E149: Hamas terror attacks in Israel: fallout, reaction, next steps

1. 0:00 – 3:49

   Opening statements on the Hamas terror attacks in Israel

   1. JCJason Calacanis0:00

      All right, everybody. Welcome to episode 149 of the All-In Podcast. With me again, David Sacks and Chamath Palihapitiya. David Freiberg couldn't make it this week. We're gonna carry on without him and it's a difficult week, so just a quick opening statement from me about this episode. Like all of you, we're devastated by the terrorist attacks that occurred in Israel on Saturday, and I just wanna start the discussion here with two important housekeeping notes first. Uh, this is obviously a very dynamic situation and we're dealing with the fog of war, quite literally, so we're gonna do our best to make sense of what's happening, but things will change between when we tape this episode on Thursday and you choose to listen to it, in all likelihood, at some point over the weekend. Uh, second, there are gonna be some folks out there who claim, quite correctly, that we are not the experts on this topic, and thus we shouldn't chime in with our opinions. On the other side, the All-In community has told me explicitly they wanna hear us discuss, uh, what happened and they want a sense of normalcy. As one loyal listener explained to me last night at a dinner, "The fact that the four of you can debate hard topics, listen to each other, and in the end have a deeper understanding of the world gives me hope every week. That's why I listen." So, uh, we'll do what we do here every week. We'll have the hard discussion, we'll, uh, listen to each other deeply hopefully, and we'll try to understand the world and each other just a little bit more. And that's worth it, at least to me and apparently many of you. So with those two quick disclaimers, gentlemen, anything you wanna say up front before I recap where we are five days into this senseless brutality?

   2. DSDavid Sacks1:34

      I think that was a pretty good intro, Jason. I mean, you're right. We're taping on Thursday, late morning Pacific Time. By the time this drops, it'll be Friday.

   3. JCJason Calacanis1:45

      Yeah.

   4. DSDavid Sacks1:45

      And so a lot could have happened. Also, it's true that the Middle East in general and this topic in particular is hugely complicated. We will be accused of not being experts, but at the same time, the audience seems to appreciate our opinions as consumers of information who are trying to make sense of the world.

   5. JCJason Calacanis2:01

      Yeah.

   6. DSDavid Sacks2:02

      So that's all we can really do.

   7. JCJason Calacanis2:04

      Right. And conversations, I think, are, are how we make progress. Any, any thoughts before we get started here? And I'll recap what's occurred. Chamath, any, any, um, opening thoughts before we get into the details here?

   8. CPChamath Palihapitiya2:16

      On behalf of somebody who worked in Israel, I have a lot of friends there, spent a lot of time there, it's really just a terrible, devastating situation. I've really tried to stay off of social media just 'cause it's allowed me to kind of think a little bit more logically. It's fast and furious right now, I think, on X. And it's just a lot of people trying to make sure that their version of the truth is amplified over every other version of the truth, which I think is like, uh, is a point in the cycle where you, you just have to almost unplug from the matrix a little bit and find the few places that seem to be just telling things in an evenhanded way, which I also find on X, and then just kind of reconstruct what happened, why it happened, what do we do from here. I don't know. I don't know. I don't... I- I have a lot of thoughts on a lot of the peripheral issues, but the core issue is just, I'm just stunned that this happened. I don't, I- I don't even-

   9. JCJason Calacanis3:22

      Mm-hmm.

   10. CPChamath Palihapitiya3:22

       ... know how this is possible that this happened.

   11. DSDavid Sacks3:24

       Like Chamath, I'm not trying to get too weighed in too deeply into the tweets, but-

   12. JCJason Calacanis3:30

       I did notice you, by the way, have stopped tweeting. You've done a couple of retweets, but you- you've paused this week, uh, a lot of your tweeting.

   13. DSDavid Sacks3:39

       Yeah, I mean, uh, I think that-

   14. JCJason Calacanis3:40

       You're processing things right now?

   15. DSDavid Sacks3:41

       ... this is an important time to listen and learn and process what's going on.

   16. JCJason Calacanis3:45

       Right.

   17. DSDavid Sacks3:45

       This is not a great time to be having hot takes. I have posted a few things.

2. 3:49 – 19:52

   Contextualizing the attacks and the fallout so far

   1. DSDavid Sacks3:49

      First of all, Jason, you've made the analogy to, to 9/11 being in, in New York right now.

   2. JCJason Calacanis3:53

      Yeah.

   3. DSDavid Sacks3:53

      I think that, that is the comparison that's been made is that this is Israel's 9/11.

   4. JCJason Calacanis3:58

      Yeah.

   5. DSDavid Sacks3:58

      I think that's a justifiable comparison in, in two respects. One is, this was a terrorist attack, it was an atrocity, this was a, a massacre of, of civilians. Even if you're somebody who believes in the Palestinian cause, you should be able to recognize that these were war crimes.

   6. JCJason Calacanis4:15

      Yeah.

   7. DSDavid Sacks4:15

      The videos are coming out, the stories are coming out, in particular, the rounding up and, and slaughter of 260 attendees at a music festival was really beyond the pale. They're clearing some of these, uh, farming villages and so forth and finding the bodies, you know, families basically killed. Anyway, we don't need to repeat all, all the det- details here but, um, but this was, I think, an attack on civilians that is reminiscent of, of 9/11 and, and, um, has affected-

   8. JCJason Calacanis4:47

      Yeah.

   9. DSDavid Sacks4:48

      ... the Israeli people in a similar way. I think the other analogy to 9/11 that's worth discussing is the reaction to this, or what, what Israel's gonna do and what the reaction is by US political figures. You heard people like Nikki Haley basically saying to, to Netanyahu, "Finish them." It wasn't exactly clear whether she was just talking about Hamas or the whole Gaza Strip or maybe Iran.

   10. JCJason Calacanis5:15

       Yeah.

   11. DSDavid Sacks5:15

       And then if there was any ambiguity about that, you just had Lindsey Graham come out and say, "Level the place," meaning referring to all of Gaza.

   12. JCJason Calacanis5:22

       Yeah, it's crazy. Yeah.

   13. DSDavid Sacks5:23

       I'm very concerned that one of the purposes here of, of the terrorists was to provoke an overreaction like the US, uh, engaged in after 9/11. Remember, we were viciously attacked, we were wounded, we then lashed out and plunged into two decades of wars in the Middle East. What was the result of that? We lost thousands of lives of our own soldiers, we spent trillions o- of our treasure.

   14. JCJason Calacanis5:49

       Yeah.

   15. DSDavid Sacks5:50

       Millions of people on the other side died.

   16. JCJason Calacanis5:52

       Yeah.

   17. DSDavid Sacks5:53

       And d- we... At the end of the day, we only changed the geopolitical map of the Middle East in ways that were ultimately unfavorable for us. Iran became a more powerful country.... the region became destabilized and we squandered, uh, the sympathy that the United States had and its moral position that we had after 9/11 in the eyes of much of the world.

   18. JCJason Calacanis6:13

       Yeah.

   19. DSDavid Sacks6:13

       So, the US, I think, fell for the trap that I think bin Laden laid, which was to provoke us into an overreaction. I think that is one of the goals of terrorists, is to create such an outrage, such a provocation that they will bait the other side into an overreaction. I'm quite concerned that could happen here. I think that our US leaders should be, as friends of Israel, should be counseling a cool-headed response. I think braying for war with Iran or suggesting that the entire Gaza Strip should be leveled would be doing exactly the wrong thing. It would ignite the Arab street, uh, throughout the Middle East.

   20. JCJason Calacanis6:51

       And to your point, perhaps that was the goal here and, uh, y- we're trying to figure out what is the goal of this attack that was planned for years. A- and perhaps that was the goal, is to try to take all the hard-fought peace and progress that has been made in that, uh, process over the, uh, over the last couple years, Abraham Accords, and, and, you know, stability, a- and then just, you know, really create a full-scale e- escalation.

   21. DSDavid Sacks7:16

       I think that's right. I mean, look, I think Israel is within its rights to dismantle and destroy Hamas.

   22. JCJason Calacanis7:21

       Yeah.

   23. DSDavid Sacks7:21

       Hamas is an organization that, in its charter, has said they're committed to the destruction of Israel. They've now committed this atrocity. Again, it was ... If they had just limited their attack on uniformed Israeli officers and military, I think that would be one thing.

   24. JCJason Calacanis7:37

       Yeah.

   25. DSDavid Sacks7:37

       But they went much further than that. The vast majority of the casualties here are civilians who were murdered in atrocious ways. So, I think they're a terrorist organization and Israel is well within its rights to destroy them. However, the question is how you do that.

   26. JCJason Calacanis7:52

       Yeah.

   27. DSDavid Sacks7:52

       Like a lot of terrorist organizations, Hamas can kind of melt away into the population of Gaza. They've, apparently have these elaborate tunnel networks. They've got bunkers. So it's not clear that you can destroy them from the sky through, uh, bombing. Those kinds of bombs would lead to a lot of civilian casualties which will inflame the situation and turn opini- uh, world opinion against Israel. At the same time, if they go in with ground forces, that seems like a really tough situation as well because Hamas is waiting for them and they, they'll have to fight a guerrilla war in a very tightly packed, dense urban area where Hamas likely has anti-tank weapons, weapons that we've seen that have been so effective against armored vehicles in Ukraine. Again, if the, uh, fighting gets too hot, they can disappear into these tunnel networks. There's gonna be IEDs everywhere. It's gonna be a very, very tough fight for the Israelis. So, I think they're in an incredibly tough spot. I'm not quite sure what the right reaction is for them, but I do think that if the reaction is this, uh, let's call it the Lindsey Graham level the place reaction, I think that could set off a much wider regional war or even a world war. And that is not something that's ultimately gonna help Israel, and I hope that our leaders are wise enough to be counseling against that.

   28. JCJason Calacanis9:17

       I get the sense that they're not going to, uh, go that hard. And if you look at the American response to 9/11, you know, going into Afghanistan and dismantling Al-Qaeda, a noble mission, and we didn't have any more terrorist attacks on Ameri- or very, we thwarted most terrorist attacks. There were attempts actually, and our intelligence was very strong over the last couple of decades and we haven't had another one of those. But you're right, going into Iraq and then, you know, what, what was the last decade about being in Afghanistan?

   29. DSDavid Sacks9:46

       We went into Iraq, we went into Syria, we went into Libya, we stayed in Afghanistan for 20 years.

   30. JCJason Calacanis9:50

       Yeah.
3. 19:52 – 28:51

   Trump administration's wins, Kushner's competence, path to a two-state solution

   1. CPChamath Palihapitiya19:53

      as a Democrat who has been left homeless, who is now definitely in the center but probably leaning increasingly right, I'm left yet again with an appreciation, despite the messenger of the message of the Trump administration, because what those guys did was pretty incredible in hindsight. These Abraham Accords, the accords with Israel and the GCC, the almost accord between Israel and Saudi, to really be able to, like, find long-lasting peace is just a real example for the world. And, you know, those guys did a lot of really good work and-

   2. JCJason Calacanis20:36

      I- it's, it's a miracle actually when you, when you look at it. What they did-

   3. DSDavid Sacks20:38

      Yeah.

   4. JCJason Calacanis20:38

      ... you know, despite the fact ... Listen, I'm no fan of Trump and I am too homeless But this is where ... But can I say this? ... in his political party, but if you want to- But this is- ... objectively look at what they did, that was good work. You have to- It was great work.

   5. CPChamath Palihapitiya20:49

      You have to.

   6. DSDavid Sacks20:49

      Yeah.

   7. CPChamath Palihapitiya20:49

      You have to. And in fact, this is a moment where you have to start to re-underwrite. Like, is your ... Not your Jason, but I'm just saying-

   8. JCJason Calacanis20:57

      Yeah.

   9. CPChamath Palihapitiya20:57

      ... collectively, is one's Trump derangement syndrome causing more damage than anything that Trump could have actually done? And I think the answer is yes, because like it's now causing us to not see that good work and then embrace and extend it. So much of the work that happened in that administration turns out to have been right, and that's what's so frustrating for me. The work on the border wall, we didn't like the messenger, so we killed the message. Turned out it was right. Issuing long-term debt to refinance when rates were at zero, we didn't like the messenger, so we killed the message. A structural peace in the Middle East, we didn't like the messenger, so we killed the message. When are we going to stop shooting ourselves in the foot? And when are we going-

   10. JCJason Calacanis21:44

       Yeah, I mean-

   11. CPChamath Palihapitiya21:44

       ... to actually see and take the time to look past who is saying things and actually listen to them word for word? I'll give you an example. I started to tweet three links a day over the past-

   12. JCJason Calacanis21:58

       I saw that, yeah.

   13. CPChamath Palihapitiya21:59

       ... three days. And the only reason I did that was I thought things were so hyper-contentious and hyper-partisan that I just wanted to show a few sides, right? And one day, I found a couple links, two of which, one was from Jonathan Greenblatt of the ADL, who I thought had a very powerful message, and one was from Mike Flynn, and his message was also actually pretty powerful if you just read it. And if you took the names off, all the content was so valuable, both points of view. But the minute it goes into the world, people immediately judge and they kill the message because of the messenger. And this is exactly a moment where you have an opportunity to just stop doing that because the stakes are so high. It's infuriating actually, quite honestly. It's infuriating to see it.

   14. JCJason Calacanis22:46

       We had this last week on the show when we were talking about reducing spending. That Matt Gaetz is not the perfect messenger, but his message was the message we've been talking about, which is, "Hey, we have to control spending." So, you ... I can understand people not liking Matt Getz from this (laughs) Gaetz. There's a lot of things to not like about him. I can understand people not liking Trump and-

   15. CPChamath Palihapitiya23:02

       Get over it.

   16. JCJason Calacanis23:03

       Well, and then, you know, i- it's, it's bizarre that his son-in-law went to do all this work, but yet he did it and it had success.

   17. CPChamath Palihapitiya23:12

       That's another example.

   18. JCJason Calacanis23:13

       And so, it's weird-

   19. CPChamath Palihapitiya23:15

       If you-

   20. JCJason Calacanis23:15

       ... to send your son-in-law-

   21. CPChamath Palihapitiya23:16

       If you listen to this-

   22. JCJason Calacanis23:16

       ... to do it, but I listened to the Lex Fridman podcast.

   23. CPChamath Palihapitiya23:18

       No, it's not. Okay. You know what? N- it's not weird, because at the end, if you listen to this podcast, the most important thing that is resoundingly obvious about Jared Kushner is that he is incredibly thoughtful and incredibly competent. And-

   24. DSDavid Sacks23:33

       Right.

   25. CPChamath Palihapitiya23:34

       Why did we have to spend years being fed all of these stupid lies? Because one can judge for oneself, but Jared Kushner is thoughtful, he's smart. And I thought to myself, "I was fed all these lies for years about how this guy was, like, moping around in the shadows and this and that, and it was all not true."

   26. JCJason Calacanis23:56

       Well, no. When I say it's nontraditional, if you sent, you know, any president's son-in-law, daughter-in-law, whatever, child, to go to the Middle East, on its surface, this seems insane.... but in fact he- they did good work, and so it's not traditional. It's, it's not what you would expect.

   27. CPChamath Palihapitiya24:16

       He's thoughtful and competent. That's what I thought after-

   28. JCJason Calacanis24:19

       I- that's what I got out of it as well, is that he's thoughtful and competent. Yeah.

   29. DSDavid Sacks24:22

       Yeah, yeah, he brought some fresh ideas. Just so the audience is clear, what we're talking about is he just did an interview with Lex Fridman, and the first hour was on what's happening with Israel and Hamas.

   30. CPChamath Palihapitiya24:31

       Must, must watch, I think.
4. 28:51 – 46:53

   Letter from Harvard student organizations: understanding the reaction and fallout

   1. JCJason Calacanis28:51

      or containing it.

   2. CPChamath Palihapitiya28:51

      Were you surprised at all, Jason, by the amount of people that seemed to be almost justifying what happened?

   3. JCJason Calacanis28:59

      That was shocking to me. I mean, I, I, it, the, the fact that people could make any kind of equivalence between terrorist activity and the, the level of brutality, I, I, I, I can't even describe it because it'll trigger my PTSD, which I, I had (laughs) after 9/11, and it still affects me. I'm sitting here not far from Ground Zero. A- and, you know, for people, you know, educated people on colleges' campuses or j- just otherwise to blame the Israelis for the murder of children, for people being r-... and then justifying rape and torture and kidnapping, I mean, there is no justification, and there is no equivalency. There's no equivalency here, and th- and this is one of the big problems, and, you know, these dopey kids on Harvard's campus or whatever, they have never experienced-

   4. CPChamath Palihapitiya29:47

      Harvard, Stanford-

   5. JCJason Calacanis29:47

      ... evil or suffering.

   6. CPChamath Palihapitiya29:49

      ... Cornell, U Penn.

   7. JCJason Calacanis29:50

      And, and we can, we can literally just dismiss these idiots because these are kids who have never faced evil-

   8. CPChamath Palihapitiya29:57

      But Jason, I don't- I don't think you can. I think one of the things that was shocking to me was the level of basically either subtle or blatant antisemitism-

   9. JCJason Calacanis30:07

      Unconscious, yeah, subtle, whatever, yeah.

   10. CPChamath Palihapitiya30:09

       ... that it unlocked, and-I was also shocked at just ... Sachs has used this word before, but it's true, but our leading educational institutions have really become woke madrasas. They are inculcating kids with just some virulent poison.

   11. JCJason Calacanis30:26

       I think the reaction is always to go after ... t- to support the underdog, I think, in this group of people.

   12. CPChamath Palihapitiya30:31

       What does that even-

   13. JCJason Calacanis30:31

       Whoever they perceive as ... That is an idiotic simplification that the smartest schools in the world educating the smartest kids in the world- Yes.

   14. CPChamath Palihapitiya30:39

       ... should be capable of seeing, though.

   15. JCJason Calacanis30:41

       That's how they think, though.

   16. CPChamath Palihapitiya30:42

       It can't be that simple.

   17. JCJason Calacanis30:43

       This is not my feeling on it. I think that they-

   18. CPChamath Palihapitiya30:45

       It can't be that simple.

   19. JCJason Calacanis30:45

       It's half antisemitism, and it's half they just think, "Who's the underdog? I'm taking that side."

   20. CPChamath Palihapitiya30:51

       Yeah, I did think it's that simple.

   21. DSDavid Sacks30:52

       Right, well-

   22. CPChamath Palihapitiya30:52

       I- it is in the woke mindset, yeah.

   23. DSDavid Sacks30:55

       Well, look, I think it was disgusting and disturbing to see these organizations and these elite institutions being unable to denounce Hamas' terrorist attack and the atrocity that took place, or turning out in the streets to celebrate what happened. And we saw a lot of that too. Look, even if you support the Palestinian cause, even if you believe that they've been mistreated, even if you think that their land has been occupied, they deserve their own state, even if you believe that war against the State of Israel is justified on that basis, these were still war crimes. These were beyond the pale of war. Again, Hamas did not just attack some military installations on the border and kill soldiers or capture soldiers. The vast majority of the people who were killed were civilians. And there was no conceivable military purpose in, for example, paragliding into a music festival, a festival for peace by the way, and then rounding up and slaughtering the concertgoers. There was no conceivable military justification for going into these kibbutzes or farming communities, you know, massacring families-

   24. CPChamath Palihapitiya32:07

       Burning kids.

   25. DSDavid Sacks32:07

       ... massacring families, exactly, killing.

   26. CPChamath Palihapitiya32:07

       No, no, it's deranged. It's deranged.

   27. DSDavid Sacks32:09

       It's deranged, so ...

   28. CPChamath Palihapitiya32:10

       It's deranged. It's terrorism. And the fact that they can't frame it as terrorism is insane. But think about what happened, okay? I just wanna frame the order of events, okay? 10/7 happens, and I think within 36 hours or less, let's take Harvard as an example, okay, the pinnacle-

   29. DSDavid Sacks32:27

       Yup.

   30. CPChamath Palihapitiya32:27

       ... of the woke madrasas. They had all these student organizations immediately come out trying to justify this thing without any information, right? Because in the first 36 hours, obviously not nearly as much information was available as to exactly what happened than has been available now, as an example.
5. 46:53 – 1:05:47

   The Biden Admin's next steps, electing excellence in leadership

   1. JCJason Calacanis46:53

   2. DSDavid Sacks46:53

      There's one other aspect to this I think we should talk about, which is just the-

   3. JCJason Calacanis46:56

      Okay.

   4. DSDavid Sacks46:56

      ... the United States' larger geopolitical situation right now. I mean, things seem very tenuous. I did an event with, um, Palmer Luckey actually, friend of the pod recently.

   5. JCJason Calacanis47:06

      Oh, friend of the pod. Friend of the pod.

   6. DSDavid Sacks47:07

      Yeah. (laughs)

   7. JCJason Calacanis47:07

      Tell him I said hi. My invite got lost.

   8. DSDavid Sacks47:09

      Yeah. We ha- we actually had a nice, uh, debate/discussion on, on Ukraine. But the thing that I think we agree with is that the US better bring more innovation at the milit- military industrial-

   9. JCJason Calacanis47:22

      100%. Yeah.

   10. DSDavid Sacks47:22

       ... complex and, and figure out like, procurement. Because our whole cost plus system right now is so broken. There was an article recently in the New York Times where it said that the cost to the United States of producing an artillery shell is $6,000. For Russia, it's $600. So in other words, it costs the US ten times what it costs Russia to produce an artillery shell, even though Russia's considered to be this super corrupt kleptocracy where everyone steals everything. And yet, our procurement system is ten times more efficient than theirs.

   11. JCJason Calacanis47:53

       'Cause we don't have, we don't have competition and all the politicians are captured. Correct?

   12. DSDavid Sacks47:56

       We have this cost plus accounting system where every year, the price goes up-

   13. JCJason Calacanis48:00

       It'd be a good opportunity to explain that, yeah.

   14. DSDavid Sacks48:01

       So in every other part of technology, price goes down over time, right? You can produce more of something for less. We've seen this with Tesla, we've seen it with PCs, we've seen it with television sets. Whatever it is, the price goes down-

   15. JCJason Calacanis48:18

       Laptops, servers.

   16. DSDavid Sacks48:19

       ... over time. Yeah. Or, if the price goes up, it's because you've developed some fundamentally new capability, some new version, you know, the-

   17. JCJason Calacanis48:25

       Yeah, more powerful chips.

   18. DSDavid Sacks48:27

       Yes, exactly.

   19. JCJason Calacanis48:28

       More storage. Faster speed. Yeah.

   20. DSDavid Sacks48:28

       But, you know, we're still making the same artillery shells, the same Stinger missiles, the same Javelins and so forth. I don't think the capabilities have changed that much, but the price goes up every year-... because it's cost plus. And so-

   21. JCJason Calacanis48:42

       Explain cost plus. People may be hearing that for the first time. Yeah.

   22. DSDavid Sacks48:44

       Well, y- you know, most companies sell something and then they have a profit margin. But-

   23. JCJason Calacanis48:48

       Right.

   24. DSDavid Sacks48:48

       ... the way that government procurement works is the profit margin is controlled. They're only allowed to mark it up a certain amount above their cost. But the thing that's happened in the defense industry is there's been huge consolidation over the past couple of decades, where now you've got a handful of defense companies and it's an oligopoly. And many of these key armaments are single source, so there's only one producer, and they just keep raising the price every year. Now, one of the kind of crazy things about this is, and Palmer made this point, is it's not like anyone's getting rich. Because of cost plus, it's not like the money is basically making these companies inordinately profitable.

   25. JCJason Calacanis49:27

       There's no incentive to lower the price. If you lower the price and you're at 10% and you got your $6,000 down to $4,000, 10% of $4,000 is a lot less than 10% of $6,000.

   26. DSDavid Sacks49:37

       What's happening is not creating-

   27. JCJason Calacanis49:38

       Perverse incentive.

   28. DSDavid Sacks49:38

       ... Google-like margins. What's happening-

   29. JCJason Calacanis49:41

       Hmm.

   30. DSDavid Sacks49:41

       ... is that these companies keep building their bureaucracies bigger and bigger. So they hire lots of staff, they make a lot of campaign contributions, they fund think tanks. And so their cost structure just keeps getting more and more bloated.

Episode duration: 1:05:47