SALT TALKS

John Darsie (00:09):

Welcome to SALT Talks, a series of digital interviews with the world's foremost thinkers, creators and entrepreneurs. Today, we are very thrilled to be welcoming Chamath Palihapitiya to Salt Talks, but just as we do at our global conferences, we try to provide a platform, both for big ideas and to provide our audience a window into the minds of leading a business executives, entrepreneurs, and innovators. Chamath as you may know, is the founder of Social Capital. He is also a part owner of the Golden State Warriors, and now the chairman of Virgin Galactic, which he took public by a special purpose acquisition vehicle, which Anthony and Chamath will likely talk about today. But I want to turn it over to Anthony Scaramucci who's going to be doing the interview. Anthony, as most of is the founder and managing partner of SkyBridge Capital, a leading alternative investment firm, as well as the chairman of SALT. Anthony, I'll let you take it away.

Anthony Scaramucci (01:06):

Okay, well, John, I appreciate it. Chamath, I'm going to dig right into it with you. We're going to make this a Chris 45 minutes if that's okay. And you've got a lot of philosophical thoughts about inequality, your personal journey to where you are now. And I was just wondering if you could give us a good two or three minute explanation of how you've gotten to where you are and where are you exactly on the whole idea of inequality where we need to go?

Chamath Palihapitiya (01:36):

Sure. I'm a Sri Lankan by birth. I'm 43 years old. I was born in '76 in Columbus, Sri Lanka. My parents immigrated to Canada when I was six. My dad worked in the embassy there, and at the time there was a civil war between the Singhalese and the Tamils. We were Singhalese, and it was not safe for my father and our family to go back. So then we stayed in Canada. This will give you a sense of where I'm coming from, but we claimed refugee status because my father's life was threatened. We got refugee status, grew up on social assistance, on welfare and in Canada, parents tried hard to work off and on. My mom was a housekeeper. I went to college in Canada, again, relatively cheaply, did an engineering degree at University of Waterloo. And after a year working at an investment bank, after an engineering degree, I traded interest rate derivatives at Bank of Montreal. I moved to California, I worked at a series of startups, and I ended up working at AOL Rose through the ranks of AOL.

Chamath Palihapitiya (02:53):

In my mid twenties was running a division there then came back to the West Coast, joined Facebook early on, helped them scale their business, was one of the principal executives in its seminal growth phase, led the growth of the business. And then in 2011, I started investing full-time at Social Capital. And in 2017, really unwound a lot of the typical LPGP relationships and then transformed the business to be more of a technology holding company with this idea that we would use a permanent capital base to buy and hold long duration assets, and then take them public and eventually take social capital public. That's my life in a nutshell.

Chamath Palihapitiya (03:43):

My political philosophy is, I would say, ideologically promiscuous. There are some very firm beliefs that I have about a social safety net because I directly benefited from it. And then there are some very strong beliefs I have about open markets and capitalism, because I've been a direct beneficiary of those. And it would be a lie to basically say that I've come to these conclusions more from an academic perspective, these are very much lived experiences. And so I think that I'm probably a centrist who believes in extremely free open markets, thoughtful longterm allocation of capital, but a strict code of ethics around the social safety infrastructure we provide to our fellow citizens so that the rest of us who want to compete in the open markets can do so without the fear of revolution.

Anthony Scaramucci (04:40):

Are you a UBI Fan like Andrew Yang or?

Chamath Palihapitiya (04:44):

It's interesting. I would not have claimed myself to be a UBI fan until this pandemic. I think that those are tools that are really important in exigent circumstances and I would put the pandemic as the most obvious case for where UBI makes sense. It comes in part from a social safety net perspective, but the much larger motivation from my belief in UBI is one around how to ... and what I think we are in right now, which is a deflationary supercycle quite honestly. And we are in for decades of Japanese style malaise unless we jumpstart the economy. And I think the most obvious way which people refuse to admit is that, we're consumer driven, led GDP growth country and we need to get enough money into the hands of people where they aren't psychologically incentivized to save, but to spend.

Anthony Scaramucci (05:45):

Talk about the deflation supercycle for a second, because you think some of that is being induced by the fed and some people actually, there's a lot of people listening in that are in the financial services industry. They think the fed's creation is creating inflation. I personally don't. I do see the deflationary cycle in terms of the excess factory, labor, all that stuff, but define that supercycle for people. And why do you think that is perhaps intractable?

Chamath Palihapitiya (06:13):

I think this is a ... by the way you're framing is actually excellent. It's exactly that. We're on the track to something that I think is intractable because the accelerant of deflation is the fed and the printing of money, but the inception of this deflationary cycle is actually in tech businesses. So let's just take a step back and look at the five best tech businesses in the world, and think about the incentives that they create in the consumer's mind and have done, especially in the last decade. If you wanted social connection, you can go to Facebook and get an enormity of that for free. If you want information and access to content that basically crushes any asymmetry that anybody else would have over you, you can get that from Google for free. If you wanted to entertain yourself with video content and not pay $130 to your MSO cable provider, you can get that from Netflix or YouTube, essentially close to free.

Chamath Palihapitiya (07:16):

If you want to communicate across channels and not have to pay a telecom provider, you can get that from Microsoft and Facebook and Google, essentially for free. If you want things that are cheap and available in instantaneous seconds and minutes, if you wait long enough for Amazon, they'll give you that also essentially for free. So what has been happening slowly is that these enormous companies have created tons of value, but by doing it in ways that have ingrained in the consumer, that cheaper, faster, and better is always on the horizon. And so for you to wait, you get rewarded. And so what that does is an incentive to save money. And so when you look at what happened in the savings rate after the great financial crisis, I think a lot of what happened was if you even assume that the quantitative easing had some trickle down effect and that money got into the hands of consumers, they didn't see the need to spend it, Anthony.

Chamath Palihapitiya (08:14):

They were like, I'm just going to save this because you know what? I have exactly what I want and incremental things I want will just be cheaper tomorrow. And so why spend this money today? And it gave them some amount of psychological safety. So we've been reinforcing that mechanic for a decade coming into this crisis. And then on top of that, you add trillions and trillions of dollars. What happens then is people now look at that money and they say, "Well, I never needed the money before, as much as I, I'm going to need it today versus tomorrow. So I'm just going to save." And so what people think is, "Well, I need to put this to work in a place where I can actually save and compound." So then you see this asset bubble inflate.

Chamath Palihapitiya (08:53):

So I think that this duality working together. Technology on the one hand drives the entire world to believe in deflation, to want deflation because you're getting value. And then the monetary supply basically reinforces that that money, which becomes a less and less useful commodity should go back into the asset markets, because it's not something that is a useful instrument today, and it will become increasingly less useful tomorrow. So when you put those two factors together, that's what's creating this supercycle.

Anthony Scaramucci (09:23):

Yeah. I see all of that and I think it's a brilliant analysis of it, but the one fear if your essential bank or that you're having deflation is debt repayment and the economic term that emerged in the 1930s called debt destruction. So let me just give you the math. I'm a person that has a $50,000 income or $60,000 income. I've got $200,000 of debt. In that deflationary supercycle, wages are also going down Chamath. And so let's give you this example. I'm going from 60 to $30,000. Look at what just happened to my debt. Moreover, let's say I'm a government, I'm sitting on $24 trillion of debt, but I'm in a deflationary supercycle. I'm now forced to pay the debt back with dollars that are worth more than the dollars that I borrowed. And that makes it almost impossible. So what do you say about the collision between deflation and the debt cycle that we're in?

Chamath Palihapitiya (10:21):

Well, that's exactly what is going to happen. I've spent a lot of time playing poker, I played blackjack. I've been in Vegas a lot. And I remember one time I was playing blackjack and the person beside me was clapping and the dealer said to him, "Hope is not a strategy." And I would say that central bankers wanting inflation because they realize that this is happening also is not a strategy. This is why I think going back to UBI to close the loop is really quite an interesting idea in a moment like this, because I think what it has the ability to do is to get enough money into the hands of consumers that exceeds the nominal marginal value of that saved dollar. And that's when you will actually start to see more spending. And in that more spending, because you've gone through a few years or in this case decades now of deflation, demand can very quickly outstrip supply and then you restart the inflationary cycle.

Chamath Palihapitiya (11:23):

And I think that that would be wonderful. We've all read Paul Tudor Jones's letter net by now. I think even central bankers would say the best way to manage all these debts is through an inflationary cycle. Everybody wants it. I think the question is, how do you start it? And I think that knowing that there's so much money supply there, the only way to drive the velocity of money in my opinion, is to get money in the hands of consumers and let them spend our way out of this where the incremental saved dollar is not worth it.

Anthony Scaramucci (11:57):

Yeah. No, I agree. And so the secondary question of this is, you've got a lot of opinions on artificial intelligence and the ramping of artificial intelligence, which will also lower the cost of goods and services. 3D printing lowers the cost of goods and services. And so at some point, don't you think, and I'll ask it rhetorically, but I'm interested in really to get your reaction the political landscape has to change. Right now we're in a baby boomer political landscape where these guys, as David Rubinstein had said on Monday, they won't leave the stage. You've got 75 plus year old people running for office, and they're killing each other in that sort of self-righteous way. So we're getting left strategies and right strategies opposed to right and wrong strategies. And so how do you intersect that line into the diagram that you and I are discussing? What do you think happens politically?

Chamath Palihapitiya (12:55):

I think politically, this is the last gasp for boomers, and I think that in 2024, you're going to start to see a slate of young emerging alternatives on both sides. And what's interesting is I think at some point between now and 2024, the alt left and the alt right will realize that political ideology is not aligned, but it's a circle and they'll meet somewhere. And then all of a sudden realize, "Oh my gosh, we may be the exact same person." So then everything will reflexively come back to a more neutral kind of positioning.

Chamath Palihapitiya (13:30):

I think the standard bearers of this new movement, the ones on the left are a little bit easier to identify than the ones on the right, but I think that you're going to see a generally progressive shift to the left, and that to be a winning Republican candidate in eight to 10 years will mean you're a Democrat, some version of a Democrat or a free market Democrat. That's I think going to happen for sure. And I think that that force has left the stable. So we just have to buy our time between now and then, and minimize the damage.

Chamath Palihapitiya (14:10):

The one thing that you said, which is true is that we have to keep a pace of all these technologies that are going to be increasingly deflationary by design. One of the things that I think we also have to do is have to have a government regime that's willing to spend money. Now, the good news is both the Democrats and the Republicans have torn this bandaid off of this modern monetary theory approach of like, let's just spend, spend, spend and print print print. And I think that that's reasonable if you direct that capital into really meaningful sinks that slow the deflationary supercycle down.

Chamath Palihapitiya (14:46):

So for example, on the one hand where you're going to see the advent of AI that could theoretically reduce the earnings power of people, on the other side, I think we need to make it a national priority to fly to Mars. Not because we should, but because we could. And you can sink trillions and trillions of dollars of capital there. We may decide that we want hypersonic aircraft, not because we need it, but because we want it and you can sink hundreds of billions of capital into that.

Chamath Palihapitiya (15:18):

And so there needs to be this re-imagining of how the infrastructure of the world should look and should work. And re-imagining ourselves, not just as people that live on the earth, but also in other planets. And while it seems crazy, the reason is because it can consume all of this capital in a way that's productive, in a way that doesn't necessarily just create a downstream asset bubble because that has to deflate and then it will eventually reinflate. And all of that destruction will further segment society in ways that make political disruption more likely. And I think that we don't want that or we shouldn't want that.

Anthony Scaramucci (16:01):

I get it. You don't want a society where people are going to take a Tiki torches and pitchforks and March on the people that are holding the assets. So therefore you've got to flatten it out. You've got to even out the K through 12 education system. And I think you and I are in a general agreement that, I don't want equal outcomes, but I do want people to have a broader likelihood of equal opportunity. Meaning, if you grow up like me or the way you grew up, my grandmother was a maid. She turned beds. My father was a crane operator. And so I got very lucky getting into a good public school, which allowed me to hone my academic skills. I just worry about that generation. Now they have such an uneven educational footprint. You don't know if they can get to the arc of the American dream or [crosstalk 00:16:52].

Chamath Palihapitiya (16:53):

To your point, I completely agree with you. Public education for me was my salvation and an amazing school in Canada that costs $10,000 a year. That was it. And what Canada and the rest of the world have refused to have happen is to allow higher education to become this luxury good that's like an LV bag of sorts where you want to be seen carrying around this $5,000 purse. It's kind of insane. And in that bag, you carry the same garbage that you would carry around in a $10 bag. And so what is the point?

Anthony Scaramucci (17:30):

I get it. I tell people that all the time, you can eat the pizza off of China or you eat it off a plastic plate. We're both eating pizza, but I want to ask you about the consumer orientation to space exploration, which I find absolutely fascinating. And I mentioned this to you. I've built a very nice relationship with Sir Richard Branson. He has been to the SALT Conferences and he like you is a great visionary. And so if you don't mind, could you spend a few minutes for our viewers of what the vision is for Virgin Galactic, where you see it in three or four years. But before you answer that question, I want to know my friend Matt, go to run zero gravity, have you been on the Vomit Comet? Have you ever flown up there and done the zero gravity turns and twists or not yet?

Chamath Palihapitiya (18:21):

I haven't. I haven't done it. But to-

Anthony Scaramucci (18:24):

Well, if you're up for it, I'm going to take you up there as my guest, but tell us where the future is for Virgin Galactic. What do you see?

Chamath Palihapitiya (18:33):

I'll tell you the Virgin story maybe in the context of the Apollo project because I think it's important. When we sent people to the moon in 1969, that became this incredible Thunderclap in the world, and it completely captured people's imagination. From a global hope perspective, it was an incredible validation of human ingenuity and capability. But underneath Anthony, there was something that very practical happened, which was, we invented an unbelievable number of industries. And the reason why space is such a compelling tip of the spear or a canary in a coal mine, whatever phrase you want to use is that it stresses every single law of physics that we know and understand. And that's why space has captured the imagination of so many people.

Chamath Palihapitiya (19:30):

It requires you to think of all of the basic things that we have today in a completely different light. From computers to clocks, to materials, to how you manage heat, all of these things that are understood today have to be completely re-imagined. When you do that, the second and third order markets for these innovations are so vast. So for example, you may care about climate change. Well, in order to really push climate change to the forefront, we are going to have to massively increase our battery density and the efficaciousness of our motors, electric motors. Well, underneath that is massive kinds of material science. Those innovations may never get funded in electrification. They will very likely get funded in space because you have to solve them to achieve these missions, and then it can trickle down to electrification as an example. And so you have to think about space as a way of it being a guinea pig for many of the things that we can use to improve the landscape of the world.

Chamath Palihapitiya (20:37):

So now you think about Virgin, what have they done? Well, what they've done is they've spent the last 15 years building a very safe, repeatable way of sending people into space and back, so into lower earth orbit and back so that they can experience gravity, see the edges of the earth surface, right. Be up there, float around, and then come back down. Now, what are they building in order to do it? They're building all kinds of really interesting materials. They're building a very novel way of managing the stability of a plane because remember at the end of the day, this is not a rocket that goes up and down. This is a plane that takes off and lands. It could literally take off and land from a LaGuardia or JFK. You don't need to go to Cape Canaveral.

Chamath Palihapitiya (21:21):

So how do you design wings that behave in useful ways at 350,000 feet, as well as 50,000 feet? It's building engines that can, with a reasonable carbon footprint, generate enormous amounts of thrust and energy. How do you do that? So they figured all of these things out. So in phase one, 600 odd people have already signed up to fly, hundred million dollars of booked business that we have to deliver. 9,000 people have been waiting in line to give us a deposit. Another 500 or so people I think have given us a small deposit in order to make the bigger deposit. So there's tens of billions of dollars of revenue at very, very high margin, to give people a once in a lifetime experience. But in doing it, our ambition, which we've talked about is taking those technologies and building a plane that can fly hypersonically.

Chamath Palihapitiya (22:22):

So you would go to JFK or LaGuardia, you would get on a plane, it would fly Mach 55. So imagine you need to go to Japan, Tokyo, that would be a sub two hour flight.

Anthony Scaramucci (22:34):

Amazing.

Chamath Palihapitiya (22:34):

You land in Tokyo, you do your meetings, you'd get back on the plane. You'd be back in LaGuardia, JFK at home with your family for dinner, and you would have spent the entire day in Tokyo.

Anthony Scaramucci (22:43):

Well, listen, it's amazing. And just for more context for our viewers, in Douglas Brinkley's book, Moonshot, the Apollo program, $25,000,001,969, which is basically about $400 billion today, and they estimated to your point over a trillion and a half dollars of positive externalities, it wasn't just Tang and posted notes and aluminum foil. It was everything. GPS, all the systems, telecommunication systems, the internet, the entire footprint that grid that information highway, the Apollo program in many ways paved the way for Facebook.

Chamath Palihapitiya (23:25):

You're extremely right.

Anthony Scaramucci (23:27):

It's nice to see that you've tied those two things back together. My colleague, John Dorsey has a question. He's sitting out there with all the dead animals on the wall that he's hiding from everybody at the ranch in Colorado. Go ahead, John.

John Darsie (23:42):

Chamath, you did a fascinating podcast a couple of years ago with Kara Swisher, and you've had a lot of interesting conversations with her. And you talk a lot about Silicon Valley and about how the culture is broken and the system of capital formation is broken. I would love for you to talk a little bit about your explanation of that theory, as well as how you think the pandemic might even exacerbate that the shift that we're seeing out of Silicon Valley or some of the disillusionment that people in the tech industry are seeing with Silicon Valley.

Chamath Palihapitiya (24:11):

I think that there's a dispersion happening and that dispersion is not dissimilar to what's happening in the public markets. If I had to characterize the public market dispersion, it's essentially that we are separating the haves and the have nots. And the haves are companies that traffic in bits. So Facebook, Apple, Amazon, Microsoft, Google above all others, but then underneath them, largely founder led technology businesses, that have the 80 to 90% gross margins, even if they're unprofitable. So those are the haves, they traffic in bits.

Chamath Palihapitiya (24:44):

The have nots or the companies that traffic in atoms. If you're a hotel company, an airline and auto business, those businesses are incredibly impaired and there's been an dispersion in the spread where you could basically essentially, if you bought the weighted S&P Index, which essentially is a way of getting synthetically long, these handful of tech businesses and shorted the unweighted index, which is, basically getting an equal weighting of everything else, you can see this massive dispersion spread by.

Chamath Palihapitiya (25:14):

That's happening in private markets as well. Except what we're looking at are companies that either are benefiting from the pandemic. So tailwinds that are driving positive growth and profitability. So companies like Coinbase, or Instacart, or Palo Alto Networks, which is public or Netskope, which is private, internet security businesses, or Slack which is a collaboration business. So there are these companies, a mixture of private and public, and then businesses that were second and third tier also rants are again, just getting crushed and they're being forced to fire and lay people off.

Chamath Palihapitiya (25:52):

Underneath that dynamic is something that's been broken in the valley for a while, which is that the cycle of building and profiting from companies has taken too long. It used to be the case that we would build a company for four to six years and then take it public. And then the public markets would participate in the last two or three years of evolving the business. Now, what happens is there's so much private money that these companies stagnate in the private markets for eight, nine and 10 years. The problem is that for LPs, it doesn't work because you have these 10 year fund lives. And if you're a growth fund, maybe a seven year fund life with a couple of one year renewals, the timing mismatch now that it's creating is this massive overhang where you have these paper values in IRRs that can't be monetized.

Chamath Palihapitiya (26:40):

And so that's feeding a cycle where even faster than normal, LPs are looking at secondary firms and saying, let me sell some of these things. Let me rebalanced my portfolio, because my publics are getting crushed. If you look at private equity, it's very challenged because they predominantly trafficking atoms. They're buying industrials companies, they're buying things that are real, tangible things that you buy with current free cashflow, that stuff is very trial to challenge. And so as a result, the IRRs that these pension funds and other LPs will see are going to be challenged. They then look at their venture exposure and say, "Wow, I have way too much exposure." And so then they're selling then the venture funds themselves are thinking to themselves, "Wow, I'm having a lot of trouble raising a new fund."

Chamath Palihapitiya (27:24):

So it's a very complicated cycle, John, but that's what we're engaged in right now is this essentially a massive multi-year long portfolio rebalancing. And the publics are leading the way so that dispersion is creating a dislocation. Private equity is the next domino to fall because when they really reset their portfolios and revalue them two, three, four quarters now into the full scale breadth of the consumer demand shock that we're dealing with, and then venture folks will have to take the backseat, but it's going to make valuations very challenging in the public markets. And you're going to be rewarded for having money to put to work.

Anthony Scaramucci (28:10):

Chamath, when you think about the future, it's 15 years from today. We have all of this complexity. What you're basically describing is another big transition. It's a little bit like the industrial revolution back in the 1830s, where all of a sudden people got scared they were losing their jobs and then there was massive productivity uplink, if you will. And so I guess what I'm asking is, you and I know there's going to be an abundance. We know that there's going to be nanotechnology, biotechnology, immunotherapy. There's going to be an abundance. And I know you're worried about this because I listened to your interviews. You're worried that that's going to go to two or 3% of the people, and we're going to live in this ether of plutocrats, where the rest of the society is struggling.

Anthony Scaramucci (28:58):

And so you're a capitalist, obviously I'm a capitalist. And so how do we shatter the totems of political ideology to explain that to people so that they understand that if you give somebody some universal income or some base education, that's actually right in the Western Canon of liberalism. That's the way to allow them to experience their life to their true form, the way you were going to that $10,000 school, or I've been able to. So how do we shatter those totals? How do we get there?

Chamath Palihapitiya (29:31):

I think that the way that I look at it is that right now, we have very uneven starting lines and we can use money and we can use incentives to make sure that as much as possible and as often as possible, we have a very even starting line. And I think universal basic income is a very interesting tool to make sure that the uneven starting lines of today are not meaningfully exacerbated because the reality is looking today, middle of May, 2020, people that are relatively wealthy and had asset exposure, I don't think are very much feeling anything from this pandemic. But people who had normal blue collar jobs, have been affected meaningfully. 30 odd million, we're trending to 30 odd million people, and that's enormous. That's like saying, if you walk outside the United States, every fifth working man or woman that you see doesn't have a job that's in my mind, extremely scary.

Chamath Palihapitiya (30:37):

So the way that you destroy these totems, at least from my perspective is right now, when we're in a crisis, it's the equivalent of being gunned into the ER with a gunshot wound, you have to stop the bleeding. So tourniquet yourself and make sure that we can stabilize the patient. And I think money in the hands of people do that. Then it's about being able to successfully conduct the surgery and remove the gunshot wound. And I think how you do that is to make sure that the companies themselves who are employing you have some reasonably good behaviors coming out of this crisis better than the incentives they had coming into the crisis. And then the way you rehabilitate. So even after the gunshot wound, how do you get back to 90 or a 100% physical capability is that you have to go after some of these huge, big elephants that have been hanging around for a while.

Chamath Palihapitiya (31:35):

Number one at the top, top, top, I think Anthony is education. We have to figure out what to do on the student loan sign side and what to do about the quality of public school education and the compensation we pay teachers. It's kind of a joke. I have four kids, three of them are in school age, and I have to be honest with you, it is impossible for me to do a good job. And I think that those teachers should be paid 10 times more than they are. But then at the same time, I'm a little angry at them because I think between them and the administration, the administrators of our schools, they're so woefully unequipped, and I think this is 2020. And then my school is in the heart of Silicon Valley. How is this possible? So I think that there's a lot of stuff that you can do to make sure that the best teachers are teaching all the kids and that's a technological problem.

Anthony Scaramucci (32:32):

We're going to have Sal Kahanan later on, and that Sal has always preached that to me. It's like, we're trying to make a movie instead of getting George Lucas and Steve Spielberg together to make the movie, we're getting the local drama club to make the movie. And we have to figure out a way to push that expertise down and make it more broad. I know we're running out of time, but I'm very curious about this question and I hope you don't mind me answering it because it's a question about our polarity and politicization. And there was a new Yorker cartoon that I read about two weeks ago and I literally laughed out loud. It was a news anchor and he was sitting at a news desk and he said, "We just heard from our democratic weather person. Now let's get the weather from our Republican weather person." And that the point being that we're so politicized.

Anthony Scaramucci (33:25):

And so do you think Facebook is doing a good job? Do you think we can do a good ... is there a way to dial down some of the misinformation out there and dial up more of the objectivity because I think one of our biggest problems Chamath, is we can't even agree on the facts anymore, depending on where I'm watching or what channel I'm on, I'm getting a different set of facts than the guy next to me. And so we're arguing over the facts now, do you think we could do anything to change that?

Chamath Palihapitiya (34:03):

There's a great philosopher. His name is Rene Girard and he pioneered the school of thought, which essentially says that, people aren't really born with desires. They mimic and model desires from other people. And then they copy and they imitate. And then eventually though they imitate too much and it leads to conflict, and then you have to scapegoat somebody and there needs to be a grand sacrifice before you can reset and everything will be fine again. Right now we're in a cycle where it is very easy to confuse truth and popularity, and so people can do it because it appeases their mind. It makes it easier for them to be part of a tribe and take something as fact versus have to be in the uncomfortable process of re-underwriting, everything they hear.

Chamath Palihapitiya (34:55):

And Facebook in many ways is an impossible situation because they have to do a dance between what is really fact and what is a person's opinion and how do you allow free speech? And so I don't even think it's their problem. I think it's a decision that we, as a society, have chosen to undergo. So I think it will come to a head in the next four or five years. And I think that how it gets resolved, Anthony, like what is the scapegoating that happens? I think that probably there needs to be something like a new deal. and I don't want to say it's the green new deal, but I think it's a re-evaluation and rewrite of the compact we have as US citizens. And I think that that's coming.

Chamath Palihapitiya (35:45):

I don't think that that's necessarily a hundred percent of the rhetoric of Bernie Sanders, but I also think it's not a hundred percent of the rhetoric of Donald Trump. And it's going to be a total rewrite. And this is why I think that the United States in many ways is like a startup that's never failed because we always iterate and we'll recreate ourselves. And so I have a lot of trust and faith that eventually people will emerge on both sides, and they'll just say, "All right, screw the past. I'm tired of our parents bickering. Let's just sit down and shake hands and figure it out."

Anthony Scaramucci (36:21):

Well, listen, but generationally, if you really studied cycles of generations, you're now in the 80th year of the start of World War II. And so when you sit there and look at that, it's a lifetime ago, what starts to happen is another cycle starts. There was a book in 1996 called The Fourth Turning, which was an explanation of these cycles. And so we're there now, and it's going to require really good leadership to set that framing.

Anthony Scaramucci (36:49):

Just one other point on that, I find this fascinating as well, 27 constitutional amendments. The last one was a procedural one in 1993, but the biggest one, the most magnitude in terms of the body politic was the Civil Rights Amendment in '65. So we've really gone ... think about the country. It's 244 years old. We've gone 55 years without a real constitutional amendment to reset things and to re-graph things directionally. So I agree with that. I know we're running out of time, but I'd like you to end on a note if you don't mind, because I think you're an amazing person in terms of being able to see around the corner of where we're heading. It's five to 10 years out, build me the case for America, and where would you like to see America?

Chamath Palihapitiya (37:40):

I think in 10 years from now, I think what will have happen, I'm just going to paint my bright rose colored glasses view. We will have come out of the deflationary cycle. We will have seen some modest, reasonably good inflation, and we will have reinvigorated the US economy. We will have become a standard bearer for basically, Western Europe, South America, and parts of Africa. I think that the two super powers that exist will be us and China. And it will be one where it's mutually assured destruction. And so we choose to cooperate wherever possible and power share. That there will be a lot of high earning jobs because we will nationalize things that should be nationalized for national security purposes. And that we have reinvented education almost back as sort of a very much one to many model to your point that isn't cut across county or state lines anymore, but says, the best teachers teach the entire nation in a completely different way. And we have a body politic that, that is meeting in the middle and is much more like the 1980s Republicans versus Democrats versus the 2020s Republicans and Democrats.

Chamath Palihapitiya (39:04):

So I'm very hopeful. But we are going to go through three or four years of difficult treading to get there. And so we're in the middle of the grind. So this is not where things get easy, but by 2024, things will get much clearer.

Anthony Scaramucci (39:20):

Well, listen, we appreciate your time today. You've been amazing. I'm not a room raider, but I love your room. I love the sunlight coming in. You're doing fantastic. I've got the old fashioned HTTV screen. But I hope you'll take me up on the Vomit Comet. That's what the astronauts used to call that thing. My friend Matt Goad runs zero gravity and would love to go up there with you. I think you'd find it fascinating because you get to a certain level, they move the plane in a certain way. You're up in the air and you can experience some of that space flight that you yourself will look forward to.

Chamath Palihapitiya (39:54):

I would love to. I would love to.

Anthony Scaramucci (39:55):

Well, God bless you. Have a great weekend. Stay safe. That's it for SALT Talks this week. Have a great weekend everybody. And Chamath, I'll be in touch. I really look forward to our next event together.

Chamath Palihapitiya (40:07):

Thanks Anthony. Thanks John. Thanks everybody. Thank you.

Anthony Scaramucci (40:08):

All right, bye.

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