In this episode, I sit down with Balaji Srinivasan, CEO of Coinbase and author, to talk about his background in biotech, crypto, and why he thinks Bitcoin should be legalized in the USA. We also talk about why Bitcoin is better than most people s idea of what a cryptocurrency should be, and what it means for the future of the space as a whole. This is an interesting conversation, and I hope you enjoy it as much as I enjoyed recording it. If you're interested in learning more about Bitcoin and crypto, I highly recommend you listen to this episode. If you don't have a Bitcoin or other crypto-related background, then you should definitely check out this episode of the podcast. It's a must-listen episode for anyone with an interest in Bitcoin, crypto-currencies, or crypto-entrepreneurship. I think you'll find a lot of value in this conversation. -Vijay Pandey Founder of Zeba Bio and author of the book "Bitcoin and the Future of the Future" CEO and Founder of A6 Bio, founder of the venture capital firm A6 Biotechnology, Founder of the co-founder of Avantis Capital, and founder of Anecdotal Evidence, author, entrepreneur, investor, and speaker and author I talk about how he got his start in the biotech and crypto space, and how he became one of the most influential people in the space. How he got into Bitcoin and Bitcoin, and his journey in the process of becoming a venture capitalist Why Bitcoin is more valuable than gold? What's the best piece of advice I've ever heard of someone I ve ever heard? What s his favorite part of a crypto-coiner? Why it s better than you should be in the most important thing I ve got me to start a bitcoin or a better than someone in a game of a game that s more than $5,000? I ll tell you what I ve been looking forward to listening to this one? How much money you can I'm going to get in the next episode of this episode? & much more! Recorded in Bangalore, India, India's best tip for a good time, better than the most authentic version of this podcast than the one I ve listened to in the last episode of The Real Good thing I've listened to so far? (and much more? )
Transcript
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00:00:00.000All right, I've been looking forward to this conversation for a while.
00:00:03.000This is a conversation with a guy who I first heard of when he was rumored to be in the running for head of the FDA under Trump in his first term, which caught my attention because I was in biotech back then.
00:00:16.000And the more I got to know about him, the more I realized that we had some similarities in not only our backgrounds, but our paths and some of our interests, even if we have different views at times.
00:00:26.000Balaji Srinivasan, welcome to the podcast, man.
00:00:31.000So I think this will be the longest, certainly the longest conversation we've had.
00:00:34.000We've only started really speaking even over the course of the last year or year and a half.
00:00:39.000But I've known about you indirectly through folks in Silicon Valley, all of whom point to you as some type of Oracle figure, which got me intrigued by you.
00:00:48.000But Tell me what got you, you know, potentially, at least whether you were considering it or not, I don't know, although I'd be interested, were you actually considering being head of the FDA? But what got you to the point of even being in the running to be head of the FDA? And more generally, maybe a little bit of background for the listeners who may not be as familiar with your background as most of Silicon Valley is.
00:02:27.000And then most recently, bestselling author and Twitter personality.
00:02:31.000And so very similar career track to you, actually, in many ways.
00:02:34.000Also finance, biotech, authoring, social media, and in a sense, politics, but from the same Indian immigrant background.
00:02:43.000But parallel paths with you, I think, slightly more of an East Coast institutionalist path and maybe more of a West Coast path, but with a lot of similarities.
00:04:10.000And that's like a multi-billion dollar thing that invests in a lot of biotech stuff.
00:04:14.000And so we had an interest in basically educating people from around the world for free.
00:04:21.000And one of the things that I learned in my time in biotech, and you also, I'm sure, learned this, is the degree to which the regulatory state holds back innovation.
00:05:02.000And it shows that despite all the technological progress we've had in computers, some force has been not just holding it back, but reversing it in drug development, which is part of the reason that drugs have gotten so expensive.
00:05:16.000Irem's law is Moore's law spelled backwards.
00:05:19.000If you go and search that, you'll see that the cost of drug development has actually increased by multiple version of magnitude, like more than 1000x since the advent of the FDA. Sure.
00:05:29.000Which is part of the reason that everything is so expensive.
00:05:32.000That's just one very quantifiable metric, but lots of other things in healthcare have just risen through the roof.
00:05:36.000At the same time, you know, the cost of all the information is dropped to the floor.
00:05:42.000And I can, you know, get into all the details, but net-net is, I wrote a series of lectures at the Stanford course at 250,000 students, and it was online.
00:05:52.000And a bunch of venture capitalists saw it, like Keith Raboy saw it, and, you know, at Founders Fund, and other folks who are mutual friends of ours.
00:06:00.000And I think, you know, other folks, founders, including Teal, saw it.
00:06:04.000And so basically all of that, plus the fact that I actually built a biotech company, was what led to the whole FDA thing in late 2016. And the thing is, I was at the time turning around a crypto company and, you know, I had a loyalty to my investors and people there.
00:06:21.000I eventually successfully turned around and sold it to Coinbase.
00:06:24.000And so, uh, the call from Teal, uh, came in, in late 2016, like December, 2016. And so, uh, you know, net net without, you know, I don't want to like quote kiss and tell or whatever, but yeah, net net, you know, I've, I've, I could have been number two at FDA. It was offered deputy commissioner.
00:06:44.000Uh, but I ultimately decided not to do that.
00:06:47.000And, um, For a variety of reasons, but I think that gets back to, you know, you and I have a lot of similarities, but I think I'm on the margins, I'm more Mr. Outside and you're more Mr. Inside, which is fine.
00:07:05.000You kind of need both, like, you know, for example, Google couldn't have reformed Microsoft by, you know, having Sergey and Larry join Microsoft at the beginning, but by building something amazing on the outside, they sort of force Microsoft to reform.
00:07:32.000You know, which we'll actually come back to.
00:07:33.000Just on the FDA piece of this, because this is actually related, there's just a couple of things going on in the news that are actually relevant to things that...
00:07:40.000You and I are talking about right now.
00:07:41.000There was a recent FDA rejection of a therapy that had achieved, on its own self-described terms, two successful phase three studies, an MDMA-based therapy for a condition known as, of course, PTSD, you'll be familiar, post-traumatic stress disorder.
00:07:59.000And they went through and they designed the phase three trials exactly as it appears the FDA told them to design the trials.
00:08:06.000But it came before, and it relates to exactly the rise of bureaucracy, one of these things that's called an advisory committee.
00:08:14.000The FDA frequently holds these advisory committees where they have experts that supposedly opine on the data and tell them, you know, what they should or shouldn't do.
00:08:21.000The FDA is not bound by their recommendations, usually follows them, sometimes doesn't.
00:08:26.000Now, in my experience, and I've seen the industry evolve for a long time, I was a biotech investor, as you know, I built companies in the industry.
00:08:35.000What the IFTIA actually does is they'll often just use these advisory committees as a cover for what they otherwise want to do.
00:09:03.000I'd be sitting in the front row of these advisory committees taking detailed notes.
00:09:06.000I mean, that was the level in which I was immersed in this industry.
00:09:09.000And so I did not do that admittedly for this most recent advisory committee.
00:09:12.000But it smells a lot like a situation where the FDA served up what they call their briefing document to the advisory committee, which the advisory committee then opines on.
00:09:20.000Think of themselves as a bunch of experts who are actually just being wielded as pawns by the FDA. I've seen that happen before.
00:09:26.000And it smells like a situation where that might have happened here, where the advisory committee then recommended against the approval of this drug, which is exactly what the FDA came around to do.
00:09:34.000I view that as a bit of a travesty for a number of reasons.
00:09:37.000First of all, there's patients suffering from PTSD with very few options.
00:09:41.000But the basis for denying this approval was particularly fascinating biology.
00:09:45.000And you'll be at a level where you can easily follow this.
00:09:50.000So they say the trial was functionally unblinded.
00:09:54.000So usually the way you're supposed to do this is you have placebo, you have the drug, patients don't know which one you're getting so that the therapeutic effect is actually a real effect rather than a placebo effect where the patient believes they're getting the drug but they're not actually getting the drug, they're getting placebo.
00:10:09.000If they're blinded, the patient doesn't know which one.
00:10:11.000And then you look at the trial, the end of the trial, what they call the end point.
00:10:14.000That's the time at which the final measures are taken and see how the drug could perform relative to placebo.
00:10:20.000The FDA claimed here that actually the patients knew whether they were on drug or placebo, but not because the trial was misconducted, but because certain of the patients experienced euphoria, which is a side effect, so-called side effect, at least of MDMA-based therapy.
00:10:38.000And therefore, patients would know whether they were on drug or placebo and therefore could have a placebo effect that could have driven their treatment of PTSD, completely ignoring the possibility that the euphoria was part of the very mechanistic behavior of the drug that might have had an impact on actually treating PTSD itself.
00:10:55.000which is part of the hypothesis in the first place of using an MDMA-based therapy for the treatment of PTSD. And worst of all, the FDA would have predicted this.
00:11:04.000Anybody knowledgeable at the FDA around the development of this program would have known that was going to be a side effect of an MDMA-based therapy for PTSD before they agreed on a Phase III protocol that, to your point on Eroom's Law, added tens, if not hundreds of millions of dollars in development costs to a program like this one.
00:11:23.000And yet, all the public reads, I read the articles on this, even the so-called scientific press, which at least in the world of biotech is a joke, actually just reports this saying that there were certain trial irregularities because it's just a functional, it was an unblinding issue.
00:11:37.000So it's not an issue relating to costs and benefits of the therapy, but it's just that the trial might have been unblinded along the way, as though there was somebody who was actually peeking behind the veil and telling patients whether they were on drug or placebo.
00:11:50.000That's what the public is left with, without knowing that this alleged unblinding was a functional unblinding relating to the actual therapeutic properties of the investigational drug, which the FDA knew about and signed off on before they got cold feet and probably served up to an advisory committee, a bunch of briefing documents that got that committee to be the ones that said, hey, it's just the experts that told us we shouldn't approve this, therefore we're not.
00:12:13.000A lot of detail there, but it does lift the curtain on how this bureaucratic machine operates.
00:12:19.000And that's also just a really long way of saying Dude, I'm pretty pissed at you for not taking that job as Deputy Commissioner, okay?
00:12:27.000Because we need people who are willing to cut through that otherwise smoke of bureaucratic techno-talk, which is actually just a normative agenda, often masquerading in the guise of technocracy and scientific expertise.
00:12:44.000And I just think this, I think it was Lycos therapeutic.
00:12:46.000I have no connection to that company, no vested interest in it.
00:12:49.000Actually, I think that if J&J, by the way, which got S-ketamine approved for depression, the ketamine derivative for ketamine, really, ketamine period, basically.
00:13:00.000S-ketamine is just one of the enantiomers of ketamine.
00:13:03.000They got it approved for depression on far thinner data than I believe this company had for its MDMA-based therapy for...
00:13:12.000For PTSD, if this had been J&J, likely the same sponsor, playing the managerial game the way that larger pharma companies do, I have high degree of confidence that this would be an approved drug right now, but it's not.
00:13:23.000But anyway, a little bit of a rant on the news of the week, and I just shared the details because I know you weren't necessarily following this particular case.
00:13:30.000But I thought it's an interesting validation, as you see on an almost monthly basis with the FDA, of this unelected bureaucracy impeding innovation and really foisting cost onto a healthcare system that actually could use a step in the other direction rather than in the direction that drives up more health cost.
00:13:54.000And we should probably do, like, how much time you got?
00:13:57.000We should do a biotech podcast or something at some point because I actually feel we could kind of, okay, knock the ball back and forth for hours and hours.
00:14:17.000And I actually think, you know, if we, I don't know, if we prepared and we did 20 hours on this and went through a bunch of issues with your knowledge on the therapeutic side and maybe mine on the other side.
00:14:30.000But let me give my quick reactions on this specific, right?
00:14:34.000So there's kind of like three sort of separate prongs there, okay?
00:14:37.000There's like FDA's behavior itself, just what it is as an organization.
00:14:43.000There's how we should test drugs in the abstract if FDA didn't exist.
00:14:50.000And then there's also, like, what the, you know, whether I should have taken the thing in 2016 and what have you, right?
00:14:58.000Let me deal with these in, you know, just different order, right?
00:15:02.000So, you know, have you ever had, you know, this area of...
00:15:05.000You've got a jar of peanut butter, and you unscrew it a bit, but you can't fully open it, but you hand it to someone else, and you loosened it for them, and it's like a relay race or what have you, or vice versa.
00:15:17.000So I think, for example, in World War II, the Americans versus the Japanese, there's an island hopping campaign where they took certain islands in a particular sequence, and they couldn't have just gone straight to the home islands.
00:15:29.000They had to do them in a certain order.
00:15:31.000In the same way, I don't believe that a frontal assault on FDA in 2016 would have been feasible.
00:15:37.000I think the entire country and world had to go through the last eight years.
00:15:45.000Well, first, there was the true build-out of social media and then Elon taking over X, which actually gave a media that's upstream of FDA and actually can do investigations into FDA, which is completely new.
00:15:57.000That's within the last two years, and it's still having its consequences being felt.
00:16:00.000Number two is I think you had to have many people in technology and finance both make billions of dollars in regulated spaces, specifically Uber, Airbnb, crypto, fintech, right?
00:16:17.000more billions of dollars thwarted and destroyed by arbitrary acts of regulators which gave a financial interest both upside and downside for really paying attention to the details of regulation whereas before 2010 it was really taboo to even question whether a regulator could be bad right third you had to see i think um you know i almost i gave a talk 10 years ago where i identified And I think it started with local digital.
00:16:47.000For example, Google going after Google News and various establishment strongholds getting disrupted, local digital.
00:16:54.000Then you have local physical, which is Uber versus taxi regulations, Airbnb versus hotel regulations, is going after physical things, taxis and hotels, but they're locally regulated.
00:17:05.000Then you have federal digital, which is crypto, Bitcoin versus the SEC, right?
00:17:12.000And then after that is won, and we're on the cusp of winning that, hopefully, knock on wood, in some ways we have won parts of it where, you know, Bitcoin ETF has been approved, ETF has been approved.
00:17:23.000Even Kamala Harris is signaling Harris for crypto.
00:17:37.000That shows that at least they have to give lip service to it in the same way the Democratic People's Republic of North Korea has to pretend it's democratic, right?
00:18:04.000These are new regulatory agencies are trying to stand up, right?
00:18:07.000And the final frontier is federal physical.
00:18:10.000And I think actually drugs will come first and then energy and transportation are the very hardest and they're last.
00:18:15.000And the reason for that is drugs can be, you know, food, drugs, biotech, that can be reduced to individual, my body, my choice type arguments, right?
00:18:23.000Whereas But the energy and transportation, if it blows up, then it affects people in an area.
00:18:34.000In some ways, this externality effect or the effects on other people is a confounding variable that they use as a smokescreen to justify something that obviously they were doing anyway, because the My Body, My Choice is...
00:18:58.000Let's just use the FD as a case study example.
00:19:00.000It wasn't exactly what I was planning to go deep with you on today, but it doesn't matter.
00:19:03.000We can talk again another time and go deep on this today.
00:19:06.000So I think people miss this, who share our antipathy towards the administrative state.
00:19:14.000Miss the culture of that administrative state at the FDA. The people at the FDA do not believe they are there to exert surreptitious harm on the everyday citizen.
00:19:38.000And in part, we get into these discussions about the nanny state.
00:19:41.000We're usually talking about the entitlement state, the LBJ, post-LBJ great society, the welfare state.
00:19:47.000Payments to individuals for welfare and Medicare.
00:19:50.000That's what people usually think about when they mean the nanny state.
00:19:53.000And that is certainly an important nanny state that I believe needs to be over the long run dismantled in the United States.
00:19:58.000But the regulatory state is actually a subset of the nanny state as well, designed to limit the choices that individuals are able to make, not for even the benefit of the government or the governmental actors who implement it, but for the supposed benefit of the very people who are being limited.
00:20:17.000In the choices that they're able to make.
00:20:20.000That's, I think, the conceit at the heart of the regulatory state.
00:20:24.000And so, you know, you laid out a path and I think what I call A series of elegant excuses, which may be grounded in truth, of why we couldn't have begun the full frontal assault on that.
00:21:11.000Because you need to have an alternative that was a technologically, socially, you know, incentive aligned, better alternative that got enough people to its banner under many circumstances to actually fight and replace the existing system.
00:21:26.000And I think that is the big thing that the technologist worldview, the founder worldview has that the conservative worldview usually doesn't, which is you actually have to somehow build the alternative and then replace the existing system.
00:21:41.000And, for example, as hard as that is, even for a government agency, Elon built SpaceX and he's essentially replaced NASA, right?
00:21:49.000And so, to your point, and then let me get to the strategy on it.
00:21:54.000One of the things I talked about in this lecture from 10 years ago is FDA, and, you know, they omit the the, right?
00:22:01.000They don't call themselves the FDA. They call themselves FDA, right?
00:22:03.000FDA. FDA. It's actually one of these, like, obnoxious even conceits and tics.
00:22:14.000So FDA and SEC and FAA, they're set up for a very 20th century environment where, as you say, their whole conceit is they're protecting you from yourself.
00:22:24.000So FDA is set up to go and regulate Pfizer and Merck, and SEC is set up to regulate Goldman and Morgan, and FAA is set up to regulate Boeing and Airbus.
00:22:34.000But what FDA is not set up to do is regulate a million biohackers all taking their own health into their own hands.
00:23:21.000I mean, even when you think about that particular example of the SEC is protecting you from getting wealthy, it's just a very specific case.
00:23:30.000When I started Royven, so this is the biopharmaceutical firm I founded back in 2014, I first started, as many people do, with the friends and family round.
00:23:45.000I think if you're starting the biotech company, the actual normal way to go is actually just this series, fill in the blank, A, B, C, venture capital treadmill, which actually is very much the inside.
00:23:54.000I took what I thought was an outside path.
00:24:09.000I wasn't born into any kind of wealth, but had achieved Enough money to put my own money into the company, put millions of my own into the seed round, and had many other friends who, by the time they were seven or so years, at that point 2014, yes, seven or so years out of college, a good number of them had achieved financial success and were able to invest in the company as well.
00:24:30.000One of my friends who was one of my roommates for two years, Really wanted to do it.
00:24:34.000He didn't know the first thing about biotech, but he knew about me.
00:24:37.000And he said, okay, if you're starting this company and you're going in on it, I want to put, for him, he wanted to put, I think, something on the order of $100,000 into it.
00:25:21.000And the number one predictor factor of the success of a business at an early stage, I believe at least, is going to be the entrepreneur who's behind it.
00:25:28.000And he had what in the investment world you'd call investment alpha.
00:25:33.000That if you want to frame it in the terms of technical professional investing, he had exactly the thing that every investment firm aspires to.
00:25:40.000A deep understanding of what that business was or wasn't going to do in a way that was uncorrelated with the market.
00:25:46.000Yet he wasn't allowed to act on his own unique alpha and insight.
00:25:50.000Lost out the SEC and the relevant regulations in the securities laws, protected him from getting wealthy.
00:25:57.000And I do think that that is the ultimate case against the administrative state is that not that they're hurting the people who they're trying to regulate, but they're hurting the very people who they allegedly care to protect in the process.
00:26:13.000That's exactly what we see with the FDA as well.
00:26:15.000I mean, look at how many patients are suffering with PTSD that aren't going to have access to a therapy that they want access to, that a company in this particular case, I think it's debatable whether they should have to go through this type of elaborate multi-phase three testing.
00:26:29.000You have to get two phase three studies approved, not because a statute says so, but because the FDA says so, which is bizarre.
00:26:35.000Adds about 30% extra to the cost of the development of any drug.
00:26:38.000But this company jumped through both those hoops and the FDA decides at the end that patients who want it and the company is willing to sell it that's gone through the hoops that the FDA identified still isn't able to sell that to patients.
00:26:47.000They're, as you put it, you know, now protecting people from becoming healthy.
00:26:54.000And one of the biggest things is, I think, At this stage in the life cycle of this whole bureaucracy and this regime, I think it's a mistake to say that they mean to do well.
00:27:13.000And what I mean by that is not financially, because money is not everybody's incentive.
00:27:18.000somebody who is senior at FDA cares about power much more than money.
00:27:23.000And what I mean by that is, for example, somebody who's an academic and they give up a career in industry, they care about status more than money.
00:27:35.000So money is not the only axis along which people can sacrifice.
00:27:50.000And the reason for it is Carpenter is basically a pro-regulatory state liberal.
00:27:57.000But to his credit, he includes enough unexpurgated quotes from the executives that he interviews that you can sort of get the real story through the quotes.
00:28:10.000And It's a little bit like, you know, imagine like in the Vietnam War when hostages were being interviewed on TV and they would blink like I'm being captured like that and you could decode it through the Morse code, right?
00:28:23.000You can see from the quotes that Carpenter has, like he talks to Earl Robb, who is the CEO of Genentech.
00:28:29.000And Earl Robb says, you know, the FDA owns you body and soul.
00:28:36.000When they told me to fire an executive, I fired the executive.
00:28:39.000They basically are the number one gatekeeper.
00:28:41.000Once you realize this and you hear from the executives what it actually is to operate under FDA, then you realize, oh, like the entire pharmaceutical industry was basically gilded for like 70 years.
00:28:58.000And so our DNA kind of coming back in is a completely new species that they haven't seen in literally generations, which is like sort of the headstrong, self-confident executive.
00:29:10.000So I want to actually, your MDMA thing actually has like three really interesting branch points to go through.
00:29:16.000I just want to kind of touch on each of them.
00:29:18.000There's at least three areas we can touch on, which are the FDA, just what drug approval should be, and the regulatory state, right?
00:29:24.000So first, let's talk about the ideal world where FDA doesn't exist, okay?
00:29:29.000So we have a new jurisdiction, whether it's on Mars or it's in a new network state, like a new country we founded or something like that, okay?
00:29:38.000I think the first thing is to go back into history and learn about Banting and Best, okay?
00:29:43.000And you may have heard of them, Banting and Best.
00:29:46.000They came up with the idea for insulin in, like, I think it was 1921. And then they tested it on dogs, and then on themselves, and then on willing patients by 1922. And then they had scale production for the entire North American continent and the Nobel Prize by 1923. Okay.
00:30:05.000So that was like a time when pharma moved at the speed of software.
00:30:08.000You can check my dates on that, but that's very close, I think, right?
00:30:11.000Let me actually double check that because I love people.
00:30:44.000These are not fundamental constants of nature.
00:30:46.000They are bureaucratic hurdles imposed by man.
00:30:49.000And they should only be there if their benefits exceed their costs.
00:30:54.000But the thing is, if you go back to how all of these drugs that Banting and Best types developed, all the grandfather drugs that FDA included as a list, there's a bunch of drugs, if you go back, a lot of small molecules that FDA basically said, okay, they're fine because they were in wide use Before the, you know, the Pure Food and Drugs Act or the various acts that powered up FDA, there's a bunch of grandfather drugs before that point.
00:31:20.000They were not tested with double-blind, placebo-controlled trials.
00:31:38.000That's a huge difference because minimizing side effect size, even if that's even true, by the way, because it sometimes pushes it into something where you've got really terrible drugs in other ways, what they are scared of is their incentive structure is basically threefold.
00:31:53.000They don't want to get hauled in front of Congress.
00:31:57.000Their entire industry culture or the entire agency culture is shaped by thalidomide.
00:32:03.000And the number one thing you can be is...
00:32:05.000Which for people's benefit is a drug that was previously approved that was associated with birth defects, was later removed from the market, but Europe actually was much later to the punch than the United States.
00:32:17.000And the fact that the FDA stopped US harm relative to what had been seen in Europe is this classic example that every time somebody brings up a debate about the FDA, the first thing you're going to hear is thalidomide.
00:32:28.000And some guy is going to get up on a high horse and talk about that for about two hours Exactly.
00:32:34.000When you actually dig into the details, Kelsey actually was just holding back all drugs, and she suspected thalidomide of having neurological issues, not teratological issues.
00:32:58.000If you dig into it, it should not give you any confidence about the FDA's ability to actually predict what is or isn't going to be wrong in the first place.
00:33:04.000It's what Hayek called the fatal conceit.
00:33:09.000In tech, we actually have an analytical framework that you're also probably familiar with, the false positive and false negative rates, right?
00:33:18.000And so if you think of a regulator as a quote binary classifier, and this might be a little bit technical for people in the audience, but let me explain.
00:33:24.000Let's say you have a bunch of widgets coming on an assembly line.
00:34:04.000The most interesting thing about your observation there is actually your point about the incentive structures is that they are heavily incented to protect themselves against being exposed for a case where a drug has an unintended side effect that they didn't spot because they don't participate in the upside of a positive drug that has a massive effect, but they occasionally face the personal, often very personal downside of approving a drug that had an unintended side effect.
00:34:29.000That's what their incentive structure is.
00:34:31.000But actually, just to that point, I think it's a great point you made, and I think your point about the false positives and false negatives and where the incentives lie bolsters that.
00:34:40.000Actually, in the few instances, though, where a company has taken it into its hand to publicly make sure that they create the same risk structure for those FDA officials being hauled in front of Congress for why they didn't approve a drug, that patients were dying from a disease or suffering from a disease that otherwise wasn't being treated, cured or addressed, they then respond to that incentive structure in the other direction.
00:35:02.000It was the incentive structure of the bureaucracy all along, not some type of fixed point philosophy that was the right way for deciding whether or not drugs made it to market.
00:35:52.000But let's just say, though, it's a very informative and educational movie.
00:35:56.000And it's actually, as a meta-meta point, it's unusual because it's one of very few examples in Hollywood where you have a regulator or a bureaucrat or an NGO or a journalist who's a bad guy.
00:36:28.000But having gone into the movie theater, we walked out about 20 minutes in.
00:36:32.000It didn't get into the underlying content of it all.
00:36:33.000It was just like a glorified lionization of the journalist as the person who's actually going to save the country when, in fact, the journalists at issue are nothing more than an artificially deified version of a New York Times reporter.
00:36:51.000That movie was an unintentional own goal, in my view.
00:36:55.000Because it was actually it revealed that the journalists were actually not neutral, but literally on one side where they were the ones who I mean, they were literally taking like a gore shot of the president shot at the end or whatever.
00:37:20.000And they projected themselves as, oh, they're the diverse and multiracial journalists or whatever against the evil white guys in the military and the Republicans.
00:37:33.000They didn't have the courage to actually You know, show it be red versus blue.
00:37:39.000The reason they made it California and Texas is to make it seem like, oh, it was a president who was above democracy, so even Texas broke away.
00:37:45.000You know, the same kind of trick they always try to pull, right?
00:38:39.000Because they were denying life-saving drugs immediately.
00:38:43.000on death's door, PWH, HIV, AIDS, on death's door, and they were going to die anyway.
00:38:47.000So why not let them take an experimental drug?
00:38:51.000And in fact, there were people who had, you can Google this, but if I die, bury my body on the steps of the FDA, right?
00:38:58.000Like those kinds of t-shirts and stuff.
00:39:00.000And I think somebody should make a movie about this called FDOA, FDA dead on arrival, right?
00:39:09.000Where essentially every drug that FDA has approved really has the same story as the HIV AIDS The difference is that the victims are typically not unionized in the same way.
00:39:21.000But social media, though, they could be.
00:39:23.000And what I mean by that is every time you've got a drug that is approved and then afterwards you see a decline in morbidity and mortality, Mm-hmm.
00:39:37.000And during that period of when it was in queue to be approved, that delta in morbidity and mortality is all on the head of FDA.
00:40:41.000And now you've humanized that statistic where you actually have somebody whose life would have been saved if they could get that experimental drug.
00:41:04.000And this is not just of this particular solution, but I think a lot of the form of your solutions in which they emerge, which I find fascinating.
00:41:11.000I'm talking to you because I find you incredibly smart and fascinating and bold.
00:41:16.000But I think the form of a lot of your solutions, I think you could even say some...
00:41:20.000About the relationship between holding the Fed accountable with Bitcoin.
00:41:23.000I agree with everything you said, but you put too much on the shoulders of Bitcoin to solve the world's problems.
00:41:27.000You put too much on the shoulders of the Google Ads here to solve the world's problems.
00:41:31.000You put too much on the shoulders of the idea of the existence of nation state alternatives to somehow fix the existence of actually what exists within the nation state.
00:41:39.000But anyway, on the point of the Google ad point, you humanize the story.
00:41:44.000The bureaucracy is actually very good at this, right?
00:41:46.000Even J. Edgar Hoover's FBI, and I think the FDA shares this in common too, is actually very good at its own PR. It's one of the things they master the most.
00:41:53.000So they'll bring back the thalidomide story times 10 in a way that the decentralized mechanism finds much tougher to compete with.
00:42:00.000In a world at least in which people, yes, it is a post-Elan, Twitter and beginning of decentralized world, but still one in which the native human instinct is still to trust that which is centralized.
00:42:12.000That's why the mainstream media still has such a main impact on the direction of elections, even in a world of social media.
00:42:17.000That might be different 40 years from now than today, but that's where we are today.
00:42:20.000I want to actually bring up the counterargument to what you and I both say.
00:43:46.000So viewers may not know this, but if you Google FDA harmonization, FAA harmonization, SEC harmonization, what the U.S. government wants to do is they want to take their laws that some unelected bureaucrat in Silver Spring, Maryland wrote, tenured after two years, you don't know their name, but they want to take their rules, their regulations, and export them to the whole world.
00:44:07.000In much the same way, let's say a small country in Eastern Europe might use...
00:44:13.000Let's say a small company uses Facebook login rather than building their own login.
00:44:17.000A small country might use FDA regulation rather than building their own regulation.
00:44:27.000And actually big companies, you know, Pfizer and Merck also love it because they get their approval in the US and then they can just export it everywhere because they're all backwards compatible, right?
00:44:37.000And so there's a rationale for why government and business work together on trying to smooth out the whole world and make it just...
00:44:43.000It's also a way that the EU gets to free ride on the US, by the way.
00:44:54.000So now, however, thanks to the fact that the reputation of the regulatory state is just cratering among a critical mass of tech and finance guys both here and in the rest of the world, the SEC thing, just seeing Gensler – The way the bureaucracy lies has never been more obvious to a larger group of billionaires than what SEC is doing, right?
00:45:17.000All these tech founders, all these millionaires, all these venture capitalists, people who control large pools of capital as well as people who don't control large capital but are founding the next big thing, are all seeing how the SEC lies and they can extrapolate that to FDA and everybody else.
00:45:30.000Okay, so what does that mean concretely?
00:45:32.000How do you beat FDA? You have to have, for example, you take the existing exit paths.
00:45:40.000There's like right to try laws, which actually Trump just talked about on the podcast he just did with Elon or the Twitter spaces rather, X spaces.
00:45:48.000So right to try laws which allow you to opt out of FDA at the state level.
00:45:52.000Yeah, I want to say a word about this, though, because this actually just goes into the story about you shed light on an important aspect of the FDA bureaucracy.
00:46:01.000Let me just use that to shed far more light.
00:46:03.000So that's considered to be one of the checks, right?
00:46:05.000President Trump signed into law the right to try legislation as well at the federal level, which gives you the, what it sounds like, right to try something even if the FDA has not approved it, especially for serious or life-threatening conditions.
00:46:17.000That's a particularly sympathetic case.
00:46:20.000Here's the dirty little secret in the farm industry, okay?
00:46:24.000Anybody in the farm industry, as long as they're convinced they're not going to be recorded in a conversation like this one that you and I are having.
00:46:30.000They don't want to cross FDA by using those.
00:46:41.000Because the FDA hates the existence of the right trial legislation and Yes.
00:46:46.000They lobbied against it when President Trump wanted to pass it.
00:46:47.000So any company that makes its drug available to a patient knows they're going to face the wrath of the FDA, even on another product that they bring before that same FDA. Yes.
00:47:06.000Which means that passing these other laws that sidestep them, whether it's the FDA, we could talk about other agencies as well, Is an incomplete solution at best counterproductive at worst because it appeases the public to make you think you have the option when you don't?
00:47:19.000Dismantling the bureaucracy is the only correct answer.
00:47:21.000Okay, so I half agree and I half disagree, and here's why.
00:47:25.000You want competing systems as well, of course.
00:47:58.000And I'm not sure where the status of that was, but that was the third exit pathway.
00:48:02.000A fourth example, a big one, is off-label prescription.
00:48:06.000And this is something where, because AMA, the doctors, have a strong enough lobbying group, they've managed to preserve that right for doctors.
00:48:14.000But what FDA does is it cracks down on the poor pharma rep who cannot even hand a doctor a paper that says...
00:48:22.000Drug A could be used for purpose B, because if so, that's off-label marketing and go directly to jail.
00:48:27.000And in fact, there are some people who are jailed for this kind of thing, and there's a whole free speech case about it and so on, if you recall that.
00:48:35.000And so- The point is that those are like four examples, and there's more I can probably think of, that are...
00:48:42.000Oh, and the fifth is medical tourism, like traveling outside, like Kobe going to Germany for stem cell treatment, right?
00:48:47.000So those are five examples of exit, right to try, LDT, The compounding pharmaceuticals, if it's still open, the off-lil prescription and medical tourism that are always over outside FDA jurisdiction where you're getting better treatments, right?
00:49:06.000And what those do is they show the presence of an alternative and they start to build.
00:49:10.000I mean, you have a lot of venture-backed companies in some of these areas, right?
00:49:14.000Once you can make financial returns there, you start taking that aperture, you start widening it into a tunnel And now there's a reason for it to exist.
00:49:22.000You take the daylight and you just crank it open.
00:49:27.000It's very different than going through the front door and instead of taking the little ply to the open door crack and cracking it open, you take a jackhammer to the bureaucratic apparatus itself.
00:49:39.000And just start going, which is why I ran the president, by the way.
00:50:01.000Well, you know, so let's just close on this because, okay, A, if you're cool with it, I want to talk to you again in a different conversation about the UK, about the future of the nation state, about competing views on nationalism, on your post-national vision.
00:50:17.000Let's save that for next conversation to do with justice, because we spent a lot of time on the FDA, which I think was fun, actually.
00:50:23.000Talk to somebody who knows as much as you do to be able to dive into this kind of conversation we had.
00:50:29.000But on the administrative state, I actually see a fissure in the conservative movement right now in our respective commitments to even taking on the regulatory state.
00:50:42.000So right now, it's an interesting moment on the right.
00:51:29.000I think that this has deep implications for what you think about the role of the government should be in setting what you might think of as industrial policy, right?
00:51:36.000It still requires a bureaucracy or decision maker to be able to decide which industries are or aren't favored.
00:51:42.000It has implications even for the debates around immigration and some other issues that I think the right is grappling with.
00:51:47.000But at the core of, I think, the future direction of the American right, certainly, is what is our level of commitment to actually dismantling that federal bureaucracy versus reconstituting it?
00:52:00.000And I think that that's something that hasn't yet worked.
00:52:02.000Quite percolated to the surface, but is brewing, is really brewing with, I think, some vigor, a debate beneath the surface that will define the future direction of the Republican Party.
00:52:13.000And in closing, I know somebody who's just a deep thinker.
00:52:16.000I'd love your perspective on certainly what I see as that brewing debate ahead.
00:52:52.000This is then a different graph, which is showing GDP in 2020. And I can get into why.
00:52:56.000But in 2020, Biden counties had 71% of GDP. Trump counties only at 29. And that's exacerbated.
00:53:04.000That's amplified since 2020. It might be 75, 25 now, like a three to one advantage for blue in terms of GDP. There's an even more strong advantage in academia.
00:53:15.000I've got another graph, even better than this one, but I can show you.
00:53:18.000It's something like between 60 to 90% of professors in various disciplines are blue, and then 95% of journalists are blue.
00:53:26.000So what that means is that the power level of blue Is extremely high in the US. They control the US institutions.
00:54:33.000It's insane in some ways that they can contend for the presidency and have some control of the Supreme Court and whatnot.
00:54:39.000Because all Democrats do on every level, and this is a whole talk we could go through, The blue business model is to take control of some government agency and funnel the money to Democrats.
00:54:50.000Example, the homeless industrial complex.
00:55:56.000Department of Homelessness budget went from $200 million in 2016 to $1.1 billion by 2021. But the SF homeless population also skyrocketed during that time, and this is probably an undercount.
00:56:09.000Of course, there are justifications that they'll need it to be able to catch up, as opposed to even positing the possibility of a causal relationship in the other direction.
00:56:57.000And not just to the administrative state, but to the problem even of the dilemma of what the modern nation actually represents.
00:57:04.000We can even weave some of our observations of what's going on in the UK into that.
00:57:08.000But I love that you are somebody who is smart, unafraid, and outside of the usual partisan boxes or boxes in general that people try to put you into.