Big Fed rate cuts, AI killing call centers, $50B govt boondoggle, VC's rough years, Trump/Kamala

all right everybody welcome back to the Allin podcast the Channel's been active we're in the Afterglow we're in the Allin Summit after it's so glowing that freeberg couldn't make it he has been writing a high Nick told me that in the last week just we uh we've only put out a half the clips and they've already gotten 20 million views oh my Lord I you know I I I so we'll be we'll 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 breach 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 uh but uh free Berg's in his Afterglow couldn't make it but he's very busy right now look how happy he 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 free BG's version of founder mode he's in that's freeberg founder mode he's hitting the bong his founder mode [Music] gives let your winners [Music] ride and instead we open sources to the fans and they've just gone crazy with it queen of he is uh he's in the Afterglow um and he won't be with us this week um but uh he organized such a great conference don't you think J he did great uh I mean he really took charge of that and just did an amazing J 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 chth what you want to do is you want to H 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 uh I just want to give free to break his flowers for executing incredibly well we all play a role jamat saaks launched a tequila company I want to say thanks to uh 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 uh 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 Sachs with the tequila Friedberg Laura Zack Spielberg Nick John everybody brought something to the table are you congratulations to everybody you scale through people that's it scale through people that's it did anybody nobody got the joke we chth everybody contributed you understand Sachs new tequila company John operations your freeberg content me with the being the world's greatest moderator up there what ch's contribution oh yeah chath showed up chath chth looked great I showed up that's just he showed up and looked great I brought my two votes and I brought my vision absolutely I would also say fan favorite you 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 and 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 uh pretty pretty great feedback do you think that you did better as moderator because you finally let go of just the conference organization what yeah I think that you were able to focus on your unique value ad instead of immersing yourself in a bunch of details that could be handled by the team I agree um it was absolutely process to get you to let go well you know you have it's it's a fair point I I did people did say my moderation was dialed in and I appreciate that positive feedback from everybody and um yeah there is something to having people you trust with the content 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 [Laughter] producer 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 curring 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 great at I I do agree with that I was talking to Jade about and she said and Nick also pointed out you were really dialed in J what 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 to focus did you have some favorite moments yourself there saxs any favorite moments for you or panels or things maybe that exceeded expectations for you well I thought the Mir shimer Jeffree 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 head 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 El elon's slightly ahead but yeah it's still like growing it's like finding an audience well I think that I think that if you if you look at the one from last year greme 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 often times 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 that's a 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 a 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 um Twitter handle and he's chamath David saxs and I'm at Jason and freeberg at freeberg just tell us who you think would be great but saaks 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 uh 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 jpow 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 mentioned immigration has helped soften the market uh 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 uh in interest that you see there from 2021 to 2023 many obviously think we're going to have more R Cuts probably every meeting for a little bit and um Dow's already at an all-time high surge 300 points on the news here's um here's uh some interesting data about the 50 basis point kickoff Cuts so uh this is where it gets interesting chth 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 bips 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 Co hit 0107 2020 very severe situations and the what happened in the markets is what I want to discuss uh with both of you today in 20 2001 Market fell 31% in the two years after that rate cut in 2007 Market fell 26% after 2 years so and 2020 despite all the fears Market ripped 44% over two years what's the more likely scenario chth is this similar to the Doom great financial crisis or similar to 2020 well I think 2020 you have to put it at Big asteris 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 what do you take away from that I think that you have to like realize we are 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 two 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 saxs any thoughts here just balls and Strikes 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 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 Pal's comments though are indicating that the econom is in good shape he said the economy is in very good shape that um basically indicating that they had tamed inflation and that they would look to cut another 50 basis points this year so Pal's rhetoric is uh in a way at odds with the magnitude of this cut the you know so why didn't they just cut 25 basis points I think people are trying to figure that out reading the tea leaves into 50 because they could just do 25 a month sure mon the econom is hot yeah if the economy is hot why would you tiptoe into rate cuts uh and just do 25 now that's the key thing if you look at the 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 in even in the next 18 months and it is dramatically lower for where they are now and I think that support sacks your 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 and I think so much of this has to do with Unemployment uh 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 a talent in America there was so few people available to 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 sales people we're still looking for developers we're still looking for operations people now it's the opposite it's like I I just I'm hiring producers here in Austin because I'm building in my inperson 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 midp paying jobs and this will dovetail into our next story about Amazon making Cuts I'm very worried about the 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 sacks I'm not worried about the hall out of that that class you have disain for them but I mean just in terms of the labor market what do you see you know in companies right now you know hiring the talent pool Etc well I mean in tech things are are pretty good I mean they 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're they've return 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 the reason why a lot of people were predicting a recession including me for a while is that the yield curve inverting has been an almost perfect gug 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 over corrected they slam on the brakes and then they cut rates to basically make up for the effect in 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 recession but this is the the thing that people are concerned about yeah well saak 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 cuz you know open AI just released their audio API you saw that at the All In Summit we released A Mir shimer AI yeah where we trained it on all of his work and you can go to Mir shimmer. and ask a 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 I think within the next two to three years you're going to see a massive disruption in that 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 chat GPT 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 gonna also kill this like I I don't want to talk to a human just change my flight just you know question yeah I mean you talk about disruption call centers are a very big part of the economy in certain geographies Denver Sal Lake I mean parts of 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 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 um 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 Rock 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 AI 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 it's just 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 yeah we don't need to wait for like some perfect llm model and I think this is why this is going to be a big big disruption let me people potentially are going to have their their jobs disrupted or at least transformed well it could be the end of the entire career as well jamath if you were to look at this 4x4 sort of quadron chart that sax is describing which is the cost of an era you know and um the actual complexity of the job perhaps or the cost of the job how do 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 an a very large regulated highly regulated company public company and they have a very complicated set of people and processes because of the 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 a in the mid 80s then we were in the mid90s then we were you know 97 98% but there was 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 consistent 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 what do we do do we so we're 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 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 saaks we're doing that today even though they're the best models imagine how good those under 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 it's very stunning actually it's really have you guys worked with the 01 preview yet I I just literally have been using this new reasoning engine that open AI 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 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 the better answers the wonderful thing is that open AI will preview o1 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 llama 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 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 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 SX and then I I'll show you what 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 very created you've got all the previous email support you know and calls yeah the calls have been recorded so you can out 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 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 if the foundation models are advancing at such a rate exactly like a year from now why couldn't a like a developer just a startup of a few guys take next year's model train it and then commoditize the you're you're making such a good point this 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 and specialization to actually solve these problems and S 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 you you'll be able to deploy these 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 by the way just to build on that that the other thing that's now possible and you saw this with Clara because Clara put out this like cryptic tweet 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 like range how how can a company that big deprecate those two systems of record how is that even it's how is it means they're writing their own right well I'll tell 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 s force or or work day 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 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 pths 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 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 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 CL 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 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 thing for all of us to look at yeah I mean to 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 you know 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 thousand of dollars per user right I want to I want to get Sax's point of view like 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 you know 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 I don't well I saw the clar story where they said they were going to rip out Salesforce and and work day 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 this 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 producti 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 yeah 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 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 this was a crazy one yeah so so look at but 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 so here's theor paid Oracle 600 million to build our course management portal it's built on top of oracle's people soft Suite which they refuse 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 this is egregious government waste I mean that site looks like it's pathetic I mean honestly this looks like it a it could have been done with a SharePoint site and you pay some consultant to stand it up and for 1% of the cost and to there are better plat 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 hearken back to the 90s the reason I wanted to 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 be impossible right but that that that 600 million that was wasted on that um crappy portal that shouldn't have happened even without AI right because there's like much better ways there you could you could buy a much better product for 1% of the cost so or .1% of the cost there must be some regulatory capture going on here where somebody's got a reput Rel that's what I'm saying like a 10year relationship with somebody in Albany that you know at previous Fraud and Abuse it's the same thing that's happening with um rural internet you paradoxically is our next story so let's go for it in related news of our government burning our money we're all Brad BR band 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 20121 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 a thousand days 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 1 2 3 4 5 6 seven eight e Chargers have been built as of May according to Auto Week 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 2500 planes under contract with a bunch of other Airlines and uh in the second half of 2023 alone the private sector built over a thousand charging stations in the US these are two problems that's have already been solved sacks why are we burning $50 billion in the future with on things that have already been solved we've solved for this you I own electric cars I 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 they haven't delivered any of it incompetence yes well there's there's a couple things going on here so one is typical government waste Fraud and Abuse where theyve allocated 42 billion for Rural internet haven't hooked anyone up and we could spend a fraction of that giving people Starling and allowing the private sector to do its job and why even pay for it tax why are we paying for it if it's available for 100 bucks that 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 inefficient you also have naked political retaliation going on here Ah that's the answer yeah exactly and Brendan Carr who's an FCC commissioner pointed this out he said that in 2023 the FCC cancelled or revoked an $885 million contract with the company by claiming starlink is not capable of providing high-speed internet then a year later yeah of course that was a lie and then a year later the FCC is now claiming that Starling provides so much high-speed internet that the word monopoly should be uh tossed out yeah so look this is just it's pure naked retaliation the 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 um because he's so look I mean the the Biden Harris Administration it look it's blue no matter who and Elon has drifted from being sort of in independent and not he was blue what it is Ian 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 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 I wean need to investigate I mean I think how we got to the point of wasting 50 billion dollar that requires an investigation I think chath 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 like because now everything I hear is hundreds hundreds of billions and trillions but 50 billion is an enormous amount of money right well that that's such a good point and I remember you know 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 you know 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 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 pilers it away and that has to stop and so what really bothers me about these things is a I don't know how to UND desensitize 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 two 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 votes by giving this money to other vendors who are giving them donations and just to give the Democrat 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 andar it's and the minute that one Administration breaks the seal and makes it acceptable 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 uh if you look at a private company if you were at clar 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 buy the votes which is why these folks are constantly trying to buy votes and the good news is the good news is I I really applaud the people that have the courage to show the 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 other it's going to bankrupt our country and we have to celebrate it that's the key if we can celebrate people save money again like mle is getting a lot of credit and that's up to us leadership in podcasting or the media 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 kamla was the Broadband Zar that was responsible for this thing I mean it's who knows it's just no because I saw it I I saw that a bunch of senators wrote letter to her and they claimed that she was the Broadband Zar but I don't know if that's true or not true and whether she was remember she was the AIS are I mean the administration did put her nomy in charge of various technology initiatives here's an idea save money get the get the best solution at the lowest price and then re-evaluate that as you go and I just want to point out with the it's a this is a 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 cindra 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 Char 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 just 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 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 we're now it's just like we're Waring 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 ways tell us no really cares because the media doesn't really shine a light on it because they're they're completely tribalize 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 they're donors the they donor constituents they not not the citizens of the country but who but who's winning in this it's not like this 42 is is 42 billion lining the pockets of I don't know name me how do you think all those fiber companies that are going to lay that fiber are going to get that money and then and then they're going to cont it's been it's been three or four years they they haven't done a single thing I mean I still think they're cash the checks yeah it seems like we're at the stage of just pure incompetence and retaliation we're not even at the stage of actually even 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 no they're so incompetent they can't get 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 we're going to think that they're going to turn around and give big political contributions of course they well I think I think that 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 running list let's start a running list no to your point Sak 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 have a running list at allin.com of just every of one of these scandals and we'll feature it so leak it to us first send it to us my DMs are open 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 molsen Hart caught a couple people's eyes he made the case that it's been a rough decade for y based on the accelerator top companies page YC list as top companies by 2023 Revenue there and uh 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 20110 10 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 uh 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 uh 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 winds 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 first time VC managers that raised a second VC fund as a share of all firsttime 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 [Music] 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 they may seem suboptimal in the moment but they in 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 I'm not saying you know 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 it's like dragging an entire just sack of potatoes over the Finish Line like 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 gation 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 saaks was running Yammer it was an enormous win for all of us but that is just exceptionally rare and that was m in year what five or six sacks there's so few 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 I 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 slone ketering my job was to get them money back you know these were their Pension funds these were the things that they use 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 it's just meant to say that the the tactics of generating liquidity and Venture are very misunderstood and very underappreciated and even then you sell something that are just absolute winners that had you waited another five or six years would have turned another you know 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 you yeah it's a it's a tough game man it is really really really tough yeah and the the insight and 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 yeah managing liquidity is it's impossible especially when you can't rely on anybody else so 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 you know going into their second decade I would have been in real trouble without the without reasonably liquid myself included I mean my numbers my numbers would be a quarter of what they are yeah and I 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 Lina con 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 inhouse because you're not letting us buy it and it's broken the entire ecosystem now that's broken the the IPO process is broken I tried to flip that on its head with backs you know some worked 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 yeah 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 you know toil that they put in it's very tough game right now well Sachs 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 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 I 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 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 yeah a liquidity event so you're talking about more like 15year 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 the um federal government aird dropped 10 trillion do 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 outcome a huge effect on returns so for example the average Venture fund is like a 2X return but if the entry prices were artificially double then there goes your return right there you get 2X 1X 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 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 so the hope is we're finally going to have like really exciting things to invest in again but but yeah look I think think we're at the tail end of the last cycle and the beginning of a of a new cycle and vintage Distortion is so real you know it's very hard to understand how each of these vintages with your late bloomers or overpriced things company's getting hundred million rounds totally 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 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 you know I tweeted about today you know during Peak Zer 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 pursu 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 saaks nailed it but but 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 I do think that we are in a situation where the average returns are going to Decay by 50 to 100% because of what sack 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 2,000 now because they 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 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 this is that is that is fundamentally broken and we're going to have to reinvent we tried once with spaxs we're going to have to go back to the drawing board and try again 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 a lot so many good points that we're hitting here I I'll just say the 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 own 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 a 100K into a $25 million round or a $50 million round as a followon investment you know to support the founder okay what does that do for my LPS well that 100K would need to hit some extraordinary outcome 5 10 2040 billion doar in order for us to return the fund so now my team understands hey take that 125k that 250k that 500k do more four do four more accelerator companies with it because those could return the fund and that's 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 look 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 Co people didn't know what to think so there was some restraint I guess and then 2021 it just went wild that was nuts man midle 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 gonna look like a Euro also chth I remember I don't know if it was Michael Moritz or or Doug Leone but I was talking to seoa 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 could 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 how 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 SMS it out I think you're saying the 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 in 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 f 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 just going to let your ownership Wayne 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 now look In fairness to them they probably you know got good while the getting's good so they'll make a ton of money and 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 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 now then it's very very solid compared to frankly some of those marks that we got in the bubble year like 20201 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 Zer right like interest rates were zero liquidity was just flowing and so it was very easy for companies to get liquid they ipoed and then the valuations were stratospheric so the distributions LPS were massive in 2021 and then that led to again more funds be 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 this is why it's so important as a fund manager or an entrepreneur for you to get great advice from people who've been at this for a long time and focus on the process you cannot control all these outcomes you cannot control all these meta events what you can control is your relationship 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 fir terms 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 your process yeah well look ironically just I mean just to end on sort of a positive note if these interest rate cuts are real like if we we just got 50 if we get another 50 this year if inflation's really Tamed and 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's could be another Golden Era so we'll see start companies from your lips to God's ears love you guys I gotta go love you all right shth had to go do work apparently he's starting this New Concept Sachs which jth is actually going to work and uh uh at a company uh we never got to talk about the uh debate because we were busy doing the summit and we took the week off from a new episode uh people wanted to hear your take what did you think of kamla and Trump the one and only debate we're going to hear apparently any any thoughts I think that KLA 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 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 get the same answer exactly so she's she's memorized a certain number of talking points and that's all she's going to give you no matter what the question is and if you saw that it's become a meme now where if you saw that question when she was asked about inflation there's a pause when she's figuring out which greatest hit she's going to play and then you know she I guess pushes b26 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 it's helping her yeah 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 um bounces there's been kind of a effervescence to it and then it kind of Settles down back to their occurring 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 uh people were a little upset that he doesn't prep as much as he should what what's your what's your advice there you know well I mean I think that uh he was in a very difficult situation you basically had a three-on-one situation where he was up against not just KLA Harris but the two debate moderators it turns out that lindsy Davis is a comma sorority sister David Mur was factchecking him constantly and some of those fact checks weren't even correct um for example we now know that the Springfield City manager has acknowledged complaints about pets being eaten far I was wondering if we were going to get through it's as far as far back as March there are videos of him talking about the complaints at city council meeting now you can you can say that you don't believe those stories or whatever but those reports were real but David Mir 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 I agree they 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 factchecking in real time or are we not factchecking and who's doing that fact and they only fact check one candidate for example when KLA 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 leftwing sites like Snopes have said the whole veryify people thing is for people who know that they there's been selective edits and I mean there's been selective edits forever but that one is particularly egregious it's really egregious the blood bath one is really egregious too because because he was talking about the blood bath yeah just make it into 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 and let's also be honest like 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's just he's a hyperbolic guy that's kind of his shtick right I mean but but here's the thing is that in the wake of that debate look I I think a lot of people scoring the debate on like technical Debaters points would award her the the the win for for that night I don't clearly she won 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 debers 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 tiebreaking vote for the uh inflation reduction act you cast it for the 2 trillion American Rescue plan that set off the inflation so the debate Moder never asked Harris well what is it about you that is different than Joe Biden on a policy level other than the fact I thought that was like a great moment for her objectively I think you and I've said this forever here on this show uh 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 P convincing those moderates that she's not crazy and he is what 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 Allin 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 and this sort of strategy let's talk about 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 uh Harris is the the candidate Trump has up something like plus 26 with the teamsters yeah why is that cuz 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 the the look I think within the Democratic party think it's her personality I think I think it's partly personality but I also think it's its policies and cultural issues so within the Democratic party there have 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 your summit with Obama right and I think Joe Biden was 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 uh trans and things like that limousine liberals is what they used to be called but I like yours wine liberals or yeah the woke wine basically the entire California Democratic party is very wi track I mean Gavin is very wine track Comm Harris is very wi track you can understand why a blue collar worker it doesn't appeal to that they want more of that lunch paale traditional Democrat but that Democratic party doesn't really exists 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 democrat's last vestage of this working-class party he really worked at being appealing to those voters you know that whole Scranton Joe image yeah and un Joe yeah exactly whereas kamla when you get her talking in an unguarded moment and is 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 challenging question because one it's likes when I ask you a challenge a bit if Trump loses what do you think will be the cause of the loss if if he loses like strategically when we look back on the last six months what do you think you would change what would cause it well look I mean the the the the great asset that KLA 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 the of their coverage on Trump is negative and you saw this that before Harris replaced Biden's 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 day 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 sari sister they friends so you know I I think that if Trump loses you could say that his willingness to walk into the liance 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 JD 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 what's yours JK on which aspect be more specific give me a give me a specific what do you think what do you if if if she ends up winning what do you think the reason will be yeah that's a good 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 W 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 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 roie 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 who are going to go in there and vote for him but not say it to pulsers and not say it to their family and friends because they're embarrassed because of the pressure against orange Hitler or 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 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 still ver still show him favor 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 the 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 the again the thing that Trump doesn't have and there's no way to for him to fix this is the media is just so in the tank for 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 stick 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 you know lie about the very fine people or or what he said about blood bath so if he was really saying that many outrageous things why would you need to keep inventing things that he didn't say and if 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 look at kamla'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 just watch her actual said it I mean Megan KY thinks she's stupid and not bright I mean she's not the most dynamic speaker that's for sure um and she doesn't seem to be able to uh 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 JD can right and and Trump Canen uh so here we go and just on the um 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 uh this rhetoric's got to come down I keep saying it nobody wants to listen to me but man be well let's look at the rhetoric that Ryan Ruth was literally quoting on his Twitter was saying that Trump is basically existential threat to democracy he was quoting what Joe Biden and KLA Harris and the mainstream media have been saying chapter and verse uh so I think that you know if you want to ascribe motivation there where did Ruth get 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 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 here and and there certainly people who have extremely large followings 1% are mentally ill like when I say mentally ill I mean severely mentally ill and if it's but 1% of your following if it's 0.1% this could be thousands of people and this is what happened to John lennin and 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 how whatever it is they interpret it differently and so just please folks 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 turnone down the rhetoric everybody and we will see you next time on the all in podcast byebye let your winners ride Rain Man David and instead we open source it to the fans and they've just gone crazy with [Music] it besties are that's my dog taking [Music] driveway oh Manet we should all just get a room and just have one big huge cuz they're all this useless it's like this like sexual tension that they just need to release someh we need to get mer [Music] our going [Music]