E30: Ramifications of Biden's proposed capital gains tax hike, federal budget, India's COVID surge, founder psychology & more
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everybody, welcome to the all in podcast. I'm Jessie alanis with us today the rain man himself calling in from an undisclosed location the queen of kinda and of course the dc ade himself to moth poli appetite are a boys. How are you doing .

feel flow energy today? great.

How are? Let's go, I love.

Let's go IT. All right, your hot.

You're coming in hot.

yeah. Ah, breaking news, breaking news. Biden has announced, uh, his capital gains tax hike. I don't think this impacts any of us, but hiding will propose almost doubling the capital gains tax rate for wealthy individuals from twenty percent to not twenty five, not twenty eight, thirty nine point six percent to help pay for the social spending and in equality for those earning one million or more.

So nobody on this call federal tax rates could be as high as forty three point four percent. The capital gains increase would raise in to seventy billion over a decade. Ya yoda, for new yorkers, the combined state and federal capital gains rate could be as high as fifty two point two two percent.

In californians, fifty six point seven percent, but has previously morning that those earning over four hundred thousand can expect to pay more in taxes. This was just breaking news a couple of hours before we started the pod. And the stock market is a down and people are freking.

J jack, I want to hear you're taking on this, actually.

tell. Me.

jack, I was ranting on this topics fifty minutes ago. We were talking and i'm like, dummy, I what did you think was going going to happen? You know, he's seen they're going off.

He's in. They're going off. It's like expect a quick or and means so ital again. K when you make an investment and you sell that investment at a profit that you pay, attacks on the profit you make. And there is a difference between capital gains on the short term, which means less than one year, and long term, which means you have the investment for more than a year.

So economic policy historically have dictated that having a low capital gains tax rate relative to what you know an income tax rate might make might be incentivises people to make long term investments and you know gets more money moving in the economy and as a result um you know the economy will grow and so the idea of increasing the long term capital gains tax from twenty percent which is currently is to forty percent um is a real striking you know economic policy shift rationalized as you know, we're going to save uh you're going to use this money for social spending. But I think the historical context and what this is, is really important as we get into the conversation. Um and just speaking historically, the maximum tax rate, a long term capital gains got up to forty percent to sex.

You probably have the history on this in one thousand seventy eight for a year, right, or like seventy six to seventy eight and then it's been largely fifteen and twenty percent for the last twenty years or so. Um and so to jump up and prior to that, in the early part of the twenty centuries, like twenty five percent pretty consistently for a long time. So to jump up to forty percent is a really big shift. And um there's a lot of debate around the economic implications of doing this. I thought that was .

important here let's take a step back and actually see the force from the trees and the force from the trees is that I don't think biden um thinks that it's a credible plan um in as much as I probably think uh he needs you know this is like it's performative um because IT was a lot larger, the number the headline number was a lot larger. Then um what people were whispering was going to be the number right?

I was supposed be like in the low thirties or maybe kind of like, you know thirty three, thirty four um and then I all of us suddenly to come out of thirty nine point six. I think it's almost like, okay, he's he's giving the pound of flesh to the the the left kind of like woke mob of the democratic party who probably doesn't understand how capitalism works in the first place and doesn't care because there are there are participants in IT now. But my reaction is I don't think it's gonna ass.

I think it's going to be really tough to get done. And I think is probably maybe maybe there's a water down version, but this version I am not super worried about. And then IT just comes back to the same thing over and over the the fewer the number of people that get to participate in the growth and see the upside, the more they are that just wants to just kind of you take IT all down.

And so I don't know just yet another signal that we have these structural issues to fix. It's not reasonable that a few people get super rich in. Everybody else gets left on the sidelines.

Sex where you're not, it's gona pass, but it's gona pass is going to be going to pass is an opening salvo where he wants to get to thirty two. So he started at thirty nine.

I think I think I could pass because I think they're y're planning to do this tax increase as part of the second infrastructure bill is not really a infrastructure bill. They're calling IT human infrastructure. We've talked about this infrastructures when the last category ori is a federal spending is still popular.

So there are rebranding a bunch of social programs is as human infrastructure. Um I think that bill will pass. I don't know if the rate will stay at thirty nine point six, but I think there will be a big increase clearly in the the cap gains rate. I mean, I think it's worth remembering how I got to twenty percent IT got to twenty percent because bill clinton lowered IT from twenty eight to twenty as part of an overall package of of of tax reforms that he did in the in the sort of the the mid nineties.

And you know that LED to some of the best years of economic performance, GDP growth in the us, productivity growth, deficit reduction, you know and so you know, I think we are experimenting with breaking something that's been working, I think, pretty well since the the ragin clinton years, which is to have you reasonably low taxes on capital formation and investment. I think it's a category error to treat capital gains or to think about IT just as income. You have to remember that all of this money has really been taxed once, right? So you make the money the first time as income.

You earn IT, you pay tax on IT, then you decide to save some of IT and invested and then you get tax again on that amount. And so couple gains is a form of of double taxation. That was original reason, one of the reasons to have a different tax rate for IT. And you know, I think that this risk kind of messing up the economic recovery that's really underway already.

By the way, think about um what just happens to any organization that has to pay cap gains, right? It's not just individuals like um last time I checked, organizations aren't exempt from cap cains um for profit organza um and I don't exactly know um what they will do as well. So you know you you're putting a lot of people under a huge strain when you're double the the the effective rate of return.

So you know if you're for example, like um a pension fund, right and you have an enormous investment in a private equity funder, a hetch fund, um part of these things is that you know there are these complete pass through vehicles um and so as long as like you structured yourself in a way where you don't have to pay that tax, I think I guess you're in different to fear. Any organization or institution or a person or collection of people that bears that attacks all of a sudden know your returns have been basically cut in half. That's pretty nuts.

Let's talk about the average to for a second our jane as IT were four one case would take a hit here. And then when you go to your retirement and you have to liquidate.

you know, pay tax on the games, yeah you know, pay tax on the four one k gains .

during otherly for one is going to be a small amount. You can tribute your idea. So retirees who happened have stock market gains or cyp to people trading that, yeah.

you basically pay the same as income tax as opposed to pay A A lower tax.

So would a little diminish .

state change? And it's exactly what David says, which is that on the on a marginal basis, what will happen is inflation probably goes up because people just decide to consume rather than invest because they think, well, what's the point? You know there's already risk that I bear.

And so you know the the earliest risk assets, right, the risk st ones that we all participate in, which is early stage venture and company formation, there's you you may not be thinking about the capital gains rate, but it's implicit in the returns that you are expecting for the risk. And the time you onna take, and you know, we've been trained to feel that rate. And if you double that rate from twenty to forty, I suspect that there's a lot of people whose risk tolerance changes and they're gonna feel their after tax gains differently.

And they wonder to themselves, is this worth IT? And then I think what happens as a result is entrepreneurship drugs. I don't know if anybody's done an analysis, but I suspect part of the reason why america, such a, you know, an amazing like sink for capital, right, they would absorbs capital all around the world, is that you've created incentives that get people very excited because they think they can get rewarded if you take those rewards away.

I think the implications are much bigger than just the cap gains rates here. Because as the people change their behavior, then the capital formation pulls outside of the united states, changed their behavior, and the whole thing has an action effect. And IT was more muted in clinton.

IT was less muted in seventy eight. IT basically didn't exist in the forties and fifties. But IT is a huge force today. I mean, like we are an dedit nation that oes money to all kinds of countries around the world, including china. We're supposed to generate growth.

And where to pay the back? And where will the grade come from? If L. P, S, don't want to back venture funds or venture funds and check out.

let's be honest and direct. I mean, are any you guys gna change your investment behavior if the cap gains tax goes to forty percent?

No, but they'll be less of IT, you know. So look, anything, any time .

behavior change.

I think my behavior change. How will I change .

because it's exactly what David said. So I just put on one hundred million dollars to to a climate change company two weeks ago, uh under this promise um I can only put in fifty. So there's fifty million less progress that's gonna en on that business. I'm not sure that, that was that the right answer for what that companies trying .

to do in the world.

And the are you're in the profit you would have had from before our diminishing have, therefore, you would only have half as much money to invest as an investor.

right? So so however way you want to cut IT, whether it's like the ten companies gets cut down into five or the five, ten companies that I investing get half my money, the point is at some point the money starts to run out.

not just for me, but for basically the the money goes into the hands of you know government legislators and administrators to decide how that money get spent. And it's not in the hands of, uh, capitalist investors to decide where to invest that. That's the fundamental kind of shift that's going .

to the right ital capitals been taken out of the economist capitals been taken out of the economy is going out, going to be, you know, spent by government, look.

And anything that you tax, you punish and disinvited, you subsidize you, you've create and center for there be more of and you know, so this is just we always talk about these things in terms of who they get to hurt is are this only falls on the backs of rich people? So we shouldn't care. But the real question is what is going to do to the economy.

And know, I think we've talked in previous podcast, the last part that we have with my arsenal IT feels like everything in the american system is kind of broken, except for one thing, which is this sort of opportunity economy that that's being created by risk capital, right, and people creating new companies like these big, still tiffe political corporations. The S. P.

Five hundred completely broken. Governments completely broken. The federal debt is out of control. Everything the media is broken, everything in amErica is either broken or need few of violist ed or reformed, except one thing is working really well, which is risk capital and its allocation to founders who have nothing but a good idea, right? And when all the sun, you double the cap gains rate, that is an attack on that opportunity society.

I think there is a legitimate conversation to be had about how do we spread this sort of system of opportunity to more and more people. I think, like brad framed IT really well in the last episode. Like how do we get more people involved in that? I would submit the answer has a lots to do with schoolmates and charter schools, giving people everyone in this country deserves have a first raight education.

And so that is a very legible ate conversation to have. But I think to have pune of taxation on IT is, I think, at risk breaking. The last thing that is working so well in the american system.

I think it's really well, sad. And I think this is gonna we domiciled to another level. I mean, if you're in new york or california right now and you're thinking about whaling or ut, texas or florida, I mean, this kind of makes the decision for you. If he does go afford a because that you actually meet, would you get to neutral if you left? And so I remember.

remember when I moved to the united states in two thousand, the marginal tax bracket that I was in and I was making maybe, you know, a hundred, no hospital, making eighty or ninety thousand dollars a year was fifty five percent. And I remember coming to the united states and seeing my, after my take home pay, my first paycheck. And I was shocked because I was like, you know, I was paying maybe thirty six percent, all blended in federal and local at the time, in our state, at the time, in california.

And slowly, slowly it's scraping up with with, if you played out today where we are plus new york's stages past laws, you're gonna sort of in the fifty to fifty five percent almost supports of fifty six percent for certain folks and maybe the answers is that the right thing? Um but I think we have to acknowledge that there's going to be a bunch of unintended consequences. So maybe the intended consequence is to actually create more um equality between the richest st view and you know uh not even the poorest Frankly because but it'll just be the richest few and the the next richest few quite honestly because like you know, the investing class is still a small number of people um but the unintended consequences of that decision I think is what exactly what David said, which is that over the next five or ten year period, you will at a practical level see less investment.

And the the only way to make that whole is if the government then takes all that money and all of a delegates IT from their own coffers back into the economy and we know that that's not gonna en well, right? That's just gonna riddled with waste and graph and corruption. So unfortunately, the set up is that, you know, you're gna really impact entrepreneurship.

And then then I wondered to myself, by the way, guys like what was the actual goal of this, meaning there was twenty or thirty guys ever just making so much money on their equity. But then then we need to blame like the these lists, like the form's billionaire list, because those are inaccurate, because a lot of this stuff is like unrealized real list paper gains, right? And so they're not they're not paying any capital gains because they haven't sold anything. And most of these guys that are uber, uber rich have no desire to sell because it's for them, it's a control issue to sell.

Are not sure the consequence of taxing uber rich people is the true motivation. I think for some people, maybe IT is. But um if we just take a step back, I mean, a year ago, the U.

S. Debt level was significantly lower than IT is today. We've taken on a tremendous amount of a federal debt to fund a series of programs that we believe we're going to, to keep.

Um you know the american population employed and keep our economy moving. Um that was a massive burden. We crude and the in the past year.

So ultimately over time, the only way to kind of support this this new federal budget and um you know the this new service and costs that we taken on to the government level, you really only have kind of like three options. Options one is you're gonna continue to raise more debt than massively kind of inflate everything in the dollar declines in value. Option two is to reduce spending, which means starting to cut these programs and option three years to raise taxes.

And it's pretty clear that option one is one where we kind of already at the economic limit. Option two is going to be very hard to swallow at a time like this. So you can't just cut spending right now across the board.

So many aspects of the U. S. Economy and so many individuals in the united states are dependent on the federal government for support.

And so option three is the only real one that left on the table. And so then the question is, who are you taxing? You're not going to go tax the people that are struggling. You're going to attacks the corporations and the wealthy.

And the the capital gains tax is the one place where you can kind of say, look, be tax rate that you're paying today is half of what an income tax rate would be if you are earning that as income. Let's get IT to be fair. And even and I think just to argue the other side, like there's a motivation that there's a point of view where this is coming from. It's not just let's go tax the rich, screw the economy is that we find ourselves in a circumstances, need to do one of those three things. The most rational to do is to or the most kind of sensible politically uh, to do is to is to increase taxation and this is the the first place to go, the most obvious ous place to go.

It's not because so when you think about like so for example, like you know, you would say, okay, who are the folks that we're talking about? There can be entrepreneurs that are building companies again. They're never selling. So they're never gonna pay these taxes like it's not the case that elon moscow k OK berg is all of us are going to write a forty billion dollar check because that's that's not how much they make that maybe how much their works, but they will never sell a single share unless they have to defund some other project in which case three .

things would you do to so so .

what I was going to say so and then and then you look at somebody else like maybe you say, oh, well, you know the people that manage money, like let's go after those guys because like those guys shouldn't be rich, but in the promise those guys are already paying w two income. They're already paying nominal income taxes. That's how the entire hetch fund industry works right now.

You know um you get paid in current income um and so okay, so you're not getting their money because you're already paying at the prevAiling rate. So again, this goes back to if you actually trace the problem and see who IT affects, it's exactly what David had is these folks that in the middle that are actually putting the money to work, that are trying to investing things that now have a very different return profile. And you're write the core business that they do, they may still keep doing, but then all of the incremental things in the future that they wanted, do they want to, for example, look at all of the talk right now about how everybody needs to stand up, you know, more Angel investing, more minority investing, more women GPS, all of this stuff.

Well, all of the folks, I just be honest, all the folks that are, were in a position to put money into those folks are now fifty percent of a tolerated basis poor if this thing passes. And I bet you what they're going to do is you're not going to cut their allocations in sqa. They're going to cut their allocations to all these other folks.

Yeah, that's exactly what I was thinking to.

Mother is who's IT going to hurt? It's again, it's going to hurt all the people that you want to get into the game. It's can hurt all the people that are here, but the richest, richest, rich folks. That is not unless you impact, but unless you x appropriate the money from them, that's not you're not going to .

get a single set. And then that was the concept of the wealth tax wasn't IT that you would take total value that you have and just take away one year from bavois or soccer bergs hundred billion dollars. So would that not have been a Better .

solution than this if you had to pick one cent? No, Better a public, also an expropriate of mine because we don't like the way that the mining is happening. Or you know, another critical asset because the government decides that it's important.

I mean, what's the difference between the stock and any other asset that either a person or or or a corporation? It's it's very uh, I think that the definitions are thin. They're all the same things at the end of the let's .

go back to the federal budget problem like how do you address IT sex? I mean, what's the right course here?

What I think is amazing is, are about to spend. We're raising this punters of billions of taxes order to fund trillions of new spending. I don't really hear the administration selling these new programs, selling the spending.

All really talking about is there's too many rich people. We have these millionaire and billionaire. We got tax and more. And so all all we're really talking about is whether it's appropriate to be punishing the rich and super rich. We're not really talking about where's this money going.

Are these programs justify what do we get out of IT? Exactly at my point is forget about like who is going to heard. I think it's eventually going to hurt the economy.

And the question is what do we get out of IT? And I think what amazing is this is even paying for the big ticket items on the progressive wish list. We're not getting to universal health care with this.

We're not getting to universal hier education. We're not getting to any we're not getting to like forgiveness of student loans or anything like that. We're not getting to any other really big ticket items on the progressive wishful.

And yet we're maxing out the taxes relative to anything we've done historically. And so where do you go from here? Because inking is the tip of the iceberg and of the progressive agenda.

Doesn't that speak to the problem like the fact that we have such an extraordinary high a debt burden and federal budget that we're kind of scrambling to figure out a way to kind of make to meet effectively, right? And our alternative, again, is to just like massive inflation run, you know, issue a ton of A A ton of new dead or to cut spending?

No, David, to be on the table? No, no, no. You're going to exacerbate this issue. I am telling you, I know IT doesn't seem likely, but I think on a marginal basis, this will be an incentive to spend. And the reason is that it's a very frustrating idea for somebody to think about putting money in the ground, especially a sophisticated investor um at a radar of return that just changed in half.

And so from my perspective, I would be more likely to spend because I would rather just follow the money then I would rather put IT into the ground because I would be worried that, that could then get taken away from me. I could also change even further and further. And I think that's a very frustrating idea.

I'd rather take a vacation again gleg. Go back to the example. I'd rather take a vacation with thousand dollars, then go on to Jason, indicate and put them into the hands of folks because i'm just like, you know what it's gonna turn into even if even if jon hits IT nike pack, you know, i'd rather just go on vacation.

Enough of those decisions. And I think I think you have a very different kind of economy. You have you know what you have.

You have what everybody else has. So do we reduce spending? I think you have to reduce expenses.

I think that we have an infrastructure that is not well accounted for. Meaning, if you're a company, you can go to a company like tables. You can go to a company like, you know, pick pick your metrix company.

And within you know, a few weeks and months of work, you can literally understand where all the dollars are, right? You can understand your business and you can figure out where money is being wasted and where is not in the government. That's impossible to do, right? Because you have these laws, and these laws are artificial constructs that we construct.

And those artificial constructs are influences by money in of itself. And so these dollar floats are impossible to maps. You don't know where to go. So for example, the seven hundred billion dollar budget in the pentax.

Does anybody have any idea what the R Y is on that? Or even a way to measure IT, like even to actually make a simple like if you are if you have seven hundred billion dollars of investment capital, the the market has a really simple way of saying, okay, David, what's your boy? What's your return on invested capital? And you can say all kinds of fancy things.

You can have all kinds of fancy projects or simple projects. But at the end of the day, what is measurable is a dollar in and what that dollar grew into, and that's a return on invested capital. IT is impossible to know that.

And so you know, we could say, for example, you could define IT and say, well, i'm going to basically get every single person to graduate high school. And now when I spent five hundred billion dollars here to make sure that the graduation rate is one hundred percent, that would be an incredible goal. You know what? That is absolutely measurable, right? And and you'd be able to back into all of these programs and the one that ones that didn't work, you'd cut and you'd end up with what David said, which is school vouchers. Um I mean, just think I think .

the absence of that accountability to mop has LED us to A A A scary dilema and the dilema is over ten million americans are directly employed by federal government and a large swap of the remainder of the economy is supported by federal government spending, which is basically your point, right?

So large large amount defensive military construction, health care farmer, the this goes on but like direct employees of the federal government, plus the amount of revenue that depends on federal spending is so significant now as a percent of the total income generated by americans, that IT is very hard to say. Like, let's create accountability in a system when so much of the economy is functionally dependent on IT. I missing something sacks like, I mean missing about the circumstances and right now.

yeah I mean, the thing that like is amazing to me is, you know, I live through the one thousand nine hundred and ninety nine and I like you guys did from one thousand nine, eight, two to two thousand and eighteen year period, we had sort of arrival economic performance. IT was roughly, we had two bad years under George huber walk oppositions why he lost reelection. But we have close to four percent growth and GDP every year. We had great productivity and we had massive deficit reduction.

It's the last year cent a year.

yeah and and we actually had government's surplus of budget surpluses the last few years. So IT seems to me that we had the winning formula as a country. And at look, this is not partisan.

I think it's by partisan. And I think the right solution is somewhere between what what reagan and and bill clinton did. And you know, clinton and he rose, he increased individual tax rate to thirty nine point six.

So he did do that from thirty six percent, but he cut from, he cut the investment to the captains rate from twenty eight to twenty IT was in that bowl park. You know, we know that works. You we know that works. I somehow we've moved away from what we learned in that time period because, you know, I think the left in this country has has become kind of has embraced this.

We're saying the same thing. You set up the incentives for people to invest, they do. If you set up the incentives for people to spend, they will do that as well.

I I see this. I think chamar is exactly right. There are a lot of people, and you use the example of the cdc.

Dom, when I do my syndicate deals, there are people who are recreationally saying, you know what, I love the idea putting five or ten k into a flyer. They are good. You know, half of them were away, a third of them all.

These people who are involved in daydream or crypto or real state investing, they're going to look at and say, is this worth the time, or is IT worth this amount of time? Maybe i'll cut back from doing forty hours a week of this to twenty. And if you look at what happen encrypt o people, they went to put a eco.

You look at what happened to venture capitals and CEO. They went to florida and miami, Austin. This is gonna. If IT does pass, you could be pushing people to singapore.

Well, we have another very complicated problem. And this is what freebooter rought up with. And I don't know the answer, David. I'm trying i'm actually talking around your question because I I think it's it's it's the right absolute question.

But think about this, what happens in the world where now let's say that the revenue of the government goes up, right, but outcomes stay the same or get worse. And at the same time now and you could claim that that's effectively what's been happening over the last twenty or thirty years, right? Government revenues have gone up impact to stay the same or probably been net negative.

But then at the same time, you have this you know program of quantitative easing where then you can essentially print money on demand. And when you think about that, it's a wait minute, I am giving you money, but then then you are also going to the photo py machine with my money to make more money. And all of that total money does less then what I did when I was half fat or a quarter or a third of IT. That's a very scary realization, I think, that people will eventually come to um and I don't know what the answer to that is.

I you know I I think David sexy said that which is like you know the states are this incredibly b test, right? Because you get to test like theories, right? And you have you have now every completion of theory, you have like you the low tax states, the low tax states, the mid tax states, you have high realistic taxes, low realistic taxes, highest state that whatever you get, every grab bag of incentives and you're onna see but the problem is that was assuming that the federal government kind of mostly stay out the way right when you have .

this mess ve overly yeah just posted a chart in the chat then you can put up which is federal spending federal outlays er percent of GDP and is really interesting because federal outlays of percent of GDP have generally been around the twenty percent line plus reminds a couple of percent since of the one thousand nine hundred eighties and last year in two thousand and nine and he was twenty point seven percent IT jumped ed at thirty one point three percent under covered and IT now feels like we're trying to make this new level of you know going from trying to thirty permanent.

It's like my master.

Well the the the problem is the only time we did that in history was in world war two. Now we were trying to fight the nazis, which was worth spending the money. Now I say that was a good use ital.

but it's very a step back, right? And what starts out as temporary becomes permanent is that kind of the concern?

Yeah what free man said is there's nothing quite so permanent as a temporary government program, right? What they're thrying to make permanent is this new permanently higher level of federal spending in the economy. And I think it's a very dangerous experiment because IT either takes tremendous money printing to support IT or a tremendous tax burden, and neither one of them is good for the economy.

By the way, you know again, when bill clinton left office, remember you you can go to the the the time machine for White house dot gov. When he left in two thousand, and he dragged about how, under his terms, under his eight years as president, they reduced federal spending from twenty two percent the economy to eighteen percent of the economy. Can you imagine a democrat today, boosters of that.

even a republican, I mean, who was the guy, who was your guy who was like the tea party people? There was somebody who was like, in charge of the, I don't know who was, but I was just like, we got to cut spending.

spending ryan, a speaker, speaker, the house, paul, I. Are right. You're right. Spending restraint kind of gone out the window in both parties and we were public and IT did happen on the trump. The republicans don't seem to find their principles on spending and less and until there's a democrat in the White house, so they definitely deserve they're share of the blame on this. But but we do seem to be entering a new territory here of, you know this again, levels of spending we've never seen before.

It's incredible. It's up. The problem is that would be so much Better if we just said we're gonna this one very specific thing with a huge number attached to IT, like I would rather say, we're going to mars.

Here's a trillion dollars. We are cutting student debt. Here's a trillion dollars. We are going to double down on cyber and we're going to get, you know, completely pivot the military or something. And here's five hundred billion.

you whatever, something inspirational that is not just entire rich people.

Let's right now we we have labels, we have a label and then we have a spaetzle ss of spending that just isn't really attached to what the label means and none of IT is accountable. And so you don't really get anything for IT.

I know this is a silly question, but why wouldn't we test this and say, hey, twenty fifty, there are numbers between these two. Maybe will increase in two percent a year for eight years and will .

see what happens. This this is the other problem with like this idea of american exceptional ism. We believe that we can learn anything from anybody else.

And that's also not true. We actually know what that looks like when you have government as a massive portion of the economy. And we also know examples where government basically enables human capital outcomes, but remains relatively, you know, small and fixed. Singapore, right? This this is incredible. You know there is an incredible example where I think, uh, right, when liquid you became a the head of singapore, the GDP of singapore was the same as the GDP of jamaica, right? And what you saw was as complete just complete divergence in in these two countries.

And think about this country, which is basically just like, you know this little spot of land surrounded you know know a political, a religious, surrounded by these muslim countries and they still thrived and they kicked out you know they were never invaded at sett seta um and underneath that was this belief that is what you said freeburg were you focus on our outcome. You spend against the outcome and you try to measure in a reasonable way and you double down on the things that work. And then on the other hand, if you look at europe, europe is a good example. When you know spending sometimes for the greater good in the best interest can run a muck. And really, what happens if you start to staging 嗯。

yeah, I think singapore only. What six million people. I mean, it's like ireland or norway or denmark. I mean, it's this is not a huge place.

Didn't solve any problems in last peace.

We didn't believe. I mean, I mean, what do we think going to happen in four years? Does does this give Donald trump a clear path into office if he said, hey, what .

happened in france when they seventy five? They introduce the wealth tax and they had massive m immigration of of invested dollars out of .

the country and people out of the country. They did get rid of George. A onus.

yeah. At what point? How many red pills do you guys have to take before you are willing to assess your political party? Because this seems obvious to me.

Now look, we can talk about how about talk about, talk about how about publican party is. But there's no question in mind that the democratic party, all the energy, the base, the activist and the politicians who have the microphone, they are awoke social. Okay, that is the dominant ideology in the democratic party. And what biden is doing right now is caters to that.

He's a catering to that until this point. He didn't put bernie or I was with warning into any cabinet positions. He kind of margin zed them. And now he's like, okay, let's do this. Somebody, I mean.

would warn and this is, this is, I think, no, j Jason, I think you are right. This is why think this is like a sacrificial al lamon. I don't think anything's gonna en.

I don't. I think biden is a fundamental center. That's why I like him. I think he's a boring. He's a, he's a stable, predictable figure and that I think what you want in the in the presidency, I I think that this is sort of like, okay, you guys want a pound of flesh, here you go but I think he's so politically smart that he probably does have a bunch of millennial works socialist whispering and chattering like I do this, do that to the other but he's probably the only one there who smart enough to realize none of this won't get past, you know.

it's not going to muster enough support not governing like a centers right now. He he's proposing what more trillion of new spending, new tax increases and he's just getting started. But look, and which chAllenges idea to slightly of him being a century.

What I would say is he's always tacked the center of the democratic party. So I do I do think he's he's a gulati and a calibrator. He's not like a conviction politician in the way that a berny centers design that was with warm.

But what he's talked to is the center of the democratic party and the center of the democratic party has moved very far left because all the activists have moved to the left. And so he's done drag left rubber. Biden was clinton s floor manager in the senate when he passed all this legislation.

And so now biden is very far to the left of where biden was in the ninety nineties. And the reason for that is because the democratic party has moved. So once again, I guess, you know, my questions, all of you guys, is, what does IT take? How far does the democrat .

party have to go to the level?

P. O. I want to call all as much of a radical policy shift as I think it's being framed. I honestly think this is a natural and inevitable consequence of the circumstances we find ourselves in right now with respect of the spending level, the dependence we have on federal spending across the board, with respect individual employment in the economy, the need for a variety of social services to get us through this covet economic collapse.

I just don't see another way out, and I feel like it's the natural course to do exactly what's going on right now. I I think it's going to pass. I think something like it's going to ass.

I think something like it's gonna pass, but I don't think it's onna is a bad. I think obviously.

we just find ourselves in the circumstances, this country, in this woman time, that this is the only path. Just not sure you can go and go slash a ton of spending right now and and you know and anyone would win reelection or any you know or most americans would be anything but unhappy. It's just just the consequence of where we are.

Let's play the glass, have full. Here's a crazy idea. Okay, you know, for example, somebody like me, what I would think about, which I think is, is a little it's crazy, but I would do IT is okay.

I'm just going to move literally every single thing, every dollar that isn't nail down into a charger vehicle. And I will invest through my charity because I still have to donate five percent a year, but then I can compound tax free. Now I care more about the businesses that i'm a part of and the progress that I can create.

So that may be OK and i'll just pay myself a salary to like fun my lifestyle, but that could be a way around this. To me, the biggest issue isn't how much money I have personally, the biggest issue is how much money I will have to put back into the world. And the idea that then he goes to a place where it's profitted tly spent in a way that is accountable really bothers me.

That idea bothers me a lot, David. That would cause me attack, you know, more, even more to the right, if I could find somebody who understood that principle because but I don't want to have this, you know, in the absence of social programs, like the problem that the republicans leave is is no mans land where then you're forced to believe that this one man for yourself, it's all about you. You can figure IT out, you know, the rugged individualism.

That's just not real, alister. Like I, I, what am a complete by product of a social safety net at that should exist. And the problem is that republicans don't give you that option to have an accountability on spending when just somebody please just say that I don't care what you call yourself yeah luck I think no.

I think republicans have got a lot more comfortable with the idea of entitlements and the social safety net. I don't really hear anyone opposing that anymore. I mean, it's the same thing happened with like the tories in in england.

You know, no one's really trying to roll back the social safety net. We need a republican message to come forward and say, listen, we don't care you know who you love, what you smoke, where you're from, what you look like. We believe in an opportunity society.

We want to spread the opportunity to everybody. But ultimately the opportunity comes from the private sector. We're going to have a strong social safety net. And we're onna basically give everybody the most opportunity, participate by giving them a great education. That's basically what the agenda should be here.

I mean, I even the .

starting line. Hello.

I like, I mean, I would problems your boy tried .

to disable obamacare. You know.

that is a promise. Trump, like trump. I'm never trumper, obviously. But i'm kind of purple. I would, you know, i'm conserving Austin or miami as as a place to locate myself. And decision like this makes IT easier.

I never.

I'm .

actually, I I love texas. I love Austin. Austin the kind of purple I like, like, I like personal freedom. And I like what you're saying, like love who you love, smoke.

which you want. What year did you move to the area?

Five, six years ago I was in a late for ten, new york for thirty. I feel like it's .

the last in first out thing that's going on right now with respective immigration at a california.

I been here since two thousand. I'm not living yeah.

i've been here my since I was six years old in california. I'm not live in and and i've been in the baris in the college. So I feel like it's a lot harder to leave when you've been here longer. It's lot easier to leave when you've been here last time. That certainly seems to be the pattern i've seen amongst friends and colleagues with respect to leaving the state.

Uh, all right, the show of the trial um came back guilty, all three charges.

What is there even talking about here? What is to talk about? why? Why you can I give.

can I give a shout to a really good trend of mind? His name is neil katcha. He was the former source of general under obama.

He he was uh one of the prosecutors that that worked on that case um is he's a partner at hogans um runs a screen core practices but basically went into this probe on a trial uh the behalf of the state of in the sort of of working with the the the this journey and I just I just want to say neo proud of you is an incredible thing um thank you for keeping amErica say, yeah I mean, you know it's crazy so like but then you know the same day there there was a shooting of this this unfortunate shooting of this. I think, I think he was sixteen, sixteen years old, this black roland, ohio. And then, you know, lebron witted something out. And then lebron had to basically delete the tweet because he was causing people to go absolutely crazy.

Well, I mean, each of these situations is unique. And in that situation, somebody was going to stab another person. The cop didn't know what was going to happen. And in in another time period, like maybe that would have been saving somebody's life who had potentially been stabbed in, you know, the George, for I think you had a reserve judged on each of these until you get all the information. But the information here was just super conclusive, like the the dynastic expense ero and some of these far right people had to go through to say what you saw George floyd being murdered was not what happened.

But that's that's performative theater trying to get people to .

watch something. And I mean.

he just gross to watch. I call IT what IT is like. That's acting. I feel like probably if if anybody, if any one of us found bench pero in a bar and just hang out, had a beer, you'd find out that he was like, he was like the moral street of our generation. You know, like this incredible action.

like .

credible actually .

got in his pockets. All these guys are just trying to figure out how to say that this was a travesty of justice. And like, I don't know what you saw.

but yeah, let me explain where they went wrong. Okay, so so look, I agree with you guys fundamentally. This was an easy.

This was finding a fact by the jury guilty and all charges obvious, right? The tape shows IT is the show, then record as a cop, numerous complaints. You know, this was a bad apple.

This was a Better cop. He is serving, convicted and a story. That's where is the analysis should end. But of course, the people on cable news would have nothing to say if that was the end of IT.

And so look, I think both the right in the left kind of went off the rails on this, where the right kind of went off the rails is you had, well, what happens? You had magazine waters, you know, come out. And while the jury was still deliberating, SHE was basically calling for activists to get more confrontation on the streets of the verdict. Went the wrong way.

And so then the defense, helpful not helpful? right? And so then the defense made a motion saying that this was affecting the deliberations and there is no proof that the the judge ruled against that motion, but he did.

The judge reiterated his desire for the politicians to stop talking about the case, right? And so then what happened is that the right wing commentators were criticizing magazine waters and implying that that there was an effort to try coerce the jury, and there's no proof that right. And I think there is, the mistake isn't somehow framing Derek shovin as like a sacrificial lamb to the mob.

He was not. He was guilty. He deserved IT. That being said, I do think that the judge had a point that would be helpful of these politicians were to stay out of IT, stop commenting on IT while the jury is deliberating. I think there was a legit point there.

But you know, the left made some some weird comments as well. You had Nancy policy made. This really was very strange.

I think that was like a slip up of like just trying to say something not, I mean, being charitable, SHE was trying to say something nice that George floyd d is going to create a wave of justice and that's a great idea said.

yeah he said, thank you, George floyd for sacrifice in your life for .

for justice .

yeah exact no, no. I mean, because look, IT did not go out that day intending to be a matter no and and so it's sort of expressed kind of what he is thinking, which is how going to .

use this politically .

train .

came up for.

I think that's how they are trained. It's kind of like, you know if you if you take a finally turn deadly in the sport and give them you know they're just they're reactive because they are so instinctual I think it's kind of like this. She's an incredibly finally trained athlete in her domain politics and so you know what is that phrase um uh every crisis is an opportunity kind of thing so yeah I mean.

they all flew there to be there for the for the trial exception that couldn't have helped the judge with you know the impartial jury and maybe that causes a this trial I mean, I don't know if if you're an attorney, is there any chance on appeal that a maxi water quote like that could result in well.

the just the judge actually said that the defense could reserve that issue and use IT on appeal. So yeah, they could use IT. But I don't think I don't think it's going to work unless they can prove that somehow the jury was contaminated by what they were hearing on TV digges instructions .

were pretty clear. Like I I watched a couple of the ending days and he's very clear. Like he's like, guys, I don't want you to wash the news you know the support that he was very directive and making sure that they try to be as uncontaminated as possible. So I think the the surface of for an appeal is pretty thin here.

The fact that the police chief and everybody who worked with him said like this is not standard this and they just throw them right into the bus. They didn't want to be associated .

with this in any way. They are behave much long as though because the D. O J said the opening investigation in the minnesota police force. So I think they're just trying to crack open the police reform in that state and just kept those guys on the right side is going to be no.

But again, here's this other issue where it's like, okay, this is where like there is very difficult for the federal government to do anything. But you know so whatever they try to do won't really result in what what you want have. Because every state, again, again, into your point, has completely different political ideologies.

Nobody wants to behave the same. Everybody want be independent. Everybody wants to get reelected, is not cow towing to somebody else.

And so you just don't get these consistent outcomes. And then people are forced to vote with their feet and move across the country. Do you know, to get a bunch of simple things that I think should be pretty consistent across the entire country.

The thing that I found particularly to ranged with these people who are like this and his office analytic, is an open attic, which, by the way, there are tons of affluent people, everybody in these countries addicted to opiates. Fatos are everywhere, federals everywhere. And then you're trying to say, like, because he had that addiction, but in some way, that negates the person kneeling on his back while is in hank like you you have a duty as a police officer to take care of somebody when he's in handcuff s how's he any threat in any way and then to listen to Scott atoms and bench per on these absolute pieces of garbage tried to say, oh, you know there was the fenton all that killed him was like, uh yeah no the person on his back, meaning on him for nine years it's about .

it's about ratings now switching topics and to talk about ratings, something a little later um the most interesting popcorn thing that I watched uh, was the hou documentary.

You did watch the .

hooo documentary .

and we were IT IT is in a word .

I think I think the good I think the right word is like outrageous I think the guy who stole that, Jason, was the lawyer who they interviewed. He he had some incredible kind I .

think it's yeah the I had actually .

I i'll i'll be honest and this may some crazy, but I actually had um a fair amount of sympathy for adam newman and watching IT. I think that he at least in the documentary IT came out that he you know not not that he didn't create this issue but that I think he was a little overly escape code because its very hard for you to insider ate forty five billion dollars without the complicity at a minimum of airport of directors right and and a bunch of like extremely well heal thoughtful investors um and so there there is just this so much complicity in this thing so if anything might take away was that he he shares he shares the blame with a lot of other people and it's not IT wasn't you know him and him only but my god shh that documentary some of the things .

guys are just a this is always true and these business that end up with you bad actors that are enabled, right? I mean, it's been the case in public and public success stories and failure through I me there is A A A culture personality. The personality provides the the the high beta personality provides the alpha. And I can also, I can also can prove de like a there know outcome.

the thing that when you will see when you watch this is other of you guys watch the vow about that maxim called, which is just equally loads some horrible people behaving badly. But he really targeted Young people to work there, and induct orated him into this. We're changing the world.

And then there were no adults there, and you see him behind the scenes when he's talking at the IPO rocha, and he's having basically a panic attack and he's psychotic. I mean, he was really strange. And they have this video of him trying to get through the IPO of .

roche movies.

is that we were the .

documentary just get IT is .

so dragged it's awesome and I hope I have special dane .

is a big word. I don't i'm not sure that I was danish. I think it's like it's juice. It's got and .

like that whole thing, like we school, they're we have to democratize education. Thousand you guys regretted enabling .

um you know corky personality entrepreneurs that you ve back and then you have regretted IT later.

Yeah so um the problem is it's it's hard to know in the midst of IT you know I guess is that kind of like that line like the line between genius and insanity is very thin um but yeah, I mean the the one thing I will says i've only ever had one issue of out right fraud um and so no tell well no I mean in in hundreds of in hundreds of companies that that i've that i've invested in luckily I I I only i've only seen one issue where you know the C E O was extremely, I don't know, aggressive in how they accounted for and book revenue.

And you know this is where one thing that we don't have at the early age companies, we don't have the check and baLance of a reporting infrastructure and a third party watchdog in all these other people. And so you know, you guys all notice when we go in and we sit in the meeting, in a board meeting and you know the entremets put slides up, there is an inherent one hundred percent categorically belief that that they're lying, right? Like you don't even have to check that assumption.

It's just assume that nobody's lying, you know, good or bad. We're just presenting the data. And I had one case where the guy lied and IT wasn't. One was was and our C, F, O. And you know our team figured that out. And um you know there were other investors and IT was uh we all were just really shocked and we had to kind of clean IT up as best we could.

And I have literally a dozen and they we didn't wind up investing in. I think ten of the twelve. And the reason is we took diligence, to your point from out that do you how do you even know in a board meeting? I just said, screw, i'm going to build a diligence team and we ask people for all their bank statements and for their itunes account and for their google analytics. And if a company doesn't give those to us, we just know that something up. And we figured that out before we invest because the two times we did get danged on this, we had one where somebody was giving .

themselves alone.

We did. We just based and diligence list that says, give us the incorporation dogs and all these bank name is now somebody could fragile entry change our bank statement? That is possible. So there IT depends on .

how people want to go in the but did you guys ever like enable a personality that was just like, so over the top and then you're like, oh, ship, this is actually an explosion.

Top three investments.

We have a good point there. Yeah so because OK, I wrote about this, my blog post blitz failed about the sort of how founder psychology can actually cause the company to go off the rails thing. The thing is that founder founders do need to be much more aggressive than the average person.

We like to think that equality, that a personality trade like aggressiveness, there's like some sort of Normal distribution of IT. And you can want to be somewhere in the middle of the curve. And it's actually not true that you want founder to be much more aggressive than the average person because if they're not, there is not going to persevere and push hard enough, right? And I mean, we saw this with with uber, right? I mean, tk was a super aggressive personality.

The company were not have been as successful, had not push that hard. And so the curve in the real world is not a Normal distribution. IT looks more like a curve where there are returns to aggressiveness. They're keeping increasing returns to IT until suddenly the person goes too far and then they jumped the shark. And the whole .

thing that can I say something like, you know, having been in the engine room with suck in a critical moment, suck was an aggressive guy, but he wasn't over the top. And he wasn't just as like, crazy, weird of personality. He wasn't enabling sexual harassment.

He was in doing that stuff. Would you say? Yeah, he was, he was. He was an interesting lectures, incisive. He was an aggressive thinker. So this is why my reaction to David question is I haven't backed asks because I just think that that architect doesn't .

work is such a very cool and political personality. There are these founders that i've heard the term wild dalian to to describe them where they are. You know, they are like these wild alias theyve, tremendous upside.

But there are also a little bit you know wild and unless they sort of learning hf, yeah I mean the half they've got a lot of talent, right? The talent is the matter of talent you have is like the horse you're writing on. And some people are writing on a bronco. They're got a lot of talented.

But I might I just I just seek the real the real edge in investing is figuring out what is bluster and window dressing and show and what is actually aggressive thinking like john n. Patrick collison. There's zero bluster with those guys.

The incredible intellect thought .

ful killers. That's true. I think everybody.

But there's also a maturation process of a lot of founders go through, right? Mean the collections and suck, I think got very mature, very Young. I think there's other founders that IT takes them a while to get more polish, get more disciplined in, in that those emotions are not saying they are fragile and we don't want to bet on fraudulent founders. But some founders need to learn how to harness the talent they have .

and agree to agree that and those .

are the ones were very hard to know earlier in the career whether to bet on them or not, right? Because because they make IT under controller, they may not. As you can tell at the beginning.

here's the analogy we use internally. It's like being professor x and the x men, you could have a gene gray or a wolverine and like everyone has got a different superpower, but you need to teach them how to use that .

superpower so they don't .

self destruct or they be mag right quick ago. The other way.

not yet all the references, but I hear you.

Well, I mean, i'm kind of shocked. Give how much of a huge, large are .

you do have the movie.

I love that movie with the guy who's made of all the rocks and the little three guy who's his buddy, yes.

guarding to the galaxy.

Yes, I think, I think Jason's favorite character is the blob that .

covered as .

you and I drop over, what do you talked about? How many coming the cuban o sandwich is? Are you having?

What could your family do?

Mi, no. Cro.

catti. Xd, you're .

what .

is in, well, what is your health plane? Are you now we're in A O you unit. What what .

terrible.

You do look a little bloated. You look like a, you look like a .

puff fish cheese. I had need to lose like twenty pounds.

I'm down .

twelve from my peak. I have the covered peak. I'm feeling good. Just get a personal trainer speaking .

of covered what he is going on. I think the whole thing they were taking reasons.

and this is why I think had some community or that IT was hot. I mean, there was a million reasons of why they were not going to get hit. And then now they're surging.

And we have sixty million shots on the shelf and the number people getting shots is going down. This is a america's chance to use, uh, instead of battleships and nuclear weapons, we can use this copy to shape global policy. We should be getting vaccines to other countries and be once again the shining light of the entire planet and humanity.

But why we not bringing shots to india? Now we have so many extra. How much here?

I've just trying to pull up the india vx data per day. How much sure a third um but that as much the issue right? I mean IT is scary .

to watch the there I mean you are go to science guy freely tell us what we're looking at here on this chart I mean, the daily covey cases are now hitting two hundred and .

fifty thousand, three .

hundred thousand IT broke three hundred. Oh my lord, in the united.

Now pass the peak of the U. S. You know, india is now seeing more cases per day than any country has seen worldwide during the whole pandemic and over um you know three hundred thousand a day right now.

And it's um you know doesn't seem to be letting up. And we're now questioning whether it's testing that's the limited factor in terms of reporting on these cases. So it's uh it's pretty native others um a famous indian politician who uh uh who had been double vacant uh who claims that he is coped positive as is his a mother and sister. So it's also creating a little bit of a concerned in the market about um you know getting covered. Now he doesn't seem to be having a severe case um which is you know one of the the kind of important things to take note of in vaccination is uh is not necessarily binary um but it's certainly making A A lot of creating a lot of fear uh as a result of his um kind of public statement about this.

This isn't just about cases either um thirty days ago they were at two hundred depth a day and I mean tragically there twenty one hundred so it's ten x and thirty days. If IT ten x is again, that's twenty thousand people a day dying. This is a different level than any other .

country has experienced that.

And the hospital, the handle is do that. This could become a crisis of epic proportions.

At the end of the day, a country's success in palling code, it's gonna be about half fast. They can get their population vaccinated. It's very simple, right? I mean, IT israel was first.

They got when vaccinated, in other cases are down to almost nothing. The us. Is doing pretty well, although there are some room for concern. We are doing you close to four million vaccinations a day hour like three three and half there starting to slip a little bit um and that doesn't .

have to do with Johnson and Johnson, right? That has to do with people not showing up for appointments.

Yeah and I think you've got ta blame the media little bit because they keep writing all these vaccine scare stories about, you know, how this person of that person, the vaccine, punched through and they ve got sick to Spike in the vaccine. They could mean that keeps selling all this like a coveted scary and porn. You right you know .

I noticed other day on CNN this is how insincere and um ratings desperate they are when they put up their cover its debts. They put up cumulative cases and cumulative deaths. That's what they obsess on and it's like, hey, dummies, we know what you're doing here.

You're trying to scare people. You should show the graph of the debts going down. And then why did you take your mask off if you're vaccinated and you're .

outside to give .

a reward you would talking about this last week.

yeah, they had a really good tweet about this. He said that wearing a mask if you're vaccinated, IT is now it's like the blue equivalent of the red maga hat where is completely performative to say, hey, i'm on team blue you know even though like scientifically, it's meaningless. It's like the press they keep talking about this possibility that even after you're vaccinated and you could somehow you keep transmitting the virus to other people.

Look, viruses, I mean, in freeburg's explains Better than me. But viruses do not have in themselves the machinery for application, right? They have to take over yours cells, hijack yours cells machinery to replicate themselves.

So first I have to infect somebody. Then that person gets, you know, gets the virus, starts producing a lot of IT. Then they started shutting IT. If you don't get really sick, you're not to be shutting a lot of the virus, not be transmitting IT to a lot of other people. And here they talk about this this possibility as if it's like a real possibility that people could still be transmitting the virus after they are vaccinated. I mean, it's not a statistically relevant possibility.

right? IT comes down to to this interpretation of everything being binary. And the reality is that all of this is on um you know A A A statistical curve on a kind of a gray scale.

And you know the saxes point is one hundred percent correct that the probability of someone who's been double vaccinated, getting inside, getting infected and then being infected red in a meaningful way is so remote and that IT is not even worth kind of considering, uh, in a way. And and being double vaccinated gives you such a significant typically right? Not for everyone, right? All mune systems are different.

And part some of what we might be seeing is the difference in kind of how people develop community um but IT is such a rare case that one could have a severe infection after getting a um you know a vaccination um is such that IT shouldn't even be considered and kind of you mentioned as being a reason for continuing to wear maths and not gather and not do things. And so you know we started out a sacks point out, I think this is such a true and important point. We started out with this like immediate the politicization of what's the right thing to do to reduce the spread of the virus.

And then that became the mainstay for that political affiliation, and now the transition of the new world that we live in, where most people are vaccinated. We have a Better understanding of the science and the statistics and the mechanisms of transmission. We hold on and we grasp on to that initiating kind of belief system that was correct at the time but isn't correct anymore and IT seems so difficult to get people to shift their mind. This kind of um this behavior is an ignorant behavior and you see IT in so many manifestations um uh right now um in particular with the respective math and behavior after vaccination and so on uh and it's uh it's really brutal to watch um but we obviously digressive bit from the indian uh india a circumstances which is a really nasty one. So IT looks .

why why now and not a year ago.

you know it's it's not clear, right? So there's um someone uh uh provided a uh indication today that there may be as many as uh somewhere between one hundred and two hundred unique variants that that we're seeing emerging india. So there maybe uh a lot of interesting very interesting technically, but not obviously for for human life, but uh a lot a lot of dramatic um very significant variance uh that might be increasing the the infectiousness right now um and and in particular uh you know behavior has shifted in a way that enabling you know some of these transmissions to occur.

You know a lot of people let they are guard down and so on in a way that maybe they weren't six months ago um and uh you know there may be some force evolution associated with partial vaccination totally a theory right now where you know one hundred and ten million doses have been given in india so far. So you know in order for a virus to succeed, the viral variants that organ to infect more likely um you know through A A partially transmit a partially vaccinated population are the ones that are winning out. So there's a lot of you know confounding factors here.

We're not really sure um but IT is IT is pretty burton. Um what is what is going on I will say like this notion of vaccination does not prevent a protection against variants is not a binary statement either, right? This is really, really important.

I've been wanted to say this for a couple of shows. When you get this vaccine um what you're doing is you're trading yourselves. You're giving yourselves the R A to print the Spike protein, and that protein is now in your body. Everyone's immune system then reacts differently to create anti bodies to that protein. The anti bodies that chaos makes and Jason max and sex max and I make are all going to be different.

But if you had to pay crews would be Better. I .

probably .

you probably work off.

But but there are likely tens of thousands of novel variants that our b cells will make that that will bind to that Spike protein and get rid of IT. And we will each have many hundreds of potentially thousands of noble ety bodies that are in system will make. So keep that in mind.

You now have a portfolio of anti bodies that your body is producing to that spite protein. So now when A A cove, a sarce coffee two virus shows up in your body, some of those of those anti bois are going to be really effective of getting rid of IT. Some of them are not.

Now, the protein in the SARS coffee to virus changes slightly. Some of the other anti bodies you have, we're going to be effective. And some of the other ones are not. And IT is that portfolio that is um that is going to change a sorry that that portfolio that is going to define your success at fighting off a specific variant of size cov to where despite protein is changing slightly with each variant right to be various changed the composition of the protein.

The anti bodies that you have are going to be you know more or less successful depending on how that very changes and that's um where there may be cases where the number of anti bodies that you are producing or or the success of the antibodies that you particularly have are a little bit lower for a particularly new variant. IT doesn't mean that you're going to have an infection that's gonna a runaway infection in your body IT means that you might take you longer or might be a little bit harder for you to clear that particular very given me repertory of anti bodies that you've produce. That's why this is why this is a binary, right? IT could be that.

It's like, hey, this variant shows up, boom, instantly. I got rid of IT. I don't have any infection but someone else might like, you know maybe A A slight bit of um uh you know there might be a couple days where they'll a cold.

Is your bodies clearing out? And the measure of this is this this neutralizing title, which is where they take people's blood with all of their anti bodies and they put these different variants in and they can measure how effective your anti bodies are getting rid of that new um and the the less effective your anti bodies are, the higher this this this tighter needs to be and as a result, IT could be a little bit longer, a little bit harder for you to get rid of that that virus. And so so again, like when viral variants start to emerge in the population and as they kind of take off um and become more dominant IT doesn't mean that we don't have community IT means that community might be slightly affected.

Um but not not it's not one or zero, right? Because you ve got hundreds of thousands of antibodies to fight against h in your body and I think that's really important. So we you know while there may be some variants that might be what we call variants of concern, meaning they can kind of slip away a little bit from most of the anti bodies, you IT doesn't mean you're not going to be able to find them off for the end. And so I don't know if that was too technical or too difficult anything. I think it's really more total sense.

yeah. And one thing to add to that is, is that most of the variance that the press keeps reporting with a ARM that are somehow that that basically are going to be vaccine proved they turn out not to be, you know, there very shortly ly there comes out a new article basically saying that the vaccines work. And so the press keeps supporting these isolated cases as proof of something that's not actually true.

Yeah, I mean, this is I just want to give the press um a kind of I just want to an accounting for the press in the last thirty days, one obsessing about every single shooting and then inspiring more shootings. When you obsessed about these mass shootings, you inspire more of them. And as a proof, in fact, IT is inducing people to do this more.

It's not exactly correct, ted, but there is proof about the same with suicide, why we don't cover any Young people killing themselves in the bay area in a certain town that we will know how to rush of them. Or we don't cover suicides on the golden gate bridge anymore, because when they used to cover them and put on the cover of the chronical, two more people would jump off the next week. Number two, they were obsessing about riots.

I mean, I don't know if you turned on the TV during the deliberations, they were absolutely glial about the potential of trouble happening. And that, of course, in sense, more people to go out and see what's going on because you gonna get on T. V.

And because other people are doing IT in humans, model other humans. And then finally, with the goddam Johnson and Johnson, eight people have block cuts. Nobody died. And I correct in that.

And the one person died, one person died.

Okay, so we don't even know. And then they obsess about that for days like you can't cover these things well to wall and not think that they you don't have culpability. The CNN s the fox is or you're obsessing over these things.

And it's scary people to not take vaccines. It's incentive people who are crazy, your dog whistling crazy people, to go get a gun and to use that as a way to get famous. And you're doing the same thing, you know with the with this you know riots.

And we're all in the opinion business.

But but the problem is when they they don't just hype things, but they actually give you factually incorrect information because. It's they're trying to scare people into getting higher ratings. That's also framing David.

which is a different thing. Then lying about statistics. They would say we're not lying about the statistics that how many people died of covered. But what they are doing is they are framing the cumulative number to make your scared. Today, four hundred thousand people have died from coverage is like no over fourteen months, four hundred people that have covered, seven hundred people die today. And that's the lowest number since november a but that wouldn't more people to tune in.

But I wanted tell you guys something. It's yeah, uh, i'm vaccine and I want to I want to see you, see you. I want to hug you people and it's it's five thirty P. M. And i've been a working since .

five this morning.

I been I came back from easter vacation, guys, and I ve been up between either at five A M or six m every fucking you work in IT. You're working hard. I am grinding, but I am tired.

right? Let's rap here as we rap what's going on just because people have been asking what's going on with the sec and backs and and just a more reporting or something because I I was watching C, N, B, C, and they said you're doing everything right, but there's a lot of other people doing things wrong. Explain to us what's going on.

Uh I mean, it's a it's a very specific um accounting issue, which is that some spaces, many backs and in fact, many companies I just put in that way not just backs, but many companies use warrants and the prevAiling guidance on certain warrants was that they were equity and basically that gets put into a baLance. She's taping where you have equity assets and liabilities and know it's it's on one side.

And basically what they said was they issued some refined guidance that that actually in these specific cases, these should be really listed as liability. So then I need to move from this column to that column. But when that when you do that, you go through you know a bunch of cascine implications and effects and revisions and the statements.

And so that's what the that's what the entire security industry is dealing with right now, which was um you know this guidance by the I C C in the implication. So that was on the twelve. I mean, just so you know today we just filed the updated um all of our updated dogs plus the updated as for for so far I so we were able to work around the clock and just kind of get IT done. And hopefully what we've also done is create a uh a bit of a way forward in the paths that other folks can use to kind of like accelerate their their progress. But um it's definitely created um a ton of work um but um but where I think I think we found the right answer.

So ultimately good for you because you want to see and .

but work yeah and and also I think like the simpler path forward. So I mean, if you just think about capital marketability for a moment, like warn cover to probe, go away, number one, right? So take all the warnings to zero.

Second thing that should happen is that, uh, you know, I think this is an opportunity to take a step back and figure out how to really make sure that the spack sponsors are of the highest quality. Somebody told me this incredible thing today. I am one of five groups that put up any money when we do a pipe in our deals.

Meaning, he said to me, ninety five percent of sponsors put up literally a zero zero. And so of course you're gonna have you know extremely loose underwriting requirements, if that's the case. And so you know the idea that i'm thinking about uh, which someone proposed to me, which I think is very clever as this idea that you know you earn more of the promote uh, more money you put up right.

So for example, like you in so I I think we put in two hundred and seventy five million dollars um so I mean we really you know um that's a meaningful commitment and um IT closes the gap between you know what the your equity is issued at and what investors are buying at. And that's very healthy, right? And so I think there's all these mechanisms that will clean up the back market.

We need to have a much more refined criteria to allow people to be sponsors um and we need to make sponsors in a position where they must put in money so that they actually do the work. If you get something for free, let's be onest. You won't do the work if you're forced to write a check. So how do presented about .

IT show me an incentive of share the upcoming? And this happened on Angeli st, where in the beginning days of Angel list, you had some Angels, quote on, quote, who didn't have any money. So they put a thousand or two thousand into a deal.

Then they would have five hundred thousand come behind them. And so he had this five hundred to one ratio of dollars to skin in the game. And I was like, why wouldn't a syndicate lead, put every company out there, and not even put no, have no skin? Which is why when you have a venture fund, I don't know what they expect to put in.

And the problem funds one to two percent, I was twenty five percent.

Well, one did two percent is IT could be pretty significant if you're doing a fund every three years. I'm doing this and it's IT once up being millions of dollars for me, but i'm happy to do because I believe in my own ability, all right, as we wrap. And anybody have a prauge E E anything they want to let people know about?

I wanted talk about this one little thing. I just not to talk about IT, but I would like to tell you guys to read IT because IT is so interesting. Basically, like european soccer, tried to inside a revolt, were like the top teams across all the different leagues came together to try to create a super league.

But I ended up back, bill. They were like a band of evil villains and like fans erupted. Everybody update.

And then, you know, IT IT existed for twenty four hours, but in that twenty four hours, IT looked like a complete rewriting of sports and sports like, uh laws and you know um IT was an incredible thing. There's an article in the new york times of a posted in here and folks want to read IT. It's really, really fucked and funding .

and that will be on season to have to last. I don't know you guys watched tim cooks um keynote this week with the new IMAX, which are really beautiful. Um he was so excited about ted lassa and ted lassa was a great show but I mean IT literally is the the apple show the number you can see to last so yet what .

is that the television show .

you guys haven't seen ted lasso.

the T V show yet, is that on nbc or cbs .

channel is on T V plus. Whatever that is.

A is on channel.

apple T, V plus. You've got to go on your apple T, V and then find a apple T V plus on your T V, and you'll find IT eventually. It's with one of their paid, you know, they have their own networks competitor called apple TV plus. So on your phone, if you type apple TV, you have apple TV apple tvs.

I have apple TV behind my TV.

No but there's apple TV plus which is their netflix.

So is IT a Better is IT .

a Better apple T V? No, no, no it's content is a content subscription. You have they screw that part of um he shout out much of sorry.

So who's who's ted 拉。

So ted lassa is a jacon on to dachas comedy that is incredibly heart warming. About a really heart warming, joyful person who goes from amErica to the U. K. To become a .

soccer coach .

is really great. I oring. You watch, you watch, you .

should watch the moral on H. B. I started.

I did. You watch IT original language because it's not really italian. It's like neapolitan. And so, like you know, I can catch, I understand maybe twenty percent of the words.

And I said to that, I said, what language is he is like, I know what I watched in the tian subsides. So I IT was, it's beautiful, beautiful. It's so intense. It's like the wire. But like, I mean, you needed is incredible.

A life is also good, Ricky, your way, if you want something cynical and heart warming that for you, sex, love you guys.

love you sax, see, wow. Can you can come back the so can play. But why do .

we go to a miami? We going to miami.

I'm going going .

on a .

com trip .

cogan. Do you understand? But that term is more associated with bail and in jail than .

that is what you think IT beats are.

Jason, you are released on your own recognizance. That's what i'm talking about. You want to do connections.

That's what I said. Reconnoissance, yeah.

I think we wearing an ankle brace on your recognizance.

actually. No, they don't. They don't fit on the things to make.

IT a good episode for Jason.

It'll be a canker brace slip.

My g.

what do you call the Price if you're cafe and your for .

the put this way, if x sex is wearing two of them right now.

you'd never know .

sex is wearing.

What is that? What happens? Max, sex.

jump out.

Of love you bye next time.

let your.

Winter light, man.

We open sources to the fans and .

just got crazy.

Should all get a room big, huge because like sexual attention. 到了 your .

be good.

we need to get merger.