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0:01:43 – Episode 328.
0:01:45 328 is the country code belonging to Guyana.
0:01:47 In 1928, Mickey Mouse first appeared
0:01:49 in the sound cartoon Steamboat.
0:01:53 Willie, what’s the difference between Disney+ and U-Porn?
0:01:55 Disney+ wants you to hate your stepmother.
0:01:59 Go, go, go!
0:02:10 – Welcome to the 328th episode of The Prop G-Pod.
0:02:12 In today’s episode, we speak with Michael Lewis,
0:02:15 the host of the podcast Against the Rules
0:02:18 and New York Times bestselling author of several books,
0:02:21 including The Fifth Risk, Flash Boys, and The Big Short.
0:02:24 We discussed with Michael the state of sports betting,
0:02:25 the challenges young men face,
0:02:28 and the controversy surrounding the book Going Infinite,
0:02:30 which explores the rise and fall of Sam Bakeman Freed.
0:02:32 I really enjoyed this conversation.
0:02:36 He’s a very, simply put, Michael is a great storyteller
0:02:39 and has written some of the kind of iconic books of our time.
0:02:40 Okay, what’s happening?
0:02:43 Home in London before heading to South Africa
0:02:44 for the holidays.
0:02:46 I’m super excited.
0:02:49 I’m taking my sister and her family.
0:02:51 My sister is turning 50,
0:02:54 which in the Galloway household means she’s turning 40.
0:02:56 And love hanging out.
0:02:57 You know, it’s wonderful.
0:02:59 So my sister and I never lived in the same household.
0:03:02 I was raised by a single immigrant mother.
0:03:05 My dad, that was my dad’s second wife as far as we know.
0:03:05 Pretty sure there was another one
0:03:07 that we don’t know about.
0:03:09 And then he started his third marriage
0:03:13 while he was married to my mother, bad form, bad form.
0:03:16 And he married Linda, who is Ashley’s,
0:03:18 they had a daughter and that was Ashley.
0:03:19 And Ashley and I always got along,
0:03:21 but part of it was we didn’t live together.
0:03:22 So we were just kind of,
0:03:25 you know, just 10 years difference between the two of us.
0:03:28 And as we got older, we became kind of,
0:03:29 it was sort of fun to just sort of wake up
0:03:32 and realize you had a sibling that you got along with
0:03:34 and you still felt that familial bond with
0:03:36 and we had been close siblings.
0:03:41 And so it struck me how many siblings don’t get along.
0:03:43 And I think that’s one of my biggest fears about my boys
0:03:44 is they’re going to grow up
0:03:46 and for whatever reason not be close.
0:03:49 But I found that not living with my sibling
0:03:51 and then waking up and finding out
0:03:52 you had this intelligent, interesting,
0:03:56 you know, nice person who felt a bond with you
0:03:57 was really wonderful.
0:04:00 It’s also been key in helping take care of my father.
0:04:04 Anyways, I’m super excited about going to South Africa.
0:04:05 I love Africa.
0:04:07 This will be my third time.
0:04:10 And people say, they say, don’t say Africa.
0:04:12 That’s like saying North America.
0:04:15 Every part of Africa I’ve been to, I’ve really enjoyed.
0:04:17 Anyways, moving on.
0:04:19 Major shakeup in the advertising world.
0:04:23 Omnicom announced a $13.25 billion all-stock deal
0:04:26 to acquire its rival interpublic group.
0:04:29 The deal would create the world’s largest advertising business
0:04:31 merging the third largest ad buyer Omnicom
0:04:33 with the fourth largest interpublic.
0:04:35 According to 2020 figures,
0:04:37 the combined entity would generate over $25 billion
0:04:39 in annual revenue surpassing competitors,
0:04:41 including WPP and Publixy.
0:04:43 By the numbers, let’s look at it.
0:04:45 WPP registered 19 billion,
0:04:49 Publixy 16, Omnicom 15, and IPG 11.
0:04:53 This is what happens when there’s essentially
0:04:56 a tectonic shift away from your sector.
0:04:58 And that is the first thing that happens is cost cutting.
0:05:01 The second thing that happens is consolidation.
0:05:02 So you can bulk up,
0:05:04 which is effectively a way of cost cutting
0:05:06 ’cause then you only need one headquarters, one CFO,
0:05:08 one admin staff.
0:05:11 The modern kind of ad conglomerate was sort of forged
0:05:15 by Sir Martin Sorrell and it was the following.
0:05:17 These are good businesses or at least they used to be,
0:05:19 the ad agency business or the agency business
0:05:21 where companies would think, all right, we’re Intel,
0:05:22 we’re not that creative.
0:05:24 We get engineers to come work here,
0:05:27 but we’re not about making commercials or designing logos
0:05:29 or putting on conferences or buying keywords or what have you.
0:05:32 So we’re gonna outsource this part of the company
0:05:34 and we need to find really creative people
0:05:36 who see all these types of ideas
0:05:38 and played with the wrong toys or the right toys
0:05:40 and where those people that decorated their desk
0:05:42 and funky shit or you went over to their apartment
0:05:43 and their apartment just seemed cooler than yours
0:05:45 even though they made less money, those people.
0:05:47 And we need to outsource it.
0:05:50 And from 1945 to 1995,
0:05:52 the algorithm for printing money
0:05:54 or creating shareholder value was the following,
0:05:57 mediocre shoes, salty snack or car,
0:05:58 and then wrap brand codes
0:06:00 or these amazing brand codes around it
0:06:02 of masculinity, maternal love,
0:06:05 European elegance, American macho,
0:06:07 whatever it might be to be smart, to be practical,
0:06:08 whatever it was.
0:06:10 And the thing about brand building
0:06:11 was it was the ultimate strategy
0:06:13 because the sword around building a brand
0:06:15 was so incredibly sharp.
0:06:16 It was such a valerian steel
0:06:18 and it was specifically not the creative
0:06:20 but the fact that you could consolidate the market
0:06:24 and reach people with these pieces of creative
0:06:26 that created these intangible associations
0:06:27 wrapped around a mediocre product.
0:06:30 You could find 80% of all of America
0:06:34 in one of three places NBC, ABC or CBS for five hours a day
0:06:35 so we could build these brands.
0:06:37 So essentially the ability to find a mediocre product
0:06:39 and build amazing associations around it
0:06:44 such that it became not $8 of leather and laces
0:06:48 but 140 bucks of being like Mike
0:06:51 or not 20 cents of peanut butter paste
0:06:53 but $2 or $3 of maternal love
0:06:55 because choosy moms choose jiff.
0:06:57 This was the ultimate way to kind of build shareholder value
0:07:01 and you had General Motors, you had P&G, you had Coca-Cola.
0:07:04 I think kind of the beginning of the decline of the brand age
0:07:06 was when Honda introduced a compact car in the US
0:07:09 and said, all right, it’s not all about branding.
0:07:11 It’s just about a better car at a better price.
0:07:15 And then the big, big unlock or kind of the last nail
0:07:19 or what really took the vampire of kind of ad supported
0:07:21 or the brand age down or was sort of the wooden stake
0:07:24 in Don Draper’s heart was the introduction of Google.
0:07:27 And that is no longer needed to defer
0:07:28 to the shorthand of a brand.
0:07:30 And a brand is just diligence, right?
0:07:31 I used to stay at the Mandarin Oriental
0:07:32 with four seasons wherever I’d go.
0:07:34 One, because someone else was paying for it
0:07:35 and two, they was doing a good job.
0:07:39 Now I want to use my social graph, Google AI to find out
0:07:43 that the best gym in Europe or in Berlin is at the warehouse
0:07:46 or that I want to stay at, you know,
0:07:48 which lodge do I want to stay at in Africa?
0:07:50 All of a sudden, I’m no longer deferring
0:07:51 strictly to the brand, right?
0:07:54 I can find, I can do my own homework
0:07:56 and also a big digital unlock, right?
0:07:57 Tesla doesn’t need to advertise as much
0:08:00 because if you can tune up your electric car
0:08:01 over the airwaves, that’s amazing.
0:08:05 Google, Instagram are in fact 10x better products.
0:08:08 So digital innovation has kind of made product cool again.
0:08:11 Brands are now built by supply chain and innovation
0:08:14 and technology that unlocks some sort of product feature.
0:08:16 That leaves ad agencies, quite frankly,
0:08:17 with declining power.
0:08:19 And the problem is it hasn’t been overnight.
0:08:21 It’s kind of like the magazine industry.
0:08:25 The worst thing that can happen to you is to die slowly
0:08:28 because the thing about marketing and ad spending
0:08:30 is that it’s incredibly resilient.
0:08:32 It’s always been about 1.5% of GDP,
0:08:34 but it also doesn’t grow a lot as a whole.
0:08:36 Google hasn’t grown the market.
0:08:39 They’ve just taken tens and now hundreds
0:08:41 of billions of dollars out of the ecosystem.
0:08:44 It is a bit of a zero sum game.
0:08:46 And these guys have been on the wrong end of that.
0:08:49 Now, the merger we’re talking about here
0:08:51 is expected to result in $750 million
0:08:52 in annual cost savings.
0:08:53 Omnicom CEO, John Wren.
0:08:56 I met with John Wren literally 25 years ago
0:08:58 about potentially selling my brand strategy
0:08:58 for a profit to him.
0:09:00 Seemed like a very smart guy.
0:09:01 He’ll lead the new company,
0:09:04 which will keep the Omnicom name, the combined company,
0:09:08 Interpublic IPG CEO, Philip Krakowski,
0:09:11 will serve as the co-chief operating officer, co-officer.
0:09:13 That means he’s on his way out.
0:09:16 Omnicom shareholders will own 60.6% of the combined company
0:09:20 while interpublic shareholders will command 39.4%.
0:09:23 Interpublic shares were up 11% on the news
0:09:24 while Omnicom’s fell 6%.
0:09:26 Typically, the acquiring company who’s on top,
0:09:29 their shares fall because usually people get excited
0:09:32 about building a bigger empire and they overpay.
0:09:34 Only one in three acquisitions works.
0:09:36 Omnicom has tried to do this before.
0:09:39 Back in 2013, Omnicom tried a 35-million dollar merger
0:09:42 with Publixy, but it fell apart due to regulatory issues.
0:09:45 Still, Omnicom CEO, John Wren remains optimistic
0:09:47 and has said the current regulatory environment
0:09:48 is more friendly to business.
0:09:50 It’s not that they’re more friendly to business, John.
0:09:53 It’s just they realize what trouble you’re in
0:09:56 and that you need to bulk up or specifically cut costs.
0:09:58 The notion that they’re gonna get in the way of this
0:10:00 or they’re gonna have some sort of monopoly power
0:10:01 is just insane.
0:10:02 Now, I wouldn’t put it past the DOJ or FTC
0:10:05 ’cause in my mind they do make irrational decisions
0:10:06 every once in a while.
0:10:08 But for God’s sakes, this isn’t about monopoly power,
0:10:11 controlling the media ecosystem.
0:10:15 This is about literally just trying to stay afloat.
0:10:17 In some, if you can’t beat big tech,
0:10:19 you need to consolidate and get bigger yourself.
0:10:22 The deal is expected to close in the second half of 2025.
0:10:25 The big question is, will this integration actually succeed?
0:10:27 This is the right thing to do.
0:10:29 You know, IPG’s on bottom here.
0:10:33 If you’re at headquarters in admin, in middle management,
0:10:34 you’re not client facing,
0:10:38 you’re not ringing the registered IPG, folks,
0:10:40 let’s be clear, you’re on the green mile.
0:10:42 And while John Wren will paint a vision of the future
0:10:43 and how there’ll be a lot of growth
0:10:45 and they don’t have an immediate layoffs plan,
0:10:48 okay, stick around to get the severance, but be clear,
0:10:52 if you’re not directly linked to a client
0:10:55 or a critical mission critical function,
0:10:57 and you’re making a good living,
0:10:58 you’re about to be consolidated.
0:11:02 We’ll be right back for a conversation with Michael Lewis.
0:11:09 The Capital Ideas podcast now features a series
0:11:12 hosted by Capital Group CEO, Mike Gitlin.
0:11:14 Through the words and experiences
0:11:16 of investment professionals, you’ll discover
0:11:19 what differentiates their investment approach,
0:11:22 what learnings have shifted their career trajectories,
0:11:25 and how do they find their next great idea?
0:11:28 Invest 30 minutes in an episode today.
0:11:30 Subscribe wherever you get your podcasts,
0:11:33 published by Capital Client Group, Inc.
0:11:38 – Support for Prop G comes from Miro.
0:11:40 If you’re a CEO, you understand the challenges
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0:11:43 One of the issues is balancing the big innovative ideas
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0:12:37 Go to Miro.com to find out how.
0:12:39 That’s M-I-R-O dot com.
0:12:46 Support for the show comes from Skims.
0:12:49 Listen, I’m not going to tell you you have to wear underwear.
0:12:51 I say live and let live, all you commandos out there,
0:12:53 but if you’re gonna wear underwear,
0:12:55 then you can’t go wrong with the support, durability,
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0:13:50 (upbeat music)
0:14:02 – Welcome back.
0:14:03 Here’s our conversation with Michael Lewis,
0:14:05 New York Times bestselling author
0:14:08 and host of the podcast Against the Rules.
0:14:12 Michael, where does this podcast find you?
0:14:15 – Smoke Tree Ranch off the side of Palm Springs,
0:14:19 which is a gated community created by Walt Disney
0:14:22 and some of his pals way back when.
0:14:23 – Wow.
0:14:24 Let’s buzz right into it.
0:14:26 In the latest season of your podcast Against the Rules,
0:14:28 you investigate sports betting,
0:14:29 which we talk a lot about here on the pod,
0:14:33 which you refer to as a great social experiment.
0:14:35 Walk us through the state of play of this experience
0:14:37 and where you think we’re headed.
0:14:40 – So in 1992, Bill Bradley,
0:14:43 then a senator, created essentially a federal ban
0:14:44 on sports betting.
0:14:46 It exempted Nevada,
0:14:48 but basically it was against the law.
0:14:53 And the Supreme Court repealed that in 2018.
0:14:57 And the new law of the land is states can legalize it
0:15:00 if they want to and 39 states have.
0:15:03 And about two thirds of the American population
0:15:07 has access to sports betting on their phones.
0:15:08 About one third still doesn’t.
0:15:12 And the industry here is dominated by two companies,
0:15:14 FanDuel and DraftKings.
0:15:16 They have a little hard to say exactly,
0:15:20 but say roughly 70% of the market.
0:15:22 And they were before they were sports gambling companies,
0:15:24 they were daily fantasy sports companies,
0:15:28 which gave, they actually was the perfect thing to be
0:15:31 before mobile sports gambling is legalized
0:15:32 as a daily fantasy sports company.
0:15:34 You know all the customers,
0:15:36 you have data on all the customers.
0:15:40 Sports bets in America have skyrocket.
0:15:42 It’s a little, again, a little hard to say
0:15:44 ’cause hard to know what numbers to trust
0:15:46 because there was an illegal market
0:15:48 that presumably is not quite as big as it used to be,
0:15:50 but it’s gone from,
0:15:52 the legal market has gone from a few billion
0:15:55 to over a hundred billion a year.
0:16:00 And there’s just starting to be some academic research
0:16:04 showing the social effects of this.
0:16:05 I mean, it’s kind of cool this.
0:16:08 The way it’s rolled out has created these natural experiments
0:16:11 that you have because you have states that are side by side.
0:16:13 One has legalized it, one has not legalized it.
0:16:18 So you can sort of tease out the effects of legalizing it,
0:16:21 but bankruptcies are up, savings rates are down.
0:16:23 If it follows the path that it followed
0:16:25 in the United Kingdom and Australia,
0:16:26 suicide rates will be up.
0:16:29 So there’s some social costs to it all.
0:16:32 But I think like really early days,
0:16:34 I mean, you know, it’s only been legal for six years.
0:16:35 There were companies that really only been up
0:16:38 and running in most states for just a few years.
0:16:41 It’s kind of not hard to make some predictions
0:16:44 about where it’s going, but it’s not there yet.
0:16:47 – So I’m a glass half empty kind of guy,
0:16:49 but you cited some stats.
0:16:52 I’ve seen 20 to 30% increase in bankruptcies
0:16:54 and states illegalize it.
0:16:57 I see young men with kind of less structure in their lives
0:16:58 who are more prone to addiction.
0:17:02 I think six out of seven gambling addicts are men.
0:17:04 My understanding is gambling has the highest suicide rate
0:17:06 because if you’re addicted to meth,
0:17:08 people figure it out and try and intervene.
0:17:10 You can get in way over your skis with gambling
0:17:13 and nobody knows and you decide there’s only one way out.
0:17:14 I’ll use an academic error.
0:17:16 I think this is a fucking disaster, your thoughts.
0:17:18 – Yeah, I’m totally with you.
0:17:21 This is why I was trucked in the subject.
0:17:25 I couldn’t believe, well, look, once it’s legalized,
0:17:28 I’m a little shocked by the insensitivity
0:17:30 of the social, to the public health crisis
0:17:35 is gonna trigger because it’s essentially Wild West
0:17:37 in how you can get to the customer
0:17:40 and they aren’t, you know, the sports gambling companies,
0:17:43 they were mistaken for casino companies
0:17:44 when the people kind of thought,
0:17:46 “Oh, it’s gonna be like a casino business.”
0:17:51 So that the kind of big, what the house takes,
0:17:54 about roughly 5%, it’s always been kind of 5%,
0:17:56 we remain kind of 5%.
0:17:58 This number keeps going up with these companies.
0:18:00 They’re like, it’s like at 15%.
0:18:04 And effectively what they are doing
0:18:08 is mining the entire US population
0:18:11 for people willing to make stupid sports bets.
0:18:14 And they have a finely honed ability
0:18:17 to identify anybody who actually knows what they’re doing,
0:18:18 like the sharp gambler,
0:18:21 someone who actually might have some edge in a sport
0:18:24 and toss them out or limit them to the point
0:18:26 where they’re effectively tossed out.
0:18:28 So that their business is built on people
0:18:30 who don’t know what they’re doing.
0:18:33 And it’s further, in a way that, you know, casinos,
0:18:34 when you’re in a casino course,
0:18:37 it’s manipulating you in all kinds of diabolical ways.
0:18:39 But when the casino’s in your pocket,
0:18:42 it’s like your whole life is in the casino kind of thing.
0:18:46 And they have an ability to sort of like nudge people
0:18:50 in doing stuff that they just wouldn’t think to do.
0:18:52 It is, and it’s making the dumber and dumber bets.
0:18:54 When you kind of think about,
0:18:57 okay, like what’s the disaster going to look like?
0:18:59 It’s not just men, it’s young men.
0:19:03 Young men are the real target.
0:19:06 The Lancet, the British Medical Publication,
0:19:08 just came out with a study that said,
0:19:10 I mean, this number is so high
0:19:13 that I wanted to pause before I say it,
0:19:17 but the 26% of young men who were exposed to gambling
0:19:19 developed some sort of gambling problem.
0:19:23 That seems very high, but even if it’s half that,
0:19:26 it’s like the NCAA,
0:19:28 who’s new president, Charlie Baker,
0:19:30 was just shocked by the gambling activity
0:19:32 he was seeing on campuses,
0:19:34 commissioned to study,
0:19:35 to see how many people were doing this,
0:19:38 and more than 60% of young men on college campuses
0:19:39 are sports gambling.
0:19:40 So you do the math.
0:19:42 It’s just like, we’re like,
0:19:45 it’s almost like we’re creating a pool
0:19:47 of future gambling addicts.
0:19:49 And you’re right, it’s very interesting.
0:19:51 You’re right about like,
0:19:55 when you think about what’s gonna stop this train,
0:19:58 if you compare it to like opioids,
0:20:01 like opioids was able to run for 20 years
0:20:03 before anybody really put a stop to it.
0:20:06 And 750,000 people die.
0:20:10 And it was about as visible and epidemic as you can have.
0:20:12 This, it’s invisible.
0:20:15 You don’t see what’s happening to people until,
0:20:18 so you wonder if it takes 20 years for the society
0:20:21 to get its hands around the opioid industry,
0:20:22 how long is it gonna take it
0:20:24 to get its hands around the gambling industry?
0:20:27 So, yes, I agree with you.
0:20:29 It’s like, how on earth did we let this happen?
0:20:31 But it’s of a piece with other things
0:20:33 that we have let happen.
0:20:34 – I mean, when I think about it,
0:20:36 it’s not only, my fear isn’t only about gambling addiction,
0:20:40 but when you put kind of an on-demand Dopa bag
0:20:41 in young people’s pockets,
0:20:44 just as they’re kind of hardwiring their brain
0:20:47 and learning about life and reward,
0:20:49 that we’re just setting them up
0:20:52 to be just fucking Dopa monsters.
0:20:54 And if they can’t get it from gambling
0:20:55 ’cause they run out of money,
0:20:57 they’re gonna find it somewhere else.
0:20:59 Have you seen any of my thesis
0:21:01 is we are literally unleashing into the economy,
0:21:06 into the world, millions of Dopa monsters
0:21:10 that will are just gonna find whatever way they can,
0:21:14 opiates, sex, porn, online shopping.
0:21:17 They’re just gonna be so hungry for that rush
0:21:20 because their brains will have been wired
0:21:21 to expect that rush.
0:21:24 So it’s gonna have all sorts of ramifications
0:21:25 outside of gambling.
0:21:27 Am I catastrophizing here?
0:21:30 I mean, it doesn’t sound unreasonable to me.
0:21:34 My first thought when you started down that little path
0:21:38 was it’s interesting that sports used to be a place
0:21:40 where you learned the slow rewards
0:21:43 that come from hard– – The lay gratification, yeah.
0:21:45 – Yeah, you learned the opposite thing.
0:21:47 And that we’re turning that this mechanism
0:21:50 that used to take young men
0:21:53 and teach them a certain lesson.
0:21:56 Are you taking it to teach a different lesson?
0:21:58 So it was disturbing enough to me
0:22:02 that my youngest is a 17 year old son.
0:22:04 Like I gave him some money and adult supervision
0:22:08 so he could learn how to navigate this world
0:22:13 because it does feel like not only are we creating a world
0:22:16 of, you know, dopamine addicts,
0:22:20 but the signal you send especially to young men
0:22:22 ’cause they’re so susceptible to this
0:22:24 is the world actually doesn’t give a shit about you.
0:22:27 That it’s out to get you.
0:22:30 When I got into this, when I started working on the story,
0:22:34 what motivated me was the book I wrote about,
0:22:38 stuff I’d learned on the book I’d written about the pandemic.
0:22:40 I got interested in it because the US response
0:22:41 in the beginning was just so appalling.
0:22:44 We had like 20% of the world’s deaths
0:22:47 with 4% of the world’s population in the first six months.
0:22:51 And I learned in the process that this was,
0:22:54 that in the few years leading up to the pandemic,
0:22:58 we’d had experienced a decline of life expectancy
0:22:59 in three straight years.
0:23:01 And that had not happened since 1918.
0:23:03 And I thought, well, the pandemic’s happening
0:23:04 in the context of a society
0:23:07 that’s already not taking care of its people.
0:23:10 That some basic failure is occurring.
0:23:13 And this feels like part of that.
0:23:16 That it’s like, it’s a public health problem.
0:23:19 And that it’s not that hard,
0:23:23 even if you can’t do anything about legalizing sports gambling,
0:23:27 it’s not that hard to do some things to blunt its effects.
0:23:28 So here’s my solution.
0:23:31 I’m trying to work within the constraints of the society.
0:23:34 I don’t think actually me going off about
0:23:38 how diabolical it all is, is gonna help anything.
0:23:41 They’re doing something that I think is kind of interesting,
0:23:44 the company, the sports gambling companies.
0:23:46 They are, ’cause they’re so good
0:23:48 at chucking out of their businesses
0:23:50 anybody who knows what they’re doing.
0:23:53 They’re isolating people who don’t know what they’re doing.
0:23:58 So by definition, if you have an account in good standing
0:23:59 at FanDuel and DraftKings
0:24:01 and you’re doing a lot of sports betting,
0:24:02 you have signals of the world,
0:24:04 you don’t know what you’re doing.
0:24:07 I think that if we get that message out
0:24:09 and that if you say like,
0:24:11 if you’re looking for someone to manage your money,
0:24:12 the first question you should ask them is,
0:24:14 do they have account in good standing at FanDuel and DraftKings?
0:24:17 If they do, you should never give them your money to manage.
0:24:22 Like that if you make it a point of shame
0:24:25 that you’re in good with the industry,
0:24:28 that you might stigmatize it in a way
0:24:30 that makes it less dangerous.
0:24:32 We’ll be right back.
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0:27:46 (upbeat music)
0:27:51 – Your book Going Infant,
0:27:53 you fell under some of what I call the same
0:27:56 texture of criticism as Walter Isaacson’s biography
0:27:57 on Elon Musk and that of us.
0:28:00 You were kind of seen loosely as having a front row seat,
0:28:02 but not seeing what was going on.
0:28:04 – Do you think that’s a fair criticism?
0:28:07 – I didn’t write it until after it all collapsed.
0:28:09 When I sat down to write the first words,
0:28:13 there wasn’t much I didn’t know had happened.
0:28:14 I mean, very little happened, came out in the trial
0:28:17 that wasn’t already kind of known.
0:28:22 But it is true that I was there a fly on the wall
0:28:28 from kind of end of 2021 through the collapse of in November
0:28:32 of 2022.
0:28:35 And if you had said he has the money,
0:28:37 the customer’s money in Alameda,
0:28:39 I would have said you’re insane.
0:28:42 There’s no way that would be so dumb.
0:28:45 So I did poke everybody did this.
0:28:48 Everybody who saw the structure of the business,
0:28:50 he’s got his own private hedge fund on the side,
0:28:54 our trading firm on the side of it in exchange.
0:28:56 And he owns them both.
0:29:00 I did ask lots of questions about conflicts of interest,
0:29:01 but what I imagined would be the problem
0:29:03 wasn’t the problem.
0:29:05 I imagine the problem was that his trading firm
0:29:09 would have the same sort of privileged access
0:29:12 to the exchange that high frequency traders get
0:29:13 on the New York Stock Exchange
0:29:16 and privileged access to data and so on.
0:29:18 So front running, whatever.
0:29:20 And that wasn’t the case.
0:29:22 I did not see that like,
0:29:25 oh, yeah, the money’s in the wrong place.
0:29:26 So that’s true.
0:29:31 Did I, in retrospect, think I should have seen it?
0:29:33 Not really, no one else saw it either.
0:29:36 You know, there wasn’t the interesting thing.
0:29:38 There are many interesting things about the story,
0:29:42 but one interesting thing is, yeah, a lot of people said,
0:29:44 I wonder if they’re shady like FTX,
0:29:47 but that’s the in crypto, that’s easy.
0:29:51 Like as a heuristic, if you’re a successful crypto business,
0:29:53 you’re, you know, you’re largely unregulated
0:29:55 and you’re 26 years old
0:29:57 and no one’s paying that much attention.
0:30:00 The specific criticism,
0:30:03 oh, he’s got the customer’s money in his hedge fund.
0:30:06 No one said, zero people said.
0:30:08 So not even any ad, whatever,
0:30:12 a hundred and something professional investors
0:30:14 who owned a piece of them and they didn’t say it.
0:30:15 So I don’t know.
0:30:16 I don’t know.
0:30:17 That would have been very hard.
0:30:20 I don’t know how you would have detected that.
0:30:21 – Well, I have a couple of follow up questions there.
0:30:23 So when I’m sort of, follow the story a little bit
0:30:27 from an adjacent, I actually bought claims against it.
0:30:28 – I know this.
0:30:29 You bought the claims.
0:30:31 – And if I could have, I would have.
0:30:32 – Oh really?
0:30:34 – Oh my God.
0:30:35 I mean, it just seemed pretty obvious
0:30:37 that they weren’t worth 10 cents on the dollar.
0:30:38 – Well, I wasn’t that smart.
0:30:40 I bought them for 23 cents,
0:30:42 but because it’s better to be lucky than good
0:30:43 because of the surge in crypto.
0:30:45 They’re now probably your,
0:30:47 the payouts can be somewhere between 120 cents
0:30:48 on the dollar, 150 cents.
0:30:51 And other than, other than patting myself on the back
0:30:53 for one of the few good investment decisions
0:30:54 I’ve made in the last year,
0:30:56 if everyone gets their money back.
0:30:57 Now granted, he committed fraud.
0:31:00 He, he took customer accounts from people
0:31:02 who thought they were investing, you know,
0:31:04 putting their money in a deposit, not even investing.
0:31:06 And then he used it to take risks
0:31:08 they had not signed up for.
0:31:10 So that’s illegal.
0:31:13 But one, given that everyone’s given their money back, given,
0:31:15 I don’t understand the difference between
0:31:16 what Sam Bankman Freed did
0:31:18 and what John Corzine did at MF Global,
0:31:19 I think it was called.
0:31:20 (laughing)
0:31:23 – You’re taxing my memory there, but yeah.
0:31:24 – You remember that?
0:31:25 – Yeah, yeah, do remember.
0:31:25 – Did the same thing.
0:31:26 – Can I back you up a sec?
0:31:27 I really wanted to ask you about this.
0:31:32 I was, I took a keen interest in the market
0:31:38 in claims on FTX because it seemed really clear to me
0:31:41 that what the bankruptcy people were saying are signaling
0:31:44 that it’s like, it’s this dumpster fire
0:31:45 and there’s nothing there.
0:31:48 And boy, just be incinerated all this money.
0:31:50 That that wasn’t true.
0:31:53 And it was amazing to me how cheaply these things
0:31:54 traded at first.
0:31:59 How did you even think to buy claims?
0:32:02 – I’m fascinated by,
0:32:04 I’ve invested across every asset class,
0:32:06 from angel to venture to growth to public,
0:32:09 and by far the best asset class is distressed,
0:32:10 because similar to biology,
0:32:12 people don’t want to hang around old people.
0:32:14 So the best businesses are businesses
0:32:15 dealing with old people.
0:32:18 And the best asset class is distressed.
0:32:19 So I look at bankruptcy filings.
0:32:20 And I was fascinated by this.
0:32:22 I got the bankruptcy filing from the court.
0:32:23 I read through it.
0:32:27 And in the bankruptcy claim, it listed all their assets,
0:32:29 cash, some Bitcoin, et cetera.
0:32:31 And one of the assets that just popped out to me
0:32:35 is they had invested $500 million in Anthropic.
0:32:38 Anthropic is the number two AI company, LLM.
0:32:40 And I couldn’t find for the life of me
0:32:43 what the valuation was that they invested at,
0:32:45 but I figured it was somewhere between three and five billion.
0:32:48 So I took the most conservative which meant,
0:32:50 number which meant that one of the things
0:32:53 that FTX, the bankruptcy FTX had
0:32:56 that would ultimately be distributed to the claimants
0:33:00 was 10% I assumed of Anthropic.
0:33:05 I valued Anthropic at approximately 40 billion.
0:33:08 So I thought the stake is worth four billion.
0:33:10 Claimants, total claimants nine billion.
0:33:12 So just the stake in Anthropic,
0:33:15 I valued at 44 cents on the dollar.
0:33:17 Claims were selling for 22 cents.
0:33:20 To me, this was the easiest trade I’ve ever met.
0:33:24 And why do you think other people didn’t make that trade?
0:33:25 – Occasionally you find something,
0:33:27 I don’t know, this doesn’t happen to be very long.
0:33:29 I’m like, oh my God, they’ve missed it.
0:33:32 And that is people didn’t see the $500 million number.
0:33:33 They could see the $500 million.
0:33:37 What they couldn’t see was the numerator or the denominator.
0:33:40 And that was the valuation they invested at.
0:33:43 And I thought, there’s no way they don’t own
0:33:45 at least 10% of this thing.
0:33:47 And then you have to value another unknown.
0:33:49 And that is, what is that 10% now?
0:33:52 But I thought it’s worth probably 40 cents,
0:33:53 a minimum of 23 cents.
0:33:56 So all the crypto, all the cash,
0:33:59 everything else was just gonna be gravy.
0:34:01 – To my bewilderment, people weren’t paying attention.
0:34:03 And there was, I mean, what he did,
0:34:05 he didn’t take whatever it was,
0:34:07 $11 billion of customer assets
0:34:11 and spend it on blow and hookers and private jets.
0:34:16 He put five billion of it into venture capital investments.
0:34:17 And this was just one of them.
0:34:19 And yet there was this pile of stuff.
0:34:23 And I keep waiting for some to come and ask the question,
0:34:27 how good of VC was Sam Bankman Freed?
0:34:30 He was doing it, like how well did he perform
0:34:32 compared to his peer group?
0:34:35 Because it wasn’t, he has a piece of,
0:34:36 you may not even know this.
0:34:38 He has a piece of SpaceX in there.
0:34:39 He has it through Michael Keevis.
0:34:40 But so you don’t see it.
0:34:44 But he’s got pieces of some really valuable stuff.
0:34:47 Even if crypto goes to zero
0:34:51 and nevermind all the crypto businesses he bought.
0:34:53 So one last question on this,
0:34:57 ’cause I’m curious ’cause I haven’t,
0:34:58 ’cause I knew you made this trade.
0:35:00 Someone told me about you being in the market
0:35:03 and I thought, well, that’s kind of cool.
0:35:07 Did you worry at all that the bankruptcy process itself
0:35:10 was gonna incinerate your profits?
0:35:13 That it would be so expensive
0:35:15 that you wouldn’t end up seeing,
0:35:16 you should have seen the money,
0:35:18 but in the end it would go in the pockets
0:35:20 of Solomon Cromwell lawyers.
0:35:21 – That’s a great question.
0:35:23 But part of the analysis I did
0:35:24 when I put together the spreadsheet was
0:35:26 it’s the same administrator that handled Amron
0:35:30 and I estimated the cost at about a billion dollars.
0:35:33 And I thought, okay, if just the anthropic stake
0:35:36 is worth four billion, the coins are worth three.
0:35:38 I saw 70 cents on the dollar
0:35:42 and then take out a billion, so 60 cents on the dollar.
0:35:44 And then what it ends up, it looks like the payout.
0:35:45 And a lot of the stakes we’re talking about
0:35:47 have already been sold, but it looks to me
0:35:50 what they’re saying, the court administrator’s saying
0:35:51 that they now think they’re gonna get somewhere
0:35:54 between 120 and 160 cents on the dollar.
0:35:57 A lot of that because crypto has surged.
0:36:00 But the lesson I take away from all of this,
0:36:02 and this is a larger lesson about investing in life,
0:36:04 is the greatest return on invested capital
0:36:07 is inversely correlated to how sexy something is.
0:36:10 This isn’t true of sports, which you know better than me
0:36:11 because there’s no shortage of billionaires
0:36:14 of midlife crises and it’s a regulated monopoly
0:36:15 to control supply.
0:36:17 But generally speaking, outside of sports,
0:36:20 the best asset classes are the least sexy.
0:36:23 And this was a really unsexy investment.
0:36:26 Everybody thought this thing, it had fraud,
0:36:28 it had crypto, which was out of vogue.
0:36:29 This thing was supposedly going to zero.
0:36:34 And any reasonable diligence said, no, this is all upside.
0:36:36 – We did, I didn’t really answer your question
0:36:38 about what was different from between
0:36:40 what he did and what John Corazon did.
0:36:44 And you’ve taxed my memory about what John Corazon did.
0:36:45 But I do think, what do I think?
0:36:49 I think that there’s a kind of misapprehension
0:36:54 in the general tenor of the response to Sam Bankman Freed,
0:36:59 that people still talk about it as if what he did
0:37:04 was intentionally set up a business to steal customer money,
0:37:05 stole the customer money
0:37:07 and the customers don’t have any money now.
0:37:11 And what he actually did was set up a business that was,
0:37:14 I mean, it was jankily set up in the first place,
0:37:18 but it was clearly not start, didn’t start as a fraud,
0:37:21 was in and of itself a successful business
0:37:23 if he’d just not done the idiot things
0:37:25 he’d done with his hedge fund.
0:37:30 And then got himself in a pickle in June of 2022,
0:37:34 when crypto lenders asked for the $10 billion,
0:37:35 they’d lend him back.
0:37:37 And instead of just telling them, I don’t have it,
0:37:39 I put it in VC investments,
0:37:41 use the customer money to fill the hole.
0:37:44 And that was a really stupid thing to do.
0:37:49 It is fraud, but it’s different than like evil person
0:37:51 sets out to do evil.
0:37:53 So how I feel about it, I feel sad about it mainly.
0:37:57 And I think that what is like the vice,
0:37:59 the character flaw, if you will,
0:38:03 or the pattern, it’s more of the pattern in his character
0:38:05 that leads to this behavior,
0:38:09 that was visible in every other aspect of his life.
0:38:13 And it was a pattern of foisting risk
0:38:15 upon other people without their permission.
0:38:17 And he did it over and over.
0:38:18 He did it in his romantic life.
0:38:20 He did it in his friendships.
0:38:23 And he comes by this vice, honestly,
0:38:25 I think he himself is sort of numb to risk
0:38:27 and kind of thinks he’s right all the time anyway.
0:38:31 So he didn’t actually probably completely grok
0:38:34 the risk that he was foisting on others.
0:38:36 I thought this is all gonna work out.
0:38:39 That was stupid and a crime,
0:38:42 but I can understand how he got there.
0:38:46 And I do have a problem with 25 years in jail.
0:38:49 I think like, okay, jail, that makes some sense.
0:38:53 But like, I don’t know how you even measure these things,
0:38:55 but it’s like–
0:38:58 – 25 years for a guy like that is almost a death sentence.
0:38:59 – Yeah, so I just don’t,
0:39:02 I think that’s excessive and I don’t get it,
0:39:04 but people will argue with me.
0:39:06 – But I wanna put forward a thesis
0:39:07 ’cause you’re a storyteller
0:39:10 and just love the way you think through stuff.
0:39:13 I would argue, and I want you to respond to the thesis,
0:39:15 that the difference between playing golf at Centennial
0:39:17 and going to Wimbledon, which I imagine I would be doing
0:39:19 if I were John Corazon right now,
0:39:23 I don’t see a lot of difference in the criminal behavior here.
0:39:26 The difference is brand management.
0:39:28 And that is, what you have with Sam Bankman Freed
0:39:31 is a guy who had this kind of floppy,
0:39:33 guy just rolled out a bad crypto thing.
0:39:36 He purposely set up this organization, The Bahamas,
0:39:38 which felt sketchy.
0:39:42 He was sleeping with and doing drugs with his coworkers.
0:39:46 He decided to go on the most ridiculously ill-advised
0:39:49 apology tour, which entirely backfired,
0:39:52 whereas Corazon listened to very smart people
0:39:54 who said, “Shut the fuck up.
0:39:57 “Nobody speaks to anybody but your lawyers.
0:40:00 “Go quiet, act like the victim.
0:40:01 “You didn’t know what was going on.
0:40:02 “Act contrite.
0:40:04 “You were terrible fiduciary.
0:40:05 “You had no idea.”
0:40:09 As opposed to going and speaking to Andrew Ross Sorkin
0:40:14 in cargo shorts, the difference between Corazon,
0:40:17 again, going to Wimbledon and Bankman Freed
0:40:19 with a live sentence, is poor communications
0:40:22 and brand strategy, your thoughts.
0:40:26 – Well, you’re absolutely right that the way he handled it
0:40:29 from the minute it all fell apart was catastrophic.
0:40:34 You gotta remind me what John Corazon actually did,
0:40:36 ’cause I don’t remember.
0:40:39 – MF Global, customer deposits that ends up
0:40:41 were being used to make speculative investments
0:40:42 in the market.
0:40:44 John Corazon, my understanding is,
0:40:47 side interest rates were gonna head one way,
0:40:49 and he claims he didn’t know these deposits
0:40:50 were being commingled.
0:40:52 It was pretty much the exact same crime.
0:40:55 And Corazon got banned from the industry
0:40:57 or paid a fee.
0:40:59 MF Global, I think, went away,
0:41:01 but these things, you know, tomato, tomato,
0:41:04 as far as I can tell, and one guy’s got a live sentence,
0:41:05 and the others are Wimbledon.
0:41:07 I don’t even know if he watches tennis,
0:41:10 but to me, it speaks to the notion of public perception.
0:41:15 – It also speaks to the moment that there’s a frustration
0:41:18 with the ability to get our hands around the necks
0:41:20 of rich people who do bad things.
0:41:22 And when you get a live one now,
0:41:27 the sort of the speed with which the justice system
0:41:30 leaps into action is incredible.
0:41:33 Sam was really easy to prosecute.
0:41:34 You know, he was just like–
0:41:36 – You gave him everything.
0:41:36 – He gave him everything.
0:41:38 So this is, so think about this.
0:41:40 I always stopped myself just short of thinking
0:41:44 he has a death wish because his behavior
0:41:46 kind of suggests it.
0:41:49 And he, even when things were good,
0:41:53 he was always extremely vulnerable,
0:41:56 like no bodyguards, no, you know,
0:41:58 you could sneak into his office any hour of the day.
0:42:00 You could, he really was,
0:42:04 he has a sense that like he doesn’t protect himself
0:42:06 almost willfully.
0:42:08 And so that just extended into what happened
0:42:10 in the legal process.
0:42:12 – So Michael, I love this.
0:42:15 And your fascinating story told us a couple of questions
0:42:16 to wrap up here.
0:42:18 I find one of the most fascinating characters
0:42:21 in all of this was, is it Carolyn Ellison?
0:42:22 Caroline Ellison?
0:42:23 – Carolyn Ellison.
0:42:25 – Any inside, a lot of people didn’t think,
0:42:27 she ended up being what I might describe her.
0:42:29 I think the Southern District called her
0:42:32 the ultimate perfect example,
0:42:34 quintessential government witness,
0:42:35 but they put her in prison.
0:42:37 We know a little bit about Sam.
0:42:38 We know almost nothing about her.
0:42:40 What were your impressions?
0:42:43 Or what was, can you provide us some texture on Ellison?
0:42:47 – She was a math kid who thought of herself.
0:42:48 I think she’s kind of,
0:42:49 there was a bit of a split personality thing
0:42:51 going on with her.
0:42:55 She had a lust for a stable and normal life.
0:42:56 And at the same time thought of herself
0:42:59 as someone who would do radical and crazy things.
0:43:04 And was, she in college joined the Effective Altruist Movement
0:43:07 and seemed to be kind of all in on that.
0:43:11 And I tell you, she was very susceptible
0:43:13 to the charms of Sam Bankman Freed.
0:43:15 Here’s the texture for you.
0:43:17 She told a colleague, this didn’t even make the book,
0:43:22 but she told a colleague that even after
0:43:25 she and Sam had broke off their relationship,
0:43:27 it was worth her having sex with Sam
0:43:30 because it made Sam more efficient.
0:43:32 And making Sam more efficient was the best thing
0:43:34 she could do for mankind.
0:43:36 Because Sam was the person who most likely
0:43:37 to save humanity.
0:43:41 So that gives you an idea of how she is.
0:43:43 – I’m gonna try that on a bar.
0:43:44 Just this, you know this too.
0:43:48 The world will be a better place if I’m more relaxed tonight.
0:43:52 So this will be the last question, I promise.
0:43:57 You have, I look at, I mean, granted, you know,
0:43:58 my idols are different to most people’s,
0:44:01 but I look at you and I think, I wanna be this guy.
0:44:03 You’re just doing cool shit, telling great stories,
0:44:06 writing interesting books, going to movie premieres.
0:44:08 I think you make an exceptional living.
0:44:11 But by all, at least from an exterior perspective,
0:44:13 you’re in a great seat.
0:44:16 We have a lot of young men and women who listen to this podcast.
0:44:19 Can you give us any one or two pieces of advice
0:44:21 for someone who looks at you and thinks, you know,
0:44:23 I’d like to be in that seat.
0:44:26 Were there any things that you wish you’d done more of
0:44:29 or less of, what advice would you have to your younger self?
0:44:32 – Well, first off, I never thought that way
0:44:34 about what seat I wanted to be in.
0:44:36 I never thought I wanna be that person.
0:44:38 I always just wanted to be me.
0:44:40 It’s like the best me.
0:44:45 And there were things that made me feel the best me.
0:44:48 And writing was one of them.
0:44:49 Writing was the big one.
0:44:51 And I just thought, I’ve gotta do this.
0:44:54 So not trying to be someone else
0:44:57 would be one of the first things I would say.
0:45:01 Another thing that led me to like lots of the good things
0:45:04 that have happened in my life, it’s related.
0:45:07 It’s like not paying attention to what you’re supposed
0:45:08 to be paying attention to.
0:45:11 Like what everybody else is paying attention to.
0:45:13 If everybody else is paying attention to it,
0:45:15 it doesn’t need your attention kind of thing.
0:45:18 What needs your attention is the thing that you’re interested
0:45:20 in that no one’s paying attention to.
0:45:22 And no one encourages you to pay attention to.
0:45:24 Like your FTX investment.
0:45:27 It’s like, oh, there’s something here
0:45:29 and I really care about it.
0:45:32 And if you can find that and nobody else is there,
0:45:34 that seems like a lonely place,
0:45:36 but it’s the golden place.
0:45:39 And you gotta like lean into that rather than lean out of it.
0:45:42 Like learn to recognize that moment where God,
0:45:44 I love doing this thing.
0:45:46 No one is saying I should be doing this thing.
0:45:49 No one else is doing this thing.
0:45:49 But I love it.
0:45:51 Go with it.
0:45:52 Go with that feeling.
0:45:53 It’s great for an investor.
0:45:55 It’s great for a writer.
0:45:57 But I think it’s great beyond that.
0:45:59 It’s sort of like you’re arbitraging
0:46:01 your personality against the world.
0:46:05 That you are finding where you are special
0:46:07 in the level of interest you have in something.
0:46:10 And that’s when I find my subject matters
0:46:11 are the most exciting to me.
0:46:13 When nobody, the thing that troubled me most
0:46:15 about Sam Beckman Friede as a subject
0:46:17 is I was genuinely interested in him
0:46:18 right from the moment I met him,
0:46:21 but it worried me that so many other people were.
0:46:23 And the only thing that kept me going
0:46:26 was that I had this privileged view of it.
0:46:28 But what I really like with the subject
0:46:29 is like the Oakland A’s,
0:46:31 where nobody gives a shit about them,
0:46:33 but I see there’s something great there.
0:46:37 And that’s the stuff.
0:46:39 It’s like, that’s when you know you’re in the right place.
0:46:41 It’s like, you’re there for some genuine reasons
0:46:44 ’cause there’s no in genuine reasons to be there.
0:46:45 – Arbitraging your personality
0:46:47 against the rest of the world, I love that.
0:46:51 Michael Lewis is the host of the podcast Against the Rules.
0:46:53 He’s also a New York Times bestselling author
0:46:56 of several books, including The Fifth Risk, Flash Boys,
0:46:57 and The Big Short.
0:47:00 In addition, some of these have been made into great movies,
0:47:03 The Big Short, Money Ball, and The Blind Side,
0:47:05 all nominated for Academy Awards,
0:47:07 grew up in New Orleans and remains deeply interested
0:47:08 and evolved in the city,
0:47:10 but now lives in Berkeley, California,
0:47:12 Alma Mater, Go Bears,
0:47:15 with his wife, Tabitha Soren, and their children.
0:47:17 If I could give my kids any skill, Michael,
0:47:18 it would be your skill.
0:47:21 And that is, you are a fantastic storyteller.
0:47:22 Really appreciate your time.
0:47:24 – Thanks for having me, Scott.
0:47:37 – I’ll derivative happiness, say yes.
0:47:39 I went shooting this weekend.
0:47:41 And when I say shooting, I mean,
0:47:42 out to the British countryside,
0:47:45 where you dress up in this kind of guy-richie-like gear,
0:47:48 stayed in an old kind of interesting castle.
0:47:51 And then in the morning, a bunch of Brits took us out
0:47:53 and seemed like a lot of ’em and a lot of dogs
0:47:55 and we murdered birds.
0:47:57 This is not something I’m into.
0:47:58 Let me be clear.
0:48:00 When someone described this to me,
0:48:03 it sounded like Chinese water torture.
0:48:04 But here’s the thing.
0:48:06 I have some friends in my life that I really like
0:48:08 and are wonderful, interesting people,
0:48:10 and they love it, and they love it.
0:48:12 And you could just tell they wanted to share the experience.
0:48:14 So I said yes.
0:48:16 And when I had to get up at ODAR 100 hours
0:48:18 to put on wellies or whatever they’re called
0:48:20 and then figure out a way to go like fire a rifle,
0:48:22 which I have no desire to do, and animals.
0:48:26 Anyways, my point is that these experiences
0:48:27 really bond you to people.
0:48:28 I know these are good friends,
0:48:30 but we feel even closer to them now
0:48:32 because we got to share in something
0:48:34 that they’re really passionate about.
0:48:38 On the flip side of that, it’s something I didn’t do,
0:48:39 something I was bad at.
0:48:41 I really never developed any hobbies in my 30s and 40s.
0:48:44 I like movies, I like drinking, I like travel.
0:48:45 That’s pretty easy to say.
0:48:49 But I never really developed a passion for anything.
0:48:50 And the thing about being around people
0:48:51 that are passionate about something,
0:48:54 even if it’s kind of Old World Britain and these shoots,
0:48:56 it’s intoxicating.
0:48:59 Just sharing it with them and seeing how into it they were,
0:49:02 the majesty, the detail, the clothes,
0:49:05 the technology, the history.
0:49:08 Say yes, and if you find something you like,
0:49:09 then love it and lean into it.
0:49:11 ‘Cause at some point, you’re gonna get the chance
0:49:13 to share it with people who have no interest in it,
0:49:15 but they’ll be interested in it
0:49:16 because they’re interested in you
0:49:18 and your passion will shine through.
0:49:20 (upbeat music)
0:49:22 This episode was produced by Jennifer Sanchez
0:49:23 and Caroline Shagren.
0:49:25 Jew Burroughs is our technical director.
0:49:26 Thank you for listening to the Prop G Pod
0:49:28 from the Box Media Podcast Network.
0:49:31 We will catch you on Saturday for No Mercy, No Malice,
0:49:33 as read by George Hahn.
0:49:35 And please follow our Prop G Markets Pod
0:49:37 wherever you get your pods for new episodes
0:49:39 coming Monday and Thursday.
0:49:42 (upbeat music)
0:49:47 – Amazon Q Business is the generative AI assistant from AWS
0:49:50 because business can be slow, like wading through the mud.
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0:49:59 can be done in no time.
0:50:02 Learn what Amazon Q Business can do for you
0:50:05 at aws.com/learnmore.
0:50:09 That’s aws.com/learnmore.
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0:50:45 (upbeat music)

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0:00:50 For the restaurant operators out there who want to create more regulars on the regular,
0:00:52 check out Seven Rooms.
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0:01:59 Welcome to The Proficy Pod’s Office Hours.
0:02:01 This is the part of the show where we answer questions
0:02:04 about business, big tech, entrepreneurship, and whatever else is on your mind.
0:02:06 If you’d like to submit a question, please email a voice recording
0:02:08 to officehours@proficymedia.com.
0:02:12 Again, that’s officehours@proficymedia.com.
0:02:14 So with that, first question. I have not seen these questions.
0:02:17 Hey Scott, Jesse from Pennsylvania here.
0:02:20 A longtime listener, and I love all that you and the team do.
0:02:24 I’m a young-ish geology professor at a large, well-known state university,
0:02:27 so your thoughts on higher education really resonate with me.
0:02:30 I have two questions related to the future of podcasts.
0:02:34 I help run a niche podcast that has a small but vibrant listener base.
0:02:36 We have not monetized our podcast yet,
0:02:39 but are in a position where we probably could generate a little bit of money from it.
0:02:44 So far, it remains an outreach and educational project that we do ourselves.
0:02:48 We’ve tried a bunch of little tests, including making our own audio textbooks
0:02:52 on our standalone app with some success, but nothing to get too excited about.
0:02:54 You have painted a really bright future for podcasts,
0:02:55 especially in the recent months.
0:02:58 So my first question is, how do you think this inflow of money will come in?
0:03:00 Will it be a winner-take-all situation,
0:03:03 or more of a rising tide-floats-all podcast situation?
0:03:08 Second, what would be your advice to people who run smaller podcasts focused on niche topics?
0:03:10 How do we position ourselves to not miss the boat?
0:03:14 For reference, we have about 10,000 subscribers across all channels,
0:03:17 and our episodes each get several thousand listens in the first few weeks.
0:03:20 We’d love to hear your thoughts and keep up the great work.
0:03:23 Thanks for the thoughtful question, Jesse.
0:03:26 And you have kind of what is probably the core confidence of podcasting,
0:03:28 as you have a very handsome voice.
0:03:30 Okay, podcasting.
0:03:34 So once an industry is digitized, when everyone has access to everything seamlessly,
0:03:39 quality not only wins, it soaks up all of the cookie.
0:03:43 And that is, you digitize retail and 50% ends up with one e-commerce company, Amazon.
0:03:47 You digitize information and you get 93% share to search.
0:03:49 You digitize photo sharing, whatever it might be.
0:03:53 And you have one company with two-thirds market share of all social and that’s Meta.
0:03:56 The same thing has happened in podcasting, and that is,
0:03:59 everyone has access to everything on Spotify or on Apple Music.
0:04:04 And as a result, this medium is growing like crazy.
0:04:10 According to podcast industry insights, there are 450,000 active shows releasing episodes regularly,
0:04:15 but the top 25 podcasts alone reach nearly half of US weekly listeners.
0:04:21 Think about this, 50% share of the 25 top podcasts in a pool of 450,000.
0:04:23 Jesus, talk about inequality.
0:04:26 If you break into the, you know, if you get into the NBA, it’s a great living.
0:04:30 But unfortunately, about 99.9% don’t.
0:04:31 It is very difficult.
0:04:33 I started seven years ago.
0:04:36 Pivot does about seven or eight million a year.
0:04:37 It’ll do 10 this year.
0:04:38 By the way, I talk about money.
0:04:42 I think it’s an attempt to keep poor people down when people are making a lot of money,
0:04:42 you know, talk about money.
0:04:43 I want people to understand business.
0:04:46 I want them to understand exactly what’s going on.
0:04:48 Prop G does less.
0:04:50 Prop G does around five or six million, but it’s growing faster.
0:04:51 It’s growing 40% a year.
0:04:53 Those are not big businesses.
0:04:57 Raging moderates will probably do, I don’t know, we’ll see.
0:05:00 It’ll probably do one to two million next year as we get going, get our feet under us.
0:05:05 These are small businesses, except they’re ridiculously fucking profitable
0:05:06 once you get to a certain point.
0:05:11 This podcast has a producer and associate producer, a tech person and a sound engineer.
0:05:13 And we have some analysts supporting some of the data.
0:05:17 But okay, what are those costs, right?
0:05:18 Half a million to a million bucks a year.
0:05:22 If you have really talented young people who you overpay, see above, profiting media.
0:05:26 But this is, you know, once you get to a half a million or a million in revenue,
0:05:27 it’s all gross margin.
0:05:28 It’s all profit.
0:05:31 So these things can be massively profitable once you get to a certain point.
0:05:35 As it relates to you, as it relates to you advice,
0:05:39 the specific crowds out there general, you want to go very niche, very niche, right?
0:05:41 You want to own something, absolutely own it.
0:05:45 Two, you want to Mr. Beast it every week.
0:05:49 What could we do with the sound, sound effects, production, editing?
0:05:50 I think less is more.
0:05:52 I’m always a fan of cutting more.
0:05:54 Who could we bring in?
0:05:56 What better guests could we find?
0:06:00 And then the kind of next generation of podcasting is probably the reshuffling.
0:06:02 There’s going to be a reshuffling of the deck, if you will.
0:06:06 Podcasting was initially kind of some semi-famous people who did interviews.
0:06:10 And then it went to people who are more talented, bringing different content and information.
0:06:13 In the interview format, I think it’s declining a little bit.
0:06:19 Then there was a big trend around really highly produced podcasts, serial and crime podcasts.
0:06:22 The problem with those is they’re expensive to produce.
0:06:26 I think the next kind of generation or the next reshuffling of the podcast stack
0:06:30 is going to happen because of the following trend, YouTube.
0:06:34 And that is, if you don’t get as many views on YouTube as you get downloads,
0:06:36 you’re no longer going to be a top 100 podcaster.
0:06:40 The new distribution medium for podcasts isn’t Spotify or Apple.
0:06:41 It’s actually YouTube.
0:06:46 And now people are spending or more people are watching podcasts on YouTube
0:06:47 than they are listening to them.
0:06:49 So you need to up your video game.
0:06:52 This is hard for me because the thing I love most about podcasts is my studio.
0:06:54 It basically looks like a giant shaving kit.
0:06:55 And I take it everywhere in the world.
0:06:57 No matter where I am, I can do my podcast.
0:07:00 And that’s a huge unlock for me because daddy likes to travel.
0:07:05 So I’m in Sao Paulo, Cabo San Lucas, Las Vegas LA, then Las Vegas again in the last
0:07:06 two and a half weeks.
0:07:06 And guess what?
0:07:09 No interruption in my podcasting.
0:07:12 And unfortunately, to take it to the next level,
0:07:16 I probably need to put more resources into video and a static studio space.
0:07:20 I don’t know if you’re watching this right now, but I’m in my guest bedroom because we’re moving.
0:07:22 And it’s not, well, what you call high production value.
0:07:23 I mean, Jesus Christ, look at this face.
0:07:25 I look like a fish that swam too close to a reactor.
0:07:26 Makeup!
0:07:28 Makeup!
0:07:31 Anyway, at your level of downloads, it’s going to be difficult to monetize.
0:07:34 You’ll sort of for a moment be tempted to have a B subscription.
0:07:35 Don’t do that.
0:07:38 I think subscription was a bad idea.
0:07:40 If you’re kind of like Sam Harris, and you’re just so fucking talented
0:07:42 that people pay a hundred bucks a year, fine.
0:07:46 But what’s interesting about podcasting is there’s very few places to find a young,
0:07:49 wealthy consumer if you’re an advertiser.
0:07:54 They’re all on Spotify and watching Netflix, which means they don’t, they don’t see ads.
0:07:58 So podcasting is one of the last places an advertiser can go to reach a young,
0:07:59 wealthy audience.
0:08:01 So the future is so bright for podcasting.
0:08:02 You got to wear shades.
0:08:05 Thank you for the question and good luck with your pod.
0:08:07 Question number two.
0:08:11 Hey, brother, really appreciate everything you do.
0:08:12 This is Derek from California.
0:08:17 And I would love to know your thoughts on Michael Burry’s skepticism on index investing.
0:08:17 Thanks so much.
0:08:20 This is super interesting.
0:08:21 And I’m not that informed here.
0:08:26 The big shorts Michael Burry has warned about this supposed bubble in passive investing.
0:08:28 His take, the recent flood of money into index funds,
0:08:33 feels a lot like pre-2008 craze around collateralized debt obligations, CDOs,
0:08:37 the complex financial instruments that nearly collapse the global economy.
0:08:42 So Michael told Bloomberg, like most bubbles, the longer it goes on,
0:08:43 the worse the crash will be.
0:08:48 Back in 2023, he made headlines by betting against the S&P 500 and the Nasdaq 100,
0:08:51 taking out more than one and a half billion input options.
0:08:54 He was wrong and paid the price according to his 13F filing.
0:08:57 Michael closed that massive short position at a 40% loss.
0:09:01 And while the one and a half billion was the face value of the bet,
0:09:04 not the actual amount he put in, it still shows how risky shorting can be.
0:09:07 Short investing is really difficult.
0:09:10 That’s this isn’t the question, but short investing is really difficult
0:09:12 because the natural trajectory of the medium and long term
0:09:16 of the markets is up and to the right because of demographic growth and innovation.
0:09:20 So I think Michael’s an interesting guy.
0:09:21 I think he’s thoughtful.
0:09:22 He’s kind of a perma bear.
0:09:26 He’s always betting on a catastrophe and occasionally be a right.
0:09:28 He’s a little bit like my colleague, Neera Rabini.
0:09:30 But I always learned when I listened to Neural.
0:09:34 But Neural is pretty much a pessimist and it’s kind of always warning of a crash.
0:09:35 And he was right in no way.
0:09:41 I personally believe that passive index investing is a really good strategy.
0:09:41 Why is that?
0:09:44 It’s easy to convince yourself you’re smarter than everyone else.
0:09:46 It’s harder to be smarter than everyone else.
0:09:48 And when everyone has access to all information,
0:09:52 you just want to bet on innovation and the American economy and that
0:09:56 the entire, you don’t need to find the needle in the haystack.
0:09:58 I think you’re better off buying the entire haystack.
0:10:02 And also the key that people don’t spend enough time thinking about
0:10:04 is absolutely minimize your fees.
0:10:06 Also, there’s a cost to stock picking.
0:10:10 And that is you have to pick the stock, which means it takes mental bandwidth,
0:10:15 which means you blame yourself when it works or you credit yourself
0:10:18 unnaturally when it does work and start believing you actually know how to do this,
0:10:19 which you probably don’t.
0:10:25 How to get wealthy slowly, but some sort of passive matching program to your employer,
0:10:28 the government that matches, there’s some of those programs here in the UK,
0:10:31 get it out of your hands, have it taken out of your check automatically,
0:10:35 max out any matching program you have to your employer through a government program,
0:10:38 and then put it into passive index funds.
0:10:43 Because if you’re Warren Buffett, fine, if you’re an amazing stock picker, fine,
0:10:45 99.9% of us aren’t.
0:10:49 And focus all of that additional energy you would spend trying to do analysis
0:10:52 and commit yourself that you understand that Starbucks is going to go up
0:10:54 and put it into your core job where you can make more money
0:10:58 and then continue to invest in dollar cost average into index funds.
0:11:03 So now the passive investing, people say, and I guess there’s some truth to the fact
0:11:07 that when anything becomes too popular, it’s usually not the right strategy.
0:11:11 I can see an era where there’s a great rotation out of the US,
0:11:14 which is now 50% of the value of all stocks globally.
0:11:16 It’s usually around a quarter to a third.
0:11:21 And we see a redistribution or reversal of the flows out of the US
0:11:23 into more emerging markets.
0:11:25 So for example, I’m looking at some stocks in Brazil.
0:11:29 See above can’t help but decide I’m a smarter stock picker than most people.
0:11:33 But I have at least 30 or 40 different investments
0:11:34 and I try to make them uncorrelated.
0:11:37 So to a certain extent, I have a bit of an index fund that I’ve created myself.
0:11:40 So I’m still a big fan of index investing.
0:11:45 I just think that’s the best, most bulletproof way to establish economic security.
0:11:47 Thanks for the question.
0:11:50 We have one quick break before our final question.
0:11:50 Stay with us.
0:11:56 Support for PropG comes from Mint Mobile.
0:11:58 Missing out on something big can really hurt.
0:12:01 Maybe your flight got canceled and you couldn’t make it to your friend’s wedding
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0:13:03 Support for PropG comes from Vanta.
0:13:07 If you’re a startup founder, finding product market fit is probably your number one priority.
0:13:11 But to land bigger customers, you also need security compliance.
0:13:17 And obtaining your SOC2 ISO 2701 certification can take a valuable time and energy,
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0:13:53 You can join over 8,000 companies, including many Y Combinator and Techstar startups who trust Vanta.
0:13:58 If you want to simplify compliance and get $1,000 off, you can visit vanta.com/propg.
0:14:09 Support for this show comes from Seven Rooms.
0:14:11 What’s the recipe for taking your restaurant to the next level?
0:14:15 Well, restaurant operators know a key part of it is making more money
0:14:17 and making sure it keeps coming in.
0:14:20 That’s why you want to bring Seven Rooms to the table.
0:14:24 Seven Rooms is an all-in-one CRM marketing and operations platform
0:14:28 that helps you make more money for your operation and more magic for your guests.
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0:15:03 Welcome back. Question number three.
0:15:06 Hey, Scott. It’s Connor from Raleigh, North Carolina.
0:15:10 I’m a 31-year-old lead software engineer at a cybersecurity company
0:15:12 and I’m reaching out for some life and career advice.
0:15:18 I work fully remote and although I love my company and was recently awarded
0:15:22 a quarterly performance award, I’ve been struggling with the isolation
0:15:24 that remote work has brought to my life.
0:15:29 Since COVID, I found myself spending nearly every day working from home,
0:15:32 often rolling out of bed just minutes before my first meeting.
0:15:36 This past fall, I attended a summit in Seattle
0:15:40 where I spent a week working from the office and it was a game changer.
0:15:44 The focus, structure, and energy of working in person
0:15:48 felt like a major boost to my productivity and overall happiness.
0:15:52 Since then, I’ve been seriously considering relocating to Seattle
0:15:56 to work in the office daily. I think it could be a great move for my career
0:15:59 and would help me regain the structure I feel like I’ve been missing.
0:16:03 My wife is fully on board with the idea. She’s lived all over the world
0:16:06 and grew up in Raleigh and I think that she would welcome a change in scenery.
0:16:10 And her job is fully remote and she enjoys working remotely,
0:16:12 so moving for her would be pretty seamless.
0:16:14 Here’s the challenge.
0:16:19 I have a three-year-old niece here in North Carolina, not far from me.
0:16:23 Who means the world to me? Her dad is my twin brother
0:16:26 and he’s been through a long and difficult battle with addiction,
0:16:31 but is now in recovery. How do I balance my desire to work in the office
0:16:35 and possibly accelerate my career with my desire to stay close with family
0:16:38 and be a consistent president for my niece?
0:16:43 Thanks so much, Scott. I’ve been a huge fan of yours for a long time now,
0:16:45 ever since winners and losers back on YouTube,
0:16:47 and I really appreciate the work that you do.
0:16:50 Jesus Christ. Can it be my uncle, Connor?
0:16:53 You sound like such a thoughtful, impressive young man.
0:16:59 The first thing you should do is just take stock of your blessings.
0:17:02 Let me get this. You’re a 31. You’re a lead software engineer.
0:17:04 It sounds like you’re in a good relationship with your wife.
0:17:06 You have a wonderful relationship with your niece.
0:17:10 You obviously deeply care about your brother.
0:17:15 I imagine he deeply cares about you and you’re close with his family.
0:17:20 I mean, you’re the man. You’re definitely a role model
0:17:21 for other men and people around you.
0:17:28 I think you move. I think it’s important that you establish economic security
0:17:32 and personal growth and emotional growth and happiness for you and your wife.
0:17:37 You guys are going to be my guess is probably starting your own family pretty soon.
0:17:43 And I think between FaceTime and maybe more than the occasional flight back to Raleigh,
0:17:47 you can still maintain a really close relationship with your brother and your niece.
0:17:50 Look, I think they would miss you,
0:17:54 but my guess is they love you a great deal and want you and your wife to be happy.
0:17:59 And I believe that in I don’t think anyone who has,
0:18:02 who’s ambitious, young and talented should be in the office.
0:18:03 You’re going to make more money in the office.
0:18:06 You’re going to make deeper relationships.
0:18:07 You’re much more likely to get promoted.
0:18:12 It’s in being in a city when you’re young and you don’t have kids
0:18:14 and you kind of dance between the raindrops and have a smaller apartment
0:18:18 and enjoy all the benefits of a city like Seattle.
0:18:19 Jesus Christ, a lot of rain.
0:18:20 A lot of rain.
0:18:22 I think you do this, brother.
0:18:25 When you move and you shake it up a little bit,
0:18:28 you may look back and say we didn’t do better, but it was the right move.
0:18:29 I’m in London.
0:18:32 I don’t love it here, but it was the right thing because it was good for my kids.
0:18:33 It was good for a change.
0:18:37 And I think if your brother’s on the path to recovery,
0:18:38 I don’t know.
0:18:41 I think you’re focused on yourself right now.
0:18:44 What would your niece want for you when she’s 25?
0:18:46 She would look back and think,
0:18:50 “I have this wonderful uncle that loved me a great deal, and I loved a great deal.”
0:18:54 But what I wish was that he was incredibly happy,
0:18:57 that he was doing what built economic security for him and his family,
0:19:00 made him and his wife the happiest.
0:19:02 And you’re still going to be able to be an outstanding uncle,
0:19:04 which it sounds like you are.
0:19:06 And some, in some, Seattle, here you come.
0:19:09 That’s all for this episode.
0:19:10 If you’d like to submit a question,
0:19:13 please email a voice recording to officehours@proffgmedia.com.
0:19:16 Again, that’s officehours@proffgmedia.com.
0:19:29 This episode was produced by Jennifer Sanchez and Caroline Shagren.
0:19:31 Drew Burroughs is our technical director.
0:19:34 Thank you for listening to the Proffy Pop and the Vox Media Podcast Network.
0:19:38 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn.
0:19:40 And please follow our Proffy Markets Pod,
0:19:44 wherever you get your pods for new episodes every Monday and Thursday.
0:19:48 Support for this show comes from Seven Rooms.
0:19:52 For the restaurant operators out there who want to create more regulars on the regular,
0:19:53 check out Seven Rooms.
0:19:58 Seven Rooms is an all-in-one CRM marketing and operations platform
0:20:01 that helps you make more money and more magic for your guests.
0:20:04 It gives your staff the tools to deliver service
0:20:06 that keeps your guests coming back for more,
0:20:09 from direct reservations to smart table management,
0:20:12 to targeted text and email marketing.
0:20:16 Seven Rooms helps you grow your brand and your covers, and not your workload.
0:20:18 Learn more at SevenRooms.com.
0:20:21 Seven Rooms. Make magic. Make money.
0:20:28 Amazon Q Business is the generative A.I. assistant from AWS.
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0:20:47 Learn when Amazon Q Business can do for you at aws.com/learnmore.
0:20:53 That’s aws.com/learnmore.

0:00:00 [MUSIC PLAYING]
0:00:03 Support for the show comes from HubSpot.
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0:01:24 Amazon Q Business is the generative AI assistant
0:01:25 from AWS.
0:01:28 Because business can be slow, like wading through the mud.
0:01:33 But Amazon Q helps streamline work.
0:01:36 So tests like summarizing monthly results
0:01:37 can be done in no time.
0:01:44 Learn when Amazon Q Business can do for you at aws.com/learnmore.
0:01:46 That’s aws.com/learnmore.
0:01:51 Welcome to Raging Moderates.
0:01:53 I’m Scott Galloway.
0:01:55 And I’m Jessica Tarlove.
0:01:58 Jess, are you at home in New York with your lovely children?
0:01:58 I am.
0:02:03 And we had a big three-year-old birthday bash on Sunday.
0:02:05 Frozen-themed.
0:02:06 I won’t sing for you.
0:02:11 But it was toddler intense, to say the least.
0:02:12 How was your weekend?
0:02:13 You’re wearing a tie.
0:02:15 In case people aren’t watching this, you’re very dressed up.
0:02:18 Yeah, my weekend could not have been more different.
0:02:21 I went with a group of 40 and 50-somethings
0:02:26 to a castle in the Cotswolds where we drank and then got up.
0:02:29 And about 30 people followed us into the middle of nowhere
0:02:31 and loaded our shotguns.
0:02:35 And we shot at birds.
0:02:38 And then the best part was the dogs that came and collected
0:02:39 the birds.
0:02:42 Fortunately, I’m not a very good shot.
0:02:47 So a lot of birds are around today
0:02:48 because I’m not very good at it.
0:02:50 But it’s a very British thing.
0:02:51 It’s probably my first–
0:02:52 it’s called a shoot.
0:02:54 And the best part about it was one I got to go.
0:02:58 I got to go with a friend, my friend John of John and Wendy.
0:03:00 He’s a super impressive venture capitalist.
0:03:02 But he loves shooting and he loves British culture.
0:03:05 So he said, I’ll take you for your outfit.
0:03:07 And I went and I bought this crazy outfit.
0:03:09 You get these boots and these things
0:03:10 you tie around your boots on.
0:03:11 He was called these ridiculous socks.
0:03:13 They look like leg warmers.
0:03:16 Anyways, it was a very kind of down nabby meets murder
0:03:18 kind of weekend.
0:03:21 So all right, so before we get into it,
0:03:22 I heard Jess actually, in addition
0:03:25 to hosting great parties for three-year-olds,
0:03:28 that you went to Donald Trump’s Patriot Awards last week.
0:03:30 And it was the first time that you were actually
0:03:33 in close proximity to the Donald.
0:03:35 Give us your impressions after that event.
0:03:36 Yeah, well, it was a vibe.
0:03:39 So it’s actually Fox’s Patriot Awards.
0:03:41 And Donald Trump was being honored.
0:03:41 So I was there for work.
0:03:43 We did a live show.
0:03:45 I was just excited that Donald Trump gets a Patriot.
0:03:47 That’s a shocker.
0:03:47 Well, that must have been–
0:03:50 Well, I wanted to blow your mind
0:03:53 after you blew the minds of birds.
0:03:55 Anyway, the Patriot Awards is something
0:04:00 that we do annually and is actually really lovely.
0:04:02 It’s all about honoring everyday heroes
0:04:05 and people who’ve served the country.
0:04:06 I’m sorry, go ahead.
0:04:08 He is your president-elect.
0:04:11 Just let me get it out and then you do whatever you want.
0:04:12 Sorry, go ahead.
0:04:13 Sorry.
0:04:16 This was the first year that Donald Trump was there.
0:04:18 Did they get a collective award?
0:04:19 No, they did not get an award.
0:04:20 Thank you for asking.
0:04:21 Sorry, go ahead.
0:04:22 Good.
0:04:23 Are you sure?
0:04:24 No, I’m not, but good.
0:04:25 OK, OK, I’m going to do it.
0:04:27 Anyway, so we were out there.
0:04:32 We did a live taping of the five, which is always fun.
0:04:35 I mean, some people who like me also got booed a little bit.
0:04:36 You did?
0:04:37 You got booed?
0:04:38 Kind of like, yeah, well, you know.
0:04:42 Like, joking, like, kind of funny, funny booze?
0:04:43 Yeah, like, I didn’t cry or anything,
0:04:44 but it’s never nice.
0:04:47 And everyone– the rest of the cast is like, come on, guys.
0:04:49 She’s actually even agreeing with us on this one.
0:04:50 But I get it.
0:04:54 It’s all part of it, and you get to play with the audience a bit.
0:04:57 But the Patriot Awards– and it’s going for a few years,
0:04:59 and we’ve done it in Florida.
0:05:02 We did it in Nashville last year at the Grand Ole Opry,
0:05:03 which was amazing.
0:05:06 And you meet some pretty incredible people
0:05:10 that are doing wonderful things for the country.
0:05:14 And you can insert your Donald Trump joke later.
0:05:18 But it plays into why this was such an interesting contrast
0:05:18 for me.
0:05:22 So the Patriot Awards this time honored–
0:05:25 I don’t know if you remember this story about an NYPD officer
0:05:28 named Jonathan Diller, 31 years old, out on Long Island.
0:05:31 Routine traffic stop was shot and killed.
0:05:33 He had a one-year-old son.
0:05:38 His widow was the opening award recipient and speaker.
0:05:44 And she was breathtaking, that this woman did not
0:05:48 have a complete meltdown doing this, talking about her husband
0:05:51 and his service and loving police officers.
0:05:53 And if you remember, there was a big back and forth.
0:05:55 Like, Donald Trump went to see the family.
0:05:59 And Biden didn’t go, and it became this kind of touchpoint
0:06:03 in the war over who actually backs the blue.
0:06:06 And she, in her speech, says how great she thinks Donald Trump is.
0:06:11 They had the UNC frat guys who protected the American flag
0:06:13 from the pro-Palestinian protesters
0:06:16 on Chapel Hill’s campus last spring.
0:06:19 These whistleblowers from the Phoenix VA,
0:06:20 the ones who actually ended up getting
0:06:23 Shinseki, the VA secretary under Obama, fired.
0:06:26 Basically, they exposed the VA for denying and putting off
0:06:29 care for hundreds of veterans who would have lived
0:06:33 had they gotten their care on time and this massive cover up.
0:06:34 And so those are the kind of people
0:06:36 that are being honored at this.
0:06:40 And you’re in this room with a bunch of people
0:06:42 who do not vote the same way that I did.
0:06:46 And they love these people whose message is over and over again,
0:06:48 we love the red, white, and blue, right?
0:06:50 Like, America is the best place to be,
0:06:52 even if we’ve gone through something terrible,
0:06:55 like this poor woman losing her husband.
0:06:57 And then a common current through all of it is,
0:06:59 and we also love Donald Trump.
0:07:02 There is a very good case to be made
0:07:05 that Democrats do not show up well enough
0:07:07 for these types of people,
0:07:09 that we don’t talk about our patriotism enough,
0:07:11 that we don’t talk about loving cops.
0:07:12 – Yeah, I agree. – Yeah, I agree.
0:07:14 – That’s my point, thank you. – Yeah.
0:07:16 – Anyway, so all these amazing people
0:07:18 who are getting these awards
0:07:21 and giving really captivating speeches full of Americana,
0:07:22 and then Trump comes out.
0:07:25 I’ve, you know, I’m in the front table
0:07:27 with a couple people. – Like, who do you sit with?
0:07:29 Who’s the most fun to drink with?
0:07:31 Who gets too drunk?
0:07:32 Was Pete Hegseth there?
0:07:34 Did he hit on you before like,
0:07:35 throwing up and passing out?
0:07:37 Is he still, does he go to that stuff?
0:07:38 – I give up, let’s move on.
0:07:41 I heard about your cable news cabinet from Pivot Though,
0:07:43 and I didn’t make it, which was kind of a bummer.
0:07:46 – I see you as sort of quiet power.
0:07:47 I see you as like, head of fundraising.
0:07:49 – Soft power. – Soft power,
0:07:50 I can totally see that. – That’s fine.
0:07:53 – Also, if you decide to ever run for Congress
0:07:55 or Senate, I’ll head your fundraising.
0:07:57 – Well, you’re honestly screwing me over
0:07:58 with these conversations,
0:08:01 because you’re making me seem a little–
0:08:02 – It’s all about awareness.
0:08:05 – They’re all presses, good press.
0:08:08 – Yeah, junior senator from,
0:08:09 wait, you grew up in New York, didn’t you?
0:08:10 – New York, yeah.
0:08:12 So me and AOC and the–
0:08:14 – No, no, no, no, no, no, no, we’re running you
0:08:16 for president, Kirsten Jillerranich.
0:08:17 – Straight to the top.
0:08:18 – Kirsten Jillerranich, Charles Schumer,
0:08:21 in my opinion, are like weak, weaker and weakest,
0:08:23 and I think they absolutely need a young,
0:08:26 dynamic, centrist Democrat to primary them.
0:08:29 There, I’ve literally got it figured out for you.
0:08:31 I’ve got it figured out. – Always.
0:08:32 – That’s why I’m here. – If you believe
0:08:35 Senator Tarloff has a nice ring to it,
0:08:38 then please DM me, I will take your name down,
0:08:41 and when we decide, when Charles Schumer turns 140
0:08:44 in 10 years, we can decide to primary him,
0:08:47 and when everyone decides to kiss Kirsten Jillerbrand
0:08:48 while being a thoughtful, nice woman,
0:08:52 is totally ineffective, then we’ll primary her as well.
0:08:54 I’m 100% behind this.
0:08:59 Okay, before we go here, before we bust in the news,
0:09:02 we wanna remind you to please follow Raging Moderates
0:09:04 on your podcast platform of choice.
0:09:07 If you want Senator Tarloff and you want Daddy
0:09:09 to still have the money to go on his shoots
0:09:14 and not kill birds, please just subscribe.
0:09:16 Please help us out with that follow button.
0:09:19 This week on Friday, we have an interview
0:09:20 with Tim Miller from the Bull Work
0:09:23 only on the Raging Moderates feed.
0:09:24 A lot of our interviews and our better stuff
0:09:26 is only on the Raging Moderates feeds.
0:09:28 Be sure to check it out.
0:09:30 Okay, in today’s episode of Raging Moderates,
0:09:32 we’re discussing Trump’s promises
0:09:34 for the first day of his tenure.
0:09:38 Assad flees to Moscow with Syrian rebels captured Damascus.
0:09:40 Biden’s preemptive pardons debate,
0:09:43 the final house math and leadership shakeups,
0:09:46 and finally our predictions for next year.
0:09:48 All right, where should we get to?
0:09:50 Let’s, over the weekend, President-elect Trump
0:09:53 told NBC’s Kristen Welker he plans immediate action
0:09:55 after taking office on January 20th.
0:09:58 He vowed to pardon January 6th rioters on day one,
0:10:00 extend his first term tax cuts,
0:10:02 deport millions of undocumented immigrants,
0:10:04 and push to end birthright citizenship.
0:10:06 Trump also said he’d work towards a solution
0:10:09 to protect dreamers, and he won’t impose
0:10:11 new restrictions on abortion pills,
0:10:13 on pardoning rioters, he claimed.
0:10:16 – This is the most disgusting, filthy place.
0:10:18 These people are living in hell.
0:10:19 – Let me just–
0:10:20 – And I think it’s very unfair.
0:10:21 So yeah, most likely I’ll do it.
0:10:25 – Jess, what did you make of this interview?
0:10:28 – This felt like actually the kickoff
0:10:30 to the new administration in a certain way.
0:10:32 I know we have to get to inauguration,
0:10:36 but it’s crazy how quickly I feel like things have turned.
0:10:39 I don’t remember this when Biden won in 2020
0:10:41 that he suddenly became the president,
0:10:44 but Donald Trump is, like he said Notre Dame
0:10:45 for the reopening.
0:10:46 He is meeting with world leaders.
0:10:48 He is meeting with Zelensky.
0:10:51 It feels like everyone has just kind of shut the door
0:10:55 on Biden and is like, hello, Trump, whatever that means.
0:10:58 And choosing to go on Meet the Press,
0:11:01 he has been interviewed by Welker before.
0:11:05 I think definitely trying to send a mainstream signal
0:11:06 right to the public.
0:11:09 I’m going to be out here in these places
0:11:11 that you recognize and you don’t have to come
0:11:14 and find me on the Andrew Schultz podcast necessarily.
0:11:19 But it was classic Trump in that the things
0:11:23 that he was promising to do are the things that he said,
0:11:25 depending on what your politics are,
0:11:30 it fits exactly in the box that you have put him in.
0:11:33 So he says, I’m ending birthright citizenship.
0:11:35 I’m deporting families together, right?
0:11:36 That was one of the big ones,
0:11:38 which Tom Holman, who’s his borders are,
0:11:42 had said on “60 Minutes” before when he was interviewed.
0:11:44 So the idea is like, oh, we don’t have to separate families.
0:11:46 Even if some of you are legal,
0:11:47 you should just all go together
0:11:51 and that he’s gonna jail Liz Cheney, right?
0:11:55 So if you’re diehard maga, you like that for obvious reasons.
0:11:59 And then if you’re more centrist or even a Democrat,
0:12:01 you’re crapping your pants again, right?
0:12:04 And saying this guy is going to do
0:12:07 all of these terrible things to the country.
0:12:11 And it’s just, it’s so difficult to pin him down,
0:12:13 which I think is why he ended up winning
0:12:17 because he’s whatever you want him to be, right?
0:12:21 He’s a dream politician in that sense.
0:12:23 And people have very legitimate arguments
0:12:26 on both sides of the authoritarian coin
0:12:28 as to which one he is.
0:12:29 And that was my big takeaway.
0:12:31 I mean, I wanna get into the specifics
0:12:32 of some of these things,
0:12:33 but what do you think about that?
0:12:35 I don’t know if you watched it or…
0:12:36 – I didn’t.
0:12:37 The weird thing that’s happened to me
0:12:41 is I have a tendency to believe that, okay,
0:12:43 the wonderful thing about our checks and balances
0:12:47 is that there’s a certain level of purposeful and transigence
0:12:51 where it’s very hard to get stupid, sweeping things done.
0:12:52 It’s also probably really difficult
0:12:55 to get really genius, disruptive things done.
0:12:58 And that it’s just unlikely.
0:13:00 I don’t think these tariffs are gonna go through
0:13:02 at anywhere near the magnitude.
0:13:04 I can’t imagine, I would like to think
0:13:06 that enough Americans look back
0:13:08 on one of the great stains,
0:13:10 one of the great stains of our society,
0:13:13 and that was interning great Japanese-American citizens
0:13:15 who for no other reason in the color of their skin
0:13:19 as many of their sons were fighting in the European theater,
0:13:22 that the moment we start housing, hosting,
0:13:25 aggregating, concentrating immigrants
0:13:27 and anything resembling a camp,
0:13:31 that the media and people and citizens in that neighborhood
0:13:33 are gonna go ape shit.
0:13:35 So I wonder how much of this is really gonna happen.
0:13:36 Now having said that,
0:13:40 what I’m also growing into is realizing,
0:13:41 I never thought,
0:13:43 I was never worried about Roe v. Wade being overturned.
0:13:44 I didn’t think there was any chance
0:13:47 would ever actually get overturned and I was wrong.
0:13:49 So nothing kind of surprises me anymore
0:13:52 and along those lines in the last two weeks,
0:13:57 I’ve had an iconic morning TV show host
0:14:00 and an iconic tech billionaire call me
0:14:04 and asked me about London.
0:14:05 And I thought, oh great,
0:14:06 you’re thinking about moving to London.
0:14:09 I moved to London not because of America
0:14:11 because I felt like I needed to leave.
0:14:13 I moved because of America.
0:14:16 Because America has offered me so much prosperity
0:14:20 and just wonderful opportunity,
0:14:22 I have the chance to give my kids an experience
0:14:23 to live in Europe.
0:14:26 These folks are scared
0:14:29 and they’re actually thinking about relocating to Europe
0:14:33 because they believe there’s a non-zero probability
0:14:35 they are going to be persecuted.
0:14:37 And I was just so flummoxed
0:14:40 that these are not reactionary stupid people.
0:14:42 These are household names
0:14:45 that are incredibly successful.
0:14:46 My first question is, you’re really,
0:14:48 you’re seriously really worried.
0:14:50 You really think he’s going to come for you?
0:14:52 And they said, I don’t know,
0:14:55 but I don’t need to live in a country where I don’t know.
0:14:56 – Yeah.
0:14:58 – The reason why America, in my opinion,
0:15:01 across a lot of dimensions is so successful
0:15:05 is you have to have a massive base of innovation
0:15:09 to create economic value such that we have the taxes
0:15:11 to pay for the best military in the world
0:15:13 and to argue over entitlements
0:15:14 and to argue over veterans affairs
0:15:19 and to bail out banks or COVID stimulus.
0:15:22 That top line number is really important.
0:15:24 And to start, both of these people
0:15:26 create tremendous economic growth.
0:15:29 Both of these people, and I’m not being biased,
0:15:30 are good people.
0:15:32 They’re good people.
0:15:34 I’m like, that’s the environment you want to create.
0:15:37 – Where do you think, can you handicap
0:15:39 what you think is going to happen post-election?
0:15:43 – I don’t know, I think– – That’s a difficult question.
0:15:44 – Yeah, I don’t.
0:15:46 – You can say I don’t know.
0:15:48 – I mean, I don’t know an exact number.
0:15:51 I do know, which we’ve talked about a few times,
0:15:56 that what Trump cares about most is economic prosperity,
0:15:58 because that’s what he knows he’ll be remembered for,
0:15:59 either good or bad.
0:16:02 And frankly, it’s what got him across the line
0:16:03 in the 2024 election,
0:16:05 that people had a favorable view
0:16:08 of what the economy looked like when he was president.
0:16:11 And I’m curious as to what you think about,
0:16:14 I get it that the fear mongering
0:16:19 that is rooted in some very genuine policy chops
0:16:22 on people like Stephen Miller or Tom Holman, et cetera,
0:16:26 that are founded in xenophobia, as far as I’m concerned.
0:16:27 All of that is very–
0:16:28 – And it’s founded in bullying
0:16:29 when they were in the eighth grade,
0:16:30 but I agree with you.
0:16:32 – But definitely Stephen Miller, I don’t know about Holman.
0:16:34 He seems like he was always a bully,
0:16:39 but there are a lot of immigrants
0:16:42 and successful immigrants and well-educated immigrants
0:16:44 that are very big supporters of the president.
0:16:47 I mean, I was looking at the pictures of JD Vance
0:16:48 from Thanksgiving.
0:16:50 He’s married to Usha Vance,
0:16:52 whose parents are Indian immigrants.
0:16:56 He’s with her family for Thanksgiving.
0:16:59 He’s a mixed family.
0:17:03 And I would assume a lot of people in that group
0:17:05 are big fans of Donald Trump.
0:17:07 Donald Trump is out there saying,
0:17:10 I’m going to cut regulations like you’ve never seen before.
0:17:13 He saved $200 billion in cut regulations in the first term.
0:17:15 He wants to go even further.
0:17:17 I know there are a lot of people who run businesses
0:17:19 that are excited about that who feel like,
0:17:21 yeah, you can be successful here,
0:17:22 but you can be even more successful
0:17:25 if we get rid of some more of this red tape.
0:17:28 I’m concerned about certain pieces of quote unquote,
0:17:31 red tape that we need like climate protections
0:17:32 and things like that.
0:17:34 But there are going to be a lot of people who think
0:17:38 that this is actually a good place to be doing business
0:17:40 with Donald Trump in the White House
0:17:45 versus a more regulatory minded Democrat.
0:17:46 – It’s a great point.
0:17:48 And on the issue of immigration,
0:17:50 we have someone who’s worked with us for a long time
0:17:52 who’s incredibly talented
0:17:54 and English is her fifth language.
0:17:57 And yet she’s arguably our most talented
0:18:00 copywriter editor just in around immigration.
0:18:02 While she’s very progressive,
0:18:04 while immigration, I haven’t stated explicitly,
0:18:07 but I know I’m fairly confident saying
0:18:09 she doesn’t want people rounded up.
0:18:12 But she says, look, I waited in line to get here
0:18:15 and it took me seven years and I did it legally.
0:18:20 And so many people in America seem to feel
0:18:22 that we should just have open borders.
0:18:23 I was like, which is it?
0:18:24 Can I come?
0:18:26 Can my parents come now?
0:18:26 Which is it?
0:18:27 I waited in line.
0:18:29 And what’s interesting, we saw in this election
0:18:31 is a lot of recent immigrants
0:18:36 are the most pro-Trump’s immigration policies
0:18:41 that they feel like it’s just absolutely gotten out of control.
0:18:44 It’s gonna be, I’m just sort of fascinated to see
0:18:46 how the dynamics of what is effectively
0:18:48 sort of a semi-Lame Duck president,
0:18:52 he’s especially Lame Duck after 2026
0:18:56 and push back on economic policies should inflation take up.
0:19:01 And also, is he has a negotiating tactic starting really high
0:19:05 saying, okay, tariffs of 100% and then going down to 20.
0:19:08 And the thing that scares me about saying,
0:19:13 I’m never gonna deny people access to their abortion pills.
0:19:16 Well, okay, but if you keep appointing conservatives
0:19:18 to the Supreme Court, it’s gonna be a lot of land.
0:19:19 You don’t have to do it yourself, yeah.
0:19:21 That’s definitely a concern.
0:19:24 And there is no one at the top levels of the administration,
0:19:26 even with these appointments
0:19:31 that I can look to and feel secure about something like that.
0:19:37 I mean, they all feel like power, power, power people.
0:19:41 Let’s take a quick break, stay with us.
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0:23:02 – Okay, so what’s next here?
0:23:04 Let’s go to something a little bit more fun.
0:23:05 – Let’s go light Syria.
0:23:07 – Let’s talk to, let’s talk about Assad.
0:23:09 So the Assad family’s 50 year rule over Syria
0:23:13 came to an end following a swift rebel offensive.
0:23:17 President Bashar al-Assad fled to Moscow with his family
0:23:18 where they were granted asylum.
0:23:20 President Biden called the regime’s fall
0:23:23 a historic opportunity for Syria to rebuild
0:23:25 while warning of risks ahead.
0:23:29 Rebel leader Abu Muhammad al-Jalani speaking in Damascus
0:23:32 hailed the victory as one for the entire Islamic nation
0:23:34 and pledged protection for minorities
0:23:37 under the new leadership by his HDS group.
0:23:39 I think this quite frankly is the most undercovered story
0:23:41 in the world right now.
0:23:43 – Totally, well, it was definitely undercovered
0:23:45 for the first 12 days.
0:23:48 And then it’s Syria fell on the 13th day
0:23:49 and everyone was like, oh, hey,
0:23:51 there’s something going on here.
0:23:55 I felt, I got chills watching some of this,
0:23:59 especially the footage of the prisoners being freed
0:24:03 from, I don’t want to mispronounce, the Sednaia prison,
0:24:06 that huge complex in Damascus.
0:24:10 But this guy, Jalani, who’s the head of HTS,
0:24:11 which is the main rebel group.
0:24:15 So there’s an amalgamation of rebels
0:24:17 that have come together to do this.
0:24:20 Seems like with some pretty heavy help from Turkey,
0:24:24 but he is the figurehead of everything at this moment.
0:24:27 He seems to be quite charismatic.
0:24:29 He’s former al-Qaeda, which is interesting.
0:24:30 And he’s been imprisoned before
0:24:34 and has had changed from, I guess, a jihadist
0:24:39 to a Syrian nationalist, though they are,
0:24:41 they’re very heavy Islamists,
0:24:44 as many sists that I put into one sentence.
0:24:49 But I have enjoyed, I guess, what he has had to say so far.
0:24:52 He’s ordered that all of the borders be opened
0:24:53 and that anyone who was displaced,
0:24:56 you know, there are 14 million Syrians
0:25:00 who have been displaced over the last 13 years.
0:25:03 And they’re flying the Free Syria flag at the embassy
0:25:06 as it was watching it up in Sweden.
0:25:09 There are 200,000 refugees that they’ve taken
0:25:10 over the years.
0:25:13 He’s said that there’s amnesty
0:25:16 for all Syrian soldiers and conscripts.
0:25:17 Like no questions asked.
0:25:19 You wanna come back and be with us.
0:25:20 You can be with us.
0:25:23 I don’t know if this will hold,
0:25:25 but he’s also commanded his troops
0:25:28 that they cannot interfere with women’s clothing at all.
0:25:31 So we’ll see how that holds up.
0:25:33 But it is fascinating geopolitically.
0:25:38 I mean, if Ukraine hadn’t taken Russia apart to this level
0:25:41 and if Israel hadn’t hurt Iran and Hezbollah
0:25:44 to the level that they have in the last couple of months,
0:25:46 this would never have been possible
0:25:48 because Syria just, Assad couldn’t do it
0:25:51 without Russia and Iran anymore.
0:25:54 And that seems to be why this happened.
0:25:56 But what are your initial thoughts?
0:25:58 – I agree a lot of the initial complexion
0:26:00 and body language is very positive.
0:26:03 But this is sort of a proble bringing together
0:26:06 a group of people from some very bad organizations.
0:26:10 So there’s some risk here in the Israeli sense at risk
0:26:12 and they’ve actually been intensely bombing
0:26:17 and attacking military sites and munitions,
0:26:20 caches inside of Syria thinking,
0:26:22 we don’t know anything about these people
0:26:25 and we don’t want them to have access to these weapons.
0:26:26 There’s no getting around it.
0:26:28 Bashar al-Assad, that regime,
0:26:30 him and his father, a murderous regime,
0:26:32 I think somewhere between half a million
0:26:34 and a million Syrians have been killed,
0:26:36 gas attacks on their own people.
0:26:39 Now, the world didn’t seem to be that outraged by it
0:26:41 because it wasn’t Jews killing these people,
0:26:42 but that’s another talk show.
0:26:45 But the thing that strikes me about this
0:26:50 is that we have such a self-hate for America.
0:26:55 We are so remiss and I believe at the hands of an America
0:26:58 where they see the top 1% doing better than them,
0:27:00 at the hands of platforms that have been weaponized
0:27:01 by bad actors that want to divide us
0:27:03 and get us to hate each other.
0:27:07 We don’t recognize that America and the West
0:27:09 are winning geopolitically.
0:27:12 And that is Bashar al-Assad, who does not share our values,
0:27:16 immediately when she got real, turned to Russia.
0:27:18 But here’s the problem.
0:27:21 A Russia is like, sorry, boss, we got our own issues
0:27:24 because unbeknownst to me,
0:27:25 where I thought I was gonna roll into Kiev
0:27:27 in about seven days,
0:27:31 the West backing the incredible Ukrainian army
0:27:33 is killing about 1,500 of my people a day.
0:27:34 I’ve lost half a million people.
0:27:36 I just don’t have the time, the resources or the energy
0:27:38 to come in and back you up.
0:27:40 And then he turned to his other friend, Iran.
0:27:43 And Iran’s like, well, I don’t know if you’ve heard,
0:27:44 but in addition to you,
0:27:48 our proxies, including Hezbollah, the Houthis and Hamas
0:27:49 are not doing that well
0:27:52 and our air defenses have been taken down.
0:27:55 And we’re a lot less popular amongst the Iranian people
0:27:58 than Hamas is among the Palestinian people.
0:28:00 Sorry, boss, we can’t show up.
0:28:05 So when you think about really bad people, Assad, Putin,
0:28:07 the Islamic regime and Iran,
0:28:12 the West being unified around their support of Ukraine,
0:28:13 you know, we’re winning.
0:28:16 And I don’t, it, it bums me out
0:28:20 that people don’t high five the Wests in our alliance
0:28:22 and our commitment to American values,
0:28:24 our support of Israel,
0:28:28 which has kicked such serious ass over the last,
0:28:30 since October the 7th over the last 14 months
0:28:32 doing our dirty work for us,
0:28:35 taking more people off the most wanted terrorists list
0:28:36 in six weeks.
0:28:38 And we’ve managed the last 25 years,
0:28:40 totally defanging this,
0:28:44 this quiet supposedly sleeping giant of Hezbollah
0:28:47 with the most precise anti-terrorist action in history,
0:28:50 going into Syria and making sure they don’t have weapons
0:28:53 in case these guys, you know, aren’t as warm and cuddly
0:28:55 as they’re pretending to be right now.
0:29:00 But basically Iran, Russia and Syria, this triumvirate,
0:29:01 oh, in North Korea is sending people
0:29:04 into a meat grinder now in Russia.
0:29:06 This is an enormous, this is,
0:29:09 essentially this is an indicator
0:29:11 that our good cholesterol has never been higher
0:29:15 and our bad cholesterol has never been lower globally.
0:29:17 You know, we are geopolitically,
0:29:18 the good guys are winning here
0:29:21 and the bad guys are just getting increasingly fucked.
0:29:25 They are having Putin, the Islamic regime and Assad
0:29:29 are having really bad days a lot.
0:29:32 And it strikes me that we never take time
0:29:37 to recognize how talented our security apparatus is,
0:29:41 how resolute and thoughtful and committed we’ve been
0:29:44 around joining forces to support Ukraine.
0:29:49 So I’m just, I’m both excited about it, possibly,
0:29:52 but I’m also disappointed that we don’t take more
0:29:54 of a victory lap for the West
0:29:58 and also recognize that Israel, in my opinion,
0:30:02 is essentially destabilizing the world for bad people
0:30:03 and stabilizing the Middle East.
0:30:05 In my view, over the medium and long-term,
0:30:09 the Middle East is gonna be a much less dangerous place.
0:30:12 It’s one of those things that’s so difficult to understand.
0:30:14 Do you know what Bashar al-Assad, you know, he was,
0:30:16 he and his wife were educated in the United Kingdom.
0:30:19 Do you know what he was educated as?
0:30:19 – No.
0:30:21 – He’s an ophthalmologist.
0:30:23 I mean, it’s such an interesting study
0:30:27 in how people descend into hell, right?
0:30:29 This guy was helping people see again.
0:30:31 This guy was doing cataract surgery.
0:30:36 And then, you know, fast forward 15, 20 years later,
0:30:37 or not even know if it’s that long,
0:30:39 he’s gassing his own people.
0:30:41 – But his dad was always doing this.
0:30:45 I mean, that was a facade.
0:30:47 I mean, I’m glad that some people can see better
0:30:51 because of him, but Assad was raised in this.
0:30:55 I mean, his family’s been in power for 50 years.
0:30:58 His wife and I, from when I lived in London,
0:31:00 there are a lot more people floating around there
0:31:01 who know these people.
0:31:04 And I heard similar, oh, she’s lovely.
0:31:05 Give her a chance.
0:31:07 No fucking thank you.
0:31:11 You knew what you were marrying into, at the very least.
0:31:13 But it is, I don’t know.
0:31:18 I’m all for people getting great educations, of course.
0:31:24 But I do hate that we share institutions
0:31:26 with some of the world’s most evil.
0:31:29 That really does burn me.
0:31:32 And this is one of those examples.
0:31:35 There were debates constantly at LSE about this,
0:31:38 about what money they would be taking from the Middle East
0:31:40 and who was gonna get to go.
0:31:44 And remember that about Ben Laden’s kids that went to Harvard.
0:31:46 I don’t think everyone should be punished
0:31:47 for what their parents did.
0:31:52 You may not go into the family business as it were,
0:31:54 but Assad surely did.
0:31:59 And on the Israel front, I totally agree with you.
0:32:02 I think the issue about us taking a step back
0:32:06 and spending more time reflecting
0:32:07 on how well the West is doing
0:32:10 or that these are good moments for Western values,
0:32:14 that is not computing for the average American citizen.
0:32:18 And I think a lot of it is due to the cost of all of this,
0:32:19 that they’re being hit constantly
0:32:23 with a barrage of information around,
0:32:26 you can’t get X thing for your kids,
0:32:28 but we’re sending another billion dollars
0:32:30 for people you’ve never met in your life
0:32:32 or that you feel completely disconnected to.
0:32:37 And that became such a key plank of Trump’s candidacy.
0:32:38 Where he was just like,
0:32:42 America first means that your kid should get a good education
0:32:44 and shouldn’t have a classroom full of kids
0:32:46 who are from another place and are here illegally,
0:32:49 or that that money that we’re sending abroad
0:32:53 should be going to you first.
0:32:55 And I understand for someone who is not living
0:32:57 as much of a charmed life as we are,
0:33:00 how that is persuasive.
0:33:03 It also made me think back to the red line
0:33:06 with Obama about Assad.
0:33:10 And that as much joy as I was feeling,
0:33:15 that maybe this would be a real positive future
0:33:18 for the people of Syria who have endured
0:33:21 more than my mind can even process.
0:33:25 I’m thinking, how did we let this continue?
0:33:28 What we saw the videos of the mass graves,
0:33:30 we knew he was gassing his own people.
0:33:32 We had a red line.
0:33:34 – Huge stand on Obama’s legacy, yep.
0:33:36 – Totally, and it does seem like that has been
0:33:40 one of the kind of lessons or big threadlines
0:33:41 in the aftermath of the election.
0:33:44 – A lot of people think Putin went into Ukraine.
0:33:46 I mean, these red lines,
0:33:47 when they no longer became lines,
0:33:51 a lot of people would argue that we were no longer–
0:33:52 – That he went to Crimea
0:33:55 because we don’t stand tall about this, yeah.
0:33:57 – We gave him a green light.
0:33:58 The thing that disappoints me,
0:34:01 I think it’s politically advantageous
0:34:04 and somewhat short-term minded,
0:34:08 expedient way of political opportunism.
0:34:10 You’ve never met anyone in Ukraine.
0:34:10 Do you really care?
0:34:12 Your son’s not doing well.
0:34:15 Do you really care about territorial sovereignty in Ukraine
0:34:18 when a 12 pack of bounty is $30?
0:34:20 Would frustrates me more?
0:34:22 I respect the fact they play that political opportunism.
0:34:26 What frustrates me is that we don’t have a Democrat
0:34:28 who can punch back and say, okay,
0:34:31 that’s the same argument that was made to FDR.
0:34:34 And they kept us out of the war too long in ’39.
0:34:38 That was the same argument that Parliament made to Churchill
0:34:40 about staying out of,
0:34:42 we don’t, he could have cut a deal with Hitler
0:34:45 and saved the Britain, at least in the short-term.
0:34:48 When fascists or murderous autocrats invade Europe,
0:34:51 it usually doesn’t end well when we just let them.
0:34:53 And then to go straight to the numbers.
0:34:56 And that is, I would have gone on offense.
0:34:59 There are few investments that have shown a greater ROI
0:35:03 than our and Europe’s greater investment
0:35:06 than the US’s in the support of the Ukrainian army.
0:35:10 We’re talking about $60 to $80 billion.
0:35:12 I think it’s maybe over a hundred now.
0:35:14 But when you look at, we spent $800 billion a year
0:35:16 on our military and in exchange,
0:35:19 if someone had come to us and said, you know what?
0:35:24 I’m gonna take out a third to almost half
0:35:26 of Russia’s kinetic power.
0:35:28 I’m going to delegitimize their army.
0:35:32 I’m going to take out a half a million troops.
0:35:33 I’m going to make it less likely
0:35:36 that China invades to Taiwan
0:35:38 ’cause they see what a small, motivated,
0:35:42 technically sophisticated defense force can do.
0:35:45 Would you pay $80 billion for that?
0:35:48 We would hit that bid all day long.
0:35:51 This was, instead of apologizing
0:35:53 and talking in broad sweeping strokes,
0:35:55 they should have said, folks,
0:35:58 if we had been offered the ability, Russia’s our enemy,
0:35:59 Russia wreaks havoc.
0:36:03 Russia takes oil prices up purposefully.
0:36:07 Russia creates instability, greater likelihood of war.
0:36:11 For $80 billion, we’re gonna pull the mask off this clown.
0:36:16 We’re gonna absolutely decimate the reputation
0:36:19 and we’re gonna take out a third to half of their kinetic.
0:36:21 And Americans won’t die for it.
0:36:23 And that’s an important part.
0:36:23 Great point.
0:36:26 And not a single American boot on the ground?
0:36:28 Yeah, I’m in training, but not dying.
0:36:31 For seven, our federal budget is $7 trillion.
0:36:36 So I need about 1%, for 1%–
0:36:38 I need a penny.
0:36:40 Yeah, I need a penny on the dollar to do this.
0:36:43 This is the best investment America has made
0:36:44 in the last 10 years.
0:36:45 But no one says it like that.
0:36:46 And the way that they wrote–
0:36:49 Well, not until the new junior senator from New York.
0:36:50 Hey now.
0:36:51 There you go.
0:36:53 And her friend who shoots birds.
0:36:57 No one conveys it in those terms
0:37:00 because we are always into the soaring rhetoric
0:37:02 about protecting democracy.
0:37:07 And people like to hear we took out X amount of terrorists.
0:37:09 That’s what they wanna hear in all of this.
0:37:13 Or Vladimir Putin is flipping out
0:37:18 because he has lost control of these 10 areas.
0:37:21 Right, and this is what their economy looks like.
0:37:24 And I don’t wanna say that there aren’t any Democrats
0:37:26 that communicate well about these things.
0:37:28 I think especially the folks who are veterans
0:37:30 that know exactly what this fight means
0:37:33 are good about it, like the Jason Crows of the world.
0:37:36 But you know who I think does a pretty decent job?
0:37:37 Cocaine Mitch.
0:37:39 I listen to Mitch McConnell talk about why we need
0:37:44 to continue to send money to Ukraine and to Israel.
0:37:47 And you can tell that that man deeply feels this.
0:37:49 And I know that a lot of Republicans,
0:37:51 especially the MAGA wing,
0:37:54 detest him probably for being this,
0:37:56 having this level of clarity.
0:38:00 – Okay, let’s take a quick break.
0:38:01 Stay with us.
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0:40:49 – Welcome back.
0:40:51 Since Hunter Biden’s pardon,
0:40:53 there’s been chatter about whether Biden should issue
0:40:55 preemptive pardons for other people
0:40:57 that Trump has openly targeted,
0:41:00 including Adam Schiff and Liz Cheney.
0:41:02 Political reports, there’s a heated internal debate
0:41:05 on the White House, but Biden hasn’t weighed in yet.
0:41:07 Supporters, including Brendan Boyle,
0:41:10 say Trump’s move to put Kashpatel in charge of the FBI
0:41:12 shows this isn’t just hypothetical.
0:41:15 Shift, ironically, is urging Biden not to do it,
0:41:18 saying it would look defensive and unnecessary.
0:41:21 Jess, pardons, what are your thoughts?
0:41:23 Do you think that doing this preemptively
0:41:25 is a smart move or a bad precedent?
0:41:27 – It could be both at the same time,
0:41:31 but the problem is there’s no crime.
0:41:35 They haven’t been charged with anything.
0:41:37 I mean, there’s even though to be within the Democratic Party,
0:41:40 I don’t know if you saw Bill Clinton was being interviewed
0:41:42 and it came up about Hunter’s pardon
0:41:44 and how he had pardoned his half-brother,
0:41:45 I think, or step-brother.
0:41:48 And he said, “But he served time.”
0:41:50 There’s a big difference between even just getting convicted
0:41:51 and then getting a pardon,
0:41:54 which is what had happened with Hunter,
0:41:56 but let alone someone who hasn’t even been convicted
0:41:57 of anything.
0:41:59 And it scares me for these people.
0:42:01 I think the fact that Kashpatel has an enemy’s list
0:42:03 in his book, “Government Gangsters,”
0:42:06 and I’m sure has been adding to it on a nightly basis,
0:42:08 like mirror, mirror on the wall.
0:42:10 Who else should I put in jail?
0:42:12 But what are you gonna do?
0:42:17 Just say for crimes that they may have committed
0:42:20 within the last five years
0:42:23 and that they may commit in the next 20 years?
0:42:24 I don’t understand it.
0:42:26 I think Adam Schiff is completely correct.
0:42:28 And then Jim Clyburn in the same interview
0:42:30 where he’s talking about the pardons
0:42:33 for the January 6th folks from the committee,
0:42:35 not the January 6th rioters,
0:42:39 said that Biden should pardon Trump
0:42:42 and that it would clean the slate,
0:42:44 I think was the term that he used.
0:42:48 And I cannot think of anything that would enrage
0:42:52 Democrats more than Biden pardoning Trump.
0:42:54 Yeah, I don’t think that’s gonna happen.
0:42:57 It used, my understanding is it used to be,
0:43:00 let’s review some of the most outrageous miscarriages
0:43:03 of justice because if you have a big system
0:43:06 that unfortunately gets it wrong
0:43:09 as anytime you rootinize anything,
0:43:11 this is an opportunity that the president
0:43:13 has sold the scratch and over to just kind of,
0:43:16 as you said, clean the slate.
0:43:18 And I wonder who started this mess?
0:43:20 And I go to, was it Clinton when he pardoned
0:43:22 one of his donors?
0:43:25 I mean, pretty soon there’s gonna be an implicit number
0:43:29 on pardons, the head of fundraisers is gonna say,
0:43:30 well, I can’t care what you think.
0:43:32 I can’t put this in email.
0:43:34 But generally speaking, I think a donation
0:43:37 of 10 million or more might get you a pardon
0:43:39 for you and your family should something happen to you
0:43:40 over the next four years.
0:43:44 It just seems like we’re becoming that nation.
0:43:47 Well, there was, at least there was rumor reporting
0:43:49 that those were conversations going on
0:43:51 in the first Trump administration.
0:43:53 And then I imagine with him not even thinking
0:43:55 about running again.
0:43:57 I mean, who knows what he’s gonna be thinking about.
0:43:59 But let’s just say that he knows that he has to leave
0:44:03 after the next four years that there’s skies the limit
0:44:07 on the kind of salacious pardon activity
0:44:07 that’ll be going on.
0:44:11 But Congressman Steve Cohen, who’s from Tennessee
0:44:12 has proposed a constitutional amendment
0:44:15 to limit presidential power, pardon power.
0:44:18 And he’s never once had a Republican co-signer.
0:44:20 The people are out there, you know, pants on fire,
0:44:23 like losing their minds about what Biden did.
0:44:27 I mean, this is something that gets abused on both sides.
0:44:29 And they should really look at limiting it.
0:44:32 And I was listening to a really interesting conversation.
0:44:34 Preet Bihara and Joyce Vance have a podcast
0:44:37 and they were talking about it, the Hunter Pardon.
0:44:38 And they were on opposite sides of it.
0:44:39 Preet was against it.
0:44:43 Joyce Vance was for it, laying out their cases.
0:44:46 But Preet Bihara said, which I thought, good on you.
0:44:50 He said, if you are in the same position as Hunter,
0:44:53 committed a similar crime, been convicted of it,
0:44:56 got getting sentenced, reach out to me
0:44:57 and let me defend you.
0:45:01 Like come to me and I’m gonna try to help you get a pardon.
0:45:02 I shouldn’t say defend you.
0:45:03 They had already been defended.
0:45:06 But he’s like, I will go to the president
0:45:08 and say there are actually a whole host of people
0:45:11 who are in the same position as your son
0:45:15 that are deserving of pardons by this logic.
0:45:17 And my guess is that they’re not,
0:45:19 if those people come forward,
0:45:22 are not gonna be given the same treatment.
0:45:24 Again, we both think that we would have done
0:45:26 the same thing for our children.
0:45:31 But it’s a very ugly road that we are traveling on.
0:45:33 – Okay, let’s move on, Jess.
0:45:34 Let’s move on.
0:45:36 Let’s talk about what’s happening in the house.
0:45:38 With Adam Gray’s narrow win in California,
0:45:39 we’re looking at a razor thin,
0:45:44 way for thin margin of 217 to 215 Republican majority.
0:45:46 If Democrats stick together,
0:45:50 they’d only need one Republican to flip for a tie,
0:45:52 which in the house means the vote fails.
0:45:53 But even with that slim margin,
0:45:55 Republicans still get the gavel,
0:45:57 control committees and set the agenda.
0:46:00 Meanwhile, Democrats are shaking things up,
0:46:02 bumping older ranking members
0:46:04 for younger, more telegenic folks.
0:46:08 Jamie Raskin just ousted Jerry Nadler on judiciary,
0:46:10 apparently with Pelosi’s support.
0:46:15 On oversight, AOC has hinted she might go for Raskin’s old spot.
0:46:19 Jess, what do you make of these leadership shakeups?
0:46:23 – So first I wanna say that the narrative,
0:46:25 if you would like to revisit the initial conversations
0:46:28 about the election where you said we got shellacked,
0:46:30 might need a little bit of a revision.
0:46:33 So in the end, well, I don’t know.
0:46:34 – On the presidential?
0:46:39 – No, but the mood in totality was
0:46:42 Democrats got their asses completely kicked
0:46:45 and we ended up picking up two house seats
0:46:47 and won very, very competitive races
0:46:49 and held a lot of really important Senate seats.
0:46:50 It could have been much worse.
0:46:51 I mean, they were expecting
0:46:53 that we were gonna lose Nevada,
0:46:55 that we’re gonna lose Wisconsin.
0:46:58 Pennsylvania was a big pickup with McCormick.
0:47:01 Anyway, it was not as bad as people make it out to be.
0:47:05 In terms of the new chairs of the big committee is,
0:47:08 I think it’s time for these things to happen
0:47:09 and it’s folks- – Oh, you think?
0:47:14 – Well, I don’t like to, I’m a traditional gal
0:47:18 and I think that when people have served honorably
0:47:21 and done these incredible things for the country,
0:47:23 it’s very hard for me to get to the point
0:47:26 where I wanna say, Nancy, you take a seat, right?
0:47:27 You shouldn’t be doing this anymore.
0:47:29 And I know she stepped back from being speaker,
0:47:32 but she still holds her seat.
0:47:34 And there are still a lot of young Democrats
0:47:37 that wanna run for Congress in San Francisco.
0:47:39 Jim Clyburn is still there.
0:47:41 Steny Hoyer is still there.
0:47:46 And while they might not be as powerful as they were before,
0:47:48 this is rarefied air that they’re breathing, right?
0:47:51 They’re only, was it 435 of them?
0:47:55 And I think the transition to a new generation
0:48:00 is bigger than they are allowing to happen right now.
0:48:03 That said, it’s great to see Jamie Raskin doing this,
0:48:05 though he’s in his sixties, this is not a kid.
0:48:08 The AOC thing, I think, will be fascinating
0:48:09 if it is what happens.
0:48:11 And she’s clearly positioning herself
0:48:16 for at least statewide election, maybe national,
0:48:17 if she’s gonna run for president.
0:48:19 But if you noticed at the DNC,
0:48:21 and we were both very taken with her speech,
0:48:23 great speech, one of the top ones
0:48:25 from the convention, at least for me.
0:48:37 She struck every note properly.
0:48:40 She manages the economic populism, I think, better
0:48:40 than anybody.
0:48:42 She’s clearly moderated on a lot of stuff.
0:48:45 But in interviews since then,
0:48:48 she talks about upstate New York all the time.
0:48:49 She was giving an interview with someone,
0:48:51 she mentioned Buffalo twice.
0:48:53 I’m like, have you ever been to Buffalo?
0:48:57 So clearly she’s thinking about what does AOC look like
0:48:59 beyond the Bronx and Queens, right?
0:49:02 Like, what does AOC up North look like
0:49:05 and wants to make sure that she is palatable
0:49:08 to those people and getting a committee chair
0:49:10 and getting to show off in those ways
0:49:14 will be one route to potentially getting a Senate seat.
0:49:17 So what do you think about the new Jen?
0:49:18 Next, Jen.
0:49:20 – I think Sharon is good.
0:49:21 I think these people are way too old.
0:49:23 We have the oldest legislative body.
0:49:25 I believe in the world outside of Iran.
0:49:27 I mean, it’s just insane that our leaderships
0:49:29 become a cross between the walking dead
0:49:31 and the golden girls.
0:49:33 I don’t, this must be the most amazing job in the world
0:49:34 because they never seem to want to leave
0:49:36 unless it’s feet first.
0:49:38 I would love mandatory retirement age.
0:49:40 I just think in the US,
0:49:42 most corporations are used to be 65.
0:49:47 And because of gerrymandering and fundraising
0:49:49 and Citizens United,
0:49:53 these fossils keep getting reelected.
0:49:57 And I love, a crisis is a terrible thing to waste.
0:50:00 The fact that we let a convicted felon,
0:50:03 a convicted rapist, an insurrectionist
0:50:07 regain the White House means they should clean house.
0:50:08 How did we let this happen?
0:50:10 This was the way I see it.
0:50:13 And Charles Schumer versus Mitch McConnell.
0:50:17 Senator McConnell has played Senator Schumer
0:50:19 like a fucking fiddle.
0:50:21 Anna’s older, but he’s still got it
0:50:23 in terms of his chess game.
0:50:27 You show that, you brought up Speaker Pelosi.
0:50:31 Speaker Pelosi has some of that Machiavellian, you know, Riz.
0:50:32 She deserves it.
0:50:35 By the way, she’s gonna make it nearly impossible
0:50:37 for anyone to launch a campaign in her district.
0:50:40 And then she’s going to decide to coordinate her daughter
0:50:44 who by the way, was born when Castro declared martial law.
0:50:47 That’s how old Speaker Pelosi is.
0:50:52 So she’s not, I’ll be curious what happens in San Francisco.
0:50:53 That’ll be an interesting race.
0:50:57 But we need a new set of leadership and voices.
0:51:00 And for God’s sakes, some of these people
0:51:04 just need to get a gold fucking watch and leave.
0:51:08 Or at least bring in, I mean, AOC’s policies to me,
0:51:12 she’s not my cup of tea from a policy standpoint.
0:51:15 She’s a leader and she’s telegenic.
0:51:17 And she represents youth and she can speak to what it’s like
0:51:19 to be a waitress and how important tips are
0:51:21 and what it’s like to work for a living.
0:51:23 And what it’s like to be a young woman in America.
0:51:26 I mean, a young, you know, non-white woman in America.
0:51:27 She’s fantastic.
0:51:29 She’s a fantastic representative
0:51:33 for the Democratic Party.
0:51:35 Raskin, yeah, early 60s, fine.
0:51:38 That dude, he was so quick on his feet.
0:51:40 I might be being unfair, yeah.
0:51:42 Oh yeah, he’s amazing.
0:51:43 He’s fantastic.
0:51:45 We need some gangsters to go in there
0:51:48 and go toe-to-toe with these people.
0:51:51 My favorite is, I think we talked about a long time,
0:51:54 you mentioned his name, the congressman from Florida
0:51:56 who chose- Oh, Moskowitz?
0:51:59 Yeah, who moved to impeach Biden on that ridiculous panel
0:52:02 ’cause he realized none of them had any desire to do it
0:52:05 or had any, that this panel was just nothing
0:52:09 but an attempt to feed Fox with more fodder
0:52:11 for their evening programs
0:52:13 and was wasting the time and taxpayers’ money.
0:52:16 Anyways, they are just much,
0:52:19 they’re just better than us, quite frankly.
0:52:21 The Democratic Party suffers from something
0:52:24 I suffered from my entire professional life.
0:52:26 And that is the ability to discern the difference
0:52:29 between being right and being effective.
0:52:31 And we’d rather be right and get our asses kicked
0:52:33 than effective.
0:52:37 And we absolutely need to take this crisis
0:52:40 as an opportunity to have a dramatic shift
0:52:42 in leadership.
0:52:44 Anyways, that’s my rant.
0:52:45 Go ahead.
0:52:47 I wasn’t really even a rant.
0:52:47 I liked it.
0:52:48 And I just want to add to it,
0:52:50 connecting it back to our conversation
0:52:52 about what’s going on in Syria.
0:52:55 And it’s been a lot of good days for the West,
0:52:57 but we haven’t been able to communicate it.
0:53:02 I do think that hearing about the U.S. on the world stage
0:53:05 from younger communicators, many of whom have served,
0:53:08 will be a great benefit to the party
0:53:10 and to the country in general,
0:53:13 like Alisa Slotkin, who just won the Michigan Senate seat,
0:53:18 Mikey Sherrill, who’s running for governor in New Jersey,
0:53:20 Abigail Spanberger in Virginia,
0:53:24 having a younger, more relatable face to people
0:53:27 telling you about why it is so important
0:53:31 to support our troops, Western values,
0:53:35 these fights against dictators and totalitarians,
0:53:38 I think will be much more resonant with people
0:53:41 than hearing about it from relics of the past.
0:53:44 – Senator Gallegos, Representative Moulton
0:53:47 out of Massachusetts, Senator Duckworth.
0:53:52 I think people in uniform deserve a hard look at their views.
0:53:55 I mean, the most patriotic people in America
0:53:58 are the ones, anyone with kids knows,
0:54:00 loyalty and affection is a function of your investment.
0:54:02 So your kids can end up being jerks,
0:54:05 you’re still irrationally passionate about their wellbeing
0:54:07 ’cause you have so much invested in them.
0:54:08 And wouldn’t you know,
0:54:09 the most loyal and patriotic Americans
0:54:11 are the ones who’ve invested the most,
0:54:13 specifically our veterans.
0:54:16 And what’s so upsetting is the least patriotic
0:54:17 are the ones who’ve received the most
0:54:20 but haven’t invested a lot, I call them tech bros,
0:54:23 but these are the people who are the most blessed
0:54:25 and yet don’t want to acknowledge their blessings
0:54:27 and shitpost America.
0:54:32 Anyways, I do hope that we have a new cast of leadership.
0:54:37 All right, Jess, anything else on your mind before we go?
0:54:38 Oh wait, we’re supposed to do predictions.
0:54:39 Hold on, hold on.
0:54:41 Producers are freaking out. – That’s on my mind
0:54:44 because it’s in our script.
0:54:45 – It’s in our script.
0:54:46 Okay, so before we wrap,
0:54:47 this is our last regular episode of the year.
0:54:50 So let’s talk 20, 25 predictions.
0:54:52 It’s shaping up to be a big year
0:54:54 with talk of tax cuts, entitlement reform
0:54:56 and immigration changes, Jess.
0:54:59 What do you think is on the horizon?
0:55:01 – Well, politically speaking,
0:55:03 I do want to talk about Taylor and Travis
0:55:05 actually getting engaged or publicly engaged,
0:55:10 but politics-wise, I do think at least on the small level
0:55:12 that Trump is going to make good
0:55:15 on the main planks of his campaign.
0:55:18 So I think that there will be some immigration crackdown
0:55:23 and I really hope that Blue City mayors and officials
0:55:26 will play ball with ICE to turn over criminals
0:55:30 so that we can avoid a deportation force
0:55:32 the way that Tom Homan fantasizes about it.
0:55:36 I saw Michelle Wu, who is the mayor of Boston
0:55:38 talking about an absolute blanket no
0:55:42 to cooperating with ICE and protecting all Bostonians.
0:55:46 Criminals are, illegal criminals are not Bostonians.
0:55:49 You should play ball with them to do that.
0:55:51 Mayor Adams has already said that he will.
0:55:52 Then again, he also wants a pardon,
0:55:55 but I’m sure we are going to have some level
0:55:56 of immigration change.
0:55:57 It’ll be interesting to see what he does
0:56:01 in terms of executive orders on the border,
0:56:03 probably keeping in place a lot of what Biden
0:56:04 has put in over the last year
0:56:09 and in cooperation with President Scheinbaum of Mexico.
0:56:11 I agree with you, small tariffs probably coming,
0:56:16 not this huge 100%, 60% that he’s been talking about.
0:56:19 Tax cuts, we’re storing the Trump tax cuts
0:56:20 probably through reconciliation.
0:56:22 The kind of question marks for me
0:56:25 are around what Doge can really do
0:56:26 if you’re not going to go after the Pentagon
0:56:28 and Medicare and Social Security.
0:56:31 They’re talking about, quote, “small entitlements,”
0:56:33 things like food stamps, which are not that small
0:56:35 to a lot of people, but means testing
0:56:37 as much stuff as possible.
0:56:39 And then, what could make it
0:56:41 into a huge reconciliation bill?
0:56:42 I was listening to Larry Kudlow,
0:56:44 who was in the first Trump administration,
0:56:46 now as a Fox business host,
0:56:47 not going back to the administration,
0:56:49 even though Trump wanted him.
0:56:51 And he says that we are definitely going to have
0:56:53 a big reconciliation bill
0:56:56 that’ll probably be next September.
0:56:59 And I’m curious to see what’s going in there.
0:57:02 But I know that those tax cuts are a huge priority,
0:57:04 especially when you look at who got them
0:57:06 over the finish line, the billionaires,
0:57:07 that are smacking their lips
0:57:09 at the thought of another round of it.
0:57:12 So those are my predictions.
0:57:13 – I like it.
0:57:14 – Yeah, okay.
0:57:17 The Taylor and Travis part, or the Doge part.
0:57:20 – But the thing they’re going,
0:57:21 I don’t know if you hear this,
0:57:23 the thing they’re, first off,
0:57:25 my understanding is they are looking at the military.
0:57:27 So for, I didn’t, I knew this, but I didn’t know it.
0:57:29 The military has five air forces.
0:57:31 Do we need five air forces?
0:57:33 They, my sense is they are in fact,
0:57:36 actually willing to address the military.
0:57:37 The question I have around,
0:57:39 whenever I hear means testing,
0:57:40 I’m like, okay, let’s start with social security.
0:57:42 And I realize that social security
0:57:44 is technically an off balance.
0:57:46 She said, yeah, we pay for it,
0:57:48 but it still attacks on young people
0:57:51 who are less wealthy than they’ve ever been
0:57:52 relative to their seniors.
0:57:54 And yet, I don’t understand why there wouldn’t be
0:57:56 attacks on wealthy seniors.
0:57:57 They create social security for young people,
0:57:59 but that’s another talk show.
0:58:01 But I wonder if we’re ever going to have
0:58:04 a serious conversation around means testing social security
0:58:05 or pushing the age back,
0:58:08 given the fact that we’re all living so damn long.
0:58:09 But, you know, no one,
0:58:11 my sense is they don’t want to talk about that.
0:58:13 Have you heard them talk about entitlements at all?
0:58:15 – Yeah, a lot. – And what have they said?
0:58:17 – And they’ve said that quote unquote,
0:58:18 everything’s on the table.
0:58:22 Medicare, social security,
0:58:23 not an entitlement, right?
0:58:24 You’ve paid in.
0:58:25 I take your point, obviously,
0:58:26 about it being attacks on young people
0:58:28 who are never going to get to enjoy it.
0:58:31 There would be, if you want to see civil war,
0:58:33 take away Medicare and social security.
0:58:34 So I don’t think that’s happening,
0:58:36 but I do think– – Oh, I love Medicare.
0:58:36 – Yeah. – Without it,
0:58:38 let me clear this idea. – And Medicaid,
0:58:40 frankly, which I mean, states are expanding,
0:58:42 even Republican states at a rapid pace
0:58:45 and seeing incredible feedback from it.
0:58:47 And we talked about it, wasn’t the program
0:58:52 that your data’s using, Medicaid program?
0:58:54 – Yes, the home health care, yeah.
0:58:57 Yeah, I don’t, what I don’t understand.
0:59:02 – So they’re gonna go snap food benefits.
0:59:05 It doesn’t sound like anyone’s talking
0:59:07 about the child tax credit,
0:59:08 which was one of the things they said they were gonna do.
0:59:12 It’s just a lot of cuts versus helping people out
0:59:15 to cut child poverty in half, but–
0:59:17 – So my idea has always been,
0:59:19 or one of them around health care,
0:59:22 is lower Medicaid eligibility by a year,
0:59:25 every year for the next 44 years
0:59:29 until basically you do, you basically get away–
0:59:31 – The way of the universal.
0:59:34 – 100%, people love, people love Medicaid.
0:59:37 And when you look at, I mean,
0:59:40 we didn’t talk about the United health care issue.
0:59:42 – Oh my God, yeah.
0:59:44 – That’s gonna spawn a very,
0:59:46 or already has a very interesting conversation
0:59:49 around the fact that 40% of Americans
0:59:53 have some sort of medical debt related to dental
0:59:56 or traditional medical debt that impacts them
0:59:57 and their family.
1:00:00 This is, I think that’s been actually the tsunami
1:00:04 we didn’t see coming in terms of political discourse.
1:00:05 Any thoughts?
1:00:08 – Yeah, well, I would love to, we don’t have time.
1:00:13 But I was really disturbed to see
1:00:15 the glorification of this murder
1:00:19 and then people doxing other health care CEOs.
1:00:22 And I understand we need tremendous reform.
1:00:25 And some of these stories are absolutely harrowing.
1:00:27 And I realized how lucky I am
1:00:31 to have the health care problems that I do.
1:00:32 ‘Cause I have some, right?
1:00:35 I’m getting bills constantly first off,
1:00:36 giving birth is still expensive
1:00:39 even when you have platinum insurance and all of that.
1:00:42 But obviously nothing compares to kids getting
1:00:46 their chemo rejected and whatever people have to go through
1:00:48 on a monthly basis with these people.
1:00:53 But I thought it brought out some of the worst sides
1:00:56 of the American populace looking at the reaction to that.
1:00:58 What about you?
1:01:00 – Over on Pivot Care and I were both saying,
1:01:03 this is the wrong way to go about having a conversation
1:01:04 and we’re horrified by it.
1:01:06 And I got a lot of feedback.
1:01:08 It sort of resonated and said,
1:01:10 spoken like someone who’s overinsured
1:01:13 or can afford health insurance.
1:01:16 And some of the memes were just so puncturing, right?
1:01:18 Like empathy is outside my coverage.
1:01:23 And the reality is which,
1:01:25 and this is no way justifies murder,
1:01:27 but which health insurance company
1:01:30 has the greatest percentage of rejected claims?
1:01:31 You guessed it, UnitedHealthcare.
1:01:34 – By a large part, it was like 20% more.
1:01:39 And the reality is when you look at how a lot
1:01:41 of these insurance companies have increased earnings
1:01:42 over the last five or 10 years,
1:01:46 it’s coming with algorithms and legal justification
1:01:49 for identifying who is less likely to push back
1:01:52 and rejecting claims.
1:01:55 And it just goes, for me, it goes to the same place.
1:01:56 I never used to think this,
1:02:00 but I look at the UK system and the NHS has real issues,
1:02:01 mostly around underfunding right now
1:02:03 because they’re not able to add a quarter of a trillion dollars
1:02:07 in four minutes post an earnings call in video.
1:02:12 But I like the idea of nationalized healthcare
1:02:15 for the 80 or 90% that want to use it
1:02:17 and then having a private layer on top
1:02:19 for people who want better service.
1:02:23 The bottom line is this is just an industry
1:02:26 where the profit motive begins to turn healthcare
1:02:27 into sick care.
1:02:30 And you’re going to have the same thing
1:02:31 in any capitalist environment
1:02:33 that is not perfectly regulated as this is not.
1:02:37 You have regulatory capture among corporations
1:02:38 and the top 10% who can afford it
1:02:40 have the best healthcare in the world
1:02:43 and the bottom 90 are being squeezed economically
1:02:45 and the amount of despair and anxiety,
1:02:48 the US healthcare system is causing people.
1:02:49 At some point we’ve got to realize
1:02:54 that regulatory capture around our food supply system,
1:02:57 tremendous stress and anxiety around,
1:03:00 oh, the bad news is your wife has lung cancer,
1:03:02 the worst news is you’re going to go bankrupt.
1:03:04 At what point does our healthcare system,
1:03:08 at some point for the bottom 50%,
1:03:09 if not the bottom 90%,
1:03:11 at some point do we have to realize
1:03:13 they’re the problem, they literally are the problem.
1:03:16 They’re creating more anxiety, obesity,
1:03:19 high blood pressure, deaths of despair.
1:03:20 We’re going to lose 45,000 people to suicide.
1:03:22 I’d like to know how many of those people
1:03:25 would cite financial strain, specifically medical debt,
1:03:28 which is now the number one cause of bankruptcy in America.
1:03:31 How much death by suicide is that cause?
1:03:34 So my prediction, I have two predictions,
1:03:36 one’s a domestic one.
1:03:38 I think the debate and the resurfacing
1:03:42 of regulatory capture and the for-profit US model
1:03:46 around US healthcare that has resulted in us paying $13,000
1:03:51 per individual versus 65 to 8,500 for other G7 countries
1:03:56 with shorter life expectancy, more anxiety and more obesity
1:03:58 is just isn’t, it just isn’t working.
1:04:00 That’s going to be the debate and the big discussion
1:04:02 we weren’t expecting at this moment.
1:04:05 And then on a geopolitical level,
1:04:07 I think we’re going to see a revolution in Iran.
1:04:12 I think Hamas had 70% support of Palestinians.
1:04:15 The ruling party in Iran does not have nearly that support.
1:04:18 It has a minority of people who supported.
1:04:21 It’s actually, Iran’s actually a very young country.
1:04:23 And there are a lot of people, I think,
1:04:24 who are waiting to see weakness,
1:04:28 which they have observed over the last couple of weeks
1:04:30 with the fall of Assad and all of the Iranian proxies
1:04:33 having kind of their being kneecapped.
1:04:37 I think it’s going to give a lot of license and backbone.
1:04:41 I bet there’s a lot of entities in Iran right now
1:04:43 who are thinking, is this our moment?
1:04:47 I think we’re going to see a revolution
1:04:50 or a rebellion similar to what we’ve seen
1:04:52 in Syria and Iran in 2025.
1:04:54 Yeah, I didn’t realize we were doing global ones,
1:04:56 but I like that one.
1:04:59 Oh my God, I feel shamed, I feel shamed.
1:05:02 No, I just, no, I like it, it’s good.
1:05:03 I think it’s really good.
1:05:04 I’m just curious with all of this,
1:05:08 like where Israel fits in
1:05:12 and whether a new Iranian regime, if such a thing happens,
1:05:14 where they are in terms of relations with Israel,
1:05:16 because the big accomplishment
1:05:18 from the first Trump administration for me
1:05:20 was the Abraham Accords.
1:05:23 And I hope that we see further normalization
1:05:27 of relations with Israel as-
1:05:29 The kingdom will go first, I think.
1:05:30 Well, yeah.
1:05:32 Jared’s already on the WhatsApp about that, so.
1:05:33 Oh, is that right?
1:05:35 I don’t know, I just think it’s crazy
1:05:39 that he made $2 billion off of Saudi
1:05:41 and was WhatsApp-ing about it.
1:05:42 Yeah, he raised $2 billion.
1:05:43 It’s not fair to say he’s made it so far.
1:05:45 We’ll see what he’s raised.
1:05:47 Why are you defending Jared Kushner all the time?
1:05:48 He was my student.
1:05:49 I don’t care, you’ve probably had a lot of students.
1:05:50 He was my student.
1:05:51 All right, fine.
1:05:53 Jared and Ivanka, they’re super nice.
1:05:53 They’re super nice.
1:05:55 And his brother, the brother, Josh Kushner,
1:05:57 is a total gangster, he’s a great VC.
1:05:58 I know, Carly Klaus is hot.
1:05:59 Yeah.
1:06:00 Oh, yeah, come on.
1:06:01 That counts for a lot.
1:06:02 Yeah, and they’re liberals.
1:06:04 There you go, all right, that’s all for this episode.
1:06:06 Thank you for listening to “Raging Moderates.”
1:06:08 Our producers are Caroline Shagrin and David Toledo,
1:06:10 our technical directors, Drew Burroughs.
1:06:12 You can find “Raging Moderates” on its own feed
1:06:13 every Tuesday.
1:06:14 That’s right.
1:06:16 What a thrill, “Raging Moderates.”
1:06:17 Never mentioned that before.
1:06:19 Can’t bring that up enough.
1:06:21 “Raging Moderates” on its own feed,
1:06:24 please follow us wherever you get your podcasts.
1:06:26 (upbeat music)
1:06:36 [BLANK_AUDIO]

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0:01:52 Today’s number, 170,000.
0:01:55 That’s how many unique drinks you can order at Starbucks.
0:01:57 True story, I walked into a Starbucks with my ex-wife
0:02:00 and the barista said, “We don’t recommend caffeine
0:02:01 “for pregnant women.”
0:02:03 And she said, “Well, I’m not pregnant.”
0:02:05 And he said, “Well, we do have diet-free lattes.”
0:02:20 Diet-free lattes does not make sense.
0:02:23 Diet-free, sugar-free, fuckin’ A.
0:02:24 I’m in the Cotswolds.
0:02:26 Let’s skip to the manager part.
0:02:28 I’m in the Cotswolds with my dogs.
0:02:29 – Oh, lovely.
0:02:32 – And we’re moving, so my job is to leave,
0:02:35 take the dogs out to the countryside
0:02:39 and stay in some bougie place and just be out of the way.
0:02:40 So here I am.
0:02:43 – Are you staying in a hotel or you got a house?
0:02:44 What’s the deal?
0:02:46 It looks pretty nice that way you got behind you.
0:02:47 – It’s called Heckfield Place.
0:02:49 And I was gonna go to Manor Estelle,
0:02:50 but they didn’t have any room
0:02:53 and then so a farmhouse can put up the dogs.
0:02:55 So Heckfield’s kind of a, it’s the Lexus.
0:02:57 – So a farmhouse has a no dogs policy?
0:03:00 – No, only certain rooms, only certain sheds allow dogs.
0:03:01 They all claim to be dog-friendly
0:03:04 and they have like two room is for dogs.
0:03:05 And I can kind of understand
0:03:06 ’cause don’t tell anyone,
0:03:08 my dogs have ripped up this place, Jesus Christ.
0:03:13 But it’s, we go on long walks.
0:03:15 We’re in the greatest countryside.
0:03:17 I keep thinking I’m gonna run into Ellen.
0:03:19 Supposedly Ellen lives out here
0:03:21 with her wife, Portia de Rossi.
0:03:25 She escaped once she got kicked out of the US basically.
0:03:26 Isn’t the British countryside the best?
0:03:28 It really is incredible, right?
0:03:32 – Let me think.
0:03:34 – Let me pour some tea first.
0:03:38 – Gonna go with a no from you there.
0:03:40 You just don’t really like the outdoors.
0:03:41 I think that’s the problem.
0:03:43 – I don’t like the UK from November to May.
0:03:46 It’s 40 degrees and just wet.
0:03:47 I don’t even see it rain.
0:03:49 I just walk outside and it’s wet.
0:03:50 I’ll give you this.
0:03:51 When I first moved to New York,
0:03:53 people said, oh, there’s beautiful beaches
0:03:55 in Long Island in the Hamptons.
0:03:56 And I thought, I’m from California.
0:03:57 These won’t be beautiful beaches.
0:03:58 And I went out there and found out
0:04:00 that the beaches are beautiful.
0:04:02 People constantly talk about the British countryside.
0:04:03 And I thought, you know, yeah, right.
0:04:05 And I came out here, it is beautiful.
0:04:08 It’s just, it’s dark at 330 today.
0:04:09 – That’s all part of the vibe.
0:04:11 You just got to get involved with that and get on board.
0:04:13 – No, I just wanna listen to Simon and Garfunkel
0:04:14 and self-harm.
0:04:15 It’s just…
0:04:18 – That’s not the vibe.
0:04:22 Simon and Garfunkel, get inside, have some tea.
0:04:24 Head to bed pretty early.
0:04:25 – Yeah.
0:04:26 What do you been up to out here?
0:04:26 We’re always talking about me.
0:04:28 Let’s talk about you, but keep it short
0:04:29 ’cause I’m not that interested.
0:04:30 (laughing)
0:04:32 – Well, speaking of weather,
0:04:33 it snowed for the first time today,
0:04:35 which is pretty exciting.
0:04:36 So New York is getting cold.
0:04:40 And that’s the longest short of it in New York.
0:04:41 – Wow, are you engaging?
0:04:43 (laughing)
0:04:44 Here, he’s a charmer.
0:04:45 He’s a charmer.
0:04:47 Get to the headlines, Ed.
0:04:48 Jesus Christ.
0:04:49 (laughing)
0:04:50 – That’s right.
0:04:52 Let’s start with our weekly review of market vitals.
0:04:54 (upbeat music)
0:05:00 The S&P 500 rose.
0:05:02 The dollar rose on Trump’s tower of threats,
0:05:03 but declined at the end of the week.
0:05:08 Bitcoin hit, wait for it, $100,000 for the first time.
0:05:11 And the yield on tenure treasuries was volatile,
0:05:12 shifting to the headlines.
0:05:14 Sales force shares rose more than 10%
0:05:16 after the company issued higher than expected guidance
0:05:18 for the current quarter.
0:05:22 Revenue also beat expectations up 8% from a year earlier
0:05:24 as the company secured more than 200 deals
0:05:28 for its AI chatbot suite called Agent Force.
0:05:30 Meta is seeking proposals from developers
0:05:33 to construct nuclear power plants.
0:05:34 The initiative aims to get the plants online
0:05:36 by the early 2030s
0:05:39 to help power the company’s data centers.
0:05:43 United Healthcare CEO Brian Thompson was shot and killed
0:05:44 in what the authorities are calling
0:05:46 a brazen, targeted attack.
0:05:48 The incident occurred just before the company’s
0:05:51 highly anticipated investor day in New York.
0:05:54 I don’t really know what to make of this, Scott.
0:05:56 We’ve never covered anything like this.
0:06:00 I guess the first question I’d ask you is,
0:06:04 what do you think this means for United Health?
0:06:07 Like how is United Health supposed to respond
0:06:08 to a crisis like this?
0:06:11 – Well, it’s a tragedy for the family, no doubt about it.
0:06:14 I think United’s gonna be fine.
0:06:17 But what’s come out, which is really interesting,
0:06:20 I found is that the etchings on the casing said,
0:06:21 deny, defend, oppose.
0:06:23 And this is the name of a book
0:06:28 that’s about how insurance companies get out of claims.
0:06:32 And so this appears to be politically motivated
0:06:33 or thematically motivated.
0:06:36 – What’s been shocking to me has been the response online.
0:06:39 And to say there’s been a lack of empathy
0:06:42 as an overstatement, people are circulating memes
0:06:44 and acting as if, kind of quite frankly,
0:06:46 the company and this person had it coming
0:06:50 is the way I read some of the memes I’ve been saying.
0:06:54 And in the US, what you have is a healthcare system
0:06:57 that has, is essentially bankrupting a lot of people.
0:07:00 40% of Americans have some form of debt
0:07:03 as a function of dental or medical bills
0:07:05 that they can’t pay off.
0:07:08 And the largest source or largest cause of bankruptcy
0:07:10 is medical debt.
0:07:11 And there’s just no getting around it.
0:07:13 The American healthcare system, in my view,
0:07:15 is optimized for the top 10%.
0:07:17 If you’re in the top 10%,
0:07:19 you have the best healthcare in the world.
0:07:21 If you’re in the bottom 90%,
0:07:23 you have expensive but bad healthcare.
0:07:25 When income inequality gets to the point it’s at,
0:07:27 it usually self-corrects, but it self-corrects
0:07:30 in a small number of ways,
0:07:31 either through war, famine, or revolution.
0:07:34 And I think this is an example.
0:07:37 When you have the CEOs of companies being murdered,
0:07:40 and it looks like it was politically motivated,
0:07:41 it looks like it has some connection
0:07:44 or link to the company and a viewpoint
0:07:46 around the behavior of these types of companies,
0:07:49 the healthcare system in the United States,
0:07:51 in this in no way justifies violence,
0:07:53 but it does create a lot of despair
0:07:57 and disability in our economy.
0:07:59 – What do you think the conversations
0:08:01 in the boardroom are right now?
0:08:04 Like, do you think if this is indeed
0:08:07 politically motivated and it looks like it was,
0:08:09 do you think the boardroom is like,
0:08:12 okay, people are angry,
0:08:14 we’re gonna change the way we do things?
0:08:19 Or is the boardroom thinking we need to up our security?
0:08:21 I mean, just some statistics here.
0:08:25 Meta spends $23 million on protecting
0:08:28 the personal safety of Mark Zuckerberg,
0:08:29 and Google spends $7 million.
0:08:32 So a lot of other companies know
0:08:35 that people are kind of out to get their CEOs.
0:08:37 And United Health, I don’t believe,
0:08:42 spends any money on executive personal safety or security.
0:08:46 So like, what do you think is the response
0:08:49 at the board level from United Health
0:08:51 when something like this happens?
0:08:54 Does it actually force them to sort of take a look
0:08:56 at their business and how they make money,
0:08:59 or is it more like we need to do a better job
0:09:00 of protecting our executives?
0:09:02 – Yeah, I would imagine the first reaction is,
0:09:04 we need to keep our executives safe.
0:09:06 Those numbers that you quoted around CEO security
0:09:08 are about to explode.
0:09:09 Now it’s a good business to be in right now,
0:09:11 offering executive security.
0:09:14 This isn’t gonna be a moment of reflection for them.
0:09:16 Like most for-profit companies,
0:09:17 they do whatever they can to try
0:09:21 and maximize their profits and rationalize.
0:09:22 They’re like, I know, let’s get some insulin,
0:09:23 let’s put a brand on it,
0:09:25 and let’s quadruple the price or whatever it is.
0:09:28 But they’re not gonna say we need to really think
0:09:31 through healthcare in the United States.
0:09:33 – Yeah, exactly.
0:09:34 But that’s what everyone online
0:09:35 seems to think is happening here,
0:09:38 is like all those trolls that you mentioned,
0:09:41 they’re like, oh yeah, well, someone finally showed them.
0:09:43 – This doesn’t help the problem, it makes it worse.
0:09:46 It makes it seem like the people who,
0:09:48 I mean, this is just in any way,
0:09:53 if the murder of a 50 year old man with a family
0:09:56 is rationalized, he had a pretty serious chaos.
0:10:00 And just the fact that these folks need security now
0:10:03 is really disappointing.
0:10:05 So the short-term, it’s just gonna be,
0:10:06 those numbers are gonna go way up,
0:10:09 you’re gonna see security across every,
0:10:11 I gotta imagine every CEO of a health company
0:10:14 is saying, do I need security now?
0:10:16 Should it inspire a moment of reflection
0:10:18 of why does everybody hate me
0:10:20 or why are there so many people that hate me?
0:10:22 Yeah, will that happen?
0:10:26 No, and the guilty party here is not the CEO of this company,
0:10:28 it’s the guilty party is the electorate
0:10:32 who continue to let their elected representatives
0:10:34 be weaponized by lobbyists from the pharmaceutical
0:10:35 and the healthcare industrial complex
0:10:38 such that they can charge more for pharmaceuticals,
0:10:40 they can charge more for diabetes medication,
0:10:43 they can let insurance companies,
0:10:45 denial sorts of claims.
0:10:48 So the US healthcare system is the most susceptible
0:10:49 business in the history of business,
0:10:51 it’s raised prices faster than inflation,
0:10:54 at 17% of GDP, it used to be 5%,
0:10:56 I think as recently as 1962.
0:10:59 So in 60 years, it’s now almost four times
0:11:00 the amount of our government,
0:11:03 it’s the biggest business in the US.
0:11:05 And we need to turn folks into consumers again
0:11:08 where they actually look at the price and they demand more.
0:11:10 But this is gonna,
0:11:12 it’s gonna inspire a lot of very interesting conversations,
0:11:13 I’ll just leave it at that.
0:11:16 – Let’s move on to Salesforce, I think it’s now.
0:11:19 – There we go, Salesforce, the agentic layer.
0:11:22 They’re killing it, they’re wreaking,
0:11:25 are getting efficiencies internally,
0:11:28 their quarterly earnings increased 8%,
0:11:32 which isn’t amazing, but it beat expectations
0:11:36 and their operating margins hit their highest number ever.
0:11:39 And current quarter guidance came in strong overall,
0:11:42 full year guidance for revenue growth stayed the same.
0:11:43 Is this a little bit of rah-rah?
0:11:45 Yeah, because of demand for the agent force
0:11:49 was really as revolutionary as Mark Benioff described it,
0:11:51 they probably would have guided up.
0:11:54 I mean, NVIDIA says this is revolutionary
0:11:55 and we’re taking our guidance up,
0:11:57 they’re like, this is amazing, it’s revolutionary,
0:11:59 but we’re gonna, we’re maintaining guidance.
0:12:01 – Yeah, I think the story of this earnings call was AI,
0:12:04 they mentioned the word AI 21 times
0:12:07 and they mentioned the word agent force 67 times.
0:12:11 So they are very optimistic about AI.
0:12:13 The question is whether that will actually pan out
0:12:15 in the numbers themselves,
0:12:18 because, you know, they talked a lot about agent force
0:12:20 and they said that they’ve signed a lot of deals
0:12:22 with agent force.
0:12:24 And Salesforce only launched agent force a month ago,
0:12:25 so we don’t know yet.
0:12:27 So I think the thing that we’ll wanna keep an eye on
0:12:31 over the next few quarters is whether or not agent force,
0:12:34 this new AI bot army is hype,
0:12:37 or if it actually is gonna have a meaningful impact
0:12:39 on revenue, because, you know,
0:12:42 just saying over and over again, it’s great, it’s great,
0:12:44 it’s great, we’re so excited to deploy it,
0:12:46 that’s just not really,
0:12:48 that’s not really enough for Wall Street, I don’t think.
0:12:53 – And let’s just wrap up here with Metta’s new proposal
0:12:55 for nuclear power plants,
0:12:57 or at least they’re seeking proposals
0:12:59 from other development companies
0:13:01 to construct nuclear power plants.
0:13:03 Do you have any initial thoughts on that?
0:13:05 – Well, it’s interesting, these companies are now
0:13:06 kind of taking on the role of government
0:13:08 in the sense that the only people who have the capital
0:13:10 to build nuclear power plants,
0:13:13 who see to be the government or a giant utility,
0:13:16 there was government regulated and given monopoly.
0:13:18 I mean, nuclear has just had such a terrible brand.
0:13:20 I remember I was in fixed income at Morgan Stanley
0:13:23 and going up to Washington for a dinner,
0:13:25 and there was something called the Washington Public Power
0:13:27 Supply, which was supposed to build a nuclear power plant,
0:13:29 it overran and it ended up being just this giant hole
0:13:31 in the ground, I’m not sure if it ever finished or not,
0:13:34 and they used to call the bonds, whoops, bonds,
0:13:38 and there’s just been, it’s been so out of favor,
0:13:41 and all of a sudden it is white hot,
0:13:45 because the friction in AI isn’t people, it isn’t customers,
0:13:47 it’s something unusual, it’s energy to power it all,
0:13:49 and we said in our prediction stack
0:13:52 that nuclear would be the technology of 2025.
0:13:53 Why nuclear?
0:13:56 It’s reliable, efficient, carbon-free, and powerful.
0:13:58 One nuclear plant produces as much energy
0:14:03 as three million solar panels or 430 wind turbines,
0:14:07 and there’s just few ways to kind of spin up
0:14:09 in three to five years,
0:14:12 something that could potentially power 750,000
0:14:16 to 3 million homes, which is what AI is gonna require.
0:14:18 Meta’s energy consumption increased 1,500%
0:14:22 in the last 10 years, and in August,
0:14:23 Zuckerberg said Lama IV,
0:14:25 Meta’s next generation of their AI model
0:14:28 will need 10 times more compute to train
0:14:29 than the previous generation.
0:14:31 – I think the thing that jumped out to me
0:14:33 is the point that you made about the idea
0:14:35 that you have meta basically taking
0:14:38 on the role of the government at this point,
0:14:40 because the thing that Jigar Shah told us,
0:14:43 and this was the head of the loan office
0:14:45 at the Department of Energy,
0:14:48 is he said we need the government to be funding this
0:14:51 because we’re the only ones with the capital
0:14:54 to make these risky investments.
0:14:56 I mean, you look at Vogel,
0:15:00 the new big nuclear plant in Georgia that was just built,
0:15:03 that thing cost $35 billion to build,
0:15:07 and it went $17 billion over budget.
0:15:10 So these things are extremely capital intensive,
0:15:12 but to your point, it’s like,
0:15:15 actually there is another entity
0:15:17 that can make these forward-leading investments,
0:15:21 and it is big tech, it’s Meta, it’s Amazon, it’s Google,
0:15:24 it’s potentially Apple at some point,
0:15:28 and I guess where my mind goes,
0:15:32 it feels a little bit dystopian
0:15:35 that we’re at a place in society
0:15:38 where the two gatekeepers of the future
0:15:41 of our energy industry are one,
0:15:43 the government, and then two,
0:15:45 like a handful of tech executives.
0:15:47 Like the idea that Mark Zuckerberg,
0:15:49 who originally was the guy
0:15:51 who built a social media network,
0:15:56 and now he’s kind of shepherding the direction
0:15:59 of clean energy in America,
0:16:01 which will just give him even greater,
0:16:04 and an even tighter grip on all of the infrastructure
0:16:07 in the US from advertising to computing power,
0:16:10 and now to just pure raw energy.
0:16:15 Maybe I’m being a little bit, you know, tin-hat,
0:16:16 but it just feels like
0:16:19 we’re going into a slightly scary place.
0:16:21 – Well, you gotta ask yourself, what’s next?
0:16:23 They control the news or can elect a president?
0:16:27 You’re just figuring this out, Ed?
0:16:28 Wait, let me get this.
0:16:30 Your thesis is that tech executives are growing
0:16:32 too powerful that there might be a problem here.
0:16:35 Huh, really?
0:16:37 It’s almost, this is the least mendacious thing
0:16:38 that Meta’s done.
0:16:41 I mean, if they, I don’t know if there’s a way
0:16:43 for the government to get in the middle and say, okay,
0:16:45 it’s like when they build a building,
0:16:49 or a developer wants to build a skyscraper in downtown,
0:16:50 San Francisco, they say, fine,
0:16:52 but it’s not gonna be as big as you want,
0:16:54 and you have to build a park,
0:16:58 or 10% of the residences have to be for artists
0:17:01 or whatever, for people raising allergy fee,
0:17:03 labradoodles or whatever.
0:17:05 I think this is a good thing.
0:17:08 I think that AI, similar,
0:17:10 one of the things that always bothered me about crypto
0:17:13 is it seems like we have the self-invented
0:17:14 incremental usage of electricity
0:17:16 that’s equivalent to Argentina,
0:17:19 and that it’s, I’m not sure that we really needed that,
0:17:22 but this is gonna make that energy consumption
0:17:24 look like a walk in the park.
0:17:27 This, in my view, is the most exciting technology
0:17:29 outside of GLP-1 drugs.
0:17:31 I think it’s really exciting,
0:17:34 and I’m glad they’re making these sorts of investments.
0:17:36 The key is, do we need some sort of oversight
0:17:40 to make sure they don’t begin to sequester all power
0:17:41 to a small number of companies,
0:17:43 and then use that as a weapon
0:17:45 where other companies are basically
0:17:47 dealing with brownouts every day.
0:17:49 We’ll be right back after the break
0:17:51 with a look at how Amazon might start competing
0:17:53 with Nvidia.
0:17:54 If you’re enjoying the show so far,
0:17:57 hit follow and leave us a review on Proficy Markets.
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0:21:08 Amazon is building an AI supercomputer
0:21:10 known as an ultra-cluster that will be powered
0:21:12 by hundreds of thousands of its own
0:21:14 Tranium 2 semiconductors.
0:21:17 The chip cluster will quintuple the processing power
0:21:20 for AI startup Anthropic, which recently received
0:21:23 an additional $4 billion investment from Amazon.
0:21:25 And when the cluster goes live next year,
0:21:28 it will be one of the largest AI training clusters
0:21:29 in the world.
0:21:33 So Scott, I think the most important thing here
0:21:35 is the fact that Amazon is deciding
0:21:38 to build a giant supercomputer, not with Nvidia chips,
0:21:42 but with its own chips, these Tranium 2 chips.
0:21:44 Your thoughts on this news?
0:21:47 – I was really, well, one, you know,
0:21:51 I haven’t participated in the kind of the Bitcoin explosion
0:21:54 and I haven’t really participated in the AI explosion.
0:21:56 And I was happy to see this because I own Amazon stock
0:21:59 and I just thought this was brilliant and really exciting.
0:22:02 And I love the idea of Nvidia having a competitor.
0:22:05 I wish it was a smaller company,
0:22:08 but it reminds me that some kid or some PhD student,
0:22:12 near too young to remember this 10 or 20 years ago,
0:22:14 strung together a bunch of Nintendo game sets
0:22:17 or game consoles and created like a supercomputer
0:22:19 just stringing these things all together.
0:22:21 And this architecture just seems really fascinating.
0:22:24 And as you said, if they can in any way,
0:22:29 in any way, somehow create a credible competitor
0:22:34 around their chips, even in the same universe as Nvidia,
0:22:37 just their operational excellence, their B2B,
0:22:41 their cloud offering, you gotta think they’re gonna take
0:22:44 a trillion dollars of market cap away from Nvidia.
0:22:47 So I thought, wow, this is really exciting
0:22:51 for Amazon shareholders and they’re kind of offering
0:22:55 cost reduction and control by reducing reliance on Nvidia.
0:22:57 Amazon can now lower AI infrastructure costs
0:22:59 for its business customers while gaining greater control
0:23:01 over its supply chain.
0:23:03 I mean, this is, I just thought this was,
0:23:07 you know, whenever you get a company that comes out of nowhere
0:23:09 and becomes the most valuable company in the world,
0:23:13 it’s just imagine, you know, Lake Erie of Blood
0:23:16 being poured into the water and the megalodons that attracts.
0:23:18 And this is attracted one of the scariest megalodons
0:23:21 in the history of business and that is Amazon.
0:23:23 And they have the money to do this.
0:23:26 The firm’s most recent $4 billion investment in Anthropic
0:23:27 included an agreement that Anthropic
0:23:29 would use Amazon’s AI chips.
0:23:34 So the number two in LLMs is about to use Amazon chips,
0:23:37 which will train the chips, they’ll get better on it.
0:23:40 Nvidia stock fell 3%, but that’s not that big a deal.
0:23:43 And just wanna add on here,
0:23:46 Amazon is already trading at a pretty rich valuation,
0:23:48 but it’s potentially gonna get some of that Nvidia
0:23:50 or that GPU magic.
0:23:54 We did a predictions podcast on Pivot
0:23:56 and we asked Anthony Scaramucci, our friend,
0:23:58 to come up with a prediction.
0:23:59 And his big prediction is that he thinks
0:24:03 that IBM is gonna explode because IBM actually has some
0:24:05 really strong IP and scientists around AI
0:24:10 that effectively Watson was the first kind of AI offering.
0:24:11 And then he thinks with their CEO
0:24:14 and their current offering that this stock is gonna explode.
0:24:16 And I thought, wow, that’s a really interesting take.
0:24:18 But it’d be interesting to see what companies
0:24:21 are able to draft off of or kind of become remora fish
0:24:23 on Nvidia and open AI success.
0:24:25 But I just thought this was genius.
0:24:27 I mean, you gotta give it to the folks in Amazon.
0:24:29 This is, I feel like this is a master stroke.
0:24:33 – Yeah, it’s also just like the perfect marketing message too.
0:24:37 Because, I mean, when you think about standard marketing,
0:24:40 the standard play is that you go out in public
0:24:42 and you’ll just like say out loud or you’ll advertise
0:24:45 like we have the best chips in the world.
0:24:47 Or maybe you’ll like have some research report
0:24:50 that says, you know, our chips are, you know,
0:24:52 5% faster than Nvidia’s or whatever.
0:24:55 And that’s what we’ve been seeing most of these chip maker
0:24:57 competitors doing right now.
0:24:59 You just sort of make a statement about your chip.
0:25:01 Ours is more efficient, it’s cheaper, it’s faster,
0:25:04 whatever, then you just hope that the market believes you.
0:25:07 But this is so much more compelling.
0:25:09 Because to go out and build a supercomputer
0:25:13 that is this big and this expensive
0:25:17 with only your own chips, not with Nvidia’s,
0:25:20 implicit in that investment is a belief
0:25:22 that your chips are better than Nvidia’s.
0:25:26 Like it’s the perfect show don’t tell strategy,
0:25:29 which I find so much more compelling.
0:25:31 And I would also assume that the market
0:25:33 is gonna find this a lot more compelling,
0:25:36 especially, you know, the AI companies
0:25:38 who want to use these chips.
0:25:41 And that’s sort of the most important thing here.
0:25:42 So we’ve been talking a lot about
0:25:44 all of these different chip makers.
0:25:47 We talked about Cerebrus who came out and said,
0:25:50 you know, we have the biggest chips in the world
0:25:52 and therefore ours are the best.
0:25:54 And I didn’t really buy it.
0:25:57 And this thing, I’m suddenly like, okay,
0:26:00 this is really gonna shake things up for the first time
0:26:05 in a market where Nvidia has 95% market dominance.
0:26:08 It feels like Amazon could be the first one
0:26:09 to actually disrupt this.
0:26:12 – Well, see above the biggest Megalodon’s
0:26:13 great white sharks in the world
0:26:15 are coming for that 95% market share.
0:26:17 Google, Microsoft, Meta and Apple
0:26:19 are all developing custom AI chips
0:26:22 to reduce their dependence on the market leader.
0:26:24 And then there’s just a suite of AI startups
0:26:26 looking to get a piece of the pie.
0:26:30 You mentioned Cerebrus, there’s Grock, Accelera
0:26:34 and Tensterent, which recently raised nearly 700 million
0:26:36 of new funding from investors, including Bezos.
0:26:41 So there’s a three and a half trillion dollar carcass
0:26:44 that everybody wants a piece of and that’s Nvidia.
0:26:45 – There’s also just this one quote
0:26:48 from the chief executive of AWS,
0:26:50 which I find so compelling
0:26:52 because it’s so understated and so simple
0:26:55 compared to all of the other marketing messages
0:26:56 of these other chip startups.
0:27:00 He said, quote, today there’s really only one choice
0:27:02 on the GPU side.
0:27:04 And we think customers would appreciate
0:27:06 having multiple choices.
0:27:07 That was the statement.
0:27:10 It’s just so simple and so compelling.
0:27:10 – Yeah, there you go.
0:27:13 And kudos to them.
0:27:15 Kudos to them, they’re out first, right?
0:27:15 – Yeah, exactly.
0:27:18 But you mentioned some of those other companies
0:27:20 that are building.
0:27:23 So you talked about Google,
0:27:25 they’re working on their, what’s known as their
0:27:28 Tenster processing units.
0:27:30 Microsoft is working with open AI on chips.
0:27:33 Meta is working on a chip called Ultimus.
0:27:38 These companies are all not dipping their toes,
0:27:42 but maybe dipping their ankles into chip making.
0:27:46 But the wrinkle is that they all still
0:27:49 have big partnerships with Nvidia.
0:27:52 Like they all still heavily rely on Nvidia.
0:27:54 And so we’re getting to this point now
0:27:58 where they’re all working with Nvidia because they have to.
0:28:01 But on the side, they’re starting to build out
0:28:03 their own businesses because they all recognize
0:28:06 well, we rely on Nvidia too much.
0:28:08 So I would be interested to get your perspective
0:28:11 on how is that all going to play out?
0:28:13 And have you ever seen a dynamic before
0:28:17 where sort of your friends with the big company,
0:28:19 but then you start trying to nip it their heels
0:28:21 and ultimately you’re trying to compete with them?
0:28:22 – Yeah, it was a similar dynamic back in,
0:28:24 I think in the 90s.
0:28:27 I think Apple got sick of being so reliant on Intel
0:28:29 and they started developing their own chips.
0:28:32 So yeah, you have seen this before.
0:28:34 Nvidia clearly doesn’t have the power
0:28:36 that they’d be worried about antitrust concern.
0:28:37 If Nvidia wanted to play hardball, they’d say,
0:28:39 well, if you’re in the business of building your own chips,
0:28:40 we’re out.
0:28:42 I think that would probably create antitrust scrutiny
0:28:44 given their dominance in the market.
0:28:48 So all of these guys, every year,
0:28:50 they spend more and more money on Nvidia.
0:28:51 They’re waiting in line.
0:28:53 They’re price takers.
0:28:54 These folks are not used to being price takers.
0:28:57 These folks are the biggest,
0:29:00 they’re the biggest gorilla in the room.
0:29:01 And when they meet with their vendors,
0:29:02 they’re used to saying,
0:29:05 no, I want you to cut your prices by 10% this year
0:29:06 and I need it faster
0:29:08 and I’m gonna delay my payment terms.
0:29:10 They’re used to dictating terms.
0:29:11 And so when a company shows up
0:29:13 and starts dictating terms to them,
0:29:16 they’re just not used to it.
0:29:19 They can’t imagine what world they’re in all of a sudden.
0:29:22 So I go, wait, all of a sudden I’m not the hot girl
0:29:24 at the party and I have to kiss your ass
0:29:27 and you’re ignoring my texts.
0:29:27 I mean, it’s just,
0:29:32 this is an alien place for these guys.
0:29:33 – We’ll be right back after the break
0:29:36 with a look at an interesting new take on product launches
0:29:37 from Open AI.
0:29:51 – The Capital Ideas podcast now features a series
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0:29:56 Through the words and experiences
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0:31:01 – Support for the show comes from Alex Partners.
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0:32:16 – We’re back with Proficy Markets.
0:32:18 OpenAI has unveiled a new initiative for December
0:32:21 called 12 Days of OpenAI,
0:32:22 where it’ll showcase upcoming products
0:32:24 through live streams held on its website
0:32:26 across those 12 days.
0:32:28 The event has already gained traction
0:32:30 with the company’s tweet about the initiative
0:32:33 racking up 2.6 million views and attracting coverage
0:32:37 from more than 10 different media outlets.
0:32:41 Scott, we’ve been talking a lot about public relations
0:32:44 and investor relations and how that’s all changing this year.
0:32:48 What’s your take on OpenAI’s strategy here,
0:32:50 specifically the fact that they are deciding
0:32:52 to go into live streaming?
0:32:55 – Yeah, so first off, I hear the term 12 Days of OpenAI
0:32:57 and I wanna like go into the garage,
0:32:59 close the door, turn on the car.
0:33:02 I mean, 12 Days of OpenAI.
0:33:04 It’s like, okay, couldn’t they have gone
0:33:05 with like three days of open?
0:33:09 I mean, so two weeks of this shit.
0:33:11 Anyways, you’ve been talking a lot about this
0:33:14 and how the earnings call needed to be disrupted
0:33:16 for investor relations.
0:33:17 And whether I think it was Alexander Karp
0:33:21 walking around live stream, Instagram,
0:33:23 going direct to kind of retail investors.
0:33:24 There’s a ton of innovation
0:33:26 around investor communications right now.
0:33:28 And this isn’t investor communications
0:33:30 as much as it is a product launch.
0:33:33 And Apple sort of redefined the tech product launch
0:33:37 and they literally ripped off fashion brands.
0:33:39 They said, all right, highly curated,
0:33:43 highly orchestrated, lighting, celebrities, big reveal.
0:33:45 And instead of having Giselle Boonchen come down the aisle,
0:33:48 we have Steve Jobs, he has a uniform.
0:33:50 I mean, the lighting, the production value
0:33:52 is capturing a perfect moment in time.
0:33:56 And it’s now moved to, they’ve kind of zagged
0:33:58 to their zig and that they want it to be more authentic.
0:34:00 I’m sure they rehearsed, but they want it to feel raw
0:34:02 and they want it to feel genuine.
0:34:05 And bottom line is this is a prediction.
0:34:08 I bet more people watch this product launch
0:34:11 than watch CNN during those days.
0:34:13 This will get, this will get more viewership
0:34:17 from a more valuable audience than any cable network.
0:34:20 Maybe not Fox, ’cause Fox still gets a lot of people.
0:34:21 There’s a lot of people when oxygen takes,
0:34:24 saying, ah, she’s a looker.
0:34:28 I love that bread bear.
0:34:30 I’d like to grab a steak.
0:34:33 He reminds me of a guy I served a nom with.
0:34:37 Anyways, what was going with that?
0:34:40 I think this is gonna be hugely popular
0:34:43 and redefine product releases.
0:34:45 – And I think the main takeaway for me
0:34:48 is that I think that companies
0:34:49 should be thinking about their earnings
0:34:54 and their product launches less as just press releases
0:34:58 and announcements, but more as content.
0:34:59 Like ultimately, that’s what you’re trying to do.
0:35:00 You’re trying to produce content
0:35:02 in the same way that we’re trying to produce content
0:35:05 on this podcast that is engaging
0:35:07 and that gets people excited
0:35:09 and that gets people interested.
0:35:11 And you’re not gonna do that
0:35:13 with just a simple press release.
0:35:15 The way you’re gonna do that is with videos
0:35:17 and with podcasts.
0:35:19 And I think it’s just very impressive
0:35:22 that OpenAI has really led this transformation here.
0:35:25 And they said, well, why don’t we do a live stream?
0:35:27 I mean, that’s sort of at the forefront
0:35:30 of the transformation of content right now.
0:35:34 So I’m very impressed by the fact
0:35:39 that they’re taking this route for a product launch.
0:35:40 I would like to just get your thoughts
0:35:43 on live streaming as a medium,
0:35:46 which I’m just finding very fascinating right now.
0:35:50 Like I feel like live streaming was not very long ago
0:35:51 with this very niche concept,
0:35:54 this very niche kind of weird corner of the internet.
0:35:57 The idea of a live streamer was not something
0:36:00 that held much cultural currency at all.
0:36:04 But in the past year, we’ve seen like an explosion
0:36:06 of live stream, live streamers and live streamers.
0:36:09 I mean, we’ve seen like Aidan Ross,
0:36:10 who is a big live streamer
0:36:13 who ended up interviewing Donald Trump
0:36:15 before he was elected.
0:36:16 And now Aidan Ross is all over the news.
0:36:18 And we’ve seen Kai Senat,
0:36:21 who has built this gigantic following on Twitch.
0:36:25 His last live stream reached 50 million viewers,
0:36:29 which is around 15% of the United States population.
0:36:31 And then here’s this one stat that blew me away.
0:36:34 More than a quarter of internet users today
0:36:37 watch a live stream every week.
0:36:40 So I would like to just get your take
0:36:44 on live streaming as a medium.
0:36:47 Why do you think we’re seeing this explosion right now
0:36:48 in media?
0:36:49 – The other thing I don’t know,
0:36:51 I kind of feel like live streaming
0:36:53 is to original scripted television or video
0:36:56 or just streaming what podcasting is to radio.
0:36:58 And that is initially out of the gates.
0:37:00 An old guy like me says, what’s the difference?
0:37:02 It’s just radio, no podcasting is different.
0:37:05 Live streaming, I feel as if, I hear this and think,
0:37:06 okay, we should do a live stream, right?
0:37:08 Like everybody else, but I’m sure it’s hard.
0:37:11 – I mean, you did a live stream like last week, right?
0:37:12 You did it on section.
0:37:13 – Actually, I did it earlier today.
0:37:16 I’m just not thinking correctly.
0:37:18 I did a live stream in AMA for a section.
0:37:23 Yeah, look, it’s been around a while.
0:37:26 I guess celebs, I don’t know what the,
0:37:28 I guess live streaming is going B to C
0:37:30 where it’s mostly been B to B.
0:37:33 You know, section, we did a live stream on AI ROI.
0:37:35 What a name!
0:37:36 And 10,000 people registered
0:37:40 and I think 3,500 showed up, but that’s a good audience.
0:37:43 I guess when you have Robert Downey Jr. or Terry Crew show up,
0:37:45 I’d be kind of curious to understand
0:37:48 what is the zeitgeist, what’s working, what isn’t.
0:37:50 But it just feels like a,
0:37:52 again, it’s all kind of the same thing.
0:37:55 And that is if you’re walls and AOC
0:37:57 and you go on a live stream,
0:37:59 you’re basically going direct to consumer
0:38:00 and you’re cutting out the means of production.
0:38:05 And the means of production is CNBC or Fox or CNN.
0:38:07 And so you can do it much more inexpensively.
0:38:09 You get to dictate the terms of it.
0:38:14 Any economic rewards, you get to read the majority of it.
0:38:16 So it just feels like it’s another collapse
0:38:18 of the media industrial complex
0:38:20 where the creators get to garner more of the rewards
0:38:21 because it’s taking advantage of the infrastructure
0:38:23 called DARPA and the internet,
0:38:26 as opposed to trying to kiss the ass
0:38:28 of some means of production that gets in the middle,
0:38:31 whether it’s Netflix, whether it’s CNBC,
0:38:33 whether it’s Comcast, whether it’s Disney,
0:38:35 and you can just go straight to these folks.
0:38:38 And so it strikes me as if it’s gonna follow
0:38:41 the arc of podcasting, it’s gonna grow substantially.
0:38:43 It felt like it had a moment a few years ago with gaming
0:38:44 and then it kind of went quiet again
0:38:46 and now it feels like it’s coming back.
0:38:48 – Yeah, it’s something that I would add onto that,
0:38:51 that I’ve been thinking a lot about recently in content.
0:38:54 As I’ve said to you before,
0:38:56 I’ve just become fascinated with YouTube.
0:39:00 And I look at what’s happening with our YouTube channel
0:39:02 which is growing enormously.
0:39:05 I mean, we’re getting like hundreds of thousands of views
0:39:06 on our videos now.
0:39:08 And I’ve been sort of wondering why is that?
0:39:13 Like why would you opt to watch this podcast on YouTube
0:39:16 versus just listen to it in your headphones?
0:39:20 And I don’t think it’s because people want to see our faces,
0:39:22 I don’t think that adds that much to it.
0:39:23 So I was thinking about this.
0:39:27 I think the big differentiator with YouTube
0:39:29 and with live streaming is the comment section.
0:39:33 I feel like having a comment section
0:39:36 is just an entirely different experience
0:39:39 because you get to share your own opinions.
0:39:42 You get to hear what other people think.
0:39:45 And suddenly the experience transforms
0:39:47 from not just consumption,
0:39:51 but it actually becomes like a social experience.
0:39:54 And so what I’m finding with live streams right now,
0:39:57 my take is it feels like live streaming
0:39:59 is the comment section on steroids.
0:40:03 Like you’re getting to participate in the content
0:40:06 with a group of people who are watching it at the same time.
0:40:10 And I’m starting to think that any form of content
0:40:15 that doesn’t figure out a way to interact with the audience
0:40:19 in a meaningful way where the audience can comment
0:40:23 and have an opinion and engage interactively.
0:40:26 I’m starting to think that any of that content
0:40:27 is really just behind the ball.
0:40:28 – It’s such an interesting point.
0:40:30 You just inspired an analogy,
0:40:31 and I don’t know if it’s the correct one,
0:40:34 but the reason you go to Premier League games,
0:40:36 during COVID they didn’t have fans
0:40:38 or they had a limited number of fans.
0:40:41 And they’re just, you watch on TV and it’s the same players
0:40:42 and it’s the same rules in the same game.
0:40:47 And it just fell flat without the fans in the stadium.
0:40:50 And I wonder if this is effectively a game,
0:40:52 traditional video now is a game where there’s no fans.
0:40:57 And that is when I was on this AI ROI live stream,
0:40:59 I occasionally would stop and read a comment.
0:41:01 And we tried to interact with the audience
0:41:03 and it just had such a nice vibe.
0:41:06 And the thing I love about Premier League is you go
0:41:07 and the fans are just amazing.
0:41:10 It creates such, they’re so engaged in everything,
0:41:13 you know, screaming and booing at every little thing
0:41:18 and, you know, making fun of people and they’re hilarious.
0:41:21 But to your point, maybe that’s what this is.
0:41:23 Maybe the next level of kind of interaction
0:41:26 and dope and entertainment is, all right, you have two streams.
0:41:28 One stream is the content.
0:41:32 And the second stream is the fan reaction to the content.
0:41:34 Because what I noticed myself doing today
0:41:36 on this live stream was occasionally
0:41:38 when someone put something really interesting or funny
0:41:40 or asked a question in the chat,
0:41:42 I would sort of selectively pull stuff out and highlight it.
0:41:45 – And think how fun that is for the viewer.
0:41:48 I mean, it brings on a whole different dimension,
0:41:50 the idea that you’re watching the content
0:41:52 and the guy you’re watching is actually interacting
0:41:54 with you in real time.
0:41:57 You compare that to just watching like Jimmy Fallon
0:42:01 where they have these like very kind of awkward interviews
0:42:04 and it sort of feels like you’re watching like robots
0:42:05 put on a production.
0:42:08 It’s a completely, it’s so much more human, I guess.
0:42:10 – Yeah, I think that’s a really interesting point.
0:42:12 It’s sort of, you know,
0:42:14 this company I’m on the board of right now, OpenWeb,
0:42:16 manages the comments section of media companies,
0:42:18 but comments are asynchronous.
0:42:21 Someone posts a comment and people comment on the comment,
0:42:23 but it creates a lot more engagement
0:42:27 and which creates incremental opportunity for advertising.
0:42:32 This is, all right, if we engage the audience,
0:42:33 it’s like the players yelling back
0:42:35 or kicking the ball in an audience member, right?
0:42:38 It’s sort of, yeah, or you know,
0:42:41 when the dad in left field catches the ball
0:42:43 while holding his kid, right?
0:42:45 It just sort of engages the whole audience.
0:42:46 I think it’s really neat.
0:42:48 I think we should announce now
0:42:49 that we’re going to do a live stream
0:42:52 so people can see you live,
0:42:56 see how the edit really does impact our ability
0:42:57 to make you sound intelligent.
0:43:03 – Yeah, I don’t know if we’re cut out for live stream.
0:43:06 – No, we’ve got faces for podcasting
0:43:08 and content for asynchronous.
0:43:10 – Yeah, but it is very interesting
0:43:13 that we’re seeing companies start to embrace this.
0:43:17 And I think it’s all headed in one direction,
0:43:19 which is that the press release is dead
0:43:23 and newer forms of media, like videos,
0:43:26 TikToks, live streams, that is the future.
0:43:28 That is the future of public relations.
0:43:34 This episode was produced by Claire Miller
0:43:36 and engineered by Benjamin Spencer.
0:43:37 Our associate producer is Alison Weiss.
0:43:39 Mia Silverio is our research lead.
0:43:41 Jessica Lange is our research associate.
0:43:42 Drew Burroughs is our technical director.
0:43:45 And Katherine Dillon is our executive producer.
0:43:46 Thank you for listening to Prof2Markets
0:43:48 from the Vox Media Podcast Network.
0:43:50 Join us on Thursday for our conversation
0:43:52 with Tom Lee only on Prof2Markets.
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