Welcome Sally. Hey everybody, welcome to dead cat. We've got Eric newcomer here. Katie better me Tom Dutton. Joining us this week is our good friend Reed. Albert Gotti Reed, longtime business reporter, we worked together at the information for a few years. Reed is also a veteran of the journal and the post. Launch the sports section at the journal right? You're you're part of the founding team. They're like I was
okay, I was. Okay. I'm so excited to be on here. I'm just a huge fan of your podcast. You guys are awesome. Not because they know you. But I really enjoy it.
I'm excited to have you read because what I like about read, the reason that you're our friend, is that you're an interesting person to talk to, like a lot of journalists are excellent, like fact togethers like that's the skill. But I think you're an interesting thinker. Like I always want to hear your opinion on things. And you're not as cynical. I think as a lot of me, you're not as cynical as I am. Yeah, and it's a good topic to have you on today, because we're going to talk about a story that you that you broke, as I believe the first official story for the new publication that you work for, which is semaphore. You're the first summer sum of money and myth
and Justin Smith's new publication that's started advertising on my Twitter feed incessantly and is preparing for a buzzy launch this fall.
Yeah, they have a real some of Fornia. We haven't actually decided on official and official term for what is it? Some of foriegn? Or some of them, some of fornicators? Maybe we can maybe your listeners can write in
Yeah. Yeah. You guys, should you guys should license California Keishon by the chili peppers and make that your like launch song, Sam. Yeah, we can't afford that sound drop right now. So some of where do you want to give us? I mean, you know, Eric said, it's a it's the Smith and Smith Co. Smith, Ben Smith has been a guest on our show. But do you want to give us like the rundown on what semaphore is and why we should be excited about this as the newest beacon on the media landscape? Yeah,
I mean, so it's a new, it's a new publication. And it has a couple of things that I think are different than what other people are doing. And one is, it has this international angle. So the thesis is that there's this underserved English speaking audience around the world that doesn't, you know, trust or want to read the local news. They're looking for, you know, news from outside the country from trusted sources. But you know, the big publications that they might read, are not really writing for that audience. They're writing for an audience back home, where the publication is based, you know, we've already launched some of for Africa. So we're gonna hire people in two African countries who are based there and will write stories that, you know, we hope are interesting, not just to, you know, Western audiences, but audiences in Africa. And then the goal is to eventually expand to lots of different places. And then, you know, I'm covering technology. So, you know, what I think is exciting for me, is that we're also going to experiment with story forms. And so we're going to sort of separate out the facts, the news from the analysis. And so each article will have, you know, the reporters viewpoint, and really, the reporters viewpoint, in my mind, the reason that's valuable, it's not so much because I think people care what reporters think, but because we want to be transparent not have readers kind of guessing, okay, what is this person's angle, you know, based on who they decide to quote, and how they frame, you know, certain, you know, sentences. And then, you know, we'll we'll offer other points of view, too. So here's an opposing point of view, or here's a, here's a different way of looking at it, or here's a way of looking at it from an international perspective. So the way I think of it is sort of like every story becomes kind of a discussion around the news that you broke, rather than sort of here's, here's our publications worldview. And this is the only way of looking at it. And you know, Ben was actually in the Bay Area last week, and we were doing a bunch of meetings. And one of the people we met with, reached out the next day and was all excited about this idea, and refer to it as our Talmud approach to news, which Tom I know you'll get.
I just did this a lot of chin stroking as you read the article, the idea? Well read and yeshivas in New York.
That's my long winded explanation. Yeah,
you guys are you guys are publishing some of foreign Aramaic now so you can get well read all those highly educated Hasidic schools.
Exactly. Here's the rabbinical view yesterday's news like it
and so it's it's it because the article that you wrote, which I believe was the first official article, it didn't even last right.
You guys were like, fuck it. It's like we're gonna publish before we're even ready to go, which is always fun. I remember
information to that mirror. He was just getting so many scoops on Google in their cars that were just let me
back on to republish on Jessica lesson.com
Yeah. Jessica lesson.com, brought to you by Amira. frati was I think the branding.
And by the way, that website is still up. I was looking at it the other day. That's when I Yeah, because I saw read scoop. And I was like, Huh, I wonder what the story is with, you know, J l.com. But, but so the story that you wrote, though, like, does that reflect the semaphore style? I mean, are you guys still workshopping it? Like, did you? Are you? Yeah, I mean, is that is that a preview of what's to come or just kind of like you had to get the news out,
I think there are some clues in that story for, for what the form is going to be like, we didn't really break it out into sections. And we're still experimenting with exactly how that's going to work. We're sort of writing articles, I mean, writing real articles, but not publishing them, and sort of just kind of to test what it's like, you know, writing in this form. But I think you'll notice that in the medium article, I did, I did sort of include more analysis with with the news. And so in that way, it is kind of a, it is kind of a taste of what's to come.
All right, let's not just have second order conversation. I, the actual story itself is right,
right. I'm sure the audience is screaming right now be like, What the fuck is the story,
the story itself is actually interesting. And hopefully, the heart of this conversation,
the story is about Biden's executive order on China that basically puts the screws to the country, and brings us closer to something that I would describe as basically a trade war between the US and China over tech. And then so you have the scoop on the order. The order actually does come out a couple of days later, but read why don't you just tell us what you were hearing as you as you got the scoop? And you know, what the nature of the conversation was on China in the US?
Yeah, I mean, I don't know if I would, if I would describe it exactly, like putting the screws to China. I mean, I think what they're what the Biden administration is trying to do, is kind of walk this tightrope between, you know, there's there's China hawks, who who kind of believe we should completely decouple with this country and have, you know, so that they have zero leverage, because essentially, in their view, a war is coming. And then there's, you know, the more moderates who kind of view that at war is, you know, somewhat of a possibility. But, you know, decoupling and taking extreme, you know, measures will essentially hurt us business hurt us interests in the short term, and maybe even increase the chances of war in the long term. So, what Biden is planning to do, and the order that came out is sort of related, but not exactly what I was writing about, they're planning to do is add more controls on investment that, you know, comes out of the US and goes to China. The order the other day was sort of the opposite. It was expanding, you know, the Cepheus, which regulates inbound investments from China. So this and what was sort of interesting to me was that there was actually an article in the information, they broke the story on Sequoia China ads, which is the separate but related to Sequoia and US investment firm,
one of those raising investors in the world. At one point, there were fears that Sequoia China was almost like too good relative to Sequoia us where it was like, Should Neil Sheridan who runs that fund be in charge of Sequoia overall, then, of course, this whole geopolitical thing got much worse. And I think it was less, much less likely that US would lose its grip on Sequoia overall. And so we saw rule off take takeover, but But yeah, fascinating, meaning drama inside of one of the most powerful, or the most powerful venture investor in the whole world. You know, US and China. That's
right. I mean, yeah. And Eric, you probably know more than anyone about that. And I think what was interesting was in inside the National Security Council, when that story came out and got sort of passed around, it sort of raised alarm bells. It's like, okay, this storied, you know, hugely important investment firm in the US, is now like, amid all the tensions with China, this was back in February, is now you know, doubling down on their, their investments there. And I think it kind of lit a fire to push to push this agenda forward. Some of this was actually originally in the chips Act, or what became the chips act and then was removed. So this is kind of an attempt to do it with an executive order. And what I hear is they want to do it before the midterms. And there's a couple of other orders, too, that we wrote about, which is, you know, one is something related to really to tick tock, it won't. These won't name tick tock or even China probably, but they're really that's what they're really targeted for. It's an attempt to kind of reduce the data collection or sharing of foreign firms with, you know, that are they're owned by parent companies in other countries. So it would essentially create some kind of firewall between the US tick tock and China's tick tock in terms of data collection. So it's kind of a it's kind of a middle of the road approach. I mean, if you remember, Trump actually banned Tiktok, which turned out to be illegal. And it wasn't, you know, eventually, there was going to be sold to Microsoft. And then, you know, the whole thing fell apart Oracle, I
think, yeah. And Walmart.
I think I was bidding on it for a second.
Yeah, better appears it's dark.
When the price really plummeted, I felt like Yeah.
Yeah, very interesting. Consort. Listen, Katie
ran her college radio station at one point, right, you're well equipped to, you know, if you can DJ, you can DJ video consumption for the Western world.
But yeah, I mean, that that never happened. And, you know, I think what they're hoping with Biden's hoping is that there's a way to do this legally, and still accomplish two things aren't legally, no, not to ban it. They don't want to ban it from what I understand, mainly, because that's, that's not legal. I mean, there, there are protections in place, you know, the First Amendment is one of them. But there's also this Berman amendment, which is sort of a Cold War relic that limits limits what the President can do in terms of blocking communication between countries. So, you know, while we were fighting this Cold War with the Soviet Union, we wanted also to allow people to talk to people in the Soviet Union, because that benefited us, like, basically, you can't stop someone from sending like an animal farm to the Soviet Union right away, is the way I think of it. And so, you know, tick tock is I think the idea is to essentially essentially bifurcate the communication part of TiC tock from the data collection, that doesn't exactly get around the fears of tick tock being used as a, you know, a weapon, an information weapon, like a propaganda tool. by China. I mean, that's the fear. I'm not saying, we know that it's
so interesting, because first of all, I think that Cepheus is a little bit misunderstood. It's not a tool meant to ban investment. It's just a tool meant to like say, what are the laws? And how do we make sure this investment complies with the laws and mitigates risk? It's not an it's it wasn't created in order to prevent investment from happening. So this idea of tick tock being in discussion to get this over the finish line is simply like, how do we make sure we're in compliance, and everyone's comfortable is what reads talking about this bigger fear that China could use Tiktok as a propaganda tool to push information into the United States and then control the minds of of tweens? That I think is sort of the more interesting idea, because some might argue that you do already does that. And it is owned by a company in the United States of America. Well, I
think the US government wants wants their wants propaganda tools to be owned by US companies.
And more or less, you know, US media companies. But it's not
that foreign countries haven't been able to use things like YouTube and Facebook to push propaganda. Exactly.
I want to argue about tick tock. But first, I'm very happy Katie brought up Cepheus. Because I feel like that's, that's key to it, and sort of the board, like no
one has ever been happy to any committee to
find it very meaty on foreign investment. The
United States is part of the Treasury Department. But it's like, it's part of the Treasury Department housed in Treasury. It's interagency. That's true. It's a committee. So keep in mind, it's like, when you think about the government, it's like a little, it's nesting dolls. Inside of
ultimate like deep state, like in a certain way. It's like
science. It stands for Committee on Foreign investment in the United States. That's liberal. It's a committee that looks at foreign investments coming into the United States. Its interagency. It includes the Justice Department's National Security Division, it includes the National Security Council, which is right in the White House. It includes national security advisors, and of course, Treasury, because treasury, their larger overarching desire is for investment that will benefit the United States to happen.
For the longest time, like Softbank was very mindful of Cepheus. These are all these words about like artificial intelligence, and just lots of sort of Chinese and Asian investments. Very worried about sort of big stakes from from US players over the years. Well, they
also look at real estate. And I think that Cepheus actually was much more active in the real estate space for a long time than in the tech space. And only, not only, but because since the 90s, with our deepening relationships with countries like China, and our extreme is read alluded to before our extreme dependence on China. For like the business dependence on China in terms of intellectual property just on things like supply chain and on things like manufacturing has grown does even before you get to something like a consumer app, you know, Syfy has became, I think, in the minds of people who even know about this sort of heels accurate acronym became really twinned with technology. And
right? You don't want a Russian or Russian oligarchs buying majority stake in Lockheed Martin.
So then this executive order is expanding surfaces power in some way. Right. Or reader Katie do what's, what's the new power that Cepheus gets?
Yeah, Read. Read the EO. So you'll you'll tell us how this has changed. Cepheus?
No, I mean, the latest, the latest executive order. Okay, well, the one that the one that came out a couple of days ago, which is not actually the one I wrote about, it's Oh, it does.
Okay. Now, what about a different executive order?
Yeah, that's that came, it's, it is related to Cepheus. And it basically expands the, you know, the mandate, like the types of things that Cepheus should look at. So it's kind of like a, like, Hey, look at a broader look at a broader number of things here, like, like biotech, for instance, is something that now, you know, they should look at. So the way I think of it is like, that executive order deals with inbound investment, what I was writing about deals without bound investment, which right now, there's very few controls on, they would also expand export controls. So like the types of things that US companies are not allowed to send to China and other, you know, countries problem countries essentially, would be expanded. And then there's the data thing. So I think what you're seeing is, there's their ideas for new types of of, like totally new categories of regulation, but also expansion of existing ones like Cepheus. If that makes sense.
Reid can just repeat that back to you to make sure I understand. So in the executive order, just public Cepheus, which is this review processing? What can a foreign company invest in in the United States? That is saying there should be more categories that Cepheus reviews simply because technology has changed so much. So maybe there was a time when the idea of a Chinese investment firm buying up shares of an agricultural business wouldn't be a big deal. But now because of the role that agriculture plays national security seems like a bigger deal. So there should be more there or more in medicine? And then what you wrote about was this idea of money flowing out of the United States and into foreign countries and companies.
Is that right? Exactly? Yeah, you got it. Exactly.
And what so what's the level of ban? Are they really going to ban the foreign investment? Or what sort of
I don't think anyone will ever ban for what's what's what's not
the term regulate? Like, it's just going to be scrutinized? And it'll give the power to basically the White House? And, you know, probably other agencies as well, like the Treasury commerce? Yeah, to sort of look at these investments. So basically, they'd say, okay, so Sequoia, has this, this Chinese arm like is that even? It's a separate entity? So can we even regulate that? Like, let's take a look at right?
See, that's my question with the Sequoia thing, because so far as I understand Sequoia China, its affiliated, but the LPs and Sequoia China are in China. They're not US based. And it's an RMB denominated fund. So, you know, there's obviously some sort of almost like licensing agreement between Sequoia us and Sequoia China, but it doesn't strike me as like, you know, the the endowment funds and hospitals that are part of us venture capital funds are going to be investing in, you know, the next byte dance in China. Right? Yeah.
Well, I think I think they're actually worried more about investments in things like semiconductors, and artificial intelligence, quantum computing, they're worried that US money is going to help China like advance their technological know how, and it's not just I think there's a fear that also with those investment dollars, comes, you know, expertise, right. I mean, Sequoia would be able to lean on it, they have a huge network of people in these fields, and could sort of help these portfolio companies.
And it really impacts joint ventures too. So for a long time, there were a lot of joint ventures between us and Chinese automakers, manufacturers, companies like Bechtel infrastructure companies, and a lot of IP gets passed and knowledge to Reed's point, like one of the reasons why there's this big, like, fear of Chinese espionage and US corporations is because they want the fact that we have advanced knowledge in so many areas in order to benefit the Chinese government.
Right. Yeah, I think I think also, just to take a step back, I mean, Katie, what you're doing a good job of sort of like explaining the background. And I think the other thing is just, you know, with the chip shortage with the supply chain problems that came out of the pandemic, I think it's just it's so front of mind now, how vulnerable we are to, you know, disruptions in the supply chain. You know, most of the advanced semiconductors come from TSMC in Taiwan, which you know, is being threatened by China now. Oh, so if China took over Taiwan, theoretically, I mean, they could cripple US industry. Right. There are these now, fears that I think, you know, are pretty are pretty drastic. So I think I think this is like these executive orders when you think about if you think of it from an extreme perspective like that, like they're not exactly these executives are like are very measured, I would say. I mean, there's there are people who really want even tougher restrictions, would you say?
Right, and the restrictions aren't going to help? Because I think I agree completely. And I think one of the reasons why restrictions alone will help is because we're looking at a geopolitical problem. So like, if the issue is the relationship that Taiwan that excuse me, China has with the Greater China region, Stark, strict, business restrictions are not going to really do too much. If China does attack Taiwan, in that case, it's like what we should have been doing is investing in our own high tech manufacturing, here in the United States. Exactly. Because it's not just manufacturing, you know, there are a lot of companies that are not as impacted by the idea of instability in the in the Greater China region, known as I say, greater China, China region, so as not to get a sense of in the mainland,
are huge. Thank you for that
you did mainland China, this
podcast is adamant that Taiwan is an independent country, I don't know.
Our affiliation with China has actually been a very successful joint.
It's really more of a branding exercise. So like garment manufacturing, those those supply chains, and those manufacturing, those factories, that's work that's like lower skilled labor, and you can move it to Malaysia, you can use move it to pack it, we can all go naked for a while. But the manufacturing for something like chips is actually extremely high skilled labor for which nobody in the United States is trained. And I say this, you know, my dad used to work in high in high skilled manufacturing, he worked in an industry that doesn't exist anymore. So you know, rip, but there's no training to work on those factory lines here in the United States. So it's not just a matter of building factories. It's a big educational challenge. And so I think that, you know, again, going back to Reed's point, why be super strict and restrictive when the bigger challenge actually is here in the United States, and like filling in those both supply chains in manufacturing, right.
And let's be clear about what's happening here, from the broader perspective with tech is that there's been kind of a hangover, there was this, like ecstasy over the fact that we could export so much of our chip manufacturing to China to our hardware manufacturing to China. You know, it was this very lucrative seeming market for a while for us tech company. And it was coincident
with the idea that China was going to get algae become more democratic, joined the WTO. And basically, shed all of its global ambitions to take over the world that it's had for centuries. 1000s of years. Anyway, keep going.
Yeah. So So yes, certainly, that didn't change over the course of a couple of years of, you know, bringing a middle class into China and having a bunch of manufacturing and, you know, different provinces. But now I think there's just a huge what I'm just sensing talking to people in tech is that there's a big, I said, like hangover or regret almost in what we have empowered within China and the fact that yes, it has allowed for cheap manufacturing for a lot of us goods in the tech sector, but there hasn't been a level playing field. We can't use China as a market. When I say we I mean like us tech companies can use China as a market to release their their apps and services. It's been a disaster for most US tech companies that have expanded their you know,
not just manufacturing Yeah, Airbnb apple. Q imagine like when Russia invaded Ukraine and apples like we're not selling anything else in Russia. Fuck that. Can you imagine Tim Cook saying the same thing read? What is the like revenue? Were North America still number one, but isn't China still number two for apples? Like, are 35% of all of its revenue?
Definitely. I don't know if it's 35. I have to look at the latest numbers. But I'm, like Tom said I'm an ideas man. Not a facts, man. No, but it is. No, it is huge. And not all it's not just their revenue, though. Right? I mean, if if they couldn't manufacture in China that would triple cripple the company. And the only thing that kind of,
like everyone thinks of manufacturing, but like we sell a lot of shit to middle class Chinese people.
So lot two. Yeah, I think I think the thing Apple has in its favor is like it employs a lot of people there. So that's like the I think that's the one thing that sort of keeping Abla from like,
it needs leverage to Right, sure. The right like a company that can actually have some leverage, you know, over a country obviously not and obviously it's a beloved consumer product. So there is Chinese people want to be able to buy it, too. It's a sign of their global status. Right.
But what leverages Tim Cook have though if there is instability and or violent government, government violence, China, like just because he employs a lot of people, they're not gonna do it.
Totally. No, I think that's it. I mean, if that's the only leverage it's like, Hey, if you you know, if you've heard us you're hurting, you know, a bunch of jobs in China. And to the extent that, you know, the government there is willing to, you know, accept the loss of jobs. Like that's that's kind of it. I mean, I agree
to me the core issue here is yeah, the the inability of American companies to compete fairly in China and the need to sort of turn the screws to China until like, to me, I'm less like, oh, we need to get rid of tick tock as we shouldn't have tick tock as long as like Uber can't compete in China and the the failure of the American government to say, Okay, if if businesses need to cooperate here than our businesses shop right there. And I don't know, I'm not a lawyer. But I find it hard to believe the US government doesn't have the tools to say like, in a given industry, if we're not allowed to compete in that industry and your country, you can compete here like I would I be shocked if American law makes it impossible to say like, I mean, on like, car manufacturing and stuff, or are there all these sorts of like, crud like, we get to look at how you treat our companies in order to decide how we treat yours. Like, I just don't understand why social media and and China is the exemption here?
Well, I think yeah, I mean, I think you're taught I don't think you're wrong. I actually don't know if you're wrong. I think that the the issue with banning Tiktok is that they've they've done it using AICPA the international Emergency Economic Powers Act, which is the framework that Trump used, and that is the framework that the Biden administration will use in their executive orders as well. So they're not laughing about
fuck up the Chinese. Terrible Facebook scandals in China. It's only fair like if we're gonna have tic toc. Like, I just have them both in both countries just sort of running rampant.
I think if we get rid of TiC tock that we would no longer have political manipulation on social media. No, but it would be American companies do it by foreign countries, though. I mean, like, foreign countries can obviously use Facebook to manipulate citizens. I like
the idea of Facebook, coming to China now after they've been drunk on Tik Tok and whatever the version of Tik Tok is, it's not called tick tock in China. But you know, you know, it's because it's such a,
it's such a mind tick tock is extremely restricted in China, like they. Like, I think it's not just that we can't put Facebook in China, it's that we can't run our troll armies manipulate tick tock, so that Chinese people see terrible things about their government and get mad, whereas like, you know, troll armies in, you know, rice or in Europe, can infiltrate Facebook and make us see things that make us better.
I also think people make this into some big, like foreign policy thing, which maybe there is what just the fact that on sort of the minutiae, the Tick Tock is a Chinese company that already has all these strong speech controls over how creative you know, they don't say suicide, they say, all these contorted things. And maybe that's the right idea, and maybe an American but but it's crazy that one of the most important cultural apps in the United States has the norm set in China. Now, of course, I guess this is what every European thinks every day. It's like, why are Americans deciding, like the terms of the speech debate here in Europe, but it's crazy, crazy in America that like, such nuanced speech codes are being set by a Chinese company? Well, I
thought it was crazy. During the Hong Kong protests when you had people in the NBA, I mean, the NBA was being, you know, their speech was being set by, you know, the Chinese government at that point.
I think LeBron James legitimately believed that actually, I think he was speaking from the heart. Like, yeah, let's, let's start looking at both sides here. And these Hong Kong protests. Okay,
that's possible, actually.
I mean, you have a general manager from some NBA team who's, you know, probably has no connection to China whatsoever. Who says, you know, I think democracy is a good thing, right, in Hong Kong. And that's it, like, MBAs out of China.
I mean, do you remember by the way, when John Cena was giving some press conference and a movie promotion, and he mentioned Taiwan, in a way he shouldn't have and then later had to release a an apology for it and did it in fucking Mandarin. Like they had him speak as close to as a hostage video. Like
China, China does not need tick tock in order to force people to report with its norms around how you speak. And
yeah, like, most powerful wrestlers, and made them say whatever the fuck they brought them to their knees.
I was covering Apple when Apple pulled its app or pulled the app that was like the Hong Kong protest app that was allowing protesters to see where the police were. And I get a call from Apple PR, and they're like, briefing me on this. And it's like, basically Chinese propaganda. It's like we've banned this app, because, you know, these protesters were using it to hurt the laws and the countries in which we operate. Yeah, they're like we've been given like, credible evidence being used. Yeah. And I'm like, I cannot believe I'm on the phone with Apple and like, they're just basically giving me Chinese propaganda and
supply chain is in China. And you know, it's your second largest revenue generating market, you better believe that's the thing. This is what I find so fascinating. You know, in the beginning, you said, there are two competing visions, you know, one is to be more hawkish, and the other one is to believe that will just hurt business. And it's like, well, can these things both be true? Because I think that there's going to be a moment where what happens in that region just hurts business full stop whether or not we've been hawkish
for sure, just to make a zoom out observation about the ideology that we're shaping on this podcast. I do think I do think there's a reality that
like, I'm a war hawk. No.
No, and I think this is shared. But I do think there's this growing question of whether we really want tech companies to be responsive to local governments right on the abortion issue in the United States, like how deferential do we want them to be? Do we want tech companies to be deferential in China? I think like the left and sort of the pro government crowd has for the longest time held as like a virtue that the government can bring companies under their thumb. But I think there's a rising question of just who, whether we want these independent tech companies to be sort of sovereigns to talk or something and say, sorry, screw you. We don't have to follow any one country's laws.
No. And I think another way to look at that, because I think that's exactly right. I think another way to look at is where are we right now in, in, in history? Right. So there was I think, many people would say, comply with the law. But then if you look back in the year 1955, if you had companies stand up and say, You know what, though? We actually don't, we don't agree with Jim Crow. And we're not going to follow that law. We're going to break that local law. I think there are some people would have thought that was the right thing to do in terms of history in the 80s. You know, what, we don't like apartheid, we're not going to follow that local law, we're going to not do business with you painful, we would say that's right. So with questions like abortion, do you want any US company much like a tech company or any other flouting a local state law if they think that it's wrong? Or do you want a large multinational company saying, you know, what, we think that what's happening right now, in this other place in the world, and keep in mind, we have a lot of data points to show that, you know, imposing us mores and morals on to another country doesn't always work, Afghanistan, but you know, to say like, Should we be so upset by a human rights issue or whatever, that we're just not going to comply with this with this country's laws? And I think that that's an open question now, because we're still figuring out what's going on historically,
it's funny to me, there's so much press on what these companies do in these other countries and the censorship that they're willing to go along with in places like Russia and China, and yet, it hasn't really changed anything. And it's sort of like apartheid was a was a big public push, right, like a public pressure push. And that's what really kind of turned the tide. I mean, happened on university campuses, and it spread to consumer up. Yeah, yeah, consumer up, and like, it doesn't seem to be happening now. And I'm not really sure why. But the other thing I think about is, and this is maybe taking it in a direction you don't want to go but like, This, to me is the biggest the best argument for something like a new internet, like a decentralized internet, that can't be that can't be censored, because, and also, I don't know what that would look like. And I don't know if it's technologically feasible, but this is like, what I think about when I read tornado
cash, you know, technology or whatever.
I mean, when I think of when I think of, you know, censorship and the internet, it's not like facebook saying, you can't say Nazi or whatever, it's, it's this stuff. It's it's these countries around the world that are able to essentially manipulate, you know, the base of the pipes of the internet, and these large corporations to, you know, to basically bolster their regimes. And I think it's something we should be talking about more totally.
I'm curious, like, Could you expand on that more? Because that's something that I feel like I hear said on Twitter, but then I scroll past it, because it's not enough. It's I don't like it's only 140 characters. I keep going, like, what what, how would that like, just how would a decentralized internet, for example, either free companies or prevent companies from giving into what say, the Chinese government wants?
Well, I think I think the idea is it would get rid of those companies. I mean, the
unsensible, I mean, because if you're like you, the government has to go off each user instead of saying, hey, Facebook, like chase down this user on our behalf. You know, it's like, if every node is sort of independent, then you have to go after the user, right? I mean,
yeah, it will reminds me in a way of like, you know, music sharing at the, you know, at the beginning of the 21st century, where it actually was fairly impossible for the record labels to stop Napster. They had to sue people individually. And what basically sold it for them is that things got centralized again, and music downloading was taken up by all the major tech companies, mostly apple, and suddenly even I mean, first of all, it put it into like a legal space but also centralized it and it seems like what you're talking about read would again, sort of decentralized things in a, I don't want to simplify it too much and say like, it's peer to peer hear again. But that's the idea, right is that it's kind of individually these, the, you know, the data and the conversation is transmitted across smaller groups of people. Yeah, it would, it wouldn't involve large centralized company. And
I think if you include things like satellite internet, along with, like decentralized protocols that wouldn't allow for control. I think you could see, theoretically a world in which, you know, there, it's impossible to set. I mean, and that would create other problems, too. I'm not saying that's a utopia, right. I mean, there are certain types of speech that probably should be censored, right? Totally, you know, I don't know, I'm just, I'm throwing it out.
And it's not just speech. It's also like this larger question of like, what makes us feel like we're part of a community. So I was like, for something else. I was just rereading this. Liz, Bruning op ed happen after you've already it was like the country that kills his children and has no hope, or I just butchered the headline. But basically, part of her thesis is that we do live in a society in which we face our future together. And I would argue that the more and more and more we live online decentralized, allying ourselves with communities far away from one another, and sometimes not even the United States. I think it's an open question whether or not we as Americans want to face the future together and figure it out together, and feel like we have a shared stake. And I think with a more important thing, that even if you don't want to face the future, together, you realize you have a shared stake with your neighbors. And I think that the more and more and more we erode it, that the harder it is to see a country trying to solve anything together. So I think it's not just like, the matter of whether or not some speech should be censored, which I would largely agree exists, that's kind of search speech exists. But like, as we decentralized ourselves from our physical place, what impact does that have on our whatever it is, on our community?
It's pretty ironic to me that once you had the ability for anyone to communicate with anyone, basically, on social media, etc, we actually became much richer, we were driven farther apart from each other, you know,
well, because the tech itself is not really especially when you look at tick tock, it's not that much about person to person communication. I mean, the idea of following is almost going out the window in favor of algorithms, because the way people prefer to use tick tock is just like showing their interest, and then having the robots figure it out for them as it goes on. I mean, we we had this really interesting conversation with Taylor Lorenz, a couple of weeks back where she was bringing up this I thought, kind of amazing moment at VidCon. You know, like the influencer Comic Con, where all the Tick Tock stars that were there had basically no lines with people, they had no fans, people wanted to line up and see them because people have no attachment to them. It's just sort of entertainment that shows up in their feed that gives them a moment of dopamine hit joy, and then they move on to the next thing. And I think, I don't really know what the point to this is other than like, I don't think social media as it was conceived, maybe in Zuckerberg, conception, is that relevant anymore, and we're moving away from connection as the main force of these platforms, because that's not what the platforms are optimized to do anymore. They're just optimized to get watch time, essentially, and give us moments of entertainment. But so it's fundamentally I'm
cheering for the erosion of like, local community over global community like what yeah, I'm, I'm more aligned in ideology, probably with this driver, Chinese elite, who are like doing business all over the world than the person who's like, happy staying in their hometown in like Middle America,
which totally is fine. I'm just saying that once you start, once you start saying, Well, I just have more in common these people, do you then have the community will, whether it's in your town, or your state to pass a gun control law, or you're like, Fuck it, that's just the world we live in. Right? That's the issue. I'm not saying that, like, of course, you have more in common with people who aren't. I mean, I grew up in a small town in Vermont, you grew up in a small town in Georgia, we probably have more in common with one another than we do with a lot of the people
that grew up and we would write that we would.
There are still things that because I'm old, I still feel very connected, do a small, much more blue collar town in Vermont than I do in a lot of ways to the people I spend a lot of time with in Washington, DC or New York. And I think it is that connection that makes me want to solve a problem like, well, I don't want kids in Vermont getting shot. I think that's bad. But the more and more I don't have that connection, then I'm like, Yeah, but problem
is that we have these, the government is set up, like we have a bunch of Californians upset about what's happening in like Alabama, Mississippi, and it's just like, to some degree, the composition of our government doesn't really align with this society. We better just if we just like had governments that were more reflective of the populace. I mean, the the minority rule in the United States being it being a key problem and to solve that I'd be more inclined to split it up then to live under minority rule, you know,
yeah, and you're right, like so if people like I think education is an interesting problem, like very wealthy people in California and New York and stuff started trying to buy local school board elections in states where they thought they can make more of a difference in California and New York. But it's sort of like, Well, maybe if you felt a little bit more attached to your community, you could just try to solve the problem of that, like state governments in sort of like what's going on in states has been really impacted by the phenomenon. Just describe it. I mean, I think it's another version of, well, the more we see ourselves as detached from our communities, and more, you know, like minded with people who are not anywhere geographically near us, and we want to affect change at that level, there is still some governance happening below, you just aren't not attachment, and then you get kind of surprised when worked out.
But back to how that related to tick tock and Tom's point about the line, you know, the short, the short lines are no lines to see the Tick Tock celebrities. I mean, I think there is something about tick tock that's missing that kind of that that attachment. And I think that that's not that that's going to be their Achilles heel. But I think it's important to remember that, you know, there are all these new apps always coming up. And you know, the youth, whatever the youth culture is, at the time, like gravitates toward these apps, right. And like, I remember, it was interesting at the code conference, seeing Evan Spiegel up on stage getting all these questions about tick tock, and I could almost see like him thinking, like, I was tick tock, you know, like four years ago, like everyone was, like, Snapchats gonna take over the world. And now it's sort of this also ran, and Facebook is still just as powerful as they were then. And, you know, I could totally see that happening with tick tock. I mean, eventually, like, I don't see that becoming the new Facebook, I see it becoming more like a Snapchat in the future as some new thing comes out that attracts the young people.
Yeah, I actually had a piece this week that showed that tic TOCs, year over year growth is slowing. So it's not like, you know, I think there is an expectation that it's going to continue on this torrid pace forever. But, you know, that's just not possible in terms of the law of large numbers. And there probably is also going to be like a generational issue at some point with the users. The there was a pretty fascinating hearing that happened this last week. It was another one of those, you know, Congress drags a bunch of social media executives and brow beats them for like, a couple of hours on C span to type hearings. But this one was interesting to me, because Vanessa Papas, who was the CEO of tick tock was there, and she really got a grilling from a lot of the top lawmakers, including including Josh Hawley, who, basically, I mean, he went like toe to toe with her whether or not we can we go toe to toe with the senator. Basically, he was trying to get her to answer the question of like, how many people in the CCP worked for tick tock or worked for bytedance? Which, you know, she's like, doing her best to avoid that question. Because, you know, we don't give, you know, whatever party affiliation tests, the people that join the company
love, like, I don't know all of them. But they're right. There's like, not only that, you can be like, I'm Chinese, but I'm sort of like not into, like I, I support a different I support a different political
party, and I'm with the Greens actually, a lot of greens over and bytedance know, there's a bunch of I'm sure the place is mostly full of, you know, CCP members. And she's like,
Alternative. You are CCP member, essentially, if you're a citizen in China, you don't be like, fuck it. I'm a libertarian. He's
obviously been saying quote,
I mean, you're saying this to Haiti. But I mean, it is the wrong question. Because totally, if you ask people, if you ask people in the US, like, you know, how many, you know, how often do you like comply with national national security requests from the US government when it's like, like, all the time, like, that's what we do. We're Americans, right? We're gonna support the American government. I think it's just like, all these things about like, well, there are laws in China that force these companies to share data if they are asked, and it's like, we basically have the same thing here. It's just the difference is, you know, we're a country, we're a democracy, we have rule of law, you know, obviously, there are flaws. But like, we, you know, we're not we trust
our government, because it's ours. I mean, to some degree, I think what we're saying is we don't need the questions. It's like, it's obvious, like, yeah, China is a controlled country by a single party that's, like hostile the United States in a lot of ways and like, why do we need to interview tick tock about their policies to come to a decision, like, either it's like, we're okay,
because they want the audio bites, they want to
just like, do it or don't but like, I don't know what information you're getting out of this?
Because Josh Holly's gonna probably run for president and so he's gonna use that clip. It would
be great if a Republican had a you know, a policy agenda. I'd love to see it. You know, Peter Thiel actually gave an interesting speech at the National conservative convention. And he Well, of course, most of it was spent criticizing the left which he basically described as like, the California ideology. The sort of rallying cry of this speech was that Republicans are fundamentally running on like nihilism. They don't have any real agenda they need like a substantive policy agenda. No. So it was it was sort of, I'm not the only one saying it. I'm saying Peter Thiel is also critical of the lack of Republican agenda at the moment. Anyway, right.
Yeah. The Peter Thiel ideology though, is like getting lots of like German blood infused into like, our eldest smartest Americans that we can rejuvenate our, our thinking class. Okay, okay.
I like that articulate.
Yeah, no, but But anyway, just to finish it off with tick tock, I mean, I feel a little bit for Vanessa Papas over a ticked off, because she's really just like a punching bag for these people at this point. And I don't think she has, she's getting paid for
the role of anybody who goes before congressional panel,
right. But she in particular, because she has no control over this app. And what we've seen with with with tick tock is they've tried over and over again, to put in all of these safeguards and transparencies and things that they claim can do to avoid, like some sort of, you know, some sort of incursion on American data. But when it comes down to it, this is a company that is owned by a massive Chinese, you know, a massive Chinese company whose like own CEO is sort of afraid of the CCP. And so there's just no way you can put any sort of safeguard in there that's going to one pass muster in the US, but also meaningfully change the fundamentals of how this company works. And so it's all kind of an insane kabuki theater that, I mean, we sort of touched on this earlier, but I just don't see how it doesn't end toward some sort of like amputation. And
you read his pieces saying that he thought a ban was coming or I did he say expressly? It seems
like it's getting bipartisan. Right. I guess that's sort of the point is that you're seeing No, I guess ban is a tricky word. Because as you read, and Katie pointed out earlier, they're like First Amendment issues when it comes to that, but I just don't see how we're not going to end up revisiting the entire cycle that we had in summer of 2020, where it really looked like tick tock was going to have to be amputated.
There would have been funny if Trump did it. Like it's classic Trump that it's like, do try it do some, you know, like, it's
complicated. Well, he
couldn't do it. I mean, he tried,
right, you actually have to be able to get the bureaucrats below you to do it. You know, he
was basically going to lose, yeah,
he actually had to work through the levers of government to articulate an actual threat. Like he's like, he's like, they're a threat, but then the people on this committee have to actually show wear it as a threat
he was gonna lose in court. But the bipartisan point is a good one. I mean, if there are new laws created, right, the right law could potentially indirectly or maybe directly result in a, for all intents and purposes ban of TiC tock, right. I mean, that could happen. But I think anytime you're talking about laws and bipartisan, you know, like high profile laws being made, like it's a big issue, right, so I'm not holding my breath. But I do think something's gonna happen. I also I wanted to ask you guys, though, what you think about this, because I, I have this question all the time. When it comes to data and tick tock, it's like, well, we read all the time, you know, the New York Times does a great job of writing stories about the data that you can just buy on the open market, about people that's been collected from all these firms, and then combined, and it's like, couldn't they just buy this data, and China's
not restricted from buying that data, so they'll kind of don't need tick tock for collection, that is the thing that like, I think that no politician wants to say, because everybody's trying to run on this issue. But like China, it literally does not need to have any apps in the United States, it can just buy the data collected from all the other apps in the United States that then bundle it and make a significant amount of their revenue, just selling it. And that is fine. That's an open global market, because hackers buy it. Criminals buy it, why not? The Chinese government, they're no restrictions.
I feel like my concern is, it's not about the data. It's the control to me, I mean, not to, I mean, I know people talk about the data. But like, if Tiktok said, Oh, we want Americans to think 20% More about sports and 20% less about politics, because that's an art, like, that would have a huge impact on you know what I mean? Like, I just feel like there are a lot of
already do that, like, yeah, Katie makes a good point. Yeah,
but at least Facebook does it Facebook does it because of some like, you know, terrible corporate interests, that's but to have faith to have tick tock do it, where it's like, perhaps in the national interest in some subtle way, that's like, that's really our that's, that's what the CIA wants, you know, like that has
real power to. I mean, but it's American. That doesn't mean it works in American interests. The idea that Facebook is working in American interests, has been described so many times,
Ben Shapiro into your veins, like,
I mean, just the amount of effort it took to get social media companies to not show all those beheadings that were being used in ISIS recruitment for months and months and months, and they refuse to take them down. It's like, anybody could tell you that that would be in the national interest to not be used as a tool to recruit for ISIS. And the tech companies were told that and they even agreed, but they were like, there's a lot of traffic to these beheading videos. So I mean, I don't think that you you could say that just because they're American companies are working in American interests,
but I'm sure this argue myth that you too are having right now is the right argument to have. Because if if Katie's right, then there's really no point to doing any of this until like any of this tick tock stuff until you shore up the whole market, right? Like you have to fix data collection on the whole from any company and you have to fix the abuse and of manipulation of social media. Whether it's based here or anywhere else,
my face is gonna get spotted, I want to spite my own face. I don't want someone else biting my vase,
we could be in a really funny position where Tik Tok is far more regulated and far more safe than any American company.
Right? It's like it's like you have a little tiny leak that you're plugging with your finger. And meanwhile, like, there's just waves crashing over the side of the boat and like sinking you. It's like, what's the point?
Right? I can see it.
I want to see the moment in America, let's just go down this road where they met somehow magically do decide to ban tick tock the, like, 24 to 72 hour period where the teens are, like, not allowed to
tick don't know i gonna do I'm gonna be like, a lot of my thoughts. We're gonna have like a little revolution. It's like, what are we supposed to do now? Well, like, if
you're smart, you'll lead that revolution, because there's gonna be 10s of millions of people who are going to go through serious withdrawals that have no idea. You know, how to manage themselves on a, you know, an hour by hour by minute second by second basis. It'll, it'll be a crisis of its own. You know, it's like,
five minutes until, you know, the rise of Yik Yak again.
Wait it out? That's right. Right. Okay, so in our last couple of minutes here, I thought we could do a sharp, sharp swerve away from tech and talk a little bit about philanthropy. Do you want to talk a little bit about Patagonia? Yeah,
sure. Is a controversial article now.
That's okay. Why is it controversial? Explain that part to me.
Okay. Can we just quick quickly to find it before we get into the credit multiple times.
And you're arguing about it, hopefully somewhere some DM thread. Okay,
so the CEO of Patagonia decided to sell his company to a trust, a sort of trust and series of nonprofits that will basically push all of the company's annual profits, which are like $100 million a year to go towards efforts that are to fight global warming, just pro environmental causes. He's still remain has voting control of the company, but it sort of has raised the question again, of philanthropy and whether or not this was truly an altruistic way to take his large assets and fight global warming, or he just wanted to do a giant tax Dodge, and avoid putting that money through the levers of public control that would have probably done
just to be clear, the extent it's a tax dodge, it's that he didn't like sell his company. It's, it's not like he's using this to hide taxes. It's that if he had exited a normal way, he would have had a big tax bill, which to me is a pretty big intellectual contortion as a tax dodge a tax judge to me is normally you have a tax bill and you pay less on it because you're using the tax system not just like, you're not selling something you're not making money off of it.
Yeah, there's there's complications around that in multiple ways. And also, I do think we can just add very quickly here that this is like a couple of weeks after Republican or conservative billionaire one of the bad guys Yeah, one of the bad guys basically the same thing. donating his his his his company to us a 501 C four. Oh, yes. Which all of that money is gonna go towards, you know, fighting, you know, transgender bathrooms or some shit like that.
Well, yeah. Against voting rights against climate reform against what's the third helping? Oh, helping fucking the Federalist Society or whatever herbs stack the court with Republican judges?
Yeah, it's like, it's like Godzilla and Kamera of billionaires on the left,
just to spoil my framing. If it's not obvious. This to me is the obvious, like, good, bad. What's the difference with journalists? It's like, I
want to I want to cut to read on this point, because, you know, longtime outdoorsman, wears a lot of Patagonia lives in Marin County, the Patagonia capital
is the only one among us actually enjoys nature on a regular basis. The rest of us,
do you disproportionately buy from Patagonia and for your outdoors where
I don't think I own any Patagonia stuff. But I do. Like I think I think vancian Art is like the real deal. I think we kind of all agree on that. Right? I mean, we're not the argument isn't whether he's like, but I
have people who are like,
this is why I'm so curious. I'm like, What's the controversy again, but keep going
into controversy? I think the controversy is framed. It's more like it's more of a criticism is more immediate criticism, right? Because the New York Times article, the tone of this, this article about Shannara is like very different than the tone of the one about the Republican donor. And it basically the David
gallows at the New York Times who is like, what his column was like
columnists? So he has a voice. He's a
professional, of writing very positive things about billionaires.
I think there's one I think there's one question In the, in the New York Times article and it
was not get hired by the New York Times at this point.
I know, I think that he in describing the tax liabilities, he sort of described, I think the argument is that that I saw from some tax experts on Twitter is that for all intents purposes, the tax liability issue around what, you know, the Patagonia situation and the one with the conservative company, is basically the same. And yet girls described it as you know, Chouinard basically paying all of his taxes and not trying to avoid any taxes, whereas the other one was described as, you know, a series of unusual financial transactions to avoid taxes and dark money. I think there's a question there, but see, the dark money part of it, that criticism doesn't make any sense, because they refer to the Republican has dark money, and Shannara says, you know, whatever, philanthropist, and there's a very different a big difference there. Because the times basically uncovered that whole, all those transaction was a dark. They were right, it's like you if you give away your money, right, and you say
she just gave it to her. Yes, ma'am. So it'd be a totally different narrative.
That's your analogy.
If you say I'm giving away my money thing everybody likes? No, it's not that it's like, if you say, I'm giving away my money, and here's what I'm giving it away for. And I'm going to do a press release in an interview about it and everyone can know, then is it really dark money, whereas in the in the other situation where you have this Republican donor, you know, it had been secretly transferred to a 501 C three, and then secretly sold to another company. And then the proceeds were secretly transferred back to this charity. And it was like, it was all done in secret. And the only reason anyone knows about it is that there was some insider who leaked the tax records. So to me, that's the deficit
is either one c three or 501. C four, five,
C four was the
Chouinard I don't I'm assuming that it was the same thing with
both. They're not like nonprofits, because they
are able to give unlimited political donations to PACs. Right, which could be, you know, if you wanted to could be secret, right. But the difference is Patagonia doesn't want it to be secret. So I think that's the I think that's a huge difference. It's like if your paperwork basically allows you to be dark money, but you don't want to be dark money. So you announce it and do a big article, your time's money anymore. That's my, that's my opinion. And I was
thinking we told you.
We've I actually did reporting on this for this pocket, I emailed Patagonia and I asked like, do you know, are you going to basically be transparent? And like, tell us if there are any other donors, you know, or if you give to Super PACs, and they basically were like, Yeah, we're, you know, we'll tell you what we do, but they have no reason to not be right. Because their whole brand and their whole, you know, thing is like, you know, they want people to buy their stuff, because they're doing this work this particular work, whether you think it's good or bad. Whereas on the Republican side, it's like, there's a lot of obfuscation, a lot of because they don't really want their motives to be known. Right. They want there's like, all this astroturfing that goes on. And so I think that's the I mean, you might agree with what they're doing ideologically. And that's fine. But like they it is all done in secret. And that is the dark part, right?
I guess, like my argument here. Also, I mean, there's the other part of this, which is like our, you know, 501 C fours, or trusts and other kind of nonprofits, the best stewards of this capital in order to fight global climate change, rather
than just going to the tech rather than just having government say,
Well, if companies aren't going to pay their fucking taxes and want the government distributed, I guess it is what we've got.
Right. But it seems I mean, it gets,
we didn't just pass a huge climate bill, to be clear. I mean, we were so used to nihilism about the federal. It's not. Right, we did did, but we didn't do it, you know, like,
like, there's no question that the actual ability to fight climate change, which is a global apocalyptic issue, you know, requires deals made between like, you know, India and China and like, huge emitters of carbon into the atmosphere that no, you know, nonprofit or trust is actually going to be able to stop. So if you're if your true goal is to stop this global issue, I don't really think this is a matter of like billionaires putting a little bit of, you know, or all of their money towards these private institutions that are going to be you know, they're not going to negotiate with the Indian government. So like, have them invest more in renewable, but it's multipronged
I mean, I agree completely. Patagonia is not going to solve climate change, and they're probably not even going to make it dent in climate change? I think, yeah, I think what it's really about is, it's like companies never have happy endings. And I don't think Chouinard wanted to become Ben and Jerry's and have his company sold to Unilever, you know, which is what happened, like against their will. And then all of the things they stand for, basically go out the window, because like, eventually, that's what would have happened, like Patagonia would have been, if you didn't do this, they would eventually just been bought by some private equity firm, and they'd be sold in target. And like, you know, none of this stuff. He's
Sam, Sam lesson had a provocative argument that I think is correct, that basically, if they wanted to maximize the help for the environment, they would have sold the company taking the cash, and then do whatever they want, and that paying out whatever, like 100 million dollars a year is not the best way to help the environment. And like,
wouldn't he then just get a one time payment? I'm not sure. Yeah, directly with the company.
I think they give it like a VC, you know, it's just like a better exit. If you sell rather than if you go
to like, the company really gonna be really well run in this structure. I think a key piece of this,
he's still running it, he still has voting control,
right? If the company is well run or not, well run, who knows. But like, that's like saying, the Harvard endowment should just be like a one time thing and like, it shouldn't invest flow. It's just yeah, just get a giant pot of money, and then just spend that money for the next 100 years. You know, it's cool. Doesn't make any sense.
But I think part of the issue is that Patagonia wants to run the business in a way that it's like a great deal, you know, employees get paid above market and treated better than they would expected another company. So there's sort of two causes of Patagonia one that they think the company running as it is, is a good thing. And that like they have a community do people get treated well, and they believe in their products. And to this, the environmental payoff, which used to be with the family got paid. I mean, I think it's pretty good. I think this makes sense. I mean, it's nice to have a company where people get it.
Like Patagonia's goal was to have happy
employees. Yeah, they were one of the first companies to do that, too.
Right. Their goal was not to be Walmart, right there. It was that bad. Like, it's his company, it's his he wants to, he's like, this is my company. This is my goal. If we're
so cynical, the reporters can't be like, This is what being good in business looks like. I just feel like we have both sides. There's we're just like, part of journalism is trying to clarify. And if we're like, so confused, if we're like, oh, I don't know, we need to just like question everything. You can't be like, Oh, not taking the money for yourself, giving it to a cause that most people think is good. Setting up a company that's good for your employees being treated like read saying, being transparent about what you're doing and proud of it and saying, I don't want to be rich and and sort of tacky to be so rich, like those are good things, we should praise those. And if we can't do that, journalism is failing. And we're just like, we believe in losers. So like,
I totally agree,
that we've been brainwashed, especially as business journalists into believing that maximizing profits is an ultimate good, and that there can be no other good,
right? If you think of it as like private equity, you're just like, well, he left money on the table. That's effectively what that's saying.
Exactly. And that's an I think that like that, even that way of thinking it's funny, there's a book on Milton Friedman that came out, I think, last year that before the year before that really attacked this idea of like, of profits and virtue being the same thing. And I think there's another book that's coming out soon, that sort of from a different angle from like a more data driven angle attacks the same thing. So I think I'm hoping that there's a cultural shift away from this idea that has had a stranglehold on culture and on business reporting, as I'm as guilty, it was anyone that maximizing profits, maximizing profits for shareholders is the ultimate good and your ultimate duty as a CEO. And if you're not doing that you're doing something wrong. And I write to God that I did die as a fucking
company still needs to be well run and profitable. Absolutely. Absolutely.
You can be Well, Ben and Jerry's is a great example. It was a well run company that made money just didn't
profit. Well, Max, you can go round in circles about this. There was a great presentation and code I read down Have you watched it by NYU professor, whose name I'm blanking on that just like the ESG shareholder capitalism movement, I think is somewhat manipulative and give CEOs a lot of control to justify ESG ESG you know, environmental, social, like, like these sorts of stocks that are picked based on how like good for the environment, they are, but like, somehow Tesla's never on the list and like, like gas, oil and gas companies are I mean, there's a lot of like, I don't know, anyway, I still think I believe in profits, but I think this is aligned with like a profit.
Well, I don't I never said in anything, I just said that profits are bad. Okay. I mean, I'm saying that we believe as business reporters, that maximizing profits above everything else. So paying your employees as little as possible, not giving them health care, not giving them constant schedules that they can rely on.
The profitability is because it makes us objective,
it has been squeezed out of this company. And that to go from you know, making Like $2 per share in earnings versus the dollar 80, because you wanted your employee to have health care what the five,
I mean, like, I don't think most business reporters have this idea. We went through this, we have all these labor business reporters, we had all these No, no, I believe we don't.
We don't intend to have the ideology we don't intend to. That's not how we think about it. When you're writing your average earnings report as a reporter, right, you're like Starbucks, you know, did X, Y and Z, it'd be earnings. And so you start getting getting into this mindset that like, because they beat earnings by a penny a share, the company is doing well. And you're never incentivized to look under the hood and be like, What the fuck is Starbucks doing to its employees? Like, isn't enough? Would it be net? Would it be okay for them to not beat by a penny a share if they allowed people to have a regular schedule?
And and are they a good CEO? Right. I mean, that's like the mark of whether or not they're a successful CEO is whether or not they're maximizing shareholder value, and, you know, dividends and other aspects of their profit going to pay, you know, like that. That's the effectiveness of their of their job performance.
I think you're right, Katie, I think I would add, though, there's another type of reporter who is also a problem, which is the one who is sort of anti capitalist, or, you know, doesn't believe in in like, you know, profit is the ultimate motive and wants to see companies do altruistic things and then gets like sucked into these like total greenwashing, like marketing ploys by these big companies that, you know, then write about, like, they are altruistic. It's like, almost like an aspirational thing. And the sad thing is, and this, Eric, you kind of made this point, it's like, somehow we have a hard time telling the difference between the greenwashing and then like, genuine efforts, like Patagonia here, like with somebody who I think is the real deal, you know, doing trying to do the right thing. It's just, you know, it's just is kind of sad,
right? The way I see it, too, is like, I think what you have to accept with Chouinard is that he's a capitalist. And he is going about this in the best possible way that capitalism will allow for, which is putting this company in the, you know, in the responsibility of or like, like with the stewardship of someone whose sole goal is to further that initiative. Now, if you don't believe that
capitalism, what's what's the best version after that, like, well,
if you don't believe that capitalism is the right level of global warming, I
know I'm sick of this, like, I'm sick.
So that's an argument you can have, though, but I think I think the mistake people make is thinking that there's some better way within the system, right, he could have done it, which I just don't agree with.
What's this magical new system like,
like they could have done is run for office, become a senator and pass legislation. Other than that he's using the tools he's given like, I think he should,
I think he should be given more than just one senator. Right? He'd have to
clone himself because 20 senators from key swing state, and
by the way, if their profit was being used towards that technology, I think you have something here, I think it'd be a real surprise, if Patagonia was secretly working with, you know, CRISPR and cloning a different direction. Yeah. But no, I think, yeah, I guess it's just more like, accepting that the system has, this is the best possible outcome it could have. And if you believe in it, then it deserves. It serves accolades is sort of where I stand with it all. Also, we should acknowledge that it won't do anything global warming is inevitable. But that's a side point.
I just think it'd be so incredible, if Patagonia just keeps on going forever, like as this great, you know, employee friendly company where people go surfing at lunch inventor, and, you know, they sell cool clothes that, you know, high end or whatever, and, you know, they try to do their best, they're not going to obviously save the world, but they'll try to do their best. Like that would be incredible. Like, that's a result I never would have would have would have expected. Yeah,
in small businesses or, you know, like, it's not that small. What it's like a $3 billion company. But yeah, we want more companies of that size. To succeed. I think that's, it's the dream. So yeah, we have a moment of optimism here. And I think he's still scrambling to find some way to be cynical about it. But
as I've said, If I'm gonna if I'm gonna believe in the system, then this is the best possible outcome. Yeah, this is not the podcast to take down the system. Well, look, we got exactly we wanted out of read, which was with some interesting thinking, we got some, some good thoughts. We got some optimism here is everything you wouldn't get out of me, but you gotta have a credit. Anyway, thanks. Thanks so much for joining congrats on the launch of some of
Windsor launch. Do we know is there a day it's
gonna be next? We haven't announced an exact date. But you know, you know, we'll say in the fall, not exactly sure what I'm allowed to say right now. But this was so much fun. I you know, it was great. It was like, you know, even better than a phone call catcher.
And your kids were not like breaking down the door trying to get in. So I'm glad we gave
you she's actually kind of scary. Yeah. What's going on out there.
I love to imagine that our phone call catch ups are just like, let's argue about the substantive issues for like an hour and
28 too much.
Right. Exactly. Right. All right. Thanks. Thank you. Bye. In Silicon Valley Goodbye, goodbye. Goodbye. Goodbye. Goodbye. Goodbye. Goodbye.