# Marc Andreessen: "The American Dream is Dead" *Joe Lonsdale Clips* · https://www.youtube.com/watch?v=FyzpJoPVq04 ## Summary Marc Andreessen argues the American Dream—housing, healthcare, and education—is dead because prices in those three sectors are skyrocketing while technology has collapsed prices everywhere else. He attributes this to technology not touching these sectors and to government policy that restricts supply while subsidizing demand. He points to Lasik eye surgery as proof that when technology and consumer-driven markets are allowed to work, prices fall and quality rises. ## Key points - Andreessen defines the American Dream as a house near great jobs, great healthcare, and good schools for your kids. - Everything technology touches collapses in price, but housing, education, and healthcare prices are skyrocketing. - Healthcare is 20% of the economy and on its way to 50%. - Government restricts supply through zoning laws and certifications while subsidizing demand, which drives prices up. - California's response to its perpetual housing crisis—subsidies for home buyers—makes the problem worse. - Andreessen calls this the fundamental policy and political question of our time. - Lasik eye surgery shows prices falling like Moore's law because it's outside the system and paid for by consumers. - The potential to fix these sectors exists, but the population has to decide it wants it. ## Notes ### The Three Components of the American Dream - A house near great job opportunities, in a safe environment. - Great healthcare for you and your family. - Good schools for your kids. ### Two Opposite Price Trends - Over the last 25 years, everything technology touches has collapsed in price—televisions, computer games, anything with electronics. - Housing, education, and healthcare prices are skyrocketing. - Healthcare is 20% of the economy and on its way to 50%. ### Why Housing, Education, and Healthcare Are Broken - Technology is not really touching these sectors—either the tech industry has done a bad job or those industries have been resistant. - Without technology, productivity growth hasn't happened in them. - They are heavily regulated and dominated by government. - Government restricts supply: zoning laws, university certifications, and so forth make it very hard to build new supply. - Government responds to political pressure from rising prices by subsidizing demand. - Subsidizing demand with fixed supply produces skyrocketing prices—e.g., California's perpetual housing crisis answered with home buyer subsidies that drive prices up further. ### The Political Question of Our Time - Andreessen says there are no easy answers, but the first step is acknowledging what is happening. - The marginal American voter has to decide this is not acceptable: needing $3 million for a house in a good neighborhood, a four-year degree on its way to costing a million dollars, and an out-of-control healthcare monster. - These issues become much easier to deal with in a high-growth environment with rapid technological development. ### The Lasik Example - Lasik eye surgery is the one area of healthcare that is sophisticated and technologically advanced, with a price curve like Moore's law or video games—straight down while quality goes way up. - The reason: it's outside the system, a discretionary purchase paid for by the consumer. - Lasik studios operate in strip malls with a few people and an incredibly advanced laser eye machine, and every year it gets better and cheaper. - This shows what happens when these sectors are touched by technology and freed from regulatory and government overhang. - That potential exists throughout the system, but the population of the country has to decide it wants it. ## Transcript [00:00] There's basically, right, three components to the American dream, right? There's house, you know, have a have a house, have a a house for your kids, where and you know, kind of by definition, this goes back to the geographic lens. The house needs to be like near a place where there's like great job opportunities, right? So, it can't be a house in the middle of nowhere. It has to be a house where there's going to be great jobs um and you know, a safe environment and so forth. Um, number one. Number two is is is healthare. You need, you know, great healthcare for you and your family. And then three is education. You want to send your kids kids to good schools. Um if you disagregate sectors of the [00:28] economy over the last 25 years, what you find is basically everything that technology touches basically collapses in price. Um and so television sets and you know computer games and you know everything you know anything with electronics in it basically that the prices productivity growth in those sectors has advanced very fast. Product prices prices have have uh have collapsed. Everything is is much cheaper. Um but if you chart uh housing, education and healthcare um the prices of those things are skyrocketing, right? And and we all we all you we all see this. It's just the price of housing is exploding, the price of education is exploding, and the price of healthcare I mean healthcare is 20% of the economy on [01:03] its way to 50%. Um and uh and so the the prices are exploding and and and so it's like okay what what makes healthcare what what makes those three components the American dream have these exploding prices? It's basically it's two things. Number one is uh and these are interrelated but number one is technology is not really touching them very much. that and you could say the tech industry has done a bad job at addressing housing and healthcare and education or or you could say that you know those industries have been resistant to it. Uh but technology hasn't really touched them that much which means that they productivity growth hasn't happened in them. Um and then the other thing is they're heavily [01:35] regulated. Um they're they're heavily dominated by the government. they're heavily regulated. And then in all three of those sectors, uh, the government both restricts supply, right? And so zoning laws and university certifications and so forth, right, mean that it's very hard to actually build new of of those three things. Um, and then the government responds to the political pressure caused by the rising prices by subsidizing demand. And of course, if you subsidize demand and a fix supply, you get skyrocketing prices, right? Right? And so every time there's a housing cris, you know, it's perpetual housing crisis in California, the answer always is subsidies for home buyers, which always has the effect of driving [02:07] prices up further and making the problem worse, right? Um and so so so like that that that drives, you know, those are the microeconomics of of what's happening. Um I don't think there's easy answers on this. I but I think the acknowledgement that this is in fact what's happening. And then I think the the peop I think the people have to decide that they do not want to live this way. I I I think like or the marginal American voter needs to decide. It's just look, it's just not acceptable that if I can't spend $3 million, I can't have a house that's in a good neighborhood with a good job attached to it. And it's just not acceptable that a four-year college degree is going to cost a million dollars, which is which [02:40] is what it's on its way to doing. And it's just not acceptable that like this healthcare, you know, monster is running out of control. Um, and and so, you know, it it you know, in many ways, like this is like the fundamental, you know, policy political question of our time, you know, that kind of kind of needs to be dealt with. Again, these issues become much easier to deal with in a high growth environment, right? um in in a in in an environment with very rapid technological development. Um let let me give you the good news story on on healthcare. Everybody talks about healthcare. You can't break these curves. There's one area of healthcare that is incredibly sophisticated, technologically advanced and the price [03:10] curve looks like Moore's law. The price curve looks like video games. The price curve is just a straight line down and the quality of the service has gone way up and and that's Lasic eye surgery, right? And and the reason it's and the reason that's the case is because it's it's outside the system. It's a discretionary purchase paid for by the consumer. Um, you know, and the the Lasic Eye studios are in like strip malls. Um, and they've got like, you know, three people and like a super advanced, you know, incredibly advanced like laser eye machine. Um, and you go in there and you get zapped and you have perfect eyesight and it every year it gets better and cheaper. Um, and so that's like an example of what happens [03:41] if you're able to touch these sectors with technology and if you're able to get them out from under all the regulatory and government overhang. And so that that potential exists I think throughout the system. But but fundamentally we have to decide we want it and and fundamentally the population of the country has to decide that it wants it.