James Fishback is an investor at a prominent hedge fund, but he s also a citizen. In this episode of the podcast, he talks about what it means to be a capitalist and a citizen, and why he thinks it s important to have a system where everyone's voice and vote counts equally. He also talks about the importance of free speech and open debate in the public square, which are two of the most important things we have in common as Americans, and the role that they play in our identity as capitalists and citizens. And he explains why he believes it s a good idea to have open debate and discourse among the next generation of Americans. You can read the full interview with James Fishback on his new book, Some People of the People by David Einhorn, which is out now, if you're interested in reading it. It's available for purchase on Amazon, and you can get a copy of the book for free on the Kindle, iBook, or Paperback, and it's also available on Audible, Audible and Audible. If you don't have a Kindle device, you can also get a free eReader app from Amazon so you can read it on any good eReader device with a modern goodie box, for as little as $1.99. Thanks for listening and sharing it with your friends and family! Timestamps: 1:00:00 - What does it mean to be an American? 2:30 - What is a capitalist? 3:15 - What are the benefits of free market capitalism? 4: Why is it important? 5: Why does it matter? 6:40 - Why are we should have a democracy? 7:20 - What it matters? 8: Does it matter what we should we have an equal say? 9:30 10:00 11:10 - Is it better than a free market system? 13:00 What is democracy a good thing? 15:00 How do we have a free speech system in America? 16:00 Why do we need to have an open debate? 17:00 Is there a democracy in America a right and fair process? 18:00 Do we have the right to choose? 19:00 Can we all be a better country? 21:10 22:00 The role of an American identity in the process of democracy in the American experience?
Transcript
Transcripts from "Truth Podcast - Vivek Ramaswamy" are sourced from the Knowledge Fight Interactive Search Tool. You can also explore and interact with the transcripts here.
00:00:25.000I've started a number of companies along the way.
00:00:27.000And the company I most recently started was an asset management firm called Strive to compete against the likes of BlackRock and Vanguard and others who were promoting ESG values in capital markets.
00:00:39.000But that gave me a front row seat to seeing what one kind of voting looks like.
00:00:45.000The way voting works in the market is that the person who has the most dollars gets the most votes whether that's a consumer that decides which product rises to the top Whether it's a shareholder that gets to decide who gets to be elected on the board of Apple or in the board of Chevron or Exxon or any other company, it's not that everyone who's a shareholder of Exxon gets an equal say.
00:01:08.000No, it's the fact that somebody who holds the most shares that's invested the most capital in Exxon has that say.
00:01:15.000That's just the way capitalism works is it's a $1 one vote system and that's okay when you're talking about which products rise to the top.
00:01:24.000When which ideas at a shareholder ballot rise to the top.
00:01:29.000But in our body politic in a constitutional republic like the United States underpinned by a democratic process, we use a different system.
00:01:41.000That shouldn't be adjusted upward or downward by the number of dollars you control in the marketplace.
00:01:47.000That's actually one of my main issues with the rise of so-called ESG and stakeholder capitalism trends in corporate America.
00:01:55.000Is that we're now using the dollar system, not just to say which products get sold, whether to invest in an R&D facility or a manufacturing plant.
00:02:03.000No, we're now using the $1 one vote system to determine which ideas make it to the top, whether to correct racial injustices through quota systems or some other means, whether to fight climate change on the basis of a method that creates for higher consumer products for everyone or some other means or whether to fight it at all.
00:02:24.000These are ideas that are settled in a constitutional republic through free speech and open debate in the public square where everyone's voice and vote counts equally.
00:02:38.000I'm not saying that if you're a capitalist, say Larry Fink, the CEO of BlackRock, that you can't engage in that.
00:02:44.000You can in your capacity as a citizen.
00:02:50.000Which is different from using your corporate platform to do it as a capitalist.
00:02:55.000And I think that's deeply personal to me because I've been a capitalist.
00:02:58.000I've succeeded in the system of free market capitalism in America as an entrepreneur, as an investor.
00:03:04.000I've also pursued my journey as I am now in pursuing the US presidency as a citizen.
00:03:08.000And I think both of those are part of our identity as Americans, not just somebody who's pursuing self-interest through the system of free market capitalism without apologizing for it.
00:03:17.000But we're also citizens that each have our own civic duties.
00:03:21.000And one of those identities as a citizen is grounded in this idea of free speech and open debate as the way we settle our political questions.
00:03:29.000That's one of the things we share in common regardless of what our beliefs are from controversial topics ranging from abortion to affirmative action.
00:03:37.000What we share in common in this country is a commitment to the idea that we settle those differences through a civic process where we're all equal as citizens, each having the right to express our own opinion so long as our neighbor gets that same courtesy in return.
00:03:53.000That is part of what it means to be American.
00:03:57.000It's also why I'm excited about today's guest on the podcast, James Fishback, who, like me, I think has had a career as a capitalist.
00:04:06.000He's an investor at a prominent hedge fund, as you'll hear from him soon.
00:04:10.000But he's also somebody who's dedicated a significant portion of his time to starting a nonprofit that actually fosters, who would have ever thought, open debate and discourse and dialogue amongst the next generation of Americans.
00:04:23.000He's not doing that in his capacity as an investor.
00:04:26.000He's doing that in his capacity as a citizen.
00:04:28.000And that speaks to me because American identity isn't just one of those things.
00:05:10.000There's some interesting lessons in there.
00:05:12.000He was actually quoting Abraham Lincoln, as you may well know.
00:05:15.000It was a famous Abraham Lincoln quote that he, you know, riffed on as the title for his own book as an investor in, you know, capital markets.
00:07:33.000My mom came from Columbia in South America in the early 1990s, married my dad, who for the past 10 years has been a county bus operator in Broward County.
00:07:43.000And so it was really hard to go to debate tournaments to get the money, but then to have parents take off six, seven, eight hours to judge these debates.
00:07:51.000So you aren't super – you aren't particularly well off.
00:07:54.000How would you characterize lower middle class?
00:07:55.000Lower middle class, working class family.
00:07:57.000Privileged in the same sense that you were to have two loving parents that gave me – that instilled those values, not just of grace and respect, but of civic disposition to care so deeply about the country that's given them so much.
00:08:54.000and the same quarterly letters that so many investors across the world look forward to reading every quarter.
00:08:59.000And I messaged him and I said, this was in the spring of 2019.
00:09:03.000And I said, I think the Federal Reserve is about to cut interest rates because of what was going on with the trade tensions and some of the deindustrialization that we were seeing.
00:09:11.000And And kind of the Fed strategy had changed, right, where they were hyper-concerned about financial markets.
00:09:16.000So I sent him this message and to his credit, we went back and forth.
00:09:19.000We didn't agree on the first trade, but we came back a couple weeks later.
00:09:22.000He put the trade on and – I was blessed to be in a relationship, a partnership with him for two years, advising him on these big macro events that I had done as a macro investor.
00:09:33.000While you were still your own macro investor at your fund?
00:10:06.000It was the Florida Forensics League Varsity State Tournament.
00:10:08.000I was there with two students and they were competing and I was their coach and mom was there as well, one of the students.
00:10:14.000And I'll never forget, you know, it was like the world.
00:10:17.000No one really knew what was going to happen a week or two later.
00:10:20.000But the kids in that moment were having so much fun, were debating and having a great time.
00:10:24.000And then three months later, these tournaments were online and I judged a local tournament that was online in May.
00:10:31.000But what was amazing, Vivek, was even though the expenses of running a debate tournament collapsed overnight, there's no catering, there's no need to hire buses to rent out rooms, you needed a Zoom Pro account, which is 50, 60 bucks a month.
00:10:45.000The big institutions, the big Ivy Leagues, Harvard, Yale, Yale, you're familiar with both – They run these big debate tournaments.
00:10:53.000They were still charging students, the same students that I was coaching in Miami Gardens and low-income communities, hundreds of dollars to participate in a virtual tournament from their couch.
00:11:43.000So, this was about the time that Incubate Debate went from being a debate camp, which it was in the summer of 2019 at the University of Miami, the only free debate camp in Florida.
00:11:57.000And then over 2020, over that summer, we had to do the camp online and – We then realize, wait, if Harvard and Yale and all these big places are hosting tournaments and still charging kids hundreds of bucks— We should just get a Zoom account and host tournaments.
00:13:25.000On a separate note, what he's done over the last couple of years, I mean, his whole life, but he's really, I think, embraced the engaged citizen idea, right?
00:13:32.000Speaking up on issues, I think of one in particular, right?
00:13:35.000The sexualization of young people on Pornhub, right?
00:13:37.000Where he stepped up and he pressured companies like Visa and said, you can't be processing payments where you've got young women who are being exploited on these pornography sites.
00:13:54.000Whether it was from the Cato Institute, the American Enterprise Institute.
00:13:57.000So, you used the virtual thing to your advantage to say that we're actually just going to get super high-end, you know, professional debate judges that could be a draw for students and others, but didn't charge the students.
00:14:19.000Now, the judging breakdown, usually at a legacy, what I call legacy debate outside of what we do, is it's probably 60% parents and 40% ex-debaters who are now college students.
00:14:29.000And that's problematic because they bring an enormous bias.
00:14:32.000And I got to tell you, they don't even hide it.
00:15:03.000There are counties like Broward County, which are never going to vote for a Republican, and then counties like Holmes County, which voted 80% for Donald Trump in the last election.
00:15:12.000I now live in the Panhandle in Madison County.
00:15:14.000So when we pulled from all over the state, which is what the virtual format allowed us to do, we didn't necessarily have to assign sides because we got folks from the deep red America first counties and folks from the kind of Broward and Miami-Dade or Hillsborough County who just were naturally on different sides of important issues.
00:15:33.000We didn't want to compel people, right?
00:15:35.000On issues like you talked about affirmative action, it would be awful to compel someone to say something they don't believe.
00:15:40.000Now, we always encourage them, by the way, to entertain what the other side is going to say, to deeply research what they may bring up to have counter arguments.
00:15:47.000But I fundamentally don't believe in compelled speech.
00:16:11.000You take on a position that you don't take on.
00:16:13.000I think that – You could argue it's an exercise in building your skill set regardless of whether or not you're embracing it, but you're leaning in the direction of allow people to speak for what they're passionate about, and you're likely to get enough people on both sides to make the debate tournament work.
00:16:30.000So anyway, so what would you say that – like what was the impact that you saw that this has had on kids who then graduate and go to college?
00:16:40.000Do you have a good sense for – Whether this is cultivating some type of civic culture amongst those kids.
00:16:50.000I'm actually really curious because that's one of the core, you probably know one of the core premises of my campaign is reviving civic identity in this country.
00:16:58.000I think a commitment to free speech and open debate is a really important part of that.
00:17:03.000It's not all going to be done through government.
00:17:04.000In fact, I think very little of it is going to be and ought to be done through government.
00:17:29.000You'll remember – Democrats, Republicans – I mean, we can obviously go back to the 70s, but even go back 10, 15 years, we didn't have – there wasn't this clash that they are your enemy.
00:17:39.000And when Donald Trump came down that escalator in 2015, it seemed like that was the spark for so much tribalism.
00:17:50.000And you're getting to this day, I think, to separate the Legacy Debate League, which is sort of the National Speech and Debate Association and what Incubate Debate is doing in Florida.
00:17:59.000The guys over here, it's deeply problematic.
00:18:03.000What they've done is they've replaced the commitment to free speech and open dialogue with an obsession and infatuation with Marxism, anti-racist ideas, which are, of course, racist.
00:18:15.000And they're really trying to push out and force out ideas.
00:18:19.000And the best way to do that, by the way, to force out an idea is to tell someone that they lose simply on the premise that they brought up an idea that you oppose.
00:18:28.000And so one example of this is – and by the way, this is all public information.
00:18:35.000The judging – the debate community has something called a paradigm.
00:18:38.000And the idea is – and originally the way it was supposed to work was if you and I were to go to a debate tournament together and compete against each other to debate maybe affirmative action, we would log on to this judge paradigm.
00:18:49.000It's a website where we would see who our judge is 30 minutes out before the round, and we would see what preferences do they have.
00:19:12.000It's really sad because you take these young impressionable people who are here because of their commitment to free speech and open debate and you close that door.
00:19:21.000I mean, high school debate is supposed to be the epitome of free speech and it's really shut it down.
00:19:29.000I'll read an example to you verbatim because you can't make this stuff up.
00:19:32.000So this is from the Stanford debate tournament.
00:19:36.000A lot of stuff happened in Stanford these days.
00:19:37.000And this is a quote from a person's paradigm.
00:19:41.000She says, I would hope I wouldn't have to say this, but given our political climate, I have no choice.
00:19:46.000If you are discussing immigrants in the round and you describe the person as illegal, I will immediately stop the round, give you a loss, give you a stern lecture, and then talk to your coach.
00:20:30.000And Stanford is actually a country – is a university that also says, even when you're describing our country, they discourage you to use the word American.
00:20:41.000If you don't want to say American and part of what it means to be American is to believe in the rule of law, then you would be free to at least engage in the idea who would have ever thought that it is illegal to cross the border when the law says you can't cross the border without the government's ability to let you in.
00:20:59.000In a certain sense, that is anti-American.
00:21:02.000And then they say, don't say American.
00:21:04.000It's funny that you and I are having this conversation.
00:21:06.000We're both the kids of immigrants who came to this country through the front door, but without getting into the rabbit hole of the illegal immigration issue on the substance of it, wherever you are in the substance of it, it's a sad thing to say that we can't debate that anymore in this country.
00:21:35.000That shouldn't be the standard anyway, but you're saying it's doubly ridiculous.
00:21:38.000It's doubly ridiculous because even the New York Times, which does not have a great track record on free speech, is saying that illegal immigration is fine.
00:21:44.000Yeah, but not yet is the point because this is the bleeding edge that tomorrow will change what the New York Times itself says.
00:21:49.000This is just at the vanguard of that movement, right?
00:21:52.000So this is a leading indicator, not a trailing indicator.
00:21:57.000You know, I think that – I'm trying to think about – let's say somebody who has a different point of view than you and I who were here, what would they say?
00:22:04.000A lot of what I get is, well – This isn't about free speech or the Constitution because the government isn't telling you you can't say that.
00:22:14.000It's just a privately hosted debate forum at Stanford.
00:22:18.000So if you don't like that debate forum, have a different forum, but the First Amendment is still respected.
00:22:29.000And so I think that's the common kind of refrain that I hear in this type of setting is I think the thing that that misses is that free speech and even the First Amendment in this country, it's not just about protecting your rights.
00:22:48.000I mean, the way the Founding Fathers saw it was that this is part of a culture, a founding culture of a nation, a culture in which we settle our questions through free speech and open debate because that's what we as a nation and as citizens of this nation are committed to.
00:23:04.000And that's something that you undermine, even if it isn't the government that does it, you know, so-called big tech censorship, though I don't call it that because that largely is government tech censorship now.
00:23:13.000Anyway, but the cultural infringements on free speech...
00:23:20.000That's what we lose, is even if it's not a technical First Amendment violation, it runs afoul of the principle, the culture that's codified in that First Amendment.
00:23:30.000And I think that that's part of how even if you're Stanford University and you're not technically the government, you accept government funds, but you're technically not the government.
00:23:38.000Even if you put the federal funding piece of it to one side, you're still destroying the essence of what the country is and what's codified in that First Amendment.
00:23:46.000I think that's what people miss sometimes.
00:23:58.000And, you know, we started out with that first virtual tournament.
00:24:01.000And we had to do virtual, you know – Obviously, because of COVID, it was still very difficult in the fall of 2020 to convince students to come together, to convince parents.
00:24:09.000But at the beginning of 2022, we had our first in-person tournament.
00:24:15.000And this was in a rural county called Glades County.
00:25:53.000As opposed to the question of how it's good.
00:25:55.000It actually has a big impact on the culture, even in the culture amongst conservatives, because that's a big part of why, I believe.
00:26:03.000Affirmative action is one of these sacred cows you're not supposed to touch.
00:26:06.000There isn't a Republican presidential candidate in US history, even in recent history, who has pledged, as I have, to end affirmative action in America.
00:26:15.000I pushed the Trump team on this, including the policy team as to why they didn't take this on.
00:26:18.000They said it's not a political hill they wanted to die on.
00:26:21.000I disagree with that, but you can understand why.
00:26:23.000If the scope of debate, I mean, in some ways, the way a debate question is posed defines the Overton window, right?
00:26:31.000Okay, here's one end, and here's the other end, and you can have at it.
00:26:34.000But right now, the Overton window is the idea that you can debate how affirmative action has helped Black Americans, but no further than that.
00:26:43.000It's interesting, and it also actually highlights to me how you can use This is sort of a deeper analogy here I'm about to make, but interrupt me if it doesn't make sense to you.
00:26:59.000I think the Trojan horse model that the illiberal left has used for the last half decade, which is to take some of the values that People who are either adherence to classical liberalism or conservatism embrace.
00:27:19.000Let's take free speech here as an example.
00:27:21.000But to co-opt that, to advance an agenda that's antithetical to the thing that it appears, they actually embrace.
00:27:30.000So we see this with free speech, we see this with capitalism.
00:27:32.000But on the free speech side, so we're having debate.
00:27:39.000And so it looks like it checks the box of believing in free speech.
00:27:43.000But the way the question is itself framed involves a presupposition, an answer to the question, asserting a conclusion that almost uses the appearance of debate to legitimize that fact.
00:27:57.000When in fact, there was no space for debate in the first place.
00:28:00.000And that's a big part of what we see going on with so-called capitalism as well.
00:28:06.000My most recent career as a warrior against ESG through the market is to say that, okay, you guys said you want a shareholder primacy and free markets determining how people actually make corporate decisions.
00:28:22.000We'll just say that we're using the free market when in fact it wasn't the free market at all.
00:28:27.000It was government tilting the scales of whether or not particular asset managers won mandates from large pension funds that then required implementing agendas through the back door that couldn't be implemented through the front door on emissions caps or whatever.
00:28:38.000But again, conservatives have their tongue twisted and not because, wait, that's the free market now saying that we are adopting these environmental social agendas.
00:28:46.000Same thing here is, okay, we're having debate.
00:28:48.000Guys, we're having an open debate, but the way the question is framed itself belies the actual value you're supposed to protect.
00:28:54.000And I think that's – it's an interesting move.
00:28:57.000I mean before we sort of complain about it and enter despair, it's just interesting to observe.
00:29:04.000That's sort of a tactic of I think the modern progressive left.
00:29:06.000I think a lot of the Chinese agenda in the United States I think makes a similar move is, okay, if you can't beat them – Act like you're joining them.
00:29:16.000Embrace the things that they fetishize, but turn it into a golden calf, which allows them to worship at what ends up being a hollowed out husk of itself, a false idol.
00:29:24.000And whether that's free speech or whether that's capitalism, we're able to trick the other side into actually bowing at the temple that they think they're bowing at, but they're actually bowing at our temple instead.
00:29:52.000I've spoken to so many students who just left debate as a result of this, as freshmen and sophomores in high school, because they couldn't stand being in an environment where free speech was constantly under attack, whether it was the topic that was being posed, the way it was framed, or whether it was the judges, right?
00:30:10.000We're talking about if you use the term illegal immigration or one judge said to a student in a paradigm, I'm open to hearing conservative views, but please be careful.
00:32:22.000I mean, let's just take the argument for the other side.
00:32:24.000I vehemently reject it, but let's just get it on the table where they'll say something like these black kids grew up in tough circumstances in a systemically racist system and that we need to build up their self-confidence so that they then have the self-confidence to actually compete in a system but let's just get it on the table where they'll say something like these black kids grew up in tough circumstances in
00:32:46.000And, you know, the counter-argument would be, well, you're not going to permanently make it fair because the world works as the way the world works is rewarding producers – Now, one counterargument rebuttal to that is they'll say, no, no, no, we're actually going to make the whole world fair and that's why that system of affirmative action pervades the entire economy.
00:33:03.000But suppose that doesn't work and that results in national decline.
00:33:06.000Some other people who would say that, no, no, no, this shouldn't last forever, but we need to do it.
00:33:10.000So like the more so-called reasonable people here on the other side would say that – Yes, it's true that we can't have an economy that persistently works this way.
00:33:20.000But at a younger age, you need to give those black kids at least the self-confidence of what it feels like to win.
00:33:26.000So even if they wouldn't have won according to blind criteria, you nonetheless need to give them the experience of winning to give them that self-confidence.
00:33:38.000I know what my response to that is, but I want to hear yours.
00:33:40.000What would you say in response to that?
00:33:42.000What I would say is do what Incubate Debate is doing.
00:33:47.000Go into these schools, work with the teachers, work with the students, host workshops to give them the confidence so every student can win on their own merit.
00:33:59.000It is lying to them, and they're deluded, and they're going to end up creating this tension between them and other students where they're going to end up On the outs.
00:34:21.000Diversity, equity, inclusion webinar every quarter and that kind of tells our judges, right?
00:34:28.000Wink, wink, racial equity, affirmative action in your judging decisions than it is to actually invest resources and boots on the ground to visit these underserved Title I high schools all across this country and work with the students to get them to that level where they can truly win on their own merit.
00:34:42.000And they don't have to worry, did I win because the judge had some agenda?
00:34:46.000There's deeper questions here where I think that's very noble.
00:34:50.000And I think that that is something I would get behind.
00:34:55.000Thank you for what you do and I'm pretty excited about it.
00:35:00.000I think the reality is that's still, to me, a bit of a rosy picture because these kids did not grow up, many of them, in the family circumstance that you and I do.
00:35:10.00070-plus percent of black kids are born into single-parent households.
00:35:16.000Unlike you and I, who enjoyed the ultimate privilege of having a family foundation with two parents who valued education, that's the real privilege.
00:35:25.000We didn't grow up in Monty Aydin either, just like you.
00:35:29.000But that is a privilege that many black kids are missing.
00:35:32.000And even as late as high school, I guess...
00:35:40.000Like, honestly speaking, do you think it's salvageable if you have kids that grew up in a different family culture that didn't at home place the same value in education, that at home didn't have the same two parents?
00:35:54.000Like, you're moving the needle definitely a little bit.
00:35:56.000And if it's going to be moving, it's definitely in the positive direction.
00:36:00.000But how much is possible against the backdrop of the family situation and the breakdown of the family in Black America being what it is?
00:36:08.000My faith tells me that everything is salvageable and we should never throw in the towel when it comes to the importance of family, the privilege that you and I benefited from.
00:36:18.000What I would say is this Open dialogue, this civic engagement has the opportunity to bring families together.
00:36:35.000When she started competing with Incubate Debate and they came to the tournaments together to watch their daughter up there talking about the Second Amendment, talking about the Tenth Amendment, talking about federalism, doing that time and again over the course of the year, they got back together.
00:37:33.000So we are going to have a childcare room.
00:37:35.000So for that mother who has three young kids who wants to be there with the grandmother and the uncle, we are going to provide childcare so she can actually be there, watch her daughter, watch her son, and really have the sense of family unity and pride.
00:37:52.000Do you get the sense that – I guess one of the goals of debate is persuasion.
00:37:59.000Do you get the sense that somebody who shows up at one of these things or a high school kid changes their mind from time to time on a subject?
00:38:07.000Or do you think that that's not something that happens even in the best of scenarios?
00:38:19.000This was in May of last year at our state championship.
00:38:23.000And the question was around the question of whether the parental rights bill, which was, you know, restricting the discussions about those issues in K through three, whether that was a good or bad thing, whether that should continue.
00:38:39.000I have never had more students and more parents blow up my phone about why this topic should be taken down.
00:38:51.000And I thought, you know, and I was kind of priding myself like, you know, these kids have grown so much.
00:38:56.000Having these discussions, getting this perspective, hearing from law professors and members of our armed forces, getting feedback on their debates.
00:39:03.000But that derangement, much like we saw in 2015, that derangement over parental rights was a step too far for us.
00:39:09.000So we got calls by coaches, by parents, by students that they were not going to come unless we scrapped this topic.
00:39:19.000Several of the students ended up coming after we provided a detailed research packet like we do with all of our tournaments about the ins and outs.
00:39:28.000I thought best case scenario, the debate would be 80-20 split.
00:39:34.000We don't force kids to say something they don't believe in.
00:39:36.000So I thought 80% were going to say that the parental rights bill was a fascist bill, right, and should not pass, and 20% were to stand by it.
00:39:47.000A month later, after the threats, the boycotts, and all of that, after they actually sat down and put down Twitter and put down the headlines and the histrionics and actually read through what was a seven-page bill in Florida.
00:40:01.000There's many like it across the country.
00:40:03.000This is a pro-family piece of legislation that is not controversial at all.
00:40:09.000But it took a setting like that to actually smoke that out, right?
00:40:35.000And, you know, we're not here – I'm conservative, unapologetically so, but I'm not here to change anyone's mind to believe what I believe.
00:40:43.000I am here to facilitate open dialogue and debate.
00:40:46.000And if that means an issue goes from 80-20 to 50-50 on its own merit, you know, we're not forcing kids.
00:40:51.000We're not telling them you have to switch sides.
00:40:52.000We're not saying you have to represent something you don't believe in.
00:40:55.000But I suspect the same forces that Adam Smith so prominently talked about in 1776, right – This idea of the invisible hand, the idea of the free market, the open economy, competition, that also plays into this, right?
00:41:07.000So if a student goes up there, has nothing to stand on, on this parental rights bill, they can't win the tournament.
00:41:15.000They realize that through their research that there's no substance behind this don't say gay opposition.
00:41:20.000That the only thing for them to do was to switch the side that actually represented the facts and the realities on the ground.
00:41:31.000Vice President Kamala Harris' husband, Doug Emhoff, come out, the second gentleman, and talk to our students, along with Neil Gorsuch, Supreme Court Justice, talk with our students.
00:41:38.000So we bring in both sides, and we really want the open dialogue and competition.
00:41:42.000And we see your students, they're in Florida.
00:42:23.000Or squarely within it to say, which is – There you're going to have to be able to have actually a rich, open debate because it's not the topic where the sides have already ossified.
00:42:35.000That's cool that there are still spaces, and it's interesting to cultivate almost the skill set amongst kids these days.
00:42:42.000It's probably better to find – I mean, I think we need to change the culture, but put that to one side.
00:42:49.000If we take the current culture as granted, but we still want to build the skill sets you want to build amongst these kids, it's kind of sad that you have to find those kinds of topics.
00:42:58.000That there's still enough controversy or opportunity for difference in opinion, but outside of the pale of the kinds of controversies you're not allowed to actually debate anymore.
00:43:07.000I predict that'll actually be one of the better ones.
00:43:27.000About a Fed rate decrease way back in the day.
00:43:31.000Should we talk about that a little bit before we wrap up?
00:43:33.000Because I know you have many different sides to your background and we've talked a lot about your nonprofit work.
00:43:40.000But maybe a little bit about your day job as an investor and an observer of markets.
00:43:45.000Maybe we'll switch gears to that for a second before we wrap.
00:43:49.000My own view is that If we are to learn anything from the current moment we're in, as we're having this conversation, some market instability, seeded by public concern about the stability of banks in the United States and in Western Europe, one of the major lessons we need to learn is that the Federal Reserve Has badly screwed up the project of trying to hit two targets with one arrow.
00:44:21.000They've done a very poor job of it, but part of my view is that it's not just that they've executed their job poorly.
00:44:28.000It's that that was itself the wrong mandate.
00:44:31.000To begin with, largely because it's based on flawed data.
00:44:34.000It's like old New Zealand data compiled by British people a century ago that says that there's a trade-off.
00:44:40.000To think that that's extrapolable to a modern economy is itself an error.
00:44:43.000And then even if it were true, that it's possible for an omniscient central planner or a dozen of them in a Federal Open Markets Committee or whatever, Federal Reserve Open Markets Committee to play God.
00:44:54.000And the results speak to the fact that that's been a disastrous experiment, probably contributing in some ways to the 2008 financial crisis, again, to the instability now where the Fed takes these Really, what are trailing indicators like wage growth late in a business cycle?
00:45:14.000treat them like a leading indicator such that when you see wage growth, you tighten interest rates precisely when the business cycle was about to be self-correcting in its own right, but you turn what would have been a perfectly smooth cycle into a boom-bust bailout cycle that gets us exactly what happens to repeat itself over and over again.
00:45:31.000You have 20,000 people that show up or 22,000 people that show up to work with at the Federal Reserve System doing a job they shouldn't have been doing in the first place.
00:45:38.000It It just exacerbates the problem through this managerial bureaucracy.
00:45:41.000That's my diagnosis of the current state of play and I have my views on what I'm going to do as president about it.
00:45:47.000You're a sophisticated observer of financial markets.
00:45:49.000You've been watching the Fed for the better part of a decade, a decade and a half.
00:46:06.000My take is the Federal Reserve is just trying to do too much.
00:46:11.000It's trying to do too much and they're micromanaging.
00:46:14.000So I think the best way to think about this is to go back to 2019 and you had what the Fed called a mid-cycle adjustment, which is a fancy way for saying we're going to cut rates not because we anticipate recession, but simply because we think we're going to take out some insurance because the Trump trade war might not be going as planned and so on and so forth.
00:46:35.000But one of the main things they cited in those mid-cycle adjustments, which are three rate cuts, it was July, September, and October of 2019, was that inflation was too low.
00:46:51.000Is that not only is it maybe the wrong target, but at the same time, they're trying to micromanage it down to the decimal point.
00:46:59.000We're going to cut rates, we're going to raise rates, whatever it is, because inflation is off by two-tenths or three-tenths is fundamentally the wrong way to think about it.
00:47:09.000And I think about the crisis too, right?
00:47:11.000I put a lot of blame you do at the Federal Reserve, but I do as well at Congress and for the Federal Reserve enabling the congressional largesse that we saw with the COVID bailouts.
00:47:23.000Now, the CARES Act was passed unanimously by the U.S. Senate, and I think it made a lot of sense in the moment, right?
00:48:03.000The markets, the economy, the capitalism, right?
00:48:07.000All of that was working its way to fix this problem.
00:48:10.000What ended up happening was he prolonged the labor shortage by paying Americans not to work up through September of 2021.
00:48:18.000You'll remember that in the summer of 2020, the expanded unemployment benefits were – estimated that two out of three workers were making more on unemployment benefits than they were going to work.
00:48:33.000They were in no rush to go back to work.
00:48:35.000And that exacerbated the labor shortage that in many ways has contributed to the inflationary situation today.
00:48:42.000So I look at the Federal Reserve for coming out, Chair Powell saying, Congress needs to do more.
00:48:48.000The risk of doing too much is less than the risk of doing too little.
00:48:51.000And not just his words, Vivek, but his actions.
00:48:59.000Again, in the middle of a crisis where we could look like an actual sudden stop, a real Great Depression-esque crisis, it made sense to throw the kitchen sink at it.
00:49:08.000But when it became clear in the fall of 2020 that things were on their own getting back to normal, we then had a normalized monetary policy.
00:49:16.000I had a lot of faith in Chair Powell that he, being a guy from private equity, being a guy from the investor background that you and I were, would not have fallen victim to the kind of academic Theories that has for too long afflicted the Federal Reserve.
00:49:31.000Those 20,000 people at the Federal Reserve have developed research on all these types of fancy-sounding economic theories, and one of them is the idea of forward guidance.
00:49:47.000Oh, it is – and people cling on to every word.
00:49:50.000I mean, you just take a step back if somebody came to this – somebody were, you know, Rip Van Winkle and then woke up from the early – from the 70s or 80s now, watching us cling to the words of these soothsayers who are supposedly the omniscient and that it feeds their ego, Makes them think they're omniscient because as many people pay attention to them.
00:50:11.000Market participants, not because they have some insight about the truth.
00:50:14.000It's just a question of how much they're going to screw it up.
00:50:17.000And market participants want to know that.
00:50:19.000And yet that has the impact on their psychology of actually feeding their false ego when the results that stare them in the face would tell them that they've done a horrendous job of it over the last 25 years.
00:50:46.000The same way that we wouldn't have started this podcast on time if time were a floating currency, right?
00:50:52.000The number of minutes and an hour, if that were to float, we wouldn't show up at meetings on time.
00:50:57.000Well, the dollar instability, this is my perspective at least, contributes to misallocations of capital that in turn become impediments to GDP growth.
00:51:04.000That is the sole role of a proper Federal Reserve rather than this pattern that you see whenever you create an agency.
00:51:36.000In a sitting from where I said, I think part of the problem is that most people who even assume the presidency don't actually have an understanding of the issue and then lack the conviction then to follow through and see it through when their policy advisors or whatever who are creatures of the same swamp tell them you can't do that.
00:51:52.000I think it's part of why we need people who have conviction to actually see that through, which brings us back to skill sets that we failed to build long ago in our civic culture, our civic culture going all the way back to basic primary education where people forgot to evaluate ideas on their own merit, which brings me back to, you know, what is the – what it is in the importance of what you do in your civic capacity and hopefully training the next generation not to be as stifled as many in ours have what is the – what it is in the importance of what you do in your
00:52:23.000And, you know, you think about kind of Maslow's hierarchy of needs, right?
00:52:27.000Civic disposition is nearly near the top, right?
00:52:30.000But what we're trying to do with incubate debate now is take the same two Sort of assets that have really helped us.
00:52:39.000One of them is an ability to connect with young people and leverage the existing relationships we have with schools, with administrators, and school districts.
00:52:49.000So what we're launching on Monday actually is our Not Even Once in School Assembly Series.
00:52:54.000And this is talking about the dangers of fentanyl for young people.
00:52:59.000We had a debate a couple of months ago about the opioid epidemic, about whether harm reduction or abstinence was the more effective way for tackling addiction.
00:53:07.000And what we found was it was an incredibly fascinating and informative debate, but there was a very wide knowledge gap where students walked in with the knowledge and then walked out with so much more.
00:53:18.000So many students had no idea what fentanyl was.
00:53:23.000So we conducted a statewide survey in February that asked 320 students in Florida about this issue.
00:53:31.000Seven in ten, Vivek, said that their school had not spoken to them about fentanyl.
00:53:36.000Half did not even know that counterfeit pills like Xanax, Percocet, the things that are being peddled to them on Snapchat, were being made with lethal fentanyl.
00:53:49.000So what we've been spending the last couple of months on is building out a statewide series of assemblies where we're going into schools and we're walking into the wind.
00:53:59.000The reason why is that – do you remember the D.A.R.E. program?
00:54:37.000And that has created a culture where so many young people that we're trying to talk to, not just us, but so many other great organizations are walking into the head, walking into the wind because they're deeply skeptical, right?
00:54:50.000Ten years ago, don't smoke weed because you're going to get very, very sick or you're going to get addicted or whatever.
00:55:16.000And I think there's a reason why – and so when you do have this discussion, I mean my humble suggestion is make sure you include in that conversation at least an open debate about how much of this is really supply-side driven.
00:55:33.000Because it's no accident that we have seen a spike in the fentanyl epidemic precisely when China decided it was in its policy interest to wage a modern opium war in the United States by making the inputs – there's about four key inputs.
00:55:50.000But by providing them inexpensively to Mexican drug cartels and even coming over, sending Chinese people to Mexico to synthetically create fentanyl.
00:55:57.000to understand there's actually going to be far more harmful to the US than where its prior focus was in the so-called drug war.
00:56:04.000But actually to use that to undermine the United States from within, now resulting in 100 plus thousand deaths, largely with Chinese fingerprints all over them, with Mexican drug cartels crossing over the border.
00:56:14.000One of the kind of arguments I hear is, well, we have demand for it.
00:56:18.000I don't argue against that, but – It rejects the truth of the matter, just empirically of what's happened is when the profit margins for the drug cartels went up, they decided to actually, because they got the inputs more cheaply from China, they're actually able to have an incentive.
00:56:34.000And there's no doubt that there's a component of this, at least no doubt in my mind, that this was supply-side driven.
00:56:40.000But make sure that that – I would suggest making that a part of the debate in terms of how you take this on.
00:56:47.000That belongs on the menu of something that people are, I think, not particularly paying close attention to today, but, you know, ought to be in the conversation and it's where I'm focused from a presidential perspective as well.
00:57:29.000It's a long-sounding… But these precursors, they get sent to Mexico.
00:57:34.000And the reason why fentanyl is so dangerous is because from a law enforcement perspective, whether it's on the interdiction side, they're looking out.
00:58:46.000But when it comes to shutting down these dealers who are peddling this poison, killing our young people, there's no, no bravery on that front.
01:00:26.000But I'm just talking about the quality control here, right?
01:00:29.000So, what ends up happening is the precursor is kind of – I'm just trying to understand even descriptively because I've come from the pharmaceutical world in my prior life.
01:00:37.000You're saying that literally it was like fentanyl was concentrated in the half of the pill that she took.
01:03:40.000So what I mean by that is if you go out and spend and make $10,000 in a weekend selling fake Percocets to people and one or two of them or three of them die, right?
01:03:51.000You lose three customers, but you've netted hundreds of others, right?
01:03:57.000And part of it, too, is these are not skilled people.
01:04:00.000Just to give you another point, why – Sully it.
01:04:05.000Why purposefully sully it with a little bit of fentanyl when it's not that it could have made the same amount of money even if they hadn't done that, right?
01:07:08.000We've got a great team as well at Incubate that are helping do this.
01:07:11.000Our first event is on Monday at Hollywood Hills High School in Broward County.
01:07:15.000We're going to have the DEA there, the FBI. But we're running the assembly.
01:07:19.000It's a 20-minute assembly where we just talk about fentanyl.
01:07:22.000The students who actually responded that survey reached out to a couple of them and asked, well, if they didn't talk about fentanyl Did you have a drug assembly?
01:07:30.000And they said, yeah, we talked about weed and vaping for most of it.
01:07:35.00090, rather 80% of fatal teen overdoses last year were fentanyl.
01:07:50.000And that's what we've committed ourselves to do is this assembly is just about the thing that is killing nearly 200 Americans every single day.
01:09:58.000You know, you have thick skin if you're going to accomplish something in this world.
01:10:01.000If you can't handle the heat, you stay out of the kitchen, but you're – you've entered the kitchen and I think that you're going to be hopefully the kind of guy that leads a lot of people in your generation to hopefully give us a country built on the principles that we care about, you and I both, and free speech and open debates at the top of that list.