Hey, Sorcin. I just went through the

comments. The one question keeps coming

up over again.

>> Why the are you writing this book? Jesus

Christ. What a party pooper.

>> What a party pooper. I don't know, man.

I don't think I think it's supposed to

be the the book's supposed to be like a

beach read.

>> A beach read?

>> Yes.

>> Come on. Did you read it?

>> My god. No. I saw the title. I was like,

skip. [laughter]

>> All right, besties. I think that was

another epic discussion. People love the

interviews. I could hear him talk for

hours. Absolutely.

>> We crush [music] your questions a

minute.

>> We are giving people ground truth data

to underwrite your own opinion. What do

you guys think? That was fun. Palimat,

[music]

you you're going to love these

characters. I kid you not. I kid you

not. The people who do who are involved

in this at that time like the the main

character.

>> I totally agree with you. I I am a huge

to be honest. I've studied this period

for a while actually. I think it's great

that you wrote this book. I think it's

incredibly fascinating. [music] We're

here with uh with Andrew Ross Sorcin

Chimath and I with another all-in

interview, riveting. Today we're going

to talk about Andrew's new book 1929

and specifically cover why Andrew got

into it, what the history teaches us,

and are we looking at another 1929 or

something different this day and age as

a lot of people may speculate. But

Andrew, thanks for joining Chimath and I

to talk about this.

>> Thank you for having me and I love your

uh your background there.

a a a true image of what was actually

happening in October of 1929, crazily

enough.

>> That's right. And it was colorized by

some AI or something, I think. But, uh,

yeah. Great. How and why did you get

into this era of 1929, the great stock

market crash of 1929. Like, you're a

busy guy. You're on TV every day. We see

you all over. You're at conferences. I

saw you at a conference in Southern

California this week. Then you're at

another conference and you're back in

New York. You're very busy. At what

point did you say, "Hey, I want to sit

down and write a book about this era."

>> Okay, so here's what happened to me. So,

I written that book, Too Big to Fail,

about the 2008 financial crisis,

>> right?

>> And people used to always say to me

after that, they'd get into these like

very in-depth conversations about 1929

or they'd want to know more about 1929.

And most people know that something

terrible happened in 1929. They know

there was a crash in 1929. They

oftenimes think it like is the great

depression or leads to the great

depression. But if you were to ever ask

most people now Chimath and you are

maybe in a different category and say

well who were the people who actually

were engaged in this what were they

saying to each other who was sleeping

with who? Who was trying to over who?

What was actually happening here and

what were the incentives and what were

the motivations that led to what clearly

were some poor decisions.

I couldn't find that. So, I went on a

vacation [clears throat] like 10 years

ago with my wife, very nerdy, and I like

downloaded all these books to my Kindle.

>> And there's some great books, by the

way, about this period, don't get me

wrong,

>> but they didn't have the sort of

character driven story. Like, I loved

Den of Thieves. I loved Barbarians of

the Gate. I loved stories about people.

>> Fabulous books. Fabulous books.

>> What did your wife think when you

ignored her the entire vacation you guys

were on were just reading books on your

Kindle? I mean, I think she thought I

was out of my mind, but um No. So, I I

read I I read these books and I was

like, "Okay, where's the story? Where's

the where are the people?"

>> Before you get to the people, can you

can you give people a concise

>> t like I was going to ask you for a

TikTok of the

overarching economic issues before we

get to the sort of the characters

because I think Yeah. Because I think

what to your point which is an important

one, people think it was like a okay

stocks went down,

>> right?

>> But the other things like the overp

production of the economy, tightening

interest rates, the war debt, like all

of this stuff was just comingled and

nobody fully understands that. Can you

>> maybe give folks a precise

representation of the setup? The

>> setup. Okay. So, so let's just go back

even let's go back to 1919 because

actually I think that's a critical year.

So prior to 1919 in America, people did

not really borrow money. It was like a

moral sin to to to get credit. Like

people didn't do it.

>> In 1919,

General Motors says, "You know what?

We're going to start lending people

money

>> so that you can buy a car." And that was

actually like a major inflection point

in America

>> because [clears throat] then Sears

Robuck clocks what's going on and says,

"Okay, we're going to do this too for

appliances." And then a guy named

Charlie Mitchell who ran a bank called

National City which becomes Cityroup

says you know what we can do this for

stocks. So, you know, and and all of a

sudden brokerage houses are opening up,

you know, on the corners of streets the

way we see Starbucks today. It's like

literally like that. And you could go

into one of these places and you could

put a buck down and they would literally

loan you $10

off of your dollar. I mean, that's how

insane things were. And at the

>> ter there was no risk underwriting of

any kind.

>> Zero risk underwriting.

>> But nobody understood what they were.

>> By the way, there's no SEC. There's no

regulations. Somebody who who who read

this book early said, "Oh, in your

research, did you get a chance to read

any of the prospectuses for the

companies?" I was like, "Perspectuses?

Like if there was like a leaflet that

they handed out on the street, you'd be

lucky." So there's no there's nothing.

>> And it's just like a complete go- go

era. Forget about 1929. In 1928, the

stock market went up 48%.

So, people are just, there's just sort

of like this, it's a little bit of the

Chuck Prince when the music's playing,

you're dancing, and everybody's dancing,

and nobody's even thinking about the

music stopping kind of like ever. Now,

meanwhile, there's also these

technological changes. I mean, huge

generational technological changes. In

the same way, I think we're probably

talking about like AI today, radio. So

RCA was like the Nvidia of its time.

Everybody wanted into RCA. The stock

ticker was radio because it was like the

it was like going to change the world.

And and the other big piece of this was

also similar to today this idea of

democratizing finance. It was like okay

the elites have had their way. They've

made all the money. We're now going to

let everybody in on the action. Now, the

difference between then and now though

was there was also like crazy amounts of

manipulation, insider trading. As I

said, there were no rules. Like

literally no rules. Nobody's going to

jail for this stuff because it didn't

there wasn't a rule against it.

>> By the way, it wasn't just individuals

that was investing and overextended with

margin. But the banks would take

depositors money and they were going

long the stock market.

>> The the the banks the banks were doing

it. By the way, the bank not only the

banks, regular old corporations. I mean,

could you imagine could you imagine if

it turned out that like JP Morgan and

Goldman was going long in video with

depositor funds? That's that's the

effective equivalent of what was

happening back then, too.

>> You had you had corporations taking

their balance sheet, right,

>> and effectively then loaning it out so

that people could go buy stocks. That

was the other thing was happening.

there's a sort of like just the the push

towards investing and and overprouction

and and all sorts of other things

created this sort of frothy market. And

you had a Fed. You mentioned the Fed,

which is an interesting part of this.

There was a Fed. It was new. Started in

1913. They knew this was a mess. Like

they kept saying to themselves, you read

all the diaries and notes that I was in

for the last eight years. They knew

there was a problem. But they were

scared out of their mind about doing

what they probably should have done,

which was raise interest rates, but they

couldn't pull off like a vulker kind of

thing.

>> Can you sorry, but can you double click

into what you said about the fact that

there was a social contagion around

wealth creation that people felt like

the elites had had their way and now it

was everybody else's turn. Just describe

that like what had caused that and what

amplified that social cont and who and

who was everyone else? Were these

factory workers because we're kind of on

the heels of a big industrial buildout.

So like was it the FA folks were had

savings for the first time like where's

this coming from?

>> Well, so what's really happening is you

have a lot of folks who are coming from

the from farms frankly and moving to the

big cities for the first time. That's a

huge part part of what's happening. So

most of the trading I should say is

happening in the big cities. It's not

happening you know out out in small

towns. It's happening in big cities for

the most part. But but that whole sort

of scenario

once they're in the big city and they're

seeing that there's sort of this wealthy

group of people, talk about inequality,

this wealthy group of people and they

want in on the action. And also by the

way the people at the top, meaning the

bankers and investors and entrepreneurs

are like, we think there's this big

opportunity to open this up for the

little guy or the ordinary investor. We

think this is like a huge opportunity.

There was a guy named John Rascco who's

sort of like the Elon Musk of his era.

Um he actually ran General Motors,

created the credit program there, then

becomes hugely wealthy, then gets into

politics by the way, ends up building

the Empire State Building. But he was

trying to create almost like the first

mutual fund

>> because he thought that people should be

able to get in on the action the way he

did. That was like his whole conceit.

And he talked about it pretty openly.

There was a famous article called

everyone ought to be rich. [snorts] Uh

that was his line. everyone ought to be

rich. And it also was a time where sort

of the American dream shifted a little

bit, I think, from sort of a Horatio

Alra story a little bit to like a

lottery, can we get rich? Like can like

the whole idea of capitalism is going to

give us this great opportunity? And I,

you know, obviously we're today. Do you

think that radio played a role in that

because it amplified these stories and

made them go faster and people would

just like start to tell these tales and

folks started to forget the Horatio

Alger part? Like I'm just still trying

to understand like I

>> you have you have folks on the farms,

right? They're getting educated. The

industrial revolution is happening. So

they're moving to the city and the radio

then is maybe what Instagram is like

now. You're seeing people with wealth.

You're seeing this wealth that you don't

have. You aspire to that.

>> Yes. and then something comes in and

fills the void. Is that is that kind of

the mechanic?

>> I think something fills the void and all

of a sudden you now have the opportunity

because this the the bank or the

brokerage houses are going to lend you

all this money and it's not just radio

being the communication device. It's

really the media. So the other thing

that was happening during this period so

Time magazine starts in 1923, Forbes

1917.

All of a sudden, Charlie Mitchell, the

CEOs, are now on the cover of magazines

the way Babe Ruth and Charles Lindberg

had been on the cover. So, sort of the

the shift in how people even thought

about business. Uh, none of these guys

were,

you know, famous before the 1920s, but

they became famous and everybody wanted,

everybody wanted to be them.

>> This was what America was about was this

industrialization, right? And this was

kind of like, hey, we're pioneering an

entirely new world and these are the

leaders doing it and these are the rock

stars that are transform transforming

this country. I mean, was that kind of a

big part of what was going on at the

time?

>> Totally. And everybody wanted to be

everybody wanted to be a rockstar. By

the way, it's the same way everybody

wants to be you David or everybody wants

to be Chimatha or they all want to be

Elon. Like I think there was a huge

thing like okay and here's this

opportunity and they were being sold the

opportunity and given the opportunity

not just to invest but again I think

that the margin piece of it was such a

crucial crucial element. Do you think

it's a coincidence, Andrew, that now

you're you're publishing this book in

2025, but like how does it feel like

eerily similar to you? Like way too

similar where you can almost map one to

one those boundary conditions then in

some version of that today like is that

is that what

>> like a little bit but not I will say

that wasn't my intent like when I got

involved in this

>> I just wanted to retell the story and

figure out who these guys were. I I

ended up after that crazy vacation with

my wife. I ended up going to the Baker

Library. I happened to be giving a

speech at Harvard and I walk in there

and I had some time and I asked the

librarian. I said, "Can I see these

boxes?" This guy Thomas Lamont who ran

JP Morgan at the time and I said, "Can I

look inside these boxes?" And inside the

boxes, his secretary is keeping

transcripts of his phone calls with

Hoover and Roosevelt.

Like, by the way, same way like

everybody's probably talking to Trump or

Trump today. And I'm like, "Oh my god, I

haven't seen it." And you're seeing the

conversation. And I thought, "Okay, if

you could use those transcripts in an

actual story and then you could figure

out I didn't know if other transcripts

existed for all the other characters."

Yeah.

>> Wow. You could recreate this whole crazy

situation,

>> right?

>> But I didn't go into it thinking, okay,

this is all onetoone. And I don't think

it is onetoone. I think there's a lot of

leverage in the system today, but it's a

different kind of leverage. I like to

believe that there's now an SEC. There's

other regulations.

>> If you believe it, there is one. Paul's

doing a good job. He's there.

>> So, I'm not here to tell you that like

we're going off a cliff tomorrow. I

think there's probably some things that

are happening our economy today that do

mirror that period. And I hope there's

some lessons in here. But do you think

do you think the regulations that have

been in put in place over the past

hundred years and there have been

several cycles, one of which happened

after '08, of trying to create new

protective provisions around how we

operate in our financial markets, have

they actually changed things enough or

does the human element always find its

way? It always finds its way to

frothiness, to frenzies,

>> to these kind of moments of exuberance,

easy money. And this this like will

there'll always be a path, you know,

whether some people might argue crypto

tokens, there was an NFT moment a few

years ago. Wherever the regulation kind

of path of least resistance is, that's

where everyone goes.

>> Totally.

>> That's always going to be the case.

>> That's the human condition. We all want

more. You know, there's that great line

in um it's it's it's a Wall Street 2 uh

where I think Michael Douglas says to

Shai Labuff, I thought the second Wall

Street was not as good as the first one,

by the way. Says says something like,

"What's your number?" and he looks at

him and he goes, "More." Right?

>> And and that's [laughter]

>> that's humans. That's humans.

>> And that's humans. And more means we're

all trying to figure out how we're going

to get to more. And

>> I think that that was what was going on

then. To some degree, it's what's going

on now. I think

>> it's always going on. It never changes.

It's not like there's some unique moment

today. Maybe there's technology that's

kind of unlocked this kind of new cycle.

Look, the other piece of this and it was

actually a lesson for me that I still

grapple with today. I think people think

the word speculation is like a dirty

word. And the truth is, having now

written this book and too big to fail

and just spending, you know, all this

time reporting on all this, you need

speculation. Speculation is the twin of

innovation.

>> Putting your capital at risk. There is

no it's price discovery. It's risk

discovery. It is the hard

>> underbelly of innovation. I completely

agree with

>> there is no innovation without some

speculation. Elon Musk would not have

created Tesla and said somebody

speculated on him early when it all

seemed totally insane.

>> No. And also he's probably speculated

himself in 50 different ideas that never

saw the light of day. That's what it

means. It's like you're investing risk

capital. That capital is not always

money. It's a lot of time it's time and

reputation as well. It's convincing

other people to come work on something

and you're doing it speculatively.

That's what Silicon Valley does. Betting

on the come.

>> And so then the question becomes, how do

you create an environment where you can

have speculation? Not just have it, but

encourage it, but not let it get out of

control, right? Like that is the sort of

fundamental question.

>> What ends up happening, Andrew, is like

no one gives a when a big fund manager

or a big bank or some kind of dark pool

of capital loses loses money. But when

it hits the consumer, when it hits the

individual, then there's this rush to

protection. It's like we need to protect

the system. We need to kind of protect

the consumer because they're always the

ones that get taken advantage of. Is

that kind of fair? And if as you look at

what happened coming out of

>> 100% out of08,

>> look, you can look at both of those

things. You could look at, by the way, I

think an interesting one because we're

now dealing with it now is the

accredited investor rule. So, you know,

by the way, that really goes back to the

19 late 1930s or 1940. You know, the

idea was we only wanted the wealthy to

be able to have opportunities to invest

in private companies because they were

the only ones that we thought should be

prepared to lose the money and we didn't

want the little guy to lose the money.

>> Here we are now in uh you know 2025 and

there's a lot of folks saying you know I

want I want the access. I want the

opportunity. And you know sometimes like

I remember Chimath you and I probably

talked about this years ago. I remember

I either talk about like GameStop or

some of these other companies and tell

people you know oh you got to be careful

guys this could go wrong. I said that a

little bit some about spacky stuff and

some other things and people like Sorcin

stop it you're not protecting me you're

protecting the man.

>> You're protecting the man and it was

sort of

>> regulatory capture.

>> It's a very interesting concept. So I

anyway I haven't come up with a you know

a neat answer about that but I do think

about it a lot.

>> Well to your point I think the the 40s

act 1940 act I think it was it's been a

very complicated piece of legislation

because if you fast forward to today

we're still trying to unwind and fit a

square peg into a round hole if you

will. The entire crypto economy contorts

itself around the 40 act

>> right?

>> All these BDCs contort itself. private

credit contorts itself and why? Well,

right now we don't have the regulatory

will to just go and have a wholesale rip

and replace of what is really old

legislation. I think Scott,

>> do you want to talk about the Kimat? Do

you want to just describe the 40s act?

Like what's in it?

>> Well, it it was basically written as a

way to sort of try to delineate what is

a security, what is allowed to be

traded, what kind of businesses can be

public. And at the time with the

understanding that they had of the

economy, it all made sense. There was a

pretty bright line of here's a

commodity, here's a security, and here's

what is allowed. The problem is, as

we've seen, is that businesses today in

2025 are way too dynamic, and they don't

map to the brittle definitions of 80

years ago. The problem is that when you

try to go and rewrite those rules, there

isn't the legislative will because what

Andrew says comes up over and over

again, which is the fear of what could

go wrong stops people from doing what I

think could go right and that has pretty

profound consequences. I think I think

in part when you look at what happened

in GFC, you can pull the string back to

to the 1940s and the 40 act and people's

reaction to to regulations. the savings

and loan crisis. That's another one that

was absolutely unnecessary but happened

because we tried to contort ourselves to

expand the economy in ways that were

brittle. Andrew, I want to ask you a

question, which is if we go back to the

29, so we we have a good sense of the

the setup.

>> Yeah.

>> Can you explain the big characters and

>> who they were and the roles that they

were playing?

>> Okay. So there's there's there's two

there's a whole bunch of characters, but

I'd say there's two main characters in

this book that really drive the

storyline.

One is Charlie Mitchell, this fellow who

runs National City. He is the Jaime

Diamond of his time in terms of fame. He

might actually be more like Michael

Milin because he he really does develop

sort of credit for the public. Michael

of course did it uh for businesses later

but um

>> he they used to call him Sunshine

Charlie and he was on the board of the

New York Fed.

>> He was constantly calling for lower

interest rates interestingly during all

of this and he was the guy who was not

just loaning to uh speculators and

stockholders. He was also uh loaning

money to different brokerage houses

across the country. On the other side of

the story in Washington is a guy who you

probably heard of or know named Carter

Glass.

>> Yeah.

>> Carter Glass was the Elizabeth Warren of

his time or maybe even like AOC.

>> AOC. Yeah.

>> And he would, by the way, uh he was like

a a racist Elizabeth Warren,

interestingly, uh given the weird things

going on down there at the time. Anyway,

he would rail for years about this thing

that he described as mitchellism. He

believed that Charlie Mitchell and what

Charlie Mitchell was doing was going to

upend the economy effectively. And as

the story plays out, they are sort of

pitted against each other. One of the

things that Charlie does is he defies or

at least appears at one point to defy

the Federal Reserve, which is trying to

clamp down on speculation. They don't

try to raise interest rates. What they

weirdly do is they send a letter to all

the banks saying, "Please stop lending

to speculators." And the banks don't

know what that even means. So they stop

lending basically to everybody. And

Charlie says, "We're not going to have

that. So we're going to start lending

ourselves." And that sort of creates

this whole other dynamic which leads him

to end up being in front of Congress.

And I don't want to give away the story,

but he does get arrested on the steps of

his own home for doing some crazy things

later in the story. But those two sort

of play a big role. Then you get to see

how Glass Stebo came about, which by the

way is shocking because it is not what

you would think at all. It almost has

nothing to do I don't want to say it has

nothing to do with breaking the banks

apart for like political reasons, but it

actually has to do with uh business

reasons, meaning there was like some

major bank money and lobbying going on

behind the scenes to f over JP Morgan by

the guys who were running Chase and the

Rockefellers. So, it's it's wild. The

story is wild. Okay. So, just the

summary, but the glass deagle I think as

I understand it, but tell me basically

separates commercial banks and

investment banks.

>> Separate separates commercial banks and

investment banks

>> and then sets up the FDI basically

>> and sets up the FDI,

>> right?

>> Again, when you see how that all came

together, the FDI piece of it, it the

the backstory of like these laws. It's

not It's not coming from consumer

protection as much as you're saying

lobbying to try to basically like

marginalize the 800 pound gorilla.

>> Exactly. Exactly. And and you'll see it.

You will be in the room with these

people literally going in there sitting

in the White House begging Roosevelt to

do this. And and by the way, Carter

Glass is actually unhappy about it. I

found letters where Carter Glass is like

this bill is getting taken away from me

and is basically being taken over by the

bankers which is almost hilarious

because Elizabeth Warren loves to cite

this bill as sort of some panacea.

>> Andrew as you look at markets today just

to come back to the modern era I don't

want to ask you the the simple like draw

the parallels but are are we in and and

I've heard you ask this question a lot

lately like

>> are we in a monetary bubble? Are we in

an inflationary bubble? Are we in a

speculative bubble? Are we in no bubble?

>> So, I'm assuming we're in some bubble

and we just don't know when it's going

to pop of some sort. And by the way, we

don't know how big it's going to pop

either. You don't It doesn't have to be

1929. It could be 1999, could be 2008,

could be smaller than that. I I don't

know. Do I think that there's leverage?

I mean, you guys talk about this AI

investment phenomenon that's taking

place right now. And for the most part,

the big corporations are spending real

cash. So, it's not that's not leverage.

But you look at a lot of the real estate

plays, the energy plays that sort of on

the periphery of this, there's a lot of

leverage there. I think the the private

credit world, we don't really know where

all the leverage lies right now. Now, I

don't think that any of that is as

leveraged as what we were talking about

this like 10 to one situation in 1929 or

maybe or even like the subprime

situation in 2008. But I don't know, at

some point you start to look at some of

these, you know, like the Nvidia OpenAI

deal or the AMD deal and there is a

little bit of a circular kind of

thing going on there uh for now. And I

just don't know where but that could be

we could still be years we could still

be years away from this and by the way

it could work out on the other end.

>> But what about like government monetary

fiscal issues? the central bank monetary

policy

>> interest rates and then the fiscal

issue, the government spending right

now.

>> Ultimately, if you have a devaluation of

the dollar, we're seeing gold at 4,000

bucks an ounce. We're seeing the dollar

basket trade down. I think one of the

worst years we've ever seen this year.

Uh does that ultimately translate into a

higher index on the stock market because

the dollar is worth less? I mean should

you know could this actually be more of

a monetary or fiscal kind of problem

than it is a speculative kind of

problem?

>> Well so you would think it would be but

then explain. So yes I think like the

traditional the classic economist would

say this you know these things should

not be happening at the same time

meaning look at the price of equities

look at the price of gold look at the

price of you know US treasuries right

now. It doesn't at least classically it

shouldn't shouldn't line up the way it's

lining up right now. So I I just don't

know. I would have thought that the

investor class would have wanted to

charge us a higher premium for our bonds

these days for a whole bunch of reasons,

but they don't. Uh maybe that's just

like life is relative and other

countries are, you know, not doing as

well and so we're still the the

prettiest girl at the dance.

>> I think that's exactly right.

>> But we've never seen so much capital so

so much printing happening as we see

today. I mean the 7% debt to GDP in

peace time with an expanding economy.

Never seen that before.

>> Totally. But then if that's the case,

you'd think that we'd all have our money

in Bitcoin and or gold, but but we

don't. Why is that? I don't know.

>> How do you invest? Anyone ever ask you

that?

>> Most people don't ask me that. And the

truth is I'm not allowed to invest in

individual stocks. It's actually given

what I do for a living. That's part of

the part of the deal part of the the

nunnery that I have to live in.

>> You're long the index.

>> I'm long the index. I am long

>> Bitcoin. Bitcoin gold.

>> I'm I'm long the indexes. And uh no, I I

I by the way, I wish I could. I thought

for many many years, it's probably

shifted now, but for years upon years, I

was always I think Chimath and I have

talked about this. I was always worried

about buying Bitcoin because I didn't

know I I didn't want to be on TV or in

the papers.

>> Oh, I I would do it. I came on CNBC and

I would tell Sorcin to buy it

>> 100 a coin, 200 coin. Sorcin would show

me a clip of Charlie Munger telling me

that it was poison and he would say,

"Mon, what do you think?" [laughter]

>> And I said, "I have tremendous respect

for Charlie and Warren, but they're

wrong."

>> I remember those moments fondly and

sadly because I should have [laughter] I

should have listened. I should have

listened.

>> But so, okay, so you have a very

balanced kind of portfolio. Pretty

vanilla down the middle. super I'm not

going to get index funds I'm not going

to get rich unfortunately uh on being a

journalist that restricts you from

access to the markets I mean you you

seem to have a good pulse on what's

going on but really what matters in

markets is having a pulse on what the

actors in the markets are doing

>> right

>> and you're not able to to act on it

>> I have misgivings about it how about

that

>> you're you're the character in your show

>> acts where you have all the inside info

but you can't do anything about it

>> can't do anything about Yeah,

>> exactly. But that's the point. I get it.

I I knew that's what I was signing up

for, so I'm I'm I'm cool with it.

>> I mean, do you like do you like being a

journalist? I mean, do you like sitting

as a speculator or an observer versus

being an actor? I mean, have you ever

thought like, man, I really understand

markets. I really understand the

parallels to history. I've got a good

sense of this. I I feel like I should

play a role. I want to play a role. I

can make money.

>> I think about that. I've thought about

that for years to

>> totally uh about, you know, could I

could I be an actor? could I play a

role? And I often go back to the idea

and may and look, maybe this is not the

right way to think about it, but I feel

like I've managed to have hopefully some

semblance of credibility with some

people by doing it this way. And I'm and

I've been able to be hopefully a a good

part of the conversation and be engaged

in a lot of things. Maybe I could do

that as as as a sort of a direct actor,

too. I don't know. I also think, by the

way, journalism seems to be changing.

MSM, legacy media. I mean, by the way,

there's a lot of people

>> or you could start a podcast and you

could just do whatever you want to do.

>> So, [laughter] I don't know. I don't

know what the right answer is.

>> Tell us who are the characters in the

play today. Who are who are the actors?

Who are the main actors that you see in

>> That's a good question. Yeah.

>> Uh, the main actors, well, I think you'd

probably think about them in a couple

different ways. You sort of think about

on the financial side and probably the

tech side and where they sort of come

together. So, I think obviously and then

the government piece. So obviously the

president, Scott, Howard on on the sort

of business end of things inside the

inside the government. And then I think

in the banking or classic banking world,

you'd say that probably Jamie Diamond

and Larry Frink are probably the most

sort of powerful players in the sort of

traditional legacy piece, but then you'd

probably give a nod to Brian Armstrong

at Coinbase as sort of being one of the

sort of OGs in sort of wherever you

think crypto goes. By the way, I'd

probably hats off to uh to Vlad Tennov

who I think's been sort of very

outspoken sort of talk about

democratizing finance, right? Like he's

sort of represents that. But then you

tell me I mean I think Sam Alman and

Elon and wherever you think AI is headed

next and the Google guys.

>> But it's interesting because you're

playing you're saying that technology

particularly AI is playing a key role in

>> Yes.

>> fundamentally.

>> It seems like it is. Do you think you

think that's true? Well, I'm asking

because you also I mean the capital

that's moving through banks. The there's

there's a whole another set of

industries that generate trillions of

dollars of revenue that seem to be

largely ignored in the conversation

about where the economy where the global

economy is, where it's headed, where

markets are headed. It's all about AI,

right? I mean, and I I think that's like

>> but that's because and I guess the

question is like is that a media thing

or is that like a real economy thing? I

think it's a real economy thing because

I think if you if you x out the mag 7

Yeah.

>> all of a sudden the economy does not

look nearly the same. I mean I don't

want to say we're levitating but you

know we're either

>> I saw a data point yesterday that said

the GDP quarterly GDP was like flat

excluding data center spending. Does

that sound right to you? Did you see

that?

>> It's definitely 100 to 200 basis points

of GDP.

>> Yeah.

>> So sure. So, so let's say if you if you

X out it if you X out the AI boom where

you know where do you really stand? I

think that's a real real life question.

I think the reason why no one's focused

on the rest of the economy first of all

the AI story I think is the more

exciting part but it is what I think is

I don't want to say propping up the

economy but it's keeping the economy

>> well I would I would flip it on its ear.

I don't I think that those comparisons

are kind of dumb because at every point

in the economy there are these dynamic

reallocation of resources and assets.

Things are important at different times.

I think the thing with the AI thing is

like what is every company doing to

figure out what they look like in a

world of AI and if they're not going to

spend that amount of time, their

productivity is probably going to on the

margin shrink to a net new company that

just does what they do just efficiently

and better. That's just the cycle of

creative destruction we've seen at every

point of every meaningful technology.

>> So you think we need to be talking about

this much more outside of the sort of

like tech and data centers and I made

this

>> Yeah, I made this comment. All the

private equity wives got their husbands

to come in and rail at me in the

comments and I said, you know, the the

least success I've had at this software

company I started has been selling into

private equity. It's like I have Fortune

500 and Fortune 1000 customers lining

out the door. I couldn't sell to one

single private equity company what is

effectively a platform that uses AI to

rewrite all your software. And I'm like,

but this is the first company that

should be in line. And what it goes to

is that their heads are firmly in the

sand. And I think that's not a a

decision on technology. It's a

psychological decision. So I think the

weird thing with AI is that it pushes

people to a place of psychological

insecurity. And I think that they think

I don't want this to be my problem. I

need to just wait this out and somebody

else will deal with it in the future.

That's very different than other

technology arcs like you know in the dot

bubble. That's not what we live through.

In the social bubble or the mobile

bubble [snorts]

>> it was always like okay this seems

interesting. Let's figure out how to

embrace it take advantage of it. This is

the one where many people are like nope

I'm just nope.

>> All right but here's the question. So,

you know, 1932 comes around and we had

unemployment in this country at 25%.

>> 25%. Yeah.

>> It was pretty crazy.

>> Yeah.

>> If the AI boom is as successful as I

think we're all excited it could be and

it affects every industry in every way

and all the things we're we're

discussing here, there need to be

massive productivity gains. Like

massive, like crazy. And invariably,

productivity gains are sort of a

euphemism for cutting costs in some

other way. And that ultimately probably

is going to have an impact on employment

in this country and do more things

>> or do more things. And the question is

which one is it? Or by the way, is it a

combination of both? I would I would

probably

>> it's a combo. You highra people so that

they spend less time doing drudgery and

you allow them to work on more important

things. Like I'll give you an example.

My wife runs a life sciences business

and what's funny is when she looks at

AI, she's like, "All of this stuff is

trying to sell me speed." And she's

like, "I don't want speed. I want

quality." She's like, "I'm not trying to

make 500 molecules tomorrow. I'm trying

to make the right molecule for the right

disease,

>> and I'm happy to take five or six years

to do it." And right now I think we're

still in the novelty slopware phase of

AI where most of it is about speed and

you know you're spending a lot of money

to try to get crappy outcomes out

faster. Eventually we'll replace that

with quality outcomes and they'll take a

lot more time and I think that that's

when you'll have the real productivity

improvements. Back to life sciences like

these guys want to get drugs for every

person, right? That's not a tomorrow

thing. That's not like type it in in

English and all of a sudden pops out the

other end. And so I think we're going to

have to take a lot more time. That's

when this stuff becomes really real and

that's going to be very exciting.

>> Andrew, did we see coming out of the

crash of 1929

a big move towards socialism in this

country saying, "Hey, capitalism has

failed us." And you know, how do you

kind of speak to the rise of socialism

today and the argument that capitalism's

failed most Americans?

>> Well, so yes, sorry. And to add on to

that, do you think the New Deal would

have looked the same or would there have

even been a New Deal if there hadn't

been a crash in 2019?

>> Okay, so two quick answers. U yes, that

conversation happened, but not nearly as

quickly as it happened, for example,

after GFC of 2008. So I remember being

down at like Zucati Park, Wall Street,

Occupy Wall Street, all of this

conversation we're having now about

socialism versus capitalism. Like that

happened immediately. In 1929, that

conversation did not happen immediately.

Part of the reason it didn't happen um

is because there was sort of like a slow

roll on the economy and even the market.

So there was sort of a disconnect

between the economy and the market.

People forget at the end of 29 the stock

market actually was down only 17% by the

end and so people thought it was

actually going to come back. There were

times when it actually seemed to be

coming back and and Hoover had this idea

that he could it was almost like a

psychological problem and that the

market and the economy were detached

from each other. He then starts making

all of these sort of frankly mistakes.

Obviously the Fed doesn't uh flood the

system. Hoover decides he wants to raise

taxes. He does smooth Smoot Holly with

tariffs. That's something he had pledged

to do to try to get farmers to actually

vote for him. And he thought that was

like a pledge that he had to keep. And

so there's a whole sort of set of

policies that came into play. And the

Hoovervilles don't show up in these sort

of like tented camps, sort of think

Zucati Park. That doesn't happen really

till 1932.

>> And when you go back and look at why

Roosevelt won, it wasn't actually on the

economy. If you go and look at the

polls, it was over prohibition

>> crazily enough. And so it didn't have

that sort of social effect. Having said

that, you know, famously Roosevelt, you

know, on his inauguration day goes after

the bankers in the inaugural address.

And then, of course, the New Deal shuts

down the banks, has what was equivalent

of national holiday. 9,000 banks go out

of business, right? and and then that's

sort of when the conversation about

capitalism and socialism starts to rear

its head.

>> I think it's because at that point in

American history, we had not yet made

the promise to the average American that

they have the right or the opportunity

to buy a home, to get a a college

education, to have progressive income

every year. As you point out, most folks

were transitioning from an agrarian to

an industrial economy. And so the big

transition in life had been, "Wow, I can

get an apartment. I don't have to work

12 hours a day grueling physical labor

in the fields. I can actually live and

walk to a grocery store and get amazing

food and meet people and socialize and

live in this amazing city. And it was

before we had made all of these promises

that I think led to these expectations

that folks then end up feeling

disappointed by and they blame it all on

the failure of capitalism. My personal

opinion as you know is that it's

fundamentally a function of overspending

by the government and overpromising

rather than allowing natural market

forces to bring everyone up which um

fundamentally I think created and

creates a lot of the the distrust and

the the issues we face. Can I just add

on top of that because you know you're

describing what I always think of as

sort of the Leave it to Beaver American

dream that people sort of have in their

mind which is really more of like a

1950s style dream and actually was a

function I think of a postworld war

situation where

>> where the where the country was we were

monopoly power everybody else was out of

business. This is also the time like the

reason why unions even worked I would

argue for in large part was because

there was this period of time where we

were the only players in town and so we

could we could charge monopoly rents for

a lot of things and people could buy a

house with a white fence and have two

kids and and have an ed all of those

things that we uh now say are the dream.

I'm look there's some people who think

that was an aberration in history. I I

hope it wasn't, but I'm saying there

were a lot of forces at play that

created that dream, but I don't think

that was the dream in 1929.

>> Yeah. Do you buy into Ray Ray Dalio's

points of view that we're at the end of

an empire, end of a cycle?

>> I hope we're not. I hope we're not. I

you you look I think I think you look at

a lot of the things going on right now

just with how much debt we have. I I

sort of look at the Neil Ferguson view

of the world which maybe lines up pretty

directly with uh with Gallia which is

that when you get uh you know GDP you

start to look at like defense spending

as a percentage of GDP there is this

point at which at least historically you

have like a real problem um and that

sort of has set it created the end of

the empire. I think that happens in his

view of the world in like 19 in 2040 so

maybe there's still time to turn it

around. I don't know what you What about

you?

>> It's a very exact forecast 2040.

>> You ever read that um what's that series

the Asimov series on uh where they've

got this like social forecasting

capability? Sorry, totally forgot.

Sorin, do you think that if you look at

GDP going through the crash, it

basically like cratered and then

>> I mean what whatever we think of the New

Deal, I think the the reality is that it

it just created an enormous amount of

investment that then just turned GDP

around. Is there a version of the New

Deal that America needs to do today? Is

there a new compact we need to have with

our citizenry today?

>> Well, but so there's two things that

happened though. there's the New Deal

and then World War II. I mean, so yeah,

I think you have to sort of lump them in

a way together in terms of the spending

profile and why we were spending and and

>> well, even I think even in the mid-30s

though, like really before we were

engulfed in it, we were we were cranking

like 8 n 10% GDP. My my my point is just

more

>> just that idea of a new social compact,

a new set of like

agreements. I I I don't know like is is

we at a point

>> maybe maybe we do but what does that

look like and and where are we going to

get the money to to spend it that's the

real question and how can we

>> I think Freeberg would say well I'm not

going to put words in Freeberg's mouth

is that the agreement is actually not

about spending more but actually less

and getting folks to understand that

these trade-offs need to happen

>> so I I agree with you and I agree with

David on that like I think we have to

cut spending in a big way but this goes

back to the more issue which Everybody

everybody wants more.

>> The irony sorcen and I've shared this

point of view many many times but I

think when we made the promise when the

federal government and uh people who got

elected to represent the population and

the federal government got elected they

said we're going to give you an

education and then we're going to use

federal spending to do that. We're going

to give you access to a home. We're

going to create this federal home loan

program. And in all these cases when

there was a promise made on giving you

the more it was all about increasing

government spending. we're going to give

you access to healthcare.

>> And then Medicare became kind of this

ballooning spending line because in

every case because it's not actually a

free market, the government doing the

spending gets taken advantage of and all

the costs underlying that spending line

get inflated because there's no natural

market force of buy and sell. There's

only a market force of buy. And that's

why education costs have ballooned.

That's why housing has ballooned. That's

why medical expenses, pharmaceutical

drugs have all ballooned. Because as

soon as the government provides that as

a service, it completely distorts the

market and you can never get out of that

freefall. So the fundamental challenge

is you have to have the more difficult

conversation to your point of it's not

more, it's less and we're all going to

have to kind of deal with that or you're

going to do the same thing that

everyone's done historically which is

wealth taxes and you know growth slow

all the stuff that kind of we've seen

many times before. So, but this is now

you're talking about like a political

it's almost a paradox or a challenge

which is how do you get the public to

buy into the idea of less, right? That

is the fundamental question. We all know

that we have to spend less.

>> I I'm I agree with that. I'm and I and

by the way, I feel blessed that I could

probably afford afford it but to take

less. But the question is, you know, if

you don't have it, taking less

>> Yeah. They'll they'll say, "Yeah, rich

like you guys can say that.

Good for you." like that's not

fair to me. And I think that's the big

issue is the people who would proclaim

that would be immediately attacked like

you live with less tax the rich and that

becomes where

Dalio and others have argued

historically. You see these notions of

civil unrest of civic splits that that

that happen. By the way, the book is

foundation the foundation series. I

don't know why it didn't come to my

mind. The idea is called psycho history

where the guy can actually predict all

of these social trends because they're

all predictable and they all happen in

in cycles.

>> Okay. Can I just throw one other thing

in this because I'm so curious about it

and I spent a lot of time thinking about

Smoot Holly in terms of tariffs. So

there's an AR there's a there's a I

think a fair argument that tariffs were

now t tying to national security

resilience today and like we may decide

philosophically you want to have an

automobile industry in the United States

because if you let BYD sell cars in this

country we would not sell cars in this

country and we wouldn't make cars in

this country ever again. And you may

think that that's a bad idea and you

want that to be here. Having said that,

if we do this, which we are, we will

probably spend more to buy less

technologically capable cars 10 years

from now than the next time we all, you

know, if you go on vacation to Europe or

Asia and get in the back of one of these

other cars. And how should we think

about that? That to me is like a real

fundamental question about capitalism

and also about resilience and national

security.

>> What I would offer to you is the way

that we should think about this is how

do Americans and American society

preserve maximum optionality in the face

of very difficult decisions in the

future. So if geopolitically

we are induced into a war, all wars have

tremendously bad consequences.

How would we have the wherewithal to not

have to be a part of it? If you look at

the last number of wars, these are all

ultimately over resources. Right.

>> Right.

>> And if you think about resource

independence,

there are many, many things today where

America is just fundamentally instable

because we don't have resource

independence. But if we were to get that

and then we had the building blocks,

we wouldn't actually have to fight a

war. Now, there may be other reasons and

people may pull us into wars and I I get

all of that, but I think that that's a

really big question. Would I be okay

with a less better car, but having a

national transportation infrastructure

that we control and cannot be turned off

by somebody else? On the margins, I

would say yeah, I'd be okay with that.

>> And and the interesting part though is

there's going to be a premium on that,

right? Like we're going to pay more for

that. And that may be that may just be

the cost of doing business.

>> Sure. And that may that's that may be

the cost of strategic flexibility and

optionality. And I think if you just

think about what the downstream

consequences of not having that are

>> and maybe and by the way maybe those

costs are even higher and and we and

those costs don't get added and they

don't get added into the model. Right.

>> You're absolutely right. They're they're

always higher because they're measured

in human lives.

It's always higher. It's always more

costly.

>> Andrew, who do you sell the uh movie

rights to of your book and when's the

movie coming out?

>> Uh haven't sold them yet. We're talking

to a couple people. Hopefully, we'll

have some news on that sometime soon

>> because it sounds like it's a very

peopledriven story. So, it should make

for kind of great drama, right?

>> Oh, totally. I mean, I tried to write it

I didn't try to write it uh for film per

se, but I tried to write it in as

cinematic a way as humanly possible

given that I was also constrained by,

you know, I had to have archives and

notes and diaries. You know, it looks

like a long book. By the way, folks,

it's a little bit shorter because

there's a hundred some odd pages of

endotes at the end uh for those who want

to uh and by the way, some of the

endotes are kind of fun.

>> Andrew, when you write these things, do

you

>> and then when you license it, for

example, like when they started to make

billions?

>> Yeah.

>> Do you take a strong point of view and

how the scripts in that case or the

screenplay in this case will be written

or do you kind of say, "Okay, here's my

source material. You guys do the best

you can and you kind of do you care who

the actors are. Do you care about any of

that stuff or do you think it's like,

okay, they're licensing it off off on

your merry way. Do the best you can?

>> You know, I think actually in this day

and age just

>> because it's probably in your mind,

right? You have a vision of what this

whole thing looks like visually. You

probably have faces, right? You probably

you probably have all of this. So, how

do you do you let go of that or

>> Well, I think you first of all, I think

you have to let go a little bit at some

level because that's just the nature of

the business for better or worse. I

think right now in this streaming

environment, you know, there's sort of

two ways you can go sell projects like

this. One is you go sell it to a

streamer and they go off and they try to

develop it. They go find the team that

does it. The other approach is, you

know, find the actor, maybe a director,

maybe the writer all at one time and

then walk in with it. So in that

context, you probably have more of a say

in the future of it. you know, right now

just the way the business is, you know,

the Hollywood's buying a lot less stuff

and I think is more interested in sort

of the former version where you show up

with the whole thing sort of

prepackaged, pre-planned, but you know,

it almost changes, you know, by the

month in terms of what they want.

>> Are you uh doing the audio book

yourself? Were you reading the

>> I read it. You guys are in the audio

business yourselves. So I will tell you

I went in it's 13 hours the the book in

total. You do it on you know double time

and you you'll be done in uh you know

six and a half hours. But uh it probably

took me like 30 hours. It takes a while

and they do it.

>> I did do it. Yeah. I did it. It was fun.

It was like

>> your first time. Was it your first time

reading the audio book?

>> I've never read it before. When when Too

Big to Fil came out, we had a British

actor do it and I enjoyed read I enjoyed

listening to him. He added some gravitas

to the to the project because that you

know the Brits always sound smarter than

us.

>> British.

>> Pretty much [laughter]

pretty much pretty much.

>> Okay.

>> Sounds smarter.

>> Sounds smarter. I was going for sounder

than us.

>> They do. They do.

>> Well, Andrew, thanks for joining us.

This has been awesome. Congrats on the

release of your book. Thanks for

chatting. Good broad range of topics.

>> I'm buying it. I'm buying it. Yeah, I

appreciate guys. Uh, you know, I I enjoy

this so much and I listen to you guys so

religiously. So, uh, this is a

>> You're the best, bro. Thanks for doing

it. I mean, it's it's an incredible

period of of American history that, to

your point, not enough people really

understand. I'm glad you so I find it so

interesting.

>> That 20 year period, I would say 28 to

48.

>> Well, thank you.

>> Wow. It's got everything.

>> Thank you guys. I appreciate it.

>> All right. We'll talk soon. Thanks, man.

See you. Thanks, man.

>> [music]

>> I'm going all in.