The Great Tariff Debate with David Sacks, Larry Summers, and Ezra Klein

Looking forward to our thing in a few weeks. Yeah, I don't know if I'll end up being there, but I'm hoping to. I'm hoping to. You guys have like a liberal cuddle party or what are you doing? Yeah, yeah. Larry takes a bunch of MDMA and we all sort of go into the corner and hang out together. God, that sounds incredible. Liberalism is wonderful, man. You should come try it. That's not liberalism. It's called something else. Sorry, Nikki, is our cryptos are joining us or no?

He's, I'm talking to now. It looks like he is. Oh, zing. This is going to be great. This is going to be like ratings bonanza. All right. We do have David Sachs here. David, make sure you have your quick time on. Look at Sachse. He's looking so presidential. He looks thin, doesn't he? He looks fabulous. All right. Here we go. Three, two.

Welcome back to the number one podcast in the world. I'm your host, Jason Calacanis, with my besties, Chamath Palihapitiya, our chairman dictator, and live from, well. The administration, Mr. David Sachs, our czar for AI and crypto, and amazingly, two fantastic guests this week. We have a New York Times writer and host of the Ezra Klein podcast.

He's got a new book with Derek Thompson, Abundance, and he co-founded Vox in 2014. And he's our guest here today before Trump ships him to El Salvador. Please welcome Ezra Klein. How are you, sir? Glad to be here in my final hours of freedom.

Okay, great. Good to be here. Sorry, Sachs. And with us, of course, Larry Summers, economist, former Treasury Secretary under Clinton, former director of the... national economic council under obama and the president of harvard from 2001 to 2006 thanks for coming larry good to be with you okay we have a lot to get to here so we might as well talk about The big news of tariffs. It's day 80 of the Trump presidency, a second presidency, his second term. And Trump tweeted that he paused tariffs.

for everyone but China on Wednesday basically let me just queue up the details Larry and then we'll get your take on all of this Just one week after Liberation Day, Trump announced on Truth Social that, in effect, he was raising tariffs against China 125% based on their lack of respect, quote unquote. Instead of negotiating and then he was pausing reciprocal tariffs on all other countries for 90 days. And markets ripped 10% after we posted this. And today, Thursday, when we tape.

There's been a massive sell-off on Wall Street, so the roller coaster ride continues. What it will be on Friday when you consume this podcast is anyone's guess. S&P is down 5% today. For context, the S&P was at 5,700 pre-Liberation Day, so about a 9% drop after these wild swings. And in fact, this has been historic volatility.

Sell-offs in history, as you can see, three of them came during Black Monday in 1987. Three of them came during the financial crisis. Three of them came during COVID. And coming in 11th is Trump's. tariffs also in the gainers you have these big rebounds Wednesday's 9.5% recovery was number three. The administration says this was all part of a master plan. We'll hear more about that later. And that they laid a trap for China. They laid a trap. Besant has been the spokesperson.

during this retreat or whatever we're going to call the pause and quote This was driven by the president's strategy. He and I had a long talk on Sunday, and this was his strategy all along. I don't think we need to play the clip. That's the gist of it. The White House account then tweeted in all caps, my favorite way to tweet, do not retaliate and you will be rewarded. Wall Street Journal, on the other side, posted a story about why Trump blinked. They chronicled the decision as being affected.

by Jamie Dimon, who went on Fox to express fears of recession while saying the tariffs were valid. and that he knew the Trump and cabinet would be watching him on Fox. Other banking executives who felt they didn't have a lot of influence in this administration, according to the Wall Street Journal, started lobbying Republican lawmakers.

That the Trump tariff plan would tank the economy, the White House Chief of Staff Susie Weil started receiving calls from executives and lobbyists expressing concerns. And the Wall Street Journal reports that Trump was influenced heavily by Besant. They were flooded with worried calls from Wall Street. and that the president was lobbied to find an off-ramp. Trump ultimately relied on his instincts, according to the administration. Larry, is this 4G chess?

Or is this something else? What are your thoughts? dangerous work with a sledgehammer on a pretty sensitive machine, which is the global economy that's having really serious consequences. First, it's important to understand that there's more tariffs that are around than you described. Even after the big back off, there's a 10% across the board tariff, a range of structural tariffs like on steel and automobiles. and a range of new tariff threats like on pharmaceuticals.

Here's a kind of market-based estimate of what the damage that the market thinks this is all doing to the US economy is. Markets down, let's take today's number, 9%. If that's right, that would be about $4 trillion. $4 trillion since Liberation Day. Of course, markets were down coming into Liberation Day because of some anticipation of these policies. So let's be conservative and say these policies have taken $6 trillion off the stock market.

Now, the stock market only measures the adverse impact on corporate profits. not the adverse impact on workers, not the adverse impact on consumers. So you need to add to that stock market number. One way of thinking about adding to it would be to say that corporate profits were 10% of the economy. So you could argue for multiplying by a factor of 10. But maybe that's being too exaggerating or too bold. So let's multiply by a factor of five.

And what you get is a loss in the $30 trillion range as the present value as estimated by markets of what's being done. Now, I know the Trump administration sometimes likes to say it's working for Main Street, not Wall Street. I noticed that they were pretty excited about the stock market rally yesterday in a way that wouldn't really go with not caring about markets. So I think what markets are seeing is what's true, which is three things. an inflation shock because you're adding to prices.

CEO of Amazon got it right. The Secretary of the Treasury got it wrong. Increases in tariffs of this magnitude, the overwhelming part of them will be passed on to consumers. When you raise the prices of people and their income, at least in a short run, is the same, they're poorer. And that means they can afford less stuff. And that pushes the economy down.

And so you've got higher inflation and you've got more, less demand and therefore more unemployment. All of that's bad for the economy and companies. And the last thing, which I think is profoundly important, is we are trading like an emerging market country right now. For serious countries, for the United States, the pattern is that when the world gets riskier, the bonds go down in yield. And the currency goes up in value because people come for the safe haven.

When you're a country like Argentina, then the assets all move together. Falling stock prices go with higher bond yields, go with a weakening currency. And so because of our erratic behavior, We have changed the zeitgeist surrounding America from the traditional zeitgeist surrounding America to the kind of zeitgeist that surrounded Juan Perón's Argentina.

And that goes with all the other things that are happening. The more protectionism, denying the independence of the central bank, fiscal irresponsibility. Breakdown of traditional boundaries between government and business, substantial cronyism as a strategy, authoritarian tendencies. towards the opposition, lack of total respect for the judiciary. Keep going, Larry. Keep going. What we're seeing is a pattern. of America being governed on the kind of Juan Peron Argentina model.

And that sometimes produces some benefits for some people in the short run. That sometimes generates popularity for it. Perón kept coming back. in argentina but ultimately it's extremely costly for a society You've heard Larry's take on all of this. Larry's giving it about a B plus on the Harvard grade scale. Which might be inflated. I'm not sure. Obviously, in the administration, you cover two things, AI and, of course, crypto.

And you're a member of the pod, so let's get your take on what happened this week with these tariffs. Even the most ardent supporters of Trump have felt this is chaotic. not well executed, not communicated well. What is your take, Sax, on how this was executed? And could this have been done better? Well, I think what happened, if you go back to Liberation Day was only eight days ago, it was April 2nd. If I had told you on April 1st...

that Donald Trump would find a way to get the entire world to eagerly embrace a 10% tariff on the American market. And not only would they not complain, but they'd actually be relieved. that it was only 10%, you would have said that would be an April Fool's joke.

If I had told you eight days ago or nine days ago that Trump would find a way to accelerate the United States' decoupling from China, which is something he's long wanted to do, and that Wall Street would basically breathe a sigh of relief over that. you would have said that there's no way that could happen.

If I had told you eight or nine days ago that President Trump figured out a way to assert a presidential power in a way that gives America extraordinary leverage over virtually every country in the world. you would have said, well, I don't believe it. I don't, you know, what is that power? And he proceeded to do that. And now basically every country in the world except for China is coming to Washington seeking to negotiate a new trade deal for the United States.

on better terms for the U.S. would have believed you, and I would have thought the consequences. would be as substantially deteriorated. American economy, and a substantially less secure United States. I don't think we know that. I don't think we know that. It's not any surprise. There's nothing surprising about the fact that the United States has the power to extort Lesota.

And that's the country that was singled out in the Trump formula for the highest level of protection. There is no surprise. in that. There is no surprise that the United States has the capacity to isolate itself from China. It will be very, very costly. Japan's coming to Washington. South Korea is coming to Washington. Everybody's going to try to cut a deal. Everyone's going to come to Washington. Never would have occurred to anyone with experience in government.

that the United States would have any difficulty getting any major country to come send a representative to the United States to have a discussion and a negotiation with a... The United States, on a matter that was of concern to the United States, never could possibly have commenced any surprise. Okay, let me let Sachs reply to that, and then Ezra, I'm going to bring you in. Sachs, go ahead, you reply.

Do you think that all these countries were going to renegotiate their trade deals with the U.S. if President Trump asked nicely, if he said, pretty please, let's renegotiate our trade deals so you take down your trade bearers, they would have done it? If he had said pretty pleased with a cherry on top, that's not the way these things work. He had to establish the leverage in the negotiation first.

And the fact of the matter is he's the first president in decades who's been willing to do that. You don't get anywhere by just asking nicely. And I think that what President Trump did over the last eight days is, A, establish the leverage. And B, get all these countries to now want to negotiate a new trade deal with the United States. This is such a terrific thing. Why do markets think it's so terrible?

for the American economy. Maybe the market's just completely wrong, but at least another possibility is that the market's judging this, that the market, I mean, job of markets is to look forward. bash the immediate. It's to see what the long-run consequences are going to be. And markets are making a pretty devastatingly negative judgment. No, not true. Not true. Larry, that's not true. That feels emotional and nice, but it's just not accurate. So let's just establish a couple of facts.

about quote unquote, the markets. Number one, there are two markets and they behave totally differently and sometimes inversely to each other. There's the stock market. And there's the bond market. With respect to the stock market, what they are debating, and you're right, Larry, is what is the effective long-term rate of return? a dollar needs to generate in order to pay me back that dollar. That is what the fundamental stock market does.

and what we have seen for many years with train imbalances. trade deficits, and close to zero interest rates, of which more of that happened under Democrats and Republicans, we have allowed the stock market to inflate past historical averages. What we've actually seen happen in the last week is what most people would call mean reversion. The stock market is still way above where it was last year, two years ago, three years ago.

What has happened is that the forward multiples have compressed. So that's number one. That's a fact. You can debate whether that's bad or good. And I'm willing to debate that with you. Okay, now let's go to bonds. And then with respect to bonds, what we are seeing now is there are two very complicated issues. And we don't know what the unknown known is. And let me be very specific. In the last two days, we saw one part of the bond market totally get out of whack.

And what we know is that the yields changed materially in a very acute way, which is atypical of how the bond market typically digests a philosophical change in approach to policy. Normally when you see an acute reaction in the bond market, the underlying reason tends to be some financial calamity. in a participant. What we heard in the last 24 hours is a lot of this move may have been attributed to an enormous levered bet on US treasuries by a Japanese hedge fund.

It will take three and four and five and six weeks for us to really know. Separately, what we do know, though, were the structural complexity of the market. And this is where, Larry, I agree with you. is acute and important to observe is in the credit markets for private companies. And that is where you have to pay a lot of attention. Okay, Larry, let me let you respond to Chamath's response to you. And then Ezra, I promise you're going to come in next. Larry, go ahead. Martha, as you well know.

The vast majority of financial thinking emphasizes changes in the earnings prospects of companies associated with the strength of the economy as a major source of stock market fluctuation. And if you look at dividend strips, if you look at what's happening to analyst revisions, That's got a lot to do. Negative prospects for the economy has a lot to do with why the economy, why the stock market has turned downward.

The foreign exchange market's very big, and it's a big referendum on whether people have confidence in the United States. And somehow... Tariffs, reduce imports, are supposed to reduce dollar selling and make the currency go up. And not only is the currency not going up, It's going down substantially. So we're seeing a pattern. Maybe it's all just due to one Japanese hedge fund, but maybe we're seeing a pattern that really looks pretty much like...

the Argentine pattern. Ezra, you are hearing this debate. I think there's no debate that this was done in a very extreme fashion at a minimum. Do you wonder... If this could have been done in a more gradual or thoughtful way, what's your take on the execution here by the administration of these tariffs and their response to the markets? I can't say I wonder if it could have been done in a more gradual or thoughtful way. It could have.

I defer to Larry on the markets. I'm more of a connoisseur of arguments and something I've been thinking about over the past very long eight days is covering the 2024 election and covering Donald Trump's tariff promises. And it was a thing that liberals like me were doing, where we do these shows and say, Donald Trump is promising a 10% to 20% global tariff.

And then 65% tariff on China. And if he does that, it'll have this set of effects, higher prices, it'll create financial uncertainty, etc. And what I would be told, like the counter argument. You always take him literally when you should be taking him seriously. I had Vivek Ramaswamy on my show. He said he's not going to do that. That's just a negotiating ploy. And this was the common line from Trump allies on Wall Street.

And then I watched as he began doing not just that, but layering a series of them bilateral tariffs on top of that plan. The markets began freaking out. While they were freaking out, a bunch of his defenders said, no, no, no, actually, these tariffs, which we told you were never going to happen, are actually a great idea. We need to reset the entire global financial system, and you can't ship those tectonic plates.

without creating a few earthquakes. Then the moment the tariffs paused, or the 90-day pause on the tariffs on top of the 10% and the China tariff, then I heard, nope, that pause is genius. Haven't you read The Art of the Deal? And what I would observe from this is it usually when an idea is good.

You don't need people jumping back and forth on it so often, going between these tariffs are a bad idea, but they're a smart negotiating ploy to these tariffs plus are an actually great idea. And you should all calm down, as Trump said. You should all be cool back to know these tariffs are a great idea. I think something I'd love to hear from David. It's very hard to break the pattern of being a podcast host.

I would like to hear what the measure of success in two years is. Right. We can sit here and speculate about the effect of these. And I'm much more on Larry's side than what I'm hearing from Chamath and David. What are your measures? What in two years? Good question. If manufacturing, employment or whatever is below X, will you be unhappy if GDP is? What is a sort of objective yardstick where we could come back? in 700 days and say, did this work out or was this a bad idea?

I would say probably the biggest thing would be whether the US can re-industrialize to some extent so that we're not completely dependent for our supply chains on. on a potentially hostile adversary. And what is the measure of that? Is it the quantity of manufacturing we're making? Is it the share of manufacturing? I don't think it's a hard thing to understand. You know, during COVID, we learned... I'm just asking you to set it very tightly. I am saying it concisely.

During COVID, we discovered that we were horribly dependent on a supply chain from China for some of our most essential products, for pharmaceuticals, for... other medical gear that we needed during covid sure so what would be if you were to put a metric on just as one example but we've also learned that our entire supply chain for all sorts of industrial products now is dependent on china and other countries So let's be more precise. We have 4% unemployment.

at the record low of our lifetimes. And do you think Americans want to... work in these factories and if so which factories obviously pharmaceuticals that's a dependency obviously building ships and weapons that's a dependency i think we can all agree on that and that might be hundreds low hundreds of thousands of jobs Do you believe we should be making Nike sneakers here? Do you believe we should be making jeans here again?

What would be the objective measure of success, like a certain number of jobs, certain number of factories, certain types of factories? Because the other piece that I don't understand, and maybe you can inform me here, Sachs, is number one.

Who's going to do this work if we're going to be deporting millions of people and we have the lowest unemployment of our lifetimes and we have automation coming to these factories and Americans don't want to take these jobs historically. How is this all going to work? It seems.

A bit farcical to me that we're going to bring these things back. I don't think the millions of Americans who lost their jobs in the heartland because we let China into the WTO, which is something that Larry, I think, supported and championed. We're talking about decades ago, though, right? That's what started this whole thing. Yeah. Okay. I don't think those millions of people want to lose their jobs.

What are you talking about, Larry? Respectfully, David. You were Treasury Secretary when we walked China to the WTO, and you were just still defending it. I was just watching an interview. Hold on, Larry.

Larry, you just did an interview with Neil Ferguson. Can I ask my question? Why am I the only one who gets to talk for two seconds before I get interrupted? You guys get five to ten minutes. Finish your thoughts. Finish your thoughts for three minutes and then Larry will go. I get to speak for two seconds. Then you interrupt me. You speak for five or 10 minutes. Go right ahead. Larry, I just saw.

You do an interview with Neil Ferguson where he asked you, was it a good idea to bring China to the WTO? Was it a good idea to give them permanent? normal trade relations status, basically MFM, which is something that Bill Clinton did in 2000. And I admit it was bipartisan. George W. Bush continued it. And you were defending this as a good idea for the country. What was the result of that over the past 25 years? millions of industrial jobs.

were lost or export to China. Millions of factories shut down. The United States has a diminished and a hollowed out industrial base. We certainly can't make the products of the future like drones or semiconductors. Jason, just to answer your question, yeah, obviously some industries are more strategic than others. Do I personally care about?

sneakers or textiles? No, I personally don't. Do I care about semiconductors? Absolutely. Do I care about circuit boards? Do I care about drones? Do I care about robots? Do I care about EVs and cars? Absolutely. Okay. those industries we are no longer in a position we are no longer in a position as a country to make those products i just

We exported our entire supply chain and manufacturing base to China. So how is that a good idea, Larry? Okay, Larry, you go, and then Ezra, I'll go back to you and Shuma. Go ahead, Larry. I have three questions for you. One, can you name... that was reduced by the United States associated with China accession. A single restriction that existed in the United States that had not been in place for five years before.

that we removed during China's WTO accession. Can you name one? I don't think we should have done any of it, Larry. We threw open our markets to Chinese goods. What restriction... Your thesis is that we threw open the market and therefore we exposed ourselves to all of this China thing. And question I'm asking you is, can you name any restriction on Chinese exports to the United States? that was in effect in 1999 and was removed by our WTO accession in 2000.

Can you name any such restriction? Just name one for it. This was a policy that built up over time and was basically made permanent. Hold on. It was made permanent when we walked China to the WTO and gave them MFN status. I'm sorry, David. I'll ask the question one more time. We had given them MFN status 15 years before. No one. They had MFN status. They had it for 15 years. There was not a single. reduction in a barrier to Chinese trade.

So the way in which you're describing it is just bears no resemblance to what it was. What was the point of bringing them into the WTO? The point of bringing them into the WTO was to use the leverage that we had. to win a whole variety of concessions. Larry, let's be honest. Export more to China. This is an interesting idea. It's called reciprocity.

Let's move forward. You're denying history. You're denying history. This is a bad deal. Hold on a second. Let's go back to this. Just a minute. I just want to know. The whole argument you are making. is about increased exports to the United States that had bad consequences. And so I'm just going to keep asking you. What barrier that previously existed got removed? Okay, I'll name them. I'll name them. I'll name them. Go ahead, Shamath. Number one.

Prior to the WTO, China imposed a bunch of export duties and taxes on a whole bunch of goods to control outflow. Okay, that prioritized domestic supply. As part of coming into the WTO, China said, hey, hold on, we'll limit these export duties. to only a specific set of products. And then they capped those duties at agreed rates. Number two, they eliminated export quotas. They historically had export quotas to manage the volume of goods.

Under that WTO commitment, they agreed to phase out all those quantitative restrictions on exports, except were explicitly justified under WTO. Number three, they removed the export licensing restrictions. Number four, they ended state trading monopolies for exports. Number five, they liberalized foreign trade rights. The point is, people thought that China was going to be a honeypot of economic activity.

And it turned out to be a sucking sound, a grand sucking sound of opportunity where the globalist corporations saw a massive labor arbitrage. So it's fair to say that it was done with the best of intentions, but it was a bad deal. And they got one over on us. I really want to say that rather than having... 30 minutes of debate over something that happened in the 90s. I would like to go back to this question.

I keep not hearing. I will answer your question. That was a great question. I would like to hear from David. But I love yours too. Yeah, I want to. Hold on, I never got a chance to. I think that there's a tendency to just begin talking in an anecdotal way. This is not anecdotal. We want to move forward. Presidents announce these policies and then there's never... Give me the metrics. Hold on a second. Give me what indices you are going to look for where if it's...

If in two years it is under X, I can come back and we can have a conversation. Here's some metrics. Ezra, I'm so sorry. Here's some metrics for you, okay? Let's go back to Bill Clinton's speech that was given at Johns Hopkins on March 9th, 2000. He was asking about forward, David, forward-looking metrics. What would you think would be successful two years from now? Not the history lesson. Well, hold on. We haven't finished the debate about China and PNTR.

Okay. But my question predated that debate. Yeah, we're trying to get to that. Listen, you're trying to change the subject. Let's just finish up on this topic. No, no, no. We're trying to move forward. That's all. No, we're trying to finish up on this topic, okay? Okay, we'll let you get the last word. Go ahead. Okay, so March 9, 2000, Bill Clinton announces PNTR at Johns Hopkins. It's a very famous speech.

Maybe you can tell us about how it got written. Anyway, Bill Clinton promises several things. He makes a number of arguments for PNTR. He does not think. that this does nothing. Larry, your argument is that Bill Clinton didn't do anything. You're saying that somehow it happened under Reagan or something like that. That's not what Bill Clinton was arguing. He said, number one, there'd be huge economic benefits for the U.S. He says, quote,

By this agreement, we will increase exports of American products, he means to China, that will create American jobs. Okay, did that happen the way we intended? I don't think so. Number two is he believed that- Have you looked at the data on export flows from the United States to China? It actually did happen at a quite substantial rate. But with huge trade deficits for the United States.

You're arguing that they did not act in a discriminatory way towards our products? This idea that Americans could just do business in China the way that they could do business here is ridiculous. Anyone who tried to do business over there knows you have to create a JV. You have to get a local partner, give them 51%. It was extraordinarily difficult. We were discriminated against, Larry. It's ridiculous to try and claim that somehow this was an equal relationship, okay?

And we imported far more from them than we ever exported to them. So Bill Clinton was wrong about that. Number two, he said that. signing PNTR and bringing China to the WTO would promote democracy in China, that we would export one of democracy's most cherished values, economic freedom. Did that happen? I don't think so. He said this would strengthen global trade.

by ensuring China adhere to international trade rules, reducing trade barriers, and resolving disputes through WTO. Did that happen? I don't think so. And then he said on national security, he said it would improve our national security to bring China to WTO and help make them rich. He said, quote, if we don't deal with China in this way, we'll increase the prospect.

they will turn inward. That's not what happened. We helped make China rich. We've exported millions of jobs to them. They built up their economy and their supply chain. to the point where now they are a global competitor to the United States. They're a pure competitor. We turned that baby dragon into a Drogon sized monster that can now challenge us.

in Asia and across the world for primacy. Why in the world we have done that? Just not for national security reasons. That was a very foolish thing to do. Okay, so Larry, I guess I have to let you maybe self grade. How did you guys do? Is there any regrets? As Sachs is pointing out there? Obviously, China has not magically become a democracy, but I guess you could argue they do have a middle class now.

We haven't gone to war with them. So I guess you could argue that this has been good for relations. But to Saxe's point, they are incredibly powerful and they are our top adversary. How would you grade the history of this so we can move forward? China was a surging, growing, reforming economy, growing at double-digit rates. That it was before there was any WTO. The WTO agreement did not change a single rule that represented a U.S. restriction. on imports from China.

It did change a variety of rules, not as far as I would have liked. that let the United States export more to China and the protected United States intellectual property in China. and that brought China more closely into the international system. You need a counterfactual for what would have happened if China had been excluded from the World Trade Organization. That counterfactual is not that they would not have sold goods to the United States.

That principle had already been crossed 15 years before. Not a single restriction was reduced. So anything you would have done differently? But I just don't get, I don't get the whole. mindset here. I understand that we should have done more as a country for the Rust Belt and invested in it much more heavily. If I was worried about dependence and strategic and all that, the last policy I would have wanted to abolish was the CHIPS Act.

That's the largest, boldest thing the United States has ever done. to avoid dependence in a national security area. Great. Let me bring Chamath in. The Trump administration has killed all of that. Chamath, you heard Ezra's original question and the history here from Larry and David. Looking at, there are some industries that we need strategically, pharma, military, cars. These are fairly obvious. Rare earth minerals are obvious.

But we also have the lowest unemployment of our lifetimes. And Americans probably don't want to work in factories en masse. What is your take on going forward some metrics that this administration should, not Sachs is saying this, you're saying it.

What would you measure this success as in terms of onshoring and reducing dependencies if, to Ezra's point, two years from now, we were to grade it? Give us some specifics here, Chama. There is a major... issue that the United States has that's much bigger than China, which can be framed in the lens of resiliency and the ability to fend for ourselves. There are supply chains that have many single points of failure.

And independent of whichever country that single point of failure exists, it could be an ally or it could be a foe or it could be a frenemy, that creates risk. And I think what we are learning, and David's right, it was really highlighted during COVID, we are not in a position to take care of what we need. So if I had to very precisely answer Ezra's question. I would say that we need to measure and protect four critical areas.

Everything else I think we can deal with, some inefficiency, some single points of failure. But the following four areas, Ezra, I would say are sacrosanct. Number one is all of the technology, both the chips as well as the enabling technology around artificial intelligence. It must be a robust, largely American supply chain. It must. You cannot have single points of failure outside the United States because what you see is even in allied countries.

Their posture towards things like free speech and other things can ebb and flow. Their posture on trade, their posture on defense. Okay, so that's number one. It can change. Number two is energy. We have a critical deficit of electrons in America. We do not have the capability we need to make the energy we need quickly in many ways. We have supply chain issues on NatGas. We have critical supply chains that can be shut off by China around photovoltaics.

So whether you believe in coal, whether you believe in nut gas, whether you believe in clean energy, we are in a very fragile place. We got to shore that up. Okay, I think we're in agreement. Keep going. Number three are there are critical material inputs that drive the material science of the future. Rare earths are an example. Going back to chips, things like gallium, things like phosphorus even. So we have a...

critical minerals and rare earths and material science input problem. And then the fourth, Ezra, are pharma APIs, so that when American citizens get sick, we have the ability to not just make it, but also design it and manufacture it. Because some of these APIs, the active principle ingredients for many of the drugs, require very convoluted and complicated processes, cold chains, and the like. And again, there, we depend on folks.

whose view of the United States can change in real time. So if I had to say to you, Ezra, what I would expect is if the United States government, whoever was in charge, would put those four things on a board, then detail out all of the key inputs, measure how much we can make ourselves versus import.

and then basically try to level that playing field, we would be in a very good place. A couple things, because I think I probably agree with all of that. And what it sounds like is an excellent argument for Joe Biden's policies.

Which were functionally, maybe not the pharma side, just literally that. Let's pull out semiconductors and the semiconductor supply chain. Let's pull out energy. Let's put a couple of things like that. You know, what was it? A high fence around a small garden is what Jake Sullivan called it.

Let's particularly try to restrict the supply chain export of AI critical materials to China. They had a whole set of policies about this. Now, the Trump administration, the thing we are in theory here discussing. is an extraordinarily broad-based set of policies. It is tariffs on not just China, it's on Brazil. It's not just on critical industries like Chamath is talking about. But it's on, you know, mangoes and avocados and, you know, lumber from Canada and basically everything else.

I guess there's an argument I could sort of extract out of this, that the Biden administration believed what they called French shoring. which is that you want to create an integrated supply chain of allied countries that we can work with and that we can rely on and the Trump administration. I think believes something, depending on who's talking, more like that the entire supply chain needs to be onshore to America specifically.

But one of the problems and the reason I keep trying to push people to be very clear about their arguments and very clear about their metrics. is that I feel like there's this king's cup of what we're trying to achieve here, where one day it's that we're trying to achieve the reindustrialization of the American heartland. And the next, we're trying to replace the income tax with tariff income. And then the next, we're just using it.

as all-purpose surplus leverage against any country that does anything we don't like. And the next day we're using it for an entirely third purpose. And maybe we're just going to use it to isolate China, but to bring in our friends. But none of these, you can't do all of these things at once. And it needs to be very stable if you're going to get companies. to do these long-term CapEx investment decisions.

that take decades to play out. Nobody I know in the markets, no CEOs. The fact is, you guys didn't want to change anything. You guys didn't want to change anything about anything. I wasn't in the Biden administration, number one. I'm treating Ezra and Larry as a team. I would love to change all kinds of things. You mean the Democrats didn't want to change anything? Of course.

Let's see if we can. Larry won't even admit that PNTR did anything. Can we not keep doing PNTR for a minute? Let's look forward, not backwards. Look at the CHIPS Act. Look at the IRA Act. They did the exact things we're talking about. Larry, go ahead. Let's see if we can. I agree with Chamath's agenda. I may not agree in every detail, but I broadly agree with Chamath's agenda. And I'll go a little further than that, Ezra. I think Joe Biden's attachment to energy security was kind of selective.

and heavily oriented to green technologies, not others. I thought canceling the Keystone pipeline was a clear mistake. I thought the stopping a variety of things involving liquid natural gas were a clear mistake. So I think the Biden administration's approach to regulation that empowered every NGO with respect to stopping transmission lines.

with respect to constructing power plants because of the importance of democratic constituencies was a mistake. So I think energy security is a central objective of policy and that there's a lot of room to it.

move beyond what the Biden administration did. I actually believe that very strongly and agree with Chamath and David. What I don't understand is chips absolutely right the chips act was all about making there be an american semiconductor industry with production in the united states As a central priority, the Trump administration has declared war.

Rare earths, you want to have a strategic petroleum reserve for any rare earth. You want to do more mining in the areas that Chamath says we should in the United States or in friendly countries. I am all for that. Here's what I cannot understand, Siobhan. They don't see how your resilience agenda drives anywhere near Liberation Day. and the emphasis on tariffs. It drives towards a set of specific industrial policies, perhaps including tariffs in some particular product areas.

But steal from Canada? Anything from Lesotho? Any natural resource product. across-the-board tariffs on everything. I think you are absolutely right about resilience and that traditional conventional economics has given it too little thought. and that COVID pointed that up as a central issue. What I can't understand is why Donald Trump's echoing of Lee Iacocco from the 80s about tariffs. is responsive to any of that.

But this is the point I'm trying to draw around Biden. I'm not saying I agree with every way the Biden administration defined its objectives. I just wrote an entire book about the failures of democratic policymaking in this specific era. What I am saying is the Biden administration's view of trade was that there are targeted industries. We should be putting a lot of both. domestic policy and international policy into play in order to protect and reshore or French shore.

And the Trump administration's view is that you have a generalized problem running all across the world that requires highly general policies. But then when I asked people to defend it, they sort of moved this targeted argument. Donald Trump's view, we can I feel like we end up. making something that is not that complicated into something much more complex than it is. Since the 80s, you know, Larry's point about Lee Iacocca. Donald Trump has appeared to hold the view.

The U.S. is operating at a trade deficit with someone else. That is evidence we are being ripped off. And that is how you get at least the initial set of tariffs here that work off of bilateral trade deficit. and try to correct every single one with every single country, be it Lesotho or a collection of islands inhabited by penguins. I think it's really important to be connected to the policy that was actually announced.

And not sort of projecting all of our own onto it. Like, yes, Larry's right that you could have a different set of critical industries than Biden did. The Biden team was very focused on clean energy over other kinds of energy. I also did not agree.

With like the liquid gas pause, I thought there was some, you know, there and we did not do nearly enough on things like permitting reform. Right. There's a lot you could have done that they didn't do. But if what you have in your head is a targeted idea of restoring specific. industries or near shoring or friend shoring or whatever, which is kind of what I'm hearing.

from from a number of people on this call, then it seems like you would want targeted policies. And what we have is not targeted policies. It's broad based policies. So a 90 day pause on larger broad based policies and a huge trade war with China. I would like to hear a defense. from somebody. Ezra and I agree, specific policies. I'd like somebody to explain to me why it's a remotely sensible theory. to say that the United States is being exploited by any country.

where the overall pattern of trade is such that we are running a trade deficit. And maybe in the process, you could explain to me why my grocery store is exploiting me because I'm running a massive trade deficit with that. Okay. Trade deficit. Shamath or Sachs? Who wants to take it? I can start the maybe Saxon. So let me actually start by giving some credit to where Biden did do a few things, right? Just in the spirit of finding some common ground inside the IRA.

I think that there were two things and I've said this pretty repeatedly, but I just want to put it on the record again. The ITC credits. and the ITC transfer markets for those credits, the tax equity markets. are critical industries in America to support private investment in all kinds of very complicated markets, energy markets being the most important.

And what the Biden administration did to their credit was remove the uncertainty because those things had to be renewed over and over again. And they gave us. A very long window where we could underwrite investments. To your point, Ezra, that was smart.

But it's important to also remember that in order to get Biden's budget done, what they did was they had Manchin roll over on permitting reform. And Ezra, you know this probably better than all of us. When you look inside of the CHIPS Act, As smart as that initial policy was, if you ask, why has nothing actually happened? Why have no fabs actually been built other than grandiose statements. The answer is that, which you speak to in your book. It's just this complete malaise.

and inability to actually get these things permitted and turned on, even when it's right. So I just want to acknowledge that that's there. So Larry, very, very importantly to your question, the thing that we have to acknowledge is that in certain countries, What you have is a very blurry line between private and public industry. And they have this very tight coupling. And again, I hate to go back to China, but it is the best example of this, where what do they have?

for the sake of it we can use korea we can use japan we can use germany okay there are instances where the government balance sheets support private industry they can support them in three different ways Number one is the tax credits that they can use, the subsidies that they can use to build the things that they need. Number two is how then they can support that in the act of selling and engagement in public spot markets to shape the demand curve of the things that are made.

And then number three is the taxation on the back end, the terms of repayment and the capital cycle. Those are things that in the United States, we overwhelmingly turn the responsibility over to the private markets to do. We are the cleanest, the purest form of capitalism in that sense.

But many other countries are shades of this. And again, let's not talk about China, which is- I agree with you. So Larry, hold on a second. So Larry, so what you have is how do you defend dumping? How do you defend that? How do you defend spot market manipulation that drives American companies out of business? How do you fight that? And I think here's the problem.

If President Trump had announced a big broadening of anti-dumping law, to confront a variety of instances of what the administration, after careful economic analysis, saw as inappropriate subsidy. I might or might not have thought that they were doing that in the right way but we wouldn't be having this argument. The front pages would not be about tariff policy day after day, and the stock market would not be down by $5 trillion.

The central thing we are discussing is not whether there are sensible modifications to trade policy to respond to bad practices in other countries or to promote resilience. Those are technical debates that, frankly, aren't that interesting to a large number of people. The question is whether declaring that we need a whole new era of US economic policy around universal tariffs against everything.

is a rational step forward or using bilateral trade surpluses as a judge. Now we're talking about the Monte Carlo simulation of how to achieve the outcome. And what I am saying is... There is just as much as you and I want to guess. The fundamental and honest answer is none of us know. The people in the White House, what they know, they will share a little bit at a time because the reality is if what you wanted was a white paper or if what you wanted was paint by numbers.

I think back to David's point, all that would do is just take any leverage that they had and give people the opportunity to shape their response. And I think in traditional game theory, and again, In traditional game theory, I think the right thing to do is when you're playing poker, you play street by street. What's the flop?

make a set of actions. What's the turn? Make a set of actions. What's the river? Make a set of actions. And I think if you're gonna play to win, this is what they should do. Keep their cards very, very close to the vest. realize that you can't necessarily surgically go and attack the lithium market first, then the rare earth market second, because it all goes back to the same balance sheet. It's the same actor over and over. I think there's a useful analogy to draw here.

I think a lot about an article Mark Danner wrote in the New York Review of Books many years ago about the Iraq War. And it's an article that has stuck in my mind forever because what he says about it is that. One of the difficulties of the politics of the Iraq War is there was no one war. There was everybody's private war that they were projecting on to the Bush administration. You have the liberal humanitarian vision of why we were going to war and what that war would look like.

You had a realist vision for it. You had a vision that was more about weapons of mass destruction and keeping the homeland safe from terrorism. You had people believe there was an Iraq al-Qaeda connection. There were really dozens of these, which is how you got as broad a coalition behind as bad a policy as that together, because everybody said.

You know, they're being a little bit vague about what's really going on here and why we're really doing this. But I bet you, if you go into their heart of hearts, what they want is the thing I want, even though the policy doesn't quite match what policy you would get. And that's really what I hear here. I hear it on this show, but I hear it in general in the discussion around this.

That there are a lot of different objectives being projected onto Donald Trump and his trade war. The objectives do not fit the policies we're seeing. The objectives are not stably articulated by Donald Trump or the people around him, nor is any specific objective.

being articulated in a stable way without contradicting objectives also being articulated at the same time and look maybe in the end and this is why i want to push you all on metrics you get something you like out of this But you're giving away a lot of clarity just on the trust that what is happening is people are keeping a good hand of cards with a good strategy of poker hidden from you, as opposed to what's happening is what we seem to be seeing in public.

which is Donald Trump is a chaotic and erratic person. They are making policy in a chaotic and erratic way. That policy is having chaotic and erratic consequences. And then they are operating and moving on the fly in chaotic and erratic fashion. Saks, you heard Ezra. Say that he feels this administration is being a bit chaotic in the approach here. What's the counter to that? You heard Chamath say, hey, this is a really thoughtful, they're holding their cards close to the chest.

Maybe you could clarify what your position is. Is this too chaotic or is this crazy? What I'm hearing is a bunch of process objections to Trump's policy. And I'm hearing a bunch of nitpicking. What about Lesotho or whatever? Okay. Look, this is. a very unrealistic view of politics when we've had a bipartisan consensus in Washington for decades.

that unfettered free trade is a good thing, no matter how big our trade deficits got, no matter how rich and powerful China got, no matter how unfair the trade practices got, no matter how many millions of our jobs and factories got exported overseas. This has been the bipartisan consensus in Washington.

And Larry, you're right that it started before the Clinton administration and the George W. Bush administration definitely accelerated it. But there has absolutely been a bipartisan consensus in Washington that this sort of unfettered free trade policy was good for the country. Now, look, you can nitpick this and you can make all the process objections you want. But Donald Trump has changed the conversation. You keep saying I've offered a process objection when I'm objecting to the absence.

You were pointing to Donald Trump's views when he was a public figure in the 1980s and 1990s on trade as somehow he was wrong. He was not wrong. He was one of the few people and the few public figures in America who was right about this. I think most people today would say he was right about this, that throwing open our markets to these foreign products without thinking about the consequences was a mistake.

Really, you do. No, I'm confused about the incoherence of your position. Larry, Larry, David, you still believe that the Clinton administration, let's call it a bipartisan consensus that era was correct. While at the same time, you're arguing that PNTR didn't do anything. I think it is really telling that you are so...

much more loath to defend what we are seeing than to attack what has been. It's fine. I guess you could have... It would be interesting to have you and Larry go... To me, they're the same thing. It should have you and Larry go 12 rounds on... The Clinton era. But, you know, when I say to you, listen, there is not a stable set of objectives that fit the policy here. Can I answer that? You say that's a process? I just would like somebody to defend the thing they keep actually doing. I would like.

They understood Chamath. Chamath, resilience, central, four sectors. Are we more resilient in the four sectors? What's the answer two years from now? I got that. I agree. all that. I cannot make any linkage between a 10% across the board tariff. a tariff on automobiles. And much of what the rest of the president says and your very valid objectives. I hear David. I can give you this free trade has destroyed America and we're going to undo that.

I can give it to you. And I just want to understand how we'll know whether we have fixed it. Okay, look. I can answer this too. Go ahead, David. All right, look, Larry and Ezra, welcome to a political coalition. Different people have different objectives, just like different people had different objectives for the policy that we had in place 25 years ago. Okay. There are some people who think.

That we should have an across-the-board 10% tariff to raise revenue because the country needs revenue. And that that would be a better way to raise revenue than to, say, have income taxes or capital gains taxes. Stan Druckenmiller, who's not a fan of tariff. nonetheless said that he would support a 10% tariff, no more than 10, but up to 10 as a way to raise revenue. Okay, that's his point of view.

There are other people, and I would say I'm more someone who thinks about the geopolitical consequences of this, who think it was a huge mistake to throw open our markets to Chinese products. basically feeding their economy to the point where they could become a pure competitor to the United States and threaten the U.S. world order. One more time. Hold on. There's different people with different objectives. One more time. Because you are just not speaking truth.

One restriction that the United States had on Chinese products that was changed in the year 2000. You've said seven times, throw open our market to Chinese products. I want to know one example. in which the United States opened its market in 1999 or 2000? Just one. Do you have one? Can you name one product where restrictions were reduced? Okay, David, name it.

Listen, you're mischaracterizing what PNTR did. We can play this like a grok game if you want. People can go ahead and grok this question and they'll get this answer. Look, the answer is that before PNTR, China was granted MFN on a year-by-year basis by Congress.

PNTR made it permanent. What does that do? It created a permanent new framework for trade relations between the United States and China. So it created permanence and it created a certain expectation. What did that enable? Massive investment. by U.S. companies in China. So all the bean counters from McKinsey started talking about outsourcing and just-in-time manufacturing. They started moving the factories over there in a much greater way.

You know, the Mitt Romneys and private equity said, this is a great idea. Let's move all of our manufacturing. Could we agree that whether or not it was the WTO move? The bankers on Wall Street got to financialize and securitize. all sorts of new products. Okay.

That was the result of PNTR. The thing we have to decide really right now as a country is if the thing that you all are trying to replace us with is better, right? If it will work. And so I want to go back to what you said a minute ago, David, when you're like, welcome to political coalitions.

Larry has been in politics a long time. He was Treasury Secretary. I've covered politics for a long time. I'm familiar with political coalitions. In fact, a lot of my book is currently about the problems in the way the Democratic coalition with too many objectives all at once. can end up destroying the ability of the policy to actually achieve a clear goal.

So this is precisely the non-procedural objection I am bringing here. This is why I think it is dangerous to be treating an upheaval of the entire global financial system. Without a clearly defined objective that is connected to a policy. And so the question is.

If the idea is that there are all these different players here who have all these different policy objectives that would connect to all these different policies and everybody's getting a little bit of them and Trump is kind of flipping back and forth through different versions of them. You could end up, despite, yes, whatever mistakes were made in the free trade consensus, which I do agree that we had, you could end up with a bad next, not even consensus, just a bad next policy.

An unclear coalition that is fighting with itself and is making policy without a strong process can create not nitpicky procedural problems, but actual damage and disasters. Chamath, let's try to look forward here. This obviously has been cataclysmic, chaotic, intense, whatever descriptor you want to use of the past week. Productive. Okay, sure.

And it certainly created massive swings in the market. Is this all going to cause a recession? Is this too violent of an approach to markets? That is, I think, a valid. criticism that people have, including, you know, the majority of business leaders are saying, hey, I think I have to start layoffs.

you had united airlines say we're not going to give any guidance this feels to business leaders republican business leaders primarily and market participants as just far too chaotic and they can't plan And if they can't plan, then they stop planning, which then is going to cause layoffs, it's going to cause bankruptcies. And who knows what the second and third order consequences are going to be. So what's going to happen here over the next couple of weeks and months?

So just on the recession question, and I'd like to give an answer to Ezra and Larry. I think that, and I've said this for about a year, it was clear to me that we were sneakily in a recession before. And the reason was the vast amounts of money and deficits that were being pumped into government services that perverted the actual GDP picture in America. So as Doge sort of slows down that money flow and as the consensus in Congress gets to a better budget.

I think that you're going to see that the government was probably responsible for 100 to 150 basis points of just waste. And if you take that out... you will technically be in a recession. That was independent of these tariffs. And I think that that's where the true economy, Jason, was. And I think that we're going to just find that out. So that's that. On where we go from here.

I can give you an anecdote, and I'll give you a projection. The anecdote is this weekend, my wife and I were in bed, and a person called me, very successful businessman who was representing the president of a country, saying, hey, Chamath, I need some advice. What do we do here? And we walked through the three things that he and his government, that they government were trying to figure out because they wanted an off ramp. They were like.

I'm ready to cry, uncle. We're ready to tap out. And again, he was calling me as a private citizen, but I think this conversation was very instructive. Number one, he's like, look, we have these really high tariffs on inbound American products. We're happy to cut these things to zero. And I said, well, you should do that. Second, while we were exploring, he's like, yeah, you know, we have an enormous capital purchase with Airbus. I said, cancel it. Swap it to Boeing. He's like, done.

And then the third, which was interesting, is he's like, we need to import an enormous amount of energy. And I said, well, who do you give that concession to right now? And it was a non-American company. And I said, well, why wouldn't you just RFP that to an American business and let them compete? And he's like, we'd be open to that as well.

So he said, you know, we're getting prepared. We want to find a way to talk to the Trump administration. And I'm like, great. However, I can be helpful. I'll be helpful to you. I got off the phone. I looked at my wife and I said. If even 30 of these 75 countries do a deal anywhere remotely close to this, This was an enormous win. So let me give you my projection, Jason, of what the art of the deal could be here.

What you do is you can rewrite Bretton Woods 2.0. What was Bretton Woods 1.0? It was fixing exchange rates. It was setting up the IMF. It was setting up the World Bank. Those were the conditions on the ground post-World War II had made a lot of sense. What would we do if we had to write the Mar-a-Lago Accords right now? I think what we would do is work backwards from the question that Ezra asked and the answer that I gave.

in these critical markets, number one, a framework for that. Number two is how do we create limits for government-sponsored intervention against capital for-profit companies, many of whom are American? so that we can actually compete on a level playing field. And then number three, very simply, if you can do business in my country, why can I not do business in yours? And I'll just give you that story for one second. I was responsible. I was the head.

of every single entity of Facebook outside of the United States. I opened every market. My team and I created a framework for dominating. We figured out how to crack Brazil, India, Russia. You know the one market that we never could ever make a single iota of progress? Say it, Jason, with me. Well, China, Russia, Iran. No, we won in Russia. So my point is, in every single market except one, is it that we were just lucky in 174 markets and one we were stupid? No.

So I think that the Mar-a-Lago Accords, this sort of Bretton Woods 2.0, is the outcome, Ezra. It will basically use tariffs as a way to get these governments to a table and allow us to negotiate a much... fairer economic quid pro quo. Here's my concern with this theory. I want to leave out, I'll leave the sort of question of what the real economy looked like to Larry. This world,

In which what is happening is a business leader who represents a country is calling you and saying, OK, what do we need to do to deal? Right. They're coming to Donald Trump and they are going to come to Donald Trump. As Larry said earlier, there's no doubt that the U.S. economic leverage is enormous.

And virtually every country faced with our might is going to try to cut a deal with us. But then there's a call they're not making to you, but they're making to someone else, which is... allowed, or we have approached the US as a functionally benign partner for a very long time.

And now they're becoming a dangerous partner. They are very, very strong. And they will use that strength to crush countries smaller than them when it suits the whims of a personalist regime run by a person who... his feelings even about people that the U.S. or countries the U.S. traditionally considered allies like Canada or much of Europe change.

And so, yes, on the one hand, for the next year or two, we want to avoid getting a big tariff slapped on us. And so we got to figure out what is it that if we offer it to Donald Trump, he will say to himself, that was enough. of a give that I can move on to someone else. I can make them the focus of my ire.

And on the other hand, they're going to begin to build fortresses and deals and partnerships and approaches that make sure they are less exposed to our ability to wield this power against them in the future. But before I came on the show, I had gone on X and I saw... A clip of you going around where you're saying that one of the problems with the Biden administration.

was that you couldn't get anybody on the phone. And in the Trump administration, you make the call, the deputy chief of staff picks up, you say, hey, I need you to talk to this company. I work with them. They're freaking out about the tariffs. The deputy chief of stock tells a company. They work something out. No, no, not that they work something out. They listen. They listen. This world in which... We are doing the deal-making by... individual relationships, by who can get their calls answered.

not by rules that feel clear and stable. Ezra, that's how the Biden administration worked, Ezra. That's not what Chamath said. And that's not what I said. No, Ezra, you're trying to make it sound like corruption. Hold on. Ezra and Biden, it was George Clooney that was making the call.

Who cares what George Clooney thinks? Didn't you just say on, well, I was very, very critical of Biden running again. I saw that clip, Ezra, and what Chamaa said is simply that the White House listens when he calls. Whereas he couldn't get his calls returned by the Obama administration. Great. I think we're actually not saying something all that different here. No, you made it sound like corruption. Like it was to help a company.

Trump is working through is deal by deal patronage based on how he sees the company. I'm sorry, the other country. That's not what happened. Ezra, can I just make sure that this is clear? This is a hundred and fifty year old. American business. I have no interest in that company except a friendship.

These are Americans hiring Americans trying to compete with China who were very negatively affected. And all I said was, why don't you have a chance to explain what's happening on the ground? My point that I was trying to make, and maybe I didn't make it clear enough, so let me set the record straight.

The Trump administration, what I have seen as a businessman, is willing to hear the conditions on the ground. As a businessman, when I was building, Ezra, just to be clear, critical rare earth supplies for America under the Biden administration. battery can materials to compete with China under the Biden administration, AI chips to be the best inference solution under the Biden administration. I couldn't get a call back.

That's just the facts. Not because I wanted anything, just to tell them what was going on. So fair enough. That is insane. Okay, fair enough. I am not telling you that the Biden administration shouldn't have returned your calls. What I am saying is that the degree to which Trump first...

And then everybody around him, as an example of him, because culture comes from the top, is working off this kind of individual call and deal making worries me because I believe that you had every one of these calls you're saying and they went exactly the way you say they went. And then the calls that you are not getting and they are. Two minutes ago, Ezra, you were saying that a 10% across the board tariff was. too broad and we need to go industry by industry. And now you're saying.

that it's going to be too particular and he shouldn't do country by country negotiations. And you keep using the word deal-making, listening to people. Listening to people is not deal-making, Ezra. It's just listening to people. Are you really going to be here and tell me the way Trump himself works? It's not individual deal-making with countries, with people, with Eric Adams. Is this really the argument here? I will tell you what I've seen, and David's seen much more.

What I have seen from the president is he takes in... hundreds of opinions and starts to figure out what the ground truth is. And the reason is when you only listen to one or two, every president probably deals with this. You have this information asymmetry problem because you are the president of the United States. And so how do you cut through it? You talk to hundreds and hundreds of people and you triangulate what the truth is.

So it's not like he's giving any favor. He's collecting information. That is a good process. You want the most powerful person in the world to get to the ground truth. Go ahead, Larry. I am all for information gathering. I agree that the Biden administration did not do as good a job as it could have of maintaining relations with the business community. I agree that it's a good idea for there to be quite extensive connections.

I am also appalled by the half dozen phone calls I have gotten from prominent people in business who have said, I'm used to being shaken down when I try to do business in some parts of the world. to be shaken down by representatives of the President of the United States. What's the shakedown? When you have...

Close connections. You help us. You contribute this way. That makes no sense at all. Makes no sense, Larry. What the president has been trying to do is encourage domestic investment. Maybe it is an erroneous perception. to which I have been exposed repeatedly. Total nonsense. But it is a pervasive.

Total nonsense. You guys are very confident that your anecdotes are true and everybody else's aren't. It is a perception that is shared by almost everyone who has experience in the conflict of interest area. who has looked at the situation of Trump administration officials. And those working as special government employees in the Trump administration. What are you saying? Because I just went through that whole process, Larry. What does that mean? It may all be false.

I can speak to this because I just went through this process. It took like months, okay? I went through the same process everyone else goes through. The OGE career staff have to go through all of your disclosures, and they figure out what the conflicts are, and then you have to divest them, okay? It's the same process everyone goes through. So you're all over the place making all sorts of accusations here. So if you have some proof or you want to accuse someone, then why don't you just do it?

Otherwise, what you're saying is just not true. It's not backed up by anything. Great. They shook down Eric Adams. That's a direct accusation that happened in public. They shook down Eric Adams because they put him in his pocket. That's a big deal, y'all. That is the way they are doing business here. You guys are all over the map making wild accusations. First it was... Hold on a second. Three resignations because of their discomfort with being overruled.

by your colleagues in the Trump administration. So the suggestion that you have been held to the same ethical standards that I was held... and that other members of previous administrations, including the Bush administration, were held, unfortunately is not right. All right. Well, there's two issues here. We're talking about two different things here.

Hold on. I had to divest a lot, as I talked about in the show. In any event, you guys are all over the map making wild accusations. Two seconds ago, the shakedown was at the level of company. Then all of a sudden it was OGE and ethics. Then it was something about Eric Adams. It's an integrated way of doing business. Nobody's making it. I like that you're like, who's Eric Adams?

We're not making. No, I know Eric Adams says I supported him on this show. It's a straightforward way that Trump does business at every level at which he operates. And so it is happening. Can I give you my personal experience, Ezra? I know you don't want to hear it. It's not that I don't want to hear it. It's not that I don't want to hear it. You know how this started? Hold on a second. Ezra, you misquoted.

Something Chamas said on another podcast where all he said was that I can get my phone calls returned by this White House where I couldn't with Obama or Biden, even though he's a big donor. Hold on. And you guys have somehow morphed that into some sort of like. broad ranging accusations of corruption or something like that. I think I'm being very clear about what the...

accusation of the way Donald Trump works is. Ezra, your accusation of me tried to infer some form of corruption or some form of deal-making. None of that happened. Again, I'll tell you. I connected the White House so they could hear on the ground what's happening from a company who was very negatively impacted by the tariff so that they had the complexion of that feedback as well.

Okay. Do you deny the possibility that your experience with the Trump administration might be different than people who they feel are less allied to them than you are? Ezra, I'm willing to... It's a straightforward question. What I'm trying to... Are you sure that you're a good sample?

I don't even know what we're talking about anymore. I think what we're talking about right now is that people who donate to politicians have unique access to politicians. I think we can all agree that that's the case. That's not true. Okay, just to be very clear, I have given way more to the Democrats.

than I've given to Donald Trump. And you were disappointed about that. I didn't say anything about your donations. I said about where you're allied now. And by the way, like what's crazy is I was the same intellectual person I was under Biden that I am under Trump.

It's just that it seems like the Trump administration is like, well, this is a smart guy with some opinions. Let me listen. And by the way, and Larry, you know this. These are some very close friends of ours that we share mutually that would not even return my calls. So it is a little personal for me as well, Ezra, just to be honest with you. I'm not going to go there. But the point is, I have never seen a single iota.

form of anything other than just gathering information from the Trump administration. They've never asked me for anything. They've never tried to direct me to do anything. They just want to know what's going on when you ask them, hey, can you talk to such and such a person? I can assure you that you're experienced. is not the experience of quite a number of the nation's major law firms.

It is not the experience of quite a number of the nation's business leaders. It is not the experience of quite a number of the nation's universities. I am neither the first nor the hundred. person referencing efforts at extortion to use the movie The Godfather as a metaphor for aspects of the way in which our country is being governed. What a surprise. Democratic universities and democratic law firms are making accusations.

All right, let's move on. We think we've missed the tariff issue. And I think we can all agree that if you donate money, you might have better access to politicians. I want to talk about the future. Especially Jason, if you give 10% to the big guy, then you really get access. we could do these allegations all day long if you you know yeah there's a long list of people who've made donations and there's a long list of favorable things that have happened to them after across all administrations and

We can debate cause and correlation all day long here, but I wanted to talk about the future of the Democratic Party while we're here. Ezra, you have been on a tour talking about exactly... how incompetent, how terrible of a campaign they ran. What is the future? And I'll let Larry get his two cents in here as well. Is there any saving this party? And if so, what would it look like?

Well, there's the problem of the party in the campaign. Let me bracket that because my book Abundance is more about how Democrats govern at both the state and local and federal level and some of the pathologies of governance there. They make it hard for liberals to achieve their goals. There are versions of this on the right, but I'm not really writing about that in this.

So my book, Abundance with Derek Thompson, is about the tendency Democrats have to subsidize things where they are choking off the supply of the thing they want people to have more of. So think about housing in California, you get rental vouchers from the federal government, but we make it incredibly hard to build homes.

clean energy which a lot of the by demonstrations policies were about putting huge subsidies behind the building of more clean energy, but they didn't really do anything to make the permitting, the siting, the state capacity to do all of that. capable of building that amount of clean energy at the pace they foresaw us building it, right? That they wanted us to build it.

And behind this, and I can sort of go into a lot of detail here, but is a diminishment of state capacity that comes from wrapping the state itself. in red tape and regulation. I think we think and have an intuitive way of thinking about the idea of deregulation on the private sector, right? When the government is imposing regulations on private companies and it's making it hard for those companies to act, to do business, etc.

But this happens first and foremost on the government itself. One of my favorite examples I've been using lately, there's a new RAND report that looks at how much it costs to construct a square foot of housing in California, in Texas, and Colorado. And it does it on two kinds of housing, market rate, and it does it on affordable housing subsidized by the public sector. And the cost of creating housing in California market rate is 2x in California what it is in Texas.

But when you get into that publicly subsidized housing, where you have all these new standards and rules and regulations being triggered by the addition of public money, it goes up to about 4.4x. And so you have this real problem, I think, in a way of governing that evolved in the 70s, the 80s. There's a kind of small government version of the Democratic Party, the new left, more individualistic.

that was worried about too much exercise of government power. And now that we are in a different world with different problems, we're thinking about re-industrializing, we have a housing shortage. And you have things like the Biden administration, which really are thinking about how to build a lot more in America, but you don't have either a policy architecture or I would say a governing culture.

possible. Yeah, and so a lot of this came from Francis Fukuyama, I think, and Votocracy? Votocracy? How do you pronounce this? Fukuyama is a great sort of related concept of vitocracy, which is that... Vitocracy. But he also got another great concept since we're bringing it up. about Fukuyama, which is that neoliberalism, which we've sort of been talking about here with the WT and other things, he says people think about it as the veneration of the market.

But what it is first and foremost is the degradation of the state. And I think that explains a lot more about the world we're in than people recognize. Ezra, you can agree with this. Francis Fukuyama is probably one of the most polarizing modern... academics in America. As you read it, people end up in, they're very pro Fukuyama or they think Fukuyama is insane.

Yeah, I mean, look, because what happened is, I mean, just to up level this for a second, is that you had Fukuyama write the end of history, which basically said that democratic capitalism is the end all be all. And we're basically down to one system and the whole world's going to run on that system. And that philosophy then animated, I would say, a neoliberal and neoconservative consensus in Washington for 25 years. And there were three key pillars of that, let's call it globalist consensus.

Number one, we'd have open borders, free flow of labor. In fact, the Wall Street Journal editorial page, which is considered to be conservative, actually supported a constitutional amendment saying that we'd have open borders. Number two, we'd have open flows of trade and capital. So basically the unfettered free trade agenda.

And then number three, the third leg of it was Pax Americana. We'd deploy American troops all over the world to defend this consensus because they'd be greeted as liberators, not occupiers. I think all three pillars have been refuted. And the person who has represented the shift in this consensus to, I'd say, a new agenda. and geopolitical nationalism is Donald Trump. Wow, I was going to guess that. Listen, when you have...

So this is a real Fukuyama violence. End of history and the last man is a much more complicated debate. Let me finish the point here because I'm kind of on a roll here. Yeah, keep wrapping it up. Bring it home. When you have a bipartisan consensus. that included both Bush Republicans and Clinton Democrats around these three pillars of globalism.

And then I'd say that country turns against that. That's not going to be a smooth process. That is going to be potentially a violent process. It's going to be a disruptive process. And you guys want to raise like all these nippy objections and process or whatever. Donald Trump is bringing that realignment. But the real question is...

Was that consensus correct or was it a failure? I would argue as a failure. Larry, let me ask you a question then. When you see something like Doge happening and people start taking a bit of a more unilateral, a quicker, a less veto. based approach is that encouraging to you larry do you think that's the right way to do it because we haven't been able to get the government smaller since clinton so are you pro doge not doge and do you think

this sort of objection to, hey, we're going too fast, too violently. Maybe that's what we need to do at times. And then I'll go back to you, Ezra, to answer the same question. I think Ezra is broadly right. about the promiscuous distribution of the veto power. He's broadly right that we need to be able to do more things more quickly in the state if we're to be an effective government.

think we need much more reform i think democrats have allowed themselves excessively to become hostage to particular groups particular traditional concerns and have lost touch in important ways with an American mainstream.

And I think that insofar as the election outcomes in recent years have not been what they wanted, that is an important contribution to how that has happened. And I agree with David that Donald Trump... represents a transformative and profoundly different ideology that has been present in governing America before. I do believe that it is fundamentally not new under the sun, just new in America.

It is the Juan Peron approach, which is very familiar to students of Latin American history in particular. And that the general experience of that approach is that its leaders, particularly when they have galvanizing personalities, can be very popular for a substantial period of time. but that they are very rarely remembered well by historians of their countries. And so my best judgment is that this project is... going to end in disastrous failure. despite having put its finger.

on some important concerns. and issues. Of course, there should be much more aggressive reform of the government than there is, but that does not excuse. or mean that it is likely to work out well for some of the mindless savagery. that the Doge is bringing to traditional American institutions is going to work out well. And to take just one example, my belief... is that the revenue loss from the Dozier's destruction of... significant part of the functioning of our nation's tax collection system.

is likely to exceed in terms of contributing more to the deficit. What do you mean by that? What is it identified the right thing, but they're executing on it too much? Go ahead, Jamal. No, no, I have two questions, Larry, just tactically, what do you mean by the destruction of the revenue collecting mechanism? That's question number one, which was just.

I just want to understand what you meant. But second question, which is more broadly, if Larry, if you were president for a day, just give us the Larry Summers plan. Like what is the counterfactual to what's happening now? You can include tariffs. You can include Doge. I just want to understand how you would frame the solution to what ails us.

So maybe tactically just talk about the collections part because you referenced it and then just more strategically what the Larry Summers 2.0 plan is. We are firing en masse. people whose job it is to audit people like you. And the result of that is that we are losing revenue directly. We are losing revenue further because people once audited go straight in subsequent years. And we are losing revenue because more and more people are playing the audit lottery, engaging in problematic practices.

in the expectation that they will not be caught. Let me tell you my experience. I get audited every year automatically. And the reason you get audited every single year is typically the way that you acquire your wealth. creates complexity. 700, 800, 900 page tax filings. Now, you don't do that yourself. What happens is you typically pay a large big four accounting firm millions of dollars to do it. Deloitte. PwC, Anderson, etc.

Every year that I've been audited, the biggest delta has been about $1,000. In this case, I actually was owed $1,000 by the U.S. government last year. What did you spend it on? Incredible. I'll spend it everywhere. So, Larry, just so you know. I'm well aware of everything you just said, and I have no doubt about your personal integrity. It's not the honeypot you think it is. Less than a quarter of people with incomes over $10 million are audited.

So lucky me. It's just not true. Let me ask you a question. It's not true that everybody is audited. I get the sense, Larry, you like Doge, but you don't like the execution. Got it. Ezra, you talk about your book. We got to move faster. We got to do things faster. We got to take more risk. So are you pro-doge or not? And if you look at the Democratic, if you look at this administration, I'm going to call it Trump 2.0 for clarity.

These are, I would say, two out of three people around Trump, whether it's Shamath, Joe Rogan. Besant, Howard. even Trump himself, are Clinton Democrats. I thought you were going to say Jason. You were going to say yourself. I don't matter. Ezra, are you happy about Doge? Your book seems to be a plan to do Doge-like things. I think building state capacity is two dimensions. One is what the state can do. And the second is the rules under which it does it.

Doge seems to me to be fundamentally destructive of state capacity. First, and this goes again to my... endless frustration that I feel like goals are not clearly laid out in the Trump administration.

what are the measures we are looking at and how will they achieve them? Is it just trying to cut spending? Save a trillion dollars. They've been very clear. But that's not efficiency, right? I could save a trillion dollars. That's not? No. I could save a trillion dollars in ways that will make the... Let's put it this way. What Larry was just saying, right? If you cut everybody at the IRS, right, just cut every single one of them. On the doge measure of how much did you save in headcount?

that will look like it counted up towards your save a trillion dollars goal. But in terms of what Larry is saying, which is the long term efficiency of U.S. tax collections. you'd have just made the IRS much, much, much less efficient. Yeah, we get that. But they've also cut all these bogus software and consulting nonsense and all the grift and the crime. There is some stuff I am not going to tell you that there are zero doge cuts that made sense.

But I am going to say that what I see them doing overall is highly destructive state capacity. Or similarly, a lot of things happening around USAID and, say, PEPFAR funding. Is PEPBAR efficient? I mean, yes, you save money by not giving HIV retrovirals to children in Africa. But I think it is good that you do that. Right. So that's not the kind of efficiency I'm looking for. I am interested. in state capacity that is connected to achieving specific goals.

I've talked to a bunch of people around Doge. And again, here you get a lot of different ideas of what the goals are. Some people say, well, what we're trying to do is save money. But if what you wanted to do is save money, you could say, go to Congress and do a very big bill. There was a lot of interest in Congress, people like Ro Khanna, who wanted to work with Doge to identify big spending cuts that both sides could agree on, defense being a big piece of this.

And then they decided not to do it. So Doge, to me... It would be great if somebody tried it, but I see this as much more of a destruction of state capacity and a hack and slash operation. Larry Summers, we're going to thank you for coming. I know you've got to drop off right now. Thank you. Wait, what about Larry Summers 2.0? Would you like to do your Larry Summers? Yeah, before you leave. I want to know what the counterfactual is. Yeah.

What's your plan, Larry? Counterfactual is focus on necessary strategic investments in infrastructure. in making America the leading country unambiguously in the world in technology, particularly disseminating in large-scale artificial intelligence. for collective benefit, building a larger network of alliances so that we are in a position to counter. both with hard power in the form of increased military expenditures and with moral strength and the world as a whole behind us.

as a central organizing theme of foreign policy and reinvent. our education system at every level to pick up on Ezra's notion of being about results. And doing all of that while you're doing the abundance agenda as well of freeing stuff up so that we're in a position for government. to get things done i believe the country is best governed from the center not best governed from a radical fringe and I believe moving to a transactional model of leadership.

is the approach of Latin American strongmen, and history does not find it to be a successful. And so I would venerate rather than denigrate the rule of law as part of governing the country. All right. There you have it, folks. Larry Summers. Appreciate you coming on the pod. Thank you, Larry. Spicy, spicy episode here. Sax, you wanted a chance to respond on the Doge issue as we wrap.

Wow. Pretty productive episode. Yeah, let me partially agree with Ezra here. I mean, I think that he's trying to introduce this idea of an abundance agenda to the Democrat Party. I think that's a good thing. You know, I know you've talked about. not tying up projects in so many hoops and so much environmental regulation and even DEI and all this kind of stuff. I think that is all well and good. I mean, we should do those things. The thing that I take issue with is that

You're on the one hand saying that there's way too much process around just getting things done, right? When you're talking about public works. But the objection you're making to Elon... is that he's not following enough process. You know, it's not enough niceness.

This is the problem is how do you expect anything to ever get done? The reason why your public works projects don't happen is because there's too many special interests who get organized and they stop it. Okay. What Elon is trying to do, we have a $2 trillion annual deficit. Every single program that gets cut, the interests who receive that money, and we found out that it's hopelessly corrupt.

You know, Stacey Abrams gets $2 billion for her nonprofit. And you have all these NGOs who are basically cashing in. They're all going to do everything in their power to stop. those cuts from happening. And they're the ones who are ginning up this hysteria, you know, burning down car dealerships and so forth and so on. So this is the problem that I see is that You don't really have a kind word to say for the people who are actually getting things done, who actually are reforming things.

Elon is one who's actually making the difference that you should want. Can you find any good in this? I mean, you sound like you're cherry picking. When I brought it up and I questioned you, like, do you support Doge? Your first thing is to say, like, well, here's my favorite pet projects. I want to keep those. But yes, right? Like this is, I think, really important. And weirdly, it's the through line of almost everything I've said on the show today. Knowing what you are trying to achieve.

is the first part of achieving it. So if Doge is cutting things that I think do good in the world, I'm not going to say, hey, look, they're making the government more efficient. We no longer have a strong... foreign aid program or whatever it might be. They've destroyed the Department of Education without knowing what they're cutting there. I don't think Doge is doing a good job because I don't think they have in a thoughtful way.

connected means and ends. And weirdly, my critique often of Democrats is also that they have not been outcomes focused. They've been process focused. So David's point here is actually not been the critique I've made here. I would make procedural criticisms of Doge. But there's a world in which my take on Doge... is, look, I agree with what they are trying to do, but I wish they would follow the law. But that's not my take on Dutch. If you had to pick...

Kamala Harris continuing the spending that was going on or Elon and Doge cutting, which would you choose? I would absolutely prefer the Kamala Harris administration to the Trump administration.

Would I like to see Democrats be significantly more reformist? Yes, I've written a book about it. I'm trying to persuade them of this argument. But your book is about a... getting rid of this red tape and you just said you want to keep the people who put us eight trillion dollars hold on you just yeah you say you want change This is radical change. I agree. But you just said you would rather have had the person and the administration that put $9 trillion.

On top of the deck. This is why you'll never get that change, Ezra. You guys all invited me here. You'll never get the abundance agenda that you want. I don't think. Because it's people like Elon or Trump who get things done. This is the way that politics work. You have to have a paradigm shift to get what you want. I think getting dumb things done is not good change, right? I actually don't understand how this point is so hard to grasp.

If you get a lot of change and the change is bad, I am going to think that is bad, not good. I would hope that is true for all of you, that if Kamala Harris... Or some other Democrat came in and began wrecking things that you wouldn't say, well, we needed a bunch of change. Like, let's break everything in sight. I want to see things done well. There should be good permitting reform. Let me give you an example of the kind of thing that I am looking for. We talked about chips a bunch on this show.

I like the CHIPS Act. I did a big piece that coined the term Everything Bagel Liberalism about the way in which the ideas inside that act, when they began building out the grant program, layered on too many standards and programs and so on. But one thing they then did. was they passed a bill or Biden signed a bill by Ted Cruz and Mark Kelly.

taking chips out of the normal environmental review. Because they said, look, if this is a matter of national security and we're trying to build a semiconductor fab so quickly... We cannot have this layered in years of environmental review, which now take on average three and a half to four and a half years. So because I care a lot about clean energy, one of my arguments.

is that we should have a speed run for clean energy. It should not go through the normal levels of review. What is happening in California high-speed rail, where it had 12 years of environmental review, was not, in my view, a good idea. At the same time, that doesn't force me to say, well, I think we should build a bunch of coal plants without environmental review because I can make.

distinctions between things I want to see happen in the world and things I don't. I think you're totally right with that. Let me give you the more practical day-to-day example, because those are these albatross projects that are largely a byproduct of ineptitude and corruption. But let me tell you a more tactical example so that

you can understand why what Elon and Trump are doing is so necessary. So as I told you, in 2020, on the back end of COVID, I started a business to build battery cathode active material in the United States, okay? So that's a business we need so that when you want to electrify everything you want to electrify, there are batteries that we can make that's not reliant on the Chinese supply chain. It made sense.

The guy that I started it with worked for Elon. The other guy I started it with was a professor at Stanford. And the third guy I started it with was the head of battery engineering at Toyota. A more complete group of people I think you couldn't put together. So we start to build, we get a deal with General Motors. So far, so good.

But eventually you hit a point where in order to really commercialize, you need some form of government acknowledgement that you're good. And the way that you do that is you apply to the DOE. And the DOE has a very legitimate grant program that tries to accelerate these key things, especially things that are critical. We went through that program, Ezra. We paid a couple million dollars in consulting fees to the people that we were told to pay it to.

And we were rejected. Okay, fine. Kept going. I kept funding the business. And then next year, last year, we applied again. 125 companies applied. 25 were shortlisted. We all went through incredible diligence. We won. Incredible validation. At the end of that entire process, so really two years from when I started and millions of dollars, we got $100 million federal grant from the DOE and $50 million from Michigan to build a plant.

in Michigan to help redomesticate battery cam in the United States. It turned out that in that same period while we were going through that rigmarole, Stacey Abrams got $2 billion after 30 days. And I just asked the question, what is broken inside of the government that that's possible? That's hopelessly corrupt. That's exactly right. A company of 50 people, 50 people.

where none of this money goes into our pockets. We take that money and we then have to raise more money. I have to put in more money. We try to hire people, we try to build a battery factory that can basically give us resilience against the Chinese. which I think is great. They're an incredibly forward, you know, strong and viable competitor. In 30 days, she got 20 times more than we did.

So here's what I'll say on the two things. And how do you fix it? I have not myself looked deeply into the Stacey Abrams story, but I'm very skeptical of the accounts I keep hearing about it. I suspect that if she had made $2 billion in 30 days, she wouldn't be now hosting a podcast on Crooked Media. She'd be on it.

island somewhere. So I can't comment on that piece of it. It's called crooked media? Yeah, the positive American thing. It's a joke from Donald Trump, actually. The broader thing here, though... Right. Which is you're getting at you're frankly, what I worry about is that what you had in that DOE process was fairly quick for the government. One of the things that I am targeting in the book. is a way that even when members of... the administration, when governors want things to happen.

They are not willing to upend the process, to pass the new bills, to reconstruct the architecture of the federal or the state government. to get it to happen. Jerry Brown and Gavin Newsom wanted high-speed rail to happen. Can't you acknowledge it's insane that somebody can get $2 billion after 30 days? I am not going to acknowledge a story I have not looked into myself because I'm not sure I...

Trust the account. I don't think it's crazy. I don't think it's crazy to get the money after 30 days, but it depends on whether or not the process was good. Hold on. I want to stop before you guys move around a bunch of like random pieces. The thing that I want to stay on with abundance for a minute here is that the thing that I think would be useful to do is actually build legislation.

to make these processes work more quickly with more discretion from decision makers and then oversight after the fact rather than heavy process before the fact. I was talking to somebody highly involved in the rural broadband programs under Biden. And one of the things they were saying to me was that there is this entire edifice, as you put it, of policy that is here to make sure I do nothing wrong. What would be better? And I think this is right.

is to allow me to act more and then look afterwards to see if I did something wrong and then hold me accountable for it. I think too much of our regulation is precautionary as opposed to being able to let people move quickly. and make decisions in the real world, and then go back and see how they worked out. I think that's a great point, and I agree with you on that.

And I think there are a lot of people out there who would say that government's too bureaucratic. There's too much red tape in terms of getting things done. Any kind of project like the rural broadband takes 15 steps. Three of them were DEI. That's crazy. The environmental reviews. And the lawsuits that bog these projects down for years make them unfinanceable.

There are people who agree with you on that. You know what they're called? Republicans. Republicans agree with this. But you know who doesn't agree with you? AOC and Elizabeth Warren and Bernie Sanders. So maybe you're in the wrong party because I don't think you're going to convince Democrats of this. Well, we'll see.

Well, I wish you well on that. I appreciate that. Yeah, no, I do. I think if you can convince Democrats of this, I think it'd be a great thing. But look, this is my issue with some of what you and Larry are saying is that. You want Elon and Trump to abide by all of these procedural niceties. You want them to play by Marquis of Queenbury rules. You keep saying this is my view, but it's not my view. You know who get things done?

This is what we say in Silicon Valley. You know who get things done? Disruptive people, founders, founder mentalities. They're the ones who get things done. Your response, Ezra, as we wrap here? I know you have to go. dumb things done quickly is not a good idea. Starlink is a much better idea than rural broadband. Neither are batteries. Batteries are not dumb things. You're asking me about what Trump and Musk are doing right now. We started here on the tariffs.

What you're watching with Trump is using expanded tariff authorities. to do things that have a bad process behind them and will have a bad set of outcomes. So look. I've asked you many, many times here. I don't really feel like I got the set of metrics I was looking for, but we will maybe talk again in two or three years and we can decide together. Was this genius work by the disruptors or was this?

a really, really dumb approach to economic policy. What was the issue with the metrics that I gave you, Ezra? You don't think they're complete? I don't think they're remote. You want the unit of measurement? Kilograms? Dollars per kilogram? I don't think they're remotely complete. I think you're processing us. You're doing to us exactly what the government bureaucrats did to rural broadband. What's your metric?

How long is it going to take you to deploy this? We have to go through a checklist. Yeah, exactly. Come on. These are debate tactics. Here's all you need to know, Ezra. It's a hundred bucks to get Starlink. It's 15,000 to do fiber. We're trying to debate principles. And you're trying to bog it down in procedural arguments. Hold on. This is amazing to me. You really think saying to you,

what are three or four metrics that would tell us what you gave me doesn't fit the policy. I mean, look, we don't need to do this whole thing again. But what you gave me doesn't fit the policy. It's just re-industrialization. Hold on. We said that we want to re-industrialize America in critical industries especially and reduce our dependence on foreign supply chains.

that are based in potential adversary countries. Aren't those concrete enough as well? Those are pretty concrete. Why isn't that a sufficient objective? Because the other thing that I, the part of you, the part of it that I did not hear. Those things can be measured. Was.

okay, where is the economy, right? There's got to be some cost you don't want to pay. So what metric would you want? I'd like to see like, okay, GDP growth has been X. Okay, so you want positive GDP growth and we want resiliency for those four critical industries amongst others.

Okay. And it'd be nice for the trade deficits to come down and, you know, especially with certain countries. All right. Get back to work then. We're all going to get back to work. We got the four critical industries. We got the GDP increase. And yeah, trade deficits. It's an open debate. All right. Ezra Klein's new book.

Abundance is out in fine bookstores and Amazon and all kinds of other places you can get it. And you can hear him on podcasts incessantly. When are you going to stop this podcast? Oh, my God. I don't know, man. It's a growth industry. One of the last. Absolutely. All right. We'll talk to you soon. Ezra. Bye, y'all. Thanks for having me. Thanks, Ezra. All right. Thanks, Ezra. How do you think the debate went? I think it's a good debate to have. And we made progress here.

Paradox of all of this is... What they're describing in some ways is what Trump and Elon are doing. Yes. But it's a bit too hot. So if I were to give a criticism or room for improvement to the current administration. to maybe pull some of these people over.

It's basically we're slowing down and explaining what's going on a bit better. I give the administration like I give Doge an A++. It's obvious like they're doing the right thing. I give the communication like a B, like just increase the communication and you can see they're doing that. Antonio went out and talked a bit about Doge. They did a roundtable and they're updating the website faster. The more you do that, the less.

the opposition's mind is going to wander. The same thing with the terrorists. If the terrorists, if Basant was out there front and center every day talking about methodically what their plan was,

Instead of the shock and awe, I think people would be able to process it quicker. But that's my opinion. Let me just add one thing to that. It's just one person's opinion. Okay. I like that. Obviously, you can always say that communication should be better. But here's the reality of it. Take Doge, for example. You have crazy leftists. firebombing Tesla dealership. painting swastikas on Tesla cars, accosting Tesla drivers, okay? Creating violence and chaos and trying to depress Tesla sales, okay?

And who's to blame for that? And then what people say is, well, somehow Elon's the disruptive figure here. You have a crazy left wing that's reacting in crazy ways to sensible things that Doge is doing. And then what people do is they re-interpolate this chaos that's being created by the left. They somehow put the blame for that on Elon. I think you were. explanation there is even more reason to be proactively communicating decisions. So and that doesn't forgive anybody drawing SWAT stickers on.

Teslas. Obviously, they should go to jail. And if anybody's coordinating it, that should be like a RICO case. We should find out who it is. Just if we're going to bring these two parties together, which I think we came close to here of like finding some common ground. I think Chamath, you outlining your four bullets.

And then at the end, as we're saying, well, what's the impact on GDP? And then you add into that's actual, what's the, you know, input on the trade difference? For the first time, you know, these two sides, I think we outlined what should happen? What should the measure be in two years? Have we ensured those important industries? Is GDP robust?

And is the trade deficit more balanced? This is the same debate we always had over immigration. Let's pick a number and work towards a number, right? And that's where the debate in our country breaks down. in my mind, is that we don't pick numbers. We can agree that we need a ton of innovation. Segway, Jason, go.

Hey, Chamath, I saw that you were at the Breakthrough Prize ceremony over the weekend. Sorry, I couldn't make it, Yuri. I had family stuff, but Freeberg was there as well. And as everybody knows. This is the Breakthrough Prize. It's like kind of the Oscars for science. They had hundreds of guests there, and about a third of them were scientists, a third were tech founders, and you had a bunch of Hollywood folks there.

hosted by James Corden. And you had Jeff Bezos, Yuri Milner, as I mentioned, Zuck, Vin Diesel, Sergey, and Gwyneth, and Mr. Beast. Lots of excitement there. And I know David, you were at a secret conference that also I was almost invited to. That you met Gwyneth Paltrow, friend of the pot. Jason, Nick, you can show some photos here. Oh, we do have photos. Okay. My wife sent me a letter to read.

on the air. So let me just open this up here. Hold on. Is it an open letter? It's an open letter. Who's the letter to? Oh, my God. Mr. Beast. Okay. Dear Gwyneth Paltrow. Oh, jeez. It's an open love letter to Gwyneth? Okay, I'm just going to read this here. Last night when I met you... I learned in that moment that pheromones are not a myth. They are real and apparently trademarked by you. You have the kind of femininity. that could destabilize the stock market.

I left the encounter slightly dazed, unsure if it was your presence. or an as of yet unlisted Goop candle. Okay, wait, let's just stop here. Let me just mansplain what she's trying to say here, guys. Wait, are you saying that Gwyneth Paltrow is hot as balls? Okay, that's the mansplain. She has so much aura. And Riz, David, you have to I mean, I don't know if we have the picture where David met her at the JPM conference, but she is so kind.

She's got high EQ. I got to say, so cool. I have to say, like, I've met a lot of stars. That's like a star star. that's a star star where you're just like holy you're just kind of like a little bit in awe she's oh She's a star. She's a star. Look at that. There she is. Fifth bestie Gwyneth Paltrow, GPO. Nat was stunned. Nat was stunned. I was stunned. We were all stunned. So wait, are you saying that Nat has a girl crush? I think so.

Girl crush has been declared here for the first time on All In. We have an official girl crush. What I think is just remarkable, Jason, though, is that another conference lost your invitation in the mail. It's crazy. You've got to talk to the post office about all these invites that keep getting lost in the mail. My White House invite?

This mailman. He must hate you or something. I don't know. I got to get invited to something. I think that you're a great, I guess I'll see everybody in F1. You're a great, you're a great family man. So at least you're, but you're always busy with your family. So I think people try to prioritize the fam. I got young.

girls what am i supposed to do you know oh my gosh big shout out big shout out to your and julia milner i think uh yes incredible what they're doing to inspire people to get into science is just so you know they get the awards are enormous it's like three million dollar awards Which I think is just kind of like, it's an amazing reflection of how important this stuff is. And so far the last two years also.

Had a little tear, had to shed a little tear. Because they do these things where like, you know, you bring some of these folks that had been impacted positively. There was a girl who had her genes edited. She was literally on her deathbed. And this guy, David Liu, who won the Breakthrough Prize, did a very targeted gene edit. She's alive and thriving.

And she gets to present the award to him and you're just like, oh my God, it's... You know, Sax, when he said he was shedding a tear or almost shed a tear, I thought he was going to say he saw his reflection in his tuxedo and just... Got a little choked up about it because of how good he looked. Roth does look good in that photo. Put it back up.

Put it back up for a second. Let's see this photo here. Let's see how it looks. What are you wearing? The silhouette on your tuxedo is just outstanding. So Nat's wearing Armani Privé, and I'm wearing Laura Piana. Which is like a double-breasted tuxedo. Oh, wow. They make a double-breasted tuxedo. Wow. I didn't even know they made... Is that cashmere? A cashmere tuxedo? I cannot comment on the material choice because it would just... That is, that's a gorgeous garment.

Well, actually, you know, Friedberg was going to be on the program today, but then he found out how many endangered species were murdered. Nick, do you have the picture of us with Zoe Saldana? Oh, there's us in Friedberg. Oh, Friedberg's good. Oh, there's Zoe Saldana and Mr. Beast. Who's the guy with the man bun? Marco Perrigo. Great guy. This is Zoe Saldana's husband, a cooler... funnier, fun dude. That guy should be at every party.

The man pun. He definitely looks like he's carrying. Look at Zoe Saldana's tattoo on her chest. I don't know if that's... I want to see if that... That close guy on X who's always critiquing Republicans. Oh, he's awesome. I love Derek. Yeah, Derek or whatever. I want to know how he responds. Well, that's terrible. Mr. Beast fails. I want to know how he responds to your tuxedo, Chamath, and finally gives you credit because I think he only compliments Democrats is sort of the problem.

Oh, is he really not? Yeah. He's always picking on Republicans. Jimmy looking thin. Did you guys see the picture of Julia's dress? I just want to say one thing about Julia's dress. Did you see Julia's dress? I haven't. Let's take a look here. This is an insane story. So this is Julia Milner. So the cool thing about this, guys, is this is...

This is a very incredible and famous painting by Raphael called The School of Athens. This is like a visual manifesto of human knowledge. And so there's all these very important people, Aristotle, Plato. Socrates, Pythagoras, et cetera. Anyways, she got the license, I think, from like the Vatican. And then she worked with Dolce & Gabbana to make it into a dress for the occasion just to celebrate learning. But there she is with... So anyways, it was a great event. Thank you.

yuri and julia for including us all right guys i gotta wrap all right david i miss you thanks for the invite all right bye I will hand deliver Jason's invitation for 2026. I'm pretty sure. I mean, I have a phone number. You could text me the invite. I could. You could send me a calendar. I have a GCal. I've got a Google calendar. You could invite me. I'm a good hang. Oh, my God. Oh, my God. It's so funny. That event that Saks was at.

one of our mutuals was like hey guys this incredible event's going on this famous person's hosting it these celebrities are coming jacal freeberg everybody you're all invited and then like two weeks per day i was like um are we going to this thing because i'm just like my calendar and everything they're like Yeah, the event's happening. And I'm like... Poor you, Jason. I love you. Did you send the event?

And they're like, I'm not sure. You're my ride or die. You're my ride or die. But you texted me the invite, but you didn't email it? Okay, sure. I will never go to an event that rejects you, ever. Like ride or die, baby. our Chairman Dictator, another exceptional episode of the All In Podcast. We'll see you all next week. Bye-bye. Bye-bye. You're the beat. We need to get merch.