The Megyn Kelly Show - Silicon Valley Bank Collapse, and Mayhem at Stanford Law, with David Sacks, Vivek Ramaswamy, and Tim Rosenberger ｜ Ep. 510

00:00:00.500 Welcome to The Megyn Kelly Show, your home for open, honest, and provocative conversations.

00:00:11.920 Hey everyone, I'm Megyn Kelly. Welcome to The Megyn Kelly Show, live from Montana.

00:00:17.220 Happy Monday. We have an extraordinary show for you today. This is a must listen.

00:00:23.060 As The Wall Street Journal put it this morning, the U.S. banking system is under siege.

00:00:27.140 And we have two of the top voices in Silicon Valley with opposing views, and how, on what to do about it.

00:00:34.440 David Sachs and Vivek Ramaswamy are both here to have a discussion and debate regarding the fallout from the collapse of the nation's 16th largest bank, Silicon Valley Bank.

00:00:46.400 David argues it's right for the federal government to step in and protect depositors.

00:00:50.960 Vivek says the bank does not deserve it and we are looking at a moral hazard here.

00:00:55.300 The pair have been going back and forth in heated Twitter exchanges, I would say, that are atypical for both men.

00:01:02.620 And they have agreed to come on this show today to hash out their arguments.

00:01:06.680 This is a discussion you will not hear anywhere else, and you cannot miss on a day like this.

00:01:11.720 You will emerge smarter than everyone else you know on this particular topic.

00:01:15.460 Here are just some of the latest headlines on this story.

00:01:19.100 Treasury Secretary Janet Yellen announcing last night that Silicon Valley Bank's uninsured depositors would gain access to their deposits this morning.

00:01:28.200 And President Biden saying, quote, Americans can have confidence that the banking system is safe.

00:01:33.540 But now, hours into the trading day, several regional bank stocks have been halted.

00:01:39.500 The trading of those stocks has been halted amid fallout from the collapse.

00:01:43.820 So clearly there is something closing in on panic with respect to some of these smaller banks.

00:01:50.540 First Republic Bank was down over 70 percent at one point.

00:01:54.360 Meanwhile, on the larger bank side, Charles Schwab is seeking to reassure its investors and customers that it is well positioned during what has been a volatile trading day already.

00:02:05.220 Charles Schwab is the eighth largest bank in the country.

00:02:08.380 It saw its stock price drop as much as 20 percent in early Monday trades.

00:02:12.820 We're going to cover it all the good, the bad, how it affects you and your money in your bank and your paycheck, because this could affect people in various different streams, depending on how it goes.

00:02:24.880 David Sachs, founder and general partner of venture capital firm Kraft Ventures and co-host of the All In podcast.

00:02:32.480 And Vivek Ramaswamy is a Republican presidential candidate, declared, and founder of Strive Asset Management.

00:02:38.560 Vivek, after he went to Yale Law School, made all of his money in biotech and is now turning to politics, as I mentioned.

00:02:46.700 So these are this is a great panel.

00:02:48.360 You guys have been snarking at each other and fighting online.

00:02:50.620 But I understand it's you know, this this whole thing brings up strong feelings and not just for you guys.

00:02:55.760 Right. For the average consumer and taxpayer out there who worries about their their balance sheet and their bank and so on, too.

00:03:01.860 So thank you for the spirit of debate and for agreeing to come on and hash it out here.

00:03:05.340 All right. So, David, let me start with you.

00:03:06.640 So most people going about their lives, they have no idea what Silicon Valley Bank is.

00:03:10.440 Sixteenth largest bank. And this is the second largest bank failure in U.S. history.

00:03:15.580 So it's a big deal. But this is like sort of a weird bank.

00:03:18.700 It's like a tech bank that all of you and your people out there used a lot.

00:03:23.160 Probably, you know, people in my industry less so.

00:03:26.540 So explain how it sort of found itself in this position.

00:03:29.020 Yeah, well, I think this story really actually started about a week before you saw SVB go into receivership on Friday with the testimony of the FDIC chair who acknowledged or admitted that U.S. banks had something like six hundred twenty billion dollars of unrealized losses, not an exotic instruments like derivatives, but on simple, mundane T bills and mortgage bonds.

00:03:54.880 This was a result of the spike in interest rates.

00:03:58.220 Wait, wait, wait, wait, wait. I'm jumping in. I'm jumping in.

00:04:00.800 Yeah. Hold on. I'm jumping in because I want to keep it one on one.

00:04:04.180 You can talk five of one, but I'll just be the annoying one on one or just to keep everybody up to speed because not everybody knows everything that you know about like banking and trading.

00:04:12.100 So you're basically saying unrealized losses. Basically, a lot of these banks invested in things like treasury bonds at when interest rates were really low.

00:04:19.760 And as the Fed kept hiking up interest rates, that those investments were basically becoming devalued and you didn't actually lose any value unless you're forced to sell the treasury bonds and these banks.

00:04:30.440 So it's unrealized. You have a loss on the on paper, but you don't have it in real life until you actually have to sell it.

00:04:35.460 So you're saying a lot of these banks had unrealized losses, which are scary, but only actually impact you if you have to sell the bonds.

00:04:42.380 Go ahead. Right. I think that's very well said.

00:04:44.940 But the thing to understand is even though the losses may be unrealized, the value of those bonds has gone down because the value of bonds moves in the opposite direction of interest rates.

00:04:52.640 And as we know, interest rates have spiked over the last year in a way that we haven't seen in decades because we're dealing with the worst inflation in 40 years.

00:05:01.860 This leads us to SVB. They had about 80 billion dollars of mortgage bonds, even though they're a startup bank.

00:05:08.320 They serve Silicon Valley. I think it's important to understand that they got in trouble not because of some sort of risky startup behavior.

00:05:14.940 They got in trouble because they basically bought a bunch of mundane, boring mortgage bonds and the value of those bonds got decimated over the last year.

00:05:25.540 And their capital basically got to the point where they needed to do they basically need to raise emergency capital.

00:05:32.420 And when they announced that they were going to have to do a stock issuance, the hedge funds got a hold of this.

00:05:37.820 Their share price basically tanked. And then a run on the bank started on Thursday.

00:05:41.980 People basically began to worry that it was insolvent.

00:05:44.420 And then on Friday, the Fed stepped in and took it into receivership.

00:05:49.820 And that was the start of this crisis.

00:05:51.260 But if you look at what's going on now in the stock market today on Monday, this is a much bigger problem than Silicon Valley Bank.

00:05:59.160 You're seeing now trading was halted this morning in roughly half a dozen major, major regional banks.

00:06:07.360 The the interest, the bond market now has rallied significantly.

00:06:11.760 It is betting that the Fed will now have to cut interest rates because banks are in trouble.

00:06:17.580 And so, you know, I wish this was just a story about SVB and Silicon Valley Bank, but it's a much bigger story than that.

00:06:24.500 And this is where I took issue with Vivek's take on this is that he basically said this was a Silicon Valley problem.

00:06:32.440 We shouldn't bail them out. We shouldn't worry about it. This is no systemic risk.

00:06:36.700 And two hours after he wrote that piece in The Wall Street Journal, Signature Bank in New York was seized by regulators.

00:06:42.900 There was a run on the bank that started on Friday.

00:06:44.600 And now we see this huge problem in all these other banks on Monday.

00:06:48.540 So this is where I fundamentally disagree with Vivek.

00:06:51.760 I think that we probably share a lot of views in common about a lot of things, including where SVB mismanaged its finances, because certainly they did a bad job.

00:07:00.640 But this is a much larger issue because of the the fact that the Fed has slammed on the brakes after basically running the American economy at 150 miles an hour.

00:07:11.760 So that is the wreckage we are starting to see right now.

00:07:14.560 And we can talk about SVB, but we should also talk about the larger problem in this economy.

00:07:18.380 We're definitely going to get to all of that.

00:07:20.320 And Vivek, before you respond, just to add some some more meat on the bones of the background, because I didn't know anything about this prior to this story breaking on Friday.

00:07:29.000 It's kind of an interesting thing.

00:07:30.100 So tech kind of has its own bank and it's this bank.

00:07:32.820 And yes, they invested in all these so-called safe government bonds like these treasuries and these mortgage backed securities with the low interest rates.

00:07:40.080 But I know you've been pointing out the those interest rates going back up was foreseeable and other other banks foresaw it and hedged their investment portfolios accordingly.

00:07:48.160 You know, SVB did not, which is one of the questions you've been raising about whether they deserve they deserve help.

00:07:54.220 So they were living large for a long period during the tech bubble, 2021, post pandemic, during pandemic, all these tech companies did so well.

00:08:03.240 They hired a bunch of people.

00:08:04.580 They were in the bubble and then post the bubble, like it's been popping in tech before it popped anyplace else.

00:08:10.900 Not only have those have those companies been doing less well and their deposits into Silicon Valley Bank have been going down and they need to withdraw more to cover payroll and things like that.

00:08:21.920 So SVB's coffers are less full, but then the Fed steps in, starts hiking up the interest rates.

00:08:27.260 So the value of their portfolio, the SVB's overall is going down.

00:08:31.180 So it's a bad combo.

00:08:32.480 The money is being pulled out and the money they're taking in is going down.

00:08:35.840 And so it leads to sort of a crisis.

00:08:37.820 And then, as David just made reference to, this is kind of an interesting thing about it.

00:08:42.540 So the investor money is drying up.

00:08:43.760 The depositors begin withdrawing money to make payroll.

00:08:46.620 SVB needed to raise money to meet the withdrawals.

00:08:49.540 The dispatch news service had a great write-up on this.

00:08:52.540 I'm quoting from them in part.

00:08:54.160 Then they had to sell a $21 billion portfolio.

00:08:59.200 Well, no, no, sorry.

00:08:59.980 Let me revise that.

00:09:01.500 Then to shore up the resulting hole that they had in their balance sheet, they announced a capital raise of $2.25 billion.

00:09:08.580 That's what they had to do.

00:09:09.920 And that's when the panic ensued.

00:09:11.860 They announced that they were shoring up their suffering balance sheet and that they needed a capital raise of $2.25 billion.

00:09:19.940 That's all.

00:09:20.460 But then panic ensued, panic ensued.

00:09:23.480 And on Thursday, customers withdrew $42 billion.

00:09:28.520 So their position, Vivek, has been, we could have covered the $2.2 billion.

00:09:31.440 If we had had somebody come in and help us, we could have gotten that.

00:09:34.200 No bank could cover $42 billion.

00:09:36.840 Well, one of the issues that probably David and I agree with, I mean, this was mismanaged at the level of the CEO,

00:09:40.840 who actually, I think, in a bad act, sold stock just several days before the calamity, but also botched the communication, right?

00:09:48.100 They only, in securities filings, cryptically said they were raising equity capital.

00:09:51.820 That didn't instill confidence.

00:09:53.360 And then he committed the telltale cardinal sin during a bank run of admonishing his own customers to stay calm and calm down.

00:10:00.220 So no better way to actually drive a bank run crisis than that.

00:10:03.700 But I want to actually put my finger on a really important point here.

00:10:06.600 What we saw on last day, because I think David and I agree on a lot, let's focus on where we disagree for the sake of the discussion.

00:10:12.780 This was effectively a bailout of Silicon Valley tech startups.

00:10:16.860 That is who the customers of Silicon Valley Bank were.

00:10:19.860 And it's important to see exactly what this was.

00:10:21.480 It's not a bailout of Silicon Valley Bank.

00:10:23.080 Everyone agrees on that.

00:10:24.160 The equity holders in Silicon Valley Bank are crushed, as they should be.

00:10:27.280 But this was a bailout of tech startups in Silicon Valley who chose to bank with SVB.

00:10:32.900 And what does this do?

00:10:34.160 It incentivizes some really bad behavior.

00:10:36.320 I think a lot of folks in Silicon Valley have somehow gotten addicted to this mentality that financial discipline is not their job.

00:10:43.160 There are CFOs I've talked to in the last 48, 72 hours who didn't even know.

00:10:47.560 CFOs of multi-billion dollar tech startups who didn't even know what the deposit insurance limit was from an FDIC perspective.

00:10:54.040 Roku, inexplicably.

00:10:55.800 I just want to give you another example.

00:10:57.240 Roku, inexplicably.

00:10:58.180 It's like an $8 billion some odd public company, something like that.

00:11:00.700 Had close to half a billion dollar balance on balance with Silicon Valley Bank itself without diversifying.

00:11:06.740 And I just think one of the things that we're doing here is rewarding that bad behavior by saying that even though you didn't do your diligence, even though you weren't exercising financial, basic financial discipline, we're still going to reward that anyway.

00:11:17.800 And then the dirty little secret here, Megan, is that Silicon Valley Bank and also all the people around it, but Silicon Valley Bank included, lobbied for years for lower capital requirements and lower risk requirements on the express thesis that they were not systemically important.

00:11:33.960 What does that mean?

00:11:34.580 It means they're saying we're never, we're not never going to be important enough for the federal government to step in and save us and treat us any differently anyway.

00:11:42.720 That's why we get to take greater risk.

00:11:45.180 That's why perhaps they didn't even want to engage in interest rate hedging, though any other professional bank would have done it.

00:11:50.100 And yet in their hour of need, what does everyone in and around Silicon Valley argue?

00:11:55.060 They argue the bank run thesis that it is indeed systemically important.

00:11:58.240 And I just think that's hypocritical and it's a problem.

00:12:00.360 And I think we've got to separate this question of how we would have handled Silicon Valley Bank, which is the bigger of the two, significantly bigger in scale than Signature Bank and also came first and also it's worth talking about.

00:12:11.540 Silicon Valley Bank versus how we want to handle a bank run on the rest of the banks across the country.

00:12:16.780 So I think that there's a way to separate this.

00:12:18.620 In my Wall Street Journal op-ed running in print today, I separate the two.

00:12:21.980 If you want to raise the FDIC deposit insurance maximum above $250,000 for everybody, that's a reasonable conversation to have.

00:12:28.880 The Federal Reserve is the lender of last resort to all banks in this country.

00:12:33.620 Great.

00:12:33.860 There are other mechanisms.

00:12:35.320 But I think it really sows well-founded mistrust when you change the rules on a whim, on the fly, after the fact, for whichever darlings might be the greatest favorites.

00:12:45.320 And the arguments I heard over the weekend were really, I think, discouraging to me all the way from one end of the spectrum saying that, no, no, no.

00:12:51.320 These are America's entrepreneurs, the chosen class, the special ones driving the American economy.

00:12:57.060 I mean, the number of calls I got, I mean, people throwing spaghetti against the wall, that's one argument to compete against China. 0.97

00:13:02.160 I think that actually captures the essential intuition here is that these are the people who deserve to be saved, even if they are playing by a different set of rules than everybody else.

00:13:09.220 Two, then saying there's going to be a bank run across the rest of America, when, in fact, if that's really the case, you could handle that in a lot of different ways than just bailing out a bunch of tech startups who are banking with Silicon Valley Bank.

00:13:20.920 And I think this is just going to incentivize more of that.

00:13:23.660 Let me explain what, let me explain this, the quote unquote bailout that's actually happened.

00:13:27.740 So what happened was on Friday, the FDIC assumed control of the bank.

00:13:32.800 The management was removed after this $42 billion is withdrawn.

00:13:36.480 And he's the CEO is up there saying, Greg Becker, stay calm, stay calm, as you point out, not calming in any way.

00:13:43.480 So the FDIC seizes control.

00:13:46.140 Then they announced the Treasury, the Fed, the FDIC announced no losses associated with the resolution of this problem.

00:13:52.260 The Silicon Valley Bank will be borne by the taxpayers.

00:13:55.640 They now announced late last night they are stepping in to save the feds are stepping in to save this bank, essentially, but not with taxpayer dough.

00:14:03.440 They say they're going to tap into the FDIC insurance fund made up of premiums paid by banks, not by taxpayers, that they will then replenish that fund with a, quote, special assessment, not on taxpayers, but on banks.

00:14:20.620 And so that's supposed to make the taxpayers feel better that we're not paying for.

00:14:24.080 I mean, my general philosophy is we always pay in the end.

00:14:26.960 The bank customer always pays in the end.

00:14:28.580 Why would the banks just suck it up and not pass it along to the customers however they could eventually?

00:14:32.340 But we can get to that eventually.

00:14:34.880 The regulars, meantime, are seeking a white knight.

00:14:37.680 They want somebody to step in and buy the bank and its assets.

00:14:41.100 HSBC, another bank, bought at least the UK version arm of SBB for one pound.

00:14:47.820 But so far, no takers on the American end.

00:14:51.220 And that's where we are now with the feds in control, assuring us, David, that we are not going to pay for this.

00:14:57.500 But before we get to that, can you speak to some of Vivek's points about how, oh, this is just the special class.

00:15:03.160 And they told us all along that they weren't supposed to be essential.

00:15:06.680 And that's why they were allowed to proceed under this sort of loosely regulated scheme as opposed to that imposed by Dodd-Frank, which everybody else had to do after the 08 crash.

00:15:16.700 Well, OK, let me start with a couple of points where I agree with Vivek, and I'll go to the points where I disagree.

00:15:21.620 So the part where I agree is that the management of SVB did not do a good job managing their risk.

00:15:27.620 They deserve to go under.

00:15:28.900 No one, as far as I know, supports a bailout of SVB.

00:15:33.280 Its stockholders are wiped out.

00:15:34.580 Its bondholders are wiped out.

00:15:35.960 Its stock options are wiped out.

00:15:38.020 The executives are disgraced.

00:15:41.400 They're probably going to spend years in litigation.

00:15:43.880 You know, nobody is saving SVB.

00:15:45.900 The question here is the depositors.

00:15:48.780 And I think Vivek here is really simplifying the customer mix.

00:15:52.420 You had 40,000 small businesses who used SVB to do their banking.

00:15:57.540 And many of them are just, you know, small companies, 10 to 100 employees.

00:16:02.000 These are not big tech companies.

00:16:03.840 These are companies that have to run payroll on Wednesday.

00:16:07.180 If they didn't get access to their money today, as the Fed provided, they would be furloughing and firing employees.

00:16:13.020 They have employees all over the country.

00:16:15.060 They have customers all over the country.

00:16:16.620 There was a CEO of one of their customers who lives in Columbus, Ohio.

00:16:21.460 And she says she drives a Honda and basically took on a second mortgage to help fund her startup of 15 people.

00:16:26.900 So I think it's a gross simplification here just to say these are a bunch of rich tech fat cats who are going to get hurt or a bunch of VCs who are going to get hurt by this.

00:16:35.440 This is basically 40,000 small businesses.

00:16:37.320 And I think they need to be protected.

00:16:39.460 I think this position of basically to screw them, I think that is untenable and will lead the Republican Party to ruin.

00:16:46.340 The fact of the matter is that these small businesses can't – they don't have visibility into the balance sheet of these banks.

00:16:54.320 They can't make an educated decision here about how risky the bank is.

00:16:57.900 Well, but you know whether you have over 250,000 in the bank.

00:17:00.860 We all know whether we have over – we all know.

00:17:02.600 We all see that sign.

00:17:03.560 If the IC insures up to 250,000, that's it.

00:17:06.440 Beyond that, you're taking your own risks.

00:17:07.640 I have companies that were using SVB for business banking, and they had more than 250,000 in there, and they sweep that money into a money market fund.

00:17:18.900 But that money market fund was basically custody by SVB, and they could not get access to their money.

00:17:23.700 So are you telling me that when they log into their account at SVB and it says that their money is safe in a Morgan Stanley or BlackRock money market fund?

00:17:32.140 Oh, you weren't smart enough.

00:17:34.660 You're SOL.

00:17:35.780 You should lose that money.

00:17:36.880 Is that your position?

00:17:38.060 I mean, really, are we going to do that?

00:17:39.520 Hold on a second.

00:17:40.040 Is that the position of the Republican Party?

00:17:43.120 Is that small businesses all over the country – and if you do this for SVB, you're talking about doing it for Signature Bank, and you're talking about doing the next half dozen banks, that basically there's a run on them right now.

00:17:52.560 Their stocks are being – we're tanking and are being frozen.

00:17:56.340 So, David, I think I want to say a couple things here because I do – this worker pontification did bother me over the weekend where actually people are just using the idea of workers.

00:18:05.700 Suddenly Silicon Valley tech startups with uncapped upside, the business plans of multi-trillion dollar companies are now reclassified as small businesses with workers.

00:18:13.120 Let's talk about that for a second, okay?

00:18:14.920 Most of these are venture-backed tech companies banking with Silicon Valley bank, okay?

00:18:19.460 Now, they have uncapped equity upside that taxpayers that indirectly bear the cost of this, and they do, did not enjoy.

00:18:26.120 And here's the other thing, okay?

00:18:27.880 You and I know this well, so let's not play this game where, you know what?

00:18:31.320 The investors in these businesses, it would be a very painful thing to do.

00:18:35.400 But if you made a mistake as the management team, the business model of every one of those tech companies is the same today as it was last week and as it was last month.

00:18:44.180 So if those business models are really viable, there's capital that those investors, frankly, people like you, can be putting into those same portfolio companies.

00:18:51.380 But that is a difficult thing to do.

00:18:52.680 It is painful.

00:18:53.520 I know it is painful.

00:18:54.340 It involves dilution.

00:18:55.440 It involves added capital off a venture firm's balance sheet.

00:18:58.220 The founders are going to make less money when their stock goes up.

00:19:01.380 And that's part of the consequence and part of the bargain of capitalism is when you make a bad risk management decision by putting way too much money in one bank.

00:19:08.860 Even if your business model continues to hold, you personally are going to make less money because you had to actually raise capital to make up for the hole that you created on your balance sheet.

00:19:17.840 That's how capitalism works.

00:19:19.400 Now, I think this pontification of the worker to say that this is about, now it's not tech startups, let's call them small businesses, and then it's really about the workers, is really actually a myth to actually protect people just from equity dilution.

00:19:29.940 And here's the other thing on that point.

00:19:31.520 Many people, and you know this well too, who did business with Silicon Valley Bank, had special arrangements with Silicon Valley Bank.

00:19:37.460 Now, you and I share in common the fact that venture debt is usually a bad idea for a startup.

00:19:42.080 But nonetheless, Silicon Valley Bank did provide venture debt to a lot of these startups, which allows those founders and CEOs to own greater ownership percentage in their firms.

00:19:51.060 The taxpayers directly or directly don't participate in that.

00:19:53.820 I'm up against a break.

00:19:54.620 I want to give you just a quick chance to respond to it, David, and then a much more full chance after the break.

00:19:58.860 Yeah.

00:19:59.260 So listen, I understand that tech startups are a convenient punching bag right now for a political candidate, but we need to be specific about what these companies did wrong.

00:20:09.360 They opened a checking account.

00:20:10.960 They opened a bank account.

00:20:12.040 They didn't manage their business in a risky way.

00:20:14.220 They did what every other small business in the country would do, which is open a bank account.

00:20:18.420 And you want to tell them, you want to act like it's a moral hazard, if we don't make them responsible, if they don't lose all their deposits, they didn't make risky investments here.

00:20:30.340 Hold on a second.

00:20:31.160 Can I finish?

00:20:32.580 That's not a small business error.

00:20:34.320 Let me finish.

00:20:35.020 Let me finish.

00:20:36.460 Okay, let me finish.

00:20:37.660 Go ahead, David.

00:20:39.140 They did not make risky business decisions.

00:20:41.580 They did not make risky investments decisions they need to be bailed out of.

00:20:44.700 They opened a checking account.

00:20:46.500 Give me a break.

00:20:47.180 There is no moral hazard here.

00:20:49.220 Listen, if you went to the doctor and he basically committed malpractice, it's not your fault because you didn't shop for a better doctor.

00:20:56.080 If you go on a plane and it crashes, it's not your fault because you bought that ticket.

00:21:00.600 Give me a break.

00:21:01.240 Small businesses are not in the position to evaluate the balance sheet of these banks.

00:21:06.140 Even Bill Ackman, a sophisticated investor, says he can't figure it out.

00:21:09.600 It's up to the Fed to do that.

00:21:11.320 The Fed has to protect depositors.

00:21:14.600 They have to provide confidence in the system.

00:21:16.080 And the reason why you're seeing Iran the banks right now is there is not confidence. 0.66

00:21:20.000 That is why we have to restore it.

00:21:21.420 That is why we have to protect deposits.

00:21:23.540 And if you don't protect deposits in this country, okay, we are going to have a banking crisis like you've never seen before.

00:21:29.380 Then do it for everybody the same way with one set of rules.

00:21:31.520 Not to say it's $250,000 for everybody else.

00:21:33.700 Yeah, sure.

00:21:34.440 Let's change the rules after the fact for Silicon Valley Bank.

00:21:36.020 No, let's do it for everybody.

00:21:37.260 We absolutely have to do it for everybody.

00:21:38.000 I mean, is there some endless supply of money that we don't know about that's going to back all these banks?

00:21:42.240 Like, that bank insurance fund sounds like it was depleted by this rescue.

00:21:46.320 And although they say they're going to do a special assessment on the banks to replenish it,

00:21:49.420 as I said before, I got worries about who actually pays for that in the end.

00:21:53.120 All right, so much more to get to.

00:21:54.120 David and Vivek, this is great.

00:21:55.180 You guys are awesome.

00:21:56.120 Standby.

00:21:56.980 Quick break.

00:21:57.580 Back to the guys.

00:21:58.180 Don't look now, but there's something funny going on over there at the bank, George.

00:22:04.780 I've never really seen one, but that's got all the earmarks of being a run.

00:22:12.060 I have some news for you, folks.

00:22:14.040 I was just talking to old man Potter, and he's guaranteed cash payments to the bank.

00:22:17.280 The bank's going to reopen next week.

00:22:18.900 But, George, I got my money here.

00:22:20.880 Did he guarantee this place?

00:22:22.620 Well, no, Charlie.

00:22:23.520 I didn't even ask him.

00:22:24.480 We don't need Potter over here.

00:22:25.700 I'll take mine now.

00:22:26.740 No, but you're thinking of this place all wrong, as if I had the money back in a safe.

00:22:34.320 The money's not here.

00:22:36.180 Well, your money's in Joe's house.

00:22:37.440 That's right next to yours.

00:22:38.740 And in the Kennedy house and Mrs. Maitland's house and a hundred others.

00:22:42.440 How much do you need?

00:22:44.360 Hey! 0.99

00:22:45.800 I got $2,000.

00:22:48.400 Here's $2,000.

00:22:49.480 This will tide us over to the bank reopens.

00:22:51.040 All right, Tom, how much do you need?

00:22:52.420 Paging George Bailey.

00:22:54.160 We need you.

00:22:55.240 We need you now.

00:22:56.740 I love Jimmy Stewart.

00:22:58.800 Right?

00:22:59.260 Doesn't that take you back?

00:23:00.760 Here again with David Sachs and Vivek Ramaswamy discussing the failure of Silicon Valley Bank

00:23:05.620 and what, if anything, you and I need to do about it.

00:23:08.120 The Fed say they've got it handled, that the banks are going to basically pay for it with

00:23:11.320 some insurance fund, which is going to double as George Bailey's $2,000.

00:23:15.580 It's basically saying, you know, when people did a run, they actually did a run on the bank

00:23:19.760 on Friday and the doors were shut and they weren't getting access to their money.

00:23:23.420 And I'm sure it was very scary because their money's not sitting in the bank.

00:23:27.760 That's what happens.

00:23:28.340 You give the bank your money and they use it to invest in certain things and try to make

00:23:31.200 more money and improve their portfolio.

00:23:33.580 And the balance sheet doesn't always work out the way you want it to if you actually want

00:23:37.980 to make all the deposits on the same day.

00:23:39.540 So that's the situation we're in.

00:23:41.480 And normally we see that little thing, FDIC insured up to $250,000 and most of us don't

00:23:45.720 have more than $250,000 in a bank, so we don't really care.

00:23:48.700 But if you're a business, you do.

00:23:50.800 And that this bank in particular, as I understand it, only 11% of the clients had less than $250,000.

00:23:58.260 So like the vast majority of people who deposited in this bank had something like $4 million in

00:24:03.260 there that you mentioned, Roku, which had like half a billion.

00:24:06.660 And they weren't really paying attention to the sticker, David.

00:24:09.320 They weren't paying attention to the FDIC sticker that if this bank fails is what it's

00:24:14.500 basically telling you, you can kiss your money goodbye.

00:24:17.800 So why isn't it a buyer beware?

00:24:19.640 You mentioned the money market account, but what about Vivek's point on like Roku?

00:24:23.200 It knew if this bank went under that $500 million, maybe spread it around, maybe use some of the

00:24:29.140 bigger banks, maybe just hedge your bets a bit.

00:24:32.080 You know, I don't know Roku's situation.

00:24:34.280 I'd be surprised if they just had it sitting there in a checking account.

00:24:37.460 I'm sure they're using basically money market accounts, but I don't really know.

00:24:41.220 And it doesn't really matter.

00:24:41.980 I don't think our decisions here should be based on one company.

00:24:45.440 There are 40,000 small businesses who use SVB and 10,000 of them are in danger or were in

00:24:51.620 danger of missing payroll on Monday and having to lay off and furlough employees because they

00:24:56.180 couldn't get to their cash.

00:24:57.600 That is who I'm concerned about.

00:24:58.920 And I don't know why we would treat tech small businesses different than other small businesses.

00:25:03.760 That's where I agree with Vivek.

00:25:05.280 I mean, he's kind of using tech startup like it's a dirty word.

00:25:08.440 I don't understand that.

00:25:09.580 And if Signature Bank had gone out of business the day before SVB instead of the day after,

00:25:15.240 I don't think we'd be having this debate.

00:25:16.780 I think everybody would understand that we must protect our depositors.

00:25:21.140 Our depositors, our small business depositors are not in a position to evaluate the balance

00:25:26.380 sheets of banks.

00:25:27.480 And if you subject them to the risk of losing their deposits, we're going to have runs on

00:25:32.340 the bank, just like in that Jimmy Stewart movie.

00:25:34.300 We're going to be right back to the Great Depression.

00:25:36.280 And in fact, if you go back to American history 100 years ago, we had runs on the bank all the

00:25:41.020 time.

00:25:41.320 It led to the Great Depression.

00:25:42.820 Now, how do we stop the runs on the bank?

00:25:44.380 We introduced FDIC in 1933.

00:25:46.520 But FDIC is only $250.

00:25:48.940 Like you said, it's a woefully low amount.

00:25:51.300 I think where Vivek and I can agree is it needs to be a much bigger amount for business accounts.

00:25:55.740 So we need to revise and update that.

00:25:58.520 But look, our problem now is so much bigger than SVB.

00:26:02.220 I mean, you know, trading of Charles Schwab, $100 billion company, was halted today.

00:26:07.960 The stock market is now halted to the trading of half a dozen regional banks.

00:26:12.420 You know, we are in a much bigger situation.

00:26:14.800 And this, I think, discussion needs to move past just what we do for SVB and its depositors.

00:26:20.740 Because one of the main reasons why I want to basically protect depositors is to make sure

00:26:25.320 we don't have runs on other banks.

00:26:27.740 So one possibility I really want to recognize, Megan, or I don't want to step on you, Megan,

00:26:33.720 but one possibility I just want to recognize immediately in the back of what David just

00:26:36.780 said is consider the possibility.

00:26:39.140 I don't think it's a wild possibility.

00:26:40.460 I think it's part of what happened.

00:26:42.160 That Silicon Valley Bank and a lot of its egregious risk management practices, et cetera,

00:26:46.880 were in part created by a culture in which we bail out banks.

00:26:50.880 Now, this time we didn't bail out the banks.

00:26:52.360 We bailed out the depositors who are a bunch of tech startups that put money, in my opinion,

00:26:57.200 too much money without diversifying in Silicon Valley Bank.

00:27:00.280 What do we do is we create the incentives for that same thing to happen again.

00:27:04.100 And so in a certain way, it is important to figure out how do we actually solve for what

00:27:07.740 comes after Silicon Valley Bank.

00:27:09.340 But the precedents we set here affect what happened in the future.

00:27:13.460 In fact, that's exactly what we saw on display here.

00:27:15.500 And that's also why I separate this idea of how we should have handled Silicon Valley Bank.

00:27:20.200 I believe that its depositors should have been held to account for the risks that they took.

00:27:25.780 And their investors, these are many venture-backed startups, could have put in more money to cover

00:27:29.860 the hole if needed.

00:27:30.960 That's painful for them.

00:27:32.000 They make less money.

00:27:32.880 But this isn't about the workers.

00:27:34.500 Handle Silicon Valley Bank that way.

00:27:36.540 And then prospectively, in advance, not retroactively changing the rules after the fact,

00:27:41.040 but prospectively in advance, change the rules of the road for everyone else to prevent

00:27:45.380 a run on the bank, which no one wants in this country.

00:27:47.820 Vivek, what about David's point of distinguishing the depositors?

00:27:52.320 Like the investors, that's one thing.

00:27:54.060 I think most of us can say they're screwed.

00:27:55.800 They failed to assess the proper risk.

00:27:58.200 No one's going to cry a tear when it went down for them.

00:28:00.420 But and certainly nobody has any sympathy for the management team.

00:28:03.220 Most of us don't at SVB.

00:28:05.660 However, the depositors.

00:28:07.340 Can you speak to his point of like most of us would put the money in there?

00:28:09.880 These small business owners, they're not looking at the balance sheet of Silicon Valley

00:28:12.720 Bank.

00:28:13.100 And it's like just kind of the bank that you were supposed to go to in tech.

00:28:16.440 A lot of these VC firms, as I understand it, insisted that you bank with SVB.

00:28:21.240 So they did.

00:28:22.320 Like, what about those people who are not really trying to assume risk?

00:28:25.900 They're just trying to park their money someplace.

00:28:28.120 Look, I think it is fundamentally unjust for multibillion dollar companies that parked

00:28:32.500 eight and nine figure sums at Silicon Valley Bank, whose CFOs, some of which did not even

00:28:38.060 know what the deposit insurance maximum was.

00:28:40.200 That's part of a culture of excess in Silicon Valley created by, among other things, 10,

00:28:45.740 15 years of easy money, money reigning from on high like mana from heaven from the Federal

00:28:49.540 Reserve.

00:28:50.080 Now that we're actually seeing the disciplining process, this is part of that disciplining,

00:28:53.960 Megan.

00:28:54.300 And I know this characterization of small business.

00:28:56.340 I know that's the focus group lexicon we're using now.

00:28:59.020 But these are people who put together business plans to create trillion dollar companies, become

00:29:03.260 billionaires themselves, had upside skew, had special deals with Silicon Valley Bank to avoid

00:29:08.660 dilution in their companies.

00:29:09.720 But those special deals required them to put that money into Silicon Valley Bank implicitly

00:29:14.260 or explicitly.

00:29:15.260 These are conscious decisions that allowed people to enjoy potentially outsized upside

00:29:20.300 for themselves, including companies in David's portfolio, I'm sure.

00:29:24.100 But at the end of the day, when the risk went south, we're recharacterizing them as sort

00:29:28.320 of sympathetic, innocent people who didn't actually didn't do their due diligence.

00:29:31.660 I'm not saying they should be punished.

00:29:33.020 I'm not saying that they're doing criminal prosecution.

00:29:34.680 All I'm saying is play by the same rules of the road that you played when entering.

00:29:39.180 And if you don't, the next time Roku or the equivalent of them or other multi-billion

00:29:43.500 dollar companies that parked hundreds of millions of dollars in, that's a cardinal sin.

00:29:47.200 That's a risk management failure.

00:29:48.700 And what are we saying now?

00:29:49.960 The public is still going to come in and save you for making those bad decisions.

00:29:53.660 What should you expect in the future?

00:29:55.220 More of the same yet again.

00:29:56.980 That's what we're emphasizing.

00:29:57.860 But if this had been a different part of the economy, this is why I think the Silicon

00:30:00.600 Valley Bank story is important.

00:30:02.320 I think if it had gone in a different order, if it had been a smaller regional bank, I think

00:30:06.020 we would be having a very different conversation publicly in this country because there wouldn't

00:30:08.980 be influential people like David, like Mark Cuban, et cetera, having driven a dialogue

00:30:14.220 to make this a concern about a national bank run when, in fact, it was in part all of those

00:30:18.840 people have vested interests.

00:30:20.520 And it's not a slight.

00:30:22.020 It's just a fact.

00:30:22.640 Well, wait, wait, wait.

00:30:23.420 But before I give it back to David, before I give it back to David, how do you, you say

00:30:27.760 it's like this risk that they're overplaying of a bank run, but speak to David's point about

00:30:31.160 what's happening with Charles Schwab today and these six other regional banks and the

00:30:35.340 failure of this New York bank that we mentioned.

00:30:36.980 Like there has been some evidence on his side that this could get a lot worse a lot faster.

00:30:41.360 Yeah.

00:30:41.500 So I'm actually not denying that.

00:30:42.440 You see my Wall Street Journal op-ed.

00:30:43.580 What I do is I draw the distinction between how you treat Silicon Valley Bank and then prospectively

00:30:48.080 how you actually prevent that bank run.

00:30:49.760 I think the Federal Reserve needs to play its role as the lender of last resort.

00:30:53.660 This is one of the main reasons why the Federal Reserve exists.

00:30:56.660 I think prospectively in the short run, even temporarily, overshoot on what you need the

00:31:01.500 FDIC insured maximum to be in the short run.

00:31:04.720 You play it strong.

00:31:05.840 That's how you actually prevent a bank run in the future.

00:31:08.380 So I've advocated these policies.

00:31:10.100 I think those banks also need to raise deposit rates to incentivize people to keep the money

00:31:14.000 actually, as opposed to pursuing a bank run.

00:31:15.880 So my piece in the journal today lays out a lot of that.

00:31:17.780 So I'm not denying the importance none of us here wants a bank run in America.

00:31:22.000 But the weird thing that happened over the weekend is the people who were tethered to

00:31:25.580 Silicon Valley Bank's fate and the depositors and the startups that had actually parked money

00:31:29.620 there had a weird incentive to actually create a great fear about a bank run in America because

00:31:34.880 that justified exactly what happened on Sunday evening when those tech startups effectively

00:31:39.520 got bailed out by the government.

00:31:41.560 Which, by the way, and I want David to respond to this, for years, and I assume David and I

00:31:45.680 are on the same side of this.

00:31:46.400 We generally favor deregulation.

00:31:47.780 But for years, Silicon Valley Bank has lobbied and has explicitly made the case that it would

00:31:53.780 not be systemically important, that the government would not need to touch it.

00:31:57.360 And yet, when their hour of need in Silicon Valley's broad hour of need, what happens?

00:32:01.700 The government comes in and the very people who made that argument three years ago are

00:32:05.660 now talking out of the other side of their mouth.

00:32:07.540 It's not right.

00:32:08.240 OK, let him respond.

00:32:09.040 I never made that argument.

00:32:10.220 I don't even know what you're talking about.

00:32:11.480 If Gary Becker made that argument, fine, he's disgraced and he's going to lose all his stock

00:32:15.960 options and his company's bankrupt.

00:32:17.700 What we're talking about is the depositors here.

00:32:19.760 Now, let me go back to this point of moral hazard.

00:32:21.820 I think we need to dispense with this.

00:32:23.460 The way you solve moral hazard is by wiping out the stockholders, the bondholders, and

00:32:29.440 the employee stock options.

00:32:30.860 And Gary Becker is going to be in litigation for years.

00:32:33.040 We didn't do that in 2008.

00:32:34.860 Greg Becker.

00:32:35.180 That was a huge problem with what we did in 2008 is we didn't wipe out those stockholders.

00:32:39.880 That was wrong.

00:32:40.900 But here we are, and this is different, and it is not a bailout of those stockholders.

00:32:45.540 What we are doing here is protecting deposits.

00:32:48.340 And if there is a shortfall, it is not going to be paid for by the taxpayer.

00:32:52.040 It is being paid for out of insurance premiums paid by other banks.

00:32:55.600 I think that is right, good, and appropriate.

00:32:57.860 And if you send the message across this country right now in the middle of a banking crisis that

00:33:02.780 deposits are not safe, watch out.

00:33:04.600 We are going to have those Jimmy Stewart runs on the bank.

00:33:07.160 This is where I find Vivek's position completely irresponsible.

00:33:10.340 And I have to say, the reason why we got into such a scrap on Twitter is he was maintaining

00:33:14.360 this nonsense that somehow VCs like me on Twitter who were simply noticing the problem

00:33:18.720 were somehow responsible for the problem.

00:33:21.080 This is a left-wing tactic where when you notice what the government has done wrong and

00:33:26.660 you point it out that somehow you're blamed for it.

00:33:29.120 Listen, it was basically the Fed and the Biden administration who created this unprecedented

00:33:33.680 inflation.

00:33:34.640 They basically overheated the economy and then they slammed on the brakes and created all

00:33:38.580 these toxic assets and all of these banks, not just SVB, but across the country.

00:33:43.680 I noticed that.

00:33:44.260 I pointed it out.

00:33:45.020 I didn't even tweet, actually, until SVB was already in receivership and the run on signature

00:33:50.900 bank had already started.

00:33:52.420 So this idea that VCs could have anything to do with it, I think is ridiculous.

00:33:55.300 What we were doing is noticing that, hey, we have a huge problem here.

00:33:59.840 We need to jump on this.

00:34:01.220 And I basically tweeted out, where is Yellen?

00:34:04.100 Where is Powell?

00:34:05.360 Where is Biden?

00:34:06.360 They didn't say anything on Friday.

00:34:07.840 They didn't say anything on Saturday.

00:34:09.560 Then finally, on Sunday morning, Yellen goes on the Sunday shows.

00:34:14.980 And she basically gives this wishy-washy statement that didn't inspire anyone's confidence.

00:34:18.760 And you could feel the lack of confidence and the panic growing by the hour because I

00:34:24.300 talked to many, many business leaders.

00:34:26.280 And they were extremely worried that at the Monday morning open of this stock market, we

00:34:30.580 were going to see a panic like you've never seen before.

00:34:33.400 And then finally, they did the right thing on Sunday night by basically protecting deposits

00:34:38.220 and they did the right thing.

00:34:39.800 And I think this is the wrong time for the sort of what I would call populist demagogues

00:34:44.900 to basically be coming out saying that we shouldn't protect deposits, okay?

00:34:48.260 I know it's an easy way to score political points, but we must save the banking system.

00:34:52.860 We must save the banking system.

00:34:53.700 To the contrary, I can tell you the number of people that told me that they would, in

00:34:57.160 Silicon Valley, would be donors that are not donors, that are mega donors, which is

00:35:00.540 why a lot of Republicans actually aren't coming out and taking the stance that I am because

00:35:03.740 their incentives with their donor class actually keep them in their place.

00:35:06.540 But I'm just speaking my mind, David.

00:35:07.800 And I'm not blaming the venture capitalists, but I do think it's important that people

00:35:10.560 understand the incentives of the people they hear from.

00:35:13.780 And the financial incentives, it would be malpractice not to point out that from you to

00:35:17.900 Mark Cuban to anybody else, had personal financial incentives to make sure Silicon Valley depositors

00:35:21.860 are saved so they can at least understand when they're evaluating an argument about a

00:35:26.320 national bank run, what prism they see that through, which I think is fair game.

00:35:29.620 I think you would agree with that.

00:35:30.680 But here's a deeper point here.

00:35:32.740 This is not about this distinction between depositors and equity holders.

00:35:36.420 Well, let's double click on those depositors.

00:35:38.580 Actually, it is a discussion about equity holders.

00:35:40.420 It's just a different class of equity holders, equity holders in tech startups,

00:35:45.200 venture capitalists and founders who are in this to make billions.

00:35:48.300 And I'm not a look, I've made a lot of money in my life.

00:35:50.500 You probably have to.

00:35:51.540 I don't think that's a bad thing or anything to be ashamed of.

00:35:53.400 But let's call this what it is.

00:35:54.980 This is about people who could be putting up more capital as investors.

00:35:58.740 Take dilution to make up for this.

00:36:00.200 It's not about have trouble meeting payroll.

00:36:02.580 Great.

00:36:02.900 Inject some capital back into that startup.

00:36:04.780 That's painful if you're a venture investor.

00:36:06.240 It hurts returns.

00:36:07.200 That's painful if you're a startup founder.

00:36:08.500 You won't make as much money.

00:36:10.080 But I think that that is exactly who this is a bailout for,

00:36:12.960 is equity holders of tech startups.

00:36:15.660 And you know what?

00:36:16.080 If you want one set of rules, here's what I would have done.

00:36:18.640 Let's be constructive about this because we can separate the bank run

00:36:21.320 from the Silicon Valley bank issue is don't reward bad behavior on the one hand.

00:36:25.480 If you're Roku, if you're a $6 billion unicorn that put $200 million in,

00:36:29.420 and these are all real examples,

00:36:31.120 I would say that that deserves to be disciplined through the market

00:36:34.160 and say that you don't get bailed out by the public.

00:36:36.480 On the other hand, going forward, we do need to send a strong signal to the markets.

00:36:40.760 There, I agree with you wholeheartedly by stepping up the FDIC maximums for everyone else,

00:36:45.820 Federal Reserve stepping in and taking the steps that shore up public confidence.

00:36:49.920 But I think that here, what we've actually done by using Silicon Valley Bank as the instrument

00:36:54.160 to solve for that broader national bank goal is actually in part created the incentives

00:36:58.780 for the very kind of bad behavior, whether it's the CFO of Roku or the CFO of another unicorn

00:37:03.220 that wrongly concentrated their risk in Silicon Valley bank deposits.

00:37:06.780 The signal we have sent, I'm sorry to say, is it's okay.

00:37:09.300 You can keep doing that.

00:37:10.460 And we're going to incentivize that at the public fisc.

00:37:13.500 Go ahead.

00:37:14.040 Yeah.

00:37:14.360 So I guess what I'd say is, Vivek, if we weren't in the initial stages here of a banking crisis

00:37:19.800 that really needs to be nipped in the bud,

00:37:21.280 I bet you and I could get in a room and hammer out a better FDIC and a better policy

00:37:25.780 that would work and make sense for everybody.

00:37:27.480 And we would treat everybody the same.

00:37:29.480 Okay.

00:37:29.740 I'm sure we could figure out that policy.

00:37:31.280 But what you're proposing right now, quite frankly, is just too complicated

00:37:34.800 for the situation that we're in.

00:37:36.840 The situation we're in is you either protect deposits or you don't.

00:37:40.760 What's it going to be?

00:37:41.920 The country needs to know.

00:37:43.840 Depositors need to know.

00:37:44.740 Are they safe?

00:37:46.020 If you tell them that they're not...

00:37:47.160 Hold on a second.

00:37:47.520 Let me finish, please.

00:37:48.640 Yep.

00:37:48.820 If you tell them they're not safe, we are going to have lines around the block.

00:37:51.940 I'm telling you, I've already seen...

00:37:53.380 There are lines around the block, around SVB, okay, in Silicon Valley at their branches right now.

00:37:59.200 And I've seen photos.

00:38:00.220 My friends have sent me photos of who's winning in that line.

00:38:02.620 And they don't look like tech bros to me.

00:38:04.280 Okay, there you go.

00:38:05.380 It is not tech bros.

00:38:06.420 These are regular folks and they're terrified.

00:38:09.260 So we have to protect their deposits.

00:38:11.160 And let me tell you who the big winner is going to be

00:38:13.440 if we don't do the simple policy I'm talking about.

00:38:16.320 It's the big banks.

00:38:17.420 Because the Fed has now created two categories of banks.

00:38:20.680 There are the big four banks, which they have deemed to be

00:38:23.580 what they call systemically important banks or SIBs.

00:38:27.180 Those are the ones who were bailed out in 2008.

00:38:29.620 And the Fed has actually made it official that they are too big to fail.

00:38:32.660 So if you put your deposits, your uninsured deposits above 250,

00:38:36.200 in those SIBs, you can't lose your money.

00:38:38.680 But if you put money above 250 in a regional bank, you can lose your money.

00:38:43.740 It's at risk if that bank fails.

00:38:46.080 Basically, you're just making an unsecured loan to that bank.

00:38:49.120 That's not what anyone wants to do.

00:38:50.420 They just want to open a checking account.

00:38:52.140 So what we're on the path to doing here is creating a two-tier system

00:38:55.300 where only the biggest, biggest banks are safe.

00:38:58.740 The regional banks are not safe.

00:39:00.860 I want to make the regional banks safe.

00:39:02.520 I want to do it right now.

00:39:04.000 I want to let the country know that regional banks are safe.

00:39:06.440 I want to stop any potential for bank runs.

00:39:08.580 If we don't do this and the regional banks go under,

00:39:11.380 we're going to be left with four big banks who are run by politically connected figures

00:39:16.560 who basically are the guys who are cozy with Washington and Davos.

00:39:20.540 And I know you don't want that.

00:39:22.380 So I guess my question to you is, have you thought through the consequence of this policy?

00:39:26.500 Yes.

00:39:26.760 So I'd say a couple of things.

00:39:27.980 First of all, I'm an opponent of the 2008 bailouts,

00:39:30.420 and I'm very consistent, bringing my position all the way today.

00:39:33.280 I reject that framework, and look, I'm running for U.S. president

00:39:35.960 because I want to change that system.

00:39:37.800 I think it deserves to really be just raised, gutted,

00:39:41.340 and built from scratch from the bottom up.

00:39:43.220 You're right, that's longer term.

00:39:44.560 So in the short run, what would I like to have seen done here?

00:39:48.100 Distinguish the one case of the first instance.

00:39:50.680 Silicon Valley Bank not change the rules in retrospect

00:39:53.440 because that sends a signal for the next 10 years

00:39:55.940 that that's exactly what the government's going to do.

00:39:57.840 Because under your proposal, David,

00:39:59.080 we're taking the problem we created in 2008 for the big four

00:40:01.960 and say, let's just effectively nationalize the whole thing

00:40:04.880 and publicly backstop the whole thing, or else it's unfair.

00:40:07.700 I go the other direction and say,

00:40:08.880 get the government out of the business of bailouts altogether

00:40:10.780 and let competition win.

00:40:12.800 But even in the short run, I grant your point

00:40:14.560 that that's not a short run solution

00:40:15.900 to the issue of what's happening this week.

00:40:17.780 I would say take prospectively in advance,

00:40:20.680 not after the fact rule changing,

00:40:22.540 but prospectively in advance today.

00:40:24.620 I mean, let's say I'm U.S. president right now.

00:40:26.160 Today, what would you have done?

00:40:27.260 Today, actually, have the Federal Reserve step in aggressively

00:40:31.140 as lender of last resort and raise the FDIC maximum

00:40:34.820 to a level that would avert a bank run

00:40:36.680 in the rest of the country,

00:40:38.200 but not conflate what we do

00:40:40.560 with the tech startup bank in Silicon Valley,

00:40:43.240 where a bunch of CEOs,

00:40:44.780 and this is a unique case,

00:40:46.380 there was also some unique features of this bank

00:40:48.320 where, again, a disproportionately high number

00:40:50.640 of their deposits were uninsured.

00:40:52.200 It was actually the bank that had the highest concentration

00:40:54.780 in these mortgage-backed securities,

00:40:56.980 and its customer base was also concentrated

00:40:58.960 for a bunch of tech startups that were tethered

00:41:00.960 to high interest rates as well,

00:41:02.640 to not reward that bad management,

00:41:04.460 including the bad management of CFOs

00:41:06.300 of multi-billion dollar companies

00:41:07.440 that parked a lot of money there,

00:41:08.820 not to incentivize that behavior in the future.

00:41:10.560 So I would have handled that in a bifurcated way,

00:41:13.040 say that Silicon Valley Bank,

00:41:14.300 these are the rules,

00:41:15.040 everyone played by them.

00:41:16.480 Depositors, these are the rules,

00:41:17.560 everyone played by them.

00:41:18.580 Ask your venture investors for more money,

00:41:20.380 even if that means you as the founders

00:41:21.700 and CEOs make less.

00:41:23.380 And then to everybody else,

00:41:24.720 we're sorry that this problem's been created,

00:41:26.300 but we're going to solve it

00:41:27.320 by actually raising up those FDIC thresholds.

00:41:29.560 What about that point, David,

00:41:30.600 about Silicon Valley's poor management decisions?

00:41:33.960 Like that appeals to me as an order of fairness.

00:41:37.560 You know, this management company was overextended

00:41:39.620 when it came to these mortgage-backed securities

00:41:41.860 and these treasury bonds,

00:41:43.160 and they knew it.

00:41:43.880 And others made different choices.

00:41:45.360 I mean, everyone knew that the interest rates

00:41:46.560 couldn't stay next to zero forever,

00:41:48.420 and others hedged their bets.

00:41:50.500 And that's why they're not in this position today.

00:41:52.500 So it is kind of galling

00:41:53.800 to see this management team

00:41:56.040 that made all of these decisions,

00:41:57.940 that yes, they've been removed,

00:41:59.140 but now there's no consequence.

00:42:01.420 You know, they're not going to suffer

00:42:02.180 the laws of natural consequences

00:42:03.360 because of their decisions.

00:42:05.600 Oh, well, I mean, you and I agree on that,

00:42:07.480 and I think we all agree on that.

00:42:08.640 No bailout for SVB and its management team.

00:42:11.540 They're wiped out.

00:42:12.260 Again, their bondholders are wiped out.

00:42:13.680 Their stockholders are wiped out.

00:42:15.080 I think they're going to find themselves

00:42:16.020 in litigation for years.

00:42:17.220 It's going to be reputation-destroying,

00:42:19.660 career-destroying for those people.

00:42:20.860 They may have liability

00:42:21.820 for the stock options they sold.

00:42:24.240 Who knows?

00:42:24.740 Are they going to give back their money?

00:42:27.660 Because I wasn't able to get all the dough,

00:42:30.040 but my team just looked back to 2018.

00:42:32.340 Greg Becker, the president, CEO.

00:42:36.800 In 2008 alone, he made, I think, $7.6 million.

00:42:40.780 If you look through his compensation form,

00:42:44.040 it goes down the list,

00:42:45.100 like millions and millions of dollars.

00:42:46.600 Vivek mentioned the $3.6 million stock

00:42:49.740 transfer that he made off with

00:42:52.240 just two weeks ago.

00:42:53.060 They do say that that was pre-planned

00:42:54.320 and automated.

00:42:56.000 So I don't know that we can attribute that

00:42:57.620 to any sort of malice on his part.

00:42:58.900 But Megan, we all agree.

00:42:59.960 You, me, and David all agree

00:43:01.200 on the Silicon Valley Bank management

00:43:03.060 and their shareholders,

00:43:04.120 how they're to be treated,

00:43:04.900 which all of us agree-

00:43:05.740 But I'm asking if they're going to get

00:43:06.380 to keep that money

00:43:07.080 as they get bailed out.

00:43:08.380 I hope not.

00:43:08.800 Does Mr. Becker get to sit there

00:43:10.780 with a wash in millions

00:43:12.320 out on some yacht?

00:43:13.760 I hope not.

00:43:14.580 I think all three of us hope not.

00:43:15.820 And that is, I think,

00:43:16.740 reasonable basis for being clawed back.

00:43:18.520 But I think the harder point,

00:43:20.220 I'm just going to the areas of disagreement

00:43:21.360 because there's probably more we agree on

00:43:22.660 than we don't.

00:43:23.300 But just to illuminate the discussion here,

00:43:25.640 I think that their bailout

00:43:26.860 is for also a bunch of startup equity,

00:43:29.400 founders who had equity

00:43:30.140 and venture capitalists in their business

00:43:31.380 who benefited from venture debt,

00:43:34.020 for example,

00:43:34.580 that Silicon Valley Bank provided.

00:43:36.360 That was uniquely from Silicon Valley Bank

00:43:38.400 that allowed them to preserve

00:43:39.440 greater equity ownership

00:43:40.720 in their companies

00:43:41.400 such that if they did succeed

00:43:42.820 and become high-flying

00:43:44.100 multi-billion dollar businesses,

00:43:45.520 they would make more money.

00:43:46.760 But they banked with Silicon Valley Bank

00:43:49.020 as a consequence,

00:43:50.160 either implicitly or explicitly

00:43:51.460 from those deals.

00:43:52.660 It's important to see

00:43:53.860 those are the people

00:43:54.960 we're bailing out

00:43:55.820 by actually giving those customers

00:43:57.480 You're saying they enjoy the upside

00:43:58.120 and now they're being saved

00:43:59.700 from the downside

00:44:00.700 Exactly.

00:44:01.320 These are conscious decisions.

00:44:02.820 And it's fundamentally unfair.

00:44:04.460 So that's why I think

00:44:04.920 Silicon Valley Bank,

00:44:05.800 we could treat it one way

00:44:06.640 and prevent a bank run in another

00:44:08.320 without conflating the two.

00:44:10.280 I want you to respond to that.

00:44:11.500 Can I just give you this update?

00:44:12.600 Let me just give you this update.

00:44:13.460 Now 20 banks have been hit

00:44:15.260 by this crisis

00:44:15.900 via the Daily Mail.

00:44:17.060 Region of Bank,

00:44:17.820 Western Alliance,

00:44:18.400 you mentioned that.

00:44:19.680 Stock price plunged by three quarters.

00:44:21.980 Shares in First Republic

00:44:22.720 dived 67%.

00:44:24.520 PacWest by more than 35%.

00:44:26.020 The major banks also hit.

00:44:27.580 Wells Fargo down 7.5%.

00:44:29.380 Bank of America 7.4%.

00:44:30.660 Citigroup plunging 5.8%.

00:44:32.960 JP Morgan down just 2.7%.

00:44:34.900 Billionaire economist Bill Ackman,

00:44:36.420 who's been more on the David Sachs

00:44:37.520 side of this whole thing,

00:44:38.700 tweeting out,

00:44:39.280 our economy will not function effectively

00:44:40.680 without our community

00:44:41.740 and regional banking system.

00:44:43.340 That's a point you just made as well.

00:44:44.960 Therefore,

00:44:45.280 the FDIC needs to explicitly guarantee

00:44:48.220 all deposits now.

00:44:50.560 Ours matter.

00:44:52.200 David and then Vivek, go ahead.

00:44:53.840 Yeah, let me respond to that.

00:44:56.140 So listen,

00:44:57.600 that whole venture debt product,

00:44:58.840 I've always been against it,

00:45:00.080 just so you understand.

00:45:00.920 I talked about it on my podcast

00:45:02.380 a few months ago.

00:45:03.120 I thought it was stupid for startups.

00:45:04.420 I thought it was stupid for SVB.

00:45:05.880 But that's not what

00:45:06.700 these startups are being punished for.

00:45:09.140 They're being punished

00:45:09.560 for opening a checking account.

00:45:10.700 That's stupid.

00:45:11.440 We've got to protect those deposits.

00:45:13.180 And again,

00:45:13.680 it's not even about SVB anymore.

00:45:15.660 Megan,

00:45:15.960 it's about the 20 different banks now

00:45:17.940 that are basically in jeopardy.

00:45:19.640 And it's about the cascade

00:45:21.160 that comes next.

00:45:22.580 Remember,

00:45:23.360 on Thursday,

00:45:24.140 it was just SVB.

00:45:25.160 By Friday,

00:45:25.780 it was signature.

00:45:26.720 Over the weekend,

00:45:27.380 it was three to five more.

00:45:28.500 Now it's 20.

00:45:29.540 This problem will keep growing.

00:45:30.580 We have to nip this in the bud.

00:45:32.100 And you know who's smiling right now?

00:45:33.320 Wait, wait, David, but how?

00:45:33.480 Why aren't they calmed down

00:45:34.780 by what the FDIC and the feds did

00:45:36.360 late last night?

00:45:37.260 Because they don't know

00:45:39.840 if their deposits are protected.

00:45:41.440 It's too complicated.

00:45:42.640 That's why I'm trying to say

00:45:43.620 that Vivek's policy,

00:45:45.060 yeah, maybe we could get in a room,

00:45:46.800 fine tune that in a calm period.

00:45:48.880 You and I could write better legislation.

00:45:50.480 But in a moment like this,

00:45:51.880 what we have to do

00:45:52.580 is restore confidence

00:45:53.480 to the economy

00:45:54.540 and to the banking system.

00:45:55.860 That's the fundamental issue.

00:45:56.820 And if we don't,

00:45:57.840 you know who's going to love this?

00:45:59.240 Jamie Dimon.

00:46:00.260 He's licking his chops right now.

00:46:01.780 He is licking his chops right now

00:46:03.380 because you know

00:46:04.140 where all these deposits are going

00:46:05.600 from all these regional banks?

00:46:07.420 They're flooding

00:46:08.120 into the top four banks.

00:46:09.300 They're flooding

00:46:10.000 into JPMorgan Chase,

00:46:11.560 which is the number one institution,

00:46:12.860 which is too big to fail.

00:46:14.160 Thanks to the bailout in 2008

00:46:15.900 that we all have problems with,

00:46:18.620 he is too big to fail.

00:46:20.500 And so the logical response

00:46:22.520 for everybody

00:46:23.520 is just to go to a big four bank.

00:46:24.900 Why would you do anything different?

00:46:26.240 If the Fed is not being clear

00:46:28.500 that your deposits are safe,

00:46:30.040 if you have any doubt about that,

00:46:31.780 if there's a 1% chance

00:46:33.180 that you might lose your money,

00:46:35.100 why wouldn't you go

00:46:36.060 to a too big to fail bank?

00:46:37.600 This is the problem.

00:46:38.960 I understand the point.

00:46:40.000 Megan actually made a point 1.00

00:46:40.860 that we skipped over there,

00:46:42.000 which I think is really important, though.

00:46:43.320 How do you argue this?

00:46:44.160 Where we're all,

00:46:44.940 all three of us are on the same side.

00:46:46.080 We've already established that

00:46:46.900 of shoring up confidence

00:46:48.040 in all of the other banks

00:46:49.460 after Silicon Valley Bank.

00:46:50.620 But here,

00:46:51.320 if you're making that observation,

00:46:52.920 well, this was in a scenario

00:46:54.180 where we fully backstopped

00:46:55.500 all of Silicon Valley Bank's depositors.

00:46:57.380 And so my point is,

00:46:58.140 and we used a lot of ammo to do it,

00:47:00.440 a lot of firepower,

00:47:01.500 a lot of empty powder and dry powder.

00:47:03.540 Instead,

00:47:04.360 actually,

00:47:04.740 if we could use that

00:47:05.420 as a disciplining moment,

00:47:06.760 you can actually use

00:47:07.440 all of that dry powder prospectively

00:47:09.520 by actually making sure

00:47:10.760 the rules are evenly changed

00:47:12.000 for everyone else.

00:47:13.020 And so my question for you is,

00:47:14.740 you know,

00:47:14.900 as a man of science,

00:47:15.660 as a man who follows data,

00:47:17.080 et cetera,

00:47:17.460 it seems like no matter

00:47:18.460 what would have happened,

00:47:19.700 that decision still

00:47:20.620 would have been justified.

00:47:21.380 If we have a banking crisis

00:47:22.700 of confidence

00:47:23.280 in the rest of the banks,

00:47:24.360 it was still the right decision

00:47:25.460 to actually give the money

00:47:26.280 to Silicon Valley Bank depositors

00:47:28.120 who are uninsured.

00:47:29.320 And you know what?

00:47:30.140 If there wasn't a crisis,

00:47:31.800 it would have to be

00:47:32.140 because it was saved

00:47:33.020 because we gave money

00:47:34.480 to those uninsured depositors

00:47:35.560 at Silicon Valley Bank.

00:47:36.700 And anytime you retrospectively

00:47:38.160 look at a decision

00:47:38.780 and can justify it both ways,

00:47:40.220 that's not a scientific decision.

00:47:41.440 It's not a logical decision.

00:47:42.740 It's a decision

00:47:43.500 that's fundamentally about,

00:47:44.980 I think,

00:47:45.340 the self-interest

00:47:46.340 that's at issue

00:47:46.860 for people who are

00:47:47.380 at Silicon Valley Bank.

00:47:48.740 David,

00:47:48.980 I'll give you the last word.

00:47:50.280 Yeah,

00:47:50.640 I think that this idea

00:47:52.020 that depositors

00:47:53.080 can discipline a bank,

00:47:54.700 I just think

00:47:55.100 that's fundamentally misguided.

00:47:56.200 That's like asking patients

00:47:57.260 to discipline the doctor

00:47:58.660 who commits malpractice.

00:48:00.480 This is not,

00:48:01.220 this is a situation

00:48:02.060 where we need consumer protection.

00:48:04.160 Depositors,

00:48:04.660 whether they're individuals

00:48:05.500 or small businesses,

00:48:06.540 must be protected.

00:48:07.560 Their deposits

00:48:08.080 can't be at risk.

00:48:09.140 Otherwise,

00:48:09.480 they will all flee

00:48:10.140 to the big banks

00:48:11.060 and we will not have

00:48:11.760 a regional banking system.

00:48:13.080 I just think

00:48:13.420 it's fundamentally misguided.

00:48:14.720 This extreme libertarian view,

00:48:16.560 I guess,

00:48:16.940 I don't even know

00:48:17.240 if I call it libertarian,

00:48:18.440 that consumers

00:48:19.280 are in the position

00:48:20.440 to do something about this.

00:48:21.940 They're not.

00:48:22.680 This is fundamentally wrong.

00:48:23.980 You know who needs

00:48:24.460 to do something about this?

00:48:25.380 The regulators.

00:48:26.720 Consumers look to the Fed,

00:48:28.420 they look to Powell,

00:48:30.520 to Yellen,

00:48:31.080 and ultimately to Biden

00:48:32.000 to deliver confidence

00:48:33.360 in the system.

00:48:34.200 It's up to the regulators

00:48:35.360 to go to these banks

00:48:36.380 and make sure

00:48:36.820 their balance sheets are sound.

00:48:38.180 And if we need to impose

00:48:39.040 more regulations

00:48:39.800 and rules on them

00:48:41.080 while we increase FDIC

00:48:42.760 so they can't invest

00:48:44.280 in risky things,

00:48:45.120 we should absolutely do that.

00:48:46.580 Absolutely do that.

00:48:47.240 But it's up to the regulators

00:48:49.020 to do their jobs here.

00:48:50.240 Do not blame the victim,

00:48:52.460 which is depositors

00:48:53.540 who are losing their money.

00:48:55.040 So Megan,

00:48:55.320 I want to draw a distinction

00:48:56.340 because I think

00:48:56.700 this is very helpful.

00:48:57.500 We've gotten further

00:48:58.060 than much of the online ecosystem

00:48:59.360 has in this debate,

00:49:00.140 which is made

00:49:00.600 for a great discussion.

00:49:01.880 But here's the issue.

00:49:02.960 I think there's a distinction

00:49:03.780 between if you're below

00:49:05.020 the deposit insurance cap,

00:49:06.580 David, you're right.

00:49:07.360 The customer should not

00:49:08.700 be responsible actually

00:49:10.060 for doing that due diligence.

00:49:11.760 That's what that cap is about.

00:49:13.240 But if you're above that cap,

00:49:15.700 that and let's decide

00:49:16.720 what the right cap is.

00:49:17.460 But if you're above that cap,

00:49:18.400 you're a company.

00:49:19.040 The whole point is companies

00:49:19.920 have more money

00:49:20.760 than $250,000

00:49:21.520 with chief executives,

00:49:23.300 with CFOs

00:49:24.300 that are professional.

00:49:25.420 Well, in that case,

00:49:26.480 that is a case

00:49:27.320 in which you know what?

00:49:28.060 You do have a responsibility

00:49:29.160 as the CFO

00:49:30.420 of a multi-billion dollar company

00:49:31.780 to diversify your risk

00:49:33.240 and understand

00:49:33.980 what your risk

00:49:34.560 counterparty exposure is.

00:49:35.820 That's basics.

00:49:36.840 Silicon Valley

00:49:37.420 has been coddled

00:49:38.220 for the last decade and a half

00:49:39.360 thinking somehow

00:49:40.280 a CFO of a multi-billion dollar company

00:49:42.040 is exempt

00:49:42.480 from this responsibility.

00:49:44.040 I reject that.

00:49:44.800 And I think that the more

00:49:45.600 we actually create incentives

00:49:46.780 for people to engage

00:49:48.020 in that rash behavior,

00:49:49.220 the more they're going to continue

00:49:50.340 to engage in it.

00:49:51.460 And that's my problem

00:49:52.380 or why I think we need to separate

00:49:53.980 how we handled

00:49:54.680 Silicon Valley Bank

00:49:55.700 from how we need to handle

00:49:57.140 the crisis

00:49:57.620 that we're looking at

00:49:58.440 in plain sight.

00:49:59.420 Okay, but let me just ask you

00:50:00.300 this quickly before we go.

00:50:02.040 So you both agree

00:50:02.800 that we need

00:50:03.180 on a go-forward basis

00:50:04.280 to stop these alerts coming in

00:50:06.160 about the number of banks

00:50:06.960 that we've had to halt trading at

00:50:08.160 and then the possible run

00:50:09.040 at other banks

00:50:09.560 no matter what we do

00:50:10.260 with Silicon Valley Bank.

00:50:11.120 We need to raise

00:50:12.840 the FDIC cap

00:50:14.100 so that depositors

00:50:15.320 have confidence

00:50:16.000 that their money

00:50:16.560 is safe

00:50:17.640 and we'll come back to them

00:50:18.600 by how much?

00:50:19.640 Like what?

00:50:20.080 Do you guys have an idea,

00:50:21.280 Vivek?

00:50:22.300 So I actually am in the camp

00:50:23.720 of overshooting this

00:50:24.860 in the short run,

00:50:25.960 make it temporary

00:50:26.820 such that we actually

00:50:27.940 can deal with these problems

00:50:29.200 in the long run

00:50:29.820 in a more principled way.

00:50:31.440 So I would say

00:50:32.020 pick a level

00:50:32.800 at which psychologically

00:50:33.780 you would say

00:50:34.260 90 plus percent

00:50:35.640 of bank deposits,

00:50:36.480 95 plus percent

00:50:37.560 of bank deposits

00:50:38.320 are insured.

00:50:38.920 That's a level

00:50:40.080 that we can pick

00:50:40.720 in the short run

00:50:41.560 and the Federal Reserve

00:50:42.420 can flood in

00:50:43.040 as a lender

00:50:43.420 of last resort

00:50:44.180 and that allows banks

00:50:45.340 to increase deposit rates

00:50:46.640 which stop a bank run

00:50:48.040 and I think that

00:50:48.640 that actually

00:50:49.080 is the right way

00:50:49.580 to handle this

00:50:50.160 rather than sending

00:50:51.120 the signal of an emergency

00:50:52.500 which is exactly

00:50:53.240 what we had to invoke.

00:50:54.820 Think about

00:50:55.100 the bad communication

00:50:55.860 of Silicon Valley Bank's CEO.

00:50:57.580 Well, what did Janet Yellen do? 0.97

00:50:58.500 We're invoking

00:50:59.080 emergency procedures,

00:51:00.300 calling somebody

00:51:00.760 systemically important

00:51:01.680 who yesterday

00:51:02.540 was not deemed to be.

00:51:03.940 I think that could

00:51:04.500 actually have

00:51:04.840 a perverse effect

00:51:05.720 of contributing

00:51:06.460 to the bank run

00:51:07.220 that we're seeing today.

00:51:08.200 That's also a possibility

00:51:09.000 that we haven't

00:51:09.600 actively explored

00:51:10.320 but could be

00:51:10.960 a very real effect

00:51:12.000 of the emergency measures

00:51:13.540 that were taken.

00:51:14.900 Go ahead, David.

00:51:16.180 Yeah, I fundamentally think

00:51:17.480 that the Republican Party

00:51:18.440 right now

00:51:18.960 needs to train their fire

00:51:20.360 on the right targets.

00:51:22.040 The right target

00:51:22.980 right now

00:51:23.540 is this Biden administration.

00:51:25.180 They are the ones

00:51:25.980 who created this problem.

00:51:27.720 Biden printed

00:51:28.940 trillions and trillions.

00:51:30.360 There was trillions

00:51:30.960 of reckless spending

00:51:31.880 we didn't need

00:51:32.840 and then they told us

00:51:34.200 that inflation

00:51:34.580 was transitory.

00:51:35.460 So because of that

00:51:36.560 the Fed continued QE

00:51:37.740 for six more months.

00:51:38.940 They printed trillions.

00:51:40.420 They created

00:51:40.780 a hyperinflation

00:51:41.880 and then that led

00:51:43.040 to this rapid rise

00:51:44.120 the spike

00:51:44.800 in interest rates

00:51:45.780 and that is what

00:51:46.680 has created

00:51:46.980 all these toxic assets

00:51:48.280 the $620 billion

00:51:49.600 just that we know about

00:51:50.600 on the balance sheets

00:51:51.660 of these banks

00:51:52.240 and that is what

00:51:52.900 has led to this

00:51:53.440 banking crisis.

00:51:54.580 They are the ones

00:51:55.100 who are fundamentally

00:51:55.580 responsible.

00:51:56.680 Now I am glad

00:51:57.400 that last night

00:51:58.320 they started to act decisively

00:51:59.760 and we need to support that.

00:52:01.540 So I do not want

00:52:02.120 to make a partisan point.

00:52:03.400 I think that Yellen

00:52:04.300 finally and Powell

00:52:05.220 finally got the message

00:52:06.300 last night at 6pm

00:52:08.280 but they need to keep

00:52:09.520 doing more.

00:52:10.160 We got to solve

00:52:10.680 this problem

00:52:11.260 but we cannot train

00:52:12.400 our fire on depositors.

00:52:14.740 I am telling you

00:52:15.320 that is a path

00:52:16.160 to ruin

00:52:16.700 for the Republican Party.

00:52:18.560 If you want Biden

00:52:19.080 to get re-elected

00:52:19.860 in a couple of years

00:52:20.540 do that

00:52:21.360 even though

00:52:21.940 he created this crisis.

00:52:24.040 Biden created a crisis

00:52:24.720 I agree

00:52:25.200 but I think we have

00:52:26.040 to actually look

00:52:26.720 in the mirror

00:52:27.160 to have standing

00:52:28.080 to be able to

00:52:28.760 criticize Biden

00:52:29.520 and the Federal Reserve.

00:52:30.720 One of the top priorities

00:52:31.480 of the next president

00:52:32.100 has to be

00:52:32.840 reform of the Federal Reserve

00:52:34.380 itself.

00:52:35.180 That is actually

00:52:35.540 responsible for a

00:52:36.720 20 year God complex

00:52:38.720 with the fat fingers

00:52:39.620 God with the fat finger

00:52:40.640 that created

00:52:41.300 the conditions

00:52:42.200 for these disastrous

00:52:43.280 outcomes.

00:52:44.380 But in the very near term

00:52:45.520 we have to make

00:52:46.060 principled decisions

00:52:46.980 so that we don't

00:52:48.080 create bad incentives

00:52:49.200 in the future

00:52:50.000 for CFOs

00:52:51.560 of large multi-billion

00:52:52.560 dollar companies

00:52:53.120 to make the kinds

00:52:53.800 of decisions they did.

00:52:55.040 And I think that

00:52:55.500 we can separate that

00:52:56.620 while actually

00:52:57.400 taking an even

00:52:58.460 stronger course of action

00:52:59.660 is where I agree

00:53:00.140 with you David

00:53:00.560 really strong

00:53:01.500 firm course of action

00:53:02.320 to prevent

00:53:03.120 a near term

00:53:04.640 collapse or crisis

00:53:05.740 but I do not think

00:53:07.020 it's the right thing

00:53:07.660 to do to conflate

00:53:09.020 the way we treat

00:53:10.040 Silicon Valley bank

00:53:10.920 depositors

00:53:11.700 not some innocent

00:53:12.540 mom and pop

00:53:13.060 with less than

00:53:13.460 $250,000

00:53:14.060 but CFOs

00:53:15.600 of professionally

00:53:16.240 or what should be

00:53:16.840 professionally run

00:53:17.440 companies

00:53:17.900 that are actually

00:53:18.880 abdicating their

00:53:19.800 responsibility

00:53:20.340 we're actively

00:53:21.400 rewarding that

00:53:22.200 and I think

00:53:23.080 again I would

00:53:23.860 just encourage you

00:53:24.580 to consider

00:53:25.160 an unconsidered

00:53:26.460 possibility so far

00:53:27.540 which is that

00:53:28.120 when you actually

00:53:29.160 engage in that

00:53:29.960 kind of extraordinary

00:53:30.740 behavior

00:53:31.220 it's actually

00:53:32.280 the kind of thing

00:53:32.980 that fosters

00:53:33.560 more fear

00:53:34.420 in the end

00:53:35.040 where you say

00:53:35.720 emergency measures

00:53:37.240 Sunday evening

00:53:38.540 and yes we said

00:53:39.680 we were never

00:53:40.240 going to do this

00:53:40.940 and that these

00:53:41.460 institutions were

00:53:42.220 not systemically

00:53:43.080 important

00:53:43.500 but still we're

00:53:44.800 going to intervene

00:53:45.460 above the $250,000

00:53:46.860 threshold

00:53:47.380 and give Roku

00:53:48.380 $480 million

00:53:49.260 back

00:53:49.920 is it possible

00:53:51.220 I think it is

00:53:51.700 at least possible

00:53:52.580 that that contributes

00:53:53.640 to some of the

00:53:54.280 psychological panic

00:53:55.100 we're seeing

00:53:55.460 to say that wow

00:53:56.100 this really was

00:53:57.140 worse than we thought

00:53:58.160 as opposed to

00:53:59.040 explaining all the

00:53:59.960 ways in which

00:54:00.340 Silicon Valley Bank

00:54:01.260 was really

00:54:02.080 particularly poorly

00:54:03.260 run

00:54:03.560 there's a lot

00:54:04.880 in there that we

00:54:05.480 did not get to

00:54:06.180 this bank's

00:54:07.080 wokeness

00:54:07.660 and whether

00:54:08.080 any of that

00:54:09.120 had played a role

00:54:10.140 in its collapse

00:54:10.840 and I think

00:54:11.240 most financial

00:54:12.060 experts agree

00:54:12.680 while that may

00:54:13.460 have been a problem

00:54:14.080 the biggest problem

00:54:14.960 was the one

00:54:15.420 that we've been

00:54:15.980 kicking around

00:54:16.360 for the past hour

00:54:17.120 it's poor management

00:54:18.480 and it's the way

00:54:19.360 it's been investing

00:54:19.880 its money

00:54:20.300 and not hedging

00:54:20.820 its bets

00:54:21.240 President Biden

00:54:22.140 for the record

00:54:22.640 says that

00:54:23.200 quote

00:54:23.480 I am firmly

00:54:24.080 committed to

00:54:24.540 holding those

00:54:24.960 responsible

00:54:25.460 for this mess

00:54:26.520 fully accountable

00:54:27.800 presumably meaning

00:54:29.460 the actual

00:54:30.340 executives who

00:54:31.140 got the country

00:54:32.200 and this bank

00:54:32.820 into this mess

00:54:33.580 he should mean

00:54:34.020 himself

00:54:34.340 yeah

00:54:35.020 we'll find out

00:54:37.020 you guys

00:54:37.500 such a great

00:54:37.920 debate

00:54:38.240 most

00:54:38.620 not all

00:54:39.980 but most

00:54:40.540 people

00:54:40.960 wouldn't

00:54:42.060 have the stones

00:54:42.940 to take the

00:54:43.460 debate

00:54:43.720 to be on

00:54:44.220 Twitter

00:54:44.500 take on

00:54:45.400 such a smart

00:54:46.140 well-informed

00:54:47.200 opponent

00:54:47.620 as you both

00:54:48.260 are doing

00:54:48.600 right now

00:54:49.000 and so

00:54:49.440 honored to have

00:54:50.240 been a part

00:54:50.580 of it

00:54:50.740 thank you

00:54:51.020 for trusting

00:54:51.360 us

00:54:51.540 with a

00:54:51.760 discussion

00:54:52.080 thank you

00:54:53.240 guys

00:54:53.440 thank you

00:54:53.820 Dave

00:54:53.980 yeah

00:54:54.740 all the best

00:54:55.160 you both

00:54:55.460 fascinating

00:54:56.040 stuff

00:54:56.380 over the

00:55:00.360 weekend

00:55:00.740 incredible

00:55:01.780 disgusting

00:55:03.220 video

00:55:04.160 emerged

00:55:04.780 showing a

00:55:05.840 sitting

00:55:06.240 respected

00:55:06.940 US

00:55:07.620 federal

00:55:08.260 appellate

00:55:08.940 court

00:55:09.240 judge

00:55:09.720 being

00:55:10.500 shouted

00:55:11.180 down

00:55:11.680 sometimes

00:55:12.460 in vile

00:55:13.120 and vulgar

00:55:13.800 ways

00:55:14.260 by a group

00:55:15.180 of protesters

00:55:16.000 at Stanford

00:55:17.380 Law School

00:55:18.260 which ought

00:55:19.140 to be ashamed

00:55:19.800 of itself

00:55:20.340 today

00:55:20.720 judge

00:55:21.840 Kyle

00:55:22.300 Duncan

00:55:22.640 is a member

00:55:23.560 of the

00:55:23.880 Fifth Circuit

00:55:24.600 Court

00:55:24.860 of Appeals

00:55:25.340 remember

00:55:25.680 there's

00:55:25.960 the US

00:55:26.320 Supreme

00:55:26.560 Court

00:55:26.880 and then

00:55:27.900 beneath

00:55:28.180 the US

00:55:28.540 Supreme

00:55:28.800 Court

00:55:29.040 there are

00:55:29.360 the

00:55:29.540 Circuit

00:55:29.820 Courts

00:55:30.160 of Appeal

00:55:30.700 these are

00:55:31.480 the courts

00:55:31.780 from which

00:55:32.160 we typically

00:55:33.100 select

00:55:33.600 our Supreme

00:55:34.480 Court

00:55:34.700 justices

00:55:35.240 and judge

00:55:35.740 Kyle

00:55:35.980 Duncan

00:55:36.280 is on

00:55:36.760 one of

00:55:37.060 them

00:55:37.200 the Fifth

00:55:37.640 Circuit

00:55:37.960 he was

00:55:38.780 appointed

00:55:39.080 by former

00:55:39.800 President

00:55:40.120 Trump

00:55:40.400 to the

00:55:40.640 position

00:55:40.940 in 2018

00:55:41.520 and confirmed

00:55:42.280 by the

00:55:42.640 Senate

00:55:42.860 Judge

00:55:43.920 Duncan

00:55:44.140 was

00:55:44.420 invited

00:55:44.760 to speak

00:55:45.240 at Stanford

00:55:45.940 by the

00:55:46.800 college's

00:55:47.200 Federalist

00:55:47.900 Society

00:55:48.300 now that's

00:55:48.740 a more

00:55:48.960 conservative

00:55:49.440 leaning

00:55:49.960 group

00:55:50.380 that has

00:55:51.120 a more

00:55:51.340 conservative

00:55:51.820 judicial

00:55:52.320 philosophy

00:55:52.940 that group

00:55:54.000 would tend

00:55:54.380 to like

00:55:54.660 justices

00:55:55.100 like

00:55:55.420 Alito

00:55:56.600 and Thomas

00:55:57.540 and the

00:55:58.560 late Justice

00:55:59.220 Scalia

00:55:59.600 and so on

00:56:00.200 this is a

00:56:01.300 society

00:56:01.680 before which

00:56:02.640 I have

00:56:03.020 spoken as

00:56:03.520 well

00:56:03.760 at

00:56:04.120 universities

00:56:04.600 like

00:56:04.920 Yale

00:56:05.300 Law School

00:56:05.760 without

00:56:06.480 incident

00:56:06.860 so even

00:56:07.880 the

00:56:08.120 liberal

00:56:08.600 law

00:56:09.000 schools

00:56:09.300 are

00:56:09.800 generally

00:56:10.420 historically

00:56:11.780 respectful

00:56:12.680 of the

00:56:13.540 fact that

00:56:13.880 there is

00:56:14.540 a group

00:56:14.960 on most

00:56:15.500 campuses

00:56:15.920 that leans

00:56:16.900 more right

00:56:17.640 and doesn't

00:56:18.660 necessarily feel

00:56:19.360 the need

00:56:19.660 to interfere

00:56:20.280 with them

00:56:21.540 hearing from

00:56:22.400 those they

00:56:22.840 respect on

00:56:23.400 the bench

00:56:23.780 about their

00:56:24.460 judicial

00:56:24.820 philosophy

00:56:25.300 and so

00:56:25.700 on

00:56:25.900 but

00:56:26.700 something

00:56:26.940 very

00:56:27.180 different

00:56:27.580 happened

00:56:27.980 at this

00:56:28.720 particular

00:56:29.100 quote

00:56:29.600 protest

00:56:30.300 the judge

00:56:31.540 for one

00:56:31.900 thing

00:56:32.180 did not

00:56:33.000 back

00:56:33.260 down

00:56:33.640 and the

00:56:34.460 administration

00:56:35.000 was present

00:56:36.740 and part

00:56:37.700 of the

00:56:37.940 attack

00:56:38.300 on him

00:56:38.740 joining

00:56:39.880 me now

00:56:40.360 Tim Rosenberger

00:56:41.580 Tim's the

00:56:42.540 student who

00:56:42.960 invited this

00:56:44.020 judge to

00:56:44.520 the campus

00:56:45.060 and was there

00:56:45.960 to witness

00:56:46.460 everything

00:56:47.140 that happened

00:56:48.120 that day

00:56:48.620 Tim

00:56:49.020 welcome to

00:56:50.000 the program

00:56:50.640 what an

00:56:51.700 incredible

00:56:52.320 event

00:56:52.900 it was

00:56:53.460 stomach

00:56:54.100 turning

00:56:54.500 when I

00:56:55.240 saw what

00:56:55.620 they did

00:56:56.040 to your

00:56:56.860 event

00:56:57.300 let's just

00:56:58.200 start with

00:56:58.560 this right

00:56:59.060 because this

00:56:59.420 gets lost

00:57:00.280 in the

00:57:00.740 coverage

00:57:01.140 why did

00:57:02.160 you guys

00:57:02.540 want to

00:57:02.880 hear

00:57:03.140 from Judge

00:57:04.040 Duncan

00:57:04.340 absolutely

00:57:06.020 well thanks

00:57:06.760 for having

00:57:07.060 me on

00:57:07.400 Megan

00:57:07.640 I became

00:57:08.480 a daily

00:57:08.820 viewer of

00:57:09.280 yours in

00:57:09.580 2016

00:57:10.140 and been

00:57:10.440 a big

00:57:10.680 fan ever

00:57:11.060 since

00:57:11.420 and you're

00:57:11.860 the perfect

00:57:12.240 person to do

00:57:12.900 this exclusive

00:57:13.460 with because

00:57:13.920 of your

00:57:14.140 training as a

00:57:14.700 lawyer and

00:57:15.100 we're so

00:57:15.480 grateful to

00:57:15.900 be on

00:57:16.240 you know we

00:57:17.820 wanted to

00:57:18.100 hear from

00:57:18.300 Judge

00:57:18.480 Duncan as

00:57:18.880 you said

00:57:19.180 because he

00:57:19.700 sits one

00:57:20.220 level below

00:57:20.740 the Supreme

00:57:21.100 Court

00:57:21.400 this is one

00:57:22.140 of the most

00:57:22.460 respected

00:57:22.960 judges in

00:57:23.720 the country

00:57:24.100 somebody

00:57:24.460 eminent in

00:57:25.640 the legal

00:57:25.860 profession

00:57:26.300 you know we

00:57:27.480 didn't bring

00:57:27.840 him to speak

00:57:28.200 about anything

00:57:28.500 particularly

00:57:28.880 controversial

00:57:29.520 the judge

00:57:30.100 came to

00:57:30.480 talk about

00:57:31.080 cryptocurrency

00:57:31.660 and firearm

00:57:32.860 regulation

00:57:33.440 and as you

00:57:34.300 saw on the

00:57:34.620 tape we

00:57:34.940 didn't get

00:57:35.220 to hear

00:57:35.420 any of

00:57:35.720 that we

00:57:36.540 had sort

00:57:36.980 of like a

00:57:37.400 40 minute

00:57:37.960 debacle and

00:57:39.160 then the judge

00:57:39.580 had to be

00:57:39.920 escorted out

00:57:40.400 by Marshall

00:57:40.880 so we're

00:57:42.040 hoping he

00:57:42.660 can come

00:57:42.920 back we've

00:57:43.400 re-invited

00:57:43.820 him but we

00:57:44.560 were we

00:57:44.880 were here to

00:57:45.280 speak about

00:57:45.640 some really

00:57:46.040 pressing

00:57:46.520 timely issues

00:57:47.300 in cryptocurrency

00:57:47.880 and firearm

00:57:48.540 regulation and

00:57:49.380 that didn't

00:57:50.260 happen

00:57:50.520 and it's a

00:57:51.800 wonderful

00:57:52.080 opportunity to

00:57:53.480 hear to get

00:57:54.040 a yes from

00:57:54.860 a circuit

00:57:55.280 court of

00:57:56.000 appeal justice

00:57:56.720 judge I

00:57:57.440 mean that's

00:57:58.040 a great

00:57:58.440 opportunity

00:57:58.820 because this

00:57:59.800 is a guy

00:58:00.240 who will have

00:58:00.740 his finger

00:58:01.100 on the pulse

00:58:01.640 of where

00:58:01.960 the law

00:58:02.320 stands

00:58:02.760 what the

00:58:03.400 U.S.

00:58:03.680 Supreme Court

00:58:04.220 precedent is

00:58:05.560 on it how

00:58:06.080 it's likely

00:58:06.500 to go if

00:58:07.380 it's if it's

00:58:08.020 going to go

00:58:08.340 up to the

00:58:08.740 Supreme Court

00:58:09.220 all that

00:58:09.960 should be

00:58:10.300 interesting to

00:58:10.840 young lawyers

00:58:11.380 of any

00:58:12.400 persuasion

00:58:13.060 even if you

00:58:13.780 disagree with

00:58:14.260 the guy's

00:58:14.620 judicial

00:58:14.960 philosophy

00:58:15.480 just getting

00:58:16.200 his insights

00:58:16.760 on how

00:58:17.120 those things

00:58:17.480 are likely

00:58:17.840 to go

00:58:18.260 I would

00:58:19.000 love to

00:58:19.320 listen to

00:58:19.640 that from

00:58:20.120 Justice

00:58:20.820 Elena

00:58:21.140 Kagan

00:58:21.580 or this

00:58:23.000 this judge

00:58:23.560 anybody on

00:58:24.280 the federal

00:58:24.680 appellate

00:58:25.280 court or

00:58:25.800 or even

00:58:26.320 trial court

00:58:26.740 so what

00:58:27.280 a missed

00:58:27.680 opportunity

00:58:28.260 by the

00:58:28.940 people on

00:58:29.260 the other

00:58:29.500 side at

00:58:30.000 Stanford

00:58:30.360 who are

00:58:31.140 supposed to

00:58:31.520 be among

00:58:31.800 the best

00:58:32.120 and brightest

00:58:32.500 law students

00:58:33.140 in the

00:58:33.660 country

00:58:33.980 okay so

00:58:36.260 did you know

00:58:37.160 that they

00:58:37.460 were planning

00:58:37.920 a protest

00:58:38.400 before he

00:58:39.140 got there

00:58:39.540 we had

00:58:41.240 heard there

00:58:41.560 was going

00:58:41.820 to be a

00:58:42.080 protest

00:58:42.580 and in

00:58:43.280 anticipation

00:58:43.640 of that I

00:58:44.300 actually met

00:58:44.820 with the

00:58:45.080 administration

00:58:45.420 on Tuesday

00:58:46.160 we went

00:58:47.220 through some

00:58:47.600 ground rules

00:58:48.160 and they

00:58:48.740 affirmed

00:58:49.420 Stanford's

00:58:50.220 procedures as

00:58:51.920 they are

00:58:52.160 written which

00:58:52.980 say that

00:58:53.380 protest is

00:58:54.000 fine we

00:58:54.580 were good

00:58:54.840 with that

00:58:55.220 difficult

00:58:55.820 questions in

00:58:56.600 Q&A totally

00:58:57.420 fine sort

00:58:58.580 of being

00:58:58.860 present or

00:58:59.580 being silent

00:59:00.180 or doing a

00:59:00.660 walkout all

00:59:01.280 fine we have

00:59:02.720 a strong rule

00:59:03.500 against disruption

00:59:04.280 and that's

00:59:05.080 specifically supposed

00:59:05.680 to be enforced

00:59:06.240 as follows

00:59:06.960 if the students

00:59:07.880 disruptive they

00:59:08.600 get a warning

00:59:09.100 if they continue

00:59:09.940 to disrupt an

00:59:10.580 event they're

00:59:11.080 escorted out of

00:59:11.620 the event as

00:59:12.380 you can see in

00:59:12.820 that video we

00:59:13.760 had a very

00:59:14.600 disruptive group

00:59:15.380 of people there

00:59:16.040 was no warning

00:59:16.880 there was no

00:59:17.680 escorting out

00:59:18.900 and actually at

00:59:19.880 one point the

00:59:20.360 DEI dean who

00:59:21.120 you see in that

00:59:21.520 video says oh

00:59:22.180 well this isn't

00:59:22.800 this isn't a

00:59:23.320 disruption this

00:59:23.960 hasn't crossed

00:59:24.440 the line and

00:59:25.180 you've got to

00:59:25.540 wonder what

00:59:25.960 would cross the

00:59:26.620 line like

00:59:26.960 lighting the

00:59:27.420 podium on

00:59:27.840 fire right

00:59:29.560 right let's

00:59:30.520 give the audience

00:59:31.000 a flavor of

00:59:31.500 what we're

00:59:31.720 talking about

00:59:32.220 here's some

00:59:32.800 of the

00:59:33.440 heckling

00:59:33.840 while I'll

00:59:34.320 show that

00:59:34.720 DEI speech

00:59:35.500 in a minute

00:59:35.820 this woman

00:59:36.260 she joined

00:59:36.800 she was the

00:59:37.540 protester in

00:59:38.300 chief this

00:59:38.800 administrator who

00:59:39.560 was supposed

00:59:39.860 to be keeping

00:59:40.760 the peace and

00:59:41.560 just and

00:59:42.060 stopping

00:59:42.500 disruption

00:59:43.060 get to her in 0.98

00:59:44.100 one second

00:59:44.480 let's just

00:59:45.300 show some

00:59:45.800 of the

00:59:46.020 heckling that

00:59:47.000 judge Duncan

00:59:47.480 had to deal

00:59:48.040 with while he

00:59:48.640 was trying to

00:59:49.200 address your

00:59:49.660 group

00:59:49.900 in this school

00:59:51.540 the inmates

00:59:52.300 have gotten

00:59:53.020 control of the

00:59:53.840 asylum

00:59:54.220 is this a

00:59:56.620 law school

00:59:57.500 yeah

00:59:58.040 this is not a

00:59:58.580 jurisdiction

00:59:59.140 this is a

01:00:00.120 law school

01:00:00.820 how absurd

01:00:02.560 do you

01:00:03.420 you're supposed

01:00:03.940 to be learning

01:00:04.700 to be lawyers

01:00:05.640 we are

01:00:06.320 that's my

01:00:06.740 question

01:00:07.040 what court

01:00:08.540 are you going

01:00:09.000 to go in

01:00:09.500 and act like

01:00:10.260 this

01:00:10.660 you just said

01:00:11.180 it's a law

01:00:11.600 school

01:00:11.860 there's no

01:00:12.900 jurisdiction

01:00:13.460 why would

01:00:15.040 you subject

01:00:15.900 anybody

01:00:16.860 to this

01:00:17.800 treatment

01:00:18.120 why do you

01:00:18.640 you invite a

01:00:20.160 speaker on

01:00:20.620 a campus

01:00:21.060 and then you

01:00:21.900 gang up

01:00:23.100 and heckle 1.00

01:00:23.760 them to death

01:00:24.780 and then you

01:00:25.840 invite

01:00:26.300 and then you

01:00:27.300 invite

01:00:27.780 then you invite

01:00:28.660 an administrator

01:00:29.400 to give a

01:00:30.100 stage remark

01:00:31.300 what is this

01:00:34.000 is this like

01:00:34.480 a struggle

01:00:35.120 session

01:00:35.520 what anybody

01:00:37.400 doesn't agree

01:00:38.560 with you

01:00:38.920 is laughable

01:00:39.820 and everybody

01:00:40.800 knows it

01:00:41.700 you know

01:00:42.420 it

01:00:42.600 the federal

01:00:43.120 society

01:00:43.540 knows it

01:00:43.880 everybody

01:00:44.200 knows

01:00:44.560 you don't

01:00:45.100 want to hear

01:00:45.380 a single

01:00:45.800 solitary

01:00:46.340 thing

01:00:46.720 what is this

01:00:46.940 do you have

01:00:47.380 that you have

01:00:47.920 to say

01:00:48.340 finish your remarks

01:00:50.220 judge

01:00:50.640 if you think

01:00:51.740 that i'm going to

01:00:52.300 stand here

01:00:52.900 and answer a bunch

01:00:54.060 of hostile

01:00:54.620 ridiculous

01:00:55.260 when did you

01:00:56.060 stop beating

01:00:56.620 your wife

01:00:57.080 type questions

01:00:57.860 so what

01:01:00.520 how does it feel

01:01:01.520 you complain

01:01:02.460 about people

01:01:03.060 like me

01:01:03.700 or judges

01:01:04.200 like me

01:01:04.740 or lawyers

01:01:05.340 like me

01:01:05.760 or whatever

01:01:06.180 you complain

01:01:07.020 about them

01:01:07.540 denying your rights

01:01:08.680 and erasing

01:01:09.200 your resistance

01:01:09.800 and whatever

01:01:10.340 other does

01:01:10.860 where you want

01:01:11.380 and then you

01:01:11.900 turn right around

01:01:12.580 and do the same

01:01:13.240 thing

01:01:13.520 to somebody

01:01:14.440 else

01:01:14.720 the same

01:01:15.560 damn thing

01:01:16.720 you do it

01:01:17.340 to somebody

01:01:17.740 else

01:01:17.940 what does it

01:01:18.680 feel to be

01:01:19.360 a complete

01:01:20.040 hypocrite

01:01:21.280 it's amazing

01:01:22.480 it's i mean

01:01:22.860 they never fight

01:01:23.480 back to him

01:01:24.020 so the judge

01:01:24.700 fought back

01:01:25.500 but give us

01:01:27.120 a flavor

01:01:27.520 for what he

01:01:28.060 was fighting

01:01:28.500 back against

01:01:29.220 what preceded

01:01:30.640 him taking

01:01:31.320 on the crowd

01:01:31.880 yeah absolutely

01:01:33.160 well he got

01:01:34.600 up to the podium

01:01:35.180 he started

01:01:35.620 to give a speech

01:01:36.180 and no one

01:01:36.760 could hear it

01:01:37.220 right i mean

01:01:37.520 we had a mic

01:01:38.200 and it didn't

01:01:38.660 matter

01:01:38.960 he was trying

01:01:39.620 to get through

01:01:40.020 this just

01:01:40.600 trying to get

01:01:41.080 on to his

01:01:41.760 speech about

01:01:42.340 cryptocurrency

01:01:42.740 and guns

01:01:43.300 and there was

01:01:44.060 just this din

01:01:44.860 and people

01:01:45.680 sort of yelling

01:01:46.340 things at him

01:01:47.080 before that

01:01:47.880 he'd come in

01:01:48.340 the hallway

01:01:48.660 and people

01:01:48.980 were yelling

01:01:49.320 particularly

01:01:49.720 vile things

01:01:50.460 about you know

01:01:51.000 rape of various

01:01:51.700 family members

01:01:52.700 about uh

01:01:53.980 i don't know

01:01:54.620 if you can see

01:01:55.120 that if your

01:01:55.700 viewers can see

01:01:56.240 that sign

01:01:56.900 uh certainly

01:01:57.680 listeners can't

01:01:58.400 but there's a

01:01:58.840 sign you know

01:01:59.440 kyle duncan

01:02:00.320 can't find a

01:02:01.020 female sex organ 0.91

01:02:01.860 and so there

01:02:02.600 are these very

01:02:03.400 sort of crude

01:02:04.740 and sick

01:02:05.720 catcalls being

01:02:06.580 thrown at him

01:02:07.200 unfounded slanders 0.86

01:02:08.860 about how he

01:02:09.320 supposedly erased

01:02:10.080 the rights of

01:02:10.680 various groups

01:02:11.340 uh it was

01:02:13.260 just just bedlam

01:02:14.720 and really

01:02:15.400 impossible for

01:02:16.220 him to get

01:02:17.420 through speech

01:02:17.940 or do anything

01:02:18.440 this is a

01:02:18.820 close-up of the

01:02:19.400 disgusting sign

01:02:20.280 okay so he

01:02:21.320 decided not to

01:02:22.140 just roll over

01:02:23.000 um he decided

01:02:24.220 to take them

01:02:24.600 on and it's

01:02:25.000 exactly right

01:02:25.640 and i look

01:02:26.080 forward to

01:02:26.580 seeing a

01:02:27.220 repeat of that

01:02:28.000 when any one

01:02:28.600 of these young

01:02:29.040 lawyers aspiring

01:02:30.180 lawyers appears

01:02:30.980 in judge duncan's

01:02:31.800 court that will

01:02:32.620 that will bring

01:02:33.360 this full circle

01:02:34.080 when one of

01:02:34.940 these morons

01:02:35.420 actually has to

01:02:36.100 argue before the

01:02:36.680 fifth circuit

01:02:37.080 court of appeals

01:02:37.740 the tables are

01:02:38.560 turned and he's

01:02:39.600 in charge of

01:02:40.140 their client's

01:02:40.980 future this is

01:02:42.020 one of the many

01:02:42.500 reasons why you

01:02:43.120 don't disrespect

01:02:43.960 a federal court

01:02:45.140 judge it's just

01:02:46.180 stupid okay so

01:02:47.800 he took them on

01:02:48.960 they battled and

01:02:50.280 you must have been

01:02:50.780 very frustrated

01:02:51.460 watching this i mean

01:02:52.240 was it annoying

01:02:53.080 for you to who

01:02:54.280 just wanted to

01:02:54.760 hear the guy

01:02:55.260 well i think it

01:02:57.000 was more upsetting

01:02:57.700 in that you know

01:02:58.620 we invited a

01:02:59.320 federal judge here

01:03:00.260 and we want to

01:03:01.320 be all welcoming

01:03:02.200 welcoming hosts

01:03:03.220 to him and

01:03:04.200 instead we subject

01:03:05.280 him to sort of

01:03:05.780 this utter contempt

01:03:06.680 and this horrible

01:03:07.840 crazy mob

01:03:08.800 and i just feel

01:03:10.020 really guilty

01:03:10.540 for what what

01:03:11.500 happened and

01:03:12.520 uh i'm very

01:03:13.320 sorry to the

01:03:13.800 judge and

01:03:14.620 you know you'll

01:03:15.140 see that uh

01:03:16.180 stanford's president

01:03:17.440 and dean after

01:03:19.060 this went viral

01:03:19.720 online i would add

01:03:20.720 decided to issue

01:03:21.620 an apology but

01:03:22.840 you know that's

01:03:23.380 that's an important

01:03:23.940 first step i don't

01:03:24.740 think has made it

01:03:25.280 right

01:03:25.500 no exactly right

01:03:27.000 there's a real

01:03:27.580 question about how

01:03:28.160 this was allowed

01:03:28.640 to happen and

01:03:29.380 you shouldn't you

01:03:30.040 shouldn't feel

01:03:30.500 guilty at all you

01:03:31.740 tried to do the

01:03:32.260 right thing you

01:03:32.840 you did not do

01:03:33.500 the wrong thing

01:03:33.960 your your

01:03:34.420 colleagues did

01:03:35.080 these other kids

01:03:36.280 uh young people 0.98

01:03:37.240 all right so

01:03:38.080 he gets to the

01:03:39.460 point where he

01:03:39.800 says can i speak

01:03:40.400 with an administrator

01:03:41.040 can i you know

01:03:41.740 understanding that

01:03:42.560 the policy at this

01:03:43.280 school like most is

01:03:44.340 you're not allowed

01:03:45.040 to disrupt i mean

01:03:46.400 that's that's the

01:03:47.140 that's the u.s

01:03:48.040 supreme court law

01:03:48.920 that schools can

01:03:49.700 discipline free speech

01:03:50.700 when it's disruptive

01:03:51.680 at the educational

01:03:52.900 level um

01:03:54.180 he wants to speak

01:03:55.420 with somebody who

01:03:55.940 can stop the

01:03:56.860 disruption

01:03:57.320 enter

01:03:58.480 uh tirion steinbach

01:04:00.840 who's the head of

01:04:02.060 dei at stanford law

01:04:03.820 diversity equity

01:04:04.580 inclusion uh which

01:04:06.060 is constantly a

01:04:06.900 hammer in search of

01:04:07.660 a nail i mean they

01:04:08.660 will find some sort

01:04:09.660 of diversity problem

01:04:10.380 whether it exists or

01:04:11.100 not she's that's

01:04:12.400 what she's employed 0.58

01:04:13.040 to do and instead

01:04:14.720 of getting up there

01:04:15.460 and saying put down

01:04:16.540 your sign that

01:04:17.820 suggests this judge

01:04:19.040 can't find a woman's 1.00

01:04:20.420 clitoris forgive me

01:04:21.740 audience that's what

01:04:22.460 the sign said um

01:04:24.160 she encourages them

01:04:25.620 she seems to be

01:04:26.900 applauding them

01:04:28.480 and she then piles 0.98

01:04:29.660 on the judge

01:04:30.760 while making it

01:04:31.460 all about herself

01:04:32.640 at the same time

01:04:33.320 and how uncomfortable

01:04:34.780 she feels and having

01:04:36.400 to do this to this

01:04:37.700 villain but you know

01:04:38.900 he put her in this

01:04:39.980 position so here we

01:04:41.120 go here is a little

01:04:42.060 from um tirion

01:04:44.220 steinbach

01:04:44.940 i have to write

01:04:45.740 something down

01:04:46.340 because i'm so

01:04:47.100 uncomfortable i'm

01:04:48.160 uncomfortable because

01:04:48.920 this event is tearing

01:04:50.580 at the fabric of this

01:04:51.720 community that i care

01:04:52.860 about and i'm here

01:04:53.620 to support is the

01:04:55.000 juice worth the

01:04:55.940 squeeze

01:04:56.360 your advocacy

01:05:00.360 your opinions

01:05:01.180 from the bench

01:05:02.060 land as

01:05:03.260 absolute disenfranchisement

01:05:05.520 of their rights

01:05:06.360 and does land

01:05:07.100 let me get

01:05:07.860 it's uncomfortable

01:05:10.740 to say

01:05:11.480 that for many people

01:05:12.960 here

01:05:13.380 your work

01:05:14.460 has caused harm

01:05:15.500 in my role

01:05:16.560 at this university

01:05:17.520 my job

01:05:18.320 is to create

01:05:19.680 the space of

01:05:20.360 belonging

01:05:20.760 for all people

01:05:22.300 in this institution

01:05:23.340 and it doesn't

01:05:24.120 feel comfortable

01:05:24.860 and it doesn't

01:05:25.740 always feel safe

01:05:27.020 but there are

01:05:27.560 always places of

01:05:28.620 safety

01:05:29.040 i'm also uncomfortable

01:05:30.400 because it is my

01:05:31.340 job to say

01:05:32.440 you are invited

01:05:33.340 into this space

01:05:34.280 you are absolutely

01:05:35.540 welcome in this

01:05:36.520 space

01:05:36.900 we believe

01:05:37.840 that the way

01:05:38.980 to address

01:05:39.880 speech that

01:05:40.640 feels abhorrent

01:05:41.640 that feels

01:05:42.160 harmful

01:05:42.720 that literally

01:05:44.360 denies the

01:05:45.360 humanity of people

01:05:46.680 that one way

01:05:47.760 to do that

01:05:48.280 is with more

01:05:48.920 speech and not

01:05:49.840 less

01:05:50.340 and not to

01:05:51.740 shut you down

01:05:52.480 or censor you

01:05:53.460 or censor the

01:05:54.800 student group

01:05:55.500 that invited you

01:05:56.200 here

01:05:56.460 that is hard

01:05:57.360 that is uncomfortable

01:05:58.380 i hope you

01:06:00.040 can learn too

01:06:01.400 while you're in

01:06:02.360 this learning

01:06:02.780 institution

01:06:03.260 i hope you can

01:06:04.140 look for the

01:06:05.140 spectacle of

01:06:06.000 and the noise

01:06:06.840 to the people

01:06:08.400 holding these signs

01:06:09.840 they are here

01:06:10.560 because they feel

01:06:12.060 harmed not just

01:06:13.340 by your speech

01:06:14.200 if it was just

01:06:14.980 words that would

01:06:15.740 be one thing

01:06:16.420 you have authority

01:06:18.020 you all chose

01:06:18.960 to be here today

01:06:19.860 many people go

01:06:21.340 before judge

01:06:22.060 duncan who do

01:06:23.300 not so choose

01:06:24.300 to be there

01:06:24.960 everything he

01:06:27.220 says you have

01:06:28.360 a choice

01:06:28.880 you do not

01:06:30.180 need to stay

01:06:30.860 here if this

01:06:31.460 is not where

01:06:31.960 you want to

01:06:32.360 be

01:06:32.700 and then half

01:06:38.580 the students

01:06:39.020 walked out

01:06:39.960 i mean the

01:06:40.660 tim it's got

01:06:41.200 all the

01:06:42.360 dei buzzwords

01:06:43.940 and behavior

01:06:44.740 um first of all

01:06:46.060 the woman wrote 1.00

01:06:46.620 it down

01:06:47.020 so this is

01:06:47.660 planned

01:06:48.040 she was looking

01:06:48.960 forward to her

01:06:49.540 little moment

01:06:50.100 hijacking your

01:06:50.880 event

01:06:51.160 your your dean

01:06:52.620 of dei

01:06:53.120 um she's

01:06:54.580 uncomfortable

01:06:54.940 all about her

01:06:55.580 how does she 0.55

01:06:56.540 feel how about

01:06:57.240 how does tim

01:06:57.820 feel how does

01:06:58.640 the federalist

01:06:59.120 society feel

01:06:59.780 how does the

01:07:00.420 judge feel

01:07:00.860 she didn't

01:07:01.480 care the

01:07:02.360 clicking

01:07:02.760 literally when

01:07:04.100 i was in my

01:07:04.600 college sorority

01:07:06.220 as at age

01:07:07.400 17 18

01:07:08.740 that's when we

01:07:09.780 used to click

01:07:10.620 we used to

01:07:11.260 snap like that

01:07:12.820 instead of clap

01:07:13.740 juvenile pathetic 0.95

01:07:15.520 way of showing

01:07:16.940 your support

01:07:17.560 disenfranchised

01:07:18.680 of course

01:07:19.080 she blames

01:07:19.560 the judge

01:07:19.960 and all of

01:07:20.280 his rulings

01:07:20.700 of disenfranchising

01:07:21.460 people but he

01:07:22.080 pointed out in

01:07:22.660 his rebuttal

01:07:23.220 what about the

01:07:24.100 people you're

01:07:24.460 disenfranchising

01:07:25.100 by not letting

01:07:25.560 me speak

01:07:25.960 and if i heard

01:07:26.900 that that phrase

01:07:27.780 one more time

01:07:28.400 tim she said

01:07:29.480 it at least

01:07:29.740 four times

01:07:30.300 is the juice

01:07:31.640 worth the

01:07:32.320 squeeze

01:07:33.000 you're allowed

01:07:34.080 to be here

01:07:34.980 you were

01:07:35.560 invited here

01:07:36.300 but what you

01:07:37.220 need to ask

01:07:38.260 yourself as you

01:07:39.220 address this

01:07:40.020 this group

01:07:40.960 to which you've

01:07:41.840 done harm

01:07:42.580 is whether

01:07:43.460 the juice

01:07:44.300 is worth

01:07:45.120 the squeeze

01:07:46.020 so how did

01:07:47.320 you feel

01:07:47.760 when you

01:07:48.200 listened

01:07:48.600 to this

01:07:49.720 woman 0.99

01:07:50.000 hijack your 0.67

01:07:50.620 event

01:07:50.900 i think we

01:07:52.500 felt pretty

01:07:52.880 set up

01:07:53.420 and it rings

01:07:54.260 hollow because

01:07:55.020 we had 15

01:07:55.800 minutes of 15

01:07:56.840 20 minutes of

01:07:57.600 bedlam where

01:07:58.360 the judge wasn't

01:07:58.800 able to get

01:07:59.100 anything out

01:07:59.620 then we have

01:08:00.320 this seven

01:08:00.800 minute pre-prepared

01:08:02.220 speech on

01:08:03.500 dei and on

01:08:04.660 you know

01:08:05.340 people being

01:08:06.120 uncomfortable

01:08:06.620 and then and

01:08:07.740 only then

01:08:08.120 now this is an

01:08:08.540 hour-long event

01:08:09.100 so now we're

01:08:09.380 about halfway

01:08:09.840 through it

01:08:10.240 then and only

01:08:10.940 then is there

01:08:11.600 some modicum

01:08:12.480 of order

01:08:13.000 where the

01:08:13.580 judge can

01:08:13.960 speak so

01:08:14.980 you know

01:08:15.520 if that's

01:08:16.120 what we're

01:08:16.320 going to

01:08:16.480 call free

01:08:16.880 speech now

01:08:17.480 i think it's

01:08:18.360 sort of over

01:08:18.900 uh i think

01:08:20.420 though it's

01:08:20.780 important to

01:08:21.100 realize this

01:08:21.380 isn't about

01:08:21.760 1d this

01:08:22.800 isn't about

01:08:23.200 stanford this

01:08:24.240 is just about

01:08:24.940 sort of the

01:08:25.460 insanity that's

01:08:26.380 at universities

01:08:26.940 now and it

01:08:27.980 got caught on

01:08:28.500 tape right

01:08:29.060 some things

01:08:29.560 that are

01:08:29.760 normally said

01:08:30.280 in the

01:08:30.520 shadows were

01:08:31.100 said out

01:08:31.580 loud at the

01:08:32.180 podium on

01:08:32.760 tape during

01:08:33.300 the federal

01:08:33.560 society event

01:08:34.420 but this is

01:08:35.220 the attitude

01:08:35.680 if you're a

01:08:36.360 dei dean you

01:08:37.360 know you may

01:08:37.720 be a fine

01:08:38.140 person we've

01:08:39.060 had fine

01:08:39.600 conversations

01:08:40.160 with tiran

01:08:41.600 your primary

01:08:42.060 customer is

01:08:42.600 the craziest

01:08:43.300 loudest most

01:08:44.260 nuts student

01:08:44.960 and so you

01:08:46.200 know you're

01:08:46.460 responding to

01:08:47.000 that incentive

01:08:47.600 and that means

01:08:48.640 doing whatever

01:08:49.160 this was

01:08:49.720 the hubris

01:08:51.020 of this woman

01:08:52.000 to look at

01:08:53.600 judge duncan

01:08:54.240 and tell him

01:08:55.140 he needs to

01:08:55.920 learn he

01:08:57.260 needs to

01:08:57.760 learn while

01:08:58.700 he's in that

01:08:59.240 room from

01:09:00.000 her she never

01:09:00.980 sat on a

01:09:01.600 federal court of

01:09:02.120 appeal she

01:09:02.740 never been a

01:09:03.280 judge no one

01:09:04.340 in that school

01:09:04.780 has even passed

01:09:05.360 the bar exam

01:09:06.000 sitting in front

01:09:06.600 of him that

01:09:06.960 day the

01:09:07.980 audacity to

01:09:09.700 say that to

01:09:10.400 a sitting

01:09:10.980 judge was

01:09:12.800 stunning even

01:09:14.080 to meet him

01:09:14.700 well i'm really

01:09:15.680 disappointed to

01:09:16.160 hear that but

01:09:16.560 we'd love to

01:09:16.940 have you at

01:09:17.280 stanford if

01:09:17.760 you'd like to

01:09:18.120 have the full

01:09:18.520 experience

01:09:19.100 oh i'll go

01:09:21.120 i'll go and

01:09:21.800 i expect i would

01:09:22.560 be treated with

01:09:23.280 more respect

01:09:23.880 because i guess

01:09:25.440 i've said some

01:09:26.360 things in the

01:09:26.800 past or done

01:09:27.280 some things in

01:09:27.760 the past that

01:09:28.240 these folks

01:09:28.620 would approve

01:09:29.040 of but i have

01:09:29.980 no desire for

01:09:30.600 their good

01:09:30.960 approval i have

01:09:32.080 no desire for

01:09:32.660 the just like

01:09:33.540 judge duncan

01:09:34.300 uh to be in

01:09:35.340 their company

01:09:35.820 and i think

01:09:36.440 more judges

01:09:37.440 need to do

01:09:38.540 what we've

01:09:38.920 seen a couple

01:09:39.340 of judges

01:09:39.680 do and say

01:09:40.340 we will not

01:09:41.200 be recruiting

01:09:41.820 anyone from

01:09:42.760 these law

01:09:43.160 schools outside

01:09:44.400 of the federal

01:09:44.920 society we

01:09:45.880 won't be

01:09:46.300 recruiting anybody

01:09:47.280 who doesn't

01:09:48.140 stand up for

01:09:48.680 principles of

01:09:49.220 free speech i

01:09:49.880 mean what do

01:09:50.080 you make of

01:09:50.360 that i think

01:09:51.060 that's a good

01:09:51.480 step i think

01:09:52.100 there are a lot

01:09:52.560 of pressure

01:09:52.920 points we can

01:09:53.420 take but judges

01:09:54.340 absolutely should

01:09:55.120 think critically

01:09:55.660 about how their

01:09:56.360 students are acting

01:09:57.120 uh you know you

01:09:58.180 saw a hundred

01:09:58.700 students we're not

01:09:59.300 that big of a

01:09:59.780 law school i mean

01:10:00.620 this is a big

01:10:01.300 group of students

01:10:01.980 showed up to

01:10:03.000 jeer at this

01:10:03.480 judge to wave

01:10:04.100 obscene signs uh

01:10:05.540 you know since

01:10:06.260 since we're not

01:10:06.820 doing a sort of

01:10:07.940 family programming

01:10:08.700 roles the judge

01:10:09.620 got into it the

01:10:10.420 guy with that

01:10:10.860 poster and

01:10:11.720 actually this guy

01:10:12.400 yelled at him

01:10:13.060 you know i'm a

01:10:14.040 gay man i have

01:10:14.820 sex with men i 0.59

01:10:15.620 can find the

01:10:16.160 prostate why can't

01:10:17.160 you find the

01:10:17.640 clitoris i mean

01:10:18.260 this is something

01:10:18.980 yelled at a

01:10:19.640 federal judge when

01:10:20.780 he comes to

01:10:21.300 visit what's

01:10:21.780 supposed to be

01:10:22.280 america's

01:10:22.680 preeminent law

01:10:23.340 school and so uh

01:10:24.600 maybe think again

01:10:25.500 about whether this

01:10:26.240 is america's

01:10:26.700 preeminent law

01:10:27.320 school yeah we

01:10:28.960 actually have a bit

01:10:29.860 of that exchange

01:10:30.440 since we are in

01:10:31.020 the r-rated

01:10:31.420 camp let's play

01:10:32.300 it stop

01:10:32.640 four

01:10:32.860 yeah right it's

01:10:56.040 so rare to see

01:10:56.700 somebody call out

01:10:57.640 the nonsense and

01:10:59.180 you know what it's a

01:10:59.980 little reminiscent is it

01:11:01.000 not tim of what

01:11:01.620 happened to brett

01:11:02.200 weinstein at

01:11:02.820 evergreen where the

01:11:04.100 students turned on

01:11:04.940 him shouted him

01:11:06.220 down just for having

01:11:06.920 a totally normal

01:11:07.680 position which is

01:11:08.460 it's not right to

01:11:09.140 demand for the

01:11:09.680 black students to

01:11:10.300 demand that the

01:11:10.760 white students not

01:11:11.440 show up a day at

01:11:12.920 school at a

01:11:13.800 university for which

01:11:14.520 they paid which is

01:11:15.300 what was happening

01:11:15.920 and brett weinstein

01:11:17.120 lost his job he got

01:11:18.000 shouted down he got

01:11:18.700 treated like a

01:11:19.260 terrorist for that

01:11:20.820 but isn't it

01:11:21.320 reminiscent of that

01:11:22.140 absolutely absolutely

01:11:24.460 and it's it's

01:11:25.200 reminiscent of things

01:11:25.960 you hear about all

01:11:26.760 over the country you

01:11:27.440 know again the

01:11:27.920 difference is this was

01:11:28.680 caught on tape that's

01:11:29.840 what got the apology

01:11:30.580 that's why we're

01:11:31.140 here today

01:11:31.560 well let's talk

01:11:33.020 about the apology

01:11:33.620 so the school

01:11:34.520 some were praising

01:11:36.280 the stanford law

01:11:37.340 school over the

01:11:38.060 weekend because it

01:11:38.840 issued a statement

01:11:39.600 sort of falling on

01:11:42.280 its sword here

01:11:43.180 in in part the

01:11:44.900 stanford law dean

01:11:45.720 jenny martinez

01:11:47.100 issued the following

01:11:47.600 statement so these

01:11:48.820 are some highlights

01:11:49.460 saying okay it's a

01:11:51.520 violation of the

01:11:52.120 disruption policy to

01:11:53.600 prevent the effect of

01:11:54.360 carrying out of a

01:11:54.980 public event

01:11:55.420 heckling other forms of

01:11:56.500 interruption that

01:11:57.100 prevent a speaker from

01:11:57.840 making or completing a

01:11:58.620 presentation are

01:11:59.780 inconsistent with the

01:12:00.760 policy she goes on to

01:12:03.020 say tempers flared

01:12:04.840 along multiple

01:12:06.120 dimensions that's

01:12:07.280 that's both citing

01:12:08.120 this event that's not

01:12:09.180 an appropriate you

01:12:10.120 know one side hijacked

01:12:11.680 the other side was

01:12:12.360 irritated in such

01:12:14.780 situations an optimal

01:12:15.800 outcome involves

01:12:16.540 de-escalation that

01:12:17.960 allows the speaker to

01:12:18.680 proceed and then for

01:12:20.580 counter speech to occur

01:12:21.640 in an alternative

01:12:22.140 location alternative

01:12:23.260 location however well

01:12:25.340 intentioned attempts at

01:12:27.040 managing the room in this

01:12:28.640 instance went awry clearly

01:12:31.300 a reference to

01:12:31.840 steinbach wouldn't you

01:12:32.620 agree i think that's

01:12:34.620 how i interpret it yeah

01:12:35.640 but i think things have

01:12:36.840 gotten pretty out of

01:12:37.500 hand before we even got

01:12:38.480 into the room right you

01:12:39.400 had sort of this gauntlet

01:12:40.460 the judge had to go

01:12:41.180 through a crazy yelling

01:12:42.300 face painted people you

01:12:43.640 got a poodle mix painted

01:12:44.640 as a trans flag running

01:12:45.760 around and you had these

01:12:47.000 posters i brought one

01:12:47.820 with me today that have

01:12:48.980 headshots of our entire

01:12:50.280 board they went with a

01:12:51.120 very thin and young

01:12:51.980 headshot of me so i'm

01:12:52.960 grateful for that but uh

01:12:54.520 you know it says you

01:12:55.420 should be ashamed these

01:12:56.540 were up all over campus

01:12:57.780 they had you know posters

01:12:59.360 sort of alleging various

01:13:01.020 slanders against the judge

01:13:02.340 all over so uh you know

01:13:04.060 the de-escalation probably

01:13:05.140 needed to happen uh earlier

01:13:06.820 and probably even months

01:13:07.940 ago you know probably with

01:13:08.780 having some diversity on

01:13:09.740 the faculty probably with

01:13:10.660 having as a normal part of

01:13:12.180 the work of the law school

01:13:13.100 being exposed to opposing

01:13:14.260 views and having to debate

01:13:15.220 them rigorously you know if

01:13:16.340 the only time you see uh an

01:13:18.320 opposing view is when the

01:13:19.660 federal society brings in a

01:13:20.780 sitting federal judge then

01:13:22.200 yeah you're probably not

01:13:23.040 going to respond to it uh

01:13:24.380 particularly well well the

01:13:27.400 stanford president weighs

01:13:28.520 in um and says the

01:13:30.460 following is a joint

01:13:31.620 statement with the law

01:13:32.380 dean as well after her

01:13:33.620 statement alone and says

01:13:35.220 we write to apologize to

01:13:36.300 judge duncan for the

01:13:37.140 disruption um what

01:13:38.980 happened was inconsistent

01:13:39.680 with our policies on free

01:13:40.740 speech we're very sorry

01:13:41.840 about your experience here

01:13:43.200 and then he goes on to

01:13:44.860 say uh in addition staff

01:13:46.940 members who should have

01:13:47.780 enforced university policies

01:13:49.360 failed to do so clearly

01:13:51.020 referenced to tyrian steinbach

01:13:52.320 and others who were there

01:13:53.000 she wasn't the only

01:13:53.660 administrator and instead

01:13:55.140 intervened in inappropriate

01:13:56.860 ways that are not aligned

01:13:58.520 with the university's

01:13:59.160 commitment to free speech

01:13:59.980 we are taking steps to

01:14:02.360 ensure that something like

01:14:03.340 this does not happen again

01:14:04.340 and the judge responded

01:14:06.020 today accepting the apology

01:14:07.880 or yesterday to his credit

01:14:09.500 pleased to accept their

01:14:10.680 apology and says i hope you

01:14:12.660 tender one as well to the

01:14:13.620 stanford law school community

01:14:14.680 most harmed by the mob

01:14:16.000 action the members of the

01:14:17.320 federalist society and then

01:14:18.820 says your apology promises

01:14:19.960 to take steps to make sure

01:14:20.940 this kind of disruption

01:14:21.620 doesn't happen again given the

01:14:23.040 disturbing nature of what

01:14:23.780 happened clearly concrete and

01:14:25.180 comprehensive steps are

01:14:26.620 necessary i look forward to

01:14:27.920 learning what measures

01:14:28.720 stanford plans to take to

01:14:30.240 restore a culture of

01:14:31.000 intellectual freedom i'll

01:14:32.480 tell you tim i'll tell you

01:14:34.160 my position um

01:14:35.520 tyrian steinbach needs to be

01:14:37.780 fired if she had any honor

01:14:39.460 she would resign since her 0.79

01:14:41.160 mission is clearly not

01:14:42.120 aligned with that at the

01:14:42.880 university as stated by the

01:14:44.220 president and the law school

01:14:45.800 dean short of that she

01:14:47.280 should be fired you agree

01:14:48.660 i think they hire people like

01:14:51.300 this to be scapegoats right i

01:14:52.520 think they've put her in a

01:14:53.180 bad position they tell her

01:14:54.300 your customer is the craziest

01:14:55.740 student you should do things

01:14:57.300 like this i mean why there

01:14:58.540 were five administrators in

01:14:59.580 that room why was the dei dean

01:15:01.220 including the acting dean

01:15:02.240 students why was the poor dei

01:15:03.800 dean sent down to de-escalate

01:15:05.540 uh there's you know this is

01:15:07.580 somebody they have set up as a

01:15:08.680 scapegoat and uh i'm not sure

01:15:10.640 she should be fired that's that's 1.00

01:15:11.960 my position uh maybe this

01:15:13.720 shouldn't be a job maybe they

01:15:15.080 should be clearer on what the

01:15:16.260 actual role of creating

01:15:17.260 belonging is but you 0.93

01:15:18.420 shouldn't just create a role

01:15:19.600 that sort of is head

01:15:20.620 activist and then you can

01:15:22.040 sort of parade that person

01:15:23.220 out uh when you want to get

01:15:24.740 out of trouble so i think this

01:15:26.620 is about a bigger change than

01:15:27.800 firing this dean who has very

01:15:29.360 little actual power um it's a

01:15:31.460 very good point it's a very

01:15:32.520 good point the fact that her

01:15:33.360 position exists is stanford's

01:15:35.360 fault as i said they created the

01:15:37.100 hammer in search of the nail

01:15:38.080 but what she did was

01:15:39.200 disgraceful it was

01:15:40.080 disrespectful i mean as a

01:15:41.600 member of a bar of the bar i

01:15:42.960 was i was horrified uh by her

01:15:45.520 behavior and treatment of that

01:15:46.500 judge i hope you learn you

01:15:49.420 learn you sit down and be

01:15:51.140 quiet and learn for once

01:15:52.540 madam um i'll say this now

01:15:55.400 the administration has a new

01:15:56.900 message for you and the

01:15:58.000 federalist society they want

01:15:59.720 you because i understand

01:16:00.780 there have been some threats

01:16:01.720 coming your way and they're

01:16:03.840 worried that you're just as

01:16:04.920 fragile as the people at that

01:16:06.540 protest they want you to reach

01:16:08.360 out to the dei group for

01:16:12.060 mental health assistance

01:16:13.380 literally tim is there one

01:16:15.640 member of the federalist

01:16:16.940 society in any chapter of the

01:16:18.740 united states who needs mental

01:16:20.400 health assistance because of a

01:16:22.220 protest i i don't think so

01:16:24.780 again this happens often or at

01:16:26.520 least this attitude happens

01:16:27.660 often you saw a hundred a

01:16:29.460 hundred of our classmates showed

01:16:30.660 up to wave signs and you know

01:16:32.660 yell sort of wicked things and

01:16:34.520 so there's a bigger group that

01:16:35.560 sort of is hostile and so you

01:16:37.540 know we're used to the

01:16:38.200 hostility we can take the heat

01:16:39.360 and in a way maybe this is what

01:16:40.900 gives us a great legal training

01:16:42.000 it's not sort of the one-sided

01:16:43.320 views but it's spending three

01:16:44.500 years in hostile arguments

01:16:45.700 mm-hmm well it's so true you

01:16:47.880 would think the other side

01:16:48.640 would appreciate that

01:16:49.880 opportunity as well because

01:16:51.300 these law students i've never

01:16:52.320 seen people so thin-skinned and

01:16:54.440 they're always worried about

01:16:55.300 their emotional trauma do you

01:16:56.560 have any idea what happens in a

01:16:57.740 deposition in a courtroom do you

01:16:59.740 know what a hot bench does to

01:17:01.140 you it's all about humiliating

01:17:02.640 you all about you i remember

01:17:04.720 this judge yelling at me after

01:17:05.880 a default judgment had been

01:17:06.960 entered against my client prior

01:17:08.420 to our involvement in the case

01:17:09.500 screaming at me from the federal

01:17:11.660 bench do you understand what

01:17:13.140 willful blindness is do you

01:17:15.080 know what willful blind

01:17:16.080 humiliating me if it wasn't my

01:17:17.880 error but i took it i could go

01:17:19.840 on depositions get very ugly

01:17:21.680 you can't just go cry in your

01:17:23.480 soup like a little baby and then

01:17:25.320 snap when you get a favorable

01:17:26.880 ruling i would love to practice

01:17:28.860 against these people but the

01:17:31.060 threats are a different matter and

01:17:33.360 is it true that you and or your

01:17:35.000 your friends in the federalist

01:17:36.160 society have been getting some

01:17:37.260 no i haven't received any

01:17:39.140 threats uh but i have been sort

01:17:40.520 of staying off of most of my

01:17:42.100 social media so who knows i i

01:17:43.860 have heard that there have been

01:17:44.780 some things involving others but

01:17:46.000 i don't think anything that's

01:17:46.880 serious i think this is more

01:17:48.140 about mental health and um you

01:17:50.760 know we we have our own support

01:17:52.820 networks right we'll be okay we

01:17:54.700 don't need to go talk with the

01:17:56.060 agitators to feel supported no i

01:17:59.340 mean honestly my impression is no

01:18:01.660 one is going to go seek mental

01:18:03.580 health assistance from the dei group

01:18:05.680 no less because they're not

01:18:07.280 feeling hurt and wounded they're

01:18:09.440 mad they're ticked off they're

01:18:11.260 you know what you do when you get

01:18:12.160 mad and ticked off you you plan

01:18:14.040 you you think about it you come

01:18:16.140 up with a better plan and you

01:18:17.800 fight that's what you do they

01:18:19.180 only inspired i think members of

01:18:21.300 the federalist society to fight

01:18:22.380 back and beyond not just the

01:18:23.580 federalist society those of us who

01:18:25.000 don't want to see this corruption

01:18:26.140 of our college institutions our

01:18:27.860 law school institutions our medical

01:18:29.160 institutions that the just

01:18:31.920 boneheaded training of our young

01:18:33.460 people and the reinforcement that

01:18:35.400 they're too weak to hear opposing

01:18:37.420 point of views you're too

01:18:38.780 pathetic that's exactly the

01:18:40.440 opposite of what the federalist

01:18:41.320 society believes um and the

01:18:43.360 reference of all of you back to

01:18:45.260 the three administrators who were

01:18:46.780 there and letting it happen is just

01:18:48.540 salt in the moon in the wounds

01:18:49.840 tim i'm i'm amazed i really hope

01:18:52.320 that you are resolved to fight and

01:18:55.080 to get yourself not only out into

01:18:56.360 the practice of law but on federal

01:18:57.960 benches so you can sit ex to guys

01:18:59.260 like judge duncan and handle these

01:19:01.380 litigants when they come before you 1.00

01:19:02.740 appropriately i'll give you the last

01:19:04.240 word

01:19:04.480 thanks for having us megan we are

01:19:06.960 undeterred uh we have this week

01:19:08.480 jonathan mitchell john you and gene

01:19:10.140 hamilton from america first legal

01:19:11.420 and we're really grateful for the

01:19:12.740 professors who have stood with us at

01:19:14.000 stanford the folks at the global

01:19:15.160 liberty institute like josh ron scott

01:19:16.880 atlas uh russell berman the

01:19:18.520 humanities department of course our

01:19:19.640 advisor michael mcconnell

01:19:20.660 uh absolutely you know take

01:19:22.840 pressure if you have kids think

01:19:24.180 about where you're sending them for

01:19:25.040 school and finally we need prayer

01:19:26.700 because if you see that video

01:19:27.980 there's something beyond sort of

01:19:29.460 thought and reason happening uh we

01:19:31.420 need prayer to change hearts and

01:19:32.540 minds and really get to a place

01:19:34.180 where we can love and forgive each

01:19:35.160 other so thank you megan

01:19:36.840 so well said so well said and i

01:19:39.300 accept your invitation i will come

01:19:40.500 anytime you guys want me

01:19:41.840 thank you

01:19:43.160 last night were the oscars i didn't

01:19:46.340 watch i gotta admit i'm not into it

01:19:47.980 you know they went woke they're

01:19:49.300 still kind of woke they're annoying

01:19:50.480 hollywood hates everybody who's on

01:19:51.760 the right or center

01:19:52.420 and we know it um but there were some

01:19:55.160 nice moments and one was when

01:19:57.180 the uh michelle the actress michelle

01:19:59.340 yo who starred in everything

01:20:01.040 everywhere all at once which

01:20:02.640 literally won everything everywhere

01:20:04.720 all at once last night and won

01:20:06.320 everything uh she won best actress

01:20:08.480 and listen to what she said

01:20:10.260 this is proof that dreams dream big

01:20:13.820 and dreams do come true and ladies

01:20:18.440 don't let anybody tell you you are

01:20:20.980 ever past your prime

01:20:22.480 love that apparently she's 60 years

01:20:26.840 old she looks amazing and it was a

01:20:28.460 middle finger to don lemon as i told

01:20:30.060 you that was not a left right issue

01:20:31.720 that was just a you know are you a

01:20:34.460 moron or not issue and she's not um 0.66

01:20:37.300 also best actor brendan frazier for

01:20:40.160 the whale so good to see that right

01:20:42.180 like he i love a comeback story

01:20:43.600 america's great with those and he

01:20:45.480 seems to have really earned it and

01:20:47.620 then there was a great moment when

01:20:49.540 best actor in a supporting role uh

01:20:51.240 he who won he starred he was the kid

01:20:55.380 in the indiana jones movies played

01:20:57.740 shorty remember and he and harrison ford

01:20:59.880 had a nice moment where they hugged on

01:21:01.160 stage that's really sweet i like when

01:21:03.360 they do the emotional stuff and not the

01:21:04.620 woke luxury stuff and he uh had a

01:21:07.800 moment that i'm stealing right now from

01:21:10.180 npr's up first this morning it was a

01:21:11.540 great soundbite take a listen

01:21:12.480 my journey started on a boat i spent a

01:21:16.200 year in a refugee camp and somehow i

01:21:20.240 ended up here on hollywood's biggest

01:21:22.720 stage

01:21:23.300 they say stories like this only happen

01:21:30.120 in the movies i cannot believe it's

01:21:32.980 happening to me this this is the

01:21:36.200 american dream you know what we need

01:21:39.060 more of that shoot it in my veins as

01:21:41.240 the kids say he loves america and he's

01:21:43.440 not afraid to say it is it any

01:21:44.980 accident you know a lot of immigrants

01:21:46.520 who come to the country are the ones 1.00

01:21:48.320 who love the country the most and are

01:21:50.060 the biggest proselytizers for it so it

01:21:51.960 was wonderful to see him get up there

01:21:53.280 and remind people of how awesome the

01:21:55.840 living in the united states is and being

01:21:57.800 in this country is uh for all of us so

01:22:00.060 good for him glad he won jamie lee

01:22:02.440 curtis won i predict we're going to get

01:22:04.960 a jamie lee curtis speech soon that

01:22:06.620 sounds like that sally field thing

01:22:07.820 apologizing for her privilege

01:22:09.200 anyway overall doesn't sound like it

01:22:12.440 was as woke as it could have been and

01:22:14.200 i am very glad to see um those

01:22:17.420 supporting actor and actresses uh in

01:22:20.100 particular so anyway that's my take on

01:22:21.760 it we will see you tomorrow thanks for

01:22:23.440 joining us live from montana

01:22:24.940 thanks for listening to the megan

01:22:28.520 kelly show no bs no agenda and no fear

01:22:31.940 you

01:22:34.000 you

01:22:42.940 you

The Megyn Kelly Show - March 13, 2023

Silicon Valley Bank Collapse, and Mayhem at Stanford Law, with David Sacks, Vivek Ramaswamy, and Tim Rosenberger ｜ Ep. 510

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