Recode Daily: The YouTube HQ shooter was apparently upset about YouTube’s new rules

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

After the shooting, YouTube employees were walked out of the building with their hands up.

Plus, Spotify’s unusual IPO led to a $ 27 billion valuation, Apple hires Google’s AI head, and “2001: A Space Odyssey” turns 50.

A woman opened fire Tuesday afternoon at YouTube headquarters in San Bruno, Calif., injuring three before taking her own life. The suspected shooter has been identified as 39-year-old Nasim Najafi Aghdam. Numerous reports and supposed posts by Aghdam indicate that she was disgruntled about recent policy changes made by YouTube, which made it harder for tens of thousands of small video makers — apparently including Aghdam — to make money using YouTube’s ad revenue-sharing program. [Kara Swisher / Recode]

Spotify’s first day of trading as a public company ended up being surprisingly normal — and that’s a win for its “direct listing” strategy. About 30 million shares of Spotify’s 178 million outstanding shares traded hands yesterday, and after a drop of about 11 percent from the opening price of $ 165.90, the stock was trading at around $ 149 by afternoon; at the end of the day, Spotify was considered by Wall Street to be a $ 27 billion company. [Theodore Schleifer and Rani Molla / Recode]

Apple has hired Google’s chief of search and artificial intelligence. John Giannandrea, who helped lead the push to integrate AI throughout Google’s products, will run Apple’s machine learning and AI strategy, and will be one of 16 executives who report directly to CEO Tim Cook. The hire is a major coup for Apple, which many Silicon Valley executives and analysts view as lagging its peers in artificial intelligence. [Jack Nicas and Cade Metz / The New York Times]

Make time for this wide-ranging conversation with Saudi Crown Prince Mohammed bin Salman, who is on a seemingly endless pilgrimage to the nodes of American power — he visited Silicon Valley and Hollywood this week. The prince’s current U.S. visit is mainly a hunting trip for investment, and an opportunity for him to sell his so-called Vision 2030, an elaborate, still mainly unexecuted plan to modernize the Kingdom of Saudi Arabia and end its dependence on oil. [Jeffrey Goldberg / The Atlantic]

Here’s an in-depth examination of how Twitter was hijacked by the dark side: The company’s early zeal for free speech ultimately blinded it to safety concerns that continue to plague the platform. And here are some ways Twitter can make itself safer right now.[Austin Carr and Harry McCracken / Fast Company]


Recode Presents …

Fire up your DVR: Recode’s Kara Swisher and MSNBC’s Chris Hayes interviewed Apple CEO Tim Cook for the special, “Revolution: Apple Changing the World” — it’s scheduled to premiere this Friday, April 6 at 8 pm ET / 5 pm PT on MSNBC.


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One of Pinterest’s top product execs, Jon Alferness, has left the company after less than a year.

Alferness, who reported directly to CEO Ben Silbermann, just joined Pinterest in August.

Snapchat is rolling out group video chats like Messenger and Houseparty.

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On average, women are offered 4 percent less than man for the same job at the same company.

This is cool

50 years later, the world is still catching up with “2001: A Space Odyssey.” The Stanley Kubrick sci-fi classic returns to theaters in May with an “unrestored” 70mm print.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Author and Wall Street Journal reporter Ben Fritz on Recode Media

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

No two ways about it: Marvel movies make money.

His new book is “The Big Picture: The Fight for the Future of Movies.”

On this episode of Recode Media with Peter Kafka, Wall Street Journal reporter Ben Fritz talks about his new book, “The Big Picture: The Fight for the Future of Movies.” Fritz says the economics of the movie business have been completely transformed by the rise of online streaming services and by brands like Marvel, which have supplanted name-brand stars and directors as the most reliable indicator of a film’s success.

You can read some highlights from the interview here or listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Below, you’ll also find a lightly edited transcript of the full episode.


Peter Kafka: This is Recode Media with Peter Kafka. That is me. I’m Peter Kafka. I’m here at Vox Media headquarters in New York City. I’m talking to Ben Fritz from The Wall Street Journal, who’s written a new book called “The Big Picture: The Fight for the Future of Movies.” Hey, Ben.

Ben Fritz: Hey, Peter.

That’s called an introduction. Before we go further, I want to ask you to recommend this podcast to a friend, to the internet. I’ve been sending out emails recommending Ben’s book. I sent out a Twitter DM yesterday recommending Ben’s book. Someone wrote back and said, “I’m in line at Barnes & Noble to see Ben speak.”

Oh wow.

So that is how one does sort of hand-to-hand promotion. I’m asking you guys to do that so you can listen to this podcast for free. Okay. Golda, is that an adequate promotion? We’re gonna make Golder a character on this show.

And now, Ben, welcome.

Thank you, Peter.

I wanted to work with you for years.

That’s right. You’ve spoken about it for a long time.

You’ve rejected my entreaties, so this will count. You’ve written this awesome book. It’s about the movie business.

Yes.

If you listen to this podcast, so you’re a nerd who likes media, and the business of media, and how technology’s changing that, this is for you.

Right.

It’s a great book. I finished the whole thing. Last chapter on the subway here. Give me the thesis of the book.

Thesis of the book is that we’ve entered a new era of the movie business, which I call the franchise era of filmmaking. The movie business, correctly understood now, I think, is driven primarily by brands, by branded franchises — you know, your Marvel, your Fast and Furious, your Transformers, your Star Wars — and the age of movie stars, or the age of original films, the age of a diverse slates by studios is over, and those movies, they’re still created on the fringes of the business.

If you are someone who wonders why every movie is a superhero movie, or a Transformers movie, if you like that, if you complain about that, this is the book that explains that. And this isn’t a nuance that you quite clearly … I hadn’t really processed all the way through. The idea that movie studios spending a lot of time and attention on big blockbusters is not a new idea, and what is happened over the last 10 or 15 years is instead of saying, “We’re making a Bruce Willis movie or a Tom Cruise movie,” is that, “We’re making a movie that’s about Star Wars or Transformers,” or some brand that you presumably already know.

Right, yeah. Certainly there have been big-budget summer movies since “Jaws,” right, but now it’s not about the movie stars. The star vehicle is over, the Will Smith vehicle, the Bruce Willis vehicle is definitely over, and it’s these brands that are managed just as much as Procter & Gamble manages their brands. That’s what the most successful movie studios do, and the brands are really what’s relevant to consumers globally.

You buy an Apple product because you’re loyal to Apple. You go see a Marvel movie because you’re loyal to Marvel. And this has transformed the economics of the business for sure.

And you explain this in depth, sort of the why — let’s see if I got my reading comprehension correct — but it seems like you’re calling out three specific things that sort of pushed the business this way. One is the internet, and specifically Netflix and the fact that they’re sort of bringing so much content to you at home. Two is the death of DVDs, which cut out a really profitable part of the business and allowed them to make money from less successful movies. And the third is sort of the rise of China. Am I getting that correct?

Yes.

Yay me!

You comprehended that very well. I would say that the …

I read the book.

Yeah, look at you. Not everybody who’s interviewed me has actually read the book thoroughly, I don’t think. Yes, and I would say the rise of Netflix, I would very … related to that, fold into it, is the golden age of TV, which includes Netflix and Amazon, of course, and also cable networks.

If I’m watching “Breaking Bad” commercial-free for 45 hours at home, it’s gotta be something pretty fantastic to get me into the theater.

Yeah, right. Has to be an amazing theatrical experience. Not to mention that “Breaking Bad,” essentially, is one big 45-hour story, right?

Right.

I mean, it’s essentially a really long movie. I think that’s a way to understand it.

Right, and that’s sort of a cliché now, right, that these … that “Game of Thrones” and “Breaking Bad” are a very long movie, but it’s true.

It is true.

And even the stuff that’s mediocre, right, is good enough to keep me engaged. So what is gonna get me to the theater? And specifically what is gonna get someone who’s spent money on a movie out to the theater?

Right, sure, right. You mean most TVs, obviously, you have a subscription to it, so the marginal cost of watching that next Netflix or HBO show is zero, and the marginal cost of going to see a movie is substantial, especially if you have kids and need babysitters and everything, so you’ve got so many good options for zero dollars.

They’re gonna get you out of the house, it better be one of two things: Either something so spectacular you would be inferior to watch it in your living room, or that rare thing that happens once in a while still, which is like a cultural moment that you want to be part of and everybody’s talking about “Get Out.” You can’t miss “Get Out.”

Right. I wanna talk more about the industry in general and the book — or what we can learn from the book — but I do wanna highlight something that surprised me when I started reading it, because the title doesn’t say so and there’s nothing in the copy that indicates this, but at least half the book is about the story of Sony Pictures, specifically. You have great access and great detail, and that’s because you’re using … Well, you tell me. You fill in the blank.

Because of the hack of Sony Pictures now a little over three years ago, yes.

So basically that provided you with enormous source material?

Right. You’re correct. We didn’t advertise it heavily because I didn’t want people to see this as a hack book or a Sony book.

Hack book or “This is the story of what happened three years ago at Sony.”

Yes, exactly right. That wouldn’t be so compelling. This is about …

But it is super compelling, because it’s the kind of reporting you wouldn’t normally be able to do. You have all this insight into what Michael Lynton’s thinking, what Amy Pascal is thinking, because they’ve written it in their own words in a way that you can’t really normally get ever.

True, well, this is …

Contemporaneous notes filed by the people in charge of the theater.

Yes, that was absolutely … that was my in to the book. That’s where I started. This hack happened. Is there a book in the hack? That’s really where I started three years ago. First, it was like maybe this is like “too big to fail.” You’re inside the drama and you see what happens, but there were two problems with that. One is the problems in a movie studio and an executive getting fired is not exactly akin to the American economy almost collapsing, and it was so over-covered at the time. There wasn’t a lot left to say about what was happening there.

But I did … the more I dug into it, the more I thought, “Hey, this stuff they are talking about are all these issues that I think about and everybody I know who goes to the movies thinks about.” The people in Hollywood are actually having the same kind of debates. Why can’t we make original movies for adults anymore? Why’s that so hard? How we gonna handle this franchise age? What are we gonna do that will appeal to people in China? How are we gonna compete with Marvel and Star Wars? That’s what the people at Sony were debating, and I realized this is a great …

And you write a book like this, it can’t just be me pontificating, or it could, but I don’t think that’s such a good book, but you want to have characters. You want to have an arc. You wanna see people grappling with problems, and the Sony executives whose emails were released, I think combined with the documents that get you into the economics of their business and combined with some additional reporting that I did provides a narrative and characters that drive all these big issues we’re talking about.

Because if you remember the Sony hack — and it’s hard to remember now because we’re post WikiLeaks, and then everything has been hacked. There was a couple months of enormous coverage of what was in the documents, and lots of embarrassing personal stuff about Amy Pascal’s shopping habits and racial slurs. She came off much worse, I think, just sort of her job and the nature of how she communicated via email.

Yes.

And everyone sort of harvested the emails for salacious stuff. I pulled out something that David Goldberg had written to Michael Lynton about how to fix the music business, but you went and said, “Oh, there’s a story of a business here.” And the reason why it’s interesting for you and for readers is Sony is a studio that had been doing well and could not keep up with the move into blockbusters — which is a little hard to reconcile, because if you think a little bit about this, these are the people who had “Spider-Man,” which is one of the most successful blockbuster franchises.

Yeah, of the early 2000s.

How come they weren’t able to go, “Well, ‘Spider-Man’s’ working. Let’s do more of this.”

Sure. “Spider-Man” was sort of in an age when you have these diverse movie slates and you have a couple of tent poles. “Spider-Man” was a tent pole, combined with all your Adam Sandler comedies and your star vehicles with Will Smith and your original dramas and all those sorts of things. So, Sony did succeed with “Spider-Man,” but what they weren’t able to do was sort of turn that into a brand, turn into a cinematic universe.

The thing about “Spider-Man” was it was really … for them, in their mind, the way Sony used to do things, it was attached to the talent. It was attached to Tobey Maguire, the star, and Sam Raimi, the director, and as they got more and more powerful and demanded more and more money, the profits from those movies went down and it creatively got worse. If you recall “Spider-Man 3” when he turns into an emo Peter Parker …

Is it the one where he’s dancing?

And he dances in the streets.

Yeah.

Right. It was pretty terrible, and even though it grossed more than the prior two, the “Spider-Man” films, the profits were way down because they were giving all the money to the talent.

But there’s multiple “Spider-Man” reboots.

Then they rebooted it.

Andrew Garfield was the “Spider-Man.”

Yeah, they rebooted it with Andrew Garfield, and it was not so successful anymore. They just didn’t do it well, and that was the only successful franchise that they had. They weren’t able to transition, and by the time the reboot came out, this was when Marvel Studios with “Avengers” and “Captain America” and “Iron Man” and so on was on the scene had created a new, more appealing to global moviegoers style of superhero film, and Sony was really behind the curve.

The bigger issue you’re pointing to that I should mention is it just happened to be Sony that got hacked, but if I was gonna pick a studio that would be a great character, so to speak, for this transition from the star-driven diverse-slate era of filmmaking to the franchise era of filmmaking, Sony would probably be the best one, because they were so successful in the 2000s, and they’ve had such a hard time in the 2010s. They haven’t been able to make this transition.

And it wasn’t that Amy … Am I pronouncing her name correctly? Is it Pascal?

Pascal.

Pascal was above making movies that lots of people wanted to go see, right? She made plenty of Adam Sandler movies. He had basically his own corner of the lot.

Yeah.

Lots of dumb Will Ferrell movies. Nothing wrong with that. But her heart wasn’t in it, right? Those were the things that bought houses. And then what she really liked was making these sort of mid-tier sort of movies with Tom Hanks.

Yes, she likes making …

“Captain Phillips.”

“Captain Phillips,” “The Social Network.” These are the kind of movies that really drove her and excited her, and she’d work with filmmakers like James L. Brooks — even though they cost her a lot of money — because she believed in them and they had made her money in the past. She loved her talent. She got into the movie business not because she wanted to run a studio. She got into it because she loved making movies. She is now a producer again, and she was a producer to start with, and that’s really where her heart is.

She made “The Post.”

Yes, she was Oscar nominated for “The Post” this year.

That is a classic Amy Pascal-type movie, right.

Yes, absolutely.

Stars, prestige, real story you should care about.

Yep, absolutely. It’s an old-fashioned, down-the-middle, quote-unquote prestige movie.

Did that movie make money?

It made a little bit of money. Yeah. I mean, it made a little bit of money, which is totally fine. It used to be you had 10 of those and they all make a little money, combine them together, and you have one or two “Spider-Mans” and you have a great year. But now, it’s rare that those movies make any movie, and the little bits of money that some of them do is erased by the ones that flop and then make nothing on DVD, which is why the only way to make real profits in the movie business these days is to have your “Jumanjis” and your “Fast and Furious.”

Well, there’s a couple versions. I wanna talk about that, but quickly, we make money because people advertise with us. So please, don’t forward past this ad. You should listen to it. This advertiser is awesome, because they support Recode Media. Listen up.

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We’re back here with Ben Fritz, who wrote “The Big Picture,” which you should go buy. What’s the best way for someone to buy your book? Do you care if they buy hardcover, or paperback, or e-copy?

There’s no paperback yet, but I don’t care …

Don’t buy the paperback.

Don’t buy the paperback. You’re gonna have a hard time. But I don’t care if you buy an e-book or a hardcover. Whatever you like. If you wanna support your local bookstore, that’s awesome. I highly recommend doing that.

What boosts your …

Of course there’s Amazon rankings, and if you buy it on Amazon you boost my ranking, which gets more people to pay attention to it, so that’s great, too.

Go buy it on Amazon, who also makes movies. We can talk about that in a minute.

Yes, they do.

The counterpoint to Sony is Disney.

Yes.

Which owns Marvel, Lucasfilm, Pixar. Dominates moviemaking, right, or dominates this era of moviemaking, dominates the blockbuster franchise version of it. I talk about this all the time. Those three studios that Disney bought, bought collectively for about $ 15 billion dollars. Sort of the best M&A in modern media. Is their success today solely because they had the foresight to buy those three properties? Anyone who bought those three properties would be doing as well as they are?

No, it’s not entirely that. I mean, that’s a big chunk of it. Their success is also, frankly, their willingness to abandon every other kind of movie. Bob Iger sold Miramax. He shut down Touchstone, which means he stopped making indie movies. He stopped making R-rated movies. He stopped making romantic comedies, stopped making original dramas for adults.

Bob Iger didn’t come from the film business. He came from TV, and he was willing to look at it with sort of this, frankly, kind of cold financial approach, and say the branded movies make more money. He said to me, it’s a quote in the book, he said, he loves movies. At the time, “Spotlight,” when I interviewed him, had won best picture. He said, “I love ‘Spotlight.’ I love movies like that, but movies like that are a terrible business. Even in success, the profit margin is pretty thin.”

“Terrible, terrible business,” I think is the quote, right?

“Terrible, terrible business,” yes, and the profit margin’s thin. The profit margin for the branded movies is better, so he bought them. Very smart. And the other smart thing he did is he largely has left them alone. They have their own creative culture, and the creative culture of Marvel is quite different than the creative culture of Pixar, for example, and the people who work there are all passionate about what they do. The Marvel executives are Marvel geeks. The Pixar people are animation geeks.

There used to be this idea — and I think Amy Pascal at Sony would exemplify it — where well, no, the studio head of production, he or she ultimately gets involved and decides what’s best. The comic book people shouldn’t make comic book movies because they’re too geeky and they’re not gonna know what the broad audience wants. So you’d have the superhero movies that were not made …

You’d bring in adults to say, “We’re gonna translate this nerdy thing into something that has broader reach.”

Yes, exactly, and it turns out that the opposite has succeeded. Marvel’s run by Marvel geeks, and Bob Iger and Disney have let them do it, and they’ve been massively successful by leaning into everything that worked about the comics.

If you care at all about this stuff, by the way, your story of Marvel and how that brand was built, and then nearly sold, and how Sony could’ve bought the entire thing for what? 25 million?

Sony had the opportunity to buy the movie rights to virtually every Marvel character for $ 25 million, and the response …

Said, “No, that’s too much.”

The response of the executives was, “Who’s ever gonna be interested in seeing a movie about Iron Man or Captain America or Black Panther? Nobody cares about them.” All they cared about was “Spider-Man.”

So they just bought “Spider-Man” for a few million dollars, for what would’ve essentially been the cost of like half an Adam Sandler movie. They passed on the rest of Marvel. It’s an amazing story. Go read it for that alone, but read the whole book.

Again, back to what you were talking about at Disney, it’s not just that he bought those franchises. Then he said, “We’re gonna get out of the other businesses, because the risk involved in making a movie that might be very, very commercial but doesn’t have a brand attached to it, it’s too high. Also, that the mid-tier movie, much less, the upside there is too limited, and we can still lose a ton of money.”

Yeah.

Because by the way, you can make a failed blockbuster movie, right.

Absolutely.

Attaching Marvel or Lucasfilm … Actually all of those are always successful. But you could make a very commercial movie attached to a brand and it still won’t work.

Mm-hmm.

What I’ve been thinking a lot about is why studios aren’t spending money on the very low-budget movies. I just talked to Jason Blum last week at South By Southwest. Seems like — and I talked back and forth with him about this — his formula where you cap your downside, he says he can’t lose money essentially by spending up to $ 5 million on a movie, and then theoretically, could have really, really big pay days when you get a “Get Out” or a … What else did he do this year? “Split.”

“The Purge,” “Split.”

Really big. I can imagine why Disney would say, “Our model works because we only want giant home runs.” But why aren’t more studios … why aren’t more people trying to do the Jason Blum method where you say, “We’re gonna cap this. By the way, we’re not trying to make art films. We wanna make commercial films.” Why aren’t more people trying to do that sort of low, low budget, minimized-risk model of moviemaking?

I think it’s a good question why your Paramounts and your Sonys have not been doing that as successful as Universal has with Jason Blum, and all I can say is I know in some cases they’ve tried to do it, and they’ve done it poorly, and they haven’t managed to get any successful films out of it. Paramount actually had a division — I’m forgetting what it’s called — but who’s devoted entirely to trying to do super-low-budget films, and trying to do just that, and basically none of the movies that came out of that made it to theaters. They were all … they went straight to VOD. They just weren’t very successful at it. Jason and the people he works with have managed to have a few major hits coming out of that formula.

I think that falls in the category of one of those things that seems easy to say but is hard to do. Just like make a superhero cinematic universe. Easy to say, but look at the results Warner Bros. had with DC, and you know it’s easier said than done.

Following the easier said than done, you spent some time in the book talking about Netflix is moving to movies, Amazon’s moving to movies. These are guys with essentially unlimited resources.

Yeah, yes.

Right, billions of dollars for content. Basically, they have not had real success in movies. Netflix will tell you that “Bright” was successful.

Who knows, but it doesn’t seem likely.

First of all, it’s a terrible movie.

Yep.

And second I think Netflix can shove something in your face and say that you’ve watched it, but that’s not successful.

That’s not success. Absolutely.

Whenever I ask someone why hasn’t Amazon and Netflix been successful at movies yet, the standard answer’s sort of a shrug and, “Hey, movies are hard, and they just haven’t had enough at bats.” Do you think that’s the case?

Well, I would dispute your thesis a bit. I would say Amazon has had some success in the field they’re playing in, which is the indie movie. Two of the most successful indies — and I know it’s weird to say indie and Amazon — but two of the most successful lowest-budget prestige movies of the past couple years have been “Manchester by the Sea” and “The Big Sick,” which were released by Amazon in theaters first before they went on to Prime.

Right. Now those are movies someone else made, they bought, and we’ll call it as is …

They bought and released those movies. Yes.

Then Netflix, by the way, has done some of that. That’s the same thing, right. Not in movies.

Yes. Well, they actually bought “Mudbound” at Sundance, nominated for Oscars. I mean, people liked it. Who the heck knows how many people watched it.

They’ve at least had critical success and success by indie-movie standards in theaters.

Yes, and that’s significant. Indie movies, large studios, have significantly but not completely abandoned that field, and Amazon and Netflix, especially Amazon, are just completely taking it over, because they don’t care about making profits on individual films the way the studios have to. They’ve taken over that, and the question now I think you’re pointing to is, as they start getting into bigger-budget films, mid-budget films, $ 50, $ 100 million, star vehicles, Will Smith vehicles, can they succeed?

The one thing they can’t do, so far — one of the few advantages the major studios have left — is Netflix and Amazon, when they’re streaming, don’t seem to figure out: How do you create an event? How do you make this a significant thing? When a movie comes out and you see it on billboards everywhere and it’s playing in the local multiplex near you, and people who are seeing it, we’re all seeing it together and we’re all seeing it at the same time. It’s not just on my queue and I’m gonna get to it. We’re all seeing “Black Panther” right now. That’s a major event. That’s something that Netflix has not figured out how to do, and that seems fine with TV shows, but with movies that’s a problem.

Do you think if Netflix made “Black Panther,” the exact same movie, and said, “We’re opening it Friday. By the way, if you wanna have a ‘Black Panther’ party, we’ll accommodate that. We’ll throw screenings in theaters.” Or however you wanna do it. Do you think that movie has the same degree of success culturally?

That’s been a debate I’ve been having with some people recently, because it’s a big question. My argument would be no. I don’t think it would have the same impact culturally, because I don’t think we’d all be seeing it around the same time. I think some of us would get to it when we get to it. I think the fact that it feels like it’s a big deal to go out of the house to go see it, that takes a real effort, so therefore that’s something that seems more meaningful to you. You’re seeing it in a group, and you see other people screaming, laughing, having a great time, and then the fact that we’ve all seen it within a span of just a few weeks, therefore we’re all talking about it, I think that absolutely is different.

I remember some of the most significant movies of my lifetime and being in the theater, or waiting on line to see “Jurassic Park,” let’s say, or something. Even the TV shows I loved, like “The Simpsons” or “Freaks and Geeks,” I don’t remember where I was sitting. I don’t remember the moment I saw that episode.

I think the counterpoint is “Game of Thrones,” right, where lots of people are watching it at 9:00 on Sunday, but then there’s a ton of viewing that happens within the next couple days, right, so everyone who’s interested in “Game of Thrones” is watching it within the week.

Right, but a TV show can build to that, for sure. A TV show that becomes successful, right, but a movie is a one-time thing, so you can’t sort of build up. After a season or two, “Game of Thrones” becomes this big thing. We all talk about it every Monday after seeing it the prior night. Perhaps, if Netflix was making every Marvel movie, by the time they got … they had made a bunch of them, become more and more significant, but for a one-off movie, you just can’t create that overnight online.

So you’re reporting the book for a couple years. You finished reporting when last year?

I finished all the research in like late 2016, and then I started my writing.

So this is the problem with anyone who writes a book, right, but I think particularly someone who’s doing what you’re doing. You’re writing about something that’s in flux, which is that there’s a bunch of stuff that’s happened in the movie business.

Wait. Has anything interesting happened in Hollywood in the past six months?

That is not in your … ’cause I’ve got an advance copy here that I got from you months ago, and I thought, well, maybe there was pressure. You would’ve felt pressure to slap something in about Disney-Fox.

I mean, there was no way to do it.

It’s not in there.

It’s not in there. Not in the final version. There’s no way to do it. I mean, the last change I made to the book was November or December, I had had something in there saying the business-friendly Trump administration is likely to approve the AT&T-Time Warner deal.

Yes, I saw that.

Did you see that?

Yeah.

That is slightly changed in the final version.

That has changed.

That’s the last change I made. But Disney-Fox I don’t have in there. It happened too late. But I would like to believe that if you’ve read the book, that deal is not surprising to you.

You lay out the case for why Disney would be rapacious … why Disney would want more, because they’re doing it really well. Beyond the fact that if this deal goes through that this gives Disney the “Fantastic Four” and “X-Men” franchises.

“Avatar.”

What other impact does it have on the movie business? It just sort of accelerates the trend we’re talking about?

Yeah, I mean, it’s two things. It takes us towards the streaming age. I think, obviously, the ultimate motivation now for everything Disney does now these days is to compete with Netflix. That’s where they’re heading, and they’re also gonna take control of Hulu, so they’ll have three streaming platforms.

Maybe.

Maybe? You think not?

There’s the thesis, right, that maybe this is a chip that they give to Comcast.

Yes, that is possible, depending on everything going on with Sky and everything, but certainly Disney wants to take over Hulu.

That is what they say publicly.

Okay. Fair enough, yes.

And may well believe.

I do believe that. And they’ll have their own Disney streaming service they’re launching, and they have ESPN, and they know they need to compete aggressively with Netflix and go directly to consumers. The Fox deal gives them Hulu, gives them more content. Disney has really shrunk the amount of content they create significantly, which has worked great for them in the movie theater model.

Online you need a little bit more. They’re not gonna produce the 700 pieces a year that Netflix is doing right now, but they need more. They wanna have more brands, because Disney’s all about brands, and after they get “Avatar” they get “X-Men.” They’re getting Fox Searchlight, which is ironic, because Bob Iger shut down Miramax, but I think that’s a business that pairs well with Hulu, should they hold on to it. Hulu’s sort of their adult streaming service, and Fox Searchlight makes movies for adults, but what you are gonna see, though, no matter what they keep from Fox, Fox is gonna be shrunk down, if not ultimately abandoned.

We’re moving to an age of fewer studios, which is what you see in any business when a business is kind of old and new competition comes at them aggressively, then the older businesses start consolidating. They have to do that. They need the resources to compete, and because there’s not as much money to be made in the old moviemaking model, so the old studios have to consolidate in order to challenge Netflix and Amazon, and soon Apple.

Up until the Disney-Fox deal, and you say this in your book, though the conventional wisdom is that the idea that you’re gonna see the movie in the theater, and you’re gonna have to wait many months to see it at home, that’s going away, because Netflix, because Amazon, because by the way, the studios wanna stop this. They wanna figure out some way that you can watch the movie relatively quickly at home. Shorten that window.

Yeah.

Now it seems like, because Disney’s buying Fox, Disney was the one studio that didn’t wanna do this, because they’ve got a model that works really well, that momentum has stopped. I asked Kevin Mayer about this onstage, and he says, “Yeah, this model works great for us. We’re gonna keep doing it.” So do you think we’re gonna go several more years where you’re gonna have to learn to wait many months to see “Black Panther”?

I do think that’s on hold. But the Disney-Fox deal takes two studios out of the equation who wanna do that, and I think Warner Bros. certainly feels like they can’t be in the lead on this, because they’re trying to get bought by AT&T, and something like this is disruptive or might help the government’s case against them, so I think the idea of movies coming to home sooner is on hold. Although, ultimately, it still seems inevitable that window is going to shrink.

What I do think could happen sooner that’s interesting is now that everybody’s pushing towards streaming, you’re gonna see as soon as a movie’s available to watch at home: Right now it’s on DVD and VOD for a few months before it goes to pay TV, HBO or Netflix. That’s gonna start to shrink. I think you’re gonna start to see the movies get on your streaming / pay TV platform, HBO, essentially a streaming platform now, Netflix or the new service Disney’s launching. I wouldn’t be surprised if a movie’s only available on DVD and VOD for a few weeks before it’s available to stream on your subscription service right away.

Because the idea that you’re gonna buy a physical or even digital copy of something, that era’s gone.

That era’s going away.

That era’s left in music, right. Everyone is now … understands that you consume something by paying a recurring subscription fee and streaming it whenever you want.

Right, sure. Absolutely right. That is what consumers like now. It’s what they’re used to, especially younger consumers, and then obviously Disney as they launch the streaming service, wants to make it really appealing. Well, one way to make it appealing is this is the way, maybe this is the only way you can watch a Disney movie at home. Or it’s a way you can watch it at home right away.

And if you’re a studio, that’s sad, because you’ve lost DVD sales and you’re losing with EST, right. That’s buying through iTunes, a digital download. You say, “Well, yes, but now you’re gonna get this monthly recurring fee.” Ten, 15 bucks, whatever your share of that is, and you’re gonna get that all year long, no matter what you give people. So you’re better off in the end.

You’ve acquired a consumer, right, as they say, and you’ve got that recurring revenue, and now you’re starting to get data on that consumer. You know who they are. You know what they like. It’s helpful for marketing. It’s helpful even thinking about what you should make next. That is clearly more valuable, is to own a consumer than to sell them a one-off piece of content.

Back to Amazon and Netflix, Amazon specifically. Again, terms of shift, right? Roy Price, who was running Amazon Studios is out, as of last fall.

Yep.

And at the same time, Amazon said, “You know this whole thing where we’re doing ‘Transparent’ and we win awards? That’s great. We need giant blockbusters now, and that’s where we’re gonna spend our money.” As you point out in the book, Amazon had carved out its niche as “we’re the giant conglomerate that supports indie filmmakers.” Does that go away as well? They haven’t been explicit about that.

They haven’t been explicit about it in film. And so in TV, they’re making that switch fast. They wanna have their “Game of Thrones,” as they say.

All the quirky comedies, out the window.

Yep, those are gone. They’re not buying those anymore.

We want really big hits.

They spent something like more than $ 250 million just for the rights to do a “Lord of the Rings” show. By the way, a “Lord of the Rings” show for which they can’t use any of the characters who were in the films.

Right.

So, what’s it gonna be?

By the way, that’s gonna be a half billion, right, by the time they’re done actually making these films?

Yeah, by the time they’re making it and everything, absolutely. Yeah, massive investment. So in TV they’re making that switch.

In film, they haven’t yet, and they’re slowly starting to do some slightly bigger films. They’re partnering with studios. They’re partnering with Warner Bros. on … I’m forgetting the name, but on an adaptation of a book that might be a $ 40 or $ 50 million movie, so they’re starting to move in that direction, but they just signed the deal with Alexander Payne, who’s an indie filmmaker. That’s definitely the part of the film business that they have latched on to. It’s something that differentiates them and I think gets them more affluent consumers who will buy a lot of stuff on Amazon, which is of course their most important goal.

Bringing this back to Sony. You decide, “Hey, I’m gonna root through the Sony hack emails, as well.” Did you think, “I don’t know. I don’t know if I wanna make a book about using stolen emails.” Again, you talk about it in the introduction. This book is based on stolen emails. Did it take you a while to get comfortable with that idea?

I think, actually, it was more once I started doing it that I started to become uncomfortable. At first, I felt fine, and like other people, as soon as the hack happened I’d gone through to find some of the juiciest.

Did you google yourself?

Of course.

Yeah.

Of course, I searched myself, and … Am I allowed to curse on this podcast?

Yeah, yeah.

Okay, good.

Fuck yeah.

So I found … I searched for Ben Fritz and I found this time I wrote an article about Amy Pascal that she really didn’t like, and another executive who works for Warner Bros. was like, “Don’t worry about him. Fuck Ben Fritz.”

That’s gotta be very exciting.

It was, yeah. The fact that studio executives are talking about how much they fucking hate me, that felt great.

But yeah, going into it, I felt like this is such great material. This is gonna be … I felt good about it. And when I sold the book proposal, and I started, okay, now I have to read every single one. Find what’s interesting and relevant. The way I did it I was like, “Okay. Right now I’m reading Amy Pascal’s emails. Then I’m gonna read Michael Lynton’s emails.” So there’d be a few months where I’m just living in her world and almost getting in her head, and that started to feel uncomfortable.

Did you tell them, “Hey, I’m reading every single email.”

Yeah, I told them as soon as the book proposal was out. Ironically, or let’s say poetic justice for me, the book proposal leaked before I sold it, so the Hollywood Reporter got their hands on it, so I called Amy and Michael and said, “You’re gonna read about this. I’m doing this. I’m gonna do it as respectfully as I can, but just want you to know.” So yeah, there were times I was …

At that point, everyone had rummaged through their underwear drawer, right?

Yes.

So did they feel any differently about it coming out in book form as opposed to 40 different stories?

At the time, they seemed … they were not pleased, but they were like, “Well, we know you.” I told them I’m not writing anything about your underwear, your Amazon orders, about your kids. I’m not gonna write about any of that stuff. I promise you. They seemed sort of like … they were resigned to it, and they seemed okay with it.

I would say, as the process went on, they both and other people at Sony went back and forth, and they’re like, “I’m okay with this,” or, “Oh my god. This is a nightmare.” But I did my best to … I did it by fact-checking with them. I let them know everything that’s gonna be in the book, so at minimum they couldn’t accuse me of surprising them.

Have you heard from them since?

I have … Well, I guess what I can say is that I have presented everything to them to make sure they wouldn’t be surprised by what would be published, and any responses they may have given to me they asked, I think, they would not be for public consumption.

Again, it’s intimate, but it’s not leering, right?

Absolutely.

Yes, Amy Pascal’s getting a mammogram and she’s jotting down emails, but you’re not making fun of the fact that she’s getting a mammogram. She’s trying to save a movie.

Right, right. I mean, you can’t … this is their personality, because they both bring their personalities to their jobs, and you can’t understand how they do their job without knowing that Michael is this very cool customer who comes from a background of great privilege, and was a bit disengaged, let’s say, from the movie business. It could’ve been any business for him. And Amy is really neurotic and really passionate about movies, and she’s up writing almost incomprehensible emails at 1:00 am that are 5,000 words to her subordinates all the time.

So you get to know them in that sense, but there’s nothing about their purely personal lives, their own personal business, especially nothing about their families. I will say while I was researching it, anytime I started reading an email and I was like, “This is clearly personal,” especially if it involved their family, I just stopped reading it and went on to the next one.

You write about the movie business. You’ve done it for a long time. You like movies, right?

Yes, I do.

Like a lot of people who cover this business.

Yes.

After a deep dive of several years into this book, are you hopeful about movies, or are you resigned to the future of movies?

I am hopeful. I would say, after I was mostly done with the manuscript I felt a little depressed, and then when I sat back to write the conclusion, and I especially I thought more about the streaming platforms, I feel I’d say, maybe two-thirds better and one-third worse, and the two-thirds better is that what any fan of movies really should want is for great movies to be made, for great content to be made, and the digital companies are creating more great visual content than ever before, and some of it is pure movies, and then some of it is a limited series, and some of it is a TV season, but it’s only eight episodes, and you start to say, “What is the difference?”

If you’re watching it at home on your TV or your iPad, what’s the difference between a movie or a limited series or a short TV season? It all starts to blur. And a lot of TV shows now are from people who used to be quote-unquote filmmakers, and are ideas in the past they would’ve brought to a studio to make into a film.

So you’re gonna get amazing stuff delivered to you at home in different lengths, and you can decide if you wanna call it a movie or a TV show or webisode.

Yes.

Seems like, though, the idea that you’re gonna go to the movie theater and see “The Social Network,” that’s gone and it’s not coming back. That if you’re gonna go to the movie theater, it’s generally gonna be to go see a Marvel movie or something like that, and that you’ll have some anomalies like the “Get Outs” of the world or, again, maybe Jason Blum will make other horror movies that you’ll go. There’ll be some weird anomalies.

Yeah.

Seems like the idea of going to a movie theater and seeing “Lady Bird” in a couple years will just be gone.

Yep, that’s disappearing, and that’s …

And how do you feel about that?

I have mixed feeling about that, right? On the one hand, if more “Lady Birds” are made, and no matter how they’re made, no matter where you watch it, that seems like a great thing. But what’s missing, what we were talking about earlier, this idea that we’re all seeing it together at the same time. It’s part of the cultural conversation. It’s an event that impacts our culture that is lessening and will go away, and that I think is a shame.

When we’re all just watching things on our digital queue and getting around to it when we get around to it, and you and I are not watching the same things at all, and if we are it’s certainly not at the same time, that lessens the ability, I think, of art to impact our culture, and that is something movies have done really successfully for the past century, and that is a bummer.

And if you’re Netflix or someone like that, you say, “You’re just complaining because you listen to radio plays, and things evolve, and things change, and by the way, we can’t tell you, but lots of people watched ‘Orange Is the New Black.’”

Mm-hmm.

“And they were having a shared experience. We just weren’t talking about it that way.” You don’t buy it.

I don’t. I mean, I think it’s evident. I mean, it’s evident that it’s not impacting our culture in the same way. Netflix’s whole business model is we have something for everybody, not we all are watching the same thing at the same time. That’s definitely their model. I believe them that people are watching it, but I don’t believe that 99 percent of the content Netflix is producing is really impactful on our culture, and especially their movies. That is undeniable, and if they try to argue against that, I think it’d be laughable, but they have yet to produce a movie that has had any significant impact on American culture.

We got you all whipped up. That’s a good way to leave the interview.

Yeah.

And promote your book in your words. Go buy the …

Please go buy “The Big Picture …”

There you go.

“The Fight for the Future of Movies” by the really handsome author Ben Fritz, and if you’re someone who has wondered why are there so many superhero movies and sequels and remakes and spinoffs at the multiplex, why are there so few interesting original films for adults, this book explains why that happened, how we got here and what the future of movies may be as all the digital companies are moving in.

Sold. I would buy it. Except I’ve already read it. You guys will enjoy this if you’ve listened to this podcast. If you’ve gotten all the way through this podcast, you will love this book. Go buy the book. Thanks, Ben, for joining us.

Thank you so much, Peter.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Chris Kirchhoff, formerly of the Pentagon’s Silicon Valley office, on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Flying cars could be in our future.

“I’m from the government, I’m here to help.”

On this episode of Recode Decode, hosted by Kara Swisher, Christopher Kirchhoff, a former partner at DIUx, the Pentagon’s Silicon Valley office, talks about how the Defense Department is trying to be smarter about technology.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Kara Swisher: I’m Kara Swisher, executive editor of Recode. You may know me as the general in charge of the Militia Etherege, but in my spare time, I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in.

Today in the red chair is Chris Kirchhoff, a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental. What a name. It funds private companies in exchange for commercial products that can solve national defense problems. He’s also a visiting technologist at Harvard University’s Institute of Politics. Chris, welcome to Recode Decode.

Chris Kirchhoff: Thank you.

When I met you, you were working for Ash Carter. Is that correct?

I was.

Explain this DIUx because I think it’s really interesting. The CIA has an innovation unit here, all kinds of government agencies do, but Ash was a real technophile.

You have to give him credit for his vision. Back in …

He’s defense secretary under President Obama.

He was, but in 2001, he was merely Professor Ash Carter at the Kennedy School of Government, and he wrote an article that said the rate at which commercial R&D is growing is quickly going to surpass what the federal government, the Defense Department, spends on R&D. And so, less than a generation from now, the Defense Department is going to have a real problem. It’s going to be out of touch unless it pivots to private R&D.

He wrote that article in 2001. Of course, fast-forward, and 2015 he becomes secretary of defense and one of his first initiatives is essentially making that pivot happen. So that’s where myself and three other partners get launched out here to Silicon Valley.

So explain how you got here, because we had Ash on the show when he was defense secretary. It was a great show. And he had some really interesting stances on a lot of things. Encryption, he parted ways with President Obama on that issue, all kinds of issues.

But what … how did you get to do that? And talk a little bit more about the background of getting it out … hadn’t been out here, which has been that defense has been very involved with tech but in a different way.

This is peculiar history where Silicon Valley and the Pentagon have been tied together in lots of ways for a very long time.

Yeah. The internet, for example.

Right. Going back to Stanford in the ’60s, actually, there is this incredible deep history out here of federal funded innovation that has really helped commercial firms flourish. But that, interestingly enough, has died out a bit. There’s definitely been a gap, particularly in the last 15 years, a gap that we were in part designed to fill.

What was your background?

Yes, I was minding my own business working as a national security aide in Washington. I was going to Security Council at the time and I had known Ash.

That’s not a small thing.

Yeah.

What were you doing there?

I was the director of strategic planning. So I was in charge of the office at the NSC that is supposed to look into the future and worry about what you can afford next.

Okay. How did you get the skills to acquire to do that job?

Crystal balls. No, I studied technology policy in college and then I got my PhD and then started off in Washington and national security. It turns out there’s a whole lot of technology challenges in national security. I ended up working quite extensively for all the years of the Obama administration on different tech issues.

Through that I had a chance to work for the chairman of the Joint Chiefs of Staff and worked very closely with Ash Carter before he became secretary, and as a result, when Ash thought about forming this office, he realized that he would need a combination of people to help run it, that the office has to of course know Silicon Valley, you would need to know Washington and the military. That’s an awful lot to ask of one person. So he decided to create a partnership through me and together with three other people with very different skills. I was sort of the Washington guy sent out.

Right.

This is actually a problem, because at the time I had five suits and one pair of jeans, so I had to go buy a bunch of jeans. But I moved out here a couple of years ago.

So, what was your charge? You had studied just tech policy. What were the challenges you were looking at at the National Security Council? Give examples for us.

Sure.

This is intelligence on our challenges we face for the government.

The National Security Council is a fascinating place to work, first of all, but 90 percent of the folks there are worried about what’s on fire today or what’s gonna be on fire tomorrow. That of course is appropriate and necessary. So knowing that they decided to create a small office that was trying to figure out what would be on fire five years from now, that office has kept on going. In fact, the person who took my desk, believe it or not, was the one who wrote the deep state banker memo and then got fired.

Yeah, thanks for that.

So now I know my …

Was there a deep state?

Yeah.

Did you find one in the drawer?

I actually I got a deep state sweatshirt made.

Okay, good.

And I was wearing it out here in Silicon Valley.

Who thinks of these things? Anyway, so you were there at the NSC … and what were you doing? What were you looking at? Like, what’s going on, whatever crisis had happened at that time?

Yes, I was looking actually at a technology … Tech is throwing national security a huge curveball right now because you have all the scary things that we all know about — missiles and nuclear technology from other nations — but then you have other kinds of commercial technology coming online.

So you have really cheap microelectronics, those microelectronic power drones. People can put grenades on drones. There’s all kinds of examples of emerging technology primarily coming out of the startup world, coming from Silicon Valley, in essence. Now, there’s a huge opportunity to a lot of this technology from a national homeland security standpoint, but there’s also a huge risk.

Right.

So we looked quite a bit at that topic.

Okay, what about the Russian involvement in the elections? Was that something you all weren’t paying attention to?

You know, one of the people who was supposed to speak at my White House farewell in August of 2016, couldn’t make it because she had to go to a very important meeting, which I later find out it was on that topic.

On that topic. Right.

So there were definitely a small number of people that were working on that.

So, you were there at the NSC and then you were dragged out here, essentially.

No, it was fantastic. I threw my golden retriever in the back of the car, drove over the Potomac, threw my BlackBerry out the window and came out to the land of, you know …

You do have BlackBerrys still there? Only place that still has Blackberrys, Washington, D.C.

What was your idea to come out here? Because again, a lot of agencies have representation here in Silicon Valley and opened up offices.

They do. I mean, it’s pretty small, though, to be honest with you. So In-Q-Tel is a strategic investment firm that you referenced earlier that works for the intelligence community. Then you have a couple of other representatives running around, but the playing field is really pretty open. There’s not too many people here that ingest a lot of technology and get it working in the federal government. We wanted to come out here, actually spend money, actually buy technology, pilot it, and then if it worked, use it at scale in the department.

Right, and back in the department, DARPA is doing that too, correct?

Yes. DARPA is one of the neatest parts of the federal government. It was a privilege to …

The D … Defense, what is it?

Advanced Research Projects Agency, we have to have acronyms. We’re DIUx and they’re DARPA.

DARPA has a very unique mission, which is to do really risky moonshot-style R&D. So if they’re trying it …

Like Mach 10 planes and things like that.

Right. It probably won’t work, but if it works it’ll be amazing. So they invented little things like the internet and the Stealth and all the sensors that made precision warfare work. That’s DARPA.

DIUx had a very different mission, which is to say there are some awesome off-the-shelf technologies being produced today, whether it’s a cybersecurity software suite, whether it’s a robotic ship, whether it’s a drone, whether it’s a new kind of data from commercial satellite, and you can use that today. You don’t have to do anything further to develop it. So our office had a very distinct mission from DARPA, which is to buy technology that’s available right away.

And when you talk about buy, what was that? How much money did you have to do this?

Well, I’m proud to announce that the office has just crossed the billion dollar mark in just under two years of making investments in tech.

This is already making investments, a billion dollars in investments.

Right. This is not making investments in the Silicon Valley venture capital way of buying equity, this is actually buying technology from companies, piloting it. And then there’s a really neat superpower the office has that Congress gave the department, which said if you do a technology pilot and you buy it a certain way you can immediately — and it works — you can immediately allow anyone in the department to buy that technology and scale them.

Without having to go through …

Without having to re-compete. Which is like … this is like the Holy Grail of federal acquisition and we’re privileged to be able to use them.

Give me examples of what … you get out here and what are you … how do you introduce yourself? Again, Silicon Valley doesn’t do a lot of business. It does defense business but not as much as you might imagine.

Yeah, no. I mean, it doesn’t do business with the government really at all.

There’s always people around, the Beltway Bandits.

And for good reason. So, if you’re a startup, your business plan says there’s a thing called …

Your drone startups.

Right. There’s a $ 25 trillion dollar consumer technology market and my tech is going to sell great there. If you go to an investor and you say there’s this teeny federal market, they have to file a lot of paperwork to get into and they don’t tell you for 18 months if you’re in or not. We want to focus on that, you know you don’t get funded.

Right.

So we knew that if we came out here with the regular tools the government uses to buy technology, we’d fail. We knew we had to find a different set of tools and we did. And because of those new tools, we can get a contract in about 30 days from start to finish, rather than 18 months.

Right. So, give me an example of once … you get out here and how do you introduce yourself? And then I wanna know what you invested.

Yeah, no. “I’m from the government, I’m here to help.”

“I’m here to buy your technology.” It feels like an episode that David Duchovny should be in. But what was … you kind of look like David Duchovny … anyway, how do you approach this world? Because it’s done in a very different way here.

Yeah, we were lucky to partner with a number of folks that are of the Valley and have a network of relationships here and have run startups and then CEOs at tech companies and have been executives and know their way around far better than I do. So we were able to use them to help us navigate the rollout here. We did that by first coming up with a particular challenge that we wanted to work on, somebody in the military would bring us a hard problem and they were doing it with an actual real-life mission that they figured commercial tech might be able to help with.

Give me an example.

Okay, so maritime surveillance. Right now, it’s really expensive to take airplanes and fly them with sensors looking, for instance, for boats carrying drugs. Wouldn’t it be amazing if, instead of flying 737s with military gear on them, we could take low-cost drones put the same surveillance packages on them, either on the surface of the ocean or in the air, and perform the same mission for much lower costs?

The group that brought that particular problem to us then caused us to go and do some market research to ask the question among the folks in the venture capital community and technologists we know. “Does anybody have tech that might be relevant to this problem? If so, put us in touch.” And then we ran a competition and we had an open bidding competition that anybody could enter. We found some firms had great tech. We were able to move forward in that particular case with the tech pilot.

So they can then sell that directly to the government.

Right, and there’s some additional benefits. I mean obviously the Department of Defense market is not a small one. So, particularly for a startup, there’s real opportunity there, but we provide some additional benefits too, that has been important for startups. We have things like test ranges that are really easy to get on. So if you’re a flying car company — and we work with a couple of those — we can get you on …

Get the flying cars, but go ahead.

You’re welcome in our test ranges in a hurry. That’s a great asset the department has.

Similarly, we can get your user feedback really quick. So it was a great example of one of the technologies that we deployed to Afghanistan with some troops, they were able to get the engineers some real criticism about what wasn’t working, which caused three iterations and the tech that made it much better that allowed the company …

What was the tech?

The tech actually was an amazing communications device. It was a mouthpiece, made by a company called Sonitus, and it allowed hands-free two-way communication using a bone conduction technology.

Near your ear.

Pretty wild. It vibrates your jawbone in such a way that causes the eardrum to vibrate. So imagine you’re on a patrol in Afghanistan or jumping off an airplane or a helicopter. There’s lots of noise. You’re having to grab a walkie-talkie or grab a microphone, which is not great because — or put headphones on to hear — because you’re wanting to keep track of your area, what’s going on around you. So this technology is just a little retainer-like thing that you clip onto your teeth, it proved to be really useful to troops on patrol.

Did they buy them then?

They did, actually.

So let’s get into the procurement issue because … and then we can get to more of the things the defense department needs going forward. The procurement is they design things very specifically. We always get story after story about that, that they design a toilet in a way … when there’s a commercial toilet industry that’s fantastic. They’ve designed in a certain way, they need to have it. It creates enormous costs. It’s out-of-control costs and all these Beltway Bandits take advantage of the situation and know how to work the system. And then there’s all the people that are revolving doors and military people into military contractors, blah, blah, blah. Because they buy everything, the military buy’s everything.

I know that’s certainly true.

Yeah.

But that comes from a particular history, right, which is if you’re going to, if you’re going to buy a nuclear submarine you can’t exactly go on Amazon.com and find 45 vendors.

No, not today. Maybe tomorrow.

Maybe tomorrow.

But they get it there faster.

They sure would. The result of that is the government system — particularly the defense acquisition rules — are set up to deal with companies where there’s often only one vendor. So that raises the question of how do you get a fair price for the taxpayer.

Right.

And the way that you get a fair price is your list out 45 pages of specifications for the toilet seat, and you say you must meet them in a certain cost, and that’s how we know we’re getting a fair deal for the taxpayer.

Right.

That works okay for a nuclear submarine. It doesn’t work as well for gear that’s much more commercially available. That’s where the problem exists, because we don’t need a drone company selling drones on Amazon.com today that could be used in military mission to fill out 65 pages of technical specifications where their drones should be.

How did you push back within the administration … the way that defense firms set up for that? Because you’ve got all these people. How do you create that situation? What’s the impetus for doing it?

Well, we got really lucky because in our corner we had Ash Carter, Secretary Ash Carter, who really believed in this mission and said, “I want you to find a way to do this, and if anybody tells you you can’t do it, you bring it to me.”

So we did the first thing you always do in these situations. We took a lot of lawyers to lunch and we discovered a very obscure provision of law, called other transaction authorities, that actually had to do this for advanced technology.

You get to work outside the federal acquisition rules quickly, you could just sit down with companies, you get to share information. It had everything we were looking for. Shockingly, very few people in the department were using it. Why? Well, it was obscure, not too many of the contracting officers or lawyers were trained in it. But after taking enough lawyers to lunch, we found a couple that were willing to work with us and agree that this would be a perfect fit.

What you were doing.

And we, as a result, became one of the first groups to use it widely and to use that special provision I referred to earlier, which allows you to go from pilot to production contract without re-competing.

Without re-competing.

When we get back we’re talking to Chris Kirchhoff. He was a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental, it’s been funding private companies to the tune of a billion dollars in exchange for commercial products that can solve the national defense problems. When we get back we’re going to talk more with Chris about what those problems are and what are some of the things that he got done when he was there.

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We’re here with Chris Kirchhoff, a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental. It has funded private companies in exchange for commercial products that solve national defense problems. He’s now a visiting technologist at Harvard University’s Institute of Politics.

Chris, talk a little bit about what … some of the things you were looking for when you got here. You mentioned a few, that problem in Afghanistan with an earpiece, essentially. Name some other things that you guys invested in, and how did you … how did you find … you did searches for them, all kinds of research to find them. Who did you focus on? The big companies? The Googles? Or did you go to the smaller startups in what you were looking for?

Yes, we actually started first by talking to different units in the military and asking them, “Hey, what’s your hardest problem these days? Is there something you think we could do to potentially help?”

And we went from there to doing market research and asking the question, “Is there tech somewhere out in the tech world that might be relevant?”

The big surprise, I think, is showing up in Silicon Valley you’d expect cybersecurity software, software in general, to be a huge part of your portfolio. But actually it turns out most of our deals, many more than software, has gone towards hardware, which I think reflects a huge shift in the Valley here towards hardware itself that was a real surprise.

So a couple examples of projects we’re really proud of. One actually, funny story. Eric Schmidt is the chairman of the Defense Innovation Board.

Yes, he is.

Took his band of innovators around the world.

Is he still that?

He is, yup.

Explain the Defense Innovation Board. We don’t need to explain Eric Schmidt.

Right, so the Defense Innovation Board is a group of folks from outside the department, each of whom have really deep expertise in an area of tech, and they travel together essentially as a bunch of consultants who visit different commands around the world and look at what they’re doing and then make suggestions for maybe how they could be doing things better.

And so the story here is I think representative of the kind of insights they’re able to have. They toured the air operation center in Qatar. So this is the war room, if you will, that’s prosecuting in the air war.

We have most of our forward bases are — correct? — in Qatar.

Right.

It’s in the news lately, recently.

Yes. So if you’re trying to prosecute an airstrike in Iraq, in Syria, this is the operation center that does that.

Eric noticed there are these three or four captains doodling on a giant white board and they were … they had all these numbers and symbols and he said, “Well, what on earth are you doing?” They said, “Oh, we’re planning tanker routes. It’s one of the hardest things to do is to get enough refueling tankers in the right orbit so that they can link up right with aircraft to refuel them as we’re getting ready to do airstrikes.”

Eric said, “Well, there’s a thing called software. Why are you still doing this manually?” And they said, “Oh, well we actually have software that does it but it’s awful, it doesn’t really work. So the three of us just take 60 man hours every day to do this. And it’s a real pain because if one thing changes that we’ve got to go do it all over again.”

The math. It’s like they’re in “Hidden Figures.”

Right. So Eric shook his head and said …

Recalculate those Moon trajectories.

And then he turned to DIUx and said, “All right, you guys fix this.” So we did. We sent some of our Air Force guys forward with iMacs. They set up shop. They actually knew how to code. In less than really three months they built a prototype app that allowed the same programming to occur automatically in seconds.

Who had built their first one?

A defense contractor had built their first one and there was a refresh scheduled and we met them, they said, “Don’t worry. The refresh is being worked on now. The initial version should come in 2020, 2021.” We were of course astonished at the length it time …

Timing, and of course we are.

Well … we were proud anyway to send a very small number of folks forward, and in just under $ 2 million.

The fact that they messed up Obamacare just makes … I had an argument about Obamacare with someone and they were like, I said, “Well, you know Tinder makes all these matches, it’s all matching, it was all you had to do was matching, Tinder makes all these matches every day, millions and millions of matches.” And they said, “Are you comparing Obamacare to Tinder?” And I said, “No, Tinder works.”

At the time it was funny, but it was … the expenses were enormously different between what government was charged in terms of software and what you could get almost off the shelf. There’s no shelf to get it off anymore, in fact. You know what I mean? It was a shocking inability to just use software on the fly.

But this is a great way that Eric and the innovation wars were able to contribute, but they know other ways of doing things.

Right.

And the process can not only make the U.S. military more effective, but save millions even billions of taxpayer money.

What I find shocking is that they haven’t updated this. That’s the part I don’t get, when businesses have … when consumers have … But, anyway that’s another rant I can make later.

So can you … you had the defense, the board, that Eric was on. Right?

Mm-hmm.

And then what you did was you would go around and do this all around the world?

Right. We work closely with the Innovation Board. Ash Carter also founded, there’s something called the Defense Digital Service, which is a bunch of programmers that work on IT issues.

Special ones, and every agency had those. They were moving those into every agency.

Well, that was the ambition at the end of the Obama administration, but as we know, science and technology in the current administration is a bit more challenged.

They aren’t there. It’s okay, you can say it, there’s nobody working there. But that was the goal is to put people in each agency to redo their IT.

And that actually brings up one of the bigger lessons that I’ve always taken away from my time both in government and out here, which is there is such extraordinary talent out here and there is no way we are going to get them to apply for a civil service job.

Right.

Right, and so we need to find some kind of way to get folks out here that are ready to take a year or two of public service and kind of like the Peace Corps, send them in.

Yeah, that’s what they’re trying to do. I was just with Chris Madell in Washington.

But let’s get back to the things you guys did. What else did … A billion dollars is a lot of money. That’s a pretty fair-sized VC fund, for example. What other things did you do?

Yeah, so we did a couple projects with flying cars, which I think really will be …

Explain that please.

The future of, yeah, military transportation. So right now we use helicopters to get around the world. An aircraft investigator once described to me, a helicopter is a million parts flying closely in formation.

That sounds great.

Wouldn’t it be great to move to an electric-powered vehicle with the same range that has one moving part, is silent. So we’re experimenting with different ways to deliver those troops …

Explain flying car. How do you conceive of it? Because I know Larry Page is working, a lot of people are working on flying cars. What does that mean?

Yes, I think there’s … personal air vehicles are of course, as people around here say, an industry of the future, that’s certainly true. So our question …

VL … vertical lift and take off.

Our question is how can we use this prototype technology to do military missions better? And it turns out there’s enormous opportunity both for delivering troops and special forces into denied areas. There’s also great possibilities for resupply, all of which right now are being carried out through much …

Through helicopters.

Right.

Right. Explain how it flies, if you’re talking about a flying car, how it’s different than a helicopter.

Yeah. Well, it’s a large drone, essentially, and because it’s electrically operated you have far fewer number of parts than you do in internal combustion engines, so your rate of engine failure is much lower. It’s fully autonomous. The range, actually, is pretty impressive on certain companies’ prototypes.

So what you have is actually something that’s very close to being operational, something that we can almost …

Just like a Tesla of the sky.

Exactly.

And does it look like a helicopter? Does it look like a …

It looks like something out of a “Batman” movie.

Right. Which one? I mean, it has four copter … they have a propeller, correct?

Yeah, there’s a few different designs. But yeah, they all look like a cross between something out of a “Batman” movie and “The Jetsons.”

Okay, and so you would fly those … fly these cars — and they’re not hovercrafts because that’s a whole different area of … people aren’t looking at that?

They can hover, right, which is useful for resupply. But yeah, they can do all kinds of things. So, it was our mission to ask the question if, gosh, you could potentially use these. And how ought we be planning to use this future technology?

Well, everyone put up their hand for that one, right? Like regular people want a flying car. Or everybody wants a flying car, presumably.

That’s true, but it’s much more likely that the military will start experimenting with them first.

Right. First. So, they would do them in missions, in resupply, in night missions, anywhere a helicopter goes, correct? Right now.

Right.

Right. Then it would not have to do a lot of maintenance and difficulty.

And you can do things, too, like to segregate a squad. Right now, we’ve put a lot of people typically in one or two helicopters. That’s not great for all kinds of obvious reasons, so wouldn’t it be nice to have 10 or 12 aerial vehicles carrying the same number of people that will not be nearly as vulnerable.

And easier to move, less dangerous to crash and things like that. All right. So how much money do you put into it that, and who’s making those?

Well, the same companies that you probably know about are making them, and this is again an example where the Department of Defense can actually play a role helping these companies on their commercial path.

It’s where they want them, right.

First of all, we have a small amount of money to spend and many of these companies are so capitalized … our money is peanuts, but we also have test ranges that they can go tomorrow and fly on.

Explain these test ranges. They have places where? In secret installations? Or where?

There are secret test ranges. Most of them are not, and a couple of them are actually very close to the Bay Area. So DIUx has set up a couple test ranges, one for flying cars, another actually for drones and anti-drone technology. Which is another real issue on the battlefield.

Right.

How can we stop a missle or other foreign adversaries from using drones to disrupt …

Right. Grenades, or look at us. They can do almost anything, correct? Poison or dispersing … and we could use the same, presumably. I’m sure we have.

Sure.

Yeah. So drones is another one. What other things did you find?

A lot of …

By the way, it was in a “Homeland” episode, they had a drone and then, all right, shot it down.

If only it all worked like “Homeland” or the movies.

Where Carrie saves everything.

I made some great investments in cybersecurity and cloud software, and some undersea and sea-surface technology.

Okay, explain the undersea.

Well, it turns out one of our great advantages militarily is our undersea technology. But at the same time there’s been a lot of progress made on the commercial front. Different kinds of submersibles and robots that can operate in new ways. So that’s another great example of startups out here that have developed a technology that is for a different purpose altogether, but actually it’s quite relevant for military missions.

So this is submersibles to spy … that’s what submersibles are for? Presumably.

You can do that. You can conduct ocean surveillance. You can monitor temperature conditions, which are really important for other Navy missions. There’s a whole bunch of things you can do. Again, these are … DIUx is after broad classes of technology that can be transformational in many ways.

Beyond the submarine.

Right.

Then give me one other. Outfits. Clothes. Exoskeletons.

Outfits. Yeah, sure. So we’re … right. Wearables, it turns out, is another great place that there’s a heck of a lot of innovation going on right now on the commercial market.

Imagine you’re on an infantry squad and you have a mission that involves getting miles away in tough conditions. Dehydration is actually one of your biggest enemies. Imagine having a wearable sensor that would allow the squad leader to know when one of his or her soldiers was in danger of dehydration. Little things like that can make an enormous difference.

That’s a great idea, yeah. And what about exoskeletons and things like that? Were you involved in those?

We have not done any exoskeletons, but that again is another great example …

Carrying and lifting.

Right.

They’re using them in factory lines now.

They certainly are. Which is a whole nother area of potential innovation, of what technology are we using in modern factories that could also be used in defense factories.

Right. Right. That are being used. Do you find the defense people very open to all this, what you are bringing to them? Or did they think there’s this weird group of guys out in Silicon Valley …

Yeah, it was, to be honest, pretty mixed. The Defense Department is …

Big.

Big. Really big, actually, and also very tradition bound for good reason, because it turns out that mistakes in war are costly and you remember them.

So we really did have, I think, a challenge to prove to people that commercial tech could actually be durable enough and good enough to perform — and in cases even outperform existing military technology.

Right. Then when you … what would you say your most successful thing is? When we get back we’re going to talk about what the big challenges are going forward. But what would you think your most successful investment in your tenure was?

To be honest, I think it’s just showing that it can be done.

Right. You can have an innovative, nimble group.

Right, so taking six Air Force programmers and a couple iMacs and for under $ 2 million in literally eight weeks coming up with an app that revolutionized how the air war is fought. That caused a lot of folks across the Air Force to notice and ask the question, “Well gosh, I have this problem too. Could you send some of your guys my way?” Strangely enough, cultural change, I think, is going to be our biggest lever, if you will.

Right. And now what happened in the Trump … do they even know you’re there? Did they know you were there? What was the … what happened after Mattis, I guess?

Yes. Secretary Mattis was very kind with his time. He comes from a background of playing an incredibly transformational role in the Marine Corps so he gets transformation, and he came out last summer and spent a day and a half here in Silicon Valley. I think he’s very enthusiastic about our mission. Sees the logic, sees fit and wants to grow.

And continues to support it.

Yup.

Continues to … how many partners are here now?

So, we are a couple … Those that started have just moved on and we’re in the process of putting a new leadership team in place.

And that will be the same amount of people doing these investments?

Roughly, and in the office we started with 12 and we’re now almost up to 70 or 75.

You’re located where? In your usual …

Yeah, headquarters is down in Mountain View on Moffett Field. We have a office in Boston, teeny office in Austin, Texas, then a small office also in the Pentagon.

Great. We’re here with Chris Kirchhoff, who just left the Defense Department or I guess Innovation Lab almost, in Silicon Valley, DIUx, which stands for Defense Innovation Unit Experimental. Who came up with that, Chris? Anyway, when we get back, we’re going to talk about where things are going in defense and what will be happening in the near and far future.

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We’re here with Christopher Kirchhoff. He’s a former partner at the Pentagon Silicon Valley Defense Office, DIUx, which stands for Defense Innovation Unit Experimental. How did you come up with that awful name? I like DIUx but the rest …

I know. Well, first of all, we had to have an acronym because if we didn’t have an acronym they would not start the office.

Cool.

We figured X was kind of cool, but I definitely wouldn’t turn to the Pentagon for some really …

Yeah, how about Wakanda? So now you’re a visiting — I’m gonna get to Wakanda — visiting technologist at Harvard University’s Institute of Politics. So let’s talk about where the challenges are that we face from a defense point of view going forward. I assume you look at, obviously — I’m joking about Wakanda, but I’m not — this idea of how we think about innovation, how we incorporate it into our defenses.

This doesn’t seem to be an administration that’s super interested in science and technology. That science and technology office is not staffed. It hasn’t been staffed. It was a new thing with President Obama, but the Office of Science and Technology has always been there for half a dozen administrations, I think. And it doesn’t … I don’t think it has a head yet, does it? It doesn’t. No, it does not. Which is like frightening in a lot of ways. So can you talk about what our challenges are now in the near term without science advisers at the White House?

Yes. I was really impressed …

I’m assuming the different agencies still are interested in science, some of them.

Yes. No, that’s certainly true. So the United States is in this peculiar predicament right. We’re 4 to 4.4 percent of the world’s population. We still command a quarter of global GDP. It’s why we have nice houses, nice big screen televisions, all that.

Our challenge going forward is our economic competitiveness. How on earth can we keep generating so much of the global economy with so few people? And if we’re going to be successful at this we’re going to have to make sure the leading part of our economy, the part of our economy that’s most dynamic, that tech sector really succeeds. The tech sector at the moment, if you haven’t noticed, is producing crazy, wild, disruptive technology and that technology will not be successful without the government clearing the road for it.

100 percent.

So what I worry about most now is whether that road can get cleared. Whether there are enough people out here in the tech sector talking to people in Washington about what needs to be done.

Which they’re not. Right. So talk about the areas. I mean, I’m assuming AI, robotics, automation, infrastructure, self-driving, all kinds of things like that.

Yeah.

Or is there more? I mean, cybersecurity.

No, it’s all these things and …

Non-hackable elections.

Wouldn’t that be nice? These things are all important, and one of the greatest challenges is just with people, because the people that tend to know the most about these technologies are not employed in Washington. They’re employed far away. That creates a challenge to begin with. How on earth do we get the people that know the most about the technology talking to the people that are in charge of writing regulations?

So let’s start with that. There was a big push by the Obama administration to get techies to come for short amounts of time and they fixed Obamacare, they fixed a lot of things, they moved in and fixed things. Now they’re really having a hard time recruiting anybody, correct?

They are, and that’s something I worry about a lot. We did this big review in the White House that looked across radical merchant technology.

This is Obama’s …

Right, and where would … It just completely turned upside down the mission of certain federal agencies and departments. The Department of Treasury, for instance, it regulates money.

Right.

Something kind of important, and it also turns out is the biggest bank for the government. It clears a lot of payments for federal agencies. So blockchain is going to be something that completely changes the Department of Treasury’s mission. So we asked the question, “Well, how many people are there today in the Department of Treasury that have enough expertise to participate in a peer conversation about blockchain?”

I would say zero, probably.

That was the answer, actually, and it’s not a surprise because the Department of Treasury doesn’t have a DARPA. They haven’t been recruiting for PhD cryptographers. But, it turns out they need to.

Yeah.

And desperately.

Well, they’ve got a Goldman Sachs banker running it who has a kind of unusual manner — I think we can be kind, that’s a kind way of putting it — who doesn’t seem interested in that. Correct? I mean that’s … is that where it comes from, the top in the Department of Treasury?

I think on the tech issues it has to come from the top because if you’re going to get people in the department you’re not through the usual means, right? Get them involved in the top of the policy conversations. You’re going to have to be the one that opens that door.

Right. And these are the departments, presumably, involved with regulating the blockchain. Which they won’t be able to regulate at some point because it’s unregulatable on some level of its being created by not them, or being monitored by not the government.

And you can just imagine if you were to walk across to each building in Washington and ask people there, “What do you do and how is it likely to change in the next five years based on what’s being invented in a garage somewhere?” Boy, there are some real challenges that we’re going to face going forward.

So Treasury, blockchain and what else? Let’s go through them. Blockchain …

I think blockchain and other technologies are …

And then cryptocurrency.

Right. That, of course, impacts the intelligence community’s mission. It also impacts, believe it or not, the development mission. Blockchain is going to revolutionize how a lot of development takes place, whether it’s land titles or new financial technologies to the developing world.

Similarly, the Department of State, there’s this thing called digital now that turns out it changes how we communicate. Almost every department or agency across the government is facing some real curveballs, and the curveballs are coming fast and most of them are not equipped with the kind of people or the kind offices …

Explain what challenge the Department of State faces.

Well, the Department of Defense is lucky because it does have places like DARPA that are part of it. That attracts top commercial talent, that are the best of what they do, and they can …

These are big challenges.

Right, they can look around the corner and say, “Hey boss, there’s this thing that you ought to know about called stealth technology.” Unfortunately, the Defense Department is one of a few parts of the government that has an advanced technology shop like that. And that’s because 30 years ago nobody thought advanced technology was relevant to, say, diplomacy, but it certainly is today. So I think we face a real transformational challenge of how do we re-engineer the State Department to have in it some technologists that can think about how diplomacy might be different going forward?

So how would you … what would they need? What are the issues they need to focus on?

Right. So a lot of the State Department’s mission is reporting and communicating. That, of course, has completely changed. But a lot of the State Department’s mission also is American values. It turns out, our values are actually bound up quite a bit in our technology, and our technology is the kind of mobile phone operating systems that we create and the kind of internet we advocate for.

These are all deeply technological areas, and again ask the question, how many of your scientists are there today working at State?

Zero.

The answer is small.

Small. And that’s everything … I mean, they operate around the world, has to have some technological element.

There’s this funny story. I think there’s something like 140 foreign governments that have a presence here in Silicon Valley. Until last year, the State Department didn’t have anybody here.

Who do they have here?

They had one person who I think got fired.

Oh, okay.

Or sent along, when the administration changed.

Right. Okay. That’s not good. Another department, name another one. Education. Oh, good God.

Yes, so education is not something I personally looked at, but I mean, there again … Look, ed tech, the revolution going on at ed tech. Does the Department of Education have a DARPA-like appendage that is imagining what the future of ed tech is?

No.

And how that will affect American education policy?

Right. So through every single department, and our government, they have to be thinking about … what about this idea that they were gonna … I mean, I know that Chris Liddell and Jared Kushner were pushing the Office of American Innovation. Pretty much everybody quit it. I think a lot of people that were on these different business councils have left over, I think it was Charlottesville.

How do you get Silicon Valley reengaged then with the government, or this government at least? You have a president who seems entirely uninterested in science and technology and in fact is hostile to it.

These are … the past months have not been kind to those who care deeply about this topic. But I think it’s just crucial to step back and notice that, as a nation, this is our future. This is the one thing we cannot afford to get wrong.

So why are we affording and getting it wrong?

I think a lot of people in Silicon Valley are still sort of pretending that what happens in Washington doesn’t really matter to them. And I think a lot of people in Washington just don’t have easy ways to get the knowledge they know they need.

How do they get … because it really is, you gotta convince people, tech people, to come there. These people have jobs everywhere and are easily available to them here and across the world, really. How do you entice them to come to government?

I’ll give you one great example we found. In the U.S. they have something called the Global Development Lab that’s all about technology innovation and global development.

This is where?

USA.

Okay.

It was run, actually, by a former Apple employee named Ann-mae Chun, and she, within that lab, had the operational innovation team that was the team design to get to “yes.” So it had people from the legal department, from the HR department, from the contracting department, and whatever problem was brought to that team, “Hey, how do we get this Silicon Valley executive in for a year? How can we do this contract faster?” They were given the charge of coming up with a way to do it.

So they actually hired a tech recruiter. Imagine that, the government hiring somebody who is an expert in recruiting technologists with skills.

I can’t believe we’re saying, “Imagine that.” It’s like 2018 at this point.

Right. I mean, you would think, right? But it turns out that the bulk of the government, of course, is governed by the Civil Service Act, whose history goes back to the age of the telegraph, it was designed originally to staff the Post Office. Great at providing general administration, not so great at bringing in tech skills for term tours.

Yet, despite that, every department agency generally has a couple hiring authorities in the books, that if leadership says, “Hey, go do this,” you can get people in.

So what do you imagine … because I see other governments moving very heavily into technology within the government sector. And I’m sure they’re not ever as perfect as any of them. They’re all large bureaucracies so you’re going to fall prey to that. What are the biggest issues that our country faces, do you think?

I think one of the … again, going back to the importance of people, you can sit around a table in Washington and not even know that technology is in the middle of the issue you’re trying to solve if you don’t have somebody around the table that can see it.

So if you don’t have a tech team … I mean, if you have a lawyer in the room and an economist in the room, everybody in Washington has got their lawyer and their economist. But if you don’t have your technologist, you don’t even know what you’re missing. So I think that’s the first and probably the most fundamental part of the solution.

And then of the issues, what do you think the most critical thing is that we have to focus in on?

I think we’re at a moment where technology is probably a part of almost every major issue in one way or another.

Terrorism.

I think you can’t any longer say, “Oh well, here are the four issues that technology is a part of and the 12 that aren’t,” and then divide your staff that way. And that’s part of the challenge. This is different than it was even 10 years ago.

So you have to have a technologist at every juncture of governing.

It’s totally ordinary to have a lawyer and an economist on your staff, in fact they have career paths that are set up to support that.

Right, but not for technologists. All right, so what are you doing at Harvard? I want to finish up. What are you studying?

I’m having a ton of fun 20 years after I was a freshman. I got involved in public policy. There’s a little corner of Harvard called the Institute of Politics, it’s a living memorial to JFK. I’m teaching a seminar on the topic of “Public Leadership in a Technological Age.” So whether you’re a computer science undergraduate or somebody studying government — or classics, for that matter — what ought you know about technology, about how it’s produced, about how it’s governed. You can be a future leader on this issue and get ready to join the conversation after you graduate.

And what is your one main thing you tell them? That you have to …

Yeah. Right. Ask not what you … no. So, we get together and we host a bunch of speakers from tech, also from tech policy in Washington. We’re looking for ways to get internships through so they can actually go experience what tech is. And what we tell them is that there definitely is a role, whatever educational track you’re on, to be able to learn more. Whether you’re a computer scientist that … Harvard just debuted an ethics and computer science course this semester. Something that turns out was kind of relevant.

Yes, very.

But if you look at the curriculum on the whole, it’s certainly not built with the idea in mind that we’re in the business of producing leaders that have to be able to grapple with technology policy.

Absolutely. All right, Chris, this has been really interesting. If you … if I had to worry about one thing — I really do like the idea of a flying car — but if I had to worry about one thing and I know you’re not, you don’t want to pick one. What is the thing that you think that government needs to focus most strongly on in the tech area?

Sure. Well, I had a chance to work on Ebola, on the White House Ebola task force.

That’s not coming back, is it?

Well, the thing is we’re kind of changing the world in the wrong way, right? So we’re deforesting, we’re … roads and air travel everywhere and when we deforest, we create these things that scientists call ecosystems where species clump together that normally don’t and it turns out that’s basically creating the world into a giant petri dish for emerging infectious disease.

So I actually worry the most, to be honest, about pandemics, I’m kind of in the Bill Gates camp on that one, when it comes to security.

I’m with you on pandemics, you know I’m obsessed with pandemics.

Do you have any Purell in the office? We should probably …

I have a lot.

Good.

I’m a pandemic obsesser.

Thank you so much, this has been very depressing. But we do need technologists in government and this administration really needs to focus on it, but I’m not … I have to say, I’m not very hopeful about that at this point. But we can always hope things can change.

Anyway, this had been Chris Kirchhoff. He’s a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental, which is still operating here. It funds private companies in exchange for commercial products that can solve national defense problems. Thank you, Chris, for coming.

Thanks for having me.

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Recode Daily: Amazon stock rebounds — as it always does — after Trump’s early-morning tweet attack

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Plus, Facebook’s bad month keeps getting worse, the subject of the “Serial” podcast is getting a new trial, and the finest eggs tech money can buy.

Trump took to Twitter to attack Amazon, which he accused of paying “little or no taxes.” His tweet sent Amazon’s stock down about 4 percent, but it rebounded within a few hours, as it always does after a Trump tweet makes it fall. [Michael Sheetz / CNBC]

[Want to get the Recode Daily in your inbox? Subscribe here.]

Facebook’s bad month keeps getting worse — this time because of a leaked internal memo by one of the company’s top executives that suggests, among other things, that Facebook’s mission to connect people is more important than user safety. Yesterday, Facebook outlined a more detailed plan to fight election interference in the 2018 midterms. [Kurt Wagner / Recode]

Snap is undergoing its third round of layoffs this year, cutting around 100 more people, most of them in sales. The company, which went public just over a year ago, restructured its content teams in January and laid off around 120 engineers earlier this month. [Kurt Wagner / Recode]

What do Donald Trump, the Crown Prince of Saudi Arabia and the owner of the National Enquirer have to do with each other? [New York Times]

The subject of the “Serial” podcast, Adnan Syed, has been granted a new trial in the case of the murder of his high school classmate Hae Min Lee. Syed was convicted in 2000 and has been in prison for 19 years; his case attracted international attention in 2014 when it was featured on the groundbreaking podcast. [Kevin Rector and Justin Fenton / The Baltimore Sun]

If the timeline Waymo rolled out this week is correct, autonomous vehicles will transform urban life by 2020. That’s the company’s way of saying, “Get ready, this is really happening.” This is autonomous driving at scale, and not in five years or 10 years or 50 years, but in two years or less. Meanwhile, carmakers Daimler and BMW are combining their car-sharing businesses into a joint venture to better compete with Silicon Valley companies out to upend the traditional automotive industry. [Alexis C. Madrigal / The Atlantic]

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Recode and MSNBC will interview Apple CEO Tim Cook on our latest ‘Revolution’ TV special

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Kara Swisher and Chris Hayes will interview Cook from Chicago.

Recode and MSNBC are teaming up again for the next episode in our “Revolution” series on tech and the future of work. Recode’s Kara Swisher and MSNBC’s Chris Hayes will interview Apple CEO Tim Cook for the special, “Revolution: Apple Changing the World,” in Chicago. The show is scheduled to premiere on Friday, April 6 at 8 pm ET / 5 pm PT on MSNBC.

Will you be in Chicago on Wednesday, March 28? That’s when we are taping this event and you can register here to be in the audience.

Our “Revolution” special will dive into Apple’s plans to innovate in the classroom and beyond. Swisher and Hayes will talk to Cook about technology’s role in powering learning for the next generation of students and workers, including how to teach code across the U.S. and also how it impacts the future of job creation. The event will take place at Chicago’s Lane Tech College Prep High School.

While we’re not livestreaming the interview taping on March 28, you can follow Recode’s Twitter account for live coverage of the show (follow #RevolutionCHI to join the conversation); Instagram for behind-the-scenes interviews with guests; and our website for breaking news stories from the interview.

The “Revolution” series from MSNBC and Recode features townhall-style conversations with the audience examining the impact of technology on many aspects of the world today including business, politics, science, health, jobs, climate, culture, education and more. The series includes one-on-one interviews and panel discussions with a range of thought leaders from corporate executives, entrepreneurs and venture capitalists to journalists, government officials and academics.

Reminder, tune in to MSNBC on Friday, April 6 at 8 pm ET / 5 pm PT to watch the full interview.

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Full transcript: Nell Scovell talks David Letterman, Sheryl Sandberg and ‘The Simpsons’ on Recode Media

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The cover of “Just the Funny Parts” by Nell Scovell

“No one wants a witch hunt, but we do want a fair and judicious review of witches.”

On this episode of Recode Media with Peter Kafka, writer Nell Scovell comes by the studio to talk with Kafka about her new book, “Just the Funny Parts … And a Few Hard Truths About Sneaking Into the Hollywood Boys’ Club.” You can read some highlights from the interview here or listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Below, you’ll also find a lightly edited transcript of the full episode.


Peter Kafka: This is Recode Media with Peter Kafka. That is me. I am part of the Vox Media Podcast Network. I’m here at Vox Media headquarters in New York City. This is the part where I ask you to tell a friend about this show. See how quick that was? Painless. What do you think, Nell?

Nell Scovell: Oh, I’m at Vox Media too.

Nell also agrees that she is at Vox Media. That is the voice of Nell Scovell. Did I pronounce it correctly?

You did.

Congratulations to me. She is a TV writer. She is a book writer. She wrote a book called “Just the Funny Parts.” She also wrote with Sheryl Sandberg a book called “Lean In,” many of you have heard of. Welcome, Nell.

Oh, nice to be here.

Thanks for joining me. This has been on my list for many months, I’m very psyched to read this. Was very psyched to read this. I’m very psyched to talk to you. What’s the best way to describe this book? It’s a mashup of genres, right?

It is. It’s a memoir, but it also includes a lot of information about writing, about…

Yeah, there’s some how-to, right?

How-to.

How to make a “Simpsons” script.

Yes, how to write a joke. How to make a “Simpsons” script, but it’s not just about Hollywood. I think it’s about everywhere we work.

And then specifically, right? And you point this out here, right? This is about “sneaking into the Hollywood boys club.” And you can expand that and say this is about social… Being a woman in a male-dominated profession, there are many of those. It seems like the timing is fortuitous for this book as well?

Well, except the problems been around for so long.

I was thinking of a polite way of putting it. The public discussion around the problem is good.

Yes.

Was there an uncomfortable moment in the last six months you thought this is bad for the world, but it’s good for me and my book?

No, I did tell a #MeToo story in my book. And when I turned it into the publishers in the summer I felt scared and alone. And now I don’t feel that way anymore. And in fact, I went from being sort of afraid to being like, ‘I can’t wait til my books out and I lend my voice to this chorus.’ We have a club. We meet in the football stadium.

I was wondering if we’re gonna discuss the #MeToo incident in the book. It’s funny that we call it a “#MeToo incident.” It’s a weird … Cause it’s describing men’s behavior, right?

Right. It’s also one of those things. I remember after “Lean In” came out, someone said to me, “What did we say before Lean In? And I said “Well, I guess we didn’t talk about women’s ambition.” And I think it’s a little of the same with #MeToo. There wasn’t a term, because we didn’t talk about it.

There’s gossip about a particular executive in media. It’s going through right now. People are saying this person has a “#MeToo problem.”

Yeah.

I thought well his problem allegedly is his behavior. It’s not a #MeToo behavior, but…

Right, right.

That’s a sidelight here. But back to that incident you described in the book. You identify a specific person. You call them out by name. Did you re-think any of that? Sort of as the Weinstein stuff was heating up. Did you wish, “Oh, maybe I should have included more information?” Or maybe … I don’t know. Did you rethink the context of it at all?

Well, I did go back in… I went back in between the first and second galley and actually did add a little bit to… I actually do mention Harvey Weinstein in the book. There was a survey last month where ninety-four percent of women said that they had been sexually harassed or abused by an older, more powerful person. And twenty-one percent said that included a forced sexual act. This is an ongoing problem. And one of the great things about being in entertainment, is you have access to the media. People pay attention to you. In my own case, I was pretty privileged. I didn’t need the job desperately. I had a great support system, so I came out of it not terribly scarred. But not everyone is that lucky, or that unlucky.

You have had a successful television career, and you’re a successful author, as well. Prior to publication of this book, you had also gained notice for writing about sexism within David Letterman’s writing staff. Nearly a full decade ago, 2009. Is that right?

Yeah.

How did writing that piece — which generated a ton of attention, which you also describe in the book — how did that change your career?

So in 2009, David Letterman goes on the air and admits, “I have sex with women I work with.” And it was a strange set of circumstances. He was being blackmailed.

Right, the context was, “I’ve been blackmailed.”

It was weird, because the context was he was the victim. And when he announced on air that he had sex with women he worked with, people laughed and applauded. It’s crazy. It’s on YouTube. You can look it up.

Cause the story was… Right? The headline was, David Letterman says he’s the victim of a blackmail plot. Which was…

Right. And that’s… It was a terrible thing, and he handled it beautifully. He also got a pass for the underlying behavior.

Right.

And no one wants a witch hunt, but we do want a fair and judicious review of witches. And I wrote a piece that talked about my own experiences. Cause believe me, it wasn’t a surprise to anyone who worked on that show when Dave made that announcement.

Right, you’re quite explicit in the story that you wrote for Vanity Fair that he was sleeping with female staff members.

Right. And not just him. You know, part of the issue is, when the leadership — you know, the fish stinks from the head down. When the leadership acts that way, it gives other people permission to act that way. And it was like being at the Court of Versailles. There were cliques and backstabbings. Which made it really hard, cause I just wanted to write jokes.

And so, how much time did you spend sorta prior to publishing that, thinking, “What will this do to my career?” Again, you were in the middle of a very active Hollywood career. Did you think, “There’s gonna be a consequence for me doing this?” Or did you think, “Maybe there’s an upside to me doing this?”

I had just gotten a job as Co-EP [Executive Producer] on “Warehouse 13,” which was an amazing show on the SyFy channel. And I really felt, cause I had worked there, that, and had this long career that I had standing to speak to this issue. And as my friend, Tom Palmer, would say, I don’t have “fuck you money,” but I do have “I don’t like your tone of voice money.”

Yeah.

But the big pivot in the article was, after a discussion of sexual harassment and sexual favoritism, to pivot to gender discrimination in the writer’s room. Because one of the things I had learned is that it has been years since there had been even one female writer at Letterman. And I’ll also add that in thirty-three years on the air, there was never a single person of color in that writer’s room.

So you write this. Again, you can see in the original Vanity Fair. You can see basically a longer version of that in the book as well. You should read them both. What happens to you after the publication of that story? Cause at the time it was a very big deal you wrote this.

I did worry that it might end my career, and it turned out to be one of the best things I’ve ever done in my life.

Because?

It was my truth, and I …

You feel better?

You feel better. You’ve been sitting on this information for a long time. You’re helping other people. The idea was never to help my career. And in fact, I thought it would do the opposite. It was to help other’s careers. Cause I got to be successful, but it was really hard. And it didn’t need to be that hard. And I watched too many people, women, drop out. Because it was that hard. And then there’s also all the people who never even tried, because it just didn’t seem doable.

So you think that helped them? Just seeing this in print online and on VanityFair.com was literally a good thing for those people?

Yeah.

And then it didn’t hurt your career. We’re sitting here talking.

Well, it did put me on a path to meeting Sheryl Sandberg. I think becoming an outspoken feminist. I’d always been one, but now I was out of the closet. It was hard in the room at “Warehouse 13.” Every now and then someone would say something sexist. And someone else would make a joke like, “Be careful, Nell’s gonna write an article about you.” And I would say, “Yeah, 19 years from now, you’re gonna be so sorry you said that.”

But there is a thing, right? This is even if you’re not writing exposés. If you are the minority representative in the room, right? You become…

Right, and I was the only woman in that room too.

And this happens to you frequently in your career, and you write about this. You become, you bear a lot of burdens. Even when people mean well, they end up sort of burdening you with all sorts of expectations. And in this case, the worry is, that is gonna define your career. You’re the woman who writes about being a woman who is a writer.

Well, it’s the fear, I think, that the woman is the spy who’s going to tell the tales at a school. Who’s judging you, silently. It was hard for me though. I don’t, I’m both an insider and an outsider.

As I was reading the book, I was thinking about the parallels between, just partly because of what I do, but also because some of the context that has come up in the last year about Susan Fowler writing about Uber and some of the same context.

Yeah. Oh, she’s a hero.

And you literally have the same anecdote at one point there, about you getting a shirt at Letterman that doesn’t fit you.

Oh, that’s right! That’s right.

And that’s kind of like, one of the core parts of her story, right? It’s the leather jackets, that don’t make them for women because why would you make leather jackets for women. Because there are so few of them. But I also think about this a lot. There is a… Even among well-meaning people, there’s a perception that, these nerds in Silicon Valley, and the nerds in the writing room — They’re nerds. So they’re sexist, but they’re fundamentally nerds. They don’t know how to talk to people. And you detail in great length about just what a tortured and unhappy person David Letterman is. Right, these crazy anecdotes about these people that hit him.

Right.

Do you think there’s something particular about these kind of workspaces that lead them to treating women poorly? Or do you think this happens at every workplace, and there’s no particular excuse for this kind of behavior?

Well, studies do show that in hierarchical structures, you do get more harassment. There’s more power concentrated at the top, which means there’s more abuse of power concentrated at the top. And every TV show is very much a hierarchy.

Cause it’s, and we can talk about this a bit more too. But it’s, TV is this thing that’s both collaborative, right? There’s a lot of people who work on a TV script, but generally there’s a person that everyone reports up to.

Right.

Who is a decision maker.

The showrunner, is that, is the title.

Right. But you don’t think there’s something particular about the nerddom of the TV writers room? Or the nerddom of a bunch of coders that explain some of their difficulty with women?

I think it’s an excuse, not an explanation. And I think if they’re over twenty-five and they’re still doing it, then they’re not paying attention. And then it’s willful. It’s a choice.

Yeah, I think it’s a choice that people, in some cases people weren’t aware they were making.

Right.

It’s harder in 2018 to say, “I’m not aware of that choice.”

That’s right. I mean, we’re not talking about people on the spectrum. But in general, that sort of, “I’m oblivious. I get to do whatever I want, and sorry I insulted you. Don’t you have a sense of humor?” It’s like, “Well … Actually I do, but you crossed the line there.”

You know, I tell this story in “Just the Funny Parts,” where we had a director who had an emergency appendectomy. And there was a discussion in the writer’s room, about how long it would take for him to recover. So, I’m the mother of two, and I rarely talk about my kids at work. I have this running gag when someone asks me if I have kids, I say, “Yes, but I’m blanking on their names right now.” But on this particular day, we’re talking about abdominal surgery, and I say, “You know, I had two C-sections and they weren’t that bad.” To which another colleague said, “You mean you’re still tight?” So I deadpanned, “Yes, that was the point of my story.” But that’s the sort of every day, offhand comment that you can expect.

Right, and I didn’t want to step into any of that, cause it’s a great anecdote and I had already read it. But it’s great.

He just got fired, by the way, from the WB.

I just got fired? Oh, he did?

Oh, he did.

Well, I guess that’s my thing. I can’t imagine that happening in a regular, a grown-up workplace. I can imagine it happening, I dunno. But I do think-

It’s not normal.

It’s not normal. I do think, “Oh, but is that the sort of thing where you’re supposed to be making jokes?” Not every joke is as funny as you think it is. Some jokes push the line, and maybe that joke pushed the line a little more. And do you have to allow more leeway in an environment like comedy writing, for instance, to allow yourself to occasionally cross the line. And do you have any, maybe sympathy is the wrong word. Empathy? For dudes who might not fully understand what they’re doing or saying? And this guy got fired? So apparently this was a reoccurring problem.

Oh, that was years and years, and millions of dollars later. And eighteen people had to come forward and say he had been inappropriate, for him to take a tumble. I think we need to spread around the discomfort more, because right now you have a select group that can really say anything they want in the room. And some of us have to look at our feet while they say those things. I was working on “The Muppets,” and some of the upper level guys working on the show had worked on Charlie Sheen’s show, “Anger Management.” And they would routinely refer to actresses as “dumb bitches.” Like, “Oh, and then the dumb bitch says…”

Right, and this isn’t 1975, this is a couple years ago.

No! This is two years ago.

So, don’t do that at work.

I know. And then it’s like, well I don’t want to say anything cause then, I’m no fun and I’m the school marm. And I don’t wanna be that. But it’s not fun to sit there an listen to women be referred to that way.

I’ve been trying to figure out an appropriate place to have an ad break in here. I didn’t want to do it after the c-section joke.

Let’s do it now.

We can do it after Charlie Sheen though, right?

Yeah.

It’s a deal. Okay, we’ll be right back with Nell Scovell.

[ad]

I’m back here with Nell Scovell, who’s not unhappy with me, right?

No.

You’re pleased? We’re good? We’re doing well?

We’re best friends.

We’re gonna get there. And if you like this conversation, by the way, I don’t normally do plugs for Kara Swisher, but we’re gonna do a live version of this with Kara sometime this spring. Sometime soon.

In April.

In April.

At the Commonwealth Club in San Francisco. I love Kara. She scares me a little though.

She’s not so scary. She takes the sunglasses off, she’s perfectly pleasant.

You have had an amazing career. Even without the David Letterman exposé, even without Sheryl Sandberg, and even without sort of this new chapter in your life. You were the first writer, period, at Spy magazine.

I was!

One of my all-time favorite magazines. You worked at Letterman, like you talked about. You’ve got a, on your book cover here, it lists many of the places you’ve worked at. There’s an appendix that lasts another three or four pages. You’ve been a working writer in Hollywood, which by definition is success. Is that a fair summary.

Well, how do you define success? Because there are people who work entire careers and get very little produced. Which would be very frustrating.

But you get paid, right?

I do get paid.

That’s part of the gig, right? You get paid for a lot of work, often times very little of it shows up. Do you think about how your career would be different if you were starting it off in 2018 where there’s YouTube, and there’s Snapchat and there’s Twitter.

Oh, there’s Twitter, yeah.

And there’s also just a ton of money coming in right now, from Apple and Amazon and Netflix. It seems like there’s a glut of TV, hundreds and hundreds of TV shows being produced. Would this career be as attractive to you as it was when you were breaking in? When it was much harder to get to TV?

There are shows I would love to work on. I watch “Another Period,” which is Riki Lindhome and Natasha Leggero’s show. It’s so funny, on Comedy Central. I love “Broad City.” I’ve always actually, the draw has been certain shows. I loved working on “Murphy Brown,” and I loved working on “Monk.” More than working just on TV in general. For example, when I started, the top show was the “Cosby Show” and “Golden Girls.” But when I sat down to write a spec script, I wrote one for “It’s Garry Shandling’s Show,” which I imagine very few people have ever heard of. It was Garry’s sitcom before he did “Larry Sanders.”

It’s on Fox, right?

It was.

Yeah. You said you liked it more, I’m with everyone else who likes the HBO show more.

That makes sense.

But do you imagine, since in some ways it seems much easier to get on TV or create something that looks like TV in many ways, many more ways to distribute it. Do you think you would have leapt into it that much earlier? You said, “Oh, there’s fewer gatekeepers, I can go right into, do right what I want.” Or would you say, “Let’s do something else a little harder. It seems like anyone can make one of these things.”

I started thinking about TV, cause I had this whole magazine career. And then I bumped into an editor one day who said to me, “Nell, I don’t mean this as an insult. But I think you could write for television.” And I’d never thought of it before. And one of the main differences between then and now, is we have this cult of the showrunner. Where everyone knows about David Simon, and Joss Whedon or Shonda Rhimes.

Right. And you had to be a very specific person if you knew who Steven J. Cannell was.

That’s right. That’s right.

So, they’re elevated now. That makes it more attractive to you?

I don’t know, I would have been more aware that you could. I didn’t even know that you could be a TV writer.

Like many comedy TV writers, you went to Harvard. Unlike, apparently all of them, you did not join the Lampoon.

No.

How did that happen?

It was scary. I went to one comp meeting, and they-

Tell me what a comp meeting is.

You know, at most schools if you wanna do an extra-curricular activity, you go put your name on a sign-up sheet. Harvard makes its students compete for everything.

Very Harvard.

So, you have to comp for the Harvard Crimson, or comp for the Lampoon. So I went to the first comp meeting, and this guy with a big head was telling us how you write three essays, and then you throw them on the floor. And people write their criticisms on the back, which everyone can read. And it just frightened me.

And so you passed.

I passed.

And still bumped your way out into TV after all.

I did. And in fact, bumped into the guy who was the comp director years later. It was Jeff Martin, who went on to work for “The Simpsons.” And one day he even said to me, “How come you didn’t comp for the Lampoon?” And I was like, “Well, you scared me. You have a very big head.” And he was like, “Yes I do.”

I mentioned this previously, you’ve got an entire chapter that you say, “Here’s how we built an episode of ‘The Simpsons.’” I loved it. Is there a particular point you’re trying to get across by showing how this thing starts with an idea, and gets all the way through execution?

You’re chipping away at marble to make the statue. One of the points I really wanted to make, is how much material you generate in order to get that chiseled, perfect episode.

Twenty-two minutes.

And that room was astonishingly fast and smart. They had, you had people with different skill sets, so I really loved being in it. And I tell this story of sitting next to Sam Simon, when I was getting my notes on my outline. At that time the staff was small enough that we could all sit in a circle in one room. Matt Groening was sitting across from me. I look over at one point, and his hands are folded in his lap, and his head is kind of slumped down, and he’s resting his eyes. And I look over at Sam, and he just mouths to me, “Don’t wake him.”

That’s not in the book, is it?

It is!

Did I miss that? Oh, I missed that part. One of the things that is in the book, because you’re a meticulous note taker, so you’ve got a lot of your notes from various scripts you’ve worked on. You’ve got mark-ups of your scripts that other people have made. Eventually move into email, and you’ve got email exchanges about how to write for David Letterman at the Lincoln Center. It’s a great tool, it’s a great way to break up the book and also just show, not tell. Right?

Well I was a journalist first, so I had a love for primary sources. I also thought TV would go away, and I wanted to hold onto these things so I could prove that I was really there.

Was there a particular moment in your career when you though, “TV is going away, and I need to find a third, or fourth or fifth act. I need something else that I can be doing.” Where did you ever make a conscious pivot into something else?

I never thought TV is going away, but I did think, “I’m a woman, who’s getting older, and TV might not want me anymore.” I did, you know, that’s why I love writing with Sheryl. I think speech writing is a really interesting combination of both journalism and writing dialogue for TV. And I really enjoy that. I moved into directing. But I’m also a challenge junkie. So writing for TV is really easy for me now. I love it, but…

How is writing for Sheryl Sandberg, writing with Sheryl Sandberg, different than writing for TV?

Well, if I’m writing for “Murphy Brown,” then Candace is going to do the lines that I’ve written for her. Unless she has a big issue. Sheryl is brilliant, and she has her own ideas. And we talk about the best way to express them, but it’s less me channeling through a character and more getting in Sheryl’s head.

And so, for “Lean In,” right? That’s her idea. I wanna write about the workplace, the idea of leaning-in. And then are you going and sort of punching up her script? Is it the equivalent of that? Or are you going and doing research to go and flush out idea? What’s the, how did that process work?

You know, it was a true collaboration. And we’re both iterators, so we would send chapters back 40 times, maybe more. And just get it to where we were both happy. She’s an amazing writer, but she’s also running Facebook, and she has two small kids.

When that book came out, I think a lot of folks said, “Ah, she’s on a trajectory, she’s the COO at Facebook, that’s an incredibly powerful job. But she’s clearly gonna be making, she’s now a public figure. She’s on the cover of Time Magazine. You can sorta see where this is heading, she’s gonna end up running the government, or something even bigger.

I wish.

Did you get that sense?

We really stayed in the lane, and “Lean In” was, boy, it was such a passion project for both of us. So, I don’t know. I mean, Dave died two years after “Lean In” came out.

Oh, yeah.

Her husband. That was traumatic and sad and shocking. So I think that obviously had a huge effect on whatever those plans were.

And then you guys wrote a second book about that, about her dealing with grief.

I edited “Option B.” She wrote that with Adam Grant. We all wanted to honor Dave Goldberg with that project. I learned a lot from writing it.

Are you in touch with Sheryl now?

Yeah. I’m going up to do a Facebook live this week.

At the point where, so we’re recording this a couple days after the story broke in the New York Times about data breaches, but they weren’t a data breach. Do you check in with her about stuff like that? Say, “Here’s my suggestion for how to handle this.”

No.

No.

No, I am — Here’s what I know about Facebook. I’m a Facebook user. I was an early adopter. I joined when you needed a .edu address. For a writer, it’s one of the greatest social tools available.

It doesn’t seem like a helpful tool at all for writers. It seems like a great way to not write. You may be more disciplined than I am.

Maybe, I’ve had a lot of little things I’ve put up and then thought, “Hey, that would be a good magazine piece.” So, I’m a big fan of Facebook.

Do you have advice for well-meaning men who run things, about how to improve the workplace?

Yes I do.

Can you share a couple with me?

Number one, hire more women.

They say it’s hard. There’s the “pipeline problem.” I’m setting you up here.

I don’t think it’s a pipeline problem. I think it’s a broken doorbell problem. And I think the talent is out there, I think there are women, people of color, people with disabilities, people in the LBGTQ community who are ready and should be let in that door.

Let me play devil’s advocate.

Yes.

Or white, straight men’s advocate. Cause we need some help.

Which is the same thing. I’m joking.

Maybe there is a pipeline, but it is harder to do this. Right? It is harder to hire from a diverse population. You have to spend more energy doing it. And if I can find a straight white guy who’s good at the job, shouldn’t I hire him? Why should I spend more energy trying to diversify my workplace?

First of all, Warren Buffet said one of the reasons he was so successful is, he was only competing with half the population. So, how do you know you’re getting the best person, and how are you defining the best person? Is it the person who thinks like me? Maybe the best person is someone who doesn’t think like you, exactly, and who has different experiences, different perspectives, different connections.

You’ve got a great anecdote there about moral licensing. Can you explain what that is?

Well, the best explanation is from Malcolm Gladwell. I’m not gonna plug someone else’s podcast-

We’ve had him on the show.

But his very first one, was about moral licensing. So moral licensing is the fancy way to say, “But some of my best friends are Jewish.” And it’s using the fact that you weren’t discriminatory in the past, to excuse actual discriminatory behavior.

“I’m married to a woman.”

That’s right.

“My wife’s a feminist.”

Well, Dan Scavino did that, with, “I can’t be antisemitic. My wife is Jewish.” And then, she just served him with divorce papers today.

Yeah. And then you’re — oh, I’m not even keeping up with the Dan Scavino, poor Dan Scavino. Poor Trump administration. But you bring this up in the context of, you go to a friend who’s running a show and you say, “You haven’t hired any women, you’ve hired one woman in twenty years.” And he says, “That can’t be the case. It can’t be my fault.”

Right.

“I like women. I’m married. I’m a feminist.” And you say, “No, that’s bullshit.

Well, no, he got very defensive and I pulled back because I realized that that tact wasn’t working with him.

What’s the better way to approach someone like that, who’s — because by the way, many people are defensive.

Right. The best way to do it, is to approach someone and say, “I couldn’t help but notice that you don’t have many women on your staff. I know a lot of fantastic female writers, so if you want names let me give you some.” Now the problem is, most of the time they say, “We’re not looking.” And then six months later you find out they hired someone who was a white male, and you go, “Hey, why didn’t you ask me.” And then they get angry with you.

But there’s something to that, right? If you give them enough building blocks they can, sort of, put it together and say, “Well this is my idea, and I did it. I wasn’t forced into doing this.” And so it gives them a little more flexibility and leeway. You’ve noticed, you’ve —

— Can I just say though, they should do it ‘cause it will make their shows better. And I have this great quote from Albert Brooks, “A fairer share of humanity will always produce better comedy.” And that’s the funniest guy on the planet, as far as I’m concerned. And he wrote with a woman, Monica Johnson. He wrote “Lost in America” with her, he wrote “Real Life” with her.

All the really good Albert Brooks movies.

Well, no. “Defending Your Life” is the best, and he did write that one alone. No? You don’t agree?

Mm-mm.

Really?

Nothin’ better than “the nest egg.”

“Don’t say nest, don’t say egg.”

“Desert Inn has heart.”

It’s a thing.

So great.

“Twigs.”

But yeah, that’s the best argument, right? Or that’s one argument you can make, is, “Look, this is objectively better for your business.” And if it takes work, that’s okay. Because it’s work you’re doing that someone else isn’t doing, so take advantage of it.

That’s right.

You’ve got a great multiple coda thing going on with the Letterman story, where eventually you work with him again, you’re very nervous about it. That works well. And then you finally get to talk to him about your book. About what you wrote about his show X number of years earlier. Should we spoil it, or should we leave it open?

Let’s not spoil it, but when I wrote my article in 2009, I was certain I would never have a moment with Dave. He’s very insulated, by that point he was working on a different floor from the writers and you needed a thumbprint to even get in his office.

Even by comedy standards, he’s a weird, eccentric person, right?

Writers said that they didn’t even know he was in the building unless they saw him on the show. So, I didn’t think I’d ever be able to pierce that bubble. Then in 2014, I got hired to write on the Kennedy Center Honors. I got a call from my co-writer, Louis Friedman, who said, “Nell, I thought you should know David Letterman’s going to narrate the Tom Hanks movie.” And I said, “Okay.” And he said, “That means he’ll be there.” And my heart just started pounding. So I did get my third act moment with Dave.

We’ll let people read the book, they can figure out how that went. But, as part of the coda, of the coda, of the coda, you know that since Letterman retired, he started advocating for more diversity in late night entertainment. You’d say Jay Leno has noticed the same thing as well. Any speculation about why people suddenly get religion when they’re no longer running the show?

Well I do think there’s an intersection between sexism and ageism. And that now both Dave and Jay know what it’s like to be replaced by a less experienced, younger man. It’s not fun. But, since I turned in my final draft, Dave’s Netflix show has come out. I noticed of the five executive producers on the show, they’re all men.

So it’s not total religion that he’s gotten.

Oh, no.

Still some work to do.

I think he’s still an atheist.

This is super fun, you should go buy the book. You don’t care if they buy an E-book? You can buy a paperback.

Yes! Absolutely. You can buy it on Kindle.

Hardcover.

Hardcover. I’m classy.

Also, if you buy it on paperback, you gotta wait too long. You can go see Nell talk to Kara Swisher by using Google and figuring out how to go see them at the Commonwealth Club. Nell, this was great.

Oh, I appreciate it. This was fun.


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Recode Daily: Trump orders tariffs on $60 billion of Chinese-made goods — mostly tech products

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

President Donald Trump holds up a signed presidential memorandum aimed at what he calls Chinese economic aggression in the Roosevelt Room at the White House on March 22, 2018, in Washington, D.C.

Plus, Jack Dorsey predicts that bitcoin will become the world’s universal currency; Dropbox goes public today at $ 21 per share; delete these apps and return to a simpler way of life.

Trump is aiming at China, with plan to impose tariffs on about $ 60 billion worth of Chinese-made goods. The proposed list of some 1,300 products, which will be released within two weeks, will mostly focus on tech, and would effectively block the Chinese imports from entering the U.S. Trump also appointed John Bolton, a China hawk, as his new national security adviser. Wall Street is jittery: The Dow closed down more than 700 points. [Adam Behsudi / Politico]

[Want to get the Recode Daily in your inbox? Subscribe here.]

Dropbox IPOs today on Nasdaq under the trading name DBX at an above-expectations $ 21 per share. Dropbox, which waited a decade to go public, will have an initial maket cap of $ 8.3 billion — significantly less than the company’s last private valuation of $ 10 billion. How the company fares in its first few quarters should give some indication on how highly valued private tech companies can fare on public markets in 2018. Here’s how Dropbox’s biggest backer — venture capital firm Sequoia — positioned itself to earn between $ 2 billion and $ 3 billion on its initial investment. [Theodore Schleifer / Recode]

Twitter and Square CEO Jack Dorsey predicted that bitcoin will become the universal world currency in about 10 years. Square now allows the buying and selling of bitcoin on its payment app. Bitcoin is now trading around $ 9,000, down from the peak of $ 20,000 it hit on some exchanges in December. [Lucinda Shen / Fortune]

The music business had its second consecutive year of growth — thanks to streaming. Flat used to be the new up for the music labels. Now they’re up for real — sales increased 14 percent to $ 8.7 billion last year. The industry’s significant leap in revenue is due entirely to streaming services like Spotify and Apple Music, which are more than balancing the decline in CD sales and download sales. [Peter Kafka and Rani Molla / Recode]

David Scott’s gun-loving friends were kicked off Facebook. So he started Gunbook. The British gun enthusiast started his version of the site three weeks ago, and says the “social network for shooters” already has more than 1,000 members, around 60 of whom are from the U.S. Facebook has banned all advertisements for guns; YouTube announced this week that it will ban videos promoting the sale or manufacture of firearms. [Emily Dugan and Mark Di Stefano / BuzzFeed News]

Top stories from Recode

ModCloth’s former CEO Matt Kaness has left Walmart just a year after the acquisition.

The former Urban Outfitters executive’s role had been in question for several months.

WeWork’s massive growth has made it the second-biggest private office tenant in Manhattan.

It started out with a single SoHo building in 2010.

More than 80 percent of women in tech say they feel pressure to return early from parental leave.

Nearly a third worry about losing their jobs, according to a new report from Indeed.

Scooter-sharing startup Bird has hired former Lyft executive David Estrada to be its chief legal officer.

Estrada also briefly worked at Kitty Hawk; before Lyft, he was the legal director at Google X.

Facebook and Cambridge Analytica: What just happened?

On the latest episode of Too Embarrassed to Ask, Recode’s Kurt Wagner and Kara Swisher, with The Verge’s Lauren Goode, explain the company’s user-data debacle — and what might happen next.

This is cool

Delete these iPhone apps and return to a simpler way of life.

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Full transcript: Former White House communications director Anthony Scaramucci on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

“[Trump] tried to fix or drain the swamp using cesspool operators and swamp creatures.”

On this episode of Recode Decode, hosted by Kara Swisher, former White House communications director Anthony Scaramucci “The Mooch” talks about his infamous 11-day stint in the Trump administration, his recently announced book deal and why he thinks the president will win reelection in 2020.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.


Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode. I have been at my job for, I don’t know, a thousand mooches, but in my spare time I talk tech, and you’re listening to Recode Decode from the Vox Media podcast network.

Today I’m in New York City with Anthony Scaramucci, also known as The Mooch. He’s the founder of Sky Bridge Capital, and before that worked at Goldman Sachs, and started a different financial firm, Oscar Capital Management. But to most of my listeners he’s known for the 10, I guess long days he spent in the Trump White House last year. Anthony, welcome to the Recode Decode podcast. Did you ever think you’d be here?

Anthony Scaramucci: No, I never thought I’d be here, given the fact that you bombed me on Twitter.

Trolled you, it’s called.

Trolling, bombings one. I actually personally like you.

Did you like the trolling? I thought it was rather clever.

It doesn’t bother me at all.

It wasn’t mean, it was funny.

It actually doesn’t bother me at all. I think I’ve learned after my firing and my rolling in broken glass in American media that I actually have a strong conscience.

Yeah.

I can take just about anything.

Yeah, the media seems to like you quite a bit, Anthony.

You think?

I do.

I think it’s a love-hate relationship.

No, I don’t think they hate you. I think they’re amused by you, for sure, but they’re definitely going to give it to you, but you give it back so it’s just fine.

Yeah, it’s good. It’s all good. It’s healthy.

Let’s start. Explain who you are, Anthony Scaramucci.

I want to address the media at one point, too, because I think it’s very important for the United States. So who am I? That’s a good question.

Okay.

Hopefully I’ll figure that out before I die. Well, I grew up in a middle-class family. My parents didn’t go to college.

In New York?

In New York, out on Long Island.

Where?

I grew up in a town called Port Washington.

I grew up in Roslyn Harbor, Anthony.

Okay. Do you remember McCormick Sand and Stone?

No, I do not.

Do you remember Gothic Sand and Stone?

Not really.

Okay, so you know where the clock tower is in Roslyn?

Sure, right.

And so if you head north out of Roslyn into the peninsula of Port Washington on West Shore Road there was a very large sand embankment there. Maybe you remember that growing up as a kid. So our area, Roslyn Harbor, Port Washington had the largest granular sand deposit in North America. And so all of Long Island is a glacial deposit. When the glacier receded back to the North Pole it left Long Island, Block Island, Nantucket, Martha’s Vineyard, the elbow of Cape Cod, and there you go. And so right there in the peninsula of Port Washington it took 95 years for Italian, Welsh and Irish immigrants to mine out that sand. And so my family originally started in Wooksbury, Pennsylvania.

Oh my gosh, my family is from Scranton.

Yeah, so there you go. Plains PX.

Actually, my family owns a coal mining company. Anyway, go ahead. Strip mining.

Okay, so my grandfather actually wasn’t a miner but he had a store in that town in Plains, Pennsylvania. And so he told my father and his two older brothers to leave the town. He didn’t want them going into the mines. And so they responded to classified advertising to go mine sand on Long Island. So they landed in the town of Port Washington and my dad started with a payloader. He worked a conveyor belt. They used to measure barges, this is probably giving you too much more than you want.

No, I like it. It’s fascinating.

The sand would be put on a barge by Bar Beach opposite the harbor. It would be tugboated through the Throgs Neck over to Long Island City. It would be mixed with the concrete. And so what people don’t realize is that the gateway for the skyscrapers here was the Queensboro Bridge, the 59th Street Bridge. It was erected in 1909. And so you took the sand from Long Island, mixed it in the concrete, and you had those big cylinder trucks ride over the Queensboro Bridge to build these buildings. So 65 percent of the concrete here came from my hometown from 1905 to 2000.

And your dad dug it?

My dad spent 42 years in that company.

Wow.

He worked for the same company for 42 years. Started with his hands, never went to college. He had an unbelievable work ethic. I can still see and remember my mom preparing his lunch pail.

What did your mom do?

My mom was a homemaker.

Homemaker.

And so this is very important to understand, because that family that I came from was an aspirational working-class family. We lived in a working-class area of the town. Port Washington is quite affluent.

It is.

Thank God for that because it was a very good public school system, but there are certain enclaves inside of Port Washington in the 1970s that had blue-collar people in them. And frankly, blue-collar people could afford to live there because they were very high wages post World War II. As we were continuing our industrialization, these other nations were vanquished, there was a shortage of labor. And so my dad had what I would call a light-blue-collar wage for a blue-collar job. Meaning he wasn’t a white-collar person, but we had Sears Toughskins, we were taking air conditioners in and out of our house, we shared one bathroom, five of us, but it was a great way to grow up. And I was a product of a very good public school system.

In Port Washington?

In Port Washington. So I’m not one of these — even though I’m a Republican — I’m not one of these conservatives that are for no government, or too small of a government. I believe that you have to have an energetic government to help create a level playing field or at least as level a playing field as you can get.

At least an education to start with.

No question. And so you need … You know, the Republicans are going to have to wake up and recognize that they’re not going to fix the uneven educational problem in the United States through charter schools or school choice and things like that. There are elements of the process of fixing it, but you have to have broad-scale public education reform.

We’ll talk about this later, changing how we’re teaching.

You have to have broad-scale public education reform and it has to come through the public schools and it has to come from union accountability. It’s not going to come from, “I’ve got a charter school and that’s how we’re going to do this.” I mean, they are great and they should be supported, and I do support them financially, but this is not the single element.

So here I am in this blue-collar enclave, in a very nice community 22 miles from Manhattan, and I go to Schreiber High School. You may remember that from Roslyn Harbor. I go to Tufts University, and from Tufts I go to Harvard Law School, and getting myself educated. And then it dawns on me that I’m going to do better in the world of finance and investing then I would necessarily practicing law, so I go to Goldman, I spend seven years there.

Are you a good banker, Anthony?

No, I sucked. Terrible at being a banker.

What were you in?

So I started in investment banking. My job at Goldman started on August 14, 1989. I was fired from Goldman Sachs on February 1st, 1990. So I sucked at it.

Yeah, what did you suck at? What was your suckage?

I suck at being an investment banker and an investment bank associate. I couldn’t do the spreadsheet math and the macro algorithms that you need to do to run the process. And I was bored to tears by it. And Goldman is a pretty swift place at recognizing when somebody sucks. And so it took them 18 short months, they fired me.

And this is a learning lesson for younger people listening to your podcast: Don’t burn any bridges. And so I stayed tight with the guy that fired me and I came back on Monday. I was fired on Friday, February 1st, I was back Monday pumping quarters … I got a roll of quarters because there were no cellphones back then. I was pumping quarters into pay phones here in midtown Manhattan and one of my buddy’s said, “Hey, there’s a job opening at Goldman Sachs.” So I laughed. I said, “Where is it?” “It’s in the investment area.” And so I called my old boss who had just fired me. I said, “Hey, there’s a job opening on the 28th floor,” I had gotten fired from the 17th floor. I said, “Could you put a good word in for me?”

He said, “You know what, I would. You’re an honest guy, you work hard, you just sucked at this job.” And so I went upstairs, I interviewed for the other job and got rehired into Goldman Sachs.

On Monday?

No, it took about six weeks. And so I was fired.

So what did you move to?

I was fired on February 1st and I got rehired on March 28th. So I moved into the equities area, the stock market area, and that was great. I thrived in that area.

Couldn’t you have just moved, Anthony?

I should have taken that job. The funny part about this is there was a guy named Bill Groover. He’s now a professor at Bucknell University. He’s in his early 70s. He told me when I was coming out of law school to go into the equities area. That I was well suited for it. I told him, “No, I want to be an investment banker.” And he said, “Yeah, you’re a jerkoff. You want to be an investment banker because you think it’s cooler than being in the equities area.” And I had to admit that was true.

Yeah, of course.

I thought that was the cooler job. So learning lesson No. 1: Don’t take the cooler job.

Yeah.

Don’t try to impress your friends. Take the job that you’re well suited for and take the job that you think you could do a better job at. So I had to get that lesson the hard way, I got fired. So you know, John Kelly wasn’t the first person to fire me.

Oh, I’ve been fired.

Yeah. You’ve been fired a couple times?

Several times. My first journalism job.

It’s not bad to be fired. It’s harder to fire people. I’ve counted 20 people that I have had to personally fire and I’ve been fired twice. And I can tell you, it’s like when your parents said to you — I mean, we can’t hit our kids anymore but when kids were getting hit, and I used to get hit by my dad. He would always say, “This is hurting me more than it’s hurting you,” as he would hit me with the belt.

Getting fired is probably less painful then firing somebody, at least for me. I don’t like the process of firing somebody because you know you’re creating anxiety in another human being and I don’t really like doing that. I like creating security in human beings, not anxiety.

Well, we’re going yeah to get to that. Wait, you got fired twice, so Goldman Sachs and the White House, right?

Yeah.

You go on to do what? You leave Goldman Sachs.

So now I’m at Mac Goldman. I’m in the equities area, raging bull market in the ’90s. My partner and I are running a private wealth team and we extract that private wealth team from Goldman. We form a company that has a hedge fund and a registered investment advisory where we’re managing money for wealthy people. We make a ton of mistakes but the rising tide of the bull market is really wiping out a lot of our mistakes.

And so we go on to great success and in five short years we sell our registered investment advisor in Neuberger Berman, which was a New York-based, at that time, publicly traded asset manager. So my partner at the time, Andy Bosar, at that time is probably in his early 60s now. Great guy, great mentor of mine, and so we run that business over there for a while. He then goes on to retire, lives up in Nantucket now. And I’m at Neuberger. Neuberger then gets purchased by the Lehman Brothers. This was October of ’03.

I’m at Lehman building a relation with Dick Fuld and some of the senior people there. I go to them in ’05 and say, “I’d like to leave and start something that I’m going to call Sky Bridge Capital.” I explain to them what it is, Dick is great to me. He offers me $ 10 million of balance sheet capital to go into my fund. I then go to Merrill Lynch who sold my business. They were the merger banker for the original sale.

Right.

They gave me $ 10 million. Michael Dell’s family office — I had known Michael from my days back at Goldman — and some of his guys, they also come in. And so my original investors are the Dell family office, Lehman Brothers and Merrill. I put my own personal dough in and we start Sky Bridge in this building that we’re speaking from on the sixth floor in a hedge fund hotel, literally in a very small room. There was a small table, there’s four computers and a couple of telephones, and that’s how we get Sky Bridge started.

So why did you want to go off on your own? I’m very interested in entrepreneurs and why they do what they do.

I think that people experience something, and I tell my children this, I have five children. You experience something from the age of 11 to 17 that drives your passion and love for your vocation. Your vocation finds you from age 11 to 17. I don’t know what it is, it could be medicine, it could be journalism, it could be something.

For me, my dad had his hours reduced and there was some financial anxiety in the house as a result of that. Because you know the overtime hours are more valuable to somebody that works by the hour because it’s time and a half or double, depending on the time. And so I went out and got myself a paper route. I was 11, 12 years old. I was hustling papers around my neighborhood and I was giving almost all the money to my folks to supplement the budget.

So financial anxiety?

Financial anxiety. And so what I learned about myself is that I could start up, I could create something out of nothing. I had a paper route, I was stocking shelves at Key Food, I worked in my uncle’s motorcycle shop, and I said to myself, “You know what, I’m going to have my own business someday. I’m going to be my own man someday.”

I went to law school for some of the silliest reasons on earth. I read an article in Time magazine about Kervaswain and Moore, a WASP law firm that I probably could have never got in there. And they were paying their law school associates at that time $ 65,000 a year. My dad was making like 33 grand. I was like, “Oh my God, this is like double my dad’s. I’m going to law school, I’m going to be totally set financially for life.” And when I got to law school I realize it didn’t fit me.

Yeah, you don’t fit a lawyer.

So I deplugged or unplugged from law school, got my job at Goldman, got fired from Goldman, got rehired into Goldman, and then I started my first business at the age of 32. And you know, when I was at Lehman it was fine, but I always had the bug to start another business.

You don’t strike me as a very good employee.

I’m unemployable, actually. I’m not a good employee because people take me the wrong way. I’m actually a great team player. I was captain of my high school football team. I know how to run a process, I know how to be a team player, believe it or not. Even though I’ve got a strong personality I subordinate my ego to very talented people. So I don’t run the money at Sky Bridge. I got grown guys running the money and my ego is healthy enough where I don’t need to insert myself into that process.

So Sky Bridge is the newest that you started with that early money.

It’s 13 years old. I started Sky Bridge …

How much do you have under investment?

There’s 10.9 billion under management here. It’s the 20th largest funds to funds in the world.

What do you do then if you have all of these guys running it?

What do I do is a really good question. So I’ve got a limited skill set. Here’s my self-evaluative skill set. I know how to evaluate talent. Okay, so if you ask me about Steve Bannon, I’ll leave out the expletives, but I can tell you exactly who the guy is. If you want to ask me about Reince Priebus, boom, I can give you the scouting report, what his pluses and minuses are, and I can do it objectively. So I know how to evaluate talent.

No. 2, effective communicator, although I am polarizing because I’m very opinionated and so some people don’t like opinionated people. And I’ll tell you another thing I’ve learned is, people don’t like the truth. You tell somebody the truth, they get very upset, they set their hair on fire and they run around in a circle.

You say the morale sucks in the White House … Well, by the way, the morale does suck in the White House, but you’re not allowed to say that because that’s the truth.

Right.

It’s going back to “A Few Good Men” from a generation ago.

“You can’t handle the truth.” Right.

“You can’t handle the truth.” Tell somebody the truth, you’re very polarizing. Let me tell you something, if you tell somebody the truth, it’s very liberating. I mean, I’m 54 years young. I’m 54 years young for a reason. I’m rolling out of bed saying, “Hey, no problem.” I’ve run this business as sound, ethically, as you could run a business. I would never dishonor my dad and his work ethic.

Are they still living, your parents?

They are. 82 and 81. They still live in the same house I grew up in. Funny part about that is, I wanted to move them once I started making some dough, but they’re are wedded to the neighbors, they’re wedded to the area.

My grandma has stayed in her same house.

I renovated the house. I mean, they got all brand new furniture and appliances and all that other stuff. A new roof, a new basement, you know, whatever they wanted. Funny thing is — because you’re some Italian heritage, so I’m going to ask you a question. Okay, when you turn to your parents, you say, “Okay, Pops, what kind of car do you want? I’m going to buy you a new car.” What is my father’s old-line Italian say that he wants?

A Chrysler.

Well, close. A Cadillac. A Cadillac, right. They don’t want a German car. My mother says, “Mercedes.” She’s very status conscious. So I buy the Mercedes, my father gets this lease deal from the Cadillac dealer. So I get a Mercedes and a Cadillac. Now I go back, I visit my parents every Saturday and Sunday and make sure they’re okay, and I always bring my kids there. It’s a good grounding wire for them to see how I grew up so they don’t get too detached from reality, right. The Cadillac never moves from the driveway. The Mercedes is being used by everybody, including my father. If I look around, my mother says, “Yeah, he hates that Cadillac.” So I had to return the Cadillac, eat the lease and buy him a Mercedes.

Oh, okay.

I’m probably in trouble now because that’s a globalist thing to do. My point being that you know people don’t really know what they want until they get what they want.

Yeah, that’s true.

Look, I’ve lived this very improbable, very blessed life. Entrepreneurs, smart ones know that a lot of their success is providential or if they don’t believe in God it’s from the universe. It’s from the karmic atmosphere of the universe, luck. I don’t know. I didn’t pick my upbringing. I didn’t pick my parents. I didn’t pick the location of my birth, so therefore, definitional, I won the lottery. If there are certain axiomatic facts about life, one of them being life is unfair, the people sitting here in this podcast, we won the lottery by that definition.

I think about that all the time.

So for me I wake up with a lot of gratitude about life and I also recognize that the human condition is going to come with tragedy, because you’re going to have to say goodbye to people that you love. I mean that’s, unfortunately … If you get to an adult age, you’re going to see people die that you love. You know, I dedicated my first book to one of my best friends who was my brother in law, he died of stomach cancer at the age of 44 in 2009. Very painful, but the flip side of it is there’s a lot of fun things to do in life. But if you’re listening to this podcast and you obviously like Kyra. Is that how you say it? Kara?

Kara. Like Sarah.

Let me just say this, okay: Live your truth, live your dream, live who you are, live your sexuality. Be who you are because you’re only here visiting. Okay, and like Mel Brooks said, one of the best lines ever is, “Relax, none of us are getting out of here alive.” So live your dream and relax into it. Whatever happens to you, roll with it.

All right, so how did you get wrapped up with the Trump people then? Because quite a few of these things you’re saying are not things that come out of this particular White House, or maybe they do.

They do and they don’t. I mean, the messaging is flawed. The process of the messaging is flawed.

So how did you get hooked up with him?

I was with … First of all, I’ve known the president for a long time. I met him when I was at Goldman Sachs.

Where?

I met him at a … Actually, my old boss, Mike Fascitelli, in real estate. Remember, I was a real estate investment banker, I got fired by this guy Mike Fascitelli, he’s very close to Trump because he was in real estate.

Right.

So I met then Mr. Trump, I never called him Donald or anything like that, but I then met Mr. Trump probably in the late ’90s through my old boss from the real estate department. I had read “The Art of the Deal.” He was a larger-than-life figure here in New York when I was growing up. And so I’ll be very candid with you, at that point I was awestruck by meeting him.

Where did you meet him actually?

I’ll have to remember this. It was a restaurant. I’m not sure if it was the Plaza Hotel. It was somewhere up here in the plaza district in Midtown Manhattan.

Right.

Because I remember my boss saying, “Hey, I’m going to meet Donald Trump, do you want to meet him?”

Of course you said …

Yeah, I got to meet this guy. This guy’s a character on the Howard Stern Show.

This guy.

I got to go meet the guy, right? So I didn’t really know him, I’m not going to lie about that. I don’t like over-exaggerating my relationships with other people. But then started to see him out. I was out, socialized a little bit, went to a couple Yankee games. I’m tight with Randy Levine, the president of the Yankees. He was in the box with me, the owner’s box.

New York chitter chatter, right?

New York chitter chatter. He was with Regis Philbin, you know, I was there with a couple clients. I mean, the president, Mr. Trump, very gregarious, friendly guy. And then I got to know him a lot better during the Mitt Romney campaign. And so I was … You know my politics, I’m fairly agnostic. I’m not really strident Republican or strident anything. If you ask me my positions I’ll tell you what they are, they don’t fit either party. So I could never run for anything because Democrats would shell me on my economic views and the Republicans would shell me on my social progressive views.

Well, the old-time Republicans, the old New Yorker Republicans, the Rockefeller Republicans.

People say they’re all Rockefeller Republicans but I don’t even really see myself as that because I’m like way to the left on social stuff.

Yeah, but they would have gotten there if it was today.

Honestly, at the end of the day we … I mean, there’s one thing, that’s another axiomatic … My 54-year observation of the planet, there are no equal outcomes. You can’t systematize them, you can politicize them, you can read the Communist Manifesto, you can believe in socialism, you can say whatever you want, but you’re not going to have an equal outcome because people are uneven. What a society has to provide is as much equal opportunity as possible, but I’m telling you right now …

I know, people rise and fall.

No matter how you politicize it, you’re not going to get equal outcomes. And so for me, when I step back and look at this stuff, whether you’re black, white, whatever your sexual orientation is, whatever your family of origin is, let’s try to level out the playing field. Let people live under the theory of life, liberty and the pursuit of happiness.

Well that would be nice, Anthony, but it doesn’t happen that way.

It doesn’t happen that way and it probably won’t happen that way because primordially we were set up for primordialism. Primordially we’re set up for that.

Really?

You don’t think we are?

I think we are and we have to resist it. Primarily we’re set up for dragging our knuckles along the ground but we …

We have to transcend it.

Right.

We have to transcend it. You’re set up that way but you can transcend it. That’s your humanity, right? You’re in a piece of machinery that hasn’t evolved in probably half a million years and so … You know, your phone got upgraded nine times since they started them in 2007 or eight.

Wouldn’t that be nice? If you could upgrade people?

You can’t upgrade. You don’t have a software upgrade. So you have primordial instincts, you have atavistic instincts, but you can transcend them. Okay, but back on this point. Now with Trump it’s 2012, we’re doing fundraisers in his triplex apartment and I’m developing a relationship with him and his team. And I got a rapport with him. I’m seeing him, I go to lunch with him, I go to breakfast with him. We talk, blah, blah.

And then the day after “The Apprentice,” whatever that day may be, I can’t remember it but you could Google it. I’m in his office having breakfast with him and he says, “You know, that was it. It was great. My ratings were great, weren’t they? I’m the man.” And I’m listening to him and I’m laughing because he knows how to make you laugh. And then he says, “Oh that’s it, I’m running for president.” And then I laugh. I say, “You’re not running for president.” “I’m running for president. I hired this guy Corey Lewandowski. I got this guy Roger Stone. I’ve got this guy Sam Nunberg. They’re down on the fifth floor, we’re running for president. I’ve got Hope Hicks,” and I didn’t know any of these people. I said, “You’re not running for president.”

I said, “Let me tell you, this is a great publicity stunt. I get where you’re going.” I said, “You’re at 2 percent in the polls.” He said, “Yeah, I watch Fox too. I’m at 2 percent of the polls because people are like you. They think I’m not running for president, but I’m really running for president. I’m done with this stuff. I’m 68, 69 years old,” or whatever he said. I said, “Listen, you’re not running for president.”

I said, “Number one, I’ve been to your apartment, it’s fantastic. You have 19,000 square feet here in midtown Manhattan. You’re not going to live in 6,000 square feet in the White House residence, you’re just not going to do it.” “No, no, no I’m running for president.” I said, “I’ve been on your plane. Your plane is absolutely gorgeous. Your plane is beautiful.” I’m like, “You’re not going to carry the press around on Air Force One everywhere you go.” He said, “I don’t know. The country’s a mess. I’m going to fix the problems. I’m running for president.”

He said, “Hey, you’re halfway good on TV. I want you to help me. You don’t have to raise me any money by the way. I want to help me.” I said. “Okay.” I said, “Mr. Trump, I’m already tied into this guy.”

You were working for Mitt Romney.

Look, I’ve got a very eclectic political background. I bundled for Barack Obama. I went to law school with President Obama, and so I wrote him checks, bundled for him, and voted for him first term. I worked for Governor Romney, the second time I returned to my Republican roots. I didn’t like the president’s position on a lot of the business stuff and the excess regulation. It really hurts, cripples small businesses, excess regulation. So I go back to my Republican roots, I work for Romney. Romney gets beat — and no surprise there because a rising economy, it’s very hard to beat a sitting president, which is why Trump will get reelected.

So we’ll go back to the president now. He then says, “Well you’re with Scott Walker. Okay, after I kill Scott Walker you’re going to come work for me.” I’m like, “Well I can’t really do that. I got my clients.”

You were with Scott Walker the most like gutting all kinds of things that you probably believed in if you were backing Obama.

Okay. Study Scott, okay, because you have to understand, he’s in a very blue state. And here’s what happened.

No longer. Tammy Baldwin was the last holdout.

But here’s what happens, okay, and I really believe this because it’s happened to me. The media uses a prism and then a kaleidoscope.

Okay.

And so here’s what happens is they make a decision on the candidate or the person. And they say, “Okay, let me get them through this prism. We got to alter the light structure around this person. Wait a minute, this guy could be effective and he may not have my ideology so let me warp the light. Oh shit, that’s not really working. Let me do a kaleidoscope now to change the whole landscape on the guy.”

So study Walker, he’s built a large rainy-day fund. He did a tremendous amount of educational reform in the system. The system is actually working better. All he was calling for, and no one wants to give him credit for this, was union accountability. Now you’ll bring somebody on, they’ll say all kinds of stuff related to politics, and the polemics of politics, and the union people will want to hit me with a stone. And they’ll inflate a rat outside my office, whatever. I don’t really care.

Your dad was in the union, correct?

My dad was in the union. I am a union guy. I have no problem with unions. But his union, let me tell you something, they were accountable to each other. So what I’m not in favor of is we’re all sitting here at this table, and we’re in the union together, and you decide because you’re in the union you’re not going to work. You decide that, “Hey, I’m not going to get up this morning and teach these kids,” or, “Hey, I’m cool sit in a rubber room. I don’t need to teach the kids, my union is going to protect me come hell or high water.” I’m not for that.

Okay, I get the virtue of a union. I get the structure of capitalism and the need for labor to unionize so they can get their share of the economic rent and create economic progress. I totally understand all that. But just like capitalists can run amok and they can environmentally pollute the system, which they shouldn’t be doing, or they can pay themselves too much at the top and not pay their employees enough at the bottom to let the social contract work properly, unions can also run amok. And they can provide a lack of accountability for their union members in an effort to protect everybody.

Okay, so we can debate all this stuff, it’s not even a matter. I’m with Walker. Walker is very funny, by the way. He says, “I got to drop out of the race before Trump nicknames me again. I don’t know if I could handle a nickname.” So I say to him, “I got to go with Jeb after Walker because my clients are with Jeb.” “Okay, after I kill Walker and Jeb are you going to come with me?” I said, “You know what, if you’re in the race, if you’re really serious, you’re in New York or I’m in New York, I’ll come with you.”

South Carolina primaries over, I get a call from him, I go to his office and I say, “Okay, here’s my list of people we can raise money from. I’m ready to help you.” And then something very bizarre and very accidental and improbable happens. The entire Republican establishment evacuates from the campaign and they signed these petitions of being never-Trumpers. And so the ridiculous part of my story is, I’m a pragmatic business person. I’ve written checks to Chuck Schumer. I’ve written checks to Senator Hillary Clinton. I’m now working for Donald J Trump for president.

And the Republican Party, at least.

The Republican Party evacuates. So what would have happened if Jeb got the nomination, I would have been a lowly check-writing rich dude from New York and no one would have paid any attention to me nor cared about me, but because of the supply evacuation of labor, talent, policy makers, television advocates, they leave, I get sucked up into the vortex of that, right?

I want to help the guy win. I’m on TV, I’m advocating for him, I’m campaigning for him, I’m raising money for him. And despite the “Liar and Furious” book, which I call “Liar and Furious” because Wolff is a liar and Bannon’s furious, you know I was there the whole way. And by the way, you know this because you know I’m Italian. You think I would back down in a fight? The guy has the “Access Hollywood fiasco,” that weekend I was out on Twitter supporting him, that next week …

I have to stop it. Come on that was … Talk about the fiasco.

You want me to talk about it?

You heard it. Yeah.

Hold on a second. Don’t you locker room talk at me. Hold on a second, hold on a second, hold on a second. I’m a New Yorker. You’re a New Yorker.

Yes, I am.

You never heard talk like that before?

I guess. Not from certain people. I do expect a heavier level of decorum.

Okay.

I do. I do.

He’s a hilarious guy. He’s saying something really stupid. He’s playing for a laugh, he’s got a hot mike on, okay. By the way, I have said so many stupid things in my life and some of them in the … Look, I’ve made probably 10 phone books of mistakes in my life, at least three phone books of mistakes in 11 days inside the White House. So I’m not going to sit there and judge the guy. He said something regretful, he apologized for it, let’s move on.

Sort of. Sort of apologized.

Let me tell you something, I was there. At the Trump Tower studio he offered an apology. He looked pretty upset with himself for that moment, but whatever. And we can talk about that, but you know …

But you stuck with him.

Michael said that I left because — that’s Steve Bannon’s narrative because Steve now hates me, which is totally fine. But the facts don’t say that. Look at the videotape in the days after, I was on television. Look at my social media feed, I was out supporting him on that Friday night. Why did you keep supporting him? I’m playing to win.

You thought he was going to win? What was the reason you thought he was going to win?

I didn’t know if he was going to win or not win at that point. I thought we had a very good chance coming out of the convention. Anybody that’s telling you on October 10th, three days after the “Access Hollywood” fiasco, that we were going to win, is smoking their own crack pipe, okay?

I thought he was going to win.

You thought he was going to win after the “Access Hollywood” tape?

Yeah, because I think that people knew that about him, one, and that a lot of women had men like that.

Okay, well the good news for you is you were probably distant enough from it and could look at it more in a macro way.

I think people didn’t care.

I was probably too close to it.

I thought people should care but they didn’t.

Okay. Yeah, I don’t think they should care by the way. I mean …

I think mind your own business. We don’t live in France.

Yeah, we don’t live in France. But you know what? Maybe there’s some elements of France we should probably adapt. At the end of the day, who cares?

Freedom fries.

Let me tell you something I tell my Republican friends. You guys are for a smaller government in every aspect of my life except my bedroom. You want a larger government in my bedroom. You want to tell me who my lover should be and the positions I should have sexually. Okay, why don’t you guys get out of my bedroom.

And I feel that way about our public leaders. If the guy’s got the right policies, or she has the right policies, who cares? I don’t care about their personal lives. But that’s just me. So let’s move on.

So now I’m supporting him, we’re working together, it looks like we’re going to lose, and then it looks like we’re going to win. And then you’ve got to give this s.o.b. credit, he doesn’t leave. He’s a tenacious fighter. He’s in St Louis for that debate, he’s in Las Vegas for the next debate, the polls tighten. Remember, Paul Ryan wants him out. Reince Priebus wants him out. You’re going to lose, drop off the ticket.

And so here’s what happens, the Republican establishment basically doesn’t like him. I’m not saying some of it isn’t true, so I’ll be in trouble for that. Now he wins. He wins. We’re sitting around, he wins, and then the process begins. He names me to the executive transition team. Mike Wolff says I’m not doing anything at the transition. I don’t know, I’m interviewing hundreds of people for jobs. We set up his whole Tiger team, and then Jason Miller was going to be the comms director.

He says, “Okay, we need you to go downstairs to the studio a couple days, a couple times a day. And we need to out there on these different shows and telling people who we’re picking and how we’re picking.” And so I become one of the transition media advocates, and then they offer me the OPL [Office of Public Liaison] position, which is basically to be the president’s networker in chief to help him grow a robust CEO community. Small businesses, medium businesses, large businesses, also intragovernmental affairs. That’s fits my … That’s in my wheelhouse way more, frankly, than being a comms director. So I’m like, “Okay, I’m going to do that.” I get offered the job, I put my 12-year-old company and my 70 employees up for sale because I have to. I had to dislodge myself.

I know.

Think about how stupid I am, right? I view myself as a patriot. I view myself as somebody that has had this unbelievable life in America and I want people who grew up similarly to me to have those same opportunities. Because we’ve moved from the aspirational working class into the desperational working class. If you really travel the country …

No, I get it.

We’ve gone from aspirational to desperational. We have to return to aspirational, and if I’ve got an opportunity to affect policy to help that, I’m going to sell my company provided I can protect my employees, and protect all the people in this room, who by the way I was gone from the company for a year and they’ve done an amazing job, by the way. So I want to protect them.

And so I’ve got four bids. I take the second-highest bid. It’s from a Chinese conglomerate. They’re a Fortune 50 company. Why do I take a $ 14 million lower bid than the other bid? Because they’re going to keep the jobs. The American-based company already has a capital management firm, and you know, private equity and fund to funds. They really want the fund and a few of our asset managers, they don’t really need the apparatus associated with the asset managers. So I’m like, “I don’t want to do that to my staff. They helped me build this company over the last 13 years.” I take care of everybody here. I pay everybody 100 percent of their health care.

But you don’t sell. You end up not selling?

No I sold. I sold.

You sold?

I sold to go serve the government. Then Rancid Prebis and Adolf Bannon, they don’t want me in the position, so they begin this narrative. This oppositional research narrative. China, China, China. They tell several lies about me to the president and all of a sudden I’m not allowed to take the OPL job and they’re using all these falsehoods as a reason why.

So I’m in a limbo now, and then I catch Reince lying and then I have to point out what a liar he is. And then the president and I have a couple conversations, he realizes now he doesn’t like them. And then he brings me in and then the fun starts for me. I had an 11-day odyssey.

10 or 11?

No, it was 11.

I don’t know. You can decide how long a mooch is.

A mooch is 11 days. Don’t hurt my feelings. Because you have July 21st to July 31st, you say, “Okay, that’s 10 days.” But I was there for July 21st and I was there for July 31st. That’s 11 days. Don’t hurt my feelings.

All right, the new change in the time of a mooch is …

It’s 954,400 seconds if you were counting the seconds.

Which you did.

It’s fun.

We’re here with Anthony Scaramucci. When we get back we’re going to talk about, I don’t know, everything.

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We’re back with Anthony Scaramucci. We’re talking about Trump, we’re talking about tech, we’re talking about all kinds of things. What do you think you’re going to do there? You came in guns blazing, essentially.

I came in as a … I don’t know Washington. I came in as a CEO. I came in as an entrepreneur. I didn’t come in as a slick political operative. So the president said, “You got to get rid of the leakers.” Okay, I’m going to get rid of the leakers. The same way I’m going to clean out a place here or you rip up a culture. You know. When you say good luck with it, I had them on the run. I did.

The president is kind of a leaker, it seems like to me. I’m pretty good at reading who the leaks are coming from.

Kara, let me say this. You’re always going to have leaks from the White House and you’re always going to have leaks in the political system. And in some way, leaks can be policy related and they can be beneficial.

Right.

I’m talking about the internment warfare leagues. The nastiness, the level of disharmony that was going on, the personal invective. This guy’s having an affair, that guy’s a drunk, this guy’s a globalist, that guy’s a nationalist. I’m talking about the whisperer versus the terrible, terrible leaks. Never going to get rid of the other leaks. I had those guys on the run.

By the way, when I got fired, the irony of the whole thing was they were so scared to leak the damn thing it didn’t get out there till two o’clock. I got fired at 9:37. I had those guys on the run, trust me.

Okay.

I had another 10 days, would have fired a couple more people, and I would have stopped the firing like a good CEO. I would have given amnesty and pardon to everybody else in the room.

It’s a warning.

Yeah, this is how the calls going to work now.

Right.

Now we’re not going to leak on the president. We’re going to support the president. We’re going to stay loyal. You are. And see, never-Trumper people that are sitting in the room and you always-Trumper people, we’re going to meld the process together. We’re going to get it together, we’re going to figure it out. And by the way, you never have to lie for me because I’m not a liar. And you don’t have to worry about me. You know I’m never going to have you have to go to the press corps and make up a timeline or do any of the nonsense that these people do. I don’t care. I’m never going to dishonor my parents by being like that. So good news for you guys is, you can relax.

One of the greatest gifts that a leader can give people that are working with him — remember, no one’s ever worked for me, people work with me — the greatest gift you can give somebody is to relax on the ethics. Meaning I only expect you to be 100 percent ethical, I’d never want you to even touch the line.

And yet you’re working at the White House. It doesn’t feel like an ethical place at any point, I have to say.

All right, well, that’s your opinion.

Yeah.

Okay.

Well, from the outside.

Okay, so that’s your opinion. And so by the way, the area that I was going to be responsible for is the only one I can control.

Right.

So me, I would work on that first. And then obviously if I had different roles inside the White House I’d work on the other things as well.

But I’m saying you’re describing somewhere where everybody’s not stabbing you in the back or front.

Yeah, well, I’m a front stabber but there’s a lot of back stabbers. And let me tell you something, these are terrible people by and large. They are vicious people. You probably have a lot of Silicon Valley people, I’m a Wall Streeter. Let me tell you how it works in Silicon Valley and Wall Street in my observation. You build your business and you build your career off of relationships. And so you’re trying to create like a big karma bank. I’m trying to do a mitzvah for you, you’re going to do one for me, we build a relationship. I’m totally cool with you making $ 100 million. Hopefully you don’t mind me making it. We’re all fine. Okay, we may be competitors once in a while but we’re both on the green team. We’re transacting over money.

In Washington, they actually get off on hurting each other. They actually earn badges or stripes on their lapel if they hurt somebody else. You know, “I crushed Swisher. I went after her with opposition research, I had 10 reporters write nasty things about her, and she fell from grace. Look at me, look at how cool I am, look how important I am.” And they do that to each other and they know that they’re doing it to each other and they admire it from each other.

But Trump did bring them in, as you know.

No, no, no, no, no. Time out a second. Time out a second.

Who hired them?

You’ve got to be fair. It’s been going on like that for 50 years.

Of course, of course. But I am saying he didn’t change that.

He didn’t change it because he’s a New Yorker. He descends on the area and he mis-sizes the area, if he’s going to be honest with himself. That’s why he’s a classic entrepreneur now, he is making so many changes because he has to. Entrepreneurs have to go through heavy turnover, you know that from Silicon Valley. You can’t get the culture and the personnel right Day One. You start flipping cards and building a different rotisserie team.

This is a lot of turnover, even for a startup.

A lot of turnover.

The Google guys, they stayed together forever. Facebook, the same exact thing, 10 years.

But that’s why they’re Google and Facebook. Okay, but there are other companies that are smaller or maybe not as successful that had heavy turnover in the beginning but are still decent companies.

We want more than a decent company from our president, presumably.

You’ve got to get the personalities right. If you don’t have the personalities right, you’re not going to get … You’re not going to have …

What do you imagine these people’s sort of …

It was like five or six things that did me in. Myself, I did myself in.

That phone call.

Yeah. That phone call. I trusted the guy, made a mistake there, so I have to own that. So I would say I did myself in. I think my first press conference did me in. I don’t know if you saw my first?

I did. I was fascinated by it.

I think that did me in. Too honest. Not slick enough, political operative. Not spinning enough, just talking very straight to people. I knew that the knives were going to come at me for that. The president putting in the memo that I was reporting to him directly.

Yeah.

That had a factor in it.

Because …

Well, because if you’re John Kelly and the president’s got you reporting to him directly, you just come in as a chief of staff, the first thing you do is remove the guys that are reporting directly to the president.

But that makes sense.

It makes sense. I never had a bad thing to say about John Kelly as a result of him firing me, God bless him. He had the right to do that and I took it like a man. You’re asking me what I think did me in. Then the other thing that did me in was I got hired to be a hatchet man. So when you get hired to be a hatchet man, the knives come out for you as well. I told Steve Colbert that I thought I would make it longer than a carton of milk in his refrigerator. I didn’t think I was going to make it that long. I was smart enough to know that it was a 30-, 60-, possibly 90-day job for me. I didn’t think it … I don’t see it as being an everlasting job.

But you pulled down Reince Priebus with you.

He had to be fired because he was the biggest leaker in the system. He’s a very dishonest guy, unbelievably insecure, he had to be fired. I mean, he was doing so much damage to the president and also he wasn’t staffing positions. And you know, if you were a never-Trumper and he put you in a position, if you’d like Trump he would find a way to block you. He was a disaster. But look, I would love to debate him on live television. I would love to debate him in a live forum.

He can’t do that.

He can’t do that.

What about Bannon?

Bannon is a different guy. I mean, he’s a very smart guy. He’s intellectually sound from the point of view that he’s very well read. He has a philosophical and political point of view. For all of his railing on the system he’s actually a cuck of the system.

Okay, so explain that term.

Okay, so he’s a cuck. You know, meaning like he is a hypocrite. Exactly. He’s actually a cuck of the system. He went to Harvard Business School, he worked at Goldman Sachs, he was a Hollywood producer, he worked in Washington.

He did check a lot of elite boxes.

He is an f-ing elitist. Okay, so all of this nonsense about him not being an elitist. He dresses like a hobo but he’s an elitist. But what he is is he’s got this messianic complex about himself where he thinks he has the answer and others do not. And so when you’re a messianic figure like that you do things that I said: You focus on your own brand, you care only about your personality, it’s your way or the highway. You don’t play well in the sandbox with others unless they’re playing and building your sandcastle. And so you know he’s a human walking disaster. It was also his political philosophy. He’s now at least admitting that he’s a racist. I mean, he’s openly admitting that he’s a racist, which you know is absolutely disgusting.

What’s the attraction to him by Trump then?

Well, I think it’s more complicated than that. I think you know Michael Wolff didn’t get that, right? We’re struggling in August. The Republican establishment is evacuated. It’s August of 2016, we’re at Woody Johnson’s house, now the ambassador to Great Britain. The Mercer family is there. They’re trying to figure out if they’re going to engage with then-candidate Trump. They had left the Crew situation. He’s now the declared nominee. They put five million into the PAC and they recommend Steve Bannon and Kellyanne Conway to the campaign. So they joined mid-August, the campaign.

And so I think the president, then the candidate, said, “Okay, listen I need to shuffle the deck here.” So he took those guys on. And then where I think the president has an issue with Bannon is that the president was already well ahead of Bannon on the desperation of the working class. The president was already ahead of Bannon on what the issues were for the core labor force of America and what the anxiety was. Bannon may have been there as well, but the president’s point, I think, is the right one, he beat 17 or 18 candidates and now he’s going neck and neck with Secretary Clinton. And so Bannon was trying to take all the credit for that. He had this guy Josh from Bloomberg, right, the devil’s bargain. Trump’s my hand puppet. I’m going to use Michael Wolff as my coming-out party. Trump’s the empty vessel, I’m the genius. All of this stuff was nonsensical, the guy needed to be removed.

But when you say what was the attraction, Trump’s an entrepreneur. The attraction was I needed something right then and there to help me so he brought those players in. And then — you can like this about Trump or dislike this — he then felt an obligation to Bannon and Priebus because of their roles inside the campaign. And so he wanted to reward them with high-profile jobs. That was a mistake because those guys didn’t care about him. They cared about themselves.

So what about now? He’s talked about it. “I like it chaotic. This is the way I like it.” Is that a problem from your perspective?

From my perspective it isn’t because …

It looks crazy from the outside, you know that. It does look a little bit crazy.

It’s not crazy.

Every day it’s a different thing. I feel like I can’t get in the shower without something happening by the time you get out.

Okay, so turn the news off. Okay, economy is growing, wages are up, he’s not calling for massive deregulation because he’s too smart for that. He’s talking for getting it to the middle of the pendulum.

It’s so business-like. The Dodd-Frank thing is about to go.

Well, Dodd-Frank is being modified. You have to remember, you have to accept some level of banking failure if you want the economy to grow. You don’t want to … Look, again, another axiomatic fact, life is unsafe. If you want the government to make you safest, then you’re going to be living in a society that doesn’t grow, and you’re going to live in a society that restricts animal spirits. You don’t want that. You’re an entrepreneur, you live in Silicon Valley, right? Or wherever you live. You don’t want that. You have to have people’s equity at risk in the community banking system and you have to allow some community banks to potentially fail as long as you don’t have systemic banking failure. Okay, so you can’t over-regulate the system then you won’t be able to grow and you will lose the wage growth opportunity.

All right, so keep going on the why it’s not chaotic.

I didn’t say it’s not chaotic. I said why it’s acceptable.

Right.

I didn’t say it wasn’t chaotic. It’s chaotic. But it’s acceptable because the nature of his personality is he’s an entrepreneur. He tried to fix or drain the swamp using cesspool operators and swamp creatures. You can’t bring Steve Bannon, who’s ironically railing on the swamp but is actually the Creature from the Black Lagoon, into the situation to drain the swamp. He’s going to add more sewage to the swamp. You can’t bring that …

But that’s precisely what he did. That’s what the president did, if you’re saying that.

Well, that was a mistake. He’s changing the personnel.

Right, but it’s not just them. It’s the global elitists who are leaving. Gary, Deanna.

Let’s give the president a little bit of credit. If you’re building a building, you’re going to hire people that can build the building. If you’re building a golf course, you’re going to hire people who can build a golf course. So he says, “Okay, I’m going into government, let me hire some people that are experienced hands in the government. Here’s what I want to do to change the government.” They go, “Well no, no, no, no. We like that system. That’s our business model.”

So he hired people, said, “Okay, help me drain the swamp.” And they’re like, “No, no, no, no. We’re not draining the swamp. We’re here forever. You’re going to be here for four years, possibly eight years, we’re going to add more sewage to the swamp. We’re going to turn the swamp into a gold-plated hot tub on you. We don’t want to drain the swamp.” So he’s figured that out now and now he’s got to change the leaders.

But it’s not just that group, it’s the other group. It seemed like there were two competing groups in the White House. Dean, Gary, Deanna, Dina Powell.

I think they left for different reasons. You’d have to ask them why they left, okay, but I think they left for different reasons. Listen, the good news is the changes that the president’s making now, my prediction is this takes me back to June of 1982 when Ronald Reagan made some personnel shifts. He fired Al Haig, he did a couple other things on the margin, and then he got the team tighter and better. It was after his assassination attempt, probably a year, and things were good. And then from June of ’82, the president did way better. The bad news for the president in June of ’82 it was too late and he got schmeisted in the midterm elections in 1982.

Yep. So did Obama.

So did Obama. So did George W. Bush in ’06. I mean, you can name … This is just what happens, this is what happens in our system. So the president has a chance to keep the House but they got to engage quickly. They’ve got to build a political operation above and beyond what they have right now. Otherwise you got 23 seats in jeopardy and he’ll lose the House.

Well what about a White House operation? I mean, some of these appointments that he makes do seem crazy. The FAA guy, the 24-year-old that was running a big … These things, why does that happen? What occurs in that administration where you don’t get many qualified people?

I’m being honest, I can’t answer it, but I do think some of that comes from the way Priebus set the thing up. So the very thick restrictor mechanism, literally always-Trumpers couldn’t get jobs in the White House.

Except now.

Well, it’s starting to happen now. But I mean, again, you know that was the way Priebus …

What do you imagine is going to happen in the next months ahead?

Good things. Look, again, you may not like him but I’ll just let you know, he ran a very successful business. The business went into bankruptcy, or almost bankruptcy, and he rebuilt it. He ran a very successful television program, I think it was on the air for 12 or 15 years. He went from zero political experience to the American presidency in 17 short months. So I mean the guy is talented. We have to step back and look at it. He’s talented so he’ll figure this out. He’ll shift the personnel mix. The seven or eight people that will go, that are about to go, and he replaces them with people …

Well just this week there’s Tillerson, Madius is probably going.

We’ll see. We’ll see. You think Madius is going? I don’t think Madius is going.

You don’t? Well I’m just saying.

I don’t know but we’ll see.

You feel like there is going to be stability? Because it feels constantly unstable. Or is that just …?

No. I think there will be once he gets the personnel around him that are philosophically in sync with him, once he gets people around him, this would be a good test for him. They’re in your presence, and they’re being obsequious, and then they leave, and they run to their Georgetown salons, and they snicker about you. I think you’ve got to get people in the room that are honest to you in your presence and then when they leave, they back you up, that they’re loyal.

Right, okay. Okay.

Even lying Ryan Lizza, he wrote in his article that I’ve never said a bad thing about the guy.

No, but I think he probably quoted you pretty accurately in that conversation, yes or no? Or not the conversation.

No, 100 percent. I haven’t walked back anything I said. But he had to admit that I’m not one of these do …

I don’t think he ever said that.

No, he literally explicitly said, “Hey, in fairness to Anthony Scaramucci, the guy doesn’t say anything bad about the president.”

Right, right.

And nor will I ever, because I like the guy.

What if there are things that you disagree with? Just don’t say them? You disagree on gay issues, for example. It’s got to be … It’s appalling.

I don’t even know if I disagree on gay issues, you’d probably have to ask him directly. I think he’s a New Yorker when it comes to gay issues.

Except for … Some of these rollbacks are clear. I’m sorry, no, pushback.

Okay, well, you may know it better than me.

These robots are obvious.

Let’s talk about the press for a second. Okay, I think you can be loyal to the president and you can disagree on tactics and strategy.

Okay. Except tactics and strategies are people’s lives.

If you’re going to have real friends, real friends tell you that you have a booger in your nose. Real friends tell you that you have bad breath. And real friends tell you you have food in your teeth, but they’re still your friends. They still love you, they want you to do well, right? So for me the war declaration on the media is nonsensical. Steve Bannon declared war on the media at C-PAC this year.

Trump seems to be enjoying it quite a bit.

It’s a mistake.

And what is his response when you say this?

I’m loyal to the president and I’m supportive of the president, but that is a mistake. You’re making a mistake with a war declaration on the media because No. 1, you’re not going to win that war. No. 2, you’re not picking the right battle. No. 3, it’s okay to have an adversarial relationship with the media but if you understand your role you have to be cross-checked and hand-checked by the media. Because the founders said, “We don’t want anybody too power-hungry to get these positions because we know that power corrupts absolutely.” Like Lord Acton said. And so the fourth … the state’s responsibility is to hand-check the people that are in power.

How do you judge the press’s performance in this?

With the media?

With the president in this administration?

In what category?

How do you think they’re doing?

Well see, that’s the irony. So the overall grade is actually …

For the press?

For the press, no. Very bad.

Because?

I would say his overall grade as it relates to policy — and the country is moving again, and we’re growing, and there’s a lot more opportunity, and there’s less slack in the employment markets, and there is a higher-quality job coming for the average worker. Those things are all very, very positive. That’s why he’s going to win reelection. But there’s a disconnect because of what I said, the prism and the kaleidoscope. There’s a disconnect between how well he’s doing and how the media is reporting it.

That’s what he says, too.

But this is true.

Look at the recent election.

It’s his fault. It’s his fault because you can’t declare war on the media. The fact that he hasn’t had a CNN interview, a major network television interview, or you pick … I don’t know, let’s say MSNBC. Pick an adversarial, or a perceived adversarial network, or news organization, the fact that he’s not in there with it … Let me tell you something. This guy’s got a force of personality. During the campaign he was on Morning Joe. During the campaign he was on these …

That bridge seems burned.

That bridge possibly is burned for now, but my point is, is that why lose your voice? You have this force of personality, you won the American presidency, you’ve been in the media for most of your adult life. Why lose that voice? Why lose that voice? Because Steve Bannon said, “Let’s declare war.”

So why is he doing it?

He’s a combative, competitive guy. He doesn’t like what’s being written about him.

Because he looks like a crazy old man shaking his fist at the television set.

I won’t use the word fake news because people obviously get upset about that, but how about inaccurate news or misinformed news? It’s happened to me. Okay, someone has said things about me that are categorically untrue. Please don’t say those things. They say, “Well we’re going to say them anyway.”

You have to understand something, there is standards, even the New York Times versus Sullivan case, you can’t maliciously say that about me. You’re accusing me of being a felon. You’re saying that I’m under investigation as a result of my role in the Russian situation, which is categorically untrue. Please do not write that about me. “Well I’m going to write it about you anyway.”

“Okay, well how is it sourced?” “I’ve got one source.” “Okay, could you please call Mitch McConnell’s office? I’m not under Senate investigation. Can you please call Steve Mnuchin’s office, I’m not under Treasury investigation.” “No, we’re going to write it based on the one source.” Okay, well I have a deep enough pocket and I’m a tough enough person where now we’re going to go to war. Okay, so to me it’s out there whether you like it or not. The we’re going to hit you, discolor you, dehumanize you, characterize you, disfigure you. So the president’s sore at all those things. But his strategy of combating that could be way more effective.

Now in addition to using Twitter and hopping over the mainstream media, he could sit in the gladiator ring with them. He’s very skilled and he can probably beat them more often than not.

All right, in that vein though, you mean it’s always about the coverage and not the actual thing? The Charlottesville comments. The other day lying to Justin Trudeau. All kinds of various things around the gay stuff is appalling. These executive orders have been, none of this is problematic from your perspective.

No, so I have to confess here. I didn’t see the executive orders so whatever they were, if they were anti-gay I would formally and publicly …

The transgender thing is true. Then the one after it and Charlottesville.

Did he walk back the transgender thing in the military?

No. The military has, he hasn’t. The military doesn’t agree with him.

Okay, the military doesn’t agree with him and they walked it back.

Right. The military did, not the president.

Anything that’s anti-gay, I have no problem publicly renouncing. The Charlottesville thing, you can get a look at the tape. My first television appearance after my firing was on George Stephanopoulos. I said that there can be no daylight or equivocation on Nazis. Nazis are bad.

But what do you say to this? This is the president saying this.

I think in that case, again …

That was not misunderstood.

I’m not an apologist for the guy. I will tell you I would call balls and strikes and tell you where I see things. Again, people can like me or dislike me for that but on the gay thing, if it’s anti-gay I totally …

Well I’m just using that.

Okay, well, if it’s anti-gay, I totally and wholly disagree with it unequivocally. And as far as I’m concerned, you know I have gay family members.

You don’t have to have gay family members.

I’m not even saying that. I was supporting the gay community before I realized I had gay family members. I just think it’s stupid. Okay, life, liberty and the pursuit of happiness is only for straight people? That is stupid. We need to change that.

I’m just using that as an example. Some of these things are real problems.

So unequivocally denounce that. I have no problem. Charlottesville, I was on public record on national television saying that was wrong. I said it to Steve Colbert. I’m saying it now on your podcast. I said it to the president.

And what does he say when you say, “What are you doing?”

Well, he tried to walk it back and say that he was trying to say that there were bad people on both sides. He malapropped and said that there were good people on both sides. But it really doesn’t matter, what matters is there can be no daylight on those things. And so what he did was classic him. He got to the … he flew to Washington from Bernardsville, got to the podium and denounced everything that he said on that Saturday. And then on the Tuesday at Trump Tower he went back to what he was saying because he was getting frustrated with the press. So again, I mean …

Guns, I’m going to do something then not do something. It feels like a lie.

The gun thing is …

Complicated. I get it.

The gun thing is very complicated. Let me tell you, the gun thing is very complicated. If you hate the Second Amendment and you’re listening to your podcast, I got bad news for you, you’re always going to have a Second Amendment. If you’re lucky …

I’m talking about his actions.

If you love AR-15s and you’re listening to this podcast, I got really bad news for you. A couple more mass killings like this, you’re going to have a groundswell of support.

There is a groundswell of support.

Yeah, but I mean there’s going to be an even bigger groundswell of support.

I’m talking about the president himself.

So to me, I would get ahead of it with legislation.

But getting on the air and saying you’re going to do something about it and then rolling it back, that’s the kind of stuff that is disingenuous. Just absolutely.

Okay, but that’s the problem with the political system, right? Because he’s trying to find the mark. He wears a lot of stuff on his sleeve as a New Yorker.

He just says it out loud.

So he’s saying it out loud. I’m going to do this because that’s what he really thinks he’s doing. Then he’s influenced another way. I’m going to do that because that’s what he’s really thinking he’s doing. But I do think that he’ll get to the right conclusion because I think he has the support of the NRA. And I think the NRA, say what you want about the NRA, they’re not stupid. They know that a couple more mass killings, a couple more killings of the innocents, you’re going to have a bigger problem than they currently have. So they’ve got to get somewhere on the guns. I’m not a one-size-fits-all person. If you’re in Montana on a ranch, you probably the gun legislation and the control.

We don’t have to debate gun control.

It would be different.

Yeah, I’m talking about the messaging is really …

The message. But listen, there’s no way you can tell me that there isn’t an intersection of values on this debate where normal people can have a gun for recreational or protective purposes and we can figure out a way to screen out the abnormal people.

Of course. Which is what he said reasonably and then shifted.

There’s no way that we can’t do that. Now I get the NRA. One chink out of it wants to take your rights away, they’re never going to get them back, and blah, blah. But let me tell you something, we can figure it out.

When we get back we’ll have more words of wisdom from The Mooch.

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We’re here with Anthony Scaramucci at his office in midtown Manhattan. We’re talking about everything from Trump to tech to where the next election cycle is going. I’m going to finish up on two things. One, your book and the election stuff. You keep saying he’s going to get reelected.

Yeah.

Why?

Just look at the data. I’m a data-dependent person.

Just looking at this election in Pennsylvania.

Well, remember midterms, let me use President Obama’s own words, midterms of 2010. “I got schellacked.” His own words. He goes on to win a resounding reelection two short years later. It was 53-47. No, I mean he crushed him. Go look at the electoral college vote for Obama in 2012. Believe me, I was close to the situation.

It wasn’t a Reagan schellacked.

Well that was 49.

We’re never going to have those again.

I don’t think so. Not in this county. Not with all of these podcasts, people are locked in, man. But back then you had uniformity to press, you won 49 states back then. But on him, and just studying the data going back to 1880 to today, it’s very hard to dislodge a sitting president. A rising economy, it’s virtually not happened.

Someone will then push back and say, “Well what about Lyndon Johnson?” Economy was rising, he stepped out of the race because of the Vietnam War and the fear of Bobby Kennedy. Okay, but if he stayed in the race, people say maybe he wouldn’t have won reelection. I’ll cede them the 1968 election. Aside from that, go to 1880 to today, you don’t get knocked out unless you’ve got a big recession, some dramatic thing is going on.

Well, this is a special president in every way. I mean, he’s different than every other one so you could have a different outcome.

This kid Conor Lamb, a gun-toting …

A conservative Democrat.

A conservative Democrat. If you told me that the Democrats were going to pick a conservative Democrat …

Oh, there’s been conservative Democrats. That’s not true. There’s been all of that … In Pennsylvania, you mean?

No, no, no. No, I’m talking about the 2020 nomination, you’re at the Democratic National Convention, and the Democratic Party picks a conservative Democrat.

No, they’re not.

They’re not. Of course they’re not. Then I think they have no chance to beat him. They have no chance to beat him. They’re not going to beat him with … Because the American people are smart. They know that the left-leaning strategies on the economy and things like that actually don’t work. They like the social progress.

Who would be someone you’d be nervous about against Trump?

You’d have to start naming people. I tried to get Donna Brazil to name them on the Bill Maher show, she wouldn’t. But you have to start naming them. There’s nobody that I’ve heard that can beat Trump. Nobody. He’s a force of nature beyond anything …

Harris Booker.

She’s a very nice person. I met her on an Israel trip. She’s an elegant, nice person. I don’t think she can beat him. I just … No. 1, she doesn’t have his name recognition and his force of his personality.

Joe Biden.

Okay, Biden is an interesting guy. He is going to be mad at me now for this right because I love Biden. You can see there’s a picture of me and Joe at the World Economic Forum because we were supporting gay rights globally. Okay, and I was a big part of that with Chad Griffin. And I love Vice President Biden, but Vice President Biden fumbles the ball upon contact. So he does. I mean, he did it in the 1998 election. He did it against Barack Obama in 2008. He is a lovable guy from Scranton. Love him to death. I have no problem with him as a human being and he’d probably, arguably make a good president. He’s way smarter than people want to give him credit for, but he fumbles the ball on contact.

You can’t fumble the ball on contact. This is the NFL. You’re going in there, you’re getting hit left and right, and then people will then say, “Well didn’t you fumble the ball on contact?” “I didn’t even get a chance. I got steamrolled before I could even get the ball.” Are you following what I’m saying? But maybe I would have but probably not because I’m pretty good at debating. But the vice president …

So you don’t think there’s a Democratic candidate that can go up against him?

No. If they were smart they would say, “Okay, listen. We can’t stand Trump. And yes, I know we were lefter then left now but if you want to beat this guy we’ve got to bring on some of the anti-Trumper Republicans. And the only way we’re going to do that is we need a Conor Lamb-like candidate to go after this guy.” And you guys don’t have one of those. And my prediction — and you immediately said, “They’re never going to do that.” If you had one of those, you would reject him or her onto the ash-heap of history in two seconds.

So what about the midterm elections? That could cause stuff …

Going to cost them. It’s going to be tough now. I said a month ago that I thought that he could win, to the great surprise of people. But after this election and watching the lack of political operation and lack of apparatus that was deployed in PA18, if we don’t change that dramatically, we have to change that quickly because we’re already in March going into April, going to be tough now. He’s got the economic elements to surprise people. The disposable income is up, the economy is doing well, with the right political organization and apparatus you could surprise people.

The House and the Senate. He’s in big trouble.

They’ll probably move to impeach him, but then you know you got to … Look, they moved to impeach President Clinton. They impeached them and then you couldn’t get a trial together.

There’s also the Mueller investigation hanging over it. I’m not thinking Russians with the money laundering and other things.

I’ve been wrong about so many things. I think he comes out of the Mueller investigation okay. Maybe it’ll be people in the periphery that are getting hit or …

Even his family?

I don’t know. I don’t know. I’m not close enough to it but I think he comes out okay. The guy’s never used email, rarely uses his cellphone. I didn’t see any collusion.

I don’t think Russia is the issue, it’s money laundering.

Okay, maybe that is. Again, I wasn’t there so I’m don’t know.

I’m not sure you can be in real estate in New York and be in debt without some …

I don’t know. You’d have to look into that and maybe they have something.

I’m not a prosecutor, I don’t have subpoena power.

Maybe they have something, maybe they don’t. I don’t know. My prediction is, though, he’s the sitting president, it would be hard to take him out. That’s my prediction.

Okay, last question, your book. So your book … We’ll start where we began. It’s about a blue-collar president … You’re talking about one of the richest kids …

It’s a working title. You know, Donald Trump Jr called his father the blue-collar billionaire.

Yeah. So the rich kid said the rich kid was a blue-collar billionaire.

Yeah, but he was, though, that’s the irony of that soup. Because he saw something that the other global elites didn’t see.

The billionaire who likes the blue-collar people.

Kara, they didn’t see it. His secretary. Let me tell you something, okay.

Who is more blue collar if you think about it? Comes from a much more modest background.

They may not like me for saying this, okay. I’m okay with it now. I’m comfortable in my own skin. There were 18 or 20 candidates on the field in 2016, there were only two candidates that saw the economic desperation and duress. Bernard Sanders, Donald J. Trump, the other guys didn’t see it. I’m just telling you. Oh, and by the way, I got my hand raised here. You’re looking at a guy that didn’t see it because I spent 30 years of my life going up the economic spire of opportunity, and class transcendence, and I wanted to be rich. I wanted to go to the World Economic Forum. I wanted to talk to cool people like you. I wanted to be on television. I wanted to have financial independence and take care of my family. And so I was very driven and I started to push myself into the world of collective biases of the elites and I didn’t see it.

It wasn’t until I started campaigning with the president and then the candidate I said, “Oh my God, oh my God. He’s talking to the people that I grew up with.” These are the people I grew up with and my parents are insulated from these people because I’m paying for everything and making sure they’re okay. But the people I grew up with are having a rough time right now. And he sees it, he’s a billionaire living in a tower near the Tiffany store, he sees it and I’m a dummkopf. I did not see it. Why didn’t I see it? Because I’m tunneling myself in.

Let me finish by asking you …

So to me the blue-collar president means that he recognizes the economic duress and he’s trying to implement policies to help them. And thus far, 13, 14 months into it, the economic data suggest that there are elements of what he’s doing that are actually working.

Is he going to somehow try to stop the divisiveness? The Twitter attacks? I know that people say it’s beneath the president but there is a point where there is not decorum, but just simple behavioral.

So here’s my prediction. Do you want my prediction? He gets the right staff around him, guys he really trusts, men and women he really trusts, that are like I said, they passed the snickering test. You know, they’re not walking out of his office snickering in a Georgetown salon about him because they think they’re above him and he’s beneath them. He gets people in the room with him to work with him, he dials back all the nonsense on Twitter. That Twitter stuff in my opinion comes from “I’m undefended. I don’t have the appropriate media advocacy. They’re hitting me. I’m going to talk about Mika’s facelift.”

Okay, don’t talk about Mika’s facelift. Let’s use Twitter for policy. Let’s use Twitter for strategy. If you want to be cute and New Yorker on Twitter that’s fine, but let’s not go into Mika’s facelift. We don’t need to go in that direction.

Right, which he does.

At this point he thinks they’re hitting him so he’s going to hit them back and he uses Twitter because he’s got 50 million people on Twitter now. And so that’s, I don’t know, I think the New York Times has a three million person population of people so divide that, he’s got 17 times the New York Times.

Some of them are bots, Anthony.

I understand that. But in other words, let me put it this way. When he puts something out on Twitter, does it not show up on the world news?

Of course. Crazily enough.

It does, right? He’s getting to hundreds of millions of people off of Twitter.

So one last question about tech, because this is a tech podcast. How do you look at tech, tech which is quite opposed to Trump, I would say overall but not completely. He has been hostile at tech.

Yeah, there are people in Silicon Valley — and don’t worry, you’ll remain nameless for this podcast. I’m not going to out you guys. But there’s a large group of people in Silicon Valley that because of the fascism of the left, because the left is primarily fascist, that you can’t express your views.

We know, Peter Thiel is moving to Los Angeles.

Forget about Peter Thiel. He’s out of the … You know the gay community took a while to get out of the closet. It’s socially acceptable now. There’s a large group of people that are in-the-closet Trump supporters in Silicon Valley, trust me.

In the closet?

In-the-closet Trump supporters because they can’t come out of the closet because they’re shamed by leftist fascism. You know, look, I’m a victim of leftist fascism. I can’t even go back to my alma mater. I’m not allowed back on the campus of the university because I’m a Trump supporter. I’m fine with it.

Oh you long-suffering people. You’re not suffering, come on. You get to say what you want. That’s crap.

I get to say what I want because you’re cool and you’ve got a microphone in front of me. There are certain areas people don’t like what I’m saying and they want to keep me away from them.

Defend it. Defend it. They’re not going fascist. A fascist is they make you do something. I can’t imagine anyone making you shut up.

If I was an actor in Hollywood and a Trump supporter, I’m getting a lot of work?

I don’t know.

Okay. All right, well, you know, they don’t get a lot of work. So here’s the bottom line …

Some of them are bad actors, let’s be honest. He doesn’t have a good coterie.

You’re so funny. You have a lot of in-the-closet Trump supporters in Silicon Valley.

All right, okay. But where does it come with tech with all the different things with Russia, with their responsibility? There’s this sort of backlash to tech.

Here’s the good news. Okay, you’ve got a free-market president. You really study the originations …

Who likes terrorists, but go ahead.

You want to talk about the terrorists? I can talk all day about the terrorists.

No, there’s sanctions and I think they’re sanctions …

The playing field is uneven. He’s got to even up the playing field. Has to. They know he has to and he will. Just like they raised the dough on NATO.

He’ll make so many compromises in it it won’t matter, but go ahead.

Let’s go back to what you want to talk about.

Tech.

The good news is he’s going to leave him alone. They’re probably not going to leave him alone. They’re going to probably pour money into some left-wing Democratic candidate but …

I don’t think they’re lefty at all. I find them incredibly conservative, but go ahead.

What are? The tech guys?

The tech people.

Yeah, I know that, but they’re anti-Trump. I’m telling you right now.

They’re anti all this immigration nonsense. It’s non-sense.

You want to see the floodgate open for the Democratic party from Silicon Valley? Pick a Conor Lamb, not him but pick an older Conor Lamb. I don’t know, convince Bob Iger to run.

He’s not doing it.

Convince Howard Schultz. These are practical business people that the Silicon Valley guys would say, “Hey, I’m probably more libertarian than I am a liberal. Let’s go with that guy.” You following what I’m saying? And then you got a chance. Other than that, you got no chance.

Where is tech now going forward with all these attacks on Facebook and Twitter? It’s very clear the Russians used the platforms.

My opinion is that you got wickedly smart people at Facebook and Twitter and these other places, and they’re all new. And so they’re going to take a while to get to the right editorial objectivity where fair people can express their opinions fairly and they’ll be less shadow banning on either side or whatever it might be. And it will by and large work out and there will be a period of tumble like there is in any society where you’re seeing radical Schopenhauer breakdown of a system in a rebuilding of a system.

Just like there was when we went from horse-and-buggy to horseless carriages, and just like every time we’ve had a massive S-curve move in technology. So my prediction is it’ll be a little shaky and it’ll be a little polemical in the beginning but then it’ll sort itself out. And that these people that are running these companies — I mean, it’s just my opinion so take it for what it’s worth. They’re by and large fair people. They by and large want the freedom. I am struck by what I said that Silicon Valley strikes me as way more libertarian.

It is, 100 percent. That’s what I mean. They’re not liberal.

So libertarians are actually for gay marriage. They don’t care what people do in their bedrooms. Okay, and so for me I think it will work out. The good news for them is that the president is ignoring them. You know, he’s got four things. He’s ignoring them. He’s got four things he wants to work on.

He needs to pay attention soon. There’s some things coming down the pipe. Robotics, automation, self-driving. Big job displacement issues possibly, possibly not.

That’s why he’s got to tackle the educational issues and technical skill training. And I’ll leave you with this one thought. I’ll leave you with this one thought.

All right, you leave me with one thought.

One thought. You want one thought?

Yeah.

Because you interview a lot of people.

Yeah.

And if you get a public servant on your podcast, why don’t you ask them what the 25-year plan is for America. Say, “Hey, tell me the politician that has a 25-year plan for America.” That’s a data-dependent plan, that isn’t focused on the left or focused on the right, but is actually a right or wrong plan. Meaning that here are policies for the United States, forget about left and right, are they right or wrong for America? And who’s the politician that’s focused on that, and who’s the politician that’s going to lay out the realness to the American people that, hey, I’ve got bad news for you. We’re not fixing the deficit in a cable news cycle. I got really bad news for you. We’re not fixing the job displacement from robots in five years or 10 years, it’s going to take us 25 years. I’ve got really bad news for you, our infrastructure is crumbling.

And AI is going to take your job.

AI is going to take your job, and the infrastructure is crumbling, and we’re going to have a third world country run by robots if we don’t come up with the right policies. So who’s doing that? And so I will leave you with that and I would say it rhetorically but I would also say it emphatically, that America needs a 25-year plan. And let me give you the bad news: The Chinese have a 50- and a 100-year plan.

They do.

And so America is not going to have that because it’s America, but we could have a 25-year plan. And we could have a bipartisan commitment to that plan to help our children and our grandchildren. And the one thing I learned about Washington and wanting to stop the nonsense and knock it off with each other with the stupid backstabbing and the subterfuge, and work on the 25-year plan to help America.

Why don’t you work on Trump getting off of Twitter and doing that. It creates divisiveness.

I was there for 11 days.

Those long 11 days.

I couldn’t get him to stop tweeting on Jeff Sessions. He’s going to do what he does, but he’s going to be fine for Silicon Valley and there will be progress made under his administration, but it’s not the answer long-term. We have to develop a 25-year plan.

And who’s responsible for that? Politicians, the tech companies?

Well, I think the citizenry. I think that we have to activate citizens, we’ve got to activate.

Are you running for office? This is my last question. Would you run for office?

Do I look nuts? Do I look crazy?

I don’t know.

First of all, how could I even run for office? Everything that I just said doesn’t fit any party.

I don’t know.

Well what party does that fit in?

The Mooch party.

Oh yeah, The Mooch party. That’s going to fuckin’ win … I’m sorry about that, I used the F-bomb.

That’s okay, I don’t care.

That’s going to win 11 votes over 11 days.

I have a question. You allow people to make fun of you using The Mooch and the whole thing, you’re very humorous about it.

I could care less.

You like it though, too.

I don’t necessarily like it, I just think that what other people think of me is none of my business. I could care less. You know the irony about being called The Mooch, I’ve been called The Mooch my entire life since the second grade in 1972. And it turns out that the left loves it because it’s a “pejorative” because a mooch is a mooch, right?

Money and squeaking.

The irony is, I’ve been more mooched then Benna Moocher, trust me. You could just look at my philanthropy. But at the end of the day, I don’t care. That’s my last name. My last name is Scaramucci. My friends from high school call me Mooch. That was on my varsity football jacket, Mooch. So big deal.

I’m sure it was. Are you going back to the White House?

I’m not even allowed in the White House. How can I go back? I’m on like the naughty list.

You can’t get within a block.

The guy is a little bit thin-skinned.

You can tell me a little bit.

I told the truth, big deal. I said the morale is terrible in the White House. Don’t hit me. Why don’t you back off of me, I’ll back off of you. You’re not going to back off of me, I got no problem going after you.

All right, Rocky Balboa, this has been entirely enjoyable.

Come on.

Thank you so much.

Rocky Balboa. At least you didn’t say Vito Corleone. All right.

I was thinking it.

All right.

Thanks.

Bye.

Mooch, it was great talking to you. Thanks for coming on the show.

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Recode Daily: Facebook reels from the blowback to its user-data expose

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Whistleblower Christopher Wylie came forward to expose the data-harvesting practices of Cambridge Analytica.

Plus, one of Uber’s self-driving cars killed a pedestrian, Facebook rolls out Patreon-style subscriptions for video makers, and an ode to a beloved meme.

Facebook’s top security officer is leaving the company after disputes about Russia. Alex Stamos’s planned departurereflects heightened leadership tension at the top of the social network” over how to handle interference from Russia and other actors who wanted to abuse the social network. “Some of the company’s executives are weighing their own legacies and reputations as Facebook’s image has taken a beating.” Facebook stock is also getting bruised: Mark Zuckerberg’s net worth dropped by about $ 5 billion following news that Facebook data from 50 million users ended up with the Steve Bannon-linked data analytics company that helped get Donald Trump elected. Facebook has suspended the accounts of whistleblower Chris Wylie and is auditing Cambridge Analytica to see if it still has the Facebook user data it promised to destroy in 2015; the U.K.’s data protection authority wants a warrant to search the offices of the London-based political data harvesting operation. A British undercover investigation secretly filmed Trump’s election consultants describing how they use bribes, sex workers and other dirty tricks to entrap politicians. Here’s a deep look into how Facebook groups are being exploited to spread misinformation, plan harassment and radicalize people. Keep current with this story with our continually updated storystream. [New York Times]

[Want to get the Recode Daily in your inbox? Subscribe here.]

One of Uber’s self-driving test cars hit and killed a pedestrian in Arizona on Sunday — a human was in the driver’s seat but not controlling the car. Uber has pulled its autonomous test cars off the road in San Francisco, Pittsburgh, Toronto and Tempe, Ariz., where the accident occurred; the National Transportation Safety Board is conducting an investigation. [Johana Bhuiyan / Recode]

Tronc chairman Michael Ferro announced his retirement from the publishing powerhouse yesterday — the same day that Fortune published a story detailing two women’s reports of his inappropriate sexual advances. CEO Justin Dearborn will succeed him as chairman at Tronc, the parent company of the Los Angeles Times and the Chicago Tribune, among others; Ferro will still be paid $ 5 million per year through 2020 to serve as a consultant. In January, LA Times CEO and publisher Ross Levinsohn took a voluntary unpaid leave after reports that he had been a defendant in two sexual harassment lawsuits. [Kristen Bellstrom and Beth Kowitt / Fortune]

Facebook will start letting video creators charge $ 4.99 a month for their work. The company won’t take a cut of the subscriptions, but Apple and Google, which will process the transactions on their platforms, will take the standard 30 percent cut they take for all in-app purchases they facilitate, leaving creators with about $ 3.50 for each subscription. Patreon, which also lets fans fund their favorite creators, processed more than $ 150 million in donations last year — and takes just 5 percent off the top. [Kurt Wagner / Recode]

Big Data is catching up with biology: We’ve been collecting an overwhelming amount of individual health data for a long time — throw in the stuff from medical claims, clinical trials, prescriptions and academic research, and the yield is something on the order of 750 quadrillion bytes every day — some 30 percent of the world’s data production. Now we have the computing power to process and understand that data — which may be driving the current frenzy of health care–related dealmaking. [Erika Fry and Sy Mukherjee / Fortune]

What if ADHD turns out to be a natural adaptation — even an asset — in our hyperactive world? [Leonard Mlodinow / The New York Times]


Recode Presents …

Do you have questions about Facebook, Cambridge Analytica and data privacy on social media? We’ll be discussing all of that on an upcoming Too Embarrassed to Ask podcast with Recode’s Kurt Wagner, so tweet your questions with #TooEmbarrassed or email TooEmbarrassed@recode.net


Top stories from Recode

The Facebook exec who helped hunt down Russia’s political ads is leaving the company.

Chief security officer Alex Stamos would be the most high-profile Facebook executive to leave since the 2016 election.

Bumble called Tinder’s parent company a “bully” and promised it would never sell to them, “no matter the price tag.”

Bumble finally responded to a recent lawsuit from Match Group: “We swipe left on you … We’ll never be yours.”

Google and Facebook have banned cryptocurrency ads — but these networks still haven’t.

Microsoft, Snap and Twitter are exceptions — for now.

Google and Facebook’s share of the U.S. ad market could decline for the first time, thanks to Amazon and Snapchat.

But don’t worry — digital advertising is still a duopoly.

Here are the Top 2 reasons Americans still pay for cable TV.

Soon these reasons will hold less water.

This is cool

On the death of a beloved meme.


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Kara Swisher tweet-trolled The Mooch and all we got was this terrific 90-minute Recode Decode podcast

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Aaaaaaaay, it’s, well, you know whom it is.

The colorful White House communications director is still a supporter of President Trump, even though he was fired after 11 days.

When he was appointed as the White House communications director in July of 2017, Anthony Scaramucci knew that he was being hired as “a hatchet man,” thinking he would last only one to three months in the job. Tasked with ridding the Trump West Wing of leakers, he was fired in 11 days.

“I had those guys on the run, trust me,” Scaramucci said on the latest episode of Recode Decode, hosted by Kara Swisher, who met “The Mooch” in person in San Francisco after tweet-trolling him humorously but relentlessly throughout his short tenure in D.C.

As it turns out, Scaramucci can take a joke and also is quick to make them about himself. “When I got fired, the irony of the whole thing was they were so scared to leak the damn thing, it didn’t get out until 2:00 pm. I got fired at 9:37 am,” he said.

Cementing his reputation as a “front-stabber,” he didn’t mince words on the podcast about some of the people he has crossed paths with in Washington. But after all is said and done, he is still a supporter of President Donald J. Trump, and thinks he won’t be unseated in 2020 unless Democrats run a Conor Lamb-esque conservative member of their party — something that Scaramucci is confident will not happen.

“Studying the data, going back to 1880 to today, [it’s] very hard to dislodge a sitting president,” he said. “If they [Democrats] were smart, they would say, ‘Listen, we can’t stand Trump, and I guess we’re lefter than left now, but if you want to beat this guy, we’ve got to bring on some of the anti-Trumper Republicans.’”

Below the embed, we’ve excerpted highlights of Scaramucci’s other predictions and observations from the new Recode Decode. You can listen to the full interview on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you get your podcasts.

On backstabbing in Washington

“These are terrible people. By and large, they are vicious people … Let me tell you how it works in Silicon Valley and Wall Street, this is my observation: You build your business and you build you career off of relationships, so you’re trying to create a big karma bank: ‘I’m gonna do one for you, you’re gonna do one for me, we build a relationship. We may be competitors once in a while, but we’re both on the green team: We’re transacting over money.’ In Washington, they actually get off on hurting each other. They earn badges or stripes on their lapel if they hurt somebody else: ‘I crushed Swisher. I went after her with opposition research, I had 10 reporters write nasty things about her and she fell from grace! Look at me, look how cool I am! Look how important I am.’ They do that to each other and they admire it from each other.”

On former chief of staff Reince Priebus

“He had to be fired because he was the biggest leaker in the system, a very dishonest guy, unbelievably insecure. Had to be fired. He was doing so much damage to the president and also, he wasn’t staffing positions. If you were a #NeverTrump-er, he’d put you in a position. If you liked Trump, he’d find a way to block you. He was a disaster. I would love to debate him on live television.”

On former chief strategist Steve Bannon

“He’s a very smart guy. He has a philosophical and political point of view. For all of his railing on the system, he’s actually a cuck of the system. He’s a hypocrite. He went to Harvard Business School, he worked at Goldman Sachs, he was a Hollywood producer, he worked in Washington. He is an effing elitist. He dresses like a hobo, but he’s an elitist. What he is, he’s got this messianic complex about himself where he thinks he has the answer and others do not … He’s now, at least, admitting he’s a racist.”

On the Access Hollywood tape

“[Trump]’s a hilarious guy. He’s saying something really stupid, he’s playing for a laugh, he’s got a hot mic on, OK? By the way, I have said so many stupid things in my life. I have made 10 phone books of mistakes in my life — at least three phone books of mistakes in 11 days inside the White House. I’m not gonna sit there and judge the guy. He said something regretful, he apologized for it, let’s move on.”

On the Mueller investigation

“I think he comes out of the Mueller investigation OK. Maybe there’ll be people in the periphery that are getting hit. Guy’s never used email, rarely uses his cell phone. I didn’t see any collusion, I’ll maintain that.”

On Trump’s war against the media

“I’m supportive of the president, but that is a mistake. Number one, you’re not gonna win that war. Number two, you’re not picking the right battle. Number three, it’s OK to have an adversarial relationship with the media, but if you understand your role, you have to be cross-checked and hand-checked by the media. The founders said we don’t want anybody too power-hungry to get these positions because we know that power corrupts absolutely, like Lord Acton said.”

On Trump’s Twitter attacks

“That Twitter stuff comes from ‘I’m undefended, I don’t have the appropriate media advocacy, they’re hitting me, I’m gonna talk about Mika’s facelift.’ Don’t talk about Mika’s facelift. Let’s use Twitter for policy, let’s use Twitter for strategy. If you want to be cute and New Yorker, that’s fine, but let’s not go into Mika’s facelift. We don’t need to go in that direction.”

On supporters of President Trump in Silicon Valley

“There are people in Silicon Valley — and don’t worry, you’ll remain nameless for this podcast, I’m not gonna out you guys — but there’s a large group of people in Silicon Valley that, because of the fascism of the left, the left is primarily fascist, you can’t express your view. Forget about Peter Thiel, he’s out. You know, the gay community took a while to get out of the closet, it’s socially acceptable now? There’s a large group of people that are in the closet Trump supporters in Silicon Valley, trust me! They can’t come out of the closet because they’re shamed by leftist fascism. I’m a victim of leftist fascism, I can’t even go back to my alma mater. I’m not allowed back on the campus of Tufts University because I’m a Trump supporter.”


If you like this show, you should also sample our other podcasts:

  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Kara.


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