E123: Trump indictment, de-dollarization, should VCs back Chinese AI? RIP Bob Lee
01:27:14 Share

Can see what's on your head. What does that say? super.

That one of my most exciting companies. Coto.

hello, oh my hello. I still have hello that.

no, not mahalo related, completely related. Nothing what so ever to do. I remember my holo great product.

Sorry to be the one up against.

you know, we were making ten million dollars in revenue uh, at the peak yeah one hundred people writing like human created searches.

All pages look, reference the ChatGPT thing.

I meant that well then what happened was they did the pend update and we went from ten million down to five hundred thousand and revenue overnight.

Always the panda k.

They looked at who the top sites were, 一号， hello, exacter. And they just said nobody can get any more than this amount of traffic. And they literally ally throat the number of unique users they would send you and that was IT came over and um then everybody I knew I google wouldn't return my emails and they're like we don't have partnerships with anybody. As what my cuts .

on me are you saying that holz lack of success had nothing to do with the poor product and execution? IT was google's mouth seasons.

IT got really, really reviews. IT was back. bicycle. Ia.

i'm so in the movie, but it's suck.

You know, when you build the company that gets a million in revenue in eighteen months, you can talk your month. But basically, looking at your resume here, I see that you've created nothing in your entire career. When you get in the arena, the arena and you actually build the product, then you can talk to me. I had the number one blog in the world in the top five tech magazine in the world, and this is the .

number one tech in business process.

So I touched the si s.

You're talking to three founders. You're tramp. You're the odd personal. So when you wanted talk about product and make one.

okay, so gross. And yet on the richest and so guilty and was dirty.

totally fine. So s kim john gn, so putting, okay, there's a lot of rich people in the world. These are three product. Okay, dictor, there's your cold open.

Lets go.

We, man, give.

We are to the fans .

and got.

Let's get started, everybody. It's been a big week. There's a lot to talk about might be a little bit of controversial spicy agenda today here on the all in podcast with me again, the salt and of science who is tearing up the youtube comments, everybody asking the sulton of silence to contribute more and to speak more. But when he does speak, my lord, he drops those knowledge bombs, I do, and soft to the science.

I'm hanging in there.

You're hanging in there. Okay.

wo i'm hanging in there.

man, a few words, I guess hanging in there. Okay, great with us again. Of course. Another android, David sacks, sex.

How are you doing? I am doing fine. How are you? Let me ask GPT, what?

Hey, how are you doing?

I mean, basically.

cha p 4 is the ultimate expert。 There is equalizer. You guys are going to benefit most from this.

I ask, how are you I says, as an A I language model, I feelings are conscious since so I don't experience emotions or states of being like a human does. However, i'm here and ready to help you with any questions or topics you d like to discuss. How can I miss you today?

That's pretty similar to how you feel, except you don't offer to help anybody. okay. Also with us, the dictator himself.

K, about topics.

Looking forward to today's episode. And with us, the dictator with a shockingly shocky low cut.

there's only one button .

on one button, okay, made from a tiny albano.

They, should we put buttons .

in the wipe button .

to the move?

S, no, no, no, no. The one button is what counts. That is a baby.

How bio reno is that was killed fetich math on his vacation and then attached to his lin shirt. I guess I just get this out of the way. Trump, as A A rain, I guess, is the term.

He was charged in new york with thirty four felling accounts of physio ying business records out and brag alleged trump orders to catching kill scheme as well to suppress damaging information before the twenty sixteen election, of course trumpeted not guilty and the five press conference or speech rally morale ga. After that, prosecutors say the scheme involved for firing business records to conceal payments to, or m medan ions. We know all that same thing. Michael coleman to jail for the endangered wasn't a speaking indictment where IT explained to all the details. So alvan brag hasn't tip his cards by explaining in detail what the legal theories are in which information he has, and he was pretty clear about that, that he was not going to tip, which makes us .

even more hard to understand .

what's going on and creates even more divisiveness. Predictably, the right is framing this as a witch hunt, but surprisingly many on the left, including former S D N Y head bora of the amazing podcast stay to a free, which I love, he felt this was the weakest of the four major investigations that trunk is under.

And he expressed some concerns, uh, on his pocket that I was light and not detailed and he might have not actually pursued this unless he had a ninety nine percent or something like that because IT is the president's sax, I guess, ever be is expecting us to fight over this but to just be a little preemptive here as much as I think trump is like the most unethical person to ever hold the office, this that seem a little light, and I am hoping brag has the goods on him. Because why bring a mr. Muna case? You know, these are all, I guess, mr.

Miners that are being elevated to families because of tax evasion, bly or election difference. So what what are you still man? Or just generally speak about the the case here, cause I know that you are a man of lawn water.

Well, many people on the left criticizing this case, a Johnson shape, who is a liberal rider of the york magazine, wrote a good column about IT. And look here the reasons why. Number one, the underlying behavior here is that trump engaged in a private settlement with stormy Daniel.

That's not illegal. Even if IT is, you know, so called hush money that is legal, you're allowed to do that. Number two is that he used personal funds to do IT.

He did not use campaign funds. And this is why alvin brag has had to make this kind of distorted, ridiculous claim that he should have used campaign funds to do IT. But does anyone believe that if trump had use campaign funds, that won't be alleged as the crime? So he's kind of damned if he does, damned if he doesn't.

Here, I think that you know what the laws trying to do with these rules around campaign funds is protect donors from canada's, is appropriating them and trump at every right to use personal funds to engage in the settlement is a major distortion of campaign finance rules. Third, these campaign financials are federal laws. They're not state laws, so it's not up to every brag to enforce them.

And in fact, the feds looked at this and decided not prosecute IT because if they did, they'd have to enforce similar laws against hilly clin. Recall that hilary clinton had a problem where he used campaign funds to fund the payment to Christopher steel to write the steel doa. And that was a real problem.

IT was miscategorized ed as legal fees and he had to pay a fine for that. And no one talked about locking her up over IT and no one was talking about, you know, inditing her and sending her to jail. And so part of the reason why I think the feds didn't want to look at this is because theyd have to look at similar cases that are even more agree just.

And then finally, the last thing is that we will pass the statute limitations on this whole matter. So alban brag is really out here on a limb. He's passed stache limitations.

He's enforcing laws are not his business to enforced. They're distorted interpretations. Those laws and the underlying conduct is fully illegal. So I think everybody is kind of like wondering why he's doing this.

And I think there's two theories is either that is incredible student or is incredible smart sort of three dimension plantation that and culture has is that this is all a giant honeypot for republicans because they are all rilling around trump er because they perceive, I think correctly, that he's being railroaded and he's being he is the victim of a political prosecution but IT in rilling around him to defend them. You see that transport ratings among republicans in the primary are going through the roof. Distances are going down. And so what in culture fears is that this is all the labor ate rules to make trump the ominous because biden would much rather face a real election against trump, then against a Young, youthful, vigorous governor like a decentish judy brag.

Has a bunch of more information. And maybe that tax event is the issue will go after because that seems to be the other theory here is he's not going to do the federal you know election stuff. He's gonna after the tax event, which is what they already got the truck organization on.

When Y S, O, I guess the CFO is .

going to gel for six month.

These are mr. Minor crimes. And to convert them to a feline, the crime needs to have been done in the process of eating and abetting another crime.

right? Tax event is the the concept here month.

When he listed the bullying list of all of the reasons that, or all of his evidence, IT seemed to point to a David side, which is just these campaign finance violations. Yeah, this whole thing just seems like such an enormous waste of time. Just think about the amount of money that will have to be spent on just securing new york city. Every time he shows up, the five car moderates the secret service, the police, to this, to that. The disruption to people for what really ultimately I think is right is kind of like, you know, it's a bit of like then this case should have been brought years ago.

Well, not in relation to that. They were told to stand down from doing that because of the you can enda, sitting president and that's paul. So that's another legal theory that's gonna to be .

test IT in the fed looked at this years ago and they .

was told to not do IT because he was a city president .

in an office now for a couple years. Why didn't they move forward?

They were. That was the process they were doing. So that been established. The previous da said he was told to stand down because .

decided not to prosecute on the same underlying offences. That was his decision. He decided not to. Who who told him to standing down, no one can told me.

stand down. yeah. The office of cyst .

vans has decided not to move forward with this very same case when the statue of limitations had not inspired. Now IT has IT have to move forward, and you really have to stretch your to come up with any kind of plausibility to this, to this case. And I mean, you have to wonder why he's doing IT.

Is a this naked partisanship? Or are they trying to make trump the republican omani? But here's what advances said.

Meet the press. This weekend, I was asked by the U. S. Attorney's office in the southern district to stand down on the investigation if they were used to stand down as well because of the, you can't enda sitting presidents. So anyway, all the stuff s gonna done in the wash. I don't think we have to spend too much time on IT because we will find out, I think.

in the coming weeks, do the democrats actually want him to get convicted than what he's going to be under house arrest in moral logo, because he's not going to be sent to jail? And then what then the sentence actually will win the nomination.

So what exactly is the perfect document, which is to create this theater, waste taxpayer resources, only to have trump acquitted, just so that he can win the nomination and then he can go against by and lose. This seems so far, far. Move on this chapter and move on totally.

This is ripping the country apart for no reason. And such a super case. Such a super case. Even the people who would like to prosecute trump like you. J, and I think have a problem with that. And one of the reasons why this is going to be counterproductive, even to the the anti trump forces, is that by going first with this case, yes, alvin brag is poison the well for any future case by bringing against trump because now all future cases against trump er can be seen as painted with the same brush which is a native partisan sort of which on there may be other cases out there that have more validity to them but they're all going to be seen as of a peace with this sort of album brag. Yes, that was great position.

I think it's it's a logical and I don't disagree. What do you think of the other three case of january six, the interference in georgia where they recorded in my tape and then the stolen documents in the. Obstruction of justice? Or you think all four cases are politically motivated and none of them have any validity to them?

sex? I me look, the question if they ask is, if downtown was a private citizen who never ran for present, would he be the target of any these prosecutions? I mean, he was, you know, high profile business figure for decades and he was a prosecute like this. And so that's really the question you have to ask.

And to and go to jail. Coin did go to jail for the same crime. So the answer is yes.

What microcom wasn't prosecuted till after trump s president.

No thing is you asked if if he was not president, if he would let me finish U U. S. If if trump was not a president, if he would have been prosecuted for this crime.

In fact, in another person, Michael Colin, was prosecuted for the crime and did serve jail time. So the answers, yes, he would have been. And they have, and they brought these cases, the banking kind of cases, and they brought the other one for the one point six million fine, and we were going to do so. I think they would actually.

But anyway, my question to you, any you think .

all for politically motivated is my question to you where you think anything?

Look, I don't want to comment on the other cases until I see what cause actually made in what the merits of them are. However, I don't believe that all these prosecutions all over the country be looking at Donald trump this way. If you use the privy, never around for office.

And I think we've a big problem in our political system when political disagreements are criminalized. And this has been a nasty trend that's been going on for many years. IT was usually, I guess, practice against staffers.

You know, here or there you'd have some, you'd have some executive brain staffer. Would you find themselves on the wrong end of a prosecution? And they then go into jail.

Maybe they get partner not. But I was reach all the way to the the top. And you have presentin candidates basically being prosecuted, and I do not believe they be prosecuted. They were not major political figures.

And IT looks really bad for the political figure who is leading IT right down the republican party to be job in's opponent in the next election, to be prosecuted by one of tobin's political allies. I mean, if this were happening in some other country, united we criticizing IT as some sort of, you know, banana public type move. So this is not that direction.

We want our politics to go and and look, I don't trump to be the omi. I supported different candidate. But I think that to be interfering in our elections for albin brake, interfering in the political process this way is a reach and it's setting a horrible precedent for the future. I mean, we're talking about major presentin candidates .

question then by local D A.

I mean, why would we want this?

So let me ask a follow question then. Do you the D O J currently investigating hunter biden? And then obviously, I goes up to the big guy with the ten percent.

Do you think the D O J should be investigating hundred by energy? You think we should be giving a past to presidential presidents and their families? Well.

one hundred biting case. I mean, this is one where you've got foreign government basically paying off hundred biden for political access. Now that may ultimately be legal because I think influence peddling is kind of a business that takes place all over a washington, but that actually does speak to the integrity of our political system at the end of the day, would I send hundred by into jail?

No, I don't think so. Like I say, I don't like criminalizing political disagreements. But what a hundred biden did was definitely pretty shady. And know, I think this is unter .

body and truck, and his family are bolshy is my feeling on IT. We got to get Better candidates in here. Nicky, how your candidate mother raised million dollars last week.

He fire freebody. You wanted jump into this and and touch the third. Really, you want us .

to move on to.

all right? So there's been a lot of twitter back and forth about the d dollars ation. And if it's real, if it's happening, if it's not, last week, china and brazil struck a deal to trade in their own currencies.

The brazilian government announced the two countries were no longer use the U. S. Dollar as an intermediary.

I don't know that for everything they trade or for certain things they're trading to be a straight one for Reyes trade. China is the top U. S. Rival, obviously in brazil, one of the largest economies in land america. What your thoughts, generally speaking, free briga know that you have some exposure here, you know, with your company that I think you spect recently, and you have some knowledge .

of the space rate. Well, I mean, china, brazil are pretty sizable trade partners. I think it's around one hundred and fifty billion dollars a year bilateral trade.

So china historically has made a lot of investments through their companies in railways, infrastructure, waterways, ports and infrastructure to support the agriculture manufacturing economy in brazil. And it's a very dedi, obviously, the closeness of that relationship. China became a bigger trading partner for brazil two thousand and nine, surpassing the U.

S. By the way, china has had similar rating strategies in africa. In australia, they've bought several companies. In australia, they've made massive infrastructure investments, the currency of trade.

It's one element of a broader intertwining that china has kind of enabled by using its resources to invest in infrastructure development than participating in the economic value and gain that arises from that. IT still also supports the local country, the local population, the local economies in a meaningful way. I think it's worth noting that the anti globalization moment that we're having in the U.

S. And maybe a longer turn trend doesn't mean that globalization and global trade is gonna slow down between china and other really important well resource nations around the world. So the brazil china summit that happened a week ago where a lot of brazilian executives went to china and had a very deep set a dialogue, but they also signed hunt agreements on parade.

And also, in some those cases, the trade being done in non U. S. Dollar denominated currency is worth noting is being that if the us. Does continue to push for the globalization, we can only leverage our side of those relationships. China will continue to make investments, continue to develop today and continue to develop really deep pants with countries around the world from a resource perspective, from an economic perspective. And ultimately, the leverage will sit with them on what currency folks are going to trade them.

So you know what we're seeing with the china saudi discussion around the petrol you on, which doesn't seem to be really a standard thing yet, but we're starting to see in claims of some deals happening in you want, but it's more related to the depth of the chinese great relationship with all these nations around the world. So the more we kind of as the U. S. Think we want to dig globalize and reduce our trade relationships with other nations, the more you know we're out of the way and allowing china to do that, I think it's worth observing that the chinese economy will grow. The depth of the relationship for growth, potentially the strength and importance of their currency will continue amount as they build these really deep infrastructure and investment .

and around the world to math, what does a party trading in one do with the one? Did they buy a bunch of stuff from china? What happens to the world? This whole thing .

is a huge nothing burger. This is the third deal that that china has done. The other two countries are pakistan and pressure. And the reason why is i've see like people on twitter now breath lesser rambling on about the dollar zone and all of the stuff.

And I think if any of these people would think from first principles, the first thing that you would know is that the u an. Is pg to the U S. dollar.

And so as long as it's pegged, whether you trade through the us. Dollar or you don't and you directly go, you want your index to the us. Dollar and then you use a dollar swap to converted into the currency you need. So I don't know. I think this is kind of like a lot of folks who don't really know what's going on.

What do you think about the the depth of china's trade relationships? So forget about the domination of the currency, but the fact that um the statistic top trading partner with one hundred and twenty countries, you know they surpassed the U S. With many these countries over the last you know decade or two in particular and continue to increase the the scale relative to the U S. Where we're kind of decreasing our dependence on on on nations in reducing our training.

The reason why china has had so much dominance as a trading partner and the reason why china's central bank has the largest count of foreign U. S. Dollar reserves about three and half trillion dollars, is exactly because of the thing that you want to ignore in order to have this high flooding intellectual conversation.

IT is pegged to the U. S. dollar. And until IT is unpacked in a free float in currency, we will never know what the real market clearing Price is.

Ince, china has been able to, china has been very effectively able to manipulate this currency since they were brought into the W. T. O. In order to engender that trading partner set us, they were able to artificially suppress the value of their currency so that exports from china could gain traction in countries all around the world.

You have to take into account this currency peg and you have to ask the question, where would the currency be if IT wasn't free floating? And then what would the incentives be for folks to replace the dollar? And I think that there's a lot of interesting questions are that are worth asking, but I think you have to be a little bit more to actually honey.

disgust and just for clarity to Matthew said they already have these deals with pakistani, pakistan. Zl, you made pakistani russia. I think there really have those deals .

with those to pakistan, russia.

right? Okay, good. I want to make sure it's clear there.

Sex, do you have any thoughts on this? Is is this an example of people just maybe taking the radi o book and IT fits a certain narrative and overhyping IT or eating? This is an actual real trend in the world that to be concerned about.

I think d dollar ation hasn't happened. Yeah, but I think it's a risk. And I think there's a bunch of reasons why the risk is growing. So first of all, we have thirty two trillion dollars in debt.

Someone has to finance that debt and is a bigger that number gets, the more attractive our dead is because they have to be concerned that were venting to motives. The debt pay IT back by printing of new dollars. So that point number one is we have these massive deficits and deaths S.

Number two is that we have, I think in the last couple of years, really wep ized the dollar. So if you look at like what we've done with ukraine and and russia, we've basically seized hundreds of billions dollars of russian reserves that we're held in dollars. We've excluded them from the swift banking system.

We've imposed massive sanctions on them. And in fact, we now have sanctions on a huge number countries all over the world. So we're very sanctions happy, all of which makes these countries view the dollar as an unreliable store of value.

Why would you store your money in something that can be taken away by the U. S. And specifically by the state department? So I think this is a major change in the way that we've views the dollar of last couple years as we're going to use IT as a weapon that again.

that makes IT well. That's not the first time we've ever done that, right. We've done sanctions against .

many different we've actions. But as far as I know, we've never sees far curacy reserves and excluded a country from swift, which the banking system so as as an instrument of U. S.

Foreign policy. So I mean, I could be wrong about that, but this was a major of I what had happened. Remember, we also did stuff like seize the the yachts and the the foreign holdings of russian oligarch, where they are ill gotten gains. We suddenly decided they were gotten. Let me tell you, we didn't think they were ill gotten when those russian billionaire were buying those yachts or buying new york real estate or .

london real estate in facebook.

investing in companies here, or buying sports teams or what have you. So we don't think they were all gotten. We didn't think they're all gotten at the time that they were actually made and spent.

But we decided subsequently, we're is going to see those things well, again, if you are a foreign country or a wealthy person in a foreign are designed, decide where you're going. Na, keep your money. You may not want IT to be liable to the magories of U.

S. Foreign policy. So I think all these things do matter.

And when you're running the kind of dead and deficits we have and you're making the U. S. Dollar less attractive, you are running a risk. I mean, so we people we have .

disagreements with on the dollars standard because that's good in terms of power for us, which I think opens us up .

to a broader r to O K. Just clearly, it's not even the dollar standard, right? Like what this deal was is to use this thing called ships. And ships is the non dollar competitor to swift.

And so you settled right across, let's say, you have two trading partners in two completely different countries that use a bank in each other local areas. They typically swapped the dollars and they transfer right, using this, this backbone of the financial infrastructure called swift, china has built a competitor to IT, called ships to C. I, P, S.

And china has been going around in signing focus on, makes a tiny sense, right? He, listen, if we're trading between each other less, just use that. So I think it's important to not paint this with more the brush than IT should be. I'm not saying that the aliza couldn't happen. I just think that everybody tries to take one random data point and conflicted altogether to reinforce a dalia point from a book three years ago.

I do think there's a group of catastrophist who maybe maybe this happens. It's great. Twitter father.

I think we are headed for some sort of government deck crisis. I said that there's hume, three prongs to the financial crisis. One was these long data bonds having unrealized losses, which is causing prompts in regional community banks.

The second piece of commercial real state crisis, which I think is metai zing right now, which is also going to be a banking crisis once all those unrealized losses come to you. And the first piece of IT is government death crisis. We have the thirty two trillion dollar debt that we are now having to refinance at much our interest rates.

I've read some word that half our government, sixteen billion is going to come due sixteen start trillion yeah. And it's can actually refinance in the next three years. The average rate on that dead is one point seven percent.

Well, if you want to refinance IT at ten year rates, you're going to looking at between three and half of four percent, maybe more. So you're looking at a doubling of the interest cost. And I will also read that by twenty thirty, we're going to have over a trillion dollars of interest expense owed by the U.

S. Government every year. That is money that's not funding anyone. So security is not funding anyone's health care is not funding one weapons program is on funding we want is this the vic? It's give me more than a quarter of our total federal budget.

Yeah and this is where you start gambling. When you're chased in that vig payment, you start taking risks.

This is also where you have to expect the fed will really want inflation to stay. I sort of what we ve said before, the only way out of this mathematically is to keep right time.

But the other thing, David, that you when you mention all this is what about every other country? If you think that the happening in the united states, I think it's important to make sure we at least consider every other major economy because it's not as if they're pristine ly sitting on the sidelines while this happens to the U. S.

This is my whole argument the whole time, which is if you're onna have this argument, you need to do IT thought fully and relatively right, because the euro is in the same amount. trouble. If you look across, it's not as if china is actually pretty and smelling like rose is either.

Every major economy or trading block in the world is going to go through this at the same time. So IT becomes a relative trade argument. And there I just don't know enough to know whether the U.

S. Is poorly position versus europe for china, but IT just seems like you get back to a place where it's like, okay, we need to find the flight to safety. What is the onic flight to safety if it's not a commodity like gold, it's probably the dollar until it's not yeah OK.

If freeburg, obviously other countries have even worked your problems higher dead to G P, G D P, which means higher debt payments. Just rounding there here on this issue, any final dots on dedalus zone and serving or debt?

Look, it's weren't trouble and it's it's unclear the timing and the path, but the arithmetic is pretty simple. In addition to the point sax made, you guys saw the news, the city of chicago has a forty four billion dollar pension hall. That's just the tip of iceberg.

And unfunded pension liabilities from both state government, city government, even private institutions. This is again, hundreds of millions of people worldwide that are expecting money coming to them from institutions that ultimately the federal government of the U. S. Is likely going to have to back stop to some degree. So that's another huge check that's going to need to be written that the federal government is inevitably onna have to write because we are going to just let all these people have no money and become starving and social security right now projected to go bankrupt t sometime between twenty thirty and twenty thirty five. So we're going up to write a check to cover the whole there plus the interests payment .

checks so .

much a mark point .

freeburg of the relative .

to other societies, other .

countries yeah so the the very likely case is that. Relative wealth will decline. So in the near term, I think it's inevitable we have higher tax rates.

I've this before because in order to to meet the gap, if we have these austerity measures to reduce costs, to reduce the budget as the republicans are going to push for, as this that ceiling debate reaches its apex in, uh, sixty days from now, which you Better believe this is gonna be pretty, pretty dam dramatic. And there's going to be real questions of what happens if the U. S.

Defaults on its treasury's, if the U. S. Defaults on obligations. IT has A.

There will be a real shift away from using those assets as the baseline of the risk free rate worldwide. And what the other thing will be, I don't know. I all speak about the chAllenges.

I see a bit coin. You know, we want to at some point, did you have did you have a million yet? Is Better.

But if if you put all of this together, you're gonna have to source income somewhere. You're going to have to take a piece of the assets and a piece of the income away from the private citizens. So you're gonna to tax.

And that tax will be used to kind of fill some of the whole and then more of the whole will be filled by printing money. And that will lead to this kind of inflation of asset values, which ultimately means that the relative cost of things go up and relative wealth goes down. And I think that the point to to take note is that anyone who's concentrated assets is gonna them effectively lost in the wash.

thanks. You want dead?

We had a couple details. Arcus fever went pretty quickly over a couple of example. So just to take that, the chicago k the numbers.

I saw an article this week, I think the most journal was that eighty percent of the property taxes in chicago are now going just to pay for pensions. So eighty percent are going to pay former workers, not current city workers. And more over those h pensions are only twenty five percent funded.

So they've already overpromised by seventy five percent benefits that they can afford. How's this going to work? And you saw that. Do we just had an election there? And rather than fixed the problem, they voted for a candidate, Brandon Johnson, who has even software on crime and .

Lorry .

light fu. And the reason for that is because the the government worker's unions basically all supported him. So you have a situation in these blue cities and states where there is a massive civil service.

They are the strongest special interest in local state politics. They have already taken huge appropriations of the state budget in the four of these pensions, which aren't even adequately funding. We can barely .

ford them as they are. Should we have tension.

sex? We think we before, sure. So what what happened in the one thousand and eighties when there was a lot of pensioner form and the private sectors you move from define benefit to define contribution. So you started having more defined contribution, like for one k the way that these public pensions work is to find benefit. So you know what we'll do is we'll say that we're going to take your last year of employment with the city or state.

And whatever your whatever amount of money was you made that last year, you're going to get eighty or ninety percent of IT for the rest of not is your life but your spouse is life too. And moreover, any over time you earned becomes part of that calculation. So everyone knows this game.

And so what you see is in their final year, um stayed employees will load up on the overtime though earn twice as much and then ninety percent of that yes, they get ninety percent of that for the rest of them and their spouses life. We just can't afford to have rules like that, that don't making sense. And so but the point is that the benefit that spent defined there is no relationship to the amount of money that's gone into these pensions, right?

And so you have a simple solution here.

have a huge liability, yes, but to freeze, every blue city and state in country is going to to have this problem. And who's going to pick up these expenses?

You bring up great points, but you just match all together in this mh potato of random things like unfunded pension liabilities u an remember raise trading and they're like the same thing. They're not the same thing.

The different, totally different and .

just throw them in a mala soup. And the and and so i'm just saying like if these are important, top is saying, I do think they're motivated by totally different things and they're not related as much as we think they are related.

I think they're related.

Let me walk you .

through how they're related. okay? I want to hear how the raise you want. Trade is connected to the chicago pension system.

The holes need to be filled, so the the money is not gonna not get paid to the pensioners. Social security is not going to go away, just like we saw france. If you start to do that, you have revolutions in the street.

There is literally bonfires at intersections in france, in paris today, because people don't want to wait another two years before they get their pension payments. So ultimately, that check has to be written when you add up the column of how much money is not on the baLanced today, how much liability is not on the baLanced today. That is, ultimately gonna have to get paid out, and the U.

S. Government is going to print money to pay IT out IT indicates that there is a higher degree of uncertainty on whether or not i'm actually gone to get the value back for the bonds that i'm buying in U. S.

Or form or that the U S. Dollar is actually gonna strong enough to cover the cost. Has enough kind of or has too much volatility, uh, because of this uncertainty.

And I think that that's really where people started to say, well, maybe the U. S. Dollar isn't that risk fy rate. With a strong economy, with a great baLance sheet, great economic growth, there are certainly extraordinary potential because of the freedoms that we have to Operate in this country as individuals, through the enterprise, through the innovation, through the entrepreneurship, through the attraction of talent from all over the world to come here.

But at the end of the day, we do seem to have a very big set of checks that we're in enough to write. And as those, you know, liability start to mount, there becomes a real question on you. I really want to hold dollars.

Maybe I want to hold something else and maybe I diversify a little bit. And maybe I said to holding just dollars, I also hold other s things. As that starts up, you see a little bit of a shift.

It's not an overnight thing. It's all catastrophic one or the other. But IT starts to bring into question whether the U. S. Dollar is the standard, the factor system that used for trade around the world at the point and sex.

There is a solution to this. Superannuation is done in uh the U. K. And in australia where you contribute, you're forced to contribute to your four one k essentially, but you get to learn how to put money away and you become a little more you have a little more authority over your future with these pensions where you're responsible for saving and you're kind of forced to save. And that seems to have worked really well in australia, in other places where people have great savings and you don't have this major debt load by the government doing IT. So it's oping for people to look into sexy.

You wants to add anything to this because because argument that I agree with is that you do have to evaluate the dollar on the terms and you know you can argue that the us in the dollar, it's it's still the you know this called the most eligible bachelor or in the lepper colony you know nothing started fall off on the man and yet but um but that doesn't mean that IT won't that's really good.

That's really good the .

way the first falt might be the most of know the economist .

herb sign one said that if something cannot go on forever, IT won't. What we're doing right now cannot go on forever. We are running deficits and debts and unfunded liabilities that we cannot afford. And so IT will stop. And the only question is how IT stops.

Well, I think there's yeah .

and IT may stop in a way that is not is not a voluntarily choice by us. Basically.

guys want to make a bet, a friendly wager for charity. So what happens in june? Make a Better with you guys. I mean, yes, what do you guys think happens? You think this is gona be a fractious, chaotic thing where the markets get roiled?

No, I think it's going to be a pretty ruber straight forward deal where they're gonna. It's gonna down to the wire. But my guess is no one gonna want to default on the dead. yep.

And there is going to be some concessions on spending and ultimately the that ceiling or get extended and that those concessions on spending will allow the republican party to save face with their voters and say, look, we we got some concessions here. Are not sure they're going to be enough to really address any of the major problems the U. S.

Is facing over the longer term. But you certainly letting the that's ceiling hit and defaulting is catastrophic. Everyone knows.

I think the majority case is a bunch of hand ringing and then they make a concession .

that are interested in this topic. I would go use the way back machine and go and read all of the articles in the eighties where you could replace china with japan. And what happened with japan is that japan just said a demographic wall, not the similar what china's about the hidden the next fifteen or twenty years right?

It's a good counter argument. Yeah that's a really good point. And I think that there is the element of you know china as the primary right, right? But I think the bit the bigger problem to know is that we have voted ourselves into a student, we have allowed ourselves to a crew with liabilities that are, in many cases, not on the baLance sheet that we simply cannot afford to pay, and the social unrest that will raise what if and when we don't pay them, or the economic cost of us actually paying them.

I either of those are onna be pretty significant, but that's under that water under the bridge. And that has nothing to do with china. IT has just everything to do with how the U. S. spending.

Thank you for being intellectual is this is my point. I agree with you about the importance of these unfunded liabilities. I just completely disagree with you that this argument about these things being so hyperconnected or that all of a sudden were at the Cliff of d dollarisation, I don't think it's rooted in fact.

And I think again, IT ignores this unbelievably important piece of logic that all of you guys that say this tend to ignore. And it's still well address in daly's book, which is IT is a pet currency. And the minute you on't packet, none of you know what happens to IT, except that IT probably isn't worth trading today.

And if you actually then have factor in dollar reserves and everybody holds, that thing would skyrocket. Ue, and I would crush the export value of and IT happens to all currencies. And this is this funny thing that has happened to the united states, which is that IT ran forward and IT transition its economy to a service LED economy faster than other countries and other economies and other currencies dead. And nobody wants to just talk about that is satisfied and that sort, sort of drives X.

I don't think the big risk is that all of us on the dollar gets to replace by the you want as world's reserve currency. I think feebate lays out the more inner media path, which is people start to hedge their dollar exposure and decisions that used to be automatic, like trading oil and dollars, you know, the circle petrol dollar. Now IT becomes a little bit, you know, more of a decision. So know the that what happened .

with the pounds sterling? IT was a similar story and IT was not an overnight collapse. I mean, there were certainly these kind of puntuated moments where they were hit. You know, the history is that there was a slow evaluation over time. And the you know, as a result of obviously the economic pressure and the actually .

what happened pound strugling, was that I was back to the u ler. That I became. So exactly what is no place that if it's a free flow currency, yeah no, you're proving my point.

When I broke the back of the us dollar, what he forced George Brown, or what he forced the chance of the extra to do was to basically dept. The pound. And then, yes, you're right.

It's been like this ever sense ah that is one that is not if you let her be free floating. Nobody wants to trade that other currency. Everybody wants a dollar. And that something is David right? IT is the the worst affected lepper in the lebron colony.

yes. Was like this is why you have .

to have if you're .

going to be intellectual ly honest, just have a relative conversation about all of the currencies and all the things that they're also going through, which are also not not perfect.

The big payments for emerging and the frontier markets are .

extraordinary and just realized that if you want to go and peg your economy to somebody else is back. They also come with their own trials and tribulations that you have to rist manage as well. And now you have to decide, on baLance, you want to risk manage a centrally governance economy right from a central bureau or a freewheel. Democratic like these are all the discussions.

Yeah, it's A A lot of traces there.

Just back to the the non currency part of this for a second. There are a lot of like connections string, these things. I I actually think there is a strong connection between what's happening, for example, in chicago with the other control civil service and the unfun pensions all the way to the dollar status.

But there is also a connection between commercial real estate and these pensions. So on the previous show, we talked about the commercial real state, the looming crisis. And alayo thought that in the comments where he is talking on a book which is not true, I don't own I don't have a dollar investment in these office towers, but you know, who does pension funds? Who turns these office towers? So you're talking about pension funds.

There are three quarters unfunded, and they may have a lot less funds than they even think they do because we're about to have a huge reckoning. We're all of a sudden these office hours that we're supposed to be blue chip, that we're proposed to have the best clutter or there was in major american cities now of a sudden, they may not be nearly as valuable. They thought they were the end.

And if they don't know the building, they definitely on the debt, a hundred percent for sure, in the fixed income portfolios of all these pension systems or the debt that was used to finance these buildings by the reads and by, you know, the big real state funds that put those things together. So you're absolutely right. They are a hundred percent impact by what's happening.

We're not going to allow, given the civil unrest and social unrest risk. And obviously, as a democracy, we're not going to allow that all to go to zero. And we're not gonna pensioners not get paid ultimately, that's just a kiss of death. Maybe pension payments are reduced to some degree. But again, paris is a really great example of as you start to try and shift the economic guarantees that have been made to .

pensioners even slightly yeah.

was a two years in retirement city move. IT was certainly, you know, you can sit here and argue what people for yours for the whole life have. This expectation said, we have all, for our whole careers, invested in the social security benefits that we're owed as retirees through every paycheck that we've received.

And those social security payments may not end up coming back to our of social security is allow to go background. So ultimately, the government has to set step in and issue new dollars to make that up. Then the economic question is what happens to the value dollar? What happens to the value, the economy and so on. As you issued trillions of dollars to fill .

these false let me ask him a question that's a little more positive here, perhaps, which is, is there a path out of this, you know, debt cycle were in? And what are the top ways in which we're going to get ourselves out of this? I, I, I have three that come off the top of mind.

I have three of top my head. Number one is austerity measure. Number two is productivity through technology. And perhaps number three, maybe recruiting more entrepreneurs here to start more companies and some of these jobs. So intelligent immigration.

which one higher taxes? yeah.

Number one is higher taxes. And first time.

yes. So so look higher taxes because you can go after assets, you can go after wealth, so there will be higher taxes. Okay, I still think, I still think we'll end up seeing seventy percent tax rates on the the wealth est. Uh.

people in the seventy percent.

I don't see, I don't see IT being like unpopular. I think it's going to be unpopular with the wealth is going to be popular elsewhere. To fill the whole second is cut back on spending.

But that's a really hard thing to do because you as we ve talked about the past, people vote to get more stuff. So you put the politician and is going to vote to get you more stuff. You don't vote, people want to go cut spending.

So generally, you know we're going na likely see uh, number one happened first. Maybe they'll be a reckoning where you kind of produce spending. It's going to take extraordinary political will and an extraordinary depth of education and diffusion of understanding of this, this key critical economic problem among the voting class, uh, which is a really hard thing to realize. I think number three, you can get the public to .

understand to understand that we have to have austerity measures here.

And the number three, and and basically, people are gna have to make sacrifices. So the first sacrifice will be the wealthy. You're going to have to sacrifice through higher taxes. The sacred sacrifice will be everyone else by seeing reduce spending and the kind of the services and set up. The third is the hopeful one.

But we don't have a guarantee on this, which is, do we see economic growth through productivity gains? Can we create leverage with our resources and our people by using new technologies to get more with less? Know any time.

Yeah, like again, I I gave the example last time. But when a tractor was introduced in agriculture, all the people that were farming the ground didn't have a job anymore. But what happened is new jobs emerge in making tractors and serving those tractors. H, you know, gas pipelines to get gas to the tractors. All these economies emerged as a result of that economic technical innovation. So I think as we see A, I and other innovations hit the market, you know, new economies and new industries hopefully really blows some and a, and we can benefit from that economic growth and also lower costs for people purchasing goods and services. We have identified .

four things when reagan came in. Wasn't wasn't the higher tax rate like seventy percent?

Yes, yes. That was the top modular texture.

Seventy percent and seventy percent is not unheard of.

IT will happen again in u. Well, but reg. And lean economic by flattening the tax structure because marginal tax rates create a distance senate for people to work and produce more.

And so there is a big economic hit from this. Yeah and remember what the ninety seventies were like? IT was the malays days of Jimmy Carter. We had a horrible economy with high inflation, and everybody was paying high tax rates, and the government was making that much revenue because there wasn't as much economic activity going on. And during the one thousand nine hundred and eighties, we had an economic boom, and the government actually collected more revenue with lower tax rates because so much economic .

progress was in law sex. We identify four things, just like arn. Which one is the most important here? Which one is the most important? We talk about austerity, we talked about increasing taxes, we talk about innovation and efficiency, and then we talk about immigration, recruiting more highly talented people. When you look at those ford, you have any to add to that list to get out of this and which ones you .

think of the most important and what? When you look at federal tax revenue over a fifty year period, go look at the fed charts. What you see is that quite independent of the top marginal tax rate, the amount of federal seats of the government able to collect is roughly around nineteen percent, poster minus two percent.

And so you can only get so much blood from a stone, you can try to raise the top marginal rates. Then rich people have an incentive to basically find more tax protected strategies. So the history, this single back fifty years is you can only extract so much from taxes. And what you're Better off is a lower tax rate that is broader based and you go for economic growth that produces more activity. But look, if you if you're spending too much, there's no way out of that.

So austerity, critically important. And entrepreneurship .

an when bill clayton left office. And I I think reagan, through clinton, was the biggest twenty five year period of economic boom we've ever had. Federal spending as a percentage of GDP was eighteen and half percent.

He got IT down from like twenty two percent. He did a three economic growth, and he bragged about IT. yes.

So you know, look, where you want to be is I think federal spending should be in the low twenty. I think you want tax revenue to be in the high teens, nineteen percent. You have a small deficit. Those are the conditions for economic growth.

Any thoughts here on our way out?

I'm going to take the complete opposite of all of us, which is the um anti chicken little version, which is I think not much at all changes. I think that jet that GDP will continue to rise not just for us, but for every other country in the world whose fade is worse than the united states. And I think that on a relative basis, the united states will continue to be exceptional.

And that. This will not really be an issue in our lifetimes. okay. And i'm not saying that's a good thing, and i'm not thing that a just thing and am not saying that's what I want to happen. But pragmatically, I think that, that's what will happen.

And I don't think that there is a magic number where all of a sudden things start to break, where there's a magic number for debt to GDP, where all of a student, everybody finds religion instead, I think IT just creeps higher. And by the way, if you look at where dead to GDP was at the turn of the one thousand nine century and then what happened through the world war two, what we've really done is you we're retrace a lot as well. So there been moments where we've been out over our ski tips a lot.

And so I think it's just important to keep in mind that sometimes what works just continues to work. And I keep asking myself the relative question, which is what country, what economy, what group of human capital is Better position than the united states? And despite all of the things that are screwed up with this country, is hard to find a Better example.

So yeah, unless you happen to have the lucky mineral or oil club like norway or city arabian, you're going to be hard pressed to find a Better place to plant your money. And I think entrepreneur ship and immigration of the most important things we can do as well as austerity. And I think you mention is like all these moderate candidates in the middle might actually be able to talk about putting.

But by the way, you said something, you said something really interesting, which is if you look at the norway saud abud bi, what are those countries effectively becoming by monetizing the oil they invest in all of .

the economies that .

are working perfect segway. And norwegians aren't trying to invest in america. They're trying to put as much money to work as possible.

They're just trying to pace IT out so that they have time diversity and asset diversity. So to your point, this is a sort of a big of a self for filling profession. I think that what has work continues to work and then the burden for disruption gets higher and higher.

That changes two things that work in the world, having those natural resources or having entrepreneurship. Let's make a segway here. Or on the final point for minute point, this is .

important discussion, I think. okay. So adam, adam smith, one said that there's a great deal of ruin in a nation, meaning IT takes a lot of local bungling to screw up something as bigger a nation, especially a nation that's the number one superpower in the world that has the world's reserve currency.

So we are in some ways of beneficiary and coasting on hundreds of years of excEllence, of economic performance and great political leadership in this country. And the question to ask is not whether we can still post on that, but whether the politic leader should we have today is living up to the stand we had in the past. And I think it's clearly not. And the only question is when IT breaks, and it's hard to predict exactly when it's gonna AK. But what I do believe is that if we keep going the way we're going, IT IT will have to stop.

Well said, we're definitely bending IT right now. And when you bend IT, sometimes IT breaks right?

And and by the way, the reason why we are not going to pursue A I at break next speed, even though may lead to some sort of weird decoy an future, is because we need that productivity boost. We have no choice now because we .

are so that next y absolutely.

whoever gets their first is another perfect service. Two major stories this week that we need to discuss. The first is sarabia is public investment.

V C. ARM took a very interesting P R. Step of listing their funds that they have backed. And it's a significant list. Everybody from in recent horowitz to co. To are not surprising there and marking rison and bharrat and at newman had a major keynote at a saudi start up comforts.

I was actually as to kino the next one in riot, which i'm debating doing, and then in sink with that happening at the same time, there has been a debate of should L P, S in amErica be backing firms like sqa china, matrix china sea because those firms are now backing OpenAI competitors and a if a if we believe A I is the big race here, a should we as a country, we don't, we're not allowed to, to back military stuff, obviously, in these countries. But how do we, on this global chess board, decide, should we be taking money from salary? Should we be investing money in A I startups in china? So I think to motheh ve got a big perspective here globally.

Let's start with you two separate issues. Any surprises here by sauty the kingdom actually releasing the list of they're backing? And why would they do that at this point time? And then us investing in china, because we are, at a moment here across the roads, I think of, should we be engaging or not engaging and building bridges with china and saute for obvious reasons. Look, a abi.

all of the U A, E. These are countries that are really important on the world stage and increasingly so because they manage peace and prosperity regionally now, right? They have huge baLance sheet that can accelerate all kinds of projects all around the world.

And so they have to be taken seriously. And so this is a very smart marketing move by the P F, which is to essentially say, look, we are an established blue chip L P of the blue chip organizations that you are used to hearing about and celebrating. And I think that's very smart of them because what he does is get reinforces the feedback loop that other great firms should be going to them to raise capital when IT comes time for them to raise their and plus first fun.

And so I suspect, especially now, that makes even more sense because everything we've heard friedberg mentioned a couple of episodes ago, the united states limited partner market is essentially close for business. They have huge this location problems. The endowments are sort of close.

The universities are close. A lot of family offices are licking their wounds. And so this is a perfect time for folks inside I rabia.

And the U A, to basically put the foot on the gas and basically tell everybody, hey, we are open for business. So I think that, that makes a lot of sense. And I think that IT will be successful.

IT will work, especially in the moment now where us. Dollar flows from U. S. Dollar limited partners are very difficult and order to come by well.

and we're also selling billions of dollars in weapons to the kingdom. And we part of their .

valuable security partner of the united states, their valuable economic part, the united states, no different than doing business with any other country. I think it's smart by the P. I.

F. On the other thing though, with U. S. Firms investing in chinese, A, I IT should not oud.

And I do think that the folks that are responsible for, if he has, need to get a handle on this. Look, i've done a bunch of deals where I have had to jump through bunch of CPU hoops. Where explains, if so, basically, this is the committee on foreign investment in the united states.

Now what that means is if folks want to invest in certain things that are on the list of things and and i'll tell you the things that i've been involved with that, that came under civil rocketry and certain chip technologies are so advanced that the united states have very specific rules that limit the ability for foreign actors to invest in those businesses. And in those situations were a few folks invested beside me in some of these companies. We had to go through a process to get civil approval before that investment was allowed.

Now what's interesting about that is that's about money coming in. But I do think that the reverse now becomes important, because if U. S. Dollars are going to go and seed these extremely complicated advanced technologies abroad, especially into the hands of countries that are frenchies at best of the united states, I think we have a responsibility to have a point of view on that. And so I think Keith, a boy, was the one that was very definitive and said, this should not be allowed.

I do think IT is so early days, and we talked about this, we're on this curve of fuck around and find out, which means there will be some crazy examples of stuff that are very uncomfortable yeah, I don't think we want U. S. Fingerprints on this stuff being perfected outside of U. S.

porters. sex. When we look at the history of engagement with china, maybe can take up a multi I decade globalization perspective here.

When you look back on IT, the engagement with china created so much prosperity, so much intertwined dependency. Iphones being the the best example possibly we're selling them in china, were making them in china. China loses apple as a customer. That would be absolutely devastating for them. And I would obviously be devastating for apple as well.

So when we look back on that as a general rubrics here, do you think we enabled a competitor or we avoided future conflict because of the interdependency? And where do you sit in terms of thinking about engagement, vers, maybe isolation or something in between those two frenzies? Best of frenzy, successful.

The policy of constructive engagement, as IT was called twenty something years ago. The the behind IT was that if we engage with china economically and help make them rich than that, they would become more like us. They would somehow turn into democracy, and they would have tremendous gratitude towards us and we become friends.

It's not the way I worked out. There were people who warned that this was a foolish approach. So most nobly, the realist scholar john mr. Sharma at the universe, chicago, warn back in two thousand two that that was not the way that was onna play out.

If we made china rich, they would seek to convert that wealth into political power, and then they would act the way that all other great powers have behaved throughout human history, which is, they want to dominate their region, and they would seek to push the united states out of asia. And the future that he predicted twenty years ago, the future that come true. And I think they know all the constructive engages, I think, has some egg on their face.

Now I understand where they are coming from. This is a fundamental difference between whether you see the world in economic terms, which is about creating positive sum games, basically trade, or whether you see the world fundamentally in geopolitical terms, which is about the baLanced power, which is more of zero, some game. And I think that both views are both extremely important.

We want to engage in power some leaderships that generate more trade and more wealth, united states. At the same time, we have to be aware and concerned about the baLanced power. We do not want a number two country.

In the world who can rival united states in terms of power, who basically could win a security competition with us. And we certainly don't want a country in the world to be more powerful than us. So I think this is sort of the end in the Young, is geopolitics, sources, economics.

And I think what's happened with china of the last several years, as is flip, I think we used to see the relationship primarily in positive some economic terms. Now we see IT in geopolitical terms. And I think there's a lot of firms now in the united states you haven't embraced this new reality.

And to go back to your question about, you know, when should adventure capable from take money from a foreign country when I shouldn't, I think is a very simple rule for this, which is if the countries, the U. S. I, I think it's fair game because the U. S.

Said this is a partner of our, so why can't you do a business with them? But the us. Government has said this is an versa. You're putting yourself in a really difficult, precarious spot by doing business with them because .

then you have to explain yourself to the U. S. government.

This is the very simple rule we would use, is I don't we would never consider taking money from russia or china.

any country that the U.

S. Government says an adversary of ours. But if the U. S. Governments is a partner and now I then I think .

you consider IT, do you think there's a way sex to salvage the the relationship with china and make IT productive? Or do you think it's a far gone conclusion this point? Because one might argue, when I heard people argue this, maybe china would have invaded I want already if IT wasn't for the interdependency. So I I know we're dealing with, you know, a lot of we do a lot of predictions here, but do do you think I can be salvage and do you think I would have been a worse relationship if we hadn't had this interdependency .

that's been built? I'm not quite sure that the economic inter dependence theory preventing war has been definitely proven. If you go back to a war or one, for example, IT was the case that britain and germany actually were each other, the number one trading partners, and they still got in one for reasons that in our insights seem really silly. So i'm not sure that economic dependence can prevent IT only doesn't prevent security competitions marries and and therefore, I don't think you can necessarily prevent a war although you know, having business ties can lead to paul ve interactions so I understand the jury stall out on that. But I think that like I said, I think once your inner security competition in the way that we are with china, I think geopolitics.

rather economics, is in the driver. S intel, you would never invest in a north american A I company, a russian A I company or an iranian A I company. Had you think about china? And then just generally this topic of when to engage, when venture capitalist, when startups uh you know um and trade partner should engage with various countries. How do you think .

about a freezer in what role .

as an investor is? Well, we could we could take multiple roles here. Founder investor will be the top two for this program.

I think.

Or taking money from any of those three possible very few .

portfolio companies that don't benefit some way from the trade relationship with china. So you know the sexist point are not sure you can really say china is a true and complete adversary in the sense that we're on opposite sides. There's obviously deep interdependency.

So you know, it's hard to kind of say I draw the line at this kind of technology investing there, but identified from their technology investing going on there in other ways, it's with some of other businesses, right? I think that that's really where you kind of run into A A bit of a canon um that we do have a deep inter dependency. So you know like with respect to like investing in china, I I don't know.

I think the investing in china thing is pretty difficult given that there is a single power that gets to decide what does. That doesn't happen on me. Look what to happen. Alibaba, a lot of shareholder got pretty wiped out there.

These are these governments where you have like the update, the potential of getting completely wiped out by government action is a pretty scary place to invest in general, be more oriented as an investor around those concerns that I am about. You know it's it's really hard to do the calculus on on M I. Helping or hurting amErica versus china. You know you you can argue a hundred ways each of those side.

What do you think of sexes framework? If for partners, you know, fair game. If not partners, not a good idea to put your neck up.

But we're part. Sorry, are you ask, are you saying like we're not partners in china?

Well, IT seems like the U. S government has said where adversaries is now and that were in in a pretty dog competition.

Specific i'm talking about a situation in which you're .

taking money from them. yes.

Do you think that selling them products that are you not like super strategic, like I think selling them are most advanced chips is dangerous. But you know, I look I think if you're selling the products that help restore the trade deficit and correct, that movie is a problem with that. Yeah, I don't have a problem with are selling movies or cars or something like that to china.

The question is though, I think if you are venture capital from do you take their money? That's one specifically talking about IT. And I think whether you're allowed to or not, we don't because we just not enough to think about of what complications I could cost down the road.

Also, getting your money out of china also a difficult task. IT seems these days, cash APP creator Bobby A K, A crazy bob on twitter that was a twitter handle, was stabbed to death tragically. And seventy co.

Earlier this week, he was square for C. T. M. He worked at google on android, who was the chief product officer at mobile coin, also an Angel investor in a tonic company's fig ma SpaceX cluster, well known in the industry.

Officers responded at about two thirty five A M to report of a stabbing on the three hundred block a main street and arrived to find lee, who had been taken to hospital to come to his injuries. There no arrests has been made. A lot of thanks for disco.

Politicians are sending .

their thoughts and prayers, but obviously, send to go is still very dangerous place that seems. Any thoughts on this and how IT might act as some sort of a crossroads or not? And thoughts and paris.

obvious ly to his family. This, this was a pretty tragic event. As a lot of people who I knew that were pretty close with him. I got several messages on his passing. He was, uh, I didn't know him. Uh, personally, I think we maybe once twice he worked on android at google and obviously at a key role at square in the early days and who was a pretty uh, impact of an important person but also supposedly A I didn't know him very well again but everyone says just such an incredibly kind and generous person so uh, tragic loss um I used to live two blocks from, uh, where the the event happened also, remember, where is your fever? Is that a bad fit in somma that rank center right by the big condo towards there and this right with the sales force a officers used to be and you know block from the water .

front is is a part of all that drug craziness.

No, it's not in the heart of the camp ig district. It's just a nice area and so a quiet area, right? So at night there, I went to send from six a few weeks ago, I told you guys, I pull up to a restaurant on the basket ero. And I joked with my body in the car on, like, oh, my car is gonna get broken into our dinner because on park on the street, we went to dinner ninety minutes later, came out course, my car been broken into the trunk and pop up. But I just like.

this is a fancy area, sala cha, very fancy area. So a look.

here's the thing. If you park at a parking meter and antro cisco for eight minutes too long, you get a sixty hundred dollar parking ticket. And same from cisco has become an upside downtown. What I mean by that is I think that like so much of the response that we've had in the last couple of years to power dynamics and concerns about the powerful having too much influence over those who are less powerful, who have less influence and who suffer as a result of their demand influence, the the response has been to turn things upside down, which is to give those who are lacking in the power structure everything, and to try and take everything away from those who at the top of the power structure.

So if you want to deal drugs in the OpenAIr, you want to walk in the wall Greens and steal thousands of dollars of goods and walk out, nothing will happen to you, because you were embedded with this powerless kind of position in life. But if you have a car and you park at a parking meter, and you say the parking meter for more than ten minutes, you get a ticket. And the consequences of responding to power dynamics by flipping the power structure upside down is obviously can be more negative as we're kind of experiences, I think are cute intent from cisco, but also around the nation.

And by the way, I think that the supplies in a lot of other ways in terms of how we're doing college admissions um in terms of how we're selecting people for jobs, in terms of you know recent applications for pilots, for doctors, where the assessment is less about that. The person who was disadvantage at the beginning of their life or career or trajectory or educational path be given greater opportunity and greater resources to catch up and to get there? Or did we just flip the power dynamic upside down and just give them the end point? And as a result, there is a massive kind of department that I think can a ise.

And it's not necessarily always the case that IT will arise. IT is not necessarily the case that selecting someone based on some demographic profiling to be an airline pilot necessarily means that, that airline is more likely to have airplane crashes. But in certain cases, when you don't prosecute certain crimes like robberies or people walking into stores or breaking windows or dealing drugs in middle the street or camping on the street, and you fast forward a couple of years that power dynamic, the flip of that power dynamic, causes the whole town to go upside down, and everyone who's sitting on the bottom end up becoming a victim themselves.

And I think we starting to see in links of this inference is go, we certainly have for years, sax is ranted on about this. With respect to some of the non prosecution that happened historically, and I totally agree with him on those points. And I think that it's come to a breaking point and say for cisco, but that's really a beacon for what else is going on.

And you know some people call IT voguish. I I think maybe this notion of voguish is one small element or segment of the broader issue with how we are tackling with and dealing with embedded power structure issues in this world today. And the flipping of those power structures upside down doesn't necessarily yield be the outcome we all want.

And I think we're starting to see reasons why tax any thought here? That's my rent. I can't .

disagree with you.

Yes, freek, I I didn't know you, but I I know many people who knew and I was getting tax. And obviously we feel really bad for him as whole family, his kids, his father is coworker s friends. We don't know exactly what happened yet, but I think we suspect, and I would bet dollars to dimes, that the story is very simple to a case.

We know a recently the and a cup for case where a Young woman was basically stabbed for no reason by a psychotic homeless person who had been through the revolving door of the jail and criminal justice system, who could have been locked up, who was IT was not to locked up because of this push for dearmer ation. And you can argue that maybe a be Better for that person to be in Mandatory treatment or in a even a maybe a mental asylum. But the idea of just releasing these people onto the street, I just think, is in outrageous application of responsibility by our elected officials who run the criminal justice system, who pass our laws.

And the thing I just wish is that I could lock for twenty four hours the the people like our supervisors or governor, or the people who basically make these laws, or the people who are pushing for decoration, ation of these violent offenders by these nonprofits. I wish I could lock them up in a room for twenty four hours with the people that they think are safe to release on our streets. Let's see if they really would take that test because that seems to me that these these elected leaders and these non profits are pushing for these outcomes.

They are setting loose on us a predatory, criminal or psychotic element that jeopardizes our safety and makes these cities unlivable. And we should not tolerate that. And quite Frankly, the responsibility goes beyond those elected leaders that goes all the voters as well because we keep putting up with this.

And whereas our governor, when this happened, he was in florida doing something wrong at some high school where he was trolling, ran desi entities because distance is taken on D. I. At that score. So that's where a newsman was. And he is extremely .

popular in the cultural instead .

of the cultural, in a distant, instead of basically fixing the criminal justice. Is in california even worse now, because he's actually shut down two persons and released lots of people. So where is the push for criminal justice reform in california and protecting the seasonally? And until the voters in severs in california start demanding this, there's never going be a change start. Listen to gary, can you just vote for her? The girl's you to vote.

I I think it's very good. I I can't disagree. And this the supervisor who seemed to control a lot of this and uh chamakh chair just this week, mayrant is sara is talking about on his twitter the reduction in homicide shootings and they have literally counted the if you want to say, a drug addicted, mentally ill, homeless, there's obviously three or four different things going on here.

When you look at the population that's living on the street, some number of them down on their luck, some number mentally ill, some number addicted to drugs and some number of combination of those things, he seems to be getting IT done in miami. And, you know, other states seem to, another city seem to have gotten this under control. Is there there any hope for tamsa Sophia tho, or assist, just gonna take five or ten years to bottom out?

I mean, IT takes regime change. I think new york had a long period of lawlessness where people were afraid to walk down the streets. IT took a handful of mayors to draw a hard line in the sand, to increase policing, sometimes to introduce some pretty controversial concepts at the time, or at the time that were supported, but now some controversial.

you think about stop, ask. And first.

I think he was called the broken windows theory of just .

take care of the words.

take care of the little things, so that the little things don't compound into the big things. But whatever you believe needs to get done, I think it's pretty clear that what is being done isn't working. And so the real question is, can people save through the naked partisanship to agree that this is not working? And sadly, what I would tell you guys is that I don't think they're there yet. And the reason is because amErica is the most divided it's ever been, especially on issues of race and social justice and social norms. And I think that crime has gotten caught and painted with that brush, which means that the .

idea are very aggressive.

Policing and safety are now viewed as opposite in antithetical to social justice. And I don't know how that happened, but the result of IT is this, which is these folks will never agree that this is not working. And you'll have to go through recall election after recall election.

Even then, it's not going to be enough because the smart politicians will say what they want in terms of life safety matters. But then a lot of voters will vote the opposite. The example in chicago that David brought up earlier is really interesting, because IT was essentially a social justice candidate.

First is law and order candidate through their democratic ranks. And the social justice candidate one, the progressive candidate one, in the person that wanted to tax businesses and individuals one, and the person that wanted to sort of focus one order lost. So what does that say? IT says that we are still in the moment where we can agree on what is important. Yeah, that's really scary. And so I think you kind of have to, unfortunately, vote with your feet if you are lucky enough to do so.

I think that's okay.

Yeah who's left over or a lot of people who are not in a position to just up and leave and then they are unfortunate .

left buying tragic situation all around. And I will never host a conference or any event in conferences co, until this is solved. Because when people ask us to do events, i'm like people don't want to come to server just so they are afraid. So I do my events in nappa .

or in cemetary that started a lingle school is in english, that is on the I B system, international bacheller a system. And it's a sister school to the school in the city. We had a fundraiser, which was literally right downtown in that in campaign area.

And when I pulled up, I was like, is this for real? It's an open area drug market where folks are doing drugs, selling drugs right in front of you. They passed out completely incapacity. About a third of the guys are wearing bolo clubs so you can identify them. You have no idea what they look like.

I grew up in brookline in the and eighties, uh, when I was legit dangerous. And when I walk in samper's o IT feels much more dangerous than that crazy era. IT feels random IT doesn't feel .

like there's organized crime and crime like I grew up in a pretty crappy neighborhood and you knew who the gangs were. You know who the tough guys were. You knew how to avoid trouble.

They didn't come and randomly come and start you to death, right? And so yeah, Jason, you become street smart growing up in a culture like that because you know how to avoid that, you know how to be alert. This doesn't feel like that this is just like a bad role of the dice and you could get stepped to death just walking on the street. That does not where where are the politicians to stop this?

I mean, they don't care. There's the level of corruption and conferences go is unbelievable. The incomplete amongst those supervisors, the mayor, the da, everybody, it's just incompetence and nobody has the hood power, the war with all to say enough. And I think the other group to blame are all the rich people and powerful people who just haven't been active in politics. And I know some of us in different ways, but I think it's going to take a corded effort by people who really care to vote out all these supervisors and bring in it's GTA be regime change.

And I just don't know there's the where we thought to do because every time as a person who has some means or is successful in some way that you stick your neck out there like you have done insets the the attacks that you will get from this insane left. I don't want even use the word work, and I think it's a different arrangement. I think it's actual corruption where they're making so much money offer this homeless industrial complex.

They are getting paid so much money that the griffe is so deep that they are gonna fight for this. And it's going to take some really courageous people like garreton and maybe if it's acts and other folks to back a slate of people um to change this. And we need people to run for government who are brave and who wants to put their neck out there and say enough is enough. We're going to the city I just don't know, is going to happen. This is.

yeah, the issue is that I S IT takes more than one election. So listen, I think we made a positive change by a removing, chased by dean. I think brook Jenkins has the right attitude.

He cares about victims. I think he wants to prosecute. The issue is that you've got a police department that thirty percent of the number of officers that they want because they folded with the third from the police movement. You've got the board of supervisors and you've got an oversight board on the police that basic make their jobs harder. And it's not it's not one election because even the mayor doesn't control IT because the border of supervisors really has all the power is in a cisco.

So they take a job that really should be one or two people's jobs like the D A, like the mayor, and they break IT up into this, like more to supervisors, where you've now got to be familiar with a dozen different races in order to a factory. A change. Well, the machine knows how to do that, but the ever sym dozens, they make IT really hard to affect ate change. But there are groups that are spring up and thanks to go like grow sf and you know people like gary who are on top of IT and that's why just follow them and and. Those were the recommendations because are actually cracking how to make a difference.

Alright, I think on that we will rap for the dictator to mathai appetite, the rayman David sacks and the sult of science. A berg A I am the world's greatest moderator.

will see at the island summer twenty boys.

your.

Own man.

We open sources to the fans and .

just got crazy with.

Sexual .

tension B.