← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
Hasan Piker x Tom Bilyeu: Why Gen Z Is Turning to Socialism - The Battle Over Banking, Inflation & the American Dream PT 1
00:47:52
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- [00:00]
A
When you manage procurement for multiple facilities, every order matters. But when it's for a hospital system, they matter even more. Grainger gets it and knows there's no time for managing multiple suppliers and no room for shipping delays. That's why Grainger offers millions of products in fast, dependable delivery so you can keep your facility stocked, safe and running smoothly. Call 1-800-GRAINGER Click grainger.com or just stop by Granger for the ones who get it done. When you manage procurement for multiple facilities, every order matters. But when it's for a hospital system, they matter even more. Grainger gets it and knows there's no time for managing multiple suppliers and no room for shipping delays. That's why Grainger offers millions of products in fast, dependable delivery so you can keep your facility stocked, safe and running smoothly. Call 1-800-GRAINGER Click grainger.com or just stop by Grainger for the ones who get it done.
- [01:00]
B
Since 2008, the US has recklessly quadrupled the money supply. And the result is not just inflation, it's an entire generation getting battered by the financial system. Today's guest, Hasan Piker, is one of the biggest voices on the American left. He believes capitalism has failed young people, that greedy corporations and corrupt politicians are strangling their opportunities, and that government intervention is the only way to fix it. I see the root cause and thus the solution set very differently. And that's exactly why I wanted this conversation. In this episode, we go head to head on the real mechanics behind wealth inequality. Why housing has become the make or break asset for the middle class, and whether socialism can actually deliver positive change in the messy reality of modern economics. Without further ado, I bring you Hasan Piker. Why do you think so many young people are turning towards socialism?
- [02:00]
C
That's the first question you got out
- [02:01]
B
of the gate, man.
- [02:02]
C
Yeah, I mean, I think it's pretty obvious. It's because capitalism is failing them. It's failing everybody. Not you and me. It's not failing either of us. We've done quite well for ourselves. But it has been a spectacular failure for the average person. And therefore, people are understandably looking for alternatives. And young people in particular, especially those who are just coming out of college or they're just going into college. They look at the opportunities that they have, or rather they don't have, and they realize that the future is grim. So they look for an alternative that at the very least chooses to identify the problem and also solve it. Material inequalities, cost of living, crisis, not being able to Ever own a home. These are very real problems facing younger generations. And of course they look to an alternative organization of the economy as, as one that is probably the best way to go forward.
- [03:05]
B
So I'm always trying to map things in terms of where do I want to end up and then what are the mechanistic steps that can lead you there. So if you were to say, what is the way from the mechanisms that capitalism has failed people, what are the features of the machine that makes it a sort of by nature flawed system at its base?
- [03:26]
C
At its core, it is this inherent contradiction, right? If you are someone who's working, someone who's a wage laborer, and I'm sure you've worked at regular job in your, in your past as well, Most people want to work the least amount of time for the most amount of pay, right? And that doesn't mean like they're greedy or anything. It's just human nature. You want to work as little as you possibly can and get paid as much as you can for that job. On the other side, you have your, your people that own the businesses that want to obviously pay you the least amount that they can possibly pay you for the most amount of time to get you to work. So these, these two things when broken down, Karl Marx says is the inherent contradiction of class. You have the wage laborers on the one side and you have the bosses on the other side or those who work for your capital owners on the other side. And that is the reason why there is so much tremendous wealth inequality, at least according to Karl Marx. I happen to agree with this hold
- [04:28]
B
on that, that I would get why. So you set that up as one side wants to work as little as possible, get paid as much as possible. The other side wants to pay as little as possible and get as much work as possible. But that doesn't, to me, explain the inequality because I think you and I are going to agree that wealth inequality is at a level that is literally tragic, and I'll use the word dangerous, do you see an insufficiency in explaining why we have inequality and we need to push deeper, or do you really think that that mere human tendency for those positions to be the way they are explains wealth inequality.
- [05:02]
C
The very fact that because the one side that wants to make sure that you work the most amount of hours for the least amount of pay is the side that gets to basically take home what we know as profits, which is what Marcus describes as the, the, the surplus labor, your additional output, like what you do and how much money you generate for the company versus how much money the company pays you back in return. That creates a system of wealth inequality that is normalized. It's understandable. It's like we call it profit. We're like, this is my business. I started it. I got lucky, or I worked really hard, and I get to reap the rewards of it. You don't. You're the worker. It makes sense. A lot of people buy into it. A lot of people like this system. But I think over time, that system fundamentally creates this inefficiency, as a matter of fact, where every industry wants to inevitably monopolize. Every industry wants horizontal and vertical expansion so they can be the domineering force in the market, set prices, and just like we see with Amazon, for example, start engaging in the process of. Of increasing the prices that they initially had said so low. And that is how they justified basically eating up so many different competitors in the same sector. And I think we're at that point, this corporate consolidation that has taken place has created a system where there's only a couple companies. They get to dictate prices through not price fixing, which is illegal, but through parse leadership. Right. Which is very legal. Someone does this and then everybody else follows suit. That becomes much easier with the corporate consolidation that we're seeing. And that is precisely, I think, the reason why the system is like collapsing right now in a way that even someone like yourself, who in other circumstances, I feel would be very defensive of these structures, is recognizing it. I have a couple friends who used to work for a libertarian think tank called Reason magazine. And I remember having conversations with them where they would do these fundraisers, and apparently the rich people that funded the reason libertarian think tank would call welfare riot tax. So they even understood that there was a.
- [07:27]
B
There was a level we paid to avoid riots.
- [07:30]
C
There's a level of, like, giving back that people need to do in order to make sure that people aren't so. So hungry that they recognize that they're being starved. Okay, that's falling apart is what I'm saying.
- [07:44]
B
Yeah, it's interesting. So I have a very different take on the fundamental flaw in the system that's creating the problem. But it's not capitalism per se, it's banking. And so when you start looking at. So you mentioned earlier.
- [08:00]
C
I agree.
- [08:01]
B
Yeah. The thing is, like, I really. It'll be interesting to see it play out in this conversation, but I really feel like anybody who's looking at the mechanistic reasons why we are where we are will just have a hard Time saying, oh yeah, yeah, we agree on all of that. And so it just then becomes, as we build out, I think people break into camp one of, I'm going to speak to the way that people feel and I'm going to give them policy prescriptions that are going to feel right. And then other people, or maybe I'll just put myself in it, just to not speak for other people. For myself, I'm just like, what are the physics of the economy and how do we make sure that we get out of this? You say it's called a riot tax. I'll say I don't want my head separated from my body French Revolution style. And that is absolutely what ends up happening. And moderate elites die first. And as a moderate elite, I'm not super excited about that. Also, as somebody who's spent more time without money than I have with money, it's still all very familiar to me exactly what that feels like. So I look at the setup and I trigger off of something that you said earlier, clear, which is people can't afford houses. And so my whole philosophy is very simple. In 1913, the Federal Reserve System created a situation where bailing out banks became the goal. And so now you have a financial system where they're trying to socialize losses and privatize gains. So basically, bankers from the act in 1913 got put in a position where heads they win and tails we all lose. And the way that they pull that off is money printing. And so because they can print money and money printing is a tax, it's the easiest way to think about it, although I will often refer to it as theft. But they can money print and create a tax that hits everybody. And so that way they can fund all the deficit spending, all the wars that they want, they can just fund, fund, fund.
- [09:51]
C
But you got like a reverse MMT opinion on this where you're like, money is fake, it's printed. That's how you control, that's how the American government controls the money supply, which is understandable. And then taxing is just like taking the existing money supply out of the, out of the circulation at the end of the year.
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B
Right? Well, I would say this is modern monetary theory. Like this is the goal.
- [10:15]
C
So.
- [10:16]
B
So if you're saying it's anti in terms of I'm just staunchly against it, it would get you close, but not quite so. I think every system has a trade off. Modern monetary theory allows for really high velocity of money. Once you get into high velocity of money, hey, like when I say you need to look at the world that you have and the system that you have. So the modern monetary theory gives us this world. It's a pretty great world. It has problems and it's going increasingly in the wrong direction, but it has created some incredible stuff. And so we have to figure out where exactly it breaks. And I think it breaks where you said, which is housing. Once housing becomes unaffordable, the reason you have a problem is housing is the only asset that the average person understands intuitively. The vast majority of humans are never going to map how the economy actually works. So they just know, I want to live in a house, I want to buy a house. And when they can buy a house, then this all works out fine. Because even though we're in a high inflation environment where the government can print as much money as they want, the price of your house goes up with inflation. And the second that you can't afford that house now the only asset that you understand intuitively goes out of reach. And then all that's left is the stock market. And the vast majority of humans don't understand the stock market.
- [11:29]
C
You brought up some interesting points, and I think I broadly agree, at least with the outlines. I would say that as far as like banking, insurance goes, I obviously don't have a problem with that. But what I do have a problem with.
- [11:43]
B
Are you talking about fdic?
- [11:44]
C
Yeah, I'm talking about fdic. So what I have a problem with is, is actually how consistently this government rewards failure. Or as a matter of fact, it's not even a rewarding of a failure system. It's more so that the expectation is that, yeah, these guys, like you said, are going to be playing with your money, right? Your taxes, your money. They know it, they, they demand it. And if they don't get it, they get mad. Right? They expect it. I think we see it consistently, like with bailouts or things that happen with, like during COVID for example, where companies get bailed out. It's understandable, especially if they' profoundly important to the logistics, the supply chain, like the commercial airliners. Right, but then you have this, this structure where, and I thought this is what you meant when you said I, I have an issue with banking because I do as well. We have a structure where like everything is turned into a bank, where the, the once incredibly important institutions that, that developed like the best new technology, like Boeing, for example. Right. Are now just a bank. And what I mean by that is they are way more predisposed with crunching numbers and ensuring that there is some corner Cutting, but like ensuring that the shareholder value is going up at all costs. And I think that actually yields worse and worse products year over year. You start seeing these issues with Boeing products in general, where doors are flying off or whatever. That's because they've, they have outsourced big parts of their manufacturing to low cost alternatives. And in the process they're actually, they're actually taking away some of the most important parts of the airline industry, which is to ensure that there's always redundancies, like numerous points of failure. The big problem here is that Boeing has went from being a company that develops things, makes planes or even space shuttles and satellites and whatnot, to a company that is just a bank. It's become a bank that can point to some of the stuff that they make to I guess have some, some kind of assets, have some kind of leverage. But ultimately they're just playing with money.
- [13:52]
B
Taking a short break. But there's more impact theory after. Stay tuned. Thanks for staying tuned. Now let's get back to it. It's interesting. So you're pointing out a flaw that I would say is actually more of a cultural flaw. And I think that calling them bank is probably going to diffuse the animosity that should be aimed at actual banks. But to address the point directly, and then I'll get back to what I see as the mechanistic side. So if you see a flaw in my thinking, we can parse through that. But the cultural change that's happened is we have taken this idea of a fiduciary responsibility to like some absurd extreme where we're no longer being sensible about, okay, what are the impacts, for instance, of the safety of a plane? We know that some of these industries, they are so hard to get into, there's such a barrier to entry that starting up your own plane company is basically not going to happen. And so there's going to be a very limited number of people. And so the level of innovation has declined, decline, declined. And so when you look at innovation in aerospace, it was like 66 years between the Wright brothers realizing that we could fly and then landing on the moon. And now until Elon Musk comes along, there's basically no innovation whatsoever. It's pretty wild. So that, that's one problem. So if culturally we could get people behind the idea of we want there to be more competition there, what do we have to do to facilitate that, that within the company that you know that there's just certain things that you don't do and you predicate your company on safety or innovation or whatever. But you certainly don't predicate it to your point of just like optimizing every single penny but going back to the banks. I think this is such a catastrophic problem. And the beef that I have with people that are turning towards socialism and the reason that I think that that be absolutely disastrous for assuming that we want to get to the same place is that mechanistically it doesn't yield the economic outcomes that people want where people actually can thrive. They can buy a home if they can outperform, if they can build something that the world wants, that they can change their station, that we have economic mobility. And that comes down to the way that the, the banking system and money printing is structured such that the banks can't lose. They can make every ridiculous loan they want to. There's no discipline forced upon them. And so it ends up creating a situation where you make a home impossible to purchase really through two things. One, the banking that we've talked about so far and then globalization by making it impossible for laborers to actually have a voice.
- [16:38]
C
Yeah, I mean like I said, I don't disagree with you. I just expand further on it and describe the system that we're existing under as like. Or. Banking is a profoundly important aspect of this. Again, Marx did write extensively about the financialization of the economy or the global financial market structure and how different that was. As opposed to a new way to approach the inequities within the system. A different way to approach the built in inequalities within the system. Because these are like, at the end of the day it's like this is not my term for it, but it's like, it's like a faceless, lifeless bourgeois class that never actually ends up going to the factory floor. Right. Like they have no, they have, they have no say. They have all the say in how the product gets made or, or corner cutting and things of that nature. But like they have no understanding of the, of the way that these, these things are being produced. Right. They can just own things and they make money through owning things. So I think that's like the fundamental problem that he identifies.
- [17:52]
B
You're saying that when you're the owning class and you are disconnected from the hands on building.
- [17:58]
C
Yeah.
- [18:00]
B
That, that breaks something in the. Certainly your relationship to the labor. I'm putting words in your mouth now, so please definitely tell me if I'm reading this wrong, but it would break your understanding of them as like humans that deserve dignity. And so making sure that they're paid well and they're treated well. But it also makes you optimize the actual product in a way that's nonsensical.
- [18:20]
C
Yeah, because optimization. I was listening to how Toyota was able to like restructure at a time when they were at the, on the verge of bankruptcies post World War II. They, they have this like industrial base. They're using it to, for car manufacturing. And a certain point like I think there was these two guys, one's last name is Toyota, I forget the other one's last name. But they like come to America, they look at the Ford assembly line and they're like shocked by how well it works. But then they go to this like grocery store, I guess, and then they find out that in that process there's like, there's, there is so much input that you could rely on for from every point of the assembly process. So in the Toyota factories they decide to put this like yellow line where any person, any human being on the assembly line can actually stop the process at any point. Because human beings are much easier, especially doing this route task where they're like constantly doing the same thing over and over again. They're much more tuned in to minor changes or minor issues so that they don't have to rely on like the assembly line continuing no matter what with like a failed build out that they figure out later down the line and then they have to suffer financial consequences and do like a recall, you don't have to do recall or whatever. And I think that that kind of impact or that kind of feedback is profoundly important because the person that that is their hands on the product is always going to be more knowledgeable than the person that's making decisions by simply crunching numbers or simply looking at how to maximize the efficiency.
- [20:01]
B
I would agree with that in the abstract. But I know, I'm presuming that people that lean socialist hate Elon Musk. And Elon Musk sleeps on the floor of his facilities, understands the engineering of the facilities probably better than anybody on the floor because he's done it at all of his different companies. If I had to make a bet on who would be the best person to build any manufacturing facility, and I mean in the world, I would bank on Elon Musk just given the number of industries that he's done this across. Now it's possible that he's just spinning pr, but Samsung has invited him to come and walk the floor because they're going to be making chips for Tesla and they want him to help improve their output. So it, it. But I know that that doesn't solve a lot of the problems that people are rightly angry about in terms of the wealth inequality. I teach entrepreneurship, and I will often tell entrepreneurs, one of the biggest problems you're up against is emotions are going to make dots feel like they connect that don't actually connect. And as soon as you try to turn that into policy prescriptive like, go do this. It won't work because it's not actually rooted at the level of physics. And so when you look at, like, what's breaking down with wealth inequality, that to me, again, we're just right back at money printing. So once people understand there's a difference between income and wealth inequality, wealth are assets, it's potential income, but it's not real income. And so right now, the top 10% Americans own 95% of the assets. I mean, it's just absolutely staggering. So you've got people, they understand the game of assets, they're scooping them all up and. And then you've got basically everybody else that the only asset they understand intuitively is a home. And from money printing, we've made that impossible. But the, the value of a company, which are the assets, the stocks, they go up with two things. Innovation. So people care about it in the marketplace. So Tesla is doing something different and better. And so people are like, I expect that to be worth more in the future. That's the bet they're placing.
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C
No, I know. I think.
- [22:11]
B
And then hold on really fast. And then the second thing is money printing, because money printing creates the illusion as you devalue the dollar, it creates the illusion that the stock is going up in price.
- [22:23]
C
I would agree that innovation is supposed to be like the, the primary way that your, your stock is valued and your stock goes up, like the valuation of your stock goes up. But I feel like that's not. I don't think that that is necessarily the case any longer. I feel like the market is so reliant on constant being in a constant state of, of bullishness that even when
- [22:54]
B
you see lives that. Because I agree, but I think it's different reasons.
- [22:57]
C
I think it's partially because money is fake. And we've just decided, like, oh, it doesn't matter. If Donald Trump decides to slap 150% tariffs on, like, all incoming goods, you'll have a week of instability and then ultimately he'll turn around and say, actually the tariffs are gone. And then the market will rally again and will inevitably recover back to the point that it was At. And then he will turn around and say tariffs again. And after the 10th time he's done this, after months and months and months, you start noticing that these companies are like, okay, maybe it's not that significant, maybe it's not that impactful. Maybe we can actually eat some of these costs. And that's the reason why you haven't seen the hyperinflation that was slated to come if companies were supposed to respond in the way that the, the market is normally supposed to respond to immediate tariffs like this, like broad universal tariffs like this. So I've, and as far as like innovation goes, as far as Elon goes, I'm not a fan of Elon. He's not a fan of mine. He's, he's cursed me out on his, on his platform in the past. But I will say
- [24:07]
B
the.
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C
You brought up innovation in the first 66 years, going from the Wright brothers all the way to landing on the moon, right? And you said before Elon, we had no innovation in the space traveling sector. And there's some truth to that, but I think that's an, that is an inefficiency of the government because the first 66 years, big leaps were made by the government by publicly funded research by NASA and it was always in a state of disrepair because it turned into political football. The only reason why we even went to the moon was because we wanted to flex on the USSR who had actually beaten us to space. Right? And, and therefore there was funding in the program. But as the Cold War took a turn and we decided that this was no longer as important, NASA funding was always on the docket for to be cut, right. Instead of something that we focused on for the sake of advancing mankind. And my point always has been we shouldn't rely on, we shouldn't wait for private industry to make up for these issues. We should have especially fields that require innovation and requires failure, requires big technological leaps, like figuring out the Internet, like inventing the Internet or inventing space travel, things of that nature, like that should be still heavily funded by the government, heavily subsidized by the government, and even controlled by the government. I have no issue with this. A lot of people, especially in America, get worried when they, when they hear me say this kind of stuff. Same with housing. You can do major public housing initiatives and just completely explode the housing market in its entirety. And by that I mean, yeah, sorry, explore the housing market as in like build free or incredibly affordable price adjusted housing that the government owns many countries and many cities that have actually damn near eradicated the issue of homelessness, have done so through public ownership over the land. This is a scary concept for a lot of Americans.
- [26:17]
B
Where are you talking about?
- [26:18]
C
Singapore is a great example as a country. China is another great example.
- [26:21]
B
Singapore specifically privatized.
- [26:24]
C
No, no, but Singapore, Singapore still has like a government land lease program.
- [26:28]
B
Yeah, but if you like, if you really research Lee Kuan Yew, he was, I use this word playfully, not literally, but he was a gangster. Like he said literally, I made sure the communists know I will fight you to the death. He went in and told unions, fucking knock it off, get to work.
- [26:45]
C
But in terms of housing, in terms of like the way that this whole
- [26:48]
B
thing was, I wanted private ownership. People had to know that they were in on the economy because the only way to build an economy on capitalistic principles is to make sure that everybody's in on it. Yeah, like Singapore is an incredible model for people that want a way out, but they often look at that and don't realize that this guy was like Captain Capitalism.
- [27:08]
C
Yeah, I'm not saying this guy was a. Oh no, my. I never said that any of these countries. Well, I guess China, with the exception of China, are like even abiding by the, the principles of socialism or communism. That's not my advocacy at all. The other example I was going to use is, is Austria, which again was led by obviously Red Vienna was led like led by people who are from that background, Marxist, socialist, Communist and whatever. But like Austria as a country is not a communist country and it's not a socialist country. And yet Vienna has I think 65% public housing. And these are fantastic houses. Like it's just owned by the government. And then they have these lease programs. Every country has a different way of doing it. But I think ultimately government intervention of that sort is not something that I disagree with. I don't really care. They don't have to be like communists or socialists or whatever. I just, I want to fix the problem. And I think one of the best ways to do that, or at least one of the most efficient ways that people have done that, is through this kind of intervention or direct control to a certain degree.
- [28:17]
B
This kind of intervention is government owned.
- [28:20]
C
Government owned intervention. Like the land ownership, the land ownership concept goes back to the hands of the government and you can get like, like in China you can get a hundred year lease, right. And the government will always restore your lease. There's no, you know, there's no problem there. But for this very reason, there is a lot more control over focusing on building inventory for future demand rather than holding inventory in the hands of people that want to keep that inventory limited so that their prices are constantly going up. So they're. Because like you said, the only way that their net worth goes up is if this finite supply housing. If you're lucky enough to be able to purchase it or lucky enough to get a mortgage to purchase it, the finance supply of housing stays limited so that it's constantly going up and therefore your leverage is more valuable, your, your nest egg is more valuable. And you understandably have this like, perverse interest in maintaining the housing supply as low as possible. In the inverse of that, if you, if you were to blow up the already limited housing supply and you were to actually explode and build so much housing, specifically government, through government intervention.
- [29:38]
B
Why specifically through government intervention?
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C
Because I don't think that there is ever going to be an unleashing of the markets that will be able to overcome the interests of like real estate developers or even like any. Anyone who owns this kind of inventory.
- [29:53]
B
And Austin have both shown that you can do it privately.
- [29:56]
C
So that's actually a great example of this as well. Austin and Houston, Texas went in and built a lot of housing. But now there's tremendous complications. Obviously Houston in itself is literally on a floodplain, so instead they're cooked regardless.
- [30:14]
B
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- [30:34]
A
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- [31:05]
B
Thanks for sticking around. Let's get right back into the action. But so the fundamental debate is going to be okay, you and I, shockingly, we agree on a lot of the problem, but where, like, we haven't even gotten into the DSA yet, which I have like wild reactions to which we'll get to. Okay, but, um, I'm like, like you, I sincerely want a solution and so then I'm like, okay, well, as an entrepreneur, when you're faced with, I'm either going to be able to make payroll or I'm not, you get pretty realistic really fast. It's not ideological. It's just like, Jesus, how am I going to make sure that everybody's family can go eat? So I take a similar approach to this. So when you look at all the different countries that have tried socialist programs, including the rent controls that we did in the Bronx in the 60s and 70s, which absolutely decimated the Bronx, and the way that you build back, of course, is to release the regulatory requirements, not keep adding them. So it becomes a question of mechanistically what works, government control or regulation? Because when capitalism is left unchecked, you get the Gilded Age. Not good. A total atrocity, dangerous levels of inequality. When you.
- [32:19]
C
We're there now.
- [32:20]
B
Yeah, but for a different reason. And this is the thing, like, I'm always trying to get people to understand. When you try to map what's happening now onto the Gilded Age, you're going to miss that. They're happening for very different reasons. And so if you try to rerun the playbook of how we dealt with the Gilded Age, it won't work here. Because here you have one very simple problem. And that problem is you are money printing. And when you money print, you're stealing from everybody and you're only giving to the wealthy. And so it's like, bro, you just, you can't keep doing that. And so if you're in a situation where you're just going to embrace modern monetary theory, because if I could snap my fingers and get rid of the Fed, that's probably a better place. But as Drew, my producer, keeps assuring me, that's never going to happen. So I'm like, fine, but if you're within that system and you know that you have a high inflationary environment, then you have to act as if you're in a high inflationary environment. And the only way to deal with that is to make sure that people can get into assets. And if you do not make it possible for them to get into assets, you're toast. So then we go, okay, well, if we agree that the house is the one asset that everybody understands intuitively and the stock markets become this big, terrifying gambling machine, then it's like, how do we get people into housing? Is it going to be governmental control? I would say we've tried that. Other countries have tried that. Always a disaster. And they end up even in the Nordic countries They end up reverting to privatization just because of the price signals alone. And so zooming in on Houston and Austin because they ran these what we'll call natural experiments, it has shown us exactly like how you can win at this problem. Now, there's always going to be moments where, okay, this is rough. Like, the prices over Covid in Austin doubled or tripled in like six months. Wild.
- [34:03]
C
Yeah.
- [34:03]
B
And so now people were like, oh my God, like, how am I ever going to afford a home? But then over the next couple of years, the prices normalized because builders were allowed to build. They were fast tracking, they were changing regulations so they could fast track building. So everything normalized. Houston already had that. So in Houston, you can basically build if you want to build. And so housing prices don't go up much and you keep an available supply for people, floodplain or not. And you can argue that this is dumb, they shouldn't build there. But at least the mechanism by which they allow people to build ensures that people have access to reasonably priced homes.
- [34:35]
C
Florida is another example of that as well, where like, they let builders build and the city has exploded. Right. And the timeframe that I lived there, I lived in Florida for the first year of my life in America in 2009. It was like Brickell was non existent virtually. It was just being built at that point. And now it's like so expansive. And I see the advantage of that. Certainly I don't mind the explosion of the housing supply. I want that to happen regardless whether it's private or public. My, my assessment always is, well, the reason why the, the Texas housing market is like, re not rebounding necessarily, but like, kind of. I mean, it's going down in terms of prices is because, like, people are leaving Texas, or at least people are leaving Austin and, and Dallas and Houston, like these places that they initially moved to during COVID I feel like that a big part of that, or at least maybe this is anecdotal, because I see a lot of people who are rich in my immediate group of friends who are streamers who moved to Texas in that time frame and are now like, going, I don't know what to do with this house that I bought. Like, I want to leave, I want to sell it, and they're having a harder time doing so. But, but ultimately, you know, there's, there's more than one way to skin a cat. And for me, I just don't care about. And I'm a homeowner myself. I got canceled for buying a house. People were Very mad at me. They were like, socialism means you can't have an expensive house. What are you talking about? I, I don't mind if the, if the property value goes down. I don't think that homes are a speculative asset. I think they should be treated as shelter, something that is necessary for survival. And, and that is the fundamental disagreement that I have with many other people. And I think that the fact that this is associated with perhaps the only way that people can have some kind of asset, some kind of capital. Homes are the only way that people can have like some kind of upward social mobility is part of the reason why the housing market never changes in the direction where people can afford homes or people can buy homes. And it goes back to what you said earlier. We privatize the gains and we socialize the losses. Homes are. They were not intended as a speculative asset. The GI Bill and all of these numerous other protections that people have implemented in, in terms of homeownership or even the banners that we placed against homeownership or, or mortgages, for example, for black people in the form of redlining have always been, have always been used by the, the bankers to safeguard their investment, which is why a lot of people both look at homes as an investment, but also a shelter and take advantage of the safeguards that exist that were put in place so that people don't lose their homes, but they use that to like, beef up their inventory and, and gamble with other people's money, basically to never lose. It's almost like if we're looking at investments as, as a form of gambling, a little bit smarter than gambling. Obviously there's fundamentals associated with it. Homeownership, what's up sort of.
- [37:49]
B
I get a lot of flack for my take on that, but I get your point. It's. People adhere to.
- [37:55]
C
There is probability different. There are fundamentals in the market for sure. There's fundamentals in the stock, but like there's still probability. Right. You never know something, but you can
- [38:03]
B
make money betting against something, and by betting against it, you influence the market. Blah, blah, blah. There's for sure. I don't want to derail down that rabbit hole, but so one in.
- [38:11]
C
And what I was saying is like buying a house is almost like it's still a speculative asset that you're technically investing into. And, and it has to be. Sure.
- [38:22]
B
It shouldn't be. And I'm saying it has to be.
- [38:24]
C
No, no, but, but my point is it's a speculative asset that's also shelter. So there's so many protections against like losing it. And that I think a lot of people basically take advantage of that, that dual structure that exists for housing. So they make it into a speculative asset that is like impossible for its price to go down pretty much unless there are major market, major market incidents like the 2008 housing market bubble.
- [38:49]
B
Yes, but we have to like figure out why is it that it's so hard for these to go down in value. And the reason it's so hard for them to go down in value is the amount of money that's being printed causes assets to go up. And then to your point earlier, if you have NIMBYism and people are not in my backyard, you're not going to build high density housing. And so the problem, I love high
- [39:10]
C
density housing, of course.
- [39:12]
B
And so it's like this is how you're going to have to drive down the cost of housing and make it affordable. That that's just a reality. So it's, what I'm saying is people need to understand why that's happening. It is not happening because capitalism bad. It is happening because money printing bad. Now money printing trade off is probably the right way to say it. Money printing comes with advantages and it comes with wild disadvantages. And people are not, they are not mapping cause and effect well. And so we're getting into a situation where they don't realize that money printing is the problem. So going to the Democratic Socialist of America, is that what DSA stands for?
- [39:45]
C
That's what DSA stands for.
- [39:46]
B
Going to the dsa, it's like all of the things that they want are going to exacerbate those problems. And so this is where I'm like, hey, even if we can agree, I don't know that I agree with the DSA and where they're trying to end up. So it's probably worth me saying where I want to end up. And if you see yourself as a member of that or not, if you can help us understand what people that want that organization to thrive, what they're aimed at, that would be very useful. What I'm aimed at is people can save money and it's not stolen away from them through the hidden tax of inflation. That people can afford a home because it is an asset, that they understand intuitively that people can make a living wage through market dynamics and that basically you're not stuck in your class. So there's high social mobility. Your future isn't determined by your zip code. I round that to human flourishing. But those are like the specific Things that I'm pointed at now when I look at the dsa, they seem literally at wild odds with that. Wanting to abolish the family, capture the means of production. Like, it gets pretty wild.
- [40:54]
C
The first thing is funny, that's not. Abolishing the family is not a thing that the DSA is predisposed with. Everyone always says that, but they're not.
- [41:02]
B
That's because there's clips I've watched with my own eyes where they say that they had a whole like meeting about it.
- [41:07]
C
I think. I can't speak on the exact clips that you've seen, but there are people with wildly different opinions on things of that nature.
- [41:18]
B
That's fringe even for them.
- [41:21]
C
I would go so far as to say that not only is it fringe, but it's also not a real consequential, policy driven focus of the Democratic Socialist of America. It's not a focus of the DSA at all. Would you advise them against it, abolishing the family? Yes, I. Because it's not even like, like a legitimate point of contention. It's. It's not even worth discussing. I will say it's usually, I think in my experience the way that these things work is like people will have sometimes even like academic conversations in these sorts of settings about like what it means to have a family or like what's the traditional nuclear family or what its impact has looked like in society or whatever. And then someone will basically film like a piece of that conversation of someone being very since but maybe being almost hysterical. Right. And then they'll be like, look, this is so silly. The entire organization is predisposed with this. They're not. Especially when it comes to, to cultural things. Like there is no policy making about, about like family enforcement within the DSA whatsoever.
- [42:26]
B
Okay, so walk me through then because I'm looking at those clips and I am admittedly going, you know, this is crazy. And from a Marxist standpoint of wanting to eliminate the family as an economic unit, which they echo that lang language. It does make me go there. There are dots for them to connect. And I see how if they believe in a Marxist worldview that they end up there. You saw that play out in China. Like people really do enact these policies and it ends up being from where I'm sitting, absolutely.
- [42:54]
C
Do you mean like the one child policy or something?
- [42:56]
B
No, no, I'm talking like Mao's China. Mao's China was the state is going to take care of you. All that matters is the state. You're not there for mom and dad, you are there for the state and if you got to turn on mom and dad so we can beat them to death and you better do it and they would literally beat them to death.
- [43:10]
C
I don't. Cultural revolution was good per se, but I also don't think that it was because like they young people abolished the family unit quite literally and decided to beat on their parents because they were counter revolutionary.
- [43:26]
B
You're not going to get kids to turn in their parents if you don't break that unit. So anyway, if I don't think that's, I'm deranged on that.
- [43:32]
C
I don't think that's what the DSA wants.
- [43:34]
B
So map out for me. My initial question is hey, a lot of people are turning towards socialism. You're saying that's self evident. And I'm saying these are the things that I believe about the socialist movement. And you're saying no, no, no, you're family stuff is.
- [43:46]
C
The family stuff is utterly irrelevant. And also these guys, there are so many different variants of how to implement socialism that exists under one umbrella where they're broadly, I would say anti capitalist. But even then there's still people who are social democrats, for example, not even democratic socialists that play a role in this movement that just want like some kind of regulation over the, the most insane aspects of, of endless greed backed capitalism. But things like abolishing the family is not, is not a real point of contention or, or even remotely relevant. I think they care more about like labor union organizing, implementing certain policies like, like Medicare for all labor.
- [44:39]
B
So let's take them one by one. So labor union organization, what's their end goal with that?
- [44:46]
C
They want workers to have more power to collectively bargain directly at their place of business and, and therefore create like a network of pushback against capital owners when, when they implement certain policies.
- [45:00]
B
Now the data shows that union organization is far less impactful on somebody's economic gain than globalization. Globalization where I as an entrepreneur can be like nah, I'm just not going to do this in Michigan, I'm going to go do this in Tokyo or whatever is the thing that erodes their power. So is the, are people that are headed towards socialism, are they like, is that a big bone for them? Where it's like listen, what we care about are worker wages and unions are maybe part of it, but the reality is as long as we're importing cheap labor and we're exporting jobs, workers, blue collar workers for sure are not going to have negotiating power.
- [45:43]
C
Oh no, I, I think this is Something that a lot of people understand. There's, I mean plenty of all labor unions are pretty much trade protectionist. Like that's part of the reason why even the uaw, despite its anti Trump position, was looking at the initial tariffs conversations and saying like, hold on, we're not going to immediately attack Donald Trump for this because on principle this is something that is, if done correctly, could be very helpful to the auto manufacturing business. The automobile industry, of course, given the way that we've designed the automobile industry, especially with like some of the free trade negotiations that we've built with Canada and Mexico that Trump also implemented, even though he came in as an anti NAFTA force initially. They, there is no way to, there's no way to do trade protectionism that doesn't actually eradicate certain sub, certain parts of the manufacturing base in this country and still ultimately be harmful to the uaw. But going back to the DSA or labor unions, you're right, outsourcing, displacing labor is the primary function of capital. They want to displace labor because that is efficient. If you have technological improvements that allow you to, for example, do the work of 10 people now with one person, then what I would say should be done is to make that never fire the nine other employees, but instead make all ten of those employees do a tenth of the work that they have to do, like a 10 to the direct out labor that they have to do when their output remains the same. A boss looks at that situation and goes, oh, that means we can fire nine workers and make one worker do the work of 10. And labor, labor is obviously the most malleable aspect of, of, of commodity production. And therefore it's the one that bosses are constantly looking to depress the wages on or to outsource to the global south where it's a much cheaper alternative. Labor unions play a formative role in ensuring that that transition does not harm the existing domestic manufacturing base of labor to the best of their ability. They either create better exit packages that take away from, you know, CEO pay or whatever that will allow these people to transition into other sectors easier. They, or they retain pensions or ultimately in places where they do exist, where there is continued output at the domestic front, according to the Bureau of Labor Statistics, they labor unions are responsible for increasing people's wages by 10% in areas where they unionize and they even have a capacity to increase wages for the non unionized parts of the same sector in the immediate vicinity because other, other companies look at that as market competition and they have to improve their wages and maybe even offer additional benefits packages in an effort to avoid unionization at their workplaces. So it's, it's profoundly beneficial. And I think like a lot of people look back fondly at the the 60s, right? Or at a time when like America was great, when we had a job, you could do like a blue collar job at a factory and you could own a house and you could raise two children, right? And what they mistake is it was actually the union power and the labor power that people had back then that allowed these, these jobs to exist with the benefits, with the pension.
- [49:21]
B
Okay, this is where we violently disagree. That's it for part one of my conversation with Hasan Piker. You're only halfway through this roller coaster though, so make sure you are following the show wherever you're listening because you are not going to want to miss what comes next next. Until then, my friends, be legendary. Booking a Verbo vacation rental means you
- [49:40]
C
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B
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- [49:45]
A
I just booked my VRBO because there was a sweet wine fridge.
- [49:48]
C
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