Full transcript: Lauren Goode on her final Too Embarrassed to Ask

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We say Goode riddance to our colleague with a countdown of her favorite #TooEmbarrassed moments.

On this episode of Too Embarrassed to Ask, co-host Lauren Goode counts down her favorite episodes from the past two years as she bids farewell to her listeners. Goode is leaving to take a job at Wired, but #tooembarrassed will continue with co-host Kara Swisher.

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

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

Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode.

Lauren Goode: And I’m Lauren Goode, senior tech editor at The Verge.

And you’re listening to Too Embarrassed to Ask, coming to you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

It could be anything at all. Like, “What will Kara Swisher do without me?” No really, what will she do?

So many things. I’ll be just fine. Don’t let the door hit you on the way out. We’ll talk about what she means in a second. Send us your questions, find us on Twitter, or tweet them to @Recode, or to myself or to Lauren, with the hashtag #tooembarrassed. We also have an email address, tooembarrassed@Recode.net. Reminder, there are two Rs and two Ss in embarrassed.

And I won’t be checking it.

Well, all right, Lauren.

Good luck, Kara.

Normally I’d scoop everybody on any sort of news, but Lauren keeps … vomiting up information here. But I’ll let you break your own news. So go ahead, since you already started off on such a note.

I’m leaving you.

Yeah, I know.

But really everybody, I am leaving, after more than two years and nearly 120 episodes of this podcast. Is that possible?


I’m leaving Too Embarrassed to Ask.

Where are you going? You’re just leaving? How can I miss you if you won’t go away?

I’m actually just going down the hall. But I’m leaving this podcast. So good-bye. I am, I’m leaving Vox Media. I’m going to Wired.

Uh-huh. And doing what there? That’s a competitor.

It is. I’ll just see myself out now. I’m going to be …

We have security coming right after this. You have to be able to collect your things. We’re having people put things in boxes right now. Then you’ll be gone.

It’s a lot of gadgets.

Yeah, it’s a lot of gadgets. No, you’re not allowed to keep them. Casey Newton’s clearing your desk.

Oh, okay.

We’ll be moving on very quickly. Yeah, security, don’t worry, I can handle her for now. You’re going away. What are you going to write about there? You’re leaving the Vox Media podcast network.

I am. I am.

Who’s going to say ka-ching?

You’ll find somebody.

You have been … let’s just go over it. You’ve been with Recode for forever, right?

I’ve been with …

AllThingsD, too.


When did you come? When did you show up?

My first day was December 1st, 2011.

Where did you come from? The Wall Street Journal.

I had been at the Wall Street Journal and I was video producer and a video reporter there.

Remember that show?

I got to know Walt Mossberg. By the way, everybody, I was really early to livestreaming video.

Nobody watched it.

It wasn’t a thing then. We found out everybody was watching everything on demand anyway. The Netflix-ification of society had begun at that point. So everything was … Anyway, I got to know Walt Mossberg through that project, essentially, and Walt used to come on our live show every Thursday to talk about his column. It was really fun. And we used to have these phone conversations. Got to know him really well. Then I think I went to, I was assigned to cover the D Conference at one point.

Yes, you were.

And you were, I mean, I was like, “There’s Kara Swisher.”

You still do that, too.

I think you were like somewhat dismissive. Like, who is this person?

I was nice to you.

And I think it was Walt and Peter who told you at some point.

We should hire you. But we did, we hired you at AllThingsD. What year was that?

That was 2011.

Wow. That’s a longtime relationship we’ve had.

I know. And then we became Recode.

And then we became Recode.

And that was the new year.

And then we sold.

2014. 2013 or 2014?

2013? I don’t remember.

You should remember that was your, “Don’t let the door hit you on the way out” uber-moment.

I know, but you know what, I don’t care. My career is made already. Don’t worry about anything anymore. I don’t have to remember anything.

Yeah, and then we sold to Vox.

Yeah, then we sold to Vox and you went over to The Verge, because all our consumer reviewers went over there, including Walt too.

That’s correct.

And now you’re going to do Wired. And you’re gonna do similar things there?

Yeah, I’m gonna be senior writer of the Gear section, which is Wired’s long-standing consumer tech section.

So you’re top gadget lady, right?

Yeah, I mean, I think … yes, gadgets for sure, but I think …

It’s not a dismissive word, in my opinion.

It’s not a dismissive word.

Maybe Walt liked the word gadget, I don’t know why.

Well, I think that it can make consumer tech sometimes seem a little bit trivial by using the word.

Sometimes it is.

But sometimes it’s actually the apps and services and things that we use, it’s really this whole idea to be connected.

Would you prefer doodads? How about doodads?


You’re senior doodad editor.

I’m trying to say something that’s really deep and insightful and Kara’s just not gonna let me have that moment. So you know what, follow me on Wired and we’ll talk about it.

Go ahead. Go ahead, go ahead, I’ll let you. You’re gonna do big topics and small. Big and small. Big issues and small. And reviewing? You’re gonna continue to review? Because that was your great strength.

I hope so, continuing video. I’ve had a couple of really fun video series here at Vox Media and I hope to continue making videos and figuring out where video is going and, by the way, if anyone else figures that out first, let me know.

You did great ones at Recode. You did some very fun ones.

We had really fun ones here. Remember we did the Apple Watch one? The rules of etiquette with Apple Watch.

Oh, yeah, yeah, yeah.

Where I started to show you my vacation photos on Apple Watch and you were like, “You’re never going on vacation again.”

Oh, that was funny! I remember. Oh, that was a good video. We’ve done some choice … what else did we do?

I was gonna say, we did the … you did Uber for Onesies.

Yeah, Uber for Onesies.

We had you appearing on CNBC in a onesie poking fun at the on-demand economy.

I was. I looked good in a onesie, I have to say. Didn’t Mark Bergen do the onesie?

You were still just as intimidating in a onesie.

It was Bergen. We put Kurt Wagner in a onesie.

Casey Newton.

Casey Newton. Were you in a onesie?

And then Shervin who made a cameo.

Oh, my God, in a onesie. Shervin.

In a onesie.

Oh my God.

Yeah, we made that happen.

The things we’ve done, it’s crazy. So you’re gonna be doing that, but you’re still gonna be, like, on the scene.

On the tech scene. Yeah, absolutely.

Right. What do those people at Wired like? Are they nice? I heard they’re not nice.

Oh, really?

Yeah. I’ve heard terrible things about them there.

You’re just saying that. Oh.

They’re awful people. Conde Nast. That means you get to hang out with Anna Wintour? No, they’re very nice, very nice.

Let the shit-talking begin. And let me hang out with Anna Wintour. Anna’s already asked me if I’d like to have lunch.

Not all of them are nice. Yeah, so, that’s my key part. I write for Vanity Fair from time to time, although I haven’t done it in a while. Although I’m still just …

You did. You did, actually.

I go, I appear at their conferences. I have Conde Nast connections.

I will say that Nick Thompson, who’s the relatively new editor in chief at Wired. He’s been there a year.

I’m very pleased they made that appointment.

Yeah, he’s really smart. It’s a really smart group of people and I’m very excited to go work for them.

Tough guy. Yeah. Wired, of course for those who don’t know, is the iconic tech publication that was, you know, it really started off the idea of the tech consumer. Writing about tech as a consumer thing, as a social thing. It was beautiful design and all kinds of things. It’s a Conde Nast publication. So you’ll be online and in the magazine, correct?

That’s the goal.

Okay, good.


Good. Will you have your own column?

I don’t think it’s being defined in that way.

Okay. But, you’re just gonna be writing? But long features too, right?

The senior writer person in this section at Wired has generally done that. It’s not necessarily just about, here’s this thing and here’s what this thing does, but sort of the backstory behind it. Or interesting people or interesting trends.

So events. Like we’ve trained you well. You’ve been onstage.

Oh, I will still be going to events. You know, events are, if you go in with the right mindset and sense of humor, events are a really fun part of the tech industry.

Yeah, yeah, yeah, but are you gonna …

It’s kinda wild.

But not go to events. You gonna put on events?

Oh, in events. I’m sorry, I thought you meant coverage of events. I was like, I will still be there. Yeah, I hope to be part of the events team as well. Wired does have events.

I’m gonna have to kill you then. What about podcasts?

Yeah, Kara. I’m gonna be doing it all, Kara.

Oh my God. I’m gonna have to kill you now.

That’s okay. I don’t mind. Everybody, you heard it here. If I suddenly disappear in the next seven days, look for my body in the San Francisco Bay.

I’m excited that you’re doing this.

So, what we’re gonna do here is we’re gonna recap some of Lauren’s favorite episodes and I’m going to be emotional here. You’ve been a wonderful host. I really do enjoy sparring with you and I do, it’s all in love when I say that I hate you. Know that I just miss you.

I’m gonna miss that so much.

I know, but you know what I mean. Like, I like that you … you’re a good foil.

I can’t wait to read the comments after this on our iTunes page. They’ll be like, “Kara drove her away.”

“Lauren’s so nice.” We know, blah, blah, blah, blah. Like, story of my life. Even my mother, like, you know, like … she always takes my friend’s side in a fight. People I’m dating, she’s always like, “Well, mm-hmm.”

See, that’s the worst. You know, it’s so the worst.

It’s fine, it’s fine. So we thought we’d recap some of Lauren’s favorite episodes.

You know what, Kara? Nice doesn’t get scoops.

I know, it’s true. It’s true. Keep down. Stay down. I’m gonna get it tattooed on my ass.

Lauren’s favorite episodes at Too Embarrassed to Ask. Lauren, what was your favorite episode of Too Embarrassed to Ask? Let’s start with you.

There were too many. There were way too many to list, and a lot of times it really did depend on guests, but mostly I enjoyed the episode where you finally admitted that you were obsessed with AirPods after initially calling them ugly and making fun of them.

Three pairs and counting.

Well, how do you have three pairs already?

Because they run out of juice. I have them on all the time. The juice issue is a problem.

I already made Eric Johnson, our producer, find some clip awhile ago of you hating and then professing your love for AirPods, so I’m going to skip that. One of my favorite podcast moments … let’s just play the clip.

All right.


Doug Evans: There’s 400 custom parts in here. There’s two motors, there’s 10 printed circuit boards, there’s a scanner, there’s a microprocessor, there’s a wireless chip, wireless antenna, there’s 775 aircraft-grade aluminum, there’s a gear box, there’s latches that support 16,000 pounds of force. So this is a monster of a machine kind of inside this veil of this nice aesthetic.

And then you have to put these packs in and these are packs of products, not juice. My friend is like, “Oh, juice packs.” You don’t just squeeze juice into a glass.

Doug Evans: No, this is fresh-cut produce.

I like it. It’s good.

Lauren Goode: What’s your short 30-second review of it?

I have to say I’m surprised. I thought it was just juice in a bag and you just squeezed it into a glass. For some reason, I just felt that.

Doug Evans: Yeah, you would need a $ 699 device to do that.

Oh, right, so it’s the pressure that you’re paying for.


Okay, so that is Kara talking about Juicero and astutely noting, by the way, that it seemed like something you would just squeeze in a glass.

I’ll tell you, in advance knowledge, I saw a Kevin Rose video where he did that. So I should have done that and done a story on it.

Kara, tell us how that story ends.

Oh, Juicero. Well, it’s no longer, you know? Nobody’s buying a $ 699 device that squeezes juice when you can do it just as well with your hand.

Who was it that discovered you could squeeze it?

It was Ellen Huet. Great job. I was aware of it. You know, some of the things you see and you’re like, “Of course,” but she got them good. She got them good. Good for Ellen.

Poor Juicero. You know Doug Evans, who we just heard from, I was gonna say he has resurfaced again. Vice had a report recently about raw water.

Not Vice. That was Nellie Bowles’s report. Nellie wrote the first one.

She wrote about raw water, but then Vice added …

He was in the story. He was in the story and then they went around with him, further making him seem ridiculous. Like a ridiculous figure. But, yeah, it was … he went to raw water, so … who says you can’t get crazier, right? You’d think Juicero would be the top of the crazy parade, but no, he’s marching on the raw water. I don’t know what’s next. Fake skin. I don’t know what. I don’t know.

That was one of my favorite podcasts, hands down. Another favorite episode of mine was at South By Southwest last year, when we were both there live. We were in the Nat Geo space. It was this really cool live podcast and we interviewed Mary Lou Jepsen about her brain-reading app. No, seriously, she’s working on brain-reading technology. Here’s what she had to say about that.


You talk about that idea of communicating through thought. How does that happen? Explain what you’re doing with Openwater.

Mary Lou Jepsen: So, Openwater is using LCDs to … it seems like a two-fold approach — make a wearable MRI system and work on telepathy — but it’s the same technology. If I throw you in an MRI machine right now, you as well, I can tell you what words you’re about to say. I can tell you what images are in your head. I can tell you what music you’re thinking of. I can tell if you’re listening to me or not and really get the implications of what I’m saying, because this notion of privacy that we have changes when we can …

See people’s thoughts.

Mary Lou Jepsen: Yes.

Right now you’re saying that you can do that.

Mary Lou Jepsen: And that’s possible with MRI now.


Yeah, I liked that. That was a great episode. Mary Lou Jepsen’s a character. She’s worked for Facebook, she works for Google. She actually happened to be a very good friend of Megan’s at MIT. They went to school together. She’s doing all this stuff around screen technology. That was her first thing. At one point, I remember, she told me she wanted to put a screen across the moon and do moon TV. Which would freak everyone out across the planet.

She talked about that during that podcast. And we were all like, “How would you regulate that?”

Yeah, you wouldn’t. Like, I don’t think there’s any implications of a Coca-Cola commercial on the moon. It’s really interesting. She’s a big thinker.

Yeah, she’s a big thinker. It was a really fun podcast, not just because it was with Mary Lou Jepsen, but because of the live audience and the fact that we were in South By Southwest together.

They’re drinking all the time.

Yeah, and it was at noon or something. It was the middle of the day and it was at a bar, so things were getting a little rowdy. We also shared a room together at South By.

Did we?

Yeah, remember?

We shared several rooms together. Not that there’s anything wrong with that, because …

We shared a room together and I, at one point, it was like a Sunday afternoon and there was a lull and I went to go take a nap. I’ll never forget this, you came over to my side of the room, you handed me a sleep mask, which I thought was the nicest thing. You were like, “Here, you’re trying to take a nap. Use the sleep mask.” And I said, “Oh, okay, thanks.” And then you promptly got on the phone with your insurance company and made seven phone calls back to back to insurance agents. As though you had given me earplugs, only you hadn’t. And then I was like, “Well, I guess I’m not napping.”

Yeah, there’s no napping at South By Southwest, but I did give you a nice … do you have that … nice little lovely thoughtful moment of mine. Sorry about that. Anyway, next one. I’m a kind person. I didn’t notice how kind I was.

Let’s see, what should we … okay, so it’s hard to say that this is a favorite, because of the weight of the subject matter. I think it was more of our more impactful podcasts was with Niniane Wang and Joelle Emerson who came on the show to talk about sexual harassment.

We wanted to talk about techniques and solutions and things like that.

It was very solutions focused. Niniane had already, at that point, come out in the media with her story about repeated harassment from a VC, so that was out there already. She hadn’t, I think, done a lot of long-form interviews with people, and she came on to tell her story. Joelle is a founder of a firm called Paradigm and they work with a lot of companies. Sort of, address unconscious bias from the ground up. She’s very solutions focused. They’re both very … very interesting conversation. Here’s a quick clip from them.


Niniane Wang: The Gloria Steinem Foundation tells me that when there’s a hyper-masculine environment, harassment begins to occur. Whether it’s the military, police force, prison, if something is overwhelmingly male, then this type of harassment will occur. And we can do medium-term work to get rid of the bad actors and put processes in place to remove them, but the truly long-term fix is to create more diversity and that, that will create systematic change that helps men understand women more if they are working with them every day. And that will naturally help them make better decisions to change the system to remove harassment.

Okay, hyper-masculine. I agree with that. Silicon Valley, is that like hyper-masculine, because the men here are not as … they’re not like … she was talking about police and things like that. It’s definitely a hyper-male environment here in Silicon Valley. That was really important.

It’s hyper-male and I think it’s worth noting too, whether it’s beta or alpha, there can be a toxicity that arises from any type of insular culture.

Absolutely. It’s hyper-juvenile male, is what it is.


Mm-hmm. It can be.

That’s to me what it is. It’s not quite as menacing as she was talking about, but it’s the same thing. It’s the same result. Whenever it’s the same result, and that was what was critically important with that one in talking about solutions and what to do about it.

Right. Incidentally, this was also where I admitted that maybe sometimes I look up to Kara a little bit.

Look down, because I’m so short.

If you enter an organization as a young person and you don’t see a woman who’s moved up the ranks, who’s maintained a successful career with someone … I can look up to Kara, she’s right here next to me, right? She’s more experienced than me. But for people that enter a work organization that are facing challenges that don’t have that, it can be incredibly discouraging.

I was trying to get you to look down at me.

I did say “look down on me.” Look at me. I’m so funny I already know my jokes.

Now, we did a lot of podcasts about Uber. Johana Bhuiyan came on a couple of times and Mike Isaac from the New York Times that used to be working at AllThingsD and Recode.

Yeah, but Uber’s not my favorite, so they’re not making the list.

Oh, they aren’t?

No, I mean, you know what? Uber was a really important topic that we covered multiple times throughout this year and I’m really glad that we had the people on that we did, but I can’t say any one of those podcasts stood out to me as “this is my favorite” because …

They were the toxic gift that keeps on giving. Do you know what I mean? The desiccated, rotting gift that keeps on giving.

Is it still a gift at that point?

Yes, it is. Today I wrote a story about what was going on there and they’ve had some trouble this week. Although I do like the new CEO. He’s coming to Code. He’s trying. But, honestly, at one point we were at a party and he said, “Thanks for getting me my job, but I hate you.” You know what I mean?

How did you get him his job?

He’s was talking over at Reuters. We did a bunch of stories. You know, we did the one about the India rape thing. Mike did a great issue about regulatory issues. The Information; Amir Efrati did great stories about the escort thing. It all ended up where it ended up, I think the media played a great role in the removal of Travis Kalanick.

Speaking of fellow journalists, we’ve had a lot of journalists on the Too Embarrassed podcasts over the past couple of years. They’re too many to name them all, but Johanna Curr and Jason from Recode came on. Peter Kafka came on once. He and I talked about streaming media services for a full hour, it was quite fun. Dan Seifert from the Verge, Ina Fried from Axios, Joanna Stern from the Wall Street Journal, Casey Newton and Dieter Bohn from The Verge.

Many others, but a few of my favorite episodes hands down were when I spoke with Ray Maker of DC Rainmaker fame about werewolves. Brian Stelter came on from CNN to talk about the fake news phenomena. Jackie Chang from Wirecutter, she came on to talk about tech products to buy when you’re on a budget and it was fantastic. She’s come in a couple of times and it was really fantastic, but the story with Ray Maker …

All right, tell me one.

You weren’t there for that one.

No, I wasn’t, so tell me.

Of course it’s on my favorite list.

Everybody knows Ray Maker, what a name.

One of the first things …

“I’m Ray Maker.”

He’s DC Rainmaker.

All right. If you say so.

By the way, Outside magazine just did a great profile of Ray.

All right, I’ll read it.

Yeah, go check it out.

What did you like about it?

What I liked about it, aside from the fact that you weren’t there, was that we just talked about wearables for an hour and a half.

Oh my God, you must have been in heaven.

I said at the start of this, If Kara was here, I would not actually be having this conversation right now.

No, you can’t, because they’re unwearables.

Because she calls them unwearables.

Are you wearing any? You use to have like 90. What’s that one?

Yes, I’m wearing one. It’s the new Fitbit.

Oh, please. Whatever. Okay.

This is not out yet.

Okay, thank you.

By the time of this podcast, it will be.

It’s huge. It’s enormous still.

It’s not that big.

It’s big. C’mon, it’s like a rock on your … It’s like, “Here, I’m wearing this giant …” It looks like you had some problems with the law and they had to keep track of you. That’s what it looks like.

I’ve never heard that before. No one has ever said wearables look like …

I know, but it should be on your ankle. I think it’s a better fit on your ankle. Anyway, you’ve had a lot of them and let me just say you’ve gotten rid of them. I’m 100 percent correct that these wearables are still not where they need to be.

I would agree with you that they are not where they need to be. That said, I had a very fun conversation with Ray about it because he tests all of the latest fitness packs.

You can keep hoping. Hoping and dreaming.

And we talked about …

That’s what keeps our America great.

All right, all right. Brian Stelter on fake news.

Yeah, Brian’s great.

Let’s play a quick clip from that.


Brian Stelter: There wasn’t as much awareness of that before election day as there was after election day. I would say certainly thanks to the efforts of Craig Silverman at BuzzFeed and the others in the fall, in the September/October range, there was certainly a heightened awareness of these fake, totally made up sites. And now, of course, as you’ve said, the term has been sort of retired. It’s been exploited, it’s been misused by people to mean anything I don’t like, anything I don’t agree with is fake news.

Yeah, President Trump uses it.

Brian Stelter: The president has now kind of taken over the term. I think Margaret Sullivan at the Washington Post is right, we shouldn’t be using the term “fake news” so much anymore. We should let that one go and use more specific language like, “These fictional sites that are trying to make money are creating hoaxes and trying to fool people.” So I think we can be more descriptive, but the problem is still very real and very there.


Kara, what do you think? Do you think people are being more careful about using the term “fake news” or is it just firmly embedded in our vernacular?

No, it’s one of these words that’s just gotten away. Trump has just ruined it. You know what I mean? It’s like, everything’s fake news? It’s not. We gotta have another … just “fake” is fine. It’s what we should focus on, that it’s fake. It’s an interesting issue. I think the word’s been made impossible to use anymore by Trump, by calling everything “fake news.” And everyone says it. My kids say it all the time. My dogs say it. It’s just things that aren’t accurate, inaccurate is the word I’d like to use.

The idea that we shouldn’t use the phrase in general because it devalues the actual news, do you think that’s true?

It does. Yeah, I just think that Brian was really smart on this and the idea is, again, what these platforms have allowed to happen is just irresponsible on every level.

Yeah, even more so, we taped that podcast, it had to have been last year, it was definitely 2017, and since then, you know for a while, we would talk about, “What is the responsibility of the platforms and are they just still platforms?” And just over time it’s become increasingly apparent that they are more than platforms and that they’re adopting the rules of media companies.

100 percent. It was a really smart one.

It was and then Jackie Chang, we talked to her about what phone to buy when you’re on a budget, because last year we saw the announcement of $ 1,000 flagship smartphones, and that doesn’t work for everybody. And then in addition to talking about what phone you should buy on a budget, we talked about everything. We talked about laptops, I think we talked about tablets. We may have even touched on e-readers. It was a very good conversation.

She’s just super smart. The budget one was interesting. Of course, I’m very wealthy, so I can buy the expensive phone.

Oh, are you? We didn’t know that. We didn’t know. You haven’t mentioned it 75 times in the podcast before. Oh, now it’s my turn to be snarky, Kara.

The phone is my life, I’m going to spend money on it. Other people buy fine wines, other people buy nice cars. I have a Ford Fiesta. I’m gonna have a nice phone, right?

Are you going to buy me a fine wine when I leave?

Oh, do you like wine?

I like it a little bit.

No, I’m not buying you wine. I’m not buying you a gift at all. Do I have to? You left. You should buy me a gift. We’ll have a party. We’ll have a Lauren Goode good riddance party.

Good with an E riddance. Lauren Goode riddance.

Good riddance. Lauren Goode riddance party. I want to continue the good riddance tour in a moment. You have the perfect name for that. But we’re going to take a quick break for a word from our sponsors. Lauren, make it a good one.

Hashtag you’ll miss me.

Nope. No.

Hashtag money.

No, that wasn’t a good one. C’mon! Say the hashtag.

Hashtag money!

We’re doing so well financially. I just had a meeting with out podcast money people.

Uh huh. That’s all gonna go down the tubes once I leave.

No, no, because I’m the key man. That’s the situation going on. I’m making all the dough. I need a good hashtag money. C’mon.

Hashtag money.


We’re back with Lauren Goode, who’s on her Goode Riddance Tour as she prepares to leave Vox Media and Kara Swisher and head over to Wired.


Really, you’ve been a part of our lives. You’re like a … barnacle, in a lot of ways.

I always wanted to be underwater.

But we’re indulging her by going through some of her favorite moments from this podcast over the past two years, which we’ve been doing this two years. Too Embarrassed to Ask. It was Lauren’s idea and it’s been a lovely thing. What’s the next one?

You gave me credit for an idea. That is what people should do. That’s really nice.

I’m good that way.

Thanks for doing that.

I don’t suck up ideas, I’m not a white guy. C’mon, let’s go. The white lady. Let’s go.

This is one of my favorite podcasts, mostly because Louie Swisher made another guest appearance. Your son. Wait, is he going to take over as co-host when I’m gone?

Yes. Yes, he is, because he does rather well. The ratings go up when Louie Swisher’s around.

He should. He probably should. People clamor for Louie.

I’ve got a second one. I’ve got an heir and a spare. Alex on Fortnite, I’m trying to convince him, he’s much shyer than his brother. But Alex is an obsessive Fortnite user.

Oh, that would be great.

I know, but he talks my friggin’ ear off about it. I’m like, can we just record you talking about stupid Fortnite? So, heir and a spare.

That’s actually nice. That’s great. Bring him on. Well, this one is also my favorite podcast. Not just because Louie Swisher was on the show, but it’s because it’s when Kara finally admitted that she has a phone problem. This was from a recent podcast we did with the author Catherine Price on tech addiction.


This is about your phone. I think you might have a problem and you need some help. Now, I’ve thought about what I would say to you at this moment, but I do think you need help and it’s help I can’t give you. Otherwise, I don’t think this podcast relationship can move forward. So, either you need to consciously uncouple from your phone or I’m going to have to leave you on this podcast, and eventually you’re just going to be stuck with some bespectacled guy named Rob or Will or Alex, who speaks in thoughtful tones and is going to want to turn this podcast into a 90-minute discussion about obscure films.

I’m sorry, were you talking? I was looking at my phone. I love my phone, Lauren, and I’ll be honest with you …

This is going to be a long, long road.

I’ve got to tell you, I love my phone more than you. I’m sorry to give you that piece of information, but it’s true.

Kara, that is one of the meanest things. You know what?

Why is it mean?

Friends, family, anybody who’s listening to this podcast …

The phone is fantastic. Why would you be mad at being left by someone who’s …

Leave remarks in the comments section of iTunes if you have any thoughts and feelings on what Kara Swisher just said and I’m just going to leave it at that.


So you said you love your phone more than me and I warned you, I warned you that I was leaving you.

Yes. Yeah, that continues to be the case. I still love my phone more than you.

And I am leaving you.

I know. That’s okay, that’s okay. I’m good. I still have my phone, so what’s the problem? There’s no problem.

We both made commitments during that podcast to try different things. This was after your fancy vacation to Mexico.

I didn’t do any of them. What were they?

You said that you were not gonna use your phone in the elevator.

Oh, I don’t do that. I already wasn’t doing that. I find that rude.

And then I said that when I went on a vacation the following week, that I was not going to pick up my phone first thing and look at it.

And did you do that?

Nope. I looked at it.

See? Both of us. We’re a disappointment to each other. Do you think I’m going to give up my phone for you or I like you more?

You know, it wasn’t that I expected you to give it up, it wasn’t about sacrificing something you love. It was just about prioritizing differently.



Yeah, whatever. But the thing is, the fact of the matter is I love my phone more than you and I will continue to do so long after you leave.

You know, this really could have worked out if we had gone to podcast therapy.

I’m sure if I put with Esther Perel … I just did the Esther Perel podcast. We were on couples.

You did? Really?

Yeah. Esther Perel and I did a great podcast from, but you weren’t there, from South By Southwest. It’s blowing up on the internet today.

I’m gonna have to listen to it.

Because she took apart the Trump marriage for me and then talked about stroking phones.

Oh, really?

Mm-hmm. She’s my new partner. She has a French accent. I got her to … oh no, she’s from Brussels; she’s Belgian. She was talking about, I said take apart the Trump marriage and she goes, “Oh, I could not do this. I do not know them. Eh, okay!” And then she did it. And she had a really great, I have to say …

What did she say about?

She said Melania is in a story she didn’t want to be in and that Trump is a narcissist. So, no hope there.

You know, I do love Esther, but I don’t think you need any degrees in psychology to point out narcissism in that case.

Yeah, I know. I got it. I got it. She had some very … you just listen to it. It’s very good.

I’m gonna listen to it. Yeah, I’m gonna listen to it on my way home.

All right, No. 3.

While I’m crying in my car on my way home from our final podcast.

No. 3, it’s a little bit of a sleeper hit, but one of my favorite episodes was our podcast about podcasts. Once a year we went really meta and we would ask people to send in their favorite podcasts and we would go through our own list of favorite podcasts and it was surprisingly popular. People just love talking about podcasts when they’re not listening to them. Kara, what’s your favorite right now?

Recode Decode.

You’ve got a lot of great interviews lately.

I have! Recode Decode rocks! Scaramuccci, c’mon. Chris Hughes talking about a very serious subject, universal basic income. I talking about sex with Christiane Amanpour. C’mon, couldn’t get better than that. Who else have I done recently? Esther Perel obviously, who’s fantastic. Just everybody seems to want to talk on that Recode Decode. It’s good. We’ve got a lot more that are coming up that are great.

If you were to say one, aside from Recode Decode or Too Embarrassed to Ask, what would it be?

Peter Kafka’s Recode Media. No, I like a lot of podcasts. I like Vox Explained. I like The Daily, I love Michael Barbaro. We’ve got a whole man-crush going on with each other. I really like him. I think it’s really well done. And Vox Explained is quite good, too. It’s new.

It’s very good, yep.

So I’ve just started listening to it. One’s in the morning, one’s in the afternoon, so it works out rather well. And they’re short so — shorter — and they’re nice, they’re packed full of goodness. I listen to the history one. Don’t know much about history. One of the history ones, I can’t remember. I have one on the history of Rome. I’m obsessed with the history of ancient Rome. I don’t know. I like the Pod Save America guys sometimes. They get a little bro-y for me.

You’ve interviewed them too, haven’t you?

Yes, I have. They’ve been on Recode Decode. They get a little bro-y, but I like the bro-y. They’re good bros.

What’s a podcast bro called? It’s just like a pod-bro?

A po?

A pro?

A pro? I don’t know.

A brocast.

Just the same as they are everywhere else, brocast. Something like that, yeah. All right, we’re gettin’ down to it. No. 2.

No. 2. Honestly, this is really my favorite Too Embarrassed to Ask episode of all time. Walt Mossberg was retiring last year in the summer of 2017, so we planned a little surprise for him. We asked him to come on the podcast one last time. It was down at Code Conference in Southern California and we made it seem like it was just going to be like this standard thing, and then behind the scenes, Kara and I were working to get all of tech’s top executives to send in their Too Embarrassed questions to him. Here’s the clip.


Okay, this one is from Bill in Redmond, Washington.

Bill: Hey, Walt, this is Bill. What’s your advice on staying up to date on all the changes once your column is no longer coming out?

Walt Mossberg: Oh, Bill in Redmond. I know how tough it can be when you live so distant from the epicenter of tech. And you’ve never had any experience! Ah, Bill Gates, just … you know what, just scroll through Twitter. And take your chances on what’s fake and what’s not.

All right, fantastic answer!

Walt Mossberg: That’s basically my method.

All right.

Lauren Goode: Walt, if you ever start sharing things that look to be overtly fake, I’ll just DM you and let you know, okay?

Walt Mossberg: No, just message Bill. Say, “Bill, here’s a good one.”

Lauren Goode: I guess we have a lot of listeners in Redmond, Washington, because this one is from a long-time fan named Steve.

Steve: Walt, this is Steven from Redmond. Just a quick question about your review of Outlook ’97. You called it “a great idea poorly executed.” And you said, “The interface was puzzling and that people would be confused by all this dense and daunting interface. It’s cluttered, complicated. Wordy, complex forms and dialogues. But don’t worry, Microsoft’ll get it right by the third version.” Is that all you had to say, or was there anything you wanted to add to that? Oh, and go Yankees!


Honestly, there were so many good clips from that. You know, Phil Schuler, Bill Gates, Meg Whitman, Sheryl Sandberg, Steven Sinofsky, Jack Dorsey sent in a question, it was really great. But the best part of it, they had sent in very thoughtful questions, some of them did, but the best part of it was really hearing Walt’s reaction, because he was so surprised. You can’t see that through the podcast, but his face was so great.

That laugh; I can’t do his laugh. That Walt cackle.

Yeah, it was so great. It’s like a Bezos-like laugh.

He’s a cackler, really.

It’s a ha-ha-ha. Let’s do our Walt laughs.

I can’t do it. That’s good, that’s good.

He was so fun.

He’s a great guy. Lauren, he’s been such a great mentor to me and you and he deserves all the kudos.

He really does.

He does. He’s a good man.

I really, really am going to miss you both. Immensely.

Well, he’s gone. He left. Left us far behind.

You know, Walt’s retirement is like the furthest thing from retirement. He’s so busy.

He is busy.

He’s got so many great things going on.

He’s in a cigar store. But he’s left us, Lauren, let’s be honest.

I know, and now I’m leaving you, but honestly I am so immensely grateful to everything I’ve learned. I’ve learned so many reporting tips and tricks from you guys, but also just learned a lot about the industry. You know, it’s funny, a lot of what it comes down to in this crazy news business is who you get to work with in newsrooms.

Yep. It’s true. Oh my God, you’re going all soppy. Enough about me, what do you think of me?

What do I think of you? What about me? What about me?

What do you like about me most?

Let’s talk about me now. Let’s talk about me.

This is true. Building teams. They always say there is no me in team, but there actually is me in team. I hate when people say that, ’cause it’s like, yeah, it’s right there, an E and an M.

I think there’s no I in team. That’s the phrase.

Yeah, whatever. Teams are important.

What are you gonna do without me?

Oh, you know, I’ll find someone else. I always find someone else. Just think, literally, I got my kids, I got my dogs, Lauren. I got Eric! I’ve got Eric. Will you send Eric, please?

There’s no me in team! There’s no me in team! There is me in team. Wait, I was getting there, because we still have to get to my No. 1 favorite podcast of all time.

Okay, No. 1.

It was just all of ’em.

Oh, Lauren. So sentimental.

Yeah, all of my podcasts with Kara Swisher.

Have I not taught you to be snarky and mean? I feel like I’ve failed.

You are such a softy. I’m gonna go back to them and say … You know, people for years to come are gonna ask me, “What was it like working with Kara Swisher when she was not hiding out at events at Yahoo?” And I’m going to say, “She was a softy.”

Oh, God, please don’t do that.

All right, I’m not gonna.

I’ve worked all these years to frighten and scare people.

Oh, I’m gonna have so many good stories.

Yeah. All right. You promise?

I promise.

All right, Lauren, you’re not going far. Wired is located here in San Francisco, so you may continue to come to our events.

Thank you. I would love to.

And also, my parties perhaps from time to time. Every other one.

Every other one? I feel so pleased.

Let me just say, Lauren is an amazing journalist. She does a lot of reviews and she’s known for reviews and some of the questionable video things she’s done.


But I have to say she’s a great reporter. She’s a dogged reporter. We had hoped she would stay at Recode. She’d come back to Recode, we asked her to be an editor, I will reveal that. We wanted her to do it, but she really … her best stuff is writing and reporting on tech and what it means. I think that’s the great part. There’s not a lot of great people doing this, there just aren’t. I think Wired will be much improved with you there.

Thank you very much. That’s like the nicest thing you’ve said sincerely.

You know that’s all you’re getting.

I wanna give a special shout out to Eric Johnson who is the … I was going to say the voice behind the microphone, but actually he doesn’t chime in all that much. He’s a producer but he’s … Yeah, yeah.

Oh he’s coming on when you’re gone. He’s gonna become the guest host.

Eric Johnson: Get out of the way.

Okay, sorry guys, my chair has gone flying across the room here.

Yeah, he’s coming on.

No, Eric Johnson has been a fantastic person, friend. We’ve known each other since, well, we both went to Stanford, but we didn’t go at the same time. We have worked together since the AllThingsD days. We went to E3 together. We were in E3 and we stayed in that bizarre hotel that was like on the total other side of LA. And anyway, Eric has been a fantastic reporter and now a fantastic podcast producer and all around wonderful human being. So thank you so much for everything you’ve done. It’s been a real pleasure working with you.

Well, Lauren, security’s here to take you away.

Okay, here’s my badge.

Here’s your badge.

And I’ll really miss all of you. I just wanna say thank you to everybody who’s listened.

Oh, the audience, right.

Yes, of course! Who’s gonna listen to you reading mattress ads?

I’m just saying, who’s gonna read the comments, ’cause I don’t. I’ve gotta find someone.

Yeah, who’s gonna read all the emails? Guys, if you send an email to TooEmbarrassed@Recode.net, there’s a chance Kara’s not gonna get back to you. It was me responding all those times.

There’s a chance? A 100 percent chance of rain. C’mon.

You’re probably better off tweeting at her. And I know Eric will also be checking the inbox.

Thank God for Eric.

And I really, really thank all of you for being on this Too Embarrassed journey with me.

Oh, it’s a journey. What should we call it? Should we retire Too Embarrassed?

Goode Riddance. Putting my microphone down now.

All right, this has been another great episode with Lauren Goode. Lauren may be leaving us, but the show will go on because why not.

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.


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.


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?


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?


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.


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.


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 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.


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.


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.


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.”


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


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.


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.


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?


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.


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? 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.


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.


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.


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.


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?


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?


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.


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.


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.


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.’”


“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.


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.


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.


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.


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?


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.


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.


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.


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.


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.


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.


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.


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.


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?


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, 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. 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.


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. 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.


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.


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.


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.


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. 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.


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.


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.


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.


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.


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.


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?


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?


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?



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.


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.


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.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Recode’s Kurt Wagner answers Facebook-Cambridge Analytica questions on Too Embarrassed to Ask

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

The data privacy scandal has Facebook scrambling.

On this episode of Too Embarrassed to Ask, Recode’s Kurt Wagner talks with Kara Swisher and Lauren Goode about the Facebook-Cambridge Analytica scandal. Wagner says reports of a political data firm exploiting a loophole in Facebook’s old data platform has severely undermined public trust in Facebook.

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

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

KS: Hi, I’m Kara Swisher, executive editor of Recode.

LG: I’m Lauren Goode, senior tech editor at The Verge.

KS: You’re listening to Too Embarrassed To Ask, coming to you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like should Kara Swisher delete her Facebook?

KS: I have to use it first, I don’t use it all. I never use it.

LG: Do you have two Facebooks? Do you have a personal and professional?

KS: I have several. Yeah, I’ve got that. I have a lot, I have like 750,000 fans or whatever the hell you call them.

LG: Likes, followers.

KS: I don’t know. I never go there.

LG: You don’t use them?

KS: I use Instagram and I use WhatsApp.

LG: Oh, therefore you’re not using Facebook.

KS: Yeah, I know, but I use their properties. I use Facebook properties.

LG: No, I’m joking.

KS: Who owns Waze? Is that Google or Facebook?

LG: Google.

KS: All right, anyway, no, I don’t use main Facebook, it’s too heavy-handed for me. Anyway, so send us your questions, we’ll talk about that more. Find us on Twitter and tweet them to @Recode or to myself or to Lauren with a hashtag #TooEmbarrassed.

LG: We also have an email address, TooEmbarrassed@Recode.net, and a friendly reminder, there are two Rs and two Ss in embarrassed.

KS: As always, Lauren.

LG: As always.

KS: So, the reason we’re talking about Facebook, Lauren, what’s the reason? They’re in a bit of hot water, wouldn’t you say?

LG: As we tape this podcast right now, it’s Wednesday, you’re going to hear this on Friday, but it’s Wednesday about six pm Pacific, and Mark Zuckerberg is doing an interview live on television with CNN right now, but he also spoke to some media outlets, including you.

KS: Yes.

LG: Including Recode and Kurt Wagner.

KS: Right. Just a few precious ones.

LG: Just a few.

KS: Yeah.

LG: About the Cambridge Analytica Story, which has really blown up over the past week. So, we’re delighted to bring in Kurt Wagner, Recode’s social media editor, who’s going to join us. I think The Verge’s Casey Newton may pop in in a moment.

KS: Pop in, he’s trying to catch up to our scoop.

LG: He’s filing furiously right now, as are a lot of the news media. Yeah, this is a really … It’s interesting because Facebook sharing your data, Facebook is a free service sharing your data, is not a new story, it’s not a new theme, we all sort of implicitly understand the exchange that goes on when we sign up for a service and we use a service like Facebook. This story in particular has really captivated people. Kurt, why is this happening?

Kurt Wagner: I think it’s a transparency issue. A lot of people do know what Facebook does with your data. I think what caught people off guard here is that, one, some 50 million users found their data in the hands of someone that they did not give permission to have it. Two, we find out that Facebook actually knew about this three years ago and never said anything publicly. So I think there’s this betrayal of trust right now. Not so much that, “Hey, we didn’t know Facebook …”

KS: Mark called it a breach of trust.

A breach of trust.

KS: Yeah.

We didn’t know … It’s not so much, “Hey, we didn’t know Facebook had our data,” it’s more, “We gave it to you thinking one thing, and now all of the sudden we’re learning another.”

KS: More importantly, they didn’t protect it. They weren’t monitoring … What happened is, in 2007 — and I was at the 2008 F8 where he announced this — they did something called Facebook Connect. One of the ways it grew the platform, and the thing that made it big, was bringing all these developers onto the platform to do all kinds of things. There was one called Super Wall from RockYou, where you could put pictures. So they were bringing in lots of apps to get activity going on, which was …

LG: Those app makers were tapping into Facebook’s API to get the data.

KS: Well, in exchange, to bring them, they gave them precious data. They didn’t have a lot of rules, they had rules around it, but they didn’t monitor the rules. So, they had laws, but they didn’t enforce the laws, or they didn’t know what people were doing. So, all this enormous data went out for seven years. Wasn’t that right, Kurt?

More than that. I mean, if it would have been 2007, that’s 10 years, right?

KS: Well, no, they sort of slowed it down in 2014.

I’m sorry. Well, in 2014, they stopped what they allowed. So, let’s pretend you signed up for Words With Friends back in 2013, they would have also had access to all of your friends’ data.

KS: Right.

In 2014, they said, “No,” if you give them permission, Kara, they can take your data, they can’t take all of your friend data.

KS: Right.

Yeah. So for about seven years or so, they were not only giving away data of the people who agreed to it, but also everyone in their network was kind of losing their data, as well, without their permission.

LG: So, where does Cambridge Analytica come into the picture? Talk about that, and how they were mining the data, and how they weren’t exactly transparent about what it was being used for.

Yeah. They got ahold of all their data actually from a researcher, a professor from Cambridge, who created a personality app, I guess, and some 270,000 people used it, 300,000 people is what Mark Zuckerberg said today. So they all signed up to take this personality quiz, and as a result, all of their friends handed over their data unknowingly, as well. Then that professor gave the data to Cambridge Analytica, which is a data firm. That is where the issue happened.

KS: Right, so it’s pass-along, it’s like a virus.


KS: They passed it along and they didn’t have … Facebook was just not monitoring. Look, what Cambridge Analytica did was just suspect and misuse, and they said they were going to do something and they did something else. They said they were going to destroy data, they didn’t. They’re just liars, right?

LG: Mm-hmm. They said, just for background for people who are listening, they ultimately used the data in a way that influenced the … This is a U.K. based firm …

KS: Yes, then they used it for …

LG: … that ultimately used the data to influence in some … Well, the fact of whether they actually did influence people is questionable, it depends on how you feel about psychographics, but they used it with the intent to influence the U.S. election. Then when Facebook did become aware of it, they insisted that Cambridge Analytica basically would certify that they’d cleaned everything up.

KS: Right.

They said, “We deleted it,” and now we’re finding out they didn’t actually …

KS: Also, they shouldn’t have had it in the first place. The whole question is how Facebook didn’t monitor the data it gave out. It was handing out data like candy to get these developers on its platform and then it wasn’t monitoring the data. It’s not just Cambridge Analytica, it’s like who did they give it out to? There’s tons of companies they gave data out to that don’t exist anymore, tons and tons of those. Who knows where the data has gone?

LG: Where does that go?


KS: It goes into the great data … Data sets are critical to marketers and everyone else, and Facebook handed these out for free, essentially, for getting people on their platform for benefit to Facebook. Essentially, you, the user, are the product, you are the product they’re selling. It wasn’t that you didn’t know, it was so confusing, it went from person … Especially the friend graph. If Kurt gave it out, I didn’t agree for Kurt to give out.


KS: So that’s the problem with this, they just did no monitoring. We did an interview with Mark tonight where he said, “Yeah, we didn’t.”

Yeah, and we asked him, we said, “Is it even possible to go out and get it back?” Can you go out and find some app from 2012 that had 100,000 users and therefore the data of maybe 20 million users, could you go out and get all that back? He said, “Not always,” right?

KS: Yeah.

It’s kind of like what we wrote today, it’s like putting the genie back in the bottle. The data’s out there. Once it’s off of Facebook’s servers and onto someone else’s servers, you don’t have much control over it.

KS: They’re not the police, they can’t go in and get it. People could hide it, it could go into dark parts of the web. When he was asked if he could recover some of the data, he admitted not always, and I think it’s more than not always. Not at all, like, really, pretty much.

Again, once it’s out there, it’s out there, and they used it to build their business to what it is today. The responsible use of that data brings up lots of regulatory problems, there’s all sorts of violations of possible agreements they had made with the government before …

Yeah, the FTC might be investigating now, after all this Cambridge Analytica stuff, to see if they violated a consent decree that they signed in 2011. There could be a financial fine, which I don’t think is that big of a deal for someone like Facebook, they have so much money, but I think more concerning would be if Congress comes in and says, “Hey, we’re going to start regulating the data that you take in, because we no longer trust you to do this on your own,” all of a sudden.

Facebook’s whole business is based on that data, that targeting, specific hyper-targeting of ads that requires that data. If Congress says, “You can’t collect it,” or, “You have to collect it in a certain way,” that could change the whole advertising landscape that Facebook is built on.

KS: It’s a rolling controversy, it just keeps going. First it was fake news, then it was the Russian bots, then it was the fake advertising … it’s all the same thing.

LG: Yeah, there’s a convergence of issues that are happening right now, and they’re all contributing to this distrust with Facebook. When you look at … there’s fake news, like literally fake news websites that are having this presence on Facebook, there is the Russian propaganda and Russian influence in the U.S. election-

KS: Advertising lies.

LG: Right. In general, it just seems like there’s this …

KS: It’s the same story, lack of control of its platform, lack of monitoring, lack of responsibility around the data that it’s supposed to protect.

LG: Then on top of it, just as sort of a meta-theme, is people right now wondering if Facebook is good for them in general.


KS: Well, that’s a whole nother thing.

Is it good for your health, on top of all of this.

LG: Right. Right.

Are they stealing your data? Oh, by the way, is it making you depressed?

LG: Oh, by the way, does it make me sad?


LG: So, we’re …

KS: Can I just say, in the middle of this there was also this idea of remaining a neutral platform, which Mark would not go there. We’ve all tried to press him saying, “You have to have values and rules and things like that,” and he said … He keeps in this line, it’s a very Silicon Valley line, that they don’t want to have their personal ideology influencing Facebook rules or regulations. I’m like, “Why not?” It’s your company, kind of thing.

He really controls it because he’s got that special stock, this is the quote, “A lot of the most sensitive issues we face, there are conflicts between real values, right? Freedom of speech and hate speech or offensive conduct, where is the line?” Sounding more like an ethics student than the billionaire CEO of the one of the world’s most valuable companies. “What I’d really like to do is find a way to get our policies set in a way that reflects the values of the community, so I’m not the one making those decisions. I fundamentally feel uncomfortable sitting here in California in an office making content policy decisions for people around the world.” Well, he has to, it’s his company. That, I don’t agree with.

The end of that quote, actually, was the best part.

KS: Yeah.

Which is him basically saying, and I’m reading over your shoulder now, “Who chose me to be the person that basically makes these decisions? I guess I have to because of where we are now, but I’d rather not.”

KS: Yeah.

So it’s kind of that first, almost his first admission I’ve ever heard, of him kind of being like, “I really want to be a neutral platform, it’s not really working, and now, I guess, it falls on me to have to make these tough decisions.” He’s never really said that before.

KS: Which, I’m sorry, I’ve always thought that was just bullshit. Not from him, he’s a very earnest and thoughtful person. Let’s be clear, this is not Travis Kalanick at Uber talking, this guy really does think about it. The fact of the matter is, he has a responsibility and he’s got to start making choices, and they just don’t want to. They keep saying, “We’d rather have the community do it,” but the community has nine different opinions.

LG: That’s also a very data-driven approach. It’s like, how do you actually take the temperature of entire communities of 2.2 billion people around the world?

KS: And too easy to game.

LG: You do it using data and you say, “What do you …”

KS: It’s too easy to game.

LG: It’s kind of like, you vote for the most reputable publishers, you vote for what you want, and I think they’ve been hiding behind that idea that if they just had enough data, then it’s the user base that’s deciding, but that’s not … Kara, I think you kind of pushed this idea of, how did you not anticipate these bad actors though, as you’re building this massive platform.

KS: Yeah. They never do. Facebook Live, they … They have to take responsibility, that’s what adults do. This is their company, they’ve made billions of dollars off of it, they’ve decimated industries, like they really control the online advertising market. They need to be responsible and make choices. Making choices means you piss people off, making choices means you have to give up some things, they can’t have everything. They can’t have the world’s biggest platform and not be responsible for it. I just don’t … I don’t know why we’re even arguing over this situation. If they don’t want to do it, get out of the way and let someone else.

LG: Just to backtrack a little bit, we’re speaking right now, literally on the heels of this mini media blitz that went on this evening, on Wednesday evening. Prior to this, Zuckerberg was silent for about five days after the story broke last Friday night. So, where was he?

KS: Kurt, where was he?

Yeah. He was working. It was so bad that they came out with a statement that said he was working, he was working around the clock is what they had to say.

KS: Apparently around the clock. That’s what you do, you work around the clock.

You work around the clock. I think this was an example of …

KS: Kurt was working around the clock, by the way.

Yeah. What day? I don’t even know what day it is right now, yeah.

LG: Lucky Facebook reporters.

Yeah, this is great. No, I think this was an example of something that they learned from the really big scandal they had 18 months ago, right after the election when he comes out like a few days after and he says it’s crazy that fake news could have influenced the election. Do you know how many times people pointed to that interview and said, “Hey, remember that time Mark Zuckerberg said it was crazy and now look, he looks super naïve, he looked like he had no idea what he was talking about.”

In this scenario, I think that they remembered that interview, or that statement, and they said, “Well, before we get all the facts, the last thing we want is to put Mark out there in front of the press to say something that we’re going to have to backtrack later on when we know more details.” That is my hunch. They have not really come out and said specifically. He said in our interview, he was like, “Oh, one of the reasons it took me so long is I was going through this … I wanted to unveil a plan for all this.”

KS: Yeah, he’s like that.

“Before I say something,” but he could have said something a few days ago.

KS: Right.

I think they just didn’t know enough and they didn’t want him to say something they were going to have to walk back.

KS: They badly handled this in the beginning, when he first said, “We had no impact on the election,” then, “Maybe a little bit,” and then, “Okay, maybe more.” “Oh no, there’s more Russians.” It’s like cockroaches.

LG: Right, right.

KS: If there’s one Russian, there’s hundreds.

LG: Then it became a personal …

KS: By the way, not all Russians are bad, just these Russians.

LG: Then it became a personal resolution of his in the new year to essentially fix Facebook. It went from, “No, this is not a problem, no problems here, nothing to see here,” to, “I need to fix something.”

KS: Right.

LG: That was an acknowledgement.

KS: Yeah.

LG: So what do you think happens from here?

KS: Kurt?

I do think that, as we reported today, there’s a real chance that he could testify in front of Congress now and I think that …

KS: He’s open to it.

He’s “open to it.”

KS: That’s not a yes.

No, it’s not, but I guarantee that they’re all going to ask him now, right?

KS: Yeah.

If he’s open to it.

KS: He doesn’t have a choice if he gets subpoenaed, FYI, he has to.

I think that could happen, I think that’d be a really big deal. I think this FTC investigation could be a big deal. I don’t fully know how realistic it is at this point that they would be regulated more severely, the way we were kind of talking about earlier, but hell, I’m afraid to say that anything is off the table at this point, I think that it’s possible.

I think if you look what’s going to happen in the next week, you’re going to see a lot more about their policy stuff and changes. I think that that’s the immediate plan for them is probably going to be, “Here are all of the things we’re doing to protect your data right now.” It’ll be things like, “We’re going to put News Feed alerts so that you remember to go check and make sure that you’re sharing with the right people, and that you’re severing ties with apps that you maybe used five years ago that you no longer have a relationship with.” I think big picture is that this is not …

KS: It’s not good.

This is far from over.

KS: The stock has gotten really hit because people do intuitively understand this goes to the heart of their business, that’s one of the parts.


KS: The second part is, again, I really like … You like Mark, I like Mark.

I do. I do.

KS: But the slow rolling. I like Sheryl …

LG: Where is Sheryl in all of this?

That’s a better question.

KS: She’s working around the clock.

Yeah. I think that’s a better …

KS: Yeah.

When you think about Sheryl, she built Google’s ad business, or was a huge part in building it, she built Facebook’s ad business, for sure, she’s been there 10 years. What are the two companies right now that are in the middle of this entire ad dilemma? It’s Google and Facebook, right?

KS: Yeah.

She’s very visible on Facebook, but it’s a lot of her “Lean In” stuff, it’s a lot of her philanthropy, and I think there’s a lot of people who would love to hear more from her on this topic.

KS: The only thing I would say, I’m going to push back because today, when I was on CNBC, they were talking about, “Well, why doesn’t Sheryl talk about this?” Mark’s the CEO of this company and he is the founder, he’s the CEO, he’s the technical founder, Sheryl’s not technical, these are technical, highly technical issues. He’s the one that has to talk.

I know they want to bring in Adult Lady, but he’s an adult. He’s an adult man with children, he’s married, he’s been running it for a long time, he’s a very smart man. I talked about this earlier, you’re juvenilizing these Silicon Valley men, “Let’s bring Sheryl to clean up.” She’s absolutely responsible, I a hundred percent agree, but he has to be the face. Just because she’s smoother and talks better, he’s the one, he has the controlling stock, he’s the one responsible, he’s the one that should talk, he’s the one that should take responsibility. It’s fine to have Sheryl, or Chris Cox, who’s head of the platform, or Dan Rose, any of these executives, or the CTO should probably speak, too, but really, it falls to Mark. Mark Zuckerberg wants to be the CEO of Facebook, he has to … Years ago, when he wasn’t being as adult as he was, he had a card that said, “I’m the CEO, bitch,” on his card, which I thought was funny, everyone didn’t like it, I thought it was so funny. But he’s the CEO, bitch.

LG: Right.

KS: Okay.

LG: You want that business card.

KS: Yes, you do.

LG: Has this inspired either of you to reconsider your own Facebook accounts?

KS: I always monitor my security preferences.

No. Yeah, I did actually go through my settings and kind of just poke around since it had been a while, but no. As you pointed out at the very beginning, I kind of know what I got into when I signed up on Facebook. I think I’m also a little bit different in the sense that I write about it all the time. I don’t think it’d be possible for me to do that and not be on Facebook.

LG: You can’t just check out.


LG: Yeah.

I rode from the airport here today and my Lyft driver told me he deleted Facebook.

KS: Oh, wow.

LG: Interesting. Did you ask or did the Lyft driver volunteer that?

No, we were … I’m trying to think. He was asking me what I did and I told him that I wrote about Facebook, and then we started talking about this data scandal, and he was like, “Oh, you know, a few weeks ago I actually deleted my Facebook so I don’t have to deal with any of that anymore.”

KS: Yeah.

LG: That’s really interesting.

KS: I just don’t use it that much. There’s just …

Yeah, I don’t really either, to be honest. I’m much more about … I spend much more time on Instagram than I do Facebook.

KS: Which is a Facebook property.

Correct, but way more time on Twitter, as I’m sure you guys are, given our jobs.

LG: Yeah. I have a professional Facebook page, so I’m not inclined to delete that. My personal one, I think I am using it less, I haven’t done a very sophisticated analysis of my own usage, but I think I am using it a lot less. Yeah, there is an element of it that feels a little bit like “Hotel California,” it’s just very difficult to check out. Some people have brought up …

KS: Can you sing that please?

LG: Yeah. I know, I’m singing on the other podcast, right?

KS: Yeah, you did.

LG: A couple people, reporters, and I don’t want to give credit to the wrong person, but have brought this idea, too, that just to say, “Oh, well, just delete your Facebook,” in some markets or in some countries, that seems almost impossible.

KS: It’s ridiculous. You should just responsibly run it.

LG: It’s the way people … It’s like the primary way people connect with certain people. It is synonymous with the internet for some people in certain markets.

KS: They also Instagram and WhatsApp, and WhatsApp is an enormous property.

LG: Exactly.

KS: So they’ve got … The overall leadership of this company has to take this privacy seriously. One thing Mark said, I think, that was super interesting was around the mistakes were made section of our interview, which he said, “I made a mistake,” so I appreciated that. The idea that it was built incorrectly at the beginning, which is back in 2007, and especially around privacy. He said he came to realize people did not want their privacy violated, and he just came to realize that.

“Frankly, I think I got it wrong,” he said, in a sentiment that most Silicon Valley moguls are loath to admit. “There was this values tension playing out between the value of data portability, being able to take your data and some social data, the ability to create new experiences on one hand, and privacy on the other hand. I was maybe too idealistic on the side of data portability that would create more good experiences and created some, but I think the clear feedback from our community was that people value privacy a lot more.”

LG: What does that say about the mentality of the people who made Facebook and continue to build Facebook?

KS: Data portability, it means money for them.

LG: Do they just really value this idea of …

KS: No, they don’t.

LG: … openness and data moves freely and things like that.

KS: That’s their word, but you know what? It makes money for them. That’s why. Privacy does not make money for them. Right, Kurt?

Yeah, I think that’s a huge part of it.

KS: Come on.

At that point, a venture-backed business that’s trying to rapidly scale and trying to add as many new users as possible, if you’re the profile, if I’m downloading 10 new apps a month and I’m using my Facebook identity to log into all 10 of those, I’m probably not leaving Facebook. There’s a huge value to them in doing that. I do, though, having spoken — and Kara has talked to more Facebook executives for longer than I have — I do believe that they are drinking the Kool-aid in terms of that mission, though. They truly believe the whole … You don’t think?

KS: No, I think it’s such bullshit. I think they’re lying to themselves.

I think they believe it.

LG: I would say that lying to themselves …

KS: Of course they believe it, they became billionaires.

LG: … and drinking the Kool-aid are kind of the same thing.

KS: Yeah, it is, but I think they believe it because they made money on it.


KS: I think, ultimately they pretend they don’t care about money and then they have giant houses and planes. So, I don’t know. I just feel like …

I’m not trying to say it’s not … I guess what I’m saying is, I think that it can be both. I think that it can be a good business and that they can believe in this broader mission of everyone connecting.

KS: Yes, libertarianism. Yes, it’s in that thematic …

It’s that idealistic idea of, “Oh, well, why would anyone ever use Facebook Live to murder somebody?” right?

KS: Right.

The rest of the world is like, “Yo, the internet sucks, people do stupid stuff on the internet all the time.”

KS: Well, to me, that’s willful ignorance then.


KS: It’s absolute willful ignorance, pretending the inventions do not have consequences in the real world. You know what? Adults know about consequences.


KS: Maybe my 15 year old doesn’t know about consequences, but certainly, Mark Zuckerberg should.

Right. They don’t foresee a lot of them.

KS: Ultimately, after 10 times of this, it’s like, listen, you don’t have kids, but if my kid did it 10 times, I’d be like, “Okay, he means it,” kind of thing. Anyway, I’m giving a little parenting advice to Kurt.

I know, thank you.

KS: I’m such a scold. I am a scold.

LG: Too embarrassed to ask.

KS: Am I too much of a scold?


LG: No.

KS: I don’t think I … I’ve been banging on this drum for a while. With great power comes great responsibility, which was actually written by Voltaire, even though all of the geeks think it’s Spider-man, but no.

LG: I know, you told Sundar Pichai that during your interview with him.

KS: Yeah. He argued and …

LG: Yeah.

KS: Inaccurate.

LG: You were like, “Google that.”

KS: All right, we’re here with Recode’s Kurt Wagner and in a minute, we’re going to get through some questions from our readers and listeners about Facebook. But first, we’re going to take a quick break, a word from our sponsors. Lauren?

LG: Hashtag #Money, that thing that’s driving all of this scandal.

KS: Yeah. Kurt, do you want to say it?

Yeah, sure. What am I saying? #Money.

KS: No, that’s not … Come on.

LG: My stomach is growling.

KS: Do it like a sports tag.


KS: Very nice. I think I’ve found my new #Money person. Anyway, we’ll get back to you.


KS: We’re back with Recode reporter Kurt Wagner, talking about what else Facebook … Kurt has done an astonishing job this week because there’s so much news coming out of Facebook. He’s doing tons of stories, kudos all around, but we’re going to answer some of the questions that our readers and listeners have been asking. Lauren, would you read the first question?

LG: Absolutely. The first question is from Two Lamb Fam, who asks via Twitter, “Why does Facebook even give other apps access to all of that user data? Their targeted ads product doesn’t require other companies to own the data. Advertisers just tell Facebook who they want to reach and Facebook serves ads to that, no need to hand over any data. #TooEmbarrassed.” Kurt, is that true? If so, why the access?

Yeah. Well, this is what we’ve kind of been riffing on this whole conversation so far, is that it was a huge way for Facebook to grow in the early days. If they’re …

KS: Enticements.

Yeah. If they’re bringing in other apps, and Facebook benefited in the way that if I’m logging in through Spotify, maybe I’m posting back to Facebook and saying, “Hey, here’s the song that I’m currently listening to,” right?

KS: It was done to create users.

Create users, create content, create a dependency on Facebook, I’m not going to delete my Facebook account if it’s my login information for every app on my phone. So there’s a lot of different reasons that Facebook saw value in this. I think it’s been more recently, obviously, that they’ve realized, “Oh, maybe this isn’t always the best approach.”

KS: I would agree with that. I think they don’t need to. They needed to grow the company and now, of course, they’ve pulled back because they don’t need them anymore, and so they should control all their data, and then they should protect it. Let’s hope they don’t have a hacking after this.

Right. The question is, how much is already out there, right?

KS: It’s out there. Come on.


KS: Come on. That’s the thing, he was close to saying that.

I know it is out there, I’m saying how much? How many developers have your information, Kara?

KS: I don’t use Facebook that much. What “Likes” do you have? I never “Liked” anything, I hardly put my school in there.

I bet I’d laugh, I haven’t looked at my “Likes” in a long time. I’m pretty sure Rascal Flatts, I “Liked.”

KS: All right.

The show “Friends,” I liked.

KS: That’ll get you fired here at Recode. All right, next question.

LG: Why did the show “Friends” go off the air?

I don’t know, I’m a huge fan.

KS: Such a good show.

LG: Oh my goodness, which “Friends” character do you identify with the most?

Everyone thinks I’m Ross, which is a bummer, because he’s like the worst.

LG: Yeah, but you’re not a Joey.

KS: You’re not a Joey.

LG: Maybe a Chandler.

KS: No, you’re not really a Chandler.

LG: I don’t know. You know what this sounds like? A personality quiz.

Let’s get a BuzzFeed quiz on this, right?

KS: I’m trying to think.

LG: You know what happens with personality quizzes.

KS: You’re not any friend.

LG: Were you going to say he’s a Phoebe?

KS: No, you’re a Phoebe, obviously.

LG: I am a little “Whoo.”

KS: Whatever. I’m sorry, I’m really tired, it’s been a long day, we did a long interview with Mark Zuckerberg, who did a very good job, I thought. This only talks about Facebook, the social network, I wonder what Facebook the company does with intimate and more personal details from Instagram and WhatsApp. I agree, they have other things you may not know they own. Kurt?

Well, they don’t sell it, or they claim they don’t sell it, and I believe them only because I think it’d be very bad business for them to sell your data. They use it, though, to show you targeted ads. Right?

KS: Yeah.

That is the whole point of all of this data that they collect, is that they know that you’re male or female, and you’re in this age group, and you live in this city, and you like “Friends,” or you don’t like “Friends,” or you’re a Joey more than a Chandler. They know that stuff about you, which is why their ad business is so good.

LG: What’s the one ad that you both see consistently on your Instagram?

KS: I don’t go on Facebook.

LG: On your Instagram.

I get a ton of those ads that follow you around the internet. Right now, I’m getting a lot of golf club ads. I like to golf.

KS: Of course you are. I could guess that about you.

LG: But you already own them, right?

Actually, fun fact, and what a waste of ad money, I looked them up online, I went and bought them in a physical retail store, brick and mortar, and there was no way apparently for the online advertiser to know that I’d already made the purchase. So for the last six weeks I’ve been getting golf club ads, and I just laugh every time because I’m like, “I already made this purchase, man, you’re wasting your dollars on me.” Yes, I do like to golf.

LG: Yes. I get followed by …

Most people at Recode make fun of me for that.

LG: The funny thing is that I don’t even like to … I don’t really like to decorate that much, and I’ve been followed by this Parachute Home ad on Instagram for months now, and everything is the same sort of very, I don’t know, southern California aesthetic.

KS: It’s sheets. Brooke Linen is our sponsor, but okay.

LG: Oh.

KS: Anyway.

LG: Is that the same company?

KS: No, they’re not the same.

LG: I don’t know, I just get followed by home décor ads a lot. I must have “Liked” accounts at some point.

KS: You know what I get? I’ll tell you what I get. I read the New York Times every day and I had to finally literally complain to Twitter, and they took it down, I think they went and added a special Kara Swisher squad. I complained to the New York Times CEO, too. It was a shirt company that had a rainbow sort of painted shirt, so that it was like a … It was a really ugly white shirt with gay rainbow splatter, and I was like, “I’m never buying that shirt, stop.”

LG: That was on the New York Times?

KS: Every day. Every five scrolls.

LG: So you think it targeted you?

KS: Some gay thing. Why would I want a rainbow paint-splattered shirt? It was crazy.

So what we’ve learned is you just go complain to Jack Dorsey at Twitter.

KS: I did that, yeah.

Everyone out there, just call up Mark Zuckerberg like Kara would, and tell him that you don’t like the ads you see.

KS: I might go to Sheryl for that.

Okay, call Sheryl.

KS: Yeah. Okay. I’m just saying, they’re irritating. Okay, next one.

LG: Next one is from Fernanda Beltrao, who wrote via email, “My first question is, should we really call it a data breach? No one stole …”

KS: No one calls it that, Fernanda.

LG: She said, “No one stole the data, right? Facebook sold it. Also, is there any way that Facebook can keep control of the data they sell and make sure it’s not used in an ethical way? Or, I don’t know, don’t sell it at all.”

KS: Yes.

LG: Well, we’re kind of talking about this one.

Yeah, there’s a few things here.

KS: Go ahead, Kurt, just take this one. The answer is yes and yes.

Let’s unpack this question.

LG: Yeah.

One, Facebook doesn’t sell your data, we just talked about that. This was not an issue of Facebook selling data. It was also not a breach because, as Fernanda pointed out, there was no technical hacking, there was no breaking through the firewall into the back systems. Facebook gave this data away to a partner that had used its API, that was all above board, by the books. That partner then gave that data away, which was a violation of the rules. So, as we’ve talked about before, Facebook doesn’t sell your data, it gives it away to certain partners.

KS: That’s even worse.

Yeah. Really, there’s no way for them to kind of keep tabs on where it goes after the partner has it, and that’s really what the problem is here.

KS: It’s like the clap. Not that I …

Oh God.

KS: Sorry. Oh Kurt, I’m sorry.

No, that’s good. That just caught me … You know. I was in Facebook data mindset.

KS: It just goes. It’s like if you opened a pillow up and spread the feathers, they’re gone.

Okay, yeah.

KS: You can’t get them back, or not all of them.

It’d be a pain.

KS: You can’t, it’s gone. It’s gone. All right, feather pillow was a much better thing than the clap.

All right, Mike Stehle via email, “Does a Facebook user/account holder essentially have access to all their friends’ data? In other words, if I have a lot of friends or followers, can I access their data? Can I voluntarily pass that data to others such as Cambridge Analytica? Couldn’t any Facebook user with lots of friends who is sympathetic to Trump simply consent to Cambridge Analytica accessing the data for their friends?” I don’t know that. Kurt?

LG: That’s interesting.

Yeah. I read this before and I went and tried to do a little looking. Obviously, if you are friends with someone you have certain information that they share with their friends, right?

KS: Yeah.

I would probably share my location, name, school, all of that stuff, with the people I’ve agreed to be friends with. I guess there’s nothing stopping you from going to all of your friend profiles individually, tracking all of that information …

KS: That’s crazy.

Collecting it and then sending it to someone. It seems like a huge hassle and I don’t think any …

KS: You can.

It’s not scalable in the way that any advertiser would want it.

KS: It’s an interesting question. Then, “We know from the recent indictments that 13 Russian individuals/companies set up Facebook accounts, posing as U.S. citizens or groups. Did that give the Russians access to the data of those individuals that followed or friended those fake individuals/groups?” Yeah, I suppose they did. “If so, is there a way for FB to trace to see if those people — the unwitting friends of the Russians — were then targeted in the manner described by Cambridge Analytica?” By the way, I did see a New York Times piece about when they found out they were going to Russian events, they were like, “Yeah, that’s okay.” Like they went to some of the people who got duped-

LG: Who went?

KS: New York Times went to some of the people that got duped into going to events the Russians put together. They’re like, “Well, so what? I still agree.”

LG: Oh geez.

KS: Yeah, exactly. All right, were targeted in the manner … So, what about that?

This question is basically asking, if you’re a page or a publisher, can you get all of the data from the people who follow your page or “Like” your page, in the way that you would get friends’ data. I have a professional Facebook page, Lauren, you do as well, I read this question, so I went onto my professional Facebook page and I tried to see, can I get all the data from my followers?

What I was able to do was see aggregated data. So I could see, for example, that I had 10 followers from Seattle, Washington, or I could see that I had 20 followers in the 18-to-24 age bracket, but I wasn’t able, unless I just missed it, which is possible, but I wasn’t able to go in and look at individual profiles, or collect all of that personal granular data. All I could get was big-picture stuff.

LG: Yeah, but even aggregate data sets have been shown through data science, you could work into it backwards and find out, at least who people are.

The value of that is, if we’re Recode, which we are, and we go to an advertiser and we say, “Hey, we want to give you a …” What is the kind of ad now? “Native ad, native content, or whatever. Here’s the demographics of our followers.”

LG: Yeah, I have 10 followers in Seattle.

Yeah, they might say, “Oh great, just the person we wanted to reach, we’re going to pay you money for something.” So there is value to it, but I don’t think it’s the same as having the individual granular data of all these users, which is what we’re talking about here with the Cambridge Analytica situation.

KS: Yeah, 100 percent. Just to be clear, we’re here at Vox tonight and we have … I tweeted out the other day Vox sells data, too, but it keeps it anonymized, it’s quite conservative, and we don’t give it out to third parties in the same way. Anyway, you can go read it. I tweeted it out, I’ll retweet it again. All publishers do this, but not in this massive amount and with this much information. We don’t have people’s “Likes,” we don’t have people’s behaviors, we don’t have … Just read the story, essentially.

LG: It’d be a good if 2.2 billion people were subscribed to Vox content.

KS: Yeah, that would be great. I sure would have a lot more value … Everybody must wear pink or something like that, I declare it. Okay, so we’re going to take a quick break, one more word from our sponsors, more questions after this. Lauren?

LG: I thought it was Kurt’s turn.

KS: No.

LG: #Money.

KS: Part?

LG: Part two.

KS: Kurt, do that again, please?


LG: Oh my God, you little …

Is that good? That was different. That was part two.

LG: Move over, [Michael] Buble.

That was more country music than I intended.

KS: I liked it. I like it, Kurt, you’re hired. When we get back we’ll ask more questions.


KS: We’re back with Kurt Wagner of Recode who covers Facebook. We just finished a 20-minute interview with Mark Zuckerberg about mistakes were made. Would you call it that, mistakes were made?

Mistakes were made.

KS: Uh-oh, uh-oh, a little bit of uh-oh.

I’m sorry, whoops.

KS: So sorry. Whoops.

My responsibility.

KS: Yeah, that kind of stuff. Yeah. He was very thoughtful about a lot of stuff.

I thought he was. He actually answered all the questions.

KS: He did.

And I thought he didn’t really dodge.

KS: He didn’t.

I know he didn’t fully say yes to the …

KS: He didn’t agree with me on every issue.

He didn’t agree, but I thought he actually answered the questions pretty appropriately.

KS: He did. We’re going to put the whole transcript up. I have a different thought about it, he doesn’t agree with everything …

Right. Right.

KS: … and us, but that’s okay, he made his case.

LG: Did you ask him about what the possible fallout would be from all of this?

KS: Yes.

LG: What did he say?

KS: Not good. Right?

Yeah. That was at the very end, he was running to an all-hands meeting with staff. Which was kind of cool, he was literally on the cellphone as he was walking to the all-hands meeting.

KS: Yeah, he could have hung up on us.

You kind of said, “Hey, is this a big deal for Facebook’s legacy?”

KS: How bad?

He was pretty much like, “Uh, yeah, people seem pretty upset about it.”

KS: He gets it.

He wasn’t being naïve about the fact that this is a big story.

KS: Yeah, exactly. He was good. Look, people are still furious. Right now, on Twitter, I’m looking at people just really hating Facebook right now.

LG: What are they saying?

KS: That they stole our stuff, how dare he, he should be in jail, a lot of stuff. A lot of stuff that’s not nice. I feel your pain. I feel your pain, I agree.

LG: Well, yeah, and those are the users. They matter.

KS: They did not responsibly run that platform the way they should have. There’s no two ways about it.

All right, next question, EF something: “What’s the difference between how prior campaigns used Facebook data, especially Obama, and what Cambridge Analytica did?” Kurt?

This is a really good question, so I tried to … I wasn’t actually covering Facebook back when Obama was having his 2012 campaign, but what I gathered, because it’s now been brought back up to the surface in the last couple days, is that they also did something very similar. The difference is that they claim they used their own app. So, whereas Cambridge Analytica got a lot of this information from that professor that we talked about at the very beginning, which violated Facebook’s rules, the Obama campaign is saying, “Well, we actually just created our own app, people opted in, and as a result we were able to gather the information about them and their friend networks to do targeting.”

LG: Was this in 2008 or 2012? I would imagine 2012?

2012 is my understanding, which would have still been before they made the changes, so it makes sense. It doesn’t sound like there was a huge difference in terms of the data that each group had, it just was how the data was collected. So, not saying that Cambridge Analytica necessarily did anything different than Obama did, but they got their data in a different way.

LG: So what you’re saying is that the Obama campaign also knew you “Liked” “Friends.”

They knew I “Liked” “Friends” and Red Robin and Rascal Flatts.

KS: What? What is Red Robin?

These are the things I probably “Liked” on my Facebook profile.

LG: Are the days of innocent … You know what? I don’t even know if campaigns were ever innocent.

KS: We’ve been using data forever.

LG: I was just going to say, data’s been used and manipulated in elections for as long as …

KS: They went to Facebook because it was like, “Why do you rob banks?” “Because that’s where the money is.” Facebook’s where the people are.

LG: I guess my question is, does this really change anything now that we …

KS: It gets worse and worse. It gets worse and worse, as long as these companies don’t take this seriously. There may be a point where they just can’t sell the political … Again, they’ll find a way to get at this data. This is a treasure trove. AI, for example, needs huge data sets to be effective and they have the biggest data sets, them, Google, Amazon, these data sets are valuable beyond their … They’re just money in the bank, so to say.

KS: All right, next question, Lauren, why don’t you read it.

LG: Next question is from Swaroop Satheesh.

KS: Oh, that’s a great name.

LG: “With Facebook scandal and Uber autonomous car getting into a fatal accident” — it was a terrible story — “do you think we’re going to see a paradigm shift in the way tech companies treat data?”

KS: I don’t know if they have anything to do with each other?

LG: Yeah. Data and …

KS: Look, autonomous cars are going to … This is a tragic event, but you’re going to see this happening, hundreds of people die in car accidents every day, they’re all tragic, every one of them. So you’re going to see this as autonomous cars roll out, it’s going to be a lot of … Over the years, any technology has its price. In this case, it was tragic. I don’t know if it has to do with data. That had to do with sensors and the pedestrian.

I think it’s more to do with responsibility, right?

KS: Yeah. Yeah. Good point, Kurt.

It’s less specific to data, more about how we hold these companies accountable. Clearly, Facebook’s going through that now. I haven’t, believe it or not, even been following the Uber thing as much, just because Facebook has been so crazy the last couple days, but I’m sure that Uber will have to hold itself accountable and people will hold it accountable.

KS: Yep, a hundred percent. All right, next question is from Diego Siles, “The president of Bolivia is going for unconstitutional reelection”— that’s his opinion, I don’t know much about Bolivia and politics — “next year and plans to have a social media team.” I’m surprised he doesn’t have one already. “Will Facebook be controlling this for things outside the U.S. considering it’s a market not particularly interesting to them?” That’s an issue, because Facebook has a lot of impact in countries in Indonesia and others, they’ve affected things by fake news.

LG: The Philippines.

KS: They have impact everywhere, and the massive impact they have in these other countries where people rely on them is really … They’ve got a business that’s super complex and super prone to controversy, I think.

LG: Right.

KS: That’s a nice way of putting it.

LG: It’s not only about people in certain markets getting their news entirely from Facebook, but it’s the way that certain governments are able to manipulate Facebook data and the messages that are being shown to people in a very undemocratic way. It’s of concern.

I only have one point on this, which is that — I believe it was almost a year ago, right before the French presidential election, Facebook came out and said they banned like 30,000 fake accounts or bot accounts, that they were afraid could try and sway that election. I realize that France is perhaps different than Bolivia, but at the same time, I think Facebook does not want to be a manipulative service in any country or for any election. Obviously, we’ve talked primarily about the U.S. presidential election for the last 18 months or so, but I can guarantee that they’re focused and thinking about stuff that’s happening in other parts of the world, as well.

KS: Right. Absolutely. Next question, Lauren?

LG: Michael Pacholik, “How do I become …”

KS: These names are so good today.

LG: Everyone, Kara likes your name. “How do I become a ghost on Facebook without deactivating my account? Convincing my friends to abandon it with me is a losing battle and we as a group use it to organize events.” So he wants to ghost, but he still kind of wants to use it.

It’s actually not that hard.

KS: It’s not.

You have your account and you don’t post.

LG: And you don’t “Like” things.

Yeah. You can participate in a group conversation without posting publicly. Even if you do want to post, you can change … I think there’s just so many little details about Facebook in terms of privacy that people just aren’t aware of. So, every time you post you can set who can see that post, you can show it to everybody on Facebook, you could show it just to your friends, you could actually eliminate your ex-girlfriend or boyfriend from seeing it. There’s a ton of controls that you have, it’s just a matter of understanding them, knowing where to find them.

If you want to be on Facebook but you don’t want people to really know you’re on Facebook, you can create an account, give them the bare minimum information they would need from you, which is probably just the name and an email, and participate in things like private groups and that’s about it.

KS: Yeah.

LG: There you go.

KS: Yep. Question from Alan Hui? Okay. “What’s the chances of Mark become POTUS now that this storm happened?” I’m not so sure he was going to be POTUS. I never went with that one, I don’t think even Kurt …

Yeah. I wasn’t a believer.

KS: It’s not good, but here we have Trump, so …

Yeah, I was going to say, people seem to forget things pretty quickly.

LG: Yeah, especially when it comes to business deals and interactions.

KS: Yeah.


KS: I don’t know, we’ve got a porn star and a former Playboy model suing the president, so I don’t know. I feel like the data breach should be …

Yeah, I wouldn’t say there’s anything that disqualifies you from being president now.

KS: The data was still …


KS: I don’t know, that’s a good question. I don’t think he’s running. It’s not good. It’s not good. It’s not good for him. He did point this out, he said he’s made mistakes before and he’s going to make them again.

Oh yeah. Honestly, five days ago, six days ago, when this first broke, I was like, “Well, you know, this is certainly a notable story …”

LG: Another Facebook scandal.

“But you know, this’ll be over in 48 hours.” I’ve been pretty blown away by the reaction. You can just tell people are fed up.

KS: The timing. People are tired.

Yeah, people are fed up.

KS: People are fed up, and because of the election, the political part of it, even the idea that they may have even slightly impacted the election — and people will debate how much or how little — that’s really disturbing.

LG: Yeah.

KS: If you need to focus on someone, rather than the Russians, you focus on Facebook.

LG: Well, a lot of times, in any relationship, whether that’s with a product or service or in real life, it’s not the thing that seems to … What’s the saying? The straw that broke the camel’s back?

KS: Yeah.

LG: It might not be the biggest thing, but it might be a buildup of things that have betrayed people’s trust.

KS: You know I’ve been hammering on this, it’s people are getting a very lizard sense that technology might not be for the good. Like self-driving cars, automation, robotics, all these things, AI, I think people understand very clearly in the back of their minds that these things are going to have real consequences.

LG: What you’re describing, too, are also very … Those are technology, and I think what’s happening here is there’s this confluence of events where the culture of technology is meeting with the products and services in a way that people aren’t comfortable with.

KS: It’s the political part.

LG: It’s not just whatever’s going on with Uber, it’s the Uber culture that we’ve heard a lot about, and the evasiveness, and that whole “move fast and break things, and ask for forgiveness later” kind of ethos. When that starts to butt up against the actual … It starts to feel very real to people, when they’re not just reading about those stories in the newspaper, but when it actually impacts the products and services they use every day. When they can see that and it’s a very tangible thing, I think that’s when you have this perfect storm of events.

I would say the last point is that this is a very personal thing for potentially every Facebook user, right?

KS: Yeah.

All the dilemmas and drama and issues we’ve dealt with so far have been pretty big-picture, honestly. Like, fake news, was it used by the Russians to whatever? A lot of that, first of all, apparently half the people don’t care or don’t believe about it, a lot of people aren’t in the U.S. so they don’t care, they don’t believe about it. This is like every single Facebook user has data within Facebook.

LG: Right, or has connected to some third-party app.


LG: Yeah.

So, this is a problem that does not just affect people who are disgruntled about the 2016 presidential election.

KS: No.

This is something that could theoretically impact two billion people who use the service, so I think that’s why we’re seeing even more …

KS: And it’s the political …

I think there’s a political spin, too.

LG: Do you remember when there were websites you could click on where it would tell you if you had read something that was made by some type of fake news/Russian bot, if you went and clicked on it, it would say, “No.” Like in my case, it said, “No, don’t worry, you didn’t read anything that actually came from one of those sources.” You kind of feel like, “It’s okay, I think have sense on the platform.”


LG: When it comes to … I, at one point, you mentioned Words With Friends earlier.


LG: I connected my account with something that does this data scraping. It really does open it up to so many people.

Right. Well, and not just if you did it, but now we know …

LG: And my friends.

… friends do it.

LG: Right, prior to 2014.

Words with Friends probably got my data.

KS: Yep, a hundred percent. All right, last question, Lauren?

LG: This is via email from Liz Weeks, one of our most loyal listeners, who sent a lot more questions than this, but we’re going to read a couple. “First and foremost, I have a rudimentary understanding of what it means to ‘delete’ data, I just assume even if it’s deleted by me or even a company, it’s still out there somewhere in the ether.” Good point, Liz. “When Facebook promises to delete data once and for all, what precisely do they mean?”

It’s an amazing question because I don’t know if anyone has a super, super strong answer for that. Basically, traditionally, it means if you’re deleting it, you’re wiping it off of a company’s servers. They have these servers where they store messages and posts and videos, so that when you open the app and you say, “Oh, I want to look at that vacation photo I haven’t looked at for two years,” it’s stored somewhere on their server so that you’re able to look it up. If it’s deleted, that means it’s wiped completely off that.

I think the issue here that Liz is getting at is that once the data leaves Facebook’s servers, and once they share it with Words With Friends or Spotify or with Airbnb or whoever it may be, it’s now living in two places. Facebook can only delete it on the servers that it controls. It has to rely on these third parties to also treat it responsibly, take care of it, protect it, and that’s where we’re running into the issue: How many tens of thousands of developers that created an app that was cool for three weeks and then disappeared, how do we know that they were practicing safe user privacy regulation?

LG: Yeah, that’s the issue.

KS: That’s the issue, they didn’t monitor it. It’s monitoring, monitoring, monitoring.

So you should assume that perhaps most of the things you’ve given Facebook probably do exist somewhere out there, even if they’ve deleted it.

LG: Fun. Another question from Liz, “What role does Joseph Chancellor play? I would like to understand if he’s a psychiatrist for Facebook or if he was simply given access to Facebook data. What checks does Facebook have on researchers using that data for non-academic purposes and B) do they have any conflicts of interest provisions?”

I tried to look into this a little bit. Joseph Chancellor is the former Cambridge Analytica employee who is now employed by Facebook. I do not know much. My understanding from what I’ve read is that Facebook is now exploring … He’s still there, he’s still employed there, I believe, and Facebook’s now looking into whether there was any wrongdoing from him, was there a connection of some kind, was he helping?

I think it’s very much an innocent-until-proven-guilty kind of thing, because I think this guy could very well have just been an employee there and he’s now an employee at Facebook. That’s pretty much what I know. I assume, especially given the gravity of the situation, that Facebook is looking into that very closely.

KS: Yeah, absolutely. Overall, this is the last question, Kurt, what’s the next story?

I think the big, big story that’s going to be important and also might not happen right away, is what impact all of this has on Facebook’s executive team.

KS: Right. The cohesive team, they always brag about their cohesion.

Yeah. Kara and I have talked about this a ton. Facebook’s executive team is very close, they’ve almost all been there for 10 years or more, a lot of them were the original crew that helped build Facebook from Palo Alto.

KS: You’d say OG.

LG: Who are some of those people?

OG? Yeah.

KS: Not these people.

Yeah, I wouldn’t call them OG.

KS: Original geeks.

What? Say what?

LG: Who are some of these people?

Like Andrew Bosworth, who goes by Bos, Naomi Gleit.

KS: Shrep.

Mike Schroepfer, Sheryl Sandberg.

KS: Dan Rose.

Dan Rose is a good one. I think he’s been there 12 years.

KS: Chris Cox.

Chris Cox.

KS: It’s more than a dozen years.

Chris Cox is head of product at Facebook, he’s literally like Zuckerberg’s best friend, they travel together, there was like paparazzi photos of them in Hawaii.

KS: It’s a very cohesive … Elliot Schrage is there.

I think the issue is, we just found out this week that their chief security officer is leaving over some disagreements about how to handle all of this stuff.

KS: He wanted more transparency.

I can’t believe he’s …

LG: The whole team, Nicole Perlroth reported that

KS: Great job on that, New York Times.

LG: Yeah.

Yes, awesome story. I can’t imagine he’s the only one who’s had a disagreement about this internally. I can’t imagine that there aren’t people who … Obviously, Mark is responsible, Sheryl is responsible, but there have got to be other people who have been there a long time who are responsible for what’s going on here.

So, are there going to be more exits? Are there going to be people who are asked to leave because, “Thank you for your service but you’ve screwed up”? Then are there going to be people like Alex Stamos, who say, “Well, we disagree with how things have gone,” or, “This is just too much for us and we’re going to leave.”

LG: How’s the board reacting?

The board gave a statement in support of Mark and Sheryl just a few hours ago, and I actually thought that was really interesting because Mark and Sheryl are both on the board and Mark basically controls the whole …

KS: Controls the board. It’s like a Russian election.

People were making a big deal, they were like, “Oh, the board came out with a statement in support,” and I was like …

KS: Well, he’s won by 76 percent.


KS: What a surprise.

LG: I call a board meeting.


KS: Mark is not like that, but the fact of the matter is, he controls the board, period.


KS: Period, period, period, end of story. If he didn’t … By the way, boards are like … Come on, look at what the Uber board did. This guy practically killed a puppy in front of them, he would have had to do that, I don’t know what he could have done and … He didn’t kill a puppy.

Facebook in particular has been around for a long time. Marc Andreessen is not going to come out and publicly chastise Mark Zuckerberg.

KS: Marc Andreessen is not going to slap around Mark Zuckerberg. Never. Then Peter Thiel, this is not a group of people that are going to object, they’re going to stick together. That’s the issue is the wagon, whatever you do with wagons.

LG: No, what do you do with wagons?

KS: You circle them.

LG: That’s right, okay.

KS: You circle them. So, circling wagons is what Silicon Valley does.

LG: I didn’t know if you were going to say like, the wheels are coming off. I was really wondering where you were going with that.

KS: No, the wheels are coming off some of the wagons, and wobbly wheels, but they’re never going to do this, not Mark Zuckerberg, not. He’s like, no, he’s the top top, do you know what I mean?

LG: Mm-hmm.

KS: Nobody’s going to mess with him. The question is, are they going to do their job? These boards, none of these boards in Silicon Valley — and by the way, across the country, really, come on — I just don’t expect any kind of courage from any of them. As it’s shown over and over again, the Yahoo board, the … Just every … It’s just not going to happen, right?

Yeah, I agree.

KS: They’re going to support him.

I saw the statement and I thought, “Of course.”

KS: I’d like to see one board member saying, “This sucks.”

It would have been way, way, way, way more interesting if they had not shown support for Mark and Sheryl.

KS: Yeah. Getting to what Kurt was talking about, and we will finish on this, is this cohesion. I had a back and forth with Elliot Schrage, who’s the head of policy and comms essentially, he came from Google with Sheryl. I put my hand up, and he’s like, “Oh no.” And I said, “You guys brag about your cohesion, that you all get along.” I said, “Is that a problem? Because there’s nobody, an irritant, in the room.”

LG: Right, it’s a bunch of yes people. Well, not …

KS: Not yes people, that’s too easy. It’s a very different kind of thing, it’s a cohesive mentality of these people that agree …

They believe in their mission you were talking about earlier.

KS: They’re in agreement. They’re in violent agreement. They don’t want to get angry at each other, they’re very cohesive, they’re incredibly smart and everything else. So, there’s nobody like … I was joking with Marc Andreessen and I was texting with him, and I was like, “Put me on the board, that’ll be …” He didn’t respond, but it was really interesting. It’s like, you need irritants in these companies to say, “No,” and that doesn’t happen. Anyway, we’ll see. There’s lots to come, right Kurt?

A lot more.

KS: Get some sleep, Kurt.

I would like to.

KS: Get up early.

I’m doing CNN International at 10 pm tonight.

KS: Fantastic. I’m going to pass you a lot more.


KS: Okay. All right. Thank you, Kurt.

Thanks for having me, guys.

LG: Thank you Kurt. It was really good chatting with you.

Recode – All

Cash For Apps: Make money with android app

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

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

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 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.


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.”


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?


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.


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.”


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.


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?


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.


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.


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.


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?


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


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


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.


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, 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.


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.”


“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?



Nothin’ better than “the nest egg.”

“Don’t say nest, don’t say egg.”

“Desert Inn has heart.”

It’s a thing.

So great.


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. 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.

Recode – All

Cash For Apps: Make money with android app

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.


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.


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.


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.


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.


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.


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?


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.



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.


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.


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.


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.


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.


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.



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.


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?


Because you interview a lot of people.


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.



Mooch, it was great talking to you. Thanks for coming on the show.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Facebook co-founder Chris Hughes on Recode Decode

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

His new book advocates for providing “guaranteed income.”

On this episode of Recode Decode, hosted by Kara Swisher, Chris Hughes, the co-founder of Facebook and former owner of The New Republic, talks about his new book, “Fair Shot: Rethinking Inequality and How We Earn.” In it, Hughes argues that working people should receive a guaranteed income, paid for by the top 1 percent of earners in the U.S.

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: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as someone who plans to get rich by selling bulletproof armor for Teslas, 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. You can find more episodes of Recode Decode on Apple Podcasts, Spotify, Google Play Music or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Now in week three of my horrible cold, which is giving me this very scratchy voice today, still, we have in the red chair Chris Hughes, one of the co-founders of Facebook. He’s also the author of a new book called “Fair Shot: Rethinking Inequality and How We Earn.” It argues that working people should receive a guaranteed income, sometimes called Universal Basic Income, paid for by the 1 percent like Chris himself. Chris, welcome to Recode Decode.

Chris Hughes: Thanks for having me.

So, tell me about … and let me go into your background first, because this is a big topic, and the joke I made at the top about bulletproofing your Teslas was from a quote that Robert Reich just gave at an event, where he said, “You’re either gonna have to do something like Universal Basic Income or” — to the rich — “or you’re gonna have to pay to bulletproof your Teslas.” You know, so we’ll get into a really bad situation of haves and have-nots and like Brazil or some countries where the rich have to insulate themselves using security, or South Africa or somewhere else.

So, I wanted to explain that it’s not a joke but it’s a very serious issue. But first, let’s talk about your background. Can you give everybody a quick synopsis of your history?

Happily. I’ll try to give the Cliff’s Notes version. I grew up in a little town, Hickory, North Carolina. It’s at the foothills of the Appalachian Mountains, used to be a …

You’ve barely lost the accent, but you have.

I did a little bit.

I can hear it.

Well, that’s part of the story, actually. I grew up there, my mom was a public school teacher, Dad was a traveling paper salesman, but then I got a scholarship to go to a fancy boarding school, Phillips Andover, up in Massachusetts. And it was there where …

Nice. That is a fancy boarding school.

It is indeed. It was there where I lost the accent and then later got a scholarship to go to Harvard and met Mark Zuckerberg, freshman year. We ended up roommates sophomore year, started Facebook in February of 2004, the rocket ship took off and my life changed pretty dramatically.

I ended up wanting to write the book in order to partially tell my story and be clear that the financial reward that I got from three years’ worth of work at Facebook was entirely disproportionate to the time and effort put in, but to also make the case that my story, which is nothing but … You know, the only thing we can call it is a lucky break, is unfortunately not that uncommon in the economy today.

No, now, you are unusual …

That a small group of people … I might be extreme but I don’t think my case is actually that unusual, a small group of people are getting very, very wealthy while everybody else is struggling to make ends meets.

Yeah, extremely wealthy in some cases. What did you … after Facebook, you left relatively early?

I did. I left in 2007 and went and worked for President Obama.

Right, like digital stuff.

Back in the early days of the campaign, I had the title of Director of Online Organizing, which pretty much meant trying to not just build a community online but create a movement that was willing to take the campaign into their own hands, not just sort of the hub-and-spoke traditional model of those campaigns, but instead people standing up to organize events and raise money, knock on doors, make phone calls and using the internet to power …

Which was early on. I mean, this had been tried by … Actually, the right wing was very good at it. The conservatives were very good at it way, way, way back, but this was one of the biggest efforts to do this, an important part of his winning.

Yeah, it was a transitional moment in politics in so many ways, but I think the biggest shift was not so much in technology. We had a social network called barackobama.com The technology was good but it was in the expectations that the candidate at the time and that the campaign around him was interesting, specifically saying, “You know, we’re not going to try to lock down the message and just us, three or four at the campaign headquarters in Chicago, are going to figure it all out. Instead, we’re going to open it up and quite literally enable anybody to write anything on our website barackobama.com.”

It was a symbolic moment but it mattered because it invited people into the campaign, to participate in a way that previously they hadn’t really been asked to, and it was symbolic of a lot of other changes. So we ended up raising tens of millions, hundreds of million by the end, of dollars through the internet, had tens of thousands of grassroots events. It was an important moment.

What got you there? How did you get there, you just liked Obama?

Well, it was back in 2007 and …

Way back then, that’s so long ago.

I know. It’s not that long ago, but politics has changed so dramatically, this really feels that way.

I was working on some of the political products at Facebook and so, one of the people that I got to know was this guy Reggie Love, who was President Obama’s body man, as they’re called, and …

That’s an unfortunate term, isn’t it?

Anyway, sorry to say that word, but he was his assistant and he just went with him anywhere. We started having conversations, just like we were doing with other candidates and officeholders, on how to use Facebook. It became clear that Obama was going to throw his hat in the ring and then I talked to a few of the other people. I did really believe in Obama’s story himself and the promise that he offered. Initially I just took a leave, but the leave turned into a permanent move.

Did you miss doing that, leaving Facebook?

You know, I had mixed feelings about it, but my experience was really different than Mark’s and Dustin’s. I mean, Facebook was a mission in and of itself for Mark, and for me it was a company that I enjoyed being a part of, growing. I learned a lot, it was exciting, there were all kinds of challenges, but it was clear to me early on that Facebook was not my life’s work. It was going to be a chapter, and it turned out to be a very important chapter, but I felt, particularly in 2007 when George Bush was president, we had all kinds of what I view as unfair economic policies, the war in Iraq and Afghanistan. It was a time when I was really hopeful that the country could change the corner.

Well, you had money and means and you had skills.

Yeah, at that point I moved to the campaign and was paid I think $ 65,000. Facebook stock was all …

No one feels badly for you.

No, no, no, I know, I’m just being clear. I talk in the book about when I actually sold some stock and didn’t make money and what a massive change it was, but in that period the move from Facebook to Obama was about the mission.

Yeah, you were at a startup, it was a startup, people forget. Yeah, absolutely. So, you did that, and then afterwards had done a range of things. I’m sorry to go back in history but people find your background interesting.

It’s fun.

So, you then went on to buy a publication, you did a lot of things, your husband ran for office.

He did, yeah. After Facebook went public in 2012, my husband and I made a commitment to give away the vast majority of the money that we made and to invest that money in causes that we believed in. I started investing in, really, multiple things, and on the one hand I started the journey to cash. That is how I sort of ended up writing the book today and talking about guaranteed income and universal basic income.

I also bought a magazine called The New Republic and decided to invest there because I believed two things. That the journalism that The New Republic had done for decades, nearly 100 years at the time, was incredibly valuable, important to the world, important to democracy and also deserved, in 2012, a bigger audience than it had historically had. I talk a lot in the book about my experience there because on the whole there are more things that I regret than …

Yeah, a little rocky.

More than a little rocky.

Those are real grumpy — I’m being polite — those are super grumpy journalists. I lived in Washington, I know those things.

Yeah, but I also came in guns blazing.

Yeah, you did. I know better.

I came in with the kind of expectation that if you invest a lot of money and you bring together smart people and you set really ambitious goals, you know, you can reach them. That’s what the first two experiences of my career had taught me. Between Facebook and the Obama Campaign they taught me that the impossible was actually a little bit more possible than one might think.

What was the big problem? You write about it, but what do you think the big issue … what’s your big mistake and that big mistake? I think it’s a group of people that doesn’t like the internet in general. Most traditional media, in my experience over the years, has been resistant.

Well, I think …

Or grudging would be [a better word].

If I were to do it all over again, I would take a different approach. I would not come in and say the kind of journalism that The New Republic has historically done is necessarily made for an audience of tens of millions of people. I came in really thinking that we could and should open it up to a much broader kind of audience.

Big ideas should have big …

Exactly, and I think at the end of the day I was maybe the last to learn what everybody else already knew. The New Republic had been a small kind of magazine.

Artisanal, we would call it artisanal.

Yeah, we had 35,000 subscribers and that wasn’t because … You know, it was because there’s a community of people who are politically minded, culturally curious, literary, etc., but that community is relatively small.

Maybe. We’ll see what Laurene Jobs does at the Atlantic, they’re doing a kind of conversation.

Yeah, well, the Atlantic has a different tradition, the New Yorker has its own. You know, each of these institutions are artisanal, they make up a category. But so rather than swinging for the fences, I think the institution would have been better served, the people I worked with would have been better served and the values behind it would have been better served if we had made more modest investments. If we’d said, “Yes, we’re going to have a good website that is in line with the values of the day, but we don’t need the best award-winning iPad app guys.” Like the slickest kind of technology content management systems, we probably don’t need to create a custom one from scratch, as we ended up doing. These kinds of things …

You’re the internet guy. Someone there called you a terrier to me.

What’s that?


What does that mean?

I don’t know, don’t ask me. I get those … I’m sorry, everyone in … There’s a reason I left Washington, and a part of it was the extreme distaste for the internet no matter what, even if it was a relatively good idea.

Look, you came in with … you did come in with guns blazing, and those people, no. When I was like, “No, no, no, Chris, stop, these are not the …” It’s like when Pierre Omidyar went into Intercept, at first there was like, “Oh, they’re real grumpy over there,” but it’s like, Laurene Jobs is making investments. There’s all kind of internet people making … Jeff Bezos — the Washington Post — seems to have done a very good job of that.

Absolutely, but just one last point on that. I do think it’s important, though, to recognize that the kind of journalism that all of these institutions do is really a public goal.


And this idea that the market … We have to find robust, for-profit kind of sustainable models for this journalism, maybe we will. There’s a scenario where we don’t and that doesn’t mean that it’s not important to support it.

Well, you have ProPublica.

Exactly, you do have ProPublica and Texas Tribune, you have some …

Yeah, you have rich people backing these things.

Exactly, and when I started … I see you sort of rolling your eyes a little bit. My initial response was a kind of skepticism, “Is that really sustainable?” But on the other side of my experience, I think that is in many ways the story of a lot of the high-quality media in the country.

The New Republic had not really ever turned a profit. It was technically a company but it was really … I mean, I have a line in the book, it was a cause dressed up as a company — and I think we culturally need to get a little bit more used to the fact that even if Jeff was losing an immense amount of money at the Washington Post, I still think that the journalism is important to …

Yeah, well, it’s interesting because … We’ll get to that, because you’re talking about rich people paying for something like universal income too. There is a duty of public service and maybe that’s the way it’s going to be paid for and everyone should stop bellyaching over it, you’re right. You know what I mean, on some level. So, what’s your relationship there now? None? Or you sold?

No, I sold the magazine to Win McCormack in 2016.

Well, that’s a name of a person who should own The New Republic. Sorry. Win McCormack?


It’s a perfect name. You have a good name but it’s not as good as Win McCormack.

Not quite as austere, right?

Yes, yeah. So you have had nothing to do, or do you imagine going into other journalism-type things? You had an interest.

Yeah, and my interest is still real. I’m focused on specifically income inequality. I have come to believe that where the most opportunity lies is in making the case for cash and specifically for guaranteed income for Americans who are struggling to make ends meet, so that’s what I’m most …

Well, we’re going to talk about in the next section. I just want to finish up with you, and then your husband ran for office. You go from one thing to … he didn’t win.

Well, that was him. That wasn’t me.

Yes, but you were involved in it.

Yes, it turns out we are married.

We are married, and didn’t win. Is he going to run again or is that it?

I don’t think so. He’s focused on something called Stand Up America, which is an organization that tries to channel a resistance to Trump’s agenda. It’s quite the understatement that the energy that the resistance has cultivated over the past few years is in need of organization, so what they do is connect the dots, and on Facebook, on Twitter, email, text message, I mean, you name it. It’s trying to make sure people are aware of what’s happening, particularly when it comes to the Russia investigation but across the board, and then translate that enthusiasm and energy into boots on the ground, door knocks and eventually, hopefully, into electoral victory.

Votes will be the thing. I just had an interesting interview with Cory Booker and I’m going to be talking to Chuck Schumer later today, but I think votes would be the thing that everyone needs to focus on beyond … and how to get people to actually step out and vote. That’s pretty much it.

Yeah, absolutely.

It’s just an understatement of how difficult that is, but it’s the only thing that’s going to change anything.

Then you move to this, this book and what got you interested in the income inequality. A lot of people out here, Sam Altman’s interested, there’s an experiment in Oakland, I think there’s one in Sweden. They’re all over.

We have one in Stockton.

Stockton, California, so talk about that. Your group has one, you are what?

My interest in guaranteed income actually started around 2012, and I came in through the international door to start. So my husband and I came into this immense amount of wealth, we made this commitment to give it all away, and so the first kind of …

And you could have done a lot of things. You could have done a lot of … like a family foundation.

The first kind of question is this like, what’s the most effective thing that you can do?


And so it seems like an easy question. It’s actually an incredibly complex one, and so we went on a journey — and I have a chapter in the book that narrates a piece of it — to think about where are we going to get the most bang for the buck? How can we help people in the way that is the most effective? And particularly from an international perspective.

I looked a lot at different things and ended up finding Michael Faye and Paul Niehaus, the two co-founders of an organization called GiveDirectly, and made a first gift of $ 100,000, which was literally texted to people living on less than a dollar a day in Kenya, and began a journey myself. And, so I came to the immense amount of evidence that cash is the most effective thing that you can do to improve health outcomes, education outcomes and lift people out of poverty.

So, giving the poor money is the way to make them not poor?

Indeed, and I learned that initially through the international lens, but then here, domestically, what I discovered is that we actually already have the world’s largest cash transfer program. It’s called the Earned Income Tax Credit. It’s called a tax credit, but what it actually is is a lived experience of … it’s a check that tens of millions of Americans get and it lifts more people out of poverty than food stamps, housing vouchers and unemployment insurance combined.

Now, it needs to be modernized, I would argue, for the economy that we live in today, not just the income inequality that we have but also the income instability that the gig economy has introduced. At the end of the day, though it’s once a belief that I had because of the empirical evidence that shows the effectiveness, and one that I feel like is a moral case, I believe that the best way to respect the dignity of people and embrace their freedom is through the most fundable thing.

Simple thing.

Through cash and the ability to chase their own dreams or figure out their own futures.

Cash or some kind of money. So, you got interested in it through that, just by giving?

Initially, and then …

What did you try with that concept? Because again there’s lots of … I’m assuming you get like pecked to death all day of what you should give to and how you can help people.

Yeah, and I mean my husband and I give to an array of causes, it’s not just Cash International. LGBT rights is another thing that’s important to us, we were active in the fight for marriage equality, but particularly when it comes to income inequality and ending poverty. When you’re on the hunt for what’s the most effective thing to do, one of the things that I’ve learned is that sometimes the best solution is the simplest. Of course we need more and better education, of course we need more small businesses to create good jobs.

We’ve spent decades thinking about those things, investing in those things, and we should think more. However, sometimes we overlook the most powerful tool or the most powerful weapon in the arsenal and in many ways the simplest, and I think cash can be that. So my hope, though, is to take the conversation a little bit out of speculating about whether robots are going to take all the jobs in 2040 and driverless car and situate it in the here and now, because income inequality has not been as bad as it is today since 1929.

Wow, that’s amazing.

Since the year the Great Depression began. I mean, the top 0.1 percent — not 1 percent, the top 0.1 percent — owns as much wealth as the bottom 90 percent combined. And so anybody who says, “Well, that’s just the way the economy works.” No, we have chosen the rules that structure this economy and we have the power to choose different ones, and I think a guaranteed income should be at the center.

All right, we’re going to talk about that more because it’s loaded with so many different things, politics with everything else, when we get back. We’re here with Chris Hughes, he is one of the co-founders of Facebook but his new book is called “Fair Shot: Rethinking Inequality and How We Earn It.” We’re going to talk more about that and other issues when we get back.


We’re here in the red chair with Chris Hughes, one of the co-founders of Facebook but he’s talking about income inequality because of his new book “Fair Shot: Rethinking Inequality and How We Earn It.”

We just talked about his background and how he got to this topic. Let’s talk some more about that because there’s so many things hanging off of income inequality. There’s all kinds of efforts. Talk first about your efforts that you’re doing in Stockton. How do you approach it? Because again, there’s lots of different thoughts about this and some people think it’s … I met someone the other day calling it communism, like, you know what I mean like, okay, yeah, kind of.

I think of it as capitalism with much better guardrails.

Okay, something like that.

The group that I co-run is called the Economic Security Project and what we are trying to do is convene a bigger, broader conversation about how a guaranteed income can work in America. There are a lot of people who are interested in UBI, how might this actually evolve, and there are a lot of people who want to think about what we can do in the next three years, what can we do in the next five years, so a shorter time horizon than …

This is to solve inequality problems right now?


Whereas there’s possible job loss, we’ll get to that.

Exactly. So what we do is we convene a network of academics, policy makers, technologists, artists, all of who are talking about, “How do we attack this?” And as part of that we move money. One of the things that we’ve done is work to support Mayor Michael Tubbs, who is the mayor of Stockton, California. For those of you who are listeners who don’t know, he’s 27 years old, he’s the youngest mayor of a major American city. He’s African-American from a city that is incredibly diverse. He’s the first African-American mayor there in generations and he is committed to exploring how a guaranteed income can work for Stocktonians in the here and now.

This is beyond payments from the government?

Specifically, what we’re doing is supporting a demonstration of the idea that will provide an income to some members of the Stockton community. The community itself will decide who exactly, how much money, the duration, etc. Community meetings are beginning this summer and disbursements are likely to begin in fall.

What does it generalize, I know that the community is deciding this, but there are standards right now growing?

Yeah, one place to begin the number, a lot of people talked about is $ 1,000 a month, others talk about more … in the book I call for $ 500 a month, making the case that modest amounts of money can really have out-sized impacts and go even further. The idea, though, is to invite more people into the conversation and move us out of just the realm of theory, might this be a good idea, into the practical, the here and now.

We have lots of research already from up in Alaska, where they have a small guaranteed income from the Earned Income Tax Credit. The Cherokee in North Carolina have a guaranteed income and not to mention the international stuff and so, yes, we need more evidence. And we’re hopeful that that will emerge, but the real focus is on the storytelling. And Tubbs himself as a leader has already just, in announcing this in the work that he’s doing, brought so many more people into the conversation both in Stockton and nationwide.

Who gets the money in your … That’s going to be decided, but in general who gets it? The poorest, correct? Or not? Or working families?

In Stockton, it will be decided by Stocktonians.

It’s not me that’s going to get $ 1,000. It’s not wealthy people. Or is there a level or should everybody get it?

In the book, I make the case that the best way to start with a guaranteed income today is $ 500 to everyone who’s making $ 50,000 on down. So, it’s a little bit different than a UBI. It’s inspired by the exact same values of cash, no strings attached, to achieve financial stability, recognize the dignity and freedom of each individual, but it’s a more modest place to begin. I make the case that we can and should do this through a modernization of the Earned Income Tax Credit.

Which goes to what level of people?

Right now, this is part of the problem. It’s so complex, you know, the people who get it, it depends on how old you are, how many kids you have, whether or not you’re married, what state you live in, what your wages were like. And, so what ends up happening is that people get, in many cases, quite a lot of money, between $ 500 and $ 6,000 a year, but because it’s not predictable, you don’t know where it’s coming, when it’s coming, how much you’re going to get. It doesn’t provide the fundamental financial stability, which in my view is …

Which is covering rent or?

That’s the problem that I see this is really trying to solve in the here and now. I mean, we know that jobs in America have already come apart. That is what the effects of automation and globalization in particular have done. All the jobs in the past 10 years that we’ve created, 94 percent of them are part-time, contract, temporary, seasonal. They’re the kinds of things that … Yeah, unemployment is near a record low, but the jobs that are out there are not providing the kind of 40-hours-a-week benefits …

Yes, and it’s going to get worse.

Sick leave, retirement benefits. And it’s very likely to get worse.

And then the elimination of some jobs with some of these technologies you’re talking about, some very … especially around automation, especially on self-driving, we don’t know, nobody knows.

That’s the threat that looms, right? Lots of people have predictions, but in some sense … My argument is, we don’t know exactly where the future is going to go and should have a conversation about where it might lead, but we already know quite a lot about what’s already happening to jobs and we need a guaranteed income to stabilize the lives of Americans who are working hard.

What if you’re someone that’s arguing against it, what is your argument against it?

The arguments I hear most often …

What’s the best one that you’d make if you were against it?

The one that comes up the most often is education, particularly in personal context for me. People say, “Well, you came from a middle-class family, a small town in North Carolina, you got a great education and you did super well for yourself, isn’t that just what we need more of?”

“You drag yourself up,” you drag yourself up from a modest background, right?

That’s the argument that a lot of people make. You know, on the one hand, of course we need better education. There’s no question that education in America, we’ve invested a lot of money in it and have seen some benefits but not enough and there’s an important argument to be made for more education.

But what I think we’ve often overlooked is that … Put yourself in the shoes of somebody who’s got a … Let’s say you’ve got a high school [diploma], you’ve been working in a minimum wage job. You want to go back and get retrained for really any kind of job. Right now, we say, “Well, clearly we just need more educational opportunities.” That person, though …

I’ll use this specific example. I was in Ohio last summer talking to people who were specifically in this position. They were working in minimum wage jobs, they wanted to get all kinds of retraining. You begin the conversation like, “Okay, but why aren’t you doing that?” So, first off, where are you going to go? Community college. The closest community college is 45 minutes away. You got to pay for the gas to get there and the tuition, yeah it costs $ 8,000. Well, you can get financial aid, it’s going to cost you $ 1,000. Mind you, as the backdrop, none of these people have savings. You know, half of Americans can’t find $ 400 in the case of emergency. Just from the beginning, you got to find $ 1,000 to pay for their education.

Now from there, if you’ve got kids, you’ve got to figure out childcare. How are you going to pay for that when you’re at school? And then if you’re working in a job already, you’ve got to make up for the lost hours and lost wages that you’re not going to have when you’re already living on the brink, how are you going to do that?

And then, even assuming you can figure out all of those things, when you show up for your class at 8:00 pm there’s an immense amount of evidence that shows that if you’ve already been working a full-time day, you’re exhausted and the likelihood of you being successful in that is quite low.

So my view is, of course we need more education, but let’s not overlook the power that cash has to open up the opportunities to be able to take advantage of the educational opportunities we create.

What about the current push by the Trump administration of, “These are lazy people and they have to work for their money.”

I think that’s preposterous. Not only does that not …

It’s out there in …

It’s a cynical argument that people make.

Of course it is, it’s awful and it’s cruel. Wow, cruelty from this administration. It’s cruel, it’s flat out cruel.

Yeah, absolutely. And I think it’s premised on perpetrating a myth. Specifically it’s this myth of the Welfare Queen, which was authored by none other than Ronald Reagan but is still permeating.

Lee Atwater did it.

Well, in the Reagan era.

Yeah and let’s give credit to Lee Atwater, who has died but frankly deserved a lot of credit for that.

It’s a myth that has been really problematic and really destructive. It’s racialized in the sense that it conjures up this kind of idea of people who just hang out and live on the … Now, of course, the evidence doesn’t show that. If you look at labor force participation rates for African-American women, for instance, and you compare those to white men, guess which group works more?

African-American women.

African-American women. So the data shows that that is not true, and when you actually get out there and talk to working people, you know, it doesn’t take much to actually see that that’s not true. But it’s a cynical kind of story that it’s in the interest of a lot of people in power to continue to [promote].

But that’s what they’re pushing right now around all kinds of things, is that you have to work to get welfare, you have to demonstrate that you can’t … It is never leaving our society, this concept of the lazy poor.

I am hopeful that we can turn a corner. It’s not going to evaporate tomorrow. I don’t want to overstate the case here but I do think that there is a generational shift that’s happening and specifically if we can broaden the definition of work that we use to really recognize what work is.

It’s sort of similar to what happened with marriage. In the marriage fight for LGBT people, for a very long time there was an argument about legalizing same-sex marriage as if it was like another kind of marriage, this thing that’s over here that’s different. And then when the movement shifted and started making the case that no marriage … What is marriage fundamentally about? It’s fundamentally about love and commitment, and love is love and marriage is marriage and we need to make sure that the definition of marriage matches love and matches the time that we live in. The definition of marriage quite literally has expanded over time to recognize the kind of marriage that my husband and I are in, for instance.

Similarly, with work, when we talk about work all the time, clearly a mom or a dad who’s staying home with young kids who are under … particularly if they’re under 5 or 6 and not in school, they’re working and we use the word “work” to describe what they’re doing. Similarly, people engaged in elder care, if you’ve got an aging parent at home, you’re working. And I make the case in the book that students, people involved in education, those people are working, too.

Of course.

If we can expand the definition of work to recognize what people are doing, what you end up with is recognizing the role that virtually every American is playing in society.

Except the people that are doing most of that work are people of color, women are doing two jobs, raising the kids, and we’ve got an issue of around white men essentially that don’t recognize that this is work.

And, they’ve been historically excluded. Like right now, I was in Jackson, Mississippi, three weeks ago meeting with a lot of young African-American moms who lived in public housing and right now many of them were … in fact, all of them were sufficiently poor that they needed the safety net kinds of benefits. Right now, our safety net says what you’re doing at home taking care of your kids? No, no that doesn’t count. You got to go over to Burger King and get a $ 7-an-hour job — and mind you for every $ 7 that they make they’re docked about $ 4 or $ 5 of government benefits that get reduced, so their actual per-hour earnings become quite small. In order to qualify for a whole host of benefits because that’s real work, but the work that you’re doing at home doesn’t count.

Well, there are those who say you shouldn’t have kids. It goes on, it’s a deeply ingrained racism and everything is …

I think it has to change and I think we have to start somewhere. This is going to be a long-term kind of fight because it does tap into big cultural questions. Again, I don’t want to overstate the speed with which this may happen, but I do think it is similar to something like the fight for marriage equality, which over the course of decades we did see a generational and cultural shift.

For the most part, for many. Although still there’s so much retrograde stuff going on.

Not for everyone, yeah.

You know, Chris, only gay people want to get married and go into the military, I don’t know if you know that. No, I wanted to go in the military, I did, I wanted to do both.

So once you start this in place what do you hope to … What is the goal? Is it to show success, show what … Or just watch how it works?

Well, I think we can start in cities and states and build a sense of momentum.

Everything is happening in the cities and states that matters.

Most things are happening in the cities and states, although I do think that … I can talk a little bit about the opportunity, too, at the federal level. In my view, we should begin today like what Mayor Tubbs is doing in Stockton. You could also do this at a state level, it will be a more modest size, a few hundred dollars a month, but we can begin now and see how it works, see how it changes the lives of people who are getting it. Again, we have a lot of evidence already to know but specifically …

How is it changing, people feel a little more relaxed, they can do …

People certainly feel more relaxed. The recipients of cash assistance specifically through the Earned Income Tax Credit, the kids do better in school. They stay in school for longer periods of time, they do better on tests. Health outcomes improve, people are hospitalized less often, there are fewer complications in pregnancies, people who receive the guaranteed income from the Cherokee as they grow into adults have fewer mental health issues.

There’s a lot of evidence about the effective care. And all this, by the way, is domestic, we don’t even have to go to the couple of hundred studies that exist internationally that show all kinds of other benefits, you know, domestic violence rates go down in many cases and all of it.

It’s intuitive, at the end of the day, if you have a little bit more financial stability in your life you’re able to live one step or two steps back from the brink. We’re not talking about so much money that everybody wins the lottery and we’re like all just, you know, hanging out, putting up our feet, whatever the worst images are that the critics conjure up.

Lazy, eating Cheetos. Cheetos is always involved.

So there’s a lot of evidence. Developing more of a track record at the city level and at the state level and then I do think long-term at the federal level. You know, we just saw a tax bill that got passed at the end of last year, which gave massive cuts …

That was Rich People’s Universal Basic Income.

Giving massive cuts to the 1 percent and to corporations and doubled down on what I consider a debunked theory of trickle-down economics. We’ve been doing this for 40 years and median wages have not meaningfully budged, and yet …

The rich get richer.

The rich get richer and they made a decision to double down on that. Now I think that there is a movement already growing to repeal and replace that law and to rethink it. And I do think that there’s an opportunity to put a modernized Earned Income Tax Credit, which essentially provides a guaranteed income for working people, at the center of that kind of bill.

Now, whether that will happen in 2021 or, I don’t know, 2025, I mean, who knows? So many things can change, but the cynicism that’s permeating our culture about change in Washington and at other levels is the biggest hurdle. We have to begin to think creatively and begin to organize on these ideas.

You know about Sheryl Sandberg’s, I think with the College Track people, giving them cash because they need it for rent. She has a thing where she’s giving away the people who are on College Track. They get money so they can pay the rent, they can do summer internships they couldn’t afford. She’s just giving them money like she …

This is a similar concept, because what happens when they go to college through College Track, poor kids don’t know how to dress, they don’t know how to network, they can’t take summer jobs that are easy. Sometimes their parents rely on them and so the concept is give them cash to pay for those things and give them an extra comfort.

I don’t know that much about it but from what you describe it seems to make a lot of sense. I do think people often ask, again, why is it that cash is so … I was on financial aid in college. Mark Zuckerberg and Dustin Muscovites, they dropped out and I was out here that first summer when they decided to stay here and I went back, and a lot of people say, “Well, do you regret that decision?” Because on paper it was the wrong decision from a financial perspective, and to be honest it wasn’t even ever really a decision for me because …

You had to go back.

Because the idea … I mean, if I were to be here, what am I going to do? Work at Starbucks all day and then come home to work at Facebook marketing? I guess I could have, but I was at Harvard and was the first of my family to have that kind of opportunity and so … Anyway, my point is this, a lot of people in college now have a guaranteed income and it comes from their parents — and my kid one day will have that too, so I’m in that category now — but a lot of other people don’t. We have a responsibility to even the playing field and to counteract how those generational cycles …

That was very important about your own experience there. They could afford to be startup people in a different way.

We’re here with Chris Hughes, he’s one of the founders of Facebook. He is very interested in income inequality with his new book “Fair Shot: Rethinking Inequality and How We Earn.”

The changing workplace, are you worried about … You’ve benefited from technology financially and have been part of the technology sector for part of your life. Are you worried about job loss or things like that because that could stress this system even more?

I am. Alot of people are convinced that artificial intelligence is going to create mass technical unemployment.

Well, it’s combined automation, there’s a whole bunch.

It’s automation, it’s artificial intelligence, exactly.

Economics, self-driving.

Exactly, it’s a combination of multiple trends. There are a lot of economists who think that’s crazy and I talk to a lot of them, too. Jason Forman, who played a prominent role in the Obama administration, has particularly carved out a play saying, “You know, in the long-term this is unlikely to happen.” I’m concerned about it but I also don’t … I’m not in the class where I’m here saying, “It’s going to happen, it’s a fait accompli, it’s a done deal.” It may or may not.

But what I do think the trends are very clear about is the increasing fragmentation of jobs already, and it’s the gig economy that is indicative of that — the Lyft drivers and Uber drivers — but it’s also the worker at Starbucks who can only get 25 hours and who doesn’t know next week if she’ll get 10 or 40.

Or when.

The idea that you need to be able to plan, planning is made very, very difficult.

That’s very important.

You’re constantly stressed if you don’t know you’re going to be able to make rent. Yeah, you have a job, you have some hours, but if you’re not going to get enough then you’re constantly living on …

You’re in a constant state of instability.

I worry about the wholesale job loss, absolutely, but I’m also personally really intent on making clear that wherever you fall on whether or not that’s the future or not the future, we already need a guaranteed income.

I think it’s interesting. Marc Andreessen is a big proponent of this, that in the end it will be like farming to manufacturing and we’ll have more jobs than ever.

The reason I’m so interested in it this past year — we’ve done a special on MSNBC about it, we’re going to do a lot more of them — is because he was saying, I said, “The blacksmiths, what happened to them?” and he goes, “I don’t care what happened to the blacksmiths,” and I was like, “Yeah, but they had families and something happened, something not good happened to those people.” Did they retrain?

There was social unrest during that whole period, there was enormous social unrest with the farming to manufacturing economy, and we forget because we’re a national of perpetually forgetting our history. It’s happened several times, these shifts in technologies, really.

And people make the argument, too, around not just retraining but mobility. Well, yeah, the blacksmiths of today, they should just move to where all the jobs are.

Who’s going to teach them? I just want to know who’s going to retrain …

The average move across job lines cost over $ 5,000 and half of Americans can’t find $ 400 in case their car breaks down, so this idea that you’re just supposed to pack up, turn off the lights and magically move to a place where housing alone is probably five times as expensive as where you were before, it’s crazy.

I think I want to get to the idea of this 1 percent, not just the fragmentation but the wealthiest concentration of wealth moving higher and higher up to a smaller and smaller amount of people. Because I firmly believe there’s a group of people at the top who have benefited from the future. At the very top, the obscenely wealthy love the future, they will be able to change, they will be able to afford it, they will be able to teach themselves, they’re interested in teaching themselves.

Then there’s a vast group of people in the middle who like the future, are scared of the future, and this group on the top is not pulling them up and presumably they would pull the ones below them up further, but there’s no pulling up by the wealthy here. Here’s you saying that the 1 percent should pay this. We’ve just had a tax cut where the 1 percent got paid. What do you imagine this … why the 1 percent doesn’t have this duty to take care?

In San Francisco, it’s the same thing. You can see the streets right now and it’s hard living here with people doing drugs on the streets, you are like, they’re lying on the streets doing drugs in front of my house. This is not good as a taxpayer and you feel badly for feeling that way too, but most people don’t feel badly about thinking about people in that way.

Well, I think a lot of the people that I talk to are cognizant of a sense of responsibility they have to other people. It’s in San Francisco, it’s in New York. I’ll paint with a broad brush and then I’ll be a little more specific about what I mean. I think that there is a sense, particularly amongst people who have been successful in technology, that the rewards that have come are very much historically unique.

I mean, we’ve never lived in a time where 20-year-olds are able to go from zero dollars to hundreds of millions of dollars, billions of dollars, before. Royalty is like the closest thing, hundreds of years ago, and so that is … I do think that there’s a widening sense that something is happening in the economy that makes that possible, and it’s happening at the exact same time that everybody else is having a hard time making ends meet.

That middle group that you’re discussing, those folks have not gotten a raise in 40 years but the cost of living is 30 percent higher. I do think that there’s increasingly a sense of responsibility. Now that’s probably more on the left than on the right, but my hope is to appeal not only to a sense of moral responsibility but also a sense of pragmatism. And by that I mean what we know about what creates long-term economic growth is that consumer spending is the biggest driver of that, and if you put $ 100 in the pockets really of anybody in your description there, anybody in the middle or at the bottom, they’re going to spend most of that money on whatever is most urgent for them: Housing, health care, education.

You put $ 100 in the pockets of the 1 percent, we know it goes into a bank account. It goes to work in complex financial moves but it’s not part of the productive economy. There was a study that the Roosevelt Institute did last year that modeled out, if you give $ 500 for guaranteed income to every American, what would happen to the economy? And the model shows that over the next eight years GDP would grow by 7 percent.

Based on just that amount.

Based just on that amount. And so my argument is that I think in the long run a guaranteed income is good for everyone, certainly for the middle class and the poor who need the funds the most, but it should also be good for …

The producers, the wealthy.

For the wealthy as well because it creates a kind of broad-based economic growth.

Just specifically to talk about the pay for a moment. I think tax rates on income of $ 250,000 and higher should come into line with their historical average of 50 percent. That’s where they were for much of the 20th century, for the decades after the Second World War really up until 1980 ,that’s in line with where they were. And it just so happens that that’s the period when economic growth was not only the biggest but also the most broadly shared and we had plenty of innovation, plenty of smart people starting all kinds of new companies. The idea that if taxes were higher on that income that we wouldn’t have started Facebook, that’s just not true.

It’s nonsense.

And the way that that would play out is because it’s income above, if you’re making $ 300,000, which in some parts of the country definitely makes you wealthy but not, let’s say, a part of the winner-take-all. What you’re talking about is a few more like $ 7,000 more in taxes to fund a guaranteed income. If you made $ 10 million, well, what we’re talking about is your tax bill would be $ 1.5 million higher than it is today, and it is my view that that is more in line with where our finances should be in. We can and should ask the members of that 1 percent to be footing the bill, to make sure that everybody else can enjoy the economic opportunity …

You’re with a group of people in tech who talk about that but I deal with a lot of people from Wall Street and stuff like that and I am always astounded by the continued greed of incredibly wealthy people.

I think it’s short-sighted. I think in the long-term it’s …

I would agree. I was talking to someone who is enormously wealthy, really, they were driving me crazy and I finally said, “You know, you’re so poor all you have is money.” Like, “I don’t know what to say.” He was so insulted. He was like, “Why could you say that to me?” I’m like, I just, “You’re so poor, I just don’t know how to explain it to you. You’re just …” It’s astonishing.

I’m constantly surprised by it when you get to a certain level of income and you can’t understand because you know you don’t want to give it to government, the government is somewhat incompetent. Like, “I don’t want to give it to those bozos to hand out.” I feel like when I pay … I pay a lot of taxes and I’m like, “I don’t want to give it to those crazy military people,” like everybody has a thing.

That’s why the Earned Income Tax Credit is the structure that I’m talking about using to build the guaranteed income. It has historically been really popular on the right as well as the left.

I would like to give it to regular people. Yeah, I’m good with people just getting cash.

Every president in the United States since 1975, Republican and Democrat alike, every single one has meaningfully expanded the Earned Income Tax Credit. And it’s for that reason, not only because of the evidence it shows that it works but because there’s a sense that on the right …

Also, it’s a good gimme, it’s a good gimme.

Well, I think there’s a sense on the right that we should put the money in the hands of the people.

The people’s pockets.

Of people who can figure out how to use it themselves.

That was the argument for the tax cuts.

Well, but in that case it’s for the 1 percent, not for …

Didn’t you hear Paul Ryan, didn’t you hear what he …

Well, talk about a cynical kind of … I mean, every non-partisan analysis of the tax bill shows that there are massive disproportionate returns to the 1 percent, not to …

I like that you’re saying, “Talk about cynical,” at this moment in history.

So, let’s finish up, we only have a few more minutes. Talking about politics right now, you’re in … how do you look at the political scene? Your husband is working on the resistance and Facebook has gotten smacked hard. You don’t have to just talk about Facebook but, please do Twitter, Facebook, Google, YouTube?

Well, I mean, so many things. I think the news coming out of Washington, it’s hard to imagine it being more depressing. However, I do think that Trump’s election has been a wake-up call on the left and the right that a lot of people feel that the system is rigged against them and they are willing to embrace a very, very different perspective. It’s scary when Trump is in the White House pushing the policies that he is pushing, but I think the opportunity is, people are open to kinds of crazier kinds of ideas. Guaranteed income a few years ago was on the fringe. I think it’s increasingly becoming part of the mainstream.

I think, though, that we’ve got to counteract the sense that things are just going to always be the way that they are. The economy is going to always be the way it is, so politics is always going to be the way that it is and there’s a lot of evidence in the enthusiasm on the left. You know, you look at the Women’s March, this march that’s planned in a couple of weeks around gun violence across the country. There are a lot of reasons to be hopeful. As you said at the top of the conversation, votes matter, and what happens this November and then in November of 2020.

The only people that are voting are … thank goodness for African-American women. That’s it. The rest of them, millennials, I want to smack them upside the head.

And specifically Facebook. I think Facebook is increasingly recognizing the responsibility that it has.

Slow progress.

Slowly but increasingly and overdue.

Yeah, sorry about that American democracy problem. But, I mean, it was slow.

It was slow, absolutely.

We were all screaming about it a year ago and they just, they slowed all this all the way to today.

It has been slow. But I think what’s happened …

Why is that? You worked with these people.

Oof. I would speculate about that just as much as you or anyone else. I think that there was a sense that Facebook as a platform was a kind of neutral algorithm. It’s just a thing that works in the basement. It’s like, you just surface things and there’s nobody …

I’m giving you my “Mm-hmm.”

When in reality, I mean, humans make the decision about how these algorithms work and right now we are seeing a different approach from Facebook.

You think they’re taking advantage of that?

With local news in particular, I find that the initiative around local news that I have … I mean, I haven’t talked to anyone at Facebook about this. I’ve read the journalism that you’ve done and many others have done to be some of the most interesting. They’re specifically working with a dozen local news outlets to do two things.

One, to help them understand how to surface their journalism to bigger and broader audiences on the platform but also to adjust the algorithms to make sure more people see it. Which is really remarkable, right? Because it is a normative statement that local news matters and is important and that specifically Facebook has a responsibility to ensure that people see it. Now is that going to be enough? Absolutely not, we’ve got to think about foreign powers meddling in the election.

Why didn’t they see it, weren’t geniuses what … I mean, I’m being reductive there but you know what I mean.

Your guess is as good as mine on that. I think that they’re turning a corner now and are focused on …

An understatement. I literally was just in an argument on Twitter with the head of ads who was like, “Well, it’s not our fault.” I’m like, “Stop, just stop talking.”

What was he saying?

He was saying that it wasn’t truly their fault.

“It” being the Russian stuff.

The Russians. I think I just said, “Hush. Stop talking. Just stop, please.”

Yeah, I think it’s very clear. I mean, you have a responsibility to make sure foreign powers don’t hack our elections. And the problem is, okay, well, how do you define “hack”? But propagating fake news on a platform to support one candidate over another is a problem.

Well, you know, the thing is, to their defense, it’s a company, not a government fighting a government. I know, but it’s a government, right? You made a face.

I mean, it’s a company, but this idea that companies don’t have responsibilities, that’s just not my worldview.

Oh, yes, of course, but I’m saying our government didn’t intervene. Well, you know these companies can’t do it by themselves, this has got to be an effort …

Well, yes, government has … I mean, if I’m talking about the …

Not the Trump government. The Obama administration certainly had a responsibility here to be more active.

Absolutely. And I am worried about the election this fall. We have evidence to show that the Russians in particular, it’s very clear, tried very hard to hack the voting systems in several states, and we have not made … I have seen no progress from a federal perspective in making sure that these elections are going to be safe and secure. There’s been some media coverage of it, but frankly, I think there’s been more media coverage of Facebook’s role than the imperative for a stronger security system. And clearly, we need more coverage of both. I think on all of this, we need to be talking about it all much more robustly, because this problem is not going to go away.

Well, this particular administration is so cynical, it’s a disturbingly cynical administration, which doesn’t mind creating havoc. In the end, it’s a group of people that love havoc and are also not very smart.

Well, but to say that sort of suggests … I mean, we have a responsibility, democracy, whatever your politics, democracy … In the democratic system it’s the responsibility of people in power to govern and defend it.

Of course, but you know, we have a president who just joked that it was good that the Chinese … I mean, you know, like, come on. It’s so funny because it’s sort of like …

Well, let’s just not excuse that, let’s not be …

I’m not excusing it.

No, I’m not saying you are, but we just can’t have this air of resignation like, “Oh, they’re just crazy and nothing is ever going to happen.”

They’re not crazy-crazy, you know. They’re not crazy, it’s just that it’s impossible to do anything when good people don’t stand up. And I’m talking about the Republicans most of the time because it’s the enablers to me who are the real problem now, which is interesting, but this will be done by voting. Chris, when do you imagine you have — we’re going to finish up — when do you imagine success for this?

The more this idea is talked about in the mainstream, not just in political conversations but around dining room tables, over coffee and over …

And how you put out there, of course.

I think that’s success in the short term. In the long run, clearly, we want public policy to change, but success in the next couple of years will be people talking seriously about how can get a guaranteed income done in one way or another? Maybe through the Earned Income Tax Credit, maybe through other kinds of ways, but the more we’re rolling up our sleeves and thinking about, “How do you guarantee financial stability through cash?” That’s the success in the near term.

You have actually convinced me. And now I’m thinking about definitely, you know, some scenario I’m interested in. You know, I agree you, I think giving people … Listen, I’d rather that than the latest tank or the latest whatever the hell our government is spending money on. I’d rather give it to average people who need a break, which would be nice so they can get to one among our many, many, many problems in this country.

Anyway, we have a lot of great things, too, and our generosity, although some people don’t agree with it, would be one of them. Chris, it was great talking to you. You’ve had a fascinating career since you stopped funding like fancy magazines. This is much better than the fancy magazines, and people who hate you no matter what you do just so, yeah.

I’ll say, “Swisher told me to do it.”

I could have told you that Chris, “Just give away money to people who actually appreciate it,” but buying a media company, still. I don’t know which one you should buy, but you should. I appreciate the effort.

I think I’m out of that.

You’re out of that business, no more Chris Hughes. Is there even one for sale? I don’t know, there’s always something for sale, Chris. It was great talking and thanks for coming on the show.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Chain CEO Adam Ludwin answers cryptocurrency questions on Too Embarrassed to Ask

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

“It’s this sort of tug-of-war between FUD and FOMO that drives the [bitcoin] price in the short run.”

On this episode of Too Embarrassed to Ask, Kara Swisher and Lauren Goode tackle the blockchain, ICOs and cryptocurrencies with the help of Chain CEO Adam Ludwin. He explains what all of those terms mean and the differences among blockchain-related products and assets, including bitcoin, ethereum, lytecoin and filecoin.

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

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

Kara Swisher: Hi. I’m Kara Swisher, executive editor of Recode.

Lauren Goode: And I’m Lauren Goode, senior tech editor at The Verge.

KS: And you’re listening to Too Embarrassed to Ask, coming at you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like, “Kara, what are we going to name our cryptocurrency when we start something to finance the future of this show?”

KS: Karacoin. Karacoin.

LG: Oh, I like that.

KS: Yeah.

LG: I like Goode … No, Goodebit? Goodebit might be good.

KS: That’s nice. That’s good, too.

LG: Goodethereum.

KS: No. So send us your questions. Find us on Twitter or tweet them to @Recode or myself or to Lauren with the hashtag #TooEmbarrassed.

LG: We also have an email address. It’s tooembarrassed@recode.net, and a friendly reminder, there are two Rs and two Ss in “embarrassed.”

KS: There’s been a lot of interest in bitcoin and cryptocurrency, so a lot of people have a lot of questions and don’t know about it. They’re very interested in learning a lot more about it. There’s a lot of crazy people involved. There’s a lot of hype. There’s a lot of all kinds of stuff, and so we wanted to bring in someone to get some answers. Today on Too Embarrassed to Ask, we’re delighted to have Adam Ludwin in the studio. He’s the CEO of Chain, of course that’s the name, a private blockchain company. He’s going to explain what that means.

LG: I guess that means Chain is taken. We can’t do, like, Karachain.

KS: No, we’re not going to do that.

LG: We could, but … Yeah, we’re going to be answering all of your questions about blockchain, cryptocurrencies, ICOs that we’ve been hearing a lot about lately. Not quite sure I fully understand. Then, surprisingly, you sent in a lot of questions, so we’re very happy to have Adam here. Adam, welcome to the show.

Adam Ludwin: Thank you. Great to be here.

KS: Let’s just … Explain what Chain does, and then we’ll get into the basics of bitcoin. Nothing is too stupid for us, let’s just keep that in mind. You know what I mean? I think most people are confused by all the variety of things. It’s probably like the beginning of the internet, which sort of sorted itself out. So what does Chain do? And then we have lots of different questions.

Sure. Chain helps financial institutions take advantage of this new technology, basically to do two things. One, to transform their infrastructure. You can think of a blockchain as kind of like a new type of database. It’s helpful even if you’re just tracking existing financial instruments, like securities or loyalty points. But many financial institutions are also looking ahead at connecting into these public networks, like these cryptocurrency networks that you mentioned at the top of the show, which we can talk more about. We also help them to connect into that, and we hope over time bring the assets that they’re dealing with onto these new rails.

KS: Onto the new rails, all right. How did you get started in that? What was the … You were a lot of places. You were at RRE, so you were a venture capitalist, essentially.

That’s right. I was a …

KS: Consultant. All kinds of stuff.

Yeah. All sorts of jobs I actually don’t recommend many people try to do.

KS: Okay. How come blockchain?

I was working as a VC, and I was working at a fintech-oriented VC firm called RRE in New York City. I was working for the former CEO of American Express, Jim Robinson. Because of that, even though my job was kind of to do the non-fintech stuff, friends would always send me fintech ideas. I had a friend send me the bitcoin white paper in 2011 and basically say, “What do you think of this startup?” Of course, I quickly learned bitcoin wasn’t a startup, but I was completely captivated by what I was reading.

KS: Why?

Simply because all the fintech that I was looking at and investing in at RRE companies like Venmo and Square and Stripe, these were companies that were sitting at the top of the existing financial stack, the stack being governments …

KS: Underneath, right.

… central banks, regular commercial banks …

KS: Compliance.

… credit card networks, all the compliances. This big fat stack that equals financial services, and fintech … including today, when you think fintech, you’re really talking about these thin layers of user interface …

KS: Or apps, yeah.

… and apps that make it easier to use. Bitcoin was like a huge red reset button that said, “That stack isn’t relevant anymore. We already have the internet. What’s the least we can add to the internet to get back to money?” The answer was a few thousand lines of code, basically. That was conceptually very exciting.

It also struck me that it would take a very long time, if this thing ever became a meaningful part of the economy and the way financial services would work, it would take a very long time to get there. Nonetheless, I started meeting entrepreneurs, meeting startups that were trying to do something with bitcoin. It led me down the rabbit hole. Eventually, I decided I needed to spend all my time on this. RRE very graciously gave me a little bit of seed capital to get me started and that’s when Chain got off the ground.

KS: And you focused on financial firms because it was the lowest-hanging fruit, presumably?

Yeah, our original business plan was, “Let’s make it easy to build with blockchain technology.” We started with developers. We kind of then graduated into larger enterprises. Even to this day, the entire crypto and blockchain space I think is still characterized best as a frontier technology. It’s sort of like VR and AI and robots and drones. There’s definitely some clear value that people have identified, but generally, it’s still largely exploratory. That’s what’s exciting about it, but can also be frustrating if you’re an entrepreneur in this space. It’s nothing like building an iPhone app, for example.

KS: Right, right, and it’s … Go ahead, Lauren.

LG: That was actually going to be my next question. I want to get to bitcoin more, but one question I’ve been too embarrassed to ask is, when you start to consult with companies and tell them, “Here’s your blockchain strategy and here’s what you need,” does that actually translate into them hiring a bunch of people who are expert or knowledgeable in this area, and then they sit in cubes all day and they maintain their database for this company? How does that actually work?

The question we often get in the very first meeting with a traditional financial company is, “Hey, we’d love to do something with blockchain. Can you help us?” Then I’ll usually say, “Well, what’s your problem exactly that you’re trying to solve?” There’s often not a good answer to that very simple follow-up question because, like so many other buzzwords, large institutions, executives, they hear about a buzzword and they say, “Well, we’ve got to do something in this area.”

At the same time, there are meaningful use cases and opportunities that we’ve found and are pursuing, but a lot of the activity is just that: Activity without really substantial impact.

KS: Right. So what is blockchain, really? What is it? Explain. Do it as if you had to do the simple elevator pitch.

Sure. I’m going to answer the question.

KS: Very good.

I’m going to answer the question, but then I’m going to answer a slightly different one, which is, “What is cryptocurrency?” if that’s okay.

KS: Right, yes, that’s true.

Because they’re related.

KS: I just was at an event where someone said, “Blockchain is gold, but not as dumb.”

Interesting. I’ll build on that.

KS: Okay. Well, I think it’s true.

To me, blockchain is two very different things. On the one hand, as a very simple technical answer, it’s just a new type of data structure. It’s a different type of database.

KS: Stores values.

Just a way to store data, actually.

KS: Data, right. Okay.

That’s one extreme and that’s true. At the other extreme, in a much more conceptual sense it is a new internet counterculture. It’s both of those things. Collectively, all the activity you see around the blockchain space is a sort of decentralized movement to sort of challenge the status quo in both Silicon Valley, the sort of FANG stocks, as well as Wall Street. Yet, it’s just a new type of database. So I think neither of those answers actually are very instructive.

KS: Well, it’s a database that doesn’t need gatekeepers.

When implemented in a decentralized fashion like cryptocurrency, it’s exactly that: A database that’s updated without a central authority making those updates.

LG: Does it have to be digital? Can it exist in an analog form or … Actually, Adrian Jeffries from The Verge just wrote a really good piece about blockchain that I encourage everyone to go read, but that was one of the things that was brought up. Does it have to be digital?

That’s interesting. If your listeners Google “bitcoin mining by hand” or on paper, there was someone who actually mined a bitcoin block, did all the mathematical hashing functions with pencil and paper, so maybe there is something to that.

Let me define cryptocurrency because I think that is the central question I think people are still trying to wrap their minds around. What is bitcoin? What is Ethereum? What is filecoin? What are all these ICOs?

I think the best way to understand cryptocurrency is that it’s a new asset class. Like every other asset class, it doesn’t exist for its own self. It’s serving some other form of organization. You think of equities as an asset class, they support companies. You think of bonds, government bonds, they support government borrowing. You think of real estate supporting property owners.

So cryptocurrencies are no different. They’re enabling some higher form of organization, and what that is is called basically decentralized software or decentralized applications. So cryptocurrencies enable decentralized applications. That’s sort of it. Decentralized applications are a new idea and bitcoin was the first decentralized application. It was a decentralized application for payments. It was a way to, say, look at something like PayPal and replace the company with a protocol in a network. It’s for payments.

KS: Right, and give it value.

That’s right. Ethereum, it’s a little bit more meta because it’s a decentralized application for creating decentralized applications, so you sort of have to think of Ethereum like a tree. And if you really want to get at what it’s for you’ve got to look at the fruit and sort of ask, okay, well, do I think this decentralized application, whether it’s a voting system or a prediction market, is useful and interesting.

There’s another one called filecoin, another cryptocurrency where it’s a decentralized application for file storage. So similar to bitcoin looking at PayPal and saying let’s decentralize this, filecoin looks at something like Dropbox or a cloud storage service and asks the question, “Do we really need a centralized application and a company around that application to manage file storage when we have the internet and these protocols in an economic token that we can use to incent people to organize in this new way?”

Cryptocurrencies are really about enabling this new software model, and I think the open question for everyone is in which circumstances are these decentralized software models — which, by the way, are a lot less efficient, a lot harder to use.

KS: Take a lot more energy.

Take a lot more energy. There’s a lot of downsides to them.

KS: Slower.

Slower. So in what situations are they better and on what dimensions are they really differentiated from a centralized product?

KS: What exists. The centralized product, like, you could get it. You could transfer money in seconds and these take what, minutes?

It’s just hard to argue that for everyone bitcoin is better than Visa or filecoin is better than Dropbox or Ethereum is better than Amazon Web Services. What I’ve identified as one attribute that cuts across all decentralized services that centralized services just don’t have, don’t even aspire to have, is censorship resistance. Basically this ability for me to send anyone in the world bitcoin and really nobody can stop the two parties.

KS: Right. Which is why criminals and the porn people love it. At the same time, other people that don’t like all the gatekeepers love it too. Explain Ripple, then, because they’re saying Ripple could be the next bitcoin. Explain what it is and …

Sure. There are two technologies that are called Ripple and Stellar, similar models actually founded by the same person. Ripple and Stellar have a different model than bitcoin. The primary, the best way I could explain this is if you go look at the bitcoin network — and you can do this. There’s a website called Blockchain.info and you can just sit there and watch bitcoin transactions streaming through.

What you’ll see is it’s just different people, you won’t know who they are. It will be anonymous. You’ll see this person sent two bitcoins to this person. You can just watch the network. It’s pretty cool. If you look at the Ripple ledger or the Stellar ledger, again, these are global public ledgers, if you look at those you won’t see primarily the Ripple asset, which is called XRP, or the Stellar asset, which is called Lumen. What you will see instead are all sorts of other assets that are riding on top of those ledgers.

So the core idea in a technology like Ripple is to allow you to anchor in or tether in other assets, but use it as a open rail. I think I get excited about that sort of technology because it starts to now allow us to think about moving assets that are meaningful to us — dollars, loyalty points, securities, bonds — but benefit from very low cost, very transparent, very efficient movement.

KS: Movement. Mm-hmm.

LG: I want to make sure I follow you here because I’m actually on Blockchain.info right now and I see some of the transactions you’re talking about. It’s all BTC, it’s all bitcoin. The other things you’re describing, you’re saying that those are more open? Like Ripple is the equivalent of bitcoin in the sense that it’s a cryptocurrency, but it’s also providing the rails that others can trade on?


LG: Yeah, I think we’re going to have to break this down a little more.

Yeah, so I’ll explain a little bit more. So let’s start with bitcoin and then we’ll come back to Ripple. Part of what’s so difficult in terms of understanding bitcoin is that bitcoin actually serves three purposes on the bitcoin network. There’s a whole bunch getting conflated. It’s very elegant, but it’s helpful to unpack it.

So what are those three purposes? The first is that it provides the economic incentive or reward for the so-called miners which are processing the transactions to do that processing work. They don’t do it out of the goodness of their heart.

KS: They get a piece of it.

They’re getting paid, and so they’re getting paid in bitcoin. That’s its first use.

KS: It goes up in value.

That’s right. Its second use is as the fees that you pay to send a bitcoin transaction. So it actually costs a little bit of bitcoin to send bitcoin. It’s the fee or like the postage stamp that you would put on the envelope. The third thing is it’s the thing you’re sending on the network, right?

KS: Mm-hmm.

It’s like the store value that you’re sending and then you can translate to whatever your local value is, so it’s all three of those in one. In other blockchain models, those three get separated out, and Ripple is a good example. In the case of Ripple or Stellar, their respective tokens are only one of those three things, really. It’s the fee. To send a transaction on Stellar or on Ripple, you have to use their respective token as the postage stamp.

But what’s in the envelope isn’t also that — it can be, but usually it’s not. What it’s designed for is to put any arbitrary asset in that envelope and therefore benefit from the same …

KS: And transfer it.

… transfer model as bitcoin, but allow you to send other things.

KS: Right, not just bitcoin.

Not just bitcoin. I think that’s really important, because I think until we see a convergence of these open rails with assets that actually touch businesses and consumers …

KS: Meaning you’ve got to be able to spend it on something.

That’s right.

KS: So you don’t buy something in bitcoin. You don’t buy anything and … You’ve got to be able to trade in bitcoin for a horse or whatever the heck you want to buy.

That’s right. Bitcoin is not a particularly good medium of exchange. It’s very volatile, which isn’t its fault. It’s just the reality of the way the market works, but therefore it’s not desirable for merchants.

KS: No, why would you take it or give it?

That’s right, who want dollars to pay their bills that are due in dollars. Yes, you can exchange it, but with the volatility being where it is and the fees for exchanging, it all kind of washes out where it’s not that superior to just taking a traditional method of payment. But as soon as we can have the benefits of a bitcoin-like network with any type of asset, now I think you’re going to start to see innovation that will actually touch people beyond …

KS: To people actually use it. People actually …

That’s right, people actually using it.

KS: Why the volatility in price? What are people buying, precisely?

So all the price movement in cryptocurrencies is demand-driven. What I mean by that is when you say, “Well, why is the price of a barrel of oil X or Y?” The supply side …

KS: Well, people are hoarding it.

… and the demand side.

KS: That’s what’s happening, right? They’re grabbing it and holding it. Holder or whatever.


KS: Whatever.

Yeah, H-O-D-L.

KS: I don’t care for their stupid acronyms, but go ahead.

That’s because you’re not part of the counterculture.

KS: Oh, but they’re ridiculous. They’re so …

They want you to say that, though. That’s the thing.

KS: No, they don’t.

They do. They do.

KS: Whatever. What are they, 12?

LG: Wait, I have a question for you.

Many of them are 12. It’s very possible the inventor of bitcoin was only 12 or 13 at the time.

KS: All right, whatever.

LG: All right, the quick question I have about HODL is does it actually … I’ve heard two different explanations for it. It might be both. Does it stand for “hold on for dear life” or is it supposed to indicate that when you type really quickly that you might key in the wrong letter?

It’s the latter, so hold on for dear life was …

LG: It’s the latter? Okay.

… that was quite brilliant because when the thing was going down everyone is saying … But it was originally some kid, probably 12, in an internet forum during an early panic years ago saying, “Hodl,” just a typo, and he became famous. Or she.

KS: You know I have bitcoin. Do you know that?

I’m sorry?

KS: I have bitcoin.

You do.

KS: I bought it when I wrote a story about it in 2013. I don’t know where I put it.

That’s the problem.

KS: Right, that is. I know where I put my gold bars.

It’s like a Jerry Seinfeld, anyone can take a reservation, it’s the holding part. Yes, there’s the HODLers, but I think there’s something beyond that, which is because the supply of cryptocurrency is fixed, so there will only ever be 21 million bitcoins ever minted, it’s actually a very simple way to think about price. It’s all demand-driven. More people want it, the price goes up. Fewer people … So what drives people to want bitcoin and what drives people away from it?

KS: They’re scared of Armageddon, for some reason.

Yes, I think the HODLers are sort of long-term opportunistic, thinking about a better future, a future that they believe in. But I think in the short term it’s actually two different types of fear. There is the fear of missing out, which is … right?

KS: Yeah, of course.

Which is like every cocktail party you go to you hear about a cryptocurrency. You ignore it. Then the next year you’re like, “Oh man, if I had just invested when I heard it at that cocktail party I’d be on 100X return.” So that FOMO, which was really pronounced last year.

Then there’s a different type of fear, which is FUD, or the fear, uncertainty and doubt that this thing is all a giant Ponzi or there’s going to be regulatory or …

KS: Tulips.

… tulips, so it’s actually, it’s this sort of tug-of-war between FUD and FOMO that drives the price in the short run.

KS: There’s also the very real feeling that this world, everything is … I just interviewed Chamath Palihapitiya that everything is co-related, money, everything. It’s affected. This doesn’t get affected, and it’s an asset that you have. Like gold bars, that’s the first thing, gold but not as dumb.

It is.

KS: You’ve got to move gold around. It’s heavy. You need a guard.

It’s uncorrelated, for sure. It’s uncorrelated. I think gold — you brought it up earlier, too — gold’s a great example. Because when somebody asks me, “What’s the right price for bitcoin?” I just ask, “Well, what’s the right price for gold?” Unlike a company where you can do what’s called like a discounted cashflow analysis, look at the potential profit streams and do some math on it and get to a reasonable number for what a company should be worth or building what it should be worth based on rents, gold and bitcoin, they’re not really like that.

KS: No, they’re a hoarding mechanisms. That’s what, it’s a hoarding mechanism of value. Unless you want to wear it.

I think the original bitcoin paper was much more focused on bitcoin being a means of exchange. In reality, what’s happened is it’s become more of a digital gold idea and a lot of …

LG: That people are holding.

That’s not a criticism. A lot of startups start doing one thing, become something else, so …

KS: All right, we’re going to answer a couple more questions very quickly, very fast, because we want to get to the questions. We have so many. ICO, explain what an ICO is, just very quick because …

So it stands for initial coin offering.

KS: Got it.

It’s the idea that a team that wants to create a new cryptocurrency or a new token …

KS: Karacoin.

… like Karacoin, which I think you should do. You have a lot of followers HODLing Karacoin. The idea of an ICO is you’ll sell some of the coins in advance as a way to raise money to then build this project and bring it to market. It’s sort of a funding mechanism that combines a Kickstarter-like mentality with the token itself. It’s come under a lot of scrutiny recently as well from the FCC and …

KS: Ponzi scheme.

LG: How does it turn into actual functioning currency?

So the promise of an ICO is that you give us some money now, we’ll invest that in building the technology, and then when the network turns on your stake will be available on that network. That’s, by the way, exactly how Ethereum came about. So Ethereum …

KS: It’s exactly how stocks work. It’s how anything of value works, right?

Is it how stocks work, is that what you …

KS: Well, it’s equity.

Yeah, that’s true. If you think about a startup, exactly right, a private company, but I think Ethereum, bitcoin didn’t do this. It didn’t, conceptually the first one couldn’t have, but Ethereum did and because Ethereum itself can facilitate, by nature of it being a platform, further tokens to be created on top of it, you saw between 2016 and ’17 a lot of these tokens being created and minted on top of Ethereum. And I’ll say more if you want, but …

KS: No, I think we’ll go …

LG: These are not backed by traditional exchanges, so it’s not like you’re raising, it’s not on the Nasdaq or anything like that.


LG: You’re just saying I want to raise $ 150 million or whatever it is in exchange for when I get my cryptocurrency launched I will give you some of that coin.

That’s right, and then when they do launch, and sometimes even before, they’re listed on cryptocurrency exchanges like Kraken, Poloniex, etc.

KS: I see. Can you build entire societies on cryptocurrency and blockchain technology? We used to trade wheat for horses, we moved around, and assets were worth what they were worth. Not a very organized system, and that’s why we have currency.

Right. I will say there are people in the blockchain community who do see this as a foundational platform for a whole new way to think about society and civilization. As a startup entrepreneur just trying to make money and build a business and hire people, I don’t have a lot of time to be a philosopher, but there are definitely the philosophers in the community who talk about a future where everything is decentralized and enforced on networks, etc.

KS: They thought that about the internet, didn’t they? How old are you? You weren’t around for that.

I’m 36.

KS: No, you weren’t around. They were like that. Same thing, they were going to build communities that the gatekeepers were not going to be able to control.

We’re in the counterculture phase of the emergence of this technology.

KS: Right. The Whole Earth … That whole gang.

Yeah. By the way, this is what attracted me and I think a lot of people. I was in middle school and high school during the ’90s and felt kind of in the atmosphere the change the world …

KS: Oh no, that’s when the money grubbers got there. Before that it was …

Well, my dad was running a BBS out of our house …

KS: Oh yes, of course.

… in the early ’90s, so just before it got a little bit kooky.

KS: Yeah, ’94. The Netscape IPO. That’s the end.

’92, ’93, ’94. And I just loved it. I used to go to 2600 Meetups. I got my drivers license, the first thing I did is I drove to the train station in LA, went to 2600 Meetups, so I loved that era of the internet. I think I was very attracted to bitcoin because it felt like that again. So yeah, I think we’re in that phase again. It’s fun. But again, I don’t know or have a strong point of view on whether that will radically change society.

KS: There will be a Google of this. There will be a Google. There will be a …

Yeah, but they’ll just look so fundamentally different from what Google and Amazon look like that I think people will probably continue to be wrong about what is the next Amazon or Google.

KS: Right. No, 100 percent.

So we have tons and tons of questions. Lauren, I’m going to get to those because we have so many. I love all these questions. We’re here with Chain CEO Adam Ludwin talking about blockchain, ICOs and cryptocurrencies — that’s initial coin offerings and cryptocurrencies — and we’re now going to answer some questions from our readers and listeners. Lauren, will you read the first question?

LG: Sure. The first question is an email from Maryam Mujica, I hope I’m saying that correctly. The email says, “I’m definitely embarrassed to be asking this since I work in tech, but in a non-technical role so cut me some slack. Can you explain in layman’s terms how bitcoins actually work and how if at all they can be used to buy anything?”

KS: All right. Adam?

They can be used to buy things. When I’m demoing bitcoin I usually go to the Wikipedia website and go to donate and then click donate with bitcoin and then scan the donation QR code with my bitcoin wallet, like a Coinbase wallet. That’s usually a pretty good example and experience. If you’ve never used bitcoin to buy anything, I think donating to Wikipedia is a good way to try it out.

KS: You don’t give a full bitcoin to them, do you?

Not a full bitcoin. This is the other thing to know about bitcoin, you don’t have to deal in whole units. Each bitcoin is divisible 100 million times, so you can send up to a one hundred millionth of a bitcoin, which happens to … That cent is called a Satoshi, which is the pseudonym of the founder or founders.

KS: Every five, seven days I get an email from someone who says they’re Satoshi.

Do you really?

KS: One of them will be.

People are claiming to you that they’re Satoshi?

KS: One of them is. I know one of them is Satoshi.


LG: I think Kara is actually Satoshi.

KS: I am Satoshi. I am. I do, I get them all the time. So you can buy … presumably that’s the goal, eventually, is a currency. You want to buy something with it.

Yeah. I don’t know if bitcoin has missed its window to become that. I think it’s very possible it has.

KS: What would be the coin? Amazon coin.

I don’t know that it’s Amazon coin. I think bitcoin as a settlement instrument, as a digital goal, that’s become pretty clear, but I think mediums of exchange that are existing mediums of exchange like central bank money or merchant-issued money is probably …

KS: Yeah, so credit cards and cash seem to work pretty well right now.

Yup, yup.

KS: I think cash …

LG: I would love to be a fly on the wall, by the way, in a meeting room when Amazon meets with the government after it develops its decentralized cryptocurrency and starts having people buy things with it. That would be very fun.

Yeah. Well, Amazon Prime Reload, which is a prepaid cash program, is basically Amazon’s virtual currency.

KS: Yeah, it’s true. But there’s currency involved. I think all, I think currency currency, paper currency, is insane. It’s dumber than gold.

Paper currency is dumb because … I have some paper currency here and I’m just going to take it out.

KS: I never use it anymore.

I take Casual Carpool in the morning so I always have dollars, but the problem with paper, the problem with currency in general is it’s no longer free to use it. So the promise that the government’s going to give you a currency that’s free to transact in society, that’s a broken promise. It actually costs money to use money, not just in terms of bank fees …

KS: You move it around.

Just basic things like yeah, every single transaction costs the counterparts collectively 2 or 3 percent in fees. So we don’t have free money anymore. I think …

KS: It never was free money. It always cost something.

Maybe that’s true.

KS: It always cost something.

Yeah, yeah.

KS: You’re just not adding it up. You’re just not adding, just moving stuff around. You know, drug dealers like it.

Anyway, next is the email from Frank Reid. They like bitcoin better, I’m guessing. “As I understand it, there is no central depository or control of bitcoin other than trying to hide money.” That’s not true. “Why would someone want to invest in it? It seems like it’s the latest pyramid scheme. These pop up from time to time.” All right, that’s the tulip thing, or whatever, the porn center.

It empirically has been the best-performing asset class since the financial crisis, by a long way. People have been saying it’s a Ponzi scheme or the tulip thing …

KS: People believe it.

… and every few years it does have a big crash and correction.

KS: It just did.

It is right now, but it usually crashes to 90 percent higher than the previous low, so I think a Ponzi scheme is, the way I think about the Ponzi scheme …

KS: Pyramid, they said.

Or a pyramid scheme is like some entity that is intending to scam people by showing false returns that are based on new money coming in.

KS: Yeah, that’s true.

It’s not that. It’s not a fraud. It’s an open source technology you can audit and see for yourself. Whether it’s a market mania is a different thing.

KS: Right. Is it worth what it’s worth because it’s worth it?

But again, I come back to …

KS: Where are those dumb sneakers, Frank? I bet you have a pair of dumb sneakers that are not worth $ 1,000.

It’s also like the art market, like gold. There’s actually no empirical answer to what is the right price. It’s just too early. Most nascent technologies, they don’t get noticed in the first few years, nor do they have a massive capital market’s phenomenon around them. This one does because the thing itself is money.

KS: Right, but it has to convert to something. I think that’s the point, it does, but by the way, Frank, it’s not a central depository because it’s decentralized by its very design.

Right, there’s no central depository.

KS: All right, next one. Lauren.

LG: Next one is from Ravish Kumar. “Is the bubble burst and can anyone just spin up their own cryptocurrency?” That’s a good question. “I heard that many companies are working on their own, though I don’t know how true that is. #TooEmbarrassed.”

So the huge market mania in 2007 was — depending on how you count — probably the fourth or fifth big, excuse me, big bull market in bitcoin’s history. Those are usually followed by the market cooling off for a period. Anyone can … What’s the name of the …

KS: Karacoin.

LG: Karacoin.


KS: It’s going to be. It’s coming soon to a pyramid scheme near you.

Karacoin. We could create Karacoin by the end of this interview by taking the bitcoin source code off of GitHub, forking it, renaming it Karacoin, and maybe changing one or two parameters and giving it to the world. Whether Karacoin would have value …

KS: But someone would have to buy it. What price would I put on it?

It would be worth whatever the market says it’s worth. It would just be a demand …

KS: It has to start off at some price.

Well, the first buyer is going to come along and maybe you can set the price. If you’re the only one that has it at the beginning, but typically what would happen if it’s mined would be that people would run mining software and start generating them and they wouldn’t be buying it. They’d actually be converting energy into your coin. Then they would take those two in exchange.

KS: But how do I stop it from more coins being created, because that’s inflation, right?

You would. The way bitcoin works is the number of coins that will ever be created is hard-coded into the software.

KS: So I could make a number.

LG: Oh, so you can decide.

You can pick a number. Yeah.

LG: What are the parameters? When you said that you would take the source code but you’d change a couple parameters, what does that mean?

For example, you could say instead of 21 million Karacoins there’s going to be 100 billion Karacoins. You could say instead of the block time — meaning the amount of time between new blocks being added to the network, instead of that being 10 minutes, we want to make it five minutes.

KS: They can make more.

I’m basically implicitly referring to what actually has happened. So litecoin, if you’ve ever heard of litecoin, effectively took the bitcoin code base, tweaked not probably five lines of code — Charlie, if you’re out there, feel free to tweet at me and correct me — but very small amount of tweaks, renamed it litecoin and created it. It’s one of the interesting kind of emergent behaviors in this space, that you have this rich ecosystem of competing projects vying for attention and the ones that will survive …

KS: There’s going to be one Karacoin and people are just going to trade it back and …

Well, that’s kind of like the Wu Tang Clan album where there’s just the one.

KS: Just the one.

Like that. I think there’s something to that.

KS: It moves from person to person. They pay more and more for it. You see what I’m saying? It’s genius.

I like how you’ve been watching our Recode …

KS: Yeah, that’s true.

Why don’t you do a crypto-conference?

KS: We may launch a currency at Recode. You’re going to launch a currency.

You know what you should call it? Recoin.

KS: Recoin. Oh, you know what? Right now. You’re coming to Code. You are going to start a currency, you and me.


KS: Recoin. Okay, got it.


KS: Together.

I’m with you.

KS: We’re the founders. You’re Satoshi and I’m Satoshi II or something. We’ll have a name like that.

All right. “So what’s the deal with Coinbase?” Yeah, what is that? I think I have an account there. I don’t know how that happened.

Yeah, so Coinbase is a application that will store your bitcoins for you and will …

KS: And protect them from the people who want to kill you to get them.

Yeah, so one of the challenges around bitcoin is very much like paper currency, you’ve got — or gold — you’ve got to figure out a way to hold it securely. So you can hold bitcoin yourself with what are called private keys and you’ve got to keep those private keys in a secure software environment. If you’ve ever lost a password or forgotten a password, it’s about five times harder than managing passwords.

So most people have decided they don’t want to manage their own bitcoin. They want to use a service like Coinbase, which is centralized, and allow that centralized application to do it for them, make it easier to both manage and also to buy and sell. So that’s Coinbase.

KS: And presumably protect you.

They’re the most successful company in the space.

KS: The issues are some people break up their passwords. Sometimes they give it to someone else. They put it in … They don’t want to put in a safety deposit box because someone could take their kid and say, “Go get it from the safety deposit box.” People have a lot of it.

That’s right.

KS: They don’t like to talk about it. Although, these people have gold, too. I don’t know why they’re not nervous about holding the gold where it is. Anything can be taken, essentially. Some people split up everything.

That’s right.

KS: Does Coinbase stop that or is there …

Have they stopped …

KS: Because the bank, it’s really hard to take your money out of the bank.

Yeah, yeah, yeah.

KS: Because people are on to that.

Yeah, Coinbase, they have this thing called Vault, which for example has certain limits. Like you can’t take all your money out of the Vault at once. There are additional policies and there are good solutions for folks that are trying to manage a lot of the currency.

KS: That’s the business, protecting it.

Yeah, custody is a big … Cryptocurrency custody is one of the business models that works in this space. Exchange is another good business model. Being your own Satoshi, if it works, is a good business model.

KS: Meaning?

Meaning having a coin that has a large market cap.

KS: Right, right, but at the same time people are worried about holding. Just so you’re aware, if you hold it, don’t tell people you hold it. Don’t. There’s going to be people kidnapping people, things like that, just like they would with gold or a pile of cash. But in the case of gold — or not gold, but a pile of cash — if you start taking it out of the bank, the bank alerts authorities. There’s a good reason for gatekeepers in some cases.

That’s right, yeah. That’s why I have zero crypto.

KS: Right. Oh, interesting. You’re just selling the picks and shovels, aren’t you?

No, I’m joking, but …

KS: Oh, you have zero. You just lied to me.

Yes, yes.

KS: Okay. All right. That means you have 10 billion cryptos. All right.

“How are ICOs and IPOs different? Why can’t ICOs be launched through stock exchanges?”

Fundamentally, an IPO is an initial offering of shares. Shares are the ownership model for companies. ICOs are an initial offering of coins or tokens, and coins are the enable economic model for decentralized software. So just very different ideas there. What unites them — and I think what has drawn the interest of, say, the SEC — is that even though they’re fundamentally different things that they’re supporting and different mechanisms, they both are fundraising mechanisms.

So can you imagine a Nasdaq or a New York Stock Exchange facilitating ICOs? Sure. It would be a totally new business for them, but you could.

KS: You could. All right. Long question. Lauren, why don’t you read the whole thing, try to do it quickly.

LG: Yeah, let’s actually Bradley Kalgovas, thank you for sending in your questions. I’m going to ask the last one in your bunch because I think this is the most interesting and we’ve answered a couple of the others. “Is the price of bitcoin fundamentally linked to the cost of electricity to mine bitcoin? So example, as time goes on, there could be more processing power and more electricity required to power the processor to mine bitcoins so the cost to extract could go up over time.”

The price of bitcoin is not really tied to the cost of electricity, but the profitability of mining is tied to the cost of electricity, meaning the price of bitcoin is X, the amount you have to spend on electricity to get said bitcoin is Y. If you’re in a country with a expensive electricity it’s going to be unprofitable for you to mine. That’s because of the sort of perfect competitive nature of the bitcoin network. That’s why you see most of the mining in low-energy-cost countries like China, potentially even where governments may be even subsidizing.

KS: You make what, 12, what was the … You get point something.

Twelve point five bitcoin. It’s either 25 or 12.5 right now.

KS: But then at some point there won’t be any more.

That’s right. That’s probably another too embarrassed to ask question, which is if …

KS: No more miners.

As I was saying, there’s only 21 million and they’re still being mined, what happens when they’re all mined? By the way, you need miners to keep the network decentralized and operating, so what’s going to happen? The answer is, in addition to what’s called the block reward, which is this newly minted bitcoin that is generating, given to the miner for investing the energy in the network, miners also are the ones who received the fees …

KS: From moving it around.

… that I referred to earlier, from moving around, so they actually get both fees and block reward. So the theory at least is that once the block rewards are all gone, the miners will still have an incentive because of the fees.

KS: Right, so they’ll become bankers. That’s all. They’re bankers, right? They’re the little green guys.

I guess so.

KS: That’s what they are. All right, so let’s do from the Canadian. Which one’s from the Canadian? Here we go. Shami Humphries, which is, “I bought bitcoin from Coinbase not realizing I could add or buy more of it, but not transfer or sell because I’m Canadian. After many attempts …” What, are Canadians barred? Isn’t tariffs enough? “After many attempts to talk to them the only response I got was sorry, not at this time in Canada or Australia. We’re working on it. Do you have any idea” — HODLer — “what might change or how I can extricate myself from this?”

This is funny because Coinbase is like the fail whale of our era.

KS: I know, they’re like Trump.

They’re so successful and they’re doing great stuff and I’m a big fan.

KS: Yeah, I know. I met the CEO yesterday.

But … Brian? Okay, great.

KS: Yeah.

But their customer support has been this perennial challenge.

KS: Fail whale.

And it’s funny that people are so desperate they’re writing in to the Recode podcast to ask the CEO of an unrelated company if he might be able to put in a good word or help out with their customer problems.

KS: Do you know what? We have some dues here.

LG: Hey, that’s not desperate. I was just going to say. We get things done here.

KS: I do things all the time with no idea.

Maybe we can just say if Brian is listening, help out, who is it?

LG: Shami Humphries.

KS: Shami Humphries. All right, next one. So too bad, Shami. You’re going to have to wait until Coinbase or someone else gets to it, essentially. But they’ll get to it eventually.

LG: But we still think they’re nice.

KS: They need to be global. Coinbase has to be global for goodness’ sake, right? Come on.

Yeah, absolutely.

KS: Come on, Coinbase. What the hell.

Bitcoin’s global.

KS: Yeah, that’s right. Next one. Let’s get through these. We’ve got a couple more. We’ve got a lot more.

LG: Next one is from Dorian Benkoil who asks an inside-baseball question for us. “What applications are most likely to take hold in the mediasphere? There has, for example, been talk of both authentication tokens for identifying authors or subscribers and then using blockchain technologies to help with fraud.” So yeah, are we going to be running our new sites on blockchain?

KS: Recoin.

Recoin. I’m looking at this Recode sticker and I could just see it perfectly there. So media, all right, I don’t know much about media. You’re an expert, so I’m sorry to even broach this topic with any sense of an idea here, but there’s this thing called the AD Model.

KS: Mm-hmm. We know it.

I lot of people don’t like the AD Model.

KS: We don’t.

A lot of thinkers in the space, the intersection of cryptocurrency and media are asking is there a way to bridge these worlds so that we can create a new economic model to incent the creation of content, the conception of content, the curation of content? What might that look like?

I won’t say any more than that, other than there are a lot of people thinking about that, exploring that space. I’m hopeful something emerges.

KS: But it’s been done, payments, little tip jars and …

Yeah, the first thought is always the micro-payments, tip jar kind of thing, but I think we know that doesn’t work and I don’t think crypto solves that. I think there are more fundamental questions about can you curate and create content with new incentives? There’s a project called Steam It. It’s Steam, it’s another … It’s like a cryptocurrency Reddit.

The problem is they went too far and the whole thing is just people gaming it to make money off of content and so it’s actually a bad experience for the user when they’re reading the website. But the more experiments in this space, I think, the better. It would be exciting to replace the AD Model on …

KS: It would be. All right, next one, Haps: “I understand blockchains, it’s secure as long as no single entity controls more than half the processing power. If that’s the case, what do I do to combat potential fraud?”

So the listener is referring to something called the 51 percent attack, which I will allow others to Google if they’re interested, but basically yes, it means that a blockchain network, specifically in this case I think bitcoin, is susceptible to being … “taken over” is too strong of a word, but it loses some of its censorship-resistant properties if more than 51 percent of the network is controlled by either one or a set of colluding entities.

KS: That would be China.

In practice, that’s right, actually. I think more than half the mining is probably in China right now.

KS: Yeah, that would be China.


KS: Well, how do you combat it?

Well, it’s interesting because I’ve always wondered why, and maybe this is already happening, but since I’ve begun in this space, I’ve always wondered why U.S. government folks depending upon the department haven’t thought about creating just like a subsidized bitcoin mining project at real scale just in case bitcoin becomes a very important part of the world’s financial system. It just strikes me that China’s been a little bit more forward thinking and taking less …

KS: They only have a science adviser at the White House. It’s not happening, Adam.

True. But this was an Obama … this was too early.

KS: Obama forgot to notice or the Russians …

It was too early.

KS: … were attacking us on Facebook. None of them. None of them.

Yeah, I love Obama. I’m not blaming him, but …

KS: Oh. Oh, I am.

You’re blaming him for not getting into bitcoin?

KS: Not bitcoin. I think the Russian stuff.

Oh, the Russian stuff.

KS: I think all the government failed us on that. You know. Going way back, all the government failed us. They didn’t know. Okay, I’m going to give them …

So you should put the government on the block. You should join these people in Costa Rica that want to do like …

KS: No, Puerto Rico.

Puerto Rico. Yeah.

KS: Yeah, they’re crazy. No.


KS: A lot of … Go ahead. Next one, Lauren.

LG: Sure. Next one is from Bridget McGraw. “A lot of resources were dumped into digital badges, also known as micro-credentials in education, but the concept didn’t take off. How would we create a useful blockchain credentialing system for the broken education institution?” I feel like you just do for the insert broken institution here. This is really education.

KS: Yup, yup.

It is interesting that for whatever reason people, maybe because it’s so poorly understood, they take blockchain and make it its savior for everything. So I think tactically what the questioner is getting at is can you issue some sort of token that represents a qualification and put that on a global ledger such that it’s not run by a company that might go away, but for the foreseeable future I can always reference that?

This gets into other questions about, what about using blockchains for identity? What about using it for things like credit reports and credit scores? That whole area is fraught with challenges and I don’t have any good answers, but I’m sure someone smarter does. So I like the question. I don’t know that I have a good answer to it.

KS: Do you know if you put some blockchain on your skin it refreshes it beautifully.

I heard that.

KS: It’s like everything.

I think that’s one of the promises of Recoin if I remember …

KS: Exactly. Recoin is going to solve that.

Don’t forget to put that in your white paper.

KS: No, you’re going to make … You’ve just now been dragooned into Kara’s army.

If you put me in this red chair on your keynote stage I will launch Recoin with you. Okay?

KS: It is happening. Peter Kafka, get ready. Peter doesn’t get any.

“Is bitcoin’s future a long one or do you think it will be closed by another currency eventually?”

I think there will be an ecosystem of several cryptocurrencies. I don’t think it’s steady state to have hundreds or thousands, nor do I think …

KS: It’s like trains.

… it’s good to have one or two in the same way we have email, we have messaging services, we have web, we have Skype. I think you design a network with particular qualities and parameters and you optimize around those.

If you look at the financial system today, equities and loyalty points are very different, they’re very different systems, very different players. I think there will be several, but after any Cambrian explosion you typically get prey before predators, right?

KS: Tons. Yup.

You just get everything blooming and then something comes along and starts eating everything. So we’re kind of in that like everything has bloomed and it’s ripe for some predators, but I think there will be a steady series of several.

KS: The banks are freaking out, also the government. They’ll all try to insert themselves in some horrible lobbying fashion of some sort.

Yeah, yeah. I think that’s right.

KS: They will. They’ll have to.

It’s happening now.

KS: If someone’s going to eat their lunch it might as well be them. That’s what I always say about everything. So next one, Lauren, go ahead. Pick one.

LG: Yeah, we had several questions from our regular question asker, Liz Weeks, but unfortunately we don’t have time for all of them. Here’s one of them. “What happens if blockchain executes something and is then successfully challenged in court or an administrative process? For example, what if challenges a smart contract after it executes, is it irrevocable? If so, should we consider a higher level of capacity to execute a smart contract than a traditional contract?”

KS: Yeah, these are contracts. That’s what these are.

At the end of the day, a transaction on a blockchain is an irreversible bit of code that has been executed and forms an immutable history.

KS: Mm-hmm.

In fact, I think it’s pretty good evidence in court if you have the appropriate expert witnesses to explain it to the judge. So I think you’ll see probably more and more cases where a smart contract executed on a blockchain, if properly understood, will be about the best evidence you can have that you entered into a counterparty relationship and the thing was executed.

Now, the question becomes what happens if there’s a bug in the software and the spirit of the agreement is executed differently because it was written improperly? As everyone knows, all software has bugs. Those are issues which I think will be litigated.

KS: What happens if water pours on paper contracts? You can do that to everything.

That’s interesting. Yeah.

KS: Everything has comparability. The next question was about treaties, too. The same thing is how can you make sure people don’t go rogue on treaties?


KS: People can break them.

Yeah. I think in general folks are viewing blockchains as a solution to enforcing contracts and it’s helpful in general just to appreciate that. A blockchain can only enforce things that are native to the blockchain, so if you and I, Kara enter into a contract that says I will give you this bottle of Gatorade, the blockchain can’t say whether I did or not.

But if there’s a token on an Ethereum network that represents that Gatorade and I give that to you on the network, the contract can enforce that you have the Gatorade token, but again, it doesn’t mean that I’ve actually given you the Gatorade that it represents. So any time parts of reality live outside of a blockchain, the blockchain can’t actually help you. That often gets …

KS: So if a house gets transferred or …

Exactly. That’s a great example. A house or … There’s this IBM commercial I saw I think during the Super Bowl where it said, “This is a diamond. It’s on the blockchain thanks to IBM.” I’m going, “Okay, the diamond is sitting in a room somewhere. It’s not on the blockchain.”

So anyway, these connections between the real world and the digital, we have a long way to go before this tool can really help us.

KS: Yeah, you can’t make people from being cheaters. You can’t stop them. You cannot stop humanity from behaving badly.

I think that’s a deep and important point.

KS: For things. For things.

Yes, but on Recoin you will be able to.

LG: That’s like the internet. All tools can be used for good and can be used for bad.

KS: Okay, last question. I think I’ll ask it for both of you, but from Walt Mossberg, he’s a retiree. He’s trying to figure out where to put his money, his pile. Believe me, there’s a lot of piles of money over there, but it’s all in gold under his bed, of course, where Walt likes to keep it. He sleeps on it.

“Would you,” Lauren Goode, “accept your salary or your 401K match in bitcoin?” Same thing with you, Adam. Lauren?

LG: Only if it was Mosscoin. No, salary, no. 401K match, maybe. Maybe I’d be willing to experiment with that, but I’d have to do a little more research into it. It’s amazing actually when you think about all the people, myself included to a point, who will put things in mutual funds or say, “Sure, I’ll do it, my company will match my 401K and it will be distributed and diversified in some way,” but if you don’t actually really look at where it’s being held or what the movement is like, you could actually have no idea what’s going on.

KS: You never see your money, Lauren.

LG: What’s happening to your savings.

KS: When everyone’s talking about all these, I don’t want my money to be virtualized. It is virtual. You never see your pile of money. You don’t have a safe like in Harry Potter where it’s all sitting there making nothing, doing nothing.

It’s true. You want me to answer?

KS: Yes.

LG: Yes.

No, I wouldn’t want to take my salary in bitcoin because I think of cryptocurrencies and crypto-assets as part of a portfolio of assets, and I want to think about them separately in terms of what my allocation is going to be and which ones I want, if I want to rebalance and go long on certain ones or short on certain ones.

So I think of my paycheck as the thing I want to be the most stable kind of flat-line boring thing possible that I can then go and say, “All right, I’ll throw it away on this high-risk investment and see what happens,” or, “I’ll spend it on a latte.”

KS: What portion should people … Some are saying 2 percent.

I usually say, if you’re early in your kind of investment horizon, I tell friends 5 percent of your portfolio in crypto actually seems responsible.

KS: In which ones? All of them or just …

No, not all of them, because to your point earlier, there are a lot of hucksters and people that are just taking advantage, but there’s an emerging class of five or six that really are — and this is kind of goofy to say — but kind of blue-chip ones in this space, and there will be more. You do still have to be prepared to lose it all. It’s just, it’s that stark still.

KS: It’s like real estate in Florida. It could just be swamp. Lauren, would you accept your salary in avocado toast?

LG: You know, with how well it’s doing in San Francisco right now, absolutely.

Isn’t that the idea of a startup?

LG: That stuff is worth like $ 12.

KS: It is. It keeps going up in price. That’s because they add furikake or whatever that Japanese spice is to it. Then that’s another $ 3.

Anyway, this has been riveting. I’m going to talk to you about Recoin when we stop.


KS: This has been another great episode. Adam, we’re going to have you back to give us updates because this is really helpful. This is something that people are really interested in and they should be. It’s not total silliness. The redo of our currency system is the one thing that has resisted the internet and digital things, and so in some ways we’ve stayed in the dark ages in finance, for sure. It’s going to change. Same thing with health care and some other areas. So thank you for joining us.

Thanks for having me. This was a lot of fun.

LG: Thanks so much, Adam.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Senator Chuck Schumer on Recode Decode

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

The Senate Minority Leader talks about Amazon, net neutrality and why you can’t negotiate with Donald Trump.

On this episode of Recode Decode, hosted by Kara Swisher, Senator Chuck Schumer, D-NY, talks with Kara and Democratic strategist Hilary Rosen about a range of tech-related issues, including immigration, net neutrality and Russian election meddling.

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: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the creator of the popular Facebook page “100 Percent American Patriot News, Definitely Not From Russia, But Don’t Look Too Closely. 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. You can find more episodes of Recode Decode on Apple Podcasts, Spotify, Google Play Music, or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Today I’m joined once again by democratic strategist Hilary Rosen, who regular listeners may remember co-hosted a month of political episodes with me last year. One of the people we wanted to talk to back then was Senator Chuck Schumer, he’s the senate minority leader and the senior United States Senator from New York, obviously, and he’s joining us today from Washington, D.C., for a shorter Recode Decode, but we’re thrilled to have him. Senator, welcome to Recode Decode.

Chuck Schumer: Kara, great to be with you, I’m looking forward to it.

KS: We have so much to talk about, we could talk for hours, I’m guessing. Let’s go right into it. You’ve been in the Senate for 20 years now and the leader for one. I’d just like to know what the biggest difference … you’re in an administration that’s quite active too, so why don’t you talk a little bit about that?

Okay, well I’ll tell you a story. I like stories. Abe Lincoln said, “The best thing a politician can do is tell stories.” It’s election night, 8:00 pm, I see the exit polls of college-educated women, North Carolina and Florida, the first two states to close, and I go, “Oh, boy.” I call up Hillary’s chief pollster, strategist, guy named Benenson, he says, “Don’t worry, our firewall in Wisconsin, Pennsylvania and Michigan can’t be broken. There’s no way Trump wins.” Of course, he won, and the next morning just by way of reference, Paul Ryan called me up, the Republican Speaker, and I just happened to ask him, “Well, did this come a surprise to you, Paul?” He told me this story, I hadn’t told him the 8:00 pm story.

He said, “I called up our chief pollster at 6:30 pm, he said, “Sorry Paul, Feingold’s going to be your new Democratic senator in Wisconsin. Schumer’s going to be majority leader, Hillary’s going to be president.”

Okay, I am distraught, my wife is distraught, my big daughter is most distraught, because she had worked in the Hillary campaign and had her job picked out in the White House. I taught them the old Shirelles song, some of you will remember this, “Mama said there’d be days like this,” and I moped around in my house for two days. I’m not a moper.

Hilary Rosen: As did the rest of the country.

The third day, I had an epiphany, almost a message from the heavens. It went like this: “Chuck, stop moping. If Hillary had been president, your job would be easier, it would be more fun, and you’d get some good things done. That’s why you’re there. But with Trump as president and you as minority leader, your job is much more important.” That has fueled me the whole way through. This is the hardest job I’ve ever had. Much harder than just being senator, particularly with Trump as president. I worry more in this job. I wake up in the morning and I have three or four things I’m always worried about. I’m not a worrier, I never used to worry, but I love it more than any job I’ve had because what we’re doing is so vital and so important to saving America.

KS: How is your frenemy relationship going right now? You were down with immigration and sort of up with Dreamers then down with Dreamers, and it goes back and forth quite a bit. Where is it right now? How do you characterize it? Because I can’t tell what’s happening there.

He likes to talk to me. He calls me up, but I’m right in his face. He said to me when we were debating immigration, “Everyone loves the wall.” I said, “Mr. President, 35 percent of the people like the wall, that’s your base. If you keep just appealing to your base, you’ll never be re-elected and you won’t be a good president.”

I said to him time and time again, “You’ve campaigned when you ran as a populist, and against both the Democratic and Republican establishments, but you’ve embraced the hard right. The hard right is so far away from not only where the American people are, but even most Republicans. You’re going to be an abject failure as president. You ought to change.” I talk to him like that, and he keeps calling me back.

HR: Do you sense you’re one of the few who actually does talk to him that way?

I think I am one of the few. Most of the people around Trump seem to be in the sycophant mold. That’s not quite my nature.

KS: Let’s ask about Dreamers though, where are they now? You were getting along with them, you had that lovely, I don’t know, lunch or whatever it was, dinner. This was supposed to be the easy one and it hasn’t passed, obviously. That’s a concern here, immigration issues are a major concern in technology and the technology sector.

Of course, of course. Well, we need immigration in tech. I’ll tell you an interesting thing. When McCain and I did the 2013 immigration bill — which passed the Senate with 68 votes but the Tea Party stopped it in the House, Boehner was afraid to bring it up even though it would have passed — but we put on the legislation, where of course there was a path to citizenship for the 11 million. We also said that any foreigner who studies STEM — science, technology, engineering or math — and gets an MA or PhD at one of our universities gets a green card stapled to his or her diploma.

That would have been such a shot in the arm for tech, and still today, I’ve nurtured and helped the New York tech industry, which now doesn’t need much nurturing. We’re No. 2 after California. When I asked them what their complaints are, it’s still getting talent and how many people from overseas want to come here and can’t.

With Trump, in answer to your question, I said afterwards, negotiating with him is like negotiating with Jello. I try when I’m negotiating to put myself in the other person’s shoes. I knew Trump wanted his wall. I hated the wall, but I felt, we all felt so desperate to help the plight of the Dreamers, that we were willing to give him not the cutbacks on legal immigration, which involved humanity, and not interior enforcement, and not sanctuary cities, which would hurt lives, but this physical structure of the wall, which I believe never would have been built.

To build a wall in the 60 miles that he first wanted to, you needed 982 eminent domain cases. Anyway, we gave him what he wanted but he couldn’t take yes for an answer. We sat at the table, myself, I insisted it just be his chief of staff, Kelly, my chief of staff, Mike Lynch, him and me. I didn’t want Miller there or Cotton or anybody else; these anti-immigration people. Basically, we didn’t shake hands on a deal, but we said this is the parameters of a deal, we think we can both accept it. Immediately he talks to Miller and Cotton and adds all these unacceptable things. You can’t negotiate with him because it’s like Jello.

KS: What happens now then? Where are the Dreamers? Where is immigration? This is wending through the courts and everything else. What happens?

We meet regularly with the Dreamers and the other groups that have been with us through the battles on immigration. The first thing we’re doing is urging Trump to simply extend the date. He caused all this problem.

KS: He created the deadline.

He created the deadline. He can lift it tomorrow. We’ve said that to him. If he doesn’t, we will then have to see, in this omnibus bill that comes up March 25th, if we can get something in that’s positive for Dreamers and extends the deadline. The problem has been Paul Ryan. Not so much the Senate, although some — and you saw the vote in the Senate even on our bipartisan bill — but Ryan has been very negative here but he’s feeling the heat from two places. One, the deportation, the breaking up of families, just the total nastiness of this administration to Dreamers is just an issue that strikes the heart chords of America.

Second, he’s got 30 or 40 so-called moderate Republicans in suburban districts, and those districts are putting heat on those people to say, “Do something.” Now in the past, unfortunately, when the hard right, the Freedom Caucus, says jump, Ryan says, “How high?” and that’s what’s tied us in a knot. But maybe he’ll feel the pressure this time.

KS: We’re going to take a quick break now for a word from our sponsors. We’ll be back in a minute with Senator Chuck Schumer.


HR: There’s such unanimity among Californians and in the tech community and maybe on the coasts to support the Dreamers and to support some immigration bill. There was this perception after the budget at the end of last year that maybe Democrats didn’t use all the leverage that you had to try and do something. Do you think that’s because the politics of immigration aren’t really the same way that Californians or the tech industry perceives it?

That’s certainly true, Hilary, but I remind people, we’re playing with a pair of fours. We have a Republican president, a Republican Senate, a Republican House, led by a Republican party that is the most anti-immigrant we have ever seen in the history of America. We can pressure as best we can, but we really don’t hold the cards. Democrats hate to shut down the government. We hate it. We like government. We’re not like the Republicans. The only time we’ve ever done it has been for Dreamers. We put the issue on the table. We came real close in the bipartisan vote where he got the piece of the wall, which I think would never be built. We got a really good bill on Dreamers, not just 700,000 but close to two million citizenships for them.

Then Trump lobbied against it. The Republicans backed off, so at some point we’re going to have to go back at it again, and we will, but we got to call our shots because we can’t just pound our hand on the table and say, “It’s going to get done.” One reminder, if all of those who support Dreamers, Dreamers themselves, the Hispanic community and all those who support it, if we take back the majority in House and Senate, it’ll get done like that.

KS: You’ve got this pair of fours you’re carrying around. Net neutrality, explain what you want to do here and why you think you can be successful. This is another issue. Ajit Pai runs the FCC.

Well first, I feel really strongly about net neutrality. Like building highways, in the 21st century the net is our highways, and if we were, as a country, to have tolls everywhere and say rich people could use the highways and poor people couldn’t, middle-class people couldn’t, startup businesses couldn’t, we never would have gotten to the place we have here as such a strong economy. It’s the same exact thing with the net.

I really resent these ISPs. I talked to them. They came in and made the case, I felt more strongly for net neutrality after they came in than before because it’s clear they want to maximize their profits by squeezing people who don’t have much power and acceding to people who do.

We feel very strongly about this. This unites our caucus from the most liberal to the most moderate. The advantage we have here, which we didn’t have in immigration, is since it was done by regulation, by Pai, who I think is a horror as head of the FCC — I’m not supposed to use such a strong word. Let me strike that and say …

KS: Horror?

… a very bad leader.

KS: I can think of bigger.

As the head of the FCC. We’re allowed to bring to the floor within 60 days of them passing this regulation a motion to overturn it, and it only takes 51 votes. We now have all 49 of our Democrats. We’re 49 since Doug Jones from Alabama joined us, and one Republican, Susan Collins, so we’re at 50. We get one more Republican to support what’s called CRA, Congressional Resolution Act, to overturn Pai’s regulation on net neutrality, it passes.

We are urging strongly our friends throughout America to email, write, call, picket, protest their senators, particularly their Republican senators if they’re in such a state, and say, “Support the CRA to restore net neutrality. Support restoring net neutrality.”

I remember SOPA and PIPA. We had millions of people emailing and protesting and we succeeded in beating it. We can do the same thing here. We’re trying to rouse the community.

KS: Are you working with the big tech companies to do that?


KS: Who are you working with?

Yes, we’re working with the big tech companies, the little tech companies. I was on the phone today with the head of the Internet Association asking him to get all of his membership, which goes all the way from the biggest tech companies to the others.

I put in a call to someone I know, Reed Hastings. Netflix users will pay a lot more money if this happens, and they might get slower service too. I’d love Netflix to, any time you subscribe, to just have a little chyron on there and say, “Write your senator. Don’t be charged more for your movies.” We need to get all of our tech providers, big and little.

I spoke to Fred Wilson today, who’s one of the funders of tech in New York. We’re trying to get the whole tech community to rally the way they did with SOPA and PIPA. Folks, a lot of it depends on the employees in these companies. If they tell their leaders in their companies, “Please get onboard here,” that’s going to help too.

HR: I think one of the reasons this becomes different than SOPA and PIPA is that there really are customers on both sides of the equation here. When you look at Netflix or Amazon or YouTube, they take up 75 percent to 80 percent of all the bandwidth on the internet, and then these telephone companies feel like they’re subsidizing those businesses, but both of them charge customers, right?


HR: Netflix charges customers more anyway, right?

Yeah, it’s not the fight between Netflix …

HR: It’s money versus money.

I want to be for the people, for the average person. This is going to cost them more because Netflix won’t reduce their prices, but the cable companies and the ISPs will raise their prices.

KS: Also, Netflix did do a deal with Comcast, so a lot of people felt like they backed off the fight after they got theirs.

It’s not just Netflix, it’s a whole bunch of companies that should do this.

HR: Do you think if you got 51 senators that that would lead to compromised legislation, or do you just see it as just a fight at the FCC?

I’d like to keep fighting. I am very leery with a Republican controlled House and Senate of legislation this year. Again, if we get back the majority, I’d like to do good legislation and force Trump to sign it. I’d make one more point here related to this and everything else. The M.O. of our Republican colleagues — I’m sorry to sound partisan here, but these are the facts — they always side with the big interests over the average people. That’s certainly true here in net neutrality. Average folks will pay more. New startup companies, Fred Wilson, who I talked to, who’s funded a lot of the startups in New York, they’re petrified because their larger competitors will get better rates than they do.

If you’re a new company, a new startup, that’s going to kill you. They are siding with the big special interests — surprise, surprise — and we’re trying to help the average people. The good news here is because this was a regulation that was passed in the last six months, we have the ability on our own with a couple of Republican votes to overturn it, then we’ll have to go to the House. But I think if we get people to rise up the way they did with SOPA/PIPA, there were two sides there too. There were the companies, the content providers and the tech community on one side versus the other. If we get people to rise up, we can have the same positive result. A lot of Republicans on SOPA and PIPA who never wanted to side with average folks were forced to.

KS: Can you walk us through, when it passes, what happens? If it passes, you get that extra senator, is there anyone you’re targeting? Then what happens?

Well, we’re targeting everybody right now because it’s just starting. We have 60 days from last Thursday, so we have a long time. We’re going to have days of action where we build things up. There’s a discharge petition, that’s a technical thing.

I just had a meeting of seven or eight senators, Senator Markey, Senator Wyden, Senator Cantwell. People have been very involved in this issue. We’ve divided up the heads of the big companies and calling them. I’m going to do calls with every New York college newspaper to get them to write about it. We’re just starting to rally here. And hey, Kara, it got me on your show.

KS: Yeah, that’s true. Fair point.

HR: You think the politics of this work for Democrats?

Absolutely. Here, I want to say something interesting here. It’s a little broader but it’s related. Our secret weapon to win back the House and Senate, we got a few, but one of the top ones, probably the top one is the millennials, the 18 to 35. These are the people who know tech the best. They’re going to be the largest voting cohort this year.

I’m a baby boomer. I was born in 1950. My children are the millennials. They’re 28 and 32. They’re the largest voting cohort. They’re overwhelmingly Democratic, all of a sudden. Four reasons I want to mention, and this is very nice. It gives me help. Oh, let me tell you, Hillary only won millennials by plus seven.

In the New Jersey governor race, millennials went by 41 points for the Democratic candidate, in Virginia 38 and in Alabama, where we won that senate race, the millennials and the African-Americans were our two secret weapons and we won by 20 points. Millennials in Alabama. This is a big deal.

Why are the millennials so for us? Four reasons in ascending order of importance, and this is going to give you faith in America. Fourth, college. They want help with all the burden of all these student loans they have. Third, environment, green. These folks are very green. Second, freedom. Net neutrality, decriminalization or legalization of marijuana, the freedom to do what you want, and net neutrality is way up on that list because it gives people freedom to pursue things on the internet without too much cost.

The No. 1 reason, bigger even than net neutrality and bigger than all the others, is this — and this one came as a surprise to me. The others are sort of intuitive. The younger people hate the bigotry, the smell of discrimination that’s coming out of Trump and the Republicans. The anti-women, anti-black, anti-LGBT, anti-Hispanic, anti-immigrant, anti-Muslim.

I thought about it after I learned this and, very interesting, at my wedding, 1980, to my wife, not a person of color was at our wedding. There were probably gay people but we didn’t know they were gay. They wouldn’t tell us in those days. My daughter’s wedding a year and a half ago was like the United Nations. Not because she was picking and choosing. That’s who she went to elementary school with, high school with, college with, works with, has friends with.

What we’ve learned, Kara, this is so interesting, on the coasts, they would call it bigotry. In the middle of the country, even high school educated kids, women more than men because they’re more sensitive to discrimination, would say, “We don’t like the way they’re dividing us.” When you think about it, almost every group of friends has a black, has a gay, has women. When Trump picks on them and the Republicans pick on them, they tell their friends, “I don’t like this,” and neither do their white male friends.

HR: True.

This is our future.

HR: That’s the “Netflix and chill” tweet that you’re …

Yeah, that was Netflix and chill.

HR: We’re going to get some Netflix and chill and maybe slow this down.

I want to confess, I didn’t know what chill … I knew what chill meant in my generation, which means the opposite of what Netflix and chill means today.

KS: In the #MeToo movement, let’s not go down that road. We can talk about #MeToo in a second. I want to touch on a couple things: Guns.

I have a great #MeToo story, okay?

KS: All right, go ahead.

I’ve been an advocate of #MeToo.

KS: I do want to get to guns, midterm elections and Russian bots. Go ahead.

We will. When #MeToo came out, my mom, I haven’t told this publicly yet, but I’m going to do it here. She’s 89. She told me just in October the following story after #MeToo started. She was 17 years old. It was 1945. She was on the diving board at a camp where she was a counselor, and a parent of one of the kids at the camp, who was a big deal in her neighborhood, he owned jewelry stores. I’m going to leave out his name, even though he’s dead now. He grabs her from behind and pushes her into him. She says, “What are you doing, Joe?” She jumps off the diving board.

She goes into the changing room, which is an open co-ed changing room. He comes behind her, takes down the straps of her bathing suit and says, “Turn around, Selma,” and she turns around, he’s naked. She runs out of the changing room and goes back up and she tells — this is the part that really was amazing to me, even worse or as bad as the previous part. She told her mother, she told her father, she told her grandma who she was close to. They said, “Don’t tell anyone. They’re going to blame you.”

That was in 1945. Just about every woman has had stories like this or a friend who has stories like this. I tried to explain this to my male friends, colleagues, that men just don’t understand it because they’ve never experienced this, but so many women have. It took the #MeToo movement for my mother to tell me this story, whatever it is, 44 years later.

HR: God bless her. And her voice.

Isn’t that amazing?

HR: God bless her.

KS: It’s not surprising to women, I think. Everybody has a story, especially in tech. Everywhere. Every sector. There’s not sector of the U.S. economy that it hasn’t affected, at work especially and everywhere in their personal lives.

We’re going to take another break for a word from our sponsors. We’ll turn to Hilary Rosen and my conversation with Senator Chuck Schumer after this.


I want to get to regulation in big tech, because one of the things people feel that tech has — especially social media — has become weaponized and coarsened our culture. Obviously Donald Trump is really talented at Twitter, whether you like it or not, but he’s good at it. A lot of people feel that there needs to be regulation of big tech on lots of issues, from tech addiction to fake news, antitrust, advertising and transparency. Democrats, which used to be the supporters of tech, are now much more negative on it. Do you feel that way or do you feel that the regulation’s necessary?

I think it’s a very difficult question. First, let me say this. The people who most want to undo tech is the hard right. Donald Trump and the hard right do not like anything stated against them. They all watch Fox News, which is totally biased. Any time there’s groups that can talk against them, agglomerate against them, they don’t like it. The left is mad at tech for reasons, but it’s not the same. I have no doubt that the hard right and Trump would like to undo tech as much as they could, even though he uses Twitter.

Now a broader issue. For a decade, tech was a great, great thing. It allowed people to agglomerate. It allowed people who had no power, who didn’t own a newspaper, who didn’t own a TV station, who didn’t have a megaphone, to get together and have power. We would not have the guns movement. I have some optimism on guns, but only because online we’re going to have, they have five million they hope to get in Washington on the 24th against the NRA.

KS: The gun march.

Wouldn’t have happened without the net and without a big, broad, powerful internet. That’s true on immigration. That’s true on the issues. We Democrats represent average folks. Tech gives us the advantage. We don’t have a Fox News. We don’t have Rush Limbaugh who gets 20 million people a day. It’s our antidote. I am sympathetic.

Now because it’s so open and so free, lots of dark forces have taken advantage, and I certainly think tech has to modulate itself. One easy example for us in politics, all ads should have to be made public, who’s paying for the ads when they’re political ads, just like you have to do on television or radio, and I don’t know why big tech resists that.

HR: The Warner Klobuchar.

It’s the Warner Klobuchar legislation. There are probably other changes, but I think you have to be careful. Government regulation of speech is a frightening thing, and often has a bigger downside than upside. I approach the issue with care, maybe moreso than some of my colleagues who would have similar politics to me.

HR: Some of the regulation of tech in the FCC net neutrality order ended up going over to the FTC. What they said was the FTC should be more active in antitrust and in consumer protection, and now the Senate is going to …

Consumer protection I’m all for. That’s a different issue than regulating speech. That’s the worry I have here. Given tech is so new, we probably have to look at it, but we ought to approach it with caution.

HR: Do you think the FTC should do more?

I’d have to study it a little more. Any Trump-appointed agency, I’m dubious of.

KS: What about the responsibility of tech? Facebook, Twitter, other things?

That’s a different issue.

KS: Being used by Russia. Hillary Clinton, we interviewed her last year at the Code Conference, talked a lot about this. A lot of people made fun of her at the time. How do you come down right now and what should these tech companies do?

I think they should do more on their own for sure. That’s the antidote to government regulation and also the antidote to a lot of this stuff. Now they’ve had some successes. Facebook took off 50,000 fake accounts before the French election and it was relatively free. I’ve talked to the leaders of Facebook, Twitter, Google about this. I’ve told them, make efforts to figure out how to deal with this issue without doing too much impinging on free speech or the government’s going to come in and change you, and that will not be good. I think they get it, and their first big test will be the 2018 elections.

I don’t think the Trump administration will do a thing. The amount the Trump administration is doing against Russia is appallingly zero almost. It’s up to tech to do more, and I do think they’re making an effort not only because it’s the right thing to do, but because I think they know down the road their survival depends on it.

HR: That is the test, then, is the midterms, that you think that nothing is going to happen in Congress or in regulation before the midterms.

No. Oh, with these guys? No.

HR: Tech is essentially on the hook to make sure the election feels fair.

Yes. I think tech has to make sure. For instance, they should knock out all these fake accounts. They’re already, I forgot the word, but downgrading things they think are fake, so it comes up less on Twitter, less on your Facebook News Feed. If you got the Russians, let’s say they have 50 websites and they all do the same thing. First they’re talking about this and then an hour later they’re all talking about that. That’s suspect.

HR: Pretty good sign.

Yeah, that’s a pretty good sign. They should look into that. Maybe they can’t shut them down, but they can so downgrade them so it’s only one rather than 50 people bouncing around the same message so that it goes way down on their list.

HR: Do you see Facebook as a media company?

Well, it’s everything. Facebook’s a very powerful force. I think overall it’s been a very positive force. I think now people are taking advantage of the openness of the net, and Facebook has an obligation to try and deal with it. I’ve talked to them. I truly believe they want to. I truly believe they know that their future is at stake with this. I also believe it’s a hard thing to do.

And here’s another thing I worry about. They tried to deal with certain things in the past, and the hard right went and criticized them, because much of this, the left does very little of this. I mean, we don’t use bots the way the Russians would or the hard right people would, we meaning the left, not me. I think when they do that, the hard right criticizes them, they’re going to have to be a little more immune to that criticism and go after the fake stuff and separate it from the legitimate stuff, even if it’s a little bit crazy what legitimate people are saying and doing.

KS: When you talk about this power, you’re pretty kind to the tech companies. A lot of people are less thrilled with them.

Yeah, I am more sympathetic because I think they’re in very difficult position and I worry about government regulation.

KS: All right, but what about the power that they have and what’s coming down the pike? Automation, robotics, AI, all these very important technologies could make them more powerful than ever, almost like nation states themselves. Does that worry you at all?

Well, it’s something I’m concerned about, yes. Do I know what the consequences are, let alone the solutions? No.

HR: To Kara’s point, we’ve spent a lot of time talking about how companies other than online communications companies, but companies like Amazon and what they’re doing to communities and retail and the like.

There’s another one. Now Amazon does great things for huge amounts of people, and they only have 3 percent to 4 percent of the retail market. Could it get greater? Yes, but again, I’d be careful. I’d be careful because they are creating cheaper better competition, people get better goods, cheaper goods.

I guess my feelings are a little more nuanced. Yes, they’re big, but big can do good things as well as bad things, and you got to separate the wheat from the chaff. Would the world be a better place or a worse place if there were no Amazon right now? My guess is a worse place. Yet, there is a lot of problems, for sure.

KS: You don’t see a Microsoft monopoly trial in any of the futures of these companies, or maybe? You were around for that.

When Microsoft was a big monopoly and I thought they were much more rapacious, I fought them. Back in the ’90s, they didn’t talk to me for 10 years.

HR: You’re not seeing that right now?

I am not seeing the same thing. I go to my small tech companies and say, “How does Google treat you in New York?” A lot of them say, “Much more fairly than we would have thought.”

KS: Not Yelp. I have just one more question.

No, Yelp, I’ve spoke to Jeremy Stoppelman. He does not feel that way.

HR: Yeah, they feel differently. Right.

I have.

KS: No. Just one more question from me and then Hilary might have a follow-up.

Kara, it’s more mixed. It’s more mixed in terms of the …

KS: Mixed, I agree with you. I agree with you. There’s too many of them. There’s lots of them. I’m just curious, Hilary’s going to ask you a question I think about where you see the midterm elections going and what you’ll do if you’re the majority leader, but I’d like to know how do you involve yourself in tech? One of your daughters works in tech. Are you a techy? Would you call yourself that?

No. I’m interested in it. I read every article about it, but I am not a techy. In fact, I’ll tell you a funny story. I’m well known for my flip phone. I don’t have an iPhone because my chief of staff, Mike Lynch, in 2004, said, “You know what, someone’s going to hack into this down the road, and you’ll say on your phone, ‘Ugh, Senator so and so, what a moron,’ and that’ll be the end.” I use my cellphone, and I actually … maybe I’m old fashioned.

HR: You don’t text either?

I don’t do texting. I get emails on my iPad. I get emails, but I don’t text. I don’t even know how to do it. I’m backward that way.

KS: You’re not on Snapchat?

Putin is not listening in to me, Kara. He can’t.

KS: You’re not Snapchatting then I’m guessing, right?


KS: Nothing? None of it? You could use Signal. There’s a thing called Signal. They are encrypted.

They will figure out how to capture your instantaneous Snapchats down the road or Signal or anything else.

HR: Communicate the old-fashioned way.

Old-fashioned. I like people. I like to talk to people. I sit on an airplane. I ask the person sitting next to me their life’s history. Wouldn’t be the same if we did it online.

KS: Okay. Hilary, why don’t you ask the election question, then we’ll let the Senator go.

HR: Two quick questions, lightning round then. When does the presidential campaign start, by the way?

It shouldn’t start until 2019. My attitude, who people ask. Let a thousand flowers bloom. Let there be lots of candidates all over the lot and let them go through the crucible of the first year, year and a half. Now, the one thing I’d say is we shouldn’t beat the daylights out of each other. We have a far greater enemy in Donald Trump. Politically speaking, he’s the enemy.

HR: That’s some advice Democrats are not yet taking from you.

No, and I think the difference between a mainstream Democrat and a far left Democrat is about 2 percent of the difference between either of them and Donald Trump. We have an emergency here. We got to keep our eye on what we have to do, which is beat Trump.

Now in 2018, to preempt your question, I think we can take back the House and the Senate. Why? The millennials I mentioned. Second, Democrats are getting much better. This is a tech issue. As we all know, Donald Trump did a better job on the social media than we did. We have learned to do. We are getting advice from some of the biggest, the best smartest people in tech, a lot of them are very comfortable. They made money and they’re working for us full-time.

In Alabama, our social media helped turn out millennials. Our social media and learning how to do turnout, especially in the African-American community where for the first time it wasn’t a bunch of white guys telling the blacks how to turn out, but we had indigenous people running the whole show. Millennial turnout and African-American turnout was higher than in 2016, but also higher than 2008 and ’12. We’re using social media really well. We’re going to kick the pants off the Republicans on social media.

You also have swing voters. I’m going to conclude by giving you one little vignette here. We looked at our five most Republican states where we have Democratic senators: Montana, North Dakota, Indiana, Missouri, West Virginia. We took out the people who always vote Republican, always vote Democrat, but looked at the broad middle, about 60 percent.

Here was the key question. These are Republican states. Do you prefer a Republican senator who had helped Donald Trump pass his agenda on jobs in the economy? That’s his strong suit. Or a Democratic senator who will serve as a check and balance on Donald Trump whenever appropriate? 72 percent, check and balance. 20 percent of the people who identified themselves as strong Trump supporters still wanted check and balance.

People want a check and balance on Trump, and we are now ahead on our polling in all 10 Senate races where Democrats are running in states that Trump carried. We’re ahead in three of the challenger states, and I’ll tell you this, if we take back the Senate, when I have the right to put things on the floor, we can stop Donald Trump from doing bad things and we can actually start doing some really good things. It’s an imperative.

HR: Even though voters generally like the tax cuts, they generally actually like a president who’s fighting for them on trade, as sloppy as he’s been this week, you think that the check and balance is the message?

People, swing voters, suburban voters, women voters, people of color, just lots of folks are worried about Trump and want a check and balance. Some of them like Trump, but still want a check and balance. Many of them don’t like Trump, and my prediction, now that his tax bill has been …

You know, the first month he got a big boost on that tax bill. Why? They just passed it. He had all these companies announcing bonuses, and the stock market went way up. All three are gone. A) It’s no longer just announced and Trump has screwed up on so many things between then and now. Second, people are realizing three things. One, that 80 percent of the benefits went to the wealthiest permanently while their benefits are smaller and temporary. Second, that there’s a huge deficit and third, they’re using that deficit to cut health care, Medicare, Medicaid.

The Koch brothers, with their huge money machine, put ads against McCaskill in Missouri and Donnelly in Indiana. The Senate super PAC answered back on taxes. They put ads on taxes. We answered back with the answer I told you, we won the argument. The tax issue is not going to be the panacea the Republicans think it is.

KS: Can I ask one final question?

You know what’s a bigger issue to people? Health care costs than taxes. Health care costs.

KS: Right.

HR: Now Trump owns them.

KS: Being anti-Donald Trump, does that work? It doesn’t seem to. No matter what low he goes to, it doesn’t seem to.

HR: If you’re a Senator in a state, I think Kara’s asking if you’re a Senator in a state, a Democrat in a state that Donald Trump won, are you running against Donald Trump?

Yeah, you are in terms of check and balance and saying when I disagree with Trump I will fight him. When I agree with him, I’m not going to just go against him for its own sake. In reference to the question that Kara asked, 2018 election with Trump at 40 percent, that’s a huge advantage for us. That doesn’t mean we can’t have our own positive program, and we have some of it and we’re going to have more. We just announced an infrastructure program, $ 1 trillion of real jobs. You know what we did? We took the tax cuts on the rich, some of them, $ 1 trillion worth, and put it into infrastructure. What do people prefer? Tax cuts on the wealthiest people and biggest corporations or millions of middle-class jobs on infrastructure?

In that bill, we proposed something that’s going to really help us in rural areas. In the 1930s, Franklin Roosevelt said every rural home should get electricity. It was a necessity. We say in the 21st century every rural home should get broadband. High-speed internet. Right now, one third of all rural homes have almost none. We will propose it. We’re proposing a job training program, like the apprentice program in Germany, where people can get good paying jobs after a company gets a tax incentive to train them. We realize that in 2016, Democrats did not focus positively enough on people. We are. Remember, fighting Trump is also going to be very important. You need both.

KS: Perfect. Senator Schumer, this has been great. I like all your stories. I wish you would tweet, honestly. You can’t on your flip phone, but it’d be nice.

I’ve tried to make a deal with Donald Trump, “You don’t tweet, I won’t tweet.”

KS: Yeah, he likes to tweet.

HR: He’s tweeting but he doesn’t seem to do the same on taxes.

Tweeting is doing him more harm than good.

KS: I don’t know. He’s good at it, I’ll tell you that.

No, you see, you sound like Donald Trump. I tell him this. It’s good for his 35 percent. It turns off 65 percent. We’re upset because even 35 percent would go for him, but count your blessings.

KS: Well, thank you so much. It was great talking to you, and Hilary Rosen …

HR: Thank you.

KS: … who was also on as my co-host, thank you so much. Thank you for coming on the show. I’m sure we’ll be talking a lot more in the future.

Hey, make sure you write and call, email your Senators on net neutrality, audience.

KS: I’ve already done it.

Good. Thank you.

KS: While I’m sitting here. Thank you so much, Senator. Thanks again to Hilary Rosen for co-hosting this episode with me.

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Full transcript: ‘Sneaky Pete’ showrunner Graham Yost on Recode Media

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Giovanni Ribisi in “Sneaky Pete”

He also worked on the FX series “Justified,” and — for about a minute — “Full House.”

On this episode of Recode Media with Peter Kafka, veteran screenwriter Graham Yost talks about being the showrunner for the Amazon Prime Video series “Sneaky Pete.” He previously wrote movies like “Speed” and TV series like the FX crime drama “Justified,” so he explains what makes writing for Amazon different — or not.

You can read some of the highlights from the interview here, or listen to it in full in the audio player above. Below, we’ve provided a lightly edited complete transcript of their conversation.

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

Peter Kafka: This is Recode Media with Peter Kafka, that’s me. I am part of the Vox Media podcast network, I am here in Vox headquarters in New York City. In a minute, we’re gonna take you to a fancy midtown hotel where I talk to Graham Yost. He’s a TV screenwriter, movie screenwriter, he’s got a cool show on Amazon called “Sneaky Pete.”

So here is that Graham Yost interview. If it sounds echo-y, it’s because this fancy hotel has a lot of marble in it, so it’s a tiny bit bouncier than I would have liked, but we think you can listen to it. You’ll enjoy it.

I’m with Graham Yost, the executive producer, do I get to call you the creator as well?

Graham Yost: No, you do not.

Not the creator of “Sneaky Pete.”

You can call me the showrunner.

Guy in charge of “Sneaky Pete,” which you can see on Amazon. I think an episode at a time.

No, we drop the whole thing.

You do the full drop.


There’s my research out the door. Graham has made a lot of cool things over his career. He wrote “Speed,” which is a great movie. Made “Justified,” which is one of my favorite all-time TV shows. Want to talk to you about “Sneaky Pete” to start with, in case … this is the second season?

Second season.

If you have not watched the first season, you can go watch it now.


With Amazon Prime.

This new world. Watch anything any time.

The quick synopsis, it’s a caper show.

So he is … Marius — played by Giovanni Ribisi — as the first season opens has been in prison for three years and he’s just getting out and he finds that the world outside has changed a little bit. Some business that basically sent him to jail is still hanging over his head. The bad guy, Vince, played by this actor you might’ve heard of, Bryan Cranston.

Also a producer?

Also a producer, and he’s the co-creator with David Shore. They want their money. Vince wants his money and it’s gonna be bad for him. So Marius hides out, takes on the personality, that persona, the I.D. of his cellmate, Pete, and shows up at this farmhouse that Pete hasn’t been to in 20 years and says, “Hey, it’s me. Pete.” So he takes over that life, it’s an assumed identity, and he’s gotta kind of scramble to try to get this money to Vince and all this stuff and finds out this family is not just this sweet … Well, he thought they were like municipal bonds or something, no, they’re a bail bonds company. Yeah.

So he’s juggling identities, there’s capers involved.

Juggling identities, running cons, and it turns out he was running a big con against Vince and that’s Season One. Season One ended with him thinking it was all taken care of and then something from Pete’s past — the guy he’s pretending to be — something from Pete’s past comes up and bites him in the ass. These thugs grab him and say, “Take us to your mother and the $ 11 million or we’re gonna kill your family,” because they think he’s Pete. And that’s where we start with Season Two.

So it’s a fun show, it got good buzz last year. That’s how I ended up finding … it’s interesting to find a streaming show right now, because you don’t generally see a lot of TV ads for it. But I found it, it’s great, looking forward to catching up on Season Two, just watched the first episode this morning.

How did you get to this show? Because originally it was a CBS show, when you were originally not involved, right?

Right. So originally it was Cranston, he created it with David Shore, and they did it for CBS. CBS passed. And you know occasionally this can happen in this business, when there’s a busted pilot that someone else will pick it up.

They made the show, they made the pilot episode.

Right. Amazon said … Morgan Wandell, who was running drama at that time, said, “Yeah, yeah, okay, we’d like some changes. We want Vince to be …” Actually he didn’t say we want you to play Vince, but they said we’ll create Vince as this bad guy and they only had three weeks to get it done, and shoot some new scenes. So it was like, “Might as well be me,” is what Bryan said, “because then we don’t have to cast …”

So that was stitching together just after the fact.

Stitching together after the fact, they shot some additional scenes. In fact, there’s this one pivotal scene in the pilot towards the end between Marius and Audrey, the grandmother played by Margo Martindale, and they … and I realized, “Wow they shot that in the barn at Disney Ranch,” where we shot a lot of “Justified.”

And anyway, then Amazon said yes, you know what they would do is just put the pilot up and see how people responded, and it got a really good response, so they said let’s do a series.

You’re still not involved in this?

Still not involved. There was a first attempt to have a writers room and run it, and it was just hard to come up with the stories. I think that … so that writers room disbanded and there was a feeling because of “Justified” that I might be the right person, and so …

Get the crime and you get …

Crime and a little bit of humor in some characters.

Then Elmore Leonard — it’s not quite Elmore Leonard, “Sneaky Pete,” but it’s Elmore Leonard …

It’s got that vibe. And by the way, you’ve got some of the same actors, which I assume is not an accident.

Well, no. So once I saw it, and the … Fred Golan, who did all six years with me on “Justified” and Michael Dinner, who directed the pilot of “Justified” was our directing producer. We all signed on, but part of it was because of Margo and another part was frankly Giovanni and Marin Ireland, and Shane, and Libe, and Peter Gerety. It was just … it’s rare in the business to be handed a great premise, really good pilot, Seth Gordon did a great, great job on the pilot, you’re handed that and just this terrific cast. So, that was the reason we all signed up.

You said it’s not unusual or it happens sometimes, but in the pre-streaming days, right? If you made a show for a network and they pass, that show generally just …

90 times out of 100.

Even if it was a good show, no one wanted to touch it. It seems like in the streaming era, Amazon and Netflix are often interested in picking up something that someone passed on.

They’re more interested than … In the past, another network would be interested in picking up something.

Why do you think that is?

They’re just, you know, because they can see it. Someone’s already done that work of actually putting the pilot up and shooting it, they can tell whether or not it’s something that might work for them.

Seems logical that you would wanna do that. I think it’s less, much less logical the networks for years wouldn’t ever do that.

Well, it’s also because the networks had such, not narrow channels, but you know there is an ABC type of show, there’s a CBS type of show, there’s an NBC. If you’re shooting something for CBS, chances are working on NBC or Fox is slim, but it could maybe work on another, on a streaming service.

And when they come to you and say, “We have a show that doesn’t work and it’s for Amazon,” which even a couple years ago it’s still pretty new to TV.


Are you reticent to take that on? Do you go, “Well I don’t know”?

So, what had happened is again, I keep on bringing up their names, but Fred Golan and Michael Dinner and myself, we had worked on a pilot script for Fox that previous fall, and then in January we were told they weren’t going forward with it. So we were very disappointed.

Which is standard?

Which is standard, right. It’s that pyramid in Hollywood …

Earn a lot of money in time and doesn’t happen.

You have a hundred pilot scripts written, you shoot 10 and you put two on the air. It’s this pyramid of death. But so we found out we weren’t going forward, we had nothing to do, so when they came to me I was like, “Well, we have nothing else going on right now, we could be developing things, but might as well do …” Again: Premise, cast and that pilot, yeah, we’ll take it on.

I’ll be totally honest, there was a feeling of like, “Well, if we fuck up, if we don’t crack this, everyone else is gonna get the blame. If we succeed then we get patted on the back.” So it was … the stakes for us were not as high. We could sort of relax and enjoy it and try to do the best show we could.

Do you think about this as a streaming TV show or this a TV show that Amazon is streaming?

That is an interesting question and it’s …. As things start to change, you start to think of things differently. For example, we pitched the first episode of the first season — our first episode, not the pilot — and pitched it to Morgan Wandell and Bryan and his partner James Degus and all the Sony guys, Zack and Jamie. We had it up on the board. We use a whiteboard, I like to have a whiteboard room instead of cards. So, we’ve got it put up there and we’ve got it broken by acts and Morgan says, “Yeah, we don’t have acts at Amazon.”


Because there’s no commercials. So you’re not breaking it up every eight minutes or 10 minutes. But I said to him, “We still have acts creatively.” Because we need to know the pace of the episode, where are we hitting what, where, when.

Because viewers, you think, just have that conditioning, they expect that? Or that’s just how you know how make a …

That’s just how I know to tell a long story. But it started to change over time because you don’t have to go to commercial break. You realize that thing that normally I would put in the last 10 minutes, we could put that in 20 minutes to the end. We could amble a little bit, as long as we got a big turn at the …

Even more than on FX with “Justified,” streaming shows like a bit of a cliffhanger, some kind of hook at the end of the episode, because for them the show is working when people let it roll. When it says the next episode will start in however many seconds, if people just let that roll, then the show is working.

In the olden days, right? That was to get you to come back next week, here it’s just stay on the couch for another 10 seconds. That’s the same construction, really.

It’s the same … roughly the same construction, but there’s an urgency to it rather than, “Oh yeah, I’ll check in on that next week.” It’s like, “I’m gonna watch it now.” I have been told by someone that the best way to break out of that addiction is to stop an episode in the middle. So get about 20 minutes in and then go to bed.

If you don’t wanna binge?

But you gotta see what’s gonna happen next because they’ve just hooked you. Yeah.

So you lean even harder on, “Holy shit, this thing just happened, we gotta …”

Yeah, and it doesn’t have to be a gun to the head, it can just be, well, as the first episode of this season ends, it’s just propelling you forward into the next episode. We’ve got …

Right. “Holy shit, something happened 10 minutes earlier.”

The holy-shit thing happened 10 minutes earlier, now it’s, We have to accomplish this and it’s impossible, let’s do it.” Hopefully that’s enough to …

Are there other parts of making or marketing the show that are different for this?

Its small stuff, but it’s … A thing where you’re gonna bargain the first season and the props guy says what kind of beer do you want to drink, and it’s like, “Well, does it have to be Hampstead?” You know, it’s these made-up brands, Kingsland — well, you know, not Kingsland. And he said, “No, it can be anything.” Because there’s no advertisers, you don’t have to worry about offending Coors, if you’re putting Bud Light onscreen. So that’s a small thing but it creates better verisimilitude.

Budgets are the same, it looks like at this point now?

Basically the same. Unless you’re doing “Game of Thrones.”

Yeah, you got money for music rights. I saw there’s a Steely Dan reference in the first episode and then you end with Steely Dan in the credits.

It was very expensive, and I got yelled at. But I insisted Walter Becker had just died, and we’re putting in a Steely Dan song.

Sorry to spoil the first episode, but it’s a good song.

It’s okay.

It’s a good song.

And that was Michael Dinner’s idea to put that song in at the end. You know, it’s the same constraints, really, unless, you know, once Amazon starts doing the Tolkien series, they’ve spent a lot of money on that. That’ll be … then they’ll be spending a lot of money.

But for a show like this, you don’t need an unlimited budget, you don’t need an HBO budget on this. It’s … you can get it done in the time allowed. That doesn’t mean that it’s not difficult, it doesn’t mean that we didn’t have two crews running for many days to pick up scenes that we dropped in the previous episode and all that kind of thing. Then trying to schedule the actors and, you know, because it’s got a big cast. But, yeah, we were able to get it done.

In podcast land we take short breaks, we take short breaks here for advertisers, we do have advertisers, we’re gonna come back in one minute, or less.


See you in one second.


Back here with Graham Yost, still here, he did not move.

Not an inch.

Lousy day to move.

Aw, it’s fantastic out there.

We’re recording this on a crummy day in March, you can see the show in March. Do you think about how people will find a show like this? If you know to go to Amazon video, there’s a whole carousel of stuff there, movies, etc. Do you think about how they will get word out to a viewer? Other than podcasts? Or is that not your job?

It’s not my job.

To worry about.

It’s not my job. It really … the thing is is that some people, some showrunners, are really smart about that and know how to get involved and know how to push things in a certain direction. My feeling is that’s not my forte. That anytime I think of something like, “Hey, why don’t you do …?” it’ll be explained to me that I’m an idiot.

They politely say, “Hey, great idea.” And never come back.

And then … Frankly, you see the trailers that Amazon cuts and the ads and the ideas that they have, there’s one they call “Truth,” which is a poem written by Emily Dickinson being read by Libe Barer, who plays the kid in the show, Carly. I don’t know who came up with the idea, but it was great, it was beautiful, and it had all the cool shots of the season and stuff. Like, man, you guys know what you’re doing.

You guys go for it.

Yeah, and then you see their print campaigns and it’s like, “Well shit, that’s wonderful.” So really I just kind of stay out of that and do good job. And then now I’m in New York and I’m riding the subway and I’m seeing how many “Sneaky” ads are on the subway walls.

Those are for your benefit.

I know, what if it like disappeared as, say, I went through the station. No, but I count them, and it’s like I know that next week or the week after those will be disappearing and all “The Americans” ads will be coming in.

But you also are happy to see.

I’m happy to see that.

You mentioned the Tolkien shows, it’s reported and true that Amazon now has bigger ambitions for TV, they want even bigger shows, which have bigger audiences. You came on when they were still in the … we’re very happy that “Transparent” is a critical hit with a relatively small audience. As they are scaling up their ambitions, does that change what you need to do for a show like this?

You know, it’s not that hard to work an orc and a warg into … no, I don’t know, but listen, hey if they’re writing wargs that would be fantastic. Listen, I’m a total Tolkien geek, I belonged to the Tolkien Society of America when I was a kid. So I support anything that involves more of his world coming to life.

It’s a different kind of thing. I think that “Sneaky” is not that kind of thing, doesn’t need to compete with that. And this is one of the interesting things, is that there’s room for so much. That you can have a show like “Sneaky,” you can have a show like “The Tick,” you can have a show like “Patriots,” all these things. And some of them are gonna work, some of them aren’t gonna work. But you’re not … and then you can also have, you know “The Silmarillion” or whatever they’re gonna do.

But when they started they were really just tinkering and they sort of stumbled into — I think from the outside it looks like they stumbled into these small quirky shows that then had critical buzz. It seems like they’ve … they’re upping their ambitions and they want a bigger audience. And a show like “Sneaky Pete,” right, is not intended for … what’s the polite way to say it? It’s just not a show that can run on a broadcast network, right?

It could, except for the swearing and the sometimes nudity.

Right. It’s dark and people get killed.

Yeah, it’s dark and people get killed. So it fits this thing, it could maybe be on basic cable. Listen, “Sneaky” … Amazon doesn’t release numbers, but they do release the rankings. And “Sneaky” was the No. 1 show for them in North America and second in the world. So that’s good, so if I find out that No. 1 means 700 people, that’s not good.

Do you wanna find out?

No. Because honestly the only … And I used to say this, we’d get the overnight ratings on “Justified” and we’d get the … it’s not gonna affect our story telling, because we do so much of the shows now long before they air. So with “Justified” we’d shoot an entire season pretty much and then it would start to air. So it’s not as though any information we get from the ratings is gonna change things.

And that’s certainly the case with this, because the whole thing drops at once. So the only input … the only thing that matters is whether they say they want another season. That’s all it comes down to.

So you make “The Americans,” like you said you’re a producer.

I’m a producer on that, like I said I don’t make it, I just read scripts and watch cuts and say, “Joe and Joel, you’re doing a fantastic job.”

That is a critically beloved show, not a huge audience. When you see the numbers coming in for that, do you think, “Well, I’d rather not see the numbers there.”

It’s just I feel bad for the network, they’re not as big as they could be, but I also feel good for the network because “The Americans” has been a real success for them critically. Not only critically, they … FX loves that show. John Landgraf loves that show, as does John Solberg, and Eric Schrier, Nick Grad, the whole team, Colette. They just love it, because it’s really good and it’s smart and it’s engaging and it’s … got its own pace, and it’s … you know, people wanna find out what’s gonna happen to that family and they care.

How conscious are you of the fact that there’s so much tech money coming into Hollywood right now? Trying to make content. Netflix if gonna spend eight billion, Amazon is spending whatever they’re spending, Apple’s shown up with a big checkbook, the guys from Sony, who you know. Do you think, “Boy, there’s a window here and I’ve got to make whatever I can make because this can’t last forever”? Or do you just go about your business?

Yes and no. Which is, there perhaps is a window, but no one knows. Look, as a writer, the previous guild negotiations back in … well, we struck back in 2007 and then there was another negotiation and then there was a threat of a strike the last time around. Previous negotiations, the studios would claim poverty. This time they said okay, we can’t claim that.

When we started “Justified,” I remember Zack Van Amburg at Sony saying, “We honestly don’t know if doing shows for basic cable makes financial sense, we don’t know.” Then he would try and bust my balls on some kind of budget issue and I’d say, “Well don’t make the show.” And he’d say, “Shut up, we’re gonna make the show.” And on we would go and we’d give each other shit, but they can’t claim that anymore. It does work.

But no one’s sure … is basic cable gonna survive? Is it gonna be something but streaming? Is it network constraining? Is it a combination? How are people gonna get this? Is there gonna be a singular portal that everyone is gonna gravitate toward? Are you gonna be able to buy a package where you get Hulu and Apple and Netflix and Amazon for, you know …

Kind of like cable TV.

Kind of like cable TV. And where are you gonna watch your sports and how is ESPN gonna do? So it’s an incredibly tumultuous time and no one knows what’s gonna happen. It’s a time of great opportunity, but it’s also a time of … People also are kind of protecting their slice of the pie. So we do this and we’re gonna get a little more of that.

Do you think, “Well, I got a project and normally I couldn’t get it financed, but if the Apple guys are around and they wanna throw money around, I’m gonna pitch this thing that I would never normally pitch to another network.”

You think that, and then invariably you guess wrong. I mean, at least for me. I’ve already been talking to the Apple guys. The one complicated thing for me about Apple is that Morgan Wandell, who was the head of drama at Amazon, is now at Apple running international, and his assistant is my daughter. So there was one weekend where she had these scripts that Noah Wyle and I had written when we were doing something for Sony, trying to get this miniseries off the ground … we wrote it for FX. FX passed, now we’re having Apple read it, and my daughter says it’s on her weekend read pile. And I said, “Clementine, you have to recuse yourself, because if you like it that’s great, but if you don’t like it, I don’t wanna hear that.” So that’s part of my story.

That’s the nepotism downside.

We’ll take one more quick break, come right back.



And we’re back. It’s still cold outside, it’s nice inside. Can we just talk a bit about how you got into the business?


Because you came from … not nepotism, but your dad was in entertainment, right?

Yeah, not nepotism. I was hoping for nepotism, that didn’t work out. But certainly an example, and yeah.

What did he do?

My dad ran a show in Toronto for 25 years called “Saturday Night at the Movies,” and it was on the Canadian equivalent of PBS, it was providential, it was TV Ontario. He’d show a couple movies on Saturday night and in between the movies he’d have interviews with people who worked in those movies. Like if he had “The Ox-Bow Incident,” he’d have an interview that he did with Henry Fonda. But he’d also have a panel of people talking about … in the case with “The Ox-Bow Incident,” vigilantism.

That’s a cool show.

It was a great show, and he was just a great fan of movies, he loved movies. People would say, “Oh, your dad never puts on anything he doesn’t like.” And it’s like, “Yeah, because he gets to choose what he puts on.” But every year his producer would make him put on a couple musicals, and he never enjoyed that.

So was your thought, “I wanna do this, I wanna do a version of this”?

Yeah, and he also wrote some children’s adventure books, and my brother and I grew up in a household where we talked about movies and books all the time. We didn’t go to church, our church was the movie theater. The lights going down, we’re now gonna watch stories that are gonna entertain us and identify us and that was our life. It was fantastic.

And so my dad also … he’s the one who back in the early ’80s would talk to me and say, “You know, I heard about this Kurosawa script about a train that can’t slow down or it’ll blow up.” And he said, “I always thought it was a good idea.” Eventually it was made and it was “Runaway Train,” but it wasn’t that they can’t … that it’s gonna blow up, they just can’t get to the brakes. I came outta that and I thought, “Man, it’d be better if that was a bus.”

Thanks, Dad.

And thanks, Dad. Exactly. Thanks, Dad. Thanks to Kurosawa.

Before you wrote “Speed,” you were making TV.

I worked for Nickelodeon.

Was the thought, “I’m gonna graduate from TV and into movies and then never look back at TV”? Or …

That wasn’t the thought, but that was part of a sort of ethos or whatever, a sort of zeitgeist of Hollywood writers at that time. I worked on “Full House” for nine-and-a-half weeks and I quit four days before I thought I was gonna be fired. I’ve since found out they weren’t gonna fire me, I was just miserable there. Two days after I quit, “Speed” sold.

So then “Speed” came out and years go by, I’m on the lot, I go to visit the “Full House” writers room to say hi, a bunch of the writers were still there, and they look at me like the guy who graduated from Triple A ball off to go play in The Show, that I’ve gone up to the major leagues. They’re like, “How is it up there?” Another 10 years, 15 years go by and now I see fellow feature writers and they’re saying, “How do I get into TV?” And so the whole paradigm has shifted in the past 20 years.

Why do you think Netflix — and Amazon’s played around a bit with it as well — has not been as successful making movies as they have with TV shows. Is there something different about the process that hasn’t translated?

Maybe. I think it’s also that no one is successful at making movies. It’s really hard to make movies that work. No one is successful in television, except for the few shows that are. I mean, yes, there are, what, 500 scripted shows or whatever it is.

We talk about a couple dozen of them.

We talk about a couple dozen, and it’s really hard to make it work. You gotta thank your lucky stars if things align. It’s usually a sensibility of story and cast, and support of the network. I think that’s why … I quote unquote have been lucky, as my luck has been getting associated with things that have all these things that have come together.

I have this theory. There’s something about the episodic nature of streaming TV that just works better, and/or keeps propelling you into the next episode, like we were talking about, and in a movie, if it doesn’t work, it doesn’t work. And you’re not giving it another chance. No one wants to really engage me in that theory, but that’s …

I know, I think that’s a good theory.

Good. I have an upvote from Graham Yost.

Yeah, and the … Listen, the thing about the modern TV landscape is the ability to tell a story over 10 episodes. You can do a novel. That’s really fun. To tell a story in two hours, it’s got to be a very particular story, and you really … so many things can go wrong and then you’ve lost it in the first five minutes and you’re never getting it back.

Can we talk about “Justified” briefly? Because I’m just a giant fanboy, because I love Elmore Leonard. Elmore Leonard has made amazing books, should have made many amazing movies, less successful than you would think, right? A handful of really great Elmore Leonard movies, and then …

I could tell you his favorites.


And his least favorites.

That’s gotta be “Out of Sight,” right?

No, his favorite was “Jackie Brown.”

Oh, okay, also one of the greats.

But, his favorite I think working relationship or just palling around was with Scott Frank, who wrote “Get Shorty” and “Out of Sight.”

Who we’ve had on this podcast.

Scott Frank is a great writer and a really great guy, and Elmore loved him.

And you nailed the Elmore Leonard tone and vibe in your show.

And I said, “I’m gonna write ‘Justified’ just like Scott Frank wrote ‘Out of Sight’ and ‘Get Shorty,’” which is let Elmore be Elmore. Use as much of him as you can. The dialogue in “Get Shorty” and in “Out of Sight” is Elmore Leonard’s dialogue, even if it’s Scott doing it. It’s Elmore.

It’s like when I did the pilot of “Justified,” it’s an old story, but I would say, “What’s Raylan gonna say next?” And I would say, “Well, what does Elmore have him say next?” And I would retype it. Second episode on, we had to figure out how to do that. That was the challenge.

Elmore was alive when you started that show, did you have to …

He was alive for the first four seasons.

So were you talking to him throughout. Were you asking for script …

No. I’ll tell you what happened though. So first season, he visited the set and Tim was sitting with him and said, “Why don’t you write another Raylan short story?” And he said, “Okay.” And he went off and he wrote a story and he enjoyed it so much he wrote two more, and he packaged them together as a novel, and that was his final novel.

His 45th Raylan, and the coolest thing, the best thing that has happened to me in this business is that it’s dedicated to Tim and me. That’s something that … Tim and I look at each other and all the tussles we had over the years with “Justified,” because Tim is an incredibly creative person and we didn’t always see eye to eye.

Tim Olyphant.

Tim Olyphant. And we look at each other and say, “We’ve got that, that he dedicated this to us.” So Elmore loved the show, he got a real kick out of it. But he was always the inspiration. One of the “Justified” stories is I had rubber bracelets for the writers saying WWED, What Would Elmore Do?

Frankly, I’m gonna take that hopefully for the rest of my writing career. Because even if it’s not like Elmore Leonard, he had certain rules and goals about character and story and how you do things that I think really apply to anything I’m gonna do.

I’m really lucky because I get to do a podcast where we’re talking about Elmore Leonard a lot. Scott Frank said, I said something to the effect of, “Seems like you just took ‘Out of Sight’ and put it on the screen, you just lifted the pages.” He said, “No, no, no, it’s actually much harder than that, there’s a lot of stuff in the book that actually becomes harder to film, and you’ve gotta do a lot more work than just taking the dialogue.” But that dialogue is a great start. Why do you think other folks have struggled with his books?

Sometimes they just take it for the story, they don’t realize that Elmore isn’t about the story, the story is secondary or tertiary. It’s really, it’s character.

It’s kind of the hang, right?

That was the thing about FX. So for “Justified,” John Landgraf had worked on Karen Sisco, he actually co-wrote a script on Karen Sisco, the ill-fated ABC show. Michael Dinner had directed the pilot of Karen Sisco, Sarah Timberman at the Universal when one of the presidents, when they did Karen. So we were all Elmore fans, and I knew that John at FX would let us hang. Hang with the bad guys, hang with the good guys and just have a scene, whereas Tim used to put it, the best Elmore scenes, someone’s gonna get fucked or someone’s gonna get fucked. You know, it’s gonna be, it’s gonna go sexy or it’s gonna go violent and you don’t know, and it’s gonna go funny and it’s gonna go sad, and you just don’t know. That was really fun to work in that world.

A great hero, Tim Olyphant, he had a great bad guy …

You know, he was the role that Tim was meant to play, because he’s funny, sexy, charming, dangerous, all those things, he could do that. Then we got Walton, then we got Joel and Nick.

Which season did Margo Martindale …

That was the second season.

Second season. And, which and if you haven’t watched the show, watch it all, but go watch the second season. Because I’d never seen her before and she just one of the great all-time villains.


Did you find her? How did … where did she come from?

I said to FX, I wanna do a criminal matriarch for this season, I want it to be about a feud. They were concerned about a criminal matriarch and she’d be bad … we used to call badassery, we’re always looking for who’s a badass. So we figured that she had to kill someone in the opening episode and we thought shooting, no, knife, no, poison. So we came up with that idea, built it back into her back story and did all of that, wrote it and then casting — Cami Patton and Christal Karge were doing our casting — and they sent over the clips to look at on a computer and they said, “We think Margo is the one.”

I watched it and there was some … Adam Arkin was directing, he wasn’t sure, he was thinking maybe it was someone else. But then we picked Margo. Then one day Adam Arkin was over, he was editing and he said to Sarah Timberman, Fred Golan and myself, “I wanna show you something,” and he took us upstairs and he showed us the final scene of the first episode, where Margo … not the final scene but where she poisons poor Chris Mulkey, and we looked at each other after that and said, “Well, we got a season.”

You know, we knew, and another thing about that first episode was Kaitlyn Dever who was playing the kid, we were thinking if she wasn’t good, then we’d have her in the first episode and the last episode. But she was so good that we came up with this whole different thing and the two of them together. Margo will still talk about Kaitlyn and what an amazing actor she is.

Margo Martindale is in “The Americans” and now she’s in “Sneaky Pete.” Not a coincidence.

Not a coincidence. Now when the part of Claudia came up in “The Americans,” Joe and Joel were concerned about casting someone who’s so identified with “Justified,” and Landgraf said, “That’s part of the FX thing, we love to cross pollinate,” put Walton on “Sons of Anarchy” as Venus Van Damme, you know. That’s a cool thing to do for FX.

You like having a crew?

Yeah, the sense of this FX repertory company, so yeah. I think I was the one who got to call her and tell her, “Do you wanna be a spy?”

That’s pretty cool. Well, thank you for putting her on TV. Oh man, she’s great.

She had a great career before, but it’s just been so much fun to get to know her and hang with her.

Thanks for your time. This is great. I love talking to smart people about their cool shows. So you can watch the entire run of “Sneaky Pete” right on Amazon Prime. There, there’s your promotion.

There you go, and free two-day shipping.

Thanks, Graham Yost.

Thanks, man.

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