All-In with Chamath, Jason, Sacks & Friedberg
00:04:53 · David Sacks, Jason Calacanis
[00:04:53] S1: This was a shalking. This was a blowout. It was, I believe, the biggest midterm loss since the Watergate midterm loss. So this was obviously a big defeat for the Republicans. There's no sugarcoating it. What's the reason for that? I believe the vice president, J. D. Vance, explained it very well. It was this war. And I... The only thing I would add to that is it was this war and the economic consequences that follow from the war. So what am I talking about? Price of gas, it was around $3 before the war went over 4 and higher, price of diesel even higher and then that factors into the cost of food, all the goods that have to be transported, also fertilizer costs went up. And so you saw the inflation rate at the beginning of the year back in January before the war, it was down to 2.4%. We finally had that problem licked just about. Remember, was 9% under Biden And in the first year of the Trump administration, we brought it down to 2.4. The market was expecting multiple rate cuts this year. And we were forecasting 5% GDP growth, which I don't think was too overly ebullient based on what we were seeing at that time combined with the expectation of rate cuts. [00:06:05] S0: Aggressive but not unbelievable. Unrealistic. Not unrealistic. Yes.
00:06:05 · Jason Calacanis, David Sacks
[00:06:05] S0: Aggressive but not unbelievable. Unrealistic. Not unrealistic. Yes. [00:06:08] S1: Okay. And by the way, the prediction markets back in January were showing a 70% chance of Republicans holding the Senate, and then the House was perceived to be a toss-up. I think that if this election had happened back in January, it would have been a pretty successful one for the Republicans. What happened since then? Well, you got inflation going from 2.4 to 3.7%. Again, mostly driven by the cost of gas and diesel and all these other products where you have to pay a higher cost of transportation. And you end up not having any rate cuts, you end up getting a rate hike that brought the cost of mortgages to roughly seven and a half percent. And that overall fed this narrative around affordability. So it's the war plus the perception of the lack of affordability is what really created this tidal wave. Now, you know, I I have to admit, I thought that... I mean, look, I didn't think this would be a great election for Republicans, but I thought that it wouldn't be this bad. I I I was wrong [00:07:12] S0: about [00:07:12] S1: You [00:07:12] S0: said it was a spritz. It would be a spritz.
00:07:13 · David Sacks
[00:07:13] S1: I thought it could be a spritz. That was based on a couple of things. Number one is that the last few elections, the pollsters have all been wrong and and Trump has always managed to defy the odds and I thought that this polling data must fall into that pattern. And then the second thing is that the economy is not that bad. I mean, in fact, it's quite good. So just today, we had a new jobs report. It was a very robust jobs report. The number of new jobs created is being revised up. You've got unemployment tick down to almost record low, 4.1%. You've got still pretty healthy GDP growth. In the first half of the year, it was around 2.1 to 2.5%. And then third quarter, the tracking by GDP now is 3.7%. So I thought given the fact that you got great employment, you got solid GDP growth, I thought the fact that inflation was too high would not result in this type of tidal wave. I thought it'd be more like the Biden midterms where he had extremely high inflation, but the economy itself was still pretty decent and it ended up being more of a red spritz as opposed to a red wave. So that was my pattern recognition. It was wrong and I think one of the reasons why it was wrong here is because I think the public is in a pretty ordinary mood. They're very concerned about affordability. It doesn't matter how good the economy actually is, it matters how good people perceive it to be for them. And in the first year of the Trump administration, we made enormous progress in delivering real post tax household income. It rose by like 3.1%. But because of the inflation numbers over the last six months, you're starting to chip away at that, right? Because again, as long as inflation is growing faster than your wages, you're losing purchasing power in real terms. I think the electorate is getting ornery about that. And just one other thing I wanna say about it, which is there's one other piece of why the war I think was so bad, which is it fractured the Republican coalition and the Republican base. J. Cal, you've pointed this out. We lost all the podcast bros. I mean, obviously, was Tucker Carlson and Joe Rogan and Theo Von and and that whole set Megyn Kelly. Megan Kelly. So, you know, a house divided against itself cannot stand. I mean, we lost a huge part of our base. And I would say that the Republicans in particular are dependent on the podcast circuit.
00:09:43 · David Sacks, Jason Calacanis
Let's call it alternative media. Why? Because the mainstream media hates us. Legacy media hates us. They will never give [00:09:51] S0: us their percent left. So it is Yeah. What it [00:09:54] S1: And I think one of the reasons why Trump produced such a resounding victory in 2024 is he appealed to that whole podcasting circuit. And and frankly, we should have done a better job giving them all front row seats in the White House press room. We should have stayed connected to all of all of them because they are our media. By the way, they don't, you know, they don't work for us. They're willing to defect, obviously. [00:10:15] S0: They have their own opinions. They have [00:10:16] S1: their own opinions, but we have to pay attention. I think our side has to pay a lot of attention to them because without them, we don't have any media that supports us. So I think that losing them was a big deal. It fueled Yeah. The sense. And I think that a lot of those people showed up and then did a protest vote. Cause they wanted to send the message that they want out of this war.
00:10:16 · David Sacks, Jason Calacanis, David Friedberg
[00:10:16] S1: their own opinions, but we have to pay attention. I think our side has to pay a lot of attention to them because without them, we don't have any media that supports us. So I think that losing them was a big deal. It fueled Yeah. The sense. And I think that a lot of those people showed up and then did a protest vote. Cause they wanted to send the message that they want out of this war. [00:10:39] S0: Friedberg, just a couple of quotes for you to react to. Ted Cruz called it a Watergate level repudiation. Chamath, DeSantis said, quote, close to an extinction level event for the current GOP. And in a very long expos that JD Vance did, that was pretty surprising for everybody that there's some reporting. It was approved, maybe not approved. We'll we'll get all that out later. But what's important is what he said. He's in line with The war was the driving force here in the loss and that the GOP has to rebuild trust with voters on four axes, ending the war, focus on cost of living, putting America first, and maybe a little controversially, change our relationship with Israel. What are your thoughts on JD's post and the other reactions, and just why did this turn out to be a tsunami? Don't know if it's as [00:11:35] S3: much of a positioning and marketing issue as it was sort of fundamental. I'll go back to the clip from the prediction show right after Trump was elected. Okay. Can we pull that up, Nick? I think
00:11:35 · David Friedberg, S4, Chamath Palihapitiya, Jason Calacanis
[00:11:35] S3: much of a positioning and marketing issue as it was sort of fundamental. I'll go back to the clip from the prediction show right after Trump was elected. Okay. Can we pull that up, Nick? I think [00:11:49] S4: that the the party line is that socialism was defeated in this election cycle and that there was a resounding kind of vote from the American populace against socialism. And I actually think my my contrarian belief is that we'll [00:12:05] S3: see a rise, a dramatic rise in socialist movements in 2025 in The United States. [00:12:12] S2: Okay. [00:12:12] S3: And I think that we are gonna see, as Gavin pointed out, [00:12:15] S4: an acceleration of progress. We're gonna see an unleashing of, economic growth because of deregulation and AI. But I do think that some industries and some companies are gonna be huge winners and some companies are gonna be huge losers. There's gonna be some parts of the economy that are gonna be big winners and some parts of the economy that are gonna be big losers. [00:12:33] S3: So I just wanted to know nailed [00:12:34] S0: it there, Friedberg. That was, very accurate for the first year of the presidency.