Bond Rates Soar, The War With Iran (And China) Goes Economic, & Everybody Hates Data Centers

Key Takeaway

When a problem feels too large to solve—whether it is career disruption from AI or a personal setback—replace doom with a concrete question: “No bullshit, what would it take?” List the constraints, identify one skill or resource you can improve, and take one forward-moving action today. You do not need certainty about the future; you need the habit of building, learning, and adapting rather than standing still.

Episode Overview

Tom Billyeu and Drew examine rising US bond yields, Treasury intervention, tokenized dollars, and the limits of economic sanctions against Iran when China and Russia remain uncooperative. They also debate public resistance to AI data centers, the trade-offs of regulation and innovation, government-run grocery proposals, climate-policy disagreements, and the cultural mindset needed to sustain long-term competitiveness.

Full Transcript

Transcript of Bond Rates Soar, The War With Iran (And China) Goes Economic, & Everybody Hates Data Centers from Impact Theory. Auto-generated from episode audio; may contain minor errors.

Good morning everybody. Welcome to another episode of the Tom Billy Show live. It is wonderful to have you guys with us today. There is plenty going on if you care about economics at all. Treasury Secretary Scott Besson promises to collapse the Iranian regime through economic sanctions, but we're going to see about that because China has already blown him off saying they don't even recognize US Iranian sanctions and plan to ignore them. Bessant is also playing a very weird game of solo stealth yield curve control, at least from where I'm sitting.

And so far, it's not working as a 10-year bond is showing signs that it is ready to run. AI continues to struggle as data centers are rapidly becoming this generation's Marie Antuinet's cake. So, if you guys know that reference, it's getting weird out here. Speaking of incredibly weird, Mamani's Grocery Commasar says they're considering subsidizing the bodeas. Their subsidized bodeas will put out of business. All that and more. Welcome everybody. We've also got uh Impact Theory alumni by the way, Constantine Kissen and Steve Keane. They went headto-head on climate change.

Yeah, that'll be interesting. If you guys haven't seen that debate, it is a fascinating collision. It was something that when I was interviewing uh Keen, I didn't go into too much because I sort of knew what his whole shtick is. But it's interesting to see these two go back and forth about it. And YouTube, by the way, is now paying creators not to put their libraries on Netflix. It's going to get weird. It's going to get weird, but competition will be good for everybody. We will see what ends up happening in the streaming wars.

But first, let us talk about what's going on. On Wednesday, the US Treasury promised to double the size of its bond buyback operation for 10 to 30 year bonds. We're going to be going from call it two billion per operation or buyback at to at least 4 billion and I think it's probably going to go way more than that. Uh we'll get into why in a second. It's primarily covering the 10 to 20 and the 20 to 30year sectors to make sure that the long-term yields don't get too crazy.

So Bessant knows that if you don't keep an eye on the bond market, what's happening to the long-term rate of borrowing, you're going to have a problem in the economy. People have been saying for a long time, if you want to know what's going on in the Iran war, just look at what's going on with the 10-year. As that starts going above 4.5, things start to get crazy. We're now well above 4.5. Now, it is not a great sign in terms of the health of the bond market that there's going to need to be so much intervention or the Besson is signaling that there's going to be this much intervention.

Uh the announcement landed 2 weeks after Treasury had already published its quarterly buyback schedule and apparently this was designed to catch people who were trying to short the bond market. So, you can say what you want about Bessant, but he knows how this game is played. remember he was the guy that was partnered up with Soros when they broke the back of the um of sterling. So literally the British uh monetary system, they went in and knew how to bet against that in a way that would force them to try to save it.

They couldn't. It's wild. So Besson is a gunslinger that knows exactly how to play this game. he now finds himself on the opposite side of having to defend his own currency against uh people that would be doing the same thing that he and Soros did. So this is going to be a wild ride. Now the promise held rates down for about 6 hours. 6 hours. We saw the same thing with Japan. I don't know why these guys think that you don't have to change the fundamentals underlying things that you're going to be able to slather a layer on top of this without their first being some extremities required.

when Japan was actively holding its rates down successfully, uh they became the largest owner of their own debt. So they had over 50%, it's like 52, 54%, something crazy like that. Uh so absolutely wild. You've got to really undo the spot and let the money flow. Uh but after Besson's announcement, the 10-year closed down 5.7 basis points to 4.647%. The 30-year fell 9 to 5.196% but by Thursday uh Bessant despite being on CNBC saying operations could run past 4 billion per buyback uh and that his department was going to make the market the longdated securities uh were still surging.

So uh-oh telling people that you're going to quote unquote make a market sounds a lot like yield curve control from where I'm sitting. Now, admittedly, Besson did not give a specific target that he's trying to hit, which would give them something to really aim at and test to see how serious he is, but I'm going to bet that he has one in mind. Now, yield curve control requires the central bank to get on board. The problem is right now Worsh has not said that he's going to play ball.

In fact, I would say he's sort of moving in a different direction. I don't know if Besset knows something that we don't. That's sort of been my long-standing belief is that what War is saying now and the way that Wsh is acting now is more to establish that the Fed is independent of the government. Uh but we'll see. I just cannot imagine that Bessant and Trump would have gone after this guy if he wasn't privately saying the things that they needed to hear. Now for history buffs, the US is no stranger to getting the Fed on board with yield curve controls if that really is what Beston is up to.

The Fed straight up ran yield curve control uh from 42 to 51 to allow us to inflate our way out of our World War II debt. So, we certainly are no stranger to playing this game. Japan obviously has been running yield curve control for a while now. So, we have a case study that's modern of what this can look like. But man, in both cases, it's going to require the central bank to print money basically without limit if you want to keep yields suppressed. And the Treasury can't print.

So, what is Bessant doing? Is he running the strategy because he is convinced that WSH is going to join him and he's going to do the print run or is he trying to pressure WSH or is this something else entirely that we can't map right now? We don't have enough information. I don't know. But so far, uh, as I said, WSH is moving in basically the exact opposite direction. He's not giving forward guidance out of the FMOC statements. uh he's held rates steady through seven meetings and he's said that he wants the balance sheet to get smaller.

Now none of that is in line with yield curve control. So we'll see. Now so far the market is reacting exactly like that. They are not impressed and they clearly are in the mood to test the Treasury's resolve and quite frankly ability to get the Fed on board so that they can actually print to actually pull this off. The rally that Bessant's announcement uh managed to garner, as I said, did not last very long. The 30-year was trading back around 5.235% at last check. Who knows where it's at right now?

I haven't looked at it this morning, but uh that is not the direction that he wants to see it go in. Twothirds of 392 respondents to Bloomberg's Markets Pulse survey said that they expect the tenure to be above 5% before year end. Damn. So, that would be a big move. Now, were they factoring Besson's promises? I actually I'm not sure if that poll was done before or after Besson's announcement. So, we'll see what ends up holding. But that is a big deal. And to make things even more fun, our debt has crossed $40 trillion.

That happened on Wednesday. Interest payments will be well past a trillion. I think it's like 1.4 trillion this fiscal year. Uh so that's not great. Besson has told the bond market that he's going to keep buying. Uh he hasn't set a ceiling, but don't worry. I have a feeling the traders are going to find that ceiling for him as they will push and test and keep going to see just how far we're willing to go. And there are going to be plenty of people trying to short the market.

Yeah, it's going to be wild. So, it'll be a battle between Bessant trying to catch people out that are shorting the market uh to burn a couple hands and get people to be wary of touching the stove. But given the state of the economy, given what the US is going to have to do to keep meeting these deficits, people know that the money printer going to go burr. And when you know that, you're going to demand if you want me to hold long-term debt, you're going to have to pay me for that privilege.

So, this is going to get weird. We'll see just how far this has to get pushed from a money printing perspective, but there are no free lunches. There are no free lunches. There's no free groceries either, Drew. As much as some people would like us to believe that there are. So, you're going to push the pain somewhere else. Japan learned, sorry, one more thing. Japan has learned that when you try to do yield curve control, first of all, you need a culture of people that are willing to get in line with that.

And then second, outside forces will eventually force your hand. Now, they got away with it for almost 30 years. Uh, but given where we're at economically right now, there's no universe in which we're going to be able to suppress yields for 30 years. That would be insane. As of right now, the 30-year yield is at 5.26. Um, as of this morning opening, Peter Schiff had the great tweet about this. I kind of want your response to this. Secretary of the Treasury Scott Bessant said the free market is mispricing long-term bond yields.

So, he wants to use the superior judgment and power of central government planners to correct the mistakes of capitalism. Good thing we didn't elect a Democratic socialist president. Yeah, it's wild, man. It's wild. You've you've talked about this for a while. Like, do you like your socialism uh red or do you like your socialism blue? Yeah, this is crazy. This is people that think that they're going to outsmart the markets. The bad news is you really can influence them in the short term. you can cause all these distortions.

Uh you can drag out the decline. And so that's the strategy everybody's running. It is weird being my age and watching all of this happen. It decline sucks, man. Now, if you're growing up in the middle of it, you don't have a sense of the decline. You have the malaise, but there in some ways that's less brutal than knowing how rad it was. And now it like, oh yeah, we're just declining. And uh China is not settling for that. And China has from an a cultural perspective.

They've got so much belief in themselves. That's the thing that hurts me. I'm sitting back watching going, "Okay, China believes in itself and Islam believes in itself. America doesn't." And so you end up being the one that's like you're going to suffer because culturally you just don't believe in yourself anymore. And so that is very sad. One of the places that this is really showing up that lack of belief is in AI. The data center revolt. Yeah. Is pretty wild. I don't know where you want to go next.

By all means, we can go anywhere. But I got one more thing with this cuz it seems like this is just a game of hot potato. Like everybody just wants the economy to do well now. The next president, the next person will kind of deal with it. Do you think that's what's happening? cuz this intervention seems like a band-aid, but it doesn't seem like it's actually going to solve the problem. It's not going to solve the problem at all. What this is going to do is allow them to mask the decline for a little bit longer.

Uh but the problem is that you're just adding a whole another problem, which is you're putting yourself in a fiscally more dangerous situation every time you buy back your own debt. because now you've got this stuff sitting on the balance sheet and you are gonna have to grow your way out of it somehow. And so Trump's strategy seem the only way to map it is to go, "Okay, Scott, just buy me time. Buy me time, man. This AI thing, it's really going to do its thing.

It's going to run. Uh we're I'm going to give you what you need on the appetite for debt perspective by getting control of the future of crypto as this is where people have to separate like people map the word crypto to like oh there's all these scams and all that. Crypto is a um a technical thing. It allows money to be digital. Once you understand that it allows money to be digital, uh then it's like, okay, forget whatever weird notions you have in your head. As we move forward, we're on these antiquated systems right now.

We're going to be migrating to the world is going to migrate whether the US gets involved in that or not. The world is going to migrate digitally. So Trump is saying something akin to or probably Besson is driving this if I'm honest, but we're going to drive appetite for the debt, the US debt by forcing as many people as we can to back their Euro dollar to back their debt with or their stable coins with US debt. And so as other countries try to tokenize and that's you you have to keep that one in mind when as they try to tokenize their dollar denominated debt then they're going to have to do it according to US standards and so that's going to give the US control.

That's what the Genius Act was all about. So them trying to get a hold of like we've got to lead this otherwise we're going to lose even more control of the Euro dollar market. Uh, we've talked about the Euro dollar before, but for people that don't know, Euro dollar doesn't have anything to do with Europe. It just means dollars that are controlled in an intentionally opaque way by foreign countries. So foreign countries with whatever banking regulations they have, those foreign countries can spin up on paper basically conjured US dollars um without any US regulatory oversight.

And so Bessant sees an opportunity through the Genius Act to get control of some percentage of that. the percentage uh if you really run it out it's probably somewhere the the best prognostications this is not me making this up this is what I've read is somewhere like between six and nine 10% of that market but it's a gigantic market it's like 27 trillion or something absolutely massive digital so they see an opportunity to be like oh cool that's a market for people to have to use a stable coin that's backed by US short-term debt basically and so we're going to keep having this engine of debt.

People are going to want it from an appetite perspective. And it's interesting and admittedly right now I'm sort of putting things together in my head. May this may not be what they're planning, but it's an interesting hypothesis for me to watch over time to see if this actually plays out. What Besson is doing right now, he's not necessarily changing the amount of debt that the Treasury is holding, but he's changing it from long-term to short-term uh because they obviously have to create new debt in order to buy the old debt.

So you're changing the duration without changing the amount. So until obviously money printing gets involved and you go full yield curve control. But um right now in the short term that's what he's doing. And so is that part of a move where it's like okay what we're trying to do here is get control of this um increase the appetite for the short-term debt so that we can control the yield by that mechanism by increasing the appetite by taking this 6 to 10ish% of the global Euro dollar market as it gets tokenized.

This is between now and 2030 as it gets tokenized that we're able to force them to back those tokens with short-term US debt. And now we've got that market will have plenty of appetite. So, let me take this long-term stuff where there's going to be less appetite, shift it over to the short term and get that appetite based on the natural transition to tokenized Euro dollar market. So, I won't have to pay the short-term stuff. It's just going to get shifted over to the Euro dollar people.

Correct. So, I haven't heard anybody else say that. So, I'm definitely nervous that I like I'm out out over my skis, but it would be interesting if that's really what's going on. Um, there's certainly logic from where I'm sitting now. Besset knows a lot more about the economy than I do, so it's possible he's like, "No, no, that's not even it. It's some other tangential thing that I don't know about yet." But, that would be an interesting play. You could certainly track the logic. Gotcha. I know we had the lady talk about I don't know if you want to jump into that or Yeah, play this clip.

She So, oh, I have her name written down somewhere. Let me pull it up. Um, okay. So, this is uh this happened at the Wyoming Blockchain Symposium. The woman speaking is good lord, I know I have her name somewhere. Uh, Caitlyn Long. She's the founder and CEO of Custodia Bank. All right. So, she's talking about the very thing that we've been talking about here. What is the what's going to be the knock-on effect of the Clarity Act? How are they going to leverage it? Just this week, we got an incredible announcement that I think a lot of folks did not fully grasp, but I was talking to uh someone who just left the Treasury Department and he confirmed confirmed it, which is that uh Treasury put out Genius Act regulations on the recognition of non USissued stable coins.

What does that mean? It means the Treasury Department is taking charge of what is allowed to be a so-called Euro dollar, euroyen, euro, euro euro yuan, right? Um, and for those of us who are financial market, um, I'll be interested to see uh, so I hesitate to say she's wrong about that, but I don't see how this is going to give anybody control over anything other than the Euro dollar. You're not going to be able to tell a Okay, let me I'm going to think out loud here.

The only way I could see that is in like a um sanctioned perspective because this is a foreign bank dealing with a foreign customer on foreign currencies from start to finish. So, Euroyen has nothing to do with the dollar at all. So, the only thing I could see is if they were saying, "Hey, listen. Um, you guys have to abide by our rules and therefore they have some sort of oversight where they could say, "Okay, um, anybody that's doing that thing with Euroyen or whatever, we're going to sanction it." But the direct control, this much I know the direct control is only over the Euro dollar.

And even that is only based on we're going to say if you're not doing it our way, we're not going to accept what you're doing. We don't technically control that. Right now, the entire Euro dollar market exists independently of the United States. We have not passed any sort of legislation whatsoever that would give us control over that. Some say that that I mean it must be on purpose otherwise they would have done something about it. Uh but it's very much one of those gray zones that people just sort of gets people to trade in dollars.

So it's Yeah. You think of it as the Euro dollar is the real debtbased um it's not piping somehow that's never landed for me. People will call it the plumbing of the financial system. It's really you it's the respiratory um breathing of the economy. That's the right way to think about it because the debt comes into existence overnight and then is zeroed out again in the morning. It's so weird. And so you get this creation of debt, destruction of debt, creation of debt, destruction of debt.

And it's happening in a 24-hour cycle. And the reason that you do that is that basically people have to settle accounts and all that stuff, but it's all just happening on paper. And so people will loan the money to do that cuz it's like the risk is so shortterm. But when people start to sense that something is wrong in the economy, the the amount of credit that people will loan overnight just starts shrinking. And so now all of a sudden it's like uhoh, you've got suddenly there's less oxygen in the system.

And so that's when people that are in distress, you realize they got way out over their skis. They're not as solvent as you thought they were. This is how um you know, a company like Bear Sterns or whatever can go broke and people start talking about the overnight paper and all that. This is that system. Uh so if people won't lend you money, now you're in trouble. now you don't have access to that oxygen and that's currently entirely outside the control of the US. So anyway, I would set aside this is all uh an aside about her saying the euroy yen, the euro whatever.

I I don't think that's quite true. I think that would only be true through a strong arm tactic. There wouldn't be like the sort of direct one to one. Anyway, back to what she's saying. It's people, we know that the the term euro does not mean European. means an an a a dollar issued offshore outside of the United States is called a euro dollar. A euro euro is a euro issued outside of the euro zone. Right? So basically these are tokenized fiat currencies issued outside of their home country and the US Treasury is taking charge of the recognition of the validity of these that is massive.

If you're study, if you're a student of the financial markets, you know that the Euro dollar market is as large as the domestic financial market. That's the off offshore dollar market. So when the US Treasury is taking control of what is recognized as valid, that is taken from the Fed. So what's really going on here is with the tokenization movement, the Treasury is taking power back over the US dollar, over the Euro dollar markets, and frankly over the US role in the financial system globally from the Fed.

And to put that into context when we were talking earlier about how antiquated the traditional system is and that the Fed's systems are themselves behind and part of the challenge with the Genius Act, if you've been watching, all of the other agencies have issued rules. One glaring exception, the Fed has not issued its rules yet. And according to the Genius Act, the all of the agency's rules were supposed to be final a couple of weeks ago. the Fed hasn't even issued theirs yet. So, there's a this dynamic going on between the Treasury Department and the Fed.

And that is really important because Scott Bessend is a big believer in tokenization. And he is pushing with the Trump administration the system towards tokenization. That is massive. That is not going to be reversible even if the Republicans lose the next presidential election. And it's going to mean that the Treasury Department is really going to be at the center of financial markets, which is historically what it had been. It's just only in the last couple of decades that it was really the Fed. But that pendulum is swinging hard towards Treasury, and that's really meaningful.

However, it also means a lot more volatility. I know we're going to be hear from OC Comproller Gould, and Jeeoff, you were talking about the durability of Wyoming's chartering authority. Both of us have cho chosen to stay in the state system. Part of the risk that those who go with the national chartering from the OC, which is what most in this industry have done, is that pendulum could swing pretty hard. So, we will see more volatility. But, uh, I'm excited about about Treasury taking all of that control back because we are now going to be a much more techforward financial market.

Well, certainly being tech forward is a very good idea. It's a must. It's going to happen whether we get involved in that or not. Um I am unnerved by how sort of anti- tech people are becoming because of AI because the initial thing that got crypto so much attention people burned into their psyche that oh this is all a scam. So there's like a lot of weirdness in that. Um, it's certainly fascinating when they pulled back to the wide shot and I know most people aren't looking at their phones, but when they pulled back to the wide shot and you could see you've got a bunch of bankers all in suits, ties or you know her sort of power dress and then you have one guy in t-shirt, jeans and a trucker hat, it's like spot the crypto guy.

Uh, so you know it's two very different energies colliding two different worlds. the old bank regulatory um apparatus. They largely, not entirely, but they largely don't want to see a move to crypto. They don't want to see the Clarity Act passed, which is different than the Genius Act, which has passed. They don't want to see the Clarity Act passed because that would allow the crypto industry to start paying out um interest. And so now bankers are like, "Well, how are we going to retain our customers?" It's like, "What the [ __ ] That's not our problem.

That's a you problem. Make a better product." And so we've been so browbeat over such a long period of time that we've really forgotten what it looks like when there's actual competition in industries and you don't have massive regulatory capture. He he said it a long time ago. So um I don't have it pulled for today, but there was literally a clip from uh Jamie Diamond who who just said that like how are we supposed to retain our customers? It's like what? Like I if there is somebody that can out compete you now you're just making an appeal to regulatory capture where you're going to say something like oh this is for the safety of people and no no you guys have been out over your skis so dramatically for so long with the most absurd banking regulations that put you so vulnerable to bank runs and all that and just being completely irresponsible and not even giving people the kinds of you know just a savings rate opportunity that would make sense.

And so now that crypto's coming along and saying, "Hey, we're going to give you we're going to do just what the banks are doing. We're going to take your money and we're going to invest it and we're going to get a return, but we're going to pay you more of that return because we're the upstarts and so we've got to um find a way to draw you in and so we're going to pay these bigger um upside. We're going to give you more of the upside." Now, there's risk involved with that and we've done so much to try to fake people out and think that there is no risk in all of this stuff.

Um, that we have somehow allowed ourselves to be convinced that we shouldn't have options with where we put our money. So, to me, that one is crazy. Uh, I want to see the Clarity Act get passed. I want to see crypto places be able to say this is the return that we offer. And if somebody offers a return that's too good to be true because they're taking way too big a risks, um, then that's on you. Like if you've got somebody that's paying just some outlandish number, uh you've got to do research.

But I'm very much not the biggest fan of the nanny state. So I know that there are going to be a lot of people that have push back on that one. But anyway, I think the banking sector is taking that call for safety so far just to control the industry and we have suffered from that lack of innovation now for so long. But just as she was talking about how it could be like a euroy yen, euro yuan, I think that's going to the fed is now taking a step back because the reason that the euro dollar market can exist is because of the fed ultimately because they have I don't know the rel when she said that I started doing some research on it like what's the battle that's happening between the treasury and the fed.

I don't understand it well enough to really go deep on it. My sort of highle analysis of where I'm at right now. The Fed only has control over rates. So what can the Fed do? The Fed can control rates. Uh the Fed can print money, but I the Fed isn't in control of the Euro dollar market. So like it's like their Fed like cuz every other every of these other nations, they also have a central bank. They they do, but this isn't necessarily a central bank phenomena.

This is regulated banks in countries presumably. But whatever the regulations are in that country, the banks are beholden to that and only that. But within those regulations, they can then spin up um call it accounting like spreadsheet dollars that aren't real, don't have to be resolved because that's not the way this system works. And so they can just create it out of thin air, destroy it out of thin air constantly. But it isn't going through their central bank. It's not like their central bank is printing dollars and that's how they do this.

So the banks are regulated. The banks will almost certainly have some relationship to their central bank, but it's not, at least at the level that I'm at now of my research, that is not a function of foreign central banks. It's a function of foreign banks. M um keeping up with economics. Um Scott Besson also said that he's dropping economic sanctions across the world actually because we just put one some on Cuba. We just put some on Iran and Trump also said that he's going to sanction anybody that works with them as well.

Um this is Scott Bessant talking on CNBC. do and and again we have asymmetric information and I'm not sure why oil has popped up on this because this for now for now and it it is at the president's discretion if we are doing the maximum economic pressure then that means that likely there will not be a large-scale kinetic restart but I would emphasize that is for now um and we we do have control of of the street, you you would have seen media reports that large amounts of energy are getting out and you know I think that we can continue doing that in in the southern lane and that you know I I think oil markets are misinterpreting what this economic pressure means.

The economic pressure means that we are going to all of our allies and this is going to be the greatest coordinated economic isolation in the history of the world and we are going to them and saying you are either with us or against us. You want this murderous regime to end. And if you insist on the doing business with them, either transferring money, buying their oil, they doing seaborn ship transferers, then the US Treasury and the US government, they will put its full might and force toward enforcing against you.

So it is time for our allies and the rest of the world to make a decision. And we are going to the squash the economy of this murderous regime which that will curtail their ability to project power through their proxies. Uh it will it will mean that they cannot pay the military and you know we have substantial inflation both food inflation and ordinary inflation in Iran. And you know what what we have seen you know I see lots of reports that said oh well this has never worked.

It does work because we have a combination. It is a one-two punch. We have the blockade and we are going to have the toughest sanctions in history. And I will tell you this will work. It worked in Venezuela once we put up the blockade. It is working in Cuba right now. And it is going to work in Iran and we are going to collapse this regime. All right, man. We'll see. Uh there's really two things here. So thing number one is what's going to be the world's reaction to the morality of this.

Uh thing number two is is it really going to work? And I am not optimistic on either side. So uh Cuba is still doing Cuban things and Iran has been doing Iranian things. We've been bombing the living [ __ ] out of them for months. Uh we've had economic sanctions on them for years. Uh we have said this very similar speech multiple times. Oh my god, the sanctions like we've never seen before, Drew. This is just going to be unbelievable. Uh, and then they've been fine and they keep blowing [ __ ] up and they're like, "Yeah, [ __ ] you kids." And we just have to make it to 2029 and we're going to get somebody other than Trump.

Hopefully we get somebody on the left uh and eat a bag of dicks. And so far, it has been a dick buffet. So, I'm not sure what the [ __ ] Like, these guys can keep like making big promises and we'll see. Listen, I talked about this before, but I know a guy that literally recently re-escaped. I don't know if he would characterize it as the first time he was escaping, but uh he was living here in the US, moved back to Iran uh a couple years before it all went um back into you know this uh situation and he got out and he was telling me he's like people are definitely more afraid of the regime than they are afraid of the bombs.

Uh, so it's entirely possible that people are really that kind of unhappy and despite the fact that these guys shot somewhere between 2500 and 50,000 people in the face, um, they'll rise back up. But, woo, I don't know, man. So, we'll see. I think it would take a lot for the IRGC to actually relinquish control. And if I'm right about that, and then what you see is just a humanitarian disaster, and then you see the world going, "Oh, yeah, nice." like these guys are the [ __ ] bullies.

They never should have gone into this war in the first place and now they're effectively starving people. Like come on. So that's going to get weird real fast. And then you also have um Russia still supplying Iran with munitions. So you've got Russia supplying Iran with munitions. Uh that that's what they're using to keep the problems rolling. So the only question becomes, well, can we starve Iran of enough money that they're not able to buy anything from Russia? Uh, can we styy Russia enough via Ukraine that they don't have the munitions to send to Iran?

Uh, can we keep China out of the mix long enough? I don't know that we can. Excuse [cough and clears throat] me. Um, sanctions sound good, but Russia has been under sanctions. Iran has been under sanctions. China has been under sanctions. And these economies are still moving. They're still making deals. They still have their allies that they're playing. Yeah. Especially China is either essentially tied for first or is the second largest economy in the world and they're telling you I don't care about your restrictions, not interested, not going to respect it.

We're going to do what we're going to do and everybody can [ __ ] off. Yeah. So that was just announced that they're announced that they do not recognize US sanctions against Iran and that China will comply with the economic will not comply with economic war warfare campaign initiated by President Trump this week. So, it seems like it's all talk at this point because we haven't seen anybody on the other side. None of the GCC countries have said anything. So, it's just Trump barking again. Yeah.

I mean, we're doing more than barking. I just don't know from a support perspective how long we're going to get away with the things that we're doing. And uh the reason that people are telling Bessant this doesn't work is you can grind people pretty far into the dirt uh without them crying uncle. And people will stay there. If you have a repressive regime, they'll stay there for a very long time. And especially if the world is divided and there are other people that will do business with you, there's only so much of a strangle hold that you can put on people.

Plus, the US's reputation the world over, just take Europe, take Canada, is like, we think that America is doing the wrong thing. And so, will we even be able to get the kind of compliance that we would need to put Iran in a true strangle hold when you've got Europe sort of dubious? You've got China actively dismissive. You've got Russia actively dismissive. Are you actually going to be able to put these guys in a strangle hold? And that's where I'm like, eh. Like you can choke somebody and make it pretty uncomfortable, but if you're not actually cutting the blood supply off to the point where they pass out, then you just look like you're choking somebody.

I mean it. Yeah. So this is one where it is we'll have to see how it plays out in the fullness of time, but I do not expect this to go smoothly. Gotcha. And yeah, data centers, people are hating them. Collapse is supporting fast. We have both left and right governors who both signed mental uh memorandums on them for pauses on them. Both Texas Greg Abbott and uh Josh Shapiro in Pennsylvania. It seems like across party lines both parties are declining in support of data centers.

And you kind of called it at the beginning of the show like this is kind of a a turning point with AI. Yeah, this this one is going to be deeply problematic. People need to understand that AI is an arms race. And if you understand AI instead of being an arms race and quite frankly the greatest innovation that humans have ever created, if you don't see it as that, and instead you see this as the wealthy are just going to get richer, that uh we already have a billionaire problem and AI is simply making the billionaires richer and it's going to take my job for me and I'm going to be left out on the street.

If that's the way that you're viewing it, and by the way, increasingly it is being viewed that way by both Democrats and Republicans. Both sides, the support for this is declining. Is this visible to people? Yes. Make that bad boy visible. [clears throat] So, if you have your phone out or you're watching on a screen, you're going to want to see this. Support across party lines for data centers just keeps falling. People would rather have a nuclear plant next to them than have a data center, which is wild.

And the AI industry is doing an absolutely god-awful job of letting people know what the benefits are. So, listen, right now it's contested. There are plenty of things where people can legitimately point to, you can legitimately say, "Listen, there was one place where they were using terrible uh like rinse and flush techniques." And so, they did um uh they contaminated the groundwater in one area. It's only happened once so far, but it did happen. So, people can certainly point to that. when you're using uh a very unfriendly uh water cooling technique, then the water peak water usage goes way up.

Now, it's you can compare it to things like golf courses and that you'll realize that the AI industry doesn't use that much water, but what they need are these really big peaks. So, there are times where they need a ton of water all at once, and so that can create issues in the local area. um if you go to dry water then you have these spikes in electricity. So there are real things that people can point to but there are also incredible things that people can point to on the other side which is areas uh I think it was in Lowden County where they have just an unbelievable number of data centers.

They've actually lowered people's property taxes with this. But going back to the populism of it all, if you're unable to get on the property ladder, you don't care about that. you just think that, hey, we've got more rich [ __ ] that are getting benefits from this. But the reality is these data centers are net taxpayers wherever you find them. There's been some propaganda where people are trying to say that they're not net net taxpayers. That does not um survive actually doing the research. So, these guys are net taxpayers.

So, you get them in your area, you're going to be kicking off a ton of additional tax revenue. These guys have just absolutely created booms in some of the towns that they've gone into, but nobody is telling that. Nobody's talking about the insane number of jobs that it creates as they build the data center, the increased number of jobs uh to maintain the data center. Nobody's talking about that. They're not talking about some of the just incredible amounts of cash flow that the areas are getting from the tax revenue from the data center combined with the job revenue.

So, they're creating all these incredible booms. Not to mention, what is AI being used for right now? It isn't being used to take your job right now. What it's being used to do is allow people to get way more um breakthroughs, a rate of innovation that is extraordinary. And if you're somebody that's learning how to use AI from where I'm sitting, if you know how to use AI, that is job security. Now, admittedly, if you're one of the people that is turning your back on AI and being what I call the new Amish and you're not going to touch AI, yeah, you're going to be in trouble.

that it's not going to be a good day for you. So when you look at just some of the medical breakthroughs and that's what I would if I'm the AI industry, I'm focusing people on the booming economy around data centers that are great for these towns. I would focus on the medical breakthroughs that are happening that are just absolutely extraordinary. We talked about David Sinclair, his lab, uh doing 160 years of research in like 2 months. Uh and that's only going to get faster. And then of course I think it's important that people face the reality that the AI arms race is a very real thing and you are in a battle with China for who is going to have AI supremacy.

And if we abdicate our role in that and just say we're not even going to pursue it, then you're guaranteed that China's going to take first place. There's nobody even close other than the US that can keep up with China. Right now we have a lead, but with this cultural energy moving in the wrong direction, we're not going to maintain that lead for long for sure. And so it is incumbent upon the AI industry to begin telling this story, which is true. Letting people know what's actually going on, letting people know, yes, there is bad, but there's far more good than there is bad.

And what does a future look like where this technology continues to develop? What kind of radical life extension are we going to see? If you're you've got somebody in your family that is um dealing with something like cancer, so there have been recent breakthroughs in cancer, the odds that that didn't involve AI is effectively zero. So you're getting these um new cancer treatments on the market that are individualized to a single person. Imagine that. That's not possible without AI. And so when you start looking into the future with protein folding and all the things that we're going to see be possible only because of AI, it's like this is the greatest period of innovation in human history.

But we're not even telling that story. It's it's very interesting because I think this is also uh we see this in capitalism a lot too when people have critiques of capitalism is that we always look at the best possible case scenario of the implementation of capitalist policies and not the terrible crony capitalism that we see much more rampant and I think with data centers we're seeing the same thing where yes in Quincy Washington a data center came in built a high school showed costs, lowered utility rates, invested in the local economy, and made everybody around that data center perform very well.

But we also have data centers who had backdoor meetings, who had tax breaks, who had incentives, who did not care about the locals, who imminent domain and moved them, who imposed these data centers into their community and said, "Deal with it." And data centers aren't this Amazon warehouse where there's a thousand workers. It's four people and a bunch of electric plugs. So, it's not like they're coming in and they're hiring the entire city. quite like that. But you can't you can't say it's going to it's bringing a bunch of jobs.

It's Of course you can. So I would look at I would need to run the data to give you hard stats, but you cannot run a data center of these size with four people. No way. Know how? It's not it's it's not it's not cracking 100. Duh. Um I I I don't know what the specific numbers are. Ryan, if you want to give us I have the number 50 to 200 jobs. Okay. Per what size of data center? You're going to have to do it based on size.

So a data center of X size equals 50. a data center of Y size equals 200. What size should I do? Uh you're going to have to like articulate the question to AI something like hey I'm trying to figure out um on a uh like per rack size how many employees a data center employer enterprise or massive AI focused campuses can scale up to 100 200. It's amazing. So if you've got uh 100 to 200 new jobs in an area because these are not being built in the center of New York City, boys and girls.

So this is somewhere where the tax revenue is going to be very meaningful. The number of jobs is going to be meaningful and the output of the thing is very meaningful. So to me the question becomes what is the actual downside? Not the fear downside but the actual downside that you're experiencing. So you've got peak water usage problem. you've got uh which they have solutions to which is dry cooling that moves the problem over to electricity. Okay, cool. Why haven't we allowed people to create their own energy?

These guys are willing to do it and they're being stopped by regulations. So you have people define create your own energy. So uh Microsoft is spinning back up three mile island and if they could get past the regulatory hurdle that would already be online. Um Elon Musk, same thing. I'm willing to build my own power centers. I don't think there's anybody you'd rather have building your power center than Elon Musk. He's the He's able to aggregate the best engineers the world has ever seen over and over and over again.

There's 10 companies making data centers though, and you talked about two of those entrepreneurs. So, the other eight entrepreneurs aren't pushing as hard as they are. So, even if they build a massive Hold on, let me make sure I understand like what the push back is. So, is the push back um data centers are foundationally flawed. This is never going to be a good idea. is the push back. Um, hey, these guys just aren't doing this in the right way. It's the right thing, but they're doing it in the wrong way.

Yes. Okay. So, if we take the right thing, wrong way approach. First of all, you can always do something better, so you'll instantly have me on your team. But I think we have two problems. One, they could certainly be doing it better. And honestly, space is probably the answer. Uh, and so Elon is pushing towards that. We'll see if it actually happens or if that is way harder to solve than uh we think right now. I don't know. We'll find out. Um, and then the other one is just it's already a lot better than people think.

And I would say it's already so far in the positive column that the fact that people are losing faith in this as rapidly as they are is a sign not that like this is a perfect thing and uh we're not telling that story. It's an imperfect thing to be sure. It takes resources. Sure. as every innovation has. Like I can imagine when we were building roads across this entire country that people were freaking the [ __ ] out about all the flora and fauna that was being destroyed and that we were going to ruin these pristine landscapes with streets going through it.

Guaranteed people were losing their minds about that [ __ ] when that happened. But then the reality is, oh, that's one of the reasons we become the biggest economy in the world is we solve the problem of being able to transport things relatively cheaply because we have all these incredible roads. And I'm saying once you understand the global importance to human life expectancy, to um making sure that you're not hacked, to making sure that you don't find yourself under the thumb of Chinese communist rule, authoritarian rule, uh all of those things, like it matters.

so much to the human species that the most freedom loving country in the world has a huge stake in being one of the top players. And so as we just like start talking about writing this stuff off, I feel the same way about this where the energy is about no no but let's look at what they're doing wrong. I'm just like yes 100% make it better. I love that. I'm glad that there's some energy towards that. But when you look at those rates of approval and the rate at which they are falling, I'm like, people have lost the plot.

I feel the same way about watching that decline as I feel about the rise of socialism where I'm just like, okay, hold on. People are not mapping the consequences of this. So, let's say that you win the argument and it's like, okay, these guys are doing everything wrong. Hit the pause button, moratorum, no more data centers. And now, China actually continues to develop this. And let's not even say that this becomes a uh thing where you're under their thumb. It just becomes they become the home of innovation.

So now the Chinese industry is leading on every front. They are um leading on healthcare. They're leading on engineering. They're leading on space. All of the things that you could want the US economy to be leading on. Okay. Just that. Not they're not trying to hack into the US. They're not trying to outmilitary us. They're just out innovating us. Now, come back to the US and give me that DSA energy where it's like, listen, we're the wealthiest country in the world. Uh, and people should be able to, you know, have healthcare for all.

That's when I raise my hand and go, no, no, sorry. We were the wealthiest country in the world. We're not anymore by a long shot because over the last 10 years, we've been out innovated by China. They control all of that industry. Okay. Well, we should tax the billionaires more. Yeah, sorry. Once again, I have to speak up. Our rate of billionaires is declining at like some absurd rate. there's no way for you to tax these people. All of their companies have been put out of business.

That was wealth anyway. It was never dollars in their pocket. So, their wealth is evaporating faster than anything because all of the innovation is happening in China because they have access to the cutting edge AI and we don't. And so, that's where it's like kids, they're already putting export controls on AI as are we. So, but it that is the world that you will step into. It is a world of a rapidly declining uh relevance on the global stage. It is a world of rapidly declining economics at home.

It is an inability to offer people all the things that you want. The only reason we've been able to um have the massive welfare state that we have is because we are so economically potent. The second you're no longer the home of innovation, then you get passed by the countries who embrace that innovation. And when you're in a battle, like just think about China. So we put all these export controls on their chips. What do they do? they develop their own chip manufacturing. That's the right response.

So if you say, okay, China develops this AI, but then they clamp down and they say, um, we're going to do export controls on this. We don't want the US to have access to the same frontier models that we have. We've already done this to China, so I know they will do it to us. And so, um, now though, the right response to that would be, well, America, just build your own. But you guys are saying, no, America, don't build your own because we don't want the data centers.

It's like, guys, we're we're just not being honest about what the economic realities of this are going to be at a time where people are saying that the American at the bottom of the totem pole is so impoverished, which is [ __ ] but that's certainly the energy. They're so impoverished that we've just got to start making sure that we redistribute the wealth. And then those same people plus more are going to say, "Well, let's make sure that we impoverish ourselves more." there'll just be less.

Like even if you can get me on board with the redistribution, you're going to have less to [ __ ] redistribute. So yeah, uh I understand where people are coming from. I understand what their psychology is. They are afraid of losing their jobs. There's all this anxiety around that that is getting painted onto what I just the data center is going to uh ruin the ecosystem. There there are consequences to data centers though and I think I think we're like shoeing it off because it's not that there's consequences to roads.

There's not that. But I could give a practical LA example. We have four data centers in downtown LA. One Wilshshire, 600 West 7th Street, 1200 West 7th Street, and 900 North Alama Street. In this area, the uh electricity bills have gone up 11%. And while that does have to do with climate and infrastructure, it also has to do with these data centers. And this is also coming from Consumer Reports. I don't think the point is eliminate all data centers. I think it's we need regulations on this stuff.

We need to be aware of how these things are affecting different areas. Like there's a whole area of downtown LA whose electricity bill has gone up 11% over the last year and a half. And it's like that's a problem and and it doesn't matter what um those data centers in downtown LA are really doing ultimately. They can be moved elsewhere, right? They could have built it somewhere else, I think is the point. It's not get rid of all data centers. It's not let's stop innovating. When somebody puts a moratorum on it, they're saying get rid of all data centers in my area.

It's a pause. Both of you going to come back. Wait, hold on. Hold on. Just real fast. Do you guys think that I'm confused about the word moratorium? No. I think I think is a knew it was like momentary. But can we agree that in the moment at a time where AI is advancing at an insane clip that one we don't know is it a moratorum for a year 5 years 10 years like these guys have a history of regulating something out of existence also I want to go back to the electricity costs it it is an absolute scandal that our electricity costs are as high as they are if we let people innovate in energy which we do not because of the very thing that you're asking for in AI which is additional regulation and I you know me I'm not a no regulation guy I love me light touch regulation to make sure that people are doing something sensible and that we're protecting whether it's the environment we're protecting people in a sensible way but very rapidly this stops being sensible and goes into regulatory capture it the regulation ends up getting done by politicians we all know that money is in politics so unless you guys know politicians that I don't all of these people are being influenced by constituents that they think that they need to appeal to so guess who ends up controlling the regulations on the data centers the people that don't want it that are benefiting from it financially but we'll set that aside the just focus on electricity the fact that we have killed off nuclear is is I don't want to get hyperbolic about crimes against humanity but this really does fall into that if you want to talk about energy the cost of energy controls the entire cost of your life when you look at China and how rapidly they're innovating on energy and how rapidly They're moving away from fossil fuels.

You'll see what I'm talking about. The US is not doing that precisely because of regulation. But what that's energy costs just went up cuz Trump just started a war in Iran. So yeah, also that. But hold on, wait, wait, wait, wait, wait. Rather than Hold on, bear with me. Bear with me. Answer one question. I'm going to you guys say, "Hey, data centers make the cost of electricity go up." He knows he has to caveat it or I'm going to hit him with immediately. Data centers are not the reason, not the bulk of the reason that electricity costs are going up.

The bulk of the reason is that we have absolutely horrific energy policies that have killed innovation. And I'm I don't you don't have to believe me. Look at [ __ ] China. They are bringing on additional energy at a rate that is astonishing. It is almost a vertical [ __ ] line and the US is not doing it. So you don't have to look far to find out that this actually does work. I think the question is though, if these data centers are so profitable and so good for our economy, why does the average citizen have to take a good chunk of the the effects of it to pay for it?

Right? I think the average citizen is responding emotionally. They are not feeling the effects of this. The 11% increase isn't feeling those effects. The 11% is not driven. What percent of the 11% is driven by data centers? Probably a very meanial amount. There was another case in a different county in a different municipality where when the data center was in uh installed prime rates which is when energy companies fluctuate their rates it then extended that window. Prime rates used to be from 6 to 8 when everybody's out after work and they're at home.

That's the prime rates due to the data centers coming in. Uh prime rates became 12 to 8. So that's that is so ridiculous. That's bad for the company and it's the company that's doing it and we should never have been in that position in the first place. So we should so we need to attack these things. Yes, but you guys are saying take the very thing that created the problem, regulation. And now I would like more regulation. Even though every time we've used it, it keeps [ __ ] things up.

Corporations are the ones who get control of the regulation. So what corporations are advantaged by? Insert whatever. The fossil fuel industry does not want to see us innovate away from fossil fuels. So you can imagine they're probably pretty in bed to make sure that we're not moving away from fossil fuels. And they're going to do what? They're going to regulate the [ __ ] out of it. If you guys are telling me right now that people in China are [ __ ] crying over the presence of data centers, you're out of your [ __ ] minds.

Those guys, even though they have authoritarian rule, why are they stoked? Because their economy, even though it's declining, is still growing at like 4.5%. The US, where are we at? 1.2%. We have been shooting ourselves homes over there. Say it again. And 90% of the people own their homes over there. They're crying in their bed. Listen, they've got a housing crisis. That was the worst thing that you could bring up as an example of what's happening in China. China is playing the game of I'm an authoritarian, so if I say we're going to [ __ ] do this, we're going to do this.

And they have got their eyes on energy. And they know we've got to bring on additional energy because additional energy. Yes. And we need to do it in the US. And guess what's stopping us from doing it? [ __ ] regulation. So when you guys are like, "Hey, we need more regulation." I'm like, "What the fuck?" It is the very thing. Regulation is [ __ ] you up on housing. Regulation is [ __ ] you up on energy. So we want to do regulation on data centers.

what is happening. But here's also a data point for the United States data centers versus China data centers. In the United in China, it's about 370 to 450 data centers for the whole country. In the United States, we have 4,400 to 5,400. So, they're beating us with less. And I think part of the reason there's less they're not beating us, Ryan. I mean, they made an open AI. They made an open They distilled our models and turned it into a very efficient model. Godspeed. I get what they're doing.

Y now what I'm saying is if they look at us and we're not going to keep doing that. Do you think they're going to be like, "All right, cool. We're going to chill here with with what we have." Or are they just going to blow past us? They're already making their own chips. They're talking about taking Taiwan, which is the home of chip manufacturing. They are going to keep onboarding nuclear. They'll onboard coal if they have to. They will uh keep doing solar, which is absolutely incredible.

And I cannot believe that we're not doing it in America. Uh so and then they'll spin up more data centers. So I I we have been prosperous for so long. People have completely lost sight of the fact that you have to fight to be at the top and we have lost the will to fight. Man, we're just like, "Oh, this is going to be fine. Things are going to be good forever." They're not. China is in the middle of an economic collapse. They're still growing dramatically faster than us.

So, it's like, man, we have just accepted a level of non-competition, uh, crony capitalism, regulatory capture, [ __ ] corrupt politicians. This [ __ ] is crazy, man. Dude, America, wake the [ __ ] up. Want to be the best. Want to be the strongest, the toughest, the most innovative. Understand? Yes, there are going to be trade-offs. Yes, of course. If there are ways we can do it better, people should speak up and they should say so. But the answer shouldn't be don't do it. The answer should be here's how you do it better.

And that I want to see that energy. I want to see people say, hey, let's figure out exactly what we need to do to get more energy on board so that we don't have the kind of like sticking points that we have right now. I want to see some energy on do we need to desalinate? Is that what we need to do to make sure that we've got plenty of water? Let's [ __ ] go. But let's actually figure out what the innovation mechanism is. What is the path forward?

How do we do this in a way that [ __ ] wins? And that is from where I'm sitting, invite competition from the smartest people in your country to find a way for them to build something that the world wants. Let them get wealthy doing it because it is the incentive that draws in the best and the brightest. Whether you're in China or you are here, it is people trying to build something because they think that they've got the coolest idea, the best idea. It's going to enrich them.

It's going to enrich society. Let's go. But we've lost that, man. We We've got so many people ejecting out of the workforce. People aren't even trying anymore. We've I can't remember if I pulled it, but there was a [ __ ] video I saw of people talking about guys being stay-at-home boyfriends. [ __ ] every one of you that's doing that. Engage, man. Where is that fighting spirit? Where is that I want to be the best? Where is that striving for greatness? God damn. Like we used to be a country of people that were really [ __ ] doing it.

We're we're losing that edge. That's crazy [ __ ] I agree. I agree 100%. I can feel it. I agree a thousand. My I got chills cuz I agree so much. Stand at home boyfriend. I have chills cuz I agree so much. That was that was all great. Yeah. But a great man once told me that corporations aren't just nameless, faceless things. They're a bunch of people and countries aren't just nameless faces things. They're a bunch of people and they're chosed officials. So, as much as we hate America, we all have to look I hate America.

As much as we hate what America is right now and how it's looking at what it's doing right now and the it's it's mechanism now. It's not this nameless placeless blob. It's the people that we put in power. The people that should be focusing on building more energy. The people that should be focusing on implementing data centers in the places that we need. the people that should be focusing on how can we desalinate and reuse water. The entire GCC has water for everybody and they live in the desert.

We're surrounded by two bodies of water and we're like, "Ah, I don't know how we're going to get water to Colorado." Like, these are easily solvable problems. But instead, we're talking about dumb stuff. Um, so I'm just going to put it out there. Okay, moving on. I would like to respond to that. Just put it out there. No, no, no. I love it. But now connect it to what actually has to happen. And is it give the government more power to regulate things? Or is it to do the thing that it's made America the wealthiest country to ever exist in the history of humanity, which is the freedom to innovate, to build, to create extraordinary companies, and to stay out of their way.

Stop disrupting the marketplaces with government weirdness, subsidies, [ __ ] regulatory capture, all that [ __ ] Step back. Let the free market do what the free market's going to do. Scott Besson, I'm looking at you. Stop [ __ ] around, Trump. I'm looking at you. Stop [ __ ] around. Stop buying shares and companies. Step back and let the market do what the market is going to do. Let people innovate on nuclear energy. Let people innovate on solar energy. Let people actually build in this country again like we used to.

Stop taking for granted the fact that we have built something absolutely incredible through innovation, through blood, sweat, and tears, through freedoms that other countries haven't enjoyed. Stop thinking that prosperity is a law of nature. It very much is not. And please, for the love of God, remember one immutable truth. Politics is downstream of culture. So if you [ __ ] up the culture, then you get what you deserve with the politicians. And we are currently fumbling the bag with our culture. So, when I look at the camera and I go on a tie raid like that, it is to remind everybody that if you put out weak ass stay-at-home boyfriend energy because you think that you're just always going to be taken care of, uh, then you're going to get a weak ass politician who's going to say weak ass [ __ ] to get elected and they're going to do some socialist [ __ ] They're going to promise you more free [ __ ] so that you can stay at home and play video games or whatever the [ __ ] you're doing.

And that is going to be a country that gets its ass handed to it. And there will be consequences. And those consequences will be economic. And all the sudden all the money that we thought would just be coming in forever immediately stops coming in because we aren't innovating. And the government is doing everything it can to break the engine of prosperity which is the free market which is entrepreneurship. And again that's downstream of culture. And so each one of us has an obligation to what energy are we going to imbue within ourselves?

What are we going to pursue? How are we going to contribute to ourselves, to our family, to the world at large? What are we actually going to do? What's going to be the thing that we build or create? What is going to be the contribution that we make? It's always going to be different for everybody. Not everybody's going to be an engineer. There are going to be people that do all kinds of different stuff. But if you don't do it with an eye towards greatness of transforming your potential into actual deployable skill set, if you're not holding yourself accountable to striving to become as good as you can possibly become to find the absolute outer reaches of your potential by turning it into skill set in the pursuit of an honorable goal that uplifts you and the people around you.

If you're not doing that, then you're going to be on a long steady decline. And there are plenty of countries if you would like to look around and see what long steady declines terminate in. It isn't good. And if you want to look at the history of companies, countries that have been on the rise that believed in themselves, there are plenty of examples for you to see. Not the least of which would be China. And so seeing a country set a vision for itself and say we're going to essentially make our education more or less look like a battle and these kids are going to fight to see what position they're going to hold of consequence and you've got to show me that you can actually do things that matter.

Now, I know real fast people go from supporting China to being unsure if they like China when we talk about what China actually had to do to get belief in itself culturally. But when you make demands of yourself, when you make demands of your kids, when you make demands of the people around you and you let them reap the benefits of that, you can have something extraordinary. Now, I think doing it under authoritarian rule is [ __ ] stupid. But I'm gonna look at the reality, which is when a culture stops believing in itself, it crumbles.

Last last circle I need to square. Go for it. Corporations are the answer. Companies are the answer. New companies, innovative companies, politicians are the problem most of the time. Companies control the problem, the politicians. Yep. So, how can the answer be in control of the thing that's a problem? How do I square that circle? Very simple. Thank you. It goes like this. You need competition because humans, regardless of politician, corporate, whatever, doesn't matter. Humans tend towards tyranny. You need a structure that checks the tyrannical impulses of corporations, of politicians, of parents in a household.

You need some way to make sure that people can't go off the deep end. And breaking up monopolies, very good use of funds. Uh getting money out of politics. Boy, would that be smart. making sure that the young upstart kid with a truly brilliant idea is able to try and see if that brilliant idea works without being iced out of that market by a burdensome regulatory framework or lack of regulatory clarity and simply trying to sue people out of existence, which hey, we've got a a nice recent history of doing that.

And when you have that competition, that young kid comes and looks at all these stodgy old [ __ ] that are trying to just trade off of the way things always were and they disrupt them. And that is a tale as old as time. And this is one of the things about the renewal of having kids and then putting kids out into the world is evolution realized I actually need kids to think the generation ahead of them is dumb and that they need to topple them.

And that competition alone keeps us from calcifying. Evolution had to find a way to make sure that we kept improving and kept getting better. If the people in power can stay in power forever, then you never get new ideas and you literally, it's a fancy word, but you literally oify and you turn into stone. And now all of a sudden, we're going to need to figure that sound out. Uh now all of a sudden you've got people that are stuck. This is wild. Do we have to do that now, please?

Yeah. Uh he's got to talk to them right now. Got it. Amazing. Um so that's where we are right now on the trajectory is we have to find a way to solve that problem and we have created so much regulatory capture. We have created so much of a um uh a lack of competition that we now no longer have this ability to come in disrupt the way that things used to be and start something new. So kill them monopolies. Uh get rid of regulatory capture. Get money out of politics.

Uh re get serious about your education. Find the best and the brightest. Train everybody. Give them a shot. But the best and the brightest. Make sure they got a grease shoot to taking all of that potential and turning it into something real. Got to do it. Perfect transition to the lead official of Mam Dani's uh of Mayor Mani's NYC groceries tells city may give grants to local fearing to local grocerers fearing competition from cityrun stores. Um your favorite commiser and mine commisar think ultimately the goals of these locations not just all wait hold on you got to start this over.

We got to set this up better. All right so this is uh Mani's grocery commasar. So, she is going to tell you exactly how they're going to um pull off these grocery stores because so many people are saying, "Hey, wait a second. Um, aren't you going to be putting pressure on the local stores? Like, if you guys have taxpayer subsidies that are shaving 30% off of the cost of running your business in an industry where they only make two, three, 4% margins, like, huh, that's weird.

That means you guys are going to be losing unless you innovate in a way that has never been innovated before in grocery stores. you guys are going to be losing somewhere around 26 to 28%. Uh, and taxpayers are just going to foot the bill. That means that all the surrounding stores are going to have that pressure because they can't meet those needs. What say you, Mom Donnie Commasar? Now, let's hear her words. I think ultimately the goals of these locations, not just here in East Harlem, but you know, any burough location, is to be complimentary to the neighborhood.

Um, and really, you know, rising tides, right? uh we can we can all cooperate and work together in a meaningful way. Do you mind what what is the I've heard that that term from EDC officials that the these are meant to be complimementaryary. H what does that mean? What is that complimentary mean in terms of policy operations and things like that? Yeah, I think we're, you know, as an agency looking at a number of different complimentary, you know, policies and programs, grants, incentives that can, um, come [clears throat] alongside these grocery stores to support other, you know, local independent businesses that are in in the neighborhoods.

Um, we're going to continue to listen and we're going to continue to engage um, and I'll be, you know, alongside the operator as our partner. Um, like I said, making sure that we are complimentary to um, the other businesses that are here in the neighborhood. So other locations, other grocery stores can get grants from the city under this something on the table. We're exploring a lot of different options and opportunities. Um I think you know there's a whole host of um levers that the EDC is able to um work within um to make sure that you know everyone has equitable and equal access.

There we go. Equal outcomes, baby. Equal outcomes. Let's all be poor together, shall we? Uh yeah, this is ludicrous. So, this is somebody coming in and saying, "Hey, I'm going to break a whole bunch of stuff, but don't worry, when I break them, I'm going to subsidize it." This is the fact that they are saying, "Yeah, we understand that we're going to come in and we're going to be disruptive, and so those guys are going to also need support is like self-disqualifying. It lets you know that this isn't working.

That by doing this, we are going to break the way that economies work. We're aware that we're going to break it and so we're considering everything including subsidizing the other stores because we understand that there's going to be a race away from those stores into the government run stores that have artificially low prices. And so we're going to have to do something. And so Jesus Christ, this is how this kind of thing just balloons and balloons and balloons from a cost perspective. We you want to talk about creating regulatory capture.

You've got somebody, let's say, that wants to start a grocery store. How are they going to do it? Let's say they legitimately have a better idea. They have a better product. How are they going to do it? They're not going to be able to get in business. They're going to have to go and find out a way to get one of the grants so that they can try it. And now everybody is sitting under the thumb of the government. The government doesn't know how to innovate.

The government doesn't know how to create the opportunity for people to um really see a thing in the future because they're going to have to decide are we going to give money to this person to let them try. Let me tell you what the free market does. The the free market is icy cold and I know that people just don't have the um willingness to tolerate this right now. But the way that the free market works is I know that uh the vast majority of companies are going to fail.

So I believe the number is 94% 94% of all companies fail to reach $10 million in revenue. That doesn't even have to do with profitability, just revenue. So 94% of companies fail. So 94% of companies fail, but we're still going to let people go do their thing because we don't know who the 6% are. It's virtually impossible to tell at the beginning. Even venture capitalists whose job it is to all day, every day look at the patterns of what makes a company successful use a portfolio strategy.

Meaning they pick up 10 companies and they know that call it seven or eight of them are going to tank and then one or two of them are going to cover the losses of all the other ones. And that's because it is nearly impossible to accurately see into the future to see what's actually going to work. So what you do instead of that is you say, "All right, I don't know who's going to win, so I'm going to create the opportunity for everybody to go out and compete.

I don't know which you guys knows how to run a bodega. Just go run bodegas." The vast majority of you are going to go out of business. And then every so often, one of you is actually going to stick, and that's going to be the thriving business. And then, God willing, every now and then, one of you guys is going to be a Walmart. And I know that people don't like Walmarts because they put local mom and pop shops out of business, but I notice all y'all [ __ ] want the low prices.

And so the reality is all of us are the problem. We want prices to go down. We want that innovation. And innovation often comes with scale. And so it's people solving these incredibly difficult logistical problems, being able to press their advantage in terms of the logistics of getting the food to them. And it is so hard to do that the odds of the government which has shown an absolute inability to be efficient not just here but literally everywhere uh because they don't have the right um price signals.

People don't get punished for doing things stupidly. When a business does something stupid, the free market punishes them. They go out of business. And we all go, "Yeah, sorry. You tried. And if you'd won, you would have gotten the upside, but you didn't win. So you get all the downside." And we all win off the back of that because we find the Waltons of the world that can solve an incredibly difficult riddle. Somebody in the chat said, "Tom talks about how things should be if all the processes weren't broken, but ignores that the processes are broken.

[ __ ] don't work the way it should, Tom." Yeah. So, if only I hadn't spent the last 30 minutes detailing exactly what the [ __ ] you have to do. Now, I get it. It isn't going to be easy. But I went all the way to teach your children well and let them lead the way, which is the [ __ ] what you have to do. I look, if I could make it easy, I would make it easy. But the reality is we have lost faith in ourselves.

We have stopped making demands that we educate the [ __ ] out of our kids. We've stopped saying, "Hey, some of you guys are going to suck at math. Some of you guys are dumb as a bag of rocks." And we are going to sift between who can perform and who can't. and then we're going to let the free market decide whether you guys are able to perform or not. When you do that, things go very well. It's heartbreaking for the kids that aren't bright enough.

Boy, I get it. As somebody who tried to get into the gifted program and couldn't, I understand what it means to watch your friends go be in the gifted program and you're [ __ ] sitting over here not. And that says something. That tells you you feel some type of way when that happens. But you either brush yourself off and hopefully you've got a mom and a dad like I had. my dad saying, "Yo, you're going to [ __ ] learn work ethic whether you want to or not." And then my mom telling me, "Listen, you can be anything you want.

It's okay if you're a late bloomer. You're going to be fine. Just like keep going." And when I almost chickened out to leave the house, my mom was like, "I will kick you out." So, it was okay. I've got to go do this thing. People are telling me that I can do it. People are telling me it's okay. I'm a late bloomer. Uh people are forcing me to develop the skills. People are making me get a job and work from the time I was 12. So, it is what it is.

Now, I'm certainly not the pinnacle of what America has to offer, but I've done okay for myself. So, I get that we don't like that it is emotionally difficult that some kids aren't going to succeed in the same way. I get that we don't like not everybody's going to make as much money in their career as the next person. I get that we don't like that Elon Musk is able to do something that essentially no entrepreneur ever in the history of the world has been able to do, but he's able to do it and therefore gets the rewards.

I get that we don't like getting money out of politics is going to be hard as [ __ ] I get it. I get that we want socialism to work. I get that we all want to stay home and not work, but their evolution does not want you to do that. It will be psychologically deranging if nothing else. I get that these problems are hard. I really do understand and I actually have deep empathy for all of us, including myself, watching all of this erode in real time is really pretty heartbreaking.

Uh but at the same time, if we accept that we're powerless, which would be a mistake because we most certainly are not, then things are guaranteed to go in the wrong direction. But if we stand our ground and say, "Listen, there are ways back from this. They're going to be long term. We've got to start planning for 10, 20, 30 years down the road." And I get with AI facing us, it's very hard to do that. When I'm teaching entrepreneurs, one of the first things I tell them, being wrong is okay.

Standing still is not. So, hey, we may we are almost certainly looking at a future that isn't going to come true because it with AI anytime it's hard to see the future, but with AI, it's just literally impossible. It's why they call it the singularity. But standing still would be the only mistake. So, I keep building like uh I mean, when it comes to video games, I keep building like video games a year from now or two years from now are going to be the same as they are today.

They're probably not, but all I can do is build based on what I know and what I understand now and then change as the reality changes and adapt and keep getting better. And so, that's what we all have to do. We've got to be able to like the Chinese, I can't believe I'm saying that, like Islam, we've got to believe in ourselves. We've got to say, "This is what I believe in. This is my value set. This is where I want to go." point to that thing and say, "Okay, this is going to take a long time.

We've got to take back the education system. We've got to make sure that the education system actually educates everybody. We've got to recognize that intelligence is basically evenly spread. Meaning, it's just distributed widely. Okay? I've worked in the inner cities. I can tell you right now, broke ass minority people, you're going to find a ton of them. [ __ ] whip it smart. So, you've got to find them. Get them the [ __ ] out of there." I found this one guy, dude. He was a far better entrepreneur than me, but he sold drugs.

And so I was like, well that's going to be a dead end. And then he would tell me stories from how he was raised and I was like, oh my god, these are terrible lessons. But in terms of the ability to process raw data quickly, that kid was [ __ ] crazy smart. And so long before I was had any cameras on me anywhere, I was like, "Oh [ __ ] this is what I called mining for astronauts." The reason that I would hire people, even if they had felony convictions and all of that, was I was like, "Yo, I keep finding these people that are just absolutely extraordinary thinkers." Now, you guys have heard me say, "You got to give up on adults because just the overwhelming weight of being raised poorly is terrible." This is a lot of words.

I will say this. Take back control of education. Get money out of politics. stop regulating things to death precisely so that you can put in um competition. We don't know who's going to win. We just have to be honest. So, we need people to compete. We've got to focus on innovation. Innovation is what drives the economy forward. We have to stop letting regulatory capture make things impossible uh to get that are very important. Housing being the most obvious of those. Make housing cheap again. Okay, that would be dope.

Um, if we start doing those things and we set a goal on the horizon and we say that's what America stands for. That's where we're marching towards, then we really can do it. But it's going to require us to do things like bring on a ton of additional energy, right? Just make that cheaper, man. You're making life cheaper for everybody. It's going to be we've got to lead in AI. We can't let somebody else control the single most important invention ever. It's not a good idea.

especially not at a time where you're delobbalizing where people are putting their fists up and they want to fight and they want to defend themselves. We've got to become self-reliant. So obviously we could go deeper on the things that we need to fix and each thing and we will over time in the fullness. If you're joining me here, those are going to be the kinds of things that we talk about, but we can't be hopeless. We've got to paint a picture and we can't confuse hard for impossible, which is what I feel like that comment did.

Okay, it isn't impossible. It is very hard. There are a lot of systems that are broken. We absolutely can get back out of this, but we've got to be honest about what that means. And it largely means, and this is why I, if you guys haven't like internalized what I mean when I say the reason that I focus on video games is I never thought I would engage with children's entertainment. I always thought I was just going to do things with adults, that I was going to tell stories to adults and it was going to change their lives.

It was going to be amazing. That was my mindset era. And then I realized, uh oh, by the time somebody's an adult, their beliefs and values are so hardwired, they could change, but they're not going to. It's just so so so rare. I clock it at roughly 2%. So 98% of people once that cultural momentum gets started in their youth, it's that way forever. So you've really got to focus on kids. We've got to change that next generation to believe in themselves, to believe in freedom, to want that, to believe that they themselves can get better and innovate.

It's what I call the only belief that matters. If you put time and energy into getting better, you'll get better. So, hey kid who at, you know, third grade is panicking about going into fourth grade, let me tell you what my mom told me as I would panic about not being ready for fourth grade. She would say, "The teachers don't expect you to already know. So, they're going to teach you. That's the whole point. And you're going to get better." And over time, that really proved out to be true.

That's what humans are good at. We are the ultimate adaptation machine. You don't have to be good already. It's about what price are you willing to pay to get good. And right now we've stopped saying that there is an extraordinary price in time, effort, energy, self-belief, uh emotional stability, getting over difficulties, all of that. And we've just told people to expect things to be easy and to be free. And that is guaranteed decline. So I'll put a period there. I'm happy to go deeper on all of this stuff.

I just beseech all of you never to get hopeless. Keep your eye on what we have to change. It's big. It's daunting, but we can do it. I think we just need to acknowledge things are hard right now and some people are struggling and they're not alone in their struggle. There's people that were in different generations that didn't have to deal with this type of struggle that you have to deal with. So, it might not be fair or equitable or any of those buzzwords, but don't lose hope.

But don't lose hope. I also um this was many years ago, so we didn't have the cultural context, but I was once speaking at Google and uh young African-American guy in the front row raised his hand and he said, "Tom, um I think that I'm being uh I think I'm a victim of prejudice and people are against me because of my skin color." And I said, "That is almost certainly true." And now what? You have it harder than boomers for sure. And now what? If you accept defeat, all hope is lost.

If you go, hey, it's lame that I have to work harder than somebody else, but it is where you are. So now what? Work harder. Put in the extra effort, but get out of that gravity well. Don't spend the time lamenting that you're in a gravity well. Yes, there is something trying to hold you back, but don't let it. whatever that thing may be. Um, you've got to find a way to overcome that. Now, when that's your orientation that, oh, okay, cool. It's unfair that I have to overcome more than the next person or more than previous generations.

But also, you don't have to overcome what somebody in uh, mouse China had to overcome. Remember, there are people still alive that lived through mouse China. You didn't have to deal with any of that. So, things are looking pretty good for you there. Um, you didn't have to deal with uh, Russia and the USSR. So again, people still alive, they had to deal with that. So things are looking pretty good for you there. Um, you didn't have to live through some of the horrors of not having antibiotics.

You don't have to deal with that. So there's plenty of things we have going for us. Focus on those things. Focus on your ability to get stronger and get out from whatever gravity well you're dealing with. Um, and I get it. It isn't fair. And certainly I will forgive you if you need to uh curl up in a ball and cry a couple times, wake up in the morning, and get after it the next day. It's all any of us can do. Cool. Let's jump over to the Constant Kiss and Steve King debate that was on Diary of Fire.

Um, this is Constantin's uh tweet, then we'll play the clip. All right. Sorry, really fast. I want to set these two up. So, first of all, both of them have been on Impact Theory, the interview show. So, I know these guys both a little bit personally. I know Constantin pretty well. Uh, Steve Keane less so, but certainly have a flavor for him. These are two very smart people. Um, both of them, I think, are well-meaning, good-intentioned people. they are on very opposite sides of a debate.

Um, it's a debate that I think is important. It's a debate that I think is largely at the heart of our inability to find our path towards innovation. Uh, because there are some people that are captured by things like um, climate change. It's this big catastrophe and the only way to unwind all of this stuff is basically to use less energy, have less people. Um, and the flip side of that coin is innovate our way out of this. And unfortunately, whenever you repeat something, it starts to become cliche.

People become numb to it. They lose sight of how powerful the statement is. And so, of course, we're going to innovate our way out of this becomes a meme. There was a where people ridicule it. But there's a book called The Rational Optimist by Matt Ridley. I highly encourage you guys all to read it. And basically, his thing is you can't look backwards at 80,000 years of never-ending progress and then look forward and go, "But it's going to end today." It's completely nonsensical. Um, and I think that is exactly true.

We have innovated our way out of literally every single problem, which is why we've been able to keep growing the population, which is why life's gotten better and better and better in it's never just straight up. Obviously, there are ups and downs. You've got the dark ages and all that stuff, but man, when you zoom back out, you just see, holy hell, this goes up and to the right. Okay, so that's the debate. But what I don't want you to do is pick a side and say the other person is stupid.

Okay, these guys are both smart. So they both have their finger on a problem. Now the question becomes, is one of them getting it wrong in a direction? Can we ground that in a visible fact that we can begin to reason our way from first principles out of? If they are wrong on a provable fact and from that fact we can build to a positive future, then I would say, hey, we're good. Um, if your takeaway is basically we're all just doomed, it's one of those things where even if it's true, it isn't helpful.

Uh, and so I would highly encourage you to eject out of that. I can get more into that later because that's going to derail some people, but I'm just going to pause there. All right, let's take a look at our mans here in human space. So, how does Andy Burnham do that? You have to back up. We are not set reduces world energy. Did you say we need to reduce energy? Do you mean the UK? I mean the species. I mean human species. So, how does Andy Bernham do that?

We are not set up to deal with this problem because we're broken into nation states. We can't make decisions that have So, we need world government to reduce world energy consumption. We're going to be stuck with that. Yes, we're going to be stuck with it. Well, see this what I'm glad we're having this conversation cuz at least this is the first time and I mean this in a genuinely respectful way. It's the first time I've ever heard anyone be honest about this issue. That's what you want.

You want world government I don't want it. You believe it's inevitable inevitable ignoring this problem. We've got to the scale threat to us. You have a world government that reduces world energy consumption and therefore the prosperity of everyone. If we had taken the advice of the limits to growth 50 years ago, we would not be having this conversation. So this is where Steve, let's assume for a second that Steve Keen is right about that. That if we had taken um engineering advice, forget the exact word that he used.

He certainly says engineer later in the clip. Uh if we had taken engineers advice and we had made changes 50 years ago, then we wouldn't be dealing with this problem. If you ever find yourself saying that, I get it. It's you're relieving frustration. Valid. I have been there many, many times. Um, however, that doesn't help you. You have to click into and now what? Now, what is the actual thing that you're saying that we ought to do? What what are the real steps that we should be taking to get ourselves out of this?

My problem with the climate narrative is that when you start looking at it, it is something like, hey, these are real problems, but we're starting to get into a place where the solutions are worse than the problems. Now, if you look at somebody like Bjorn Lomborg, he's going to say, "Okay, first of all, it's it it is real. It's an issue. It's not nearly as bad as people are saying, and that the solutions are far worse than the disease." I don't even need you to go all the way to Bjorn.

I'm just saying that when people start talking about we need to reduce the world population, now we're getting into a scary place because the reduction of the world population would not be something anyone wants to live through. Uh that would be deeply problematic because of all the economic collapse that you would see. Okay. So that's where as you listen to this start thinking about okay how do we get out of this? We have delayed for half a century. Is there any solutions that you believe are actually possible then?

No. No. There we go. You've done a public service here because you have showed what it is that sits underneath all the conversation about climate. It's at best case scenario people who know there's nothing we can do. But what we should do is flail about in the meantime and in order to not address this issue impoverish not just in this case our citizens and our fellow people but actually the entire world. That's that's what this is and the entire challenge I have to this is I don't believe in suicide for token gestures towards not solving a problem you're claiming to solve.

Right? We are not going to solve this problem by creating a world government and reducing energy consumption. That is never ever in a billion years. What we're going to do instead is run into the crisis and fall apart from the process. What we're going to do instead, look, you may there's a possibility you're correct about that, but the only choice we actually have to solve this problem is to create forms of energy that do not produce CO2 but produce GDP. Clean energy. That's what we're going to have to do.

By the way, it's what we've done throughout history. And we need to make that clean energy more favorable in terms of the economics to India and China. Did you need a world government to reduce usage of the horse and car and replace it with the automobile? No, you didn't. You came up with a better technology and people adopted that technology voluntarily because it was advantageous. This is not going to be solved by making everybody poor. Well, for the reasons that Steve himself articulated, but it's also not going to be solved by making everyone do it because people will not do it.

You say you need everybody to to hold hands on Sink Kumbaya and what I'm saying is we need to have engineers in control and we're talking about it 50 years ago. Engineers engineers. So, we should stop having elections. Sorry, compared with politicians we get. Yes. I'd rather get rid of elections and have engineers running everything. They do a damn side better job than a politicians have done. Well, and this is why I say this is a public service cuz this is what this is the true face of the climate catastrophe narrative.

We need world government. We don't want elections and we want to make everybody and we've got it out in the air. Okay. I'm going to dude, boys and girls, uh Steve Keane is a smart man. He understands things about the economy that I think a lot of people uh sweep under the rug, but he has given up on trying to um solve the problem. He's convinced that we basically have to go back 50 years. But if you do his go back 50 years as a thought exercise instead of a impossible um policy um to implement what you'll see is what he was hoping the engineers would do well I worry he was just hoping we would listen to engineers and start pulling back immediately.

If instead you take that as the reason that you should be looking at engineers is these are the people that are going to innovate their way out of this. Look at China. I hate saying this all the time but I'm never going to [ __ ] China is doing a phenomenal job of bringing on innovative energy sources because they believe in themselves because they believe in the power of innovation because they have seen the growth trajectory. It's one of those things where I often lament that I hate about um humans that they have to suffer before they can get oriented in a useful direction.

But China suffered so profoundly under Mao that when they came out the other side, they were so oriented in the direction of innovation, economics, growth. How do we actually do this? And if that means, in the famous words of Deng Xiaoping, if I don't care if the cat is black or white, as long as it catches mice, meaning I don't care if it's capitalist or communist, as long as we grow our GDP, uh then cool, we'll implement all of those things with an authoritarian layer, but we're going to do the free market game.

And so they grow just to an insane degree. But it's because they were shot out of the cannon of pain and suffering. So what I really hope that we can do is turn this around without needing to spend the kind of time that China had to spend in just abject death and suffering that we can orient ourselves just towards first principles thinking. So um I when I teach entrepreneurs I talk a lot about okay you're about to do this new thing has anybody done it before you?

If they've done it before you then audit them. What did they do? And we can look backwards and see an unending string of innovation. innovation pushing us forward. We can also see how people um lament it. They're afraid of it. It's very scary. It's very difficult. It does put those people out of a job, the knocker uppers. That was a real job before alarm clocks and electricity came along. You had a guy with a big long stick and he would knock on the upper window uh and let you know that you had to wake up and you paid him to do that so that you knew that you wouldn't sleep through uh getting to work on time.

And yeah, when electricity came along and alarm clocks were invented, knocker uppers went out of work. And I'm sure for a lot of them that meant never re-entering the labor force because they couldn't do anything else and they weren't either of the type or they weren't um able to uh get a new job in the new economy. And that's brutal for the people that lose their jobs. I understand that. But the only alternative is the economic catastrophe of stagnation which makes far more people suffer. So we say, "All right, listen.

This is just the way that it works. We're going to innovate around this." We did that deep dive that the part of the deep dive is the difference between East Germany and West Germany. Same uh same literal tight region of Berlin. Um you have the uh same families breathing the same air all that and one side is just thriving 30 years later and the other is stuck in a time machine. Uh so understanding that we can innovate our way out of this but we have to actually do the innovation.

We have to create the setup for the innovation to happen. And if we let if I'm right and politics is downstream of culture, if the narrative that we're pushing is this is a climate catastrophe, stop doing what you're doing, put the tools down, uh stop extracting energy, everybody chill, don't have kids, uh we've got to lighten the burden on this earth instead of doing what we have historically done, which is innovate, innovate, innovate, and let the free market push that innovation forward. Even though every time a big um innovation comes along, there is going to be disruption like we are seeing with AI data centers right now.

the the use of resources is inevitable. The um disruption that it will do to the temporary job market is inevitable. But the way that it propels us forward in a way that is better for society, we have only gone one way. And so to look at the future and say, well, this is going to be the first time that it breaks is is a pretty big gamble. So I would really like to see people go, okay, I'm scared about this thing. I'm worried about it. So what are the things that need to be true for us to get on the other side of this in a positive way?

I would love to see Steve Keane who has a brilliant mind. I would love to see him go, okay, what if if gun to my head, my only option is innovation. What does that look like? And um Lee and I play this game as entrepreneurs. We call it no [ __ ] what would it take? So the reason you play no [ __ ] what would it take? is you're trying to get yourself in a solutionoriented mindset rather than doomerism, rather than lamenting where we are.

You just go, "Okay, we're in this really shitty situ situation. Let's just say for a minute that we absolutely had to innovate our way out of this. We couldn't stop people from having kids. We couldn't stop people from following their economic interest. So, people are going to keep using coal and fossil fuels. What like what would it take? No bullshit." And then that switches you out of that like wo is me mindset and it gets you into like okay crazy solutions and you usually start with something that you'd never be willing to do and then you slowly start working your way back and you start seeing yourself innovating on nuclear energy as China is doing.

You start innovating on solar energy which China is doing and you start bringing on energy at a rate that the US can't even come close to because we've taken the opposite approach which is oh my god this is terrible put the tools down stop innovating. What radicalized me about the Chinese the climate change situation? I was reading freconomics and they talked about a startup that Bill Gates was sponsoring that was up in like Seattle somewhere. It was like a tech startup 12 dudes in a basement and their only goal was like solve climate change kind of like the uh X-P prize that um what's the name?

So Peter Diamandis Peter Dandis. Thank you. Um one of the solutions that was guaranteed to solve it was releasing 12 hot air balloon equivalent. They weren't literally hot air balloons, but it was like 12 hot air balloons. Two in like it was like four in um in the US, three in the Caribbean, two in Europe, one in Asia, like whatever the math is. They'll send them up to the um atmosphere, pop those balloons, and then they'll disperse like some uh element that counteracts like CO2. We'll get right back to like before we were here type levels.

And they're like, "Oh yeah, we got it." Like first principles, if we just do that, it would be easy solution. And then they thought about the actual practicality of it was like, "Okay, we'll have to get international approval and is China really going to let us launch three hot air balloons over their atmosphere into space?" You know what I mean? So, it it's these things that we have this solution to these problems, but it's not about solutions. The more I'm getting into politics, the more I'm realizing y'all don't really care about the thing you're mad at.

Like, it's just stories. It's just stories you're telling each other just to distract from the thing that you really want. Cuz it's like the problems that we have are quantifiable. We can write them down. We can talk about where it broke bad. We can mark it to the year, to the policy, to the vote total, to the people that were in the Senate. And those same people are still in the Senate. Those same people are still complaining like the wave of tweets I got I seen yesterday of like, we're at 40 trillion.

The left need to stop being responsible. And it just kept being community note after community note. You've been in Congress since 1975. The national debt was 500 billion. It's now 40 trillion. You're the problem. Like you are the problem. You know what I mean? So I I think with climate change and I almost kind of equate this to the DSA now because when I first started I was like oh okay you guys just want this solution for this problem. Got it. And then I went downfunnel to the actual what are the solutions?

How are they going to implement them? And when you get to that level of conversation it just kind of spins out into we're going to take everything and we're going to do everything and it's not going to solve the problem but it's going to be completely different. And I'm like y'all don't even want better. Y'all don't want solutions. Y'all just want different. And I think that's the an emotional creature. Yeah. The only way to lead us is to appeal to our emotions. And given that we're an emotional creature and are led by our emotions, then the politicians will do that because they have to get elected.

And so you have this really weird system where uh people try to reflect their constituents back to them rather than providing real leadership. And that is just a scary truth about human nature. It takes a very rare person to be so good at what they do um convinced that they are right that they will suffer all the slings and arrows to stand before people and say no no no we need to do it this way when people are resistant to it and then to be able to deliver something so good that people are like oh damn you were right like I was totally against you Steve Jobs but that iPhone really is the [ __ ] and so now yeah I was a hater Elon Musk but damn like you really did the thing and so all right I'm going make that money off your stock regardless.

And it's very very difficult for a politician to do that. We've had a few uh some of them um Abraham Lincoln paid with their life. Uh George Washington, another one like didn't pay with his life and that he died in office, but he paid with his life in terms of he didn't get to live the life that he could have lived as a guy that was just wealthy and didn't need to be on the battlefield, didn't need to be getting shot at, didn't need to be freezing all the time.

Um, but they believe what they believe and they just can't be swayed. Uh, it's very very difficult to find people that are both have that level of conviction, that level of tenacity and are that able to deliver results because if George Washington can't actually win the military victories, then we forget him. He doesn't exist in history. It's so hard, man. It's rare, rare, rare. Is this one of those things? Um cuz we always go back to Europe and the deaths based on air conditioning and like 100,000 people die.

I think it's 175 more than that. 175 people a year in Europe die every year from extreme heat. Now mind you, 10 20% of those it might be extreme factors. They they were going to die regardless. We can't save them. But even so, that's still north 140,000 people per year and all you need is a air conditioner. To me, that's a solvable problem. Correct. But the we can't put an air conditioner here because we're going to heat the planet and kill people. It's like you're stepping over dead bodies to save bodies that that don't actually exist.

Correct. Jordan Peterson nailed this. He said, "I am suspicious of anybody who wants to save the hypothetical poor in the future at the expense of the actual living poor today." Yeah. Cuz it's always going to be the poor that suffer the most from these. Dude, Jordan Peterson, please come back, man. I miss that guy. Like he, love him or hate him, he is so bright. uh and is very able to parse a lot of these problems before other people get to them. Yeah. Wild. Wild. Somebody say it's a trolley problem.

It's a Charlie problem. What does that mean? A trolley problem. Trolley sort of. The interesting thing about the trolley problem is that when you have to put your hand on the lever, are you willing to pull it? Um the thing with the climate change is I think this falls into the resentment category. Once you understand that this is really about uh wanting control, it's the acquisition of power by somebody who feels that they don't have the kind of power that they should have and being on a moral crusade is precisely how they get there.

And boy would I really like to see the stats on is it more men or women that push it. Uh because I have that growing hypothesis from Heather Hying that uh a big part of what's going on is women aren't having kids and they got to put that mama bear energy somewhere. And when you're thinking about compassion, even if it's compassion for uh people in the future, um that they just latch on to these things and they want to push it through. I don't have stats.

I don't know that that's true. It could be 98% men for all I know. But um that is that like weird collision of you've got all this compassion for somebody in the future, but not for the people right now. Like it's very very strange. Yeah. Uh all right. And YouTube is reportedly offering some of its biggest creators millions of dollars to keep their content away from Netflix. Deals could include exclusive contracts, funding for new productions, major brand partnerships, and increased promotion. YouTube may also limit certain opportunities for creators who release the same content on both platforms.

Yeah, this is this is a fight that I'm actually interested to see play out. When we were doing the um highly subsidized streaming wars, that was great. It was fun for a while, but that was definitely going to be a massive cash burn. and you were inevitably going to see a reconsolidation. Now you've got the two behemoths standing and they're like, "Yo, we've each got to have the better content." This is where it's going to get interesting. So rather than it being bifurcated across all these different things everybody has to pay for, it's like the two things you're probably already in are now going headtohead.

And I hope that this will make content better. So this is going to be really interesting to watch. And I've been very interested with what Netflix is doing with the GTA 6 stuff that they're like coming up with, which what is basically a sort of new form of content. Certainly for Netflix. It's the kind of thing you'd see on YouTube, but uh very new for Netflix to have a big game announcement coming on and they're doing it as like YouTube content now just proving to be mainstream content.

So, I love to see it, man. as somebody that grew up with like TVs, normal TV shows and all that and to see it get just completely replaced by something when I got into the YouTube game just seemed like this really bizarre like fringe thing over here on the side. And the reason I bet on YouTube being a thing 10 years ago, I was like, "No, no, no. This is this is creating a kind of content innovation where people are playing with formats in a way that's way faster.

There's no gatekeepers. You want to talk about like regulatory burden just being gone on YouTube minus some censorship stuff. People can go crazy and just try all kinds of different stuff. And when you get that many people without gatekeepers competing against each other for attention, oh my god, you get so much innovation. This is where I I miss where all of culture was looking at the same thing. That was there was something really cool about that. Uh, but boy is it cool that you can have like people do hour-long videos in Minecraft.

What people Dude, Mr. Beast did a video recently had like 50, it might have had 70 million views. It was just absolutely gigantic on his Mr. Beast games channel where he did a recreation of like Civilization essentially and he put women on one side and men on another in Minecraft and was like, "All right, there's $50,000 on the line." He put like this glass wall in the middle of the civilizations and then you for 45 minutes get a watch like what do they do? Like how do the different sides like build leadership um garner a following uh like basically plant flags literally like this is what our subgroup means and does.

And then people are like meeting each other at the border and using proximity chat to talk. So guys and girls are like no no no we want peace. But then there's other factions are like no we want war. And then at one point like this woman woman goes rogue and starts killing people on the female side. You're like whoa I didn't see that coming. Dude, this is you'd never get this without YouTube. Like that was the craziest [ __ ] I've ever seen in my life.

I was like how this is a video game in which Mr. Beast puts a little bit of cash on the line, gets people to FL. They must have been in the game for like a week and so they're in the game doing all this stuff like people building traps. It was [ __ ] crazy. So seeing Netflix and YouTube like really go, "All right, what's this going to look like? We want to see the most innovative things. We want to see who can build the biggest audience, and then we're going to compete for that so that these can be businesses." Dude, now like some random ass kid who's really [ __ ] funny, understands editing and timing, can become like a [ __ ] mogul.

Mr. Beast was some random ass kid from North Carolina, South Carolina, whatever, one of the Carolinas. And a random ass kid. this. He didn't have looks on his side. He didn't like he was just unbelievably talented at spending an inordinate amount of time learning about how the algorithm works, translating how the algorithm works into how you construct content, and is now worth billions of dollars. Dude, that is so cool. I love that story so [ __ ] much. And so, yeah, these two going headto-head is one of the most exciting things I've seen in a while.

Yeah, these are like the streaming charts currently. And this is June Neielson only streaming TV uh standalone TV is broken out separately. But yeah, YouTube has a massive advantage at 13.8. Disney is behind it at 9.6. NBCU which is Peacock, Verissant which is um CSNBC, MSNBC, all of those 9.1 and then Netflix at 7.9. So it's an interesting everybody's trying to stream and out battle each other for views and for deals. There's bundle packages happening now. So the streaming wars are definitely heating up. Dude, this is very exciting.

Uh, speaking of GTA 6, by the way, uh, this is getting very interesting. So, you've got this Yeah. the, uh, Cyber Leaks, I believe, is his name. I worry that this is a young kid that is just going to have turned his entire life over uh, to the feds who are inevitably going to try to track him down. Um, but man, you've got now internet sleuths getting involved in this. Um, trying to find out who this guy is because I guess there's a crypto coin that has that's tied to this somehow.

I was following it. It it it like Do you know the breakdown? It it was like the rugpull already happened. Did he rug pull already? It there was a massive drop that Oh, bro. You want to talk about turning people against you? Like, don't do that. Like your only hope is that people see you as a Robin Hoodesque vigilante that is going to bat for gamers the world over. If you are even remotely associated with Rugpull, yeah, that's not going to go well. So, uh, fingers crossed.

One, what what do I actually want to see happen here? This is good TV, so I'm admittedly fascinated. I don't like people hacking companies for reasons that I think will be apparent. I certainly don't like the idea of gaming companies getting hacked. Uh, but I do understand the whole battle of what's going on with gamers. I have a slightly different take. I went into that on Wednesday, so I won't do it again now. But, um, yeah, this is utterly fascinating. I guess he ended up hacking into them via like Rockstar India or something and so found a weakness somewhere supposedly has the full game downloaded and their share price I think uh, Take Two share price is now dropping.

Is that actually true? Did that as of yesterday? Yo yo. So, this one is wild. And if you hate large gaming companies, I bet you're loving this. But yeah, the meloy's still sideways. So, there was a large blip, then it came down a little bit and it's like chopping water at this point. We'll see what happens. Man, this one's wild. But if you've got not only the share price damage that he's doing, not only that you just can't let this precedent be set, but if there's also like the sort of nefarious crypto element, this kid better be real good at hacking and not be somewhere in the US.

Ubisoft is like, "Yeah, he's hyper leak. Come on, keep leaking. Keep leaking." And they're just back channeling to Haven't they gotten hammered by hackers in the past? So, they're probably more on the get the hacker side of this equation. Uh, but yeah, this is wild. All right, we got some hands up. Let's go. We do. Yeah, super chat. First up, super chat comes from Big Diggers. Says, "Chat with Brent Johnson ASAP. Tom, useful heristic for explaining Euro dollar tokenization. If Drew has 1k in his account at BOA and 500 in USDT, he's got 1,000 USD BOA and 500 USD USDT.

Force the metadata to differentiate dollars." force the metadata, meaning the way that they're being stored in the uh database is different. I think that's what he means. I'll have to spend some time with that. But thank you, big diglers, as always. Uh Brandon Johnson, is that Brent Johnson. Okay. Yeah, he's on the list already. Uh I haven't spent I don't think I've spent any time with him, but certainly the name is now familiar. We have to live it, says my daughter requested records for the AI data center near Spokane, Washington.

She and others like her alerted the public. Public outrage at the lack of transparency is palpable. Temporary jobs are no excuse for dishonesty. Well, [clears throat] that final statement is certainly true. Uh, and these guys are doing themselves real dirty, and they're doing us all real dirty. If they're being dishonest, lack of transparency, all that stuff, I think is great. Uh, so yeah, no beef with that whatsoever. Uh, the energy of [ __ ] AI. That's where my beef comes in. Uh, Kanis Barbatus says, "Competition is the reason why Apple Music and Spotify have pretty much the same library and music piracy is negligible while video streaming services are running into the ground.

H I don't know that I understand that." I think he's just trying to say that like competition built up to a point with these streamers that they all just offer the same thing now. Like there's really no difference between these except the IPs you hold which is why there's IP. But is he saying that there's no competition? Uh yeah because there's more streamers. Like I use title instead of Apple Music or Spotify, YouTube Music, Amazon. And also it's you're looking at the survivors. So there would have been a ton of competition up to and including things like Napster.

Apple really put like Limewire to death because they said, "Okay, um there's this guy, I think his name is Gabe Newsome, New something like that. the guy that owns um Steam Academy. I didn't know you were talking about the Steam guy. Yeah. Yeah. So um he talks about this a lot. He's like piracy is really you're doing something um that people find inconvenient. You're offering a poor service and so people start working around you. If you offer a good service at the right price, then people will just pay for it.

And I think he's right about that, which is why Steam is so massive. And I think that Steve Jobs had the same idea behind music. He was like, people don't want to pirate it. they just don't agree with the price that they're being charged for it or the format that it's being delivered in. So, we're going to do Apple Music. And for a while, that was massive. And then you saw Spotify go, actually, we have an even better idea. And now the question becomes, will musicians just go, okay, yeah, this is fine.

We had a cool era where we could actually like really make money off of our music. Now it's really just advertising for touring, and we're fine with that. or is somebody gonna create something that's more artist friendly that that solves a problem that the consumer agrees was a problem? I doubt it. Um I think that we're really sort of back to a radio model without the CD model and it just is what it is. And so touring is going to be the thing. But it's like this is the natural way that competition goes.

Competition ends up creating the sort of level water and it isn't until somebody else comes along and disrupts that that you then get a momentary blip. But I've lived through this. So at Quest, we created something that um didn't exist and then whatever 3 or four years later, the entire industry looks like us. So that isn't a failure of competition. That's somebody showing what works and then everybody else going, I want a piece of that and now I'm going to compete on smaller things. Um but and some of the things that they compete on just brand.

So but that's not a failure of competition period. Blake Bullion says, "Good morning team. I posted a Facebook link in the reaction channel in Discord. Curious on the thoughts of this short clip. If you agree or disagree, should her citizenship get revoked? If yes or no, why? Have a great weekend. Boy, do we want to watch uh a clip? It was like on whatever podcast. Have you looked at it? Is it uh can we play it or are we going to like get the the Oh, I haven't checked it out.

I don't have it on my laptop. No. Yeah, the stream's not going to get killed. All right, let's see it. Let's play it. One second. I have to move it. And by the way, uh, while doing them through super chats is probably not the play, the more clips that you guys send in that you want to see us react to, the better. So, drop them in the Discord would be huge. Okay. All right. All right. All right. We got it. Thank you, sir. uh sent back to whatever your citizenship should be stripped and you should be sent back to whatever country will take you.

Were you born in Sudan? Born and raised in Egypt. You've become a naturalized American citizen. In a morally neutral, blamefree hypothetical conflict between the United States and your birth country, where neither side is right or wrong. To which country is your allegiance, the United States or Egypt? Sudan. That was not an option. But have you spent any time in Sudan? Not at all. You've not lived in Sudan? No. Your parents are Sudin. You've been living in the United States for 11 years, 10 years. You became a naturalized American citizen.

In order to gain your citizenship, did you have to take an oath of Yes. I had to say that to get my citizenship? And there in lies the problem. The great grace of the United States grants immigrants not just restbite in our country but grants them even citizenship so that they may vote in our elections and they may receive benefits from our welfare. We have a legal immigrant here who does not have any allegiance to the United States. She has allegiance to a country she has never stepped foot in once.

This is what the United States receives as its thanks for its charity. It receives oath breakers. It receives I think we've got to put in a verdict here. Uh so the way that I would treat this is I would treat it like a rapper um who says that they killed somebody in a song. U it's going to be very damning when you play that in court, but you still have to prove in court that she really did lie uh when going through the process. You should assume right now that she's saying this for entertainment, yada yada.

Uh the sentiment is terrible. If somebody actually does lie on the oath, and yes, of course, we should be able to resend their citizenship. Uh but that one, you can't go off of something somebody says on a podcast and be like, "All right, sorry, later. You're gone." Uh that would be wild. So, you want to talk about the need for due process. You would need the due process here. But yeah, if you lied, uh, then you have, um, you've invalidated your own citizenship. And by the way, just as a society, no country should want people in their country as citizens or otherwise, quite frankly, that is against that country.

And if somebody is actively like, "Yeah, even though I'm a citizen here, [ __ ] this place, like my allegiance is elsewhere." Oo, that that that one's pretty crazy to me. Unless we're talking about one place, then that's okay. you're I assume that's an illusion to Israel and I would say that's not okay. So if somebody is um who was I forget was it oh man I don't want to slander anybody but was it Miriam Adlesen I can't remember who it was that Trump was like oh they said if it came down to it or he might have said they probably whatever anyway it doesn't matter Israel anywhere else uh if you are for that other country and you did something that breaks the um legitimacy of your citizenship then yes if you're a US citizen like um Hassan [ __ ] is came here, born here, raised elsewhere, but we had a law that said if you were born here, you're a US citizen.

So, this kid is a US citizen. He is valid. There's nothing that he's done that invalidates his citizenship. So, he's very anti-America, but I'm not saying strip him of his citizenship. So, uh I want to be very clear about what I am saying. This is for somebody that did something invalid to get their citizenship and is saying that they hate this place. Now, now I think we'd have uh a pretty good reason for going after somebody. Hassan healthcare rich guy. What are you looking for? I love that those radical a lot of people call me a radical unamerican anti-American uh Islamist jihadist, which is, you know, obviously Islamophobia.

It's very funny that they say that, but regardless, they they think I'm an enemy of America. And I always ask them like, if I'm an enemy of America, why do I live here? If I'm an enemy of America, why do I want you to have healthcare? Like, who's the real enemy of America here? The guy who's making sure that you can't get healthcare, you shouldn't have a roof over your head, you shouldn't have financial security, or the guy who's telling you like, "No, we want to do that.

It is possible." A lot of people, that's very easy to answer. So the reason that you're an enemy to America is America has a set of beliefs and values, things that we stand for that we were founded on, and you and other members of the DSA actively want to destroy that and flip it. So I don't know why we have to pretend that that isn't anti-American. Uh you may like the place that you live in terms of the geography, in terms of the weather, in terms of the benefits of the system that you're trying to tear down, but you are anti-American, so that's not exactly a stretch.

Uh, now you can say that you want better things for people and given that you dressed up as Mao and dick ride China, it is entirely possible that what you're saying is, "Look, I'm just trying to turn America into something more resembling China because I think it's better." Fine, but don't try to spin that as not being anti-American. Nice and easy. That's it for Super Chats. Uh, no. Shadow and seeds. It's all a lie. Shadows and seeds. Pain and reflect equals progress, but we're not progressing.

History, we should inform, but the US is not taking the right steps economically, politically, strategically. What is disabling reflection? Well, what's disabling the pain? That's the problem. I think right now people don't understand that we're not in the kind of pain that you think. We're in the kind of pain where you can opt out of the workforce and stay at home and still get by. Um, that's not the kind of pain I'm talking about. What I'm talking about is goolog archipelago pain. I'm talking mouse China pain.

That's real pain. Um, I'm talking East Berlin pain. That's real [ __ ] Um, when you're in that kind of pain, now all of a sudden the reflection becomes real easy. But the unfortunately people really have to hit like a rock bottom. We are not at rock bottom. Not anywhere close. America is still uh the place that people get on boats and go to uh because it can get so much worse. Now, are we declining? Yes. Do we need to reverse that trend ASAP? Yes. Um, but the thing that's stopping reflection is there's not nearly the kind of pain in this system that would cause that kind of come to Jesus.

Not even close. Cool. That was the last is all right guys. You know how much we love you. Thank you for being here. You guys are incredible. We will see you on Monday. Till next time, my friends. Be legendary. Take care. Oh god. Actually, we have an AI master class coming up Thursday, September 10th, 1 p.m. Pacific. Be there. Be square. Link is in the description. All right. Love you guys. Bye.

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