EP 138: Derek Thompson (Writer, The Atlantic) and Zach Weinberg (Co-founder & CEO, Curie.Bio) Discuss the Tariff Withdrawal and America’s Future

26:23But yes, I think people will get angry. I think they'll say, what the fuck? How is$20 ,000 of my money going to healthcare costs. This is insane. Where can I get healthcare costs cheaper? And everyone's going to go, well, Medicare is cheaper because it is. And wouldn't it be interesting if as an employer, I could opt my population into Medicare, not forcing you into Medicare. And I think this is where the Dems get it wrong. It shouldn't be single payer. It should be Medicare option for all. Just let the employer, and you have to do it on employer by employer basis, they can decide, I'm going to take my entire employee base.

27:01I'm going to opt into Medicare because the rates are lower. It's going to cost them less. And then if I want to give supplemental benefits because Medicare has some limitations, then fine, add it on, right? Feel free to do some like premium benefit on top and pay for it. If you're Google, you make a lot of money, you can do that. But I do think the agitation will come. One other, which is part of why I like it. I think people will start to realize, you know, like what's going on with all my money. The other thing about healthcare, which is not like housing, and this is where some of these analogies break down, which is that as you get better at housing, theoretically, building housing, the prices should come down.

27:39Because you're starting to do things at scale. You get operational efficiencies. You're buying more. Theoretically, at least they shouldn't grow at the rate that they're growing today because that's just a supply constraint. Healthcare is different. Because the better we get at keeping you alive, you actually see rising costs. Because now we are keeping people who previously, this is a little morbid, may have died or just didn't have the meds that we now have available to them. And actually, as the science of healthcare and really biotechnology, but it's also things like diagnostics and procedures that we get better at, it costs more because you use more of it.

28:23It's really simple. You have one house, you build one house, you live in that house. You're not using more of your house as that house gets better. Healthcare is not like that. And we actually end up paying more because we're better at it. And this is where people are going to hate me for saying this. I actually view healthcare as a luxury good. No, it is. I mean, the behavior follows the same as education and travel, where the richer the country is, you spend more on it. And because it's a service-based thing, then it's kind of the wages rise and therefore it ends up being a higher percentage of GDP.

28:59And I mean, we can talk about the life expectancy thing, which I know is a favorite of yours, Zach, as well. But the cost thing is a little bit of a misrepresentation. There's some really interesting papers coming out. I just saw one yesterday that talk about the rise of chronic disease in the United States, which clearly we have in particular in cardiology and autoimmune. Basically, people have longer term chronic issues they have to deal with means they're on meds for longer. They see their doctor more often, their healthcare costs go up. I assume they say it's the dyes in our food. Right. Exactly.

29:31It's food does. I mean, don't get me wrong. There's American culture in particular around food and exercise that do cause this stuff. I'm not saying that doesn't cause many of these things. But one of the reasons why we have more chronic disease is because we can keep most people alive longer. And like, if the longer you live, the more chronic disease you naturally get through aging. And so some of the things that we're seeing now in terms of people living with chronic disease, it's actually because we're just pretty good at keeping you alive with said chronic disease because we've gotten better at treating it, whereas before you may have died.

30:09And those little nuances, I think, are really difficult for people to understand because healthcare feels like a right, but it's not like free speech where like the more free speech you get, it costs the same, right? Like here, the more you get, it does cost more. And this is where you have to have a booming, growing economy to be able to afford all the healthcare stuff because it is going to get more expensive over time as we get better at keeping people alive and treating disease. And these drugs are not cheap and expensive. Actually, they're not cheap. Eventually, they do go generic. The docs don't go generic.

30:46I don't, have you ever met a generic doctor, right? So like, there's some real, there's some real costs in here. Anyway, I agree with your like macro thesis, healthcare, housing, they're different beasts and each one has to be tamed differently. Well, and Zach, I think we should, the life expectancy thing as well. I mean, we've talked about this in the past, but you need to net out opioids, guns, and cars. Yes, that life statistic. And everyone quotes, it's fake. It's not right. And if you take out your fat, by the way, if you take fat out as well, which we could talk about diet and all that, it's like, you know, our life expectancy is far, far better than other countries.

31:23And so that's the one thing I didn't want anyone to say, well, yeah, why are we spending so much and getting less or worse outcomes? It's like, you have to tie that out. So it's kind of two complicated factors together. Well, one thing just on that stat to really be specific about it, because everyone's seen that little chart, right? Like U.S. expectancies. We definitely have a country of haves and have nots, right? If you take that chart and you break it out by state, it looks very different. And you know, it's exactly what you think, right? Like Mississippi versus California. Yeah. I mean, in our poorer states, they die earlier.

31:57And in our richer states, they don't. And there's a variety of reasons why the different drivers of this. Some of it is diet and culture. Some of it is wealth, right? There's also a few other things going on here. That's statistic. One of the things that I think is really important is the United States is a very different country than the rest of the world. And we have a few things that are very different. One, we drive a lot. And we have way more auto accidents than every other country, which causes people to die early. And when you die early, when you're doing average, it pulls that number down, right?

32:31Early deaths pull that number down. So we drive a lot. We do more drugs. So we have early deaths from opioids. We have early deaths from drug overdoses. And we have guns. And we kill each other. And we tend to kill each other at younger ages. And all of these things pull those stats down. And it's just like a bad statistic. It's not that it's wrong. It's that it doesn't actually represent healthcare in America. It represents life expectancy. But it also represents it at the aggregate level. and you need to break that down by like state and culture. So I hate it because people use it to represent like how terrible our healthcare system is.

33:08And it's just simply flat out wrong. Especially when you go and talk to people who have had to experience healthcare in Canada and Europe, not on a cost perspective, I'm not gonna say our cost system, but from a quality perspective of intelligent people who understand the healthcare system, if they get sick, the United States is a better place to go. it just we are a better system when you get it right that doesn't make it a good system but that whole idea that our system is is not as effective in terms of keeping people alive is just flat out wrong it's a cultural issue it drives we have other drivers of early death and early death really pulls that number down so i hate people repeat it it's that whole stat of like nobody has more than like a few hundred bucks in savings it's also wrong uh which was basically like a a a you gov survey of a few people is not actually based on financial data.

33:57And Bernie Sanders is more on team. Keep repeating it over and over and over again, even though they know it's wrong, which to me makes him even worse than Trump. Cause he's, he's just lying to his own constituents and his staff knows that. He's lying to his own constituents once or twice. Derek, I guess the question on the housing thing, one of the points that maybe I missed it in the book, but you, there was a lot of discussion about the impact of housing and all the things that had occurred from a regulatory standpoint over the course of the last 50 years or whatever. If you were to distill down the cause, how did we get in the morass of not building nimbyism regulations?

34:39I'm sure it probably started well-intentioned at a small scale and then spread out. But But is there a moment in time that you feel we sort of transition to this mindset of we need to control all these things? Yes, there's a moment in time. No, it's not an easy story. I think the moment in time is the 1960s, 1970s. But the reason why our housing paradigm shifted in those decades is really at least threefold. So number one, zoning laws have existed in the US for more than 100 years. The first zoning laws are from California. California cities essentially after the gold rush trying to zone Chinese launderers to faraway parts of the city so that they couldn't live near the rich white people.

35:25So that was the origin of zoning. It was literally just like carving out cities like little pizza pies and saying like, you know, the Chinese have to live here. Black people have to live here. Zoning changed around the 1960s, 1970s, where it became less about saying what kinds of industry or what kinds of people could live here and here, and more about creating entire rules for entire cities that said, exclusionary zoning, you can only build single family houses in this entire area. You cannot build apartments in this entire area. We have historic preservation rules that mean that you can't tear down whatever, this church or this strip mall if it has some historical resonance to the neighbors.

36:04So part one is that zoning really changed in character in this decade. And was there a pause of that? I mean, like, what actually caused that? Was there a Chicago fire or something event? The theory that I put the most stock into, so Yoni Applebaum wrote a book called Stuck, My Colleague at the Atlantic, which is really good. A theory that I put a lot of stock into is William Fischel, who's an economist who's studied this period. Why did the 1970s change zoning laws so much? And his theory is basically it had a lot to do with inflation. During the stagflation crisis in the 1970s, real estate became a much higher share of the typical family's budget.

36:40And as a result, residents began to agitate for zoning laws that constrained housing built around them. And this happened at the same time that I would say, you know, track number two happened. So, like, number one is zoning. Number two is that in the 1960s, 1970s, Ralph Nader, and I don't want to blame everything on Ralph Nader, only most things in Ralph Nader. Ralph Nader created this sort of new paradigm in progressive legalism, which said that the way to express your bona fides as a progressive was to sue the state and to sue companies to stop them from building things. And you really saw this explosion of what is sometimes called adversarial legalism, which made it easier for individuals to sue cities and states to stop them from building any kind of thing, right?

37:20A nuclear power plant, a new apartment building, a new, you know, solar farm, you know, behind their property. And so there was a legal revolution that came up alongside this zoning revolution. And then part three is that there were real changes in environmental law. Like we stated very clearly in the book, America in the 1940s, 1950s was absolutely freaking disgusting. And you needed a Clean Air Act and you needed a Clean Water Act. And we also passed things like the National Environmental Policy Act, NEPA. And what we didn't realize we were doing was that we were creating a process by which individuals could use environmental review to slow the construction of anything in the physical world.

37:59And so when you put all of this together, changes in zoning, giving neighbors more legal power to stop the construction of stuff around them, and new environmental laws that really outfitted these individuals and outfitted lawyers with the ability to stop construction around them. And you just have this explosion of zoning and permitting and environmental review, and you put it all together and it just makes it harder to build things in the physical world. And so the legal paradigm that we live in in the 2020s, there's no resemblance to the legal paradigm that existed in the 1950s when America was building like crazy.

38:32Some of our reaction to sort of the growth machine of the 1950s was totally appropriate. But some of it is that like we accidentally solved the problem of the 1950s and created the problem of the 2020s, right? We built an anti-growth machine that has now taken over our cities, taken over this country, and made it harder to build. As Ezra and I say, the stuff that liberals themselves say they want more of, houses, clean energy, infrastructure, bridges. And so that's really the tragedy here. And in many ways, it's a tragedy of good intentions. Do you think you can convince, not you, but we can convince the Trump administration, the three of us right here, right now, that the manufacturing boom that, you know, we're all hoping for, I mean, everybody would love more good jobs, right?

39:19Like whether they're your jobs or not, is actually just home construction in the United States. Like, that's it. You want to have a boom. Let's just like build everything domestically here. You have construction workers, plumbers, electricians, drywall. You know, like, why do we have to make T-shirts when we can make homes for Americans? I love that line. Make homes, not T-shirts. Do I think we can convince them? No. I think that Trump, look, when you say like convince Republicans, right, let's just take stock of and be realistic about what we're dealing with with the executive branch, right? Trump has not only disinvited all the people like the Mnuchins and H.R.

40:03McMasters, who in the previous administration orbited around the president and stole from his desk the white papers and memos that were truly effing crazy. He's kicked them all out of the administration. And the administration right now is organized around creating as little friction as possible for Trump so that his proclivities on an hour-to-hour basis can essentially govern the entire state, right? Republicans in the Senate are scared of saying no. Republicans in the House are scared of saying no. You certainly don't have the Department of Energy standing up against Trump when he does something they don't like.

40:37No one from the Department of the Interior, the Department of Labor is going to tell Trump not to do what he wants to do. The entire government has essentially been organized to allow this man's proclivity to just run wild and govern the entire country. That said, what I like about this idea of make houses, not t-shirts, is it seems to me like there is a part of this administration's agenda that's all about like make America manly again, right? Like what's so great about manufacturing? Well, it was highly unionized. We were making stuff, but also just kind of represented like, you know, like sweaty guys working on a line, making steering wheels in Flint, Michigan.

41:14And I like this idea of like funneling that energy toward housing. I mean, construction in some cases like pays just as well, if not better than manufacturing. And, you know, It might be more unionized if that's something the Department of Labor cares about. So in many ways, I like this idea of like asking the administration to care a lot less about reshoring textile factories and to care more about like, Trump, you were elected because of an unaffordability election. Actually make housing more affordable. Stop like raising the tariff on Canadian lumber by 39%. By the way, we have this weird picture in our head of like construction being like a bunch of guys, you know, nailing wood panels together.

41:54And there are pieces of that, but construction also has trades. These are high paying jobs, plumbers, electricians. You have people have to do like the engineering design architects. Like this isn't just day labor wages. I mean, there's some of that for some of the, you know, lower skill work, if you will. But it's good jobs for high paying jobs for many people. That would be my push because I think they can get behind the construction thing. I'll give you one other driver of, uh, of housing costs in America and really more about like exclusionary zoning, which I agree has to do with like people's perception that their wealth is in their home.

42:34We did one really weird thing in America and it's done in other countries as well, which is we said the American dream is owning your own home. And we told people that owning your own home is one of the most important wealth creation things that you can do. And it's your independence and all of these things. So we culturally said that matters as opposed to renting. And then two, we created the fixed 30-year mortgage, which is not a global thing. Like there are most countries do not have a fixed rate 30-year mortgage. And part of the reason why the United States has that, and you can think of that as a subsidy of demand, right?

43:15We said, you need to own your own home. And oh, by the way, we're going to make it really cheap or cheap enough for you to do this because we're going to lock rates for 30 years. We did that by basically creating a federal guarantee on those loans with Fannie and Freddie. So we created culture to do this. And we created basically a giant insurance company through taxpayer money to say, we're going to lend any American at whatever, 3 % for 30 years. I mean, the mortgage, I like, I don't know, it's like two and a quarter for 30 years on this apartment, which is insane that I could never get that rate.

43:43And we did all of those things without unleashing the supply side of this. And so we told people this is important. By the way, the actual performance, if you look at owning your home versus owning the S &P 500, if you go all the way back, that is a bad economic choice. It blows people's minds. They're like, yeah, but my home is worth so much more. And you're like, yeah. Have you seen the NASDAQ for the last 20 years? You would be way richer, way richer if you took that money, rented, and invested it in the American stock market over the last 20 to 30 years. And nobody realizes that. And so we didn't only just create this massive, weird demand crisis where prices are kind of coming up.

44:25We also told Americans the wrong advice on how to build wealth. And we did it all at the same time. And this all started in like the 70s and the 80s. And here we are. Hey, Derek, I mean, on the Trump thing's interesting, but I guess I'm curious on the Democratic side. Like there's this inputs versus outputs. And I think Democrats in general kind of get caught up in some of the process related things. And we can talk forever about that. But I'm curious, do you think there's like a lane for pro-growth Democrats going forward? Obviously, that's a message you guys have in this book. But how has it been received?

45:05Is there a willingness to deregulate a lot of the zoning and the governance mechanisms that exist with housing today? I mean, look, the book has received a lot of criticism, and I don't want to deny that. But from an elected perspective, I think the reception's been way better than I could have possibly dreamed. I mean, not just senators like Cory Booker calling out abundance during his 17 ,000 hour address. Kathy Hochul told her entire staff to read Abundance. Richie Torres, in response to Estet Herndon of the New York Times saying, where is the Democrats? Project 2029 just tweeted the cover of Abundance.

45:44Like we're talking to senators and congresspeople who are asking their entire staff to read this book. And it's an awesome honor and at least suggests that the book is is detonating in an interesting way. You know, ultimately, two other observations. Like one, there's only two, you know, only a handful of Democrats that have been elected president in the last, what, 30, 40 years. You've got Bill Clinton, Barack Obama, Joe Biden. All these guys have been like fairly to rather pro-business, right? Like this idea of a pro-business Democrat, or at least I should say a Democrat who acknowledges that if America is going to do great things and is going to build great things, it's probably businesses that are going to build them, right?

46:37This is not 1932. We're not about to hire 5 million people from the worst progress administration. It's like build all of America's houses. Sorry, like we don't have that kind of money. We've got a deficit and this is a free market economy. A lot of the things that we want to happen, building houses, building clean energy, building chips, it's going to be done by companies. I think that there's a record of, you know, center left Democrats who acknowledge that business is going to have to be a partner of government to build the things that progressives find most important. I would say that's true as well.

47:06And then finally, you know, it's no one ultimately, you know, sometimes when people will say like, you know, how is this, how's, how's this book going to play in like the, whatever the midterms or 2028, no one votes for a book. Like very few people even vote for ideas. Like this ultimately redounds to the question of who's going to pick up this idea and figure out like the right mixture of identity and charisma and message and policy priorities that captures people's attention. And that's impossible for someone in my position to like predict or prescribe, right? In kind of the same way that like in the 1970s, like, or like in 1980, like people weren't voting for Milton Friedman.

47:51They were voting for Ronald Reagan. Ronald Reagan just happened to have read Milton Friedman and had a lot of like Friedman-y ideas, right? Same way. 1932, were Americans voting for John Maynard Keynes? No, they were voting for Franklin D. Roosevelt, a guy who happened to agree with Keynesian economics and therefore implemented a lot of those ideas and policy. So, you know, ultimately, people vote for people, not for books. But I've seen a lot of really promising folks pick up pick up these ideas and run with them. Hopefully we get a slightly manlier Josh Shapiro. Like he's got it. He's got the opportunity.

48:25I think Democratic candidates need like a little dose of testosterone. With like with like LASIK? Is it like you think the glasses are? i don't know do you want to like send him too nice he's no he's too nice they're all too nice they use fancy language they're not angry enough like they need to be aggressive they need to shout down bad ideas they need to call people names when they say bad like and they're just it's like we we like took a bunch of democrats for the last 20 years and we say could you be a little quieter could you just like not yell as much and then they all did it they all did it and And it's sad.

49:00Like we need somebody who actually speaks their mind and is aggressive about saying this is bullshit. This doesn't work for us. And like we just don't have that. It's hard to be angry and moderate. Yeah, I think that's true. I was going to say, you know, what you're describing here narrowly is Bernie Sanders, right? I know that his politics aren't your politics, but you know, you cannot take this away from Bernie. The man knows how he feels about capitalism. He knows how he feels with the oligarchy. He knows how he feels with income inequality. And he is willing to shout about it to whoever is willing to listen.

49:35Because it's really easy to yell and say everything's broken. And that's part of why they do it. But it's like, it's hard to yell to say, hey, this system is actually pretty good. We just have to reform it in a few ways. You can't say that out loud. I think hopefully one job that this book does, and this is like my interpretation and maybe the others disagree. But like my interpretation of one way that this book works is that we've offered a, and I'm going to use fancy language here, but I'm not fucking running for president. So who cares? We give center left Democrats a permission structure to run against the Democratic Party.

50:14The hardest thing for the center left to do is to run against the party. How did Donald Trump take over the Republican Party by running against it? Why is Bernie Sanders so popular in the left because he does nothing except run against the party that he caucuses with. But moderate Democrats can't do that. We think of ourselves as like the keepers of the institution, the guardians of the establishment, the defenders of the status quo. Americans fucking hate the status quo. They hate institutions. They hate the establishment. Can I critique this structure to say, I'm a Democrat, but sometimes being a good Democrat means pointing out where Democrats fail.

50:51Here's how Democrats fail. And here's how we can get back to building stuff in America and not just adopting this politics of moralizing language and blocking projects that would help Americans. I'm going to critique your book for one second. I do love it, by the way. And I think it's great. And I'm so happy it came out at the right time because it is the right direction. And I think you guys, maybe it's your next book, but I think you missed one concept that you could have nailed a little better. And it's related to abundance. And it's there, to be very clear. which is if you think of the U.S.

51:22economy as a pie that can grow. And I'm the grow the pie guy here. So your next book hopefully can be called grow the pie. Ezra hates pie metaphors. I get it. But it works for people. You referenced it in the book of like how a pie metaphor is a shitty metaphor. Okay, find a better one. But the general idea of if the pie is bigger, we have more money to redistribute. I just think that concept is so important because it's like we as Democrats can get behind taxing and moving money around within the pie. Like, I'm happy to pay slightly higher taxes to help people afford SNAP benefits and Medicaid.

52:04Totally. But if you think of it as like we have$100 to move around and we only will ever have$100 to move around, you lost me. And if you want this to be more effective, you want Medicaid budgets to be bigger, if you want SNAP benefits to be bigger, if you want the ability to help bring people up who are poor today, a$200 pie is a lot better than a$100 pie. And if we just go back to like growth helps people in need because it gives us more money to redistribute, I actually think you can play to the progressive part of the party, which is really about inequality. At the end of the day, they think it's bullshit that there are really rich people and there are poor people and we should move from one to the other.

52:43And that's fine. Like I'm okay with that. But can we at least say lots of really rich people give us more money to move around? And like that little piece of it, I think is missing. They view rich people as bad as opposed to like a source of wealth to move back. That's the key. I had to stand up for Ezra here and try to push back against pie metaphors, but I like the general idea. And so the way I would reframe it is a rich welfare state is better than a poor welfare state, right? Like that's the message. And progressives, the left, should root for a richer welfare state because the welfare state will grow commensurate to the wealth.

53:25And so I don't see, you know, sometimes there's a, there's a tension or, um, or a fight sometimes in the left over like what to focus on. Like, should you focus on oligarchy or focus on housing regulation or focus on the, uh, sometimes I get frustrated maybe because I'm just an agreeable person who doesn't like to fight people that much because I so see the politics of redistribution and the politics of growth as being two flavors that go well together. And two flavors that go so well together that I can't even believe that folks are arguing that chocolate and peanut butter are somehow enemies.

53:56It's like, we know they work together. We know that when the economy grows, even with a stable average tax rate, you are inevitably growing the amount of money that is created by income taxes that can be redistributed to people who are lower income. And by the way, when economies grow, low incomes tend to grow as well. Please just don't call it a welfare state. Just don't do it. You're going to lose like 60 % of the country with the word welfare. Like it just can't be in the terminology. Like throw that word out. It doesn't exist. Like maybe he doesn't like pie. He's wrong about that. We should talk to Ezra, bring him on.

54:32He's wrong about the pie metaphor. And the reason the pie metaphor is good is because my seven-year-old can understand it. And like, I'm not calling all Americans seven-year-olds, but there's a lot of us who aren't necessarily like paying attention and they're not always the brightest. If you teach people things in simple terms, they will get it. And my seven-year-old knows that the large pie is better than the small pie. Welfare redistribution feels like a little bit of a third rail. Maybe it's not a pizza pie. I'm just talking to friends in a podcast. Yeah, yeah. He's not running for office.

55:06You can hear that's in your language later. Well, let Stephen H. Smith internalize how to communicate this stuff. I was just going to say, I mean, one thing we were talking about Bernie Sanders, Zach, and I think one of the things that the amount of people that supported both Bernie and Donald Trump, I think proves how vibe based a lot of people are on this, where it's an authentic person that wants to blow up the status quo in some ways. And it's actually like it was interesting. I was listening to Jon Favreau and Sam Harris talking about, you know, the state sort of postmortem on the election and where we are and all this.

55:43And it was interesting. I didn't realize that news consumption and how closely you followed things actually correlated. The more you watch, the more likely you were to be the Harris voter. The less you watch, the more likely you were to be a Trump voter. And I think there was something so visceral that both Trump and Bernie capture, which is just like the vibe and the sentiment. And there's an authenticity to them and they are who they are. And so in some ways we talk about all these policies and I agree, but it's almost like we need the cult of personality that is just going to galvanize behind it.

56:17Because there's so many things that Trump is doing now that are so empathetical to the to the previous generation of the Republican Party. but he's captured it and he's made people back into the logic that supports, okay, well, this is what he's doing. And so therefore he's the person that knows all. And so let's figure out what the inputs are that led to that. And so that's the one thing is I feel like similar to Barack Obama, the Democratic Party has this thing of like whose turn it is and the fairness. And no, no, no, it's Hillary's turn. Well, now it's Joe Biden's turn. And now it's Kamala's turn.

56:50And I think that we just need that cult of personality that's going to capture people and whatever the message is, I think they should be able to articulate it rather than the welfare state or any of those things. They're going to intuitively be nervous. They're angry. So who's the angriest politician? That's the problem. We don't have one. The anger is a part of it. I also think, and maybe this is a controversial view, like Donald Trump is a bullshitter extraordinaire, but there's something very sincere about his hatred of democratic liberal elites, right? You get this sense that for 40 years, this is the guy from Queens who always felt like he was being held at an arm's distance from the Manhattan elite.

57:30And he just could not wait to get one over them on the national stage. And it just communicates so cleanly to people who themselves feel, whether they live in California, Kentucky, Mississippi, like they also hate the liberal elite and feel like they've gotten one over them for the last few decades. And so just as Bernie Sanders is incredibly sincere and incredibly clear about what he finds so distasteful about American economics, Donald Trump also, underneath all the bullshit, I think has this like kernel of sincerity. and for me like when I think you know not to over extrapolate my own experience but like when I think when I get like really angry I'm not I'm pretty sort of anger but like for example like when I had like an absolute aneurysm on CNBC a few days ago like that was partly because it was so fucking obvious to me that to root for the stock market to go down to root for recession to root for a housing crash was so freaking stupid that I couldn't believe I was hearing it and so like The anger flowed from a clarity of opinion.

58:35And what I think someone on the Democratic side needs, if they were going to have a moderate run on this message and really take it all the way, is that they need to be a true believer. This can't be someone that we persuade to change all of their views that they've communicated the other side of for the last 20 years. And they're like, oh, abundance seems to have some momentum. I guess I'll pretend to be an abundance liberal for a while. No. The voters will smell that. They will smell it on you. And also, by the way, the opposition will be able to drag up a bunch of quotes that are the exact opposite of what you're claiming.

59:04We need people who are humanly and automatically in their bones and in their genes upset about the fact that Americans know how to build houses and just don't do it. And that we have an unaffordability crisis and Donald Trump's doing the exact opposite of what we need to do. Like the anger needs to like pour out of them, the indignation, and just has to come naturally. I think it can because like a lot of this stuff just does suck. I'll tell you where it falls down and why we don't have anyone like this yet. I agree with everything you're saying. We don't have a Democrat that hates the government.

59:32We need somebody that fundamentally hates government and believes that like less government is better. It's not no government, but it's the right amount of government for the right problems and then get the fuck out of the way because the best growth engine of the United States is private business. And if you want that pie to be bigger, sorry about the pie analogy, and you want the redistribution that you're going to get, like the government is primarily the problem in many of these areas. We talked about it in housing. There's so many examples I can give you in healthcare and people who run in the democratic primaries and want to be democratic leaders love government.

1:00:09And I think that's where you get that tension. Like it's so easy for me to hate Bernie Sanders because I fundamentally know he's wrong, but he believes it. He thinks the system is corrupt and fail. All Bernie Sanders wants are fewer jobs and higher prices. He doesn't realize that. And, but like, these are the kinds of things I think I agree. They have to believe it, but they can't believe that the government creates abundance. And that's my critique of this thing, which is like, the government is the thing that prevents abundance. And it needs to figure out how to get the fuck out of the way because central planning, central, this stuff doesn't work.

1:00:44This is the same thing we critique China about, right? Central planning, same thing we used to critique Russia about in communism, central planning, same idea. Until we get somebody who's like, oh man, more government, more rules, more, like, I don't think they're going to genuinely believe the kind of things you are saying, because if you read your book, again, it's awesome, and you trace a lot of the source of the problems that you articulate very well, they come back to government. They come back to rules. They come back to regulations. And this is government in a nutshell. And there's, I think that's the gap.

1:01:17And I have not seen somebody in the party, maybe Shapiro at the, you know, at the high end here, who is really willing to be like, we got to get out of the way. I think it's less about get the government out of the way and more empower the government to get shit done where it's the government's job to get shit done. Right. So I see, for example, in, in healthcare, there is an enormous role for government to run not only Medicare and Medicaid, but also maybe play a larger role in offering a public option. When it comes to something like municipal infrastructure, I don't think that the private sector should be exclusively in charge of building roads and bridges and local transit.

1:01:55This is a public good. And the benefit of building good local infrastructure isn't captured by the number of tickets that you're selling on a train. It's captured by the overall municipal domestic growth that happens when you have good transportation that gets people from their houses to work. So that's another public good. I think energy in many cases can also be a public good. And so I want to empower government to help America get richer. And sometimes that means knowing when to take a step back. And sometimes it means stepping up. We might disagree on the Chips and Science Act. I think it's worthwhile for the government to subsidize the reshoring of the manufacturing of one of the most important goods in the world that currently is so concentrated in an island just off the coast of our geopolitical nemesis that it doesn't make any sense to just allow the free market to continue to play a role in concentrating high-end semiconductor manufacturing in Taiwan.

1:02:51But here's the problem with these policies. Very exactly where government should fit. But ultimately, what I do agree is that sometimes government needs to understand that if we want energy to be built, or if we want houses to be built, most of those developers are going to be private, and most of those energy companies are going to be private. And so we need to write rules that allow the private sector to efficiently produce outcomes that we consider, you know, that I consider liberal and beneficial to the country. This is where I just like, yes, the government needs to be involved in the military.

1:03:23There are certain places where the government is useful as like a large insurance company as it relates to Medicare. And it should enable large infrastructure projects, in particular multi-state projects, sure. But then you get into industrial policy like this chipset, which is, this is the problem with government. You give it tools, it uses tools. And to your own point about the tools we gave the government in the 1970s around regulatory issues in environment, they were not meant to do this. And then someone goes, hey, we've got this tool because government likes to do stuff. And those tools get used and abused and you create crises.

1:03:56And the more tools we give government, the more they will be used. And so I agree conceptually, efficient government sounds great. But that's like saying flying pigs sound awesome. It's not a real thing. And I think what you're going to find is any new rules we add in 20 years or in 10 years, they will be abused. And the CHIPS Act is such a perfect example of like the idiocracy of central planning, which is we've decided as a United States government that chip manufacturing, not design, not design, where all the IP really lives, making the chips, the actual like labor jobs on the bottom of the totem pole are the most important thing in semiconductor supply chain.

1:04:36And it is flat out wrong. Like you do not get growth in America by putting the chip together at the end, which is what the TSMC facilities that they're building in Arizona are focused on. All of the important chip manufacturing work is in the design. It is in the engineering. It is the stuff that happens. And here's how we design these fabricators. Here's how we quality control them. It sits in Taiwan. Whether they're building it here or not with higher cost labor does not make America more resilient. It doesn't. Plus, you have a supply chain of materials that are global in nature. So who fucking cares about putting it together in Arizona?

1:05:13Even if the world goes to shit. You don't even have the materials to build that ship in Arizona. Why? It's the wrong part of the supply chain. And the reason this thing doesn't make any sense is because the government decided this. Of course they got it wrong. They don't understand how any of that. They just want to hand money out. And it's not that I, this is where the nuance comes in. Would I love the idea of like American dominance and semiconductors? Absolutely. but we picked the wrong thing to dominate because the government is an inefficient decision-making machine. It makes the wrong decisions consistently over and over.

1:05:49The other thing I would tell you is like America already dominates in designing chips, right? We have Apple designing chips. We have Google designing chips. We have Facebook is designing chips right now. You have a small, like we're really, really good at this. Why did we decide that the last mile labor is the thing that matters. And it's because you're handing free money out from central planning. That's why I don't like government. I don't like giving them too many tools, not because I think government is bad, but I think the tools get abused and the decision-making falters. And you have to remember, we put stupid people in charge all the time.

1:06:24We did it. There's a guy in there right now who's really stupid. And you have a bunch of people around him who are also really stupid. Why do we want to give these people more power. We want to take that power away from them. And this is where I hate, like United States industrial policy is misguided. It is a waste of money. And it's also the same thing we are complaining about the Chinese doing. I just like, why is it good when we do it and bad when they do it? It's a good debate. My preference for industrial policy is on a handful of goods. Semiconductors are absolutely one of them. My brief reply would be, I think markets are very good.

1:07:01It's seeing what part of the supply chain has the most value, right? You mentioned that the value that we want to have in the U.S. is the design of the chips, not the manufacturing. What I think markets are not as good at seeing are low probability geopolitical risks. And the risk of China invading or enacting an embargo around Taiwan and blocking off the U.S. or the world from the manufacturing or supply of the most high-tech chips in the world is a risk so high, but also of such fudgy probability. But they already make the chips outside of Taiwan. They already do this. What percent of the world's highest tech chips?

1:07:44They're putting factories in Europe. They're putting factories in other Asian countries. They are putting factories in the United States. If they invade Taiwan and they take TSMC as a company, your little factory in Arizona doesn't know how to build another factory. The Taiwanese people know how to build the factories. We don't actually have the knowledge. We're like, oh, isn't it amazing we can do this last mile thing? Isn't that why we would want to? No, if you really want to reshore it, you have to move. There's an embargo? No, you have to move all of TSMC. You have to move the design work, know how you have to recreate TSMC corporate, right?

1:08:21Like it's not the labor. It's not the labor. We keep getting this wrong. Like that's not a hard part. I mean, it's hard, but it's how to use the labor in the first place. It's the architecture of this stuff. And that is not what we are moving to the United States. I agree that it is a giant threat if China comes in and takes Taiwan, which they very well may do. And they basically say, Hey, you want to call TSMC and figure out how to like debug this problem in Arizona. And they're like, guess what? TSMC is now the Chinese TSMC. I'm like, they're not fucking answering the phone. That's going to be the problem.

1:08:54And I just like, it's a classic democratic problem. You guys get, I say you guys, not really. They get the problem, right? They get the solution wrong. So what's the libertarian market-based solution to distributing TSMC knowledge in such a way that China doesn't hold a choke point in the possible embargo of invasion of Taiwan? Let's give every single Taiwanese person a U.S. passport tomorrow. Every single one of them. If you live in Taiwan, you can move to the United States. Let's brain drain the shit out of them, right? Let's bring the actual people who know what they're doing to America, and one of them will start a competitor.

1:09:36I mean, this is how we got NVIDIA, right? We got Jensen to America, and he's like, oh, maybe I should start. You want to import the knowledge of TSNC, but you don't want to. But I feel like that's part of the goal of the Chips and Science Act is to import the knowledge of TSNC. No, it's not. The Chips and Science Act is a construction act. It's a giant subsidized construction act. And it's just like, again, right problem, wrong solution. By the way, it's going to hand a whole bunch of money to Intel. Intel is not the solution. What we really want to do is if you want to have new chip design here, get the people who know how to start these companies and get them to America.

1:10:15Give them access to talent. Give them access to cheap real estate for that talent. Give them good health care. We are a knowledge economy. And the manufacturing part of this is important, but it's the last mile. If you don't do the knowledge part, the last mile doesn't matter. and we keep focusing on the last piece of this and not the hard part. You want more chip design companies here? Get the people who know how to do it. Give them safety and security. Well, we agree about this. There is a combination of explicit and tacit knowledge embedded in the work of designing and manufacturing the most high-tech chips in the world.

1:10:54And the U.S., I think, should have a strategy to de-risk ourselves by moving some of that to the U.S. or to other friendly neighbors. But the sum of that is not a physical, it's not a physical thing. We're not moving a physical thing. It's people. It's people. The knowledge of how to design that facility in Arizona. And they did a really good job, by the way. Like, they actually built it. It's producing chips. Like, it blew my mind. I didn't think that the TSMC would be able to pull this off. But, like, man, Taiwan and the people in Taiwan are absolutely incredible people because they're constantly under threat of war.

1:11:28and so they're really fucking creative and wise. It's like Israelis. You know, it's like when everybody around you hates you, like you show up, right? Like these economies are very similar in that way, which is like they're tiny, small nations constantly under threat and that's why they innovate. And if you want to have the actual knowledge of how to build that facility, it's not the people in the facility. It's the people who designed it and they're not here. We agree that the status quo is too high risk and that we need a policy intervention. We disagree about how exactly that policy intervention works, whether it's sort of fiscal subsidies or whether it's just a bunch of gold cards to get.

1:12:03The other thing we disagree about is that the CHIPS Act is good because there's like diversity requirements in the hiring of the people. Come on. We explicitly say that the implementation of the Chips and Science Act had a bunch of problems in abundance. Wait, you're telling me that government implementation is bad? So surprising. I'm the person telling you the government is important for certain purposes, but often achieves those purposes through bad ends. Yes. Yes. Yes. That's my problem. I know you ran long with us here. I feel like we could go for another two hours. Maybe another time we will do that.

1:12:37But yeah, thanks for it. I was worried in the first five minutes that you were going to agree about everything. So it was fun to be able to spar. Yeah. Well, I think one thing you guys nailed as a Democrat. You know, actually, he's a libertarian. No, I think the thing that's most important that you guys nailed, and I do really like it, is like, we have to think about more stuff. And we got away from this. Like the Democratic Party was like, how do we move this stuff around? And as opposed to creating more stuff. And that is a really important point in the book. I think it's really, really good.

1:13:11And like that plus the identification of like mostly housing is the only thing. I fundamentally agree with that. By the way, one of the biggest problems we have, here's like a real example. I know you have to jump. New York City, where I live. so we have a you know i run a biotech fund it's a billion dollar biotech fund all of our people are in boston are in boston and everybody's like why aren't there more biotechs in new york and i can tell you exactly why because if you want to be an incredible scientist in particular chemist or biologist is what you need for drug discovery you don't make a dollar until you're like 34 because you have to go to school you have to go to your phd you have to go to your post-op and you have to write a post-doc you're in your 30s and do that entire time you make like $25 ,000 where the fuck in New York City are you gonna live on 25 it doesn't work right so actually I my honest argument because I've been asked by like people who work for the city of New York of like how do we get more biotech in here and I'm like cheap housing because they can't live here and then if you live in Queens or you live in Westchester New Jersey the commute is such a bad commute you're like an hour away from the city in Boston I don't know if you spend any time in boston you can be 40 minutes outside of boston and rent a pretty nice apartment for like a thousand bucks a month and you can commute in and so like boston has just done a decent job of like making being a postdoc a decent lifestyle and so then they all accumulate there and it's really really difficult to get people from boston to new york because of the money because of the cost we have plenty of smart people we have a much cooler if you've been to boston it's the most boring city in the world yeah so boring that's right oh my god everything shuts down at 11 the food sucks like but they live there they live there so i i view it as a housing problem at its core it's not like we don't have good ideas and universities here we have a lot of universities we just we just it's so i mean i paid like four hundred thousand dollars a year to live in my own apartment that i own that i own we'll bleep that amount uh out uh here no i don't care i mean feel free to share that with the world.

1:15:19I mean, it's not 400, but it's like, it's like 250 or something. And that is the taxes on the thing I already own. Right. Yeah. All right. Well, Derek, thanks for doing this. I'm going to press stop here.