All-In PodcastE30: Ramifications of Biden's proposed capital gains tax hike, founder psychology & more
EVERY SPOKEN WORD
150 min read · 30,348 words- 0:00 – 1:19
Intro
- JCJason Calacanis
Shout out to (beep) , uh, a company Sax and I-
- DSDavid Sacks
What? What the hell are you doing?
- CPChamath Palihapitiya
What we're doing sodas? What are you doing? What the fuck are you doing?
- DSDavid Sacks
What the hell? Are you doing, Sax? Can I drop a shout out for a founder? I'm not-
- CPChamath Palihapitiya
(laughs)
- JCJason Calacanis
No fucking way. You cannot do that. No.
- DSDavid Sacks
Nick, Nick, cut that shit out. Nick, cut that shit out.
- CPChamath Palihapitiya
Shut the fuck up.
- DFDavid Friedberg
Shove it in or what the fuck? (laughs)
- JCJason Calacanis
Shut the fuck up. Beat that shit out.
- CPChamath Palihapitiya
I just wanted to give a founder a plug because he did so good.
- JCJason Calacanis
You are such a scumbag.
- DFDavid Friedberg
What the fuck?
- JCJason Calacanis
Despite how tired I am, you... I've woken up now. Now I'm awake. You've awakened the-
- CPChamath Palihapitiya
Okay. Oh, we have a drug?
- DSDavid Sacks
Totally. I'm done. I quit.
- DFDavid Friedberg
I'll give a shout out to (beep) , which just got acquired by (beep) .
- CPChamath Palihapitiya
Oh my gosh. Shut up. Shut the fuck up.
- JCJason Calacanis
More baby. We need plugs.
- NANarrator
I'm going all in. Don't let your winners ride. Rain Man, David Sax. I'm going all in. And I said we open sourced it to the fans and they've just gone crazy with it. Love you, S.I.D.E. Queen of Quinoa. I'm going all in.
- JCJason Calacanis
Hey, everybody, welcome to the All In podcast. I'm Jason Calacanis. With us today, the Rain Man himself, calling in from an undisclosed location, the Queen of Quinoa, and of course, the dictator himself, Chamath Palihapitiya. All right, boys, how are we doing?
- DSDavid Sacks
Feels low energy today. What's going on?
- CPChamath Palihapitiya
We're great. How are you?
- DSDavid Sacks
What's going on?
- CPChamath Palihapitiya
Let's go. Let's do this. Let's do this.
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
I love it. Let's go.
- JCJason Calacanis
You can love it? (laughs)
- DSDavid Sacks
Ah.
- JCJason Calacanis
All right, you're hot. You're coming in hot. Well-
- 1:19 – 21:33
Biden's capital gains tax hike
- CPChamath Palihapitiya
news. Biden has announced, uh, his capital gains tax hike. I don't think this impacts any of us, but Biden will propose almost doubling the capital gains tax rate for wealthy individuals from 20% to... Not 25, not 28, 39.6% to help pay for the social spending, uh-
- DSDavid Sacks
(coughs)
- CPChamath Palihapitiya
... and in equality. For those earning one million or more, so nobody on this call, federal tax rates could be as high as 43.4%. The capital gains increase would raise 370 billion over a decade, yada yada. For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22%, and Californians, 56.7%. Biden has previously warned that those earning over 400,000 can expect to pay more in taxes. This was just breaking news a couple of hours before we started the pod, and the stock market is, uh, down and people are freaking out.
- DSDavid Sacks
We should do a-
- CPChamath Palihapitiya
Uh-
- DFDavid Friedberg
Well, J Cal, J Cal, I want to hear your take on this actually. I want to start with your take.
- CPChamath Palihapitiya
Why didn't you, why didn't you, why didn't you tell me Biden was gonna do this?
- DFDavid Friedberg
(laughs)
- CPChamath Palihapitiya
I would have voted for Trump. You didn't tell me this was going to hit me so hard.
- DFDavid Friedberg
No, J- J- J Cal was ranting on this topic 15 minutes ago. We were talking, and I'm like, "Dummy what did you think was gonna happen?"
- CPChamath Palihapitiya
(laughs)
- DFDavid Friedberg
You know? He's sitting there going off. He's sitting there going off. It's like, what did you expect?
- DSDavid Sacks
Just before we get into it, we should do a quick primer on what this means, right? So capital gains taxes are the taxes you pay when you make an investment and then you sell that investment at a profit. The, the... You pay a tax on the profit you make, and there's a difference between capital gains on the short-term, which means less than one year, and long-term, which means you've had the investment for more than a year. So economic policy historically has dictated that having a low capital gains tax rate relative to what m- you know, an income tax rate might make, might be, incentivizes people to make long-term investments and it, you know, gets more money moving in the economy, and as a result, um, you know, the economy will grow. And so the idea of increasing the long-term capital gains tax from 20%, which it currently is, to 40%, um, is a real striking, you know, economic policy shift, rationalized as, you know, we're gonna save, uh, you know, we're going to use this money for social spending. But I think the historical context and, and what this is, is really important as we get into the conversation. Um, and just speaking historically, you know, the, the, the maximum tax rate on long-term capital gains got up to 40% tax. You probably have the history on this in 1978 for a year, right? Or like '76 to '78. And then it's been largely, you know, 15 to 20% for the last 20 years or so. Um, and so to jump up... Yeah, and prior to that, in the early part of the 20th century, it was like 25% pretty consistently for a long time. So to jump up to 40% is a really big shift, and the, there's a lot of debate around the economic implications of doing this. Uh, I thought that was important. Yeah.
- CPChamath Palihapitiya
Let's take a step back and actually see the forest from the trees. And the forest from the trees is that I don't think Biden, um, thinks that it's a credible plan, um, inasmuch as I probably think, uh, he needs... You know, this is like, it's performative, um, because it was a lot larger, the number, the headline number was a lot larger than, um, what people were whispering was gonna be the number, right? It was supposed to be like in the low 30s or maybe kind of like, you know, 33, 34, um, and then all of a sudden, like, to come out at 39.6, I think it's almost like, okay, he- he's- he's giving the pound of flesh to, uh, the- the left kind of like woke mob of the Democratic Party, who probably doesn't understand how capitalism works in the first place and doesn't care because they're not, they're not participants in it. Now, the- the... My reaction is I don't think it's gonna pass. I think it's gonna be really tough to get done, and I think it probably... You know, maybe, maybe there's a watered-down version, but this version I- I- I'm not super worried about. And then it just comes back to the same thing over and over. The- the fewer the number of people that get to participate in the growth and see the upside, the more there are that just wants to just kind of, you know, tear it all down. And so, I don't know, it's just yet another signal that we have these structural issues to fix. It's not reasonable that a few people get super rich and everybody else gets left on the sidelines.
- JCJason Calacanis
Sax, what are your thoughts?
- CPChamath Palihapitiya
It's not gonna pass, i- but it's not gonna pass. It's not gonna pass.
- JCJason Calacanis
Sax, is it gonna pass? Is it an opening salvo where he wants to get to 32, so he's starting at 39?
- DFDavid Friedberg
I think it could-
- JCJason Calacanis
Okay.
- DFDavid Friedberg
... I think it could pass becau- I think they're, they're planning to do this tax increase as part of the, the second infrastructure bill. It's not really an infrastructure bill. They're calling it human infrastructure. We've talked about this. Infrastructure's one of the last categories of federal spending that's still popular, so they're rebranding a bunch of social programs as, as human infrastructure. Um, I think that bill will pass. I don't know if the, the rate will stay at 39.6, but I think there will be a big increase, clearly, in the, the cap gains rate. I mean, I think it's worth remembering how it got to 20%. It got to 20% because Bill Clinton lowered it from 28 to 20 as part of an overall package of, um, of, of tax reforms that he did in the, in the sort of the, the mid-'90s and, you know, that led to some of the best years of economic performance, GDP growth in the US, productivity growth, uh, deficit reduction, um, you know. And so, you know, I think we're, we're, we're, we are experimenting with breaking something that's been working, I think, pretty well since the, the Reagan, Clinton years, uh, which is to have, you know, reasonably low, uh, taxes on capital formation and investment. Um, I think it's a category error to treat capital gains or to think about it just as income. You have to remember that all this money has already been taxed once, right? So you make the money the first time as income. You earn it, you pay tax on it, then you decide to save some of it and then invest it, and then you get taxed again on that amount. And, um, so, so capital gains is a form of, of double taxation. Uh, that was the original reason, one of the reasons to, to have a different tax rate for it, and, um, you know, I think that this risks kind of messing up the economic recovery that's really underway already.
- CPChamath Palihapitiya
By the way, think about, um, what just happens to any organization that has to pay cap gains, right? It's not just individuals. Like, um, last time I checked, organizations aren't exempt from cap gains, um, for-profit organizations. Um, and I don't exactly know, um, what they will do as well. So, you know, you, you, you're putting a lot of people under a huge strain when you double the, the, the effective rate of return. So, you know, if you're, for example, like, um, a pension fund, right? And you have an enormous investment in a private equity fund or a hedge fund. Um, part of these things is that, you know, they're these complete pass-through vehicles. Um, and so as long as, like, you structured yourself in a way where you don't have to pay that tax, I think, I guess you're indifferent. But if you're any organization or institution or a person or collection of people that bears that tax, all of a sudden, you know, your returns have been basically cut in half. That's pretty nuts.
- JCJason Calacanis
Let's talk about the average Joe for a second, uh, or Jane, as it were. 401 (k) s would take a hit here, and then when you go to your retirement and you have to liquidate them...
- DSDavid Sacks
No, you don't pay tax on the, on the gains.
- JCJason Calacanis
You don't pay tax on that.
- DSDavid Sacks
You don't... Yeah. You don't pay tax on the 401 (k) gains during the investment.
- JCJason Calacanis
But your por- Oth- Other- Otherwise, your portfolio, because 401 (k) is going to be a small amount you can contribute every year, so retirees who happen to have stock market gains or cryptocurrency, people trading that, it's-
- DSDavid Sacks
Yeah, you'll basically pay the same as income tax, as opposed to paying, uh, a lower tax.
- JCJason Calacanis
So would a-
- CPChamath Palihapitiya
It'll diminish investment, Jason. It's exactly what David says, which is that on the- on a marginal basis, what'll happen is inflation probably goes up because people just decide to consume rather than invest, because they think, "Well, what's the point? You know, there's already risk that I bear." And so, you know, the, the earliest risk assets, right? The riskiest ones that we all participate in, which is early-stage venture and company formation, there's... You, you may not be thinking about the capital gains rate, but it's implicit in the returns that you're expecting for the risk and the time you're gonna take. And, you know, we've been trained to feel that rate. And if you double that rate from 20 to 40, I suspect that there's a lot of people whose risk tolerance changes, and they're gonna feel their after-tax gains differently, and they'll wonder to themselves, "Is this worth it?" And then I think what happens as a result is entrepreneurship drags. I don't know if anybody's done, uh, an analysis, but I suspect part of the reason why America's such a, you know, an amazing, like, sink for capital, right, it absorbs capital all around the world, is that you've created incentives that get people very excited because they think they can get rewarded. If you take those rewards away, I think the implications are much bigger than just the cap gains rates here, because as the people change their behavior, then the capital formation pools outside of the United States change their behavior, and the whole thing has a knock-on effect. And it was more muted in Clinton. It was less muted in '78. It basically didn't exist in the '40s and '50s, but it is a huge force today. I mean, like, we are an indebted nation that owes money to all kinds of countries around the world, including China. We're supposed to generate growth and sort of pay it back.
- JCJason Calacanis
And where will the growth come from-
- 21:33 – 42:16
Addressing the federal budget problems
- CPChamath Palihapitiya
the same things at the end of the day, so.
- DSDavid Sacks
Let's go back, let's go back to the federal budget problem. Like, how do you address it, Sax? I mean, what's the right course here?
- DFDavid Friedberg
What I think is amazing is we're, we're about to spend... We're raising this hundreds of billions of taxes in order to fund, you know, trillions of, of new spending. I don't really hear the administration selling these new programs, selling the-
- DSDavid Sacks
Mm-hmm.
- DFDavid Friedberg
... spending. All we're really talking about is that there's too many rich people here. We have these millionaires and billionaires. We got to tax them more. And so all, all we're really talking about is whether it's appropriate to be punishing the, the rich and super rich. We're not really talking about, where's this money going? Are these programs justified?
- JCJason Calacanis
Now, what are we getting out of it?
- DFDavid Friedberg
What do we get out of it? Exactly. And my point is, for- forget about, like, who it's gonna hurt. I think it's eventually gonna hurt the economy. Uh, and the question is, what do we get out of it? And I think what's amazing is this isn't even paying for the big ticket items on the progressive wish list. We're not getting to universal, um, healthcare with this. We're not getting to universal higher education. We're not getting to any of the... We're not getting to, like, forgiveness of, of student loans or anything like that. We're not getting to any of the really big ticket items on the progressive wish list, and yet we're maxing out the taxes relative to anything we've done historically. And so where do you go from here? You know, because this-
- DSDavid Sacks
Yeah, my thinking is-
- DFDavid Friedberg
This is just, this is just the tip of the iceberg in terms of, of the progressive agenda.
- DSDavid Sacks
Doesn't that speak to the problem? Like, the fact that we have such an extraordinarily high, uh, debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make ends meet effectively, right? I mean, 'cause our alternative, again, is to just let massive inflation run, you know, issue a ton of, uh, a ton of new debt, or to cut spending.
- CPChamath Palihapitiya
No, no, no. But David, D- but you're-
- DSDavid Sacks
But neither of those seem to be on the table.
- CPChamath Palihapitiya
No, no, no. You're going to exacerbate this issue. I'm, I'm telling you, I know it doesn't seem likely, but I think on a marginal basis, this will be an incentive to spend. And the reason is that it's a very frustrating idea for somebody to think about putting money in the ground, especially a sophisticated investor, um, at a rate of return that just changed in half. And so from my perspective, I would be more likely to spend because I would rather just YOLO the money than I would rather put it into the ground, because I would be worried that that could then get taken away from me. It could also change even further and further, and I think that's a very frustrating idea. I'd rather take a vacation. Again, let's go back to the example. I'd rather take a vacation with that $10,000 than go on to Jason's syndicate and put it into the hands of folks, because I'm just like, you know what? It's gonna turn into... Even if Jason hits it and I get back, you know, I'd rather just go on vacation.... enough of those decisions, and I think, I think you have a very different kind of economy. You have? You know what you have? You have what everybody else has.
- DSDavid Sacks
So do we reduce spending?
- CPChamath Palihapitiya
I think you have to reduce expenses. I think that we have an infrastructure that is not well-accounted for. Meaning, if you're a company, you can go to a company like Tableau, you can go to a company like, you know, pick your, pick your metrics company, and within, you know, a few weeks and months of work, you can literally understand where all the dollars are, right, you can understand your business, and you can figure out where money is being wasted and where it's not. In a government, that's impossible to do, right, because you have these laws, and these laws are artificial constructs that we construct, and those artificial constructs are influenced by money in and of itself. And so these dollar flows are impossible to map, so you don't know where it goes. So for example, the $700 billion budget in the Pentagon, does anybody have any idea what the ROI is on that or even a way to measure it? Like even to actually make it simple, what, like if you were, if you had $700 billion of investment capital, the, the market has a really simple way of saying, "Okay, David, what's your ROIC? What's your return on invested capital?" And you can say all kinds of fancy things, you can have all kinds of fancy projects or simple projects, but at the end of the day, what is measurable is a dollar in and what that dollar grew into, and that's a return on invested capital. It is impossible to know that. And so, you know, we could say, for example, you could define it and say, "Well, I'm going to basically get every single person to graduate high school, and now I'm going to spend $500 billion a year to make sure that the graduation rate is 100%." That would be an incredible goal. You know what? That is absolutely measurable, right? And, and you'd be able to back into all of these programs, and the one that's, ones that didn't work, you'd cut, you know, and you'd end up with what David said, which is school vouchers. (laughs) Uh, I mean just igni-
- DSDavid Sacks
I think, I think the absence of that accountability, Chamath has led us to a, a, a scary dilemma, and the dilemma is, uh, over 10 million Americans are directly employed by federal government, and a large swath of the remainder of the economy is supported by federal government spending-
- JCJason Calacanis
Which is basically Europe.
- DSDavid Sacks
... at this point, right? So lar- lar- large amounts, de- defense and military, construction, healthcare and pharma. I mean, the list goes on, but like the direct employees of the federal government plus the amount of revenue that depends on federal spending is so significant now as a percent of the total income generated by Americans that it is very hard to say like, "Let's create accountability in a system when so much of the economy is functionally dependent on it." Am I missing something, Sax? Like, I mean, isn't that the circumstance we're in right now?
- DFDavid Friedberg
Yeah, I mean, the thing that like i- i- is amazing to me is, you know, I lived through the 1980s and 1990s like, like you guys did. From 1982 to 2000, that 18-year period, we had sort of an unrivaled economic performance. It was roughly around... We had two bad years under George Herbert Walker Bush, that's why he lost re-election, but we had close to 40% growth in GDP every year, we had great productivity, um, and we had massive deficit reduction. It's the last years-
- JCJason Calacanis
You said 40% a year in GDP.
- DFDavid Friedberg
Yeah, and we, and we had, we, we actually had government s- uh, surpluses, budget surpluses the last few years. So it seems to me that we had the winning formula as a country and, uh, look, this is not partisan. I think it's bipartisan. I think it, the, the, this right solution is somewhere between what, what Reagan and, and Bill Clinton did. And, you know, Clinton, uh, he rose... He increased the individual tax rate to 39.6, so he did do that fr- eh, from 36%, but he cut it from... He cut the investment, the cap gains rate, from 28 to 20. It was in that ballpark. You know, we know that works. You know, we know that works. I, and, and, and, you know, somehow, we've moved away from what we learnt in that time period because, you know, I think the, the, the left in this country has, has become kind of, you know, has embraced this, this-
- CPChamath Palihapitiya
We're saying the same thing. You set up the incentives for people to invest, they do. If you set up the incentives for people to spend, they will do that as well. And i-
- JCJason Calacanis
I, I see this... I think Chamath is exactly right. There are a lot of people, and you used the example of thesyndicate.com. When I do my syndicate deals, there are people who are recreationally saying, "You know what? I love the idea of putting 5 or 10K into a flyer." They're gonna... You know, half of them will go away, a third of them. All these people who are, you know, i- involved in tr- day trading or crypto or real estate investing, they're going to look at it and say, "Is this worth the time or is it worth this amount of time? Maybe I'll cut back from doing 40 hours a week of this to 20." A- and if you look at what happened with crypto people, they went to Puerto Rico. You look what happened to venture capitalists and CEOs, they went to Florida, Miami, Austin. This is gonna... If it does pass, you could be pushing people to Singapore.
- CPChamath Palihapitiya
Well, we have another very complicated problem, and this is what Friedberg brought up, which is... And I don't know the answer, David, so I'm d- trying to... I'm actually talking around your question 'cause I, I think it's a, it's, it's the right absolute question. But think about this. What happens in a world where now, let's just say, that the revenue of the government goes up, right? But outcomes stay the same or get worse, and at the same time... Now, and you could claim that that's effectively what's been happening over the last 20 or 30 years, right? Government revenues have gone up, impact has stayed the same or probably been net negative. But then at the same time, you have this, you know, program of quantitative easing where then you can essentially print money on demand. And when you think about that, it's like, "Wait a minute, I am giving you money, but then, then you are also going to the photocopy machine with my money to make more money, and all of that total money does less than what it did when it was half that or a quarter or a third of it?" That's a very scary realization I think that people, you know, will eventually come to. Um, and I don't know what the answer to that is. I, you know, I- I- I think David, uh, Saxypoo said it, which is like, you know, the states are this incredible A/B test, right? Because you get to test like theories, right? And you have, you have now every complexion of theory. You have like, you know, the low tax states, the no tax states, the mid-tax states, you have high real estate taxes, low real estate taxes, high estate tax, whatever. You get every grab bag of incentives.... and you're going to see, but the problem is, that was assuming that the federal government kind of mostly stayed out of the way. (laughs)
- DFDavid Friedberg
Right.
- CPChamath Palihapitiya
(laughs) Wh- wh- when you have this massive overlay...
- DFDavid Friedberg
Yeah, I just posted a chart in the, the chat, that Nick can put up, which is federal spending, federal outlays as a percentage of GDP. And it's really interesting because federal outlays as a percent of GDP have generally been around the 20% line, plus or minus a couple of percent since, you know, the 1980s. And last year, in 2019, it was 20.7%. It jumped to 31.3% under COVID. And it now feels like we're trying to make this new level of, you know, going from 20 to 30 permanent.
- DSDavid Sacks
It's like mask- mask wearing.
- CPChamath Palihapitiya
Well, the- the pro- the problem is the only time we did that in history was in World War II. Now, we were trying to fight the Nazis, which was worth spending the money on.
- DFDavid Friedberg
Yeah, I would say that was a good use of capital.
- 42:16 – 50:06
Chauvin verdict, media coverage
- DSDavid Sacks
Uh, all right. Uh, the Chauvin trial, uh, came back guilty, all three charges.
- CPChamath Palihapitiya
Very quick verdict.
- DSDavid Sacks
What is there to even talk about here? What is there to talk about?
- CPChamath Palihapitiya
I don't, I don't even know.
- DSDavid Sacks
(laughs)
- CPChamath Palihapitiya
I mean I feel like we should-
- DSDavid Sacks
Why, why are we, uh, like-
- CPChamath Palihapitiya
Can I get, can I give a, can I give a shout-out to, um, a really good friend of mine? His name is Neal Katyal. He was the former solicitor general under Obama.
- DSDavid Sacks
Mm-hmm.
- CPChamath Palihapitiya
Um, he, uh, he was, uh, one of the, uh, prosecutors that, that worked on that case. Um, he's a, he's a partner at Hogans,... um, runs a Supreme Court practice here, but basically went and did this pro bono trial, uh, on, on behalf of the state of Minnesota, uh, w- working with the, the, the district attorney. And I just, I just want to say, Neal, proud of you. It's an incredible thing. Um, thank you for keeping (laughs) America safe.
- DSDavid Sacks
Yeah.
- CPChamath Palihapitiya
I mean, uh-
- DSDavid Sacks
Let's, let's move on. (laughs)
- CPChamath Palihapitiya
You know, what's crazy is like, so like-
- DSDavid Sacks
It's okay.
- CPChamath Palihapitiya
But then, you know, the same day, there was, there was a shooting of this un- th- this unfortunate shooting of this, I think, I think she was 16-year-old, 16 years old, this Black girl in Ohio. And then, you know, LeBron tweeted something out, and then LeBron had to basically delete the tweet 'cause it was causing people to go absolutely crazy.
- JCJason Calacanis
Well, I mean, each of these situations is unique. And in that situation, somebody was going to stab another person. The cop didn't know what was going to happen. And, you know, in a, in another time period, like, maybe that would have been saving somebody's life, who had potentially been stabbed and, you know, the, the George Floyd... I, I think you got to reserve judgment on each of these until you get all the information. But the information here was just super conclusive. Like I, the, the, the gymnastics, Ben Shapiro, and some of these far-right people had to go through to say what you saw in George Floyd being murdered was not what happened.
- CPChamath Palihapitiya
Well, that's, that's performative theater, trying to get people to watch something.
- JCJason Calacanis
Y- And it was, I mean, it was just gross to watch, like-
- CPChamath Palihapitiya
You might as well call it what it is. Like, that's acting. I feel like probably if, if anybody, if any one of us found Ben Shapiro in a bar and just hung out and had a beer, you'd find out that he was like, he was like the Meryl Streep of our generation. You know, like, this incredible actor, just-
- JCJason Calacanis
(laughs) What does that mean?
- CPChamath Palihapitiya
Like an incredible actor.
- JCJason Calacanis
Well, no, I mean, you know-
- CPChamath Palihapitiya
I mean, there are, I think there are-
- JCJason Calacanis
Scott Adams, hi- and his podcast, all these guys are just trying to figure out-
- CPChamath Palihapitiya
Right.
- JCJason Calacanis
... how to say that this was a travesty of justice. And I'm like, "I, I don't know what you saw, but..."
- DFDavid Friedberg
Yeah. Let, let me explain where they went wrong, okay? So, so look, I, I, I agree with you guys fundamentally. This was an easy... Th- th- look, this, this was, uh, you know, finding of fact by the jury, guilty on all charges, obvious, right? The tape shows it. His, uh, the... Chauvin's, uh, record as a cop, numerous complaints, you know, this was a bad apple. This was a bad cop. He deserved to be convicted, end of story. That's where the analysis should end. But, of course, the people on cable news would have nothing to say if that was the end of it. And so look, I think both the right and the left kind of went off the rails on this, where, you know, the right kind of went off the rails is you had... Well, what happened is you had Maxine Waters, you know, come out, and while the, the jury was still deliberating, she was basically calling for activists to get more confrontational in the streets if the verdict went the wrong way. And so then the defense-
- JCJason Calacanis
Not helpful.
- DFDavid Friedberg
Not helpful, right? And so the, so then the, the defense made a motion saying that, uh, this, this was affecting the deliberations. There's no proof of that. The jewel- the, the judge ruled against that motion, but he did... The judge reiterated his desire for the politicians to stop talking about the case, right? And so then what happened is the, the right-wing commentators were criticizing Maxine Waters and implying that, that there was an effort to try and coerce the jury. And there's no proof of that, right? And, and, and, and I think there's... The mistake isn't somehow framing Derrick Chauvin as, like, a sacrificial lamb to the mob. He was not. He was guilty. He deserved it. That being said, I do think that the judge had a point that it'd be helpful if these politicians would just stay out of it, stop commenting on it while the jury is deliberating. I think there was a legit point there. Um, but, you know, the, the, the left made some, some weird comments as well. You had... Nancy Pelosi made this really bizarre statement.
- 50:06 – 59:46
Hulu WeWork documentary, Founder psychology
- CPChamath Palihapitiya
the most interesting popcorn thing that I watched, uh, was the Hulu documentary.
- JCJason Calacanis
You did watch the Hulu documentary on WeWork?
- DFDavid Friedberg
(laughs)
- CPChamath Palihapitiya
I, uh, WeWork, yeah. I'll give it to you.
- DSDavid Sacks
Oh, I gotta watch it. I gotta watch it.
- DFDavid Friedberg
I haven't seen it yet, yeah.
- DSDavid Sacks
Oh.
- CPChamath Palihapitiya
It is, it is, in a word, I think, I think the good... I think the right word is, like, outrageous. I think the guy who stole it, Jason, was the lawyer who they interviewed.
- JCJason Calacanis
Yep.
- CPChamath Palihapitiya
He, he had some incredible kind of, like, one-liners.
- JCJason Calacanis
One-liners. Yeah.
- CPChamath Palihapitiya
Uh, but-
- JCJason Calacanis
I think it's... yeah, the, the, the, the-
- CPChamath Palihapitiya
I had a key... I'll, I'll be honest, and this may sound crazy, but I actually had, um, a fair amount of sympathy for Adam Neumann in watching it. I think that he, at least in the documentary, it came out that he, you know, not, not that he didn't create this issue, but that I think it was a little overly scapegoated because it's very hard for you to incinerate $45 billion without the complicity, at a minimum, of your board of directors, right? And, and a bunch of, like, extremely well-heeled, thoughtful investors. Um, and so there was just, there was just... there's so much complicity in this thing. So if anything, my takeaway was that he, he shares a... he shares the blame with a lot of other people and it's not... it wasn't, you know, him and him only. But my gosh, that documentary, some of the things, guys, are just, uh, they're fabulous.
- DSDavid Sacks
But this is, this is always true in these businesses that end up with, um, you know, bad actors that are enabled, right? I mean, it's been the case in public and... public success stories and failures, right? I mean, there's, uh, a, a cult of personality. The personality provides the, the... the high beta personality provides the alpha and-
- CPChamath Palihapitiya
Yeah, the-
- DSDavid Sacks
... it can also pro-... it can also compro- provide like a Theranos outcome and, you know, the, the-
- JCJason Calacanis
Yeah, but the thing that you... when you'll see when you watch this is... I don't know if you guys watched The Vow about that NXIVM cult, which is just equally loathsome, horrible people behaving badly. But he really targeted young people to work there and indoctrinated them into this, "We're changing the world." And then there were no adults there, and you see him behind the scenes when he's talking at the IPO roadshow, and he's having basically a panic attack, and he's psychotic. I mean, he was really deranged, and they have this video of him trying to get through the IPO roadshow and he can't.
- DSDavid Sacks
What show is it? What movie is this?
- JCJason Calacanis
It, it's the WeWork documentary or Hulu.
- CPChamath Palihapitiya
The WeWork documentary. Oh.
- JCJason Calacanis
Just get Hulu.
- CPChamath Palihapitiya
It's on, it's on Hulu, yeah.
- JCJason Calacanis
It is so deranged, it's awesome. I mean, it's Fyre Festival level.
- CPChamath Palihapitiya
I- I will hold off on that. I- I... deranged is a big word. I don't... I'm not sure that it's deranged, but I think it's like, it's juicy. It's, uh, it's gossipy.
- JCJason Calacanis
What about his wife and, like, that whole thing (laughs) , like, WeSchool? They're like, "We have to democratize education for $60,000 a year." (laughs)
- DSDavid Sacks
Talks to me. Have you guys, have you guys ever-
- JCJason Calacanis
You know, preschool. (laughs)
- DSDavid Sacks
Have you guys ever regretted enabling, um, you know, quirky personality entrepreneurs that you've backed and then you've regretted it later?
- CPChamath Palihapitiya
Yeah, so, um, the, the problem is it's hard, it's hard to know in the midst of it, you know? I guess it's like kind of like-
- 59:46 – 1:11:01
COVID surge in India
- DFDavid Friedberg
(laughs)
- CPChamath Palihapitiya
Speaking of COVID, what the hell is going on in India?
- DSDavid Sacks
Oh, it's brutal.
- CPChamath Palihapitiya
Oh, my lord. It's scary.
- DSDavid Sacks
I thought the whole thing was we w- they were taking hydroxychloroquine for totally different reasons and this is why it's all fine.
- CPChamath Palihapitiya
Or that they had some immunity or that it was hot. I mean, there was a million reasons of why they were not gonna get hit, and then now they're surging. And we have 60 million shots on the shelf, and the number of people getting shots is going down. This is America's chance to use... Uh, instead of battleships and nuclear weapons, we can use this COVID to shape global policy. We should be getting vaccines to other countries and be, once again, the shining light of the entire planet and humanity. Wh- why are we not bringing shots to India now? We have so many extra.
- DSDavid Sacks
I'm not sure... I'm just trying to pull up the India vax data per day. I'm not sure that there's a, um... That's a- that's as much the issue, right?
- CPChamath Palihapitiya
I mean, it is scary to watch their s- their... I mean, you're, you're our- our go-to science guy, Friedberg. Tell us what we're looking at here on this chart. I mean, the daily COVID cases are now hitting 250,000.
- DSDavid Sacks
300,000 a day, Jason, right now.
- CPChamath Palihapitiya
It broke 300? Oh, my lord. And the United States has gotten-
- DSDavid Sacks
In India. In India.
- CPChamath Palihapitiya
... down to, like, 50, 60.
- DSDavid Sacks
Yeah, in India, our deaths-
- CPChamath Palihapitiya
Our deaths are under 800.
- DSDavid Sacks
India has now passed the peak of the US. W- you know, India is now seeing more cases per day than any country has seen worldwide during the whole pandemic.... at over, um, you know, 300,000 a day right now, and it's, um, you know, it doesn't seem to be letting up. And we're now questioning whether it's testing that's the limiting factor in terms of reporting on these cases. So it's, uh, it's pretty nasty. Now there's a, um, a famous Indian politician who, uh, uh, who had been double vaxxed, uh, who claims that he is COVID positive as is his, um, mother and sister. And so it's also creating a little bit of a concern in the market about, um, you know, getting COVID. Now he doesn't seem to be having a severe case, um, which is, you know, one of the, the kind of important things to take note of i- in vaccination is, uh, is it's not necessarily binary, um, but it's certainly making a, a, a lot of, creating a lot of fear, uh, uh, as a result of his, um, kind of public statement about this.
- JCJason Calacanis
This isn't-
- DSDavid Sacks
Um-
- JCJason Calacanis
... just about cases either. Um, 30 days ago, they were at 200 deaths a day, and, uh, I mean, tragically, they're at 2,100. So it's 10Xed in 30 days. If it 10Xs again, tha- that's 20,000 people a day dying. This is a different level than any other country has experienced.
- DFDavid Friedberg
Tragic.
- JCJason Calacanis
And they don't have-
- DFDavid Friedberg
Look, at the end, at the end of the day-
- JCJason Calacanis
They don't have the h- the hospitals, hospitals to handle this, do they? This could become a, a crisis of epic proportions.
- DFDavid Friedberg
A- at the end of the day, a country's success in battling COVID's gonna be about how fast they can get their population vaccinated. It's very simple, right? I mean, it... Israel was first. They got everyone vaccinated. Now their cases are down to almost nothing. The US is doing pretty well, although there's some room for concern. We were doing, you know, close to four million vaccinations a day. Now we're at, like, three, three and a half, where they're starting to slip a little bit. Um, which is not good.
- JCJason Calacanis
And that doesn't have to do with Johnson & Johnson, right? That has to do-
- DFDavid Friedberg
No.
- JCJason Calacanis
... with people not showing up for appointments.
- DFDavid Friedberg
Yeah, and I think you gotta blame the media a little bit because they keep running all these vaccine scare stories about, you know, how this person or that person the vaccine punched through, and they got sick despite getting the vaccine. They keep selling-
- JCJason Calacanis
Fucking media.
- DFDavid Friedberg
They keep selling all this, like, you know, COVID, um, scareient porn, you know, the, the, the fear porn.
- JCJason Calacanis
You're so right. Do you know what I noticed the other day on CNN? This is how insincere and, um, ratings desperate they are. When they put up their COVID stats, they put up cumulative cases and cumulative deaths. That's what they obsess on. And it's like, "Hey, dummies, we know what you're doing here. You're trying to scare people. You should show the graph of the deaths going down and then why can't you take your mask off if you're vaccinated and you're outside?"
Episode duration: 1:23:35
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