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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, you know,

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Speaker 1: I don't know what's going on right now with the

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Speaker 1: broader I'll let you finish well. There are so many

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Speaker 1: different ways that sentence could have done. We could start

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Speaker 1: every episode with I don't know what's going on anyway.

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Speaker 1: I don't know what's going on right now with the

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Speaker 1: broader American economy, but I do sense that the tech

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Speaker 1: industry Silicon Valley is in a real downturn. It seems

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Speaker 1: so um, I shouldn't laugh, because obviously, for a lot

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Speaker 1: of people, this is very very serious. We've had a

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Speaker 1: number of tech companies coming out and saying that they're

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Speaker 1: going to be firing literally thousands of people in this downturn.

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Speaker 1: And what's kind of remarkable about it is this is

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Speaker 1: something a lot of people we're kind of expecting. You know,

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Speaker 1: these are all growth companies. They tend to do very

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Speaker 1: very well during periods of low interest rates. Once rates

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Speaker 1: start going up, we see the pressures sort of added on,

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Speaker 1: and then we see these cyclical downturns, right and you know,

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Speaker 1: like the story of the twenty ten with tech was

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Speaker 1: really the first industry to come sort of roaring out

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Speaker 1: of the gate, and that recovery and the broader use

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Speaker 1: economy never had a great recovery in that decade, but

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Speaker 1: tech was absolutely booming. And so there is this flip.

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Speaker 1: And you know the other thing is like, when I

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Speaker 1: think of Silicon Valley or Tech, you know, I have

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Speaker 1: certain ideas of like what a boom looks like and

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Speaker 1: all these amazing perks and free dried cleaning and free

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Speaker 1: steak dinners if you stay at the office, and free

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Speaker 1: bean bags, all of it. I don't have a great

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Speaker 1: intuitive sense about what a downturn looks like Silicon Valley, right,

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Speaker 1: And I think it's never really been promoted as part

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Speaker 1: of Silicon Valley. It's always, you know, come to this place,

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Speaker 1: create a start up out of your garage or whatever,

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Speaker 1: and become a billionaire and enjoy all this money and

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Speaker 1: all these perks. But as we just mentioned, it is

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Speaker 1: a cyclical industry. There are as many downturns as there

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Speaker 1: are upturns at this point, and yet they don't get

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Speaker 1: as much attention. No, there's definitely it's a boom bust industry,

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Speaker 1: and you know, I've talked about many times my first

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Speaker 1: memory of markets or during the dot com bubble, and

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Speaker 1: then there was the bust and we sort of forgot

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Speaker 1: about tech for a while and all these companies but

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Speaker 1: they kept plugging away. But yeah, I don't know really

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Speaker 1: what happens to this industry in a downturn, And I

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Speaker 1: think it's like an interesting question. I don't know when

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Speaker 1: it will rebound, but right now we're definitely in one. Yeah,

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Speaker 1: So we have really the perfect person to talk to

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Speaker 1: us about previous downturns. That's right. So we met this

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Speaker 1: guest recently. We were out at the Berkeley Forum on

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Speaker 1: Corporate Governance and we talked to her there and we

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Speaker 1: just had to talk to her again for the podcast

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Speaker 1: itself because it's very interesting, someone who's very informed on

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Speaker 1: this question. We're going to be speaking with Margaret O'Mara.

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Speaker 1: She is a professor of American history at the University

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Speaker 1: of Washington and she's also the author of the book

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Speaker 1: The Code, Silicon Valley and the Remaking of America. So

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Speaker 1: a great person to talk to about the history of

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Speaker 1: the valley, the history of tech, and all the changes

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Speaker 1: it's undergone. So Margaret, thank you. So much for coming

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Speaker 1: on the Odd Lots podcast. It's great to be here.

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Speaker 1: Thanks for having me. Yeah, we had to after chatting

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Speaker 1: with you recently out in San Francisco, had to have

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Speaker 1: you on the show. So you know, we do have

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Speaker 1: this idea of like what what what tech, what these

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Speaker 1: firms do in the boom times and it sounds pretty great.

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Speaker 1: So it's pretty fun. Makes everyone want to flog to

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Speaker 1: San Francisco or you know, the valley and be part

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Speaker 1: of this world. But uh, we don't really talk about

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Speaker 1: the other side as much. We instead we sort of

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Speaker 1: forget about it. But obviously there for every boom, there

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Speaker 1: must be a bust. Yeah, what goes up must come down.

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Speaker 1: Which was actually uh I was reminded of it was

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Speaker 1: that was a song of one of the many commercials

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Speaker 1: of pets dot com, which was maybe the emblematic dot

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Speaker 1: bomb story of the last big notable downtown durn In

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Speaker 1: tech which was the dot com boom and then the

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Speaker 1: dot com bust. Yeah, this is a cyclical industry. Grows fast,

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Speaker 1: grows hot, and uh and then there's a cooling period.

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Speaker 1: So I mentioned interest rates in the intro, but you know,

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Speaker 1: I don't think it just boils down to that. Can

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Speaker 1: you maybe talk about what is the common thread in

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Speaker 1: terms of sparking bus in tech, Like, what is it

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Speaker 1: that tends to set these things off sets the industry

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Speaker 1: into contraction. Yeah, well, there's some things that are very

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Speaker 1: particular to the industry, and then there are macroeconomic conditions

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Speaker 1: that are that are sparking at two. It's usually you know,

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Speaker 1: they're always working in combination. I think a common thread

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Speaker 1: is there's a big market run up um and a

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Speaker 1: lot of froth and excitement and and excitement about you know,

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Speaker 1: companies that are are legitimately you know, minting money by

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Speaker 1: doing usually by doing something new and a new class

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Speaker 1: of products. And also around that surrounding that some some

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Speaker 1: businesses where the you know, fundamentals aren't strong and they're

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Speaker 1: being buoyed by this general enthusiasm in the market. We

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Speaker 1: saw this in the sixties with what was then called

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Speaker 1: space age stocks, all these transistorized electronics that these companies

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Speaker 1: kind of the first gen of Silicon Valley companies that

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Speaker 1: were very much attached to defense electronics and NASA and

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Speaker 1: the space program. You know, so you have a little

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Speaker 1: you have some froth, and then of course macro economic

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Speaker 1: conditions are are shaping that too. You have low interest

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Speaker 1: rates that are giving, you know, incentivizing investors to go

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Speaker 1: and play the stock market, and and tech seems like

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Speaker 1: a good uh, a good bet. And there's also you know,

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Speaker 1: usually a boom is fueled by an entry of a

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Speaker 1: new group of companies and particularly platforms and products that

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Speaker 1: are high growth, whether it be the space age stocks

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Speaker 1: the sixties, or the personal computers of the early nineteen eighties,

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Speaker 1: or the commercial Internet of the nineties, or more recently

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Speaker 1: and and for quite some time. This is a very

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Speaker 1: long boom we're coming off of, you know, the big

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Speaker 1: platform companies of quote unquote big tech. So you kind

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Speaker 1: of need this sort of like nice confluence of story

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Speaker 1: in macro, like you need the investor enthusiasm. Low rates

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Speaker 1: probably help in some way, but there also has to

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Speaker 1: be like a thing that people get excited about for

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Speaker 1: because low rates itself, what did you know we're talking about,

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Speaker 1: like it kind of joked about, like the bean bags

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Speaker 1: and all the perks. Isn't that always been part of

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Speaker 1: the booms? Like how long have they been sitting on

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Speaker 1: bean bags out there? Maybe sitting on bean bags for

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Speaker 1: a while Um, I mean the bean bag goes back

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Speaker 1: to the early seventies. Uh. And and you know it's

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Speaker 1: this it's this interesting kind of but you know, if

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Speaker 1: you think about maybe not bean bags themselves, but this

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Speaker 1: idea of a different sort of corporate culture, more informal

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Speaker 1: corporate culture, non hierarchical get that goes way back. I

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Speaker 1: mean in in case of the Valley, you know, you

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Speaker 1: can maybe start that with Hewlett and Packard and the

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Speaker 1: famous HP way, the what they called management by walking

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Speaker 1: around no corner offices, shirt sleeves. Tie ties still had ties,

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Speaker 1: but we took off the jacket. Um. And this was

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Speaker 1: in the nineteen fifties. You know, Hewlett Packard was you know,

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Speaker 1: founded in a garage, iconic garage startup in nineteen thirty nine.

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Speaker 1: By the fifties, it's a publicly traded company. It's extremely successful.

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Speaker 1: And Hewlett and Packard are very kind of self consciously

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Speaker 1: working against the organization man paradigm that was the you know,

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Speaker 1: that was corporate capitalism in the nineteen fifties. So so that, um,

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Speaker 1: you know, setting that creating a culture where management and

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Speaker 1: the rank and file engineers are all kind of on

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Speaker 1: the same side is uh. It's taking the culture of

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Speaker 1: the engineering lab and transferring that into a corporation. And

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Speaker 1: it also was you know, I think philosophically too, it

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Speaker 1: was this was the high water mark of private sector unionization.

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Speaker 1: People like like Dave Packard, we're very much against unions,

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Speaker 1: just saw them as you know, that's a sign that

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Speaker 1: something's wrong with a company if if you can't find

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Speaker 1: a way to get along, and that instead that employees

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Speaker 1: of all rank should be rewarded with stock options, they

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Speaker 1: should have a stake in the ownership of the company.

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Speaker 1: So it was a different model and that that kind

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Speaker 1: of percolates through I mean HP, there are a lot

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Speaker 1: of HP veterans that go on to start venture firms,

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Speaker 1: start other companies, and they bring that laid back California

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Speaker 1: more sort of ostensibly egalitarian and corporate culture with them.

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Speaker 1: Can you give us some examples of what companies tend

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Speaker 1: to do during an industry downturn, Like, is there a

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Speaker 1: typical playbook that stands out to you with your you know,

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Speaker 1: decades of historic knowledge, or like does it tend to

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Speaker 1: vary by firm and firm culture, So for instance, I

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Speaker 1: could see, you know, if your business starts coming under pressure.

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Speaker 1: There's obviously an incentive to cut back on spending, maybe

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Speaker 1: start to trim your workforce and lay people off. But

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Speaker 1: there might also be some companies that are especially aggressive

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Speaker 1: and decide we're going to try to write this out

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Speaker 1: as much as we can and just use this as

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Speaker 1: an opportunity to take market share. Yeah, and I think

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Speaker 1: it depends a lot on the financial position you're coming

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Speaker 1: into the downturn with, and and particularly if you're an

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Speaker 1: early stage company. I point to Google as the you know,

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Speaker 1: the ultimate example of a company that benefited from a downturn,

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Speaker 1: notably the dot com bust. Google's founded in kind of

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Speaker 1: late on the cycle of the hype cycle of all

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Speaker 1: these dot com startups, and they secure this unbelievable seed

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Speaker 1: round of million dollars split fifty fifty between Kleiner and Sequoia,

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Speaker 1: which you know, these big firms don't do deals together,

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Speaker 1: but everyone wanted an end and so they had, you know,

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Speaker 1: they kind of had this foundational capital. And then the

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Speaker 1: all of these other companies go out of business. And

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Speaker 1: two things that you need back then in two thousand

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Speaker 1: one or so is you need people. Ever you always

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Speaker 1: need people, um, and so Google is able to acquire

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Speaker 1: engineers for less than they would have had to pay otherwise.

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Speaker 1: And also just you know, the talent was now available,

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Speaker 1: there was more oxygen in the labor market. And they

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Speaker 1: also needed computing power. This is before cloud computing, right,

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Speaker 1: that is when you had to go buy a piece

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Speaker 1: of hardware and server blades and high powered CPUs to

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Speaker 1: to power your search engine. And so they were able

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Speaker 1: to do that as well. They were the sort of

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Speaker 1: their capital expenditures ultimately gave them a lot more runway

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Speaker 1: and a lot more time to not have to turn

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Speaker 1: a profit. Was you know, they were really advantaged by that.

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Speaker 1: And you know, I think thinking about kind of company

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Speaker 1: behavior in a downturn. You know, we see when we

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Speaker 1: talk about Silicon valley, oftentimes we're thinking about the very

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Speaker 1: big consumer facing platforms, right, the ones that ordinary people

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Speaker 1: were that were interacting with every day. And there are

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Speaker 1: many different Silicon valleys, There many different parts of the

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Speaker 1: of the whole industry. If you look at the dot

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Speaker 1: com bust, for example, there were companies, you know, semiconductor

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Speaker 1: companies that were still hiring people. There were other you know,

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Speaker 1: hardware kind of the people who were doing the fundamentals

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Speaker 1: were still there was that the transition to commercial internet

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Speaker 1: was still very much underway. There was a lot of

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Speaker 1: real there were so many, you know, important use cases

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Speaker 1: that have been proven in the early days of the

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Speaker 1: commercial Internet that there was still a lot to be

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Speaker 1: done and a lot of business to be had. It

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Speaker 1: was just these very giant, you know, splashy consumer facing

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Speaker 1: websites and and platforms that went out of business that

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Speaker 1: were the ones that got a lot of the menine

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Speaker 1: what about you know, just in terms of so layoffs

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Speaker 1: and other restructurings. Do the bean bags go away? Do

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Speaker 1: do the ties come on? Like like, is there a

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Speaker 1: sort of I don't know, reun liberalization of culture in

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Speaker 1: a downturn where it's like, okay, we have to get

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Speaker 1: serious here. Yeah, you know, I think that the I

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Speaker 1: wouldn't say the ties come back on. There have been

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Speaker 1: times when the ties come back on, you know, I

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Speaker 1: think the most the standout example is is Apple. If

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Speaker 1: you go back to the eighties, the mid eighties Apple,

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Speaker 1: when it's growing fast, John Scully is brought in from

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Speaker 1: Pepsi as this literally the guy in the suit. So

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Speaker 1: that's a great example. Could we have like, right, could

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Speaker 1: we all have this perception of Steve Jobs, and then

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Speaker 1: they bring in a Pepsi executive to running Yeah, the

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Speaker 1: guy who sold sugar water. Yeah, there was lots of

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Speaker 1: lots of grumbling about that. And then of course, kind

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Speaker 1: of spectacularly and famously infamously, he and the board fire

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Speaker 1: Steve Jobs shortly thereafter, because Max sales that the Macintosh

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Speaker 1: comes out with a splash. We all remember that per

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Speaker 1: Bowl add the iconic Super Bowl ad and the Mac

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Speaker 1: being this game changer. But what's forgotten in that story

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Speaker 1: is that it had a big splash but actually did

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Speaker 1: not kind of flatlined a bit. It wasn't another Apple, too,

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Speaker 1: which was the first giant hit that Apple had, and

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Speaker 1: Apple was getting IBM had gotten into the personal computer business.

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Speaker 1: Remember with those Charlie Chaplain ads that were everywhere. Anyone

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Speaker 1: who was, you know, around in the nineteen eighties might

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Speaker 1: remember those. And so they were eating Apple's lunch, and

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Speaker 1: so so Scully, you know, the suits are brought in,

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Speaker 1: Jobs is fired, and then Apple has a pretty dismal

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Speaker 1: decade after that, and Jobs comes back and it is

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Speaker 1: brought back in CEO, and then after that it's up

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Speaker 1: into the right and that arc. Actually I think has

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Speaker 1: um squashed the suits and so so to speak, that

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Speaker 1: the answer. But I think to your question, there is

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Speaker 1: a real, you know, more conservatism in terms of spending

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Speaker 1: and due diligence. I think, you know, the tail that

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Speaker 1: always wags valley dog is venture capital. Right, Um, what

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Speaker 1: are the vcs doing? What are they hunting? How much

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Speaker 1: you know, what are they spending on? How much do

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Speaker 1: they have to spend? And they are really kind of

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Speaker 1: driving what you know, first, they're picking the winners or

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Speaker 1: the potential winners, and they're also you know, what they're

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Speaker 1: demanding of of founders and their portfolio. Companies will change

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Speaker 1: in a downturn and there'll be a lot less tolerance

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Speaker 1: for the splashy parties with ice sculptures, for sure. This

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Speaker 1: was something that Jason Callicanis brought up on our podcast,

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Speaker 1: which was, you know, it's easy to criticize a lot

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Speaker 1: of tech companies for expanding too much during the boom,

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Speaker 1: but his point was this is what investors, ie venture

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Speaker 1: capital was asking of them. They was all about growing

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Speaker 1: market share and it's not until you know, things start

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Speaker 1: to pull back that there's really that pressure on companies

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Speaker 1: to maybe either start spending money or actually produce a profit. Yeah,

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Speaker 1: that's exactly right. The venture capital world m is you know,

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Speaker 1: a lot of these vcs were once operators to right,

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Speaker 1: so you know where do vcs come from? And some

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Speaker 1: of them are have backgrounds in banking, but some of

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Speaker 1: them were founders themselves or people who were you know,

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Speaker 1: part of the core teams of companies that were very

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Speaker 1: successful and they turned that into the you know, the

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Speaker 1: high tech venture capital model. The Silicon Valley style of

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Speaker 1: venture capital model that starts in the sixties is is

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Speaker 1: one that is not just money, it's expertise, and it's

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Speaker 1: and it's importing very particular type of culture and cultural

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Speaker 1: values that is very growth focused, moving fast and break things.

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Speaker 1: Breaking things has been a Silicon Valley mantra since the

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Speaker 1: early years of the semiconductor industry because by necessity you

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Speaker 1: had to move really fast and be incredibly agile and

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Speaker 1: lean and ready to pivot at any moment and moving

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Speaker 1: really aggressively to get a chunk of the market. And

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Speaker 1: so that sensibility has uh even you know, the hyper

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Speaker 1: focus on growth. I think that's that that that's the

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Speaker 1: origins of that and that you know, and of course

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Speaker 1: that was an utterly different business than than what the

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Speaker 1: dominant business of Silicon Valley, which you know, software dominant

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Speaker 1: dominant rather than hardware dominant. But nonetheless, I think founders

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Speaker 1: get a lot of heat for excess, but someone gave

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Speaker 1: them the money to do it. So I think it

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Speaker 1: was like the day we met in San Francisco several

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Speaker 1: weeks ago or maybe the day after, and it was

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Speaker 1: just like the complete implosion of f t X. And

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Speaker 1: the reason I ask is, you know, one of the

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Speaker 1: other things that's sort of like crumbling here. And again

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Speaker 1: I don't know if it's how cyclical it is, but

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Speaker 1: you know, I associate Silicon Valley with this like the

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Speaker 1: cult of the individual, the individual founder, particularly so the

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Speaker 1: f SBF cult obviously the Steve Jobs called maybe the

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Speaker 1: Mark Zuckerberg cult at some point the Elon Musk cult.

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Speaker 1: Who started that? Where did that come from? The yeah,

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Speaker 1: where did that come from? Well? That is really deep roots.

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Speaker 1: I mean I think this is you know, this goes

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Speaker 1: extends beyond and before the Valley itself and kind of

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Speaker 1: American culture, American political culture a a a nation born

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Speaker 1: of revolution and uh that is always lifted up and

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Speaker 1: mythologized the you know, the so called self made man

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Speaker 1: um you know, the since the nineteenth century, I mean

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Speaker 1: that this has been these you know, the heroes have

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Speaker 1: been these, these you know, individual geniuses, whether it be

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Speaker 1: Thomas Edison or or you know, going forward and and

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Speaker 1: of course the you know, the real story is whether

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Speaker 1: it's John Wayne style Cowboy or the great inventor Edison.

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Speaker 1: They yes, you have an iconic, charismatic, extraordinary individual, but

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Speaker 1: also you have an individual who's got good timing, has connections,

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Speaker 1: has a whole team behind them that is part of

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Speaker 1: an ecosystem. And that the secret of Silicon Valley is

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Speaker 1: the fact that it's this extraordinary ecosystem and networks of

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Speaker 1: people again that you know, we think about, you know,

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Speaker 1: these these founders, whether it be uh, you know, Jobs

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Speaker 1: or Musk or you know, on and on and on.

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Speaker 1: They're all people who you know, of of standout talent

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Speaker 1: that also were lucky and had had some help and

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Speaker 1: have a team. And I think Jobs and Apple are

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Speaker 1: really great example, um when we go back to the

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Speaker 1: beginning of Apple found you know, founded in a garage

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Speaker 1: like many a computer startup at that moment, and Jobs

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Speaker 1: and was um were like you know, there were a

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Speaker 1: lot of guys doing what they were doing. Some of

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Speaker 1: them were in fact building technically better machines. But what

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Speaker 1: none of those other ones had was Steve Jobs. Not

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Speaker 1: Steve Jobs his own capacity to do all this himself,

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Speaker 1: but the fact that he recognized in his you know,

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Speaker 1: while he's still walking around barefoot with his beard, that

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Speaker 1: he needed to hire the very best marketing person in

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Speaker 1: the valve, like he needed to get the very best

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Speaker 1: venture capitalist. He needed to get a really good operator

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Speaker 1: with experience he could take them from a garage and

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Speaker 1: turn them into a real company. And that is what

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Speaker 1: he did, and all those people made Apple into what

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Speaker 1: Apple was and allowed Jobs to be the storyteller in

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Speaker 1: chief and be the ultimately the transformative figure he became.

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Speaker 1: So I have a slightly different crypto related question. But

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Speaker 1: since you brought up, since you brought up personal computing,

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Speaker 1: and this is something that stands out in your book,

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Speaker 1: this idea that Silicon Valley time and time again kind

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Speaker 1: of frames these new technologies as some sort of revolution.

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Speaker 1: So the personal computer was going to revolutionize our work lives,

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Speaker 1: the dot com boom was going to revolutionize access to information.

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Speaker 1: Crypto was going to be this big new financial system.

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Speaker 1: And yet with every boom, you know, as we've been discussing,

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Speaker 1: there does tend to be a bust and a lot

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Speaker 1: of disappointment. Can the tech sector can silicon value like

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Speaker 1: maintain this revolutionary narrative or this revolutionary idea if people

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Speaker 1: are sort of becoming more experienced with booms and bust

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Speaker 1: or maybe it's just me getting older, but it feels

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Speaker 1: like we've gone through a number of these disappointments at

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Speaker 1: this time. Yeah, we have, but yet we we key

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Speaker 1: up again. Um. You know, the revolutionary declarations are always

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Speaker 1: somewhat overblown. But also you know, think about all the

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Speaker 1: devices we're using, um, even to conduct this conversation, and um,

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Speaker 1: they it is extraordinary the rate of technological growth and

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Speaker 1: development of computer hardware and software in a very short

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Speaker 1: amount of time. And so some of the storytelling and

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Speaker 1: the hype and the amount of capital that's been infused

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Speaker 1: to make that come to be has you know, there's

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Speaker 1: there's a there's a they're there. You know, it's interesting

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Speaker 1: and one of the hallmarks of these you know, the

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Speaker 1: latest generation of revolutionaries is in a way they're they're

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Speaker 1: answering a problem, they're fixing the errors of a past generation,

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Speaker 1: whether it be uh, Steve Jobs or Bill Gates, as

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Speaker 1: these new style CEO s rising up like phoenix is

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Speaker 1: out of the ashes of stagflation in the seventies when

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Speaker 1: big business and C suites of all kinds were pretty unpopular.

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Speaker 1: And here's something very very different, kind of promising to

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Speaker 1: change the world and empower you. Um, these are the

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Speaker 1: new types of business enterprise that are so alluring in

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Speaker 1: many different ways to politicians and media and two ordinary

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Speaker 1: users and to a kind of baby boomers who are

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Speaker 1: kind of looking for self actualization in there the things

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Speaker 1: they buy and now have the income to buy it.

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Speaker 1: And if you fast forward, even just looking reflecting on

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Speaker 1: FTX and same bank and Freed and his very very

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Speaker 1: rapid downfall, you know, part of his rapid ascent was,

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Speaker 1: you know, bankman Freed was not only a you know,

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Speaker 1: he's he's rising at a time when when the the

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Speaker 1: last generation of wonder boys are starting to get more tarnished.

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Speaker 1: Right that there's the tech lash, there's critique of of

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Speaker 1: Zuckerberg and and Um and Bezos and these other people

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Speaker 1: who once were at one time viewed more generally uncritically.

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Speaker 1: And and also you know, I think SBF was a

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Speaker 1: standout in the crypto world where there were a lot

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Speaker 1: of people that seemed like hustlers, you know to the

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Speaker 1: outside observer, and here was someone who seemed more you know,

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Speaker 1: was proclaiming, you know, he was philanthropic, altruistic, and a

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Speaker 1: lot of blue chip investors and leading vcs bought into

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Speaker 1: that very in a very very big way. So you know,

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Speaker 1: it sounds like another you know Tracy as like, well, okay,

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Speaker 1: you see these booms and busts over the time, and

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Speaker 1: there's the tech lash and everything, and then it's like, okay,

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Speaker 1: you know, the sort of like see do failed crypto revolution.

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Speaker 1: You go cynical over time. But I take it another

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Speaker 1: theme of silicon values. Every downturn, people think, oh, this

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Speaker 1: time it's over, Like that was the last boom and

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Speaker 1: this is the final post. Yeah. If I had a

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Speaker 1: dollar for every premature obituary that's been written, I mean

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Speaker 1: for over the years. At the end of the nineteen sixties,

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Speaker 1: the stock markets cooling, um, the the defense spending um

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Speaker 1: that once was driving so much of the really almost

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Speaker 1: the entirety of the economy of the valley is contracting,

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Speaker 1: and Vietnam is Vietnam and deeply unpopular. And and so

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Speaker 1: Lockheed which was the you know locked now lockeed Martin,

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Speaker 1: then just Lockheed, which was by the way, the biggest

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Speaker 1: employer in the valley from the mid fifties through the

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Speaker 1: end of the Cold War. It's Space and Missile's division

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Speaker 1: that was down in Sunny Vale. They laid off thousands

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Speaker 1: of workers and there were you know, local press was like,

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Speaker 1: well that's it. It was fun, alright, guess we're guess

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Speaker 1: we're moving on. And the same in the seventies when

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Speaker 1: vcs could just not get not raise funds at all.

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Speaker 1: There was just no money. They were resorting to desperate

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Speaker 1: measures like licensing their technology to Japanese companies, which ten

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Speaker 1: years later they really regretted. But even at the in

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Speaker 1: the late eighties, end of the Cold War, you know,

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Speaker 1: defense again, defense spending contracts dramatically. That was California's thrown

429
00:24:29,000 --> 00:24:31,320
Speaker 1: into a mini recession in the early nineties because of that,

430
00:24:31,520 --> 00:24:33,800
Speaker 1: you know, and also the PC market, which was ghosts

431
00:24:33,920 --> 00:24:37,359
Speaker 1: was so hot, had kind of plateaued and there was

432
00:24:37,400 --> 00:24:40,879
Speaker 1: no next thing that was clearly there. And then a

433
00:24:40,880 --> 00:24:44,160
Speaker 1: few years later you have the commercial Internet, so so

434
00:24:44,359 --> 00:24:46,880
Speaker 1: you know, the out of the ashes comes something new.

435
00:24:47,160 --> 00:24:49,880
Speaker 1: But it's very easy to could declare it's all over,

436
00:24:50,200 --> 00:24:53,000
Speaker 1: um and I and and now what's really interesting? I

437
00:24:53,000 --> 00:24:55,000
Speaker 1: think what's I think it is important while we make

438
00:24:55,000 --> 00:24:59,640
Speaker 1: these historical comparisons to to show some contrast between then

439
00:24:59,640 --> 00:25:01,760
Speaker 1: and now out I mean, now we have the scale

440
00:25:01,840 --> 00:25:04,439
Speaker 1: is much bigger, The impact is much more significant. You know,

441
00:25:04,640 --> 00:25:07,440
Speaker 1: the scale of everything, whether it be hiring or layoffs,

442
00:25:07,480 --> 00:25:10,960
Speaker 1: is much bigger. And the way in which these companies

443
00:25:11,080 --> 00:25:15,760
Speaker 1: are affecting kind of every dimension of our lives and

444
00:25:16,400 --> 00:25:19,480
Speaker 1: the global economy is is at a scale that wasn't

445
00:25:19,480 --> 00:25:38,919
Speaker 1: even present in the dot com boom or bust. Another

446
00:25:39,000 --> 00:25:42,000
Speaker 1: thing that's happening now, and you know, we've obviously been

447
00:25:42,040 --> 00:25:46,160
Speaker 1: focused on the retrenchment of venture capital and private investment,

448
00:25:46,240 --> 00:25:48,080
Speaker 1: but one thing that's happening now is you have a

449
00:25:48,080 --> 00:25:51,199
Speaker 1: lot of government investment coming on stream, and you have

450
00:25:51,359 --> 00:25:55,160
Speaker 1: things like the Chips Act, which basically aims billions, if

451
00:25:55,200 --> 00:25:58,800
Speaker 1: not trillions of dollars at ramping up US chip making

452
00:25:58,840 --> 00:26:02,320
Speaker 1: capacity and other vital technology capacity and things like that.

453
00:26:02,960 --> 00:26:07,960
Speaker 1: How much does that like help in a downturn? Can

454
00:26:08,000 --> 00:26:11,480
Speaker 1: the government money basically come in and fill the whole

455
00:26:11,560 --> 00:26:18,200
Speaker 1: left by retrenching venture capital. Mm hmm, it can um well,

456
00:26:18,359 --> 00:26:21,359
Speaker 1: just generally, you know, independent of of the commercial boom

457
00:26:21,400 --> 00:26:26,119
Speaker 1: and bus cycle. Government money is absolutely it's always been

458
00:26:26,160 --> 00:26:29,320
Speaker 1: a critical thread, a critical part of the Silicon Valley story,

459
00:26:29,400 --> 00:26:32,639
Speaker 1: a critical part of the history of American technology and

460
00:26:32,640 --> 00:26:36,760
Speaker 1: technological development. It has you know, you go, Silicon Valley

461
00:26:36,920 --> 00:26:39,840
Speaker 1: is Silicon Valley. It is what it is because of

462
00:26:40,320 --> 00:26:44,120
Speaker 1: military spending, which is sometimes a weird idea to get

463
00:26:44,119 --> 00:26:45,800
Speaker 1: your head around when you think of the value, you

464
00:26:45,840 --> 00:26:48,240
Speaker 1: think of kind of free market capitalism and its finest,

465
00:26:48,240 --> 00:26:51,679
Speaker 1: but actually it has its origins in this defense spending,

466
00:26:51,680 --> 00:26:54,359
Speaker 1: which created a critical mass of of sort of small

467
00:26:54,400 --> 00:26:58,200
Speaker 1: electronics R and D in the valley and and also

468
00:26:58,560 --> 00:27:01,880
Speaker 1: took Stanford from being kind of a reasonably good mid

469
00:27:01,960 --> 00:27:06,480
Speaker 1: level research university into the powerhouse. It became. I mean,

470
00:27:06,560 --> 00:27:10,000
Speaker 1: the people on the ground, including Stanford administrators, were making

471
00:27:10,119 --> 00:27:12,560
Speaker 1: helping make that happen, taking advantage of these new streams

472
00:27:12,560 --> 00:27:15,879
Speaker 1: of money. But what what government does, and we see this,

473
00:27:16,200 --> 00:27:18,560
Speaker 1: let me pull out the space program is a great,

474
00:27:18,760 --> 00:27:20,399
Speaker 1: great example. We always talk about, you know, we need

475
00:27:20,440 --> 00:27:22,480
Speaker 1: another moon shot. Well, let's talk about the real moonshot.

476
00:27:22,480 --> 00:27:25,359
Speaker 1: And see how that that worked in the Valley political economy,

477
00:27:25,359 --> 00:27:27,880
Speaker 1: because I think sometimes it's easy to sort of say, oh,

478
00:27:27,960 --> 00:27:29,960
Speaker 1: it's all free market, or when the government comes in,

479
00:27:30,040 --> 00:27:32,760
Speaker 1: it's a you know, totally different type of political economy.

480
00:27:32,760 --> 00:27:37,520
Speaker 1: And in the case of the Valley and actually more

481
00:27:37,560 --> 00:27:42,119
Speaker 1: broadly American um American economic history generally, it's it's a

482
00:27:42,160 --> 00:27:44,240
Speaker 1: kind of a blend of public and private that's very

483
00:27:44,240 --> 00:27:48,320
Speaker 1: distinctive and very American. So, you know, the sixties, you

484
00:27:48,359 --> 00:27:51,879
Speaker 1: already have a lot of electronics spending in the Valley.

485
00:27:52,240 --> 00:27:55,520
Speaker 1: Then um spot Nick rockets into orbit. In the fall

486
00:27:55,600 --> 00:27:59,560
Speaker 1: of seven, the Soviets get the first satellite into space.

487
00:27:59,600 --> 00:28:04,160
Speaker 1: They be the US, and everybody's hair is on fire.

488
00:28:04,320 --> 00:28:06,399
Speaker 1: It is it is a huge black eye for the

489
00:28:06,400 --> 00:28:10,160
Speaker 1: Eisenhower administration. Is it is bad. There's also a great

490
00:28:10,160 --> 00:28:13,680
Speaker 1: anxiety about reports that the Soviets are outpacing the US

491
00:28:13,720 --> 00:28:17,000
Speaker 1: and producing missiles, the so called missile gap. That gets

492
00:28:17,160 --> 00:28:20,000
Speaker 1: Washington in a panic. So the money starts a flowing.

493
00:28:20,560 --> 00:28:22,480
Speaker 1: There is lots and lots of money coming out. And

494
00:28:22,520 --> 00:28:25,320
Speaker 1: then Kennedy comes into office and says, we are going

495
00:28:25,359 --> 00:28:27,880
Speaker 1: to reach the Moon by the end of the nineteen sixties.

496
00:28:27,960 --> 00:28:30,520
Speaker 1: And then all of a sudden, there's this intense demand

497
00:28:30,560 --> 00:28:33,520
Speaker 1: for very small, light fast electronics, which are exactly what

498
00:28:34,320 --> 00:28:37,000
Speaker 1: the valley is specializing in. And so this is really

499
00:28:37,040 --> 00:28:41,280
Speaker 1: the beginning of the semiconductor industry. The true first clusters

500
00:28:41,320 --> 00:28:44,880
Speaker 1: of startups are are they're building integrated circuits. They're selling

501
00:28:44,920 --> 00:28:48,000
Speaker 1: to NASA, but they're they're doing it. These are you know,

502
00:28:48,040 --> 00:28:52,320
Speaker 1: these aren't big lumbering defense contractors. They're startups and there

503
00:28:52,360 --> 00:28:54,640
Speaker 1: are a lot of them, and they're competing for this business.

504
00:28:55,360 --> 00:29:00,360
Speaker 1: And so there's this incredibly competitive industry that is essentially

505
00:29:00,440 --> 00:29:04,640
Speaker 1: you now have an incentive to to develop and produce

506
00:29:05,240 --> 00:29:07,800
Speaker 1: a new product that doesn't yet have a commercial market,

507
00:29:08,080 --> 00:29:11,240
Speaker 1: and and it's put the government has put a thumb

508
00:29:11,240 --> 00:29:14,400
Speaker 1: on the scale as a customer and as a as

509
00:29:14,560 --> 00:29:19,440
Speaker 1: as a funder of research, and it it just drives

510
00:29:19,480 --> 00:29:21,960
Speaker 1: all of this activity up and down the chain from

511
00:29:21,960 --> 00:29:26,520
Speaker 1: basic research to apply to universities in companies large and small.

512
00:29:26,840 --> 00:29:29,800
Speaker 1: And then you know, the net net of all that

513
00:29:29,920 --> 00:29:33,640
Speaker 1: space spending for the semiconductor industry is they went from

514
00:29:33,680 --> 00:29:39,240
Speaker 1: building these bespoke two thousand dollars and upward integrated circuits

515
00:29:39,280 --> 00:29:42,720
Speaker 1: that nobody had a could afford on that you know,

516
00:29:42,760 --> 00:29:46,200
Speaker 1: no enterprise could afford or really thought they needed. And

517
00:29:46,240 --> 00:29:49,480
Speaker 1: it they scale a production, they drive down costs, they're

518
00:29:49,520 --> 00:29:54,360
Speaker 1: able to turn it into a commodity product. And that's

519
00:29:55,000 --> 00:29:59,640
Speaker 1: you know, that's what I think the potential for government spending.

520
00:29:59,720 --> 00:30:03,080
Speaker 1: How So now is these we're kind of silicon valleys

521
00:30:03,160 --> 00:30:05,640
Speaker 1: entering a different age and you have this new these

522
00:30:05,680 --> 00:30:09,480
Speaker 1: new flows not just for semiconductor research and development, but

523
00:30:09,600 --> 00:30:13,600
Speaker 1: also green energy too. That's has a lot of potential.

524
00:30:14,640 --> 00:30:18,320
Speaker 1: You anticipated my next question, you know, and Tracy mentioned

525
00:30:18,320 --> 00:30:20,760
Speaker 1: the Chips Act, and then there's the Inflation Reduction Act,

526
00:30:20,800 --> 00:30:22,680
Speaker 1: which is going to channel a lot of money to

527
00:30:22,960 --> 00:30:25,640
Speaker 1: green tech. But the common threat of both of those,

528
00:30:25,760 --> 00:30:28,200
Speaker 1: it's like, Okay, part of the reason we seem to

529
00:30:28,200 --> 00:30:31,520
Speaker 1: be doing green tech is obviously concerns our climate, but

530
00:30:31,560 --> 00:30:35,920
Speaker 1: there's also a national security impulse even embedded in the

531
00:30:35,960 --> 00:30:40,040
Speaker 1: Inflation Reduction Act moving the battery supply chain away from China,

532
00:30:40,120 --> 00:30:42,000
Speaker 1: moving it to the US. This idea that there's some

533
00:30:42,080 --> 00:30:45,960
Speaker 1: sort of like global competition about energy tech and energy

534
00:30:46,000 --> 00:30:49,640
Speaker 1: security for obvious reasons. And the thing I'm curious about

535
00:30:49,760 --> 00:30:53,200
Speaker 1: is how does it work in silicon In silicon valley

536
00:30:53,280 --> 00:30:58,480
Speaker 1: when you have this sort of hard nosed geopolitical security

537
00:30:58,640 --> 00:31:03,120
Speaker 1: state defense to Haartman investment driving the show, how does

538
00:31:03,160 --> 00:31:10,440
Speaker 1: that interact, which sort of like hippie California capitalism. M Uh,

539
00:31:10,640 --> 00:31:13,600
Speaker 1: it's yeah. You wouldn't think these two things coexist, but

540
00:31:13,720 --> 00:31:16,560
Speaker 1: they do. You know, this is both smart politics and

541
00:31:16,600 --> 00:31:19,800
Speaker 1: it is real geo politics, right that there isn't a

542
00:31:19,920 --> 00:31:24,440
Speaker 1: national security dimension to high tech spending UM and high

543
00:31:24,480 --> 00:31:28,000
Speaker 1: tech competition, particularly now with China, which is sort of

544
00:31:28,000 --> 00:31:30,920
Speaker 1: this interesting mash up of the competition that the US

545
00:31:30,960 --> 00:31:32,880
Speaker 1: had the Soviet Union in the fifties and sixties and

546
00:31:32,920 --> 00:31:35,760
Speaker 1: the competition it had with Japan and the eighties. Right,

547
00:31:35,800 --> 00:31:38,880
Speaker 1: it's got this both end and Look, the only part

548
00:31:38,880 --> 00:31:41,959
Speaker 1: of the discretionary budget that the US that has kind

549
00:31:41,960 --> 00:31:46,080
Speaker 1: of been safe from austerity and and shrinkage, particularly in

550
00:31:46,080 --> 00:31:49,120
Speaker 1: the last forty years, has been the defense budget. There's

551
00:31:49,120 --> 00:31:51,920
Speaker 1: a reason that DARPA has this outsize role in fueling

552
00:31:52,360 --> 00:31:55,760
Speaker 1: innovation in the valley because it's been kind of the

553
00:31:55,800 --> 00:31:59,239
Speaker 1: one blue sky research funder that hasn't been kind of

554
00:31:59,240 --> 00:32:03,000
Speaker 1: had its budget you know, questioned every every cycle. Uh So,

555
00:32:03,200 --> 00:32:06,400
Speaker 1: I you know, there, there's it makes sense there there's

556
00:32:06,440 --> 00:32:09,000
Speaker 1: you know, putting calling this a defense move um does

557
00:32:09,080 --> 00:32:11,120
Speaker 1: make it in a way politically insulated in a way,

558
00:32:11,520 --> 00:32:14,040
Speaker 1: and kind of creates this allowance for the great deal

559
00:32:14,040 --> 00:32:16,040
Speaker 1: of spending that does need to happen to move the needle.

560
00:32:16,840 --> 00:32:19,720
Speaker 1: But the hippie culture and the defense culture, that, yeah,

561
00:32:19,760 --> 00:32:22,479
Speaker 1: that's a it's a it's a it's always had that

562
00:32:22,560 --> 00:32:26,640
Speaker 1: weird juxtaposition, quite honestly, and I think, you know, part

563
00:32:26,680 --> 00:32:29,160
Speaker 1: of why it's able to do that is because of

564
00:32:29,200 --> 00:32:32,440
Speaker 1: the essentially the indirect nature of so much of the spending.

565
00:32:32,640 --> 00:32:35,120
Speaker 1: And this is again going back to this kind of

566
00:32:35,200 --> 00:32:41,480
Speaker 1: quintessentially American habit of not liking big government, not wanting

567
00:32:41,560 --> 00:32:46,840
Speaker 1: to appear to have big government, and so instead spending

568
00:32:46,880 --> 00:32:51,360
Speaker 1: for economic development, in particular through indirect means, whether it

569
00:32:51,480 --> 00:32:55,920
Speaker 1: be in the early nineteenth century awarding um, you know,

570
00:32:56,200 --> 00:33:00,320
Speaker 1: private entities, the you know, uh contraxt of you know,

571
00:33:00,560 --> 00:33:06,160
Speaker 1: build canals and infrastructure and turnpikes, or or the transcontinental

572
00:33:06,360 --> 00:33:10,680
Speaker 1: railroads right in the night eighteen sixties and seventies, which

573
00:33:10,760 --> 00:33:13,440
Speaker 1: was a kind of a boondoggle, but it got those

574
00:33:13,520 --> 00:33:18,560
Speaker 1: railroads built. Or fast forward to the defense economy, you know,

575
00:33:18,560 --> 00:33:22,480
Speaker 1: the Cold War military industrial complex. Eisenhower called it military

576
00:33:22,520 --> 00:33:25,840
Speaker 1: industrial for a reason. The money was flowing from the

577
00:33:25,920 --> 00:33:31,040
Speaker 1: government through industry and universities and these other private and

578
00:33:31,560 --> 00:33:37,040
Speaker 1: educational institutions, so that the the guys and the bean bags,

579
00:33:37,200 --> 00:33:41,040
Speaker 1: or the kids in the computer lab at Berkeley or

580
00:33:41,080 --> 00:33:45,800
Speaker 1: Stanford weren't necessarily immediately aware of the fact that everything

581
00:33:45,840 --> 00:33:49,680
Speaker 1: that was doing was being enabled by defense spending, which

582
00:33:49,840 --> 00:33:51,680
Speaker 1: you know, in the late nineteen sixties, a lot of

583
00:33:51,680 --> 00:33:54,280
Speaker 1: those kids at Berkeley and Stanford suddenly realized that was

584
00:33:54,320 --> 00:33:56,600
Speaker 1: what was making it all go and that was part

585
00:33:56,600 --> 00:33:59,920
Speaker 1: of why they were protesting and marching against the war

586
00:34:00,120 --> 00:34:04,240
Speaker 1: or they they saw the among other things, that the

587
00:34:04,280 --> 00:34:08,399
Speaker 1: military had essentially taken control of technology and was using

588
00:34:08,400 --> 00:34:12,000
Speaker 1: it for ends of which they did not approve. So

589
00:34:12,200 --> 00:34:17,240
Speaker 1: just on this theme the intermingling of free market entrepreneurship

590
00:34:17,400 --> 00:34:20,720
Speaker 1: and government spending, which is definitely a theme that stands

591
00:34:20,719 --> 00:34:23,600
Speaker 1: out in your book, and you emphasize this point a lot.

592
00:34:24,040 --> 00:34:28,520
Speaker 1: But in in a downturn where venture capital is potentially

593
00:34:28,520 --> 00:34:33,279
Speaker 1: retrenching and the government is ramping up it's spending, is

594
00:34:33,280 --> 00:34:39,520
Speaker 1: there a possibility that more traditional businesses become bigger or

595
00:34:39,640 --> 00:34:44,080
Speaker 1: more powerful compared to you know, the traditional Silicon valley

596
00:34:44,160 --> 00:34:48,600
Speaker 1: tech startup because they have access to maybe deeper pockets,

597
00:34:48,800 --> 00:34:52,680
Speaker 1: or because maybe they have closer relationships with the US government.

598
00:34:52,960 --> 00:34:55,239
Speaker 1: Is that a possibility that we start to see a

599
00:34:55,320 --> 00:35:00,640
Speaker 1: sort of shift in power. I guess m M. I

600
00:35:00,680 --> 00:35:05,480
Speaker 1: mean Tesla Like Tesla versus a traditional carmaker would be

601
00:35:05,520 --> 00:35:10,480
Speaker 1: the obvious example of this, right, yeah, yeah, possibly, But

602
00:35:10,520 --> 00:35:12,160
Speaker 1: there are a couple of things that work against that.

603
00:35:12,600 --> 00:35:16,360
Speaker 1: One is if the government purpose of government spending is

604
00:35:16,400 --> 00:35:21,400
Speaker 1: to incentivize and grow new markets and new technologies and

605
00:35:21,440 --> 00:35:24,319
Speaker 1: to kind of bring bring new technologies online that are

606
00:35:24,440 --> 00:35:28,400
Speaker 1: now just good ideas or really expensive and impractical ideas.

607
00:35:28,760 --> 00:35:33,640
Speaker 1: Oftentimes it's new firms and new entrance that are needed

608
00:35:33,680 --> 00:35:35,959
Speaker 1: to do that. Again, the you know, this is why

609
00:35:36,160 --> 00:35:39,520
Speaker 1: you know, companies like fair Child Semiconductor and National Semiconductor

610
00:35:39,520 --> 00:35:42,280
Speaker 1: get the edge on UM, you know, get the Apollo

611
00:35:42,360 --> 00:35:45,440
Speaker 1: program business because the big incumbents couldn't do it. I

612
00:35:45,440 --> 00:35:47,839
Speaker 1: think the other thing that's in play, and we saw

613
00:35:47,840 --> 00:35:49,840
Speaker 1: this a bit in the Space program too, which is

614
00:35:50,280 --> 00:35:52,439
Speaker 1: that that spending is ramping up at the same time

615
00:35:52,480 --> 00:35:55,680
Speaker 1: that UM. This when Robert McNamara was Secretary of Defense

616
00:35:56,120 --> 00:35:59,359
Speaker 1: for Kennedy and the Johns administrations. McNamara later becomes kind

617
00:35:59,360 --> 00:36:01,880
Speaker 1: of the the face of the Vietnam War and not

618
00:36:01,920 --> 00:36:04,560
Speaker 1: a good way. But in the beginning, he comes in.

619
00:36:04,640 --> 00:36:06,520
Speaker 1: He comes in from Ford. He was the president of Ford,

620
00:36:06,560 --> 00:36:07,880
Speaker 1: and he was part of a group known as the

621
00:36:07,880 --> 00:36:11,880
Speaker 1: whiz Kids at Ford that were these number crunching efficiency experts,

622
00:36:12,480 --> 00:36:14,000
Speaker 1: and he came in He's like, we gotta make this

623
00:36:14,040 --> 00:36:16,919
Speaker 1: whole contracting more efficient. And he actually wanted to kind

624
00:36:16,920 --> 00:36:20,640
Speaker 1: of get away from single source contracting and kind of

625
00:36:20,640 --> 00:36:23,800
Speaker 1: bring more oxygen into the system and get more more people,

626
00:36:23,880 --> 00:36:26,600
Speaker 1: more more firms competing for the business, so that would

627
00:36:26,640 --> 00:36:29,480
Speaker 1: drive down costs and and that's part of actually created

628
00:36:29,480 --> 00:36:32,239
Speaker 1: this opportunity for these small companies. What's happening right now,

629
00:36:32,280 --> 00:36:35,279
Speaker 1: I think in a kind of analogous way is one

630
00:36:35,320 --> 00:36:37,400
Speaker 1: of the things that the both the Chips Act and

631
00:36:37,480 --> 00:36:39,800
Speaker 1: the Inflation Reduction Act or trying to solve for is

632
00:36:39,840 --> 00:36:44,600
Speaker 1: the intense geographic concentration of tech on the two coasts

633
00:36:44,800 --> 00:36:47,040
Speaker 1: right So within that, you know, we have this new

634
00:36:47,040 --> 00:36:50,400
Speaker 1: spending that's kind of regionally focused to build tech focused

635
00:36:50,400 --> 00:36:54,120
Speaker 1: economies in places that don't have them, and also you know,

636
00:36:54,160 --> 00:36:57,319
Speaker 1: putting chip plants in Ohio, right, Like, there's this sort

637
00:36:57,320 --> 00:37:00,600
Speaker 1: of very deliberate economic development strategy going on. We saw

638
00:37:00,640 --> 00:37:02,400
Speaker 1: some of this, quite a bit of this in the

639
00:37:02,440 --> 00:37:04,960
Speaker 1: early Cold War too. I mean that the Southern States

640
00:37:05,000 --> 00:37:07,120
Speaker 1: and sun Belt states that also happened to have some

641
00:37:07,160 --> 00:37:11,040
Speaker 1: pretty powerful senators Hello Richard Russell of Georgia. Uh that

642
00:37:11,239 --> 00:37:14,600
Speaker 1: you know that got these defense facilities that were transformative

643
00:37:14,680 --> 00:37:17,359
Speaker 1: for the economy. Right. So there's sort of this geographic

644
00:37:17,760 --> 00:37:22,840
Speaker 1: strategy that the Biden administration and um uh those the

645
00:37:23,040 --> 00:37:25,879
Speaker 1: sort of are trying to uh kind of push out.

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00:37:25,920 --> 00:37:28,360
Speaker 1: And there's a lot of obviously a lot of local

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00:37:28,440 --> 00:37:32,080
Speaker 1: leadership and regions that have been left behind in many ways,

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00:37:32,200 --> 00:37:35,680
Speaker 1: particularly formally industrial regions and the in the Midwest and

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00:37:35,719 --> 00:37:39,879
Speaker 1: elsewhere that are you really trying to build out their infrastructure.

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00:37:39,880 --> 00:37:42,800
Speaker 1: So I'm looking to see kind of what that does

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00:37:42,960 --> 00:37:46,880
Speaker 1: to um, kind of disrupts this geographic pattern that's so

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00:37:47,000 --> 00:37:51,839
Speaker 1: intensely concentrated. Margaret, thank you so much for coming out

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00:37:51,880 --> 00:37:54,319
Speaker 1: odd lots so glad we got to hand this conversation.

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00:37:55,280 --> 00:37:58,439
Speaker 1: It was really fun. Thanks for having me. Thanks Margaret. Yeah,

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00:37:58,440 --> 00:38:17,120
Speaker 1: that was great, Tracy. I really like talking to Margaret.

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00:38:17,160 --> 00:38:19,640
Speaker 1: You know, one thing that is very useful with the

657
00:38:19,680 --> 00:38:23,479
Speaker 1: historical perspective is this time it's different, or this time

658
00:38:23,480 --> 00:38:27,160
Speaker 1: it's really over. That that's like a pervasive view that

659
00:38:27,320 --> 00:38:29,399
Speaker 1: it's not just now, it's not just post dot Com.

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00:38:29,400 --> 00:38:32,239
Speaker 1: That from the very beginning, people always say, oh, that

661
00:38:32,360 --> 00:38:34,239
Speaker 1: was it, that was the last boom bust. There one

662
00:38:34,320 --> 00:38:37,000
Speaker 1: day there will be another boom. Well, I agree with that.

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00:38:37,120 --> 00:38:41,120
Speaker 1: I do wonder whether or not, like people's experiences tend

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00:38:41,160 --> 00:38:44,800
Speaker 1: to be tempered by the disappointments of the last downturn,

665
00:38:44,920 --> 00:38:47,440
Speaker 1: but maybe not, because I mean, here we are in

666
00:38:48,760 --> 00:38:51,480
Speaker 1: and all of crypto is falling apart. People have been

667
00:38:51,480 --> 00:38:54,080
Speaker 1: comparing that to the dot com boom for ages, so

668
00:38:54,120 --> 00:38:58,759
Speaker 1: clearly memories of dot Com era. They eventually that was

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00:38:58,800 --> 00:39:04,000
Speaker 1: like twenty years ago. It feels like only yesterday, okay.

670
00:39:04,040 --> 00:39:07,600
Speaker 1: But also like her example of whether or not it

671
00:39:07,719 --> 00:39:14,920
Speaker 1: starts to affect culture with the PEPSI CEO forgot that

672
00:39:14,920 --> 00:39:17,680
Speaker 1: that was pretty funny. Yeah, and just you know again,

673
00:39:17,800 --> 00:39:20,560
Speaker 1: like what the saving I don't know if it's the

674
00:39:20,600 --> 00:39:23,880
Speaker 1: saving grace or you know, where where would you be

675
00:39:23,960 --> 00:39:27,120
Speaker 1: bullish right now? You're probably bullish on the areas that

676
00:39:27,200 --> 00:39:30,000
Speaker 1: can sell something to the US government, something that might

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00:39:30,080 --> 00:39:32,560
Speaker 1: have like a defense capacity, something that might have an

678
00:39:32,640 --> 00:39:36,880
Speaker 1: energy capacity, something that might have a semiconductor capacity, etcetera.

679
00:39:37,080 --> 00:39:40,880
Speaker 1: So there will be new markets, but maybe the exciting

680
00:39:40,920 --> 00:39:44,200
Speaker 1: things are not going to be as consumer oriented as

681
00:39:44,200 --> 00:39:46,799
Speaker 1: we got from the boom in the right. It kind

682
00:39:46,840 --> 00:39:51,040
Speaker 1: of reminds me of that market's mantra, don't fight the FED, right, like,

683
00:39:51,280 --> 00:39:55,040
Speaker 1: don't don't fight the U. S. Government. It's pouring trillions

684
00:39:55,040 --> 00:39:59,720
Speaker 1: of dollars of money into particular. Don't fight the Pentagon.

685
00:40:00,000 --> 00:40:01,839
Speaker 1: There we go. Don't fight the d O E loan,

686
00:40:02,000 --> 00:40:04,480
Speaker 1: don't fight jigger shot at the Daily Loan protras, don't

687
00:40:04,520 --> 00:40:08,120
Speaker 1: fight the military industrial complex. That is good life advice.

688
00:40:08,440 --> 00:40:10,280
Speaker 1: Shall we leave it there? Let's leave it there? Okay.

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00:40:10,480 --> 00:40:13,240
Speaker 1: This has been another episode of the All Thoughts podcast.

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00:40:13,280 --> 00:40:15,839
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

691
00:40:15,880 --> 00:40:18,600
Speaker 1: Tracy Alloway and I'm Joe Wisn't Though. You can follow

692
00:40:18,640 --> 00:40:22,240
Speaker 1: me on Twitter at the Stalwart. Follow our guest Margaret O'Meara.

693
00:40:22,400 --> 00:40:26,399
Speaker 1: She's at Margaret O'Meara. Follow our producer Kerman Rodriguez at

694
00:40:26,440 --> 00:40:29,680
Speaker 1: Carmen Arman, and check out all of our podcasts at

695
00:40:29,680 --> 00:40:33,799
Speaker 1: Bloomberg under the handle at podcasts, and if you want

696
00:40:33,800 --> 00:40:36,680
Speaker 1: more odd Lots content, go to Bloomberg dot com slash

697
00:40:36,719 --> 00:40:40,000
Speaker 1: odd Lot or Tracy and I post the transcripts, we blog,

698
00:40:40,120 --> 00:40:43,560
Speaker 1: and we even write a weekly newsletter. Go there, subscribe

699
00:40:43,680 --> 00:40:45,840
Speaker 1: and read it. And I wanted to let you know

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00:40:45,840 --> 00:40:48,880
Speaker 1: about a special event that we're holding four listeners. My

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00:40:49,000 --> 00:40:52,600
Speaker 1: co host Tracy Alloway and I will be speaking with

702
00:40:53,160 --> 00:40:56,360
Speaker 1: past guest Josh Younger, as well as Columbia law professor

703
00:40:56,640 --> 00:41:00,800
Speaker 1: levmanand in a special live episode of the odd podcast

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00:41:00,880 --> 00:41:04,759
Speaker 1: on November We're gonna be holding it at Bloomberg h Q,

705
00:41:05,200 --> 00:41:09,560
Speaker 1: and you're welcome to come mingo join. We're gonna have cocktails,

706
00:41:09,920 --> 00:41:13,120
Speaker 1: canapas and other stuff on that day along with the

707
00:41:13,160 --> 00:41:16,799
Speaker 1: live recording. So if you're interested in attending a live

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00:41:16,800 --> 00:41:19,400
Speaker 1: episode of the Odd Lots podcast as well as meeting

709
00:41:19,480 --> 00:41:21,680
Speaker 1: me and Tracy, as well as meeting our guests, and

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00:41:21,719 --> 00:41:25,040
Speaker 1: as well as meeting other odd Lots listeners, go find

711
00:41:25,160 --> 00:41:28,239
Speaker 1: the rs VP. Both Tracy and I have tweeted about it.

712
00:41:28,239 --> 00:41:31,520
Speaker 1: It's also on Bloomberg dot com slash odd Lots. Sign

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00:41:31,600 --> 00:41:33,840
Speaker 1: up and join us in New York City at Bloomberg

714
00:41:33,880 --> 00:42:00,160
Speaker 1: age Q on November twenty nine. Thanks for listening to

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Speaker 1: the