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Rachel Maddow: What you're about to hear, I think, is one of the most surreal clips I've maybe ever heard when it comes to American politics. This is a TV interview with a Vice President. And what he's about to allege here is that the President of the United States, who he served with, was threatening to have him murdered. This is not an outtake from some over-acted political thriller. This is a real interview that really happened. And the Vice President here, of course, is Spiro Agnew.
Male Voice: Agnew says he left because of a death threat from the White House. He quotes Nixon Chief of Staff Alexander Haig urging him to resign with the words, "The President has a lot of power. Don't forget that." Agnew writes that the remark sent a chill through his body. He took it as an innuendo that anything could happen. He might have, in Agnew's words, "a convenient accident," an interpretation that, even today, he refuses to disown.
Spiro "Ted" Agnew: I didn't know what General Haig meant when he said, "Anything may be in the offing, things may get nasty and dirty." There's no doubt in my mind that these things are possible. I don't say it was a probability, but I do say it was a possibility.
Male Voice: You think that there were men around Richard Nixon, either in the White House staff or in the official mechanism of the CIA, who were capable of killing a Vice President of the United States if they felt he was an embarrassment?
Spiro "Ted" Agnew: I don't doubt that at all.
Rachel Maddow: Spiro Agnew didn't just make that allegation that one time. He made it repeatedly. He wrote about it in a book. He went on the record in a series of interviews stating that he believed President Richard Nixon might have him killed.
Male Voice: You say that you were actually fearful that if you did not go along, President Nixon or General Haig, it's not quite clear, might have ordered you assassinated. Could you explain that?
Spiro "Ted" Agnew: I was concerned. And I think my concern at that time, based on my frame of mind after being seven months in a pressure cooker of attempts to get me to resign office, gave me reason to be concerned. I brought along with me this testimony from the Select Committee on the Government Operations Committee involving intelligence activities. This is the United States Senate-
Rachel Maddow: What Spiro Agnew pulls out at this point is a copy of a US government report about the CIA's efforts to assassinate Cuban dictator Fidel Castro. He says what that report shows is that even though the CIA was never given a direct order from the President to kill Castro, they knew they were authorized to do it. He's making the point that even if Nixon never gave a direct order to kill him, to kill his Vice President, it's conceivable the CIA would take its cues from Nixon and act anyway.
Spiro "Ted" Agnew: It is possible for these things to happen. I've never said it was a probability that my life was in danger. I said it was one of the factors that crossed my mind, and it was the straw that broke the camel's back after all the pressures that had been put on me.
Rachel Maddow: Spiro Agnew was alleging on national television that as a sitting Vice President, he was possibly the target of a contract killing by the President. He said he even bought a gun at the time for his own protection.
Nick Thimmesch: You acknowledge that you had fear at this time, but after you left office, did you ever go to the federal government to get a permit for a handgun?
Spiro "Ted" Agnew: Yes.
Nick Thimmesch: Why did you get that handgun, and what period was this?
Spiro "Ted" Agnew: I think was immediately after I left office. I got it because I still had some fears.
Nick Thimmesch: Do you have a handgun?
Spiro "Ted" Agnew: No, I've never carried a handgun. I thought it was sufficient that people would know I had the permit to carry one.
Rachel Maddow: This is the story that Spiro Agnew wanted people to believe about the circumstances in which he left office, that he was another one of Richard Nixon's victims. Agnew's tale of woe was that Nixon's inner circle, specifically Nixon's Chief of Staff Al Haig, pressured him for weeks to resign. And when he refused to do it, they threatened his life. And thereby, forced him out when he otherwise wouldn't have left. Okay, maybe. Seems nuts, but maybe.
Rachel Maddow: That said, there is another explanation for why Spiro Agnew stepped down when he did. And it does involve a three-letter federal agency but not the CIA. It involves special agents from the IRS who had been quietly and very diligently going through Vice President Agnew's past.
Rachel Maddow: Those agents and the Baltimore federal prosecutors working with them had already turned up the smoking-gun evidence of the bribery and extortion scheme that Agnew had been running in Maryland and in the White House. But they also started turning up something else, details about what exactly Spiro Agnew seemed to be doing with all that money he was making as a criminal. And that part of the investigation got into areas of Agnew's personal life that were maybe becoming a little uncomfortable for him.
Ron Liebman: There were some personal expenses in there that pre-Monica Lewinsky and pre all that we've come across, and some stories that we came across, which, unlike Ken Starr, I guess, we just said, "This is not a part of the case."
Rachel Maddow: Ron Liebman and his fellow Baltimore prosecutors had stumbled upon an aspect of Agnew's life and crimes that may have hit a nerve for the Vice President.
Ron Liebman: You know, these guys, they have all personal peccadilloes. You know, they have money and power, and they do stupid things. And we came across financial evidence of that, and we heard some stories about that. One of them quite bizarre, but that wasn't part of the case.
Rachel Maddow: The Baltimore prosecutors never actually used the information they would start to uncover about Agnew's personal life, but Spiro Agnew was aware that the IRS was digging into it. And what it involved was evidence of what seemed like a secret life. mistresses, sports cars, expensive gifts that never seemed to make it to Agnew's wife, Judy. Here's Prosecutor Tim Baker.
Tim Baker: There was jewelry, too.
Mike Yarvitz: Jewelry to Agnew?
Tim Baker: A woman's watch, which Judy never got.
Mike Yarvitz: What does that suggest?
Tim Baker: Uhh.
Rachel Maddow: Death threat, and handguns, and CIA assassination plots sounded like a really cool reason to have to step down. But that probably wasn't the reason he had to step down. Spiro Agnew had carefully crafted this straight arrow, moralistic, hard line public image as a man of honesty, and virtue, and conservative integrity. He knew that if he continued to fight, all of that would come crashing down around him. It was finally time to cut his losses and go away.
Rachel Maddow: You're listening to Bag Man. I'm your host, Rachel Maddow.
John Chancellor: Good evening. Washington was stunned today by the disclosure that Vice President Agnew was under criminal investigation by federal authorities in his home state of Maryland.
Ron Liebman: Well what we were concerned was, you know, he gets into court, and he says, "Well, wait a minute, I changed my mind."
Marty London: And the people in the room, they gasped. It then became clear what this was about.
John Chancellor: Spiro Agnew is in disgrace, fallen from power, a convicted criminal.
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Rachel Maddow: Episode 6: A Disappearing Act.
Male Voice: The Tonight Show will not be seen tonight, so that we may bring you the following NBC News Special Report.
John Chancellor: Good evening. The country tonight is in the midst of what may be the most serious constitutional crisis in its history.
Rachel Maddow: The Saturday Night Massacre took place on October 20, 1973. It was Richard Nixon in a fit of rage, trying to end the investigation into Watergate that his own Justice Department was conducting. Nixon ordered his Attorney General, Elliot Richardson to fire the Special Prosecutor who was leading that investigation. And when Richardson refused to do that and resigned himself instead, that sparked a true-blue constitutional crisis.
John Chancellor: Agents of the FBI, acting at the direction of the White House, sealed off the offices of the Special Prosecutor, the offices of the Attorney General, and the offices of the Deputy Attorney General. That's a stunning development. And nothing even remotely like it has happened in all of our history.
Rachel Maddow: The Saturday Night Massacre is the signal moment in US history. But many of the people who've lived that history are still around to tell it. JT Smith was Elliot Richardson's top assistant at the Justice Department that day.
JT Smith: I don't want to sound like a pretentious 29-year-old, but I was sorely vexed by events. And I had a lot of yellow, legal pad notes that bore upon the stuff we've been talking about. I took my notes, put them in my briefcase, and walked out without being searched by the FBI. And I took them home, and I was sufficiently paranoid about the direction of the country, I hid them in the attic of my house.
Rachel Maddow: What sort of incredible to realize with hindsight and what's never mentioned in the history books about that moment is that Elliot Richardson and his team, when the Saturday Night Massacre happened, they were just coming off what may have been one of the most dramatic moments in the history of the US Justice Department.
Rachel Maddow: The Saturday Night Massacre happened on October 20, 1973. Just 10 days before that, on October 10th, Attorney General Elliot Richardson had single-handedly forced the resignation of the Vice President of the United States. It was October 9th when Elliot Richardson cut a high-stakes plea deal with Vice President Agnew's lawyers that would keep Agnew out of jail, but in exchange, he would offer his immediate resignation from office. Agnew's attorney, Marty London, helped reach that deal.
Marty London: I thought Elliot Richardson, in the end, made a deal because he saw this as a potential Constitutional crisis and a national disaster.
Rachel Maddow: The deal was made. As controversial as it was, it was made. But what happened to Spiro Agnew in the last 24 hours of his Vice Presidency? It was this all-night, sirens wailing, down to the last minute, surprise sweat fest like you can't believe.
Rachel Maddow: In all of US history, a Vice President had never before been forced to resign. And at that moment, it wasn't really clear how to do it, logistically even. They had to dig through the archives to figure out the logistics, to figure out that the way a Vice President technically resigns, the instrument of resignation, turns out it's through a letter submitted to the Secretary of State. Okay, so, he'll resign to the Secretary of State.
Rachel Maddow: After figuring that out, and finalizing the deal, and setting a court date for the very next day, October 10th, Marty London and the rest of Agnew's defense team rushed back to the Vice President's office to draft that resignation letter. Again, there was no precedent for what that should look like. What should the letter say?
Marty London: Nobody had written, thought about preparing for this. So, we've got two hours to get out a resignation letter. I don't know how so many people got in that room. He had — The Vice President had some guy who was like counselor to the Vice President, another guy was there, another guy was there, Frank Sinatra had sent a lawyer. And, now, people are writing fantastic, long explanations.
Marty London: One guy said, "I'm resigning because the President is pushing me out, and outrageous." Another guy writes a letter, "I'm resigning because of the press wanted me gone." And the other guy said, "The Department of Justice want to be gone." And another guy said, "It's the fucking Democrats, they want me gone." It's everything. And we're going nowhere. It's an hour and a half later, the clock is ticking, the temperature room is 85 degrees, I said, "I got it guys. I got it." Thus, I pat myself on the back here. I got it. "Oh yeah? What's your letter?" It says, "I hereby resign as Vice President of United States. Respectfully." Everybody says, "Well geez, that will do it."
Rachel Maddow: That chaotic scene in the Vice President's office though, that was nothing compared to what was happening back in Baltimore that night at the US Attorney's Office. The plea deal that had been reached with Agnew allowed the prosecutors to submit a detailed statement of evidence into the record laying out what crimes exactly Spiro Agnew had committed. The payoffs as Governor, the payoffs as Vice President, everything the prosecutors had.
Rachel Maddow: What the prosecutors would, ultimately, draft was a 40-page long statement of evidence laying out Agnew's alleged crimes. But the night before the court date, it wasn't done yet. And these three Baltimore prosecutors, they stayed up all night that night trying to get it finished in time.
Barney Skolnik: It was all written the night before we went to court. I mean, it was like this all-nighter thing, like it was being back in college. We were exchanging drafts. I think maybe Timmy wrote, you know, these parts. And I wrote some parts. And Ron wrote some parts.
Tim Baker: We just started dictating and drafts would go, pages would. It wasn't like complete drafts. Sections would go back and forth, back and forth, marked up, retyped, marked up, retyped, and we were on a deadline.
Ron Liebman: At like 1:00 or 2:00 in the morning, the Attorney General of the United States and Henry Petersen, I think, drive to Baltimore in the middle of the night, early in the morning, and sit in George Beall's office as we start feeding him these papers, which was extraordinary. This is the Attorney General the United States at 2:00 in the morning in Baltimore? You know, on my best days, I wouldn't want to be in Baltimore at 2:00 in the morning.
Tim Baker: And I think it's like 6:00 a.m., it's given to the US Marshals, who then, we were later told, at points on the Baltimore-Washington Expressway, we're doing in excess of 85 miles an hour. And then, it had to be to Agnew's lawyers by something like 8:00 a.m. in Washington. It was some terrible hour, and they got it there just in time.
Rachel Maddow: They got it there, in fact, five minutes late. This 40-page statement of evidence that was thrown together all night, overnight, it was rushed to DC with a sirens wailing police escort, like it was the holy grail. For these prosecutors, it kind of was. Spiro Agnew was about to walk into court and plead to a felony count of tax evasion, and these prosecutors wanted the American people to know that he had not only been caught for tax evasion.
Tim Baker: We knew what it had to do. It had to bury him, so that the country could see this wasn't a witch-hunt, to use a current expression, that there was a very substantial, solid case against him.
Ron Liebman: It was a big issue for all of us, all of us, because what we certainly couldn't allow to happen would be for Vice President to plead Nolo to a tax count, and then the walk out and say, "This is nothing. This is some little mistake I made. This is absolutely — These guys are liars. I made a little mistake on my tax returns. I've made amends. I'm going to pay back the money that I should have paid. And I'm going back to work."
Rachel Maddow: So, the statement of evidence was finally ready. The Vice President's resignation letter was finally ready. A 2:00 p.m. court date was set. But not a single soul in the country, except for the people directly involved, knew what was about to happen in that courtroom.
Rachel Maddow: Now, the press knew that there was going to be a hearing in court that afternoon, something to do with the wrangling over the Agnew case, but what the press thought the hearing was going to be about was them, about newspapers' efforts to quash these subpoenas that Spiro Agnew's lawyers had sent to various reporters to try to get them to reveal their sources. The press showed up that day ready to cover a hearing about that. All of the lawyers for the news organization showed up at the counsel's table ready to fight about those subpoenas to the reporters. And then, into the courtroom, walked the attorneys for the Vice President.
Marty London: And they see us walking in, and we sit at the near table, and they look at us with hostility. I mean, sneering. Just Angry. And then, two federal marshals come over to them, and they say, "Pick up all your papers and move to the gallery." And they're resistant, but, I mean, these are federal marshals, and the marshals do not explain why. They just said, "Clear this table and clear it now. You can go stand in the back." And they stand in the back. And in walks, to occupy that table, Elliot Richardson, George Beall, and some more of Beall's assistants.
Ron Liebman: The bailiff makes an announcement, you know, "Ladies and gentlemen, proceeding is about ready to begin. This courtroom is going to be locked. So, if you can't stay, you have to get out. You have to leave now."
Rachel Maddow: The Baltimore prosecutors are there, sitting next to the Attorney General himself. They know, and the Vice President's lawyers know, that what was about to happen in that courtroom was something really big and surprising. The resignation was ready. The 40-page statement of his crimes was ready. The deal was ready, and the country was about to have the whole thing sprung on them for the first time. The hearing was set to begin at 2:00 sharp. There was just one problem.
Marty London: It's now 2:00, and I am sweating because at our table is me and Jay Topkis, and Jud Best is back in the clerk's office on the telephone. And it's 2:00, and somebody from this play is missing.
Rachel Maddow: Everything was set. One of Agnew's lawyers was in the clerk's office at the court waiting to give the order over the phone to deliver Agnew's resignation letter, to transmit that letter to the Secretary of State as soon as the Vice President himself walked into the courtroom. It was all choreographed. Each moment scripted and ordered for a very specific reason. And the time was now, but the Vice President of the United States was nowhere to be found. On the prosecution side, they had long feared that something just like this might happen.
Ron Liebman: What we were concerned was, you know, he gets into court, and he says, "Well, wait a minute, I changed my mind. These are bogus charges. I don't know why I'm here. I'm the Vice President the United States. I'm immune from prosecution. Marshal, could you unlock that door please. I got to go." You know, we're dealing with the Vice President of the United States. We are being as careful as we can be. We're on tenterhooks, right? We want this done just so. It had to be done just so, or it wouldn't happen.
Rachel Maddow: At 2:00, when the Vice President was the only one missing, it looked for a brief moment like it might not happen, even to Agnew's lawyers.
Marty London: Listen, you want to know if I got a little nervous between 2:00 and 2:01 because the man was a minute late? The answer is I was anxious. I wouldn't say nervous, but I was anxious. I said, look, if I have a 2:00 court date, I'm there at 1:45. I mean, I've been doing this for a long time. I can understand him not wanting to come into that courtroom, and I do get it, him not wanting to come into that courtroom, and sit there at that table for 15 minutes with all those people staring at the back of his neck. So, I don't know. I assume that he may have been there at 1:45, sitting in his car out at the curb, looking at the watch and saying, "Okay, I better go in." And maybe my watch was a minute fast. Maybe he was there at 2:00. I was anxious, but I'd never occurred to me that he was not going to do it.
Rachel Maddow: That wait for the Vice President to show up, the question of whether or not he would show up, that hung in the air for a very tense moment, until the courtroom doors swung open again.
Marty London: 2:01, exactly, in walks our client. And the people in the room, they gasped. It then became clear what this was about.
Ron Liebman: It was a noticeable hush. Gasp. You know, it was a surprise to so many people in there. The courtrooms is locked, Agnew walks in, the judge gets on the bench, the bailiff or the law clerk calls, "Oyez, oyez. All rise." Everybody rises, everybody sits down, and there's, you know, Spiro Agnew in his well-tailored suit and his nice haircut about to plead Nolo Contendere to a felony.
Marty London: Jud Best comes out of the clerk's office and says, "I've just been on the telephone with the offices of the Secretary of State. They have received the Vice President's resignation letter." And, ultimately, the judge accepts the plea, and he sentenced him to a fine and a sentence of probation. And we walk out of the courtroom with the ex-Vice President of the United States. It was a stunning, stunning, stunning development.
Rachel Maddow: For the first time in American history, a sitting Vice President appeared in court to answer criminal charges. For the first time in American history, a Vice President plead to a felony. And for the first time in American history, a Vice President resigned his office in disgrace.
Rachel Maddow: Spiro Agnew arrived at the courthouse as the Vice President. As he crossed the threshold into the courtroom, his resignation was simultaneously submitted. He left that courtroom minutes later as a convicted felon. He, then, spoke to the stunned reporters outside who had had no idea that any of this was coming.
Spiro "Ted" Agnew: I categorically and flatly deny the assertion that have been made by the prosecutors with regard to their contention of bribery and extortion on my part. I will have nothing more to say at this point. I will make an address to the nation within a few days.
Rachel Maddow: Spiro Agnew decision to agree to a plea deal and resign, it happened so fast that Agnew's own staff at the White House didn't even know that day that it was going to happen. Here's David Keene, Agnew's top political aide.
David Keene: He went to Baltimore to plead nolo. And Mike Dunn, who is the Chief of Staff, and he called the senior staff together to tell us. And I pounded my fist on the desk and said, "Can't the son of a bitch have the balls to come and tell us himself?"
Rachel Maddow: There was a lot of crazy stuff that happened in the United States of America in 1973. But the Vice President of the United States suddenly resigning in disgrace, surprise. That stunned the country.
Male Voice: Good evening. If you have just joined us, we are obliged to tell you the story we've been running since shortly after 2:00 this afternoon, namely, that Vice President Spiro T. Agnew is now the former Vice President. He resigned today. It's been quite a day for news, JC.
Female Voice: It really has. I think the public is still in shock. Many people just disbelieve it. It's hard to accept that it has come to this.
Male Voice: There was disbelief on Capitol Hill where most House and Senate members had come to believe the Vice President's assertions that he fully intended to fight the charges all the way.
Mark Hatfield: We have a period of time when there is political erosion. Confidence and faith in the whole system has been challenged by many people. And, now, to have this confirmation of the worst suspicions that some people held is really a very profound impact on the whole country.
Male Voice: Can you tell us what your reaction is to the resignation?
Mike Mansfield: Well, it was totally unexpected. And I don't know what to say.
Rachel Maddow: That was the Majority Leader in the Senate at the time, Democratic Senator Mike Mansfield. The reaction in the country to Spiro Agnew's sudden resignation was kind of a muddled mess. It was a lot of things all at once. It was stunned confusion from a lot of people. There was elation from those who felt that justice had been served. There was also absolute outrage from Agnew's supporters, who really had stayed with him right til the very end.
Female Voice: I'm just sick about it. I think he's a man of his word, and I think they've all been doing the same thing ever since I started voting. And I think it's just too bad. I think he's a great man.
Female Voice: I think it was very unnecessary. I'm just, oh, I'm just sick. I'm very unhappy. I don't think it was necessary. I think it's a lot of political hogwash. And I'm, oh.
Male Voice: Did you vote for Agnew?
Male Voice: I certainly did.
Male Voice: What do you think of him now?
Male Voice: I think it's very unfortunate. The man seems to be railroaded or something. I don't know if this is all fact, a lot of insinuation has been brought out.
Rachel Maddow: Spiro Agnew built this base of support in the Republican Party. He convinced his supporters that he was innocent. He was the victim of a witch hunt. And even though he had just plead no contest to a felony in open court, his supporters just still couldn't accept it. They couldn't absorb it. They have been primed to believe in his innocence, and to hate, and resent, and suspect everything about this prosecution.
Rachel Maddow: But, you know, a weird thing happened in the courtroom that last weird day. It was just an odd moment in the courtroom itself that didn't seem like much at the time, but it would ultimately shake even Agnew's most committed supporters. And it would ultimately cost Agnew much more than just having to resign from office and walk away. That's next.
Chris Hayes: Hey, it's MSNBC's Chris Hayes. If you enjoyed Bag Man, be sure to check out my friend, Rachel Maddow, on my podcast, Why is This Happening?, where I get the opportunity to dig deep into the forces behind the stories playing out in the news in order to understand why certain cultural and political phenomena came to be. Rachel joins me to talk about covering the news in this unprecedented political moment. We also talk all about Bag Man and how this incredible podcast came to be. So, click on over and check out Why is This Happening? And you can listen now wherever you get your podcasts.
John Chancellor: Spiro Agnew is in disgrace, fallen from power, a convicted criminal. It's something that none of his critics would even have predicted not long ago. And it is one of the biggest news stories of our time.
Rachel Maddow: The day that Spiro Agnew walked into a federal courthouse in Baltimore to plead to a felony and resign the Vice Presidency, one of the people inside the courtroom that day was a Law Professor from George Washington University, a professor named John Banzhaf.
John Banzhaf: I showed up and, initially, they would not let me in. I was reluctantly led into the courtroom, but with a very solemn warning that if I attempted to say anything, if I stood up, if I did anything at all, there were two big marshals behind me, and they would immediately take me out of the courtroom. And I was told in very strong language, "Don't stand. Don't say anything. Don't try to have any role."
Rachel Maddow: It was a little bit of a strange thing for this law professor to be in court that day. To him, it was stranger still the way that he felt threatened by those federal marshals. But in his view, the strangest thing about the whole proceeding in that courtroom that day was the resolution of it. Spiro Agnew was being allowed to plead to a felony, but he wasn't being sent to jail, and he wasn't even being forced to pay back any of the bribe money that he allegedly took.
Rachel Maddow: What was the punishment here exactly? I mean, resigning from office, yes. But is that it? After that remarkable day in court where, surprise, the Vice President is pleading to a felony and, oh by the way, he's also resigned, after that day, Banzhaf went back to his law classes at GW. And there, he found that his law students were as perplexed as he was about how the whole thing had shook out.
John Banzhaf: I mean, they said to me, "Professor Banzhaf, if somebody robs a bank, and he's given a plea deal, he's, at least, required to give back the money." Agnew, as a Governor and Vice President, should be held to an even higher standard. They were outraged that he was allowed to get off on a minor plea, no time, and keep all the ill-gotten gains.
Rachel Maddow: Spiro Agnew had resigned his office. He was basically starting to disappear into obscurity, but this class of law students decided they were going to make a project out of him. They weren't going to let him go away quietly.
Rachel Maddow: The law students and Professor John Banzhaf's class came up with a plan. Their first effort was to lobby Maryland's governor to bring a civil lawsuit against Agnew, since after all when he was taking those bribes and shaking down those contractors, it was the State of Maryland that was being defrauded. The State of Maryland should get that money back.
Rachel Maddow: The Governor of Maryland met with these students to hear them out, to hear their plan. But even though he took the meeting, and he heard what they had to say, at the end, he told them no, he wouldn't do it.
John Banzhaf: When we left, we were literally bewildered. I recall riding back in the car and the students are saying, "Well, why didn't they bring it? We don't understand. What's going on?" And I'm their professor who's supposed to know these things. And, of course, I had no answer for them. I could not figure out why they wouldn't want to bring the action. It was only quite a bit later when we learned that Governor Marvin Mandel was, likewise, on the take and was probably on the take, literally, while he was deciding not to bring this action.
Rachel Maddow: The State of Maryland had been harmed, but the Governor of the State said he wasn't willing to bring this case. So, the students went to Plan B. They found an old British common law legal principle that they believed would let them sue on Maryland's behalf, even if they didn't have the State's support to do it. They found some Maryland taxpayers to be their plaintiffs.
Rachel Maddow: And those law students did sue Spiro Agnew on behalf of Maryland taxpayers to recoup the bribe money that he had taken. It ended up taking years, but, eventually, they won. A court ruled that Agnew had, in fact, taken bribes, that he had defrauded the State, and he was ordered to write a check to the State of Maryland for more than a quarter million dollars.
Rachel Maddow: And those students, they not only exacted some of the punishment, they felt like Agnew had escaped back in 1973. They also got one more crucial thing when it comes to the scales of justice here. They got a confession. Well, a confession by proxy.
Rachel Maddow: Back in 1973, when this little investigation in Baltimore first started, Agnew himself, it turns out, admitted the whole scheme to his lawyer, his personal lawyer, a man named George White. Then, later, in his own book about the scandal, Agnew, oops, broke the confidentiality of his own attorney-client relationship with George White when he chose to write about the conversations he'd had with White while the case was unfolding.
Rachel Maddow: That was a mistake because when that lawsuit was eventually brought against Agnew by the law students at GW, not only was the court able to force Agnew to pay back some of the money he had ripped off from the taxpayers, the court was also able to get sworn testimony under oath from Agnew's own lawyer about Agnew confessing that he was guilty.
Female Voice: Today, only because ordered to by the judge, George White broke his silence. He described learning about the kickback scheme from three Agnew associates who were threatening to implicate the Vice President. Confronting Agnew, he said, "Ted, this is terribly serious. You've got to level with me. I've got to know the truth." According to White, Agnew replied, "It's been going on for a thousand years. What they told you is true."
Rachel Maddow: Quietly, in the courts, when Spiro Agnew was already a trivia question and a hard one, quietly, while basically nobody was watching, Agnew's entire story fell apart. All the denials, all the claims that this was a witch hunt, or that he was the real victim here, iI all fell apart. And his guilt was laid bare in court and for the record because his longtime personal lawyer flipped on him.
Rachel Maddow: When Agnew showed up to court that day in October 1973 to plead to a felony and resign the Vice Presidency, that 40-page statement of evidence that was assembled by the prosecutors, it was released to the public. It was this damning recitation of what Agnew had done as an elected official. All of the payoffs, all of the extortion, all of the crimes committed even as Vice President.
Rachel Maddow: And that document, all these detailed allegations from the prosecutors, it is a matter of public record. But even so, it's one that sort of feels secret even now. All these years later, it is hard today to find that document, even if you're really looking for it.
Rachel Maddow: The information contained in it is not what people immediately think when they hear the name Spiro Agnew. "Oh yeah. Agnew, Nixon's Vice President. Didn't he have like a tax evasion problem? Something from back before the time he became Vice President?" That's how Agnew's remembered, but Agnew really was way worse than history remembers him for, if he's remembered at all.
Rachel Maddow: Agnew, basically, disappeared into history after he resigned. He got a job working for Eva Gabor's fifth husband, seriously. Frank Sinatra helped him pay the relatively minor fines that were imposed by the court back in 1973. Agnew wrote a bad novel, a thriller with sort of unsettling sex scenes in it, frankly. He also published that memoir in which he claimed that Richard Nixon was going to have him killed. But basically, big picture, Agnew just went away. And the few times that he did reappear, he was always asking for sympathy. This was from an interview with him in 1980.
Spiro "Ted" Agnew: The penalty I've paid is very heavy. People say, "Agnew didn't pay any penalty. He bought his way out of jail with the Vice Presidency," but they don't know what a penalty I paid. They don't understand I lost my right to practice law, I lost my pension. And the worst penalty of all is during those years immediately following my resignation when I was not at all answering the charges to walk down the street and see people say. "There he goes." To be recognizable, not just in the United States, but any place I went in the world. That's a pretty severe penalty.
Rachel Maddow: Spiro Agnew probably does deserve to be more infamous than he is. But the team of federal prosecutors who discovered his crimes and took him down, they deserve to be more famous than they are. George Beall, the US Attorney who refused to let pressure from the White House interfere with his investigation. He went on to prosecute that subsequent sitting Governor of Maryland for corruption. Marvin Mandel, a Democrat. He got him too.
Rachel Maddow: Run Liebman and Barney Skolnik, They both took part in that prosecution of Maryland's next Governor. And then, like George Beall, they both moved into quiet careers in private practice. Tim Baker he ended up getting George Beall's old job as Maryland US Attorney before he, too, went into private practice. They all ended up doing fine.
Rachel Maddow: But none of them ended up etched into our history books and our national memory for the role that they played in, well, saving the republic from a national catastrophe, saving the country from a criminal Vice President ascending to the Presidency amid the ashes of Watergate, which would have plunged the country from Watergate right into another catastrophic scandal in the White House, and likely the forced removal of the next President right after Nixon.
Rachel Maddow: What further damage would have been inflicted on the country if we had had to remove not one but two corrupt criminals sitting Presidents back-to-back within months of each other? These young kids from Baltimore, these determined federal prosecutors, they saved us from that disaster. Their case was obstructed from the White House on down. They were attacked and maligned by the most powerful politicians in the country. They endured that at the ripe old average age of about 32, they kept their heads down and they kept going.
Rachel Maddow: Their bosses, US Attorney George Beall and Attorney General Eliot Richardson, they led them without fear or favor. They shielded them. And then, Elliot Richardson single-handedly got Agnew out, restoring and protecting the line of succession for the American Presidency.
Rachel Maddow: Elliot Richardson held a press conference the day after Spiro Agnew resigned as Vice President. And remember, Elliot Richardson would, himself, be forced out of office just days later, less than two weeks later in the Saturday Night Massacre. But during that press conference upon the resignation of Agnew, Richardson was asked directly what lessons the country should take from what we'd just been through.
Male Voice: We've been through a period of unprecedented in American history. What do you believe a nation can learn from the Agnew case?
Elliot Richardson: I would hope, first, that the nation would feel that the process of criminal justice is one that it can trust and have confidence in. I would hope they would feel that the interests of the nation have been placed first by all those concerned, including the Vice President himself. I would hope that, most fundamentally, all of us would have confidence that our system works.
Elliot Richardson: Indeed, I think this is the most affirmative aspect of all that has taken place over recent months, all the disclosures, the investigations, the indictments. They have exposed the shoddy side of the governmental and political process, but they have also demonstrated that the governmental and political process is capable of uncovering these things and having uncovered them taking proper action.
Rachel Maddow: The system works. The system is not destroyed by bad people behaving badly. It can deal with bad behavior and with corruption from those in power. Our system doesn't break when that happens. It's designed to confront that problem and to fix it. And in this case, it did. A criminal occupant of the White House who tried to obstruct justice at every turn, to destroy the credibility of his own Justice Department, to smear the free press reporting on it, he was not allowed to get away with it.
Rachel Maddow: Thanks to Elliot Richardson, and George Beall, and that team of young, scrappy Baltimore prosecutors, the line of succession to the US Presidency was restored and protected, and justice was done.
Rachel Maddow: George Beall passed away not long ago. He died in January of 2017, just days before the inauguration of our current President. Upon his passing, one of his successors as US Attorney in Maryland put out a public statement honoring the work that George Beall did throughout his career, but particularly focusing on this case.
Rachel Maddow: The statement said this. "George Beall was a legendary federal prosecutor, an exemplary public servant, and a lawyer of unsurpassed integrity. Although George Beall's family was politically active, and Vice President Agnew was a member of Beall's own political party, Beall did not hesitate to pursue this case. His commitment to justice serves as an example to us all."
Rachel Maddow: That statement about one Republican having the courage to pursue another without hesitation, that was written by one of George Beall's successors as Maryland's US Attorney. It was written by Rod Rosenstein, who's now Deputy Attorney General of the United States.
Rachel Maddow: Be sure to join us next week for the final episode of Bag Man. You will want to hear how this all turns out. That's next week. We'll see you then.
Rachel Maddow: Bag Man is a production of MSNBC and NBC Universal. This series is executive produced by Mike Yarvitz. It was written by myself and Mike Yarvitz. Editorial and production support from Jonathan Hirsch and Marissa Schneiderman from Neon Hum Media. And you can find much more about the story on our website, which is msnbc.com/bagman.
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W. Clement Stone: This is W. Clement Stone saying I feel healthy, I feel happy, I feel terrific.
Rachel Maddow: W. Clement Stone was an eccentric, self-made millionaire. A business tycoon who transformed himself from insurance salesman into a power-of-positive thinking, self-help guru.
W. Clement Stone: I love all my fellow men. I love every one of you. And it's my sincere prayer that you respond and learn how to help yourself by learning the art of motivation.
Rachel Maddow: W. Clement Stone looked sort of the way that he sounds. He had a pencil-thin mustache. He was always immaculately dressed in a bow tie and a vest, sometimes a big cigar. He was an ostentatiously wealthy millionaire who wanted you to be a millionaire too. And the way you could do it was by purchasing his motivational records. The Sounds of Success.
Announcer: The Combined Group of Companies presents The Sounds of Success.
Rachel Maddow: W. Clement Stone's patented self-help you can be rich to mantra was PMA, positive mental attitude.
Rachel Maddow: And in the Fall of 1973, he came to the rescue of a man whose mental attitude and whose life, in general, had suddenly become something quite less than positive.
John Chancellor: Good evening. For the first time in American history, a grand jury today began hearing evidence, which could link a Vice President to criminal charges. The federal prosecutor's office in Baltimore began, in strict secrecy, the presentation of evidence concerning Spiro Agnew.
Rachel Maddow: Vice President Spiro Agnew was facing the prospect of a federal indictment on bribery and extortion charges. And what John Chancellor said there was right, nothing like that had ever happened before in US history. And in that darkest hour, the man who rode to the rescue of the Vice President was W. Clement Stone.
Rachel Maddow: That fall of 1973 with the possible indictment of the Vice President looming, Stone's setup the official Spiro T. Agnew Legal Defense Fund. In a slightly over-the-top press release, he described how honored he was to start accepting donations from average Americans on behalf of the Vice President. He estimated that Agnew's defense bills could reach a half-million dollars. And after setting up a nationwide phone bank to start taking in those donations from across the country, W. Clement Stone, by the end of that first week, had raked in all of about 300 bucks. It didn't work.
Rachel Maddow: But Spiro Agnew did like having celebrity friends like W. Clement Stone. Frank Sinatra also came to his aid. Sinatra hit up his friends to give money to Agnew. One friend of Sinatra's reportedly told him in response, "Look, we don't give a damn about Agnew, but if you want some money, Frank, we'll give it to you.".
Rachel Maddow: The truth was Spiro Agnew really did need the money. He had hired this team of big-name lawyers who were waging an aggressive battle in the courts to try to keep him out of jail. He also had his PR strategy, at that point, which was to throw the kitchen sink at his own Justice Department to attack the prosecutors as biased. That was the strategy that was happening out loud in public, so you could see it.
Rachel Maddow: But there was also his strategy that was hidden from public view. Hidden then and hidden for years after. That was the one Spiro Agnew had been waging secretly from the very beginning. It was a coordinated effort to obstruct justice, to use the power of his position in the White House to block that investigation, to shut it down before it closed in on him. And that story, the story of that secret obstruction effort, it hasn't even been known to the prosecutors who were investigating Agnew at the time. They are about to hear it here for the first time.
Rachel Maddow: You're listening to Bag Man. I'm your host, Rachel Maddow.
John Chancellor: For the first time in American history, a grand jury today began hearing evidence which could link a Vice President to criminal charges.
HR "Bob" Haldeman: He feels the publication of this stuff would finish the VP.
Barney Sklonik: That's the kind of classic crap that we feared might happen.
Ron Liebman: Forty-five years later, and my blood still boils when I read stuff like that.
Chris Hayes: Hey, it's MSNBC's Chris Hayes. If you enjoyed Bag Man, be sure to check out my friend, Rachel Maddow, on my podcast, Why is This Happening?, where I get the opportunity to dig deep into the forces behind the stories playing out in the news in order to understand why certain cultural and political phenomena came to be. Rachel joins me to talk about covering the news in this unprecedented political moment. We also talk all about Bag Man and how this incredible podcast came to be. So, click on over and check out Why is This Happening? And you can listen now wherever you get your podcasts.
Rachel Maddow: Episode 4: Turn it Off.
Barney Sklonik: This is an actual conversation?
Mike Yarvitz: Yeah, transcript of an audio recorded conversation.
Barney Sklonik: Whoa. Oh my God. This is beautiful.
Rachel Maddow: You've heard from Barney Skolnik before. He was the senior prosecutor at the US Attorney's Office in Baltimore in the spring of 1973. What he's reacting to here is a transcript of a conversation that he has never seen before. My producer, Mike Jarvis, gave him a copy.
Barney Sklonik: "There's an investigation going on in Maryland. He asked Bob for help in turning it off." Okay. Well, these are fun.
Mike Yarvitz: Well, let me give you a couple more.
Barney Sklonik: Don't get my juices flowing. I mean, I'm too old for this shit.
Rachel Maddow: In the spring of 1973, this team of young federal prosecutors in Baltimore, led by Barney Skolnick, they were hot on Spiro Agnew's trail.
Rachel Maddow: Agnew had been the Governor of Maryland before becoming Vice President. He'd been Baltimore County Executive before that. And what this team of prosecutors had just discovered is that throughout his time in government, Spiro Agnew had been a crook. He was a shakedown artist. He had been extorting money from government contractors for years, demanding payoffs, excepting envelopes stuffed with cash. It all started back when he was first elected in Maryland politics, but it continued right through his time as Vice President. It was cash delivered to him, usually through a Bag Man, in exchange for government contracts that he controlled.
Rachel Maddow: And in early 1973 when Spiro Agnew first learned that there was some investigation going on back in Maryland, he started taking actions almost immediately to try to make that investigation go away. What we know about this secret effort from within the White House to interfere with that ongoing investigation, we know about because there are tapes.
Richard Nixon: You've got it across very strong to him that this is terribly important.
Rachel Maddow: Richard Nixon's secret White House recording system famously led to his own demise as President. But the tapes from that recording system also picked up hours of conversations about this investigation in Maryland that was closing in on the Vice President.
Rachel Maddow: In April 1973, Vice President Agnew first heard that one of his co-conspirators, a man named Jerry Wolff, was on the radar of prosecutors.
Ron Liebman: Jerry Wolff, who is another one of these guys, became hysterical in his lawyer's office, we were later told, and was screaming in the hall about, you know, "He's going to take everybody down." You know, he was — It was terrible pressure.
Rachel Maddow: Jerry Wolff had been a really big part of Agnew's bribery scheme. He got a cut of the payoffs himself, he knew all about what Agnew was doing. And when Agnew learned that Jerry Wolff was about to be questioned by prosecutors, he went to one of President Nixon's closest aides, White House chief of staff HR Haldeman, for help.
HR "Bob" Haldeman: Wednesday, April 10th, the President got me in first thing this morning.
Rachel Maddow: What you're hearing right now is an audio diary that Bob Haldeman kept during his time as Nixon's White House Chief of Staff. Here's what he recorded that night about a conversation he'd had with Agnew that day.
HR "Bob" Haldeman: Vice President called me over today and said he had a real problem, because Jerry Wolff, who used to work for him back in Maryland, and then brought him to Washington with him, is about to be called by the US Attorney up there who's busting open campaign contribution cases and kickbacks to contractors. It seems that Wolff kept verbatim records of meetings with the Vice President and others back over the years.
Rachel Maddow: Agnew tells the White House Chief of Staff that this guy, who's now under scrutiny by prosecutors, he kept verbatim notes of all his meetings. Agnew clearly knew that Jerry Wolff was a really dangerous witness. If he squealed, he could potentially unravel the whole thing. What Agnew wanted HR Haldeman to do about this threat was help him stop the prosecutors.
Rachel Maddow: Now, in order to understand what you're about to hear on these tapes, there's one other character that you need to know about. The US attorney in Maryland who is leading that investigation was someone we've talked about a lot, a Republican US Attorney named George Beall. He oversaw that team of federal prosecutors. He also came from a family that was, basically, Republican royalty in Maryland.
Rachel Maddow: Part of the reason that he was Republican royalty was at the time that George Beall was leading this investigation out of the US Attorney's Office, his older brother was a sitting US senator from Maryland, Republican Senator Glenn Beall.
Glenn Beall: The United States is the strongest free country on the face of the Earth. And since we are that, we are interested in promoting freedom around the world.
Rachel Maddow: And Spiro Agnew and the Nixon White House, they thought that Glenn Beall, the Senator, would be their key to making this entire investigation go away.
HR "Bob" Haldeman: He made the point that George Beall, who's Glenn Beall's brother, is the US Attorney there. And that if Glenn Beall would talk to him, he could straighten it out. The Vice President's tried to get him to, but apparently not successfully. So, he wanted me to talk to Glenn Beall, which, of course, I won't do, in order to verify a White House awareness and concern. He feels the publication of this stuff would finish the VP because Wolff was with him for so long.
Rachel Maddow: If you're ever trying to explain the concept of "obstruction of justice" to a second grader, this would be a good case study.
Rachel Maddow: The Vice President believes that what this witness will say could finish him. He tries to get the White House to stop the prosecutor from questioning that witness by pressuring the prosecutor through his family. It is an overt, spelled-out effort to use political power and political leverage to shut down this potent criminal case.
Rachel Maddow: That said, if it was just a failed effort, if this had ended there at that conversation with HR Haldeman, and Haldeman saying he wouldn't do it, then you could maybe just chalk it up to the Vice President blowing off steam and having obstructionist inclinations.
Rachel Maddow: But it didn't stop at that conversation. Bob Haldeman didn't agree to pressure Senator Glenn Beall himself, but he did relay that request from Agnew to another top Nixon aide, John Ehrlichman. And then, three days later, Ehrlichman was discussing it with President Nixon in the Oval Office.
Rachel Maddow: Now, don't worry about picking up every word here. I will sum up the gist of what you're about to hear. The first voice you're going to hear is John Ehrlichman, and the voice you're going to hear in the background is President Richard Nixon.
John Ehrlichman: Did Bob tell you about his meeting with Agnew?
Richard Nixon: No. I didn't see Bob and Agnew. What is it? He saw him?
John Ehrlichman: Well, he saw him two or three days ago. And your Vice President has problems of his own.
Rachel Maddow: "Your vice president has problems of his own," Ehrlichman tells Nixon. What you're going to hear next is Nixon asking if this has something to do with Watergate. Ehrlichman, then, has to correct him, get him up to speed to let him know that this is Agnew's own totally separate scandal.
Richard Nixon: With this?
John Ehrlichman: No, something else, back when he was governor. Apparently, there's an investigation going on in Maryland, and he asked Bob for help in turning it off.
Rachel Maddow: "There's an investigation going on in Maryland, and he asked Bob for help in turning it off."
Rachel Maddow: And, again, if it just stopped right there, if Nixon, Ehrlichman, and Haldeman all said, "Agnew was trying to get us to interfere with this investigation, but we obviously can't do that," if it had stopped right there, then maybe, but it didn't stop there. Days later, Agnew himself was in the Oval Office putting a plan in place with the President himself to obstruct this investigation, to shut it down.
Rachel Maddow: The tape you're about to hear now is a little bit rough. Don't worry about picking up every word. What you'll hear first is Agnew venting to President Nixon in the Oval Office about that US Attorney in Maryland, George Beall, who's been digging into the county where Agnew got his start.
Spiro "Ted" Agnew: Can you imagine a guy going into an in-depth investigation and going into the county that I was in at the beginning of this ..
Rachel Maddow: Agnew's complaining here about this US Attorney, George Beall. And what Nixon immediately moves to is, " Who is this US Attorney and what can we do about it?" Listen.
Richard Nixon: Who is this US Attorney that's handling it? Is it Beall?
Spiro "Ted" Agnew: Beall.
Richard Nixon: Well, is he a good boy? Why the hell did we appoint him?
Rachel Maddow: "Is he a good boy?," that's what Nixon asked Agnew. "Why the hell did we appoint him?" What the two men, then, start putting together is a plan to start pressuring George Beall to stop this investigation. What you'll hear in this next clip is Agnew, first, talking about all the IRS agents who have been assigned to the case. And then, Nixon and Agnew talk about getting to George Beall, getting to the prosecutor through, his brother, Republican Senator Glenn Beall.
Spiro "Ted" Agnew: He's got 30 IRS people in there snooping around. They're lookig at everybody, every angle.
Richard Nixon: Well, how can we get that word to him though?
Spiro "Ted" Agnew: Glean Beall's the only way to influence this.
Richard Nixon: The senator?
Spiro "Ted" Agnew: Yes.
Richard Nixon: Well, look, has Glenn Beall been talked to? Well, Glenn Beall better take a real deep. We helped him bury that one in '70.
Rachel Maddow: What you heard Nixon say at the end there is, "We helped Glenn Beall bury that in 1970."
Rachel Maddow: That was actually the key here. Senator Glenn Beall owed the Nixon White House because Nixon and Agnew helped him get elected. The father of George Beall and Glenn Beall had previously held that US Senate seat in Maryland, but a Democrat had beaten him and taken the seat in 1964. When that seat came up again in 1970, Nixon and Agnew helped the Beall family avenge that loss and take back that seat in the US Senate.
Spiro "Ted" Agnew: I think we have a candidate in Glen Beall that we can be extremely proud of. I think he's a candidate who will carry the …
Rachel Maddow: And it worked. The Republican Party got that Senate seat in Maryland back, but so did the Beall family. And, now, one of the Beall's sons was going to try to destroy Spiro Agnew with this investigation? No. Nixon and Agnew decided no. Now, it was time for Senator Glenn Beall to return the favor and to shut down his little brother.
Rachel Maddow: Agnew goes on in that conversation to bring up a potential witness who might tell prosecutors that he came to the White House to hand Agnew an envelope full of cash.
Spiro "Ted" Agnew: He may say he gave me a kickback of some kind, came over here, and handed me $50,000. That is totally ridiculous.
Rachel Maddow: Agnew says that claim would be totally ridiculous, but listen to how Nixon responds to that, to this idea of a witness who could incriminate Agnew inside the White House. Listen to the very end of this.
Spiro "Ted" Agnew: There are all kinds of rumors.
Richard Nixon: Good God, isn't it awful?
Spiro "Ted" Agnew: But this man is-
Richard Nixon: Well, can we destroy him?
Rachel Maddow: Did you hear Nixon at the end there? He says about this witness, "Can we destroy him?" So, what the President and the Vice President are discussing in the Oval Office at this point is, number one, how they can get a US Attorney to shut down an ongoing investigation of the Vice President? And number two, how they might destroy any witnesses who might try to come forward with information on the Vice President?
Rachel Maddow: But there is one more piece of this conversation I want to play. What they're talking about here is instructing the US Attorney George Beall, specifically, to fire the main prosecutor working on the case., Barney Skolnik.
Spiro "Ted" Agnew: Somehow, get Glenn Beall or Georgie Beall, the brother, to realize that he's — to get — go in there, finish up what he's doing. Get this thing over with, and get this guy, Skolnik, who's a Muskie volunteer, the hell out of his office.
Rachel Maddow: "Get this thing over with, and get this guy, Skolnik, who's a Muskie volunteer, the hell out of his office." So, end the investigation now and fire the lead investigator from the case, Barney Skolnik. He's a Democrat.
Rachel Maddow: That was June 1973. Fast forward a little more than a year, Nixon resigns after the revelation of his role in obstructing the investigation into Watergate. The first article of impeachment drawn up against Nixon was obstruction of justice for his role in trying to cover up that scandal.
Rachel Maddow: But what we can, now, hear on these tapes is a robust obstruction effort by Nixon and Agnew totally separate from Watergate. It's Richard Nixon hearing about an investigation into his Vice President and saying, "How do we go about shutting this down? How do we use the power of the White House to force the prosecutors to drop the case? How do we destroy witnesses that might come forward?" And they weren't just musing about doing this. They did it. That's next.
HR "Bob" Haldeman: Monday, April 30th, Resignation Day.
Rachel Maddow: In April 1973, Richard Nixon's White House Chief of Staff HR Haldeman suddenly resigned over his role in Watergate. When he did, the man Nixon named as his replacement, his new Chief of Staff was General Al Haig.
Male Voice: Press secretary Ron Ziegler said General Haig's appointment is an interim one, but he said Haig already is on the job carrying out most of the duties HR Haldeman used to perform.
Rachel Maddow: When Al Haig took over that job, one of those duties that he inherited was a White House plan that was already in action to obstruct and try to shut down a criminal investigation of the Vice President. Al Haig took the job, and he didn't miss a beat. Richard Nixon and Spiro Agnew had come up with a plan to get to George Beall, the US Attorney leading that investigation, and they would get to him through his brother, a Republican US Senator named Glenn Bell. It was Haig's job to make that happen.
Rachel Maddow: And, again, we know that because there are tapes, like this one where you can hear Nixon and Haig in the Oval Office putting together a plan to have a White House adviser, named Mel Laird, be the middleman. Now, the tape here's a little rough, but you'll hear Nixon trying to figure out with Haig how to do this secretly, how to do this in a way where Nixon's fingerprints weren't on it. Nixon starts here by saying, "I think you better talk to Mel."
Richard Nixon: Well, I'll tell you, you better talk to Mel.
Al Haig: I'll talk to Mel.
Richard Nixon: I don't think I better-
Al Haig: No, no, no.
Richard Nixon: I can't have it put out that I was trying to fix the case.
Al Haig: No, no, you cannot do this.
Rachel Maddow: Nixon says there, "I can't have it put out that I was trying to fix the case." And Haig says, "No, no, you cannot do." Al Haig, then, lays out what exactly they want this Senator Glenn Beall to do for them.
Al Haig: So, if Glenn Beall can get his brother, who's the US Attorney, who we appointed, who's a Republican, but who's turned this thing over to two fanatical prosecutors, if he just sits in on them and supervises this.
Rachel Maddow: "If Glean Beall can get his brother, who's the US Attorney, who we appointed, who's a Republican, but who's turned this thing over to two fanatical prosecutors, if he just sits in on them and supervises this." In other words, what US Attorney George Beall needs to do is sit in on these fanatical prosecutors in his office who are taking this investigation to places we don't want it to go.
Rachel Maddow: Nixon and Haig are devising this plan in secret to interfere with this ongoing investigation. They, then, start putting this plan into action. But the middleman they end up using, the guy who they dragged into this obstruction scheme, ultimately, isn't Mel Laird. Who they end up using for this obstruction effort is the Chairman of the Republican National Committee at the time, a man by the name of George Herbert Walker Bush.
Rachel Maddow: The future President of the United States, George Bush, gets enlisted in this effort to reach out to Senator Glenn Beall to have him pressure his brother to shut down this investigation. Listen to this phone call between Richard Nixon and Al Haig. The audio here is a little bit distorted, but the first voice here is Nixon, and he's talking to Haig about enemies of the White House who are now going after everybody.
Richard Nixon: It's amazing, isn't it? By golly, the way they start, they go after everybody, don't they?
Al Haig: Yeah, they're after everybody. And the Vice President has been very nervous. He called me three times.
Rachel Maddow: I know. I know, and you decided to have Harlow try to — Well, he isn't here.
Al Haig: He isn't here, so I did it through George Bush on the first run.
Richard Nixon: That's good. That's good.
Rachel Maddow: "I did it through George Bush on the first run." This didn't ever stick to George HW Bush, maybe because these audiotapes have just been collecting dust for the last four decades. But George Bush was brought in to a potentially criminal effort organized and directed by the then-President of the United States, Richard Nixon, to obstruct an ongoing investigation into his Vice President.
Rachel Maddow: And George Bush did it. US Attorney George Beall ended up donating his papers to Frostburg State University in Maryland. And if you go to those archives, you can now see an official memo-to-file that US Attorney George Beall wrote that summer of 1973. In that memo to file, it is made quite clear that after the White House came up with this plan, George HW Bush did, in fact, contact US Senator Glenn Beall, and he tried to have Senator Glenn Beall get word to his little brother, the US Attorney about this investigation.
Rachel Maddow: This is what he wrote in the file. "With respect to conversations with my brother, Glenn, the discussions were most superficial and very guarded. He occasionally mentioned to me the names of persons who had been to see him or who had called him with respect to this investigation. Names of persons that I remember him telling me about included Vice President Agnew and George Bush."
Rachel Maddow: Now, there are a few amazing things here. First, of course, is that a future US President participated in what was likely a criminal scheme to obstruct justice. But there's also the fact that Richard Nixon and Spiro Agnew would even attempt this sort of thing in the climate of Watergate that they were in.
Rachel Maddow: This was the summer of 1973. The Senate Watergate hearings were on TV every day. The Watergate cover-up was starting to unravel around Richard Nixon. Nixon had just fired his Chief of Staff, HR Haldeman, his White House Counsel John Dean, his Attorney General Richard Kleindienst, his top Domestic Aide John Ehrlichman. It was all supposedly to clean house from the Watergate mess.
Rachel Maddow: But right then, at the same time, Nixon and Agnew decided to undertake a whole separate effort to interfere with a totally unrelated investigation into Agnew. And the final amazing thing here is that the Baltimore federal prosecutors who were building this case against Agnew, at the time, which Agnew and Nixon were actively trying to shut down, they have never known about any of this. 45 years later, this is all brand new to them.
Barney Sklonik: This is an actual conversation?
Mike Yarvitz: Yeah, transcript of an audio recorded conversation.
Barney Sklonik: Whoa.
Mike Yarvitz: That's Barney Skolnik, the lead prosecutor on the team. Remember that audio diary from HR Haldeman?
HR "Bob" Haldeman: The Vice President called me over today and said he had a real problem.
Rachel Maddow: Here's Barney Skolnick learning about that recording for the first time.
Barney Sklonik: Oh, he had an audio diary? Jesus.
Mike Yarvitz: He made the point that George Beall, who's Glenn Beall's brother, is the US Attorney there, and that if Glenn Beall would talk to him, he could straighten it out.
Barney Sklonik: "If Glenn Beall would talk to George, he could straighten it out." Yeah. Well, you want my reaction to this. I mean, you know, it's exactly what you would think. That's the kind of classic crap that we feared might happen is, you know, somebody like Agnew going to somebody like Haldeman, to go to somebody like Glen Beall. I mean, that's — You know, that's the — What our president calls the swamp. I mean, that's — You know, that's the swamp, you know, in operation.
Mike Yarvitz: But you didn't know at the time that it was an operation.
Barney Sklonik: No. Well, I mean, we knew — We had some sense as the whole country did of what kind of administration Nixon, with Haldeman, and Enrlichman, and so on, were running. But we had no knowledge that this was happening.
Rachel Maddow: Here's Ron Liebman, another one of the Baltimore prosecutors, seeing Nixon on tape here talking about destroying a potential witness in their case.
Spiro "Ted" Agnew: There are all kind of rumors.
Richard Nixon: Good God, isn't it awful?
Spiro "Ted" Agnew: But this man is-
Richard Nixon: Well, can we destroy him?
Ron Liebman: "Well, can we destroy him?" Forty-five years later, and my blood still boils when I read stuff like that.
Rachel Maddow: That conversation between Nixon and Agnew in the Oval Office, also, included them strategizing about how to pressure Senator Glenn Beall.
Spiro "Ted" Agnew: Glenn Beall's the only way to influence this.
Richard Nixon: The senator?
Spiro "Ted" Agnew: Yes.
Ron Liebman: This is the Nixon White House. This is what they did across the board.
Mike Yarvitz: I mean, what does — You're a lawyer. What does that look like?
Ron Liebman: Clearly obstruction of justice or attempt to obstruct justice clearly. Clearly.
Mike Yarvitz: If you had known about that at the time, would obstruction have been something in your mind in terms of-
Ron Liebman: You bet. Yeah, you bet. Sure. I think — I don't think it would have been very difficult at all to start investigating obstruction of justice if we had known about this.
Rachel Maddow: Here's Tim Baker. He was the third prosecutor on the team. Tim Baker, himself, is referenced in one of those conversations as one of the fanatical prosecutors that's taking this investigation in a direction they didn't want it to go.
Al Haig: So, if Beall can get his brother, who's the US Attorney, who we appointed, who's a Republican, but who's turned this thing over to two fanatical prosecutors.
Tim Baker: Two fanatical prosecutors. Funny. Well, we were — I'm a fanatical. Boy, once we thought he was guilty, then we were really focused on it. We were going to do this. We were going to get this guy out of there and more.
Rachel Maddow: Tim Baker wasn't the only one of the prosecutors referenced directly in these tapes. Remember that conversation between Nixon and Agnew about getting the lead prosecutor, Barney Skolnik, thrown off the case? Barney Skolnik himself never had any idea about that.
Spiro "Ted" Agnew: Get this thing over with and get this guy, Skolnik, who's a Muskie volunteer, to hell out of his office.
Barney Sklonik: Oh, there's my name. Wow. Agnew said my name. Oh joy. "Get this thing over with, and get this guy Skolnik, who's a Muskie volunteer, the hell out of his office." Oh, man, you got to give me a copy of this.
Mike Yarvitz: You can have it.
Barney Sklonik: Oh, wow. Makes my whole life worthwhile. Oh, that's beautiful. "Get him the hell out of his office." Oh, thank you, my man. This is so beautiful. Michael, you really have — You really have this. This doesn't just make my day. This makes my decade, "Get this guy, Skolnik, who's a Muskie volunteer, the hell out of his office."
Rachel Maddow: These prosecutors who are now reading through these conversations for the very first time, their emotions about this case, and what they're seeing, 45 years later, it's all still very much on the surface for them.
Ron Liebman: It makes your skin crawl, doesn't it? It really makes your skin crawl. Even 45 years later, with all the stuff that we have come across in terms of public corruption, it still makes your skin crawl.
Barney Sklonik: This is essentially somebody under investigation going to an authority — In this case, it happens to be the President — to say not just stop the investigation but get a prosecutor fired for no apparent reason other than he's running the investigation. That's obviously illegal and obstruction of justice.
Barney Sklonik: And to have political pressure put on the lead prosecutor, George, to stop the investigation, again, for no discernable reason, I mean, you know, stop the investigation because statute of limitations has run or, you know, fill in the blank, some legitimate reason but this is, "Stop it because I want it stopped because I am exposed to possible criminal prosecution." Obviously, that's obstruction of justice. I mean, all of these conversations are, if not literally illegal, they are certainly suggesting that illegal things be done.
Rachel Maddow: So, it's remarkable for us to realize that the prosecutors have never known about any of this until now. It's amazing to hear them reacting to it for the first time. But the reason they never knew about it until now is not just amazing. In a sense, it's sort of heroic. Think about what this says, what this means about their boss, George Beall, the Republican US Attorney who was overseeing their investigation.
Rachel Maddow: That coordinated obstruction effort launched by Spiro Agnew and carried out by Richard Nixon and the whole machinery of the White House and the Republican Party, that plan was actually carried out as intended. People close to Richard Nixon, including George HW Bush did, in fact, push this senator who may have owed his seat to the White House, they pushed Senator Glenn Beall to try to influence this investigation.
Rachel Maddow: Spiro Agnew himself, personally, lobbied Senator Glenn Beall over and over again. Agnew's records and papers are now held at the University of Maryland. What you find when you go through those papers, as we did, are multiple face-to-face meetings that Agnew himself held in his office with Senator Glenn Beall. It's all right there in his notes in his daily calendars
Rachel Maddow: This effort to get to that senator, to get him to help them shut down this investigation that his little brother was running, that plan was put into place. And the first part of it worked. Senator Glenn Beall himself took all of that pressure that he was getting, and he did, in fact, reach out to his little brother, George, about it.
Rachel Maddow: In that same memo to file in his papers in the Frostburg State Archive, George says his older brother related to him expressions of concern from George Bush, and Agnew, and others. His senator brother was contacting him, telling him about all the powerful and important people in Washington who'd been in touch with him, concerned about Georgia's investigation. The obstruction effort got to George Beall. And George Beall memorialized that pressure that he was getting for the record, for history, but he stopped it there. We, now, know he never once passed a word of any of it along to his team of young federal prosecutors who were just quietly working that case.
Tim Baker: There wasn't any moment in which the George hesitated at all about this.
Ron Liebman: George never, to me, as far as I know to my colleagues, never once said anything like, "Hey, you know, my brother called, and he says this is really causing a problem. Are we really sure about this? Do we really want to do this?" Nothing like that ever, ever happened.
Barney Sklonik: There was never any. Not only was there never any specific information along those lines, but there was never any indirect indication from the way George spoke to us that anything his brother had said to him had any effect. Whatever they wanted George to do, he didn't do.
Rachel Maddow: If that had happened, there would have been the mutiny of mutinies on the part of Tim, Barney, and me. There would have been a world-class mutiny, but it wouldn't have happened because there's no way that our boss, George Beall, would come near that, 100%.
Rachel Maddow: US Attorney George BeAll was all of 35 years old at the time. He was a Republican on the rise in Maryland. He had his whole career in Republican politics ahead of him, but he refused to bow to that pressure that was coming right at him from this Republican White House through his direct family.
Rachel Maddow: This coordinated obstruction effort that involved Vice President Agnew, President Nixon, HR Haldeman, John Ehrlichman, Al Haig, George Bush, this coordinated effort to shut down an investigation into the sitting Vice President, it failed. And it failed because this Republican US Attorney was in a position of responsibility. He had this investigation to pursue, and he never once blinked.
Rachel Maddow: And so, what happened next when that obstruction effort failed because of him? Richard Nixon had been actively trying to interfere with this investigation on behalf of his Vice President. But when that effort failed, Nixon was more than willing to turn on Agnew in order to save himself. And that is when things went totally off the rails, to the point where Spiro Agnew actually believed that Richard Nixon might be plotting to have him killed.
Male Voice: You say that you were actually fearful that if you did not go along, President Nixon might have ordered you assassinated. Could you explain that?
Rachel Maddow: That is a real live part of this story, and that is still to come. I'm Rachel Maddow. And this is Bag Man.
Rachel Maddow: Bag Man is a production of MSNBC and NBC Universal. This series is executive produced by Mike Yarvitz. It was written by myself and Mike Yarvitz. Editorial and production support from Jonathan Hirsch and Marissa Schneiderman from Neon Hum Media. And, by the way, if you want to see that memo to file that George Beall put in his archives at Frostburg State University, we have posted it at MSNBC.com/bagman, along with a whole bunch of other materials you might want to see from this episode.
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Martin London: My name is Martin London. And in 1973, I was part of the defense team for our client, Spiro T. Agnew, who was Vice President of the United States.
Rachel Maddow: Martin London was an attorney at a prestigious, white-shoe, New York City law firm called Paul Weiss. London had recently wrapped up a high-profile case representing Jackie Kennedy, the former First Lady of the United States. But in the summer of 1973, along with the rest of the country, Martin London was busy following every development of the rapidly unfolding Watergate saga.
John Chancellor: Good evening, it was John Mitchell's turn at the Senate Watergate Committee today. he spent the whole day in the witness chair.
Rachel Maddow: One afternoon, that frantic summer of Watergate, Marty London's law partner got a phone call from an unknown number in Washington DC.
Martin London: He says to me, "Marty, I just got the strangest call. A fellow me," and he says, "He introduces himself. He's from Chuck Colson's firm in Washington, DC. and he asked me if I can come to Washington DC tomorrow morning to meet a new client."
Rachel Maddow: That caller presented Marty London and his law partner Jay Topkis with that cryptic offer about a mystery client who needed representation fast.
Martin London: "Well, that's very interesting. Who is the client?" And he says, "Well, I can't mention his name on the phone. It's so secure. It's so confidential. I'm not allowed to mention his name." So, Jay says, "Well, what is he?" He says, "He's a very high government official." And Topkis says, "Oh, is he a congressman?" The caller says, "Higher." He says, "Is he a senator?" He says, "Higher." He says, "Oh my goodness, is he a Cabinet Official?" He says, "Higher." He says, "Oh my God, you're talking about the President of the United States?" He says, "Not quite so high."
Rachel Maddow: It was early August. Marty London and his law partner hopped on a flight from New York City down to Washington DC to sit down with their new client, the Vice President.
Martin London: I found the Vice President to be everything I did not expect him to be. He was charming, he was soft spoken, he was gracious, he was a nice guy. You would meet him and you would like him.
Rachel Maddow: The reason Vice President Spiro Agnew needed to beef up his legal team, and on very short notice, is because that night, the federal criminal investigation targeting him was about to go public.
Male Voice: This is NBC Nightly News. Tuesday, August 7th. Reported tonight from Washington by John Chancellor.
John Chancellor: Good evening. Washington was stunned today by the disclosure that Vice President Agnew was under criminal investigation by federal authorities in his home state of Maryland. Involved are possible charges of bribery, extortion, and tax evasion. Agnew says he is innocent. A member of his staff said today "You are probably going to hear more that is terribly serious."
Rachel Maddow: The President of the United States was already under investigation in Watergate. And, now, the Vice President was the subject of a criminal bribery-and-extortion investigation of his own. He'd been secretly accepting envelopes of cash inside the White House and inside his own Vice Presidential residence. That investigation had been such a well-kept secret that the day it broke publicly, Agnew's own staff, including top aides like David Keene, they had no idea it had been going on.
David Keene: I was in Hilton Head taking a few days off. And Johnny Damgard called me and said, "Dave, you have to get back here because the Vice President is thinking about canceling his schedule. And there's nothing I can do." He was the scheduler. I said, "What?" You know, he said, "Yeah, there's an investigation going on." And it broke with an article in The Wall Street Journal.
Rachel Maddow: The press, which had been working the Watergate story all summer long, they now had this giant new scandal, and they were instantly all over it.
Ron Liebman: And it took about three seconds for the American press to attack the federal courthouse.
Rachel Maddow: That's Ron Liebman, one of the prosecutors who had been quietly pursuing the case.
Ron Liebman: I remember the FBI came in and talked to us about how we had to secure our files, and we had to put them in the lead file cabinets, and had to take my name out of the out of the directory assistance — phone books in those days — none of which we did. We told them, "Yeah, okay." We're really don't have the time for that right now. "Okay, fine. We'll take care of it." "Are you sure?" "Yeah, yeah, yeah. We will." I mean, the press was — There was a frenzy.
Rachel Maddow: All of this press attention that was now being paid to this team of Baltimore investigators, it was partly because this was a giant case they had broken open, a bribery scandal involving the sitting Vice President.
Rachel Maddow: But the other reason they were the focus of so much attention at that time is because the target of that investigation, the Vice President, had decided that his defense would be about them. His defense would be that there was this biased and partisan group of investigators who were unfairly persecuting him from inside his own Justice Department for their own treacherous reasons.
Spiro "Ted" Agnew: Some Justice Department officials have decided to indict me in the press, whether or not the evidence supports their position. This is a clear and outrageous effort to influence the outcome of possible grand jury deliberations. I will fight. I will fight to prove my innocence, and that I intend to remain in the high office to which I have been twice elected.
Rachel Maddow: Spiro Agnew, with his back against the wall, with the investigation of him now public, he started attacking that investigation as a witch-hunt, as a witch hunt led by politically-motivated, biased, bad actors inside the Justice Department.
Rachel Maddow: This was something new in American politics. A sitting occupant of the White House, under criminal investigation, trying to save himself by declaring war on his own Justice Department.
Rachel Maddow: You're listening to Bag Man. I'm your host Rachel Maddow.
Male Voice: For the first time in American history, a grand jury today began hearing evidence, which could link a vice president to criminal charges.
Spiro "Ted" Agnew: They are trying to recoup their reputation at my expense. I'm a big trophy.
Male Voice: Republicans are hearing from their constituents that this is our guy.
Male Voice: Will you inform me what he's done? No one has. That's not American justice
Chris Hayes: Hey, it's MSNBC's Chris Hayes. If you enjoyed Bag Man, be sure to check out my friend, Rachel Maddow, on my podcast, Why is This Happening?, where I get the opportunity to dig deep into the forces behind the stories playing out in the news in order to understand why certain cultural and political phenomena came to be. Rachel joins me to talk about covering the news in this unprecedented political moment. We also talk all about Bag Man, and how this incredible podcast came to be. So, click on over and check out Why is This Happening? And you can listen now wherever you get your podcasts.
Rachel Maddow: Episode 3: Hang in There, Baby.
Rachel Maddow: The 1970s Republican Party was a big tent political party. It was the Barry Goldwater Libertarian Republicans of the '60s. It was right-wing conservatives, who would later make up the Reagan Revolution. There were moderate and liberal Republicans, but none of those ideological slivers of the party had a monopoly on the energy and the legwork that it takes to really get stuff done in politics. Inside the Republican Party, everybody knew who the real activists were, the real soldiers who really got stuff done, Republican women.
David Keene: I mean, the two arms of the Republican Party that were important were the young Republican Federation and the Women's Federation because that's where the ground troops came from. The Democrats had the unions. We had the women.
Rachel Maddow: That's David Keene again. He was the top political aide for Vice President Agnew in 1973. And that fall, when Agnew was looking for a place to mount his big public defense against the investigation into him, when he was looking for friendly territory, David Keene knew there was no better place than an event that was about to pop up on the political calendar, the Annual Convention of the National Federation of Republican Women.
David Keene: That's the place to do it. That's your army.
Rachel Maddow: The National Federation of Republican Women held their convention in Los Angeles that fall of 1973. In the fall of '73, Spiro Agnew was fighting for his political life.
Garrick Utley: Time Magazine today quotes officials in the Department of Justice as saying that the case against Vice President Agnew is growing steadily stronger and that an indictment appears inevitable.
Rachel Maddow: Agnew now had lawyers like Marty London who are fighting his battles in court, but Agnew himself had devised a very specific PR strategy for his own survival, a full-frontal assault on the Justice Department that was investigating him, attack the investigators in order to discredit the investigation. And that gathering of Republican women in Los Angeles, that would be his venue for launching that public attack.
Male Voice: We interrupt our regularly scheduled programming to bring you this NBC News Special Report. Vice President Spiro Agnew is about to speak in Los Angeles.
Rachel Maddow: If you want to get a sense for how the hardcore Republican base felt about Spiro Agnew, even when he was in the worst legal trouble of his life, just listen to the reception he got from that crowd of Republican women in Los Angeles that day.
Female Voices: Fight Agnew, fight. Fight Agnew, Fight. Fight Agnew, fight. Fight Agnew, fight. Fight Agnew, fight.
Rachel Maddow: Even before he showed up, the hall was electric. These Republican women activists were holding homemade signs that said, "Spiro is My Hero." One newspaper reporter in the hall said the enthusiasm these Republican women had for Agnew was maybe surpassed only by the hostility they had for the press that was there to cover him.
Rachel Maddow: That reporter wrote, "Some women approached newsmen ready for a fight. Several women took notes or tape-recorded Agnew's speech themselves, so they could report on it when they returned home. A precaution they said in case the papers did not tell the entire story."
Rachel Maddow: This was a crowd that was angry at the press and they had full-faith in the man they were there to see. And what Spiro Agnew unleashed in that packed convention hall was an all-out attack on the Justice Department, the likes of which nobody had really seen before in US politics.
Spiro "Ted" Agnew: Irrespective of the claims of certain individuals in the Department of Justice, it was not through my fault that this became a non-secret procedure, but through deliberately contrived actions of individuals in the prosecutorial system of the United States, and I regard those as outrageous and malicious. And if we find, in fact, that in Baltimore or in Washington, individuals employed by the Department of Justice have abused their sacred trust and forsaken their professional standards, then I will ask the President of the United States to summarily discharge those individuals.
Rachel Maddow: The Vice President there was calling his own Justice Department malicious and out of control. And with that crowd of Republican women hanging on his every word, he then started targeting specific officials inside the Justice Department, including the head of the Criminal Division who was directly involved in his case.
Spiro "Ted" Agnew: I say this to you, the conduct of high individuals in the Department of Justice, particularly the conduct of the chief of the Criminal Investigation Division of that department, is unprofessional, and malicious, and outrageous if I am to believe what has been printed in the news magazines and said on the television networks of this country, and I have had no denial that that is the case.
Spiro "Ted" Agnew: People will say to me "Why? You don't make sense. Why should a Republican Department of Justice and a Republican prosecutor attempt to get you?" Well, I don't know all the answers, but I would say this, that individuals in the upper professional echelons of the Department of Justice have been severely stung by their ineptness in the prosecution of the Watergate case, and they are trying to recoup their reputation at my expense. I'm a big trophy.
Rachel Maddow: Now, keep in mind Richard Nixon, who at this point was neck deep in Watergate trouble, he had not even taken the pretty extraordinary step of attacking his Justice Department, at least, not in public, not like this. But here was the Vice President at a Republican rally accusing officials in the Justice Department of professional misconduct, accusing the investigators of leaking information about him to the press, pledging to seek out bad actors participating in the investigation to have them purged from the department.
Spiro "Ted" Agnew: I want to make another thing so clear that it cannot be mistaken in the future, because of these tactics, which have been employed against me, because small and fearful men have been frightened into furnishing evidence against me, they have perjured themselves in many cases it's my understanding, I will not resign if indicted, I will not resign if indicted.
Rachel Maddow: The strategy here wasn't to challenge the specific and credible allegations of wrongdoing that were now public. This was a strategy to smear the investigators who were looking into him, to smear them as biased and corrupt, to accuse them of leading a witch-hunt against him. This was a strategy, specifically, to convince the Republican base, the party activists in that crowd and Republicans watching at home, that the corrupt Justice Department and the biased press were out to get him, and his supporters shouldn't believe either of them. This is a deliberate strategy and it worked. At least, in the short run, it worked.
Rachel Maddow: After that speech, Agnew started receiving hundreds of letters from supporters all across the country. There are boxes and boxes of these letters that you can see in Agnew's files at the University of Maryland to this day, the letters he received and even the replies that he sent.
Rachel Maddow: One couple from Kansas City wrote, "Dear Mr. Vice President we believe in your innocence. Give them hell. The press and the liberals are out to get you and all conservatives." One school-teacher from Colorado wrote to him, "I'm sick of what the media and the Democrats are doing. They lost, and they can't take it.".
Rachel Maddow: A man named Joe Taylor from Missouri wrote, "Dear Veep. Give the god damned sons-of-bitches hell. It's a good thing somebody in Washington has guts enough to say something and fight back." Agnew, actually, responded to that one. He wrote back, "Dear Mr. Taylor. Thank you for your very kind letter and for your excellent advice. Warm regards."
Rachel Maddow: Again, the allegations that were public at that point were that Agnew had been illegally extorting people throughout his time in public office, up to and including accepting cash payoffs throughout his time in the White House. But Republicans across the country really didn't seem to mind.
Rachel Maddow: And they didn't just write letters to Spiro Agnew about it. The Attorney General Elliot Richardson also started getting these letters. But his were just bins, and bins, and bins full of hate mail. "I hope you and all your smart Justice Department lawyers are pleased," one woman wrote to him, "I feel you have done a great wrong to this nation. And one day, you are going to have to pay."
Rachel Maddow: One woman from Lubbock, Texas wrote, "Are you a Democrat or has this been done by the Democrat Party? If so, that explains it, for it looks like they can't bear for the Republicans to get any glory or praise for anything." One man wrote, "I believe there is deliberate malice from the liberal news media and also from politicians who fear Mr. Agnew's appeal to the average American."
Rachel Maddow: Agnew was defending himself, not by attacking the actual case against him, but by attacking the institution of the Department of Justice and the specific people bringing the case against him. These three young prosecutors who had led the case against Agnew: Tim Baker, Ron Liebman, Barney Skolnick, they were all now fair game. Here's Tim Baker.
Tim Baker: I remember Agnew saying that Skolnick was a Muskie volunteer and I, horror, had been to show what a complete Pinko I was. I had been a Peace Corps volunteer.
Rachel Maddow: Discredit the investigation by going after the investigators, that was the first part of Agnew strategy. Agnew's legal team had something else up their sleeves. That's next.
John Chancellor: Good evening. In the matter of possible criminal charges against Vice President Agnew, it was a dizzying, bewildering, and historic day.
Rachel Maddow: Once the investigation of Spiro Agnew went public in the summer of 1973, something started happening in the coverage of the scandal that the Vice President's lawyers quickly tried to turn to their advantage. They noticed that some articles about the investigation seemed to contain lots and lots of very specific details about the case, details that were supplied to reporters by anonymous sources. Here's Agnew's defense lawyer Marty London.
Martin London: We were made aware of great varieties of newspapers who had always begun their articles with, "High sources in the Justice Department have told us that," or "High government officials report to us that," but there was no question, this was a very leaky investigation.
Rachel Maddow: Agnew's public defense at that point was to portray the Justice Department as corrupt, portray the media as out to get him. All of these leaks to the press. This was a golden opportunity for Agnew's lawyers to nail both of those targets at once, the Justice Department for leaking and the horrible press for publishing those leaks without unnamed sources.
Rachel Maddow: With that two-birds-one=stone idea as their basic strategy, Agnew's legal team decided they would pursue the leaks about the case in court. They came up with a fairly radical plan to try to prove that the Justice Department was the source of those leaks to the press. Their plan was to put individual news reporters under oath and try to force them to testify about their sources.
Rachel Maddow: Agnew already had a well-earned reputation for being hostile to the press. Well, now, his lawyers would try to turn that into legal strategy too. The question was, would the court go along with it? Marty London's request to the judge, his demand to the judge, was pretty extraordinary.
Martin London: I reached into my briefcase and pulled out of an order that I had written the day before. I said, "Here's an order. All you got to do is sign it." What the order does is gives us the opportunity to put these reporters under oath. If you want to know if they're telling the truth, let's put them under oath. And while we're at it, taking their depositions, let's take the depositions of the government's officials too.
Martin London: The judge said, "Well, that seems like a pretty sensible idea to me." George Bill, I think he almost had a coronary. He was a young fellow. I was if I was afraid for his health. They got red in the face. They said, "This is outrageous." They said, "This has never been done before. There's no rule permitting this. There's no precedent for this. It's just not right." And the judge said, "Where do I sign?" And that's really, to use a legal expression, that's when the shit hit the fan.
Rachel Maddow: Agnew's legal team was trying to change the story, so it was no longer about the alleged criminal activity of the Vice President, it was instead about criminal misconduct on the part of these investigators.
Martin London: I was a lawyer here. I'm not a judge, and I'm not a philosopher king. In this case, it was in my interest to get as much information from that journalist as I could.
Rachel Maddow: Marty London got that judge to sign off on this order, to haul in news reporters, and put them under oath. And then, he sent out a raft of subpoenas to reporters from The New York Times, The Washington Post, The NBC News, Time Magazine, Newsweek magazine, nine reporters in all from the biggest news outlets in the country, demanding their testimony.
Martin London: The press was up in arms, and they had fashioned lapel buttons, you know, it said, "Free the Agnew nine," because they all swore they'd go to jail before they would testify. And I got a call from a reporter from a local New York newspaper who says, "Marty, I'm in deep shit here. You killed me." I said, "What did I d?" He said, "I didn't get a subpoena.".
Martin London: We had, at that time, what was known as subpoena envy. Everybody wanted a subpoena. I said, "Well, look, I really — I apologize. No hard feelings. I only served subpoenas on people who wrote stories that said they had sources." And he said, "I did that. I did that." I said, "Send me your article, and I'll send you a subpoena." So, he sent me the article, and I sent him with a subpoena. And the Free the Agnew Nine became Free the Agnew Ten.
Rachel Maddow: This strategy from the Agnew legal team turned into a bit of a circus, but that was by design. It put all sorts of pressure on the Justice Department about these supposed leaks. And the American press corps, which had been covering the actual allegations against the Vice President up until that point, they got completely sideways defending themselves over these subpoenas.
David Brinkley: So, they are showering subpoenas all over town, and ordering reporters to come to Baltimore, and tell where they got their news. Those responding so far say they will tell nothing. Whether or not these lawyers learn much about that, they will have succeeded, to some extent, in turning the public's attention away from their client, and turning the attention and some abuse on the press.
Rachel Maddow: So, the American press corps was now under attack by the Vice President and his lawyers, rather gleefully, and the Justice Department too. The Baltimore prosecutors who were still assembling their case, they were not only being attacked publicly by the Vice President, they were now also being threatened by Agnew's lawyers as potential criminals themselves. Here's Barney Skolnik.
Barney Skolnik: I mean, it was — it really was ludicrous. I mean, we're investigating the case, and suddenly, people are coming from Washington to present us with — You know, strangers are coming from the Department of Justice in Public Integrity Section or something and saying, "Here, this is an affidavit about, you know, whether or not you have leaked, and you must fill it out, and you must sign it." Everybody. I mean, it wasn't just — It was the secretaries. I mean, it was-
Rachel Maddow: This was a maximum pressure campaign that Agnew's lawyers launched against the Justice Department and these individual prosecutors all to try to put them on the defensive. And to this day, Agnew's lawyers believe, Marty London believes that this pressure worked. Prosecutors themselves, like Tim Baker, they still bristle at that idea. The first voice you'll hear is producer Mike Jarvis.
Mike Yarvitz: He thinks that the pressure that they were able to put on the Justice Department about this issue of leaks-
Tim Baker: Phooey.
Mike Yarvitz: … was-
Tim Baker: Bullshit.
Mike Yarvitz: … what ultimately-
Tim Baker: Phooey. There wasn't any pressure about leaks. We weren't leaking anything. We knew it. They weren't going to be able to prove that we leaked anything because we hadn't. The pressure was get the guy out of the Vice Presidency. That was always the pressure.
Rachel Maddow: Whether they had leaked anything or not, this was a strategy. The Vice President was trying to save himself by targeting the press, and by targeting these prosecutors, and dragging them through the mud. And the prosecutors couldn't publicly defend themselves. Instead, they reacted to that strategy from Agnew by doubling down on what they could do, by doubling down on their case.
Ron Liebman: That was noise, noise to be pushed aside. We knew that. That's all designed to distract you. Don't let it distract you. We were too good for that. Kids that we were, we were too good for that.
Rachel Maddow: For all of that noise and distraction that Agnew brought to bear on this investigation and against the prosecutors, it didn't just come from him and his lawyers. He had political backup. A whole army of Republicans in Congress who are about to rush to his defense.
Male Voice: At the Capitol, the Vice President got some welcome support from fellow Republicans, GOP senators of all shades rose to his defense, suggesting he may be the victim of politically-inspired rumors.
Rachel Maddow: Republicans in Congress knew in 1973, when their own Vice President got in serious trouble, that it was in their own best interest to try to save him. And that may, in part, just have been raw partisan instinct. But they also knew that Spiro Agnew still had the Republican base wrapped around his finger, regardless of the allegations against him.
David Keene: It was easy to rally support for Ted Agnew. I mean, people loved him.
Rachel Maddow: It was David Keene's job to rally Republican support for Agnew in Congress.
David Keene: The Republicans were hearing from their constituents that, "This is our guy," but they liked him as well.
Rachel Maddow: When the criminal allegations against Agnew came to light, rather than turning against him or waiting for the investigation to play out, Republicans in Congress rushed to give him as much cover as they could. They adopted his line that he was the victim of a witch hunt.
James Buckley: I believe that the man has been put under incredible pressure because of the habit we've gone into a trial by print, based on third-hand leaks of information that may or may not be sound.
Carl Curtis: To condemn someone, to have innuendo, to raise questions, "When is he going to retire? Will he be impeached?" when no one has made a specific charge against him, damages him all across the country. And furthermore, it's damaging our country.
Rachel Maddow: Even the discussion that Agnew might need to go, even talking about that possibility, in the words of that Republican senator, that was damaging to the country. Republicans in Congress went after alleged leaks in the case. They went after the news media for reporting the leaks. This was not, "Let's allow the investigation to run its course." Republicans instantly circled the wagons around their man in the White House who was in legal trouble, but still as popular as ever in their party.
Barry Goldwater: He's innocent until somebody has proven guilty. And if we've reached a point in this country where we're guilty just because some newspaper or some lesser member of the Attorney- General's office hints that we are, then we've come to the end of justice in this country.
Rachel Maddow: That was Republican Senator Barry Goldwater of Arizona talking about a lesser member of the Attorney General's office. He'd later say, "I don't give a damn if Agnew is as guilty as John Dillinger. In his view, Agnew was getting railroaded, railroaded by the press and by the Justice Department. That was the way Republicans talked about this case. This was Republican Senator Carl Curtis from Nebraska.
Carl Curtis: Will you inform me what he's done? No one has. Now, that's not American justice. That may be a certain brand of American newscasting, but it's not what prevails in the courtroom. We lawyers have a better record than that.
Male Voice: Do you feel there's some kind of plot against the Vice President?
Carl Curtis: I think there's a scheme on to destroy the President, and if they can drag down his Vice President, that helps. Somebody got John F. Kennedy. I believe that same sadistic element is very tiny. But you add to that the professional Nixon haters, you've got a bad combination. Here, Mr. Agnew hasn't been accused of a specific single transaction. And for me, to say iffy things about what would happen if he resigned, I don't think he should resign, or he will resign.
Rachel Maddow: Spiro Agnew, in his public campaign to beat back the allegations against him, he had backup, elected Republicans coming to his defense, publicly casting doubt on the investigation, attacking and disparaging the investigators. Two House Republicans even traveled over to the White House one afternoon that fall to personally deliver to Agnew a giant physical display of support from his fellow Republicans. It was a larger-than-life card signed by a hundred Republicans in Congress. The image on the front of the card was a cat barely clinging to a tree branch by its claws. The caption underneath said, "Hang in there, Baby.".
Rachel Maddow: Republicans in Congress had taken sides. They were firmly behind their Vice President, even though he was under criminal investigation. What those Republicans didn't know at the time though, what only a handful of people inside the White House knew, was that Spiro Agnew wasn't just counting on vocal support from the Republican base and vocal support from Republicans in Congress. He also had a private plan. He was undertaking an elaborate, behind-the-scenes effort to obstruct the investigation, to try to shut the investigation down. It was an effort to use his political power from his position inside the White House to make the investigation go away. It involved enlisting the help of Richard Nixon's inner circle, people like White House Chief of Staff HR Haldeman.
HR Haldeman: The Vice President called me over today and said he had a real problem.
Rachel Maddow: It also included the assistance of President Richard Nixon himself.
Richard Nixon: It's amazing, isn't it? By golly, the way they start to go after everybody, don't they?
Alexander Haig: You know, they're after everybody. And the Vice President has been very nervous.
Rachel Maddow: This part of the story has never really been told in depth before. The investigators themselves had no idea that any of this was going on at the time. They're about to hear it here for the first time.
Tim Baker: I never knew this.
Barney Skolnik: Ways they can pressure George. Wow.
Mike Yarvitz: I mean what does — you're a lawyer — what does that look like?
Ron Liebman: Clearly obstruction of justice or attempt to obstruct justice, clearly.
Rachel Maddow: That part of the story is next time. I'm Rachel Maddow. And this is Bag Man.
Rachel Maddow: Bag man is a production of MSNBC and NBC Universal. This series is executive produced by Mike Yarvitz. It was written by myself and Mike Yarvitz. Editorial and production support from Jonathan Hirsch and Marissa Schneiderman from Neon Hum Media. And you can find much more about this story on our Web site which is MSNBC.com/BagMan.
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FULL TRANSCRIPT: Schumer and Pelosi's full response to Trump's border address (transcribed by Sonix)
Nancy Pelosi: Good evening. I appreciate the opportunity to speak directly to the American people tonight about how we can end this shutdown and meet the needs of the American people. Sadly, much of what we heard from President Trump throughout this senseless shutdown has been full of misinformation and even malice. The President has chosen fear. We want to start with the facts.
Nancy Pelosi: The fact is on the very first day of this Congress, House Democrats passed Senate Republican legislation to reopen government and fund smart, effective border security solutions. But the President is rejecting these bipartisan bills, which would reopen government, over his obsession with forcing American taxpayers to waste billions of dollars on an expensive and ineffective wall, a wall he always promised Mexico would pay for.
Nancy Pelosi: The fact is President Trump has chosen to hold hostage critical services for the health, safety, and well-being of the American people and withhold the paychecks of 800,000 innocent workers across the nation, many of them veterans. He promised to keep government shut down for months or years, no matter whom it hurts. That's just plain wrong.
Nancy Pelosi: The fact is we all agree we need to secure our borders, while honoring our values. We can build the infrastructure and roads at our ports of entry. We can install new technology to scan cars and trucks for drugs coming into our nation. We can hire the personnel we need to facilitate trade and immigration at the border. We can find more innovation to detect unauthorized crossings.
Nancy Pelosi: The fact is the women and children at the border are not a security threat. They are humanitarian challenge, a challenge that President Trump's own cruel and counterproductive policies have only deepened.
Nancy Pelosi: And the fact is President Trump must stop holding the American people hostage, must stop manufacturing a crisis, and must reopen the government. Thank you. Leader Schumer.
Chuck Schumer: Thank you, Speaker Pelosi. My fellow Americans, we address you tonight for one reason only, the President of the United States, having failed to get Mexico to pay for his ineffective, unnecessary border wall, and unable to convince the Congress or the American people to foot the bill, has shut down the government.
Chuck Schumer: American democracy doesn't work that way. We don't govern by temper tantrum. No president should pound the table and demand he gets his way, or else, the government shuts down, hurting millions of Americans who are treated as leverage. Tonight, and throughout this debate, and throughout his presidency, President Trump has appealed to fear, not facts. Division, not unity.
Chuck Schumer: Make no mistake. Democrats and the President both want stronger border security. However, we sharply disagree with the President about the most effective way to do it. So, how do we untangle this mess? Well, there is an obvious solution. Separate the shutdown from arguments over border security. There is bipartisan legislation, supported by Democrats and Republicans, to reopen government while allowing debate over border security to continue.
Chuck Schumer: There is no excuse for hurting millions of Americans over a policy difference. Federal workers are about to miss a paycheck. Some families can't get a mortgage to buy a new home. Farmers and small businesses won't get loans they desperately need.
Chuck Schumer: Most presidents have used Oval Office addresses for noble purposes. This President just used the backdrop of the Oval Office to manufacture a crisis, stoke fear, and divert attention from the turmoil in his Administration.
Chuck Schumer: My fellow Americans, there is no challenge so great that our nation cannot rise to meet it. We can reopen the government and continue to work through disagreements over policy. We can secure our border without an ineffective, expensive wall. And we can welcome legal immigrants and refugees without compromising safety and security. The symbol of America should be the Statue of Liberty, not a 30-foot wall.
Chuck Schumer: So, our suggestion is a simple one. Mr. President, reopen the government, and we can work to resolve our differences over border security, but end this shutdown now. Thank you.
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FULL TRANSCRIPT: Trump’s full speech from Oval Office on shutdown and border wall (Full national address) (transcribed by Sonix)
President Donald Trump: My fellow Americans, tonight, I’m speaking to you because there is a growing humanitarian and security crisis at our southern border.
President Donald Trump: Every day, Customs and Border Patrol agents encounter thousands of illegal immigrants trying to enter our country. We are out of space to hold them, and we have no way to promptly return them back home to their country. America proudly welcomes millions of lawful immigrants who enrich our society and contribute to our nation, but all Americans are hurt by uncontrolled illegal migration.
President Donald Trump: It strains public resources and drives down jobs and wages. Among those hardest hit are African-Americans and Hispanic-Americans. Our southern border is a pipeline for vast quantities of illegal drugs including meth, heroin, cocaine, and fentanyl. Every week, 300 of our citizens are killed by heroin alone, 90% of which floods across from our southern border. More Americans will die from drugs this year than were killed in the entire Vietnam War.
President Donald Trump: In the last two years, ICE officers made 266,000 arrests of aliens with criminal records, including those charged or convicted of 100,000 assaults, 30,000 sex crimes, and 4000 violent killings. Over the years, thousands of Americans have been brutally killed by those who illegally entered our country, and thousands more lives will be lost if we don’t act right now.
President Donald Trump: This is a humanitarian crisis, a crisis of the heart, and a crisis of the soul. Last month, 20,000 migrant children were illegally brought into the United States, a dramatic increase. These children are used as human pawns by vicious coyotes and ruthless gangs. One in three women are sexually assaulted on the dangerous trek up through Mexico. Women and children are the biggest victims, by far, of our broken system.
President Donald Trump: This is the tragic reality of illegal immigration on our southern border. This is the cycle of human suffering that I am determined to end. My administration has presented Congress with a detailed proposal to secure the border and stop the criminal gangs, drug smugglers, and human traffickers. It’s a tremendous problem.
President Donald Trump: Our proposal was developed by law enforcement professionals and border agents at the Department of Homeland Security. These are the resources they have requested to properly perform their mission and keep America safe. In fact, safer than ever before.
President Donald Trump: The proposal from Homeland Security includes cutting-edge technology for detecting drugs, weapons, illegal contraband, and many other things. We have requested more agents, immigration judges, and bed space to process the sharp rise in unlawful migration fueled by our very strong economy.
President Donald Trump: Our plan also contains an urgent request for humanitarian assistance and medical support. Furthermore, we have asked Congress to close border security loopholes, so that illegal immigrant children can be safely and humanely returned back home.
President Donald Trump: Finally, as part of an overall approach to border security, law enforcement professionals have requested $5.7 billion dollars for a physical barrier. At the request of Democrats, it will be a steel barrier rather than a concrete wall. This barrier is absolutely critical to border security. It’s also what our professionals at the border want and need. This is just commonsense.
President Donald Trump: The border wall would very quickly pay for itself. The cost of illegal drugs exceeds $500 billion dollars a year. Vastly more than the $5.7 billion dollars we have requested from Congress. The wall will also be paid for indirectly by the great new trade deal we have made with Mexico.
President Donald Trump: Senator Chuck Schumer, who you will be hearing from later tonight, has repeatedly supported a physical barrier in the past, along with many other Democrats. They changed their mind only after I was elected president. Democrats in Congress have refused to acknowledge the crisis, and they have refused to provide our brave border agents with the tools they desperately need to protect our families and our nation.
President Donald Trump: The Federal Government remains shut down for one reason and one reason only because Democrats will not fund border security. My administration is doing everything in our power to help those impacted by this situation, but the only solution is for Democrats to pass a spending bill that defends our borders and reopens the government.
President Donald Trump: This situation could be solved in a 45-minute meeting. I have invited Congressional leadership to the White House tomorrow to get this done. Hopefully, we can rise above partisan politics in order to support national security.
President Donald Trump: Some have suggested a barrier is immoral. Then, why do wealthy politicians build walls, fences, and gates around their homes? They don’t build walls because they hate the people on the outside but because they love the people on the inside. The only thing that is immoral is the politicians to do nothing and continue to allow more innocent people to be so horribly victimized.
President Donald Trump: America’s heart broke the day after Christmas when a young police officer in California was savagely murdered in cold blood by an illegal alien who just came across the border. The life of an American hero was stolen by someone who had no right to be in our country. Day after day, precious lives are cut short by those who have violated our borders.
President Donald Trump: In California, an Air Force veteran was raped, murdered, and beaten to death with a hammer by an illegal alien with a long criminal history. In Georgia, an illegal alien was recently charged with murder for killing, beheading, and dismembering his neighbor. In Maryland, MS-13 gang members who arrived in the United States, as unaccompanied minors, were arrested and charged last year after viciously stabbing and beating a 16-year-old girl.
President Donald Trump: Over the last several years, I’ve met with dozens of families whose loved ones were stolen by illegal immigration. I’ve held the hands of the weeping mothers and embraced the grief-stricken fathers. So sad, so terrible. I will never forget the pain in their eyes, the tremble in their voices, and the sadness gripping their souls. How much more American blood must we shed before Congress does its job?
President Donald Trump: For those who refuse to compromise in the name of border security, I would ask, imagine if it was your child, your husband, or your wife whose life was so cruelly shattered and totally broken? For every member of Congress, pass a bill that ends this crisis. To every citizen, call Congress and tell them to finally, after all of these decades, secure our border.
President Donald Trump: This is a choice between right and wrong, justice and injustice. This is about whether we fulfill our sacred duty to the American citizens we serve. When I took the oath of office, I swore to protect our country, and that is what I will always do. So, help me God. Thank you and good night.
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Rachel Maddow: Richard Nixon and Spiro Agnew were officially sworn into office for a second term on January 20th, 1973.
John Chancellor: And welcome to the 47th Inaugural of an American President. David Brinkley and I here to cover that, something the United States has been doing since 1789 …
Rachel Maddow: The festivities that day were a celebration of what had just been a political annihilation. Nixon got 520 electoral votes that year. George McGovern got 17. The Nixon-Agnew ticket won every state in the country except Massachusetts. Newly re-elected Vice President Agnew celebrated that night with his wife, Judy, at a party that was thrown in their honor at the Smithsonian.
Judy Agnew: This time, I know more or less what to expect.
Male Voice: What do you expect, Mrs. Agnew?
Judy Agnew: Oh, what do I expect? Well-
Spiro "Ted" Agnew: She expects to have fun.
Judy Agnew: Fun, right. I expect to be much more relaxed this time.
Rachel Maddow: Spiro Agnew was in triumphant good spirits that night, blissfully unaware of the danger that was unfurling for him just a short drive up the Baltimore Washington Parkway.
Rachel Maddow: In Baltimore, Maryland, just days before that inauguration, a team of three young federal prosecutors were preparing to unleash a blizzard of federal subpoenas with no warning.
Tim Baker: And we put together a team of IRS agents, and we had all 50 subpoenas served on a Monday morning.
Rachel Maddow: That's Tim Baker, one of the federal prosecutors who worked up these subpoenas out of the US Attorney's office in Maryland. These prosecutors were hoping to bust open a political bribery scheme in local Maryland politics. In terms of who exactly they thought they would nab though, the expectations, at least, early on, were relatively low.
Ron Liebman: And I think the general thinking was maybe we'd be able to find a corrupt Congressman, maybe a State Legislator. I think that's what the level of expectation.
Rachel Maddow: That's Ron Liebman. He was the second prosecutor on the team. And you can hear from him there that this was a little bit of a fishing expedition. But these prosecutors did have one particular fish in mind. They were after the head of the county government, the Baltimore County executive at the time who was a Democrat named Dale Anderson.
Barney Skolnik: The word is, you know, the word on the street, the rumor, the scuttlebutt is that Dale Anderson is corrupt and is taking bribes.
Rachel Maddow: That's Barney Skolnick, the lead prosecutor on the team. What he, and Tim Baker, and Ron Liebman started to uncover evidence of was that corruption scheme that they'd been hearing all these rumors about, that County Executive Dale Anderson was taking cash payoffs as bribes and kickbacks for handing out county contracts.
Male Voice: Anderson was cited on 39 counts involving more than $46,000 in contracting kickbacks.
Rachel Maddow: This local official, Dale Anderson, was their big fish. And these prosecutors were now getting the goods on him and on this big bribery scheme in that specific county government. But here's the thing, the man who had Dale Anderson's job right before he did was just then being sworn in for his second term as Vice President of the United States.
Male Voice: Off behind and out of power range, Vice President Agnew has just gotten into his limousine with Mrs. Agnew. Presidential motorcade is lining up here on the south lawn of the White House.
Rachel Maddow: Spiro Agnew, before he ever got to the White House, began his political career in that county. He had been Baltimore County Executive for four years. And, now, the guy who had that job right after him was being busted for taking bribes in what was starting to look like a pretty slick, well-established, smooth-running bribery kickback and corruption criminal enterprise.
Rachel Maddow: Had Vice President Agnew taken part in running that same criminal scheme while he was in that job? What prosecutors didn't know at that moment, but what Spiro Agnew very much knew that night while he was celebrating his re-election at the Smithsonian is that not only had he taken part in that same criminal scheme back then; in fact, he had just accepted an envelope stuffed with cash.
Rachel Maddow: I'm your host Rachel Maddow. And this is Bag Man: The Wild and Untold Story of the Presidential Line of Succession, Impeachment, Indictment, and Panic in the White House.
Male Voice: Good evening. Washington was stunned today by the disclosure that Vice President Agnew is under criminal investigation by federal authorities in his home state of Maryland.
Male Voice: I read his expression as saying, "I need this right now like I need another hole in the head."
Male Voice: This was this was like opera, you know, on the grand scale. It really was.
Spiro "Ted" Agnew: I will not resign if indicted. I will not resign if indicted.
Male Voice: The constitutional problems raised by the Agnew investigation aren't bewildering. We've never had a problem like this one before.
Female Voice: The news breaks, details start pouring in.
Male Voice: All the breaking news items. You've got some news on the FBI investigation.
Female Voice: How will you keep up? TuneIn Premium exclusively brings you live commercial free news, so you can hear 24/7 breaking news without the breaks.
Male Voice: A trillion dollar market, and it's 250 billion, and it has to get to a trillion.
Female Voice: Try TuneIn Premium for seven days free and never miss the action as it happens. Hear it now, hear it live on TuneIn.
Rachel Maddow: Episode 2: Crawling In.
Richard Nixon: As the new Attorney General, I up today named Elliot Richardson, a man of unimpeachable integrity and rigorously high principle.
Rachel Maddow: Elliot Richardson had just become the new Attorney General of the United States in the Spring of 1973. He'd been Nixon's Secretary of Defense. He was Health Secretary before that. But from the moment that he became the Attorney General, Elliot Richardson's life was consumed by the Watergate Scandal.
Elliot Richardson: I have decided that I will, if confirmed, appoint a special prosecutor and give him all the independence, authority, and staff support needed to carry out the task entrusted to him.
Rachel Maddow: One of Richardson's closest aides at the time was a young lawyer named JT Smith.
JT Smith: He knew that Nixon was under a cloud. He didn't know what was in the tapes, but the White House didn't seem eager for the tapes to see the light of day. He knew that the mood in the White House on the part of the President and his staff was quite bleak.
Rachel Maddow: That summer though, Attorney General Elliot Richardson also knew something else. He held a secret that only a handful of people in the entire government knew. In the middle of that summer, right in the middle of Watergate. Elliot Richardson got a visit from his US Attorney in Maryland, George Beall and Beall's team of three assistant US attorneys. What those prosecutors brought to him that day was hard evidence that the sitting vice president Spiro Agnew was actively engaged in criminal activity. These prosecutors had not set out to discover that. But they had launched an investigation into local corruption in Maryland and where that investigation ultimately led them was inside the office of the Vice President.
Spiro "Ted" Agnew: Ladies and gentlemen I'm Ted Agnew, I'm a candidate for governor. And I ask for your vote …
Rachel Maddow: To the extent that Spiro Agnew is remembered in history, it's for this sort of vague sense that he went down over tax evasion or something sort of benign. What he actually did though was way worse than that, to the point of being sort of bonkers.
Rachel Maddow: When he was Baltimore County Executive, Agnew would had the power to award local contracts. What prosecutors discovered is that he was awarding those contracts almost exclusively to local businessmen who were paying him off, who were delivering him cash bribes, literally stacks of bills stuffed into envelopes.
Rachel Maddow: Here's Barney Skolnik one of these federal prosecutors in Baltimore who helped crack the case.
Barney Skolnik: The scheme, it doesn't even deserve the appellation scheme. It wasn't a scheme. It was just a payoff.
Rachel Maddow: When Agnew left that County Executive job and became governor of Maryland, prosecutors learned that he took the payoff system with him. But then, of course, it wasn't just small-time local contracts he was controlling anymore. As governor, of course, he moved up to big state contracts. And that required him to scale up his criminal efforts. Here's Ron Liebman, another one of the prosecutors on the team.
Ron Liebman: When Agnew became Governor, it was explained to him, "If you want a bag man, you don't want to take directly, you want to insulate yourself because, then, it's just you against another person." And Agnew had at least one bag man, I think two, But he also took directly. He was greedy, absolutely greedy.
Rachel Maddow: Agnew, as Governor, enlisted his State Roads Commissioner to start awarding state contracts to the firms that would pay Agnew off. And as advised, he also got himself a bag man, a longtime friend named Bud Hammerman. Bud's job was to personally go collect the money from the companies that just got the contracts.
Ron Liebman: The deal was that the contractor would pay Hammerman. He's holding the money and paying the money directly to Agnew because he's one of the bag man.
Rachel Maddow: What Agnew put in place as Governor was a slick, well-run extortion ring. Agnew himself would keep 50% of the cash. His Roads Commissioner, who picked the contractors, and his bag man who leaned on them for the cash, they would each get to keep 25%. So half for the two of them, half for the governor. Here's Barney Skolnick.
Barney Skolnik: I mean, taking large sums of cash in a succession of white envelopes over, and over, and over again is about as crass as it can be if you're a public official.
Rachel Maddow: What prosecutors discovered that spring was that this wasn't just some old scheme that Agnew had been running back in Maryland, which he then stopped when he became Vice President. What they discovered was that this was a scheme Agnew was still actively carrying out as Vice President of the United States, on the grounds of the White House itself.
Rachel Maddow: The prosecutors discovered a local Baltimore businessman named Lester Matz. Matz told them that he'd been making regular trips to the White House to secretly deliver cash to Agnew since Agnew had been in office as Vice President, in fact, starting pretty much immediately after Agnew was elected Vice President. Here's Ron Liebman explaining how it worked,
Ron Liebman: After the election the Vice President's office, temporary office was in the basement, I think, of the Old Executive Office Building. And Lester Matz went to see the Vice President-elect with an envelope stuffed with cash in his suit jacket pocket. And he walked in to see Agnew, as he told us the story and as I recall it. And one of them I think maybe Agnew pointed to the ceiling like don't say anything because we could be overheard, or taped, or something.
Ron Liebman: And Lester Matz took out this envelope with $10,000 in cash as I recall, stuffed envelope, and handed it to Agnew. Agnew took it, put it in the center drawer of his desk, and closed his desk. And when we heard that, we were just — couldn't believe it. I believe it, but I was just shocked, just shocked, and we all were, that kind of crass bribery.
Rachel Maddow: These young prosecutors had discovered at the height of the Watergate scandal that the Vice President of the United States was committing his own crimes on an ongoing basis inside the White House.
Barney Skolnik: I mean, cash in white envelopes, I mean, that's crazy to a Vice President.
Ron Liebman: I think we realized at that moment that we had a tiger by the tail.
Rachel Maddow: It turned out that Agnew was also getting paid off by a Maryland engineering executive named Allen Green. Green would make regular trips to the Executive Office Building right next to the White House. He would go into Agnew's office and hand Agnew plain envelopes stuffed with $2000 in cash.
Rachel Maddow: Allen Green told prosecutors he went to the White House three or four times a year during the whole first term of the Nixon Administration. On each trip, he delivered Agnew thousands of dollars, always in envelopes, always in cash. And prosecutors soon discovered that Agnew was secretly accepting illegal deliveries of cash inside his Vice Presidential residence, as well as in the White House.
Rachel Maddow: And if you're wondering what all these businessmen were paying for when they were paying off Agnew, these prosecutors soon figured out that where he could, Agnew was actually steering federal contracts to the businessmen who were now streaming into his office and his apartment with big wads of cash for him. So, it wasn't just a one-sided shakedown operation, it was a true quid-pro-quo, it was government, federal government for sale.
Rachel Maddow: These young guys from Baltimore had not set out to find this, but what they soon realized they had rock-solid evidence of was that the Vice President was running an ongoing bribery-and-extortion scheme from inside the White House.
Ron Liebman: It was shocking. I mean, all of a sudden, this case involving, perhaps, payoffs in Baltimore County, Maryland, or maybe in Annapolis was going to become not only more significant. Keep in mind, Watergate is going on. So, the President of the United States, to put it mildly, is under a cloud. And here, we, three Baltimore federal prosecutors, are being told that the next guy in line, the guy a heartbeat away, he's also under a cloud. So, it was shocking.
Rachel Maddow: It was shocking. And it was now time for them to do something about it. They realized they needed to tell the Attorney General about what they'd uncovered. Here's Barney Skolnik, again, with producer Mike Yarvitz.
Barney Skolnik: I had, in fact, no doubt at all that we had a prosecutable case. The issue was who the defendant was. If the defendant was John Smith, I had no doubt. I mean, I was a good enough prosecutor and an experienced enough prosecutor to know that when you have what we had, that's a case.
Mike Yarvitz: If it's John Smith, you've got it locked up.
Barney Skolnik: You just indict.
Mike Yarvitz: In this case, it was not John Smith.
Barney Skolnik: In this case, you say to the Attorney General, "What do you want us to do?"
Rachel Maddow: This wasn't just posing that question to any Attorney General. This was going to see Richard Nixon's Attorney General, which meant giving a presidential administration that was famous for covering up political scandals the chance to cover up one more. That's next.
Chris Hayes: Hey, it's MSNBC's Chris Hayes. If you enjoyed Bag Man, be sure to check out my friend Rachel Maddow on my podcast, Why is This Happening?, where I get the opportunity to dig deep into the forces behind the stories playing out in the news in order to understand why certain cultural and political phenomena came to be.
Chris Hayes: Rachel joins me to talk about covering the news in this unprecedented political moment. We also talk all about Bag Man and how this incredible podcast came to be. So, click on over and check out Why is This Happening?, and you can listen now wherever you get your podcasts.
Rachel Maddow: Richard Nixon didn't exactly have a stellar track record when it came to the job of Attorney General. By the summer of 1973, Nixon had already lost two different Attorneys General in connection with Watergate.
John Chancellor: A witness at the Senate Watergate hearings today directly implicated former Attorney General John Mitchell in the Watergate bugging and cover up and implicated the cover up …
Rachel Maddow: That summer of '73, as Watergate was full-on boiling, a little team of federal prosecutors in Baltimore was facing the prospect of going to Washington to tell Richard Nixon's newest Attorney General, Elliot Richardson, some news that they knew would be an absolute disaster for the Nixon White House.
Rachel Maddow: They were coming to Washington to tell him that at the height of Watergate, that Vice President Spiro Agnew was conducting an active criminal scheme of his own from inside the White House. These prosecutors were going to take that news to Nixon's Attorney General, knowing full well that he could do whatever he wanted with it. Here's prosecutor Barney Skolnik.
Barney Skolnik: I had a very conscious, not just realization that it was possible, but that under all the circumstances, it was highly likely that he was going to say, perhaps, for the most honorable of reasons. I mean, he probably wouldn't say, "Shut it down," but he could say words that would amount to "shut it down."
Rachel Maddow: These three young Baltimore prosecutors and their boss, the US Attorney George Beall, they all drove to DC and they went to go see the new Attorney General, Elliot Richardson, not sure what to expect, fearing the worst. But they knew they could no longer keep to themselves this criminal secret about the Vice President.
Ron Liebman: We all drove in one car up the Baltimore Washington Parkway, July 3, 1973, game-planning how we're going to do this. George is going to introduce us. Then, we're going to do this. And when we do this, we're going to do that. And when we do that, we're going to do this. So, we get there. We're ushered up to the Attorney General's office, which to say impressive is understated. And we wait, and we wait.
Tim Baker: And then Richardson comes in, and he's annoyed, "What's so important that I have to — You're interrupting my day, and you won't even tell my secretary what it's about. What's so important?" He's sitting there starting to take notes, but then more doodling, and more, and more impatient, and just at the point where the secretary comes in, and gives him a note. He just get up and leave, no explanation. Just gets up and leave. And he's gone for seems like hours, probably 20 minutes.
Ron Liebman: And the minute he leaves, of course, we're saying, "George, say this, say that." Then, Richardson would come back in, and George would begin, "Well, we started in Baltimore County. We're thinking about corruption." None of this, the Attorney General needs or wants to hear. And when George gets a little closer to the Vice President, another note comes in, Elliot Richardson gets up and he leaves, doesn't say excuse me, comes back. Richardson is clearly under pressure. And George says, "Okay, now, we're going to tell you why we're here."
Tim Baker: "We have evidence that Vice President Agnew took bribes as County Executive, Governor, and even as Vice President." Now, we have Richardson's attention. And my job, at that point, it was my job now to lay out the evidence that we had. And he's very interested in the evidence. What he, of course, wants to know is how, good a case is this? And it's a good case. I mean, we've got good stuff, and we know it. I just started banging away on, "So and so will testify, and he's got documents, and he's backed up by his vice president, nail, after nail, after nail, after nail.
Ron Liebman: I read his expression is saying, "I need this right now." Like, "I need another hole in the head." That was his expression like, "Jesus", you know, "Jesus, sweet Jesus."
Rachel Maddow: Put yourself in Elliot Richardson's shoes for a minute. He had just become Attorney General weeks earlier. He was overseeing the most sensitive investigation maybe in the history of the Justice Department, an ongoing, serious criminal probe of the President.
Rachel Maddow: And here were these barely-out-of-law-school Baltimore prosecutors who he's never met telling him, "We know you're investigating the President of the United States, but we need you to investigate the Vice President as well." If you were the attorney general, would you take on that burden? Here's JT Smith, Elliot Richardson's top aide.
JT Smith: I remember Richardson after that meeting saying to me, "Oh my god."
Barney Skolnik: You really were talking about a ship that's in bad shape, and the captain's having a heart attack. And, now, the first mate, you're going to throw the first mate overboard. I mean, what's going to happen to the ship? It made the whole thing very heavy. What's the right thing to do?
Rachel Maddow: The Baltimore prosecutors raced to DC. They dropped that bombshell on Elliot Richardson during that meeting. And then, they waited and watched to see how he would respond.
Ron Liebman: I remember watching Mr. Richardson, Elliot, very, very closely thinking, "All right. Is this where he's going to say, "Good work guys. Really, really good work. Thanks for coming in. Leave the files here. We'll see you later"? And what he did was, he started crawling into the case. He just crawled into the case, "So, what about this? What are you going to do about that?" Like he was a collaborating with us, which he was. He immediately crawled into the case with us. It was extraordinary.
Rachel Maddow: In that meeting, without flinching, Elliot Richardson took on the unimaginable burden, think of this, of overseeing an active criminal investigation of the President and the Vice President at the same time with two different cases.
Rachel Maddow: There's no telling what any other Attorney General might have done in that situation. You could almost understand an Attorney General saying, "I've got this investigation that might bring down the President, I can't wipe out the Vice President too. The country can't survive that."
Rachel Maddow: But Elliot Richardson's response to these young prosecutors who cracked this case was, "Keep going, keep digging." He told them that he would now directly oversee their investigation. It would be conducted in secret, with the knowledge of only the people in that room.
Rachel Maddow: The stakes were potentially taking out the President and the Vice President, which would effectively overturn an entire national election, which had been a landslide win for Nixon and Agnew. But Elliot Richardson, who had just gotten on the job, decided that he had to take on that burden. He had to.
Rachel Maddow: Here's how Barney Skolnik, one of the prosecutors, remembers that meeting with Elliot Richardson even today, 45 years later. The first voice, you'll hear is producer Mike Yarvitz.
Mike Yarvitz: What are your memories from that meeting, that first meeting with Richardson? What are you feeling going into that meeting?
Barney Skolnik: This is something about which I can get very emotional. I went to that meeting as, I think, most people in my position would have. We don't know him. I mean, I've heard good things about him, but we don't know him. And it's like very much with a great sense of anxiety that we are going to say to him, "Here, what do you want us to do?" And then, figuratively speaking, hold our breath until he tells us what he's going to tell us.
Barney Skolnik: Within the first few minutes of being with him, I knew, I think we all knew that we were in the presence of a very special human being. To me, it is the single most, it's the key to this whole saga. If Elliot Richardson had not been the Attorney General at that particular time, Spiro Agnew would have become President in August of '74. I mean, I'm certain of that.
Rachel Maddow: These Baltimore prosecutors happened to draw as an Attorney General a figure in American political life who was equal to the moment when, how could you expect that of anyone? Elliot Richardson was a Republican, a decorated military veteran. He went ashore on D-Day. He was an ex-federal prosecutor himself, unimpeachable integrity.
Rachel Maddow: What began at that moment, in that meeting with Elliot Richardson's decision was an unprecedented emergency mission inside the Justice Department to oust the Vice President of the United States before it was too late, before he ascended to the presidency himself.
Barney Skolnik: We're talking about the summer of '73, I mean, Watergate hearings are going on. Everybody was conscious that Nixon, aside from being a crook in his memorable word, might not last.
Rachel Maddow: Watergate was beginning to reach a boil. The President might go down at any moment, either by resignation or removal from office. And on top of that, teetering drama. It was now on the Attorney General and this small team of federal prosecutors to somehow make sure that an active criminal wasn't next in line to replace him.
Rachel Maddow: They had the criminal scheme in their sites. They had the evidence by then pouring in. They had leadership that almost, unbelievably, proved to be unafraid of the stakes and willing to see this through. The only problem was the man they were about to take on was not going to take any of it lying down.
Spiro "Ted" Agnew: I want to say at this point, clearly and unequivocally, I am innocent of the charges against me.
Rachel Maddow: Spiro Agnew was gearing up to wage war on this band of prosecutors. And he knew that his real power base was the legion of supporters he had, both in the public and in Congress, who loved what a hard liner he was, who love what a bomb-thrower he was, and who were willing to angrily support him basically through anything, no matter what Agnew got charged with. They were ready to go to war with him.
Carl Curtis: Will you inform me what he's done? No one has. Now, that's not American justice. I don't think he should resign or he will resign.
Rachel Maddow: That part of the story is next time.
Rachel Maddow: Bag Man is a production at MSNBC and NBC Universal. This series is executive produced by Mike Yarvitz. It was written by myself and Mike Yarvitz. Editorial and production support from Jonathan Hirsch and Marissa Schneiderman from Neon Hum Media. And you can find much more about the story on our website, which is msnbc.com/bagman.
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Rachel Maddow: When Richard Nixon tapped Spiro Agnew — Ted, to his friends — to be his running mate in 1968, this was the Ted Agnew the country was introduced to. Agnew was a fresh face in national politics. He wasn't much known at all outside of Maryland where he had just been elected governor. Heck, he wasn't even all that well-known in Maryland. But he was an effective politician. His quick rise out of nowhere was thanks in large part to his my-kind-of-man personal image. He was the son of Greek immigrants. He was an outsider. He forged a reputation as a straight shooter, hard work, honesty, integrity.
Female Voice: Well, I like him because he's honest. He's really honest.
Male Voice: The one thing that I can definitely say is Ted Agnew would make a perfect administrator for the State of Maryland.
Female Voice: Well, I think he's going to be our next governor.
Male Voice: He's my kind of man.
Rachel Maddow: Agnew got elected Baltimore County Executive in 1962. Four years after that, he became the Governor of Maryland. And two years after that, he found himself being tapped by Richard Nixon to be Vice President. A virtual unknown in national politics, a man who Nixon himself barely even knew. Here's a reporter asking Nixon how Agnew reacted when Nixon called him to offer him the gig.
Reporter: Mr. Nixon, was Mr. Agnew surprised when you called him? What does a Vice Presidential nominee say?
Richard Nixon: I think the best indication of surprise is when a lawyer has no words. Governor Agnew, as you know, is a lawyer and is a very articulate man, as you saw in his press conference. I'd say there's about 20 seconds before he said a word.
Rachel Maddow: Nixon had had a really hard time figuring out who to pick as his running mate that year. He had considered a close friend or two. He had considered one guy who ran against him in the primaries, a guy by the name of Ronald Reagan. But, ultimately, Nixon had decided on Agnew. And the process had been stressful. And, actually, the initial reaction to the pick was not great.
Rachel Maddow: This was a TV ad that was run by the Hubert Humphrey campaign during the 1968 election. This was it. No words. Just a man laughing hysterically as the camera slowly pulled out to reveal words on the TV screen that read "Agnew for Vice President?"
Rachel Maddow: Spiro Agnew was a literal laughingstock when the 1968 presidential campaign got underway. But as much as the Democrats might have wanted to keep laughing at him, Agnew soon became sort of a rock star on the right. He was blunt. He was politically incorrect. He loved trashing liberals, and the press, and minorities. He shot down hecklers at his events with glee. He described them as spoiled brats who never had a good spanking.
Spiro "Ted" Agnew: Somewhere somebody failed you. Your churches must not have gotten through to you because you don't even know anything about the golden rule. I'm frankly ashamed of you. And I think you ought to be ashamed of yourselves.
Rachel Maddow: During that campaign, Agnew stepped in it a number of times, often on the issue of race and on ethnic stereotypes.
Male Voice: Spiro Agnew took a day off from campaigning following weekend speeches in Hawaii. And one of his Monday appearances before a racially mixed audience on the island of Maui, he replied to criticism of his having used slang labels "Polack" and "Jap," and referring to Americans of Polish and Japanese ancestry.
Rachel Maddow: Agnew's lack of filter when it came to racially-insensitive remarks, it sometimes got him in trouble with the press. But big picture, the campaign actually saw it as a plus. Rather than hurting him, that stuff actually seemed to solidify his support on the right. Agnew the political outsider who didn't care who he offended, that was a feature, not a bug.
Spiro "Ted" Agnew: And if you tell me that the hippies and the yuppies are going to be able to do the job, I'll tell you this: they can't run a bus, they can't serve in a governmental office, they can't run a lathe in a factory. All they can do is and sleep or kick policemen with razor blades.
Rachel Maddow: Spiro Agnew pushed the limits. He was deliberately outrageous. He defended his over-the-top rhetoric during that campaign by saying that he never hit first, he just hit back. He told reporters, "I guess, by nature, I'm a counter-puncher. You can't hit my team in the groin, and expect me to stand here, and smile about it."
Rachel Maddow: A counter in the White House. How exactly does a politician who is a self-styled counter react when his own political survival is directly threatened? When the full weight of his own Justice Department comes crashing down on him?
Rachel Maddow: This is a story that is not well-known, but it really should be, especially maybe now. It's the story of a criminal occupant of the White House, whose crimes are discovered by his own Justice Department, who then tries to hold onto power by obstructing the investigation into his crimes, by smearing and threatening the prosecutors who are investigating him, and by trying to convince his legion of supporters across the country that none of the allegations are true, that it's all just a big witch hunt. And if that sounds familiar, it's because history is here to help. I firmly believe it.
Rachel Maddow: I'm your host Rachel Maddow. And this is Bag Man: The Wild and Untold Story of the Presidential Line of Succession, Impeachment, Indictment, and Panic in the White House.
Male Voice: Good evening. Washington was stunned today by the disclosure that Vice President Agnew is under criminal investigation by federal authorities in his home State of Maryland.
Male Voice: Not only is it Watergate, but he's the Vice President, and we have quite evidence of corruption.
Spiro "Ted" Agnew: I will not resign if indicted. I will not resign if indicted.
Male Voice: The constitutional problems raised by the Agnew investigation are bewildering. We've never had a problem like this one before.
Chris Hayes: Hey, it's MSNBC's Chris Hayes. If you enjoyed Bag Man, be sure to check out my friend, Rachel Maddow, on my podcast, Why is This Happening?, where I get the opportunity to dig deep into the forces behind the stories playing out in the news in order to understand why certain cultural and political phenomena came to be. Rachel joins me to talk about covering the news in this unprecedented political moment. We also talk all about Bag Man and how this incredible podcast came to be. So, click on over and check out Why is This Happening? and you can listen now wherever you get your podcasts.
Rachel Maddow: Episode 1: An Unsettling Secret.
Spiro "Ted" Agnew: Ultra-liberalism today translates into a whimpering isolationism in foreign policy, a mulish obstructionism and domestic policy, and a pusillanimous pussyfooting on the critical issue of law and order.
Rachel Maddow: Spiro Agnew doesn't exactly loom large as a political figure in US history. His name barely registers as a political trivia question these days. But when Richard Nixon and Spiro Agnew won the White House in 1968, Spiro Agnew — even though he doesn't get the credit for it — he basically created the mold for the modern iteration of confrontational conservatism in America.
Spiro "Ted" Agnew: But you know how it is with radical liberals, you zing one of them, and call his hand, cite his voting, quote his speeches, tell America the harm he's done, and he howls like a coyote with his tail caught in a snake hole.
Rachel Maddow: Even though he was now Vice President of the United States, there had been no transformation from candidate Agnew into a less divisive public official Agnew. If anything, he got even more aggressive.
David Brinkley: He was asked why he — more than other politicians — was accused of dividing the country. Agnew said it was because he was the foremost destroyer of liberal dogma, that when liberals are attacked, they salivate like Pavlovian dogs.
Rachel Maddow: Spiro Agnew was a flamethrower. He loved defending the press. His whole political brand was about offending liberals, and Democrats, and minorities. The more political norms he blew through, the stronger he got with the Republican Party's hardline base. And that was the only base and the only audience he ever tried to cultivate. Democrats were mystified. Republicans loved it.
Rachel Maddow: After one comment in which Agnew publicly denigrated black leaders across the country, one of the most prominent African-American members of Congress, William Clay of Missouri, took to the floor of the House to deliver a condemnation of Agnew that was almost not safe for work.
Rachel Maddow: He said about the Vice President, "He is seriously ill. He has all the symptoms of an intellectual misfit. His recent tirade against black leadership is just part of a game played by him called mental masturbation. Apparently, Mr Agnew is an intellectual sadist who experiences intellectual orgasms by attacking, humiliating, and kicking the oppressed." Imagine if there had been C-SPAN back then for that. But the group that Agnew seemed to reserve the most venom for, his favorite target of all, was the press.
Spiro "Ted" Agnew: The purpose of my remarks tonight is to focus your attention on this little group of men who not only enjoy a right of instant rebuttal to every Presidential address, but more importantly, wield a free hand in selecting, presenting, and interpreting the great issues in our nation.
Rachel Maddow: During the first term of the Nixon Administration, Vice President Agnew took it upon himself to try to discredit the American news media. And all presidents — presumably most vice presidents too — they all undoubtedly hate the press. They all think they're covered in a way that isn't fair. But Agnew set out on an overt campaign to try to turn the country against the press in a way that nobody had really done before from the White House.
Rachel Maddow: In a series of speeches in 1969, with the seal of the Vice Presidency underneath him, Agnew delivered prepared attacks on the news networks, which he portrayed as a danger to the nation, as biased and untrustworthy.
Spiro "Ted" Agnew: A raised eyebrow, an inflection of the voice, a caustic remark dropped in the middle of a broadcast can raise doubts in a million minds about the veracity of a public official or the wisdom of a government policy, when a single commentator or producer, night after night, determines for millions of people how much of each side of a great issue they are going to see and hear, should he not first disclose his personal views on the issue as well?
Rachel Maddow: Agnew's assault on the press was sort of a shock to the system at the time. The President of NBC News took the rare step of appearing on NBC's nightly newscast to push back.
Julian Goodman: Evidently, he would prefer a different kind of television reporting, one that would be subservient to whatever political group happens to be in authority at the time. Those who might feel momentary agreement with his remarks should think carefully about whether that kind of television news is what they want.
Rachel Maddow: The Vice President seemed to be stirring up something dangerous in the country. The Washington Post wrote in December 1969, "One little noted and wholly unintentional result of Vice President Agnew's speeches against the press and television is a renewed wave of public expression of anti-Semitism. It was noticeable at once in this city where local television stations were swamped for three days after Agnew's first speech with obscene phone calls protesting 'Jew-Commies on the air.'"
Rachel Maddow: One Jewish newspaper editor in Louisville, Kentucky reported at the time that he was, "buried under an avalanche of sick anti-Semitic mail." A leading Jewish organization said anti-Semitic groups across the country were "Using Agnew's speeches to justify their hate campaigns and urging their followers to support him." And it's not that Spiro Agnew himself ever directly espoused any of those beliefs, but something about his rhetoric seemed to give his supporters license to express these views that they hadn't felt free to express before.
Rachel Maddow: His attacks on enemies of the administration became so heated that Democrats, and even some Republicans, started to warn that if he didn't tone down his rhetoric, somebody was going to get hurt. Here's Arkansas Democratic Senator William Fulbright.
William Fulbright: He intimidates people. I don't think there's any doubt about him intimidating. He inspires other people to do radical actions. I think of threats through letters, and telephone messages, and so on is an outgrowth of this kind of a spirit.
Rachel Maddow: That was Spiro Agnew, the political figure. He was a lightning rod. He was a demagogue. He had a devoted base inside the Republican Party that he seemed to be able to control in ways that other politicians couldn't, in ways that seemed even dangerous at times. And he was about to bring all of that to bear on members of his own Justice Department who had just discovered that Agnew, in addition to all of that other stuff, also happened to be an active criminal. Stay right there.
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David Brinkley: Richard Nixon chose Governor Spiro Agnew of Maryland for his Vice President. Until two years ago, he was unknown outside Maryland County politics.
Rachel Maddow: When Richard Nixon tapped Spiro Agnew to become his Vice President, Agnew was on a very fast rise in Republican politics. When Nixon picked him to be VP, Agnew had been Governor of Maryland for just a couple of years. Before that, he was a local elected official. He was Baltimore County Executive. So, Agnew emerged onto the national scene, basically, out of nowhere. But his rise in Maryland, in famously corrupt Maryland, that came with some secrets that would slowly start to be revealed right at the height of the Watergate scandal.
Garrick Utley: Good morning. The place: the Senate Caucus Room in Washington. This is day four of the Senate Watergate hearings.
Rachel Maddow: That spring of 1973, as the country was in the grips of Watergate fever, a team of young federal prosecutors based in Maryland had just launched a brand new investigation that had nothing at all to do with Watergate.
Tim Baker: It was based solely on just kind of rumors.
Rachel Maddow: That's Tim Baker. He's one of the people at the heart of this story. He was an assistant US attorney in Maryland in 1973. And the rumors that he's talking about there were basically whispers that Maryland politics, at the time, had a real bribery and corruption problem. And that spring, Tim Baker, along with two of his fellow prosecutors, they decided they were going to dig into those rumors. Ron Liebman was another prosecutor on that team.
Ron Liebman: In essence, it was follow the money, get the documents, follow the money.
Rachel Maddow: If the Watergate era had a theme song, this was it, right? The FBI, and congressional investigators, and intrepid reporters from The Washington Post, they were all busy following the money.
Garrick Utley: And that brings us to the third major element in the Watergate story: money. Cash. Cash given to the President's re-election committee secretly and, in some cases, illegally.
Rachel Maddow: Following the money led to almost all of the most interesting stuff in the Watergate scandal, but in their unrelated, contemporaneous investigation in Baltimore, these young federal prosecutors from the US Attorney's office in Maryland, they too were following the money.
Barney Skolnik: Investigate, which is like, you know, it's like throwing catnip. I mean, you know, "Oh, okay, fine. You know, we'll investigate."
Rachel Maddow: That's Barney Skolnik. He was the senior prosecutor on this three-man team. There are some people in this story you will come to know and love. Top of that list is these three young, scrappy federal prosecutors. They're all around 30 years old at the time. They're trying to take a bite out of political corruption in their state.
Rachel Maddow: What Barney Skolnik, and Tim Baker, and Ron Liebman all started to find when they started following the money in Maryland was a scheme, a bribery scheme, where local elected officials took thousands of dollars in cash kickbacks from companies that got public contracts. It was exactly the way that you imagine it, businessmen putting cash into plain envelopes, handing those envelopes full of cash to elected officials, and then walking away with a job to design that local bridge or that county building.
Rachel Maddow: These three young prosecutors started lifting this rock in Maryland. And what they found underneath it was an underworld of longstanding, local corruption. Basically, small-time officials who were on the take. That's what this case looked like to them in early 1973. Watergate may have been gripping the nation. President Richard Nixon looked like he might end up in deep trouble, but these guys had this local investigation going that was world's away from all of that. Until suddenly, it wasn't.
Spiro "Ted" Agnew: I, Spiro Theodore Agnew, solemnly swear …
Rachel Maddow: Because that spring, Richard Nixon's Vice President, Spiro Agnew, who came from that swamp of Maryland politics, he started hearing rumors of his own about this team of investigators who were now poking around in his old neck of the woods. And upon hearing that, Spiro Agnew did something that was sort of suspicious. He went to go see the Attorney General of the United States himself to ask the Attorney General about this local investigation that was under way in Maryland.
Rachel Maddow: At the time, the Attorney General didn't even know about that investigation yet. But that little visit from the Vice President, that sent alarm bells ringing with these three prosecutors in Baltimore because, at that point, as far as they knew, their investigation had nothing at all to do with the sitting Vice President. Here's Tim Baker and Ron Liebman.
Tim Baker: I immediately thought to myself, "Why is he so upset? He's upset because he's got something to hide." So, I say in this meeting, "We're going to get Agnew."
Ron Liebman: I remember Tim Baker telling me and Barney, in so many words, that he smelled a rat. It was way beyond our horizon. But Tim, to his eternal credit, smelled it first. He saw something.
Rachel Maddow: There sleepy little investigation in Maryland was about to change the country. What these young prosecutors were about to discover was that the country didn't just have a criminal President in power, but a criminal Vice President as well, who, of course, was next in the line of succession.
Tim Baker: We have evidence that Vice President Agnew took bribes as County Executive Governor and even as Vice President.
Ron Liebman: Not only is it Watergate, but he's the Vice President and we have hard evidence of corruption.
Tim Baker: Fifteen $100 bills he gave Agnew in the basement of the White House. This was in the White House.
Barney Skolnik: It really was, "We're all in this together, and we got to figure out what to do for the country because this is some heavy shit."
Rachel Maddow: This isn't just the story of a political corruption scheme that got exposed. It is that, but it's also a story of how exactly a criminal occupant of the White House reacts and lashes out when his own Justice Department starts to zero in on him for his criminal behavior.
Spiro "Ted" Agnew: Because of these tactics which have been employed against me, I will not resign if indicted. I will not resign if indicted.
Rachel Maddow: Spiro Agnew rose to national prominence as a lightning rod, as a flamethrower, as someone who wasn't afraid to smear his opponents and roll around in the mud. He was quite willing to be dangerous to the country if it suited his own purposes. And ultimately, he employed all of that for this fight, to fight back against an investigation and a small team of investigators who were not only threatening to remove him from the White House, they were threatening to throw him in jail.
Martin London: And that's really — to use a legal expression — that's when the shit hit the fan.
Rachel Maddow: That's Marty London. He was Spiro Agnew's defense lawyer. We will spend a little more time with him later in this story. You're going to love him. This scandal has somehow gotten itself forgotten. It barely registers, but it's wild. A sitting White House occupant under criminal investigation from his own government, pulling out every stop to survive, including obstructing that investigation and trying very hard to shut it down.
Barney Skolnik: I mean it was, you know. That's why get sort of emotional about it.
Tim Baker: The pressure, and it was big pressure, the pressure was, "Get the guy out of the line of succession."
Ron Liebman: We were determined. You know, we're kids, but we we were determined to follow this case through.
Rachel Maddow: Part of the reason we wanted to make this podcast now is because this is a story that I think is worth hearing for the first time, particularly right now. But it's also because, now, there's new stuff to know about it. The prosecutors themselves haven't even been aware of the full story all these years. They're going to hear it all right here for the first time.
Tim Baker: Good night. No, I didn't know this.
Barney Skolnik: Oh my Lord.
Ron Liebman: 45 years later, and my blood still boils when I read stuff like that.
Rachel Maddow: For the last several months, ace producer Mike Yarvitz and I have been digging back into this story, going through the archives, and interviewing the people who were involved in it. What we learned is that when law enforcement gets on a collision course with the White House, specifically with a criminal in the White House, who is a self-styled counter-puncher, who seems to be able to command at will an entire base of supporters across the country, when that kind of collision happens, what we've learned is that things get pretty thoroughly insane pretty quickly.
Rachel Maddow: I'm Rachel Maddow, and that's all ahead on Bagman.
Rachel Maddow: Bag Man is a production of MSNBC and NBC Universal. This series is executive produced by Mike Yarvitz. It was written by myself and Mike Yarvitz. Editorial and production support from Jonathan Hirsch and Marissa Schneiderman from Neon Hum Media. And you can find much more about the story on our website, which is
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: Ah, ha, ha, ha. Four, three, two, one, boom. Thank you. Thanks for doing this, man. Really appreciate it.
: You're welcome.
: It's very good to meet you.
: Nice to meet you too.
: And thanks for not lighting this place on fire.
: You're welcome. That's coming later.
: How does one, just in the middle of doing all the things you do, create cars, rockets, all the stuff you're doing, constantly innovating, decide to just make a flamethrower? Where do you have the time for that?
: Well, the flame, we didn't put a lot of time into the flamethrower. This was an off-the-cuff thing. It's sort of a hobby company called the Boring Company, which started out as a joke, and we decided to make a real, and dig a tunnel under LA. And then, other people asked us to dig tunnels. And so, we said yes in a few cases.
: Now, who-
: And then, we have a merchandise section that only has one piece of merchandise at a time. And we started off with a cap. And there was only one thing on, which is BoringCompany.com/hat. That's it. And then, we sold the hats, limited edition. It just said, "The Boring Company."
: And then, I'm a big fan of Spaceballs, the movie. And in Spaceballs, Yogurt goes through the merchandising section, and they have a flamethrower in the merchandising section of Spaceballs. And, like, the kids love that one. That's the line when he pulls up the flamethrower. It's like, "We should do a flamethrower." So, we-
: Does anybody tell you no? Does anybody go, "Elon, maybe for yourself, but selling a flamethrower, the liabilities, all the people you're selling this device to, what kind of unhinged people are going to be buying a flamethrower in the first place? Do we really want to connect ourselves to all these potential arsonists?
: Yeah, it's a terrible idea. It's terrible. Don't buy one. I said, "Don't buy this flamethrower. Don't buy it. Don't buy it." That's what I said, but, still, people bought it.
: There's nothing I can do to stop them. I did not stop them.
: You build it, they will come.
: I said, "Don't buy it. It's a bad idea."
: How many did you make?
: It's dangerous. It's wrong. Don't buy it. And, still, people bought it. I just couldn't stop them.
: How many did you make?
: And they're all gone?
: In three — I think, four days. They sold out in four days.
: Are you going to do another run?
: No, that's it?
: Oh, I see.
: I said we're doing 20. We did 50,000. 50,000 hats, and that was a million dollars. I thought, "Okay. Well, we'll sell something for 10 million," and that was 20,000 flamethrowers at $500 each. They went fast.
: Yeah. How do you have the time? How do you have the time to do that though? I mean, I understand that it's not a big deal in terms of all the other things you do, but how do you have time to do anything? I just — I don't understand your time management skills.
: I mean, I didn't spend much time on this flamethrower. I mean, to be totally frank, it's actually just a roofing torch with an air rifle cover. It's not a real flamethrower.
: Which is why it says, "Not a flamethrower."
: That's why we were very clear, this is not actually a flamethrower. And, also, we are told that various countries would ban shipping of it, that they would ban flamethrowers. So, we're very — To solve this problem for all of the customs agencies, we labeled it, "Not a flamethrower."
: Did it work? Was it effective?
: I don't know. I think so. Yes.
: So far.
: Now, but you do-
: Because they said you cannot ship a flamethrower.
: But you do so many different things. Forget about the flamethrower. Like, how do you do all that other shit? Like, how does one decide to fix LA traffic by drilling holes in the ground? And who do you even approach with that? Like, when you have this idea, who do you talk to about that?
: I mean, I'm not saying it's going to be successful or something, you know. It's not like asserting that it's going to be successful. But so far, I've lived in LA for 16 years, and the traffic has always been terrible. And so, I don't see any other, like, ideas for improving the traffic. So, in desperation, we're going to dig a tunnel. And maybe that tunnel will be successful and maybe it won't.
: I'm listening.
: Yeah. I'm not trying to convince you it's going to work.
: And are the people that you-
: I mean, or anyone.
: But you are starting this though. This is actually a project you're starting to implement, right.
: Yeah, yeah, no. We've dug about a mile. It's quite long. It takes a long time to walk it.
: Yeah. Now, when you're doing this, what is the ultimate plan? The ultimate plan is to have these in major cities, and anywhere there's mass congestion, and just try it out in LA first?
: Yeah. It's in LA because I mostly live in LA. That's the reason. It's a terrible place to dig tunnels. This is one of the worst places to dig tunnels mostly because of the paperwork. You all think it's like, "What about seismic?" It's like, actually, both tunnels are very safe in earthquakes.
: Why is that?
: Earthquakes are essentially a surface phenomenon. It's like waves on the ocean. So, if there's a storm, you want to be in a submarine. So, being in a tunnel is like being in a submarine. Now, the way the tunnel is constructed, it's constructed out of these interlocking segments, kind of like a snake. It's sort of like a snake exoskeleton with double seals.
: And so, even when the ground moves, the tunnel actually is able to shift along with the ground like an underground snake, and it doesn't crack or break. And it's extremely unlikely that both seals would be broken. And it's capable of taking five atmospheres of pressure. It's waterproof, methane-proof, well, gas-proof of any kind, and meets all California seismic requirements.
: So, when you have this idea, who do you bring this to?
: I'm not sure what you mean by that.
: Well, you're implementing it. So, you're digging holes in the ground.
: Like, you have to bring it to someone that lets you do it.
: Yes. There are some engineers from SpaceX who thought it would be cool to do this. And the guy who runs it, like, day-to-day is Steve Davis. He's a longtime SpaceX engineer. He is great. So, Steve was like, "I'd like to help make this happen." I was like, "Cool." So, we started off with digging a hole in the ground. It's got like a permit for a pit, like pit, and just dug a big pit.
: And you have to tell them what the pit's for, or you just said, "Hey, we just want to dig a hole."
: I just filled up this form.
: That's it?
: Yeah, it was a pit in our parking lot.
: But do you have to give them some sort of a blueprint for your ultimate idea? And do they have to approve it? Like, how does that work?
: Now. We just started off with a pit.
: A big pit. And, you know, it's not really — You know, they don't really care about the existential nature of a pit. You just say like, "I want a pit."
: Yeah. And it's a hole in the ground. So then, we got the permit for the pit, and we dug the pit, and we dug it in, like, I don't know, three days, two to three days. Actually, I think two, 48 hours, something like that because Eric Carr said he was coming by for the Hype. He's going to attend the Hyperloop Competition. which is like a student competition we have for who can make the fastest part in the Hyperloop. And he was coming.
: The finals are going to be on Sunday afternoon. And so, Eric is coming by on Sunday afternoon. He's like, "You know, we should dig this pit, and then like show Eric." So, this was like Friday morning. And then, yeah. So, it's about a little over 48 hours later, we dug the pit. There was like wind 24/7. Oh, 24. 48 straight hours, something like that. And dug this big pit, and we're like, "Show Eric the pit." It's like, obviously, it's just a pit. But, hey, a hole in the ground is better than no hole in the ground.
: And what did you tell him about this pit? I mean, you just said this is the beginning of this idea.
: We're going to build tunnels under LA to help funnel traffic better.
: And they just go, "Okay." But we've joked around about this in the podcast before to like what if a person can go to the people that run the city and go, "Hey, I want to dig some holes on the ground and put some tunnels in there," and they go "Oh, yeah, okay."
: Not the only one with a hole in the ground.
: But it's a-
: People dig holes in the ground all time.
: But my question is, like, I know how much time you must be spending on your Tesla factory. I know how much time you must be spending on SpaceX. And yet, you still have time to dig holes under the ground in LA, and come up with these ideas, and then implement them. Like-
: I have a million ideas.
: I'm sure you do.
: There's no shortage of that. Yeah.
: I just don't know how you manage your time. I don't understand it. It doesn't seem — It doesn't even seem humanly possible.
: You know, I do, basically — I think, people, like, don't totally understand what I do with my time. They think, like, I'm a business guy or something like that. Like my Wikipedia page says business magnate.
: What would you call yourself?
: A business magnet. Can someone please change my Wikipedia page to magnet?
: They'll change it for you.
: Please change.
: Right now, it's probably already changed.
: It's locked. So, somebody has to be able to unlock it and change it to magnet.
: Someone will get that.
: I want to be a magnet. No, I do engineering, you know, and manufacturing, and that kind of thing. That's like 80% or more of my time.
: Ideas, and then the implementation of those ideas.
: Those are like hardcore engineering, like-
: … designing things, you know.
: It's structural, mechanical, electrical, software, user interface, engineering, aerospace engineering.
: But you must understand there's not a whole lot of human beings like you. You know that, right? You're an oddity-
: … to chimps like me.
: We're all chimps.
: Yeah, we are.
: We're one notch. One notch above a chimp.
: Some of us are a little more confused. When I watch you doing all these things, I'm like, "How does this motherfucker have all this time, and all this energy, and all these ideas, and then people just let him do these things?"
: Because I'm an alien.
: That's what I've speculated.
: Then, I'm on record saying this in the past. I wonder.
: It's true.
: I mean, if there was one? I was like, "If there was, like, maybe an intelligent being that we created, you know, like some AI creature that's superior to people, maybe it's just hanging around with us for a little while like you've been doing, and then fix a bunch of shit." I mean, that's the way.
: I might have some mutation or something like that.
: You might. Do you think you do?
: Do you wonder? Like, around normal people, you're like, "Hmm." Think, "What's up with these boring dumb motherfuckers?" ever?
: Not bad for a human, but, I think, I will not be able to hold a candle to AI.
: You scared the shit out of me when you talk about AI between you and Sam Harris.
: Oh sure.
: I didn't consider it until I had a podcast with Sam once.
: That's great.
: And he made me shit my pants. Talking about AI, I realized, like, "Oh, this is a genie that once it's out of the bottle, you're never getting it back in."
: That's true.
: There was a video that you tweeted about one of those Boston dynamic robots.
: And you're like, "In the future, it will be moving so fast, you can't see it without a strobe light."
: Yeah. You can probably do that right now.
: And no one's really paying attention too much other than people like you, or people that are really obsessed with technology, all these things are happening. And these robots are — Do you see the one where PETA put out a statement that you shouldn't kick robots?
: It's probably not wise.
: For retribution.
: Their memory is very good.
: I bet it's really good.
: It's really good.
: I bet it is.
: And getting better every day.
: It's really good.
: Are you honestly legitimately concerned about this? Are you — Is, like, AI one of your main worries in regards to the future?
: Yes. It's less of a worry than it used to be, mostly due to taking more of a fatalistic attitude.
: So, you used to have more hope, and you gave up some of it. And, now, you don't worry as much about AI. You're like, "This is just what it is."
: Pretty much. Yes, yes, yes.
: Was that not? Yes but no.
: It's not necessarily bad. It's just it's definitely going to be outside of human control.
: Not necessarily bad, right?
: Yes. It's not necessarily bad. It's just outside of human control. Now, the thing that's going to be tricky here is that it's going to be very tempting to use AI as a weapon. It's going to be very tempting. In fact, it will be used as a weapon. So, the on ramp to serious AI, the danger is going to be more humans using it against each other, I think, most likely. That will be the danger. Yeah.
: How far do you think we are from something that can make its own mind up whether or not something's ethically or morally correct, or whether or not it wants to do something, or whether or not it wants to improve itself, or whether or not it wants to protect itself from people or from other AI? How far away are we from something that's really truly sentient?
: Well, I mean, you could argue that any group of people, like a company is essentially a cybernetic collective of people and machines. That's what a company is. And then, there are different levels of complexity in the way these companies are formed. And then, there's a sort of like a collective AI in the Google, sort of, Search, Google Search, you know, where we're all sort of plugged in as like nodes on the network, like leaves on a big tree.
: And we're all feeding this network with our questions and answers. We're all collectively programming the AI. And Google Plus, all the humans that connect to it, are one giant cybernetic collective. This is also true of Facebook, and Twitter, and Instagram, and all the social networks. They're giant cybernetic collectives.
: Humans and electronics all interfacing, and constantly now, constantly connected.
: Yes, constantly.
: One of the things that I've been thinking about a lot over the last few years is that one of the things that drives a lot of people crazy is how many people are obsessed with materialism and getting the latest greatest thing. And I wonder how much of that is — Well, a lot of it is most certainly fueling technology and innovation. And it almost seems like it's built into us. It's like what we like and what we want that we're fueling this thing that's constantly around us all the time.
: And it doesn't seem possible that people are going to pump the brakes. It doesn't seem possible at this stage where we're constantly expecting the newest cellphone, the latest Tesla update, the newest MacBook Pro. Everything has to be newer and better. And that's going to lead to some incredible point. And it seems like it's built into us. It almost seems like it's an instinct that we're working towards this, that we like it. Our job, just like the ants build the anthill, our job is to somehow know how fuel this.
: Yes. I mean, I made this comment some years ago, but it feels like we are the biological bootloader for AI. Effectively, we are building it. And then, we're building progressively greater intelligence. And the percentage of intelligence that is not human is increasing. And, eventually, we will represent a very small percentage of intelligence. But the AI is informed strangely by the human limbic system. It is, in large part, our id writ large.
: How so?
: We mentioned all those things, the sort of primal drives. There's all of the things that we like, and hate, and fear. They're all there on the internet. They're a projection of our limbic system. That's true.
: No, it makes sense. And the thinking of it as a — I mean, thinking of corporations, and just thinking of just human beings communicating online through these social media networks in some sort of an organism that's a — It's a cyborg. It's a combination. It's a combination of electronics and biology.
: Yeah. This is — In some measure, like, it's to the success of these online systems. It's sort of a function of how much limbic resonance they're able to achieve with people. The more limbic resonance, the more engagement.
: Whereas, like one of the reasons why probably Instagram is more enticing than Twitter.
: Limbic resonance.
: Yeah. You get more images, more video.
: It's tweaking your system more.
: Do you worry or wonder, in fact, of what the next step is? I mean, a lot of you didn't see Twitter coming. You know, communicate with 140 characters or 280 now would be a thing that people would be interested in. Like it's going to excel. It's going to become more connected to us, right?
: Yes. Things are getting more and more connected. They're, at this point, constrained by bandwidth. Our input/output is slow, particularly output. Output got worse with thumbs. You know, we used to have input with 10 fingers. Now, we have thumbs. But images are just, also, other way of communicating at high bandwidth. You take pictures and you send pictures to people. What sends, that communicates far more information than you can communicate with your thumb.
: So, what happened with you where you decided, or you took on a more fatalistic attitude? Like, was there any specific thing, or was it just the inevitability of our future?
: I try to convince people to slow down. Slow down AI to regulate AI. That's what's futile. I tried for years, and nobody listened.
: This seems like a scene in a movie-
: Nobody listened.
: … where the the robots are going to fucking takeover. You're freaking me out. Nobody listened?
: Nobody listened.
: No one. Are people more inclined to listen today? It seems like an issue that's brought up more often over the last few years than it was maybe 5-10 years ago. It seemed like science fiction.
: Maybe they will. So far, they haven't. I think, people don't — Like, normally, the way that regulations work is very slow. it's very slow indeed. So, usually, it will be something, some new technology. It will cause damage or death. There will be an outcry. There will be an investigation. Years will pass. There will be some sort of insights committee. There will be rule making. Then, there will be oversight, absolutely, of regulations. This all takes many years. This is the normal course of things.
: If you look at, say, automotive regulations, how long did it take for seatbelts to be implemented, to be required? You know, the auto industry fought seatbelts, I think, for more than a decade. It successfully fought any regulations on seatbelts even though the numbers were extremely obvious. If you had seatbelts on, you would be far less likely to die or be seriously injured. It was unequivocal. And the industry fought this for years successfully. Eventually, after many, many people died, regulators insisted on seatbelts. This is a — This time frame is not relevant to AI. You can't take 10 years from a point of which it's dangerous. It's too late.
: And you feel like this is decades away or years away from being too late. If you have this fatalistic attitude, and you feel like it's going — We're in an almost like a doomsday countdown.
: It's not necessarily a doomsday countdown. It's a-
: Out of control countdown?
: Out of control, yeah. People quote the singularity, and that's probably a good way to think about it. It's a singularity. It's hard to predict like a black hole, what happens past the event horizon.
: Right. So, once it's implemented, it's very difficult because it would be able to-
: Once the genie is out of the bottle, what's going to happen?
: Right. And it will be able to improve itself.
: That's where it gets spooky, right? The idea that it can do thousands of years of innovation very, very quickly.
: And, then, it will be just ridiculous.
: We will be like this ridiculous biological shitting, pissing thing trying to stop the gods. "No, stop. We're like living with a finite lifespan, and watching, you know, Norman Rockwell paintings."
: It could be terrible, and it could be great. It's not clear.
: But one thing is for sure, we will not control it.
: Do you think that it's likely that we will merge somehow or another with this sort of technology, and it'll augment what we are now, or do you think it will replace us?
: Well, that's the scenario. The merge scenario with AI is the one that seems like probably the best. Like if-
: For us?
: Yes. Like if you can't beat it, join it. That's-
: Yes, yeah.
: You know. So, from a long-term existential standpoint, that's like the purpose of Neuralink is to create a high bandwidth interface to the brain such that we can be symbiotic with AI because we have a bandwidth problem. You just can't communicate through fingers. It's too slow.
: And where's Neuralink at right now?
: I think. we'll have something interesting to announce in a few months. That's, at least, an order of magnitude better than anything else. I think better than, probably, anyone thinks is possible.
: How much can you talk about that right now?
: I don't want to jump the gun on that.
: But what's like the ultimate? What's the idea behind that? Like, what are you trying to accomplish with it? What would you like best case scenario?
: I think, best case scenario, we effectively merge with AI where AI serves as a tertiary cognition layer, where we've got the limbic system. Kind of the, you know, primitive brain essentially. You got the cortex. So, you're currently in a symbiotic relationship. Your cortex and limbic system are in a symbiotic relationship. And, generally, people like their cortex, and they like their limbic system. I haven't met anyone who wants to delete their limbic system or delete their cortex. Everybody seems to like both.
: And the cortex is mostly in service to the limbic system. People may think that the thinking part of themselves is in charge, but it's mostly their limbic system that's in charge. And the cortex is trying to make the limbic system happy. That's what most of that computing power is. It's launched towards, "How can I make the limbic system happy?" That's what it's trying to do.
: Now, if we do have a third layer, which is the AI extension of yourself, that is also symbiotic. And there's enough bandwidth between the cortex and the AI extension of yourself, such that the AI doesn't de facto separate. Then, that could be a good outcome. That could be quite a positive outcome for the future.
: So, instead of replacing us, it will radically change our capabilities?
: Yes. It will enable anyone who wants to have super human cognition, anyone who wants. This is not a matter of earning power because your earning power would be vastly greater after you do it. So, it's just like anyone who wants can just do it in theory. That's the theory. And if that's the case then, and let's say billions of people do it, then the outcome for humanity will be the sum of human will, the sum of billions of people's desire for the future.
: That billions of people with enhanced cognitive ability?
: Radically enhanced?
: And which would be — It — But how much different than people today? Like if you had to explain it to a person who didn't really understand what you're saying, like how much different are you talking about? When you say radically improved, like, what do you mean? You mean mind reading?
: It will be difficult to really appreciate the difference. It's kind of like how much smarter are you with a phone or computer than without? You're vastly smarter actually. You know, you can answer any question. If you connect to the internet, you can answer any question pretty much instantly, any calculation, that your phone's memory is essentially perfect. You can remember flawlessly. Your phone can remember videos, pictures, everything perfectly. That's the-
: Your phone is already an extension of you. You're already a cyborg. You don't even — What most people don't realize, they are already a cyborg. That phone is an extension of yourself. It's just that the data rate, the rate at which — The communication rate between you and the cybernetic extension of yourself, that is your phone and computer, is slow. It's very slow.
: And that is like a tiny straw of information flow between your biological self and your digital self. And we need to make that tiny straw like a giant river. A huge high band with the interface. It's an interface problem, data rate problem. It's all the data rate problem that I think we can hang on to human machine symbiosis through the long term. And then, people may decide that they want to retain their biological self or not. I think they'll probably choose to retain the biological self.
: Versus some sort of Ray Kurzweil scenario where they download themselves into a computer?
: You will be essentially snapshotted into a computer at any time. If your biological self dies, you could probably just upload it to a new unit literally.
: Pass that whiskey. We're getting crazy over here. This is getting ridiculous.
: Down the rabbit hole.
: Grab that sucker. Give me some of that. This is too freaky. See, if I was just talking-
: I've been thinking about this for a long time, by the way.
: I believe you. If I was talking to one — Cheers, by the way.
: Cheers. It is a great whiskey.
: Thank you. I don't know where this came. Who brought this to us?
: I'm trying to remember. I can't-
: Somebody gave it to us. Old Camp. Whoever it was-
: It's good.
: … thanks.
: It's good.
: Yeah, it is good. This is just inevitable. Again, going back to when you decided to have this fatalistic viewpoint. So, you weren't — You tried to warn people. You talked about this pretty extensively. I've read several interviews where you talked about this. And then, you just sort of just said, "Okay, it just is. Let's just-" And, in a way, by communicating the potential for — I mean, for sure, you're getting the warning out to some people.
: Yeah. Yeah. I mean, I was really going on the warning quite a lot. I was warning everyone I could. Yeah, I've met with Obama and just for one reason, like, "Better watch out."
: Just talk about AI.
: And what did he say? So, what about Hillary? Worry about her first. Shh, everybody, quiet.
: He listened. He certainly listened. I met with Congress. I met with — I was at a meeting of all 50 governors and talked about just the AI danger. And I talked to everyone I could. No one seemed to realize where this was going.
: Is it that, or do they just assume that someone smarter than them is already taking care of it? Because when people hear about something like AI, it's almost abstract. It's almost like it's so hard to wrap your head around it.
: It is.
: By the time it happens, it will be too late?
: Yeah. I think, they didn't quite understand it, or didn't think it was near term, or not sure what to do about it. And I said, like, you know, an obvious thing to do is to just establish a committee, government committee, to gain insight. You know, before you oversight, before you do make regulations, you should like try to understand what's going on. And then, you have an insight committee. Then, once they learn what's going on, you get up to speed. Then, they can make maybe some rules or proposed some rules. And that would be probably a safer way to go about things.
: It seems — I mean, I know that it's probably something that the government's supposed to handle, but it seems like I wouldn't want the — I don't want the government to handle this.
: Who do you want to handle this?
: I want you to handle this.
: Oh geez.
: Yeah. I feel like you're the one who could bring the bell better because if Mike Pence starts talking about AI, I'm like, "Shut up, bitch. You don't know anything about AI. Come on, man. He doesn't know what he's talking about." That's just games.
: I don't have the power to regulate other companies. I don't if I'm supposed to, but you know.
: Right, but maybe companies could agree. Maybe there could be some sort of a — What I mean is we have agreements where you're not supposed to dump toxic waste into the ocean, you're not supposed to do certain things that could be terribly damaging, even though they would be profitable. Maybe this is one of those things.
: Maybe we should realize that you can't hit the switch on something that's going to be able to think for itself and make up its own mind as to whether or not it wants to survive or not, and whether or not it thinks you're a threat, or whether or not it thinks you're useless. Like, "Why do I keep this dumb finite life form alive? Why? Why keep this thing around? It's just stupid. It just keeps polluting everything. It's shitting everywhere it goes, lighting everything on fire, and shooting at each other. Why would I keep this stupid thing alive? Because, sometimes, it makes good music, you know. Sometimes it makes great movies. Sometimes it makes beautiful art, and sometimes — you know. Sometimes it's cool to hang out with. Like with my-
: Yes, for all those reasons.
: Yeah. For us, those are great reasons.
: But for anything objective standing outside that go, "This is definitely a flawed system." This is like if you went to the jungle and you watch these chimps engage in warfare and beat each other with wooden sticks.
: Chimps are really mean.
: They're fucking real mean.
: They're fucking mean.
: They're real mean.
: I saw a movie, Chimpanzee. I thought it was going to be like some Disney thing. Like, holy cow.
: What movie was that?
: It's called Chimpanzee.
: Is it a documentary?
: Yeah, yeah. It's kind of like a documentary. I was like, "Damn, these chimps are mean."
: They're mean.
: They're cruel.
: Yeah. They're calculated. Yeah.
: They sneak up on each other and-
: Like, I didn't realize chimps did calculated cruelty.
: I was pretty — I left that meeting kinda like, "This is dark."
: Right. Well, we know better because we've advanced. But if we hadn't, we'd be like, "Man, I don't want to fucking live in a house. I like the chimp ways, bro. Chimp ways to go. This is it, man, chimp life. You know, we got-
: Simple chimp life.
: Chimp life right now. But we, in a way, to the AI, might be like those chimps and like, "These stupid fucks launching missiles out of drones, and shooting each other underwater." Like we're crazy. We got torpedoes, and submarines, and fucking airplanes that drop nuclear bombs indiscriminately on cities. We're assholes.
: They might go, "Why are they doing this?" It might, like, look at our politics, look at what we do in terms of our food system, what kind of food we force down each other's throats. And they might go, "These people are crazy. They don't even look after themselves."
: I don't know. I mean, how much do we think about chimps? Not much.
: Very little.
: It's like-
: It's true.
: … these chimps are at war. This like look — It's like groups of chimps just attack each other, and they kill each other. They torture each other. That's pretty bad. They hunt monkeys. They're — Like this is probably the most, but, you know. I mean, when was the last time you watched chimps?
: All the time.
: You do.
: You're talking to the wrong guy.
: Okay. Well, unfortunately, yeah.
: This fucking podcast, dude, we're talking about chimps every episode.
: It's chimp city? Okay.
: People are laughing right now. Yeah, constantly. I'm obsessed.
: I saw that David Attenborough documentary on chimps where they were eating those colobus monkeys and ripping them apart.
: Yes, this was rough.
: I saw that many, many years ago.
: It's gruesome.
: It just changed how-
: I go, "Oh, this is why people are so crazy. We came from that thing."
: Yeah, exactly.
: It is the colobus.
: They got, like, better philosophy.
: Yeah, they're like swingers.
: Yeah, they really are. They seem to be way more — Even than us, way more civilized.
: They just seem to resolve everything with sex.
: Yeah. The only rules they have is the mom won't bang the son. That's it.
: That's it. Mom won't bang her sons. They're good women.
: Good women in the bonobo community. Everybody else is banging it out.
: Yeah. I haven't seen the Bonobo Movie.
: Well, they're disturbing just at a zoo of bonobos at the zoo.
: They're just constantly going.
: Constantly fucking, yeah. It's all they do.
: It's just one stuff.
: Yeah. And they don't care, gay, straight, whatever. Let's just fuck. What's with these labels?
: I haven't seen bonobos at a zoo. I just probably like-
: I don't think I have either.
: And not on the PJ section.
: Yeah, I don't think they have them at many zoos. We've looked at it before too, didn't we?
: It's probably pretty awkward.
: Yeah. I think that's the thing. They don't like to keep regular chimps at zoos because bonobos are just always jacking off and-
: Fucking it.
: In San Diego.
: What's that? They have in San Diego?
: San Diego's got some, yeah.
: Really? Interesting.
: Probably separate them. Yeah.
: I mean, how many are there in a cage, you know? I was like-
: … "It's going to be pretty intense."
: Yeah, yeah. Yeah, we're a weird thing, you know. And I've often wondered whether or not we're — you know, our ultimate goal is to give birth to some new thing. And that's why we're so obsessed with technology because it's not like this technology is really — I mean, it's certainly enhancing our lives too in a certain way, but, I mean, ultimately, is it making people happier right now? Most technology I would say no. In fact, you and I were talking about social media before this about just not having Instagram on your phone, and not dealing, and you feel better.
: Yes. I think, one of the issues with social media, it's been pointed out by many people, is that, I think, maybe particularly Instagram people look like they have a much better life than they really do.
: By design.
: Yeah. People are posting pictures of when they're really happy. They're modifying those pictures to be better looking. Even if they're not modifying the pictures, they're, at least, selecting the pictures for the best lighting, the best angle. So, people basically seem they are way better looking than they basically really are.
: And they're way happier seeming than they really are. So, if you look at everyone on Instagram, you might think, "Man, there are all these happy beautiful people, and I'm not that good looking, and I am not happy. So, I must suck," you know. And that's going to make you feel sad; when, in fact, those people you think are super happy, actually, not that happy. Some of them are really depressed. They're very sad. Some of the happiest-seeming people are actually some of the saddest people in reality. And nobody looks good all the time. It doesn't matter who you are.
: No. It's not even something you should want.
: Why do you want to look great all the time?
: Yeah, exactly. So, I think things like that can make people quite sad just by comparison because you're sort of — People generally think of themselves relative to others. It's like we are constantly re-baselining our expectations. And you can see to say if you watch some show like Naked and Afraid, or, you know, if you just go and try living in the woods by yourself for a while, and you're like, "The land that civilization is quite great." People want to come back to civilization pretty fast on Naked or Afraid.
: Wasn't there a Theodore quote, that "Comparison is the thief of joy."
: Yeah. Happiness is reality minus expectations.
: That's great too, but the comparison is the thief of joy really holds true to people. Is it?
: Theodore Roosevelt.
: Roosevelt, fascinating. And when you're thinking about Instagram, because what essentially Instagram is for a lot of people is you're giving them the opportunity to be their own PR agent, and they always go towards the glamorous, you know. And when anybody does show, you know, #nofilter, they really do do that. "Oh, you're so brave. Look at you, no makeup," you know, which they look good anyway.
: "You look great. What are you doing? Oh my God. You don't have makeup on. You still look hot as fuck. You know what you're doing. I know what you're doing too." They're letting you know. And then, they're feeding off that comment section. Sort of sitting there like it's a fresh stream of love. Like you're getting right up to the sources as it comes out of the earth, and you're sucking that sweet, sweet love water.
: A lot of emojies, smoggy emojies.
: A lot of emojies.
: My concern is not so much what Instagram is. It's that I didn't think that people had the need for this or the expectation for some sort of technology that allows them to constantly get love and adulation from strangers, and comments, and this ability to project this sort of distorted version of who you really are.
: But I worry about where it goes. Like what's the next one? What's the next one? Like, where's is it? Is it going to be augmented to some sort of a weird augmented or virtual sort of Instagram type situation where you're not going to want to live in this real world, you're going to want to interface with this sort of world that you've created through your social media page and some next level thing.
: Yeah. Go live in the simulation.
: Yeah, man.
: In the simulation.
: Some ready player one type shit that's real. That seems — we have that HTC vibe here. I've only done it a couple times quite honestly because it kind of freaks me out.
: My kids fucking love it, man. They love it. They love playing these weirdo games and walking around that headset on. But part of me watching them do it goes, "Wow, I wonder if this is like the precursor." Just sort of like if you look at that phone that Gordon Gekko had on the beach and you compare that-
: Yes, the big cell phone.
: Yeah, you pair that to like a Galaxy Note 9.
: Like how the fuck did that become that, right? And I wonder when I see this HTC Vibe, I'm like, "What is that thing going to be 10 years from now when we're making fun of what it is now?" I mean, how ingrained, and how connected and interconnected is this technology going to be in our life?
: It will be, at some point, indistinguishable from reality.
: We will lose this. We'll lose this. Like you and I are just looking at each other through our eyes.
: Are we?
: I see you. You see me, I think, I hope.
: You think so?
: I think you probably have regular eyes.
: This could be some simulation.
: It could. Do you entertain that?
: Well, the argument for the simulation, I think, is quite strong because if you assume any improvements at all over time, any improvement, 1%, 0.1%, just extend the time frame, make it a thousand years, a million years. The universe is 13.8 billion years old. Civilization, if you count it, if you're very generous, civilization is maybe 7000 or 8000 years old if you count it from the first writing. This is nothing. This is nothing.
: So, if you assume any rate of improvement at all, then games will be indistinguishable from reality, or civilization will end. One of those two things will occur. Therefore, we are most likely in a simulation.
: Or we're on our way to one, right?
: Because we exist.
: Well, not just because we exist.
: Pretty exactly.
: We could most certainly be on the road. We could be on the road to that, right. it doesn't mean that it has to have already happened.
: It could be in base reality. It could be in base reality.
: We could be here now on our way to the road or on our way to the destination where this can never happen again, where we are completely ingrained in some sort of an artificial technology or some sort of a symbiotic relationship with the internet or the next level of sharing information. But, right now, we're not there yet. That's possible too, right? It's possible that a simulation is, one day, going to be inevitable, that we're going to have something that's indistinguishable from regular reality, but maybe we're not there yet. That's also possible.
: Yes, it is.
: Though we're not quite there yet. This is real. You want to touch that wood?
: It feel very real.
: Maybe that's why everybody is like into like mason jars and shit.
: Mason jars.
: Suede shoes. People that like craft restaurants, and they want raw wood. Everyone wants the metal people. It seems like people are like longing toward some weird log cabin type nostalgia.
: Sure, reality.
: Yeah, like holding on. Like clinging.
: Dragging their nails through the man like, "Don't take me yet."
: "I want to-"
: But then, people go get a mason jar with a wine stem or a handle. That's dark.
: It makes me-
: It makes me lose faith in humanity.
: Mason jar, wine stem and a handle, they have those?
: The sturdy people. That's just assholes. That's like people make pet rocks.
: Right. Some people are just assholes. They take advantage of our generous nature.
: It was made with the wine stem. Made with handle.
: They made it that way?
: Yes. They're manufactured like that.
: So, the one way, they welded it on to the mason jar. You fuck.
: But that would be fine if there was like glued it on or something.
: Right. There would be like-
: But it was made that way.
: Like trash shit. Oh, this is disgusting. Look at this. It is right there.
: Yes, it's pretty harsh. Yup.
: This is terrible. Yeah. That's like fake breasts that are designed to be hard. Like fake breasts from the '60s. It's like if you really long for the ones with ripples, here we go. Yeah. That's almost what that is.
: What are you going to do, man? There's nothing, you know. There's nothing you can do to stop certain terrible ideas from propagating.
: Yeah. Anyway, I don't want to sound like things are too dark because I think like you kind of have to be optimistic about the future. There's no point in being pessimistic. It's just too negative because it is-
: It doesn't help.
: It doesn't help, you know. I think you want to be — I mean, my theory is like you'd rather be optimistic. I think, I'd rather be optimistic and wrong than pessimistic and right.
: At least, we're on that side.
: Right, yeah.
: Because if you're pessimistic, it's going to be miserable.
: Yeah. Yeah, nobody wants to be around you anyway if it's the end of the world. You're like, "I fucking told you, bro."
: Yeah, exactly.
: The world is ending. Yeah. It is way — it is for all.
: I did my part.
: I mean-
: Enjoy the journey.
: Right. If you really want to get morose, I mean, it is what it is for all of us anyway. We're all going to go, unless something changes.
: I mean, ultimately, you know, even if we just sort of existed as humans forever, we'd still eventually would be like the heat death of the universe-
: Gazillion years from now.
: Right, even if we get it past the sun.
: If we figure out a way past the sun running out of juice.
: Eventually, it's going to end. It's just a question of when.
: So, it really is all about the journey.
: Or transcendence from whatever we are now into something that doesn't worry about death.
: The universe, as we know it, will dissipate into a fine mist of cold nothingness eventually.
: And then, someone's going to bottle it and put a fragrance to it, sell it to French people in another dimension.
: It's just a very long time.
: So, I think it's really just about, how can we make it last longer?
: Are you a proponent of the multi-universe's theory? Do you believe that there are many, many universes, and that even if this one fades out that there's other ones that are starting fresh right now, and there's an infinite number of them, and they're just constantly in a never-ending cycle of birth and death?
: I think most likely. This is just about probability. There are many, many simulations. These simulations, we might as well call them reality, or we could call them the multiverse.
: These simulations you believe are created like someone has manufactured-
: They're running on the substrate.
: That substrate is probably boring.
: How so?
: Well, when we create a simulation like a game or a movie, it's the distillation of what's interesting about life. You know, it takes a year to shoot an action movie. And then, that's all to slow down into two or three hours. So, let me tell you, if you've seen an action movie being filmed, it's freaking — It's boring. It's super boring. It takes — There's like lots of takes. Everything's in a green screen. It looks pretty goofy. It doesn't look cool. But once you had the CGI, and have great editing, it's amazing.
: So, I think, most likely, if we're a simulation, it's really boring outside the simulation because why would you make simulation as boring? You'd make simulation way more interesting than base reality.
: That is if this right now is a simulation.
: And, ultimately, inevitably, as long as we don't die or get hit by a meteor, we're going to create some sort of simulation if we continue on the same technological path we're on right now.
: But we might not be there yet. So, it might not be a simulation here. But it most likely is you feel other places.
: This notion of a place or where is-
: Flawed perception.
: Like that if you have that, sort of, that vibe you have, which is for the — that's was made by valve, and it's really valve that made it. HTC did the hardware, but it's really a valve thing.
: Makers of Half-life.
: Yes. Great company.
: Great company.
: When you're in that virtual reality, which is only going to get better, where are you? Where are you really?
: You aren't anywhere.
: Well, whereas-
: You're in the computer.
: You know, what defines where you are?
: It's your perception.
: Is it your perceptions or is it, you know, a scale that we have under your butt. You're right here. I've measured you. You're the same weight as you were when you left. But meanwhile, your experience is probably different-
: Why do you think you're where you are right now? You might not be.
: I'll buck up a joint if you keep talking. Your man is just going to come in here. We might have to lock the door.
: Right now, you think you're in a studio in LA.
: That's what I heard.
: You might be in a computer.
: Man, I think about this all the time. Yeah, I mean, it's unquestionable that one day that will be the case, as long as we keep going, as long as nothing interrupts us, and if we start from scratch, and, you know, we're single-celled organisms all over again. And then, millions and millions of years later, we become the next thing that is us with creativity and the ability to change this environment. It's going to keep monkeying with things until it figures out a way to change reality. To change — I mean, almost like punch a hole through what is this thing into what what it wants it to be and create new things. And then, those new things will intersect with other people's new things, and there will be this ultimate pathway of infinite ideas and expression all through technology.
: And then, we're going to wonder like, "Why are we here? What are we doing?"
: Let's find out.
: I mean, I think we should take the actions, the set of actions that are most likely to make the future better.
: Yes, right.
: Right. Right. And then, we evaluate those actions to make sure that it's true.
: Well, I think there's a movement to that. I mean, in terms of like a social movement. I think some of it's misguided, and some of it's exaggerated, and there's a lot of people that are fighting for their side out there. But it seems like the general trend of, like, social awareness seems to be much more heightened now than has ever been in any other time in history because of our ability to express ourselves instantaneously to each other through Facebook, or Twitter, or what have you. And that the trend is to abandon preconceived notions, abandon prejudice, abandon discrimination, and promote kindness and happiness as much as possible. Looking at this knife? Somebody gave it to me. Sorry.
: Yeah. What is it?
: Fuck you. My friend, Donnie, brought this with him, and it just stayed here. I have a real samurai sword, if you want to play with that. I know you're into weapons. That's from the 1500s. Samurai's something on the table.
: That's cool.
: I'll grab it. Hold on. Yeah, that's legit samurai sword from an actual samurai from the 1500s. If you pull out that blade, that blade was made the old way where a master craftsman-
: Folded metal?
: Folded that metal and hammered it down over and over again over a long period of time, and honed that blade into what it is now. What's crazy is that more than 500 years later, that thing is still pristine. I mean, whoever took care of that and passed it down to the next person who took care of it, and you know until it got to the podcast room, it's pretty fucking crazy.
: One day, someone's going to be looking at a Tesla like that. How many of these fucking backdoor they pop off sideways like a Lamborghini?
: They should see what the Tesla can do. He didn't — You should — I'll show you how to once.
: Well, I've driven one. I love them.
: Yeah, but most people don't know what it can do.
: In terms like ludicrous mode? In terms of like driving super fast and irresponsibly on public roads, is that what you're saying?
: Any car can do that.
: Yeah. What can it do that I need to know about?
: I mean, the Model X can do this like ballet thing to the Trans-Siberian Orchestra. It's pretty cool.
: Wait, it dances?
: Legitimate, like it goes around?
: Why would you program that into a car?
: It seemed like fun.
: That's what I get about you. That's what's weird. Like when you showed up here, you were all smiles, and you pull out a fucking blowtorch and not a blowtorch, but I'm like, "Look at this-"
: Not a flamethrower.
: Not a flamethrower. Like, "He's having fun."
: I want to be clear, it's definitely not a flamethrower.
: But you're having fun. Like this thing, you know, you program a car to do a ballet dance, you're having fun.
: It's great.
: But how do you have the time to do that? I don't understand why you're digging holes under the earth, and sending rockets into space, and powering people in Australia. Like how the fuck do you have time to make the car dance ballet?
: Well, I mean, in that case there were some engineers at Tesla that said, "You know, what if we make this car dance and play music?" I'm like, "That sounds great. Please do it. Let's try to get it done in time for Christmas." We did.
: Is there a concern about someone just losing their mind and making it do that on the highway?
: No, it won't do that.
: What if it's in bumper-to-bumper traffic?
: No, it won't do it?
: No. Actually, you have to sneeze drag.
: Oh, sneeze drag.
: Yeah, that's why people don't know about it. But if you have the car-
: It's like it could do lots of things, lots of things.
: Once Reddit gets a hold of it, everyone's going to know already.
: You just have to — Everyone, if you search for it on the internet, you will find out.
: They will find.
: But people don't know that they should even search for it.
: Well, they do now.
: There's so many things about the Model X, and the Model S, and the Model 3 that people don't know about. We should probably do a video or something to explain it because I have close friends of mine and I say, "Do you know the car can do this?" and they're like, "Nope."
: Do you want to do a video of that? Do you like the fact that some people don't know?
: No, I think it's probably not. We should tell people.
: Yeah, probably.
: That would help your product. I mean, it's not like you don't sell enough of them. You sell almost too many of them, right.
: I mean, I think, a Tesla is the most fun thing you could possibly buy ever. That's what it's meant to be. Well, our goal is to make — It's not exactly a car. It's actually a thing to maximize enjoyment, make as maximum fun.
: Okay. Electronic, like big screen, laptop, ridiculous speed, handling, all that stuff.
: Do you have a-
: And we're going to put video games in it.
: You are?
: Is that wise?
: What kind of video games? Candy Crush?
: You won't be able to drive while you're playing the video game. But, like, for example, we're just putting the Atari emulator, RAM emulator in it. So, we'll play a Missile Command, and Lunar Lander, and a bunch of other things. Yeah.
: That sounds cool.
: It's pretty fun.
: I like that.
: Yeah. I mean, probe the interface for Missile Command because it's too hard with the old trackball. So, there's a touch screen version of Missile Command. So, you have a chance.
: Do you — You have an old car, don't you? Don't you have like an old Jaguar?
: Yeah. How did you know that? Let's pause for that. I have a '61 series 1 E-type Jaguar.
: I love cars.
: It's great.
: Yeah, I love old cars.
: The only-
: That's one of the things-
: Yeah, the only two gassing cars I have are that and an old — like a Ford Model T that a friend of mine gave me. Those are my only two gasoline cars.
: Is the Ford Model T all stock? Oh, there's your car. Look at that.
: I have the convertible.
: That is a gorgeous car.
: It's a soft car.
: God, that's a good looking car.
: Is that yours?
: That is — It's not mine. It's extremely close to mine, but I don't have a front license plate on mine.
: It's a beautiful car. They nailed it. That new type-
: Mine looks like that.
: God, they nailed that.
: That's what mine looks like. Maybe it is mine.
: There's certain iconic shapes.
: And there's something about those cars too. They're not as capable, not nearly as capable as like a Tesla, but there's something really satisfying about the mechanical aspect of like feeling the steering, and the-
: … grinding of the gears and the shifting. Something about those that's extremely satisfying even though they're not that competent. Like I have a 1993 Porsche 964. It's like lightweight. It's an RS America. It's not very fast. It's not like in comparison to a Tesla or anything like that. But the thing about it is like it's mechanical, you feel it. Everything's like-
: It's like it gives you this weird thrill, like you're on this clunky ride, and there's all this feedback. There's something to that.
: Yeah. Yeah, absolutely. I mean, yeah. My E Type is like basically no electronics.
: And so, you like that, but you also like electronics.
: Like Tesla Sup, it's like the far end of electronics.
: It drives itself.
: It's driving itself better every day.
: We're about to release the software that will enable you to just turn it on, and it'll drive from highway on ramp, to highway exit, do lane changes, overtake other cars-
: To go from one interchange to the next. If you get on, say, the 405, get off 300 miles later, and go through several highway interchanges, and just overtake other cars, and hook into the nav system, and then-.
: And you're just meditating, om.
: While your car is just traveling.
: It's kind of eerie. It's kind of eerie.
: What did you think when you saw that video of that dude fallen asleep behind the wheel? I'm sure you've seen it, the one in San Francisco. It's like right outside of San Jose. It's out cold, like this. And the cars an inch bumper-to-bumper in traffic moving along.
: You've seen it, right?
: Yeah, yeah. We just changed the software. Changed the software. That's, I think, an old video. We changed software. If you don't touch the wheel, it will gradually slow down, and put the emergency lights on, and wake you up.
: Oh, that's hilarious.
: That's hilarious.
: Can you choose what voice wakes you up?
: Well, it's sort of more of a — It sort of honks.
: It honks.
: There should be like, "Wake up, fuckface. You're endangering your fellow humans."
: We could gently wake you up with a sultry voice.
: That would be good like something with a southern accent. "Hey, wake up."
: Wake up, sunshine.
: Hey, sweetie.
: Why don't you wake up?
: You could pick your-
: Right, like-
: Like whatever you want. Yes.
: Yeah, I choose the Australian girl for Siri.
: I like her voice.
: Do you want it seductive?
: It's my favorite. I like Australian.
: What flavor? Do what you want it to be angry. It could be anything.
: You want those Australian prison lady genes. Now, when you program something like that in, is this in response to a concern, or is it your own?
: Do look at it and go, "Hey, they shouldn't just be able to fall asleep. Let's wake them up."
: Yeah, yeah. It's like — You know, we're like — Yeah, people are falling asleep. We've got to do something about that.
: Right. But when you first released it, you didn't consider it, right? You're just like, "Well, no one's going to just sleep."
: People fall asleep in their cars all the time.
: All the time.
: They crash.
: Yeah, it's horrible.
: At least, our car doesn't crash. That's better.
: It's better not to crash.
: Imagine if that guy had fallen asleep in a gasoline car, they do all the time.
: For sure, yeah.
: They would crash into somebody.
: And, in fact, the thing that really, you know, got me to — It's like, "Man, we better get a autopilot going and get it out." A guy was in an early Tesla driving down the highway, and he fell asleep, and he ran over a cyclist, and killed him. I was like, "Man, if we had autopilot, he might have fallen asleep, but, at least, he wouldn't run over that cyclist."
: So, how did you implement it? Like did you just use cameras and-
: … programmed with the system, so that if it sees images, it slows down? And how much time do you get? And like-
: Is the person who's in control of it allow the program to how fast it goes?
: Yes. Yeah, you can program it to be more or less, like more conservative or like more aggressive driver. And you can say what speed you want it to — What speed is okay.
: I know you have ludicrous mode. Do you have douche bag mode?
: Well, in-
: It just cuts people off.
: Well, for lane changes, it's tricky because if you're in like LA, like unless you're pretty aggressive, right, it's hard to change lanes sometimes.
: You can't. It's hard to be Satnam. It's hard to be Namaste here in LA.
: If you want to hit that Santa Monica Boulevard off in-
: I mean, you've got to be a little pushy.
: You've got to be a little pushy, yeah.
: On the freeway.
: Especially if you were angry.
: If you're a little angry, they don't want you, and they speed up.
: Sometimes, yeah, I think, people like overall are pretty nice on the highway, even in LA, but sometimes they're not.
: Do you think the Neuralink will help that quick?
: Everybody will be locked in together, this hive mind.
: Tunnels will help it. We wouldn't have traffic.
: That will help a lot.
: How many of those can you put in there?
: Nice thing about tunnels-
: Are you thinking about for everybody?
: Nice thing about tunnels is you can go 3D.
: Oh right.
: So, you can go many levels.
: Until you hit.
: Yeah, but you go — You can have 100 levels of with bombs.
: Jesus Christ. I don't want to be on 99. That would be a negative 99 floors.
: This is one of the fundamental things people don't appreciate about tunnels is that it's not like roads. The fundamental issue with roads is that you have a 2D transport system and a 3D living and workspace environment. So, you've got all these tall buildings or concentrated work environments. And then, you want to go into those like 2D transport system with-
: Hugely inefficient.
: … pretty low density because cars are spaced out pretty far. And so, that, obviously, is not going to work. You're going to have traffic guaranteed. But if you can go 3D on your transport system, then you can solve all traffic. And you can either go 3D up with a flying car, or you can go 3D down with tunnels. You can have as many tunnel levels as you want, and you can arbitrarily relieve any amount of traffic. You can go further down with tunnels than you can go up with buildings. You're 10,000 feet down if you want. I wouldn't recommended it, but-.
: What was that movie with — What's his face? Bradley — Not Bradley Cooper, Christian? No. What the fuck is his name? Batman. Who is Batman?
: Christian Bale.
: Christian Bale, where they fought dragons. Him and Matthew McConaughey. He went down deep into the earth. How deep can you go?
: I don't think that was Batman.
: Yeah, it was. Yeah, it was.
: Batman fought dragons? I don't-
: No, it wasn't Batman but it's Christian Bale.
: The Rain of Fire.
: Rain of Fire.
: Never saw that?
: Terrible. Terrible but good. I would look at it some time.
: I wouldn't recommend drilling super far down but the earth is a big-
: Yeah, but you can't drill deep. It gets hot, right?
: … molten
: The earth is a giant ball of lava with a thin crust on the top, which we think of as like the surface, this thin crust. And it's mostly just a big bowl of lava. That's earth, but 10,000 feet is not a big deal.
: Have you given any consideration whatsoever to the flat earth movement?
: That's a troll situation.
: Oh, it's not. No, it's not. You would like to think that-
: … because you're super genius. But I, as a normal person, I know these people are way dumber than me. And they really, really believe. They watch YouTube videos, which go on uninterrupted, and spew out a bunch of fucking fake facts very eloquently and articulately. And they really believe. These people really believe.
: I mean, if it works for them, sure. Fine.
: It's weird though, right, that in this age where, you know, there's ludicrous mode in your car, goes 1.9 seconds, 060.
: That's 2.2.
: 2.2. Which one's 1.9? The Coaster.
: The Next Generation Roadster.
: Standard edition.
: Yeah, I'm on top of this shit.
: That's just without-
: Standard edition.
: Yeah. So, it's not the performance package.
: What performance package?
: What the fuck do you need?
: We put a rocket thruster in it.
: For real?
: What are they going to burn?
: Nothing. Ultrahigh pressure compressed air.
: Whoa. Just air?
: Just called gas thrusters.
: Then, do you have the air tanks or the-
: Sucking air, okay.
: Yeah. It has an electric pump.
: Pump it up like 10,000 PSI.
: And how fast are we talking? Zero to 60.
: How fast you want to go?
: I want to go-
: We could make this thing fly.
: I want to go back in time.
: I can make it fly.
: You make it fly?
: Do you anticipate that as being — I mean, you're talking about the tunnels and then flying cars. Do you really think that's going to be real?
: Too noisy, and there's too much airflow. So, the final issue with flying cars, I mean, if you get like one of those like toy drones, think of how loud those are and how much air they blow. Now, imagine if that's like a thousand times heavier. This is not going to make your neighbors happy. Your neighbors are not going to be happy if you land a flying car in your backyard.
: It will be very helicopter-like.
: Or on your roof. It's just really going to be like, "What the hell. That was annoying."
: You can't even — Like, if you want a flying car, just put some wheels on a helicopter.
: Is there a way around that? Like what if they figure out some sort of magnetic technology, like all those Bob Lazar type characters who were thinking that was a part of the UFO technology they were doing at Area 51? Remember, didn't they have some thoughts about magnetics? Nope.
: No? Bullshit?
: Yeah. There's a fundamental momentum exchange with the air. So, you must accelerate. There's like this — There's a sudden — You have a mass, and you have gravitational acceleration. And mass times — Your mass times gravity must equal the mass of airflow times acceleration of that airflow to have a neutral force. MG=MA
: So, it's impossible to go around-
: And then you won't move.
: If MG is greater than MA, you will go down. And if MA is greater than MG, you will go up. That's how it works.
: There's just no way around that?
: There is definitely no way around it.
: There's no way to create some sort of a magnetic something or another that allows you to float?
: Technically, yes. You could have a strong enough magnet, but that magnet would be so strong that you would create a lot of trouble.
: It would just suck cars up into your car? Just pick up axles and do that?
: I mean, it should have to repel off of either material on the ground or in a really nutty situation off of Earth's gravitational field, and somehow make that incredibly light, but that magnet would cause so much destruction. You'd be better off with a helicopter.
: So, if there was some sort of magnet road, like you have two magnets, and they repel each other, if you had some sort of a magnet road that was below you, and you could travel on that magnet road, that would work?
: Yes. Yes, you can have a magnet road.
: A magnet road. Is that too ridiculous?
: No, it will work. So, you could do that.
: That's ridiculous too, right?
: I would not recommend it.
: There's a lot of things you don't recommend.
: I would super not recommend that. Not good. Not wise, I think.
: Magnet roads?
: No. No. No, definitely not. Definitely not. Yeah, it would cause a lot of trouble.
: So, you put some time and consideration into this other than — You know, instead like my foolishly rendered thoughts. So, you think that tunnels are the way to do it?
: Oh, it will work, for sure.
: That'll work?
: And these tunnels that you're building right now, these are basically just like test versions of this ultimate idea that you have?
: You know, it's just a hole in the ground.
: Right. We played videos of it where your ideas-
: It's just a hole in the ground.
: … that you drop that hole in the ground. There's a sled on it, and the sled goes very fast, like 100 miles an hour plus.
: Yeah, it can go real fast. You can go as fast as you want. And then, if you want to go long distances, you can just draw the air out of the tunnel, make sure it's real straight.
: Draw the air out of the tunnel?
: Yeah, it's sort of vacuum tunnel because the — And then, depending on how fast you want to go, you're going to take these wheels, or you could use air bearings depending upon the ambient pressure in the tunnel, or you could mag lev it if you want to go super fast.
: So, magnet road?
: Yes, underground magnet roads.
: Underground magnet roads?
: Yeah. Otherwise, you're going to really create a lot of trouble because of those metal things.
: Oh. So, magnet road is the way to go, just underground.
: If you want to go really fast underground, you would be mag lev in a vacuum tunnel.
: Mag in a vacuum tunnel.
: Magnetic levitation in a vacuum tunnel launchers. Fun?
: With rocket launchers?
: No, I would not recommend putting any-
: Come on.
: … exhaust gas in the tunnel.
: Oh, okay. I see what you're saying because then the air will be gone.
: Because, then, the air will pump it out.
: Right. You have to pump it out, and you probably have limited amount of air in the first place. Like how much can you breathe? Do you have to pump oxygen into these cubicles, these tubes?
: No. We have a pressurized pod. It'd be like a little tiny underground spaceship basically.
: Like an airplane because you have air on airplanes. It's not getting new air in.
: It is.
: It is?
: You have like a little hole?
: Yeah, they have a pump.
: So, it gets it from the outside?
: Wow, I didn't know that.
: It's like the air's — Airplanes have it easy because, essentially, you can — they're pretty leaky, but-
: Yeah, but as long as the air pump is working at a distance. I mean, they have backup pumps, sort of like, you know, three pumps, or four pumps, or something. And then, there's like — It exhausts through the outflow valve and through whatever seals are not sealing quite right. Usually, the door doesn't seal quite right on the plane. So, there's a bit of leakage around the door. But the pumps exceed the outflow rate. And then, that sets the pressure in the cabin.
: Now, have you ever looked at planes and gone, "I can fix this."
: "I just don't have the time."
: I have a design for a plane.
: You do?
: A better design?
: I mean, probably. I think it is, yes.
: Who have you talked to about this?
: I've talked to friends.
: Friends and-
: I'm your friend.
: Girlfriends and-
: You can tell me. What you got? What's going on?
: Well, I mean, the exciting thing to do would be some sort of electric vertical takeoff and landing, supersonic jet of some kind.
: Vertical takeoff and landing meaning no need for a runway. Just shoot up straight in the air.
: How would you do that? I mean, they do that in some military aircraft, correct?
: Yes. The trick is that you have to transition to level flight. And then, the thing that you would use for vertical takeoff and landing is not suitable for high-speed flight.
: So, you have two different systems? Vertical takeoff is one system?
: I've thought about this quite a lot. I've thought about this quite a lot.
: I guess, thinking about an electric plane is that you want to go as high as possible, but you need a certain energy density in the battery pack because you have to overcome gravitational potential energy. Once you've overcome gravitational potential energy, and you're out at a high altitude, the energy use in cruise is very low. And then, you can recapture a large part of the gravitational potential energy on the way down. So, you really don't need any kind of reserve fuel, if you will, because you have the energy of height, gravitational potential energy. This is a lot of energy.
: So, once you can get high, like the way to think about a plane is it's a force balance. So, the force balance — So, a plane that is not accelerating is a neutral force balance. You have the force of gravity, you have the lift force, you have the wings. Then, you've got the force of the whatever thrusting device, so the propeller, or turbine, or whatever it is. And you've got the resistance force of the air.
: Now, the higher you go, the lower the air resistance is. Air density drops exponentially, but drag increases with the square, and exponential beats the square. The higher you go, the faster you will go for the same amount of energy. And at a certain altitude, you can go supersonic with less energy per mile, quite a lot less energy per mile than an aircraft at 35,000 feet because it's just a force balance.
: I'm too stupid for this conversation.
: It makes sense though.
: No, I'm sure it does. Now, when you think about this new idea of of design, when you have this idea about improving planes, are you going to bring this to somebody and check this one out?
: Well, I have a lot on my plate.
: Right. That's what I'm saying. I don't know how you do what you do now, but if you keep coming up with these. But it's got to be hard to pawn this off on someone else either, like, "Hey, go do a good job with this vertical takeoff and landing system that I want to implement to regular planes.".
: The airplane, electric airplane isn't necessarily right now. Electric cars are important. We need-
: We need some sort of-
: Solar energy is important. Stationary storage of energy is important. These things are much more important than creating electric supersonic futile. Also, the plane's naturally — You really want that gravitational energy density for an aircraft, and this improving over time. So, you know, it's important that we accelerate the transition to sustainable energy. That's why electric cars, it matters whether electric cars happen sooner or later. You know, we're really playing a crazy game here with the atmosphere or the oceans.
: We're taking vast amounts of carbon from deep underground and putting this in the atmosphere. It's just crazy. We should not do this. It's very dangerous. So, we should accelerate the transition to sustainable energy. I mean, the bizarre thing is that, obviously, we're going to run out of oil in the long term. You know, we're going to — There's only so much oil we can mine and burn. It's totally logical. We must have a sustainable energy transport and energy infrastructure in the long term.
: So, we know that's the endpoint. We know that. So, why run this crazy experiment where we take trillions of tons of carbon from underground and put it in the atmosphere and oceans? This is an insane experiment. It's the dumbest experiment in human history. Why are we doing this? It's crazy.
: Do you think this is a product of momentum that we started off doing this when it was just a few engines, a few hundred million gallons of fuel over the whole world, not that big of a deal? And then, slowly but surely over a century, it got out of control. And now, it's not just our fuel, but it's also, I mean, fossil fuels are involved in so many different electronics, so many different items that people buy. It's just this constant desire for fossil fuels, constant need for oil-
: Without consideration of the sustainability.
: You know, the things like oil, oil, coal, gas, it's easy money.
: It's easy money. So-
: Have you heard about clean coal? The president's been tweeting about it. It's got to be real. CLEAN COAL, all caps. Did you see? He used all caps. Clean coal.
: Well, you know, it's very difficult to put that CO2 back in the ground. It doesn't like being in solid form.
: Have you thought about something like that?
: It takes a lot of energy.
: Like some sort of a filter, giant building-sized filter sucks carbon out in the atmosphere? Is that possible?
: No, no, it doesn't. It's not possible.
: Nope, definitely not.
: So, we're fucked?
: No, we're not fucked. I mean, this is quite a complex question.
: You know, we're really just — When we — The more carbon we take out of the ground and add to the atmosphere, and a lot of it gets permeated into the oceans, the more dangerous it is. Like I don't think right — I think we're okay right now. We can probably even add some more but the momentum towards sustainable energy is too slow.
: Like there's a vast base of industry, vast transportation system. Like there's Two and a half billion cars and trucks in the world. And the new car and truck production, if it was a 100% electric, that's only about 100 million per year. So, it would take — If you could snap your fingers and instantly turn all cars and trucks electric, it would still take 25 years to change the transport base to electric. It makes sense because how long does a car and truck last before it goes into the junkyard and gets crushed? About 20 to 25 years.
: Is there a way to accelerate that process, like some sort of subsidies or some encouragement from the government financially?
: Well, the thing that is going on right now is that there is an inherent subsidy in any oil-burning device. Any power plant or car is fundamentally consuming the carbon capacity of the oceans and atmosphere, or just the atmosphere for short. So, like, you can say, okay, there's a certain probability of something bad happening past a certain carbon concentration in the atmosphere.
: And so, there's some uncertain number where if we put too much carbon into the atmosphere, things overheat, oceans warm up, ice caps melt, ocean real estate becomes a lot less valuable, you know, if something's underwater, but it's not clear what that number is. But, definitely, scientists, it's really quite — The scientific consensus is overwhelming. Overwhelming.
: I mean, I don't know any serious scientist, actually zero, literally zero who don't think, you know, that we have quite a serious climate risk that we're facing. And so, that's fundamentally a subsidy occurring with every fossil fuel burning thing, power plants, aircraft, car frankly even rockets. I mean, rockets use up — you know, they burn. They burn fuel. But there's just — you know, with rockets, there's just no other way to get to orbit unfortunately. So, it's the only way.
: But with cars, there's definitely a better way with electric cars. And to generate the energy, do so with photovoltaics because we've got a giant nuclear reactor in the sky called the sun. It's great. It sort of shows up every day, very reliable. So, if you can generate energy from solar panels, store up with batteries, you can have energy 24 hours a day.
: And then, you know, you can send to the polls or in the air to the north with, you know, high voltage lines. Most of the northern parts of the world tend to have a lot of hydropower as well. But, anyway, all fossil fuel-powered things have an inherent subsidy, which is their consumption of the carbon capacity of the atmosphere and oceans.
: So, people tend to think like why should electric vehicles have a subsidy, but they're not taking into account that all fossil fuel-burning vehicles fundamentally are subsidized by the cost, the environmental cost to earth, but nobody's paying for it. We are going to pay for it, obviously. In the future, we'll pay for it. It's just not paid for now.
: And what is the bottleneck in regards to electric cars, and trucks, and things like that? Is it battery capacity?
: Yeah. You got to scale up production. You got to make the car compelling, make it better than gasoline or diesel cars.
: Make it more efficient in terms of, like, the distance it can travel? You're going to be fueling-
: Yeah, you're going to be able to go far enough, recharge fast.
: And your Roadster, you're anticipating 600 miles. Is that correct?
: Yeah, yeah.
: What is it? What is that?
: Yeah, 600 miles.
: Is that right now? Like have you driven one 600 miles now?
: No. We could totally make one right now that would do 600 miles, but the thing is too expensive. So, like the car's got to-
: How much more so?
: Well, you know, just have a chartered kilowatt hour battery pack, and you can go 600 miles as long as you're-
: Right, versus what do you have now?
: 330-mile range. That's plenty for most people.
: 330-mile range. And what is that mean in terms of kilowatts?
: Well, that would be for Model S, 100-kilowatt hour pack will do about 330 miles. Maybe 335 because some people have hyper mild it to 500 miles per mile.
: Hyper mild it. What does that mean?
: Yeah, just like go on-
: 45 miles an hour or something?
: Yeah, like 30 miles an hour or so. It's like on level ground with — You pump the tires up really well, and go on a smooth surface, and you can go for a long time. But, you know, like definitely comfortably do 300 miles.
: Is there any-
: This is fine for most people. Usually, 200 or 250 miles is fine. 300 miles is — You don't even think about it really.
: Is there any possibility that you could use solar power, solar-powered one day, especially in Los Angeles? I mean, as you said about that giant nuclear reactor, a million times bigger than Earth just floating in the sky. Is it possible that one day, you'll be able to just power all these cars just on solar power? I mean, we don't ever have cloudy days if we do just three of them.
: Well, the surface area of a car is without making the car look really blocky or having some-
: Like a G wagon.
: Yeah, and just like if it looked a lot of surface area, or like maybe like solar panels fold out, or something-
: Like your E class. That's what it needed.
: That E type?
: Yeah, the Jaguar E type with a giant long hood, that could be a giant solar panel.
: Well, at the beginning of Tesla, I did want to have this like unfolding solar panel thing. They'd press a button, and it would just like unfold these solar panels, and like charge/recharge your car in the parking lot. Yeah, we could do that, but I think it's probably better to just put that on your roof.
: Right, yeah.
: And then, it's going to — It should be facing the sun all the time because like-
: What car have that on the roof?
: Otherwise, your car could be in the shade. You know, it could be in the shade, it could be in a garage, or something like that.
: Didn't the Fisker have that on the roof? The Fisker Karma New Generation for — I believe, it was only for the radio. Is that correct?
: Yeah, I mean, but I think it could like recharge like two miles a day or something.
: Did you laugh when they started blowing up when they get hit with water? Do you remember what happened?
: They got what?
: Yeah, they had a dealership or-
: Oh yeah.
: The Fisker Karmas were parked-
: Is that like that with a flood in Jersey?
: Yes, yes.
: When the hurricane came in, they got overwhelmed with water, and they all started exploding. There's a fucking great video of it. Did you watch the video?
: I didn't watch the video, but I did see — It's like some picture of the aftermath.
: If I was you, I'd be naked, lubed up, watch that video, laugh my ass off. They all blow up. They got wet, and they blew up. That's not good.
: Yeah, we made our battery waterproof, so that doesn't happen. Actually-
: Smart move.
: Yeah, there was a guy in Kazakhstan that — I think it was Kazakhstan that he just boated through a tunnel, an underwater tunnel, like a flooded tunnel, and just turned the wheels to steer, and pressed the accelerator, and it just floated through the tunnel.
: And he steered around the other cars. I mean, like-
: That's amazing.
: It's on the internet.
: What happens if your car gets a little sideways, like if you're driving in snow? Like what if you're driving, if you're autopilot is on, and you're in like Denver, and it snows out, and your car gets a little sideways, does it correct itself? Does that-
: Oh yeah. It's got great traction control.
: But does it know how to like correct? You know how, like, when your Ascend-
: Oh yeah, sure.
: … kicks, you know how to counter steer?
: Oh, yeah. No, it's really good.
: It knows how to do it?
: It's pretty crazy.
: That's pretty crazy.
: So, like if you're going sideways, it knows how to correct itself?
: It generally won't go sideways.
: It won't?
: Why not?
: It will correct itself before it goes sideways.
: Even in black eyes?
: Yeah. There's videos where you could see the car, the traction-
: Not alone.
: Traction control system is very good. It makes you feel like Superman. It's great. You like feel like you can — Like it's — It will make you feel like this incredible driver.
: I believe it.
: Now, how do you program that?
: We do have testing on like an ice lake in Sweden.
: Oh really?
: Yeah. And like Norway, and Canada, and a few other places.
: Porsche does a lot of that too? They do-
: They did it as well?
: They do a lot of their — They do some of their driver training school on these frozen surfaces. So, you're just — The car is going sideways whether you like it or not. And you have to learn how to slide into corners, and how do we test.
: Yeah. Electric cars have really great traction control because the reaction time is so fast.
: Sort of like where you're gassing a car, you've got a lot of latency. It takes a while for the engine to react, but for electric motors, incredibly precise. That's why you're like — You imagine like if you had like a printer or something, you wouldn't have a gasoline engine printer. That would be pretty weird or like a surgical device. It's going to be an electric motor on the surgical device on the printer. Gasoline engine's going to be just chugging away. It's not going to have the reaction time.
: But to an electric motor, it's operating at the most second level. So, it can turn on and off traction within, like, inches of getting on the onus. Like, let's say, you're driving on a patch of ice, it will turn traction off, and then turn it on a couple inches right after the ice, like a little patch of ice because in the frame of the electric motor, you're moving incredibly slowly. You're like a — You're a snail. You're just moving so slowly because it can see at a thousand frames a second. And so, it's like, say, one Mississippi. It just thought about it things a thousand times.
: So, it's to realize that your wheels are not getting traction. It understands there's some slippery surface that you're driving on.
: And it makes adjustments in real time.
: Yes, in milliseconds.
: That would be so much safer than a regular car.
: Yes, it is.
: Just that alone, for loved ones, you'd want them to be driving your car.
: Yes. The-
: Or on board. Fuck motors. Dude, fuck regular motors.
: That S, X, and 3 have the lowest probability of injury of any cars ever tested by the US government.
: So, this — Yeah, but it's pretty fun. It's pretty crazy. Like we — You know, people still sue us like they'll have like some accident at 60 miles an hour where they'd like twisted an ankle, and they slipped. Like they will be dead in another car, they still sue us.
: But that's to be expected, isn't it?
: It is to be expected.
: Do you take that into account with like the same sort of fatalistic, you know, undertones to sort of just go, "You've got to just let it go. This is what people do."
: I tell you I've got-
: This is what it is.
: … Quite a lot of respect for the justice system. Judges are very smart. And they see — they've — as like I haven't. So far, I've found judges to be very good at justice because like what — and juries are good too. Like, they're actually quite good. You know, people — You know, you read about like occasional errors in the justice system. Let me tell you, most the time, they're very good.
: And like the other guy mentioned who fell asleep in the car, and he rode over a cyclist. And that was what encouraged me to get autopilot out as soon as possible. That guy sued us.
: He sued you for falling asleep?
: Yes. I'm not kidding. He blamed it on the new car smell.
: He blamed him falling asleep on your new car smell. Does someone that's a lawyer-
: This is a real thing that happened.
: Someone that's a lawyer that thought that through in front of his laptop before he wrote that up.
: Yes, he got a lawyer, and he sued us, and the judge was like, "This is crazy. Stop bothering me. No."
: Thank God.
: Thank God. Thank God there's a judge out there with a brain.
: I tell you, judges are very good.
: Some of them.
: I have a lot of-
: What about that judge that sent all these boys up the river in Pennsylvania who was selling those kids out? You know about that story?
: Judge was selling young boys to prisons. He was like literally-
: Yeah, literally, under bribes for — He was-
: Was this an elected judge or-
: He was-
: Because sometimes you have a judge that's like actually a politician.
: No, he was a elected judge. This is a very famous story.
: He's in jail right now, I think, for the rest of his life. And he put away — He would take like a young boy who would do something like steal something from a store, and he would put them in detention for, you know, five years. Something ridiculous egregious. And they investigated his history. And they found out that he was literally being paid off. Was it by private prisons? Is that what the the deal was? There was some sort of — But, anyway, this judge is-
: Actually, two judges.
: Two judges?
: Two judges. Kids for cash scandals, let's call them.
: 2008, yeah. Common pleas judges. So, I think they are elected.
: And who was paying them? Someone — It proven to the point where they're in jail now that someone was paying them to put more asses in the seats in these private prisons.
: It's like a million-dollar payment to put them in a youth center builder.
: A million-dollar payment?
: I do think these private prisons thing is-
: Someone business.
: … creating a bad incentive.
: It's dark.
: Right, yes. But, I mean, that judge is in prison.
: Thank God.
: Yes, but for people who think perhaps the justice system consists entirely of judges like that, I want to assure you-
: … this is not the case. The vast majority of judges are very good.
: I agree.
: And they care about justice, and they could have made a lot more money if they wanted to be a trial lawyer. And instead, they cared about justice, and they made less money because they care about justice. And that's why they're judges.
: I feel that same way about police officers.
: I feel like there's so many interactions with so many different people with police officers that the very few that stand out that are horrific, we tend to look at that like, "This is evidence that police are all corrupt." And I think that's crazy.
: No. Most police are very honest.
: And like the military-
: Like they have an insanely-
: … personnel that I know-
: … are very honorable, ethical people.
: And much more honorable and ethical than the average person. That's my impression.
: I agree. That's my impression as well.
: And that's not to suggest that we be complacent and assume everyone is honest and ethical. And, obviously, if somebody is given a trusted place in society, such as being a police officer or a judge, and they are corrupt, then we must be extra vigilant against such situations-
: … and take action. But we should not think that this is somehow broadly descriptive of people in that profession.
: I couldn't agree more. I think there's also an issue with one of the things that happens with police officers, prosecutors, and anyone that's trying to convict someone or arrest someone is that it becomes a game. And in games, people want to win.
: And sometimes, people cheat.
: Yes, yes. I mean, you know, if you're a prosecutor, you should not always want to win. There are times when you should like, "Okay. I just should not want to win this case." And then, you know, like just pass on that case. Sometimes, people want to win too much. That is true.
: I think, also, it becomes tough. If you're like a district attorney, you know, you tend to sort of see a lot of criminals. And then, your view of the world can get negatively.
: You know, have a negative — You know, you can have a negative view of the world because, you know, you're just interacting with a lot of criminals. But, actually, most of society is not to consist of criminals.
: And I, actually, had this conversation at dinner several years ago with, I guess, it's Tony. I was like, "Man, it must, sometimes, seem pretty, pretty dark because, you know, man, there's some terrible human beings out there. And he was like, "Yup." And he was like dealing with some case, which consisted of a couple of old ladies that would run people over somehow for insurance money. It was rough. Like, "Wow, that's pretty rough." It's like hard to maintain faith in humanity if you're a district attorney, but, you know, it's only a few percent of society that are actually bad.
: And then if you go to the worst, say 0.1% of society are the worst, one in a thousand, one in a million, you know. Like how bad is the millionth worst person in the United States? Pretty damn bad. Like damn evil.
: Like the millionth, well, one in a million of evil is so evil, people cannot even conceive of it. But there's 330 million people in the United States. So, that's 330 people out there somewhere. But by the same token, there's also 330 people who are incredible angels and unbelievably good human beings.
: On the other side.
: But because of our fear of danger, we tend to — our thoughts tend to gravitate towards the worst-case scenario.
: And we want to frame that. And that's one of the real problems with prejudice, whether it's prejudice towards different minorities, or prejudice towards police officers, or anything, it's like we want to look at the worst-case scenario and say, "This is an example of what this is all about.".
: And you see that even with people, how they frame genders. Some men frame women like that. They get ripped off by a few women, and they said, "All women are evil." Some women get fucked over by a few men, "All men are shit." And this is very toxic.
: It is.
: And it's also — It's a very unbalanced way of viewing the world, and it's very emotionally-based, and it's based on your own experience, your own anecdotal experience. And it can be very influential to the people around you, and it's just it's a dangerous way. It's a dangerous thought process and pattern to promote.
: It is. It is a very dangerous, but I really think, you know, people should give other people the benefit of the doubt and assume that they are good until proven otherwise. And, I think, really, most people are actually pretty good people. Nobody's perfect.
: They have to be.
: If you think of vast numbers of us that are just interacting with each other constantly-
: … we have to be better than we think we are.
: Yes. I mean, like-
: There's no other way.
: I mean, here are these weapons but how many times, like, nobody's presumably try to murder you and you're-
: Nobody yet.
: Yes, nobody. It's like the sword right there.
: Not the flamethrower, fake flamethrower here-
: It's not a flamethrower. Now, we've got a real problem, I'm going to put it on that side to him and leave it for the guests.
: I'm like, "Look, man, if I say something that fucked up, it's right there."
: It will liven things up for sure. It's guaranteed to make any party better.
: Yeah. Well, that's — I mean, that's the armed civilization theory, right. An armed community is safe and polite community.
: You know, in Texas, it's kind of true. Yeah. I mean-
: People in Texas are super polite. Therefore, they've got a gun.
: Yes. Don't make somebody angry.
: We don't know what's going to happen.
: Yeah, it's a good move.
: Piss people off, and everybody are going to have a gun.
: You're off to just let that guy get in your lane.
: Yeah, yeah. You know, we got a big test site in Central Texas near Waco.
: Oh yeah? Beautiful.
: Yes, Space X in McGregor. It's about 15 minutes away from Waco.
: That's close to where Ted Nugent lives.
: It is?
: Shout out to Ted Nugent.
: Okay, cool.
: Yeah, there's — You know, we have lots of fire, and loud explosions, and things, and people-
: I bet.
: … they are cool with it.
: They don't give a fuck out there.
: They're very supportive.
: Yeah. You can buy fireworks where, you know, your kids go to school.
: Yeah. You know, it's dangerous.
: Yeah, but it's free.
: It's free.
: There's something about Texas-
: … that's very enticing because of that. It is dangerous, but it's also free.
: Yeah. I kind of like Texas actually.
: I prefer it over places that are more restrictive but more liberal because you could always be liberal. Like just because things are free and just because you have a certain amount of, you know, right wing type characters, it doesn't mean you have to be that way, you know.
: And, honestly, there's a lot of those people that are pretty fucking open minded and let you do whatever you want to do.
: As long as you don't bother them.
: Yeah, exactly.
: That's my hope right now with the way we're able to communicate with each other today and how radically different it is than generations past because we all — Just, the dust settles. We all realize, like what you're saying that most people are good.
: Most people are good.
: The vast majority?
: Yes. I think if you give people the benefit of doubt, for sure.
: I think you're right. You know who could help with that? Mushrooms.
: Don't you think?
: They're delicious.
: Yeah, right.
: They're good for you too.
: All of them. All kinds of them. What do you see in terms of, like, when you think about the future of your companies, what do you see is like bottlenecks? Want some more of this?
: Sure. Thank you.
: What do you see in terms of like bottlenecks of things that are holding back innovation? Is it regulatory commissions and people that don't understand the technology that are influencing policy? Like what could potentially be holding you guys back right now? Is there anything that you would change?
: Yeah, that's a good question. You know, I wish politicians were better at science. That would help a lot.
: That's a problem.
: There's no incentive for them to be good at science.
: There isn't. Actually, you know, they're pretty good at science in China, I have to say.
: Yeah. The mayor of Beijing has, I believe, an environmental engineering degree, and the deputy mayor has a physics degree. I met them, And Mayor says, "Shanghai is really smart and-".
: You're up on technology. What do you think about this government policy of stopping use of Huawei phones? And there's something about the the worry about spying. I mean, from what I understand from real tech people, they think it's horseshit.
: Oh I-.
: Like phones.
: I don't know. I don't know.
: Like the government say, "Don't you buy Huawei phones." Are you up on that at all? No? Should we just abandon this idea?
: Well, I think, like, I guess, if you have like top secret stuff, then you want to be pretty careful about what hardware you use. But, you know, like most people do not have top secret stuff.
: And, like, nobody really cares what porn you watch like, you know.
: Right, yeah.
: It's like nobody actually cares, you know. So-.
: If they do, that's kind of them.
: It's just like-
: National spy agencies do not give a rat's ass which porn you watch. They do not care. So, like, what secrets does a national spy agency have to learn from the average citizen? Nothing.
: Well, that's the argument against the narrative. And the argument by a lot of these tech people is that the real concern is that these companies, like Huawei, are innovating at a radical pace, and they're trying to stop them from integrating into our culture and letting this. Like right now, they're the number two cell phone manufacturer in the world.
: Samsung is number one. Huawei is number two. Apple is now number three. They surpassed Apple as number two. And the idea is that this is all taking place without them having any foothold whatsoever in America. There's no carriers that have their phones. You have to buy their phones unlocked through some sort of a third party, and then put-
: And the worry is, you know, that these are somehow another controlled by the Chinese government. The Communist Chinese government is going to distribute these phones. And I don't know if the worry's economic influence or they'll have too much power. I don't know what it is. Are you paying attention on any of this?
: Not really.
: I don't think we should worry too much about Huawei phones, you know. Maybe, you know, a national security agency shouldn't have Huawei phones. Maybe that's a question mark. But I think for the average citizen, this doesn't matter. Just like no, they're not. I'm pretty sure the Chinese government does not care about the goings of the average American citizen.
: Is there a time where you think that there will be no security, it will be impossible to hold back information that whatever bottleneck we'll let go, we're going to give in? That whatever bottleneck between privacy and ultimate innovation will have to be bridged in order for us to achieve the next level of technological proficiency that we're just going to abandon it, and there'll be no security, no privacy?
: Do people want privacy? Because they seem to put everything on the internet. Practically-.
: Well, right now, they are confused, but when you're talking about your Neuralink, and this this idea that one day, we're going to be able to share information, and we're going to be some sort of a thing that's symbiotically connected?
: Yeah. I think we really worry about security in that situation
: And when-
: For sure. That's like security will be paramount.
: But, also, what we will be. This will be so much different. Our concerns about money, about status, about where all of these things will seemingly go by the wayside if we really become enlightened, if we really become artificially enlightened by some sort of an AI interface where we have this symbiotic relationship with some new internet type connection to information? But, you know, what happens then? What is important? What is not important? Is privacy important when we're all gods?
: I mean, I think the things that we think are important to keep private right now-
: … we probably will not think going forward.
: Shame, right? Information, right? What are hiding? Emotions? What are we hiding?
: I mean, I think, like, I don't know. Maybe it's like embarrassing stuff.
: Right, embarrassing stuff.
: But there's actually — Like, I think, people, there's like not that much that's kept private that people — that is actually relevant.
: That other people would actually care about. When you think other people care about it, but they don't really care about it. And, certainly, governments don't.
: Well, some people care about it. But, then, it gets weird when it gets exposed. Like Jennifer Lawrence, when those naked pictures got exposed, like, I think, in some ways, people liked her more.
: They realized like she's just a person. It's just a girl who likes sex, and is just alive, and has a boyfriend, and sends him messages. And, now, you get to look into it, and you probably shouldn't have, but somebody let it go, and they put it online, and all right.
: She seems to be doing okay.
: She's a person. She's just you, and me, and it's the same thing. She's just in some weird place where she's on a 35-foot tall screen with music playing every time she talks.
: Yeah. I mean, I'm sure like not-
: No, but she's fine.
: She's not happy about it, but she's-
: But she's clearly doing fine.
: But once this interface is fully realized where we really do become something far more powerful in terms of our cognitive ability, our ability to understand irrational thoughts, and mitigate them, and that we're all connected in some sort of an insane way. I mean, what are our thoughts on wealth, our thoughts on social status? Like how many of those just evaporate? And our need for privacy, maybe our need for privacy will be the ultimate bottleneck that we'll have to surpass.
: I think, the things that we think are important now will probably not be important in the future, but there will be things that are important. It's just, like, different things.
: What will be more important?
: I don't know. There might be some more of ideas potentially. I don't think Darwin's going away.
: Darwin's going to be there.
: That was that, yeah.
: Darwin will be there forever.
: Forever, yeah.
: It would just be a different arena. Different arena.
: A digital arena.
: Different arena. Darwin is not going away.
: What keeps you up at night?
: Well, it's quite hard to run companies.
: Especially car companies, I would say. It's quite challenging.
: The car business is the hardest one of all the things you do?
: Yes, because it's a consumer-oriented business as opposed to like SpaceX and-
: Not that SpaceX because SpaceX is no walk in the park, but a car company, it's very difficult to keep a car company alive. It's very difficult. You know, there's only two companies in the history of American car companies that haven't gone bankrupt, and that's Ford and Tesla. That's it.
: Yeah, Ford rode out that crazy storm, huh? They're the only one.
: By the skin of their teeth.
: Shot out to the Mustang.
: Yeah, by the skin of their teeth. That is interesting, right?
: Same with Tesla, we barely survived.
: How close did you get to folding?
: Very close. I mean, 2008 is not a good time to be a car company, especially a startup car company, and especially an electric car company. That was like stupidity squared.
: And this is when you had those cool Roadsters with the T-top?
: With a target top?
: Yeah. We had like a — It was highly modified Elise chassis. The body was completely different. By the way, that was a super dumb strategy that we actually did because we-
: What's dumb?
: It was based on two false premises. One false premise was that we would be able to cheaply convert the Lotus Elise, and use that as a car platform, and that we'll be able to use technology from this little company called AC Propulsion for the electric drive train on the battery. Premise, the AC propulsion technology did not work in production, and we ended up using none of it in long-term. None of it. We had to resign everything.
: And then once you add a battery pack and electric motor to the car, it got heavier. It got 30% heavier. It invalidated the entire structure, all the crash structure. Everything had to be redone. Nothing. Like, I think, it had less than 7% of the parts were common with any other device including cars or anything.
: Everything? Including tires, and wheels, bolts, brakes?
: Yeah, even every-
: Steering wheel? Seat?
: The steering wheel was — I think, the steering wheel was almost the same. Yes, the windscreen. The windscreen.
: No. I think, the windscreen is the same.
: Yes. I think, we were able to keep the windscreen.
: But the last was 7%. So, that's basically-
: Every body panel is different. The entire structure was different. We couldn't use the, like, the HVAC system, the air conditioner. It was belt-driven air conditioner. So, now, we needed something that was electrically driven. We need a new AC compressor.
: And all that takes away from the battery life as well, right?
: Yeah. We need a small highly efficient air conditioning system that fit in a tiny car and was electrically powered, not belt-driven. It was very difficult.
: How much of those weigh, those cars, the Roadster?
: I think it was 2700 pounds.
: That's still very light.
: 27. Depending on which version, 2650 to 2750 pounds, something like that.
: And what was the weight distribution?
: It was about 50 — Well, there were different versions of the car. So, it's about 55 on the rear.
: That's not bad.
: It was rear bias.
: Right, but not bad. Considering like a 911, which is like one of the most popular sports cars of all time. Heavy rear end bias.
: Well, I mean, yeah. The 911, I'm not going to joke, is like the master despite Newton not being on their side.
: I guess, fighting Newton, it's very difficult.
: It's like you've got those — The moments of inertia on a 911 don't make any sense.
: They do once you understand them. Once you understand-
: You don't want to hang the engine off the ass. This is not a wise move.
: You don't want to let up on the gas when you're in a corner.
: The problem with something where the engine is mounted over the rear axle or off the rear axle towards the rear is that your polar moment of inertia is fundamentally screwed. You cannot solve this. It's unsolvable. You're screwed. Polar moment of inertia, you're screwed.
: Like, essentially, if you spawn the car like a top, that's your polar moment of inertia. You're just — I promise I wouldn't swear on this show, by the way.
: Says who?
: This was for a friend.
: Tell that friend to go fuck himself. Who told you not to swear?
: A friend.
: He's not a good friend.
: That friend need to-
: I said I wouldn't swear.
: … realize you're fucking Elon Musk. You can do whatever you want, man. If you ever get confused, call me.
: I'll swear in private. Swear up a storm.
: Okay, just say freaking. It's a fun way. It's like old house moms. Wives and shit that have children, "Oh, this freaking thing."
: Yeah. But, anyway, like the Portia, it's kind of incredible how well Porsche handles given that it's the physics-.
: The moments of inertia are so messed up. To actually still make it work well is incredible.
: Well, if you know how to turn into the corner once you get used to the feeling of it, there's actual benefits to it. You know, there are some benefits.
: I enjoy. The car I had before, Tesla was a 911.
: That was-
: 997 or 6?
: Yeah. Great car, man.
: Yeah. I mean, particularly, the Porsche wouldn't have the variable veins on the turbo, and it didn't have the turbo lag. That was great.
: That was really great. The turbo lag is, like, you know, if you flirt, like phone home, call your mom.
: The older one, right?
: It's like about an hour later-
: … the car accelerates.
: And super dangerous too because where it will start spinning and-
: Yeah. There's something fun about it though like feeling that rear weight kicking around, you know. And again-
: No, it's great.
: … it's not efficient.
: It had a good feel to it.
: Yeah, I agree.
: But that's what I was talking about earlier about that little car that I have, the '93 911. It's not fast. It's not the best handling car, but it's more satisfying than any other car I have because it's so mechanical. It's like everything about it, like crack holes, and bumps, and it gives you all this feedback. And I take it to the comic store because when I get there, I feel like my brain is just popping, and it's on fire. It's like a strategy for me now that I really stop driving other cars there. I drive that car there just for the brain juice, just for the-
: The interaction.
: I mean, you should try Model S P100D.
: I'll try it.
: It will blow your mind-
: … and your skull.
: Tell me what to order, I'll order it.
: Model S P100D.
: Okay. Jamie, write it down.
: That's the car that I drive.
: Okay. Okay, I'll get the car you drive. Okay.
: It will blow your mind-
: How far can I drive?
: … out of your skull.
: I believe you.
: How far can I drive? How far can I drive?
: About 300 miles.
: That's good. For LA regular days, that's good.
: You will never notice the battery.
: How hard is it to get like one of them crazy plugs installed in your house? That difficult?
: No, it's super easy. It's like, yeah.
: Do you-
: It's like a dryer plug. It's like a dryer outlet.
: Didn't you come up with some crazy tiles for your roof that are solar paneled?
: Yeah, yeah. I have it on my roof right now actually. I'm just trying it out. The thing is it takes a while to test roof stuff because roofs have to last a long time.
: So, like, you want your roof to last like 30 years.
: Could you put it over a regular roof?
: No. So, there's two versions. It's like the solar panels you put on a roof. So, like, it depends on whether your roofs new or old. So, if your roofs new, you don't want to replace the roof. You want to put like solar panels on the roof.
: So, that's like retrofit, you know. And they were trying to make the retrofit panels look real nice. But then, the new product were coming out with it is if you have a roof that's either you're building a house or you're going to replace your roof anyway, then you make the tiles have solar cells embedded in the tiles.
: And then, it's quite a tricky thing because you want to not see the solar cell behind the glass tile. So, you have to really work with the glass, and the various coatings, and the layers, so that you don't see the solar cells behind the glass. Otherwise, it doesn't look right.
: So, it's really tricky.
: There it is. Jaime, put it up there.
: Man, that looks good. Is there a-
: See, like, if you look closely, you can see. If you zoom in, like, you can see the cell. But if you zoom out, you don't see the cell.
: Right, but it looks though.
: Like that's hard.
: That's invisible solar cells.
: It's really hard because you have to get the sunlight go through.
: But when it gets reflected back out, it doesn't — it hides the fact that there's a cell there.
: Now, are those available to the consumer right now?
: Well, we have — I think, that's-
: Those on that roof right there?
: That's amazing. Oh, that looks good.
: Ooh, I like that.
: That one is hard.
: Oh. So, you get that kind of fake Spanish looking thing. I like that.
: That's French slate.
: That's why people in Connecticut are smoking pipes. Look at that one.
: That's badass, dude. So, now-
: This will actually work.
: I believe you. So, the solar panels that are on that house that we just looked at, is that sufficient to power the entire home?
: It depends on your energy on how efficient-
: Yeah, yeah.
: So, generally, yes. I would say it's probably for most. It's going to vary, but anywhere from more than you need to maybe half. Like call it half to 1.5 of the energy that you need, depending on how much roof you have relative to living space.
: And how ridiculous you are with your TV.
: TVs no problem. Air conditioning.
: Air conditioning.
: Air conditioning is the problem. If you have an efficient air conditioner, and you don't — and depending on how — like, are you air conditioning rooms when they don't need to be air conditioned, which is very common-
: … because it's a pain in the neck, you know. It's like programming a VCR. It's like-
: Now, it's just blinking 12:00. So, people are just like, "The hell with that. I'm just going to make it this temperature all day long.".
: Right. You know how a smart home where if you're in the room, then it stays cool, right?
: Yeah, it should predict when you're going to be home, and then cool the rooms that you're likely to use with a little bit of intelligence. We're not talking about like genius home here. We're talking like elementary basic stuff.
: You know, like if you could hook that into the car, like manage you coming home. Like there's no point cooling the home-
: … keeping the home really cool when you're not there.
: But it can tell that you're coming home, it's just going to cool it to the right temperature right when you get there.
: Do you have an app that works with your solar panels or anything like that?
: Yeah. Yeah, we do.
: But we need to hook it into the air conditioning to really make the air conditioning work.
: Have you thought about creating an air conditioning system? I know you have. Trick question.
: Cannot answer questions about the future of potential products.
: Okay. Let's just let it go. We'll move on to the next thing.
: That would be an interesting idea.
: Yeah, I would say radiant heating and all that, good ideas. Now, when you think about the efficiency of these homes, and you think about implementing solar power and battery power, is there anything else that people are missing? Is there any other — Like, I just saw a smartwatch that is powered by the heat of the human body, and some new technology.
: It's able to fully power that way?
: I don't know-
: … if it's fully or if it's — Like this watch right here, this is a Casio.
: It's called a Pro Trek. And it's like an outdoors watch, and it's solar-powered.
: And so, it has the ability to operate for a certain amount of time on solar.
: So, if you have it exposed, it could function for a certain amount of time on solar.
: Yeah. Well, you know, like there's self-weighting watches where-
: … you know, it's just got a weight in the watch. And as you move your wrist, the way it moves from one side to the other, and it winds the watch up. That's a pretty cool thing.
: Yeah, yeah.
: Well, it's amazing that like Rolexes that it's all done mechanically.
: There's no batteries in there. There is no nothing.
: Yeah. You could do the same thing. You create a little charger that's based on wrist movement. It really depends on how much energy your watch uses.
: You know what's fucked up about that though? We accept a certain amount of like fuckery with those watches. Like I brought my watch. I have a Rolex that my friend, Lorenzo, gave me, and I brought it to the watch store, and I said, "This thing's always fast." I said, "It's always like after a couple of months, it's like five minutes fast." And they go, "Yup." They go, "Yeah."
: "It's just what it does."
: I go, "Hold on." I go, "So, you're telling me that it just is always going to be fast?" They're like, "Yeah. It's just like every few months, you get like reset it."
: It seems like they should recalibrate that thing.
: They can't. They tried. They say, every few months, whether it's four months, or five months, or six months, it's going to be a couple of minutes fast.
: Okay. It seems like they should really recalibrate that because-
: You should figure that shit out.
: … if it's always fast, you can just-
: … you know, delete those minutes.
: You need to fucking kick down the door at Rolex and go, "You bitches are lazy."
: It's kind of amazing that you can keep time mechanically on a wristwatch with these tiny little gears.
: It's amazing.
: I mean, the whole luxury watch market is fascinating. I'm not that involved in terms — Like I don't buy them. I've bought them as gifts. I don't buy them for myself. But when I look at them online, there's a million dollar watches out there now that are like they have like a little rotating moons and stars.
: And they live — Like look at this thing, how much is that when Jaime?
: I don't know. I just picked one.
: These are fucking preposterous guess. I like gears. I love them. I love them.
: Yeah. I think that is beautiful.
: But there's some of these people that are just taking it right in the ass. They're buying these watches for like $750,000 . Like, "Yeah, that's a Timex, son." Nobody knows. It's not any better than some Casio that you could just buy on — Like, look at that though.
: Well, here's the thing. If you're a person that doesn't just want to know the time, you want craftsmanship, you want some artisan's touch, you want innovation in terms of like a person figuring out how gears and cogs all line up perfectly, to every time it turns over, it's basically a second. I mean, that's just — There's this art to that.
: Yeah, I agree.
: Yeah, it's not just telling time. Yeah, I like this watch a lot, but if it got hit by a rock, I wouldn't be sad.
: It's just to watch. It's a mass-produced thing that runs on some quartz battery. But those things, there's art to that.
: Yeah. No, I agree. It's beautiful.
: Yeah. Love it.
: Yeah. There's something amazing about it. It's-
: Because it represents the human creativity. It's not just electronic innovation. There's something. It's a person's work in that.
: You don't have a watch on.
: I used to have a watch.
: What happened?
: My phone tells the time. So-
: That's a good point. Well, if you lose your phone? Do you — Wait, hold on.
: It's true.
: Let me guess, you are a no case guy.
: That's correct. Living on the edge. Living on the edge without a case.
: Neil deGrasse Tyson. Neil deGrasse Tyson was in here last week. I'm marveled at his ability to get through life without a case.
: That's right.
: You know, he takes his phone, and he flips it in between his fingers like a soldier would do with his rifle.
: He just rolls that shit in between his fingers.
: It's marvelous.
: He says that's the reason why they do it. He said, "Would you look at someone who has a rifle, why would they do that? Why would they flip it around like that?"
: It's like, it goes to drop, they have it in their hand. They catch it quickly.
: So, that's what he does with his phone. He's just flipping his phone around all the time. I got that in Mexico. I was hoping it holds joint.
: Does it do anything? It tips to open.
: Just a hole?
: It's just a hole.
: You could store things in there.
: Yeah. But like try it. Put a joint in there. Close it. You put like one blunt. One, that seems pretentious. You know, that's the idea behind it. I bought it when I was in Mexico because I figured it would be a good size to hold joints, or it's not.
: So, is that a joint or is it a cigar?
: It's marijuana inside of a tobacco.
: Okay. So, it's like posh, part tobacco a pot.
: Yeah. You never had that?
: Yeah. I think I tried one once.
: Come on, man. You probably can't because of stockholders, right?
: I mean, it's legal, right?
: Totally legal.
: How does that work? Do people get upset at you if you do certain things? It's just tobacco and marijuana in there. That's all it is. The combination of tobacco and marijuana is wonderful. First turned on to it by Charlie Murphy, and then reignited by Dave Chappelle. There you go.
: Plus whiskey.
: Perfect. It balances it out.
: Alcohol is a drug that's been grandfathered in.
: Well, it's not just a drug. It's a drug that gets a bad rep because you just have a little, it's great.
: Yeah, little sip here and there, and your inhibitions are relaxed, and it shows your true self. And, hopefully, you're more joyous, and friendly, and happy, and everything. The real worry is the people that can't handle it. Like the real worry about people who can't handle cars and go 016 in 1.9 seconds or anything.
: Have you ever considered something that — Like, imagine if one day, everyone has a car that's on the same, at least, technological standard as one of your cars, and everyone agrees that the smart thing to do is not just to have bumpers but to perhaps have some sort of a magnetic repellent device, something, some electromagnetic field around the cars that as cars come close to each other, they automatically radically decelerate because of magnets or something.
: Well, I mean, our cars brake automatically.
: Yeah. When they see things?
: But like a physical barrier, like-
: Well, the wheels work pretty well.
: The wheels do.
: Yeah, yeah. They work pretty well. Decelerated at, you know, 1.1 to 1.2 Gs, that kind of thing.
: Is your concern that one day all your cars will be on the road, and then, there'll still be regular people with regular cars 20-30 years from now that will get in the mix and be the main problem?
: Yeah. I think, it'd be sort of like, you know, there was a time of transition where there were horses and gasoline cars on the road at the same time. It's been pretty weird.
: That would be the weirdest.
: Yeah. I mean, horses were tricky. You know, back when Manhattan had like 300.000 horses, then figure out like if a horse lives 15 years, you got 20,000 horses dropping dead every day or every year, I should say. Every year, it's 20,000 horses. If there's 300,000 horses in a 15-year lifespan.
: Back in the Gangs of New York days, that movie.
: It's a lot of dead horses. You needed a horse to move the horse.
: They'll probably get pretty freaked out if they have to move our dead horse.
: Do you think they know what's going on?
: Do you think it's as hard?
: I mean, it's got to be like pretty weird.
: No, I would imagine.
: Like, in my mind, dragging this dead, you know, horse around, and I'm a horse.
: Do you-
: They might not like it.
: Do you ever stop and think about your role in civilization? Do you ever stop and think about your role in the culture? Because me, as a person, who never met you until today, when I think of you, you know, I've always thought of you as being this weirdo super inventor dude who just somehow or another keeps coming up with new shit, but there's not a lot of you out there. Like everybody else seems to be — I mean, obviously, you make a lot of money, and there's a lot of people that make a lot of money. You like that clock?
: Pretty dope, right?
: This is a great clock.
: You want one? I'll get you one.
: Okay, done.
: I like weird things like this.
: Oh, this is the coolest. It's TGT Promotion. What is this? TGT Studios? TGT Studios.
: Yeah. So, a gentleman who makes all this by hand. Yeah, it's really cool.
: My study is filled with weird devices.
: Well, get ready for another one.
: All right.
: I'm sending it your way.
: You want a werewolf too? I'll hook you up.
: All right. I'll take one.
: Okay. You want a werewolf and one clock coming up. Do you think about your role in the culture? Because me, as a person, who never met you until today, I've always looked at you and like, "Wow." Like, "How does this guy just keep inventing shit?" Like, how do you how do you keep coming up with all these new devices? And do you ever consider how unusual — Like I had a dream once that there was a million Teslas. Instead of like one Tesla, there was a million Teslas.
: Not just the car but Nikola.
: Oh, yeah, sure.
: And that in his day, there was a million people like him who were radically innovative.
: It was a weird dream, man. It was so strange. And I've had it more than once.
: That would result in a very rapid technology innovation. That's for sure.
: It's one of the only dreams of my life I've had more than one time.
: Okay, wow.
: Like where I've woken up, and it's in the same dream. I'm in the same dream. And in this dream, it's 1940s, 1950s, but everyone is severely advanced. There's flying blimps with like LCD screens in the side of them. And everything is bizarre and strange. And it stuck with me for whatever — Obviously, this is just a stupid dream. But for whatever reason, all these years, that stuck with being. Like it takes one man, like Nikola Tesla, to have more than a hundred inventions that were patents, right. I mean, he had some-
: He's pretty great.
: … pretty fucking amazing ideas.
: But there was-
: In his day, there was very few people like him.
: Yeah, that was true.
: What if there was a million? Like what in the experience-
: Things would advance very quickly.
: Right, but there's not a million Elon Musks. There's one motherfucker. Do you think about that or you just try to not?
: I don't think. I don't think you'd necessarily want to be me. That'd be good.
: Well, what's the worst part about you?
: I should. I never thought people would like it that much.
: Well, most people would, but they can't be. So, that's like some superhero type shit. You know, we wouldn't want to be Spiderman. I'd rather just sleep tight in Gotham City and hope he's out there doing his job.
: It's very hard to turn it off.
: Yeah. What's the hardest part?
: It might sound great if it's turned on, but what if it doesn't turn off?
: Now, I showed you the isolation tank, and you've never experienced that before.
: I think that could help you turn it off a little bit just for the night.
: Yeah. Just give you a little bit of sleep, a little bit of perspective. It's magnesium that you get from the water as well that makes you sleep easier because the water has Epsom salts in it. But may be some sort of strategy for sacrificing your — or not sacrificing but enhancing your biological recovery time by figuring out a way whether it's through meditation or some other ways to shut off that thing at night. Like you must have like a constant stream of ideas that's running through your head all the time. You're getting text messages from chicks.
: No. I'm getting text messages from a friend saying, "What the hell are you doing smoking weed?".
: Is that bad for you? It's legal.
: I mean-
: It's government approved.
: It's not — You know, I'm not a regular smoker of weed.
: How often do you smoke it?
: Almost never. I mean, it's-
: How does it feel?
: I don't actually notice any effect.
: Well, there you go. There was a time where I think it was Ramadan for someone gave some Buddhist monk a bunch of acid.
: And he ate it, and it had no effect on him.
: I doubt that.
: I would say that too, but I've never meditated to the level that some of these people have where they're constantly meditating all day. They don't have any material possessions. And all of their energy is spent trying to achieve a certain mindset. I would like to cynically deny that. I'd like to cynically say, "Hey, just fuck and think the same way I do." They're just hanging out with flip flops on and make weird noises, but maybe no.
: You know, I know a lot of people like weed, and that's fine, but I don't find that it is very good for productivity.
: For you.
: Not for me.
: Yeah. I mean, I would imagine that for someone like you, it's not. For someone like you, it would be more like a cup of coffee, right. You want to have a latte.
: Yeah. It's more like the opposite of a cup of coffee.
: What is that?
: It's like a cup of coffee in reverse.
: Weed is?
: No, I'm saying you would like more. More like will be beneficial to you. It would be like coffee.
: I like to get things done. I like to be useful. That is one of the hardest things to do is to be useful.
: When you say you like to get things done-
: … like, in terms of like what-
: I should get things done.
: … gives you satisfaction? When you complete a project, when something that you invent comes to fruition, and you see people enjoying it, that feeling.
: Yes, doing something useful for other people that I like doing.
: That's interesting for other people.
: So, that, do you think that that is maybe the way you recognize that you have this unusual position in the culture where you can uniquely influence certain things because of this? I mean, you essentially have a gift, right.
: I mean, you would think it was a curse, but I'm sure it's been fueled by many, many years of discipline and learning. But you, essentially, have a gift and that you have this radical sort of creativity engine when it comes to innovation and technology. It's like you're just you're going at very high RPMs.
: All the time. That doesn't stop.
: What is that like?
: I don't know what would happen if I got into a sensory deprivation tank.
: Let's try it.
: It sounds a little concerning.
: But why?
: It's like running the engine with no resistance. That is-
: Is that what it is though? Maybe it's not.
: Maybe it's fine. I don't know.
: How much-
: I'll try it. I'll try it.
: Have you ever-
: It's fine.
: … experimented with meditation or anything?
: What do you do, or what have you done rather?
: I mean, just sort of sit there, and be quiet, and then repeat some mantra, which acts as a focal point. It does still the mind. It does still the mind, but I don't find myself drawn to it frequently.
: Do you think that perhaps productivity is maybe more attractive to you than enlightenment or even the concept of whatever enlightenment means. Like, what are you trying to achieve when you're meditating all the time? With you, it seems like almost like there's a franticness to your creativity that comes out of this burning furnace. And in order for you to like calm that thing down, you might have to throw too much water on it.
: It's like a never-ending explosion.
: Like what is it like? Try to explain it to a dumb person like me. What's going on?
: Never-ending explosion.
: It's just constant ideas just bouncing around.
: So, when everybody leaves, it's just Elon sitting at home brushing his teeth, just bunch ideas bouncing around your head.
: Yeah, all the time.
: When did you realize that that's not the case with most people?
: I think, when I was, I don't know, five or six or something. I thought I was insane.
: Why did you think you were insane?
: Because it is clear that other people do not. Their mind wasn't exploding with ideas all the time.
: So, they weren't expressing it. They weren't talking about it all day. And you realized by the time you were five or six like, "Oh, they're probably not even getting this thing that I'm getting."
: No. It was just strange. It was like, "Hmm, kind of strange." That was my conclusion, kind of strange.
: But did you feel diminished by it in any way? Like knowing that this is a weird thing that you really probably couldn't commiserate with other people, they wouldn't understand you.
: I hope they wouldn't find out because they might like put me away or something.
: You thought that?
: For a second, yes.
: When you were little?
: Yeah. They put people away. What if they put me away?
: Like when you were little, you thought this?
: Wow. Well, you thought, "This is so radically different than the people that are around me if they find out I got this stream coming in."
: But, you know, I was only like five or six probably.
: Do you think this is like — I mean, there's outliers biologically. You mean, there's people that are 7 foot 9, there's people that have giant hands, there's people that have eyes that are 20/15 vision. There's always the outliers. Do you feel like you like caught this, like you have got some — you're like on some weird innovation creativity sort of wave that's very unusual? Like you tapped into — I mean, just think of the various things you may have accomplished in a very short amount of time, and you're constantly doing this. That's a weird — You're a weird person, right.
: Right, I agree.
: Yeah. Like what if there's a million Elon Musks?
: Well, that would be very, very weird.
: Yeah, it would be pretty weird. I agree.
: Real weird.
: What if there were a million Joe Rogans?
: There probably is. There's probably two million. I mean, I think that's the case with a lot of folks.
: Yeah. I mean, but, like, you know, my goal is like try to do useful things, try to maximize the probability for the future's good, make the future exciting, something you look forward to, you know. You know, with Tesla, I want to try to make things that people love. Like, how do you think you could buy that you really love, that really give you joy? So rare, so rare. I wish there were more things. That's what we try to do. Just make things that somebody loves.
: When you-
: That's so difficult.
: When you think about things that someone loves, like, do you specifically think about like what things would improve people's experience, like what would change the way people interface with life that would make them more relaxed or more happy? You really think, like, when you're thinking about things like that, is that like one of your considerations? Like what could I do that would help people-
: … that maybe they wouldn't be able to figure out?
: Yeah. Like what are the set of things that can be done to make the future better? Like, you know, like so, I think, a future where we are a space-faring civilization and out there among the stars. This is very exciting. This makes me look forward to a future. This makes me want that future. You know, the things, there need to be things that make you look forward to waking up in the morning.
: You wake up in the morning, you look forward to the day, you look forward to the future. And a future where we are a space-faring civilization and out there among the stars, I think, that's very exciting. That is a thing we want; whereas, if we knew we would not be a space-faring civilization but forever confined to Earth, this would not be a good future. That would be very sad, I think.
: It would be so sad in terms-
: Like I don't want a sad future.
: … just the finite lifespan of the Earth itself-
: … and the solar system itself. But even though it's possibly — You know, I mean, how long do they feel like the sun and the solar system is going to exist? How many hundreds of millions of years?
: Well, it's probably, if you're saying when does the sun boil the oceans-
: About 500 million years.
: So, is it sad that we never leave because in 500 million years, that happens? Is that what you're saying?
: No. I just think like if there are two futures, and one future us we're out there among the stars, and the things we read about and see in science fiction movies, the good ones are true, and we have these starships, and we're going see what other planets are like, and we're a multi-planet species, and the scope and scale of consciousness is expanded across many civilizations, and many planets, and many star systems, this is a great future. This is a wonderful thing to me. And that's what we should strive for.
: But that's biological travel. That's cells traveling physically to another location.
: Do you think that's definitely where we're going?
: Yeah, I don't think so either. I used to think so. And, now, I'm thinking more likely less than ever. Like almost every day less likely.
: We can definitely go to the moon and Mars.
: Yeah. Do you think we will colonize?
: I think we will go to the asteroid belt. And we can go to the moons of Jupiter, Saturn, even get to Pluto.
: That'd be the craziest place ever if we colonize Mars, and reform it, and turn it into like a big Jamaica. Just oceans and-
: I think, we should. I think that would be great.
: I mean, imagine that there is-
: That would be great. Amazing.
: It's possible, right?
: We can turn the whole thing into Cancún.
: I mean, over time.
: It wouldn't be easy but yes.
: You could just warm — You could warm it up.
: Yeah, you can warm it up. You could add air. You get some water there. I mean, over time, hundreds of millions of years or whatever it takes.
: We'll be a multi-planet species.
: Yeah, that would be amazing.
: We're a multi-planet species.
: If we could-
: That's what we want to be-
: … legitimately like air-condition-
: … Saturn.
: I'm pro-human.
: Me too. Yeah, me too.
: I love humanity. I think it's great.
: We're glad as a robot that you love humans because we love you too, and we don't want you to kill us and eat us. And-
: I mean, you know, strangely, I think a lot of people don't like humanity and see it as a blight, but I do not.
: Well, I think one of those — I think, part of that is just they've been — you know, they've been struggling. When people struggle, they associate their struggle with other people. They never internalize their problems. They look to other people as holding them back, and people suck, and fuck people, and it's just — You know, it's a never ending cycle. But not always. Again, most people are really good. Most people, the vast majority.
: This may sound corny.
: It does sound corny.
: But love is the answer.
: It is you answer.
: Yeah, it is. It sounds corny because we're all scared. You know, we're all scared of trying to love people, being rejected, or someone taking advantage of you because you're trying to be loving.
: What if we all could just relax and love each other?
: It wouldn't hurt to have more love in the world.
: It definitely wouldn't hurt.
: It would be great.
: Yeah, we should do that.
: Yeah, I agree, man.
: Like really.
: How are you going to fix that? Do you have a love machine you're working on?
: No, but probably spend more time with your friends and less time on social media.
: Now, deleting social media from your applications, from your phones, will that give you a 10% boost to happiness? What do you think the percentage is?
: I think probably something like that, yeah.
: Yeah, a good 10%.
: Yeah, I mean, the only thing I've kept is Twitter because I kind of like meet some means of getting a message out, you know.
: Well, that's about it. So far so good.
: Well, what's interesting with you, you actually occasionally engage with people on Twitter.
: Yeah, that's-
: What percentage of that is a good idea?
: Good question.
: Probably 10%, right? It's hard.
: It's mostly — I think, it's on balance, more good than bad, but there's definitely some bad. So-.
: Do you ever-
: Hopefully, the good outweighs the bad.
: Do you ever think about how odd it is, the weird feeling that you get when someone says something shitty to you on Twitter, and you read it? That weird feeling. This weird little negative jolt. It's like a subjective negative jolt of energy that you don't really need to absorb, but you do anyway. Like, "I want to fuck this guy. Fuck him."
: I mean, there's a lot of negativity on Twitter.
: It is, but it's a weird in it's form. Like the way, if you ingest it as if you're like — you try to be like a little scientist as you're ingesting it, you're like, "How weird is this?" And I'm even getting upset at some strange person saying something mean to me. It's not even accurate.
: I mean, the vast number of negative comments, for the vast majority, I just ignore them, the vast majority.
: Every now and again, you have draw in, something not good.
: It's not good.
: You make mistakes.
: Yes, you can make mistakes.
: We can make some mistakes.
: We're all human. We can make mistakes. Yeah, it's hard. And people love it when you say something, and you take it back, and they're like, "Fuck you. We saved it forever. I'll fucking screenshot that shit, bitch. You had that thought. You had that thought." I'm like, "Well, I deleted it." "Not good enough. You had the thought. I'm better than you. I never had that thought. You had that thought, you piece of shit. Look, I saved it. I put it on my blog. Bad thought."
: Yeah. I'm not sure why people think that anyone would think that deleting a tweet makes them go away. It's like, "Hello, been on the internet for a while."
: Yeah. Well it's even like-
: Anything is forever.
: And the thing is they don't want you to be able to delete it because the problem is if you don't delete it, and you don't believe it anymore, it's really hard to say, "Hey, that thing above, I don't really believe that anymore. I changed the way I view things."
: Because people would go, "Well, fuck you. I have that over there. I'm going to just take that. I'm not going to pay attention to that shit you wrote underneath it."
: It's on your permanent record.
: Yeah. It's forever like a tattoo.
: Like high school, "We'll put this on your permanent record."
: Yeah. It's like a tattoo. You keep it.
: Yeah. Well, it's this thing where there's a lack of compassion. It's a lack of compassion issue. People are just like intentionally shitty to each other all the time online, and trying to catch-
: They're more trying to catch people doing something that's arrestable, like a cop trying to, like, get, you know, arrests on his record. It's like they're trying to catch you for something, more than they're logically looking at it thinking it's a bad thing that you've done, or that it's an idea they don't agree with so much, they needed to insult you. They're trying to catch you.
: Yeah, yeah. I mean, it's way easier to be mean on social media than it is to be mean in person.
: Way easier.
: It's weird. It's not a normal way of human interacting. It's cheating.
: You're not supposed to be able to interact so easily when the people are not looking at.
: You would never do that. Don't be so mean when somebody looking in their eyes. If you did, you'd feel like shit.
: Most people.
: Yeah, unless you're a sociopath, you'd feel terrible.
: Elon Musk, this has been a pleasure.
: Yeah, likewise.
: It really has been.
: It's been an honor. Thank you for having me.
: Thanks for doing this because I know you don't do a lot of long form stuff like this. I hope I didn't weird you out, and I hope you don't get mad that you smoked weed.
: I mean-
: It's not bad. It's legal. We're in California. This is just as legal as this whiskey we've been drinking.
: This is all good, right?
: Cheers. Thank you. Is there any message you would like to put out other than love is the answer, because I think you really nailed it with that.
: No. I think, you know, I think people should be nicer to each other, and give more credit to others, and don't assume that they're mean until you know they're actually mean. You know, just, it's easy to demonize people. You're usually wrong about it. People are nicer than you think. Give people more credit.
: I couldn't agree more. And I want to thank you not just for all the crazy innovations you've come up with and your constant flow of ideas but that you choose to spread that idea, which is very vulnerable, but it's very honest, and it resonates with me.
: It's true.
: And I believe it.
: It's true.
: I believe it's true too. So, thank you.
: You're welcome.
: All you assholes out there, be nice. Be nice, bitch. All right. Thank you, everybody. Thank you, Elon.
: All right, thank you.
: Good night, everybody.
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: Most marketers spend hours upon hours each day trying to come up with all their social media content. It's a never-ending, adrenaline-filled moment of trying to look for content pieces that your audiences will love. Been there. Done that. Every day can be a struggle to push through. But I have a solution. I'm going to show you how to repurpose one single piece of content into ten different content pieces.
: Life is about to get easier right now. And if you want to learn more I can show you how I create 60 days of content in just under eight hours. With my ten social media content types and formulas I could create video content, images, text-based post that pulls my audience in and gets them to engage on Facebook, Instagram and YouTube.
: If you want to learn how to implement this in your own business, register for my free masterclass: How to Create 60 Days of Social Media and Video Content in 8 Hours. Just click on the link below. Now, let's get started on those ten fresh pieces of repurposed, social media content.
Number 1: Create an infographic
: Number one: create an infographic. Pick your best tweets and use Canva to design them into an infographic. Canva is my favorite graphic design software and it's completely free and I have a tutorial that shows you exactly how to use it. You can click the link below. I have that linked in the description if you want to learn how to use Canva.
Number 2: Livestream
: Number two: livestream. People want to see you implement what it is that you say you do. So, take it to a whole new level by livestreaming. After broadcasting, there's even an opportunity you can embed the video recording that you just did on your site.
Number 3: Share a question
: Number three: share a question. You can either ask the question to get the gears turning for your audience or you can share an answer to a related question.
Number 4: Create a blog post
: Number four: create a blog post. Harvest your content and expand on it. Talk more about what your followers want to know in a long, form written format.
Number 5: Create a webinar
: Number five: webinar. Use your other repurposed content from any social media platform and host a specific webinar on that content. Create a slideshow out of this webinar that you can also share as well.
Number 6: Quote images
: Number six: quote images. Capture important quotes and post them as images. Take advantage of key hashtags and relay them. You can easily create this through Canva.
Number 7: Create images for Pinterest and Facebook
: Number seven: create images for Pinterest and Facebook. This content can be a bulleted list that has shareable content which features important notes and phrases on your topic of content.
Number 8: Create an email autoresponder series
: Number eight: email autoresponder series. Create an email series based on the topic that you can send to your audience. Maybe people on your email list want to learn more in-depth on a topic and you can ask them to sign up for a three-part series where you can teach them more in depth.
Number 9: Create bonus material
: Number nine: create bonus material. Use your content as an entry way to develop an opt-in that can be downloaded by your users. Create checklists, calendars and anything workable and digital.
Number 10: Create an e-book
: Number ten: e-books. Consolidate all the content you've generated into one e-book that captures the one singular important theme.
Establish yourself as an authority in your niche
: Congratulations. You've transformed one single piece of content into ten possible content pieces. And this is so important to keep showing up for your audience being consistent and providing value so that your audience can know, like and trust you which only grows your following and helps you to generate sales ten times easier. Each repurpose brings you closer to your goals and establishes you as an authority in your niche.
: Thanks for watching. If you like this video, hit the thumbs-up, comment below and, of course, subscribe for more weekly videos.
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To listen and watch the transcript playback in real-time 👀, just click the player below.
: Welcome to the Farnam Street podcast called The Knowledge Project. I'm your host Shane Parrish, the curator behind the Farnam Street blog, which is an online community focused on mastering the best of what other people have already figured out. The Knowledge Project is where we talk with interesting people to uncover the frameworks you can use to learn more in less time, make better decisions and live a happier and more meaningful life. On this episode I have Patrick Collison, the co-founder of Stripe, which he started with his younger brother, John, in 2011. While Stripe started as a company to make online payments easier, it's morphed into an internet infrastructure company. Patrick is one of the most well-read and thoughtful people I've ever met. After listening to this conversation, you'll realize his success is less about luck and more about thought. I'm pleased to have Patrick Collison on the show.
: Before I get started, here's a quick word from our sponsor.
: This episode is brought to you by Inktel. Every business needs great customer service in order to stand out and gain a competitive advantage. Yet, many businesses struggle with how to provide their customers with world class customer service. Inktel Contact Center Solutions is a turnkey solution for all of your customer care needs. Inktel trains their customer service reps to know your business almost as well as you do and help you build your brand. Managing a call center can be a complicated, expensive and time-consuming task, and you still may not be able to do it well. So, do what many leading companies do and outsource your customer service needs to a partner who specializes in taking care of your contact center needs. Inktel can provide your company with every touch point, including telephone, email, chat and social media. As a listener of this podcast you can get up to $10,000.00 off if you go to Inktel.com/Shane. That's I-N-K-T-E-L.com/Shane.
: Patrick, I'm so happy to get to talk to you.
: Thanks so much for having me.
: You have the unique background of having dropped out of high school and dropped out of university. Can you explain what went through your mind dropping out of high school?
: Well I didn't, technically speaking, drop out although I sort of, practically speaking, did. But, you know, given my lack of education credentials elsewhere I should, for the sake of my parents, insist that I did, in fact, formally speaking, graduate from high school. But, I guess what happened is that I'd become very interested in programming and I, sort of, wanted to spend as much time on it as possible and Ireland, actually, has this, kind of, interesting thing called Transition Year, this year between the, sort of, two major exams of, kind of, high school, or at least Ireland's high school equivalent, and in Transition Year, it's, sort of, a formally designated year, that's optional, where you can go and pursue things that you might not otherwise, you know, naturally tend to pursue and the school tends to be, kind of, much more permissive of going and spending three months abroad or going and doing some work experience in this area or, you know, whatever the case might be. And so, in that year I basically decided to spend as much of it as possible programming and so, you know, I did that and then I returned to school for, kind of, the, you know, latter half of, again, Ireland's, kind of, high school system and it felt so much slower and less fun and so, I tried to see if – well, as part of the programming, I had visited the U.S. for the first time. I had gone to Stanford for the 2005 International Lisp Conference and there – it was a fairly small conference, and, it was very eye opening for me and I remember, you know, walking around Stanford and thinking man, American colleges seem great. And so, you know, back in high school in Ireland, I decided to see if there was some way that I could just go to college in the U.S. the subsequent year and, it's, sort of, a long story but I eventually figured out that I could not do it if I followed the standard Irish education path, but that I could do it if I did the British, sort of, terminal examination. And so, I, kind of, resumed my, sort of, self-education, except, instead of programming, I was now studying for these, you know, British exams and I did that for the subsequent year and ended up starting at MIT the next fall.
: And, how do we get from MIT to where we are today, which is Stripe's offices in San Francisco?
: Well, it's, sort of, a long and torturous story and I'll spare you most of the less interesting details. I guess, the overarching thing is while people in the U.S. have, sort of, grown up in an environment of which college attendance is, sort of, really prioritized from an early age and, sort of, you know, you're optimizing your extra-curricular activities from the time you're 14 and you're choosing your kindergarten on the basis of a thought that it's a downstream college acceptance rates look like and all that, kind of, stuff. Of course, growing up in Ireland that, sort of, wasn't part of the, you know, culture or discourse or environment at all. And so, by the time I got to MIT, and then just to college in general, it didn't feel like that big a deal, it didn't feel like, sort of, this was the terminal state that I'd, sort of, spend my entire, kind of, childhood and adolescence that I'm trying to pursue. And so, as a, kind of, other things and other ideas and opportunities, sort of, you know, crossed the transom, I think I was maybe more open to them than my peers, not because, I think, any differences in me, but just because of differences in the culture and environment that I come from. And so, my brother, John, and I – John, at this point, being a little bit younger, he was now in this transition year in Ireland, we decided to start a company six months after I got to MIT. And so, I'd really just started and I felt that I had some, kind of, time to spare because I'd started college a year younger than, you know, most of my peers, and that company, sort of, worked out ok and, you know, it's, kind of, a long story but it ended up becoming a small acquisition.
: I went back to MIT because when I had started there I'd, sort of, been very interested in math and physics and had, kind of, been interested in this idea of, you know, potentially becoming, or, at least, attempting to become some, kind of, academic and, of course, at a place like MIT, that's, sort of, the default around you, you know, everyone is planning on, again, trying to get a Ph.D. or to become a professor or whatever and so, I think, you know, that that environment had some effect on me. And so, I went back and because I felt that I hadn't, sort of, really, you know, properly rejected the hypothesis that maybe I shouldn't try to become a professor, right? Maybe, kind of, physics is what I should be, again, at least attempting to spend my career on.
: And, after a year back at MIT, I decided that that was not the case. Progress in physics really felt like it had, sort of, slowed down pretty substantially compared to the, you know, 1910s, 20s, 30s, the, sort of, the period in which so much of what we were learning about that, sort of, broader period of discovery. It felt like the period in which, sort of, you know, we existed in say, 2010, was that there really was just not the same rate of progress. And so, there's a little bit of that and then also some amount of, sort of, appreciation, myself, that I think I just enjoyed programming and software and technology more than I did math and physics, even though, to some degree is a little bit, maybe, painful to realize that.
: I want to explore a little more about the cultural differences between Ireland and the U.S. and how that impacts you as the CEO of Stripe.
: I think there's maybe a couple of things in that Ireland is very outward looking, necessarily so, in that, sort of, Ireland's, sort of, improbable rise from poverty over the latter half of the 20th century was very significantly enabled, maybe almost wholly enabled by exports, by, sort of, importing American multinational companies, having them set up factories and bases and, you know, hubs of different sorts in Ireland. One of the world's first special economic zones was created in Shannon, which was very close to, maybe 10, 15 miles from where I was born. Deng Xiaoping visited us and found us quite inspiring and so decided to set up special economic zones in China and so Shenzhen and the, sort of, the Pearl River Delta, that, sort of, special economic zone was in some ways directly inspired by, you know, what he saw in Western Ireland and, so I think the fact that, sort of, there's such a very visceral link between, kind of, betterment and progress and economic development and this, kind of, outward looking sense that the possibilities of the rest of the world are, sort of, much greater than, kind of, those internally. You know, that – that's very pervasive in Ireland. And, I think that's certainly influenced Stripe in the sense that, you know, we really are all trying to emphasize the, sort of, the imperative for and the potential of globalization. And, while maybe in the mid-90s that was, sort of, something that was uniformly accepted and, sort of, at least elite circles. Now, see that's something that perhaps is being questioned somewhat more but, I guess, the Irish experience is very much one of seeing it as an almost wholly unalloyed good. And, again, I think that's greatly influenced us here. Certainly me.
: Well, it's interesting, too, from a cultural standpoint where Ireland has had very high rates of immigration, particularly post the expansion of the EU in 2004. A very large number of Eastern European immigrants moved to Ireland when those countries acceded to the EU and, that was really not accompanied by any material, social strife or conflict or a lot of the, sort of, challenges that we've seen in, sort of, other parts of the world, and, so again, I think that, sort of, an appreciation for borders that are more open or more openness to immigrants. More, sort of, facilitation of opportunity, things like that, again, I think that really is the Irish experience. And, of course, there's the reverse version where so many Irish people themselves have, sort of, benefited enormously from being able to go and, sort of, kind of, pursue lives in the UK and Australia and the U.S. and Canada and so on. And, that's again, just really a, kind of, part of the national ethos and then maybe more softly, I guess, Irish culture places a lot of importance on just a, kind of, warmth and the, kind of, a particular tenor to a, sort of, interpersonal dynamics and trying to have other people enjoy themselves and be at ease and have a good conversation with them and whatever else. And, I think, maybe that's something that's influenced us somewhat at Stripe, where we want Stripe to be a warm place. I mean, we play music at reception and in the kitchen to just try to put people at ease and to create enough, sort of, soft noise around them where they feel comfortable having just a good conversation and, you know, maybe that's because of entirely unrelated reasons or maybe, again, in some way, we were influenced by the, kind of, environment we grew up in in Ireland.
: How would you describe the culture at Stripe? What do you actively try to achieve with that?
: Well, I'll tell you that with a caveat and the caveat is that I'm pretty sure the answer I would have given to this would have differed in some material ways two or three years ago, right? And, that's in part, because I think we're coming to realize things that we just hadn't really appreciated or, sort of, seen the significance of two or three years ago. And, also in part, because literally what it is that we need today is just different to what we needed two or three years ago, right? And, so, I think there's a double contingency in the answer where it's a function of just what we realize at this point but, also, sort of, what it is that the organization – the company needs and the, sort of, challenges that we currently face. With that caveat, I think the things that we really prize and try to, you know, seek in the people we hire are a, kind of, rigor and clarity of thought, in that, I think so many organizations prize, sort of, smoothness as, sort of, interactions and trying to reduce – minimize the number of, sort of, ruffled feathers and that they, kind of, at least, sort of, inadvertently, if not deliberately, prefer cohesion over correctness and we really try to identify people who – who are seeking correctness and who don't mind being wrong and who are willing to at least contemplate things that seem improbable or surprising if true or really divergent as to what is, sort of, the generally accepted status quo. And that's hard to fight and I don't think most of the, sort of, educational institutions that we all tend to have attended, actually, do a great job of teaching that. And so, we look for that, kind of, combination of, sort of, openness and rigor. I don't exactly know what the right word is but a, kind of, determination and competitiveness and, I guess, willfulness in that just doing anything of significance is hard. I mean, anyone who's tried to do anything that they, themselves, consider significant knows that very viscerally, right? And, I mean, especially for a startup like, the default outcome is you're relatively near-term non-existence like the default outcome is that you do not survive to – to survive over the medium or, you know, even more difficulty over the long term. And that is like an unnatural act, right? And so, you need to find people who, not just are willing to, sort of, push against the, sort of, the expected trajectory of non-existence, but people who actually enjoy that, who want that, right; because if they're merely willing to do it but they don't actually enjoy it, then, you know, the work is probably going to be less fulfilling for them over the medium term.
: And, I really don't think that is for everyone. I don't think that's a bad thing right; in that the cliche, of course, is that startups are extraordinarily hard and they just are and, you want somebody who's at a stage in their life where that's the, kind of, challenge that they want, where the fact that the particular area in which they're gonna be working is, sort of, undefined or significantly under built out or significantly broken or whatever the case might be, but that's what they're looking for, right? And then, we try to find people who just have a, kind of, again to return to this word, interpersonal warmth and a desire to make others around them better and just a degree of caring for others and a desire to be nice is a, kind of, anodyne word, but to be nice to them and to make them better off, right? We really try to find people who you just actively enjoy spending time with, right? You spend such a large fraction of your life inside the walls and under the roof of, you know, whatever organization, institution you're working at, and so, given that, I really think it's worth prioritizing this and I think, I mean, of course, don't know for sure, but I think we go to, sort of, some greater lengths to find these people than other organizations tend to do. And, there's other things as well. I mean, you know, it almost goes without saying but we really care a great deal about ethics and integrity in people. But, you know, I think so too do a lot of other organizations. I think the three that, kind of, really stand out to me are this, kind of, rigor and clarity of thought; this, sort of, hunger, appetite, willfulness, determination. And this, again, warmth and desire to make people around them better off. Those are three that really stand out to me.
: Take me back to the early days of Stripe and the struggles you were having and maybe walk me through some of the things that you've learned since then or some of the mistakes that you had made.
: Sure. I mean the, kind of, background context here is that by almost every, sort of, under almost every, kind of, ostensibly sane analysis, Stripe looked like a bad idea, right? This was a crowded market. There were tons of existing incumbents, there were significant regulatory and just, kind of, partnership institutional barriers to entry. We had no experience in the domain. We were very young. We weren't even U.S. citizens in an ecosystem that, again, just because the regulatory dynamics, you know, that, sort of, adds further complication. We had no, sort of, obvious mechanism for gaining, sort of, significant distribution. And we were not a, sort of, naturally viral product or, you know, we had, sort of, organic adoption the way, maybe, a social network or a consumer product might have. And for all those reasons, I think a lot of people, sort of, very reasonably, thought that, you know, Stripe was a bad idea or us pursuing Stripe was a bad idea. And they certainly didn't hesitate to tell us that and, you know, I think, to be clear, I think they were doing something reasonable by telling us that. I mean, they were giving us their, sort of, honest, and, again, you know, reasonably justified assessment. And so, it all started in the background context of that. I think the thing that primarily gave us the confidence to actually attempt it was it just seemed so strange that something with Stripe's character didn't exist, in that, we really looked for a Stripe before we – before we started it. It felt that it must be the case that there is some service, some company somewhere offering infrastructure and APIs and payments and economic tools that are straightforward to use for a developer, right? I mean, this is one of the, sort of, top needs that any business operating on the Internet has arguably by definition or, sort of, a business on the Internet must have access to these tools.
: There are tens of millions of developers operating on the Internet and so just given the magnitude of that market and the, sort of, obviousness of the business model, it really felt like this had to exist. And so, we, kind of, forlornly Google for it, you know, with a different set of permutations of keywords and then, sort of, after a couple of months became, you know, somewhat resigned to the fact that, no, it did not, in fact, you know, probably exist and its non-existence was so, kind of, strange to us that it actually, initially, kind of, discouraged us where it was, sort of, such an obvious idea and such a surprising, you know, absence of a, kind of, solution, maybe there's some, kind of, latent force that we're not seeing that actually makes, sort of, solving it impossible, right, in that, you know, for example, we were also interested the same time in why, kind of, consumer banks were so bad in that just, you know, they weren't really keeping abreast of technology and the fees were really high and they were getting fined by the CFTB and, you know, et cetera, et cetera, et cetera, and as we looked into it, it became apparent that actually there was a good reason as to why the problem had not been solved where (a) the banks were subject to, sort of, such onerous regulation where it's very difficult for them to do anything themselves, right, and so, for example, the difference between a checking account and a savings account which might seem, sort of, quite unfriendly from a consumer's standpoint that's actually, kind of, essentially mandated by law. And so, it's not, on some level, the banks' fault. And the second reason is the office of the controller of the currency, which is the entity that, sort of, issues federal banking charters had basically stopped issuing new banking charters post the financial crisis and so if you came along and you're like well I'm going to go solve all these problems in consumer banking, you are essentially blocked from doing so by the, kind of, regulatory apparatus. And so, we wondered in this, kind of, similar vein is there some force like that. Not necessarily regulatory, but just like there are some constraint that, kind of, we aren't observing or weren't.
: And, after maybe a couple months of investigation we decided that no, there didn't appear to be, at least, of course, you can never, kind of, definitely reject it, but we really couldn't find one. And so, we decided to build a prototype and the prototype was built, sort of, on top of and with, sort of, existing payment systems and so, it didn't do anything, kind of, overly ambitious, it was almost like a, sort of, concept rendering of what a solution could look like rather than, sort of, a solution itself, but it was sufficient to get just a couple of our friends started using it and I think the particular thing we realized that caused us to, you know, really go take it a little bit more seriously and I mean concretely to drop out of college was the realization that the, sort of, problems that we perceived and, kind of, developers like us, people building some little side project or with this, kind of, very nascent, you know, startup or something like that, that the problems we perceived for that, kind of, at that segment of the market were actually the problems that larger companies had as well that, kind of, what we thought initially might be a little lake of opportunity was, sort of, more akin to an ocean, and when we talked to companies having hundreds of millions or billions in revenue or companies in other countries and so on and we just asked them to kind of, recount their problems and what they wished existed and everything else, they basically, give us the same roster of features. And, when we thought about it and just like looked at the, kind of, macro figures, we saw that, you know, about at the time two percent of all consumer spending in the world happened on the Internet. And, so even though we were, kind of, you know, 20 years into, sort of, the Web's evolution and even though, you know, we'd all engaged in lots of e-commerce and so on when you looked at it on a macro basis, it was apparent that, you know, we were still, kind of, barely off the starting blocks and so I think the combination of those things where, kind of, decided that there didn't appear to be some, sort of, some dark energy preventing a solution and that this set of problems we could see actually seems, sort of, very pervasive rather than just, sort of, a microcosm. And then, thirdly that actually this whole market and environment was still actually at a, sort of, surprisingly nascent stage when you looked into the full picture. Then we decided to drop out.
: You guys went from two employees, you and your brother as co-founders, to 800, 900 now?
: We're about a thousand now.
: A thousand employees. And, what have you learned from scaling the business?
: I think on some level, scaling a business is both relatively straightforward and extremely hard. Relatively straightforward in the sense that it's usually not that difficult to see what the problems are and to the sense that you don't see what the problems are, it's usually because there's some, kind of, subjective blindness, rather than it being actually difficult to see the problem, right? And so, it's more of a simple question of what are you oblivious to because of your own biases rather than what is particularly difficult to observe and, kind of, what are your corrective mechanisms to, sort of, account for that.
: So it's, I think, straightforward in that sense. And, I guess, straightforward in the sense that usually solving the problems is not outlandishly difficult. I mean, it's not easy but you don't hire someone in this role, you need to figure out how to raise this capital; you need to build the system. Whatever the case may be, I mean, none of those are easy things but they're also not, sort of, scientific breakthroughs. There are other companies that have done it. There are generally playbooks that exist and file, sort of, your particular strategy might need some, sort of, correction, refinement and you might hit some walls along the way, it's rarely unprecedented. And, then, I think, it's extremely difficult in the sense that you don't get to really choose the clock cycle, kind of, and the time horizons. It's a category of, sort of, flash games and desktop tower defense games, where you're, sort of, building little towers that shoot missiles and all these little critters, sort of, scampering across the board trying to, sort of, break into your fortress, whatever the case might be, and I started to feel a little bit like that, where you fundamentally don't control the, sort of, rate of, you know, problem appearance and you just control the, sort of, other variable of the rate of which you're building defensive or mitigatory or mechanisms to deal with those problems. And sometimes the rate of the problem creation can outstrip the rate at which you can solve them even though in principal any one of them is relatively manageable, right? And so, I think that really adds a lot of difficulty.
: I think even on this, kind of, very abstract level dealing with the problems is tractable, the character of having problems materialize at every level of the organization or at every, kind of, level of abstraction or, you know, at every, kind of, magnitude and so on, that's just a, kind of, a natural thing that I think is, just on a psychological emotional level, difficult to deal with and so while you might recognize, sort of, on some contemplative stoic level that this is how it goes, you know, that's not necessarily how it feels in the moment, right? And it, kind of, feels like that way every day and some days you almost have to smile at the, sort of, unreasonableness of the swathe of problems and challenges that have, you know, materialized on your desk or in your inbox and that, you know, in the same way that you see the constellations in the stars, you know, the, sort of, constellation of the problems looks so implausible and so unreasonable that, like, someone must secretly be screwing with you, right? And so, there's that, kind of, emotional, sort of, self-management. And then, of course, there's the challenges of dealing with uncertainty where, you know, it's, kind of, I guess – well, you're operating in, sort of, the weird zone where you're often making decisions that have, sort of, significant long-term impact or that are difficult to reverse or to course correct and in the face of great uncertainty, right? And, the uncertainty is often unnecessary in the sense that you could in principal go and significantly reduce the uncertainty. You could go and study the question more, you could go and obtain more information, you could go and run an experiment, you know, it's not like cosmic uncertainty where there is just – it's Truce of Nice and unknowability. And I think when it is, like, true deep unmitigable uncertainty, then I think it's not too hard to say well we're just going to choose something and, you know, make the best decision we can. I think it's a more frustrating, kind of, uncertainty where it's actually not necessary but the thing that, sort of, limited is essentially the cost of obtaining further information, reducing that uncertainty. And so, you're left in the, sort of, dissatisfying situation where I have to make a highly consequential decision. There's a lot of uncertainty. We could have less uncertainty. We could take steps to mitigate that, but we just don't have time to. And making a lot of decisions in that zone is somewhat dissatisfying, right? And, I think, kind of, correctly so in that, you know, when it's correctly reacting to the fact that it could be otherwise, right?
: And then lastly, maybe, you're playing this, sort of, multi-armed bandit problem where you're, sort of, constantly trying to balance exploration and exploitation or, sort of, just optimization of that which already exists instead of doing it better and better with trying to figure out what are the things that, you know, we aren't doing or that we don't know or we haven't even considered or, you know, if we were doing would make this other part the organization to be vastly more effective and so on. So, it's very hard to know what the optimal rate of exploring those things is while also basically operating outside the system and operating inside the system or optimizing outside the system and optimizing inside the system. It's very hard to know what the right, kind of, rate of doing those things is. And so, again, I think a lot of the challenge of scaling the organization is, sort of, finding, at each, kind of, moment the right way to balance those things. But, without ever having, kind of, sat down before to try to, sort of, you know, and anybody to come to listen to any unified theory, I think that a lot of the experience of scaling an organization is, kind of, specific versions or specific applications of, sort of, those dynamics and just figuring out how you, yourself, or how the organization, or how your peers and colleagues, sort of, deal with that and what the, kind of, structural mechanisms for doing so are.
: And then maybe very lastly, I mean, those are all, kind of, the structural ones. I think there is just also a personal version where you certainly don't start out being well adapted to or, at least, in my case particularly skilled in organizational management and leadership, and, I mean, depending on the rate of growth of the company you, sort of, need to acquire those skills, again, on a timeline that's largely out of your control and, you know, depending on the rate of growth of the organization, that might be a pretty difficult thing. And so, you know, certainly in my case, I think I've just had to accept my, sort of, managerial inadequacy relative to what either is required in the moment or, sort of, will in the near-term impending future be required and just figure out strategies to try to acquire those skills and abilities as rapidly as possible.
: I wanna go back to the explore/exploit, kind of, comment that you made, which we can probably just relate to focus. How do you think about focusing on one thing and being exceptional at that or doing a variety of things and trying to be exceptional at all of them?
: You mean in the organization or personally?
: Oh, in the organization and maybe personally, if that's different.
: I don't know a better answer other than using course heuristics and then being willing to revisit or make an exception if something seems, sort of, particularly promising right now. Roughly speaking, we invest most of our effort, the precise number, let's just say 70 or 80 percent, in optimizing that which we already have; that which we already know is producing returns; that which there is a, sort of, relatively clear line of sight from, sort of, the input, the work, the optimization, whatever to, sort of, the output improvement. And then, you know, some fraction of the work and the, sort of, a distribution of some fraction the work, let's call it 20 percent, into things that are more speculative, right, and I think that's, kind of, necessarily the case because that, call it again 70 or 80 percent, is devoted towards optimization of that which already exists. If we did not do that, you know, then this, kind of, default non-existence we just discussed would be guaranteed, right? It's very easy to sort of, fly the company into the side of a hill. And so, I think really the question is just do you spend 20 percent of your time on things that are more speculative or do you spend 0 percent and then, maybe secondly, to what degree do you allow those answers to be different, at different levels of the company, and then, sort of, in different places and, kind of, how much of a uniform answer and how much heterogeneity do permit or do you design for. And, I think as we've grown we've tried to shift into a model where it is somewhat less uniform and, in certain teams, less optimization of what already exists is going to be required; it's going to require more exploration and in other parts of the company, to be tilted in the reverse direction. And, I think, that, kind of, recursive decomposition, I think, is really required to avoid the diseconomies of scale that otherwise set in as you grow.
: And you decide which speculative projects you take on, probably based on disrupting your business or these are things that I want to do or I want to strive to do or?
: I don't know that there's a better answer beyond, given all of the axes of, you know, constraints and returns, which ones seem like a good idea, and, I mean, I think, it's, kind of, like investing when you ask, you know, what are the criteria for investing in a company. It's well, when you, kind of, normalize down from these, sort of, you know, really high dimensional space of market and founders and idea and, you know, all these things. You normalize all that down into, kind of, what do you think the return profile looks like. Well, you invest when the return profile looks good enough, right? I think, similarly you decide, you know, which ideas to pursue. Of course, on each axis there are many things you prefer or you don't want or whatever. And, for example, something that requires less effort rather than more or entails less downside risk rather than more or whatever, you know. Those are all good things, but I think, kind of, where it all nets out is well when you take account of all those factors which things just seemed like a good bet, right, and so, just, you know, to give a concrete example, Atlas, the service we launched for helping new founders incorporate companies and, in particular, sort of, without the geographic restrictions that tended to exist before so, it's essentially open to founders anywhere in the world, there was no, kind of, one reason as to why that was a good bet. There was no, kind of, you can't just measure that on any one axis, right, but, kind of, when you look at overall and you see that well, if it doesn't work and it's hard to see how it could cause that much downside for Stripe, it's not going to require an enormous, kind of, fixed cost investment in order to, sort of, learn as to, at least, whether it's initially working. If it did work, it seems like it'd produce, kind of, quite significant returns. The kinds of things we'll have to do for it are actually things that are quite valuable for us in other parts of the business and so on. So, we'll learn interesting new capabilities and skills in the course of doing it, et cetera, et cetera, et cetera. I think the reason there aren't more good bets made in the world is because making good bets is difficult. And, again, I think you're gonna, in different areas …
: Difficult in terms of recognizing them or difficult in terms of acting and executing on them, or what do you mean by difficult?
: I think both. I think most organizations are, sort of, institutionally resistant to bets in that because most people are necessarily optimizing things that already exist. And, again, that's correct without making a mistake. I mean, things that are not optimized along the way, especially things that are not being, kind of, fixed and optimized and patched up and corrected as they emerge, I mean, those are going to break, right, and so, the optimization is critically important. I don't mean to, sort of, sound remotely, kind of, dismissive towards it, but banks are a very different character, right? And, you know, sort of, a continuum of betfulness and riskiness …
: Is best.
: Yes, exactly right, and, large institutions and incumbent organizations, sort of, dislike them right, structurally speaking, and find them difficult to understand and difficult to interact with and so on, and I think there's a whole host of reasons there in that, you know, people in startups are, sort of, less worried about the risk of failure; whereas, people instead of existing systems must worry quite a bit about the risk of failure. You know, newer things tend to operate on, sort of, faster, sort of, on clock cycles and so, you know, Dijkstra talked about the idea of the Buxton Index and the, sort of, time horizon upon which an organization makes its decisions and so maybe a university make its decision, you know, its decisions with a decade long time horizon; whereas, maybe a company makes decisions on a quarterly time horizon and maybe a, you know, an individual make decisions on a weekly or monthly time horizon, whatever. And, anyway, so I made the observation was that organizations with very different Buxton indices find it difficult to work together. And if an organization with a really long-time horizon is working with one that, sort of, rapidly updating and, sort of, rethinking, it's just like a fundamental, kind of, a hedon's mismatch. And so, I think that, you know, to your question are, sort of, why it's hard and why there aren't more good ones in the world. I think there are lots of different kinds hedon's mismatch like that. It's not just the time horizon thing, but I think there's just like a fundamental deep intrinsic difference between, sort of, of existing incumbent systems and the actions of the minds that require to optimize them, and, this, sort of, the exploration of figuring out that which is totally orthogonal different and you.
: How do you keep that mentality, I mean, when Stripe started, the cost of failure was really low. Now, you have a thousand employees; they all have families; you have a business; you have people who have invested a lot of money in the business. How do you maintain that ability to place massive bets?
: It's really a question of how do we make sure that we can place bets that don't have excessive downside or are, sort of, fatal downside, right? Or a cumulatively fatal downside across, maybe a whole portfolio bet, and I think that actually the impediments to placing good – well, again, I will caveat all this by saying it's not like Stripe has a long track record of, sort of, making really good, you know, investment bet decisions. You know, I am, we are, far from being the Apples or the Berkshires or whoever, you know, multidecadal, sort of, track record of …
: We'll be back here in a decade. We'll re-evaluate.
: If we are here in three decades which, you know, as established would not be the default outcome, and we have a great portfolio of successful such decisions then perhaps we can opine, you know, with some modicum of confidence and, but it feels to me and we'll see if it's right or not, it feels to me that actually the reason that organizations don't tend to make more of these or make more good ones is it's more sociological, more institutional and less that it's fundamentally too costly because in most cases, the downside cost is not that large and either in terms of, like, just direct financial cost or in terms of these, sort of, broader damage to the organization in whatever form that might take. It's much more the mindset of improving that which already exists is just quite different to the mindset of screw the old system and let's do something that's fundamentally new from scratch. And so, I think the challenge is in significant part, how do you reconcile these two mindsets. How do you have the – I mean, Stewart Brand, I talked about pace layering in buildings and different parts of the building have to change at different rates and how do you design for that. And I think that, kind of, analogous question for an organization is how do you do organizational pace layering. How do you have parts of the organization that can try to do something fundamentally different to and hopefully superior to that which already exists. And how do you have people who are basically disagreeing with people trying to do something new, who you think that no, the way we're currently doing it is in fact the right way we're going to do it better and better and because these people fundamentally, structurally disagree with each other and must have significant conviction of their effective approaches, otherwise, they do great work. How do you have those people, at the end of the day, have dinner together and fundamentally feel like they're on the same team.
: How do you do that.
: Come back in 30 years.
: I think I recall one of the interviews that I was watching as prep for this where you talked about one of the first five or six people worked at Bridgewater.
: No, one guy in particular, did and over time, we've hired more people who have, but, yeah, I would not say we were particularly Bridgewater influenced.
: Did you come to this, sort of, notion of thoughtful disagreement. Before that influence. And, if so, how did you …
: Well, it's hard to know exactly where to attribute it and it's probably, kind of, overdetermined and maybe there are just some, sort of, underlying personality traits that we each had, sort of, come to in a different part of our lives in, sort of, somewhat coincidental ways. I mean, for a start to your earlier question, Irish people are always disagreeing and always arguing, and so, again, maybe there's a cultural dimension to it. It's not something that people tend to shy away from.
: Because they see it as an attack on – exactly, right.
: Right. I think that there was just a common shared personality trait in a lot of the people who helped establish the culture of Stripe where they enjoyed some disagreement and tried to find the boundaries of an argument and the places where it's not the case, and what the exceptions might be and just trying to, kind of, get a feel for the topology of that space and, kind of, stumbling in the dark try to construct a map of where different intuitions and heuristics apply and where they don't and so on and I think when you have, kind of, deep minds, at difference in people is often those who enjoy finding the limitations of arguments and beliefs and those who don't. And Tyler Cowen talks about, I think, it's his second law, that there are no knock down arguments and there are no arguments are just uniformly completely true. There are always the limits to it. There's always the other side and I think that's, kind of, very deeply true but I think there's, kind of, just a question of, sort of, an affect, and, again, personality as to do you enjoy finding those limits and the exceptions and thinking about well maybe this is less true than I think or where it's less true than I think. Or is that just like a stressful process. And I think that, sort of, getting that, kind of, rigor and clarity of thought requires, sort of, a joy of discovery, like, this thing I believe, this rule that I thought existed, like it's actually not good in this place and having that be an enjoyable discovery rather than, sort of, something stressful and frightening. I think globalization is a good example there where, you know, as we discussed, I think that globalization is a net overall for the world, a fantastic thing and something that, you know, support is rising for a global basis and has propelled more people out of poverty than almost any other force ever. And yet, there are people like Dani Rodrik and others who are, sort of, prodding at the edges of that and showing well but not in this place or not in this way or Autor and these other folks at MIT, like maybe it has this, sort of, underappreciated downside and I think that's great. I think those are important questions and really interesting work. And I think that, kind of, again the underlying, sort of, sentiment is, sort of, interest in where the heuristics and the intuitions and the rules and the arguments are at.
: I wanna come back to some of that a little bit later. I think one of the questions that people want to hear from you is what would you say is the biggest difference between the Patrick making decisions today and the Patrick making decisions maybe five years ago in terms of how you actually make those decisions?
: There are four big differences. The first is, and I just place more value on decision speed in that if you can make like twice as many decisions at half the, kind of, half the precision, that's actually often better. And then given the fact that, sort of, the rate of improvement of decision making with additional time almost necessarily tends to, kind of, flatten out, I think that most people, certainly the Patrick five years ago and even the Patrick of today included should be, sort of, earlier should be operating earlier in that curve, make more decisions with less confidence, but, in significantly less time, right? And, just recognize that in most cases you can course correct and treat fast decisions as a, kind of, asset and capability in their own right. And it's quite striking to me how some of the organizations that I hold in the highest regard tend to do this. The second thing is not treating all decisions just, kind of, uniformly. I think the most obvious axes to break them down on are degree of reversibility and magnitude and things with low reversibility and, you know, great impact and magnitude, those ones you do want to, you know, really deliberate over and try to get right.
: But, I think it's very easy, sort of, absent care to have this mechanism you put in place for those decisions to seep into decision making for the other categories and really in the other three quadrants you can afford to be, sort of, much more flexible and much more fluid and again really just a part a speed because obviously if it's very reversible then, you know, by definition you can always correct it later and if it's, you know, of low import then who cares, right? So, that's, kind of, the second one just being, kind of, cognizant of that and before making a decision, try to categorize well what, kind of, decision is it. The third thing is I now try to fairly deliberately just make fewer decisions in that why am I making the decision? And, for some kinds of decisions, there are some good reasons for that, and there's some decisions the CEO ought to make and is, kind of, fundamentally on the hook for, but, there are some decisions where if I'm making it or if I have to make it that probably suggests that something else organizationally or institutionally has broken. And I think the need for a decision from anyone not just for me is often like only a, sort of, an epi phenomenon and there's really some other underlying issue that's causing you to have to make it in the first place. And so, thinking like that and concretely doing more to push others to make decisions and, sort of, pushing them back, sort of, to people who ought to be the domain experts and then fourth, when I realize that I would make it a decision differently to have someone else making it, not even really discussing the decision itself but trying to dig into what is the difference in our models such that you want to make decision A and I want to make decision B. And one thing we're currently spending a bunch of time on your Stripe is having different parts of the organization, write down what they're optimizing for, essentially, like what their mission is, what the long-term key metrics are for, kind of, their part of the organization, what – who their customers are either internally or externally. And so, the things of this, kind of, persistent, ongoing underlying nature is such that, you know, hopefully, once there's agreement on those longer-term things, then maybe a difference on any future decision might just be well, we differ, sort of, on what the most instrumentally effective way to achieve this outcome is but we're still both really unified on what the desired end state is and there I think disagreement over, sort of, instrumental efficacy, you know, well, that's rarely that problematic a disagreement because well if you're right then we'll soon learn that, if you're wrong reality will probably, sort of, make that pretty clear in short order. I think the more troubling ones and the ones that tend to cause more, kind of, persistent friction in an organization are where, sort of, there is latent disagreement in what you're actually optimizing for but that's, kind of, never explicitly surfaced and uncovered and so now I guess again in decision making, I place, kind of, more importance on making sure that we have the right, sort of, foundational agreement such as the, kind of, disagreement that I intend to arise are of the, sort of, essentially more superficial sort and their agreement is actually less important. Part of culture is learning from the decisions the organization makes. What do you do at Stripe to make sure that people are learning and what do you do personally to make sure that you're learning from the decisions that you've made, both positive and perhaps ones that you in retrospect would have wished you could make differently.
: I'm inclined to say, I don't know if I actually believe this, but I'm inclined to say in response to that question that decision making in organizations is slightly overrated in that organizations are not like investment entities or funds or advantages in that with investing, it's fundamentally very binary. There is a moment at which you either buy or don't do or sell or don't or whatever. And maybe it's somewhat more continuous in the case of say public market investing and so on, but given, sort of, constraints on just decision-making time I think you have to treat it more binary. You assess this stock and you make a buy or a or not decision. Whereas, in organizations everything is much more fluid and continuous it's much more about designing the feedback mechanisms, you know.
: Yeah exactly and, you know, the famous, sort of, water model of the economy. You know, with the, sort of, circulating fluids and you can vary the interest rate or the inflation rate or whatever. But just try to get a sense for the overall, kind of, biological apparatus. And I think an organization is much more like that and so, I think that things to optimize are the incentive structures and the mindsets and the definitions of the goals and the feedback mechanisms from the outcomes to the inputs and the work and the operations themselves and all those things and less the binary decisions. I wouldn't kind of, completely dismiss, obviously the important decision making and that there are times where you have to decide well, are we going to launch this product or not. Or, are we going to start this project or not or are we going to replace the system or not and so on. So, there are, of course, real decisions but I think it tends to be much more – well, I guess, maybe it doesn't feel like the right unit of analysis to me. I think the right unit of analysis is that of the cell. And the question is, well in an organization what are the cells and what are the organs and how do they interact for the feedback mechanisms between them.
: Let's geek out a little bit on the feedback mechanisms here. What sort of feedback mechanisms do you try to make sure are in place, what point in the process do you try to acknowledge what they are?
: I really think that this is not the question but I really think it's too early to answer that in the sense that I mean I can, kind of, tell you what I think today and the, sort of, changes we've made over the last year and things like that. But like Stripe has been a thousand-person organization for or has been more than 500 person organization for just over a year, right? We're beginners at this and, you know, three years ago Stripe was under 100 people and I think either to opine as if or to even more problematically believe that we're gonna have it figured out would be real hubris. And so, it, kind of, in what we've been talking about I think that's gonna be some of, you know, where our thinking comes from them, but I don't know what the right answers are yet and we spend a lot of our time, sort of, scrutinizing other organizations trying to find out, in, kind of reverse engineer what works for them and why. And I think that part of what's interesting at the tech industry is that it's a kind of pure knowledge work that we're still, I think, quite early in sort of, figuring out in terms of how to optimally coordinate and collaborate on it in that you can, sort of, draw lineage of HP and Intel and Microsoft and Google and Facebook and so on, WhatsApp. And they're all these set of suggestive examples, but I think these, again, suggest that we may not have it all figured out. I mean, the fact that WhatsApp was such a miniscule team, and, Instagram too, of course, despite operating at such scale or the fact that …
: In the wake of a new paradigm.
: Yeah, yeah. And the way Facebook operates is very different to the way, you know, HP operated.
: Under Stripe, which company cultures do you admire the most? Not business models, but culture. And why?
: Well, I admire cultures that are strong, first off. Culture is that when you ask somebody who's in the culture, can you describe it, that they can expound on its merits for more than half an hour. And in almost every case, describe at some length all the things they don't like about it, right? Because if it's strong, I mean, it's improbable that every aspect of it is something that a person, you know, really agrees with or feels an affinity for. And so, whether it's the New Yorker or the military, a shared characteristic of those cultures is that they're strong, right? So, I think that's the first, sort of, thing and I don't think that describes most organizational cultures. I think most organizational cultures are some, kind of, milquetoast Afrojack, right. So, that's number one. The second is cultures of perfection. And so, both the economists and Apple have extraordinarily high standards for themselves and really, kind of, in both cases the work has a, kind of, primacy. And so, who designed the latest iPhone or who wrote that article. In both cases that's anonymous because there is such a belief that the work speaks for itself, right, and a lot of admiration for that. And then cultures that have longevity and really sustained success. And so, I think that one of our major investors is Sequoia Capital and Sequoia has been, you know, the top firm or in the top three firms. Obviously, it's a subjective ranking but call it, you know, a top, unquestionably a top three firm for essentially its entire existence. And there was no other VC firm that has been a top three firm for, you know, call it for decades. And so, I think the obvious question is well, why is that? What's different about Sequoia there's been tons of VC firms and a lot of different firms have had at any moment in time a strong claim to being a top three firm. But what are the underlying institutional characteristics that enable that to be sustained. And of course, you know, this applies to some of the other organizations we mentioned like, say, The Economist or the New Yorker or even, this is one that I began to read more about of late, Koch Industries, that, you know, Charles, of course, or Charles and David are most famous for their political activities, but if you just look at the company that has, kind of, compounded from 20 million in annual revenue to now according to public estimates 100 billion over, you know, call it five decades and there aren't that many organizations that have compounded like that for that long without there being, kind of, one driver of success there's no one thing that enabled that rise. They didn't like, stumble upon some resource that they, kind of, cornered. There was no, kind of, iPhone for them, etcetera. It's clearly something, kind of, deeper and more, sort of, institutional and the fact that that's been, kind of, sustained for so long I think is interesting in its own right. And what is it that Sequoia Capital Koch Industries and the New Yorker share, and I haven't quite unpacked the answer to that yet.
: Can you give us an example of what you've learned from studying Koch Industries?
: It's very striking to me how Warren and Charlie at Berkshire, and accounting for biases and mechanisms for clarity of thinking elected to a very striking degree I mean, obviously, if you read the public writings or you go to Omaha and you listen to what, you know, Warren and especially Charlie talk about, you know, it's, sort of, half investing and half applied epistemology, half philosophy, right? And that's been the case as well to a striking degree with Koch. And I don't know them well enough by any means to, sort of, opine in any deep sense, right. Like I've never been to one of their factories, I've never looked at one of their financial statements and so I'm not qualified to assess in any, kind of, comprehensive way, but just in terms of what it seems that the leadership prioritizes, it's strikingly consistent across two of the most successful, multidecadal institutions in the U.S. something to be said going back to your point earlier about learning from companies that have consistently demonstrated over a period of time without these huge, kind of, like one off hits that have caused most of that track record.
: Right. You're a huge reader. Where did this love of books get started?
: Well we had crappy internet when I was growing up, because our house was so remote, there's so much noise on the phone line and that we didn't have internet for years and then we got it and it was treacle slow and so on. And, you know, I was fortunate my parents were very willing to pursue all these harebrained schemes and so we eventually got an ISDN line, which was ferociously expensive, but God that, you know, that, sort of, the fiber of its day, at least as far as I was concerned. 7.6K a second was majestic. I could barely keep up with the speed. And then we eventually got satellite internet connection, which was really a game changer, but it effectively meant that for the first, I don't know, 14ish, 15 years of my life, there was no internet and we lived in a very rural part of Ireland. I was quite distant from even my friends at school. And so all there really was for us to do was to play in the garden, which we did a lot of, and to read and, you know, it's funny, I often wonder about this in the context of, you know, if I had kids or when I have kids, what's the optimal upbringing for them? And, of course, you think well you, kind of, want them to grow up in a stimulating environment and have all these experiences and extracurriculars and everything else and, but something that was not my upbringing.
: My upbringing was I, kind of, get out of the house, go play. That and, I mean, there's plenty of stimulation around. You know, our parents had lots of books and so, you know, we can just, kind of, burrow our way, sort of, sequentially through the shelves, but you know, it was pretty unfettered and I think our parents had a, kind of, they followed our interests and supported them but they didn't choose them. It felt like they pushed from behind rather than pulling in front and so yeah, I think that's for the reading thing came from and I think that well I don't know, I run quite a bit and I don't even run because I enjoy it that much. I mean, I enjoy it but it's nothing, kind of, in the immediate moment. It's not like it's euphoric or anything close to that. I mean, it's pretty painful, and you know, the Greg Lamont quote about how, I mean, it's very dispiriting when you think about it. It is very deeply true that how it never gets easier, you just go faster. That's true of running. Like, if I stay running for the rest of my life, it will never get easier. I will just go faster but just it feels like something I ought to do and I vastly rather having run than not having run and so I continue, sort of, continue to do it. And, with reading, basically, I don't feel like I'm weird; I feel like everyone else is weird in that they're just like so much stuff to know and I guess I just feel stressed out by. Like, it feels important or it's obviously important and I don't know it. And so shit, like I better, you know, get to work. But it's not what I'm reading, I'm not in this, like especially blissful place. I mean, I enjoy it perfectly fine, but it's more like I am, I think there are extremely important things that I really should know and I don't. And that feels problematic.
: How do you filter what you read? There's millions of books.
: There's one of you.
: Right. Well, I discard a lot of books. I like the insight that there's a set of great books that are really worth reading, right? And there's a subset of those books that are really enjoyable to read. Maybe it's like 10 or 20 percent of them say. And the subset, the intersection of really worth reading and really enjoyable to read is actually still more books than you can read than you can read in a lifetime. And so, I've, sort of, decided well I would read all the books that are really worth reading and really enjoyable to read, and then when I run out of those, then I'll go back to the books that are merely worth reading, right? And so, you know, very quickly you can decide if this is an enjoyable book to read or not and if not, discard it. I think reading, you know, should be treated as a, kind of, more active process, Sort of, you should skim, you should skip, you should backtrack. You should discard and potentially return, like the book. You know, you were not subject to the book, you're not a passive consumer. Like the book is there for you. You bought it, it's yours. And like jump back and forwards. Tear it in half if you want, annotate wildly like, you know, use it.
: I wholeheartedly agree.
: And, I maybe, you know, start half the books I get and I probably finish a third of the books I start. And that works out to, you know, finishing one to two books a week. But if I finish it then, you know, I guess, well, it's probably been recommended by somebody in the first place and then it looked interesting enough upon some very superficial skimming to start. And then, you know, if I finish it again it was quite interesting so there's actually like a lot of selection that, kind of, happens along the way. And then I think, just the other thing worth pointing out is, you know, the line from Basho about the Japanese poet and that you shouldn't follow the people you most admire but you should follow what they admired. And I try to do that, I try to figure out for the people who can be doing really great work or to have really interesting ideas or just who I admire in whatever regard. How do they get to who and what they are? What influenced them or what's upstream? And, often it's quite obscure. But I try to, kind of, disentangle that.
: When do you typically read?
: Always, I mean, in the morning, in the evening, while walking. While walking is a good one actually like your peripheral vision is such that you can actually quite function and read a book while walking. And there's other people that have started to do this and do it much more and faster than I do. But you just spend a lot of your time walking and so be able to do that, I've found to be quite valuable. Often while eating.
: So, you're sitting at home on your couch. It's after dinner and you pick up a book for the first time. Walk me through how you process that book, what you look at.
: Yeah, normally I'll jump, sort of, midway through it and just start reading and see like, would I, like to have ended up here and almost certainly, like a bunch of the terms I won't recognize or the antecedent ideas I won't be familiar with or whatever, but like do I want to be here or to have gotten here. And if for a couple of pages, it seems like the answer is yes then I might, sort of, backtrack to the start and start, kind of, pursuing it a bit more seriously. I mean John has this insight that, and it's related to the previous point, that at every moment you should be reading the best book, you know, in the world. I mean, I don't mean, kind of, the absolute best for everyone but, sort of, the best book for you. But like as soon as you discover something that seems more interesting or more important or whatever, you should absolutely discard your current book, sort of, in favor of that because any other algorithm necessarily results in you reading, kind of, "worse stuff of our time.".
: Sub optimal.
: Yeah exactly. And so I'll be reading the book on the couch and then, you know, maybe after 50 pages I'll, I don't know, be in my room and I'll stumble across something else. And I might just, you know, switch rails. The other thing that I think is actually quite valuable is just leaving books out. And so, when somebody recommends a book, I'll, you know, very often pick up a copy, ideally, a used hardback copy, cause the hardback books, you know, they're more durable and now with Amazon, used hardbacks are really cheap. And, I'll leave it out and so there's books in the kitchen; there's books in my bedroom; and there's books, you know, on my bed and just strewn everywhere. And surprisingly, commonly either or someone else will recommend the book or some aspect of the book whatever. And it's still salient, it's still around you and you're like oh yeah, I really should check out that thing. Or something else triggers its relevance. You read an article or you just start appreciating a point or a question or something, right? And so, I like part of the reason that I still really value physical books is because you, I mean, for now at least, we still exist in physical space and it creates a, kind of, idea space for you that makes, kind of, productive collisions more likely to happen.
: What types of things do you typically mark up in a book and what does that look like?
: So I tend to just make notes in the margin. So, I tend to underline stuff but, in the margin, and, I underline, you know, misusing the term, I annotate it, mark it, highlight it, in the margin because then you can flip through the book quickly see the party you marked, right? And then the other thing is, on the last pages, like on the inside cover at the end, I tend to very quickly note page numbers for particularly interesting points or things that jumped out or whatever, so, that I can easily go back to a book and, you know, I have the list of the 30 things that I found most interesting.
: So you keep the book, a book that you completely read, that you have like?
: How often do you come back to that book?
: If I want to make a particular point or be reminded of a particular aspect or, you know, whatever. Maybe I will, but generally speaking, I don't, and I think, you know, part of the value of making annotations is, of course, to imprint them more firmly in your mind so that you, sort of, don't need to come back as much in some sense. If it's really good, I don't often do this, but if it's really good, I might write a review for friends and just maybe share an e-mail or a Google doc or something or just share snippets with friends and that's valuable both because again, so the act of a summary or summarization, sort of, aids a, kind of, synthesis and better recollection but also, of course, it triggers out pointers and for those suggestions from those friends and so, you know, if you want to identify candidates in adjacent or if I'm to form the flustering and figure out what type of adjacent candidates might, you know, be interesting for further exploration writing review is, you know, a good place to start.
: What sort of books have you written reviews on for friends this year?
: One that I really enjoyed was A Culture of Growth by Joel Mokyr and it's basically a book about why did the Enlightenment and the Industrial Revolution, really the Industrial Revolution, start when it did and where it did? And, he basically makes the case. I mean, there's obviously tons of different arguments that have been made for this and because it only happened once it's, sort of, we can never know definitively. And, you know, was it the abundance of, or was it the abundance of coal in the UK? Was it the setting up the intellectual property system and patents? Was it the high cost of labor in the UK that, sort of, created more, sort of, that made productivity enhancing improvements more valuable. Was it something about trade, you know, and so on and so forth and Mokyr basically makes the argument that it was primarily intellectual and more than, sort of, "economic." And, secondly, that it was, sort of, specifically a, kind of, synthesis of the importance placed in, kind of, scientific knowledge where we going to realize that scientific progress knowledge about the world, you know, exists and can be important and that progress is possible and that we're not just, kind of, imperfect imitators or receivers of the knowledge of the Ancients. And so a, kind of, a belief in scientific progress and coupled with a belief in, sort of, the practical importance of, sort of, engineering and of the more prosaic aspects of, you know, industry and of, kind of, practical pursuits.
: And, you know, Mokyr offers the example of bacon through both, kind of, inspired the Royal Society was going to one of his followers who created it but also intended to catalogue the practical knowledge of all of the crafts people in the UK and the, kind of, implicit functional knowledge that they had. And, it's, kind of, this interesting combination of those that are really high minded and the very practical, right? And, so anyway, Mokyr, kind of, teases through all these arguments and the, kind of, republic of letters and the, sort of, nascent, you know, rise of science on the continent and so forth. But all in terms of this question of why the industry revolution then and there. And, you know, it talks about versions of it in China and so forth. And anyway, so, I mean, I think it's a very important question and Mokyr is, kind of, a discussion of it as I thought, you know, particularly interesting. And so, yeah, I summarized it for my friends.
: That's awesome. Which book or books would you say have most influenced you?
: So I asked this question on Twitter, back a couple of weeks ago, and some of the responses I got were really interesting, and a lot of people responded. Like, many more than expected to, I didn't actually, embarrassingly, I feel guilty about this. I didn't post the response myself and I thought about it and it's actually just a very hard question to answer. Like, I actually worried that it may not have been a good question because, like it's so hard to know. Did the book influence you or did you have an inkling or leaning and then you read something that really resonated but, sort of, it's actually not, like the book is just the artifact upon which you project the, sort of, the characteristic that had already arisen or the belief that had already arisen. And the book is not actually causal in and of itself, right? Now, maybe it's still interesting to talk about the book as a, kind of, symbol for the belief, but yeah there's that, kind of, question. And then also, what I've often found is, I think the books that perhaps did in fact influence me the most, in a causal sense, are often not necessarily that good, right? And that maybe I'll read a book that, sort of, triggers a realization of some idea or something. And the book, kind of, jolts me in some direction and then I'll go read better things about that question. And so, it probably would've been better if I had just started with the better stuff. But in some, kind of, truthful descriptive sense, it's yeah it was like the worse one that actually influenced me, right? And so like, you know, maybe a better version, the question is like which books do you wish you'd read sooner or something, right?
: Let's answer that question.
: Actually, I don't think I can even answer that one as I think about it.
: This is yours.
: Yeah, I know, I hoist my own petard. Like, it's also just, sort of, clusters of books in that, you know, I think of programming, for example, like, it would be hard for me to answer this question and not cite any programming books, I mean, kind of, so influential at least in my mind's eye, in my life. But, I can't really point to any single programming book, I can name ten that I think, in aggregate, work together like Paradigms of AI Programming by Norvig and Structure and Interpretation of Computer Programs and, you know, K&RC books are about operating systems. The Tennenbaum book, you know, etcetera, and in aggregate, those like hugely shaped me. But I don't think I can single out just one, even two books on PHP, which were written by a guy who now works at Stripe. I mean, one of those books is the book that taught me to program and so answering this question, I could hardly not cite those, right? But it's not really the cluster or, you know, a similar cluster at science or economics or sociology or whatever and so they may all have to just get back with a better version of the question.
: Switching gears a little bit, what's the smallest habit that you have that makes the biggest difference?
: I reach out to people whose work I admire and tell them that, and often it leads to a dialogue and in some cases, I've gotten to know them pretty well. And, so I'm fortunate that Tyler Cowen, who I mentioned, is a friend but I was never introduced to him. I just randomly emailed him years ago. I actually invited him to a bitcoin meet up that I held in 2011, and I did not, however, buy any bitcoin, but I invited him to that meet up and he replied and, you know, apologized that he couldn't make it but we, sort of, ended up in, kind of, a dialogue after that. And, you know, when you reach out to the people, half the time they don't respond. But, you know, half the time they do and it's asymmetric. Doesn't really cost you much when they don't, and it can be incredibly rewarding when they do. And, so yeah, if I did not do that I would have missed out on a huge amount.
: How would you answer a question about what are your personal values are?
: Probably by evading it. I'm not about to. Do you think perhaps this just disproved that answer by actually answering it? But I guess I just think it's so, it feels like too important to question. It's, kind of, the big question. I feel like too important a question to answer simplistically and too complicated a question to answer briefly and thereby perhaps unsuited to something extemporaneous and I'm sure whatever answer I gave, you know, when I'm thinking about it in an hour's time, I'll kick myself and realize I'd left out, you know, this critically important dimension to it and I think, so I can cite some things I value. But the, sort of, the sense of giving a complete answer is very oppressive. I mean that's, of course, the value of Twitter where because of the constraint that there isn't the same because the system chooses when to cut you off rather than you choosing when to stop. That's quite liberating, so maybe, if you allowed me 20 seconds to speak on values, I could do that, but I could blame the constraint on anything I omitted.
: We have 10 hours of recording left. What would you say is the most common mistake that you see people make over and over again that you wish you could correct in 140 characters?
: Maybe not having the right peer group or not having the right mentors, isn't quite the right term, because mentor implies something, kind of, quite active but not striving to be more like the "right," people or not just being, kind of, in either case, deliberate enough about that, of course, who the right peer group is for you is, I mean, that's an entirely, kind of, personal and subjective question, but whoever it is, is going to be massively formative and influential in determining where it is that you end up. I mean, Drew Houston, has a quote about how you end up the average of your five closest friends. I think there's a very deep truth to that, right? But if you accept that then, of course, who your five closest friends are, I mean, choosing that and we do, though we may not think of it this way, we do choose the people, like you are choosing who you are. And, of course, that's a, kind of, a, sort of, bidirectional process where who you want to be is determined by who you're around which determines who you want to be around and so on. But …
: These people that will accept you as …
: Exactly, right. Right. But I think, like, certainly my mental model when I was 18 is that my five closest friends are, you know, people I ran into who kinda like me and I like them and there's a, kind of, we're cordial and close and all those things but that it's, kind of, fundamentally mediated by a, sort of, happenstance. And I think people should, kind of, invest more in it than they do and related, once you've found those people, you should really invest in it because if you accept they can shape you and you think they're the right people to shape you, well then embrace that shaping, right? And then, kind of, on the mentor point, or the latter one, you know, I think almost all of us, at least subconsciously, have a set of people we hold in really high regard or would like to be more like in at least some ways and so on, and I see people – well, in my opinion, they've, kind of, they haven't either found the right people or just like the right relationships and so on and if they had someone who was steering them more, or in better ways, could just be much better off.
: I want to talk a little bit of what the future of e-commerce and maybe Silicon Valley culture and I know we've got to end soon but talk to me about how payments. Do you foresee see them changing from not only the customer perspective over from the merchant perspective over the next, you know.
: Well, I think there's two levels maybe in that there's all this just like the basic mechanical stuff about payments and where we, kind of, forget just how much friction still exists and how many business models and transactions and businesses and everything, sort of, are impeded for fundamentally, kind of, stupid reasons, right? In that because micro transactions aren't possible both because the fixed costs are too high and because just like the friction too high than things that, would pay for it micro transactions just don't exist, right? It's not that they pursue a different monetization model, in some cases they might, but as a general matter, a significant number of them just won't exist, right? Or because maybe, it's hard to purchase things that are really expensive in a way where the, kind of, risk of fraud is officially low then, you know, you don't pay your rent online say, right? And so, and then, I think, maybe the most important dimension to that is the, sort of, geographic, kind of, balkanization and, sort of, inefficiency that ensues where it's extraordinarily difficult for somebody in Brazil to buy from somebody in Germany or somebody in Germany from somebody in India, etc. etc. And so you get this, kind of, unnatural set of sub-clusters existing not because of, sort of, you know, deep necessary limitations but because something much more arbitrary and contingent. And, you know, economists talk about the gravity equation and the fact that there's a proclivity of any two countries to trade falls off with the square of their distance. And, you know, there's always, like, big questions, like, wow, is that about something, kind of, fundamental in culture or about just surprising returns to proximity or what have you. Assuredly there's, you know, some of that stuff. But I think talking about the challenges and, kind of, complexities and hidden costs of pin methods. That doesn't feel like a very deep thing. It doesn't feel like something that is, kind of, significant enough on some level to have such, kind of, far reaching and deep consequences. But I think a lot of these, that have ostensibly "cosmic phenomena" are actually consequences of these very prosaic and straightforward limitations. And so I really think that solving this aspect of commerce on the internet like literally just making it easy for any two parties, a business and a consumer, in arbitrarily chosen countries making it easy for those two entities to transact, will have enormous consequence for the world.
And like that sounds like such a, sort of, a straightforward idea that it almost sounds cliched and the fact that it sounds cliched it should not blind us to the fact that it is still extraordinarily far from being the case today, right? We have had commerce on the Internet for decades to this point but it's still like 90 plus percent of Brazilian credit cards do not work online outside of Brazil. Brazil is not some backwater, it's not some inconsequential country, right? Obviously, one of the top economies in the whole world and Brazilian consumers basically cannot purchase outside of Brazil. And so, it's difficult to overstate the magnitude of that, sort of, limitations and inefficiencies that prevail today. So that's, kind of, the, kind of, payments level and then come on top of that. I think there is, or beneath it depending how you look at it. There's maybe just like a deeper question of what determines how many firms there are in the world? And what determines the character of those firms are they doing something innovative and novel or are they doing something prosaic that has existed for a long time. What determines who starts and why and the probability of survival? What determines the growth trajectory and the expansion rate into other markets in other products and so on? And, I think part of the tripe hypothesis is that things like that that seem very, sort of, one would think are very difficult to move are actually movable. And, really macro measures like the number of people who start a company, or who start a technology company, or again the success rate of those companies. And, you know, just to give some, kind of, illustrative maybe intuition pumps here, when we survey companies started with Atlas, 60 percent of them tell us they would not exist if not for Atlas. I know they could be wrong, like, maybe some of them actually secretly would, but maybe some of them are actually overstating their own resourcefulness or overstating. Maybe they're underestimating the challenges they would have faced and so I think that number could either be too high or it could be too low, right? But, let's be conservative and say that it's actually 40 percent. If Atlas is causing only 40 percent of those founders to start companies where they otherwise would not have. And if that, kind of, subsequent, you know, success rates look similar that's a huge deal, especially if Atlas itself gets paid, right.? I mean, over time, that can have real economic significance or, you know, if we can make it the case that businesses sell to twice as many global markets as they would otherwise sell to. I mean, again, integrated over an entire portfolio. That's a really big deal. Or Nick Bloom at Stanford did this really interesting work about management practices. Do management practices matter? You know, is good management merely correlated or, in fact, causal and in terms of leading to the advent of better outcomes? And they did an RCT, a proper trial, in India where they taught better management practices to a court of firms and did not to a, sort of, control group and saw double digit percentages in revenue over a multi-year period. I don't recall exactly, I think it was 13 percent over three years or something like that, right? That's an incredible low hanging fruit. Like all they did is teach better management practices 13 percent more revenue, like 13 percent more value provided by the company as assessed by their customers just from better management practices. And so, you know, when we think about Stripe and what to do in the future and the possibilities that exist and so on, it's much more, I think, about, sort of, how do we perturb this overall system to move some of these, kind of, macro outcome measures like number of technology firms started, survival rate of these companies, expansion rate of these companies, magnitude of the value provided to the end users, consumers, customers and so on? And, can be mediated by payments as this, kind of, foundational layer because it's something every business necessarily has. And because it gives U.S. good, sort of, understanding of the dynamics within the business and so on but it's on some, kind of, fundamental level not about the payment even though we think that, kind of, per the first point the impact of just solving the payments will itself be enormous.
: Do you think reducing friction across the board is a good thing. Or, do you think friction in certain parts of it actually serves the system?
: Well, serves it for who?
: That's a good question.
: Oh yes sure. I mean look, I think our Cross society I think so many of the things that looked like bugs are actually features from the perspective of somebody of some constituency, right? And ,of course, so much of politics is, you know, reconciliation of the countervailing interests of different constituencies and, of course, you know, the problem is that in so many cases the incremental gain of the constituency is substantially outweighed by the social utility loss of the rights of a society, right? And so, you know, bad teachers do great in the U.S. but almost certainly that's, kind of, a net bad trade for society. But the bet teachers care more about, sort of, their ongoing employment than the rest of society cares, evidently, about correcting that. And, you know, the same thing applies to fishing policy where perspective makes all the difference.
: Well but, you know, people driving fishing stocks to extinction care more about their ongoing, you know, right to do so than the rest of society cares about sustainable ecosystems. I mean, I think that's just the character of political economy. And so, yeah, absolutely I think, I mean, to return to our earlier example. It's not even clear that the rate – well, one could look at the fact that essentially no new banking charters are being issued in the U.S. as a bug or, of course depending on your perspective, it's a wonderful feature. It's great for the regulators and it's great for the banks. Profits in consumer banks are higher than they've ever been.
: Until they all get wiped out in the next crisis.
: And, then because they're even more systematically important than they were in the past, they'll be needed. To the extent there was a systemic argument for bailing them out in '08 there presumably be an even stronger argument in the future.
: It's almost like, we were talking about this earlier, but that's when you get big, you have more loss aversion. And so your goal is not necessarily to get better from your customers perspective. It could be to prevent competition prevent new entrants that might be a more, were there a moral judgment on it. It might actually be a more effective business strategy.
: Oh for sure.
: Innovating for your …
: No question. And, you know, I think we're very, sort of, dissonant on this point as a society, where on the one hand we decry lack of innovation, on the other hand in our collective action, we do so much to ensure that it doesn't occur, right? And so, you know, on the one hand we decry the state of the, sort of, medical industrial complex and the 18-1/2 percent of our GDP that is spent on health care costs and the plateau or even decline in life expectancy and the declining rate of drug discovery and so on. And yet, on the other hand, sort of, two regulatory structures make it harder and harder to engage in drug discovery or to, I mean, you can't even start a hospital unless you've got a certificate of need. But, if you observe that well hey, you know, medical care in San Francisco doesn't seem so great and it seems extraordinarily expensive. You know, even though it seems like a very thankless undertaking I'm going to try to do better. Well first, you'd better get approval for that. You can't just enter the market and so I think that, kind of, and I'm not being, kind of, a normative judgment.
: I mean I have my personal preferences but I'm not casting normative judgment that's, kind of, what we ought to do as a society. The thing that I feel strongly is that we're inconsistent in our stated desires.
: There's like a perpetual, sort of, seesaw, if you will, where success sows the seeds of its own destructions. How would you make an argument right now that San Francisco or Silicon Valley is doing that?
: Well the obvious one, the two obvious ones, I guess, are in culture and in housing and costs in general. I mean on the latter – well on costs and the latter everything is getting more expensive and nobody seems to quite understand exactly what's going on, right? And that is, I mean, if you if you take health care again, for example, I mean, the case has been made that this is not in fact a bad thing that what would you expect an enlightened society that has solved all of its other material needs to spend its money on but healthcare? It's, kind of, it's the last thing, it's the last frontier. And perhaps we are actually getting, sort of, commensurate improvements if you, sort of, disaggregate appropriately and you analyze the right way. Or perhaps not, right? And how much of this is some, kind of, Baumel cost disease where some things are getting more efficient and that higher productivity and higher wages are, sort of, causing cost increases elsewhere to pay for opportunity costs and all the rest. But I think, sort of, specifically in Silicon Valley and specifically on cost of living and housing, you know, Silicon Valley is the, sort of, greatest concentration of wealth creation that I think has ever existed in the U.S. on a per square mile basis. Potentially, that has existed ever in the world, right? Facebook, Google, Apple, Inktel, you know, they're all based in a fairly small number of square miles, right? And, if you, sort of, if you were to look at Seattle and the Bay Area, kind of, together right and look at the, kind of, aggregate urban zone, you know, separated as they are by a two and a half hour flight. Then, of course, you can layer in Amazon and Microsoft as well. And, obviously, what you see is that their rise in success was enabled in part by cheap mobility and cheap expansion. And again, sort of, through just, sort of, political economy and collective decision making that no longer exists. Cheap ability no longer exists and cheap expansion.
: And you can see it now in this, sort of, latest generation of upstarts, you know, via, be it Twitter or Uber or Airbnb B or Lyft or whatever who are, you know, facing these really significant, kind of, structural headwinds. And so much of the wealth that's being created, this improbable fountain of wealth creation is accruing to the set of, lottery winners of the existing landowners rather than to the people who were actually doing the work. And because of that accrual the, sort of, the barrier to entry for newcomers is getting progressively higher and you see it in declining rates of mobility. And, furthermore, the other people in the city not in the tech industry who might otherwise benefit from it are, of course, getting priced out and, you know, this is not necessary. I mean, you can look at places like, obviously, Tokyo has, over the last couple of decades, been and improbable, well not especially improbable, but has been such an enormous economic success story and, you know, you had the boom and the bust and the supposed stagnation of Japan in the, kind of, early 90s on. But broadly speaking has done really well, but because of vastly fewer limitations on housing supply, have had very stable housing costs have not had the same displacement, right? And so the, kind of, the issues we face and we see year in San Francisco where it's getting ever, you know, 40 percent rise since we got temperatures in 2010. That's not necessary, it's not natural and it's a function of our, sort of, collective decisions rather than, kind of, some some secular and unavoidable economic force. And I guess I find it, sort of, dispiriting because it's a negative sum in the sense that it's not just that these gains go to go to these, sort of, existing landowners but actually will be fewer future gains. Like, I think you should be mad about this. You know, even if you don't live in Silicon Valley and you don't have the slightest interest in doing so because it's much less likely the next cool technology that you'd like to take advantage of will exist. It's, sort of, a suffocation of future potential and future gains and there aren't many places. Well, if you believe in increasing returns to scale that's, sort of, you know, this is, kind of, Paul Romer's work and others, that because of the, sort of, the collision of ideas and people in cities makes them more productive than if they were elsewhere. If you believe that to be the case, and there's like pretty good empirical data that it is, then you can't just move elsewhere. You can't just move to Nevada or wherever in the south, you actually will be less productive in those zones. And so again, I think it's a real loss in terms of spillover gains for the rest of society. You know, in service of not building six story buildings in San Francisco.
: What do you think your role as a large employer and thoughtful citizen of San Francisco is in this?
: Well I don't make any secret of the injustice, well the moral injustice in terms of the displacement that's occurring and the, sort of, economic wrongheadedness of the prevailing policies. And, you know, I'm a landowner in San Francisco John and I own a house together and I hope it's value declines in that, I think it's impossible to answer what the price of land should be. But I think it is very clear that on a marginal basis the social returns of cheaper land in the most productive productive region of the country would vastly outweigh the reduction in wealth, you know, to existing landowners.
: But going back to banks everybody has a system that they want to protect.
: They're totally right. Right. And, I mean, of course, you can try to estimate the magnitude here and so over at Berkeley this guy, and Enrico Moretti has estimated that 50 percent of U.S. GDP growth between 1964 and I think 2010 was left on the table as it were by, sort of, inefficient land use and land allocation. And, obviously, 50 percent is a high number and quite speculative and it's very difficult to measure the counterfactual. But even just the idea that one can, with a straight face hypothesize that it could be anything remotely in that vicinity I think gives you a sense for how high the stakes here are, right? And yes we can decide that, you know, we place such an enormous premium on the aesthetic appearance of the San Francisco of today recognizing that it is of approximately a third of the density of even just Greenwich Village in New York. Right? We're not, you know, the, sort of, the other extreme is not Hong Kong you can triple San Francisco and get to Greenwich. We can decide that that's our preference but, sort of, you know, sober estimates are measuring the cost of that in double digit percentage points of aggregate national GDP. And of course when you look at our Reveal preferences in terms of where we like to take vacations to, or where, you know, we dream of, I don't know, spending a summer or some day and things like that. It's to European cities which tend to be of very significantly higher density. Paris, London, much, much higher density than San Francisco. And so again, I'm hesitant to cast normative judgment but I personally feel strongly.
: I think that's a great place to leave this. This has been a phenomenal conversation. Thank you so much for coming on the show. Where can people find more about you?
: Well, if they want to start a business, they should head to Stripe.com. But if they want to subject themselves to more of the particular detritus that I post, they can head to my Twitter account which is just Patrick C.
: Thank you so much.
: Thank you.
: Hey guys, this is Shane again, just a few more things before we wrap up. You can find show notes from today's show at fs.blog/podcast. You can also find out information on how to get a transcript there. And if you'd like to receive a weekly email from me filled with all sorts of brain food, go to fs.blog/newsletter. The newsletter's, all the good stuff I've found on the internet this week that I've read and shared with close friends; books I am reading and so much more. Lastly, if you enjoyed this or any other episode of The Knowledge Project, please consider subscribing and leaving a review. Every review helps us make the show better, expand our reach, and share message with more people. And, it only takes a minute. Thank you for listening and being part of the Farnam Street Community.
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