E89: GDP growth negative in Q2, $SHOP layoffs, Alzheimer's fraud, Ginkgo acquires Zymergen & more

0:00 Bestie intros! 2:19 GDP growth is negative for a second consecutive quarter, but is the US actually in a recession? How has the White House controlled the narrative? 22:45 Looking at COVID trends with a post-COVID view: e-commerce, remote work, and how they correlate 36:33 "Inflation Reduction Act", how government subsidies can stifle innovation 59:50 Alzheimer's fraud, Ginkgo acquires Zymergen for $300M 1:17:36 Democrats backing MAGA candidates in primaries vs. more moderate republicans: savvy and cynical or too risky? Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.bea.gov/news/2022/gross-domestic-product-second-quarter-2022-advance-estimate#:~:text=Real%20gross%20domestic%20product%20 https://news.shopify.com/changes-to-shopifys-team https://www.google.com/finance/quote/TDOC:NYSE https://www.wsj.com/articles/whats-in-joe-manchin-and-chuck-schumers-reconciliation-deal-on-climate-health-and-tax-policy-11658973323 https://twitter.com/jamiedupree/status/1552406981637545993 https://www.nytimes.com/2022/07/24/world/africa/congo-oil-gas-auction.html https://www.science.org/content/article/potential-fabrication-research-images-threatens-key-theory-alzheimers-disease https://www.nature.com/articles/s41380-022-01661-0 https://www.pharmaceutical-technology.com/news/ginkgo-acquire-zymergen/ https://www.nytimes.com/2022/07/26/us/politics/democrats-john-gibbs-peter-meijer.html https://twitter.com/ConanOBrien/status/1552358211986006019 https://twitter.com/maga_cy/status/1552360064693915648

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

• 0:00Jason Calacanis?

  All right, his monthly burn rate would make even Bezos wince. He's living the life of a Sri Lankan prince. He drinks nothing but the absolute highest top shelf. He's lifting Italy's GDP by himself. The dictator's back, Tomoth Poliopetia. I'm back to the program.

• 0:16Chamath Palihapitiya?

  Thank you, Jake.

• 0:17David Sacks?

  When you mentioned that burn rate, I thought you could be talking about me.

• 0:19Jason Calacanis?

  I thought you were talking about him.

• 0:21David Sacks?

  Sometimes these intros, you're not sure which, which way they're gonna go.

• 0:24Jason Calacanis?

  It's a misdirect. It's a misdirect. Comedy, a misdirect.

• 0:26Chamath Palihapitiya?

  It is inconceivable that my burn is higher than David Sacks. I have, I own one house. How is it possible?

• 0:34David Friedberg?

  Hmm, and maybe one or two next, but.

• 0:38Chamath Palihapitiya?

  You're such a ass.

• 0:39Jason Calacanis?

  He's analyzing macroeconomic charts and grids while at the same time ignoring his kids. He's the Sultan of Sass. It's no surprise. The only thing heavier than his pockets? The bags under his eyes, the Rain Man of Pac, David Sacks.

• 0:53David Sacks?

  It's not bad.

• 0:54Chamath Palihapitiya?

  Oh, here we go. Here we go.

• 0:58Jason Calacanis?

  The Admiral of Anxiety, he's rife with strife. He plays a [BLEEP] on his PS5, and he also plays one in real life. Meow. The Commander of the Cat Boys, David Friedberg.

• 1:08David Friedberg?

  I mean, I'm totally cool with that opening because you're gonna look like an asshole. It's all good.

• 1:12Jason Calacanis?

  I mean, more of an asshole? I mean...

• 1:15Chamath Palihapitiya?

  If you didn't ignore it, every time Friedberg spoke, you would have heard that the guy from Anna Porn of Pictures reached out to him, gave him a link to download a free game about cats, which he downloaded and he's been playing. It's now the most popular video game in the world.

• 1:28Jason Calacanis?

  You introduced the cat game. It's on you.

• 1:30Chamath Palihapitiya?

  By the way, what shirt are you wearing? It looks like a carpet.

• 1:33David Friedberg?

  Yeah, you really do look like one of the characters from Goodfellas. Like, one of the older guys in the Kansas City.

• 1:38Jason Calacanis?

  Oh.

• 1:39David Friedberg?

  Yeah.

• 1:40Jason Calacanis?

  I have my cigars right off screen here and I got my coffee. I got from Dunkin'.

• 1:44David Friedberg?

  You remind me of one of the guys in Kansas City from Casino.

• 1:46Jason Calacanis?

  Absolutely.

• 1:47David Friedberg?

  The old guy sitting around the table in that restaurant.

• 1:49David Sacks?

  It's like, should we whack him? Why take a chance? Boom.

• 1:52Jason Calacanis?

  Listen, you got my, you got my style icon. Joe Pesci's my style icon.

• 1:58Chamath Palihapitiya?

  You look really bad.

• 2:00Jason Calacanis?

  Thank you. Thank you.

• 2:19Jason Calacanis?

  GDP fell by 0.9% in Q2, marking two straight quarters of negative growth.

• 2:26Jason Calacanis?

  In Q1, we all know GDP fell 1.6%. Here's the real GDP chart. Current dollar GDP increased 7.8% at annual rate or 465 billion in Q2 to a level of 24.85 trillion. Home construction down 14% ostensibly because of the interest rates increasing.

• 2:48Jason Calacanis?

  Inventories, which helped boost GDP in 2121, dragged down growth in Q2. So supply chains easing, taking away two percentage points. Chamath, what's your take? Do these year-over-year comparisons work? We were talking in the chat a little bit about the spike in 2021 versus the dip in 2020. What's your take on this?

• 3:09Chamath Palihapitiya?

  I mean, I think you just summarized that people are really fixated on these numbers without understanding basic statistics. So just taking a step back, if you go to the Bureau of Economic Analysis, which is an official website of the government of the United States that posts GDP, the title makes it pretty self-obvious what we're dealing with here, which is says, Nick, you can put it up there, real GDP, the percent change from the preceding quarter. So things can still go up positively, but still be negative if it doesn't go up by the same or more than the quarter before it. The thing that we really have going on is that over the last eight quarters, we've

• 3:51Chamath Palihapitiya?

  had all kinds of very turbulent data that's made the trend line unpredictable. And the most obvious way to see this is actually in one specific subsector, which we'll get to in a second, which is around US e-commerce adoption. You see this one huge spike coming out of nowhere. And then eventually, everything has settled back to trend. The same way, I think what we're waiting to figure out is how many quarters does it take for us to get back to on-trend growth in the economy? We had a massive shortfall in Q2 of 2020. We had a massive surplus in Q3 of 2020. We've had a country that's been getting back to finding equilibrium over the last five quarters.

• 4:35Chamath Palihapitiya?

  So we don't really know what the steady-state growth should be. This is why I specifically had such an issue with the tone the White House took, which was trying to explain away that this isn't a recession by trying to create doubt in the definition. Instead, I think it would have been much better off just repeating what I just said and explaining basic statistics and actually showing that the country is headed in the right direction, largely speaking from a really crazy one-time externality that nobody could have predicted, that it's going to take some number of quarters. And so really, what you should look at, and Jason, you've pointed to this, is employment

• 5:15Chamath Palihapitiya?

  and wages, and try to be a little bit more circumspect and overreacting to any one-quarter data. By the way, the Fed exactly just said the same thing yesterday when they raised 75 basis points. They said, "We are not going to give guidance anymore because things are too turbulent. We're going to remain vigilant on inflation, but mostly, we're going to be very near-term data-dependent." So I would boil all of this in saying, "Let's not overreact to a quarters print here or there," and specifically the label. I think the White House made a mistake in trying to basically think, you know, we all didn't understand what our technical recession was. I think instead, we should just focus on what we have to do to get back to solid-state equilibrium.

• 5:59Jason Calacanis?

  Yeah, and just to put a pin in the definitions, we all know the common definition, two successive quarters of negative GDP. However, people have said it's a temporary economic decline during which trade and industry activity are reduced. So there's a sort of debate and splitting hairs going on, Sax, which was kind of stupid.

• 6:22David Sacks?

  The big news this morning is that we no longer know what a recession is. This is such a vast and complicated question. You might as well be asking, what is the meaning of life? Now, I remember in the days of Republican presidents, we had a very simple definition of recession, which was two quarters of negative GDP growth. But now that we have a Democrat in the White House, we just can't know these things. Why even ask such difficult questions? Right? I mean, that's basically the media coverage today, and it's absurd. I mean, and you saw for the last week, the administration and its spokespeople have been trying to muddy the waters on the definition of recession. And it was laughable as they're doing it. But now you see the media coverage today, and you realize like they've bought into this nonsense, and they're carrying so much water for the administration.

• 7:05David Sacks?

  Look, the headline should be, the Biden recession has begun. That's it.

• 7:10Jason Calacanis?

  If you had three minutes and 45 seconds for your Biden over/under with Sax, you took the under, you won.

• 7:15David Sacks?

  We're in a recession. He's the president. And if we had a Republican in the White House, it would be Republican President recession has begun. So the media here is carrying so much water to try and avoid the obvious headline. I just explained it. Instead of reporting the obvious headline, they're now saying that we're approaching recession, or we might be in recession. We have all these difficult technical issues. Look, listen, we're in a recession. It started. It might be a shallow recession. We don't know yet.

• 7:44Jason Calacanis?

  Yeah.

• 7:44David Sacks?

  It's a recession in which the unemployment rate as of today is low, although the labor participation rate's also low. So, listen, we're at the beginning of a recession. It might turn out we might have a bounce in Q3. This might be more of a double dip. I suspect that's what it will be. But we know the cause of this. The cause of this recession is inflation. If you look at the economy's growth in nominal terms, it grew at 7 point something percent. But because inflation was at 9%, you have to subtract them in real terms, the economy is shrinking. And who is to blame for for inflation? Well, Jay Powell at the Fed because he reacted way too slowly. But also the Biden administration for all the spending they did.

• 8:25Jason Calacanis?

  How much sooner do you think they could have reacted? Two quarters?

• 8:28David Sacks?

  No, like nine months earlier.

• 8:30Jason Calacanis?

  So three quarters.

• 8:31David Sacks?

  We got that. We got that first surprise inflation print last summer. It was May, I believe, that 5.1%.

• 8:37Chamath Palihapitiya?

  We started to talk about 10 year breakevens tips in May of last year.

• 8:43Jason Calacanis?

  Yeah, so they could have gone a quarter or two, quarter or two.

• 8:45David Sacks?

  No, the nine months and they continue. Not only do they not raise rates or signal any desire to raise rates for six months. They continue quantitative easing for nine months, which just makes no sense. But they should have taken their foot off the accelerator right away.

• 8:59Chamath Palihapitiya?

  Not nine months. They only start. They only stopped in June of this past year. So we've only been quantitatively tightening for two months.

• 9:04David Sacks?

  I thought they stopped the bond buying program in March.

• 9:07Chamath Palihapitiya?

  Maybe that's right, yeah.

• 9:08David Sacks?

  Yeah, but they saw quantitative easing in March. But you're right, that tightening is just something they're getting started with. But the point is they should have stopped easing, right? Like, why would you need to keep intervening in in the in the markets to buy more? And to basically push out more money?

• 9:24Jason Calacanis?

  Is the reason for this that Powell and Yellen just haven't lived through highly inflationary times? I just read.

• 9:30David Sacks?

  They're older than I am.

• 9:31Jason Calacanis?

  Well, I'm just saying they they haven't been in office and doing Fed policy like I just read Volcker's book. If you haven't read it, it's pretty great, his biography. I mean, what he had to do in 81, 82 was super severe. But we just haven't lived through this in our lives. So I guess people are just not used to having to tap the brakes in our.

• 9:49David Sacks?

  No, no, look, what happened is that the administration reacted in a political way to the inflation print. They invented this word. Well, the word transitory existed, but they applied it. You heard this word used relentlessly for about six months. So the administration went into denial mode.

• 10:06Jason Calacanis?

  Yeah.

• 10:06David Sacks?

  And then by the end of the year, it became clear that it was persistent. And I think the issue with Powell is that he is basically responding to headline risk. Right? So he didn't respond to, you know, the inflation problem last summer. He waits until the the headlines tell him he has to react. And so now the the thing that he's worried about is is recession. Obviously, he knew.

• 10:30Jason Calacanis?

  No, he's worried about inflation mostly, right? He wants.

• 10:32David Sacks?

  He's worried about inflation, but if you look at yesterday's. Right, but if you look at his comments yesterday. It was more dovish comments. They did a 75-point rate hike, but the comments were more dovish. And I think it's because he knows that today we have this second consecutive quarter of negative GDP growth. So now he's trying to balance recession risk against inflation risk. But the point is that the Fed's been very slow to react. And the administration basically just tries to relabel and rebrand problems instead of confronting them head on.

• 11:01Jason Calacanis?

  Hey Chamath, when we look at this chart you pulled up before and we see this massive spike, Q3, Q4, Q1, Q2, a little bit in Q3 and then Q4. I mean, this massive, uh, 1, 2, 3, 4, 5, 6, just extraordinary quarters or 5 out of 6 in terms of GDP. That's all stimulus in your mind, right? This is the money drop.

• 11:21David Sacks?

  No, that was lockdowns and Q2 2020, Jason. They locked the economy down.

• 11:26Jason Calacanis?

  Yeah, but so people were spending online and we'll get to the Chamath story about Spotify, but...

• 11:30Chamath Palihapitiya?

  It's not all of it, but the point is...

• 11:32Jason Calacanis?

  It's some combination of lockdown and...

• 11:34Chamath Palihapitiya?

  Access money, right?

• 11:35Jason Calacanis?

  Access money.

• 11:36Chamath Palihapitiya?

  Access money because, because of loose financial conditions distort what true supply and demand should be.

• 11:44Jason Calacanis?

  Got it.

• 11:44Chamath Palihapitiya?

  Right? And access money can come from the government. But in this case, access money went from the government into the hands of individuals who then participated in the public markets. And they distorted what it, what it all looked like. And so there was a lot of purchasing activity that was propped up by what seemed like an endless supply of free money.

• 12:05Jason Calacanis?

  Right. So when we look at...

• 12:06Chamath Palihapitiya?

  Yeah, good. And so now that that money is getting taken out, we don't yet know what the real equilibrium economic growth rate should be. Because you have to remember, we have not seen an era without federally introduced spending, without federally introduced forms of quantitative easing since the great financial crisis. So we have been propping up our economy for 14 years straight now. So we have distorted the prices of bonds and fixed income. We've distorted the prices of equities. We've, we've created an asset bubble in crypto out of nowhere. And now we have to do the hard work of figuring out what the real supply demand is in the economy.

• 12:48Jason Calacanis?

  If it took six quarters here, there are six quarters of just massive GDP spike there from the preceding quarters, and we have two down quarters, is it going to take six quarters to wash this out, or longer, I guess?

• 13:00Chamath Palihapitiya?

  No, longer, because what David said is now making the problem even worse. So because Powell was catering to whatever pressure he's been getting, and he must be getting some severe pressure from the White House. Those were really dovish comments, but what is the problem when he is dovish? Well, the practical reality is a couple of things. Number one is typically, the yields of long-dated bonds go down, okay? That essentially tells everybody else to reprice assets. What does that practically do? It makes the cost of borrowing roughly cheaper, okay? It makes the price of equities, particularly ones that are far out on the risk spectrum,

• 13:45Chamath Palihapitiya?

  so specifically, let's focus on NASDAQ and crypto, right? Tech stocks, biotech stocks, and crypto stocks go up much more aggressively. So what has Powell effectively done? He has synthetically created a form of easing, again, right? Like, his job at the Federal Reserve, if you think about the money supply as a pipe, it's to shrink the pipe, to close off demand, to get things in equilibrium. So even though he's doing this, by the language that he's doing, he's effectively allowing market participants to basically guess that the worst is over, and now we're going to start to expand the pipe again. And so they go to the end state.

• 14:26Chamath Palihapitiya?

  So what he effectively did in one speech is basically put a pin at the end of this year, and is telling the markets, "I'm mostly going to be done, and if anything, I'm probably going to be cutting in the back half of '23. Go on your merry way."

• 14:42Jason Calacanis?

  And there is no C...

• 14:44Chamath Palihapitiya?

  The problem with that, Jason, is it's now pushing the problem out another eight quarters. Like, we need to stop this nonsense. He needs to be definitive, and he needs to fundamentally break the back of inflation so that you find out what the true demand is in the economy.

• 15:01Jason Calacanis?

  Yeah, and he did 0.75 yesterday. The markets rallied on his sort of the assumption that he would do a couple of more of these rate hikes and then he'd be done at the second half of the year and then hey, maybe we can get back to growth or some normalcy in related to all of this. And by the way, there was an interesting story the Sacks would be interested in. Did you read Paul Volcker's biography yet, Sacks?

• 15:26David Sacks?

  No, I've not read it. I mean, I'm familiar with his record, but yeah.

• 15:30Jason Calacanis?

  Like at one point, Baker and Ray took Reagan and Volcker into a room off of the White House. So it wasn't recorded and just said Volcker to Volcker, the president does not want you to raise rates going into the 84 election, full stop. And Volcker's like, well, I wasn't planning on raising them. So there's a lot of politics in this, even though people claim.

• 15:49David Sacks?

  They'd already done enough. I mean, Volcker raised rates all the way up to like 20%. He broke the back of inflation. It created a very severe recession in, I think, 1981, 82. But by 1983, the economy was rocketing back.

• 16:02Jason Calacanis?

  Yeah.

• 16:03David Sacks?

  With lower interest rates and they basically have solved the inflation problem. Hopefully we're not in that situation where Powell has to jack up rates so much to break the back of inflation because it means that we'd be in an even more serious recession. So I hope we're not in a Volcker type situation.

• 16:19Jason Calacanis?

  But just think about that spread, Sacks. 20% versus like 3 or 4% we're trying to get to.

• 16:25Chamath Palihapitiya?

  We've never in the history of America ever had CPI print above 4.5% or 5% without inflation being brought down by having Fed funds not also be greater than 4.5%. So at some point inflation will turn over and will print 6% and 7%. But that's still not below 4.5%. And right now, our target Fed funds rate is between 2.25% and 2.5%. So we could still be only 50% of the way there. If inflation remains at four to four to five percent. And this is what I think market participants don't want to hear.

• 17:08Chamath Palihapitiya?

  They don't want to hear that there has to be a meaningful form of tightening. And politicians don't want to hear that. The White House for sure doesn't want to hear. The problem is that if Powell caters to too much of that feedback, he's not going to do what he's supposed to do and why he's put in that job.

• 17:24Jason Calacanis?

  His job is to get it to two percent and keep price stability and full employment.

• 17:28David Sacks?

  I do think there is a balance here. I mean, the reality is we do not want Powell tightening more than he should or more than is necessary to solve inflation because it will cause a serious recession. So I think we're caught between two pretty bad options here. And it's because I think that what happened last year contributes to this. I mean, look, if you go back to that chart that you just showed, what happened in Q2 of 2020? We had a very healthy economy going into 2020 and 2019, right? And then in Q2 of 2020, we had COVID, but we made the situation even worse with lockdowns. And we basically shut down the whole economy, brought it back, at least in most states in Q3. And then the Fed started printing and Congress started printing $10 trillion.

• 18:10David Sacks?

  Well, still by last year, the economy was back. We had something like 5.7% annualized growth. This year it's negative. Why is that? I mean, this may be the lingering effect of all that stimulus, but I think that it is. But I do think that the administration made it worse by sending checks into an overheated economy. They also created energy scarcity and they just kept, you know, spending more money.

• 18:36Chamath Palihapitiya?

  I'm not saying the White House isn't without fault, David. But I do think that if all of these geniuses could have actually just taken a simple econ and stats 101 class and explained how year-over-year measurements work to the American people, I think they're smart enough to understand it. We didn't have to go down this convoluted route. We could have just explained, we put a lot of excess money in the economy. We don't yet know what the full effect of that is. We need to let that wash through. In the meantime, you're going to see some crazy numbers from time to time, and we just have to be patient.

• 19:06Jason Calacanis?

  And the other crazy things you're going to have, looking at second and third order effects is all these downstream effects. People are making business decisions going into these economies. Shopify just laid off 10% of its workforce, about 1,000 people on Tuesday. Their stock is down 10% past five days, overall 70% year to date. And if you look at this chart, and Toby took blame for this, he basically said, listen, we thought that this was going to be a, you know, fast forward into the future, that people would adopt e-commerce in a major way, and that would stick. Here's US e-commerce adoption growth rate, massive spike when people were forced to buy all their goods online. And now it is regressing to the mean.

• 19:52Chamath Palihapitiya?

  I mean, mean reversion is a bitch. If you look at Shopify stock, if you look at Peloton stock, if you look at Affirm stock, if you look at Arc, you know, a lot of these things were trending in a great direction. They had this short-term crazy behavior in the middle of all of this free money, and now they've mean reverted. And, you know, we're in the midst of finding out what the real price is. I got to give Toby the huge

• 20:18Chamath Palihapitiya?

  you know, round of applause because he is such a great CEO, and I'll tell you why. Last year, in the middle of all of this woke-ism, he wrote this incredible memo, which was, you know, we're not a family, we're a team. Which I thought was exceptionally well-written and really got the point across. This time around, he just owned it. He's like, you know, I made a huge bet that all of this behavior Change was going to be discontinuous and permanent and it turned out I was wrong. I'm sorry for that and here's how we're going to have to course correct. In both cases, he kind of just put it all out there and he owned it. And I think that that's all you can do when you make a bet and it's wrong.

• 20:56Jason Calacanis?

  And here's what he said, "It's now clear that bet didn't pay off. Ultimately placed in this bet was my call to make and I got this wrong. Now we have to adjust as a consequence, we have to say goodbye to some of you today and I'm deeply sorry for that."

• 21:08David Sacks?

  I mean, everybody made that mistake, right? So, you know, it is, it's just, you're right, Jemath, just own it. Everyone was thinking the same thing. We all were talking about how COVID was this accelerationist virus and it was going to accelerate all these trends. And

• 21:23Jason Calacanis?

  Well, let's

• 21:24Chamath Palihapitiya?

  The rude awakening is going to be for all these people who made all these bets, assuming that it's permanent. And specifically, I mean, you know, especially around real estate and work from home and all of this stuff benefits. And it's all going to change now. And the reason I say that is the combination of reversion to the mean will impact a company's bottom line. And those boards of directors and CEOs will say, okay, we're just going to have to reset expectations. And that's going to touch the employees. I don't know if you saw

• 21:54Chamath Palihapitiya?

  this leaked transcript, but, you know, Zuck was asked a question from this

• 21:57Jason Calacanis?

  Oh, God, that was classic.

• 21:59Chamath Palihapitiya?

  That was unbelievable.

• 22:01Jason Calacanis?

  He was asking about his like emotional support days or some shit.

• 22:04Chamath Palihapitiya?

  I think in the, in the middle of like Zuck having like a really serious, you know, heart to heart with the company about how we're going to have to buckle down and, you know,

• 22:11Jason Calacanis?

  Performance, individual performance.

• 22:14Chamath Palihapitiya?

  One dude, one dude, you know, schmengi from the back raises his hand and goes, "What about the COVID extra vacation days? Will those get canceled?"

• 22:21Jason Calacanis?

  Zuckerberg almost like, he literally, his head almost exploded. He's like, "Did you not just listen to what I said? I just said if people are not performing at a high level, maybe they shouldn't be here and you're asking me about more days off?"

• 22:34David Sacks?

  Fire that person to say like, you obviously, you don't get it. You didn't listen to anything I said. You're not right for this team at this time.

• 22:41Chamath Palihapitiya?

  Instead of version of that, he's like, there's a lot of people here that may not be the right.

• 22:45Jason Calacanis?

  Friedberg, when we look at these trends, okay, commerce seems like people are going back to shopping. But I want to ask you about two specific ones. Healthcare. It does seem like telemedicine was one of those things that got accelerated during COVID. Do you think that's going to revert to the mean? Or do you think that, you know, doing doctor's visits over, you know, FaceTime and text and all these consultations is going to stick with us? And then what about work from home? Because that does not seem to be shifting all that much.

• 23:18David Friedberg?

  The work from home is not shifting?

• 23:21Jason Calacanis?

  Well, I mean, it's people are still staying home and, you know, Amazon just put a hold on six buildings where they said, you can finish the outsides, but let's not do the insides because we don't even know what we're going to do with these buildings and what hybrid is going to look like. And Zuckerberg hasn't been able to get people to come back to the office and Apple seems to be getting people two or three days a week. So it seems like it's still been a struggle and downtown San Francisco is empty. So we're getting mixed. We're getting mixed results back now, I would say is the best way to describe it. So work from home and telemedicine. What do you think, Friedberg?

• 23:53David Friedberg?

  I mean, certainly the knowledge economy seems to prefer work from home. I mean, if you're working on a computer and you don't need to interact with people and you've got kids or family, you're inclined to stay home. So that seems to be a sticking point. You know, younger people probably have their own motivations, but there was a good stat on telehealth. I'm just trying to find it. And I think telehealth surged during COVID.

• 24:23David Friedberg?

  And 36% of patients used a telehealth service in 2021, 420% increase over 2019. And so despite some reversion post-COVID, post lockdowns, there's a significant sticking point that, and I think 60% of telehealth patients are women. So there's particularly female services that are being rendered through telehealth at an increasing rate than pre-COVID. And so there's a lot of stuff. I mean, look, we've all had to go sit in the doctor's office for two hours to get some prescription or get a doctor to give us some advice on something they don't need to physically check us out for. So, you know, it certainly seems to be a acceleration in that department.

• 25:05David Friedberg?

  Offices. What was the, Amazon like was working on 15 warehouses they shut down as well? Right? I mean, if you guys remember at the start of COVID, when you place something on Amazon, it was like a two week delay because they didn't have enough capacity to fulfill the order volume. You know, you look at Toby's chart, it's nearly a doubling in e-commerce volume in a week. When that happens, Amazon's, you know, plus or minus 5% supply chain has to revert to servicing twice as many customers. It's just not going to happen. So they overbuilt, tried to get ahead of the curve. Remember they hired like a hundred thousand workers and you know, they, they, they had to make a pipeline for quarters ahead to build warehouses. Now they're realizing the demand's not going to be there and they're cutting back on 15 warehouses around the country and not going to build them.

• 25:47Jason Calacanis?

  They were buying up so many warehouses. I had a couple of companies that were looking for warehouses in Los Angeles, Northern California, and Amazon just bought an option on every single warehouse they could find. And now they're putting them back on the market. So they, they definitely went too heavy. And then everybody started betting on Peloton and Teladoc. And if you look at Teladoc, I mean, it's off 90% from the peak. I would, I would show the, I would show the Peloton chart as well, but that would just be gratuitous.

• 26:15David Friedberg?

  Some of the stuff to note is like, at the end of the day, whatever product is better for the consumer, they're going to pick. You know, what's the better way to buy shirts? You know, what's the better way to get?

• 26:27Jason Calacanis?

  Define better.

• 26:29David Friedberg?

  Yeah. I mean, for the consumer, it's like, do you want to try them on or do you know your size, right? You're buying a brand that you know on a size, you know, you're going to buy it online at this point. I mean, the one thing COVID did is it basically created a trial by fire. My parents never used DoorDash before COVID. So then they were forced to use DoorDash during COVID. Now they know what it's like. And so, you know, there are now people that never trialed a lot of these services that have trialed them and are now making decisions based on that experience.

• 26:54Jason Calacanis?

  But that's a beautiful example. So just use your parents. Why do you think?

• 26:58Chamath Palihapitiya?

  Let's assume they did. Why do you think they mean reverted to now using DoorDash only in the same percentage as they would have otherwise?

• 27:05David Friedberg?

  That's my point. Like, I think the quality of the food, the time to wait, the experience of going out to dinner, there's a lot of motivating factors that are different by different demos. And so whatever the consumer wants, they're gonna pick. If I wanna go have a dining experience in person with my friends, I'm gonna go do that instead of sitting at home ordering DoorDash and having everyone come sit on the couch and eat dinner together. So I think that there's this, you know, this, call it mean reversion, but we have seen, call it a broader exposure, and we're really gonna see the true market dynamics play out. I don't think everyone wants to buy shoes online. I don't think everyone wants to buy every piece of clothing online. I think people wanna go to the store and try stuff on.

• 27:41Chamath Palihapitiya?

  I think it's that, and I think that there's a lot of ancillary social benefits that come with a lot of these activities that you lose if you just optimize for efficiency. So, to your point, like, yeah, you can get a burrito, but even going to Chipotle with your friend is more fun.

• 27:58David Friedberg?

  Totally. Get out of the house.

• 27:59Chamath Palihapitiya?

  Get out of the house, shooting the shit, you know?

• 28:02David Friedberg?

  Yep.

• 28:03Chamath Palihapitiya?

  It's just, it's, and the serendipity, yeah, you may run into somebody, but nothing beats that.

• 28:08David Friedberg?

  I will tell you, by the way, I do believe that there is a counter-narrative to the idea of work from home and e-commerce moving together. I think as people work from home, they wanna go be in-person for other activities more.

• 28:21Chamath Palihapitiya?

  Yes.

• 28:21David Friedberg?

  So the more you're working from home, the more you wanna go to dinner with people or lunch to people, the more you wanna go shop in person, because you're stuck in the house all day, and you wanna go do other stuff. And so if you're working in the office, you're gonna do more e-commerce, and if you're working at home, you're probably gonna do less e-commerce. So there's probably some net-net balance. We saw both of them rise together during COVID, but now there's more of an equilibrium being reached.

• 28:43Chamath Palihapitiya?

  Well, I mean, if you don't look up and change your behavior, you may stay home for three days straight, and all of a sudden, you're like, whoa.

• 28:48David Friedberg?

  And just remember, 60% of the US population lives in urban areas, where this is kind of an effective kind of conversation we're having. I think outside of that, it's a very different world. And so for 40% of Americans, this is not like the conversation that, you know, in deeply suburban and rural areas.

• 29:05Chamath Palihapitiya?

  Do you guys know what shadow, or ghost quitting is? Do you know what ghost quitting is? Ghost quitting.

• 29:10David Friedberg?

  Huh.

• 29:11Chamath Palihapitiya?

  I saw it on TikTok.

• 29:12David Friedberg?

  You stop, you stop working.

• 29:15Chamath Palihapitiya?

  I saw it on TikTok.

• 29:16David Friedberg?

  But you're still getting paid.

• 29:16Chamath Palihapitiya?

  It's when you decide to quit mentally, but don't actually quit. And so you basically get out, get off the corporate rat race by doing the bare minimum to not get fired at a company.

• 29:28David Friedberg?

  Oh, like Saks during the science segment?

• 29:30Chamath Palihapitiya?

  And so I, uh, you know, I, I think that there's all of these like invented things that people do that they think they can get away with, which they generally can in a moment of prosperity. Where in a moment of actually like buckling down when earnings matter and profits matter and investor pressure matters. All of this stuff I think is going to mean revert. So this is sort of my, my opinion on all of this, which is I think that most of these behaviors will eventually take over. But it's still many years away. And right now we have to go through the process of just getting back to where we were meant to be in the first place.

• 30:06David Friedberg?

  I think one area with significant disequilibrium right now, I mean, to your point is, is productivity. I think it's very hard to assess and qualify productivity for knowledge workers in this environment. And this is for employed base, right? Remember we talked about last time, like a large percentage of the US workforce has moved to more of an independent contractor, sole service provider kind of model for how they're interacting and working in the world. Um, but I'm talking about knowledge workers in an employed environment. And it is becoming difficult for managers and for companies to assess, you know, the, the, the quality and the level of work being produced relative to its potential. It's not the same as it used to be when you'd be able to have in-person monitoring and interaction.

• 30:50David Friedberg?

  And so, you know, I saw a stat the other day where it was like, most companies are asking workers to come home. Most of the workers are to come to the office. Most of the workers are saying no. And then most of the bosses don't know what to say in response. And they're still sitting on the sidelines like, okay, okay, don't come to work. Oh, you're fired. Yeah. And so there is this, and by the way, this, this may yield a competitive advantage for businesses in the marketplace that figure out how to assess productivity and how to assess performance in their organization right now. In this rapidly shifted, totally different workforce than what we had a few years ago, because it's so easy to take four hours off in the afternoon. Go to lunch, hang out, have beers, come back, get back online, get back on Slack, do stuff.

• 31:33David Friedberg?

  And so there's this real challenge, um, I think for organizations and a real disequilibrium of productivity and output right now.

• 31:41Jason Calacanis?

  I've had to deal with it.

• 31:42Chamath Palihapitiya?

  Have you guys looked at the TikToks of these people that are like day in the life of like a Google engineer or day in the life?

• 31:47David Friedberg?

  They work for 30 minutes and then they're like four hours at the gym.

• 31:50Chamath Palihapitiya?

  They don't work.

• 31:51David Friedberg?

  They don't work.

• 31:52Jason Calacanis?

  They're literally smoking weed and playing video games.

• 31:54David Friedberg?

  And everyone knows it too.

• 31:55Jason Calacanis?

  They're playing cats.

• 31:56David Friedberg?

  Managers know it.

• 31:56Jason Calacanis?

  Everybody's talking about it.

• 31:57David Friedberg?

  Managers know it, senior VPs know it, the CEOs know it. It's, this is my point, people just don't know how to manage it. It's a real.

• 32:03Jason Calacanis?

  I figured out a couple of them.

• 32:04David Friedberg?

  It's a real disequilibrium in the workforce because the way you managed it before is everyone would show up to work or they wouldn't. If someone's not in the office, they're not working, they get fired. Now what do you do?

• 32:12Jason Calacanis?

  Period.

• 32:13David Friedberg?

  You know, and, and no one wants to be monitored. No one wants to manage keystrokes through a frigging remote computer and figure out how much you're typing.

• 32:19Jason Calacanis?

  Actually, uh, it's interesting you mentioned that.

• 32:21David Friedberg?

  That's what you do, Jake, how do your employees?

• 32:22Jason Calacanis?

  No, no, no, no, no, no, there, there are people doing that. Call centers actually do that. So call centers and sales teams, they have monitoring software.

• 32:29David Friedberg?

  Customer service and call centers, totally. Salespeople, you can totally track productivity. I'm talking about creators, producers, right? Like, yeah.

• 32:36Jason Calacanis?

  I actually have come up with some strategies for this. So we have a lot of writers, uh, doing newsletters and stuff like that. And so what we did was we created a block in the afternoon, we've been testing where three writers will get together in a pod and they work on a newsletter together. So instead of three writers writing three different newsletters, you have three writers collaborate on three different newsletters. They do one for two hours, one for two hours, one for 90 minutes, one for 90 minutes.

• 32:58David Friedberg?

  And then a total of three people read the newsletters?

• 33:01Jason Calacanis?

  Uh, well, it's doing four or five million dollars in advertising. It's hundreds of thousands of people a day, but okay. But anyway, the point is, um, I didn't mention the name of the company, there's no plug in here, but by putting people into a Zoom, yeah, no, no, you put people in a Zoom or a huddle on Slack, which is like an audio only, and then they have to deliver work to each other. It's kind of how developers work or sales teams work with leads. And then in things like.

• 33:25David Friedberg?

  It's like pair programming.

• 33:26Jason Calacanis?

  Like pair programming. It's like pair programming, exactly. And then with, and it also makes people less lonely and it builds social fabric. So there are techniques that are emerging. The other one I've looked at is I tell anybody, if you're doing any type of knowledge work. You need to create a Notion or a Coda page, depending on what you use, and update us on that and then send it to the group chat, you know, to the general channel. Hey, I was working on the strategy for this. So when people say they're working on strategy, I have them document it and I say, share us, share with us the Google Doc and I use the Amazon six-page, you know, philosophy of a write-first culture. And now people have to write it down. So I've been teaching people how to write, use Grammarly or Hemingway app to be better writers. And then what you can do is as a manager, you can just look at your Notion or your Coda and see the change log.

• 34:11Jason Calacanis?

  And when I see people in a change log and I see they made no commits, I'm like, what is this person doing? They said they did all the strategy stuff. Where is it? Where is the strategy stuff? Write it down. So if you switch to a write-first culture and then train people how to write and become more confident writers, all that knowledge gets captured on your knowledge base and you can actually see people getting done. It's not perfect, but I think it's actually intellectually better than being in an office if you know how to do it. Because in an office, people are also performative. They're doing like bullshit meetings. They're pretending they're working. They're, they're actually reading the news or, you know, whatever. So Sax, what are you doing to monitor your employees covertly and keep them productive?

• 34:51David Sacks?

  We don't need to monitor our employees that way because we're a small team and they're highly motivated, you know. But look, it is an issue. I don't, I think where work from home is beneficial is on the hiring side, right? It's so much easier to hire for a job when your potential pool is anyone in the world. You're not just geographically limited to the city in which your office is. So that was the temptation for all these companies to go remote is it made hiring so much easier. But there's no question that it makes management much harder and scaling the company much harder and building culture much harder. And so there's some real trade-offs there. I don't think companies have totally wrapped their heads around it. But look, in addition to productivity, there's one other aspect of this economy that I think is really broken.

• 35:34David Sacks?

  So the Chamber of Commerce says that 3.25 million fewer Americans are working today than they were in February 2020. So basically, if you go back to the month before COVID, we had over 3 million more. Americans in jobs than we do today. And yet, the unemployment rate is still in the 3% range. And the reason is because that if somebody drops out of the labor force and isn't looking for work, they don't get counted in the unemployment rate. So we do have, if you define unemployment as a large number of people who aren't working, we have a huge unemployment problem. But the problem is they're not, they're not counted because they're supposedly not, not looking for work. So I don't think this economy is that healthy.

• 36:16David Sacks?

  And, and I think that there's a lot of distortions that have been created by government.

• 36:22Jason Calacanis?

  The job data is suspect is what you're saying, right? Like labor participation is down.

• 36:26David Sacks?

  All this data, the, the data is suspect, the labels are suspect. I mean, like we talked about, all of a sudden, we can't know what a recession is. And let's just bring up one other thing that just happened today. So Manchin cut a deal with Schumer to bring back, to bring back a slimmed down version of BBB. Thankfully, it's not 4 trillion like Biden wanted, it's 750 trillion, okay? But what are they calling it? Billion, billion, right? Okay, so, you know, thankfully, it's, it's a slimmed down bill. But what are they calling this? They're all of a sudden calling it the Inflation Reduction Act of 2022. It's like, are you kidding? This doesn't pass the last test.

• 37:01Jason Calacanis?

  Are they trolling us with the names of these bills? The bills are never what's in the bill. Why don't they just call it the green energy bill and the screw private equity bill? I mean, that's basically what it is.

• 37:12David Sacks?

  Yeah.

• 37:12David Friedberg?

  Well, inflation reduction sells to everyone, right?

• 37:15David Sacks?

  But Jason, the media, the media is not holding the administration accountable. If we had, if we had an honest media, they, the headline today would be.

• 37:24Jason Calacanis?

  You're not gonna get it from the media. That train's left the station, Sax. We, you can only get it on this pod or other podcasts.

• 37:30David Sacks?

  Yeah.

• 37:30Jason Calacanis?

  What did President Manchin get for this deal? He agreed to it? What did, what did President Manchin get? Cause he, he secured some bag, right? Did you see what I sent you in the group chat?

• 37:39David Sacks?

  There are gonna be huge.

• 37:40Jason Calacanis?

  Why did he agree? He's like, I got a pipeline.

• 37:43David Sacks?

  There's gonna be huge handouts and pork for the state of West Virginia. There's no question about it. I mean, if you look at this bill, okay, they, I mean, let me just, we should just look at what's in it. And more and more is gonna come out over the next few weeks, right? It's only one day old. So we're gonna learn a lot more about what's in this. But the largest thing.

• 38:00Jason Calacanis?

  So Republicans feel like, can you explain the dynamic as well after you get through this? Of why the Republicans felt like now that he double-crossed them? Because the Democrats felt double-crossed by Manchin, President Manchin? And now the Republicans are feeling double-crossed by President Manchin?

• 38:14David Sacks?

  Well, I don't know that you can use the word double-cross because he's not a Republican and he had no obligation, but look, but there's no question that Manchin went back on what he said. Just a few weeks ago, he was saying that Build Back Better was unacceptable because it would contribute to the inflation problem. In fact, he's been saying that since last summer, he's been saying that we have a growing inflation problem. We can't contribute to it with a lot more government spending. Now, he's agreed to a $750 billion, 750 billion of which, something like 450 is new spending. So, yeah, it's a smaller package than we had before, but if your concern was inflation a few weeks ago, you can't justify this. You

• 38:55David Sacks?

  certainly can't call it an Inflation Reduction Act. I mean, that's just patently dishonest.

• 39:00Jason Calacanis?

  Well, how do they come up with it being inflation reduction? Is it because the healthcare stuff is theoretically going to help consumers have more money to spend?

• 39:10David Sacks?

  Look, I think it's a tenuous argument, but if you want to make the argument, there's some cap on what seniors pay for prescription drugs, and then there are subsidies for people who are in the market for an electric vehicle. However, those are small adjustments, those are small rebates to a small segment of the population. I don't think you can argue in good faith that this bill will reduce CPI. That's just not a plausible argument. And the vast majority of the bill, like you said, are subsidies for clean energy, which are basically handouts to special interests in the donor class in the Democratic Party. Just itemize some of these things. So, the largest single outlay, 60 billion, is for,

• 39:52David Sacks?

  quote, "environmental justice initiatives to address the unequal effects of pollution on low-income communities and communities of color." This includes 3 billion to invest in community-led projects in disadvantaged communities, and another 3 billion to support neighborhood equity, safety, and affordable transportation access.

• 40:08David Sacks?

  Another 30 billion shovels to states in the form of grant and loan programs for states' electric utilities to advance the green energy transition. 30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries, and critical minerals processing. So that's basically going to companies, right? 20 billion in loans to build new clean vehicle manufacturing facilities across the US, and 2 billion to revamp existing auto plants to make clean vehicles. 20 billion for the agricultural sector to, quote, curb emissions. 3 billion to reduce air pollution at ports. 10 billion investment tax credit to manufacturing facilities for things like electric vehicles, wind turbines, and solar panels. This seems redundant to the $30 billion outlay I just mentioned, but it's another giveaway

• 40:52David Sacks?

  to Democratic donors and, you know, bringing corporations.

• 40:55Jason Calacanis?

  Wouldn't that be good for, Chamath, wouldn't that spending be good for energy independence in addition to climate? Because we've been talking about being energy independent. If we have more EVs, more batteries, more solar, that's a good thing, right? We want to be energy independent. So this seems like we get two wins, or possibly three. One, we get economic activity. Two, we reduce our dependence on foreign oil. And three, we stop burning a hole in the ozone and increasing the temperature of the planet. It seems like three good things.

• 41:22Chamath Palihapitiya?

  We have to, I think we have to see the forest and the trees here. And there's a, there's one good part of this bill, and then there's the kind of more ugly reality that it avoids. The ugly reality is unfortunately, or fortunately, or maybe without taking emotion out of it, we are dependent on fossil fuels for a very long time. It is a necessary bridge fuel. And so we need to, if we're talking about energy independence, it can't happen without us frankly drilling more and subsidizing the capital incentives of private companies to go and do this exploration work, which they have stopped, Jason.

• 42:07Chamath Palihapitiya?

  And the reason they've stopped is that they don't trust that these oil prices will stay this high. And so they don't want to make these outlays and investments for the next five to 10 years because they're worried that it's going to be a rug pull, which did happen to them in the back half of last decade and the early parts of this decade. So they're like once bitten, twice shy. They're not, they're not going to touch this.

• 42:27Jason Calacanis?

  Are you saying oil companies that would do some exploration, it would cost them whatever amount, $2 to get the gasoline out of, to get the gasoline out of the earth and then process it, but they're afraid it's going to be negative. They're not going to be able to sell that gasoline.

• 42:41Chamath Palihapitiya?

  I think, I think they're afraid that, you know, the United States government may impinge on their ability to actually process it, that it may, there may be tariffs and costs and taxes that they don't.

• 42:51Jason Calacanis?

  They'll be upside down.

• 42:52Chamath Palihapitiya?

  Forecast, they'll be upside down. So they just don't want to be, and right now, and you saw this, I don't know if you guys saw, but like Shell and Exxon and these guys are printing enormous record profits. So their incentives to change the status quo right now is zero.

• 43:05Jason Calacanis?

  They want less supply because then they can raise prices.

• 43:08Chamath Palihapitiya?

  They have the perfect situation right now, which is it's an incredibly energy intensive world we live in, and we don't have nearly enough energy to do the work that needs to get done. And by the way, and you saw this this week already where, you know, Putin cut Nord Stream by another 50%. It was already running at 40% capacity. He, he cut it down to 20%. It's only getting worse. So I don't know. I mean, I think this bill could be good. I haven't looked at the specifics to give you a very.

• 43:36Jason Calacanis?

  Well, the specifics aren't even out yet. It's trickless. I did see the EV credits at Friedberg, and I thought that these were particularly well constructed. 7,500 bucks off of a new car, but you have to be in the 150K salary or less on your taxes. So rich people can't get these, and it can only be for an $80,000 new car, a $50,000 or $25,000 used. And so they, they did seem to be started pretty well. And I do know that those incentives did work in the early days of Tesla because when you went to the website, you would look at the price and, you know, this would be 10% off of a, of a new car. And they, they did drive sales and it was pretty significant. What are your thoughts on the EV tax credit? Is that something, that's a wise thing? And

• 44:20Jason Calacanis?

  then what do you think overall about spending a couple of hundred billion dollars on reducing emissions and becoming more energy independent at the same time? Seems like a laudable strategy to you? Nope. Seems like a total waste of money. Okay, unpack it, please.

• 44:36David Friedberg?

  The EV tax credit is just giving away money to EV car manufacturers. There's already enough demand, the prices are low enough, there's enough consumer interest, there's enough consumer intent. I don't think you need to put this money out there, it distorts a market that's already functioning well. And this goes back to my point about the role of, you know, government and how we create, you know, create incentives or spend money. This is not a place we need to be spending money because there isn't an absolute need. There's no data that indicates that this will accelerate a transition to a carbon-free economy or that it's even needed. It really is a point of view that people hold and they believe that EVs are good, they're good for climate change, we should accelerate it, therefore we should spend money on it,

• 45:21David Friedberg?

  without any accountability or proof that these tax credits will actually motivate a market to move faster or quicker than it is already moving. And so it is just spending taxpayer dollars that could theoretically not be spent or be spent in a more effective way to improve the lives of people broadly in this country. So, yeah, I don't, I don't fully agree with that. I haven't seen any data that tells me this makes sense.

• 45:44Jason Calacanis?

  Anecdotally, you don't think $7,500 off a $75,000 EV is attractive to consumers?

• 45:50David Friedberg?

  I don't think the EVs are $75,000. GM and others have great, low-priced EVs and there's a ton of market demand and they can't keep up with production. And, you know, giving people $7,500 off a car that the manufacturers are still struggling to keep up with making because there's so much demand already, you don't need to do it. It is so much cheaper to drive an electric vehicle now by plugging this thing in and spending money on gas that people already want to buy these things. They pay for themselves super fast. Every consumer wants to save money on transportation and you will save money by buying an electric vehicle. So you will already buy an electric vehicle. You don't need government money to get you to buy an electric vehicle.

• 46:24Chamath Palihapitiya?

  To Friedberg's point, there is a lot of analysis that's been done on consumer adoption patterns. And typically for a new good or service, the tipping point is around 5% mass market adoption from when it goes from early adopters to the mass market. And EVs just crossed 5%. So to his point... The historical data would tell you that we're now past the critical point where it's no longer questionable and now it's just gonna happen.

• 46:52Jason Calacanis?

  It's not early adopters, we're getting to the mass market.

• 46:54Chamath Palihapitiya?

  Now it's mass market. I mean, I'll tell you like the best, the best thing about EV adoption, for me, for having an EV, is never having to go to the gas station to buy gas.

• 47:04Jason Calacanis?

  Amazing, amazing, yeah.

• 47:05Chamath Palihapitiya?

  I just, just that one thing is a game changer.

• 47:08David Friedberg?

  I'll just give you guys, currently it's about 34.6 kilowatt hours per 100 miles. Okay, I'll just, let's just do some math together. Let's say a kilowatt hour in the US costs about 10 cents. Okay, so that's about $3.50 to drive 100 miles in an electric car. That's a lot cheaper than paying $15 for gas to drive the same distance in a gas car. You don't need the tax credit to get people to buy these things. These cars are financeable, there's a very liquid, very active lending market. You get paid back on these cars within a few months if you're better.

• 47:45Jason Calacanis?

  Where would you direct, if you were gonna direct some stimulus to reducing greenhouse gas?

• 47:49David Friedberg?

  I would not stimulate anything right now. We don't, we just talked about how we don't need to stimulate the economy. I would not do any of that.

• 47:54Jason Calacanis?

  I'm not talking about the economy, I'm talking about to, you, you believe global warming's happening, Friedberg, yes?

• 47:59David Friedberg?

  Look, you want my point of view on climate change and industry. I, I think, I think humans, I think humans are on a driven, naturally market-driven path to resolving carbon output in our industrial systems. And I don't think that government intervention with tax credits in specific consumer products is actually gonna accelerate or resolve, you know, these changes that are needed. We need to not change consumer behavior. Consumers always wanna have cheaper, faster, better. What we need, and you know, at the end of the day, what we need to do is change the way that we're producing and making things, because that's ultimately what's gonna drive this transition. And guess what? Consumers are demanding things that are You know, more efficient, that are more effective.

• 48:42David Friedberg?

  And efficiency ultimately resolves to less carbon, ultimately resolves to less land, less energy. And industry has always resolved to greater efficiency. Natural market forces improve the efficiency of every industrial system.

• 48:56Jason Calacanis?

  So stimulus not necessary.

• 48:58David Friedberg?

  Mankind has ever created.

• 48:59Jason Calacanis?

  Free market doesn't.

• 49:00David Friedberg?

  And I think that it is a matter of time and a matter of natural evolution that we will resolve all of the factors that are driving climate change, from animal agriculture to transportation systems to energy systems. These are all going to get completely rewritten.

• 49:14Jason Calacanis?

  Will we do it in time though?

• 49:15David Friedberg?

  By technical tools. We absolutely will. And at the end of the day, we can pull carbon out of the atmosphere and resolve it into products. We have tools to do that as well. So I am an eternal optimist, but in this particular case, I think that this century, much of what we're throwing our hands about, and you remember, at the beginning of the 20th century, we thought we were going to run out of food. Then suddenly, we invented the Haber-Bosch process and created fertilizer out of air. It was an incredible, incredible invention that saved mankind. We have had time and time again in the history of humanity, these thoughts that we're in an existential crisis.

• 49:46Jason Calacanis?

  Peak oil. We thought we would have peak oil.

• 49:48David Friedberg?

  And we have had these points of view that we're in an existential crisis and humanity's about to end. And every single time, we figured out a way out of it. And we didn't figure out a way out of it because the government came along and said, here's a tax credit. And we've gotten sick, and we've gotten drunk on government spending, and we think that it is the solution to every problem we have as a species. You know what the biggest solution to our problems is? Our ingenuity. And then they let the markets figure it out. Consumers are smart, businesses are smart, they will figure out ways to resolve these solutions. They don't need to have these handouts. And I think that that's a really important point that we've kind of missed. And I'll say, we were talking earlier about the economy. This stimulus, we've been giving ourselves caffeine since 2008, when the Fed started to build up this balance sheet. And we got used to the idea, remember, before this, it was like, oh my God, multi-million

• 50:33David Friedberg?

  dollar bills, and then it became multi-billion dollar bills. Then we had an $800 billion payout in 2008. And suddenly, it was the multiple of 100 billion, and then multiple of a trillion. And this expectation now, we've kind of reset the clock, and everything now is in what multiple of 100 billion or what multiple of trillion we're going to spend on stuff. And no one's even batting an eye at the size of these bills anymore.

• 50:54Jason Calacanis?

  Friedberg, what is a bigger existential threat to the United States? Is it climate, or is it overspending by our government?

• 51:02David Friedberg?

  I think it's over, um, I think the biggest threat is productivity. I think that as a society, we've gotten to the point that we are so well off that we have so many things that we don't realize we didn't have 50 years ago. You know, read Pinkler's book on enlightenment now and just go through those 200 charts he puts in there. It will blow your mind and if you actually sit down and think about it and have a broader perspective on where we sit in this country today versus where we were 100 years, 50 years, even 30 years ago, you will say, oh my God, we live in an absolute luxurious state in this country. Golden era. Golden era, and it is a condition that unfortunately reaps, um, you know, a decline in productivity because at that point-

• 51:47David Friedberg?

  We're entitled. To some degree, some people are entitled. There are many people in this country that are still very hungry. There are many people in this country that still want to progress. And frankly, I think a lot of the lax behavior from government entities actually holds us back from accelerating our productivity outcomes because it gives people many incentives and many reasons, and industry many incentives and many reasons, to not solve problems. And I think that we solve problems and we're left to our own- Shemah.

• 52:12Chamath Palihapitiya?

  There was an article I posted, Nick, you can put it in, about the Congo and that they've decided to auction a bunch of land to oil companies. And, um, I think before they tried to heed sort of, you know, the West's directives and they said, okay, well, let's build a land bank and we'll put a bunch of money in and so then the, you know, people in the Congo will have money for things and you won't have to sell off the oil rights. And only tens of millions of dollars showed up. And then the Congolese were like, they threw up their hand, I'll just read the quote because I think it's interesting. Congo's sole goal for the auction, said the government official, is to earn enough revenue to help the struggling nation finance programs to reduce poverty and generate badly needed

• 52:57Chamath Palihapitiya?

  economic growth. That is our priority, he said. Our priority is not to save the planet. It's quite a stark statement when you read it, but the reality is, in one generation, what will happen is they will feed the world's desire for fossil fuels. That will generate a lot of revenue. Hopefully, it doesn't get pilfered and so it gets invested in healthcare and education. And within a generation, this country could be in a completely different situation.

• 53:25Chamath Palihapitiya?

  Allowing the productivity of that entire population of that country to do what they think is right. So I'm generally of the belief that that that Friedberg's right on this.

• 53:34Jason Calacanis?

  Do you think though, we should subsidize EVs to increase the percentage and then also for solar? Just give me those two, Chamath, solar and EVs. Do you think they should be subsidized or not in the United States?

• 53:45Chamath Palihapitiya?

  It depends on how and at what point of the market cycle. The government's job is to create economic incentives that tip the balance of power towards investment. So if you are sitting here 15 years ago, the price of solar panels was sky high. It was incomprehensible that we could make solar equivalent to any other form of energy. The only way that we were able to close the gap was through government subsidies. But what that did was allow a bunch of companies to build businesses, to make revenues, and then also to make profits that then the public markets valued.

• 54:28Chamath Palihapitiya?

  Those public markets then put pressure on those companies to take those profits, to become more efficient, to make the panels cheaper. And 15 years later, we're now at parity. So that was a really great example of the government stepping in to smooth out an imbalance in the investment incentive of the private markets. That is where they are exceptional. So in any market, they should be able to do this. But I think what Friedberg is saying is when then they do do it successfully and a market starts to germinate on its own, where supply and demand happens naturally between the private markets, the worst thing a government can do is step in

• 55:12Chamath Palihapitiya?

  because it completely perturbs what true supply or true demand is. And that is what causes

• 55:18Jason Calacanis?

  All of this crazy stuff that we deal with.

• 55:20David Friedberg?

  Jake, how fast forward, assume that there's a $7,500 tax credit for EVs that artificially makes EVs cheaper, and then a better technology than EVs comes along. Let's assume it's some nuclear fusion, cold fusion, Mr. Fusion car, like from Back to the Future. And that car inevitably has to fight against the cheaper car, because the cheaper car is subsidized by the government. We see this in a lot of markets that already exist, in food, in energy, in infrastructure, where government subsidies that are embedded in the operating model of that industry, and that industry becomes kind of reliant and dependent on it, totally distorts the ability for the market to naturally transition to a more productive, more efficient state. And that more productive, more efficient state ultimately is cheaper, better for consumers,

• 56:04David Friedberg?

  and better for the planet. And we're, we hold ourselves back when we insert government dollars into well-functioning markets. I do think the government has an important role, as I mentioned last time, in pure science, in seeding new markets, in seeding these opportunities, in identifying paths that are quantum leap efficiency improvements in production systems, in industrial systems, in ways of living. Once those have been identified, if those breakthroughs have been kind of catalyzed, boom, let the market take off, because it's gonna take off. But we shouldn't be in this business-

• 56:34Jason Calacanis?

  And so you believe EVs and solar are there already?

• 56:37David Friedberg?

  Absolutely. They're cheaper. And so let me point, let me just give you one, one point of reference. Let's, let's use Chamov's Congolese example. Let's assume that there's someone that lives in the Congo. And I said to this person, who's probably subsisting on less than $3,000 a year of income, and they're probably living, you know, day to day on finding food. And you said to this person, in the United States, they have these cars, they're called electric cars, and they're cheaper than gas cars. And they're, um, you, you make more money, or you save money by buying one of these cars, and they're cheaper now. And we're giving people $7,500 to buy one. This person who's making three grand a year would say, what? It is a state of luxury that allows us to do this, and frankly, I think it's, it's a state of excess abundance. And that's what I'm most worried about.

• 57:22Jason Calacanis?

  Sax, what are your thoughts on the government giving these type of subsidies to accelerate solar and EVs?

• 57:28David Sacks?

  The whole bill seems anachronistic. You know, first of all, it's raising taxes by 739 billion at a time where we're entering a recession. I don't know any economist who thinks that tax increases help the economy. We just talked about how the economy is in a really tenuous position. So this is not the right medicine right now. Then you've got the fact that the vast majority of the spending in this bill goes to these, you know, energy subsidies, which are just, they're not going to help the average person. There's very little money in this bill that helps the average working class person. These are basically handouts. There's basically pork barrel spending for Democratic Party donors and special interests. And like Friedberg,

• 58:10David Sacks?

  I think just articulated very well, they're not necessary right now. The, what's driving demand for electric vehicles and solar panels and so on, is first of all, the prices keep getting better and better. And second, they keep moving down the cost curve. As technology and innovation gets better, these prices get cheaper. That's what's fundamentally driving the demand. We don't need the government now.

• 58:29Jason Calacanis?

  You don't need to accelerate it.

• 58:31David Sacks?

  In an anachronistic way to shovel out all this money at a time we can't afford it. And look, I'm glad that 300 billion of the bill is supposedly going to deficit reduction. I hope those numbers actually materialize. But we're still 30 trillion in debt. And now that interest rates have gone from basically zero to around 3%, the imputed debt service on our debts basically gone, has increased by almost a trillion dollars. That is a lot of money.

• 58:57Jason Calacanis?

  So just like somebody who had a variable mortgage, the United States is on a variable mortgage with our debt. And so when interest rates go up, we're going to have to pay more interest.

• 59:05David Sacks?

  Exactly. So if interest rates stay at this, call it 3% level, which is roughly where the 10-year T-bill's been, you know, bouncing around at, that is a lot of debt service, a trillion dollars a year of debt service. So I think we're probably entering an era, an overall era of austerity that lasts more than just this year or even this presidency. And I think we'll look back at all this wasteful spending, this last 10, 20 trillion of spending as money we didn't need to spend, that we've been paying for for a long time. So to be shoveling out another 300 billion plus of these programs, and again, once again, going to corporations and special interests, not to the average, you know, person who needs it, it's just so irresponsible.

• 59:47Chamath Palihapitiya?

  I have a question for Friedberg. One of the, one of your exceptions there was investments in science. You want to talk about your opinion on the quality of the grant process at the NIH? And whether we're doing the real work necessary to get the right things funded?

• 1:00:10David Friedberg?

  Yeah, I mean, I think it's a good transition to what happened this week, which was that there was a major potential fraud uncovered in Alzheimer's research, which has led to over a billion and a half dollars of funding and grants being given out to follow on Alzheimer's research programs in the years that followed this initial paper. So, you know, in 2006, there was a paper published in the journal Nature about amyloid beta proteins that impaired memory in brains, which then became kind of the leading theory for the cause and the driver of Alzheimer's disease.

• 1:00:53David Friedberg?

  And much of the research and funding that followed from there, which is now up to nine several billion dollars in total funding in private and public institutions. Last year alone, the NIH funded $287 million in research into amyloid beta. And it turns out that the initial paper was shown to be fraudulent. And so, you know, just recently, the journal Science published in detail an analysis of the photos of the Western blot measurements, the protein recognition images that the scientists used in this initial paper were forged, and that many papers of his were then forged

• 1:01:37David Friedberg?

  years later. And this paper is one of the most cited papers in Alzheimer's research, and much of the work that's been done on Alzheimer's came out of this. And if you guys remember last year, we talked about that Biogen drug. That Biogen drug is meant to stop amyloid beta plaque. And you know, the projection is that Alzheimer's drug. And, and remember, there was a panel of scientists that looked at the data for that drug that Biogen got approval for from the FDA. And they all said, this does not show conclusively in any way that it improves Alzheimer's. And the FDA still approved the drug because so much of the NIH funding went into the research for amyloid beta. And so the assumption has always been, this is the cause of Alzheimer's. This is the way to resolve it.

• 1:02:21David Friedberg?

  And everyone gets so strongly held in that core belief. And there's so much money behind it that we can't turn away and say, maybe we're wrong. And this is the problem when science meets money. Once you go from funding something and then suddenly a whole bunch more money pours into it, everyone's going to look bad and everything's going to fall apart. And everyone fears that the system fails if you realize that something you did and said was so totally wrong. We can even argue this is what happened recently with COVID, the masks, the vaccines, all of the statements that were made, that you have to keep doubling down.

• 1:02:55Jason Calacanis?

  Every system has bad actors, you know, people plagiarize, fraud, whatever. Is this like a systematic thing? And doesn't science protect against this because people then do double-blind studies and try to replicate studies?

• 1:03:08David Friedberg?

  Two things.

• 1:03:08Jason Calacanis?

  Because like Jason Blair eventually got caught, right? At the New York Times, it was only a matter of time before somebody said like, his description on my back porch was not accurate and I never talked to this journalist.

• 1:03:17David Friedberg?

  Let's say that you're a smart, up and coming scientist. Your job is to, is to publish research that gets attention and that you can then go raise grants from the NIH and others from on. So you want to get some good papers out, you want to get attention, and then you want to forward the research that's already being done. It is to no one's incentive to go out and try and retest something that someone's already published on, even though that's what you're supposed to do in science. There's no motivation, there's no dollars to do this. It's, it's a disincentive to your career. It's a disincentive to your ability as a scientist to source funding and to source grants, to go back and retest assumptions that are already strongly held beliefs in the industry. I'll give you another strong example that just came out two weeks ago.

• 1:04:00David Friedberg?

  You know, you guys heard of SSRI antidepressant drugs, right? 37 million Americans are on these drugs. The market is projected to be at about 25 billion in the next few years. That's how much Americans are spending on these antidepressant drugs.

• 1:04:16Chamath Palihapitiya?

  Half a satz, but yes, go on.

• 1:04:18David Friedberg?

  Right. So, there was a paper published in Nature a few weeks ago, and the Nature journal pulled all the research and all the data from 17 other studies that was across several hundred thousand patients. And their conclusion was that there is effectively no proof that these SSRI drugs have an effect on depression, have a positive effect on depression. That serotonin and the idea that serotonin uptake should kind of have a driving effect on depression, and this has been the assumption that's been held now for many years. I mean, I think the original paper on this was published probably north of 20 years ago. But the industry is so big, right?

• 1:05:03David Friedberg?

  The drug companies are making 20, 25 billion dollars a year on these drugs. And scientists are incentivized to further that research that supports that research. And so they can go out and get NIH grants because it's already an accepted, proven belief that this is driving.

• 1:05:19Jason Calacanis?

  Is there a solution to this? Like, for every dollar that's spent on primary, a dollar needs to be sent on double-blind testing it and making sure that it's accurate? Should there... Because we have this issue in journalism, right? Everybody's a content creator, reblogger, and opinion journalist, but there's very few now investigative journalists left.

• 1:05:38Chamath Palihapitiya?

  The actual problem is peer review systems entirely, in my opinion. Like, the problem with this study is that this was done by an up-and-coming researcher in 2006 at the University of Minnesota, under a researcher who was well-known.

• 1:05:56Chamath Palihapitiya?

  And so there was zero incentive, as Friedberg said, to really push back. When well-credentialed scientists tried to find this amyloid beta star 56, they couldn't find it. And, you know, lo and behold, those articles don't get published because they don't get accepted. Why? Because it unravels the entire game that folks will play. So, you know, if you're a well-educated PhD with postdoc in the right places, supporting other people, it's just a loop that goes on forever. The article goes on to talk about how that person who wrote that initial article eventually got this very prestigious multi-year grant from the NIH by a person who was his reviewer, who worked on the 2006 paper with him.

• 1:06:38Chamath Palihapitiya?

  I mean, these are some pretty blatant conflicts of interest. But the reason they don't get uncovered is like, who's, who's going to step in and all of a sudden become the...

• 1:06:47David Friedberg?

  Let me strike an analogy here. You know, there's a seedling of fraud here, obviously. Some guy took some friggin' photos and photoshopped them and doctored them or whatever. But we then tell ourselves stories. And those stories get us access to money, which allows us to pursue more science, which is meant to forward the market. And then eventually the market gets forwarded so much and you spend a billion and a half dollars and it turns out the whole thing doesn't work. Just like stock markets. It starts out as a voting machine in the beginning and it's a weighing machine over time. The same is true in science. You will have a voting machine in the beginning where everyone has some belief, some theory, some hypothesis, and they all want to believe it. And they forward it and they fund it and they fund it.

• 1:07:29David Friedberg?

  But ultimately, if it's not true and it doesn't actually resolve in real-world change, the market will collapse. The stock will collapse. And that's what just happened with amyloid beta and Alzheimer's to a large degree. There's a billion and a half dollar market cap, you can think about it, or a billion and a half dollars of funding that's gone into this product idea.

• 1:07:48Chamath Palihapitiya?

  That's pre-year.

• 1:07:48David Friedberg?

  Well, no, no, there was a billion and a half of NIH funding over time. This is just the NIH money.

• 1:07:52Chamath Palihapitiya?

  No, no, what I'm saying is the NIH budget per year for Alzheimer's and dementia is 1.9 billion.

• 1:07:57David Friedberg?

  Yeah, yeah.

• 1:07:57Chamath Palihapitiya?

  And half of it, if you look at the tags, if you just search the tags, half the money has gone into Alzheimer's disease, amyloid beta. So the point is, you could orient... The terms you used and the way in which you wrote your grants to disproportionately affect the likelihood of getting money. Separately, there's a whole body of researchers that have felt for a very long time that specific forms of infection viruses, Lyme disease, could actually be a precursor to Alzheimer's, and it has been poorly researched because the funding dollars weren't there.

• 1:08:31David Friedberg?

  There's a lot of other theory, mitochondrial dysfunction.

• 1:08:34Jason Calacanis?

  So Friedberg, when we look at this, a bad actor committing fraud can send the entire deployment of capital in science on a multi-billion dollar.

• 1:08:46Chamath Palihapitiya?

  It's the trajectory of the human race. Come on, like, it's not just about like, we didn't get the dollars in. It's if you don't take the path, the drug doesn't get discovered. That's a really big deal.

• 1:08:54David Friedberg?

  And now the drug is in the market. Biogen gets approval, and people start taking it, and we're seeing the data, it doesn't work, and no one wants to use it. So the market has collapsed, and you kind of go back to the origin. It's like, the market collapses ultimately, the weighing machine happens, because the science doesn't work, it's not there. And there was no incentive, no one got paid along the way. Imagine if there was a bounty program to go and disprove papers. I mean, imagine if there was a system where my people...

• 1:09:19Jason Calacanis?

  That's what I was talking about. What is the safeguard? And we do have that in public markets, it's called shorting.

• 1:09:24Chamath Palihapitiya?

  No, there is.

• 1:09:25Jason Calacanis?

  Short stocks.

• 1:09:26Chamath Palihapitiya?

  It's called pub peer. The problem is, if you go to pub peer and all of a sudden put your name out there as someone calling it out, your professional career inside a research institution is finished.

• 1:09:35David Friedberg?

  Right. If your job is to go and...

• 1:09:37Jason Calacanis?

  They're not heroes?

• 1:09:38David Friedberg?

  No, if your job is to disprove other people's stuff, you don't forward your career, right? I mean, it's a real challenge.

• 1:09:43Jason Calacanis?

  Those people should be heroes. Those are like bug bounty programs. They have to look at it like bug bounty programs in tech, or shorting stocks in...

• 1:09:50Chamath Palihapitiya?

  The problem is that this community is extremely small, highly specialized, and their impacts are enormous on all of society. But you can't replace them with somebody else very easily, because it takes an enormous amount of expertise. Like, if you read that science article... The amount of work, science took six months of due diligence before they even had the courage to put this thing out there. They had all kinds of different teams trying to prove what this guy had found before they were willing to put ink to this thing.

• 1:10:18David Friedberg?

  Yeah, when things are starting to feel like they're ultimately moving to market or getting to market, the more money starts to flow in. Another good example of this is Zymergen and Genco. Okay, so in the past week, Zymergen was acquired for $300 million. It was announced that they're going to be acquired by Genco Bioworks, both of whom are public companies. Genco went public at, I think, a $20 billion market cap as a SPAC a few months ago. Zymergen went public at, you know, $4 billion or whatever they went public at. Zymergen being acquired for $300 million comes off of them having raised a total of $1.5 billion of capital from many investors, including SoftBank, and in their IPO since they were founded in 2013. Both of these businesses do exactly the same thing

• 1:10:59David Friedberg?

  or similar things, which is pursue the industrialization of synthetic biology. Synthetic biology has been talked about, you know, or pursued for 20 years in an industrial setting. The kind of Gen 1 of synthetic bio companies was Amaris, Gevo, Keyor, Solizyme. These companies were all engineering cells. You change the genome or the DNA of the cells. You get those cells to make a product you want them to make. You put them in what's called a bioreactor and they make the product. You can make bioplastics, you can make animal proteins, you can make fuel. And so these, and you put sugar water in the tank. So you're programming the organism to make stuff for you. And there's a lot of technical challenges, right? How do you change the genome? How do you get it to be more productive? What are the environmental conditions of the bioreactor? How do you scale this thing up and so on? And so many

• 1:11:43David Friedberg?

  of them had early-stage proof points and then extrapolated out that this is going to work at scale. So all the Gen 1 companies largely failed. Gevo, Keyor, Solizyme, they were all trying to compete with the price of oil and they lost. And so they could never actually, the science worked in the lab, but getting it to a big scale, there was a million things that went, that suddenly were kind of proven or disproven along the way. And they all kind of pivoted and became cosmetics companies and kind of did high-end food and other stuff. And then Ginkgo and Zymergen were kind of Gen 2. They were like, "We're going to reduce the cost, improve the timescale of these synthetic biology programs." And they started using industrial robots and arms. Zymergen made a bunch of kind of strategic errors where they were like, "We're going to make the products and design the organisms." So it took a lot more money, a lot more time.

• 1:12:28David Friedberg?

  And as they kind of stepped up and tried to scale up, turns out a lot of the things that they believed to be true weren't quite true. But the CEO did a great job selling the story. Josh Hoffman. He went out for years and he told everyone, "You know, we're going to kind of create this factory and we're going to make everything in the world using biology. It's going to transform the world."

• 1:12:46Jason Calacanis?

  You've talked about this. Is it a true story?

• 1:12:48David Friedberg?

  Yeah. And so, look, so much of the fundamentals are true. But the industrialization, the amount of capital these guys raised and what they promised they would deliver on when, turned out not to quite beat the economics, not to quite get there. And the market decisions they made about what products to go after, how quickly to scale up, building their own facilities, there was just a lot of strategic errors. And I think the storytelling got ahead of where the business was. You know, we saw this a lot in other businesses in the past years. We've talked about crypto and other markets. But these were really key examples because the science is so compelling and the narrative is so compelling. And if it's right and if it works, it changes the world. And I think the same was true of amyloid beta and Alzheimer's. Everyone wanted it to be true. SSRIs, everyone wants there to be a cure for depression, that you take a pill and you

• 1:13:33David Friedberg?

  solve depression. Everyone wants to, you know, have a drug that you take and it ends Alzheimer's. Everyone wants to print all the world's products in a factory using cells. But there's a lot more to it. And as you kind of get through the nuanced 10 to 20-year cycle of science, moves to technology, moves to industry, those stages are wrought with errors and issues and ultimately may not actually yield what we expected it to yield. And those stories start to fall apart. And that's what happened with Zymergen. They're getting bought for nothing.

• 1:13:58Jason Calacanis?

  Well, we look back on this, Friedberg, in 20 years and say, "Hey, yeah, these things were total train wrecks. They flipped the car." But it was a step in the right direction. And yeah, that was...

• 1:14:07David Friedberg?

  100% step in the right direction.

• 1:14:08Jason Calacanis?

  We burnt that capital, but you know, something will be built on top of it, just like mainframes or mini-computers to smartphones.

• 1:14:14David Friedberg?

  The first system of, call it synthetic biology, recombinant DNA, where we took DNA from one organism and we put it in a microbe to make stuff for us, was Genentech in 1978. Prior to 1978, the way we got insulin is we actually processed pig parts. So it would take like, you know, hundreds of kilograms of pig parts to make just a few grams of insulin. And Genentech took the DNA for human insulin and they put it in a bacterial cell and they made human insulin in a bioreactor. And that really kind of ushered in this era of, you know, industrial synthetic biology that all of these companies kind of followed suit to do in different markets. But remember biologics, the entire pharma industry and biologic drugs is all made this way.

• 1:14:57David Friedberg?

  We take the DNA to code for certain antibodies or proteins. We put it in microbes and those microbes make those products for us. That biologics drug industry is a $350 billion annual revenue industry today. And so it works. It's just a matter of when and what the right products are. Industrial enzymes, $25 billion annual revenue today. So there are markets that are working. It is working, but this whole like, we're going to change the world overnight, isn't really, you know, true. And so these stories catch up to us. And I think we've seen this where I call it science meets money. You know, money usually wins and the science isn't quite there yet. And so we've seen this.

• 1:15:34Jason Calacanis?

  The Genentech story is amazing. I mean, Tom Perkins from Kleiner Perkins fame, like willed that company into being and they, yeah, it's pretty amazing how in the old days of venture capital, they basically built these companies like you're doing today for your work in like a production board model. He basically incubated Genentech and then surprised the world with like, hey, we have synthetic insulin here. It was like truly revolutionary moment for Silicon Valley.

• 1:16:00David Friedberg?

  There isn't a single material or food or fuel or product that we ultimately won't be able to make using synthetic biology. It's just a matter of how do we get from here to there? And the storytelling kind of gets you a bunch of money and then you get ahead of your skis and then boom, you fall down. Same happened in Alzheimer's, same happened with SSRIs. And I think we'll see this happen a lot, but like when science gets exciting, a lot of money gets behind it and sometimes it can kind of, you know, get ahead of its skis and fall down.

• 1:16:27Jason Calacanis?

  And Sax, how excited are you for this revolution in set of biology?

• 1:16:33David Friedberg?

  Sax is an investor with us in one of our companies in synthetic biology. He may not remember, but he's got some money. I won't name the company, but he's got some money.

• 1:16:40David Sacks?

  Oh yeah, how's that doing?

• 1:16:43David Friedberg?

  Did you fall asleep in the board meeting?

• 1:16:45David Sacks?

  No, we're not on the board. We're passive. Is that the one we brought to you, Friedberg?

• 1:16:50David Friedberg?

  Yeah, well, I, it was three people brought, but I've known them since they were small. But yeah, I,

• 1:16:55David Sacks?

  No, there was a deal that came in that looked interesting, but it was a little bit out of our area. So we went to Friedberg with it.

• 1:16:59David Friedberg?

  But it is, it is an interesting business because these guys provide a tooling service to other Cymbio companies. And so it's a recurring revenue business.

• 1:17:06Chamath Palihapitiya?

  Yeah.

• 1:17:07David Friedberg?

  Yeah, it's a picks and shovels. Exactly. Yeah.

• 1:17:08David Sacks?

  Yeah, it was very SaaS like in that regard.

• 1:17:11Chamath Palihapitiya?

  Like a babushka doll of nerds.

• 1:17:13David Sacks?

  Yeah.

• 1:17:13Jason Calacanis?

  Unbelievable. All right. So we've broken, Sax is awake. Okay.

• 1:17:17David Sacks?

  Well, we're talking about an area where, you know, I'm not going to be able to contribute a lot to the discussion of SSRIs. I'm not going to pretend to know.

• 1:17:24Chamath Palihapitiya?

  I'm just a consumer. I'm not, why do I know? I just buy it.

• 1:17:30Jason Calacanis?

  Sax, have these SSRIs helped you in any way with your depression about Biden? No? Okay.

• 1:17:36David Sacks?

  The story that I think kind of fits with everything we're talking about this week.

• 1:17:41Jason Calacanis?

  Yes, we wrap here. Seventy-five minutes in, yeah.

• 1:17:43David Sacks?

  Is, uh, there was more, there were more stories this week about this cynical ploy by the Democratic Party to fund MAGA candidates. No, hold on. We talked, we talked a little bit about this last week, but they spent, you should be really opposed to this, J Cal.

• 1:17:59Jason Calacanis?

  I, I, yeah, listen, as an independent, I think it's gross. I am an independent.

• 1:18:05David Sacks?

  You're an independent and only votes for Democrats, so.

• 1:18:07Jason Calacanis?

  Not true. Not true. I'm going to vote for Liz Cheney for president, I think. Liz Cheney or Bezos. Those are my two choices.

• 1:18:12David Friedberg?

  Have you ever voted for a Republican candidate for any office ever?

• 1:18:15Jason Calacanis?

  I, yeah, I have. You have? Really? Yeah, yeah. I, people, I, I'm a moderate and I don't feel like.

• 1:18:22David Sacks?

  Who? When?

• 1:18:22Jason Calacanis?

  I voted for, um, who did I vote for?

• 1:18:25David Sacks?

  You were about to say Reagan? Were you about to say wrong Reagan? You were too young to have voted.

• 1:18:28Chamath Palihapitiya?

  Patrick Moynihan. Patrick Moynihan.

• 1:18:30David Sacks?

  He was a Democrat.

• 1:18:31Jason Calacanis?

  It's been a long life, but I did, I did vote, I remember, for Republican and when I lived in New York.

• 1:18:35Chamath Palihapitiya?

  David Sacks has a look on his face that says, finish your stupid banter so I can go on my monologue.

• 1:18:40David Friedberg?

  Okay, go, go Sax.

• 1:18:41Jason Calacanis?

  Hold on. Henry Belkaster in three, two, go.

• 1:18:44David Sacks?

  No, I don't, I don't really have a monologue on it, but I just think that this is, this is a pretty amazing story that you've got Democrats spending almost $15 million this primary season boosting MAGA candidates.

• 1:18:55Jason Calacanis?

  Yes.

• 1:18:55David Sacks?

  Um, at the expense of moderate GOP candidates.

• 1:18:58Jason Calacanis?

  Perfect. Let's get the crazies in there.

• 1:19:01David Sacks?

  Yeah, I mean it's

• 1:19:02Jason Calacanis?

  They're easier to beat, right? And that's the theory. If you get a crazy

• 1:19:04David Sacks?

  That's the theory, but in a, in a year

• 1:19:06Jason Calacanis?

  You get a MAGA crazy, yeah.

• 1:19:07David Sacks?

  In a year in which you get a red wave, it's really dangerous. And it totally undermines what the Democrats are saying in their January 6th committee hearings.

• 1:19:17Jason Calacanis?

  It's completely cynical. I agree.

• 1:19:20David Sacks?

  You can't, you can't on the one hand say

• 1:19:21Jason Calacanis?

  It's as cynical as backing Trump.

• 1:19:23David Sacks?

  You can't on the one hand say that we're facing an unprecedented existential crisis for our democracy, and then on the other hand be giving money to the very same people you're saying are the threat to democracy. It makes no sense. It just shows that the whole

• 1:19:37Jason Calacanis?

  Both sides are completely cynical backing anything that is toxic.

• 1:19:39David Sacks?

  No, you're, you're, no, no, no, no, you're, what you're saying, you're trying to both, you're trying to both sides it. You're trying to engage in both sides. No, but the difference here is that, that there is, this is, I'd say partisan political gamesmanship. But the point is, you can't on the one hand be engaging in ordinary partisan gamesmanship while you're saying that democracy faces an unprecedented threat. That's the disconnect.

• 1:20:04Jason Calacanis?

  No, no, I get that. What do you think about Liz Cheney? What do you think about Liz Cheney? I'm curious.

• 1:20:09David Sacks?

  Well, I think

• 1:20:10Jason Calacanis?

  Would you vote for her if she was a nominee?

• 1:20:12David Sacks?

  She's a warmonger, just like her father. She's like, she's basically Darth Vader 2.0. So that's my biggest problem with her is, no, I would not, I would not vote for her.

• 1:20:21Jason Calacanis?

  Too much war, okay.

• 1:20:22David Sacks?

  There's not, there's not, there's not a war she doesn't want to get us involved in. And there's not a country she wouldn't try and impose democracy at the end of a barrel, okay? So that's why I don't like her. But to your point, Democrats say they want to work with more Republicans like Liz Cheney. But if you look at who they're donating money to, they're donating money to support

• 1:20:42Jason Calacanis?

  It's crazy.

• 1:20:42David Sacks?

  The MAGA election denier against every single Republican who voted for impeachment, okay? So you look at like the specific races, um

• 1:20:51Jason Calacanis?

  It's completely cynical and it's just about winning, just like the Republicans.

• 1:20:55David Sacks?

  Just to give you one, one example, Democrats, they gave, they launched $450,000 of ads to take out a Grand Rapids Congressman, Peter Major, who also voted for Trump's impeachment.

• 1:21:07David Sacks?

  They did this with a Republican in California, David Valladell, and just on and on. So you've got, on the one hand, you've got Democrats saying that this is an unprecedented threat to democracy. They want to work with more reasonable Republicans who aren't denying the election, while at the same time trying to basically fund the campaigns of the MAGA candidate.

• 1:21:30Jason Calacanis?

  Yeah, the reason they're doing it, obviously, is if you fund one of these maniacs, then they're easy to beat. So they're trying to serve up somebody who's an easy candidate to beat. I get the strategy. Do you think it's an effective strategy?

• 1:21:41David Sacks?

  I think it's a very dangerous strategy, because, listen-

• 1:21:43Jason Calacanis?

  But is it effective, was my question. Is it effective? Do you think it'll be effective?

• 1:21:47David Sacks?

  No, I don't think so, because this year, I think this November, is likely to be a wave election. And when you get a wave election, the specific candidate matters less and party matters more. So you could get some of these crazies swept into office. So I think it's a cynical and counterproductive strategy. And you say that Republicans do it, too. I can't remember any example of Republicans ever doing this.

• 1:22:09Jason Calacanis?

  Well, I think Trump itself is, like, supporting Trump is the-

• 1:22:12David Sacks?

  I can't, I can't remember, I can't remember a single time ever where Republicans have basically funded, hold on, have funded the Soros candidate.

• 1:22:20Jason Calacanis?

  The audience loves it, Chav.

• 1:22:23David Sacks?

  I just think this is very stupid and dangerous, but listen-

• 1:22:24Jason Calacanis?

  Let me ask you a question, Chuck.

• 1:22:25David Sacks?

  It's of a piece, listen, it's of a piece, okay, it's of a piece with the administration claiming we're not in recession, trying to redefine recession now that we're in one. It's of a piece with Joe Manchin all of a sudden calling the slimmed-down BBB, the Deficit Reduction Act, after saying that it would increase the deficit. And the media is not holding these guys accountable. That's why they're doing it. Politicians, hold on a second, politicians are going to be as dishonest as the media allows them to be. And the media's not holding them accountable.

• 1:22:52Chamath Palihapitiya?

  Conan O'Brien, Conan O'Brien kept the White House honest. He tweets out, "The White House now says it's only a recession if you see a salamander wearing a top hat."

• 1:23:00Jason Calacanis?

  Absolutely.

• 1:23:01Chamath Palihapitiya?

  The comments, the comments are the best. One guy's like, "What about a rabbit wearing a pancake?"

• 1:23:11Jason Calacanis?

  But let me ask you a serious question.

• 1:23:12David Sacks?

  But Jake, seriously, going beyond just the specifics of the political issue, I think we really have a problem with the media class. I mean, the media is carrying water for these Democrats because they agree with the ideological agenda. We do not have an honest media who's willing to hold the party in power accountable.

• 1:23:28Jason Calacanis?

  Given what you've said about being disgusted by like the, you know, denying, you know, this voter fraud conspiracy stuff by Trump or whatever, if Trump wins the nomination, which I think he will, how are you going to be able to, when we're on this show a year from now and Trump has the nomination, or, you know, 18 months from now, whenever it is, that he locks it up, and he will lock it up if he runs?

• 1:23:51David Sacks?

  I don't think so.

• 1:23:52Jason Calacanis?

  So if he does, though?

• 1:23:53David Sacks?

  I don't think so.

• 1:23:54Jason Calacanis?

  Would you conceivably be able to back Trump for a second term? Would you be able to come on this program and say, I back Trump as a Republican? Because you don't want to vote for a Democrat. What would you do? Just not vote? Because you don't like Trump. You said you would not support him.

• 1:24:09David Sacks?

  Listen, politics is always a choice of the lesser of two evils. There are a lot of...

• 1:24:14Jason Calacanis?

  So you would vote for Trump?

• 1:24:15David Sacks?

  So I hope I'm not in that situation. Listen, I...

• 1:24:16Jason Calacanis?

  What would you do?

• 1:24:17David Sacks?

  Listen, the election that America does not want in '24 is Biden versus Trump. I think the race that they want, I think the choice they want to make is actually DeSantis versus Newsom. That's the choice I'd like to make. So, look, I'm on the DeSantis train. That's who I'm supporting for '24. You know, if it ends up being something different, we can talk about it then.

• 1:24:38Jason Calacanis?

  If it was Bezos, DeSantis, what would you do? Would you vote for Bezos or DeSantis? You go DeSantis, really?

• 1:24:43David Sacks?

  Yeah.

• 1:24:44Jason Calacanis?

  What about you, Chamath? Would you go Bezos or DeSantis? Who would you vote for? Bezos or DeSantis?

• 1:24:49Chamath Palihapitiya?

  I, Bezos or DeSantis? Hmm. Well, that's a tough one. Probably DeSantis.

• 1:24:55Jason Calacanis?

  Okay, Friedberg, Bezos, DeSantis? I'm good. I'm going to sit this question out. Let's keep going. Okay, all right, everybody. There you have it, everybody.

• 1:25:01David Sacks?

  It's a dumb question, Jakeout, because Bezos is not running. I mean, and honestly, the fact that people were even discussing that...

• 1:25:08Chamath Palihapitiya?

  Well, the practical reality is, he's a thought experiment. No, but his thought, but the thought experiment, the reason why I would go DeSantis is at least he knows how to play the game of politics. Bezos would just, in a matter of a week, be like, why did I do this? I had the best life in the world.

• 1:25:20Jason Calacanis?

  Exactly. There's just no way.

• 1:25:21David Sacks?

  It's a stupid idea.

• 1:25:22Jason Calacanis?

  He is living his best life.

• 1:25:24David Sacks?

  Listen, Jacob, Bezos had two tweets criticizing the administration on inflation, and you're like, "He's running for president, he's running."

• 1:25:31Jason Calacanis?

  No, no, no, there's other reasons.

• 1:25:32David Sacks?

  Come on, it's such a clown.

• 1:25:34Jason Calacanis?

  He bought the Washington Post, he bought the biggest house in DC, and he gave that $10 billion climate page. I think those are all little cards that you could check boxes. And if he writes a biography...

• 1:25:46David Sacks?

  Bezos probably has houses all over the world, doesn't mean he's running for president of those countries, come on.

• 1:25:51Jason Calacanis?

  I'm just saying, you're just scared. You're scared of the Bezos presidency. You know that he would roll over DeSantis. He would roll DeSantis.

• 1:25:59David Sacks?

  Even if Bezos were dumb enough to run for president, I think he's too smart to do that. The Democratic Party would never nominate him. That's not...

• 1:26:05Jason Calacanis?

  Why? He wouldn't pass like some purity test because of unions?

• 1:26:08David Sacks?

  Look what happened to Bloomberg. I mean, listen, don't get me wrong, I'd love to see a candidate like Bloomberg or Bezos nominated by the Democratic Party because they clearly understand economics, right?

• 1:26:17Jason Calacanis?

  Would it be a master stroke by the Democratic Party to embrace a moderate?

• 1:26:20David Sacks?

  I would like to, I would love to see a candidate like that. But look at, look what happened to Bloomberg. Bloomberg spent $100 million and he lasted to the first question of the first debate.

• 1:26:29Jason Calacanis?

  Yeah, they knocked him out.

• 1:26:30David Sacks?

  The first question of the first debate. And then, you know, Elizabeth Warren knocked him out by just basically calling him a billionaire, and he's there stunned, he had no answer.

• 1:26:38Jason Calacanis?

  Terrible, yeah, he did terrible, terrible. But, I mean, it would be a master stroke if they went with a moderate. You know it. All right, everybody, for David Sacks, Chamath, and Friedberg, I'm Jay Cow. We'll see you next time on episode 90. Love you, boys.

• 1:26:51Chamath Palihapitiya?

  Love you.

• 1:26:52David Sacks?

  Back at you.

• 1:26:53Jason Calacanis?

  Love you. Taxi pool.

• 1:26:56Speaker 04

  We'll let your winners ride.

• 1:26:59Jason Calacanis?

  Rain Man David Sacks.

• 1:27:03Speaker 04

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

• 1:27:16Speaker 04

  Besties are gone.

• 1:27:19Speaker 04

  That is my dog taking a piss in your driveway.

• 1:27:27Chamath Palihapitiya?

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

• 1:27:35Speaker 04

  What? You're the bee. What? You're the bee. What? You're a bee. Bee? What? We need to get merch.

• 1:27:49Speaker 04

  I'm going all in.