SPEAKER_00: i want to play the theme music for this episode okay hold on one second here we go

SPEAKER_01: if you let the indian government plant spies in your office give a little whistle

SPEAKER_08: if you have too many bots you can come up with your own metric mdAUs mdAUs when you want to incent your staff to not look at the bots give them bonuses based on dows based on dows always let your bonus be your guide when you're on the board and you see metrics that you don't like turn a blind eye turn a blind eye oh sorry sorry i just got subpoenaed

SPEAKER_18: everybody's getting subpoenaed again this is jacal at his best

SPEAKER_25: you gotta stop it's too much trouble this is going to be the story of 2022 for sure

SPEAKER_29: right before i guess the big case between elon and twitter is about to happen i guess in october

SPEAKER_31: at some point a twitter whistleblower has come forward and dropped a nuke into the middle of what was basically the story of the year in business i think the former head of security security hired by jack himself an incredibly well respected uh peter mudge zat ko uh he's referred to as mudge one of the most respected people in uh the security industry uh again recruited by jack in 2020 after a team of hackers you may remember took over all these verified accounts obama biden and and and elon's account as well and he was um head of security until january of this year eight months

SPEAKER_34: ago and he claims through explosive documents a huge document dump that uh twitter execs ignored

SPEAKER_35: these twitter executives ignored multiple security vulnerabilities now why is this important well

SPEAKER_29: obviously if obama biden and other heads of state have their twitter handles they could say something that could cause an international incident and that's actually happened with hacks before he also says they were not following even the most basic security protocols like safeguarding staff access to core software of course all this comes after there were uh saudi infiltrator spies

SPEAKER_34: essentially inside of twitter i mean the list of things here that he is alleging is truly colossal he

SPEAKER_35: dumped these documents to the department of justice the sec congress and uh the washington post he

SPEAKER_29: alleges that the vulnerabilities make twitter extremely vulnerable to foreign spies hacking and

SPEAKER_35: disinformation campaigns and perhaps most importantly to the acquisition the complaint also adds that twitter's policy towards fake accounts incentivize quote deliberate ignorance by undercounting spam accounts and giving bonuses to exacts for increasing users but not finding bots

SPEAKER_34: sax your thoughts i mean on this we talked about your uh subpoena or whatever that was uh

SPEAKER_40: i don't know subpoena i'm being depositioned it's you're having a deposition yeah they want

SPEAKER_00: they want to depo depo me too which is kind of amazing but let's let's save that because i think this

SPEAKER_46: is um more more newsworthy so you'll recall on a previous show we talked about this idea that if twitter sues elon to go after the kill fee or to go after damages the question will very rapidly become about whether twitter has a bot problem and will discovery reveal documents that show that twitter executives knew or should have known there was a problem and so i said you know the question will very rapidly become what did twitter executives know and when did they know it now i couldn't have predicted that this whistleblower would come forward but what he's basically saying is not only is there a bot problem there is a cover-up of the bot problem he's accusing the company of positively nixonian tactics here so just to build on what you said jcal he said that twitter executives don't have the resources to fully understand the true number of bots on the platform and their executives are disincentivized to count them properly because doing so would negatively affect their bonuses so i didn't know that their bonuses were in any way tied to uh to this bot issue so he's basically he's making the upton sinclair argument that it's hard to get a man to understand a problem when his salary depends on not understanding it so that's part of what he's saying he's also saying that he's he's accusing twitter ceo praga agarwal directly let's just say these are allegations right these are not proven yet uh but here's what he's saying basically he's saying that parag and his lieutenants repeatedly discourage him from providing a full accounting of twitter security problems to the company's board of directors they basically prevented him from producing a written report he also says that the company's executives ordered him to knowingly present cherry picked and misrepresented data to create the false perception of progress on urgent cyber security issues he also alleges that they went behind his back to have a third-party consulting firm uh their report scrubbed to hide the true extent of the company's problems and as a result of this he's basically saying that twitter executives committed securities law violations by making material misrepresentations and omissions and sec filings and this is what got elon to to sort of commemorate zacko's revelations with one of his trademark memes which was the meme of jiminy cricket singing give a little whistle from the film pinocchio which i think becomes a cold open here exactly which just became our cold open um so yeah look these are very serious allegations they're not proven yet he's working with the same group who worked with francis hoggan and i certainly questioned some of the things she was saying so i'm not going to automatically accept on faith everything he's saying but i think by the same token because he's working with groups that backed francis hoggan who was very much not on the free speech side of this debate i also think you can't just accuse this guy being an elon stooge this guy is a respected cyber security authority he's one of these like white hat hackers he's somebody who was an

SPEAKER_29: early hacker literally if you were to ask before all of this before he worked at twitter like who would

SPEAKER_34: you want as your chief security officer you know give me a short list he'd be on it for any company right one of the most respected people who points out vulnerabilities and chamatha or freeberg i have a question about corporate governance and what seems to be a dysfunctional relationship here you have jack

SPEAKER_29: hires somebody to solve the security problems then when presenting to the board he's not allowed to tell the truth and they the board has given incentives to the management team he's a top five top seven member of the management team so what's going on here with this dysfunction where he's hired to tell the truth to fix the problems the board is turning a blind eye to it and maybe the management team is not giving the board the data they need to make better decisions who how do you game theory this yeah

SPEAKER_57: i'm not sure that it's you can come to all those conclusions yeah i'm not coming to the conclusion

SPEAKER_59: i'm just my mind is wandering of how this i read the function comes up yeah i read parts of of his

SPEAKER_57: whistleblower i can't claim to have read it all it actually isn't super supportive of elon's case

Chamath Palihapitiya: the most problematic thing that he points out is the following and this is a quote from his complaint he said twitter quote already doing a decent job excluding spam bots and other worthless accounts from its calculation of mdow at best he's alleging that twitter omitted details not that it lied directly so if you kind of take that i think what he's really pointing his sights on are as you said

SPEAKER_62: disclosures that have nothing to do with the spam issue but have a lot to do with security and that is something that typically in a in a public company board filters up through the audit committee typically that gets a readout right once a quarter from the rep from the right people who talk about here's our cyber security threats and vulnerabilities and then there is a readout from that committee chair to the board and then those are noted um in your quarterly uh in your quarterly reports that the secretary writes down so i think part of why this guy may not have had the audience is it was also written that he was a pretty terrible manager and there were hundreds of people in his organization who were just kind of running here and there and so you know you guys have all been in the situation where we hire somebody who is an exceptional performer and then we miscast that person by putting them in a point of leadership and and being a team manager versus um you know a single kind of like um product or engineering expert and it seems that there was a part of that

SPEAKER_64: at play as well which decayed the ability for management to actually have enough faith and trust in this guy to put him in front of the board so and that's all that's just come out in the last few days so i don't know my my reading of the whistleblower claim is really that this is the kind of thing that companies like facebook and google and others have had issues with the ftc in the past they typically settle those claims they pay a fine snap but those things take three to five years to play out so i

SPEAKER_62: suspect that this body of content more leads to that outcome than is a smoking gun that really helps elon in fact this the the fact that he's actually affirmatively stating that their calculation of mdao is actually pretty decent actually hurts the claim that elon is making i don't know if i agree with that

David Sacks: actually okay go ahead sex so i i agree with with chamath that the claims he's making are far broader

SPEAKER_46: than the bot issue um and far broader than the issues that elon's raised so i agree with you about that however i don't agree that what he's saying isn't specifically helpful to elon's case so what he said is so this is from a cnn business article he said um zacko's disclosure argues that by reporting bots only as a percentage of mdao rather than as a percentage of total number of accounts on the platform twitter obscures the true scale of fake and spam accounts on the service a move zacko alleges

SPEAKER_29: is deliberately misleading and then see what you're saying here sax just to do the math the denominator matters here if the denominator was all accounts the percentage of bots would be much higher if the

SPEAKER_34: denominator is monthly mdows whatever they created it would be a much lower denominator and the

David Sacks: percentage would change i think i'm just i'm just reporting what what cnn is reporting in terms of what zacko's alleging i just want to get it out on the table cnn broke the story along with um

SPEAKER_46: one other news washington post washington post yeah basically what happened is this guy got fired in january and started working with these whistleblower lawyers they put together a big report and then that report got leaked to the washington post and cnn as well as people on capitol hill so that's kind of what happened here so cnn goes on to say zacko says he began asking about the prevalence of bot accounts on twitter in early 2021 and was told by twitter's head of site integrity that the company didn't know how many total bots are on its platform he alleges that he came away from conversations with the integrity team with the understanding that the company had quote no appetite to properly measure the prevalence of bots end quote in part because if the true number became public it could harm the company's value and image so this is again the upton sinclair problem that they're i mean at a minimum david you have to

SPEAKER_62: agree this guy is basically speaking on both sides of his mouth i mean these are both direct quotes from his complaints so his complaint at best is very confusing and a little schizophrenic well it's also just

SPEAKER_80: coming out so there'll be more data that that comes from yeah by the way i don't i'm not saying

Chamath Palihapitiya: that i believe him or disbelieve him but i'm saying if you if you look at the quotes the quotes aren't the smoking gun one would want if one was trying to look i think we have to remember the the lawsuit has really nothing to do with this problem the the lawsuit really boils down to one very specific

SPEAKER_64: clause which is the pinnacle question at hand which is there is a specific performance clause that elon

Chamath Palihapitiya: signed up to right which you know his lawyers could have struck out and either chose not to or you know couldn't get the deal done without and that specific performance clause says that twitter can't force him to close at 54 20 a share and i think the the issue at hand at the delaware business court is going

SPEAKER_64: to be that because twitter is going to point to all of these you know gotchas and disclaimers that they have around this bot issue as their cover story and i think that really you know this kind of again

Chamath Palihapitiya: builds more and more momentum in my mind that the most likely outcome here is a settlement where you have to pay the economic difference between where the stock is now and 54 20 which is more than a

SPEAKER_64: billion dollars or you close at some number below 54.20 a share and i think that that is like you know if you had to be a betting person that's probably and if you look at the the way the stock is traded and if you also look at the way the options market trades that's what people are assuming that there's a seven to ten billion dollar swing and if you impute that into the stock price you kind of get into the 51 a share kind of a an acquisition price again i'm not saying that that is right or should be right

SPEAKER_35: that's just sort of what the market says friedberg what's your take on this do you find this person

SPEAKER_34: credible highly credible and how damaging do you think this is to twitter independent of the uh

SPEAKER_86: deal to sell the company i think there's two tests one is the materiality of what they've reported so and really that comes down to just the um the mdow reported numbers so if there really is some misstatement knowing misstatement based on what he's saying that's an issue the other one is the the duty of care responsibility of the board meaning um did the information that he's providing actually find its way to the board if it was blocked by management you know it's it's it's a judgment call on you know whether or not management was trying to deceive or whether they were trying to investigate and identify more if the information was brought to the board and the board did not act then there's an issue with the boards meeting their duty of care responsibility as fiduciaries of the company

SPEAKER_35: and that's really what he did pitch the board at some point or explain this but not in writing

SPEAKER_86: yeah if what he's claiming did not make its way to the board then it's hard to say that the board was in breach of their duty of care if the ceo and if the if the ceo blocked it then there's a question on what then the ceo can be fired right then there's a good case for the ceo to be fired i see so i i see you know probably one of three scenarios here one is you know nothing happens two is that the board is actually violating their which i doubt knowing this board i mean knowing who's on this board it's probably more likely that the ceo or some executives that block this information from getting to the board the board then has to act now that they have the information and they say hey you block this information from getting to us we need to act and maybe they removed

SPEAKER_87: the the leadership that was responsible for that sacks in terms of board governments how much of this

SPEAKER_35: has to do with the fact that nobody really owned on the board any significant equity in twitter is that true yeah i mean i think i mean jack on the board was the highest right he owned two or three percent

SPEAKER_86: how much did silver lake own jack owned silver lake egon's on the board i mean they're they're

SPEAKER_94: they're owners on the board right yeah we're low to be clear zacco doesn't seem to be pointing his

SPEAKER_46: finger at the board um in fact quite the contrary he's saying he wasn't allowed to present to the board in the amount of detail that he wanted in written form like he wanted so in a way he seems to be exonerating the board he is pointing the finger at twitter executives and the timeline here is instructive basically what happened is he was hired by jack dorsey back when jack was ceo this is in i think november of 2020 and at that time jack had zacco report directly to him he actually took responsibility away from these issues away from parag who was running engineering gave it to zacco zacco reported directly to him now fast forward about a year later and jack steps down progs becomes ceo and then two months later prog fires uh zacco and it's in that time period that couple of months where zacco alleges that he's prevented from providing a written report to the board that twitter executives instruct him to cherry pick that they basically um try to amend this third-party consulting firm's report in order to make the situation look better in order to hide the extent of the company's problems so i think this is i think the allegations as far as they go are mainly a problem for twitter executives and and and look i you know i don't know the truth these things they're just allegations i think this guy is a respected super sort of white hat hacker in the cyber community at the same time i don't know maybe he is a bad manager maybe there are other reasons for removing him could be a bad manager you also could be telling the truth right yeah and you can't ignore the fact that under whistleblower laws if twitter gets fined as a result of these allegations he could get 30 so listen we we don't know the truth of it however i do think that this whole thing is a windfall for elon's case because it does seem to provide substantiation for elon's assertion that there's a bot problem uh twitter now and a cover-up about it and a cover-up about exactly yes and a cover-up that would basically potentially invalidate the company's sec disclosures on the subject yeah there's a question there's a question of law and a question of fact with regard to elon's case so in other words at the end of the day what they're going to be litigating in delaware is a contract dispute is elon contractually required to close and elon's assertion is i'm not because this bot issue so there's a question of law where if if everything elon says about the bots is true is he required to close and i don't know what the legal ramifications that are but i think with respect to the question of fact

SPEAKER_105: which is is elon right about the bot issue there's no question that this is a bombshell that can only

SPEAKER_62: help his case by the way to your point the the the stock was kind of pricing in a 70 likelihood of

SPEAKER_57: this thing closing if you looked at just how all this stuff was trading and it went down to 60 once that whistleblower report came out and and people had a chance to digest it so to your point it definitely moved the goal posts a little bit towards toward in elon's favor there is uh you know an

SPEAKER_34: important thing to point out here which sex just uh touched on there is a whistleblower program that was created in 2012 and uh by the sec uh as part of dot frank i believe or in part of the evolution of

SPEAKER_29: dot frank uh and they've given out now over one billion dollars in whistleblower awards these awards come out of the sec fine so you often wonder like hey they give this huge sec fine who got it well it turns out whistleblowers now are massively incented because if you're a whistleblower it's a

SPEAKER_57: career ending potentially jason you're not you're not saying the other part which is when you go to

SPEAKER_62: these organizations to now help develop a whistleblower lawsuit what has actually happened is you're not

Chamath Palihapitiya: whistleblowing moral or ethical breaches you're whistleblowing things that can come back to an issue that the sec and the ftc can make an issue of because that's where the financial fines come and

SPEAKER_64: that's where their remuneration and motivation so for example like you could have a company that's illegally um i don't know killing dogs horrible but you know the whistleblower claim will be about

David Friedberg: you know their disclosures in a 10k of how many dogs they killed uh to the sec right in this case

SPEAKER_34: you know how many what did they tell the yeah uh and that's why he gave this to the sec doj the other interesting wrinkle here and by the way there's been two the whistleblower program i did a bunch

SPEAKER_29: of reading on it this week they also don't disclose who the whistleblowers are so this isn't a case where you have to come out like francis did uh or or mudge did you a lot of these awards are being given quietly so that and there's been two rewards over a hundred million dollars and they don't say what the award was based on you know who did who who the whistleblower is or who the company is they've been doing this in a very stealthy way and it seems to be highly uh effective the big difference i think

SPEAKER_31: with francis compared to this one is francis is just a pm you know who was not a top five or ten employee not even close to that this is a top five top seven employee who had access to the board and was giving reports to the board at least orally the final point on this i would like to get everybody's

SPEAKER_29: um commentary on if it is true that they essentially um were forced twitter was forced by the indian government to put a government agent on the payroll i think agent means spy how explosive is that and

SPEAKER_62: then how many other countries that to me is the most important thing that is not getting nearly enough

SPEAKER_57: coverage it's like you had a government come to a company that's based in america and it's it's not the united states government that did it and basically said we need you to place an agent of our intelligence services inside of your company and it seems like they were like okay where do you want

SPEAKER_29: them to sit now sacks if that's true would i wonder if they would be required to tell the cia and our government that their arms being twisted like this seems unprecedented to me and if they didn't

SPEAKER_119: well again this is all alleged so but if true sacks well i think the bigger but no but jason you should

SPEAKER_57: also ask the next one which is if they did it to twitter which is kind of small what about the big

SPEAKER_62: honeypots of users google apple google facebook tick tock snap and what about countries outside of just

SPEAKER_64: india what about the united states no i mean what about the united states uh well yeah we have access to the

SPEAKER_127: stuff you know through the courts there's supposed to be a process there's supposed to be the process is you go to court and you get a warrant not that it's a high bar but a prosecutor has to go show

SPEAKER_46: probable cause and get a search warrant presented to the company and then they turn over the data this you're you're right it's explosive in the sense that what they're saying is that these government agents this is what zacco says according to time magazine the purported agents had direct

SPEAKER_34: unsupervised access to internal information which i think means dms when the accounts are created who owned which account the ip addresses that's what i'm guessing they had access to which is you you do

SPEAKER_131: not want to trust i'm guessing i'm guessing don't put anything in your dms folks i'm guessing what it doesn't mean is the twitter menu in the cafeteria yeah no yeah not that i mean not that anybody's been

SPEAKER_132: to that cafeteria in three years anyway i mean there's literally 47 dollar olive state they had

SPEAKER_136: direct unsupervised access to the salad bar i think i think you can basically i think you have to make

SPEAKER_62: an assumption that if if governments are doing this to one company they're doing it to all companies

SPEAKER_140: yeah but you would think right that google would put up a fight or apple would put up a fight but who

SPEAKER_141: knows really you think they put up a fight when they went into china the opposite don't you think

SPEAKER_132: they do the opposite well actually what they did was there's actually even sneaker a way to do it what apple did when they went there is they said we're not providing cloud services in china uh but

SPEAKER_144: all the cloud services are provided by this third-party company so then they could have plausible that that's not what this is about this is just giving an example of how you this is

SPEAKER_62: i understand but i'm asking you a question do you think that uh foreign governments have put pressure on the largest american tech companies to place agents and do you think they exist in there

SPEAKER_150: they've definitely put so the first part they've definitely put pressure we see that obviously

SPEAKER_31: then the question is would our would the would apple or google do this and not inform the government

SPEAKER_62: or not put up a fight i don't know well i think it's fair to say that the the senate intelligence committee is going to haul twitter and have like a closed door meeting and then the question is you know will they haul everybody else in and it's just is i i i think what what is what is an important question is is this a duriger kind of business tactic at the highest levels of every company and we just don't know it and are typically not read into it and we would never know in the

SPEAKER_92: absence of this whistleblower thing and my question is do does our government know that our companies

SPEAKER_46: are acquiescing to these governments well that's been a problem for a long time actually so there was a op-ed by a microsoft executive talking about this a number of months back where the argument was well the government has to go get a search warrant to get your data from these companies but these companies don't put up a fight like they don't it's like they don't challenge the warrant at all and why because they don't have an interest they have an interest in being cooperative right the article is basically saying that if you're the subject of a search warrant meaning they're going to google to get information about jason the government should have a duty to inform jason so that your lawyers can go challenge it and that was the legal change that needed to be made we had this conversation i think last year that is a change that should be made because in the old days when the government would present you with a search warrant they'd have to go to you because all of your documents were in your possession they would be at your office they'd be at your house so they would come knocking on your door give you the search warrant you could give it to your lawyer they could challenge it that doesn't happen anymore now the government just goes and gives a search warrant to a big tech company because your data is in the cloud but their argument is you don't own that data the big tech company does the big tech company has no incentive to fight the government and they just get access to all of your data and you don't even know well it's not an

SPEAKER_158: investigated it's not an argument you agree to that when you sign their terms of service

SPEAKER_46: yeah the current situation is bad enough that essentially you have very little protection and rights over your data but what's happening here the allegation is even worse which is that government operatives are working with the company in a way that provides them access

SPEAKER_34: a search warrant yeah they can just spy on their ex-girlfriend their you know brother-in-law whoever they can just spy on a celebrity do whatever they want i'd always i'd always assumed that

SPEAKER_62: this was happening covertly meaning like look if you're a tech company and you know you have a very bright i don't know phd on a visa and you hire that person to work in computer vision i'm just making

SPEAKER_64: this up how do you really know that that person is not an agent uh of another foreign country and obviously the overwhelming majority are not but once you have hundreds or thousands of people you know that that you brought into your company all it takes is one person you know for example we just saw i think in apple there were two people that were just recently arrested for stealing all of

SPEAKER_62: apple's autonomous um auto data and documents and design schematics and all of that stuff and one of the guys was um arrested right before he was trying to fly back to china and so somehow they figured it out they were able to get him he was not a u.s citizen but then another guy that did it was a u.s

SPEAKER_64: citizen but both were of chinese origin it just goes to show you that the covert nature of industrial espionage is probably at an all-time high right and i think that's that's a risk that every company has to manage and do the best that they can but this is different this is an overt risk this is just an

Chamath Palihapitiya: letter and saying open the door give us a badge we're coming in and this is why i think you have to deal with this case very delicately and in a different way yeah uh and for people who don't know

SPEAKER_34: google does what's called the transparency report twitter also has one so they they do try to put out by category search warrants subpoenas etc exactly how many warrants they're getting and the the tech

SPEAKER_31: companies are at least trying to be transparent about it to the extent they can but this is going to lead to a lot of people moving off of the cloud i predict we're seeing and in fact apple is now storing your data and a lot of your privacy information locally on your phone and if it's encrypted they can't hand it over as we saw with the um the terrorist shooting and it was at san

SPEAKER_167: bernardino where they couldn't unlock the phone and they went to the israeli spy company to do it so

SPEAKER_144: you know i think i think the companies here at least in the united states want to defend their

SPEAKER_31: users but this is could be uh make people rethink the cloud and i've seen a couple of pitches from

SPEAKER_81: startups i think you're confusing issues of course they're going to try to defend their users in the

SPEAKER_158: united states but what if you have if you let somebody into a different country and that oh yeah it's

SPEAKER_31: not as if those servers are not accessible yeah i'm not confusing this year i'm i'm just talking about the united states here for a minute i do think you're going to see people buy mini servers to put uh or rent their own cloud services that are encrypted and impossible to unlock and so look for that trend to come or more companies to encrypt it and say we don't have the keys chamoff so isn't

SPEAKER_62: it crazy that like you know we spent the last 20 years pushing the cloud and the thing that may actually unwind the cloud is just the utter lack of privacy that we all have now i've just had like we've just created these massive honey pots where you know any state or non-state actor can essentially just have an incredibly detailed understanding of who you are yep and why because we weren't willing

SPEAKER_174: to pay five bucks a month for storage everything needed to be free isn't this part of isn't this part

SPEAKER_86: of the uh philosophy behind decentralized services that you know yeah yeah i mean i i don't like using that term but just decentralized services where the data doesn't sit on some centralized enterprise controlled servers but the data is distributed either on a chain or in your phone or in some way um you know your identity your information your content uh isn't uh isn't centrally controlled and that that fundamental principle may actually come to kind of bear over the next couple of years and decades that hey you know that model yeah that model is more appropriate for us for me and therefore the services that are built that way are going to win in the market the challenge is ultimately how do you finance those because those services right i mean they they don't have as much

SPEAKER_175: of an economic incentive you have to pay for them you know if you're willing to pay five or ten

SPEAKER_34: dollars a month for your privacy consumers are doing it free bro i i use the brave browser and vpns

SPEAKER_85: and these are becoming a major category uh you hear it on podcast advertising all the time uh duck duck go

SPEAKER_181: brave vpns vpns aren't just for hackers anymore they're like real like um you're bringing up something

SPEAKER_62: that i think that's really important which is that you know in over the last 20 years for all of us we've been building these products on the internet we've actually done a little bit of a disservice because we've basically created these expectations of consumer surplus and we've never given people true sets of trade-offs we've always said oh you'll get more and it's essentially free because we'll back into an advertising model that that supports us being able to give you more and more for free

Chamath Palihapitiya: but it turns out that it has some real consequences and i do think that not enough of us actually understand why privacy is important but when you start to hear these examples and it'll be important to see what what the true details of this twitter situation are i think that the pendulum starts to

SPEAKER_62: swing in the other direction where we say okay you know what i'll eat out at chipotle one night a week less and instead i'm going to reallocate that money to making sure that i have you know some amount of

SPEAKER_34: privacy you can do it for 25 bucks a month you know two or 300 bucks a year which is a big number for you know maybe the average joe but it's it's it's it's being packaged and bundled right now so you're seeing the vpns the anonymous search engines the browsers all starting to bundle they're bundling a set a suite of services and so i i think this is upon us now and consumers get it and they want to protect their privacy so and apple has said this is going to be our reason for you to choose our cloud is that we're going to put the local settings we're going to put your data on your phone encrypt it we don't have access to it use use apple for this reason of course they're also building a multi-billion dollar ad business at the same time in apple news and their app store so there's that i guess we should move on here we'll we'll see what happens with this the other big news story that people are talking about this week and we talked about i guess last year was student loan debt

SPEAKER_29: relief interestingly about 85 days before the midterms joe biden has decided to unilaterally

SPEAKER_31: give 10 to 20k of debt relief to people who have student loans you have to have under 125k in yearly income as an individual at 250 as a household and the student loan pause program which happened during covet has been extended to the end of this year i'm not sure why

SPEAKER_188: turns out there's about they they explained why apparently it takes four months for them to turn

SPEAKER_57: on their cobalt written software that runs these loan servicing apps mighty so i'm sure the change

SPEAKER_81: takes four months it's gonna take it's gonna take four months to restart the software that that calculates your loan balance and is able to print a bill we're so incompetent okay anyway you have

SPEAKER_31: to apply for this um and as we know student loan is student loan debt is 1.75 trillion uh this is gonna cost us another 300 billion can't imagine what's gonna happen with this 10 20k people buying

SPEAKER_167: nfts and stocks and housing and we're gonna heat the uh i guess we're gonna bloomberg bloomberg had

SPEAKER_62: a report that said that look we we we passed the inflation reduction act we talked about it last week

SPEAKER_57: but one of the key pillars of that is that there's a 300 billion of expected revenues coming in and we

SPEAKER_62: essentially turned around and just gave that back um to a very very small segment of the american population um bloomberg's analysis was that it's going to create somewhere between point one and point three percent extra inflation on top of all of that um and so you know you really have to ask yourself like what what was the white house trying to accomplish i think number one they made a campaign promise and so you know i think biden needed to make sure that he fulfilled that but nobody was really happy right the progressives wanted something extreme everybody else said you know this is not really the right thing to do because it doesn't really solve the sim the the the root cause of what we're dealing with you know if it would have been much better if you had said hey listen um you know we're gonna make this stuff expungeable on bankruptcy that would have been really useful um what happens if you actually tried to i don't know you were from the inner city and you worked your ass off you became a doctor you have 300 000 in debt but now you're a you know a resident and you make 126 000 well now you're you know you're kind of sol here so there's a lot of folks that they probably wanted wanted to help that they didn't help then there's all the blue collar folks who are like why why this giveaway only to these folks then there are the people that paid off their loans thinking why did i pay my loans off then there's the incentives that it creates for colleges which is well i'm just going to keep jacking up tuition because if

Chamath Palihapitiya: they did it once they may do it again so all of these things i think are sort of a little bit of you know uh it's a little bit of a head scratcher and then the last thing which we can talk about at

SPEAKER_64: the end is i don't think this is what gets people out to vote and i don't think it's what people care about ultimately at the polls which if there is a political calculation to make that's important and specifically when you look at what happened last night in a bunch of these districts every progressive candidate got absolutely shellacked they lost across the board and so the progressive talking points around this stuff fundamentally when push comes to shove doesn't work for democratic voters and then second is there is a really hotly contested seat which was a democrat versus a republican

SPEAKER_62: uh i think it's pat ryan versus this guy mark molinaro the republican he was leading the entire

Chamath Palihapitiya: way and then this guy won 51 49 and this is a very centrist down the middle dem so all the signs are like this may not have been the smartest thing to do but i don't think joe biden had a choice because

SPEAKER_31: he made the promise and he had to live up to it freeberg is this a fair thing to do a smart thing to do a cynical thing to do to buy votes where where do you fall down on this issue this is

SPEAKER_86: is absolutely moronic i think that the fact that eight million households are eligible for this relief and ten to twenty thousand dollars is relief uh is provided to a minority of americans is uh exactly what chamath said which is kind of distorted politics at its worst uh there uh this is a 300 billion dollar bill to the u.s taxpayer and the ultimate beneficiary of that bill while we all might want to say it's the people that are getting debt relief that have taken out these student loans that money was transferred to somewhere and you know where it was transferred to university endowments and the profit uh and the and the pockets of for-profit uh educational institutions if there were a free market for education in the united states and the government was not involved in the process of funding and supporting the educational infrastructure in this country individual citizens would have the right and the obligation to make decisions about whether or

SPEAKER_206: not the money that they're spending on tuition actually has a positive roi for them by spending ten thousand or a hundred thousand dollars am i going to make more than that much money back when i graduate and unfortunately we've lulled our citizenry we've lulled our country into complacency where that decision and that calculus is no longer required because uncle sam is there to give you all the money you want to go to college and the hungry money hungry institutions that are there to educate you are taking that money putting it in their endowments or in the pockets of their shareholders and at the end of the day it turns out that that decision may not have been the best decision and we're no longer holding ourselves individually to take responsibility for the decisions that we've made and we're creating misincentives because of the government programs that have been created by telling people you need to get a higher education the government is going to pay for it for you and it doesn't matter if it does or doesn't work because at the end of the day if it doesn't work we're just going to pay it back for you anyway we'll bail you out and there's a middle class in the united states of america that is going to end up paying the tax bill primarily because that's where most tax dollars come from for the minority of people that made a bad decision and it's not necessarily their fault they made that decision because the infrastructure in the system was set up to tell they were duped yeah go to college get a good degree it always works having a good life you'll make more money and the and the reality is that they aren't and that they don't the roi for many of these degrees has been negative you make less money than you would have if you were actually in the workforce earning an on-the-ground experience and progressing your career you do not need a degree in philosophy or history or german studies to be able to go and be effective in the technology workforce or in the services workforce and i think that we're seeing that play out the biggest challenge now is if we're going to provide this loan relief and not reform the educational infrastructure and the and the requirements for whether or not an educational system is eligible for support from the federal loan program we are not actually solving the fundamental problem we are keeping this gravy train running and we're not actually getting to the root cause of where this money is flowing and this is exactly what happens i will rehash my point that i've made a hundred times at the end of empires everyone sees that the money train is leaving the station and everyone jumps and grabs what they can and that's exactly what's going on we think that we're a rich nation but we're becoming complacent and this is unfortunate and it's a really sad sign i think we need to fix this educational infrastructure we need to make eligibility requirements for whether or not loans are actually going to have a positive roi for students and then individuals ultimately need to be educated on that and made

SPEAKER_214: held accountable to whether or not they're making the right decisions for themselves satch should

SPEAKER_34: each american pay a thousand dollars to let these eight million people off the hook because that's

David Sacks: what this is going to cost no of course not i mean i agree with everything if people say i don't like

SPEAKER_217: you i just gave you the softball of all softballs go no i mean look i think this is an issue where all

David Sacks: four of us are on the same page i agree with everything that jama said and what freeberg said i mean

SPEAKER_46: this bill is unfair or it rewards relatively well off college grads over working class people it's going to add 300 billion to the deficit i mean joe manchin should feel like a sucker right now because they just spent the 300 billion of supposed savings that he just agreed to i just add it's it's unconstitutional i mean that the constitution expressly says no money shall be drawn from the treasury but in consequence of appropriations made by law so i don't understand how biden can even do this by an executive order i expect this to be challenged and taken to the supreme court and i think there's a very good chance that it'll end up like biden's other executive orders that were ruled unconstitutional remember there was the vaccine mandate that he tried to do and there was the eviction moratorium that he tried to do and they're both ruled unconstitutional i think there's a good chance that this will also be ruled unconstitutional and like like you guys mentioned it's inflationary i mean these are basically stimmy checks which we don't need right now and it's going to make tuition go up because the more government subsidizes something the more those providers have an incentive to raise the cost so this is just a jump the shark moment i think for policy making the question is why are they doing it and i think it really speaks to the nature of the democratic party today which is the democratic party has shifted from being a blue collar sort of more economically populist party economically left party to being a professional class that is college educated culturally left more woke party and this is the ultimate example of that where the democratic party is basically passing this payoff and giveaway to their sort of woke college graduates at the expense of their blue collar uh the blue collar part of their coalition and you know a democratic political scientist that i like to read roy tushera just today he had a blog post called the democrats shifting coalition where he pointed out that if you look at polling if you look at the generic ballot among white college graduates they favor democrats by 12 points whereas the white working class which is to say non-college voters they favor republicans by 25 points so one of the biggest gaps in the electorate is college versus non-college that is the fundamental gap it's bigger than even you know than any other gap than racial gaps or anything like that this is really the key gap of the electorate and this is a payoff to the basically to the foot the new foot soldiers of the democratic party if you think about it the old stereotype of a foot soldier of the democratic party would be a union representative they were the ones getting out the vote that person's been replaced with sort of a woke college graduate who joins the democratic socialists of america and they go out and they're the ones pounding the pavement and doing the ballot harvesting so there's been a real change in what this party is about and i think that's the explanation for why they're passing this the mfa's legislation chamath and then we'll go to your favorite the mfa's from

SPEAKER_62: sarah lawrence college have taken over the democratic party yeah well let me ask you guys let me ask you

SPEAKER_221: guys a question yeah when you guys graduated uh everyone went to undergrads chamath you went to

SPEAKER_206: undergrad in canada right i have no grad degree right um but when you guys graduated college what do you think the ratio 80 20 90 10 50 50 0 100 was the first two years of experience you guys had in

SPEAKER_86: the workforce versus um the education and knowledge you garnered in college how important 90 percent

SPEAKER_225: workforce 90 percent workforce first i went to school at night so i was working while i was at school

SPEAKER_62: right i would say a hundred and zero i i went to a school university of waterloo that has a program called co-op where you have to alternate school and work it takes an extra year to graduate but you end up getting 24 months of um full-time work experience so it was the same and you graduate with a lot less debt i graduated with half the debt i would have otherwise sex i mean do you feel the same

SPEAKER_46: i mean you went got a law degree that's different i mean look i think that it used to be the case that people would go get these degrees and they would take out these loans because there was a perceived roi of getting this education and i think one of the deeper issues we have today is it's very unclear what the roi is i mean what is the return on getting a degree in you know social studies or art history or frankly some woke studies at one of these prestigious universities their graduates go out and they're not especially qualified for a higher paying job and actually i think one of the really revealing parts of of this executive order is not just the debt forgiveness part we haven't really touched on there's another provision that caps repayment levels so basically it says that the monthly payments on undergraduate loans be limited to five percent of monthly income now who is that the payoff to that is the payoff to the art history major from amherst who ends up being a barista at

SPEAKER_238: starbucks you know or the democratic political operative who works for the dsa gathering votes

SPEAKER_111: i mean that is who this is or the or let me give the let me give the counter argument to you saxon i

SPEAKER_34: want to hear your response to this so the the counter argument is hey listen the airlines got bailed out for a trillion dollars you know cumulatively um 2008 financial crisis 700 billion or something to that number i'm gonna respond there is a caveat to that which is we actually made money on that bailout i'm gonna

SPEAKER_132: respond to this yeah okay great and then number three hold on and number three um me too airlines

SPEAKER_29: banks and then the trump tax break 1.5 billion so why can't a bunch of students get but 300 billion that is the counter argument everybody we don't complain when you know the rich people get bailouts

SPEAKER_34: and the rich corporations and airlines do but now we're suddenly complaining about this little pittance here what's your best response to that freeberg well i'm not saying that's my position summer's former

SPEAKER_86: uh treasury secretary of the united states had a um a tweet storm about this and he said you know the student loan issue arises arouses passion um here are some observations and some responses there is no analogy with bank bailouts student loans are grants that cost the government money the bank bailouts were

SPEAKER_206: loans at premium interest in which the government actually turned to profit and it's important to think about all government services being infrastructure funding where you are funding some underlying tubing or mechanism that allows society and the economy to progress versus making up for the dollar mistakes or decisions that were made in the past i also have issues not just with this but with the issues of people buying homes in coastal cities that they get bailed out at the price of that home at the fair market price when a hurricane hits because they paid a premium taking on the risk of a hurricane or a flooding event hitting their home why should the u.s government and the u.s taxpayer come in and say you know what i'm going to reimburse you for the full value of your home which frankly should have been 50 of what you paid for it because it's sitting on a coastline and that's a big problem that we generally have is we try and use the government as a system for providing bailouts to make up for past investment mistakes made by individuals and businesses and i think that there's a very clear distinction that you can make when you decide whether or not a and we use the term bailout anytime we're spending money but the reality is if you're making an investment that has some payoff for economic growth and for people and for this country to progress in some measurable way that is a good way to assess whether or not that is a reasonable investment versus saying you know what i'm covering someone else's liability and when you do that we're actually burning money and we're putting ourselves deeper in a hole as a nation and making it harder to do the former to make the infrastructure investments and make the investments that allow us to move forward and i think that that's a really good way to clarify these things and frankly the list of things that people say this is fair this this is not fair yada yada go down that list and ask yourself that question is it a positive roi to progress our country forward or is it a bailout for people that had some liability they took on that they can't cover and i think for all those things that are unfair a really important point we cannot get caught up in the endless cycle of making up for other people's unfair uh um benefits that they got from this from this government because at the end of the day that's a road to nowhere we will burn through everything we have and everyone will scramble for money and that's the state that we're in right now where everyone's raising their hand and they're seeing 800 billion dollar bills 600 billion dollar bills covid relief pandemic relief ppp loan relief and everyone says well what about me and at the end of the day everyone's what about me is going to drive us into an infinite black hole that we will never get out of and we have to change our mindset and take individual responsibility and recognize that the dollars that we're spending have to have an roi for progression of us as a whole and this is a really dangerous place that we're in right now

SPEAKER_246: yeah two things if the if the education comments okay can i make can i make sure you make your comments then i'll ask a question to sex am i too monologuey today i feel like i'm very passionate

SPEAKER_34: no no you're doing great i mean have the fact that you're passionate about something video game yeah

SPEAKER_248: that almond milk gave you a little i think those cashews set you off maybe four cashews going forward

SPEAKER_221: guys this stuff really bugs me i'll be honest just take it easy on the dates yeah i'm like dude like this stuff just makes me feel like what are we doing it's just uh did you put chia seeds in your

SPEAKER_251: so yeah that's it it was it the goji was it the goji berries go easy on the goji berries dude that's

SPEAKER_252: a superfood right there if you if you have if you have chia seeds in the morning it's a huge bm

David Friedberg: that's about to hit it's just you're just waiting for the wave to hit yeah yes i mean

SPEAKER_62: for sure i have two comments comment number one is i think the thing that shows that this could have been better is that it was completely silent on the ability to expunge your student loans in bankruptcy the ability to discharge that is the single biggest change you could make to the system

SPEAKER_64: to be fair to everybody and introduce a better roi risk scoring calculation mechanism why okay it's a

Chamath Palihapitiya: great so this is an agreement but go ahead you know explain it okay in all debt markets right whenever you lend money there is an assumption of risk that you're taking and that fits on a curve of highly likely to default zero likelihood of default and that manifests in a risk scoring so fico score but in the debt markets right and there's these companies that provide that moody's and smp they say you're an investment grade debt you know you're a triple a plus you're a junk debt so you're you know you're a triple b minus or whatever and depending on where you are you pay different rates this is the

SPEAKER_62: the same in car insurance it's the same in home insurance it's the same in health insurance but

Chamath Palihapitiya: in all of those cases if you go upside down you can declare bankruptcy and you can discharge those debts here we don't have that idea so if you go bankrupt for whatever reason this debt will stay with you forever which is deeply unfair second is if you actually flipped it and you could allow it to be discharged then the companies that provided these loans would be forced to risk score you and the reason why that

SPEAKER_64: would be so powerful is that that would then create the forcing function for universities to actually

Chamath Palihapitiya: deliver what they promise and so who do you think is really against the ability to discharge in bankruptcy it's the universities and the university endowments so you know if i were progressives

SPEAKER_64: the thing that i would have pushed more than a handout to a few people which by the way didn't even you know really scratch the surface of the debt that they had anyways and it also served to piss off

Chamath Palihapitiya: everybody else i would have focused on this bankruptcy issue because that is a meaningful lasting change and the second is why don't you go and actually get a large portion of this money from all these university endowments because the longer that these folks run what is effectively a multi-trillion dollar asset management business they're always going to treat education and the roi that comes from it as a second-class citizen okay and that is what i think is wrong and if you were to just fix this one thing and then even the threat of actually confiscating some of the 50 billion dollars dollars that harvard has or the 49 billion dollars that utimco has you would start or the ut system has you would start to see the seeds of change where administrators would think to themselves i have to deliver something of value because these kids are getting loans they're going to be risk scored

SPEAKER_64: and i don't want to be the person that's like a low-end borrower right i'm not serving junk paper to the market i want to serve people that are going to go and really drive a huge roi so then sax

SPEAKER_29: you'd have an alignment between the people giving the loan and perhaps the value of the degree and so you could say hey we'll give loans to stem degrees at a different rate uh or a different number of them or a different amount of cash or a different interest rate than we would for i don't

SPEAKER_34: know you're getting a degree in philosophy or like i did psychology right just give a different one based on the outcome that makes total sense to you yes yeah i i've said for a long time that we

SPEAKER_00: should be allowing student debt to be discharged in bankruptcy just like any other type of debt

SPEAKER_46: just like credit card debt just like other types of debt jamal's right that would create some risk to the underwriter so that they would have to actually assess whether this person getting that degree would be able to repay the debt but you have to ask the question is it a bug or a feature that they're trying to remove market forces and i would argue that this is deliberate that progressives in the democratic party don't want there to be accountability for what you learn in college why because as i mentioned it's these colleges that are putting out the foot soldiers of the democratic party i mean listen there's a 37 point gap in party preference just based on one variable which is whether you are professional class or working class meaning college degree or no college degree and that spans across different racial groups and other party lines so the fact of the matter is that if you go to college and get a degree you are much much more likely to become progressive now why is that i think it's because a lot of these colleges have basically become re-education camps i mean these are the woke madrasas of uh of cultural wow a woke madrasa it's kind of

SPEAKER_259: like harvard has that's awesome who wrote that one for you i see that yeah yeah in fairness came

SPEAKER_263: out with that line yes but look these places are work madrasas and what do they do they graduate these

SPEAKER_265: people they graduate the new clerics of our woke theocracy these people go on and then they go

SPEAKER_267: blow up buildings enforcers hold on they become suicide bombers yes exactly right it's not it's

SPEAKER_46: not like violent like that but listen we we look down on some of these theocratic societies and we don't realize how like them we are i mean look these kids who graduate from these woke madrasas they go off to become the speech police i mean they go and force community moderation at social networks they become the foot soldiers all right let me just make up hold on jacal let me say one thing it's

SPEAKER_234: true right how do you explain it 37 point gap okay so if you're the democratic party listen if you're

SPEAKER_268: the democratic party which is run by woke progressive political operatives why would you want to defund the

SPEAKER_276: factories that are brainwashing more young students to basically join your ranks okay i want to say two

SPEAKER_278: things i want to say two things one is um i think that the the university and the college degree has been

SPEAKER_86: used as um a heuristic uh for progression out of um blue collar to white collar it says if you get a hollow and jacal you i know you can speak to this because you know you come from a family that uh that works blue collar and you know you got a college degree but i think there is this um uh you know kind of assertion in the united states and and it has now become one could argue a meme that if you get a

SPEAKER_206: college degree you're no longer blue collar you're now white collar and the reality is that the quality of that degree varies greatly based on where you go the major and the experience you get to accompany that degree and as a result you may not necessarily transfer from blue collar to white collar but you have the degree you say you're now white collar and then you're working a blue collar job with 120 000 of debt um and so that's that heuristic isn't true and what we need to examine is why that heuristic is no longer true and what we can do about it yeah i mean secondly secondly secondly i do want to make a defense for college i think that there there is a incredible benefit to broadening individuals exposure to topics research um and areas that they may not have naturally been interested in or that they will not necessarily get trained in and there's an important role that that educational infrastructure has in allowing us to be a more enlightened populace meaning we can understand history we can understand philosophy we can understand the things that shaped our our world and our livelihoods and what makes us who we are today and we can understand the sciences and the maps that affect us so we can better understand the world and the people around us so there is a role but the real question is how do you integrate that educational role into a technical training program or into a real world development program skills that that basically make an educational system more than just a check box that doesn't actually do anything for you but gives you that exposure accompanied by and maybe that's the requirement with you know with federal loans is that there should be some skill or some i think i think the minute i think the minute i don't want to lose the important breadth of exposure that college is meant to bring to people because it's meant to yeah yes and then that's valid go

SPEAKER_62: ahead chamath and then i'll wrap up my final comment no i was just gonna say i i really think people do not understand how how meaningful of a change it would be if you were able to discharge your

Chamath Palihapitiya: student debt in bankruptcy it is the most powerful market function we could create to make these

SPEAKER_62: universities more accountable and i think if you guys look at my annual letter i put a chart in there but you know part of the problem that we have in these universities these leading universities is that these have become graveyards okay there is a gerontocracy that runs these things with an iron fist

Chamath Palihapitiya: and as these folks have stayed in these jobs for enormous amounts of time now 40 50 plus years the average person is in their mid to late 70s now who are lead who are the administrators of our leading institutions they are focused on running up endowments and they are focused on the power and the influence that comes with their position so i i implore anybody who has any ability to to actually achieve this change there should not be a single logical person that should not support the ability to discharge student debt and bankruptcy and you will identify the insider establishment by those

SPEAKER_34: that try to stop you yeah you will expose them a hundred percent and i i just want to put a closing thing here for the people listening who have young people making these decisions when we all went to

SPEAKER_29: college as gen xers college was 9 10 11 000 a year in tuition and if you came out with 10 or 20k and you had an average job or a salary of double or triple that when you graduated it seemed like a good deal the roi broke now market forces are at work here i just want to point out two of them number one there is a website grow with google you can just look up right now they're allowing people to get professional certificates and this is free uh and if you could pull up grow with google they've identified five different paths to jobs uh one of them is digital marketing and e-commerce one's it support

SPEAKER_144: data analytics project management and ux design they have essentially looked at what's needed in the world and aligned a three to six months online course for free that'll get you a job and you if you have executive function the ability to sit down shut up and learn can do this first before you make the decision to go a hundred thousand dollars in debt and then get a fifty thousand dollar a year job here these jobs average you know 60 70 80k a year and you can do it for free the next piece that the

SPEAKER_31: private market is doing you and i looked into this chamath actually together isa's income sharing agreements uh we were lucky enough to invest in a company called meritas they are providing isa's

SPEAKER_144: for a college colorado mountain college for nursing what this means is they will give you your tuition for free it's educate now pay later you if you go to one of these colleges for nursing you get educated and then you pay it back and you're capped at paying back like two times whatever the loan is one and a half whatever the college decides but they take the risk as opposed to harvard with 40 billion that takes no fucking risk and so the free market i think can also

SPEAKER_31: solve this but you have to sit down with your kids and say let's have an roi calculation at 20k in debt you know okay fine you got a philosophy degree by the way sacks

SPEAKER_62: sacks final question for you uh i posted this thing in the group chat but what do you guys think about this you know uh republican tidal wave becoming a republican ripple that's what uh yeah that's that's

SPEAKER_227: what that's it was it was an odd set of outcomes don't you think for question i mean biden look biden

David Sacks: has had a good run over the last few weeks um there's no question about my audio cut out one

SPEAKER_77: more time sacks i'll say it again i'll say it i'll say it again the political report says that the red wave looks more like a red ripple no i think i think it's right well look i think a couple of

David Sacks: things happened so first biden has got some wins legislatively i don't think it's good policy i don't

SPEAKER_46: think this executive order is good policy i don't think the 750 billion of uh climate that pretends to be an inflation reduction act i don't think that's good policy but nonetheless he has delivered some goodies for his his base for his donors and that has basically ameliorated the story in the press that democrats are in disarray so you're not hearing that in addition i think biden's got two things going for him dobbs and jobs i mean dobbs there's no question dobbs has helped the democrats quite a bit certainly has motivated their base and then the jobs report has been strong look i think overall the economic data is mixed real wages are not keeping up with inflation but jobs have so far been strong so yeah there's no question that democrats are in a materially better position they were in june when it looked like a tsunami that being said the election is still 10 weeks away and i think we'll have to see what happens and i think the economy is still in a pretty fragile state so 10 weeks is still a long time but yes you're right that yeah so where things are looking right now things are a lot better for biden and by the way i do think the republicans have some issues with candidate quality and so there's a couple of races that you know should have been more slam dunks and that are not but what was the first word you used there you said dobs and

SPEAKER_291: jobs what was the first word dobs and jobs abortion ah the dobbs case yeah got it got it okay okay that i

SPEAKER_144: just didn't hear it perfectly weren't a lot of these wins for biden uh bipartisan well no the inflation

SPEAKER_46: reduction act was passed on straight party lines this this uh college loan forgiveness is something they can't even get through the senate it's being done as a as an executive order the the things that were bipartisan hold on the things that were bipartisan there was that chips act where they got some votes that's great and um and then there was the guns bill so um yeah look he did get some bipartisan wins there's no question about it i think the republicans i think the republicans got hoodwinked basically the republicans foolishly went along with infrastructure and with the chips act they should have forced biden to use up reconciliation on one of those bills and then they wouldn't be able to get through the 750 billion inflation reduction act so republicans you know as much of a um sort of um master strategist as mcconnell is reputed to be they really got snowed on this one if it's possible

SPEAKER_57: for somebody to um masturbate themselves from the inside out jason's doing it right now no no no

SPEAKER_242: there's a reason why we do this from the chest up okay i think what's likely to happen in november is

SPEAKER_46: still that the republicans win one of the chambers probably the house i think the senate is still up for grabs i don't think it's over i think that'll be important because biden won't be able to pass some of this legislation that's i think destructive from a deficit standpoint from an economic standpoint and we've talked about on this pod i don't think you guys are too excited about most of the legislation he's passing so quite frankly i'm just hoping for gridlock i'd like to get back to a situation

SPEAKER_300: of gridlock less spending would be certainly great at this point i mean well they're trying to fight

SPEAKER_301: inflation here while we keep spending money over here it's it's challenging yeah if you want to get

SPEAKER_46: back to uh fiscal responsibility you you got to vote for gridlock or hopefully moderates come uh all

SPEAKER_34: right well uh we'll let sacks go anyway we're gonna go to science anyway and sacks checks his email

David Friedberg: during that segment so by the way there's there's an article now you know when we talked about quiet

SPEAKER_64: quitting it's now become this huge thing that everybody's talking about yes and and what's so funny about quiet quitting is just yet another example of gen z again co-opting something we've already done when we used to do it it was called coasting and you just be like rest and posting

David Friedberg: rest invest yeah but now it's called quiet quitting yeah they're all up in their feelings do we want to talk about um the gut biome i want to hear about the gut biome so there was a there was a paper published

SPEAKER_86: published in um so the journal cell the paper was done by a research team out of herzalia so i'll take

SPEAKER_206: a step back the human body is made up of roughly 10 trillion cells um and there are also somewhere between 10 and 40 trillion bacterial cells that live in your body primarily in your small intestine in your and what people call the gut biome and so this is a population of microbes bacteria that are basically chemical factories they eat stuff up and they spit out chemicals and those chemicals end up in our body and it turns out that the gut biome the bacteria in our gut can actually

SPEAKER_86: regulate our health in a very significant way and this was the basis of our company munique you guys can bleep that out if you want which is now called super gut and jcal i know you've tried the product

SPEAKER_34: which was awesome thank you you sent me i bought munique that helped me with my weight loss and then i just

SPEAKER_206: got super gut bars the principle of that business is that there is a known product a molecule amylose that you can feed the gut biome it doesn't get absorbed by the human body it sits in the gut biome and the bacteria in your gut certain types of bacteria will eat it their population will grow and other population of bad bacteria will shrink and the good bacteria release chemicals called short

SPEAKER_86: chain fatty acids that go into your blood and reduce your blood sugar and have a profound effect on uh on your metabolism and there are also known gut bacteria that can regulate your sleep your mood

SPEAKER_221: your anxiety your energy levels and um your glycemic control the control of blood sugar so it's it's

SPEAKER_252: an incredible are you telling me are you telling me that cialis is a natural compound is a bacteria

SPEAKER_71: are you saying we have to cancel our cialis prescriptions oh no yeah so guys there's there's a known um

SPEAKER_206: there's a known principle that's really deeply studied now in neurology uh in neuroscience um

SPEAKER_86: called the gut brain axis that you can actually profoundly affect um disease and the condition of the brain um and uh and neuro conditions by changing the gut biome and so this is this is something that's

SPEAKER_206: just being studied the reason it's it's all coming to light in the last few years is because of the cost of dna sequencing we it used to be very very expensive to sequence the dna from your gut biome which you

SPEAKER_86: do by looking at your poop and then you know looking at all the dna that's in the poop and that tells you what your gut bio what bacteria in your gut that used to cost a thousand bucks now it

SPEAKER_206: costs five bucks and so in the last couple of years there's this absolute explosion in research into the gut microbiome and more importantly how the gut microbiome affects human health so this particular paper looked at the effect that eating um artificial sweeteners had on the gut biome and on human health and so what these researchers did is they um they took 120 people they gave them nothing or gave them sugar or gave them saccharin or sucralose or aspartame or stevia the four most popular artificial sweeteners and then they looked at how their gut biome changed and importantly they looked at how their glycemic control or ability to control blood glucose changed blood glucose as you guys may

SPEAKER_86: recall you know you always have glucose in your blood the more if you have over you know a level of a hundred uh you know you can and it persists you can actually have really bad health effects and it causes high a1c over time which is diabetes um and so high stores more fat when you're spiking and so you get when when you have high blood glucose it's actually damaging to organs it's damaging to cells and over time it can cause very significant deleterious effects to the human body that's what

SPEAKER_206: the the disease of diabetes is and does is it's about high blood blood blood sugar blood glucose so what these guys did is they gave people uh saccharin sucralose aspartame and stevia and then measured their blood glucose and their ability to convert um uh sugar in the blood and absorb it and use it and that's called glycemic control the way you guys you guys have probably done this in the doctor you take a glycemic control test you drink a bunch of sugar water and they measure your blood sugar every couple minutes and then they show the curve on how effectively your body can metabolize that glucose and if it cannot metabolize that glucose well you have bad glycemic control and ultimately that is diabetes and what they found was that if you eat saccharin and sucralose which we always assumed were better than sugar they actually adversely affect your ability to control um blood glucose saccharin and sucralose in particular drive up your blood glucose and makes it harder for your body to metabolize glucose out of your blood aspartame and stevia were relatively benign oh really because that's what's in coke zero that's what i drink there you go and so so so that was

SPEAKER_86: kind of the realization and then they went deep and they actually analyzed the microbiome and they

SPEAKER_206: showed that there were profound differences in how these compounds affected the microbiome it turns out that sucralose for example is more likely not being absorbed by your intestines so it's sitting in the intestinal walls and the bad bacteria are eating it and the the good bacteria that are supposed to be making short chain fatty acids and all these chemicals that regulate blood sugar um have a lower population and so we actually see a profoundly negative effect from eating certain compounds have

SPEAKER_86: you shipped your poop to test these like you have to yeah we just did a clinical trial at super gut by the way and we found uh and we published it so it's it's public but wait just the audience doesn't

SPEAKER_31: not even know this stuff exists in all likelihood you basically take a poop and you put it in a vial and you send it and they analyze your poop i don't mean to be graphic here but have you done this before

SPEAKER_206: how does this work i i do it i've done it yeah and and and i think it's um look here's here's the issue jason i think and i want to i want to say two things that i think are really important to say number one is um we know very little about what bacteria do what in your gut how which we're starting to understand which ones are beneficial which ones make good chemicals that your body use and regulate your cells and regulate your health and and remember we have a symbiotic relationship with the bacteria in our gut they're making chemicals and they're eating chemicals the chemicals they make affect our cells the chemicals they eat affect our body so the way that we um evolve our health is actually profoundly affected by our gut biome so we don't know enough yet to say

SPEAKER_221: definitively this bacteria is good this bacteria is bad we're starting to have a good sense of that

SPEAKER_227: the second way just so yeah just so you know just to double down on this like there's a form of

SPEAKER_62: therapy it's experimental but it's called fecal microbiome uh transplantation fmt heard about this but you know we are finding now that you can take feces from healthy individuals that have good you know gut biome and good bacterial counts and if you put it you know inject it into people that are suffering from a bunch of different diseases it actually is looking like it's curative so parkinson's ms ibs colitis so it just goes to show you that this that there's somebody with good gut by

SPEAKER_335: there's there's bacteria it's really understood into another person's intestines where do you put the

SPEAKER_86: poop no through the bum no no no you yeah you could do it there or you can take a pill uh so there's a little take a pill and it's got the fecal stuff in it and you swallow it and in it and it no i want

SPEAKER_62: to see somebody else's poop you i said i said it in a way so that we could see his reaction to in

SPEAKER_342: the bum and jason was like this he got excited how does this impact your anus that's what the audience

SPEAKER_206: wants to know freeberg how much your rain is here's the other point i wanted to make which ties to what chamoff said this is really important jacob yeah so the gut biome is an ecosystem like a rainforest there are trees that grow monkeys climb the trees they poop there's jaguars jaguars eat the monkeys the trees grow because of the monkey poop it is a whole ecosystem all these organisms all these microbes regulate one another and feed one another and this is why probiotics do not work probiotics are single microbes single bacterial strains or fungal strains that we put into a pill and we swallow it and just because that microbe happens to have some beneficial effect you know on its own in a petri dish it does not survive in your gut biome because it's like putting a house cat in a rainforest the jaguar will eat the house cat the house cat has nothing to eat etc it doesn't inoculate inoculate means that it survives thrives and the population grows so when we take probiotics it's just passing right through our gut it doesn't stay there and doesn't change anything and it turns out that the reason fecal microbiome um uh fecal transplants work is because you're taking the whole microbiome from someone else's gut and you're putting it in your gut the whole rainforest the whole rainforest and so all the organisms that are needed that self that regulate one another all of the small molecules that that regulate that cross-regulate each other they all go in your gut and then they actually change your entire gut and your gut becomes the rainforest of someone else's gut and so if someone else has a healthy gut meaning my anus my anus can be your

SPEAKER_132: anus jason wait there it is so we put our anuses together and then a monkey goes between them and then the rainforest is well let me ask two questions the fda has not approved any of this

SPEAKER_29: yet when will the fda be approving these treatments etc there are a lot of cl there are a lot of

SPEAKER_206: clinical trials going on for fecal transplant ucsf has a huge clinical trial for ms as chamath pointed

SPEAKER_86: out right now where they are actually doing fecal transplants on patients without ms into people with ms and significant you know the early data of these sorts of treatments has indicated that there can be a very profound effect on the frequency of lesions appearing on the brain which is one of the primary symptoms of ms and so these organisms we don't yet know why

SPEAKER_195: but some of them when will we understand this is it a five year ten year there's a ton of startups

SPEAKER_206: there's billions of dollars invested when will we know when will we know and have like a game so it's already coming out there's no it's not like a binary switch we're discovering new things there's a comp there's a set of companies that are discovering what are called small molecules so they're finding what are the little chemicals that those good bacteria are making in your gut and what and can we turn those chemicals into drugs and so they'll turn those into drugs other

SPEAKER_86: companies are saying you know what this is a set of good bacteria let's just put them in your body and figure out a way to get them to inoculate and stay other companies are saying let's do fecal transplants and other companies are basically just saying let's change this is what we do at super gut let's just change the feed stock for your gut biome and you can actually evolve the rainforest into a different state by changing what you're feeding the bacteria in your gut and there's

SPEAKER_214: certain molecules you can feed the gut bacteria and then the populations will change into a more

SPEAKER_144: beneficial state why are people saying like eating drinking kombucha and fermented vegetables pickles

SPEAKER_31: whatever apples are like great at fixing your biome and then taking sugar out is good for your biome

SPEAKER_62: this is another thing i keep hearing like people from people people are are making single point claims like that because they have invested in a lifestyle and they want to defend their choices

Chamath Palihapitiya: it's not to say that those things are bad those are all good but i think what we know and the fecal transplantation is the most simple way of of pointing this out is that it's a broad scale

SPEAKER_62: holistic approach that gets the best results so as you know like if you if you had if you've had a kid that's had you know diarrhea for example right you know sometimes what we'll do now is instead of giving the kid some sort of diuretic suppressant what you actually give them is um a probiotic right and what you're trying to do is to reintroduce healthy bacteria into that child's stomach in a way that allows them to self-manage and self-heal while the bad you know uh diarrhea causing stuff kind of gets washed away as an example so will one thing be a cure-all for you no i think that you should be very skeptical of those claims that's why everybody says a healthy well-balanced diet is really important because we do not know conclusively this is why you know i i tend to believe that the broad holistic diet works the best in moderation yeah because you just don't know what you're not getting

Chamath Palihapitiya: we don't know that you know we don't know you can't say conclusively that there isn't a form of bacteria that is created specifically when you consume animal protein that is extremely

SPEAKER_62: helpful to you we don't know that that's not true not now we don't know that that is true either

SPEAKER_206: right and there's a ton of research going on to try and figure that out right now have we figured out

SPEAKER_355: any of it though like yeah yeah this whole turmeric ginger movement yeah we could we could do 12 episodes

SPEAKER_86: on this there is so much amazing discovery happening this is a good paper to highlight that which is like hey maybe avoid products uh that have saccharin and sucralose in them but my my big thing is there

SPEAKER_77: is no diet whether it's keto whether it's the south beach diet whether it's specific vegetarianism

Chamath Palihapitiya: whether it's veganism nothing is a cure-all for what ails you there is nothing and by the way one

SPEAKER_206: important point in this paper one of the points that these guys highlighted which we see all the time in microbiome research is that there are what are called responders and non-responders that within a population it's not like everyone that eats sucralose has the same negative effect some people have a really negative effect and some people have a mild to moderate to neutral effect and so there's a range

SPEAKER_86: of your particular physiology your particular gut biome that will respond differently to different inputs

SPEAKER_62: into your body and that's the most important thing to figure out because people need to spend time eating and sampling to understand what makes you feel better or worse this is why i i have an issue with you know the broad-based claims of this path will solve all your problems it's just not true you have to solve it for yourself and it's it's through iteration and then the the the yeah anyways it does

SPEAKER_34: seem like non-processed foods whole foods things that exist in nature that seems to me directionally correct as the way to go and then the fake stuff and the processed stuff may be less good for you agree

Chamath Palihapitiya: with that this is this is why i think like there there is a little bit of a scan being run on people who want to be healthy like for example have you guys looked at the ingredient list on oatly you know everybody loves oat milk but have you looked at the ingredient list are you really telling

SPEAKER_64: me conclusively that that is healthier than milk it's insane well i mean i could i could argue both ways

SPEAKER_363: but yeah i mean look at the chemicals so look at the chemicals in a box of oatly i mean just drink

SPEAKER_86: water guys i can also tell you the chemical name for every chemical that's in milk which is all chemical like all everything around us is chemicals so i understand i understand natural chemicals but

SPEAKER_64: you understand synthetically made man-made chemicals that are explicit that have to be put on an ingredient list because of its danger in high quantities should be treated slightly differently in my opinion

SPEAKER_253: opinion yeah i mean olis just gave us three subpoenas we're all we're being deposed by olie now

SPEAKER_369: all right everybody we'll see you next time on the all in pod love you boys i love you