

  I mean, we were a starving, you know...

• 59:54Chamath Palihapitiya?

  I don't think we need a crisis to solve some of these problems. These are pretty economically obvious.

• 59:58David Friedberg?

  Yeah, and that's my point. The private market will resolve because people want to have electricity, they want to have food, they want to have cars.

• 1:00:06Chamath Palihapitiya?

  Not want, they need.

• 1:00:07David Friedberg?

  They need. And so, the market will pay for those things, and therefore, producers and technologists will resolve the solutions to make that happen. So we just have to have the pain and suffering and see it first, Tanshama? For the market to kick in?

• 1:00:20Chamath Palihapitiya?

  Our friend in the group chat that shall not be named posted this meme.

• 1:00:27Chamath Palihapitiya?

  You guys saw it, right, which said like, "An autistic schoolgirl takes..." What was it? I have it here.

• 1:00:33David Sacks?

  Quit school. The dominos.

• 1:00:35Chamath Palihapitiya?

  The domino. You can show the dominos, but basically it said, "An autistic Swedish girl decides to skip school," is the little domino, and seven dominos later, this huge domino, it says, "The collapse of Europe's energy grid." And without commenting on the language used in the meme for a second, what is the point? The point is, these conversations can so quickly go off the rails and are not about national security and economics and quickly become about moral virtue signaling that you miss the point. The point in the United States, just to be very blunt, is that the cost of electricity has gone up by 46% in the last decade.

• 1:01:16Chamath Palihapitiya?

  It will go up by another 40-odd percent through 2030. So between 2010 and 2030, the cost of electricity for every single American will have effectively doubled, even though the ability to generate, particularly from wind and solar, have been reduced by 90%. Now, why is that? Well, it turns out that if you look inside the P&Ls of these utilities, it actually gives you the answer. So over the next 10 years, we have to spend, as a nation, just on upgrading power lines, $2 trillion. This is all cap... This is all like crazy, crazy OpEx, right?

• 1:02:00Chamath Palihapitiya?

  Capex improvements for sunk cost investments. Our power line infrastructure in America is 20-plus years old, 30-years-old. Our generation infrastructure is pretty poor. We have all of these failures. We don't have enough peakers. We don't have the ability to store energy when we need it. So if you add this all up, I do think that there's a huge economic incentive to solve it, and there are practical ways to solve it. And that's what we have to stay focused on. Because if we allow the moral virtue signaling to get in the way, we're gonna make some really stupid decisions. We're gonna keep trying to turn off nuclear. Another thing that Elon said, you know? We're not gonna greenlight shale and nat gas. We don't have time for this. If you actually believe this is a cataclysmic issue...

• 1:02:46Chamath Palihapitiya?

  You need to basically be okay with hydrocarbons because it is the only credible bridge fuel we have to keep the world working properly because otherwise what David said is right, we are going to economically destroy parts of the world by trying to race towards this net zero goal. By the way, guys, I just want to take the, you know, rip the Band-Aid off. Net zero by 2050, 26, it is not possible. There is zero credible plans that the world has to do it. So we have to take small incremental steps and many of them.

• 1:03:17Jason Calacanis?

  Yeah.

• 1:03:18Chamath Palihapitiya?

  And we should stay focused on that.

• 1:03:21Jason Calacanis?

  Yeah, the interesting thing.

• 1:03:22Chamath Palihapitiya?

  And you cannot let people guilt trip you because this is when you make these stupid mistakes like the entire continent of Europe made.

• 1:03:29Jason Calacanis?

  Yeah, really dumb.

• 1:03:30Chamath Palihapitiya?

  Which is now going to cripple many economies of that, of that entire continent unnecessarily.

• 1:03:37Jason Calacanis?

  Here's the good news. All this virtue signaling and, and people wanting to be green and, and for whatever reason, um, all of that now economics and geopolitical is forcing people to rethink nuclear, uh, the Diablo Canyon, um, nuclear power plant, which is the last one in California that's operational. Uh, it's being voted on today as we're taping this and it's expected that they're going to keep it online. The governor, uh, with the great hair wants to keep it going. And the fascinating part about this is how quickly...

• 1:04:04Chamath Palihapitiya?

  What choice does he have?

• 1:04:05Jason Calacanis?

  Exactly. And so now the awareness is so high about power and us losing it and asking people to turn off their air conditioning, turn off, don't plug in your cars.

• 1:04:14Chamath Palihapitiya?

  But people, people don't understand how nuclear energy even works and they're like, get rid of it.

• 1:04:19Jason Calacanis?

  They went to a no nukes concert in 1978 and they haven't changed their position since. But this is interesting. This guy, Gene Nielsen, um, who's been a champion of this stuff, he said, I thought our chances were zero of keeping this thing open. Um, and he said, what's, you know, and he said, he told this conference of attendees, this nuclear conference.

• 1:04:38Jason Calacanis?

  That the effort to maintain it, he said, what's happened since, you know, the last six months has been like a snowball. That everybody has changed their position just in the last year on shutting these things down. And we saw, obviously, Germany is re, you know, thinking the three remaining of their six that they were going to turn off, they're putting back on. And I think we're going to see new ground broken. And Japan came out just in the last week and said they're going to build more nuclear power and nuclear power plants. Now, think about that.

• 1:05:07Chamath Palihapitiya?

  That's awesome.

• 1:05:08Jason Calacanis?

  That's unbelievable. They had Fukushima. The Germans shut off their nuclear because of Fukushima.

• 1:05:13Chamath Palihapitiya?

  But guys, do you guys understand?

• 1:05:14Jason Calacanis?

  The Japanese are saying, we're building more.

• 1:05:16Chamath Palihapitiya?

  Guys, Fukushima didn't happen by accident. There was a like, an incredible tsunami which was triggered by a massive earthquake. You're talking about these extremely long tail events. Yes, the retaining walls could have been built better, but these are things we find, we iterate and we solve. It was not the reason to shut down an entire mechanism of energy generation.

• 1:05:39Jason Calacanis?

  Stupid mistakes where they put it just too low in the wrong place. If they had just put it up the hill a couple of miles, it would have been fine.

• 1:05:46Chamath Palihapitiya?

  But also, if you look inside of what happened, there was enormous pressure inside of these companies to basically, you know, take, take actual direct blame and responsibility. I get all of that, but these organizations were shamed into turning these things off. That is not the way to make good, smart decisions.

• 1:06:04Jason Calacanis?

  Okay, so Gorbachev, the last ruler of the USSR, passed away this week. Sax, your thoughts?

• 1:06:11David Sacks?

  Yeah, I mean, I think this was a real milestone. You go back to the 1980s and Ronald Reagan, who had spent his entire career being a Cold Warrior, saw the opportunity to basically do business with, with Gorbachev. Margaret Thatcher had told him that this is a man we can do business with. Gorbachev had come to power in 1985. He had initiated reforms of the Soviet system. He was a communist, to be sure, but he introduced political reforms called Glashnose and economic reforms called Perestroika. And Reagan sees the opportunity to go meet with him and they sign. Arms control treaty after arms control treaty and ended the threat of mutually assured

• 1:06:54David Sacks?

  destruction that the world had been living with since the beginning of the Cold War. You got to remember that, you know, the Cold War began shortly after World War II and we had this doctrine of mutually assured destruction or mad and the whole world was living under the shadow of nuclear annihilation. This was showed repeatedly when I was a kid. There was a TV movie called The Day After.

• 1:07:17Jason Calacanis?

  The Day After. It was scary as hell.

• 1:07:19David Sacks?

  It was really scary.

• 1:07:20Jason Calacanis?

  Oh my lord, they terrorized us, that America and we're all gonna die. We had, did you ever have nuclear bomb drills we had to get under your desk?

• 1:07:26David Sacks?

  Yeah, I mean, so, yeah, so if you're like our age, you remember this, that, that movie, by the way, that, that was a TV event movie that was one of the most widely watched movies. But there were others, you know, Jim Cameron used this concept in, in the Terminator movies, um, you know, it was something that people were really afraid of and Reagan sees the opportunity, he thought fundamentally that, uh, nuclear deterrence was immoral, that yeah, better to have deterrence than a nuclear war, but that he, if he could, he sees the opportunity to negotiate the end of the Cold War. And by the way, there were hardliners in his administration who did not want him to negotiate with Gorbachev, but they ended up doing a series of, uh, meetings, uh, it culminated

• 1:08:09David Sacks?

  in 1986 at the Reykjavik Summit and they signed, uh, deals to remove, uh, you know, these, these INF system deals. Now, and that ended the Cold War and then basically what happened is in 1989, the, the Berlin Wall came down, Gorbachev allowed the Western, the Warsaw Pact countries to leave and then in 1991, the Soviet Union collapsed. So, you know, he gets a lot of credit for being willing to reform that system. Now, the sad thing is, if we were fast forward 30 years later, where are we today? We're back in a new Cold War with Russia. I mean, that we've been spending a good part of this year talking about the threat of a nuclear use and, you know, this was a problem that we thought was solved 30 years ago.

• 1:08:55David Sacks?

  And now we're back with it today, and you've got to ask, have the successors of Reagan and George Herbert Walker Bush, the people who inherited our foreign policy over the last 30 years, have they done as good a job as Reagan did? Reagan ended the Cold War. We are back in a new Cold War. Why? What is the reason for this? There's been a series of stupid policies that now have put the risk of nuclear war back on the table.

• 1:09:28Chamath Palihapitiya?

  My interest in Gorbachev is slightly different. He is an incredibly important character of the second half of the 20th century. Undeniable. Won the Nobel Prize, as you said, David, kind of ended the Cold War. But the most important thing, in my opinion, was the precursor to Perestroika and why he did it. And as you said, this is a fairly ardent communist, although he had really interesting views, like he ran a very kind of like open kind of polyburo where folks could debate, and he promoted a lot of young people from within. All of these interesting things, but the most important thing, and he's written about this a lot, is the reason that he embarked on Perestroika

• 1:10:12Chamath Palihapitiya?

  was because USSR at the time had an incredibly poor work ethic, terrible productivity, and horrible quality goods. And I think that there's something to be learned by that. Because at the tail end of communism, essentially where you had central planning, central imposed economic principles, what happened? People did not feel that they had any ownership in the outcome. No agency. No agency whatsoever. And I think that there's a really important lesson to observe there, which is that if governments get too actively involved, this doesn't just happen in Russia, it happens everywhere. It's happening in California. We just talked about it.

• 1:10:54Chamath Palihapitiya?

  It's happening where we live right now. And if you look at then what happened afterwards, it became the aristocracy that basically ruled the USSR before.

• 1:11:05Chamath Palihapitiya?

  And then fighting against all these folks that wanted reforms. And that created this schism, which then perverted capitalism for, you know, seven or eight years, through Yeltsin, until Putin got there. And that's what created the oligarch class and, you know, really exacerbated a bunch of wealth capture by a handful of folks that may or may not have deserved it, and I'm not going to judge that. But I just think it's really important to understand that he was forced to embark on this because of all of these state central planning policies. And so it's just an important lesson for Americans and democracy, which is-

• 1:11:40Jason Calacanis?

  Be careful, if you want more government-

• 1:11:42Chamath Palihapitiya?

  Many states don't work, guys.

• 1:11:44David Sacks?

  You're exactly right. The Soviet Union, their economy used to run on what they called five-year plans. It was incredibly centralized. It was all run by the government. And, you know, this was communism. And the 20th century, the second half especially, was a giant battle of systems, not just of countries, not just the Western Bloc, you know, led by the US, the free world versus the Soviet Union, the Warsaw Pact. It was also a battle of philosophies and systems. It was the philosophy of state control versus freedom and a free economy. And freedom won, you know, the free economy won in that battle. And the crazy thing is, 30 years later, we're talking about socialism being a viable doctrine.

• 1:12:26David Sacks?

  You have politicians basically saying that they are socialists, but 30 years ago, you would have been like, that was unelectable.

• 1:12:34Chamath Palihapitiya?

  And the point is, example after example, empirical evidence well documented of just how it doesn't work. And I guess the thing is, you know, we all say like, you just have to learn it for yourself. You know, like you'll tell your kids to do, to not do something, add infinite items.

• 1:12:51Jason Calacanis?

  They gotta touch the stove.

• 1:12:51Chamath Palihapitiya?

  They gotta touch the stove themselves and get burned. We are about to go do that in California.

• 1:12:56Jason Calacanis?

  Can you imagine if like, people who want to be socialists here, if they had to be in a food line or have rations? Literally, Russia had food lines and they were rationing food in the 1980s. Like-

• 1:13:08Chamath Palihapitiya?

  Well, yeah, that's how this one shot got. A large driver of Gorbachev basically negotiating these peace settlements with, you know, with Reagan and this nuclear, you know, demilitarization, was in part because he knew he couldn't fight. Right, it was this realization that

• 1:13:23David Sacks?

  This system was collapsing.

• 1:13:24Chamath Palihapitiya?

  The collapse, he had no choice.

• 1:13:27David Sacks?

  Yeah, they could not keep up. Reagan began an arms buildup and there was an arms race and they were losing.

• 1:13:33Chamath Palihapitiya?

  They were losing.

• 1:13:34David Sacks?

  They were losing.

• 1:13:34Chamath Palihapitiya?

  And this is, and this is why like people should not misunderstand what Gorbachev was. He was not necessarily some democratic freedom fighter. He was a person who was observing the on the ground conditions of a socialist system, decay their ability to compete. And so he had to capitulate before it was forced upon him.

• 1:13:51David Sacks?

  Right.

• 1:13:52Chamath Palihapitiya?

  Meanwhile, United

• 1:13:53David Sacks?

  Right, this is why I don't think he deserves as much credit as Ronald Reagan is because at the end of the day, Gorbachev would have kept communism going if he could have.

• 1:14:01Chamath Palihapitiya?

  If he could have.

• 1:14:01David Sacks?

  If he could have.

• 1:14:02Chamath Palihapitiya?

  He wanted the Soviet Union to stay together. I mean, he

• 1:14:05David Sacks?

  That's right, but his, but, but I think to his credit, when the things start to collapse, he didn't use

• 1:14:09Chamath Palihapitiya?

  He acted decisively.

• 1:14:10David Sacks?

  Violence and repression to try and hold it together. So, you know, he was a, he was a reformer, he was a liberalizer.

• 1:14:17Chamath Palihapitiya?

  Pragmatist, maybe?

• 1:14:17David Sacks?

  And a pragmatist and didn't use violence. But, and ultimately he was a partner for Ronald Reagan. Remember, Ronald Reagan began this gigantic arms buildup. He was denounced as a cowboy who would get us in World War III. But when he had the chance to negotiate a deal with Gorbachev, he took it. And they basically got arms control.

• 1:14:34Chamath Palihapitiya?

  And it was because Reagan was able to sit on top of an extremely productive capitalist system that allowed him to make those investments that made that capitulation basically a fait accompli. And I think that that's another thing for a lot of us to, to understand, which is free market capitalism, removing these degrees of decision making, give us degrees of freedom. And I've said this before on the last pod. The great thing about the IRA and what Chuck Schumer did is actually will be written in 10 or 15 years from now, because when we get to energy independence, when every home is resilient, the national security calculus in America changes wholeheartedly overnight. Yeah, I mean, think about our relationship.

• 1:15:16David Sacks?

  We were energy independent two years ago.

• 1:15:18Chamath Palihapitiya?

  Right, but

• 1:15:18David Sacks?

  Biden canceled it.

• 1:15:20Jason Calacanis?

  Okay, well, listen.

• 1:15:22David Sacks?

  No, it's true. If you're willing to use natural gas and fracking, America is one of the richest energy countries in the world.

• 1:15:28Jason Calacanis?

  Oh, we produce a lot of oil, too, yeah. I mean, listen, it will change everything if we can really go all in on all of the categories: nuclear, fossil fuels, and renewables.

• 1:15:39Chamath Palihapitiya?

  If you let the capital markets do and the free markets do what they're meant to do, they will empower the government to do great things for all of you, all citizens.

• 1:15:48David Sacks?

  Yes, I agree with that 100%.

• 1:15:50Jason Calacanis?

  And the reason we want to stop it is because we have a couple of examples of, you know, extreme wealth. And I think that's something we have to think about is like, are the extreme, is the extreme wealth created for a certain class enough to stop the prosperity trend that we actually have in America?

• 1:16:04David Sacks?

  Listen, Jason, the politicians in California think they can run fast food businesses better than the people who own those restaurants.

• 1:16:12Jason Calacanis?

  These people have never worked a day in their lives.

• 1:16:14Chamath Palihapitiya?

  No, we have, the great thing is, they wouldn't, yeah. The great thing is, we have a running A/B test, which will show whether this state central planning can work or not. And again, if we refuse to want to listen to the examples of Russia, or all of these other countries that have tried this, then so be it. We will know in the next three to five years that these policies actually don't work, and actually, that it actually accelerates the exact hellscape that they think they're trying to avoid.

• 1:16:43David Sacks?

  But, you know, not only, to my point about foreign policy, not only are we forgetting the lessons of this Cold War, the economic lessons, that a free enterprise system generates more wealth and prosperity, and more national greatness, more ability to fund a defense budget, create a better economy, not only does it do all those things, we forgot, not only have we forgotten that, but also, we have abrogated, we have ended every single defense control and arms control treaty with the Russians that Reagan and Gorbachev signed. Why? Why did we do that?

• 1:17:19David Sacks?

  Now our nuclear missiles are pointing at each other again. And you know what? Russia's a much poorer country than the US. We're actually 15 times richer than them. During the Cold War, at their peak, we were only three times richer than them. But we're 15 times richer, but they still got over 6,000 nukes. Why do we get rid of all those arms control treaties? Why have we basically alienated them?

• 1:17:39Jason Calacanis?

  Yeah, we talked, we'd said it before, like you're dealing with a pragmatist and Putin's KGB agent.

• 1:17:45David Sacks?

  Maybe you feel like Putin isn't someone we can deal with now, but he was someone we could have dealt with 10 years ago, 20 years ago. We missed the opportunity to deal with him, Jason.

• 1:17:54Jason Calacanis?

  If he was a rational actor, if he was a rational actor, we would be able to deal with him. I think the only way he's actually going to be really, the only way we'll be able to deal with him is if he doesn't have the oil market he has. Like, he just has too much power from that oil. And over time, that's the solution. We have to be energy independent. You know, I think Europe has learned that lesson harder than we have.

• 1:18:12David Sacks?

  Gorbachev was a communist. He was an heir to Stalin, and yet Reagan could still do business with him and sign an arms control treaty so that we could end the risk of mutually assured destruction. You do not have to believe, you do not have to believe that Putin is a good guy in order for us to avoid getting back into a Cold War, which is the situation we find ourselves in now. How does it benefit us to have Russian nukes once again pointed at our heads?

• 1:18:41Jason Calacanis?

  Yeah, I mean.

• 1:18:41David Sacks?

  And the reason why, the reason why we alienated him, Jason, has nothing to do with him being a madman or whatever. It is because we brought NATO, which he views as a hostile military alliance, right up to his border. And, and by the way, listen to this video from Gorbachev. Gorbachev was asked about NATO expansion in front of the US Congress. He was giving a talk to them and they asked him, Gorbachev, what do you think about NATO? And what did he say? He said that you cannot humiliate a country this way and expect there to be no consequences. Gorbachev was against NATO expansion. When, when basically George Herbert Walker Bush and the Secretary of State James Baker went to Gorbachev to argue on behalf of German reunification, this is basically in 1990, Baker made the promise to Gorbachev, not one inch eastward.

• 1:19:26David Sacks?

  Gorbachev said, yes, okay, they can reunify, but we do not want NATO moving up to our border. Baker made that promise. We have brought NATO up to their border. That is why Putin regards us with hostility.

• 1:19:40Jason Calacanis?

  Yeah, and I think Europe regards him with hostility and they're scared of him because he keeps invading countries. So, yeah, it takes two to tango, but hey, this has been episode 94.

• 1:19:49David Sacks?

  It does, it does take two to tango, but you have to ask, has the US foreign policy over the last 30 years that's gotten us in a new Cold War with Russia, has that been a successful foreign policy? They have undermined all the good work that Ronald Reagan and Gorbachev did together to end the Cold War. We are back in a new Cold War.

• 1:20:07Jason Calacanis?

  You need to find Reagan.

• 1:20:08David Sacks?

  Putin has some blame, Putin has some blame, but so does the US State Department. So does the US State Department.

• 1:20:14Jason Calacanis?

  And Europe, Europe has a big part of the blame too here because he's their neighbor. Yeah. For the Sultan of Science, the Rain Man and Reagan Library Chairman, are you the Chairman of the Reagan Library? Let me ask you this, when you were a kid, did you have a Reagan poster in your room? Have you ever owned a Reagan poster?

• 1:20:30David Sacks?

  I'm sure, I've definitely owned a picture of Reagan and, um, look, I'm a fan, Ronald Reagan, listen, Jason.

• 1:20:38Jason Calacanis?

  Did you ever have a Ronald Reagan poster or a picture in your dorm at Stanford? Yes or no?

• 1:20:44David Sacks?

  Listen, Ronald Reagan.

• 1:20:45Jason Calacanis?

  That's a yes.

• 1:20:46David Sacks?

  Hold on a second. Ronald Reagan won the Cold War without firing a shot. He gave us the greatest economy the US has ever had. He ended the inflation and stagflation of the 1970s. And again, he avoided getting us into any of these major wars. Tell me the politician who you revere.

• 1:21:04Jason Calacanis?

  If you could have lunch with anybody in history.

• 1:21:05David Sacks?

  Who's the politician who you revere, who has a track record like that?

• 1:21:08Jason Calacanis?

  Um, yeah, I mean, I guess one would say Bill Clinton, you know, would be the closest, you know, great president of our lifetimes, right? You would agree with that?

• 1:21:17David Sacks?

  I think he was a good, good president, especially on the domestic.

• 1:21:20Jason Calacanis?

  Number two behind Reagan in our lifetime.

• 1:21:21David Sacks?

  But remember, he benefited from the economy that Reagan created.

• 1:21:24Jason Calacanis?

  For whatever reason, you would agree with me, Clinton is right behind Reagan.

• 1:21:27Chamath Palihapitiya?

  Reagan and Clinton in since like 1950 something, easily top two.

• 1:21:32Jason Calacanis?

  Yeah, I mean, it's hard for Sacks to say this.

• 1:21:35David Sacks?

  Eisenhower, Eisenhower was very good. Listen, I mean.

• 1:21:38Chamath Palihapitiya?

  But head and shoulders, I think, like for practically what they dealt with at their point in time. Amazing.

• 1:21:43Jason Calacanis?

  All right, listen, Sacks, I know you love Reagan. And I think that's where you should put, you should put Reagan and Nixon. Reagan and Bill Clinton, one on each side of you for next week. Will you do that for us?

• 1:21:54Chamath Palihapitiya?

  I gotta go, guys.

• 1:21:56Jason Calacanis?

  I gotta go too. All right. Love you, Sacksy Poo.

• 1:21:57Chamath Palihapitiya?

  I love you, Sacksy Poo.

• 1:21:58Jason Calacanis?

  We'll see you all next time. Bye, bye.

• 1:21:59Chamath Palihapitiya?

  Love you too.

• 1:22:00Jason Calacanis?

  Happy birthday, you.

• 1:22:01Chamath Palihapitiya?

  Thanks, Bill.

• 1:22:10David Sacks?

  And instead, we open sourced it to the fans and they've just gone crazy with it. Love you, S.I. I'm the queen of Kinoah.

• 1:22:23David Sacks?

  Besties are gone.

• 1:22:26David Friedberg?

  That is my dog taking a piss in your driveway.

• 1:22:34Chamath Palihapitiya?

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

• 1:22:42David Sacks?

  What, you're the bee? What, you're the bee? What? We need to get merch. Besties are back.