James Fishback: Meritocracy vs DEI: The Business Case You Need to Know | DSH #1492

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Speaker 2 Terms apply. Democracy.
It means you hire people not on the color of their skin or on their gender, but on their skills and abilities and nothing else.

Speaker 2 And so a company like Nike says that they mandate 35% of their workforce in the U.S. be racially and ethnically diverse.
Wow.

Speaker 2 What on earth does that have to do with selling a pair of Jordans at a profit?

Speaker 4 Okay guys, we got James here, founder of Incubate Debate, one of the fastest growing debate leagues in America. Thanks for coming on, man.
My pleasure, Sean.

Speaker 4 What a good skill to teach young people, right? It's an important skill.

Speaker 2 It changed my life.

Speaker 4 How to change your life?

Speaker 2 I had a really bad stutter growing up. I was thrown on the high school debate team by accident.
I needed an extracurricular,

Speaker 2 and they threw me in.

Speaker 2 And it turns out going to a debate tournament every other weekend for four years straight and debating immigration and economic policy will help you get rid of your stutter and other benefits as well.

Speaker 4 Nice. So as someone's super well-versed in debates, who are your goats of debating?

Speaker 2 Gosh.

Speaker 2 Let me first preface it by saying, I may not agree with these people in terms of their own politics, but I appreciate their style. I think that

Speaker 2 Ted Cruz is a great debater. Really? I think Destiny's a great debater.

Speaker 2 I think that Pete Buttigieg, who is not seen as really a debater, but he went on Jubilee right before the election and was talking to voters.

Speaker 2 I disagree with a lot of what he said as an unapologetic conservative. I thought he did a really good job of listening.
I think the best debater listens more than they speak.

Speaker 2 And when they speak, they're responding to what they listened. And so there's a lot to that.
And then, you know, I think President Reagan's a classic. I think there's

Speaker 2 a lot of skill to what Trump does, which is when he was on that debate stage in 2016, there were 16 people. He had to win.
He won pretty much every time.

Speaker 2 There's a unique style that he has to stand out. But my favorite debaters, I'm going to tell you, are the students in Incubate Debate, what they do.
People like James Saban, Rodrigo Deleon Ruiz, J.C.

Speaker 2 Swearingen, Sophia Cristadolu, William Kuiker. These are students that inspire me and I think inspire a lot of people.

Speaker 2 When they go into a round, not knowing which side they're going to be on, Sean, on whether it's supporting or being against Doge, supporting or being against mass deportations. And then at the flip of

Speaker 2 a dime, they are on a different side they didn't necessarily support, but they're debating with that same fervor and analytical prowess. Wow, that's impressive.

Speaker 4 So they got to be well-versed in both sides. They have to be.
Yeah, because if you know your opponent better than they know themselves, then you got the edge, right?

Speaker 2 Absolutely do.

Speaker 4 That's so cool. Wow, listen more than they speak.
Because when you think of debate, you think of someone that's like

Speaker 4 leading the way, right? That's right.

Speaker 2 And destiny, I mean, look, again, politics aside, I respect the heck out of him.

Speaker 2 He actually came to our Incubate National Tournament last month, didn't just debate students, but judged the final round. Wow.

Speaker 2 And gave students a lot of pointers that were not political in nature, just different ways to approach debate.

Speaker 2 One thing that he said that really struck with me that we've talked a lot about Incubate is specificity breeds credibility.

Speaker 2 The more you know and the more specific you can be about a topic, the better debater you will be because the more confident you will be and the more credibility you'll have in the eyes of your audience.

Speaker 2 So for example, if you're talking about

Speaker 2 a government agency laid off certain workers, what's the name of that government agency? When did they lay them off? How many did they lay off? And the people they laid off, what did they actually do?

Speaker 2 If you know all of that, you can represent that position from both sides.

Speaker 2 And the more credibility you you have by rattling off those really interesting facts that show that you actually know what you're talking about, that specificity gives you credibility in the eyes of your audience.

Speaker 4 Absolutely, because a lot of people make these broad statements.

Speaker 2 Very broad statements. They'll say things like, there was enormous job loss because of Doge, right? Well, give us a number.
There was... an enormous amount of casualties in the war in Iraq.

Speaker 2 There's actually a number. Give us that number.

Speaker 2 There are too many people who die at the hands of urban violence. Give us that number.
One, I think just the debating aside,

Speaker 2 the folks who are in that issue, who are living that issue, whether they lost their lives or families know someone who lost their life or lost their job, they deserve the dignity of being represented not by

Speaker 2 generalities, but by the specific numbers that speak to their situation. And then as a debating practice, it's really darn impressive if you actually can have those specifics.

Speaker 2 Anybody can come on and say a lot, enormous, significantly.

Speaker 2 If you can give us actual dates times and places and actual numbers huge debate success and the biggest part no one talks about is it makes you more confident and when you're confident you project that confidence outward right it's such a good skill to have I wish more schools took it serious I remember when I was growing up I was one of those kids that made fun of the debate team like classic bullying or whatever but now I have so much respect for debaters yes because you really got to be it's a skill it's an absolute skill and the truth is as much as I'd love to see a debate team at every school in America public all right, guys, Sean Kelly here, host of the Digital Social Hour podcast.

Speaker 4 Just filmed 33 amazing episodes at Student Action Summit. Shout out to Code Health, you know, sponsor these episodes, but also I took them before filming each day.
Felt amazing.

Speaker 4 Just filmed 20 episodes straight and I'm not even tired, honestly. Much like this, where it's just based off, you know, the code, the codes that are in the saline solution.

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Speaker 2 Not happening anytime soon. Less than 1% of schools have an active competitive debate team.
What we're doing at Incubate Debate is we have just launched a toolkit that 12,000 teachers using.

Speaker 2 It's completely free. It allows those teachers to host in-class debates for their students that are directly tied to what students are learning.

Speaker 2 So for example, your 10th grade world history teacher, after teaching about World War II, there can be a debate about whether or not the U.S.

Speaker 2 needed to bomb Japan in August of 45, Hiroshima and Nagasaki, in order to get them to surrender. Wow.

Speaker 2 So instead of the 18th quiz or the ninth essay of the semester, let's give teachers the tools to equip their students to put together a platform in the classroom so everyone can participate in debate at least once in high school.

Speaker 2 Our goal is to get 20,

Speaker 2 by 2030, to get 1 million young people in America in the classroom debating.

Speaker 2 And we're about 25,000 students there so far, and we've got five more years. So it's going to be exciting.

Speaker 4 I love that, man. You also got a big fund.
You just launched, right?

Speaker 2 It's also a big fund on the New York Stock Exchange this week it is called the azoria 500 meritocracy fund what's great about the azoria fund is it's an anti-dei fund which means it only invests in s p 500 companies that are meritocracies to be a meritocracy it means you hire people not on the color of their skin or on their gender but on their skills and abilities and nothing else and so a company like nike says that they mandate 35% of their workforce in the U.S.

Speaker 2 be racially and ethnically diverse. Wow.

Speaker 2 What on earth does that have to do with selling a pair of Jordans at a profit?

Speaker 2 Right? So what we've done is our team has looked at the entire S ⁇ P 500. We've identified 37 companies like Nike, Intel, Starbucks, and Airbnb that have these DEI hiring quotas.
We've excluded them.

Speaker 2 And the money that would have gone to those S ⁇ P companies, we've now redirected into companies that are hiring the best and brightest, like NVIDIA, Tesla, Microsoft, and they're not apologizing for hiring the best and brightest.

Speaker 2 The truth is that black...

Speaker 4 I hope you guys are enjoying the show. Please don't forget to like and subscribe.
It helps the show a lot with the algorithm. Thank you.

Speaker 2 Black Americans, female Americans, Hispanic Americans, they don't need a DEI hiring target to succeed.

Speaker 2 And the problem is, is that white Americans and Asian Americans who are extremely qualified are being turned away because they do not meet that rigid definition of diversity.

Speaker 2 And they don't get to add to that company, add their skills, add their talents. And what happens as a result? Well, you could imagine the company becomes less successful and less profitable.

Speaker 2 What we found is those 37 companies with DEI hiring quotas, they have underperformed the stock market over the last two years by 19 points. Wow.
So it's a stupid policy.

Speaker 2 It's also a financially reckless policy, which is why we've kicked them out, started our own ETF. The ticker is SPXM.
And anybody who has an SP 500 ETF, take a look at SPXM instead.

Speaker 2 Just yesterday, Friday, we had $16 million go into our fund in just one day. It's our first week, but on Friday, we had $16 million go into the fund.
We're at the start of something special.

Speaker 2 And I thank all those investors who are moving away from BlackRock, State Street, and Vanguard, those traditional SP 500 funds, and putting their money with Azoria. I thank them a lot.

Speaker 2 It means a lot to have ourselves.

Speaker 4 I love to see how that performs over time.

Speaker 2 Yeah, that's the goal, right? I'm making the bet of my career that meritocracy will outperform DEI. And we'll come back, hopefully, in two years, Sean, and we'll revisit this.

Speaker 2 But ultimately, ultimately, this is one thing that's going to be totally falsifiable. You will know, the public will know whether we were right and they were wrong.

Speaker 2 And I think we're going to be right.

Speaker 4 What gave you so much conviction? Were you researching this for a while?

Speaker 2 I was. I spent 10 years working at hedge funds.
I started my own after I dropped out of college, and then I worked for a guy named David Einhorn as a macro trader.

Speaker 2 And so I've spent the last 10 years, not in the political world, as really as a spectator, as someone who voted for Trump proudly all three times.

Speaker 2 But I come at this not as trying to make a political statement, but I want to maximize returns for investors. And that's what this fund is all about is how do we exclude something?

Speaker 2 Because what BlackRock does is they buy every company in the SP 500, win, lose, or draw.

Speaker 2 If that company is pursuing a policy that's obviously destructive, that's obviously hurting shareholders, that's obviously not good for employees, BlackRock, per their mandate, has to buy into that company.

Speaker 2 Azoria doesn't. Our mandate is meritocracy.
Their mandate is copy and paste the SP line item, line item, line item.

Speaker 2 And so when you have that flexible mandate to say, if Starbucks is pursuing a bad policy when they say that 30% of their baristas have to be ethnically diverse, again, what on earth does that have to do with making a good cup of coffee at a profit?

Speaker 2 We have natural diversity in America. We don't need to force diverse outcomes.
And people will come to me, Sean, and they'll say, well, you're against diversity.

Speaker 2 No, I say diversity is a beautiful thing. Natural diversity.
Marriage is a beautiful thing. Natural marriage.
Arranged marriage is bad.

Speaker 2 Arranged marriage, forced marriage is bad. Forced diversity is bad.

Speaker 2 It's bad for all sorts of reasons, but the number one reason it's bad is because what Clarence Thomas talked about, when he got into Yale, he didn't know if he got in because of his skills and his talents, or he simply got in because he was a black man.

Speaker 2 And so what ends up happening is in an environment, in a workforce that's steeped in these DEI quotas, you have employees who look around wondering whether their colleagues or even they themselves deserve to be there.

Speaker 2 Imagine what that does for company morale, employee trust, telling employers you can't hire people who are eminently qualified because they're not diverse enough, and you must hire these people because they meet your arbitrary definition of diversity.

Speaker 2 It's a recipe for disaster. It's a social experiment.
We all know how it's playing out. The last two years have shown massive underperformance.
We launched this fund and we're off to a strong start.

Speaker 4 100%. I've always been results oriented.
I don't care what you look like, what genes are. Exactly right.
It doesn't matter, right?

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Speaker 4 Absolutely. What else, other than the fund and the debate are you working on right now?

Speaker 2 You know,

Speaker 2 for me,

Speaker 2 I'm thinking about how we could help the president.

Speaker 2 He got a huge mandate in November, as you know, won all seven swing states, the popular vote, the electoral vote, across the board mandate to enact this America First agenda. The truth is,

Speaker 2 voters did their

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Speaker 2 They voted for him. Trump did his part.
He's enacting a sweeping agenda that's extremely popular. Inflation is down.
The border is closed.

Speaker 2 Sean, this time last year, 30,000 people a month were coming into our country. We had no idea who they were or where they were coming from.
That has ended. We started sending them back.

Speaker 2 What has happened as a result, Americans can now get jobs again. A meat processing factory in Omaha, Nebraska was raided last month by ICE.

Speaker 2 Those folks who were in the country illegally were sent back home. And guess what happened the next day? Dozens of Americans showed up and wanted those jobs.

Speaker 2 The idea that Americans don't want these jobs is preposterous. Here's why.

Speaker 2 There's no single occupation in America, not a carpenter, not a plumber, not an agricultural worker, where native-born workers are outnumbered by immigrants. Not a single one.
Not a single one.

Speaker 2 And the second part is to the extent that there are Americans who are reluctant to pick marijuana crops in Southern California.

Speaker 2 You may have seen the footage this past week, it's because they were reluctant to do it at the wage that they were offering.

Speaker 2 So, what do big companies do who are greedy, who want to pad their profit margins? They exploit cheap labor from migrants from the third world who are desperate.

Speaker 2 and exploit the labor of their children.

Speaker 2 We saw the footage from California, this cannabis farm, where there were nine, 10, and 11-year-olds working the fields, the children of illegal immigrants being exploited, so Chelsea Handler could smoke a blunt.

Speaker 2 It's absolutely ridiculous. And so it's incredible that the Democrats are dying on this hill of we want our illegal migrant child labor, and we want it now.

Speaker 2 What President Trump is standing for is the dignity of every American worker to have a living wage and to not have to compete with employers who are exploiting illegal illegal labor from the third world.

Speaker 2 That's not fair to anybody, least of all to the migrants, by the way. They don't deserve to be exploited that way.

Speaker 2 And Americans don't deserve to be robbed of having a job and having the income and the wages and the purpose and the dignity that comes with holding down a job in America. Absolutely.

Speaker 4 James, thanks for your time, man. Where can people find you, find the fund, and find the debate league?

Speaker 2 Yeah, so the fund is Ticker, SPXM, Robin Hood, Public, Webull, any of those sites, any brokerage you buy stocks, you can look at our fund. You can learn more at investasoria.com.

Speaker 2 Our Incubate Debate league is incubatedbate.org, and on X, I'm James Fischback.

Speaker 4 Thanks, Brad.

Speaker 2 Thanks, Sean. Have a go on fishing.
Yep.