E35: Biogen's controversial Alzheimer's drug approval, the billionaire space race, Bitcoin & more

Jason Calacanis 0:00 (laughs)

David Sacks 0:01 Like, Jacob-

Jason Calacanis 0:01 Sorry.

David Sacks 0:01 ... could you get any closer to the camera? I mean, your face is, like, right up in it.

David Friedberg 0:05 (laughs) We can see your bloodshot eyes.

Jason Calacanis 0:07 Oh, God.

Chamath Palihapitiya 0:07 I mean, it- it's really unbelievable. (laughs)

Jason Calacanis 0:08 9:00 AM start time's-

David Friedberg 0:09 (laughs) .

Jason Calacanis 0:09 ... a little rough on Jacob. A little rough on Jacob.

David Sacks 0:13 That's true. I want my second cup of coffee already.

Jason Calacanis 0:16 (laughs) This is- this is a lifestyle choice we may regret.

Narrator 0:18 I'm going all in. Don't let your winners ride.

Jason Calacanis 0:23 Rain Man, David Sachs.

Narrator 0:25 I'm going all in. And I said- We open source it to the fans and they've just gone crazy with it. USI. Love you at night. Queen of Quinoa. I'm going all in.

Jason Calacanis 0:35 Hey, everybody. Hey, everybody. Welcome to another episode of The All In Podcast. It's Saturday morning. It's ridiculously early, but we're taping the show because one of the besties happens to have left the continent with us from, uh, an undisclosed location, Chamath Palihapitiya. Are you in a wine cellar or-

Chamath Palihapitiya 0:55 (laughs)

Jason Calacanis 0:55 ... in catacombs? Uh, wh-

Chamath Palihapitiya 0:58 I am in. I am in... Look at it. Wait for it, wait for it. Wow. D- Were you able to see that or no?

Jason Calacanis 1:05 No.

David Sacks 1:05 What was it?

Jason Calacanis 1:06 Are you in the c- Are you in the cathedral somewhere?

David Friedberg 1:08 You mean the ceiling of your room?

Chamath Palihapitiya 1:09 (laughs)

Jason Calacanis 1:10 The sky walks on the ceiling. It's incredible. So, you paid for the four walls and now you can afford the roof.

Chamath Palihapitiya 1:16 Yeah, okay, hold on, hold on.

Jason Calacanis 1:16 Fantastic. Congrats.

Chamath Palihapitiya 1:16 Okay, hold on. I'll do a little, I'll do a little, uh... Let's see if you can just see outside and get a sense of the view. Oh, you can't. Oh, no. It's hard.

Jason Calacanis 1:24 We can, we can. Just, uh, pause for a second.

Chamath Palihapitiya 1:25 Oh, yeah. There it is. There's the-

Jason Calacanis 1:26 Oh. Whoa, bestie lifestyle happening. They're just gotta hold it for a second and then the light will do the thing.

Chamath Palihapitiya 1:30 Oh, no, that's my architect. Hold on.

Jason Calacanis 1:32 (laughs)

Chamath Palihapitiya 1:33 I'm going to-

Jason Calacanis 1:33 Look at this. Wow. Hmm.

Chamath Palihapitiya 1:35 ... go out here.

Jason Calacanis 1:35 This is some-

David Friedberg 1:35 I love how the- I love how the house is already built and he's still paying the architect.

Jason Calacanis 1:38 Yeah. He's like, "Uh, do me a favor. This came out great, but-

David Friedberg 1:40 Yeah.

Jason Calacanis 1:40 ... can you rip down these four rooms and then just start over?" (laughs) All right. Well, we lost, uh, bestie C as he walks around his castle in some European country.

David Sacks 1:49 Welcome to Lifestyles-

David Friedberg 1:50 (laughs)

David Sacks 1:50 ... of the Rich and Famous.

Jason Calacanis 1:51 What time is it there for you?

Chamath Palihapitiya 1:53 Well, it's, uh, six in the afternoon. Six in the evening. I- I was in London last week, and holy mackerel, the weather... If you wanna see climate change, spend some time in Europe, because literally day over day, uh, London on the first day I landed was, call it 24 degrees Celsius, so whatever that is, 80, 78 maybe. Beautiful. Literally the next day, it was 62 and raining. And it just kept bouncing back and forth. It is the weirdest thing. And if you're in Europe right now, you- you just see some of the craziest weather patterns literally day over day, massive thunder showers, then, you know, it's completely normal. I mean, no wonder everybody here takes, uh, climate change so seriously. You actually feel it every day.

Jason Calacanis 2:38 And with us as well, uh, David Sachs is here, the Rain Man himself, tearing up the Twitter. We've been off for two weeks, so there's a lot to cover. And of course, the Queen of Quinoa, chairman of the production board, David

Jason Calacanis 2:54 Friedberg. Right off the bat, I think we gotta go science and get the Friedberg ratio up from the get. Biogen has an Alzheimer's drug that on Monday the FDA approved. It's the first new treatment for Alzheimer's in almost two decades. And Biogen's drug is not a cure for Alzheimer's. Uh, and Friedberg will get into that. It does not reverse the disease's progression, but it does mitigate it gets it getting worse. Very strange moment in time. Uh, the FDA's advisory panel, three members of it have quit, because they didn't want to approve this drug because it had such a modest efficacy.

Chamath Palihapitiya 3:29 Three quit, but unanimous vote against approval.

Jason Calacanis 3:32 Right, so unanimous vote against, then three quit, and this is, I think, out of 10 or 11 individuals, um, so this is truly significant. The drug is going to cost $55,000. It still requires brain scans and all this kinda stuff, but it's hope for people suffering. Uh, and so the FDA approved it. Um, Friedberg, tell us on a science basis what we're seeing here. I- Is what's happening in journalism and social media now happening in science? Or is this some other, you know, search for truth, uh, or some other issue?

David Friedberg 4:03 The Biogen drug that was approved this week is called aducanumab. Remember, any drug that ends with mab, M-A-B, means monoclonal antibody. So it's an antibody. Uh, and antibodies, you know, as we've talked about in the past, are proteins that can be made by our immune system and proteins that bind to a specific target that then tells your immune system to clear that target out of your body. So that's what monoclonal antibodies do. And we have been using biological drugs, monoclonal antibody drugs, for decades now, uh, to target specific cells or specific proteins in our body, um, that we can then remove from our body and that can reverse or change, you know, human health in very significant ways. So this is a, um, you know, a class of drugs that is very efficacious for having specific outcomes across many disease states. And so years ago, researchers at the University of Zurich were looking at people with Alzheimer's that were having slowly progressive dementia, and they looked at antibodies that they could find in their brain, and they found this antibody that they saw was binding to amyloid plaque. And amyloid plaque is one of the theorized mechanisms by which Alzheimer's progresses, that as amyloid plaque builds up in your brain, you know, you start to have dysfunction and inflammation, and then the amyloid plaque kind of may be the driver of Alzheimer's, but that is not proven. So they then, you know, ultimately gave it to a company called NeuroImmune who licensed it to Biogen, and Biogen started testing it. And they took this antibody, um, that they discovered and they turned it into a- a per- a- a- you know, an antibody you can now get injected into your body, goes into your brain. It bi- the idea is it binds to amyloid plaque and removes it from your brain. And so theoretically, this should slow down or stop Alzheimer's. But it turns out that as they ran this test across thousands of patients, it didn't have as much of an effect. And in fact, the data across many, many patients showed that it didn't really off of a placebo baseline, meaning people that didn't get the drug versus people that did get the drug, that it wasn't really that different in terms of cognitive scores and tests and all this other stuff.So, they abandoned it a few years ago. They kind of got this n- They stopped the trial, they had this kind of negative outcome and, you know, Biogen got beat up for it. And then all of a sudden, they refiled about nine months later with the FDA saying, "Well, look, when we look at the patients with the highest dosage of the drug..." 'Cause they gave it in three different doses. So, the- the people that got the most antibodies, this particular group of people had a 23% decline in the progression of their Alzheimer's, which is kind of one way of slicing the data. And- and as a result, they went back to the FDA and people were like, "Well, you know, some of the tests don't really show that still." There were some cognitive test results that didn't show that that was the case, and they fought back against it. And so some people were pushing back against it, and we're not sure, no one knows for sure how it all kind of came together at the end, but the FDA ultimately approved this drug. And here's what's challenging about this. You basically will go in, you'll get an injection of this- this antibody, just like you do with many other antibody-based therapies. It costs roughly $5 to make antibody therapy, just to be clear. So, when you make 'em, five bucks roughly is the cost, and they're charging $56,000 for this treatment. So, that's problem one in the pharmaceutical kind of debate is should we be charging this, you know, the quality of life premium. And then number two-

Chamath Palihapitiya 7:21 Medicare Part B. Yeah.

David Friedberg 7:22 Yeah. And- and then n- part, uh, you know, the kind of second issue is, like, should this thing have been approved when it wasn't really that efficacious and you could slice the data slightly? And now all payers, you know, meaning all people who are insured or the government or whoever it is that's responsible for insurance payments, is ultimately bearing the cost of everyone with Alzheimer's. And there's 15 million people in the United States with Alzheimer's. They're gonna raise their hand and say, "Oh, my God. Anything that gives me any chance or any hope, I wanna get." But if it costs $56,000, is it really the responsibility of the insurance company and all the payers to give everyone a hope even if the drug may not work? Now, the downside and the side effect is negligible. There's no risk to taking this drug. So, it's all about the cost and the upside. And that- that- that- that is the big philosophical debate right now is like, first of all, should we approve drugs like this? Should we allow pharma companies to charge whatever they want even when the efficacy is very low and the cost is very low to make this stuff? And how do we ultimately decide what we approve and what we pay for?

Jason Calacanis 8:13 So, this is a classic risk/reward. Chamath, how do you look at this on a financial basis?

Chamath Palihapitiya 8:17 Yeah, let me- let me- let me give you sort of, like, a- a market investing kind of view on this. Um, look, I've been taking biotech pretty seriously over the last 18 months just trying to learn, because I think basically Friedberg ins- you know, incepted me with, uh, this idea that you- you have to know it. Um, so here's what's interesting in the setup for what I've learned and putting a little bit of my knowledge together, which is dangerous. But the setup for Alzheimer's is really scary. If you're Black, you're 20% more likely to get it. If you look at the distribution of all patients, 60% and upwards of, you know, 64, 65%, um, are women. So, if you think about the distribution of this disease, it's- it's the disease of minorities and it's the disease of women. Now, that's problematic in and of itself, because if you wanna have any form of equality, it seems like this is something that we have to tackle. The second interesting thing as a pr- as a setup to this is every single Alzheimer's drug that's ever gone through the FDA has been rejected and has failed. And what's interesting and the- the- the more social science around this is, this is also where two of the more infamous insider trading events ever happened, was around failed Alzheimer's drug. Um, the first, which is less known but inside baseball, was what happened at SAC, which was a huge hedge fund. But the second, that's very well-known, is Martha Stewart and why she went to jail was around an- uh, uh, the speculation and the insider trading of the phase three results of an Alzheimer's drug, which ultimately turned out to fail. It was almost the surest money on Wall Street, which is every time some- one of these drugs came to market, you just bet against it and it would turn out that these stocks would collapse. So, there is the social and market setup. I am super torn, but I think there are some positive points to make on this thing, so... But let me give you the negative case. The negative case is, what is the FDA doing approving a drug where there's no clear evidence that it leads to clinical benefits and it could give families a sense of false hope? What are you doing in terms of process if you have a unanimous vote against approval? So, why do you even bother having an FDA advisory committee of outside experts if they're just gonna do what you want? And it could set a precedent where companies, um, can get drugs approved on limited evidence. Now, here's the positive point, which is, they may be taking a long-term view and what they could be really doing is creating a market that ultimately incentivizes other folks to come in, where then ultimately those people are the ones that find the solution, right? Because this Biogen drug, Biogen came out and basically said, "We think this is a $100 billion market." So, now all of a sudden, you must believe capitalism is gonna take hold and a lot of young startups will say, "Well, shit, I should be going after this market as well." And so by going after that, after Biogen, then maybe you actually do get to the solution. And just a kind of a- a little bit of trivia, it turns out that the acting FDA commissioner in 2016, this woman Janet Woodcock, she was the one that approved a different form of drug in the exact same setup. That one was etaleprisene, which is basically for Duchenne muscular dystrophy. It had a negative panel vote. She basically said, "Nope, we're going with this." The scientific community reacted similarly back then, but she basically took the view that, you know, you're doing no harm, exactly what you said, Friedberg, 'cause the safety says it's fine. You're doing no harm to the patients by approving this drug, and maybe it might turn out to work in the end. And in that specific case for Duchenne muscular dystrophy, what we see four years later is that now there are a lot more companies focused on finding a solution, and they're pouring a ton of money into R&D, and maybe one of those things will break through. So, I think she could just be running the same playbook here in Alzheimer's, which is important enough, uh, that somebody needs to do something.

David Friedberg 12:04 You're saying the economic incentive could drive further innovation in this space that ultimately could benefit patients more truly than this current drug?

Chamath Palihapitiya 12:12 I think so. And I think, like, you know what? Look, uh, a- a lot of, like, I think drugs that- that are potential solutions, in many ways, I think what the FDA is doing are two things which I think are really positive. The first is that they're accelerating their approval timelines, right? So you can have breakthrough approval and innovations, and so you can get to market much, much faster. The best example is what we've seen in these vaccines. But the second thing is, if you have a well-structured safety study that says that these things are not harmful to humans, then yeah, David, I- it's- it's basically saying, "Sell a $56,000 drug. There's a $10,000 copay." Now, we should talk about that, because that shows how broken Medicare plan B is, uh, part B, sorry. Um, but yeah, they're creating a $100 billion market out of nothing.

David Friedberg 12:59 Yeah, but shou- shou- should that be the case, Chamath? Or should it be regulated? Because ultimately, if the regulators are approving the drug and enabling the commercial opportunity, shouldn't the regulators also say, "You know what? You can have this commercial opportunity, but you can only charge X. Because we're not gonna have the taxpayer pay the Y, uh, or pay-"

Chamath Palihapitiya 13:17 Yeah.

David Friedberg 13:17 "... pay the, you know?"

Jason Calacanis 13:17 Or, hey, Freeberg-

David Friedberg 13:18 Yeah.

Jason Calacanis 13:18 ... let me ask a- a- a really basic question here. Why is there no, you know, document put out by the FDA saying, "Here's how we came to this decision," in plain English? Or is there? 'Cause I looked for that, couldn't find it. In other words, it, you know, the same way there was a vote, they could say, "Hey, listen, we understand the vote. We're overruling it for this reason." And why isn't there an interim step?

David Friedberg 13:38 The FDA's not... The- the FDA's not your doctor, right? So I- I think the way things are set up is your doctor is meant to be informed about the panel's review of drugs and they... And there are labels that doctors need to be able to read and understand. And then the doctor's job is to make a decision on treatment for their patients and make a recommendation to their patients. So ultimately, the FDA is not a consumer organization. The labels that get approved, what the pharmaceutical companies have to say about their drug, all of that stuff is overseen by the regulators at the FDA, and then that is then used by the doctors to make treatment decisions. And, and ultimately translate-

Jason Calacanis 14:11 They couldn't kick this back and say, "Listen-"

Chamath Palihapitiya 14:13 No, Jason-

Jason Calacanis 14:13 But couldn't they kick it back and say, "We want you to do one more trial or some bridge step here. Hey, you can do 10,000 people over the next three years"?

David Friedberg 14:20 They do that.

Jason Calacanis 14:20 And by the way-

Chamath Palihapitiya 14:21 They do that. They-

David Friedberg 14:21 And- and they are gonna do continuing studies on aducanumab as it goes into market, and they always do that, and they always ask for more data, and they do this continuous review. The FDA is a really strong body and a really strong regulatory body, and we should all feel kind of pretty well, you know, safe and secure. But- but the issue with really, I think, the economic question on the other end, which is they could approve-

Jason Calacanis 14:40 That's the key.

David Friedberg 14:40 ... 100 drugs tomorrow, and then what happens to the economics of healthcare if everyone's allowed to charge any price they want for any care if it has even the slightest range of efficacy? We're not gonna be able to afford anything, you know?

Chamath Palihapitiya 14:51 So just to... So this is where, like, you know, regulatory bodies run i- run into each other, because the F-

David Friedberg 14:57 That's right. That's right.

Chamath Palihapitiya 14:57 So Alzheimer's dr- Alzheimer's is a drug of the old, all right? Healthcare expenses are covered by Medicare. And in Medicare, there's a section called Medicare Part B which effectively is a way for these drugs to go to market. Just so you guys know, under a Medicare part B plan, a physician gets a 6% kickback of the price of the drug. Your doctor gets 6% of that $57,000.

David Friedberg 15:24 That's a terrible incentive.

Chamath Palihapitiya 15:25 It's a- it's an incredibly bad incentive. And so, you know-

Jason Calacanis 15:28 $3,000 every time you put somebody on this? That's quite a spiff.

Chamath Palihapitiya 15:32 It is.

David Friedberg 15:33 (laughs)

Chamath Palihapitiya 15:33 And- and so- and so, you know-

Jason Calacanis 15:34 (laughs)

Chamath Palihapitiya 15:34 ... Medicare part B has been this mechanism that people have wanted to undo for a long time. Now, if you're sitting in the FDA, you can't change that, 'cause that's covered by CMS. So-

David Friedberg 15:42 Yeah, that's not your- that's not your jurisdiction.

Chamath Palihapitiya 15:44 I think it's like this weird inter-governmental agency warfare push and pull and trying to move the incentives. This all goes back to if Congress can't act, then all these folks have all of these other random tools. They just have to throw the spaghetti against the wall. And this is the kind of stuff that happens. Because Congress should actually be fixing this in a more substantive, holistic way. And until they do it, this is what's gonna happen.

David Friedberg 16:07 This is no different than what we saw during the pandemic, where we had health regulators coming in, local health regulators, public health officials saying, "Everything shut down." Because their incentive is to save lives. Their incentive is not to balance the trade-off between saving lives and protecting the people versus the economic damage, and the fallout, and the cost of it. And there are two different agencies, and ultimately the synthesis of these decisions isn't being managed by a leader anywhere or by a leading organization anywhere. And that's where things inflate and get ugly and get nasty over time.

Jason Calacanis 16:36 Okay, uh, Sax, as a free- as a free market monster, what do you think, Sax? How would you approach (laughs) releasing these drugs a- as a... Uh, no, but you're for less regulation. When you see this regulatory mess of spaghetti and, you know, costs and- and price gouging, you know, i- if- if we take the most cynical look at it, because 15 million people times $55,000 a year. I'm no genius at math, I got... But I- my SAT is telling me enough that that's, uh, gonna be... This drug's gonna make, what, 10 billion a year, 20 billion a year, something in that range, if they just get a fraction of those people.

David Sacks 17:08 So, I mean, I- I- I agree with Freeberg and Chamath that we shouldn't give doctors an incentive to choose one treatment or another, right? I mean, that just seems totally warped. But going to the sort of larger issue of FDA approval, um, I would make it a little bit easier to- to get drugs approved. I mean, look, I- I think that, you know, double blind tests is the gold standard. If the drug clearly doesn't work, you don't approve it. But this is a case where the evidence is a little bit inconclusive, and in a situation like that where it's a drug that might help people who are facing a deadly disease and th- you know, Alzheimer's is one of the worst. It's not only, you know, event the prognosis is terminal, but it also is deteriorative, and it's devastating for patients and their families. These people have nothing to lose. And so, I would let the drug through, I think, and then watch how it performs over the next couple of years. They could always revoke the approval in two years, you know? In other words, almost consider the usage of the drug over the next couple of years as a stage four trial. You know, the- the one group who's not complaining about this are patients. I mean, Alzheimer's patients want the ability to test this.... and generally speaking, I think we should give people who are facing, again, a terminal prognosis, the ability to try these drugs.

Jason Calacanis 18:26 Yeah. A- and, and Freeberg, correct me if I'm wrong. The reason... Or maybe, Chamath, you're better for this, but just looking at the economics of this, taking care of somebody with Alzheimer's and if you... and it starts to hit people at 65 and people start living to 78, 85 years old, they need to have care. A person with Alzheimer's, the issue is not their ongoing, uh, maintenance in terms of their brain. It's their day-to-day life. They cannot be left alone. So they have to be either institutionalized or have home care. And then you're talking about 100,000 a year and, and I think Medicare and some other people pay for that. So 55K if the person can take care of themselves-

David Friedberg 19:02 That's how pricing is done, Jason. That's exactly right. Is-

Jason Calacanis 19:04 Is that how they do it?

David Friedberg 19:05 So pricing is typically done based on the long-term cost benefit of the, uh, uh, of the drug, of the, the, uh, to the, to the paying system. So, you know, they'll take a look at like, "Hey, here's how much we're gonna benefit people or benefit the paying system, therefore we can charge X dollars for getting this drug." That's why today you can go get a, um, a CAR T therapy or something, you know, some sort of therapy that, that, that is gonna be highly efficacious and they'll charge you a million dollars or genetic, um... There, there, there's a few that are getting approved now, uh, for genetic diseases and that, you know, million dollar one-time fee 'cause you get, you get the treatment once. It costs, you know, technically nothing. The cogs are zero to make this stuff. You get that treatment, they charge you a million dollars because the long-term care of the progression of that disease is so high that they can economically rationalize that. Um, and so, yeah.

Jason Calacanis 19:53 Is that ethical or moral?

David Sacks 19:55 On, on the pricing 'cause, 'cause clarify one thing?

David Friedberg 19:57 Yeah.

David Sacks 19:57 So we're, we're talking about it at $56,000 a year. That is true, but it's basically $4,800 per shot. You get a shot once per month and that costs $4,800. And so you multiply that by 12 and you get to the 56,000 number. Now it's $4,800 to get this monthly shot, an outrageous amount of money for what could be a breakthrough Alzheimer's treatment. I don't necessarily think so. I mean, that is the sticker price. That's not what the patient is gonna pay, right? The patient's gonna pay the $10,000 copay, but divide that by 12, you're gonna pay about $850 per month for what could be a breakthrough treatment. I mean, to me the real issue is whether it works. And since it's... since there are some positive indications, but it's inconclusive, inconclusive, I would say tie goes to the runner here. Meaning you can try it and let's revisit it in two years and see if it works.

Jason Calacanis 20:49 But, but it wasn't a tie as far as scientists were concerned. So what is the disconnect there, Chamath?

Chamath Palihapitiya 20:56 Because I think what they were looking for-

Jason Calacanis 20:58 They were unanimous.

Chamath Palihapitiya 20:58 They... No, but they were looking for a causal link. And the problem is at some point along the way over the last few years, we started with the hypothesis that amyloid plaque was causal of Alzheimer's, and then we moved to a place where there was some correlation, and then we moved to a place where we said, "Actually, it may not do much of anything." But I actually agree with Sax. I think the FDA did something really novel here, which is that they applied an extremely aggressive free market approach to a market that has been completely bereft of solutions. And so if you can create 100 billion dollar market overnight, I think it stands to reason that a lot of people will look at the increase in Biogen's market cap and the profits that Biogen can make over the next 10 or 15 years and say, "I will attack that and do that cheaper, faster, better." It happens in every other market. I think the point here is that it probably shouldn't have been the FDA's role to create competition. But for whatever reason, whether it's how the capital markets in biotechnology are structured, or the way that, you know, Medicare Part B kind of works and creates these odd incentives, we are where we are. And so I tend to think that it's probably better that this drug was approved. I also agree with Sax that in general, I think as long as you have a reasonably defensible safety study, we should probably be in the business of getting more drugs approved faster. And the reason is that it allows smart, clever, hardworking people to connect the dots in ways that right now we don't know anything about. Like, just like, you know, a ra- a random factoid to prove this point. Like, when you look inside, for example, of who wins a Nobel Prize, right? Particularly in the fields of biology and chemistry, et cetera, you have people that are in their 60s and 70s that win awards for research done in their 20s and 30s. So clearly people at some point when they are somewhat less jaded, you know, and somewhat more naive maybe, have the ability to really transform the world for all of us. And if you can marry that to economic incentives, so folks that understand the markets can also be along for that ride, that in my mind, I think is generally better than a nanny state of babysitters.

Jason Calacanis 23:12 I agree with that point. I, I think, I, I think that, that... Let me frame this to you in a question for me.

David Friedberg 23:16 Yeah.

Jason Calacanis 23:17 Uh, of those scientists on that board who voted against this, if their parent wa- or spouse, God forbid, were suffering from Alzheimer's, how many of them would take the drug out of the 10?

David Friedberg 23:26 Well, this is my point is, and, and it's a point I was gonna make, which is everyone wants that lottery ticket. There's no downside and only upside because you're not paying for the lottery ticket. And so, um, the way the system works in terms of paying right now, as a patient and as a doctor, I have no incentive to manage cost down, right? All, all I have is opportunity in front of me. And so as we add more opportunities, we give everyone the ability to have a lottery ticket that potentially could cure their disease or could... or, you know, make them kind of live forever or have a healthier state of being, uh, you know, we are gonna see this proliferation of approvals that end up costing all of us so much that the inflation that we've already experienced in terms of paying costs for healthcare continues to climb. So the challenge is like, you know, i- i- i- if we are gonna continue to operate a socialized model of medicine or even partially socialize where the government's paying some amount of, of the, uh, of the premium or employers are paying part of the premium, where the individual that's getting the treatment doesn't bear the cost, you're gonna end up seeing everything inflate because you're creating this incentive now. Companies are gonna rush in, they're gonna try and get 10 things approved. Everyone's gonna be taking an Alzheimer's drug in a couple of years because there's gonna be so many available on the market, and none of them may actually be curing Alzheimer's. Maybe 10% of people get cured, 90% don't. But the cost is gonna be millions of dollars, you know, per person for these treatments. And everyone pays that. I'm not saying that's necessarily a bad thing. You know, we need to have a proliferation of innovation, certainly. The challenge is in the interim period, the inflation we've already experienced in healthcare, which is just extraordinary, will continue to climb, um, if, you know, we don't regulate, uh, the actual market for pricing on these things, um, and on the other side, we pay all the bills or there's some socialized, uh, pool to pay all the bills. Uh, you can't have it both ways.

Chamath Palihapitiya 25:12 I'll give you the other side of the argument as well, which, um-... is the reason why this could be so valuable, again, if you look back to what Jane Lockwood did, um-

Jason Calacanis 25:23 With- was it muscular, muscular dystro... Yeah.

Chamath Palihapitiya 25:26 In Duchenne muscular dystrophy, you know, for... Or Janet, Janet Woodcock. Sorry, pardon me. Janet Woodcock. Um, but if you, if you know anybody whose child has Duchenne muscular dystrophy, my gosh, what an incredibly debilitating disease. You would not want anybody in the world to have it. And again, by approving that drug, what she did, I think is something pretty incredible because now there are of- the, the, the number of companies that have, again, come after that market opportunity because she helped define a market, four of them are already public, just to give you a sense of it, and they're, you know. And so, the odds, at least numerically, are greater today than they were four years ago. And that was a n- you know, potentially non-efficacious drug that, that frankly, though, had a, had a legitimate safety study.

Jason Calacanis 26:13 To your guests, Chamath and, and Friedberg, 10 out of 10 of those people on the FDA board would have a spouse or a loved one take it because there's no downside. If you look at Biogen's market cap, just to wrap up here, uh, they added $20 billion (laughs) in market cap in the five days since, you know, this announcement happened. So, in terms of incentives, you gotta think every other drug company is saying, "Hey, I've got something that kinda sorta works and it's really expensive. Can I get a free ticket now? Can I do this compassionate thing?"

Chamath Palihapitiya 26:40 So, hopefully, it's just the former thing, kinda sorta works, and then, you know-

Jason Calacanis 26:43 Yeah.

Chamath Palihapitiya 26:43 ... they go from there.

Jason Calacanis 26:44 All right. Uh, moving on to our, uh,

Jason Calacanis 26:46 next topic. Bezos has decided that he will be the first billionaire in space. Uh, three people are gonna be going to "space" in quotes on an 11-minute flight on July 20th, 2021. Uh, Jeff Bezos in a promotional video on his Instagram, uh, sprung this on his best friend, his bestie, his brother Mark, who agreed to go with him, and there's bidding of $3 million, I guess, to go on Blue Origin.

Chamath Palihapitiya 27:11 It's up to 4.8, Jay.

Jason Calacanis 27:13 Oh, my gosh. 4.8 now-

Chamath Palihapitiya 27:14 Think so.

Jason Calacanis 27:15 ... uh, on Blue Origin's site, uh, and, uh, just doing back of the envelope math, which I, which I did, uh, uh, last week when I heard this announcement, 600 people or so have gone to space. Some of them have gone multiple times. Blue Origin's done 20 some odd flights, two of which went south and probably would have exi- resulted in death, so I think 5 to 10% of Blue Origin's fi- flights would have killed, uh, uh-

Chamath Palihapitiya 27:37 (laughs)

Jason Calacanis 27:37 ... sadly, Bezos if he had been on them. But obviously, they've made progress since then. Two of the 120 plus flights that SpaceX have done, but none in the last six years, um, have had an accident. Uh, and obviously, uh, Virgin Galactic had one tragic accident as well. So is this a wise idea? And where would we put the percentage risk of ruin/fatality on this?

David Friedberg 27:59 I just, I just wanna, I just wanna do statistics for a second, Jason?

Jason Calacanis 28:02 Sure. Yeah.

David Friedberg 28:03 Just because there were Blue Origin accidents in the past doesn't necessarily mean that it has any bearing in predicting the future likelihood of there being an accident because the data from the past is from different machines and different-

Jason Calacanis 28:17 Of course. Yeah.

David Friedberg 28:17 ... techniques and different processes.

Jason Calacanis 28:19 Yeah.

David Friedberg 28:19 So I don't, I don't think, you know, to your tweet and the controversy with your tweet and, you know, your, your point now, I don't think you can necessarily look at the past. This is much more of a kinda-

Jason Calacanis 28:27 Deterministic.

David Friedberg 28:28 ... deterministic conversation about like, "Hey, look, here are the things we have done-"

Jason Calacanis 28:30 Yeah.

David Friedberg 28:30 "... with our systems, and here's why we have a high confidence in this thing, you know, kinda working, but..."

Jason Calacanis 28:34 Which is obviously why people don't go on the first 50 rockets (laughs) or first 20 rockets, whatever it happens to be. But statistically, it's, it's not zero. So, I guess the question is, is this a w- a wise move? And where would you actually put the odds at?

Chamath Palihapitiya 28:46 But it could, it could very well be zero now.

David Friedberg 28:48 C- yeah. You don't know, right? We don't know how well their safety systems have been developed and we don't know how, you know, the... I, I don't know anything about this, but I'm pretty sure that if Bezos is go... He's a pretty smart guy. He's not going in anything that's gonna have some high, some, some even nominal likelihood of, of death, right? Like...

Chamath Palihapitiya 29:02 And he knows probabilities, and he's been there in the last 15 test flights, and he's seen the data, and he's probably seen-

David Friedberg 29:09 Totally.

Chamath Palihapitiya 29:09 ... a string of nominal flights. And at some point, you just feel like, you know, "Okay, this is, this is really dialed in here."

David Friedberg 29:16 My prediction is Bezos is gonna come back and he's gonna announce that he's gonna be the CEO of Blue Origin. I think this is what he does.

Jason Calacanis 29:22 He's going all in on Blue Origin, for sure.

David Friedberg 29:23 I, I think this is what he wants to do with the rest of his life. I think it's been pretty clear that this is such a passion for him. And like, you know, he's, he's got the, the world's greatest money machine ever. It's a flywheel. It'll run as a monopoly for decades. He can do whatever he wants to do now. And so, when he takes a look at this, what's greater after you've conquered Earth than leaving Earth and moving on? So, to, to me, this seems to be so intellectually interesting to him and, um, and so kind of existentially interesting. My guess is he goes in full time on Blue Origin now that he's kinda transitioned to the chairman role, and he's kinda been pretty public about it.

Chamath Palihapitiya 29:53 100%. 100%.

Jason Calacanis 29:55 David?

David Sacks 29:56 All right.

Jason Calacanis 29:56 You're a conservative and typically very scared of anything dangerous. Go ahead.

David Sacks 29:59 (laughs)

Jason Calacanis 29:59 What is your prediction?

David Friedberg 30:00 (laughs)

David Sacks 30:01 Well, I'll give Bezos credit for dogfooding his own product, but, um, to, to be ho- I would take a contrarian view overall. Um, you know, I think sometimes people get so rich and so powerful that there's nobody around them to tell them when they have a bad idea. And quite frankly, I think this is a brain fart that the people around him are telling him smells like perfume, and they should be telling him, "Dude, what are you thinking?" You know?

Jason Calacanis 30:27 (laughs)

David Sacks 30:27 If, if J Cal said to me he was going up on a rocket, I'd be like, "Dude, you got at least 30 good years here." You know?

Jason Calacanis 30:34 Yeah.

David Sacks 30:34 And Bes- Bezos...

Jason Calacanis 30:36 Don't screw up the podcast. (laughs)

David Sacks 30:37 Yeah.

Jason Calacanis 30:37 We need the host. (laughs)

David Sacks 30:38 We need you down here. Like, "What are you thinking?"

Jason Calacanis 30:40 (laughs)

David Sacks 30:41 Bezos has got like 170 billion after the divorce. He's, you know, still a young guy and he's gonna risk it to go up in space for like three minutes. Um, I mean, now, yeah, they've, this is the, they, they have sent the crash test dummy up there successfully 15 times, but this is the first manned flight, the first flight with humans on it. He's determined to be on it. If I were his advisor, I would say, put a GoPro on the head of the crash test dummy and experience it in virtual reality.

Jason Calacanis 31:12 Put a VR headset on. (laughs)

David Sacks 31:13 Yeah, put a VR headset on it.

Jason Calacanis 31:15 And save me. No risk of ruin.

David Sacks 31:16 And say, "Dave, exactly what are you thinking?"

Jason Calacanis 31:18 Yeah, I mean, if this was a stunt that, you know, um, uh, Richard Branson did early in his career. Remember, he did the ballooning things and he was trying to become a billionaire and trying to get excitement around his brand. But I- I think this is totally unnecessary and it is not a r- the r- the risk of going here is not zero. It might be close to zero, but it's definitely not zero. I mean-

David Sacks 31:39 Well, now Branson's-

Jason Calacanis 31:40 ... I don't know.

David Sacks 31:40 ... trying to beat Bezos into space, so he's announced he's gonna go up too and, you know. So these guys are both, um, being daredevils a little bit.

David Friedberg 31:49 Is he going up on the, um, uh, s- galactic, uh, Timothée? What's he do- how's he going up to space? Is that a Virgin Galactic flight? Timothée, what are you-

Chamath Palihapitiya 31:59 I'm there? What do you want me to tell you? Of course, uh, my- of course I'm here.

Jason Calacanis 32:02 (laughs)

David Friedberg 32:02 (laughs)

Chamath Palihapitiya 32:02 I'm also chairman of the board. What do you want me to tell you?

Jason Calacanis 32:03 Oh, wait a second. You have a company you're on the board of that does space flight.

David Friedberg 32:07 I didn't know if it was in public. Is it a... you're saying... sorry, did you say it was a public thing?

Chamath Palihapitiya 32:11 Of course. No, I said it i- Virgin Galactic is a public company of which I'm chairman of said board of directors. I'm not saying anything about anything.

Jason Calacanis 32:17 (laughs)

David Sacks 32:18 Branson is- is trying to beat Bezos into space by going up before him. There is now a space race going on and you have to wonder... and then meanwhile, Elon... I- I wonder how much of this is because of Bezos' pride, because Elon tweeted that Bezos couldn't get it up because his rocket, Bezos' rocket, is only r-

Jason Calacanis 32:39 Doesn't go to actual space.

David Sacks 32:40 Yeah, it goes to, like-

Jason Calacanis 32:41 (laughs)

David Sacks 32:41 ... suborbital, like low Earth orbit-

Jason Calacanis 32:43 Yeah.

David Sacks 32:43 ... you know, space X-

Jason Calacanis 32:44 I mean, he gets it halfway up.

David Sacks 32:45 (laughs)

Jason Calacanis 32:47 I think he's somewhere in the 50 to 70 range. I think if he-

David Sacks 32:49 Right. How much, how much of this-

Jason Calacanis 32:50 ... if he had a little blue pill-

David Sacks 32:52 (laughs)

Jason Calacanis 32:52 ... Blue Origin, if he got the little Blue Origin pill, he might get to a 100%.

David Friedberg 32:56 How great is this space race, by the way? This is so freaking cool, right? I mean, like, the government comes in-

Chamath Palihapitiya 33:01 It is pretty amazing.

David Friedberg 33:02 I mean, the government creates all these great contract incentives. This is a, this is a good role for government, right? They come in, they create all these contract incentives. SpaceX is making all this money from the US government and then they take that money and they invest in creating this space race, this industry-

Chamath Palihapitiya 33:14 Yeah.

David Friedberg 33:14 ... that, you know, could absolutely transform humanity for the centuries to come. Uh, it- it really speaks to kind of like how semiconductors and computing came out of the space race of the mid 20th century, and we could see this n- kind of like next industrial age arise for s- the space industrial age, uh, because of these incentives that have been created by the government. It seems to me like there's a good role here the government's played and-

Chamath Palihapitiya 33:36 Huge.

David Friedberg 33:36 ... this is super, super cool, man.

Jason Calacanis 33:38 Well, isn't this in-

Chamath Palihapitiya 33:38 Huge.

Jason Calacanis 33:38 ... stark contrast to the government doing the space shuttle program, which if you look at the fatalities, there have been about 30 fatalities in going to space, 14 of which were on the two shuttles; one that tragically blew up on the way up and one that disintegrated on the way down in our childhoods in the '80s, I believe, um, for most of us.

Chamath Palihapitiya 33:56 And it was also incredibly expensive. Look, this is privatization for the win, right? Instead of having-

David Friedberg 34:01 Right.

Chamath Palihapitiya 34:01 ... the government doing-

David Friedberg 34:03 Right.

Chamath Palihapitiya 34:03 ... all the R&D, and the government is good at some things, but R&D is not one of them.

David Friedberg 34:08 Right.

Chamath Palihapitiya 34:08 So you, uh, you let the private sector do the R&D and then NASA's contracting with these private sector companies. The government is a phenomenal balance sheet.

David Friedberg 34:17 Yeah. Sax, how do you feel about the government funding this work, right? Because they're not doing the work, but it's the taxpayers' money that's going to SpaceX and others for contract services that ultimately fuels this innovation engine. Do you feel like this is a good role for government spending, is to kind of fuel these, these-

David Sacks 34:32 Well, the question, the, the question for government as a policy matter is whether we wanna go to space. And then the question is, how do we get there? I definitely-

David Friedberg 34:39 Right.

David Sacks 34:39 ... believe that if we believe it's important to have a space station to get to space, to kind of advance the frontiers of, you know, humankind-

David Friedberg 34:49 Yeah.

David Sacks 34:50 ... then, then, then it's a, it's a worthy program to fund. And then the question is, well, how do you get there? And I think, you know, funding SpaceX and these... or it's not funding, it's contracts with SpaceX to deliver the product is a much better idea than having the government try and develop it itself.

David Friedberg 35:05 Right.

Jason Calacanis 35:06 Yeah, because those are milestone based with some level of competition. Even if people might complain about the bidding process, et cetera, the contract is for a duration of time and for deliverables. If the deliverables are not met or the contract expires, then we start the whole process over again. And this, correct me if I'm wrong, is a must do for us, because we cannot let the communists and authoritarians own space. We have no choice, being the democratic west, of owning space and getting there before them and dominating space.

Chamath Palihapitiya 35:36 Nobody can own space, but I think the-

Jason Calacanis 35:38 (laughs)

Chamath Palihapitiya 35:38 ... United States is, uh-

Jason Calacanis 35:40 Yeah. Okay, sure.

Chamath Palihapitiya 35:40 ... an incredible balance sheet.

Jason Calacanis 35:42 Nobody can own space? I mean, are you kidding me? Wh- what if somebody gets up there who decides to put nuclear missiles up there and decides anybody else who puts satellites up there, we're gonna just nuke them and laser them?

Chamath Palihapitiya 35:53 You're not gonna own it.

David Sacks 35:54 You don't even need a nuke, quite frankly. You could drop a tungsten rod from space, okay? Just a, like a giant steel rod, and by the time it hits the ground, it's going so fast that it basically can blow up or assassinate anybody. I mean-

Jason Calacanis 36:09 This is what we're talking about-

David Friedberg 36:09 What the hell-

Jason Calacanis 36:10 Is this-

David Friedberg 36:10 ... are the two of you ta- I mean, have, have the two of you become-

Chamath Palihapitiya 36:12 (laughs)

David Sacks 36:12 No, this is real.

David Friedberg 36:14 (laughs)

Chamath Palihapitiya 36:14 Like, the two of you are like the, like Bea Arthur and the Golden Girls.

Jason Calacanis 36:17 (laughs)

Chamath Palihapitiya 36:18 Jesus Christ.

Jason Calacanis 36:19 Or like the guys in The Muppets on the, uh-

Chamath Palihapitiya 36:20 Ruma Planetone and-

Jason Calacanis 36:21 ... balconies d'you know Bea Arthur here blathering on.

David Sacks 36:23 No, the-

Chamath Palihapitiya 36:23 Listen-

David Sacks 36:23 ... military applications of space are very important-

Jason Calacanis 36:25 Uh, have you not seen the South China Seas? Have you not seen the Chinese putting rockets over Taiwan in military exercises? These people are not-

Chamath Palihapitiya 36:31 Jason-

Jason Calacanis 36:32 ... playing games.

Chamath Palihapitiya 36:33 But I... K- Jason, I understand. Nobody... No, uh, all I'm saying is, there's no owning it, okay? It's too vast. It's effectively infinite. You can't own it, okay?

Jason Calacanis 36:43 (laughs)

Chamath Palihapitiya 36:43 You can have certain areas where maybe-

Jason Calacanis 36:44 You can dominate it.

Chamath Palihapitiya 36:46 ... you... (laughs) you can't-

David Friedberg 36:47 Yes. He dominates space.

Jason Calacanis 36:48 Of course you can dominate space.

David Sacks 36:49 Now it's Jason and-

Jason Calacanis 36:50 If they go up there and they don't play by the rules... I mean, did you guys not see what happened with Hitler in Europe?

Chamath Palihapitiya 36:54 (laughs)

Jason Calacanis 36:54 He dominated Europe for a-

Chamath Palihapitiya 36:55 Jason-

Jason Calacanis 36:55 ... number of years.

Chamath Palihapitiya 36:57 Jason, Jason, listen. Of a- of all the parts of space that you can dominate, maybe the one planet is Uranus.

Jason Calacanis 37:03 (laughs)

Chamath Palihapitiya 37:03 Other than that, there's nothing that you can... (laughs)

David Friedberg 37:06 Well-

Jason Calacanis 37:06 You guys are so naive about the intentions-

Chamath Palihapitiya 37:10 (laughs)

Jason Calacanis 37:10 ... of Russia and China, it is phenomenal.

Chamath Palihapitiya 37:13 (laughs) Oh.

Jason Calacanis 37:13 They have 100-year plans to dominate humanity, and they are willing to put millions of people into concentration camps. They have no problem going to space and deciding, we're gonna own the satellites and we're gonna knock other satellites down from the sky.

David Friedberg 37:26 I can't believe... I can't believe you were so anti-Trump and, and, and, and the things you say.

Chamath Palihapitiya 37:30 It's unbelievable.

David Friedberg 37:30 It's just you're, you're so incredible, yeah.

Chamath Palihapitiya 37:31 It's unbelievable. You're so funny. Can I just say one thing? I think, I think back to what we said before, the US is an incredible balance sheet and, uh, what Friedberg said is so true, which is like coming out of the Apollo program, we really created so much technological innovation. It propelled the US forward. We unfortunately gave a lot of it up. But-... hopefully this time around, we can do it again. And by the way, just last week, I guess it was, or I guess it was last week, um, or a month ago, you know, where we, we got that CHIPS Act in play, which is a quarter trillion dollars, you know, for semiconductors and other things. Um, so we're slowly getting there. But this is where the US can do a lot of good, which is just to act as a funding source and then let private markets kinda take over the rest, right?

David Friedberg 38:10 By the way, we've talked about this on the past couple of podcasts, but there is, uh, I think $90 billion earmarked in this new bill for enabling American manufacturing progress. And so it, it will be through a similar sort of funding mechanism, it looks like, as what we're seeing here. It could be a, a fantastic boon for innovation and, um, and infrastructure.

Jason Calacanis 38:28 Yeah. I was about to say, what other category should we model this after, Zach? Should we do this for nuclear? Should we do it for education? For housing?

David Sacks 38:34 Before we move on, I mean, look, J-Cal, I wanna come to your defense on this point because I think it's, it's, um... because I think it's just wrong to say that there aren't, like, vast and important military applications of space. Um, the fact of the matter is, you look at the history of warfare, it's critical to have the high ground. Whoever has the high ground ultimately wins the war. This is why-

Jason Calacanis 38:55 The Greeks.

David Sacks 38:55 ... the first thing we do... Oh, the Greeks? The Greeks had the high ground.

Jason Calacanis 38:58 Yeah. We always have the high ground. Now who lives, lives, lives, lives-

Chamath Palihapitiya 39:00 Says the guy-

David Sacks 39:01 Hold on.

Chamath Palihapitiya 39:01 ... that's 5'3".

Narrator 39:02 (laughs)

Chamath Palihapitiya 39:02 Says the guy that's 5'3".

David Sacks 39:04 Okay. Let me finish the point here. Let me finish-

Jason Calacanis 39:06 You should see me with a spear. You should see me-

David Sacks 39:07 Let me finish.

Jason Calacanis 39:07 ... with a spear and a shield or a mace. (laughs)

David Sacks 39:08 Let me, let me finish the point.

Narrator 39:09 Yeah.

David Sacks 39:09 The first thing we do in a, in a war or a conflict is establish total air superiority. It's the reason why our infantry doesn't take massive losses. Um, it's, you know, we wanna establish, you know, artillery, um, that, that s- sort of protects the infantry. Look, the future artillery is gonna be from space. It is the ultimate high ground. Uh, it i-... I agree with J-Cal. It's naive to think that the other side, that, that other powers are not pursuing military applications. We have to have the ability to defend ourselves against space-based attacks and to have those, those abilities ourselves, those capabilities. And so that is part of what's factoring in here with the space race.

Chamath Palihapitiya 39:50 I get it. I get it. I know what you guys want, a giant laser.

Narrator 39:55 (laughs)

David Sacks 39:55 (laughs)

Jason Calacanis 39:55 You want a giant laser in space? (laughs)

David Sacks 39:57 I don't, I don't think it has to be a laser. I think it can be low-tech, you know?

Jason Calacanis 40:01 Well, I mean, just Tungsten rock-

Narrator 40:02 (laughs)

David Sacks 40:02 You can rock.

Chamath Palihapitiya 40:02 (laughs)

Jason Calacanis 40:02 If you just literally shot ball bearings-

David Sacks 40:04 You could.

Jason Calacanis 40:04 ... at other satellites, it would rip through them, right? I mean...

David Friedberg 40:07 The Tungsten rock program's an actual program, right, Zach?

Jason Calacanis 40:09 I know.

David Friedberg 40:09 It's a, it's a... Yeah, yeah. It's a funded military program.

Chamath Palihapitiya 40:12 Oh, my God.

David Sacks 40:13 By the time you... If you drop something from space, it hits the ground at, like, mach 35. Just, just to understand.

Chamath Palihapitiya 40:17 Phil Hellmuth has invaded our podcast and taken-

Narrator 40:19 (laughs)

Chamath Palihapitiya 40:19 ... the body of David Sacks.

Narrator 40:20 (laughs)

David Sacks 40:20 (laughs)

Jason Calacanis 40:22 No, uh, but in all seriousness, this, um, program that we're seeing great success with inspiring the greatest, you know, entrepreneurs of our time to go after big prizes like this, could we not do this with nuclear energy, housing, and education? Or are... is that kinda out of the question because of unions?

David Friedberg 40:39 What do you think... L- let me just point out, by the way, the things you just pointed out are the things that are now most regulated. And it's the regulatory burden which ultimately stifles innovation. Whereas in this case, we're enabling innovation without putting a lot of regulatory burden on space at this stage, right? And so as soon as ITAR, which is one of these regulatory bodies, starts to step in, and maybe we start to limit things that can be done in space and so on and so forth, you may see things kinda get damaged, like nuclear energy got damaged. Because the fear of the downside ends up, um, you know, kind of, uh, counterbalancing the opportunity of the upside. And it's something we've seen time and time again with every innovation cycle in every industry. Um, and it... You know, you're right. Right now, we're in this opportunistic moment in the space race. But as soon as kind of the regulatory burden becomes heavy, you're, you're gonna see the same thing that happened with housing, the same thing that happened with nuclear energy, and all the other kind of innovation cycles that, that, that kinda got stifled, uh, not just in the US, but globally.

Jason Calacanis 41:34 Yeah. So we don't think for nuclear, we'll see this happening anytime soon. Man, that would be an incredible, uh...

David Sacks 41:41 Nobody, nobody wants nuclear. It's... There's a huge NIMBY problem with nuclear, right? Which is, who really wants a nuclear power plant in their backyard? I mean, not gonna happen. I don't think it's realistic. It's, it's one of these ideas that, you know, sounds great in theory, but then in practice, no one's willing to raise their hand and say, "I want that in my city."

Jason Calacanis 41:58 I, I have a really easy solution for that. Why don't you just make anybody who has to live within X zone of a nuclear power plant have a tax credit of a million dollars a year and say-

David Sacks 42:06 They still don't want it. Look, I think the future of alternative energy is solar. Um, it's, it's an inexhaustible supply. The cost of solar panels keeps-

Jason Calacanis 42:16 It's not gonna be enough. We can't-

David Sacks 42:17 Hold on, the cost of solar panels-

Jason Calacanis 42:18 We can't get it out there fast enough.

David Sacks 42:19 ... keeps going down exponentially. The cost curve is going down exponentially. And look, ultimately, all life on this planet is solar-powered, right? Because fossil fuels come from the remains of dead dinosaurs who were ape plants, and plants are solar-powered. So ultimately, the sun is the ultimate source of energy, not wind, not nuclear, not windmills.

David Friedberg 42:40 Well, geothermal.

David Sacks 42:41 It's gonna be solar.

David Friedberg 42:42 Geothermal capacity is still, like, 100 billion years, uh, based on our current, um, uh, consumption rate. But, uh, uh, there, there's limited, uh, research relative to the opportunity in geothermal. But yeah, totally

David Friedberg 42:55 agree with you, Zach.

Jason Calacanis 42:55 In a microcosm of, uh, you know, the reopening of the pandemic, we've been at record low caseloads, um, and deaths are so low now from, uh, COVID-19 in the low hundreds that it's probably hard to know, Friedberg, you tell me if I'm wrong or right, if people are, of those 300 or 400 people dying a day, that's with COVID, from COVID, et cetera. Um, but anybody... I think it's intellectually correct to say that anybody who... over the age of 12 who wants a vaccine can get it. And anybody who's in a high-risk group certainly now has had over six months to, to get a vaccine. So we're basically done. And now the question becomes, what happens to society? Are we gonna go back to work? Uh, Apple employees, uh, wrote a letter, um, about Apple's, uh, demand. I'm using air quotes here, uh, that people come back to work three days a week. Um, Amazon just adjusted their return-to-work policy, uh, backing off their claim of, uh, in March that they're gonna return to an office-centric, uh, culture. They announced that employees can do two days remote, three days in the office. That seems to be the three-for-two, um-... Google has a similar policy. Um, they're expecting people to return to the office three days a week in September. Twitter said you can work from home forever 'cause Jack, uh, is an introvert and doesn't wanna (laughs) come back to work, I guess. Uh, Facebook employees either need approval to continue to work from home full time, or they will need to be back in the office 50% of the time. But Zuckerberg personally, uh, said that he is embracing remote work. Here's the quote. "I've found that working remotely has given me more space for long-term thinking and helped me spend more time with my family, which has made me happier and more productive at work." Which I guess is either devastating for real estate or this is a great negotiation that's going on. You had some choice quotes about Apple employees doing three, um, uh, letters/uh-

Chamath Palihapitiya 44:50 It's unbelievable.

Jason Calacanis 44:50 ... petitions in three weeks?

David Sacks 44:51 Yeah.

Jason Calacanis 44:52 Saks?

David Sacks 44:52 Yeah. So, look, I- i, um, I- I don't have a problem with the work-from-home policy. My- my problem is with the fact that the Apple employees, um, keep doing what they do, which is sign these petitions, and of course, the- it's all this snowflake language around, "We're not being listened to. We're not being heard." You know? And then they wanna dictate to management, uh, the way that the company should work. And so they've circulated petitions to get other employees fired. They circulated petitions to make Tim Cook take a stance against Israel. Now they're circulating a petition on work from home. And of course, and, uh, that is what Apple employees do. And Apple management, uh, is doing what it seems to do, which is cave to these petitions every time. And so they're in an infinite loop where the employees have realized they can run the company by forming these- these sort of boycotts and petition mobs. And it's working. Now my- again, my objection is not to work from home. Most of my portfolio companies are now working from home or fully distributed. They're hiring employees everywhere. It's been very liberating for them to be able to hire talent anywhere in the world. And so I think the work-from-home question, the- the reason why these big companies are struggling with it, I think, quite frankly, is just because this is about their ability to supervise their employees. I think that work from home makes the best employees better, but it allows the worst employees to hide. And I think what this really comes down to is a fear on the part of Apple and Google and Facebook. They've got thousands of employees who aren't really working and are gonna be able to completely hide.

Jason Calacanis 46:22 Mm-hmm.

David Sacks 46:23 And th- and I think that's what this policy comes down to.

Jason Calacanis 46:24 So that's a failure of management or just the nature of work from home?

David Sacks 46:27 I think it's the nature of these gigantic companies where they've got-

Jason Calacanis 46:30 Ah.

David Sacks 46:30 ... so many employees that they're trying to figure out how to supervise them all and make sure they're actually doing work. There's this funny tweet that's going around. I don't know if it's true or not, but it got retweeted, about somebody saying that, "I've- I've gotten six jobs during the pandemic. They're all work from home and I'm waiting to get fired from them for, you know, people realizing I'm not doing anything." And so I think this work-from-home controversy ultimately is about the ability of these large companies to supervise a workforce that they don't know what they're doing, if anything.

Jason Calacanis 47:00 Oh my god, what a brilliant idea.

Chamath Palihapitiya 47:02 The big unsolved problem in the pandemic f- with respect to work from home is, how do you onboard new people? In my opinion. Like, if you have an established company with established people where everybody knows each other, it seems, like, uh, all positive to be able to work from home because there's trust, there's decorum, there's social norms. There's all these things that were established together. But what happens when all of a sudden you introduce one, two, three, four, five, 500 new people into the mix? How do you onboard these folks? How do you get... And I think that's not a solved problem. And until you do that, I'm not sure that work from home will be as effective as it can be because I think you'll just get a lot of people that- that, uh, languish a little bit as they switch jobs. Now, maybe what that means is they'll switch jobs less because they'll just say, "Actually, this is net better. My crappy job got a little bit better, so there's no reason to move." The- y- on your point of, uh, commercial real estate, J-Cal, I actually think it just brings the utilization down, but I'm not sure it destroys it because I think people need the phy- physical plant. Now, maybe over time, they'll get much smarter, um, about getting smaller spaces and having flex spaces, so like things like WeWork do better. Um, because then you use that for overflow space or that's how you- how you actually have a primary outfit. Um, but yeah, those are my thoughts.

Jason Calacanis 48:17 Friedberg, any thoughts?

David Friedberg 48:18 I think it's gonna be hard to... What I'm hearing, I don't know if you guys s- have talked to a lot of CEOs, but I- I just hear it's kind of a little bit tough right now to find the balance of the rules around when to be in work because people have meetings, um, in the of- they'll have a meeting. 80% of the people will show up to the meeting, 20% will be remote, and then it's a huge headache for everyone to be like, "Okay, we're all in the room. We're all having a conversation. Now we gotta zoom the people in that aren't here. And this person decided not to show up today." And it's kind of become a little bit of a- a weird faux depa- or what- what's the- the- the right word?

Jason Calacanis 48:51 Faux pas.

David Friedberg 48:51 Faux pas to come into, to like-

Jason Calacanis 48:53 A fox po.

David Friedberg 48:54 Right, to- to not come into work while everyone else is meeting in person, and it's just becoming a little bit of a conflict across the organization right now. Um, there's gonna- it's gonna be sticky for a while. I'm not sure there's gonna be a great, um, solution, and it's gonna vary by company. Also, it's very different. As you guys know, when, you know, when I was single in my early 20s working at Google-

Chamath Palihapitiya 49:14 Uh-oh, here it comes.

Jason Calacanis 49:15 Uh-oh.

David Friedberg 49:16 Well, no, it was like, it was- it was going-

Chamath Palihapitiya 49:17 Whoa.

David Friedberg 49:18 ... to work was like, it's cool.

Chamath Palihapitiya 49:19 Whoop.

David Friedberg 49:19 Here's, it was like-

Chamath Palihapitiya 49:20 Whoop. Whoop.

David Friedberg 49:23 (laughs)

Chamath Palihapitiya 49:23 Whoop. Whoop.

David Sacks 49:23 (laughs)

David Friedberg 49:23 No, it was like, it was cool. Like, it was a- it was great to go to campus every day. Now that I'm married with kids, you know, like being w- being around your kids more often, you got obligations at home, it's very different, right? Your priorities change. And so when you have a diversity in the workforce of people with different home lives and so on-

Chamath Palihapitiya 49:39 What if you're married but you don't know and you have-

David Friedberg 49:42 (laughs)

Chamath Palihapitiya 49:42 ... kids but you can't remember their names? David Overdue, Saks.

David Sacks 49:46 (laughing)

Jason Calacanis 49:47 I mean, it- but at that moment in time-

David Friedberg 49:49 (laughs)

Jason Calacanis 49:49 ... correct me if I'm wrong, Friedberg, y- you know, Google was taking people out of Stanford, Harvard, MIT, whatever, and they were basically giving them another four years in college with this, like, college campus experience.

Chamath Palihapitiya 50:00 Totally.

Jason Calacanis 50:00 It's a great experience. It was fun as-

David Friedberg 50:02 A frigging- a frigging barista made your coffees. Anytime you wanted coffee, you walk over to a counter.And there's a barista and he makes you whatever you want. You get all these amazing snacks, and you go, you go down the slide to your meeting. I mean- (laughs)

David Sacks 50:13 W- when you say it was great experience, do you mean that it was, like, fun, uh, for the employees, like, it was like a fun life experience?

David Friedberg 50:20 Yes.

David Sacks 50:20 Or do you mean they actually got good work experience?

David Friedberg 50:22 Fun life experience. Yeah, yeah. It was a, it- it-

David Sacks 50:25 But, but it was, like, useless, it was useless from, like, a skills or, like, resume, like, from a, from building your career, it was useless, right?

David Friedberg 50:34 Well, the, the work itself was useful, at least for me, at least in that era at Google when it was a private company. I loved that work. It was an incredible experience for me. I made a lot of friends and, and built incredible career experience working at Google when it was a private company. Um-

David Sacks 50:47 But what about now? I mean, Google has this reputation-

David Friedberg 50:50 I've... Yeah. Yeah.

David Sacks 50:50 ... that there's thousands of employees not doing anything. It was satirized-

David Friedberg 50:53 Totally.

David Sacks 50:53 ... by, by the employees on, sitting on the roof of the show-

David Friedberg 50:56 Hulu.

David Sacks 50:56 ... Silicon Valley. Hulu. Yeah, exactly. They're just out there on-

Jason Calacanis 50:59 Hooli. Hooli.

Chamath Palihapitiya 51:00 Hooli. Hooli.

David Sacks 51:00 Yeah. So look, I mean, instead of sitting on the roof, they're gonna be sitting on their couch at home, you know?

David Friedberg 51:04 That's right. (laughs)

David Sacks 51:05 I guess, I guess it's, I guess it's an improvement. But I think that's really what it comes down to. What, what Facebook said in its statement was kinda interesting. There was a, a part in there where they kinda implied that work-from-home would be, like, a perk, you know, and that high performers would get it.

David Friedberg 51:19 Right.

David Sacks 51:20 And then low performers would have to come into the office more. And that probably is the right approach because in order to let people work from home, you have to trust them to be much more self-motivated to get their work done. And quite frankly, the employees who wanna hide, you gotta make those people come into the office you can supervise them.

Chamath Palihapitiya 51:38 It's like, it's like in jail where the good inmates get their own cell.

David Sacks 51:41 (laughs) Oh, no.

David Friedberg 51:41 Totally.

Jason Calacanis 51:41 Yeah, exactly.

David Friedberg 51:43 If you, if you

Narrator 51:43 If you can run in the yard-

David Friedberg 51:44 Yeah, if you were-

Narrator 51:45 ... you get visits, conjugal visits.

David Friedberg 51:47 If you were running a 500 to 1,000 employee SaaS company based in Silicon Valley with offices around the country or whatever, what would you do right now? What would your, your work-from-home policy be today?

David Sacks 51:58 Well, most of my companies that are in that position are going fully remote, fully distributed. And it is, and there are gonna be some challenges to be sure, but I just think it's inevitable. Now some of them, I, I, I do think there is a, a strong cultural advantage. We talked about this before. Chamath has made this point around having everyone in the same office or at least having hubs. So I am a fan of developing hubs. You might have, like, an engineering hub somewhere that, you know, and then you've got some remote engineers. You might have, like, a customer service hub. Um, I, I, I, I do think that, like, call centers, for example, you're much better off having everybody work from the same-

Jason Calacanis 52:35 Totally.

David Sacks 52:35 ... call center, uh, because that, that is, like, a total productivity job where it's about, like, how many units of work can you do within a certain amount of time. It's way easier to measure and manage that work, um, when it's all happening in one place. And, and those call centers tend to be in locations that aren't as expensive as, as the Bay Area.

David Friedberg 52:53 At Metromile, we have big, uh, customer service and claim center in Tempe, Arizona, and, um, we have gone fully, uh, remote, uh, since the pandemic, and productivity per unit, uh, per, per employee has gone up, uh, since going distributed-

Narrator 53:05 Oh.

David Friedberg 53:06 ... because it turns out that, you know, w- I'm not, I'm not gonna opine too deeply on this, but, um, you know, the, the, the throughput, uh, increases when people are kinda maybe not being distracted in the office or something. So-

Narrator 53:17 Oh, that's interesting.

David Friedberg 53:17 ... yeah, you can actually track it, and, and though, that's a very measurable job, right? So the throughput and everything can be measured. Um, so I, I would kind of make a counterpoint there that maybe we're seeing something different happen.

David Sacks 53:26 Yeah, I mean, look, you, you may be, you may be right about that. I mean, it all comes down to do you have the abilit-, do you have systems that can manage the, the sort of sprawl? And if you do, I mean, and you can really measure the output, and you can ensure the employees are delivering results, that's, it's a win-win.

Jason Calacanis 53:43 I, I created a, a super lightweight version of this, um, where s- since Slack is so dominant, I just tell people, "You, you need to have a start and end to the day so you can, like, get on with your personal life. Just at the start of the day, do an SOD, uh, in Slack in the general channel." You just say two or three bullet points of what you're working on today. And then at the end of the day, reply to that same one with your EOD, just what you got done today, and then inform your employees. And then you don't need to be managed. So if you can do that for five minutes at the start of the day and just five minutes the end of the day, and then on Friday, before you leave for the... and close up the week, give me an EOW of what you got done this week. And then on Saturdays, like today when we're taping this, I go through, have a cup of coffee, read all the EOWs, and I give feedback. And it has made it so clear who's a contributor in the company and who's not. And when I, I instituted this pre-pandemic, and I had two people quit because they were like, "I don't wanna do it." And it turned out that those people were the lowest performers.

David Sacks 54:41 I think you should call it a TPS report.

Jason Calacanis 54:44 It, it... You know, I, I-

David Sacks 54:46 (laughs)

Jason Calacanis 54:46 ... would... You could frame it as such, like micromanaging, and I said you can either frame this as micromanaging or you're setting an intention of what you're gonna do in your workout, and then you record what you did in your workout. Since I started using the Tonal system and since I started using Hydrow... I'm not advertising them here, but they both have measurements. And I w- I did 6,500 pounds on the Tonal, and I'm like, "I wanna break that record this weekend. I wanna do 7,000 pounds. I wanna do five exercises." And I went from doing three exercises, three reps, to five exercises, four reps. And, and that just-

Chamath Palihapitiya 55:18 Jason, if I-

Jason Calacanis 55:18 ... makes me wanna measure it.

Chamath Palihapitiya 55:19 ... if I, if I do /appleslices into Slack, do I get apple slices? If I willfully?

Jason Calacanis 55:24 (laughs) Absolutely, we will bring you... (laughs) You could also pick milk or chocolate milk or strawberry milk. (laughs)

David Sacks 55:29 (laughs)

Chamath Palihapitiya 55:30 What do you... What did you guys think of this press release that Salesforce sent out which said something to the effect of like, they're becoming an entirely Slack-centric company? They're gonna rebuild, I guess, the entire architecture of SFTC around, or Salesforce, around-

Jason Calacanis 55:43 Of course, we predicted-

Chamath Palihapitiya 55:44 Slack?

Jason Calacanis 55:44 ... that on the show. Slack is gonna be the, the re-... They're gonna rename Salesforce Slack.

Chamath Palihapitiya 55:48 No, but I don't really understand what that meant other than the actual headline of the statement. I'm wondering if you guys understand what it means.

David Sacks 55:54 Well, I, I think I understand what Benioff is getting at, which I saw an interview that he did recently, um, where he talked about their quarterly results, which I guess were their best ever. It was, like, a fabulous quarter for them. Um, what he talked about... Benioff is very good at connecting his products to larger societal trends. And the big trend that he's kinda hooking onto is this distributed work trend. And the way he described it is, is, you know, th- basically this is the future. Companies are trying to figure it out, but they need a saddle.... because I guess this, this is a trend that could sort of buck them off the horse. And he's trying to say that Slack is gonna be the thing that anchors your company now for this new era of remote distributed work.

Jason Calacanis 56:31 Completely.

David Sacks 56:31 I think it's kind of brilliant marketing.

Chamath Palihapitiya 56:33 Brilliant.

David Sacks 56:33 Um, yeah.

Jason Calacanis 56:34 Absolutely. I mean, there has to be-

David Sacks 56:36 He's brilliant.

Jason Calacanis 56:36 ... a there there.

Chamath Palihapitiya 56:37 He's absolutely brilliant. He has built such an incredible organization. I mean, the scale of Salesforce over these last 20 years, my gosh, he is, he is a star. Star of stars.

Jason Calacanis 56:49 I mean, and, uh, I sent you guys in the Slack the, or I sent you guys in the chat this, uh, socketsite.com, which is a cool real estate site for, uh, San Francisco that's been around for two decades, I think. Um, it's hilarious. They calculate how much open office space by how many Salesforce towers are empty in (laughs) , uh, an- it's 16 million of square feet of vacant office space now spread across, uh, San Francisco.

Chamath Palihapitiya 57:11 That's crazy.

Jason Calacanis 57:11 And this seems to me, at the same time we're having a crazy housing crisis, I don't know if you're monitoring this, but it turns out that banks and hedge funds and now Redfin and, you know, uh, Opendoor and all these companies are buying homes. Homes are getting bid up. At the same time, mortgage, uh, mortgages are at an all-time low and people are moving around and we're not constructing. So, I think we had a 60 or 70% decline in new housing, uh, being released into the market. And now we've got a, a full-blown housing crisis in the country.

Chamath Palihapitiya 57:41 I'm gonna go back, uh, out on a limb and put up my, uh, ten-year breakeven. I think this whole inflation thing is a head fake. And I think that, um, the- right now, we're in this weird position where the h- the home builders are not necessarily sure whether they're gonna rip in the capital necessary to build a bunch of homes. The reason they would slow down is if they think that inflation is coming, rates go up, mortgage rates go up, and then demand falls off. But if it turns out to be a head fake, the builders will then actually build what's necessary. And they have the capital capacity to do it, but I don't think that they've had the, the economic justification and the courage to do it. And, and in fairness to them, it's because the ten-year breakeven has gone straight up since the depths of the pandemic, which is essentially, again, just to, you know, get everybody up to speed, it's, it's how the market thinks about the future forward inflation rate. Anyways, over the last three or four months, or three or four weeks, sorry, since we talked about it, it's kind of steadily started to fall off. And I think there's a prevailing sentiment that, you know, we're gonna see some short-term spikes. We saw it this past week in CPI. Energy went bananas, right? The cost of energy, the cost of certain things. But then we're gonna get back to normal. And when we get back to normal, inflation will be okay. And I think, Jason, that's probably a solution, because if it gets, you know, if that, if that boogeyman is actually not real and, um, we put it away, then, um, uh, the builders will be back in size. And, and they'll green light a lot of projects, and I think you'll see housing supply kick back up really aggressively. That'll be good for us.

David Sacks 59:18 Yeah, two, two points there, I think. O- one i- so I, I hope Chamath is right about the long-term inflation prognosis. Um, it's been, you know, it, it, it's, it's very important for investment in growth companies, growth stocks, and high tech companies that the inflation, the long-term interest rate remains low. So I hope you're right. I think that ultimately what's happening is there's a battle going on between, um, sort of fiscal and monetary policy coming out of Washington, which is highly inflationary, and then technological deflation. So for the last 25 years, because we've had this explosion of productivity around technology, it's dr- driven down the prices of pretty much everything that's not wh- where, where the prices aren't set by the government. So healthcare, uh, universities, things like that, the prices have gone up because the government's paying for it. Everything else, the price has come down massively. So we've, we were kind of in this battle between sort of, um, government inflation and technological deflation. I don't know which one's gonna win. Um, I do think the, the sort of, the, the, the policies we're seeing, creating a lot of government debt and, uh, the Fed continuing on this never-ending QE are, are pretty scary. But in any event, I hope you're right about where this ends up. I think on the... The other point was, um, was... Sorry, where we- we were on, uh-

Jason Calacanis 1:00:36 We were talking about the housing and-

David Sacks 1:00:38 Yeah, the housing. So this is a, a really interesting sort of populist narrative that's evolving, where you've got, I mean, it's, I think both the left and the right can agree that it's a pretty scary thing that you now have major hedge funds buying up huge stocks of housing in the US, driving up prices so first-time home buyers can't buy a home. I mean, that is a very, uh, scary-

Jason Calacanis 1:01:02 It's a nightmare.

David Sacks 1:01:03 It's a nightmare. It's a nightmare trend. And I think you're seeing a reaction to it on the left that California now proposed some new policy where they want the state of California to pay for 50% of first-time home buyers' houses, which just seems insane to me. But, you know, and then on the, on the right, um, Tucker just did a segment r- coming down, attacking, uh, BlackRock and these big hedge funds for, for basically, for, for en- for driving up the prices. So I think you're gonna see a unanimity on the populist left and right, eh, in reaction to these hedge funds. But the thing that no one's really talking about that they need to be talking about is the NIMBYism. I mean, Jason, you mentioned it. The reason why we don't have enough housing is because it's too hard to build. And Chamath is right that the builders could get the capital for it, but it is too hard to get these projects approved. That is the thing we've gotta, uh, that, that is the change we gotta make.

Jason Calacanis 1:01:54 To build on that, I think what's happening now becomes the catalyst to break the NIMBYism. If y- all these BlackRocks are buying up all the homes, if young people and young families can't buy a home despite mortgage rates being ridiculously low, and despite them having the money to do it and the desire to do it, then that's going to create a massive societal upheaval, I believe. And then that's gonna either drive people to other states, like Texas is benefiting because they're pro-development. It's gonna catalyze the massive movement of people out of New York, out of California, whatever states are, are giving too much red tape. It's gonna drive people to those states because that's where the housing people is gonna be built. Or those states are gonna crack under the pressure and say, "You know what?... w- you're- we're gonna let you build in Sacramento. Uh, and, you know, you guys know, um- um, I have a- a housing company in my portfolio and they are g- they are getting absolutely deluged with people begging them to do affordable housing in different locations. And the biggest problem they're having is sorting through all the projects and what are we gonna do? Uh, but the great news is technology exists now to build modular homes in factories, like Tesla does cars, and ship them to site and take six months to a year out of the construction process. So then it just becomes a matter of regulations and which state decides that they're gonna let people buy a home for the first time. And if California doesn't let people buy a home for a first time, who's gonna pay taxes here? Wh- where's the growth gonna come from? This is gonna be a-

Chamath Palihapitiya 1:03:20 The thing about homeownership-

Jason Calacanis 1:03:20 ... this is a stall moment, I think.

Chamath Palihapitiya 1:03:22 Just- just so you know, then, the- the other- the other really terrible thing about homeownership is that it is where the preponderance of wealth creation for average Americans comes from. And so when you lock people out of homeownership, you're essentially ripping away 60 to 70% of how they're ever gonna make real wealth. And so, yet again, you exacerbate, Jason, to your point, the inequality that we have where a few folks make all the money and then everybody else, they're ch- kind of shut out from the equity market, they're shut out from private investing, and then they're shut out from owning a home. And no wonder people are pissed because it's like you throw your hands in the air and it's like-

Jason Calacanis 1:03:58 You're literally creating a revolution. You pulled up three ladders at once. You can't invest, you can't invest in private companies-

Chamath Palihapitiya 1:04:02 Tell me how I can- tell me how I can just earn some money so that I can pay for my kids to go to college, take a vacation, and have a nice life whenever. Tell me how to do it then.

Jason Calacanis 1:04:10 Yeah, 'cause look-

Chamath Palihapitiya 1:04:11 And- and nobody has a good answer.

Jason Calacanis 1:04:12 ... j- just to summarize-

Chamath Palihapitiya 1:04:12 Government doesn't have a good answer.

Jason Calacanis 1:04:14 ... you- you're- we're pulling up the ladder of homeownership. We've pulled up the ladder with the credit innovation. You can't invest in private companies. We've made higher education far too expensive. We pulled up that ladder. I mean, what's left for the average citizen to- to- to grow their wealth?

David Sacks 1:04:28 This is a crazy thing. We pull up the ladder and then in response, government creates a program to subsidize people and bail them out at the end. I mean, it doesn't make any sense. I mean, Mike Solana had a- Mike Solana had a really funny tweet about the- the California, uh, program which was, it's amazing the lengths to which people will go to avoid building new housing, you know, new supply.

Jason Calacanis 1:04:48 Yes.

David Sacks 1:04:48 It's like we subsidize home buyers for this artificial price increase we've caused by limiting the supply. All you-

Jason Calacanis 1:04:54 This is like eliminating people's, uh, student loans.

David Sacks 1:04:56 Just allow supply and demand.

Jason Calacanis 1:04:58 Yeah, just make more colleges and make them cheaper.

Chamath Palihapitiya 1:05:01 What do you guys think about this whole ProPublica, speaking of health wealth inequality, this ProPublica leak of tax records? Somebody inside the IRS, or it was hacked, we don't know-

Jason Calacanis 1:05:09 Yeah, this is clearly a person-

Chamath Palihapitiya 1:05:11 ... got ahold- got ahold of basically 3,000, uh, the- the tax records, many going back many years, of 3,000 of the wealthiest Americans. And ProPublica has slowly started to digest and- and issue, um, news reports about them. And it shows that, you know, in some years, guys like Bezos, um, paid no tax, um, whatsoever, were able to take huge deductions. You know, at one point actually, Bezos, in a year where he made, you know, kind of like billion dollars was able to essentially didn't, uh, claim he made nothing. And then made so little or made negative dollars that he got a $4,000 tax credit that's typically reserved for people, you know, people- (laughs) people who-

Jason Calacanis 1:05:51 It was a tax credit for your kids, yeah.

Chamath Palihapitiya 1:05:53 ... who are th- Yeah, it's- it's unbelievable.

Jason Calacanis 1:05:53 It's not meant for billionaires ex- essentially, but, you know, they... This was a lot... The- I think the big story here is the leak more than, uh, capital gains, how capital gains works. We all know how capital gains work. ProPublica's got an agenda obviously. This is a left-leaning, uh, investigative journalism, uh, funded by the left, uh, and donations. And, uh, they do a great job with investigations. But in this case, they're just telling everybody what we already know, which is if you have giant holdings, you can get a loan against them. Whether it's you own a home and you can get a mortgage against it or equity line, or if you own a bunch of stock, you can get a margin loan. I mean, it- it's not really news. I think this is like stirring the pot. And the big news is who- who released this data? And then, you know, there are some countries, I believe Sweden is one of them, where tax records are public.

Chamath Palihapitiya 1:06:41 They have to be published.

Jason Calacanis 1:06:42 Or at least top level. Yeah, they have to be published. And so I think the way the United States is going is we're gonna force people to publish their tax records and we're gonna force some sort of minimum, uh, for people with holdings, AKA a wealth tax. Uh, and I- I'm not saying I agree with either of those, but I think that this is the way it's going. And I- I- somebody post it to our group chat-

Chamath Palihapitiya 1:06:59 I'd be- I'd be in favor of publishing-

Jason Calacanis 1:07:00 ... 87,000 more IRS agents are coming online? So-

Chamath Palihapitiya 1:07:02 I'd- I'd be in favor of publishing tax returns. I- I have no... I- I- I- I think that that's a really good idea.

Jason Calacanis 1:07:07 As a flex, mostly? (laughs)

Chamath Palihapitiya 1:07:08 Oh, no, no. I- like I- I think it's a-

David Sacks 1:07:09 (laughs)

Chamath Palihapitiya 1:07:10 I think it's a really smart thing to do. I think, like, you would see a lot less shady behavior if you had to publish this stuff.

David Friedberg 1:07:15 When you publish your tax return, uh, Chamath, would you do it shirtless holding up your tax return in a mirror and take a selfie and then that's how you would publish it, or?

Jason Calacanis 1:07:22 Yeah. Yeah.

Chamath Palihapitiya 1:07:22 Glistening in sweat? How would you do it exactly?

David Sacks 1:07:23 No.

Chamath Palihapitiya 1:07:23 More like- more like a one tear- one tear rolling down my cheek.

David Friedberg 1:07:28 (laughs)

Jason Calacanis 1:07:29 (laughs)

David Sacks 1:07:29 (laughs)

Jason Calacanis 1:07:29 It should just be a picture of you with a wheelbarrow of cash, just you dumping it into a furnace.

David Friedberg 1:07:34 By the way, I- I- I-

Jason Calacanis 1:07:34 (laughs)

David Friedberg 1:07:35 ... I think- I think- one thing I'll say is I think these stories have highlighted just an incredible, um, uh, ability to- to shift the narrative and create a different kind of, uh, dialogue around taxation. Because, as we all know, the principle of taxation in the United States is that you are taxed on income. And income is a recognized gain, meaning when you sell an asset for cash or for some other asset, then you do-

Jason Calacanis 1:08:00 Or you do a job.

David Friedberg 1:08:01 Or you do a job and then you get paid, you get that cash that you can now go use to go buy something or to, uh, to do whatever you want to do with. That is the transaction moment that you get taxed on. And everyone's saying, "Well, this guy's a billionaire. He has these billions of dollars. He paid no taxes." He didn't necessarily make billions of dollars of income that year. His stock value may have gone up billions of dollars, but if we all taxed each other when our stock values went up each year and we didn't get a rebate when our stocks went down, people would feel pretty upset. The average American, the average person would probably feel pretty upset if they got taxed every time their s- their stock portfolio went up and then they didn't get to have a rebate when their stock portfolio went down. So the principle of taxation is such that when you sell those shares and you ultimately generate income, that's when you get taxed. But the narrative is very quickly shifting where people are like, "Oh, this guy's a billionaire."... state- stated, you know.

David Sacks 1:08:52 Right.

David Friedberg 1:08:52 He didn't pay any taxes. They don't say anything about how much income he actually made and a lot of these guys don't need income because all this-

Jason Calacanis 1:08:58 They could have a dollar salary. They p- they, like, you know-

David Friedberg 1:09:00 They, they, they, well, they effectively have a credit card. One way to think about it is wealthy people have a credit card, as Chamath pointed out, because they can buy everything on loan, they can buy everything they want on credit because down the road, everyone knows you guys have billions of dollars. When you eventually-

Jason Calacanis 1:09:12 But aren't they paying consumption taxes on those? So if they do take the billion-

David Friedberg 1:09:15 They are. And yeah, but they're-

Jason Calacanis 1:09:15 ... dollar loan and you buy a house is you're paying consumption.

David Sacks 1:09:17 By the way-

Chamath Palihapitiya 1:09:17 No, to be, to be honest with you-

David Sacks 1:09:17 So that's not on your-

Chamath Palihapitiya 1:09:18 ... it's, it's even more... It's actually even more, uh, perverted. So if you take a loan-

David Sacks 1:09:23 Mm-hmm.

Chamath Palihapitiya 1:09:23 ... and then you use that loan to