💬 "Trump Enters 2024 Race, Fiscal Responsibility, Big Tech Austerity Measures, More FTX Chaos"

Podcast’s Essential Bites:

On Trump:

[8:25] DS: "I actually suspect now that what the Biden administration is trying to do is keep Trump the news. I think they actually want to provoke him. [...] CNN ran his entire speech, announcing last Tuesday, I think, for this reason."

[9:15] CP: "If Trump wins the Republican nomination, [...] he will lose the presidency. Because if you look at all of these exit polls that came out of these midterms, he's just so massively unfavorable. But that's not what's going to be litigated in the primaries, [where] it's just Republican on Republican and there are a non-trivial number of paths where Trump actually beats DeSantis. And I think that's very scary to the Republicans, who want to just move on and have a chance of actually consolidating power."

[16:41] CP: "The scary thing for Republicans, by the way, is Trump does a much better job than anybody else in getting his base activated. So the thing that all these polls get wrong, and I think they've consistently got wrong, and as a result have underestimated him, is they don't give him the credit [...] for being able to curate a fervent base of that 30 or 40% of America that will show up for him. [...] If moderate Republicans want to have a chance of winning, you guys have to figure out how to beat Trump in a ground game. Because if his base shows up, he has a decent chance of winning the nomination, but then you will lose the general."

On US Policy:

[28:36] CP: "If you look inside of what's happening in the US today, the cost of generating energy is effectively as cheap as it's ever been and as close to zero as it ever has been. And it's only going to get cheaper. The problem that we have is that we have all of these decrepit laws and infrastructure and regulatory capture, that causes us to always be in an imbalance. And as a result, we do all kinds of crazy things. We borrow enormous amounts of money to create subsidies. We go and we fight all of these foreign wars that don't make any sense. [...] My belief [...] is that the reason the IRA was so important is it is the most clarified piece of legislation we've seen, that essentially puts all forms of energy on a level playing field and has the chance to get America to permanent energy independence."

[29:31] CP: "If the cost of energy is zero, and we can abundantly create it in the United States, [...] we have energy to rebuild our supply chain much cheaper, so inflation gets under control, we don't borrow as much. We have a completely different lens on foreign policy, so that this interventionism and fighting over resources is much harder to justify. And we put the climate change language aside and we use energy independence as a form of national security, which gives us the courage to battle all these other cultural taboos that we otherwise have to say we agree with, even if they don't necessarily make any sense. [...] That one thing, if we accomplish in the next five to 10 years, has a chance to really change the course of the United States."

On Big Tech & Layoffs:

[1:01:16] DF: "I think there were two main drivers of the issue that Google, maybe Meta, maybe Twitter, prior to Elon's involvement, and really Silicon Valley as a whole, the bigger companies have faced. The first is the war for talent. The war for talent started [...] around 2004, 2005. Because prior to that there weren't as many grads coming out of undergrad with computer science degrees. I think 10% of grads in the Bay Area schools were finishing with computer science degrees. Today the number is like 60%. So around that time, the war for talent led organizations, particularly Google, down a path of offering more perks and benefits to their employees to create a workplace that was more competitive. [...] And then other organizations try and overdo it and push it even further. So this leads to both wage inflation across the industry, but it's also led to almost like the acceptance or the allowance for degrees of complacency."

[1:03:20] DF: "The other issue is just one of innovation. At Google, if you work on a new project and it doesn't work, there is no loss. You still have your job. [...] They'll give you bonuses if it succeeds, but there is no downside. [...] The lack of pain, the lack of risk, the lack of downside, the lack of having no safety net, and then falling through the pits removes so much of the incentive to succeed, and to drive and to innovate. And I think that's become part of the complacency problem that's caused larger organizations to simply say, let's throw more heads at the problem."

[1:09:33] CP: "A lot of people whisper in Silicon Valley, which is part of what the big companies should do, it's part of the positive game theory, is to not let these talented people actually leave. It's better to pay them $300,000 or $200,000, or whatever, and stay at Microsoft and Meta and Google or whatnot, than go off and  build a startup that could actually then disrupt them. And so it's a cost worth bearing, because it's actually [...] a blocker strategy."

On Twitter:

[1:15:00] DS: "There was an article in Compact Magazine a couple of weeks ago. The editor Geoff Shullenberger tweeted: The layoffs at Twitter are no different than what's happening across Silicon Valley. But because of the ideological antagonism of the professional left to Musk, they make clearer what's at stake: the collapse of a jobs program for surplus elites. [...] A quote from this article said: One of the biggest and least-talked-about social questions in the West is how to economically provide for our own modern version of France’s impecunious nobles: that is, how to prop up high-status people who can’t really do much economically productive work. [...] I think this is really hitting a nerve."

[1:21:15] CP: "When you look at Twitter, as an example, Bill Gurley had a really powerful quote, [...] which is when companies cut, they don't cut nearly enough, and they and they miss-estimate, and underestimate how resilient a company is. [...] When Twitter had 200 million MAU (monthly active users), they had only 1,000 employees. And so clearly at that point, they knew what they were doing. And now the business has increased in MAU by, call it, 50% to 300 million, but the employee base increased by 7.5 X. So clearly something is misaligned. [...] I think that the thing that frustrates a lot of folks that are leaving, or that are trying to throw bombs is they don't want Elon to be right. Because I think [...] if Elon is successful, he has uncovered this very uncomfortable truth."

[1:24:53] CP: "Let's just say that now Twitter goes to [...] 2,000 employees after this whole Google form thing. The great thing about the 2001st employee, for the 2,000 employees and for the shareholders is that that 2001st new employee is 100% aligned, because they're coming into something with eyes wide open. And I think that that's also an interesting thing that isn't getting enough recognition. He's putting out there what he stands for, this hardcore culture, irrespective of whether we think it's right or wrong, all the people that stay are voting that it's right. And as long as it's not breaking any laws, he's allowed to do that."

Rating: ⭐⭐⭐⭐

Additional Links:
Article: "Amazon’s CEO says more layoffs will happen in 2023" (The Verge, 2022)

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