Former U.S. Treasury spokesperson, current SVP of Public Affairs at Clyde Group, and crypto commentator John Rizzo joins Niki in the studio to talk about the state of play of crypto. Is there a future for crypto in America or will unelected bureaucrats successfully push the industry overseas? They discuss the broader regulatory climate and how other emerging technology, such as AI, could find itself in a similar deathmatch in Washington.
Niki: I’m Niki Christoff, and welcome to Tech’ed Up!
This is our 60th episode and I am so proud that we didn’t podfade! That’s when podcasters just up and quit. And more than 75% of shows do throw in the towel before they tape ten episodes. So thank you for encouraging our little indie effort to keep going.
My guest today is former Treasury spokesperson, John Rizzo. He and I cover a lot of ground today: we get philosophical about government work, make the case for why you should care about crypto even if you don’t own any, and John gives advice to the AI industry about how to avoid the D.C. deathmatch that crypto is facing.
Don’t forget to check out the show links if you want to dive deeper.
Niki: Today in the studio, our guest is John Rizzo. John, welcome!
John: Hey, Niki. Good to be with you.
Niki: So you were a spokesperson at the Treasury Department. You've spent your entire career, up until recently, in politics and the public sector.
Welcome to the private sector.
John: I know. [chuckles] It's, it's an interesting place out here. I'm getting used to it, and I like it.
Niki: You like it?! That's good.
John: I do. I do! It's a lot, a lot of interesting challenges, interesting people. So, it's been good.
Niki: I'm glad you think that. You're such, so this is one of the reasons I wanted you to come on. You are of Washington in many ways, but you manage to be a realist without being a cynic.
John: I am the swamp. You know this, right?
Niki: I am the swamp. I think I am the swamp. I'm so deeply cynical, [John: Yeah] but also an ideologue? I don't know.
John: Yeah. So, what I think is cool about being outside of government is when you're in government, right, the thing that you spend so much time on is really earned media, right?
And, I found myself, after a while in government, thinking to myself, the media landscape has changed so substantially over the last 10 years, 15 years, that earned isn't enough. If you really wanna have an impact, if you want to actually change debates, move public opinion, it's gotta be earned plus. And so, the coolest thing that I get to do in the private sector now is earned plus.
So, not only are we, like, trying to change a debate by getting coverage for a client or a market participant, we're actually trying to move the public, which is, like, the real exciting stuff of communications.
Niki: Which is such a great segue because you're a master communicator, but I'm going to back up really fast [John: Sure] for people who are not in our biz, which is public affairs, comms, policy comms. [John: mm-hmm] Earned media is: you get an article in the New York times. Paid media is you run a digital ad or a TV ad. [John: That's right] And then there's sort of advocacy efforts, which are, which are kind of our bread and butter now. [John: Right. A hundred percent] Like, shifting perception, reputation, impression, or managing expectations, and so on.
John: That's right. That's right. And those are kind of the, kind of the holy grail of communications, if you will, right? The advocacy, the earned media, and the paid media.
Doing all those things together is how you get the public from point A to point B. And that's why everyone got into communications, right?
Niki: Right! Well, and you make an [chuckling] interesting point, which is the government, which frankly could use some more paid media. [John: Yes! Yes!] I think of this all the time.
This is not the topic of the day, but cyber security. [John: Yes] Public service announcements about cyber security are so needed [John: Yeah], but no one's going to pay for that.
John: Right. I think there always will be a hesitancy in Congress to allocate money to paid advertising. We've seen it in narrow circumstances. So, the ACA, we see those ads, I think all of us, no matter what we watch or consume, but that's the rare example.
So if you look at the IRA right now, and of course, this is, we're getting a little discursive here from the topic, but nevertheless.
Niki: [interrupts with humor] That's okay!
John: If you look at the IRA.
Niki: [interrupts with humor] This is not 60 Minutes! [John: Right] Like, we can get discursive from the topic.
John: Good. [chuckles] So, so the IRA, right? [Niki: Mm hmm] One of the things the administr-
Niki: [interrupts] Wait! Let's just for people who aren't -
John: [interrupts quickly] Inflation Reduction Act
Niki: Inflation Reduction Act. More of a climate bill than an inflation reduction bill, but
John: Perfect naming, though!
Niki: Nailed it! [laughs]
John: Congress got the Senator from West Virginia, which is all that matters. So, the Inflation Reduction Act obviously puts a lot of money into clean energy, a lot of money into, let's say, solar, other types of clean energy. One of the challenges that communicators at the government level have is that, essentially, what they need to do now is a marketing campaign, right?
They need to help get people to adopt solar in their homes or clean energy in their homes. That's, like, really hard to do when you've been in government forever because you're not a marketer, right? [Niki: Right]
So it's a very, very different skill set that government would benefit from having, and the public ultimately would as well, but we don't see it much.
Niki: We don't see it much. And right now, what we're going to talk about is the flip side of that, which is how we met. We found ourselves trying to sell the concept of crypto to the American people.
We're a little late to it. We're not really late. [John: Yeah] We were here, but you just got out of the government [John: mm-hmm]. So, you're now [pause] free to write columns, which you do a lot of to assess the industry.
John: Yes, which feels very weird. I don't know how I feel about it. But every once in a while, I put something out there into the ether, and I hope someone doesn't say anything nasty because then I'll feel bad, but I gotta get used to it.
Niki: You gotta, I think you - I say this as someone who is incredibly thin-skinned about social media [John: Yeah], and I rarely tweet [John: Yeah] or anything else.
What I'd love us to do today is talk about crypto. Is it dead? [John: mm-hmm]. Does it have a chance to live in the United States? [John: Yes] Is it just moving overseas? Given both what's happening in Washington, but also what I think is the fundamental issue, which is, I don't think most people care.
John: Yeah. I think that's a, that's one of the main challenges. And here's my pitch to people who say, “Well, this is all a bunch of nonsense. Why should I care about it?” If you view, and this is an idea that Janet Yellen first articulated, so I'm kind of stealing her thought here, but basically what she said is that “if you look at crypto, why it matters is the overall trend in finance of digitization.”
So, both of us probably had an experience going to the store with our mothers or fathers, let's say, years ago, and they pull out the credit card and they use that old machine where they swipe it, right? [Niki: mm-hmm] Well, that was an innovation. And what preceded that was a very cash-based system.
So now, what you see in crypto is the next step in financial digitization. And if you believe that that trend will continue, then you should care about crypto, no matter whether you want to own a token or not.
And two, if you care about the payment system in this country, right? If you care about money moving across to different parties, really the bread and butter of the economy, then you ought to care about crypto.
Because crypto is, in many ways, trying to figure out: How can we speed up the rate of payments? How can we do it more accurately? How can we do it in a way that gets people the resources that they're entitled to quicker?
Niki: Right! And I think we had Stu Alderoty, who’s the general counsel of Ripple, said, “Sending money should be as easy as sending an email.”
John: Yeah. Now, I mean, so I think you have to ask yourself a threshold question. Do you think crypto is going to go into the dustbin of history or not?
If your answer is probably not, and I think a reasonable person would come to the conclusion that probably not is the right answer. And the reason is because the rest of the world is racing ahead on it.
You ought to care about it. Whether or not you're a Bitcoin holder or whatever, it matters to your future financial life.
Niki: I think you just said something really key, which is whether or not you're a Bitcoin holder, which I'm, I'm a; I can't believe I'm admitting this, but I think I'm, I think I only own Bitcoin, and then a little bit of, [hesitantly] WETH, which is Wrapped ETH, which I used to buy an NFT.
John: Wheath. [chuckling] That sounds like something you might get arrested for in high school. [Niki: laughs] You know what I mean? It's like...
Niki: I also am pretty sure I'm, I'm positive I'm saying it wrong. [John: Yeah] I mean, who knows? [chuckling] [John: Right] But I dabble in this space as far as an owner, but I believe in it to your point, which is whether you understand how the tech works or care about owning any crypto if you believe that money is going to continue to be increasingly digitized. [John: Right] And you also think that there's room for the system to improve. There is [John: Right] globally! You want this to be able to exist in the United States.
John: Yes! And here's what gets me really worked up when I talk to my progressive friends. If you're totally anti-crypto, what you're essentially saying is the financial system, as it is, is just fine.
So, crypto doesn't have to be the answer to everything, but if the financial system doesn't work for a lot of people, and we know that it doesn't, then you ought to have some exploration of this other route, this other policy that can actually deliver for people in a way that the traditional financial system can't.
Niki: So, you just said something interesting. You said that progressives should at least be open to exploring this technology. [John: Right] At least creating a space for it to exist as an experimentation [John: Right] when we know the system does not work for a lot of people. [John: mm-hmm]
John: I think this is a big question we have to answer as a society. What is the appropriate role of government? Should government decide for people, “This is a safe or wise investment or you shouldn't be allowed to invest in it?”
Should government make that decision for people? I'm of the view that we shouldn't.
I take no position on whether crypto is a good investment or a bad investment. I own no crypto. I just think that it certainly is a financial innovation. It is aiming to solve a problem. And people ought to have the freedom to decide whether they want to engage in it or not. And you shouldn't have an entire policy apparatus set up to try to just kill an industry.
Niki: Okay! I think this is important, and I want to talk about the specific apparatus policy that could kill this because it could also kill other emerging technologies. [John: Right]
But just before I, we talk about that, [pause] whether or not, to your point, should the government be protecting people from making bad investments? I just think it's; it's not an honest statement to say that they even are with crypto [John: mm-hmm] because people are still giving revolving credit [John: mm-hmm] to people like my mother who should absolutely not be given additional revolving credit, right?
If anybody cared about my mom's financial decisions (by the way, I do), it'd be great if they stopped giving her credit cards. [John: Right] It's not the government's job to prevent that, right? [John: Right] It's the government's job to make sure they aren't cheated, lied to, [John: Right] that there's disclosure, that there's transparency, right?
John: It's consumer protection versus consumer parentalism, right?
Niki: Yes!! Oh, I like that. That's good.
John: As a Democratic Party, a party which I've worked for for 14 years, we've kind of moved from, “Hey, consumers ought to have all the information and be protected whenever they can however they can,” to “We should decide what investment is good or bad for them. And if we decide that this new technology is a bad investment, we should get rid of it.”
And I think that's a bad idea.
Niki: It's a bad idea, and it's also being decided not by our elected representatives, necessarily. [John: Right] It's being decided by unelected bureaucrats. [John: Indeed] With respect to the, you’re a former unelected bureaucrat, [chuckling] I think you were an unelected bureaucrat!
John: I was. I've been an, I've been an unelected bureaucrat more than I have not in my life.
Niki: Set that aside, your personal connection to it. Right now, we have one particular unelected bureaucrat who's making it sort of his mission [John: Yep] to kill crypto. His name's Gary Gensler. In our world, which is we're in and around fintech and digital assets, he's, he's persona non grata.
Everybody talks about him. I don't think most people know who he is. [John: That's right]
You had a great tweet. I think it said: Gary Gensler, LOL. [laughing] Explain.
Niki: [chuckling] Explain the tweet!
John: We had this pretty monumental ruling in a district court the other day, Judge Analisa Torres made it, a ruling that was contrary to the SEC's stated position on whether crypto tokens are securities or potentially something else.
And what was interesting is that immediately afterwards, you had this kind of Trumpian braggadocio statement from the SEC that was basically, y’know, declaring victory. [chuckling] It was very bizarre, which was my first thought.
And, y’know, usually, as a regulator, you have an obligation with your statements to play it straight, right? That [clears throat] if you're a politician and you want to kind of opine on a ruling or what it means, you could do that. But when you're a regulator, you've got to have some fidelity to the fact pattern that the court laid out.
And I think, having worked with a lot of people in communications at the SEC, they are of the utmost professional quality. And I think, they probably had zero percent to do with that statement because a statement like that only comes from one human being, and one human being only, and it's the person with their name on the door.
So, that's what I thought was rather hysterical, this kind of, like, y’know, defiance in the face of reality. One.
Two, it actually didn't have to be this way. So, [chuckles] if you, here, here is kind of my view of what happened. Basically, Gary Gensler, a bunch of people who call themselves progressives, decided they want to get, get rid of crypto or decided that there was real risk in crypto. And instead of trying to regulate it, bring it into the regulatory framework to make it safer, they said, “We're going to kill it.”
And actually, ironically, what they've done is they've reinforced the status quo in which there are fewer consumer protections and less rules. So, by not compromising, right, by not getting in a room with Republicans and other moderate Democrats and say, “Hey, let's figure this out. Let's bring it into the regulatory perimeter. Let's come to some kind of agreement that we can all live with” they've actually made consumers more vulnerable to scams because they're so fixated on this wacky legal theory of trying to get rid of it that they're not making any progress on what people need.
Niki: And that actually brings up an important fact that I think sometimes folks forget but will become relevant in October when Sam Bankman-Fried of FTX [John: mm-hmm] starts his trial in New York. [John: mm-hmm] FTX was primarily operating overseas, [John: Right] so people who wanted to use that did not have any protections of the U. S. government.
John: Right! The people who are banging the table loudest for more consumer protections are the same people in some instances that are making it less likely we get those consumer protections. If you have a technology, right, and that's what crypto is, it's a technology derivative of another technology.
You can either regulate it or make it work within your system, or you can do this fool's errand of trying to get rid of it. And in trying to get rid of it, what you actually do is push it overseas. And if you're a regulator, when you push something overseas, you have less control over it.
So now, in an effort to protect consumers, we've had a group of people on Capitol Hill and in certain agencies trying to kill crypto in the name of consumer protection.
What they've actually done, now two years later, is reinforce the status quo that was in existence when they got into office. And that status quo was terrible for consumers. Additionally, we have more crypto activity offshore than we've ever had before, and you have other countries racing ahead with regulations.
So, when it comes to technology, and this is also true with, with AI, right? You can either set the rules, or you can make it work for you, or you can do the fool's errand and try to get rid of it. But in the end, you're going to fail, the consumer is going to have less protection, and ultimately, the rest of the world is going to race ahead of you.
Niki: That's right. I think that's exactly right! And I'm glad you connected it to AI because sometimes people say, “Oh, stop trying to make ‘fetch’ happen, Niki, like, stop talking about crypto,” which - I do believe. I certainly think some degree of, of the tokens that exist today will continue to exist later. [John: Yeah]
Absolutely, blockchain technology, whether it exists as sort of this decentralized standalone or is just incorporated into traditional finance [John: Right], it's going to continue to exist. London, Dubai, Singapore, they are welcoming with open arms the engineers and entrepreneurs who want to build on this.
John: Yeah, right. You can either embrace technology and make it work for you, make it work for the consumer, or you can watch it go away. Sheila Warren, who is head of the CCI, which is the Crypto Council on Innovation, she has this great point, and so I'm taking her point here. And she tweeted this several months back.
And she made an analogy between the semiconductor industry, the chips industry, and what's happening to crypto. Essentially, we let the semiconductor industry, the chips industry go, right? And then we had to buy it back in the form of something called the CHIPS Act for 550 billion dollars.
And so, here we are again, letting innovation kind of go overseas. And eventually, one day, we're going to go, “Oh. Wish we had that,” and we're gonna have to buy it back. And it's gonna be more expensive, and it's gonna be harder to regulate because other countries will be leading the way.
Niki: That's exactly right. She did tweet that! I'm glad you mentioned it. Sheila Warren has been on this podcast.
Incredibly, her brother, who doesn't do anything with crypto, has also been on this podcast. [John: Yeah? Oh, wow!] Yeah. Although I didn't know. [John: That's cool] I didn't know he was her brother when I asked him on.
John: So, I'm an only child, so I've got no one else that I can give to you.
Niki: [chuckling] We gotta have someone else from the Rizzo family come on and talk about-
John: Yeah. My mom's really funny. I'll tell you that. So, I'm gonna have you meet my mom.
Niki: I would love it. Bring her. We need moms on the podcast, actually. [John: Okay, good] I think it'd be good.
You raise the specter of this is not going to be just blockchain or crypto that this could happen with.[John: Right] It could happen with any emerging technology, and that's not really how we've operated in the past.
John: Right. So why, so Matt Yglesias, who is, I think, a brilliant writer and has a, a substack called Slow Boring, he had this very interesting post the other day that I spent some time with, and it basically analyzed why the U.S. is in a different place than Europe in terms of its economic fortunes.
And one of the areas that he identified was the embrace of technology that America had in the 1990s and early 2000s, right? The kind of innovative mindset that fostered the internet and allowed companies in California to set up shop and grow. That has helped us get ahead of where other countries are.
Now, we're essentially reversing what we did, right? We're saying, “Oh, the technology's bad. It's bad for consumers and so, we just got to get rid of it.”
Niki: I think that the reason that's happening, and I get it - so in, in crypto, people often compare it, people who work in the industry, they say, “Well, what if you'd regulated the internet?”
And I kind of have to remind them, “People hate the internet.” [John: Yeah] They hate it! They hate social media. They feel like their data is extracted.
However, the economic reality is that Silicon Valley and big tech, and also small tech, has absolutely driven our economy [John: mm-hmm] for the last 25 years [John: Yeah].
And as that shifts to new technologies, instead of saying, “Okay, we, we missed some things with social media and we need to sort that out.” [John: Right] Instead of regulating ahead of time to avoid that, which is short-sighted. I think that's why we're having this reaction, like, “We don't want to screw up and forget to regulate AI.”
So, it's like, [chuckling] panic at the disco. “Let's just start regulating first!”
John: And y’know, one of the things I learned most from being in the orbit of Secretary Yellen, and you could learn like a lot of things being in orbit just like sitting there as she's, y’know, reading things and talking, but one of the things I learned from her [clears throat] and her scholarship over the years is: there's no perfect economy. No such thing. All it is, is a series of choices with trade-offs, right?
And technology is the same way. In the ‘90s and 2000s, we decided that we were willing to risk some of the downside potential that tech companies had, social media sites had, in order to embrace that innovation and get the economic growth that comes with it. That doesn't mean we don't care about the stuff that we don't like.
That doesn't mean we don’t care that, y’know, Facebook's role in the 2016 election or whatever. But it does mean that we're better off if we bring technology, bring innovation in-house and try to manage it domestically as opposed to just trying to get rid of it.
Niki: I agree. And I think, I think that fundamentally what you don't want to have happen is restricting things to avoid unknowns. We just don't even know. [John: Yeah] And even though I started this podcast by saying I'm a huge cynic, I actually believe that you can look at what's happening with social media, and you can make determinations to rein in some of those harms.[John: Yeah]
I don't think it's such a thing as, like, “It's just too late. What are we going to do?”
John: Yeah, right. I think we, [chuckles] we, at the outset of new technologies, we underestimate sometimes our ability to control for externalities, right? The art of policymaking is to put in place a measure, observe it, figure out what your initial assumptions were wrong about, and then change it.
And I think, unfortunately, our political system is not mature enough right now, over the last decade or so, to do that. Everything is kind of scorched earth, and it's cultural, and we don't really go through the policy process of, ”Hey, we're going to try something and we're going to see if it works, and then if it doesn't work we're going to come together on a bipartisan basis and fix it.”
And nobody really thinks about, like, the person who gets up, works their backside off every day and just wants stuff to be easier.
Niki: Which, actually, I will say, a shout out to the staff at all of these agencies [John: Yeah] and frankly the staff in Congress who do, that's what they wake up and try to do.
John: Yeah, yeah! There are, [interrupts self] the thing that is hard to figure out about government is the distance between all the people who are working for the public good and the forces that kind of block them.
Niki: I am optimistic, though. I mean, what is it they always say? “It's the economy, stupid.”[John: Yeah]
So, when it comes to tech issues which frankly should be somewhat less culturally divisive, if you just look at the economics and then you look at not harming kids, I think that's two places that you'd see a lot of bipartisan agreement. You can get something done.
John: Yeah, I think there are areas that still exist that I have bipartisan, y’know, feelings in them.
Niki: So, we should look for those places. Okay. So, I'm going to ask you; this is not a stress question, but as a communicator for a living and-
John: [interrupts quickly] I'm always stressed. You know this.
Niki: I also am always stressed!
John: Y’know what I saw? So, I was scrolling on Instagram the other day and I saw this app to test out your stress. [Niki: [laughing] No!] And I was like, “Absolutely not.” [Niki: No!] I was like, “No, get away from me..”
Niki: It's like the Richter scale! My phone will just burst into flames.
John: I know what the answer is!
John: I don't want to know it.
Niki: [chuckling] I'm so stressed!
Okay, well, this won't be that stressful.
John: Okay, let’s do it!
Niki: But, so I pay these 12-year-old twins to wash my car. [John: Okay?] Those kids, those boys, cannot break a 20. [John: Right] Conveniently. [John: Right] I said, listen, can I start paying you in Bitcoin? [John: Yeah] They're like, “Why?” So, they're not 13, so they don't have Venmo, they don't have Cash App [John: Yeah], they're unbanked. [John: Right]
And I'm like, “Well,” and I start to try to describe why they should accept it. These kids do not want Bitcoin. So, I tried to make the argument. Could you make an argument, not that they should accept Bitcoin over US dollars, but why they might even consider it?
John: Okay, so here's how I look at Bitcoin.
And people jokingly will sometimes ask me like, “Hey, which crypto should I invest in?” And I'm like, “I'm invested in none of it. I have no idea.” But Bitcoin has the potential for future growth.
And so, what I'd say to those two young individuals you talked about is, okay, “What's the value of $12 in your life? What is it going to do for you?” Right? Okay. Well, and I'm probably showing my age here, but, like, I would have bought a CD with it, right? [Niki: Right] So, I would have listened to, y’know, Mariah Carey's latest or whatever it is.
Niki: [laughing] I'm older than you are because I would have bought, like, Guns ‘N Roses cassette tape.
John: Okay, great.
John: “So, that $12 essentially is here and gone, right? But if you have $12 in Bitcoin and you let it sit, well, it could grow. Now, you could lose your money, but I think the overall picture of it since its inception is one of growth. So, so, what do you want more, $12 today or the potential of $1, 200 10 or 15 years from now?” Because $12 doesn't do a lot for me or for that individual, I'd take the potential on $1,200.
John: When we invest, we all allocate a certain percentage of our funds towards risk and a certain percentage of our funds toward likely returns. [Niki: right] We put money in bonds, in theory, with the idea that the government's probably not going to go bankrupt any time soon or become so dysfunctional that it can't pay its bills. And then, we also put, y’know, money in certain stocks that have growth potential. And so, it's not really that different with Bitcoin. What you're getting is an alternate store of value, and it may or may not pay off.
I'm not a Maxi by any, y’know, stretch of the imagination.
Niki: Maxi, for people, is - just means you just believe in Bitcoin. [John: Yes! Yes!]
It stands for maximalist.
John: But I have love for the Maxis! [Niki: Right] I have love for all the maxis, but I am not one.
I just think it represents a store of value. There's a tight circulation on it, and it will always have this kind of nostalgic appeal, right? Because it'll always be kind of the first one. So, if you have one, it's likely to be worth something in the same way that, y’know, if you've got a Michael Jordan card kicking around, it's worth something.
Niki: Right, and just having it, to your point, as “Who knows what the future is going to bring?” It's an option to have it on your phone. [John: Right] Or in your wallet as value you can carry around no matter what happens to the nation-state you live in.
John: So, I don't know about you, but I would have never thought of this in the ’90s, right? We live in more uncertain times now than any time in our lives, right?
Niki: Oh! Bitcoin is part of my Handmaid's Tale plan. [John: Right]
I have a whole plan, I got a go-bag, and it includes a number of things [John: Yeah] I'm taking with me to wherever I need to go. [John: Yeah] And that might sound crazy, it might, [John: Yeah] but who knows what's gonna happen?!
John: I mean, if you look at like the last ten years, we had January 6th, we've had multiple close run-ins with the debt ceiling, which would have unknown impacts on the financial system. So, all of those things should, y’know, sober us up and say, “Hey, there's ways to hedge risk. We ought to explore them.”
Niki: Okay. So, just to wrap this up, I'm not going to mention to the 12-year-olds that they should have a zombie plan that includes [chuckling] alternative currencies.
John: No! No! No! [Niki: laughing] And to be clear, I have no stores of canned goods in my house. My cupboard is bare.
Niki: [laughing] So, I have a few Cliff Bars, a small amount.
John: I've got Cheez-Its. Do you like Cheez-Its?
Niki: Okay. [laughing]
John: I've got Cheez-Its.
Niki: You’ve got Cheez-Its. I've got a small amount of Bitcoin.
John: If the world ends, you and I could live on Bitcoin and Cheez-Its.
Niki: laughs] That's basically the plan. So, not gonna talk to them about the world ending, but, [John: Right]
And also, this is clearly not financial advice.
John: [interrupts quickly] As some, as someone who spent their entire life in government, I should never offer financial advice.
Niki: Yeah. Neither of us are offering financial advice. [John: Right]
But the idea that this is just a technology. Letting people have the freedom to decide if they want to have diversity in how they're hedging value, have diversity in the types of currency they want to have.
And even if Americans don't want it at all, don't care, and don't know how it works, we surely don't need to be sending it overseas.
Niki: This could happen to AI. What's happening with crypto, which is, like, we probably have an 18-month runway [John: Yeah] before it's, before this could, y’know, into the next administration where you might just see everybody move overseas. It's like the semiconductors. [John: Yup]
It could happen with AI.
John: With AI, and I think you'd tweeted something the other day when Gensler gave a speech about AI, and it was eerily similar to the thoughts he gave early on about crypto: “There's an innovation here, but there's a lot of fraud.” And my immediate thought is, they're setting the stage, this group of, y’know, people on the super left to do the same thing to AI that they've done to crypto.
For me, I think AI is in the most vulnerable position that I can remember any industry being, new industry being, in my lifetime. And that's because there are people on the left and the right that are deeply suspicious of it. And that's unique for a new industry.
If you go back in time, you look at other new industries; it's highly unusual to have both political parties deeply suspicious of it. And I think the AI industry is in real danger of getting run over by Washington if they don't make fast moves now.
Niki: And this brings us full circle because that is an opportunity for professional communicators. [chuckling]
John: It is. Indeed it is!
Niki: And that's what we both do. The idea is to tell a story or try to tell a story that wins hearts and minds [John: Yeah] to get the right policy outcomes in D. C.
John: That's right. I mean, and if you're the AI industry right now, the biggest danger that they face is that the public doesn't know a lot about what they do, but they're scared of it. And you've got politicians that recognize that and recognize how easy it would be to demagogue AI.
And so we've seen a lot of engagement from the AI industry in Washington right now, but we actually haven't seen a ton of engagement with the American people, which is their Achilles heel.
Niki: That's right! And on all these things, if you can't convince the voters to care [John: Right], then you might end up with people doing things that are not necessarily in the interest of the American people.
John: Right, exactly. And what people, I think, probably, don't understand is that AI has been around for a long time, right? [Niki: Yes] We've all, like, used Spellcheck, right? We all have automatic braking systems, right? [Niki: Yeah]
So, the story the industry needs to tell is what AI is, why it could be beneficial in people's lives, and why it is not a threat to their very existence or economic well-being, right?
And then, from there, what they've got to do is get ahead of where the government is on consumer protection, because right now the government is setting the pace.
You had some major AI companies sign a pledge from the White House. That's a dangerous place to be for industry, in my view, because if the White House, no matter what party it is, is setting the consumer protection agenda for your industry and you're not setting it, then you're behind.
And at some point, the AI industry and the White House, any White House, their interests are going to diverge. And so, what AI has to do is be ahead of that so that they can argue to the American people that they're right and government's wrong, if that's what they believe.
Niki: And this is fundamentally something that I say every single day to all of my clients across the tech industry is you aren't just communicating to policymakers, [John: Yeah] which is what some doing something with the White House does.
You're communicating with the people who are going to be using this, who need it, [John: Yeah] and are going to want to demand access to it.
John: So. Influence is multifaceted, right? If you're just dumping money into shoe leather lobbying, like, good luck. Because the moment that a politician perceives that the public is contrary to your interests, it doesn't matter what lobbyist you've hired, how much you've donated, it's done.
What you've got to do as an industry, and this is true of AI, this is true to crypto, is how do you align the public's interest with your interest, right? You've got to understand your audience, right? In some cases, that's base persuasion. In other cases, that's convincing voters who aren't too sure about your product, or your service, or your technology.
And in some cases, that's taking people who are opposed to you and, like, softening those edges, right? And that's how you actually do public affairs communications, right? You look at each discipline, the shoe leather lobbying, the kind of donating campaigns, the communicating with the American public, and you do them all together in concert, and that's how you get a result.
Niki: Yeah, it's a campaign!
John: Always! Permanent!
Niki: It's a permanent campaign.
John Rizzo, thank you for taking the time to come on. This was a really fun conversation.
John: Alright, thanks a lot. Appreciate it.
Niki: On our next episode, I’m talking to Kai Kloepfer, CEO of smart gun start-up Biofire. His company has built a firearm that can only be fired by its owner, using fingerprint sensors and facial recognition. James Bond had one years ago, but Biofire’s is the first one real people can purchase.
Don’t forget to click to subscribe wherever you get your podcasts & if you like the show, please recommend us to a friend or drop a friendly review. We’re hoping to be around for another 60 episodes [chuckling], although it honestly makes me a little tired to think about it!