0:00:02 Support for Prop 3 comes from Viore.
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0:01:00 Now streaming.
0:01:03 What do you know about the Happy Face killer?
0:01:04 He’s my father.
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0:01:09 Experience the thrilling new series.
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0:01:15 If I don’t deal with him, he will never leave us alone.
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0:01:20 Annalee Ashford and Dennis Quaid star.
0:01:22 I am not responsible for what my dad did.
0:01:25 Just going how you hoped.
0:01:29 Happy Face, new series now streaming exclusively on Paramount+.
0:01:34 I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:38 A key question for all business leaders and owners.
0:01:42 Are you paying your people a living wage?
0:01:48 Project 2028 Wages, as read by George Hahn.
0:02:02 Democrats need to be the party of ideas, not indignation.
0:02:09 Our Project 2028 series addresses critical issues facing America through a No Mercy, No Malice lens.
0:02:13 Today, we shift from housing to wages.
0:02:30 Before he was sworn in as Treasury Secretary in January, hedge fund manager Scott Besant warned that failing to extend $4 trillion in tax cuts would trigger an economic calamity.
0:02:38 This is true if calamity means a reduction in the wealth of the richest Americans and large corporations.
0:02:40 What bullshit.
0:02:52 The real calamity is the poverty and inequality that’s set to worsen as the Trump administration advances policies that will disproportionately benefit a small number of people.
0:02:55 See above, the richest Americans.
0:03:04 The illusion of complexity is weaponized by the incumbents to mask a simple truth.
0:03:17 The clearest, blue-line path to a decrease in obesity, depression, incarceration, gun deaths, divorce, diabetes, homelessness, and crime is, wait for it,
0:03:22 to put more money in the pockets of lower- and middle-income citizens.
0:03:27 And the easiest way to do this is to hike the minimum wage.
0:03:40 Raising the pay floor to $25 an hour would ensure that Americans can afford to have children, if they want, feed their families, and pay for housing and health care.
0:03:45 In 2009, the minimum wage was $7.25.
0:03:56 Since then, the cost of a Big Mac, the average rent, and the NASDAQ have risen 60%, 70%, and 800% respectively.
0:04:04 Meanwhile, the minimum wage has rocketed from $7.25 to $7.25.
0:04:15 Even though many states and cities have raised their minimum wage, one in four U.S. workers still makes less than $17 an hour.
0:04:24 With the government failing to act and many companies content to sequester record profits at the expense of the working class,
0:04:28 leaders of successful American businesses should step up.
0:04:42 The system is broken when 18 million U.S. households are struggling to secure enough food,
0:04:51 and 12 million renter households are severely cost-burdened, spending more than half their earnings on housing and utilities.
0:04:55 In theory, wages are dictated by the market.
0:05:01 But the market is inherently imbalanced, and employers are the ones who have the upper hand.
0:05:09 The government has the power to level the playing field by setting the floor on compensation at a living wage,
0:05:15 what a full-time worker must earn on an hourly basis to cover the cost of their family’s basic needs.
0:05:18 This should be table stakes.
0:05:29 In a society where one company, NVIDIA, adds $277 billion in market capitalization within five minutes of its earnings release,
0:05:33 and one in five households with children is food insecure,
0:05:43 we have decided that America is an operating system to optimize the output of the bottom 99% for the benefit of the top 1%.
0:05:46 Enough already.
0:05:50 But a living wage means much more than that.
0:05:58 Vulnerable workers are less likely to defer medical care, suffer from depression and anxiety, or commit suicide.
0:06:05 Less likely to burden emergency rooms, lose their job due to illness, or get saddled with crippling debt.
0:06:14 We know increasing family income dramatically improves childhood development, producing better educated and healthier adults.
0:06:28 It’s also a race and gender-blind means of redressing inequality in pay and increasing opportunities for women and ethnic minorities who are overrepresented in low-wage jobs.
0:06:37 This is affirmative action as it was meant to be, focusing on people who need it most versus their identity.
0:06:50 In Los Angeles, a single adult without children needs an hourly wage of $27.81 to cover basic costs, according to MIT’s living wage calculator.
0:06:59 Two working parents with two children must each earn $32.69 an hour.
0:07:05 L.A. is expensive, but the living wage in many parts of the country isn’t significantly lower.
0:07:16 In Kansas City, the living wage for a single adult is $22.75, or $27.55 for two working parents with two kids.
0:07:27 In Mississippi, the poorest state in America, you’d need to make an hourly wage of $20.75, or $22.43, respectively.
0:07:41 In his confirmation hearing, Besant said he sees the minimum wage debate as, quote, more of a statewide and regional issue, unquote.
0:07:51 Elected leaders are big on states’ rights as a weapon of mass distraction when it suits their agenda, and indeed, many states have stepped into the void.
0:08:03 By 2027, 19 states and Washington, D.C., covering almost half of the U.S. workforce, will likely have a minimum wage of at least $15 an hour.
0:08:10 But this is a critical federal issue, one that Democrats should continue to spotlight.
0:08:16 The meager minimum wage has a knock-on effect, keeping pay lower for millions of people.
0:08:20 The numbers paint a depressing picture.
0:08:26 Although relatively few people receive the federal minimum, many are struggling to stay afloat.
0:08:31 Almost 6 in 10 jobs pay less than $25 an hour.
0:08:42 There isn’t a single state, metro area, or county in the U.S. where a full-time minimum wage worker can afford a modest two-bedroom rental.
0:08:50 You always hear the same bullshit narrative from opponents of increasing the minimum wage.
0:08:59 They argue it will hamper the competitiveness of businesses and lead to closures and job losses, hurting the workers it’s meant to help.
0:09:03 If employers have to pay workers more, they’ll hire fewer of them.
0:09:06 These are scare tactics.
0:09:12 Research shows raising the minimum wage would have little to no impact on employment.
0:09:19 In fact, it can have a stimulative effect as workers spend their additional earnings.
0:09:26 When paid well, workers are more productive, and they’re less likely to leave, reducing costs for employers.
0:09:30 Some businesses fold, and they should.
0:09:34 They are the weakest performers and, quite frankly, shouldn’t be in business.
0:09:39 The lost employment is mostly absorbed by stronger firms.
0:09:44 Another way businesses adapt to higher wages is by raising prices.
0:09:48 But economists find it leads to scant price hikes.
0:10:02 One analysis of restaurant food pricing between 1978 and 2015 showed prices rose by just 0.36% for every 10% increase in the minimum wage.
0:10:12 There’s rarely a free lunch, and some companies, like McDonald’s, Walmart, would register a significant decrease in profits and share price.
0:10:14 It would be worth it.
0:10:24 For much of the 20th century, unions played a critical role in trying to equalize the balance of power and obtain higher wages for workers.
0:10:31 However, unions have struggled to overcome corruption, adapt to innovation, and maintain relevance.
0:10:41 The share of U.S. workers who belong to a union fell to about 10% in 2023, from about a third in the 1950s.
0:10:52 Although 70% of Americans say they approve of labor unions, only 28% say they have quite a lot or a great deal of confidence in them.
0:11:01 The states that need unions the most are hostile to them, and the overwhelming majority of Western nations with unions have shed membership.
0:11:22 The U.S. economy can support a far larger share of wealth going to lower-income workers.
0:11:35 Between 1938, when Franklin D. Roosevelt signed the first minimum wage into law, and 1968, the federal minimum wage was regularly increased to account for inflation and productivity.
0:11:49 A 2020 study found that if the U.S. had continued to increase the minimum hourly wage in line with inflation and productivity growth, it would have reached $21.50 an hour.
0:11:53 Today, it would be close to $25.
0:11:57 More than tripling the minimum wage wouldn’t be easy.
0:11:59 The shift would need to occur in phases.
0:12:05 Some sectors and regions can make reasonable arguments in favor of exemptions.
0:12:13 The living wage is also not the same in all regions, so some exceptions would make sense, though we’re an increasingly national economy.
0:12:20 The prevalence of chain stores and online platforms with standardized pricing are closing regional gaps.
0:12:33 We need a system where successful CEOs and founders who demonstrate real talent earn enormous pay, and workers, at the other end of the spectrum, earn a decent living.
0:12:35 That’s often not the case.
0:12:39 Income inequality has gone berserk.
0:12:54 From 1978 to 2023, compensation for top CEOs exploded 1,085%, compared with a 24% rise in the typical workers’ pay.
0:13:07 The median pay package for an S&P 500 company leader climbed to more than $16 million in 2023, almost 200 times the median workers’ wages.
0:13:24 Sue Nabi, CEO of beauty products company Kodi, earned an eye-popping $149 million in 2023, while the median worker at the company earned $39,643.
0:13:37 Those employees would need to work for 3,769 years to earn what Nabi received in one, according to an analysis last year by the New York Times.
0:14:01 Lowe’s, meanwhile, spent $42.6 billion, buying back its own shares between 2019 and 2023, enough to have given each of the company’s 285,000 employees an annual $29,865 bonus for five years, according to the Institute for Policy Studies.
0:14:15 While CEO Marvin Ellison received $18.8 million in 2023, the retailer’s median annual worker pay was just $32,626.
0:14:23 Successful, independent businesses can’t lead the revolution, but should support it.
0:14:33 Not only can many companies increase their labor costs, they should, even if it takes a modest bite out of the earnings of the ownership class.
0:14:39 This makes financial and economic sense, while generating reputational benefits, too.
0:14:50 Think about companies that carry the fair trade stamp, guaranteeing farmers and workers receive a minimum price plus a premium payment to invest in improving their quality of life.
0:14:52 Companies are starting to get it.
0:14:53 Companies are starting to get it.
0:15:01 Bank of America has been raising its U.S. minimum hourly wage and pledges to hit $25 this year.
0:15:07 CEO Brian Moynihan expects to get payback in the form of lower turnover.
0:15:15 Globally, L’Oreal, Schneider Electric, and Unilever are among corporations that have committed to provide living wages.
0:15:24 Democrats shouldn’t lose sight of the extent to which this issue resonates with vast swaths of the American public.
0:15:32 Polling shows the long-debated idea of raising the minimum wage is popular with Republicans and Democrats alike.
0:15:44 For Kamala Harris, waiting until two weeks before the election to make a case for boosting the minimum wage to at least $15 an hour, felt $10 short and several years late.
0:15:55 Since 2000, corporate after-tax profits have surged roughly six-fold, while wages have only inched higher.
0:16:00 An economy that values work below the cost of living is broken.
0:16:08 An economy that does so while delivering massive profits to wealthy owners is a moral failure.
0:16:11 Inequality is a choice.
0:16:20 We have the power to give all Americans an opportunity to earn a wage that allows them to live a life of dignity.
0:16:23 What happens next is up to us.
0:16:30 CEOs and entrepreneurs should be bold.
0:16:42 Today, I’m making a commitment to pay my Prof. G contractors and employees at least $50 an hour or $100,000 a year in total compensation, respectively.
0:16:48 And I’m challenging other CEOs and entrepreneurs to join me.
0:17:06 A shit ton, minus half a million dollars each year, the cost for Prof. G Media to become a maximum wage firm, is fine.
0:17:11 It’s not only the right thing to do, it’s smart business.
0:17:14 If I sound like I’m virtue signaling, trust your instincts.
0:17:15 And that’s okay.
0:17:25 One of the biggest unlocks in my life has been recognizing that being a man means adding surplus value.
0:17:28 Creating more tax revenue than I absorb.
0:17:30 Listening to more complaints than I make.
0:17:32 Noticing people’s lives.
0:17:36 Providing more net care and love.
0:17:40 I have run firms my whole life.
0:17:46 And I’ve always aimed to provide the minimum compensation required such that employees won’t leave.
0:17:47 No more.
0:17:50 By the way, this is how nearly all companies work.
0:17:52 Optimizing for profits.
0:17:57 This is a result of the incentive system in a capitalist society.
0:18:01 As it increases the enterprise value, profits, of the firm.
0:18:04 And the likelihood the business survives.
0:18:10 Our entire society now prays at the altar of shareholder value.
0:18:13 Prioritizing them over every other stakeholder.
0:18:15 Dramatically.
0:18:21 If you are blessed with a company that’s doing well, why wouldn’t you pay more than you need to?
0:18:27 Do you love your kids, community, and country just enough that they don’t abandon you?
0:18:40 One of the most rewarding things about running a firm is it mimics some of the maternal or paternal feelings of reward you get from protecting and providing for your offspring.
0:18:47 I’ve worked hard, I’m talented, and I made the genius decision to be born in America.
0:18:52 The result is I’ve got a firm that’s exceptionally profitable.
0:18:57 One of the many rewards of that is I get to pay people more than I need to.
0:18:59 It feels great.
0:19:04 Life is so rich.

0:00:02 Support for Prop 3 comes from Viore.
0:00:04 Oh my God, true story.
0:00:09 I am wearing, totally coincidentally, guess what, Viore shorts.
0:00:14 Viore’s high quality gym clothes are made to be versatile and stand the test of time.
0:00:17 They sent me some to try out and here I am.
0:00:21 For our listeners, Viore is offering 20% off your first purchase.
0:00:26 Plus, you have free shipping on any U.S. orders over $75 in free returns.
0:00:31 Get yourself some of the most comfortable and versatile clothing on the planet, Viore.com slash Prop G.
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0:00:37 Exclusions apply.
0:00:40 Visit the website for full terms and conditions.
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0:02:23 Episode 342. Route 342 is an east-west highway in New York.
0:02:25 In 1942, Disney released Bambi.
0:02:29 I used to call my girlfriend Bambi, and she thought it was because she had big, beautiful eyes.
0:02:33 No, it was because I wanted to shoot her mother with a hunting rifle.
0:02:37 Go, go, go!
0:02:47 Welcome to the 342nd episode of the Prop G. Pop.
0:02:48 What’s happening?
0:02:50 The dog is home in London.
0:02:51 I’m back in London town.
0:02:53 People say, why did you move to London?
0:02:54 People always say that.
0:02:56 And I say, well, why am I in London?
0:02:59 I’m an influencer, not a decision maker on these issues.
0:03:04 The mother of my children said, seven years ago, we’re moving to London in five years,
0:03:05 or seven and a half years ago.
0:03:09 And then she actually called my bluff, came over here, bought a house, involved the kids
0:03:12 in school, and then boom, we’re in London.
0:03:13 So let’s stack rank London.
0:03:15 What’s the good?
0:03:15 What’s the bad?
0:03:16 People are like, do you like it?
0:03:17 Do you love it?
0:03:18 No, I don’t love it.
0:03:19 I don’t love it.
0:03:22 There’s some, let me start with the good.
0:03:24 It’s a world-class city.
0:03:31 I think mostly because it became a haven for private capital or wealthy people looking to
0:03:32 engage in tax avoidance.
0:03:35 And let’s be honest, that’s what you do when you get rich.
0:03:38 And part of the reason people are rich is because they’re obsessed with money and they think about
0:03:38 it a lot.
0:03:41 Things you’re obsessed with, you tend to be better at than things you’re not obsessed
0:03:47 with and Prime Minister Tony Blair at the time passed a series of private property laws that
0:03:51 said, if you’re a war criminal or an oligarch or just made a shit ton of money and you’re
0:03:56 worried about taxation, you can bring all your capital here and it’s safe and no one can come
0:03:57 for it and take it.
0:04:01 And also whatever money you keep offshore, we will not tax.
0:04:04 And if you think about it, well, you don’t get to do that in America.
0:04:08 If you make a bunch of money in businesses and Korea or whatever, and you repatriate it and
0:04:12 bring it home such as you can spend it on hookers and cocaine, that’s where I go.
0:04:14 That’s where the dog goes.
0:04:18 Then you get taxed on it, as you should be.
0:04:23 And in the UK, that money, as long as it stays outside of the UK, you don’t get taxed on it.
0:04:24 So we get a lot of rich people coming here.
0:04:27 Anyways, what do I like about the UK?
0:04:28 Let’s stack rank it.
0:04:29 It is a great city.
0:04:33 I’ve been coming to London for about probably 50 years.
0:04:38 I’ve been coming here since I was a wee one, since I was a wee skipper.
0:04:42 Because both my parents are from the United Kingdom.
0:04:44 My father from Glasgow, my mother from London.
0:04:49 And this place has slowly but surely gotten the mother of all facelifts over the last 50 years.
0:04:51 In the 80s, this was not a nice city.
0:04:53 The food sucked.
0:04:56 The infrastructure was crumbling.
0:04:58 There weren’t a lot of innovative businesses here.
0:05:00 It just wasn’t where you would decide to spend a lot of money.
0:05:06 Now it really is sort of the most probably livable city if you’re coming from America and an English speaker.
0:05:08 So there’s really interesting people.
0:05:09 It is a world-class city.
0:05:11 Premier League football, another amazing thing.
0:05:15 Best thing about the UK, in my view, proximity to the continent.
0:05:18 And also, I will say that people are very welcoming here.
0:05:21 You come here and people immediately say, oh, you’re new?
0:05:23 I had someone come up to me in the park and say, oh, you’re new?
0:05:23 Come over.
0:05:24 We have dogs.
0:05:25 We’ll have dinner.
0:05:26 I’m not comfortable with that.
0:05:31 I don’t want to go to strangers’ house for fear that I walk in and it’s sort of weird and I think I’m trapped here for two and a half hours.
0:05:34 But anyways, people have dinner parties when you arrive.
0:05:35 Very, very nice.
0:05:37 I found it very warm and welcoming culture.
0:05:38 The downside.
0:05:39 The downside.
0:05:46 The second worst thing about it here, the business environment is really anemic, comatose.
0:05:50 I just don’t find there’s the same entrepreneurial flair.
0:05:56 I don’t know what it is, but I have found that the majority of the economy here is about serving wealth that’s been created elsewhere.
0:05:59 That there isn’t a lot of organic value creation.
0:06:04 Not a lot of, most of the entrepreneurs are starting businesses to serve money made elsewhere.
0:06:05 They’re starting a restaurant.
0:06:07 They’re starting a wealth management company.
0:06:08 They’re starting a hotel.
0:06:11 There’s very little, I think, of a tech scene here.
0:06:12 I mean, a little bit.
0:06:13 A little bit of payments.
0:06:20 But it’s just not that same risk-taking infrastructure, whatever you might want to call it.
0:06:23 By far, the worst thing about it here, oh my God, the weather.
0:06:25 Jesus fucking Christ.
0:06:27 It’s cloudy and gray and 52 degrees.
0:06:28 Whoa.
0:06:31 Good news is it’ll be like that for the next, I don’t know, seven years.
0:06:32 Oh my God.
0:06:35 It is just, I don’t really, I didn’t realize.
0:06:38 I’m going to be, I’m absolutely going to retire to like Arizona or something.
0:06:38 Not true.
0:06:39 Retiring to Aspen.
0:06:40 Retiring to Aspen.
0:06:44 Because the sun, at least for me, I have that disorder, seasonal disorder.
0:06:45 I don’t know.
0:06:46 Is that really a disorder?
0:06:47 Wanting to have sun all the time?
0:06:50 But oh my gosh, I just can’t handle it.
0:06:51 I just cannot handle it.
0:06:53 We’ve been here two and a half years.
0:06:54 Oh, I forgot.
0:06:54 Actually, you know what?
0:06:55 Best thing.
0:06:59 The best thing about the UK is the schooling system.
0:07:01 The schools are great here.
0:07:05 My two boys are so happy, thriving, doing great in school.
0:07:07 Oh, another free gift would purchase.
0:07:12 I don’t have horror fantasies about waking up or getting up and turning on the TV and seeing
0:07:14 my kids school in the news because of a mass shooter.
0:07:15 You just really don’t have that here.
0:07:16 Why?
0:07:17 Because they’re fairly reasonable people.
0:07:22 Anyways, that’s my breakdown of the UK, the United Kingdom.
0:07:28 I would say to anyone who has the pleasure or the luxury or is fortunate enough to ever live
0:07:30 abroad, I absolutely think you should.
0:07:32 I could not do better than my life in the U.S.
0:07:34 I will not do better than my life in the U.S.
0:07:34 I love it there.
0:07:35 I am very American.
0:07:37 I didn’t realize how American I was, so I left.
0:07:39 But you don’t want to do better.
0:07:40 What you want to do is different.
0:07:44 And if you have the resources or the opportunity to live abroad, you should.
0:07:46 And I think there’s kind of two times when you figure it out.
0:07:47 One, when you’re young.
0:07:49 Because when you’re young, you can dance between the raindrops.
0:07:52 You can just go out, have a pint, meet friends.
0:07:53 You don’t have to live in a nice place.
0:07:55 You’re more flexible.
0:07:57 If it’s not great for your career, you can recover.
0:07:59 Or, quite frankly, when you have a lot of money.
0:08:01 And I know that sounds douchey.
0:08:02 Oh, we should all be able to move to Europe.
0:08:03 Yeah, but you can’t.
0:08:06 The reason I moved to Europe, people say, oh, you wanted to get out of the U.S.
0:08:07 because of Trump.
0:08:07 No, not at all.
0:08:11 I’m here because of the U.S., not because I wanted to leave.
0:08:13 I’m here due to the prosperity I recognize in the U.S.
0:08:17 And the reality is, in a city like London or living in Europe, especially with a family or moving,
0:08:20 you just need to lubricate it with a lot of money.
0:08:23 It’s probably true if you want to live in New York or San Francisco or L.A.
0:08:28 But still, the reason I’m in Europe is because America let me.
0:08:30 All right, moving on.
0:08:34 In today’s episode, we speak with Ezra Klein, the New York Times columnist and host of The Ezra Klein Show,
0:08:38 and Derek Thompson, Atlantic staff writer, author, and host of The Plain English Podcast.
0:08:44 We discuss with Ezra and Derek their new book, Abundance, which is all about how America learned to fail at abundance
0:08:48 and how the left can fix it by embracing growth, progress, and the messy tradeoffs of governing.
0:08:50 So I did enjoy this conversation.
0:08:53 I mean, something that plagues the United States.
0:08:54 It’s interesting.
0:08:59 Derek and Ezra would say that the left suffers from sort of the bureaucratic state,
0:09:04 you know, 12 times as much to build a mile of subway in New York versus Paris,
0:09:05 which isn’t known for its efficiency.
0:09:09 We spent all this money on charging stations and none of them happened.
0:09:13 I don’t know if that’s something that just plagues the left, quite frankly.
0:09:19 Although what’s interesting is that kind of these Republican-run cities just seem to be better run right now
0:09:20 than democratically-run cities.
0:09:22 But anyways, that is what it is.
0:09:24 I enjoyed it.
0:09:26 They’re both really fascinating guys.
0:09:27 Derek’s at The Atlantic.
0:09:29 Ezra is at The New York Times.
0:09:31 They’re both just super thoughtful guys.
0:09:33 And also, they seem like nice guys.
0:09:35 And I’m glad they’re doing so well.
0:09:37 And I enjoyed having them on the pod, as will you.
0:09:41 So with that, here’s our conversation with Ezra Klein and Derek Thompson.
0:09:47 All right, let’s bust right into it.
0:09:48 Gentlemen, where does this podcast find you?
0:09:49 Ezra, where are you?
0:09:50 I am in New York.
0:09:52 You’re in New York.
0:09:52 And Derek?
0:09:55 I am in Chapel Hill, North Carolina.
0:09:56 Nice.
0:09:57 We were just talking about it.
0:09:59 I’m doing a college show with my son.
0:10:01 And he’s decided that he’s interested in UNC.
0:10:01 And I asked him why.
0:10:02 And he said, because of the logo.
0:10:06 And I thought, well, that’s absolutely the right reason to pick a university.
0:10:13 Your new book, Abundance, is about where America, liberalism, and the Democratic Party went wrong over the last few decades.
0:10:17 You argue that right-wing populism thrives on scarcity.
0:10:20 And the answer is abundance.
0:10:21 Let’s start there.
0:10:23 What does that abundance look like?
0:10:24 I’ll start with you, Derek.
0:10:31 I think abundance is a positive vision of the future that liberals can build if we get out of our own way.
0:10:34 And I think it starts first with actually having a goal.
0:10:37 This book is about politics, and it’s about policy.
0:10:48 But it opens actually with a sci-fi vignette of what the world of 2050 could look like if we get everything right in housing, in energy, in science, in technology, in governance.
0:10:50 But these are different markets.
0:10:51 And different markets have different problems.
0:10:53 And they have different bottlenecks.
0:10:58 And so part two, after you have a goal of where you want to go, is understanding what industries you’re actually working in.
0:11:14 And a lot of this book is looking back over the last 50 years at how housing policy went wrong, often in blue cities, and how we failed to build clean energy in this country, even when liberal cities and liberal governors tend to say that they want to build clean energy to help climate change.
0:11:24 And then finally, I think that abundance requires us identifying the bottlenecks that are in our way and the policies that we don’t have yet that could improve our outcomes.
0:11:35 So, for example, I think it’s pretty remarkable that when you think about how important science and technology are to improving people’s health and improving people’s lives, this country doesn’t have a national invention agenda.
0:11:47 So, you might expect that Elon Musk, now that he’s associated himself with the MAGA movement, would inscribe a kind of wise techno-optimist idea within that party.
0:11:47 He hasn’t.
0:11:49 He has no vision of what America can be.
0:11:52 He has a vision of what he wants to tear down.
0:12:03 And so, we believe very strongly in having a positive vision for the future, understanding the world and where we’ve gone wrong, and then finally, in resolving the bottlenecks to actually build that future.
0:12:05 Ezra, any additional color there?
0:12:15 I mean, I’ll give our one sentence, which is that the thesis of abundance is that to have the future we want, we need to build and invent more of what we need.
0:12:19 Okay, so, abundance is a really nice word.
0:12:21 Tell me on the ground what that means.
0:12:22 Let’s talk about energy.
0:12:23 Does that mean drill, baby, drill?
0:12:27 Like, how does this notion of abundance impact our energy policy?
0:12:38 So, I often get this question of, if you think we’ve gone wrong in so many places, if you think the government has hindered so much construction, so much innovation, why are you not just a conservative?
0:12:40 Don’t we already have a Republican Party?
0:12:50 The world you are trying to achieve matters, when there’s actually a huge disagreement I have with things like Doge, which is efficiency towards what?
0:12:54 I hear all these tech-right people tell me that they’re readying the government for AI.
0:12:57 And I’m like, okay, AI that does what?
0:12:59 What is its value function?
0:13:00 What is its prompt?
0:13:01 What are you unleashing it on?
0:13:02 You have to know what you’re trying to build.
0:13:09 And the, I think two of the core tributaries of the book are housing and decarbonization.
0:13:19 We are very, very worried about the absence of sufficient housing in the big, particularly the cities, although not only, that drive the American economy.
0:13:23 And we’re simply not going to meet decarbonization goals.
0:13:25 I mean, we’re probably at this point not going to meet them anyway.
0:13:36 But you’re not going to meet decarbonization goals if you can’t build solar, wind, battery manufacturing facilities, and other things at a much, much, much faster pace than we’ve seen so far.
0:13:43 And that are frankly possible under the way liberal governments, including national and democratic governments, tend to create the rules for construction.
0:13:48 So, yeah, our theory is not just more of everything.
0:13:52 I think we have a line in the book that it’s not an omnidirectional mournness.
0:13:54 You have to choose what you need more of.
0:14:00 Look, we’ve had also, as you know better than anybody, Scott, abundance of consumer goods for a long time.
0:14:12 And behind that abundance of consumer goods where, you know, 40 years ago, you could go to public college debt-free, but you couldn’t have a flat-screen television anchored on your wall in your house.
0:14:17 Now you probably can’t go to college, public college debt-free, and you can have a flat-screen television.
0:14:24 So we kind of constructed government and the global economy to make the things that fill a house cheap and the things that build a life expensive.
0:14:35 Child care, health care, education, housing, energy, and a set of other things that we think of as more of the building blocks of production and the building blocks of flourishing.
0:14:42 And so we, in the book, sort of run through these, not just at a policy level, but also at a more conceptual level, sort of one by one.
0:14:53 Housing, energy, state capacity, these structures that lead to invention, and then the structures and ways we turn that invention into actual technology that is produced in a way people can use.
0:15:07 You have to choose, and if there’s any one, I think, pathology we are pulling at inside the way liberals govern, and we’re both, you know, American liberals, it’s that we often don’t choose.
0:15:16 We lard things up with too many goals, too many standards, too many regulations, and we don’t take seriously that if you’re going to achieve anything, you need to focus on achieving that thing.
0:15:20 Again, anything done well is hard, and we pretend it’s easy and then act surprised when we fail.
0:15:26 So, Derek, I love the idea of abundance, but I’ll put forward a thesis and you respond.
0:15:29 We don’t suffer from a lack of abundance.
0:15:39 What we suffer from is this oligarchical zeitgeist where we’ve decided to optimize the U.S. for the top 1%.
0:15:43 And we don’t suffer from an increase in market capitalization and an increase in wealth.
0:16:01 What we suffer from is policies that essentially insert certain companies in between the consumer on some public goods, including health care, housing, prison system, where the objective or the metrics are shareholder value, not the public good.
0:16:04 The private company inserts themselves in the middle.
0:16:05 It does a great job.
0:16:13 Innovation applies to technology and then creates market power, raises the prices, and we end up with one in four households with children.
0:16:25 I mean, quite frankly, just to sound like a liberal, isn’t our problem not abundance, but quite frankly, that we are slowly but surely sequestering all the abundance to the 1%?
0:16:32 Sometimes I would say the answer to our problems is that the oligarchy is getting in the way of achieving our outcomes.
0:16:36 But let’s talk about housing for a second.
0:16:40 Why is it that California has the worst affordable housing crisis in the country?
0:16:47 Why is it that the five states with the highest rates of homelessness are all states that are governed by Democrats?
0:16:52 Is it because the oligarchy is stronger in democratic states?
0:17:10 Or is it because in place after place governed by Democrats, we have allowed habits and customs and rules and regulations to get in the way of what you and I and Ezra all want, which is more housing supply?
0:17:20 Right. Scott, your last great note for your last great newsletter was about housing being the most important topic for the 2028 election.
0:17:26 Right. We have seen the average age of first time homeowners go from 25 to 37 years old.
0:17:36 We now have a record high number of young people who say they cannot afford a home because the cost of housing as a share of average incomes has gone up and up and up.
0:17:45 Of course, I think sometimes the problems in housing have to do with incumbents, but sometimes the problems in housing have to do with us ourselves and the rules that we write.
0:17:54 So you look at a place like Portland, Oregon, in Portland, Oregon, every single mayor and every single governor that’s elected says housing is our priority.
0:18:03 But if you ask, can we build outside of the current lines that are drawn by the 1972 land use laws, they say, no, we can’t do that.
0:18:13 If you ask if you can build a new apartment building that blocks a view of Mount Rainier, they say, actually, our view of Mount Rainier is more important than the additional than additional new housing units.
0:18:21 So I do think that, of course, there are many situations where the most important problem to focus on is the problem of entrenched money.
0:18:34 But in many cases, for the issues that you and I care most about, which is housing supply and housing abundance, I think we need to take a good long look in the mirror and recognize something I think has gone wrong on our own side.
0:18:51 If the cities and the cities that have the worst housing crisis are also governed by liberals and also I would say the cost of escalating housing prices is not just seen in how much housing is eating up the budgets of people who live in these cities.
0:18:54 It’s also the people who are leaving these cities.
0:18:56 California is losing people.
0:18:58 New York State is losing people.
0:18:59 Illinois is losing people.
0:19:01 Minnesota is losing people.
0:19:12 Working class families, as Ezra just said in his beautifully done new video for The New York Times, working class families are leaving blue states and moving to states that are more likely to be governed by Republicans.
0:19:25 Of course, there are all sorts of indictments that we can make of the power of oligarchy in this country, and we can talk about the many ways that Elon Musk is turning government into some kind of kleptocratic mania.
0:19:34 But look, if we’re really trying to understand why is the housing crisis worse in blue states and blue cities, I think we need to look in the mirror as well.
0:19:43 Ezra, you talk about or you say in the book that for a future that’s pro-growth, pro-technology, and has pro-liberal values.
0:19:46 What does that actually look like in practice?
0:19:47 Give me more.
0:19:56 Well, let’s talk about, I mean, beyond just clearing out, going from NIMBY to YIMBY like they’ve done in Austin or in Minneapolis.
0:20:09 Give me an example beyond housing of how kind of a pro-technology, pro-growth, and pro-liberal values, how that actually impacts things on the ground.
0:20:19 I think you guys could have written your book just on housing because I think what you’re saying really resonates with people where we’ve turned it into an investment class and turned over housing permits to homeowners and took it out of the hands of bureaucrats.
0:20:22 And homeowners have an incentive to restrict the supply.
0:20:29 But give me another example in another sector of how you think kind of being pro-tech and pro-growth might change our current approach.
0:20:31 Yeah, let’s talk energy because I think energy is a useful one.
0:20:41 Imagine a world where it just turned out we never invented a form of energy that didn’t require burning fossil fuels, right?
0:20:42 We figured out natural gas.
0:20:44 We figured out oil and petroleum.
0:20:45 We figured out coal.
0:20:48 But we never invented the solar panel.
0:20:50 We never figured out what to do with a wind turbine.
0:20:53 Didn’t figure out hydropower or geothermal.
0:21:12 You would have this, I think, politically impossible problem, which is that the only way to do anything about greenhouse gas emissions would be to radically cut the living standards of functionally everybody who uses energy around the globe, right?
0:21:14 There just wouldn’t be another way around it.
0:21:16 You could try to make your burning of coal more efficient.
0:21:23 But if we did not keep moving the technological frontier forward, I mean, I grew up, I don’t know where you grew up, Scott, but I grew up outside L.A.
0:21:26 And when I grew up, you still had L.A. coated in smog.
0:21:30 You would still go in and you’d be like looking at this.
0:21:34 You’d think, is it cloudy or can I not breathe today?
0:21:35 Yeah, I remember, I grew up in L.A.
0:21:38 I remember coming home from school and your chest would hurt when you breathe in.
0:21:38 Yep.
0:21:43 And what’s crazy today, and it’s a way I think you know that the only future is not degrowth.
0:21:46 What’s crazy today is L.A. is richer.
0:21:47 It’s bigger.
0:21:48 And you can breathe the air.
0:21:50 And that happens in a lot of places.
0:21:53 I mean, London used to be unfathomably smoggy.
0:21:55 I mean, go back to any writing about the Industrial Revolution.
0:21:57 So, OK, so we didn’t end up in that world.
0:22:04 We ended up in a world where due to a series, by the way, of policies, right, government funding of research,
0:22:09 the German subsidies, particularly for solar, Chinese subsidies for the solar industry,
0:22:15 we ended up over the past 10, 15 years driving the price of solar down by 90 percent,
0:22:18 driving the price of wind down, I think it’s by 79 percent,
0:22:21 and the battery storage around by something comparable.
0:22:25 It is only because of that genuine set of technological miracles,
0:22:28 and I don’t use miracles here to mean just luck, right?
0:22:30 That was a huge amount of policy and human ingenuity.
0:22:37 Do we have any capacity to have a politics around climate change that is not just a politics of sacrifice,
0:22:40 because politics of sacrifice do not typically work,
0:22:46 and they have a terrible tendency to elect strong men from the authoritarian right.
0:22:49 You go to people and you say, we’re going to cut how much energy you have.
0:22:50 We’re going to ration your energy.
0:22:52 Nothing destabilizes a polity faster.
0:22:54 Think about the Yellow Vest riots in France.
0:22:57 Think about how Kamala Harris, in a time of high energy prices,
0:23:01 was running not on the climate investments of the Biden-Harris administration,
0:23:05 but on the oil and gas production increase of the Biden-Harris administration.
0:23:11 So one of the aims of the book is to repair what we think of as a dysfunctional relationship
0:23:14 that has emerged between liberals and technology.
0:23:18 There is a tendency to put technology, I think practically after 2016,
0:23:21 it’s run by a bunch of oligarchic billionaires.
0:23:25 There’s a ton of, certainly in the liberal mind, disinformation and propaganda on Facebook.
0:23:27 Liberals sort of turn on technology.
0:23:30 But there’s a lot you just can’t solve without technology,
0:23:35 and a lot about your politics that really change if you get the right technological advancements.
0:23:37 We’re saying we’re not using housing for this example,
0:23:42 but modular housing would do a lot to change the politics of housing if you could use them
0:23:45 in a lot of cities because you could do public housing much more cheaply,
0:23:48 and you could also do non-public housing much more cheaply.
0:23:56 Energy and continued advance in things like modular nuclear could really, really, really make possible a situation
0:24:03 where you could have countries like China and India continue to grow and continue to give people vastly better lives
0:24:05 while also cutting carbon emissions.
0:24:08 It could leapfrog the kind of development we went through.
0:24:10 It’s also true for healthcare.
0:24:15 So I spent a lot of my career as a reporter on healthcare policy,
0:24:19 and sort of my intention in that reporting is I care about universal healthcare policy.
0:24:21 I was all over Obamacare and the Affordable Care Act.
0:24:25 But how valuable having any kind of health insurance is,
0:24:27 how valuable having private health insurance is,
0:24:29 how valuable Medicare is, Medicaid is,
0:24:35 is dependent on what devices, treatments, surgeries, pharmaceuticals are there.
0:24:39 Medicare and Medicaid that cover Ozempic is more valuable than Medicare and Medicaid
0:24:42 that does not cover Ozempic or Wagovi or the other ones.
0:24:46 And if it didn’t exist, they would all be less valuable, right?
0:24:50 There are people with huge numbers right now of autoimmune conditions we don’t understand.
0:24:53 These insurance products would be a hell of a lot more valuable to people
0:24:56 if we knew how to cure those and the insurance could cover the cures.
0:25:00 So there is a lot you just can’t do if you don’t innovate.
0:25:02 If we don’t figure out green cement and jet fuel,
0:25:04 we’re not hitting our climate targets one way or the other.
0:25:11 So liberalism has to have a technological agenda in addition to a social insurance agenda.
0:25:15 And that means taking the mechanisms and institutions of technological progress
0:25:19 and then the distribution of the fruits of that technological progress seriously.
0:25:23 So, Derek, when we talk about energy policy,
0:25:25 just to steel man this,
0:25:32 that the very Republican state of Texas is now producing more wind energy than anyone,
0:25:34 and that economics ultimately wins out.
0:25:36 Or that’s a case study.
0:25:39 And ultimately, that creates less bureaucracy,
0:25:42 let the market decide, more wind energy,
0:25:43 lower cost of energy,
0:25:46 more tax revenue to reinvest in our schools.
0:25:50 Isn’t the conservative agenda more of an abundance agenda?
0:25:51 It’s interesting.
0:25:53 We’ve gotten a version of this question a few times.
0:25:54 I think it’s a really good question.
0:25:58 Certainly, Texas and Texas politicians do not have, as their North Star,
0:26:02 the idea that climate change is the most important policy in the world, right?
0:26:06 It is liberals and it’s progressives who have all of the backpack pins that say,
0:26:08 let’s ban oil and let’s fix climate change.
0:26:12 Nonetheless, as you point out, you can’t ignore the fact of outcomes.
0:26:15 It is Texas that is building the most renewable.
0:26:20 And it is often places like Georgia and Iowa, not run by Democrats,
0:26:25 but run often by Republicans who do not value climate change as a top-order priority,
0:26:27 that are building the most renewable energy.
0:26:30 And that speaks to the fact that in some cases,
0:26:36 if you allow a market to work without the interference of NIMBY politics,
0:26:42 you sometimes, ironically, end up with more progressive outcomes.
0:26:46 This is as true in energy as you could say it is in housing.
0:26:52 What stands in the way of housing in San Francisco, in Los Angeles, in Boston, in Portland,
0:26:55 is not demand to live there.
0:26:57 It’s constrictures on supply.
0:27:02 And in the same way, I think there are people in California and New York who want to build,
0:27:06 and Massachusetts, who want to build more solar and want to build more wind,
0:27:13 but they can’t do it because the political processes in these states have gotten so good
0:27:17 at the politics of blocking that they’ve prevented the politics of building,
0:27:21 even building things that are in liberals’ interests,
0:27:27 houses, solar, wind, geothermal, even, if you’re a certain kind of progressive, nuclear.
0:27:31 So I think you’ve put your finger on a really, really important tension
0:27:35 between the processes that liberals have and the outcomes that they want.
0:27:43 Why are our outcomes living in Texas if our priorities live in San Francisco?
0:27:49 That is an incredibly important question for the progressive movement to ask itself
0:27:54 if it wants to answer the question and actually build the things that we say we want to build.
0:27:56 We’ll be right back.
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0:30:39 Ezra, I see the epicenter of all the things you’re talking about or the perfect storm of bad things,
0:30:45 whether it’s an obsession with scarcity or the administrative state getting in the way of objectives
0:30:47 or kind of losing the plot.
0:30:50 I think the epicenter for everything you guys are talking about is my industry,
0:30:56 where you have, when the dean announces we’ve rejected 85% of applicants,
0:30:57 what do the faculty and the alumni do?
0:30:58 They stand up and they applaud.
0:31:04 I’m curious if you’ve thought about how this scarcity or non-abundance mindset
0:31:10 has infected higher education and what policy recommendations you guys would make
0:31:11 to address this problem.
0:31:13 I’ve thought about it a bit.
0:31:15 Higher ed is not a huge focus of the book.
0:31:19 But in some earlier, some Californian, and in some earlier work,
0:31:24 one of the things I think about in terms of what happened to the California of the past,
0:31:29 I don’t think there is a greater public achievement,
0:31:33 certainly not in education, in the world than the University of California system.
0:31:34 Oh, right on, my brother.
0:31:38 Literally, right the fuck on.
0:31:44 I am here because of the generosity of California taxpayers and the regents of UC.
0:31:45 Anyway, sorry, I was going to go ahead.
0:31:46 It’s an extraordinary…
0:31:47 I went to UC Santa Cruz.
0:31:47 I went to UCLA.
0:31:52 Right, like I am a full-on product of California public schools through California higher ed.
0:31:54 What was your tuition when you were going?
0:31:56 It was a long time ago.
0:31:59 I don’t remember it offhand.
0:32:01 I’m worried I’m going to give you the out-of-state.
0:32:02 Mine was $7,000.
0:32:06 I think mine was like, yeah, it was like $10,000, I believe.
0:32:10 Mine was $7,000 for all seven years of undergrad and grad.
0:32:13 Do you remember the admissions rate at UC when you applied?
0:32:14 No.
0:32:18 For me, at UCLA, it was 76% when I applied.
0:32:18 And I was one of the 24%.
0:32:19 Do you want to hear something?
0:32:22 So, UC had, when I was in…
0:32:24 I was a shit student.
0:32:26 I had a 2.2 when I graduated high school.
0:32:28 You had a lot of trouble paying attention.
0:32:32 UC had a thing then called eligibility.
0:32:35 And it was a sliding scale.
0:32:46 But if you got above a 3.3 or above a 1,400 on your SATs or something in between that sliding scale, you were guaranteed admission to Riverside or Santa Cruz.
0:32:52 No, by the time I went, UC, I wasn’t doing eligibility anymore because they were too blocked up.
0:32:53 I don’t know if any of them do it anymore.
0:32:56 But when I went, that’s how I got into Santa Cruz.
0:32:58 I qualified in on test scores.
0:33:13 But the thing is, like, in my lifetime and well before it, having built the most remarkable public university system the world has ever known, and, like, take nothing away from Cal State or the community colleges there, which are also great, they added exactly one UC campus Merced.
0:33:16 Fuck did we stop building UCs for?
0:33:18 Did California stop having people?
0:33:20 Did we stop needing great universities?
0:33:29 But I’ve, like, looked into this, and, I mean, one is, oh, my God, like, the fighting in the legislature over where to go and, you know, who gets it and whose ox gets gored.
0:33:35 And we just stopped building a bunch of different kinds of things.
0:33:38 We can’t build high-speed rail, but we also don’t build new UCs.
0:33:41 You know, we don’t build houses, but we also don’t build enough clean energy.
0:33:48 I think the other thing I would say, because I do agree with you, Scott, and have pretty intense views on this, I don’t know.
0:33:55 I have people I respect who will tell me, well, you know, if you double or triple the size of Harvard, it wouldn’t be Harvard anymore, and it would lose quality.
0:33:56 I don’t know that I buy that.
0:34:01 But you could sure as hell open these places up to a lot more innovation.
0:34:06 You could sure as hell do a lot of new things and put a lot of money into new institutions.
0:34:09 And I wonder about the fact that we don’t.
0:34:12 There was a good piece in The New Yorker recently by Adam Gopnik.
0:34:16 It’s not what we’re here to talk about, but here’s what we’re talking about, about the Gilded Age.
0:34:25 And he was making this point about how the robber barons were monsters in a million different ways.
0:34:27 They’re also remarkable in other ways.
0:34:32 But, man, did they leave behind cultural institutions and institutions of learning.
0:34:33 Vanderbilt’s a great university.
0:34:34 Really is.
0:34:36 What are they all doing today?
0:34:39 What are they all doing today?
0:34:41 And he was, like, making the point about museums and art.
0:34:46 I was in Pittsburgh for a family event recently.
0:34:49 And, man, the museums there are great.
0:34:58 We have, like, the federal government has stopped building, but also there’s nothing like the construction of cultural institutions that the rich did in that era.
0:35:12 The rich of this era are building their personal rocket companies and getting their yachts, but they’re not creating, like, new institutions of local or, for that matter, national value.
0:35:19 So there’s something, I think, about our institutional, our absence of institutional ambition.
0:35:27 Elon Musk sure has the ambition to destroy things that have been built in the public sector, but not to make new ones.
0:35:29 And you just kind of see this replicated.
0:35:43 There is, as we stop, the narrow version of this is that as we find that we cannot build rail at any acceptable cost point, we do a lot of less building of rail with tunnels in it because tunnels are expensive and they’re difficult to do.
0:35:47 In other countries, you do a lot more tunneling because they still believe they can build rail.
0:35:52 And when you believe you can build rail and actually finish it on time and on budget, you’ll do the hard versions of rail, which include tunnels.
0:35:55 And I think there’s something like that that is infected.
0:36:05 A lot of state governments, for that matter, the federal government, and a lot of societies wealthy where they just don’t really believe in building great new institutions.
0:36:31 I think it’s impossible to argue against the notion that we used to have these individuals of extraordinary talent that would practice full-body contact violence of capitalism and then became very civic-minded with the spoils of that full-body contact violence of competition.
0:36:34 It appears now we have the former and not the latter.
0:36:40 My fear, though, is that waiting on the better angels of these billionaires to show up is not a strategy.
0:36:47 And that I have now become – I’ve kind of just gone full Bernie Sanders and I’d like you both to respond to this.
0:36:51 And I believe that we just need a massive alternative minimum tax.
0:36:54 My tax rate for the last 10 years has been 17 percent.
0:36:58 I’m very transparent about – from my 30s and 40s, I was averaging over 30 percent.
0:37:01 Then I got very wealthy and my tax rate has been cut in half.
0:37:15 I mean, in order to make these sorts of big, bold investments in rail, in UC, and still have the money to pay for our defense department, Medicaid, Medicare, doesn’t it simply, quite frankly, just come down to restoring a progressive tax policy?
0:37:16 Derek, any thoughts?
0:37:18 Sure.
0:37:21 I’m absolutely a fan of restoring progressive tax policy in this country.
0:37:29 You know, we’re progressives in the American tradition, which means that we believe in big, muscular programs in the style of the New Deal.
0:37:31 We believe in Social Security.
0:37:32 We believe in Medicare and Medicaid.
0:37:45 We know that we’re going to continue to have to spend hundreds of billions of dollars on defense, not only to defend the country, but also to invest in military technology to keep Americans and countries that have American values safe.
0:37:48 But also, yes, institutions cost a lot of money.
0:37:53 Next-generation energy costs money to build, and sometimes it even costs money to subsidize, right?
0:37:59 Fusion technology does not exist right now, and getting it off the ground might be a very expensive enterprise.
0:38:03 The same with building high-speed rail across the country, if that’s what we want to do.
0:38:09 So absolutely, I believe that progressivism requires sufficient funding.
0:38:18 But I also think that an important part of this book, an important framework of abundance, subtly nudges the question toward the opposite side of the ledger,
0:38:33 which is how do we solve the problems that we have with supply, not the demand that comes from taxpayer money, which is important, but also the strategy that comes or the outcomes that come from expanding supply.
0:38:39 In a way, that’s the unspoken question that we’ve been circling around this whole conversation.
0:38:46 In housing, how do we solve the affordable housing crisis with supply, with not reducing a corporate income tax,
0:38:53 but actually reducing a building tax in the cities that have the highest demand for housing and where we have the highest rates of homelessness?
0:38:59 In energy, how do we make it easier to build not only oil and drilling and fracking for natural gas,
0:39:07 but also building the next generation of key energy technology and solar, wind, geothermal and beyond, even nuclear, even in science institutions?
0:39:13 The answer to your question, how do we deal with the fact that education and college costs in this country have gone through the roof
0:39:18 and it is prohibitively expensive now to afford four years of excellent elite college in this country?
0:39:21 Well, how do we solve that problem with supply?
0:39:27 How do we train our eyes on the fact that the UC system essentially stopped building new branches and new schools?
0:39:29 And in fact, it’s not just the UC system.
0:39:34 I mean, name an elite college that has been founded in the last 100 years.
0:39:39 I think two of the last ones that are in to the top 25 of any kind of U.S. News and World Report ranking
0:39:42 are things like Chicago and Stanford, which are over 100 years old.
0:39:46 It’s been a century that we’ve taken a time out from building the kind of institutions
0:39:52 that we used to spring up and pop up every five years in the last half of the 19th century.
0:39:57 And to Ezra’s point, I don’t think it’s a coincidence that the same time that we were inventing things left and right
0:40:03 and building houses and building roads and building canals and building telegraph wires in the late 19th century,
0:40:05 we were also building institutions.
0:40:12 And there was some strange thing in the air that even some of the most unethical people in this country
0:40:18 who did stuff like Rockefeller did to the trade industry of using his monopoly power
0:40:20 to essentially shut down companies and start riots,
0:40:23 nonetheless had a bone in his body that said,
0:40:28 I want to use my money to build something new that doesn’t exist yet.
0:40:32 Why doesn’t that bone exist in the bodies of billionaires today?
0:40:36 So I do think that on top of your very important point,
0:40:40 that a critical part of shoring up government finances in the next generation
0:40:42 is going to be having sufficient tax revenue,
0:40:45 and that sufficient tax revenue is going to be necessary to build a lot of the things
0:40:48 in the physical world, expensive things that we want to build.
0:40:50 I also want us to think about the question,
0:40:53 how do we solve this problem with supply?
0:40:57 And think about all the various stations and departments and corners
0:41:02 that that question can apply to even outside of the scope of our book,
0:41:06 which is, as we’ve said, focused so much on housing and energy and science.
0:41:10 I want to say these questions are not distinct from each other.
0:41:17 And I really want to say here, look, I will tax a rich to any level anybody wants to tax a rich.
0:41:25 I think the marginal value of those dollars, they’re just points on a board at a certain point,
0:41:27 and you should be taxing the shit out of them.
0:41:30 And we still got to use that tax money well.
0:41:39 And the reason California has not built, has absolutely failed to build high-speed rail is not tax dollars.
0:41:41 We tax plenty in California.
0:41:45 And China has a hell of a lot less in tax dollars per capita than we do,
0:41:51 and they’ve built 23,000 miles of high-speed rail in the time California has failed to build 500.
0:41:55 In New York City, in New York State, taxes here are high.
0:41:58 It’s a fairly high-tax jurisdiction, at least compared to other places.
0:42:06 The 2nd Avenue subway, highest cost per kilometer of rail ever recorded in human history.
0:42:14 There’s no amount of taxing we can do that is going to allow us to build a bunch of subway if it’s all going to cost like that.
0:42:17 And by the way, the next phases are projected to cost more.
0:42:19 We have to use taxpayer dollars well.
0:42:23 And the fact that rich people have too much money and we should tax more of it
0:42:27 doesn’t exempt us from the need to use taxpayer dollars well.
0:42:32 And I think this is a conceptual and political mistake Democrats and liberals make a lot.
0:42:34 Because taxing the rich is popular.
0:42:35 It’s great.
0:42:38 But the reason people don’t trust us on all kinds of things,
0:42:40 and something I try to keep telling people,
0:42:43 is like, yeah, Donald Trump won in 2024 on cost of living.
0:42:46 He won because people trusted him on inflation over Democrats.
0:42:50 But if you go look at exit polls in 2020, when people were tired of Donald Trump,
0:42:53 he was even with Joe Biden on the economy.
0:42:57 And if you go look at 2016, he was ahead of Hillary Clinton on the economy,
0:42:59 even as he lost the popular vote.
0:43:02 People do not trust Democrats on the economy.
0:43:04 They don’t trust Democrats to spend your money well.
0:43:07 And part of the reason is we often don’t spend people’s money well.
0:43:11 Now, Musk and Trump don’t give a shit about where money is being spent well and poorly.
0:43:15 They’re trying to gut the Social Security Administration, which spends money incredibly effectively.
0:43:17 Incredibly effectively.
0:43:18 They’re gutting the IRS.
0:43:22 And when you cut people at the IRS, they don’t audit rich people and you lose money, right?
0:43:24 They’re not trying to save money.
0:43:26 They’re not trying to make government more efficient.
0:43:32 But there is not an amount of money we can tax people where that is going to lead to the kind
0:43:35 of public infrastructure we want if we cannot build that public infrastructure.
0:43:38 AOC has a bill to do more public housing.
0:43:39 That’s great.
0:43:41 I want public housing to be palatial.
0:43:43 I want it everywhere.
0:43:48 But if we force public housing to operate under the rules that it currently does, which makes
0:43:50 it much more expensive to build public housing.
0:43:55 Brandon Johnson, the mayor of Chicago, just tweeted out trying to brag about this, that
0:43:59 they had spent, I think it was $1.1, what was it, $11 billion?
0:44:05 It was, I believe it was $11 billion on 10,000 affordable units coming out to $1.1 million.
0:44:06 Or yeah, maybe it’s $10,000.
0:44:11 So yeah, it was coming out to $1.1 million per affordable housing unit funded by the city.
0:44:15 We can’t be spending $1.1 million on affordable housing unit.
0:44:17 And the answer is not, we should tax rich people more.
0:44:22 Maybe we should, but everybody who’s getting taxed there deserves a better return on their
0:44:24 dollar than $1.1 million for this.
0:44:25 So yeah, tax rich people more.
0:44:27 Oligarchy is a big problem.
0:44:29 I’m very worried about oligarchy of attention.
0:44:33 We have most of the world’s attention being dominated on various social media platforms,
0:44:37 but like five guys who are all lined up next to each other at Donald Trump’s inauguration.
0:44:40 I’ve seen a bunch of people be like, well, what about political power?
0:44:41 Yeah, political power is a big problem.
0:44:45 But one way you get political power is you convince people you’re using their money well.
0:44:50 And to do that, you have to accept and admit that you’ve been using it badly and tell people
0:44:53 you got a plan to do it better in the future, or they don’t trust you.
0:44:55 And in a lot of cases, they don’t trust us now.
0:44:56 And they have a good reason for that.
0:45:01 I don’t want to spend too much time harping on the poor mayor of Chicago, whose approval
0:45:03 rating at this point is way below the Mendoza line.
0:45:09 But I think it’s really important to distinguish that form of liberalism from the kind of liberalism
0:45:10 we’re advancing in this book.
0:45:15 There’s a kind of checkbook liberalism that associates success with how much money you can
0:45:15 spend.
0:45:20 That’s a liberalism that brags about $11 billion spent on 10,000 affordable units.
0:45:24 There’s another kind of liberalism that brags not about how much you spend, but about how
0:45:25 much you build.
0:45:31 And that’s the kind of liberalism that would say, look how easy it was for us to build 10,000
0:45:32 affordable units.
0:45:33 Forget the price tag.
0:45:35 Look how quickly we did it.
0:45:37 And look at the people who are now living there.
0:45:43 That’s an outcome-based liberalism that I think is very different from the kind of progressivism
0:45:46 that has become a habit on the left in the last few years.
0:45:49 Yeah, look how awesome are high-speed rails in California.
0:45:50 Don’t you want that, Texas?
0:45:51 Yeah.
0:45:57 Well, even just, you know, manufactured homes cost 30 to 50 percent less that are dropped
0:45:59 on a piece of land as opposed to building on site.
0:46:03 I think at some point in this longer conversation, we’ve got to talk about unions.
0:46:08 If we’re going to talk about inefficiency, but while I have you here, I would be remiss not
0:46:11 to ask you guys to find, because I think you’ve done, both have done really good podcasts on
0:46:12 this.
0:46:17 It strikes me, and this is a bit of a softball amongst three progressives, that the exact
0:46:23 opposite, the antichrist to an abundance culture are tariffs.
0:46:31 Can you give me any sense for the rationale or any color you want to add on the current obsession
0:46:34 with tariffs across the current administration?
0:46:35 Derek, I’ll let you go first.
0:46:38 I think Donald Trump is a scarcity candidate.
0:46:44 I think his political success was created by a sense of scarcity, a sense that America wasn’t
0:46:48 growing fast enough, a sense that people couldn’t afford what they wanted to afford, whether it
0:46:50 was groceries or housing.
0:46:54 What we’ve seen the first few weeks of the Donald Trump administration is that he’s using
0:46:58 America’s existing shortages to demand more deprivations.
0:47:04 He’s saying Americans don’t have enough housing, and therefore we need fewer immigrants.
0:47:10 America doesn’t have enough manufacturing, and therefore we need higher tariffs, which are
0:47:11 essentially a tax on imports.
0:47:12 Right.
0:47:17 America doesn’t have enough science that we think answers the kind of questions that we want,
0:47:20 and therefore we’re going to gut scientific institutions entirely.
0:47:26 I think that’s an approach to politics that essentially says we solve our problems of scarcity
0:47:27 with just more scarcity.
0:47:29 And we’re asking for the exact opposite.
0:47:30 We’re asking for abundance.
0:47:35 We’re saying, yes, there is an affordable housing crisis in this country, and especially
0:47:37 in the cities that people want to live.
0:47:40 Let’s get out of our way and solve this problem with supply.
0:47:46 Yes, we agree with Secretary of Treasury Besson’s plan to increase total American energy production.
0:47:52 Let’s not hamper our ability to build solar, wind, and geothermal, which are certainly the
0:47:54 energy technologies of the future.
0:47:56 Let’s get out of our way and make it easier to build those things as well.
0:48:02 And so I think tariffs are just a perfect, just quintessential example of the way that Donald
0:48:06 Trump looks at the problems of American society today, looks at the shortages and the scarcities
0:48:10 and deprivations that we have, and layers more scarcity on top of it.
0:48:11 That’s his instinct.
0:48:17 And in a way, maybe I’m even giving him and his political habits even too much credit by
0:48:19 assigning them any kind of ideological character.
0:48:22 I do think that personality explains everything that Donald Trump wants to do.
0:48:26 He’s someone who likes to make big pronouncements, make people feel like they’re less than,
0:48:28 get on the phone, work out a deal.
0:48:33 And so he likes a world where he threatens tariffs against the entire world and takes phone call
0:48:37 after phone call after phone call from individual world leaders to work out little deals between
0:48:41 him and that leader to get something for himself and the people who support him.
0:48:48 This is not, in any capacity, a strategy to make more for Americans who want more.
0:48:51 This is not a strategy that’s going to do anything for housing, certainly.
0:48:54 I mean, the National Association of Homebuilders, I don’t know if you saw this when you were putting
0:48:55 together your newsletter.
0:48:59 The National Association of Homebuilders came out with a message after the tariff announcement
0:49:01 that said, this is going to be a catastrophe.
0:49:06 Our inputs include lumber from Canada and drywall material from Mexico.
0:49:10 And now we’re going to increase the taxes on those inputs by 25 percent.
0:49:15 This is a president who understood his mandate, which was all about unaffordability in this
0:49:19 country, to immediately raise the two key inputs of housing by 25 percent.
0:49:21 It’s complete effing madness.
0:49:29 Thinking about solving your problems by expanding supply is so much more rational than whatever
0:49:31 nonsense we’re getting from the government right now.
0:49:35 Can I read y’all J.D. Vance’s tweet that I’ve been really looking for an opportunity
0:49:37 to tee off on, but now maybe I have it?
0:49:39 J.D. Vance tweets.
0:49:40 This was yesterday.
0:49:42 We’re speaking on March 11th.
0:49:45 President Trump’s economic policies are simple.
0:49:49 If you invest in and create jobs in America, you’ll be rewarded.
0:49:51 We’ll lower regulations and reduce taxes.
0:49:56 But if you build outside of the United States, you’re on your own.
0:50:08 Okay, so this toy model of the economy they have is such lunacy.
0:50:16 What if you’re a restaurant and you’ve built your restaurant in the United States and you
0:50:24 employ people locally to cook your food and serve your customers and clean your dishes?
0:50:32 But like most restaurants, some percentage of the fruit and produce that you use is imported
0:50:33 from Mexico.
0:50:40 So here you are investing locally, creating American jobs, and you are not having your
0:50:42 taxes cut and your regulations cut.
0:50:47 You just had a large tax put on one of your main inputs, which is food.
0:50:50 What if I happen to just like, you know, be in the kind of waiting room place?
0:50:54 And I don’t know why I opened up Wine Spectator, because I don’t actually like wine.
0:51:01 But it had an alarmed editorial in Wine Spectator about how American wineries, their biggest
0:51:03 export market is Canada.
0:51:06 And so here are these wineries.
0:51:07 They are growing their grapes in America.
0:51:11 They employ people in America to pick their grapes and make their wine and bottle their
0:51:12 wine and et cetera.
0:51:17 But because they want to sell to Canadians and Donald Trump is starting a trade war with
0:51:20 Canada, they are getting a big price and being made less competitive.
0:51:21 What if you’re a machine?
0:51:29 What if you’re a—you make advanced machinery and a bunch of the input materials and intermediate
0:51:34 materials you need are sourced in from Europe or from Japan, but you do the assembly of making
0:51:36 this highly value-added product here?
0:51:37 Like, are they helping you out?
0:51:38 No, they’re not.
0:51:42 Because one—like, at the core of their politics is suspicion of the rest of the world.
0:51:44 It is suspicion of immigrants.
0:51:46 It is suspicion of other nations.
0:51:50 It is suspicion that trade can ever be positive sum.
0:51:53 That cooperation is something we should actually do.
0:51:57 That you are made stronger by having beneficial interactions with each other.
0:52:01 In the way that Derek said a minute ago that a lot with Donald Trump comes down to personality,
0:52:05 there are people like J.D. Vance around him trying to theory wash his intuitions.
0:52:10 But what Trump fundamentally doesn’t understand is as much interpersonal as it is economic.
0:52:13 He’s not a person who believes in cooperation.
0:52:14 He’s a person who believes in dominance.
0:52:18 And he wants to run everything that way, too.
0:52:21 And so he wants to dominate these other countries and close our border.
0:52:29 Because at the absolute guttural level, he thinks you’re either winning or losing in every single interaction.
0:52:33 And that is not the way the economy works.
0:52:37 This is not the year 1210 A.D.
0:52:39 Like, this is 2025.
0:52:42 We have a complex global economy.
0:52:50 And we are on the forefront of it, racing ahead of Europe in productivity, watching China fall behind where we thought they would be five years ago.
0:52:58 Because we’ve been – we’ve had plenty of failures along the way and plenty of people we didn’t help out and plenty of things we didn’t protect or invest enough in.
0:53:12 But their tariffs, their immigration policy, and their whole general attitude and mental architecture that informs what they do doesn’t actually make sense even when they try to explain it.
0:53:15 Which is why I was doing a podcast on tariffs the other day.
0:53:16 It was the day after Donald Trump’s big speech.
0:53:24 During the podcast, they kept exempting things from their tariff policy while I was trying to explain their tariff policy.
0:53:29 Trump was at the speech the night before saying he had talked to the heads of the big three automakers, and they were all thrilled.
0:53:34 And I’m literally talking about this in the podcast, and my producer’s like, oh, they just exempted auto goods.
0:53:42 And then later in the show, I’m talking about, wasn’t it Trump who did the USMCA trade deal, the US-Mexico-Canada trade deal in his first term, said it was an amazing trade deal?
0:53:45 Now, the first thing he’s doing is tariffs on Canada and Mexico.
0:53:47 Like, what happened to his great trade deal?
0:53:50 A couple hours later, they’re at least delaying tariffs on USMCA goods.
0:53:53 They haven’t thought about this.
0:53:55 They haven’t thought about the knock-on effects.
0:53:57 They don’t have a model of the economy that makes sense.
0:54:03 Stephen Moran, the head of the CEA, his paper, which people are looking at as a holy grail of what all this actually means.
0:54:08 He talks about a narrow path in this dense 41-page paper about how maybe all this goes perfectly.
0:54:14 And his whole theory is that you work with other countries in a way that they don’t put retaliatory tariffs back on you.
0:54:18 If they do put retaliatory tariffs back on you, then his whole theory collapses.
0:54:19 It’s already happening.
0:54:20 We’re already off the narrow path.
0:54:22 They have not thought about this shit.
0:54:24 They’re just breaking things.
0:54:28 We’ll be right back.
0:55:08 Today Explained, Sean Ramos from here with Nadira Goff, staff writer at Slate.
0:55:10 Nadira, Disney’s got a new movie coming out this week.
0:55:12 Is everyone enchanted?
0:55:13 No.
0:55:20 I think that there is a lot of confusion and a lot of controversy around Snow White.
0:55:22 Magic mirror on the wall.
0:55:25 Who is the fairest of them all?
0:55:29 But yeah, it’s safe to say that not everyone is enchanted.
0:55:31 This was my father’s kingdom.
0:55:33 A place of fairness.
0:55:37 But the queen changed everything.
0:55:42 Now I have to ask, as a student of the Brothers Grimm, how many controversies are there?
0:55:44 Well, you’re in luck.
0:55:49 You’re so lucky today is your lucky day because there happens to be about seven.
0:55:50 Oh my goodness.
0:55:54 It’s a human.
0:55:55 What did you think I was?
0:55:55 Nothing.
0:55:56 Ghost.
0:56:00 Snow White and the seven controversies on Today Explained.
0:56:01 Come have some fun with us.
0:56:02 You deserve it.
0:56:10 So we want to introduce you to another show from our network and your next favorite money podcast for ours, of course.
0:56:16 Net Worth and Chill host Vivian Tu is a former Wall Street trader turned finance expert and entrepreneur.
0:56:21 She shares common financial struggles and gives actionable tips and advice on how to make the most of your money.
0:56:28 Past guests include Nicole Yoder, a leading fertility doctor who breaks down the complex world of reproductive medicine and the financial costs of those treatments.
0:56:34 And divorce attorney Jackie Combs, who talks about love and divorce and why everyone should have a prenup.
0:56:37 Episodes of Net Worth and Chill are released every Wednesday.
0:56:41 Listen wherever you get your podcasts or watch full episodes on YouTube.
0:56:42 By the way, I absolutely love Vivian Tu.
0:56:44 I think she does a great job.
0:56:55 We’re back with more from Ezra Klein and Derek Thompson.
0:56:58 While I have you, you’re both great communicators.
0:56:59 You’re both strategists.
0:57:00 You understand positioning.
0:57:01 You understand messaging.
0:57:03 What thoughts do you have?
0:57:06 So as a progressive, I found that I was sort of flat-footed and just overwhelmed.
0:57:17 Just sort of, they’re flooding the zone with things that are meant to, I think, distract us, enrage us, male versus female, gulf of cheaper eggs, DEI causing helicopter crashes.
0:57:24 Because I don’t think they want us focused on the fact that they’re about to increase the deficit by $800 billion a year to give guys like me a tax cut.
0:57:27 That we’re surrendering to a murderous autocrat.
0:57:33 I think they’re saying, look over here because they don’t want to focus on the important things that are just sort of indefensible.
0:57:38 I’m curious what advice, and this has probably already happened, and Derek, I’ll let you go first.
0:57:43 Democratic Party calls and says, okay, we really got to figure out our messaging and our strategy here.
0:57:52 And assuming that people understand that some of these policies are probably just economically ruinous, I don’t even think it’s the tariffs are the most damaging thing.
0:57:54 I think it’s our inconsistency.
0:57:57 You want to see what he’s going to do around tariffs or economic policy.
0:57:58 Look at who I had lunch with last.
0:58:08 And you can’t have a consistent – when no country knows who they’re waking up next to, they’re remiss to do anything with you.
0:58:10 It’s like, well, he could call this off tomorrow.
0:58:14 That’s just no way to operate an economy, much less a country.
0:58:25 What advice would you have for Democrats and the DNC who say are of like mind and think, yeah, we need to take – reusurp government and constitutional authority.
0:58:26 This economic plan is disastrous.
0:58:35 What strategy – you’re in the war room with James Carvell right now advising 2026 congressional candidates and then 2028.
0:58:38 What strategies do you think we need to deploy, Derek?
0:58:40 I think we lost two games in 2024.
0:58:44 I think we lost a substantive game with affordability.
0:58:46 And I think we lost an attention game.
0:58:49 This is definitely something that Ezra can speak to.
0:58:54 I would tell Democrats, remember why we lost the 2024 election.
0:58:59 It was because a plurality of Americans said that they couldn’t afford the life that they wanted.
0:59:01 They couldn’t afford the good life.
0:59:08 And Democrats should be absolutely laser-focused on how to provide the good life for Americans.
0:59:13 And that means pointing out all of the lurid ways that Donald Trump is getting in the way.
0:59:21 I mean, raising tariffs while trying to build a manufacturing base is one of the craziest things I’ve ever heard.
0:59:30 I mean, the worst thing you can possibly do when you’re building a manufacturing base in any country is to make it impossible for domestic manufacturers to sell overseas.
0:59:41 The first thing you want to do if building an industrial base – this is what South Korea did, it’s what Taiwan did – is find a way to make it easier for your domestic companies to sell overseas.
0:59:47 Not to get every overseas buyer to hate you so much that they retaliate their tariffs up to 50%.
0:59:50 So the first thing that I would say is remember why we lost.
0:59:52 We lost because of affordability.
0:59:54 How do we focus on affordability?
0:59:57 How do we give people a set of new answers on affordability?
0:59:59 And frankly, I think our book does that.
1:00:03 It does that by shifting attention toward how do we solve these problems with supply.
1:00:09 And especially how do we solve the mother of all affordability problems, which is housing with supply.
1:00:16 In many cases, the good news here is that Donald Trump, for all of his authoritarian power, does not control housing policy in San Francisco.
1:00:19 He does not control housing policy in Boston.
1:00:21 He does not control housing policy in Los Angeles.
1:00:28 It is those cities run by those citizens and the people that they elect who control housing policy there,
1:00:32 which means that they have the ability to answer problems no matter what Donald Trump does.
1:00:34 Focus on affordability.
1:00:39 The second big mistake that I think the Democrats made in 2024 and in the previous few years,
1:00:45 is I think that we’ve become afraid of talking to people who disagree with us.
1:00:50 There’s been a kind of purity culture that has come up on the left.
1:00:52 And sometimes you could argue it came up for good reason.
1:00:59 Democrats were fighting for causes that they found incredibly worthy and they didn’t want those causes contaminated by voices that they disagreed with.
1:01:12 But as a result, I think it’s created an insular character on the left that doesn’t feel like it is extending an arm for people in the center who agree with some of what we support, but not everything that we support.
1:01:18 So I want to, from a substantive standpoint, absolutely focus like a laser on the issue of affordability.
1:01:24 Not only because it’s the number one reason why we just lost, but because I think it’s going to be the number one cause of the 2020s.
1:01:32 And then number two, I want us to have a different attitude toward reaching out to people who might disagree with us about things that even we find incredibly important.
1:01:42 I want us to be less embarrassed and less shy about talking to the center because ultimately it’s not just about building a coalition that’s 48% plus one.
1:02:00 Ultimately, what we want, I think, is to redefine what the Cambridge historian Gary Gerstle calls a political order, a set of political and economic rules that doesn’t just win two and four year elections, but actually can last for decades the same way that the New Deal order lasted for decades.
1:02:06 And to do that, you have to reach way beyond the 48% that’s automatically going to vote for you in every quadrennial election.
1:02:09 You have to reach out to the 55% and the 60%.
1:02:13 And that requires not just a different kind of substantive focus.
1:02:15 I think it requires a different theory of how to communicate.
1:02:17 I think that’s pretty damn good.
1:02:20 I’ll add very little to it.
1:02:21 Two things.
1:02:26 One is that you have to take seriously that people don’t like you.
1:02:29 You have to take seriously that the Democratic Party brand is trash.
1:02:30 I mean, just look at it in the polling.
1:02:33 It’s less popular than Donald Trump himself.
1:02:36 And Donald Trump is not a popular person or candidate.
1:02:42 So one thing you’re going to have to do is deal with the fact that you’ve lost people’s faith.
1:02:47 And the only way to gain it back is to show in some way or another that you’ve changed, in some way or another that you’ve rethought something.
1:03:05 And that gets to the second, which is that the Democratic Party has become, over time, too internally coalitional, too afraid of giving offense, too afraid of disappointing any members of its coalition, its interest groups.
1:03:10 Donald Trump, if he’s proven anything, it’s that you can reshape what a party is about.
1:03:12 Now, he’s done it autocratically.
1:03:28 But over time, Donald Trump has substantially changed what the Republican Party is on trade, on immigration, on Russia, on Ukraine, on national security, on whether it is important for your leaders to lead a decent Christian life.
1:03:42 Or whether you want, like, the god of the pagans, Elon Musk, with his, as somebody put it, 13-ish children, to be your standard bearer, alongside Donald Trump with his, you know, three marriages, et cetera, and endless sexual harassment cases, lawsuits, reports.
1:03:45 So you can change what you are.
1:03:56 When what you are currently, in the case of the Democratic Party, is a party that says it’s of the working class and is losing working class voters, whether now defined by income or education, then you have to change, right?
1:03:57 Or you are not the thing you think you are.
1:04:00 And I think Democrats need to change.
1:04:09 And that means, in public, saying how the next generation of them is going to be different, and what they have rethought, and what they are not going to do the same next time as this time.
1:04:11 You are going to need resistance.
1:04:16 If I was in the room with James Carville, I could not disagree with more of the James, who I have tremendous respect for.
1:04:24 The Democrats should, as he put it in The Times, play dead and wait for the Trump administration to collapse of its own weight.
1:04:25 I don’t think that works.
1:04:26 I don’t think it’s leadership.
1:04:31 But they do need, in addition to being a resistance, to be an alternative.
1:04:34 And they need to admit the places where they failed as an alternative.
1:04:40 And then the next standard bearer, the people competing to be the next standard bearer, need to show how they’ll be different.
1:04:59 Like, that shows that if you vote for us at this time, you’re getting something that you’re going to like better, or at least it’s going to be different than what you got last time.
1:05:02 There is attentional energy and controversy.
1:05:04 Democrats have been too afraid of it.
1:05:06 I want to propose a thesis.
1:05:07 I have two questions, and I’ll let you guys go.
1:05:08 I’ve been generous with your time.
1:05:14 I think that we oftentimes get focused on, we study to the wrong test.
1:05:17 And I’m trying to think, what is the goal?
1:05:18 What is the mission?
1:05:20 AI, GDP, productivity.
1:05:22 I think it’s all it means to the ends.
1:05:28 But the ends are creating an operating system, a platform, an economy that enables people to have deep and meaningful relationships.
1:05:32 And the three of us, I believe, all have partners and are raising children.
1:05:40 And much to my surprise, I have found that that has given me purpose and a sense of being and a sense of satisfaction that I didn’t anticipate.
1:05:41 I wasn’t planning to have children.
1:05:51 For me, the unifying theory of everything, it should be we reverse engineer all of our public policy and economic decisions to one thing.
1:06:06 And that is people, 18 to 40, should have the opportunities to meet each other, mandatory national service, more freshman classes, more third places, quite frankly, more alcohol, such that they can tax remote works.
1:06:20 One in three relationships begin at work, such that we have more people, quite frankly, having more sex, falling in love, and then have the economic wherewithal to have children.
1:06:33 Universal child tax credit, pre-K, minimum wage of $25 an hour, quite frankly, just stuff more money in their pockets, such that we go back to where we were 40 years ago, where 60% of 30-year-olds have a kid versus 27% now.
1:06:35 I don’t think it’s because people don’t like kids.
1:06:36 I think it’s because they can’t afford them.
1:06:48 But the unifying theory of everything is that any able-bodied American should at least have a reasonable chance that they will have the opportunity to meet somebody and the economic viability to have a family.
1:06:59 And that everything should be reverse-engineered towards that opportunity for young people, that that’s the unifying theory of everything and should drive all of our economic and social policies.
1:07:00 Your thoughts?
1:07:15 I wrote a cover story for The Atlantic called The Anti-Social Century, where I said that maybe the most important social problem facing this country is that Americans spend a record amount of time alone and a record low amount of time in physical face-to-face contact.
1:07:22 And as I’ve continued to report out this story, one of the more interesting parts of it actually relates incredibly deeply to housing.
1:07:37 If you take a look at sort of the life cycle of American aloneness, teens have fewer friends, teens hang out with their friends less, 20-somethings date less, and then 30-somethings are less likely to get married, 40-somethings less likely now to have children.
1:07:47 There’s a kind of life cycle effect of this drawing back from interpersonal relationships, which, Scott, I’m hearing you say is absolutely core to your vision of the good life.
1:08:00 I personally don’t think that it is a political agenda’s job to define and inscribe the good life explicitly into people’s lives.
1:08:09 I think it’s the job of a political agenda to build a platform, a stage, upon which people can make free choices that make them happy.
1:08:17 And the most important part of that platform and stage that I think many young people today are missing is affordable housing.
1:08:26 If you look at the share of young people who still live with their parents in their 20s and even early 30s, it’s higher than it’s ever been outside of a recession.
1:08:35 It’s very, very hard to go on a successful date and get married when you’re still living with your parents in your 20s and 30s.
1:08:44 And the reason that people are living with their parents in their 20s and 30s is not because they don’t have the courage that people in the 1980s have or don’t have the gumption that people in the 1990s have.
1:08:51 It’s they don’t have the money that they need often to afford a place of their own in the cities where they want to live.
1:09:01 And a part of abundance, I think that every great political movement has in America been a kind of redefinition of freedom.
1:09:02 Right.
1:09:07 The New Deal order was about defining the four freedoms of speech and belief from want, from fear.
1:09:20 And in the 1980s, Ronald Reagan created a new political order in this country that some call neoliberalism, which redefined freedom, not freedom of, but freedom from freedom from government.
1:09:24 In a way, I think abundance is another redefinition of freedom.
1:09:36 And at the heart of that freedom is the freedom to live where you want to live, because we have a rational housing market in this country that makes it affordable to have a place of your own in the place you want to live.
1:09:57 And I think if we had that, I think if we had a reasonable supply focused housing policy in this country, you would have more young people not living with their parents, living alone, starting what some call adulthood a little bit earlier, having the confidence that their money goes further so they can afford better dates with whoever they want to date.
1:10:05 And therefore becoming more likely to get married, to get married and have kids, because as we know, fertility rates tend to very commonly track coupling rates.
1:10:09 If you want a country with more kids, you need to make it easier for young people to couple.
1:10:14 I think absolutely core to that is making it easier for people to live where they want to live.
1:10:16 And that fundamentally is a housing story.
1:10:23 So the answer to your question is that it leads, as so many things lead in our book and in American Life Today, it leads to housing.
1:10:27 I’d like to do a whole podcast with the two of you on this.
1:10:30 I definitely agree with Derek that the answer to your question is that people should buy our book.
1:10:31 Like, that is clear.
1:10:37 I think beyond that, I’m probably more pessimistic than both of you are.
1:10:39 So I’m a left natalist.
1:10:43 The lead up here that you offered is mine, too.
1:10:44 I think that family is important.
1:10:46 I think children are important.
1:10:48 I am worried about falling fertility rates.
1:10:53 And I’m worried about them because of what it means about human flourishing, not just what it means about societies replacing themselves.
1:10:55 I’ve done a bunch of podcasts on this.
1:10:56 I’ve done a bunch of reporting on this.
1:11:01 I really recommend the new Gideon Lewis Krauss piece on South Korea in The New Yorker from a couple weeks ago.
1:11:08 But look, you can have the most, from the liberal perspective, pro-natal policy you can possibly imagine, right?
1:11:09 That’s Sweden, Denmark.
1:11:11 Their fertility rate has collapsed, too.
1:11:20 All their great parental leave and paid family leave and, you know, universal pre-K and, you know, egalitarian tax system.
1:11:21 It didn’t do it.
1:11:22 They’re down at 1.1.
1:11:35 I don’t know that we know, at least outside of policy interventions of a scale that nobody really wants to think about, what we could do that would dramatically change that.
1:11:43 I think it’s much, it’s cultural, it’s also technological in terms of, you know, birth control and fertility windows and all the rest of it.
1:11:45 I’m not sure we know how to do it.
1:11:48 I do agree, though, that we could make the whole thing a hell of a lot easier.
1:11:53 I do agree that housing is a big part of that and economics are a big part of that.
1:11:56 And also, I agree that culture is a big part of that.
1:12:16 And I think it matters that, I think you see in J.D. Vance with his scolding of childless cat ladies, I sort of have this thing that comes from something the sort of conservative British feminist Louise Perry said in a Barry Weiss interview, where she has this point that the difference between Andrew Tate and Jordan Peterson is that Tate is a pagan and Peterson is a Christian, which I thought was interesting.
1:12:24 And it made me think about how you could cut the Trump administration the same way, like Elon Musk is a pagan, J.D. Vance is a Christian, that kind of thing.
1:12:29 But J.D. Vance’s scolding of people was an effort to change culture, right?
1:12:32 I think that’s why he was doing it and also because he’s become very resentful.
1:12:38 I think the left has given up on having even any way to talk about what family structures it believes in.
1:12:42 I don’t think you’re going to be able to go back to the 50s the way some of these people think you will.
1:12:44 That includes people like Perry.
1:12:47 I think you have to imagine things that are new thing.
1:12:50 I think that housing actually be a part of it, but also in terms of experimenting more.
1:12:53 Like I know a lot of people want to raise kids in co-living situations.
1:13:00 It’s extremely hard to figure out how you can co-locate with your six best friends, you know, who are coupled and all raise your kids together.
1:13:01 I don’t think it should be that hard.
1:13:03 I think we should make that a lot easier to experiment with.
1:13:12 Like the thing where we’re raising all these kids in two working parent families or often one single parent family, that’s a huge experiment in human history.
1:13:14 That is not how we did it.
1:13:19 So making things that are a little bit more clan-based, a little bit more communal possible again.
1:13:23 But you can’t do it if 70 percent of the housing land in this country is owned for single family.
1:13:26 So I think you don’t just need to make new things possible.
1:13:29 I think you need to make experimentation possible.
1:13:35 And I think culturally, I do think the left needs to figure out how to not just be so individualistic about this.
1:13:44 I hear so many people talk about, and they ask me about in my AMAs and stuff, having kids, like it’s, you know, just a cost-benefit analysis like taking a trip to Costa Rica.
1:13:47 I think there’s something more valuable about that.
1:13:48 And it’s not just about your life.
1:13:55 It is also about the degree to which we should cherish the existence and the gift of existence others get to have, right?
1:13:58 The question of me having kids is not are my weekends better or worse.
1:14:02 Their experience of the weekend is important, in many ways more important than mine.
1:14:20 And so I do think there’s cultural dimensions to this, too, that are not easily amenable to policy, but do require a kind of set of discussions and a sense of what is the good life, particularly in a fairly secular age, that, you know, liberals are pretty uncomfortable having.
1:14:26 I’m not sure abundance of the book solves all of that, but it definitely solves enough of it that you should go check it out.
1:14:31 Ezra Klein is a New York Times columnist and the host of The Ezra Klein Show podcast.
1:14:35 Previously, he was the founder, editor-in-chief, and then editor-at-large of Vox.
1:14:40 Derek Thompson is a staff writer at The Atlantic and the author of the Work in Progress newsletter.
1:14:47 He’s also the author of the books Hitmakers and On Work, Money Meaning Identity, and the host of the podcast, Plain English.
1:14:49 Their new book, Abundance, is out now.
1:14:50 I said this off mic.
1:14:52 I just admire you guys so much.
1:14:53 I think you’re fearless.
1:14:54 I think you’re great storytellers.
1:14:56 Just keep on keeping on, gentlemen.
1:14:56 Well done.
1:14:58 Thank you, man.
1:14:58 I appreciate it.
1:14:59 Scott, thanks so much.
1:15:17 Algebra of happiness.
1:15:25 A lot of young people, more young people than ever as a proportion of the population are struggling with anxiety.
1:15:32 And I did a podcast yesterday with Anthony Scaramucci and Dan Harris from 10% Happier.
1:15:42 And Dan has really been, you know, the term is brave, but very useful in helping other people discuss and address their anxiety.
1:15:43 He struggles with panic attacks.
1:15:50 And he talks a lot about different cognitive behavioral therapy to help them manage through that anxiety.
1:15:55 And he has this statement that I just love, and that is, action absorbs anxiety.
1:15:58 And I’m going to share a story that is not a Hallmark story, but I think it’s relevant.
1:16:00 I coach young men.
1:16:08 And one young man in junior college, about early 20s, we’re just sort of talking.
1:16:09 And I could kind of tell what’s on his mind.
1:16:10 I’m like, what’s on your mind?
1:16:10 I said, everything’s fine.
1:16:11 He’s like, yeah.
1:16:13 He’s like, I’m a little bit freaked out right now.
1:16:14 And I said, what’s up?
1:16:16 And he said, I’ve been having trouble peeing.
1:16:17 I’m like, what do you mean by that?
1:16:18 I have trouble peeing.
1:16:20 But it’s because I have a huge prostate.
1:16:23 He goes, no, it’s been feeling funny and weird down there.
1:16:26 And I’m worried I have an STD.
1:16:28 And I said, well, have you had unprotected sex recently?
1:16:30 And he said, yes, I have.
1:16:36 And I said, look, I know exactly how to do this.
1:16:38 I know exactly what you need to do right now.
1:16:45 Right now, you need to go to urgent care, or there are all sorts of STD clinics in your
1:16:48 city, lives in a city, and you need to get tested right away.
1:16:52 And on the way to the doctor, you’re going to start to feel better, because you’re taking
1:16:53 action.
1:16:57 And fortunately, we live in a society right now where the vast majority, if not all of
1:17:00 STDs, can even can be handled or addressed.
1:17:06 And as soon as you start taking action against this problem or this issue, you’re going to
1:17:06 feel better.
1:17:08 Action absorbs anxiety.
1:17:14 And at the end of life, you’re not going to regret what happened to you.
1:17:17 You’re going to regret being so stressed out about it.
1:17:22 That is, if you’re worried about anything with your health, you immediately go to the
1:17:23 fucking doctor.
1:17:27 And maybe that’s a point of privilege for me, because I have the money.
1:17:33 But if you have resources, if you’re insured, if you can go to urgent care, you want to address
1:17:34 this situation.
1:17:36 Whenever your health is bothering you, immediately.
1:17:39 The moment you make the appointment, you start feeling better.
1:17:40 I am addressing it.
1:17:43 Action absorbs anxiety.
1:17:45 You want to move against this.
1:17:46 This is really upsetting me.
1:17:46 This is bothering me.
1:17:48 How am I going to solve it?
1:17:49 Fuck, I can’t get an internship.
1:17:51 I can’t get a job.
1:17:52 Well, okay.
1:17:54 What do you need to do to get a job?
1:17:55 You need to send out resumes.
1:17:57 You need to put together a resume.
1:18:02 When you start putting together your resume, that action starts absorbing your anxiety.
1:18:03 It’s very simple.
1:18:04 Get out of your head.
1:18:05 Get out of your head.
1:18:09 At the end of your life, you’re not going to be upset about an STD scare, not being able
1:18:12 to get a job or a health scare.
1:18:16 The thing you’re going to be worried about or the thing you’re going to regret is how
1:18:17 anxious you were about it.
1:18:18 And here’s what you do.
1:18:20 You move to action.
1:18:22 Action absorbs anxiety.
1:18:28 This episode was produced by Jennifer Sanchez.
1:18:29 Our intern is Dan Shallon.
1:18:31 Drew Burrows is our technical director.
1:18:34 Thank you for listening to the Prop G Pod from the Box Media Podcast Network.
1:18:39 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn.
1:18:45 And please follow our Prop G Markets pod wherever you get your pods for new episodes every Monday
1:18:46 and Thursday.
1:18:57 I’m sorry, the tea’s just better here.
1:18:58 The tea’s just better.
1:19:01 It’s like porn for me is better after an edible.
1:19:02 The tea’s just better.
1:19:03 Wrong analogy.
1:19:04 Wrong analogy.
1:19:35 Thank you.

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0:01:52 Welcome to Office Hours with PropG.
0:01:57 This is the part of the show where we answer questions about business, big tech, entrepreneurship, and whatever else is on your mind.
0:02:01 Today, we’ve got two great listener questions lined up.
0:02:03 And then after the break, we’re introducing something new.
0:02:05 The Reddit hotline.
0:02:06 Oh, my God.
0:02:08 It’s not the red phone.
0:02:09 It’s not the bad phone.
0:02:13 It’s the Reddit hotline where we pull questions straight from Reddit.
0:02:20 If you’d like to submit a question for next time, you can send a voice recording to officehoursofproftgymedia.com.
0:02:21 Again, that’s officehoursofproftgymedia.com.
0:02:27 Or if you prefer to ask on Reddit, post your question on the Scott Galloway subreddit.
0:02:28 That’s scary.
0:02:30 What shit must be flying around on that thing?
0:02:34 And we just might feature it in our next episode.
0:02:35 By the way, just a little bit of insight.
0:02:37 Let’s bring this back to me.
0:02:49 So we did in South by Southwest, we did a party, or Vox did a party, which is basically where they feature all their quote-unquote talent or lack thereof, their podcasters, to try and get advertisers to advertise more on our podcasts.
0:02:52 And they let out some information.
0:03:01 Basically, Vox, like every other organization, holds onto information like nuclear codes because an asymmetry of information creates advantage for the people who have the information.
0:03:11 But they did let out the following, that one of our fastest-growing segments of anything I do across this entire – let’s be honest, I’m a total podcast whore.
0:03:13 I’m like, hey, stranger, what’s your name?
0:03:13 Another podcast?
0:03:14 Sure, why not?
0:03:19 But the pod that’s doing or going the fastest is actually Office Hours.
0:03:29 And Office Hours, the vision for Office Hours was when my mom and I – I moved in with my mom for about eight months when she was very sick.
0:03:38 And one of the things we used to do was we would watch her favorite show, Frasier, and I based Office Hours on the Colin show on Frasier.
0:03:40 Anyways, welcome.
0:03:42 Hi, this is Dr. Crane, and I’m listening.
0:03:43 First question.
0:03:47 Hey, baby, I’m here to lose a call in.
0:03:48 Hi, Prof G.
0:03:50 This is Brian from New Jersey.
0:03:59 And I want to say thanks for doing such a great job offering an analysis on a wide range of topics and your genuine concern for people despite party politics.
0:04:04 I’m involved with a small, successful school adjacent to New York City that exists solely on tuition.
0:04:08 Last week, I heard you talking with Jess Tarlov about school choice.
0:04:15 But the reality is not everyone who sends their children to a private school are doing so from a place of excess.
0:04:21 The public schools in our area are overcrowded, and parents have little to no say about what their children are learning or experiencing.
0:04:34 Do you see any value, even if it was a means-tested program, for some sort of voucher or tax incentive, to take children from the public school and support smaller schools that run more efficiently?
0:04:39 From my very slanted perspective, for a third of the money of public schools, we’re doing a better job.
0:04:50 And at the same time, if the public schools were getting two-thirds of the money not to have a child in the classroom, they could devote more resources to the children who are there.
0:04:53 Thanks for listening, and I really look forward to your answer.
0:05:00 So let me be clear, and I want to acknowledge up front, there’s no such thing as a perfect solution where everybody wins.
0:05:10 I think you make a solid argument for why there are instances where vouchers probably help good people afford programs, maybe put some competition on the public schools.
0:05:12 When I look at – so the U.S. is strange.
0:05:18 Our K-12 is some of the worst in the modern or G7 economy, but our universities are some of the best.
0:05:22 And our education or our economy is beating everybody.
0:05:27 So a lot of people would just do the analysis and say, well, shitty K-12, that’s sort of the hunger games.
0:05:33 You have rich parents or you’re excellent and somehow you find a way to a good college, seems to be working for the U.S. economy.
0:05:51 The problem is I think it results in a lot of obesity, anxiety, young people without the skills to thrive in this economy that don’t have a lot of economic power and probably, I don’t want to say get exploited, but leverage for minimum wage that should be $23 an hour, not $7.25 based on productivity or just inflation.
0:06:15 So I feel as if the public school system is yet another example of not a direct conspiracy but the accidental conspiracy of creating the bottom 90 percent who become very cheap inputs for shareholders of bigger companies that know how to manage the information economy and end up, quite frankly, just being exploited and paying a lot of money for shitty sugary food and then becoming obese and then being handed over to the diabetes industrial complex.
0:06:32 Part of that system, though, is I think that when I look at healthy societies where there’s low childhood obesity, they have a private school option, but essentially there’s just much more focus on the resources and measurements for good public schools.
0:06:38 On average, American public school teachers make roughly $70,000 annually while their private counterparts make about $50,000.
0:06:39 So you’re absolutely right.
0:06:55 It appears that, on average, public schools are paying people 40 percent more because, quite frankly, you end up with probably a more difficult situation with a lot of low-income kids that probably bring a lot of anger, maybe a single-parent home where the parents can’t be involved in the kid’s life.
0:07:04 Whatever the excuse is, but public school teachers, the market is saying we need to pay them more, and private schools don’t have to pay as much.
0:07:10 Despite this, private school students consistently score better on assessments in almost every subject.
0:07:14 In some, teachers’ increased wages don’t necessarily correlate with better outcomes.
0:07:14 Why?
0:07:19 Because the public school system is riddled with bureaucracy, quite frankly.
0:07:21 And I think this kind of buttresses your point.
0:07:26 In America, there are four times as many administrators in the public education system than there were in the 1950s.
0:07:35 In 2015, the New York State School Board Association found that firing an incompetent teacher takes an average of 830 days and costs $313,000.
0:07:36 The good news?
0:07:43 School choice bills or laws that allow states to award vouchers to the parents of students in non-public schools are on the rise.
0:07:45 This is true even across party lines.
0:07:53 The 2024 poll of registered voters found that 83% of Republicans, 69% of independents, and 70% of Democrats say they strongly or somewhat support school choice.
0:08:07 I am really torn on this because what I have seen is the net effect of school choice or vouchers just subsidizes wealthy people who are going to send their kids to public or to private schools anyways.
0:08:17 And this is Pulse Marketing, but my kids were at this lovely private school in Gulfstream, Florida called Gulfstream that costs 18 or 20 grand.
0:08:30 And the idea that we were going to give people in the local community would get $10,000 towards a school, I think all that would have done was of the 230 families, 200 of them would have just got a $2 million tax break.
0:08:37 And taking money away from Atlantic, the high school, which is actually a pretty good high school, that they desperately need.
0:08:44 Now, are there probably middle-class families that would be able to attend a better school because of that $10,000 voucher?
0:08:45 Yes.
0:08:50 Is it good to have competition put on public schools?
0:08:50 Yes.
0:08:53 When we’re talking about education, though, I mean, it gets so complicated so fast.
0:08:56 So the Department of Education is supposedly on the chopping block.
0:09:04 And I’m not one of these people that doesn’t think the Department of Education should, you know, is this, it used to be sort of this virtue signaling, everyone rallied around it.
0:09:06 I think it should probably be much smaller.
0:09:08 It’s good at Pell Grants.
0:09:10 It’s good at figuring out student loans.
0:09:16 It’s probably done a lot of harm in terms of universal and mandatory testing, where every teacher now studies to the test.
0:09:18 It’s created a lot of unnecessary stress in our public schools.
0:09:20 Parents hate it.
0:09:21 Principals hate it.
0:09:21 Teachers hate it.
0:09:22 Students hate it.
0:09:27 And I feel as if they, again, are trying to justify their own bureaucracy.
0:09:40 So this is a long-winded way of saying I see your point, but one, I’m on board with a dramatic decrease in the amount of bureaucracy through competition with public schools.
0:09:44 I believe that teachers and principals should be fired and schools should be shut down if they’re not performing.
0:09:46 And new ones should be propped up.
0:09:56 But I think we’ve got to figure out a way to get more parents involved in public schools because the number one signal of whether a school is successful isn’t even resources.
0:09:58 It’s parental involvement.
0:10:07 So trying to make public schools more attractive and the way you do that, I think, is with a lack of bureaucracy.
0:10:10 And also, I just think it’s going to take more resources.
0:10:24 And I don’t think that skimming the most blessed families and the most involved parents off of the top and pulling them out of the public school system, I just think we’re further cementing a have-and-have-not caste system.
0:10:30 Having said that, I think most of it should be left to the states and local governments trying to figure it out.
0:10:38 One of the biggest problems we have in our society is that local schools are based on property tax revenues, so the wealthy neighborhoods have some private schools.
0:10:47 The public school in Palo Alto and in Woodside is better than most private schools nationally because they have a lot of money from property taxes.
0:10:49 So there has to be a leveling up.
0:10:52 The problem is the leveling up isn’t just about resources.
0:10:56 It’s about keeping dual parent households involved in the schools.
0:10:59 This is a difficult, tough question.
0:11:00 More competition.
0:11:06 More holding the teachers’ unions and public schools accountable, not being afraid to shut them down.
0:11:08 Having a reasonable ratio of administrators.
0:11:13 Clearing out the bureaucracy such that you can fire teachers and bureaucrats.
0:11:19 But also, I’m just not down with taking more money for vouchers for the privatization of our education system.
0:11:30 I think, in general, you’ve had an oligarchy that is trying to insert a profit motive into every single public service, which ultimately just creates scale, a better service, and then they start raising the rents on everybody.
0:11:32 Appreciate the question.
0:11:34 Question number two.
0:11:36 Hey, Scott.
0:11:37 Big fan of the podcast.
0:11:40 I’m a young man looking to start investing.
0:11:43 And I want to hear more about your view on the Reddit stock.
0:11:45 I know I listened to the podcast on Monday.
0:11:47 You said you were bullish on this stock.
0:11:50 I tend to agree with you through my own research.
0:11:57 Would love to hear more about your outlook on Reddit and what you see for the next five, ten years with this stock.
0:12:00 Thanks, Anonymous from Unknown.
0:12:02 Really appreciate the question.
0:12:06 So, my IPO recommendation of 2024 was Reddit.
0:12:08 And it was a simple analysis.
0:12:17 I looked at the ten most traffic sites in America, and all of them, except Wikipedia, nonprofit, traded for – were worth between $600 billion and $3 trillion.
0:12:24 And Reddit, at that time, was toggling, based on the metric you looked at, somewhere between the third and the fifth most traffic site in America.
0:12:27 And it was going public in a market cap of $5 billion.
0:12:31 Because, to that point, they had not done a great job of monetizing that incredible attention.
0:12:35 However, I believe, over time, you can monetize attention.
0:12:43 It just – I remember looking at these charts 20 years ago, where newspapers were 10% of attention but 30% of advertising.
0:12:46 And the internet was 50% of attention but only 15% of advertising.
0:12:48 I remember, okay, this is pretty easy.
0:12:54 Find the internet companies that are commanding attention, and eventually, these things are going to calibrate and equalize.
0:12:56 And I saw the same thing here.
0:13:07 And the stock went out at – was priced, I think, at $35 or $38, shot to $60, and then went as high as $240, and has now – has been cut in half with a drawdown.
0:13:15 So, as we’re recording this, their stock has been cut in half in the past month after Q4 earnings that reported underwhelming user growth.
0:13:16 But that’s still up.
0:13:21 I think that still means it’s tripled or quadrupled since its IPO.
0:13:30 Global Daily Active Unique users rose 39% year-on-year to an average of $102 million, just missing analyst expectations of $103 million.
0:13:31 Why did it get hit so hard?
0:13:36 The new meeting expectations in the internet economy is blowing them away.
0:13:37 That’s the expectation.
0:13:39 The expectation is that you’re going to blow away our expectations.
0:13:52 Although Reddit was now or is now the sixth most visited website in the world, it’s worth 50 to 60 times less than other sites that command that same attention, including Google, YouTube, Facebook, and Instagram.
0:13:54 So, what do I think?
0:13:58 I think this company is still a good long-term hold.
0:14:07 It’s got a market cap now of $22 billion, which for a guy like me, one of my many flaws as investors, I anchor off the cheapest it’s ever been.
0:14:10 Yeah, it went public at a valuation of $5 billion.
0:14:13 It traded to $7 or $8 billion that day, and now it’s at $21, but it peaked at $40.
0:14:14 It’s come down.
0:14:16 I think Reddit is a good long-term hold.
0:14:24 I just think, again, if you buy into this notion that eventually monetization catches up with the tension, it’s going to – I think it’s a good long-term hold.
0:14:27 Having said that, my general advice is the following.
0:14:32 Low-cost index funds, because nobody can pick stocks over the long term and outperform the market.
0:14:44 Even Warren Buffett will tell you that they were investing in an unusual time with a lack of information, and the asymmetry of information or your ability to find alpha or stocks that were undervalued was much greater.
0:14:46 They’re the likelihood of doing that than it is now.
0:14:52 Warren Buffett, who got – who’s arguably the best investor in history, is telling people not to be stock pickers.
0:15:06 So having said that, I believe that you can take 30% or should take 30% of your money and have some fun and invest in single stocks or single asset classes where you think you have some sort of insight or you believe that they’re undervalued, and this might be that.
0:15:12 What I would also suggest, though, is that two-thirds plus of your net worth is put in low-cost index funds.
0:15:13 And here’s a bit of the wrinkle there.
0:15:17 Make sure they’re low-cost index funds that aren’t just solely focused on the U.S.
0:15:24 The U.S. stock market is now at 98% in terms of value, meaning it’s only been more expensive on a P.E. ratio, 2% of its history.
0:15:32 European value stocks are in the bottom 2%, meaning they’ve been more expensive on a P.E. basis or traded at higher levels for 98% of their history.
0:15:37 This, to me, says to me that the markets where the rivers or flows of capital are about to reverse.
0:15:44 That was one of my big predictions for 2025 is I think that non-U.S. markets are going to outperform U.S. markets.
0:15:45 Anyways, will you ask?
0:15:46 I like Reddit.
0:15:47 I think it’s a nice long-term hold.
0:15:53 But just be careful believing that me or anybody else can give you advice on single stock picking.
0:15:54 We can’t.
0:15:55 You want to have some fun?
0:15:56 You want to try and find some alpha?
0:15:57 Have at it.
0:16:06 But keep the bulk of your firepower, your dry powder, for low-cost index funds that are diversified not only across the S&P, but across different geographies globally.
0:16:07 Thanks for the question.
0:16:17 We have one quick break, and when we’re back, speaking of Reddit, we’re diving into the depths, into the bowels of Reddit.
0:16:18 Buckle up.
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0:19:52 Welcome back.
0:19:54 We asked and read it delivered.
0:19:55 Let’s bust right into it.
0:20:00 All right.
0:20:02 Armand8194 asks,
0:20:06 Scott, something you used to preach is exclusivity as a great marketing tactic.
0:20:10 No is the sexiest word in the English language.
0:20:10 I always say that.
0:20:13 But recently, you’ve been releasing more and more podcast content.
0:20:15 Can you reconcile the two?
0:20:16 Yeah.
0:20:18 So it’s a fair point.
0:20:20 And that is, and I worry about this a lot.
0:20:23 So we had Pivot.
0:20:24 Then I launched PROFG.
0:20:25 Then PROFG Markets.
0:20:26 Now we have Raging Moderates.
0:20:32 So I’m like AOL in the 90s when you’d stick your hand in a cereal box and you’d pull out a CD-ROM of AOL.
0:20:34 I mean, it’s like to resist is futile.
0:20:40 And I do worry that the ubiquity of me, that people are going to start to have a gag reflex.
0:20:41 I go, Jesus, this guy again.
0:20:46 So what I’m trying to do is create more enterprise value.
0:20:47 What do I mean by that?
0:20:51 So my co-host on PROFG Markets, Ed Elson, does the interviews now.
0:20:55 My co-host on Raging Moderates, Jess, does all the interviews.
0:20:57 So I’m only on about half of the episodes.
0:20:58 We’re about to go daily.
0:21:02 Speaking of like too much of anything is not a good thing.
0:21:06 We’re about to go daily on PROFG Markets because the markets are daily.
0:21:08 And I’m only going to be on twice a week.
0:21:11 I’ll do some like impromptu guest appearances.
0:21:15 But what you’re saying is absolutely true.
0:21:17 I try and create scarcity across my speaking.
0:21:21 I price my speaking fees at sort of an outrageous dollar amount because one, I don’t want to work
0:21:24 that hard and I only want to go to places I like.
0:21:25 And two, pricing is a signal.
0:21:27 So scarcity is key.
0:21:29 I’m very cognizant of that.
0:21:31 I try and take time off, one, because I’m lazy, but B.
0:21:35 So my co-host on Pivot, Kara Swisher, does pretty much every episode.
0:21:37 I take the month of August off.
0:21:38 I take weeks off at a time.
0:21:42 I’m doing a college tour with my son and they said, we’ll set you up for a moment.
0:21:42 I’m like, no, you won’t.
0:21:43 Just find a guest host.
0:21:47 So I think it’s important to have a little bit of scarcity value.
0:21:49 And I’m very cognizant of it.
0:21:50 And quite frankly, you’re right.
0:21:55 I’m worried that at some point I’m just going to dilute my brand equity and it’s just going
0:21:58 to be too much and people are going to get sick of dick jokes.
0:21:59 I’m cognizant of it.
0:22:03 Your theory goes to an important marketing theory, and that is the most profitable companies
0:22:07 in history that have the greatest gross margins create the illusion of scarcity.
0:22:13 I’m wearing a Panerai watch, which is $1,000 of movements, plastic, and glass that they charge
0:22:17 $11,000 for because they’ve created this illusion that Panerais are scarce.
0:22:23 They purposely constrict supply such that when you see the watch you want, they can honestly
0:22:24 say, well, we only have one.
0:22:29 We have artificially reduced the supply of freshman seats at elite universities.
0:22:35 I’m cognizant of the fact that I might be moving myself from what is kind of a scarcity
0:22:37 luxury brand to a mass brand.
0:22:44 And I’m trying to ensure that it’s just not too much Scott all the time through co-hosts
0:22:46 and limiting or reducing some of my appearances.
0:22:48 But you clearly have an instinct for marketing.
0:22:52 And the illusion of scarcity is so important.
0:22:53 In life, it’s really important.
0:22:58 In an interview, when you’re interviewing with somebody, start asking them questions and act
0:23:02 as if you’re interviewing them and give them the impression that you might have another
0:23:06 offer, that you are so good at what you do that you are interviewing them.
0:23:07 Why?
0:23:11 Because my human capital is scarce and a lot of people want to rent it.
0:23:14 You don’t want to be too available to potential romantic partners.
0:23:20 You have to have lines that say, okay, this is unacceptable or don’t be too available.
0:23:22 Scarcity.
0:23:26 Yeah, I think your instincts are right on.
0:23:32 You want to maintain, again, any high margin product equals the illusion of scarcity.
0:23:33 Thank you for the question.
0:23:35 All right.
0:23:36 Next question.
0:23:42 Scott, when you hear or come up with your dirty jokes, where is the line where you think,
0:23:44 ooh, that is too far?
0:23:49 Okay, so I am generally a profane or vulgar person, but there’s a strategy behind it.
0:23:52 And that is, all strategy comes down to one question.
0:23:59 What can we do that is really hard, or put another way, what can we do that our competition
0:24:00 can’t do?
0:24:07 Amazon and Netflix spend tens of billions of dollars on infrastructure and fulfillment and
0:24:11 on content because their competitors can’t because they don’t have access to cheap capital.
0:24:16 So they’re like, okay, Netflix goes, if we spend $18 billion on content, Peacock just
0:24:17 can’t do it.
0:24:18 Hulu can’t do it.
0:24:19 Disney Plus can’t do it.
0:24:20 Even HBO can’t do it.
0:24:22 And so that’s where they go.
0:24:26 And they focus on this kind of brute force spending strategy.
0:24:31 Where I have decided to go in terms of trying to differentiate my podcast is, quite frankly,
0:24:37 one of the reasons I am really crude is that, one, CNBC can’t tell dick jokes.
0:24:41 And I want to be known as provocative and profane.
0:24:47 I also think that if you’re funny and profane, it kind of softens the beach and people become
0:24:48 more open to new ideas.
0:24:51 Also, I want to appeal to younger people.
0:24:57 And quite frankly, young men respond to my type of profanity.
0:24:58 Sometimes I go too far.
0:25:01 Sometimes I can hear myself, the words coming out and thinking, you know, that’s a little
0:25:02 bit much.
0:25:07 I’ve had parents write in and say, I’d like to play this with my kids, but I’ve stopped because
0:25:07 you’re so crude.
0:25:11 I’ve had CEOs call me and say, I would have sent this clip to the entire company, but I can’t
0:25:16 be seen or heard sending out something with these types of, this type of profanity.
0:25:22 I also, my kind of heroes are comedians that were social commentators and were also really
0:25:23 profane.
0:25:26 Whether it was Richard Pryor or Lenny Bruce, or I think Bill Burr is a genius.
0:25:28 These guys are not afraid to be profane and vulgar.
0:25:30 So one, it’s genuine.
0:25:31 I’m a profane and vulgar person.
0:25:33 Two, I want to appeal to young men.
0:25:37 I want my content to resonate with them such that to listen to some of the lessons I have
0:25:40 about what I hope is a positive vision of masculinity.
0:25:45 And also, just purely strategically, it is clear when you listen to the show, this is not
0:25:47 your father’s CMBC.
0:25:48 I appreciate the question.
0:25:54 And just so you know, the other day, I walked into my son’s room to have the sex ed talk
0:25:57 and I walked in with a, you know, with a condom and a banana.
0:25:59 And he said, what’s the banana for?
0:26:02 And I’m like, well, I can’t get hard on an empty stomach.
0:26:04 That’s good.
0:26:05 Thanks for the question.
0:26:11 Hey, Scott, they say wealth typically lasts about three generations.
0:26:15 Are you doing anything different in the way you are raising your children to prepare them
0:26:19 for the advantages they will have entering the market and how to contextualize them?
0:26:21 Are you even considering this as a concern or is it overblown?
0:26:23 Oh, no, it’s a huge concern.
0:26:31 I’m worried if my parents had been wealthy and I knew that was sort of a backstop or a
0:26:35 hammock, the only two things I know I would have in my life if my parents were rich were
0:26:37 a Range Rover and a cocaine habit.
0:26:44 I was, my motivation didn’t come from wanting to be successful or wanting to have a positive
0:26:45 impact on the world.
0:26:48 My motivation was I grew up without money.
0:26:49 It was humiliating for me and my mom.
0:26:53 And I was very focused on, okay, what can I control?
0:26:57 I can control how hard I work and the risks I take because I want economic security.
0:27:00 My kids probably don’t have that same fire.
0:27:03 I think about it a lot.
0:27:06 I think about, you know, not spoiling them.
0:27:07 You fly somewhere nice.
0:27:08 You’ve worked hard.
0:27:10 You want to fly business or first class.
0:27:16 And then I see my 14-year-old playing with his flat seat and I see a 70-year-old woman
0:27:16 roll by.
0:27:17 I’m going to coach.
0:27:18 And I think this is just wrong.
0:27:21 And I say to my partner, the kid should not be in business.
0:27:22 And she says, well, fine.
0:27:27 If you want to fly with coach and coach with them, have at it because they don’t allow kids
0:27:28 alone back in coach.
0:27:31 So the reality is my kids know they have money.
0:27:38 The good news is that I find a kid’s approach to money or anything else is that the parents
0:27:40 have less impact than you think.
0:27:43 And that is, as parents, we like to think we’re engineers.
0:27:44 We’re not.
0:27:45 We’re shepherds.
0:27:48 And that is, we get to choose the land they graze on, point them in the right direction,
0:27:49 decide what they eat.
0:27:51 But the sheep comes to you.
0:27:56 And what I have found is one of my sons, he won’t even let me buy stuff for him.
0:28:01 I’ll take him out and I’ll say, hey, we went to Sunspiel, this great kind of British brand
0:28:04 that’s supposed to be the casual brand for James Bond.
0:28:06 And I wanted to buy him a cashmere hoodie.
0:28:08 And it was 230 pounds.
0:28:08 He’s like, I’m not buying this.
0:28:10 I’m like, no, you’re not buying it.
0:28:10 I am.
0:28:12 He’s like, no, no, no, I’m not going to spend this kind of money on it.
0:28:16 He just is physically uncomfortable with spending money.
0:28:19 And I don’t know where he got that because even when I didn’t have money, I was very comfortable
0:28:20 spending money.
0:28:24 I’ve always, you know, I haven’t got a spending problem, but I’ve always been, I like to think
0:28:26 someone who enjoys life and is not afraid to spend money.
0:28:29 Whereas my other son is like, we’ll pop up and go, can I have two then?
0:28:33 So, and we just haven’t treated them that much differently.
0:28:34 I think about this a lot.
0:28:39 I’m going to put some money aside so they can have, always have access to housing, always
0:28:40 have access to education.
0:28:44 But my plan is to spend it all before I go.
0:28:47 My approach to spending is pretty promiscuous.
0:28:48 I spend a lot of money.
0:28:50 Every year I meet with my team at Goldman.
0:28:52 I look at how much money I made.
0:28:53 I already have my number.
0:28:58 And any additional money above that in terms of net worth, I either spend it or I give it
0:29:03 away because I want to make sure my kids have some advantage, housing, access to education.
0:29:06 But I don’t believe in dynastic wealth.
0:29:08 I know a lot of rich kids.
0:29:11 I wouldn’t say they’re any more fucked up than other kids, but they’re no less fucked up than
0:29:12 other kids.
0:29:16 So I don’t think you’re really giving much advantage to your kids with extraordinary wealth.
0:29:17 Is it a competitive environment?
0:29:21 Do you want them to have some of the opportunities that you’ve worked so hard to give them?
0:29:22 Yeah.
0:29:26 I want my kid to be able to live where he wants to live, to pick the career he wants to
0:29:28 pick, which is obviously extraordinary advantage.
0:29:31 But just being blunt, I’m going to offer that to my children.
0:29:35 I think you use money with your kids to lever up or lever down.
0:29:40 If one of my kids decides to teach public school, I’m going to probably give him a decent amount
0:29:41 of money.
0:29:49 If one is doing nothing and kind of just ne’er-do-well or I’m not going to give that kid any money.
0:29:55 So I think you have some control over it, not a lot, but it is something I think about all
0:29:55 the time.
0:30:01 And my approach, my way of expressing concern about this problem is I am spending money like
0:30:04 a fucking gangster in the 50s just diagnosed with ass cancer.
0:30:05 Hello.
0:30:06 Hello.
0:30:07 What, Vegas?
0:30:08 Daddy’s in.
0:30:09 The dog is in.
0:30:11 I start from yes.
0:30:14 That’s all for this episode.
0:30:18 If you’d like to submit a question, please email a voice recording to officehours at
0:30:19 prof2media.com.
0:30:21 That’s officehours at prof2media.com.
0:30:26 Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit
0:30:30 and we just might feature it in our next Reddit hotline segment.
0:30:31 What a thrill!
0:30:44 This episode was produced by Jennifer Sanchez.
0:30:45 Our intern is Dan Shallon.
0:30:47 Drew Burrows is our technical director.
0:30:50 Thank you for listening to the Prof G pod from the Box Media Podcast Network.
0:30:55 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn.
0:31:01 And please follow our Prof G Markets pod wherever you get your pods for new episodes every Monday
0:31:01 and Thursday.

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0:01:00 Gen X women are doing it.
0:01:03 And doing it quite well.
0:01:10 Having a bit of this sexual rediscovery later and finding that everything still works.
0:01:14 Sometimes much to their surprise that desire is still there.
0:01:17 That, you know, sexual function is still there.
0:01:20 Is there a middle-aged sexual renaissance afoot?
0:01:23 And should 50-somethings be crediting 20-somethings for it?
0:01:26 That’s this week on Explain It To Me.
0:01:30 New episodes every Sunday morning, wherever you get your podcasts.
0:01:36 Welcome to Raging Moderates.
0:01:37 I’m Sky Galloway.
0:01:38 And I’m Jessica Tarlov.
0:01:43 Jess, we are literally bigger than the NVIDIA conference.
0:01:46 We’re maybe even bigger than Taylor Swift.
0:01:57 We have sold out in minutes the 900-seat auditorium at the literally the Cathedral of Wokeism, the 92nd Street.
0:01:57 Why?
0:02:00 We are sold out, Jessica Tarlov.
0:02:01 I know.
0:02:02 We are sold out.
0:02:04 I’m, on the one hand, super excited about that.
0:02:09 And on the other hand, upset because people can’t get tickets anymore to come.
0:02:10 And I’m getting a lot of…
0:02:10 StubHub.
0:02:11 That’s what…
0:02:14 Do you think the secondary market is going to be huge for us?
0:02:14 Well, I don’t know.
0:02:17 But I reserve 50 tickets and Daddy needs new shoes.
0:02:17 So we’ll see.
0:02:20 Daddy needs new shoes.
0:02:21 So you sold us out, basically.
0:02:23 Yeah, let’s be honest.
0:02:24 No, no, no, no, no, no, no, no.
0:02:25 One of us is quirky and interesting.
0:02:27 The other is smart and hot.
0:02:29 I’m going with smart and hot sold us out.
0:02:31 And I hope that doesn’t trigger our feminist followers.
0:02:34 But yeah, I’ve done a lot of these events.
0:02:38 I’ve never had it sold out for this big an auditorium this quickly.
0:02:40 And I think you’re the variable here.
0:02:43 Anyways, we can’t say who we have, but we have someone who’s probably a likely contender
0:02:45 for president and a huge power player.
0:02:47 I didn’t want a guest.
0:02:47 Just did.
0:02:49 I thought we could carry the thing.
0:02:52 I want more opportunities to talk about me.
0:02:56 And he’ll take some of the oxygen or she, he or she will take some of the oxygen out of
0:02:59 the room because they’re a player, a player.
0:03:00 But you wanted a guest.
0:03:09 I wanted to have a broad discussion that made plenty of time for us, more for you than for
0:03:11 me, because one of us needs more of that than the other.
0:03:18 And I also wanted to cement our place in the Beltway relevancy, I guess.
0:03:20 And I think it’s super cool.
0:03:23 And there will be tons of opportunities also for us to do this.
0:03:30 I was talking with producer David that maybe we would do a little touring around the midterms
0:03:31 or something like that.
0:03:34 And we can go selling out theaters across the country.
0:03:35 What do you think?
0:03:39 So I’m dying to be relevant in Miami and New York and L.A.
0:03:41 I could give a shit about being relevant in the Beltway.
0:03:45 I think the Beltway is literally the name of cool bar in D.C.
0:03:47 First off, the people aren’t that hot.
0:03:50 Secondly, no good bars, nowhere to go out after midnight.
0:03:55 I mean, I could literally give a shit how relevant I am in the Beltway.
0:03:59 I mean, they literally decide everything that affects your life there.
0:04:00 I understand.
0:04:01 I mean, and I’m just not a D.C. person.
0:04:06 I’m sure there is a cool D.C. bar in like one of the hotels or something.
0:04:07 Not even the hotels are that cool.
0:04:08 The hotels are lame.
0:04:09 It’s inspiring.
0:04:10 It’s where you take your kids.
0:04:14 But if you want to roll, if you want to have some fun, if you want to meet super interesting people.
0:04:17 Yeah, the people from D.C.
0:04:21 Anyone who’s lived in D.C. for longer than 10 years, pro tip, they brighten up a room by leaving it.
0:04:26 Anyways, we have we have someone important showing up to the 90 Seconds Reye.
0:04:30 Yeah, thank you for just totally crapping on the entire premise of this.
0:04:31 Anyway, it’s going to be great.
0:04:33 And most of the people are from different districts.
0:04:35 So they’re from different areas.
0:04:35 Right.
0:04:37 So they’re they’re cool back home.
0:04:41 But once they get there, it starches them of all their cool once they get there.
0:04:45 Uplifting promo for our talk at the 90 Seconds Reye.
0:04:46 Anyway, we’re really excited.
0:04:46 Clearly.
0:04:47 All right.
0:04:52 Today, in our episode of Raging Moderates, we’re discussing what’s going on with the Social
0:04:53 Security Administration.
0:05:00 Trump tries to dismantle the Department of Education and the 2024 presidential election autopsy
0:05:00 report.
0:05:01 All right.
0:05:02 Let’s bust into it.
0:05:07 The head of the Social Security Administration, Leland Dudek, threatened to shut down the entire
0:05:12 agency over a court ruling, only to walk it back after a federal judge called him out for
0:05:13 misinterpreting her order.
0:05:18 This all started when the agency gave Doge broad access to Social Security data to supposedly
0:05:19 root out fraud.
0:05:23 A judge stepped in, saying that was a major privacy violation.
0:05:28 And Dudek responded by claiming that limiting Musk’s team also meant limiting his own employees,
0:05:31 essentially making it impossible to run Social Security.
0:05:33 The judge wasn’t buying it.
0:05:35 And now Dudek has backed down.
0:05:40 But this whole situation raises big questions about what’s really going on with Social Security
0:05:42 under the Trump administration and Musk’s involvement.
0:05:49 Meanwhile, protesters, retirees and union members are sounding the alarm about potential cuts and
0:05:50 disruptions to benefits.
0:05:56 As Commerce Secretary Howard Lutnick suggested that only fraudsters would actually notice if Social
0:05:58 Security checks just didn’t go out one month.
0:06:03 I can’t even get past that statement without saying, Jesus Christ, talk about winner of head
0:06:03 up your ass.
0:06:06 That statement, as you can imagine, did not go over well.
0:06:08 Let’s have a listen.
0:06:13 Let’s say Social Security didn’t send out their checks this month.
0:06:18 My mother-in-law, who’s 94, she wouldn’t call and complain.
0:06:20 She just wouldn’t.
0:06:23 She thinks something got messed up and she’ll get it next month.
0:06:31 A fraudster always makes the loudest noise, screaming, yelling and complaining.
0:06:40 My dad is 95, he’s struggling, and he is in hospice, he no longer recognizes anybody, including
0:06:41 his son and his daughter.
0:06:45 If his Social Security check didn’t show up, I’m pretty sure he would come to and head down
0:06:46 and protest.
0:06:56 The notion that this wouldn’t immediately cause massive panic for anyone whose son isn’t the
0:07:00 head of an investment bank and magnificently rich, I couldn’t get over it.
0:07:04 This was tone deaf even for the Trump administration.
0:07:05 Your thoughts?
0:07:05 Yeah.
0:07:07 And they’re setting a new standard, right?
0:07:13 When you have 13 billionaires in the government, which, and again, I’m not anti-billionaire.
0:07:18 I think capitalism is a wonderful thing, but I think that there are good billionaires and
0:07:19 there are bad billionaires.
0:07:22 And the bad ones shouldn’t be in charge of our government.
0:07:32 And Lutnick has been on a tour of asinine commentary in the last few weeks.
0:07:35 I mean, it’s not just this, which I think will kind of be in the Hall of Fame.
0:07:41 And if he is out of a job soon, which I’ve spoken to a number of Republicans who feel like
0:07:45 he will be the first to go just because he is embarrassing the administration right, left,
0:07:50 center, this comment will obviously be atop the list of why that happened.
0:08:00 But I’m wondering how somebody can have such little aptitude for self-reflection to understand
0:08:05 that your mother-in-law, by virtue of being your mother-in-law, is also a billionaire and
0:08:09 is probably actually claiming a Social Security check that she doesn’t need.
0:08:10 And I don’t begrudge her that.
0:08:12 Social Security, we paid into the system.
0:08:14 It’s your money that you’re getting out of it.
0:08:16 They’re acting like that this is a handout.
0:08:18 It’s absolutely not the case.
0:08:25 But it’s like every time they talk about one of these departments, they expose themselves
0:08:31 to be not only mean, but also incredibly lazy, that they don’t want to do the work to understand
0:08:33 what it is that the government is actually doing.
0:08:38 And I think that that’s one of the most potent arguments against them, that A, there’s an
0:08:45 evilness to this, and there’s a derisiveness and a nastiness that is really important.
0:08:51 Like, I understand he’s not a candidate for president, but I was reflecting back on Hillary
0:08:55 Clinton saying about half of Trump supporters go in this basket of deplorables, right?
0:09:00 And I don’t, there were a lot of different factors that ended up causing her to lose the
0:09:04 election, and the Comey letter was the number one cause of that, a la Nate Silver.
0:09:08 But she made that comment, which was obviously really bad if you’re going to an election.
0:09:14 And then you think about someone like the Commerce Secretary, which is not the most important
0:09:17 job, but it’s still, you know, a pretty good cabinet position saying something like this.
0:09:26 That exposes them for having zero respect for anyone, certainly not in the top 1%, right?
0:09:33 And no understanding of how the system works, and that they’re proud of it, too.
0:09:40 Like, if I felt that way about the vast majority of Americans, I would be embarrassed, and I would
0:09:48 try to be in private as much as possible when I was espousing these offensive, nasty views.
0:09:51 And they’re just letting it all hang out, right?
0:09:56 Like, they’re mansplaining and manspreading all over every kind of media outlet that will
0:10:00 have them, these views that are completely un-American.
0:10:05 And if you ask him, well, what is Social Security to you?
0:10:08 He certainly wouldn’t say it’s the greatest anti-poverty program that we’ve ever had in
0:10:08 American history.
0:10:13 But that’s actually what Social Security is, keeping millions of seniors out of poverty.
0:10:18 And not only that, but returning their own money to them, it floored me.
0:10:20 And then he just sat there.
0:10:24 And then also the hosts and the All In podcast, that was the one he was on, just went, mm-hmm.
0:10:30 And I understand you have a guest, and it is sometimes difficult to tangle with them, right?
0:10:32 And you don’t want to make it controversial.
0:10:34 You don’t want to be pushing back that hard.
0:10:41 How do you not mention the fact that most people actually rely on their Social Security?
0:10:44 Any stats, I mean, these people are supposed to be good at finance, right?
0:10:48 The economy, understanding what’s going on, saying, like, this is actually what’s keeping
0:10:51 seniors above water in most cases.
0:10:55 And it’s really nice that your mother-in-law has a great life because her daughter married
0:10:55 well.
0:10:59 But the rest of the world doesn’t work like this.
0:10:59 Yeah.
0:11:00 I mean, there’s so much here.
0:11:05 First off, one of the things that’s really disappointing was, I think, in the first Trump
0:11:11 administration, he did find really talented, bright people and surrounded himself with talented
0:11:11 and bright people.
0:11:13 And I don’t think that’s the case here.
0:11:16 I think the litmus test is, will you do anything I say?
0:11:18 Well, are you willing to go out and lie?
0:11:21 Are you willing to go out and just speak non-truths?
0:11:26 He’s looking for acolytes and cult members, not for competent professionals.
0:11:32 I mean, just looking at the last Commerce Secretary under Biden, Gina Marie Raimondo, she was a venture
0:11:34 capitalist, a lawyer, the governor of Rhode Island.
0:11:36 She was outstanding.
0:11:41 And anyone who dealt with her thought, this is someone who does an outstanding job of representing
0:11:43 U.S. commerce interests domestically and internationally.
0:11:47 And this guy’s going off and saying that just stupid shit.
0:11:51 First off, if you’re guilty of Social Security fraud, I doubt you’re going to complain.
0:11:52 I think you’d probably want to stay under the radar.
0:11:58 And if there’s anything Doge has proven is that there’s a lot less fraud and waste than it
0:12:00 initially theorized, including Democrats.
0:12:04 They’re having trouble finding fraud and waste.
0:12:07 And just a few things about Social Security.
0:12:11 It arguably is the most successful social program in American history.
0:12:17 It’s taken senior poverty from about, they think it would be somewhere around 38 percent,
0:12:20 and it’s taken it to below 10 percent.
0:12:22 So it’s been hugely effective.
0:12:28 Now, what I will say is, and we might differ a little bit on this, and I’m looking for points
0:12:33 of friction because we’re usually in sort of violent agreement, I do believe, well, you said
0:12:35 that you paid into it, it’s yours.
0:12:36 I don’t agree with that.
0:12:40 I don’t, I think the reason they call it a Social Security tax, not the Social Security
0:12:45 pension fund, is I don’t think you or me have rights to Social Security when we hit 65.
0:12:51 And the notion that I paid into it, I should get my money back, actually, the majority of
0:12:53 people take out well more than they actually put in.
0:13:01 And if we’re going to, I believe that nobody over the age of 65, or maybe even under the
0:13:04 age of 65, should be live in poverty.
0:13:10 And I’m absolutely not against cutting Social Security benefits for anyone who needs it.
0:13:15 I believe somewhere between 10 and 30 percent of people who get Social Security right now should
0:13:17 not receive it because they don’t need it.
0:13:21 And that is the wealthiest generation in the history of this planet, our senior citizens,
0:13:26 and the fact that every year we affect a $1.2 trillion transfer from young people who are
0:13:31 not doing as well as they have in past generations to the wealthiest generation in history means
0:13:32 something is wrong.
0:13:36 And I do think that the initial instinct around reforming Social Security is a good one.
0:13:42 It’s something I would like to see someone take on because I think when the program was
0:13:45 started, people were living on average 10 to 15 years.
0:13:47 They were dying much earlier.
0:13:48 They weren’t making as much money.
0:13:49 They weren’t working as long.
0:13:57 So to means test it and slowly but surely increase the age limit or the age qualification,
0:13:59 we just need to do it.
0:14:03 There used to be, I think when the program was initially conceived, there were 12 young people
0:14:05 paying into the system for every one person taking money out.
0:14:06 Now it’s three to one.
0:14:11 And if you were really serious about this, this is how outrageous our economy has become
0:14:12 in terms of the transfer from young to old.
0:14:16 So it’s a program that should keep seniors out of poverty.
0:14:21 It shouldn’t continue to be a wealth transfer from the young to the old who are already, as
0:14:23 an aggregate, the wealthiest generation in history.
0:14:25 We need serious reform.
0:14:28 We need to dramatically cut the cost.
0:14:31 It’s been way too politically dangerous to get near.
0:14:34 $40 billion child tax credit gets stripped out of the infrastructure bill.
0:14:36 Old people have figured out a way to vote themselves.
0:14:37 More and more money.
0:14:38 It needs to stop.
0:14:45 A good, I’ll go as high as a third of senior citizens should not be getting social security.
0:14:46 Your thoughts?
0:14:49 Well, I appreciate the effort to get us to disagree.
0:14:51 I want to keep up with that.
0:14:53 But it’s pretty persuasive.
0:14:57 And I know, like, my dad, before he passed away, he didn’t claim his social security.
0:15:00 He said, I don’t need this.
0:15:01 You know, I’m doing fine.
0:15:06 And maybe there should be some type of means testing mechanism.
0:15:11 I think Democrats would be smart to be having a more kind of responsible conversation about
0:15:19 the fact that social security is going to go insolvent and, you know, not far down the road, down the road at a time that we’re going to be able to see that.
0:15:30 The issue is, is that what the Trump administration is doing makes that kind of conversation impossible because they’re trying to ruin social security for people who actually need it.
0:15:33 So not the third of seniors that you’re talking about.
0:15:36 They’re talking about it for the two thirds of seniors that desperately need it.
0:15:40 So they’re doing things like closing social security offices all over the country.
0:15:50 They’re also cutting back on the employees that answer the phones and making it impossible for seniors to be able to talk to anyone and to collect their benefits.
0:16:00 And, you know, you have a 95 year old father who is not going anywhere on his own anyway, has to send someone, I presume, to go and do things for him.
0:16:05 But when you say to people, oh, just come down to our office, oh, just kidding, that office is closed.
0:16:12 Oh, just kidding, the next closest office can be up to 120 miles away from where that senior citizen lives.
0:16:16 You’re essentially saying a huge F you, right, to them.
0:16:20 But also we’re doing away with social security, whether you like it or not.
0:16:22 They’re also doing crazy stuff.
0:16:25 And this goes back to Lednick talking about the quote unquote fraudsters.
0:16:36 And I just want to add to the conversation that apparently the level of social security payments that are erroneous is under zero point zero zero six to five percent.
0:16:37 Yes. No one.
0:16:38 So no one.
0:16:39 Basically no one.
0:16:43 And what they did to a man in Seattle, they decided he was dead.
0:16:45 He is very much alive.
0:16:48 They canceled his social security payments and also his Medicare payments.
0:16:53 So he can’t get health care and he can’t get the money that he lives on.
0:16:57 And he was able to, with the help of family, claw it back.
0:16:58 Right.
0:16:59 And now everything is fine.
0:17:01 And they do this collective.
0:17:02 So what?
0:17:04 Oh, so you were a little inconvenienced.
0:17:06 I get this all the time on the five for my colleagues.
0:17:13 Talk about an American man who was detained in Chicago for 10 hours that luckily the guy was carrying his social security card.
0:17:19 So once they gave him back his stuff, after they cuffed him and threw them in an ICE detention center, could say, excuse me.
0:17:22 And not only I wasn’t just naturalized, I was born here.
0:17:24 They say, oh, well, everything was fixed.
0:17:25 No big deal.
0:17:29 You tell me, are you comfortable if I throw you in the back of an ICE truck?
0:17:33 And 10 hours later, I say, oh, no, you’ll still make your dinner reservation.
0:17:34 You can go.
0:17:37 Or someone who needs their social security payments.
0:17:39 And we just say, well, it was rectified.
0:17:40 That’s Elon’s thing.
0:17:43 He says, oh, we cut, you know, an AIDS funding program.
0:17:44 That was a mistake.
0:17:45 We turned it back on.
0:17:48 How is this an OK way to do governance?
0:17:51 That’s where it really falls down.
0:18:03 And because they’re doing it at a warp speed and at this level of inaccuracy or stupidity, it makes it impossible to have any sort of adult conversation like the one that you were trying to have.
0:18:07 So I don’t know if that counts as disagreeing with you a little bit, but that’s all I got.
0:18:11 I have a as usual, I always enjoy incorporating my own personal parables into all of this.
0:18:16 When my mom passed away, I handled all her, you know, only son.
0:18:23 And so we had her bank account and I kept it open for a while such that we could pay any remnant bills.
0:18:29 And I just left the money in there for a few years, mostly because I was too lazy to figure out what to do with it.
0:18:30 And it wasn’t a ton of money.
0:18:38 And when I was reviewing it after year one, I noticed that $3,600 or something had been just taken out.
0:18:39 And I said, what was this?
0:18:40 Did we pay this?
0:18:41 And it said it had some government thing on it.
0:18:48 And it ended up that the Social Security Administration had continued to pay her Social Security for three months post her death.
0:18:50 And they recognized it.
0:18:52 They have some system of figuring out.
0:18:54 They look at death certificates or something.
0:18:57 And then they just went in very cleanly and then pulled it right back out.
0:19:04 So they were pretty efficient and immediately figured out she was no longer living nor entitled to Social Security payments.
0:19:19 And Geico, her insurance company, obviously I’m not very meticulous, I noticed something like two or three years later, I kept saying, what is this $120 payment that keeps going out of her account every month?
0:19:23 And Geico continued to take money out of her account for her car insurance.
0:19:25 And so I called them and said, okay, my mom died.
0:19:27 It might have been in four years.
0:19:29 I’m like, my mom died years ago.
0:19:31 I sold the car years ago.
0:19:36 And you have been taking money out for her auto insurance for years.
0:19:41 And they said, well, per your policy, it’s incumbent upon you to notify us.
0:19:42 And they wouldn’t give me the money back.
0:19:48 So there’s Geico, private sector, and there’s government.
0:19:53 One of them is corrupt, amoral, and inefficient, right?
0:19:56 That makes the government the other guys.
0:19:59 They were honest, very efficient.
0:20:04 So the notion somehow, people got to stop shitposting government, right?
0:20:10 And what I figured out is you can shitpost everyone in government unless they’re carrying an assault weapon.
0:20:15 We’re like, we’re pretty benign towards cops or an axe, firemen.
0:20:19 And if you’re carrying an M-15 with a uniform, then all those people are heroes.
0:20:22 And everyone else working for government is incompetent.
0:20:25 Well, how can that be possible, folks?
0:20:29 And we just don’t give enough credit to the rank and file.
0:20:34 And one of the things that’s most discouraging about all of this is that in the next administration,
0:20:37 which I’m convinced is going to be a Democrat, because I think people-
0:20:39 That makes me feel better, because I’m very scared.
0:20:42 Well, and I usually get this wrong, so let’s be-
0:20:42 Oh, good news.
0:20:43 I should caveat that.
0:20:50 But I think that essentially Trump and the clown car here is revealing itself every day.
0:20:54 And I think even, not even moderate Republicans, but I think Republicans are like, Jesus Christ,
0:20:56 we did not bargain for this.
0:21:03 And I think the next administration will fill their administration with talented people.
0:21:04 People want to serve.
0:21:06 They can attract really talented people.
0:21:13 We’ll have no problem should we retake the White House in three years, in nine months, to get competent people.
0:21:20 The hard part is the millions of employees that work in the engine room and make this shit work.
0:21:27 Because when you fire the people overseeing your nuclear stockpile, and then you ask them to come back, a lot of them don’t.
0:21:29 And guess who doesn’t come back?
0:21:33 The people with the most external opportunities, which is Latin for the best people.
0:21:37 Imagine you were running- I can’t even imagine.
0:21:39 I’ve run organizations my whole life.
0:21:43 If I said to the entire tech team, you’re fired.
0:21:43 I did it via email.
0:21:44 I don’t care how long you’ve worked.
0:21:45 You’re fired.
0:21:45 Go off.
0:21:46 Your email’s been turned off.
0:21:49 And then a couple weeks later, I said, oh, I fucked up.
0:21:51 I realize we do need technology.
0:21:52 You’re rehired.
0:21:57 They just, most of the most talented ones would not come back.
0:21:59 They’d be like, no, I’m, sorry, boss.
0:22:03 You can reach me at, you know, lisam at google.com.
0:22:04 I’m now at Google.
0:22:23 So the hollowing out of what is, in my view, the most impressive organization in history, and that is the U.S. government, specifically, I would argue it’s probably the U.S. military, but in general, the U.S. government, that gives delivered unbelievable prosperity, rule of law, rights, for what are some of the lowest taxes in history.
0:22:24 You just look at it as a product.
0:22:29 The shit you get from America, from the U.S. government, and how much you pay for it.
0:22:33 This is the best product for the price in history.
0:22:37 And you have to credit some of the people in the engine room doing this.
0:22:41 And we are essentially saying to them, this is a bad place to work.
0:22:46 And it’s going to be very hard to bring back the morale, the standard.
0:22:47 How are you going to get young people?
0:22:49 How are you going to convince the breast and brightest?
0:22:55 Some of our government agencies, specifically our security apparatus, recruits out of my class at NYU.
0:22:59 I don’t think a lot of them are going to want to go to work for the government any longer.
0:23:01 I’m like, I don’t want to get summarily fired for no reason.
0:23:04 I want to be overseas and find out.
0:23:08 I just heard, I don’t know if I told you this, a great kid, Greg Townsend, who was in my fraternity.
0:23:11 I hadn’t heard from him in 30 years, 40 years.
0:23:17 Anyways, and he said, I’ve been working for the UN and I basically, he’s in Switzerland and then he was in Africa.
0:23:20 And he said, I hunt down and prosecute war criminals.
0:23:23 And he makes a good living, not a great living.
0:23:25 He made much more living in private practice as a lawyer.
0:23:27 Met a woman, fell in love.
0:23:28 She does something similar.
0:23:32 And he said, overnight, a few weeks ago, all payments were stopped.
0:23:33 None of them are getting paid.
0:23:36 And they’ve decided to continue to do this work.
0:23:46 And if you think about, you know, it’s probably a good idea that if people decide to go into remote villages and start killing women and children, that there might be a price to be paid down the road.
0:23:48 That’s a good incentive system to have in place.
0:23:51 And we’ve just decided to remove that incentive system.
0:23:58 And when Greg finds another job, which he will, because he’s a very talented guy, and at some point he has an obligation to support his family.
0:24:10 If we call him back in four years and say, you know, we’re sorry, we’re firing up whatever it is, the UN Rights Commission on, or the, I forget what organization it is.
0:24:13 Are they going to get people like Greg Townsend back involved in the government?
0:24:22 So this is, this is yet another example of how we are not thinking, how we are taking, we have taken for granted what an outstanding organization.
0:24:33 And people are so angry that they don’t understand that organizations like this, the culture, the engine room is really hard to replace.
0:24:35 It’s not like turning off and on a switch.
0:24:43 Even if we get the right people back in charge, the damage here is going to be, is going to be lasting for a while.
0:24:44 Any thoughts?
0:24:45 No, I agree with you.
0:24:52 And we also took away a central plank of why government work appeals to people, which is the consistency.
0:24:59 And that you are someone at least protected by being part of the government, right?
0:25:17 This is a place where you can make a good living, you can set up camp, like you said, you can meet someone, fall in love, have kids, live in a pretty nice place, and also know that you should be able to continue to be employed as you go through your career, that you can be there 10, 20, 30, 40 years.
0:25:22 And it was a real career in the sense that I feel like folks don’t have anymore.
0:25:27 I remember when I was graduating college, my dad was like, okay, well, what do you want to do?
0:25:30 I ended up going to grad school, but I was looking around at all these different fields.
0:25:36 And he said, it doesn’t appeal to you at all to go work at a big American company.
0:25:42 Like, you don’t want to go get in on one of those programs, right, where you start off, you do the first two years.
0:25:49 But he said, even though I wasn’t into, you know, working in defense that way, he’s like, it doesn’t appeal to go work at a company like Boeing, right?
0:25:55 They’re doing super interesting things and that could be a great career and you can bop around within it.
0:25:57 You know, I have friends who are at like Pepsi or Coke, right?
0:25:59 And they’re there for decades.
0:26:04 And I was like, no, it doesn’t really appeal to me that way.
0:26:13 And I ended up having a career thus far where I have hopped around from a bunch of different things, not only just media companies, but, you know, in academia, then out of academia.
0:26:15 I aspire one day to go back to academia.
0:26:24 But working in public service is picking that straight line, right, that you want to be somewhere.
0:26:25 You want to be dedicated to it.
0:26:27 You want to understand the ins and outs of it.
0:26:30 And you also want to fundamentally help people.
0:26:41 And it’s been really interesting from more of a political point of view on this to see what’s going on in these town halls, because I feel like the American public is now separated into two buckets.
0:26:44 You’re either outraged or you’re not.
0:26:48 And it doesn’t really have a party ID connected to it.
0:26:58 So there was a Washington Post editorial, and she went to dueling town halls, one Republican, Mike Lawler, one Democrat, Pat Ryan, who we had on the show and we really like.
0:27:07 But Mike Lawler, a moderate, someone who’s spoken out against the Trump administration, someone who folks talk about as maybe being able to run for governor of New York.
0:27:11 And the town halls were essentially the same.
0:27:17 Those are their Hudson Valley districts side by side because everybody is just outraged.
0:27:20 And these are folks who voted for a Democrat and folks who voted for a Republican.
0:27:26 Social Security, the Department of Education, which we’re going to talk about in a little bit, atop the list there.
0:27:29 How does Doge have access to all this information?
0:27:30 We didn’t talk about that.
0:27:37 That’s the central problem with what Doge is doing, that they’re getting access to private information that actually leads to fraud.
0:27:44 If you’re concerned about fraudsters, look at the 19-year-olds that Musk has with their hands in everything that’s precious to us.
0:27:51 And I think that that is going to be the basic premise for the political landscape over the course of the next three to four years.
0:27:55 Are you outraged or are you fined with what’s going on?
0:28:00 And you’re going to have a lot more people on the outrage side of things than those who think that it’s okay,
0:28:03 even if they think that we are directionally going in the right direction.
0:28:12 Right. Like, is it directionally correct that we are getting undocumented people in our country who are part of a Venezuelan gang that kills Americans?
0:28:14 Yes. Is that right?
0:28:20 But are we outraged that there are innocent people who, you know, claimed asylum through a legal port of entry?
0:28:23 Like, this story about the gay barber from Venezuela.
0:28:26 Tim Miller’s been great on this.
0:28:27 I agree.
0:28:43 There was a time journalist that got into the El Salvadorian prison camp that they sent him to and documented this young man who had a legal asylum claim having his head shaved, crying out for his mother.
0:28:43 His mother?
0:28:43 Yeah.
0:28:47 Go to his Instagram page and decide if you think he’s a Venezuelan gang member.
0:28:53 If gangs were filled with people like this man, I think the face of gang warfare would be changing a lot.
0:28:55 So are you outraged over that?
0:29:01 I know a lot of people who agree with Trump’s immigration plans and know that we need to fix the border.
0:29:08 Even Bernie Sanders was on with Jonathan Karl over the weekend, and he said that he thinks that Trump has done net-net a good job on immigration,
0:29:11 that we don’t have this massive flow of illegal immigration anymore.
0:29:14 But are you outraged about something like that?
0:29:17 Or the 54-year-old guy, American, that I talked about who was detained?
0:29:18 Yeah.
0:29:20 And that will hopefully unite more people.
0:29:21 Yeah.
0:29:28 So I couldn’t get past your career journey from academia to the private sector, and now you’re on The Five and doing a pod with me.
0:29:29 What went wrong?
0:29:31 What went wrong?
0:29:31 Okay.
0:29:33 Let’s take a quick break.
0:29:34 Stay with us.
0:29:40 Support for the show comes from SelectQuote.
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0:30:51 Today Explained, Sean Ramos from here with Nadira Goff, staff writer at Slate.
0:30:54 Nadira, Disney’s got a new movie coming out this week.
0:30:55 Is everyone enchanted?
0:30:56 No.
0:31:04 I think that there is a lot of confusion and a lot of controversy around Snow White.
0:31:06 Magic mirror on the wall.
0:31:08 Who is the fairest of them all?
0:31:12 But, yeah, it’s safe to say that not everyone is enchanted.
0:31:14 This was my father’s kingdom.
0:31:16 A place of fairness.
0:31:20 But the queen changed everything.
0:31:25 Now, I have to ask, as a student of the Brothers Grimm, how many controversies are there?
0:31:27 Well, you’re in luck.
0:31:32 You’re so lucky today is your lucky day because there happens to be about seven.
0:31:33 Oh, my goodness!
0:31:37 It’s a human!
0:31:38 What did you think I was?
0:31:39 Nothing goes!
0:31:43 Snow White and the seven controversies on Today Explained.
0:31:44 Come have some fun with us.
0:31:46 You deserve it.
0:31:48 Welcome back.
0:31:52 President Trump signed an executive order to begin dismantling the Department of Education,
0:31:54 a long-held conservative goal.
0:31:59 While he needs Congress to fully eliminate the agency, his administration is already moving key functions,
0:32:04 student loans to the Small Business Administration and special education programs to health and human services.
0:32:08 critics argue this will gut protections for students, especially those with disabilities,
0:32:12 while supporters say it will cut bureaucracy and return control to the states.
0:32:18 Jess, what immediate impact do you think this will have on students, schools, and families,
0:32:22 especially with layoffs hitting the Department of Education?
0:32:26 It’s going to, as with everything that they’re trying to do, make it harder to use.
0:32:30 So there’s this chart that’s floating around social media.
0:32:37 It starts with claim it’s broken, goes to justify cuts to it, cut essential services, make it harder to use.
0:32:42 And they want to make the government impossible to use.
0:32:49 And because I guess it doesn’t affect them personally, even though I assume they just haven’t spoken to anyone
0:32:56 who might have a kid with disabilities or that they know anyone who’s poor, as Howard Lutnick has demonstrated,
0:33:02 they don’t understand some of the good that the Department of Education does.
0:33:06 And they are, again, to go back to the idea that they are mean and lazy.
0:33:11 I do wonder how many people who are saying that they want to get rid of the Department of Education
0:33:15 thinks that the Department of Education is the one that sets the curriculum, because they aren’t.
0:33:17 That’s done on the state level.
0:33:18 Yeah, they don’t do that.
0:33:18 Exactly.
0:33:24 But when they talk about critical race theory or DEI in your classrooms, exactly.
0:33:31 They are throwing everything that they don’t like into this bucket, even though it’s completely irrelevant to it.
0:33:35 And you listen to people like Sarah Huckabee Sanders, the governor of Arkansas,
0:33:44 Arkansas, which has one of the lowest rated education systems in the country, talking about the DOE as if it’s not actually her fault that the kids in her state.
0:33:50 Have like the 48th or 49th worst, you know, educational attainment.
0:33:57 So I think this is an opportunity, going back to what you were saying about Social Security, for Democrats to do something positive.
0:34:07 So there’s an education function here that you need to talk to people about how the DOE is actually a funding and civil rights enforcement agency, that this is not about setting the curriculum.
0:34:15 But to do that, you need to also own the fact that education, public education in this country is not up to standard.
0:34:31 And I thought it was really interesting to see the change in how the public views education in this country and who they think would be best to manage it.
0:34:35 Because Democrats used to have a double digit advantage and now it’s essentially tied.
0:34:39 Maybe they have a one or two point advantage based on the poll.
0:34:48 And you saw this in Glenn Youngkin’s election to be the governor of Virginia when Terry McAuliffe came out there and said, basically, your kids aren’t yours.
0:34:49 They belong to the teachers.
0:34:49 No one likes that.
0:34:51 Parental rights is really important.
0:34:53 And in New Jersey, it was a huge issue.
0:34:56 And Phil Murphy, you know, barely got elected there.
0:34:57 I think it was four or five points.
0:34:59 It should have obviously been much bigger.
0:35:03 So Democrats really need to find a way to own this space better.
0:35:07 And that will include admitting some of your own failings.
0:35:14 And frankly, I think going after Randy Weingarten and the teachers unions, at least to some degree, obviously not saying we want to break up the union.
0:35:18 Unions are an incredible force for good in people’s lives.
0:35:20 And they built out the middle class.
0:35:22 You don’t have a middle class without them.
0:35:35 But I think that there has to be more ownership of what happened during COVID, that these schools, the public schools, especially the ones that serve, are least fortunate and needed them to be open the most, were closed when we needed them.
0:35:38 And now we’ve lost, I mean, I’m sure you’ve seen these stats.
0:35:44 There are millions of kids that are just lost, that disappeared from the public school system and never came back.
0:35:51 Yeah, I went into ChatGPT and I asked if you wanted to destroy America or undermine democracy, what would you do?
0:36:00 And it gave me, it was really interesting the things that came back with, including have algorithms on social media to get people fighting with each other over non-important issues.
0:36:06 But one of the things that came up was said, slowly erode public education such that people aren’t critical thinkers.
0:36:12 And I’m like, I started reading all these things and it was sort of frightening that, okay, that kind of feels like what we’ve done the last 20 years.
0:36:15 So I’m of two minds on this.
0:36:17 First, just a bit of a tangent on unions.
0:36:21 I acknowledge that unions are an important part in American history.
0:36:25 I think they’ve become ineffective with a sprinkle of corruption.
0:36:27 I don’t think we should have unions.
0:36:29 I think they are a failed construct.
0:36:33 I’m not, people have the right to organize, but I think they’re ineffective.
0:36:37 And the states that allow them are the states that need them the least.
0:36:39 And the states that don’t allow them are the ones that need them the most.
0:36:44 We should have one union, it should be the federal government, $25 an hour minimum wage, get rid of all the corruption, the waste.
0:36:47 UAW, current CEO, super smart.
0:36:50 First, last CEO in jail, one before him in jail.
0:36:59 And Randy Weingarten, in my opinion, used teachers as drug mules to try and exploit schools during the weakest moments during COVID rather than focusing on the kids.
0:37:02 Anyway, thank you for my union TED Talk.
0:37:07 The Department of Education, I would argue, needs to be radically reformed and possibly reduced.
0:37:10 And it’s about 4,500 people right now.
0:37:13 It’s in charge of enforcing civil rights laws.
0:37:16 And there are some really important things here.
0:37:23 If your kid’s disabled, the Department of Education makes sure that a bus that’s handicap accessible will show up and get that kid to school.
0:37:28 They ensure that there are the laws enforced that a kid will get a hot line.
0:37:30 I mean, they do important work.
0:37:33 They also oversee student loans.
0:37:35 I would argue that system needs to be reformed.
0:37:44 I think one of the reasons you’ve seen an escalation in student tuition at 4X, the price of inflation is the access to cheap capital.
0:37:51 And I know that sounds harsh, but I think offering kids cheap, easy credit for shitty schools does not have good outcomes.
0:38:00 And then suspending student loan payments just creates moral hazard where a nice lady in a pantsuit with a logo behind her saying, you always get a return when you invest yourself.
0:38:02 Just sign here because they get a check right away.
0:38:10 And not putting schools on the hook for student loans has resulted in just a massive escalation in tuition costs.
0:38:18 So I think the Department of Education, I mean, I’m torn here because I’m also the beneficiary of Pell Grants, and that kind of saved my ass.
0:38:23 I came from a household that was in the lowest or lower quartile or lowest quartile of income, so I got unfair advantage.
0:38:24 I got grants.
0:38:41 And so I feel some obligation, but the DOE of all of these or many of these institutions, I would argue, if you have a thoughtful argument for pushing funds out to low-income areas that needed help, okay, I get it.
0:38:43 And getting rid of federal bureaucracy.
0:38:49 And also, the Department of Education oversees this mandatory national testing, which was a good idea, and it ended up not working.
0:38:50 Teachers hate it.
0:38:51 Parents hate it.
0:38:52 Students hate it.
0:38:54 It kind of isn’t working.
0:38:58 And it’s taking valuable time away from just trying to lift kids up.
0:39:04 So I do think that’s a department that warrants a radical audit.
0:39:07 The problem is they, you don’t trust them.
0:39:08 They’re bad actors.
0:39:09 They’re not trying to help kids.
0:39:24 They’re trying to just gut the system and do away and implement their own sort of, and they say they’re going to replace it with vouchers, which is nothing but a transfer of wealth from the lower middle-income households to you and me who don’t need money for our kids to go to school.
0:39:37 It even reminds me of the debate on a woman’s rights to pregnancy where we’re not even willing to have a conversation around whether there should be restrictions in the third trimester because, like, we can’t trust the other side.
0:39:40 They’re using that just as a cudgel to outlaw all of it.
0:39:54 And the Department of Education, in my opinion, is probably a department that if they put in place more local assurances around funding, especially in low-income areas, you could see, quite frankly, doing away with it.
0:39:55 But no one trusts them.
0:39:58 No one thinks you’re actually concerned about our children.
0:40:07 No one says, all right, are you really being an honest broker here around ensuring our kids have access to some decent education?
0:40:15 And again, the mother of all own goals, the districts that need this the most are the ones that are, like, rooting them on.
0:40:28 It’s like, I mean, I hate to say it, but look at what happens when you’re no longer getting your Medicaid, there’s no longer a school within driving distance, and there’s no one to enforce it.
0:40:34 Your kid that is severely autistic, there to enforce that this kid has a place to go to school.
0:40:39 It’s like, folks, be careful what you’re asking for here.
0:40:47 So I don’t, I feel like the Department of Education was ripe for reform, that this is just people who aren’t sincere about helping kids.
0:40:52 Yeah, well, that’s the theme, right, of everything that’s going to go on for the next few years.
0:41:02 If you have bad actors in positions of power, I’m going to dig in and say you can’t have access to anything because you’re not going to be doing this in a responsible, well-intentioned way.
0:41:11 And the Department of Education is already one of the smallest cabinet departments, $268 billion a year, 4% of the U.S. budget.
0:41:16 McMahon, Linda McMahon, who is in charge of it, wants to cut staff by 50%.
0:41:25 So I don’t know what the right number is in terms of cuts to keep it functioning, or at least the key things that it does functioning.
0:41:27 But that feels really scary to me.
0:41:38 And when they say, oh, we’ll just shift the things that we do that are important, like Title I funding, or making sure that we’re protecting disabled kids to other departments, they say, oh, we’ll send that over to the DOJ.
0:41:44 No thank you to Pam Bondi being in charge of these kinds of policies.
0:41:46 I don’t know her personally.
0:41:48 Maybe she’s perfectly nice.
0:42:00 But I don’t get the vibe off of her that she cares at all or that there’s anyone in a kind of top lieutenant role that understands how important it is that those dollars get to those kids.
0:42:12 In February, there was a group of top education officials from GOP-controlled states that took a meeting with Linda McMahon, and they want this money as block grants, right?
0:42:15 They want to say, send it back to the states, and we’ll deal with it.
0:42:17 So your point about vouchers is well taken.
0:42:29 And we talked about this a few weeks ago, and I got some really thoughtful feedback from people who live in red states explaining to me what would actually happen if we moved to a voucher system where they are.
0:42:47 So not only would kids not have a school option anywhere near them, and they’d end up priced out of the private schools anyway, but that it was a move to get people into religious schools to be able to turn, you know, one nation, quote unquote, under God into the policy across all areas of life.
0:43:02 And I hadn’t seen this quote before, this is from Betsy DeVos, who was the former Trump education secretary, who openly called it advancing God’s kingdom, that that was the plan for how they wanted to do education in this country.
0:43:21 So I hear that, and then I think about even what I was saying about vouchers, like, should there be some optionality, especially during a once-in-a-century global health pandemic, that you should be able to get $78,000 to be able to go to the Catholic school down the street, or to the temple down the street that has a good program.
0:43:25 And that scares the living daylights out of me.
0:43:36 The Oklahoma superintendent wanted $3 or $4 million to buy Trump Bibles, because, of course, everything is branded and everything’s a grift, to put those in the schools in Oklahoma.
0:43:52 And so if you hand the keys over to these religious zealots that have demonstrated no care or concern for the children who need a good public education the most, I feel that I can’t abide by that.
0:44:00 And I’m going to become even more dug in about the Department of Education, which probably does need some level of reform.
0:44:02 And this has been going on since Reagan, right?
0:44:07 It went in under Jimmy Carter or became through the act of Congress that it was created.
0:44:08 And we should note, it can’t be abolished.
0:44:11 That has to go through Congress, and that will never happen.
0:44:15 But starting just a year later, Reagan is crusading on this.
0:44:21 And every Republican since then has been making its goal to abolish it.
0:44:29 But Trump is clearly showing that he will spend his last term or, you know, hopefully his last term.
0:44:38 I don’t know what he’s certainly going to declare something funky can go on at the end of this, but to destroy every aspect of the federal government.
0:44:43 I think the kind of the strategy or the thing that unifies everything they’re doing is the following.
0:44:49 I think they’re trying to turn America into an operating system that just transfers wealth from the bottom 99 to the top 1 percent.
0:45:05 And this is yet another example, because if you send your kids to private school, you want to literally starve all public education of all funds such that you have more money for other things that you benefit from, whether it’s tax cuts or investments in technology or investments in infrastructure.
0:45:12 So I think about 10 percent of U.S. households send their kids to private schools, which is probably less than most people think.
0:45:19 But once you get into the top 1 percent, see above the tail wagging every dog here, about half those households send their kids to private schools.
0:45:29 And that’s even misleading, because if you’re a household in Woodside, if you send your kid to the public school in Woodside or in Portola Valley, it’s a private school, folks.
0:45:30 Let’s be honest.
0:45:49 So this is just transparently saying we don’t want to pay for anything that will primarily affect the bottom 99.
0:45:52 And the top 1 percent, this doesn’t mean anything.
0:45:55 Your kids don’t need a public school.
0:46:01 Your kids, you have the resources to ensure that your kid has the special ed he or she might need.
0:46:04 You don’t need to worry about how your kid gets to school.
0:46:13 And literally everything they’re doing is like, OK, how do we tilt everything from the bottom 99 to the 1?
0:46:15 I just see that as another example here.
0:46:16 It’s the strategy behind everything.
0:46:20 It’s the explanation behind, I think, almost every activity.
0:46:30 It’s the decided America is an underlying engine to try and create prosperity or more prosperity for the top 1 percent, which, folks, spoiler alert.
0:46:40 I mean, the NASDAQ and the Dow Jones, which we’re obsessed with, they’re basically just a litmus test for how the top 1 percent are doing, who own 80 to 90 percent of all outstanding equities.
0:46:40 And guess what?
0:46:42 They keep hitting record highs.
0:46:56 Everything we do right now, I would say, in America, and Trump, to a certain extent, encapsulates this, is how do we cut services from the bottom 99 such that we can provide more money and more opportunities for the top 1 percent?
0:47:08 Yeah, to add to that, I saw the CBO releasing the data on the implications for the revenue we’re going to collect with the cuts to the IRS, another $500 billion into the deficit.
0:47:11 And guess who’s not going to have to pay their taxes?
0:47:17 The wealthy who can navigate around the system, who don’t actually need to get an IRS agent on the phone.
0:47:24 And I don’t want to hear ever again from the right about the debt or the deficit.
0:47:26 I’m just over it.
0:47:42 If these tax cuts are going to go through, which is going to be trillions over several years, what is it, the $800 billion a year adding to the deficit, and things like getting rid of the IRS so we can’t even pretend that we’re going to collect money from folks who are prone to tax cheat.
0:47:43 Just, like, save it.
0:47:55 And Alan Simpson, who died last week, I was reading again about the Simpsons-Bulls Commission, and, like, people would be laughed off the stage if they tried to do something like that again.
0:47:58 And, I mean, it didn’t even work when they first tried it.
0:48:04 But now I feel like it’s just a massive joke that anyone is actually concerned about the deficit.
0:48:07 Well, to your point about, and this is my favorite thing, taxes.
0:48:08 Aren’t you a hoot?
0:48:09 I know.
0:48:10 I’m fond of parties.
0:48:13 But what other department do you give $1 to?
0:48:15 And within a year, they give it $12 back.
0:48:19 And the Republicans don’t want to claim that, like, they’re harassing people.
0:48:20 They’re not harassing anyone.
0:48:24 IRS agents are overworked and trying to figure out a way just to get people to pay the taxes they owe.
0:48:30 And what happens when the tax code goes from 400 pages to 7,600?
0:48:33 Those incremental 7,200 pages are there to fuck the middle class.
0:48:42 Because what they are is full of all sorts of loopholes and Byzantine means of corporations in the top 1% being able to engage in massive loopholes and tax avoidance.
0:48:45 And when you have an IRS, AI will help.
0:48:53 But AI will be able to start from the bottom and audit, in a millionth of a second, someone’s fairly simple tax return, i.e. a middle-class household.
0:49:06 Once you get to people who are in the top 1% making $700,000 a year or have net worths of over $10 million, their tax returns purposefully get really complex.
0:49:14 And you need highly skilled, well-resourced, and expensive groups of people to hold those people accountable.
0:49:16 And this is what’s happened with our tax code.
0:49:20 It’s created an incentive of the following, an incentive structure of the following.
0:49:29 If you’re really, really wealthy or you’re a corporation, the incentive is to be absolutely as aggressive as possible.
0:49:43 If you’ve got a parking meter in front of your house that costs $50, but the ticket is $10, you’re going to break the law or you’re going to be as aggressive as possible.
0:49:53 And our current tax system, as it relates to the wealthiest Americans, basically incents them to be as aggressive as possible in terms of what they write off.
0:50:03 Because A, probably there’s no sheriff in town, there’s a lack of agents, and B, even if the sheriff shows up, the penalties are fairly minimal.
0:50:12 So the notion, and then this trope that somehow the good people of the IRS are mean or harassing people.
0:50:13 No, they’re not.
0:50:19 They’re trying to make sure that people pay what they’re supposed to pay, such that we can afford SNAP food payments and the Navy.
0:50:24 So, again, another example, cutting funding from the IRS.
0:50:27 Who does that benefit the most, cutting funding of the IRS?
0:50:31 Does it benefit all taxpayers who are aggressive?
0:50:31 No.
0:50:34 It benefits the top 1%.
0:50:35 Full stop.
0:50:37 See above my unifying theory of everything, Jess.
0:50:41 I do like that you’ve reduced it all to one short TED Talk.
0:50:42 Break it down.
0:50:43 That’s why I’m here.
0:50:45 All right, let’s take one more quick break.
0:50:46 Stay with us.
0:50:54 Hit pause on whatever you’re listening to and hit play on your next adventure.
0:50:57 Stay two nights and get a $50 Best Western gift card.
0:50:58 Life’s a trip.
0:51:00 Make the most of it at Best Western.
0:51:03 Visit bestwestern.com for complete terms and conditions.
0:51:06 Welcome back.
0:51:06 I just want to call out.
0:51:12 You are entering that stage with little kids where you are going to be, you’re going to have a cold for about the next 10 years.
0:51:12 Thank you.
0:51:18 And I apologize to our listeners that I’m just like snotting through all of our conversations.
0:51:19 It’s crazy.
0:51:21 We were at the pediatrician yesterday.
0:51:27 The baby had crazy hives all over her body, but we thought it was…
0:51:27 Oh, I’m sorry to hear that.
0:51:28 It’s okay.
0:51:29 Zyrtec.
0:51:30 Kid Zyrtec.
0:51:30 Fantastic.
0:51:32 And she woke up without it.
0:51:33 Basically got rid of everything.
0:51:36 But we thought it was hand, foot, and mouth.
0:51:39 And I was having a meltdown.
0:51:40 Did the boys ever have that?
0:51:43 No, but their parents had a lot of meltdown.
0:51:46 So it’s really a…
0:51:49 I think mothers, I think women may know this is going to happen.
0:51:58 I don’t think most dads realize the panic and stress you’re going to feel when one of your kids is not doing well.
0:52:00 I mean, something…
0:52:05 God really does reach into your soul and turn on a switch that says, not only are you going to love this thing,
0:52:11 but you are not going to be able to relax for a millisecond when your kid isn’t doing well.
0:52:15 The few times my kids have not have had a health issue…
0:52:20 I mean, I remember when my son had a breathing issue or a respiratory issue and we would…
0:52:21 He would do go on this.
0:52:22 I forget what we call it.
0:52:26 A breathing mechanism that they would put medicine in it and he would breathe through this thing.
0:52:30 And I was so freaked out that the medicine had gone bad and somehow I might be like…
0:52:31 Poisoning him.
0:52:31 Yeah.
0:52:33 You get so paranoid, so neurotic.
0:52:40 And I’m not someone who, at least until the last few years, was ever neurotic or worried about anything.
0:52:47 And then Ted Sarandon’s wife wrote this book and I love this statement that grief is the receipts for love.
0:52:53 I think anxiety is the receipts for kids because you do get a lot of joy from them.
0:53:01 But anyways, I feel for you because I never, ever anticipated the type of crazy stress.
0:53:06 I mean, when your kid does break out in hives, there’s no like, oh, it’ll probably be fine.
0:53:07 It’s like, what the fuck?
0:53:10 Like, get to the emergency room.
0:53:13 Or even how you would treat yourself, right?
0:53:14 I’m like, eh, no, it’s fine.
0:53:15 I’ll just go to work, right?
0:53:16 Whatever.
0:53:17 Man up.
0:53:18 I’m like, he’s big and strong.
0:53:19 Everything’s going to be fine.
0:53:25 And then, you know, your little almost one-year-old has these huge splotches all over her.
0:53:28 And you’re like running around the house like a crazy person.
0:53:29 Like, did you see this one?
0:53:30 Did you see this one?
0:53:34 And, you know, anyway, pediatricians are saints also.
0:53:37 And all the nurses that work there as well.
0:53:39 One of the lowest, actually, of course, one of the lowest paid providers.
0:53:40 Let’s back to me.
0:53:43 Did you know when I applied to UCLA, I thought I was going to be a pediatrician?
0:53:44 That’s what I put in my application.
0:53:44 Really?
0:53:45 Yeah.
0:53:47 And then chemistry disavowed me of that when I got a D in it.
0:53:50 Sent me from South Campus to the North Campus.
0:53:52 You would be such a weird pediatrician.
0:53:54 Just your vibes.
0:53:54 Thank you for that.
0:53:55 I guess they would be different.
0:53:57 I’m good with kids, actually.
0:53:58 I’m shockingly good with kids.
0:54:05 Anyways, but it sent me from South Campus to North Campus, where the people were much hotter
0:54:08 and the parties were much better than the South Campus.
0:54:09 So everything worked out for you.
0:54:10 Everything worked out.
0:54:13 But I actually thought, I actually believed I was going to be a pediatrician for about a year.
0:54:19 Anyways, before we go, we’re getting clear insights into what happened in the 2024 election.
0:54:30 Blue Rose research’s analysis shows that key voter groups, including Hispanic, Asian, young, and disengaged voters, shifted towards Trump, mainly due to his perceived strength on economic issues, including inflation and the cost of living.
0:54:34 Despite concerns over democracy, voters felt Trump was the better option.
0:54:40 Now, with Trump’s popularity dropping, the Democratic Party is left scrambling, unsure about their identity and next steps.
0:54:47 The analysis reveals that if those who stayed at home had voted, Trump would have won the popular vote by almost five points.
0:54:52 While Trump’s favorability remained steady, Vice President Harris and the Democratic Party saw significant drops.
0:55:00 And voters cared most about issues where Dems lost trust, like the economy and inflation, though they still trusted them more on health care.
0:55:03 Jess, this is kind of your wheelhouse.
0:55:06 Which findings from the Blue Rose data really caught your eye?
0:55:09 Any surprises or patterns that stood out to you?
0:55:14 I mean, the pattern that stands out to me is that it’s real bleak.
0:55:26 I was expecting at least something that felt like a sunny day, and it was all a torrential rainstorm of information coming down.
0:55:32 I listened to David Shore on with Ezra Klein, and I don’t know, I guess now because of how prevalent podcasts are.
0:55:34 And again, thank you to the listeners.
0:55:41 It’s great that you’re paying attention to what we’re talking about, like that that’s the best way that I’m absorbing information at this point.
0:55:45 And I was walking, listening to it.
0:55:58 And I didn’t actually shed a tear, but I felt my ducks start to activate as David Shore kept bringing out chart after chart and saying to him, like pointing at something and saying, you see this quadrant?
0:56:00 We have nothing in this quadrant.
0:56:03 And it was like the success quadrant, right, of the chart.
0:56:17 Things that stuck out in particular, the idea of if we vote, we win is now over is deeply problematic because I also don’t want to become the party who wants folks to stay at home.
0:56:19 Like that was always the Republicans thing.
0:56:26 And now I guess it has to be our thing, because if we all vote, we lose and we lose by a lot.
0:56:35 I mean, the idea that Republicans could win a popular vote by 4.8 percentage points then won the popular vote in 20 plus years anyway.
0:56:40 But like that’s our thing, right, that folks turn out to vote and we do super well.
0:56:41 So that’s over.
0:56:42 Everybody, please stay home.
0:56:44 I’m for disenfranchisement now.
0:56:46 I’m I’m just kidding.
0:56:47 I’m not.
0:56:50 We’ll fix it and we’ll make it so that we win back the voters.
0:56:51 But that was deeply concerning.
0:57:07 The one that really stood out, because I feel like it flies in the face of everything that we thought about the way Trump was campaigning and how people were receiving his message, was this change that Biden won the immigrant population vote by 27 points.
0:57:12 And it looks like Trump won it by one this time, like that level of a swing.
0:57:13 28 point swing, yeah.
0:57:13 Yeah.
0:57:18 Especially when the guy is out there, you know, they’re eating the cats and the dogs.
0:57:26 And, you know, Puerto Rico is just a floating island of garbage and all the xenophobia.
0:57:27 And.
0:57:31 It didn’t matter at all.
0:57:35 And obviously, this is different amongst, you know, various immigrant populations.
0:57:41 And we always know that there are more conservative groups like the Cubans, for instance, have always been that way.
0:57:44 But it feels like we’ve been going through.
0:57:49 20, 30 years of a particular political reality.
0:57:52 And now it has been completely upended.
0:57:58 And this idea that we are trying to, quote unquote, rebuild the Obama coalition has to go out the door.
0:58:08 It is dead and buried at this point when you lose, you know, some polls, you know, 12 to 24 percentage points with Latino voters.
0:58:13 You’re not rebuilding anything, even if you get some of those folks back.
0:58:24 So we have to do a full burn it down strategy that’s really focused on attracting working class voters back of all races and ethnicities.
0:58:28 But I don’t know if we’re going to win national elections again.
0:58:30 It’s going to look wildly different.
0:58:35 And David Shore was pointing out that we did surprisingly well in the Senate map.
0:58:38 And we had good candidates and they had bad candidates.
0:58:44 And that has been a feature of the Trump era that he goes and he backs people that can’t win elections.
0:58:46 And we get lucky because of that.
0:58:51 Like Ruben Gallego, who we have on the podcast this week, actually going to interview him.
0:58:55 He won in Arizona where Trump won Arizona by five points.
0:58:58 Now, he was running against Cary Lake.
0:59:00 Are they going to run Cary Lake again?
0:59:01 I don’t think so.
0:59:04 Or a Cary Lake adjacent type person.
0:59:10 And a lot of that is for what the world looks like in a post-Trump era, you know, 2028 and beyond.
0:59:13 But deeply concerning is how I felt.
0:59:15 How did you feel looking at the data?
0:59:16 Well, I love this stuff.
0:59:18 But, you know, I like to bust the solutions.
0:59:24 In my view, even the poll is the problem with the Democratic Party’s platform.
0:59:30 And that is, in my view, how you get Latin voters back or Hispanic voters back is you stop talking about them.
0:59:33 The way you get black voters back is you stop talking about them.
0:59:34 And what do I mean by that?
0:59:40 The Democratic Party has to make it verboten to continue to engage in identity politics.
0:59:45 And they should focus on the economy through the lens of the middle class.
0:59:54 There’s been too much advantage crammed into the most advantage group in America right now are non-white children of rich people.
1:00:03 Because we have based affirmative action on race and our entire politics in the Democratic Party through identity.
1:00:07 And it made sense 20, 40, 60 years ago.
1:00:12 The academic gap between black and white 60 years ago was double what it was between rich and poor.
1:00:13 And now it has flipped.
1:00:16 And the swing voters have one thing in mind.
1:00:18 Swing voters have the economy in mind.
1:00:25 And this is the opportunity because it’s dynamic, meaning some cycles people see Democrats as better on the economy.
1:00:27 Some Republicans as better on the economy.
1:00:32 And what the Democratic Party, in my view, needs to do is say, look, we are going to restore the middle class.
1:00:36 The most prosperous nation in the world should have the following table stakes.
1:00:46 Young people need the venues, opportunities, and means to meet someone, fall in love, and should they desire, own a home and have kids.
1:00:53 So we’re going to have mandatory national service, more freshman seats, vocational programming, more interaction for less anxiety.
1:01:02 We’re going to have 7 million manufactured homes in cool little areas that cost 30 to 50 percent less than homes built on site.
1:01:03 We’re going to make it affordable.
1:01:06 We’re going to have low interest rate loans for anyone under the age of 40.
1:01:09 We’re going to have a tax holiday for anyone under the age of 30.
1:01:11 We’re going to have $25 an hour minimum wage.
1:01:15 And if you don’t want to get married and you don’t want to have kids, fine.
1:01:17 You can spend all that money on brunch and St. Bart’s.
1:01:28 But we are going to get out of this lens of trying to shove advantage and talk about the needs and the wants and the injustice of people based on their gender, their sexual orientation, or their race.
1:01:32 And we’re just going to say we are here to reverse engineer everything we do to the following.
1:01:43 The middle class in America and young people are going to have the opportunity to be able to have kids and have a home and live in relative prosperity.
1:01:45 And these are the 8, 10, 12 programs.
1:01:56 And stop rolling out every special interest group, which all it says to the 24 percent of people that don’t qualify for a Democratic special interest group, that we’re not going to discriminate against you.
1:01:59 We’re about the poor and the middle class rising up.
1:02:00 That’s it.
1:02:01 That’s your only identity politics.
1:02:04 Because even these polls are like, how do we get Hispanics back?
1:02:06 No, you don’t want Hispanics back.
1:02:08 You want the middle class back.
1:02:12 And you want to stop telling people you should vote for me because you’re Hispanic and I’m better for you.
1:02:15 Hispanics don’t want you to talk about them as a group.
1:02:21 Try and group Mexican-Americans in Los Angeles into the same group as Cuban-Americans in Florida.
1:02:23 They have entirely different priorities.
1:02:31 And the notion that the daughter of a Taiwanese private equity billionaire needs affirmative action is just fucking stupid.
1:02:36 All of our programs should be focused on color, specifically money.
1:02:39 If you don’t have money in America, you need more.
1:02:44 And corporations in the top 1 percent should be paying a lot more.
1:02:47 Lowest taxes in history for corporations since 1939.
1:02:51 25 wealthiest Americans paying an average tax rate of 6 percent.
1:02:57 And everything that has happened over the last 30 years is an attempt to cram more money into the top 1 percent of corporations.
1:03:02 But for God’s sakes, get away from these polls and this discussion of how do we get black voters back?
1:03:04 No, how do you get the middle class back?
1:03:06 Stop the identity politics.
1:03:09 I want to agree with something and then I want to disagree with something.
1:03:12 So definitely color green, most important.
1:03:17 91 percent of voters said cost of living was their top issue.
1:03:24 There’s an argument to be made that incumbents lost all over the globe and Kamala Harris was also an incumbent.
1:03:34 She was Biden-Harris administration and as an interesting corollary, Mike Donilon, who’s top advisor to Joe Biden, was speaking about what happened in the election.
1:03:38 And he said it was crazy that they pushed Biden out.
1:03:43 I think that the party went insane and we all thought that that was crazy, right?
1:03:52 Like that we breathe new life into the campaign, getting Kamala out there and we would have lost by, you know, he Trump could have won 400 electoral votes if it had been Biden.
1:04:01 But the way that favorability ended when we went into Election Day, Kamala was negative six and Biden was plus six.
1:04:04 Now, would that have drifted down further had he stayed the candidate?
1:04:04 Possibly.
1:04:05 But it was interesting.
1:04:09 David George kind of entertained the premise that Mike Donilon wasn’t insane.
1:04:13 On the identity politics front, I agree with you in general.
1:04:21 I’m not mad about the idea that we move away from having all of these special interests conversations.
1:04:29 But you use Black voters, for instance, where Kamala Harris was trying really hard to just have an agenda for all Americans.
1:04:34 Her best testing ads were ones that appealed to everybody in the lower and middle classes.
1:04:37 She wasn’t necessarily going after the wealthy voters.
1:04:39 She said, you know, you’ll just come with me.
1:04:41 And that is what ended up happening.
1:04:48 But then she had to go and do a town hall with Charlemagne on the breakfast club for Black men.
1:05:00 She had to release an agenda for Black men because she was hearing from all of her key stakeholders that Black men in particular didn’t think that she had any proposals specifically focused on them.
1:05:07 So what do you do about that when you’re trying to run a general campaign where the economy is your central issue?
1:05:11 These are the kind of policies that I’m implementing to help you.
1:05:12 I want to build more housing.
1:05:14 I want to go after price gouging.
1:05:17 Those hugely popular policies.
1:05:22 And yet a target demo comes back to you and says, well, what’s in it for me?
1:05:27 You haven’t told me specifically with my name on it, like the Black man agenda.
1:05:29 What do you do?
1:05:30 I think you have your sister soldier moment.
1:05:32 And I say, you grow the fuck up.
1:05:34 I’m not here to play identity politics.
1:05:36 I’m here for young people.
1:05:42 Programs to focus on young people would right now disproportionately impact and benefit young men who are struggling.
1:05:47 It would disproportionately impact young men of color who are really struggling.
1:05:55 And look, Democrats need to come out of the closet and acknowledge the following data and truth in America.
1:05:56 And that’s the following.
1:05:59 You would rather be born today.
1:06:02 And this is a victory we should celebrate.
1:06:07 You’d rather be born today, non-white or gay than poor.
1:06:09 And that’s great.
1:06:11 That’s a sign of our victory.
1:06:13 So who are we going to help?
1:06:18 We’re going to help the poor and we’re going to help young people.
1:06:28 And by the way, the way you calm special interest groups down who are used to Democrats showing up and pandering to them is you say, folks, do the math.
1:06:38 There’s a 70% overlap between many of the special interest groups who count on the Democratic Party to represent them and poor and middle-income households.
1:06:46 As MLK said, if you don’t bring along the white poor, you’re never going to make that much progress because it creates resentment.
1:06:54 It also creates accidental racism where when you’re at a school or anywhere, you immediately look at someone left and right and think, okay, did they get in?
1:06:57 54% of gay men, 54% of gay men are attending college.
1:06:59 It’s 38% of straight men.
1:07:12 I mean, at some point, we just have to acknowledge the data and be the party of the middle class instead of rolling out every special interest group and having Michelle Obama, who I adore, go, who’s going to tell them this might be a black job?
1:07:13 That is not helpful.
1:07:13 That is not helpful.
1:07:15 That is not helpful.
1:07:24 And the only people that don’t parade on stage are young men, when they’re, in fact, are the ones who have probably fallen further faster than anyone.
1:07:27 So get away from the identity politics.
1:07:31 The discussion around how we get back Hispanics is only going to alienate more Hispanics.
1:07:34 It’s to say we’ve made tremendous progress.
1:07:42 We are here to lift people up who are poor and make sure the middle class is the most prosperous middle class living in the most prosperous country in the world.
1:07:55 And here are a series of programs, and if you want me to talk about what goodies you get because of the color of your skin or your sexual orientation or whether you have indoor or outdoor plumbing, other than protecting a woman’s rights to family planning, I’m not going to engage in that conversation.
1:07:57 I’m here for the middle class, full stop.
1:07:59 I think that message really resonates.
1:08:04 It gets a lot of moderates back in the fold, and it gets the white poor back in the fold.
1:08:08 And I think a lot of non-whites are absolutely ready to have that conversation.
1:08:15 They’re sick of being categorized and taken for granted that I’ll vote for Democratic because you’re going to throw more goodies at me because of the color of my skin.
1:08:16 Or that the other side is racist.
1:08:19 They don’t think that anymore.
1:08:20 No.
1:08:28 And Trump can point to a bunch of data from 16 to 20 that non-whites actually did okay during his administration.
1:08:33 Now, granted, it was all debt-fueled, which is a tax on young people, but that’s the argument.
1:08:36 We’ve got to stop these deficits.
1:08:39 They’re going to fuck our children in 10, 20, 40 years.
1:08:43 It doesn’t matter what color you are, what sexual orientation.
1:08:45 If we keep running up deficits, you’re all going to be fucked.
1:08:46 That’s the argument.
1:08:48 Now, that’s a sexy message.
1:08:48 Right.
1:08:49 That’s not a bumper sticker, is it?
1:08:50 Yeah.
1:08:51 I can see that.
1:08:54 That’s perfect for Galloway 2032.
1:08:55 We sold out the why.
1:08:57 We sold out the why.
1:08:58 Oh, my God.
1:08:59 I’m so excited about that.
1:09:01 I keep rubbing it in Kara Switch’s face.
1:09:02 I don’t know if you heard.
1:09:02 I know.
1:09:04 I can also hear Pivot.
1:09:05 It is publicly available.
1:09:13 I’m like, I don’t know if you heard, but me and the much younger Jess Harloff sold out the 90-second why in about three minutes.
1:09:15 I’m like, we’ve never done that, have we, Kara?
1:09:21 Well, in Kara’s defense, apparently you’re not open to doing these things.
1:09:23 You don’t want to go to Paris with her.
1:09:24 So I’m going to go to Paris with her.
1:09:25 There you go.
1:09:28 Actually, now all of a sudden I feel a little threatened and a little jealous.
1:09:28 Do you?
1:09:29 Yeah.
1:09:31 I think you guys, yeah, that’s an interesting thought.
1:09:32 Don’t get any ideas.
1:09:35 Remember who discovered you.
1:09:35 All right.
1:09:37 That’s all for this episode.
1:09:38 Actually, I think Rupert Murdoch discovered you.
1:09:39 All right.
1:09:40 That’s all for this episode.
1:09:42 Thank you for listening to Raging Moderates.
1:09:45 Our producers are David Toledo and Chinenye Onike.
1:09:48 Our technical director is Drew Burrows.
1:09:51 You can now find Raging Moderates on its own feed every Tuesday.
1:09:52 That’s right.
1:09:53 What a thrill.
1:09:55 Its own feed.
1:10:03 Folks, we’re doing great, but we need you to subscribe to our own feed so we can hit certain benchmarks and bring in the big advertisers.
1:10:10 That means exclusive interviews with sharp political minds you won’t hear anywhere else if you subscribe to our distinct feed.
1:10:12 This week, Jess, we’ll be talking with Senator Gallego.
1:10:16 Make sure you follow us wherever you get your podcasts so you don’t miss an episode.
1:10:20 Jess, I’m glad that your little girl is doing just fine.
1:10:25 And again, I don’t know if you’ve heard, we’re doing an event at the 92nd Y and we’re sold out.
1:10:26 I heard something.
1:10:27 I also heard we’re sold out.
1:10:27 We are.
1:10:28 We’re sold out.
1:10:28 Thanks, everybody.

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0:01:03 Hey there.
0:01:09 This is Peter Kafka, the host of Channels, a show about tech and media and what happens when they collide.
0:01:16 And this week I’m talking to PJ Vogt, who used to have a big podcast with a big audience and lots of resources.
0:01:18 And then he didn’t.
0:01:20 So he had to figure out how to start again.
0:01:23 I have a lot more appreciation for people who run businesses.
0:01:29 I have spent, you know, years being that like artist baby side of it.
0:01:30 And you’re just like, oh, it is its own art.
0:01:31 It is its own creativity.
0:01:32 It’s really hard.
0:01:37 That’s this week on Channels from the Vox Media Podcast Network.
0:01:41 Today’s number 63,000.
0:01:48 That’s how many pages are in the newly released JFK assassination files, but none of them contain any revelations.
0:01:51 Ed, what do JFK and Bill Clinton have in common?
0:01:51 What’s that?
0:01:54 Both their careers ended with a stained dress.
0:02:08 That’s wrong.
0:02:10 Dark and gross.
0:02:13 Any thoughts on the JFK file, Scott?
0:02:15 How did JFK break his arm?
0:02:16 Oh, a joke.
0:02:16 Good.
0:02:18 How did he break his arm?
0:02:21 By helping Jack off a horse.
0:02:25 I don’t get it.
0:02:27 Jack off a horse.
0:02:29 Break your arm.
0:02:33 That’s not even JFK specific.
0:02:34 Yeah.
0:02:35 Yeah.
0:02:36 I’m reaching.
0:02:37 I’m reaching.
0:02:38 You’re reaching.
0:02:39 You’re scraping the barrel.
0:02:43 By the way, you know, today is a very special day.
0:02:43 Special day.
0:02:44 You know what it is.
0:02:49 I had that same anxiety that when my partner asked me, you know, wakes up, it’s like, oh,
0:02:50 something.
0:02:52 I’m like, happy birthday anniversary.
0:02:56 It’s like, okay.
0:02:58 I’m about to drop a bomb on you.
0:02:59 It’s my birthday today.
0:03:00 Oh, my gosh.
0:03:04 Ed, that’s great because you get your driver’s license this year, right?
0:03:05 Yeah, exactly.
0:03:06 I’m finally eligible.
0:03:07 26?
0:03:07 26.
0:03:12 The first thing I say about you when people ask me about you is I’m like, everyone said,
0:03:14 people say very nice things about you.
0:03:16 And I would say, you know, he’s 25.
0:03:17 And people are like, I know.
0:03:18 That’s so amazing.
0:03:19 So, wow.
0:03:19 26.
0:03:20 That’s not as impressive.
0:03:21 Yeah, not as impressive.
0:03:26 Do you have any advice for me as I enter my 27th year on this planet?
0:03:31 Advice to you at 26, try and get a great shape.
0:03:34 I think every man under the age of 30 should be a fucking monster.
0:03:38 You’ve still got a ton of testosterone and great double-twitch muscle and great bone structure.
0:03:42 And you’re going to spend the rest of your life from 35 on just trying to maintain.
0:03:44 So, get to a really good place physically.
0:03:45 Bulk up.
0:03:45 Okay.
0:03:46 Say yes to everything.
0:03:47 Invest in relationships.
0:03:49 Try and establish as many friendships.
0:03:51 It gets harder to establish friendships as you get older.
0:03:54 So, try and establish as many friendships as you can.
0:03:56 And in the meantime, work around the clock.
0:04:01 Try and get professional trajectory such that you can have economic security by the time
0:04:05 you’re in your 40s and 50s and spend more time with your family.
0:04:09 Any mistakes you made at 26 that I should avoid?
0:04:09 I made a lot.
0:04:12 I think my biggest mistake was I wasn’t as kind as I should have been.
0:04:13 I looked at relationships as a transaction.
0:04:17 If I wasn’t getting as much, I exited the relationship.
0:04:19 I saw my employees.
0:04:26 I started companies from the age of 27 as kind of a transaction where I thought if I’m
0:04:28 not getting more value out of them than I’m paying, I would fire them.
0:04:30 Well, you’ve had a massive turnaround on that.
0:04:31 Yeah.
0:04:34 Now I’m like, no, it’s just the wrong role.
0:04:40 I came of professional age in the Bay Area in the 90s.
0:04:44 And there was this general zeitgeist that if you were talented and nice, it meant you were
0:04:44 talented.
0:04:48 But if you were talented and an asshole, it meant you were Steve Jobs.
0:04:49 It meant you were a genius.
0:04:58 And there was this terrible zeitgeist or cultural norm that being an asshole somehow indicated
0:04:59 that you were super talented.
0:05:00 And I adopted that.
0:05:06 I was never mean, but I could have been a lot kinder professionally with people.
0:05:14 And also personally, I looked at my relationships as a transaction, not as like, how do I end up
0:05:15 on the right side of the ledger?
0:05:21 And then something I did right was I spent a ton of time with my mom.
0:05:24 And I know that sounds sort of lame, but I was very close to my mom.
0:05:25 We spent a lot of time together.
0:05:27 She constantly came, stayed with me.
0:05:29 I constantly stayed with her.
0:05:30 And that was, you know, I’m an only child.
0:05:31 So that was very rewarding.
0:05:33 And we’re really glad I did that.
0:05:36 So I’ll work on getting ripped.
0:05:41 I will try to be nicer and I’ll spend more time with my parents.
0:05:44 I think that’s a good, I think it’s a good list of to-dos.
0:05:46 I’ll check back a year from now.
0:05:47 You’re at a point right now.
0:05:52 So up until the age of like 22, you’re basically a total draw.
0:05:55 You’re a total, you know, liability for your parents.
0:05:57 As a young man, I mean, especially, think about you.
0:06:00 You’re literally out of central casting for parents right now.
0:06:04 And any time you spend with your parents right now, they’re just going to get so much enjoyment
0:06:04 out of.
0:06:11 And, you know, it’s sad, but you don’t, it’s impossible to realize or really register.
0:06:13 It’s impossible.
0:06:15 Have you ever lost anyone close to you?
0:06:17 Just my granddad last year.
0:06:18 Yeah, but that’s natural.
0:06:21 I would say that’s sort of, you’re sort of expecting that and the fact you’ve been at
0:06:21 grandparents.
0:06:25 No, I really, I am very inexperienced with loss and death.
0:06:26 I will say that.
0:06:26 Yeah.
0:06:30 And you don’t realize, especially with your parents, you don’t realize how quickly it
0:06:31 comes when they’re really old.
0:06:35 And I really, that was something I got right.
0:06:36 I spent a lot of time with my mom.
0:06:37 Okay, I like that.
0:06:38 All right, fuck that.
0:06:40 Talk about AI and GDP.
0:06:41 Let’s get on with this shit.
0:06:42 Let’s get on with tariffs.
0:06:48 I just want to remind our listeners that we have a weekly newsletter now for ProfG Markets.
0:06:52 It’s the ProfG Markets newsletter, which breaks down key market moves with data-driven analysis
0:06:59 from me and from Scott and from the ProfG team, including our fan favorite, Mia Silverio,
0:07:01 our research lead at ProfG Media.
0:07:03 And that goes out every Monday.
0:07:09 So I encourage you to go subscribe to that newsletter, go to profgmarkets.com, and you’ll
0:07:12 have the updates every Monday in your inbox.
0:07:13 It’s a great newsletter.
0:07:16 And with that, let’s start with our weekly review of Market Vitals.
0:07:29 The S&P 500 climbed, the dollar increased, Bitcoin broke its losing streak, and the yield on 10-year
0:07:31 Treasuries dipped, shifting to the headlines.
0:07:37 The Federal Reserve held interest rates steady, but raised its inflation forecast for the year
0:07:38 to 2.7%.
0:07:44 They also lowered their 2025 GDP growth projection to 1.7%.
0:07:46 That’s a dip from December’s estimates.
0:07:52 However, the major indices rose as Fed officials pencilled in two rate cuts for the year.
0:07:58 Novak Djokovic’s Professional Tennis Players Association is suing the game’s governing bodies,
0:08:00 alleging that they operate as a cartel.
0:08:04 The organization claims that the men’s and women’s tours, along with the International
0:08:09 Tennis Federation, colluded to restrict competition and limit players’ earnings.
0:08:16 And finally, BYD shares hit an all-time high after the company unveiled a new technology
0:08:20 that fully charges its latest EVs in just five minutes.
0:08:26 The charging system will debut in the company’s new sedan and SUV, both set to launch next month.
0:08:30 Scott, let’s start with your thoughts on the interest rate decision from the Fed.
0:08:35 This is tough because they say that the markets sometimes climb a wall of worry.
0:08:38 And just as we started saying that the markets were really in trouble,
0:08:40 it feels like the last two days they’ve kind of rallied a bit.
0:08:44 But I just saw this as a bit of a nothing burger.
0:08:44 What did you think?
0:08:48 Yeah, I mean, I think you raise rates if inflation is heating up,
0:08:51 and you cut rates if the economy is slowing down.
0:08:54 That’s what these rate decisions are about.
0:08:58 If you don’t know what’s going on, if you don’t have enough data or evidence to support
0:09:01 a move in either direction, you don’t do anything.
0:09:03 And that’s basically what Powell said.
0:09:09 He said, quote, uncertainty is remarkably high, so we’re not going to be in any hurry to move,
0:09:11 and we’ll wait for further clarity.
0:09:15 And this is the same dynamic we discussed last week in the context of companies and the struggles
0:09:20 that they’re facing, where they can’t make decisions because they just don’t know what
0:09:21 Trump is going to do.
0:09:25 They don’t know what the tariffs are going to look like, and they don’t know how supply
0:09:26 chains are going to shift.
0:09:31 And so what you have now is an economy where, from the bottom all the way up to the top, from
0:09:36 Main Street businesses, then to corporations, and then to Jerome Powell at the Federal Reserve,
0:09:42 everyone is stuck in this state of limbo, where it’s kind of like purgatory.
0:09:46 You don’t know if you’re going to heaven or if you’re going to hell, so you just sit around
0:09:47 waiting.
0:09:52 And I think that’s one of the big concerns, that we’ve gone from this economy that is very
0:09:58 active, that does everything, to an economy that does nothing, that has no choice but to
0:10:02 basically just sit around and wait for someone else to make a move.
0:10:09 And I think the other thing to remember here, you know, this was unsurprising that he held
0:10:10 rates steady.
0:10:14 Most economists and most markets and analysts expected this.
0:10:18 But if you look back a few months ago, that was not true.
0:10:23 You know, a few months ago, there were actually a lot of predictions that we would see a rate
0:10:28 cut in March, because a lot of people believed that inflation was getting under control, we
0:10:33 were moving towards that target of 2%, and we might be able to cut rates earlier than we
0:10:34 expected.
0:10:41 And I think the fact that this was so unsurprising to everyone is another indication of where we
0:10:43 are from an inflation perspective.
0:10:47 We’re basically resigned to this notion that prices are going to go up again.
0:10:53 And I think you have to feel for Jerome Powell, who has done an incredible job so far, getting
0:10:55 inflation under control, trying to get to 2%.
0:11:00 He’s been doing this for years now, very diligently, and it’s been working.
0:11:06 And then, you know, Trump makes all these decisions that move everything in the opposite
0:11:06 direction.
0:11:09 He has to be incensed about this.
0:11:16 Trump has thrown a wrench in this whole operation that he’s been working so long to get under control.
0:11:24 And it’s kind of remarkable the way he handles these press conferences, because you know
0:11:25 he’s pissed.
0:11:26 There’s no way he couldn’t be pissed.
0:11:28 People also about the tariffs.
0:11:33 He said, quote, with the arrival of the tariff inflation, further progress may be delayed.
0:11:39 He’s so neutral and so calm about everything, but he just has to be angry on the inside.
0:11:43 But he’s done such a good job of just saying, you know, this is what we’re going to do.
0:11:47 We’re just going to react to whatever the executive branch decides.
0:11:48 And we’ll see what happens.
0:11:55 So it’s sort of a masterclass in, I would say, objectivity, but also stoicism and not showing
0:11:56 your cards.
0:11:58 And maybe we have something to learn from that.
0:12:02 I think the Fed chair has basically one job description, and that is remain calm and carry
0:12:03 on.
0:12:07 It just wouldn’t help if he showed up sweating, freaked out and like, fuck, I don’t know.
0:12:10 It’s I’ve never I’m just I’m totally weak.
0:12:11 I can’t sleep.
0:12:13 I’m I’m so freaked out.
0:12:14 And look at this data.
0:12:16 Jesus Christ, I don’t know what to make of this.
0:12:17 And yeah, maybe I’m giving him too much credit.
0:12:22 If you want someone to kind of look nonplussed, like they’re sleeping fairly well and not to
0:12:25 be too alarmed, it needs to be the Fed chair.
0:12:31 Like if the Fed chair shows up, you know, without his shoes and like he’s been on a bender all
0:12:34 night, it’s just like and popping pills.
0:12:35 Like I think it would be way better for us.
0:12:37 That would be more fun to cover.
0:12:39 If every 15 seconds he said, I’m sorry, hold on a second.
0:12:44 And he like struggled to get his pills out of his briefcase and then like started like
0:12:48 throwing pills into his mouth and crunching on these things.
0:12:48 That would be good.
0:12:49 I’d love to see.
0:12:53 I’d love for him just in the middle of these questions from senators, just love to see him
0:12:57 just like bend over and just do a giant rail academy.
0:13:02 What would happen to interest rates then?
0:13:03 What happened to the?
0:13:05 Well, how would the tenure respond then?
0:13:07 What would happen to the stock market?
0:13:07 Exactly.
0:13:08 Yeah, I don’t know.
0:13:11 I, you say you got to feel for Chairman Powell.
0:13:17 I feel for the American people that are, have to live under a fascist ass clown making decisions
0:13:21 that no one can, no one can discern like which direction we’re headed in.
0:13:23 This is, is that unfair?
0:13:24 Fascist ass clown?
0:13:26 FAC.
0:13:30 I, I, this is, the silver lining is the following.
0:13:37 And that is, I do think the American economy, the, the gears just keep turning.
0:13:44 And people, people keep innovating, people keep wanting to buy shit, people keep wanting to
0:13:47 make money, people keep coming up with new ideas.
0:13:54 And I think we probably overestimate the impact that the White House has on, it makes for a
0:13:55 lot of headlines.
0:13:59 But I wonder, I’m pretty sure we overestimated it or underestimated it.
0:14:00 We give them too much blame and too much credit.
0:14:07 But I would argue that this is, um, these decisions, it would be impossible, I think, for them not to
0:14:08 trickle down.
0:14:14 And the fact that the GDP estimates have already come down, I think as evidence, these decisions
0:14:16 are, are not good for the economy.
0:14:22 Let’s talk about this tennis lawsuit that was filed by Novak Djokovic and his association
0:14:24 of tennis players, also strangely funded by Bill Ackman.
0:14:32 And I read the complaint that they filed in, in New York federal court, and I gotta say, it is so
0:14:32 compelling.
0:14:40 I mean, issue after issue that, I mean, the, the first main thing that they address is price
0:14:40 fixing.
0:14:44 The fact that these tennis leagues all collude with each other to suppress the amount that
0:14:46 they pay their tennis players.
0:14:47 And they have many specific examples.
0:14:53 One of them, which is kind of interesting is that Larry Ellison, who bought the BNP Paribas
0:14:57 Open, which is one of these tournaments, he actually tried to increase the prize money.
0:14:58 He wanted to increase it by $1.6 million.
0:15:04 And the ATP tour and the WTA tour said, no, we’re not going to do that because that means
0:15:06 we’re going to have to increase the prize money for all the other tournaments.
0:15:11 They also have examples of limiting the endorsements that these players can make.
0:15:17 Like if you want to compete in these leagues, you have to forfeit your name and your image
0:15:18 and your likeness rights.
0:15:21 They also control the kind of equipment you can use.
0:15:25 They control which kinds of sponsors and sponsorships you can accept.
0:15:30 And then there’s some interesting stuff about the working conditions, which sounds a little
0:15:36 ridiculous, like boo-hoo, professional tennis players, but it honestly does sound quite grueling
0:15:37 when they lay it out.
0:15:40 You have to play in every tournament year round.
0:15:45 And if you don’t, if you skip a game, you get penalized, even if it’s for like an emergency.
0:15:50 And it’s intentionally an extremely packed schedule.
0:15:55 They overfill the schedule specifically so that other tournaments that might pay the players
0:15:57 more don’t compete.
0:16:00 And so the players don’t go play in other tournaments.
0:16:07 And so what you have here is an extremely vibrant, clear antitrust monopolization situation.
0:16:14 But as I think you’ll probably bring up, the situation with antitrust and sports leagues
0:16:16 is quite precarious.
0:16:18 And I can go into that in a second.
0:16:21 But I do first just want to get your reactions to this lawsuit.
0:16:22 I love this.
0:16:28 I think there are a few sectors that are more corrupt than sports leagues.
0:16:32 And that is they leverage the fact that people feel really benign about them to establish regulatory
0:16:33 capture.
0:16:38 And they get even legislation that enables them to be monopolies.
0:16:43 I mean, if you and I wanted to start a football team, an NFL team in Chicago, we can’t.
0:16:46 The NFL gets to decide they can control supply.
0:16:50 And the owners love it because that means that they buy $4 billion.
0:16:54 And if they hold on to it for 10 years, they know it’ll go up in value because they know
0:16:57 the number of billionaires will increase as the economy increases.
0:16:59 And there’s a fixed set of supply.
0:17:02 I mean, these things are so corrupt.
0:17:04 And they leverage this monopoly power.
0:17:07 And they extract rents from the players, from consumers.
0:17:09 Ticket prices have accelerated.
0:17:12 They’re essentially legal monopolies.
0:17:18 And it’s just ridiculous to think that why shouldn’t you be able to start a tournament,
0:17:20 create another team?
0:17:25 I mean, think about any business that said, OK, for every city, there can only be two software
0:17:25 companies.
0:17:31 And the governing body ruled by the owners of these software companies get to decide who
0:17:33 the entrants are or are not.
0:17:39 And then if they basically have one league, that means you extract rents from the players
0:17:44 where you’re the only game in town and you get to decide how much money they make or don’t
0:17:44 make.
0:17:54 So it’s especially bad in tennis where the players command only 18% of the total revenue generated
0:17:59 by the sport compared to basketball, where the players get 50% and soccer get they get
0:18:00 61%.
0:18:02 So I love this.
0:18:08 And I love that Liv came in and basically challenged the monopoly of the PGA.
0:18:15 So I think competition is a good thing, but this is a perfect example of corruption with
0:18:20 this veneer of benign goodwill because people have such affection for sports.
0:18:27 But these are monopolies and the rents being charged to ticket holders or consumers and advertisers
0:18:30 who have a limited supply of games, etc.
0:18:35 And to the players themselves is, bottom line, it’s corrupt.
0:18:37 I love this, Ed.
0:18:37 I love it.
0:18:41 I think the important thing you mentioned there, though, is legal monopoly.
0:18:46 And this is the very interesting thing about sports and sports leagues.
0:18:50 We have very robust antitrust laws in America and in Europe.
0:18:55 We crack down on anti-competitive behavior constantly.
0:18:59 I mean, we talk a lot on this show about antitrust and antitrust enforcement.
0:19:06 There is one exception, both in the US and in Europe, to antitrust laws, and that is sports
0:19:06 leagues.
0:19:14 They have decided in the courts, both, again, both in America and in Europe, that sports leagues
0:19:18 are not like regular businesses, that sports leagues actually need monopolization.
0:19:24 They need these governing bodies to cooperate with each other because their belief is that
0:19:32 sports only work if you have basically cooperation among the governing bodies such that the teams
0:19:35 and the players can compete on an even playing field.
0:19:39 In other words, their belief is it needs to be rigged in favor of entertainment.
0:19:45 And this is a long, strange history that goes back all the way to 1922, when there was an
0:19:50 antitrust lawsuit against the professional baseball league in America, what is now the MLB.
0:19:55 And the Supreme Court decided to make an exemption for the baseball league.
0:20:01 And that is why today the MLB is the only entity in the United States that is not subject to
0:20:02 antitrust laws.
0:20:06 So this will be really interesting to see because, yes, they make a great case here.
0:20:09 Yes, if you look at all of the details, it’s 100% a monopoly.
0:20:11 There’s no question about it.
0:20:17 But if you look at the history of antitrust in sports, I think it would indicate that this
0:20:21 is probably not going to go through because every time this happens, the courts review it.
0:20:25 They look at the legislation and they say, yeah, you know, we see where you’re coming from,
0:20:27 but sports is different.
0:20:28 So we can’t convict here.
0:20:30 So we’ll see what happens.
0:20:33 I’m kind of rooting for the tennis players.
0:20:35 Maybe that’s just because I like Djokovic.
0:20:41 But if I had to predict, I would say that the PTPA here does not win this case.
0:20:44 I would predict that the sports leagues will come out on top.
0:20:48 You may be right because I don’t know what the kind of established law is, but you want
0:20:49 to talk about corruption.
0:20:53 Start talking about the international bodies that don’t even have to abide by anyone.
0:20:57 They live in this kind of nether, netherland where there’s no, essentially, they’re not
0:20:59 subject to laws of any one nation.
0:21:04 And they’ve established such monopolies and people have tried to take them on and it hasn’t
0:21:04 worked.
0:21:08 Ted Turner started something called the Goodwill Games, trying to start a competitive.
0:21:14 My big idea when the World Cup was going through all of this nonsense, I do work with Nike, Adidas.
0:21:20 And I brought up with both of them, I said, why wouldn’t you basically start a nonprofit and
0:21:25 host a competitor or start a competitor of the World Cup and just give all the money back
0:21:32 to the, you know, try and break even, but basically try and root out the corruption that about six,
0:21:38 eight years ago, the corruption at UEFA went just absolutely insane with paying off local
0:21:44 officials and it became about bribes who, what host country got to host the World Cup.
0:21:50 So anyways, I would like to see, I hope this works, but I trust that you’ve done the homework
0:21:53 here and don’t think that you think the courts are going to side with the, with the league.
0:21:59 Let’s move on to BYD that remember, this is the Chinese electric vehicle company, and they’ve
0:22:05 just come out with this new charger for their vehicles, which is four times more powerful
0:22:06 than Tesla’s supercharger.
0:22:10 So it adds 80 kilometers for every minute of charging.
0:22:13 There are some technical questions that need to be addressed.
0:22:19 For example, there are concerns over what this does to the lifetime durability of the battery.
0:22:21 It might decrease the quality over time.
0:22:24 Supposedly, it doesn’t work very well for older car batteries.
0:22:29 So there are little questions around it, but the overarching implication here is quite simple.
0:22:33 BYD is pulling away from Tesla, both in terms of the vehicle sales.
0:22:35 We’ve talked a lot about that.
0:22:40 BYD is now the global leader in EV sales as of last quarter.
0:22:47 But now, you know, Tesla had this differentiator, this supercharging system that everyone was very
0:22:51 excited about, and BYD is now pulling ahead in charging too.
0:22:57 So Scott, your reactions to this news and the fact that BYD climbed again, it’s now at a record
0:22:57 high.
0:22:59 There’s just no getting around it.
0:23:02 BYD has surpassed Tesla on almost every level in terms of tech.
0:23:06 And Tesla sales in China have been cut in half in February.
0:23:10 They’re down 49%, while BYDs rose 161%.
0:23:16 Their latest vehicle is 75% less expensive, so four BYDs for the price of one Tesla.
0:23:22 This feels like it sort of is a metaphor for China in general, and that is in the last three months,
0:23:29 China, as kind of evidenced or indicated or a metaphor for the resurgence, is BYD.
0:23:37 A year-to-date, BYD stock is up 64%, and it trades at 33 times earnings, while Tesla is down 38%,
0:23:43 but still trades at 166 times earnings, or said differently, and I love this stat.
0:23:52 The market values each Tesla car sold at $425,000 in market cap, and each car from BYD, even after
0:23:55 this run-up, for $39,000 a car.
0:24:03 So even despite the fact that BYD’s stock has skyrocketed and Tesla’s has come down, I mean,
0:24:04 think about this.
0:24:11 The market still values Tesla at 10 times the value per car produced of BYD, and BYD is growing.
0:24:16 So one of these, it would appear, it would appear either BYD is dramatically, and this
0:24:21 is the question, is BYD dramatically undervalued, or is Tesla dramatically overvalued?
0:24:23 And of course, I believe the answer is yes.
0:24:31 Yeah, it is pretty remarkable, the stock performance of this company so far, up 60% year-to-date.
0:24:34 It’s up almost 100% in the past year.
0:24:36 It’s doubled in the past year.
0:24:42 And I think there was a great article by Liam Denning at Bloomberg, which I think you shared
0:24:42 with us.
0:24:48 And it basically just plots the stock prices of these two companies in the past three months,
0:24:50 year-to-date, Tesla versus BYD.
0:24:57 And what is so striking is that it looks like, it’s basically a mirror image.
0:25:02 I mean, if you’re listening to the podcast, it’s harder to describe, but, you know, for
0:25:10 every dollar increase in BYD stock, you see a dollar decrease in Tesla stock, and, you know,
0:25:11 you just plot it out.
0:25:17 BYD up 50%, 50% to 60%, Tesla coming down 50% to 60%.
0:25:22 And basically, what it tells you is, this isn’t just a matter of, oh, BYD is doing really
0:25:23 well right now.
0:25:27 This is a matter of, BYD is actively eating Tesla’s lunch.
0:25:33 Every time Tesla does not make a sale or their sales decline, you’re seeing an increase reflected
0:25:35 in the sales of BYD.
0:25:39 Every time Tesla’s stock comes down, BYD stock goes up.
0:25:44 So I think we can only expect this trend is going to continue, and it does feel like
0:25:50 the market is beginning to recognize that this other company in China that has these cheaper
0:25:55 cars, it also has cheaper software, it’s got these superchargers that are four times more
0:25:56 powerful than Tesla’s.
0:26:01 It’s becoming very clear BYD is probably going to be the new Tesla.
0:26:06 We’ll be right back after the break with a look at Germany’s defense spending.
0:26:11 If you’re enjoying the show so far, be sure to give Prof G Markets a follow wherever you
0:26:12 get your podcasts.
0:26:23 Support for the show comes from NerdWallet.
0:26:27 We’re all juggling a lot in our day-to-day, but you want to spend your energy on the right
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0:27:29 This week on Unexplainable, the final installment of Good Robot, our four-part series on the
0:27:31 stories we tell about AI.
0:27:36 So what I want you to do first is I want you to open up ChatGPT.
0:27:38 This time, the robots.
0:27:46 And I want you to say, I’m going to give you three episodes of a series in order.
0:27:47 Come for our jobs.
0:27:49 Why are you laughing?
0:27:50 I don’t know.
0:27:51 It’s like a little creepy.
0:28:01 Good Robot, a four-part series about AI from Julia Longoria and Unexplainable, wherever you listen.
0:28:11 We’re back with ProfG Markets.
0:28:16 German lawmakers approved a major boost in defense and infrastructure spending.
0:28:22 The plan removes borrowing limits for defense spending above 1% of GDP and creates a $533
0:28:24 billion infrastructure fund.
0:28:30 It’s a major shift for Germany, which is historically cautious on defense spending and on debt.
0:28:34 Previous borrowing limits were capped at 0.35% of GDP.
0:28:39 Now, this move could drive up to $1 trillion in investments over the next decade.
0:28:46 We’ve discussed on this show how increased defense spending in Europe may boost their equity markets,
0:28:49 right, as investors are looking for an exit strategy from the U.S.
0:28:53 It does appear that that rotation is already starting to materialize.
0:28:55 And I have some data we can go through.
0:28:59 But first, Scott, I want to get your reaction to this news from Germany.
0:29:04 Massive defense spending, a big increase in infrastructure spending, too.
0:29:09 And also, the German stock market on that news hit a record high.
0:29:10 I think this is overdue.
0:29:15 And just to call balls and strikes, I think that this is a benefit that we’ve derived from the Trump administration.
0:29:17 I don’t like the way they’re going about it.
0:29:27 But, you know, for a long time, everyone has been saying that Japan and Germany and Europe have been freeloading or free riding off of the military umbrella and expenditure of the United States.
0:29:31 And finally, it looks like they’re stepping up.
0:29:37 And I do think that that is a direct function of Trump’s withdrawal or basically saying you can no longer count on us.
0:29:42 I mean, this will be good, I think, for the German economy because they’re outstanding in manufacturing.
0:29:46 So, you would think that they would make great weapons systems.
0:29:47 And I like the idea.
0:29:51 I think Germany is a well-run, well-governed place.
0:29:55 And like I said, I think defense spending could be the stimulus.
0:29:58 And also, I’m trying to play this trade.
0:30:01 I think the Europe and defense trade is going to be a big one.
0:30:10 And I’ve just recently made an investment in a European aviation company that I think has some defense opportunities.
0:30:12 And I’m doing it based on two things.
0:30:19 I’m hoping to get sort of a double whammy of capital flows into Europe and also the increase in defense spending.
0:30:27 Yeah, if you just look at the stock market, the DAX, D-A-X, the German stock market, it rose around 2%.
0:30:29 It’s now up 15% year to date.
0:30:33 It’s one of the best performing stock markets in the world right now.
0:30:36 You compare it to the S&P, which is down 4%.
0:30:38 It’s outperforming the U.S.
0:30:40 It’s also outperforming emerging markets.
0:30:45 And, you know, I think the question is, why is it doing this well?
0:30:50 Because $500 billion in stimulus, it’s a lot, but it’s not that much.
0:30:55 And I don’t think it’s the sole explanation for why you’re seeing this explosion in values.
0:31:06 And I think what’s really driving this rally right now is the story that this spending decision tells about what is going to happen in Germany.
0:31:07 Because we’ve discussed this before.
0:31:09 This is a country that hates debt.
0:31:14 I mean, they have a 60% debt-to-GDP ratio.
0:31:16 It’s the lowest of the G7 by far.
0:31:18 You look at the U.K., it’s like 100%.
0:31:21 The U.S., obviously, really high, 120%.
0:31:33 And in addition to simply not taking on debt, they also have all of these rules and these controls that prevent them from borrowing in the future.
0:31:35 This is just the way their economy works.
0:31:44 And I think a lot of that is sort of a post-traumatic stress from the Second World War, where they realized, we can’t really trust ourselves.
0:31:46 We need to take extreme measures.
0:31:49 We need to make sure we never dig ourselves into these kinds of holes.
0:31:54 And one way we can do that is by stringently limiting our ability to borrow money.
0:32:02 As a result, as we’ve talked about, their economy has been, eh, you know, fine, but compared to the U.S., pretty sluggish.
0:32:09 And so I think last week was this pivotal moment in the narrative where the government said, by a huge majority, by the way,
0:32:12 okay, we’re going to dramatically change our approach to spending.
0:32:22 And in addition to that spending bill, they also stripped out these debt limits I talked about, these controls that they have on how much they can borrow,
0:32:25 which are literally enshrined in their constitution.
0:32:29 So, you know, I mentioned that 0.35% number.
0:32:34 It used to be that the deficit was only allowed to hit 0.35% of GDP.
0:32:35 That was the max.
0:32:39 And last week they said, nope, we’re going to get rid of that.
0:32:40 We’re going to make an exception here.
0:32:46 So I think a lot of this is also a turning point in the story for Germany.
0:32:53 They had this decades-long love affair with balancing the budget, with being fiscally conservative.
0:32:57 And they literally just decided, we’re not doing that anymore.
0:33:00 You know, we’re going to have this big fiscal spending package today.
0:33:05 And I think investors are probably believing if they’re going to do this now, they’re probably going to do similar things in the future.
0:33:07 They’re probably going to spend even more tomorrow.
0:33:14 And all of that government spending, of course, is going to, if we’re being realistic, it’s mostly going to go to German companies.
0:33:16 And all of that money is going to flow to their bottom line.
0:33:18 The rivers are reversing.
0:33:23 European equity funds registered their largest four-week inflows in nearly 10 years.
0:33:28 And that’s the most significant rotation out of U.S. into European equities since 1999.
0:33:39 And a B of A survey showed that 60% of investors expect stronger European growth in the next year, up 9% from just two months ago.
0:33:41 So 9% of people thought Europe was going to grow.
0:33:43 Now it’s 60%.
0:33:57 The thesis I would have going into this is that they’re estimating or they’re proposing that the European Union is going to go from 1.9% of GDP on defense to 3%, a $19 trillion economy.
0:34:03 You’re talking about $150 to $200 billion in additional capex that the market wasn’t expecting just six months ago.
0:34:05 And that’s annual.
0:34:07 And where is that going to go?
0:34:09 And what companies are going to be in front of that tsunami of capital?
0:34:15 And not only that, with the tension between the U.S. and Europe, it used to be, okay, Europe, increase your defense spending.
0:34:19 And by the way, please buy our submarines and our missiles.
0:34:21 And there’s no fucking way they’re doing that now.
0:34:27 Germany might say, in order to build these systems, we might buy some parts from U.K. and Italian companies or French companies.
0:34:29 But no, we’re not going to buy from the U.S.
0:34:30 Sorry, guys.
0:34:33 It’ll be an intra-European stimulus.
0:34:36 I think it’s really fascinating.
0:34:38 I’m also quite optimistic about it.
0:34:55 I like the fact that Europe, what I think is kind of the home of a lot of progressive liberal thought and really has been kind of a beacon of light for, I don’t know, philosophy and democracy and kind of modern civilization.
0:35:00 I’d like to see them get their time in the sun outside of just Zara and LVMH.
0:35:09 Yeah, I just want to emphasize that Bank of America data you mentioned right there because it is pretty remarkable, especially in the context of everything you’ve been talking about.
0:35:14 You’ve been saying for months that you want to rotate out of the U.S. and into Europe.
0:35:15 And I just want to emphasize this data.
0:35:19 So this is the survey that Bank of America does of all of the fund managers.
0:35:25 It’s a very reliable survey to understand how capital flows are moving in the world.
0:35:35 And they found that U.S. equity allocations, allocations into American companies in March, so this month, they dropped 40%.
0:35:39 And that is the largest drop ever.
0:35:44 Meanwhile, Eurozone stock allocations jumped 27%.
0:35:54 And that shift from U.S. equities into European equities, that transformation, that is the largest shift since 1999.
0:36:04 So the thing that you’ve been talking about for months now, and which I’ve been kind of like, okay, maybe, yeah, okay, you’re going to rotate out, you’re going to trim your holdings.
0:36:08 It’s literally happening in record numbers now.
0:36:16 And it does beg the personal question, how far into that rotation are you right now?
0:36:23 I think the dream scenario would be that you sold immediately when you said you were thinking about it two months ago.
0:36:26 But I know that these things take a little bit more time.
0:36:27 The answer is not far enough.
0:36:29 I started selling down Apple and Amazon.
0:36:32 They started dropping, so I thought, I’ll wait until they get back.
0:36:34 They haven’t gotten back.
0:36:38 And this is one of my many flaws as an investor.
0:36:42 Apple and Amazon are kind of 80% or 90% of their all-time highs.
0:36:47 But because they were at 100% of their all-time highs 60 days ago, I’m kicking myself and I don’t want to sell.
0:36:51 So I wish I’d actually done what I said to do.
0:37:01 My biggest investment is in real estate, but my second biggest is with a fund run by my friend Orlando Marchant, and he just invests in non-U.S. special sits.
0:37:07 And he’s up, it’s Atlanta Partners, he’s up 12% year-to-date.
0:37:10 And I like him because he’s highly diversified.
0:37:16 The last four years has been really difficult for him because he’s not in U.S. growth, but he’s been flat because he’s good.
0:37:18 And he’s been very diversified.
0:37:19 Actually, we’re actually a little bit up.
0:37:20 I shouldn’t say that.
0:37:23 I think we’ve compounded at 8% or 9%, but everything else has been compounding.
0:37:25 And now that everything’s going down, he’s rocking and rolling.
0:37:30 The bottom line is I didn’t rotate as aggressively as I should have.
0:37:36 But what my friend Orlando, who I’ve been talking to about this, says is that these cycles are usually multi-year cycles.
0:37:38 And so we’re kind of in the second inning.
0:37:44 If you really believe our thesis is accurate, there’s this great rotation of the rivers reversing flow.
0:37:49 We’re kind of, we’re in inning one, maybe we’re in the bottom of the first inning.
0:37:57 And you’re going to see, because even if you look at Apple, all right, okay, it’s lost 20% of its value in the last whatever, two, three months.
0:37:59 It’s still at a P of 31.
0:38:13 The hard part is when you think about, and the reason I’ve been a bit reticent, my two biggest equity holdings are Apple and Amazon is that I have about a, I’m up about somewhere between eight and 12 fold on each of them.
0:38:22 So you got to ask yourself when you’re selling a stock, what other equity do I want to buy at 77 cents on the dollar?
0:38:25 Because I’ll take a 23% tax hit.
0:38:32 So I got to feel strong enough that there’s an opportunity, a better opportunity with 77 cents on the dollar rather than just holding Apple and Amazon.
0:38:40 And I got to that point a couple months ago, I’m still going to continue to sell down because while it’s not the most expensive it’s been, it’s still expensive.
0:38:56 And I am actively looking for a European and I’ve always been somewhat remiss to invest in Chinese stocks, although I wish I had, but where I’m really starting to look now is at Latin America where you haven’t seen the same sort of run up.
0:39:08 And I think there’s a lot of great deals specifically in Brazil, but I am going to, you know, I calculate I’m like 80 or 90% in U S related equities and investments in real estate.
0:39:10 And I want to move down to 50 or 60.
0:39:14 Yeah, I’m sure there are a lot of people listening who are trying to think, okay, well, what do I do?
0:39:17 How do I get some European exposure?
0:39:29 Well, I would say if you want to do this yourself, when we talk about this a lot, the safest way to do it and probably the smartest way to do it is just to buy a diversified portfolio of stocks in the form of an ETF.
0:39:39 So some of the low cost options you could look at, Vanguard has VGK, also iShares has one, I-E-U-R, that’s their core Europe ETF.
0:39:42 Those are just options that are low cost.
0:39:43 I’m not saying you have to do those.
0:39:46 I’m not being paid by Vanguard or iShares to say that.
0:39:53 I think the point being, though, I wouldn’t go in and try to find all of the gems in the European stock market.
0:39:55 Don’t go picking individual stocks.
0:40:05 I think the best thing that you could do here is just look at the European stock market indexes, look at the ETFs and the index funds, and find the ones that are low cost.
0:40:06 And that makes sense for you.
0:40:08 In sum, you’re exactly right.
0:40:10 Index funds, dollar cost average in.
0:40:22 But keep in mind, if you’re 100% invested between your real estate, between your savings, and between your stocks in U.S. companies, you might think you’re diversified or not.
0:40:30 And Goldman just put out research saying that when stocks get this expensive, it usually indicates almost flat returns for the next decade.
0:40:33 So, you know, we’ll see.
0:40:34 They’ve been wrong before.
0:40:39 But absolutely, I think you want a little bit of exposure to some of the international markets.
0:40:45 I mean, just think about the sentiment around Europe, how much has changed in the last 60 days and what it’s overshadowed.
0:40:51 China, as evidenced by the BYD story, is having a bit of a like, don’t forget about us.
0:40:58 Between DeepSeek, between BYD, China’s like, I don’t, you know, forget about us at your own peril, folks.
0:40:59 We’re still the second largest economy.
0:41:00 We’re still very good at what we do.
0:41:03 We’re still really well managed.
0:41:05 I mean, I’m even thinking about going back.
0:41:08 I never, I didn’t think I’d be back in China for another five or 10 years.
0:41:10 And I’m thinking, oh, maybe it’s time to do a trip there.
0:41:11 We were talking to Alice Han about it.
0:41:14 We got to do a trip and we got to do a live podcast there.
0:41:17 And we got to meet with Xi Jinping in the Politburo.
0:41:18 Oh, yeah, that’s going to happen.
0:41:21 Yeah, that’s, we’re such players.
0:41:22 Yeah.
0:41:23 Influence.
0:41:28 You’re more likely to stop in Seoul on your way back and join a K-pop band.
0:41:31 I’ll be the sullen one.
0:41:34 I’ll be the sullen one that gets addicted to heroin.
0:41:36 You’ll be the front man that everyone’s crazy about.
0:41:37 Anyways.
0:41:43 We’ll be right back after the break with a look at ultra luxury hotels.
0:41:47 If you’re enjoying the show so far, hit follow and leave us a review on Prof G Markets.
0:42:01 We’re back with Prof G Markets.
0:42:07 Ultra luxury hotel group Arman is seeking $2 billion from investors to drive its global expansion
0:42:10 with plans to grow its presence across the Middle East and Africa.
0:42:16 The funds will support 23 ongoing hotel projects and the development of Arman residences,
0:42:19 a collection of lavish homes offering hotel level amenities.
0:42:25 Additionally, the company plans to launch a new hotel line tailored to a younger clientele.
0:42:29 This is not groundbreaking news.
0:42:36 It’s not earth shattering from an economic perspective, but we got to cover it because
0:42:41 Scott, you are the expert, the world renowned expert on luxury hotels.
0:42:47 You’ve stayed at probably every Arman property in the world.
0:42:53 And so, you know, anytime that the Arman shows up in the headlines for any reason, I think
0:42:54 we got to cover it.
0:42:56 I think we got to look at the luxury hotel market.
0:42:58 So Scott, please take it away.
0:43:05 What is your reaction to the Arman group going out and raising $2 billion to expand across
0:43:05 the globe?
0:43:14 So I’m fascinated by this industry, I wrote that book on happiness and one of the things
0:43:17 I took away from it, I struggle with happiness.
0:43:21 And one of the things I took away from writing a book on it is that every piece of research
0:43:26 says that we overestimate the happiness things will give us and underestimate the happiness
0:43:27 that experiences will give us.
0:43:33 So I spend a disproportionate amount of my income on travel and I don’t travel to cities, I travel
0:43:33 to hotels.
0:43:39 I’m obsessed with those hotel lists and I just find it absolutely fascinating.
0:43:41 And if there’s a great new hotel, I’ll travel to the hotel.
0:43:44 I didn’t go to the PSG game with my son in Paris.
0:43:46 I went to the new Cheval Blanc.
0:43:48 That’s how I travel.
0:43:49 I go to hotels.
0:43:50 I don’t go to cities.
0:43:53 And I’m fascinated by the business.
0:43:54 So first off, the business model.
0:43:55 Let me back up.
0:43:59 Peter Drucker said demographics are destiny.
0:44:02 And that is every major business trend can be predicted by demographics.
0:44:05 And what you want to do is you want to get in front of a demographic trend.
0:44:08 It’s like surfing when the waves are perfect, right?
0:44:11 It’s easy to be a great surfer with great waves or a great skier with great powder.
0:44:14 And demographics are the great powder and great waves.
0:44:17 And one of the biggest demographic trends, quite frankly, is just the wealthy.
0:44:22 The number of millionaires in the U.S., Ed, get this, has doubled since 2020.
0:44:26 So it’s just, it’s staggering.
0:44:35 One in 15 Americans is now considered a millionaire and a projected 16% growth to 25 millionaires by
0:44:35 2028.
0:44:40 So the fastest growing demographic group is not even the 1%.
0:44:41 It’s a 0.1%.
0:44:47 And if you think about the brands in the hotel space, the nicest brands were the Ritz Carlton
0:44:47 and the Four Seasons.
0:44:50 They were kind of the duopoly for rich people.
0:44:56 And then Mandarin Oriental kind of saw an opportunity out of Hong Kong, came in, tapping into wealthy
0:44:59 Asians and the great brand halo of Asian service.
0:45:07 And then the explosion in mega kind of centimillionaires and billionaires, not even, but just very, the
0:45:10 super wealthy, so to speak, I’d say that’s probably people $10 million and above.
0:45:17 A whole raft of brands have come in above those luxury brands.
0:45:21 Rosewood, Almond, as we’re talking about, Cheval and Blanc, Sixth Senses.
0:45:26 And they basically have come in and they’ve leveraged a lot.
0:45:27 They’ve leveraged demographics.
0:45:29 They’ve leveraged the new means of branding.
0:45:35 And that is only the Four Seasons of the Ritz Carlton or Marietta Hilton had the money to
0:45:38 develop very expensive reservation systems and do branding.
0:45:40 And now branding isn’t a function of advertising.
0:45:42 It’s a function of Instagram.
0:45:47 And these hotels are literally an Instagram orgy.
0:45:49 They are so over the top.
0:45:51 They have such a beautiful clientele.
0:45:56 They’re in such beautiful locales that basically their entire marketing is on.
0:46:03 At the Hotel Du Cap, at any given moment, there are a thousand Instagram postings in an hour
0:46:05 just saying, look at this place.
0:46:06 Look how incredible this place is.
0:46:08 Look at how incredible the food is.
0:46:14 If you go to, you know, whatever it might be, I’m trying to think of the Rosewood Mayakoba.
0:46:16 These things are just built for Instagram.
0:46:22 So they’ve taken advantage of the new kind of content creation, usurping marketing spend
0:46:25 or replacing or obviating the need for marketing spend.
0:46:30 And you have also post-COVID a sort of a YOLO mentality where people are saying,
0:46:35 for the first time, I’ll spend $5,000 a night on a hotel.
0:46:39 And people, even rich people never would have thought of that.
0:46:41 They never would have considered it.
0:46:43 But now they’re like, OK, maybe I know someone who’s died.
0:46:45 Maybe I’m in my 60s.
0:46:46 I’ve got the money.
0:46:47 This thing is extraordinary.
0:46:49 This place is just extraordinary.
0:46:52 I, you know, will pay $5,000 a night.
0:46:56 The business model is also incredible because what they do is they find a local billionaire
0:47:00 that wants to say, I own the Four Seasons in Hawaii, Michael Dell.
0:47:01 They pay for the construction.
0:47:06 They then enter into a management agreement with the flag of Four Seasons or Rosewood,
0:47:13 who manages it, does the service, does the training, does the standards, the decorations,
0:47:15 the interior design, has the reservation system.
0:47:19 And they take, say, between 8% and 12% a year, which doesn’t sound like a lot.
0:47:25 But most of it hits the bottom line because the cost of the employees is funded out of
0:47:25 the revenue.
0:47:27 And then they take an additional 8% to 12%.
0:47:33 So even in 2008, when the market crashes, the Four Seasons still makes money because they’re
0:47:35 taking 8% to 12% off the top.
0:47:40 And they have a services agreement where the owner of the Four Seasons in Midtown Manhattan
0:47:45 basically has to declare bankruptcy because he has to maintain certain levels of service
0:47:48 per his agreement with the Four Seasons.
0:47:50 So the Four Seasons only actually owns one of their hotels.
0:47:56 The rest, they get other people to finance and they take a very high margin management fee
0:47:57 to kind of run the place.
0:47:59 So they outsource the capital risk.
0:48:05 They manage or they train or they create the service standards and they just get all high
0:48:07 margin and credible revenue.
0:48:09 In addition, they found another way to make a shit ton of money.
0:48:16 And that is they said, okay, let’s take a $5 million or an $8 million condo in a high
0:48:18 rise on the beach in South Beach.
0:48:23 And we’ve branded the Almond Residences and we can charge $12 million for it because they
0:48:24 get hotel amenities and the branding.
0:48:30 And the owner, when he or she is not there, can put it back into the rental pool and they
0:48:33 rent it out and they split the revenue.
0:48:37 The owner gets 50% and the brand gets 50%.
0:48:43 So I get someone else to finance the construction of something, ridiculously overpay for it, and
0:48:47 then it continues to make revenue for me because of the brand.
0:48:52 I mean, this really is a lesson in the power of brands, a lesson in the power of demographic
0:48:59 trends, and a lesson in kind of business models around you don’t want to be in the business of
0:49:01 owning the capital.
0:49:05 You want to be in the business of managing it and taking revenue off of the top.
0:49:10 One thing I often think about, Scott, we’ve addressed what the world looks like when it’s
0:49:13 ruled by the mega rich.
0:49:16 You know, we’ve seen huge monopolies form.
0:49:20 Money and lobbying power starts to take hold in the government.
0:49:22 You start to see these populist movements.
0:49:28 You also start to see the rise in these luxury brands and these luxury items and these businesses
0:49:33 that specifically serve as extremely rich people where you can charge these incredibly high prices.
0:49:39 My question is what is going to happen when all these billionaires and multimillionaires start
0:49:43 dying because they’re all getting old-ish?
0:49:52 And what’s going to happen when all of that wealth is transferred on to, I mean, if we had to guess,
0:49:54 their children and their grandchildren?
0:50:03 What happens to a society that is dominated by people not who made obscene wealth, but who inherited obscene wealth?
0:50:07 Just to keep it real, I want to talk about a couple other hotel stories.
0:50:14 When I was right out of business school, I started a company called Profit, and we did consulting,
0:50:15 and we would just take any engagement.
0:50:21 And I took an engagement with a pager company helping them figure out their customer service,
0:50:22 and it was in Minneapolis.
0:50:28 And I went with my friend Lee Lotus, and I remember it because it was the day of the Clinton-Bush-Perot debate.
0:50:35 And we got a hotel for $39 a night, I think, at the Minneapolis airport.
0:50:44 And we had to go out and try and buy nose plugs or some weird Vaseline to put under our – or weird scent to put under our noses
0:50:45 because it stank so badly of smoke.
0:50:50 It literally felt like someone had fallen asleep and been burned alive by their own smoke.
0:50:59 And then the other one was I was at – I had a client, I think it was Roots or some Canadian company in Montreal.
0:51:03 And it was this – you know, it was my own company.
0:51:06 We’re a small business, so it was like – I think it was like 70 Canadian.
0:51:10 And I checked in, and it was 1993, and, you know, whatever.
0:51:13 I was your age, so the first thing that I do, I settle in and I turn on porn.
0:51:18 And it’s not working, so I called down to the front desk and I’m like, the TV’s not working.
0:51:20 So this Asian woman comes up.
0:51:22 It’s the white lotus scene again.
0:51:22 Yeah.
0:51:25 It turns on the TV, and of course, the porn comes up, and it’s like going in and out.
0:51:33 So she sits there and starts banging on the TV, and occasionally the porn comes in, and it comes out, comes in, comes out.
0:51:34 Were you not ashamed?
0:51:36 Oh, it was fucking humiliating.
0:51:37 It was like crazy embarrassing.
0:51:43 And I remember thinking – and then this couple, this family of like five is looking for the room.
0:51:46 They come into my room and start going, where’s room 308?
0:51:49 It’s my porn is coming on and off my TV.
0:51:51 She’s banging on the TV.
0:51:53 And I looked at the couch.
0:51:54 I remember the exact moment.
0:51:59 I looked at the couch, and it was covered in plastic, and I thought, this is where people come to kill themselves.
0:52:03 This is that kind of place you said, I want out.
0:52:05 I can’t fill this void in my chest.
0:52:08 I’m going to go check into this hotel.
0:52:13 Anyway, so I’ve had – I’ve seen hotels from all ends of the spectrum.
0:52:14 I’m sorry.
0:52:15 What was the question, Ed?
0:52:17 What was the question?
0:52:25 My question is, what is going to happen when the wealth transfer finally occurs?
0:52:29 Look, I believe in a really aggressive inheritance tax.
0:52:31 I don’t believe in dynastic wealth.
0:52:34 One, it’s bad for society.
0:52:39 So rich kids get into the best schools and also inherit the money so they can start businesses.
0:52:44 And there’s a myth that the middle class is a naturally occurring organism.
0:52:44 It isn’t.
0:52:47 It requires additional redistribution of income.
0:52:55 And Republicans and the incumbents would like us to believe that, oh, no, the middle class is a naturally occurring organism and it’ll come back on its own.
0:52:55 No.
0:53:04 If you don’t take money from corporations and the most fortunate among us and redistribute it into the middle class, the middle class throughout history eventually goes away.
0:53:15 And what you have with dynastic wealth is you’re taking capital that should go back into the ecosystem and just creating these dynasties of unproductive rich people.
0:53:17 Now, the good news is that most of them aren’t very happy.
0:53:29 And so for me, the reason that you can justify an exceptional inheritance tax is that additional capital or inheriting more than, say, 10 million bucks, that doesn’t increase the happiness of your kids.
0:53:38 I know a lot of rich kids and I know a lot of kids who are not rich and the levels of happiness are not greater among the rich kids.
0:53:57 So if the whole point is to create a society where people can have purpose and meaning and live a happy life and they’re getting no additional happiness, if you let them inherit more than, say, 10 or 20 million dollars, then what’s the point when you could redistribute that capital to other people and give them more of a shot?
0:54:07 So I hate dynastic wealth, but what you’re seeing, and I see it, I mean, I think I’ve always resented rich kids because I’m not one of them and I was always jealous of them.
0:54:10 But what you’re talking about is already happening, Ed.
0:54:16 I mean, when you go to these nice hotels, there’s people in their 50s and 60s, and you can tell it’s probably their money.
0:54:19 And then there’s a whole raft of a younger generation.
0:54:27 To be clear, some of them, whether it’s tech, some of them, you know, whatever it is, but a lot of them are there with their parents’ credit card.
0:54:28 It’s already happening.
0:54:39 By the way, this funding round by Arman, they’re looking for investors as we speak, and they’re specifically looking for high net worth individuals to invest.
0:54:49 If you got the call from Arman tomorrow inviting you, say, to an SPV into the new Arman residency, would you invest?
0:54:50 A hundred percent, no.
0:54:54 The returns are shitty because it’s a vanity investment.
0:54:56 So there’s a lot of people that love it.
0:54:57 I’m sure they have some sort of deal.
0:55:00 People love the idea of investing in Arman.
0:55:02 So that means they can extract.
0:55:05 They can get very cheap capital, which spells shitty returns.
0:55:09 So I would bet that it’s just not a great investment.
0:55:23 It’s like timeshares or I would – I haven’t seen the paperwork on the underlying dynamics, but because so many people love the idea of investing in Arman, they’re going to get a disproportionate amount of capital such that they will be able to offer really shitty terms.
0:55:33 I would bet the returns will be awful, but maybe there’s some psychic return of saying, oh, I’m an owner of Arman, and I get 10% off of rates.
0:55:43 I remember – more hotel stories – back when I remember taking my girlfriend I was trying to impress to a nice hotel in Cabo, but I signed us up.
0:55:52 The reason I got to go is I signed us up for a timeshare tour, and it was at a turn on when I told her we had to take a two-hour tour in the middle of the day to look at timeshare opportunities.
0:55:56 Oh, that’s what happens when you roll with a dog.
0:56:02 That was – when I laid that on or got her down to Mexico, I’m like, oh, I got this, like, free cocktail thing for us.
0:56:03 She’s like, oh, I’m not going to go.
0:56:04 I’m like, you need to go.
0:56:04 It’s a timeshare pitch.
0:56:06 We have to go, otherwise I can’t get this room right.
0:56:08 That’s so brutal.
0:56:12 Do you think that’s – do you think that’s a turn on?
0:56:13 God damn, that doesn’t work.
0:56:16 Let’s take a look at the week ahead.
0:56:24 We’ll see the personal consumption expenditures index for February, as well as earnings from GameStop and Lululemon.
0:56:27 Do you have any predictions for us, Scott?
0:56:38 Yeah, my prediction is that the flows of capital into Europe begin to infect not just the defense contractors, but start to infect the other sectors in the economy.
0:56:43 And that we’re going to see, I think, so far, European markets are up 13% or 16%.
0:56:45 I think they’re going to be up 30% plus this year.
0:56:47 I think this is a trade, a momentum trade.
0:56:54 And I think there’s probably a lot of fund managers right now thinking, okay, I missed this, but it’s not too late.
0:57:03 And you’re going to see just an entirely different willingness and promiscuity around allocating big pools of capital to European stocks that haven’t been there for 20 years.
0:57:05 Quite frankly, I just think we’re getting started.
0:57:10 To that point, we made the point that U.S. stocks have come down, but they’re still expensive.
0:57:12 You make the same case with Europe.
0:57:14 European stocks have gone up, but they’re still cheap.
0:57:15 I think you’re probably right there.
0:57:19 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:57:21 Our associate producer is Alison Weiss.
0:57:23 Mir Solverio is our research lead.
0:57:25 Isabella Kinsel is our research associate.
0:57:27 Drew Burrows is our technical director.
0:57:29 And Catherine Dillon is our executive producer.
0:57:33 Thank you for listening to Prof G Markets from the Vox Media Podcast Network.
0:57:36 Join us for a fresh take on markets on Thursday.
0:57:41 Lifetimes
0:57:49 You have me
0:57:52 In kind
0:57:54 Reunion
0:57:58 As the waters
0:58:06 And the dark flies
0:58:06 And the dark flies
0:58:08 In love
0:58:08 And the dark flies
0:58:08 And the dark flies
0:58:08 In love
0:58:09 And the dark flies
0:58:10 In love
0:58:10 And the dark flies
0:58:11 And the dark flies
0:58:12 In love

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0:01:51 Young men face a variety of obstacles to thrive.
0:01:56 One of those obstacles, on-demand porn.
0:01:59 Porn, as read by George Hahn.
0:02:06 Quote, pornography is the McDonald’s of sex.
0:02:11 Fast, convenient, and utterly divorced from nutrition.
0:02:12 Unquote.
0:02:14 Anonymous.
0:02:18 I was at Mobile World Congress in Barcelona earlier this month.
0:02:25 A young man, married with two kids who founded a tech firm, approached me and asked if I’d mentor him.
0:02:29 I told him, boss, you should mentor me.
0:02:33 I mentor young men who are struggling and you are clearly thriving.
0:02:35 He said, I have an addiction.
0:02:38 I said, what’s the addiction?
0:02:40 Porn.
0:02:45 As soon as the words left his mouth, I sensed shame.
0:02:48 Within 15 seconds, he couldn’t look me in the eye.
0:02:51 And within 60 seconds, he’d fled.
0:02:57 All addictions are wrapped in some shame, but not in equal amounts.
0:03:02 Tell someone you’re sober from pills or booze and you’ll get praise and admiration.
0:03:06 The same is not true for people with a porn addiction.
0:03:13 In the past six months, a half-dozen men have told me their drug of choice is porn.
0:03:21 I suspect they aren’t outliers, but canaries sounding an alarm from the most opaque sector of the addiction economy.
0:03:32 At the turn of the millennium, there were no social media platforms, there wasn’t enough bandwidth to run video, and Amazon was a bookstore.
0:03:35 But online porn dates back to 1995.
0:03:47 By 2004, online porn was so ubiquitous that Avenue Q won six Tony Awards, including Best Musical, with a song called, wait for it,
0:03:49 The Internet is for Porn.
0:03:53 Nobody doubted that claim then, and nobody doubts it now.
0:03:56 But how much of today’s Internet is porn?
0:03:59 A. We’re not sure.
0:04:05 Some estimates put porn-related traffic as high as one-third of all Internet traffic.
0:04:12 Pornhub, the leading distributor of free, ad-supported porn, ranks in the top 20 websites globally.
0:04:16 Ten of its competitors rank in the top 100.
0:04:23 Porn addiction isn’t listed in the Diagnostic and Statistical Manual of Mental Disorders.
0:04:27 But in a study of 2,000 American adults,
0:04:34 11% of men and 3% of women reported some agreement with the statement,
0:04:36 I am addicted to pornography.
0:04:43 Fewer people than report alcohol abuse, but more than admit to a problem with gaming or gambling.
0:04:51 On my podcast, Dr. Anna Lemke, a professor of psychiatry at Stanford and the author of Dopamine Nation,
0:04:53 said that beginning in the early 2000s,
0:04:59 she saw warning signs in male patients who self-described as porn addicts
0:05:01 and cited the Internet as the culprit.
0:05:06 Since then, there’s been an escalation in people presenting with digital addictions.
0:05:14 Porn addiction may be difficult to isolate within the broader and more diffuse Internet addiction,
0:05:17 but compared to other Internet-enabled compulsions,
0:05:19 there’s relatively little peer-reviewed research.
0:05:25 My thesis? Few academics want to be known as the porn professor.
0:05:27 See above. Shame.
0:05:33 Humans came off the savanna hardwired for addiction.
0:05:37 The dopamine rush a hunter felt when taking down a mammoth
0:05:41 is neurologically the same feeling a gambler gets when betting.
0:05:47 Our instinct to gorge whenever we see food was honed during millennia of scarcity,
0:05:51 and it’s that same instinct the food industrial complex leverages
0:05:55 to keep people eating long past the point of being satiated.
0:05:58 Ours is an addiction economy.
0:06:03 The most valuable companies arbitrage the disparity
0:06:06 between our instincts and industrial production.
0:06:11 On the Internet, everyone has access to everyone,
0:06:16 and the digitization of a market results in a winner-take-most ecosystem.
0:06:22 Dating apps sort potential partners into a small group of haves
0:06:25 and a titanic group of have-nots.
0:06:31 On Hinge, the top 10% of men receive 60% of the likes.
0:06:35 The comparable figure for women is 45%.
0:06:41 Online porn exploits the lack of mating opportunities for men.
0:06:46 The most recent figures for A-Lo, the company behind Pornhub, Brazzers,
0:06:48 RedTube, U-Porn, and X-Tube,
0:06:53 showed 2018 revenue of $460 million,
0:06:56 with a profit margin of 50%.
0:07:05 Meanwhile, OnlyFans generated $6.6 billion in revenue in 2023.
0:07:10 The firm has more than 300 million registered accounts,
0:07:12 of which 70% are male.
0:07:17 On the other end of the Internet connection are 4.1 million creators,
0:07:19 84% of them women.
0:07:24 While OnlyFans is known for its subscription model,
0:07:29 one-off transactions are driving 88% of the revenue growth.
0:07:32 These tips are an arbitrage on the disparity
0:07:34 between the biological impulse to mate
0:07:37 and the lack of mating opportunities.
0:07:41 There are fewer economically and emotionally viable men,
0:07:45 and too few venues where a man can develop the skills
0:07:49 to express romantic interest while making a woman feel safe.
0:07:54 Pro tip, research shows women are attracted to men
0:07:56 who signal three primary attributes,
0:08:00 resources, intellect, and kindness.
0:08:04 In the VHS and DVD eras,
0:08:07 porn consumption was a wealth transfer from men
0:08:09 to the adult entertainment industry
0:08:11 and mom-and-pop video store owners.
0:08:14 In the OnlyFans era,
0:08:17 it’s a wealth transfer from hundreds of millions of men
0:08:21 to a handful of platforms and tens of thousands of women.
0:08:24 During its peak growth,
0:08:27 OnlyFans was adding the population of Atlanta
0:08:30 to its registered user base every day.
0:08:36 The average OnlyFans creator grosses roughly $1,800 annually.
0:08:40 One analysis found that creators in the top 0.1%
0:08:45 collect 100 times what those in the top 10% bring in.
0:08:52 One OnlyFans earner grossed $43 million in a single year.
0:08:56 A common query I receive at speaking gigs
0:08:58 is who is most vulnerable to AI.
0:08:59 Easy.
0:09:04 OnlyFans is ground zero for disruption from AI bots.
0:09:06 This is not a good thing,
0:09:09 as there will be less friction to becoming less social,
0:09:10 less mammalian.
0:09:14 We are what we pay attention to.
0:09:17 More research is needed, see above,
0:09:20 but one study found that porn consumption
0:09:23 explained 9% of the variation
0:09:25 in men’s sexual objectification of women.
0:09:28 Among men who preferred degrading pornography,
0:09:32 the variance increased to 20%.
0:09:36 A longitudinal survey of 962 Dutch adolescents
0:09:40 found exposure to porn among males
0:09:44 was a strong predictor of objectifying attitudes toward females.
0:09:50 We pathologize males attracted to misogynistic communities
0:09:54 as incels, potential mass shooters, and sex criminals,
0:09:57 but these men are statistical outliers.
0:09:59 However,
0:10:04 we may be evolving a new species of asocial, asexual male.
0:10:06 Homo Solo.
0:10:12 Homo Solo’s inability to develop romantic skills
0:10:15 means he’s primarily a danger to himself,
0:10:17 as he’s likely to be less happy,
0:10:18 earn less money,
0:10:20 and die sooner.
0:10:24 Homo Solo’s AI girlfriend never says no,
0:10:27 is never tired, busy, or in a bad mood.
0:10:28 In other words,
0:10:30 she’s not human.
0:10:33 And that obviates the risk of rejection
0:10:35 and the other complexities of real-life relationships.
0:10:39 The skills developed, or not,
0:10:41 in the pursuit of organic love
0:10:43 are key skills that serve men well
0:10:46 in a variety of environments for the rest of their lives.
0:10:49 We’ve been taught to believe
0:10:50 that the menace to society
0:10:52 was the fraternity alpha male.
0:10:54 It isn’t.
0:10:58 Society is being subjected to the sociopathy
0:10:59 of a bunch of tech CEOs
0:11:01 who, in my view,
0:11:03 did not get laid enough as young men.
0:11:06 Most leaders, however,
0:11:08 hone skills from mating
0:11:10 that have been key to their success.
0:11:14 Show me a guy who is competent in a bar,
0:11:15 and I’ll show you someone
0:11:17 who can be reasonable in a boardroom.
0:11:20 Show me a guy who objectifies women,
0:11:23 building an app that pits women against one another
0:11:26 based solely on their physical attributes,
0:11:28 and I’ll show you Mark Zuckerberg,
0:11:30 and an app whose algorithms
0:11:32 encourage girls to sexualize themselves
0:11:36 and young people to generally feel shittier about themselves.
0:11:41 Sexual desire is fire.
0:11:43 Without this fire,
0:11:45 our species goes out of business.
0:11:46 Unfortunately,
0:11:50 we’ve built a fire-retardant generation.
0:11:53 Zoomers prefer staying home
0:11:55 and scrolling to going out,
0:11:57 and when they do venture out,
0:11:59 they’re less likely to visit a bar,
0:12:00 reducing the chances
0:12:02 they’ll make a series of bad decisions
0:12:03 that might pay off.
0:12:04 By the way,
0:12:07 I believe the anti-alcohol movement
0:12:09 is second only to remote work
0:12:11 in the damage it’s doing to young people.
0:12:14 The risk to a 25-year-old liver
0:12:16 is dwarfed by the social isolation
0:12:18 and loneliness epidemic
0:12:20 plaguing America’s youth.
0:12:23 Think of the most important things in your life,
0:12:25 who you decided to have kids with
0:12:27 and the friends you still count on.
0:12:28 Then ask,
0:12:30 did alcohol lubricate
0:12:32 the often awkward formation
0:12:34 and cementing of those bonds?
0:12:37 Despite the risk
0:12:38 to our one and only God,
0:12:40 shareholder value,
0:12:42 one-third of workers
0:12:44 say they’ve had a workplace romance.
0:12:46 This is verboten,
0:12:48 but it shouldn’t be.
0:12:51 Work is a great place to find a mate.
0:12:53 The rules don’t apply, however,
0:12:55 if you’re the founder of a tech firm.
0:12:56 See above men
0:12:57 who didn’t get laid in college.
0:12:59 The culture wars
0:13:01 are another fire retardant.
0:13:03 Richard Reeves,
0:13:04 the president of the
0:13:06 American Institute for Boys and Men,
0:13:08 recently told Vox
0:13:11 that men know what not to do on a date.
0:13:13 Don’t mansplain,
0:13:14 don’t be toxic,
0:13:15 don’t be a predator,
0:13:15 don’t be a creep.
0:13:18 But they’re clueless
0:13:21 about what to do on a date.
0:13:25 We’ve pathologized the pursuit of sex
0:13:28 and made porn the path
0:13:31 of exponentially less resistance.
0:13:34 In news that won’t surprise anyone,
0:13:37 dampening the fire that fuels casual sex
0:13:39 and dating has coincided
0:13:41 with the U.S. birth rate
0:13:42 hitting an all-time low.
0:13:45 Global birth rates
0:13:46 are also plummeting.
0:13:47 According to Pew,
0:13:51 63% of men under 30
0:13:51 are single,
0:13:54 compared with 34% of women,
0:13:55 i.e. the women
0:13:57 are dating older guys.
0:13:59 More than half
0:14:00 of single Americans
0:14:01 say they’re not currently
0:14:02 looking for a relationship
0:14:04 or casual dates.
0:14:06 Another study found
0:14:08 the percentage of sexually inactive men
0:14:09 ages 18 to 24
0:14:12 increased from 19% in 2002
0:14:15 to 31% in 2018.
0:14:18 The percentage of sexually inactive
0:14:19 young women
0:14:21 increased from 15%
0:14:23 to 19%
0:14:24 over the same period.
0:14:28 I graduated, barely,
0:14:29 from UCLA
0:14:31 with a 2.27 GPA.
0:14:33 I did, however,
0:14:34 go on campus
0:14:35 almost every day.
0:14:37 Specifically,
0:14:38 I left my fraternity
0:14:40 to venture on campus
0:14:41 as UCLA
0:14:42 in the 80s
0:14:44 was like a Cinemax film
0:14:45 set in Brentwood.
0:14:46 I would hang
0:14:47 at North Campus
0:14:48 with friends
0:14:48 and,
0:14:49 to be blunt,
0:14:51 hope to meet someone
0:14:52 I might,
0:14:52 note,
0:14:53 might,
0:14:54 is doing a lot of work,
0:14:56 have sex
0:14:56 and establish
0:14:58 a relationship with.
0:14:58 If I’d had
0:14:59 on-demand porn
0:15:00 on my phone
0:15:01 and computer,
0:15:02 I’m not sure
0:15:04 I would have graduated
0:15:05 as I would have lost
0:15:06 some of the incentive
0:15:08 to venture on campus.
0:15:10 I just read
0:15:10 the previous sentence
0:15:12 and it sounds crass
0:15:12 and shallow,
0:15:14 but it’s also accurate.
0:15:16 And that’s the rub,
0:15:17 so to speak.
0:15:19 Porn can reduce
0:15:19 your ambition
0:15:20 to take risks,
0:15:22 become a better person,
0:15:23 and build a better life.
0:15:25 The best thing
0:15:25 in my life
0:15:27 is raising two men
0:15:28 with a competent,
0:15:29 loving partner.
0:15:30 The catalyst
0:15:32 for me risking
0:15:32 humiliation,
0:15:34 approaching her
0:15:36 at the Raleigh Hotel pool,
0:15:37 and introducing myself
0:15:38 wasn’t a desire
0:15:39 to someday qualify
0:15:41 for lower car insurance rates,
0:15:43 but the desire
0:15:43 slash hope
0:15:45 to have sex.
0:15:46 By the way,
0:15:47 our oldest son’s
0:15:49 middle name is Raleigh,
0:15:50 and I’m taking him
0:15:51 on a college tour
0:15:51 next week.
0:15:55 The key to success
0:15:55 isn’t getting
0:15:56 an investor,
0:15:57 employer,
0:15:58 or woman
0:15:59 to say yes.
0:16:01 It’s putting yourself
0:16:01 in situations
0:16:03 where you take risks,
0:16:04 get a no,
0:16:06 and realize
0:16:07 you’re fine,
0:16:08 i.e.,
0:16:09 build resilience.
0:16:11 And while it’s great
0:16:13 that social norms
0:16:14 have helped more women
0:16:15 feel comfortable
0:16:16 asking men out,
0:16:17 the default setting,
0:16:18 the expectation,
0:16:20 continues to be
0:16:20 that men
0:16:22 make the first move.
0:16:24 Among Zoomers,
0:16:25 one study found
0:16:26 men paid for all
0:16:27 or most
0:16:28 of a couple’s dates
0:16:30 90% of the time.
0:16:31 On first dates,
0:16:33 80% of men
0:16:34 expect to pay
0:16:36 and 55% of women
0:16:37 expect him to pay.
0:16:39 I’ve told my boys
0:16:40 that whenever they are
0:16:41 in the company of women,
0:16:42 they pay.
0:16:44 Can’t wait for the shit
0:16:45 on that one.
0:16:47 I coach a number
0:16:48 of young men.
0:16:49 It’s unrealistic
0:16:50 to tell them
0:16:51 to abstain from porn.
0:16:53 And there is evidence
0:16:54 that porn consumption
0:16:56 is fine in moderation.
0:16:57 The problem
0:16:59 is losing the fire,
0:17:01 the sexual desire
0:17:02 that inspires you
0:17:03 to be a better man,
0:17:04 to have a plan
0:17:06 for economic viability,
0:17:07 to be fit,
0:17:08 to demonstrate
0:17:08 kindness,
0:17:09 intelligence,
0:17:10 and a willingness
0:17:11 to take risks,
0:17:13 to build resilience
0:17:14 and develop the ability
0:17:16 to express romantic interest
0:17:17 while making someone
0:17:18 feel safe.
0:17:21 We have companies
0:17:22 with infinite resources
0:17:23 and command
0:17:25 of godlike technology
0:17:26 all attempting
0:17:28 to convince young men
0:17:28 they can have
0:17:30 a reasonable facsimile
0:17:31 of life on a screen
0:17:32 with an algorithm.
0:17:35 The most frightening data
0:17:36 I’ve seen recently
0:17:38 is that 51% of men
0:17:40 aged 18 to 24
0:17:42 have never asked
0:17:43 a woman out in person.
0:17:45 I find this
0:17:46 so fucking depressing.
0:17:49 Romantic comedies
0:17:49 are two hours,
0:17:50 not 15 minutes,
0:17:52 for a reason.
0:17:54 Relationships
0:17:54 and mating
0:17:55 are hard
0:17:57 and worth it.
0:18:00 We need more venues,
0:18:01 national service,
0:18:02 third places,
0:18:03 freshman seats,
0:18:04 the office,
0:18:05 where young people
0:18:06 can meet.
0:18:08 And men
0:18:08 need to recognize
0:18:10 there’s a profit motive
0:18:11 in dampening
0:18:12 the flames of desire
0:18:13 and motivation
0:18:14 to become better men.
0:18:15 In sum,
0:18:16 as I said
0:18:17 on Bill Maher’s show,
0:18:19 young men
0:18:20 need to get out
0:18:20 of the house,
0:18:22 take risks,
0:18:23 and demonstrate
0:18:24 excellence
0:18:25 so they can make
0:18:26 their own bad porn.
0:18:31 Life is so rich.