1929 vs 2025：Andrew Ross Sorkin 谈崩盘、泡沫与经验教训

Hey, Sorkin. I just went through the comments. The one question that keeps coming up over and over again is:

Why the hell are you writing this book? Jesus Christ. What a party pooper.

What a party pooper. I don't know, man. I don't think the book's supposed to be like a beach read.

A beach read?

Yes.

Come on. Did you read it?

My God, no. I saw the title and was like, “Skip.”

Chamath, you're going to love these characters. I kid you not. The people who were involved in this at that time—the main characters—

I totally agree with you. I am a huge fan, to be honest. I've studied this period for a while, actually. I think it's great that you wrote this book. I think it's incredibly fascinating.

We're here with Andrew Ross Sorkin, Chamath, and me for another All-In interview. Today, we're going to talk about Andrew's new book, 1929, and specifically cover why Andrew got into it, what the history teaches us, and whether we're looking at another 1929 or something different in this day and age, as a lot of people may speculate. Andrew, thanks for joining Chamath and me to talk about this.

Thank you for having me, and I love your background there—a true image of what was actually happening in October of 1929, crazily enough.

That's right. It was colorized by some AI or something, I think. How and why did you get into this era—the Great Stock Market Crash of 1929? You're a busy guy. You're on TV every day. We see you all over the place. You're at conferences. I saw you at a conference in Southern California this week, then you were at another conference, and you're back in New York. You're very busy. At what point did you say, “Hey, I want to sit down and write a book about this era”?

Okay, so here's what happened to me. I wrote that book, Too Big to Fail, about the 2008 financial crisis.

Right?

People would always say to me afterward that they'd get into these very in-depth conversations about 1929, or they'd want to know more about 1929. Most people know that something terrible happened in 1929. They know there was a crash in 1929. They often think of it as the Great Depression, or that it led to the Great Depression. But if you were ever to ask most people now—and Chamath, you and I may be in a different category—who the people were who were actually engaged in this, what they were saying to each other, who was sleeping with whom, who was trying to get over on whom, what was actually happening here, and what the incentives and motivations were that led to what clearly were some poor decisions, I couldn't find that.

So I went on a vacation with my wife about 10 years ago. It was very nerdy. I downloaded all these books onto my Kindle.

There are some great books, by the way, about this period, don't get me wrong, but they didn't have the sort of character-driven story. I loved Den of Thieves. I loved Barbarians at the Gate. I loved stories about people.

Fabulous books. Fabulous books.

What did your wife think when you ignored her the entire vacation and just read books on your Kindle?

I think she thought I was out of my mind. But no, I read these books and was like, “Okay, where's the story? Where are the people?”

Before you get to the people, can you give people a concise—

I was going to ask you for a TikTok of the overarching economic issues before we get to the characters, because I think—

Yeah, because I think what, to your point, which is an important one, people think it was like, okay, stocks went down, right? But the other things—like the overproduction in the economy, tightening interest rates, the war debt—all of this stuff was commingled, and nobody fully understands that. Can you maybe give folks a precise representation of the setup?

The setup. Okay. Let's go back even further—let's go back to 1919—because I think that's a critical year. Prior to 1919 in America, people did not really borrow money. It was considered a moral sin to get credit. People didn't do it.

In 1919, General Motors said, “You know what? We're going to start lending people money so that they can buy a car.” That was a major inflection point in America because Sears, Roebuck saw what was going on and said, “Okay, we're going to do this, too, for appliances.” Then a guy named Charles Mitchell, who ran a bank called National City Bank, which becomes Cityroup, said, “You know what? We can do this for stocks.”

All of a sudden, brokerage houses were opening up on street corners the way we see Starbucks today. It was literally like that. You could go into one of these places, put $1 down, and they would loan you $10 against your dollar. That's how insane things were.

And at the time, there was no risk underwriting of any kind.

Zero risk underwriting.

But nobody understood what they were.

By the way, there was no SEC and no regulations. Somebody who read this book early said, “In your research, did you get a chance to read any of the prospectuses for the companies?” I was like, “Prospectuses? If there was a leaflet that they handed out on the street, you'd be lucky.” There was nothing.

It was just a complete go-go era. Forget about 1929: in 1928, the stock market went up 48%. People were just caught up in it. It was a little bit like the Chuck Prince line: “As long as the music is playing, you're dancing.” Everybody was dancing, and nobody was thinking about the music stopping—ever.

Meanwhile, there were also these technological changes—huge generational technological changes. In the same way I think we're probably talking about AI today, radio was transformative then. RCA was the Nvidia of its time. Everybody wanted into RCA. The stock ticker was “Radio” because it was going to change the world.

The other big piece of this was also similar to today: the idea of democratizing finance. It was like, “Okay, the elites have had their way. They've made all the money. We're now going to let everybody in on the action.”

The difference between then and now, though, was that there were also crazy amounts of manipulation and insider trading. As I said, there were no rules—literally no rules. Nobody was going to jail for this stuff because there wasn't a rule against it.

By the way, it wasn't just individuals who were investing and overextended with margin. The banks would take depositors' money and go long the stock market.

The banks were doing it. By the way, not only the banks—regular old corporations. Could you imagine if it turned out that J.P. Morgan and Goldman were going long Nvidia with depositor funds? That's the effective equivalent of what was happening back then, too.

You had corporations taking their balance sheets and effectively loaning the money out so that people could go buy stocks. That was the other thing that was happening. This push toward investing, overproduction, and all sorts of other things created this sort of frothy market.

You had a Fed. You mentioned the Fed, which is an interesting part of this. It was new—it started in 1913. They knew this was a mess. They kept saying to themselves—you read all the diaries and notes that were written over the last 8 years—they knew there was a problem. But they were scared out of their minds about doing what they probably should have done, which was raise interest rates. They couldn't pull off a Volcker kind of thing.

Can you double-click on what you said about the fact that there was a social contagion around wealth creation? People felt like the elites had had their way, and now it was everybody else's turn. Describe what had caused that, what amplified that social contagion, and who “everybody else” was.

Were these factory workers? We were on the heels of a big industrial buildout. Were they factory folks who had savings for the first time? Where was this coming from?

What's really happening is that a lot of folks were coming from farms, frankly, and moving to the big cities for the first time. That's a huge part of what was happening. Most of the trading was happening in the big cities. It wasn't happening out in small towns; it was happening in big cities, for the most part.

Once they were in the big city and seeing this wealthy group of people—talk about inequality—they wanted in on the action. And, by the way, the people at the top, meaning the bankers, investors, and entrepreneurs, were saying, “We think there's this big opportunity to open this up for the little guy, or the ordinary investor. We think this is a huge opportunity.”

There was a guy named John Raskob who was sort of the Elon Musk of his era. He actually ran General Motors, created the credit program there, then became hugely wealthy. He got into politics, by the way, and ended up building the Empire State Building.

But he was trying to create almost the first mutual fund because he thought people should be able to get in on the action the way he did. That was his whole conceit, and he talked about it pretty openly. There was a famous article called “Everybody Ought to Be Rich.” [snorts] That was his line: “Everybody ought to be rich.”

It was also a time when the American dream shifted a little bit, I think, from a Horatio Alger story to a lottery: Can we get rich? Can the whole idea of capitalism give us this great opportunity? And obviously, we’re there today. Do you think radio played a role in that? It amplified these stories and made them go faster, and people would just start to tell these tales. Folks started to forget the Horatio Alger part. I’m still trying to understand—

You have folks on the farms, right? They’re getting educated. The Industrial Revolution is happening, so they’re moving to the city. Radio then is maybe what Instagram is like now. You’re seeing people with wealth. You’re seeing this wealth that you don’t have, and you aspire to that.

Yes, and then something comes in and fills the void. Is that the mechanic?

I think something fills the void, and all of a sudden you now have the opportunity because the bank or the brokerage houses are going to lend you all this money. It’s not just radio being the communication device; it’s really the media.

The other thing that was happening during this period is that Time magazine starts in 1923, and Forbes in 1917. All of a sudden, Charles Mitchell and the CEOs are now on the cover of magazines the way Babe Ruth and Charles Lindbergh had been on the cover. There was a shift in how people even thought about business. None of these guys were famous before the 1920s, but they became famous, and everybody wanted to be them.

This was what America was about. It was this industrialization, right? We were pioneering an entirely new world, and these were the leaders doing it. These were the rock stars who were transforming this country. Was that a big part of what was going on at the time?

Totally. Everybody wanted to be a rock star. By the way, it’s the same way everybody wants to be you, David, or everybody wants to be Chamath, or they all want to be Elon. I think there was a huge thing of, “Okay, here’s this opportunity.” They were being sold the opportunity and given the opportunity not just to invest, but again, I think the margin piece of it was such a crucial element.

Do you think it’s a coincidence, Andrew, that you’re publishing this book in 2025? How does it feel eerily similar to you? Way too similar, where you can almost map one-to-one those boundary conditions then into some version of today? Is that what—

A little bit, but I will say that wasn’t my intent. When I got involved in this, I just wanted to retell the story and figure out who these guys were.

I ended up, after that crazy vacation with my wife, going to the Baker Library. I happened to be giving a speech at Harvard, and I walked in there because I had some time. I asked the librarian, “Can I see these boxes?” There was this guy, Thomas Lamont, who ran J.P. Morgan at the time, and I said, “Can I look inside these boxes?”

Inside the boxes, his secretary was keeping transcripts of his phone calls with Hoover and Roosevelt. By the way, it’s the same way everybody’s probably talking to Trump today. I thought, “Oh my God, I haven’t seen this before.” You’re seeing the conversation.

I thought, “Okay, if you could use those transcripts in an actual story, and then you could figure out whether other transcripts existed for all the other characters…”

Wow. You could recreate this whole crazy situation—

Right?

But I didn’t go into it thinking, “Okay, this is all one-to-one,” and I don’t think it is one-to-one. I think there’s a lot of leverage in the system today, but it’s a different kind of leverage. I like to believe that there’s now an SEC. There are other regulations.

If you believe it, there is one. Paul’s doing a good job. He’s there.

So I’m not here to tell you that we’re going off a cliff tomorrow. I think there are probably some things happening in our economy today that mirror that period, and I hope there are some lessons in here.

But do you think the regulations that have been put in place over the past 100 years—and there have been several cycles, one of which happened after ’08, of trying to create new protective provisions around how we operate in our financial markets—have they actually changed things enough? Or does the human element always find its way?

It always finds its way to frothiness, to frenzies, to these kinds of moments of exuberance and easy money. There’ll always be a path, whether some people might argue it was crypto tokens or there was an NFT moment a few years ago. Wherever the regulatory path of least resistance is, that’s where everyone goes.

Totally.

That’s always going to be the case.

That’s the human condition. There’s that great line in “Wall Street: Money Never Sleeps,” where I think Michael Douglas says to Shia LaBeouf—I thought the second Wall Street was not as good as the first one, by the way—something like, “What’s your number?” He looks at him and goes, “More,” right?

And that’s— [laughter]

That’s humans. That’s humans.

And that’s humans. More means we’re all trying to figure out how we’re going to get to more.

I think that was what was going on then. To some degree, it’s what’s going on now. I think it’s always going on. It never changes. It’s not like there’s some unique moment today. Maybe there’s technology that’s unlocked this kind of new cycle.

Look, the other piece of this—and it was actually a lesson for me that I still grapple with today—is that I think people think the word “speculation” is a dirty word. The truth is, having now written this book and “Too Big to Fail,” and spending all this time reporting on all this, you need speculation. Speculation is the twin of innovation.

Putting your capital at risk. It’s price discovery. It’s risk discovery. It is the hard underbelly of innovation. I completely agree.

There is no innovation without some speculation. Elon Musk would not have created Tesla if somebody hadn’t speculated on him early, when it all seemed totally insane.

No. And also, he’s probably speculated himself in 50 different ideas that never saw the light of day. That’s what it means. It’s like you’re investing risk capital. That capital is not always money. A lot of the time, it’s time and reputation as well. It’s convincing other people to come work on something, and you’re doing it speculatively. That’s what Silicon Valley does: betting on the come.

And so then the question becomes, how do you create an environment where you can have speculation? Not just have it, but encourage it, without letting it get out of control? That is the fundamental question.

What ends up happening, Andrew, is that no one gives a shit when a big fund manager, a big bank, or some kind of dark pool of capital loses money. But when it hits the consumer, when it hits the individual, then there’s this rush to protection. It’s like, “We need to protect the system. We need to protect the consumer,” because they’re always the ones who get taken advantage of. Is that fair? And as you look at what happened coming out of—

One hundred percent—out of ’08.

Look, you can look at both of those things. You could look at, by the way, an interesting one, because we’re now dealing with it now: the accredited investor rule. That really goes back to the late 1930s or 1940. The idea was that we only wanted the wealthy to be able to have opportunities to invest in private companies because they were the only ones we thought should be prepared to lose the money, and we didn’t want the little guy to lose the money.

Here we are now in 2025, and there are a lot of folks saying, “I want the access. I want the opportunity.” Sometimes—I remember, Chamath, you and I probably talked about this years ago—I remember talking about GameStop or some of these other companies and telling people, “Oh, you’ve got to be careful, guys. This could go wrong.” I said something similar about SPAC stuff and some other things, and people were like, “Sorkin, stop it. You’re not protecting me. You’re protecting the man.”

You’re protecting the man, and it was sort of—

Regulatory capture.

It’s a very interesting concept. I haven’t come up with a neat answer about that, but I do think about it a lot.

Well, to your point, I think the ’40 Act—the 1940 Act, I think it was—has been a very complicated piece of legislation because, if you fast-forward to today, we’re still trying to unwind and fit a square peg into a round hole, if you will. The entire crypto economy contorts itself around the ’40 Act.

Right? All these BDCs contort themselves. Private credit contorts itself. Why? Well, right now we don’t have the regulatory will to just go and have a wholesale rip-and-replace of what is really old legislation. I think, Andrew, do you want to talk about the ’40 Act? Do you want to just describe the ’40 Act? What’s in it?

Well, it was basically written as a way to try to delineate what is a security, what is allowed to be traded, and what kinds of businesses can be public.

And at the time, with the understanding they had of the economy, it all made sense. There was a pretty bright line: here’s a commodity, here’s a security, and here’s what is allowed. The problem, as we’ve seen, is that businesses today in 2025 are way too dynamic, and they don’t map to the brittle definitions of 80 years ago. The problem is that when you try to rewrite those rules, there isn’t the legislative will because what Andrew says comes up over and over again: the fear of what could go wrong stops people from doing what I think could go right, and that has pretty profound consequences.

I think, in part, when you look at what happened in the GFC, you can pull the string back to the 1940s and the ’40 Act and people’s reaction to regulations. The savings and loan crisis is another one that was absolutely unnecessary but happened because we tried to contort ourselves to expand the economy in ways that were brittle. Andrew, I want to ask you a question. If we go back to 1929, we have a good sense of the setup. Can you explain the big characters, who they were, and the roles they were playing?

Okay. There are a whole bunch of characters, but I’d say there are 2 main characters in this book that really drive the storyline. One is Charlie Mitchell, this fellow who runs National City. He is the Jamie Dimon of his time in terms of fame. He might actually be more like Michael Milken because he really did develop sort of credit for the public. Michael, of course, did it for businesses later.

They used to call him Sunshine Charlie, and he was on the board of the New York Fed. He was constantly calling for lower interest rates, interestingly, during all of this. He was the guy who was not just loaning to speculators and stockholders; he was also loaning money to different brokerage houses across the country.

On the other side of the story, in Washington, is a guy who you’ve probably heard of or know named Carter Glass. Carter Glass was the Elizabeth Warren of his time, or maybe even like AOC.

AOC. Yeah.

And he was, by the way, like a racist Elizabeth Warren, interestingly, given the weird things going on down there at the time. Anyway, he would rail for years about this thing that he described as Mitchellism. He believed that Charlie Mitchell and what Charlie Mitchell was doing was going to upend the economy, effectively. As the story plays out, they are sort of pitted against each other.

One of the things that Charlie does is he defies, or at least appears at one point to defy, the Federal Reserve, which is trying to clamp down on speculation. They don’t try to raise interest rates. What they weirdly do is send a letter to all the banks saying, “Please stop lending to speculators.” The banks don’t know what that even means, so they stop lending basically to everybody. Charlie says, “We’re not going to have that, so we’re going to start lending ourselves.” That sort of creates this whole other dynamic, which leads him to end up in front of Congress.

I don’t want to give away the story, but he does get arrested on the steps of his own home for doing some crazy things later in the story. Those 2 sort of play a big role. Then you get to see how Glass-Steagall came about, which, by the way, is shocking because it is not what you would think at all.

It almost has nothing to do—I don’t want to say it has nothing to do with breaking the banks apart for political reasons—but it actually has to do with business reasons. There was major bank money and lobbying going on behind the scenes to screw over J.P. Morgan by the guys who were running Chase and the Rockefellers. So it’s wild. The story is wild.

Okay, so just the summary: Glass-Steagall, I think, as I understand it—but tell me—basically separates commercial banks and investment banks?

It separates commercial banks and investment banks.

And then sets up the FDIC, basically?

And sets up the FDIC, right? Again, when you see how that all came together—the FDIC piece of it, the backstory of these laws—it’s not coming from consumer protection as much as you’re saying. It’s lobbying to try to basically marginalize the 800-pound gorilla.

Exactly. Exactly.

And you’ll see it. You will be in the room with these people, literally going in there, sitting in the White House, begging Roosevelt to do this. By the way, Carter Glass is actually unhappy about it. I found letters where Carter Glass is like, “This bill is getting taken away from me,” and is basically being taken over by the bankers, which is almost hilarious because Elizabeth Warren loves to cite this bill as sort of some panacea.

Andrew, as you look at markets today, just to come back to the modern era—I don’t want to ask you to simply draw the parallels—but are we in, and I’ve heard you ask this question a lot lately, are we in a monetary bubble? Are we in an inflationary bubble? Are we in a speculative bubble? Are we in no bubble?

So I’m assuming we’re in some bubble, and we just don’t know when it’s going to pop, of some sort. By the way, we don’t know how big it’s going to pop either. It doesn’t have to be 1929. It could be 1999, it could be 2008, or it could be smaller than that. I don’t know.

Do I think that there’s leverage? I mean, you guys talk about this AI investment phenomenon that’s taking place right now. For the most part, the big corporations are spending real cash, so that’s not leverage. But you look at a lot of the real estate plays and the energy plays that are sort of on the periphery of this, and there’s a lot of leverage there.

I think the private credit world—we don’t really know where all the leverage lies right now. I don’t think that any of that is as leveraged as what we were talking about, this 10-to-1 situation in 1929, or even the subprime situation in 2008. But at some point, you start to look at some of these, like the NVIDIA-OpenAI deal or the AMD deal, and there is a little bit of a circular kind of thing going on there for now.

I just don’t know where. We could still be years away from this, and, by the way, it could work out on the other end.

But what about government monetary and fiscal issues—the central bank’s monetary policy, interest rates, and then the fiscal issue, the government spending right now?

Ultimately, if you have a devaluation of the dollar, we’re seeing gold at $4,000 an ounce. We’re seeing the dollar basket trade down. I think this is one of the worst years we’ve ever seen. Does that ultimately translate into a higher index on the stock market because the dollar is worth less? Could this actually be more of a monetary or fiscal kind of problem than it is a speculative kind of problem?

Well, so you would think it would be, but then explain it. Yes, I think the traditional, classic economist would say that these things should not be happening at the same time. Look at the price of equities, look at the price of gold, and look at the price of U.S. Treasuries right now. Classically, it shouldn’t line up the way it’s lining up right now.

I just don’t know. I would have thought that the investor class would have wanted to charge us a higher premium for our bonds these days, for a whole bunch of reasons, but they don’t. Maybe that’s just life is relative, and other countries are not doing as well, so we’re still the prettiest girl at the dance.

I think that’s exactly right. But we’ve never seen so much capital, so much printing happening as we see today. I mean, 7% debt-to-GDP in peacetime with an expanding economy—we’ve never seen that before.

Totally. But then, if that’s the case, you’d think that we’d all have our money in Bitcoin and gold, but we don’t. Why is that? I don’t know.

How do you invest? Does anyone ever ask you that?

Most people don’t ask me that. The truth is, I’m not allowed to invest in individual stocks. Given what I do for a living, that’s part of the deal, part of the nunnery that I have to live in.

You’re long the index.

I’m long the index. I am long—

Bitcoin. Bitcoin, gold.

I’m long the indexes. And no, by the way, I wish I could. I thought for many years—it’s probably shifted now, but for years upon years, I was always worried about buying Bitcoin because I didn’t know. I didn’t want to be on TV or in the papers.

Oh, I would do it. I came on CNBC and I would tell Sorkin to buy it at $100 a coin, $200 a coin. Sorkin would show me a clip of Charlie Munger telling me that it was poison, and he would say, “Man, what do you think?”

And I said, “I have tremendous respect for Charlie and Warren, but they’re wrong.”

I remember those moments fondly and sadly because I should have—I should have listened.

But, okay, so you have a very balanced kind of portfolio. Pretty vanilla, down the middle. Super. You’re not going to get rich, unfortunately, on being a journalist that restricts you from access to the markets. I mean, you seem to have a good pulse on what’s going on, but really what matters in markets is having a pulse on what the actors in the markets are doing, right? You’re not able to act on it.

I have misgivings about it. How about that?

You’re the character in your show who acts where you have all the inside information but can’t do anything about it.

Can’t do anything about it.

Yeah, exactly.

But that's the point. I get it. I knew that's what I was signing up for, so I'm cool with it.

Do you like being a journalist? Do you like sitting as a speculator or an observer versus being an actor? Have you ever thought, “Man, I really understand markets. I really understand the parallels to history. I've got a good sense of this. I feel like I should play a role. I want to play a role. I can make money”?

I think about that. I've thought about that for years, too. Could I be an actor? Could I play a role? I often go back to the idea—and maybe this is not the right way to think about it—but I feel like I've managed to have, hopefully, some semblance of credibility with some people by doing it this way.

I've been able to be, hopefully, a good part of the conversation and be engaged in a lot of things. Maybe I could do that as a direct actor, too. I don't know. I also think, by the way, journalism seems to be changing. Mainstream media, legacy media—I mean, there's a lot of people—

Or you could start a podcast and just do whatever you want to do.

So, I don't know. I don't know what the right answer is.

Tell us who the characters in the play today are. Who are the actors? Who are the main actors that you see?

That's a good question. Yeah.

The main actors—I think you'd probably think about them in a couple of different ways. You sort of think about them on the financial side and probably the tech side, and where they sort of come together. Then there's the government piece.

Obviously, the president, Scott Bessent, and Howard Lutnick on the business end of things inside the government. In the banking, or classic banking, world, you'd say that probably Jamie Dimon and Larry Fink are the most powerful players in the traditional legacy piece.

Then you'd probably give a nod to Brian Armstrong at Coinbase as one of the original players in wherever you think crypto goes. I'd also take my hat off to Vlad Tenev, who I think has been very outspoken about democratizing finance. He sort of represents that.

But then you tell me. I think Sam Altman and Elon Musk—and wherever you think AI is headed next—and the Google guys.

But it's interesting, because you're saying that technology, particularly AI, is playing a key role in—

Yes.

—fundamentally.

It seems like it is. Do you think that's true? I'm asking because you also have the capital that's moving through banks. There's a whole other set of industries that generate trillions of dollars of revenue that seem to be largely ignored in the conversation about where the economy—the global economy—is, where it's headed, and where markets are headed. It's all about AI, right?

But that's because—and I guess the question is, is that a media thing or is that a real-economy thing? I think it's a real-economy thing, because if you X out the Mag 7—

Yeah.

—all of a sudden, the economy does not look nearly the same. I don't want to say we're levitating, but we're either—

I saw a data point yesterday that said quarterly GDP was flat excluding data-center spending. Does that sound right to you? Did you see that?

It's definitely 100 to 200 basis points of GDP.

Yeah.

So, sure. Let's say if you X out the AI boom, where do you really stand? I think that's a real-life question. I think the reason why no one's focused on the rest of the economy, first of all, is that the AI story is the more exciting part. But it is what I think is—I don't want to say propping up the economy—but it's keeping the economy—

Well, I would flip it on its ear. I think those comparisons are kind of dumb, because at every point in the economy there are dynamic reallocations of resources and assets. Things are important at different times.

I think the thing with AI is: What is every company doing to figure out what they look like in a world of AI? If they're not going to spend that amount of time, their productivity is probably going to shrink on the margin relative to a net-new company that just does what they do, only more efficiently and better. That's just the cycle of creative destruction we've seen at every point of every meaningful technology.

So you think we need to be talking about this much more outside of tech and data centers?

Yeah, I made this comment. All the private-equity wives got their husbands to come in and rail at me in the comments. I said, “The least success I've had at this software company I started has been selling into private equity. I have Fortune 500 and Fortune 1000 customers lining up out the door. I couldn't sell to one single private-equity company what is effectively a platform that uses AI to rewrite all your software.”

I'm like, “This is the first company that should be in line.” What it goes to is that their heads are firmly in the sand. I think that's not a decision on technology; it's a psychological decision.

The weird thing with AI is that it pushes people to a place of psychological insecurity. They think, “I don't want this to be my problem. I need to just wait this out, and somebody else will deal with it in the future.”

That's very different from other technology arcs. In the dot-com bubble, that's not what we lived through. In the social bubble or the mobile bubble, it was always like, “Okay, this seems interesting. Let's figure out how to embrace it and take advantage of it.” This is the one where many people are like, “Nope. I'm just—nope.”

So you think we need to be talking about this much more outside of tech and data centers?

Yeah. I made this comment. All the private-equity wives got their husbands to come in and rail at me in the comments. I said, “The least success I've had at this software company I started has been selling into private equity. I have Fortune 500 and Fortune 1000 customers lining up out the door. I couldn't sell to one single private-equity company what is effectively a platform that uses AI to rewrite all your software.”

I'm like, “This is the first company that should be in line.” What it goes to is that their heads are firmly in the sand. I think that's not a decision on technology; it's a psychological decision.

The weird thing with AI is that it pushes people to a place of psychological insecurity. They think, “I don't want this to be my problem. I need to just wait this out, and somebody else will deal with it in the future.”

That's very different from other technology arcs. In the dot-com bubble, that's not what we lived through. In the social bubble or the mobile bubble, it was always like, “Okay, this seems interesting. Let's figure out how to embrace it and take advantage of it.” This is the one where many people are like, “Nope. I'm just—nope.”

All right, but here's the question. In 1932, unemployment in this country was 25%.

25%. Yeah.

It was pretty crazy. If the AI boom is as successful as I think we're all excited it could be, and it affects every industry in every way and all the things we're discussing here, there need to be massive productivity gains—massive, crazy productivity gains.

Invariably, productivity gains are a euphemism for cutting costs in some other way. That ultimately is probably going to have an impact on employment in this country and do more things—

Or do more things. The question is, which one is it? Or, by the way, is it a combination of both? I would probably—

It's a combination.

You hire people so that they spend less time doing drudgery and allow them to work on more important things. I'll give you an example. My wife runs a life-sciences business, and what's funny is that when she looks at AI, she's like, “All of this stuff is trying to sell me speed.” And she's like, “I don't want speed. I want quality.”

She's like, “I'm not trying to make 500 molecules tomorrow. I'm trying to make the right molecule for the right disease, and I'm happy to take 5 or 6 years to do it.”

Right now, I think we're still in the novelty-slopware phase of AI, where most of it is about speed. You're spending a lot of money to try to get crappy outcomes out faster.

Eventually, we'll replace that with quality outcomes, and they'll take a lot more time. I think that's when you'll have the real productivity improvements. Back to life sciences: These guys want to get drugs for every person, right? That's not a tomorrow thing. That's not like you type it in English and all of a sudden it pops out the other end.

I think we're going to have to take a lot more time. That's when this stuff becomes really real, and that's going to be very exciting.

Andrew, did we see, coming out of the crash of 1929, a big move toward socialism in this country, saying, “Hey, capitalism has failed us”? How do you speak to the rise of socialism today and the argument that capitalism has failed most Americans?

Well, yes—sorry. To add on to that, do you think the New Deal would have looked the same, or would there even have been a New Deal, if there hadn't been a crash in 2019?

Okay, so, 2 quick answers. Yes, that conversation happened, but not nearly as quickly as it happened, for example, after the GFC of 2008. I remember being down at Zuccotti Park during Occupy Wall Street—all of this conversation we're having now about socialism versus capitalism. That happened immediately.

In 1929, that conversation did not happen immediately. Part of the reason it didn't happen is because there was a slow roll on the economy and even the market. There was a disconnect between the economy and the market.

People forget that at the end of 1929, the stock market was actually down only 17% by the end of the year, so people thought it was going to come back. There were times when it actually seemed to be coming back.

Hoover had this idea that it was almost like a psychological problem, and that the market and the economy were detached from each other. He then started making all of these, frankly, mistakes. Obviously, the Fed didn't flood the system. Hoover decided he wanted to raise taxes. He did Smoot-Hawley with tariffs. That's something he had pledged to do to try to get farmers to vote for him, and he thought that was a pledge he had to keep.

There was a whole set of policies that came into play. The Hoovervilles don't show up in these tented camps—you can think of Zuccotti Park—until 1932.

And when you go back and look at why Roosevelt won, it wasn't actually on the economy. If you go and look at the polls, it was over Prohibition.

Crazily enough. And so it didn't have that sort of social effect. Having said that, famously, Roosevelt, on his Inauguration Day, goes after the bankers in the inaugural address. And then, of course, the New Deal shuts down the banks, with what was equivalent to a national holiday. 9,000 banks go out of business, right? And that's sort of when the conversation about capitalism and socialism starts to rear its head.

I think it's because, at that point in American history, we had not yet made the promise to the average American that they have the right or the opportunity to buy a home, to get a college education, and to have progressive income every year. As you point out, most folks were transitioning from an agrarian to an industrial economy. And so the big transition in life had been, “Wow, I can get an apartment. I don't have to work 12 hours a day doing grueling physical labor in the fields. I can actually live and walk to a grocery store, get amazing food, meet people, socialize, and live in this amazing city.”

It was before we had made all of these promises that led to these expectations, which folks then end up feeling disappointed by, and they blame it all on the failure of capitalism. My personal opinion, as you know, is that it's fundamentally a function of overspending by the government and overpromising, rather than allowing natural market forces to bring everyone up, which fundamentally created, and creates, a lot of the distrust and the issues we face.

Can I just add on top of that? You're describing what I always think of as the Leave It to Beaver American dream that people sort of have in their mind, which is really more of a 1950s-style dream. It actually was a function of a post-World War II situation where the country had monopoly power; everybody else was out of business.

This is also the time—the reason why unions even worked, I would argue, for a large part—when there was this period of time where we were the only players in town. We could charge monopoly rents for a lot of things, and people could buy a house with a white fence, have 2 kids, and have an education—all of those things that we now say are the dream.

Look, there are some people who think that was an aberration in history. I hope it wasn't, but I'm saying there were a lot of forces at play that created that dream. I don't think that was the dream in 1929.

Yeah. Do you buy into Ray Dalio's point of view that we're at the end of an empire, the end of a cycle?

I hope we're not. I hope we're not. You look at a lot of the things going on right now, just with how much debt we have. I think you look at the Niall Ferguson view of the world, which maybe lines up pretty directly with Dalio, and when you get GDP—you start to look at defense spending as a percentage of GDP—there is this point at which, at least historically, you have a real problem, and that sort of has created the end of the empire. I think that happens, in his view of the world, in 2040, so maybe there's still time to turn it around. I don't know. What about you?

It's a very exact forecast: 2040.

You ever read that—what's that series, the Asimov series, where they've got this social forecasting capability? Sorry, I totally forgot. Sorkin, do you think that if you look at GDP going through the crash, it basically cratered and then—

I mean, whatever we think of the New Deal, I think the reality is that it created an enormous amount of investment that then just turned GDP around. Is there a version of the New Deal that America needs to do today? Is there a new compact we need to have with our citizenry today?

Well, but there are 2 things that happened, though. There's the New Deal, and then there's World War II. I mean, so, yeah, I think you have to sort of lump them together in terms of the spending profile and why we were spending.

Well, even in the mid-30s, though—really before we were engulfed in it—we were cranking 8% to 10% of GDP. My point is just more—

Just that idea of a new social compact, a new set of agreements. I don't know. Are we at a point—

Maybe we do, but what does that look like, and where are we going to get the money to spend it? That's the real question, and how can we—

I think Friedberg would say—and I'm not going to put words in Friedberg's mouth—that the agreement is actually not about spending more, but actually less, and getting folks to understand that these trade-offs need to happen.

So I agree with you, and I agree with David on that. I think we have to cut spending in a big way, but this goes back to the “more” issue, which is everybody wants more.

The irony, Sorkin, is that we've shared this point of view many, many times. But I think when we made the promise—when the federal government and the people who got elected to represent the population in the federal government got elected—they said, “We're going to give you an education,” and then we're going to use federal spending to do that. “We're going to give you access to a home. We're going to create this federal home loan program.” And in all these cases, when there was a promise made on giving you more, it was all about increasing government spending. “We're going to give you access to health care.”

And then Medicare became this ballooning spending line because, in every case, because it's not actually a free market, the government doing the spending gets taken advantage of, and all the costs underlying that spending line get inflated because there's no natural market force of buy and sell. There's only a market force of buy.

That's why education costs have ballooned. That's why housing has ballooned. That's why medical expenses and pharmaceutical drugs have all ballooned. Because as soon as the government provides that as a service, it completely distorts the market, and you can never get out of that freefall.

So the fundamental challenge is, you have to have the more difficult conversation—to your point—that it's not more, it's less, and we're all going to have to kind of deal with that. Otherwise, you're going to do the same thing that everyone's done historically, which is wealth taxes and, you know, growth slows, all the stuff that we've seen many times before.

So now you're talking about a political—it's almost a paradox or a challenge—which is, how do you get the public to buy into the idea of less? That is the fundamental question. We all know that we have to spend less.

I agree with that. And, by the way, I feel blessed that I could probably afford to take less. But the question is, if you don't have it, taking less—

Yeah. They'll say, “Rich like you guys can say that. Good for you.” That's not fair to me. And I think that's the big issue. The people who would proclaim that would be immediately attacked: “You live with less? Tax the rich.” And that becomes where Dalio and others have argued historically—you see these notions of civil unrest, of civic splits, that happen.

By the way, the book is Foundation, the Foundation series. I don't know why it didn't come to my mind. The idea is called psychohistory, where the guy can actually predict all of these social trends because they're all predictable, and they all happen in cycles.

Okay. Can I just throw one other thing in here? I'm so curious about it, and I've spent a lot of time thinking about Smoot-Hawley in terms of tariffs. There's a fair argument that tariffs are now tied to national-security resilience today, and we may decide philosophically that we want to have an automobile industry in the United States. Because if you let BYD sell cars in this country, we would not sell cars in this country, and we wouldn't make cars in this country ever again. You may think that's a bad idea and want that to be here.

Having said that, if we do this—which we are—we will probably spend more to buy less technologically capable cars 10 years from now than the next time we all go on vacation to Europe or Asia and get in the back of one of these other cars. How should we think about that? That, to me, is a real fundamental question about capitalism, and also about resilience and national security.

What I would offer to you is that the way we should think about this is: How do Americans and American society preserve maximum optionality in the face of very difficult decisions in the future? So if, geopolitically, we are induced into a war, all wars have tremendously bad consequences. How would we have the wherewithal not to have to be a part of it? If you look at the last number of wars, these are all ultimately over resources. Right.

Right.

And if you think about resource independence, there are many, many things today where America is just fundamentally unstable because we don't have resource independence. But if we were to get that, and then we had the building blocks, we wouldn't actually have to fight a war. Now, there may be other reasons, and people may pull us into wars, and I get all of that, but I think that's a really big question.

Would I be okay with a less-good car but having a national transportation infrastructure that we control and cannot be turned off by somebody else? On the margins, I would say, yeah, I'd be okay with that. And the interesting part, though, is there's going to be a premium on that, right? We're going to pay more for that. And that may just be the cost of doing business.

Sure. That may be the cost of strategic flexibility and optionality. I think if you just think about what the downstream consequences of not having that are—

Maybe, by the way, those costs are even higher, and those costs don't get added into the model. Right?

You're absolutely right. They're always higher because they're measured in human lives. It's always higher. It's always more costly.

Andrew, who do you sell the movie rights to for your book, and when's the movie coming out?

Because it sounds like it's a very people-driven story, so it should make for great drama, right?

Oh, totally. I tried to write it—not for film per se—but in as cinematic a way as humanly possible, given that I was also constrained by the fact that I had to have archives, notes, and diaries. It looks like a long book. By the way, folks, it's a little bit shorter because there are 100-odd pages of endnotes at the end, for those who want to read them. Some of the endnotes are kind of fun.

Andrew, when you write these things, do you—

And then when you license it, for example, like when they started to make Billions?

Yeah.

Do you take a strong point of view on how the script, in that case, or the screenplay in this case, will be written? Or do you say, “Okay, here's my source material. You guys do the best you can”? Do you care who the actors are? Do you care about any of that stuff, or do you think it's like, “Okay, they're licensing it off. Off on your merry way. Do the best you can”?

Because it's probably in your mind, right? You have a vision of what this whole thing looks like visually. You probably have faces. You probably have all of this. Do you let go of that?

Well, I think, first of all, you have to let go a little bit at some level, because that's just the nature of the business, for better or worse. I think right now, in this streaming environment, there's sort of 2 ways you can sell projects like this. One is you sell it to a streamer, and they go off and try to develop it. They go find the team that does it.

The other approach is to find the actor, maybe a director, maybe the writer, all at 1 time, and then walk in with it. In that context, you probably have more of a say in the future of it. Right now, just the way the business is, Hollywood's buying a lot less stuff, and I think it's more interested in sort of the former version, where you show up with the whole thing sort of prepackaged, preplanned. But it almost changes by the month in terms of what they want.

Are you doing the audiobook yourself?

I read it. You guys are in the audio business yourselves, so I will tell you: I went in, and it's 13 hours, the book in total. You do it on double time, and you'll be done in 6.5 hours. But it probably took me 30 hours. It takes a while, and they do it. I did it. It was fun.

Your first time? Was it your first time reading the audiobook?

I've never read it before. When Too Big to Fail came out, we had a British actor do it, and I enjoyed listening to him. He added some gravitas to the project because the Brits always sound smarter than us.

British.

Pretty much.

Okay.

Sounds smarter.

Sounds smarter. I was going for sounder than us.

They do. They do.

Well, Andrew, thanks for joining us. This has been awesome. Congrats on the release of your book. Thanks for chatting. Good broad range of topics.

I'm buying it. I'm buying it. Yeah, I appreciate you guys. I enjoy this so much, and I listen to you guys so religiously. So, this is a—

You're the best, bro. Thanks for doing it. I mean, it's an incredible period of American history that, to your point, not enough people really understand. I'm glad you— I find it so interesting.

That 20-year period, I would say 28 to 48.

Well, thank you.

Wow. It's got everything.

Thank you guys. I appreciate it.

All right. We'll talk soon. Thanks, man. See you. Thanks, man.