AI transcript
0:00:02 – Okay, business leaders, are you here to play
0:00:04 or are you playing to win?
0:00:07 If you’re in it to win, meet your next MVP.
0:00:08 NetSuite by Oracle.
0:00:10 NetSuite is your full business management system
0:00:12 in one convenient suite.
0:00:13 With NetSuite, you’re running your accounting,
0:00:15 your finance, your HR, your e-commerce,
0:00:18 and more all from your online dashboard.
0:00:20 Upgrade your playbook and make the switch to NetSuite,
0:00:23 the number one cloud ERP.
0:00:25 Get the CFO’s guide to AI and machine learning
0:00:30 at netsuite.com/vox. NetSuite.com/vox.
0:00:31 ♪ Herama ♪
0:00:35 – Behold, my name is Maximus Entertainmentus
0:00:38 and I come to you with big stars in big dramas
0:00:41 like “Gladiator 2,” “Dexter,” “Original Sin,”
0:00:42 and “1923.”
0:00:45 – Stream Paramount Plus for $6.99 a month.
0:00:48 – Clear your schedule for U-time
0:00:52 with a handcrafted espresso beverage from Starbucks.
0:00:54 Savor the new small and mighty Cortado.
0:00:57 Cozy up with the familiar flavors of pistachio
0:00:59 or shake up your mood
0:01:02 with an iced brown sugar oat-shaken espresso.
0:01:03 Whatever you choose,
0:01:07 your espresso will be handcrafted with care at Starbucks.
0:01:13 – I’m Scott Galloway and this is “No Mercy, No Malice.”
0:01:17 This past weekend, Elon Musk called me cruel,
0:01:19 mean, and deceitful.
0:01:23 Two and a half years ago, I called him a welfare queen.
0:01:27 You decide, cruel, mean, and deceitful,
0:01:29 as read by George Hahn.
0:01:38 – This post was originally published August 19th, 2022.
0:01:44 What’s the most successful venture capital firm in history?
0:01:47 Kleiner Perkins and Sequoia Capital
0:01:50 backed many internet era success stories.
0:01:52 And recent Horowitz?
0:01:57 No, one organization towers above.
0:02:01 This firm was there before the first transistor was printed
0:02:03 and it will be there after we receive brain implants.
0:02:08 One investor funded the computer, the internet,
0:02:11 speech recognition, last mile distribution,
0:02:13 mapping the human genome,
0:02:15 the core technologies of fracking
0:02:18 and the first horizontal shale drill.
0:02:21 And today, it’s driving down the cost of solar
0:02:24 and wind power below that of coal.
0:02:26 Even better news?
0:02:30 If you’re a U.S. taxpayer, you’re a limited partner.
0:02:35 Founded in 1776 by General Partners Washington,
0:02:39 Jefferson, and Madison, and headquartered today
0:02:42 in a Bo Arts corporate campus in the District of Columbia,
0:02:45 the U.S. government is the world’s premier funder
0:02:48 of technological and commercial innovation.
0:02:53 The Inflation Reduction Act, IRA,
0:02:57 is being hailed/hated as a climate bill.
0:03:00 But it’s really just the most recent investment
0:03:02 by Eagle Capital.
0:03:06 Opponents of the legislation claim it’s a poor investment.
0:03:09 Eagle Cap’s track record suggests otherwise.
0:03:12 And we can expect big returns.
0:03:15 The IRA, awful name,
0:03:19 will direct $369 billion to a variety
0:03:23 of clean energy initiatives largely through tax credits.
0:03:27 The largest investments are for solar, wind,
0:03:29 and nuclear power generation,
0:03:32 where Eagle builds on a track record of success.
0:03:35 The government has invested over $3 billion
0:03:39 in wind power R&D since 1976.
0:03:42 And it’s been offering tax credits for wind and solar
0:03:44 since the 1990s.
0:03:49 Just since 2010, the cost of solar has dropped 85%
0:03:55 and the price to harness wind energy has been halved.
0:03:58 Public funding through R&D and tax credits
0:04:02 has been instrumental to that progress.
0:04:06 90% of U.S. coal-fired power is now more expensive
0:04:10 to operate than replacement wind or solar sources.
0:04:13 And that’s not for lack of investment in coal.
0:04:15 Conservative accounting puts government subsidies
0:04:19 for coal at $20 billion per year.
0:04:21 And the IRA includes investments
0:04:23 in carbon capture technology
0:04:26 intended to support coal energy for several years.
0:04:31 Eagle Cap’s $528 million loss
0:04:34 on solar cell manufacturer Solindra,
0:04:39 which declared bankruptcy in 2011, was a notable miss.
0:04:43 But failure is inherent to venture investing.
0:04:46 One analysis found the best-performing VC firms
0:04:51 have more money-losing investments than the average funds.
0:04:54 The key difference is the magnitude of their successes
0:04:57 and aggregate portfolio returns.
0:04:59 Solindra was a miss,
0:05:02 but the $30 billion Department of Energy loan program
0:05:05 that funded it turned a profit.
0:05:08 There are many notable wins.
0:05:12 One business that took a $465 million loan
0:05:16 from the same program in its early days, Tesla.
0:05:19 You likely didn’t know that
0:05:22 as its CEO spends more time shitposting America
0:05:23 than crediting it.
0:05:27 Early-stage, future-leaning research is riskier
0:05:31 and requires large amounts of patient capital.
0:05:33 Private industry struggles to justify
0:05:38 long-term mammoth investments in deep science.
0:05:41 The most enduring societies have one thing in common.
0:05:45 Their governments play the long game.
0:05:47 In the 1960s in the US,
0:05:51 this meant computer and networking technology.
0:05:56 At its peak, federal R&D spending approached 2% of GDP.
0:05:59 The most cutting-edge work was done
0:06:04 by the Defense Advanced Research Projects Agency, DARPA,
0:06:07 which developed or funded the development
0:06:10 of almost every building block technology
0:06:12 of our tech infrastructure,
0:06:14 from the internet and the mouse
0:06:18 to graphical user interfaces and GPS.
0:06:23 More recently, DARPA has been a major funder of AI projects,
0:06:26 notably speech recognition.
0:06:29 Both Dragon and Siri spun out of DARPA.
0:06:31 Speech illuminates the difference
0:06:34 between government and private R&D.
0:06:36 In the 1950s, Private Bell Labs,
0:06:40 a.k.a. the phone company, did pioneering work
0:06:44 on speech recognition, but only on phone digits zero through nine.
0:06:48 The government also invests upstream
0:06:51 by supporting public education and universities.
0:06:55 Stanford established its leadership in engineering
0:06:57 thanks to a unique three-way partnership
0:07:02 between the university, industry, and government contracts,
0:07:05 centered around the Stanford Research Institute,
0:07:09 where many DARPA innovations have been created.
0:07:11 Mark Andreessen coded Mosaic,
0:07:14 the first consumer-friendly graphical web browser,
0:07:17 it was the precursor to Netscape Navigator,
0:07:21 while attending the publicly funded University of Illinois
0:07:23 and working at the federally funded
0:07:27 National Center for Supercomputing Applications.
0:07:29 Again, did you know that?
0:07:31 Why would you?
0:07:34 According to an MIT study,
0:07:37 technology developed at universities
0:07:41 and then licensed to industry between 1996 and 2010,
0:07:46 created $388 billion in GDP and 3 million jobs.
0:07:54 Double-click on any major tech product or company,
0:07:57 and you’ll find government-funded tech.
0:08:01 Apple, Intel, and Qualcomm were all beneficiaries
0:08:04 of a loan program similar to the one
0:08:07 that funded Solyndra and Tesla.
0:08:09 Google’s core algorithm was developed
0:08:13 with a National Science Foundation grant.
0:08:16 Economist Mariana Matsukato in her book,
0:08:18 “The Entrepreneurial Slate,” calculates
0:08:22 that US government agencies have provided roughly a quarter
0:08:26 of total funding for early-stage tech companies,
0:08:28 and that in the pharmaceutical industry,
0:08:31 a sector requiring immense experimentation
0:08:36 and a willingness to fail, 75% of new molecular entities
0:08:40 have been discovered by publicly funded labs
0:08:42 or government agencies.
0:08:46 50 years from now, the field most likely
0:08:51 to spawn more value than digital computing is genetics,
0:08:52 and similar to digital computing,
0:08:57 genetics is an EagleCat portfolio industry.
0:09:02 The Human Genome project cost US taxpayers $3.8 billion,
0:09:06 was completed under budget and two years ahead of schedule,
0:09:11 and has generated $966 billion in economic activity
0:09:17 and $59 billion in federal tax revenue.
0:09:23 It’s estimated the federal government’s $3.3 billion
0:09:26 in annual spending on genetics projects
0:09:31 generates $265 billion in economic activity annually.
0:09:36 This number doesn’t account for the improved health outcomes
0:09:39 and quality of life flowing from genetic breakthroughs,
0:09:41 which have an estimated value
0:09:45 of $1 trillion per year and growing.
0:09:49 One of EagleCat’s recent wins in this space,
0:09:51 the Moderna COVID vaccine,
0:09:55 the result of a $25 million DARPA grant
0:09:59 to the company for developing RNA vaccine technology.
0:10:03 The biggest critics of the government
0:10:07 are oddly some of its biggest beneficiaries.
0:10:11 Tech billionaires are often the first to shitpost America,
0:10:13 even as they continue to harvest wealth
0:10:15 from the investments taxpayers make
0:10:17 via the US government.
0:10:21 In fact, the biggest bitcher
0:10:24 may be the biggest financial beneficiary.
0:10:27 Elon Musk says we should get rid
0:10:30 of all government subsidies that, quote,
0:10:33 “The government is the biggest corporation
0:10:35 with a monopoly on violence,” unquote,
0:10:39 and last week mocked Washington
0:10:42 for hiring more employees at the IRS.
0:10:44 Let’s be clear.
0:10:47 Elon didn’t build an EV company in South Africa
0:10:51 or start a rocket company in Canada.
0:10:56 He built Tesla and SpaceX in the United States,
0:10:59 and both continue to be heavily dependent
0:11:01 on US government support.
0:11:06 There would be no SpaceX without NASA,
0:11:08 its largest customer.
0:11:11 Tesla built its Fremont factory
0:11:16 with a $465 million DOE loan in 2010,
0:11:20 and its first 200,000 cars benefited
0:11:24 from tax credit subsidies of up to $7,500.
0:11:28 For years, the company was able to report profits
0:11:31 thanks to the sale of emissions credits
0:11:33 to other car makers.
0:11:35 All told, the company has accepted
0:11:40 an estimated $2.5 billion in government support.
0:11:45 Mark Andreessen says he’s pro-gridlock,
0:11:48 because, quote, “When the government does things,
0:11:52 it usually doesn’t end well,” unquote.
0:11:55 Except for providing the state-sponsored platform
0:12:00 for his career, the University of Illinois and NCSA.
0:12:02 Now Mark is making news
0:12:06 because he’s concerned about our nation’s housing crisis.
0:12:09 “We aren’t building enough houses,” he wrote recently,
0:12:12 and that’s, quote, “a driving force
0:12:15 behind inequality and anxiety,” unquote.
0:12:20 Except when the housing is near his house.
0:12:24 Another outspoken billionaire, Peter Thiel,
0:12:27 says the US government is socialist
0:12:30 and believes we have, quote, “much worse outcomes
0:12:35 than the Soviet Union in the 1950s,” unquote.
0:12:37 His solution is to take up seasteading,
0:12:40 i.e., building floating autonomous ocean communities
0:12:44 that aren’t subject to regulations or taxes.
0:12:46 But Thiel’s current venture, Palantir,
0:12:49 is a government contractor that provides data analytics
0:12:54 to the CIA, DOD, and other government agencies,
0:12:58 and these contracts make up almost 60% of its revenue.
0:13:03 Note, Palantir has lost money every year of its existence.
0:13:06 That feels like a Soviet outcome.
0:13:11 In the 1980 presidential run,
0:13:15 Ronald Reagan advocated tearing up our social safety net
0:13:17 on the manufactured claim
0:13:20 that it offered nothing more than handouts for lazy people.
0:13:26 He popularized the notion of the welfare queen,
0:13:28 someone living large on the government’s dime,
0:13:32 having more children to generate more welfare income.
0:13:37 It was a classist, racist stunt, and it worked.
0:13:42 22 states passed laws banning increased welfare payments
0:13:45 to mothers who had additional children,
0:13:49 and we’ve been slashing and burning the government ever since.
0:13:53 Reagan’s welfare queen was a caricature,
0:13:56 a country club cocktail fantasy
0:14:00 of the ungrateful beneficiary of hard-earned tax money.
0:14:04 The new welfare queens are tech billionaires.
0:14:07 The only difference is, they’re real.
0:14:12 VCs claim they partner with entrepreneurs, many do,
0:14:16 bring unique insight, most don’t,
0:14:21 and care about the founder, read money.
0:14:24 What’s clear is that the economic model
0:14:28 of 20% carried interest, investors and VCs
0:14:33 get 80% and 20% of the gains on capital, respectively,
0:14:36 has been flipped on its head regarding public investment,
0:14:40 where investors, taxpayers, often get less than the VCs
0:14:43 and entrepreneurs, they back.
0:14:47 Ironically, a Democrat held up the legislation
0:14:51 until the most obscene tax break in our tax code was restored.
0:14:55 I hope someday somebody loves me
0:14:59 the way Senator Sinema loves VC and private equity.
0:15:02 We’re on vacation and my kids made $27
0:15:05 from their lemonade stand yesterday.
0:15:10 They then spent $29 on nerds and airheads candy
0:15:14 and were 100% confident they should have unfettered access
0:15:18 to their returns before, during, after dinner,
0:15:20 as they earned it.
0:15:26 The gap in the math was that dads spent $38 on supplies,
0:15:31 table, sign, market, pitcher, cups, lemonade mix, et cetera.
0:15:34 Take this times a trillion
0:15:36 and you’re starting to get warm
0:15:39 regarding the relationship between taxpayers,
0:15:42 Sandhill Road and the innovators they back.
0:15:46 A wonderful thing about our country
0:15:49 is that the people who are the most patriotic
0:15:53 are the ones who’ve made the greatest investment, veterans.
0:15:57 Less heartening are the individuals
0:15:59 who’ve registered the greatest benefit,
0:16:04 are the least grateful and are often the most critical.
0:16:07 VCs who relocate to Miami
0:16:11 and before buying Sunblock disparage constantly,
0:16:14 the state they built their wealth in.
0:16:19 Also, mega welfare queens who cash EV subsidy checks
0:16:23 and sell carbon credits as they mock the elected leaders
0:16:25 who passed those laws.
0:16:29 By the way, nobody believes you move to Florida
0:16:31 or Texas for better governance.
0:16:34 You wanted the chance to recognize a capital gain
0:16:37 at a lower tax rate than the middle-class taxpayers
0:16:42 who funded your infrastructure, fuck off.
0:16:47 The first trillionaire will likely be an entrepreneur
0:16:49 who builds a layer of innovation
0:16:52 on top of the bold investment American citizens
0:16:55 are making to address climate change.
0:16:59 Let’s hope they display more grace and citizenship
0:17:02 and our elected leaders demonstrate more backbone
0:17:07 representing investors, the lower 99.99%.
0:17:13 – Life is so rich.
0:17:16 (gentle music)
0:17:19 (gentle music)
0:17:22 (gentle music)
0:17:25 (gentle music)
0:00:04 or are you playing to win?
0:00:07 If you’re in it to win, meet your next MVP.
0:00:08 NetSuite by Oracle.
0:00:10 NetSuite is your full business management system
0:00:12 in one convenient suite.
0:00:13 With NetSuite, you’re running your accounting,
0:00:15 your finance, your HR, your e-commerce,
0:00:18 and more all from your online dashboard.
0:00:20 Upgrade your playbook and make the switch to NetSuite,
0:00:23 the number one cloud ERP.
0:00:25 Get the CFO’s guide to AI and machine learning
0:00:30 at netsuite.com/vox. NetSuite.com/vox.
0:00:31 ♪ Herama ♪
0:00:35 – Behold, my name is Maximus Entertainmentus
0:00:38 and I come to you with big stars in big dramas
0:00:41 like “Gladiator 2,” “Dexter,” “Original Sin,”
0:00:42 and “1923.”
0:00:45 – Stream Paramount Plus for $6.99 a month.
0:00:48 – Clear your schedule for U-time
0:00:52 with a handcrafted espresso beverage from Starbucks.
0:00:54 Savor the new small and mighty Cortado.
0:00:57 Cozy up with the familiar flavors of pistachio
0:00:59 or shake up your mood
0:01:02 with an iced brown sugar oat-shaken espresso.
0:01:03 Whatever you choose,
0:01:07 your espresso will be handcrafted with care at Starbucks.
0:01:13 – I’m Scott Galloway and this is “No Mercy, No Malice.”
0:01:17 This past weekend, Elon Musk called me cruel,
0:01:19 mean, and deceitful.
0:01:23 Two and a half years ago, I called him a welfare queen.
0:01:27 You decide, cruel, mean, and deceitful,
0:01:29 as read by George Hahn.
0:01:38 – This post was originally published August 19th, 2022.
0:01:44 What’s the most successful venture capital firm in history?
0:01:47 Kleiner Perkins and Sequoia Capital
0:01:50 backed many internet era success stories.
0:01:52 And recent Horowitz?
0:01:57 No, one organization towers above.
0:02:01 This firm was there before the first transistor was printed
0:02:03 and it will be there after we receive brain implants.
0:02:08 One investor funded the computer, the internet,
0:02:11 speech recognition, last mile distribution,
0:02:13 mapping the human genome,
0:02:15 the core technologies of fracking
0:02:18 and the first horizontal shale drill.
0:02:21 And today, it’s driving down the cost of solar
0:02:24 and wind power below that of coal.
0:02:26 Even better news?
0:02:30 If you’re a U.S. taxpayer, you’re a limited partner.
0:02:35 Founded in 1776 by General Partners Washington,
0:02:39 Jefferson, and Madison, and headquartered today
0:02:42 in a Bo Arts corporate campus in the District of Columbia,
0:02:45 the U.S. government is the world’s premier funder
0:02:48 of technological and commercial innovation.
0:02:53 The Inflation Reduction Act, IRA,
0:02:57 is being hailed/hated as a climate bill.
0:03:00 But it’s really just the most recent investment
0:03:02 by Eagle Capital.
0:03:06 Opponents of the legislation claim it’s a poor investment.
0:03:09 Eagle Cap’s track record suggests otherwise.
0:03:12 And we can expect big returns.
0:03:15 The IRA, awful name,
0:03:19 will direct $369 billion to a variety
0:03:23 of clean energy initiatives largely through tax credits.
0:03:27 The largest investments are for solar, wind,
0:03:29 and nuclear power generation,
0:03:32 where Eagle builds on a track record of success.
0:03:35 The government has invested over $3 billion
0:03:39 in wind power R&D since 1976.
0:03:42 And it’s been offering tax credits for wind and solar
0:03:44 since the 1990s.
0:03:49 Just since 2010, the cost of solar has dropped 85%
0:03:55 and the price to harness wind energy has been halved.
0:03:58 Public funding through R&D and tax credits
0:04:02 has been instrumental to that progress.
0:04:06 90% of U.S. coal-fired power is now more expensive
0:04:10 to operate than replacement wind or solar sources.
0:04:13 And that’s not for lack of investment in coal.
0:04:15 Conservative accounting puts government subsidies
0:04:19 for coal at $20 billion per year.
0:04:21 And the IRA includes investments
0:04:23 in carbon capture technology
0:04:26 intended to support coal energy for several years.
0:04:31 Eagle Cap’s $528 million loss
0:04:34 on solar cell manufacturer Solindra,
0:04:39 which declared bankruptcy in 2011, was a notable miss.
0:04:43 But failure is inherent to venture investing.
0:04:46 One analysis found the best-performing VC firms
0:04:51 have more money-losing investments than the average funds.
0:04:54 The key difference is the magnitude of their successes
0:04:57 and aggregate portfolio returns.
0:04:59 Solindra was a miss,
0:05:02 but the $30 billion Department of Energy loan program
0:05:05 that funded it turned a profit.
0:05:08 There are many notable wins.
0:05:12 One business that took a $465 million loan
0:05:16 from the same program in its early days, Tesla.
0:05:19 You likely didn’t know that
0:05:22 as its CEO spends more time shitposting America
0:05:23 than crediting it.
0:05:27 Early-stage, future-leaning research is riskier
0:05:31 and requires large amounts of patient capital.
0:05:33 Private industry struggles to justify
0:05:38 long-term mammoth investments in deep science.
0:05:41 The most enduring societies have one thing in common.
0:05:45 Their governments play the long game.
0:05:47 In the 1960s in the US,
0:05:51 this meant computer and networking technology.
0:05:56 At its peak, federal R&D spending approached 2% of GDP.
0:05:59 The most cutting-edge work was done
0:06:04 by the Defense Advanced Research Projects Agency, DARPA,
0:06:07 which developed or funded the development
0:06:10 of almost every building block technology
0:06:12 of our tech infrastructure,
0:06:14 from the internet and the mouse
0:06:18 to graphical user interfaces and GPS.
0:06:23 More recently, DARPA has been a major funder of AI projects,
0:06:26 notably speech recognition.
0:06:29 Both Dragon and Siri spun out of DARPA.
0:06:31 Speech illuminates the difference
0:06:34 between government and private R&D.
0:06:36 In the 1950s, Private Bell Labs,
0:06:40 a.k.a. the phone company, did pioneering work
0:06:44 on speech recognition, but only on phone digits zero through nine.
0:06:48 The government also invests upstream
0:06:51 by supporting public education and universities.
0:06:55 Stanford established its leadership in engineering
0:06:57 thanks to a unique three-way partnership
0:07:02 between the university, industry, and government contracts,
0:07:05 centered around the Stanford Research Institute,
0:07:09 where many DARPA innovations have been created.
0:07:11 Mark Andreessen coded Mosaic,
0:07:14 the first consumer-friendly graphical web browser,
0:07:17 it was the precursor to Netscape Navigator,
0:07:21 while attending the publicly funded University of Illinois
0:07:23 and working at the federally funded
0:07:27 National Center for Supercomputing Applications.
0:07:29 Again, did you know that?
0:07:31 Why would you?
0:07:34 According to an MIT study,
0:07:37 technology developed at universities
0:07:41 and then licensed to industry between 1996 and 2010,
0:07:46 created $388 billion in GDP and 3 million jobs.
0:07:54 Double-click on any major tech product or company,
0:07:57 and you’ll find government-funded tech.
0:08:01 Apple, Intel, and Qualcomm were all beneficiaries
0:08:04 of a loan program similar to the one
0:08:07 that funded Solyndra and Tesla.
0:08:09 Google’s core algorithm was developed
0:08:13 with a National Science Foundation grant.
0:08:16 Economist Mariana Matsukato in her book,
0:08:18 “The Entrepreneurial Slate,” calculates
0:08:22 that US government agencies have provided roughly a quarter
0:08:26 of total funding for early-stage tech companies,
0:08:28 and that in the pharmaceutical industry,
0:08:31 a sector requiring immense experimentation
0:08:36 and a willingness to fail, 75% of new molecular entities
0:08:40 have been discovered by publicly funded labs
0:08:42 or government agencies.
0:08:46 50 years from now, the field most likely
0:08:51 to spawn more value than digital computing is genetics,
0:08:52 and similar to digital computing,
0:08:57 genetics is an EagleCat portfolio industry.
0:09:02 The Human Genome project cost US taxpayers $3.8 billion,
0:09:06 was completed under budget and two years ahead of schedule,
0:09:11 and has generated $966 billion in economic activity
0:09:17 and $59 billion in federal tax revenue.
0:09:23 It’s estimated the federal government’s $3.3 billion
0:09:26 in annual spending on genetics projects
0:09:31 generates $265 billion in economic activity annually.
0:09:36 This number doesn’t account for the improved health outcomes
0:09:39 and quality of life flowing from genetic breakthroughs,
0:09:41 which have an estimated value
0:09:45 of $1 trillion per year and growing.
0:09:49 One of EagleCat’s recent wins in this space,
0:09:51 the Moderna COVID vaccine,
0:09:55 the result of a $25 million DARPA grant
0:09:59 to the company for developing RNA vaccine technology.
0:10:03 The biggest critics of the government
0:10:07 are oddly some of its biggest beneficiaries.
0:10:11 Tech billionaires are often the first to shitpost America,
0:10:13 even as they continue to harvest wealth
0:10:15 from the investments taxpayers make
0:10:17 via the US government.
0:10:21 In fact, the biggest bitcher
0:10:24 may be the biggest financial beneficiary.
0:10:27 Elon Musk says we should get rid
0:10:30 of all government subsidies that, quote,
0:10:33 “The government is the biggest corporation
0:10:35 with a monopoly on violence,” unquote,
0:10:39 and last week mocked Washington
0:10:42 for hiring more employees at the IRS.
0:10:44 Let’s be clear.
0:10:47 Elon didn’t build an EV company in South Africa
0:10:51 or start a rocket company in Canada.
0:10:56 He built Tesla and SpaceX in the United States,
0:10:59 and both continue to be heavily dependent
0:11:01 on US government support.
0:11:06 There would be no SpaceX without NASA,
0:11:08 its largest customer.
0:11:11 Tesla built its Fremont factory
0:11:16 with a $465 million DOE loan in 2010,
0:11:20 and its first 200,000 cars benefited
0:11:24 from tax credit subsidies of up to $7,500.
0:11:28 For years, the company was able to report profits
0:11:31 thanks to the sale of emissions credits
0:11:33 to other car makers.
0:11:35 All told, the company has accepted
0:11:40 an estimated $2.5 billion in government support.
0:11:45 Mark Andreessen says he’s pro-gridlock,
0:11:48 because, quote, “When the government does things,
0:11:52 it usually doesn’t end well,” unquote.
0:11:55 Except for providing the state-sponsored platform
0:12:00 for his career, the University of Illinois and NCSA.
0:12:02 Now Mark is making news
0:12:06 because he’s concerned about our nation’s housing crisis.
0:12:09 “We aren’t building enough houses,” he wrote recently,
0:12:12 and that’s, quote, “a driving force
0:12:15 behind inequality and anxiety,” unquote.
0:12:20 Except when the housing is near his house.
0:12:24 Another outspoken billionaire, Peter Thiel,
0:12:27 says the US government is socialist
0:12:30 and believes we have, quote, “much worse outcomes
0:12:35 than the Soviet Union in the 1950s,” unquote.
0:12:37 His solution is to take up seasteading,
0:12:40 i.e., building floating autonomous ocean communities
0:12:44 that aren’t subject to regulations or taxes.
0:12:46 But Thiel’s current venture, Palantir,
0:12:49 is a government contractor that provides data analytics
0:12:54 to the CIA, DOD, and other government agencies,
0:12:58 and these contracts make up almost 60% of its revenue.
0:13:03 Note, Palantir has lost money every year of its existence.
0:13:06 That feels like a Soviet outcome.
0:13:11 In the 1980 presidential run,
0:13:15 Ronald Reagan advocated tearing up our social safety net
0:13:17 on the manufactured claim
0:13:20 that it offered nothing more than handouts for lazy people.
0:13:26 He popularized the notion of the welfare queen,
0:13:28 someone living large on the government’s dime,
0:13:32 having more children to generate more welfare income.
0:13:37 It was a classist, racist stunt, and it worked.
0:13:42 22 states passed laws banning increased welfare payments
0:13:45 to mothers who had additional children,
0:13:49 and we’ve been slashing and burning the government ever since.
0:13:53 Reagan’s welfare queen was a caricature,
0:13:56 a country club cocktail fantasy
0:14:00 of the ungrateful beneficiary of hard-earned tax money.
0:14:04 The new welfare queens are tech billionaires.
0:14:07 The only difference is, they’re real.
0:14:12 VCs claim they partner with entrepreneurs, many do,
0:14:16 bring unique insight, most don’t,
0:14:21 and care about the founder, read money.
0:14:24 What’s clear is that the economic model
0:14:28 of 20% carried interest, investors and VCs
0:14:33 get 80% and 20% of the gains on capital, respectively,
0:14:36 has been flipped on its head regarding public investment,
0:14:40 where investors, taxpayers, often get less than the VCs
0:14:43 and entrepreneurs, they back.
0:14:47 Ironically, a Democrat held up the legislation
0:14:51 until the most obscene tax break in our tax code was restored.
0:14:55 I hope someday somebody loves me
0:14:59 the way Senator Sinema loves VC and private equity.
0:15:02 We’re on vacation and my kids made $27
0:15:05 from their lemonade stand yesterday.
0:15:10 They then spent $29 on nerds and airheads candy
0:15:14 and were 100% confident they should have unfettered access
0:15:18 to their returns before, during, after dinner,
0:15:20 as they earned it.
0:15:26 The gap in the math was that dads spent $38 on supplies,
0:15:31 table, sign, market, pitcher, cups, lemonade mix, et cetera.
0:15:34 Take this times a trillion
0:15:36 and you’re starting to get warm
0:15:39 regarding the relationship between taxpayers,
0:15:42 Sandhill Road and the innovators they back.
0:15:46 A wonderful thing about our country
0:15:49 is that the people who are the most patriotic
0:15:53 are the ones who’ve made the greatest investment, veterans.
0:15:57 Less heartening are the individuals
0:15:59 who’ve registered the greatest benefit,
0:16:04 are the least grateful and are often the most critical.
0:16:07 VCs who relocate to Miami
0:16:11 and before buying Sunblock disparage constantly,
0:16:14 the state they built their wealth in.
0:16:19 Also, mega welfare queens who cash EV subsidy checks
0:16:23 and sell carbon credits as they mock the elected leaders
0:16:25 who passed those laws.
0:16:29 By the way, nobody believes you move to Florida
0:16:31 or Texas for better governance.
0:16:34 You wanted the chance to recognize a capital gain
0:16:37 at a lower tax rate than the middle-class taxpayers
0:16:42 who funded your infrastructure, fuck off.
0:16:47 The first trillionaire will likely be an entrepreneur
0:16:49 who builds a layer of innovation
0:16:52 on top of the bold investment American citizens
0:16:55 are making to address climate change.
0:16:59 Let’s hope they display more grace and citizenship
0:17:02 and our elected leaders demonstrate more backbone
0:17:07 representing investors, the lower 99.99%.
0:17:13 – Life is so rich.
0:17:16 (gentle music)
0:17:19 (gentle music)
0:17:22 (gentle music)
0:17:25 (gentle music)
As read by George Hahn.
Elon Musk, Welfare Queen
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