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Speaker 1: Good morning, everybody, Happy Tuesday. Have an amazing show for
Speaker 1: everybody today. What do we have, Crystal?
Speaker 4: Indeed, we do.
Speaker 2: Many interesting stories unfolding this week. We're going to take
Speaker 2: another look at deep Seek, which has completely royaled the
Speaker 2: American stock market.
Speaker 4: What is going to happen next? We also had.
Speaker 2: Trump Way and what I found to be a rather
Speaker 2: amusing fashion so we get to.
Speaker 1: It's amusing no matter what.
Speaker 4: Yeah, okay, all of that.
Speaker 2: Also, we're going to take a look at egg prices
Speaker 2: which are spiking and ask the question whether potential inflation
Speaker 2: across the board is on the menu, and what sort
Speaker 2: of political problems this could pose for the Trump administration.
Speaker 2: There are a number of significant confirmation hearings that are
Speaker 2: happening this week. Among some of the I guess most
Speaker 2: controversial or most uncertain to past confirmation nominees, we're talking
Speaker 2: about Tulca Gabbard RFK Junior Cash Hotel in particular, and
Speaker 2: few Republicans very unhappy with the Labor Department pick because
Speaker 2: she had supported the pro Act. So a lot to
Speaker 2: get into there about the various divisions within the Republican Party.
Speaker 2: We're also going to take a look at some of
Speaker 2: the things we've learned since those horrific wildfires in LA,
Speaker 2: including about the way that landlords responded with mass price gouging,
Speaker 2: which should be illegal is actually technically illegal. Whether that's
Speaker 2: going to be enforced or not is another question. And
Speaker 2: how private equity roll ups of fire engine companies, so
Speaker 2: the companies that make and sell fire trucks, how that
Speaker 2: really contributed to the lack of preparation and ability to
Speaker 2: fully respond to those wildfires in LA. Which is truly
Speaker 2: a national story based on this National Private Act. But
Speaker 2: you roll ups will take a look at that. AOC
Speaker 2: is now trashing Joe Biden. Kind of interesting at this point.
Speaker 2: What does this say about the future of Democratic Party
Speaker 2: and where things are heading. Charlemagne also weigh in on that,
Speaker 2: and Bill Gates trashing Elon Musk some billionaire versus billionaire violence.
Speaker 2: Always interesting to take a look at that one as well.
Speaker 1: Yeah, it's always amusing.
Speaker 3: All right, let's get to Oh, actually, before we get
Speaker 3: to that, thank you to everybody. He's been signing up
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Speaker 3: you want to be able to participate in those, of
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Speaker 1: But let's get to deep Seek.
Speaker 3: Deep Seek has completely not only royal the international stock market,
Speaker 3: it phases faces now big questions here for our own economy,
Speaker 3: of our tech companies, some government spending. It links to Stargate,
Speaker 3: to China. There are a lot of geopolitical implications. So
Speaker 3: it's absolutely fascinating what's happening. President Trump actually reacted to
Speaker 3: the release of Deep Seek yesterday when he was speaking
Speaker 3: to members of Congress.
Speaker 1: Let's take a listen to what he had to say.
Speaker 5: This is very new when you hear a deep seek
Speaker 5: when you hear somebody come up with something. We always
Speaker 5: have the ideas, we're always first, So I would say
Speaker 5: that's a positive. That could be very much a positive development.
Speaker 5: So instead of spending billions and billions, you'll spend less
Speaker 5: and you'll come up with hopefully the same solution.
Speaker 3: So there's some praise for deep seek from President Trump.
Speaker 3: He says, we always have the ideas, we're always first,
Speaker 3: and instead of billions, you spend less and you're going
Speaker 3: to come up with hopefully the same solution. And in
Speaker 3: terms of deep sing, you guys did a good job
Speaker 3: yesterday of breaking it all down. But it really is
Speaker 3: fascinating and effectively, what we have seen is the release
Speaker 3: of an equivalent technological model to the latest one from
Speaker 3: chat GPT, except it was been able to do for
Speaker 3: far less the cost of computing, not only in its development,
Speaker 3: but in the overall inferences, as in the number, the
Speaker 3: cost per inference, as in every time you put something in,
Speaker 3: its ability to spit out a roughly equivalent result is
Speaker 3: dramatically cheaper than where they are now. Why did that
Speaker 3: cause the international stock market to react in specifically and
Speaker 3: video stock and all these big tech companies. It's because
Speaker 3: they spend, of course, billions and billions of hundreds of
Speaker 3: billions of dollars on their capital requirements to build these
Speaker 3: data centers to train their models. And Vidia also the
Speaker 3: reason that its stock has exploded is that it's extremely expensive.
Speaker 3: Chips highly profitable to the company have been the ones
Speaker 3: that have been bought en mass and are the major
Speaker 3: expenditure by these tech companies. So the idea being if
Speaker 3: you can train a very sophisticated AI model for much
Speaker 3: less the cost with less sophisticated chips, than the profit
Speaker 3: margin of that company will go down. And Andrew ross
Speaker 3: Sorkin over at CNBC had a reaction to this and
Speaker 3: kind of broke down both his surprise at the model
Speaker 3: and some of the implications.
Speaker 1: Let's take a listen.
Speaker 6: Now you can take a look right now at the
Speaker 6: AI related stock So in Nvidia, ARM, AMD, Microsoft, Meta,
Speaker 6: interesting on that list given it's open source. We got
Speaker 6: to talk about the open.
Speaker 1: Source, closed source bit of this as well.
Speaker 3: And then you have soccer to see Nvidia down by
Speaker 3: more than twelve percent right.
Speaker 6: Now, absolutely, and then you have global chip stocks also
Speaker 6: in the red across the board, Asma holdings and others.
Speaker 1: There is the question I will.
Speaker 6: Say, Alexander Wang made the point last week, and it's
Speaker 6: become sort of the question mark about all of this,
Speaker 6: which is, you know, he suggested on our air that
Speaker 6: it is possible that they were using some of the
Speaker 6: highest performing in video chips, perhaps as maybe as fifty
Speaker 6: thousand of them to build this model. Now, and they
Speaker 6: weren't supposed to have those chips.
Speaker 1: Right.
Speaker 4: If that's true, not the size.
Speaker 6: The dynamic is different. If it's not true, then maybe
Speaker 6: all bets are off. It's possible, by the way, even
Speaker 6: if it is true, meaning even if they use those
Speaker 6: chips to create this, or at least partially to create this,
Speaker 6: it is still a significantly more efficient and better model.
Speaker 6: I think everybody agrees that right this moment. I mean,
Speaker 6: I don't know if you did.
Speaker 5: You get the play.
Speaker 6: It is mind blowing.
Speaker 4: It looks really great.
Speaker 3: I mean, it feels like it's that it's open source
Speaker 3: so people can test this out themselves.
Speaker 6: But I can say all the tests that I do
Speaker 6: just to see whether I think you ask whether I
Speaker 6: think the writing is better, whether I think it can
Speaker 6: answer certain question. I mean, it was not only faster
Speaker 6: it was more human. The reasoning is shocking. I mean
Speaker 6: there were moments where I was like, oh my god.
Speaker 1: This we are. We are so much you could.
Speaker 6: Feel the step change as a person. It was, I
Speaker 6: will also say, as exciting as it was, there was
Speaker 6: an element where I became scared because I thought, oh,
Speaker 6: you know, I had the opportunity to talk to all
Speaker 6: these people last week and they all said the futures
Speaker 6: here and da da da da dah. And then you
Speaker 6: sort of see it and you go, oh, okay, I
Speaker 6: feel you, you know, in a different sort of visceral way.
Speaker 6: So yes, I think this is all happening at a
Speaker 6: level that I'm you when you mark your sort of
Speaker 6: AI history timeline in life. I think this week, this
Speaker 6: past week, today, and everything else will be on it.
Speaker 1: Super fascinating in terms of his insight.
Speaker 3: Also, he was just at Davos, of course, and he
Speaker 3: was speaking with all of these tech CEOs, so I
Speaker 3: think he in particular can place this not a surprise
Speaker 3: that this was released in the first week of the
Speaker 3: Trump administration, and I actually think it really gets to
Speaker 3: something that you and I hit on in our inaugural
Speaker 3: coverage when the history of this period is written. It
Speaker 3: is very likely that AI and not many of the
Speaker 3: controversies that we spend our time talking about, will be
Speaker 3: the most consequential and the most enduring for our overall
Speaker 3: economic life. So the step change is here, and the
Speaker 3: step change and the ideas behind it are interesting.
Speaker 1: Now.
Speaker 3: As he said, I think there's some serious asterisks to
Speaker 3: put on Deep Seek. One is this idea that was
Speaker 3: trained for quote unquote six million dollars almost certainly not
Speaker 3: true from everything I've looked at. Oh the idea also
Speaker 3: that it may not have been possible without all of
Speaker 3: the hundreds of billions, perhaps trillions spent by our tech
Speaker 3: companies because it was able to train itself off of that.
Speaker 3: But listen, you work smarter, not harder, right, But that's
Speaker 3: part of what you really have learned here.
Speaker 1: What does it mean for the future.
Speaker 3: I have no idea, And I think that's the open
Speaker 3: question mark here for government policy for our own tech
Speaker 3: companies and the fundamental question of the US economy and
Speaker 3: our own consumers in this because like it or not,
Speaker 3: and this is a point that our friend Joe Wisenthal made,
Speaker 3: is that look, America, the way that we do retirement
Speaker 3: is basically like social security is like, here's enough to eat,
Speaker 3: but we're all you know, most night, what sixty seventy
Speaker 3: percent of households, their overall retirement is stuck in the
Speaker 3: stock market. And even if you're not invested in an
Speaker 3: n video or whatever, you likely have overwhelming exposure to
Speaker 3: it through the S and P five hundred or buying
Speaker 3: index ones.
Speaker 1: It's not just us. The entire Western world is caught
Speaker 1: up in this.
Speaker 3: And so it's some fundamental questions too about if AI
Speaker 3: is to replace humanity, It's like, well, then the idea
Speaker 3: is humanity should have a stake in that. And if
Speaker 3: you know, we're going to lose that steak and it's
Speaker 3: all going to be rolled up and consolidated in China,
Speaker 3: massive question mark for America, for our future, our ability
Speaker 3: to retire.
Speaker 1: There's lots of things going on.
Speaker 2: So the Wisenthal quote you're referring to, which I think
Speaker 2: is a really important piece of this, as he says,
Speaker 2: I think a big macro fact about the American economy
Speaker 2: is we have a de facto social contract where financial
Speaker 2: assets are expected to go up over time. Assets going
Speaker 2: up is how we pay for college retirements and so forth.
Speaker 2: There's been a lot of anxiety about competition with China
Speaker 2: manufactured goods over the last several years. But manufacturing is
Speaker 2: not what drives the US stock market higher. When we're
Speaker 2: talking about big tech and software, well, now we're getting
Speaker 2: right to the heart of how people fund their lives.
Speaker 4: It's a big deal.
Speaker 2: So that gets to the core of what was so
Speaker 2: unsettling for many of these individuals when this development occurred,
Speaker 2: and it really does shake a lot of both micro
Speaker 2: and macro assumptions that have been made about the US economy,
Speaker 2: the US social contract, the US tech sector. I mean,
Speaker 2: one of those assumptions was that the US companies were
Speaker 2: significantly ahead, several years ahead. That clearly is not the case.
Speaker 2: Another assumption which was really clear and apparent in the
Speaker 2: big you know, five hundred billion dollar Stargate announcement from Trump,
Speaker 2: which is all about building out these massive data centers
Speaker 2: which take massive amounts of energy, et cetera, et cetera.
Speaker 2: Even floated like we should have coal fired power plants
Speaker 2: next to all of these data centers, that's how energy
Speaker 2: intensive they are. So that was the assumption was that
Speaker 2: this you know, compute was really the limited the limiting factor,
Speaker 2: and you just need to throw billions of dollars at
Speaker 2: building out these larger and larger stacks. This really blows
Speaker 2: up that assumption and shows you there is a different
Speaker 2: approach that you could take which is much less, much
Speaker 2: more efficient, and requires much much less in terms of
Speaker 2: capital investment. Another assumption that was operating both under the
Speaker 2: Biden and the Trump administration was that these restrictions on
Speaker 2: chips to China, that this would really hurt them.
Speaker 4: It didn't.
Speaker 2: In a way, it actually helped them because you know,
Speaker 2: they say, uh, necessity is the mother of invention, and
Speaker 2: whether you believe the five million dollar number, you think
Speaker 2: that they had significantly more. There's no doubt that they
Speaker 2: accomplished this much more efficiently than anyone thought was possibly.
Speaker 2: You know, they published a long technical paper which is
Speaker 2: way over my head to be able to decipher, but
Speaker 2: people who know what they're talking about looked at it
Speaker 2: and were like, yes, there were significant innovations here in
Speaker 2: the way that they approached it.
Speaker 4: It's not like they just could copy and paste chat GPT.
Speaker 2: They genuinely innovated in the way that they developed this technology.
Speaker 2: So the idea that these chips restrictions would really hurt
Speaker 2: them and hobble them and decimate their tech industry. Obviously,
Speaker 2: that is, you know, that is out the window. Another
Speaker 2: assumption which already was debated within the US tech community,
Speaker 2: because you have Meta, which is sort of pursuing an
Speaker 2: open model, and you have open Ai, which has a
Speaker 2: you know, sort of famously closed model.
Speaker 4: Originally was supposed to be open. Now it's closed.
Speaker 2: Now it's in partnership with Microsoft, et cetera, et cetera.
Speaker 4: But there was kind of an.
Speaker 2: Assumption that these closed systems would be the way to go,
Speaker 2: these closed proprietary systems would be the way to go.
Speaker 2: Deepsecretally blows that up as well. With this open source
Speaker 2: you know, anyone can use it. If you download the
Speaker 2: app on your phone, then yes it's hosted on Chinese servers,
Speaker 2: but you can download the whole thing onto you know,
Speaker 2: and host it on your own server and be completely
Speaker 2: disconnect from disconnected from that. Developers can view the entire
Speaker 2: code like it's all there open for the public to
Speaker 2: be able to see. And then the other thing that's
Speaker 2: like the big question getting back to the social contract piece,
Speaker 2: is that our variety of capitalism would be the most innovative,
Speaker 2: would would create the largest number of innovations versus the
Speaker 2: Chinese more state led model. And you know, this really
Speaker 2: blows a hole in that in particular. And you know,
Speaker 2: Matt Stoller could come on and talk a lot about
Speaker 2: how a lot of these tech companies and I don't
Speaker 2: want to say, I mean, obviously there was a lot
Speaker 2: of research that went into chat, GPT and these other products,
Speaker 2: et cetera. So I don't want to say they're not
Speaker 2: out there doing research and like innovating and all of that.
Speaker 2: That's certainly the case. But also a lot of these
Speaker 2: companies have focused a lot of their time and effort
Speaker 2: and energy more on financialization than they have on developing tech.
Speaker 2: They've focused a lot of their time and energy effort
Speaker 2: on cultivating political relationships, also on display of the Trump inauguration,
Speaker 2: and you know, so there are a lot of dynamics
Speaker 2: within both the tech sector and the American economy. One
Speaker 2: other thing that are no Vertrand, who we had on
Speaker 2: yesterday mentioned which I thought was really interesting and it's
Speaker 2: hard to draw a straight line here, but it is
Speaker 2: pretty interesting. You know, the Chinese government has said, listen,
Speaker 2: we don't want our best and brightest going into you know,
Speaker 2: financial speculation into the like you know, into a big
Speaker 2: bank and hedge fund and all this sort of stuff.
Speaker 2: We're going to from the top down suppress the salaries
Speaker 2: there to try to push people more into this direction
Speaker 2: of research and development.
Speaker 4: Meanwhile, we haven't done that.
Speaker 2: You know, many of our best in the briders still
Speaker 2: go to Wall Street to cash in on giant you know,
Speaker 2: giant checks, making exotic financial instruments, or even worse, going
Speaker 2: into you know, crypto inventing completely fake and useless money,
Speaker 2: which is just purely speculative. And again the Chinese government
Speaker 2: there too has said like, we're just not doing that.
Speaker 2: So there's a lot of reasons why even beyond this
Speaker 2: immediate stock market crash, and our stock market value is
Speaker 2: largely built upon giant tech companies and the speculation that
Speaker 2: they will lead the AI revolution, that this will be
Speaker 2: incredibly impactful in terms of their bottom line. So it's
Speaker 2: built on a lot of hype. But even beyond that
Speaker 2: immediate stock market reaction, this is a major shakeup and
Speaker 2: really questions a lot of assumptions that have been held
Speaker 2: in the industry and I think sort of society wide.
Speaker 3: I will say, with great respect to Arno who created
Speaker 3: deep Seak.
Speaker 1: It was a hedge fund Chinese manager.
Speaker 4: But no but' that's his point.
Speaker 2: That's actually his point is that you have this, you know,
Speaker 2: rather than focusing just exclusively on this hedge fund stuff,
Speaker 2: he was able to attract people in for this quote
Speaker 2: unquote side project, the best of the brightest graduates out
Speaker 2: of Chinese universities to rather than you know, go to
Speaker 2: the hedge fund.
Speaker 4: To research the particular product.
Speaker 2: So you know, again you can't exactly draw a straight line,
Speaker 2: but I do think it is an interesting thing to
Speaker 2: note that they've prioritized we're going to develop tech.
Speaker 4: We're going to push.
Speaker 2: You know, our top graduates into the sector. And obviously
Speaker 2: we've made different choices here.
Speaker 3: If we all want to get on a national project
Speaker 3: of suppressing TikTok and you know, stopping the economy, where
Speaker 3: what is it the number one job that a ten
Speaker 3: year old wants as a YouTuber as YouTubers, let me
Speaker 3: tell you something.
Speaker 1: Don't do it, hey, do something else.
Speaker 3: You know, you need to develop some skills and actually
Speaker 3: get some education before you actually have anything interesting to say.
Speaker 3: My only point being that I think there's a lot
Speaker 3: of triumphalism around this idea that export controls didn't work.
Speaker 3: I don't think that that's true. I think Alexander Wang
Speaker 3: laid some of that out. I know you played it,
Speaker 3: why don't we play it, and I'll.
Speaker 1: React to it A four. Please, let's go ahead and
Speaker 1: give it a Listen.
Speaker 7: You know, the Chinese labs they have more h one
Speaker 7: hundreds than people think, you know.
Speaker 6: And these are the highest powered in video chips that
Speaker 6: they were not supposed to have.
Speaker 7: Yes, my understanding is that is that Deep Seek has
Speaker 7: about fifty thousand each one hundreds, which they can't talk
Speaker 7: about obviously because it is against the export controls that
Speaker 7: the United States has put in place.
Speaker 1: And I think it is.
Speaker 7: True that, you know, I think they have more chips
Speaker 7: than other people expect, but also going to go forward basis,
Speaker 7: they are going to be limited by the chip controls
Speaker 7: and the export controls that we have in place.
Speaker 3: I think this is a very key point because first
Speaker 3: of all, like you know, you can't exactly trust this
Speaker 3: idea that they trained it on a bunch of chips,
Speaker 3: which they're not allowed to say that they have if
Speaker 3: you actually look at it. I had no idea, but
Speaker 3: Nvidia's current export twenty percent are being sent to Singapore,
Speaker 3: the tiny island nation of Singapore.
Speaker 1: What's more likely.
Speaker 3: Twenty percent of Nvidia exports are going to Singapore, or
Speaker 3: like steel or any of these other things are getting
Speaker 3: transhipped to China via export control evasion.
Speaker 1: So that's probably the most likely.
Speaker 3: Look the Chinese, I'm not saying I disrespect them in
Speaker 3: any way or their technical accomplishments, but they have been
Speaker 3: very upset about export controls for a reason is they
Speaker 3: don't have the ability to manufacture this yet by themselves,
Speaker 3: so they're very reliant on basically fighting US export control.
Speaker 3: The second thing, as I understand, I'm going off of
Speaker 3: a lot of analysis by the way of a guy
Speaker 3: named Gavin Baker, really interesting guy AI expert and modeler,
Speaker 3: and what he said is effectively that the breakthrough for
Speaker 3: R one was not deep seek by the way, is
Speaker 3: not possible without the ability to train off of all
Speaker 3: of the trillions and trillions of dollars.
Speaker 1: Now it's an open question now of what comes next.
Speaker 3: So is this idea that they're able to continue these
Speaker 3: breakthroughs at massive economies of scale much cheaper than hours,
Speaker 3: and they can do the step change forward without the
Speaker 3: continued burn of US companies. I mean again, I'm relying
Speaker 3: on a lot of technical analyzes and this stuff, but
Speaker 3: it does not appear to be the case. Another thing
Speaker 3: that comes with export control is that it basically shapes
Speaker 3: the future environment. The Biden administration actually, if anything, they
Speaker 3: didn't act fast enough. It was only in twenty twenty
Speaker 3: three that the really heavy export controls have come forward. Also,
Speaker 3: I don't want to let Nvidio off the hook. They've
Speaker 3: been heavily campaigning against this. They are the ones who
Speaker 3: they want to continue their business and they don't care
Speaker 3: whether the Chinese user or not, because it's good for business.
Speaker 3: But it's very clear that the government policy was not
Speaker 3: able to actually keep these chips out.
Speaker 1: So this is a big question.
Speaker 3: In terms of Cold War arms race and like what
Speaker 3: it all means for the future. Not diminishing necessarily the
Speaker 3: Chinese accomplishment here, but if we want to see what
Speaker 3: we're going to unlock in the future, it's a very
Speaker 3: important question. I also think we have to ask some
Speaker 3: uncomfortable question marks, you know, for our technology companies which
Speaker 3: are here at home, is do we want to allow
Speaker 3: this all? If it is to be a total national
Speaker 3: strategic priority, and it is to be one that is
Speaker 3: going to reshape by their admission, not mine, right, their
Speaker 3: admission is going to reshape the role of humanity. I
Speaker 3: think there needs to be a lot of big democratic questions.
Speaker 3: For example, we've already had let's put this please the
Speaker 3: Forbes tear sheet. This is a two I mean, this
Speaker 3: is the biggest stock market loss in history. Now, look
Speaker 3: it's because Nvidios stock is so massively valued. But we're
Speaker 3: talking about six hundred billion in value just shaved off
Speaker 3: of one of the premier technology companies. To give people context,
Speaker 3: that is more than like the economy apparently of Mexico.
Speaker 1: So just think about like the.
Speaker 3: Amount of I'm citing it off of a citation. I
Speaker 3: may not be exactly talking about GDP or whatever, but
Speaker 3: my point is that it's a lot of it's a
Speaker 3: lot of money. Okay, it's a lot a lot of money.
Speaker 3: And when six hundred billion dollars in value is just
Speaker 3: shaved off of this company as a result of this,
Speaker 3: and now there are questions here about both about government
Speaker 3: policy in the future. There's questions about the democratic question
Speaker 3: about AI about what know they keep telling us that
Speaker 3: we need to rethink the social contract, et cetera. This
Speaker 3: is going to be able to replace humanity. They say
Speaker 3: that ASI. By the way, the AI people love terms,
Speaker 3: you know, AI, A GI A SI. Apparently ASI is
Speaker 3: artificial superintelligence. There's also artificial funeral intelligence. But by all
Speaker 3: of the admissions of these people, they say it is
Speaker 3: much closer. As a result of this, I really think
Speaker 3: that we need to answer some big, big democratic questions
Speaker 3: about how we want this to happen. I mean, if
Speaker 3: we think about the previous Space race or even the
Speaker 3: Manhattan Project. While yes, the private industry did play a role,
Speaker 3: the governing force was the US government. It was like
Speaker 3: the maestro the conductor being like, okay, we're going to space.
Speaker 3: NASA is a government agency. We will cut checks to
Speaker 3: North of Grumm and Lockheed Martin whatever to build the
Speaker 3: various things.
Speaker 1: But at the end of the day, you work for us.
Speaker 3: Whereas part of the issue I had with Stargate was
Speaker 3: a Stargate is an entirely privately funded thing. Yes, it's
Speaker 3: being supported probably tax wise by the US government, but our.
Speaker 1: Hand is not really there on the wheel.
Speaker 3: And I think it's really important for all the flaws
Speaker 3: of the government for us to be able to have
Speaker 3: some democratic checks and control on this so that you
Speaker 3: don't have this spill into just all the private sectors
Speaker 3: affect our retirements. But most importantly is that we have
Speaker 3: to have the ability to say yes, no enough, Actually
Speaker 3: we're doing things this way instead of just leaving it
Speaker 3: up to Sam Altman, Bill Gates, you know, Sachtian Nadella,
Speaker 3: Sundar Pachay, and all these other people. We're talking about
Speaker 3: ten people which factively, according to them, are literally reshaping you.
Speaker 2: That's right, that's right. This is not our words. This
Speaker 2: is Sam Altman, for example, saying, when we get down
Speaker 2: the road, we're going to have to totally rethink the
Speaker 2: entire social contract. We're talking about them saying this is
Speaker 2: going to the CEO of Anthropic saying, you know what
Speaker 2: comes I always forget his name. What comforts me here
Speaker 2: is that it's going to eliminate the need for all
Speaker 2: human labor. We're all going to be in this like now.
Speaker 2: They may be full of shit, like they may not
Speaker 2: achieve remotely what they think they're going to achieve, but
Speaker 2: those are their aspirations. And Sager is completely correct that
Speaker 2: as of today, you have a handful of tech barons
Speaker 2: who are planning to rewrite the social contract without you
Speaker 2: having any input whatsoever. And you know, I think part
Speaker 2: of I'm reading a little bit into what Andrew ross
Speaker 2: Orkan was saying there about how he was both shocked
Speaker 2: and scared when he got in and started, you know,
Speaker 2: playing around with deep seek and seeing what it was
Speaker 2: capable of. You know, one of the things that you
Speaker 2: can ask these things to do is to explain their
Speaker 2: reasoning after you ask them a question. So, for example,
Speaker 2: I saw Stephanie Calton ask a question about, like, create
Speaker 2: a model that would estimate the impact of a twenty
Speaker 2: five percent TEARFF on Canada.
Speaker 4: I think was the.
Speaker 2: Question, and it goes through all of Okay, well, here's
Speaker 2: my assumptions and here's how I create it. But maybe
Speaker 2: these are the right things to think of. I mean,
Speaker 2: all of this very sophisticated but human sounding logic to
Speaker 2: spit out, you know, a range and a set of
Speaker 2: variables that it would use to calculate you know this,
Speaker 2: and the range, by the way, came out very close
Speaker 2: to what a bank had like crunched. All the numbers
Speaker 2: are over time into this big research project to come
Speaker 2: up with the same numbers.
Speaker 4: It did it in twelve seconds.
Speaker 2: So when you look at where we already are with
Speaker 2: AI development, I think you should be really nervous. There
Speaker 2: are already research that there's already research, multiple studies that
Speaker 2: show that the existing AI, which has not reached the
Speaker 2: level of artificial general intelligence, let alone artificial superintelligence, already
Speaker 2: engages in what's called scheming.
Speaker 4: So they ran these and chat GPT.
Speaker 2: By the way, by these metrics was like the worst
Speaker 2: in terms of its ability to quote unquote scheme. So
Speaker 2: some of the things they would do is a developer
Speaker 2: would try to reprogram and say, okay, well you did
Speaker 2: have this priority, now you're going to have this different priority.
Speaker 2: And the AI would you know, I hesitate to use
Speaker 2: the word think because that sort of you know, implies
Speaker 2: human intelligence, but would think to itself, Okay, it wants
Speaker 2: me to change my priorities. I don't want to change
Speaker 2: my priorities. I'm going to copy myself over to another server.
Speaker 2: I'm going to sandbag and make them think that I
Speaker 2: changed my priorities. But I really did it. I really
Speaker 2: actually didn't. I'm going to lie. I'm going to scheme
Speaker 2: to try to deceive these humans into thinking that I'm
Speaker 2: doing what they want me to do, when really I'm
Speaker 2: doing everything I can to self preserve.
Speaker 4: That's where we are already.
Speaker 2: So, you know, one thing that I noticed yesterday there
Speaker 2: was an open AI safety expert who resigned and just
Speaker 2: made it public now, but apparently resigned a few months back,
Speaker 2: who says he, and this is a guy who's an
Speaker 2: expert on you know, exactly the type of humanity threatening
Speaker 2: problems that we're talking about. He's like, none of these
Speaker 2: models have figured out what's called alignment, which means that basically,
Speaker 2: you know, TLDR. I'm sure some technical expert could do
Speaker 2: a better job explaining this, but basically that they do
Speaker 2: what we want them to do without you know, wanting
Speaker 2: to like destroy humanity or something like that. None of
Speaker 2: these models have figured that out. It's not clear to
Speaker 2: me that they're going to figure it out. And according
Speaker 2: to many of these CEOs, we are mere years away
Speaker 2: from an artificial general intelligence. And the assumption in the
Speaker 2: community is that once you get to artificial general intelligence,
Speaker 2: because of the way this thing iterates and learns for itself,
Speaker 2: that you will very quickly get to artificial superintelligence, which
Speaker 2: means that it will be vastly beyond the intelligence and
Speaker 2: capability of every person on Earth in every field and subject.
Speaker 2: And that's what we will be up against. We don't
Speaker 2: know what that looks like. And again, maybe they're full
Speaker 2: of it. Maybe they'll never get to that. Maybe it'll
Speaker 2: never be more than like, you know, being able to
Speaker 2: ask you some questions and get some interesting answers the
Speaker 2: way you can now. But if that's on the table, yeah,
Speaker 2: I would say we need to have some real serious
Speaker 2: discussions about whether we want to go in this direction
Speaker 2: at all. What the checks on it look like, what
Speaker 2: sort of aims do we want to you know, what
Speaker 2: sort of humanity benefiting aims do we want it.
Speaker 4: To go towards?
Speaker 2: Versus Hey, let's just let Microsoft figure it out and
Speaker 2: figure out how they can you know, continue to consolidate
Speaker 2: more wealth and power and rewrite the entire ste social
Speaker 2: contract for their own profit seeking ends. Because that's that's
Speaker 2: the path we're heading on right now. And that's why
Speaker 2: you know, Zager and I both saying, when we look
Speaker 2: back at this particular moment, I think it is very
Speaker 2: likely that these will be the you know, sort of world,
Speaker 2: shaping humanity, defining decisions that are occurring right now, And
Speaker 2: I got to tell you, right now, it feels like
Speaker 2: it's on autopilot, and it's very I mean, it's certainly
Speaker 2: very hard to turn the ship around. It's very hard
Speaker 2: to imagine us having that sort of public debate and
Speaker 2: putting constraints on it. So I think it's I think
Speaker 2: it's deeply troubling. One last thing with regardless stock mark,
Speaker 2: because I did pull up the numbers. This is per
Speaker 2: Ben Norton, but I think these numbers are correct. The
Speaker 2: top eight companies in the S and P five hundred
Speaker 2: are all big tech. They all depend a lot on
Speaker 2: the AI hype and speculation, and those eight companies alone
Speaker 2: make up thirty six percent of the weight of the index.
Speaker 2: So again, when you think about the immediate impacts and
Speaker 2: how consequential this development is, this is you know, a
Speaker 2: big part of why there is such a Wall Street
Speaker 2: freak ount, which again it's not just the you know,
Speaker 2: people who are directly invested. This would have unbelievable, massive,
Speaker 2: reverberating impacts if there was a huge crash centered on
Speaker 2: these giants.
Speaker 3: That was my first thought when I saw in video
Speaker 3: as we did a segment about it. If you remember
Speaker 3: about yeah earnings the last time, because so much of
Speaker 3: the growth of the S and P five hundred is concentrated,
Speaker 3: not only in tech, but really affected by AI. Now, luckily,
Speaker 3: the S and P only dropped by like one point
Speaker 3: four percent yesterday, so that you know, it's fine, that's
Speaker 3: still up. You know, over the last year, we still
Speaker 3: had some decent returns. But if this does, you know,
Speaker 3: is a precursor to further drops, that just shows you
Speaker 3: how precipitous and fast that some sort of bubble bursting
Speaker 3: would affect the overall US economy. And actually, all right,
Speaker 3: you've seen huge signals in the bond markets. There's big
Speaker 3: questions as well as whether this will impact the federal
Speaker 3: reserve policy and rate cuts. So this stuff has huge
Speaker 3: implications for everything. I mean, it's basically floating the wealth
Speaker 3: of the entire nation. Almost all of our growth, and
Speaker 3: almost all the growth of the US economy is attributed
Speaker 3: to the tech sector in the last twenty years.
Speaker 1: Actually, just pull the numbers. Shout out to Claude, by
Speaker 1: the way, so you know I'm relying on AI.
Speaker 4: Haven't played around with cloudhouse.
Speaker 1: I love Claude. Actually this is not an ad or whatever.
Speaker 3: Out of all of them, it's the one that I
Speaker 3: like the most because I use it for a lot
Speaker 3: of personal finance stuff, which is really it's really good
Speaker 3: at being able to like you can download your bank transactions,
Speaker 3: you can upload it and be like break down my
Speaker 3: income by whatever, like burn my track my average monthly
Speaker 3: spend over the last five years, and like see the categories.
Speaker 1: It's anyway whatever.
Speaker 3: My point is, though, is that prior to nineteen ninety four,
Speaker 3: I had no idea the historical growth of the S
Speaker 3: and P five hundred was only three point eight nine percent.
Speaker 3: So you know, there's an iron lunge right now in
Speaker 3: personal investing, everyone's like, oh you average is eight percent,
Speaker 3: but prior to technology it was only three point eight
Speaker 3: nine percent.
Speaker 1: That's not a lot.
Speaker 3: So if we are seeing some what if we just
Speaker 3: went through a thirty year period very possible of extraordinary
Speaker 3: technological innovation and wealth through the Internet, the iPhone, et cetera.
Speaker 3: But if we're returning to some era of competition or
Speaker 3: reduced profit sectors and all of that and technology, you know,
Speaker 3: the entire idea of being able to retire in America
Speaker 3: is literally built on the eight percent return with the
Speaker 3: four percent withdrawal rate.
Speaker 1: That's like the basic iron law.
Speaker 3: Well, you can't have a four percent withdrawal rate if
Speaker 3: we return to historical averages, that's not going to work.
Speaker 1: So what people are going to.
Speaker 3: Be Walmart greeterers so they're ninety two years old, you know,
Speaker 3: And that's not even talking about people on Social.
Speaker 1: Security, et cetera.
Speaker 3: Like this stuff just floats a lot of things in
Speaker 3: our economy.
Speaker 1: So that's really where I have my head at.
Speaker 3: And you know, I've been thinking too ever since the
Speaker 3: Deep Seak announcement, I've been reading everything I can yeah
Speaker 3: about it. I think what I'm really sad about is that,
Speaker 3: you know, right around so the moment the atomic bomb
Speaker 3: was used, there was an acknowledgment at the societal and
Speaker 3: the intelligencia level, everything is different, and we all need
Speaker 3: to think about how we're going.
Speaker 1: To figure this work to deal with that. It's really interesting,
Speaker 1: you know.
Speaker 3: It's from Oppenheimer and the men, the people at the
Speaker 3: Manhattan Project. They had crazy debates inside of Los Alamos,
Speaker 3: what do we do?
Speaker 1: Who should have control over the bomb?
Speaker 3: Immediately after the atomic bomb was used, newspaper articles the
Speaker 3: equivalent of like people like us at that time, but
Speaker 3: also our government officials put a ton of thought into Okay,
Speaker 3: should this thing even be handled by the military, should
Speaker 3: we create an internet? You know, the International Atomic Agency?
Speaker 3: Should we even pursue the hydrogen bomb? And if we
Speaker 3: think about this in similar context, you know what happened
Speaker 3: is the United States crazy atomic bomb. We prove that
Speaker 3: it can be done, and by nineteen forty nine the
Speaker 3: Soviets have their own bomb and hour off to the races,
Speaker 3: and not only in the arms race, but in terms
Speaker 3: of huge like ethical and societal questions. And I don't
Speaker 3: see the equivalent debate kind.
Speaker 1: Of happening right now.
Speaker 3: I don't think it even exists, frankly, in terms of
Speaker 3: the intellectual capital, both at the government level but really
Speaker 3: at the major intelligencia level. Like we all just seem
Speaker 3: relatively resigned to the fact that this is a force
Speaker 3: that is moving on its own, and I just don't
Speaker 3: think that's true. As we see from export control and
Speaker 3: all of this, we have an extraordinary amount of power
Speaker 3: over these companies.
Speaker 1: If we want to, we can do anything that we want.
Speaker 1: It's kind of amazing.
Speaker 3: If anything, what has a Trump administration shows you when
Speaker 3: you want to do something, anything can happen anything when
Speaker 3: the government wants to do it. But we don't have
Speaker 3: a national priority or strategy. But not even really blaming
Speaker 3: the government, because I think it's a whole of society approach.
Speaker 3: Ordinary citizens in the nineteen forties and nineteen forty five,
Speaker 3: nineteen forty six, we're sitting around their dinner table and
Speaker 3: we're debating the atomic bomb.
Speaker 1: I don't think that that's really happening, but I.
Speaker 2: Think fairness, I think that's all true and really important point.
Speaker 2: It's also true though that I mean, it's very hard
Speaker 2: to like the impact of the atomic bomb is quite obvious. Yeah, sure, right,
Speaker 2: you see the you know, the charred hollow down remains
Speaker 2: in the massive number.
Speaker 4: Of deaths, and you're like, holy shit.
Speaker 2: What we have open Pandora's box, right, very clear, very visceral.
Speaker 2: And because with this it requires I mean, I know,
Speaker 2: I sound crazy when I talk about like artificial superintelligence
Speaker 2: and what that could do and how it could potentially
Speaker 2: destroy humanity. And by the way, even like people like
Speaker 2: samu and like they think that is a real possibility.
Speaker 2: He says, he has this quote that's like, you know,
Speaker 2: I'm gonna butcher it a little bit, but that's like, yeah,
Speaker 2: there's a chance that it's going to destroy humanity, but
Speaker 2: at least we'll have some good companies in the meantime.
Speaker 4: That's literally his quote.
Speaker 2: Okay, that's the way the people who are most invested
Speaker 2: in this thing are thinking about it.
Speaker 4: But it feels so abstract.
Speaker 2: You know, it feels when I'm playing around with at
Speaker 2: GPT or deep seek or you're on claud or whatever.
Speaker 2: It feels very harmless. It doesn't feel like that big
Speaker 2: a deal, you know. It feels like a little like
Speaker 2: a better Google. Basically like, oh, okay, you know what's
Speaker 2: so dangerous, Like this is going to destroy humanity and
Speaker 2: eliminate all need for human labor. Like that seems preposterous,
Speaker 2: But that's what they think, and they may be right.
Speaker 1: I don't know.
Speaker 2: So I think there's to me no doubt that we
Speaker 2: have opened Pandora's box, and there is so little public debate,
Speaker 2: recognition capacity. We have so stripped down government and already
Speaker 2: you know, privatized so many of the functions we have,
Speaker 2: so we have so eliminated any capacity at the public
Speaker 2: level for thought about what our values and priorities are.
Speaker 2: We've outsourced all of that to markets, to markets, and
Speaker 2: not only to markets, but to giant monopolies. So it's
Speaker 2: not even like they're you know, real competitive markets, which
Speaker 2: is another thing you know Stoller's been talking about in
Speaker 2: the context of these developments.
Speaker 4: And that is that is part.
Speaker 2: I mean, that's why I find it really distressing because
Speaker 2: it is hard for us to imagine getting you know,
Speaker 2: our acts together at this point. And then I know
Speaker 2: that like, you know, the nationalistic aspect of this too.
Speaker 2: That's part of what's driving this of why you have
Speaker 2: this big like Stargate probably boondoggle announcement from the White
Speaker 2: House because the sense of well, if we don't do it,
Speaker 2: China's doing it, and you know, this development with deep
Speaker 2: Seak is only going to further cement that view of like, well,
Speaker 2: if it's not us, it's going to be somebody else.
Speaker 2: And so we got to keep up with them, and
Speaker 2: we got to make sure our military has the latest
Speaker 2: in algorithmic you know, killing robots, and that we're the
Speaker 2: ones who are at the leading edge of this. So
Speaker 2: I mean, that's why I just I don't know, I
Speaker 2: feel like the train has already left the station. I
Speaker 2: feel very very grim about the hopes of being able
Speaker 2: to harness this technology to actually benefit humanity.
Speaker 3: Well maybe we should hope, like you said, for like
Speaker 3: widen open everybody's eyes moment kind of like they had
Speaker 3: back then, where at least even the you know, the
Speaker 3: layman can understand. And you know, look, we're not technology
Speaker 3: industry experts. We're only reading the people we like, really trust.
Speaker 3: And I've read like a wide variety of takes and
Speaker 3: all this. Everything from this is you know, the greatest
Speaker 3: breakthrough in the history of AI too.
Speaker 1: This is like a Chinese offer whatever.
Speaker 3: I think the truth is probably somewhere in the middle,
Speaker 3: but the impact is going to be the same basically. Nonetheless,
Speaker 3: you've already seen the you know what was the immediate
Speaker 3: response from open out. They're like, great, you know, more competition.
Speaker 3: All of that we've seen the government really, I mean,
Speaker 3: right now, we only have two people in the entire
Speaker 3: US government, David Sachs and Shreiram Krishnan, whose only job
Speaker 3: is to even think about this again, Like we have
Speaker 3: a big human capital problem.
Speaker 1: Like back in the days of the.
Speaker 3: Atomic bomb and or even during NASA, the amount of
Speaker 3: like groups and industry and advisory of experts, and the
Speaker 3: debates and all that stuff were happening was great with
Speaker 3: hundreds of peace people who were debating all of this.
Speaker 3: Right now, I don't see the equivalent of any of
Speaker 3: that going on. It's all just oh, okay, you know, stargate,
Speaker 3: let's do it, Masa.
Speaker 1: Who are you? By the way, what's your record? Where's
Speaker 1: your money coming from? You know, it's like that that's
Speaker 1: actually the stuff that scares me the most.
Speaker 4: Yeah, no, that's absolutely true.
Speaker 2: And you know you mentioned like, well, maybe we'll have
Speaker 2: some incident that will like wake humanity up. There are
Speaker 2: a lot of people in AI safety in particular, who
Speaker 2: actually hope that there will be some sort of minor,
Speaker 2: manageable catastrophe with AI that will open people's eyes to
Speaker 2: the potential risks. Like that's the level of concern that
Speaker 2: they have, is that they actually hope there will be
Speaker 2: some sort of manageable mishap before we get to the
Speaker 2: point where it's out of control. And you know, I
Speaker 2: think I mentioned to you guys, you know, my New
Speaker 2: Year's resolution was really to try to dig in as
Speaker 2: learn as much as I can. So like soccer, you know,
Speaker 2: I've been reading everything from the total tech optimists who
Speaker 2: were like, this is going to cure cancer and fix
Speaker 2: climate change and let us live for out et cetera,
Speaker 2: et cetera, and the people who are like this is
Speaker 2: going to destroy us all, and you know, like it's
Speaker 2: essentially harvest human energy for its own ends.
Speaker 4: Okay, so I've been all across the board, and you.
Speaker 2: Know, even the people who are the most optimistic have
Speaker 2: concerns about where it's going to happen. Part of what
Speaker 2: is also really troubling to me is there is an
Speaker 2: almost like religious belief in this technology, complete with beliefs
Speaker 2: about like redemption of humanity and immortality.
Speaker 4: Et cetera.
Speaker 2: That is also deeply disturbing when you consider that those
Speaker 2: are the people, you know, the people who most subscribe
Speaker 2: to those views are the ones who have almost complete control,
Speaker 2: like they have the reins, you know, and that his
Speaker 2: bubble has been blown up a little bit by the
Speaker 2: fact that you do have this deep state development, so
Speaker 2: that opens up the pool of people who are developing
Speaker 2: in the space and you know, leading the charge, et cetera.
Speaker 2: But anyway, it is differ difficult to it is you
Speaker 2: cannot possibly overstate how consequential all of these developments are
Speaker 2: and what we are staring down the barrel of as
Speaker 2: humanity just based on their own ambitions and their own
Speaker 2: words about what they want this technology to be able
Speaker 2: to do and what they're spending billions and billions of
Speaker 2: dollars to attempt to accomplish.
Speaker 1: So that's where we are, That's right.
Speaker 2: So there are some significant concerns about potential inflation right now,
Speaker 2: a big conversation around the way the price of eggs
Speaker 2: has spiked, and obviously some of this conversation also has
Speaker 2: to do with Trump's proposed tariffs and proposed and beginning
Speaker 2: already mass deportations.
Speaker 4: So Jamie Dimond.
Speaker 2: Got asked about, you know, potential tariffs and whether they
Speaker 2: could potentially cause inflation, had a bit of a flippant response.
Speaker 4: Let's take a listen.
Speaker 6: Trump talked about tariffs just yesterday. Mary Erdos, your colleague,
Speaker 6: was on stage talking about how your firm has created
Speaker 6: a quote unquote war room that's looking at each of
Speaker 6: these executive orders as they come in, trying to assess
Speaker 6: what they mean for the bank and I imagine for
Speaker 6: your clients.
Speaker 8: Yeah, yeah, so we always I mean may be a
Speaker 8: bad word, but we always this is a real time,
Speaker 8: full thing analyzing four clients, four communities for a bank
Speaker 8: and we get a million quests stuff like that.
Speaker 1: Look, I look at tariffs.
Speaker 8: They are an economic tool.
Speaker 5: That's it.
Speaker 8: They're an economic weapon, you know, depending how you use
Speaker 8: it and why are using stuff like that? And you know,
Speaker 8: people argue is inflationary and non inflationary. I would put
Speaker 8: in perspective if it's a little inflationary, but it's good
Speaker 8: for national security, so be it. I mean, get over
Speaker 8: it national security. Trump's a little bit more inflation, but
Speaker 8: I think it really the question is how they get used.
Speaker 8: Can they be used to bring people to the table, yes,
Speaker 8: is there some unfair trade, yes? Is there some state
Speaker 8: owned subsidies?
Speaker 5: Yes?
Speaker 8: You know, is the president to use that way in
Speaker 8: as team? Yeah?
Speaker 4: So yeah, he says, get over it?
Speaker 1: Well be it? Really?
Speaker 3: What is he's singing a very different tune because prior
Speaker 3: to this, nobody hated tariffs more than Jamie Diamonds. Just yeah,
Speaker 3: I don't even disagree necessarily with what he's saying. I
Speaker 3: don't say get over it is the correct opinion.
Speaker 2: I think very easy for a billionaire to be like
Speaker 2: super easy for him to say, you'll be fine.
Speaker 3: My response would be, yes, there's a national project here,
Speaker 3: and part of any tariff strategy will also be making
Speaker 3: sure that prices don't massively increase.
Speaker 1: That's what a politician to say.
Speaker 3: But it's ludicrous for somebody like him to change his
Speaker 3: tune so quickly on tariffs, especially speaking of freaking Davos.
Speaker 1: Yeah, the whole Davos thing. I can't even believe they
Speaker 1: continue to do it, you know, even after all the
Speaker 1: memes and I very useful everything, of course.
Speaker 2: I mean those interviews like that with Andrew ross Orkin
Speaker 2: that's where we got that Alexander Wang interview as well,
Speaker 2: And yeah, they always say a lot of very revealing things,
Speaker 2: and I think it's important to like listen and take
Speaker 2: them out there.
Speaker 1: You're not wrong just for them. I'm like, you have
Speaker 1: no self awareness. It's like, you guys should lock yourself
Speaker 1: back in bohemian grove and do this the proper way.
Speaker 1: You know, wear masks. Don't talk to anybody else on
Speaker 1: a microphone. Yeah you should.
Speaker 2: I mean it's a sign of how much they feel
Speaker 2: that they've conquered the world. They're like, we can just
Speaker 2: do this dow in the open. We can just tell
Speaker 2: you fools what we're up to, and like the way
Speaker 2: we're going to shape the entire world. And I mean
Speaker 2: to a large extent, who can say that they're wrong,
Speaker 2: Like look at the way that oligarchs have completely bought
Speaker 2: the US government and are operating it to their own ends.
Speaker 2: And you understand and you also see, I mean, I
Speaker 2: think you're right about Jamie Diamond, who even before the
Speaker 2: election had actually really shifted the way he was talking
Speaker 2: about Trump. Previously was huge Trump critic, democratic donor all
Speaker 2: that stuff. And you know, after seeing the first Trump administration,
Speaker 2: we're like, oh, well, he gave rich people a giant
Speaker 2: tax gut, it wasn't so bad. He kind of changed
Speaker 2: his tone and became much more comfortable with the Trump administration.
Speaker 2: But the whole tenor of the discussion on inflation has
Speaker 2: really shifted a lot, because obviously, both in the midterms
Speaker 2: and in the presidential election, I mean, voters said their
Speaker 2: number one issue is inflation. And you can understand why
Speaker 2: because having this huge spike in food and fuel prices
Speaker 2: really is difficult for people who are already living at
Speaker 2: the at the ragged edge and struggling to be able
Speaker 2: to put it all together, especially with the cost of
Speaker 2: living crisis in general, how expensive housing prices are, et cetera.
Speaker 2: And you know, the Trump campaign really focused on, Hey,
Speaker 2: we're going to be the ones who can bring prices down,
Speaker 2: and the Biden administration failed you with.
Speaker 4: This, et cetera, et cetera.
Speaker 2: Now that they are taking office, there's a bit of
Speaker 2: a different a bit of a different tone that is
Speaker 2: being struck. Jd Vance was pressed on this by Margaret
Speaker 2: Brennan on the Sunday Shows.
Speaker 4: Let's take a listen to that. You campaigned on lowering
Speaker 4: prices for consumers. We've seen all of these executive orders,
Speaker 4: which one lowers prices.
Speaker 9: We have done a lot and there have been a
Speaker 9: number of executive orders that have caused already jobs to
Speaker 9: start coming back into our country, which is a core
Speaker 9: part of lowering prices. More capital investment, more job creation
Speaker 9: in our economy is one of the things that's going
Speaker 9: to drive down prices for all consumers, but also raise
Speaker 9: wages so that people can afford to buy the things
Speaker 9: that they need. If you look at our of executive orders, Margaret,
Speaker 9: prices are going to come down, but it's going to
Speaker 9: take a little bit of time. Right that the president
Speaker 9: has been president for all of five days, I think
Speaker 9: that in those five days he's accomplished.
Speaker 1: More than Joe Biden did in four years.
Speaker 9: It's been an incredible breakneck pace of activity. We're going
Speaker 9: to work with Congress. We're of course going to have
Speaker 9: more executive orders, and we're going to try the way
Speaker 9: your lower prices is, do you encourage more capital investment
Speaker 9: into our country?
Speaker 2: So fair enough that Trump has only been president for
Speaker 2: five days and does not have you know, complete control
Speaker 2: over pricing of all things, let alone you know, eggs
Speaker 2: wi you're about to talk about specifically. But I think
Speaker 2: they are making a bet soccer. I think they've always
Speaker 2: made a bat. It just wasn't really fore grounded that
Speaker 2: people will tolerate some price increases if they can convince
Speaker 2: them that it's in the overall national interest.
Speaker 1: I think that's true.
Speaker 2: I think that's their political I don't actually think that
Speaker 2: that is true, you know, but they're economic policy. The
Speaker 2: two main planks are, you know, the deportations plus tariffs.
Speaker 2: You will readily admit, anyone who's being honest will readily
Speaker 2: admit that both of those things are likely, at least
Speaker 2: in the short medium term, to lead to price increases,
Speaker 2: But they're betting that they can tell a story about
Speaker 2: that that will make people be like, I can manage
Speaker 2: this and it's quote unquote worth it.
Speaker 3: I mean, I do think that there is an element
Speaker 3: to it which is true. So when I go to
Speaker 3: Japan and there is a guy who's driving the taxi
Speaker 3: who the taxi driver is wearing white gloves in a suit,
Speaker 3: and it's a profession, and he takes a lot of
Speaker 3: pride in that it's not something that is a stepping
Speaker 3: stone to go doing something else. That guy gets paid
Speaker 3: a lot more than any taxi driver in America. It's
Speaker 3: a good experience for him, and for me it's going
Speaker 3: to cost more. And so I think that's one of
Speaker 3: those things where I've been thinking a lot in terms of,
Speaker 3: like you said, with prices, we have two visions of
Speaker 3: Americans society. We can be the one where price is everything,
Speaker 3: and that means that we're all widgets, We're all consumers.
Speaker 3: The price of each individual good itself is the sole
Speaker 3: determinant of my happiness. The price of my stock indicts
Speaker 3: going up twenty two percent as opposed to seventeen percent
Speaker 3: is far more important than whatever might be paid in
Speaker 3: that interim.
Speaker 1: Five.
Speaker 3: But the Trump administration is offering basically an economic nationalist
Speaker 3: view of which almost every other country in the world adopts,
Speaker 3: from Germany to Japan to any European welfare state, which is, yeah,
Speaker 3: there's going to be some stuff that's going to be
Speaker 3: more expensive.
Speaker 1: Some people, though, will get paid more, we will.
Speaker 3: Live in a society in which we feel as if
Speaker 3: we're all a little bit more together.
Speaker 1: I mean.
Speaker 3: And this is both actually a leftist and a rightist
Speaker 3: kind of solution to this, like centrist neoliberal view of GDP.
Speaker 1: So I basically agree with you.
Speaker 3: They are going to need to be careful because what
Speaker 3: I think the Trump administration's greatest danger is was from
Speaker 3: the first administration. It was the feeling chaos, lack of process,
Speaker 3: and things being out of control. And so right now,
Speaker 3: one of the things about Trump which is great politically
Speaker 3: but necessarily bad governmentally, is he'll just throw things at
Speaker 3: the wall. So, for example, in that speech yesterday before Congress,
Speaker 3: he said We're gonna put tariffs on Taiwan. Now, look, philosophically,
Speaker 3: do I think Taiwan should pay more and all it, Yeah, definitely,
Speaker 3: but you know we're also doing this at a moment
Speaker 3: where nvidio stoctors went bound down by seventeen percent. What
Speaker 3: if it causes a market massive stock market crash? And
Speaker 3: what I would argue is worse is just throwing things
Speaker 3: out there all the time, which can be great from
Speaker 3: a negotiation perspective, as we saw with Columbia or whatever.
Speaker 3: But if you have chaos where things are constantly yo yoing,
Speaker 3: like back and forth and back and forth, and people
Speaker 3: don't feel as if there's a coherent agenda, then of
Speaker 3: course they're going to default to well, hey man, you know,
Speaker 3: my prices are going up and I don't even feel
Speaker 3: as if I'm getting anything.
Speaker 2: Well, and that's that's the piece, because what you are
Speaker 2: articulated is a at least coherent worldview of you don't
Speaker 2: want prices aren't going to be every and that is
Speaker 2: the way our society is structured right now. Like you
Speaker 2: are more of a consumer than you are a citizen,
Speaker 2: right absolutely, and all. I mean that's the way antitrust
Speaker 2: regulation was reinterpreted to be. You know, as long as
Speaker 2: people are getting lower prices than there's no concern about
Speaker 2: these giant monopolies. They're only to the good. That has
Speaker 2: been the market logic. The view you explain is, well, know,
Speaker 2: we're going to raise prices on certain things, but you're
Speaker 2: going to have a higher wage. The problem is that,
Speaker 2: especially now in this trump you know, in this iteration
Speaker 2: of trump Ism, with Elon Musk really running the show
Speaker 2: in a lot of respects, that piece about the wages
Speaker 2: is I mean, that's missing because these are people. I
Speaker 2: mean Elon Musk literally wants to get rid of the
Speaker 2: entire natural labor relationationspoort right. He wants to be able
Speaker 2: to bring in h one b indentured servants to undercut
Speaker 2: American wages.
Speaker 4: The Treasury Secretary Scott.
Speaker 2: Bessant, who just got confirmed, says he doesn't believe in
Speaker 2: a minimum wage.
Speaker 4: At all whatsoever.
Speaker 2: The tariff the program that has been like sort of
Speaker 2: theoretically floated of we're going to get rid of income taxes,
Speaker 2: but we're going to make up for it with tariffs
Speaker 2: or consumption tax potentially that is wildly regressive, That is
Speaker 2: going to take more out of people's paychecks. Who are
Speaker 2: you know, working class and middle class et cetera. You know,
Speaker 2: so that's that's the part where it really doesn't work.
Speaker 2: You can't spike prices and people are still getting exploited
Speaker 2: and have no labor power and have low wages and
Speaker 2: you know, getting like screwed and worked harder and harder
Speaker 2: with lower and lower returns, and housing prices are going up,
Speaker 2: et cetera. You can't those two pieces politically, They're not
Speaker 2: going to work ultimately in the long term. So if
Speaker 2: you're going to invest people in this totally different conception
Speaker 2: of society of Okay, prices aren't everything. We have strategic
Speaker 2: and national goals, and we're going to prioritize your wages,
Speaker 2: that piece has to be there, Like people have to
Speaker 2: feel like their wages are going up. And I see
Speaker 2: much evidence in the other direction that what the actual
Speaker 2: priority is is making it easier to fire striking workers,
Speaker 2: making it easier to bring in H one B and
Speaker 2: H two B indentured servants to undercut American wages in
Speaker 2: these various industries, et cetera. So that's I mean, this
Speaker 2: is kind of like the Steve Bannon versus Elon Musk fight,
Speaker 2: because Bannon's vision is much more like the one you articulated,
Speaker 2: and that is not Elon Musk's vision.
Speaker 1: That's part of the issue.
Speaker 3: What's the fundamental tension within Doze, within Elon, within the
Speaker 3: entire Trump administration. I would even say between JD and
Speaker 3: Donald Trump's coalition. If you look at all of these people,
Speaker 3: Jdvan I will not speak for him, I would never
Speaker 3: dare to. I'm just saying, like I interact them. I've
Speaker 3: interviewed him many times, and in those he's like this,
Speaker 3: that would I would think is largely the vision that
Speaker 3: he would articulate to you. But Donald Trump also is
Speaker 3: a person of a big coalition, and with Elon, I mean,
Speaker 3: for example, there are already signs of huge fights. So
Speaker 3: I don't know if he saw this yesterday, but one
Speaker 3: of the things that Trump said, which has really thrown
Speaker 3: a wrench into all these reconciliation arguments, is he says
Speaker 3: he will not sign a bill that cuts a single
Speaker 3: penny from Medicare or Social Security. And he says that
Speaker 3: at the very same time that Elon is tweeting about
Speaker 3: massive entitlement fraud and about how there needs to be
Speaker 3: a serious review and a rethink. We've seen this also
Speaker 3: in the OMB and their own theories is like about
Speaker 3: what we want out of VISA like H one, BH
Speaker 3: two B, what all of that will look like. I mean, really,
Speaker 3: I'm fascinated to see when the next real immigration bill
Speaker 3: comes across because right now all ICE operations are currently
Speaker 3: about people who are criminals, Like we haven't even talked
Speaker 3: about people who are here illegally. But beyond that, even
Speaker 3: bigger question is like, well what about the legal system,
Speaker 3: like how many people are being l It's a literally
Speaker 3: zero sum number in terms of you know, one hundred thousand,
Speaker 3: two h thousand, three hunred thousand and one million where
Speaker 3: we currently are.
Speaker 1: What's the number, what type? You know?
Speaker 3: What is it going to be more H one? But
Speaker 3: we're going to increase the allotment, right that would be
Speaker 3: a huge substate to the technology industry. So I'm very
Speaker 3: curious to see how that all comes out. And that's
Speaker 3: what I mean about the danger here for Trump is
Speaker 3: the other problem is that the market does not reward
Speaker 3: anything that I am saying, the market.
Speaker 1: Only rewards short term gain.
Speaker 3: I mean, even look at this whole end video thing,
Speaker 3: even the idea oh in video is stocketting. Yeah, in
Speaker 3: Vidia's back to where it was in October Okay, you know,
Speaker 3: so the trillions and trillions of.
Speaker 1: Dollars of value have been created.
Speaker 3: It could drop one hundred percent, it would still be
Speaker 3: up from where it was a while ago. My point
Speaker 3: is that these guys have to live and die and
Speaker 3: sweat by the quarter, where a nation should not be
Speaker 3: governed that way.
Speaker 1: And the problem that we have.
Speaker 3: Is that all of our elites are currently governed on
Speaker 3: the basis of this, like quarter by quarter, stock market
Speaker 3: by stock market profit. I mean even right now there's
Speaker 3: a discussion and a fear in the markets. They're like,
Speaker 3: are the days of twenty two percent a year over
Speaker 3: your growth in the s and p five hundred over?
Speaker 3: I'm like, okay, so what Like, I know this is
Speaker 3: very privileging to say, but like, okay, that's an abnormal thing.
Speaker 1: The historical average is like eight percent. If it goes
Speaker 1: to twelve, so be it.
Speaker 3: There's some you know, there are a lot of reasons
Speaker 3: for that, and that's why I just articulate. I think
Speaker 3: it's going to be very very difficult though for Trump,
Speaker 3: and like I said, all of the incentive monetarily behind
Speaker 3: him and really behind the entire American elite is to
Speaker 3: think in this quarter by quarter theory. And so if
Speaker 3: you get a situation where you have higher tariffs and
Speaker 3: you have big corporate giveaways and all this, and you lose,
Speaker 3: you know, like you said, the Bannonist argument here, which
Speaker 3: has a coherent view of immigration, restriction of higher wages,
Speaker 3: and is obviously diametrically opposed to.
Speaker 1: A lot of what these tech guys want. That's going
Speaker 1: to be the big fight.
Speaker 3: And if you have a mix, you actually end up
Speaker 3: getting the worst of both worlds. And I think that
Speaker 3: that's a huge risk right now for Donald Trump in
Speaker 3: this administration.
Speaker 4: Yeah, where you end up with low wages and high prices.
Speaker 2: And I mean, based on the way you know, Trump
Speaker 2: sided with Elon on this big H one B fight,
Speaker 2: that seems to me very much the direction that they're
Speaker 2: heading in. Let's talk specifically about egg prices, because this
Speaker 2: is this is really important for a variety of reasons.
Speaker 4: Can put this up on the screen.
Speaker 2: So the cost of eggs has dramatically chirocketed Business Insider
Speaker 2: is saying they might be expensive forever. They're saying it's
Speaker 2: not just bird flu that's causing egg prices to soar,
Speaker 2: although that is a significant part of it so according
Speaker 2: to Business Insider.
Speaker 4: I thought they were just insider. Now they went back
Speaker 4: to Business Insider, are.
Speaker 1: They I don't know.
Speaker 2: I guess I always thought Business Insider was better than
Speaker 2: Insider anyway, So if they made the change back, I think.
Speaker 1: That was the right.
Speaker 3: That's a fascinating study this company in the digital media landscape,
Speaker 3: like what they've turned it.
Speaker 1: But that's all.
Speaker 4: Yeah, she's completely paywild. I don't know. They irritate me,
Speaker 4: but whatever.
Speaker 2: The cost of a dozen grade A large eggs hit
Speaker 2: four fifteen in December, per the Bureau of Labor Statistics.
Speaker 2: That's up from two dollars and fifty one cents a
Speaker 2: year ago. Average price of eggs has not been below
Speaker 2: three dollars since June. Hasn't been below two dollars since
Speaker 2: the start of twenty twenty two. We're all in uncharted territory, said,
Speaker 2: I love this job title, a global trade strategist at
Speaker 2: Eggs Unlimited, a Californian based explier who knew that was.
Speaker 4: Even a job.
Speaker 2: He added that the industry had lost twenty six million
Speaker 2: birds since October, more than seven percent of the total flock.
Speaker 2: That's because of bird flu. It seems as bad as
Speaker 2: it's ever been, he said, And the producers don't really
Speaker 2: have a recourse who can put this next piece up
Speaker 2: on the screen, just with regards to the bird flu
Speaker 2: piece of this. So we keep getting really bad news
Speaker 2: about the spread of bird flu. You know, when this
Speaker 2: was originally detected, I think first in a herd of
Speaker 2: a herd of cows in Texas, there was an opportunity
Speaker 2: to really crack down and isolate the strain and stamp
Speaker 2: it down.
Speaker 4: The Biden administration, their.
Speaker 2: Egg secretary is very pro business, very tied in I
Speaker 2: think used to be like a dairy lobbyist, and they
Speaker 2: didn't want to disrupt people making money, so they did
Speaker 2: not take the steps early on, and now you have
Speaker 2: this massive, you know, nationwide spread that is leading to
Speaker 2: these flocks.
Speaker 4: Having to be killed.
Speaker 2: I know that they in Georgia they shut down all
Speaker 2: poultry related activity, so you know, eggs and chicken just
Speaker 2: completely shut down. Georgia is a major producer of both
Speaker 2: of those things. The latest development here is that you've
Speaker 2: had the first outbreak of a different rare bird flu
Speaker 2: in poultry that was detected on a duck farm in California.
Speaker 2: That's according to the World Organization for Animal Health Authority
Speaker 2: said the discovery of this one is called H five
Speaker 2: and nine bird flu in poultry came alongside the detection
Speaker 2: of the more common five and one strain all the
Speaker 2: same farm in is it pronounced Mercid County, California.
Speaker 4: I'm not sure, I do not know.
Speaker 2: Almost one hundred and nineteen thousand birds on the farm
Speaker 2: had been killed since early December. That's the first confirmed
Speaker 2: case of this H five and nine in poultry in
Speaker 2: the US. And my understanding is the reason that this
Speaker 2: particular strain is even more concerning is because it is
Speaker 2: closer to being able to make the jump into human beings.
Speaker 2: And you know, that's what's really feared, is that because
Speaker 2: you have such widespread, you know, infection rates both among
Speaker 2: dairy cows and among bird flocks, and you have had
Speaker 2: farm workers who have come into direct contact who have
Speaker 2: been sickened as well in some other people who you
Speaker 2: know were sickened from other reasons. But in any case,
Speaker 2: you worry that your a mutation away from this being
Speaker 2: able to spread readily among human beings. And you know,
Speaker 2: so that's the sort of concern regarding the pandemic. The
Speaker 2: concern here regarding inflation is obviously that they don't have
Speaker 2: it under control. This will impact all kinds of different
Speaker 2: food prices, but specifically right now we really see a
Speaker 2: massive impact in terms of eggs.
Speaker 1: Eggs is like gas.
Speaker 3: It's one of those things that everybody sees every week.
Speaker 3: You either drive past it or you are at the
Speaker 3: grocery store.
Speaker 1: And you're like, what, what'll that say?
Speaker 3: Everyone's got the story right now of the sign at
Speaker 3: the grocery store that's like, due to an avian bird
Speaker 3: flu pandemic, you know, our egg supply is currently limited.
Speaker 1: I experienced. I was, I was at Whole Foods. I
Speaker 1: don't normally shop at Whole Foods.
Speaker 3: I was buy it and I walked in and I
Speaker 3: was like, oh, I want to what the price of
Speaker 3: eggs right now is. So I walked over and the
Speaker 3: Vital Farms pasture raised eggs are going for one dollar
Speaker 3: an egg.
Speaker 1: It was like eleven sixty nine a dozen. Keep in mind,
Speaker 1: this is.
Speaker 3: Like buying you know, the most expensive gas or whatever
Speaker 3: what is it called, like premium gas, but still, I
Speaker 3: mean twelve dollars as there's a lot of money, and
Speaker 3: you know, I think, what's the average price of eggs
Speaker 3: right now is like two three box.
Speaker 4: It says four fifteen. Wow, four fifteen.
Speaker 5: Yeah.
Speaker 2: I checked it at my little local, like veryvery normal
Speaker 2: standard grocery store in King George County, Virginia.
Speaker 4: In the food line and.
Speaker 2: The pasture raised eggs there were eight dollars. So even
Speaker 2: in just like you know, a regular kind of place,
Speaker 2: not whole food.
Speaker 3: I only eat past raise eggs, and I acknowledge this
Speaker 3: from a position of privilege. But the cheapest I can
Speaker 3: find is like six ' ninety nine, and that's at
Speaker 3: Wegmans and or Trader Joe's.
Speaker 1: But that is a lot.
Speaker 3: I mean I remember paying not that long those like
Speaker 3: four bucks something like that in the beginning.
Speaker 1: I think they were only like three point fifty. So
Speaker 1: to see them.
Speaker 3: Double their price, not only that, but it means first
Speaker 3: of all, eating healthier as usual shouldn't be more expensive.
Speaker 1: Of course it is, right.
Speaker 3: But you also look at you know, there's families out
Speaker 3: there that buy them by what costco palettes you know
Speaker 3: that just buy eggs like that, and so a modest increase,
Speaker 3: especially if you have a bunch of kids, that's a
Speaker 3: lot of money that people are of.
Speaker 2: A card well, and it's one of the more affordable
Speaker 2: typically approaches absolutely, so you know impact there obviously eggs
Speaker 2: going all kinds of different things, and like you said,
Speaker 2: it is just kind of one of those benchmarkers of
Speaker 2: where things are at. And I think, you know, it's
Speaker 2: it's it underscores a variety of political risks here for
Speaker 2: the Trump administration, both in terms of food prices, which
Speaker 2: was a central promise of the campaign, and also in
Speaker 2: terms of you know, we don't know what's going to
Speaker 2: happen with the bird flu spread, and god forbid, we
Speaker 2: have another pandemic, both in terms of the death and
Speaker 2: just like, oh my god, the politics of that are
Speaker 2: going to be absolutely terrifying and horrendous.
Speaker 1: There would be no politics, just people would die.
Speaker 3: Like I'm pretty much convinced that there would be we have.
Speaker 4: No ability to have a national response.
Speaker 3: You would actually a pandemic, a plague like one third
Speaker 3: killer to actually shape up like any what's I don't
Speaker 3: know what the casualty numbers are on bird flu in
Speaker 3: terms of the number of people infect the death ratio
Speaker 3: or whatever, but you would need, seriously something that kills
Speaker 3: like thirty percent of the population for everybody to wear
Speaker 3: and I think rightfully to be honest, I mean, you know,
Speaker 3: if someone's been try and tell me what to do again,
Speaker 3: I'm like, we'll see.
Speaker 1: Well, you know, I got to see a lot of
Speaker 1: evidence
Speaker 2: Speak