Big Fed rate cuts, AI killing call centers, $50B govt boondoggle, VC's rough years, Trump/Kamala
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All right, everybody, welcome back to the all in podcast. The channel's been active. We're in the afterglow. We're in the all in summit afterglow. It's so glowing that Friedberg couldn't make it. He has been riding a high. I've never seen him happier. We've only put out a half the clips and they've already gotten 20 million views.

Oh, my Lord. You know, I will be around 50 million, I think, when all the clips are released and you let it bake for a couple of months. That is an astoundingly large amount of reach. Yeah. And that's just YouTube. We're not doing it on the podcast feed right now. YouTube and X. Well, hopefully we get it on the podcast feed. We get another 50 million. But Freeberg's in his afterglow. Couldn't make it. But he's very busy right now. Look how happy is the summit went well. Is that marijuana?

I think he's making potatoes. I think that's his farm. But, I mean, the smile is incredible. It's marijuana. It's Freeburg's version of Founder Mode. He's in fantastic. That's Freeburg's Founder Mode. He's eating the bong. His Founder Mode gives him the munchies. Rain Man, David Sack. We open sourced it to the fans and they've just gone crazy with it. Love you, man. Queen of Kinship.

He is in the afterglow, and he won't be with us this week, but... He organized such a great conference, don't you think, J.K.? He did great. I mean, he really took charge of that. He crushed it. He crushed it, yeah. I would like to give him his flowers, absolutely. It is like at least a trillion times better than the first, and at least 50% better than the second.

I mean, that's how it should go. You know, when you create something in the world, Chamath, what you want to do is you want to hand it off to professional management to then scale it, right? Not everybody can do the creative act of actually forming something. You need to have these operators to go and then execute your vision. And I just want to give Free Breakfast Flowers for executing incredibly well. We all play a role, Chamath.

Sachs launched a tequila company. I want to say thanks to Friedberg. He did all of these great speakers. Big thank you to our CEO, John, who put together all the operations. Nick did incredible.

Nick did incredible, incredible job with those opening graphics. They went viral. Zach helped with the graphics. You had young Spielberg chipping in. You had Laura did an amazing job with stage management. And of course, you know, I focused on the moderation. I got a lot of great things. So everybody plays a role. You got Saks with the tequila, Friedberg, Laura, Zach, Spielberg, Nick, John. Everybody brought something to the table. Are you finally going to delegate? So congratulations to everybody.

You scale through people. That's it. Scale through people. That's it. Did anybody... Nobody got the joke. Chamath, everybody contributed. You understand?

Saks, new tequila company. John, operations. Your Freebird content, me with being the world's greatest moderator up there. Oh, it was Chamath's contribution. Oh, yeah. Chamath showed up. Chamath looked great. I showed up. He showed up and looked great. I brought my two votes and I brought my vision. Absolutely. I would also say... Fan favorite. What you really did that was amazing was you took a lot of selfies. I was very proud of both of you

with the fans service. The fans were very pleased that you guys took so many selfies. You know, we got a lot of feedback too coming in. So it was pretty great feedback. Do you think that you did better as moderator because you finally let go of just the conference organization? What do you think? Yeah, I think that you were able to focus on your unique value add instead of immersing yourself in a bunch of

details that could be handled by the team. I agree. It was absolutely fantastic. But I think it was a process to get you to let go. Well, you know, it's a fair point. People did say my moderation was dialed in, and I appreciate that positive feedback from everybody. And yeah, there is something to...

Having people you can trust with the content. I thought your moderation was excellent this time. It was better than before because I think that you're actually exceptional as a moderator. And I think you're mostly average as a conference producer. But I wouldn't go that far. I do think as a moderator, you're excellent. I mean, like some of the most memorable moments were you basically drawing out

contrasting opinions. And the way that the people engaged with them was so healthy and good. That was the, I think the recurring theme. So I gave you an enormous amount of credit. I think you did an exceptional job, but I also think it's because you were able to focus on what you're. Yes. I do agree with that. I was talking to Jade about, and she said, and Nick also pointed out, you were really dialed in Jake. What's up? And I said, I'm not worrying about the party and the vendors and the front desk and the sponsors. And it is actually, you're able to focus.

Did you have some favorite moments yourself there, Sax? Any favorite moments for you or panels or things maybe that exceeded expectations for you?

Well, I thought the Mearsheimer Jeffrey Sachs panel was great. I thought it would be, which is why I helped organize it. But I was just glad that the audience, so many people in the audience reacted and said that was the surprise hit of the conference. I would say that was my favorite of the event. One of the best panels I've ever been part of. It's the most viewed. It's like slightly above Elon's one. Really? Oh, just behind you. Elon's slightly ahead, but yeah, it's still like growing. It's like finding an audience.

Well, I think that if you look at the one from last year, Graham Allison, where he got a standing ovation, the thing is there are these village elders where they are at a point in their life where they're willing to just be a truth teller. But oftentimes they're deplatformed and we have the ability to actually bring some of the smartest of them on and give them a voice. And it's incredible how much they resonate because what they say is so logical and sensible.

So that's a really important thing that we have now at our disposal. And I think that people really appreciate it, you know, so we're like, I think we're doing a really important job in doing that. And now the question is, what village elders do we get next year to keep, you know, being truth tellers?

Well, give us your thoughts. You know, there's an all in Twitter handle and he's Chamath David Sachs. And I'm at Jason and Freeberg's at Freeberg. Just tell us who you think would be great. But, Sachs, I know you're super excited and want to give Biden his flowers. The Fed just cut rates 50 bips and the stock market is tearing it up right now. On Wednesday, Fed cut interest rates by a half a percentage point.

Taking them down off of a 23-year high. We've been talking about this, God, for two years here on this podcast. First rate cut since March of 2020, which is about when we started this podcast. Jay Powell basically said the Fed thinks inflation is coming down to around 2% nicely.

And they don't want the job market to soften any further than it already has. He also mentioned immigration has helped soften the market, the labor market as well, obviously, with all those new people looking for jobs. So in the last two months, July and August, CPI has been at a two handle. We talked about that 2.9% in July, 2.5% in August. Here's the CPI over the last decade.

Obviously, massive boom in interest that you see there from 2021 to 2023. Many obviously think we're going to have more rate cuts, probably 25 every meeting for a little bit. And Dow's already at an all-time high, surged 300 points on the news.

Here's some interesting data about the 50 basis point kickoff cuts. So this is where it gets interesting, Chamath. Fed only started publicizing their interest rate changes in 1994. Since 94, Fed has initiated a cutting cycle six times. Here's the chart. Take a good look at that. 95, 98, 2019, they started with 25 bps. 01,

And 07, after the great financial crisis, they started with a 50-bip cut. So obviously, there was an emergency 50-bip cut in March of 2020 when COVID hit. 01, 07, 2020, very severe situations. And what happened in the markets is what I want to discuss with both of you today. In 2001, market fell 31% in the two years after COVID.

That recut in 2007, market fell 26% after two years. So in 2020, despite all the fears, market ripped 44% over two years. What's the more likely scenario, Chamath? Is this similar to the dot-com great financial crisis or similar to 2020? Well, I think 2020, you have to put it at big asterisks because the question is what would have happened had there not been

COVID and had there not been an entire global shutdown. So if you go back to that chart, you could probably just extrapolate and cut out that part that's flat because the part that's flat from 2020 to 2022 was largely artificially created

Because on top of that, we injected so much money into the economy, the reality is we probably would have raised at some rate of change that you could have predicted from 2016. So what do you take away from that? I think that you have to realize we're at a point in the economy where you cut rates because there's tension.

And there's tension between employment and unemployment. There's tension between earnings, growth, and contraction. And so it's a stimulatory move. So if you look through that stimulatory move, why is the Fed doing this? And why will they cut probably all the way down to 2% or 3% by the end of 26? It's because we now need to stimulate the economy again.

So the reason why markets tend to fall once the rate cut cycle starts is because the next couple of quarters sort of demonstrate what I think the Fed is expecting, which is that there's pressure in the economy. We have not seen that flow through in earnings or in how companies describe markets on the field by and large, except for a few.

So I think this part of the cycle now will be about all of these companies telling us whether there's nothing to see here or whether there is actual real pressure. And if there is real pressure...

It'll probably look like the several times before where you're just going to have to contract the value of financial assets because they're just not worth as much when they're earning less. Okay. Sax, any thoughts here? Just balls and strikes? Well, I think a lot of people are commenting on the fact that the only other two times where we've had a 50 basis point rate cut in modern history, it has been just before a recession. So I think this happened recently.

in 2001, 2007, right before the recession. And the Fed had to do a dramatic rate cut because they could see in the data that things were weakening. So a lot of people are asking the question, well, is that what's going on here? Now, Powell's comments, though, are indicating that the economy is in good shape. He said the economy is in very good shape, basically indicating that they had tamed inflation and that they would look to cut another 50 basis points this year. So Powell's

Rhetoric is in a way at odds with the magnitude of this cut. So why didn't they just cut 25 basis points? I think people are trying to figure that out. Read the tea leaves into why 50 – because they could just do 25 a month for five months as opposed to 50 in –

and just do 25 now. That's the key thing. If you look at the dot plot and if you look at where the smart financial actors are betting where rates end, so it's hard to sort of like look at any point in time, 50 now, 25 later. What does it all mean? It's very hard to know. But what is much clearer is where do we think terminal rates will be even in the next 18 months

And it is dramatically lower for where they are now. And I think that support sacks Europe, that argument that you just made, which is, if you're going to basically cut this aggressively over the next year to year and a half, by the estimates of very smart financial actors whose job it is to spend every day observing the Fed.

then they must see something. Because otherwise, as you said, you could take a much more gradual approach. And so I think that the smart financial actors are guessing recession or guessing contraction. I think what they're also guessing is similar to nonfarm payrolls. We're going to go through a couple of difficult GDP revisions, probably downward. And I think that will have an impact to people's

sense of how the economy is doing even more than what their sense is today, which is already teetering on it's at best okay. And I think all of that has to play itself out. So it's going to be a very complicated and dynamic fall in that respect. Yeah. And I think so much of this has to do with

unemployment. We had that period where so many jobs were available. Remember, we talked about it here, 11, 12 million jobs available at the peak. We can debate the numbers, of course, but we all saw it where you just couldn't hire talent in America. There was so few people available to take positions. And man, has that changed. And you get to see it on the ground in early stage startups where

This whole narrative, I don't know if you saw it in your board meetings, but hey, we can't find a person. Hey, we're looking. Hey, that search is still going. We're still looking for a director of sales. We're still looking for salespeople. We're still looking for developers. We're still looking for operations people. Now it's the opposite. It's like, I just, I'm hiring producers here in Austin because I'm building my in-person studio. We had like,

I don't know, a dozen viable candidates for this position. And I had a hard time picking between, you know, the top three. Now, that's distinctly different than my experience for the last five to 10 years, where you were like, how do we how do we fill this role? So I think that employment has been broken. And that's the thing that has me concerned, because with all these people who came in through the southern border, and then you have

people outsourcing to other countries. I wonder if Americans are going to lose so many of these mid-paying jobs. And this will dovetail into our next story about Amazon making cuts. I'm very worried about the hollowing out of the upper middle class, that elite group of $150,000 jobs that then employ nannies and spend money in the economy. I wonder, I don't know if you're seeing that in your company, Sachs?

I'm not worried about the hollowing out of that class. You have disdain for them. But I mean, just in terms of the labor market, what do you see in companies right now, hiring, the talent pool, et cetera? Well, I mean, in tech, things are pretty good. I mean, they're not as absurdly frothy as they were during the bubble of 2020 and 2021, but things are good. You have this huge

AI tailwind now, and there's just a ton of investment going into AI. There's a little bit of a tale of two cities going on. If you're in AI, things are really bubbly. And if you're outside AI, they've returned to much more normal levels in terms of valuation and company operations, all that kind of stuff. Just to go back to the state of the economy for a second, the reason why a lot of people were predicting a recession was

including me for a while, is that the yield curve inverting has been an almost perfect gauge of whether a recession is coming. It's when basically the Fed raises short-term interest rates above long-term interest rates. Normally, long rates are the ones that should be higher because investors demand a higher rate of return to tie up their money for longer. So something's really

off and kind of broken when short rates go above long rates, the yield curve inverts. And it's always been the prelude to a recession. But the recession doesn't come when the yield curve inverts. It usually comes when the yield curve de-inverts. And the reason for that is because the Fed now sees weakness and dramatically cuts the short rates. So in other words, it jacks up the short rates to control inflation.

That works. It trickles through the economy. The economy cools down. And then the Fed says, oh, maybe we've overcorrected. They slam on the brakes and then they cut rates to basically make up for the effect on the economy. So the yield curve has finally de-inverted. And the question is just, do we now get that recession or did the Fed manage this to a soft landing? I don't think we know. I'm not

I'm not like calling a recession, but this is the thing that people are concerned about. Yeah. Well, Sax, we were talking about AI in the group chat, right? Yeah. I think it's now becoming really clear that call centers are going to be the first really big disruption caused by AI. Yeah. I mean, all the level one customer support is going to get replaced by AI. I mean, LLMs plus voice, because OpenAI just released their audio API. Yeah.

You saw that at the All In Summit, we released a Mearsheimer AI where we trained it on all of his work. And you can go to Mearsheimer.ai and ask it questions. And it will tell you the answers in his voice because we cloned his voice using Resemble AI. Anyway, so AI can do voice now. And it can be trained extremely well on large data sets to give you answers to questions, which is pretty much what customer support is.

So I think it's now becoming clear that I think within the next two to three years, you're going to see a massive disruption in that industry. I agree with that massively. And I think there's another underreported story, which is

People don't like to call and talk to a customer service agent, like an actual human, if they can avoid it. They would much rather go on YouTube and say, how do I fix this? Or, you know, ask ChatGPT, how do I fix this? It's like, I don't want to waste another person's time. Just give me the answer as quick as possible. And AI will give you the answer quicker. YouTube will give you the answer quicker. I've had so many times where I have people who work for me who are like, I don't know how to do that. And I literally would walk up to their computer and

load YouTube and type in, how do I blank and there's a video there, watch it on two speed, you can do it. That's what's, you know, going to also kill this. Like, I don't want to talk to a human, just change my flight, just

You know, answer my question. Yeah. I mean, you talk about disruption. Call centers are a very big part of the economy in certain geographies. Denver, Salt Lake, I mean, parts of Florida. Yeah, exactly. It's a really big deal. If like half the cost gets ripped out of those call centers. Where would you move those people? If you had your choice, could they move to sales?

Well, I think sales will be the one that's disrupted after customer support. But I don't know. I think it's going to be very disruptive. One of the reasons I think this is, you know, in the early days of LLMs, people were saying that legal services would be disrupted. And you saw some very highly valued startups rocketing up based on that. I think the problem with that is the error rate. So when you think about AI...

applications, you have to think about what is the tolerable error rate that the industry will allow? Because we know that AIs get things wrong, they can hallucinate, and you're never going to be able to make it perfect. I mean, you can improve the quality, but it's still going to have some errors. And when you're dealing with like legal services, for example, you just can't have mistakes. This is not tolerated. However, customer support is different. Customer support is already organized into levels, level one, level two, level three, based on difficulty.

And there's already, in a sense, a mechanism for failover. If like the level one customer support person can't answer the question, they kick it up to level two. So there's a place for LLMs to start in customer support, which is replacing all the level one and then working their way up the chain to level two as they get better and better. And so what I'm saying is that

The level of accuracy now, especially with the new PhD level reasoning models, is good enough. We don't need to wait for some perfect LLM model. And I think this is why this is going to be a big, big disruption. Millions of people potentially are going to have their jobs disrupted or at least transformed. Well, it could be the end of the entire career as well, Chamath, if you were to look at this four by four sort of quadrant chart that Sachs is describing, which is the cost of an era and...

the actual complexity of the job, perhaps, or the cost of the job? How do you look at this? I know you're working on software that kind of does this with your startup as well. I mean, I'll preview one use case from 8090, which is pretty stunning. You know, we work with a very large regulated, highly regulated company, public company. And they have

a very complicated set of people and processes because of the field in which they're in. And David, your point is exactly right. It took us a fairly long time, but we're at a point now where we've been running AI-powered software versus the old legacy deterministic solution. And we've been running it at 100% accuracy now for about 10 days. So this is still very new.

And it's an incredible thing because to your point, our first version was like in the mid 80s. Then we were in the mid 90s. Then we were, you know, 97, 98%, but there were still errors. And it just took a lot of engineering to figure out how to get to 100. But now it's at 100 and it's been consistently at 100. And so we're all kind of like scratching our head because now the next step is, well, what do we do? To your point, what do we do? Do we, so we're figuring that out right now.

But the art of the possible is that I think well-crafted AI software is as good as deterministic software in the sense that the error rates will be equivalent in production and at the level of a very highly regulated public company. And I think that's the gold standard because in those sectors, those companies have zero tolerance. It's not a toy. It's not even, you know, level one customer support.

It's system of record type work. Yeah. But it shows what's possible. And to your point, Sax, we're doing that today, even though they're the best models. Imagine how good the underlying models will get in a year from now. Yeah. Right? And we'll be able to take on more and more work. It's very stunning, actually. It's really... Have you guys worked with the O1 preview yet? I just literally have been using this new reasoning engine that

OpenAI released, and it is extraordinary. And it's kind of thinking about the next three or four prompts you would do. And I literally just got this while we're on the show. I've hit the limit for my paid account because this thing is so intense on compute, I guess. Well, the thing with O1 is that I think it's starting to add reasoning. But the way that you do reasoning is sort of this idea that you have this chain of thought. And I think that that's a very powerful but early concept.

And as we refine those ways in which these models get to better answers, the wonderful thing is that OpenAI will preview 01 and then they'll have the actual 01 production build probably in the next couple of months, which will be probably pretty spectacular. But then you'll see something from Claude, you'll see something from Lama. And the real...

Art, I think, and this is where I do think it's a little bit of alchemy still, which I think is good because it keeps humans involved, all of us involved. Yes. Is how do you stitch all of those things together to get to a 0% error rate? What Sack said, you know, how do you minimize the blast radius and how do you make sure these things are super high quality? Right.

Well, and people don't... It's still a very hard technical problem. Go ahead, Saxon, then I'll show you what ChachiP is doing. So, yeah, one of the reasons why I'm bullish on this customer support use case is because there's a very large data set to train on. You've got all of the product documentation that companies have already created. You've got all of the previous email support. And calls. And calls, yeah. The calls have been recorded, so you can now train the AI on that. So there's a very large...

body of data to train the AI model on. And it's not necessarily the most proprietary. It's not like dealing with people's medical records or even confidential legal documents, something like that. So the data is readily available. And then the foundation models are getting really good. I think there's a big question here about value capture, which is there's a number of startups now that are becoming very highly valued that are chasing this disruption, this sort of customer support agent disruption.

And they're getting into very high valuations, even unicorn valuations already. And the question is, well, wait, if the foundation models are advancing at such a rate, like a year from now, why couldn't a developer, just a startup of a few guys, take next year's model and train it and then commoditize the

You're making such a good point. So when we were trying to figure out like what applications we would build and like which sectors of the economy we would go after, I was like, guys, we got to go after the hardest, most regulated places. Because those are the things and places and people that have absolutely zero tolerance for error and where you're going to need to do some amount of customization and specialization to actually solve these problems. And

Sacks to your point, like when you see and I said, you cannot we cannot touch customer service, we cannot touch it, because it's going to get commoditized and run over by these foundational models within a year.

Right. I mean, it's just too easy. It's just too easy. You'll be able to do it on a local computer. I mean, you'll just download the entire database of every call on a MacBook with an M3 and just run it. And by the way, just to build on that, the other thing that's now possible, and you saw this with Klarna, because Klarna put out this cryptic tweet slash press release where, I think maybe it was in their earnings. Nick, maybe you can find this, where they're like, we've deprecated Salesforce and worked it.

That was strange. Yeah. How can a company that big deprecate those two systems of record? How is that even? It's how is it possible? I think it means they're writing their own, right? Well, I'll tell you how it's possible. And so this is like this next crazy thing that's been happening. We've been doing a version of this to go after some other sources of software. We haven't had the balls, to be honest, to go after Salesforce or Workday. But here's how they do it. They write these agents.

And these agents can spawn other agents, right? So it's very classic kind of machine that builds a machine. And you start to observe the inputs and outputs of a system, right? I'm hyper simplifying, but I'm just, it'll make the point. And over time, what the agents start to do is by observing the inputs and the outputs, they start to guess on what the intervening code is. And the code paths must be in the middle to generate the outputs based on these inputs. And so over time, what happens is you develop a digital twin, right?

And then you run that against that counterfactual, against Workday or Salesforce. And then at some point, you're like, it's the same. And you just turn it off and you're saving yourself tens or hundreds of millions of dollars. So that's it's a version of what Karna did. It takes an enormous amount of technical strength to do it.

It also takes tremendous, I think, executive courage and leadership, because I think that's a very difficult decision to embark on. But if you're an engineer, that must be an unbelievably exciting technical challenge to be a part of. But that's the basic premise of what they were able to do. Hopefully, they share more and maybe they even open source what they did, because I think it would just be an amazing experience.

thing for all of us to look at. Yeah. I mean, to restate it, watch people use a piece of software and then based on what they do, you could write the code, which you could take a video of a video game today, like Angry Birds. And somebody did this. You give the Angry Birds iPad game from 15 years ago to AI, it's going to back into the code.

just by watching it. So why not just watch people use Salesforce or Workday? And those are very expensive products, thousands of dollars per user, right? I want to get Sachs' point of view. The thing in enterprise software that we were always told is you cannot touch these systems of record. Don't ever start a systems of record company. Don't try to touch these systems of record companies. Don't try to disrupt them. It's an impossible task. But then the question is, if you have these things,

Why do you necessarily need a system of record in the way that you needed to before when you're writing all this clunky deterministic code? What do you think, Simon? Well, I saw the Klarna story where they said they were going to rip out Salesforce and Workday because they were able to write their own bespoke code using AI. I mean, I have to say I'm a little bit skeptical of that story for a couple of reasons. One is...

If that's their goal, why wouldn't they have open sourced these products they created? You might as well get the whole ecosystem working on it because they're not trying to sell this product that they've internally created. They're just trying to rip out the cost. So why not let the whole ecosystem see it?

The other thing is, if it's so easy to do, why hasn't the market already been flooded with new startups that are effectively able to reverse engineer? I don't think you're right. I don't think it's easy to do because I don't think there's a generalization here that's productizable. Do you know what I mean? Like, I do think that these are very custom specific things. So maybe there's like some scaffolding, but I don't think that that scaffolding has a ton of economic value. I think it's really good open source stuff.

I think it's what you build on top of it. And so that hasn't been figured out yet for sure. Yeah, look, I think that if you're only using a few use cases of these big complicated software packages, then yeah, it's probably easier than ever to deprecate them, you know, eliminate them from your stack and just have your own internal engineers build specifically what you need in a more tightly integrated way. I think that is possible. Nick, show this tweet to these guys.

Here's the tweet. This is... Oh, this was a crazy one, yeah. So look at the code, look at the actual product itself for a second. Yeah, but the product's garbage. I mean, look how ridiculous this is. But that was 600... Sorry, it was a billion dollars that NYC... Okay, so here's the tweet. Well, this is just egregious. New York City's public college system paid Oracle 600 million to build our course management portal. It's built on top of Oracle's PeopleSoft suite, which they...

which they refused to customize without an extra $400 million to hit $1 billion. New Yorkers got the image below and pay $5 million plus a year for hosting. Look, this is egregious government waste. I mean, that site looks like it's pathetic. I mean, honestly, this looks like it could have been done with a SharePoint site, and you pay some consultant to stand it up for 1% of the cost. And there are more modern platforms than that.

So this is just incredibly wasteful and inefficient government spending. They're going for retro. They were going for retro. They wanted to harken back to the 90s. The reason I wanted to show this to you is I think that these kinds of things will not be possible in the future. I just don't see how one could –

spend a billion dollars if one tried to, to enable that feature. It would be impossible. Right. But that, that, that 600 million that was wasted on that crappy portal, that shouldn't have happened even without AI, right? Because there's like much better ways there you can, you could buy a much better product for 1% of the cost. So, or 0.1% of the cost.

There must be some regulatory capture going here where somebody has got a record. No, I think it's relationships. That's what I'm saying. Like a 10 year relationship with somebody in Albany that, you know, previously it's the same thing that's happening with, um, rural internet. Do you see that? Paradoxically, this is our next story. So let's go for it. In related news of our government burning our money.

Raw broadband, rural broadband and EV charging, $42 billion and $7.5 billion, almost $50 billion combined. Let's just go over these two programs real quickly here.

Both were part of the $1.2 trillion infrastructure bill in 2021. $42 billion carved out to provide high-speed internet to people living on farms in rural locations. $7.5 billion carved out to build 500,000 EV chargers over 10 years. It's been 1,000 days since the bill was passed, so let's check on the progress. Zero people have been connected, according to FCC Commissioner Brendan Carr. And eight...

12345678 EV chargers have been built as of May, according to AutoWeek magazine. What's even crazier, private industry already solved these problems. United Airlines just announced they're putting Starlink on a thousand of their planes and they're going to offer it for free. And Starlink now has 2,500 planes under contract.

with a bunch of other airlines. And in the second half of 2023 alone, the private sector built over a thousand charging stations in the US. These are two problems that have already been solved, Sax. Why are we burning $50 billion in the future with

On things that have already been solved. We've solved for this. I own electric cars. I have Starlink. You know the answer. You know the answer. Say the answer, Jason. Corruption. No, come on, Jason. Incompetence. Really? Graft. Keep going. I mean, you tell me. Corruption, graft, buying votes from your constituents? They haven't delivered any of it. Incompetence, yes. Yes.

Well, there's a couple of things going on here. So one is typical government waste, fraud, and abuse, where they've allocated $42 billion for rural internet, haven't hooked anyone up, and we could spend a fraction of that giving people Starlink.

and allowing the private sector to do its job. And why even pay for its tax? Why are we paying for it if it's available for 100 bucks? That's the baseline. But it's worse than that. Because on top of the waste, fraud and abuse, and the fact that the government is grossly incompetent and inefficient, you also have naked political retaliation going on here. That's the answer. Yeah, exactly. And Brendan Carr, who's an FCC commissioner pointed this out,

He said that in 2023, the FCC canceled or revoked an $885 million contract with the company by claiming Starlink is not capable of providing high-speed internet.

Then, a year later, of course, that was a lie. And then a year later, the FCC is now claiming that Starlink provides so much high-speed internet that the word monopoly should be tossed out. So, look, this is just pure naked retaliation. The Biden-Harris administration doesn't want to admit that Elon has the best solution for rural internet, just like they couldn't admit

He made the best electric cars. Remember when they did that EV summit and they didn't invite him? That was just nakedly political because he's not on their team. Right. So look, I mean, the Biden-Harris administration, look, it's blue no matter who. And Elon has drifted from being sort of independent and not aligned to- He was blue. He was blue. Let's call it what it is. I mean, he voted for Hillary and Obama, he said. He's no longer team blue. And so they're punishing him for this. Yeah.

And it's costing taxpayers a huge amount of money. I think this is one of the worst decisions by the current administration. And if Trump gets in there, he should reverse it on day one. Well, we need to investigate. I mean, I think how we got to the point of wasting $50 billion...

That requires an investigation, I think. Chamath, your thoughts? One comment is, and this is so sad, but I'm so desensitized by the amount of waste that I don't know whether 50 billion is a lot or a little anymore when it comes to the United States government. Isn't that sad? Because now everything I hear is in hundreds of billions and trillions, but 50 billion is an enormous amount of money, right? Well, that's such a good point. I remember back in the day,

60 Minutes used to do these segments on waste, fraud, and abuse at the Pentagon, different parts of the government. $42 billion just spent on something that really taxpayers could have for free or without the government getting involved. And $42 billion that was lining someone's pocket when the service doesn't even work, that would have been a scandal. And the media would have covered it.

But the media doesn't even cover it these days. And again, it's because the media has become so tribal that it's better dead than red and blue no matter who. And so because the media would have to admit that Elon's already solved this problem, they just can't go there. They won't even cover this. And so we have no accountability. There's no accountability on the government. If I had to just take a step back and just generalize going forward, do we want to live in the kind of

administrative state where they will pick people that they dislike based on totally random criteria, a tweet, a meme, a post, and then all of a sudden punish a bunch of the rest of us because of that.

They're punishing all of America because they collect our taxes to waste on it. And then they punish the people that they actually say they're going to uplift by not delivering what they promised. And if you take Elon out of it for a second, the problem was when we crossed the chasm and did it with the first guy, him.

But the reality is there's only one of him and then there's a lot of the rest of us. And what will happen is people just get added to this list of folks that certain nameless, faceless people in the administrative state dislike. And what happens is the country slows down and the country wastes money and the country pilfers it away. And that has to stop. And so what really bothers me about these things is, A,

I don't know how to undesensitize myself to the fact that all of a sudden now, because of just all of this sloppy waste, I didn't

react as much as I should have to just $50 billion being flushed down the toilet on these two projects. And then to Jason, your point, it is a solved problem that you can give incredibly cheaply. And the fact that it's not left to private enterprise to solve this, and instead, it's just brazen partisanship combined with retaliation combined with incompetence

And buying votes by giving this money to other vendors who are giving them donations. And just to give the Democrats their due, what happens if then Trump does the same thing for a solution that you support and you need and you think should be everywhere? The point is, we don't want any of this stuff under any administration. And the minute that one administration breaks the seal and makes it acceptable to

It becomes part of the water table. And that's the real problem. We broke the seal on this crazy multi, multi trillion dollar spending, and it is just never stopped since then. And, you know, the incentives really matter. If you look at a private company, if you were at Klarna and to our previous story, and you go to the boss and say, I know how to get rid of these, this wasteful spending we're doing here, we can get rid of all tier one calls with AI and save that money, you get a promotion.

If you're in the government, you can't, if you're a politician and you cut this program, your constituents get upset. You don't have that stuff being built in your district. There's a perverse incentive that you can't buy the votes, which is why these folks are constantly trying to buy votes. And the good news is, the good news is I really applaud the people that have the courage to

to show this stuff on X, to tweet this stuff out so that the rest of us know about it and the person that talked about the NYC thing. But then the next step has to happen, which is that we all need to decide that this stuff needs to stop. Otherwise, it's going to bankrupt our country. And we have to celebrate it. That's the key. If we can celebrate people saving money again, like Malay is getting a lot of credit. And that's up to us, leadership in podcasting or the media or

or influential people who have followings. If you point out, hey, this is a waste, go save this money and somebody does save the money. Well, why don't we start celebrating people saving the money and doing the right thing here? Because this is our children's future. Is it true that Kamala was the broadband czar that was responsible for this thing? I mean, it's who knows? No, because I saw it. I saw that a bunch of senators wrote a letter to her and they claimed that she was the broadband czar, but I don't know if that's true or not true.

And whether she was responsible. Remember she was the AI czar? I mean, the administration did put her nominally in charge of various technology initiatives. Here's an idea. Save money. Get the best solution at the lowest price and then reevaluate that as you go. And I just want to point out with the, this is a subtle point, but Elon also open sourced his patents for the superchargers and let anybody do them.

And he opened up the superchargers to other vehicles, which he didn't have to do. And when they gave him a loan back in the Solyndra days and the Fisker days, remember they gave these incentives in the form of loans? He's the only guy who paid it back. Everybody else failed. So now you're punishing the guy who actually built the infrastructure for both of these projects.

So, the reward for actually doing the right thing, which Starlink did, SpaceX did, and Tesla did, is to be punished. And then you're giving a leg up to somebody else who's building these charges. Who's more qualified to build these charges at scale? Or a satellite network at scale? The person who's already done it. He's already done it. I do worry that there's a growing version of the Elon derangement syndrome that's also kind of like festering. Yeah, for sure. Which...

It just stops people from thinking rationally. Of course. I mean, we're talking about laying fiber lines, cable modems to people who are hundreds of miles into the countryside. That makes no sense when you can just beep, put a satellite dish up today.

what are we even talking about i mean government has never been particularly efficient but there was a period of time where people would at least care about wanting to make it more efficient and it would be a scandal if there was political corruption to try and bias the result in a way that actually deprived the intended recipients of the program from getting the services they were supposed to get and cost the government way more money than it needed to we're so far beyond being that country anymore

Where we actually debate the best policy. Now it's just like we're warring political tribes. And the objective of the party is to punish its political opponents, to engage in retaliation, and to basically loot the public coffers as much as possible on behalf of their constituents. And that's what's basically happening.

You know, it's completely dysfunctional. Well, let's use this podcast. If you see government waste, tell us. And no one really cares because the media doesn't really shine a light on it because they're completely tribalized as well. I agree with everything you're saying except the last part. I don't think it's on behalf of their constituents. I don't think any of us see any benefit from any of this spending. No, no. I meant their donors, their donor constituents. Yes. Not the citizens of the country. Yeah, yeah.

But who's winning in this? It's not like this $42 billion lining the pockets of, I don't know, name me. For sure. How do you think these contracts get awarded? For sure, all those fiber companies that are going to lay that fiber are going to get that money. And then they're going to kick back the contributions. But it's been three or four years. They haven't done a single thing. I mean, the...

I still think they're cash the checks. It seems like we're at the stage of just pure incompetence and retaliation. We're not even at the stage of actually then giving it to anybody else. I mean, that would be... So they're giving the money away and they're so incompetent they're not getting the political benefit from it. They're so incompetent they can't get it out of their own way. But somebody's getting that, call it 50 billion, that

we don't need to spend. And the way that money is awarded is going to be political. You don't think that they're going to turn around and give big political contributions? Well, I think the good news is that the more of these things we shine a light on, the harder it'll be to

hide when these grants are actually given or what the execution is. And let's start a running list. Let's start a running list. No, to your point, Sacks, maybe like, you know, we need a revival of the 60 minutes, you know, waste, fraud and abuse. On this program, we'll do it at the end of the show. Every time we'll have a running list at all in.com of just every one of these scandals and we'll feature it. So leak it to us first. Send it to us. My DMs are open. All

All right, listen, early stage investing has always been hard. There was a tweet storm this week that Y Combinator might be having a hard time replicating their early success. We'll discuss it now. A thread this week from ex-user Molson Hart caught a couple of people's eyes. He made the case that it's been a rough decade for YC based on the accelerator's top companies page. YC lists its top companies by 2023 revenue there.

And you'll notice there's not a lot of companies from the recent cohorts out of the 50 companies featured. Only three are from the classes after 2020, most of them being from the early 2010s. Obviously, that's because they've been around longer, but it sparked a big discussion that there were so many winners from the 2009 to 2016 era and that maybe the class size at YC has expanded a whole bunch.

And maybe that's part of the problem. But there's a bigger problem in VC that we've talked about here. Here's a chart from Carta that just shows the percentage of VC funds that have made a distribution since 2017. Over 40% of 2018 vintage funds have not made a single distribution yet.

And it's getting to the point, year five, six, or seven, where you probably should have had some distributions occur. Obviously, a lot of this has to do with maybe M&A and those early wins being taken off the table. We've talked about that a whole bunch. But here's the chart that kind of gets really interesting.

An explosion in fund managers occurred, as we all know, and this chart shows from PitchBook, the first-time VC managers that raised a second VC fund as a share of all first-time VC managers, and it's now down from above 50% to below, gosh, 15%. So what are your thoughts here, Chima? My gosh, venture is a really, really tough business. Every year,

For the last seven, six years, seven years, I have published my returns, which most VCs don't want to do. I do it because I go back and I look at it and I think having public accountability actually drives some good decisions. They may seem suboptimal in the moment, but they in the long run turn out to be good decisions. And the biggest one has been generating liquidity.

So Nick, you can throw up this thing, but I'm sure there are funds in each of these vintages that have done way better than me. So I'm not saying it is what it is. But what I want to point out is if I go and look inside of these funds and tell you how hard it has been to generate this DPI, it's like dragging an entire just...

sack of potatoes over the finish line. It's like a truck of dead bodies over a finish line. It is super, super hard. And the things that we have fought are two. One is that the gestation of companies has totally blown out. We used to be in a world where by year five, six, or seven, you could return money. You just can't do that anymore unless you get extraordinarily lucky, which by the way, I got when Saks was running Yammer.

It was an enormous win for all of us. But that is just exceptionally rare. And that was M&A in year, what, five or six? Yeah, but there's so few entrepreneurs capable of that. He's one of maybe five or 10. So other than that, I've never really had a company that has generated liquidity in year five, six, or seven. They've always generated, if they've generated it at all, in years 11, 12, and 13.

And so the problem with that is that at some point, you have these paper marks that say you're winning and things are working, but there's no path to liquidity. So then what I did was I stepped in to the secondary markets and I would sell. And it would really upset certain founders. But I was very clear that when I was running outside capital...

And I was running outside capital on behalf of really organizations that I believed in. The Broad Foundation, the Mayo Clinics, Memorial Sloan Kettering. My job was to get them money back. You know, these were their pension funds. These were the things that they used to build facilities. Cancer research. Cancer research. I didn't have the, you know, ability to just sit on my hands and say, oh, you know what? You're 15. Don't worry.

So it's just meant to say that the tactics of generating liquidity in venture are very misunderstood and very underappreciated. And even then, you sell some things that are just absolute winners that had you waited another five or six years would have turned another one or two turns. But that's not the job.

The job is not to maximize absolute every single win. The job is to return capital in a reasonable time period so that your investors don't run out of money to give. Yeah. So it's a tough game, man. It is really, really, really tough. Yeah. And the inside. And sorry, by the way, and I feel this now because, you know, the last five or six years has been entirely my own capital.

And my gosh, it's hard. Managing liquidity is impossible, especially when you can't rely on anybody else. So it's a tough game. Well, and thank God for the secondary markets even emerging, because at the same time that the secondary markets emerged and people were willing to buy venture assets going into their second decade. I would have been in real trouble without reasonably liquid secondary markets. Myself included. My numbers would be a quarter of what they are.

Yeah. And I took advantage of almost every time I had one of those opportunities to sell some shares, pair some positions. And that's how we got our DPI as well, because let's face it, Melina Khan and the anti-tech sentiment has led to these large companies not buying startups. And instead they compete with them. They just say, we'll build it in-house because you're not letting us buy it. And it's broken the entire ecosystem now. That's broken. The IPO process is broken.

I tried to flip that on its head with SPACs. You know, some work, some didn't. Many didn't in the end. Many of mine didn't work out at the end. There was a period where it looked like it was working, but...

These are all attempts at changing the liquidity cycle of these companies because the way that things stand today, we are not in a sustainable industry. It is if you raise funds and think about fee generation, but it is not if you think about returning money to founders, LPs, getting employees compensated for many years of oil that they put in. It's a very tough game right now. Well, SACS right now, we're seeing people do things like

selling, you know, their early SpaceX or their early Stripe, whatever it is, to other VCs to later stage funds, a lot of ways to try to secure DPI. What's your thoughts on the state of venture today, given all this data that we're looking at today?

Well, two points. So first, I agree with Chamath that the amount of time it takes to generate an outcome for, I'd say, most startups is longer than the 10-year period of these funds. And these funds can be extended up to 12 years usually, but then what do you do after that?

This takes a lot longer than that in a lot of cases to generate a meaningful outcome. I just had two companies that I invested in in my second fund. So in 2019 and 2020, so four years ago and five years ago, just got marked up.

And it was a big markup of the company's doing well. I call them late bloomers. It took four to five years for them to accomplish what they wanted to in terms of like building out the tech. I mean, I invested at like the earliest stage. So that's how long it took. And now they just did growth rounds and they're kind of off to the races. But, you know, I could easily be 10 years from here to get to a liquidity event. So you're talking about more like 15 year funds. So I agree with that point. The second thing, though, is that the big thing that's happened in our industry is we had a bubble.

in 2020 and especially 2021. And we just had a ton of capital come into the industry because the Fed and the federal government airdropped $10 trillion of liquidity onto the economy in reaction to COVID.

And not all that money went into VC, it went into a lot of places, but the VC industry was flooded with cash. And you see this in the deployments. I mean, in those bubble years, there was something like $200 billion a year of capital deployment when normally it's $60 to $100 billion.

So, if twice the amount of money is going into the industry and is being deployed, and rounds are now twice as big, and valuations are twice as big, that has a huge effect on returns. So, for example, the average venture fund is like a 2x return. But if the entry prices were artificially doubled...

then there goes your return right there. You get two X's times one X. So I think we're just in the hangover of this massive liquidity bubble that didn't originate in the venture capital industry. It came from, frankly, the federal government, but we're just downstream of that. Now, what I would say is I do think we're at the tail end of working that out.

And the good news is that we now have maybe the most exciting tech wave ever, which is AI. Definitely the most exciting tech wave since the internet came along in the mid to late 90s.

The hope is we're finally going to have really exciting things to invest in again. But yeah, look, I think we're at the tail end of the last cycle and the beginning of a new cycle. And vintage distortion is so real. It's very hard to understand how each of these vintages with your late bloomers or overpriced things, companies getting $100 million rounds at a billion dollar valuation before they have product market fit. And those distortions

were just so pronounced the last five to 10 years that we're now sorting them out like a house of mirrors where you don't know who's tall, who's fat, who's skinny, what the reality is here. And the other big thing is this peanut butter effect that I tweeted about today

you know, during peak Zerp, you had all these exceptional team members, you know, the number two, three, four, five person at a company that was doing great, they would leave to start their own company. So the talent got spread. Then you had so many of these founders rushing into the same vertical. So you'd have 20 startups, because there was too much capital pursuing the same opportunity, you pursue the same opportunity, what happens to

earnings, they get spread, then what happens to customers, they get spread across 20 different products competing for the same customer. And then what happens with, you know, ownership stakes for us as GPS and LPS, Chamath,

The ownership stakes, because the valuations went up so much, they got spread like peanut butter. And instead of a Series A getting you 20% of a company, it got you 10. Instead of a C-check getting you 5%, it got you one. There's no DPI possible. You nailed it and Sachs nailed it. And the thing to remember is both of those two things now work together to erode the return stream for the general partner, but really most importantly for the limited partner. So I do think that

We are in a situation where the average returns are going to decay by 50 to 100% because of what SAC said and because of what you said. On top of that, I don't think we know what the actual cap structure needs to be for a successful AI company. Is it 20 people that does the work of 2000 now because they have all of these agents and systems that work on their behalf?

If that's true, giving that company hundreds of millions of dollars is actually the opposite of what you want to do. You want to give that company 10 or 15 and then let them cook. And so we have a right sizing of capital problem that needs to happen. The data would tell you, though, that the industry understands that. So the fact that we've gone from 50% of people being able to raise a fund to 12%,

means that a lot of people will get washed out of the industry, less capital being raised, which probably is foreshadowing the fact that these companies will need a lot less capital. But you know, that has a lot of implications as it ripples through our economy. It has, I think it's very good for the early stage. I think, you know, you guys are very good there. You've talked about how it's good for you. It's very complicated, I think, for the expansion and growth stage capital. And then I think it's going to be

There's going to be another turn on what happens on the IPO markets because you can't have so many companies waiting with very, very few ways of accessing public market capital and exposure. I just think that is fundamentally broken and we're going to have to reinvent. We tried once with SPACs. We're going to have to go back to the drawing board and try again. Correct listings, secondary markets that are more fluid. I don't know what it is, but we need to do something because the status quo doesn't work.

I think there's so many good points that we're hitting here. I'll just say the other thing to build on your point about, hey, these take less capital. You have to look at what does your ownership, after you've been diluted half by 50% as a seed or series A investor, you're going to be down to half. So if you own 10%, you own five. If you owned seven like YC or we do in a company, you're going to own three.

You're going to really have to model out is the valuation you're looking at, what does it pencil out to for an outcome? And when I did this with our investments, I saw a leak in my game, which was, hey, I'm putting 100K into a $25 million round or a $50 million round as a follow-on investment to support the founder. OK, what does that do for my LPs? Well, that 100K would need to hit

some extraordinary outcome, $5, $10, $20, $40 billion in order for us to return the fund. So now my team understands, hey, take that $125K, that $250K, that $500K, do four more accelerator companies with it because those could return the fund. And that fund math, people stop doing. I think all these fund managers who are getting wiped out, they never penciled out

What does this company I'm giving a million dollars need to hit in order for me to return my fund?

And now they're finding out that it doesn't work. Look at the thing that Saks just tweeted. Look at that. Let me see. You know, everybody's course correcting. I mean, it's basically the capital deployments gone back to where it was in 2019, let's call it. So again, we had this bubble. The foam started building in 2020, but you had COVID. People didn't know what to think. So there was some restraint, I guess. And then 2021, it just went wild. Yeah.

That was nuts, man. Well, I mean, the question is... Those middle vintages are just going to be garbanzo beans, 21, 22. Well, you know, that's such an interesting point. If you could return capital, you're going to look like a Euro.

Also, Chamath, I remember, I don't know if it was Michael Moritz or Doug Leone, but I was talking to Sequoia about the time dispersion of your fund. Like over what period of time are you deploying a fund? And man, people started deploying funds in 18 months because they can raise the next fund so quick. So like, screw it. I'm going to deploy this fund in 18 months, 24 months. And LPs were saying to me like,

What period are you going to deploy this? And I said, well, you know, I was taught by Fred Wilson and this person, 36 months, 48 months would be a good window to deploy capital because, you know, it smooths it out. I think you're saying the dirty little secret of the venture business, which is at some point people get to a fork in the road. If they hyper-optimize for returns, I'll put Benchmark, I'll put Fred Wilson and USV, I'll put Sequoia's early stage fund.

They have to introduce time diversity. They keep the funds small and they look to hit grand slams. But there are many other people, and I would say the most of the set outside of that take the road more traveled, which is then you optimize for size, which then becomes a fee game. And so you optimize for velocity, get the funds out as quick as possible, raise a new fund. They have no intention of generating returns.

because they have no ability to. When you have absolutely no time diversity in this business, in a pool of capital, you're giving away one of your best edges. David just talked about it. As a smart practitioner, he was able to nurture these companies and all of a sudden they start to win. If you've all of a sudden flushed all your money in fund one, then you go to fund two, fund three. By the time something in fund one hits,

What are you going to do? You're going to cross the funds or you're going to justify taking money from the left hand to pay the right hand, or you're just going to let your ownership wane because you

frittered all the money away. These are all the problems that most of these folks have encumbered themselves with. It's very difficult to get out of. It's going to take a look. In fairness to them, they probably got good while the getting's good, so they'll make a ton of money in fees, but they will not be able to raise funds. And those fees are not clawed back, folks, for those of you playing along at home. Just by the way, I feel better about those late bloomers in my portfolio because I know the marks are real. Because if they're getting marked up now...

then it's very, very solid compared to frankly, some of those marks that we got in the bubble year, like 2021, I call them tiger marks, whether it was tiger or not.

It's just less real, quite frankly. And a lot of those companies are retrenching and have issues. So a mark now, it just means something different than a mark then. But look, I want to, you know, just so we're not like totally beating up on VC. There was, you remember that in this bubble period of September 2021,

everybody thought that this party would just continue forever. And this is a good example from the Wall Street Journal, where I was talking about how university endowments were minting billions in golden era venture capital. So

The bubble wasn't just in VC. It was in the public markets too, because we had ZERP, right? Like interest rates were zero, liquidity was just flowing. And so it was very easy for companies to get liquid, they IPO'd, and then the valuations were stratospheric. So the distributions to LPs were massive in 2021. And then that led to, again, more funds, being able to raise bigger funds. Everyone was just kind of paying it forward and thought the party would just keep going. So-

This is what happens in a bubble is everybody thinks that it's just going to keep going like that.

with your customers, building a team, making great bets, supporting late bloomers. That's the critical part of all this is the process. And you can make your process better. And so with my team internally, I'm constantly talking to them about our selection of companies, how we help companies get pulled through and get downstream funding, how we literally our big effort this year is how do we introduce our companies to the top VC firms,

And we've been working on that as a internal project, right? Of just getting our great breakout companies to the best investors to increase our pull through. It is a process and you have to trust and focus on the process. Well, look, ironically, just to end on sort of a positive note, if these interest rate cuts are real, like if we just got 50, if we get another 50 this year, if inflation's really tamed,

And interest rates are never going to go to zero. But if they go down substantially, and we have this new AI disruption, this new AI tailwind, we could be back in another golden era. It's not going to be a bubble, but it could be another golden era. So we'll see. Start companies from your lips to God's ears.

Love you guys. I got to go. Love you. All right. Shamath had to go do work, apparently, starting this new concept, SACS, where Shamath is actually going to work at a company. We never got to talk about the debate because we were busy doing the summit and we took the week off from a new episode. People wanted to hear your take. What did you think of Kamala and Trump, the one and only debate we're going to hear, apparently? Any thoughts? I think that

Kamala Harris performed better than expected. She did that, I think, mostly through having canned answers to topics. And she was able to kind of memorize those answers and say them. And she was never knocked out of her preparation. She was well-prepared. Yeah. I think she was well-prepared. However, we now know that these were canned answers because in subsequent press interviews,

She gives us the exact same thing. It's like a jukebox where you just push the button and you get the same answer. Greatest hits.

And then, you know, she, I guess, pushes B-26 in her head and then it begins. So I was born in the middle class. And it's working apparently, right? It seems like it's helping her. I think what you saw is that she got a bounce out of the debate, but now it's sort of like a lot of these...

bounces, there's been kind of effervescence to it, and then it kind of settles down back to the recurring pattern. And so I think the election is extremely close, but I don't think... Oh, yeah. I mean, every day, it's like a poll going one way or the other. I mean, this is the closest of our lifetime, maybe.

Or that I can remember. I mean, it's nuts how this thing has flipped over and over again. What did you think of Trump's performance? Were you disappointed? There were some rumors people were a little upset that he doesn't prep as much as he should. What's your advice there? Well, look, I mean, I think that he was in a very difficult situation. You basically had a three-on-one situation where he was up against not just Kamala Harris, but the two debate moderators. It turns out that Lindsay Davis is Kamala's sorority sister.

David Muir was fact checking him constantly. And some of those fact checks weren't even correct. For example, we now know that the Springfield city manager has acknowledged complaints about pets being eaten. Oh, here we go. I was wondering if we were going to get through the episode. It's as far back as March. There are videos of him

talking about the complaints at a city council meeting. Now, you can say that you don't believe those stories or whatever, but those reports were real. But David Muir fact-checked in real time saying that Trump was wrong. And there was like this effort to kind of gaslight and make him sound crazy during the debate when there are, in fact, sources for what he was saying. And it might have thrown him off a little bit, I noticed. Like, it was like he, I agree, going into it,

I think they need to negotiate in the future. You know how they're negotiating the microphones on or off, audience on or off. I think they should negotiate. Are we fact-checking in real time or are we not fact-checking? And who's doing that fact-checking? And they only fact-check one candidate. For example, when Kamala Harris repeated numerous hoaxes like the Very Fine People hoax, the Bloodbath hoax,

The suckers and losers hoax. I mean, these are things that were already addressed in the last debate. And, you know, even left wing sites like Snopes have said the whole very fine people thing is totally made up. Yeah, for people who don't know that, there's been selective edits. I mean, there's been selective edits forever, but that one is particularly egregious. It's really egregious. The bloodbath one is really egregious, too. Yeah, because he was talking about the bloodbath and EVs. Yeah, and the auto industry wasn't ever.

a January 6th extension, which it's not. Right. So she was able to say these things and never got fact-checked once, which meant she never got knocked out of her preparation. And let's also be honest. Trump is hyperbolic. So if you are going to say...

you know, oh, we're going to fact check Trump. Like there's a lot of material there. And he just he's a hyperbolic guy. That's kind of his shtick, right? I mean, but here's the thing is that in the wake of that debate, look, I think a lot of people scoring the debate on like technical debaters points would award her the win for that night. I don't clearly. Yeah, I don't deny that. However, what I think has been surprising is that in the wake of the debate,

You're seeing her support sort of return more to its previous level. And so what I'm saying is the effect of that's wearing off. And I think one of the reasons why that's wearing off is because Trump still has the killer issues in this election. He's got the border and he's got inflation and the economy. And Harris may have done well, again, on debaters points. But what substantive answer did she give in that debate? Except to say, I'm not Joe Biden, which

is, I guess, true. However, what you're basically saying is you won't defend your own administration's record. You are the incumbent. You're not the change candidate. And you're saying that people should vote for you because you're not Joe Biden. Well, what is it about Joe Biden's record that what is it about Joe Biden's policies that you don't agree with? I mean, after all, you cast the tie breaking vote.

for the Inflation Reduction Act. You cast it for the $2 trillion American Rescue Plan that set off the inflation. So the debate moderators never asked Harris, well, what is it about you that is different than Joe Biden on a policy level, other than the fact that you're a different people? Apparently she's pro-gun. I thought that was like a great moment for her.

Objectively, I think, you know, and I've said this forever here on this show, putting our feelings aside about the candidates, I think whoever comes across as the most normal or the most moderate is going to win. And I think she's done a great job of like,

convincing those moderates that she's not crazy and he is? What are your thoughts on that? Because people looked at this very podcast and they've said to me, my God, that's the Trump I want to vote for, that Trump 2.0, the all-in Trump. And then people are like, ah, he's going back to the insult comic Trump, but I don't want the chaos. What are your thoughts on moderates

specifically in the swing states and this sort of strategy. Let's talk about the Teamsters. So Biden, when he was still in the race, was plus eight among the Teamsters rank and file.

And now that Harris is the candidate, Trump is up something like plus 26 with the Teamsters. Yeah, why is that? Because she's, isn't she pro-Union as well? He was Union Joe. So, I mean, it was like in the name. I understand why they loved him. There's something about her policies and I think her...

Look, I think within the Democratic Party, I think it's partly personality, but I also think it's policies and cultural issues. So within the Democratic Party, there's always been two tracks. There's the beer track and there's the wine track.

And so, you know, Bill Clinton was classic beer track guy, right? Beer summit with Obama. Right. And I think Joe Biden was beer track. Then there's kind of the wine track, which is the more, it's the part of the party that cares about these boutique cultural issues, starting with DEI and equity and trans and things like that. Limousine liberals is what they used to be called, but I like yours, wine liberals or the woke wine liberals.

Basically, the entire California Democratic Party is very wine track. I mean, Gavin is very wine track. Kamala Harris is very wine track. You can understand why a blue collar worker, it doesn't appeal to that. They want more of that lunch pail traditional Democrat. But that Democratic Party doesn't really exist anymore. I mean, the Democratic Party has evolved to be the party of the professional class, whereas the Republicans are more the party of the working class. And you're now starting to see it. I think Biden...

was the Democrats' last vestige of this working class party. He really worked at being appealing to those voters, you know, the whole Scranton Joe image. Yeah, Union Joe. Yeah, exactly. Whereas Kamala, when you get her talking in an unguarded moment, and it's not a canned answer, she's going to talk about diversity, equity, and inclusion. And that's not what your typical teamster wants to hear. Let me ask you a challenging question, because one of its likes when I ask you a challenge a bit. If Trump loses,

What do you think will be the cause of the loss? If he loses, like strategically when we look back on the last six months, what do you think you would change or would cause it? Well, look, I mean, the great asset that Kamala Harris has is not her likability. It's not her track record. It's not her policies. It's the fact that she's got the media behind her.

And if you look at, like, for example, ABC News, 100% of the coverage by ABC News is positive, whereas something like 93% of their coverage on Trump is negative. And you saw this, that before Harris replaced Biden as the nominee, she had very...

low favorability ratings. And then the media basically reinvented her as this transformative candidate. So look, when you've got the media willing to operate as de facto members of your campaign, that's tremendously powerful. If we had a fair media, this election wouldn't be close. So that is the advantage the Democrats had. Now look, should Trump have

done the debate with ABC News? No, I think he should have chosen more fair moderators. I mean, to their credit, I think CNN played the Biden-Trump debate pretty fair and down the middle. But ABC, I mean, it was predictable that, like I said, I mean, one of the hosts was her sorority sister, they're friends. So, you know, I think that if Trump loses, you could say that his willingness to

to walk into the lion's den, take on all comers, do every interview. You could say maybe that wasn't as strategic as what she did. But at the end of the day, I think that voters will appreciate that both Trump and J.D. are willing to do basically every podcast, every interview. They're not afraid to answer questions. And when they do answer questions, you can see them thinking, and they don't give you the same canned answer they've given 10 times before, including at the debate. So yeah, I mean, that's my take. What's yours, J.K.?

On which aspect? Be more specific. Give me a specific question. What do you think? If she ends up winning, what do you think the reason will be? Yeah, that's a good question. If she ends up winning, I think it will be that people believe that they... I think it will be that moderates in those swing states and women believe that it's too much chaos and that Trump will be

too much. They want a calmer same thing. Reason Biden won, right? Like that there's this like concept that the adults are in the room and it will be calm and it won't be chaotic. And I think people just still see Trump as a bit chaotic. And I think that's the big fear. And I think they've played the abortion card and the right to choose really well, even though Trump said it here, I'm not going to sign the abortion ban. I'm pro IVF.

I think they have that really great win of saying, hey, you bragged about overturning Roe v. Wade. Probably wasn't smart to brag about that. And they have that clip that they can keep reinforcing. So if he does lose, and I don't know that he's going to lose, I think there's a lot of people are going to go in there and vote for him, but not say it to pollsters and not say it to their family and friends because they're embarrassed because of the pressure against Orange Hitler, you know, this whole rhetoric that he's

going to, you know, overturn democracy. So I think it's a pretty good chance that he's going to win, actually. I don't think that this... Yeah, I mean, look, I think... In a close race, right? They say the statistics in a close race favor him.

Yeah, look, I mean, maybe we're asking the wrong question here, which is why would he lose? I mean, I think maybe the real question is why is he favored to win? Because I think the polls, including Nate Stilver, still show him favored to win. And I think that when you look at what the big issues are in this campaign and what has people agitated and upset.

why they think the country is on the wrong track, something like 65%. It has to do with the economy. It has to do with inflation. It has to do with the border. I think that on the cultural issues, the trans stuff drives parents crazy. They don't want the government telling them what to do with their kids. So it's hard to think of a killer issue other than maybe abortion that Harris has on her side. It feels like all the issues cut Trump's way. But again, the thing that Trump doesn't have, and there's no way for him to fix this, is the media is just so

in the tank for Harris. Now, you raise a good point. Look, could Trump be more disciplined? Yeah, absolutely. However, you know, I think that what amplifies that is the fact that the media is quick to jump on every little thing he says and distorts it. And he sets himself up for it. You know, like part of what makes him activate the base is that erratic behavior, his shtick, you know, the comedy. And then I do believe that it gets weaponized by the press.

Because it's like such so easy for them. I agree with you that Trump could be more disciplined. However, I don't think it's as bad as what you're saying, because if it were, there'd be no need to make up these obvious hoaxes. There'd be no need to lie about the very fine people or what he said about bloodbath. So if he was really saying that many outrageous things, why would you need to keep inventing things that he didn't say?

I think they're just stacking them. Yeah, the answer to that question is just throw everything you got at him. Yeah, they're throwing everything at him. But look at Kamala's interviews. I mean, she hasn't given very many. But, I mean, her answers are just – I mean, just watch them. I'm not going to characterize them, but just watch her actual interviews. I mean, Megyn Kelly said it. I mean, Megyn Kelly thinks she's stupid and not bright. I mean, she's not the most dynamic speaker, that's for sure. And she doesn't seem to be able to –

have a dynamic debate with intelligent people who are experts in their field, let's say. You know, she can't hold her own in the way you can see J.D. can, right? And Trump can. So here we go. And just on the second assassination attempt, I don't know if you even want to go there, but I mean, gosh, I'm so glad that he didn't get shot at again. This is scary stuff, folks. This rhetoric's got to come down. I keep saying it. Nobody wants to

Listen to me, but man, be-

motivation there. Where did Ruth get these ideas? They've been endlessly amplified by the mainstream media. And it's not like a one-off comment. It's been the central narrative for the last several years is that somehow Trump represents this existential threat to democracy. And one way or another, that threat must be eliminated. And I think Ryan Ruth simply took literally the

what the mainstream media has been saying. - 1% of your followers is what I tell everybody, high profile people you and I both know is 1% of people

in your following and we all have large followings uh here and and there's certainly people who have extremely large followings one percent are mentally ill like when i say mentally ill i mean severely mentally ill and if it's but one percent of your following if it's 0.1 this could be thousands of people and this is what happened to john lennon and and other famous people who've been killed tragically is those mentally ill people interpret things in a very different way and when you say

you know, a phrase that has triggers in it, threat to democracy, fight like hell, whatever it is, they interpret it differently. And so just please, folks, if you can. Well, when you call the guy Hitler for years, and again, you create

millions or billions of impressions around that. And it's not like a one-off statement, but it's something that's drummed into the public over and over again. It seems to me you're asking for trouble. Stay safe. Please tone down the rhetoric, everybody. And we will see you next time on the All In podcast. Bye-bye.

Besties are gone. Dog taking a listen to your driveway. We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension, but they just need to release somehow. You're the beat. You're the beat. We need to get merch. I'm going. What?