E20: Robinhood wrap up, Insiders vs. Outsiders, California's failing report card & how to fix it

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/MikeSylvan Referenced in the show: The Insiders' Game by David Sacks https://www.persuasion.community/p/the-insiders-game ABC News - CA EDD admits paying as much as $31 billion in unemployment funds to criminals https://rb.gy/g8uwfj Forbes - Why California Is In Trouble – 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion https://rb.gy/5bhfsf Rescue California - Recall Gavin Newsom https://rescuecalifornia.org Show Notes: 0:00 Wrapping up the Robinhood situation: major lessons learned, Elon's Clubhouse interview with Vlad, is the cash infusion to Robinhood a trade of the year candidate in 2021? 20:21 Understanding short positions - why do firms short, more transparency & margin requirements 26:08 Sacks on the growing insider vs. outsider theme in politics & finance, importance of institutions in chaos 31:45 Breaking down California's report card, why the state is such a mess, what structural problems plague it & how to fix them 1:02:04 Chamath's Aziz Ansari story, Governor potential, top ways to save California

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

• 0:18David Sacks?

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

• 0:21Speaker 01

  Love you besties.

• 0:22Jason Calacanis?

  Queen of KenYi himself, David Friedberg, Rain Man David Sacks, hot off the banger by Young Spielberg, closing up episode 19. And of course, the dictator Chamath Palihapitiya. How are we doing, boys? Lovely. How are you, Jaka? Lovely. Friedberg? Lovely. Lovely. It's a lovely Tuesday, emergency pod. And Sacks? Nice to be with you guys. Retired from Kraft Ventures to pursue his dream of being a Fox News host. How's that going for you, Sacks, now that you've got full media blitz?

• 1:00Jason Calacanis?

  Well, yeah, I've been invited. I was on Bloomberg. I've been invited on CNBC tomorrow. I might even be on Fox on Thursday. So everybody, maybe Tucker, everybody wants a piece of the besties. Everybody wants a piece. Unbelievable. We were pariahs in our own industry and now we've transcended tech and taken our rightful position. I got invited on CNN.

• 1:54Jason Calacanis?

  Which is crazy. On what show? On what show? The guy with the British accent. He kinda does the. Piers Morgan? No, there's another guy who does CNN International and they were doing like a whole. Oh, that guy. Yeah, yeah, yeah. Yeah, you know, the guy with the glasses. He's funny, that guy. He's pretty funny. Yeah, I didn't do it. I really do not want to speak for Robin Hood, but we do need to pick up where we left off in episode 19, which a lot of people were wondering, Chamath, are we still friends? Are we still besties?

• 2:26Chamath Palihapitiya?

  We are, but I do want to say one thing. Jason and I talked this weekend and he said something to me, which I actually thought about a lot, which is that, hey Chamath, when you get that emotional, you know, I think the point of what you're saying gets lost and I had, I had a lot of time to think about that. So, one, I wanted to say, Jake, if, if anything I said, you know, hurt your feelings, I want to say I'm sorry. I think you are the most incredibly loyal person and that, you know, spans friendship to being an investor too. So I just wanted to say I'm sorry to you. And to be quite honest with you, when I, when I listened to a couple of my comments, I was like, wow, you know, I was a little emotional and I think it didn't need to be

• 3:12Chamath Palihapitiya?

  that super extreme. I think, you know, the thing that it touches for me is like, I forget sometimes maybe where I'm at today and I go back to where I was 20 years ago or how I felt as a 16 year old and I channeled that a little bit. So anyways, Jake, I just want to say I love you with all my heart and I'm sorry.

• 3:28Jason Calacanis?

  I love you too, Chamath. And you know, it, it did get a little bit personal and we were all passionate about, you know, our positions and, you know, it was a little difficult for me because I'm trying to give my guys, my team, Robin Hood, the benefit of the doubt. And it wasn't an easy week, obviously, to do that, but just to recap here. Sunday Vlad was on Clubhouse with Elon Musk, our pal, who almost blew up Clubhouse and there were so many people trying to get into that room and I think it tops out at 5,000 on Clubhouse that people were holding their phones up to their YouTube accounts. I think that's probably how most of us listened to it was the YouTube, people were just syndicating

• 4:10Jason Calacanis?

  it live to YouTube, but Elon did a tremendous job interviewing Vlad, which is, leads to a really interesting topic David about subjects just routing around the press and going directly. I mean Elon is now the best interviewer in the business and he basically said, listen, did you have a gun to your head? And I think it was pretty much that, according to the reports that have come out, the Depository and Trust and Clearing Corporation, which is Wall Street's main clearinghouse for stock trades demanded $3 billion in addition collateral from Robinhood, which they said was an order of magnitude more than usually required. We all know they raised 2.4 billion this week on top of the 1 billion from Wednesday, on top of the $600 million credit line, that's 4 billion in cash.

• 4:56Jason Calacanis?

  Apparently the requirement for them went from 3 billion to 700 million. So it seems like that's, there's some equaling out of what they have to cover and the GME short interest dropped in half today, it's Monday, I'm sorry, it's Tuesday, but yesterday had dropped in half. The squeeze seems to have settled down. Wall Street Bets has clearly won and of course, episode 11.

• 5:19Chamath Palihapitiya?

  Did Jason, did, I didn't listen to it, but did, do you guys think that Elon and Vlad got to the truth? Like was it clear?

• 5:28Jason Calacanis?

  Sacks, well let's get an independent party here, Sacks.

• 5:30David Sacks?

  Yeah, so I thought the interview was, was a bit curious because it took Elon several tries to get Vlad to say the, quite frankly, the obvious answer. Elon set it up saying, you know, what I think all of us were thinking, which is, look, were you either forced to do this or is it an action that you decided to take? And if so, why?

• 6:00David Sacks?

  And Elon kept trying to get him to say, yeah, we were forced to do this. And Vlad wouldn't quite say that. He gave these very vague, ambiguous answers, which is why Elon finally said, listen, did you have a gun to your head or not? Blink twice, you know? Yeah. And so it was, I don't know whether it was a function of miscommunication or whether we just don't know all the facts yet. But I don't feel like the interview put everything to rest the way that it easily could have. And Elon, I don't want to be, I don't want to pile on to the situation. I, you know, I'm pro founder. I'm going to give Vlad and Robin Hood the benefit of the doubt here. I think probably they were compelled in some way to do this. I don't think they wanted to do it.

• 6:42David Sacks?

  But, you know, if we're going to make this a teaching moment, what I would say is like to any founder, if you're ever in the position of having to take an action that is inimical to your stated mission, right? And their stated mission is freedom to trade. What was the word you used? Animical? Animical, anathema, sure, yeah. If you're going to basically violate your stated mission, you either need to post the government order that required you to do that, or you need to post a very well reasoned blog explaining why you're doing that. And, you know, if I were Robin Hood and I got a call in the middle of the night saying that you have to basically take this trade offline, I would say, well, give that to me in writing because I'm going to have to post that on my website. Right?

• 7:25David Sacks?

  If I don't have a choice about that, I, you know, I need to be able to refer back to this industry order that I'm receiving. And the fact they didn't do that and the fact that they didn't post a blog explaining the reasons behind the choice, and in fact Vlad's now had to go back three times to explain it. I think that's created this world of problems for them.

• 7:43David Friedberg?

  There's a difference between this being a regulatory requirement and a commercial requirement.

• 7:49David Sacks?

  Correct.

• 7:49David Friedberg?

  Like, if you think about the, you know, the law, the regulatory body that oversees the law, that kind of oversees what they're doing business wise, the SEC or whomever could have come in and said, here's what I'm telling you, you have to do. I'm your regulator. But what happened was there are these clearing firms that they partner with that said, "I need you to post more capital." And rather than post more capital or take the risk of going bankrupt, they said, "We are going to restrict trading to minimize the capital requirements that we have on our book." And so if you think about what that decision comes down to, it's a decision of either our customers are going to lose money or we're going to lose money. And I know that it's not that black and white,

• 8:34David Friedberg?

  but you know, it's very difficult to kind of explain the nuance of what took place there. But it really was a point of like, "We are going to lose money, or we are going to go bankrupt, or our customers are going to have to lose money." And that's such a tough decision. I can't imagine any executive, any of us being in that situation, and deciding, "Do you protect your shareholders? Or do you protect your customers? And how much do you let your shareholders lose? How much do you let your customers lose?" And it was a very complicated situation that they found themselves in, because their business model was predicated on this clearing, you know, on this model that they ran that when suddenly a lot of risk came on the book, they didn't have the capital to cover it. And they had to basically, you know, limit their customers as a result. It was a pretty ugly situation.

• 9:17David Sacks?

  But David, well, to kind of say one thing, I actually think that if the choice is simply between you losing money, you, the company, or your customers, or your users losing money, I think that's an easy choice. I think the company eats it. Look what Airbnb did during COVID, right? When they had a whole ton of cancellations because of COVID, they ate all those deposits. They made good on that. And I actually think if that's all that was involved, that was a big mistake. I think Robinhood should have eaten it.

• 9:47Jason Calacanis?

  Chamath, you want to chime in here as we go around the horn?

• 9:49Chamath Palihapitiya?

  Look, I think here's what we've learned, which is that there's all kinds of ways in which this financial infrastructure works that none of us really understand. It turns out that it may have also included the people running Robinhood, to be quite honest. And so, you know, we know what payment for order flow is now. We know that, you know, some companies like Public have completely eschewed it. You know, folks like Robinhood make a ton of money from it. I think it's clear that, you know, Elizabeth Warren to AOC to whomever are going to now spend a bunch of time talking about it. It may or may not change. But the problem with the whole situation of GameStop actually doesn't really...

• 10:30Chamath Palihapitiya?

  Surround that because it's more of a symptom. The real problem was what led up to it. And what led up to it was, you know, the insistence that a bunch of organizations needed access to a preferential set of data so that they could theoretically participate in that order flow before. And the second was that the rules for, you know, certain organizations are different than those for banks. And so, you know, hedge funds can lever themselves up to such a massive degree that you create that, you know, LTCM type of issue where, you know, you take five billion and all of a sudden you have 1.5 trillion. So that shouldn't happen, right? So we need to figure out how we can actually deal with those systemic issues upstream.

• 11:13Chamath Palihapitiya?

  And then we need to have better disclosure downstream so that consumers could choose. Hey, listen, if you want, you know, PFOF. By the way, as I've learned in the last couple of days, payment for order flow is actually not necessarily such a bad thing in certain cases because it actually guarantees better price execution in some cases. But that's not always true for options. I think it's somewhat more true for stocks. There are, you know, for example, like Jason, when you asked me, you know, I asked the team at SoFi, like, you know, what's the, how much, how much is, uh, how much is made on payment for order flow? And the answer was 1.5 million dollars. And the forecast for next year was like 400K. So that's materially different than 400 million dollars, right? So you start to figure out like, okay, how should we think about these problems?

• 11:58Chamath Palihapitiya?

  And I think that's what we have to face. We have to get answers to these questions now.

• 12:02Jason Calacanis?

  Yeah, there's definitely going to be a lot of investigations into this. And thinking it through, I think there are kind of three possibilities here. When you, when we analyze this, now that we're a week out from it, I think, all going down, which is, was there poor communications or are there non-disclosures in place, right? We're trying to figure that out with Robin Hood. It feels like there's both, right? There could very well be non-disclosures with this private company, the DTCC. And obviously they could have optimized communications. And then was this a black swan event? Or to your point, is it poor preparedness, Jamath? We have to figure that out of how prepared are these companies to deal with this kind of stuff? And then is it? Really bad optics that sit in now and all these people are involved? Or is it a conspiracy, a grand conspiracy?

• 12:47Jason Calacanis?

  And then if there's going to be an investigation, it's going to be pretty hard to cover up any conspiracy, right?

• 12:52Chamath Palihapitiya?

  Can I offer one idea? I think that there are certain, there are certain parts of the economy or, you know, the way in which the world works where you, you can't distinguish, you know, bad operational capability and black swan events. I'll give you an example, airplanes. There is just no situation where you can say a plane crash was a black swan event and you move on. Right? And we, we decided that a long time ago. And so as a result, just the amount of risk management and compliance is so high that every time something like that happens, it's, it's an enormous process. And we've seen that in the 737 thing for Boeing.

• 13:33Jason Calacanis?

  Yeah, 737 MAX, by the way, that just got settled too, for just 2.5 billion, which is kind of crazy. Those planes are back on and nobody went to jail.

• 13:41Chamath Palihapitiya?

  Right, so that's an example. At the other end of the example, you know, we have things that have happened like on Facebook and Twitter and Instagram and Snapchat, which is like, hey, all of a sudden, like, you know, certain kinds of content or certain things happened like the Christchurch mass shooting. The societal judgment there was that that was a black swan event. You know, we don't need rules and regulations. And so I think that another important question that we have to ask is, is the financial plumbing that, you know, sort of allows the capital markets to work and specifically the financial plumbing that allows retail, normal folks to participate in order to try to make money and get ahead? Should that be deemed more like, what you said, Jason, black swan like infrastructure where it's like sometimes shit happens and we just move on?

• 14:25Chamath Palihapitiya?

  Or is it more like an airplane crashing where you say, none of this stuff should be allowed to happen?

• 14:29David Sacks?

  Could I, can I add one, one more point to that? Which is, I, I think that it's frankly spin to be trying to characterize concerns about what happened as a conspiracy theory. You know, I heard Vlad use that word and Jason, now you're, you're echoing the company's talking points. The reason this is not a conspiracy. Is because Citadel is on both sides of the trade. It's a conflict of interest. We should be using the word conflict, not conspiracy. Now, the question is, how do we interpret that conflict of interest? You have Citadel providing payment for order flow. So they're basically executing Robinhood's trades. They're their biggest customer.

• 15:12David Sacks?

  And then at the same time, they're moving in and they're backing up Citron and Melvin. So they're on both sides of this trade. How does that work? How can we not have questions about that? And to then characterize that, oh, it's a conspiracy theory. If you have questions about it, really?

• 15:28Jason Calacanis?

  No, no, I'm totally fine with people having, investigating if there is a conspiracy, right? And the conspiracy that people were floating is Robinhood was told to stop trading these stocks by Citadel. That did not happen. If that did happen, that would be explosive and impossible to cover up. What it was is, does DTCC have some influence? Or does Citadel have influence on the DTCC? You know, those are the questions that I think remain unanswered.

• 15:55Chamath Palihapitiya?

  The DTCC is a cooperative. So it's a collection of its member organizations. So I think what we'll find out, which organizations were part of DTCC? Who made the decision? Who then told Robinhood? You know, we'll also find out, by the way, who put in the money to Robinhood? You know, did they have a direct beneficial interest in then having DTCC make that decision? And so I think where David's right is like, imagine this conflict of interest. I, now let's just use me as an example. I am social capital. I am buying their order flow. I am also a member of the cooperative. I'm also backstopping their investment. And now all of a sudden, you would say, well, Chamath, your hands are way too messy here, right?

• 16:40Chamath Palihapitiya?

  Like your fingers are in a lot of pots. And how do I know what, you know, exploding message on Signal wasn't sent?

• 16:49Chamath Palihapitiya?

  You don't know.

• 16:50Jason Calacanis?

  You don't know.

• 16:51David Sacks?

  Yeah, all we do know is that you had all these insiders, right? You had Citadel, you had this industry consortium, whether it's the collective or Citadel individually, they were under pressure by the industry. And at the same time, you had these outsiders, you had these Reddit kids who had basically taken them for $20 billion, right? They had finally figured out a way to beat the insiders at their own game. And just at the moment that these outsiders were winning and about to deliver the coup de grace and bust these guys out of the business for good, somehow the insiders managed to tip the board over and start a new game. That is what people are reacting to. And look, I mean, you know, I'm not saying that.

• 17:34David Sacks?

  I don't know why Vlad would have done it unless he was frankly forced to do it, right? Because why would he? So I'm not blaming him. But there is something fundamentally very corrupt at the way that the system and these insiders who have all the power and all the money, when they finally got threatened, they basically figured out a way to turn the board over and prevent the outsiders.

• 17:54Chamath Palihapitiya?

  By the way, the other thing that isn't getting covered, and this is going to be the tragedy of this is none of us really knows the cost of the $3.4 billion that they took in. I'll tell you the only group of people that are for sure going to get completely creamed in this, which are employees. Right? I mean, we know that-

• 18:13Jason Calacanis?

  Because you think they're going to get too much preference stack?

• 18:15David Friedberg?

  Because they got diluted?

• 18:16Chamath Palihapitiya?

  Oh, my gosh. I mean, how do you not put 3.4 billion dollars in at par? Who would do that?

• 18:21Jason Calacanis?

  Yeah, I think that's what's exactly happened. I don't have inside information. But I think that's exactly what happened, yeah. That's my guess.

• 18:28Chamath Palihapitiya?

  I mean, if-

• 18:28Jason Calacanis?

  I think that, or perhaps a discount to the IPO, which is imminent from what I've been reading online.

• 18:34David Friedberg?

  Yeah, talk about terrible timing too, right? I mean, they were trying to go public this year.

• 18:37Chamath Palihapitiya?

  My gosh.

• 18:37Jason Calacanis?

  Maybe terrible timing or maybe perfect timing. I mean, it may be that-

• 18:41Chamath Palihapitiya?

  Jason, if it turns out that they were able to- I mean, then it then it creates a whole host of issues, which is how stupid are these investors? But if if that is in fact what happened, because you look at the, for example, the the pound of flesh that, you know, Silver Lake got out of Airbnb, what a brilliant trade. I mean, so like, if there was one organization that came out looking-

• 18:59David Friedberg?

  That was my deal of the year from last year from our from our Vessi Awards.

• 19:02Jason Calacanis?

  Yeah, go ahead. Explain it, Friedberg.

• 19:03David Friedberg?

  Yeah, they put in debt and then they got warrants and the warrants ended up making them like-

• 19:08Chamath Palihapitiya?

  Silver Lake?

• 19:09David Friedberg?

  Forex, it's insane. They made they made like three, four billion dollars.

• 19:12Jason Calacanis?

  Right, but the company's worth over a hundred billion now, so as downside protection during a pandemic that could have gone on for three years.

• 19:19Chamath Palihapitiya?

  No, no, but that's the whole point. If you think about the if you think about the trade of the great financial crisis, it was Warren Buffett putting capital into Goldman Sachs, which was-

• 19:26David Friedberg?

  And Swiss Re, he did the same deal, yeah. He did five billion at each of them the same weekend.

• 19:32Chamath Palihapitiya?

  Exactly, and he said, hey, guys, everything is fine. These guys are going to be fine. They're backed by Berkshire. And it turned out everything was fine. And, you know, he made he made an incredible fortune. And I think, I mean, on top of his already fortune. So the point is, he made a great trade. I think that in the in the Silver Lake example, they did the exact same thing. They were like, hey, guys, we believe in this, everything's going to be fine. And when all of us were literally losing our mind because we were stuck in our apartments and houses, thinking the world was going to end. Silver Lake saw they had clarity. They did a deal, which was the trade of the year. David's right. And so similarly, you would have thought that this moment was the opportunity for the trade of the year of 2021. I mean, we're early on, but-

• 20:13Jason Calacanis?

  All I know is I've been getting increasing offers for my Robinhood shares in the secondary market, you know, throughout. Two questions here. We have been having a hard time understanding who's short, what the short interest is. There's a bunch of like data companies that are providing estimates, and maybe the data is only clear-

• 20:32Chamath Palihapitiya?

  The best, you're right. The best source of data that I have access to is a company called Market, M A R K I T. They're they're they're quite large. But as of this Friday, the short interest was still, I think, about 50% in GameStop. And so it's been it's been ebbing down. I didn't check today.

• 20:51Jason Calacanis?

  Well, the the report was it got cut in half again, and that there was a very small short interest now.

• 20:58David Friedberg?

  But the stock dropped another 60% today. So obviously, if you're short the stock, you may start buying and taking your profit and your gains and going home at this point.

• 21:06Jason Calacanis?

  And moving on. So do we need to, is this going to start a discussion of transparency in shorting? And should all that information be short? Should you be allowed to short more than the shares that are available or that are available in the float?

• 21:19Chamath Palihapitiya?

  I think

• 21:20Jason Calacanis?

  And should we readdress shorting in general?

• 21:22Chamath Palihapitiya?

  No, there's a simple, there's an even, I think shorting is a healthy component of the market, and I wouldn't, I would leave it alone, because there, I think there are some legitimate organizations that short for three reasons. Reason number one is that they are developing a market neutral strategy for their clients, and people are, should be allowed to pay for that. Right? Number two is people are directionally betting on a trend or investing on a trend, and they are trading that against potentially some other position where they are long. So that's an explicit view, less about being market neutral. And then the third is that some people see outright frauds, and they're trying to vote loudly that, hey, listen, there's something untoward happening here. So I think shorting is really good. I actually think the simpler solution, and listen, and tell

• 22:03Chamath Palihapitiya?

  me if you guys agree, is just go to T plus zero settlement. Why? All these margin requirements go away altogether. The problem, the reason why we have all these margin requirements is all of a sudden you have this weird 20, 48 hour period that, you know, it's like, oh, wait, who's got the shares? Do I have the shares? No. Do you have the shares? So they, did I lend them to you? Did you lend them to me? Are you going to pay me first? Am I going to pay you first? And instead, you know, this is the kind of thing where it's like, in 2021, this should be real time and automatic.

• 22:29David Friedberg?

  Yeah, we know. Every, every share should be, every share should be ID'd, right? And then you should know exactly where it is. You know, by the way, there's another point that, there's another point that Chamath didn't make, which is that there is a benefit to the long holders and equities, when there is shorting of that equity in the market, which is that they're getting paid borrow on those shares. So for folks that don't realize, or their broker is, but you can access that borrow. If you own shares in a company that you're going to keep holding, let's say you own some shares in Amazon, and someone else wants to short Amazon, they have to borrow those shares from someone. And they're paying a fee, an interest rate, to borrow those shares. And so the cost to short a stock is actually not zero. You have to pay a borrow to borrow someone else's shares. So if you're holding those shares in Amazon, you can actually make money.

• 23:14David Friedberg?

  Um, if you have the appropriate broker relationship for those shares being sold short by someone else. And so this isn't just a people are coming in the market and slamming down stocks. They are paying the people that are long the stock for the right to borrow their shares and, and, and sell them ahead of, you know, buying them back later. Um, and so in the case of GameStop, I think the cost to borrow got so high. Uh, that you're basically paying thirty, forty, fifty, sixty percent, you know, interest rate to borrow GameStop shares to sell them short because there was so much interest in, in selling short. But there, you know, there is a market dynamic in, in the cost to sell short that, um, you know, that doesn't, uh, come at a, at a, at a kind of negligible or free cost.

• 23:56Chamath Palihapitiya?

  The, my initial, my introduction to shorting, uh, in that example was when I first bought Tesla.

• 24:03Chamath Palihapitiya?

  That, you know, my broker said, you know, Chamath, if you lend your shares out, you can make twenty-four percent, I remember this conversation, twenty-four percent a year interest.

• 24:11David Friedberg?

  Right.

• 24:12Chamath Palihapitiya?

  And I thought, oh my God. And then I said, well, what, what am I really doing? And he's like, well, you're allowing people to bet against Tesla. And I said, no. And I just kept the shares and I was like, I'm never going to allow people to borrow.

• 24:23David Friedberg?

  Really?

• 24:23Chamath Palihapitiya?

  And since then, to be clear, I've never, I've never, ever, ever allowed my shares to be borrowed, ever. And it's just a philosophical decision. I don't like shorting, um, but I believe that you should be allowed to do it.

• 24:36David Friedberg?

  I mean, if you're going to be a long holder anyway, and you're saying, I'm going to hold these shares for five years, ten years, whatever.

• 24:40Chamath Palihapitiya?

  I just hate.

• 24:41David Friedberg?

  It's a way to juice your returns.

• 24:42Chamath Palihapitiya?

  It's true.

• 24:43David Friedberg?

  It's how a lot of people think about, especially mutual funds that own large positions and stocks. They'll, they'll make really good juiced returns because they're getting paid to, to borrow the shares, you know?

• 24:52Chamath Palihapitiya?

  It gets even better if you're, if you're running a levered book because then, you know, you take a buck, you spin it up to six bucks, you buy six bucks of Tesla. Now all of a sudden you're earning twenty-four percent on six shares, even though you've notionally bought one share.

• 25:03David Friedberg?

  Right.

• 25:03Chamath Palihapitiya?

  I've still never done it. I can't, I can't bring myself to do it. I just feel like it's just so. I just can't do it. I just like, it's like, how can you be long and then bet against your own company, I guess?

• 25:14Jason Calacanis?

  Well, yeah, it doesn't make sense, but Chamath, I'm sorry, Sax, should we limit the amount of shares that can go short against a company in some way? And should we add a transparency where if you short more than X percentage of those shares, we know your short position because that seems to be also very confusing here. There are people speculating on Twitter that the Wall Street Bets crew, and I have no knowledge of this, or other hedge funds came in and saw this mess. And that what we've seen the last couple of days where other people shorting at 300, or it could have even been the same traders or some portion of the traders who ran this up with the short squeeze, then flipped their position from long to short.

• 25:53David Sacks?

  Yeah, I look, I clearly we need more transparency. We need to resolve some of these conflicts of interest, prevent them from happening. I think a lot of the users of Robinhood didn't understand that they were the product, not the customer. That that is a real issue. But let me, let me kind of up level this and speak to the politics of this because something really interesting happened. You had everybody from AOC to Ted Cruz basically denouncing what happened here, taking the side of Wall Street Bets against these Wall Street moguls. And so what you're seeing now is a new fault line in American politics in the post-Trump era. It's not just about left and right anymore. It's about insider versus outsider. And I think this is going to be a major, major theme that we see.

• 26:38David Sacks?

  And let me actually, I want to, I want to share something. You know, I just wrote a blog post called The Insider's Game about this idea. And I found a passage in Elizabeth Warren, Elizabeth Warren's book, which is really interesting because it describes how the insider's game works. And the person who described it to Warren is Larry Summers. Yeah, none other than Larry Summers, who was the former Treasury Secretary under Obama. He was president of Harvard. He's the consummate insider and he taught the insider's game to generations of Harvard students. So here's what he said. He presented Warren with a choice. He said to her, well, she He said, "I could be an insider or I could be an outsider."

• 27:21David Sacks?

  This is from her memoir in 2014, A Fighting Chance. She wrote, "outsider," quoting Larry Summers, "outsiders can say whatever they want, but people on the inside don't listen to them." "Insiders, however, get lots of access and a chance to push their ideas." "People, powerful people, listen to what they have to say." "But insiders also understand one unbreakable rule." "They don't criticize other insiders." "That is the insider's game." "It's a protection racket." "Where these powerful insiders, these powerful elites of Wall Street, "of big business, big media and politics, they get together "and they protect each other no matter how incompetent they are, how corrupt they are." Silicon Valley.

• 28:06David Sacks?

  Silicon Valley, they're involved in this too, but big tech. "And this is the revolution I think that's gonna happen." "I think Trump was kind of a forerunner of that." "Is that we are gonna see a movement "of people across this country who are sick and tired "of the insider's game and they're gonna rise up and vote these insiders "out of office and put in some new people who aren't beholden "to these powerful special interests."

• 28:31David Friedberg?

  What you're speaking to is populism, right Sax?

• 28:34David Sacks?

  You can call it populism, I call it insiders versus outsiders.

• 28:38Chamath Palihapitiya?

  I think it's going to be very important "for folks to not be a career anything." "Meaning, career executive, career politician, "career regulator, career..." "If ever you're in sort of like, "if you can put that word in front of your sort of existence, "I think what people will see is someone who, as you said, thrives on being an insider." "And I think that there's just gonna be a ton of distrust." "Career school administration official, you know, career admissions person." "Career anything now is not what you want to be." "You want to be sort of a little bit more dynamic "because you can have multiple arcs to your life and you're not beholden to anybody."

• 29:18David Friedberg?

  I mean, I think it's a, it's not as black and white as institutions are bad or institutions are good. There are, there are many examples where the institutional framework allows for continuity and performance over time. You know, a lot of Trump's rhetoric, and I, you know, I know that we're, we're past the Trump era at this point, but there was a lot of conversation about this notion of a deep state because there was frustration with how some or many of these institutions, government institutions, were operating. But if not for that deep state, we may have found ourselves in a lot of very ugly situations over the last four years, that there really were layers and layers of career public servants

• 30:00David Friedberg?

  that did incredible and incredibly heroic things to preserve democracy, to preserve the rights that we all hold dear in the Constitution. And those were, you know, really important roles, and the institution played a really important role in, in providing continuity and providing trust and, and security. And so I, I think it's easy to bash institutions when things aren't working perfectly, but we also have to keep in mind that it's not that all institutions are always bad. It is absolutely true that there is corruption, but there is certainly benefits that we have to kind of not, not allow populism to become a runaway framework for how we deal with everything we're frustrated with.

• 30:37Chamath Palihapitiya?

  I'm not saying that. I think, I think what I'm saying is institutions are critically important, but now I think we have to change the rules for how you can be a part of them and then how long you can stay. So for example, like if the rule was, you know, you can only be a two-term politician, wow, that would be, what a cleansing effect that would have on anybody that chose to serve in politics, up and down the board, you know, at the federal level, at the state level, two terms, in and out.

• 31:03David Friedberg?

  California, California has that. You know, we have a 12-year limit, right? In the, the state Assembly and Senate. And so, you know, I think we're seeing that happen in progressive places like California. You know, obviously a good segue, but very, I think very much agree that the notion that there needs to be, you know, we talked about this last time, we need to ensure that the institutions don't become beholden to special interests and that there isn't accountability. Because the failure, the lack of accountability is really where things bloat over time because you just add stuff on, you don't ever take stuff apart and ultimately you have kind of an inept, non-functioning institution.

• 31:45Chamath Palihapitiya?

  So let me give you the report card on California and then we can figure out if term limits can't fix it, what can fix it. So here's just some data points. First, I'll do one section, first section number one, economy and jobs. Nearly the highest unemployment rate in the US at 8% plus, highest poverty rate in the US, 18.5% of all Californians, highest income taxes in the US, 13.3%, $30 billion of potential fraudulent unemployment benefits from 2020, 11 billion already determined fraudulent, doubled the oil and gas drilling permits instead of incentivizing, you know, maybe climate or biotech or tech jobs, a

• 32:23Chamath Palihapitiya?

  $227 billion spending plan for 2021. In terms of quality of life, highest homelessness in the country, worst graduation rate in the country, around 17% of students in California don't graduate, the worst slash highest cost of living in the country, and the worst wildfires in the country, 1.8 million plus acres burned. On COVID-19, third highest rate of COVID-19 infections in the world, 658 cases per 100,000 people, and then the worst vaccination deployment in the US around 50%. And then culturally, I didn't know this, I don't know if you guys know this, but here are the number of companies, this is just a subset, that have left California. Toyota, Charles Schwab, Tesla, and Oracle, in some way, shape, or form, which is estimated

• 33:07Chamath Palihapitiya?

  now to have cost California $77 billion of future revenues and 300,000 jobs. Over the past few years, nearly 3 million people have left the state, 53% of Californians want to leave the state, and 63% of Californians believe the American dream is dead. Okay, so if, let's go and figure out, okay, so if term limits at 12 years don't work, what do we do?

• 33:33David Sacks?

  Well, I think I think we have to have politicians who stand up to special interests and aren't in the pocket of special interests. I mean, the problem we have in California, the biggest problem, the reason why California is such a mess, is that we have government of the special interests, by the special interests, for the special interests. I mean, the politicians in Sacramento, that we have a one-party state effectively, and they are beholden completely to these special interests. Look at the deals they make. I mean, so example, in California, we have over 340,000 public employees who make over $100,000 a year. It costs taxpayers over $45 billion, okay? And, you know, we have lifeguards making

• 34:16David Sacks?

  a quarter million dollars a year. It's crazy, right? I mean, because the people making these deals are are in the pocket of these of these government unions. They're the biggest contributors to California politicians. And, you know, this is my fundamental, I guess, concern or beef with with Gavin Newsom, is that, you know, fundamentally, you know, he's worked his way up the the ladder of California politics by, you know, by basically benefiting from these special interests. Throughout his rise, you know, step by step, he's never challenged the insiders or any special interests. He just kind of caters to this political

• 34:57David Sacks?

  class. And so that's why I think fundamentally, he's not going to be part of the solution. It just feels like every job he's had in politics is just a stepping stone to get to the next step. And even the governorship now is just a stepping stone to get to whatever's next. And I think, you know, Californians are tired of being stepped on in this way.

• 35:18David Friedberg?

  There's, I mean, there are some structural challenges in the state, right, guys? I mean, like, we should not for forget the fact

• 35:27David Friedberg?

  That there are some voter mandated, supported propositions that have passed over the last couple of decades that really create a structural challenge in terms of how do you allocate resources and capital and how can you effectively govern in this state? You know, the three that are often highlighted is Prop 13, which passed in 1978, which is the state property tax limits. We've talked about that one, I believe, in the past. There was a Proposition 4 in 1979 that limits the amount of money that states can appropriate, that the state can appropriate. And then Prop 98, which passed in 1988, and this is the big one. Prop 98 has been challenged in courts and there have been, you know, many, many

• 36:12David Friedberg?

  kind of efforts at finding loopholes and getting around it and litigating it. But it mandates funding levels in the state from pre-K through community colleges. And it creates a structure that is really difficult to navigate around and really difficult to operate or manage. It's almost as if you guys were running a private company and your board said, here's how much you as the CEO have to spend this year and here's how you have to spend it. It is such a difficult decision, you know, for the governor to have to kind of say, well, you know, I'm going to make some changes to that because he'll end up in court. And so, you know, I want to just kind of highlight that there are structural challenges to the way the state operates. And obviously, to get a lot of

• 36:56David Friedberg?

  things done, you still have to pass through the state assembly and the state senate. And it's not as simple as making, you know, better decisions in the governor's mansion. I think there's a lot that we have to kind of resolve structurally in the state. It's going to take a long friggin' time and a lot of cooperating parties to get there. And so, you know, I know for those of us who are very much about making fast, quick, and accurate decisions, you know, good decisions, this is a really difficult place to do that, this state, the way the laws have been set up and the way that the legislature has oversight.

• 37:28David Sacks?

  Well, I mean, look, you're right, but this is why we need real leadership. We need somebody who's going to come forward and say, listen, we need to change this proposition. Another one we need to change is Prop 47, that decriminalized a whole bunch of behavior. I mean, crime is exploding in the state. That proposition needs to be looked at as well.

• 37:44David Friedberg?

  Right.

• 37:44David Sacks?

  I mean, we need somebody who's gonna... Come at government from a completely different perspective, which is to think about the citizens of California, first of all, to pay attention to the middle class of California, and to think about us as consumers of government services who need to be satisfied. And right now, we have, if you were to think about the services government's providing, people are churning off of it. We had net immigration of 135,000 people net left the state, right? You know, 40,000 families in California pay about half the taxes. If, say, 10,000 of them leave, we've got a giant hole in the budget that no one knows how to replace, and we have no idea how many people have even left, how many families have left the state.

• 38:29David Sacks?

  So we really need leadership here to not just go along with the special interests who are in power and who are willing to stand up and push for some of these reforms.

• 38:40David Friedberg?

  By the way, I think it's worth just highlighting some of these numbers because they also speak to the structural challenge in the state. The state of California generates about $140 billion in revenue. 70% of that comes from personal income tax, and as Sacks pointed out, half of that comes from the top 1% or 40,000 households. It is a, you know, a heavy weighting. And by the way, that top tax rate of 13.3% applies to households over $1 million of income. And for those that don't know, you know, there's income strata that are defined by the state, and depending on what strata you end, you pay a different tax rate. The highest strata is making over $1 million a year where you pay 13.3%.

• 39:22David Friedberg?

  And that's where these 40,000 households cover most of that budget. And 20% is sales and use tax, and 10% is corporate tax. To speak to the corporate tax rate for a second, you know, that's 10% of our revenue as a state. We charge a 9% average corporate tax rate in the state to operate. That's incredibly high, and it's one of the reasons, besides kind of the challenge that Elon and others kind of made very public here over the past year. But that corporate tax rate... Makes it very difficult to operate in the state relative to other states that are offering no tax rate, lower cost of labor, and less of a regulatory burden to operate. And it's why we're seeing an exodus, not just of people from the state, because the

• 40:03David Friedberg?

  services are obviously not being well managed, but also of businesses finding a better place to operate.

• 40:10Chamath Palihapitiya?

  In Canada, there is an approach that I think is really useful here, which is that, you know, the Canadian government offers credits called shred credits. I can't remember if it's at the federal level, but it's definitely in the state of Ontario, because I've used this for some of our companies. You hire engineers, and you can basically capitalize their salary, and you can offset their costs, so that when you're a young company, you're effectively paying zero tax. Or if you're a small company, you effectively pay zero tax. And that seems really right, you know, where you're a small business person, and you're holding, you know, five, 10 employees, and you're making, you know, a million bucks a year in revenue, whether you're a restaurant or a software company, you basically pay nothing.

• 40:54Chamath Palihapitiya?

  But then at the other end of the spectrum, you know, when those credits burn off, theoretically, if you're a Facebook, or a Google, or an Amazon, now all of a sudden, you know, you can pay a much larger percentage of what to do. And I think that there's all kinds of progressive tax schemes that work on the corporate side. There's a bunch of tax credits that you can use to sort of incentivize certain kinds of jobs. And I think you're just much better off, because then, you know, these companies can't leave if all the people want to stay in one place.

• 41:24David Friedberg?

  I want to highlight one more structural problem. So even if you do resolve that, even if you do resolve these propositions that have passed in the past, and are causing us problems in terms of budgeting and ability to budget adequately going forward, one of the other challenges, and even if you do resolve the tax structure to generate a more balanced revenue model that allows for innovation, and allows for employment, allows for opportunity, we have a, this is an interesting stat I found this week. What? What?

• 41:53David Friedberg?

  How many Americans, I'll just say the number, one out of nine Californians are a member of a public pension fund in the state of California, one out of nine. And the public pension funds in California, as of the last reporting, are roughly $250 billion underfunded relative to the payment obligations they have to their members. Think about that for a second. So not only does the state have a lot of debt, we've got a $250 billion hole for paying people money that they believe they're owed in the future. And that is creating a massive problem where the state needs to figure out, how do we fill that hole? How do we meet these obligations to our citizens who worked, who earned what they believe to be a fair income stream for the rest of their lives that they may not ever get?

• 42:35David Friedberg?

  You know, and so, so we've got both the legislative problem in terms of how the state is structured. We've got these propositions that have passed that kind of, you know, buckle down the governor and buckle down the decision makers in terms of what they can and can't do legally. We've got an income generation problem with respect to concentration. And we've got some of these, you know, heavy burdens on us like health services, but also this underfunded pension liability that is almost like such a priority and no one's really paying attention to it because the sirens are going off. And meanwhile, the service providers in the state are completely effing up the service that they're supposed to be providing. You know, Chamath highlighted a bunch of great ones in terms of fire response and whatnot at the beginning, and obviously the vaccine rollout, we know is just completely flawed.

• 43:19David Friedberg?

  But, you know, here's another interesting stat, the California EDD, this is the link I just sent out, by the way, on our Zoom chat, but there's $114 billion in unemployment claims paid since COVID. This is an insane statistic, but it looks like roughly 27% or $30 billion of fraudulent claims were paid by the EDD on those unemployment claims. So the folks that are actually running these institutions themselves aren't even operating well, you know, not to mention the actual huge liabilities the state has accrued over the years and the structural deficiencies. So as much as I would love to, you know, kind of propose that we could all come up with a simple solution, this is a complex friggin' set of problems that probably require several books to resolve.

• 44:02David Friedberg?

  And I just want us to be honest and real about that, that this is, you know, this is going to be a challenging issue, probably for decades to come, for this state to get itself out of the holes it's dug itself into.

• 44:12Chamath Palihapitiya?

  You know, one thing I'll say is as goes California, so goes every other state and so goes America. Because if there is one state that theoretically you think would have been positioned from a human capital perspective to figure these out and political will, it's this state. And if this state can't figure it out, we're in a whole fucked up trouble.

• 44:29David Sacks?

  Well, we're not doing a very good job figuring it out right now. That's why we need to make a change. I mean, David, you're right about the magnitude of the problems, the challenges, but it all starts with some sort of, you know, outsider rebellion. And that's what's going on with this recall. That's why we have to support it. It's why I support it. It's not going to be the end of the, it's not the, it's the beginning of the solution, not the end of the solution.

• 44:50Chamath Palihapitiya?

  Beginning of the beginning.

• 44:51David Sacks?

  The beginning, it's the beginning of the beginning.

• 44:52David Friedberg?

  But we need to create an institution to solve the problems over time, right? It's, it's going to be, it's going to be the coalescence of what you're pointing out, Zach, which is the, you know, the, the, the will of the strong, the will of the rebellion to figure this out and resolve it over time.

• 45:06David Sacks?

  The, the institution may be the all in pod, but, but, but let me, let me build on. Yeah, I would, actually, Jake, how you posted a tweet saying, what should we call our party? And anyway, my suggestion was the outsiders.

• 45:21Chamath Palihapitiya?

  Surprise, party?

• 45:22David Sacks?

  Yeah, surprise party. But let me, let me build, let me build on, on Friedberg's point about the pensions, okay? Where did these giant, underfunded pension obligations come from? Because I think this is a really important point to explain. So here's what, what basically happens. If you're a government worker in California, you could typically retire after 20 years with all of your benefits and, and not just 100% of your salary, but the, the salary you made in your last year. And so what happens is when people get to that 20 year mark, they get a lot of overtime. And so that's why we've seen articles about people retiring, you know, after, you know, if you're retiring after 20 years, you could be in your 40s, okay?

• 46:04Chamath Palihapitiya?

  Well, wait, don't you get half pay for your pension? So they double up their overtime, they get to 250K, then they get a pension of 125. You don't get your full salary.

• 46:12David Sacks?

  There's a complicated formula, but the point is you can stuff it with overtime and it's very generous. And then they can go, because they're still in their 40s, they can go get another government job somewhere else. And then stack that pension on top. And then, by the way, it doesn't just last until they die, but it lasts until their spouse dies. So now, there was a proposal years ago to move this whole system to like a 401k type of system. And it was squashed by who? The unions. And Newsom opposed it. Because, you know, he doesn't do anything that the unions don't want. And so we have these completely unsustainable pension liabilities. Everybody can see this train wreck coming. But nobody has the guts to stand up to the unions and do something.

• 46:55Jason Calacanis?

  Yeah, I mean, there's very few careers that still offer pensions. Even the New York Times, you know, over a decade ago, got rid of their pension because people live too long. They retire too early. And then the cost of healthcare is just so ginormous here. That it's going to crush any pension fund. So you have to move to a 401k and we're, we're. It's kind of hard to say to a cop or a firefighter who's running into a burning building or putting themselves in harm's way that they don't get one. Because it's such a high risk job, but we really do need to think of something more reasonable like a 401k. And that's coming from my entire family is, you know, cops and firefighters and of service in New York City.

• 47:35Jason Calacanis?

  And they all have pensions. And you are right, David. There is a tradition of trying to get a little extra overtime. Because they average out usually your last three or four years to give your average salary to base your pension off of. And then, of course, you can do another job or go work, go from a firefighter to a cop, vice versa, garbage sanitation worker to get those things. We didn't talk about the NIMBYism and how extraordinarily hard it is to build homes here and how extremely expensive it is. A lot of the young people who are thinking of coming to California are looking at the housing prices. They want to come here to start companies. They love the California vibe, but the housing is a nonstarter.

• 48:13Jason Calacanis?

  You can't live in the peninsula or anywhere in the wider Bay area unless you are, you know, a dual household income with what? Five hundred, six hundred thousand dollars in Minimum, minimum. Minimum. Minimum. And that's not even counting private school, but you're talking about where are there sub one million dollar homes within the proximity of the Bay Area? They don't exist. You go to Austin, and I've been looking at Austin real estate, just coincidentally, and there are many homes that are three hundred thousand dollars, that are four hundred dollars a square foot, everywhere within thirty, forty minutes of downtown Austin, and that's where young people are going. And then finally, if we look at our, to law and order, David, we are not treating

• 48:56Jason Calacanis?

  fentanyl like the super drug it is. You know, it's one thing to have drug reform and to have prison reform. We know these are important, but you can keep that in your mind, that we want to make a more just legal system while at the same time not allowing people to deal fentanyl. And if you just type into Google, fentanyl versus heroin lethal dose, and click on the image search, you will see two vials, and it's a very famous photo, where there's like, you know, a pinch of, you know, heroin, that's the lethal dose. And then in the other vial, there are like seven grains of fentanyl, and that's the lethal dose.

• 49:35Jason Calacanis?

  And we are conflating a homeless problem with a super drug.

• 49:42David Sacks?

  Yeah, can I, can I, can I add to that?

• 49:44Jason Calacanis?

  Yes, please.

• 49:45David Sacks?

  So, so, you know, I was on the side of decriminalizing cannabis, and I think that there were, and I think that there, we, we overcharged too many people for drug crimes when they were just users and should have been in treatment, and that's why I think there's been a reaction against over incarceration. And I understand that. But I agree with you that fentanyl is a separate category. It is the super drug. And here's the problem, it is so powerful, it is so addictive, it is so destructive. Nobody can hold down a job and get off that drug once they start, once they start taking it. I mean, it's just game over. So they end up living in the streets and turning to crime and petty theft to support their habit.

• 50:25David Sacks?

  And that's the situation we're in today. And we have this growing mass, this massive numbers of people living in the streets. It's addicted to this super drug and we gotta stop it. We gotta get tough on this. Um, cause it's just, you know, right now the, the, the, the solution that our, our DA seems to be pushing, whether it's Gascoigne in LA or Chase and Booting in San Francisco, is they're just not prosecuting anything. You know, we had Prop 47 downgrade a whole bunch of property felonies to misdemeanors. And now the DA's aren't prosecuting the misdemeanors. So they basically just decriminalize burglary. And so you've got all these, you know, uh, drug addicts, um, living on the streets, committing these crimes and they need to be in treatment. So I think part of what we need to do here, I actually think this is a big investment Californians to make.

• 51:10David Sacks?

  We need giant treatment centers to address this problem. And if somebody gets caught committing a crime and they're, they're addicted to drugs, I, I don't want to send them to jail, but I would make them go to treatment.

• 51:23Jason Calacanis?

  We have to think about true compassion. True compassion for somebody who is addicted to fentanyl is getting them off the street and getting them into a rehab program or giving them the choice of going to jail for the crimes they may have committed so that there is this pressure to go into treatment. Just to give you a stat, in 1999, we had like 18,000 overdoses. We're now over 70,000. Um, and if you look just in San Francisco, we're talking four or five times the number of overdose, overdose deaths to COVID deaths. This is a level of human suffering that just makes no sense. And it's such a nuanced discussion, right? You can't, you can, you have to be able to hold into your brain that cannabis, you know, psychedelics, MDMA, psilocybin, all one class of drugs.

• 52:06Chamath Palihapitiya?

  You have a long list, Jason.

• 52:08Jason Calacanis?

  I have a long list here of the drugs.

• 52:09Chamath Palihapitiya?

  Of your own drugs that you want to be recreational.

• 52:12Jason Calacanis?

  Here are the drugs I'm a fan of. Good. Here are the drugs that I don't take bad. No, fentanyl, I, I think you just have to look at the, the chance of recovery and the chance of addiction. And fentanyl and heroin are just tragedies. Tragedy.

• 52:26Chamath Palihapitiya?

  Well, you have to, you, we also have to like have the courage to actually not look at just the symptom. Like, I think. Treatment centers are a great idea. I think not sending people to jail is like an obvious idea. I also think if you take two or three steps back and you think about what are the two things that send people off the rails? Number one, I think, is lack of a job. And then number two is a lack of mental health resources. You put those two things together, you're done. It's like kindling and it's like kerosene and a match all in one and boom, it goes. And, you know, we didn't need to know that answer because you saw that over the last decade building up in the Rust Belt. So we knew that that was the, those are the boundary conditions for this. So how do you get people back to work?

• 53:08Chamath Palihapitiya?

  How do you actually give some, you know, the crazy thing about Reagan, I mean, we all forget, but Reagan was the one that defunded all of the mental health institutions, you know, when he was governor of California and sent all these folks spilling into the streets.

• 53:20Jason Calacanis?

  Well, think about how many jobs that would create if we brought back, you know, psychiatric facilities and made them free. This is where, if we look at healthcare, not having a national healthcare program, especially for mental health, is costing us more on the other side when it comes to suicide, fentanyl abuse, etc.

• 53:37Chamath Palihapitiya?

  If we're going to spend money and if we're going to be in debt, be in debt for the right reasons. Like, find a way to be accountable and transparently spend money. That's fine. Spending money is fine. Government should not be for profit. You know, government should, I don't even think government should be breaking even. I think that government should be generally running at a loss. And then the net GDP, as long as that's positive and accretive, we're doing right as a society. Right? So government should be doing the things that they need to do for people to have an even starting line.

• 54:06David Friedberg?

  But I just want to, yeah, go ahead. Sorry, Jamal.

• 54:07Chamath Palihapitiya?

  No, I was just going to say that that's where we get it wrong because like we, you know, we like pat ourselves on the back when a government turns a surplus. And then, you know, we like explode when a government runs a deficit. Instead, they're managing to the political theater of a number instead of really understand how to run a business.

• 54:24David Friedberg?

  But I just want to be clear, like, The entire premise of how that is run and how we think about this from an economic point of view is that we have to have GDP growth. And if you don't have GDP growth, the whole formula fails. So let's just break this down in a simple way. If I'm working and I'm making 60 grand a year, I can take out some credit card debt, knowing that I'm going to make an extra 10% next year and an extra 10% the year after. If I know my income's going to climb, I can afford to take on some debt, which means spending more than I'm making right now, because I know that in the future I'll be making more than I am today and I'll be able to pay down that debt. And so the whole premise of how we run government is we should run at a deficit, we should

• 55:08David Friedberg?

  accrue debt, we should build infrastructure, but in order for that to work, I have to increase my tax revenue in the future. And there's two ways to do that: raise taxes or see significant GDP growth. And if you raise taxes, you suffer the problem that California may be suffering now, which is very high net worth people leaving the state, which is going to cause a collapse in the revenue stream and the whole system fails. If you want GDP growth, well, you have to kind of enable the system to allow for GDP growth, which means reducing taxes and growing housing. But the problem is the life that people want to live doesn't necessarily mean that we need to have, and so this goes back to the housing question. Do we need to have more business growth in the state?

• 55:52David Friedberg?

  Therefore, do we need to reduce tax rates to encourage business growth? And by doing so, we have to also build more housing. And the reason people want to build more housing is because they want to see more business here. And the whole premise is kind of flawed if at the end of the day, getting more business here means you also have to lower tax rates and cause all those problems.

• 56:11Chamath Palihapitiya?

  It's also how you have community and it's also how you have diversity. Like, nobody wants to live in a monoculture where everybody's really, really poor or everybody's really, really rich. I grew up, it's so sickening, I grew up in a place where everybody was really, really poor. I now live in a place where everybody is really, really rich. And the monoculture sucks. And instead, what you want is you want transitions, you want people moving up, you want people moving down, you want the hard luck story, you want the got lucky story, you want it all. And this is where we've lost it. I'm going to ask you a question, Freebird. Are you saying that if 40,000 people left California...

• 56:48Chamath Palihapitiya?

  We would blow a seventy billion dollar hole in the budget.

• 56:52David Friedberg?

  No, we would, we would blow a, um, yeah, about forty thousand count for half the income tax. So it's about thirty five percent of one forty. Yeah. So we would, we would blow fifty, sixty billion dollar hole in the budget.

• 57:06Chamath Palihapitiya?

  Forty thousand people.

• 57:07David Friedberg?

  Forty thousand, yeah.

• 57:08Chamath Palihapitiya?

  Out of sixty million.

• 57:09David Friedberg?

  Forty thousand homes.

• 57:10Chamath Palihapitiya?

  Forty thousand homes out of sixty million.

• 57:12David Friedberg?

  Forty million.

• 57:13Chamath Palihapitiya?

  Out of forty million.

• 57:14David Friedberg?

  Yeah. Yeah. Forty thousand.

• 57:15Jason Calacanis?

  A similar thing happened to New Jersey and Connecticut when they had everybody moving down to Florida. And so this is not unprecedented, um, especially with hedge funds and really high taxpayers, you know.

• 57:26David Friedberg?

  But what I'm, yeah, what I'm asking is, is there a better way where you don't have to depend on GDP growth to balance your budget and to provide the social services you want to provide to the state?

• 57:35David Sacks?

  No, of course, of course not. It all, it all starts with having a healthy economy. I mean, always, right? Because that, that's what generates the, um, the prosperity to pay for all the social programs.

• 57:46David Friedberg?

  And it's to pay ahead of the curve, right? That's my point. It's like, we're always paying ahead of the curve, which forces us to find GDP growth, which is how we get stuck in these cycles and these problems. And this is true, not just of the state, but of nations as well. The US faces this and, and others. But by, by spending ahead of the curve, by creating infrastructure, by creating social services, by setting up these pension obligations, the only way to get out of the debt you've just taken on is to grow. And that creates all of the systemic problems and ultimately lead to populism and all of these kind of frameworks for failure that are going to ultimately end.

• 58:18David Sacks?

  Here's a, here's an idea. No, no, no, no, no. Hold on. I disagree with that. Look.

• 58:21David Friedberg?

  Yeah.

• 58:22David Sacks?

  Growth, growth is a precondition for everything else that's good. Okay? Growth, growth needs to be managed. Okay? But it doesn't, growth is not the problem here. The problem is a set of policies that are actually killing growth and driving entrepreneurs and innovators out of the state. We saw Elon Musk leave the state. Why? He said that California was starting to take its success for granted and had been winning too long. Okay? California needs to realize it's in a highly competitive situation now. And because of COVID, you can work from anywhere. And Austin has become a tech hub and Miami's become a tech hub. And those states have no income tax and we have politicians in California just keep raising taxes as if we're not competing against these other states. Well, we are and people are leaving.

• 59:05David Sacks?

  We're seeing a mass exodus here. We've got to realize that we can't raise tax rates beyond the point where people are willing to bear them.

• 59:12Jason Calacanis?

  This is the, this is your, I think your best point, David, is that what the great pause did was it let people reassess their lives. How many people do we know who either left the state, changed job, you know, broke up with a spouse, whatever it is, people reassessed everything in their life. And what people uniformly came to was, why am I paying this much and getting this little in the Bay Area, in California, when I could get twice as much, three, basically three times as much in Austin or Miami, and not pay this amount of taxes and be happier? And that is an existential problem for the Bay Area. If, you know, this

• 59:53Jason Calacanis?

  is not just Elon Musk, or Larry Ellison, Oracle, it's also rank and file developers. And the developers don't need to be in the office. So you could have this massive middle leave too, that nobody anticipates. And if all the developers said, you know what? I want to be on the Reno side of Lake Tahoe. You know, I want to be in Austin, or wherever, I'm paying less taxes, and I'm making the same money, and I got a better quality of life.

• 1:00:16Chamath Palihapitiya?

  What do you guys think happens though, J Cal? What happens to California, or Connecticut, or New Jersey, and what happens to Florida? Just tell me what happens.

• 1:00:26Jason Calacanis?

  I think it's a debt spiral for New York and for California, where unless the representatives in government start to represent the people who are voting and living there, and voting their interests as opposed to the special interests. To David's point about the insiders, we have disconnected what the citizens of California want, from what the government officials are providing. They're just not in sync. They're basically kowtowing to teachers' unions, or special interests, and not the people who are building companies, or just people who are living here. People want to build housing, and they won't let them. You can't build apartments in Palo Alto, or, you know, anywhere in the city. I mean, this is crazy.

• 1:01:08David Sacks?

  You're right. The only middle class that's going to be left in California pretty soon are government workers. I mean, that's it. That's, the only people that are going to be making over a hundred thousand dollars a year in California are the government workers. Because everyone who's middle class, who's running a business, is just, is finding it too difficult. And too difficult to earn with the level of taxation, and to run their business. And they're leaving.

• 1:01:30Jason Calacanis?

  Regulation.

• 1:01:31David Sacks?

  Regulation, and they're leaving.

• 1:01:33Jason Calacanis?

  I mean, just think about the regulation issues of doing any real world. I mean, you've done construction in San Francisco. We've had businesses that are real world businesses with storefronts. It's it's jumping over hurdle after hurdle after hurdle.

• 1:01:45Chamath Palihapitiya?

  I have an idea.

• 1:01:46Jason Calacanis?

  Shut down. It's brutal.

• 1:01:48Chamath Palihapitiya?

  What if whenever you started a company in California, you got, you know, three or four years worth of tax credits for engineers in return for 1% of the equity that California was not allowed to sell?

• 1:02:00Jason Calacanis?

  Sure. I mean, some equity upside would be great.

• 1:02:04David Sacks?

  I have an idea. Chamath, how about you run for governor?

• 1:02:07Jason Calacanis?

  Yeah, Chamath, here's an idea. Why don't you?

• 1:02:10David Friedberg?

  Isn't that why we're doing the emergency pod?

• 1:02:12Chamath Palihapitiya?

  Sax, Sax, Sax, I think you should run.

• 1:02:14Jason Calacanis?

  We'll be right behind you.

• 1:02:15David Friedberg?

  Have we disparaged you too much or has this been too difficult?

• 1:02:18Chamath Palihapitiya?

  I, uh, let me, let, speaking of politics, though, I do, I do need to tell the story. This is a complete, complete non sequitur. In 2012, 12 or 13, I can't remember which year, Mike Bloomberg invites a bunch of us from technology to, to the White House Correspondents' Dinner. We're like, yes, the White House Correspondents' Dinner.

• 1:02:37David Friedberg?

  Did you go? That's awesome.

• 1:02:39Chamath Palihapitiya?

  Of course, I went once here. So hilarious. You know, myself, Ian Osborne, Hussein Rahman, the founder of Jawbone. And I have two amazing stories about this, my experience at the White House Correspondents' Dinner. Number one, well, three. Number one is like, the dinner itself is kind of like a prom, just because there's just so many people, right? And so, you know, you have to have a rubber chicken dinner because there's like a thousand people in the room. But the second was that Ella McPherson was there, and I've never seen more incredible hair in my life. Just, I have this image of this person's hair, and it was like the thickest, like, it was like curly, but like, it looked so soft. And I was just like, this is the most incredible hair I've ever seen.

• 1:03:21Jason Calacanis?

  I think those are called extensions or a wig, but go ahead.

• 1:03:24Chamath Palihapitiya?

  It didn't look like that. It looked like real hair, but it just, it looked incredible. Uh, like, like a lion, like the mane of a lion. And then the third story is I, we're in a reception. There's an after party at the French ambassador's place. I start talking to this person randomly and there's like all these stars everywhere, but I just start talking to this, to this person. And, you know, she, she, she's very chatty and I'm chatty, chatty, chatty, blah, blah, blah, blah, blah. We're talking, talking, talking. And then at the end of this, like, sort of like five minute conversation, and we had not really introduced each other. She just kind of said, hey, and I said, hi. And so we started talking. And she says to me, um, do you mind if we take a picture? And I'm like, yeah, of course. And I, and I, and I had no idea what was coming. So I was like, so we take a picture.

• 1:04:06Chamath Palihapitiya?

  And she stares at me and she says, you know, I think you're really fantastic in Parks and Recreation.

• 1:04:14Speaker 01

  Oh my lord. And I thought, you thought I was Aziz Ansari? Jesus Christ, how does this happen?

• 1:04:25Jason Calacanis?

  At least she didn't call you Urkel.

• 1:04:27Speaker 01

  Oh my gosh.

• 1:04:28Jason Calacanis?

  That was her second choice.

• 1:04:30Chamath Palihapitiya?

  Oh my gosh. I love you in Parks and Rec. Anyways, that's my, that's my interaction with politics.

• 1:04:35David Friedberg?

  I think you're ready for politics because you just avoided the question.

• 1:04:39Chamath Palihapitiya?

  No, no, no, look, let, let, let's, let's be really honest. Like I, I, I'm not ready to, to do any of that. I, what I need to do is I need to figure out, you know, A, my business and where it's going. And then B, I do think it's worth figuring out what are the conflict of interest laws? And what do you have to do if, if all of this were to come to pass? Because I could not make a credible decision unless I knew that. Uh, cause I, I just have things that I want to do. And that, that to me are the most important things. Like, I'll just be really honest with you. Like I'm working on something in batteries that I think is, it's important for a lot of places, much, you know, more than just California. And so like, if I have to abandon this battery project, uh, I wouldn't do it, you know? Just that simple. So I got to figure that out.

• 1:05:19David Friedberg?

  And you got to write down all the illegal things you've done on a piece of paper and all the illegal things you're doing on a daily basis. And then we got to make sure that you're clear on it.

• 1:05:27Jason Calacanis?

  You have a case of Moleskines? Cause I could start throwing that in.

• 1:05:31David Friedberg?

  They're never going to get uncovered.

• 1:05:33Jason Calacanis?

  Yeah. The oppo research has begun.

• 1:05:35David Friedberg?

  Right, right. That's, that's what the dinner on Thursday should be about. Should start the oppo research program.

• 1:05:41Chamath Palihapitiya?

  Oh my gosh. That's a, that's a, that's a long program.

• 1:05:45David Friedberg?

  But there's certainly, there's certainly a groundswell in interest, right Sax? And there's certainly Oh yeah, it's crazy. I think, I think Chamath has a lot of folks that, that love his passion and the way he speaks to them and that, you know, he has a real sense for what I think people are feeling and can speak to that and obviously has experience in kind of making decisions and allocating resources, right? So, you know, I think there's a lot of interest Chamath and a lot of drive to see you

• 1:06:11Chamath Palihapitiya?

  Here's, here's what I'll say.

• 1:06:12David Friedberg?

  shit or get off the pot.

• 1:06:14Chamath Palihapitiya?

  Here's what I'll say. Here's what I'll say. I've grown up with nothing and getting to the other side, I'm completely convinced that poverty is a disease. That it is, except in this disease, it is systematically reinforced. You know what I mean? So, Jason, stop that, Jason.

• 1:06:42David Friedberg?

  Talking to Chamath is good.

• 1:06:43Jason Calacanis?

  Yeah. And I would like to say, all Americans and the citizens of California.

• 1:06:48David Friedberg?

  I came from nothing.

• 1:06:50Jason Calacanis?

  I came from nothing. I would eat rice three days a week and then I would eat the plate the other four.

• 1:06:56Chamath Palihapitiya?

  By the way, the, the, the, the reality is that if, if I were to do it, if like all the checks came back and it seemed like it was a plausible thing, I would only do it for the 18 months and just kind of, you know, but you'd have to get elected on a mandate where it was so clear that it's like all of California wanted these five or six laws to pass. Like I think it's like, you're not running a candidate, you're running a platform.

• 1:07:15David Friedberg?

  That's right.

• 1:07:15Chamath Palihapitiya?

  So it doesn't matter who it is, you know, whoever goes in, it could, it could be me, but it could be frankly, Kim Kardashian or The Rock or David Sax. I think what's really important is we should get alignment on a handful of laws that change the trajectory of the state. And the reason why that's important is if those laws can pass and the state turns around, then that's the roadmap for the other 49 states.

• 1:07:36David Friedberg?

  That's right.

• 1:07:36Chamath Palihapitiya?

  And I think that's a big deal. That's a really big deal.

• 1:07:38David Friedberg?

  I think it's about getting adoption of a playbook, a playbook, a playbook to fix California. And if that playbook is something that a group of people from different parties and different backgrounds can coalesce around and, you know, publish that playbook in a way that's easily understood and

• 1:07:53Chamath Palihapitiya?

  And you can take it and run it.

• 1:07:54Jason Calacanis?

  Let's, let's each pick what our top item would be. For me, it's the building of multi-family unit housing, I think would be in my top three. What's in your top three Sax?

• 1:08:06David Sacks?

  Well, if I were to write a sort of catchphrase for a campaign, it would not be "Make California Great Again", but it would be something more like "Tough and Tolerant", because that's what I think California wants. So tolerant on LGBTQ rights, tolerant towards people of different nationalities, towards immigration, tolerant on social issues. But I think what California's really want now is tough on crime, tough on hard drugs, negotiate tougher deals with these unions and special interests who are just pillaging the state. And frankly, tougher on the politicians,

• 1:08:50David Sacks?

  because they're making it too tough on the people to live and to run their businesses. And we need to make it easier on the people and tougher on the politicians.

• 1:09:01Jason Calacanis?

  Friedberg, what do you got in your top three items? If we could only put three items on the docket, you know, one, two, and three. I think creating much more affordable housing through multifamily, you know, going up as opposed to building out and just allowing, you know, anybody who wants to add a couple of stories, add a couple of stories. And just more housing would lower the price of housing. And maybe we have to change, you know, the taxation and maybe reevaluate the value of homes. Because right now, you buy a home in 1970 for 50K, you're paying 1% of that for the rest of your life, right? Which then makes it impossible to move. And you've got two people living in a 5,000, five-bedroom-square-foot home because they can't move because their tax basis is so low on it, right?

• 1:09:45Jason Calacanis?

  What do you got, Friedberg?

• 1:09:48David Friedberg?

  I mean, look, the challenge is with any one of these things, you have to balance it. It's like we talked about last time. You know, we talked about adding a transaction tax to trading on markets, but you also have to get rid of the capital gains tax, right? If you're gonna get rid of that proposition that locks in the property tax rate, I think it's Prop 13, right, Sacks? If you're gonna get rid of Prop 13, you've got to phase it out over time. But to create the opportunity on the other side, which means how do you create more affordable housing at the same time that you get rid of Prop 13? You've got to enable, as you pointed out, the ability for more rapid housing to be developed and dropping regulatory constraints and maybe removing some of the union pricing and some of the work that gets done and the supply chain and so on.

• 1:10:34David Friedberg?

  And so, you know, I think it's about the balanced trade-off amongst these things. You know, if we're going to talk about trying to keep the top 40,000 households in California and you're going to drop the tax rate on them to keep them here, which is an extremely controversial anti-populist move and, you know, right now, you'd have to find another way to kind of resolve that gap, or at the same time, kind of reduce the cost of, our top cost is education, so you need education reform, our second top cost is healthcare and other related services, and how do you resolve that? There's a lot of structural things in there, there's probably a checklist of 10 things that you would say, "Let's go negotiate better prescription drug prices, let's make, you know, the services more efficient, meaning how many patients does a doctor get to see

• 1:11:17David Friedberg?

  per hour, per day, per year, per week, whatever?" There's all these things that you kind of go through, and you could make each one of those dollars that are being spent more efficient. So as much as I'd love to kind of rattle it up to three different things, this is a management problem. And, you know, as those of us who have run businesses that are struggling or challenged have experienced, there isn't one thing to do to fix a problem when something is not operating well, but you really, it really does come down to talent. And so, you know, I would think that the people that are sitting in those Assembly and Senate seats need to be the right people, and the person sitting in the governor's mansion needs to be the right person who will surround him or herself with the right people who are operators and managers and leaders who know how to resolve these problems, and go through and do just like that guy did in Dave with the napkin, and, you know,

• 1:12:02David Friedberg?

  write out, "Look, here's the 10 simple things we can do to fix HHS, and here's the 10 simple things we can do to fix higher education, and go in and cut half the expense." And if you cut half the expense, you have a lot of things you can start to do. And so, yeah, I don't have a simple answer for you, J. Cal, but I think it comes down to balance.

• 1:12:19Jason Calacanis?

  Would you say school vouchers, since you brought up education, are the quickest solution there, is to create more competition quickly by giving parents the ability to take their voucher and go to whatever school they want?

• 1:12:28David Friedberg?

  I'll be honest, I haven't read enough on school vouchers to know the ramifications of the programs that have been proposed, so I'm not going to be very thoughtful on that.

• 1:12:37David Sacks?

  Well, I'll speak in favor of the idea of giving parents more choice. I mean, these schools are being, are they being run for the students or for the special interests? Because right now, the parents don't really get any choice. I mean, look, if we can recall the governor, why can't we, why can't the parents of a school recall the headmaster? I mean, why don't we give them the ability to circulate a petition if they're unhappy? I think in the case of the governor recall, if we get 12% of voters to sign the recall petition, then you get a recall election. So what if you had a system where the parents of a school could sign a petition and then they vote? And if the majority of the parents, yeah, the majority of the parents vote to recall a school,

• 1:13:20David Sacks?

  then they can basically replace the headmaster and run it in a different way. Why shouldn't they have that choice? It's crazy to me.

• 1:13:26Jason Calacanis?

  Well, they're paying, that's why.

• 1:13:28David Sacks?

  Yeah, yeah. Yeah, let me give you, let me give you a little math I just did on my, on my calculator here. So the average student in California costs $18,000 a year roughly, okay? And we have a classroom size on average of about 25 students. It's actually higher than the national average. So you multiply 18,000 by 25, that's $450,000 per classroom. Okay, now how much does a teacher cost? I mean, okay.

• 1:13:55Jason Calacanis?

  That's the average in California. For teachers.

• 1:13:58David Sacks?

  It's fine, but let's, let's say, let's say, let's say that we paid teachers extremely well. Let's say we paid the teachers $100,000 a year because we all believe in having great teachers, okay? That would still leave $350,000 left over. And remember, you don't have the real estate cost, right? The state already owns all these schools. So where is the money going?

• 1:14:18Chamath Palihapitiya?

  We systematically entrench poverty. I think that what happened to you, Friedberg, or Sacks, or me, or J Cal, I don't think it's possible anymore. And I think that we are aberrations, and I think that folks that are younger than us would look at us, and they look at us, I think in part because they're like, God, I, I would love to have that shot. And I don't think they know where to start. And I think they also see a system that feels very much rigged against them.

• 1:14:41Jason Calacanis?

  Just buy Bitcoin. I mean, this is why they're attracted to buying Bitcoin, or doing what they did with GameStop, and why Wall Street.

• 1:14:47Chamath Palihapitiya?

  Insiders versus outsiders.

• 1:14:49Jason Calacanis?

  They feel like they have this opportunity to show the man, and they don't, that's why they don't want to take on school debt. I mean, I, I don't blame millennials for being disgruntled. If they got 100 or 200K in debt. And they were told this degree would get them, you know, uh, this would be their ticket. And it's totally been disconnected. It's a lie.

• 1:15:07Chamath Palihapitiya?

  It's a great lie. It's a great lie. And so, you know, that's, that's one of the big lies. And, and I think we're sacrificing it now because like, you know, we're, we're, we're, we're making this great sacrifice because we're exposing these lies to be exactly as they are. So, I mean, if you, if I had to pick a couple of things, J. Kyle, I would say the most important thing for me is school vouchers tied to, like, I would increase public school salaries. You pick your number. I don't really care what it is. A hundred grand, a hundred and twenty-five grand. But you need to tie it to school vouchers so that any parent can put their kid into the best school that is for them.

• 1:15:43Jason Calacanis?

  Or start their own school. Like, there needs to be competition. If five parents get together and they each get an eighteen, eighteen K voucher, they can spend a hundred thousand on a teacher to teach five students. And if they hit their goals, like, they're gonna do better. What, what five parents, even the, you know, the most disadvantaged parents would take advantage of this.

• 1:16:04Chamath Palihapitiya?

  To me, that would be the, that's like the first above all else, because I think it creates accountability. And it, it allows our kids to have a decent shot. The second thing I would probably do is I would actually just cut all taxes to zero on the personal side, but I would introduce a progressive taxation system for corporations. And I would try some of these novel things, like getting equity in turn for, in turn for credits and allowing folks to capitalize certain expenses. I mean, these are like, I, I know people think that's also stupid, but like, you know, if all we did was just own one percent of Apple, Google, Facebook, you'd have three trillion dollars, four trillion dollars, trillion with a T. You know what I mean? Well, not, not, you, you, that's four trillion a market cap, but you know, you know what I'm trying to say? Like, if you control one percent of that, it goes a long way. Um, so there's that. And then

• 1:16:48Chamath Palihapitiya?

  ah, I do think that there's something that we need to do for people to be able to live. I, I remember interviewing somebody and, you know, he's, what he said to me just made me so sad. He's like, I, you know, he drives an hour and a half into work every day and then drives an hour and a half home. And I was like, how, how, how is this possible? And, and I just thought to myself, like, what does that do to you and your family? He goes, I don't see my family. And I'm like, well, can't we just increase your salary? And you know, that's not possible because of the job that he had. And then he couldn't afford to live. And so all these things just build up in the system. So those would be my three things.

• 1:17:24David Sacks?

  It sounds like we have a bestie platform. We, we, we need to figure out who the bestie candidate is going to be. Hopefully we can convince Jamar to do it. But the next thing, but the first thing we gotta do is we gotta make sure this recall happens. There's another five weeks or so to gather signatures. So everybody should check out the website. It's rescuecalifornia.org. It's rescuecalifornia.org. If you have the means to donate, please do. I donated $50,000 to it. They are taking donations. And even if you're out of state, but believe in this cause, like Jamar said, what happens in California or as California goes, so goes the nation. You know, it would be a really good thing to send a message, even if you're out of state,

• 1:18:08David Sacks?

  to these special interests who are ruining the state, that this isn't going to be tolerated because every politician in the country is going to hear that. And they're going to start realizing, oh, I can't just pay attention to the insiders. I need to start paying attention to the outsiders, to the majority of citizens who've never been organized before, but now they are getting organized. And so we need to send this message. That is the first step. We're not going to get any positive change in this state until the politicians are held accountable. And this recall is the starting point for that.

• 1:18:39Jason Calacanis?

  And if you take a picture with the form and CC your besties, we'll follow you back or retweet you or like you, some combination of that. I saw a couple of people did it after the last pod. So print out the form and go ahead and take pictures.

• 1:18:53Chamath Palihapitiya?

  The next, the next, the next podcast, just for everybody to know, episode 21, we are going to start by reading mean tweets. There have been some, there have been some unbelievably vicious tweets targeted typically at Jason and then, and then at me, a little bit at David Sacks, but finally.

• 1:19:16Jason Calacanis?

  Oh, really? They went after the queen?

• 1:19:17Chamath Palihapitiya?

  We have broken the seal and the queen has been targeted.

• 1:19:20Jason Calacanis?

  Really?

• 1:19:21Chamath Palihapitiya?

  He was called, he was called sanctimonious. He was called sanctimonious on Twitter. We are going to make him read his mean tweet to kick off episode 21.

• 1:19:30Jason Calacanis?

  And we will see you all next time on the All In Podcast.

• 1:19:33Chamath Palihapitiya?

  Love you guys.

• 1:19:42Speaker 01

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

• 1:19:55Speaker 01

  Besties are gone.

• 1:19:58Speaker 01

  That's my dog taking a licking at your driveway sex.

• 1:20:06Chamath Palihapitiya?

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

• 1:20:14Speaker 01

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