Catherine Rampell and Michael Steinberger: Trump Wants to Cook the Books

Welcome to the Bullwark podcast. I'm your host, Tim Miller. We have got a double header today. I told you we get serious. I've been wanting to do an episode focused on Palantir for a while now. and was happy to have a chance to talk to Mike Steinberger, who's got a new book about Palantir and their CEO, Alex Karp. So we got that in segment two. Also wanted to throw out to you, I got this flag to me. I'm not going to be there. I'm in New Orleans. I know there will not be actually any bulwark people there, but Bullwark fans are doing a meetup in St. Paul tonight. the dual citizen brewery in the Twin Cities. So go, if you're listening, go meet some other people. I thought I'd, you know, help the industrious bulwark listeners who are trying to have revelry and have gatherings this holiday season, encourage anybody else in the Twin Cities to go check it out. But first up, We've got my colleague. She's the economics editor at the bulwark. She writes the newsletter receipts, which is published on Thursday evenings. She also co-hosts MS Now's The Weekend Prime Time. It's Catherine Rampel. Welcome back to the show. How are you doing, girl? Doing well. Doing well. Or as well as well as, as well as, as well as, as well as, I guess I'm obligated to say. That's true. We're in the holiday season. We don't need a caveat, right? You know, things are good. Personally, I mean, you know, the world is full of torment. Always. True. Maybe it's feeling a little more acute right now. It's certainly feeling a little more acute in the economy. How about that transition? I wanted to talk to you about we had some delayed jobs numbers that came out because of the government shutdown and the fact that the president was considering a scheme to cook the books that isn't going well so far. And the numbers that we saw yesterday revealed an unemployment rate that said a four-year high. even though I should say it's pretty low, you know, compared to like past really bad recessions. And just otherwise, a lot of softness in the economic numbers. What did you see? What cut your eye in particular? Yeah. So this was, as you said, a delayed report. Everybody's kind of looking around to figure out what's going on in this economy because it is very confusing. Everybody specifically including the people at the Federal Reserve who have to actually act upon. these data beyond the fact that the unemployment rate went up. We now have measures suggesting that in three of the past six months, we actually lost jobs. We have also lost jobs in manufacturing for the past seven consecutive months. So manufacturing was supposed to experience this big renaissance under Donald Trump. That obviously has not happened. So, yeah, there's some sources of concern. As you point out, the unemployment rate right now is still not super high. It's 4.6% that may not be super comforting if you are among the 4.6%, obviously. But it's rising. And probably the reason why it's rising, the reason why we've had some job losses, and we can get into whether we should even take those numbers at face value, they're probably overstating the health of the economy.

Part of the reason why all of that's happening is that we have some pretty destructive economic policies that are weighing on the economy. Let's talk about that. I heard you mention that yesterday with Sam as well, which was that the Fed is looking at this and I guess determining that they think maybe the picture of the actual economy is maybe a little uglier than what even these. really weak numbers are showing. Yeah. So Fed Chair Jerome Powell last week said at his press conference that the Federal Reserve staff think these numbers are probably overstating the number of jobs. We're adding each month by about 60,000. So what does that mean? That means that... If we had last month, as the number showed, about 60,000 jobs added, probably if you adjust it by what they think the error is, maybe we had no jobs added. And in previous months, when we had slight job losses, they might have been much bigger job losses. To be clear, this is not an accusation that the Trump administration is cooking the books. Rather, this is about some difficulties in measurement around the time that an economy might be turning. Because, like, based on the way that the surveys are administered, companies that are closing are no longer responding to surveys. So maybe you're only getting responses from companies that are still, you know, doing okay. And so if you were actually to, like, adjust the data a little bit, you know. In retrospect, they will do this. They will do revisions if you were able to adjust the data accounting for all this stuff. The economy would probably look a little bit worse. It's just, it's a methodological challenge. Again, it's not about malfeasance. There are other kinds of malfeasance I'm worried about. And Donald Trump, I think, very much wants to be cooking the books. But there is no evidence to date that he's actually doing that. What are you worried about? With respect to his statistics. Yeah. Well, he has, for example, fired all of the people who. compile the poverty guidelines, which determine who is eligible for food stamps, Medicaid, other kinds of benefits. So how is that going to work out? We don't know. He's gotten rid of a bunch of the health surveys. He's cut the funding for a number of the other statistical agencies. So they've had to cut a bunch of their measurements. So like, for example, at the Bureau of Economic Analysis, that's the... agency, the independent agency that does GDP statistics, they historically have tracked a bunch of other things too, like investment in the U.S. economy by foreign companies. And they've had to cut back on a lot of those measures because they just don't have the money for it. They don't have the resources. They've lost whatever it is, like 20% of their staff this year. And all of that means that they just, like, they can't measure stuff. And most of those are things that maybe most that, like, people don't pay that much attention to. But Donald Trump is making lots of very bold claims about foreign investment in the U.S. economy. And simultaneously, we're making it much more difficult to actually measure if he's keeping his promises. So it's a lot of stuff like that that, you know, on climate, on LGBT community, on people of color, on.

gender in particular, there's a lot of things that they're deliberately either censoring, firing people, or just cutting back funding so much that like civil servants can't do the work that they're legally supposed to do. You mentioned that, you know, so the Fed did a rate cut in part based on assessment of the economy is even worse than the bad numbers look. As a result of that, I don't know if anybody is like me, they've been getting calls from the mortgage company trying to get me to refi over the past couple days. But I've seen some reports that actually in some ways mortgage rates are moving higher after the Fed rate cut and that loan demand is going down. Rate cut also risks. further exacerbating inflation issues. Yeah. Like, what's the sense of what's happening with all that? I mean, it feels like we're at least at a little bit of risk of the dreaded stagflation problem. Yeah, I think there's already evidence of that. Inflation has picked up since Trump's Liberation Day in April. Those things are not unrelated. You know, inflation had been sort of like trending downward for a long time and now it's been picking back up. In addition to higher prices, higher price growth, you're also seeing, as we've been discussing, some job losses and some slowdown in the economy. That's the stagnation and the inflation that, you know, come together and become a stagflation. A beautiful word. A beautiful word. Like groceries. Exactly. It's something people don't say anymore. Trump is actually bringing it back this time. But he literally is because the explanation behind both of those things, those bad things happening is tariffs, right? Tariffs raise prices. That's the inflation part. And tariffs also weigh on the economy and make it harder for businesses to invest and grow and buy stuff. That's the stagnation part. So Trump, again, is single-handedly. dragging down the economy and also making it much harder for the Fed to do its job. Because the Fed is supposed to both promote stable prices and maximum employment. And tariffs make both of those objectives harder. And the thing you would do, if you're the Fed, to address one of those problems is the opposite of the thing you would do to address the other one of those problems, specifically that if you care about inflation, you would raise interest rates. If you care about stagnation, you would... cut interest rates. So they're in this really tricky situation where, you know, they're damned if you do, and if you don't. Donald Trump obviously wants them to do, take one of those paths, which is to cut interest rates, which they have been doing. He wants them to cut even more. But as you point out, the real risk there is if they do what he wants, which is to like ratchet rates down to zero or one percent, you could have a huge burst. in inflation. But that's going to be the story of the next year, I think, that he's going to be really tussling with the Fed. He's, you know, we can talk about this if you want, but he's trying to put some kind of sycophant on the Fed board as the new chair to replace Jerome Powell. We'll see who he ends up choosing. But he's also probably trying to like.

plant other more pliable people into the other fit positions. Yeah, let's put a hack in there like Kevin Hassett to just really step on the gas of stagflation. That'd be great. There's a counter view. Maybe we're just Debbie Downers. Maybe we have, maybe we're afflicted with TDS. Let's listen to the counter perspective from the vice president of these United States. President Trump last week gave his economy a grade of a plus plus plus. What grade would you give the economy today? A plus plus. A downgrade. I believe the American people are going to reward us because the American people are smart. They know Rome wasn't built in a day. They know what Joe Biden broke is not going to get fixed in a week. A plus plus, Rome isn't built in the day, not going to get fixed in a week. Not going to be fixed in 11 months, apparently. What do you think? Well, it's especially not going to get fixed if they keep on doing things to break it further. Like, it is true that Donald Trump came in promising something that he could never deliver, which was to lower prices. That is not something a president can do, at least not the aggregate price level. If the overall price level in the United States were... were actually falling if we were experiencing deflation, that would mean if the economy is very sick. Like, that's what happened during the Great Depression. He can't deliver that. But not only can he not deliver that, he can't even, like, keep prices stable because he's doing all these things to make stuff worse, tariffs and, you know, muddying the Fed and deportations and everything else. It is notable that... Trump did the four pluses and JD only the three. He might be brought in for spanking. Probably. Something to think about. Do they have a plan? So Trump's giving a speech tonight at 9 o'clock. He's announced. We don't know what it's about at the time of this taping. My guess, we get to see if I've realized this is sort of the pundit crystal ball attempt here, is that he's going to mention that they're going to have Trump bucks coming for people, Santa Trump. I don't know if I'll actually do that tonight, but that they've been. Talking about that as a possibility that the tariff revenues have been so great that we get to reward the American people by giving them some of the money back that they've given to the government through taxes and tariffs. No, the American people didn't do it. the foreigners, the evil foreigners are paying the tariffs, according to Donald Trump. At my coffee shop, it tells me that what my tariff, additional tariff cost is. We love the people at the French truck for just like the little dig at the Trump administration is letting us know what the little tariff cost is. So that is costing me, not the Colombian coffee bean farmers. I know you're aware. And that's one potential thing. Do they have another? What is their other? What is the pitch for how it'll get better? I think the only plan Donald Trump ever has is sending out a check with his name on it. And he has been pitching that for months now, both as a solution to like people complaining about affordability, as a solution to people complaining about their healthcare premium specifically getting more expensive, just send people money.

And Donald Trump specifically is often claiming that he can use the abundant tariff revenue to pay for all of that. Of course, they've also earmarked the tariff revenue to pay down the debt. And free IVF. Didn't we vote for the tariff money who's going to pay for free IVF? Everything. There's just so much. There's unlimited tariff money to pay for everything. Of course, that's not the case. And in fact, the Supreme Court may soon rule that they have to give all that tariff money back. to your coffee purveyor and other companies that have actually... What would happen if that happened? And they would challenge it, I guess. But who do you challenge? Well, this would be the Supreme Court. So what would happen here? There would be, in one sense, it could be like a real shot in the arm to the U.S. economy because all of the sudden you have... your coffee shop, but, you know, retailers and every other company in America that has been footing the bill for these tariffs, suddenly they get a big cash infusion and they can start paying the bonuses that they've been holding off on or they can start buying up more inventory that they need, whatever it is. So that's one possibility. Now, a lot of companies have already been counting on that happening. So you may not actually see a big change in behavior. Like they were already assuming that the tariff money is coming back. to them. And so that's part of the reason why they may not have been raising prices as much as had been predicted or haven't been cutting back as much. So I think you'll see some limited stimulus, ironically, from, you know, from the Supreme Court like undercutting Donald Trump's primary economic agenda. So you'll see that. I don't think you'll see prices come down. Probably paired with some dubious attempts at new tariffs, though. Oh, yeah. So that was, yeah, that was going to be part two of all of this, which is that the Trump administration has already been lining up alternative tariff mechanisms, which, to be clear, they could have been doing all along. Like, there are a bunch of things that they could have done that would be on more solid legal footing than what Trump has been doing. They require some process and an investigation and reports and things like that, not just Trump like sneeze tweeting a new tariff rate. So, yes, they're already lining that stuff up. And to some extent, they could probably cobble together the same kinds of tariffs that they, you know, or at least similar tariffs to what they've been doing just through a different legal authority. Those will still be challenged. They take a little bit longer to put in place. And they might be a little bit harder for him to use his leverage when he's beating up on our allies, right? Because he can't just like suddenly say, aha, you France, you've pissed me off today. So I'm suddenly going to have a like a new tariff on French wines or whatever or EU wines. It'll be a little bit harder for him to, to bully people with them. But. They'll do it. They'll still be destructive to the U.S. economy. They'll still be destructive to our relationships with our allies, and they'll still probably raise prices. It'll just be on a slower time frame. Your newsletter tomorrow is a little preview here. It's going to be about the immigration policy and what it's meaning for construction jobs. We talk, obviously, on this pot a lot about the humanitarian side of this horrific immigration policy. But talk about what the economic impact is, what you're seeing.

So there has been a rash of these immigration raids on construction sites, particularly on residential construction sites, where it seems like immigration agents are just kind of like driving around and looking for a house in a suburban neighborhood that is having its siding redone and then rounding up all of the Latino-looking immigrants who are working on it. This has happened in a lot of different places around the country. I think actually there was a case. recently near you, right, in one of the Nola suburbs. Yeah, Kenner. Yeah, exactly. That's what I was thinking of, where they, you know, rounded up some roofers. And in Minnesota this week, there was another case where some immigration agents basically roped off a house that was under construction where, well, it was like, it wasn't even quite a house yet. It was the framing of a house. They chased the, a couple of the workers up to, like, the tippy top of the frame. the roof of the frame, but it's like little spindly sticks of wood. It was sub-zero temperatures, and they tracked them up there for a couple of hours, and they wouldn't let people bring them warm blankets and things like that. And ultimately, one of the workers got taken away in the ambulance. Anyway, there are these horrifying things going on. As you point out, like, humanitarian consequences of this are awful. In my view, these are basically like pogroms that are going on, and they're putting people's lives at risk. But beyond that, there's this question that has been nagging me about why aren't the companies that are hurt by this doing more? Even if they don't care about the dignity and safety and health of their workers, which they should. Presumably they care about their bottom line. You know, they are losing workers. They're potentially losing customers. It's become a lot more difficult for them to just do their jobs, particularly since, like I said, they're not just going after people who are undocumented. They're rounding up anyone who looks Latino, including U.S. citizens. There's a big case over one U.S. citizen who's been detained multiple times in Alabama working on construction sites. So you'd think that the construction companies would. push back a little bit and they haven't, or at least not very publicly, not very vocally. I did notice on the jobs report that there was an uptick in construction jobs. And would this be the JD case here that like doing this has created some jobs for U.S.-born Americans? And it's a tiny uptick. It was like 20,000 jobs or something. Yeah. Could there be something to that? I don't think so. You know, these are jobs that are very demanding, difficult backbreaking jobs. They're very hard to fill. It's not like I think Americans were being turned away. from these positions. In fact, construction companies have been complaining about labor shortages for years at this point. So it's not like if you get rid of the immigrants, suddenly there'll be a lot of new openings for Americans. Again, take all of these numbers with a grain of salt because there are a lot of measurement issues right now. If you took them at face value, what might be going on? Well, there is a huge need for new housing.

Right. Housing prices have gone through the roof. People need new homes. And so I think there's still demand for new homes. The question is, will there be workers to build those new homes? But if there are any workers available, yes, I think firms are scooping them up. But the broader point here is I am like slightly obsessed with this question of why isn't the private sector doing more to push back against Trump, not for reasons of moral clarity or caring about democracy, but because. he is destroying their business model. And he is making it much harder for them to operate. And, and, you know, there are different ways to see all. But that's what I'll get into my newsletter tomorrow. It'll be interesting to see this last year newsletter. Being built, Crystal talked about this couple of weeks ago, just kind of reminiscing about, you know, the good old days when we were Republicans to do consulting for interest groups, like back in, you know, late aughts. And it was like, the pushback from the chamber and the brown table and all these groups to like various things that Obama was doing was overwhelming and that that's absent now. Oh, yeah. I remember in the Obama years, there was this constant complaining about regulatory uncertainty, economic policy uncertainty that because Obama was supposedly like tyrannically using the power of the executive branch and, you know, we weren't using this deliberative process of, of, of setting laws and policy. And today, you know, as I just said, it's like Trump just has like a fat-fingered tweet about tariff rates and that will jack up rates, you know, fivefold from one minute to another. And you just, you don't hear very much from these interest groups. I understand why individual companies might be worried about sticking their neck out, an individual home builder or a law firm or others. You know, I get that they don't want to put a target on their back, but. the whole point of these industry groups is that they are supposed to represent the collective interest of businesses, whether in a particular sector or, like you said, chamber or business roundtable nationwide. And they're supposed to like... shield some of the individual companies from being a target, and even they are pretty mum. Very mum. All right. Last topic. Last bad sign about the state of affairs and our failing competition against China in the way that Donald Trump's failing our economy. The pioneering American maker of Rumba iRobot said that it has filed for bankruptcy. Control of the company will be taken over by its Chinese supplier. It's sad. Yeah, I feel like Rumba is a nice, tidy little allegory of how both parties have completely failed business, in particular manufacturers, for that matter. So Rumba, you know, is this sort of iconic American company in that... I think it was the last of the domestically made robot vacuum makers in the United States, which is like a pretty niche thing. You know, I don't know if it's of strategic. I just mean like, I don't know if it's of strategic interest for us to have a U.S. robot vacuum company. But apparently politicians have, you know, think otherwise. They think we should be making everything here, including tube socks. So.

This company was started by MIT grads in the 90s. I believe they had their big hit. It was, you know, robotic experts. They had their big hit with Rumba. The company is called I-Robot. They had their big hit with Rumba in the early 2000s. And, you know, there were all of these viral videos of cats and babies riding around on these little robots. By the 2020s, they were facing more intense competition from Chinese. vacuum makers and they plan to sell themselves to Amazon for like $1.4 billion. And of course, the left was very upset about this because Amazon big bad company, they're not allowed to buy anything because big is bad. There's like this whole theory of the case on the left and the Neo Brandeisians. And there were all of these like crazy, almost conspiracy theories about, oh, well, Amazon's going to like have the map to your living room and that's going to be really bad. Oh, you're laughing, but it's seriously true. Like, you know, because they couldn't really come up with a traditional consumer welfare based. argument for why it would be so bad of Amazon, which didn't already have a robot manufacturing arm. We're very concerned about monopolies in the vacuuming space. Yes, exactly. So, you know, the FTC in the United States wanted to take this down. They didn't really have the legal tools to do so. There's some evidence that they coordinated with their European counterparts who have a much broader remit. The Europeans basically blocked this merger. Meanwhile, I-Robot was like, hey, guys, we're like maybe going to go out of business if this merger doesn't go through. Amazon ultimately abandoned it because it was clear that it was going to get blocked. You know, like I said, it would have been tough to win in U.S. courts, but in the EU, it works differently. Then there was a whole investigation in the house about this coordination thing. Did Lena Khan, the FTC chair, like illegally coordinate with the Europeans to do what she couldn't do under U.S. law, whatever? Then Trump comes in, tariffs away any hope. of their survival because they do need inputs from abroad. And now they're... Now the Chinese own it. Yeah, for cents on the dollar. So it's like, you know, the stupidity of both parties really took this company out of commission. And again, like, I don't know if it really matters if the Chinese own this company going forward. It matters. It matters. We need to beat the Chinese at something. We can't beat them at the robot vacuums. This was American ingenuity. Yeah. We've handed it away. Yeah, I mean, my general view is we overweight the value of manufacturing in the U.S.

Across the board. It's about pride, all right? It's about pride and patriotism. But whatever, let's say you grant people the objective of like, we want this manufacturing renaissance, we want to make more robot vacuum so cute little babies and cats can ride around with them and create YouTube content. Whatever. With an American-made vacuum, we're doing everything we can to undermine the possibility for U.S. companies to build. products like that i did a massive rant about people got to watch out for the Great power struggle on this podcast of the bulwark versus China because I'm so unhappy with the way that Donald Trump is prosecuting that. We have to get to other topics today. But if people want to hear my 20-minute rant about this was not my best rated YouTube video, but it's okay. The momentum is building. I'll put a link in the show notes. Catherine Rampel, thank you for your expertise as always. Thanks for having me. We'll be talking to you soon. All right. Up next, Mike Steinberger on Palantir. Stick around.

All right, we're back. He's contributing writer to New York Times Magazine, also author of the new book, The Philosopher in the Valley, Alex Karp, Palantir, and The Rise of the Surveillance State. It's Mike Steinberger. Hey, man, thanks for coming on the show. Thanks for having me. Happy to do it. Look, as I was reading your book over the weekend on Palantir, I came to the realization that I'm much more familiar with like. the narrative and discourse around Palantir and how they kind of exist in the public conversation than I am about the nuts and bolts with the company and like what it is it does and its origin story. So I assume a lot of listeners are in the same boat. So I kind of wanted to start there before we got into the politics of Palantir. Give us a little 101 about the company. What does they do? and maybe a brief origin story. Yeah, there's a lot of mystery surrounding this company. Part of it is because much of the work they do is shrouded in secrecy. They work with the CIA and the Mossad and other intelligence services. They're at the forefront of autonomous and semi-autonomous warfare. So there's a lot that they can't talk about publicly. But in brief, Palantir is a technology company that specializes in data analytics. It sells software platforms that enable organizations to make better, faster use of their own data. There's typically large organizations like the U.S. Army, which is a Palantir client, an Airbus, which is also a Palantir client. They collect massive quantities of data on a daily, even hourly basis. Data is messy to work with. And there's a lot of it. Palantir software. helps them bring order to this chaos, if you will, and then helps them find answers in the data. Users run queries and the software finds patterns, correlations, connections, trends in the data. So you can think of it almost as a digital detective board in some sense. And Palantir has its roots in the war on terrorism. And it was created, essentially, to help the U.S. government find terrorists. So that's very much a digital detective board. Very powerful technology pulls in a lot of data very quickly and generates answers very quickly. So that's in a nutshell what Palantir does. You talked about like the kind of how came out of the war on terror, which I guess I realized, but the degree to which like that is the company's, you know, origin where you're writing that how candidates initially, including just kind of like engineers and people that were behind the scenes had to demonstrate. to the founders that they had a passion for defending Western civilization and killing terrorists. Like, that was like part of that original deal. Yeah, like if they detected in any job candidates, you know, a kind of desire to, you know, just collect lots of stock options and get rich quickly, you know, if they sensed that they were, you know, just in it to make money or were squeamish about the company's mission, about killing terrorists. they would not get the job there. So if you were going to be a successful candidate at Palantir, you had to show great enthusiasm for the mission, which was to help the U.S. and the war on terrorism and more broadly to defend the United States and the West. That was the company's mission. That's what they told themselves from the start. So you mentioned it's kind of like a digital detective board. I'm still trying to kind of figure out exactly the scope and scale of what they're offering. So on the one hand, you could listen to.

Their description, and it sounds like it could be like Salesforce, you know, it could just be like a software platform. Yeah. But then, you know, and your opening anecdote, you talk about how Palantir was brought in during the Biden administration to help with the Afghanistan evacuation. And as you write about it, it's like, I don't know, right in front of me, I think it was like 150 staffers from Palantir went into. the Pentagon and into the White House and we're like working side by side with government employees. So, I mean, to me, that that's more than just like offering a software product. Oh, no, it's more than that. And that's always been kind of the wrap on Palantir's that, you know, it's a technology company, but there's also a strong consultancy aspect to it. Less so nowadays, but it's certainly in a case like that when. Basically, you know, Biden had ordered, you know, withdrawal and then expediting withdrawal. And so they, to put that into effect required not just the technology, but a lot of hands-on help building out these virtual pipelines to merge data between government agencies. So they still do that sort of stuff. I mean, they call it a surge where they put a lot of people on a problem. And a lot of their work begins in moments of crisis. So that's what they do. It is. Very powerful technology, but sometimes it also needs, you know, the help of their what they call forward deployed engineers. So a combination of man and machine, if you will. I thought the Afghanistan example was interesting because, you know, Biden took a lot of heat for the way that that withdrawal was handled, including here on this podcast. Palantir kind of came out Scott Free on that, like it was still with their aura. Like there was a lot of discussion about the way that they failed. Well, yeah, I mean, but it actually, it worked. I mean, you know, the software did what it was supposed to do. It, you know, it could have been a lot worse because there was just, it was absolute chaos from everything that I was told. Just enormous logistical challenge that the joint staff couldn't solve on its own. So Palantir's technology did actually work, you know, well in that. case, but the problem was on, you know, the political side and just, you know, the fact that it was done in such haste, that was the problem. And so it's looked at as a disaster, but actually the number of people that were, you know, evacuated from Afghanistan in such a short time was kind of remarkable. What about the kind of claim that like Palantir has spyware, spying, right? Like there's one point that's like analyzing data or looking at data. It's another thing if it's, you know, watching. Yeah, it's also important to understand that it's not surveillance technology, but it does help organizations that deploy surveillance technology do their jobs more efficiently. So law enforcement, intelligence services. So Palantir is like one step removed. You could say if we are seeing the emergence of surveillance state, Palantir is an important part of that, but it is not surveillance technology in and of itself. And again, it is important to recognize that. Palantir doesn't oversee how clients use its technology. It is not monitoring the way the CIA is using it. It's not monitoring how Airbus is using it. It's the clients who use it.

as with any other software program. I'm going to dig in some of that and some of the controversies and things that people, the concerns people have about it. But the book also gets into the founder, CEO, really, Alex Karp. The founder, people always say it's like Peter Thiel's Palantir. So let's start with that. I mean, he was the founder. It was his idea. But like, is he in board meetings? Are him and Alex talking? Like, what's his relationship with the company at this point? Yeah, no, he's a co-founder. The idea for Palantir did originate with him. It grew out of PayPal. He had this idea after 9-11 that the anti-fraud algorithms that PayPal had developed could possibly be reconfigured to help the U.S. government in the war on terrorism. So Teal had the idea for this. He and Karp were classmates at Stanford Law School. They reconnected after Karp went off to Germany and pursue a doctorate. Karp came back to the Bay Area. That's when they reconnected when at that point, Teal was. trying to get Palantir off the ground. But he has never had any day-to-day involvement with the company. It's certainly not since the earliest days anyway. However, he is the chairman of the board. And he and Carper very close. They're close friends. Friends? It's hard for me to imagine Peter Thiel actually having a friend, like a friend in the way that I describe friends. Are they colleagues or friends? I think they are friends. Like, I know they get together for dinner periodically. I would not be in a position even after all this time working on the book on being able to comment on just how close that friendship is and whether it's the kind of friendship that you and I think of as friendship. That I don't know. Well, they're both a little neurodivergent. And I carp is like embracing that term for himself now. So, I mean, the way that they think about friendship is probably different than the way I do. It's, yeah, I think it's a little different than, you know, you and I going out for beers with friends. It's just, it's. It's not the same thing, but they do consider themselves close friends. What was interesting was, you know, they were political opposites. I mean, part of the reason they bonded at Stanford law, they bonded over their shared... dislike of law school. They were both miserable in law school. And they like to argue. They like to argue with each other. Karp considered himself a socialist at the time. And Teal, of course, was famously already a libertarian. And so there's been this interesting thing for most of Palantir's history where you've got Karp, I'm a progressive. Teal is libertarian drifting further and further to the right. And it was actually a healthy, a useful tension, shall we say, for Palantir, because, you know, Teal's a bit of polarizing figure for years. And yet you've got this company at the nexus of technology and national security being run by this guy who looks like a mad professor, Karp, and who says, I'm a progressive. I'm a neo-socialist. And if it didn't assuage concerns that people had about Palantir, it kind of threw critics for a loop a little bit for a very long time. When you said that way, it's kind of similar to my love story with my husband. He was a Democrat. I was a Republican. We've met in the middle as kind of neoliberals now. Peter was a libertarian. Carp was a neo-socialist. They've met with kind of a desire for authoritarian fascism. So, you know, it's a little different in that sense. Well, it is. And actually, in the last couple years, I would say that carp has definitely moved. One of them has moved. And it's not teal. It's carp.

Carp is now much more closely aligned with Teal's view. And if she's like immigration, the daylight that existed between them, there's less of it now for sure. And that's because carp has moved. Many people assume that like me, like didn't really know. I seen the name or didn't know anything about him. And then there's this like video of him with Andrew Ross Sorkin a couple weeks ago that like went viral online where he is, like he can't sit still. Like there are jokes about like, is this kind of cocaine or like what's happening with him. And was involved. This I know, Mexican Coke. He drinks Mexican Coke before television appearances and other interviews to get a sugar rush. So. As for other, yeah, I can't comment on other stuff, but I do know that it was involved. So tell us about this guy. I mean, besides like the origin story with Teal, like what else should we know about Alex Karp? Interesting backstory grew up in Philadelphia. He's biracial. His father's a Jewish pediatrician, his mother's black, an artist, very left-wing household. I mean, he, as he tells it, he and his brother spent a lot of time as kids being taken to anti-war rallies, anti-nuclear rallies by their parents. Carp is severely dyslexic. Pretty young age, he kind of came to feel that he had some strikes against him in this world, being biracial Jewish with a learning disability. And he carries this very acute sense of vulnerability into adulthood and essentially carries a right to Palantir. You know, Palantir's mission resonates very strongly with him because he thinks that, you know, only in a society that offers robust protection for minority rights. rule of law is a very powerful force. Can someone like him, you know, with his background, survive and prosper? So, you know, when Palantir talked about defending the West, you know, for most of Palantir's history, that meant defending liberal democracy. And Karp, you know, took that very personally. In some sense, you could say Palantir existed to help make the world safe for Alex Karp. That was how, you know, he believed he was doing, helping make the world safe for millions of others. But it was a very personal mission for him. Yeah. And you write at this point, he's like his biggest fear at one point is fascism, right? And is protecting the West. And this is where like things start to come into tension with now, right? With his, what your perception is of what Trump is doing. And like they're doing work with ICE. they're doing work with, as we've mentioned, the surveillance state, like, how does he kind of process that? Like the idea that, you know, the mission of the company is to protect Western civilization and liberal democracy and that now there are threats to that coming from kind of inside the house. Yeah. Well, interestingly, you don't hear much about liberal democracy anymore. When he talks about defending the West now, it's not really about defending liberal democracy. It's about defending the West as a sort of cultural entity. And in that sense, he is very much aligned now with Teal. Because, you know, Teal, you know, years ago, he wrote this famous essay in which he said that, you know, democracy and freedom by which meant economic freedom, we're not compatible.

He was on the side of economic freedom, not democracy. And, yeah, so Teal's conception of the West was, yeah, something is, you know, basically a bunch of countries bound by a shared Judeo-Christian ethic and, you know, by varying degrees of adherence to the free enterprise system. Karp had a different view. Karp's view was Palantir's view. But now with Karp, you know, certainly in the last few years, even before Trump returned to office, but especially since Trump has returned to office, when Karp talks about the West, it's as a cultural entity. He's not talking about it as a political project any longer. And his views have shifted on that, for sure. And you mentioned the views shifted maybe even a little bit more aggressively after October 7th. It's an interesting, when you think about how he kind of processes his cultural identity and you kind of write about this, but how he's very in tune with like the Jewish side of it and, you know, defending Israel as part of defending the West. It feels less in tune or less comfortable talking about at least, you know, kind of like the biracial side of it with his mother. Talk about that a little bit, how that might inform how he's thinking about this moment. Well, it's really interesting because, you know, when he was, his brother spent a lot of time talking to me. His brother's two years younger, lives in Tokyo. And other people said the same thing that, you know, when he was in college and high school, Karp identified very much with his black heritage. I mean, his brother said he was a young black man. And he doesn't. disavow the black side now, but he is, it's the Jewish side that is front and center for him. It's been that way for years. And October 7th was something that obviously it shook many people, but, you know, shook carp to a great extent. You know, he, as I said, identifies very strongly with his Jewish heritage, has been a staunch supporter of Israel. Palantir's had involvement with Israel now for about 10 years. The Mossad began using its software about a decade ago. You know, when October 7th happens, carp is shocked and, you know, immediately, you know, says Palantir, they took out a full page ad in the New York Times, about a week after the atrocities in Israel, saying Palantir stands with Israel. Palantir is going to give Israel everything it needs. It was another myth for the intelligence gathering software, I guess I should say. I don't know that she's been working for 10 years. It's interesting because I couldn't catch that. You know, it's kind of amazing that didn't happen. Now what they would say is, you know, they weren't being used by Shinbet, which is the domestic intelligence service in Israel. They weren't being used by the IDF at the time. That has changed since October 7th. Now all, you know, the military and intelligence apparatus in Israel, all that's using Palantir since October 7th. And after October 6th, 7, it's when I really began to see the change in Carp's politics. He had been expressing frustration with the Democrats for a long time. He was a major Democratic donor, but have been expressing frustration with the Democrats and progressives for a long time over things like immigration, over things like identity politics. But after October 7th, that is when his turn to the right really begins, really accelerates, I should say. For instance, on the issue of immigration, he had seen immigration, you know, the chaos of the border.

He'd always viewed that as bad for the Democrats. It's a toxic issue for the Democrats. After October 7th, he decides that immigration is bad for American Jews. which is an interesting place to land, but that's where he landed. Certain types of identity politics are important and okay, actually. Everyone is exactly right. There's kind of a hypocrisy here. He's scorning the Democrats for being enthralled to identity politics, but it is now his Jewish identity that is driving his decision-making at Palantier and driving his political metamorphosis. And, you know, this is when you really see him starting to get on board with Trump. This is, of course, before the election, but you can, you know, he thought. Trump was going to win, and I could see him starting to find reasons to get on board with him. So is it just my perception, or is it accurate then that he was not as public facing? before this metaphorosis, right? Like the political metamorphosis, does that dovetail with him doing more, you know, kind of public commentary? Or did I just notice the public commentary more because, you know, it was a little bit more outrageous that he was trying to side with the right? Well, for a while, he was kind of low profile. I mean, during the first Trump presidency, when Palantir was caught up in a lot of controversy, he was working with ICE then. But during the first Trump presidency, basically. Almost every article about Palantir would say Peter Teal's Palantir, even though Teal wasn't running the company. Carp was sort of not nearly as well known as Teal, and Teal's name was Clickbait. You know, in the last couple of years, Carp has gotten to be much more well-known. Part of that, of course, is the stock has taken off. You know, when the stock was languishly at $10 a share, which wasn't that long ago, not that many people are interested in hearing from you. When the stock, you know, quadruples over the course of a year and goes, you know, from $50 to $200. So he's gotten more, you know, more invitations to speak at events. I'm not sure that five or six years ago, Andrew Ross Sorkin would necessarily invited him to Dio Book, but now he is, now he's an A-lister and people want to hear from him. So you're seeing more of him these days. So I took the ICE question of this time around. Carr told you that if Palantir had stopped the work it does with ICE, he's worried that then other clients, people with the military, might think they're an unreliable partner. I want to hear more about that conversation. And you could imagine, I mean, I made the joke about Benioff earlier in Salesforce, but like Salesforce was on their platform to ICE too, like, which I don't.

I don't support. Like, you can imagine a situation where Trump is coming in. They're claiming they're going after criminals. You know, this is in line with Palantir's mission. They're like, hey, we're going to help you find these really bad guys, the drug traffickers, maybe even terrorists that have gotten into the country. And you can use our platform to do that. You know, now. After we have enough months here to see that like that isn't really the main goal. And they're going after and hassling a lot of regular people. And they're hassling a lot of citizens even or people that haven't committed any crimes. I'm just wondering how he's thinking about their partnership now. Well, I mean, he's given no indication that he's having any misgivings about it. During the first Trump presidency, as I said, Pounder was very involved with ICE. It was working with. another part of ICE. So it was only kind of tangentially involved with removal operations during the first Trump presidency. But there was a lot of controversy surrounding its work with ICE. Karp, you know, kind of took it as a backhanded compliment because other tech companies were also working with ICE. But Karp figured that, you know, he said anyway that part of the reason people were targeting. Palantir back then was because they knew that the software was really good. But he also made clear that he had misgivings about Trump's immigration crackdown during the first Trump presidency. In fact, he said to me at one point that if he'd known where things were going, he might not have signed the contract with ICE. This time around, he's not expressing any misgivings. He is expressing full support for what Trump is doing. He believes that Last year, voters sent us very strong message that they want the demographics of the country to basically remain the same and that, you know, Trump's policy is doing that. And Palantir is happy to help this time. There's no qualms being expressed this time around. If you think about the increasing anti-Semitic sentiment that we're seeing on the right and left, I wonder if eventually, you know, whether you think that he will start to process whether there's any... concerns there. I mean, like right now already, the government is basically saying that they're going to go through people's social media. The current government is friendly to Israel, but they're under the mindset of if you're traveling here, we're going to go through your social media, if you've whatever, said something mean about Charlie Kirk or something nice about a pro-Palestinian group, you might not get a green card. It's not hard to imagine the other, that flipping, right, under a different type of administration where they decide that if you're too supportive of Israel, though we don't want you in the country, does that not? Is that concerned never be raised by him? I guess I wonder. Well, it's a great question. The thing is, I mean, one thing that's important to know is that, I mean, you know, he said he went to Stanford Law School. Then he went to Germany to pursue a doctorate and did a go to university Frankfurt. Like the German culture. Exactly. He went right there. And he did his dissertation on the rhetoric of fascism. So whereas, you know, with some of these other tech bros, you know, you see them spouting off online. And it's just like, have you ever read a book? Right. You know, it's just like the ignorance is. He's read books. And he learned German. And you said he studied with Habermas and like, yeah. He can't plead ignorance. And he knows where this sort of stuff goes and where it can lead. And when you see people being grabbed, you know, grabbed off the streets.

in broad daylight, by mass law enforcement officials. We've seen this in other countries, and it typically doesn't end well. And, you know, it's an interesting discussion because, and I've sent this to him, and he kind of deflects, but it's like, you know, tell me one place where right-wing authoritarianism has come to power, where if it hasn't started with the Jews, it doesn't land on them at some point. That has got to be the concern. And it's, you know, whether it's, you know, anti-Semitism on the left or what we see now, this outbreak of anti-Semitism on the right. And I've made this point as well to him, and he doesn't disagree. He's always maintained that Trump is not an anti-Semite. And it's fine. Okay, if you don't think he is, that's fine. But the point is he's created this permission structure. This is beyond him at this point. Now people feel very free to express bigotry in a way that wasn't the case 10 years ago. These sorts of things don't end well. Whether you're Jewish or Muslim or Latino, it's just, yeah. I wonder what he thinks about the brand concerns now. Like you mentioned, obviously throughout the book, there is he's. Has some bitterness a little bit about, you know, the perception of Palantir and, you know, how, like, your shared alma mater isn't calling him to, you know, be a donor or whatever because they're worried about brand association. That's all they gotten worse. It's starting to come from inside the house. Like, I noticed on Theo Vons, I think I might have his interview with JD Vance. He was interviewed another right-wing figure. He talks about how he's concerned about Palantir. Well, he was talking about with Rogan. No, with Rogan. Yeah, there you go. It was with Rogan. Yeah. And to me, like, it's easy to say, oh, these defeat liberal elites at the universities don't like us, screw them. But now it seems like the concerns about, you know, the extent of the power, how they're working with the spy agencies, civil liberties are expanding within, you know, folks that he might care about their feedback. And I wonder if that's on the radar over there at all. Oh, yeah, no, for sure. In fact, a couple months ago, the New York Times ran a story saying that Palantir was essentially helping the Trump administration build a master database with all our personal data. And Palantir reacted with fury. And a lot of that was driven by the fact that elements of the far right, notably Nick Fuentes. picked up on this and all of a sudden Palantir was in the crosshairs of these MAGA adjacent people, specifically Nick Fuentes. They were saying, why is Donald Trump the ultimate victim of the deep state getting in bed with the company that is the deep state and so forth? So they are very attuned to that. I think Karp and his colleagues are much less concerned about blowback from the Democrats if the Democrats get in power. And part of this. Why? I mean, that's not crazy for me to imagine the Democratic.

President in 2029 would say we're canceling all contracts with Palantir. You know, I mean, part of it is based on experience because there was a lot of that talk after the first Trump presidency and the Biden administration didn't do anything. They thought Biden was anti-tech. They might get a different kind of leftist next time. They should be careful. It's true. But I think, you know, I think part of it is they think that, first of all, The second Trump presidency, they see it as a massive opportunity. And that's part of the reason CARP is all in with ICE this time is they see this as a massive opportunity. It's a huge government contractor as it is, but they see this as an opportunity to become even more deeply entrenched in the battles of government, if you will, to the point that it would be very hard and very disruptive. to switch vendors. But they also, you know, and again, this is based on experience that. Maybe the next Democrat will decide we're not trying to do immigration enforcement. So it's not that hard to switch vendors, actually, because we don't have it. We don't need a new vendor at all. We're just going to get rid of this one. Maybe. But I think, you know, based on what they experienced with Biden and just what they kind of experience in general. I mean, for instance, ICE itself. I mean, this was kind of the amazing, you know, CODA to the controversy during the first Trump presidency. ICE itself. tried to terminate the contract with Palantir after Biden became president, not because of the controversy, because it thought it could develop similar capabilities in-house. And it didn't work out. They came back to Palantir and re-uped with Palantir. And so this has been Palantir's experience. throughout. You know, Carp's view is like, you know, he's kind of like the Jack Nicholson character and a few good men. You know, it's just like, you may not like me, you may not respect me, but you need me. And that's very much his attitude. And I think he, you know, I think he believes that, you know, whatever blowback Palantir might suffer if the Democrats come into power, it's not going to be enough to significantly hurt the company's government business. You know, the retribution will not be enough to, to really damage the company. We'll see if He's right. I don't know if he is. I don't know. It feels like there's a little hubris to that. Because it's interesting how in some level they're responsive to the criticism. Like you can imagine a different world where Palantir. wants to be as low profile as possible. You don't have to imagine that, actually. That was their policy for a long time. Now you've got Palantir huge advertisement during the Army Navy game. They're selling tote bags, Palantir. It does feel like they're trying to brand themselves, and that could lead to Blacklash, right? There's that. And the other thing is, too, he is obviously very outspoken in a way that other tech executives aren't. And this is very much a reflection of his personality. The guy likes to argue. You know, many of our conversations were essentially arguments when I was, you know, when I was reporting the book. It's like, you know, he likes to engage in intellectual combat. And, you know, he feels that he's got positions that to defend, that he can defend. And he wants to be out there. He does not, you saw it with that interview with Sorkin. He became loaded for bear. And he wants to take on the critics. He wants to challenge pounders critics. And the thing is, you have to also recognize that.

He's kind of like Elon Musk now. And, you know, Carp has developed a very, very strong retail fan base who think that he can't do anything wrong. So that's the audience he's playing to. So while people saw that interviewer, they see other interviews and they say, what the hell is with this guy? Carp's fans are like, oh my God, give me more of that. So he's kind of playing to that. Yeah, it's kind of becoming a meme stock. There's a little bit of a meme stock play to it. Well, there is a little bit of that. I mean, he's got, you know, it's got that. these very loyal retail investors. They refer to him as Papa Carp and Daddy Carp. And, you know, it's always Palantir to the moon. And they're buying all the Palantir swag. And so they're eating all this up. So Carp likes to be out there. He likes to be out there jousting with people. But it's also playing very well with the audience he's catering to. It's interesting though. Elon Musk said recently in an interview, Stephen Miller's wife on a very low-rated podcast. He did for some reason. But he said that he regretted going in because of the back of the hurt that's the end of the company. And so parallel is kind of interesting. You do, you know, and carp could look at Elon Musk and think the other way, right? Like you get a little too close to the sun. It gets too hot. You end up hurting your core business. That feels like a not crazy path. It's not crazy to think about that. And I think he has become, you know, you wouldn't have been able to tell from the Sorkin interview. I think he has become, he has come to recognize that there are, you know, battles that may not be worth fighting in public and that there are moments when it might be. that it can be helpful just to keep a lower profile. But again, his personality is such that he wants to argue. It's not enough to like think, okay, we're just going to make a lot of money, you know, and, you know, I'm perfectly comfortable with what I'm doing. He really does want to be out there. And this may be tied to his background in academia. I mean, he's a credentialed scholar. And as I said, I mean, he likes to argue. And. kind of keeping the low profile and just doing the work the way other CEOs do. That's just not his thing. Never has been. And, you know, and I think, you know, he feels, you know, certainly, I mean, Palantir is in the spotlight now. And he wants to push back hard against the critics. You mentioned the pushback to the time strike. What is the truth do you think? Or what do we know, I guess, about what? Palantir is doing with the Trump administration as far as that the database work is concerned. Well, what they said is it's just to improve government efficiency, which again, I mean, I never thought of Obama did that, so did Mussolini. You know, so it's like hard to know what you're talking about. And I don't recall Donald Trump running on a platform in 2024 of making the government more efficient. That was not part of the agenda, as I recall. Yeah, that is what Palantir says. It says the work they're doing is completely misunderstood and misrepresented. But, yeah, as you know, there were people who work in government with work with very sensitive data, people who lost their jobs under Doge, who said, look, this information wasn't kept segregated because we wanted to, you know, the government to operate less efficiently. It was because it was understood.

going back forever, that couldn't always count on having trustworthy people in power. And emerging this information, making it easier for bad actors to get a hold of information they shouldn't have to do nefarious things. The idea was, you know, we should make that as difficult as possible. And that's why so much of this information was silent. I think the bigger concern here, from my point of view, and I think from many other people, is what's going on with ICE, because it does seem that ICE is building out a surveillance apparatus. Palantir is integral to that. Its software is foundational to the work that ICE is doing right now. And, you know, the argument is very simple. You know, what's being directed at one segment of the population right now could very easily be directed at others. And in fact, as you mentioned before, you know, ICE is scraping social media. Apparently, one of the things it's doing is it's monitoring critics of ICE. And not all critics of ICE are people who are, you know, candidates for deportation. When you see it with the memo that. Pam Bondi put out to Kash Patel, like looking after critics of the administration, critics of vice. To me, and I guess that's what I'll close. Like if there are some misconceptions about like whether I said or whether Palantir is like actually doing the spying or whether they're keeping the data, which they aren't like it feels like it's one of these things where the risk associated with Palantir, like it's a tool. And so the risk is tied to who is using the tool and what they're doing with it. That's exactly right. I mean, and it was clear from the first Trump presidency that. this would be a very powerful tool in the hands of an authoritarian regime. And the concern now is that we have taken a turn to authoritarianism and Palantir is facilitating. Its technology is facilitating that. And you can't just say, well, it's just a tool and they have no responsibility for it. They make choices. I mean, Carp has not said what his red lines are. I assume there must be red lines, you know, that if ICE starts doing this, that maybe Palantir will reconsider its work. But, you know, it's not in his interest to say that publicly because it's not in his interest to piss off Donald Trump and Stephen Miller. But we would like to think there are lines that can't be crossed using Palantir's technology. We just don't know what those are. All right. Mike Steinberg, I appreciate it. The book is called The Philosopher in the Valley, Alex Carp, Palantir, and the rise of the surveillance state. I have a feeling that they'll be in the news a little bit more next year. So maybe we'll check back in, all right? That would be great. Pleasure to be with you today. Thanks so much to Catherine Rappell and Mike Steinberger. We'll be back tomorrow with another edition of the podcast. See you all then. Peace.

The board podcast is produced by Katie Cooper with audio engineering and editing by Jason Brown.