Tucker Carlson: ICE Raids, LA Riots, Strong Economic Data, Politicized Fed, War with Iran?

1. 0:00 – 4:25

   The Besties welcome Tucker Carlson!

   1. JCJason Calacanis0:00

      Can I ask you a question about the nicotine pouches?

   2. TCTucker Carlson0:03

      Yes.

   3. JCJason Calacanis0:04

      Does it melt in your mouth, or do you have to spit it out later?

   4. TCTucker Carlson0:07

      You can spit it out, you can swallow it, or you just savor it. I mean, you throw it in like, uh, you would a dip of tobacco.

   5. JCJason Calacanis0:13

      Okay.

   6. TCTucker Carlson0:13

      But you just let it sit there and then it-

   7. CPChamath Palihapitiya0:15

      (smacks lips)

   8. JCJason Calacanis0:15

      (sighs)

   9. TCTucker Carlson0:15

      ... suffuses your nervous system with life-giving nicotine.

   10. CPChamath Palihapitiya0:18

       (laughs)

   11. JCJason Calacanis0:19

       Uh-huh.

   12. TCTucker Carlson0:19

       And it, it really does feel like the hand of God is massaging you.

   13. JCJason Calacanis0:23

       But does it feel like-

   14. CPChamath Palihapitiya0:24

       (laughs)

   15. JCJason Calacanis0:24

       ... the high of smoking a cigarette?

   16. TCTucker Carlson0:26

       It's simultaneously, if you can, uh, imagine the zen paradox, higher alertness accompanied by deep relaxation.

   17. JCJason Calacanis0:36

       Mm.

   18. CPChamath Palihapitiya0:36

       Wow.

   19. TCTucker Carlson0:37

       So you, you really are... No, no, it, it's a zen experience. You are like-

   20. CPChamath Palihapitiya0:41

       Yeah.

   21. TCTucker Carlson0:41

       ... catlike in your readiness-

   22. CPChamath Palihapitiya0:43

       (laughs)

   23. TCTucker Carlson0:43

       ... but you're fully relaxed.

   24. JCJason Calacanis0:46

       And how long does it last?

   25. TCTucker Carlson0:47

       I always have one going. Sometimes if things are, you know, if I need it, I'll, I'll put another one in. So I've got-

   26. JCJason Calacanis0:53

       Mm.

   27. TCTucker Carlson0:53

       ... 18 milligrams of nicotine, but that gives me an unfair advantage.

   28. JCJason Calacanis0:57

       You're banging 18 milligrams? Woo, that's impressive, bro.

   29. TCTucker Carlson1:00

       I, I don't like to because it, everybody else kind of recedes into the background and I become this kind of colossus-

   30. CPChamath Palihapitiya1:06

       (laughs)
2. 4:25 – 46:08

   ICE raids, LA riots, immigration debate

   1. JCJason Calacanis4:25

      the immigration protests/riots/ICE actions in Los Angeles. I'm actually here. Last Friday, protests broke out after ICE raided Home Depot, a fashion wholesaler. In total, 44 people were arrested by ICE, 10 times as many, (laughs) 400 and counting, from the protests. They even ran into, uh, ICE that is, ran into a strawberry field in Oxnard (laughs) , uh, to just randomly pick people up it seems. Uh, at least a half dozen Waymos were vandalized and burned, 20 plus businesses looted, and, uh, Waymo narrowed their area, and it's, uh, spiked to 30-minute wait times. Uh, so that's a first world problem. Riders throwing bricks, Molotov cocktails, shooting fireworks at law enforcement. Completely unacceptable. Two men were charged with throwing Molotov cocktails at officers. Ugh. Trump deployed the National Guard, 2,000 at first, then 4,000 apparently. And, uh, apparently there's a battalion of Marines here, 700 of them. Karen Bass instituted a curfew Downtown LA, 8:00 PM to 6:00 AM. And, uh, prosecutors, federal prosecutors that is, are trying to identify hundreds of people. Newsom, Bass denounced the raids, obviously, and, uh, they're blaming Trump for escalating the situation. Trump and members of the White House responded by calling out California's weak leadership. And now we have protests popping up everywhere else. New York, Chicago; Austin, DC. Tucker, you grew up in Southern California, I think. You-

   2. TCTucker Carlson5:55

      I did, yeah. LA and La Jolla.

   3. JCJason Calacanis5:57

      I mean, are these riots more or less than the Lakers, uh, championship? Uh, how concerning are they to you? Who's to blame?

   4. TCTucker Carlson6:07

      Well, as measured by violence, they're less profound than, you know, what happened in 2020 after George Floyd died. They're way less dangerous than, say, the Watts riot, um, or the Rodney King riots in LA. But they're much more profound. I mean, it, it really does... Uh, they're certainly a bigger deal than anything that happened in Fort Sumter, for sure, which kicked off the bloodiest war in American history. The federal government has, as a court duty, uh, the right and responsibility to enforce immigration law and police the borders. That's what the government is. That's what the federal government is, really. And so if you contest that, it is like a threat to disunion, fundamentally. I mean, I think there's a lot at stake. And we reached this point because a series of, paradoxically, weak federal governments allowed sanctuary cities to continue literally for decades. E- each one its own form of insurrection against the central government, and maybe, maybe you don't believe that the federal government has a right to pass laws restricting immigration. It's not in charge of the integrity of the borders. You know, that, that's a kind of philosophical or Constitutional case I guess you could make. But most people accept that those are federal duties, and once you accept that, you can't allow states or municipalities to flout the law any more than you could allow Central High School in Little Rock to keep Black students out or whatever. I mean, certainly federal troops have been called in for much less, and I think the longer this continues, the greater the threat of disunion, the greater the threat of reaching a point where you, I don't know, you can't drive from New York to LA. We take a lot for granted in the country, and the main thing we take for granted, I think, is freedom of movement between states. But you could easily imagine that ending, like, soon, in the same way that you can't drive from, uh, 'cause I've tried, from Sao Paolo to, to Rio in Brazil. Pretty first-world country, it's too dangerous to do that. You could easily see that happening here. So I think once the Trump administration commits to putting down the riots, to enforcing federal law by force, it kinda can't back away from that. Like-

   5. DSDavid Sacks8:08

      Mm.

   6. TCTucker Carlson8:08

      ... I, you know? And that raises the question, who's funding these, et cetera, et cetera? And I think it's a really interesting question we should find out. I don't think the only arrests should be on the scene. I do think the drug cartels are involved, flexing their authority in California. They have a lot of control in California, as I'm sure you know. Et cetera, et cetera. But the bottom line question is, does the federal government have a right to enforce federal immigration law? Yes, and if states are out of compliance with that, it doesn't have any option but to force the issue.

   7. DSDavid Sacks8:36

      Srikanth, uh, when you see this amount of power military, milit- literal military coming in, the dragging of, you know, handymen from Home Depot, as opposed to the strategic way this started, which was, "Hey, we're gonna go after the felons. We're going after the gang members, the really bad folks." And then this time, now it seems like, "Hey, we're just gonna roll up to a farm. We're gonna roll up to a Home Depot, just grab everybody. We'll figure it out later if their, you know, papers check out or not." Are you in favor of the, "Hey, all 20 million gotta go"? I'll call that the Steve Bannon position. Or are you into, in the 5% of alien, illegal aliens who are criminals, they need to go, but maybe a path to citizenship for the other 19 million? I think the president was asked a version of that question today, Jason, and I think what he said is there are people that have worked, for example, on farms for 20 to 25 years, or they work in the leisure industry, and he said, "We have to take a common sense approach to those people." Because if you do take those people, then it's creating a vacuum where these jobs could get filled by folks that are essentially criminals or other things. So, I believe that that's a reasonable starting point. What I would say is, where do we go? There are seven and a half legal, not illegal, legal immigrants in the United States waiting for their adjustment of status. Mm. Those are doctors. Those are lawyers. Those are scientists. Those are family members of existing American citizens. There's an entire body of people that I think we have to recognize that have been waiting in line, and their first act in America was a legal action to come in and contribute. And every time we start this conversation, we go to the plight of people whose fundamental first action was an illegal action without understanding that there has to be actually a more balanced approach. So yes, I think the president is right. Common sense for the folks that have now been here for a very long time, but we have to prioritize the people that started by saying, "We're gonna wait in line properly." And then there's people in the middle, but I think that there needs to be a way to give those folks a chance to get their affairs in order. But they should be playing by the rules. Got it. And I think it's unfair to reward not playing by the rules. Okay, so some middle ground between the extreme, all 20 million gotta go, and the... Let's call it. One example that I saw online, Jason, was give folks a stipend and a year. Yes, the stipend's been out there for a while, right? Yeah. To get their affairs in order and then to go- Kaisen said that, right? Kaisen. Kaisen said that, exactly. Yeah. And I think k- I think Kaisen's clip is actually the most, the most rational for the middle chunk. But I would really focus on these legal folks and say, what are we doing about those folks whose first action was to raise their hand, stand in line, and say, "I want to contribute by the rules that America sets up"? So reward them, and then punish the illegal folks coming in. Adjudicate everybody else. Or adjudicate everybody else. Love it. Okay, Sacks, I'm gonna play two clips for you here to level this up, and we can kinda look at this in a multi-decade way. Here's Reagan on immigration and then followed by Clinton.

   8. NANarrator12:02

      It is bold men and women yearning for freedom and opportunity who leave their homelands and come to a new country to start their lives over.They believe in the American dream, and over and over they make it come true for themselves, for their children, and for others. But their greatest contribution is more than economic, because they understand in a special way how glorious it is to be an American. They renew our pride and gratitude in the United States of America, the greatest, freest nation in the world, the last best hope of man on Earth.

   9. NANarrator12:38

      All Americans, not only in the states most heavily affected, but in every place in this country are rightly disturbed by the large numbers of illegal aliens entering our country. That's why our administration has moved aggressively to secure our borders more by hiring a record number of new border guards, by deporting twice as many criminal aliens as ever before. We are a nation of immigrants, but we are also a nation of laws. It is wrong and ultimately self-defeating for a nation of immigrants to permit the kind of abuse of our immigration laws we have seen in recent years, and we must do more to stop it.

   10. JCJason Calacanis13:14

       Okay. Sachs, my question for you is, on a party basis, this seems to have flipped. We talked about this before on the program. Republicans wanted immigration, NAFTA, legal reg- reg- uh, even maybe an open border where workers could go freely back and forth from Mexico, kind of like the EU. And, uh, Clinton (laughs) wanted to deport folks so that Americans get, could have more jobs and that wages would go up. Now it seems to have flipped. Obviously, you're inside the administration. Disclaimer, disclaimer, whatever you, however you want to disclaim this. What's in the best interest of all Americans going forward? Because we have an interesting wrinkle here, which I'm sure you've been thinking about as the AI czar, which is, jobs are going away in a lot of key fact, key areas where robotics and AI are coming in. So, you have to contend with what the American people want and AI and job destruction or displacement that can be caused by it. So, so what are your thoughts generally? And, and I, obviously you work in the administration, so I want to give you that chance to explain personal versus administration position.

   11. DFDavid Friedberg14:21

       Well, my re- reaction is that you're doing everything possible to avoid the fact that LA is on fire right now, and law enforcement is being assaulted by rioters who look like an invading army.

   12. JCJason Calacanis14:32

       Who? Me?

   13. DFDavid Friedberg14:32

       They're rioting under a foreign flag. Yeah, you're showing clips of Reagan and Clinton. What the hell does this have to do with the fact that there are riots in LA right now?

   14. JCJason Calacanis14:42

       Oh, well, I was trying to level-

   15. DFDavid Friedberg14:42

       This is the issue at hand.

   16. JCJason Calacanis14:44

       Oh, I, I was trying to level up the conversation to talk about the big picture of immigration, but if we want to get down to the law-

   17. DFDavid Friedberg14:48

       No, you're changing the conversation. I think that, I think-

   18. JCJason Calacanis14:50

       No, no, I, I, I'm trying to expand it, but hold on, hold on, hold on. If you're gonna accuse me personally of, like, having a scale here, I'm happy to discuss law enforcement, January 6th, or this one. I believe you should not beat up cops. I come from a family of cops. You know that. We've been friends for over 20 years. My family is cop. My family is firefighter. We don't approve of throwing Molotov cocktails at cops, period, full stop. I am-

   19. DFDavid Friedberg15:15

       Good.

   20. JCJason Calacanis15:15

       ... insulted if you even insinuate that.

   21. DFDavid Friedberg15:17

       I didn't insinuate that, but-

   22. JCJason Calacanis15:19

       You said, "I."

   23. DFDavid Friedberg15:19

       ... we have not discussed the issue at hand, which is-

   24. JCJason Calacanis15:22

       You can feel free to go micro.

   25. DFDavid Friedberg15:24

       ... the fact that LA is burning right now. By the way, if you don't want to get deported, try not rioting under a foreign flag. I mean, it's just a stupid way to advocate for your position, if that's what it is. But that's, that's the topic of the week right now. I don't know why you're trying to uplevel this and talk about what Reagan thought 40 years ago. It's just not relevant to what's happening in the news today. Now, you asked, what is the, quote-unquote, "American position," if there is one. I can give you some polling on that. So first of all, voters approve of the ICE raids in Los Angeles by 55 to 37. That's plus 18. Voters support the administration's effort to deport illegal immigrants by 58-37. That's plus 21. They approve of Trump deploying the National Guard by 20 points, 59-39. Only 36% say the administration's gone too far, while 55% say it's about right or too little, so plus 19. And even the liberal, uh, Quinnipiac poll found that Democrats' approval numbers are at a new all-time low of minus 49, whereas Trump is now up to plus six in Morning Consult and plus eight in Rasmussen. So, I think the American people approve of what the administration is doing here. And just to fact check one thing you said in the introduction, you mentioned this fashion wholesaler that along with Home Depot, you made it sound like these raids were just happening willy-nilly, like there was some big roundup where they were just busting into places and seeing who's illegal, checking people's papers. That's not what happened. This fashion wholesaler is a money laundering operation for the Mexican cartels. This is according to Tom Homan. And many employees there are involved in very serious crimes, drug, gang, and violence, murder, child rape. And there were warrants for their arrest. So, the way that this whole thing started is ICE was serving criminal warrants that state and local authorities have no right to resist. That's how this started. It wasn't random roundups, okay?

   26. JCJason Calacanis17:22

       Okay, I was just, there's reporting that Stephen Miller specifically said just, he was disappointed with the number of people being round up and deported, and he said, "Just go to a farm. Just go to a Home Depot." So I'm just-

   27. DFDavid Friedberg17:35

       Well, that's not, that's-

   28. JCJason Calacanis17:36

       That's the reporting.

   29. DFDavid Friedberg17:37

       Okay, well, I have not been able to confirm that reporting. I don't-

   30. JCJason Calacanis17:39

       Okay.
3. 46:08 – 1:14:00

   Strong macro data: inflation, tariff revenue, GDP, jobs

   1. JCJason Calacanis46:08

      Economic data's been objectively pretty great the last two weeks. Tariff revenue spiked, 23 billion in May, 2X from February, so there we go, we see the impact of a little bit of extra income. Inflation continues to come down and, uh, what are we at? 2.4% across the board. There's some pluses and minuses in there, we'll get into it later. GDP. Okay. This is the leading GDP prediction model from the Atlanta Fed. Could be as high as 3.8%. Again, this is a prediction for Q2. Q2's obviously not over, but this would be a pretty big jump over Q1. Despite all this positive data, the deficit remains the sticky issue. Some of our friends might have some issue with this and been vocal about it. In May, the US had 371 billion in revenue with 687 billion in spend. Not good. Big high burn rate. $316 billion deficit. We paid $90 billion in May in interest on the debt, almost up to 100 billion a month and, uh, there's a nice Sankey chart, uh, which we all like. We can double-click on that if anybody finds something interesting in here. Here's your deficit tracker. What I'll highlight here for you is those first two lines, 2020 and 2021, you gotta kind of give a mulligan there for the COVID years. And, uh, purple, 2025, we are a bit ahead of the last couple of years, we're at 13... Our spending now, and, and obviously the debt service is a big part of this, 13% above 2024, 20% above 2023, and 65% above 2022. The balance sheet of the United States is really bad right now. Sacks, I'm gonna start with you. This obviously has been an emotional, uh, issue and, uh, oh, apology, Chamath, I just noticed, forgot to hit publish on last week's episode, but let's let that go. Uh, I, it won't happen again. Sacks, what are your thoughts here?

   2. DFDavid Friedberg48:08

      Well, I mean, you'll recall that back in early April, Jim Cramer predicted we'd see a Black Monday in response to Trump's tariffs, and that's all the proof that we should've known that we were about to-

   3. JCJason Calacanis48:19

      (laughs) You're a person, you're a person, Cramer.

   4. DFDavid Friedberg48:19

      ... get a bunch of good economic news. Uh, and it wasn't, it wasn't just Jim Cramer. I mean, Larry Summers was on our pod with that big debate that we did and he was predicting doom. And what we're seeing now is good economic news is breaking out all over. So, Q2 GDP on track for 3.8% according to the Atlanta Fed. The May jobs report was above expected, plus 139,000. CPI, you know, inflation down to 2.4%. So, growth is back, inflation is low, and what you saw over the last few months was...

   5. TCTucker Carlson48:50

      ... the elites in both parties, I'll give you that. Have, they were scaremongering on tariffs and predicting doom, and they've been proven to be out of touch with popular sentiment and reality. Well- I mean, you don't wanna spike the football too soon, but things look really good right now. Yeah. And I mean, in fairness, when the Trump shock and awe with the tariffs, he came out pretty strongly, Sachs, you will admit, and the market did (laughs) tank massively for about 30 days. Tucker, what's your take on the economy today? (laughs) This debt, does it concern you? Uh, and I'm wondering what, 'cause there seems to be a little bit of a rift inside of the Republican Party on the BBB, not Build Back Better, but the Big Beautiful Bill. What's Tucker Carlson's take, I'm curious, on out of control spending, the deficit, and this bill, in relation to that? Well, I mean, I have the world's most predictable views. I believe in physics, so you know, an unpayable debt tanks your country at a certain point. That was preexisting. It's accelerated, as you noted. I, I don't know a single person who's got a, any kind of plan to fix it. I think we're just gonna ride it into whatever the point of oblivion is. But I would just say, on tariffs, you know, my, you've got the reverse Cramer. David was saying that's his m- measure of economic forecasting. For me, it's the Wall Street Journal editorial page. Whatever they're for is poison- (laughs) ... um, generally speaking. And anything that drives them insane is a virtue. And I just can't imagine a policy more perfectly designed to just make them, like, explode than, uh, Trump's tariff announcement. And I, and I have to say, I mean, I've been kind of pretty conventional Republican my entire life. I remember when I decided the Iraq War was a bad idea. That felt like an outlaw, you know, idea. When did you get- But the kind of la- ... to that point? What, what led you to that point of breaking? I got, I- Yeah. Uh, well, I went to Iraq, um, in December of 2003 to see where a friend of mine had been killed. And, um, so I was there right after the invasion, and I just immediately recognized this is not... We're, we're not a good colonial power because we won't admit that we are. We won't admit that we have an empire. Therefore, we can't administer, administer it in a rational way, um, just the obvious stuff. But anyway, the point is, the last remaining kind of unexamined orthodoxy in my head was free trade, and I happened to be, just by chance, at the White House the day of that announcement. And I remember thinking, "Man, if this works, what a caper." You know? (laughs) I mean, I don't know if it's gonna work or not- What is the best-case scenario- (laughs) ... in your mind of, you know, this tariff negotiation? Obviously, there have been multiple rounds of it. I'm not gonna use- Yeah. Uh- ... the term taco, but it does seem like we've shifted from shock and awe to maybe, like, kind of bore. It's kind of boring, like ... And, and that does seem- Well, but- ... to be Trump's approach, right? He, when in negotiations- Right. ... big bang- When- ... and then fall back to a reasonable position. So, I think we're in the reasonable position phase. What does success look like? I mean, God's willing- (laughs) ... I, I hope, I pray that's what we're seeing on Iran right now. Um, but you're absolutely right. I mean, that's sort of the nature of negotiations, of course. Um, and there is nothing in writing with China, so far as I know, and it'll be reassuring, I think, when there is. Um, but in general, we haven't seen what Jim Cramer and Larry Summers predicted, and that itself is amazing. It's amazing, and it, it causes you, someone like me, who's sort of on the sidelines of the economic debate but watching carefully, it does make you sort of wonder, like, what other absurd mid-century orthodoxies about economics have I internalized that just aren't true, right? Yeah. 'Cause that was the biggest of all. Tariffs are, you know, they caused the Great Depression. We know that. And, and so what if, like, you can have a kind of mixed approach with some trade barriers that are tailored to your benefit and that sort of works in a longitudinal way? If that's true, holy smokes. And it looks like it might be true. So, I'm just- Well, it's been true for the other side, right? They have been doing that exact policy. Well, exactly. No, it's to- totally right. So if it's true for China and South Korea and Australia, (laughs) why wouldn't it be true for us? It seems like we're the sucker at the poker table. Well, I think you're right. I guess what I'm, uh, all I'm saying, I'm making a pretty pedestrian point but I can't get past it, which is, this is so far from what the Republican Party stood for 10 years ago, which was neoconservative foreign policy, free trade, um, open borders, as, as you noted, maybe a little more than 10 years ago, but 15 years ago- Sure. Um, this is, this is the mirror image of it, and it just blows my mind and it's, it's such a better version. It's such a more reality-based, flexible, thoughtful, uh, version than we had before, and I'm just really... And most Republicans in the Senate are not even aware this is happening. They are the most recalcitrant people in the world, also the dumbest. So most of them, you know- (laughs) ... don't accept any of this, but just as an observer, I'm thrilled to see it. All right, Chamath, uh, your thoughts? Can I actually, can I ki- can I, um- Oh, yeah, sure. ... I was gonna say, go ahead. You go on, Sachs. Uh, no, no, no. You go. Yeah, I mean- I mean, I know you like to go right after Tucker. It's looking very engaging for you. Well, no, you got me thinking about these, um, unexamined- This is his dream. When you're on, he cannot in the group chat, he's so excited, Tucker, when you're coming on. (laughs) Come on. That is bullshit. (laughs) It's 48 hours of Sachs being like, "When does, when does the pod come in?" (laughs) "Is Tucker really coming?" And I'm like- That's how I feel about David Sachs, trust me, if you'd... You do. You do. If you had a camera at my dinner table, you would hear something similar. Oh boy, here we go. Go ahead, Sachs. It's, uh, it's great to have someone to the right of me on the podcast for once, you know? (laughs) It's not an easy task. I, uh- (laughs) We invited Alex Jones and Steve Bannon- (laughs) ... they, they haven't (laughs) responded. Tucker got me thinking about these unexamined orthodoxies, and that is a good way of putting it. I mean, you know, 'cause I studied economics in college and, you know, I learned that the Smoot-Hawley Tariff caused the Great Depression. And it's like, in hindsight you're like, "How can that even be true?" Like, a tariff is basically a tax rate on foreign goods, and you're saying that, you know, increasing taxes on foreign goods all of a sudden caused the Great Depression? It doesn't make any sense when you actually, like, just think about it. (laughs) Now, what caused the Great Depression? Well, I would say when thousands of banks went under and there was no FDIC and everyone just got wiped out by that. And it's a systemic risk, so, like, one bank failure leads to the next one. That's so obviously what caused the Great Depression is nobody had any money left. They all got wiped out- (laughs) ... when all the banks went under at the same time.

   6. DFDavid Friedberg55:03

      Right? So-

   7. JCJason Calacanis55:03

      Well, I mean, what... How do we take, uh, something that happened in the '20s and '30s and apply it to a much more (laughs) dynamic world-

   8. DFDavid Friedberg55:09

      Well, but, well, what I think, wh-

   9. JCJason Calacanis55:10

      ... like today? It doesn't make much sense.

   10. DSDavid Sacks55:11

       Uh...

   11. DFDavid Friedberg55:11

       Well, I think what happened is we had all these post-war, meaning post-World War II, understandings that kinda got hardwired into the consciousness of our intellectuals. And if you think about the, the era right after World War II, the US was like the last great power standing, uh, it was us and the Soviet Union, but they kind of were... Had a different system, they were not part of the, um, let's say the, the free world, they're part of this communist bloc. So wh- in, in terms of the, the quote-unquote "free world," we were the only country that was relatively undamaged, and we had this giant manufacturing base. And so, yeah, obviously that the, the fewer trade barriers existed across the world, the better it was for the United States, uh, because it was our goods and our factories that basically were able to sell all over the world. And so we proceeded to define a world order in which we could just kick down every single barrier to free trade, because that's what benefited us. Now, I don't know that that means that that situation always benefits us in all times and all places. I mean, the big issue we have right now is that you've got a rising China and they have become the skilled producer in the world for all sorts of goods. They now have this giant industrial base that we seem to have exported to them, and again, it was, uh, uh, and we e- exported a lot of that because of this, um, free trade ideology that got so entrenched in our thinking that we just stopped thinking about under what circumstances this might not continue to be good for us. And so we've ended up becoming dependent on them for all sorts of goods that we now realize are highly strategic, and we're trying to figure out, well, how do we onshore these things, because it seems really dangerous now for us to be single-threaded on, uh, you know, uh, on-

   12. JCJason Calacanis56:53

       Chips, energy...

   13. DFDavid Friedberg56:54

       ... potentially a- adversarial power...

   14. JCJason Calacanis56:56

       Yeah, we get it.

   15. DFDavid Friedberg56:56

       ... for rare earths or, you know, rare earth magnets-

   16. JCJason Calacanis56:59

       Chips, medicine.

   17. DFDavid Friedberg57:00

       ... and chips and med- pharmaceuticals and all these things. But, you know, our intellectual class just never seems to revisit any of its assumptions, they just kind of have these dogmas.

   18. JCJason Calacanis57:10

       Chamath, building on Sax's sort of codification of truths, heuristics, and not getting questioned, how much of it is we just codify, "Hey, trade, good," you know, "Open borders, good. Free trade, good," and how much of it is just incentives, like, I mean, rich people paying off politicians to have more free trade independent of party seems to be what's happened over the last 10, 20 years. It just made more sense to put workers and to send jobs to the lowest cost place to increase profits for American companies which, let's face it, although it may have hollowed out our manufacturing and created this weakness in the four or five areas you point out every week (laughs) that we need to reinforce quite eloquently, the real issue is we did that because we wanted to make money, we wanted to have the most highly profitable companies, and we did succeed, but maybe we succeeded too much and our companies benefited more than the middle class. You got Josh Hawley out there saying, "Hey, we should go to $15 minimum wage federally from this-"

   19. DSDavid Sacks58:08

       Wrong.

   20. JCJason Calacanis58:09

       Yeah.

   21. DSDavid Sacks58:09

       The wrong people won.

   22. JCJason Calacanis58:12

       Unpack.

   23. DSDavid Sacks58:12

       In the early, in the early 2000s, I think that there was a war of ideas, and that there was a group of people that advocated for this reckless form of free trade and this globalist view like, every country is gonna meld into one mega-monolith country organization that'll get governed out of New York by the United Nations and its sleeve organizations. And that worldview won, but it was the wrong worldview, and it didn't acknowledge that we have competing philosophies, competing priorities, competing ideals of what the future looks like. And I think that we need to go back and reset all of those things.

   24. JCJason Calacanis58:55

       Hm.

   25. DSDavid Sacks58:56

       If you just take where we are, if you can just put the Sankey diagram back up, there's a couple things that are really worth noting that people need to fundamentally understand. I said a couple weeks ago that I thought the GDP print was gonna come in hot. I think everybody now is sort of where I am, so let me give you the next thing that I think-

   26. JCJason Calacanis59:15

       Can I just ask you, though, why is it hot? Do you have a thesis on why GDP spiked so much, or potentially did? That's obviously a forecast.

   27. DSDavid Sacks59:25

       I don't know the puts and takes yet, and I think when we see the print, we have... I have a way of forecasting this stuff, which is a bunch of signals that my team and also many macro teams all around the world, the bond vigilantes to the hedge fund guys, they all feed it to me. And what I was noticing was that we were gonna come in, I said, in the low threes. And I think, you know, if Atlanta Fed is right, I don't think they are, but I think it's gonna be in the low to mid threes. It's gonna be meaningfully greater than what people are expecting, so let me just give you my next prediction. My next prediction are two really important things. What this Sankey diagram looks at, which is a snapshot of the balance sheet and the health of the United States in May, misses, in my opinion, two very important things that have to change. The first, and this is a positive for the Trump administration and the United States economy, is we are run rating 300 to $400 billion above forecast in terms of our receipts, meaning the revenues that we will take in. And you get to that number by looking at the last three months of tariffs and forecasting forward assuming a reasonable balance here. So back to Tucker's point, yeah, we all thought that this was like a boogeyman that you weren't allowed to touch it and that if you touched the stove, you were gonna get burned. The mathematical reality is that this is actually gonna work out much better for us than we anticipated, and it's gonna be somewhere in the range of 300 to $400 billion of extra revenue per year. That's a huge win.So why is that important? That then sets up this next cataclysmic thing that we're going to see over the next 60 days, which is, what does Jerome Powell do? If Jerome Powell stays politicized, his incentive will be to keep interest rates where they are. If Jerome Powell looks at the conditions on the ground, especially when you start to see inflation stay in the low 2s and approach 2.0, the real thing that he's gonna be under tremendous pressure to justify is, why are you not cutting? And just to give you a sense of how important that is, if we cut by 100 basis points, that's another $300 billion. Now, in that case, that's not money that we get in, but it's money we don't have to spend. So if you add these two things together, we are, in the next 60 days, going to have to re-forecast the American balance sheet where this is, or we're actually gonna be able to positively forecast an extra $600 billion, $300 billion of incremental revenue and then $300 billion of savings. Jason, if that happens, watch out. What does that mean, watch out? It means that every single risk dollar is gonna run to America-

   28. JCJason Calacanis1:02:31

       Yum, yum.

   29. DSDavid Sacks1:02:31

       ... every single one.

   30. JCJason Calacanis1:02:32

       Yum, yum.
4. 1:14:00 – 1:29:15

   Big, Beautiful Bill update: State of the bill, Senate math, and more

   1. JCJason Calacanis1:14:00

      uh, in the Senate, passed the House by a one-vote margin. Trump said he wants the Senate to pass the bill by Independence Day, July 4th. Uh, Senate math, Republicans have a 53 to 47 majority, as you know. They can afford three nos on their side since Dems are united against the bill. With 50 votes, JD Vance can break the tie, obviously, so it's easier if they can get to 51. Seven GOP senators are either no or maybe no. Three likely nos, Rand Paul, Ron Johnson, Rick Scott. Four maybe nos over the Medicaid cuts, uh, Josh Hawley, Susan Collins, Murkowski, Jim Justice. Uh, none of those senators have committed either way and Republicans are now falling into three camps on BBB, hard yes, soft yes, no until it's ficked- fixed. Obviously, uh, some friends of ours were a little upset about the BBB, and, uh, we had a pretty chaotic week the last week. It looks like the reconciliation is in. Your take on the last week and the reactions to the BBB and obviously Elon and Trump's relationship, Tucker Carlson.

Episode duration: 1:42:27