Tariffs, DOGE & Fixing America: Peter Thiel's Skeptic Solutions

i'm into winning and into ideas i like both this is where you can do new things this where you can build new companies how do you decide what to focus on what to work on in our society people tend to

overindex on these sociological factors what's popular i would tell people to go into the place where I quibble with the name of your show is that uh at the extreme optimism and pessimism are the

same thing when we started Palunteer the idea of trying to do a military related software startup people thought we were insane yeah we had to sue the army all our consultants quit can't sue your

customer if Austin can be fixed you you'll be the one to fix it if it can't be fixed I'll be the one to have told you so this is Peter trolling me ceo and Cole Brown

[Music] now I'm here peter Teal is truly one of the great minds of Western civilization he's been an important mentor to me someone I've been lucky to get to learn from and

partner with in business since I first came into the business world 20 years ago he's constantly reinventing himself he's constantly exploring and looking at the world from totally new angles he's been successful again and again and

again in a variety of different areas and it's always a delight to get to talk to Peter to get to hear about what he's thinking about what he's pondering and to hear what's next for our civilization to get to hear some unique views he

always has he always has an orthogonal take on things and he's always working on the cutting edge of what's going to happen next in the world let's hear from Peter Teal welcome to American Optimist really excited to have my old friend and

mentor and American legend Peter Teal here with us on the show yeah Peter I got to describe you as founder of PayPal and and Palanteer and Founders Fund is how how else would you describe yourself founder investor i don't know i like

figuring things out where the world's going i'm I I'm into winning and into ideas i like both winning and ideas i always think of you as kind of an applied philosopher but you don't like

the term philosopher it sounds really lame actually well you're in Austin for a special lecture series at UATX let's start there just briefly what's been your impression

of our new university and the students it is it is surprisingly strong i uh I I you know I I but you know Joe I I I've told you before that if if you don't pull off University of Austin if you're

not able to create a successful university at this time when they're all committing suicide engaged in self-destruct uh it is like uh it's like

an absolutely hopeless thing to do so uh um but I think um uh yeah I I I think the the caliber of the people is is is is really high and

I've I've done a decent amount of lecturing speaking at uh at different universities in the last uh in the last few years and it is it's just it's just

striking how there's um it's very unclear what people are doing uh it's you know it was it was a big achievement in a way for them to for students to get

into you know elite colleges like Yale or Harvard or or Stanford um but uh they're completely lost once they're there um you know high school still has

an organizing function for it where the point of high school is to get into college and then um college you know elite universities I I think the

organizing function 50 plus years ago was you were supposed to get into the the elite in our society and um and that has completely broken down you know

there was there was an Alen Bloom speech at Harvard in the 1980s where uh he started with this obnoxious framing it was my fellow elitists because everyone at Harvard pretended to be egalitarian

but they were secretly elitist and I think uh I think you couldn't give that speech at Harvard today because uh there's nothing elite about it nothing about forming an elite uh you're not you

can't even pretend it behind closed doors or or anything like that and uh and so and so for the next generation of people going into these places uh they're just they're just really lost this is unclear what to do it's interesting a lot of our elite

institutions are broken down where they're not as Yeah but they're not they're not they're not elite institutions they're not anymore a lot of the institutions that run our society have kind of broken so they're not elite and of course of course the the institutions they they feed into are

probably also much less elite so I don't know 1950s and60s the CIA was elite and you know people at Harvard and Yale would would get in there at this point probably I don't know they probably done

too many illegal drugs to to get into CIA you probably wouldn't want to get into CIA it's not elite anymore but you know there's there there no real elite institutions it tracks into there were all these things around it that were the

best things in our society that aren't anymore so so stepping back a second then is the question we have a lot of builders and investors in our audience and we have these kids at these top colleges some of them are pretty smart assume you're talking to like a smart ambitious person how do you decide what

to focus on what to work on in our society what should their goals be at this point you know it's I I'm always I'm always so bad at the sort of how to how to help

advice but I but I but I I I would I would say that for the last 25 30 years

uh tech um meaning broadly you know computer science software internet mobile

internet uh now now crypto and AI uh and the and In the last few years this has been this there's been this has been sort of this this one vector of of progress in our society this is where

you can do new things this where you can build uh new companies uh we can debate you know whether it's big enough to take our civilization to a new level or whether it's just big enough to build

you know companies that are worth billions or hundreds of billions or trillions of dollars um but it's been sort of the one place you can um meaningfully do things and then almost

everything else is uh is is somehow stale sclerotic you know uh it's extremely malthusian in practice you know I was I was I studied philosophy as

an undergraduate and then went to law school which you know I didn't realize but when major in philosophy as a sophomore you're actually deciding to go to law school and then you sort of get

narrowed um and in theory law school gets advertised as this broad form of graduate education but you just get narrowed into being a a corporate lawyer

and it's probably of the you know law banking medicine consulting those are like the four big tracks you people had at Stanford in the probably in the late 80s when I was there probably also in

the early 2000s when you were there maybe twothirds of the undergraduates were were on one of those four tracks um law is the one that's held up the best I would say and it's still pretty you know

it's pretty unhappy i would tell people to go into tech yeah that that that and that's that's broadly what you're supposed to do um and you know it doesn't necessarily mean you should

start start a company but there are you know there's sort of a a range of of these companies you can work for and it's it's surprising how much that's still not the narrative you know

especially like if you're if you're at the I don't know at the at a place like Harvard my my impression is they don't even know that Zuckerberg

created meta Facebook at Harvard it's it's like this is this is they're disconnected from they're disconnected from that they have not even caught up to 2005 so at the time I was we were working I was working for you working on

the hedge fund you were invested in Facebook you're doing other investing and we decided to really go all in and spend a lot of time on Palunteer why why was that the right choice then as tech but go more specifically like what what

what was what was your high level around that at that time how were you thinking about it what what gap were we going after it was very broadly uh government and then it was within that it was

defense uh more narrowly it was sort of the the um intelligence community that sort of adj you know defense adjacent uh I you know it was it was a couple of

years after 9/11 we're sort of starting it in 2003 2004 and uh there were all these ways that uh I felt that we didn't you know

that we that we had these very low tech and very privacy violating solutions for the terrorism problem you know it was it was annoying that you had to take off

your shoes at every airport which was like just not security but it was this incredibly intrusive security theater and uh and then yeah the the question

was could you do something where you'd have you know way more security with way fewer um you know technologies doing more with less and so the the terrorism context was could we have more security

against terrorists with less intrusive um civil liberties violations and then um and then and then there was broadly this question you know was was there

some way to to reset all these things in the government and uh it was a black box and you know we did not know whether places like the CIA and NSA and places

like that had you know some super duper computer working in the background that was catching all the terrorists um we sort of suspected they didn't um and um and then it took it took a while to

figure that out but uh I think our suspicions were probably correct yeah we saw them doing a lot of things that made us suspect that they actually gotten way behind Silicon Valley and there were I mean there were details that you know it was hard to say you know with our I

remember our first trip to Langley in uh in 2000 2005 we got an inqel to invest and you and I were there and I think it took us about a day or two to process but you know at the end of the trip it was like do you want to come do you want

to buy some stuff from the CIA gift shop and it was like you can get a windbreaker and a CIA cap coins they were kind of cool I think they were half of them were made in China which was you know but but um and then of course there

was probably some you know there's some steelman version where the the it was just a decoy and there was really a lot of stuff going on in the background but uh do you remember the doors all had these like eye detectors on each of the door that you're supposed to scan your

eye to get in but none of them worked so there so wherever you go around there would be like the eye detector but they were broken they turned them all off which I thought was kind of like a kind of a typical I don't know there you know

there yeah there all these all all these PL and so in that context you you you'd think okay there's there's some very big problem that can be can be solved it you

know in some ways it turned out to be more difficult than uh than one would have thought uh you know there obviously are all these pro all these sectors where you have that are very very broken

where um you know education healthcare all all these sort of deeply broken sectors where the solution um you know there's some obvious solutions and the fact they have not

been implemented tells you there's some big barriers to implementation they're set up not to allow you to break them this is kind of what I think of the palanteer version is you know there was uh there was this uh forget what the acronym stands for there was this uh software program this was once we moved

from intelligence community into the broader military called Dyn which was just sort of this um in theory was a system we were supposed to figure out ways to integrate the data across all

these uh units in the field and headquarters and you know integrate what was going on which is incredibly important thing to do in practice uh it was a sort of a cluji

consultant billion-dollar boondoggle that didn't work and uh and we naturally thought we would replace it in in 6 months and it took it took something

like 10 years we finally replaced it in in 2019 and you know we had to sue the army which and you know we had all our all our consultants quit and said you know um this is just the most ridiculous

thing you'll never get a you can't sue your customer and um you definitely can't sue the army and uh not only will you not get them as a customer you will not get anybody else in DC you'll just

be black ballalled by everybody and then but then you know um and it was under we we it was in 2016 that we sued them it was under a 1994 law where um you know

the military was supposed to have an open procurement process and then when you uh and then what you can do when you sue somebody is you you get discovery and you discover and you sort of discover what's going on in the sausage

making factory that no one's investigated for 22 years and there's a lot of stuff and there were sort of you know there were internal reports that Palanteer worked better which didn't matter because obviously nobody can assess the software but then more

scandalously there were um you know there were um orders to suppress the reports there were emails that people had to hide the findings and there was a cover up and this this did did not sound

like the open procurement process and uh and then you know and you you won at the court level then you won at the district at the DC circuit level and uh you know you were forced to they were forced to

reopen the process and then you know after after a decade we we sort of got the contract so yeah so there was something that was doable but it was it was not as straightforward as it as it

sounded it feels like there's these and SpaceX had to sue as well of course it feels like there's these parts of our society that are set up to just maintain their broken nature and you have to just punch really really really hard through them and it's very rare people do that

you know yeah spacex was the first successful template to do it uh and and there's you know there's obviously something like this you know

the university system seems as broken or or more than the military procurement process and then especially with the you know crediting agencies and all these things where where they where they just

uh are designed to to prevent newcomers and the it's it's like if you actually had a newcomer they would just eat the field they try to crush you they try to crush you it took us thousands of pages

of regulation but I think there was an Elon metaphor he told me once and this is like I I don't remember when it was like maybe 2010 2011 and it was it was it was sort of like uh there were there

were these three or four aerospace companies in the US that were like really badly managed and badly run and it was sort of they were these very fat

cows on this grassy enclosed field and if you ever got in there there was just going to be a blood bath oh yeah so it's kind of it's like he's like this this this carnivore and there's a big fence

and you got to climb this really big fence eventually you get in there it's going to be it's but so so this is a very optimistic thing though because both Elon and and what we built together uh with Palunteer were able to be great

enough and persistent enough to overcome unnatural barriers and and do something very optimistic and fix things is should we also be trying to do that in healthcare and education and universities in some sense is it because it was almost impossible but it turned

out after like years of work that we did it shouldn't we also do that now in other areas it is it is worth trying in a lot of areas look I I always think it's better to be optimistic than

pessimistic it is um it's probably not I the the place where I quibble with the name of your show is that uh I I don't think it's I don't think it's good to be

uh insanely optimist istic or insanely pessimistic uh at the extreme optimism and pessimism are the same thing because if you are extremely pessimistic there's

nothing you can do if you're extremely optimistic there's nothing you need to do um you just need to um you know the singularity is near it's the Curtzsw Wild uh book titles very optimistic

title and all you need to do is sit back and eat some popcorn and watch the movie of the future unfold so both extreme optimism and extreme pessimism um

converge on laziness and on people not doing anything so uh so I so I I yeah so I think moderate optimism is the correct thing and then and then I I I think you

have to always pick pick your battles the the part that's um the part that's I think more difficult about

education and health care um or historically was more difficult was that these were these were areas that lots of people were trying to reform and there

were lots of different attempts people had uh if um whereas let's say the in 2004 2003 2004 2005 when we started Palunteer

um the idea of trying to uh to do a military related uh software startup there was nobody even wanted to give you money as a venture capitalist people thought we were insane and so there was

sort of an element where if you could get through you would have no competition and then you know a decade later we still had no competition there's probably a lot more going on in

the in the defense space now than there was in the in the mid 2000s but and and again and again having zero competition it it's good if it works

maybe it just tells you you're insane so even that's an ambiguous thing but then the um the the place where I've had we probably the two areas where I've had the you know we we've tried to invest I

at this venture capital thing we started founders fund 2005 in different ways i've been been at this and I'd done some angel investing before that but I've

been been doing this for 20 plus years and the area where we've probably had the least success from a returns basis

in software the two worst areas are um are educational software related companies and healthcare IT companies

and um and pro like education we felt was so hard we we didn't even uh we did very little healthcare we tried a few

more things but um it's and and and the the the rough version of what's gone wrong in the health care sectors we've done so little in education I feel I can't even comment on it but but healthcare what's what's roughly gone

wrong is um you have all sorts of things that sound like a pretty good plan for reforming the system and it's okay it's this one angle on the pricing model that

you need to change but then there are 10 different ways you can do it and it's these complicated uh ways you have to get the payments to shift from the

insurance companies or the government or uh the hospitals which are very cluji if you can just get consumers or doctors to change that might be easier but they they typically are not the people who

pay and so there sort of are there's this you know very cluji messed up system lots of people try try to do it my my sociological model is always that

I'm I'm deeply skeptical of um of investments where a lot of VCs uh would go to some silly VC networking event and

uh want to brag about it and I I I feel there there's a lot of that with the healthc care education startups um this is like the green tech stuff too it's

too popular green tech stuff yeah i mean at some point it it loses money and then it's not popular anymore but but while it lasts it's very popular because there's there's no fastterm accountability in venture capital you

know sometimes you have momentum and the valuations go up and that that does give you a feel whether things are working but in practice uh you off you know it's

5 10 years later you get liquidity on on these businesses or even longer it it takes incredibly long and so people tend to overindex on these sociological factors and what's what's popular and

that's and so there was there was a there's a way that uh the healthc care education sectors even though they're very broken um people have these often

too conventional ideas on how to fix them and um and so yeah it's I know you know another trend where I' I've tried investing some over over the last decade

is you know is is all these marijuana related businesses and it's like yeah it's obviously like a big trend Um but it's it's an obvious trend and then it

turned out to be extremely hard to figure out what what to do with Yeah i said some of the things things that are too popular and too obvious it's just you have to have a totally different take on them or it's not going to work

uh yeah you like if you have an unpopular take on it that that that might work that that's interesting i I want to I want to pivot to macro for a little bit we're a few months into the new administration uh Donald Trump uh

hired a lot of people a lot of people we know are working in different parts of the administration uh be I'm going to maybe obviously obligatory question on trade but first like what are you most excited about that's going on the administration right now are there

things that you think are really cool or things they're doing well i'm the most hopeful I've been about things in a in a long time i think uh I think there are

some very deep problems that need to be fixed i think uh I think the opposition is is completely exhausted and out of

ideas and so um so it's it's it's maybe the first time since um since early Reagan that there's uh there's really an opportunity to um to uh to change some

things in this country and and it's not the sort of uh lame Bush Republican thing we had in the you know um for for a long time in between and I don't think

it's the uh completely sabotaged first Trump administration where you had I don't know um it it it got blocked on every level outside and inside the administration yeah so I I think they

will get you know and it's very unusual normally the second term does less than the first term this this is going to be the I think will be the real first term yeah i have a lot of really bold friends in HHS and DoD and Department of

Education and all these places and then there also are extremely big things that are very broken you have a you know you have a 6% current account 6% budget

deficit of 6% of GDP but five or 6% bud uh GDP budget deficit and and that's basically that there's probably no fun way to fix that you know you raise taxes

you cut you cut spending you know there probably are some efficiency gains you can make but what do you think of Doge speaking of efficiency gains it's like can they get half a trillion dollars with Doge like what what can they do what do you think can we do more i think

there's a lot you can get there's going to be a lot of resistance to getting it you have to you know the um the the correct answer is just you need you know is is always my my correct my you know

the my answer on tax policy you know what should tax rates be just always a little bit lower not going to tell you the number they should always be a little bit lower and you know how how much should it should always be the

government should be more efficient and then once you've made it more efficient you should make it more efficient and uh there's uh a lot of room for that there's a lot of shocking there's a lot of shocking stuff there funny even shock i wouldn't want to limit it to half I

don't know it's it's a what is it it's a $4 trillion annual spend budget i think I think I think it's higher now yeah and of course you know a lot of that's entitlements but I think I think six and a half now actually because I think four is what we're taking in four something

we're taking in we're spending six and a half because 3.8's entitlements that's a lot um yeah and but even even the non-entitlement piece is you know is incredibly is incredibly

off no and entitlements have lots of fraud too probably and but I I've been a little bit shocked like I knew there was waste but there seems like a lot of scams they're finding i guess like a lot more scams I guess than I I think there were scams i think the nonprofit stuff

is is the NGO stuff's out of control is really out of control it's it's it's sort of like um I don't know it's it's it's sort of like ver virtue signaling

is a sign that you're doing something evil and and and so many so much of this uh left-wing philanthropy nonprofit world I think was you know it was just a

cover for you know borderline criminal that's how you shield yourself you have put a virtue signal up while you're stealing money from everyone yeah um there's one one of the and there's all the stuff you have you'd have to really go into the weeds of how the stuff works

but the way it was explained to me there's there's sort of a level five description which is a line item you know description of what the actual dollars are going to and then there are

ways these things get summarized and the way they got summarized for you know a lot of the political appointees was a level four description where you summarize a bunch of level five descriptions as a you know as an

alternate as in a level four way and then obviously there are ways you know you can have I don't know um you can have

um 20 groups that are you know providing food to to Africa different African countries and you can summarize that as food to Africa that's maybe an accurate description and then if they're actually

all working on the Biden re-election that's an that's an inaccurate description and at some point the descriptions are so inaccurate that the people in the government could be

prosecuted for fraud and um you know one of one of uh one of the uh one of one of the people um who who looked I know who looked at this a lot thinks you could

just prosecute these people for fraud this is something like this is what Oliver North was prosecuted for in the Iran Contra scandal in the 80s was he mischaracterized the money and he

mislabeled it and it was like you know was accused of defrauding the government and I think you could prosecute thousands of these people for criminally for the thing that they wanted to prosecute Oliver North for in the 80s

well I hope they do i think a lot of people need to be punished not to do it again otherwise it's going to get turned back on let's I want to ask you we've been talking about China on and off for over 20 years and their imbalances uh I

think this week uh the president declared trade war on them effectively with 125% tariffs as of as of now it'll probably change in the next few days because these things keep changing so but it is like like what what do you

think of the trade and tariff policy what's going to happen bond yield sold off more than I expected with yields went higher than I expected so far like what's what's going on well it's yeah I'm hesitant to comment sense obviously

it's a very very fluid situation but but something like the sort of reset that's they're talking about now see seems where we're going where you need a very

drastic reset with China um in theory you need a reset with other people but um what we really need to get them to do is also reset things with China i I you

know I think the rough numbers are that about a quarter of the US trade deficit is bilaterally with China but another quarter is indirectly with China so China is is sort of half the problem and

and so it's selling components that then get reassembled elsewhere and uh and so and uh and then China is the geopolitical rival so um you know there's there's a way in which if you

know people in in a I don't know in a Merced in Mercedes and Germany are selling cars to the US we might want to have those pretty well-paying jobs in the US and not in Germany and there all

kinds of sort of mercantalist policies that at the margins Germany engages in but um you know it's not going to it's probably not going to repurpose um the

Mercedes factory to build tanks to invade the US or something like this whereas um whereas this you know the sort of dual use problem is is the problem with China and so it's it's you

know there's there sort of are there are ways the economic relationship with China is is is fairly efficient you know if people working for you know a dollar and a half an hour in a Foxcon factory

we don't really want to get those jobs in Wisconsin but um but it is this geopolitical rivalry where um that's in the background where that you have to

somehow factor in this that the economists never able to factor in properly with China and so I think yeah the the uh I don't know I'm not sure

it's I would call this the optimistic plan but but the the um the reset in trade that seems desirable to me would be that uh

um we we radically change the relationship with China and we sort of induce a lot of other countries to radically change their relationship with

China and um and uh that's that's how we you know and maybe that's how we build a stronger western alliance of the free world there's going to be some interesting negotiations in the next few months do

do you think that we could bring maybe using AI some more advanced manufacturing here that was in China is that a real thing the next decade to do a bunch more of here thanks to our more efficiencies and productivity uh there's

there's there's probably always a decent amount of things like that you you have to um you you have to always be extremely granular on how expensive the robots are how expensive the equipment

is because in some sense manufacturing has been getting steadily more automated for 250 years and you know and and you've had the machines that make the machines the machines that

make the machines are getting sort of smarter and more complicated um and and there are ways in which AI is a quantum leap there's a way in which it's just

you know a natural continuation of this you know two century two century long long process um I think um but yeah I think I think there are some parts that

can be moved to the US um with AI maybe also if you if you change some of the environmental rules and some some of the other anti-industrial policies we have

in the US um and then but then if if parts of this are moved to um other emerging market countries um you know I

I don't Vietnam is look it's a communist country it's it's it's a it has bad mercantalist policies but it's not planning to take over the world and so

at the margins if we can move things from China to Vietnam that's a big win i want to ask you about a theory I have that's based on how you see things so one of the things you've been talking a lot about lately is is is is how our

culture I want I want to put words in your mouth but things are broken to such an extent that like we're not advancing as quickly as we were in the in the industrial revolution right something's wrong with our culture something's wrong with science it's not not advancing yeah

i would Yeah the there's it's generally been stagnant in the world of atoms not the world of bits for something like 50 years and um and then yeah why why it's happened is overdetermined but there are

cultural factors maybe we just ran out of ideas which is a very pessimistic version maybe there's something wrong in our culture maybe we're too riskaverse maybe we're we're scared about how

apocalyptic some of the science and tech are um but for for a range of different reasons it's it's slowed down since the 1970s and I I I tend to think of things and I'm not sure if this is how you see

it but I take I take some of maybe your interest in Gerard and mimedic theory and I say people tend to all think of things the same way even when it's incorrect because it's natural to be mimedic think of things the wrong way together that's kind of why culture is

moving the wrong way and so I I tend to see that there's a lot of opportunities right now thanks to the fact that you do have this kind of broken cultural situation where people are thinking of it wrong so for example I'm particularly bullish i know it's granted but on

Elon's Boring Company I'm excited i was working on with some of the guys yesterday on tunnels because I think it's just obvious we could create trillions of dollars of value by building tunnels and getting rid of traffic around our cities and and the reason that opportunity exists is because of this thing that's really

broken because it's an obvious thing but just it's so broken that no one's doing it is there are there things like that where there's opportunities tied to the fact that things are broken do you see it that way well th those those anything that fits that pattern is a great

opportunity so if if it's um if you have some if if you know it's it's always if it's broken not because of the science

or tech so it doesn't require a miraculous you know you don't have to have a dozen miracles in terms of tech breakthroughs yeah you have to just do

something in this you know in this non-mafia controlled drilling way or whatever where you know I think so many of the um tunneling is this a super

corrupt um contracting it's mafia adjacent you know sort of super corrupt labor union adjacent and so I don't know it costs you know what it cost to build

a subway in Manhattan it's like a billion dollars a mile billions yeah 10 I think it's 10 times as much as Paris or something like that which we don't think exactly capitalist efficiency it's

insane so and Elon's a 10th the cost of Paris right so it's like a 100x multiple crazy but you know but then the the the place where I I always think it's

non-trivial is uh is that there's there's some non- tech reason we're not even at the Paris level yep yep so but if you could push through then you could disagree you could do it even you can do

you could do something big even if you could get to the Paris level and uh and so you have to think really hard about what that what that political blocker is and how to how to overcome that and and

so there's all these things that are that are dysfunctional and broken and not working and like and like if things right now I think you're more optimistic than you have been said like like should we be trying to use our voice and fix

things more should like I know a lot of friends who just decided to exit right and a lot of friends are in Singapore and Switzerland they gave up they think it's going to be too hard to fix it i feel like you I feel like you're in between this where you're you've done a lot of things to fight for our society

and to fix a lot of things but then you're like skeptical you should be pushing too hard in a bunch of areas how do you think about that trade-off with voice and exit on these things i think it's I think it's very important to try

it's very important to pick It's very important to pick the right battles is what I is is what I would always what I would always say and so I don't know yeah the the the in between answer is um

you know I I don't think you can just be I don't know shooting at bad guys when they're two miles away and you're firing your guns at random and it's it's like yeah you get you get credit for some

kind of you know Marxist labor theory of value you're trying hard but um we're not we're not Marxists here and we're it's not about trying it's about actually it's about it's it's not we're not measuring uh input we're measuring

you know where where you can actually uh where you can actually get output i I um I I keep trying in a lot of these areas i you know we we've we've we've made a

number of investments over the years in um in nuclear technology um and it it always it always when you look at the science that there are all these much

better ways that in theory you could do it you could build small modular fision reactors maybe the fusion technolog is not that far away there are different verticals within the industry where

things are extremely broken and in theory should find a way to to um to build a successful company that overcomes some of these these problems and then um there's you know then

there's a sobering reality that uh you know the nuclear regulatory commission basically hasn't approved a new reactor design in in 50 plus years and so

there's so so it's always it's it's always these these these these things that you're you're trading off probably I don't know probably one place where

I'm I'm structurally a little bit more pessimistic is that uh there's there's something about the cities that I think

is very hard to reform uh and um and uh you know I'm I'm in I'm in Los Angeles we just had these catastrophic fires and

what's what's what's what's I think just depressing about it is that you know it's there are half a dozen reasons we can give for the fires it can be you know it can be the California Coastal

Commission that didn't allow people to build modern houses that were fireproof it can be um it can be the fire department that didn't have you know where there was no water in the

reservoir uh it can be the um you know the three Kristen women running the fire department who maybe will be now replaced by three Karen women or something like this or it can be the uh

homeless people with blowtorrches running around or you know and or it can be the the mayor who is you know out to lunch in Africa or whatever

and um and and somehow the pessimistic thing is that uh I I maybe the mayor gets turned to scapegoat and gets you

know doesn't get reelected or something like this but uh but that that's about the that's about the limit and then this just looks like a a structurally hard hard to reform thing it's very hard to

fix LA but couldn't then this is where you know this is where this is I where I would be deeply skeptical even of of a place like Austin Texas you know it's it

is I mean it's a government town it's a bad university college town it is a good university well University Texas not not University of Austin we're doing well but even UT has some great students too

it's not too bad yeah the whole the whole the whole structure the professors are going to be more progressive they're going to break they're going to break the politics economic structure economic structure but there is an answer here there is an answer here right so what's fascinating is in the Texas constitution

cities only exist at the behest of the state and so if you actually got the city to be a little more if it became a little more broken and you get the legislators and the governor step up you can create a capital district and you actually run it like in a competent way

so I I think the very first governor to actually fix a blue city will be like a hero and then you'll do it in a bunch of other red states so I think it's possible right um am I am I just totally

naive here what you've had 20 years of Republican governors why have they not pushed for this in tax you've had a bunch of Bush Republicans as you would call them who and I and I I like Greg Abbott i think he's a good guy but there's just not

like the energy to like go in and be like "We are just going to this and fix it and it's unacceptable and we're getting rid of this nonsense." There has not been that energy yet in the party so like if I for example were to take over in 10 years and do that I would just fix the city i say "This is unacceptable

it's broken here's what we're going to do instead." Like there's the fact

do instead." Like there's the fact there's more people dying from not having enough police the fact it's just insane we just got to fix it you know that's what I would do okay anyway this is where this is where I would push back where you know the just walking around

Austin the last few days it seems like there are a lot of homeless people right now the progressives are in charge yeah that's that's in the city you're right you're right as his problem and then and then somehow it doesn't bother you know

it doesn't bother the Republican governor because you know Republicans well they don't have to live in Austin they live elsewhere and maybe I think it bothers him and they've talked about making a capital district i think there's I think they need to they need Yeah there's a lot they're trying to do

well right now not a it's not a top 10 issue yeah it's not yet and I think it should be so just going back to the question then like so do you I think so we talk about so so yes I there's there's some there's some point where

it's you know it's it's the right battle to to pick but you can't you can't do all of them obviously you can't I don't know I know this is probably not the best analogy but it's if if you go

surfing you know it's yeah you you want to paddle just in front of a wave you have to you have but the wave has to be there yeah and if you're if you're paddling like crazy on a still day where

there are no waves it doesn't work yeah so we live in these complex systems and like a lot of people they they basically are maybe too pessimistic or too optimistic like you said they just think system's going to happen no matter what i guess for the great man theory of

history you say it's not just that a great man come and does something you have to understand the system you have to understand what's possible but you do believe people can then make a big difference if you if you understand it well enough yeah you have to there's

there's probably some sense of timing there's there's there's some point where where these things where these things where these things can break through

um you know um yeah if if Austin can be fixed you'll you'll be the one to fix it uh if it if it can't be fixed I'll be the one to

have told you told you so and maybe that's a lesser achievement we will we will we will we'll see what we could do there's been like the optimistic thing is I think there are some other things you could do that might be bigger than fixing Austin i am working on many big

things they're important so if you if if you get too distracted by Austin this this could be a very very costly mistake although although study you're writing you're selling yourself short you're

just thinking fixing Austin is is is this really big thing you can do and for an average for an average person this would be a big thing but you know so I think studying SF and studying Austin

led me to understand the NGO thing which I then was very helpful with with with DC and we actually are working with people running a lot of agencies in DC to go after the NOS's and based on things we've learned the last seven years so I think I think sometimes studying the problem around you kind of

you follow the trail and you do find useful things to fight for and um let's you know speaking of timing there's a big vibe shift going on in Silicon Valley right now i think I think it's very different than it was two years ago in a positive direction some people say

there's a even a spiritual revival component to it like do you think it's real and what's what's what's changed in in the vibe in Silicon Valley what what's possible now based on that i I I

think I think it has uh I think it's shifted a lot um and then of course it's you have to sort of

think about why was it so monolithically center left before and um and you can you can analyze it on the

level you know I was I was on the um I was on um you know I was on the meta board for 17 years from 2005 to 2022 and

uh there's sort of one version where it was people like Zuckerberg or Cheryl Sandberg were just these sort of communist

billionaires um and then there is a there was sort of a bottomup theory where it was kind of um this uh woke

millennial workforce that sort of this mob that was ruling the company or something like this but then there's also sort of a top- down theory that it

was basically um incredible pressure from this uh left-wing regulatory state that pushed these companies and I think

you know I think that was that was a a big a big dimension of it there there was sort of a lot of surface area where these things could be regulated and as

long as you sort of tilted them to the left you you ended up you know you thought you thought you were appeasing the the the beast you protected yourself

there there's some way in which um the founders um again cite someone like Zuckerberg I don't think were you know deeply political he didn't want to you

know he wanted to spend his time building products thinking about that he didn't want to spend his time you know at congressional hearings in DC it was just easiest to do something it was easiest to do something um it and it

often seemed like it was sort of a moderate amount you had to do we had to do okay we do some DEI it's you know we we'll get credit for this and then it

won't hurt us that much and um and then um and then basically at some point and then you know if you if you do something and it

doesn't work so let's say let's say we're um doing DEI but we are um our our workforce is

getting is not getting better um um it's always ambiguous and you can say you can say that you haven't

done enough of the thing or you have you can say we have to stop it alto together and so the the way I would tell the arc was for for many years the answer was

just we have to do more and we have to do more and then at some point it completely collapsed and that's and that collapse happened in some way over the

last four or five years but it was it wasn't really safe to admit it until like the last several months right I I think I think it

was it felt very unsafe to admit it in the first Trump administration because in some ways all these things went into overdrive and they were sort of polarized around these sort of tribal

politics or the tribal politics were used to push these things into overdrive uh I think by the time by the time Biden

came in it was safe for people behind closed doors to say this stuff is is is really not working or you know um you

know uh and um and then um and then and then certainly by the time by the

time Trump came back it was um you Even if people did not support President Trump in 2024 didn't support him publicly uh there was a an incredible

felt sense among all the top CEOs I know in Silicon Valley that there's all the stuff you can't talk about there are things they tell me behind closed doors that are very different from what they

feel they can say in public and the the gap the gap felt really really big for you know a number of years there's I I know there was a one one of the bigger

tech companies um you know again there's it's over the term there's a bottom up top down you know middle-level management layer there all sorts of layers of the stuff that got messed up

but their version was yeah you had the most woke workforce in San Francisco and so it was just they were going to move a certain percentage of their people out of San Francisco every year and that was

that was that was the plan and then you know that it was not what they could talk about so there sort of a conversation they'd have with me and you know not not inside not inside the

company and so I think I think the I think the the delta between what people said behind closed doors and what they thought they could say in public was extremely big i I guess this is always a

problem with these you know speech codes these these uh restrictions on free speech is that they eventually backfire very badly on the left which is pushing

them because um at some point it it sets up this thing where people don't flip at the margins at some point sets up this thing where they flip radically at some

point you know it only takes you know one little child to say the emperor has no clothes and you get a cascade that's right what's scary about Wilk AI as well I guess the same way you don't want to make too many rules to try to protect it

from saying things because all of a sudden it could could go the other way it's interesting but but well yeah there's other reasons you want to do that too but but I I think I think something like this is what happened it

was you know I I think there's sort of this the setup for um I think it's the teamwork Quran public private truths public lies it's a

sort of economics theory of when you have a revolution and it's it's when everybody is lying and everybody knows that everybody's lying then you and then

you can get this at some point you can get this very very fast preference cascade and something like this happened in in Silicon Valley in the last few years there was a there was a buildup

that took a few years for people to realize that you know things were very different and then eventually they realized that everybody realized it and then then then it can break pro probably this is by the way also the the more the

hopeful thing on on Doge where the pessimistic view is man you know the government always grows and no departments ever get shut down and nothing ever changes i think Milton Friedman's line on it was you know there's not a single government program

that's ever gotten defunded once it gets started so it's it's always just a one-way racket um but then you know in 2019 maybe people like the two of us had our suspicions that the people in

government weren't working very hard but after five years of remote work and what we know from our companies is that remote work is not working and 5 years

of people 90% or whatever of the federal workforce not working and not making a difference you sort of realize that these people weren't working before and

it doesn't matter and maybe um and maybe um maybe um you can um replace them with AI or maybe you can replace them without AI and just use uh the the AI can be

completely fake and we can improve things tremendously well that's that's a very optimistic note from you Peter to end it on so thank you very much for for being here today all right thanks for having me