SPEAKER_00: all right his monthly burn rate would make even bezos wince he's living the life of a sri lankan prince he drinks nothing but the absolute highest top shelf he's lifting italy's gdp by himself the dictator's back to mouth palihapitiya i'm back to the program thank you jake when you mentioned

SPEAKER_04: that burn rate i thought you could be talking about me i thought you were talking about it

SPEAKER_07: sometimes these intros you're not sure which which way it's a misdirect it's a misdirect

SPEAKER_11: it's comedy a mystery it is inconceivable that my burn is higher than david sacks i have i own one

SPEAKER_12: house how is it possible and maybe one or two next week you're such an ass he's analyzing macroeconomic

SPEAKER_00: charts and grids while at the same time ignoring his kids he's the sultan of sass it's no surprise the only thing heavier than his pockets the bags under his eyes the rain man is back david sacks

SPEAKER_17: it's not bad oh here we go here we go the admiral of anxiety he's rife with strife he plays the on his ps5 and he also plays one in real life meow the commander of the cat boys david friedberg

SPEAKER_21: i mean i'm totally cool with that opening because you're gonna look like an it's all good

SPEAKER_11: i mean more of an i mean if you didn't ignore it every time friedberg spoke you would have heard

SPEAKER_25: that the guy from anna porna pictures reached out to him gave him a link to download a free

SPEAKER_11: game about cats which he downloaded and he's been playing it's now the most popular video game in the world you introduced the cat game it's on you by the way what shirt are you wearing it looks like a

SPEAKER_28: carpet yeah you really do look like one of the characters from goodfellas like one of the older guys in the kansas city oh yeah i have my cigars right off screen here and i got my ass coffee i got from dunkin you remind me of one of the guys in kansas city from casino absolutely i sit around

SPEAKER_33: the table in that restaurant right it's like should we whack him why take a chance boom listen

SPEAKER_37: you got my style icon joe petrie's my style icon you look really bad thank you thank you

SPEAKER_48: gdp fell by 0.9 percent in q2 marking two straight quarters of negative growth in q1 we all know gdp fell 1.6 percent here's the real gdp chart current dollar gdp increased 7.8 percent in annual rate or 465 billion in q2 to a level of 24.85 trillion home construction down 14 percent ostensibly because of the interest rates increasing inventories which helped boost gdp in 2021 dragged down growth in q2 so supply chains easing taking away two percentage points uh chamath what's your take do these year-over-year comparisons work we were talking in the chat a little bit about the spike uh in 2021 versus the the dip in 2020 what's your take on this i mean i think you just

SPEAKER_53: summarized that people are really fixated on these numbers without understanding uh basic statistics so just taking a step back if you go to the bureau of economic analysis which is an official website

SPEAKER_56: of the government of the united states that posts gdp the title makes it pretty self-obvious what we're dealing with here which it says nick you can put it up there real gdp the percent change from the preceding quarter so things can still go up positively but still be negative if it doesn't go up by the same or more than the quarter before it the thing that we really have going on is that over the last eight quarters we've had all kinds of very turbulent data that's made the trend line unpredictable and the most obvious way to see this is actually in one specific subsector which we'll get to in a second which is around us e-commerce adoption you see this one huge spike coming out of nowhere and then eventually everything has settled back to trend the same way i think what we're waiting to figure out is how many quarters does it take for us to get back to on trend growth in the economy we had a massive shortfall in q2 of 2020 we had a massive surplus in q3 of 2020 we've had a country that's been getting back to finding equilibrium over the last five quarters so we don't really know what the steady state growth should be this is why i specifically had such an issue with the tone the white house took which was trying to explain away this that this isn't a recession by trying to create doubt in the definition instead i think it would have been much better off just repeating what i just said and explaining basic statistics and actually showing that the country is headed in the right direction largely speaking from a really crazy one-time externality that nobody could have predicted that it's going to take some number of quarters and so really what you should look at and jason you've

Chamath Palihapitiya: pointed to this is employment and wages and try to be a little bit more circumspect and overreacting to any one quarter of data by the way the fed exactly just said the same thing yesterday when they

SPEAKER_56: raised 75 basis points they said we are not going to give guidance anymore because things are too turbulent we're going to remain vigilant on inflation but mostly we're going to be very near-term data dependent so i would boil all of this in saying let's not overreact to a quarter's print here or there and specifically the label i think the white house made a mistake in trying to basically think you know we all didn't understand what our technical recession was i think instead we should just focus on what we have to do to get back to solid state equilibrium yeah just to put a pin

SPEAKER_63: in the definitions we all know the common definition two successive quarters of negative gdp however

SPEAKER_64: people have said it's a temporary economic decline during which trade and industry activity are reduced so there's a sort of debate and splitting hairs going on sacks which was kind of stupid the big news

SPEAKER_67: this morning is that we no longer know what a recession is this is such a vast and complicated question you might as well be asking what is the meaning of life now i remember in the days of republican presidents we had a very simple definition of recession which was two quarters of negative gdp growth but now that we have a democrat in the white house we just can't know these things why even ask such difficult questions right i mean that's basically the media coverage today and that's absurd i mean and you saw for the last week the administration and its spokespeople have been

SPEAKER_68: trying to muddy the waters on the definition of recession and it was laughable as they were doing it but now you see the media coverage today and you realize like they've bought into this nonsense and they're carrying so much water for the administration look the headline should be the

SPEAKER_47: biden recession has begun that's it if you had three minutes and 45 seconds for your biden over under

SPEAKER_68: with sacks you took the under you won we're in a recession he's the president and if we had a republican in the white house it would be republican president recession has begun yeah so the media here is carrying so much water to try to avoid the obvious headline i just explained it instead of reporting the obvious headline they're now saying that we're approaching recession or we might be in

SPEAKER_67: recession we have all these difficult technical issues listen we're in a recession it started it might be a shallow recession we don't know yet yeah um it's it's uh it's a recession in which the unemployment rate as of today is low although the labor participation rate is also low so listen we're at the beginning of a recession it might turn out we might have a bounce in q3 this might be more of a double dip i suspect that's what it will be but we know the cause of this the cause of this recession is inflation if you look at the economy's growth on in nominal terms it grew at seven point something percent but because inflation was at nine percent you have to subtract them in real terms the economy is shrinking and who is to blame for reset uh for inflation well j pal at the fed because he reacted

SPEAKER_68: way too slowly but also the buying administration for all the spending they did how much sooner do

SPEAKER_47: you think they could have reacted two quarters no like nine months earlier so three we got that we

SPEAKER_68: got that first surprise inflation print last summer it was may i believe that 5.1 percent we started to

SPEAKER_53: talk about 10-year break-evens uh tips in may of last year yeah so they could have gone quarter to

SPEAKER_68: quarter to nine months and they continue not only do they not raise rates um or signal any desire to raise rates for six months they continue to quantitative easing for nine months which just makes no sense but they should have taken their foot off the the accelerator right not nine months

SPEAKER_83: they only start they only stopped in june of this past year so we've only been quantitatively

SPEAKER_77: tightening for two months i thought they stopped the bond buying program in march maybe that's right

SPEAKER_68: yeah yeah but they stopped quantitative easing in march but you're right that tightening is just something they're getting started with but the point is they should have stopped easing right

SPEAKER_77: like why would you need to keep intervening in in the in the markets to buy more and to basically

SPEAKER_47: push out more money is the reason for this that powell and yellen just haven't lived through highly inflationary times i just read they're older than i am well i'm just saying they they haven't been in

SPEAKER_88: office and doing fed policy like i just read volcker's book if you haven't read it it's pretty great his biography i mean what he had to do in 81 82 was super severe uh but we just haven't lived through this in our lives so i guess people are just not used to having to tap the brakes in no no

SPEAKER_67: look what happened is that the administration reacted in a political way to the inflation print

SPEAKER_68: they invented this word well the word transitory existed but they applied it you heard this word used relentlessly for about six months so the administration went into denial mode yeah and then by the end of the year it became clear that it was persistent and i think the issue with powell is that he is basically responding to headline risk right so he didn't respond to you know the inflation problem last summer he waits until the the headlines tell him he has to react and so now the the thing that he's worried about is is recession obviously he knew no he's worried about

SPEAKER_97: inflation mostly right he wants he's worried about inflation but if you look at yesterday's right but

SPEAKER_68: if you look at his comments yesterday it was more dovish comments they did 75 point rate hike but the comments were more dovish and i think it's because he knows that today we have this second consecutive quarter of negative gdp growth so now he's trying to balance recession risk against inflation risk but the point is that the fed's been very slow to react and the administration basically just tries to relabel and rebrand problems instead of confronting them head on hey shamath when we look at this chart

SPEAKER_48: you pulled up four and we see this massive spike q3 q4 q1 q2 a little bit in q3 and then q4 i mean this massive uh one two three four five six just extraordinary quarters or five out of six in terms

SPEAKER_88: of gdp that's all stimulus in your mind right this is the money drop no that was lockdowns in q2 2020 jason

SPEAKER_54: they locked the economy down yeah but so people were spending online and we'll get to the chamat chamat story about spotify but it's not all of it but the point is it's some combination of lockdown and

SPEAKER_56: access money right access access money because because of loose financial conditions distort what true supply and demand should be got it right and excess money can come from the government but in this case excess governing money went from the government into the hands of individuals who then participated in the public markets and they distorted what it what it all looked like and so there was a lot of purchasing activity that was propped up by what seemed like an endless supply of free money right so yeah good and and so now that that money is getting taken out we don't yet know what the real equilibrium economic growth rate should be because you have to remember we have not seen an era without federally introduced spending without federally introduced forms of quantitative easing since the great financial crisis so we have been propping up our economy for 14 years straight now so we have

Chamath Palihapitiya: distorted the prices of bonds and fixed income we've distorted the prices of equities we've pro we've

SPEAKER_56: created an asset bubble in crypto out of nowhere and now we have to do the hard work of figuring out what the real supply demand is in the economy and we don't know six quarters here there's six quarters

SPEAKER_111: of just massive gdp spike there from the preceding quarters and we have two down quarters is it going

SPEAKER_113: to take six quarters to to wash this out or longer i guess no longer because what david said is now

SPEAKER_115: making the problem even worse so because powell was catering to whatever pressure he's been getting and

SPEAKER_56: he must be getting some severe pressure from the white house those were really dovish comments but what is the problem when he is dovish well the practical reality is a couple of things number one is typically

Chamath Palihapitiya: the yields of long dated bonds go down okay that essentially tells everybody else to reprice assets what does that practically do it makes the cost of borrowing roughly cheaper okay it makes the price

SPEAKER_56: of equities particularly ones that are far out on the risk spectrum so specifically let's focus on nasdaq and crypto right tech stocks biotech stocks and and crypto stocks go up much more aggressively so what has powell effectively done he has synthetically created a form of easing again right like his job at the

Chamath Palihapitiya: federal reserve if you think about the money supply as a pipe it's to shrink the pipe to close off demand

SPEAKER_56: to get things in equilibrium so even though he's doing this by the language that he's doing he's

Chamath Palihapitiya: effectively allowing market participants to basically guess that the worst is over and now we're going to

SPEAKER_25: start to expand the pipe again and so they go to the end state so what he effectively did in one speech is basically put a pin at the end of this year and is telling the markets i'm mostly going to be done

Chamath Palihapitiya: and if anything i'm probably going to be cutting in the back half of 23 go on your merry way and there is no see the problem is it's now pushing the problem out another eight quarters like we need to stop this

SPEAKER_25: nonsense he needs to be definitive and he needs to fundamentally break the back of inflation so that

SPEAKER_122: you find out what the true demand is in the economy yeah and he did 0.75 yesterday the markets rallied

SPEAKER_63: on his sort of uh the assumption that he would do a couple of more of these rate hikes and then he'd be done at the second half of the year and then hey maybe we can get back to growth uh or some normalcy uh in real in relate related to all of this uh and by the way there was an interesting story uh

SPEAKER_88: the sax would be interested in did you read paul volker's biography at sax no i've not read it yeah it's i mean i'm familiar with his record but yeah like at one point baker and ray took reagan and volker into a room off of the white house so it wasn't recorded and just said volker to volker the president does not want you to raise rates going into the 84 election full stop and volker's like well i wasn't planning on raising them so there's a lot of politics in this even though people claim they've

SPEAKER_67: already done enough i mean volker raised rates all the way up to like 20 percent he broke the back of inflation it created a very severe recession in i think 1981 82 but by 1983 the economy was rocketing back yeah with lower interest rates and they basically solved the inflation problem hopefully we're not in that situation where powell has to jack up rates so much to break the back of

SPEAKER_66: inflation because it means that we'd be in an even more serious recession so i hope we're not in a volker

SPEAKER_129: type situation just think about that spread sacks 20 versus like three or four percent we're trying to

SPEAKER_25: get to we've never in the history of america ever had cpi print above four and a half or five percent without inflation being brought down by having fed funds not also be greater than four and a half or five percent so at some point inflation will turn over and we'll print six and seven percent but that's

SPEAKER_56: still not below four and a half or five and right now our target fed funds rate is between 2.25 and 2.5 so we could still be only 50 of the way there if inflation remains at four to four to five percent and this is what i think market participants don't want to hear they don't want to hear that there has to be a meaningful form of tightening and politicians don't want to hear that the white house for sure

SPEAKER_25: doesn't want to hear it the problem is that if powell caters to too much of that feedback he's not

SPEAKER_54: going to do what he's supposed to do and why he's put in that job his job is to get it to two percent

SPEAKER_132: and keep price stability and full employment i think there is um a balance here i mean the the reality

SPEAKER_67: is we do not want powell tightening more than he should or more than is necessary to solve inflation because it will cause a serious recession so i think we're we're caught between two pretty bad options here and it's because i think that what happened last year contributed to this i mean

SPEAKER_68: look if you go back to that chart that you just showed what happened in q2 of 2020 we had a very healthy economy going into 2020 in 2019 right and then in q2 of 2020 we had covet but we made the situation even worse with lockdowns and we should basically shut down the whole economy brought it back at least in most states in q3 and then the fed started printing and congress started printing 10 trillion dollars well still by last year the economy was back we had something like 5.7 percent annualized growth this year it's negative why is that i mean this may be the lingering effect of all that stimulus but i think that yeah it is but i do think that the administration made it worse by sending checks into an overheated economy they also created energy scarcity and they just kept

SPEAKER_56: you know spending more money so i'm not saying the white house isn't without fault david but i do think that if all of these geniuses could have actually just taken a simple econ and stats 101 class and explained how year-over-year measurements work to the american people i think they're smart enough to understand it we didn't have to go down this convoluted route we could have just explained we put a lot of excess money in the economy we don't yet know what the full effect of that is we need to let that wash through in the meantime you're going to see some crazy numbers from time

SPEAKER_88: to time and we just have to be patient and the other crazy things you're going to have looking at second

SPEAKER_63: and third order um effects is all these downstream effects people are making business decisions going into these economies shopify just laid off 10 of its workforce about a thousand people on tuesday their stock is down 10 past five days overall 70 year to date um and if you look at this chart and toby uh took blame for this he basically said listen we thought that this was going to be a uh you know fast forward into the future that people would adopt e-commerce in a major way and that would stick here's us e-commerce adoption growth rate massive spike when people were forced to buy all their goods online and now it is regressing to the mean i mean mean reversion is a if you look at

SPEAKER_25: shopify stock if you look at peloton stock if you look at a firm stock if you look at arc you know a

SPEAKER_56: lot of these things were trending in a great direction they had this short-term crazy behavior in the middle of all of this free money and now they've mean reverted and you know we're in the midst of finding out what the real price is i got to give toby a huge um you know round of applause because he is such a great ceo and i'll tell you why last year in the middle of all of this wokeism he wrote this incredible memo which was you know we're not um a family we're a team which i thought was exceptionally well written and really got the point across this time around he just owned it he's like you know i made a huge bet that all of this behavior change was going to be discontinuous and permanent and it turned out i was wrong i'm sorry for that and here's how we're gonna have to course correct in both cases he kind of just put it all out there and he owned it and i think that that's all you can do when you make a bet and it's wrong and here's what he said uh it's now clear

SPEAKER_122: that bet didn't pay off ultimately placing this bet was my call to make and i got this wrong now we have to adjust as a consequence we have to say goodbye to some of you today and i'm deeply sorry for that

SPEAKER_127: i mean everybody made that mistake right so you know it is it's just you're right just own it

SPEAKER_67: everyone was thinking the same thing we all were talking about how covet was this acceleration of this virus and it was going to accelerate all these trends and well that's the acceleration

SPEAKER_56: the rude awakening is going to be for all these people who made all these bets assuming that it's permanent and specifically i mean you know especially around real estate and work from home and all of the stuff benefits and it's all going to change now and the reason i say that is the combination of reversion to the mean will impact a company's bottom line and those boards of directors and ceos will say okay we're just going to have to reset expectations and that's going to touch the employees i don't know if you saw this leaked transcript but you know zuck was asked the question

SPEAKER_146: from this oh god that was classic that was unbelievable he was asking about his like

SPEAKER_11: emotional support days or something i think in the in the middle of like zuck having like a really

SPEAKER_56: serious you know heart to heart with the company about how we're going to have to buckle down and

SPEAKER_149: you know performance individual performance one dude one dude you know schmengi from the back races and he goes what about the covet extra vacation days for those kids almost like he literally his

SPEAKER_155: head almost exposed he's like did you not just listen to what i said i just said if people are not performing at a high level maybe they shouldn't be here and you're asking me about more days just

SPEAKER_80: fire that person to say like you obviously you don't get it you didn't listen anything i said you're not right for this team at this time goodbye he said a version of that he's like there's a lot

SPEAKER_88: of people here that may not be the right freeberg when we look at these uh trends okay uh commerce seems like people are going back to shopping but i want to ask you about two specific ones healthcare it does seem like telemedicine was one of those things that got accelerated during covet do you think that's going to revert to the mean or do you think that you know doing doctor's visits over you know facetime and text and all these consultations going to stick with us and then what about work from home because that does not seem to be uh shifting all that much freeberg the work the

SPEAKER_163: work from home is not shifting well i mean it's people are still staying home uh and you know uh amazon just put a hold on six buildings where they said you can finish the outsides but let's not do the

SPEAKER_94: insides because we don't even know what we're going to do with these buildings and what hybrid's going to look like and zuckerberg hasn't been able to get people to come back to the office and apple seems to

SPEAKER_163: be getting people two or three days a week so it seems like it's still been a struggle and downtown san francisco is empty so we're getting mixed we're getting mixed results back now i would say is the

SPEAKER_64: best way to to describe it so work from home and telemedicine what do you think freeberg i mean

SPEAKER_168: certainly the knowledge economy seems to prefer work from home i mean if you're working on a computer and you don't need to interact with people and you got kids or family you're inclined to stay home so that seems to be a sticking point um you know younger people probably have their own motivations but

SPEAKER_28: there was a good stat on telehealth i'm just trying to find it and i think telehealth surged during covid and 36 of patients used a telehealth service in 2021 420 increase over 2019 and so despite some reversion post covid post lockdowns um there's a significant sticking point that uh and i think

SPEAKER_168: 60 of telehealth patients are women so there's particularly female services that are being rendered through telehealth at an increasing rate than pre-covid and so there's a lot of stuff i mean look we've all had to go sit in the doctor's office for two hours to get some prescription or get a doctor to give us some advice on something they don't need to physically check us out for so you know it certainly seems to be a acceleration in that department offices what was the amazon like was working on 15 warehouses they shut down as well right i mean if you guys remember at the start of covid when you place something on amazon it was like a two-week delay because they didn't have enough capacity to fulfill the order volume you know you looked at toby's chart it's nearly a doubling in e-commerce volume in a week when that happens amazon's you know plus or minus five percent supply chain has to revert to servicing twice as many customers it's just not going to happen so they overbuilt tried to get ahead of the curve remember they hired like you know a hundred thousand workers and you know they they had to make a pipeline for quarters ahead to build warehouses now they're realizing the demand is not going to be there and they're cutting back on 15 warehouses around the country and not going to build them they were buying up so many warehouses

SPEAKER_88: at a couple of companies that were looking for warehouses in los angeles northern california and amazon just bought an option on every single warehouse they could find and now they're

SPEAKER_94: putting them back on the market so they they definitely um went too heavy and then everybody started betting on peloton and teladoc and if you look at teladoc i mean it's off 90 from the peak i

SPEAKER_64: would show the um i would show the peloton chart as well but that would just be gratuitous some of the

SPEAKER_28: stuff to note is like at the end of the day whatever product is better for the consumer they're going to pick you know what's the better way to buy shirts you know what's the better way to get well to find better yeah i mean for the consumer it's like do you want to try them on or do you know what your size right are you buying a brand that you know and a size you know you're gonna buy it online at this point i mean the one thing covet did is it basically created a trial by fire my parents never used doordash before covet so then they were forced to use doordash during covet now they know what it's like and so you know there are now people that never trialed a lot of these services that have trialed them and are now making decisions based on that experience but that's a beautiful example so

SPEAKER_115: just use your parents why do you think let's assume they did why do you think they mean reverted to now

SPEAKER_56: using doordash only in the same percentage as they would have otherwise excellent a little bit

SPEAKER_28: like i think the quality of the food the time to wait the experience of going out to dinner there's a lot of motivating factors that are different by different demos and so whatever the consumer wants they're going to pick if i want to go have a dining experience in person with my friends i'm going to go do that instead of sitting at home ordering doordash and having everyone come sit on the couch and eat dinner together so i think that there's this um you know this call it mean reversion but we have seen call it a broader exposure and we're really going to see the true market dynamics play out i don't think everyone wants to buy shoes online i don't think everyone wants to buy every

SPEAKER_180: piece of clothing online i think people want to go to the store and try stuff on

SPEAKER_25: i think it's that and i think that there's a lot of ancillary social benefits that come with a lot of

SPEAKER_56: these activities that you lose if you just optimize for efficiency so to your point like yeah you can get a burrito but even going to chipotle with your friend is more fun totally get out of the house get out of the house shooting the you know yep um it's just it's and the serendipity yeah you may

Chamath Palihapitiya: run into somebody nothing beats them i will tell you by the way i i do believe that there is a

SPEAKER_28: counter narrative to the idea of work from home and e-commerce moving together i think as people work from home they want to go be in person for other activities more yes the more you're working

SPEAKER_185: from home the more you want to go to dinner with people or lunch to people yeah more you want to go

SPEAKER_28: shop in person because you're stuck in the house all day and you want to go do other stuff and so if you're working in the office you're going to do more e-commerce and if you're working at home you're probably going to do less e-commerce so there's probably some net net balance we saw both of them rise together during covid but now there's more of an equilibrium being reached well i mean

SPEAKER_186: if you don't by the way i think we're change your behavior you may stay home for three days straight

SPEAKER_28: and all of a sudden remember whoa and just remember 60 of the u.s population lives in urban areas where this is kind of an effective kind of conversation we're having i think outside of that it's a very different world and so for 40 of americans this is not like the conversation that you know in

SPEAKER_189: in deeply suburban and rural areas do you guys know what shadow or ghost quitting is you know

SPEAKER_190: what ghost quitting is ghost i saw it on tick tock you stop you stop working i saw it on tick tock but

SPEAKER_112: you're still getting paid it's when you decide to quit mentally but don't actually quit and so you

SPEAKER_56: basically get out get off the corporate rat race by doing the bare minimum to not get fired at a company

SPEAKER_104: oh like sax during the science segment and so i uh you know i i think that there's all of these like

SPEAKER_56: invented things that people do that they think they can get away with which they generally can in a moment of prosperity where in a moment of actually like buckling down when earnings matter and profits matter and investor pressure matters all of this stuff i think is going to mean revert so this is sort of my my opinion on all of this which is i think that most of these behaviors will

SPEAKER_53: eventually take over but it's still many years away and right now we have to go through the process of just getting back to where we were meant to be in the first place i think one area with significant

SPEAKER_28: disequilibrium right now i mean to your point is is productivity i think it's very hard uh to assess um and qualify productivity uh for knowledge workers in this environment and this is for employed base right remember we talked about last time like a large percentage of the u.s workforce has moved to more of an independent contractor sole service provider kind of model for how they're interacting and working in the world um but i'm talking about knowledge workers in an employed environment and it is becoming difficult for managers and for companies to assess you know the the quality and the level of work being produced relative to its potential it's not the same as it used to be when you'd be able to have in-person monitoring and interaction and so you know i saw a stat the other day where it was like most companies are asking workers to come home most of the workers are to come to the office most of the workers are saying no and then most of the bosses don't know what to say in response and they're still sitting on the sidelines like okay okay don't come to work uh okay fired yeah and so there is this and by the way this this may yield a competitive advantage for businesses um in the marketplace that figure out how to assess productivity and how to assess performance in in their organization right now in this rapidly shifted totally different workforce um than what we had a few years ago because it's so easy to take four hours off in the afternoon go to lunch hang out have beers come back get back online get back on slack do stuff and so there's this real challenge um i think for organizations and a real disequilibrium of productivity and output right now

SPEAKER_114: i've had to deal with you guys looked at the tick tocks of these people that are like yes in the life of like a google engineer or day in the life they work for 30 minutes and then

SPEAKER_206: they're like four hours at the gym they don't work they don't work they're literally smoking weed and playing video games and everyone knows cats managers talking about managers know it senior vps know it

SPEAKER_28: the ceos know it it's this is my point people just don't know how to manage it it's a real i figured out it's a real disequilibrium in the workforce because the way you managed it before is everyone would show up to work or they wouldn't someone's not in the office they're not working they get fired now what do you do period you know we and no one wants to be monitored no one wants to manage keystrokes through a freaking remote computer and figure out how much you're typing actually uh

SPEAKER_172: it's interesting you mentioned what you do jacal to your employees no no no no no there are people

SPEAKER_215: doing that call centers actually do that so call centers and sales teams they have monitoring software

SPEAKER_28: customer service and call centers totally sales people you can totally track productivity i'm talking about creators producers right like yeah i actually have come up with some strategies for this so we have a

SPEAKER_88: a lot of writers uh doing newsletters and stuff like that and so we did was we created a block in the afternoon we've been testing where three writers will get together in a pod and they work on a

SPEAKER_94: newsletter together so instead of three writers writing three different newsletters you have three writers collaborate on three different newsletters they do one for two hours one for two uh one for a 90 minutes one for 90 minutes and then a total of three people read the newsletters

SPEAKER_163: uh well it's doing four or five million dollars advertising it's hundreds of thousands of people a day but okay but anyway the point is um i didn't mention the name of the company there's no plug in here but

SPEAKER_94: by putting people into a zoom yeah no no you put people in a zoom or a huddle on slack which is like

SPEAKER_222: an audio only and then they have to deliver work to each other it's kind of how developers work or sales teams work with leads and then in things like programming like peer program exactly and then with and it also makes people less lonely and it builds social fabric so there are techniques that are emerging the other one i've looked at is i tell anybody if you're doing any type of knowledge work you need to create a notion or a coda page depending on what you use and update us on that and then send it to the uh group chat you know to the general channel hey i was working on the strategy for this so when people say they're working on strategy i have them documented and i say share us share with us the google doc and i use the amazon six page you know uh philosophy of a right first culture and now people have to write it down so i've been teaching people how to write use grammarly or hemingway app to be better writers and then what you can do is as a manager you can just look at your notion or your coda and see the change log and when i see people in a change log and i see they made no commits i'm like what is this person doing they said they did all the strategy stuff where is it where is the strategy stuff write it down so if you switch to a right first culture and then train people how to write and become more confident writers all that knowledge gets captured on your knowledge base and you can actually see people getting done it's not perfect but i think it's actually intellectually better than being in an office if you know how to do it because in an office people are also performative they're doing like meetings they're pretending

SPEAKER_94: they're working they they're they're actually reading the news or you know or whatever so sex

SPEAKER_169: what are you doing to uh monitor your employees covertly and keep them uh productive we don't need

SPEAKER_67: to monitor our employees that way because we're a small team of yes and they're highly motivated you know but look it it is an issue i don't i think where work from home is beneficial is on the hiring side right it's so much easier to hire for a job when your potential pool is anyone in the world you're not just geographically limited to the city in which your office is so that was the temptation for all these companies to go remote is it made hiring so much easier but there's no question that it makes management much harder and scaling the company much harder and building culture much harder and so there's some real trade-offs there i don't think companies totally wrap their heads around it

SPEAKER_68: but look in addition to productivity there's one other aspect of this economy that i think is really broken so the the chamber of commerce says that 3.25 million fewer americans are working today than they were in february of 2020. so basically if you go back to the month before covet we had over 3 million more americans in jobs than we do today and yet the unemployment rate is still in the three percent range and the reason is because that if somebody drops out of the labor force and isn't looking for work they don't get counted in the unemployment rate so we do have a if you define unemployment as a large number of people who aren't working we have a huge unemployment problem but the problem is they're not they're not counted because they're supposedly not not looking for work so i don't think this economy is that healthy and and i think that there's a lot of distortions that have been

SPEAKER_230: created by government the last couple years suspect is what you're saying right like labor participation

SPEAKER_68: is all this data the data is suspect the labels are suspect i mean like we talked about all of a sudden we can't know what a recession is and let's just bring up one other thing that just happened today so mansion cut a deal with schumer to bring back to bring back a slimmed down version of bbb thankfully it's not four trillion like biden wanted it's 750 trillion okay but what are they calling billy billion right okay so you know thankfully it's it's a slimmed down bill but what are they calling this they're

SPEAKER_231: all of a sudden calling it the inflation reduction act of 2022. it's like are you kidding this doesn't

SPEAKER_233: are they trolling us with the names of these bills the bills are never what's in the bill why don't they

SPEAKER_88: just call it the green energy bill and the screw private equity bill i mean that's basically what it is

SPEAKER_180: yeah well inflation reduction sells to everyone right but jason the media the media is not holding

SPEAKER_70: the administration accountable if we had if we had an honest media they the the headline today would be

SPEAKER_237: you're not going to get it from that train's left the station sacks we you can only get it on this pod or other podcasts yeah what did president mansion get for this deal he agreed to it what did what did

SPEAKER_153: president mansion get well he secured some bag right did you see what i got in the group shot

SPEAKER_244: there are going to be he agreed he's like i got a pipeline there's going to be huge uh handouts and

SPEAKER_66: pork for the state of west virginia there's no question about it i mean if you look at this bill

SPEAKER_68: okay the i mean let me just we should just look at what's in it and yeah more and more is going to come out over the next few weeks right it's only one day so we're going to learn a lot more about

SPEAKER_214: what's in this but the largest republicans feel like can you explain the dynamic as well after you get

SPEAKER_88: through this of why the republicans felt like now that he double crossed them because the democrats felt double crossed by man president mansion and now the republicans are feeling double crossed

SPEAKER_67: by president mansion well i i don't know that you can use the word double cross because he's not a republican and he had no obligation but look the the but there's no question that mansion went back on

SPEAKER_68: what he said just a few weeks ago he was saying that build back better was unacceptable because it would contribute to the inflation problem in fact he's been reasonable since last summer he's been saying that we have a growing inflation problem we can't contribute to it with a lot more government spending now he's agreed to a 750 750 billion of of which something like 450 is new spending so yeah it's it's uh it's a smaller package than we had before but if your concern was inflation a few weeks ago you can't justify this you certainly can't call it an inflation reduction act i mean that's just

SPEAKER_48: patently dishonest well how do they come up with it being inflation reduction is it because

SPEAKER_254: the healthcare stuff is theoretically going to help consumers have more money to spend

SPEAKER_68: it's a tenuous argument but if you want to if you want to make the argument there's some cap on what seniors pay for prescription drugs and then there are subsidies for people who are in the market for an electric vehicle however those are small adjustments those are small rebates to a small segment of the population i don't think you can argue in good faith that this bill will reduce cpi just you know that's just not a plausible argument and the vast majority of the bill like you said are subsidies for clean energy which are basically handouts to special interests in the donor class in the democratic party just let's just itemize some of these things so the largest single outlay 60 billion is for quote environmental justice initiatives to address the unequal effects of pollution on low-income communities and communities of color this includes 3 billion to invest in community-led projects and disadvantaged communities and another 3 billion to support neighborhood equity safety and affordable transportation access another 30 billion shovel to states in the form of grant and loan programs for states electric utilities to advance the green energy transition 30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels wind turbines batteries and critical minerals processing so that's basically going to companies right 20 billion in loans to build new clean vehicle manufacturing facilities across the u.s and 2 billion to revamp existing auto plants to make clean vehicles 20 billion for the agricultural sector to quote curb emissions 3 billion to reduce air pollution at ports 10 billion investment tax credit to manufacturing facilities for things like electric vehicles wind turbines and solar panels it seems redundant the 30 billion

SPEAKER_257: dollar outlay i just mentioned but it's another giveaway to democratic donors and wouldn't that be good for

SPEAKER_88: corporations chamath wouldn't that spending be good for energy independence in addition to climate because we've been talking about being energy independent if we have more evs more batteries more solar that's a good thing right we want to be energy independent so this seems like we get two wins or possibly three one we we get economic activity two we reduce our dependence on foreign oil and three we

SPEAKER_163: stop burning a hole in the ozone and increasing the temperature of the planet seems like three good

SPEAKER_53: things we have to i think we have to see the forest and the trees here and there's a there's one good part of this build and then there's the kind of more ugly reality that it avoids the ugly reality is unfortunately or fortunately or maybe without taking emotion out of it we are dependent on fossil fuels for very long time it is a necessary bridge fuel and so we need to if we're talking about energy independence

SPEAKER_56: it can't happen without us frankly drilling more and subsidizing the capital incentives of private companies to go and do this exploration work which they have stopped jason and the reason they've stopped is that they don't trust that these oil prices will stay this high and so they don't want to make these outlays and investments for the next five to ten years because they're worried that it's going

SPEAKER_53: to be a rug pull which did happen to them in the back half of uh last decade and the early parts of

SPEAKER_260: this decade so they're like once bitten twice shy they're not they're not going to touch this

SPEAKER_122: so you're saying oil companies that would do some exploration it would cost them whatever amount two

SPEAKER_63: dollars to get the gasoline out to get the gasoline out of the earth and then process it but they're afraid it's going to be negative they're not going to be able to sell that gasoline i think

SPEAKER_25: i think they're afraid that you know the united states government may impinge on their ability to actually process it that it may there may be tariffs and costs and taxes that they don't they'll be upside down forecast they'll be upside down so they just don't want to be and right now and you saw

SPEAKER_56: this i don't know if you guys saw but like shell and exxon and these guys are printing enormous record profits so their incentives to change the status quo right now is zero they want less supply because then they can raise prices they have the perfect situation right now which is it's an incredibly energy intensive world we live in and we don't have nearly enough energy to do the work that needs to get done and and by the way and you saw this this week already where you know putin cut nordstream by another 50 it was already running at 40 capacity he cut it down to 20 it's only getting worse so i don't know i mean i think this bill could be good i haven't looked at the specifics to give you a very

SPEAKER_186: well the specifics aren't even out yet i did see the ev credits uh friedberg and i thought that these

SPEAKER_63: were particularly well constructed 7 500 bucks off of a new car but you have to uh be in the 150k salary or less on your taxes so rich people can't get these and it can only be for an 80 000 new car a 50 000 or 25 000 used and so they did seem to be started pretty well and i do know that those incentives did work in the early days of tesla because when you went to the website you would look at the price and you know this would be 10 off of a new car and they did drive sales and it was uh pretty significant what are your thoughts on the ev tax credit is that something that's a wise thing and then what do you think overall about spending a couple of hundred billion dollars on uh reducing emissions and becoming more energy independent at the same time seems like a laudable

SPEAKER_274: strategy to you nope seems like a total waste of money okay unpack it please the ev tax credit is

SPEAKER_28: just giving away money to ev car manufacturers there's already enough demand the prices are low enough there's uh enough consumer interest there's enough consumer intent i don't think you need to put this money out there distorts a market that's already functioning well and this goes back to my point about the role of you know government and how we create you know create incentives or spend money uh this is not a place we need to be spending money because there isn't an absolute need there's no data that indicates that this will accelerate a transition to a carbon-free economy or that it's even needed uh it really is a um a point of view that people hold and they believe that evs are good they're good for climate change we should accelerate it therefore we should spend money on it without any accountability or proof that these tax credits will actually motivate a market to move faster or quicker than it is already moving and so it is just spending taxpayer dollars that could theoretically not be spent or be spent in a more effective way to improve the lives of people broadly um in this country so yeah i don't i don't fully agree with that i haven't seen any data that tells

SPEAKER_163: me this makes sense anecdotally you don't think seventy five hundred dollars off of seventy five thousand dollar ev is attractive i don't think the evs are seventy five thousand dollars gm and others

SPEAKER_28: have great low priced evs and there's a ton of market demand and they can't keep up with production and you know giving people seventy five hundred dollars off a car that manufacturers are still struggling to keep up with making because there's so much demand already you don't need to do it it is so much cheaper to drive an electric vehicle now um by plugging this thing in and spending money on gas that people already want to buy these things they pay for themselves super fast every consumer wants to save money on transportation and you will save money by buying an electric vehicle so you will already buy an electric vehicle you don't need government money to get you to buy an electric

SPEAKER_115: vehicle to freeberg's point there is um a lot of um analysis that's been done on consumer adoption

SPEAKER_25: patterns and typically for a new good or service the tipping point is around five percent mass market adoption from when it goes from early adopters to the mass market and evs just cross five percent so to his point the historical data would tell you that we're now past the critical point where it's no

SPEAKER_53: longer questionable and now it's just going to happen so it's not early adopters we're getting to

SPEAKER_56: the the mass now it's mass market i mean i'll tell you like the best the best thing about ev adoption but for me for having an ev is never having to go to the gas station amazing amazing yeah i just just

SPEAKER_28: that one thing is like i'll just give you guys currently it's about um 34.6 kilowatt hours per 100 miles okay i'll just get let's just do some math together let's say a kilowatt hour in the u.s costs about 10 cents okay so that's about three dollars and 50 cents to drive 100 miles in an electric car that's a lot cheaper than paying 15 for gas to drive the same distance in a gas car you don't need the tax credit to get people to buy these things these cars are financeable there's a very liquid very active lending market you you get paid back on these cars within a few months if you're

SPEAKER_166: better would you direct if you were going to direct some stimulus to i would not say anything right

SPEAKER_274: now we don't we just talked about how we don't need to stimulate the economy i would not know where

SPEAKER_113: the economy i'm talking about to you you believe global warming's happening friedberg yes look you

SPEAKER_284: want my point of view on climate change and industry i i think i think humans i think humans are on a

SPEAKER_28: driven naturally market driven path to resolving um carbon output in our industrial systems and i don't think that government intervention with tax credits and specific consumer products is actually going to accelerate or resolve um you know these changes that are needed we need to not change consumer behavior consumers always want to have cheaper faster better what we need and you know at the end of the day what we need to do is change the way that we're producing and making things because that's ultimately what's going to drive this transition and guess what consumers are demanding things that are you know more efficient that are more effective and efficiency ultimately resolves to less carbon ultimately resolves to less land less energy and industry has always resolved to greater efficiency natural market forces improve the efficiency of every industrial system so stimulus not necessary mankind is ever created and i free market doesn't it is a matter of um time and a matter of natural evolution that we will resolve all of the factors that are driving climate change from animal agriculture to transportation systems to energy systems these are all going to get completely will we do it in time no technical tools we absolutely will and at the end of the day we can pull carbon out of the atmosphere and resolve it into products we have tools to do that as well so i am an eternal optimist but in this particular case i think that this century much of what we're throwing our hands about and you remember at the beginning of the 20th century we thought we were going to run out of food then suddenly we invented the haber bosch process and created fertilizer out of air it was an incredible incredible invention that saved mankind we have had time and time again in the history of humanity these thoughts that weren't an existential crisis we thought we would have peak oil and we and we have had these points of view that we're in an existential crisis and humanity is about to end and every single time we figured out a way out of it and we didn't figure out a way out of it because the government came along and said here's a tax credit and we've gotten sick and we've gotten drunk on government spending and we think that it is the solution to every problem we have as a species you know the biggest solution to our problems is our ingenuity and then let the markets figured out consumers are smart businesses are smart they will figure out ways to resolve these solutions they don't need to have these handouts and i think that that's um that's a really important point that we've kind of missed and i'll say we were talking earlier about the economy this stimulus we've been giving ourselves caffeine since 2008 when the fed started to build up this balance sheet and we got used to the idea remember before this it was like oh my god multi-million dollar bills and then it became multi-billion dollar bills then we had an 800 billion dollar bay out in 2008 and suddenly it was the multiple of hundred billion and the multiple of a trillion and this expectation now we've kind of reset the clock and everything now is in what multiple of hundred billion or what multiple of trillion we're going to spend on stuff and no one's even batting an eye at the size of these um the the bills anymore freeberg what is a bigger existential threat to the united states is it climate or is it overspending by our government i think it's over um i think the biggest threat is uh is productivity um i think that as a as a society we've gotten to the point that we are so well off that um we have so many things that we don't realize we didn't have 50 years ago and you know read pinkner's book on enlightenment now and just go through those 200 charts he puts in there it will blow your mind and if you actually sit down and think about it and have a broader perspective on where we sit in this country today versus where we were 100 years 50 years even 30 years ago you will say oh my god we live in an absolute luxurious state in this country golden and golden era and it is a condition that unfortunately reaps um you know a decline in productivity because at that point we're entitled to some degree some people are entitled there are many people in this country that are still very hungry there are many people in this country that still want to progress and frankly i think a lot of the um the lax behavior from government entities actually holds us back from accelerating our productivity outings because it gives people many incentives and many reasons and industry many incentives and many reasons to not solve problems and i think that we

SPEAKER_25: solve problems and we're left to our own shaman there was an article i posted nick you can put it in about the congo and that they've decided to auction a bunch of land to oil companies and um um i think before they tried to heed sort of you know the west's directives and they said okay well

SPEAKER_56: let's build a land bank and we'll put a bunch of money in and so then the you know people in the in the congo will have money for things and you won't have to sell off the oil rights and only tens of millions of dollars showed up and then the congolese were like they threw up their hand i'll just read

SPEAKER_25: the quote because i think it's interesting congo's sole goal for the auction said the government official is to earn enough revenue to help the struggling nation finance programs to reduce poverty and generate badly needed economic growth that is our priority he said our priority is not to save the planet that's quite a stark statement when you read it but but the reality is in one

SPEAKER_56: generation what will happen is they will feed the world's desire for fossil fuels that will generate

SPEAKER_25: a lot of revenue hopefully it doesn't get pilfered and so it gets invested in health care and education and within a generation this country could be in a completely different situation

SPEAKER_56: allowing the productivity of that entire population of that country to do what they think is right so i'm generally of the belief that that that freeberg's right on this do you think though we should

SPEAKER_88: subsidize evs to increase the percentage and then also for solar just give me those two chamath solar and evs do you think they should be subsidized or not in the united states it depends

SPEAKER_25: on how and at what point of the market cycle the government's job is to create economic incentives

Chamath Palihapitiya: that tip the balance of power towards investment so if you are sitting here 15 years ago the price of

SPEAKER_25: solar panels was sky high it was incomprehensible that we could make solar equivalent to any other form of energy the only way that we were able to close the gap was through government subsidies but what

Chamath Palihapitiya: that did was allow a bunch of companies to build businesses to make revenues and then also to make profits that then the public markets valued those public markets then put pressure on those companies to take those profits to become more efficient to make the panels cheaper and 15 years later we're now at parity so that was a really great example of the government stepping in to smooth out an imbalance in the investment incentive of the private markets that is where they are exceptional so in any market they should be able to do this but i think what freebrook is saying is when then they do do it successfully and a market starts to germinate on its own where supply and demand happens naturally between the private markets the worst thing a government can do is step in because it completely perturbs what true supply or true demand is and that is what causes all of this crazy stuff that we deal with

SPEAKER_28: jacal fast forward assume that there's a 7 500 tax credit for evs that artificially makes evs cheaper and then a better technology than evs comes along let's assume it's some nuclear fusion cold fusion mr fusion car like from back to the future and that car inevitably has to fight against the cheaper car because the cheaper car is subsidized by the government we see this in a lot of markets that already exist in food in energy in infrastructure where government subsidies that are embedded in the operating model of that industry and that industry becomes kind of reliant and dependent on it totally distorts the ability for the market to naturally transition to a more productive more efficient state and that more productive more efficient state ultimately is cheaper better for consumers and better for the planet and we're we hold ourselves back when we insert government dollars into well-functioning markets i do think the government has an important role as i mentioned last time in pure science in seeding new markets in seeding these opportunities in identifying paths that are quantum leap efficiency improvements in production systems in industrial systems in ways of living once those have been identified if those breakthroughs have been kind of catalyzed boom let the market take off because it's going to take off but we shouldn't be in this business so you believe evs and solar are there already absolutely they're cheaper and so let me point let me just give you one one point of reference let's let's use chamoff's congolese example let's assume that there's someone that lives in the congo and i said to this person who's probably subsisting on less than three thousand dollars a year of income and they're probably living you know day to day on finding food and you said to this person in the united states they have these cars they're called electric cars and they're cheaper than gas cars and they're um you you make more money or you save money by buying one of these cars and they're cheaper now and we're giving people seventy five hundred dollars to buy one this person who's making three grand a year would say what it is a state of luxury that allows us to do this and frankly i think it's it's a state of excess abundance and that's what i'm most worried

SPEAKER_63: about sacks what are your thoughts on the government giving these type of subsidies to accelerate solar

SPEAKER_67: or any of these the whole bill seems anachronistic you know first of all it's raising taxes by 739 billion at a time when we're entering a recession i don't know any economist who thinks that tax increases help the economy we just talked about how the economy is in a really tenuous position so this is not the right medicine right now then you've got the fact that the vast majority of the

SPEAKER_68: spending this bill goes to these you know energy subsidies which are just they're not going to help the average person there's very little money in this bill that helps the average working class person these are basically handouts there's basically pork barrel spending for democratic party donors and special interests and like freeberg i think just articulated very well they're not necessary right now the what's driving demand for electric vehicles and solar panels and so on is first of all the products just keep getting better and better and second they keep moving down the cost curve as technology and innovation gets better these products get cheaper that's what's fundamentally driving the demand we don't need the government now again we need to accelerate it in an anachronistic way to shovel out all this money at a time we can't afford it you know look i'm glad that 300 billion of the bill is supposedly going to deficit reduction i hope those numbers actually materialize but we're still 30 trillion in debt and now that interest rates have gone from basically zero to around three percent the imputed debt service on our debts basically gone has increased by almost a trillion dollars that is a lot of money so just like somebody who had a

SPEAKER_63: variable mortgage the united states is on a variable mortgage with our debt and so when

David Sacks: interest rates go up we're gonna have to pay exactly so if interest rates stay at this call a three percent level which is roughly where the 10-year t-bill's been you know bouncing around at

SPEAKER_68: that is a lot of debt service a trillion dollars a year of debt service so i think we're probably entering an era an overall era of austerity that lasts more than just this year or even this presidency and i think we'll look back at all this wasteful spending this last 10 20 trillion of spending as money we didn't need to spend that we're gonna be paying for for a long time so to be shoveling out another 300 billion plus of these programs and again once again going to corporations and special

SPEAKER_04: interests not to the average you know person who needs it it's just so irresponsible i have a question

SPEAKER_56: for friedberg one of the one of your exceptions there was investments in science you want to talk

SPEAKER_315: about your opinion on the quality of the grant process at the nih and whether we are doing the real work necessary to get the right things funded yeah i mean i think it's a good transition to what

SPEAKER_28: happened this week which was that there was a major uh potential fraud uncovered in alzheimer's research which has led to over a billion and a half dollars of funding and grants being given out to follow on alzheimer's research programs in the years that followed this initial paper so you know in 2006 there was a paper published in the journal nature about amyloid beta proteins that impaired memory and brains which then became kind of the leading theory for the cause and the driver of alzheimer's disease and much of the research and funding that followed from there which is now up to several billion dollars uh in in total funding in private and public institutions last year alone the nih funded 287 million dollars in research into amyloid beta and it turns out that the initial paper was shown to be fraudulent uh and so you know just uh recently uh the journal science published in detail an analysis of the photos of the western blot measurements the protein recognition images that the scientist used in this initial paper were forged and that many papers of his were then forged years later and um this paper is one of the most cited papers in alzheimer's research and much of the work that's been done on alzheimer's came out of this um and if you guys remember last year we talked about that biogen drug that biogen drug is meant to stop amyloid beta plaque and you know the projection is that alzheimer's drug and and remember there was a panel of scientists that looked at the data for that drug that biogen got approval for from the fda and they all said this does not show conclusively in any way that it improves alzheimer's and the fda still approved the drug because so much of the nih funding went into the research uh for uh amyloid beta and so the assumption has always been this is the cause of alzheimer's this is the way to resolve it and everyone gets so strongly held in that core belief and there's so much money behind it that we can't turn away and say maybe we're wrong and this is the problem when science meets money um once you go from funding something and then suddenly a whole bunch more money pours into it everyone's gonna look bad and everything's gonna fall apart and everyone fears that the system fails if you realize that something you did and said was so totally wrong we can even argue this is what happened recently with kovid the masks the vaccines all of the statements that were made that you have to keep doubling down every system has bad actors

SPEAKER_88: you know people plagiarize fraud whatever is this like a systematic thing and doesn't science protect against this because people then do double blind studies and try to replicate studies two

SPEAKER_318: things because like jason blair eventually got caught right at the new york times it was only a matter of time before somebody said like his description of my back porch was not accurate

SPEAKER_28: and i never talked to this journal let's say that you're a smart up-and-coming scientist your job is to is to publish research that gets attention and that you can then go raise grants from the nih and others from on so you want to get some good papers out you want to get attention and then you want to forward the research that's already being done it is to no one's incentive to go out and try and retest something that someone's already published on even though that's what you're supposed to do in science there's no motivation there's no dollars to do this it's um it's a disincentive to your career it's a disincentive to your ability as a scientist to source funding and to source grants to go back and retest assumptions that are already strongly held beliefs in the industry i'll give you another strong example that just came out um two weeks ago you know um you guys heard of ssri antidepressant drugs right 37 million americans are on these drugs uh the market is uh is projected to be at about 25 billion in the next few years that's how much um americans uh are spending on these uh on these antidepressant drugs half a sex but yes go on yeah right um so there was a paper published in nature a few weeks ago and the nature journal pulled all the research and all the data from 17 other studies that was across several hundred thousand patients and their conclusion was um that there is effectively uh no proof that these ssri drugs have an effect on depression have a positive effect on depression that um you know serotonin and the idea that you know serotonin uptake should kind of have a driving effect on depression and this has been the assumption that's been held now for you know for many years i mean you know i think the original paper on this was published uh probably north of 20 years ago but the industry is so big right the drug companies are making 20 25 billion dollars a year on this drug on these drugs and scientists are incentivized to further that research that supports that research and so they can go out and get nih grants because it's already an accepted proven belief that this is driving

SPEAKER_324: is there a solution to this like for every dollar that's spent on primary you know a dollar needs

SPEAKER_88: to be sent on double blind testing it and making sure that it's accurate should there because we have

SPEAKER_222: this issue in journalism right everybody is a content creator reblogger and opinion journalist but there's very few now investigative journalists left the actual problem is the pure is peer review systems

SPEAKER_56: entirely in my opinion like the the problem with this study is that this was done by an up-and-coming researcher in 2006 at the university of minnesota uh under a researcher who was well known and so there was zero incentive as friedberg said to really push back when well credentialed scientists tried to find this amyloid beta star 56 they couldn't find it and you know lo and behold those articles don't get published because they don't get accepted why because it unravels the entire game that folks will play so you know if you're a well-educated phd with postdoc in the right places supporting other people it's just the loop that goes on forever the article goes on to talk about how that person who wrote that initial article eventually got this very prestigious multi-year grant from the nih

Chamath Palihapitiya: by a person who was his reviewer who worked on the 2006 paper with him i mean these are some pretty

SPEAKER_56: blatant conflicts of interest but the reason they don't get uncovered is like who's who's going to step in and all of a sudden become the let me strike an analogy here you know there's a seedling of

SPEAKER_28: fraud here obviously some guy took some freaking photos and photoshopped them and doctored them or whatever but we then tell ourselves stories and those stories get us access to money which allows us to pursue more science which is meant to forward the market and then eventually the market gets forwarded so much and you spend a billion and a half dollars and it turns out the whole thing doesn't work just like stock markets it starts out as a voting machine in the beginning and it's a weighing machine over time the same is true in science you will have a voting machine in the beginning where everyone has some belief some theory some hypothesis and they all want to believe it and they forward it and they fund it and they fund it but ultimately if it's not true and it doesn't actually resolve in real world change the market will collapse the stock will collapse and that's what just happened with um amyloid beta and alzheimer's to a large degree there's a billion and a half dollar market cap you can think about it or billion a half dollars of funding that's gone into this no that's right here that's pretty well no there was a billion and a half of nih funding over time

SPEAKER_56: this is just the nih money no what i'm saying is the nih budget per year for alzheimer's and dementia

SPEAKER_25: is 1.9 billion yeah yeah and half of it if you look at the tags if you just search the tags half the money has gone into alzheimer's disease amyloid beta so the point is you could orient

SPEAKER_56: the terms you used and the way in which you wrote your grants to disproportionately affect the likelihood of getting money separately there's a whole body of researchers that have felt for a very long time that specific forms of infection viruses um lyme disease could actually be a precursor to alzheimer's and it has been poorly researched because the funding dollars weren't there so the there's a

SPEAKER_222: lot of other theory mitochondrial dysfunction yeah yeah so freeberg when we look at this a bad actor

SPEAKER_325: committing fraud can send the entire uh deployment of capital in science on a multi-billion dollar

SPEAKER_56: trajectory of the human race come on like it's not just about like we didn't get the dollars in it's if you don't take the path the drug doesn't get discovered that's a really big deal

SPEAKER_28: and now that this and now the drug is in the market biogen gets approval and people start taking it and we're seeing the data it doesn't work and no one wants to use it so the market has collapsed and you kind of go back to the origin it's like the market collapses ultimately the weighing machine happens because the science doesn't work it's not there and there was no incentive no one got paid along the way imagine if there was a bounty program to go and disprove papers you know imagine if there

SPEAKER_88: was a system that's what i was talking about what is the safeguard and we do have that in

SPEAKER_25: public markets it's called shorting no there is short stocks it's called pub peer the problem is if you go to pub here and all of a sudden put your name out there as someone calling it out your

SPEAKER_56: professional career inside a research institution is finished right if your job is they're not heroes

SPEAKER_28: no if your job is to disprove other people's stuff you don't you don't forward your career right i

SPEAKER_88: mean there's a it's a really those people should be heroes there's those are like bug bounty programs they have to look at it like bug bounty programs in tech or shorting stocks and the problem is that

SPEAKER_56: this community is extremely small highly specialized and their impacts are enormous on all of society but you can't replace them with somebody else very easily because it takes an enormous amount of expertise like if you read that science article the amount of work science took six months of due diligence before they even had the courage to put this thing out there they had all kinds of different teams trying to prove what this guy had found before they were willing to put

SPEAKER_28: ink to this thing yeah when things are starting to feel like they're ultimately moving to market or getting to market the more money starts to flow in another good example of this is zymergen and ginkgo okay so in the past week zymergen was acquired for 300 million dollars it was announced that they're going to be acquired by ginkgo buyer works both of whom are public companies ginkgo went public and i think a 20 billion dollar market cap as a spac a few months ago zymergen went public at you know 4 billion or whatever they went public at zymergen being acquired for 300 million dollars comes off of them having raised a total of one and a half billion dollars of capital from many investors including softbank and in their ipo since they were founded in 2013. both of these businesses do exactly the same thing or similar things which is pursue the industrialization of synthetic biology synthetic biology has been talked about you know or pursued for 20 years in an industrial setting the kind of gen one of synthetic bio companies was amorous jevo kior solazyme these companies were all engineering cells you change the genome or the dna of the cells you get those cells to make a product you want them to make you put them in what's called a bioreactor and they make the product you can make bioplastics you can make animal proteins you can make fuel and so these um and you put sugar water in the tank so you're programming the organism to make stuff for you and there's a lot of technical challenges right how do you change the genome how do you get it to be more productive what are the environmental conditions of the bioreactor how do you scale this thing up and so on and so many of them had early stage proof points and then extrapolated out that this is going to work at scale so all the gen one companies largely failed jevo kior solazyme they were all trying to compete with the price of oil and they lost and so they could never actually the science worked in the lab but getting it to a big scale there was a million things that went that suddenly were kind of proven or disproven along the way and they all kind of pivoted and became cosmetics companies and kind of did high-end food and other stuff and then ginkgo and zymergen were kind of gen two they were like we're going to reduce the cost improve the time scale of these synthetic biology programs and they started using industrial robots and arms zymergen made a bunch of kind of strategic errors where they were like we're going to make the product and design the organisms so it took a lot more money a lot more time and um as they kind of stepped up and tried to scale up turns out a lot of the things that they believed to be true weren't quite true but the ceo did a great job selling the story josh hoffman he went out for years and he told everyone you know we're gonna kind of create this this factory and we're gonna make everything in the world using biology it's gonna transform uh the world and we've talked about this is it a true story yeah and so look there's so much of the fundamentals are true but the industrialization the amount of capital these guys raised and what they promised they would deliver on when turned out not to quite beat the economics not to quite get there and the market decisions they made about what products to go after how quickly to scale up building their own facilities there's just a lot of strategic errors and i think the storytelling got ahead of where the business was you know we saw this a lot in other businesses in the past years we've talked about crypto and other markets um but these were really key examples because the science is so compelling and the narrative is so compelling and if it's right and if it works it changes the world and i think the same was true of amyloid beta and alzheimer's everyone wanted it to be true ssris everyone wants there to be a cure for depression that you take a pill and it you solve depression everyone wants to you know have a drug that you take and it ends alzheimer's everyone wants to print all the world's products in a factory using cells but there's a lot more to it and as you kind of get through the nuanced 10 to 20 year cycle of science moves to technology moves to industry those stages are wrought with errors and issues and ultimately may not actually yield what we expected it to yield and those stories start to fall apart and that's what happened with zymergen they're getting bought we look back on this friedberg in 20 years and say hey yeah these

SPEAKER_163: things were total train wrecks they flipped the car but it was a step in the right direction and

SPEAKER_63: yeah that was 100 percent capital but you know something will be built on top of it just like mainframes or mini computers to smartphones the first system of call it synthetic biology

SPEAKER_28: or recombinant dna where we took dna from one organism and we put it in a in a in a microbe to make stuff for us was genentech in 1978. prior to 1978 the way we got insulin is we actually processed pig parts so it would take like you know hundreds of kilograms of pig parts to make just a few grams of insulin and genentech took the dna for human insulin and they put it in a bacterial cell and they made human insulin in a bioreactor and that really kind of ushered in this this era of you know industrial synthetic biology that all of these companies kind of followed uh suit to do in different markets but remember biologics the entire pharma industry and biologic drugs is all made this way we take the um the dna to code for certain antibodies or proteins we put it in microbes and those microbes make those products for us that biologics drug industry is a 350 billion dollar annual revenue industry today and so it works it's just a matter of when and what the right products are industrial enzymes 25 billion dollar annual revenue today so there are markets that are working it is working but this whole like we're going to change the world overnight isn't really you know true and so these stories catch up to us and i think we've seen this where i call it science

SPEAKER_305: meets money you know money usually wins um and the science isn't quite there yet and so we've seen this

SPEAKER_301: the genentech story is amazing i mean tom perkins from kleiner perkins fame like willed that company into being and they yeah it's pretty amazing how in the old days of venture capital they basically

SPEAKER_88: built these companies like you're doing today freeberg in like a production board model he he basically incubated genentech and then surprised the world with like hey we have synthetic insulin

SPEAKER_352: here um it was like truly a revolutionary moment for silicon valley yeah there isn't a single material

SPEAKER_28: or food or a fuel or product that we ultimately won't be able to make using synthetic biology it's just a matter of how do we get from here to there and the storytelling kind of gets you a bunch of money and then you get ahead of your skis and then boom you fall down same happened in alzheimer's same happened with ssris and i think we'll see this happen a lot but like when science gets exciting a lot of money gets behind it and sometimes it can kind of you know get ahead of its skis and fall down but and it's excited are sacks how excited are you for this

SPEAKER_208: revolution instead of biology it's actually an investor with us in one of our companies in synthetic biology he may not remember but he's got some money oh i won't name the company but he's got

SPEAKER_357: some money oh yeah how's that doing did you fall asleep in the board meeting no we're not on the

SPEAKER_80: board we're we're passive we didn't is that the one we brought to you freeberg yeah well i've three

SPEAKER_28: people brought but i've known him since they were small but yeah i i know there was a deal that came

SPEAKER_124: in that looked interesting but it was a little bit out of our area so we went to freeberg with it

SPEAKER_28: it is an interesting business because these guys provide a tooling service to others in bio companies and so it's a recurring revenue shovels yeah yeah it's a picks and shovels exactly yeah

SPEAKER_362: yeah it was very sass like in that regard like a booshka doll of nerds yeah unbelievable all right so

SPEAKER_166: we've woken uh sax is awake okay so we're talking about an area where you know i'm not going to be

SPEAKER_124: able to contribute a lot to the discussion of ssris i'm not going to pretend to know i'm just a consumer

SPEAKER_153: i'm not why do i know i just buy it sax uh have these ssris helped you in any way with your

SPEAKER_68: depression about biden no okay the story that i think kind of fits with everything we're talking about this week yeah 75 minutes in yeah is uh there was more there were more stories this week about this cynical ploy by the democratic party to fund candidates no hold on we talked we talked a little bit about this last week but they spent you should be really opposed to this jacal i i yeah listen as

SPEAKER_348: an independent i uh think it's gross i am an independent you're an independent only votes for

SPEAKER_88: democrats so not true not true i'm going to vote for liz cheney for president i think liz cheney or

SPEAKER_172: bezos those are my have you ever voted for a republican candidate for any office ever i had

SPEAKER_376: yeah i have you have really yeah yeah people i i'm a moderate but i don't feel like when i voted for

SPEAKER_380: um who did i vote for you must say reagan we must say wrong no no no you were too young patrick

SPEAKER_11: he was a democrat it's been a long life but i did i did vote i remember for republican and when i lived in new york david sachs has a look on his face that says finish your stupid banter so i can go on

SPEAKER_386: my money okay go hold on henry belcaster in three two go no i don't i don't really have a monologue

SPEAKER_67: on it but i just think that this is this is a pretty amazing story that you've got democrats spending almost 50 million dollars this primary season boosting mega candidates yes um at the expense

SPEAKER_124: of moderate gop candidates perfect so let's get the crazies in there yeah i mean they're easier to

SPEAKER_67: beat right and that's the theory if you get that's the theory but in a year in a year in which

SPEAKER_68: you get a red wave it's really dangerous and it totally undermines what the democrats are saying

SPEAKER_393: in their january 6 completely it's completely cynical i agree yeah you can't you can't on the

SPEAKER_80: one hand is backing trump you can't on the one hand say that we're facing an unprecedented existential

SPEAKER_68: crisis for our democracy and on the other hand be giving money to the very same people you're saying or the threat to democracy it makes no sense it just shows that both sides are completely cynical backing anything that is toxic no you're no no no you're what you're saying you're trying to both sides it you're trying to you're engaging both sides no but the difference here is that there is this is i'd say partisan political gamesmanship but the point is you can't on the one hand be engaging in ordinary partisan gamesmanship while you're saying that democracy faces an unprecedented threat that's

SPEAKER_398: the disconnect no no i guess you're trying to get too cute what do you think about liz cheney i'm

SPEAKER_68: curious well i think for her if she was a nominee she's a warmonger just like her father she's like

SPEAKER_67: she's basically darth vader 2.0 so that's my biggest problem with her is no i would not i would not

SPEAKER_68: vote for her there's not there's not there's not a war she doesn't want to get us involved in and there's not a country she wouldn't try and impose democracy at the end of a barrel okay so that's why i don't like her but to your point democrats say they want to work with more republicans like liz cheney but if you look at who they're donating money to they're donating money to

SPEAKER_80: support the maga election denier against every single republican who voted for impeachment okay so you look at like the specific races um it's completely cynical and it's just about winning just like the just to give you one one example uh democrats they gave they launched 450 000 of ads to take out a grand rapids congressman peter um major who also voted for trump's impeachment they did this with a dem with a republican in california david uh validell and just on and on so you've got on the one hand you've got democrats saying that this is an unprecedented threat to democracy they want to work with more reasonable republicans who aren't denying the election while

SPEAKER_405: at the same time trying to basically fund the campaigns of the maga candidate yeah the reason

SPEAKER_88: they're doing it obviously is if you fund one of these maniacs then they're easy to beat so they're trying to serve up somebody who's an easy candidate to be right i get this strategy but in a year

SPEAKER_408: effective strategy i think it's a very dangerous strategy because what is it effective was my question

David Sacks: no i don't i don't think so because this year i think this november is likely to be a wave election and when you get a wave election the specific candidate matters less and party matters more

SPEAKER_68: so you could get some of these crazy swept into office so i think it's a cynical and counterproductive

SPEAKER_70: strategy and you say that republicans do it too i can't remember any example i think trump itself is

SPEAKER_411: like supporting trump is that i can't i can't remember i can't remember a single time ever

SPEAKER_80: where republicans have basically funded hold on have funded the soros the audience loves it i just think this is very stupid and dangerous but let me ask you it's not a piece listen it's of a piece okay it's of a piece with the administration claiming we're not in a recession trying to redefine recession now that we're in one it's of a piece with joe manchin all of a sudden calling the slimmed down bbb the deficit reduction act after saying that it would increase the deficit and the media is not holding these guys accountable that's why politicians are going to be as dishonest as the media allows them to be and the media is not holding brian conan o'brien kept the white

SPEAKER_25: house honest he tweets out the white house now says it's only a recession if you see a salamander

SPEAKER_416: wearing a top hat absolutely the comments the comments are the best one guys what about a what

SPEAKER_417: about a rabbit wearing a pancake but let me ask you a serious question but jake out seriously going

SPEAKER_80: beyond just the specifics of the political issue i think we really have a problem with the media class i mean the media is carrying water for these democrats because they agree with the ideological agenda we do not have an honest media who's willing to hold the party in power accountable given what you

SPEAKER_94: you've said about being disgusted by like the um you know uh denying uh you know this voter fraud conspiracy stuff by trump or whatever if trump wins the nomination which i think he will how are you going to be able to when we're on the show a year from now and trump has the nomination or you know 18 months from now whenever it is that it he locks it up and he will lock it up if he runs i don't think so so if he does though i don't think so conceivably be able to back trump for a second term would you be able to come on this program and say i back trump as a republican because you don't want to vote for a democrat what would you do just not vote because you don't like trump you said you would not support him listen politics is always a choice

SPEAKER_250: of the lesser of two evils there are a lot of so you wouldn't vote so i hope i'm not in that

SPEAKER_68: situation listen i i what would you do listen the the election that america does not want in 24

SPEAKER_67: is biden versus trump i think the race that they want i think the choice they want to make is actually desantis versus newsome that's the choice i'd like to make so look i'm on the desantis train

SPEAKER_04: that's what i'm supporting for 24. you know if it ends up being something different we can talk

SPEAKER_428: about it if it was bezos desantis what would you do would you vote for bezos or desantis you go really yeah what about you chamath would you go bezos or desantis who would you vote for bezos or desantis

SPEAKER_189: i i bezos or desantis well that's a tough one probably desantis okay freeberg bezos i'm good

SPEAKER_433: i'm gonna sit this question out let's keep going okay all right everybody there you have it everybody

SPEAKER_68: it's a it's a dumb question jacal because bezos is not running i mean and honestly the the fact that

SPEAKER_56: people were even discussing that is he's a thought experiment no but his thought no but the thought experiment the reason why i would go desantis is at least he knows how to play the game of politics bezos would just in a matter of a week be like why did i do this i have the best life in the world exactly

SPEAKER_68: there's just no way it's a stupid living his best life listen jacob bezos had two tweets criticizing the administration on inflation and you're like he's running for president he's running no no no

SPEAKER_88: there's two there's other reasons come on he bought the washington post he bought the biggest house in dc uh and he gave that 10 billion dollar climate page i think those are all little cards that you

SPEAKER_04: could check boxes and if he writes a biography bezos probably has houses all over the world doesn't mean he's running for president of those countries come on i'm just saying you're just scared you're

SPEAKER_129: scared of the bezos presidency you know that he would roll over desantis he would roll desantis even if

SPEAKER_70: bezos were dumb enough to run for president i think he's too smart to do that the democratic party would

SPEAKER_444: never nominate him that's not why he would pass like some purity test because look what happened

SPEAKER_80: to bloomberg i mean listen don't get me wrong i'd love to see a candidate like bloomberg or bezos

SPEAKER_68: nominated by the democratic party because they clearly understand economics right would it be a

SPEAKER_334: masterstroke by the democratic party to embrace a model i would like to i would love to see a

SPEAKER_101: candidate like that but look at look what happened to bloomberg bloomberg spent 100 million dollars and he lasted to the first question of the first debate yeah they knocked him out the first course of

SPEAKER_450: the first debate and then you know uh elizabeth warren knocked him out by just basically calling

SPEAKER_101: him a billionaire and he's there stunned he had no answer terrible yeah he did terrible terrible but i mean

SPEAKER_301: it would be a masterstroke if they went with a moderate you know it all right everybody for

SPEAKER_94: david sacks chamath and friedberg i'm jay cow we'll see you next time on episode 90s guys love you bye catch you bye bye bye love you sexy

SPEAKER_41: poof david sacks

SPEAKER_44: i'm gonna source it to the love you

SPEAKER_465: that's nice queen of her feet

SPEAKER_468: that's gonna be good we need to get merch i'm going