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All-In PodcastAll-In Podcast

E2: Rebooting economy, understanding corporate debt, avoiding a depression & more with David Sacks

0:01 Jason & Chamath catch us up on their quarantines 1:20 Chamath intros David Sacks 4:40 David explains what their poker group chat has been like since COVID-19 started, and how Jason, Chamath & himself fall on the optimistic/pessimistic spectrum 6:58 How have the past few months defined David's view on the world, and what is his reaction to the US government's response? 12:22 Did the US health apparatus do its job? How could it improve? Why aren't masks already mandated? 19:33 Culture clash between scientific experts & entrepreneurs, thoughts on Chloroquine as a treatment method 27:00 Are US bureaucrats taking the intelligence of US citizens for granted? How liable is Trump? 30:08 David gives his plan to reboot the economy: what now? How does the US avoid a recession/depression? 36:22 Chamath & Jason assess David's plan 43:21 Have the stimulus packages & SMB loans been enough? Will the trickle-down approach work? 49:21 Should the US be allowing companies to declare bankruptcy? How should they decide who gets aid and who does not? 52:02 Chamath explains how corporate debt works through the lens of Ford 56:42 Why is the US not giving a larger % of the stimulus to average Americans? Chances of unrest if quarantine continues? 1:02:17 Trump vs. Biden: who has the edge in 2020 right now? 1:11:24 Was Jack Dorsey's $1B donation the strongest move of 2020 so far?

Jason CalacanishostChamath PalihapitiyahostDavid Sackshost
Apr 11, 20201h 13mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 0:01

    Intro

    1. JC

      All right, everybody. Welcome

  2. 0:01 – 1:20

    Jason & Chamath catch us up on their quarantines

    1. JC

      to episode two of the All-In Podcast, uh, with Jason and Chamath. Some basic ground rules here. If you're not into speculation, you don't like to debate, you don't like to question authority, uh, and you don't like to get a shit ton of inside information, you can actually turn the podcast off right now and go download The Daily from The New York Times or All Things Considered, or some other bullshit. But, uh, we're here to do speculating and talking about inside information and the real deal. With me, as always, my co-host, Chamath Palihapitiya. If you don't know how to pronounce it, Palihapitiya. Uh, Chamath, how are you doing? You holding up okay?

    2. CP

      I am doing fabulously well. We are in week four of our lockdown, sheltering in place here.

    3. JC

      You losing your mind?

    4. CP

      Uh, I'm not, because, uh, I'm fortunate to be in the suburbs. I think if I was cooped up in an, uh, in an apartment in the city, I would feel, uh, a lot worse than I do right now. But there's a lot of fresh air. The weather's finally turned. It's not raining as much, so we get to see the sun a little bit. It makes a big difference.

    5. JC

      Yeah. Can you imagine 15, 20 years ago, holed up in an apartment with three kids who are home from school? Like, these people who are in a city, they must be going insane.

    6. CP

      I mean, there's so much value to visiting New York, but if you're stuck there in a, in a quarantine lockdown, I have, uh, I don't know what I'd do.

    7. JC

      All right. Well, we got a great guest, uh, today. Why don't you introduce our guest,

  3. 1:20 – 4:40

    Chamath intros David Sacks

    1. JC

      Chamath?

    2. CP

      Well, we are really lucky here. This is, uh, a person who I've known now for, I don't know, maybe 15, 20 years. What I would call him is one of my best show ponies. I have ridden this motherfucker up and down. In everything he's done, he has made me so much money. It's like owning the publishing rights to the YouTube back catalog. This is how prolific this guy is, uh-

    3. JC

      It's like owning the Beatles back catalog, right? You're like, Michael Jackson-

    4. CP

      It's like owning the Beatles back log. This is, uh, so-

    5. JC

      You bought the-

    6. CP

      So David Sacks, though... No, all kidding aside, David Sacks is one of the most incredible people that we know, one of our closest friends. Um, big bit of a background on David, he, uh, almost became a lawyer, um, but, uh, dropped out of law school, um, after going to Stanford and, uh, worked, uh, with Peter Thiel at PayPal, and, uh, was a chief operating officer there. Left PayPal, uh, moved to Los Angeles, uh, unsuccessfully, uh, kept his virginity. Found a way to not get laid as a movie producer in Hollywood-

    7. JC

      (laughs)

    8. CP

      ... which seems to be impossible, I know.

    9. JC

      (laughs)

    10. CP

      But he, David found a way of doing it. Um, produced a movie, um, one of the best known, uh, movies of that generation called Thank You For Smoking. Um, then, uh, moved back up here. Started Genie, pivoted, started Yammer. Um, sold that for more than a billion dollars to, uh, Microsoft. Um, and became, during that time, frankly, one of the most unsung heroes, uh, of company founders and, uh, was a prolific investor in some of the most well-known iconic businesses, uh, of this last generation. Airbnb, um, Uber, um, Slack, uh, the list goes on and on. And now is the co-founder, uh, of Craft Ventures, which is essentially, uh, David's early stage venture business where he, um, helps a lot of really great companies, um, get to the next, uh, level. And frankly, the level that he's been playing at for a while. Uh, despite all of that, again, I just see him as, uh, a show pony. Um-

    11. JC

      Yeah. He's a money printing machine.

    12. CP

      ... that's why I love him.

    13. JC

      If you, if you can get in-

    14. CP

      Just-

    15. JC

      ... on that fund, if you can get in on those companies, you're gonna do well. Sacks is an operating machine. Uh, welcome to the program.

    16. CP

      David Sacks?

    17. JC

      David Sacks.

    18. CP

      Well, welcome to the pod.

    19. DS

      Thanks for having me.

    20. JC

      Uh, how are you holding up? Uh, Sacks, just personally, family, everything, companies? Just generally, uh, psychologically, how is this impacting you?

    21. DS

      Um, you know, I think, um, we're, we're, we're all fortunate to be safe and, um, you know, we, we started paying attention to, to, to the virus, I guess, on, in February because of Twitter tech. You know, there were a bunch of people in the tech ecosystem who started tweeting very alarming things in, in February or even going as far back as, like, January 30th. And I didn't know for sure if they were right, but some of them were friends of mine, and so I, we were too get seriously and we started doing work from home, I think on March 1st. And we've all been kind of self-isolated since then. And, um, fortunately everyone has been safe and, um, you know, hold- holding up pretty

  4. 4:40 – 6:58

    David explains what their poker group chat has been like since COVID-19 started, and how Jason, Chamath & himself fall on the optimistic/pessimistic spectrum

    1. DS

      well.

    2. JC

      Saxy Poot, tell, uh, tell everybody on the pod, um, our, uh, group chat and, um, basically what it is, um, what we do on that group chat, and, um, uh, what you think about it.

    3. DS

      Yeah. So I mean, basically, our, our poker group and sort of extended poker group, which is about, um, I don't know, it's probably about 20 players who rotated in and out of our poker game. We have a chat group and, um, we used to just talk about cards and stuff like that (laughs) . But, uh, but very rapidly, it became a, a, a place to share information about the virus and the response and what was gonna happen. And the remarkable thing is that whatever we talk about ends up becoming... Like, it's like everyone else just figures it out about a week or two later, and I think it has helped us stay about a week or two ahead of the curve on this thing.

    4. CP

      Has it, has it generally been mentally reassuring or has it amplified your anxiety talking about it all the time in that chat?

    5. DS

      Um, well, the interesting thing is that we have people in that chat who are very optimistic. We have people who are very pessimistic. We have people in between, and then we have people who swing around quite a bit. And, um, so I think you get, like, all the perspectives. Um, and I think... I guess my view of, of the future is that very hard to try and figure out what's gonna happen. You have to think about it in terms of scenarios. Um, and so-... the, you know, the chat group helps, you know, understand, like, what those scenarios, you know, might look like.

    6. JC

      So where would you describe each of us, then, on the positive, negative, and then swingy? You're, you're in which camp? Are you swingy?

    7. DS

      Um, so, so I think the three basic scenarios are V, U, and, and L. And, um, Jason, I would describe you a- as, as, as a V. Um, I think Chamath is closer to the U, which is the, the most pessimistic. Uh, sorry, the, the L is the most pessimistic, and then the U is sort of somewhere in between. And, um, I, I sort of swing between the U and the L. Um, but, um, but I also understand the case for the V. Uh, and, and, and, and those initials really r- refer to the shape of the recovery to come and how quickly we- we'll come out of this.

  5. 6:58 – 12:22

    How have the past few months defined David's view on the world, and what is his reaction to the US government's response?

    1. DS

    2. CP

      So David, before we drill down into your beliefs on the future, let's talk about the past. Um, what do you think this entire episode has shown us, whether it's from a public health perspective or an economic perspective, but how would you summarize your view of the world as it's been revealed to you in the past two months?

    3. DS

      Um, yeah. I mean, I think that, um, uh, w- what, what it really sh- you know, we live most of our, our lives during, you know, the- these relatively calm periods, and then our lives get redefined by these, you know, apocal-events. Um, and, uh, and, you know, we're not really wired for this, this rate of change. Um, I think it was Lennon who said something like, "There, there's some decades when nothing happens, and there's some weeks where decades happen." And, um, and I think that- that's basically what, what's happening here. And it feels like, I mean, a little bit... The last thing that was like this was, was, was 9/11, where, you know, you woke up that morning, saw the, the Twin Towers coming down on TV, and you realized th- that we were now in a different era. And, um, something like that's happening here as well, just in, in slower motion.

    4. CP

      What do you think, um, the government did right, and what do you think that the government did wrong?

    5. DS

      Well, I mean, um, you know, l- limiting the flights in from, from Wuhan or China was a good initial step. But after that, um, it seemed like the response was very slow, and, um, and- and sort of, um, disbelieving and kind of incredulous. And, and- and we've seen this basically everywhere. The initial response of just about every country, uh, with a few notable exceptions, um, in, in Asia that had previous experience with SARS. But, um, but what we've seen in just about every country is that nobody believes it's gonna happen to them until it happens to them. And then, even in the United States, um, you know, it's, it's, it's, it's like no one believes it's gonna happen in their city until someone on their social network gets, gets the virus and then all of a sudden they take it seriously. And so, there's almost been this, like... It's like this slow-moving train wreck where you see it coming and people are just a little bit too slow to react. And, you know, the problem is, it's all about the doubling time. So if the virus doubles, you know, every two or three days, um, in the absence of any action at all, maybe even doubles every day in a, in a very dense city like New York City, just waiting two or three weeks can make 1,000X difference, um, in, you know, somewhere between, I guess, 10X and 1,000X difference depending on the doubling time, whether if you wait two weeks or three weeks. Um, I saw an article on... There's a bunch of articles now talking about, um, w- why has New York been hit so hard and California h- has been relatively mild. And, um, and- and the articles were saying, you know, California only declared shelter in place one week ahead of New York. "How could it be doing so much better?" And they're looking for all these different causes and explanations. And, you know, even one week makes a huge difference. If in New York... Um, New York's been hit about 12 times harder than California, but if the doubling time is just two days, um, one week is a 12X difference. That's how the exponentia- uh, exponentiality works. And so, like, being a, a week b- uh, you know, or two weeks or three weeks behind the curve is incredibly costly.

    6. JC

      How do you break down, um, local government versus federal government and the action there? And is America's architecture with states' rights and powers a benefit in this case, or, um, is it a negative? 'Cause we did see the blue states take it very seriously, the red states take it less seriously. The red states have a lot more distance between individuals. The blue states tend to be coastal cities, they're more dense. Maybe you could handicap for us the, the spread of the virus with the layer on top of it of local governments and the political climate we're in.

    7. DS

      Yeah. I think, you know, the, the, the decentralized nature of the American system is both a blessing and a curse in this, in this type of situation. The, the curse is that it's been very hard to create a unified national strategy. We're, we're doing lockdowns piecemeal. And, um, and so the, the lockdowns get thwarted as people move around between areas that are not locked down and start new outbreaks. Uh, very hard to control a virus that way. You know, we're also, um, you know, we're, we're also not able to act in, in the, in the authoritarian way that, that we saw China act in Wuhan to control the virus very early on. Um, but the blessing of decentralization is that it's allowed, um, you know, the, the governors of states to react, um, and it's allowed private companies to react, and it's allowed entrepreneurs to react. And you see a lot of people, uh, helping in different ways. And, um...... and, and, and, and that can be, that can make up for, um, having kind of a, a, a more ineffectual centralized response, which isn't likely to, to, to work completely in a country this size anyway.

  6. 12:22 – 19:33

    Did the US health apparatus do its job? How could it improve? Why aren't masks already mandated?

    1. CP

      Do you think that, um, the health apparatus of the United States, um, did its job? And where do you think the areas of opportunity are to improve?

    2. DS

      Well, the, if, if you're talking about the health system, it seems like the, um, the health system has done a great job in reacting to the virus in terms of, um, hospitalizations, uh, you know, hospital, adding hospital beds, adding ICU capacity. Even in New York it looks like, um, I think Cuomo just said today that they've got, you know, ICU capacity. They've got hospital beds. Um, I think the hospital system's done a, a great job rapidly creating more capacity. We haven't seen the situation like in Italy or even the UK where they're literally rationali- uh, rationing ventilators and making horrible triage decisions about who's gonna get a ventilator and who's not, you know. Um, we haven't seen those types of horrors in, in the US. But, um, but if by health system we mean the FDA, the CDC, um, the WHO, which isn't part of the US system, but we do rely on them to some extent, um, you've just seen, I think, you know, amazing, um, r- r- really malpractice or negligence. If they're a pharma company, I think they'd be sued. You have the, you know, you have on the CDC website things that, I haven't checked it today, but as of a few days ago are just blatantly not true. I mean, saying that you only needed a mask if you were actually taking care of a person with, uh, with, with COVID-19. That, um, that standing, say, a three-foot distance was sufficient, um, for, f- that, that was sort of an acceptable amount of social distancing even if the other person is coughing or sneezing, and that's not true. Um, they're just saying things that, that weren't true. And then, you know, on, on the, um, you know, the, the, the CDC and the surgeon general until basically the last few days were telling us that, uh, masks didn't work, were ineffective, didn't ... and then now they've, they've, they've flipped to recommending them, um, but they're still not required. And, um, I just wrote a blog today that I published about a half an hour ago that, um-

    3. JC

      I thought the best part of that blog post, by the way, it's up on Medium, and, and Sax has tweeted it and I retweeted it, uh, David, is what you said at the end, which is, "We're taking the most draconian measure, quarantining people," which we use this softer term shelter in place, but it's a quarantine. Call it what it is. You're not allowed to leave your house except under rare circumstances. Um, but we won't do the basic thing of wearing the mask. It makes no sense. And Chamath, I think you had a really interesting question early on here, which I think we should all circle back on one more time, which is, what, what does this reveal, right? Like in this kind of a crisis, and I love the statement of, uh, Sax where, you know, a d- some decades nothing happens, and then a week you have d- a decade happen. The thing that's, that I am, I think is the big takeaway for me is handicapping who you can trust and what people's agendas are and how they behave in a crisis because there are a group of people building models. And what is the motivation of somebody who builds a model? We think about we all get pitched as investors or when we work inside of companies, we build models, and we know the models mean nothing. They're made by humans. And what's the motivation of somebody building a model in today's climate that then people adopt that model and there's life or death? What would you handicap? Would you go conservative? Would you go aggressive? Would you lean into people dying in the case of supporting the economy? Uh, and so the mo- there's the model makers. There's the government, local and federal. You have the media who are trying to get clicks in some cases. You have capitalists who are trying to, you know, protect their book and their bets. H- how do we all look at and think about people's agendas and, like, the CDC having an agenda, the local government and the model makers having agenda? Chamath, maybe you could take that one.

    4. CP

      Yeah. I, um, I think that the masks issue is actually the most instructive thing, uh, in this whole debacle. Um, and the reason is that there was pretty obvious data very early on that it was, um, something that had unknown but pretty useful upside and absolutely zero deleterious downside, right? So if you were thinking about risk management and I gave you s- some options. Option one is do nothing. Option two is here's some drugs that you can take prophylactically, and I don't really know the, either the efficacy or the long-term damage to a broad-based population of people taking them. And option three was a piece of cloth over your nose and mouth.

    5. JC

      Yeah.

    6. CP

      And (laughs) e-

    7. JC

      For 10 cents.

    8. CP

      ... and apparently, at a minimum, it prevents other people from smelling your bad breath. But at a maximum, it prevents projectiles of, of disease-laden spit getting into your orifice-

    9. JC

      Death, death vapor.

    10. CP

      ... causing you to die.

    11. JC

      Yes.

    12. CP

      And, and we couldn't agree that that was a good reason.

    13. JC

      Why? Why? What, what-

    14. CP

      You know, how-

    15. JC

      ... is this... Was the agenda here because they didn't want people buying up the masks-

    16. CP

      No, no, no.

    17. JC

      ... and not going to healthcare workers?

    18. CP

      No, because it was never about-

    19. JC

      Why couldn't we agree on something this simple?

    20. CP

      No. Because it was never about the N95 masks. You could have worn a cloth mask. It, a tea cloth could have covered it up and given you 70% efficacy. This has everything to do with incentives and everything to do with your other question as well, which is, like, you know, how, why do modelers behave the way that they do? Um-... all of this is about being taken seriously. And so to be taken seriously, you have to understand the incentives in the game that you're playing. So for a modeler and a forecaster, the incentive is all around being conservative because that's how you're taken seriously. There's nobody that has any upside in showing a model that shows 10,000 people dying. All of the attention and the, the gravity with which you're taken and the attention that you get is when you first put out a model that shows that two million people could die, which is what Imperial College did. And then eventually, you walk it back and you walk it back, and after the actuals exceed the forecast, then the data converges on what actually happens and you see that these models were woefully inaccurate. It's the same with why the CDC or the WHO are just so completely incompetent, because the incentives in those organizations are essentially to play their game, and that game is not one of public health, but it's one of politics.

    21. JC

      Right.

    22. CP

      And so you have these people fighting each other over political territory and the right to basically make decisions versus the actual substance and the validity of the decision.

    23. JC

      David-

    24. CP

      And-

    25. JC

      ... does that, does that correlate with your thinking, and then superimpose the media on top of that?

  7. 19:33 – 27:00

    Culture clash between scientific experts & entrepreneurs, thoughts on Chloroquine as a treatment method

    1. DS

      Yeah. I mean, so I think there, there's a couple of things going on. One is that, um, that there is a huge culture clash going on between the people who need conclusive scientific proof before they're willing to recommend any course of action, um, and then between other people who are willing to take a more experimental approach to try things to iterate, uh, the way that we do in startup land, um, when confronted with kind of ex- um, you know, company existential issues. Um, and, and the latter approach is smart when, you know, there's a lot of upside in trying something and not much downside, you know? And, and the, and, and, and the, the, the other approach of this sort of, this scientific, this pseudoscientific-sounding approach where you're constantly demanding conclusive evidence, it's actually people pretending to be smart, you know? It's people who wanna sound smart. But it's actually a pretty dumb approach. And so we've seen this, like, culture clash playing out over and over again, um, you know, and, um-

    2. JC

      So experts ... or re- repeat it back to you, David. Experts are afraid to do something experimental with low downside because they have reputations and they wanna sound smart, whereas entrepreneurs, uh, or maybe capitalists or other problem-solvers or perhaps even gamblers are gonna say, "There's no downside here. What's the downside to putting a mask on? Nothing. Let's try it." The same thing with chloroquine and the Z-Pak. Very early on, people were saying, like Elon and other folks in our circle, "Why not just do it?"

    3. CP

      Well, hold on a second, hold on a second. Chloroquine, let's not put that in the same category.

    4. JC

      Okay, why?

    5. CP

      This is the point. Because it's a drug, Jason.

    6. JC

      Yes.

    7. CP

      It's a drug for malaria.

    8. JC

      Okay, but you have-

    9. CP

      You have-

    10. JC

      ... on the spectrum-

    11. CP

      You have zero evidence, so n- no, no, no, Jason, hold on a second.

    12. JC

      ... of taking it if you were it- sick already.

    13. CP

      No. M- we still don't know.

    14. JC

      Right.

    15. CP

      Let's be clear, okay? So masks is a wholly different thing. This is why I said it that way.

    16. JC

      Yeah.

    17. CP

      You sh- you, if ... The, the minute you start to add drugs, you come off as a armchair epidemiologist, and anybody reasonably smart can poke holes in your theory and you sound like a fucking moron. You cannot sound like a moron by telling people to wear a cloth over their nose and their mouth.

    18. JC

      Okay. But the next step, if you were in the hospital and you'd been diagnosed and they said, "Hey," the doctor says, "you might wanna try this," there were people who were saying, "Don't even try it." And there was a direct correlation, when Trump said he was behind it, it seemed like the media and everybody were like, "This is the worst idea ever."

    19. CP

      No, no, no. But, but, but this is your point, which is that the incentives of that game are to politicize things versus think about what's in the best interest and the public health interests of either the United States or the world. And so here I do agree-

    20. JC

      But aren't we in agreement to try it if you were, if you were in the ICU and they said, "Hey, you wanna try this?" You wouldn't try it?

    21. CP

      No, but this is the problem, is like the posture of the American in- uh, political infrastructure is broken. And moments like this shine a light on how broken it is, because as David said, all of the testing and iteration, all of those things are must-haves in peacetime. They are nice-to-haves in wartime.

    22. JC

      Right.

    23. CP

      You don't have time to walk around and test fire a gun and make sure this works and that works. The enemy is in front of you. You shoot and you fire and you aim later.

    24. JC

      Yeah.

    25. CP

      And in that posture, we have to have a set of rules that contemplate giving people at the ground floor, on the border of, you know, where their life is at risk, the right to make a decision, as well-informed as it can be, about what they can try to do to save their life. And doctors need to be equally empowered. And, uh, you know, we've effectively done that, but we just did it in fits and starts. And in that, there is all of this noise that delays the right decision, which is not that hydroxychloroquine is good or bad, but it's that, here's all the published data into the hands of the doctor who can actually read and understand it so that he or she and the patient can make a decision together.

    26. JC

      Yeah. Agreed. Sax, uh, what are your thoughts on chloroquine and the Z-Pak and, and that whole sort of unraveling of, this is the miracle, it's not the miracle, it's worth looking at, and how that debate occurred, let's say, on the Twitter, um, and then also in our stream when we were talking?

    27. DS

      Well, well, Trump was not the first to, um, embrace the potential of hydroxychloroquine. Um, in fact, we were talking about it in our chat group before, you know, it became national news. Of course, once he did embrace it, it became a political football, and, um, a lot of people wanted to prove him wrong. And so now it's hard to have a conversation about it without it becoming political. But...... the, you know, the argument for hydroxychloroquine really started with some research papers that showed that it worked in vitro, basically in test tubes, against the virus. Um, and it worked against, uh, SARS, um, you know, which is a related sort of category of virus. Um, I'm not, I'm not an expert or anything. This is just, sort of, you know, me telling-

    28. JC

      Okay.

    29. DS

      ... you what, what i, what I know as a consumer of information. Um, and so it was not, um, crazy to think this is something that should be tried in the context of COVID-19. Um, now, we don't know if it's gonna work or not. I saw, um, an interesting presentation by UCSF and their working theory on it is that, um, is that hydroxychloroquine plus Z-Pak might have some impact in the first week, uh, of the virus when, uh, before peak viral replication takes place, and this might, um, help interfere with th- the virus replicating. Once you're in respiratory dispress- distress though, and it's in your lungs, you have to, you're into a different phase of this and, and, um, they don't believe that... they h- they, they think you need to look at other things. So, um, so it sounded like this was a potentially valid treatment in week one, less effect in week two and, you know, by week three when you're in severe ARDS, you know, it's, you gotta find other things. So, um, you know, in terms of, like, what the right policy is, um, you know, this, you know, I, I'd be in favor of the right to try. I mean, ultimately we should let patients and doctors make this decision together and, um, and so, you know, I think the FDA did the right thing giving emergency, uh, trial, um, authorization to doctors to be able to, uh, try this with their, their patients. And, and what I think is happening is, is that there's your sort of rapid decentralized information sharing happening among doctors and hospitals and, you know, I think they're, they're getting to the right answer here.

    30. JC

      Okay. Do we, do we feel comfortable moving on to financial implications of this or are there things about the modeling?

  8. 27:00 – 30:08

    Are US bureaucrats taking the intelligence of US citizens for granted? How liable is Trump?

    1. CP

      And-

    2. DS

      There's such an element of these authorities trying to manage us, you know. I could, you know... I really hate that. That, um... I mean, I do think that th- they thought about, um, will we create a run on masks? Will... You know, th- that, that, that they don't want to tell us the truth because they're afraid of some of the consequences of telling us the truth, and, you know, I hate that feeling of being lied to by public officials because they're trying to manage us.

    3. JC

      (laughs)

    4. CP

      I'm willing to be infantiled by people that are smarter than me.

    5. DS

      (laughs)

    6. JC

      Yeah, so can you give us a list of the four people you think are smarter than you? Go ahead, Chamath. Give us who are those four people. (laughs)

    7. CP

      I am, I am not willing to be infantiled by nameless bureaucracies. And I think that Americans deserve to not be infantiled. I mean, for the amount of money that we pay and the amount in taxes, and the amount of power that we give folks, the one thing that I'm realizing through this whole thing is like, you know, the... It's, it is true in some respect that the countries that had some level of authoritarian management did well, but it's also true that the countries that had robust civil services filled with people who are at the top of their class also did well. Singapore, South Korea, where it is a stature, where it's a point of pride to work for the government, where it's some of the best paying jobs-

    8. JC

      Japan.

    9. CP

      ... Japan. And, and so, you know, one of the things that, that I realize is, like, career bureaucrats, um, really do infantile Americans in a way that's really unproductive and, and unhealthy. I mean, you know, doesn't it surprise you and kind of like perturb you that the ex-head of the FDA is way more prominent and out front with his point of view than the current head of the FDA? I mean, what the hell is going on?

    10. JC

      I, I think what we know is going on is, I mean, Trump was elected and he, he, he dismantled some of this and the system was broken when he inherited it.

    11. CP

      I, I, I think... No, I think that that's unfair. And, you know, I'm, I'm, I'm not, I'm not a big Trump supporter, but I think it's unfair to pin it on him. The reality is maybe he defunded or underfunded a bunch of things, but the hollowing out of our institutions have been happening for 40 years, and it ha- started with Reagan, to be clear, because we tilted the scales towards free market trickle-down economics where government was viewed as a stop for really smart people to inject themselves into industry at higher levels, or it was a place that s- you know, capable people would never go because capitalism, the way that it was structured, was set up in such an aggressive, tilted manner for those that were capable. And, uh, unfortunately, it hollowed out the government, uh, from people that were, uh, really strong of character in a broadly speaking kind of way. And so what happens is that then bureaucracies form, the incentives change, um, and you get what you've gotten right now, which is again, uh, it is a, uh... It- it is a point of argument on something as simple and frankly idiotic as a mask.

  9. 30:08 – 36:22

    David gives his plan to reboot the economy: what now? How does the US avoid a recession/depression?

    1. CP

    2. JC

      Okay. Let's, uh, move on to talking about the economy and...... uh, David, you've been quite a heretic, uh, on Twitter because you decided to engage in the one conversation you're not allowed to have, which is talking about people's livelihoods as opposed to their lives. You can only keep one thought in your mind a- as far as the kind of woke far left is concerned and the Twitter mobs. You can only talk about people and life and death. You can't talk about their livelihoods. But you've been talking and starting a dialogue on how you would structure, uh, teams in a startup for how do we deal with a crisis versus how do we go back to work? So explain how you would do this if this was a startup company, if you were doing it on an entrepreneurial level, um, and what you think the road looks like. Let's start with San Francisco Bay area and then we'll extrapolate to the most acute area in America, New York.

    3. DS

      Yeah. Well, the- the- the big question that everyone's gonna be asking by the end of April is, what now? Um, because I do think you're already seeing this in the New York data that quarantines work. Um, but that shouldn't be a total surprise to us. Historically, quarantines have always worked. I mean, quarantines were the way that people dealt with plagues when they didn't have any technology. Um, it's the problem is just they're incredibly costly and, um, if the quarantine goes on for months as our only way of dealing with the virus, then, you know, we could be looking at a depression. So the, so the question really is, you know, once we've arrested the exponentiality of the virus, and I- I, you know, I think we have to do that first. Um, but once we've arrested the exponentiality, the big question is gonna be, well, now how do we get out of this? And, um, what I worry about is that the- the daily update mentality, you know, I think it's great that our leaders are giving us these daily updates showing that they, you know, this- they're showing a bias for action, which I think is good. But I worry that we're not gonna be ready, that this precious time that we're buying with quarantine is not gonna lead to a better plan in May because no one's really working on that plan. They're just working on sort of the- the triage, the- the immediate response, the making sure that- that, you know, hospitals around the country have the ventilators and beds they need and we've put in the orders-

    4. JC

      Why is it, David, that people can't keep these two parallel processes in their mind at once? You've been attacked viciously on Twitter. The media attacks anybody who brings this up as like only caring about capitalism when, in fact, um, you need to do both plans. You need to figure out how people get back to their livelihoods and we avoid a depression, which would kill more people, uh, ultimately, right? I mean, I think there's consensus about that, whether it's depression or suicide, et cetera. Uh, or people not being able to feed themselves or, um, you know, have nutritious food and health care. So why can't people put these two things in their mind at once? Um, and then let's talk about the actual plan. If you were planning and you were the mayor of San Francisco or you were in Trump's cabinet and they said, "Okay, David, you make the plan for the Bay Area to go back to work." Take us through your one, two, three, and then we'll throw it to Chamath.

    5. DS

      What- what I would do is, um, like, I would do what I would do in a company for a product release, is I'd have, um, you know, in a company, I'd have a product manager for the 1.0 release and I've a different product manager for the 2.0 release because it's very hard for, you know, somebody to be all in on two different releases which have two different schedules. So, um, you know, I think the team that we have right now that's basically concerned with the immediate response, the- the triage, they should keep doing what they're doing. Make sure that, you know, the country is reacting the right way, that it has all the supplies they need, that, you know, they're berating 3M into giving us more PPE or whatever it is. But I think that there should be a separate team, kind of a- a, um, you know, a- a czar for the 2.0 response which should be focused on how do we create a new system that gets us out of lockdown but doesn't, um, re-trigger the exponentiality of the virus. And I think that-

    6. JC

      Quick-

    7. DS

      ... that person and that team should be ready to slide the new system into place in May. I don't know if it's beginning of May, end of May, or whatever, but sometime in May, they should be ready to slide that new system into place so that this precious time we're buying isn't wasted.

    8. JC

      Give us your one, two, three. One is masks obviously, I would think.

    9. DS

      Masks are a total no-brainer.

    10. JC

      So that's number one. Give us your two, three, four if you- if you wanna riff here a little bit.

    11. DS

      Yeah, I mean, the other elements of the plan that people keep talking about, um, it's- it's, uh, you know, rapid ubiquitous testing. I mean, you ha- and you have to have same day results. You can't... This- this business of it taking two, three, four days in the lab. Uh, the problem is if someone is infected, they could be passing it on during that time. You don't- you don't- you don't isolate them in time. So we have to have massive ubiquitous same day testing along with contact tracing so that when you do find out that somebody's got it, you can, uh, not... Isolate not just them but all of their contacts. Um, that's the system that seems to have worked in South Korea. Um, and, um, I mean, tho- those seem to be the- the- the pillars.

    12. JC

      And- and is quarantining the high risk, um, during this first phase of the rollout with testing, uh, social distancing, and masks, um, that's- that seems to be the no-brainer. I would add fourth bullet point which is if you're obese, diabetic, asthma, or some combination of those and over 60, and/or over 60, you gotta stay home now and you cannot be in touch with anybody who's out and about and part of that first wave to go back to society.

    13. DS

      Right. We- we know that certain segments of the population are at much higher risk than- than others and so part of having a more fine-tuned response to the virus other than just shutting everything down would say, "Well, let the people who are at very, very low risk go back out still wearing masks and having the right protocols and hygiene and all that, all that stuff." But, um-... but, but you keep the high-risk population, um, isolated rather than shutting

  10. 36:22 – 43:21

    Chamath & Jason assess David's plan

    1. DS

      down the entire economy.

    2. JC

      All right. Chamath, if you're on the board of directors and David was the czar of the May plan to go back, um, how would you... uh, what questions would you have for him, and how critical can you be of his plan? Uh, let's make this as if we were actually in charge. Chamath, savage David's plan.

    3. CP

      Well, I, I, I, I probably would push David to consider, um, a more aggressive, um, approach here, and, um, this is something that I've talked about before. Jason, you and I have talked about this on the podcast before, but, um, we need a, a biological Patriot Act. Um, I know that it's unpalatable for people on the left for certain reasons and people on the right for other reasons, but it just doesn't matter w- what they think. Um, it was reported today, by the way, that the CDC and the taskforce at the White House is considering immunity cards, um, but, uh, a much more beefed-up version of them. They, these, these need to be, um, cards that have, um, you know, uh, some kind of chip inside them that are non-hackable and, uh, issued by the government. Um, but, uh, you know, my... what I would push David to think about if he was the czar of getting back to work is the following, which is, um, I agree with the broad-based testing. Um, I think that you need to have some kind of, you know, wristband that allows you to, um, be inside of certain green zones in s- in, in every single city or town in the country that allow you to, uh, you know, s- some way be back to normal. Um, but there also needs to be red zones where you cannot. Um, we need to have a very, very quick way of, uh, restarting a quarantine if there are hotspots that develop, but all of it needs to be supported by broad-based testing and a biological Patriot Act. We do need to have immunity cards, and the simple basic reason is that it is the only way that one can prioritize the economic salvation of the US economy. Because I think once we have paid the cost from the public health perspective, which we are doing at the end of this quarantine in flattening the curve or crushing the curve, our immediate focus has to be in resuscitating the GDP of this country. Um, because otherwise, the number of deaths and the num- and the amount of pain that i- that is caused by economic destruction will far outnumber the number of people that die from this, which is tragic already. And, uh, the only way that I can see for us to do that in a scalable way is with, uh, an immunity card, uh, uh, a biological Patriot Act. So, I would be pushing David to think about that and rip the Band-Aid off and get that done.

    4. JC

      And David, I would also push you on, um, thinking about, um, quarantining not just at home, but maybe by region and hot zone, so if we know the New York corridor or the Northeast corridor is severely infected, nobody in or out of that corridor without a visa, without... and I know this is a very touchy issue well in terms of civil liberties, but until we're through this, I don't see why people from New York need to go to Florida without maybe a rare exception or, um, you know, something to that effect, right? So, if we know we got California out of it, or if SoCal is still in the thick of it but NorCal isn't, maybe we have some level of testing required to get on a flight to come to San Francisco or to go, to leave New York. So, those are two, uh, two punch-ups. How would you look at those, David, as the new czar of getting back to work?

    5. DS

      (laughs) I think it's all on the table. I mean, I like the green zone/red zone idea. I like, um, I like using immunity information. Um, we've been talking in our chat group for, I think, a month about these blood serology tests. I tweeted. I took one of those tests, um, weeks ago, I think, like, three weeks ago before the FDA had even approved it, and I, I tweeted about it. Um, so yeah, I think all that... I think the, the immunity cards, I think we should use all that information. Um, I mean, it would all be on the table, for sure. Um, and I... but, but I think most of all, these ideas need to be tied together into a coherent system, and I'm worried that our approach to date has been so ad hoc that we're not gonna have a coherent system ready to go, uh, as a replacement to shutdowns, uh, in May when we need it.

    6. JC

      Is part of this... you talked before about how you didn't like to be managed. I think we all agree we're being managed and massaged, because they really do not want to even talk to us about going back to work in May or what happens, 'cause they're afraid that we're gonna jump the gun and we're all gonna just go to Crissy Field or, you know, whatever park or Central Park and, uh, just throw a giant party, but people are not stupid. There's a, there is a certain self-preservation here that should be inherent in all these discussions, which is, you know, any reasonable person watching the death toll in New York does not wanna leave their house. Um, and so, why can't... w- well, how much of the lack of discussion about this issue do you think, David, is because people are afraid to treat people like adults 'cause they think they're gonna just go out to Crissy Field or, you know, Dolores Park?

    7. DS

      No. I mean, I, I think you're right that there was this long period of time where, um, the authorities were just trying to get everyone to buy into the idea (laughs) that the virus was dangerous and they needed to shelter in place, and, um, and they didn't want to, to hear any views that, um, that, that appeared to be contradicting. I don't think they were contradicting it. Um, you know, I remember when the Imperial College study ca- model came out and they said that 2.2 million people would die in the US, and I tweeted that I thought that number was insane, it was fearmongering, um, and I think, you know, that's turned out to be the case. Um, but, you know, people responded, "Well, well, good. I mean, even if it is fearmongering, we need to make people afraid because otherwise they won't...... do the right things. Um, I guess that's true in a situation in which we're relying on everyone's voluntary compliance to engage in a quarantine or to wear a mask. And I guess part of the response here is to figure out what- what- what action items should not be voluntary, that we just need to do, uh, in order to get past this.

    8. JC

      Chamath, your thoughts?

    9. CP

      Um, I think that, um, getting back to work is going to be, um, much, much more difficult than people think. I think that, um, in the absence of a vaccine, which, um, looks like at best 18 to 24 months from now, we will never get to 100% of where we were before, or at least the potential to be at 100%. Um, and so I just think that over the next two years, we're in for a tremendous amount of difficulty. And this is sort of where, you know, I'd like to shift the conversation. I think that,

  11. 43:21 – 49:21

    Have the stimulus packages & SMB loans been enough? Will the trickle-down approach work?

    1. CP

      you know, we've now poured, between the United States government and the Fed, almost $10 trillion. Um, we smeared it, um, into the economy, and only three cents of every dollar has gone into people's pockets. And I think we're hoping that the other 97 cents somehow trickles down into their pockets in some way, shape, or form. Now, when you look at that 97 cents, half of it was, you know, things like propping up the commercial paper market, propping up the repo market. Um, but it's also been things like propping up investment grade debt, propping up high yield debt. Um, and I have a real issue with this because I think that if we're gonna take two years to get back to normal... And I really do think it's two years, because Jason, a lot of the fears that you expressed people will have as lingering doubts and will prevent them from being at 100%, which means businesses will not be at 100% until you can get an injection and know that you're protected. Um, we're doing an enormous amount of damage because we're taking trillions of dollars and flooding it into the economy in a way that's just not going to be effective, and I don't think that we're taking enough time to really think through these things. So, you know, on the one hand, while I appreciate the-

    2. JC

      Velocity?

    3. CP

      ... or not the velocity, the intention. You know, like I think Jerome Powell's commentary, um, I applaud, which is like, you know, he's saying all the right things, which is, "We will do everything possible." Um, but the lending program to companies has been haphazard and difficult.

    4. JC

      But it did get started in three weeks, and some people have gotten money in week four of this. I mean, it's pretty incredible.

    5. CP

      No. You know, the- the- the numbers that I've read is that, you know, on average, the loans are turning out to be sort of like, you know, in the tens of thousands. And on top of that, you know, David and I talked about this in the group chat, but the math makes it so that you're better off furloughing or letting people go than you are taking PPP, which means that a lot of this money, um, may never get taken. Um, and so, you know... But again, all of that is still a small rounding error. We're talking about less than 10 cents on the dollar. 90 cents of the dollar have gone into areas that will not really touch, um, an average American citizen, and, um, I think that's just fundamentally wrong because the trickle-down theory of all of this, you know, was started 40 years ago, and w- we can see now that it doesn't work.

    6. JC

      David, any thoughts on the stimulus?

    7. DS

      Well, I think, I think what's happened is that we have a 30% hole in our economy right now. You've got, you know, like a 15% unemployment rate going to g- going to 25 or 30 maybe, as- as high as that, we don't know yet. Uh, you've got a, you know, we think that GDP is gonna contract in- in the next quarter by a quarter to a third, and so you've got this giant hole in the economy. And what the- the- the- the Fed and Treasury are trying to do is plug that hole, um, for a period of time until they- we can get through this- this- this health crisis. And, um, and if the crisis only lasts a few months, maybe they can hold it all together, but I- I do worry that if it lasts longer, it- the- it's gonna slip out of their hands, and, um, and the result is gonna be a cascade of- of defaults and bankruptcies and, uh, and- and- and effectively a great unraveling of our economy.

    8. CP

      Yeah, I think that, I think that though in fairness, like, this is where I think bankruptcy, it's almost viewed as a four-letter word, but it's not. And in many ways, the bankruptcy process could actually be the saving grace of American business in this moment. And the reason I say that is that it allows, in a bankruptcy, these companies to discharge a lot of the debt, and we could set up a mechanism where these bankruptcies could be done in a way where, again, similar to taking PPP, you don't let people go, you know, a percentage of the- of the cap table must go to the pensions if they have them, a certain percentage of the cap table must go to employees, um, and then the remaining percentage goes to the secured bond holders. And so the existing equity holders and the unsecured bond holders would effectively, um, you know, not be made whole, but in that all the employees would be. And if you combine that with, uh, a UBI program where you put... Look, there, in- in the United States economy, only $8 trillion is wages. So, you know, we could do so much. Um, if we had given every United States citizen their absolute salary f- of 2019 right now, we'd still have two trillion left to bail out companies.

    9. JC

      And everybody could take a year and get paid, like literally have a year sabbatical and be paid.

    10. CP

      Well, I think what it really does is it guarantees the chances or it maximizes, sorry, the chances of a consumer-led recovery. Like, the United States has never been an economic system that's been vibrant because of government spending or other things. We've always been vibrant because we've been consumer-led. It's consumer consumption.... and it's customers of companies buying products that they need or want that drive the economy forward. And if you think about our largest customer base, they are the US population. And by guaranteeing their revenue, so to speak, you actually allow them to then spend once they get out of quarantine, and you'll see them spend even in fits and starts. In this way, you know, you could spend $500 billion buying a bunch of junk debt. I really don't see, as a reasonably, you know, savvy participant in the markets, how it actually helps anything. Um, I think all it does is it saddles you and me and all of our listeners with a bunch of toxic junk debt that eventually has to get sold by the Fed, as David said, in the grand unraveling-

  12. 49:21 – 52:02

    Should the US be allowing companies to declare bankruptcy? How should they decide who gets aid and who does not?

    1. CP

    2. JC

      And it would be more healthy-

    3. CP

      ... back into the market.

    4. JC

      Would- wouldn't it be more healthy, David, um, to allow a certain percentage of these companies, the weaker ones, to fail so that the stronger ones could then pick up those employees and there would be some stability? And I'm curious if you think that we're gonna be living in a world where, and people have speculated about this, maybe some, the individual consumer changes their perspective, and maybe people come out of this crisis with a different world view. I don't necessarily subscribe to this, but Chamath, you do. We've had this conversation, and so I'm curious, David, if you think the American consumer will forever change and maybe they upgrade their phone half as much, they, you know, spend less, and- and they basically live a more modest rural lifestyle, and people maybe stay out in Tahoe or Colorado or wherever they went during this crisis. What are your thoughts?

    5. DS

      Well, you're really talking about Depression-era values, and, um, the- the- the problem is if we acquire those values via depression, that- that would be a pretty, uh, bad outcome here. So, um, but yes, that could happen. Um, you know, I think where I agree with Chamath is that I think that, um, even though the- the federal government, the Fed, the Treasury have a tremendous amount of firepower, in a situation like this, it may not be inexhaustible. And we have to kind of pick and choose and prioritize who's gonna get, um, aid and- and who's gonna get bailouts. And right now, it feels a little bit willy-nilly. Um, you know, and it feels like it- it- it ... under those circumstances, the bailouts default to the people who are politically connected and powerful, um, as opposed to the workers, the pension funds, uh, you know, the Main Street small business owner who's worked their whole life on a business and now all of a sudden, uh, is- is under water. Um, and I think, you know, it's- it's- it's gonna be very hard to get the- the- the s- the aid to the right people.

    6. CP

      Look, um, in the last four weeks, in the last four weeks. Oh, sorry, in the last week. This is an incredible stat. I- I apologize. In the last week, the amount of distressed debt in the US has quadrupled in one week to a trillion dollars.

    7. DS

      Right.

    8. CP

      So as an example, to David's point, um, that's much more visible to Jay Powell, um, or to Steve Mnuchin, um, in the Fed and at the Treasury than, um, than it is that, you know, uh, thousands and thousands of nameless anonymous small business owners.

    9. JC

      Who owns that debt?

    10. CP

      This is why-

    11. JC

      Can you give an example of what that debt would be for the listeners? When you say distressed debt-

    12. CP

      Sure. You know,

  13. 52:02 – 56:42

    Chamath explains how corporate debt works through the lens of Ford

    1. CP

      I mean, I mean, so, you know, I mean, a- a- a fallen angel today is Ford. So we- we're not depa- we're not gonna pick on Ford, but we're just gonna point to it as a well-known company. So this is a car manufacturer. Um, they employ hundreds and hundreds of thousands of people, um, in very important, uh, political states, um, you know, um, di- Michigan, uh, Ohio, I think, uh, Tennessee probably, um, but Ohio and Michigan obviously critical states. Um, and they, you know, issue debt, uh, into the market to fund, you know, building factories or buying equipment. Who buys that debt? Um, pension funds buy the debt. Um, family offices buy the debt. Um, hedge funds buy the debt. Um, now those guys were giving out a coupon and, uh, they were paying, let's just say, 4 or 5 or 6% a year on this interest. But now, because of all this economic uncertainty, people think that their ability to pay that back has gone way down. And so now, they have to issue debt, um, at much higher interest rates, and the existing debt, um, has a much lower credit quality. It's effectively like you having a credit card and, you know, American Express calling you and saying, "Jason, I think the odds of you paying your credit card balance have gone way down, so I'm increasing your interest rate to 24% from 17%."

    2. JC

      Yeah, and then I get another credit card to pay it off.

    3. CP

      And- and so essentially what's happened is the Federal Reserve has decided to become that next credit card issuer. Now-

    4. JC

      What could go wrong?

    5. CP

      ... instead of doing it for you, they're doing it for companies, but not for you. And the question is, is that okay? Well, at some level, companies like Ford should be saved because I think these are iconic businesses that employ hundreds of thousands of people, and they are critical linchpins in the economy, right? Because they have a massive supply chain network and, you know, they're really important for many other things, um, beyond just the economics that they themselves represent. But there are better ways to help Ford. You could lend Ford as much money as they needed to meet their short-term obligations similarly to the way that the Federal Reserve would allow a bank to borrow from the, from their window, and I think that that's a very reasonable approach. The question is really when the Fed then basically acts as a buyer of last resort and obfuscates the price of these bonds, and essentially is saying, "The American taxpayer will own these bonds for the foreseeable future." If you think that at some point those bonds will-... that you bought for, you know, 90 cents on the dollar are worth 90 cents on the dollar, then everything is okay. But if there's a chance that 90 cents goes to 70 cents, the people that really eat that cost are us in the short term and our children in the medium and long term.

    6. JC

      I have a silly question. It's obviously not my wheelhouse, uh, corporate debt like this. Why wouldn't there be a clause that if they didn't pay back that 90 cents on the dollar that the American government bought it for, it converts into equity in the company?

    7. CP

      It's a great question because w- the Federal Reserve has chosen to go and essentially the equivalent of open an E*TRADE account and step into the markets by themselves and just buy. So they're buying bonds and they're buying, um, individual bonds, and they're buying indices that control or that, that have exposure to certain bonds. What they are not doing is going directly to these companies and negotiating, um, essentially saying, "I will give you $4 or $5 billion and what I want you to do is retire that old debt and replace it with this new instrument, and here are the terms of this new instrument." The United States taxpayer gets, you know, 3% or 4% warrant coverage of the company.

    8. JC

      Yum, yum.

    9. CP

      Um, you know, you must make sure that the pension holders are made whole.

    10. JC

      It's a no-brainer. Why wouldn't we have those clauses? It's like basic blocking and tackling that, you know, seed funds have. David Sacks, what d- why is this not like a no-brainer?

    11. DS

      Well, I mean, I think we've got to get a good deal for taxpayers. I mean, Chamath has said it, I've heard Mark Cuban say it pretty eloquently. I even heard Trump say that we have to get a good deal for taxpayers. I just think that they're in such an emergency, they're not really taking the time to do that. They're, you know, they're-

    12. JC

      Yeah.

    13. DS

      ... they're t- they're trying to do things they can do immediately.

    14. JC

      Yeah. The, the forgivableness of these, of this money to me is the thing I don't understand. Why is any of it forgivable? Why isn't any, all of it just, you know, a 10-year loan or 20-year-long loan that converts into equity over some

  14. 56:42 – 1:02:17

    Why is the US not giving a larger % of the stimulus to average Americans? Chances of unrest if quarantine continues?

    1. JC

      tranches?

    2. CP

      But Jason, this is why if you're, if you're going to haphazardly fire trillions of dollars out of a bazooka, why not give more than three cents on the dollar to average Americans? Why not put it into the pockets of every single bank account? You know, you know who knows, uh, how much everybody made? The IRS does. And you know, the IRS has a mailing address for everybody, and the IRS either gets a check or mails a check to every single, uh, taxpayer in the United States, which also protects-

    3. JC

      And they also have direct deposit for half of the people.

    4. CP

      And so, you know, it, th- there's nothing stopping us from saying, "Well, you know what? Why don't we do 10%, 10 cents of every dollar? Why don't we do 15 cents of every dollar to Americans?" I really think this is the way that you, uh, limit the amount of waste that's going to happen. So the, the intention isn't wrong, and we shouldn't castigate people for wanting to put money in the system, as David said, to plug the hole. But we can't be so haphazard as to not think about the moral hazards we're creating and try to fix them in real time. And so this 10 trillion has already gone out the door, but if the next trillion or two don't touch Americans, I think it's going to create an enormous amount of damage. We've only given people a few weeks of, of a lifeline, and they need more. And you, you can't tell companies that they can have effectively a limitless lifeline, uh, but not the individuals, because I do think at some point, companies will find a way to get out of these loans and/or break the covenants with not much repercussion.

    5. JC

      Okay, I want to wrap with two sort of not doomsday scenarios, but, uh, I wanna touch on politics, and I also want to know in the chance that this quarantine goes on for May and June, in other words, San Francisco says, "You know what? We're gonna keep going." And th- we're gonna... And New York says, "We're keeping going." And we're talking about not just April being in quarantine, but May and/or June, and we're looking at June 1st or July 1st. What are the chances, David, that people say, "You know what? I am a free person. I wanna take my... Make... Take my life into my own hands. I wanna make my own decision. I'm going out. I'm gonna go surfing, I'm gonna do this." And we have this social unrest, and how do politicians handicap that, um, in this new world?

    6. DS

      I, I think that could happen. I mean, particularly among, uh, young populations who are not at risk a- as much, um, you know, for the, the relatively younger, healthier people who don't have comorbidity factors could say, "Look, I've got a one in a thousand chance or, you know, or less o- of dying if, if... even if I do get this, um, and I'm just gonna take that chance." Um, but it's all the more reason why I think we need a strategy to get out of lockdown that already includes, uh, the idea of letting out these, these people who are at much lower risk and, and isolates the people who are at higher risk.

    7. JC

      And against the p- uh, you have anything to add to that, Chamath? That kind of doom day sc- scenario or that eventuality?

    8. CP

      Well, I think that you're very right, Jason, that I don't think we're going to get out of lockdown, um, until, uh, June 1st at the earliest, um, and I think that's in California. I think Newsom's posture is basically that if April looks like the curves are ticking, it's gonna be mid-May to late May before he lifts this thing or if (laughs) I don't know if I can handle this. ... we see a counter. And but, but it's, it's also important that, that we understand like, you know, we just talked about companies. The only entity that's in even worse shape than companies and people are states and cities and counties.

    9. JC

      Yeah, their debt is incredible.

    10. CP

      And-

    11. JC

      They have no revenue and massive costs.

    12. CP

      No revenue, massive costs, and they're nonprofits. And think of the, the, you know, the garbage collector, the fireman, the police officer, the teacher. These are like... These are the backbones and the pillars of our, of our communities.

    13. JC

      Well, it's, it's such a good thing that we were so resilient and we thought ahead and built up massive surpluses in our tax bases. Oh, wait, we didn't do that. (laughs)

    14. CP

      (laughs) ... well, the, the, there, there were s- there were some provisions to do that, these rainy day funds, but those are gonna get exhausted. And, uh, you know, we're gonna have to bail those guys out as well. So, this is what I'm saying, which is that when you're pumping in trillions of dollars haphazardly into the capital markets before you think about people or you think about the states and cities and communities in America, I just think it's a recipe for disaster.

    15. JC

      Let me ask this even more simply, David. Under what circumstance would you be willing to go back to our poker game on a Monday night and have six, seven of us around a table sharing a meal and playing cards for six hours?

    16. DS

      Um, well, if there was, if there was a, a treatment for, for the virus so that you knew that if you got it you weren't gonna die, that would be a big deal. Um-

    17. JC

      Okay. That's the-

    18. DS

      ... because-

    19. JC

      ... that's the obvious way after that.

    20. DS

      ... that's the obviously way after that. Yeah. Th- there, there's a Russian roulette aspect to, to the virus right now, where even if your odds are low, um, you know, you, you, you, you still don't wanna take the chance. Um, I think the, the next thing that would probably help would, would be that if we had this rapid ubiquitous testing, so I could know that the people who are in the room with me, um, are-

    21. JC

      Were all tested.

    22. DS

      ... were all tested and were all negative and, you know, they could repeat the, the tests on a frequent enough basis that we can all trust in the result. Um, that, that would make a big difference, I think.

  15. 1:02:17 – 1:11:24

    Trump vs. Biden: who has the edge in 2020 right now?

    1. JC

      All right. Let's wrap with politics. All of this is occurring in an election year. Um, Bernie is out of the race, Biden, um, is doing a daily, uh, webcast. Uh, Trump's ratings are through the roof, as he is, uh, more than willing to let us all know in his abhorrent (laughs) narcissistic way that his ratings are just tremendous right now in the middle of thousands of Americans dying a day. Um, but we have to touch on this because elections are how we, uh, govern and make these decisions, is by who we put into these positions. So, wh- what do we think, and let's just make odds here, odds that Trump wins again, odds that Biden wins? If you had to lay the odds, if you had to give it a percentage or you wanna set a line, what, w- what are, what are your thoughts, David?

    2. DS

      Um, I, I always think that these things are basically a coin flip, I mean, this far out. Um, I mean, right now it seems like, um, you know, uh, Trump's ratings have never been higher, um, he's polling relatively well. Um, and, and Biden just seems completely irrelevant. But if we're still dealing with the virus by November, if we've cycled in and out of lockdown, if we have kind of an unresolved situation, if the economy is, um, in a very, very deep recession or depression, I think, you know, it's, it's up for grabs.

    3. JC

      Chamath?

    4. CP

      I think that, um, if th- if there is a V-shaped recovery of any kind, uh, Trump will win in a landslide.

    5. JC

      Right now we are in a V-shaped recovery. The market has come back.

    6. CP

      No, we're not. No, we're not. No.

    7. JC

      Well, uh, if you use the market as a guide-

    8. CP

      The market... Now, the market is, the market is completely decoupled from Main Street. And so what Wall Street does is irrelevant right now. What I mean by recovery is what happens on Main Street.

    9. JC

      Okay.

    10. CP

      Uh, because if you have 16, 17, 20, 22% unemployment, um, y- I mean, you could feel the prancing dog and he'll beat Trump.

    11. JC

      Yeah.

    12. CP

      Um, so, um, I think that, uh, it, uh, the president needs, um, a massive victory here. So what does the game theory say? The game theory probably says that he'll try to force people to go back to work as quickly as possible. And if there's even a modicum, a shred of evidence on some kind of, you know, therapeutic, they'll, you know, drum it up like it's, um, like it's a cure and try to confuse people that there's a vaccine. Um, but I think he needs that because in the absence of that, again, I just go back to how difficult will it be to start real life? I think it's going to be difficult. And I think in that, um, people won't have a lot of patience for the fact that, you know, the debt will have ballooned, um, deficits will have ballooned, trillions of dollars will have gone out the door. And people will be meaningfully struggling going into election day. I don't think that that helps Trump at all. And, you know, by the way, and we'll talk about this in our next podcast 'cause we should probably get an economist to talk about it, but, you know, what is putting $10 trillion or whatever the final number is, it'll probably be 20 trillion, you know, one, one times US GDP. What does that do to the economy? What does that do to long-term inflation? Like, if you see what's happening to China-

    13. JC

      Well, I mean, didn't that what Japan did and they went through a lost decade or two?

    14. CP

      No, I, I think the best, better example is what happened in China, which is a combination of fiscal and monetary stimulus in 2009 and '10 and the results are basically a lot of fake growth and massive inflation. Um, and so, you know, it's, it's probably useful to debate that, uh, in the next, in the next pod, but-

    15. JC

      What, what are the chances-

    16. CP

      ... I think it creates a lot of risk for Trump.

    17. JC

      D- what are, what are the chances of a dark horse candidate?

    18. DS

      Yeah.

    19. CP

      Yeah. Our, in, in, on the-

    20. JC

      Zero.

    21. CP

      Zero.

    22. JC

      So it's Biden for sure.

    23. CP

      Yeah. It's Biden versus Trump.

    24. JC

      No chance.

    25. DS

      Barring a Biden health emergency.

    26. CP

      Yeah.

    27. DS

      I mean, yeah. I mean, he is-

    28. CP

      Yeah.

    29. DS

      ... he's, you know, not a spring chicken, so-

    30. JC

      So either person, either person gets coronavirus, it could be... Yeah.

  16. 1:11:24 – 1:13:34

    Was Jack Dorsey's $1B donation the strongest move of 2020 so far?

    1. JC

      Uh, and hey, how great was Jack giving away a billion dollars? I mean, we saw him get barbecued on-

    2. DS

      Strong.

    3. JC

      ...social media, but what a strong move, huh? And he's gonna-

    4. DS

      Strong.

    5. JC

      He put it in a Google Sheet. He's like, "Here's a Google Sheet."

    6. CP

      And made the sh- and made the sheet open. I mean, it's the strongest move ever. It's like, you know, everybody, you know, I've, I've always been very skeptical of philanthropy because I feel like it's, you know, a, a d'alliance of the established rich in North America because they like to have their names on things. And here's a guy who just basically pwned all of that. I don't need a hospital with my name on it, I don't need a building with my name on it. Here's a billion dollars (laughs) and here's a Google spreadsheet to track it, which means I'm gonna have zero in, you know, overhead in running it. I mean, it's, it's so strong.

    7. JC

      It's literally, like, he... The only thing that could be stronger is if he connected it to a Stripe account and like, as he, as he swiped his credit card-

    8. CP

      It's just, it's just so strong. It's, it's-

    9. JC

      ...he should put a Zapier that tweets it. (laughs)

    10. CP

      I mean, he has a Google Doc which is set so that everybody can read it at all times. I mean, for a billion dollars, it's just amazing.

    11. JC

      He should start a Slack instance with like each of those nonprofits-

    12. CP

      He's the best, he's the best.

    13. JC

      ...having their own channel.

    14. CP

      He completely, by the way, he completely pwned the Giving Pledge in one fell swoop.

    15. JC

      Yes. The Giving Pledge-

    16. CP

      Now-

    17. JC

      ...which nobody has any, it's pretty opaque. Now he's just like, here it is.

    18. CP

      Well, it's nothing. It's basically pretend you're gonna give your money away. We don't need to know how much, you don't really need to do it, there's no accountability, but we have this fun party once a year. We can all hang out and, you know, grab hand-

    19. JC

      How is the party? Is it good?

    20. CP

      ...and slap each other. Uh, I haven't signed it. I'm not signing it. (laughs)

    21. JC

      (laughs)

    22. CP

      Chamath's like, "The Giving Pledge." Yeah. So stupid. It's like the sign of insecurity. (laughs)

    23. JC

      Uh, Saxy Poo, thanks for coming on the pod, Rain Man. We appreciate it.

    24. CP

      Love you, Saxy Poo.

    25. JC

      We love you, Saxy Poo.

    26. CP

      Love you, J Cal.

    27. JC

      Love you too, Chamath. Bestie C., uh, we love you. Uh, and, uh, everybody stay safe, seriously. And oh, and I just wanted to close-

    28. DS

      Wear a mask.

    29. JC

      Wear a mask, and to those people on the front lines, the janitors, the Google, uh, the Amazon drivers, Instacart, people in the food supply.

    30. CP

      You're the fucking best.

Episode duration: 1:13:34

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