E10: Twitter & Facebook botch censorship (again), the publisher vs. distributor debate & more

Jason Calacanis 0:00 Hey, everybody. Hey, everybody. Welcome. Besties are back. Besties are back. It's another All In Podcast dropping it to you, uh, unexpectedly-

Chamath Palihapitiya 0:08 (sighs)

Jason Calacanis 0:08 ... because there's just so much news. (laughs) There's too much news.

Chamath Palihapitiya 0:12 A surprise bestie pod.

Jason Calacanis 0:14 We're dropping a bestie. (laughs) It's not a Code 3- 13. We're not dropping any Snickers bars today.

Chamath Palihapitiya 0:20 (laughs)

Jason Calacanis 0:20 Just dropping a bestie.

David Sacks 0:21 That's why I brought a megaphone.

Jason Calacanis 0:22 Oh, no. He's got a megaphone.

Chamath Palihapitiya 0:24 (laughs)

Jason Calacanis 0:24 Oh, nice. That's good. Megaphone. Oh.

David Sacks 0:24 (sirens blaring)

Jason Calacanis 0:27 He's got two.

Chamath Palihapitiya 0:29 This is (laughs) .

David Sacks 0:32 (sirens blaring)

Jason Calacanis 0:32 (laughs)

Chamath Palihapitiya 0:33 (laughs)

Jason Calacanis 0:34 Uh, my God.

David Sacks 0:35 It's a special censorship edition. Warning. Warning.

0:38 (sirens blaring)

Jason Calacanis 0:39 (laughs)

Chamath Palihapitiya 0:40 Censorship episode of All In. Oh, baby.

David Sacks 0:42 (laughs)

Jason Calacanis 0:43 We hit a new low in terms of people needing to be heard.

Chamath Palihapitiya 0:46 Oh, my God.

Jason Calacanis 0:47 Trumon Sax's agent, um, and his chief of staff called me. He felt like he only got 62% of the minutes in the last two podcasts-

Chamath Palihapitiya 0:56 (laughs)

Jason Calacanis 0:56 ... versus the rest of us. And so I'm dealing with his agent a little bit. It's like the, uh, the debates where they count the number of minutes at interval.

Chamath Palihapitiya 1:04 Who, Daniel?

David Sacks 1:04 Uh-

Chamath Palihapitiya 1:04 Is Daniel grinding you for more minutes?

Jason Calacanis 1:06 Daniel's grinding you for more minutes on Fact Check.

David Sacks 1:07 No, I go for qua-... I go for quality over quantity.

Jason Calacanis 1:10 Absolutely. Okay.

David Sacks 1:12 If you guys are like-

Jason Calacanis 1:12 Uh, well, this week's gonna be... I, I mean, what a complete disaster of a week. Um-

Chamath Palihapitiya 1:18 (laughs)

Jason Calacanis 1:19 There's no other way to explain what is happening right now.

Chamath Palihapitiya 1:21 (laughs) Such a... Every day is a dumpster fire.

Jason Calacanis 1:25 It's a huge-

Chamath Palihapitiya 1:26 (laughs)

Jason Calacanis 1:26 ... dumpster fire in Lincoln.

Chamath Palihapitiya 1:27 (laughs)

Jason Calacanis 1:29 So here we are, we're three weeks out from the election and somebody's emails have... A Democrat's emails have been leaked again, potentially. But last time, um, we had an investigation by the FBI and then that might have infected, uh, impacted the election. This time, we have a whole different brouhaha. Apparently Hunter Biden, who loves to smoke crack and has-

Chamath Palihapitiya 1:58 (laughs)

Jason Calacanis 1:58 ... a serious drug problem. This, this is... You know, he's a seriously, obviously troubled individual. Um, but he brought three laptops to get them fixed and never picked them up, according to this story in the New York Post. So the New York Post runs a story with an author who is kind of unknown. Um, and this, these laptops were... Somehow the hard drives ma-... He never picked them up. That's a little suspicious. The hard drives wind up with Rudee- Rudy Giuliani and the FBI. Uh, and anyway, what they say is that Hunter Biden, which we kind of know is a grifter who traded on his last name to get big consulting deals. I, I don't know what board anybody here has been on that pays 50,000 a month, uh, but it's obviously gnarly stuff. But the, the fallout from it was the big story. I went to tweet the story and it wouldn't let me tweet the story. Uh, so the literal New York Post was banned by Twitter at the same time Facebook put a warning on it. So let's just put it out there, um, you know, Sax, your guy is losing pretty badly in this election. And so we'll go to our token GOPer. What do you think?

Chamath Palihapitiya 3:09 (laughs)

Jason Calacanis 3:09 Is this... Let's, let's take this in two parts. One, what do you... Do you... What did they think the chances that this is fake news or real news or something in between? And then let's get into Twitter's insane decision to block the URL.

David Sacks 3:23 Yeah, I mean, so, so first... So I, I think this whole thing is a, is a tragedy of errors on the part of, um, sort of everyone involved. I think the New York Post story stinks. I don't think it, uh, it, it, it meets sort of standards of journalistic integrity. We can talk about that. Uh, but then I think, you know, Twitter and Facebook overreacted. And I think that the story was well in the process of being debunked by the internet. And it was like Twitter and Facebook didn't trust that process to happen. And so they intervened. And now I think there's going to be a third mistake, which is that conservatives are looking to repeal Section 230. We should talk about that. And so each one... There's been a cascade of, of disasters that have led to this, this dumpster fire. But starting with the story, it is, it, it is, um, very suspicious. First of all, these disclosures about Hunter Biden's personal life, they didn't have to go there. It was completely gratuitous to the article. It was sleazy. And then, of course, the story about how the hard drive ends up with the reporters makes no sense. Even today, uh, Giuliani was, was making up new explanations for how it got there. Um, it's now being widely speculated that this was the... that the content came from the result of a hack. Um, maybe involving foreign actors, that this whole idea that it came from this sort of hard drive that he left at a repair shop and forgot to pick up. Um, I mean, so that, that's now, you know... I think that would have been the story today if it weren't for, um, Facebook and Twitter making censorship of the story. And then the final thing is, you know, this story wasn't a smoking gun to begin with. I mean, the worst thing it showed was that there was a single email between a Burisma exec and, and Joe Biden. And, um, the, the Biden campaign has denied that Bi-... that Joe Biden never met with this guy. And so it wasn't ever this smoking gun. And, um, and, and that makes it all the more, um, apparent why Facebook and Twitter sort of overreacted. It was almost like they were trying to overprotect their candidate. Uh, but this was nev-

Jason Calacanis 5:31 That's the thing that obviously looks crazy. Like, they now have given the GOP, the right, the extreme right, the belief that the, the technology companies are now on the side of the left whereas last time, they were on the side of the right, I think, right? Facebook was supposed to be on the side of the right last time. So Chamath, you worked at Facebook famously for many years. What are your thoughts?

Chamath Palihapitiya 5:55 Well, Jack came out last night and basically said that the reason that they, that they shut down distribution was that it came from hacking and doxing or some... I think that was basically the excuse.

Jason Calacanis 6:05 A combination, yes.

Chamath Palihapitiya 6:06 A combination. Um, and then Facebook today came out and said, "You know, before we could take it down, it had been distributed or read 300,000 times." Um-I mean, look. If we just take a step back and think about what's happening here, there are more and more and more examples that are telling, I think all of us, what we kind of already knew, which is that this fig leaf that the online internet companies have used to shield themselves from any responsibility, those days are probably numbered. Because now, exactly as David said, (laughs) what you have is the left and the right (laughs) looking to repeal-

David Friedberg 6:45 Yeah.

Chamath Palihapitiya 6:45 ... Section 230. And so... And by the way, two days ago, I think it was, Clarence Thomas basically put out the entire roadmap of how to repeal it. And if you assume that Amy Coney Barrett gets, you know, put into the High Court in a matter of days or whatever, um, it's only a matter of time until the right case is thoughtfully prepared along those guardrails that, that Clarence Thomas defined, and it'll get w- w- you know, fast-tracked through to the Supreme Court. But if I was a betting man, which I am, I think that Section 230 is... their days are numbered, and Facebook, Twitter, Google, all these companies are going to have to look more like newspapers and television stations

Jason Calacanis 7:27 Okay. So before we go to you, Friedberg, I'm just gonna read what Section 230 is. Uh, this is part of, um, a law basically designed to protect common carriers, web hosters, uh, of legal claims that come from hosting third-party information. Uh, here's what it reads. "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." Uh, so what this basically means is if you put a blog post up and people comment on it, you're not responsible for their comments. Or if you're Medium and you host the blog, you're not responsible for the comments of that person. It is that person's. It makes complete, logical sense. The entire internet was based off of this, that platforms are not responsible for what people contribute to those platforms. That's how publishing works.

Chamath Palihapitiya 8:21 Now-

Jason Calacanis 8:21 If you look at the internet as paper-

Chamath Palihapitiya 8:22 But, but, but again, let's build on this.

Jason Calacanis 8:24 (clears throat)

Chamath Palihapitiya 8:24 When that law was originally written, we had no conception of social distribution and algorithmic feeds that basically pumped content and, and increased the volume on those things. So, what you have now is really no different than if, you know, you created a show, um, on Netflix or HBO or CBS and put it out there. If that stuff contained, you know, something that was really offensive, those companies are on the hook. Did they make it?

Jason Calacanis 8:50 Yeah.

Chamath Palihapitiya 8:50 No. Did they distribute it? Yes. And it's the-

Jason Calacanis 8:53 But, but here-

Chamath Palihapitiya 8:54 And here-

Jason Calacanis 8:54 But here's the difference.

Chamath Palihapitiya 8:54 It's the active-

Jason Calacanis 8:55 You know, Netflix-

Chamath Palihapitiya 8:56 But it's the active act of distributing it. You cannot look at these companies and say, "They are basically holding their hands back." They have written, active code, and there is-

Jason Calacanis 9:06 Okay.

Chamath Palihapitiya 9:06 ... technical procedures that they are in control of that are both the amplifier and the kill switch.

Jason Calacanis 9:11 But isn't this a bad analogy, Netflix? Shouldn't the analogy be the person who makes film stock or the person who makes the camera, or the person who develops the film, not the person who distributes it? There are-

Chamath Palihapitiya 9:22 No, because that... No, that law is now-

Jason Calacanis 9:23 ... a limited amount of shows on Netflix. You can police all of them. You can't-

David Friedberg 9:26 Net- Netflix-

Jason Calacanis 9:27 ... police everything written.

David Friedberg 9:29 ... Net- Netflix is making editorial decisions about which shows to publish, just like, you know, a magazine makes editorial decisions about which articles to publish. They are clearly publishers. Um, but the, the Communications Decency Act Section 230, the original distinction... I mean, if you wanna think about it, like, in offline terms for a second, you've got, y- you've got th- this idea of publishers and distributors, right? That's a fundamental dichotomy. A magazine would be a publisher. The newsstand on which it appears is a distributor. It shouldn't be liable. If there's, if there's a, a, a, a, a libelous article contained in that magazine, you shouldn't be able to sue every single newsstand in the country that made that magazine available for sale. That was th- that was the original offline law that was then kind of ported over into Section 230. It made a lot of sense. Without this... I mean, I think it was a really visionary provision. It was passed in 1996. Without that, every time that somebody sends an email, uh, that, you know, potentially created a legal issue, uh, you know, Gmail could have been liable.

Jason Calacanis 10:35 Friedberg-

David Friedberg 10:36 Um-

Jason Calacanis 10:36 ... is it... What's the right analogy? When people post to the internet, is that the... is the analogy-

David Friedberg 10:41 No, but-

Jason Calacanis 10:41 ... paper or film stock? Is it the newsstand? Or is it the publisher?

David Friedberg 10:45 So remember, like, what Sacks is pointing out is this was passed in 1996. So think back to 1996, when you would, um, create some content, right? And the term around that time was user-generated content, right? You guys remember this, like the early days.

Jason Calacanis 11:00 Yeah.

David Friedberg 11:00 It was like the big sweeping trend.

Jason Calacanis 11:01 UGC.

David Friedberg 11:02 UGC. And it was like the big sweeping trend was like, "Oh, my God, all this content is being created by the users. We don't have to go find content creators, uh, to create, you know, a reason for other consumers to want to come to our websites." So users could create content. You know, Blogger was an early kind of user-generated content service. You could create a blog post, you could post it, and people would show up. The problem with Blogger, um, or the challenge was, uh, distribution or syndication, right? How do I... Now that I've posted my content, how do I, as that content creator, get people to read my content? And you'd have to send people like a link to a website or link to a webpage, and you click on that link, and then you could read it. What Chamath is pointing out is that today, Twitter and Facebook make a choice about... and, and YouTube make a choice about what content to show. And so, you know, I think the analogy in the offline sense is-

Jason Calacanis 11:51 Via the algorithm is what you're saying, to be clear.

David Friedberg 11:53 ... via the algorithm, and, uh, you know, YouTube realized that if they showed you videos that they think that you'll click on, they'll keep you on YouTube longer and make more money from ads. So, it keeps the cycle going, and so they optimize con-... And it turns out that the content that you need to optimize for to get people to keep clicking is content that is somewhat activating to the amygdala in your brain (laughs) . It's like stuff that makes you angry or makes you super pleasured, uh, not just boring, ordinary stuff. And so this sort of content, which the New York Post sells a lot of-

Chamath Palihapitiya 12:21 ... um, is, uh, the sort of stuff that rises to the top of those algorithms naturally because of the way they operate. Now, if a magazine stand were to put those me- newspapers, using the offline analogy, on the front of their magazine stand and told people walking by on the street, "Hey, you guys should check these out. You know, top of the news is Hu- Hunter Biden smoking crack with a hooker," people would, you know, probably stop. But I think the question is, should they be liable? Now, in, in I think 2000, uh, the Digital Millennium Copyright Act was passed, and, um, that act basically created a process by which folks who felt like... and it was related to copyright, but I think the analogy is similar. If you thought that your content was copyrighted and was being put up falsely, uh, or put up without your permission, you could make a claim to one of those platforms to get your content pulled down. And I think the question is, is there some sort of analogy around, uh, libel content or, uh, false or misleading content, um, that maybe this evolves into law, where there's a, a process by which platforms can kind of be challenged on what they're showing, um, much like they are with the DMCA

Chamath Palihapitiya 13:23 takedown notices.

Jason Calacanis 13:24 So, Jim Ma-

Chamath Palihapitiya 13:24 I think the problem, the problem-

Jason Calacanis 13:25 Yeah.

Chamath Palihapitiya 13:25 ... comes back to the code. If you explicitly write code that fundamentally makes it murky whether you are the publisher or the distributor, I think that you have to basically take the approach that you are both. And then, you should be subject to the laws of both. If, for example, Twitter did not have any algorithmic redistribution amplification, there, where the only way you could get content was in a real-time feed that was everything that your friends posted and they stayed silent, you could make a very credible claim that they are a publisher and not a distributor.

Jason Calacanis 14:03 Mm-hmm. Which, by the way, is the way it originally worked, and it was why they were falling behind Facebook, as you well know, because you worked on the algorithm at Facebook.

Chamath Palihapitiya 14:11 You cannot, you cannot claim-

David Sacks 14:12 Right. But-

Chamath Palihapitiya 14:13 ... you're, you're not a distributor when you literally have a bunch of people that sit beside you writing code that decides what is important and what is not. You can debate-

David Sacks 14:22 Well, but-

Chamath Palihapitiya 14:22 You can debate which signals they decide to use, but it is their choice.

David Sacks 14:26 Well, but, but, but if the signals are, are the user's own clicks, then I would argue that's still just user-generated content.

Chamath Palihapitiya 14:34 No, no, no. It is a-

David Sacks 14:35 Um, but-

Chamath Palihapitiya 14:35 It is a signal, David, but that's not the only signal. For example-

David Sacks 14:37 Well, I mean-

Chamath Palihapitiya 14:38 ... I can tell you very clearly that we would choose a priori stuff that we knew you would click on. It wasn't necessarily the most heavily clicked. We could make things that were lightly clicked more clicked. We could make things that were more clicked less clicked. But my point is-

David Sacks 14:51 Right.

Chamath Palihapitiya 14:51 ... there are people inside the bowels of these companies that are deciding what you and your children see. And to the extent-

David Sacks 14:58 Right. Well-

Chamath Palihapitiya 14:58 ... that that's okay, that's okay.

Jason Calacanis 15:00 So wait, wait, wait. Maybe we've actually solved this problem, Sacks, in that-

David Sacks 15:04 Mm-hmm.

Jason Calacanis 15:04 ... if we said, "If you deploy an algorithm that is not disclosing how this is going, then you are, ergo, a publisher. And if you-"

David Sacks 15:14 Right.

Jason Calacanis 15:14 ... "uh, are just showing it reverse chronological, or chron as we used to call it back in the day, with the newest thing up top," that would be-

David Sacks 15:22 Right.

Jason Calacanis 15:22 ... uh, just a... And so maybe we should be not getting rid of 230. We should be talking to these politicians about algorithms equal publisher. So the publisher at the New York Post-

David Sacks 15:32 Right, right.

Jason Calacanis 15:32 ... is the same as the algorithm. I like this as a-

David Sacks 15:35 Right.

Jason Calacanis 15:35 ... as a better framework.

David Sacks 15:36 Well, yeah. So, so Senator Tom Cotton, you know, who's a Republican, he tweeted in response to the, the New York Post censorship, "Look, if you guys are gonna act like publishers, we're going to treat you like publishers." So that, that's not modifying Section 230. That's just saying you're not going to qualify for Section 230 protection anymore if you're going to make all these editorial decisions. I would argue that these decisions they're making about censoring specific articles... And by the way, it's a total double standard, because, you know, when, when Trump's tax returns came out a week or two ago, uh, where was the censorship of that? That was, wasn't that hacked material? I mean, that was material that found its way to The New York Times without Trump's consent. By the way, so were the Pentagon Papers. I mean, you cannot apply this standard, this, this idea that we're gonna prohibit links to articles-

Chamath Palihapitiya 16:21 But you're proving the point. These people are publishers.

Jason Calacanis 16:23 Oh, no, no, no. I know. I don't... Well, well, well, hold, hold on. I- I'm, I'm saying, I'm saying if they make editorial decisions, their publishers, I think there's a way for them to employ speech-neutral rules and remain distributors. So I would be... I would t- I would have a little bit of, uh, uh, of an issue with you. I would say the reason why they're going to fall into this trap of becoming publishers is because of their own desire to censor, their own biases. They can't-

Chamath Palihapitiya 16:49 I don't think that's what it is. I think it's purely market cap driven. If you go from an algorithmic feed to a reverse chronological feed only, I can tell you what will happen, in my opinion, which is that the revenue monetization on-

David Sacks 17:03 Yeah, go.

Chamath Palihapitiya 17:03 ... a per-page, per-impression basis will go off by 90%.

17:06 90%, for sure. People wouldn't-

17:09 That is the only reason-

David Sacks 17:11 But, but, but-

Chamath Palihapitiya 17:11 ... why these guys won't switch, because they know that for every billion dollars they make today, it would go to 100 million in a reverse chronological feed, because you would not be able to place ads in any coherent, valuable way. There would be zero click-throughs and the ads would be just worthless.

David Sacks 17:26 L- l- l- let's

Jason Calacanis 17:27 Go ahead, James.

Chamath Palihapitiya 17:27 Otherwise, they should do it now. If you could keep all the revenue and you could be reverse chronological, right, and have the same market cap, just do it and be under safe harbor so that you're not attacked every day.

David Sacks 17:38 Right. Well, maybe-

Chamath Palihapitiya 17:38 How fun is it to be sitting there and being attacked every single day?

Jason Calacanis 17:42 By both sides.

Chamath Palihapitiya 17:44 Only by all-

Jason Calacanis 17:45 And by all the, and by all the libertarians in the middle.

Chamath Palihapitiya 17:46 The reason they don't do it is because of money. Let's just be honest. That's the only reason they don't do it. It's all market cap driven.

David Sacks 17:53 Well, may- maybe they should go back to just kind of the straight reverse chron feed, and maybe you're right that the algor- I mean, I think you probably are right, that the algorithms, um, are- make the situation worse. Because they kind of trap people in these bubbles of like reinforcement and they just keep being fed more ideological purity, and it, and it definitely is fueling the polarization of our society. So I'm not trying to defend... I mean, I, I think maybe you have a point that we should get rid of these algorithms. But, but just to think about like the publisher aspect of it, going back to the newsstand example, let's say that the guy who works at the newsstand knows his...... customers, and pulls aside every month the magazines that he knows that his clientele wants. And in fact, sometimes he even makes recommendations knowing that, "Oh, okay, you know, Chamath likes, you know, these three magazines. Here's a new one, maybe he'll like this." And he pulls it aside for you. That would not subject him to publisher liability, even though he's doing some curation. He's not involved in the content curation. Uh, I- I- I would argue that if the- the algorithms proceed in a speech-neutral way, which is just to say they're going to look at your clicks, and then based on your own revealed preferences, suggest other things for you to look at, I don't think that makes you a publisher necessarily. Um-

Chamath Palihapitiya 19:06 And I think if it was that simple-

David Sacks 19:07 B- but if you, if you do, if you do put your finger, if these engineers are putting their thumb on the scale, and- and- and pushing the algorithm towards certain specific kinds of content, that may cross over.

Chamath Palihapitiya 19:18 No, no, no, no, no. You're being, you're being too specific. And it's- it's not that extreme, and it's not as simple as you're saying. The reality is, there are incredibly intricate models on a per-person basis that these companies use to figure out what you're likely going to click on. Not what you should, not what is exposed to you, not what you shouldn't, but what you likely will. And that's part of a much broader maximization function that includes revenue as a huge driver.

19:45 Yeah.

19:45 So, the reality is that these guys are making publishing decisions. And-

19:50 Right. But it's not a human making them.

19:50 ... you are right, David, that, you know, the law back in the day, it didn't scale to the newspaper owner. But you know what? In 1796, you know, colored people were three-fifths of a human, and we figured out a way to change the law. So I'm pretty sure we can change the law here too. And I think what's going to happen is, you should be allowed to be algorithmic, but then you should live and die by the same rules as everybody else. Otherwise, that is what's really anti-competitive, is to essentially lie your way to a market advantage that isn't true, just because people don't understand what an algorithm is. That's not sufficient to me.

20:26 But they're not actually in the content creation business, right? And so, what's the, uh, what's the- the definition of a term publisher in that context? 'Cause in all other cases, publishers pay for and guide and direct the editorial creation-

20:40 So, You-

20:40 ... of the content versus being a kind of discriminatory function of that content.

20:44 Here's the problem. Let's take, for example, uh, Instagram Reels. Can you manipulate content through Reels? Yes. Now, as the person that provides that tool to create content that theoretically could be violating other people's copyright or, you know, offensive or wrong or whatever, and then you yourself distribute it, to other people knowingly, the reality is that the laws need to address, in a mature way, the reality of what is happening today versus trying to hearken back to the 1860s and the 1930s, because things are just different. And we're smart enough...

David Sacks 21:25 Well-

Chamath Palihapitiya 21:25 ... as humans to figure out these nuances. And that sometimes we start with good intentions and the laws just need to change.

David Sacks 21:33 Well, ir- ironically, Chamath, you're making a point that Clarence Thomas made, Justice Thomas made in his, uh, f- fili- recent filing, where he said that- that if you are acting as both a publisher and a distributor, you need to be subject to publisher liability, which means peeling back Section 230. And moreover, you may not even be the primary creator of the content. If you're merely a secondary creator, if you're someone who has a hand in the content, um, then you are, uh, you're a creator, you're a publisher, and therefore you should lose Section 230 protection. That is basically what he said. If you- if your argument is that the algorithms make you a content creator, effectively, then-

Chamath Palihapitiya 22:13 And the tools-

David Sacks 22:14 ... that-

Chamath Palihapitiya 22:14 Algorithms and tools.

David Sacks 22:16 Well, I mean-

Chamath Palihapitiya 22:16 But the other thing is, you know, what, you have the algorithms-

22:18 Because David's-

22:19 You have the tools, but you also have monetization, guys.

David Sacks 22:22 Right, but-

Chamath Palihapitiya 22:22 There's monetization involved in the YouTube example.

David Sacks 22:25 (laughs)

Chamath Palihapitiya 22:25 (laughs)

22:25 So, they are helping you make money.

David Sacks 22:26 Well, we're having a serious conversation, Jason. Let's not-

Chamath Palihapitiya 22:28 (laughs)

David Sacks 22:28 ... let's not go off on that. No, I'm just kidding.

Chamath Palihapitiya 22:31 (laughs)

David Sacks 22:31 Um-

Chamath Palihapitiya 22:31 (laughs)

David Sacks 22:32 No, but- but Chamath, I mean, this goes back to the politics may- makes strange bedfellows point. Um, I mean, I think a lot of the conservatives are actually making the point you're making, which is that these social media sites are involved in publishing.

Chamath Palihapitiya 22:44 I don't want these guys involved in any of this shit, because I don't trust them to be neutral over long periods of time.

22:53 So do you trust their decision to pull down QAnon groups and-

22:57 Zero.

22:58 ... what they call hate groups?

22:59 Just like, just like it took, it took years for us to figure out that Holocaust denial was wrong, anti-vax was marginal, QAnon was crazy, like while-

23:08 Wearing masks was a good idea, right? I mean, the WHO-

23:11 ... I- I don't want these people in charge of any of this stuff. And to the extent that they are, I want them to be liable and culpable to defend their decisions.

23:19 So, Chamath, your ideal nonprofit social media service would be a chronological feed of any content anyone wants to publish that anyone can browse and read.

23:29 That's not, that's not what I'm saying, David. What I'm saying is that you have to be able to live with the risk that comes with sh- you know, playing in the big league and wanting to be a 500-plus billion dollar company. There is liability that comes with that, and you need to own it and live up to the responsibility of what it means. Otherwise, you don't get the free option.

23:51 What if they didn't take a hand in it, and they follow the Digg, the Reddit model, and it's just upvoting that decides what content rises to the top? What-

23:58 I suspect that, I suspect that... So Reddit has a, just a different problem, which is a sort of like, uh, you know, a decency problem and a- and a different class of laws which is-

24:05 Well, who are we to judge decency, right? I mean, like, in- in the vein of like editorialism, like they're taking no hand in- in what content rises to the top of Facebook or Twitter. Well, they did ban certain topics, so- They did recently, but like, like assume they didn't, right? And it was just purely like upvoted consumer and not algorithmic.

24:21 That's-

24:21 Does that make it-

24:21 Yeah.

David Sacks 24:21 It's very hard to pin-

Chamath Palihapitiya 24:22 ... makes sense to them.

24:23 I think it's very hard to pin-

24:24 Feels like a platform to me.

24:25 I think it's very hard to pin a section 230 claim on Reddit, as easy as it is YouTube, Facebook and Twitter.

David Friedberg 24:33 And so, if YouTube reverted to just, "Hey, what people are watching right now," rises to the top, and that was the only thing that drove the algorithm, you would feel more comfortable with YouTube not being-

Chamath Palihapitiya 24:41 It's not comfortable.

David Friedberg 24:42 ... a publisher?

Chamath Palihapitiya 24:42 This is what I'm saying. It's- it's ju- yeah, what- what I know, a-all I want to know is, what am I getting when I go here? And if what I'm getting is, um, a subjective function, where they are maximizing revenue, which means that I can't necessarily trust the content I get. As long as I know that, and as long as there's recourse for me, I'm can- I'm very fine to use YouTube and Twitter and Facebook. What I think is unfair is to not know that there is a subjective function, m- confuse it with an objective function, go on with your life, end up in this state that we're in now, where nobody is happy and everybody is throwing barbs-

David Friedberg 25:20 But-

Chamath Palihapitiya 25:20 ... and you have no solution.

David Friedberg 25:21 Maybe I just want to be stimulated. Like, I remember the day when I would go to Facebook and Twitter and it was boring as hell. It's like just fucking random shit that people, like, here's a picture of my dog taking a shit.

Chamath Palihapitiya 25:29 Yeah, show me the best stuff.

David Friedberg 25:31 You know, like I'm, like I, and now when I go to Facebook and I'm like fucking addicted because it's showing me this... And there's like shit that I've been buying online and the ads keep popping up and I'm like, "Oh, this is awesome." And I keep buying more stuff.

Jason Calacanis 25:41 Well- well, let me, let me put one-

Chamath Palihapitiya 25:42 I think all of that is good, but I, it's all, it all should be done eyes wide open, where in these corner cases, the people that feel like some sort of right or privilege or, has been violated or some overstepping has occurred, they should have some legal recourse and they should be a-

Jason Calacanis 25:59 (laughs) .

Chamath Palihapitiya 25:59 They should be on the record-

Jason Calacanis 26:00 Ugh.

Chamath Palihapitiya 26:00 ... a mechanism to disambiguate all that.

Jason Calacanis 26:02 Wait, hold on a second. Let me just ask this one question, David.

David Friedberg 26:04 Mm-hmm.

Jason Calacanis 26:05 Would this be, uh, alleviated if the algorithm was less of a black box? If we could just say, "Hey-"

Chamath Palihapitiya 26:13 No.

Jason Calacanis 26:13 We need these algorithms to be..." So that's not a solution. Then what is the s- and the, um, and I want to hear David's-

David Friedberg 26:18 Well-

Jason Calacanis 26:18 ... about, you know, about the algorithm.

David Friedberg 26:20 Yeah, yeah. We use it-

Jason Calacanis 26:20 And then also labeling. Because Facebook labeled stuff. And if labeling stuff, "Hey, this is disputed from a third party," that feels to me like that would have been a better solution in the Twitter's case.

David Friedberg 26:30 Okay. All right. Let me, let me get in here. So I half agree with Chamath. Okay? So the, the half I agree with is, I don't want any of these people, meaning the social media sites, making editorial decisions about what I see, censoring what I can look at. I don't trust them. I don't want that kind of power residing in, really, two people's hands: Mark Zuckerberg and Jack Dorsey. I don't, I don't trust them and I don't want them to have that kind of power. But, that, where I disagree is, if you repeal Section 230, you're going to make the situation infinitely worse, because Section 2- what is the response of these companies going to be? Corporate risk aversion is going to cause them to want to hire hundreds of low-level employees, basically millennials, to sit there making judgments about what content might be defamatory, might cause a lawsuit. They're going to be taking down content all over the place.

Chamath Palihapitiya 27:19 Do- do you know what will happen, David?

David Friedberg 27:20 That's going to be a worse world.

Chamath Palihapitiya 27:21 No. You know what'll happen? Those companies will lose users, lose engagement, and new things will spring up in its place around these laws that work.

David Friedberg 27:30 H- how will they, how will they lose audience? I mean, I think what'll happen is you'll have a torrent of lawsuits. Any time somebody has a- a- a potential lawsuit based on-

Jason Calacanis 27:40 What... You know, this reminds me of-

David Friedberg 27:41 I don't think that-

Jason Calacanis 27:41 ... like trying to police speech at a dinner party. Like-

Chamath Palihapitiya 27:45 Our job is not to defend-

Jason Calacanis 27:46 This has never existed at a scale-

Chamath Palihapitiya 27:48 Well, and our job-

Jason Calacanis 27:48 This has never existed at this scale.

Chamath Palihapitiya 27:49 I don't think the goal is to work backwards from, how do we preserve a trillion dollars of market cap? So what if that's what happens?

David Friedberg 27:55 I don't think that's what we're... I don't think that's what we're doing. I- I- so for me, I- I'm trying to work back from how do we preserve the open internet? Um...

Chamath Palihapitiya 28:01 I- I, but I think this is exactly what it's saying, which is, here's a clear delineation in 2020 knowing what we know. You know, person, entrepreneur who goes to Y Combinator or to Launch to build the next great company, hear these rules, pick your poison. And some will choose to be just a publisher. Some will probably create forms of distribution we can't even think of. Some will choose to straddle the line. They'll have different risk spectrums that they live on. And that's exactly how the free markets work today.

David Friedberg 28:28 Yeah, I mean-

Chamath Palihapitiya 28:29 There's nothing

Chamath Palihapitiya 28:30 wrong with that.

David Friedberg 28:31 May- may- may- maybe the only, like, disagreement here is that I- I think that, uh, code can be written and algorithms can be written t- in a speech-neutral way, so that the distributors don't cross over the line to becoming publishers. I fully agree with you that these sites should not be publishers. The reason why the New York Post story has really taken off-

Jason Calacanis 28:47 They should be platforms.

David Friedberg 28:49 They should be platforms, and they cross the line. I would say that this, this New York Post story is... The- the reason why people are up in arms about it is because what Twitter and Facebook have done is basically said they're going to sit in judgment of the media industry. And if a publisher like the- the- the New York Post puts out a story that doesn't meet the standards of Twitter and Facebook, they're going to censor them. That is a sweeping assertion of power. They're picking and choosing who they don't want to give distribution to.

Jason Calacanis 29:18 Yeah. We all, we all agree on that piece. They should not be the arbitrator of what-

David Friedberg 29:22 That is what is triggering, but that is what is triggering the conservatives in particular, but everybody, but especially conservatives, to say they want to repeal Section 230.

Chamath Palihapitiya 29:31 Nobody is safe.

David Friedberg 29:32 My point is-

Chamath Palihapitiya 29:33 Nobody is safe.

David Friedberg 29:34 And t- and it's less about, um... I- I actually think that there's a- a- a nuance point to this which is it's less about what they think is legit or not as much as what they think is important or not. They chose to make this an important article. They chose to kind of intervene in this particular case, when every day, there are going to be hundreds of other articles that are going to be actively shared on these platforms that are, by those same standards, false with, you know, some degree of equivalency, false

Jason Calacanis 30:00 Of course.

David Friedberg 30:00 ... and shouldn't be on the- the platform.

Chamath Palihapitiya 30:01 Absolutely.

David Friedberg 30:02 And it is the simple choice that they chose an article to exclude, um, regardless of the reason and the background, because there are many articles like it that aren't being excluded.

Chamath Palihapitiya 30:11 Yeah.

David Friedberg 30:11 Um, and that alone speaks to the hole in the system, as- as kind of Sax is pointing out.

Chamath Palihapitiya 30:14 Mm-hmm.

Jason Calacanis 30:15 Well, it's because, it's because they, they have too much power and they're unaware of their own biases. They can't see this action for what it so clearly was. It was a knee-jerk reaction on the part of employees at Twitter and Facebook to- to protect the Biden campaign from a story that they didn't like. I mean, because if they were to apply the- the- these standards evenly, they would have blocked the Trump tax returns for the exact same reason.

Chamath Palihapitiya 30:38 By the way, just so you know-

David Friedberg 30:39 J- J Cal's about to block you so he can keep the Biden campaign strong and not have your

Jason Calacanis 30:43 (laughs)

Chamath Palihapitiya 30:43 Well, I- I- I would say, I would say-

Jason Calacanis 30:45 I've been red-pilled actually. The last 24 hours have been red-pilling for me (laughs) .

Chamath Palihapitiya 30:49 I- I- I got to say, David, I agree with you because, like, I thought, I thought that both things were, uh, crossing the line. Like, meaning either you publish them both-

30:59 ... or you censor them both. And there are very legitimate reasons where you can be on either side. But to choose one and not do the other, it just, again, it creates for me uncertainty, and I don't like uncertainty, and I really don't like the idea that some nameless, faceless person in one of these organizations is all of a sudden going to decide for me, knowledge-

31:19 Yeah.

31:19 ... and information.

31:20 Yeah. Yeah.

31:20 That, to me, is just unacceptable.

31:22 A- the journalistic standard becomes a slippery slope to nowhere, right? Like, at that point-

31:25 To nowhere.

31:26 ... you're just, right, like, what, what is true, what is not true? What is opinion, what is not opinion? What is, what, you know, how do I validate whether this fucking laptop came from this guy or this guy or this guy? It's a slippery s- how are you ever going to resolve that across billions of articles a day?

31:39 Right.

Jason Calacanis 31:39 Standards would be-

Chamath Palihapitiya 31:40 And, and looking at-

Jason Calacanis 31:41 ... the answer. And the New York Post has lower standards.

Chamath Palihapitiya 31:45 Right. And so, let, let, let's look at how slippery the slope has become. Just a week ago, I mean literally a week ago, Mark Zuckerberg put out a, a statement explaining why Facebook was gonna censor, censor a Holocaust denial.

Jason Calacanis 31:56 Wow, he really went out on a limb, huh, David?

Chamath Palihapitiya 31:59 Well, it's-

Jason Calacanis 32:00 (laughs)

Chamath Palihapitiya 32:00 Look, I think-

Jason Calacanis 32:00 Wow.

Chamath Palihapitiya 32:01 No, no, no, no, no. My point, my point is-

Jason Calacanis 32:03 How brave-

Chamath Palihapitiya 32:03 No, no, no. But my point is, no, but you're missing my point. My point is, he actually put out-

Jason Calacanis 32:07 (laughs)

Chamath Palihapitiya 32:07 ... a multi-paragraph, well-reasoned statement-

Jason Calacanis 32:10 Multi-paragraph?

Chamath Palihapitiya 32:11 ... about why they would-

Jason Calacanis 32:11 Your three paragraphs about the Holocaust is bad? (laughs) Wow. Congrats.

Chamath Palihapitiya 32:15 No, no, no. What, what I'm trying to... You're, you're, you're not listening to my point. My point is that he took it seriously that he was gonna censor something. And I think, you know, people can come down. You could be like a Skokie ACLU liberal and oppose it, or, you know, you could say, "Look, common sense dictates that you would, you would censor this." But he felt the need to justify it with, you know, like a long post. How, and then one week later, we're already down the slippery slope to the point where, you know, Facebook's justification for censoring this article was a tweet by Andy Stone. You know, like, that was it. It was a tweet. That was the only explanation they gave. By the way, uh, one of the reporters pointed out that if you were going to announce a new policy, you probably wouldn't want it done by a guy who's been a lifelong Democratic operative. You know, this was just so... A- and so it just shows that once you start down this slope of censoring things, it becomes so easy to keep doing it more and more. And, um, and this is why I think these guys are, are really in hot water. Whatever, whatever, um, you know, whatever controversy there was about Section 230 before, and there was already a lot of rumblings in DC about modifying this, they have made things 10 times worse. I mean, as, as someone who's actually a defender of Section 230, I wish Dorsey and Zuckerberg weren't making these blunders, because I think they're going to ruin the open internet for everyone.

Jason Calacanis 33:33 Super blunder. And I'll tell you what was an even bigger blunder for, or an equal blunder for me last night. I don't know if you guys had this experience, but I was trying to f- figure out what the consensus view on the Biden, Hunter Biden story was, and I went to Rachel Maddow and The Last Word and Anderson Cooper and there was a media blackout last night, that I couldn't find one left-leaning or CNN, if that is even in the center. I don't think they're the center any more to the left. I couldn't find one person talking about Biden. I was like, all right, let me just see if I tune into Fox News and Fox News was only discussing the Biden story. And so this now felt like, wow, not only... I- if you were one of these, you know, folks on the left who's in their filter bubble on Twitter and Facebook, they're not going to see that story, and then if they tuned in to Rachel Maddow, uh, or to Anderson Cooper or you go to the New York Times, it's not there either. And then Drudge didn't have it for a day. And I was like, "Wait a second."

Chamath Palihapitiya 34:29 You're, you're bringing up something so important, so think about what you're really talking about, Jason. There was a first order reaction that was misplaced and not rooted in anything that was really scalable or justifiable. Then everybody has to deal with the second and third order reactions. The left-leaning media outlets circle the wagons. The right-leaning media outlets are up, are up in arms. Nobody is happy. Both look like they're misleading, and then now if you're a person in the middle, for example, what was, what was frustrating for me yesterday was, it took me five or six clicks and hunting and pecking to find out what the hell is actually going on here. Why is everybody going crazy? But that bothered me.

35:11 Yes.

35:11 You know? Uh, and so I just think like, again, it used to be very simple to define what a publisher was and what a distributor was in a world without code, without machine learning, without AI, without all of these things. I think those lines are blurred. We have to, um, rewrite the laws. I think you should be able to choose, and then I think if you're trying to do both, by the way, the businesses that successfully do both will have the best market caps, but if you're trying to do both, you have to live and die by the sword.

35:42 Yeah.

Jason Calacanis 35:43 It would be interesting also if, I, I don't know if you guys have done this, but I switched my Twitter to being reverse chronological, which you can do in the top right-hand corner of the app or on your desktop, 'cause I just like to see the most recent stuff first, but then sometimes I do miss something that's trending or whatever, but I just prefer that 'cause I have a smaller follower list now. Um, but to Friedberg, your point, you kind of like the algorithm telling you what to watch, so a potential solution here might be-

Chamath Palihapitiya 36:09 I'm not saying I like it rationally, by the way. I'm just saying like, as a human, humans like it. I like it. Like, I like to be stimulated with titillating information and-

Jason Calacanis 36:18 Yeah.

Chamath Palihapitiya 36:18 ... uh, you know, interesting things that for whatever reason, I'm gonna, you know, want-

Jason Calacanis 36:23 Click on again. You like that experience of jumping down the rabbit hole.

Chamath Palihapitiya 36:26 Well, a- all, my point is all humans are activated and the algorithms, the way they're written, they're, they're designed to activate you and keep you engaged. And activation naturally leads to these, uh, dynamic feedback loops where I'm gonna get the same sort of stuff over and over again that, that it identifies, activates me because I clicked on it, and therefore, I'm gonna, you know, continue to firm up my, my opinions and my beliefs in that area. But I think showing me stuff that I don't believe, showing me stuff that's anti-sci- I mean, 'cause I'm a science guy, showing me stuff that's anti-science, showing me stuff that's bullshit that I consider bullshit, I'm not gonna read it anymore. So if I'm reading just random blurtings by random people in reverse chronological order, it is a completely uncompelling platform to me and I will stop using it.... and that leads back to kind of the, you know, Chamath's point, which is that the ultimate incentive, the, the mechanism by which these platforms stay alive is the capitalist incentive, which is, you know, how do you drive, uh, revenue, and therefore, how do you drive engagement? And, and that's to give consumers what they want. And that's what consumers want.

Jason Calacanis 37:21 All right, let's, let's give Sax his victory lap. He predicted last time that, uh, there was a possibility that Trump would come out of this like Superman and would do a huge victory lap. And sure enough, he considered putting a Superman outfit on under his suit. (laughs) Uh, and he did a victory lap literally around the hospital, uh, putting the Secret Service at risk, I guess. Um, and then did a, uh, Mussolini-like, uh-

David Sacks 37:48 (laughs)

Jason Calacanis 37:49 ... salute from everybody (laughs) from the top-

David Sacks 37:50 Yeah.

Jason Calacanis 37:50 ... of the White House. I mean, you nailed it, Sax.

David Sacks 37:53 Il Duce, yeah.

Jason Calacanis 37:53 He came out-

David Sacks 37:55 It was very Il Duce. I have to admit that.

Jason Calacanis 37:57 Il Duce. He did Il Duce.

David Sacks 37:57 Uh, it was very Il Duce.

Jason Calacanis 37:59 Il Duce. (laughs)

David Sacks 37:59 Um, no, it was, it was, it was, it was very predictable. It was, you, the media was making it sound like Trump was on his death bed, you know, because the presumption is always that the administration's hiding something, he must be much sicker than he's letting on. If he says he's not that sick, it must be really bad. Um, and so for days and days, they were talking about how Trump was, you know, potentially had this fatal condition, and by the way, he deserved it. You know, it was a moral failing, he was negligent. And so, he had t- a- and it's not unlike really what the right was doing, constantly accusing Biden of senility, you know, and then Biden went into that debate and then blew away expectations. Um, and so the same thing here, you know, the, the media set up Trump to kind of exceed expectations. But I, but, but I do think, you know, it is, um, noteworthy that Trump was cured so quickly with the use of these, you know, uh, clonal antibodies that we talked about last time, and we talked about it on the show two weeks ago. And it was a combination, I guess, of Regeneron and Remdesivir, and the guy was out of there in, like, a couple of days. So, um, you know, it, it's, it's like the, the media doesn't want to admit anything that is potentially helpful to Trump. But you have to say that at this point, we have very effective treatments for COVID. They may not be completely distributed, uh, yet. Uh, Trump obviously had access to them that the rest of us don't have. But it feels to me like we are really winding down on the whole, the whole COVID thing.

Chamath Palihapitiya 39:27 Can I ask a question? Is it, has, have they published the blow-by-blow tick-tock of exactly what he got when, um... No, they haven't, right?

Jason Calacanis 39:37 Well, no.

Chamath Palihapitiya 39:37 I would love, I would love to have that because I think all Americans deserve to have that.

39:41 They did roughly, yeah. They know, they know what his dosage was and they, they said what day he got it on the Remdesivir. He got several doses. It said what days he got the antibody treatment.

39:50 Uh, I ju- I just want to print that out and keep it as a folded in my pocket, just in case. (laughs)

David Sacks 39:55 Oh, we know what to take now. We know what to take if we get sick, right? I mean-

Chamath Palihapitiya 39:58 Yeah. Well, the question is can we get it? Can we get it?

40:00 But even independent of that, right, like, um, I think people love s- um, anecdote. It's very hard for people to find emotion and find belief in statistics. And, you know, if you look at the statistics on COVID, you know, you're going to the hospital, 80% chance you're coming out. And, you know, the average stay for someone that, that goes in, a lot of people are going to the ER and they're getting pushed back out because they're not severe enough. And I, I think the anecdote is everyone that gets COVID dies. The statistics show that that's not true. And, you know, whether or not Trump got exceptional treatment, he certainly did. Um, it's very hard, to Sax's point, for the storytelling that has kind of been used to keep people at home and, and manage kind of, and create this, this expectation of severity of this crisis, et cetera. Um, it's very hard for people to kind of then say, "Hey, like, you know, he's got a 97% chance of making it through this and he'll be, 90, 90% chance he'll be out of the hospital in three days." When it happened, it was a shocking moment, um, and it really hit that narrative upside down, right? Like, it was just like...

David Sacks 41:04 Well, can we, can we show that there's a tweet recently providing the statistics on what the real infection fatality rate was for COVID? Um-

Chamath Palihapitiya 41:12 Yeah, I saw it. It was like-

David Sacks 41:13 I think, you know, Bill-

Chamath Palihapitiya 41:13 It's, it's about half a percent, .4, and that's across, you know, the whole spectrum. But, like, in, in anyone under 75 years old, uh, you've got the numbers, right, Sax?

David Sacks 41:23 Right. But it's, here, let me pull it up so on, uh, we, we tweet, I think Bill Gurley first tweeted it and then I retweeted it.

Chamath Palihapitiya 41:28 Yeah, I thought, I thought the IFR was, like, .1 if you're young, and it goes all the way up to, like, .4 if you are above 75.

41:35 It's way, way less than .1 if you're not.

41:37 Way, yeah. It's, it's, it's, it was, um, I thought the IFR was a lot less severe then.

41:43 And by the way, that, that, that IFR is also distorted. You, you know, based on the seroprevalence study that was just published, you can take that number that's published and divide it by about three, uh, three to five-

41:54 Why?

41:55 ... uh, to get, to get the true IFR because not everyone that's had COVID ha- is registering as a positive infection because they had COVID and got over it. So, there was a paper published in, in, um, uh, in JAMA a few weeks ago where they took dialysis patients and they, uh, measured, and they get blood from these dialysis patients, and they measured COVID antibodies, uh, in these patients. And they showed that in the Northeast, 30% of people, it's 27 point something percent of people, have already had COVID. Uh, it's an incredible fact.

42:22 Wow.

42:23 And, uh, and in the West, uh, the number is close in Western states, they've kind of got it all written up in this paper and they did a great job with the paper. It's about 3%. Um, but, uh, in aggregate across the United States, it's a, this was a few weeks ago, so nowadays it's, it's, it was at 10.5% I think, so it's probably closer to 12% now of people have already had COVID. And so then if you assume that number, right? I mean, that's 30 million people. And now you look at how many people have died. We haven't gotten the deaths wrong, right? Because everyone that's died from COVID, we've recorded that death. We know that number's right.

Jason Calacanis 42:52 It could be a little inflated, right? People who died with COVID-

Chamath Palihapitiya 42:55 Yeah.

Jason Calacanis 42:55 ... as opposed to from COVID.

Chamath Palihapitiya 42:57 Exactly, but, but, but, but be conservative and assume that it's right, right? I mean, if I look in the United States-

Jason Calacanis 43:00 Yeah, it's 217,000.

Chamath Palihapitiya 43:02 217,000. If you divide that-

Jason Calacanis 43:03 But the real cases is 30 million.

Chamath Palihapitiya 43:06 30 million. And that's where you, that's where you end up with this, like-... you know, adjusted IFR, true IFR of, um-

Jason Calacanis 43:13 0.1.

Chamath Palihapitiya 43:13 ... you know. Yeah, like very, very-

Jason Calacanis 43:15 Less.

Chamath Palihapitiya 43:16 ... 0.1%, 0.07%. Or 0.7%, sorry. Um...

David Sacks 43:23 By the way, my, my tweets aren't loading right now, so...

Jason Calacanis 43:26 I think Trump just, uh, took the TikTok decree and he just crossed out TikTok and put Twitter and he just shut Twitter down. Just... (laughs)

Chamath Palihapitiya 43:34 What, what? What? Is the TikTok thing done?

Jason Calacanis 43:37 Yeah, who knows? That was like three weeks ago, it doesn't matter anymore, Tremoth (laughs) .

Chamath Palihapitiya 43:43 (laughs)

Jason Calacanis 43:43 Uh...

Chamath Palihapitiya 43:43 Was there a second debate?

Jason Calacanis 43:45 There's, tonight there is going to be two town halls. Um, Trump refused to do a Zoom with, or, you know, a Zoom debate. I- well, I'm talking about the power of Zoom. (laughs) He- a virtual debate he wouldn't do, ostensibly because he's not good when he's not interrupting somebody, would be my take on it. So then, he went to NBC which she made 400 million dollars, I guess, from The Apprentice, and NBC let him take a time slot directly opposite Biden tonight to do his own T- town hall. So they didn't even stagger it. Which NBC, which is responsible for saving Trump, is getting absolutely demolished by their own actors and showrunners on Twitter, so I think NBC is gonna come out swinging tonight in this town hall to try to, uh, you know, take down Trump as maybe their penance. That's my prediction for it. But how do you watch Biden if Biden is up against Trump? Like, th- that's like watching paint dry versus watching like, you know, some maniac running down Market Street with a samurai sword on meth.

Chamath Palihapitiya 44:50 I'll be, uh... I won't be watching either. Um, I cannot wait for this election to be over. How many days until November 3rd? We are like 15 in a wake-up?

44:58 It's 18 days.

44:59 18 days, my gosh.

Jason Calacanis 44:59 Maybe 18?

Chamath Palihapitiya 45:01 Yeah.

45:01 Let us just get this over with.

45:04 It's... Yeah.

Jason Calacanis 45:04 18 days, yeah. 18 days

David Sacks 45:05 I know, we're all sick of it. I, I do feel like, I mean, it's, the, the polls are now showing that Biden is up by as much as 17, I mean things have really, uh, continued to break his way. I think, to, to, to your point, Jason, um, about Trump being more watchable, I think that's sort of Trump's problem is he just can't help making himself the center of the news cycle every single day, and to the extent the election is a referendum on Trump, I think he's gonna get repudiated. If the election were more of a contest, and people would weigh Biden's, you know, positions as well, I think Trump would have a better shot, because I think he does have some, Biden does have some weaknesses. But, um, the whole reason why Biden's basement strategy has been working so far is because Trump just eats up all the oxygen and he's making it a referendum on him, which I think he'll lose if he keeps doing it that way.

Jason Calacanis 45:56 Yeah. You know what they say, Sax: What got you here will not get you there. What got him into his office was the ability to take up the entire media channel during the Republican runoff and just be able to demolish everybody who was entertaining. But that is exhausting.

Chamath Palihapitiya 46:11 I want to change topics.

Jason Calacanis 46:11 It's now exhausting.

Chamath Palihapitiya 46:12 I want to change topics.

Jason Calacanis 46:13 (laughs)

Chamath Palihapitiya 46:14 I would like to ask David to explain his, um, tweet related to Prop 13. Um...

David Sacks 46:22 Or 15, yeah, yeah.

Chamath Palihapitiya 46:23 Prop 15.

David Sacks 46:24 Yeah. So, um, so I saw that that Mark Zuckerberg had contributed $11 million to try and convince the people of California to vote for this Prop 15, which is the largest property tax increase in California history. What it does is it chips away at Prop 13 by moving, um, commercial property out of, of, of Prop 13. And it would then, uh, tax it on what's called fair market value as opposed to the, the cost basis of the property. It would have a lot of unfair consequences for property owners who, who've owned their, their, uh, commercial property for a long time. You know, if you're a, a small business and you've owned your, your store or whatever for 20, 30 years, all of a sudden you're gonna get, your taxes are gonna get reassessed at the new fair market value. Um, but, you know, I just think there's, it- it- the, the, the larger prize though is that the, the u- the California unions, uh, the- the government workers unions wanna chip away at Prop 13. This is the first salvo. First they're going to strip out commercial property, eventually they wanna, they wanna basically repeal all of Prop 13. And I just think it's like so misguided for billionaires to be using their wealth in this way, um, because Prop 13 is really the shield of the middle class in California. And it's kinda no wonder that, frankly, like tech bel- wealth is so dis- increasingly despised in this country, um, because tech billionaires are funding such stupid causes.

Jason Calacanis 47:55 To explain this to people who don't know, in California, if you bought your house in 1970 for $50,000, the 1% tax you pay on it is $500. That house might be worth $5 million today if it was in Atherton. And so, you're still paying what would have been a $50,000 tax bill is a $500 tax bill. So they're starting with commercial spaces and you're right-

Chamath Palihapitiya 48:15 And Jason, sorry, nerds.

Jason Calacanis 48:16 It will go backwards.

Chamath Palihapitiya 48:17 And you can pass it off to your kids.

Jason Calacanis 48:20 At that cost basis.

Chamath Palihapitiya 48:21 Yeah.

Jason Calacanis 48:21 So this is why you have two old people living in a five bedroom.

David Sacks 48:25 Right.

Chamath Palihapitiya 48:26 It caps the rate increase of the, the tax increase every year.

David Sacks 48:30 There, there, there's, there- if you didn't have-

Chamath Palihapitiya 48:32 I guess, Sax, Sax. ???

David Sacks 48:32 If you didn't have Prop 13... No, hold on. It will... If you didn't have Prop... Let me just explain this to people. If you didn't have Prop 13, anybody who owned, who's owned their house for say 20 years would have a massive tax bill all of a sudden, and probably would have to sell their house. Just about anybody who's middle class who's been in California for, for more than a decade or two probably could no longer afford to live in their house.

Chamath Palihapitiya 48:55 But the reality is people are mortgaging that asset, Sax, to access capital that they're using in investing in different things, whether it's, you know, that's fueling the economy, right? So, I mean, the libertarian point of view might be less taxes is good because in this particular case, that building can still be used by that resident-... uh, to buy stuff. Uh, they can take a mortgage out-

David Sacks 49:16 Right.

Chamath Palihapitiya 49:16 ... and they can go spend that money, versus having that money eaten up by property taxes, which just goes to the government.

David Sacks 49:21 Yeah. Well, yeah, so, so, so I, I, I understand that if you were to design the, like, perfect tax policy, it wouldn't look like Prop 13 or, you know, or, you know... And, and maybe Prop 15 in a vacuum, if you're just, like, a policy wonk trying to design the ideal tax policy, it might look more like that. But the real problem in California, we're not an under-taxed state. It's a massively taxed state. And, and there's never enough. You know, the beast always wants more. And so what I would say is, look, if you want to reform Prop 13, do it as part of a grand bargain that creates real structural reform in the state of California. Um, what I mean by structural reform, well, you got to look at, well, who controls the system? And it's really the government employee unions who block all structural reform and who keep eating up a bigger and bigger portion of the state budget. Um, so we've talked about this on previous pods, that the police unions block any kind of police reform. Um, you know, the, the prison unions block prison reform. You've got the teachers' unions blocking education reform and school choice. If you want to talk about systemic problems in California, look at who runs the system. It's these, these gigantic unions. And a bigger and bigger portion of the budget keeps going to them every year. They're breaking the bank. Um, and by the way, it doesn't get us more cops on the beat. It doesn't get us more teachers in the classroom. What it's buying is lots and lots more of administration, along with a bunch of pension fraud. And so what I would do is I would say, look, we need some structural reforms here. We need some caps on the rate of growth in spending. We need some pension reforms. In exchange for that, as part of a grand bargain, you might get some reforms to Prop 13. But just to give away one of the only cards we have in negotiating with these powerful special interests for no reason, I just think it's dumb, you know?

Chamath Palihapitiya 51:07 Do you think that Zuck was tricked or what do you think?

David Sacks 51:11 I think he's probably got... Uh, look, I don't really know, but I don't have anything against Zuck, and I've defended him on this podcast a lot, basically, on, on the speech issue. But I think what it is, he's got some foundation and he's got some pointy-headed policy wonks sitting there trying to analyze what the perfect tax policy is, and it probably looks more like fair market value than, like, cost basis. And they're not thinking about the larger political, um, sort of ramifications, which is we... the private sector is being squeezed more and more by these public employee unions, and we do need structural reform. And we can't just give up one of the only cards we have, which would be, you know, trading reform on Prop 13.

Chamath Palihapitiya 51:53 And Zuck doesn't own any commercial real estate?

51:56 Yeah. (laughs)

David Sacks 51:56 Well, even if... So I, I, I own commercial real estate, but-

Chamath Palihapitiya 51:58 I, I, I would, I would venture to guess that maybe Sacks does. I, I don't know. I mean-

David Sacks 52:01 No, no, no, no, no. Hold on. Let me... Look, I, I, I do, but let me explain that. This doesn't affect me because my cost basis is fresh. Yeah, all the, all the commercial real estate that I've bought in California has been in the last few years. It's probably underwater. I mean, it's certainly not above my cost basis. Um, so I... It doesn't affect me. It affects the little guy. It affects the small business who's owned their property for 10 or 20 years. And again, I'm not arguing that we couldn't come up with a better tax system. But what I'm saying is the bigger, more pressing need is structural reform. We have-

Chamath Palihapitiya 52:31 Totally. No, I mean, look, I, I totally agree. The bloated monster of socialism is coming for us, and it starts with the unions and it evolves and it's just taxing-

52:38 Average salary, I don't know if you saw this go viral in the last couple of weeks on Twitter, but-

David Sacks 52:42 Okay, SF.

Chamath Palihapitiya 52:43 Average sa- average salary in San Francisco, $170,000.

52:47 For a company.

David Sacks 52:47 Not a tech, not a tech worker.

Chamath Palihapitiya 52:49 San Francisco city employees. City employees. Yeah.

52:50 Of city employees. (laughs) I saw that like 170,000 was the average salary.

52:54 Wow.

52:54 I was like, "Oh, wow, tech people are doing good."

52:56 19... 19,000.

52:56 He's like, "No, no, no, that's the city employees."

52:58 19,000 administrative employees in the city of San Francisco, a city of 800,000 people.

David Sacks 53:03 Wow.

Chamath Palihapitiya 53:03 800,000 people.

53:04 With a $14 billion budget.

David Sacks 53:08 The state of California is converting the entire middle class into government workers. Because if you're a small business owner, you're getting squeezed by more and more taxes, you're getting driven out of the state. People leaving the state now exceeds people immigrating into the state. So the, the, the private sector middle class is leaving, and this public sect- this sort of public sector middle class of government workers is being created. And like I mentioned, it's not getting us more cops on the beat, it's not getting us more teachers in the classroom. What it's getting is a giant number of overpaid administrators and bureaucrats. That is the big structural problem. The, you know... Private sector unions are very different. You see, when a, when a private sector union goes to negotiate, they go negotiate against ownership or management, and there's someone to oppose their unreasonable demands. Not all their demands are unreasonable, but just the most unreasonable demands. But it... With the public sector unions, they're negotiating against the politicians, and they are the largest contributors to those politicians. And so there's no one to ever-

Chamath Palihapitiya 54:01 And the politicians need them for their votes, right? They're like, "They're gonna deliver-"

David Sacks 54:04 Right. Right.

Chamath Palihapitiya 54:04 "... whatever number of teachers, police officers."

David Sacks 54:06 So the unions, the unions feed the... Exactly, the unions feed the politicians and the politicians feed the unions. That is a structural, um, that is a structural problem. And, and, and these unions will... The unions will never be appeased. You can never buy them off.

Chamath Palihapitiya 54:19 It's why democracy always ends in, in, in the state. Like, it's, it's just an inevitable outcome.

54:24 I, um, I had no idea about any of this until, um... I'm glad I asked you about that tweet. That's really... I, I actually learned, uh, a lot just in that last little bit.

Chamath Palihapitiya 54:34 Uh, I have one other thing I want to ask you guys about, which is the Amy Coney Barrett confirmation hearings, whether you guys have watched them and what you guys think. Um, and I don't know whether these are just, um, cherry-picked clips or whether she's playing dumb or... I, I really don't want to judge because I want to know more, but I just want to know what you guys think of... uh, going into this. Um, you know, the-

54:59 Well, I'll say something about climate change because... Look, I'm... I, I, I spend a lot of time looking at data and research on climate change and certainly feel strongly that there's a, a human-caused function of, of global warming that, that, that we're actively kind of experiencing.... but I think everyone kind of assumes you have to take that as truth. I think one of the, the key points of science is you have to recognize your ignorance, and you have to recognize that science is, um, you know, kind of an evolving process of discovery and understanding. I, I don't... And she's getting a lot of heat for what she said about, "I'm not a scientist. I don't know how to opine on climate change." And I heard that and it actually gave me a, a bit of pause that like, this, this is e- exactly, you know, what I would expect someone who's thoughtful to say, not someone that's trying to act ignorant and play to the right. Um, and she didn't say, "I don't think climate change is being caused by humans." And I think like everyone kind of wants to jump at her and every... It's like become religion. I just want to point out that climate change has become as politicized and as dogmatic as all these other topics we talk about. And we all kind of assume that if you do or don't believe in climate change, you're left or right, you're evil, you're good. Um, and I, I think like it's very easy to kind of just go into hear- those hearings and assume that. But I wouldn't say that her answer necessarily made me think that she is ignoring facts and ignoring the truth. I think, you know, she's kind of pointing out that this is a process of science and there's a lot of discovery underway. So I, I don't know. I mean, that was one point that, controversial point, that I thought I should make, um, 'cause I am a believer. I, I do think that climate change is real. I do think the data and science supports it. But I do appreciate that someone recognizes that they may not (laughs) have the skills ...

56:40 Yeah. The few, the few clips ...

56:41 ... rather than just assume what the, what the media tells them to, uh, to believe, you know?

56:44 Yeah. The few, the few clips that I saw of the confirmation hearing, my takeaway was basically, you know, any candidate on the left or the right comes in extremely well-coached, and they're taught basically how to evade, meaning there's a go-to answer. Amy Coney Barrett's go-to answer was, um, "Listen, as a judge, I'd have to s- you know, hear that case on the record. I can't opine on something hypothetically." You know, she had this very well-rehearsed answer, and a lot of the answers to the questions from the left were that. Um, and, uh, you know, the questions on the right were, um, more softball-ish. Um, so I couldn't really get a sense of it. Now, the, the thing that I take kind of a, a, a lot of comfort in is that, you know, when we saw John Roberts get confirmed to the court, um, it was supposed to be five-four conservative with John Roberts. And basically what we learned was now John Roberts in, you know, some critical decisions, he is willing to basically, you know, uh, make sure that things don't change that much.

David Sacks 57:42 Right.

Chamath Palihapitiya 57:42 Um, including Obamacare.

David Sacks 57:44 Yeah, exactly. You, you, you don't... You don't know exactly how they're going to vote on these issues. You really don't. Roberts was the deciding vote in upholding Obamacare. Gorsuch, uh, extended, uh, gay rights well beyond anything Anthony Kennedy ever did. That was a big surprise. And so, we don't really know exactly how she's going to vote. The reason why Amy Coney Barrett rocketed to the top of Trump's list, quite frankly, is because of how Dianne Feinstein treated her three years ago in the last confirmation hearings where she is, she... Where Feinstein attacked her Catholicism. It was, and it was so ham-handed, it was so poorly done that it made Barrett a hero instantly on the right, and it rocketed her to the top of this list. But, but we don't know how she's gonna vote based on her Catholicism, you know? People-

Jason Calacanis 58:29 Which is a feature, isn't it, David? Because e- the lifetime appointment means they, like tenure, they can go with what they think is right. So that, that is kind of a good feature of the Supreme Court, or do you think there should be like a, a term?

David Sacks 58:43 Well, I, I think it's a little crazy that decisions as important as, you know, the, the, the, the right to, to choice or something like that, um, hangs on whether an 89-year-old, uh, cancer victim can hold on for three more months. You know, it seems very arbitrary to me. And therefore, these Su- Supreme Court battles become very, um, heated and, and, um, and, and, and toxic. And there's been a, a recent proposal by Democrats that I, that I would support, which basically says, listen, we should have an 18-year term for Supreme Court justice. That's long enough. And each president should get two nominees, like one in the first year, and then one in the third year. And so you basically have one justice rolling off every two years, and one coming on. And so you have nine justices, and so every two years adds up to 18 years. That proposal makes a ton of sense to me. And, um, and so, you know, you know that when you vote for a president, they're going to get two Supreme Court picks. Um...

Jason Calacanis 59:40 Um, that feels less chaotic than this.

David Sacks 59:42 That would be, that'd be a much better system, much better system.

Jason Calacanis 59:45 That's a, that's a great idea. That's a great idea.

Chamath Palihapitiya 59:46 Yeah.

Jason Calacanis 59:46 That's a great idea.

David Sacks 59:46 I think it's a f- I think it's a fabulous idea. Yeah.

Jason Calacanis 59:48 I, I took solace in the fact that when they asked her the, uh, fr- what's protected in the First Amendment, she couldn't name all five things that I could. (laughs) And I was like, "What about protests? Did you miss that one?" And I thought that was like a... I mean, it's a gotcha moment, obviously. Uh, and it's not easy to be under that kind of scrutiny. And obviously she-

Chamath Palihapitiya 1:00:05 Justice Jaykal.

Jason Calacanis 1:00:07 Wow, I just thought that was like...

Chamath Palihapitiya 1:00:08 (laughs)

1:00:08 (laughs)

Jason Calacanis 1:00:08 It's also like pretty interesting ...

Chamath Palihapitiya 1:00:11 Could you imagine? Oh, yeah.

David Sacks 1:00:12 I think they, I think they, I think they, I think they invented the word unconfirmable.

Jason Calacanis 1:00:16 Oh, Rod DeAngelfele. I think they invented the word unconfirmable for Jaykal.

Chamath Palihapitiya 1:00:20 You got a right to have your own pistola, but you shouldn't have a shotgun.

Jason Calacanis 1:00:25 (laughs)

Chamath Palihapitiya 1:00:25 Boys, Friedberg- Friedberger's has a hard stop at 3:00.

1:00:27 Yeah, I gotta run.

Jason Calacanis 1:00:28 Uh, uh, uh, the, the, uh, the fact that she left out protesters is interesting. I do think... Let's, let's just end on the election, uh, and our little handicapping of what's gonna happen and, uh, getting out of this mess. I do think one of the stories coming out of this is gonna be, uh, female voters. I have the sense, and I know it's anecdotal, that Trump has just alienated and pissed off so many women, and that the threat of the Supreme Court thing, and with, uh, RGB dying, uh, this has made women feel so underappreciated and attacked, especially with Trump, um, uh, you know, in terms of how he treats women and things he says about women. And then you had......the constant interruption by, uh, Pence, of the moderator, and Kamala. Like, I think all of this is gonna add up when we do the post-mortem on this. Losing all these women as voters is gonna be... And, and as well as, uh, the Black vote and people of color. This is gonna be, uh, a big part of it. So, I think that Trump's gonna lose and it's gonna be a landslide.

Chamath Palihapitiya 1:01:40 (laughs)

Jason Calacanis 1:01:41 That's what you know.

Chamath Palihapitiya 1:01:41 What a roundabout way to say the same thing you've been saying for four months.

David Sacks 1:01:45 Yeah. Yeah. Oh my God.

Jason Calacanis 1:01:46 The way he's disrespected women is going-

Chamath Palihapitiya 1:01:48 I don't know. Listen, I, I, I don't know, uh, I think Biden is a, is, is on the path to an enormous victory right now.

David Sacks 1:01:56 Well, that, that's what the polls, that's what the polls say certainly is that it looks like a Biden landslide. I, um... And I, I guess that makes sense. I think Trump's running out of time to change the polls. Um, every day that goes by, he's basically got like 19 outs. What is it? What, where 18 days he's got 18 outs? Every day that goes by where he isn't able to move the poll number, he loses an out, right? And so we're gonna get closer to election day, he's only gonna have a, like a three outer or something. Um, so yeah, I, I, I mean, look, obviously I understand the polls. I still somehow think it... I know it sounds kinda weird but I'm just not sure Americans are ready for this reality show to end. I mean, we know it's jumped the shark, okay?

Chamath Palihapitiya 1:02:34 (laughs)

David Sacks 1:02:34 But the Kardashians, the Kardashians lasted for 19 seasons.

Jason Calacanis 1:02:37 Yeah.

David Sacks 1:02:37 I just don't know-

Chamath Palihapitiya 1:02:39 Yeah.

David Sacks 1:02:39 ...if America's ready for the Trump reality show to be over.

Chamath Palihapitiya 1:02:42 Part of the, I, I think part of the appeal of Trump last time around was the, the, uh, message of change. And he's not delivering a message of change anymore. And I think that's where he's kind of lost the narrative. Um, and, uh, the excitement of building a wall and changing everything and draining the swamp. Like, he's just like, "Keep draining the swamp," or, "Keep building the wall."

David Sacks 1:03:01 (laughs)

Chamath Palihapitiya 1:03:01 And, uh, people don't love that. He's also, um, he also... I think it's coming across as not being... He's looking weak by not being willing to be challenged. And that came across clearly in that debate. He... Last time around he got on stage and he just knocked everyone down. But by not letting Biden talk, by not kind of engaging on any of the topics, he looks just, um, he looks like he just doesn't wanna, uh, have a shot at it and it just comes across as bad. So, I don't know, these are all contributing factors, I think, to what's going on.

Jason Calacanis 1:03:30 Chances of a pardon by Pence. He resigns, he pardons himself. Pence pardons him.

Chamath Palihapitiya 1:03:37 Zero. Zero.

Jason Calacanis 1:03:38 Zero?

Chamath Palihapitiya 1:03:38 Ego ties.

Jason Calacanis 1:03:38 Taxed?

Chamath Palihapitiya 1:03:39 He won't, he won't resign.

David Sacks 1:03:41 Um, well, uh, we wouldn't see that unless he lost the election.

Jason Calacanis 1:03:45 If he loses, that's it.

David Sacks 1:03:46 During the lame duck, during the lame duck period-

Jason Calacanis 1:03:49 Yes.

David Sacks 1:03:49 ...if he lost maybe 20%.

Jason Calacanis 1:03:51 20%, yeah.

David Sacks 1:03:52 Because at that point he's got nothing to lose, right?

Chamath Palihapitiya 1:03:55 Right.

Jason Calacanis 1:03:55 That... I think it's, I think it's like a... I think it's 50/50, he just goes for the full family pardon. Uh...

Chamath Palihapitiya 1:04:02 (laughs)

Jason Calacanis 1:04:02 All right.

Chamath Palihapitiya 1:04:02 All right, love you guys, I gotta go.

Jason Calacanis 1:04:04 All right, guys-

Chamath Palihapitiya 1:04:05 Love you guys.

Jason Calacanis 1:04:05 Uh, love you guys and, uh, hopefully we'll have a, a bestie poker soon.

Chamath Palihapitiya 1:04:09 Yay.

Jason Calacanis 1:04:09 See you soon.

Chamath Palihapitiya 1:04:09 Talk to you guys later. Bye.

Jason Calacanis 1:04:10 Cheers, bye.