When I gave that talk, and you know, I spent 25 years in Silicon Valley, it was titled 2,851. And I used that title because I had a punchline at the end where I said, 'The reason Silicon Valley works so well is because it's so far away from Washington, D.C.' And that was the distance in miles. But since I gave that talk, I'd say Silicon Valley's gotten more rooted in Washington, D.C. than it ever has before. So, there's a certain irony to that.
Do you read regulatory capture as corruption?
I think it can be both sides of the coin. I mean, you can look at what the crypto world did in getting Trump elected, and you can look at stable coins, and you could say, you know, I can move money via stable coin right now in seconds for pennies anywhere around the globe. And you can't do that through a bank. You can't do that through a traditional financial institution. They don't do it for that price. They delay it, and they charge you way more money.
And you could say, 'Well, they're trying to change things.' Like now, if they were to change things and win, I suspect over time they would start doing the exact same things, you know, once they had those relationships. So, I'm... And the other big thing that's causing this right now is venture capitalists have gotten into military equipment, which is nothing I know anything about. But rest assured, without relationships, they wouldn't have been able to do that because the McDonnell Douglases of the world would have used regulatory capture to cut them off. So, it was probably imperative that they have those relationships to bring disruption to those fields and to fight back against it.
But if they have it long enough, they'll certainly use it against the next guy. And by the way, this is I think this is playing out in real time in AI. I mean, there are many people, including David Sacks, that think Dario and the team at Anthropic, there's Anthropic's lobbying the only company that has lobbied as much as Anthropic early in its life was FTX and SBF. Like he also lobbied heavily. But they have people on the ground in every state. They're the ones pushing for state-by-state regulation. And at the end of that talk I gave, I said I was worried that the AI people were begging for regulation to pull up the ladder. We'll see what happens. Like I'm more fearful that that's their motive than anything else.
All right, you stopped short of saying yes or no for that matter to its corruption. So, I have a growing thesis.
Oh, I'm sure they don't view it as corruption. Although, you know, to the extent that you're in, you know, yeah. I don't think any of them think it's corruption. I think they're just playing the game on the field. But the problem is, you know, I was really enamored and I'm kind of excited about stablecoins because I've just been so pissed off at the US financial system for not embracing what I would call instant digital transfer. So, every one of the seven other largest countries in the globe had the government fixed instant digital transfer a long time ago. In the UK, it's called faster payments. You can go straight to Wikipedia and read about UK faster payments. They put it in 20 years ago. And you can move money instantly for almost nothing. And in the US, you know, ACH three-day settlement. What the hell are we doing? It's 2026. And in China, and Australia, and recently there's something in Argentina called I think Brix. They just pushed this through like six years ago. So, here's a country that everyone would admit is behind us from an innovation standpoint, who just did this thing that the UK did 20 years ago, and you can go look at it. And we still can't do it because the banks fight it, you know. There's a program called FedNow that's supposed to do this that's on the slowest roll you can possibly imagine. And when they would talk about FedNow in front of the Financial Committee, I would turn on what is it, C-SPAN or whatever, and I would watch. And I would see the congressmen and senators that would be anti-FedNow, and I would immediately go on to that website that lists who their donors are. And you'd see large banks. Boom, boom, boom, boom, boom. You know. And so, the problem is I mean, I'm a big believer that Citizens United was a bad thing. Like these super PACs, like anything that allows more influence. And there's another crazy thing that I learned in the Tropos situation is your senator and your congressman, the minute they get on committees, they start raising money outside of your geographic area. That should just be I think it should be illegal, but it certainly just send off an immediate alarm. Like we live in a day and age of blockchain. Like if you raise money from a campaign contribution from someone in California and you're a Tennessee congressman, like that should just be instantly like, what the hell are you doing? Like that's not your constituency, right? It's not. So, and there may be things to do there, like to create more awareness of those things, you know.
Okay, so you're somebody that thinks through how we start untangling some of these things. One of the things that I found really interesting that you mentioned earlier is what they do in China to create competition. The analogous situation here would be interstate competition. Do you think that's a potential solve or it's like, yeah, if you want to do stupid decisions, you go do your stupid no free Wi-Fi for you decision, but we're going to do free Wi-Fi. Is that a way that we could start?
It can be. I think it can be and I've recently become aware of a professor at Harvard, Thomas Kane, who I'm just learning about, who's trying to analyze different policies in K through 12 and amplify the ones that are working better. That's something I'm excited about with the policy institute. People have asked me, a lot of people have asked me about the proposal in California for a wealth tax and my opinion on it is, okay, they can try it. Like let's see what happens. Like let's run a bunch of experiments. I've been told and I'm still learning on this that James Madison thought about this in the Federalist papers, that he said, people can move. We have a federal system where there's federal laws and state laws. Let's run a bunch of experiments and see what works. And I think people migrating is a great pointer to people are migrating towards probably towards good policy, right? Like I'm sitting in Austin. It's super hard for a lot of people to understand and we should talk about it as loud as we possibly can. One of the fastest growing cities in the nation, rents have fallen for four years. That's good policy. Like half of the country is up in arms because they say they have a housing crisis and housing's too expensive. Just come look at what's happening right here. Just study it. Like it's solvable. Like and it's all a bunch of NIMBY build policy that they push through. Like they actually changed the policy. And that led to more building and that led to rents falling. Like zoning policy, building policy. Like it is happening. It's like really happening. You can see it. There's a solution to this problem and the states that have the problem and cry about it don't do what Austin's doing. They do a lot of other things that's bad policy and this is Yes, I think state versus state competition is a super interesting construct. And I think I can do a good job of hopefully working with others and academicians of finding good policy and finding bad policy and shining a light on both. We can just make it positive. I'm fine with that. Austin has a solution to housing prices positive. Everyone should study it.
And by the way, Houston's done something really similar in homelessness. And there articles you can go find on that. Houston's had a number of policies and they've reduced their homeless population by 2/3. Go study that. Go talk about that.
Now, given that we have big wins like that, whether it's housing or homelessness, and yet they don't matriculate out to the other states, is that politicians suck at creating financial models? Is it that they're just too good at storytelling? Like is it that they get federal dollars and so they can paper over problems? Like why doesn't that competition work in America in the way that it does in China?
Some of it comes back to that Milton Friedman quote I had. I think people elect politicians based on what they think their intentions are versus what they're actually capable of doing.
Do you think we can change that? Can we get you to pay attention?
I don't know. I'm going to try. You know, I think shining a light on these policies that work is worth to go. Like you know, similar to the nuclear thing that I mentioned. I think if we talk about it more and people that are good at communicating can highlight it more. Like no one should be able to have a discussion in a city that has a problem with housing prices and not be able to respond to a question about well, what are they doing in Austin? Like that just shouldn't happen. It may take people like you, Tom. I mean, it's not clear to me and I don't want to like go deep into this, but it's not clear to me that the mainstream media is as interested in uncovering this stuff as they used to be. Like and they used to be quite interested in it, you know. Although to be fair on the Austin rent thing, you'll find plenty of articles. Like if you just go do a search, there are plenty of people talking about it. But I think you can get more people talking about it. Like we are right now. Like I think it's possible.
