Marc Andreessen: "The American Dream is Dead"

00:00There'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

00:28economy 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

01:03its 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

01:35regulated. 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

02:07prices 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

02:40is 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

03:10curve 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

03:41if 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.