Doge, Bitcoin, NFTs, and Capital Gains: Ranjan Roy and Can Duruk of Margins Demystify Our Economy

Today's economy is a wild ride, and it's time to demystify it with Ranjan Roy and Can Duruk from Margins. Consider the following: Doge, a joke cryptocurrency, seems to be minting new millionaires daily. NFTs, tokens that enable the buying and selling of digital art, are going for millions. Bitcoin's price is volatile, up $10,000 one week, down by the same amount the next. The overall market, meanwhile, is cranking. In this week's episode, we go deep into what's actually taking place, and discuss whether Joe Biden's proposed capital gains tax increase will bring an end to the party. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Alex Kantrowitz?

  This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay?

• 0:43Alex Kantrowitz?

  Akash is an open cloud that provides easy access, flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for a free consultation. That's akash.network/alex for a free consultation.

• 1:14Alex Kantrowitz?

  Hello and welcome to the Big Technology Podcast, a show for cool-headed nuanced conversation of the tech world and beyond. Joining us today are two friends of the podcast, Ron Janroy, a return guest who helped us break down the GameStop madness a couple of weeks ago. Don't worry, the economy has calmed down and is totally rational now. And John Duruk, his co-author, co-host at Margins, one of my favorite financial and tech newsletters, which you should all subscribe to if you're not already. Definitely worthwhile. John also is starting a new company. He says on his websites, it's about textiles, but word on the street is it's about software. So maybe we can get him to tell us a little bit about that.

• 1:56Alex Kantrowitz?

  Although, John, you're more than willing to, you're more than welcome to keep that under wraps if you'd like to. You gonna give us a scoop here off the bat?

• 2:04Speaker 01

  Um, sure. It is something creative.

• 2:08Alex Kantrowitz?

  Okay.

• 2:09Speaker 01

  So I think that's like, that's. So I mean, I think the way we describe it is like more openly is that we're kind of working on a new creative medium. It is not audio. It is not blockchain. So I can kind of like rule out a couple, uh, you know, usual suspects.

• 2:24Alex Kantrowitz?

  Yeah.

• 2:25Speaker 01

  But it's a, it's a cool creative medium.

• 2:26Alex Kantrowitz?

  And, and, and last time Ranjan was on, we talked a little bit about his background as a Forex trader. Let's talk about yours quickly. You've worked at places like Uber. You're from Turkey. Tell us a little bit about yourself before we jump into our conversation.

• 2:44Speaker 01

  For sure. Um, I don't know how much you want to go back, but basically, you know, I used to play.

• 2:49Alex Kantrowitz?

  Yeah, do it in like a minute or so.

• 2:50Speaker 01

  Sure, sure. I used to play a lot of video games. Um, and I think that's sort of how I got into computers. You know, I studied computer science, got into Silicon Valley before things ran haywire. My first job was at Dig. I don't know if, you know, your readers or listeners remember Dig.

• 3:07Alex Kantrowitz?

  We know Dig.

• 3:08Speaker 01

  Yeah.

• 3:08Alex Kantrowitz?

  We dig Dig.

• 3:09Speaker 01

  Yeah, you do. But, uh, and then since then, you know, I kind of, you know, worked at companies, small and large. My like last big, big gig was at Uber. You know, I worked on like a couple of, a couple of different things. Then I took a year off from America, went to Singapore, uh, did some business school. The same place like Ranjan went, which was actually kind of like a weird coincidence. And then came back. Uh, it was around when I was in Singapore, Ranjan and I started Margins. And then that took a life of its own. And then now, you know, I run a small company.

• 3:41Alex Kantrowitz?

  Great. Ranjan, welcome back.

• 3:43Speaker 02

  Glad to be back.

• 3:45Alex Kantrowitz?

  You're three hours after your second vaccine. Are we allowed to say that on air?

• 3:49Speaker 02

  I just got my second vaccine. So from, from what I've heard from everyone, it takes about 24 hours for it to hit. So hopefully, hopefully we things go smooth.

• 3:59Alex Kantrowitz?

  We can get through this conversation. Okay.

• 4:02Speaker 02

  I'll raise my hand if anything goes bad.

• 4:04Alex Kantrowitz?

  Yeah, yeah.

• 4:05Speaker 01

  Which one did you get, by the way?

• 4:07Speaker 02

  Moderna, Moderna. Okay.

• 4:11Alex Kantrowitz?

  Yeah, and they just reauthorized Johnson and Johnson, although it'll be a couple of days old by the time this airs, but exciting time, progress, we're making progress. Okay, so Ranjan, let's talk about some finance stuff before you pass out on us. So the Biden administration has, last time you were on, we were talking about the GameStop madness, zero interest rate policy, and how the government had basically cleared the way for speculative investments because, you know, essentially, the idea is you're not going to make a lot of money with safe investments, so you just go to the next level of risk, and so on and so forth. Well, now, after people had put so much money in things like Bitcoin, and Dogecoin, and

• 4:51Alex Kantrowitz?

  NFTs, and just basically gone wild on the stock market, the Biden administration seems to be interested in increasing the capital gains tax to pay for some of its new programs. So can you share a little bit about what's going on there, and then what it might mean for our wild roaring speculative investment economy?

• 5:14Speaker 02

  Yep, so a big thing for me over the past number of years has been, what could possibly cause this to end? Because every single little thing that I think might...

• 5:27Alex Kantrowitz?

  What's this, by the way?

• 5:29Speaker 02

  This being the mania, this being what used to just kind of be Uber, no offense, John, but losing a lot of money yet still IPOing into a $50 billion company. You know, it started there, WeWork beforehand, then morphing into slightly more absurd things, and then now we're at the point that Dogecoin...

• 5:48Alex Kantrowitz?

  So we're living in a market unhinged from, yeah, unhinged from fundamentals.

• 5:52Speaker 02

  Unhinged is almost a generous term, I feel, but, but the thing is, so raising interest rates always seemed to be the thing that would prick this bubble. And I do think in like December 2018, when the Fed started to hike again, there was this big freakout, stock market fell, and then everything came right back. So this time around...

• 6:16Speaker 02

  It was very interesting to me, but the Biden capital gains tax gets announced. You know, it seems like things are moving more away from the neoliberal utopia that they've been over the last two decades. But I didn't really connect that to the mania and whatever specific speculative bubbles there are. You know, again, that's it's taxes, it's not fiscal policy. But then there's one Bloomberg article about connecting the recent drop in the price of Bitcoin to the capital gains tax increase. And again, this hasn't passed. This very well could not pass. If it does pass, it will happen.

• 6:55Alex Kantrowitz?

  Yeah, and what is it exactly?

• 6:57Speaker 02

  The capital gains tax will raise, the maximum capital gains tax will raise from 20% to I believe it's like 43.4% all in. Now, just to be aware, I had always thought the max, the long-term capital gains tax was 15%. I did not realize if you report over, I think it's $500,000 income, it's actually 20%. Perhaps some disclosure there, but uh.

• 7:22Alex Kantrowitz?

  And this is all money that you're making by selling your equities at a, like your stocks and equities at a gain. So you pay a tax on.

• 7:30Speaker 02

  Selling your assets is the key term because Bitcoin would fall into there. And that's exactly the key term.

• 7:38Alex Kantrowitz?

  Ah, okay.

• 7:38Speaker 02

  So, so, so again, Bitcoin's down, I think, what is it, like 8, 10%? Again, not that crazy, but if it is, they think about the average person who's up over a million dollars in Bitcoin, probably, you know, to their credit is a hodler and has been in from very early and almost the entirety of that sum is a capital gain. So if you sell that and you're going to lose 20% of that versus you're going to lose 44% of that, that's a big difference. So suddenly, you know, the utopian dream of I'll hold this forever and it'll go to millions and millions of dollars versus 50K, you at least start to think, wait, something can change. And if it's going to 43%, could it even go higher?

• 8:23Speaker 02

  Could it even? So suddenly realizing that into US dollars becomes a slightly more urgent thing. So, so maybe there's some percentage of people who actually sold Bitcoin for the purpose of worrying about the taxes going up.

• 8:40Alex Kantrowitz?

  Yeah, and is that a commentary, is this a commentary on Bitcoin in particular? Or is it something that could, you know, I mean, if you look at Bitcoin as a speculative investment, you could potentially look at like the rest of the market as having some speculative premium over it. So is this something that could end up like reining in on the parade of Bitcoin specifically? Or do you think it could have market-wide effects?

• 9:06Speaker 02

  I definitely think if that thesis is actually true, that this simple announcement is enough to kind of start to prick Bitcoin a bit, it can definitely have market-wide ramifications. Again, something like what could prick this bubble? You never know what exactly it will be. And again, normally a rise in the capital gains tax, I would not necessarily equate to something that would, you know, quell a speculative bubble. But in this case, I mean, maybe that's what it is. If everyone starts to slowly pull out with the worry that their 20% will turn to 43.4% on some massive gain, that's already life-changing money for them. I mean, then you start, you start to want to get out. And

• 9:50Speaker 02

  the more people who start to want to get out of everything, you know, the downward spiral begins. But again, I've been wrong on many of these thoughts about what could stop the mania. And now again, Doge is at like 0.34, whatever it is, and NFTs are selling. So, so who knows?

• 10:10Alex Kantrowitz?

  Yeah. And is this a signal that just about how, about the mania around the market? Like, if Bitcoin can lose, can go from like in the $60,000 range per coin to less than 50, just on an announcement that there might be a capital gain. And we know the US Congress, all right, they don't pass stuff. So, you know, is this just, you know, a sign of like how skittish people are because they've ridden this wild roller coaster that's unhinged from fundamentals? And do you get the sense that there's a latent feeling among people who have ridden this all the way to the top that it could all just blow up at any second?

• 10:50Speaker 02

  I people in this current market don't know how to take profit. That's the main thing because no one's had to yet. You haven't had to. So, so, and that's a skill unto itself. That's like a major skill in any kind of trading.

• 11:05Alex Kantrowitz?

  And taking profit means just selling at a gain and saying, I'm out now.

• 11:10Speaker 02

  Selling at a gain and saying, I'm out. Exactly. Again, like the entire thesis of diamond hands, I'm going to hold till the end of time. It's, I mean, it's saying that I will never sell no matter what, which is the exact antithesis of how you invest. So, so as long as that's the case, we, I mean, so much of the speculation that you see so many, even the way like equities and Robin Hood or whatever, public.com and all these things are marketed, it's towards the idea that democratizing finance is good because you, you, you know, like you make money no matter what. Everyone makes money and you have not been allowed to make this money. So I'm going to help you make this money.

• 11:52Speaker 02

  That, but with the assumption that there's no risk, that nothing ever goes down. So, so to watch things go even down a little bit, it'll be very, very interesting to see. But the other, I actually had forgotten about this. I looked at a chart. Do you remember where Bitcoin was in October 2020, just six months ago?

• 12:13Alex Kantrowitz?

  Was it like, like, I'm going to guess like eight to $10,000 range?

• 12:18Speaker 02

  10K. Yep, that was it. 10K. I, I honestly like, I think I've like blacked out during this entire last six months because maybe it's not the vaccine shop, but I, it, I had forgotten it was at 10K six months ago. So again, there's no reason it can't go back there in the next six months. And all of this NFT craze, all this has just hit during this insane rise up. So all the kind of like technical rationalizations and explanations of everything, everything's happened again in the last few months when it's on this insane ride up.

• 12:55Alex Kantrowitz?

  Right. And I was, we're going to get to NFTs in a moment and I want to talk about Dogecoin. Can't let you guys off the show without talking about Doge. But just the last thing about Bitcoin and Ron, John, you've written about this and we've spoken about it. It seems like it's largely functioning as a speculative asset because you can't, you know, it's a currency at the end of the day. And yeah, of course, it's like scarce, like gold, right? There's only a certain number of, or even more scarce, right? There's only a certain number of Bitcoins. But people aren't using it. I think your thesis is in order for it to be actually valuable, people have to use it to transact. And maybe it's because of this volatility, or maybe because it's been a speculative asset. They simply are not

• 13:39Alex Kantrowitz?

  using it as a currency. So can you elaborate on that a little bit? What do you mean by that?

• 13:44Speaker 02

  Well, if you will allow me to then go directly into Doge, because I think this kind of like, thank you.

• 13:52Alex Kantrowitz?

  I will not prevent Doge conversation on this podcast, but you have to explain a little bit what Doge is because I know what it is, but I'm still trying to wrap my head around the fact that it's become what it's turned into. So the floor is yours.

• 14:04Speaker 02

  All right. So Dogecoin and was started, Billy Marcus is one of the co-founders. I was listening to him on a podcast recently. But again, it was, it was made as a complete joke. Doge is an internet meme, a Shibuiino. Is that the name of the dog? Shibaiino, yeah. Shibaiino? Japanese fox.

• 14:23Alex Kantrowitz?

  Very cute dog.

• 14:24Speaker 02

  Yeah, it's a very cute Japanese fox, as John said. And so, so again, the entire coin was made as a joke. And, and, and while Bitcoin supposedly derives its value from its scarcity, Doge can be issued infinitely, I believe. It's like, it's some, I don't know if it's an insane number, if it's actually infinite, but the idea, everything is the opposite of why Bitcoin is supposed to have value. So Dogecoin, this joke currency, has gone up. Who's it like? I mean, the numbers are almost like there's, they're decimals of decimals. It's, was it point zero zero zero six? But now it's around point three?

• 15:05Speaker 02

  Which is, I believe I'd read, if you actually had bought Doge at any point over the last seven years, it's actually been an even better investment than Bitcoin. It's an astronomical rise in price. But the thing is, you don't hear the crypto community celebrating this necessarily, especially the serious crypto community, the Coinbase's, the Fred Wilson's, the people who are trying to say, no, like crypto and Bitcoin and Ethereum, these things have genuine value that will transform the financial system. Because Dogecoin has been positioned as a joke, yet everyone is making a joke out of it, but speculating on it and getting rich.

• 15:48Speaker 02

  So to me, that's actually the same way that Bitcoin has developed, and that's what's always troubled me. I've wanted to believe in it, but I've just never been able to really use it. Like, sure, Elon Musk said you can buy a Tesla with it, but even when you look into that, there's like, you take on the currency risk if you buy in Bitcoin, that when you buy it and when the car comes, if the price moves against you, you have to then pay that difference. Whereas if the price goes in your favor, Tesla keeps that difference. Like, it hasn't actually developed as a currency in any way, and no one uses it to buy things, really. So in the same way, it's just become this purely speculative asset with this beautiful

• 16:30Speaker 02

  story about utopian finance decentralization, and, you know, like, we're gonna get rid of the evil Federal Reserve, yet in a way, it's just behaved like Dogecoin. And Dogecoin going up reminds us of this other, like, example of just pure, beautiful speculative mania, just in all its absurdity.

• 16:50Alex Kantrowitz?

  Yeah, but Dogecoin actually went down a bunch after this capital gains announcement.

• 16:56Speaker 02

  I think-

• 16:57Alex Kantrowitz?

  Like, big time.

• 16:58Speaker 02

  Yeah, I think in the same, I think it was like 10, 15% or so.

• 17:03Alex Kantrowitz?

  Ah, okay, yeah. Let's talk a little bit about YOLO-ing. People in the GameStop sort of YOLOed their money in order to hammer the shorts. And YOLO is, you only live once, and it seems to be an investment thesis where it's like, well, screw it, the system isn't treating me well, so I'm just gonna YOLO my money into these insane speculative investments, stuff like Doge, and then hopefully it will go up. Is YOLO-ing playing a role here?

• 17:35Speaker 02

  I go back and forth on this, like this whole, the speculation is like a rage against the financial machine thing. I don't know. I mean, people like to make money. People like to have fun. Trading is fun. If you, if it's easy because everything's going up, it's even more fun. I think, I think a lot of financial media has loved to tell this story about and find, you know, these profiles about people who have grew up in the financial crisis and, you know, are using this new wave of mania to fight back against the Goldman Sachs of the world. But I don't know, I still feel a lot of this is more, I, I, I think, okay, I think it's twofold.

• 18:18Speaker 02

  I think, one, people just want to try to get rich. And if you see everyone around you making a ton of money, if your friend just made 500K on a joke coin of a dog.

• 18:29Alex Kantrowitz?

  Doge, yeah.

• 18:30Speaker 02

  Yeah, yeah, you're gonna, you're gonna feel like,

• 18:33Alex Kantrowitz?

  Feel like a loser.

• 18:34Speaker 02

  Yeah, like, why am I working for money? You're gonna feel like kind of a loser. But also, I do think, there's this idea that even the tech industry itself, the idea of like, you know, 25-year-old billionaires and 30-year-old billionaires, that whole way in the past where getting rich meant you had to slowly work your way up, and then at a certain point, you will achieve a level of financial stability or even success. I think the way the tech industry has developed, the idea that getting rich quick is a very feasible, reasonable goal, I think also does contribute to this again, that, you know, if everyone who's 35 is making in the millions, if all these people are, then why aren't I?

• 19:18Speaker 02

  I think that's also contributed to it as well.

• 19:21Alex Kantrowitz?

  Yeah. Did you guys see this article in the New York Times about how people have kind of like YOLO'd their careers and stepped off the career ladder and left six-figure salary jobs in order to, you know, sort of pursue non-traditional

• 19:41Alex Kantrowitz?

  Career paths or dreams or whatever. And you know, Kevin Ru's friend of the program who wrote the story was talking a little bit about how part of it is due to the fact that they've been able to save a lot during the coronavirus. And part of it is because they've seen people do stuff like, I'm going to put it words in his mouth, but like basically bet on Doge, become rich and starting to think that taking risks is a lot much better way to do things than actually following the system as they've been taught. I'm curious what you think about that.

• 20:10Speaker 02

  This one, I think, is a slightly longer explanation because I definitely read this story. Okay. If I don't want to necessarily jump right into NFTs, but I think that would be relevant here if we're just gonna check.

• 20:26Alex Kantrowitz?

  This is awesome. This conversation is just leading itself. It's the best way to pod.

• 20:31Speaker 01

  I have some thoughts after Ranjan about that piece, but I'll let him start.

• 20:35Alex Kantrowitz?

  Well, I, well, actually, John, let's start with you and then, and then we'll have Ranjan go with the NFT angle because that will set us off to a whole new discussion. I'm pretty sure. So.

• 20:45Speaker 01

  Yeah, I think, yeah, sure. I mean.

• 20:47Alex Kantrowitz?

  So YOLO, John.

• 20:48Speaker 01

  YOLO. Thank you. The funny thing is I contributed, I think, YOLO to Uber's lexicon because I was like, we need to YOLO this. And we're like working on a project. And at some point, there was this decision that was sort of like stuck. I'm like, guys, we need to YOLO like, and then I think that became a part of like Uber's lexicon, which I apologize for. But I think that piece was kind of interesting. But that thing, the thing that bothered me with that piece is, you know, after having made, you know, 300, 400 K a year, working in like one of those like big tech companies, or, you know, like even like series B, series C companies, it's, it seems sort of like unhinged from reality in a, in a different way. They're like, now like I've made in a couple of million, just

• 21:33Speaker 01

  basically just like, you know.

• 21:36Speaker 01

  Pushing pixels around, moving spreadsheets around. And then now it's my time to actually, like, I've discovered that there's more to life. I think a lot of people would like to discover that there's more to life. If you can kind of like, you know, have that sort of cushion, like financial cushion. So I mean, like, I guess I don't really have a lot of empathy immediately for people. Or like, oh, you know, after working for six figures, how this for years on end. It is my right to like, live this unsustainable life that not everyone want to live that life. I would want to live that life too.

• 22:09Alex Kantrowitz?

  Yeah.

• 22:09Speaker 01

  But it's just sort of like, kind of like, you know.

• 22:12Alex Kantrowitz?

  So they got rich off of some of these. Reminds me a little bit of the financial independence retire early.

• 22:19Speaker 01

  Fire.

• 22:20Alex Kantrowitz?

  Fire movement. I buy listeners, I gotta get the high priest of that movement, Mr. Money Mustache on the show one of these days. But I imagine that will be a fascinating conversation. But yeah, it has similar, similar parallels where it's like people who are like saying, I'm just gonna, you know, live life, but probably either came into some money.

• 22:44Speaker 01

  I think isn't that what most people want to do? Like I.

• 22:48Alex Kantrowitz?

  Okay, but John, let me, let me push back on this a little bit because yes, a lot of people want to do that. And a lot of these people will probably make it back into the system. But there is a way that our system here in the States for sure has a way of like keeping you on a treadmill. And, you know, milking the maximum amount of work for you, from you. And yes, compensating you well, but sort of presenting it as, as if there's no option but to remain in the system and climb the career ladder and essentially hand over, you know, your quality of life in,

• 23:27Alex Kantrowitz?

  in service of the system. And maybe this, maybe this is a good thing. Maybe I find it interesting that people are saying at some point, screw the system. I'm doing it my way, even though, you know, some of them might be privileged. Some of them might not have a chance to do that forever. But I find it kind of like a fascinating movement.

• 23:44Speaker 01

  I mean, I guess in my mind. Uh, keep removing yourself from the system after having benefited from its inequalities for that many years is not altruistic stance. Doesn't really, it doesn't really, you know. I think the, the more altruistic and the more beneficial to societal society thing would be to like, try to change the system for other people who haven't had the chance for all those years. So I guess that's like where my like, like lack of empathy comes from.

• 24:12Alex Kantrowitz?

  It's like becoming a Facebook critic after making all your money from the early days of Facebook and being like, this company is doing terrible things to society while meanwhile helping grow the thing from the very beginning.

• 24:23Speaker 01

  Yeah, exactly. I mean, like, why just give it back then?

• 24:27Alex Kantrowitz?

  Yep, give it back. Or find some middle ground. Versus, versus make even more money by being a Facebook critic. That's a good grift.

• 24:36Speaker 01

  I, I've, I.

• 24:38Alex Kantrowitz?

  Get taxed at forty three.

• 24:39Speaker 01

  I think, I mean, speaking of grift.

• 24:42Alex Kantrowitz?

  Get taxed at forty three percent.

• 24:44Speaker 01

  One of my good friends, we're discussing about like, I think in twenty twenty, like or twenty twenty one now. I think the fundamental thing is like, every business needs to have a grift angle, like what is, what is your, what is your grifts? And I feel like there's no business left then. Like if you're not doing, if you're not grifting, you're leaving money on the table. Cause there's like so much money. So you, every business has to have a grift. I haven't really figured out what our grift is with margins. Like we tried to do.

• 25:10Speaker 01

  Affiliate sales and stuff. I think we made like four bucks. So that grift hasn't worked out yet, but we'll, we'll figure it out.

• 25:16Alex Kantrowitz?

  Now that you mention it, uh, listeners, I want to tell you about big technology diet pills. Have you been trying to lose weight when struggling? Big technology diet pills developed with a proprietary formula will take care of all that for you. But you don't have to put in any of the effort.

• 25:33Alex Kantrowitz?

  I think that's how Alex Jones does it. Yeah, yeah, yeah. Algorithms will take, take it off. You'll be jacked and people will like you.

• 25:40Speaker 01

  Algorithms will take it. Yeah.

• 25:42Alex Kantrowitz?

  AI, AI. Could be a good grift. Just kidding. Hey, listen, FCC, that, that was a joke. It's not, it's not real. Okay. Don't, don't take me off of Apple Podcasts, please. Turn it to you, Ron, John. You're about to tell us about NFTs.

• 25:58Speaker 02

  Well, one quick note. Well, one quick note, I guess I would say leaving finance to go to media in 2011 was probably the most YOLO move ever in the in the in the vein of what John is talking about here.

• 26:13Alex Kantrowitz?

  I was selling ad tech and then went to media. I mean, I definitely made the wrong decision.

• 26:19Speaker 02

  So.

• 26:20Alex Kantrowitz?

  YOLO.

• 26:21Speaker 02

  Yep, YOLO, YOLO.

• 26:24Speaker 02

  All right. Okay, so so this New York Times article, again, around this whole movement of people, you know, giving up their cushy lives to go do something crazy. I and it was written by Kevin Ruse, the New York Times, who.

• 26:38Alex Kantrowitz?

  That's what you say when you're about to smack down. I'm loving it.

• 26:42Speaker 02

  But one thing I think he missed here, for those who don't know, the New York Times NFTed an article. And I guess to step back, an NFT is a non-fungible token. It is a crypto

• 26:58Speaker 02

  crypto asset that basically, I'm not even sure what exactly to call it, but but it basically allows you to add provenance to a piece of media or art or content. And then that can be traded. But again, so again, idea, you take an article, you say this article is now a security, the same as a stock, a share of Apple. And now we can all trade it together. If you think it's going to go up in value, you will buy it. The New York Times article that was NFTed was sold for $560,000. And again, all this means is the person who bought it has rights to it, ownership rights to it.

• 27:42Speaker 02

  Whatever that means. Again, we can all go read it on newyorktimes.com. It still lives on newyorktimes.com. But this one person can say they have ownership rights to it. So again, this is a whole other world that we can definitely get into right now. But specific to the New York Times, it was bought by, I believe it was 3F Music was the handle. But it's someone who is a collector of NFTs. It's a crypto investor. And I also, the thing that really caught my eye was the Beeple was this record setting of $69 million.

• 28:16Speaker 01

  Real dollars.

• 28:17Speaker 02

  $69 million.

• 28:18Speaker 01

  Well, it's not real per se.

• 28:20Speaker 02

  A digital art piece was sold for.

• 28:22Speaker 01

  Yeah, go ahead, go ahead.

• 28:23Speaker 02

  Well, this is the thing. It was also another crypto investor. It was a very early investor in Ethereum. And then you realize people, the people who are actually bidding these things up and buying them are people who just are sitting on huge gains of Ethereum, of Bitcoin in crypto. So here's one way you can transact that. But then this builds up such an interest that it drives up the price of that underlying currency, the Bitcoin and the Ethereum even more. So, so the New York Times issuing this NFT, a crypto investor spending 560,000 real dollars on it, now has pushed up the value of Ethereum. It builds so much hype.

• 29:07Speaker 02

  Kevin Roos is writing about it. And it inspires other people to want to go YOLO and like go do other things. And it's this, it's like the actual very act of the New York Times, writing this article, selling the NFT, it being bought by someone who's just trying to drive up the price of their own assets. It becomes effectively marketing for them. It's, it's, it's this amazing, self fulfilling Ponzi-esque thing. That's just, there's so many kind of like feedback loops working together.

• 29:41Speaker 01

  What is feeding money into this? Is it Zerp? Is it the zero interest that is kind of like feeding this machine? YOLO investing.

• 29:48Speaker 02

  Yes, YOLO.

• 29:49Speaker 01

  Anyway, so there's this Turkish, Turkish digital artist called Murad Puck. He's been sort of famous in the internet scene. He's the guy behind the Archilat's, like Twitter username. And he's been selling NFTs and then he sold a single pixel for a million dollars. Right. But if you kind of like go in like, how is this even possible? I mean, like, obviously someone paid for this. And then you kind of like look into the person who bought an NFT is another NFT person who made his money off of NFTs. And now you try to like, figure out like, okay, like, where is the dollar? Like, where is the, where is the input to the system? Because like Ryan John's point, it just feels like there's like a loop. But at the same time, this like, the circle is getting bigger and bigger. So like, something is feeding something into this.

• 30:34Speaker 01

  Like, there's, there's gotta be a money somewhere for people to be able to like, buy this stuff. So I don't know if it's just like, there's so much money coming in, or is it that like, no one is actually taking the profit out of the system? That like, nothing is ever getting like rationalized. But it does seem wildly sustainable when you can literally sell a pixel for a million dollars. I mean, I'm very happy for him. Like, maybe like, you gotta like, do the grift while you can. Like, I just feel stupid. Like, I'm not like, grifting anything, but.

• 31:05Alex Kantrowitz?

  Ryan John, what's the, yeah, what's the answer? Where, where is all that money coming from?

• 31:09Speaker 02

  All right. So I think John said it. Until anyone is selling anything and actually trying to realize those dollars to buy something. This can all keep going. Again, the, the more I've thought about this. So first of all, there is so much money out there. I mean, for listeners, I mean, I was on the show earlier, talking about ZERP, zero interest rate policy, Federal Reserve. Keeping interest rates low to spur economic growth by just pushing more borrowing and money into the system. But now, even with the stimulus, that is just this huge flood of more money coming into the system. So, so already the system is awash in more money than ever.

• 31:55Speaker 02

  But again, when you start to think about it, like. The fractional banking system, just the idea that a bank can take $1, lend it out and make more money on it and create more actual dollars in usage in the financial system is a pretty nice thing that's helped drive economic growth and kind of is an underpinning of the financial system. I'm happy with and it works. But now if $1, actual US dollars starting somewhere, could have bought one Bitcoin back in 2011, which is now 50,000 US dollars equivalent, which then can split off into 20 different NFTs, which can then,

• 32:37Speaker 02

  you know, like there's so many screens showing graphs going up and to the right, showing such an increase in wealth. Yet, when people go to actually try to do something with that, and this goes back to my whole thing about when will people actually be able to use this wealth to do something other than just watch it on a screen? What happens? Because the moment people start selling, things move lower and then the downward spirals can begin. But up till now, and especially I would say, this has been exacerbated by the pandemic because when you can't actually do anything, the most fun thing to do is just watch that screen with your wealth going up. Because you're not traveling.

• 33:19Alex Kantrowitz?

  Yeah, it seems like a candidate. I mean, obviously, we've seen explosive growth, but it seems like a candidate for a crash, which we've talked about in the past.

• 33:26Speaker 01

  Yep. But at the same time, I've been.

• 33:29Alex Kantrowitz?

  Okay, both of you guys are like, don't anticipate that crash too soon.

• 33:33Speaker 02

  Again.

• 33:33Speaker 01

  I guess, I guess, I remember, you know, I had Bitcoins. I remember I was, I had quite a few, actually. And I was at a, I went into like a bodega or something in New York. And I remember on the TV, it's like Bitcoin price jumps up to $350. And I was like, I think it's time to sell. It is time to sell. So I sold whatever Bitcoins I had at like 350 and like made some money. This was when it was like Bitcoin was like 350. Now it's like, you know, 50,000. So I mean, obviously, like this doesn't make sense that like, obviously, it went from 350 to like 50,000 is going to go up again. I just feel like, I feel extremely uncomfortable. And maybe I can attribute that to like, you know, having lost that money that I could have

• 34:17Speaker 01

  made. Just like, it seems.

• 34:21Speaker 01

  I feel uncomfortable saying like it's gonna crash like people told said the same thing about like the tech stocks in 2015, 2016. It's like right about the crash like it hasn't like I don't know when it's gonna crash. I don't really know how you could like time the market anymore. So I'm not gonna go on record saying that it's gonna crash.

• 34:42Speaker 02

  I will say the more the weirder it gets every day, the stupidity has legs. It can keep going and we don't know where it's gonna stop. I mean, again, six, I remember, I think it was last October when Tesla split five to one. The they were openly saying that thesis was if the stock appears cheaper in terms of numerical value, more investors will want to get into it. Again, I was like, no, but that doesn't make any sense because the actual like value of that individual share has now been dilute, blah, blah, blah. Of course, I'm wrong. And it just that actually was an incredible driver of more people buying

• 35:23Speaker 02

  into it because $100, even if it's a much more diluted share seems cheaper than a $500 share. So, and that was in October. I mean, that was before pixels were selling for a million dollars and we were all hearing about Doge again. So I mean, again, maybe the capital gains tax increase starts to show a bit of a prick into this bubble, but it could get a lot, lot weirder. And I can't even fathom what that could look like, but I'm not counting anything out yet.

• 35:57Alex Kantrowitz?

  Yeah. Well, that's something I want to talk about after the break. So we'll look at weirder. Let's talk a little bit about the impact of the stimulus and something that you guys call the emerging marketification of the US economy, which Ron, you and I touched upon a little bit, but I want to expand upon a bit when we get back. So we'll be back here in a moment on the Big Technology Podcast. See you right after the break. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Copilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what Avpoint does. For 25 years, they've been the trusted layer

• 36:42Alex Kantrowitz?

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• 37:27Alex Kantrowitz?

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• 38:12Alex Kantrowitz?

  before they become real-world attacks. The link's in the show notes.

• 38:22Alex Kantrowitz?

  And we're back here for the second half of the Big Technology Podcast with my friends from the margin, Ron John Roy and John Doerr. So, Ron John, after we spoke last time, the US government, you know, the economy was already rip roaring and GameStop was, you know, going on its way to the moon. It's still pretty high, actually. I think it's in the 180s now in terms of its stock price. And into this insanity, the Biden administration drops $1.9 trillion, somewhere close to $2 trillion. I think it's the largest stimulus of its size into a growing economy, or the first time we've done a stimulus into a growing economy. And Ron John, you've mentioned that stuff has gotten weirder ever since. So I'm

• 39:07Alex Kantrowitz?

  curious if you can help us connect the dots here in terms of, you know, what that stimulus has done and whether it's helped spark more of this behavior.

• 39:17Speaker 02

  Yep. The past few weeks, or even months, have definitely, you know, like every headline that seems to kind of represent this mania has actually been popping up in real life. On one side, someone was telling me about taking their stimulus money and putting it into yield farming in crypto, which is its whole other thing. There was a really good Pachyma Cormick not boring newsletter about explaining what yield farming it is. But again, it's basically just making like 8 to 10% magically from crypto. But again, taking their stimulus money and putting it into that. I know multiple people, again, you

• 39:57Speaker 02

  know, my, I just turned 40 and friends of mine are that demographic moving into the suburbs. And the housing stories, the house buying stories I've been hearing, again, around in New York, around the DC areas of, you know, putting in an offer 20% above the asking price and someone coming in with an all cash offer well above that. This stuff is happening. And this is like, Made it well into my non-tech finance margins podcast circles. This is into the normal people now, even friends, my parents asking about Bitcoin. That did happen. I mean, we've, we've definitely expanded into that place where there's just so much money

• 40:42Speaker 02

  out there right now that, you know, where this could go, I think is still, it remains a question.

• 40:48Alex Kantrowitz?

  Right. And, and so let's get to this idea of the emerging marketification of the US. So I actually kind of, we talked about it and I haven't stopped thinking about it actually since we did, Ron, John, and I thought it would be a good moment just to pause on it because we do see the government sparking massive growth in the economy right now. And the question is, you know, whether that's sustainable, whether that's desirable and what the consequences might be. So let's get into it. What, can you tell us a little bit more about what it is and then we can dig in from there?

• 41:22Speaker 02

  Yeah, I mean, both John and I have kind of touched on this a number of times in a number of different ways, John being from Turkey as well, even me growing up, my parents being from India and kind of seeing how things operated. And it is this kind of mix of crony capitalism, economic policy, trying to push forward a certain type of thing, yet it having adverse consequences, income inequality being absolutely sky high and through the roof and just kind of a general sense of stasis where it's no longer like, you know, we can just accomplish and do anything, which I think is a uniquely American trait or was and more this kind of, I need to get. Yeah.

• 42:07Speaker 02

  I mean, and honestly, again, this is all of my family, my parents, everyone truly believes this, or at least believed it versus this idea that I need to just get what I can. I need to protect my people. I need to protect my family. I need to like, take as much as I can out of the system while I can. And I think, and it's again, it's, it's in the, we write a lot about this in the way tech companies behave and the way financial systems have developed, but it's just the, that utopian view of what America was that I think might have existed. At a certain point, but now we're all just trying to like still pretend exists. That definitely reflects a lot in the stuff we talk about.

• 42:50Alex Kantrowitz?

  Yeah, I mean, one of the things that that has really occurred to me in terms of like the system rigging. We had Alec McGillis on a couple of weeks ago. He wrote this book called Fulfillment about life. For basically not even life for workers in the Amazon fulfillment centers, but more just about the inequality that we have in the country and how it's a system that's that's essentially like you can fight against, but you can't beat in some ways. And you look at the differences in terms of education for the top, you know, a couple percent and economic opportunity. You know, you could be in a hedge fund or you can be, you know, working in a fulfillment center.

• 43:31Alex Kantrowitz?

  And it used to be you have a factory job, you're doing okay, you know, or you're in a bank, you're you're doing well, but you're not so much different than the person who's in that factory job. And now just the the changes have become kind of wild in the economy right now.

• 43:45Speaker 01

  Yeah, I mean, I think one thing that like Ryan John sort of like hinted at like crony capitalism too. What I can tell you, like, the reason why I came to the States when I came, which was in two thousand and six, was this like,

• 43:59Speaker 01

  even then, I think even like in two thousand and six or so, you sort of believe like, like, if you come to America and if you work hard, like it is sort of like a place where like it rewarded the hard work, like the system wasn't rigged. Because I think like in Turkey, there was this like sense of like, well, you know, like it is it is rigged to the core. There's no really like way out of it. Like you may, you kind of like may move within the bracket you're in. But like, that's that's basically where you are. And then when you come to the States, you'll be able to like, you know, all right, like work a bit harder. Like probably you're not going to become a billionaire, but you're going to make a decent amount of money. And I, you know, like, I guess like I've sort of like locked into some money by like having worked in technology and stuff, but kind of like, you know,

• 44:40Speaker 01

  Inserting myself like deeper into like the States, you do immediately realize it's like, well, you know, like this place is wildly unequal, unequal. And I think what they really comes down, like what they really impact, like what they really does to the society is like, no one trusts in there anymore. And then like you basically like, you know, let's burn the entire like environment so we can build Bitcoin, so we can have these even like less trust, like trust-based systems, like instead of like trusting the American government to do the right thing, like I'm just gonna like make sure I'm just gonna get my news from like some Twitter accounts, like instead of just like paying my taxes, I'm just gonna like put everything on like Bitcoin because screw the American government. Like now we have this like system that is like full of three hundred and fifty million people that don't work together.

• 45:25Speaker 01

  There's just like three hundred and fifty million people of individuals and there's nothing collective anymore in this country, you know. And then that just sort of like makes me like mad, like I sometimes feel like, like, did I like bet on the wrong course coming to the States from Turkey? But especially I think those feelings were like very strong when Trump got elected. Uh, but it's like back in seventies, there was this like Turkish president who very famously said they're like, like, we're gonna make Turkey a small America. Because his point was like, America is like, hey, like economy is doing great, like people are going up in like income and wealth, like America is like where good things happen. Like you can't say that with a straight face anywhere in the world anymore. If you said it's like, we're gonna make this country a small America, like you'll be voted

• 46:10Speaker 01

  out of the office tomorrow. You're like, no, we don't wanna become America, and like no one wants to become America. But like in seventies, outside of US, like people looked up to the States.

• 46:19Alex Kantrowitz?

  Uh, the counterpoint here is that wealth has increased uh across the board in the United States. And yeah, um, you know, in some categories, it's increased far more than others, but everyone's doing a little better than they were.

• 46:31Speaker 01

  I mean, do.

• 46:31Alex Kantrowitz?

  That's, that's what the people making the counter argument would say. So what would, is it, is it just that people can't move bracket to bracket now that's the issue? Was that, you know, or is there something deeper in it that folks are missing?

• 46:43Speaker 01

  I mean, I'm sure the absolute numbers have increased, but like, can you honestly say that like? Having like, I had the sense that even growing up in Turkey, like even my parents' generation, like if you could get a job fifteen years, you'll be able to buy a house of some sorts. Like now, having worked in like technology field, which is extremely lucrative, I've worked in for like ten years. Like buying a house for me is like, seems to like, seems like, maybe like out of reach. I probably can do it in some ways or another. But like, imagine if you're just like working for like, I don't know, Walmarts. Like you keep, let alone buying a house, you have to be on like EBT or like food stamps, right? I think this like sense that like, I mean, I think some numbers have grown,

• 47:24Speaker 01

  but like I think the quality of life from generation to generation hasn't really like gotten much better in the States.

• 47:30Speaker 02

  Yeah, I, I, I can definitely say, I mean, in the eighties and nineties, when a relative from India would come, they would view things in a very specific way. Like everything seemed very nice. Now, other countries have caught up. I, I get in this argument with a lot of friends who haven't traveled very much that, you know, they still have this view of the like nineties to early two thousands, where America is just way ahead in so many ways, like, you know, infrastructurally than other countries. But other countries have progressed significantly, many others have over the last couple of decades, where I think what you said, that word rigged is the key. Again, it's like, like even the way tech companies spend on lobbying,

• 48:15Speaker 02

  it's kind of this assumption that we are going to play the game, because that's the way the game is being played. And it's going to be less about us just out innovating the other, out competing the other. We are going to get into the swamp with everyone else, because that is a necessary part of doing business in this economy. And I think like, that's just the way everyone looks at it now, that, you know, if things are kind of screwed up anyways, then I'm going to take what I can, screw the rest of them.

• 48:47Speaker 01

  I, I, I, sorry to like jump in, I just realized, so, kind of like connecting, coming like full circle. Um, so starting, I think, April thirty, uh, all the Bitcoin exchanges in Turkey are gonna have to be shut down, because they basically outlaw Bitcoin starting April thirtieth. And I think yesterday, one of the, uh, one of the exchanges in Turkey, the, the guy who started it flew to Thailand, like he shut down his company and like flew to Thailand, and like all the people who had. There are Bitcoins, all these crypto assets in that exchange are like, you know, shit out of luck. Um, so I don't know how much money he basically was able to extract. So he got, he, you know, he took the profits. Uh, but, uh, yeah, I mean, you know, I don't know if like, that's like anything.

• 49:33Speaker 01

  Any indication that something like that might happen in the States, but, you know, if like we, we, I think we got Trump earlier than you guys, um, in Turkey. So maybe we'll also get that in Bitcoin earlier than you two.

• 49:47Alex Kantrowitz?

  Yeah. And so, um, how do you fix this? Because we, we do talk about the problems and I think that like the word rig, like the system does feel rigged and there's some truth to that for people that like, yeah, I understand why it does feel rigged. Um, and honestly, from the stuff that I've read, you know, there's definitely things that are going on in this country that favor those who are already in good position and makes it harder for the American dream to be lived out. Is there a way to fix this system or is it just kind of the way it is?

• 50:20Speaker 02

  Perhaps a forty three point four percent capital gains tax.

• 50:26Speaker 02

  Well, actually, I want to ask, John, are you not going to start your company and continue on it if this capital gains tax passes?

• 50:35Speaker 01

  I mean, I think, I, I guess my point is that, you know, I, I started it. Uh, I believe that like, you know, some taxation is okay. So, I mean, I'm, I'm, I'm, I'm, I don't think it really changes like where I make my decisions about it. Um, you know, if the tax comes out to be more, I'll pay more. I think that's the end of it.

• 50:54Alex Kantrowitz?

  I was gonna say, maybe we go back to.

• 50:56Speaker 01

  What I would say, I think what needs to be done is that like one of the more like sort of fundamental things is that like, one thing that shocked me is how much money there is in elections in the U S. Uh, I'm not saying that like Turkey has like the most fair and free elections in the world. But like, I think elections everywhere else outside of U S is just like a couple of month affair and there's not much money. I think it's incredible to me that like any small election in the U S, like you have to raise money from these sources. And I think what happens with that is like, not only you become beholden to those people, you change the way you think about the problems. I think you only start thinking about like, how can I make sure I fix those people's problems? And I don't think it's like nefarious. I think you lose touch with actually

• 51:40Speaker 01

  the people who are like voting for you because the people who are voting for you are irrelevant to elections. It's how much money you could raise that's relevant. So I think like if I could have like, you know, I joke about with my co-founder, like if you become millionaire billionaires, like, what do we do? Like, I, I feel like I would spend couple hundred million to remove money from elections. So I think that's sort of like a very big lever that America needs to do.

• 52:04Speaker 02

  Yeah, I know, rather than, rather than organizing.

• 52:07Alex Kantrowitz?

  Money to fix the money in politics.

• 52:09Speaker 01

  Well, that's, that's the game you have to play.

• 52:10Alex Kantrowitz?

  Noble cause. Yeah, I like that. Yeah, supporting a campaign.

• 52:15Speaker 01

  Well, I mean, I'm not.

• 52:16Alex Kantrowitz?

  No, I, I think it's good. So I mean, at, at a certain point, we do need to get to a point where these, this money can't speak the way it does.

• 52:23Speaker 01

  I'm not accumulating it to start a new civilization or anything like Elon Musk is. It's, but the joke is that I think, you know, I would vote for someone whose platform is remove money from politics. I guess that's like the more altruistic way to say it.

• 52:37Alex Kantrowitz?

  Uh, I want to touch on one more thing about the emerging marketification of the United States, which is that, um, and, and correct me if I'm wrong, I'm probably wrong on this anyway, but I think that there's a certain number of levers a government can pull to, um, amp up its economy, uh, and that will work for some set amount of time before it inevitably doesn't work anymore and some of those bills become due. And, you know, I, I, uh, and maybe this is something that I saw, but I know Turkey definitely liberalized its economy. And the economy soared for a while, but then the currency ended up becoming worth like, uh, I don't know, a fifth, a sixth of what it was worth compared to the dollar and the economy has slowed down a bit and there's just a limit

• 53:23Alex Kantrowitz?

  to what the government can do and then it eventually catches up. Are we at risk of seeing something like that happen here in the United States?

• 53:30Speaker 02

  I mean, I would say the thing that allows the US to kind of drive this is just dollar supremacy. The dollar is the world's reserve currency, um, really gives us more leeway than a Turkey.

• 53:45Speaker 01

  Right, just an M M T R.

• 53:47Speaker 02

  Well, no, but, but, okay, I buy the argument that to grow, to achieve the growth you need to, to help pay back that debt down faster, you still need some amount of money to invest. Again, why an infrastructure bill can be a good thing, why those $2 trillion are a better $2 trillion than a $2 trillion tax cut. I am full on MMT, new green.

• 54:15Speaker 01

  What is MMT?

• 54:17Speaker 02

  Modern Monetary Theory, but basically the idea that the government, the way they spend, you don't have to look at it like balancing your own checkbook. I think there's certainly a lot of things that can be said about why you shouldn't look at it like balancing your budget, like balancing your own personal checkbook is true. But I also do think that, again, the problem of the US economy right now is not that there's not enough money. It's that there's, I mean, there's so much money, yet it's not being invested in the right ways and the ways that would actually produce the best outcomes. I think, again, whether it's taxation, whether it's regulation, whatever it is, it's actually

• 54:58Speaker 02

  redefining the levers to actually push those assets in the right direction. There's actually a really good Capitalist podcast, John has gotten me onto this, I'm not sure if he listened, did Alex? But, but basically they're talking about how, whether the Federal Reserve drives inequality, and they're saying that, like, the guest on there was saying that the Federal Reserve bringing interest rates low, you would think should actually make borrowing easier for lower income people because interest rates are low. But actually what happens is banks, the way their risk models work is they actually stopped lending because they're not going to make a profit because the rates are so low that it's not worth the risk.

• 55:41Speaker 02

  So what instead happens is they stop lending to lower income people and only lending more to large corporations and high-yield debt and other, I mean, into private equity and other privileged institutions. So, so it's like, until we get all those individual levers aligned properly, I think it's, it's less a question of that kind of like hyperinflation in emerging markets, it's more where the money just keeps getting weirder and we keep selling pixels for a million dollars.

• 56:12Speaker 01

  Yeah, I mean, I think Ranjan is also right there. Like, I think Turkey was able to get this almost artificial boost to its economy because, you know, it's fueled by like foreign direct investment and then essentially they sold the country's biggest assets like one at a time. And I think that sort of like gives you this like artificial boost. But obviously, you know, at some point, like you do have to start like production, you do have to have this product, like productive assets. And, you know, when the foreign money dried up and there was not a lot of productive assets in the country, then you see like economy like slowly collapsing. So I think US is not this like foreign direct investment driven economy. So I don't think it's at the risk of that. But I think the more the risk is,

• 56:55Speaker 01

  I think the similarity is more around like, what happens to a country when the entire populace starts like distrusting each other? Then how do you actually govern a country when like 25% of the people believe that the government is there to like get them? You know, how do you govern a country when like the most important person says they're like, wear masks and they have to consciously, no. You know, I think you just like stop losing, like you stop being able to operate as a government.

• 57:24Alex Kantrowitz?

  Right. Okay, let's hit the home stretch with this final question. Some folks have said the discussion that we've had today, or some discussions along the lines of the one we had today, that talks about market fundamentals, balancing the budget, the fact that folks are going YOLO with money is sort of the concern of the elites. And most of the people in this country just want essentially the money machine to go brr and people, it's proven to work out and people should stop being such crab apples about it. What do you think about that argument? Maybe it's right.

• 58:01Speaker 02

  I mean, all right, to get a little bit controversial, I, my friend who runs the pizza restaurant from the DoorDash story has been complaining for weeks now that they literally can't hire anyone. And he was kind of early on telling me this, but then...

• 58:18Alex Kantrowitz?

  Wait, do you want to quickly recap the DoorDash story? Let's go to the greatest hits of margins. By the way, John, I'm calling it margins now, not the margins. I've learned.

• 58:27Speaker 02

  Yeah, he's beaten it into me, too.

• 58:31Speaker 02

  No article duh. No duh. So a very quickly friend of mine who runs a pizza restaurant. We had a whole kerfuffle with DoorDash had written a piece and it went a bit viral about how DoorDash misprices things and uses venture capital money to kind of screw over small restaurants. But in the past, like basically a couple of months, he keeps telling me, I think there's a 0% unemployment rate that actually, you know, the way we count this, and he'll ask me a lot, you know, like, how is this calculated? I don't get it because literally, no matter what I put out there, I'm not getting anybody. So of course, me being the person who just writes newsletters and does content strategy

• 59:15Speaker 02

  and doesn't actually have to run a restaurant, I'm like, well, just pay them a lot more. You know, why don't you just like, there's some clearing price where supply will meet demand and you just have to find that and then everything will be fine. But then he brought this up and then everywhere you're seeing this now that labor shortages, I mean, it's just every single business is having trouble meeting this, yet on the other side, we keep hearing people are hurting, unemployment is still very elevated versus kind of a normal time. So, so I do think like, it's this reminder that we are in such a weird state right now. And this is actually the part that's kind of, again, the stupidity has legs and can keep

• 59:59Speaker 02

  going for as much longer than we think. But it's also the kind of scary part for me is that we're in such uncharted territory right now where, you know, our people sitting at home, the way we count things is not actually meeting the moment. Like the way the unemployment rate is counted, are people sitting at home who are not actually actively looking for a job, saying they're looking for a job, but collecting federal and state unemployment and hitting an income level higher than what they would make, even higher than minimum wage, but around like 15 bucks an hour. We have no way of knowing this, yet our policymakers are looking at.

• 1:00:42Speaker 02

  Unemployment's coming down slowly, but it's still much higher than it should be because those people are still counted as unemployed because they're taking unemployment. Like it's just, that's, I think, the part that scares me the most is that we have no idea what is actually happening right now. And especially at the aggregate level and the way we calculate inflation and unemployment and all these things is just not actually relevant to all the weirdness of today.

• 1:01:10Alex Kantrowitz?

  But let me just ask one follow up then, but so, so what do you think about this criticism that these concerns are those of the elite? And, you know, the people who are getting that unemployment money, you know, have two middle fingers raised to the system and are thrilled to get the cash.

• 1:01:25Speaker 02

  I, I'm honestly okay with that. I mean, in the sense that it's a concern of the elite, I do think it's a concern of business owners, the owners of capital, policymakers, like they're the ones who benefited, so figure it out. And yeah, like, yeah, if I have no, the same way everyone has been told, like, you know, that the way businesses operated for the last 20 years is just a function of capitalism, then yes, if I can sit at home and make more money than going to some lower wage job, of course, the economically rational thing for me to do is to do that. And to say, I'm unemployed, like, you can sit back and talk about the

• 1:02:09Speaker 02

  respect of work and whatever, but I think this again goes back to this emerging market of vacation and lack of trust, like, that's gone. So I think, yeah, two middle fingers in the air and saying, I'll take my unemployment. There's not, that is the rational thing to do and there's nothing wrong with that. So yeah, I do think it's the, the people who have made the decisions and continue to, it is their responsibility to figure this out.

• 1:02:38Alex Kantrowitz?

  Right. And I guess the worry is the one that we touched on earlier is that eventually it does crash, but, uh, you know, who knows whether that will actually happen, maybe this is something that can sustain forever, although saying those words to me just feels.

• 1:02:53Alex Kantrowitz?

  So wrong, feels so probable, but here we are. Here we are. John?

• 1:02:58Speaker 01

  Well, you know, like your, your podcast called like big technology. So I'll tell you a big technology story and sort of like the opposite end of like what Ranjan talked about. So what I do right now is try to hire people too. You know, like we, we raised some venture capital and we have like a project in mind, like me and my co-founder. We're trying to build a team to hire people and then being in the Bay Area, we're in Auckland. Obviously there's a big tech companies have a lot of people they were trying to like, you know, hire. And then I think I've talked to, I would say like 50 plus people who work in like big tech, you know, Google, Facebook, all those places. And then I'll tell you like a couple of stories.

• 1:03:39Speaker 01

  It's just like, you know, we talked to people who work at, let's say a big tech company that is not really known for its ethical business practices.

• 1:03:48Alex Kantrowitz?

  But it'd be Facebook.

• 1:03:49Speaker 01

  You know, let's, let's protect the innocent. And then this person, because obviously they need protection more than our capital. But like this person is like, well, he was like, he or she was like, well, I'm making 400K right now, $400,000. So you need to be able to offer me something similar for me to like continue the conversation, right? And it's just like, well, okay, like that's not something that, that is insane. That number is insane to me. Or, and then, you know, we go into this conversation and be like, look, do you enjoy your work? Do you enjoy like working at just like ethically, you know, questionable companies? Like, well, I try like not to think about it too much, right?

• 1:04:31Alex Kantrowitz?

  That's what they, that's what I always hear.

• 1:04:33Speaker 01

  Right. It's just, you know, like, and I think like, and then is that a rational thing? Because that person is not doing as much work as they could be doing, but they're making like bank. And because well, because it's they, you know, the company they work for is a monopoly and like, they don't need to worry about like competitive pressures of the market anymore. They, they're literally printing money practically, right? And then their employees, they don't enjoy their work. They think their company is unethical, maybe, but like I cannot hire anyone either. So like, I'm willing to pay six figures too, just not that much, but I cannot hire anyone. So like, it does feel like economy went off the rails. There's nothing rational anymore, either on the low end or on the high end.

• 1:05:16Speaker 01

  So I don't know where this ends, but it just seems sort of like we're just like uncharted territory where it's just unhinged. There's like a lot of money, but like, where's the money? Like, is just everyone buying like pixels for a million dollars? Like, and where can I get some? You know, that's like where I'm gonna end it.

• 1:05:32Speaker 02

  Yeah, I mean, I think one thing to really keep in mind, and I've been, I've been almost trying to like yell this at friends, especially in finances. We, everyone has been conditioned to track economic success by a stock market ticker on the bottom right of a TV screen. Like, you know, everyone is, if stocks are going up, things are going well. And even Obama was very vocal about it in terms of the recovery. Trump clearly would.

• 1:06:01Alex Kantrowitz?

  Trump never cited those numbers.

• 1:06:03Speaker 02

  Never, never. I think we.

• 1:06:07Alex Kantrowitz?

  Mr. Trump, what do you think about the coronavirus? Well, if you look at the market, coronavirus is over.

• 1:06:13Speaker 02

  I mean, but this is where I think we, like, the media, especially the financial media, has to be really disciplined around how we communicate progress. Because again, if, if, if, like Shopify, Peloton, Tesla, if all these come down 30%, is that really a significant change? If Bitcoin drops 90%, is that really a significant change? Yet, I mean, do we start like having a ticker showing the Gini coefficient, which is just like a super esoteric economic indicator around income inequality?

• 1:06:50Alex Kantrowitz?

  Income inequality.

• 1:06:52Speaker 02

  Yeah, around income inequality. Do we have the median wage of the average US employee? Like, I don't know, like, do we, how do we represent this stuff? So it's in a way that if the stock market falls, because if policymakers decide like, we need to reshape the whole way this is constructed, right now, everyone would freak out and be like, oh, my God, the roof is falling in. Instead of actually having some kind of framework to sit back and be like, all right, this is okay. This is right. This is good. And I don't think we have that yet. So I'm hoping we can figure that out.

• 1:07:30Alex Kantrowitz?

  Yeah, no, I think that's a great idea. I just want to end on a story. I wasn't really planning on sharing it, but whatever. I'll share it anyway. I don't really remember my dreams too often. And last night I had a dream that I was working either as or with a counterfeiter who were just printing money and got caught and went to jail. And like as they were like locking me away, you know, I had a question in my mind. How is this any different from all the rest of the people printing money? Anyway, this has been an illuminating conversation. I appreciate you guys coming on. Margins is again, one of my favorite reads and I encourage everybody to subscribe.

• 1:08:14Alex Kantrowitz?

  But how else can folks follow your work online?

• 1:08:16Speaker 02

  You can find me at at Ranjan, R A N J A N X R O Y on Twitter. And John has a better Twitter handle than I do.

• 1:08:25Speaker 01

  That's so long. How do you find people?

• 1:08:28Speaker 02

  All right. First name.

• 1:08:30Speaker 01

  My, my. Yeah. Well, my, my Twitter handle is at C A N like the word can, because the Turkish name, just three letters. Yeah, that's all shorter than Jack Dorsey's.

• 1:08:45Alex Kantrowitz?

  Shorter than Jack's. Yeah. All right, Ranjan and John, thanks again for coming on. It's great having you here on the show. Thanks, everybody for listening. Thank you, Nate Guatney for editing as always. Very talented editor, appreciate you. And thank you to Red Circle for hosting the show and selling the ads. And if you're a first time listener, if you want to hit subscribe, we do these every single Wednesday with tech insiders and outside agitators. If you're a long time listener, you're already at hour and eight minutes or so. Was this a good show? If you enjoyed it, please give us a rating on Apple. That will help us with the big technology algorithms so we can keep this podcast going.

• 1:09:28Alex Kantrowitz?

  All right, that's going to do it for us here on the big technology podcast. I've been told to have a better sign off than just have a good week. So I will say, thanks again for joining us. We appreciate it as always, and we'll see you next Wednesday.

• 1:09:49Speaker 03

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