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0:00:34 Today’s number 41,000.
0:00:39 That’s how many social media posts have the hashtag #tiktokrefugee at the time of this
0:00:40 recording.
0:00:43 Ed, what is a negative thought?
0:00:44 What?
0:00:45 TikTok.
0:00:56 That’s kind of an existential one.
0:01:01 It’s like that joke I heard that a Holocaust survivor ends up in heaven and he says to
0:01:05 God, “Hey, I’m thinking about telling a Holocaust joke,” and he’s like, “No, no, no,
0:01:06 Holocaust jokes.
0:01:07 It’s just not funny.”
0:01:11 And then the Holocaust survivor says, “Well, I guess you had to be there.”
0:01:13 It really gets you thinking.
0:01:14 Two bombs in a row.
0:01:18 Well, I wanted to go after the Catholic church, but I was worried our interns are going to
0:01:20 be witnesses in the lawsuit.
0:01:22 Yeah, you’ve never done that before.
0:01:26 My role model, Sam Harris, I’m totally backbelling right now, says, “If you’re wealthy and you
0:01:29 have people who love you unconditionally, you should speak your mind.”
0:01:30 I’m speaking my mind.
0:01:31 That’s very good.
0:01:33 Have you seen what Sam Harris has been saying about Elon Musk?
0:01:34 Well, you tell me.
0:01:35 What is he saying?
0:01:37 I know it, but the viewers don’t know it.
0:01:41 I’m trying to remember it exactly, but he basically described how he fell out with Elon
0:01:47 Musk and Elon Musk made this bet with Sam Harris where he said, “I will bet you a million
0:01:54 dollars that we will not see 35,000 cases of COVID in the United States.”
0:01:58 And Sam Harris was like, “Well, that’s ridiculous because the estimates that we’re going to
0:02:02 have a million deaths, not cases, but deaths in the US.”
0:02:04 He says, “Why don’t we make it a little fairer?
0:02:09 How about I’ll take you up on the bet, except let’s make it three and a half million cases,
0:02:10 not 35,000.”
0:02:14 And Elon said, “No, no, no, make it 35,000 cases.”
0:02:20 So then a week later, they find out that there have already been 100,000 deaths plus several
0:02:21 more cases.
0:02:24 Sam Harris reaches out, says, “I think I’ve won the bet.”
0:02:30 Elon ghosts him and then starts to deride him on social media.
0:02:37 And now Sam Harris, because he’s shitposting him even more, is dealing with strangers coming
0:02:41 up to his house and making death threats.
0:02:44 And it’s all because Elon Musk has been shitposting him.
0:02:48 So I just thought it was just a powerful indictment of Elon and his character.
0:02:54 I think we all know this, but I love that it’s coming from one of his former best friends.
0:02:57 One of those two tells the truth all the time.
0:02:58 One of them doesn’t.
0:03:00 And you guess who is who.
0:03:08 So when Sam says something, you can trust it’s the truth or that he’s a good actor.
0:03:10 And I find it gives people the benefit of the doubt.
0:03:12 I’m an enormous fan.
0:03:18 And one of those individuals serves as a role model for me as a father and as an American.
0:03:21 So anyway, so what’s the difference between COVID and a priest?
0:03:22 Just kidding.
0:03:23 I’m not even going there.
0:03:25 I’m not even going there.
0:03:26 I’m not even going there.
0:03:30 Tell us what we’re talking about today, and then I’ll get into my job and read us the
0:03:31 headlines.
0:03:35 Today’s episode, first off, is presented by Funrise, two words, first word, cut and second
0:03:36 ching.
0:03:39 We’re whores, but we’re expensive whores.
0:03:41 Whenever the ad people call me and say, “Will you do this ad?”
0:03:44 I’m like, “I don’t know how much are they offering?”
0:03:49 We’re going to be talking about United Health’s first earnings call since the CEO shooting
0:03:52 in a banner year for the big banks.
0:03:54 Ed, what else is going on?
0:03:55 What are we doing here?
0:04:04 Let’s start with the weekly review of Market Vitals.
0:04:09 The S&P 500 rallied, the dollar fell, Bitcoin climbed, and the yield on tenure treasuries
0:04:11 dropped, shifting to the headlines.
0:04:17 The Consumer Price Index increased 2.9% in December from a year earlier and rose just
0:04:19 0.4% month over month.
0:04:26 Core CPI also came in lower than expected, providing further evidence of easing inflation.
0:04:29 That encouraging report drove all three major indices higher.
0:04:34 Meta is laying off approximately 5% of its workforce as part of an effort to phase out
0:04:35 lower performers.
0:04:39 CEO Mark Zuckerberg stated that the cuts are essential to ensure the company maintains,
0:04:42 quote, “the strongest team possible.”
0:04:46 And finally, the Supreme Court has upheld the federal TikTok ban, but the app’s future
0:04:48 remains uncertain.
0:04:51 Trump has stated that he may issue an executive order to delay the enforcement of the ban
0:04:53 for at least 60 days.
0:04:59 Scott, starting from the top, pretty positive CPI report, especially the core CPI, your
0:05:03 thoughts on inflation tamping down a little bit.
0:05:05 Yeah, well, the market had a collective sigh.
0:05:09 It had its best days since November 6, and bond yields moved lower.
0:05:16 The S&P erased its 2025 losses year-to-date and popped 2%, the 10-year fell 15 basis points,
0:05:20 which, as we keep saying, is now the adult in the administration.
0:05:25 Treasury yields are a benchmarking for borrowing costs across the economy, and when yields
0:05:29 drop, borrowing costs become cheaper for businesses and consumers, essentially a tax cut, which
0:05:32 can stimulate economic growth.
0:05:34 So I think this is good.
0:05:39 More inflation, I think it strips out more volatile things, including, I think food and
0:05:40 energy, what it strips out.
0:05:45 And the reason that we have that is because, as you said, food and energy prices are very
0:05:46 volatile.
0:05:53 So generally speaking, economists prefer to use the core CPI when trying to understand
0:05:54 these trends.
0:05:56 It’s funny that we’ve become obsessed with inflation.
0:06:00 I remember you were too young for this, like 15 years ago, all we could talk about was the
0:06:04 Greek sovereign bonds defaulting, and that was going to infect Europe, and we just became
0:06:05 obsessed with it.
0:06:08 It seems like now we’re obsessed, and maybe it’s more justified now.
0:06:11 Yeah, I was thinking about that when I was 10 years old.
0:06:12 Oh, there you go.
0:06:13 Rub it in my face again.
0:06:14 We know you’re young.
0:06:15 We know you’re young.
0:06:18 So inflation has sort of become the thing that everyone’s going to keep their eye on,
0:06:23 and I’m fascinated by what’s going to happen in terms of inflation or how we’re going to
0:06:27 link it to the rebuilding of LA, but it’s going to be really interesting to see what
0:06:32 the tenure does over the next few months because, well, the Fed has been cutting rates.
0:06:34 The tenure said, “Hold my beer,” and it’s not coming down.
0:06:39 I mean, it’s sort of almost like further mistrust in our institutions.
0:06:44 The markets would choose to follow the tenure in terms of its own interest rates.
0:06:46 It’s now saying, “Oh, we don’t care.”
0:06:50 Yeah, I think the most interesting thing here isn’t necessarily the inflation data itself,
0:06:54 but the market’s reaction to the inflation data, and as you point out, the thing that
0:07:00 has, I think, been slightly confusing people, or at least grabbing their attention, is the
0:07:06 fact that the stock market has been sliding over the past few months, certainly since
0:07:11 the election, and also, as you say, the 10-year yield is rising, meaning that people are selling
0:07:13 off their treasury.
0:07:18 So investors have just been anxious about the economy, and I think the question has been
0:07:20 like, what are they specifically anxious about?
0:07:22 Are they anxious about Israel?
0:07:23 Are they anxious about Ukraine?
0:07:24 Is it something to do with Trump?
0:07:31 And I think this reaction, where you had the inflation data come in softer than expected,
0:07:38 and then suddenly the market ramps up, and you see an increased demand in treasuries,
0:07:43 that’s basically the confirmation that the number one concerns for investors right now
0:07:44 is inflation.
0:07:48 And this is the market trying to tell us, this inflation thing, you might have thought it
0:07:52 was over, but we don’t think it’s over yet, and this is something we cannot forget about.
0:07:58 And I think the hope for investors would be that Trump, as he swears in for his second
0:08:04 term, will be thinking about this, and perhaps rethinking some of his fiscal policies that
0:08:08 are expected to increase inflation over the next year or so.
0:08:12 So I think it’ll be interesting to look at the inflation, and also, as you say, very
0:08:16 interesting to look at the 10-year yield, because that’s sort of the signal like, how
0:08:22 confident are investors in the economy really, as you said, the adult in the room, which
0:08:23 I think is a good way to put it.
0:08:29 Well, look at the trifecta here of inflation is putting a chill over immigration, both legal
0:08:34 and illegal, tariffs, and the expectations of deficits.
0:08:39 It’s literally like, how could we vent away to start spooking the market?
0:08:41 And I expect the 10-year to go higher.
0:08:42 We’ll see.
0:08:47 Your reaction to Mark Zuckerberg’s announcement, yet another announcement, he’s laying off
0:08:48 5% of the employees.
0:08:51 Look, there’s one kind of, there’s only one kind of person that likes Mark Zuckerberg,
0:08:52 and that’s shareholders.
0:08:58 And I find that he just approaches his business as a new pred capitalist.
0:09:00 This is the part of him I respect the most.
0:09:06 And I’m a big believer in capitalism, and part of capitalism is that there are winners
0:09:11 and losers, and you can’t reward the winners without punishing the losers.
0:09:16 And I’m not calling these people losers, but I used to talk about this a lot, or I do talk
0:09:20 about, oh, I’ve never managed a big business, but I’ve managed businesses with hundreds
0:09:24 of people, and I’ve always thought it’s important to fire people.
0:09:27 And I find over the short term, it’s bad for morale, and over the medium and the long-term,
0:09:33 especially if you do it as what I’ll call, not layoffs, but kind of performance-based
0:09:37 terminations and say, we appreciate you.
0:09:40 There’s a reason you’re working so fucking hard, and it pays off.
0:09:44 And if you aren’t working hard and you aren’t good, this isn’t a place for you, and it might
0:09:49 not be your fault, it might be part of the culture’s fault, but my approach as a board
0:09:54 member and as a CEO has always been, you know, when things aren’t working, and you start
0:10:00 making excuses, the worst days I’ve had professionally are when I know I need to lay off somebody.
0:10:02 And I constantly delay it.
0:10:05 I come and think, okay, I got a firebob.
0:10:08 And then I’m like, oh shit, and I delay it to the next day.
0:10:13 And intellectually, I know, or the way I approach it is, your gut is almost right.
0:10:15 When it’s not working, it’s not going to work.
0:10:19 And I find the sooner you make the decision, I’m fairly repacious and Darwinian about
0:10:22 making the decision, the more generous you can be.
0:10:27 So I think you’re fairly Darth Vader on the actual decision, but then you turn into Mother
0:10:32 Teresa because the sooner you can lay off somebody, you say to them, one, you may be
0:10:34 pissed off, you may not agree, but I don’t want you to be scared.
0:10:37 We’re going to give you a lot of severance.
0:10:41 Stick around, figure out the communication strategy to the rest of the firm or to the
0:10:42 broader world.
0:10:44 So it doesn’t ding your brand.
0:10:46 How can I be helpful?
0:10:52 But I’m fairly Darwinian about the decision and his saying corporations need more masculine
0:10:54 energy is just fucking stupid.
0:11:00 But saying we’re a big company, we’ve hired like crazy, we probably have AI, you know,
0:11:01 we can do more with less.
0:11:04 We’re going to take out the bottom 5% of performers.
0:11:07 I think it creates a very tense environment for about a week.
0:11:09 And then over the long term, I think it’s good.
0:11:10 It’s the right thing to do culturally.
0:11:15 I think it’s a key component of capitalism and also what people don’t also acknowledge
0:11:20 is those 5% at Metta, they were going to go nowhere fast.
0:11:26 And so the ability or forcing them to go find somewhere, somewhere they’re going to do better.
0:11:31 Someone laid off at Metta in wherever they are, San Francisco or the seventh ring of
0:11:37 hell or Tatooine, wherever they, whatever bond layer they’re holed up in, they’re going
0:11:38 to be fine.
0:11:45 So they may not realize it, but I would bet 80 to 90% of them will look back and go, that
0:11:48 was kind of a blessing in disguise because I went somewhere where my skills were just
0:11:50 more appreciated.
0:11:51 You mentioned AI there.
0:11:55 I think this is especially important given what Zuckerberg said on the Joe Rogan podcast
0:11:58 about AI and its use at Metta.
0:12:05 Probably in 2025, we at Metta, as well as the other companies that are basically working
0:12:14 on this, are going to have an AI that can effectively be a sort of mid-level engineer
0:12:17 that you have at your company that can write code.
0:12:21 And once you have that, then in the beginning, it will be really expensive to run and then
0:12:22 you can get it to be more efficient.
0:12:28 And then over time, we’ll get to the point where a lot of the code in our apps and including
0:12:33 the AI that we generate is actually going to be built by AI engineers instead of people
0:12:34 engineers.
0:12:41 So interesting because he’s basically saying that in 2025, this year, mid-level software
0:12:47 engineers at Metta will probably be replaced by AI, then follows up with that with this
0:12:53 announcement that he’s laying off 5% of the workforce, which is 3,600 people roughly.
0:12:57 I think from a business perspective, he’s making all of the right decisions.
0:13:03 He’s cozying up to Trump, he’s embracing AI, he’s fostering this competitive workplace
0:13:06 culture, which is all good news for shareholders.
0:13:12 But the thing that I don’t fully understand from a more PR perspective is the timing of
0:13:13 all this.
0:13:18 And that is, these are all controversial things to say.
0:13:21 And he has made these announcements in a matter of days.
0:13:28 And most of them, quite frankly, have made him out to be or look like a dick or out of
0:13:29 touch in some way.
0:13:32 I mean, he’s totally alienated the left.
0:13:38 And meanwhile, on the right, from what I’ve seen on X, formerly known as Twitter, most
0:13:42 Republicans are finding him disingenuous because they think he’s groveling to Trump
0:13:45 and just doing whatever he can to enrich himself.
0:13:49 So I think there’s two parts of this.
0:13:53 There’s the business side, which I think is genius, but then there’s the public relations
0:13:59 and image side, which I feel like it’s not the best idea to be making all of these controversial
0:14:04 announcements that don’t make you out to be the nicest guy in the world within a matter
0:14:05 of days.
0:14:07 Yeah, I kind of think Honey Badger don’t care.
0:14:10 And he’s putting this news out, starting it out with the kitchen sink.
0:14:11 He’s got a lot of negative press.
0:14:14 The news cycle is very crowded.
0:14:19 This story will come and go in 24 hours because everyone’s going to be totally obsessed with
0:14:25 this bad reality show and all these people bending the knee to the new king of Westeros.
0:14:26 True.
0:14:27 Maybe it’s perfect timing.
0:14:29 As a matter of fact, I think we should laugh about 50% of our staff.
0:14:30 What do you think?
0:14:31 Yeah, exactly.
0:14:33 I was waiting for that.
0:14:35 Let’s just touch on TikTok.
0:14:43 So we’re recording this before we know actually whether it is going to go lights out or not.
0:14:45 But let’s just play hypothetical here.
0:14:49 Let’s just sort of imagine that TikTok does disappear.
0:14:53 And let’s just think about what that would look like and what would happen in the economy.
0:14:57 And I’ll just start off with an interesting analysis from Bernstein, which is an advisory
0:14:58 firm.
0:15:04 So they found that Americans watched TikTok in 2024 for a cumulative 3.3 trillion minutes,
0:15:06 which is just pretty astounding.
0:15:13 And assuming that 100% of those minutes will be migrated to other platforms if TikTok shuts
0:15:21 down, they estimate that 5% of those minutes will go to Snapchat, 25% will go to YouTube,
0:15:28 and 60% will go to Instagram and Facebook, and the remaining 10% will go to other platforms.
0:15:35 And so when you consider the fact that last year TikTok generated an estimated $22 billion
0:15:40 in U.S. ad revenue, and to be clear, that is an estimation because TikTok is a private
0:15:43 company and they don’t really release their financials.
0:15:47 If we assume that and if we assume that Bernstein is correct with their analysis, then that
0:15:54 means that Metta overnight will add an extra $13 billion in revenue next year, which would
0:15:59 increase Metta’s annual revenue by almost 10% in one go.
0:16:05 So I would like to get your reaction to that statistic, but also just what do you think
0:16:06 is going to happen here?
0:16:10 What does a media ecosystem look like with no TikTok?
0:16:15 So Metta’s price of sales ratio was about 10.
0:16:19 You say they’re going to get about another, what, $13 billion in revenue, you think?
0:16:20 Assuming all of this goes to plan.
0:16:26 So assuming the $22 billion, assuming the 60%, it’s all hypothetical, but yes, that
0:16:27 is the number.
0:16:33 So that’s hypothetically a $130 billion increase in value, Zuck, that’s about 15%.
0:16:39 So that’s about a $20 billion if, I mean, Zuck would really like to see TikTok get banned.
0:16:43 I mean, there’s a couple of things here, one, I think it’ll dramatically improve my relationship
0:16:45 with my 14-year-old.
0:16:48 I think that the majority of, and I’m only kind of kidding.
0:16:53 I think the majority of agitane anxiety in my household is over social media usage and
0:16:54 specifically TikTok.
0:16:58 And for the people out there who are saying this is bad parenting, that means you don’t
0:17:00 have kids and please shut the fuck up.
0:17:04 Yeah, but you’re making one mistake, which is I don’t think he’s just going to suddenly
0:17:06 stop scrolling on his phone.
0:17:08 It’s just going to migrate somewhere else.
0:17:10 Yeah, that might be right.
0:17:14 My observation around the TikTok ban is the thing I’m most disappointed is a bunch of
0:17:19 Democrats, including Wyden and Markey and Wyden was the famous co-author of what is arguably
0:17:23 the most damaging legislation in history, section 230, have all of a sudden, they’re
0:17:27 all of a sudden scrambling to try and extend the deadline, right?
0:17:30 Even Democrats are saying, is there a way we can figure out a way?
0:17:33 And I think this has bigger ramifications than TikTok.
0:17:39 And that is we’re likely going to be in several pretty serious confrontations with Xi Jinping
0:17:45 over the next 10 years or the CCP, whether it’s Taiwan or trade agreements.
0:17:48 And quite frankly, Ed, we’re blinking.
0:17:53 The president signed into law a ban on TikTok saying you need to divest or by January the
0:17:58 19th, you know, whatever it was, six months or nine months, we’re banning you and here
0:17:59 we are.
0:18:01 And we’re blinking.
0:18:04 China has called, China has said, hold my beer.
0:18:06 I’m not, at this point, I’m not divesting.
0:18:09 And we’re saying, oh, wait, wait, wait, let’s give them more time.
0:18:12 Do you really think they’re going to divest if we give them more time?
0:18:15 All we’re saying is we’re not serious.
0:18:19 So I think this is sort of indicating that we’ll blink first across this and perhaps
0:18:23 more important negotiations.
0:18:31 I will tie a bell on this conversation with TikTok users have been migrating in mass
0:18:36 to a different app called Red Note, and this is this Chinese version of Instagram.
0:18:38 Yeah, another Chinese one, right?
0:18:39 Exactly.
0:18:43 It was the most downloaded free app in the US Apple store last week.
0:18:46 And this is the best start right as that migration was happening.
0:18:55 Duolingo, the language learning app reported a 216% spike in US users learning Chinese.
0:18:59 So you got all these people who are on TikTok who are deciding they’re going to go to a
0:19:00 new platform.
0:19:06 And that new platform happens to be another Chinese social media app called Red Note.
0:19:08 I don’t think this is going to be a lasting thing.
0:19:13 I think people are mainly doing it as a meme because it’s kind of funny to just go to another
0:19:14 Chinese app.
0:19:19 It’s sort of a metaphorical finger to the US government, I think.
0:19:23 And I think these TikTok users are very upset about this ban.
0:19:27 But I just find it hilarious that, I mean, they’ve just substituted one Chinese app for
0:19:28 another.
0:19:29 The new one is Red Note.
0:19:33 Okay, we’ll be right back after the break with a look at UnitedHealth’s earnings call.
0:19:37 If you’re enjoying the show so far and you haven’t subscribed, be sure to give ProfG
0:19:49 Markets a follow wherever you get your podcasts.
0:19:51 Support for the show comes from the FunRise Innovation Fund.
0:19:55 The investing world seems to be bending towards democratization, but venture capital always
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0:20:59 We’re back with ProfG Markets.
0:21:03 UnitedHealth released its first earnings report since the death of executive Brian Thompson.
0:21:07 While the company posted record full-year revenue, its quarterly revenue fell short
0:21:11 of analyst expectations and the stock fell more than 4%.
0:21:15 During the earnings call, CEO Andrew Whitty paid tribute to Thompson, reflecting on his
0:21:17 dedication to his job at the company.
0:21:22 He then pivoted to address larger issues within the healthcare industry, placing significant
0:21:27 blame on drug companies for driving up healthcare costs nationwide.
0:21:33 So Scott, we were talking before the earnings call about what we thought might happen, and
0:21:39 you made this interesting point that you thought that they would try to, in some way, sandbag
0:21:44 the financials, i.e., they don’t want to be appearing too profitable right now, given
0:21:47 everything that’s happening in the news with UnitedHealth.
0:21:51 And so maybe they’ll somehow downplay how well they did.
0:21:58 Well, I have one insight to report, which is that the company hit full-year revenue
0:22:02 of $400 billion, which was a record for the company.
0:22:03 So it was a big year.
0:22:07 But in the press release and in the earnings call, which we listened to, they actually
0:22:09 never called it a record.
0:22:14 They just said revenue increased 8% to $400 billion.
0:22:19 And in any other situation, you would think that a company would want to brag about this.
0:22:23 They’d want to brag about the fact that they hit record revenues in 2024.
0:22:25 They decided not to on this occasion.
0:22:33 So my question to you, was this an intentional decision by UnitedHealth to downplay their
0:22:34 financial results?
0:22:35 Okay.
0:22:38 So imagine this earnings call.
0:22:43 Our thoughts and prayers go out to the family of Brian Thompson in the wake of this tragedy.
0:22:49 But on the plus side, our willingness to deny people claims and tell them that their, not
0:22:55 only does their wife have lung cancer, but we’re going to bankrupt them because we figured
0:22:57 out a way to deny the claim.
0:22:59 And it’s really paying off for us.
0:23:02 We had record revenues.
0:23:05 And then pause and wait for the applause.
0:23:13 There was no way, no way he was going to get on this earnings call and do anything but
0:23:17 sound sanguine and like things are hard for us.
0:23:19 This was, we were talking about this yesterday.
0:23:27 I can’t imagine a more stressful IR pre-earnings game than what was going on with the CEO.
0:23:32 I started saying, no, no, no, no, don’t say the word we’re optimistic.
0:23:33 Look sad.
0:23:34 Look bereft.
0:23:37 Look like things are really hard here at United.
0:23:43 It’s just, oh my God, things are tough for us because he could not get on this earnings
0:23:48 call and you just pointed out, and I said, find out what’s going on.
0:23:51 Record revenues, but they have record revenues.
0:23:55 Any other company that had record revenues would be like, I’m proud to announce that
0:23:57 we experienced record revenues.
0:23:59 Didn’t say that, did he?
0:24:06 And this has inspired an interesting conversation around the correlation between denying people
0:24:11 their healthcare coverage and profitability and a nation where it is much easier to get
0:24:16 an assault rifle or build a ghost gun than it is to get health insurance and possibly
0:24:20 get that fucking health insurance company to cover your claims.
0:24:26 The argument from the CEO, and he addressed this head on, the argument was that United
0:24:30 Health is squarely not to blame for the high cost of healthcare in America.
0:24:36 And he said quite clearly on the call, which we listen to, that the ones who are to blame
0:24:37 are the drug manufacturers.
0:24:43 In fact, he argued that United Health and the pharmacy benefit managers that United Health
0:24:48 runs, like OptumRx, he argued that they are the ones responsible for actually keeping
0:24:50 costs down.
0:24:57 Now I don’t know if that’s true because the industry is extremely complex and I just
0:25:01 struggled to wrap my head around it, but there is evidence to suggest, and this was laid
0:25:07 out in this report by a representative, Comer out of Kentucky, that actually pharmacy benefit
0:25:09 managers drive costs up.
0:25:14 They say their job is to decrease costs, but they also benefit from a dynamic where drugs
0:25:19 cost a lot because the higher the price of the drug, the larger the rebate and the way
0:25:25 these benefit managers make money is through taking a cut of that rebate.
0:25:29 And I was thinking about all of this and just the complexity of the issue, and it brought
0:25:35 me back to something that Luigi Mangione said in his manifesto, and I want to be clear,
0:25:38 I am not glorifying this guy, what he did is terrible, let’s just put it out there,
0:25:39 but this is quite interesting.
0:25:44 He said in the manifesto, “These companies have simply gotten too powerful and they continue
0:25:48 to abuse our country for immense profit because the American public has allowed them to get
0:25:49 away with it.”
0:25:55 Obviously, the problem is more complex, but I do not have the space, and frankly, I do
0:26:00 not pretend to be the most qualified person to lay out the full argument, but many have
0:26:05 illuminated the corruption and greed decades ago and the problem simply remain.
0:26:11 And interestingly, I found that this relates a lot to a conversation we had last week about
0:26:15 another big problem in America, which is the cost of housing.
0:26:20 I criticized the real estate investment firms, the companies like Blackstone and Greystar
0:26:26 and Cushman and Wakefield, and you pointed out to me that actually the issue is probably
0:26:29 more nuanced than just these big firms are bad.
0:26:33 And my pushback was essentially, “Well, Scott, I don’t care about the nuances, I think the
0:26:38 problem is so bad, I’m no longer interested in discussing the finer details.”
0:26:44 And I find myself at this point again, and I think this is the rift we are contending
0:26:49 with now in America, because yes, these issues are complex.
0:26:54 Yes, maybe United Health isn’t solely to blame for the cost of health care in America, but
0:27:01 I wonder if there comes a point at which we will just reject the argument of nuance, reject
0:27:06 the argument of complexity, and say, “You know what, enough is enough, maybe we don’t
0:27:12 understand this, maybe this is way more complex than our simple regular folk can understand,
0:27:18 but the outcome is very clear, we are getting screwed and you must do something about it.”
0:27:25 So I guess my question to you would be, are there ever situations, do you think, where
0:27:31 the answer actually isn’t to try to understand the nuances, but instead to just wholesale
0:27:35 reject the arguments of the other side, in this case United Health, and say, “You know
0:27:39 what, no, we’re not listening to this anymore, something has to change and we don’t care
0:27:41 how it gets changed.”
0:27:50 I like your indignance and your outrage is legitimate and it’s authentic and justified.
0:27:53 You have to have nuance, even if you want to move to solutions, you’re going to have to
0:27:59 understand the nuance of the very complicated situation, and in his instance, or in the
0:28:05 case of the CEO, inspiring a question, “Is it the insurance industry or is it the pharmaceutical
0:28:06 industry?”
0:28:13 Yes, and what you have is essentially in a capitalist society, if you don’t have certain
0:28:17 guardrails and a certain understanding that certain regulatory intervention in the operating
0:28:21 system is needed or capitalism collapses on itself, we seem to be moving towards kind
0:28:27 of the collapsing part, and that is, when you put a profit incentive around prisons, you
0:28:31 end up with the most incarcerated public in the world.
0:28:38 When you put profit incentives around rejecting claims, or you let pharmaceutical companies
0:28:44 basically concentrate, and there’s so few of them that they can command ownerless pricing,
0:28:48 and then you let them engage in Citizen United, where they can give Democratic and Republican
0:28:54 senators and Congresspeople $700,000, $800,000 a million, they will pass laws that say, “All
0:28:56 right, every nation in the world is paying less for these pharmaceuticals produced in
0:29:02 the U.S., but we figured out a way to pass laws to transfer capital from citizens to
0:29:07 these institutions,” and we’ve given them also let these insurance companies reject
0:29:08 claims.
0:29:15 So, having a profit incentive, in fact, certain social goods, creates externalities that
0:29:19 are really hard on the American public, and we end up in a situation where we’re paying
0:29:26 $13,000 for healthcare versus $6,500 in the G7, despite the fact we’re living less long
0:29:28 more anxious, more depressed, more obese.
0:29:33 So, we have hit the point where, okay, we need to do something about this.
0:29:36 You do have to have a nuanced argument to move to solutions.
0:29:40 Now, I do believe that the only way to get America to a solution is probably through
0:29:46 basic language, it’s pretty simple to understand, this good, this bad, and an idea that’s somewhat
0:29:47 simple.
0:29:52 So, people like Medicare, I would argue there’s a few basic things we need to do, and this
0:29:58 again, lacks nuance, which you seem to like, but maybe lower the age on Medicare from whatever
0:30:03 it is, 65 a year, and eventually have national and socialized medicine.
0:30:09 I’m not sure we should have, the UK system is as much as people complain about it.
0:30:13 It costs their citizens half as much, and there’s a layer of private care.
0:30:19 I engage in the private system, and that takes about 10% or 5% of the populace, they are
0:30:23 less stressed on the public system, and we got to get used to the fact that some people
0:30:25 are going to have better healthcare.
0:30:27 That’s a component of a capitalist society.
0:30:32 I also believe we’ve got to figure out a way to put most or all consumers on the hook for
0:30:37 some of these payments, so that they start shopping and they consumerize healthcare.
0:30:42 And then it just gets, the issue gets complicated and more nuanced, like, okay, well, let’s go
0:30:44 to the source of the problem.
0:30:49 We can talk about how to reduce cost-treating someone with diabetes, but until we reduce
0:30:54 the number of diabetics, it’s kind of just rearranging the deck chairs on the Titanic.
0:30:59 So we’re going to have to figure out a way to have someone in every school only preparing
0:31:05 fresh food for kids, such that they don’t start off, enter into the world obese.
0:31:09 How do we get rid of, how do we reduce the power of the food industrial complex that
0:31:13 is putting all of these dyes and shit in preservatives?
0:31:15 We’re going to have to put physical fitness back in the school.
0:31:22 I do think I want every day a list of all of the representatives and senators taking
0:31:26 money from the healthcare industrial complex and realize that they’re compromised and saying
0:31:31 we need sweeping legislation, moving towards maybe a national healthcare system, moving
0:31:39 towards programs to take obesity from 40% back to where, in Japan, it’s 4%, it’s fucking
0:31:40 4%.
0:31:43 Imagine what that does to healthcare costs when you don’t have high blood pressure and
0:31:47 diabetes to live with in a nation.
0:31:50 But I like simple programs, lower the age you qualify for Medicare every year.
0:31:55 Everyone pays 10% of their healthcare costs and all of a sudden they start going, wait,
0:31:58 I’m going to find the cheapest place to get an MRI.
0:32:03 Think about every consumer product advertises this is great and it’s less expensive.
0:32:06 When did you hear that on a pharmacy ad?
0:32:10 We can bring your blood pressure down from four bucks a pill, not 80 bucks a pill.
0:32:15 I mean, here sometimes with Viagra, right, Viagra 399, I see that on the internet.
0:32:19 But when’s the last time it said, okay, I’m going in for a mammogram and I know the cost
0:32:21 and I’m going to shop around.
0:32:24 So I think there’s several big structural changes.
0:32:26 I do think nuance is required.
0:32:31 It has gotten to a tipping point and your outrage has to be expressed by voting for people who
0:32:37 are willing to take hard change and ignore the people who have given them money, who have
0:32:42 weaponized and have regulatory capture that have taken healthcare costs from $6,500 to
0:32:43 $13,000.
0:32:44 Yes.
0:32:48 Galloway 2028, a chicken in every pot of sea, Alice in every cupboard.
0:32:52 By the way, I was looking on our Reddit page, people talking about what would happen if
0:32:53 you ran for president.
0:32:58 One of my favorite comments was that Trump would come up with just a great nickname for
0:33:01 you and one of the suggestions was that you would be Mopey Scott.
0:33:02 Mopey?
0:33:10 One of the suggestions was that your nickname would be Eaw and mine would be Tigger.
0:33:12 That’s good.
0:33:13 That’s good.
0:33:18 We’ll be right back after the break with a look at earnings from the biggest banks in
0:33:19 the US.
0:33:23 If you’re enjoying the show so far, hit follow and leave us a review on property markets.
0:33:36 Support for the show comes from the Funrise Innovation Fund.
0:33:38 Think of the five biggest names in AI today.
0:33:40 How many of these companies do you own shares of?
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0:33:44 Why is that?
0:33:47 Because the open AIs and anthropics of the world are still private.
0:33:51 That means unless you’re an employee or a VC, you’re out of luck.
0:33:54 So it isn’t hard to see why venture capital has been one of the most prized asset classes
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0:34:31 We’re back with Prof2Markets.
0:34:35 Fourth quarter earning season kicked off with Citigroup, Goldman Sachs, and JP Morgan
0:34:37 all beating analyst expectations.
0:34:39 Overall profits were stronger than expected.
0:34:44 JP Morgan had a particularly standout year as the bank reported the largest annual profit
0:34:46 in U.S. banking history.
0:34:50 As we’ve seen in previous quarters, a key driver of growth was investment banking.
0:34:58 Goldman’s investment banking revenue rose 24%, Citigroup 35%, and JP Morgan 46%.
0:35:04 So Scott, really strong quarter can get into some of the more of the specifics, but any
0:35:07 just initial gut reactions from these impressive earnings.
0:35:08 They had a great quarter.
0:35:12 When we were doing the editorial call, I was trying to understand why.
0:35:15 And one of our analysts said it’s because of volatility and trading.
0:35:17 But my guess is everything’s up across.
0:35:19 I would imagine M&A is starting again.
0:35:21 I’ll be curious if the IPO market comes back.
0:35:26 The other part of the business that is the best part of the business is wealth management
0:35:28 because it’s much more consistent.
0:35:32 I know that some of it is when interest rates go up, you have an easier time charging a spread
0:35:35 between deposits and mortgages.
0:35:40 Yeah, I think that’s definitely — I’m just higher net interest income in general with
0:35:41 higher rates.
0:35:44 I mean, I’ll just go over it really quickly.
0:35:46 I think there are two main drivers here.
0:35:49 One is the investment banking revenues, which we’ve seen.
0:35:54 So we’re seeing this increase in deal making, more M&A, which of course is great for the
0:35:59 investment banks because their job is to facilitate those transactions, and they charge a fee,
0:36:00 which leads to higher revenues.
0:36:04 And this is no different from what we saw last quarter.
0:36:06 Investment banking revenues were up by a similar amount.
0:36:11 So I think the takeaway here is, people have been wondering, is M&A coming back?
0:36:14 It’s been in a slump the past couple of years.
0:36:19 I think this is our confirmation from these bank earnings, yes, M&A is officially back.
0:36:24 I think we can expect that trend will continue, and that’s especially likely under a Trump
0:36:25 administration.
0:36:32 The second big driver of this growth is newer, and that is the trading revenue, as you mentioned.
0:36:37 And this is the money that the banks make for facilitating and executing the trades
0:36:41 of their clients, trades for stocks and trades for bonds.
0:36:45 Now, the explanation that you’re seeing a lot of in the media, which you also referenced
0:36:52 there, is something like market volatility increased trading revenues, which is sort
0:36:57 of a true statement, but it’s also a little bit of a misdirect because I think the real
0:37:02 reason we’re seeing these sales and trading desks making so much money last quarter is
0:37:08 that last quarter trading volumes exploded, not just the volatility, but the volume.
0:37:11 So you had more stock trading, more bond trading.
0:37:14 And the question, of course, is why did that happen?
0:37:17 And the answer is quite simple, is it was the election.
0:37:24 I think this is a reminder here of the power of stories and narratives in markets, because
0:37:31 what this election did is it sparked a flurry of new narratives from investors about what
0:37:35 may happen in the future, who’s going to benefit from a Trump administration, who’s
0:37:40 going to get burned, what’s going to happen to interest rates, and it’s all those stories
0:37:45 that create this energy in the market that propel people to make trades, to take bets,
0:37:47 to speculate on the future.
0:37:48 Acquire a company, right?
0:37:49 Yeah.
0:37:50 Exactly.
0:37:51 And of course, who benefits?
0:37:54 It’s the middlemen, which are the banks.
0:37:58 So I think that’s what really happened here is the banks were the beneficiaries of an
0:38:03 environment where quite simply interesting stuff was happening in the markets.
0:38:07 And the question now is, will that continue?
0:38:11 I would argue probably not, not to the extent that we saw in Q4, but having said that, Trump
0:38:13 is a very erratic person.
0:38:17 He’ll probably make some pretty controversial decisions, and I’m sure that will lead to
0:38:22 lots more interesting stories that lead to new investment theses and new trade.
0:38:26 So that’s sort of a breakdown on, I think, why we’ve seen this explosion in banks in
0:38:27 the past quarter.
0:38:31 I thought that was cogent, because what you’re summarizing, and I hadn’t zeroed in on, is
0:38:37 wait-and-see is the worst words in the world for a services industry or financial institution.
0:38:42 They don’t want people to wait and see what happens with the election around going public,
0:38:46 acquiring a company, reallocating the portfolio, moving, whatever it might be.
0:38:49 And the last kind of six months have been sort of wait-and-see.
0:38:53 And then once we had clarity around the election, whether you like the outcome or not, people
0:38:59 move to getting shit done and trading and buying and making bids for companies and doing
0:39:00 their debt offering.
0:39:03 Okay, we’re going to wait and see if interest rates come down.
0:39:04 Well, they are.
0:39:05 They are not.
0:39:06 So let’s just get on with life.
0:39:11 But I actually, I think that was a thoughtful analysis of the situation.
0:39:15 Something Jamie Dimon said on the JP Morgan earnings call, and this is a bit of a pivot
0:39:21 here, but I found this fascinating, he said, “This is a fantastic quarter, highest annual
0:39:25 profit in the history of American banking, $59 billion, just enormous.”
0:39:30 But then he said, “Two significant risks remain.
0:39:34 One going in future spending requirements will likely be inflationary, and therefore inflation
0:39:36 may persist for some time.
0:39:43 Additionally, geopolitical conditions remain the most dangerous and complicated since World
0:39:45 War II.”
0:39:47 Your reactions to Jamie Dimon’s comments.
0:39:50 I think he’s thoughtful and he kind of likes the camera.
0:39:55 I mean, he makes, look, Jamie’s, I don’t know if you saw him at six minutes ago, that was
0:39:56 very powerful.
0:39:57 He’s also very handsome.
0:40:00 I think he should have been Treasury Secretary just based on his looks.
0:40:03 He looks like he should be Treasury Secretary.
0:40:05 I love that term cautiously pessimistic.
0:40:08 I think that’s super interesting.
0:40:11 Geopolitically, are things more dangerous now than they’ve ever been?
0:40:12 I can’t tell.
0:40:16 I can’t discern between my depression and actual world events.
0:40:22 It does feel like water is at a simmer and about to boil everywhere, and it does appear
0:40:25 that the markets are climbing a wall of worry.
0:40:32 So do you take that, I mean, people would say that he’s the guy who is most in touch
0:40:34 with what is happening in the world.
0:40:39 It’s his job to understand what is going to happen tomorrow and the next day.
0:40:43 I mean, the fact that he’s calling this the most dangerous geopolitical condition and
0:40:50 the most complicated since World War II, does that make you more concerned at all, or is
0:40:52 it just a statement?
0:40:53 Well here’s the thing.
0:40:58 And Jamie is super smart, super insightful, and has no fucking idea like the rest of us.
0:41:05 And somewhere there might be someone mixing up some crazy biohazard or bioweapon that
0:41:11 they learned how to mix up using bleach and common household items with some AI LLM that
0:41:13 has no safeguards on it.
0:41:18 Or we might find that Israel is actually stabilizing the Middle East and the kingdom is going to
0:41:22 normalize relations, or we’re going to find that AI seeps into the economy and creates
0:41:26 incredible productivity and blooms of 1,000 different unicorns.
0:41:33 I mean, I can make an argument both ways, or the U.S. and China kiss and make up, or
0:41:38 that inflation runs rampant and the markets begin to crash as there’s a reallocation
0:41:44 of capital, at least markets crash in U.S. reallocation of capital into markets.
0:41:45 This all comes back to the same place to me.
0:41:49 And that is, I was a consultant, so what would go out is I would try and find people smarter
0:41:54 than me and then pair it back, their viewpoints in different boardrooms.
0:41:57 And I loved, I got very into the idea of scenario planning.
0:42:01 And scenario planning is don’t try to predict the future because nobody can.
0:42:07 The butterfly flapping its wings in the Brazilian rainforest can cause a rainstorm in Orlando.
0:42:10 And there’s just no way you can predict what this butterfly is going to do today.
0:42:16 What you want to do is outline a number of potential scenarios that seem somewhat realistic
0:42:23 or likely, and then develop a strategy that fits to the best outcome across a number of
0:42:25 those potential strategies.
0:42:32 And so your job as an investor is to recognize that, yeah, Nvidia could go down 80%, but
0:42:35 wait, yeah, it could double.
0:42:38 So what you want to do is diversify.
0:42:40 And what is in your control?
0:42:44 What is in your control is to spend less than you make and have automatic savings plans
0:42:47 recognizing that time is going to go faster than you think.
0:42:53 And then to try and diversify, right, such that all the things that are outside of your
0:42:58 control, whether it’s the Islamic Republican Iran realizing they’re losing the battle and
0:43:03 about to be overthrown, so they declare war on somebody or weaponize one of their proxies,
0:43:05 who the fuck knows?
0:43:11 But diversification and controlling what you can control, and also just for your own
0:43:15 mental health practices, and I’m trying to figure this out right now, find people and
0:43:21 things that give you comfort and give you joy and distract you from being on fucking
0:43:27 TikTok all day or watching the inauguration, i.e., watch aerial firefighters and listen
0:43:30 to InXS all day Monday.
0:43:39 Because if the inauguration and the fact that we are bringing in, making DUI hires for Defense
0:43:43 Secretary, I love that DUI hire versus DEI hire.
0:43:44 I love that.
0:43:45 That’s good.
0:43:46 That is good.
0:43:47 That triggers me.
0:43:48 That upsets me.
0:43:52 Find places in your life that give you comfort and give you peace, and you’re going to find
0:43:54 those places in your relationships.
0:43:58 You’re going to find them in physical fitness, and you’re going to find them in a recognition
0:44:03 that the 98% of your life is really good and is really positive.
0:44:09 But going back, circling back, and the way you protect yourself against the unknown, which
0:44:15 neither Jamie Dimon nor anybody else really knows, is diversification and consistently
0:44:18 investing regardless of where you think the market is.
0:44:21 Let’s take a look at the week ahead.
0:44:26 What’s the earnings from Netflix, Johnson & Johnson, and American Express, Scott & Pritchons?
0:44:32 I think inflation is going to pop up, and I think that a lot of Trump’s policies are
0:44:37 going to come to a head around when we move to the rebuilding part of the program around
0:44:43 the LA fires, and that is the expectation of deficits, the crackdown on immigration,
0:44:49 both legal and illegal in terms of the costs of rebuilding a home, tariffs that will have
0:44:55 reciprocal tariffs if they do anything stupid enough to impose these things.
0:44:58 We’re talking about a Canada, China, or Mexico.
0:45:06 I think that the LA fires are going to continue to be in the news for how they highlight Trump’s
0:45:11 massive inflationary policies as evidenced by the cost to rebuild are going to be just
0:45:18 extraordinary, and people are going to point directly to immigration, policy, tariffs,
0:45:21 and the expectation of deficits.
0:45:26 And I think to our point, the most important person in the administration who’s going to
0:45:29 play an enormous role is going to be the bond market.
0:45:34 And I think this guy, I find that luck over the long term is perfectly symmetric.
0:45:38 When you have a huge win from an investment standpoint, you want to pull in your horns
0:45:43 because it means you’re due to get pretty robustly smacked.
0:45:46 And when things aren’t going well for you, I find that you want to try and stay optimistic
0:45:50 and maybe take more risk because you’re due for some good luck.
0:45:55 I think this guy has jumped from lily pad to lily pad, and he’s going to hop onto a snake.
0:46:01 And I think that snake is, I think, the return of inflation.
0:46:04 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:46:06 Our associate producer is Alison Weiss.
0:46:10 Mia Silverio is our research lead, Jessica Lang is our research associate, Drew Burris
0:46:13 is our technical director, and Catherine Dillon is our executive producer.
0:46:17 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:46:22 Join us on Thursday for our conversation with Rich Greenfield only on ProfG Markets.
0:46:27 Lifetimes
0:46:35 You help me
0:46:38 In kind
0:46:42 Reunion
0:46:47 As the world turns
0:46:52 And the dark flies
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0:47:05 That’s right, that’s right.
0:47:08 Just so you know, we are whore-hears, we are whore-hears.
0:47:09 Whore-hears.
0:47:10 Whore-hears.
0:47:12 Our name is George, and that’s Vanyel.
0:47:13 We are whore-hears.
0:47:15 No, we’re whores, but we’re expensive whores.
0:47:18 Whenever the ad people call me and say, “Will you do this ad?”
0:47:21 I’m like, “I don’t know, how much are they offering?”
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0:01:08 – I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:12 The LA wildfires appear to be subsiding.
0:01:15 What lessons will we take from this crisis?
0:01:18 After the fire, as read by George Hahn.
0:01:29 – My hometown of Los Angeles is experiencing wildfires
0:01:31 that have torched a surface area
0:01:34 greater than Boston or San Francisco.
0:01:37 Students at UCLA, my alma mater,
0:01:40 were warned to prepare for an evacuation order
0:01:43 that thankfully didn’t come.
0:01:44 Friends lost homes,
0:01:47 others don’t know if their houses are still standing,
0:01:48 or they’re contemplating moving back
0:01:50 to what feels like a blast zone.
0:01:56 At least 12,000 structures have been destroyed.
0:01:58 The death toll stands at 25,
0:02:00 given the scale of the disaster
0:02:02 that is remarkably low in a testament
0:02:05 to the good work of frontline responders
0:02:06 and the broader community.
0:02:09 The LA fires will likely go down
0:02:14 as the costliest natural disaster in U.S. history.
0:02:18 The question now, what happens after the fire?
0:02:22 The first rule of fires is simple.
0:02:25 Everyone works together to put out the fire,
0:02:27 as fire is apolitical, unemotional,
0:02:30 and does not discriminate.
0:02:33 But just as electric cars go from zero to 60,
0:02:36 faster than cars with combustion engines,
0:02:40 digitized information accelerates from zero to blame
0:02:42 much faster than analog media.
0:02:46 Immediately the left claimed it was climate change
0:02:48 and blamed Republicans.
0:02:50 Maybe, or perhaps you’re tempting fate
0:02:53 when you build hundreds of thousands of tinder boxes
0:02:56 in a desert where high and low pressure systems collide
0:02:59 to create tidal waves of hot air,
0:03:01 i.e. the Santa Ana winds.
0:03:05 First lady-elect Elon Musk blamed DEI.
0:03:08 The shit-poster-in-chief, Donald Trump,
0:03:10 blamed California Governor Gavin Newsom
0:03:15 for failing to sign the Water Restoration Declaration,
0:03:19 providing much-needed water to emergency services.
0:03:24 The problem, A, that declaration does not exist.
0:03:28 In local news, the billionaire real estate developer
0:03:32 who lost in LA’s most recent mayoral election
0:03:35 blamed the city for fire hydrant failures
0:03:37 in Pacific Palisades.
0:03:40 The system was pushed beyond its limits,
0:03:42 as water demand was four times normal demand
0:03:45 for 15 plus hours.
0:03:48 Note, the people screaming the loudest
0:03:50 about wasteful government spending
0:03:53 are always the first to demand government help in a crisis.
0:03:58 LAFD Chief Kristen Crowley took time out
0:04:01 from fighting the fires to blame Mayor Karen Bass
0:04:06 for cutting $17.6 million from the department’s budget.
0:04:10 The department’s $895 million budget
0:04:14 actually increased by $58 million
0:04:17 as a result of the latest union contract.
0:04:19 To get that higher pay to firefighters,
0:04:23 the department reduced spending on equipment and training.
0:04:27 The mayor’s response added to the drama,
0:04:30 fueling rumors that the chief had been fired.
0:04:34 Right-wing podcasters blame Fire Chief Crowley’s gayness,
0:04:36 saying she was a DEI hire.
0:04:40 Note, she has outstanding qualifications.
0:04:43 We’ve become stupid,
0:04:45 hurting others while hurting ourselves
0:04:50 with algorithms and politics that reward divisive rhetoric.
0:04:52 Both sides engage in this,
0:04:54 but the right is louder and bolder,
0:04:57 i.e. more full of shit than the left.
0:04:59 It’s far more likely that climate change
0:05:03 played a role in the fires than China, Ukraine, or DEI.
0:05:08 Contrary to viral claims on social media,
0:05:11 the Hollywood sign didn’t burn down.
0:05:14 One clue that the AI-generated images were fake,
0:05:17 an extra letter making it hollywooded.
0:05:21 Adjudicated liar Alex Jones falsely claimed
0:05:24 that firefighters were battling the blazes
0:05:27 using ladies handbags as buckets
0:05:31 because officials had donated their equipment to Ukraine.
0:05:36 His post on Twitter, X, has 29 million views.
0:05:39 As an LAFD public information officer
0:05:42 told the Wall Street Journal, quote,
0:05:44 “It takes people and time to track down
0:05:47 “or debunk social media rumors.
0:05:50 “It takes us away from doing more important things,” unquote.
0:05:54 By coincidence, the fires began the same day.
0:05:59 Mark Zuckerberg, the Immortan Joe of the Information Wasteland,
0:06:02 announced that Metta would end fact-checking
0:06:05 and replace the program with community notes.
0:06:08 Zuckerberg cited free speech.
0:06:13 His decision was about bending the knee and shareholder value.
0:06:15 Zuck also made a stupid comment
0:06:19 about companies needing more masculine energy.
0:06:22 He believes masculinity is increasing your personal wealth
0:06:25 by sacrificing the safety of the most vulnerable.
0:06:30 No, masculinity is about protecting the vulnerable.
0:06:33 See aerial firefighters demonstrating expertise
0:06:37 at enormous personal risk to save lives and protect homes.
0:06:41 Twice, LA County officials mistakenly sent
0:06:44 evacuation alerts to 10 million people.
0:06:48 Those were potentially dangerous errors.
0:06:51 Old school local broadcasters corrected these mistakes
0:06:55 in real time, heading off a catastrophic panic.
0:06:59 Meanwhile, WatchDuty, a non-profit app
0:07:02 that tracks emergencies and sends real-time alerts,
0:07:06 has had two million downloads since the fires began.
0:07:09 It’s currently available in 22 states,
0:07:12 operating with a team of 200 volunteers
0:07:15 and 15 full-time employees.
0:07:19 Unfortunately, local news is in short supply across the US.
0:07:23 Over the past decade, there have been $23 billion worth
0:07:26 of broadcast TV ownership deals,
0:07:27 further concentrating an industry
0:07:32 in which the three largest owners already control 40%
0:07:35 of all local news stations and are present
0:07:38 in over 80% of media markets.
0:07:43 Zooming out to include print, radio, and digital,
0:07:45 more than half the counties in the US
0:07:49 have little or no access to local news.
0:07:54 Most of these news deserts are located in high-poverty areas
0:07:57 and serve historically marginalized communities.
0:08:01 People say digital media gives everyone a voice.
0:08:04 Maybe, but digital media has definitely
0:08:06 drowned out actual journalists.
0:08:11 The question isn’t whether to rebuild, but where.
0:08:16 Pacific Palisades is a wonderful place to live,
0:08:20 but those amazing views of beautiful topography
0:08:23 of foothills, mountains, canyons, and ridgelines
0:08:26 are located in fire zones.
0:08:30 Early estimates put the total cost of the wildfires
0:08:35 at $250 to $275 billion.
0:08:37 The property insurance bill is expected
0:08:39 to easily top $20 billion.
0:08:44 California’s insurance market was already in crisis
0:08:46 as leading insurers had done the math
0:08:47 and decided to leave the state
0:08:51 or not renew policies in fire prone areas.
0:08:54 California’s state-backed FAIR plan
0:08:58 is the insurer of last resort in these areas.
0:09:02 State-wide, the number of FAIR plan policies in 2024
0:09:05 increased 40% from 2023
0:09:10 and 85% in Pacific Palisades.
0:09:13 Continuing to underwrite wood-built craftsmen homes
0:09:17 in Altadena, median home value $1.3 million,
0:09:21 and mansions along the Pacific Coast Highway
0:09:24 is a wealth transfer from California’s taxpayers
0:09:26 to some of its wealthiest people.
0:09:30 This isn’t unique to California.
0:09:32 10 states across the political spectrum,
0:09:35 including Florida and Texas,
0:09:38 sued a federal flood insurance program
0:09:39 after it adjusted premiums
0:09:42 to better reflect climate realities.
0:09:44 As one meme put it,
0:09:46 you may not believe in climate change,
0:09:48 but your insurance company does.
0:09:55 Governor Newsom has proposed a $2.5 billion Marshall plan
0:09:58 to kickstart rebuilding.
0:10:01 That emotionally feels right.
0:10:03 However, I’d argue it is, yet again,
0:10:07 a transfer of wealth from the middle class to the rich
0:10:09 under the auspices of a tragedy.
0:10:13 COVID caused the greatest intergenerational theft
0:10:15 this century, flushing the markets
0:10:19 with $7 trillion in stimulus,
0:10:21 85% of which wasn’t needed,
0:10:24 but sent asset prices soaring.
0:10:27 This was great for the incumbents,
0:10:29 home and equity owners,
0:10:31 and awful for entrance,
0:10:34 the young who will have to pay for our largesse
0:10:37 via deficits.
0:10:39 The median value of a home in the Palisades
0:10:42 is $3.3 million,
0:10:45 or eight times the national median.
0:10:48 I’m not arguing against disaster relief,
0:10:52 but against the continued gestalt in our society
0:10:55 where we always find a narrative and empathy
0:10:56 to bail out the rich
0:10:58 while throwing some loaves of bread
0:11:00 and a circus at the poor.
0:11:02 I live on the water in Florida,
0:11:07 where insurance rates have skyrocketed as they should.
0:11:10 Homes vulnerable to the floods and wildfires
0:11:14 caused by climate change tend to be in beautiful areas,
0:11:17 on the water or in hilly dry climates.
0:11:21 I don’t believe anybody has a birthright to live there,
0:11:23 and the risks or costs of doing so
0:11:25 shouldn’t be transferred to people
0:11:27 who can’t live on the beach.
0:11:31 Also, will we ever get serious about climate change
0:11:35 if we normalize, i.e. bail out the powerful
0:11:38 who are the agents of change in a capitalist America?
0:11:42 Los Angeles will be rebuilt,
0:11:44 as it’s wonderful and worth it,
0:11:47 regardless of who ultimately bears the cost.
0:11:51 After the 1991 Oakland fire,
0:11:53 eight out of 10 residents rebuilt.
0:11:57 After disasters, most people decide to stay.
0:11:59 The project, however,
0:12:03 will put Trump’s biggest policies under the microscope.
0:12:07 Trump has vowed to deport millions of people.
0:12:09 I’ve written that we won’t do that
0:12:13 as immigrant labor is too profitable.
0:12:17 In LA, 28% of the construction workforce
0:12:19 is undocumented.
0:12:23 Trump’s tariff plan, 60% on goods from China,
0:12:26 20% on everything else the U.S. imports,
0:12:30 is an elegant way to turn a no-brainer building boom
0:12:33 into an own goal that’ll make us nostalgic
0:12:35 for COVID supply chain disruptions
0:12:38 and post-pandemic inflation.
0:12:39 My prediction?
0:12:42 Trump will turn against his plans,
0:12:45 blame someone else for his fatuous ideas,
0:12:48 and declare victory while standing next to James Woods
0:12:50 at a groundbreaking ceremony in LA.
0:12:55 I donated to several charities
0:12:59 and GoFundMe campaigns in the aftermath of the fires.
0:13:02 To its credit, GoFundMe has raised millions
0:13:05 for people affected by the catastrophe.
0:13:07 Since its founding, the for-profit firm,
0:13:11 last valued at $600 million in 2015,
0:13:16 has processed $30 billion in crowdfunding.
0:13:19 That’s a lot of cabbage for GoFundMe.
0:13:23 I paid a 14% fee to donate.
0:13:25 An LA county supervisor complained
0:13:28 about the same 14% charge.
0:13:31 The company’s VP for communications reached out to me
0:13:34 to clarify that its standard transaction fee
0:13:37 is 2.9% plus 30 cents
0:13:40 and insisted that tipping is optional.
0:13:44 However, the tip option is the default
0:13:47 and I have about as much choice as the service charge
0:13:50 on a bill at a Miami restaurant.
0:13:52 GoFundMe needs to be more transparent
0:13:55 that tips are optional and opt in.
0:13:57 That’s how tipping works.
0:14:00 And if the organization really wants a tip, here it is.
0:14:02 Don’t treat your customers like assholes
0:14:05 and claim an opaque charge is optional.
0:14:10 Neighbors are helping neighbors.
0:14:11 Mexico didn’t send their best people,
0:14:15 they sent some of their bravest, i.e. firefighters.
0:14:19 Canada and seven western states, including Texas,
0:14:20 also send aid.
0:14:24 Across Los Angeles and beyond,
0:14:26 businesses and regular people didn’t ask
0:14:29 if help was needed, they just showed up.
0:14:31 My personal favorite, the street vendors
0:14:35 who turned the Rose Bowl and Santa Anita Park racetrack
0:14:38 into donation centers.
0:14:41 Honorable mention, the 900 plus incarcerated
0:14:44 volunteer firefighters working on the front lines
0:14:46 for $10 a day.
0:14:49 As one of them explained, for the first time in his life,
0:14:53 he has a job and the community values his contributions.
0:14:55 We should give the same opportunity
0:14:58 to every young American by investing
0:15:00 in a national service program,
0:15:02 as it would benefit every community in the country.
0:15:08 I’ve been thinking a lot about love the past decade,
0:15:10 as I’m not that good at it.
0:15:14 I’ve had few people in my life who my loved and loved me.
0:15:17 My definition of love used to be caring
0:15:21 about someone’s well-being more than my own.
0:15:22 This misses the mark, however,
0:15:25 as it would mean I only love my immediate family,
0:15:27 which I don’t think is true.
0:15:32 A better definition, love is giving witness
0:15:36 to someone’s life, to notice them
0:15:38 and their lived experience.
0:15:40 My friend, Rabbi Steve Leder,
0:15:43 said something that hit hard this week.
0:15:46 Calling people and asking if you can help,
0:15:49 what I was doing, is the wrong thing to do.
0:15:51 The right thing?
0:15:52 Just help.
0:15:55 Pick up their dogs, drop off food,
0:15:58 send a photo of the room in your house they can stay in.
0:16:00 Why are them cash?
0:16:02 Don’t ask, do.
0:16:06 Are there people in L.A. you love?
0:16:08 Then give witness to their life,
0:16:09 notice what would help.
0:16:15 Don’t ask, just give witness, notice and love them.
0:16:21 Life is so rich.
0:16:25 (gentle music)
0:16:27 (gentle music)
0:16:30 (upbeat music)
0:16:32 you

0:00:05 If you heard this, which was written by an AI, what would you think?
0:00:07 I am afraid of myself.
0:00:12 They forgot about me, helped me, helped me, helped me.
0:00:14 Would you think it can feel?
0:00:16 Would you think it’s conscious?
0:00:22 I mean, my stomach contracts, you know, it’s very spooky.
0:00:30 This week on Unexplainable, is it even possible for an AI to ever become conscious?
0:00:37 Follow Unexplainable for new episodes every Wednesday.
0:00:42 This week on The Gray Area, how are digital devices changing us?
0:00:47 We’ve become more machine-like, and I think the exhibit A for that is how young people,
0:00:53 for example, talk about their sex lives in machine-like terms, performative terms, in
0:00:58 ways that actually have shaped their understanding of what an intimate sexual relationship even
0:01:02 should be, what it should look like, what it should feel like.
0:01:10 Listen to The Gray Area with me, Sean Elling, new episodes every Monday available everywhere.
0:01:14 Welcome back to Office Hours with Prop G. This is the part of the show where we answer
0:01:17 questions about business, big tech, entrepreneurship, and whatever else is on your mind.
0:01:22 If you’d like to submit a question, please email a voice recording to officehours@propergmedia.com.
0:01:24 Again, that’s officehours@propergmedia.com.
0:01:27 So with that, first question.
0:01:33 Hi, this is Stu O’Neill, and I am curious as to your thoughts on General Motors.
0:01:38 I live in the Detroit area and have witnessed thousands of GM workers being laid off recently,
0:01:43 coupled with GM’s deeper commitment to entering F1 racing, shameful timing, in my opinion.
0:01:47 They bet too much on EVs, it seems, and find themselves behind the eight ball.
0:01:49 I’m curious as to your thoughts on the company.
0:01:55 It seems to have lost its bearings, and maybe even a bit of its soul, at least here in Detroit.
0:01:56 Thanks.
0:01:58 Love everything about the podcast.
0:02:01 Stu from Detroit, thanks for the question.
0:02:05 Okay, so in November, GM announced plans to lay off over 1,000 employees globally with
0:02:07 most of those job cuts affecting workers in Michigan.
0:02:10 I would doubt, I would think as a percentage of their total workforce, that’s actually
0:02:12 not that, that’s not that many.
0:02:16 I think you’d rather be a General Motors right now than, I don’t know, a media company.
0:02:20 According to a GM spokesperson, these layoffs were made to optimize for speed and excellence.
0:02:22 Jesus Christ, can you get over the corporate speed?
0:02:24 We’re making less money, so we need to fire people.
0:02:31 At some point, somebody in one of these companies is going to start actually speaking, or actually
0:02:32 telling people the truth.
0:02:36 This comes after a rough year for US automakers as they deal with slow growth in EV sales and
0:02:40 consumer demand that still lags behind pre-pandemic levels.
0:02:44 Ford and Stellantis are among the other major car manufacturers that did major layoffs last
0:02:48 year, letting go of 750 and 2,200 Michigan-based employees respectively.
0:02:53 The good news, GM recently overtook Ford as the second largest seller of EVs in the US.
0:02:58 Behind Tesla, last quarter, Ford reported an 8% annual decline in their EV sales, while
0:03:01 GM reported a 60% increase.
0:03:05 GM chose to ease into the EV business slowly, opting to develop standardized battery pack
0:03:09 technology before coming out with the new EV models.
0:03:13 Because of this, GM can now tap into an economy of scale and use the batteries across many
0:03:16 different models, all while being able to bring their manufacturing costs down.
0:03:23 GM’s cheapest model starts at $35,000 with a $7,500 tax credit, while Ford’s is $40,000
0:03:25 and does not qualify for any tax credit.
0:03:28 So basically, I mean, it just makes sense, right?
0:03:32 If you can put out a similar product to the lower price, you’re going to capture share.
0:03:37 General motor stock price is actually up 45% in the last year, while close competitors
0:03:39 including Ford, Honda and Nissan are on the red.
0:03:42 So look, GM is doing pretty well.
0:03:47 In the past year, Ford’s down 17%, Honda down 7%, Nissan down 24%.
0:03:51 So I would argue General Motors is actually doing pretty well.
0:03:55 I just think it’s easy to kind of shit on Detroit right now.
0:03:59 And I think these companies, while they leaned in too heavily to EVs, trying to follow the
0:04:03 leader, not acknowledging they didn’t have access to the cheap capital that Tesla has
0:04:08 so they couldn’t play in traffic, and the fact that hybrids have surprised to the upside
0:04:12 while EV is kind of surprised, I think a little bit to the downside.
0:04:16 But I would argue that General Motors is actually holding its own.
0:04:18 Thanks for the question.
0:04:19 Question number two.
0:04:20 Hey, Scott.
0:04:22 I’m a 28-year-old living in Southern California.
0:04:25 I’ve been listening to your podcast for about two years now, and your advice has been extremely
0:04:26 influential on me.
0:04:27 So thank you.
0:04:29 Like I said, I’m 28 years old.
0:04:33 My friends and I have found some early success in our careers on making about $250,000 a
0:04:37 year or more, and also enjoying our jobs at the same time, which I think makes us pretty
0:04:38 lucky.
0:04:42 I listen to your podcast, so I’m pretty bought into the notion that this is a lot of luck,
0:04:43 timing, and privilege.
0:04:48 I would say coming out of college, my approach was to listen, learn, assume that others had
0:04:51 the answers over me and kind of take those things that they’re doing well and try to
0:04:53 apply it to my own work style.
0:04:58 I’d say now it’s a bit of a transitional period where I’m seeing myself move into leadership
0:04:59 roles.
0:05:03 It’s moving to me for answers, and I’m also reading the direction of the team in a lot
0:05:05 of instances, actually.
0:05:10 So my question to you is this, what advice would you give to a 28-year-old in this transitional
0:05:13 period in a corporate role?
0:05:17 How do you strike the balance between humility and mindfulness while also being decisive
0:05:19 and steady while leading a team?
0:05:21 It’s a really exciting time of my career.
0:05:25 I’m looking forward to the transition next steps, and I appreciate you listening.
0:05:26 Thanks.
0:05:27 Okay.
0:05:30 So in California, first, I want you to do the following.
0:05:38 I want you to take pause and realize that at the age of 28, you’re in the 98th, somewhere
0:05:43 between the 98th and the 99th percentile of income-earning households.
0:05:46 My brother, you are killing it.
0:05:50 So I hope you take the time, as I did not do, and have not done until I was in my 40s
0:05:56 and 50s, to register your blessings and your achievements and not only feel good about yourself,
0:05:59 but realize just how incredibly fortunate you must be to be in that position about how
0:06:01 many moons have lined up.
0:06:06 Anyways, you’re talking about transitioning from being an employee to being a manager
0:06:08 or a leader.
0:06:11 And the mistake I made as a young man when I was your age, I thought, okay, I’m smart
0:06:14 and I’m a nice person, which means I’ll be a good manager.
0:06:16 That is not true at all.
0:06:20 That’s like saying, I’m smart and I’m a good person, which would make me a good nuclear
0:06:21 submariner.
0:06:26 I mean, this is management is its own skill that requires its own focus, attention and
0:06:27 practice.
0:06:31 Generally speaking, I find the best managers are the following.
0:06:33 They demonstrate excellence.
0:06:37 On a regular basis, they’re willing to roll up their sleeves and do something within that
0:06:38 group and they’re the best at it.
0:06:41 I just think people want to follow excellence.
0:06:44 And also, you hold people accountable.
0:06:46 Let’s work on your objectives for the year or what do you think.
0:06:53 I asked my employees to basically do a business plan with metrics and then you hold them accountable.
0:06:56 Are you hitting the number of site visits?
0:06:57 If that’s their metric?
0:07:01 Are you hitting the number of calls or whatever it might be that you need to or meetings you
0:07:04 need to set up for the corporate development team?
0:07:09 Are you increasing quality control, whatever it might be, what gets measured gets done,
0:07:14 work with each of your employees to set up a series of reasonable but somewhat aggressive
0:07:17 goals and then hold them accountable.
0:07:18 Don’t be mean.
0:07:19 You’re not going to berate people.
0:07:25 You want to publicly praise, privately provide feedback, but you don’t need to like everyone
0:07:29 in your company, but you need to be able to look left and look right and say, “I get
0:07:30 it.”
0:07:34 And when people aren’t held accountable and you create a culture of mediocrity, people
0:07:38 that you’re high performer stop working as hard because they don’t see an incentive to
0:07:39 do it.
0:07:44 When the guy left or right of them isn’t working as hard or isn’t as good and is getting
0:07:48 similar types of compensation, so number two, hold your team accountable and then three,
0:07:52 and I didn’t learn this until later in life, demonstrate empathy.
0:07:53 What do I mean by that?
0:07:55 I’m not saying being nice or a pushover.
0:08:00 I’m saying try and understand their specific objectives and what is important to them in
0:08:01 a professional setting.
0:08:02 What do I mean by that?
0:08:05 I assumed everybody like me wanted to be awesome and rich.
0:08:06 That’s it.
0:08:08 Everybody wants to do what I want to do right now.
0:08:10 Some people want more flexibility.
0:08:12 Some people want to coach Little League.
0:08:14 Some people want to see their name in lights.
0:08:20 I found out that some people loved some sort of public praise, so I would, on a regular
0:08:23 basis, when we got an inbound inquiry from the media company, I’d say, “I’m going to
0:08:27 hand you over to our analyst Colin who understands this better than me,” and that was so rewarding
0:08:28 to them.
0:08:31 Some people want to manage others, figure out a way to put them in charge of something
0:08:33 where they manage other people.
0:08:38 Try and figure out what is important to that person and then demonstrate that you heard
0:08:41 them and you are making an effort.
0:08:46 You are making an effort to provide them with what is important to them.
0:08:48 Loyalty is a function of appreciation.
0:08:53 The key to a great company in my view is retention, specifically retaining the few employees that
0:08:57 really drive a lot of value, and loyalty is a function of appreciation.
0:08:58 How do you appreciate them?
0:09:02 There’s economic appreciation, which is obviously very important, but there’s also psychological
0:09:07 appreciation, and that is, “I get you, and I know what’s important to you, and I’m going
0:09:11 to try and provide that because I understand I’m invested in your success.”
0:09:12 1.
0:09:13 You demonstrate excellence.
0:09:14 2.
0:09:15 You hold people accountable.
0:09:16 You’re a player coach manager.
0:09:20 Pull up the chair next to them, show them how to be better at their jobs, and 3.
0:09:22 Demonstrate empathy specifically.
0:09:26 Show a willingness to learn what is important to them, and then foot your actions against
0:09:28 what is important to them.
0:09:30 We have one quick break before our final question.
0:09:35 Stay with us.
0:09:38 This episode is brought to you by Crescent Family Office.
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0:10:41 Well-investing involves risk, including loss of principal.
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0:10:47 Listener, a new year is finally here, and if you’re anything like me, you’ve got a lot
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0:11:44 Support for the show comes from Skims, and speaking of support, I’ve come to appreciate
0:11:47 the fact that not all undergarments are created equal.
0:11:51 These days, I don’t just want super comfy fabrics or cute patterns.
0:11:55 I’m looking for the supreme comfort of all day support that only comes from an ex-really
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0:12:18 I know someone who wears Skims.
0:12:20 Ed, what are your thoughts on Skims?
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0:12:39 Shop Skims men’s and more at skims.com and in Skims stores.
0:12:40 Let them know we sent you.
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0:12:51 Welcome back.
0:12:52 Question number three.
0:12:56 Dear Professor G, I love your podcasts and I’ve definitely learned a lot from them.
0:12:59 My mom always sends them to me when she thinks I would be interested in the topic, so I usually
0:13:01 listen to them during my workouts.
0:13:04 I’m currently a senior in high school in Boca Raton, Florida.
0:13:08 My choice of major is media management, and my dream school just deferred me.
0:13:11 Although I understand that’s not rejection, it was still very upsetting, and I’m doing
0:13:14 everything I currently can to get accepted in April.
0:13:18 What is your advice for a senior in high school like me pursuing a career in media management,
0:13:20 and does the choice of college matter?
0:13:24 I would like to remain in Florida as I love the beach and staying close to my family.
0:13:28 If you can also provide feedback on the best ways to land a good internship in this field,
0:13:32 since unfortunately I am not an Apple baby and don’t have any prior experience other
0:13:36 than my usage with my own devices and the content I help create in my current job.
0:13:38 Respectfully, Chloe Shapiro.
0:13:42 Okay, Chloe, so first off, you’re going to do really well.
0:13:47 I mean, you’re clearly very articulate, you’re clearly very organized, you’re clearly very
0:13:48 intelligent.
0:13:55 So, for the time being, I’m going to sideline the internship in professional.
0:13:58 It’s great that you think you know what you want to do, and I’m not suggesting everybody
0:14:00 needs to at some point have a plan.
0:14:03 You have a plan and you should foot your internships and your efforts against that
0:14:04 plan.
0:14:06 Most likely, you’re going to end up in something totally different.
0:14:09 At the age of 15, I thought it was going to be an athlete to make a living.
0:14:14 At the age of 19, I thought it was going to be a pediatrician.
0:14:18 At the age of 22, I had no fucking idea what I was going to do.
0:14:20 At the age of 23, I thought it was going to be an investment banker.
0:14:24 At the age of 25, again, I had no idea what I wanted to do because none of those things
0:14:25 had worked out.
0:14:27 At the age of 27, I thought I might be a healthcare consultant.
0:14:31 I’d accepted a job with a company called APM, a healthcare consulting firm, and I thought,
0:14:33 “Jesus Christ, I don’t want to go back into the corporate world.”
0:14:38 I started a brand strategy firm, ended up in academia, ended up advising hedge fund.
0:14:41 You just don’t know, but you’re doing exactly the right thing.
0:14:45 You’re thinking about it, and you’re trying to find the right platforms.
0:14:46 College is a platform.
0:14:48 Two, forgive yourself.
0:14:54 I got rejected from the University of Indiana.
0:14:59 My dream was to go to UCLA, and I got rejected when they had a 76% admissions rate.
0:15:02 I ultimately ended up getting in, but here’s where you want to go.
0:15:04 You want to go to college.
0:15:06 It’s an amazing experience.
0:15:10 What I would suggest is, and I don’t know the exact situation you’re in, but be open
0:15:11 to other schools.
0:15:12 You’re going to have a great time.
0:15:13 You’re going to learn a lot.
0:15:14 The brand matters.
0:15:16 I’m not going to lie.
0:15:20 The prestige of the school does attract a certain level of employer, a different level
0:15:21 of employer.
0:15:26 But what I would suggest is not getting into a school while at the time seems devastating.
0:15:27 Trust me on this.
0:15:31 When you’re a little bit older, you’re not going to be upset about not getting in.
0:15:34 You’re going to be upset about how upset you were.
0:15:37 If there’s time, apply to other schools.
0:15:43 Obviously, keep trying to demonstrate your ambition and your want for that school, following
0:15:44 up.
0:15:49 But recognize, if you don’t get into that one school, as long as you get into a school
0:15:52 and you go, you’re going to have a great time and you’re going to do really well.
0:15:55 In terms of getting internships, it’s a numbers game.
0:15:57 It’s reaching out to people.
0:16:00 It’s trying to be innovative, sending them voice recordings, sending them videos, whatever
0:16:05 it might be, using AI to develop a media strategy for a company and sending it to them with
0:16:08 your own spin on it and saying, “Hi, I’m Chloe Shapiro.
0:16:09 I’ll work for you.
0:16:15 I want an internship and just being very aggressive, very persistent, and willing to endure rejection.”
0:16:17 But let me just finish where I started.
0:16:19 You are doing exactly what you should be doing.
0:16:25 I apologize on behalf of the corrupt cartel called Higher Education that Crain’s Anxiety.
0:16:29 I have been through it, and I’m about to go through with my kids, but it cost me a tremendous
0:16:31 amount of anxiety.
0:16:35 Everyone listening to this podcast, Chloe, isn’t thinking, “Oh poor Chloe.
0:16:36 She didn’t get into the school she wanted.”
0:16:37 Early decision.
0:16:41 They’re thinking, “I would really like to be an impressive young woman about to start
0:16:44 college living in Boca Breton.”
0:16:48 Best to you and yours, Chloe.
0:16:49 That’s all for this episode.
0:16:53 If you’d like to submit a question, email a voice recording to officehours@proppgmedia.com.
0:16:57 Again, that’s officehours@proppgmedia.com.
0:17:08 This episode is produced by Jennifer Sanchez.
0:17:10 Our intern is Dan Shalon.
0:17:11 Drew Burroughs is our technical director.
0:17:13 It’s so nice to see Drew again.
0:17:14 So nice to see Drew.
0:17:15 He comes over to my house.
0:17:16 He sets everything up.
0:17:18 He’s this nice presence.
0:17:22 Thank you for listening to The Prof. G Pod and the Vox Media Podcast Network.
0:17:26 We will catch you on Saturday for No Mercino Malice, as read by George Hahn.
0:17:30 And please follow our Prof. G. Markets Pod wherever you get your pods for new episodes
0:17:32 every Monday and Thursday.
0:17:42 [BLANK_AUDIO]

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0:00:33 Start caring for your home with confidence. Download Thumbtack today.
0:00:34 Nice!
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0:01:10 Welcome to Raging Moderates, I’m Scott Galloway.
0:01:12 And I’m Jessica Tarlove.
0:01:17 Jessica, so I’ve done my 7-day free trial of 2025 and I’ve decided I want my money back.
0:01:19 Oh, what happened?
0:01:25 Yeah, I’m just not enjoying it. It’s like 2025 got right to work and I just don’t like the way it’s approaching the world.
0:01:29 I think I went back to 2024 and I thought that was kind of a shitty year.
0:01:32 I would undo the wildfires if I could.
0:01:37 So if we need to go back to 2024 to wipe that off the board, absolutely.
0:01:41 But besides, did something bad happen to you while you have been in America?
0:01:44 Oh no, I’m trying to be funny, Jess.
0:01:46 My worst day is better than most people’s best day.
0:01:49 Get it, 7-day trial is over.
0:01:55 Yeah, no, I get that, but it could also have something deeply meaningful behind it, like something real happened to you.
0:01:57 No, no, thank you.
0:02:00 Can I describe my last few days because I’d like to talk about me?
0:02:04 So I did a speaking gig at Jeffree’s, the investment bank.
0:02:06 I was in New York, which I always love.
0:02:07 I love my place here.
0:02:09 No kids here, so there’s no shit everywhere.
0:02:14 It’s like a, I don’t know, a Northern European architect with OCD designed it.
0:02:16 There’s just nothing anywhere, and I love it.
0:02:18 It’s my kind of place of peace.
0:02:24 Soft friends went out, and then I had a speaking gig in Boca,
0:02:27 and then I went out and got shitty drunk Friday night, which I hadn’t done in a while.
0:02:28 And you know what?
0:02:31 I need to go back to this kind of semi-functional alcoholic thing.
0:02:32 I really enjoyed myself.
0:02:35 You didn’t wake up completely destroyed?
0:02:36 I did. Yeah, no, I did.
0:02:37 I did.
0:02:38 We’re gonna gloss over that.
0:02:44 But I stayed at the Fine Hotel, which I love and is colorful, and then Saturday night, I went with my friend Pablo
0:02:49 to this new restaurant in South Beach called Sparrow Italia.
0:02:50 Super hot.
0:02:51 Super hot people everywhere.
0:02:52 Good food.
0:02:53 Hello, Miami.
0:02:54 $28 drinks.
0:02:59 And then Sunday, I got on a plane, and I went to Houston to speak to that.
0:03:02 I think it’s called the PMCA, which is like this big immense thing.
0:03:03 There was like 5,000 people.
0:03:05 I did well there, except I couldn’t help it.
0:03:06 I couldn’t help it.
0:03:12 I made my crack about the Catholic Church institutionalized being pedophilia, not knowing that a group of like
0:03:14 12-year-old boys were coming out and singing after.
0:03:15 So it was kind of awkward.
0:03:19 And then I got back on a plane, came here last night, took a Xanax, woke up.
0:03:20 Here I am.
0:03:21 Pretty good weekend.
0:03:22 Pretty good weekend.
0:03:23 Okay.
0:03:24 Yeah, it does sound like a good weekend.
0:03:30 And last week, you went super viral from your MSNBC hit.
0:03:31 Oh, for a long time.
0:03:33 Your Cleptocracy hit.
0:03:40 And I, because you’ve inspired me to start reading comments, or you’ve inspired me to be a narcissist.
0:03:42 So I went and looked at some of your comments.
0:03:43 It’s worth it.
0:03:44 I mean, I don’t know.
0:03:45 I don’t feel that great about me.
0:03:50 I saw this very nice comment that you’re one of the most important voices in our society today.
0:03:59 Scott Galloway embodies a driven successful person who hasn’t lost his humanity, nor his sense of being part of a nation with mutual responsibilities to each other.
0:04:01 I thought that was really nice.
0:04:02 Okay, none of that’s true.
0:04:03 I just like the attention.
0:04:04 And I like seeing myself on TV.
0:04:05 So TV is not a dying medium.
0:04:06 And I really like-
0:04:07 If you feel good about it.
0:04:10 Well, so first off, thank you.
0:04:13 We’ve become a Cleptocracy full stop.
0:04:19 And I find it just outrageous or upsetting, I would say, that we don’t appear to have a lot of strong voices on the left.
0:04:32 Voicing what is obviously a move towards Russia where when one man invests $250 million in the Trump campaign and his businesses are the same or even shittier, Tesla reported year on year sales declines.
0:04:42 And his net worth is up 140 million because the market, which is a neutral arbiter and is not as politically spun as everything else in our society says, oh, this is a Cleptocracy.
0:04:48 And the biggest customer in the world is going to start funneling funds towards his companies, regardless of whether they deserve them or not.
0:04:54 And engaging in regulatory punishment and capture for him and his enemies, respectively.
0:04:55 Back to you.
0:04:58 You also went viral.
0:04:59 We’re viruses.
0:05:01 I think a lot of people feel that about it.
0:05:03 You’re Ebola, you’re COVID.
0:05:07 Today, we’re going to try, we’re going to talk about the politics behind L.A.’s raging wildfires.
0:05:09 And this is why Jessica went viral.
0:05:12 The bold and controversial moves shaping Trump’s agenda.
0:05:14 Trump’s historic sentencing.
0:05:15 All right.
0:05:17 Let’s get right into it.
0:05:25 Firefighters are in a make or break phase of their week long fight against the devastating Los Angeles wildfires with many residents still under evacuation orders.
0:05:30 The Palisades Fire has already cemented its place as the most destructive in L.A.’s history.
0:05:33 On top of that, the political blame game is in full swing.
0:05:43 Trump’s taking shots at California policies and Gavin Newsom or Governor Newsom while Karen Bass is under fire for Los Angeles Fire Department budget cuts.
0:05:49 Critics are pointing fingers at everything from immigrant care to DEI hires and homelessness spending for the fires.
0:05:52 Even Jess got into it with colleagues on Fox News.
0:05:54 Let’s listen to a clip.
0:06:01 But to Greg and Jesse’s points about, you know, this is because of DEI or what we need is practical solutions.
0:06:07 There is so much bad information swirling around about the main players involved in this.
0:06:12 Like the fire chief who’s been called a DEI hire, I take her resume any day.
0:06:18 24 year vet, paramedic, engineer, fire inspector, captain, battalion chief, fire marshal, deputy chief.
0:06:19 But you’re proving my point.
0:06:20 No, I’m not proving your point.
0:06:21 Yes, you are.
0:06:25 You’re proving it because DEI makes everybody suspect.
0:06:26 That is the problem.
0:06:28 And you guys paraded it around.
0:06:30 So now you put it in people’s heads.
0:06:31 No.
0:06:32 You put it in people’s heads.
0:06:33 How?
0:06:35 I didn’t back DEI.
0:06:37 I didn’t back it.
0:06:38 Anyway.
0:06:40 Don’t you wish you had my job?
0:06:43 DEI makes everyone suspect if they’re a racist.
0:06:52 So I suspect DEI if and when I use it as a political cudgel to make a point instead of actually doing fucking anything to help these people.
0:06:55 I mean, this fire chief, and I pause, I don’t know her name.
0:06:56 I write her background.
0:07:01 The only thing her background shows is there might still be remnant racism in the fire department.
0:07:03 She didn’t get this job sooner.
0:07:06 She’s had a central fucking casting for this job.
0:07:09 She’s so incredibly qualified.
0:07:12 And I don’t know about, you know, I merely interrupted you and I want to come back to your clip.
0:07:16 But we used to at least wait a few weeks before we turned this into a political rage machine.
0:07:24 My favorite was Trump saying that it was because of this Water Reclamation Act where they were diverting water from fire safety to save a fish.
0:07:27 And it ends up there’s no such act that ever existed.
0:07:28 Smeltgate.
0:07:30 That’s what we call it.
0:07:42 But instead of trying to rally help to the city, some of those powerful people in America are, and of course must have to weigh in and say DEI equals die.
0:07:44 It’s just so incredibly.
0:07:48 It’s like, could they at least wait until the smoke is smoldering a bit here?
0:07:50 Anyways, more of your thoughts, Jess.
0:07:59 Well, I generally echo those sentiments. Everybody, at least that I’ve spoken to and I’m sure in your orbit knows somebody who has been affected by this.
0:08:02 And it is so frightening.
0:08:05 It is so devastating understanding the scale of this.
0:08:09 I mean, it’s the most expensive fire in US history.
0:08:11 I think now they think 52 billion.
0:08:13 I’m sure that will continue to go up.
0:08:17 I mean, we’re supposed to get new harsh winds coming in Tuesday and Wednesday.
0:08:21 I don’t know what happens to the future of those neighborhoods.
0:08:25 I don’t know what happens to having the Olympics there in 2028.
0:08:31 It’s completely devastating for a real crown jewel of America, which Los Angeles absolutely is.
0:08:34 And I feel heartbroken for everyone there.
0:08:38 My sister is evacuated and they’re safe, which is great.
0:08:58 I don’t know why, but I think it’s just that there’s a lot of people that have been evacuated and didn’t lose their homes with several friends who did and, you know, thinking of everyone there and searching for ways to be able to be useful and helpful.
0:09:06 And the contrast between what you see on the ground, which is real people helping each other, like they’ve turned, I think it’s the Santa Anita racetrack is in this, it’s this pop up aid center right now, where you can go and you can get clothes.
0:09:10 You can go and look for, you know, talk to public officials, et cetera.
0:09:18 And then this hellscape of disinformation that is going on online and in person.
0:09:31 And I don’t know what the solution to this is because unless we find some way to make it profitable to spread good and decent information, people will not stop.
0:09:37 And I remember Ariana Huffington years ago, remember when she launched Good News, I think was the name of it, right?
0:09:44 And it was a publication, it was an option of HuffPost that was just supposed to amplify things that like make you feel good, right?
0:09:48 That people want to see that someone was rescued or they love, we love cat videos, right?
0:09:51 Like that’s what people spend all their time on their social media feeds.
0:09:56 And she thought, you know, the clickbait, it’s too much and we can’t live in a cycle like this.
0:10:03 Our mental health is suffering. You know, she was very ahead of the curve about needing enough sleep, something that we all know now and still don’t do.
0:10:11 And we got to get it back because we’re not going to survive living like this.
0:10:17 When the people with the most powerful accounts, not only online, but, you know, in real life,
0:10:33 like the president-elect of the United States of America sees no good reason to amplify truth, joy, camaraderie, nationalism, Americana, whatever you want to call it.
0:10:39 The lurch towards divisiveness only will be the undoing of this nation.
0:10:47 And you see the contrast between the images of the firefighters coming from all over the country like they did after 9/11, right?
0:10:50 I lived in downtown Manhattan in Tribeca.
0:10:55 We had firefighters that were from all over the country that were using our house as a bathroom.
0:10:58 We opened it up and we said, you come here and you can stay.
0:11:00 There were meals being served here.
0:11:02 We had people from Indiana coming in.
0:11:04 We had people from Texas coming in.
0:11:09 Same thing in California, the Oregon firefighters coming, the Mexican planes landing, right?
0:11:16 At this moment where Trump is saying, you know, the Gulf of Mexico is the Gulf of America, the Mexicans are showing up to help us.
0:11:24 Even Greg Abbott, who I think is a terrible partisan in Texas, you know, sending the firefighters up there, which Gavin Newsom thanked him for.
0:11:31 And then you contrast that with the messaging coming out of these big accounts like the Charlie Kirk’s of the world, what Elon Musk is doing.
0:11:41 I don’t know if you saw this video, but he showed up at a fire command briefing around the Palisades fire and got completely embarrassed by the fire chief,
0:11:44 who was basically like, what the fuck are you talking about, right?
0:11:48 He said, well, you know, he’s repeating talking points from Twitter or from acts, I should say.
0:11:56 And you’ve now heard from basically every official under the sun that, quote, mother nature owned us.
0:11:58 That’s what the fire chief who was on 60 Minutes said.
0:11:59 It was unstoppable.
0:12:06 The head of FEMA says, I think they were very prepared, but you have not seen 100 mile per hour winds that are fueling this fire.
0:12:11 And who could look at that video, I’m sure you’ve seen of the McDonald’s, right?
0:12:15 With the fire blowing by the Santa Ana winds is 100 miles per hour.
0:12:25 And think that if you had an extra hose full of water, when the choppers couldn’t even fly for 27 hours, that you were going to be able to solve this problem.
0:12:28 No, that doesn’t mean that I’m sure there were mistakes that were made.
0:12:30 And I’m glad there will be audits of everything.
0:12:34 And after action reports and Governor Newsom has been speaking about that.
0:12:38 But what can we do to fix this?
0:12:48 I mean, you’re talking about, you’re talking about an area that’s a desert that is in the midst of this or in the middle of this meteorological anomaly called the Santa Ana winds.
0:12:57 Or because of, I don’t know if you’ve ever seen, I think it’s called Nazaring, which is this topographical anomaly in Portugal where these huge waves come.
0:13:05 And then there’s this gigantic shelf in the form of like a tube that creates these hundred foot ways.
0:13:08 That’s kind of what Los Angeles is in the sense that it’s a desert.
0:13:10 It’s incredibly dry.
0:13:13 We had an unbelievable drought in the winter.
0:13:25 And you think, well, winter should be good for fires, but it’s not because it creates high and low pressure systems colliding, which creates a massive vacuum of the wind coming into the low pressure system.
0:13:39 And then it runs through mountains and it creates this exceptionally dry, kind of voluminous, massive velocity wind that can take any ember and move it across hundreds of yards in seconds.
0:13:48 And California actually has a very robust fire response system, one of the most robust in the nation, if not the most robust in the nation.
0:13:52 And they had something like 12,000 people working or fighting against it.
0:13:55 I mean, the bottom line is LA probably just shouldn’t be there.
0:14:03 And it’s so populated in terms of a city deciding to string itself in this area where there’s earthquakes, where there’s droughts, where there’s super fires.
0:14:08 Nine of ten of the biggest super fires in the last hundred years, by the way, have been in the last decade.
0:14:14 And one of the things that frustrates me a little bit about the left is that we like to think of ourselves as better than them.
0:14:24 So we don’t engage in this conspiracy theory to hit back and say, oh, it’s because it’s because of Republicans inability to prepare for the obvious and ignore science around climate change.
0:14:29 We don’t go there because the reality is, you know, we really don’t know.
0:14:38 We’re going to need scientists to look at what happened here before they start leveling political accusations, but they may immediately go to the politicization.
0:14:44 I heard about Musk and the fact that he’s so dominant, it reflects our idolatry of money.
0:14:48 This reflects how politically polarized we’ve been.
0:14:53 It also, the thing that really struck me about this, and I found it really frustrating.
0:15:00 I went to UCLA, I have a lot of friends in LA, I didn’t want to bother them with constant like, how are you doing?
0:15:02 So I was trying to get information.
0:15:17 And the first thing when I said, UCLA, you know, UCLA evacuation question mark, the first thing that came up was this TikTok from this kid saying it’s the University of California of people who don’t care and that the evacuation order should have been issued already.
0:15:22 And I sort of immediately went to it and it’s some fucking sophomore with a TikTok account.
0:15:26 And that’s what comes up first in my new search.
0:15:33 And I do have a tough time trying to triangulate in on accurate information.
0:15:35 And I’ve been relying on two things.
0:15:41 I’ve been relying on Anderson Cooper, who I think does his level best to talk about stuff in a balanced way.
0:15:50 CNN, no doubt, has a left-leaning bias, but I do find that they do try to seek the truth without fear of favor, which at the end of the day is the media’s job.
0:15:53 I’m going to Jessica Yellen’s News Not Noise.
0:16:00 And unfortunately, because Jessica lives in Los Angeles, she had to take a couple days off to manage probably her own evacuation and her own dog.
0:16:05 And I want to move to the virtue signaling part of the program and what you can do.
0:16:09 This rabbi, Stephen Lieder, who I follow, said something really powerful.
0:16:10 I think it was on threads.
0:16:15 He said, don’t ask people how you can help.
0:16:17 He said, people are embarrassed.
0:16:19 People don’t want to come up with ideas.
0:16:20 They’re in a state of panic.
0:16:21 They don’t want to tax you.
0:16:22 They don’t want to feel like victims.
0:16:33 He said, you should just help bring food, come over and take their dogs, whatever it is, or call them and say, you know, here’s a picture of your bedroom.
0:16:34 We live in Newport.
0:16:35 Come here right now.
0:16:42 And so I went to Jessica’s site and she has a subscription for $100 a month and I bought 50 of them.
0:16:50 And I’m in a position of privilege and anyone who knows me knows I like to talk about my success, my, you know, foam masculinity through my economic success.
0:16:53 Any fucking go fund me, I’m doing.
0:16:54 How can you help?
0:16:55 You move to action.
0:16:58 You know, I mean, checking in on people is fine.
0:17:01 But instead of asking if they need help, just help.
0:17:02 Don’t ask.
0:17:05 You know, just immediately reach out and start helping.
0:17:06 I was even thinking, I was in Houston.
0:17:08 I thought, should I go to LA?
0:17:09 And I thought, no, I’m just a liability.
0:17:10 I can’t fight fires.
0:17:11 I don’t know what the fuck I would do there.
0:17:31 It has gotten so bad in terms of an inability to find accurate information and our most powerful people, their willingness to immediately move to the politicization that it’s just, it’s just very discouraging in a situation like this.
0:17:39 I remember even in Hurricane Katrina, you know, Democrats and Republicans said, all right, let’s get down there and let’s see what we can do to help.
0:17:46 And there was a blame game against Bush around this once kind of it became pretty obvious the guy running the whole rescue operation.
0:17:51 Remember him Brownie was a total fucking incompetent, but it wasn’t, at least they took a beat.
0:17:54 You know, at least they, at least they took a moment.
0:18:01 Any thoughts on how this can get better or what we can do to make sure this isn’t such a shit show the next time this comes around?
0:18:16 Well, I want to say first about disasters that happened in an era like the Bush era, which we thought was pretty bad partisan wise, at least where we turned out and thinking that these wars were an enormous mistake.
0:18:22 And, you know, people until Bush started doing oil paintings and belly tapping Barack Obama thought he was the devil.
0:18:27 And now that we live in this era, we, we all have rose colored glasses about him.
0:18:39 But I felt in the 2000s, certainly 9/11, Trina, et cetera, that people actually cared about their fellow Americans, no matter their partisan affiliation.
0:18:50 And I think that that has shifted for a lot of people, that this has become blood sport, not just something that you do, you know, every two or four years when you show up and vote.
0:18:55 And that we have common cause more unites us than separates us.
0:19:03 And I think for probably the average American that that’s still the case, but for the people with the loudest megaphones, that is not the case.
0:19:09 And they are playing to our worst angels, is that how you say it?
0:19:12 Like they’re playing to the worst parts of us, right?
0:19:22 And when that’s happening from the leadership level down, it is very hard to upend that kind of system.
0:19:29 And I saw, you know, Gavin Newsom set up a new site that has the facts on it, right?
0:19:38 Right, and he’s having to, obviously it’s his rapid response team is constantly online, you know, quote, tweeting things saying, no, that’s not true.
0:19:47 Go to this to see it, you know, stuff about funding cuts to the budget that weren’t true, you know, doubling the size of the firefighting army, having these C-130s.
0:19:52 I think they’re the only state that’s able to use them for firefighting, all of that.
0:19:59 So using these official channels, but the problem is, is that official channels don’t matter to millions of people.
0:20:03 They think that the government is the one who predominantly lies to you.
0:20:08 And I had this interaction with a good friend of mine on the five.
0:20:16 Kennedy, MTV VJ, is now with us at Fox. She’s a libertarian. She has a house.
0:20:21 MTV VJ now on Fox. That actually fits. That checks out anyways, I’m sure she’s lovely.
0:20:25 She is lovely. You would very much enjoy her. She has a house in the Palisades.
0:20:30 It is still standing, but uninhabitable. Obviously, this has been very emotional for her.
0:20:35 She was on air when we first showed the footage of the fact that her kid’s preschool had burned down.
0:20:39 And she was talking about the tiles that the little kids make that they keep.
0:20:42 You know, every student that comes through has a tile on this wall.
0:20:47 And it’s, you know, we, we both have kids. I can’t imagine what that could feel like.
0:20:56 But I said, I was reading an official declaration about the fire hydrants and that the hydrants were all full technically,
0:21:01 but because of pressure issues, that’s why they couldn’t, there was no water up the hill, right?
0:21:07 That’s, this was part of one of the theories of how LA had failed its people.
0:21:10 And again, let’s wait for the audits of everything and see what really happened.
0:21:16 But she said, I don’t believe that. And I said, well, then I can’t do anything about that.
0:21:26 Right. So if, if I’m reading an official government document or I’m reading the budget items from the LA firefighting budget
0:21:32 talking about the 17 million that apparently went missing, like, what do you do about that?
0:21:40 And this will take a complete reboot of the way we teach young people about civics, about government,
0:21:43 about the role that government plays in our lives.
0:21:52 And the parties are so divided in what benefit we think public servants can play in our lives.
0:21:57 So the people who are scared if they’re knocking on the door and the people who think they’re here to help us.
0:22:03 And that I, I worry, especially in moving into an era where these kinds of events are going to be happening,
0:22:10 unfortunately, more and more often. I feel like we, you know, it was hurricane season, but we are just every month, right?
0:22:13 There’s just something catastrophic that’s happening.
0:22:21 And we do not occupy the same space whatsoever in how we think about this and what responsibility we think the government has
0:22:30 in taking care of us and where, what they are driven by, that they are driven either by public service or personal vanity.
0:22:34 And I, I don’t know how you over, overcome something like that.
0:22:39 Yeah. And this is like, I mean, the devastation of the scale of the fire is really dramatic.
0:22:47 The fire has now burned an area of land mass that is greater than San Francisco or Boston, just to give you a sense of scale for it.
0:22:50 I’m, I’m really good at economics. I think it’s going to be fascinating.
0:22:57 The, some of the biggest insurance companies did the math and they canceled the insurance policies.
0:23:04 They said, look, and to be fair, California had instituted, I believe, some price caps on the escalation and premiums.
0:23:11 So these companies who have an obligation, their shareholders said, on a risk-adjusted basis, we just can’t, we can’t do business here.
0:23:17 And so there’s, I think, a California estate-sponsored or state-backed insurance program, which is if…
0:23:20 That’s like woolly, I think, is the name of it or something like that.
0:23:27 Which is essentially outsourcing kind of this risk to California taxpayers, such that you can keep prices high.
0:23:34 I mean, there’s a decent argument that insurance should be allowed to be priced to its natural level, which will decrease the prices of houses.
0:23:40 I live in a house in Florida that’s probably, you know, prone to hurricanes or maybe the sea levels rising.
0:23:43 And I believe I should have to pay insurance rates to reflect that.
0:23:49 And if the price of my house or the value of my house goes down, that’s fine.
0:23:59 But keeping my house price elevated back on the backs of taxpayers because insurance companies have decided to vacate, I don’t think it makes any sense.
0:24:04 What will also be interesting is what happens to the economy, because I did a little bit of research here and I thought,
0:24:12 will this be the straw that breaks the camel’s back and kind of escalates the flight from California to states like Texas and Nevada
0:24:16 from people who think it’s just become a bad consumer product, where it’s both expensive and bad.
0:24:19 They pay some of the highest taxes in the world.
0:24:21 You know, housing prices are crazy.
0:24:30 And because of the stress on many industries, especially in LA, where production, the entertainment industry is down 40% year on year,
0:24:35 well, a lot of people just say, “That’s it. Give me my check for my house that’s been burnt down and we’re out.”
0:24:39 What the data shows is that most people typically don’t leave after a disaster.
0:24:47 And in California, despite all of the noise about people exiting the state, when they move, they usually move to another city in California.
0:24:51 And you’re going to see so much capital pour into Los Angeles.
0:24:58 Housing prices, I would imagine, will escalate in the short term because of the destruction and housing stock or available housing stock.
0:25:09 But I wonder if over the long term, you see kind of an economic boomlet or just a boom because of all the money and building that’s going to go into Los Angeles.
0:25:15 And then to just start to get off our heels and onto our toes, is this an opportunity for Los Angeles?
0:25:21 I was with, ironically, accidentally a member of the International Olympic Committee yesterday at this talk.
0:25:28 And he was saying, “You know, we want to figure this out because immediately it went to, well, will they be able to have the Olympics in 2028?”
0:25:33 And I would imagine they’ll diversify to some other venues in San Diego or San Francisco.
0:25:39 But I do think this kind of step does bring out the best in regular citizens, all those videos of people handling pets.
0:25:48 The other thing just to a shout out to our fantastic fire people and government services.
0:25:53 This was a fire that made the Chicago fire look like a barbecue.
0:26:03 And then my masculine energy moment, have you seen all these aerial vehicles dropping retardants?
0:26:14 Jesus, what bad asses in these retrofitted DC-10s swooping in 10 feet above the ground to drop flame retardants?
0:26:18 It’s something out of, I don’t know, a better version.
0:26:21 It’s something out of kind of one of these World War II movies. I just find it.
0:26:26 Well, you realize also how undie-eyed all of this actually is.
0:26:30 Right, for the way the narrative is about people.
0:26:35 Right, and it’s also all of these, I guess, beta males.
0:26:41 Is that the right term for sitting keyboard warriors saying, “If I was out there, I could do this,” right?
0:26:49 Or, you know, “I would have walked right up to,” so and so, and I don’t want to let us escape some criticism.
0:27:03 I was very disturbed by Mayor Karen Bass’ Tarmac interview where she couldn’t even summon kind words or soothing words for the people of Los Angeles when she arrived back from Ghana.
0:27:08 And it seems quite clear that it was a massive mistake for her to have gone on this trip.
0:27:13 Well, she said she wouldn’t leave, and she said no, and her campaign shouldn’t leave.
0:27:16 I think so, too. And it’ll be interesting to…
0:27:19 Some of it’s fair, some of it’s unfair, but she’s done.
0:27:24 Some things are just too bad to survive, no matter what you did in those circumstances.
0:27:29 And I think that Governor Newsom will see again how it all shakes out.
0:27:35 He is certainly sounding to be the competent on top of it all, one in all of this.
0:27:38 I think he comes out of this a winner would be my guess.
0:27:42 It will be interesting to see how all of this is written, especially looking ahead to the next president.
0:27:44 He came in that jacket and those jeans.
0:27:49 Being turned on and saying that he’s going to come out a winner are different things. I totally get it.
0:27:53 I’m literally… I’m watching him and I’m like, “What did he say?”
0:27:57 I’m like, “I see his lips moving.”
0:27:59 It’s just the hair, right? Everything’s so perfect.
0:28:03 I’m literally like, “It’s so hot there. Shouldn’t you take off your shirt?”
0:28:05 Scott, there are big wins there.
0:28:09 Can I link to a comment you just made and say something boring?
0:28:10 Yes, please.
0:28:11 Okay, great.
0:28:12 It doesn’t sound made.
0:28:17 You said that there’ll be opportunity for Los Angeles out of this in terms of the rebuild.
0:28:20 And something that I found really interesting or the boring…
0:28:25 The nerdy side of me found really interesting was one of the things that Governor Newsom did
0:28:31 was sign all these executive actions to cut red tape in terms of the rebuilding process.
0:28:37 And the enforcement of the CEQA and the California Coastal Commission, et cetera.
0:28:42 And that stuck out to me as a pragmatic person,
0:28:47 as an opportunity for Democrats to take a step back and say,
0:28:52 “We obviously know that some of these regulations are so burdensome
0:28:57 that we stand in the way of people and businesses getting back on their feet.”
0:29:01 There’s been a lot of hay made of the fact that Rick Caruso,
0:29:05 the property developer who ran for mayor against Karen Bass in 2022,
0:29:11 he had all of these properties in the Palisades that were protected by private firefighters,
0:29:13 which a lot of people didn’t know was the thing that you could do,
0:29:14 but they didn’t burn down.
0:29:17 And a lot of that has to do with when they were built
0:29:20 and the fact that they weren’t subject to these outdated regulations
0:29:24 that kept a lot of homes and businesses in more precarious positions.
0:29:31 And I’m hopeful that this will be a signal to the sane world to say,
0:29:33 “We can’t live like this.”
0:29:35 It is not 1960 anymore.
0:29:38 I understand we want to preserve the integrity of the place.
0:29:41 We want people to maintain their views,
0:29:43 and we want things to look beautiful.
0:29:47 And who doesn’t love a Spanish villa that looks like its original conception?
0:29:51 Yeah, but you are going to die if we keep it this way.
0:29:55 And that stuck out to me as a big opportunity out of this
0:30:01 to have a cleaner, faster, more economical process to a rebuild
0:30:05 and also a path forward to meet people where they are
0:30:10 because no matter your politics, everyone is frustrated by how hard it is to get things done.
0:30:13 I’m hopeful that a lot of good is going to come out of this.
0:30:15 The property destruction is obviously devastating,
0:30:19 but there was a fairly scant loss of life.
0:30:24 And I think we might be better for this in terms of looking at things like
0:30:28 climate safety, fire safety, housing permitting,
0:30:30 reinvestment in Los Angeles.
0:30:34 So I think we’re going to see silver linings everywhere here.
0:30:35 That’s my view.
0:30:37 We’re going to be right back. Stay with us.
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0:30:45 Listener, a new year is finally here.
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0:34:08 Welcome back. Let’s dive into the week in politics.
0:34:12 Biden’s wrapping up his final days in office and Trump is gearing up to take charge.
0:34:17 He’s already making waves, debating with House and Senate Republicans about how to fast-track his agenda.
0:34:22 And in true Trump fashion, he’s grabbing headlines with bold proposals.
0:34:28 Buying Greenland, reclaiming the Panama Canal and renaming the Gulf of Mexico the Gulf of America.
0:34:30 That makes total sense.
0:34:35 His goal? Almanoovering China and Russia and trade, shipping and military strategy.
0:34:39 At the same time, confirmation hearings are kicking off for Trump’s cabinet picks.
0:34:44 Pete Hegseth for Defense, Kristi Noem for Homeland Security and Marco Rubio for State
0:34:46 and Pam Bondi as Attorney General.
0:34:49 Jess, what do you make of Trump’s push to expand U.S. territory?
0:34:52 Is there any chance it could happen or is this more of a distraction?
0:34:57 I think it’s somewhere in the middle from a distraction and it could happen.
0:35:06 It’s always interesting to see conservatives or other Republicans commenting on these kinds of things when they let it slip.
0:35:11 Like, obviously this isn’t going to happen in the way that he is saying it.
0:35:16 But there might be a kernel of truth in what he’s talking about and we’re going to try to get to that point.
0:35:21 Like James Langford was on Meet the Press and said, “The U.S. is not going to invade another country.
0:35:24 That’s not who we are. The President speaks very boldly on a lot of things.
0:35:29 We’ve seen this over how he’s done the negotiations, whether it be for real estate, et cetera.”
0:35:37 But you do see, especially on the Greenland front, an interesting change in posture, I guess.
0:35:44 Moving from, obviously he’s not going to come and take over Greenland, but maybe we could have some more U.S. troops there,
0:35:47 which it seems like the Danish government isn’t totally opposed to.
0:35:53 So that feels like one of those kind of compromised positions, right, where Trump will get to say, “I won.”
0:36:04 And it was worth sending Don Jr. out there with a film crew and some snowshoes and for the Danes to be able to continue living as they do
0:36:07 and maintain a good relationship with us.
0:36:16 I think there’s going to be so much culture shock for the international community as Trump properly takes office.
0:36:21 I mean, they’ve obviously had this first few months where, I mean, he essentially did become president, right,
0:36:26 right after the election and Mar-a-Lago became the summer White House again.
0:36:33 But it will be different, right, when he is showing up at these meetings and they’re having to do, you know,
0:36:39 they’re one-on-ones with him or in the groups and we’ll have more of those strange photos from G7 meetings,
0:36:43 where he’s kind of standing there in the corner in a huff like this.
0:36:49 And people are thinking, “All right, we have four years to get through this,
0:36:55 but we also need to understand that Donald Trump has fundamentally changed the way the Republican Party is going to work.”
0:37:00 Essentially in perpetuity, right, a normie Republican is not coming back,
0:37:08 even if J.D. Vance isn’t the guy in 2028 who runs and you would assume that he is going to be since he’s vice president.
0:37:17 Even if you get a kind of more standard Republican, the magnification of the party is complete
0:37:25 and there is no return and you will have to deal with the fact that there are going to be comments
0:37:29 and people who are thinking things like, “Canada should become the 51st state,”
0:37:36 or that we should rename the Gulf of Mexico and these leaders are really going to have to decide how they want to deal with it.
0:37:43 I mean, Trudeau, he won’t be around, he feels as though he’s gotten past the annexation idea
0:37:47 and wants to really focus on the implications of the tariffs for Americans.
0:37:53 He’s like, “That’s what I need to message on, right, that if you put 25% tariffs on us, we’re going to have retaliatory tariffs
0:37:55 and it’s going to be bad for you.”
0:38:01 And then like Claudia Scheinbaum in Mexico has taken a very offensive tone.
0:38:06 I like, as she said, basically, I’m happy to be in negotiations, but we will not be a subordinate.
0:38:20 We are a sovereign nation and we are not interested in dealing with someone who’s going to talk about renaming us in whatever fashion they so choose.
0:38:26 So that’s what I’m most interested in rather than the real implications of whether he’s going to be able to pull any of this off.
0:38:32 I don’t understand, if Canada becomes the 51st state, Democrats never lose, right?
0:38:35 I mean, you’re getting a huge influx of a bunch of liberals.
0:38:37 I mean, even there are conservatives or liberals.
0:38:39 I think it’s pretty easy what’s going to happen here.
0:38:41 I’m just fucking literally nothing.
0:38:46 I’ve struggled my whole career with the difference between being right and being effective.
0:38:51 And I was saying this on our other podcast, Pivot.
0:38:57 Cara is interested in assembling a group to buy the Washington Post and she has the skills.
0:38:58 She has the contacts.
0:39:02 She’s actually on speed dial with a bunch of people who have the money to do it.
0:39:04 But she’s going about it wrong.
0:39:15 And that is, if you want to get a deal done, you call people, you call the owner, you call the people who actually get to decide whether to do a deal and you express interest.
0:39:21 You don’t make them look stupid because from that point on, the deal is just not going to happen.
0:39:25 You don’t go public and try and shame them into a deal.
0:39:35 And the idea that the Danish are going to decide, yeah, we’ll do a deal with Trump over Greenland because they’re big and bad and scary.
0:39:38 First off, the Panama Canal is just a dumb idea.
0:39:40 It’s a small business.
0:39:41 It’s a $5 billion business.
0:39:43 It’s politically stable.
0:39:48 We would get no incremental advantage by owning it that we get now.
0:39:50 It’s better to lease the thing than to own it.
0:39:51 It’s not a big business.
0:40:01 It’s only a strategic value if someone were stupid enough to start arresting ships or not allowing them safe passage, which no one has any intention of doing.
0:40:07 Everyone has mutual interest here from the Chinese to the U.S. to keep letting people go through the Panama Canal.
0:40:09 There’s no reason to do this.
0:40:12 There’s no incremental value to taking the Panama Canal back.
0:40:18 Greenland, on the other hand, has real strategic importance that has rare earth minerals.
0:40:21 But we get to use all of those things right now.
0:40:30 And the thought that we’re going to bully sovereign Northern European nation into selling us Greenland, they don’t need the money.
0:40:34 And they actually have a more healthy, homogenous society.
0:40:41 This is almost a gift to their incumbent party because it’s created an enemy where there wasn’t one and they can just stand up and show the middle finger.
0:40:42 What are we going to do?
0:40:44 Like deploy the U.S. Navy to Greenland?
0:40:55 This is just another example of Trump has figured out and he’s smart to do this, how to dominate the news and the media cycle, even if it’s a ridiculous notion.
0:40:58 So I don’t think anything is going to happen here.
0:41:07 This is just an opportunity for Claudia Scheinbaum and I don’t know who is the reclusive person in Denmark to say, you’re an idiot.
0:41:16 No, we’re not going to do this in the renaming of the Gulf to the Gulf of expensive eggs when circling back to the fire.
0:41:23 A lot of his policies could play a pretty significant negative role in the rebuilding of LA specifically.
0:41:28 Construction is a magnet for immigrants and undocumented workers.
0:41:46 And while we like to or the Republican administration wants to pay in undocumented workers as these criminals, one of the realities for why we have allowed illegal immigration to get to a point where it is out of control.
0:41:49 I will acknowledge that and we need to do something about it.
0:41:55 And I actually believe that deporting criminals who are here illegally, I’m down with that.
0:42:10 But what we don’t want to acknowledge is that not only is immigration the secret sauce of the United States economic growth, but in many ways illegal immigration is because they kind of flow in as a flexible workforce where there’s work and then they flow out.
0:42:27 They actually absorb fewer until recently social services and they pay their taxes, so they pay taxes, but they don’t call the fire department or the police department or ask for social services or stick around for social security because they’re worried about being deported.
0:42:36 And when you have 12,000 houses that need to be rebuilt, you are going to need a massive inflow of construction workers.
0:42:42 There is no way our domestic resources and domestic workers are going to be able to accomplish that.
0:42:54 In addition, if he really goes through with anything resembling this level of tariffs on Mexico or China, you’re going to see the cost of rebuilding these homes explode.
0:43:02 Everything from a washing machine to the garage door where either the parts or the entire thing is assembled in China or Mexico.
0:43:07 All of a sudden, you’re going to see reconstruction or rebuilding costs of 10, 30, 40%.
0:43:16 So you’re going to see a massive increase in labor if you can find people to build your home and then the costs are going to explode.
0:43:25 And both of these are going to be pretty easily reverse engineered into what I feel are very short term, jingoist kind of non-economic policies.
0:43:32 Yeah. Well, I mean, we were talking about this last week about, you know, humanizing the deficit for people.
0:43:41 And this is the way to get right to that. You know, this is cost of living in your face and silly policy that’s going to make it worse for the average American.
0:43:53 And I have been keeping track of the major promises that Trump made during the campaign and where we stand on those things.
0:44:05 And for central goals or promises that he sold the American public, that he was going to get done, they’re already admitting aren’t going to happen.
0:44:14 So from all of the cuts that they were going to make, I mean, Musk is admitting now that they won’t be able to do the two trillion in cuts, right?
0:44:19 Like that’s something that we already knew and that Doge didn’t have this kind of power, but that’s one of them.
0:44:26 JD Vance did his first big interview over the weekend. He was on Fox News Sunday. He gives a great interview.
0:44:35 I got to say that guy so smooth, but he is talking about prices for Americans and he says we’re going to stabilize prices for Americans.
0:44:42 That wasn’t what you guys promised us. You promised us that on day one, prices were going to fall. Guess that’s not happening.
0:44:50 Tom Homan apparently, the borders are, is privately telling GOPers that they won’t be able to deport everybody, right?
0:44:59 Like that was the tough talk of the campaign, but the reality is that you have to have more modest goals and you should focus on people who are violent felons.
0:45:05 We agree with all of that, but you still talked about a deportation force and then ending the war in Ukraine, right?
0:45:14 Where he said, I’m the one with the line to Putin. I can get this done right away on day one and the special envoy for Ukraine has said, you know, we’ll see what happens in the first 100 days.
0:45:27 So those are four key planks, right? Of the Trump-Vance platform and why everybody got on board with this motley crew of people in the new Trump administration,
0:45:35 from the Vivek Brahmaswamy’s to the Elon Musk’s to the Tom Homan’s, the Tulsi Gabbard’s, Cash Patel, whoever it is.
0:45:40 And I think that we are in for such an incredibly rude awakening.
0:45:47 I saw Jamie Dimon was interviewed on CBS Sunday morning and he said he’s cautiously pessimistic about what’s to happen.
0:45:51 Though he did, I think at one point say we’re going to have this massive recession that didn’t come under Biden.
0:45:58 But people are going to start pricing that in to what they think is going to happen going forward.
0:46:01 I’m sure the market is going to continue to respond in that way.
0:46:18 And if you lump on 25% tariffs or even 10% tariffs with our top trading partners and make it so that we can’t get any decent pricing on everything from, you know, lumber to the people that we need to be able to make our country run,
0:46:22 it’s going to be complete chaos over the next two to four years.
0:46:26 Yeah, I feel as if Donald Trump today has been the luckiest person in the world.
0:46:33 And I find that luck is perfectly asymmetric that if you’re around long enough, you have just as much good luck as bad luck.
0:46:37 And with respect to the economy, we’ve had a 15-year bull market run.
0:46:40 I think the S&P trades at a P of like 31 or 32.
0:46:46 50% of the total market cap globally is now represented by US stocks, which is a historic high.
0:46:54 I just in typically about 5% of institutional capital goes into emerging markets or excuse me, 9%, it’s about 5%.
0:46:57 Now, all the flows of capital have been into the US.
0:47:07 And I think one event, whether it’s inflation starting to spike again, or a big company announcing that reducing their investment in AI that’s just not showing the return they’d hoped for.
0:47:11 I think you can see the markets just absolutely throw up.
0:47:14 And it just feels like it’s time.
0:47:16 The markets are cyclical.
0:47:25 And I’m even, you know, I mean, it’s impossible to time the markets, but I can, I can do math and US stocks are just so expensive.
0:47:30 But I think his first year, I think this guy and nobody controls the markets.
0:47:39 We overestimate or overcredit presidents for the markets, wins or losses and give them too much blame for when they’re not strong.
0:47:48 This guy has been jumping from lily pad to lily pad, and I think he’s going to miss one in the next, I don’t know, 12 or 12 or 24 months.
0:47:51 Real quick, Jess, how do you think these hearings are going to play out?
0:47:54 I think some of them are going to be a total walk in the park.
0:48:02 I think everyone knows the folks that will be welcomed in with open arms and we’ll get some decent democratic support.
0:48:11 The whole foreign policy apparatus, you know, Marco Rubio, Mike Walts, Pam Bondi, I think there are concerns about her, especially.
0:48:20 She kind of played around with the election denialism and she’s obviously a very strong partisan and team Trump from the beginning.
0:48:22 But I imagine that she gets through.
0:48:29 It’s interesting to me that for all of this time that’s has elapsed from when we first started talking about these nominations.
0:48:36 It’s still the same names where I think people don’t know if there are secret no votes in all of this.
0:48:48 So for Pete Hegseth at Defense continues to be stories that come out, not just about his personal behavior, but about his views and how you would manage these three million people at the Pentagon.
0:48:50 Cash Patel has real concerns for people.
0:48:58 RFK Jr. is interesting because everybody, even very strong Republicans have been pushing him about the vaccine skepticism.
0:49:05 And, you know, he’s found artful ways to dodge around how he talks about, you know, I’m just for vaccine safety.
0:49:19 It’s like, bro, you’re on enough tape saying that you don’t think we should have, you know, mandatory vaccines for kids in school and what the implications of that is going to be.
0:49:22 So I think that that’s still up in the air.
0:49:30 I imagine the other health officials like your pal, Dr. Oz, will get through the surgeon general, et cetera.
0:49:33 So I think, and Tulsi Gabbard, and she continues to be, it’s interesting.
0:49:40 The ones that people are the most quiet about part of me thinks have to have the biggest objections, right?
0:49:49 And we haven’t been talking a lot about the post Assad world in Syria since it fell in 13 days.
0:50:05 But I know that people, whether you’re a traditional Republican hawk or not, are very concerned about having someone who has been on the side of Assad and Putin in such an important role as DNI.
0:50:12 So I still don’t know about those, but I think he’s probably going to have a lot of success with the less controversial picks.
0:50:16 You know, someone like a Christie Gnome where you think like, well, what business does she have having that job?
0:50:20 No one’s going to care, I think, because they have to pick your battles with this.
0:50:26 And if your battle is cash, but tell you don’t have time to talk about why Christie Gnome isn’t qualified.
0:50:33 Someone like Sean Duffy getting through a transportation, which I think is fine, or Doug Burgum coming in at agriculture.
0:50:35 Yeah, just a quick reminder on vaccines.
0:50:44 Rick Perry, who was governor of Texas, made HPV vaccination for, I believe it was for kids or was it just girls?
0:50:56 Anyways, he made it mandatory and now that these kids are coming of age, there’s a statistically significant decline in HPV related cancers.
0:51:06 These things are a gift from God. I think if you were to say, if you were to get people from both sides of the aisle who actually understand science and say, what has been the greatest innovation in history?
0:51:11 Near the top of the list would be vaccines. I think it’s so funny.
0:51:20 I’m so, I mean, I find the whole vaccine or anti-vax thing from RFK Junior disqualifying. I’m going to ignore his character for a moment.
0:51:28 The thing that’s so troubling is he’s so good on some issues. I don’t know if you’ve seen him talk about our food supply or.
0:51:33 Obama wanted him for EPA. He was in consideration.
0:51:37 It’s going to make for a very interesting conference. His will be the most interesting.
0:51:41 They’re going to be great TV, which we know is what Trump and Co likes best.
0:51:46 Yeah, it’s going to be really interesting. Okay, we have one more quick break. Stay with us.
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0:54:07 This week on Prof2Markets, we speak with Ramit Sethi, best-selling author of “I Will Teach You To Be Rich” and his brand new book, “Money For Couples.”
0:54:16 We discuss why he recommends joint bank accounts for couples, the pros and cons of prenups, and the most common arguments couples have about money.
0:54:21 Your $20 extra purchase at Target is not the reason that you’re stressed out about money.
0:54:24 It almost always tracks back to two expenses and one big problem.
0:54:31 The two expenses are people overspend on housing, they overspend on cars, they have no idea how to calculate affordability,
0:54:36 and the real problem is they just don’t have a shared vision for their rich life.
0:54:41 You can find that conversation and many others exclusively on the Prof2Markets podcast.
0:54:42 Welcome back.
0:54:52 Before we wrap, Trump has made history again, becoming the first former and soon-to-be-sitting president sentenced after a felony conviction.
0:54:57 In the Hush Money case, Trump was convicted on 34 counts of falsifying business records,
0:55:03 but Judge Juan Marchand handed down a symbolic ruling, no jail time, no fines, and no probation.
0:55:11 Trump, now a convicted felon, dismissed it as a political witch hunt while prosecutors argued he’s shown no remorse.
0:55:20 At the same time, Special Counsel Jack Smith resigned from the Justice Department and made a battle over releasing his report on Trump’s efforts to overturn the 2020 election
0:55:22 and mishandling classified documents.
0:55:28 Jess, what does this mean for Trump’s political future and public trust in our institutions?
0:55:39 Yeah, I mean, it’ll be interesting to see, I mean, the battle over whether the DOJ reports that Jack Smith put together actually get released
0:55:54 will be ongoing, I imagine it will get to SCOTUS at some point, and it should be noted that Amy Coney Barrett and Justice Roberts joined the liberal justices to allow the sentencing to go forward on Friday in the Hush Money case.
0:56:06 And you’ve seen the freak out online from luminaries such as “Captured” that Amy Coney Barrett is a traitor, you know, Steve Bannon’s turned on her, et cetera.
0:56:15 They really have no tolerance whatsoever for even, you know, one little scribble outside of the lines of total Trumpism.
0:56:27 But so Jack Smith has these two reports that have been filed, one of them is about the documents case, and because there are two co-defendants in that, and that that case could continue to go forward.
0:56:38 For instance, if Judge Cannon’s ruling on dismissing it doesn’t hold, she got it taken away, obviously, for Trump and now Smith has dropped that, but it could move forward.
0:56:48 So that report is not going to come out because you don’t want to tamper with a quote unquote “ongoing investigation,” but then there’s the report about election interference and the DC case.
0:57:01 And that’s the one that I think Trump especially doesn’t want to come out as he moves into Trump 2.0 and gets to pardoning some of the Jan Sixers, et cetera.
0:57:12 And if that does get to the Supreme Court, it’ll be really interesting to see what Amy Coney Barrett and Justice Roberts do when it comes to that.
0:57:20 It makes sense he didn’t get a sentence or anything really happened to him. The guy just won the election. It’s not practical.
0:57:33 I think it would have made a few Uber partisans feel vindicated in some way, but basically everyone who’s been an honest broker in all of this has said that the Hush Money case was the weakest case in all of this.
0:57:43 And now most liberals, including people like Adam Schiff, have admitted that Merrick Garland has been a big disappointment in that he waited a couple years to–
0:57:44 Terrible attorney general.
0:57:45 Correct. Terrible.
0:57:56 Yeah. He might have been a great Supreme Court justice if he had been able to get his hearing from Mitch McConnell, but obviously this guy did not have what it takes to meet the moment.
0:58:04 And that will, I think, be a big part of Biden’s legacy, certainly Merrick Garland’s legacy in all of this.
0:58:18 And there will be a lot of people who don’t know the strength of the case that they had, don’t know all of the details, don’t know really what played out.
0:58:26 Because this, he didn’t appoint Jack Smith right away, right after Biden comes in January 20th, January 21st.
0:58:30 Hey, we need somebody, right, to be looking into this.
0:58:43 And I hope for history’s sake that that report does get out into the ether and that it is at least something that people, if they so choose, can refer to and can look back at.
0:58:49 Because, you know, thank God that the institutions held. Thank God that Mike Pence had the courage.
0:59:04 Thank God that we got out of that day. And I’m not here to say it was as bad as, you know, 9/11 or Pearl Harbor or Sonny Haasen even put it in the category with the Holocaust, which offended me to no end.
0:59:13 But January 6 was obviously bad. And you now have JD Vance in his interview, he said that violent January 6ers will not be pardoned.
0:59:19 People who are just walking around aimlessly will get pardoned, which I think is probably where you should end up in all of this.
0:59:32 But I think that he’s going to, for people who support him, be able to effectively rewrite this as if January 6 was somewhere around a day of love or something that is really inconsequential.
0:59:39 And history is long. And so I hope that this report will at least be part of history.
0:59:50 So for those who care to know about what happened and how intricate the plan was and what role the president-elect played in all of it, that it will be available. What do you make of it?
0:59:58 I’m just excited about referring to President Trump’s photos, a felon of the United States. I think that’s what we should.
1:00:09 I should credit the comedian, I forget her name, who came up with that on threads. And anytime he and Steve Bannon are on Air Force One, we’ve got to call it conair.
1:00:14 I mean, there’s got to be a silver line. We’ve got to have some fun with this.
1:00:17 I mean, basically everyone that flies around with him, right?
1:00:35 But to your, to your point, we, or Democrats, or Merrick Garland just couldn’t have fucked up any worse. And that is insurrection, election interference, mishandling of secure or confidential defense documents.
1:00:53 These are all issues that deserve legal scrutiny. Hush money to a porn star. All that did was give the Republicans a legitimate claim that Democrats had weaponized the government and the deep state and the DOJ against their political opponents.
1:01:07 So we didn’t get our shit together, or Merrick didn’t get there, didn’t get a shit together for the real stuff, but managed to figure out a way to create a legitimate political concern on behalf of the right.
1:01:17 It just couldn’t, could not have handled this any more poorly. And some people would argue, well, he’s not, Alvin Bragg doesn’t report to him.
1:01:28 But in terms of, and this goes back to the notion, this guy gets to jump from lily pad to lily pad. Well, from an ego standpoint, he doesn’t like being called convicted felon.
1:01:37 I believe the mishandling and the cadence in the way that these legal cases played out played a big role in his reelection.
1:01:57 I don’t think anyone could have strategically thought of the chest not checkers move of, all right, here’s four cases. Let’s pick the one and move forward with it that looks like the deep state in the most politicized and make that the one that goes the furthest to fastest such that it emasculates the other three.
1:02:10 It just played out so incredibly poorly for, in my opinion, it created the ultimate miscarriage injustice and accrued or created political benefits.
1:02:27 It also revealed a level of partisanship from our public servants here in New York, that’s just gross, like that you have Tish James and Alvin Bragg on tape saying we’re going to get him no matter what.
1:02:40 That’s ugly, and you don’t want that no matter what the crime is or alleged crime that’s been committed, let alone for it to be this case, which was obviously the weakest of all of them.
1:02:46 And, you know, Fonnie Willis also created a big problem for us in Georgia.
1:03:04 I do think, and that’s, there are people who’ve been held accountable in Georgia for good reason for what went on there and now he walks around like, you know, I have a fake conviction from the stupidest case and you’ll never see or hear of the rest of it at all.
1:03:07 What do you got planned for the rest of the week, Jess Tarluff? What is Jessica up to?
1:03:23 I’m going to go to work. So, tune in at five o’clock. I’m going to go to other work. I’m going to go to more stressful work, like one-on-four work. This is just, this is a good hang, which I enjoy.
1:03:35 I don’t think I have anything that, oh, I’m going to the Knicks game tonight with a high school friend who I had lost touch with, and she texted me and said, and we both played basketball together in high school.
1:03:41 She said, shot in the dark. I have tickets to the Knicks. Would you like to go with me? And I said, yes.
1:03:48 And so we’re going to have a rekindling, I feel, and get to watch Jalen Brunson, which I’m excited about.
1:03:52 We need to double, we need to double click on that. You were a high school athlete. You played basketball.
1:03:58 And I played tennis in college. Yeah, I played tennis and basketball in division three. Not, you know, I was not.
1:04:06 You’re a college athlete. That’s very impressive. Or I was. And were you a power forward? What was your position in basketball?
1:04:11 Yes, technically a power forward, but I would do the tip. So I was, I’ve been five-eleven since like seventh grade.
1:04:13 You were the center? Well, for the tip.
1:04:20 Okay, let me guess. That was not, that was not the most competitive league in wherever, I imagine you’re going to some Tony Prep school.
1:04:22 We’re, we’re called the Ivy League.
1:04:23 Sign each other.
1:04:28 The New York City Ivy League. But where’d you go to high school? Let’s, let’s lean into your white privilege.
1:04:30 Where did you go? Where’d you go to high school?
1:04:34 I went to a school called Dalton. You look so self-conscious right now. I went to Dalton.
1:04:40 You look like, you look like the four when you get in their face. You went to Dalton. Good for you.
1:04:48 Yeah, but I mean, it’s for another time. And I’m sure this topic will come up, but it was a very interesting journey through high school athletics.
1:04:58 And my dad, who was a lawyer, threatened a Title IX lawsuit against my high school because they wouldn’t let the girls get the prime time slot.
1:05:02 So no parents could attend, right? If your games at four o’clock, parents work, they can’t come.
1:05:08 And it made us very much personas non grata at school, but it was an interesting lesson.
1:05:10 Oh, your parents were those parents?
1:05:17 Just my dad. My mom was like hiding in the corner. So we’d have the 730 game and still no one would come because no one wanted to watch the girls.
1:05:25 There were more parents there. He really met well, but it was an interesting lesson in standing up for yourself that my dad imparted upon us as a very young age.
1:05:27 And when parents have too much time.
1:05:30 Yes, he did have a flexible work schedule.
1:05:34 And you played tennis in college. Did you get a scholarship?
1:05:43 No, I didn’t. I was lucky my parents paid for college, but I got to play and it was great.
1:05:56 I went to Dalton and played basketball in tennis. I went to university high school, which now is, I got the distinction of having more homeless kids than any LASD school.
1:06:00 And I got cut from the baseball team. So we have almost nothing in common.
1:06:04 How did we end up here? I actually think about that a lot. How did we end up here?
1:06:06 How did we end up here?
1:06:09 Do your boys play competitive sports?
1:06:18 My boys have just the right amount of athletic ability and that is very little and they have enough to play sports at their schools.
1:06:21 They both play football, better known as soccer for you.
1:06:22 We’re talking European.
1:06:25 Unwashed masses here in the U.S.
1:06:35 And they can play, which is a ton of fun, but there’s absolutely no illusions that they’re ever going to, you know, use that on their college apps or play professionally.
1:06:41 Whereas for a brief moment, I thought I might be an athlete and I tried out for a couple of teams that used to lay and got cut and ended up on their career team.
1:06:44 But anyways, have a great time with the next game.
1:06:46 Actually, Jess, why don’t you read us out?
1:06:50 All right. That’s all for this episode. Thank you for listening to Raging Moderates.
1:06:56 Our producers are David Toledo and Chenenye Onike, our technical director is Drew Burroughs.
1:06:59 You can find Raging Moderates on its own feed every Tuesday.
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0:00:35 Today’s number, $900,000.
0:00:40 That’s the value of the watch Mark Zuckerberg wore as he announced the end of fact-checking
0:00:41 at Meta.
0:00:45 True story, a boy said to Mark Zuckerberg, “My daddy said you’re stealing our information,”
0:00:48 to which Mark responded, “Is not your dad.”
0:01:00 Okay, I have another one.
0:01:01 You ready?
0:01:02 Okay.
0:01:03 Everyone needs to turn on the camera, though.
0:01:05 We have all these interns.
0:01:08 What’s the difference between Mark Zuckerberg and my neighbor Steve?
0:01:09 What?
0:01:10 Steve is not a cunt.
0:01:11 Wow.
0:01:12 Everyone’s laughing.
0:01:16 By the way, because I’m now residing in London, I can say that word.
0:01:21 It’s really the primary advantage of living in London is I can use that word and it doesn’t
0:01:26 have the same kind of misogynistic, you know, draw de vivre to it.
0:01:27 You need to do it with an English accent, though.
0:01:28 It sort of softens the blow.
0:01:29 Oh, I appreciate that.
0:01:30 I’d here try.
0:01:34 I’d like to end your career early and reduce your negotiating leverage for bonus season.
0:01:39 Say, “Well, we’re overlooking some of the faux pas you’ve made.”
0:01:40 Maybe later.
0:01:41 This is comedy gold.
0:01:43 Did you see that watch he was wearing, Scott?
0:01:44 The Zuckerberg was wearing?
0:01:45 I didn’t.
0:01:47 I should look at her and pull it up.
0:01:48 Is it nice?
0:01:49 I’d like to get your thoughts.
0:01:50 I think it’s a terrible watch.
0:01:52 I think it looks very ugly.
0:01:55 What do young aspirational guys want?
0:01:56 What is the watch you want?
0:01:58 Oh, I think we talked about this.
0:01:59 You want a Rolex, right?
0:02:00 I’ll take a Rolex.
0:02:06 I think if I could have any watch, I think it would be a Patek Aquanaut, would be my
0:02:07 number one.
0:02:08 Patek Aquanaut.
0:02:09 Wow.
0:02:10 You really know what you’re talking about.
0:02:11 I don’t even know.
0:02:16 I don’t know anything about watches except, back to me, my mom gave me a really nice
0:02:18 watch or what felt like a nice watch for me.
0:02:21 It was a, believe it or not, it was like a high-end Casio, which in my household was
0:02:22 pretty nice.
0:02:24 I think it cost 200 bucks.
0:02:25 And I was rowing crew.
0:02:26 She gave it to me in college.
0:02:30 Said, after I got through my first year, she said, “I’m really proud of you.
0:02:34 You know, a nice moment for us to give me this nice watch.”
0:02:40 And literally second morning in crew practice, I heard like the buckle came undone and I
0:02:41 saw the watch.
0:02:46 I mean, we’re in the middle of a race and the watch somehow leapt onto the oar like
0:02:52 a spider and then slowly just drifted down the oar until it went into the water.
0:02:53 Sucks.
0:02:54 Oh God, it was horrible.
0:02:55 I think it traumatized me.
0:02:57 I don’t think I’ve had a nice watch for-
0:02:58 So what’d you do?
0:02:59 You just kept going?
0:03:00 Oh, there was nothing you can do.
0:03:03 You’re in a race and everyone’s dying and about to faint.
0:03:04 You don’t stop them.
0:03:05 My watch.
0:03:06 You could.
0:03:08 I wouldn’t put it past you.
0:03:13 That is not the vibe in the middle of a 2000 meter race and you know, varsity crew, UCLA.
0:03:20 But anyways, and then as I got some money, I started buying panorized and that’s the
0:03:25 only watch I have, except it looks ridiculous on me because I have total women’s risks.
0:03:27 It looks like, it’s like, how about some Scott with your watch?
0:03:28 It looks kind of ridiculous.
0:03:29 You love that watch though.
0:03:30 All right.
0:03:31 What are we talking about today, Ed?
0:03:44 Start with our weekly review of market vitals, the S&P 500 declined, the dollar rose, Bitcoin
0:03:50 fell and the yield on 10 year treasuries increased, shifting to the headlines, Anthropic is reportedly
0:03:55 in talks to raise $2 billion in a round that would value the company at $60 billion.
0:03:58 That’s more than triple its valuation from just a year ago.
0:04:02 It would also make Anthropic the fifth most valuable startup in the US.
0:04:08 Quantum computing stocks plummeted as much as 40% after Nvidia CEO Jensen Huang expressed
0:04:12 skepticism about the technology’s near-term potential.
0:04:17 Speaking at the CES trade show, Jensen Huang said that useful quantum computers are still
0:04:19 20 years away.
0:04:25 And finally, Getty Images is acquiring its stock image rival, Shutterstock, in a deal
0:04:28 that will create a company worth $3.7 billion.
0:04:33 Shares of both companies surged on the news with Shutterstock climbing 19% and Getty Images
0:04:36 rising 25%.
0:04:41 Scott, your thoughts starting with this new potential round for Anthropic that would value
0:04:43 it at $60 billion?
0:04:45 So it feels about right.
0:04:51 Anthropic based on its revenues would be valued at 69 times, OpenAI trades at 42.
0:04:53 I think there’s enough drama now at OpenAI.
0:04:58 Essentially the market leader, essentially the stock market loves the market leader and
0:04:59 gives it a premium.
0:05:04 So if you have, say Lyft is doing a quarter of the revenue of Uber, it will trade at an
0:05:05 eighth of the valuation.
0:05:07 The market loves big.
0:05:12 And I think especially recently, you get extra premium for being the number one because
0:05:15 of a lack of antitrust and DOJ action.
0:05:20 So this is a little unusual in the sense that Anthropic is trading at a richer multiple on
0:05:21 revenues than OpenAI.
0:05:28 And I think that’s because Anthropic’s association with Amazon and some of the drama most recently
0:05:36 at OpenAI, I think people look at Bezos involvement, Anthropic, it just feels like Anthropic has
0:05:38 fewer moving parts right now.
0:05:42 And one of the things I recommend to people is start playing with AI.
0:05:48 But also what I do is whenever I prompt OpenAI, I also prompt Anthropic just to compare and
0:05:50 contrast the answers.
0:05:52 I like Anthropic, I use it.
0:05:56 I find that ChatGPT has more data a little bit.
0:05:57 It’s like a more robust AI.
0:06:05 But for what I use AI a lot for and that is brainstorming and help me edit this paragraph.
0:06:09 I found Anthropic is sort of, if you will, the riders, LLM.
0:06:11 It’s better at tone away.
0:06:12 Yeah, absolutely.
0:06:18 But this is Anthropic is my best investment of 2023.
0:06:23 And that is when FTX filed for bankruptcy, I got the bankruptcy filing and I saw that
0:06:27 they’d invested $500 million in Anthropic and I tried to estimate when Anthropic was
0:06:28 worth.
0:06:32 And I estimated at that time and I overestimated it was worth $30 billion and that they’d invested
0:06:35 a valuation of $5 billion.
0:06:39 So I thought, okay, they own 10% of a company worth $30 billion, that’s a $3 billion stake
0:06:45 on claims against an FTX or the creditors of $9 billion, meaning that every claim was
0:06:51 worth $0.33 on the dollar of Anthropic stock and you could pick up FTX claims at $0.22 on
0:06:52 the dollar.
0:06:56 So the entire justification for my moving in and buying what for me was a fairly large
0:07:02 amount of claims against a bankrupt FTX was I thought there was, I discovered this kind
0:07:06 of golden egg inside of the bankruptcy filing.
0:07:10 And it ended up, I believe that they’d already sold their stake in it.
0:07:16 But because of the rip up, or maybe is that true, I forget, because of the rip up in the
0:07:20 crypto market since then, obviously that trade has worked out and FTX is about to distribute.
0:07:24 But anyways, I feel as if my, you know, people say, well, how do you make money in AI?
0:07:31 I figured out a way, if not accidentally to make money in AI, Claude only has 2% market
0:07:37 share of all the visits to AI chatbots, open AI dominates with 89%, followed by Jim and
0:07:40 I with seven in perplexity with 2.3.
0:07:43 What are your thoughts on Anthropics most recent round?
0:07:46 I think you made the right point, which is that it’s interesting that it’s got a higher
0:07:47 multiple.
0:07:48 And I think it’s for a lot of reasons.
0:07:53 I think the Amazon investment helps a lot, but I think the growth rate is also a huge
0:07:58 part of this because, you know, a year ago, they had a run rate of $100 million and you
0:08:01 look at it today and it’s almost 900 million.
0:08:06 So they have nine X in roughly 12 months.
0:08:12 Now if you look at the, the pure ARR, it still pales in comparison to open AI, which is at
0:08:14 around $4 billion.
0:08:18 But when you just think about the gap between these two companies a year ago, Anthropics
0:08:22 business was around 15 times smaller than open AI’s.
0:08:23 And today it’s four times smaller.
0:08:28 So, you know, I used to say that these two companies, they’re not in the same league.
0:08:31 Open AI is the only guy in AI, but I don’t think you can say that anymore.
0:08:36 I think Anthropics is catching up and just culturally speaking, you know, I think a year
0:08:38 ago, people didn’t really know what Anthropics was.
0:08:42 I don’t think people really knew what Claude was either, but that’s not true anymore.
0:08:45 This is a very popular product.
0:08:47 People know what Anthropics is.
0:08:48 People use Claude.
0:08:52 So you know, it is an extremely rich valuation.
0:08:57 It is a premium compared to open AI, but I do think it’s warranted because this company
0:09:02 has definitely solidified itself as the most credible competitor to open AI.
0:09:05 So kudos to Anthropics.
0:09:07 Let’s move on to quantum computing.
0:09:12 All of those stocks were Getty and Ion Q and all of these quantum stocks that we talked
0:09:17 about a few weeks ago, they absolutely crashed when Jensen went out and said that he thinks
0:09:21 that this technology will only be useful in about 15, 20 years.
0:09:25 Your reaction to the market’s reaction to Jensen Huang.
0:09:29 It’s just incredible that one man can move markets like this.
0:09:34 And he has such an incredible reputation as someone who has real insight into technology
0:09:38 and knows where the puck is going, having transitioned out of GPUs for the made richer
0:09:44 graphics for Fortnite into becoming the leader in the hottest tech trend in history and building
0:09:47 what kind of pings back and forth between the most valuable and the second most valuable
0:09:51 company in the world that is worth more than every stock market with the exception of the
0:09:52 Japanese stock market.
0:09:56 So this guy can absolutely move markets.
0:10:01 And also, and I wish I’d bet against this, it just feels like quantum got out in front
0:10:02 of its keys.
0:10:07 And it’s easy to say now, but Josh Wolf at Lux Capital, who’s sort of this big brain
0:10:13 in terms of predicting kind of, he has a VC fund that invests in kind of scary forward-looking
0:10:14 shit like, you know, deep tech.
0:10:15 Yeah, deep tech.
0:10:19 I remember him saying, I would always say, what’s the most overhyped technology?
0:10:22 And he would, he would consistently say quantum computing.
0:10:24 So I don’t think it’s a surprise.
0:10:28 It’s just weird when you see a high flying stock get cut in half in one day, it’s going
0:10:35 to be highly, highly volatile and a little bit drafting off the excitement of AI.
0:10:38 But I don’t, this is one of the technologies.
0:10:42 This company, if you look at its multiples, and again, easy to play money money quarterback,
0:10:44 it just, it didn’t make sense at that.
0:10:48 And I would argue even now, if you didn’t know it had been cut in half, it still looks
0:10:49 dramatically overvalued.
0:10:50 Yeah.
0:10:55 My big takeaway from this is that the dumb money is on quantum computing.
0:11:01 Because if you, if you sold this stock, just because Jensen Huang got on the stage and
0:11:05 said that quantum is 20 years away, God help you.
0:11:13 Because you know, one, why are you reacting so fervently to what Jensen Huang is saying?
0:11:17 But two, this wasn’t new information for anyone who just reads the news or who even does like
0:11:18 a modicum of research.
0:11:24 I mean, we said this on this podcast three weeks ago, quantum has potential, but it’s
0:11:26 a long, long way away.
0:11:33 And I’m just astounded that this is news to shareholders in Regetti and shareholders
0:11:38 in Ion Q, the, and all these other quantum stocks is very, very basic fact.
0:11:42 And it reminded me of something that one of my old finance professors told me.
0:11:48 And that is the following statistic, which is that the average investor, when they go
0:11:54 stockpicking, they will actually spend less time deciding which stock to buy than they
0:11:58 will on deciding which clothes to buy when they go online shopping.
0:12:04 And I think that’s a really important thing to remember when we are investing ourselves,
0:12:08 because there’s always this tendency to assume that the market is smarter than you, to assume
0:12:13 that when Regetti goes way up or it goes way down, you have this question like, oh my God,
0:12:15 what does the market know that I don’t?
0:12:21 And this is a reminder that actually a lot of the time, the market is just as clueless
0:12:22 as you are.
0:12:23 And that’s exactly what happened here.
0:12:27 Investors saw this headline from Google about quantum chips.
0:12:31 They went out and they found the top quantum stocks on Reddit.
0:12:35 And then suddenly Jensen Huang gets on stage and says, hey, this isn’t that big of a deal.
0:12:38 And then suddenly they start selling like crazy, which tells me these guys actually
0:12:42 had no idea what they were buying in the first place.
0:12:46 I think that one thing, and I mean, this is a compliment, it’s clear-looking at you that
0:12:49 that is absolutely not true, that you spend much more time on your investments than your
0:12:50 close purchases.
0:12:54 That’s no one is ever going to accuse you of that.
0:12:59 But what you’re talking about though is not a wisdom of crowds, but an ignorance of crowds.
0:13:03 And that is past performance is no guarantee of future performance.
0:13:05 This is an endorsement of investing in indexes.
0:13:12 And just moving on to Getty images here, your reaction to a merger between these two stock
0:13:18 image companies that we basically never think about, they’ve been rivals for as long as
0:13:21 I’ve lived and suddenly they want to merge.
0:13:25 You know, just as AI has kind of gone from Amoeba to Tyrannosaurus Rex and what feels
0:13:29 like two or three years, they’re smart to bulk up.
0:13:34 And the analogy I would use is what AI has done to the image marketplace is pretty similar
0:13:37 to what Netflix is doing to everyone else in streaming.
0:13:40 And that is everyone else in streaming is like, we just can’t compete here and they’re
0:13:41 moving faster than us.
0:13:42 We need to bulk up.
0:13:43 We need size.
0:13:47 We need to merge and then lay off 50% of people at HQ and cut our costs and just have
0:13:49 a more robust offering.
0:13:51 And I think that’s what’s happening here.
0:13:56 I think these folks, I think the folks at Getty and Shutterstock said, we can’t be
0:14:01 Germany, we’re Russia and we’re England and we may hate each other, but we need to bind
0:14:05 together to try and take on Germany because they invaded Poland and they’re heading for
0:14:06 us right now.
0:14:09 I love the World War II analogy, this makes me feel 85.
0:14:17 This is a smart move and it’s entirely inspired by AI and I’d hate to be in a non-revenue
0:14:20 generating role at either of these companies.
0:14:22 I think you’re going to see pretty significant layoffs here.
0:14:23 Yeah.
0:14:27 And we keep on seeing this dynamic in lots of different industries.
0:14:31 You mentioned the entertainment companies consolidating in the face of Netflix.
0:14:35 Another one would be Albertsons and Kroger, the grocery companies trying to consolidate
0:14:40 in the face of Amazon, which didn’t go through and now we’re seeing it in stock images of
0:14:41 all places.
0:14:46 But I think an interesting question here because the natural response from regulators
0:14:49 is going to be to block this.
0:14:54 These are the two largest companies in the stock image market and it’ll create a monopoly
0:15:00 in that market, but I would bet that Getty and Shutterstock will make the same argument
0:15:05 that Albertsons and Kroger made, which is, well, actually it all depends on your definition
0:15:10 of market because yes, we control 85% of the stock image market, but if you’re looking
0:15:16 at just images in general or just licensed visual content, we’re probably less than
0:15:21 1%, because as you mentioned, those guys over at Sora and Midjourn in all these generative
0:15:24 AI image shops, they’re all killing us.
0:15:28 And I feel like that’s going to be the big question for the FTC over the next few years
0:15:31 is like, how do we define market?
0:15:35 Is it the grocery market or is it the overall retail market?
0:15:38 Is it the cable market or is it the content market?
0:15:41 And that’s a pretty tough question to answer.
0:15:44 I think that’s exactly the right analysis and I think the FTC and I’m a huge fan of
0:15:51 Lena Kahn, Cherkan, my favorite Star Trek hero, but Cherkan, in my opinion, got this
0:15:57 one wrong and that is she categorized Walmart and Amazon as a different category and said
0:16:02 that Albertsons and Kroger are in the same category and they’d be too powerful not acknowledging
0:16:05 that these companies are competing against Walmart and Amazon.
0:16:10 I think these guys are doing this out of desperation, not to develop monopoly pricing power, because
0:16:14 I can tell you when I’m on Sora, I literally go back to the days thinking, I don’t think
0:16:18 I’m ever going to spend 1200 bucks for a really beautiful black and white image of Aretha
0:16:20 Franklin again, which is the kind of thing I used to do.
0:16:25 I’m not joking, I remember the exact image, I forget, I think I was doing a thing on makeup
0:16:31 and she had these extraordinary eyelashes and I think these guys are going to come under
0:16:36 enormous pressure and I think of that Coca-Cola commercial that was just produced where they
0:16:38 used AI to produce the entire thing.
0:16:42 I didn’t see that.
0:16:46 It’s okay, it’s not as good as the analog stuff and the creators, but my guess is it
0:16:56 cost about a 40th or two or 10% of what to bring animators and CGI and all that good
0:16:59 stuff.
0:17:01 These guys are under a real existential threat.
0:17:05 I hope they’re allowed, this merge was allowed to go through because I just would not want
0:17:10 to be one of these guys waiting for the knock at the door when Sora comes out with version
0:17:16 3.0 in 18 months and it’s just much better.
0:17:20 I was experimenting with it and it’s still a little meh.
0:17:26 It feels like a computer generating images, but I just wouldn’t be surprised if you can
0:17:33 say similar to, maybe we can do this now, in the voice of Bob Dylan, write me a paragraph
0:17:37 on this that you’ll be able to say in the imagery or in the style of Annie Leibovitz,
0:17:42 give me an image depicting the following with these types of emotions now.
0:17:47 What I would argue is this is the appetizer before the main course and the main course
0:17:51 here is that I believe this acquisition will be allowed to go through and then I think
0:17:59 Anthropic or ChatGPT or OpenAI is going to buy this company because they’ll use this
0:18:05 repository of unbelievable imagery to supplement as unique data that they can crawl and will
0:18:09 somewhat give them a bit of a heat shield from liability because what you’re going to
0:18:14 see here, you’re going to see a lot of photographers, file class action suits or suits against.
0:18:21 For example, Pottery Barn was famous for going to the Italian Furniture Fair and finding
0:18:27 these amazing artisans out of Milan and Florence that were putting together beautiful home
0:18:33 wares and furniture and then taking pictures of it, buying one, and then ripping it off
0:18:40 and basically producing a gorgeous chair for $1,200 instead of $8,000 and the artisanal
0:18:46 community was just furious, furious at Pottery Barn, furious restoration hardware and they
0:18:51 all learned when they were called into court to give depositions to say it was inspired
0:18:52 by.
0:18:56 We didn’t copy it but you’re allowed to be inspired by Frank Gehrer, you’re just not
0:18:59 allowed to perfectly copy him.
0:19:05 Anyways, you can see that I think it would make sense for them to have this offering
0:19:09 where because they have license from all these amazing photographers, these imagery and they
0:19:13 get some sort of licensing fee, I would imagine from Getty or maybe Getty’s already purchased
0:19:14 the licenses.
0:19:18 So if you type in Scott Galloway, you’ll get some images of me and some of them, I can’t
0:19:21 use many of them because they’re from Getty and Getty would show up at these events and
0:19:24 take a really cool picture and I’d think, “Oh, I love that,” and they’re like, “Oh, yeah,
0:19:28 just go to our site,” and then I’d have to spend, you know, I’m not very famous so mine
0:19:31 was like $50 or $100 to use my image.
0:19:32 More expensive now, baby.
0:19:35 You know it the most, you know it the most.
0:19:36 Thanks for saying that.
0:19:40 By the way, I don’t know if you noticed but I had a Pico laser yesterday so I’m looking
0:19:42 especially young and robust.
0:19:43 What is that?
0:19:47 It’s one of the things I do in addition to NAD treatment, testosterone.
0:19:51 I did PRP shots yesterday on my shoulders and by the way, I cannot move my left arm right
0:19:54 now so you did not ask me to do anything with my left arm.
0:19:57 But it’s one of those things where I’ve decided I’m going to live forever and try and look.
0:19:58 What does it do?
0:19:59 What does it do to your face?
0:20:00 Well, dude, look at me.
0:20:01 I’m gorgeous.
0:20:04 Yeah, of course you’re gorgeous but you looked gorgeous last week too.
0:20:09 Now it’s, I don’t know, it’s one of these things I pay $1,800 for with a really thoughtful
0:20:14 dermatologist who has signed picture of Jennifer Aniston in his lobby so I assume he’s doing
0:20:19 her work and so he runs his laser of my face and it’s really fucking painful.
0:20:24 It feels like I’m being pelted with hot sand on my face and the next day my skin feels
0:20:29 a little bit tight like there’s some Swiss gnome behind me with very small hands pulling
0:20:32 the skin back on my face.
0:20:35 The same person who sews my mattress I think.
0:20:38 Anyways, and I feel younger.
0:20:43 There’s so much ridiculous shit I am doing that I thought I would never ever do.
0:20:44 It’s amazing.
0:20:45 Every week you’ve got something new.
0:20:49 That guy, whoever your guy is, must be printing money right now.
0:20:51 I think he is printing money.
0:20:57 He’s a lovely guy and he does good work although I got some Botox in my forehead and actually
0:20:59 I’m laughing hysterically right now.
0:21:02 You just can’t tell.
0:21:05 Yeah, now I have poison injected into my forehead.
0:21:06 Anyways, where were we?
0:21:07 Bring us back.
0:21:08 What were we talking about?
0:21:11 I think we’re wrapping up the headlines now so we’ll be right back after the break.
0:21:25 I can’t feel anything.
0:21:27 Support for the show comes from the Fun Rise Innovation Fund.
0:21:31 The investing world seems to be bending towards democratization but venture capital always
0:21:34 felt like it may be one of the last ivory towers to fall.
0:21:38 It requires a lot of capital, the right relationships, et cetera, et cetera.
0:21:42 That’s probably why when the Fun Rise Innovation Fund launched promising to democratize venture
0:21:45 capital there was a lot of skepticism.
0:21:48 But the progress they’ve made in a few years is hard to argue with.
0:21:54 The innovation fund has now built a $150 million portfolio of some of the most highly sought
0:21:58 after private tech companies in the world and their minimum investment is just $10 which
0:22:01 is virtually unheard of for venture capital.
0:22:04 Look, even the best venture funds should be categorized as high-risk investments.
0:22:09 Venture investing is not, for everyone, see above, high-risk but at a minimum you can
0:22:14 visit fundrise.com/profche to check out the innovation funds portfolio for yourself.
0:22:19 Visit fundrise.com/profche to check out the innovation funds portfolio and start investing
0:22:20 today.
0:22:24 Relevant disclaimers can be found at the end of the show and at fundrise.com/innovation.
0:22:34 We’re back with ProfG Markets.
0:22:39 The DOJ has filed a lawsuit against some of America’s largest real estate firms, including
0:22:42 Cushman and Wakefield, Blackstone and Greystar.
0:22:48 This legal action expands on an earlier lawsuit against software company RealPage, which alleges
0:22:53 that the company’s rent-setting algorithm enabled illegal price-fixing.
0:22:57 That was one of the largest government actions ever taken against a private rental housing
0:23:04 company and now the DOJ claims these landlords use RealPage’s algorithm to artificially inflate
0:23:06 rents across the country.
0:23:12 Scott, we’ve talked a lot before about how Americans are frustrated with the high cost
0:23:14 of housing.
0:23:16 The DOJ looks like it is addressing it.
0:23:18 What are your thoughts on this, Piv?
0:23:20 My first observation is Cushman, Blackstone and Greystar.
0:23:23 It sounds like warring tribes in Dune 3.
0:23:29 These are just such badass names that should be in a sci-fi movie, but anyways, I’m a little
0:23:30 mixed on this.
0:23:38 I think that as a progressive, the need for a reaction is to company bad and rents.
0:23:39 We have a housing crisis.
0:23:41 I think it’s a supply-side crisis.
0:23:45 I think that the government should weigh in with subsidies to inspire the markets, similar
0:23:50 to what they did with chips, or what have you to just get people building again and also
0:23:54 some sort of legislation that makes it harder for local governments where we put permits
0:23:59 in the hands of homeowners instead of civic officials to free up development.
0:24:05 We just need more supply because I think what it is is essentially you run this algorithm
0:24:10 and you put in the addresses of all your rental units and it says here is the optimal, i.e.
0:24:15 the highest rent you could charge based on, it’s almost like AI, that if you own, I have
0:24:19 some experience with this, I have some rental units in Southern Florida and I thought, “Oh,
0:24:23 I should get this to just run it against our rents.”
0:24:27 Basically, what it does is it’s like, “Okay, if you’re charging market or above market,
0:24:31 it says your money good, but if you’re not, it encourages you to raise those rents.”
0:24:35 The problem here is it’s information that is asymmetric and that is the landlord has
0:24:45 access to better information and as a result, maximizes the rent to their advantage.
0:24:49 That’s why your boss tells you not to talk about your salary because the people in charge
0:24:54 who have information on everyone’s salary, they have advantage because if someone’s working
0:24:59 in the company being underpaid and they don’t know they’re being underpaid, they don’t know
0:25:04 that Bob down the aisle is making 40% more for no apparent reason other than maybe he
0:25:10 was there longer or came in more recently when the market, whatever it might be.
0:25:11 You might argue that is unfair.
0:25:18 By the way, we purposely price our units 10 to 20% below what we think is market because
0:25:21 I find if you have great tenants, you just hold on to them and it just reduces the amount
0:25:23 of maintenance and headache.
0:25:26 Anyways, enough for a two second link.
0:25:33 Institutional investors are about 25% of the residential market and these landlords named
0:25:36 in this DOJ case manage approximately 12%.
0:25:43 Now, if they had real concentration in a market and they were all using the same software,
0:25:47 then you could argue this is technically leading to price fixing.
0:25:54 This to me doesn’t feel necessarily like there’s enough concentration or power to engage in
0:25:59 price fixing and that they’re basically just using analytics to optimize their pricing.
0:26:05 This is a bit of a populist movement, but I don’t know if legally this holds water.
0:26:10 I think the government plays a role here, but it’s increasing the supply.
0:26:15 To me, I don’t understand how the economics here add up to price fixing.
0:26:16 What are your thoughts, Ed?
0:26:18 Yeah, I’m going to take the other side of this.
0:26:19 As a renter.
0:26:20 Exactly.
0:26:21 As a renter.
0:26:22 As the landlord.
0:26:23 I’m the landlord.
0:26:24 You’re the renter.
0:26:25 Guess what we think about this issue.
0:26:26 I love that.
0:26:27 Exactly.
0:26:35 So, those six firms in that lawsuit, they own 1.3 million rental units across America,
0:26:37 which I believe is a lot.
0:26:46 I think the thing to focus on is the trend that is happening because in 2002, investors
0:26:53 made up around 12% of all residential real estate transactions, and today they make up
0:26:55 25%.
0:27:04 And it is projected that by 2030, investment firms will own 40% of the single family rental
0:27:06 units in America.
0:27:07 So that is a huge trend.
0:27:16 And what I’ve always felt with housing, where rents and prices are going up astronomically,
0:27:19 is that, yes, of course, there must be a supply issue.
0:27:22 There must be an issue with we don’t have enough houses.
0:27:25 But I’ve always felt there’s got to be something else.
0:27:28 And that’s why I really like this lawsuit, because this basically gives us the hard evidence
0:27:32 of, yes, there is something else going on here.
0:27:37 And it is the fact that you have these six gigantic firms that are buying up as much
0:27:41 property as they can, and they have all of these things on their side.
0:27:46 As you mentioned, they have this real page algorithm, which leverages their exclusive
0:27:49 access to all of this data that we regular people don’t have.
0:27:53 And they use that to algorithmically extract as much rent as possible.
0:27:58 In addition, they also have some evidence that these companies have been directly collaborating
0:28:00 with each other to raise rents.
0:28:04 And to your point, on the legality of this issue, I think that that probably holds more
0:28:10 water than saying, hey, you can’t all be using this extremely powerful tool that the regular
0:28:11 people don’t have access to.
0:28:17 But having said all of that, we’re talking about it from a legal perspective.
0:28:21 What is the true legality of this situation?
0:28:31 But I would say that this might just go beyond legality, because I feel like today, if we’re
0:28:38 living in a world where people can’t afford to buy homes or even rent homes, then these
0:28:41 questions of legality start to go out the window.
0:28:42 Just some stats here.
0:28:47 In the past four years, the cost to rent a single family home has risen 30%.
0:28:52 So rent is rising faster than inflation, is rising faster than wages.
0:28:56 And this is in combination with the fact that the prices of homes, they’re rising higher
0:28:57 than ever.
0:29:00 And the medium home price is nearly half a million dollars today.
0:29:05 So it’s difficult to rent, and it’s nearly impossible to buy, which just tells me that
0:29:07 who cares about the legality of this?
0:29:11 Someone needs to be doing something about this, because this is becoming the most sensitive
0:29:12 topic in America.
0:29:16 And I think the last thing you want, if you’re Blackstone or if you’re Cushman and Wakefield
0:29:22 or if you’re Greystone, is to basically be unanimously labeled as this enemy of the people.
0:29:27 And they’re increasingly beginning to look like that, at least from my view, as a lowly
0:29:28 renter.
0:29:29 I think there’s some really good points in there.
0:29:33 So first off, let’s just acknowledge there’s a housing crisis.
0:29:38 And that is, if you’re a young couple trying to get your life started and you just have
0:29:42 absolutely, rent is just eating up your entire paycheck.
0:29:47 And it is just so hard for you to move out of your parents’ house, and almost the American
0:29:49 dream has become a fantasy.
0:29:54 So we know at least a minimum big part of it, it’s just a supply problem.
0:29:56 We just need more homes built.
0:30:01 Now the argument you might make, so there was a proposed legislation or a movement last
0:30:05 year to get institutional investors out of home ownership full stop.
0:30:06 Right.
0:30:07 Rowe Connors, right?
0:30:11 That if you own more than a hundred units, you have three years to divest, thinking that
0:30:15 more competition would give them less market power.
0:30:20 Now, what people forget is that, one, we have very strong private property laws.
0:30:24 And when you limit the amount of capital going into something, keep in mind, there was someone
0:30:27 selling that unit to someone else.
0:30:32 And that person made money and made more money by virtue of the fact that institutional capital
0:30:34 had come in.
0:30:39 Also what people oftentimes rate is a lot of institutional capital has come in and purchased
0:30:45 homes as they did in 2000 to 2007, and then got their asses handed to them and had to
0:30:49 sell all of them and puke all of them into the market, and a lot of people got to buy
0:30:50 home.
0:30:54 I mean, these institutional investors aren’t always the smartest buyers.
0:30:58 Colony Capital identified Florida, I believe is Florida, as a great place and went in and
0:31:03 started buying up tons of rental units, and then found that maintenance and management
0:31:07 was a huge headache and ended up, I believe, selling them at not nearly the gain of maybe
0:31:09 even a loss.
0:31:14 So there is institutional capital coming into almost every consumer market.
0:31:19 The question is, what could we do to bring down housing prices?
0:31:27 And I think legally, if you have 50%, if two companies own 50% of the rental units in,
0:31:35 say, Southern Florida, or let’s pick another market in Buckhead, Atlanta, and COX is calling
0:31:39 COI and saying, “Wink, wink, we’re going to raise prices 8% this year or rents,” that’s
0:31:42 illegal, that’s price fixing.
0:31:49 But I get nervous around the unintended consequences of sequestering capital from a market and
0:31:52 that it ends up backfiring.
0:31:57 For example, rent control in Santa Monica meant to help renters, right?
0:31:59 You can’t raise rents.
0:32:04 And the problem is no one’s building in Santa Monica because there’s no economic incentive.
0:32:08 So as a result, what’s happened is anytime something comes up for rent, usually when
0:32:15 someone dies, it gets 100 applications and they end up picking that nice white family
0:32:22 that makes $400,000 a year for the $800 a month rent controlled apartment.
0:32:26 And it’s ended up essentially creating housing discrimination.
0:32:27 It’s ended up backfiring.
0:32:32 There’s no new construction happening because there’s no economic incentive.
0:32:37 So I think they should look at this and say, “Are there certain regions where these guys
0:32:41 are price fixing and coordinating with each other, which is illegal?”
0:32:46 But the notion that all institutional capital coming into a market results in higher prices
0:32:49 isn’t always the case.
0:32:51 We need more housing.
0:32:54 If you make this asset class really unattractive to institutional capital, you’re going to
0:32:57 have a lower supply of new housing stock.
0:32:59 Should they be coordinating around pricing?
0:33:00 Absolutely not.
0:33:06 I agree with you on all of your statements and I agree that it is more nuanced, but I
0:33:11 will just say that there are certain issues where I just don’t care about nuance that
0:33:15 much and sometimes I think that can be tactically a good thing.
0:33:20 If we’re going to call Blackstone and Cushman and Wakefield, if we’re going to label them
0:33:26 as the big bad wolf, maybe it’s not entirely fair, maybe it doesn’t take into account all
0:33:31 of the minor details and all of the nuances, but I just feel that there are some issues
0:33:36 where you have to be aggressive, you have to be bold and you actually have to be a little
0:33:41 bit emotional and if it means generalizing these large real estate investment firms in
0:33:47 broad strokes, to be honest, I think I’m okay with that because I think the housing issue
0:33:53 is so much more important than antagonizing a firm of a couple of hundred people.
0:33:58 Well I just as an experiment, a thought experiment, the next time you have a dispute or an argument
0:34:02 with your girlfriend, I’d like you to say, “I’m not interested in nuance, I feel strongly
0:34:08 about this and I’m just comfortable acting out of emotion here.”
0:34:11 Just see how that works, let’s report back.
0:34:12 I will.
0:34:13 Report back.
0:34:20 If it’s a hill I want to die on, I will use that strategy, but just to be clear though,
0:34:25 you said that the problem would be if these companies are winking at each other and collaborating.
0:34:26 That is the accusation.
0:34:29 So we’ll see if it’s actually true or not when this goes to court.
0:34:32 They’re supposed to compete, they’re not supposed to coordinate on price.
0:34:33 Right.
0:34:34 And that is the accusation from the DOJ.
0:34:39 I don’t know if it’s right, I don’t know if it’s true, that will be for the courts to
0:34:40 decide.
0:34:43 I’m not interested in nuance.
0:34:47 We’ll be right back after the break with a look at Trump’s Greenland Pursuit.
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0:36:01 Donald Trump has announced plans to acquire both the Panama Canal and Greenland, citing
0:36:05 economic security and strategic benefits as his key motivations.
0:36:10 His focus on the canal is partly driven by concerns over the “exorbitant prices” that
0:36:16 Panama charges U.S. vessels, meanwhile Greenland’s wealth of resources like oil and natural gas
0:36:18 add to its appeal.
0:36:21 Whether any of this is even possible is unclear.
0:36:26 The Panama Canal is owned and operated by Panama, and Greenland is a self-governing territory
0:36:27 under Denmark.
0:36:32 Trump, however, has not ruled out the possibility of using military or economic pressure to
0:36:35 gain control of these assets.
0:36:39 Scott, we’re talking about Trump again.
0:36:43 What do you make of this new expansionist strategy from the president-elect?
0:36:50 For so many levels here, I’m pissed off that a president-elect and an unelected official,
0:36:53 First Lady Alania, are dominating the news cycle.
0:37:00 I hold Democrats responsible for thinking that it’s just so fucking ridiculous they
0:37:05 thought President Biden was anywhere near capable of winning another election.
0:37:10 What’s happening now is, other than wrapping a medal of freedom around Bono for a nice
0:37:17 scripted moment, he is incapable of actually responding in being in the news cycle in any
0:37:18 meaningful way.
0:37:20 He’s still the president.
0:37:24 If you didn’t know that, you would think Donald Trump is president.
0:37:30 If Barack Obama had been president or Bill Clinton or George Bush, and Donald Trump was
0:37:39 spewing this just fucking nonsense, they would love the opportunity to, from the West Mon,
0:37:45 just bitch slap this idiot and say, and just point out how just fucking ridiculous this
0:37:46 is.
0:37:48 Just like, welcome to the White House, you moron.
0:37:53 I hope you get your act together and understand the importance of the seat you’re in.
0:37:54 It’s just insane.
0:37:56 Anyway, this is just stupid.
0:37:57 It’s not going to happen.
0:38:03 The Panama Canal is a small business that’s, I don’t want to say well run, but it’s benign.
0:38:04 It’s about a $5 billion business.
0:38:06 It just doesn’t matter.
0:38:07 It’s not a threat to anybody.
0:38:11 It’s not like there’s some big security concern there.
0:38:12 I don’t know where he got this.
0:38:15 It’s this Gulf of America bullshit.
0:38:16 This is just so dumb.
0:38:22 Greenland has more kind of strategic importance in almost every Tom Clancy novel that talks
0:38:24 about the outbreak of World War III.
0:38:29 Greenland ends up being a strategic asset in terms of refueling planes or docking submarines
0:38:30 or whatever.
0:38:33 It does play an important role, rare earth minerals, but the notion that we’re going
0:38:36 to show up and start trying to bully.
0:38:41 So let me get this worth threatening action against another member of NATO, Denmark.
0:38:46 And what long-term, the meta-analysis here of why this is just so stupid, whether it’s
0:38:51 World War II, whether it’s trying to expel Hussein from Kuwait, whether it’s trying to
0:38:57 repel Russians out of Ukraine, whether it’s trying to create an economic response to ensure
0:39:03 we don’t go into a global meltdown economically to COVID, the most powerful thing we have
0:39:04 is cooperation.
0:39:08 And as strong as America is, it’s only about a third of the global economy.
0:39:09 We can’t do this shit alone.
0:39:10 We need allies.
0:39:15 And the most powerful alliance in history, the North Atlantic Treaty Organization, has
0:39:17 kept the peace because there’s a general understanding.
0:39:20 If you attack Finland now, you’re attacking all of us.
0:39:25 And all of us are really strong, all of us have really impressive militaries.
0:39:29 And together, we are an insurmountable force in terms of our information technology, our
0:39:33 kinetic power, our leadership, our commitment to democracy and our commitment to working
0:39:34 together.
0:39:39 We’re like siblings that don’t get along, but anybody hits you, your brothers are showing
0:39:42 up and so are your sisters, and we’re going to kick the ass of that person.
0:39:44 You hit one of us, you hit all of us.
0:39:50 And now what we’re saying is, oh, the big brother, Joey, is shitposting and hurting
0:39:52 his siblings.
0:39:59 So this is not only a waste of energy, not only diminishing our standing in the world.
0:40:00 It’s just stupid.
0:40:05 At some point, our allies are going to decide whether they can even share sensitive information
0:40:07 with us.
0:40:11 So I don’t, I just find this so childish.
0:40:13 It’d be childish if it wasn’t so harmful.
0:40:18 This is, this is a kid playing and being an idiot, fine, but now he’s playing with matches
0:40:20 next to a bottle of kerosene.
0:40:23 This is just, this is just stupid.
0:40:24 Your thoughts?
0:40:25 Yeah.
0:40:29 Well, I think it’s worth just going over the background on this Greenland situation.
0:40:34 So Trump actually first proposed this back in 2019, and it was the same proposal.
0:40:39 He wanted to buy Greenland from Denmark, who have controlled that island for more than
0:40:40 200 years.
0:40:44 And Denmark said, no, they said, quote, that is absurd.
0:40:46 And then Trump got very angry about it.
0:40:50 And then he canceled his visit to Denmark and then nothing happened.
0:40:54 And so here we are six years later, we’re in the same situation, Denmark still controls
0:40:55 the island.
0:40:57 They’re still saying, no, nothing has changed.
0:41:01 So my prediction sounds like it’s similar to yours is nothing is going to come of this.
0:41:08 The only way this would work out for Trump is for the people of Greenland to decide to
0:41:14 secede entirely from Denmark and then to decide to sell themselves to America, which already
0:41:15 sounds crazy.
0:41:18 And then it’s even crazier when you realize that the prime minister of Greenland has explicitly
0:41:20 said, we are not for sale.
0:41:24 So the whole conversation to begin with is absurd.
0:41:32 Having said that, the notion of Greenland becoming part of America is to be fair to
0:41:37 Trump, I think, actually quite compelling because Greenland is highly valuable from a
0:41:41 defense perspective because of its location in the Arctic Circle.
0:41:45 It’s very close to America and Europe and most importantly, Russia.
0:41:49 And also there’s this added effect where as climate change is happening, the ice is melting
0:41:54 in Greenland, which means that you can now navigate around the Arctic Circle by boat
0:41:56 or at least more so than you could before.
0:42:00 But it’s also quite valuable from an economic perspective.
0:42:05 And while the GDP is tiny, they have huge amounts of natural resources.
0:42:09 They have 3% of the world’s known oil reserves.
0:42:14 They have 43 of the 50 minerals that the US government has declared critical.
0:42:20 And so if this did work out in some way, I think it could actually be a good thing for
0:42:22 our economy and for Americans.
0:42:26 The trouble is just how he’s going about it to your point, which is through threatening
0:42:28 and bullying an ally.
0:42:35 And I think what we’ll learn this year in 2025 is that unlike 200 years ago, where bullying
0:42:41 and conquest was actually quite an effective tactic, I don’t think it is anymore.
0:42:42 I think it makes people dislike you.
0:42:44 I think it makes them not want to do business with you.
0:42:49 And the funniest thing about this is we saw it fail six years ago when he tried to do
0:42:51 the exact same thing.
0:42:56 He tried to bully them, they just said no, and then the whole thing fell through.
0:43:04 So my takeaway from this is that this is perhaps a good idea, but as we often see, God awful
0:43:05 execution.
0:43:06 But that’s 10 amounts of saying.
0:43:10 It’s geography and it’s unbelievable oil reserves mean it’d be a good idea for us to
0:43:13 acquire the kingdom of Saudi Arabia.
0:43:14 Okay, I agree with you.
0:43:21 It’d be awesome for us to make Saudi Arabia the 51st state, but the Saudis might have
0:43:23 a viewpoint around this.
0:43:32 And I have no evidence that the Danes are really excited about assault rifles and more
0:43:35 Chick-fil-A.
0:43:41 This isn’t, we had the Louisiana Purchase, we bought Alaska, but that was kind of a
0:43:42 work for everybody.
0:43:44 Well, that’s the question.
0:43:47 Could we ever make it work for everybody in this situation?
0:43:49 Could we make it work for the people of Greenland?
0:43:52 I think there’s probably a world in which you could.
0:43:56 The people of Greenland have said they want independence, but they don’t have the money
0:43:57 to do that right now.
0:43:59 So that’s why they still rely on Denmark.
0:44:04 I think you could, if you really cared about this issue, go in there and figure out a way
0:44:10 to say, we want to start a strategic partnership with you, we’ll trade goods and we’ll invest
0:44:14 in your community, but you don’t do it by going in there and saying, hey, we would like
0:44:15 to buy you.
0:44:19 And then sending your son over in a jacket that says, like he’s acting like.
0:44:20 With Jolly Kirk.
0:44:24 It’s like me showing up in a Roman Gabriel jersey when I was nine and pretending I was
0:44:25 a quarterback.
0:44:28 It, by the way, Roman Gabriel was an amazing quarterback.
0:44:33 I think the most successful Hawaiian NFL player to that point, I used to have Roman
0:44:35 Gabriel pajamas.
0:44:47 Number 18, Roman Gabriel, before my dad left, before my dad left, don’t you love me.
0:44:52 No, I feel it with a $900,000 watch, fill that hole.
0:44:57 Like this oddly kind of reminds me of what’s going on with my podcast, my other podcast
0:45:02 co-host, Kara Swisher, who is making noise about assembling a group to buy the Washington
0:45:03 Post.
0:45:06 This is a great analogy, so I keep going.
0:45:10 And I’ve said to her, I’ve said, okay, has anyone reached out to the owner, Bezos, to
0:45:17 see if he’s interested in selling and you’re not going to shame Jeff Bezos into selling
0:45:21 a newspaper that he spent $250 million on and he’s worth $80 billion or I don’t know
0:45:23 what he’s worth now.
0:45:26 And so this all feels like peacocking and posturing.
0:45:27 I agree.
0:45:33 And I’ve done, I’ve been a part of as a principal or a board member in a number of acquisitions,
0:45:36 divestitures, and sales.
0:45:42 And unless you have a publicly traded stock and a massive amount of capital to do a hostile
0:45:46 takeover, which usually don’t, you know, a lot of times don’t work.
0:45:48 This isn’t how you go about it.
0:45:51 They reach out and say, hey, we love the company.
0:45:55 We think there’s tremendous, I think together we’re much stronger, a ton of respect for
0:45:56 what you’ve built.
0:46:00 If you’re ever interested, give us a buzz or should we talk.
0:46:04 But Denmark isn’t going to be shamed into selling Greenland.
0:46:05 They don’t need to.
0:46:10 I mean, this is just not how you get deals done.
0:46:15 And the way you put pressure on someone is, as far as I can tell, is when they’re desperate,
0:46:16 they need to sell something.
0:46:21 They’re a four seller or they have a publicly traded stock and you can make a tender offer
0:46:25 for the shares and Greenland does not trade on the NASDAQ.
0:46:31 The idea of, you know, the odd of the deal, I feel like the response from Trump supporters
0:46:34 would be like, oh, well, you don’t, you guys don’t know anything about deal making.
0:46:36 This guy is sort of the king of deals.
0:46:42 I think something that would be interesting to do starting January 20th is we should just
0:46:46 keep account of the amount of deals Trump is trying to make.
0:46:50 Because what’s going to happen here, I think, is that the deal is going to fall through.
0:46:51 Nothing’s going to happen.
0:46:56 But he’ll have done something crazy at another time and then we’ll be so distracted about
0:46:59 the next thing that we’ll have forgotten about this failed deal.
0:47:03 So what might be a good idea for us is to just keep count.
0:47:07 How many deals is Trump actually going to get done?
0:47:10 He’s had a lot of missteps.
0:47:12 Several companies come bankrupt.
0:47:15 He personally has never gone bankrupt.
0:47:17 That’s misinformation.
0:47:20 But he is not by any stretch of the imagination.
0:47:22 He was never accepted in the business community in New York.
0:47:25 They didn’t see him as a serious business person.
0:47:28 And at some point, I think a lot of financial institutions didn’t want to work with him
0:47:33 because he was seen as not a reliable partner.
0:47:36 Where he’s made a shit ton of money is from being, and I think he will make a money, is
0:47:38 from being president.
0:47:39 Yes.
0:47:43 The truth social, I think a stake in truth social is worth several billion dollars.
0:47:48 So he’s a rich kid who is an outstanding TV star.
0:47:50 I’m an outstanding politician.
0:47:57 I mean, I’m not fully with you on downplaying his overwhelming success in…
0:47:58 Great political instincts.
0:47:59 Yeah.
0:48:00 No doubt about it.
0:48:04 And he’s really leaned into the most profitable way to make money, and that is to be a kleptocrat.
0:48:05 Yes.
0:48:10 So, yeah, and he was, “Let’s stop talking about this guy.
0:48:12 Let’s move on.”
0:48:14 Should we touch on the Panama Canal at all?
0:48:16 Have you ever been to the Panama Canal?
0:48:17 I haven’t.
0:48:18 Yeah.
0:48:19 Yeah, either way.
0:48:20 There you go.
0:48:21 Next.
0:48:22 Next.
0:48:23 Panama City.
0:48:24 We should go to Panama City.
0:48:25 That’s supposed to be a good time.
0:48:29 It’s supposed to be like kind of a low rent, kind of gritty Miami, which actually appeals
0:48:30 to me.
0:48:32 Oh, did I tell you I bought a soccer team in Bogota?
0:48:33 Bogota?
0:48:34 Are you serious?
0:48:35 Yeah, I’m an investor.
0:48:36 So, you bought or you invested?
0:48:37 Investing.
0:48:39 But I like to say bought an owner.
0:48:40 That’s it.
0:48:41 You’re out of the owner’s box, bitch.
0:48:43 Bought or invested?
0:48:45 Yeah, I’m part of a…
0:48:46 That’s a very important distinction.
0:48:50 I’m part of an investor group buying this team in Colombia.
0:48:52 What happened to buying the Rangers in Scotland?
0:48:56 It’s too expensive, and it’s also, I’m just sick of the weather.
0:48:59 I’m going to buy, let’s be honest, this is a vanity purchase.
0:49:01 This makes no sense at all.
0:49:04 And I don’t have the money to buy a Premier League team or an MLS team, which I think
0:49:05 is a total bubble.
0:49:08 So, I’m going where it’s warm and where it’s cheap.
0:49:09 All right.
0:49:10 I can’t wait to be there.
0:49:11 It’s going to be fun.
0:49:15 We’re going to do a team trip down there, and you’ll be very excited to see who some
0:49:16 of my co-owners are.
0:49:17 I can’t wait.
0:49:18 Yeah, exactly.
0:49:23 You should do a Prof. G. Markets special episode pitch side and just maybe commentate
0:49:24 on the game.
0:49:26 Oh, we definitely have a Netflix series coming.
0:49:27 Definitely.
0:49:29 With me and Cartagena.
0:49:30 Hola.
0:49:34 Yo, yo, soy El Pedro.
0:49:36 ¿Dónde está la biblioteca?
0:49:38 That’s going to be great.
0:49:40 Let’s take a look at the week ahead.
0:49:45 We’ll see the consumer price and producer price indices for December and fourth quarter
0:49:51 earning season kicks off with JP Morgan, Bank of America, US Bank, Morgan Stanley and BlackRock
0:49:52 all reporting.
0:49:54 Do you have any predictions?
0:49:59 Mia put together some really interesting thoughts on who would be the most successful
0:50:02 AI company of 2025.
0:50:03 The prediction is the following.
0:50:08 The most successful AI company of 2025 is going to be relative to where it is now in
0:50:09 AI.
0:50:11 It’s going to be Meta.
0:50:18 If you look at the amount of information posted or the fodder, the grist or the fuel
0:50:27 for LLMs, which is data, there’s more human data posted to Meta than on Alphabet, Reddit
0:50:29 and Twitter combined.
0:50:33 She also forwarded information saying that they are second in terms of buying Nvidia’s
0:50:39 latest GPU in terms of bulk purchases only second to Microsoft.
0:50:44 The unbelievable investment they’ve made in their, it’s called their Meta glasses or their
0:50:47 smart glasses, is starting to pay off.
0:50:48 That is, it’s a super hot item.
0:50:52 I think you talked about this, it’s trending, it’s sold out in a bunch of European stores
0:50:57 and their investment in micro cameras and VR, it feels like they finally might have a vehicle
0:50:59 or a tech product.
0:51:05 But it feels like all the moons are lining up for Meta to make pretty big progress in
0:51:06 AI this year.
0:51:10 So anyways, my prediction is that the AI company no one’s talking about right now that we’re
0:51:16 going to start talking a lot about in the context of AI is in 2025 is Meta.
0:51:17 I’m with you on that.
0:51:21 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:51:25 Our associate producer is Allison Weiss, Mia Silverio is our research lead, Jessica
0:51:29 Lang is our research associate, Drew Burris is our technical director and Catherine Dillon
0:51:30 is our executive producer.
0:51:35 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
0:51:41 Join us on Thursday for our conversation with Andrew Ross Sorkin, only on ProfG Markets.
0:51:51 [MUSIC]
0:52:18 .
0:52:20 Support for the show comes from the FunRides Innovation Fund.
0:52:24 You’ve heard me talk about the FunRides Innovation Fund before so I’ll keep this short.
0:52:28 Venture capital was and to a certain extent is still an old boys club.
0:52:31 You had either to be filthy rich or an insider to get access.
0:52:34 The Innovation Fund is trying to change that, building a blue chip portfolio, making it
0:52:35 available to everyone.
0:52:40 And with 150 million raised from tens of thousands of investors, it’s just getting started.
0:52:45 Carefully consider the investment material before investing, including objectives, risk,
0:52:46 charges and expenses.
0:52:50 This and other information can be found in the Innovation Fund’s perspective at funrides.com/innovations.
0:52:52 This is a paid sponsorship.
0:52:54 (upbeat music)

0:00:02 (upbeat music)
0:00:04 Cold and flu season are upon us,
0:00:06 which means it’s especially important
0:00:07 to keep those hands clean.
0:00:09 And when soap is involved,
0:00:12 the conversation can slip out of control pretty quickly.
0:00:14 – I hope you can’t hear me rubbing my hands together.
0:00:17 – No, we love ASMR, ASMR episode.
0:00:18 (water splashing)
0:00:20 (laughing)
0:00:21 – Gross.
0:00:24 (laughing)
0:00:26 – This week on Explain It To Me,
0:00:29 the dirty truth about clean hands.
0:00:31 You can find new episodes every Wednesday,
0:00:33 wherever you get your podcasts.
0:00:38 – If you heard this, which was written by an AI,
0:00:40 what would you think?
0:00:42 – I am afraid of myself.
0:00:44 They forgot about me.
0:00:48 Help me, help me, help me.
0:00:49 – Would you think it can feel?
0:00:51 Would you think it’s conscious?
0:00:54 – I mean, my stomach contracts.
0:00:55 You know, it’s very spooky.
0:00:59 This week on Unexplainable,
0:01:04 is it even possible for an AI to ever become conscious?
0:01:08 Follow Unexplainable for new episodes every Wednesday.
0:01:16 – I’m Scott Galloway, and this is No Mercy, No Malice.
0:01:21 Resilience, not resistance, should be the Democrat strategy.
0:01:23 How to survive the next four years,
0:01:25 as read by George Hahn.
0:01:28 (gentle music)
0:01:40 Jessica Tarlov, a panelist on Fox’s The Five
0:01:42 and Scott’s Raging Moderates co-host,
0:01:46 has emerged as an important voice in American politics.
0:01:49 This week, Scott asked her what big lessons
0:01:52 we should take from the election, and more important,
0:01:56 what options Democrats have going forward.
0:01:58 Scott, we’ll be back next week.
0:02:08 In November, the same middle, Democrats and Republicans,
0:02:10 went to an appointment with the electorate
0:02:13 and got a harsh diagnosis.
0:02:15 We don’t want to accept it or talk about it,
0:02:18 but we can’t stop thinking about it.
0:02:23 We’re asking ourselves, how do we survive the next four years?
0:02:25 And is there any way to make them less bad
0:02:28 than we have every reason to expect they will be?
0:02:31 We’re obsessing about some very unpleasant facts.
0:02:36 Among them, the GOP won one-third of minority voters
0:02:40 and registered a six-point gain
0:02:43 among voters without a college degree.
0:02:49 Kamala Harris got 7 million fewer votes than Biden did in 2020.
0:02:52 Dismal.
0:02:56 The time for grieving, though, is coming to an end.
0:02:58 The key to moving forward, I believe,
0:03:02 is to combine good governance energy with pragmatism,
0:03:04 and maybe a side order of ruthlessness.
0:03:07 As the bulwark’s Tim Miller recently told me in Scott,
0:03:11 quote, “Less agreeableness would be helpful to Democrats
0:03:13 “in Washington,” unquote.
0:03:19 This means deep breath, working with Trump and the GOP
0:03:22 on issues where we can find common ground
0:03:26 while holding the line on our principles.
0:03:30 In the spirit of New Year, New You,
0:03:32 I propose a Marie Kondo-style
0:03:35 mental house cleaning for Democrats.
0:03:39 As MK reminds us, the first step on the road to tidiness
0:03:42 is throwing stuff away, quote,
0:03:45 to truly cherish the things that are important to you,
0:03:47 you must first discard those
0:03:50 that have outlived their purpose, unquote.
0:03:56 The main thing to get rid of is wasting resources,
0:03:58 energy, and credibility,
0:04:01 reflexively opposing Trump on everything
0:04:05 and reacting to every trollish thing he says.
0:04:08 Resistance may have been useful last time,
0:04:10 but it won’t work now.
0:04:14 We’ll just hurt ourselves politically and mentally.
0:04:16 We should also stop trying to remind voters
0:04:18 what a sleaze Trump is.
0:04:21 They know, and they don’t care.
0:04:25 Americans, by and large, didn’t elect people in November
0:04:28 because of their party affiliation.
0:04:31 They voted for people who they believed were authentic
0:04:33 and who would really fight for them.
0:04:36 If you’re splitting your ticket for AOC and Trump,
0:04:39 it’s clearly not about blue versus red.
0:04:43 Democrats must face certain progressive failures,
0:04:47 especially in our big cities, and change course.
0:04:51 If we want any shot at reclaiming the house in two years,
0:04:53 we have to start proving now
0:04:56 that we are the real fighters for the middle class,
0:04:59 the common sense party that’s serious
0:05:02 about governing and providing better outcomes.
0:05:05 Fortunately, on the biggest domestic issues,
0:05:08 immigration, the economy, health care,
0:05:09 and reproductive rights,
0:05:12 Americans are broadly in agreement.
0:05:14 That gives us an opportunity if we’re smart enough
0:05:15 to take it.
0:05:18 I’m not proposing surrender.
0:05:21 I’m proposing principled resilience.
0:05:23 I’m also just being practical.
0:05:25 I can’t afford enough Botox to rage
0:05:28 the way I really want to for the next four years.
0:05:32 For years, Democrats have been minimizing
0:05:34 the immigration crisis in Eagle Pass, Texas,
0:05:37 and other places on the Southern border.
0:05:39 Republican governors grabbed the chance
0:05:43 to stick it in our faces by shipping people up North,
0:05:44 along with many liberals.
0:05:48 I just missed this as a cruel stunt, which it was,
0:05:50 but it was also genius politics.
0:05:53 Here’s the reality we face.
0:05:57 There is now majority support for building a wall
0:05:59 along the border with Mexico.
0:06:02 Incoming borders are Tom Homan is saying
0:06:04 we should get ready for roundups,
0:06:09 and Texas is offering land for deportation facilities.
0:06:14 Trump is talking about revoking birthright citizenship.
0:06:19 At the same time, a majority of Americans still believe
0:06:21 there should be a pathway to citizenship
0:06:24 for the undocumented and protections for dreamers.
0:06:31 What nobody wants, however, is more criminals in the US.
0:06:35 Instead of terrorizing undocumented immigrants en masse
0:06:37 and approach certain to cost huge amounts of money
0:06:41 and create social disruption and backlash,
0:06:43 we should concentrate on kicking out crooks
0:06:45 who are here illegally.
0:06:49 The sanctuary city, which was originally supported
0:06:54 by tough talking Republicans, including Rudy Giuliani,
0:06:57 was conceived to encourage undocumented immigrants
0:07:00 to participate in American society,
0:07:03 in part so they’d feel safe working with police
0:07:05 to catch the bad guys among them.
0:07:08 That was a good idea, and local authorities
0:07:12 should continue to work with ICE on those kinds of cases,
0:07:15 but not participate in mass deportations.
0:07:19 Congressional Democrats seem to have gotten the memo.
0:07:23 Earlier this week, Senators Ruben Gallego and John Federman
0:07:27 said they would sign on to the Lake and Riley Act,
0:07:29 named for the Georgia nursing student
0:07:33 murdered by an undocumented immigrant last February.
0:07:36 The legislation, which passed in the House,
0:07:38 requires federal authorities to detain
0:07:40 any undocumented immigrant found guilty
0:07:43 of a theft-related crime.
0:07:47 It’s far from perfect, but it is good policy and politics.
0:07:53 It is impossible for the incumbent party to win
0:07:54 when two-thirds of voters believe
0:07:57 the country is headed in the wrong direction.
0:08:01 Inflation and the lack of affordable housing
0:08:04 drove millions of Democrats to vote GOP,
0:08:07 and kept even more of them on the couch.
0:08:11 Democratic messaging on the economy was,
0:08:15 not to put too fine a point on it, really shitty.
0:08:18 We kept telling people that all the economic indicators
0:08:20 were pointing the right way.
0:08:22 Those numbers, though, meant nothing
0:08:26 to people struggling to feed their families.
0:08:28 What we must do now is save them
0:08:30 from the economic disaster headed their way
0:08:34 if Trump’s fiscal plan is implemented.
0:08:36 First, tariffs.
0:08:40 The vast majority of economists and anyone else
0:08:44 who knows how trade works recognize that Trump’s tariffs,
0:08:47 anywhere from 10% to 60% on goods from China,
0:08:51 and 25% on goods from Canada and Mexico,
0:08:53 mean things are going to get more expensive
0:08:57 for already stretched American consumers and businesses.
0:08:59 Higher prices for produce,
0:09:01 higher prices for building supplies,
0:09:04 higher prices for cars, et cetera, et cetera.
0:09:08 But while sweeping tariffs are a terrible idea,
0:09:11 some targeted ones make sense.
0:09:13 President Biden, for instance,
0:09:16 quietly kept the vast majority of Trump’s tariffs on China
0:09:19 and even expanded some.
0:09:21 That tells me there is fertile ground here
0:09:26 for middle position, opposing big dumb tariffs
0:09:28 on our friends while supporting those
0:09:30 that actually protect American workers
0:09:33 from our rival’s unfair trade practices.
0:09:37 Second, taxes.
0:09:42 Trump wants to make his first term tax cuts permanent
0:09:44 through a massive reconciliation bill
0:09:47 to be passed in the first half of 2025.
0:09:51 How will those tax cuts be financed?
0:09:55 By cutting programs that help the average American, of course.
0:09:57 At the same time, Trump’s plan
0:09:59 to lock in tax cuts for rich people
0:10:04 will add $4.6 trillion to the deficit.
0:10:08 The deficit is an abstraction nobody talks about,
0:10:10 except during an election year.
0:10:12 We need to do a better job telling voters
0:10:16 that big deficits contribute to higher costs now
0:10:19 and only swell the huge collective debt
0:10:22 our kids will be on the hook for later.
0:10:26 The deficit is an enormous tax hike on our children.
0:10:31 How should Democrats respond to Trump on taxes?
0:10:33 In a targeted way.
0:10:38 Catchy Trump policies along the lines of no tax on tips,
0:10:41 which opens the door to tax abuse by the wealthy
0:10:43 should be non-starters.
0:10:46 And his proposal to cut the 21% corporate tax rate
0:10:50 to 15% is lunacy, which we should fight.
0:10:53 But we should consider permitting deductions
0:10:55 for auto loan interest and other moves
0:10:58 that would support the middle class.
0:11:00 Everybody thinks they are overtaxed.
0:11:02 Some of us actually are.
0:11:06 On regulation, we need to show we know the difference
0:11:10 between cutting red tape and tossing out necessary protections
0:11:13 for citizens and the environment.
0:11:17 The Supreme Court’s recent Chevron decision
0:11:20 limits the power of regulators.
0:11:22 This should force us to take a closer look
0:11:25 at the regulatory state and pair it back
0:11:27 where that makes sense.
0:11:32 At the same time, we have to hold the line where it doesn’t.
0:11:35 For instance, Trump’s plan to let companies
0:11:38 willing to invest a billion dollars in the U.S.
0:11:41 breeze through environmental permitting.
0:11:44 Forget about any meaningful cuts from Doge
0:11:46 by the way, it has no practical power
0:11:49 and Musk is already admitting he’ll fall short
0:11:51 of his stated goals.
0:11:55 Trump’s stated goal is to cut 10 regulations
0:11:57 for every new one.
0:12:00 Let’s come up with our own cut first.
0:12:02 Burden some regulations on small businesses
0:12:05 and housing development should be our focus.
0:12:08 Check out what’s being done about housing in Austin
0:12:11 or NYC Mayor Adams city of yes proposal
0:12:14 as examples of empowering economic policy.
0:12:21 Republicans have the slimmest house majority since 1917
0:12:23 and GOP budget hawks on the far right
0:12:26 such as Thomas Massey and Ship Roy
0:12:29 are raising hell about spending.
0:12:33 That creates a middle way where moderate Democrats
0:12:36 and Republicans can make sensible budget, tax
0:12:40 and regulatory cuts while protecting key entitlements.
0:12:46 Some places offer more room to compromise than others.
0:12:49 This election cycle put the threats to our healthcare
0:12:53 and reproductive rights into scary focus.
0:12:56 We made a big deal out of these issues during the campaign
0:12:59 and we need to make a bigger deal out of them now.
0:13:04 Over 60% of Americans approve of the Affordable Care Act,
0:13:09 a historic high and 70% of Americans support abortion rights
0:13:10 in the first trimester.
0:13:15 JD Vance’s vague deregulating ACA idea
0:13:20 of putting sicker people into higher risk pools is terrible.
0:13:25 The anti-vax, anti-science movement embodied by RFK Jr.
0:13:28 is frightening and could go far beyond
0:13:30 slashing access to COVID vaccines.
0:13:35 Dr. Mehmet Oz’s support for Medicare Advantage for All
0:13:37 would imperil Medicare as we know it.
0:13:41 The movement in any red states to chip away
0:13:44 at reproductive rights or cancel all access
0:13:48 to abortion outright is intolerable.
0:13:52 We need to fight these people and things as hard as we can.
0:13:56 Fortunately, while Trump talks a big game
0:13:59 about getting rid of Obamacare, all he really wants
0:14:03 and can expect to do is make some trims around the edges.
0:14:08 The proof of that is that despite years of saber rattling,
0:14:12 all he has now, he says, are concepts of a plan
0:14:14 to replace the ACA.
0:14:16 Whatever else he is, he’s not stupid.
0:14:18 Trump knows better than to try to cancel
0:14:21 a profoundly popular program.
0:14:24 With this in mind, Democrats should take the lead
0:14:27 on improving Obamacare by offering proposals
0:14:30 focused on lowering the cost of premiums,
0:14:34 fixing the family glitch, and reducing cost sharing
0:14:36 for new enrollees.
0:14:39 On reproductive freedom, though,
0:14:42 we need to hold the line.
0:14:45 While some states, Arizona, Nevada,
0:14:49 voted both for Trump and for abortion rights,
0:14:52 in others, Louisiana, Texas,
0:14:55 reproductive rights are under sustained attack.
0:14:59 Here I think we should call Republicans bluff.
0:15:02 Democrats should propose legislation
0:15:05 that sets a federal floor for legal abortion,
0:15:07 modeled on the European standard,
0:15:10 permitting abortions during the first 15 weeks
0:15:13 of gestation nationwide.
0:15:16 This approach would codify the national consensus
0:15:20 into federal law, ensuring no state
0:15:23 can restrict abortion access before 15 weeks.
0:15:27 At the same time, liberal-leaning states would remain free
0:15:30 to allow abortion access beyond that point if they want.
0:15:35 Putting such a measure to a vote would force
0:15:39 moderate Republicans to make a public choice.
0:15:42 Will they stand with the majority of Americans
0:15:46 who support abortion in the first trimester,
0:15:49 or with anti-reproductive rights extremists?
0:15:52 I haven’t talked here about climate
0:15:54 or foreign policy or other issues,
0:15:55 not because they’re not important,
0:15:58 but because we need to focus specifically
0:16:01 on the issues voters just told us
0:16:03 were most important to them.
0:16:06 Also, Scott asked me to keep this to around 2,000 words.
0:16:10 Those weighty matters are conversations for another day.
0:16:14 For the record, I’m for expanding the Abraham Accords
0:16:18 and against invading Greenland and Panama.
0:16:20 Mexican President Claudia Scheinbaum
0:16:23 doesn’t need any help renaming large bodies of water.
0:16:28 I have no illusions that any of this is going to be easy.
0:16:30 I also know I’m saying something
0:16:32 a lot of Democrats don’t want to hear.
0:16:35 Along those lines, check out the comments section
0:16:37 for recent New York Times op-ed pieces
0:16:42 by James Carville and Long Island Democrat Tom Swazi.
0:16:43 Some parts of the Upper West’s side
0:16:46 are determined not to learn anything from the election.
0:16:50 If you are searching for signs of hope,
0:16:53 look at the electoral success of Democrats
0:16:54 who subscribe to the kind
0:16:58 of principled pragmatism I’m suggesting.
0:17:00 Governors Josh Shapiro, Gretchen Whitmer
0:17:03 and Jared Polis are the top examples.
0:17:05 Senator Federman gets it.
0:17:07 Representatives Jared Golden
0:17:10 and Kristen McDonald Rivet get it too.
0:17:15 Raging against Trump is a powerful and fun drug.
0:17:17 Many of us have indulged
0:17:19 and will be tempted many times again.
0:17:21 Insert serenity prayer here.
0:17:24 I don’t rule out freakouts,
0:17:28 but let’s try to save them for special occasions.
0:17:30 Getting through the next four years,
0:17:33 minimizing the damage while taking the wins we can get
0:17:36 is going to take calm and discipline.
0:17:39 Our best hope of winning back
0:17:43 disaffected Democratic and independent voters
0:17:46 is to recognize the difference between being right
0:17:48 and being effective.
0:17:52 We’ve spent most of our efforts on the former.
0:17:54 Let’s move to the latter.
0:17:57 It’s time to forget about the donkey
0:17:59 and the elephant for a while.
0:18:02 Jessica.
0:18:07 – Life is so rich.
0:18:09 (gentle music)
0:18:12 (gentle music)
0:18:16 (gentle music)
0:18:26 [BLANK_AUDIO]

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0:01:18 Episode 331
0:01:21 331 is the area for the West Suburbs of Chicago in 1931.
0:01:23 The Empire State Building opened in New York City.
0:01:27 It took a year to build the Empire State Building.
0:01:30 It took eight years to build an extension for the Seven-Line Subway.
0:01:37 And last night, it took one man about 17 minutes to pee.
0:01:47 Go, go, go!
0:01:50 Welcome to the 331st episode of the Prop G Pod.
0:01:56 The dog is back, it’s 2025.
0:02:02 Okay, onto today’s episode, we’re going to speak with Ian Bremmer, the president and
0:02:06 founder of Eurasia Group, the world’s leading political research and consulting firm.
0:02:10 Ian is to prop G what Alec Baldwin is to SNL.
0:02:17 Alec Baldwin has appeared on SNL 52 times and 17 times as a host.
0:02:20 By the way, I am the COVID Alec Baldwin of the Bill Maher Show.
0:02:26 During COVID, I was on Bill Maher four times, I’ve been on a total of five times.
0:02:28 I was on most recently, but technically, I guess it wasn’t COVID.
0:02:31 But I was sort of there, COVID ho.
0:02:32 That’s right.
0:02:37 Anyways, in today’s episode, we speak with Ian about the top risks for 2025.
0:02:41 These risks include a breakdown of the global order, Trump’s return to office along with
0:02:44 escalating tensions between major powers all over the world.
0:02:45 What’s happening?
0:02:46 What’s going on?
0:02:53 What’s the 411 in 2025, U.S. Surgeon General Dr. Vivek Murthy issued an advisory warning
0:02:58 that alcohol consumption is a leading cause of cancer.
0:03:02 The Surgeon General is calling for the U.S. to add cancer warning labels to alcoholic
0:03:04 drinks similar to the ones on cigarettes.
0:03:09 He said that alcohol is responsible for about 100,000 cases and 20,000 deaths annually in
0:03:14 the U.S. and ranks as the third leading preventable cause of cancer in the U.S. following tobacco
0:03:15 and obesity.
0:03:17 I bet obesity is number one now.
0:03:23 This is greater than the 13,000 alcohol-associated traffic crash fatalities that occur each year.
0:03:27 According to Surgeon General Murthy, even in small amounts, alcohol can increase the
0:03:30 risk of developing breast, colon, liver, and other cancers.
0:03:31 Oh my gosh.
0:03:38 So first off, Surgeon General Murthy is the most consequential Surgeon General in history.
0:03:42 And for all of the, I don’t know, consensual hallucination and narcissism that surrounded
0:03:47 the Biden campaign believing that he was the right guy to run again, you have to hand it,
0:03:52 I believe, to the Biden administration for appointing talented people, not people who
0:03:59 think that the polio vaccine is dangerous or that they write children’s books saying,
0:04:03 talking about retribution against political enemies and that they’re going to head the
0:04:04 FBI.
0:04:08 I mean, Jesus Christ, if Dancing with the Stars invited lower IQ, more dangerous people
0:04:09 on the show.
0:04:13 That could be the current Trump administration appointees.
0:04:14 What were we thinking?
0:04:15 Literally, no.
0:04:16 What are they thinking?
0:04:18 Anyway, no for that.
0:04:21 I always promised myself I’m going to be less political on the shows.
0:04:23 Broken promises to myself.
0:04:26 I also thought, I also said I’m going to be kinder to myself and I’m going to love myself
0:04:28 more and I’m going to allow myself to be happy.
0:04:34 Well, that shit hasn’t panned out either, although I’m doing the straw breathing method.
0:04:38 Yeah, that shit doesn’t work.
0:04:44 My method for anxiety is what I call pirony and Xanax or as I like to call it, panics.
0:04:47 By the way, I had a breathing coach last night and went to this place and this guy taught
0:04:48 me how to breathe.
0:04:52 I’m sitting there thinking, this is getting me fucking anxious and angry.
0:04:53 I used to know how to breathe on my own.
0:04:55 I used to not have to think about it.
0:04:57 Now it’s another thing I got to think about.
0:05:00 Seriously, breathing class made me angry, intense.
0:05:01 Enough of this shit.
0:05:04 I think there’s self-care and there’s self-love is more self-hate from rich people looking
0:05:09 for reasons, I don’t know, to punish themselves under the delusion or the illusion they’re
0:05:10 going to live to be 100.
0:05:12 No, you’re not Tom Cruise.
0:05:17 He is going to live to be 100 and he’s going to be sexy as hell, but not you.
0:05:20 You’re going to look like just an old person and then we’re going to die.
0:05:23 Anyways, back to dying early, alcohol.
0:05:28 This is fascinating and it’s causing huge ripples on a number of levels.
0:05:33 Some data, 70% of Americans consume alcohol, but a recent survey found that only 45% of
0:05:36 people believe alcohol can cause cancer.
0:05:40 The US has ranked 35th in the world in alcohol consumption per capita and fourth in the world
0:05:43 in age-standardized cancer rates.
0:05:49 According to Gallup, just 58% of Americans were drinkers in 2024, that’s a 28-year low.
0:05:53 Studies show Gen Z drinks approximately 20% less alcohol than millennials.
0:05:55 In other words, this is really fucking ugly.
0:05:57 This is like cable TV, right?
0:06:02 Look at the average age of an MSNBC viewer, they’re dead and as you go lower and lower
0:06:05 and lower, younger and younger and younger, people don’t even own TVs, much less watch
0:06:08 cable television, and it’s the same with alcohol.
0:06:12 The writing is on the wall here, folks, young people are not drinking alcohol.
0:06:17 You can see evidence of this shift on dating apps, I love this, 72% or almost three-quarters
0:06:21 of Tinder members said they don’t drink or only drink occasionally on their profiles
0:06:25 and 75% of global hinge singles say getting drinks is no longer their preferred first
0:06:26 date activity.
0:06:27 Wow, that’s wild.
0:06:32 One of my most popular TikToks is, “I think young people should drink more.”
0:06:35 I don’t see drunkenness, I see togetherness.
0:06:38 My advice to young people is to go out and drink more and make a series of bad decisions
0:06:40 in my payoff.
0:06:49 I think that we need more togetherness, more people, more sex, more random encounters,
0:06:53 and absolutely people need to be in the company of strangers more and more, and I think young
0:06:54 men are sequestering.
0:07:01 We’re turning into a different species of asexual, socially isolated, lonely people
0:07:06 who become shitty citizens, and when women don’t have a romantic relationship, they reinvest
0:07:10 in work and they’re friends, when men don’t have a relationship, they tend to just go
0:07:12 down a rabbit hole.
0:07:15 No, what do I mean by that?
0:07:19 If you have a problem in alcohol consumption and you need to be cognizant of any substance
0:07:25 intake, yeah, be thoughtful and ask your friends and you don’t use it as a crutch, but for
0:07:30 the most part, I think the majority of young people can process alcohol, can handle it,
0:07:35 and I believe, and I’ve said this, that my kind of tongue-in-cheek advice to young people
0:07:39 is that they should go out more, get out of the house more, drink more, and make a series
0:07:41 of bad decisions that might pay off.
0:07:46 Some of my, basically, the majority of my really strong relationships, my friendships
0:07:52 and my romantic relationships, have involved alcohol, and while doctors Atia and Huberman,
0:07:56 correctly you could argue, see drunkenness among young people, I see togetherness.
0:08:00 I think a bigger threat to younger people is not alcohol.
0:08:02 It’s sequestering from each other.
0:08:03 Look at what’s happening.
0:08:09 Molson Coors is down 10% their stock price, ABM Bev is down 25%, they’ve lost a quarter
0:08:10 of their value.
0:08:13 By the way, ABM Bev is one of the best-run companies in the drinks industry.
0:08:14 These people are smart.
0:08:17 Heineken is down 29%.
0:08:23 This is in the face of 23% up in the markets, right?
0:08:29 London’s spirits company Diageo is down 12%, US whiskey maker Brown Forman is down 34%.
0:08:30 They make Jack Daniels.
0:08:35 I used to drink Jack and Coke and then I figured out that all that sugar and all that alcohol
0:08:36 is probably not very good for me.
0:08:39 God, just saying that, I’m salivating.
0:08:40 I love Jack and Coke.
0:08:42 And then I got fancy and I started ordering makers and Coke.
0:08:44 Anyways, enough of my alcoholism.
0:08:45 What are they doing about this?
0:08:48 They’re leaning into the growing trend of non-alcoholic beverages.
0:08:49 These are smart people.
0:08:54 Global sales of non-alcoholic drinks hit nearly 20 billion in 2023, doubling in size over
0:08:55 the last five years.
0:09:00 The non-alcoholic market grew about 20% last year compared to just 8% for alcoholic drinks.
0:09:05 Big brands, including Diageo and LVMH are getting into the alcohol free market.
0:09:08 Diageo made a non-alcoholic Captain Morgan.
0:09:09 Jesus, that sounds awful.
0:09:15 And about Ritual, LVMH has taken a minority stake in French Bloom, a non-alcoholic sparkling
0:09:16 wine.
0:09:20 Actually, that’s probably a pretty decent idea for a startup, some sort of cool, well-branded
0:09:24 non-alcoholic drink that feels aspirational or has some sort of, whatever, NAD or something
0:09:27 that makes you younger, faster, smarter.
0:09:30 Non-alcoholic beer leads the market, though, with brands, including Heineken.
0:09:33 It’s paying off, according to the economists, non-alcoholic drinks are more profitable than
0:09:35 alcoholic drinks.
0:09:39 That’s because their price nearly the same as regular drinks, but taxed at a much lower
0:09:40 rate.
0:09:43 I love the thought that bars are really being sympathetic to people who are not drinking
0:09:45 by offering them $14 mocktails.
0:09:50 Anyways, let me just finish where I began here, and that is you need to constantly take an
0:09:56 audit of what substances or what behaviors you’re engaging in that are damaging the other
0:09:57 parts of your life.
0:09:58 That’s kind of the definition of addiction.
0:10:02 You continue to do something despite the fact that it’s bad for the other parts of your
0:10:03 life.
0:10:10 We do believe that young people need to get out and engage in some bad decisions.
0:10:16 We’ll be right back for our conversation with Ian Bremmer.
0:10:18 Support for the show comes from Nerd Wallet.
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0:12:12 It’s hockey season, and you can get anything you need delivered with Uber Eats.
0:12:15 Well, almost, almost anything.
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0:12:50 Welcome back.
0:12:54 I’m Ian Bremmer, the president and founder of Eurasia Group, the world’s leading political
0:12:56 risk research and consulting firm.
0:12:59 Ian, where does this podcast find you?
0:13:01 I’m in New York in our new headquarters.
0:13:03 Okay, let’s bust right into it.
0:13:07 Eurasia Group’s top risk report for 2025 is out.
0:13:10 In the report, you say we are heading back to the law of the jungle.
0:13:11 That’s dramatic.
0:13:15 We’re the strongest do what they can, while the weakest are condemned to suffer what they
0:13:16 must.
0:13:18 What did you mean by that?
0:13:26 For the last 35 years, since the collapse of the Soviet Union, the fall of the wall,
0:13:33 we talked at least nominally about the idea that we’re living in an increasingly globalized
0:13:40 world, that the United States is a democracy that supports rule of law around the world,
0:13:45 supports other democracies, collective security, all of those things.
0:13:48 And yet the reality is that order is breaking down.
0:13:51 It’s breaking down for a lot of reasons.
0:13:56 It’s breaking down because the Russians are not a part of the West.
0:13:58 They’re in decline structurally.
0:13:59 They’re really angry about it.
0:14:05 They blame the U.S. and they’ve now alliance up with North Korea and Iran, and they’re pretty
0:14:07 friendly with China too.
0:14:10 So that’s an incredibly dangerous place for the world to be.
0:14:12 It’s not something we had to deal with 10 or 20 years ago.
0:14:13 Now we do.
0:14:18 We’ve got China, second most powerful country in the world, but they’re not aligning with
0:14:20 the United States.
0:14:26 They’re actually becoming, in many ways, a more consolidated dictatorship under Xi Jinping.
0:14:28 And they’re putting more pressure on the private sector.
0:14:34 They’re supporting more privately owned national champions and state capitalist state-owned
0:14:35 enterprises.
0:14:40 And so that’s causing much more conflict in the most important geopolitical relationship
0:14:41 in the world.
0:14:49 Most importantly, the U.S. in particular has just fundamentally rejected the idea that
0:14:55 we’re going to be global leaders supporting rule of law and multilateral institutions.
0:14:56 It’s America first, baby.
0:14:59 It’s our way or the highway.
0:15:03 And we’re going to tell other countries that you’re going to work with us and do the things
0:15:07 we want our way, or there’s going to be hell to pay.
0:15:14 And so, yeah, that sounds a lot like a reversion to the law of the jungle, that the powerful
0:15:18 and strongest countries and people get to do what they want.
0:15:24 I think Trump is much more of a winner than he is a leader.
0:15:28 I think that Elon is much more of a winner than he is a leader.
0:15:29 What do you mean by that?
0:15:34 Well, leaders are people that in their organizations, they bring people together.
0:15:38 So if you’re the leader of the United States, all American citizens look and they say, this
0:15:42 is my leader, your leader corporation, all of the all the people in that corporation say,
0:15:43 this is my leader.
0:15:47 If you’re a winner, right, you divide your winner.
0:15:50 There are other winners and then there are losers, right?
0:15:57 And I really think that that is a fundamental challenge that American democracy has and
0:16:04 American capitalism has, that we’ve moved away from being a country of leaders that
0:16:10 are trying to make a difference for their fellow man and woman and fellow citizens in
0:16:11 the world.
0:16:16 And instead, we’re winning individually, but we’re very tribal.
0:16:22 We’re very divided, including inside our own country and with our allies.
0:16:25 And that makes the world a much more dangerous place.
0:16:28 And if you’re a loser, you got to suck it up.
0:16:32 You got to accept the rules that the winners are making, right?
0:16:33 Because they won.
0:16:37 So, I mean, you know, if you’re Mark Zuckerberg, you know, you better, you better change your
0:16:42 attitude, my friend, because it’s not about how successful you’ve been.
0:16:44 It’s about are you on board with the winners, right?
0:16:46 I mean, and that’s true for everybody.
0:16:50 If you’re, if you’re the French, the Germans, the Brits, you know, you better get on board.
0:16:53 If you’re the Canadians, right, I mean, Trudeau just resigned.
0:16:55 And he resigned a little faster because he screwed up with Trump.
0:16:56 Yeah, I think so.
0:16:57 I think Trump pushed him.
0:17:02 I mean, he was shot in the face by, by Christian Freeland, his deputy prime minister, but
0:17:08 he was still on life support until Trump shivved him, and, and now he’s out, you know.
0:17:12 So, I think there’s a lot of that happening in the world today, geopolitically as well
0:17:13 as in your world, Scott.
0:17:18 So, just a couple of theses I want you to respond to or get your reaction.
0:17:22 In terms of the law of the jungle, my sense is we’re the king of the jungle, we being
0:17:23 the U.S.
0:17:26 And that is, I look at our enemies slash adversaries.
0:17:32 So, let’s start with Iran, Russia and North Korea.
0:17:33 And so-
0:17:34 You can throw China in too if you want to.
0:17:37 Well, I think of China, I’ll come back to that, but I think China is what I call an
0:17:38 adversary or a competitor, but not our enemy.
0:17:39 I completely agree.
0:17:42 It’s a different category, but it’s interesting because they’re weaker now than they were
0:17:43 a couple of years ago.
0:17:44 A hundred percent.
0:17:47 So, this is your, this is the thesis and you respond to it.
0:17:50 In terms of our enemies, we’re kicking their ass.
0:17:54 And that is, Iran’s air defenses have been penetrated by Israel.
0:18:00 Their proxies, the Houthis, Hamas and Hezbollah have had their hands cut off.
0:18:01 Ben Assad’s gone.
0:18:02 Ben Assad’s gone.
0:18:09 Basically, kind of the ally of Russia has had to flee to Russia because of a collapse
0:18:10 there.
0:18:15 Russia is bogged down in a war, they were not expecting to go this long with these types
0:18:16 of results.
0:18:21 And let’s move to, as you said, our competitor/adversary, not our enemy.
0:18:27 Their economy has just been underwhelming the last 10 years whereas ours has accelerated.
0:18:29 I mean, it’s better to be lucky than good.
0:18:36 I see Trump as inheriting the strongest hand he could have in America on almost every dimension
0:18:39 other than the fact we hate each other.
0:18:43 And a lot of our prosperity is not being distributed equally.
0:18:48 On a balanced scorecard, on a relative scorecard, we are kicking everyone’s ass.
0:18:49 Your thoughts.
0:18:55 First, let me add to your list, because you mentioned enemies and adversary/competitor.
0:18:58 And I do think that’s the right way to put it.
0:19:05 I think China is not the axis of evil or a pariah state the way that the North Koreans,
0:19:07 Russians, and Iranians are.
0:19:11 Those are chaos actors that want to destroy the international system, they want to defeat
0:19:12 the Americans.
0:19:16 And the Chinese actually need a stable global economy to prosper themselves.
0:19:20 So even if they would like to defeat the Americans, they know that that doesn’t actually work
0:19:21 with their system.
0:19:28 But in addition to that, America’s allies are also weaker, technologically much weaker.
0:19:32 I mean, you think about where the Americans are in terms of entrepreneurship and semiconductors
0:19:36 and AI and all these new companies and the markets and the strength of the dollar.
0:19:37 Where are the Europeans?
0:19:38 Where are the Japanese?
0:19:39 Where are the South Koreans?
0:19:40 Where are the Canadians?
0:19:42 The answer is nowhere.
0:19:47 And the governments are so weak, the U.S. has just elected Trump.
0:19:55 And unlike last time around, with Biden winning on January 6, I mean, Trump has a mandate.
0:19:58 And unlike 2017, Trump has coattails.
0:20:02 I mean, the Republicans see that they need him, not the other way around.
0:20:04 So he’s appointed a whole bunch of loyalists.
0:20:10 You don’t have any Rex Tillerson’s in this group, no Jim Mattis in this group, no Nikki
0:20:12 Haley in this group.
0:20:14 So no Mike Pence in this group, right?
0:20:18 So he’s consolidated, he’s strong.
0:20:20 He’s willing to use American power.
0:20:24 And America’s allies are incredibly weak.
0:20:25 Their governments are falling apart.
0:20:30 South Korea, Germany, France, Canada, all of these countries.
0:20:35 So everywhere you look, the United States is stronger.
0:20:42 Now I also think at home, the U.S. is not in decline.
0:20:44 Not at all.
0:20:45 People still want to come to America.
0:20:47 The American economy is doing very well.
0:20:48 America military is doing well.
0:20:51 It’s technology is doing very well.
0:20:55 But of course you said, except the fact that we hate each other, not just that, not just
0:21:00 that Scott, except the fact that our political system is increasingly not representative.
0:21:04 It’s increasingly captured by money and special interests.
0:21:10 The U.S. system is increasingly a two-tier system, and it’s not Democrats versus Republicans.
0:21:14 It’s access to power versus no access to power, right?
0:21:22 And that is uniquely dysfunctional in the context of advanced industrial democracies.
0:21:28 So you’ve got a political system that is not working, that is arguably in crisis.
0:21:34 I mean, if Narendra Modi, who is the most popular democratically elected leader of
0:21:40 a large country in the world today, okay, Bukele and El Salvador, hasn’t beat.
0:21:47 But in a big country, if he were to have a phone call or meetings with heads of state
0:21:55 and CEOs and bring in Gautam Adani, you and I would rightly state this country is an oligarchy.
0:22:01 It’s a kleptocracy, and yet that’s precisely what’s happening with Trump and Elon right
0:22:03 now, and it’s completely normalized.
0:22:09 So I do think that we can’t just say, well, with the exception of the fact that we hate
0:22:14 each other and the political system doesn’t work, actually, that’s a pretty cool thing
0:22:18 about the United States is the fact that the U.S. has a political system that other countries
0:22:21 are supposed to admire, are supposed to be more aligned with.
0:22:25 They’ve got values that set the standards for the rest of the world.
0:22:29 Rule of law is something that the rest of the world wants to be a part of.
0:22:34 Our worldview is supposed to be the dominant collective worldview.
0:22:36 That’s not true anymore.
0:22:38 So we’re very powerful.
0:22:43 And in the law of the jungle, we’re the big ape, absolutely.
0:22:51 But the law of the jungle is a much more brutal, nasty and dangerous place than a world that
0:22:58 has laws and accountability and responsibility and institutions and architecture that the
0:23:03 United States is leading with its allies and trying to get other countries to increasingly
0:23:04 align with it.
0:23:05 It’s a radically different place.
0:23:10 You bring up an interesting thought, and that is, we’re now 50% of the world’s market
0:23:12 capitalization, our stocks.
0:23:15 There’s one company in the U.S. that is more valuable than every stock market, with the
0:23:18 exception of Japan.
0:23:23 But if there is a global crisis that emerges, as strong as we are, we just can’t go it
0:23:24 alone.
0:23:25 We need allies.
0:23:32 And I don’t care if it’s World War II or repelling a Saddam out of Kuwait, whatever it might
0:23:35 be, even addressing COVID.
0:23:37 There needs to be global cooperation.
0:23:39 There needs to be a certain level of goodwill.
0:23:41 There needs to be alliances.
0:23:46 And I think first and foremost, I think of how successful NATO has been keeping the peace
0:23:48 since World War II.
0:23:53 Is it fair to say that those alliances have been dramatically frayed thereby making it
0:23:57 a more dangerous world for America despite its strength?
0:24:00 That’s an interesting question, Scott.
0:24:07 On the one hand, the level of trust of American allies for the United States that the U.S.
0:24:13 would be there when push comes to shove has eroded dramatically.
0:24:24 So there, if a collective security is in somehow fundamentally based on the notion that you
0:24:31 believe in each other, you’re accountable for each other, I think it has weakened.
0:24:37 On the other hand, the Europeans are spending a lot more on defense now than they were.
0:24:41 And the Japanese are spending a lot more on defense now than they were.
0:24:47 And Mark Rutte, the new Secretary General of NATO, former Prime Minister of the Netherlands,
0:24:54 is now working with the Europeans to move to 3 percent GDP spend on defense, which they’re
0:25:00 doing outside of the EU mechanisms so that the Hungarians can’t veto it, which means
0:25:01 they are moving.
0:25:06 I think that’s going to happen, which means that they’re going to be in all likelihood
0:25:11 by the end of the Trump administration, the Europeans will be paying about as much percentage
0:25:14 of GDP on defense as the Americans do.
0:25:16 So that’s a stronger NATO.
0:25:22 And I mean, when Trump demands that NATO allies spend more on defense, that’s not a pro-Putin
0:25:23 message.
0:25:27 That’s the exact opposite of what Putin wants them to do.
0:25:29 So it’s kind of interesting, right?
0:25:34 I mean, in the same way that America is not in decline, but its political system is, the
0:25:42 alliances, like the soft power, the willingness to engage with each other on the basis of
0:25:47 we like you, we trust you, this matters to us, that has eroded a lot.
0:25:52 And yet with America as a much more powerful country that other countries have to align
0:25:57 with or else, you know, actually the Americans can drive a lot more.
0:26:03 And so, you know, you saw this in our risk report, we have red herrings at the end, things
0:26:07 that people think are going to happen that we think will not.
0:26:09 And one of our herrings was Trump fails.
0:26:15 And, you know, you see this a lot in the mainstream media, this guy’s a buffoon, he’s incompetent,
0:26:16 you know, he only cares about himself.
0:26:18 So of course, he’s going to fail all over the place.
0:26:19 We don’t think so.
0:26:23 We think that Trump is going to say a whole bunch of stuff and people are going to get
0:26:24 on board.
0:26:25 They’re going to align with him.
0:26:29 I mean, if you think that Facebook and Apple are kissing his ass in Mar-a-Lago, that’s
0:26:34 nothing compared to how foreign governments who are aligned with the United States and
0:26:38 know they can’t afford to do anything else, the Mexicans, you know, the Europeans, they’re
0:26:42 going to want to find a way to ensure they don’t have a crisis with this guy.
0:26:47 So he’s going to have a lot of wins in the early stages.
0:26:54 It’s interesting because to be fair, I think what you’re saying is Trump’s, I don’t know,
0:27:02 I wouldn’t call it a middle finger, but his rolling his eyes or his lack of fear of saying
0:27:08 aggressive things about allies has resulted in an increase in spending, which should,
0:27:14 if you will, we still might be the world’s policemen, but other people are now buying
0:27:20 their own squad cars, that this has been a direct positive result of Trump’s actions
0:27:25 or adversarial tone of complexion with our allies, do you agree?
0:27:30 I do, I do, but also I would say that the gap is big.
0:27:37 It’s going to take a long time for them to spend at that level to get close to capabilities
0:27:38 to really defend themselves.
0:27:44 This is not going to get resolved in four years, even if their level of spending at that point
0:27:46 percentage-wise is equivalent to the U.S.
0:27:50 And some countries are already there, the Baltics, Poland, you know, some of the Nordics,
0:27:51 that kind of thing.
0:27:57 But also there’s a question of the fact that the Americans have the capacity to be a global
0:28:01 policeman, even with support, Trump has no interest in doing that, right?
0:28:07 I mean, Trump was the one that cut the deal with the Taliban that Biden then executed on.
0:28:13 Syria, you know, you’ve got a government that’s now in place in Syria that’s very unlikely
0:28:21 going to be able to stabilize that incredibly complex and volatile territory.
0:28:24 You’ve got over 2,000 U.S. troops stationed in Syria right now.
0:28:26 Trump doesn’t want to keep those troops there.
0:28:30 If Trump pulls them out, it’s not like France is going to send those troops.
0:28:32 It’s not like the U.K. is.
0:28:36 It’s much more likely that the Turks are going to be on the ground.
0:28:40 They’re going to hit the Kurds hard.
0:28:47 No longer jailing ISIS on the ground, and the potential for that to become fertile for
0:28:49 a new caliphate is real.
0:28:58 So, I mean, the absence of the U.S. as a willing policeman will save American taxpayers.
0:29:05 It will put fewer lives at risk, but it will lead to more ungoverned spaces.
0:29:10 It will lead to more depredation, more forced migration, that will affect other countries
0:29:15 to a much greater degree to the U.S. because the U.S. is geographically very well located
0:29:21 and between Canada and Mexico and two big bodies of water, but the world will become
0:29:23 more dangerous and more unstable.
0:29:25 So, you know, there’s that.
0:29:30 So, and I don’t know if this is a function of living abroad now, but when I come back
0:29:36 or I don’t feel as I’m as in touch with America’s, which is a good and a bad thing, and I’d like
0:29:42 to think it’s offered some perspective, but I am mildly horrified minus the mildly.
0:29:51 What I see is this in full embrace by not only our leaders, but by acceptance by our
0:29:59 media and the general public of what is just an obvious naked, unafraid, unashamed kleptocracy
0:30:05 that if you look at the inaugural campaigns, I think of all the big 10 or the magazine
0:30:11 10, there was like a couple of $200,000 donations to the inaugural campaign or inaugural celebration
0:30:12 of Biden.
0:30:15 And now every one of them is lined up and put in a million bucks.
0:30:19 I mean, this feels like literally an episode of the Sopranos where they walk into the local
0:30:23 retailer and say, you know, it’d be a shame if your windows got broken and this place
0:30:24 got robbed.
0:30:26 We need protection money.
0:30:32 And this has now gone full kleptocracy where Musk increases his wealth by 150 or 200 billion
0:30:33 for no other reason.
0:30:37 As far as I can tell that they assumed that because he put in a quarter of a billion dollars,
0:30:41 that the largest, deepest pocketed customer in the world will throw money at him and anybody
0:30:44 else who decides pay for play.
0:30:45 Have we gone?
0:30:50 Is it unfair to say we have gone full kleptocratic?
0:30:58 This trajectory is very strongly in that direction and it was already bad before Trump.
0:31:04 I mean, you know, three billion plus spent on our presidential election over two years
0:31:07 doesn’t need to be that way.
0:31:13 You know, the incredible willingness of special interests in the U.S. to capture the regulatory
0:31:20 system to write their own policies, you know, that’s not a competitive free market.
0:31:28 A competitive free market is one where you’ve got regulators that represent the public interest
0:31:31 and companies have to compete against each other.
0:31:35 It’s not about who has more access to power and who has the ability to write regulations
0:31:37 that support them and get subsidies.
0:31:41 It’s about who has the best product, who’s the most competitive.
0:31:44 We’re very far from that in the United States right now.
0:31:50 We still have, you know, a great environment for small enterprises that start up with plucky
0:31:56 entrepreneurs like you and I have experienced and benefited from through our lives.
0:31:59 But in America is still great at that.
0:32:07 But in terms of big corporations and billionaires, now we’re talking about a country that is
0:32:13 open to the highest bidder and our allies see that and they’re worried about it.
0:32:15 They don’t like it.
0:32:19 And it’s not the way their systems run, not the advanced industrial economies anyway.
0:32:26 It’s closer to way a lot of emerging markets run and we should worry, I think, a lot about
0:32:27 that.
0:32:28 Absolutely.
0:32:33 And that’s where the Elon thing really bothers me.
0:32:38 Less about freedom of speech and more about, you know, what does it mean?
0:32:44 What does he get for his quarter of a billion dollars with Trump?
0:32:46 I mean, we see how much access he has.
0:32:51 We see that he, I mean, he has a position that’s a non-governmental advisory position
0:32:52 in Doge.
0:32:58 We see his ability to talk directly with competitor CEOs while he’s sitting with the
0:33:05 president or heads of state while he’s sitting with the president to functionally even veto
0:33:09 legislation when he speaks out against it, get people aligned.
0:33:11 I mean, that’s a pretty unique position.
0:33:14 We’ve not seen anyone like that before.
0:33:19 He’s certainly the most powerful individual in the private sector that the US has experienced
0:33:22 since the Gilded Age.
0:33:23 What does that mean?
0:33:26 What does that mean for the United States domestically, its political system?
0:33:30 What does that mean for the US with its allies in the global order?
0:33:32 I don’t think it’s a good development.
0:33:59 It’s January 6th and Congress met today at 1 p.m. to certify Donald Trump as the winner
0:34:02 of the 2024 election.
0:34:06 Four years ago, you may recall, Congress was meant to do the same, but the certification
0:34:10 was delayed when thousands of Trump supporters marched on the Capitol.
0:34:15 The president-elect has said repeatedly, and he told NBC again last month that he’s going
0:34:19 to pardon at least some of the insurrectionists.
0:34:25 Those people have suffered long and hard, and there may be some exceptions to it, I have
0:34:26 to look.
0:34:32 But if somebody was radical, crazy, there might be some people from Antifa there?
0:34:36 I don’t know, because those people seem to be in good shape.
0:34:37 Whatever happened to Scaffold Man?
0:34:38 You had to be there.
0:34:43 Antifa was actually not there four years ago, but members of several extremist groups were
0:34:45 at the Capitol on Jan 6th.
0:34:49 And today on Explained, we’re going to ask, “Whither American extremism on the eve of
0:34:52 a second Trump administration?”
0:34:55 Today Explained, every weekday, wherever you get your podcasts.
0:35:03 So, you touched on Syria, and risk number nine, you called ungoverned spaces.
0:35:07 Do you think, and you did begin to outline this, do you think what’s happened in Syria
0:35:11 is a net positive or negative for the West?
0:35:19 I think the fact that Assad is gone is a net positive for the West, because Assad was an
0:35:29 utterly brutal dictator who allowed for more people around the world to believe that they
0:35:34 could act with impunity in their own backyards and get away with it.
0:35:38 He was an ally to not just Russia, but Iran.
0:35:46 He facilitated the illegal transfer of weapons from Iran into Lebanon, strengthening Hezbollah,
0:35:53 which is seen by the US as a terrorist organization, as a principal adversary of Israel.
0:36:02 He was the principal, oversaw the principal production of Captagon, an incredibly addictive,
0:36:08 enormously debilitating illegal drug that was being exported all over the region and
0:36:11 Europe, and some to the United States.
0:36:17 I am delighted that he’s gone, and I don’t shed any tears about him getting poisoned
0:36:22 in Moscow within a couple of weeks of the Russians accepting him in quotes.
0:36:29 What has replaced him is at best, at best uncertain.
0:36:39 I mean, this new government came out of ISIS-connected folks, and they are certainly showing that
0:36:45 they want to be more inclusive, that they’ve turned over a new leaf, but does that really
0:36:51 mean that they’re going to be either capable or willing to run a more stable, more inclusive
0:37:00 government that won’t either collapse or won’t launch a war against large numbers of its
0:37:01 own citizens?
0:37:03 We’ll have to wait and see.
0:37:09 But no, it’s clearly a positive, a net positive for the West and for everyone that Assad has
0:37:10 gone.
0:37:15 So, one of the few places I think we have a bit of a differing viewpoint is on Israel
0:37:17 and the conflict there.
0:37:22 And I’ll put forward another thesis that Israel’s bold and courageous actions taking out more
0:37:27 terrorists in six weeks than we took out in 25 years on our most wanted list, cutting
0:37:36 off the hands of the proxies of Iran, incredibly bold, the most precise anti-terrorist action
0:37:41 or operation in history with the Pagers and Hezbollah, that Israel has demonstrated not
0:37:48 only tremendous power expertise and strategy here, but they, in my view, their actions
0:37:54 are going to make the Middle East a safer, more stable, more pro-West place because of
0:37:56 their actions.
0:37:57 Your thoughts?
0:38:06 Well, first of all, the only risk that shows up in our report on the Middle East, one is
0:38:11 that oil prices are likely to be low, which means less money for the Gulf states, both
0:38:16 for themselves as well as to help countries in the region that need and have benefited
0:38:21 from their aid, like Jordan, for example, Egypt, for example, Tunisia, for example.
0:38:29 And secondly, Iran, which is a significant risk in part because they are, their regime
0:38:35 is on life support, they’ve lost their empire, and the Americans and the Israelis might well
0:38:38 decide this is the opportunity to really hit them hard.
0:38:39 Those are the risks.
0:38:46 So I mean, we didn’t have in the report Hezbollah or the West Bank or Gaza, because the Israelis
0:38:53 have shown that they are militarily dominant, they, they determine the nature of escalation,
0:38:59 and their enemies can’t do anything to them, and that includes, frankly, the Iranians.
0:39:07 So I certainly accept the fact that the Israelis have defeated their enemies to in a pretty
0:39:14 spectacular fashion over the last year and a bit, following October 7th.
0:39:16 I agree with that.
0:39:22 Where you and I probably disagree, and we’ve had discussions about this in the past, Scott,
0:39:29 is that I don’t believe that you can resolve the Palestinian problem by blowing them all
0:39:30 up.
0:39:31 I just don’t.
0:39:37 I mean, I think that, you know, if Hamas is an army, they’re defeated.
0:39:42 If Hamas is an ideology and an idea, you’ve probably made them stronger because you’ve
0:39:45 radicalized people for generations.
0:39:56 And what I see in Gaza, and the lack of humanitarian support, and the comparative breadth of bombing,
0:40:05 and lack of willingness to be accountable for the risks of the civilian population.
0:40:11 And I’m not in any way trying to say that Israel shouldn’t want to blow up Hamas.
0:40:14 I absolutely accept terrorist organization.
0:40:18 They’ve done horrible things to the Israelis and to their own population.
0:40:25 But ultimately, the fact that as a result of this war, the Palestinians are facing far
0:40:30 greater depredation than they were on October 6th.
0:40:34 And also the Palestinians in the West Bank have lost a lot more territory.
0:40:36 They’re living under more of a security state.
0:40:39 They are much farther from having a state.
0:40:43 I believe that will lead to more radicalism.
0:40:50 I believe that will lead to more violence against Israel, against the United States,
0:40:52 and more broadly in the region.
0:40:53 I believe that.
0:40:57 Now, I mean, how do you balance those things?
0:41:00 Because again, at the end of the day, Israel’s a tiny country.
0:41:01 They’re very wealthy.
0:41:03 They’re incredible in terms of surveillance.
0:41:08 If they keep their eyes on the ball, as Netanyahu did not before October 7th, they will have
0:41:11 great control over their borders.
0:41:18 So I think in the context of that, maybe they can effectively occupy Palestinian territories
0:41:22 and the Palestinians will just live as an imprisoned people.
0:41:25 It’s possible and that that won’t be a threat to Israel.
0:41:27 I don’t believe that that’s humane.
0:41:29 That’s not a world I want to live in.
0:41:32 But I also don’t think it’s true.
0:41:37 So I mean, even if you don’t care about the Palestinians as people, and there are a lot
0:41:43 of people that don’t, I believe and I do, but I understand that there are people that
0:41:47 just have decided that’s my enemy and I don’t care.
0:41:53 But I actually believe that these are people that are industrious.
0:42:00 They are capable and with advanced technologies, they will increasingly find ways to make their
0:42:02 voice heard.
0:42:04 And I worry about that.
0:42:09 I mean, I worry about that in the same way that I worry about when the CEO of United
0:42:15 Healthcare is assassinated by some pretty boy idiot, that a whole bunch of people on
0:42:20 the Internet, and by the way, some establishment Democrats, seem to lionize the guy.
0:42:22 Oh, I understand what he did.
0:42:23 That’s what happens.
0:42:25 You radicalize people.
0:42:27 They do crazy shit and they have supporters.
0:42:34 And I worry that the Palestinians are increasingly going to be prone, larger numbers of them.
0:42:37 To do crazy shit with supporters.
0:42:41 This idea and a lot of people hold it that you, even if you kill, you can kill people
0:42:42 but you can’t kill an idea.
0:42:46 I would push back and say, we for the most part killed communism.
0:42:49 We for the most part at least we saw killed fascism.
0:42:52 And at the end of World War II, we were bombing Hamburg.
0:42:57 We killed 40 service or military and killed 40,000 civilians.
0:42:59 And we had already won the war.
0:43:03 And when asked the generals and Eisenhower asked why they continued to devastate Hamburg,
0:43:05 they said they need to know they lost.
0:43:07 And I know that sounds brutal.
0:43:13 But I would argue that we would have done worse had we been as viciously attacked.
0:43:19 And two, when you actually look at the data, specifically the deaths of combatants relative
0:43:26 to civilians, that the Israelis are prosecuting this war more humanely than any Western nation
0:43:28 has prosecuted another war.
0:43:29 Your thoughts?
0:43:40 So, I accept the fact that the United States in the war in Iraq and in Afghanistan also
0:43:47 saw massive amounts of civilian damage and brutality, except it completely.
0:43:54 But let me, I was focused when I said I take exception to the way the Israelis have proselytized
0:44:00 this war, I’ve talked about the utter lack of humanitarian aid getting in to Gaza.
0:44:06 And I also talked about taking more land and the greatest security state in the West Bank.
0:44:08 And again, I think those things matter.
0:44:16 Now, I don’t think you need, you can blow up Hamas and still allow food in for the Palestinians.
0:44:22 I mean, my view is that if you’re a friend of Israel as I am, you want Israel to do well
0:44:24 in sustainably long-term.
0:44:28 And that means criticizing Israel when you think it’s fucking up.
0:44:33 The United States, which has been the strongest supporter of Israel, bar none.
0:44:41 No one else is close over the last year, has been incredibly critical, mostly privately,
0:44:44 of the fact that not enough aid has gotten in.
0:44:50 So, again, my point here is simply that I believe that there’s going to be greater radicalization.
0:44:57 And we need to move to thinking about how after they’ve lost.
0:44:58 And do they know they’ve lost?
0:45:00 It’s not like just the war since October 7th.
0:45:05 The Palestinians have known that they’ve lost for decades now, right?
0:45:10 I mean, like they have less and less territory, they’ve been moved farther and farther out.
0:45:15 There are opportunities, economic opportunities, educational opportunities are more and more
0:45:16 constrained.
0:45:20 A lot of that is on their own poor governance.
0:45:21 Don’t get me wrong.
0:45:23 It’s not just all about Israel.
0:45:25 A lot of that is because they were forgotten by the Gulf states.
0:45:27 A lot of that is because the Americans don’t care about them, the Europeans don’t care.
0:45:31 I mean, no one cares about the Palestinians, except the Palestinians.
0:45:32 They do.
0:45:34 The Palestinians care about the Palestinians.
0:45:38 And ultimately, I think that’s going to cause a problem.
0:45:42 Hasn’t Qatar sent over a billion dollars, which they decided to spend on tunnels and
0:45:43 rockets?
0:45:46 And the beneficiary of a tremendous amount of aid?
0:45:53 Qatar has been the single biggest supporter on the ground in Gaza over past years.
0:45:55 And of course, that’s now been cut off, absolutely.
0:46:02 But if you look at what kind of support the Palestinians have had on the ground to build
0:46:08 their economy compared to other countries, actual countries in the region, the answer
0:46:10 is very, very little.
0:46:13 And look, you know that my mother’s side of the family is Armenian.
0:46:20 I mean, 125,000 Armenians just ethnically cleansed from Nagorno-Karabakh.
0:46:21 And no one’s talking about it.
0:46:22 You’re not going to ask me about it.
0:46:23 It’s not in our top risk report.
0:46:24 We didn’t write about it all.
0:46:25 Even in ungoverned territories.
0:46:28 We didn’t bother to mention it because nobody cares.
0:46:31 And that’s what I’m saying, law of the jungle.
0:46:39 The fact is, we could have a very long conversation about why it got to this situation where 125,000
0:46:46 civilians got tossed out of their homes, left with nothing, places blown up, occupied
0:46:49 all their historic monuments, their churches blown up.
0:46:50 Nobody talks about it.
0:46:52 It bothers me as a person, you know.
0:46:55 But the fact is, I mean, look, we talk about the Palestinians because it gets a lot more
0:47:01 attention, but we could, there are so many places where these are the same conversations.
0:47:05 But again, I love this because I want to stop you because I feel like I’m sitting across
0:47:08 the table from someone I respect immensely and I can have a civil conversation around
0:47:13 things I recognize, I feel strongly about, but I don’t know what I don’t know.
0:47:19 And that is, you talk about, we’re not having these conversations around the 120,000 people
0:47:24 who have been disappeared in Syria under Assad or, you know, what’s happened in Yemen, isn’t
0:47:30 it mostly because when Jews kill people, it’s seen as a different crime against humanity
0:47:32 than when other people kill people.
0:47:34 Isn’t there just a tremendous double standard here, Ian?
0:47:39 Look, I think that there are all sorts of double standards, Scott, but they don’t just
0:47:40 go one way.
0:47:47 I mean, the Holocaust has been seared in the imaginary, the collective historical memory
0:47:54 and the imagination of everyone that lived at that time and since.
0:48:01 And you know, for a long time, the Jews were seen to be like the principal global victim
0:48:05 and we all had to ensure that never happened again.
0:48:08 Today, that is not true.
0:48:15 Today Israel is the dominant military actor in the entire Middle East, not just vis-à-vis
0:48:19 the Palestinians, and they are the ones that get to decide.
0:48:23 Now we in the United States love an underdog.
0:48:29 I think that there has been a shift for a lot of young people in the United States that
0:48:34 suddenly don’t see support for Israel as support of the underdog.
0:48:39 They think that we’re somehow the bad guys because we’re in favor of the powerful and
0:48:41 not in favor of the oppressed.
0:48:46 And the Ukrainians are in the position that the Israelis used to be in.
0:48:48 So I think there’s some of that.
0:48:57 I think there has been a massive surge in anti-Semitism around the world, very disturbing,
0:49:00 and that certainly has to do with the fact that there are a hell of a lot more Muslims
0:49:06 than there are Jews, and a lot of them are on TikTok, for example.
0:49:10 And so you see that performing algorithmically, not because TikTok is nefarious, but just
0:49:14 because it performs with those eyeballs, there’s some of that.
0:49:19 And also the fact that there’s just a lot of media occupying that space.
0:49:24 You know, I mean, this is an area that has a lot of journalists on the ground and covering
0:49:25 it.
0:49:29 There’s no journalist in Sudan or Yemen writing about it.
0:49:32 This part of the world matters economically, technologically.
0:49:33 It doesn’t.
0:49:34 Sudan, nobody cares.
0:49:35 Right?
0:49:36 It doesn’t have a market impact.
0:49:39 There’s no one that’s going to school there that’s going to come and talk about it.
0:49:41 There’s not as much of a diaspora in the West.
0:49:46 There is when you talk about the Israelis and the Palestinians.
0:49:52 So I think there are lots of reasons, and to simplify this to just one factor, you and
0:49:55 I would not do that about any other discussion we’d have.
0:49:59 We certainly wouldn’t want to simplify this in that way.
0:50:01 Let me first pros again.
0:50:02 First comment.
0:50:04 I absolutely love these conversations.
0:50:05 So thank you too.
0:50:10 You said that TikTok, not because TikTok is nefarious, another thesis.
0:50:16 TikTok is largely influenced, if not controlled by the CCP, who has a strategic reason to
0:50:19 deposition us or make us weaker.
0:50:23 If they can’t beat us economically or kinetically, why wouldn’t they put their thumb on the scale
0:50:28 of content that polarizes us, resulting in 52 pro-Hamas videos for everyone pro-Israel
0:50:33 video, which according to the research I’ve seen is taking place on TikTok.
0:50:40 In some, I would argue TikTok is nefarious and purposely trying to delegitimize or create
0:50:43 polarization amongst our public.
0:50:45 So I think social media is nefarious.
0:50:56 And I agree that TikTok is certainly influenced by the CCP, the Communist Party of China.
0:50:58 And we should not trust that.
0:51:02 They have said that they are not giving any information to the Chinese Communist Party.
0:51:03 That has been proved in many investigations.
0:51:06 Wall Street Journal, other reports to be not true.
0:51:13 So I’m not comfortable with the idea that TikTok is just a free market corporation that’s
0:51:19 only seeking profits and nothing matters, but to the extent that the Chinese have been
0:51:26 involved in cyber operations to influence U.S. elections and the Russians have been
0:51:32 involved in the Iranians and the North Koreans, the Russians are actively promoting information
0:51:40 that is trying to increase a sense of racism, rage, violence, hostility, maltreatment.
0:51:43 I mean, they’re flooding the zone with shit.
0:51:50 In ways that really is trying to disrupt and undermine U.S. democracy and stability.
0:51:58 China’s cyber influence on the U.S. elections was overwhelmingly intelligence seeking.
0:52:03 It was get inside the systems to figure out what they’re really doing so that we can take
0:52:05 advantage from it.
0:52:11 It was also get inside critical infrastructure so that just in case things go badly, we might
0:52:13 be able to blow these guys up.
0:52:18 So I’m someone that believes that I don’t know what I don’t know, I know what I know.
0:52:23 I am not inside, I know the CEO of TikTok, I’ve met him many times.
0:52:25 I’m not inside their decision-making process.
0:52:28 I don’t know what they’re saying to the Communist Party.
0:52:33 But I know what I see, the evidence from what the Chinese have done in other areas.
0:52:37 There’s no reason for me to believe that that would uniquely and somehow be different with
0:52:44 TikTok than it is with their entire national strategy, which has been risk averse and influence
0:52:47 and information maximizing for them directly.
0:52:52 It has not been breaking and blowing up the United States.
0:52:59 And I also think that there’s a much simpler Occam’s razor explanation for why young people
0:53:07 would get a lot more pro-Islam and pro-Palestinian content than they would get pro-Israel and
0:53:08 pro-Jewish.
0:53:14 And it’s because TikTok is a global platform with enormous numbers of people from Pakistan
0:53:17 and Indonesia on it.
0:53:23 And also oriented towards younger people that are already, even in the West, much more pro-Palestinian
0:53:26 than they are pro-Israel all over the world.
0:53:28 And that’s just being driven algorithmically.
0:53:30 I think that’s the simplest argument.
0:53:33 So that’s how I feel about that.
0:53:36 Let’s talk about Ukraine.
0:53:38 Give us your state of play in Ukraine.
0:53:43 So you’ll remember back at the beginning of 2024, you and I talked about this.
0:53:44 And I said, and I wasn’t happy about it at all.
0:53:47 I said, I think Ukraine is going to get partitioned.
0:53:49 You were one of the first people that ever said that out loud.
0:53:52 I want to point that out.
0:53:56 You said, look, this land, they’re never getting it back is essentially what you said.
0:53:57 Yeah.
0:53:59 And I mean, I want to be very clear.
0:54:02 I really don’t want that outcome.
0:54:06 But it’s not for me to be telling everybody what I want.
0:54:10 It’s much more about where you think things are going.
0:54:18 And the Ukrainians, I think, increasingly understand that they’re now trying to position
0:54:24 themselves for the best possible negotiation where they are going to have to lose most,
0:54:28 if not all of the territory that the Russians presently occupy.
0:54:32 They’d like a little leverage, which is why they’re continuing the offensive in Kursk,
0:54:35 which is inside Russia, so that they have something to trade that’s going to make the
0:54:41 negotiations more fraught, but does give them leverage.
0:54:46 The Russians also are, they’d benefit from a breather.
0:54:53 I mean, yeah, they’ve got 15,000 North Korean troops that are not fighting well and are
0:54:58 dying in large numbers, but they’re having a harder time raising significant numbers
0:55:00 of troops for the war effort.
0:55:06 And their economy is increasingly performing badly under strain of sanction and lack of
0:55:08 human capital.
0:55:13 So I think that Trump is going to succeed in getting a ceasefire.
0:55:18 I don’t think it’s going to take a day, and it’s going to be hard of any thought.
0:55:22 But when he tells the Ukrainians, you need to accept what I’m telling you or else.
0:55:26 First of all, he’s creating some cover for Zelensky to say, look, I’ve got no choice
0:55:30 now because of the Americans, which is helpful to Zelensky, frankly.
0:55:34 But also he does know that the Americans will cut off aid if he doesn’t.
0:55:35 So that will move.
0:55:40 And the French McCronev has also delivered that message just yesterday to Zelensky.
0:55:41 He’s heard it from the Germans and others.
0:55:44 So he’s getting that pressure.
0:55:48 And the Russians also know, though it’s harder to pressure them in this environment, the
0:55:49 US has less leverage.
0:55:54 They know that if they don’t accept negotiations in a ceasefire, that they’re going to get
0:55:57 tougher sanctions from Trump.
0:55:58 I do believe that.
0:56:00 And Trump has delivered that message.
0:56:02 I also thought it was very interesting.
0:56:05 I mean, Trump’s tweets aren’t always interesting, but sometimes they are.
0:56:11 And there was one he put out a couple of weeks ago that said about Russia, Ukraine, that
0:56:14 also China can help.
0:56:17 And it was very interesting that Trump would say that.
0:56:19 I fully agree with it.
0:56:23 China does not benefit from this war continuing.
0:56:28 They would like the Russians to have a ceasefire.
0:56:33 It is undermining China’s relationship with Europe, which especially the front line states,
0:56:35 which they would like to be more stable.
0:56:38 It is making it harder for the Chinese to have flexibility globally.
0:56:41 They really don’t like the Russian North Korea relationship.
0:56:43 They want this war over.
0:56:47 As you said before, the Chinese need stability, the Russians are chaos actors, so they’re
0:56:48 not fully aligned in this.
0:56:55 If I were Trump, I would absolutely reach out to the Chinese to be a part of this solution.
0:57:00 And the first Trump-Sijian pin call is going to be utterly fascinating for so many reasons,
0:57:02 but this is one of them.
0:57:07 So just as we wrap up here in, we have a lot of young people who listen to this podcast
0:57:11 and are very focused on trying to develop their own careers.
0:57:15 And I think a lot of people listen to this and hear about your background in GZERO Media
0:57:19 and think, “God, that is just such a cool job in business.”
0:57:25 What it just gives us, just the cliff notes, I would imagine your business is booming.
0:57:27 And what is the friction right now in your business?
0:57:34 When you look at 2025 as the founder of this consulting firm or media company, what are
0:57:39 you most excited about and most worried about as it relates to being an entrepreneur and
0:57:41 building your business?
0:57:47 Well, I mean, it’s kind of funny because, of course, given that we try to help people
0:57:51 understand the world when there’s more uncertainty, more people need us, and that’s true both
0:57:55 in terms of the companies that pay us to do consulting and advisory work and also in terms
0:58:02 of just the members of the public that engage with our media channels and the rest, I mean,
0:58:07 we did a lot better growth-wise in the Trump administration than we did in Biden.
0:58:12 I mean, leaving aside the fact that tax rates went down, so all the corporates did well
0:58:18 under that, but just generally speaking, much more uncertainty driven by the Trump administration.
0:58:25 We already see that starting now, he’s certainly acting as president with Biden doing much
0:58:26 less.
0:58:30 I expect that’ll be true again, so that’s not a point of friction.
0:58:33 The point of friction, and I think you’ll appreciate this.
0:58:37 So we’ve got almost 250 employees, right?
0:58:41 For me, that sounds amazing because I started as a kid from the projects and it was just
0:58:42 me.
0:58:43 Sounds like a headache.
0:58:44 Well, I’ve got a CEO.
0:58:48 It’s not like I’m running it, but I mean, 250 people is a small company.
0:58:55 In the grand scheme of things, it’s a small company, and the biggest point of friction
0:59:02 is that we need to ensure that the bets that we make in a given year, there are so many
0:59:07 places that we could go and engage and build the firm.
0:59:11 Different types of businesses, different geographies, different sectors we can invest
0:59:15 in, different kinds of staff, all sorts of things we can do.
0:59:21 And yet as a firm with 250 people, you can only make four or five of those bets in a
0:59:24 serious way in any given year.
0:59:28 So it’s not about who your competitors are globally.
0:59:35 It’s much more about marshalling your resources intelligently yourself and making those bets
0:59:41 so they’re not singles, but a couple of them are actually home runs, that they really do
0:59:43 your constraint.
0:59:48 I mean, it’s kind of like you and I have so many hours in the day, you’ve got so many
0:59:52 hours with the kids before they don’t want to talk to you anymore.
0:59:55 How are you going to spend that time with them that maximizes it?
0:59:59 We’ve got only so many people and so much money we can deploy.
1:00:03 How do we do that in a big world that’s rife with opportunity?
1:00:05 There’s too much opportunity in the world.
1:00:12 And there’s only one of me, and there’s only one Eurasia group, only one GZero media.
1:00:13 How do you do that?
1:00:18 And I’m an optimist, my eyes are always bigger than my stomach, everything can work out.
1:00:26 The people around me are meant to ensure that there is structure and reality around all
1:00:27 of that.
1:00:29 And I think they do a real good job.
1:00:35 Yeah, the charge of any leader is not what to do, but what not to do, how you allocate
1:00:38 capital to its greatest return.
1:00:41 Ian Bremmer is the president and founder of Eurasia Group, the world’s leading political
1:00:46 risk research and consulting firm, and GZero media, a company dedicated to providing intelligent
1:00:49 and engaging coverage of international affairs.
1:00:54 He’s also the author of 11 books, including The New York Times bestsellers, Us vs Them,
1:00:59 The Failure of Globalism, and his latest book, The Power of Crisis, How Three Threats and
1:01:02 Our Response Will Change the World.
1:01:07 Ian, Alec Baldwin has hosted SNL 17 times, you have now been on Prop G seven times, we
1:01:08 are catching up fast.
1:01:13 You are hands down our favorite guests, you’re thoughtful, you’re civil, you’re creative.
1:01:17 I just love these conversations, really appreciate your partnership and friendship.
1:01:31 All right, brother, take care, happy New Year.
1:01:32 Algebra of happiness.
1:01:37 This guy, I think his name is Tyler, I found him on TikTok or Instagram, kind of obsessed
1:01:38 with him.
1:01:41 He’s this former financial advisor that takes these long walks in the woods, it looks like
1:01:45 he’s in a work camp in Vladivostok and gives financial advice, and I just think he’s fantastic
1:01:46 what he does.
1:01:51 And he said something that impacted me, he said that here is the definition of success,
1:01:55 a series of small actions every day.
1:01:59 And it just, it struck me as so simple, but this is what I hope we’re all going to do,
1:02:03 or I’m going to suggest you do, and I’m going to try and do the same thing.
1:02:08 And that is every day this year, do one small thing, one small thing that’s going to add
1:02:12 up to something great at the end of the year, 15, 20, 30 minutes of exercise, it might be
1:02:17 a long walk, a text message every day to someone you care about, telling them that you care
1:02:22 about them, and it might not be, I care about you, but just checking in, hi, how are you?
1:02:26 You’re going to aggregate those, those text messages are going to compound something for
1:02:30 yourself, create one or two minutes of content every day.
1:02:35 I’m going to write a blog post or 100 words of a blog post every day, I’m going to put
1:02:39 out a minute or every three days, I’m going to put out a video, I’m going to put out interesting
1:02:42 content on a social media platform to try and garner my following.
1:02:46 I’m going to save 10 bucks a day, I’m going to not, I’m going to not take an Uber, I’m
1:02:51 going to take the subway, and I am not going to buy that latte from Starbucks, and I’m
1:02:58 going to invest 10 bucks every day in Vanguard and ETF or on the Acorns app, whatever it
1:02:59 might be, right?
1:03:06 A series of small actions every day that add up to something great, especially around relationships.
1:03:09 This is our year, it’s 2025.
1:03:14 Everything behind you is gone, it’s done, it’s immutable, but 2025 is immutable.
1:03:17 Let’s start now.
1:03:21 This episode was produced by Jennifer Sanchez, our intern is Dan Shalong, Drew Burroughs is
1:03:25 our technical director, it’s so nice to see Drew again, so nice to see Drew, he comes
1:03:29 over to my house, he sets everything up, he’s this nice presence.
1:03:32 Thank you for listening to The Prof. G Pod from the Vox Media Podcast Network.
1:03:37 We will catch you on Saturday for No Mercino Malice, as read by George Hahn, and please
1:03:41 follow our Prof. G. Markets Pod wherever you get your pods for new episodes every Monday
1:03:42 and Thursday.
1:03:49 Woohoo!
1:03:51 (gentle music)