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Full video and transcript: U.S. Senator Mark Warner at Code 2018

On Mark Zuckerberg’s Congressional hearings: “I thought, ‘Oh God, they’re going to leap to it.’ Then I was saying, ‘Oh my God. This is an embarrassment.’”

Peter Kafka: We don’t need a warm-up for Senator Warner, right?

Kara Swisher: We don’t need a warm-up.

Peter Kafka: Let’s bring him up onstage.

Kara Swisher: This is Senator Mark Warner, he is the Vice-Chairman of the Senate Select Committee on Intelligence, and he’s been busy this year. So, let’s bring him out.

Peter Kafka: Thank you sir, over here.

Kara Swisher: Can I call you Mark and not Senator Warner? Because I knew you ...

Mark Warner: You can call me whatever you like.

Kara Swisher: Okay, well, Phyllis, I met you back in D.C. when I worked for the Washington Post.

I can still claim I’ve got a year or two more of being on the tech side than the VC side, wireless side, than I have been in politics.

Kara Swisher: Absolutely, telecom, it was a lot of stuff because D.C. was sort of the front of telecom and early internet. But now, you’re where you are. So, let’s start with the report that you put out, let’s start with that. We’ve got a lot of things to talk about, from privacy, China, use of social media, hacking, cybersecurity, there’s a lot of stuff going on.

Lots of stuff.

Kara Swisher: Lots of stuff, so let’s talk about the report, and sort of the discrepancies between the House report and the Senate report, and how you look at where you are right now.

Well, I never thought that I would be this engaged in one of the wildest things that I’ve ever been involved in. The notion that a foreign country, an adversary, decided to massively intervene in our election. What they did — and this part, there is agreement from Democrat to Republican, from Obama official to Trump official, virtually everyone other than the President agrees with three things:

One, Russia massively intervened in the election, hacked both political parties, decided to release information that would help Trump and hurt Clinton.

Second thing they did was they scanned or broke into, mostly didn’t get into the actual vote totals, they scanned or broke into 21 states’ electoral systems, showing how vulnerable our electoral systems were.

Third is they used social media. We initially thought just with paid advertising, but really paid advertising was a tiny component of an otherwise well-organized effort with internet trolls, bots, and the whole notion of fake accounts in a way that caught the United State’s government and, I think for the most part, the platform companies off guard.

We’ve gone a year into this, we’ve basically come out in a normal world reconfirming what the intelligence community already said would not be that much news, but because the House investigation has gone so far off the rails and become so partisan. They basically tried to walk away from the facts and said, “There was not intervention on behalf of Trump.” No one who’s looked at this on an objective basis would deny they had a favorite. It was obvious they played for that favorite. They were a little surprised as much as we were when he won, but they had a clear intent.

Where we are now is, we’ve gone the election security piece. We should all, while we’ve got people focused on 2020, 2018 is a big election year obviously, and our systems are not fully safe enough. You know, we’ve got to make sure every voting machine in America has a paper trail. We’ve got to make sure folks have got appropriate clearances. Again, in a normal administration, you’d have someone in charge of election security working out of the White House, because they’re state, local and federal. We don’t have that.

So our committee, which has been pretty bipartisan, has laid out some plans. We did the intelligence community assessment, reaffirming that. We will say what the Obama administration did right and what they did wrong. We’ll have a piece on social media that will probably come late summer with some recommendations on what we had there. And then we’ve got the big question, which is the collusion question.

I’m reserving judgment on that until we’ve had all the witnesses in, but the amount of contact between individuals affiliated with the Russian spy services and folks that were at least affiliated with Mr. Trump, it’s unprecedented.

Peter Kafka: You’re the ranking democrat on the Intel Committee, you came out with this report that in a normal world would be extraordinary, right? All the things you just listed. In part, I guess because some of this had come out through the intelligence agencies already, but in a normal world this would be a giant news story. Are you frustrated and/or worried the stuff your committee is putting out is not getting enough audience?

I think what’s happening is people’s attention span lags a little bit, and when you’ve got the president out every day basically trying to undermine ... he didn’t focus on us as much, I get occasionally tweeted at, but when he focuses entirely on the Mueller investigation, this is not the actions, I would argue, of someone who has nothing to hide. I mean, when he constantly comes back with these attacks ... And what worries me beyond the fact that people have kind of got exhaustion from the day-to-day back and forth of this story, what worries me beyond the Russians themselves or the collusion issue, but the president’s willingness to kind of make broad-based ad hominem attacks against the whole integrity of the FBI, the whole integrity of the Justice Department, beyond just the Mueller investigation, criticize his own people who are not willing to do inappropriate things, like shut down the investigation.

What I think he does, with at least some of his allies, they’re starting to undermine rule of law. And there’re plenty of episodes in history where people start to decide, “Well, I’m going to follow this law but not follow that law.” Because somehow the legitimacy of law enforcement is going to be put into question. That puts you in pretty dangerous territory.

Peter Kafka: So, what can you guys do to push back? It seems like he’s winning this battle, and he’s got a combination of exhaustion on the American public’s part, and institutions that have sort of held up that are under attack, what can you do personally?

I think there’s three things.

One — and I’d like to see more of this — people across the country, particularly folks that aren’t necessarily partisan, but former judges, prosecutors, whatever, they’ve got to stand up in their own community and say, “Hey, rule of law needs to trump any individual person, and no one is above the law.” That kind of grassroots stepping up, how hard can that be when we’re talking about basic integrity, things like the FBI and the Department of Justice?

We’re going to need, and I think even Mr. Trump’s appointees, the FBI director, the director of National Intelligence, the host of others, we got last week to an area where some of the allies, his allies, got very close to asking these intelligence community leaders basically to violate, if not the law, long standing American traditions where you’d have to reveal the identity of an informant. You know, the truth is, spy services use informants in lots of ways, that has been part of the history of the business. When you force people to take completely unorthodox positions and break traditions and laws, that would be another point where there would be this moment of — potential moment of — crisis.

And third is, I think, in some small way, maintaining the Senate Intelligence Committee as a bipartisan effort. And that’s taken, there’s a lot of paddling underneath the surface.

Kara Swisher: But how’s that ... what’s going on?

So that validates as well when Mueller will come out ...

Kara Swisher: But what’s going on beneath the surface, how difficult-

There’s enormous pressure. On this committee, I’ve got on one end a Tom Cotton, and the other end a Kamala Harris and Ron Wyden. So we span the ideological spectrum, and there’s enormous pressure on some of the Republicans to say, “Hey, it’s time to get this thing over, let’s shut it down, let’s not go ahead and see the balance of the witnesses, because there continues to be no additional meetings or other things that pop up that need some investigation.” On the other hand, on the Democratic side, there’s a lot of pressure to say, “Of course there’s collusion. Call this guy out as guilty tomorrow, don’t wait for the process to finish.”

And so, we’re trying to maintain our equilibrium, at the same time to try to protect Mueller and Rosenstein where they have a lot more tools than we do. They’re doing a criminal investigation, we’re doing a counterintelligence investigation. But I do think, the notion for those who may be partisans in the crowd and say, “Well gosh, if the Democrats take control, they’ll be able to really ramp these up!” I think the American public will be tired of it if this is not wound down in this calendar year.

Kara Swisher: Okay, let’s talk about what happened on the things, we talked about it, we were together last night, we talking about a bunch of things.

First is, what the Russians did, the things you mentioned, the buckets. I do want to get to privacy and tech companies too, but let’s talk about what they did. You were talking a lot about the need for the United States to step up it’s cybersecurity efforts, and how we spend so much money on an airplane, and the Russians made a small investment in cybersecurity and had enormous benefits from it.

Well, we should have actually been able to predict more of this, because a lot of the tactics that Russia used in 2016 in America, they’d used in Ukraine, Estonia, other Eastern European nations for a while. And they actually laid out their game plan back in 2011 when their equivalent of their chairman of the Joint Chiefs of Staff, a guy named General Gerasimov, basically said, “Russia can’t compete with the West with tanks, trucks, planes, ships, traditional military.”

Kara Swisher: They can’t afford it.

They can’t afford it. But, in the era of misinformation, disinformation, which Russia — and previously the Soviet Union — are pretty good at, in the age of asymmetrical conflict with cyber, they can compete. And candidly, in those categories, they are every bit as good, and on the misinformation front, they are actually better than we are, so the point I bring up sometimes is Congress just passed a — late as always — but a big defense budget, $700 billion. Russia has a defense budget of $68 billion, but in the realm of cyber and misinformation, they are our peers, and I feel like we may be buying the world’s best 20th century military, but when conflict in the 21st century will, I think, be in the realm of the cyber domain and misinformation ...

Kara Swisher: So, what does that mean? This is something the United States had done for ... it’s been going on ...

This is not just a critique of the Trump administration. The last 15 years, the United States of America has not really had a cyber doctrine. For the most part, business until very recently has wanted to kind of have this program be down at the CTO or CSO level, not at the CEO level. Government, it doesn’t fit neatly into any category, and we still do have enormous distinctions between if someone originates a post in St. Petersburg and it pops up in Los Angeles, our government will, the CIA and NSA will check out what’s going on in Russia, FBI and DHS will check out what is going on in America, and it sometimes, things fall between the cracks.

And we have been so, I think for a decade-plus, so concerned about any kind of cyber escalation, because we were more technologically dependent, that while we would take on second-tier states, North Korea, Iran, ISIL, what have you, with near-peer adversaries like China and Russia, they’ve been basically from intellectual property to messing with our systems, stealing us blind. Now more recently, intervening in our most vulnerable spot, taking advantage of our open system to try to intervene in our democracy.

So, I think a cyber doctrine would include things like the notion that there ought to be some kind of international treaty or convention around what cyber tools can be used, and which ones, frankly, should just be off the map. And, if a country did use those tools, we ought to make clear that we’re going to potentially respond in kind. I think there’s some low-hanging fruit that I’ve got some legislation on that would take us in the right direction.

You know, we’ve got 10 billion IOT connected devices, we’re going to go to 25 billion in the next, you guys would know better than I, five years. I think when, at least, the federal government goes out and buys IOT device, it ought to have at least minimum security, so it ought to be patchable. It ought to not have an embedded passcode, some, at least de minimis standards there. I think we ought to think through what kind of world we live in if Equifax can get away with not doing a patch and exposing 150 million fellow American’s personal information, particularly when we didn’t even have a customer relationship? There out to be some liability there.

Kara Swisher: Yeah.

I think something’s wrong when Yahoo’s got 500 million users hacked into and that was not even material enough to report in their SEC filings. There are things that we can do from the national and international perspective. There are some legislative issues here, there are things we can do around IOT.

Peter Kafka: We have a publicly funded military, right?

We have a publicly funded military.

Peter Kafka: And then when it comes to cyber, right, we’re asking everyone in this room to take care of it on their own. Is that sustainable? Does more of that responsibility have to become just the government’s ...

We do have, yes, we do have ... Cyber was like Homeland Security in the sense that it got really hot in the last five years in government and every branch of government has gotten now ... Every one of the military branches, obviously the NSA, Cybercom has been created. I think we still have not sorted out where the boundaries are between government activity and private sector.

And people understandably are reluctant to have mandated cyber standards that if they got stuck in stone and weren’t able to move as technology moved that’d be a bad thing. The flip side is when the only thing we’ve ever done legislatively so far on cyber is a pretty weak-kneed information-sharing bill, and when it comes to critical infrastructure and certain other things, I’m just not sure that’s going through.

Peter Kafka: What about in terms or resources. Again, like Sony who’s responsible essentially for defending itself against North Korea. Should there be some sort of really robust arm of the government, whether it’s the military, that’s responsible for all of this stuff?

One of the things, I think there will be that shared responsibility. One of the things that the government does a really crummy job on is communicating to the community and tech per se, I mean most folks in tech don’t want to take a meeting with the FBI. But that’s the folks that we normally have as the first outreach level.

One of the areas that I’ve gotten obsessed about in the last two years as President Xi has consolidated power in China, I think he has taken the situation where a lot of these Chinese tech companies already were much too collaborative with their government and now China has a very aggressive efforts to steal our technology, invest in our early-stage companies. Many of the students that come over come with a mission of going back with technology, yet we do a really poor job of notifying VCs, university presidents, companies, of the threat. And we’ve got to up our game.

And that goes into problems like classification issues. But if we have all the Obama administration people and all the Trump Security Administration people all saying that Huawei and ZTE pose national security risks, I think we ought to listen to them. And not simply use that as a trading chip. I’m not sure this president actually listens to his own national security folks, but it is a national security concern and ought to be treated as such, not a trading chip in a trade war.

Kara Swisher: So when you’re thinking about that idea of who should be in charge, what Peter was talking about, our legislators, let’s go to the Facebook hearings for example, didn’t seem quite up to speed on things.

You think?

Kara Swisher: Yeah, I think, I think. What did you think?

I was glad I was not on that committee.

Kara Swisher: Okay.

I was bummed at first, because I thought ... I want to get all three from Facebook, Google and Twitter in and I thought, “Oh God, they’re going to leap to it.” Then I was saying, “Oh my God. This is an embarrassment.”

Kara Swisher: Right.

And that’s a challenge, I mean, to try to sort people up through cyber. Obviously, some of my colleagues didn’t really understand how social media works and what the business model is. The only good news here is there’s nothing inherently Democratic or Republican about a National Security strategy that’s built around ... has cyber as a major component. There’s nothing inherently liberal or conservative about notions of how you put some guardrails around the ecosystem in social media.

Kara Swisher: But you have to know how to do it or know what to do. I mean, do you think Facebook ... I’m using Facebook as just one, but you were talking about Twitter and Google and others. Do you think they’ve been properly looked at by legislators?

I think it’s first ...

Kara Swisher: I mean, where do you think it’s coming from in terms of regulation?

I think, and again we’ve gone back and forth with Sheryl and Zuckerberg and a lot of the folks at Facebook on this, at first they blew off this threat. I first raised it in December of ‘16. They said, “It’s crazy, politicians, they — Russians — can’t intervene.” By the French elections, they were bragging about the fact they’d taken down 30,000 Russian-affiliated accounts that were intervening in France.

I think they were slow to the game. I think that last week when they came out with some other new transparency tools, pretty darned good. But transparency around paid political advertising, I just don’t think it’s going to be enough. That is not really where the rubber hits the road. Where the rubber hits the road is misinformation and disinformation in terms of somebody saying they’re here, but actually being in Moscow. And having that fake identity. And we’re still chasing, in a sense, static 2016 fake accounts. Next wave, as this crowd knows, you can talk about Deepfake technology and you can put somebody’s literal video image and face and voice realtime streaming a message to you and that have no connection to that real person.

Peter Kafka: But Sheryl and Mark now say, “Look, we’re spending a ton on humans to look at this stuff near term and we’re working on programming as fast as we can. And that we know this is a spy versus spy game, but we’re serious about it now.” Do you believe that they’re putting their best work into it?

I don’t think ...

Peter Kafka: We’re going to reduce our profits.

Here’s what my belief is: If we have some major event using platform companies, where the markets are rocked because of some misinformation or disinformation and an election is clearly overcome, you will have Congress overreact. What I’ve been trying to reach out to the platform companies to say, “Work with us on the front end, because if you leave it to Congress after a bad event, we’ll screw it up.” That means, I think they need to lean in more.

This issue is not going to go away. And what we need, I would argue, is a ... We need to at least start the debate. And I would argue there’s, again, probably three buckets. And I’ve got some ideas, but I don’t have a firm answer on where this ought to head, because none of these are ideal solutions.

I mean, you have one around identity and misinformation, disinformation. That would go from, do you need a fresh look at Section 230, which exempts all these companies from being treated as media companies? Should there be some of the same responsibilities that you have at Vox? There’s questions around, should you have at least some geographic indicator if a post originates ... If somebody says they are posting from an American [account], which indicates on a foreign basis. Should you have some identity requirement for actual identity validation? That may make sense in America, it may not make sense if you’ve got a journalist that’s trying to write important things in a place like Egypt or Saudi Arabia.

Should you have at least the right to know whether you’re being talked to or communicated with by a human being or a bot? So there’s the identity and misinformation bucket. There are serious questions around privacy, do you look at what the Europeans did, can you look at ... Should there be some fiduciary duty the platform companies or others have about your data?

There’s questions around competitions. I’m an old telecom guy, it use to be a real pain in the ass to be able to move from one telephone code to another until we legislated number portability. Should there be data portability so that yes, you can get off Facebook or get off Google, but can you take all of your cat videos with you? and-

Kara Swisher: I don’t have any cat videos.

And make it easily portable to another site? These are at least things that we ought to debate.

Kara Swisher: But see, that might have been the problem, this data portability was the issue with Cambridge Analytica. I mean, they were pushing data ...

Well, you can actually — and I’m not saying this is the right answer — you can say you can only give first-person approval to someone to use your data, so there’s no second- or third-tier approval process. Or you can say you own your data forever and the platform companies have a responsibility of somewhat compensating you, so that would create a market circumstance where you might have intermediaries between you as the individual and the platform company.

I don’t know what’s the right answer and I don’t ... Let me be clear, this is an area of enormous innovation. The last thing that I’d want to do is stifle that innovation or kneecap American companies. When you’ve got Chinese companies, one step behind, continuing to go for national ...

Kara Swisher: And American companies doing unnatural acts to get into China, correct?

And American companies basically giving away their birthrights to try to get into the Chinese market.

Peter Kafka: You’ve mentioned China now a few times, obviously a big issue for you. How do you balance legitimate security concerns versus the perception and reality that fending off Chinese competition is protectionism and we’re not actually trying to worry about our security, we’re just trying to keep competitors out of the country?

I think that maybe in traditional industries that would be the case. In tech, I think the Chinese are operating on a different rule book than we are. I don’t think ... It is a market economy with a giant asterisk that says their government will force foreign-based companies, not just American companies, to ... They will censor them, they will do things that companies will respond to, that they would not respond to any other nation in the world.

Secondly, the major Chinese tech companies, Alibaba, Baidu, Tencent, the host of others that this crowd knows about but most of the folks I work with don’t know about, that are the telco companies, the Huaweis and AZTs and others. They are all penetrated, deeply, by the Chinese Communist Party. And I believe at the end of the day, owe at least as much allegiance to their government as they do to their shareholders or their business plan.

And third is, their willingness to come over in a much more, not just whole of government, but whole of society way, to steal outside technology. That’s a real deal and we don’t ... If I get skeptical looks on this, that is a failure of me and the intelligence community to present that case to everybody in this room to convince them.

Peter Kafka: What do you want from Silicon Valley, from this crowd, everyone here is trying to get into the Chinese market or they’re already in it, or their supply chain is deeply enmeshed in there. Do you want them to pull out?

What I’d like them to do is to be cautionary. If somebody’s coming in offering you on early-stage, Chinese-backed, 2x what anybody else is offering you, maybe it’s worthwhile pausing. As we think about wireless providers, local governments, others, I worry buying some of the Chinese hardware, because it’s a lot cheaper, there’s no American telcos left. Telecom equipment left, because it’s a lot cheaper than the Europeans, there may be a reason for that.

I think often one of the things that maybe scarred me was Kaspersky Labs, the Russian-based company, that clearly was tied into Russia. We realized that in 2013, it took us till 2017 to get it off the GSA acquisition list. Even though everyone in the intelligence community said, these folks are bad apples.

Peter Kafka: Do you think that people are willing to really take a serious hard look at where the money is coming from, whether it’s China, whether it’s Russian investors, other sovereign wealth funds or wherever?

I think if that money comes with ties and a world where ... I go back again to where I think conflict will take place. If conflict is going to be less in the 21st century of rockets firing at each other, but instead, manipulation of data, manipulation of information, then yes. I think people, I hope, will recognize if a deal’s too good to be true, there may be a reason for that.

Kara Swisher: Let me ask you one quick question. You referenced Donald Trump tweeting at you, the impact of social media and things like Twitter, you’ve been scolding of Twitter and others. How do you think he uses that? Is he effective?

I think he’s brilliant. I think he’s brilliant when using it.

Kara Swisher: What’s it done to politics?

What it’s done, though, is it’s almost like, one of the things that some of the platform companies we’ve sort of talked through a lot is I don’t think they necessarily come with a political bias, but their algorithms are such that if you’re reading a story on the left, the next story has to be more outrageous to get your eyeballs to go to that and you just keep feeding the beast. And in certain ways, that’s what the president has done.

He keeps finding whatever the mean, the traditional approach, and it becomes each and every day, each and every week, slightly more outrageous. And at some point — whether it is in the firing of Mueller and that investigation, whether it’s asking the intelligence community or the FBI to give up classified information inappropriately for partisan purposes — I think we’re gonna have that moment where all of us in this room are going to have to decide on which side of the line we stand.

Peter Kafka: You don’t think we’ve hit that line already?

I think we have. For a lot of the men and women I work with, I’m great friends with on the Republican side, we’ve not hit it with them, but I think we’re, we get amazingly close. We got closer last week than I think people realized when the White House and some of its allies were trying to force revealing of classified information to a Republican-only briefing on intelligence. That’s just not the way any administration has operated in the last 70 years.

Peter Kafka: And when that line gets crossed, what happens?

When that line gets crossed, an awful lot of the senators I work with that said, “Don’t worry, Mark. I’ll be there if he crosses that line,” we’ll see what happens.

Kara Swisher: All right, on that note ...

Peter Kafka: Questions?

Nothing like cheering you all up in the morning session. Other than that, how was the theater, Mrs. Lincoln?

Speaker 1: Senator Warner, I wanted to ask, you just answered the question about your Republican colleagues, but what will the Democrats do if the president fires Rob Rosenstein or steps into the Mueller investigation? And the second part of the question is, Rudy Giuliani has said this weekend that the whole reason that he’s out there with this campaign is because they’re trying to fight against impeachment, meaning they think it’s coming.

I think the Democrats will be united in saying that was a red line. I started raising that issue vis-a-vis Mueller before the holidays and I think a lot of our initial reaction will be based on can we ... that barrier is broken. Will the country step up in a bipartisan basis or is he so, Mr. Trump, so kind of put us in our corners that people are willing to have an active, ongoing investigation of the president of the United States shut down for political purposes or have the director of the FBI or part of the Justice Department reveal confidential information. If our country has gotten that partisan and people don’t rise up in anger on that, we’re in a bad spot.

Kara Swisher: And then what happens?

Stay tuned.

Kara Swisher: So what do the Dem ... Go ahead, Luther.

Luther Lowe: Senator, yesterday Brad Smith, the president of Microsoft, suggested that the U.S. vs. Microsoft case led to Microsoft kind of missing a moment and oxygenated the markets, allowed for new entrants to come about. Do you think that antitrust enforcement is an appropriate way to address the concentration that gave bad actors the economies of scale, which led to the mass manipulation of our electorate?

I don’t think antitrust in the traditional way that American law has been applied, which is, the real basis is, is the consumer getting a cheaper price? Well, under that analysis, the consumer’s getting a cheaper price. But I do think there is something different between a Microsoft or even an Apple and the companies that, the platform companies who literally, we touch our phones 150 times a day, we give them more data about ourselves on a daily basis. That level of concentration is of a, I believe, of a different type.

Kara Swisher: You called it a growing beast?

I would call it kind of a “holy heck” moment in a variety of ways. In a certain sense, again one of the reasons I don’t want to come in heavy handed on this is that if we simply replace those entities, American entities, with Alibaba, Baidu and Tencent, and you have them combining their information with a billion people in the world of artificial intelligence, they start with a bigger N, that may give them a lead that no other company can catch up with. And I do worry that everything that I’ve seen on startups, if you’re kind of in the app space, your ability to go to scale, you’ve got one exit vehicle and that’s some of the big guys.

So where this breaks out, I’m not sure yet. But I think we ought to have these kind of ... I think we should not be afraid of having these kind of conversation. I don’t come in, though, as a former business guy and tech guy — I was in the wireless business, the co-founder of Nextel — I don’t come in with the notion that a regulatory framework is necessarily the right answer, because I’ve seen how that can screw up innovation, but completely unfettered or don’t worry, we’re going to self-regulate alone, I just don’t think that’s going to cut it.

Speaker 2: Senator, you referenced a Gang of Eight meeting earlier this week — or last week I guess it was — that’s sort of reflective of the kind of atmosphere in the House, and I think you and Senator Burr have sort of tried to keep the collegial atmosphere of the Senate, the traditional atmosphere of the Senate. Do you fear that going away? Do you see anything faltering in that sense of how the Senate has traditionally been, especially with the president’s attitude towards Senator McCain, etc.

Yeah, I think on a general basis, the Senate’s a small-enough club that you kind of know everybody. I think most folks do generally get along. Our political system right now doesn’t normally reward you for getting things done with the other team and that worries the hell out of me. I don’t think the best politics or policy are made on the extremes. And candidly, both American political parties are so firmly caught in the 20th century that they wouldn’t understand most of the sessions that are going on here.

I would like the political debate — and I talked about this earlier — the whole notion of work is changing. Nobody’s going to work for the same firm for 35 years. We had set up a social contract that was based on the notion that business, government and labor, you’re going to be a long-term, permanent, W-2 employee. We need a new social contract that would have portable benefits. We need to ...

Kara Swisher: You said the Democrats should be pushing ...

I think the Democrats, I’m not sure it would fall into either camp because it doesn’t have to all be run by government. I think we ought to recognize we’ve got a real failure to invest in human capital. Why do we treat investment in computers as an asset and human beings as a cost? When we did a tax reform, why didn’t we say we’ll give everyone here a lower tax rate, corporate rate to be competitive. We’ll put in place a meaningful training program for everybody that makes less than $80,000 a year.

If you don’t have that constant up-scaling, that notion that the old 20th century said it was the responsibility of the state to get you ready for that first job, then it became the private sector’s responsibility. That model is gone. Listen, I did really well. I am as much a beneficiary, first in my family to graduate from college. Failed miserably a couple times. I’ve kind of lived the American Dream. But I gotta tell you, modern American capitalism in its current form is not working for enough people. And there are I think capitalist ... There’s nothing that says the business cycle has to be only focused on short term-ism.

Tech companies that have all done well, that’s because the founders have kept the different class of stock that gives them the freedom to think long term, yet most of the business cycle, most folks are so committed on that two cents quarterly earning. Something is weird when the average hold on a public stock jumps from eight years to four months. That is not the capitalism that created America post World War II. So this ought to be the frame of where the debate’s at because that actually gives us a chance, because these don’t break down Democrat/Republican. They’re more future/past, and there’s real chance to put new coalitions together in the Senate or the House.

Kara Swisher: Absolutely.

Peter Kafka: Now you’re more optimistic. One last one.

Kara Swisher: Very quick one.

Speaker 3: Yeah, Senator, you mentioned that we’re really acting in the 20th century as it relates to things like warfare with Russia and others and yet we’re not acting in the 21st century, but a great deal of what’s necessary would be the U.S. government itself applying the resources and budget associated to the cyber area. Do you think it’s sufficient right now? And if it isn’t, what are we doing about it?

One, it’s not sufficient. Two, it’s gonna have to be done in collaboration with the private sector, the cloud providers. But here’s the ... I’ve not been all that successful in the Senate, especially my first term, because I spent a whole bunch of time worried about our balance sheet. We’re 20 trillion in debt. We just borrowed another two trillion dollars to provide a tax cut that was unpaid for. Here’s the American business plan right now, because of our spending on defense and entitlements and interest, of all the money you send to Washington, seven cents goes into education, infrastructure and R&D. As a venture capitalist, I would never invest in any enterprise that only spent seven cents on workforce, plant and equipment, and staying ahead of the competition. Yet that’s our American business plan because we’ve not told the public writ large the truth that we’ve got to make some choices.

China is making the choices of investments in cyber, AI, 5G, quantum computing. They’re on a rate to pass us in three years. That to me is a national security concern as well as an economic concern, but you can’t continue to have politicians say I’m going to only cut your taxes when America’s already 32nd out of 35 in terms of the 35 OECD nations in terms of overall tax burden. We’re at the very bottom of that. And we’ve got to be honest on our entitlement programs. I think Social Security and Medicare are great. But the math doesn’t work any more for the future generation, just because we’re living longer. And a little bit of truth and frankly that’s where I would urge you guys from the tech community, you need to help the politicians not only on tech, but also a little more urging with a little more truthfulness.

Kara Swisher: All right, we have to stop. Can I ask you a question?


Kara Swisher: Are you running for President?

No. I am ...

Kara Swisher: Just curious. You sound like you might be.

No, what I’m doing is trying to outline, one, trying to make sure we got our act together to make sure what happened in 2016 doesn’t happen again. Two, I do want to make sure that these ideas get into the debate and I don’t think the political divide right now with I’m not sure where Trump is taking the Republicans or a kind of only top-down redistribution plan that the Democrats may have, I’m not sure either one of those are where the economy’s at right now.

Peter Kafka: He said no.

Kara Swisher: So, no? Yes?

I’d say that’s a no. I’d say that’s a no.

Kara Swisher: All right. Thank you very much.

Peter Kafka: Thank you, Senator.

Thank you. Thanks, everybody.

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