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Here’s today at a glance:

• Tech Becomes Political

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Tech Becomes Political

If this newsletter has any politics, it is “Go faster to solve problems”. What a tumultuous time the last two weeks has been in terms of real world politics though. It’s like living in a movie.

Besides the obvious, I found this podcast from Marc Andreessen and Ben Horowitz to be particularly insightful:

Highlights

• A real window into elite US discourse, with Ben and Marc making arguments that are normally only heard behind closed doors

• “You have to be a Democrat to be a good person” -> Ben stating that this was accepted elite norm. Dems were a pro business party, you make your money then you do philanthropy, that was the social contract between elites and the masses.

• Business people could therefore make their money and be progressive on social issues and therefore on the right side of history. I always thought Republicans were supposed to be the pro-business party, so I was a bit surprised to hear Marc say this. But it seems this was the accepted good person position, while the evil people were those on the Republican side who were hoarding and wanted to pass on their wealth to their kids

• Ben and Marc have been disturbed by the anti-tech, anti-wealth and anti-philanthropy sentiment in the Democratic party. You need tech to create economic surplus to distribute, but current Democratic administration has forgotten that. I’d say that its really the young activists who have swung to the far left. The Democratic coalition is now a centrist racial minorities, women, and a bunch of far left activist leaders who have also completely gummed up the pipeline for non minority centrists.

• Ben and Marc ground their argument in American predominance built on tech, economy and military. Tech is critical to the other two, and tech depends on startups.

• Current admin chooses winners and losers in tech. True of crypto, CHIPS act, and now AI. This will not work as we don’t know which industries and companies will create the future.

• Marc and Ben have tried to get clarification and guidance for crypto, and have been stonewalled. Elizabeth Warren seems to control the SEC, Gensler won’t make rules and won’t meet. Biden’s decisions on this seem to be under factional control within the Democratic party. A lot of people in tech regards crypto as a scam and money laundering, but there isn’t anything inherently bad in the tech if regulated appropriately, but these efforts have been blocked by government.

• Crypto companies are able to launch elsewhere but not able to launch in the US

• The bureaucrats have subverted the rule of law to attack the crypto industry. Having faced it in crypto, Marc can see it happening to AI. If not for having been blocked on crypto he might not been standing up now. I’d note that this has been going on in finance for a long time, see for example Elizabeth Warren efforts to unbank gun shops. So it’s not so much a targeting of crypto or tech, but making tech play by the same rules as finance already does.

• The military has recognized AI as important as nuclear, and the entire design of the military has to be revamped. This is going to determine what the next hundreds of years will look like.

• The Biden admin’s AI order binds the good guys with bad limits and frees the bad guys. Arbitrary limits on compute when in a couple of years every phone might be able to run compute above the banned limit.

• Regulators think they can regulate and classify math as top secret. It will block US firms while freeing the rest of the world. They provide an anecdote of some mid level functionary actually saying this, and oh boy, this is classic third world governance.

• Marc is no longer able to predict what crazy ideas get implemented

• Fintech also deeply hurt by arbitrary regulation. Fintech is trying to bank underbanked in the US.

• Totalitarian part of Dem party has gotten control of some of these sectors because Biden has delegated it and not in control

• Unrealized capital gains tax will destroy tech startups. This is a big deal. Will decrease returns 99%. VC sector will be over. They give an example of the having to pay based on highest prior valuation of a raise.

• Startups are already half of the California tax base. Making the point that California is highly dependent.

• The unrealized cap gains tax will eventually tax everyone and with increasing rates

• Where they were when Trump was shot. Ben was hanging out with Ivanka Trump and her kids when Marc calls him to tell him.

• Ben and Marc had dinner with Trump just 10 days prior. The shooting was shocking, completely unacceptable in America in 2024.

• Marc admired the physical courage of Trump to stand up, put his fist in the air, and the fact that Trump made his tee off time the next day.

• “A small number of historical moments where you remember where you are” - Marc

• “This guys not like us, he’s a different kind of cat” - Ben; I found this comment to be particularly insightful, because the billionaire view of the last decade was that Trump had somehow, Producers-like, stumbled into the Presidency, because other billionaires had averted their ambitions because of their business records, tax evasion, affairs etc. This is the first acknowledgement from a billionaire that Trump is different.

• “Any person who gets to that level, you have to recognize that whatever bad parts there are, the good parts are really special to get them to where they are”

• Marc can’t believe some of the plans emerging from the administration. None of these issues are politically important issues to the national conversation. They don’t understand why there’s a level of self sabotage when they need tech so much.

• The people in admin in control hate tech and hate capitalism. Referring to the young policymakers in actual control of the state now.

• The future of tech, business and America is at stake, and Trump is the right choice.

Along with Elon, this indicates I think massive shift in elite sentiment. The elites are willing to put up with all of Trump’s distastefulness because the anti-tech, anti-competence, and anti-wealth stance of the Democratic party has finally overwhelmed then.

This along with the Supreme Court’s recent cancellation of the Chevron deference means that a good amount of deregulation maybe coming down the pipe in a Trump presidency.

Much to think about.

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