Inflated GDP?, Google earnings, How the media lost trust, Rogan/Trump search controversy, Election! AI transcript and summary - episode of podcast All-In with Chamath, Jason, Sacks & Friedberg
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Episode: Inflated GDP?, Google earnings, How the media lost trust, Rogan/Trump search controversy, Election!
Author: All-In Podcast, LLC
Duration: 01:30:52
Episode Shownotes
(0:00) Bestie intros! (5:40) US Real GDP growth comes in at 2.8%, but there are underlying issues (29:16) Google earnings: YouTube and Cloud post huge quarters, would they have survived outside of Google? (36:24) Sacks's idea to auction off public spectrum licenses of major broadcast networks (42:17) How the media
became one of the least trusted institutions in the US (54:26) Why Joe Rogan's interview with Trump was not appearing in YouTube search results (1:08:54) Final pre-election segment: how it's tracking, election integrity, voter fraud stats Get notified for the Election Night Livestream: https://www.youtube.com/watch?v=D4Xaqgd9-Ro Get tickets for The All-In Holiday Spectacular!: https://allin.ticketsauce.com/e/all-in-holiday-spectacular Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect Referenced in the show: https://fred.stlouisfed.org/series/DGS10 https://x.com/freesites_com/status/1851615700869144908 https://www.cnbc.com/2024/10/30/dropbox-slashes-20percent-of-global-workforce-eliminating-500-roles.html https://fred.stlouisfed.org/series/FYONGDA188S https://www.commercebank.com/about-us/prime-rate-update https://www.fdic.gov/system/files/2024-05/unrealized-gains-losses-on-investment-securities.png https://abc.xyz/assets/71/a5/78197a7540c987f13d247728a371/2024q3-alphabet-earnings-release.pdf https://www.cnbc.com/2024/10/29/google-cfo-says-company-can-push-a-little-further-in-cost-savings.html https://variety.com/2024/digital/news/youtube-q3-2024-advertising-revenue-growth-1236193926 https://x.com/DavidSacks/status/1818467743479542130 https://news.gallup.com/poll/512861/media-confidence-matches-2016-record-low.aspx https://news.gallup.com/poll/508169/historically-low-faith-institutions-continues.aspx https://www.axios.com/2023/10/24/americans-trust-in-media-plummets-to-historic-low-poll https://www.washingtonpost.com/opinions/2024/10/28/jeff-bezos-washington-post-trust https://x.com/DavidSacks/status/1850277560816681255 https://x.com/DavidSacks/status/1850979360037356001/photo/1 https://x.com/davidsacks/status/1844429818554876026 https://x.com/elonmusk/status/1851745648313602189
Summary
In this episode of 'All-In', the hosts discuss a range of topics starting with the recent 2.8% growth in US GDP, emphasizing the need to view these figures against global economic contexts, particularly concerns over inflation and government spending. The conversation highlights that while GDP numbers appear positive, they may be misleading due to high government consumption. The potential impact of rising interest rates and its implications for economic stability, including credit crises in banks, is explored. The discussion also covers media credibility issues, the visibility of Trump in the media landscape, and election integrity, advocating for clearer voter ID standards to enhance trust in the electoral process.
Go to PodExtra AI's episode page (Inflated GDP?, Google earnings, How the media lost trust, Rogan/Trump search controversy, Election!) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.
Full Transcript
00:00:00 Speaker_05
We had dinner last week and Saks and I got bombed last week. We had dinner and we drank. A quadruple. Casa, I've not seen J. Cal drink like that before.
00:00:12 Speaker_06
I stopped in for a few minutes.
00:00:13 Speaker_04
He was drinking. I mean Casa Azul. He tore my house apart getting back in.
00:00:19 Speaker_06
Oh my God, that's so true. Like a bear?
00:00:21 Speaker_05
Like a bear? I went Brooklyn style. He was like a bear. He was like a drunk bear. But I spoke to the lady of the manor and I will be staying at Sax's house next time. So I will be able to refresh the ranch's soap and towels. Really?
00:00:34 Speaker_05
Yeah, I'm staying at your place. You know what? I forgot to get towels when I was at Chamath's. He's got this amazing embroidered towel. So I'll just hit those up when I hit your place.
00:00:43 Speaker_03
It's really funny to go to J. Cal Ranch and there's going to be a big S on his towels.
00:00:49 Speaker_05
I got the robe that says DS on it. I've got a robe on the back. It says MAGA.
00:00:57 Speaker_04
I took all the MAGA robes. What does the S stand for? It's grifter. Oh, it's so funny.
00:01:05 Speaker_01
Steals.
00:01:06 Speaker_04
He's got a bunch of towels that say C as well. Cheap.
00:01:18 Speaker_00
Rain Man, David Sachs.
00:01:20 Speaker_01
And it said, we open sourced it to the fans, and they've just gone crazy with it. Love you, man.
00:01:27 Speaker_00
Queen of Kinwana.
00:01:30 Speaker_05
All right, listen, happy Halloween to everybody. And we've got a great docket for you today. But I just upfront wanted to let people know that we will be having the all in holiday spectacular on December 7 at the Palace of Fine Arts in San Francisco.
00:01:47 Speaker_05
It's going to be amazing all in.com slash events and next Tuesday. That's right, November 5. If you go to our YouTube at 7pm Pacific Time 10pm Eastern Time, we're going to do an election night live stream for the fans.
00:02:04 Speaker_05
We're almost at 700,000 subscribers. So subscribe to comment and join us on our live stream on Tuesday night. There'll be guests right there's going to be some fun guests.
00:02:14 Speaker_05
I think Helmuth is still banned by Chamath for life, but I may bring him on and let him give him a second chance to mop. Is that okay? Bring him on for a second chance.
00:02:24 Speaker_04
Sure.
00:02:24 Speaker_05
OK, so we're going to give Helmuth a second chance, but we'll see. He's going to be on a very tight leash. If he makes it about himself in seven seconds or less, seven seconds to Phil Helmuth, he's going to get kicked right off the show.
00:02:37 Speaker_06
OK, holiday party. Did we announce that?
00:02:40 Speaker_05
Yeah, so the holiday party, go to all in dot com slash events if you want to come. It's going to be great.
00:02:45 Speaker_06
You guys aren't going to be happy, but we are setting. We are going to spend a million dollars on this party.
00:02:51 Speaker_04
How do you spend a million dollars on a party? Dude, did you see the set he built last time for... That sounds like a lot of founder money.
00:02:58 Speaker_06
That's a lot of... It's gonna be... Yeah, about $300,000 in founder money. We'll probably lose money on the party, but it's gonna be... It's not meant to be, call it a profit center, but it's just gonna be super fun. It's gonna be a great party.
00:03:08 Speaker_05
You cannot... put a price on a good time. And you know, if you're going to get that premium founder mode, did you always want to be a party promoter when you were like in high school and in college?
00:03:18 Speaker_06
When I was in college, I had a DJ set up. I had like synthesizer set up, which I plugged in and I did live electronic music with my DJ set. I'm going to drop the beat, Chamath.
00:03:31 Speaker_05
I'm going to drop the beat. couple of my startups now are doing something interesting.
00:03:37 Speaker_05
Athena is bought like a pack of tickets, and they're doing like a holiday party there with their top for our event, for our event, they basically bought a bundle of VIP tickets, and they're giving them to the top customers and their top employees to come.
00:03:50 Speaker_05
That's cool. And make it like their holiday party in San Francisco with our customers. So that's kind of neat, smart move by them. And so if you have a startup, and you want to bring your startup, you can buy a pack of tickets, as it were,
00:04:01 Speaker_04
That's actually a really good idea. A bunch of these small startups should just co-opt our holiday party as your holiday. Precisely. Yeah, just buy 10 tickets and come.
00:04:10 Speaker_06
Freebird's going to go blow a million bucks. You might as well just co-opt it. I'm hopeful today we're going to sign this DJ, which is everyone. Everyone knows the DJ and it is going to be pretty sick if we can get it.
00:04:21 Speaker_05
It's a degenerate gambler. We know him. We play poker with him. Whatever we pay him, he's going to lose twice as much at the poker game. Let's just let's call it what it is.
00:04:30 Speaker_06
Sax, can you host poker at your house after the party? Yeah.
00:04:35 Speaker_03
No.
00:04:38 Speaker_07
What a team player!
00:04:42 Speaker_06
He built an entire poker building and he's used it like seven times.
00:04:46 Speaker_04
So funny. David Sachs is just the absolute best.
00:04:50 Speaker_05
All right, let's get to work. You know what's winning as well is the US GDP. Here we go. It grew slightly slower than expected, but the top line numbers are healthy. Looks like the soft landing might be baked in. We'll see.
00:05:02 Speaker_05
On Wednesday, the Department of Commerce reported that real GDP grew 2.8% in Q3. That means it's adjusted for inflation. And you can't look at these things in a vacuum.
00:05:15 Speaker_05
You have to look at the other Western countries and their GDP, Japan 0.7, Australia 0.2, Germany 0.2, Canada 0.5. The world is not growing. US is growing briskly. And
00:05:29 Speaker_05
In terms of how to think about it, two to 3% is sort of the sweet spot for mature economies above 3%, positive, but can also signal overheating like we experienced during Zerp and in 2021. Under 2%, yeah, stagnation.
00:05:45 Speaker_05
US GDP was 30 basis points below the Dow Jones consensus forecast of 3.1%. There's your chart if you missed it. And obviously inflation, we talked about this last week, is at 2.4%, very close to the 2% target.
00:06:01 Speaker_05
Unemployment, 4.1%, close to historic lows. 10-year treasury, 4.3%, and obviously stock market at It's all-time high again. There's your S&P, Dow, and Nasdaq.
00:06:13 Speaker_05
As we've talked about over and over again, Shamath, the federal debt is the issue, $35 trillion in debt. We have a trillion in annual interest payments on that debt. And Freiburg, your pet peeve, $23.5 million directly and millions more indirectly.
00:06:28 Speaker_05
As we know, federal government employees now at $3 million. It's about 1% of the country. And state government employees, $5.5 million. Local governments, $15 million. put it all together. And we got almost 25 million people working for our government.
00:06:46 Speaker_05
What do you think the prescription here is freeberg as we come up on election day, and we look towards next year, do you believe we can cut this crazy spending? What do you think is going to happen to the economy? Will it overheat soft landing?
00:07:01 Speaker_05
You're running a company now. So you have to think about this, obviously.
00:07:05 Speaker_06
Oh, well, I'll separate running a company because I think that's got to be treated independently from macro. You can't build your business around macro. But 10 year treasuries are sitting at just around 4.3%.
00:07:15 Speaker_06
I think what the market is telling us and remember, that's off of a low Right when the rate cuts were happening, if you'll remember in mid-September, we got down to just around 3.5%.
00:07:25 Speaker_06
The market is telling us that with the sort of economic growth we're seeing, low unemployment, and call it modest inflation, this is not the time to be cutting rates. And the market is saying, we are expecting higher rates for longer.
00:07:42 Speaker_06
So I do think that that's one big kind of turnaround that's happened in the last 90 days, which is really, I think, a big surprise to a lot of folks is just how robust things are relative to where folks thought that they were about 90 days ago, urging, pleading, and supposedly needing a big rate cut to get the economy moving again.
00:07:59 Speaker_06
But I think at the end of the day, everyone's looking to the election as kind of the next big moment.
00:08:04 Speaker_06
in the economy, both Trump and Kamala have made fiscal proposals that would be deeply expensive if you assume these budgeting groups that go out and take their policy proposals and try and build a model against them, that they're both gonna add trillions of dollars to the debt, they're gonna increase deficit spending, et cetera.
00:08:24 Speaker_06
But the reality is that neither of them are actually gonna end up theoretically being able to execute all those policies, and there will likely be some degree of difference where we end up on spending. That's a great point.
00:08:36 Speaker_05
Chamath, a lot of talk about DOJ, the Department of Government. What is the last word? Efficiency. Efficiency. That Elon might be collaborating on. What do you think the chances are? He said there could be two trillion in savings that could occur.
00:08:54 Speaker_05
What are the chances that any meaningful cuts happen and we reverse the trend? in if Trump say he wins and he creates that position?
00:09:03 Speaker_04
I think the first question that'll inform how dramatic the cuts are is whether we organize ourselves around an accurate sense of where the actual economy is.
00:09:18 Speaker_04
If you look at the print today, it would actually tell you that things are pretty okay and that we are not sort of near an unsustainable turning point.
00:09:29 Speaker_04
However, and Nick, if you want to just throw up this chart, if you back out the percentage of government consumption that is included in GDP, you start to see a very different picture, which is that over the last two and a half years,
00:09:48 Speaker_04
all of the economic gains under the Biden administration have largely been through government consumption. What that means is that private industry has been standing on the sidelines somewhat. And that actually maps to a lot of this intuition
00:10:10 Speaker_04
that I've had over the last few months when I've said, I think we're in a low key recession, because what I could never figure out is why I would look at the earnings transcripts of a bunch of companies who would constantly talk about softening demand.
00:10:25 Speaker_04
By the way, this is across the board. It wasn't just CPG companies, but Dropbox as an example. Same sort of thing. They just laid off 20% of their staff and the memo was about weakening demand.
00:10:36 Speaker_04
So this is a broad-based softening as far as companies experience the economy, but the high-level number is positive, which would make you think that everything is fine.
00:10:47 Speaker_04
But when you look at that chart and you back out the percentage of the positive news that the government is responsible for,
00:10:55 Speaker_04
What it means is the economy is flat and the economy isn't growing, which means that roughly there are a bunch of folks that are seeing contraction.
00:11:05 Speaker_04
I think that if you normalize on that view of the world, I think the cuts that Elon will affect will be meaningful and necessary.
00:11:18 Speaker_05
If you pull up this chart, Nick, of the federal net outlays as a percentage of GDP, you get a good idea of the spending.
00:11:26 Speaker_04
You're basically at a flat, stalling economy.
00:11:30 Speaker_05
If you look at this, we basically have had high teens during our lifetime, Clinton era, 70s and 80s, and then it's gone up into the 20s now. That is definitely something, the amount of spending we're doing.
00:11:44 Speaker_04
Sorry, just again, this is where you can get a little confused by data. Jason, this is net outlays, and that's different from total gross government spending, which also includes QE.
00:11:56 Speaker_04
If you go back to the other chart, why is this one going down and the other one represents 85% of GDP? It's because that one is a more accurate sense of what the government is doing across all of its tentacles in the United States economy.
00:12:09 Speaker_04
It includes the money printer going burr, which the net outlays chart doesn't include. So just to be clear about what's happening, 85% of this quarter's GDP was induced by the government.
00:12:21 Speaker_04
If you sub it out, so take 2.8% and multiply it by 0.15, that is the true growth x the United States government that exists in the United States economy today.
00:12:33 Speaker_05
sacks your thoughts here on the GDP, obviously, looks pretty good for Biden Harris to have all these stats going in their favor. But there is the caveat, obviously, about the government spending in there.
00:12:48 Speaker_03
Yeah, no, I think that's right. I mean, I think that for Harris in this election, it's probably a little too late for this GDP report to be helpful. If you go back all the way to 1992, where the whole election hinged on the economy.
00:13:04 Speaker_03
Remember, that was Bill Clinton running against George HW Bush. And Clinton's message was, it's the economy stupid. Yeah.
00:13:11 Speaker_05
And he came up with that.
00:13:13 Speaker_03
Carville came up with it. And Clinton beat Bush because we had a recession and I think 91. But by 92, it was over already. And in the final week of the campaign, Bush tried to tout a similarly positive GDP report that showed 2.7% growth.
00:13:33 Speaker_03
That report would later be revised up to 3.9% growth. So the recession was definitely over and the economy is growing again.
00:13:40 Speaker_03
And nonetheless, Bush lost because voters' impressions of the economy had already formed and solidified by the final week of the campaign. So I think it's probably too late here for GDP numbers to have a big impact on the election.
00:13:57 Speaker_03
I think the other thing is that voters' impression of this economy isn't based so much on the GDP numbers. It's really based on their perception of inflation over the last four years.
00:14:10 Speaker_03
There's no question the cost of living has increased a lot over the last four years, and voters are really feeling that. That, I think, is playing into their perceptions of the economy. I don't think that Harris has a great answer for that.
00:14:27 Speaker_03
The bottom line here is, I don't think this report is going to have a big impact on the election.
00:14:31 Speaker_03
In terms of where the economy is going, the thing that I would come back to is interest rates, and this is the thing that Freeberg was talking about, which is, even though the Fed has cut rates by 50 basis points, the long-term rates, the 10-year Treasury, has not gone down.
00:14:48 Speaker_03
In fact, it's gone up slightly. It's gone up to, call it 4.3%. And so we have this real issue where, as the Fed is cutting short rates, long rates are not going down.
00:15:00 Speaker_03
And I think that is because of the government deficit and the government debt and the fact that there's so much debt that needs to be serviced by the bottom market.
00:15:10 Speaker_06
And the market for treasuries. Right. The buyers are all leaving the market for treasuries. The Chinese, we talked about this last week, have been selling down their treasury position. There just aren't buyers anymore.
00:15:20 Speaker_03
which is and I think this could this could ultimately have a very detrimental effect on the economy. You already saw that. I think this hasn't been widely reported, but I think it should be a major piece of news, which is the prime rate hit 8% today.
00:15:36 Speaker_03
So now it had a seven handle on it before now is an eight handle on it. Well, this matters a lot if you want to buy a house and get a mortgage. It's much more expensive. Then you got to think about all the people who already have debt.
00:15:50 Speaker_03
Doesn't this look recessionary? Totally. Because a few years ago, you could get a home loan at a 3% to 4% interest rate and amortize that. Now, your debt service costs can be twice as high. You just can't buy as much house.
00:16:08 Speaker_04
It's a very bad place if the economy's in the toilet, but we can't even talk about it because there is no structural way to get an accurate read because the government just perverts the effect it has in the economy.
00:16:23 Speaker_04
Like you can't have... Distortions, yeah. Yeah, distortion, fine. You cannot have a non-profit entity representing the plurality of the economic activity of a country and expect the capital markets to function properly.
00:16:38 Speaker_04
At some point, the capital markets will basically throw their hands up in the air and puke it all out and say no. I think that you're starting to see a little bit of these fissures.
00:16:48 Speaker_04
I think we're going to have to clean up our balance sheet pretty aggressively here.
00:16:51 Speaker_06
Yeah, and if you look at the importance of that rate, that rate drives the value of bonds. As the current market rate for treasuries or for the prime rate climbs, the value of an existing bond that pays interest at a lower rate goes down.
00:17:09 Speaker_06
because you have to pay a lower basis in order to get back to the new high rate that the market is telling you.
00:17:15 Speaker_06
So there are several trillion dollars, and we can pull up the graph here, Nick, of loans and bonds that are sitting on the balance sheets of many commercial banks in the United States that are now so significantly underwater, where the value is now below the book that they paid for those loans or that they issued them at, that those banks now have unrealized losses.
00:17:38 Speaker_06
And I think that this number is one of the other kind of facts.
00:17:41 Speaker_06
You see a few articles come out here and there about this, but the number as the rates go up, the number of unrealized losses, the dollar value, the unrealized losses of banks balance sheets in the United States has climbed so considerably that it represents a real crisis.
00:17:54 Speaker_06
In fact, the unrealized losses on banks balance sheets today is higher than it was in 2008.
00:17:59 Speaker_04
It's trillions. It's trillions. Buffett warned B of A publicly. He's been selling off. He sold off, right? He warned B of A publicly, although a bit obliquely last year during his annual conference. And it was very clear.
00:18:16 Speaker_04
It's like, listen, this is an opportunity for folks to just mark to market these securities properly and or sell them and get them off the books. I don't think B of A acted quickly enough. And so what did Buffett do? He just basically started dumping.
00:18:30 Speaker_04
And he's almost completely out of B of A, if not completely out altogether. So there's a lot of talk.
00:18:37 Speaker_06
A crisis is brewing.
00:18:38 Speaker_04
There's a lot of talk in FinTwit, if you go into sort of like the deep, far-reaching bowels of the FinTwit community on X, that there is a huge credit crisis looming amongst some of these large charter-holding banks because of this exact issue.
00:18:55 Speaker_05
And the relation between the Fed and the prime is typically 3%. So the Fed cuts rates, and then the banks put 3% on top of it when they give people credit worthy people mortgages and credit cards. So as the Fed cuts, this should come down.
00:19:12 Speaker_05
But if it went up, what explains that? I'm curious if anybody knows.
00:19:15 Speaker_03
Well, the Fed sets short rates. It sets the Fed funds rate, which is the rate of overnight lending between banks, but it does not set the 10-year treasury, for example, the long term. The market sets that. The market sets that.
00:19:29 Speaker_03
And the market now requires a higher rate of interest in order to accept you know, the risk of investing in those bonds. Or it's not really, since it's a U.S. Treasury, it's not really risk.
00:19:41 Speaker_03
It's more about the time value of money and their expectations of inflation, how much that money's going to be worth in the future.
00:19:49 Speaker_03
So I think what we're seeing is that the Fed can cut short-term rates, but it hasn't had the impact on long-term rates that everyone was expecting.
00:19:57 Speaker_03
I think everyone was expecting that we had this sort of burst in inflation, the famous 9% inflation rate,
00:20:04 Speaker_03
I think people were expecting that that would work its way through the system and that we'd get long-term rates back to where they were, but that's not happening.
00:20:12 Speaker_03
It's not happening for the reason we're saying, which is there's just too much debt out there. Now, think about the impact on the real economy. Let's say that you're a homebuyer and you got a five-year interest-only ARM-type mortgage for your house.
00:20:30 Speaker_03
Now, you probably got that in the 3% to 4% range. If you have to refinance it this year at 8%, your monthly payment is going to double. That has a real impact on people's wealth and on their spending power.
00:20:43 Speaker_03
Maybe they can't even support a payment like that. Now, go over to the commercial side, and it's very similar. There's a lot of commercial real estate out there, buildings and so on, where they've got debt on it.
00:20:57 Speaker_03
You can't get 30-year mortgages in commercial. The typical commercial loan is five to seven years. We're now coming up, I think, in the next few years on a lot of that, that debt will need to roll, it'll need to be refinanced.
00:21:11 Speaker_03
If it gets refinanced at twice the interest cost, roughly, a lot of those buildings may be underwater. I mean, they may not be, you know, there may be no equity value.
00:21:23 Speaker_03
And a lot of people know this now, but they don't really have to mark those positions to market. If they did, their equity were zero, but they're kind of all on borrowed time right now, hoping that rates will go back down.
00:21:36 Speaker_03
What we're seeing is that the long rates are not going back down. It's a pretty scary proposition. Then, of course, a lot of the debt on those buildings, it's all owned by the commercial banks that you're talking about, the regional banks.
00:21:47 Speaker_03
They're sending out a lot of bad debt that they haven't had to mark to market. They're just hoping that this problem will get sorted out before there's a default.
00:21:59 Speaker_06
And by the way, as these numbers climb, the cost to borrow for the federal government climbs. So the new bonds, we have to reissue a good percent, I think nearly $10 trillion, I think of our debt has to be reissued in the next year.
00:22:11 Speaker_06
That's going to get reissued now at this higher rate. And that higher rate means that the annual expense just to pay the interest on the existing debt is now climbing at a faster rate.
00:22:21 Speaker_06
And that means you've got to issue more debt to pay for your interest on your current debt. It's quite paradoxical that the Fed sets that rate, right? Well, this becomes the compounding problem.
00:22:33 Speaker_06
When your debt to GDP reaches a certain level, and you don't reduce federal spending fast enough, it becomes a compounding problem you cannot get away from.
00:22:41 Speaker_06
And this has been the beginning of the cataclysmic economic collapse of every great empire in the last 500 years. I know I've said this, you guys can joke about it all day long.
00:22:49 Speaker_06
But this is how it starts, is it starts at a point where you're arithmetically not able to get out of your debt spiral. And the markets are telling us that if the U.S.
00:22:58 Speaker_06
doesn't take drastic action in reducing its spending and reducing the deficit levels so that we can actually address the payment obligations on the outstanding debt that we've already issued, the U.S.
00:23:08 Speaker_06
dollar is going to have a real problem, and the creditworthiness of the United States is challenged.
00:23:12 Speaker_06
That's what the market says, but I know that there's other issues with the fact that there's no other better place to put money today, and there's not a lot of other
00:23:19 Speaker_06
you know, great economies out there and so on and so forth, but the stability of the United States, the hegemony of the United States and the dollar is challenged in part by the fact that you've got this BRICS organization out there now that has greater GDP in aggregate than the US.
00:23:32 Speaker_06
And so there may be an alternative that emerges in the next couple of years and maybe everyone's kind of putting their assets away in gold and Bitcoin and other stuff while they're waiting for the transition to find another place to buy. We'll see.
00:23:45 Speaker_03
But what it implies, if rates have roughly doubled, let's say, in the last few years, and they're going to stay at that level, they're not going back down, it implies there's going to be a big deleveraging, right?
00:23:59 Speaker_03
you can't support those interest payments. I mean, let's say that you own a building, right?
00:24:04 Speaker_06
And now all of a sudden- Well, it's actually deleveraging or inflation. Because the alternative is the Fed monetizes the debt, they start buying all the bonds, which means you're pumping more US dollars into the market.
00:24:16 Speaker_06
And that means that the cost of everything goes through the roof. So you have this effect of economic inflation, which is the way that you inflate away the debt problem. assuming people still want to use your currency.
00:24:26 Speaker_03
Yeah. Well, I mean, that's at the government level. I mean, I was talking about the private sector. I mean, just think about it at the level of like an individual building. You've got a loan on it. Now, you need to refinance the loan.
00:24:36 Speaker_03
Interest rates are twice as high. Let's say that the building no longer produces operating income at that level of debt, so you have to pay down some of your debt.
00:24:46 Speaker_03
It's called an equity in refinancing, where you're not pulling money out, you're putting money in, you have to deleverage in order to make your sort of income statement work, right? This is too much debt at that new level of interest rates.
00:24:57 Speaker_03
So if rates stay high, there's no choice but for many people to deliver, whether it's on the commercial side or the are on the consumer side, you just can't afford as much debt, right, at that higher interest rate.
00:25:11 Speaker_03
So think about the impact that has on the economy when everyone has to de-lever. That's a very negative effect.
00:25:18 Speaker_03
And then, of course, like you're saying, at the government level, you have to figure out what to do about that, because our interest payments on the debt are already, what, 20% to 25% of federal revenue?
00:25:29 Speaker_06
Yeah, it's about $1.5 trillion.
00:25:30 Speaker_03
So you already see it there where there's less money to spend on current programs because you're paying for interest on the debt. So what do you do about that?
00:25:42 Speaker_03
So I think that the next president is going to face a pretty wicked set of problems and trade-offs here. Even though the GDP numbers are fine, they're good, I still think there's like a
00:25:52 Speaker_03
a wicked set of problems related to government debt and interest rates. And there's no way to really skin this cat without some pain.
00:26:01 Speaker_06
I think the only path is you have to cut spending, which is recessionary, government spending, which is recessionary, so you're going to trigger an economic recession.
00:26:10 Speaker_06
You're going to have to have some amount of inflation, and you're going to have to have a spike in unemployment. And if you don't do the first two things, you're going to have a lot more inflation. which is really hard to get out of.
00:26:19 Speaker_06
So... Well, I agree that we have to cut... There doesn't seem to be a win-win scenario here. There's no... Yeah.
00:26:24 Speaker_03
I agree we have to cut government spending. I personally don't think it's recessionary. I think it helps the private sector when government gets cut. Right. However... Because, Sax, that means the private sector gets to service that function.
00:26:38 Speaker_03
The government won't be consuming all these resources that the private sector could use better. It also won't have as many government bureaucrats acting as brake pedals on the private sector.
00:26:47 Speaker_03
So I tend to think that the real economy will perform better with a smaller government. However, I think the reason why it won't happen is because it's politically difficult. It's extremely difficult to cut spending politically, right?
00:27:02 Speaker_05
right. Well, I mean, as we saw this cycle, every single proposal seemed to be a payoff to different constituencies.
00:27:09 Speaker_03
It was like, right, there's this line in the budget somehow, right? Somebody, somebody fought for every single line item in the budget, some special interest, and they're gonna fight like hell to keep their appropriation.
00:27:21 Speaker_06
It's not even special interests. It's the representatives in Congress doing their job, which is to fight for their constituents getting their fair share or their fair shake at the money that's being spent.
00:27:32 Speaker_06
And that's just the way that the legislative branch has evolved over time. If someone's getting something in order for me to vote for it, I want to get something too. And so the whole thing over time becomes functionally inflationary.
00:27:44 Speaker_03
I think that whole shell game might just be over now because there's no more money left. I mean, it's all been spent. In fact, you know what I mean?
00:27:53 Speaker_03
So like all the federal government probably will end up doing in the near future is entitlements and defense. That's it. Because those are the core functions of the federal government.
00:28:04 Speaker_03
I think everything else that's sort of quote unquote discretionary is probably going to get cut because there's no more money left.
00:28:11 Speaker_05
Tragedy of the commons folks. Everybody acting in their self interest. And yeah, not a lot of coordination or ability to win office. If you actually do what's in everybody's collective best interest and take the medicine.
00:28:25 Speaker_05
Moving on through the docket tech earnings this week, Google has a great quarter. Let's go over that a bit here. Your alma mater, Freiburg. They beat top line and bottom line stock popped 5%. Looks like cloud and YouTube are the story here.
00:28:40 Speaker_05
Total revenue let the sink in 88.3 billion up 15% year over year search was 49 billion of that. And their operating income is now up 34% year over year. I think the CFO is getting some work done there 28.5 billion. And net income was 26.3 billion.
00:29:03 Speaker_05
Interestingly, people are expecting even larger profits. They got a new CFO over there, who said they could push a little further on cost cutting.
00:29:13 Speaker_05
And she said the company will use AI to cut costs by streamlining workflows and managing headcount physical footprint. I think that means more layoffs are coming to big tech YouTube had a tremendous quarter ad revenue 8.9 billion Jamal that's up 12%.
00:29:29 Speaker_05
But Sundar said something interesting. He said YouTube surpassed 50 billion in total revenue over the past year. And so if you do a little bowtie math, that's the back of the envelope math for those of you at home. haven't heard that acronym.
00:29:45 Speaker_05
Google doesn't report YouTube's non ad revenue. But we know YouTube had 35 billion in ad revenue over the last year.
00:29:52 Speaker_05
That means they're doing about 15 billion in premium paid products, YouTube TV, NFL Sunday ticket, YouTube premium, which is the greatest product ever takes ads out of YouTube and makes it usable.
00:30:04 Speaker_05
So 7030 split cloud had a blowout quarter Google Cloud, I see that all the time now. 11.4 billion in revenue on 35% annual growth with 1.9 billion in operating profit. I mean, it's printing money.
00:30:20 Speaker_04
There are seven quasi monopolies in the world. They're all American. And if we allow them to flourish, we'll be good. If we hamper them a little bit, and allow other companies to pick up the white space, we'll be great. Over to you.
00:30:39 Speaker_05
Okay, there's your and that's called analysis.
00:30:42 Speaker_04
And if we break them up, I think that you'll have a lot more the the sum is greater than the parts. I mean, clearly YouTube is one of the great companies right now. Take the perspective of if you own stock in any of these companies,
00:31:02 Speaker_04
The sum of the parts analysis would tell you that the breakup value is greater than the way that these companies get discounted. You can look at the multiples that they trade at and you can see that.
00:31:13 Speaker_04
So if you're a shareholder of the company, you actually silently probably want them broken up because you'll get individual shares that are each will be worth more.
00:31:21 Speaker_04
Separately, if you are a shareholder of the United States economy, you also probably want them broken up because then you'll just have many more companies creating economic value, which then drives the tax rolls, which benefit the United States balance sheet.
00:31:38 Speaker_04
It's hard to see unless you're an employee of the company or you derive a lot of ego from the existence of a company the way it is that you would need it to stay where how it is.
00:31:50 Speaker_06
Well, let me challenge your point on two fronts. In Google's case, both YouTube and GCP required many, many, many, many billions of dollars of investment over many years.
00:32:01 Speaker_06
Same with Waymo, by the way, at this point, that took a long time and a lot of capital to get the payback on.
00:32:08 Speaker_06
If those were standalone businesses and they didn't have the profits being derived from search and ads over many years, they would not have been able to build those incredible businesses.
00:32:18 Speaker_06
So if you do break these businesses up, what you do lose is the ability for an American juggernaut to be able, just like Amazon did with AWS and Apple did, and we can go through the list,
00:32:28 Speaker_06
to build these new businesses that require the cash flows from the old businesses as separate companies, it becomes much harder to make that degree of an investment that your set angle that angle of belly aching is not going to pass muster because it's all about litigating the past.
00:32:45 Speaker_04
and you got to play the ball where it lies. Where it lies is this business is in a position where you can probably demarcate four or five logical business units. Again, I'm not saying that it should happen, but it will happen.
00:32:57 Speaker_04
And the argument of, but the past is not going to
00:33:00 Speaker_06
No, no, no, I'm not, yeah, I'm not disagreeing with your point about like, hey, if these things broke up, people would make money.
00:33:05 Speaker_06
I'm just trying to understand this point about American dynamism or whatever you want to call it, that these companies are all in America, they've all been successful because they've been led by amazing founders.
00:33:15 Speaker_06
They've reinvested so much of the profit they've generated back into building insane new businesses that took a lot of capital and a lot of time, and eventually they paid off, and they became the next generation of ginormous new businesses that would not have possibly existed
00:33:29 Speaker_06
if not for the will and the cash flows coming from those old businesses.
00:33:33 Speaker_04
But you also have a companion economy in the capital markets where there's hundreds of billions of dollars that go and fill in the gaps. And I think the reality is the people in the capital markets are not stupid.
00:33:43 Speaker_04
And if these big companies hadn't spent hundreds of billions of dollars, the capital markets would have.
00:33:49 Speaker_06
So I don't think that if Google, let's just play a scenario and I'm not trying to relitigate the past, but if Google did not own YouTube, what do you think would have happened?
00:33:57 Speaker_04
It would have gotten funded and it would have been fine.
00:33:59 Speaker_04
it would have raised the billions and the reason for it because you do you remember youtube had a real infrastructure under a serious lawsuit i think they would have shut down the reason is because people are smart enough to understand when then there's the potential to make money okay and the free markets do a really good job of highlighting where that's possible
00:34:21 Speaker_04
Again, there is no point relitigating this, but I think it would have gotten funded.
00:34:26 Speaker_06
Could GCP or AWS get funded with $10 million?
00:34:29 Speaker_04
I guess that's what OpenAI is, right? Why does CoreWeave get funded today? How is CoreWeave allowed to even exist? Why doesn't it all go? Because investors are smart. They see that there's an economic rationale for there being multiple players.
00:34:43 Speaker_04
And then there's a smart founding team that creates a justification that gets it going.
00:34:49 Speaker_06
So the era of the monopolies monopoly on building new monopolies is over.
00:34:55 Speaker_04
I don't think it's ever existed. But I think the point is that big businesses are there to eventually grow a GDP so that they can be disrupted by small companies. That's what you want.
00:35:07 Speaker_04
Because if you had the same seven or eight companies, then you could make the argument that we should have stopped at the East West India Company and everything would have been great.
00:35:15 Speaker_06
Yeah, I mean, it is what we did with the railroads. It's what we did with the AT&T. It's what we did with Standard Oil. Like when when these when these monopolies were built in the US, they were all broken up.
00:35:25 Speaker_04
And hold on, it's not necessarily what we did. It's the boundary conditions that enabled other people to then go and fill the gaps. And I think that that's a reasonable boundary conditions. You know, Saks had this great tweet this past week.
00:35:37 Speaker_04
And I almost quote tweeted it, but I thought I don't want to create a lot more noise where there doesn't need to be. tax is paying attention now, but he had this tweet about taking back the licenses for the main broadcast channels.
00:35:51 Speaker_04
And I thought that was an excellent thing. And I quote tweeted something where I was like, yeah, we should buy that for all in. And I said it half jokingly, but I did.
00:36:02 Speaker_04
Because I think that if those licenses were up for grabs, what would happen is a bunch of private equity people would get behind Rogan, a bunch of private equity people would get behind us and we would all bid and the outcome would be better.
00:36:16 Speaker_04
So the point is that these small structural changes, and I know that it may seem large to break up Google, it's not. It's a small thing in the grand course of American business history. It's not going to really matter that much.
00:36:31 Speaker_04
would be good generally through the lens of the individual shareholder and through the lens of the shareholder of the United States. That's it.
00:36:38 Speaker_06
Zach, can you tell us about the broadcast licensing comment that you made? I thought it was actually pretty good too.
00:36:44 Speaker_03
Yeah, there's a history to this. I mean, originally in the US, we had three major broadcast networks. ABC, CBS, NBC, and they were given licenses of public spectrum from the FCC. And those licenses were free.
00:36:59 Speaker_03
But in exchange for them, the major broadcast networks had these various requirements to serve the public interest to be fair, pre pre cable.
00:37:07 Speaker_06
And this was
00:37:08 Speaker_03
Oh, this goes back like 100 years.
00:37:11 Speaker_06
I think it's important to be clear because I don't think everyone understands that back in the day, all the TV networks only broadcast over the air. So they needed radio spectrum allocated to them to do that.
00:37:24 Speaker_06
which was a you know, 100 year old kind of that's 100 year old situation doesn't exist anymore.
00:37:28 Speaker_03
Sorry, that was the only way to get information broadcast on TV was through this, this public spectrum. And so it kind of made sense in a world in which there are only three networks. Because that was the only way to get information.
00:37:45 Speaker_03
to have these fairness requirements and public interest requirements. And so it was heavily regulated. Well, now it's a century later, and there's so many ways to get information.
00:37:55 Speaker_03
You've got cable obviously meant that we went from three or four networks to hundreds. And then of course, you've got the internet and you've got streaming. So there's now an infinite number of ways to get information in real time.
00:38:13 Speaker_03
including video and that sort of thing. You've also got social networks. You've got X and all the rest. So there's no shelf space limit anymore. There's no scarcity.
00:38:24 Speaker_03
And so therefore, tying up this very valuable spectrum by giving it for free to the broadcast networks just doesn't really make sense in the same way. And what we should do is just auction off the spectrum, use the money to pay down the national debt,
00:38:42 Speaker_03
And in that way, it'll go to its most highly valued use. The market will figure out what that use is. If the broadcast networks are the most highly valued way to use this spectrum, then they'll win the auction. But I suspect they won't.
00:38:57 Speaker_03
It just doesn't make sense.
00:38:58 Speaker_05
They did this auction in 2016, right?
00:39:00 Speaker_03
For 15 years? They've been gradually auctioning off more spectrum. But we're talking about here, this is like the most choice valuable part of public spectrum. So for example,
00:39:12 Speaker_03
one of the reasons why the spectrum is valuable is because it can easily go through walls, right? Like you can watch your TV inside your house. And this broadcast spectrum is good at getting through those walls. Imagine the types of
00:39:27 Speaker_03
GPS apps, you could enable with that kind of precision, right? So there's many other ways in theory that the spectrum could be used.
00:39:36 Speaker_03
And you would be able to unleash, I think, a lot of innovation in next generation wireless apps if the spectrum were available. I don't think the public would lose anything because ABC, CBS, NBC.
00:39:49 Speaker_03
First of all, I mean, these networks are basically a commodity now. There's so many other ways to get news, and they'll still be available through the internet and through cable.
00:39:57 Speaker_03
So you're saying to speed up these auctions because they do occur every 15 years or something to that, I think what happens is that the, um, the licenses are actually granted to local stations, like your, you know, your local WNBC.
00:40:16 Speaker_03
Yeah, and then collectively, they have a lobby called the NAB or National Association of Broadcasters.
00:40:22 Speaker_03
And this is why they have so much power is you've got all these local networks, let's call three or four of them in every geography, and they all come together as part of this lobby. And so this is why nothing ever changes.
00:40:32 Speaker_03
But does this model still make sense? No, I mean, it's completely obsolete. But those local networks will all go crazy if they lose their free spectrum.
00:40:43 Speaker_05
Well, they pay for it.
00:40:45 Speaker_03
They don't pay for it now. They get a free license from the FCC in exchange for the fairness requirement and these other requirements.
00:40:53 Speaker_05
I think that they pay billions of dollars for these and like hundreds of millions on a local.
00:40:59 Speaker_03
Every six years or so, they come back up and they get renewed by the FCC.
00:41:03 Speaker_05
I was just talking about the spectrum auctions. I'm looking at it right now. That's different. Yeah. Okay.
00:41:09 Speaker_03
All right. Interesting. No, look, the FCC has auction spectrum before, but not the spectrum that the broadcast networks are sitting on, which is some of the most valuable spectrum. Got it.
00:41:19 Speaker_03
And the only reason why it's being used this way is because of legacy, because this is how it worked 100 years ago.
00:41:27 Speaker_05
Well, and then this parallels into I think, some of the research that's going on right now around legacy media and trust in media, bunch of reports have been coming out about this.
00:41:38 Speaker_05
It's not shocking to anybody who listens to this podcast, but confidence in institutions is tracked by a number of different organizations Gallup being one of them.
00:41:48 Speaker_05
And if we look at how Americans feel, and trust is generally been going down in everything. military. It's also police.
00:41:58 Speaker_04
It's also being tracked in the WAPO op-ed section. Yeah, exactly. And we're going to pull that up, Jake. Do you have that or no? Yeah, we'll talk about it. Yeah.
00:42:07 Speaker_05
Okay. But here, if you take a look at from 2021, 2022, and into 2023, television news went from 16 down to 11 and back up to 14, but is amongst the lowest in terms of trust in and 40% of Americans have no trust in media at all.
00:42:30 Speaker_05
According to this Gallup poll, here's how it breaks down by party, Republican, Independent and Democrats confidence by the Democrats 58% independence 29% publicans 11%
00:42:48 Speaker_05
in mass media, your thoughts, Friedberg, as we look at just trust in general, in institutions, this transitionary period we're in and specifically the media.
00:42:59 Speaker_06
I do think we've talked about this a number of times in the past.
00:43:03 Speaker_06
So without rehashing too much, I think that many of the institutions that have offered media have had to move away from providing data and information because data and information has commoditized.
00:43:15 Speaker_06
It's available broadly through the internet and other places. So the actual gathering of information is now democratized. You know, agencies put their data on their website, stock markets are published on the internet.
00:43:26 Speaker_06
So the internet has democratized access to information. the media companies that have historically been arbiters of information have had to become effectively content businesses, they've had to provide more than just information.
00:43:40 Speaker_06
And what has happened is a iterative feedback system, whereby the more kind of
00:43:48 Speaker_06
angry they can make someone, the more upset they can make someone, the more emotive they can make a reader or a viewer or a listener, the more clicks they get, the more the kind of limbic system triggers that consumer to come back and consume some more of their media.
00:44:03 Speaker_06
And so the iterative development cycle is that things look like they're one side versus another side in nearly every context in every piece of media.
00:44:10 Speaker_06
Everyone is opinionated and making a position point from a side from a perceived side that they are representing, because it is a motive to the readers and the readers come back and they align with that side and they want to have more of that because it incites their limbic system.
00:44:25 Speaker_06
So that's what happened. And as a result, when people look at it and assume that it's what it used to be, which is objective truth, fact finding, information gathering, and it is not that, they're like, well, this isn't even news anymore.
00:44:36 Speaker_06
And the truth is, it's not. Because information is democratized, it's available to you anywhere and everywhere you want it. You can get it through citizen journalism. via blogs, via podcasts, via Twitter, via many other places.
00:44:49 Speaker_06
And so the legacy media companies have effectively become emotive content companies in order to drive clicks, drive views, sell ads. That's really all this whole story is. And I don't think that that's going to shift.
00:45:00 Speaker_06
I don't think that Jeff Bezos' attempt to try and return WAPO back to being a fact-finding organization is going to be successful. I think all the consumers that read WAPO today, they love the one-sided nature. They love the bias that they read.
00:45:13 Speaker_06
It makes them feel good. I think that the people that work there love the bias. They love writing those opinion pieces. It makes them feel good.
00:45:20 Speaker_06
I don't think anyone actually wants boring news anymore because you know what, they can go to a website from the government itself or from a company itself and just read the information.
00:45:29 Speaker_06
And frankly, if they want to get unbiased, honest, factual information, there's 100 other sources. The commentary about off the cuff, etc. You know what that is? That's called authentic conversation. That is how people speak. We all get together.
00:45:45 Speaker_06
We are not journalists. We are not necessarily well-versed. Let's be honest. We mess things up a lot. We say off-the-cuff comments that are wrong very often. But that's just how people speak, and it feels authentic.
00:45:56 Speaker_06
And when we do have signal, I think that listeners and viewers are smart enough to separate that signal from noise, and they are going to make their own decisions about what they find to be truth and factual and what they're going to use to make decisions in their life.
00:46:09 Speaker_06
And that's, I think, how people want to consume information now. It's not being told what the truth is by some fake authority.
00:46:16 Speaker_05
And here is a clip from the podcast last year.
00:46:20 Speaker_03
Podcast could play a huge role, just like in 2016, social media broke through and played a huge role. I think in 2024, I think that podcast could break through and be the way that unorthodox candidates get their message out.
00:46:32 Speaker_05
It could be the way all candidates get their message out.
00:46:35 Speaker_05
we're moving from traditional media defining these candidates to direct to consumer direct through Twitter slash x direct through podcasts, this podcast included, what we're witnessing right now is the transition from traditional media and the establishment, defining who the great candidates are to the public.
00:46:55 Speaker_05
And the people on podcasts and social media who are the tip of the spear on the vanguard, they're going to pick the winners.
00:47:01 Speaker_04
I love you both. You guys totally nailed it.
00:47:04 Speaker_05
Look at that sacks your thoughts on this sort of transition. Interestingly, as we know, Rogan had Trump on over 40 million views now, I think they're up to 100 million views now for that Rogan Trump interview.
00:47:17 Speaker_03
Oh, including like, you literally cannot find it if you search for it in Google or YouTube.
00:47:21 Speaker_05
It's quite well, we'll get to that in a second. Yeah, that's an interesting one. I got to take on that. But what do you take from Rogan getting, let's say many more views than
00:47:33 Speaker_05
the last two presidential debates, Trump Harris 67 million viewers, Trump Biden 51 million viewers. I think maybe Rogan combined with his two episodes will get more than the first two debates.
00:47:48 Speaker_03
Yeah, look, I think this is the first podcast election where you can make the argument that podcasts will decide the election. And there's a couple of reasons for that.
00:47:57 Speaker_03
One is podcasts have gotten big enough that there's enough audience that they just have the reach now to play a big role. Second, the format is highly informative to viewers. You get to see a candidate expound in long form
00:48:12 Speaker_03
being asked questions and having to go for potentially hours at a time. I mean, Trump went for three hours with Rogan. And it's very hard to hide who you are when you're going for that period of time in an unscripted environment.
00:48:26 Speaker_03
I would argue even the hour that Trump spent with us demonstrated that he knew a lot more about policy issues than people were giving him credit for. And it also showed his personality was a lot different than the media had portrayed him.
00:48:40 Speaker_03
So I think that Podcasts have been a great advantage for Trump. He's been willing to do them, and I think he does them quite well.
00:48:49 Speaker_03
I think it's particularly helpful to him in a context where the legacy media has been trying to portray him as a very extreme figure, as literally a Nazi or literally the reincarnation of Adolf Hitler.
00:49:03 Speaker_03
When the media is telling the audience that you're that, and then you can go on Rogan for three hours and show that you're a normal, funny guy who actually knows a lot about policy,
00:49:13 Speaker_03
It's just such a different impression than what the media is trying to portray that has been incredibly, I think, useful and advantageous for Trump. By the same token, Kamala Harris has not been willing to do Rogan, at least not on Rogan's terms.
00:49:27 Speaker_03
Apparently, she was willing to sit down for one hour with him But not in Austin, according not in Austin, what Rogan said is no, we have to sit down in our studio for three hours. So far, she hasn't been willing to do that.
00:49:41 Speaker_03
I think that speaks volumes in and of itself is that she hasn't been willing to subject herself to the same sort of you could call it interrogation or really just long-form conversation that Trump has been willing to.
00:49:54 Speaker_03
But in any event, just I think my bottom line on this is that I think Trump's biggest challenge in this election is just to get people comfortable with the idea of a second Trump term, to get people comfortable with him
00:50:08 Speaker_03
And I think that him going on all these podcasts, including ours, including I thought the Andrew Schultz one was really good too, has helped him, I think, just get people comfortable with the idea of Trump, which I think was just his biggest obstacle in this election.
00:50:22 Speaker_03
Because people definitely want to change and they're not happy with Biden-Harris.
00:50:25 Speaker_04
You know, the one thing I'll say is, before you go on, Rogan, There's a sense of anxiety that I had, which was, do I have enough interesting things to say for three hours? That was really at the top of my mind.
00:50:41 Speaker_04
I think, Jason, I talked to you right before I went on, and that was a big thing for me. And then you go and you get in the seat and he's incredible in the way that he kind of like moves the conversation along.
00:50:56 Speaker_04
And then you end up, you're like, oh, it's already been three hours. That's his superpower. The reason that she should find a way to go to Austin and do it is because he has the ability to allow you to be your true self over a long period of time.
00:51:15 Speaker_04
And I think, again, just going back to the basics, She deserves for herself, for the American people to vote up or down who she really is.
00:51:25 Speaker_04
And all the campaign strategists aside and all of the other nonsense aside, I would want, if I was running for president, one shot at people being able to see me for who I really am. And that's why she should go on Rogan.
00:51:41 Speaker_03
I think she's afraid of that. I mean, she has mostly ducked media interviews and ducked any podcasts that would be perceived as adversarial or not super friendly.
00:51:52 Speaker_05
But she stopped ducking them, I think, in fairness to her, like maybe after she was like in the third or fourth week, she started doing them.
00:51:59 Speaker_03
Yeah, she's done Call Me Daddy. She's done Howard Stern. She's done the ones that she knew would be super friendly.
00:52:03 Speaker_05
Yeah, of course. Yeah. Doing adversarial is probably- But don't you think that Trump did our show because he thought it would be friendly? Of course. Yeah, he started with friendlies, yeah. And why would he do oppositional?
00:52:13 Speaker_03
Well, I think that when Trump did, I mean, we were on the first podcast he went on. Were we the first- Kamala went on that Fox, she went on that Fox News thing. She did Fox News for 26 minutes, Freeberg, and her staff was waving.
00:52:23 Speaker_03
They were on the sidelines waving frantically to get her off of there. But in any event, were we the first podcast to interview Trump? Second. Nelk boys were first. I guess we were second.
00:52:37 Speaker_03
I think that it was really unclear what would happen when you put a major candidate for president on a podcast for an hour at the time he did it. I think he took a little bit of a risk. And I think it worked out for him.
00:52:50 Speaker_03
And then he's done a lot more since then.
00:52:51 Speaker_04
I mean, other than Rogan, Rogan and us have consistently tried to get everybody on all sides to be on the podcast. I think we did a really good job looking back on we've gotten everybody except one person, Kamala Harris.
00:53:04 Speaker_05
Yeah. I mean, I wish I had time to have asked him about January 6th.
00:53:09 Speaker_04
We had all the Dems. That was the only thing I didn't get to on my questions. We had all the independents, and we had all the credible Republicans.
00:53:16 Speaker_06
And to his credit, we were the first for RFK, right? We were the first, but yeah, he credits us.
00:53:22 Speaker_04
First for Dean Phillips.
00:53:24 Speaker_05
Dean Phillips and Vivek. We were the first for Vivek. And so, yeah, I give us some some credit there on the search issue. I looked into that there. Vivek, sorry, I always get that wrong.
00:53:35 Speaker_05
The search issue, there was some complaints that YouTube might have been like, I don't know, hiding the video, which didn't make much sense to people. So I did an investigation of that, Sax. You're laughing. Go ahead.
00:53:49 Speaker_03
Well, finish what you're saying. No, no, no. I have a different point of view than you on this, but I didn't even get my point of view. I know. I've seen it on Twitter, but keep going.
00:53:57 Speaker_05
Oh, well, no, I did a search on Google.
00:54:00 Speaker_03
I know.
00:54:01 Speaker_05
No, I'm not defending Google. I'm just explaining to people how search works, independent of it. I went to bing.gov, search.brave.com, Google, YouTube, Google Video.
00:54:13 Speaker_05
And what people don't understand about how the search algorithms work is they are designed to increase advertising dollars. And Freeberg will back me up this he worked at Google. and session length. That's the goal. Am I correct?
00:54:27 Speaker_05
freeberg with algorithms, whether it's Tick Tock, YouTubes, etc. Yeah, I'm not going to increase revenue.
00:54:35 Speaker_06
I know more about search results. I don't know as much about the video stuff.
00:54:38 Speaker_05
So when you look at that, it's a very nuanced thing. But Joe Rogan doesn't monetize his search. It is not make any money for them. And then clips do make money for YouTube and the clips have flooded the zone.
00:54:52 Speaker_05
So if you do a search on any search engine, whether it's being or brave or DuckDuckGo, Google or YouTube, any of them, what you'll find is the clips beat out the main episodes all the time.
00:55:06 Speaker_05
This happens to our podcast, when people clip our podcast, they will do keyword stuffing. And they'll beat us. And it will beat the algorithm because the algorithm wants to get ads and we don't have ads turned on either.
00:55:17 Speaker_05
So people have this frequent frustration with this week and startups, my other podcasts, all in here, and Joe Rogan, that anything that's not monetized on YouTube doesn't rank high. And if you look all of the clips this makes sense.
00:55:32 Speaker_05
If you just think logically, the clips will will generate more engagement because you get to watch the highlights. So it's kind of like sports highlights.
00:55:41 Speaker_05
Saks, would you like to conspiracy theory this and tell us that surrogate is bagging for the Democrats or something by conspiracy theory, you can just I mean, if you go to
00:55:52 Speaker_03
Google every single day and just type in a Trump related search term versus a combo related search term, you'll see the difference in coverage. But back to the the Rogan thing. Look, Google is a search engine.
00:56:04 Speaker_03
This is what they're supposed to be good at. You have an interview between the biggest podcaster in the world, and a former president who's probably the most famous person in the world.
00:56:12 Speaker_03
It's massively trending, it's got something like 100 million views. At the time that people noticed that you couldn't find it on YouTube, it already had something like 34 million views.
00:56:22 Speaker_03
What I'm saying is you have to work pretty hard as a search engine for your algorithm to be so bad that you can't find that interview. Okay, when I went to YouTube and try to find it first, I typed in Trump Rogan interview couldn't find it.
00:56:36 Speaker_03
Then I typed Trump, Rogan interview podcast, couldn't find it was just clubs. It was Trump, Rogan, full interview, full podcast, still couldn't find it. There's no question that just as a factual matter, this episode was suppressed in YouTube search.
00:56:53 Speaker_03
If you went to the main Google search engine and did a similar search, what you would have found as the number one search result was an article from the Arizona Republic, which is a publication I've never even heard of, that would have told you that the Rogan interview with Trump was a brain-rotted waste of three hours.
00:57:11 Speaker_03
That's the number one result. Somehow Google decides that its number one result for the Rogan interview was this Arizona Republic story. Okay. I mean, that is not a search engine doing its job.
00:57:24 Speaker_03
So it's pretty obvious to me that they're using other factors in deciding what to surface here. Somehow, the results end up being almost universally negative towards Trump and almost universally positive towards Kamala.
00:57:40 Speaker_03
I think you've got to, at this point, have your head buried really deep in the sand not to think that Google is incredibly biased in this election against Trump.
00:57:50 Speaker_05
Let me pull up some facts to show how wrong you are. If you pull up YouTube here, here's an image of the YouTube search results that I just did for the Trump Rogan.
00:58:02 Speaker_05
And what you'll see is, as I explained previously, clips perform better and make money. They make money, so the algorithm favors those.
00:58:10 Speaker_05
And what you'll see here is Fox News, et cetera, and all these clips, and then eventually you get to the Joe Rogan interview. And if you look at Bing search results for Rogan Trump interview,
00:58:18 Speaker_05
What you'll see is all the search engines put news up first, then they go to organic. So it's just a fundamental misunderstanding of how search is designed for users. They start with news on every search engine today.
00:58:32 Speaker_05
And then here's Google's same thing. And then what you'll see here is on the Google and on the Bing images, you have a collection, you know, typically five or six news stories, then they go to the first organic.
00:58:43 Speaker_05
So people just don't understand how search works. It's always news first. when you type in a politician's name.
00:58:49 Speaker_05
And then when you look at the news, or you it has New York Post right leaning, you have people who are dead center, like AP in there, and you have Fox News there in the Google one. So of the first five, two of them are right leaning.
00:59:02 Speaker_05
And AP is obviously in the middle Forbes, I don't know, maybe Forbes is right leaning to Freiburg over to you.
00:59:09 Speaker_06
Well, I was going to say I read somewhere, so I have no direct knowledge about this. I actually pinged several people at Google to ask them what was going on. And I did not get a clear response.
00:59:18 Speaker_06
I so like, I have no insight as to what actually happened. But what I read
00:59:24 Speaker_06
Online somewhere was that someone reported that someone at Google said That there were there was kind of a whole bunch of people that clicked inappropriate content flagging on the video so like anti-trump people went to the video click that it was inappropriate and when when YouTube gets that many people clicking that this is inappropriate and
00:59:45 Speaker_06
it automatically flags it.
00:59:46 Speaker_05
Mass flagging, yes. It is a technique people will use. They've used it on our program here where they flag it.
00:59:52 Speaker_06
Right, so if you get like a million people that say at once like, hey, there's inappropriate content in here, the default is to hide the video from search results while it's investigated.
01:00:03 Speaker_06
But clearly there's something messed up here because they should have been on top of that and responded immediately when the video that has such a large number of views and such a large audience to allow that to happen and drag on for so long.
01:00:16 Speaker_06
But someone said that that may have been what happened. And then they fixed it. I so I don't know.
01:00:19 Speaker_06
But I just want to point that out, that it may not necessarily have been kind of overt action by Google, but just the way that the system is set up that anyone can flag and if enough people flag, you get this.
01:00:29 Speaker_05
And I can tell you, I know firsthand that Google is aware of the claims of bias. And I think you're starting to see it just like CNN is aware of the claims of bias, totally added. CNN is aware of the bias.
01:00:42 Speaker_06
I mean, like, they're very sensitive, super sensitive to Facebook. Mark Zuckerberg is very sensitive to it. I know Sundar himself is very sensitive to it.
01:00:50 Speaker_06
I don't want to kind of hide the fact that these people think that they're going out and being biased, that they have these kind of information empires, because they know that they're going to lose trust, and they're going to lose customers and revenue and etc.
01:01:01 Speaker_05
CNN has done, I think, an exceptional job. I don't know if you watch it at all.
01:01:06 Speaker_05
sacks, but they have been having Trump supporters and right wing commentators in CNN on the desk every Yes, it's really changed the nature of it from being like MSNBC or Fox. Did you know something?
01:01:19 Speaker_06
I've never watched I never watched these shows.
01:01:21 Speaker_03
But like, before we go off on this topic, people throughout this election have been posting Google search results when you just type in Trump versus Harris.
01:01:31 Speaker_03
And i've done it every single time it's massively biased i mean let's just go through this is a search result i got months ago where i just typed in donald trump and do the first carousel was about kamala harris remember joking on the pod that if you wanna find the latest news about kamala harris just search for donald trump.
01:01:50 Speaker_03
And then you go down and the first carousel that's about Trump is negative stories. This one was about Project 2025, which has nothing to do with Trump.
01:01:58 Speaker_03
Nonetheless, this was a major Democratic talking point at the time is that somehow that Project 2025 is what Trump would do in a second term.
01:02:06 Speaker_06
I just did this and it's different now. Obviously this is you said this is a few months old.
01:02:10 Speaker_03
I've been doing this on a recurring basis over the last few months. And the point is that whenever you search for the candidates, the news is very positive towards Harris, and it's very negative towards Trump.
01:02:24 Speaker_03
And even when you search for Trump, they'll give you positive news about Harris. Now go to the go to the podcast.
01:02:29 Speaker_06
And again, you don't you don't think this is a function of the fact that so many media outlets are being so negative about Trump and positive about Harris and so therefore the ratio is just how does the Arizona Republic end up being the first choice when you search for Rogan Trump?
01:02:42 Speaker_03
They're not you know, like, page rank can't explain that they're just not a major publication. They're not being linked to by a lot of people doesn't make any sense. Here's another example. Okay, stay on this one for a second.
01:02:53 Speaker_03
This was after Trump went on the Andrew Schultz podcast. That podcast was a very positive experience for him, as we just talked about. Helped his campaign a lot. What's the number one result when you look for that? You're a public.
01:03:07 Speaker_03
Podcast host laughing Trump's face as he struggles to defend rambling. That's when he had that hilarious story about the weave. If you actually watch the clip, the podcast hosts, they were definitely laughing with him. They were not laughing at him.
01:03:19 Speaker_03
That was a ridiculous mischaracterization. The New Republic is not the objective source for anything.
01:03:26 Speaker_03
I don't know how you could say that objectively page rank should get you to the New Republic as the number one source for the Andrew Schultz interview of Trump. That is bias. I mean, it's just biased.
01:03:39 Speaker_03
There's been so many examples of Google giving these ridiculous results. And they find obscure publications and obscure articles that have no basis in the truth to elevate to the top.
01:03:53 Speaker_03
It's almost like they're trying to find the most negative article they can find on Trump and make that the number one result.
01:03:59 Speaker_05
Yeah, it's not the search engine. It's just the corpus of media that's being indexed. If you look here at Google, Why is it in New York Times then?
01:04:08 Speaker_03
That's the number one thing.
01:04:09 Speaker_05
Well, I mean, just, you know, here, if you look at Donald Trump, you know, if we were to look at these new sources, there's NBC, NPR, Politico and New York Times are left leaning.
01:04:19 Speaker_05
If you were to do this on, I think I have Bing as the next one, you can open and you can look at the next one, Nick, which is DuckDuckGo. In all of these cases, the problem is only three or 4% of journalists at publications today are right leaning.
01:04:34 Speaker_05
And most of the right leaning publications are opinion publications like Fox, etc. And so you just, you don't have a lot of representation in the index of Republicans.
01:04:45 Speaker_05
And that's a big opportunity, I think, for Republicans is to make more publications or take more publications over, like we're seeing with the LA Times and Washington Post, which I think are going to move right... There's plenty of conservative publications if Google would choose to surface them, but it decides that it doesn't want to.
01:04:59 Speaker_05
It's on a percentage basis, it's very small is the problem.
01:05:02 Speaker_03
Here you go. This is Arizona Republic rocketing to the top of search results for Joe Rogan Trump interview. That's a publication that is local to Arizona that no one's ever heard of. It has no basis being the number one result in Google.
01:05:15 Speaker_03
New York Times is second. Okay, I can see the logic at that because New York Times is a big publication. Then you go down one row to the carousel. Oh, there's New Republic again. Why? Because it's calling Trump appearing on Joe Rogan shady.
01:05:29 Speaker_03
And then you've got another one, another one there from the Independent calling Trump a predator. I mean, come on. This is ridiculous.
01:05:36 Speaker_06
Okay, so you've shared these examples. Um, what I, what I would recommend is I think we get someone from Google on the show.
01:05:41 Speaker_06
We could arrange that and they can kind of talk about how the algorithm works because I don't think any of us are going to be able to provide a reasonable counterpoint or understanding of what's going on. And if there is bias,
01:05:52 Speaker_06
And there's some kind of manual intervention in this process. Maybe it can be kind of discussed and talked about why and how and what the automation is that causes this to happen. And let's just try and govern.
01:06:05 Speaker_06
I'll take that as a to-do and I'll try and find someone that we can talk with.
01:06:08 Speaker_05
I mean, they listen.
01:06:08 Speaker_06
They have a conversation. They do.
01:06:10 Speaker_06
Look, I mean, I've talked with a lot of people over there and I have heard from a lot of folks that this is a real issue that folks are trying to address internally so that there's this perception of bias that they're trying to get rid of.
01:06:21 Speaker_06
and they really want to address it. This is what I've heard from people at Google, so I want to give them a chance to come and talk about it.
01:06:25 Speaker_05
Yeah, I've heard the same thing. Pull up the thing I just sent you.
01:06:27 Speaker_06
Look, rather than having us all debate it, or I don't even have a strong point of view on this, I'd rather just bring someone in and talk about it. So let's just move on.
01:06:32 Speaker_05
Just as a counterpoint here, Nick, pull up the thing I just did for Donald Trump, and we'll just, if you do it as an exercise, that's always the way to find the objective truth here, is to try the independent search engines or other search engines, DuckDuckGo, Brave.
01:06:42 Speaker_03
Perplexity. Bing. Try Perplexity.
01:06:44 Speaker_05
Yeah, you could do that as well, we'll see.
01:06:46 Speaker_05
But anyway, if you look here, this being one, if you take out MSN, well, no, if you MSN woke woke search.com, check out MSN, USA Today, Charlotte Observer, Seattle Times, Washington Post, I think these are all left leaning.
01:07:01 Speaker_05
So that is more to my point that the entire corpus of news reportage is 95% left leaning. That's what's happening here.
01:07:11 Speaker_05
And so they need to they're going to need to manually sacks, say these 5% should get represented 5050 in the search results to please the other side, even though that's not what the corpus is.
01:07:25 Speaker_05
And the number of stories written by left leaning just is probably 50 to one. to right-leaning.
01:07:32 Speaker_03
I have an alternate explanation. Can we just pull up this? It's got some data. I'd like to just pull up this data, if I could. If you look at employee donations to party, bi-tech companies, it's all 90-something percent goes to Democrats.
01:07:46 Speaker_03
That's a pretty simple explanation for why the Google search results are horribly biased in one direction.
01:07:54 Speaker_05
Uber's 18%. All right. Let's go to our final segment here. We'll talk a little bit about the election. Why don't you tee us up here, Freeberg?
01:08:03 Speaker_06
All right, guys, I'll quickly introduce our final political election update before our live stream on Tuesday. Obviously, a lot of daily
01:08:18 Speaker_06
freak out daily efforts at having an October surprise that will take down the other side, all sorts of drama, all sorts of insult, not a lot of love in America right now. Super depressing and sad. All sorts of stuff happened this week.
01:08:31 Speaker_06
J. Cal, why don't you kick us off? What do you think is going to happen on Tuesday? What are the things that you think are going to move people between now and then? It's a toss up.
01:08:38 Speaker_05
I mean, that's what everybody's saying. It looks like Trump's got a slight lead. So I think it's going to be a toss up.
01:08:43 Speaker_06
Sachs agreed. Are we 6535 as poly market predicts? Or are we 100% Trump? Are we 90% Kamala Harris? What are we looking at?
01:08:54 Speaker_03
You definitely can't say it's gonna be 100% anyone. I mean, But again, if you look at all the data, the data is definitely pointing towards Trump having an advantage. Obviously, the prediction markets are almost two to one in favor of Trump.
01:09:06 Speaker_03
The polling shows that Trump is ahead narrowly in all the swing states. I think every single one of them, even the sort of blue wall states of Pennsylvania, Michigan, Wisconsin, that Harris must win, I think, in order to have a path to victory.
01:09:22 Speaker_03
Whereas Michigan and Wisconsin are very, very close, like 1% or less in the swing state polls, Pennsylvania polling shows that Trump is ahead by, I think, two or three. That's what I've seen today. So it is looking good for Trump.
01:09:36 Speaker_03
And if you look at the numbers that Elon's group, that AmericaPAC put out, it looks like the early voting in Pennsylvania is trending 500,000 votes better for Republicans in the early voting than four years ago.
01:09:55 Speaker_06
But Saxe, is that just pulling votes forward?
01:09:57 Speaker_03
It could be. Because some folks have said, yeah. It could be.
01:09:59 Speaker_06
Instead of showing up at the ballot box on Tuesday, a lot of folks are doing mail-ins and making sure they get their vote in in mail instead of going in person.
01:10:07 Speaker_03
So then you got to look at polling of people who say they're going to vote but haven't voted yet in Pennsylvania, who say they're going to vote on Election Day.
01:10:16 Speaker_03
And I think those numbers are running about 18 points ahead for Trump, which is about double what he needs to win. So he just to be clear, the early voting favors Harris, but not by the same percentages that it did four years ago.
01:10:30 Speaker_03
So right now, it looks like Trump is tracking to win that state. But look, I can't guarantee it. I'm not representing that, you know, that's exactly what's going to happen. But right now, the numbers are looking good.
01:10:44 Speaker_03
Remember, Biden only won Pennsylvania by 80,000 votes. And again, the swing so far is Republicans are doing 500,000 votes better than they were doing four years ago.
01:10:55 Speaker_06
So there's a lot of stories coming out on Twitter, on independent media, and on mainstream media or legacy media, as we might call it now, talking about, hey, I live in a house, I got 15 ballots mailed to me, all with different random names.
01:11:08 Speaker_06
And these sort of anecdotal stories are being pushed and then amplified by folks that are involved in the election. Chamath, is this kind of dangerous? Do we think that there really is a lot of this of election meddling happening?
01:11:23 Speaker_06
And if not, or if there is, is this kind of a dangerous thing to happen where a lot of people are talking about this where no matter what happens on Tuesday, people start to question the results of the election?
01:11:33 Speaker_06
How much should we be kind of worried about this rhetoric?
01:11:36 Speaker_04
I think there are two things. There's the substance and then there's the strategy. The substance is that
01:11:43 Speaker_04
Does it really make sense that the most advanced and important country in the world doesn't have a uniform system where one ballot is given to every single American citizen who is eligible to vote? That probably makes sense.
01:12:02 Speaker_04
So we should probably just figure out how to do that. Separately, the strategy of it is for both sides to lay the groundwork to say that this thing somehow wasn't totally right down the middle. I am hoping for a very clear, decisive victory.
01:12:21 Speaker_04
And frankly, whichever candidate wins, I hope that it's very clear and decisive so that everybody is forced to deescalate and move on. Now, that said, I think what the early voting data
01:12:37 Speaker_04
shows is something that you haven't seen in the past, which is that there are a lot of Republican people that are voting early.
01:12:50 Speaker_04
I don't know what that means for election day, but typically it's the Democrats that dominate these early voting processes and they build what's called the firewall.
01:13:00 Speaker_04
And in these swing states, these firewalls become very important going into election day. And as Zach said, a bunch of these states are different than they've historically been in the favor of the Republicans.
01:13:15 Speaker_04
I saw an article today that just said that they basically considered Nevada now in the Republican camp because like there's been so much early voting that it's about 60% of the total votes I think have already been cast since they have a very clear Republican lead going into election day.
01:13:32 Speaker_04
So there's all kinds of stuff here that's new. I just hope that it's just an absolutely crushing victory in one direction or the other so that we deescalate and get on to the business of running the country.
01:13:45 Speaker_03
So I'm going to break with most of my Republican brethren on this and say I think early voting is actually a good thing. It's very convenient, right?
01:13:52 Speaker_03
Like why force people to only vote on just one day because what if you get sick or a kid gets sick and you have to pick them up from school? There's a lot of things that can go wrong.
01:14:02 Speaker_03
it is more convenient to have, say, two or three weeks to be able to cast your vote. I actually think that's not a bad thing. And in terms of who it helps, I'm not sure.
01:14:10 Speaker_03
But I think that as Republicans become more of a populist party, and the Democrats become more of an elitist party, I think higher turnout might actually might benefit Republicans regardless. I think it's a huge convenience for voters.
01:14:23 Speaker_03
And I think early voting is something that we should keep. The thing we got to change is in the states where you don't have to present any voter ID, to show who you are. This is crazy. I mean, you just you go up to the polling place.
01:14:37 Speaker_03
And you give your name and I guess your address, they look up in a computer and they hand you a ballot. And there's no verification that you're you are who you say you are. That to me is crazy.
01:14:46 Speaker_03
The other thing that's crazy is that you can even get registered and added to the voter rolls in a lot of states without any proof of citizenship. So there are states where
01:14:57 Speaker_03
you can go get a driver's license without proof of citizenship, and there's just a checkbox to be added to the voter rolls, and no one ever checks you're a citizen, and now you're on the voter roll, and you can go pick up your ballot without any voter ID.
01:15:10 Speaker_03
That's just crazy to me. So I think that after this election, there should be some sort of bill that gets passed and signed by the president that sets a minimum standard for voter integrity. For federal election.
01:15:25 Speaker_06
For federal election. For federal elections, right. Because states can do what they want, right? Like each state can vote how they want.
01:15:29 Speaker_03
I guess states can do what they want, but I don't think states should be able to do whatever they want in federal elections because that affects all of us.
01:15:33 Speaker_06
I just want to point out that each state is effectively voting for the folks that they want to have go to the electoral college, and that's really where the vote for president is cast.
01:15:44 Speaker_03
So that affects all of us. If there's, hold on, if there's cheating in several states and in a close election, by the way, I'm not, I'm not accusing that of happening. Okay.
01:15:54 Speaker_03
I'm just saying that if we have several states that don't have basic voter integrity, and that affects the outcome of a national election, that has a huge impact on all of us.
01:16:05 Speaker_06
Let's just talk about this really important point, which I think a lot of folks ignore. It's not a direct democracy. It's not like everyone in the United States votes for the president.
01:16:13 Speaker_06
What happens is the states send a bunch of electors to go vote for the president. Each state casts a vote. for the president.
01:16:21 Speaker_06
How each state ultimately decides who they're going to vote for for president is through this kind of process that we've kind of standardized across the states, but each state is making a vote.
01:16:30 Speaker_06
So shouldn't the states be able to kind of decide how they want to make their kind of voting process run internally to determine who the folks are that are going to go to the electoral college?
01:16:39 Speaker_03
Yeah, I mean, I think the Constitution specifies that states will run their own elections. And I'm fine with that. But what I'm saying is there needs to be a minimum standard.
01:16:47 Speaker_03
To me, the minimum standard is voter ID and proof of citizenship to get registered.
01:16:52 Speaker_05
I'm in strong agreement with sex on this front. And I've actually done a ton of research into it that I would like to share because I think this is an important service we can do here on the all in podcast.
01:17:03 Speaker_05
I think I had Hans so as a diehard moderate, you agree with sex? I mean, as an American, I know, you know, putting political parties aside, I had Hans von Spakovsky of the Heritage Foundation on this week in startups last Tuesday, you can watch it.
01:17:21 Speaker_05
And they have spent a ton of money and time on election fraud. And obviously, they're a partisan organization, they found 1600 cases in 40 years, it's about 40 a year. They found 23 cases in 2020. None of them were in Georgia.
01:17:38 Speaker_05
You can go search those cases. You'll find cases like this one here that Nick will pull up, Randy Allen Jumper, who voted twice. And the database is amazing. Anybody, they're like crowdsourcing this.
01:17:49 Speaker_05
And so putting all partisan aside, the Heritage Foundation is doing great work here because sunlight is the best disinfectant. And what's really important for Americans to understand is it is impossible right now.
01:18:04 Speaker_05
Absolutely statistically impossible to swing the presidential election with fraud. Brennan Center, they're on the other side, they did a report about voter fraud, and they put it at point 0003%, and point 0025%.
01:18:21 Speaker_05
And basically, you've got a much greater chance of being struck by lightning. And let's just do a little bit of math here. 158 million people voted in 2020, we'll have about 160 million this year, if the estimates are correct. And if you look at
01:18:37 Speaker_05
swing states, right? That's where I think a lot of people are concerned. Oh, what if they could swing it in Georgia, right?
01:18:43 Speaker_05
And we all know from the famous phone call to Brad Raffensperger, who was a Republican secretary of state, and Trump said, hey, you know, we've got to find these 11,780 votes. That was the winning margin.
01:18:55 Speaker_05
So if we were to talk about that, right, and we compare it to what the Heritage Foundation found, 1600 cases documented in 40 years, 40 a year. Now there could be a multiple of that free bird 10 times 100 times.
01:19:10 Speaker_05
But to find 11,000 ballots, this would require in Georgia, for which has voter ID. And by the way, voter ID is in 35 of 50 states already, after this election, it's going to hit 40. Because it's just obvious that we all want that.
01:19:28 Speaker_05
Georgia requires you to have ID to vote in person. And you have to water and they've watermarked the ballots. So in order Shamoff for somebody to do this, they would have to fake
01:19:41 Speaker_05
12,000 watermark ballots and have fake IDs and have those 12,000 people not show up to vote and have two votes there.
01:19:50 Speaker_03
Then it looks like you're just got a great system. But we're talking about the states that don't like in California, they just passed a law saying that you're not allowed to look at voter ID.
01:19:58 Speaker_05
Right. And so that obviously should change. But the point is, even in California, which sorry, no, California, California did that.
01:20:05 Speaker_04
Why do you guys think such a law is passed? What's the justification for that?
01:20:10 Speaker_05
they want to not have somebody who had a chance to vote vote. And it obviously benefits Democrats, if you believe that minorities don't have ID in some greater population, which people have rightly called out is racist.
01:20:26 Speaker_05
And there is this concept that black people or Hispanic people might not have IDs to the same extent, and they would lean Democrat. That is the cynical approach that people have taken. But if we if we look at this,
01:20:41 Speaker_05
It is impossible, impossible to swing the federal election.
01:20:45 Speaker_04
Sorry, Jason, you're saying it's a DEI thing?
01:20:48 Speaker_05
That's, that's what people claim. I'm not saying I claim that.
01:20:50 Speaker_03
I think that's condescending and nonsense to act like minorities don't have a driver's license. I mean, that's ridiculous. Or some other form of ID.
01:20:58 Speaker_05
I think it's absolutely ridiculous.
01:20:59 Speaker_03
To answer your question, Chamath, I don't think there is a good justification for rejecting voter ID. And the law is even worse than that because it literally makes it illegal for someone to ask.
01:21:10 Speaker_03
So if you go to a polling place in California, they can't look at your ID. Even if you say, well, I lost my ballot or something, they just have to take your word for it when they give you a new ballot.
01:21:20 Speaker_04
There's a legal requirement for every employer when you hire somebody to make sure that that person is eligible to work in the United States, if you're going to pay them legally, right?
01:21:29 Speaker_04
You get an I-9 and they need to, you know, justify that they have a social security number. That typically tells you whether you need a supplemental work authorization or not.
01:21:40 Speaker_04
So if you do that for normal, functional employment, why wouldn't you do it for voting as well?
01:21:49 Speaker_03
Of course, you need an ID to get on a plane, you need an ID to buy a beer. Right. you need an ID to do all sorts of things in our society. Right. So it's, it's ludicrous.
01:22:00 Speaker_03
I mean, and voting is something where you shouldn't need an ID because you have to say, you have to match up that the person who's standing in front of you at the ballot box is the person on the voter rolls.
01:22:10 Speaker_04
But why is it more important to make sure that the person sitting in 23 be on the United flight is who he says it is, but it's less important for someone to just walk in off the street and vote for the president of the United States. Why is that?
01:22:25 Speaker_05
Because people believe that certain communities may not have ID, and then they would be not given the right to vote.
01:22:33 Speaker_04
Why don't why don't you allow people to just get on an airplane and just fly wherever they like?
01:22:38 Speaker_05
Why don't Yeah, or or drive without a driver? Yeah, yeah. Yeah. I mean, it's, I'm not saying I agree with that. And so I'm telling you what people have said is the reason.
01:22:47 Speaker_03
I think it's it's cover. I think that's total nonsense. I think it's actually if you think about it, it's insulting to minority groups to imply that they're incapable of getting a voter.
01:22:56 Speaker_04
When you say when you say people, you're saying people in charge. The people in charge of California, this is what they think.
01:23:03 Speaker_05
Yes. And it turns out, it's not cheating. We haven't had a voter ID. they want it. Not every state has government idea that isn't a driver's license.
01:23:17 Speaker_04
Yeah, right. So this is Gavin Newsom.
01:23:21 Speaker_03
This is going to be which is it makes it easier to engage in cheating.
01:23:28 Speaker_04
Do you guys think if Gavin Newsom was on an airplane, and we said, half these people here have just bought a ticket? But we didn't check their IDs? Would he get off the plane or stay on the plane? Do you think?
01:23:41 Speaker_06
Right, and TSA requires IDs so that they can do a check on everyone, make sure that they're not on a do not fly list and all that sort of stuff.
01:23:48 Speaker_05
There's consensus that everybody wants voter ID.
01:23:50 Speaker_06
think you can kind of think about a, there's a do not fly list. And there should be a do not vote list. Like if you're not a citizen, you should be on the do not vote list.
01:23:58 Speaker_06
Meaning you have to be on the I can vote list in order to vote seems pretty reasonable.
01:24:02 Speaker_06
And, you know, the fact that we've got a lot of federal agencies checking IDs to the most important point here is there is no way to swing the election, even if there is a moderate amount.
01:24:13 Speaker_05
That's, that is the most important for people to take out.
01:24:16 Speaker_03
You're not
01:24:16 Speaker_05
worried about conclusion, if people can cheat, then you can swing an election, you can draw it statistically based upon what I've just said, which is the smallest race is 11,779. Remember when Trump asked them to find those votes?
01:24:29 Speaker_05
Do you remember that?
01:24:35 Speaker_03
You're talking about the state of Georgia, which I think is actually has integrity. We're talking about the state of California here. No, I know.
01:24:41 Speaker_05
That's the closest race just passed a law just in your mind, in your mind, logically think about what it would take to get 11,779 people to fraudulently do that, and that they would go to jail and it'd be a felony. So this is that hard to me.
01:24:58 Speaker_03
I'm just saying like, how would you finding 11,000 votes or whatever doesn't seem that hard if there's no voter ID.
01:25:06 Speaker_05
It's not possible. Where would you get 11,000 ballots?
01:25:09 Speaker_03
Maybe not in Georgia because they actually have voter even in California.
01:25:11 Speaker_05
Where would you get up 11,000?
01:25:13 Speaker_03
Hold on a second. California is a huge state. They allow ballot harvesting and they've eliminated voter ID. Yeah, so you're telling me that's impossible for someone to cheat? Nothing's impossible.
01:25:24 Speaker_05
Cheating, we all agree cheating exists, like credit fraud, fraud exists.
01:25:28 Speaker_05
What I'm saying is it's so manageable, that it is farcical for anybody to think that we could swing the presidential election, because Trump tried to swing the presidential election.
01:25:40 Speaker_05
by asking to find 11,000 and he filed 58 lawsuits and lost all of them. It's not possible for you.
01:25:47 Speaker_04
Do you think so then what is the value then of having voter ID Jason if the cheating is so hard?
01:25:53 Speaker_05
Because it would add more trust to the system. And it's always virtuous to add more trust. I think they should also give you a receipt when you vote to make sure there's no shenanigans. And we want to build as much trust in the system as possible.
01:26:06 Speaker_05
But the point here is see reduce fraud. it would reduce people believing that their vote was changed after they left the box.
01:26:15 Speaker_05
So if we all had a receipt, and then there was some debate in a small area, because of, you know, hanging chads, like in Florida, everybody would have their receipt.
01:26:24 Speaker_05
And if you remember the hanging chads case, there were people who said I voted for Gore, I voted for Bush, and my vote got counted wrong. people don't remember this, but you had to push through a card and it popped a chat out of a little circle.
01:26:37 Speaker_05
And there are people who did it wrong, because the instructions were, you know, it's a physical thing, you have to punch a hole into it. I don't know who came up with that system as opposed to drawing a circle. But that that was 24 years ago.
01:26:48 Speaker_04
I'm sure that's true.
01:26:50 Speaker_05
There was a guy named Chad. Yeah, but no, now they are giving receipts to people. So the gold standard is giving a receipt showing ID and having multiple weeks to do it.
01:26:59 Speaker_05
And so if anybody's taking anything away from this, there can be cheating, but it cannot swing the president.
01:27:05 Speaker_03
Okay, so Jason's going in, can I make a point? So you mentioned, I think, fraud rates, credit card fraud rates, didn't you? I think that's one of the things you mentioned?
01:27:14 Speaker_05
Well, the same way, we don't worry about credit card fraud, because there's a certain tiny amount of it in the system. Now, in this case, it would be a magnitude more than voter fraud.
01:27:26 Speaker_05
voter fraud is extremely rare, because there's no, there's no incentive to cheat, that would be worth going to jail for. And that's why people generally don't cheat in these elections, because I was the CEO of a payments company.
01:27:42 Speaker_04
So let me actually sorry, that was sex. Sorry, but
01:27:45 Speaker_03
Let me explain how this actually works, since I was founding CEO of PayPal. Can I just explain this to the audience? Sure. Okay. You can create all the models you want, and you can create an expectation of future fraud based on the prior fraud rates.
01:28:02 Speaker_03
However, if you change your verification standards, that data is no longer relevant. If you create a loophole big enough for a fraudster to drive a truck through, then if a fraudster figures that out, you could have infinite amounts of fraud.
01:28:18 Speaker_03
In other words, the historical fraud rate may not be predictive of future fraud if you change the verification standards. And I would say that the state of California signing a bill that prohibits voter ID might be such a loophole.
01:28:32 Speaker_03
So I don't see how you can say with this kind of certainty and confidence that you're saying that no fraud could ever swing an election. Of course fraud could swing an election.
01:28:41 Speaker_05
Could swing the presidential election. It could swing a tiny election in a state or in a local place. Of course it could because there's a very small number. I'm not really interested in finding out.
01:28:49 Speaker_05
What I believe is that there are some logic, there are some 11,000 is the question, it would be incredibly difficult to do 11,000. Trump tried to swing a big enough loophole.
01:29:01 Speaker_03
It doesn't sound that hard to me. It just doesn't matter common sense. I don't think you can say that something is impossible. What we should do is simply tighten up these requirements. We're in agreement about that.
01:29:10 Speaker_03
I'm just talking about in this election voter ID.
01:29:13 Speaker_05
In this election, you don't have to worry.
01:29:15 Speaker_03
35 out of 50 states starting in January to pass a national voter ID law.
01:29:19 Speaker_05
100% minimum standard for states. 100% we all agree on that. Yes. I'm just saying in this election, practically 35 out of 50 states have voter ID and the ones that don't, the closest margin is 11,700.
01:29:30 Speaker_05
This time next week, we'll be able to talk about the results. We'll see you on Tuesday night with Phil Hellmuth on a short leash for The Dictator, Chamath Palihapitiya, your sultan of science and the architect. I am the world's greatest moderator.
01:29:49 Speaker_05
I'll see you next time.
01:30:34 Speaker_02
Why did you get mercy?