All In Podcast Episode 123 Recap and Notes April 7 2023

April 7 2023

 

• Friedberg rocking Ohalo
  • JCal lamenting Mahalo
    • Tilted by Chamath
• Trump indictment
  • He pleaded not guilty
  • Not exactly clear how strong the case is - even left folks are skeptical it will work
  • Campaign finance laws are federal laws, not state laws
  • Campaign donors don’t want their funds to be misappropriated by candidates
  • Hilary Clinton maybe used Campaign finance funds for the Steele dossier - she was fined for that
  • Maybe this is a distraction to have the Republicans unite around Trump and have his poll ratings go up, so that DeSantis’s ratings go down - this way Biden gets to fight Trump which is easier
  • Cyrus Vance decided not to move forward with the same case when statute of limitations had not expired - but Alvin Bragg apparently has
    • He claims he was told to stand down
  • By going first with this case - all future cases are going to be poisoned - even if they are more valid
  • If this was happening in another country then US would be criticizing it as a banana republic - presidential candidate is being prosecuted by local DA who is an ally of the opponent candidate
• De-dollarization
  • Last week China and Brazil agreed to trade in their own currencies - not go through USD
  • The more US tries to de-globalize - the more other nations will try to build their own relationships
  • China has done this with Pakistan and Russia also
  • Yuan is pegged to the US dollar
  • Whether you trade in USD or Yuan you are pegged to the USD - you use dollar swap to get the currency you need
  • Risk grows as debt is $32T so US might print dollars again
  • US has weaponized dollars a lot recently
    • So countries view USD as unreliable store of value if their money can be taken away by the US or its State Department
    • US also seized yachts and foreign holdings of russian oligarchs - when they bought them we didn’t view them as ill gotten gains, now we decided due to vagaries of US foreign policy that its bad
  • China has built a competitor to SWIFT called CIPS
  • So banking and debt crisis is upcoming or under way
  • Chicago has a $48B debt hole in their pension
    • Another huge check that Federal government has to write
  • Social security will go bankrupt between 2030-2035 so we will have to write a check to cover the hole there
  • 80% of property taxes in Chicago are going for pensions - so going to former workers, not current workers - and its only 25% funded
    • So they elected a candidate who is even more soft on crime than the previous candidate
  • Government benefits are crazy - take your last year of salary including overtime - and you get 80-90% of that for the rest of your and your spouse’s life
  • Every blue city and state in the country is going to have this problem
  • Deficits and liabilities will stop
• Debt ceiling vote predictions
  • No one’s going to want to default on the debt
  • Same thing happened in the 80s and 90s with Japan competition - they hit a demographic wall - similar to how China is hitting it right now
  • US transitioned their economy to service led economy faster and before all other economies did
  • Pension funds own a lot of office towers’ equity - they will crash
    • Either the building or the debt that was used to finance these systems
  • All these debts will not be allowed to not be paid - US will print money - see what’s happening in France/Paris with social unrest
  • How to fix
    • Austerity measures
      • Poor will make 2nd sacrifice - with lower spending
    • Productivity
    • Immigrations
    • Higher taxes
      • You can go after assets, you can go after wealth
      • We will see 70% taxes on the wealthiest people - won’t be unpopular
      • Rich will make 1st sacrifice - higher taxes
      • Reagan kicked off an economic boom by flattening the tax rates - 80s govt collected more revenue with lower tax rates because of higher economic activity
        • 70s Jimmy Carter time it was sad with high tax rates - people were disincentivized to increase productivity
      • The history of this going back 60 years is that you can only get so much from taxes
      • Reagan through Clinton was biggest 25 year economic boom period we ever had
      • Federal spending should be in the low 20s, taxes should be ~19%, some deficit
  • But relatively speaking US will still be exceptional
  • Saudis and Norway are also investing in the rest of the world - economies like the US
  • Need AI wave before other countries
• Foreign investments
  • Saudi PIF released list of who they are backing
  • Sequoia and other US backed VCs are funding China’s answer to OpenAI
  • Saudi Arabia, Abu Dhabi, UAE manage peace and prosperity regionally now - they manage a lot of assets
  • PIF is an established blue chip LP of blue chip organizations that people are familiar with
  • So its a smart marketing move on their part - so it makes even more sense right now
  • US LP market is basically closed for business - endowments, etc are down - so Saudi Arabia and UAE are putting their foot on the gas and saying they are ready for business
  • They are a valuable security partner of the US
  • CFIUS - Committee on Foreign Investments in the US
    • Ex: Rocketry, certain chip technologies
    • US has rules that limit ability of foreign actors to invest in these businesses
    • This is about money coming in
  • So reverse is also important
  • John Mearsheimer predicted in 2002 that constructive engagement people would be wrong - he’s right - they have egg on their faces now - geopolitical power is a zero sum game - enabling China was a mistake - now they can win a security competition with us maybe
  • economic terms are positive sum
  • VCs should take money from countries that are US allies - not from countries that are adversaries
  • WW1 - Britain and Germany were biggest trading partners of each other and still got in war - so economic relationships can’t necessarily prevent war
• Bob Lee

  • 2:35AM stabbing - 300 block of Main st

  • First CTO of Square, founder of CashApp, worked at Google on Android, founder of MobileCoin, angel investor in SpaceX, ClubHouse, etc

  • Friedberg used to live 2 blocks from where the incident happened - SOMA Rincon Center - right where Salesforce tower used to be

    • Not in the heart of the camping district
    • Friedberg’s car was broken into some time ago
    • You park 8 mins too long at a parking meter, you get a $100+ parking ticket

  • SF is upside down town

    • Try taking away from everyone who had everything
    • Give everything to people who had nothing
    • Consequences of flipping power structure upside down is crazy
    • Flipping of power structures upside down doesn’t yield outcomes that we want

  • He is a father

  • Sacks reckons this might be similar to case in LA where the person was stabbed to death by drugged homeless person in the carousel

  • Newsom is fighting culture wars in a distant state (against DeSantis in Florida, a school that was targeted for DEI) instead of solving problems in his state

  • Just listen to Garry Tan

  • Contrast with Miami where Mayor Suarez

    
    
    

    
    

  • So in SF this will take regime change

    • NY had problems, now its better - following broken window theory of policing - take care of the little things so we can take care of the big things

  • People have decided that strong policing is part of social justice problems - they will never agree that things are bad

  • JCal won’t host a conference or event in SF until this is resolved - so does it in San Mateo, Napa, etc

  • People are making so much money off homeless industrial complex - they will never let it get fixed

  • Brooke Jenkins has the right attitude - but police oversight board makes problems

  • Police has been defunded - less than half the number needed

• AIS 2023 in September!!!