0:00:06 This episode is brought to you by On Investing, an original podcast from Charles Schwab.
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0:00:39 Hey, this is Scott Galloway, host of the PropG Podcast.
0:00:43 One of my favorite things I get to do on this show is hear from our listeners and answer
0:00:48 their burning questions about all sorts of things, including work, life, school.
0:00:49 You name it.
0:00:52 And this summer, we’re bringing back the hits and covering some of our favorite questions
0:00:53 and takes.
0:00:57 We’re talking business, career advice, and even hearing a brand new, never been aired
0:00:58 interview about parenthood.
0:01:03 So tune in to the best of office hours, the special series from the PropG Podcast sponsored
0:01:05 by Mint Mobile.
0:01:10 You can find it on the PropG feed wherever you get your podcasts.
0:01:12 This week’s number, 400.
0:01:17 That’s how many people applied to adopt Pepper, a foul mouth parrot from Anaya Rafal’s Animal
0:01:18 Shelter.
0:01:22 True story, the Pope has said that pets should not replace children.
0:01:25 I guess he doesn’t want priest practicing bestiality.
0:01:40 Welcome to PropG markets at what’s going, is that too much, Ed?
0:01:41 Is that too much?
0:01:42 On point, as always.
0:01:43 There you go.
0:01:44 There you go.
0:01:45 What was my other pet joke?
0:01:49 Oh, supposedly one-third of people let their pets sleep in their bed with them.
0:01:53 So I gave it a try and the goldfish died.
0:01:55 That’s a good two, right?
0:01:56 That’s good.
0:02:00 If I could just weave in goldfish and pedophilia, I could have it all.
0:02:01 I could have it all.
0:02:04 Welcome to PropG markets, Ed.
0:02:05 What is going on today?
0:02:08 We’re going to talk about money, as always Scott, but this time we’re going to focus
0:02:13 on a specific topic that we get a lot of questions about, and that is how to deal with
0:02:16 money when it comes to family.
0:02:19 So I’m going to run through a series of questions about how you think about money when it comes
0:02:23 to your own family, and hopefully we’ll get some advice for our listeners.
0:02:24 That sound good?
0:02:25 Sounds good.
0:02:29 So you have a famous piece of advice, which is that the most important financial decision
0:02:32 that you’ll make is who you partner with.
0:02:37 So I just want to focus on partners for the beginning of this.
0:02:41 How did you know that you and your partner were aligned financially?
0:02:44 Well, it’s not easy to sort of have that conversation with your young, because you’re
0:02:48 not entirely sure you understand each of your approach to spending.
0:02:49 You get a sense for it.
0:02:52 A lot of it just comes down to what sort of turns you on.
0:02:57 I’ve always been very attracted to women who were exceptionally competent.
0:03:02 My current partner worked at Goldman Sachs, has an MBA, has always made a lot of money,
0:03:04 and I just find that sexy.
0:03:08 Not so much that they make money, which is obviously very helpful.
0:03:12 Two incomes are just so powerful relative to one.
0:03:14 But I’ve always just been drawn to people who are really competent.
0:03:19 My girlfriend before her was a surgeon.
0:03:24 And my first wife also had an MBA and was the COO of a retailer.
0:03:27 So that shit just works for me.
0:03:29 And I think it’s an individual thing.
0:03:31 I got very lucky that way.
0:03:35 And that is I chose partners who were really financially viable, not because I was thinking
0:03:39 about money, but because I just personally find that very attractive.
0:03:44 And do you have conversations with your — have you always had conversations with your partners
0:03:46 about money and about your financial goals?
0:03:49 Yeah, although in the beginning, we didn’t really have a lot of conversations.
0:03:53 It was just — with my first wife, it was just like, we’re both working so hard.
0:03:56 And she had sort of these Midwestern values.
0:03:57 I’ve always spent more than my partners.
0:04:01 I’ve always — I don’t know if it was purposeful, but I’ve always found partners that are fairly
0:04:03 — not frugal, but really responsible with money.
0:04:06 And I’m always on the one like, “No, let’s buy the Range Rover.
0:04:08 You only live once.”
0:04:11 And I’ve never gone into debt, but I’ve always been a spender.
0:04:17 And usually my partner’s sort of a more of a saver, or not even a saver, but less of
0:04:18 a risk-taker.
0:04:22 If we were up to my partner, we would have Krugerans buried in the backyard.
0:04:28 And maybe buying — like risk for her is buying Deutsche Bonds that yield one and a half percent.
0:04:33 And I’m like, “No, it’s this great new technology that sends, you know, that sends pets into
0:04:34 space.
0:04:37 It’s a no-brainer.”
0:04:40 What I will say is — and I think this is really important, the approach I have tried
0:04:41 to take.
0:04:48 And this is a story of privilege, because I’ve always had more money, or almost always
0:04:51 made more money than I was spending.
0:04:57 One of the really wonderful things I really value about my relationship is that I encourage
0:04:59 my wife to spend money.
0:05:01 I want her to enjoy the money.
0:05:05 I want her to live life.
0:05:07 And I’m the one — she’ll call me and say, “Hey, I’m looking at this.”
0:05:12 And she calls me because she doesn’t like to buy expensive things for herself.
0:05:14 And she knows I’m going to say, “Yes, go for it.”
0:05:19 I’m a conduit for happiness, and that is I’m never that happy myself.
0:05:23 But the way I register joy is when other people are happy.
0:05:29 So I’ve always really enjoyed, if money can buy people happiness in my family, I want them
0:05:32 to indulge and engage in that.
0:05:38 But that is one part of my life that has always been really positive.
0:05:43 What’s your approach to sharing with your partner, like sharing assets?
0:05:49 To what extent is it two financial lives versus one merged together for you?
0:05:50 Well, I think it’s individual.
0:05:54 I think some people, especially later in life, who come to the table with preexisting assets
0:05:58 when I keep their assets sequestered from each other, I get that.
0:06:04 But in all of my relationships, including this one, I’ve been in this current relationship
0:06:05 for over 20 years.
0:06:08 I didn’t really have any money when I met my current partner.
0:06:13 I mean, it’s really rewarding to build economic security is rewarding, but what’s incredibly
0:06:16 rewarding is to build it with someone else.
0:06:17 It’s just fun.
0:06:20 You just feel like you’re building something, and if you buy your house together and you
0:06:25 make money and you can build a nice life together that includes economic security, it’s just
0:06:27 so much rewarding than building it on your own.
0:06:29 It’s almost like it doesn’t really happen.
0:06:31 I love investing with other people.
0:06:36 That way if the investment goes well, you both celebrate it, and it’s just so much more fun.
0:06:38 I’ve never had separate accounts.
0:06:43 Even when I wasn’t married to my ex-wife when we were just living together, I’m like, “What’s
0:06:44 mine is yours?”
0:06:47 We had one checking account.
0:06:49 We didn’t track who was spending what.
0:06:51 We both had similar approaches to money.
0:06:52 We were both responsible.
0:06:54 We were both making money.
0:06:56 I have never checked my partner’s credit card bills.
0:06:58 I’ve never done any of that.
0:07:05 Again, a lot of that is because we had the luxury of having a decent amount of money.
0:07:08 This stuff is so important because they say the majority of divorces are a function of
0:07:10 economic stress.
0:07:11 That is just one stress.
0:07:18 I’ve had stress economically, but it has never been injected into my relationships.
0:07:23 What kinds of economic decisions do you think should be made together?
0:07:29 It sounds like when your wife calls you and she wants to buy something expensive, she’s
0:07:35 kind of asking for permission to make the economic decision together in a way.
0:07:38 Where’s your line on when you got to call the partner?
0:07:41 The dynamic is a little unusual there because here’s the thing.
0:07:42 She doesn’t need to call me.
0:07:43 She doesn’t need my permission.
0:07:49 What she is doing is she wants me to validate it because she has trouble spending that kind
0:07:50 of money on herself.
0:07:55 She knows what I’m going to say, which is the following.
0:07:57 You should absolutely buy it.
0:08:01 Oh my God, $38,000 for a pair of antique earrings.
0:08:02 That is such a great value.
0:08:07 It would be economically irresponsible of you not to buy it.
0:08:11 For the well-being of our family, I need you to buy those earrings.
0:08:15 She knows I’m going to say something similar to that and it makes her feel better about
0:08:16 buying it.
0:08:19 I see above, very privileged.
0:08:22 Let’s throw out a hypothetical for you then.
0:08:27 You want to buy a car, not a crazy sports car, but a car.
0:08:28 Is that a shared decision?
0:08:29 No.
0:08:33 If it’s something over a few hundred dollars, we’re renovating a house and she’ll talk to
0:08:37 me about decisions and what it’s going to cost.
0:08:42 We share a discussion and it’s not permission, but it’s joint decision making to try and
0:08:46 make sure wisdom of crowds around spending big ticket purchases, buying a house or renovating
0:08:47 a house or big purchases.
0:08:50 We talk about that stuff.
0:08:55 I make big investment decisions that are multi-million dollar decisions without her permission.
0:09:01 What we do on money though is because I manage the investments is that on a regular basis,
0:09:05 I tell her where we are and that is I’ll sit down with her probably every three or probably
0:09:07 every six months and I’ll say, “This is how much money we have.”
0:09:12 I have, I don’t know, 25 investments and I’ll say, “This is how they’re all doing.”
0:09:14 I try to give it to her very sober and very straight.
0:09:19 Last week, I think I told you two weeks ago, I had an investment, a $5 million investment
0:09:20 go to zero.
0:09:23 The next day I just said, “Oh, FYI, do you remember that health care text message in
0:09:24 company?”
0:09:25 I’m like, “It went to zero.”
0:09:27 Immediately, she said, “That’s it.
0:09:33 No more sex for you for the rest of the year, Mr. fucking idiot ruining our economic security.”
0:09:42 I think what strains relationships is obviously economics but I think what ruins them is surprises.
0:09:48 I always want my partner to know where we are economically and I’m good at money.
0:09:52 She outsources that part of our life to me and pretty much she does almost everything
0:09:58 else but around investments and maintaining top-line wealth and wealth decisions.
0:10:02 I make those decisions but on the big ones, I check in with her.
0:10:06 This is what I’m thinking, this is what we’re investing in and I just want her to know what’s
0:10:07 going on.
0:10:09 I don’t want her to ever feel surprised.
0:10:13 I don’t want her to feel like she’s reading the market so up 30% but our wealth got cut
0:10:15 because of our investments are down.
0:10:19 I never want her to be surprised so I tell her exactly how it is and I always, I would
0:10:25 say, have a little bit of a … I kind of give it to her a little bit worse than what
0:10:30 it is but I’m very quick to tell her about the losses and not as quick to tell her about
0:10:31 the wins.
0:10:35 I honestly do but the key is, you never want your partner to be a surprise about this.
0:10:37 I mean, losing money is bad.
0:10:38 What’s worse is surprises.
0:10:44 Yeah, it sounds like you don’t have much stress around the economics in your relationship.
0:10:46 One, because you have the money.
0:10:50 I think that’s an important point but two, it sounds like there’s just generally a high
0:10:55 level of trust so you don’t have to be tracking stuff because you just trust that the other
0:10:58 person is going to make the right decision.
0:10:59 Would you say that’s sort of the key?
0:11:05 I just think you need to be cognizant of what your partner, potential partner’s approach
0:11:11 to money is, if and what will their contribution be on both sides.
0:11:15 What economic weight class do you expect to be in?
0:11:19 Who’s responsible for maintaining that economic weight class and what is your approach, each
0:11:20 of your approach to spending?
0:11:27 Just some very basic general questions ask yourself and each other and also have an honest
0:11:28 talk about, “All right.
0:11:29 We live in Chicago.
0:11:31 This is probably what it’s going to cost to live.
0:11:33 This is how much money I’m going to make.
0:11:34 How much money do you think you’re going to make?
0:11:37 Are you planning to make money?”
0:11:42 Because you just need to get some sort of alignment and then I think where you need
0:11:50 real alignment with your partner, a very open conversation is when things go awry.
0:11:55 When you have economics to ask, maybe it’s a healthcare cost or one of your parents gets
0:11:59 sick and you have to come up with money when he gets laid off, whatever it might be, but
0:12:04 you end up with economic hardship, then you need to really be transparent and sit down
0:12:10 and get alignment and have some difficult conversations around what’s required to rebuild
0:12:11 as a team.
0:12:21 We’ll be right back.
0:12:23 Support for the show comes from Greenlight.
0:12:27 It’s August, the month where you can feel those back-to-school deals hitting your inbox
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0:12:31 From those overpriced school supplies to designer clothes, they’ll probably grow out
0:12:32 a fast.
0:12:36 But as a parent, you know how vitally important these next few years are for your child.
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0:14:28 Easier said, done.
0:14:34 This episode is brought to you by On Investing, an original podcast from Charles Schwab.
0:14:39 Each week, hosts Liz Ann Saunders, Schwab’s chief investment strategist, and Kathy Jones,
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0:15:29 We’re back with ProfG Markets.
0:15:31 Let’s talk about parents.
0:15:35 Do you think people should feel a responsibility to provide for their parents once they start
0:15:36 making money?
0:15:37 I don’t know if they should.
0:15:39 I know I always did.
0:15:42 My dad had such an unhealthy relationship.
0:15:46 My dad loves me more than my sister because I make more money than her.
0:15:50 My dad has such a fucked-up relationship with money.
0:15:55 He grew up in Scotland during the Depression in an era where if you didn’t have money,
0:16:01 you could literally starve, and he just has such an unhealthy relationship to money.
0:16:06 It was always a constant source of stress for him, his approach to it.
0:16:07 It scarred me.
0:16:11 If I can’t pay for everyone when I go out, I won’t go out.
0:16:15 When I was younger, if I couldn’t pay for everybody, not that I was expected to, but
0:16:20 my dad was so cheap that I went the other way.
0:16:24 I just wouldn’t go out unless I felt like I could pay for everybody.
0:16:29 Anyways, that’s a different talk show, but I take care of my dad financially now.
0:16:30 It cost me a shit ton of money.
0:16:36 I spend about, I think about $250,000 or $300,000 post-tax taking care of my father, having
0:16:41 him in a home, having a full-time health aide, helped out my mom, but I was in a position
0:16:43 to, and it felt really nice.
0:16:47 It felt really good to be able to do that.
0:16:53 What I would say is that, hopefully you have siblings, hopefully your parents are economically
0:17:00 responsible and saved enough money, but yeah, I think the definition of family is you take
0:17:07 an emotionally and financially invested, you’re invested in their success and their
0:17:08 well-being.
0:17:15 So, ideally, you and your siblings get together and figure out a way that your parents are
0:17:16 comfortable.
0:17:21 What’s been really wonderful in terms of, for example, with my father’s, there’s different
0:17:22 ways to contribute.
0:17:28 My father’s kind of needed a lot of care or financial care over the last 10 years.
0:17:31 He’s gotten older and divorced for his fourth time.
0:17:37 I have the money to do it, but my sister handles all of the logistics and hiring and firing
0:17:44 of the nurses and negotiating with the facility he’s at, and to be honest, my part’s the
0:17:45 easy part.
0:17:49 I pay for it all because I make more money than my sister, but I see that as the easy
0:17:50 part.
0:17:53 She has to get on the phone with these folks and figure out if they’re going to have a
0:17:56 full-time nurse, what the hours are.
0:17:57 It’s been a great partnership.
0:18:03 I’m really grateful that me and my sister are really aligned around this, but yeah,
0:18:07 every family’s different, but if you’re in a position to help your parents, why wouldn’t
0:18:08 it?
0:18:09 It feels good.
0:18:10 It feels right.
0:18:11 It feels natural.
0:18:12 Do you take care of your sister financially?
0:18:13 No, I don’t take care of her.
0:18:16 Her and her husband are really successful professionally.
0:18:21 What I do is just because it’s fun is occasionally I help out with things like the kids’ school
0:18:24 or something like that, more just because it makes me feel good, but they don’t really
0:18:25 need it.
0:18:31 It’s something I really enjoy and I want a really nice relationship with my niece and
0:18:32 nephew.
0:18:36 I just love the idea of them finding out at some point that I helped out with their school.
0:18:41 I do it just as a means of hoping that it’ll strengthen my relationship with them when
0:18:42 they’re adults.
0:18:47 Do you think people should kind of factor that in when it comes to economic planning?
0:18:54 I mean, you talked about planning with your partner, how much do we intend to make?
0:18:55 What are our goals?
0:18:59 Do you think people should be thinking, and this is how much I want to be providing for
0:19:00 my family?
0:19:04 Is this how much I want to have stowed away to take care of my parents when they’re old,
0:19:05 et cetera?
0:19:09 I think that because at the end of the day, your ability to do that is going to be based
0:19:10 on how much money you have.
0:19:16 I think you should just be focused on what we talk about, the algebra of wealth, finding
0:19:19 something you’re good at, doubling down on it, becoming great at it, which will give you
0:19:23 economic currency in the marketplace, trying to spend less than you make, invest that money,
0:19:27 develop an army of capital you can deploy, recognize time is going to go faster than
0:19:32 you think, and then diversify such that you’re in a position to be generous with your family
0:19:35 and extended family.
0:19:38 You need to affix your own oxygen mass first, and when you’re young, your parents probably
0:19:41 aren’t sick and don’t need help, you don’t have kids to take care of, that’s the time
0:19:48 to develop that savings muscle and that professional currency, and put yourself on a path to financial
0:19:49 security.
0:19:50 Let me flip the question back to you, Ed.
0:19:55 You have parents, you’re making good money, but you’re not wealthy.
0:19:58 What’s your approach and your thinking around helping out your parents and your approach
0:20:00 to saving for that?
0:20:01 Is that something you’re actively thinking about?
0:20:08 Both of my parents are fine, so I’m not worried about them from that aspect, but I think the
0:20:13 thing that you mentioned with your sister, the fact that your sister is doing, yeah,
0:20:17 the hard work, getting on the phone, figuring out where they should be staying, how to take
0:20:23 care of them, those are things that I have been thinking about progressively a little
0:20:24 bit more.
0:20:29 I mean, my grandad is very sick at the moment, I’m about to go visit him this weekend, and
0:20:35 I’ve been seeing this play out in real time of just the responsibility of everyone.
0:20:39 It suddenly kicks in at that point when you suddenly realize that life is fine, and everyone
0:20:46 suddenly gets their act together and starts thinking, okay, how do I pay it back?
0:20:51 I guess I just asked the economic planning question because I’m only just now thinking
0:20:52 of that.
0:20:58 I’m only now seeing it because I see death around the corner, and now I’m thinking, oh,
0:20:59 did I get my act together right now?
0:21:01 I’m not necessarily sure how I can.
0:21:03 When you see your act together, what do you mean?
0:21:08 Do I need to be planning such that I can provide for my parents?
0:21:15 Do I need to be making sure that I’m taking care of them too, which, you know, my parents
0:21:17 have always taken care of me.
0:21:23 So I guess there’s a moment where you start thinking that the script should be flipped.
0:21:27 It feels like for you, when your mom got really sick, that was that moment.
0:21:29 Yeah, and it happened at about exactly your age.
0:21:34 My mom first got diagnosed with cancer when I was exactly your age.
0:21:38 It was a real wake-up call for me because we had economic stress, and I couldn’t take
0:21:42 care of her, and she ended up with shitty healthcare, and it was just, like, usually
0:21:45 emasculating and frustrating and humiliating, quite frankly.
0:21:48 I was in graduate school, and I think I’ve told this story.
0:21:53 She got discharged from the hospital early, having gone through batteries of chemo and
0:21:57 a mastectomy, and she was at home and called me, and I had to rush home, and it was just
0:22:02 such an ugly scene that I walked into, and I started calling around to get a nurse, and
0:22:07 nurses were $35 an hour, and we didn’t have that money, and I just know what to do.
0:22:10 But you’re thinking about it exactly the right way.
0:22:14 You’re thinking, “Ade, you’re just thinking about it, but the way you address that is
0:22:16 that you’re smart, and you’re doing all the right things.
0:22:17 You’re working hard.
0:22:19 I get the sense you’re saving.
0:22:22 You’re trying to invest.
0:22:25 Most people don’t invest at your age, and you’re working hard and trying to establish
0:22:26 professional relevance.”
0:22:32 So, that, quite frankly, with your parents, money kind of solves not all problems, but
0:22:33 most of them.
0:22:37 If you haven’t have money, as long as you have siblings, you have siblings, right?
0:22:38 You have two sisters.
0:22:41 Between the three of you, especially if you have a good relationship with them, and they’re
0:22:46 like-minded and generous around, and feel obligated to pitch in and help with your parents, one
0:22:51 of you might be wealthier than the other two, and be able to help more with money.
0:22:55 One might have a better relationship and be able to spend more time with your parents,
0:22:59 because they just get along with them better or have more time, and one might hopefully
0:23:05 have their shit together logistically, and be able to kind of handle and negotiate stuff.
0:23:09 There’s the money part, but the thing that’s, I think, been rougher than my sister’s had
0:23:14 to deal with is there’s just so many decisions to be made every day, and not only that, sometimes
0:23:17 your parents aren’t cooperating, right?
0:23:21 They don’t want to leave their house and move into an assisted living facility.
0:23:26 My dad starts leaving the facility and taking walks, and no one knows where he is, and I
0:23:31 have to call him and try and get through to him and tell him he’s not allowed to leave
0:23:39 the facility, and meanwhile, he thinks I’m his brother, not his son.
0:23:44 This stuff gets complicated fast, but I literally don’t know what people do that don’t have
0:23:46 a lot of money.
0:23:49 I am spending so much money on my dad right now, and it’s not a lot of money for me, but
0:23:50 it’s real money.
0:23:52 I don’t know what people do that aren’t wealthy.
0:23:53 Or alone.
0:23:58 That’s been my big observation watching my granddad is, “Oh my God, if this guy didn’t
0:24:02 have family, because that’s all you got at the end, it’s not going to be your friends,
0:24:03 it’s going to be your family.”
0:24:08 If he didn’t have family, if he didn’t have children and grandchildren around, it would
0:24:10 be miserable.
0:24:16 I had what I thought was one of the most stark, depressing moments, you know, when my mom
0:24:20 got sick, I was 26, so my life up into that point had mostly, you know, I’d just gotten,
0:24:24 I’ve been in college grad school, so it’s mostly UCLA games, fraternity parties, smoking
0:24:28 too much pot, watching Planet of the Apes over and over, and then all of a sudden my
0:24:31 mom got sick and everything just shook out real.
0:24:35 And I remember my mom had to go into this healthcare facility.
0:24:40 She was too sick to be at home without care, but she wasn’t sick enough to be in the hospital,
0:24:45 and she was with Kaiser, and Kaiser is basically very cost-conscious, so like, you don’t want
0:24:48 her in the hospital, it’s too expensive to keep her in the hospital.
0:24:52 So she went to, I don’t even know what they call it like, this facility.
0:24:56 And it was literally the place where people who have no money and no one who loves them
0:24:57 go.
0:25:01 And I remember walking into her room, and she was in this room with two cots, and there
0:25:07 were these bad springs that squeaked when she sat up and down, and they had these old
0:25:16 Moscow-like arms, metal arms with a TV, and the woman next to her had the TV turned up
0:25:21 so loud because she couldn’t hear it, and she had the arm extended such that this bad,
0:25:26 old ’70s TV, black and white, was literally in front of her face, and she just kept hitting
0:25:30 it, and the whole place stank of urine.
0:25:34 And there were a bunch of people, old people who looked like they were on death’s doorstep,
0:25:39 just sitting asleep, semi-conscious in their wheelchairs in the hallway.
0:25:43 But I remember walking in there and thinking, this is where people in America end up that
0:25:47 don’t have any money and don’t have anyone that loves them, that is still alive.
0:25:54 And it was such like a stark reminder that in America, one, you want to have money, and
0:25:59 two, you really want to invest in relationships such that someone is there to look out for
0:26:00 you.
0:26:02 Do you end up broken alone in America?
0:26:04 God, it’s fucking ugly.
0:26:07 100%.
0:26:17 On that note, ah, there we go, there we go, who’s buying Supreme, and are they overpaying?
0:26:28 Oh my God, broken alone, on today’s, on today’s ROFG markets, what’s it like to be broke with
0:26:29 no one who loves you?
0:26:30 Here’s a message from Betahelp.
0:26:32 Yeah, there you go.
0:26:33 Jesus Christ.
0:26:50 I’m going to leave for a mattress ad right off to this.
0:26:52 Fox Creative.
0:26:55 This is Advertiser content from Zell.
0:27:00 The recruiter said all I needed to do was send $500 to cover mandatory safety training
0:27:03 and the job was mine.
0:27:07 In a world where financial crimes are more and more sophisticated, there’s a team that’s
0:27:08 got your back.
0:27:09 Yee-haw!
0:27:14 Come in, Safe Squad, we got a 10-3.
0:27:17 Copy that dispatch, we’re on it.
0:27:22 Hop in, Skip, we got a phony recruiter.
0:27:24 Safe Squad.
0:27:26 The crime drama everyone is talking about.
0:27:31 I know it’s only my first day, but that sounds like a pretty cut-and-dry job scam.
0:27:33 Strap in, rookie.
0:27:37 These days criminals can even make it look like it’s your bank calm, but that’s where
0:27:38 we come in.
0:27:39 My what?
0:27:41 It’s my savings account.
0:27:42 Compromised.
0:27:43 Uh-huh.
0:27:44 Uh-huh.
0:27:45 No, I won’t hold.
0:27:46 Uh-huh.
0:27:47 Uh-huh.
0:27:50 No, I didn’t authorize a $12,000 withdrawal, that’s my life savings.
0:27:51 Why don’t you come with me?
0:27:54 I’ll show you how to report to the FTC.
0:27:56 What payment platform did you use?
0:27:58 Let’s contact them, too.
0:28:01 Don’t miss the TV event of the season, Safe Squad.
0:28:02 Hey Ace.
0:28:03 Yeah, kid?
0:28:04 You’re right.
0:28:07 That was one hell of a first day.
0:28:11 Learn how you can spot the signs of a scam so you don’t have to call the Safe Squad by
0:28:16 visiting www.vox.com/SafeSquadHQ.
0:28:28 Remember, never send money online to people you don’t already know and trust.
0:28:29 Hey, this is Scott Galloway, host of the PropG podcast.
0:28:33 One of my favorite things I get to do on this show is hear from our listeners and answer
0:28:37 their burning questions about all sorts of things, including work, life, school.
0:28:38 You name it.
0:28:42 And this summer, we’re bringing back the hits and covering some of our favorite questions
0:28:43 and takes.
0:28:47 Talking business, career advice, and even hearing a brand new, never been aired interview
0:28:48 about parenthood.
0:28:52 So tune in to the best of office hours, the special series from the PropG podcast sponsored
0:28:54 by Mint Mobile.
0:29:00 You can find it on the PropG feed wherever you get your podcasts.
0:29:02 You know what’s great about ambition?
0:29:03 You can’t see it.
0:29:07 Some things look ambitious, but looks can be deceiving.
0:29:13 For example, a runner could be training for a marathon or they could be late for the
0:29:14 bus.
0:29:16 You never know.
0:29:21 Ambition is on the inside, so that road trip bucket list, get after it.
0:29:31 Drive your ambition Mitsubishi Motors.
0:29:33 We’re back with PropG Markets.
0:29:35 Do you talk about money with your kids?
0:29:36 A little bit.
0:29:37 Not a lot.
0:29:44 We try to connect money to effort and what’s interesting is they’ve, I think they’ve kind
0:29:45 of figured it out on their own.
0:29:48 I don’t know, I don’t know how professionally confident they’re going to be or how much
0:29:52 money to make, but they’re not crazy spenders.
0:29:55 My older one, it kind of bums me out.
0:29:58 So it’s just the worst fucking thing in the world that they all have this haircut that
0:30:03 makes them look like an alpaca and I literally can’t handle it.
0:30:06 I want to drug them and cut their hair.
0:30:10 You know, my boys are so beautiful, they’re so handsome, and I know exactly the haircut
0:30:15 I want for them and they just, and they show up looking like this.
0:30:20 It’s awful that they look like a farm animal, it’s overgrown hair, it just, anyway.
0:30:25 But my oldest, so I was really excited, my oldest is going back, you know, I want to
0:30:28 take them out and get them some really cool clothes and I’m trying to figure out what the
0:30:29 cool brands are and I’m like, let’s go.
0:30:32 We went to Sunspeal and I’m like, I’ll catch this cool.
0:30:35 And I bought, there was this cool hoodie and it was like two or 300 bucks and he’s like,
0:30:37 I’m not going to spend that much.
0:30:39 I’m like, yeah, you’re not going to spend that much, but I’ll buy it for you.
0:30:41 He’s like, no, no, no, I don’t want you to buy it.
0:30:46 He can’t, he’s like his mom, he doesn’t like to spend money even when it’s my money.
0:30:49 And of course, the other brother pops up and he’s like, I want it, can I have two?
0:30:50 Can I have his?
0:30:53 So somehow they both ended up in different places.
0:30:56 It’s like when Michelle Obama said, the kids just come to you.
0:30:59 You like to think you’re an engineer, you’re not.
0:31:02 And so I’d like to think we’re doing a good job of connecting them to money, but I think
0:31:07 what’s strange is they don’t have a sense for how much money we have.
0:31:10 And what I try to do, I’m thinking about taking them into Africa with Scott Harrison from
0:31:11 Charity Water.
0:31:17 I just need them to see how not most people, but some people live and recognize that a
0:31:23 lot of what their success and privilege is not their fault and that the majority of people
0:31:27 in this world do not get to live like they live.
0:31:31 And I don’t blame them for not understanding that because they’ve been sheltered from it,
0:31:32 but that’s one thing we want to do.
0:31:36 But they’re pretty good around, they’re pretty good.
0:31:40 My youngest, I’m working with my youngest on the sneaker business using AI around went
0:31:44 to bid on drops for shoes and what the resale value is and we’re trying to set up a site
0:31:49 on Shopify, you know, and every week I lose money on it, but he sort of gets it.
0:31:54 He understands, okay, buy a shoe for 200 bucks and try and sell it for 300.
0:31:57 And he’s thinking about what’s the best way to drop ship for the lowest money, but it
0:32:01 has good customer service because he wants to get good reviews.
0:32:02 So that’s great.
0:32:03 He’s going to be more of the entrepreneur.
0:32:06 I think my older one is much more conservative, doesn’t like to spend money.
0:32:10 I think he’ll end up being a professional, but we don’t talk, like I’ve never told them
0:32:14 how much money we have or anything like that or, but so far, I’ve been really lucky.
0:32:19 They’re not, I mean, granted, they’re just about to turn 14 and 17, so they’re not crazy
0:32:20 spenders.
0:32:21 They just don’t spend a lot.
0:32:22 Do they know you’re rich?
0:32:23 Yeah.
0:32:24 There’s no way not to figure it out.
0:32:32 I mean, we fly private, you know, they don’t, words out, words out that we have money.
0:32:33 And they’re kind of fascinated.
0:32:34 My youngest is fascinated by money.
0:32:38 We went to the finals in the world, you know, the finals of the Euros and he said, how much
0:32:39 were these tickets?
0:32:40 I’m like, I’m not going to tell you.
0:32:43 And he’s like, do you like wants to know and he’s looking at my phone and he wants to
0:32:46 know how much the tickets were and that’s an interesting one.
0:32:51 Like, why do you not want to tell them how rich you, I mean, they know that you’re rich
0:32:56 but you don’t want them to know how rich and you don’t want, really want to put a number
0:32:57 on it.
0:32:58 What’s your philosophy there?
0:33:03 It just feels weird to tell my son, yeah, I’m spending 10,000 pounds on a soccer game.
0:33:05 So we can go.
0:33:10 I feel like that’s going to disconnect them from the value of money at that age.
0:33:12 So how do you teach them the value?
0:33:15 I mean, the Africa idea is one.
0:33:20 Is there anything else you do to kind of be like, hey, this isn’t normal?
0:33:21 It’s weird.
0:33:24 They sort of made the connection a little bit on their own because I don’t think it’s
0:33:26 been great parenting.
0:33:29 I had this really wonderful moment with my youngest.
0:33:34 He has a friend from school who doesn’t have a lot of money and his friend accidentally
0:33:39 poured milk or spilled milk on his headphones and they were ruined.
0:33:46 And so he came to me and he said, dad, I want to buy my friend a pair of the AirPod Max’s
0:33:51 that big cans to go over your ears and he said, if I put in a hundred bucks, will you
0:33:52 give me $200?
0:33:55 He’s a super nice kid and he doesn’t have a lot of money and I was just like, I was
0:33:59 just so moved by that and I thought that’s exactly the kind of approach to money I want
0:34:00 my kids to have.
0:34:04 And I said, of course, and any time you want to get money away or do something for someone
0:34:07 else, I’ll contribute.
0:34:09 That was really nice.
0:34:12 But I don’t know where they learned it, didn’t learn it from me.
0:34:13 I don’t think.
0:34:14 I don’t know.
0:34:16 So, I mean, here’s the thing, Ed.
0:34:22 You do your best, but parents are under the delusion that we’re engineers.
0:34:23 We’re shepherds.
0:34:26 We get to choose where the sheep grazes with the food it eats.
0:34:32 Maybe we can point it in the right direction, but be clear, the sheep comes to you.
0:34:36 And I think I hope what they see is that their mom works hard and is really responsible
0:34:42 with money that I work hard and they see how committed we are to our professions.
0:34:47 They see that we’re generous with our money, so I hope that they inherit that.
0:34:48 And they also see that we enjoy it.
0:34:49 I hope they inherit that.
0:34:51 I hope my oldest starts spending.
0:34:56 I’m worried my oldest isn’t going to want to spend any money and not enjoy it.
0:35:01 But I would say we’re just kind of letting it happen, which may not be the right approach.
0:35:04 My kids talk a lot or ask a lot of questions now about money.
0:35:06 They’re very interested in it, especially my youngest.
0:35:09 He asks about stocks, how stock prices are decided.
0:35:12 Yeah, I mean, their dad just wrote a book called The Algebra of Wealth.
0:35:13 I’d be shocked if they didn’t.
0:35:15 Dude, they don’t care what their dad does.
0:35:20 They literally, every time someone stops me on the street, they’re like, “Why do they
0:35:22 know you again?”
0:35:28 They are so befuddled that anyone would find me interesting at all.
0:35:29 They’re like, “What?
0:35:31 Why did this person say hi to you?
0:35:33 What do you do again?”
0:35:34 They just don’t get it.
0:35:40 By the way, the opening note of that book is a message to them, and you say, “I hope
0:35:41 you’ll read this.”
0:35:42 You think they’ll ever read it?
0:35:43 Oh, yeah.
0:35:46 When I’m gone, maybe hopefully before I’m gone, but definitely when I’m gone, I can’t
0:35:51 imagine, I’ve invested, I’d like to think so much time and love in my kids that they’re
0:35:57 going to love me, you’re banking on, you’re going to get a fraction of that back.
0:36:00 And I’d like to think they’ll be interested enough of me to read my books.
0:36:04 Let me just say, I’d be really disappointed if they didn’t at some point.
0:36:05 They will.
0:36:08 They’re going to be curious, so yeah, I think so.
0:36:09 I think it’s gross.
0:36:10 I hope so at least.
0:36:14 Have you thought more about estate planning and inheritance?
0:36:19 Yeah, I think about it a lot because now that we have real money, you have to think about
0:36:20 it and be smart about it.
0:36:22 So we work with our folks.
0:36:23 Goldman manages our money.
0:36:25 I have a lawyer, I have a tax lawyer, and they set up a trust.
0:36:30 We’re trying to figure out what to put into the trust, how to take advantage of the limits
0:36:34 on trust, figure out if Biden is going to lower the trust limit.
0:36:35 There’s all this…
0:36:36 It’s a lot of tax planning.
0:36:40 The tax code is so complicated that, and this is an advantage for wealthy people because
0:36:44 you can kind of weaponize and maneuver through it if you’re smart.
0:36:48 You want to run boat races at night if you have GPS.
0:36:52 And so the more complicated you make the race, the more advantage sheets to people who can
0:36:57 afford the technology, in this case, the advisors to help you navigate a boat race at night.
0:36:59 But yeah, I think a lot about the trust.
0:37:05 I also think about my partner is 15 years younger than me, and women usually live seven
0:37:06 years longer.
0:37:08 So she’s going to be around about 22 years longer.
0:37:13 But now I’m trying to set up, what I am thinking about is putting stuff in assets that will…
0:37:17 Like apartments, rental apartments that will spin off income because I’m turning into that.
0:37:21 I hate to say that, person thinking about…
0:37:26 So my kids have enough money that they’re never broke, and my kid isn’t going to come
0:37:28 run property media.
0:37:32 My kid isn’t going to take one of my analytics companies and be the CEO there.
0:37:36 But maybe if one of my kids doesn’t have their own professional trajectory, I like the idea
0:37:39 that maybe they could manage some apartment buildings, and that’s probably the wrong way
0:37:40 to think about it.
0:37:43 But I am thinking about intergenerational wealth.
0:37:48 But more than anything, what I’m spending the most time on is just making sure that my partner
0:37:50 is really comfortable after I’m gone.
0:37:54 This is kind of a turnaround from what you’ve said in the post, which is, I think you’ve
0:37:58 said you don’t want to leave anything to your kids.
0:38:03 Well, that’s mostly joking to justify my out-of-control spending.
0:38:04 Buffets summarize it perfectly.
0:38:07 I want my kids to have enough money so they can do anything, but not enough money so they
0:38:09 can do nothing.
0:38:11 So I’ll set up a trust for them.
0:38:14 My partner, assuming she lives a quarter century longer than me, is going to have to figure
0:38:15 it out.
0:38:19 But I’m putting in place the mechanics of it such that after she’s gone, they’ll get
0:38:23 some money when they turn 21, we’re going to give most of it away, but we’ll leave enough
0:38:27 for them such that they can afford a house, any education they want, and maybe a little
0:38:35 bit more, and have access to a little of it at 25, 35, and then access to all of it.
0:38:37 But I think about this a lot.
0:38:42 It’s a huge issue for wealthy people because you don’t want indulgent jerks.
0:38:47 And also a huge motivator for me was the fear of if I didn’t make money, I wasn’t going
0:38:48 to have any.
0:38:50 That’s incredibly motivating.
0:38:55 When you worry about taking away that motivation, but I’m not one of those people, it’s really
0:39:00 easy to say, “Yeah, once they’re through college, that’s it, they’re on their own.”
0:39:02 Yeah, I never find any parent does that.
0:39:07 None of my friends have done that, have cut off their kids, none of them.
0:39:09 I have really good friends.
0:39:13 My really good friends, Greg and Cindy, have done a really good job of kind of maturing
0:39:18 really competent, self-sufficient adults.
0:39:21 They’ve been pretty disciplined about saying, “Okay, you get a certain amount of money
0:39:25 and help you go to college and you get a certain kind of allowance, but at some point, you’re
0:39:26 on your own.”
0:39:28 I don’t know if I’ll have that discipline.
0:39:29 I don’t know.
0:39:31 I haven’t fully figured it out yet.
0:39:33 We’ll just end with this last question.
0:39:40 If there’s one thing you want your children to understand about money once you die, what
0:39:41 would it be?
0:39:44 It’s really important, but it’s a means.
0:39:48 It’s meaningful, but what’s profound is that money is nothing but something that should
0:39:54 enable you to have an absence of stress such you can focus on relationships, that you need
0:39:57 to be professionally competent, you need to be self-sufficient.
0:40:03 Making money is a lot of fun, but it’s just a means to the ends, and the ends is deep
0:40:07 and meaningful relationships, and that money can be a lubricant for that and provide an
0:40:12 absence of stress and a series of experiences that make you feel closer to the people you
0:40:16 love and help you take care of them.
0:40:20 This episode was produced by Claire Miller and engineered by Benjamin Spencer.
0:40:22 Our associate producer is Alison Weiss.
0:40:24 Our executive producer is Katherine Dillon.
0:40:28 Mia Silverio is our research lead and Drew Burroughs is our technical director.
0:40:31 Thank you for listening to Proffdue Markets from the Vox Media Podcast Network.
0:40:33 We’ll be back with a fresh take on markets on Thursday.
0:40:43 [MUSIC]
0:40:53 .
0:41:07 Hey, this is Scott.
0:41:15 Hey, this is Scott Galloway, host of the Proffdue Podcast.
0:41:20 One of my favorite things I get to do on this show is hear from our listeners and answer
0:41:24 their burning questions about all sorts of things, including work, life, school.
0:41:25 You name it.
0:41:28 And this summer, we’re bringing back the hits and covering some of our favorite questions
0:41:29 and takes.
0:41:33 We’re talking business, career advice, and even hearing a brand new, never been aired
0:41:35 interview about parenthood.
0:41:39 Retune into the best of office hours with a special series from the Proffdue Podcast
0:41:41 sponsored by Mint Mobile.
0:41:44 You can find it on the Proffdue feed wherever you get your podcasts.
0:41:47 (upbeat music)

0:00:03 You know what’s great about ambition?
0:00:03 You can’t see it.
0:00:06 Some things look ambitious,
0:00:07 but looks can be deceiving.
0:00:12 For example, a runner could be training for a marathon,
0:00:14 or they could be late for the bus.
0:00:15 You never know.
0:00:18 Ambition is on the inside,
0:00:20 so that goal to be the ultimate soccer parent?
0:00:22 Keep chasing it.
0:00:24 Drive your ambition.
0:00:25 Mitsubishi Motors
0:00:30 This episode is brought to you by Secret.
0:00:34 Secret deodorant gives you 72 hours of clinically proven odor protection,
0:00:38 free of aluminum, parabens, dyes, talc, and baking soda.
0:00:41 It’s made with pH-balancing minerals
0:00:43 and crafted with skin-conditioning oils.
0:00:46 So whether you’re going for a run or just running late,
0:00:50 do what life throws your way, and smell like you didn’t.
0:00:54 Find Secret at your nearest Walmart or Shoppers Drug Mart today.
0:01:00 This is No Mercy, No Malice.
0:01:02 After hearing this,
0:01:06 many listeners will accuse me of Trump derangement syndrome, TDS.
0:01:09 I believe I suffer from a different ailment,
0:01:16 DAS, Democracy Addiction Syndrome, and daddy needs his fix.
0:01:20 Today’s post is an updated version of one written a year ago.
0:01:24 While things have changed, a lot, since last August,
0:01:28 my argument not only holds up, it’s gotten stronger.
0:01:34 Art of the Plea Deal, as read by George Hahn.
0:01:42 It’s increasingly likely Trump will exit the presidential race
0:01:46 in exchange for an omnibus deal across jurisdictions
0:01:48 that keeps him out of jail.
0:01:51 The rise of Kamala Harris,
0:01:56 and the growing probability that the former president will lose in November
0:01:59 make the logic colder and more compelling.
0:02:05 Opinion polls show Harris ahead of or tied with Trump
0:02:07 in six of the seven critical swing states.
0:02:12 She’s beating him, for instance, in North Carolina,
0:02:14 which he just barely won in 2020,
0:02:18 and where Biden had been struggling even before the debate disaster.
0:02:24 It’s not the poll numbers themselves, which are all within the margin of error,
0:02:28 but the Harris Wall’s tickets momentum going into the DNC,
0:02:32 which historically provides a four to six point polling bump.
0:02:38 By the end of the month, Harris could have a high single digit edge
0:02:40 with nine weeks until election day.
0:02:44 This is similar to the margin that compelled Nancy Pelosi
0:02:49 to march up to the West Wing until President Biden to sign his resignation.
0:02:52 With his pen or his blood.
0:02:58 This May, Trump was convicted of 34 counts of fraud
0:03:01 by a New York jury in the Stormy Daniels case.
0:03:04 The weakest case against him.
0:03:07 Sentencing has been held up while he appeals,
0:03:12 and it’s unlikely he’ll see any jail time as a first time nonviolent offender.
0:03:16 The other cases, federal trials involving January 6th
0:03:19 and the allegedly illegal possession of classified documents,
0:03:24 and the Georgia case about trying to overturn the 2020 results there,
0:03:25 are different stories.
0:03:30 They’re much stronger, but have been delayed by Trump’s appeals
0:03:33 and moves to get judges and prosecutors replaced.
0:03:36 None of them will come to trial before the election,
0:03:38 and if he wins, they probably never will.
0:03:42 If he loses, though, he will face trial
0:03:46 and the real possibility of conviction and incarceration.
0:03:53 It’ll take time, but the gears of accountability and justice grind forward.
0:04:00 Harris has revitalized her party with a campaign that emphasizes youth,
0:04:02 optimism, and hope for the future.
0:04:07 She’s done this by saying, wait for it, nothing.
0:04:14 Trump has done her job for her as she continues his grievance/rage tour.
0:04:19 The age issue has turned from a bug into a feature for the Democrats.
0:04:24 The earth has shifted under Trump, and he’s stumbling.
0:04:29 Recent better inflation numbers and the likelihood of a Fed rate cut soon
0:04:31 will help Harris, too.
0:04:36 Also, somebody forgot to tell Trump he’s no longer running against Biden.
0:04:42 He’s ranting that the guy who dropped out weeks ago is “close to vegetable state”
0:04:47 and hallucinating scenarios in which Biden still gets the Democratic nomination.
0:04:52 If “get off my lawn” were an LLM, it would be the Trump campaign.
0:04:58 President Trump is an obese 78-year-old male.
0:05:04 The average 80-year-old has a life expectancy of another 8 years.
0:05:10 Trump’s obesity and prison would probably cut that in half,
0:05:15 meaning any sentence greater than 48 months is a life sentence.
0:05:21 Incarceration, balanced against a life post-deal of golf clubs,
0:05:27 sycophants, and porn stars, should weigh heavily on even the most delusional psyche.
0:05:31 How serious is the threat of prison?
0:05:34 Federal prosecutors rarely lose.
0:05:42 In 2021, 94% of defendants charged with a federal felony were convicted.
0:05:46 State and local prosecutors convict at high rates as well.
0:05:52 The Atlanta office, which indicted Trump, boasts a 90% conviction rate.
0:05:59 Of those convicted by the feds, 74% received prison time.
0:06:05 In cases from mishandling national security documents specifically,
0:06:09 the DOJ regularly obtains multi-year sentences.
0:06:15 And the documents case against the former president is notable for the weight of the evidence,
0:06:20 including audio of him sharing military secrets he admits weren’t declassified,
0:06:25 the sensitivity of the papers, and his blatant obstruction.
0:06:31 Offenses the DOJ and courts take very seriously.
0:06:36 It’s not any one case that cements Trump’s fate,
0:06:41 but the compounding risk of his several indictments.
0:06:47 Generally, defendants have a three-in-ten chance of escaping an indictment without prison.
0:06:54 A 30% chance of prevailing four times in a row is just under one percent.
0:06:58 That’s a one percent chance of not going to prison.
0:07:05 Okay, but Trump is not a typical defendant, and no case against him will be straightforward.
0:07:12 He has unlimited resources and can deploy the full apparatus of a billionaire’s legal defense.
0:07:19 In addition, there is a non-zero probability any jury will have a Trumper who refuses to convict.
0:07:26 Also, prosecuting each case presents obstacles, not least of which is the Supreme Court decision,
0:07:29 granting Trump immunity for official actions as president.
0:07:36 So let’s improve his odds of exoneration from three-in-ten to eight-in-ten.
0:07:43 Only a 20% chance in each case that he’s convicted and sent to prison.
0:07:54 The math is still ugly. 0.8 to the fourth power equals 0.41,
0:08:03 which means Trump has only a 41% chance of escaping prison, even when given exceptional odds.
0:08:08 The most favorable math still lands him in prison.
0:08:16 There are two get-out-of-jail cards. One, he retakes the White House,
0:08:20 or two, he, see-above, reaches a plea deal.
0:08:28 The prison vaccine is Trump winning the presidency, or another GOP candidate winning and pardoning him.
0:08:35 That resolves the federal charges, the greatest threats, and Trump likely believes he or some
0:08:42 other Republican president could shut down the remaining prosecutions. Note, if he were totally
0:08:47 focused on staying out of prison, he’d find a way to draft Nikki Haley to take his spot at the
0:08:54 top of the ticket. I believe she’d win, cause played Gerald Ford and pardon Trump. Think about it.
0:09:03 90% of the states are foregone conclusions. Pundits agree that only a handful of states will
0:09:11 matter. Harris only needs to win three of these states to take the White House, Michigan, Pennsylvania,
0:09:20 and Wisconsin. And the odds are looking good. Great, even. Biden won all three in 2020. Plus,
0:09:27 there’s the Sun Belt in North Carolina, where Harris is now ahead, reflects how change hasn’t
0:09:36 been good for Trump. He won the state in 2020 by 1.3%, but it’s in transition, a microcosm of
0:09:43 the broader challenge the GOP faces. Its base is older and whiter, and that population is giving
0:09:51 way to a younger, more diverse, better educated electorate. More likely to vote blue. Nationwide,
0:09:58 since Trump won the White House in 2016, 32 million young people have become eligible to vote,
0:10:04 and 20 million elderly voters have died, a swing of as much as 52 million voters.
0:10:10 These younger citizens vote in greater numbers than previous younger generations,
0:10:18 and they show no signs of becoming more conservative as they age. This will be the Gen Z, or Gen Zoom,
0:10:27 election. The closer we get to a Trump loss in 2024, the more his currency for a plea deal
0:10:34 diminishes. A loss would cement the notion that he has cost the party too much for too long.
0:10:41 Traditional Republican leaders are jonesing to see the back of Trump, and his acolytes now have
0:10:48 power bases of their own. Fox will abandon him. The cloud cover provided by Lindsey Graham,
0:10:55 Sean Hannity, and other sycophants will disappear, and the pool of jurors who’d refuse to convict
0:11:01 will shrink. He’ll also lose access to any backroom influence his political allies might
0:11:08 bring to bear on the DOJ or state and local prosecutorial offices. Trump won’t like making
0:11:15 the deal, but the decision will be easier than many people think. He has no observable ideological
0:11:22 commitment or loyalty to the Republican Party. In the 2022 midterms, Trump amassed a war chest
0:11:35 of $108 million and gave zero to GOP candidates. And he gives up all the time. His track record
0:11:42 is quitting. From his six bankruptcies, including the Trump Taj Mahal Casino, to his innumerable
0:11:48 abandoned projects, such as his defunct New Jersey General’s football team and the disgraced
0:11:55 education for-profit Trump University. And people who know him, including his former chief of staff
0:12:02 John Kelly and his former footstool Chris Christie, say he has a real fear of going to jail.
0:12:11 In some, Trump’s odds of landing in prison are perhaps 50/50 right now and likely to get worse
0:12:19 as we approach the election. Is there a deal to be had? It wouldn’t be easy, but the array of
0:12:23 prosecutors could work together to strike an agreement, for their own sake and the good of
0:12:30 the nation. A coordinated negotiation would be complex, but nothing precludes the effort.
0:12:38 The alternative is worse. Trials would be circuses, convictions would be subject to years of appeals,
0:12:45 and any ultimate incarceration would be a logistical nightmare. And when we step
0:12:52 back from the details of these cases, what should the US be seeking? Is it accountability?
0:13:00 Or for the nation to move on? The answer is yes, and a plea deal achieves this.
0:13:08 There’s a broader lesson here. Our successes and failures are not a function of probability,
0:13:17 but patterns. Our actions, like interest, compound. A single-kind act may go unnoticed,
0:13:25 but kindness fosters enduring relationships and goodwill. Criminal acts may or may not
0:13:33 may or may not result in punishment, but criminality screams for justice’s attention,
0:13:39 and justice, while slow to act, is always listening.
0:13:45 Life is so rich.
0:13:55 [Music]

0:00:02 (upbeat music)
0:00:05 Support for this special series comes from Mint Mobile.
0:00:06 You already know Scott Galloway
0:00:09 is an authority in business, career, and wealth management.
0:00:12 I mean, you’re listening to this show, aren’t you?
0:00:15 ProfG has the resume, the accolades, and the audience.
0:00:19 But sometimes, good advice comes from surprising places.
0:00:21 Like Mint Mobile, the cell phone provider
0:00:24 that can help you stop wasting buckets of money every month.
0:00:28 Head to mintmobile.com/profg to learn more
0:00:29 and stick around for advice
0:00:32 from another unexpected expert later on in the show.
0:00:35 (upbeat music)
0:00:36 – Welcome to the second episode
0:00:38 of the ProfG Pod special series
0:00:41 featuring some of our favorite Office Hours moments.
0:00:42 In last week’s episode,
0:00:44 we featured Office Hours’ best of business
0:00:46 and answered your questions surrounding the brand era,
0:00:49 big tech companies, and their ethical responsibility.
0:00:51 And when a founder CEO should step down.
0:00:54 – Advertising is a weird industry.
0:00:56 It’s always like one and a half percent of GDP.
0:00:58 It doesn’t go below that, it doesn’t go above it.
0:01:00 So this is not a growth industry,
0:01:01 but you have some companies
0:01:04 that are going 20 and 25% a year,
0:01:06 which means they are sucking the oxygen out of the room
0:01:08 for the other folks.
0:01:11 Corporate America, these are platforms for making profits.
0:01:12 And at the end of the day,
0:01:14 they are going to do whatever increases their profits,
0:01:17 full stop, that’s just what they do.
0:01:20 You should assume if you’re the CEO, you are not Bill Gates.
0:01:23 You should assume you are not Steve Jobs.
0:01:25 – Today, you’ll hear best of career advice,
0:01:27 including how to ask for a promotion at work,
0:01:29 when and if you should ditch your full-time job
0:01:33 for your side hustle and when to quit your job entirely.
0:01:36 So with that, first question.
0:01:37 – Hi, Pravji.
0:01:39 Now let me introduce myself.
0:01:43 My name is Kareem and I am from Toronto, Canada.
0:01:46 I work in a marketing team at a pharmaceutical company
0:01:49 and I’ve been enjoying what I do.
0:01:52 I’ve had a very exciting journey
0:01:55 to get to where I am right now.
0:01:59 And I’ve been in my current role for about a year
0:02:03 and I’ve had something in my mind for the past few months,
0:02:05 which brings me to a big question.
0:02:07 Is it the right time for me to ask
0:02:11 or maybe even bring up the topic
0:02:14 of possibly getting a raise or a promotion?
0:02:17 I’ve been thinking about this for a long time
0:02:20 and I can’t help but wonder whether it should be me
0:02:23 to bring it up or should I just hang in tight
0:02:28 until they share with me the good news.
0:02:30 Thank you so much for all what you do
0:02:34 and I’m looking forward to hearing your thoughts.
0:02:36 – Kareem from Toronto, thanks for the question
0:02:38 and congrats on living in such a wonderful city.
0:02:42 So it’s unusual and not a great indicator
0:02:44 or a great reflection on your company
0:02:48 that you don’t know when they announce promotions
0:02:49 and raises ’cause most firms,
0:02:51 once they get beyond a certain size,
0:02:55 say at the end of the year or in June of every year,
0:02:58 we sit people down and we talk about compensation,
0:03:02 which is usually bonuses, salary increases or promotions
0:03:04 and or none of the above, right?
0:03:06 And do a review all at the same time.
0:03:10 This is a big part of what I’ve done at all my companies.
0:03:12 I’m when someone does something especially good
0:03:15 or not so great, I do an email to the file
0:03:17 about this person at the end of the year,
0:03:19 I try to be very thoughtful about their compensation,
0:03:21 their role, their title, all that good stuff.
0:03:24 And if anybody comes to me off cycle
0:03:26 and asks for a raise or a promotion,
0:03:27 I say we don’t do that.
0:03:30 There’s only one time during the year we consider this
0:03:33 and that is in December.
0:03:36 And the fact that you don’t know when that time is
0:03:37 is sort of strange.
0:03:40 Now, what I would suggest is the following,
0:03:42 is that you find out when and where you hear
0:03:45 about compensation and salary increases
0:03:48 and that you establish a relationship with a mentor
0:03:49 or your boss such that it’s informal enough
0:03:52 such you could say, you know, which should my,
0:03:53 you can ask very straightforward,
0:03:56 which my expectations be around a bonus
0:03:58 or how are bonuses evaluated?
0:04:00 What about promotions?
0:04:02 You know, you should just have more insight.
0:04:05 And I think it’s okay to take your boss
0:04:08 or a mentor to launch and say, I would like to be promoted
0:04:11 and I’d love your advice on what I need to do
0:04:13 to increase the likelihood I get promoted.
0:04:15 I think that people like ambitious people.
0:04:18 – Yeah, it depends if you can kind of read the tea leaves
0:04:19 is the company growing quickly.
0:04:20 Are you well like there?
0:04:22 Are you generating revenue?
0:04:25 A manager’s job is to manage expectations
0:04:27 and then ideally if they can,
0:04:29 I don’t want to say exceed those expectations.
0:04:32 I always worked for growth firms.
0:04:33 A few of those firms are done really well.
0:04:35 So we were in a position to kind of surprise
0:04:36 into live people.
0:04:38 Sometimes in a big company, it’s not growing that fast.
0:04:41 So it just isn’t, if the company’s only growing 2% a year,
0:04:44 it’s hard for them to give out 4% raises even
0:04:45 because that means they’re going to have to reduce
0:04:47 their profits or if their profits themselves
0:04:50 aren’t growing faster than 4% a year.
0:04:52 Well, you don’t want to do a set up a when lose situation
0:04:53 where they’re looking for excuses
0:04:56 not to give you a raise or a salary.
0:05:00 So it’s be a good citizen.
0:05:02 Don’t bring it up more than once a year.
0:05:04 Be grateful, don’t be bummed out.
0:05:06 And if you really think they’re screwing you over,
0:05:08 start looking for another job.
0:05:10 But I find as someone who manages a lot of people’s
0:05:13 expectations when they’re constantly pushing me
0:05:15 for raises and promotions,
0:05:18 I find that I naturally want to not do it.
0:05:20 That I have a gag reflex on it
0:05:22 and there’s certain people in my organization
0:05:23 that just work really hard
0:05:24 and I want to surprise and delight them.
0:05:26 Some people would argue it’s the squeaky wheel
0:05:28 that gets the grease.
0:05:30 That has not been my experience.
0:05:32 But boss, you need a mentor here
0:05:34 or a relationship with your boss
0:05:35 so she can start having these conversations
0:05:39 and find out when is the compensation window
0:05:42 and get advice on what you should be doing
0:05:43 to reach your goals.
0:05:44 Thanks for the question.
0:05:46 Question number two.
0:05:48 – Hey, Scott, Ryan from Philadelphia here.
0:05:49 Love the podcast.
0:05:52 Spotify told me I was in the top 2% of your listeners.
0:05:54 So objectively, I’m one of your biggest fans.
0:05:55 Here’s the question.
0:05:57 I’ve been working at a large consulting firm
0:06:00 in cybersecurity for the past 10 plus years,
0:06:03 while also leading and running multiple tech startups,
0:06:05 some of them more successful than others,
0:06:07 but obviously they’re still a side hustle.
0:06:09 As they apply to new roles within my organization
0:06:10 and even outside,
0:06:13 I’m torn whether I highlight those experiences
0:06:15 and startups or not.
0:06:18 Will it hurt me or will make my chances stronger?
0:06:22 – Ryan from Philadelphia, 2% bitch, commit.
0:06:24 Why are you in the top 1% to resist this feudal
0:06:26 given to the dog?
0:06:29 That’s right, be a 1%er.
0:06:30 – That’s a scary thought.
0:06:32 Anyways, thanks for your listenership.
0:06:35 Let’s talk a little bit about Philadelphia.
0:06:37 I had never really spent any time in Philadelphia
0:06:39 and then I went on the board of Urban Outfitters,
0:06:40 a very interesting.
0:06:44 Two of the top brands, according to millennials,
0:06:46 are Urban Outfitters and Free People,
0:06:48 both owned by Urban Outfitters.
0:06:49 Think about that.
0:06:52 One company owns two of the 10 hops brands among millennials.
0:06:55 Also, they have the coolest HQ of any company
0:06:56 I’ve ever been to.
0:06:58 They took over the Navy Yard
0:07:01 or they have their HQ at the Navy Yard in Philadelphia.
0:07:02 So you’ll be in a conference room
0:07:04 talking about quarterly financials
0:07:06 and you’ll see this old aircraft carrier
0:07:08 bobbing up and down.
0:07:11 Anyway, smart people really enjoyed my four years there.
0:07:12 I would not describe Philadelphia
0:07:13 as kind of the old Navy of cities,
0:07:15 sort of 60 or 80% of New York
0:07:17 for 40 to 60% of the price.
0:07:18 Seemed like a good quality of life
0:07:19 at a lower cost of living.
0:07:21 Anyways, Philadelphia, there you go.
0:07:23 Okay, what was your question?
0:07:24 Oh, whether or not you,
0:07:27 when applying for internal roles,
0:07:29 talk about your side hustles.
0:07:30 This is situational.
0:07:34 I can only tell you how I would respond.
0:07:37 And that is as your boss, I don’t think I’d respond well.
0:07:39 And I’d be like, Ryan, if you want a promotion,
0:07:43 here’s an idea, focus on this fucking job boss.
0:07:48 So I can tell you that I get having side hustles.
0:07:51 Actually, I don’t get having side hustles.
0:07:52 Let me cut to the chase, Ryan.
0:07:56 I think your side hustle needs to be your main hustle.
0:07:58 I think you need to have one hustle.
0:08:00 So do the hustle, but do one fucking hustle.
0:08:02 And that is if you want economic security,
0:08:05 find something that satisfies you to the extent
0:08:07 that you don’t feel the need to do a side hustle
0:08:09 and go all in on it.
0:08:12 I mean, the idea, I think the reason I’m,
0:08:15 one of the reasons I’m economically secure,
0:08:17 probably the primary reason I’m economically secure
0:08:19 is I was born in the right place at the right time.
0:08:21 But in terms of my economic security
0:08:24 coming from my professional success, it was focus.
0:08:26 And that is I went all in, Ryan.
0:08:27 I went all in.
0:08:30 I was in the office on weekends,
0:08:32 returning emails immediately.
0:08:34 If you’re at a small organization or a place
0:08:36 where people are looking to develop economic security,
0:08:38 the way you develop economic security
0:08:41 is by garnering an unfair share of that market
0:08:45 and getting more economic currency than your peer group.
0:08:47 I mean, the average wage globally
0:08:48 is I think about $18,000 a year.
0:08:51 So if you want more than that, you gotta be in an economy
0:08:53 and you gotta bring more productivity.
0:08:56 And part of that is just pure elbow grease and focus.
0:08:59 So I’ve never understood the idea of a side hustle.
0:09:00 I get it if you’re at a big company
0:09:03 and they’re paying you well and you wanna stay there,
0:09:06 but okay, if you’re gonna have a side hustle,
0:09:09 have it for a while and then it either takes off
0:09:10 and you go all in on it or give it up
0:09:12 and go all in on your company.
0:09:14 Because my guess is the fastest blue line path
0:09:16 economic security, your current job,
0:09:19 would be to be great at it or specifically great er
0:09:20 as in focus more on it.
0:09:23 So my advice to anybody who has a side hustle
0:09:25 is if, let’s put a time limit on it.
0:09:27 And if the side hustle begins to grow,
0:09:31 then quit your current job and go all in on your side hustle.
0:09:32 But the way to economic security,
0:09:33 the way to success,
0:09:36 the way to professional currency in my view
0:09:39 is 110% focus on one thing.
0:09:40 Thanks for the question.
0:09:43 We have one quick break before our final question.
0:09:44 Stay with us.
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0:10:28 I cracked down on my spending
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0:10:33 My investments and my retirement.
0:10:35 Now not only are my friends jealous
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0:10:39 I mean, who wouldn’t be?
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0:10:46 My finances are positively boring, darlings.
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0:10:52 Only a small-minded person would look at me
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0:11:43 – Well, the first time I saw a Bengal cat was in 1991.
0:11:46 In that moment, I knew my life’s work would be to bring
0:11:50 more of these exquisite creatures into the world.
0:11:52 I’ve been breeding Bengal cats ever since.
0:11:58 Now it’s not easy or cheap.
0:12:01 I feed them all a strict raw food diet,
0:12:04 plus with a veterinarian and an endless array
0:12:06 of toys and activities.
0:12:09 I had to embrace personal financial responsibility
0:12:11 to make it all work.
0:12:14 I cracked down on my spending and got smart
0:12:17 about my savings, my investments, and my retirement.
0:12:20 Now not only are my friends jealous
0:12:24 of my cat lady lifestyle, I mean, who wouldn’t be?
0:12:25 They’re jealous of my checkbook.
0:12:31 – My finances are positively boring, darlings.
0:12:34 – Anyone can be an expert, even those you least expect.
0:12:37 – Only a small-minded person would look at me
0:12:42 and think, “Crazy cat lady, I’m not crazy, I’m fabulous.”
0:12:44 – And fabulously wealthy.
0:12:48 – At Mint Mobile, we’re experts in affordable phone plans
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0:13:19 – Welcome back, question number three.
0:13:21 – Hey Scott, love the show and appreciate all the help
0:13:23 and guidance you bestow upon the masses.
0:13:25 My name’s Robert, I’m 30 and living in Los Angeles
0:13:27 and I’ve been working in investment banking
0:13:29 since leaving grad school, about 10 years.
0:13:31 Thus far, I’ve made a good living with this career,
0:13:33 but as of late, gotten to the point in complete disillusionment
0:13:35 with where the field ultimately takes you.
0:13:38 Among the many red flags, most of the higher-ups
0:13:40 of the firm were alcoholics and/or divorced
0:13:43 and seem to just be supporting an expensive lavish lifestyle
0:13:45 without size pay.
0:13:47 While I understand this is a privileged problem,
0:13:49 I’m about to cut the cord and quit in your future.
0:13:51 I envision my next chapter being one to two years
0:13:53 playing a tourist visa game,
0:13:54 working odd jobs around the world
0:13:57 and figuring out my next chapter in life is gonna be.
0:14:00 While I have enough save to support many months on the road,
0:14:01 I do plan to look for professional
0:14:04 and investment opportunities throughout the Odyssey.
0:14:07 Any advice you’d send my way prior to embarking?
0:14:10 – First off, I feel you.
0:14:13 Jobs typically bifurcate into one of two things.
0:14:15 They’re either very stressful,
0:14:17 but very interesting and rewarding,
0:14:20 or they’re very, very non-stressful but boarding
0:14:21 and not that intellectually stimulating.
0:14:25 I found investment banking to be this unique combination
0:14:27 of an incredibly boring subject matter
0:14:30 with a shit ton of pressure placed on it.
0:14:32 And I spent a lot of my life at the printer.
0:14:36 We actually printed prospectuses or S1s for public offerings
0:14:40 and my job was to go through this fucking prospectus,
0:14:42 this 80-page prospectus,
0:14:45 read it frontwards and backwards to find errors,
0:14:48 to make sure the base rental payment on page 33
0:14:52 wasn’t base rental payments on page 81.
0:14:54 And if I missed anything and there was a typo,
0:14:57 I could no joke, there was a good chance
0:14:58 I’d be fired the next day.
0:15:00 So I’d be up till four in the goddamn morning
0:15:01 proofing a prospectus.
0:15:04 It was just awful work.
0:15:07 I thought I was gonna be doing deals on the Concorde
0:15:08 and hanging out with interesting people.
0:15:11 Instead, I worked with a bunch of abusive assholes
0:15:13 and they were assholes.
0:15:15 And it was just incredibly boring work.
0:15:17 Now, having said that, it was a fantastic training
0:15:19 because work is hard, taught me attention to detail,
0:15:22 taught me sort of how to manage people with big egos.
0:15:24 But everyone in my firm, not everyone,
0:15:26 the majority of the senior people, not happy,
0:15:28 would rather be doing something else,
0:15:31 but it got to the point where they built a lifestyle,
0:15:34 where they needed to clock their half a million,
0:15:38 million, two million dollars a year in investment banking
0:15:40 and could either go be the CFO of a company
0:15:43 and take a 60% pay cut or go try and start a business
0:15:45 and none of them were really entrepreneurs at heart.
0:15:47 So they were kind of all trapped, if you will.
0:15:48 Now, there’s some, a small subset of them
0:15:50 that really enjoyed it.
0:15:51 But I literally think for most of them,
0:15:54 the term work was the appropriate term.
0:15:56 Anyway, the fact you’re getting out
0:15:58 and you’re pulling the ripcord, good for you.
0:16:02 Having said that, I wouldn’t take too much time on the road.
0:16:05 As a matter of fact, and it may be too late for this,
0:16:10 you know, it’s so much easier to find a job with a job.
0:16:13 Is there any way you could find a job
0:16:15 or try and figure out what you wanna do next
0:16:19 whether it’s a startup and then take your three months
0:16:20 sojourn?
0:16:22 I know that I’m sounding like your dad right now,
0:16:24 but you’re just a used car.
0:16:26 You’re not as attractive when you’re interviewing
0:16:27 and you don’t have a job.
0:16:29 There’s no sense of urgency.
0:16:32 In addition, my experience with people who kind of go
0:16:34 to touch Indians and, you know, practice yoga
0:16:36 or whatever it is you’re gonna do
0:16:38 or hang out with llamas in Argentina.
0:16:40 Do people do that as a thing?
0:16:41 I don’t think I’m gonna have this epiphany
0:16:43 of what you were meant to do.
0:16:45 Maybe, maybe, I think most people who do that kind of stuff
0:16:46 and they have an epiphany,
0:16:49 it’s that they should return to the religious roots
0:16:50 or get more involved in non-profit,
0:16:52 but they usually don’t think,
0:16:54 oh, I should really be in healthcare,
0:16:55 maintenance software or something.
0:16:58 I don’t know if that’s gonna happen on the road.
0:17:04 So look, I don’t know enough about what your skill set is.
0:17:06 If you’re at an investment bank and you’ve done well,
0:17:07 you’re good in services.
0:17:09 So that lends itself really well to consulting.
0:17:11 You have an understanding of finance.
0:17:13 So that lends itself to operations
0:17:16 or to be the CFO or in finance.
0:17:19 But my suggestion is at your age,
0:17:22 I would go or you think you have some interest
0:17:25 or you think you can leverage your investment banking skills
0:17:27 and an industry that’s growing.
0:17:29 Having said that, it means I don’t know.
0:17:31 I would need to know more about you, my brother.
0:17:34 What I would suggest though is that you begin
0:17:35 to make those inquiries sooner rather than later
0:17:37 and just so I can play dad for a moment.
0:17:39 Time’s gonna go really fast.
0:17:41 And what you don’t wanna be is wake up a year,
0:17:43 two years later and you let perfect be the enemy of good
0:17:46 and you didn’t take any offers to just chase anything down
0:17:47 and you start to smell.
0:17:49 What do I mean by that?
0:17:51 Once you’re out of the job market for longer than a year,
0:17:52 you begin to smell.
0:17:53 And I know how terrible that sounds.
0:17:54 And that was people like, what is wrong?
0:17:56 And your skills begin to atrophy.
0:17:59 So I would be making as many contacts as possible,
0:18:01 having coffees, following up with people,
0:18:04 get an idea of what you wanna do, have a plan maybe
0:18:06 and then take off.
0:18:08 But anyways, you’re obviously a very talented guy.
0:18:11 Investment banking I found paid off for the rest of my life
0:18:14 in terms of the skills and the discipline
0:18:15 and attention to detail.
0:18:16 It taught me even if you don’t like it.
0:18:19 And I also think if you don’t love it
0:18:20 or you don’t have to have the money,
0:18:22 I think you’re smart to get out.
0:18:25 It is, in my opinion, a fairly soul-crushing,
0:18:28 non-redeeming way to make a living.
0:18:31 Too much, too much.
0:18:32 Thanks for the question.
0:18:35 That’s all for this episode.
0:18:36 If you’d like to submit a question,
0:18:37 please email a voice recording
0:18:39 to officehours@proptimedia.com.
0:18:43 Again, that’s officehours@proptimedia.com.
0:18:56 Support for this special series comes from Mint Mobile.
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0:19:01 you turn to Scott Galloway.
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0:19:31 you

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0:01:16 – Today’s number zero.
0:01:19 That’s how many stocks Democratic VP pick Tim Walz owns.
0:01:21 I’d rather talk about G.D. Vance.
0:01:23 I think he looks like one of those illustrations
0:01:24 on the back of a milk carton
0:01:26 saying what a lost child would look like now
0:01:28 if he were an adult.
0:01:30 Also Ed, he’s definitely the kind of guy
0:01:32 that invites you over for Bible study
0:01:34 and won’t stop asking if you want a massage.
0:01:36 – I like the first one, did you come up with that?
0:01:37 – I don’t come up with any of these.
0:01:42 – Oh, we need a prof to your original, that was great.
0:01:47 – There is so much good shit about G.D. Vance.
0:01:49 I mean, I absolutely, I mean,
0:01:51 with all the makeup he’s wearing,
0:01:52 he looks like he’s joined
0:01:54 a fundamentalist Christian metal band.
0:01:56 – Yeah, yeah, the eyeliner is insane, huh?
0:01:59 – The eyeliner, the guy, the guy is clearly
0:02:02 like the handmade’s tail, but he wears an eyeliner.
0:02:03 What’s going on here, Ed?
0:02:05 – Times are changing.
0:02:06 We have to accept it.
0:02:09 – He also looks like the guy that will play him on SNL.
0:02:11 Or I think he actually looks like you would look
0:02:13 at your reflection in a teaspoon.
0:02:16 I think you would look like him.
0:02:19 (laughing)
0:02:22 (singing in foreign language)
0:02:27 (singing in foreign language)
0:02:29 – One more, come on.
0:02:31 – He looks like a picture of one of those dogs
0:02:33 you see on Instagram that’s just been stung by a bee.
0:02:35 – Yeah, these are good.
0:02:36 – Should we get an update from Aspen?
0:02:38 Anything interesting going on?
0:02:39 – Trying to think.
0:02:41 My kids went to the rodeo last night.
0:02:44 It was sort of a family thing, so I didn’t do it.
0:02:45 They went to the rodeo.
0:02:48 We have some friends, all these friends.
0:02:49 Aspen is like New York.
0:02:50 Once people find you have a place there,
0:02:52 they’re like, hey, let’s get together.
0:02:53 It’d be great to catch up.
0:02:54 – When do you leave?
0:02:55 You’re heading to California, sir?
0:02:58 – Yeah, I head to Los Angeles this afternoon
0:03:00 ’cause I’m pitching this original scripted drama
0:03:01 and I have a bunch of meetings tomorrow
0:03:03 and I’ll hang out at the Beverly Hills Hotel.
0:03:04 – Favorite hotel in the world?
0:03:05 – I’ll go down to the pool
0:03:07 and put on big black sunglasses
0:03:08 and unleashed cigarette in my mouth.
0:03:10 And every woman who walks by me,
0:03:12 I take my sunglasses down and I go,
0:03:13 Jackie, marry me.
0:03:15 I make you very happy woman.
0:03:16 And nobody knows what I’m saying.
0:03:19 That’s actually Aristotle and Nassus.
0:03:21 What I thought he would have said to Jackie on Nassus.
0:03:23 – Do you think anyone understands that
0:03:24 or just wants to call security?
0:03:26 – No, I don’t think anyone understands.
0:03:27 I don’t even understand, but it doesn’t matter
0:03:32 ’cause I still find it funny because it’s so strange.
0:03:33 – I love that.
0:03:34 It’s what I call one of those.
0:03:35 So I’m super into hotels
0:03:37 and the Beverly Hills Hotel is what I call it,
0:03:38 Disney Hotel.
0:03:39 It has all these attractions.
0:03:40 It has the Polo Lounge,
0:03:42 which is this cool restaurant and bar.
0:03:44 It has this thing called, is it called the counter?
0:03:46 – Yeah, the diner, right?
0:03:48 – The diner has like the best breakfast diner.
0:03:50 It has this great pool
0:03:52 and then a great restaurant off the side of the pool.
0:03:54 So everyone will come to you.
0:03:55 You never need to leave.
0:03:58 People love coming to the Beverly Hills Hotel.
0:04:01 So I absolutely, I love it there.
0:04:04 I feel like a producer in the 50s having an affair with,
0:04:06 I don’t know, a starlet
0:04:08 or one of the gaffers or something.
0:04:10 It’s great.
0:04:11 – Well, I’m excited for you.
0:04:12 – Thank you.
0:04:12 Thanks for that.
0:04:13 All right, get to the news.
0:04:15 – Let’s start with our weekly review of Market Vitals.
0:04:18 (upbeat music)
0:04:21 (upbeat music)
0:04:23 The S&P 500 was volatile,
0:04:25 but recovered some of its Monday losses.
0:04:28 The dollar stabilized after sliding to a four month low,
0:04:31 Bitcoin rose and the yield on 10 year treasuries climbed.
0:04:33 Shifting to the headlines.
0:04:36 Shopify reported second quarter sales and profit
0:04:37 that beat expectations.
0:04:39 Revenue projections for the third quarter
0:04:40 were also higher than expected
0:04:43 and shares rose almost 18%.
0:04:46 Airbnb revenue came in higher than expected,
0:04:48 rising 11% year over year.
0:04:51 Shares dropped the most in two years, however,
0:04:53 after second quarter bookings fell below
0:04:54 analyst expectations.
0:04:57 The company also forecasted third quarter bookings
0:05:00 will grow at their slowest pace since 2020.
0:05:02 Disney’s streaming unit posted a profit
0:05:04 for the first time ever
0:05:06 and overall revenue increased 4%.
0:05:09 Still, investors were spooked by a 6% drop
0:05:12 in operating income for its theme parks in the US.
0:05:15 The stock fell more than 4%.
0:05:18 And finally, Elon Musk’s ex is suing a group
0:05:20 of major advertisers for alleged violation
0:05:21 of antitrust laws.
0:05:23 The suit claims that a group of advertisers
0:05:25 have been withholding ad dollars from ex
0:05:27 since Musk took over.
0:05:29 Ex says this was a quote, a legal boycott
0:05:31 that cost the company billions of dollars.
0:05:34 Scott, your thoughts starting with the earnings
0:05:35 from Shopify.
0:05:37 – Well, we had a really interesting interview
0:05:40 with Mark Mahaney, who’s the head of, I guess,
0:05:42 internet research for Evercore.
0:05:47 And Shopify, he said, was sort of had been overly punished.
0:05:50 And then the next day, you know, this happens,
0:05:52 revenue increased 21% and subscription revenue
0:05:53 increased 27%.
0:05:56 Subscription revenue is generally valued
0:05:59 at a greater multiple than general revenue
0:06:00 because it’s stickier.
0:06:02 Their profitability improved.
0:06:04 Operating expenses decreased quarter over quarter
0:06:06 and free cash flow margin doubled from last year.
0:06:08 So the gangster move here, the chocolate and peanut butter
0:06:12 is after a crazy amount of growth and investment
0:06:14 in sort of the new economy.
0:06:17 A lot of these CEOs have said, here’s an idea,
0:06:19 let’s cut costs and see if we can maintain some growth.
0:06:23 And if you can both cut costs as Shopify has done,
0:06:25 obviously above operating expenses decreased
0:06:28 while maintaining some growth, which they did substantially,
0:06:31 that is nitro and glycerin around earnings.
0:06:33 And that is your earnings absolutely explode.
0:06:35 – Yeah, I think it’s interesting also, you know,
0:06:38 we’ve seen all these recession fears
0:06:40 that we’ve been talking about in the past week
0:06:43 after we saw that big stock market drawdown.
0:06:46 I feel like those fears have mostly been put
0:06:47 to rest at this point,
0:06:49 but people are still kind of talking about it.
0:06:51 But if you were to make an argument today
0:06:54 as to why we are not about to enter a recession
0:06:56 or a recession is not coming,
0:07:01 I think these earnings from Shopify would probably be
0:07:03 exhibit A in your defense case.
0:07:07 You’ve got one of the largest retail platforms in the world.
0:07:09 It operates across every vertical.
0:07:13 It works with tiny, small to medium-sized businesses,
0:07:15 even to huge enterprises.
0:07:20 It works with clients like Heinz and Mattel and Luxotica.
0:07:21 It’s across all of consumer
0:07:24 and this company is experiencing historic revenue growth.
0:07:27 So I don’t think it’s a hot take for me to say,
0:07:30 I don’t think recession is on the table,
0:07:32 but if you do want to make that argument,
0:07:35 I think Shopify’s earnings are a good place to start.
0:07:38 – The only way I’m talked about that has been sort of a great,
0:07:39 I don’t know what the term is,
0:07:42 a great gift with purchase or kind of makes the story
0:07:45 that much sexier is that they are,
0:07:48 they have rolled out a number of AI-enabled tools
0:07:50 for its merchants that help you better market,
0:07:54 better allocate your capital, look at your dataset.
0:07:56 And that seems to have the market excited
0:07:58 that these small and medium-sized companies
0:08:01 now have access to these AI tools.
0:08:04 So that was part of the great story here.
0:08:06 Feels like it’s oversold.
0:08:10 Year-to-date, the company is down 8%, right?
0:08:13 So whereas when you look at Amazon year-to-date,
0:08:16 Amazon is up 10%.
0:08:18 So I just think a lot of this was,
0:08:19 when people got their pencils out,
0:08:23 they said, all right, Shopify has been unfairly punished,
0:08:25 is actually doing better than people think,
0:08:27 some AI secret sauce,
0:08:31 and it all adds up to a good trade here.
0:08:32 Should we talk about Airbnb?
0:08:33 – Let’s do it.
0:08:34 Your thoughts, you’re a big shallower, so.
0:08:37 I am, although I’ve paired a lot of my holdings.
0:08:39 Profits fell 15% year on year,
0:08:41 mostly due to higher income taxes, which is interesting.
0:08:44 I wonder why they’re paying higher income taxes.
0:08:48 Q2 bookings only increased by 9% from a year earlier,
0:08:51 still good but below expectations.
0:08:55 Airbnb said it expects a sequential moderation
0:08:56 of bookings growth in the third.
0:08:58 Can you imagine how many high-paid comms consultants
0:09:02 came up with the term sequential moderation?
0:09:05 I mean, literally, if you’re having sex with someone
0:09:06 and you just want to kill the moment,
0:09:09 start screaming sequential moderation.
0:09:10 What the fuck does that even mean?
0:09:13 Anyways, booking lead times got shorter,
0:09:15 a sign that customers have less confidence
0:09:17 in making long-term financial commitments.
0:09:19 I wonder if people are a little bit running out of money
0:09:21 or they’re returning to the office
0:09:23 or they’re not deciding to take a backpack
0:09:26 and go work from Thailand.
0:09:29 I don’t know, Airbnb also expects margins to contract
0:09:32 in Q3 as a result of higher marketing spend.
0:09:34 One of the things I always loved about Airbnb
0:09:35 is that they were one of the few companies
0:09:37 that was able to exit the stranglehold
0:09:40 of Metta, Alphabet, and Amazon,
0:09:42 that the majority of their bookings are direct to site.
0:09:45 So when you go and book a hotel,
0:09:47 such as the Beverly Hills Hotel,
0:09:50 and you use Expedia, which I love, I love the Expedia site,
0:09:54 if that traffic to the Dorchester collection
0:09:56 who owns the Beverly Hills Hotel comes in through Expedia,
0:10:01 Expedia gets anywhere between $100 and $400 a night
0:10:07 of the $1300 a night that these firms are charging now,
0:10:09 which dramatically reduces their margin, whereas Airbnb
0:10:12 doesn’t have to pay the toll nearly as often.
0:10:15 So I’ve always thought that Airbnb was the best brand
0:10:17 at hospitality in the last several decades.
0:10:21 As expected, the Olympics helped increase demand in Paris,
0:10:23 nights booked in Paris for strangle in the Olympics
0:10:25 were over five X higher than the same time a year ago.
0:10:27 That’s not a shocker.
0:10:29 The stock was down 13% after earnings.
0:10:32 Jesus, that’s a hit, right?
0:10:34 The bottom line is I think they would have been fine,
0:10:36 the numbers were fine, but what they’re saying is
0:10:37 they’re trying to prep people for what sounds like
0:10:40 it’s gonna be a shitty next quarter.
0:10:43 And that term sequential moderation costs the company
0:10:45 about $10 billion.
0:10:47 So this is not about their performance,
0:10:49 it’s about their guidance.
0:10:50 – Yeah, I think that’s exactly right.
0:10:52 I think sequential moderation was the line
0:10:53 that freaked Wall Street out.
0:10:56 And the other line that freaked them out was quote,
0:11:00 we’re seeing signs of slowing demand from US guests.
0:11:02 So I think a lot of this is wrapped up
0:11:07 in those more general fears about a recession in the US
0:11:08 that we’ve been talking about
0:11:11 that we saw play out in the markets last week.
0:11:14 I believe as it relates to Airbnb,
0:11:16 those fears are really overblown.
0:11:20 If you look at Airbnb’s previous earnings report,
0:11:22 which we also discussed on this podcast,
0:11:23 they said almost the exact same thing.
0:11:26 They said, we’re seeing a moderation
0:11:28 and we’re seeing signs of slowdown
0:11:30 and the market didn’t really like it,
0:11:34 but they weren’t as upset about it as they were this time.
0:11:37 I think if you are a long-term shareholder
0:11:39 in this company though,
0:11:41 I really don’t think any of this should bother you
0:11:44 because everything we’re talking about right now
0:11:48 is about near-term consumer demand.
0:11:50 And all of that consumer demand is cyclical.
0:11:53 None of this has to do with Airbnb
0:11:55 as a business on its own.
0:11:57 And all the things that make Airbnb great,
0:12:00 you know, you said this, the best brand in hospitality,
0:12:02 number one travel app in the world,
0:12:06 one of the most network-advantaged companies you could buy
0:12:09 in the US stock market, none of that has changed.
0:12:11 This is still a great company.
0:12:14 It’s just the consumer that has supposedly changed.
0:12:16 – So more importantly,
0:12:18 I think the two of us should start a boy band
0:12:20 called Sequential Moderation.
0:12:21 You’re gonna be the dreamy front man.
0:12:25 I’m gonna be the brooding, depressed backup guy
0:12:27 that develops a heroin addict and then overdoses.
0:12:29 And then you’ll do it behind the music,
0:12:31 talking about what a good guy that was.
0:12:33 By the way, if you’re wondering
0:12:36 if they still sell edibles in Aspen,
0:12:38 I think I just answered the question.
0:12:40 By the way, I think it’s time we started talking
0:12:41 about legal edible products.
0:12:45 I use Wild Time to help me wind down at night.
0:12:46 I do five milligrams.
0:12:48 The peach keeps me awake
0:12:50 and the grape is just too much, Ed.
0:12:51 It’s just too much.
0:12:54 It’s like being hit over the head with a sledgehammer.
0:12:56 – Have you ever recorded a podcast under the influence?
0:12:57 That’s a genuine question, by the way.
0:12:58 – No, I never have.
0:12:59 – We should change that.
0:13:01 – I don’t think I’ve ever been under the influence
0:13:02 during when the sun’s out.
0:13:04 Yeah, I’m not, that’s not my gig.
0:13:05 How about you?
0:13:07 How about tell all your future employers
0:13:08 and potential mates?
0:13:10 – No, no, no, not yet.
0:13:11 Not yet.
0:13:13 I’m happy to change that, but we have to do it together.
0:13:15 That’s my only rule.
0:13:17 – No, I don’t think anyone needs to see that.
0:13:21 I become a better version of myself a little bit fucked up.
0:13:24 I’m nicer, more affectionate, more complimentary.
0:13:27 I’m definitely a much more interesting,
0:13:28 a little bit fucked up.
0:13:29 Anyways.
0:13:30 – Yeah, we have things to cover.
0:13:33 The next thing we have to cover is Disney’s earnings.
0:13:36 What are your thoughts on finally some profitability
0:13:37 in the streaming unit?
0:13:39 – I thought, I was shocked that the stock
0:13:41 didn’t respond more positively.
0:13:45 ‘Cause I saw this as, I saw this as a pretty good quarter.
0:13:49 Revenue up 4%, the EPS up 35%.
0:13:51 So again, see above, same thing, right?
0:13:53 That means they reduce their expenses
0:13:55 while maintaining growth.
0:13:57 So the company recorded a loss in the year ago quarter,
0:14:00 largely result of restructuring charges,
0:14:02 making the jump in EPS this quarter less substantive.
0:14:04 So you could argue it was sort of an artificial jump,
0:14:06 but still I was impressed.
0:14:10 Where I think people got freaked out was that
0:14:13 the experiences division, which is the parks,
0:14:17 revenue increased 2% while operating income declined 3%.
0:14:20 And executives blamed moderating consumer demand.
0:14:22 Again, more of this, at least they didn’t call
0:14:24 sequential moderation.
0:14:26 Disney’s CFO said the lower income consumer
0:14:29 is feeling a bit of stress and the higher income consumer
0:14:32 is traveling internationally a bit more.
0:14:33 Those are both really interesting things.
0:14:36 One, people are running out of stimulus or PPP
0:14:37 or whatever you want to call it.
0:14:40 And something I’ve actually tangibly noticed in Aspen,
0:14:42 I’ve been coming here, I don’t know,
0:14:43 eight or 10 summers in a row.
0:14:48 The last two summers, it’s dramatically less crowded.
0:14:51 And I think it’s because the high-end consumer
0:14:55 who accurately decides who comes to Aspen
0:14:57 has all this pent-up demand to go to Europe
0:14:59 ’cause they didn’t go for three or four years during COVID.
0:15:04 And so I think that they are leaving basically going
0:15:07 to the Amalfi Coast ’cause I haven’t been there in a while.
0:15:09 But the experiences group of the parks
0:15:12 was always sort of the cash cow
0:15:13 that kept on giving at Disney.
0:15:16 They could go play in traffic with streaming,
0:15:18 have their problems with ABC or activists,
0:15:22 but they could always rely on a massive amount
0:15:23 of cash flow from the experiences.
0:15:26 I think that they probably haven’t given the parks
0:15:29 the love they deserve in terms of catbacks.
0:15:32 I think they weren’t milking them a little too much.
0:15:34 It’s expensive and not that great.
0:15:36 It’s the way I would describe Disney right now.
0:15:38 And I think they recognized this,
0:15:41 and a year ago they were gonna start making more investments,
0:15:44 but they got used to this massive cash flows
0:15:45 in this milking.
0:15:46 And I think they’ve, quite frankly,
0:15:47 I just think they milked it a little too hard
0:15:50 and they’re starting to see the consumer turn away
0:15:50 to other options.
0:15:53 And I think this has spooked the market that,
0:15:56 oh, the parks aren’t just gonna keep generating cash flow
0:15:57 without catbacks.
0:16:00 Last year, Disney experiences contributed 70%
0:16:01 of Disney’s operating profit
0:16:03 up from about 30% a decade ago.
0:16:05 God, that’s incredible.
0:16:07 And there were some other positives this quarter.
0:16:08 Disney’s streaming division generated a profit for the
0:16:09 first time.
0:16:11 I think that’s a big deal.
0:16:15 And they also had that big movie inside out, part two.
0:16:16 Is that what it was called?
0:16:16 – Uh-huh.
0:16:17 – What did it do?
0:16:19 It had like one and a half billion dollars.
0:16:21 I’m finally at the stage where my kids are old enough
0:16:25 that we don’t have to go to every single kid’s movie.
0:16:30 I saw the emoji movie in theaters, Ed, the emoji movie
0:16:33 where the star was like that four-fingered hand.
0:16:35 Oh my God, don’t have kids, Ed.
0:16:37 Don’t have kids.
0:16:38 Anyways.
0:16:40 – Yeah, the start that caught my attention the most
0:16:44 was “Inside Out 2” which I saw, very mediocre movie.
0:16:46 – You saw “Inside Out 2”?
0:16:47 – I saw it, yeah.
0:16:48 – Why would you choose to do that?
0:16:50 You don’t have to do that.
0:16:52 Why would anyone choose to do that?
0:16:54 – That’s what I realized after.
0:16:56 – Oh wait, and you claim not to do edibles?
0:16:59 There’s no way you saw that sober.
0:17:00 – I kept on seeing it on my social media
0:17:03 and saying it’s the best Pixar movie of all time.
0:17:04 It’s incredible.
0:17:05 It sucked.
0:17:08 It was terrible, but everyone disagrees with me.
0:17:09 – Who did you go with?
0:17:12 – I threw it in my girlfriend and you’re gonna give me some.
0:17:13 – A little night out.
0:17:14 – Yeah, there you go.
0:17:15 That’s what we do.
0:17:17 – A little dating hall of lame.
0:17:20 Hey, sweetie, let’s go to “Inside Out 2”.
0:17:22 So let me just give you a little bit of heads up.
0:17:25 – Oh no, oh my God.
0:17:26 – You got a few of those swings and a miss,
0:17:28 but you can’t repeatedly do that
0:17:31 or she’s gonna end up going out with an older guy
0:17:32 who like takes her to St. Bart’s
0:17:34 not to some lame fucking Pixar movie.
0:17:35 Get it together, Ed.
0:17:37 – Yeah, we did the best of both worlds.
0:17:39 We like to do both of them.
0:17:43 But it sold $1.6 billion in tickets,
0:17:45 which makes it the highest grossing animated film
0:17:46 of all time.
0:17:47 – Amazing.
0:17:49 – That’s just absurd to me.
0:17:52 I can’t wrap my head around that.
0:17:56 And that’s all I could focus on on this earnings.
0:18:00 I don’t really care if streaming’s profitable now.
0:18:03 I’m like, wow, $1.6 billion at the box office.
0:18:06 Everyone was saying movie theaters were dead
0:18:07 just a couple of years ago.
0:18:09 And now they’ve come roaring back
0:18:11 with “Wait For It, Inside Out 2”.
0:18:13 So it’s just incredible.
0:18:15 Let’s move on to X’s lawsuit.
0:18:18 I’m sure you have a lot of things to say.
0:18:23 I saw your very good host on threads.
0:18:25 Thoughts on X’s lawsuit here.
0:18:26 – This is not only stupid,
0:18:29 it reflects something that’s a little bit more mendacious.
0:18:34 So the idea that someone who claims to be a free speech warrior,
0:18:36 which by the way is total bullshit
0:18:38 on kind of the supply side.
0:18:41 He throttles the speech of the New York times
0:18:43 when we have white dudes for Harris,
0:18:47 somehow the account for white dudes for Harris
0:18:48 shut down during the speech,
0:18:51 somehow just went offline.
0:18:54 And then to claim that he’s a free speech warrior,
0:18:56 advertising is a form of speech
0:18:58 and your ability not to say something.
0:19:00 So people often ask me are you upset
0:19:03 that other people aren’t speaking up about Israel?
0:19:05 I’m like, free speech means I get to say what I want,
0:19:08 but it also means someone has the opportunity
0:19:10 to not say something if they don’t want.
0:19:11 That’s their right.
0:19:13 And it’s the same way with advertisers.
0:19:15 The notion that you have some sort of legal obligation
0:19:17 to advertise across any platform,
0:19:20 especially the Nazi porn bar that is Twitter now,
0:19:22 is just fucking ridiculous.
0:19:25 The suit alleges that this group,
0:19:28 the Global Alliance for Responsible Media or GARM,
0:19:30 triggered a boycott of Twitter ads
0:19:32 immediately following Musk’s purchase of the company
0:19:33 in October, 2022.
0:19:37 GARM encouraged advertisers to avoid X after Musk bought it.
0:19:39 And this quote unquote illegal boycott,
0:19:42 according to the suit cost X billions of dollars in revenue.
0:19:45 Musk wrote on X, we tried being nice for two years,
0:19:47 might by telling them to go fuck themselves.
0:19:48 He literally said that on stage.
0:19:49 He was trying to play nice.
0:19:53 That’s him nice and got nothing but empty words.
0:19:54 Now it’s war.
0:19:56 Really boss?
0:19:57 Really?
0:19:59 X generated almost one and a half billion in revenue
0:20:01 for the first six months of 2023,
0:20:04 down almost 40% from the same period in 2022
0:20:06 before Musk bought the company.
0:20:10 You have never seen a company over a billion dollars
0:20:13 during non-war time decline.
0:20:17 The way that X is literally the worst performing business
0:20:20 in modern history outside of war time.
0:20:23 And so they’re going to start suing advertisers.
0:20:25 This just makes apps of fucking literally no sense.
0:20:26 What are your thoughts, Ed?
0:20:27 – I think you nailed it.
0:20:30 And I think that desperate people do desperate things.
0:20:35 And the reality for X is that their revenue has fallen 83%
0:20:38 in the past two years.
0:20:40 They went from 700 million in quarterly revenue
0:20:44 to just over 100 million in the most recent quarter.
0:20:45 – Is that right?
0:20:46 Because if they generate one and a half million revenue
0:20:47 in six months.
0:20:49 – That’s what the New York Times has reported.
0:20:51 Is that in their most recent quarter,
0:20:54 they made over a hundred million dollars in revenue.
0:20:57 And in 2022, in the same quarter,
0:20:59 the number was 700 million dollars.
0:21:00 – So I just want to be clear.
0:21:03 The New York Times is claiming the most recent quarter.
0:21:04 They did a hundred million.
0:21:05 – Yes.
0:21:06 – Well, that means the company’s almost out of business.
0:21:07 – Exactly.
0:21:09 – That means it’s basically totally imploded.
0:21:13 Did you see the hostage video that CEO Linda Yaccarino
0:21:14 put out?
0:21:16 – So I was going to get to that too, exactly.
0:21:17 – I thought it was a parody.
0:21:21 The evidence and facts are on our side.
0:21:23 They conspire to boycott X,
0:21:26 which threatens our ability to thrive in the future.
0:21:30 That puts your global town square,
0:21:33 the one place that you can express yourself freely
0:21:36 and openly at long-term risk.
0:21:40 – I have some advice for her and for Elon and for X.
0:21:45 They need to go to Metta and they need to find and locate
0:21:49 whoever was behind Mark Zuckerberg’s rebrand,
0:21:53 and then they need to give whatever drug they gave Mark
0:21:55 to make Mark look cool suddenly.
0:21:56 They need to give Linda Yaccarino that drug,
0:21:59 because that video, as you have just pointed out,
0:22:03 that was, in my view, one of the most awkward,
0:22:07 stiffest, weirdest statements I’ve ever seen from a CEO.
0:22:09 It did look like she was at gunpoint.
0:22:11 – It’s one thing to accept a job
0:22:13 as the internet’s best compensated rodeo clown,
0:22:16 but it’s another thing to watch this person perform it.
0:22:18 – Well, I don’t blame her for taking the job.
0:22:19 I would have taken the job for sure.
0:22:20 – Yeah, I agree.
0:22:23 – It’s just, it was a trap.
0:22:26 I mean, there’s no way that you can do that job right.
0:22:31 I guess it’s a question of doing it as not badly as possible.
0:22:33 I think it’s an impossible job there.
0:22:34 We’ll be right back after the break
0:22:37 for our conversation with Professor Rebecca Allensworth.
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0:26:00 Google is a monopoly.
0:26:02 That is the ruling from Judge Amit Mehta
0:26:05 on the biggest U.S. antitrust trial in decades.
0:26:08 Judge Mehta found Google has illegally exploited
0:26:09 its dominance in the search business
0:26:12 to crush competition and suppress innovation.
0:26:14 It’s roughly 90% share of the market
0:26:17 was evidence of that dominance.
0:26:18 Here to help us break down the ruling
0:26:21 and what it means for Google and the rest of Big Tech
0:26:23 is Professor Rebecca Allensworth,
0:26:24 Associate Dean for Research
0:26:26 at Vanderbilt University Law School.
0:26:29 Professor Allensworth, thank you very much for joining us.
0:26:30 – Thanks for having me.
0:26:32 (upbeat music)
0:26:35 So let’s just start with the background here.
0:26:38 This is a ruling on a lawsuit brought against Google
0:26:40 by the Department of Justice.
0:26:45 What exactly were the DOJ’s accusations in this lawsuit?
0:26:48 – Well, the DOJ claims that Google monopolized
0:26:51 the search market and the advertising market.
0:26:54 And monopolization in the U.S. requires two showings.
0:26:57 One, that the company is indeed a monopolist.
0:26:59 In other words, that it has monopoly power
0:27:01 that, as you said, was found here
0:27:05 by virtue of Google’s size in the search market
0:27:08 and in a relevant advertising market.
0:27:09 And then that’s not enough though.
0:27:12 It’s not enough to be a monopolist to violate the law.
0:27:16 You have to have maintained or obtained that monopoly
0:27:19 using some sort of exclusionary tactics.
0:27:23 In this case, that was exclusive dealing contracts
0:27:27 that Google has with Apple and Mozilla
0:27:30 and in the Android ecosystem
0:27:34 that essentially make it the default search engine
0:27:37 on almost all mobile devices.
0:27:40 And that that kind of prevented any avenues
0:27:44 for competitors to use to get to the kind of scale
0:27:46 that they would need to build a better search engine
0:27:48 that could actually compete with Google.
0:27:52 So the idea is that Google kind of foreclosed its rivals
0:27:54 from entry into the search market.
0:27:58 – We’ve been talking about antitrust for years now,
0:28:00 Scott, especially.
0:28:02 The way I would describe the antitrust conversation
0:28:05 is that it is just that, just a conversation.
0:28:08 It’s kind of all talk, very little action.
0:28:11 Most big tech companies have not faced much
0:28:12 substantive enforcement.
0:28:15 Maybe that’s about to change,
0:28:18 but what’s different about this lawsuit today
0:28:22 versus all the other lawsuits we’ve covered in the past?
0:28:24 – Well, I guess I wouldn’t argue that they’re that
0:28:25 different.
0:28:26 So I think if you’re talking about antitrust
0:28:28 being all talk and no action,
0:28:33 you’re kind of having to go back to a time before 2020.
0:28:35 So this suit was filed in 2020.
0:28:38 It was at the end of the Trump administration.
0:28:41 But largely this push for antitrust enforcement,
0:28:42 especially against big tech companies
0:28:44 is associated with the Biden administration.
0:28:46 And there’s been a lot of action,
0:28:47 so I wouldn’t call it talk.
0:28:52 If what you mean is actual decisions in these cases,
0:28:54 it’s true that this is the first
0:28:58 of all the major monopolization cases to come to trial.
0:29:01 These cases take a very long time to bring,
0:29:02 and they always have.
0:29:05 In fact, one of the most famous monopolization cases
0:29:06 from more than a century ago,
0:29:09 Standard Oil also took five years.
0:29:11 So part of the answer to your question
0:29:12 is what’s different about this one
0:29:14 is that it’s just the first to be decided.
0:29:16 In fact, something very similar could happen
0:29:19 in some of these pending monopolization cases.
0:29:21 – What do you think the potential remedies are?
0:29:23 What happens now to Google
0:29:25 to try and rectify the monopoly maintenance?
0:29:27 – Well, that is the big question.
0:29:28 And nobody really knows.
0:29:30 This judge has been very careful
0:29:33 not to tip his hand about remedies.
0:29:35 Some people have been very excited
0:29:37 about the possibility of a breakup.
0:29:40 I think that that’s really, really unlikely in this case.
0:29:43 Not only because breakups are sort of disfavored remedies
0:29:45 and seen as a bit extreme.
0:29:48 And I’ll note that even though the decision
0:29:50 that came down on Monday is a huge win for the government
0:29:54 and a big loss for Google, it’s also very careful.
0:29:55 It’s really not out there.
0:30:00 It’s very much couched in traditional antitrust terms.
0:30:01 And so I would be very surprised
0:30:03 to see this judge go for a remedy
0:30:05 that would be seen as out there.
0:30:07 The other reason why I think a breakup is unlikely
0:30:10 is because there’s not a natural or simple way
0:30:12 in which you would break up this company
0:30:15 to address the harms from this lawsuit.
0:30:17 A different example would be the Facebook lawsuit.
0:30:19 So there’s a pending monopolization claim
0:30:24 against Meta because Facebook acquired Instagram in 2012
0:30:27 and WhatsApp a couple of years later.
0:30:30 Well, it would seem like if that’s monopolization,
0:30:33 a natural remedy would be to force divestiture
0:30:35 of these kind of independent properties.
0:30:37 We don’t really have that in the Google case.
0:30:40 So anyway, that’s a long way of saying,
0:30:42 I think that breakup is off the table.
0:30:44 More likely, I think they’ll enjoy
0:30:46 the kinds of exclusive dealing contracts
0:30:48 that were found to be unlawful here.
0:30:51 That might result in a choice screen for us
0:30:53 when it comes to using search.
0:30:55 – Choice screen meaning when you open up your phone,
0:30:58 you’re given multiple different options
0:31:00 of what browser you wanna use, right?
0:31:02 – The doubles in the design details, right?
0:31:04 Is this a choice screen that happens
0:31:06 when you open up your phone, as you say?
0:31:08 What is it a choice between?
0:31:11 Is it a choice once and then it’s the default forever?
0:31:14 So these are all questions, I think,
0:31:16 that will be raised in this next phase of litigation.
0:31:19 But yes, put simply, I’m calling a choice screen
0:31:22 some sort of moment where the user is able to decide
0:31:25 this is the search engine that I want to use,
0:31:27 be it Google or Bing or DuckDuckGo
0:31:29 or some other product.
0:31:32 – I mean, I’m just saying from a consumer preference standpoint,
0:31:36 I wouldn’t be surprised if they maintain that 93% share.
0:31:38 It has an outstanding product.
0:31:40 People are just sort of inclined to click
0:31:42 on the Google logo.
0:31:46 And then, but it diminishes the power of Apple
0:31:49 to extract, exorbitant $20 billion a year
0:31:51 by being the default.
0:31:54 Could this end up being sort of a net neutral for Alphabet
0:31:55 and hurting Apple a lot?
0:31:57 – So this is gonna say, let’s put it this way,
0:32:01 this is gonna save Google a lot of money
0:32:04 because they’re gonna get potentially for free
0:32:06 what they were having to pay a lot for
0:32:08 and that could hurt Apple.
0:32:12 But I think viewing it in that sort of zero sum
0:32:14 way is maybe incorrect
0:32:18 because I don’t think revenue sharing is gonna go away.
0:32:23 So that $20 billion payment represents
0:32:24 the revenue sharing agreement.
0:32:26 I don’t think that it’s necessarily true
0:32:29 that now that there won’t be a default
0:32:33 that there are some sort of like exclusive default
0:32:35 that there won’t be some sort of revenue sharing.
0:32:38 For example, at trial it was shown
0:32:43 that Apple tried to negotiate for a less lucrative
0:32:46 revenue sharing agreement if Google agreed
0:32:48 it would not be exclusive.
0:32:50 So in other words, if it opened up the possibility
0:32:55 for Apple to also use to push its own search product
0:32:58 or maybe Bing or something, Google refused.
0:33:00 Now maybe Google can’t refuse that
0:33:02 and yet so that revenue sharing will go down.
0:33:03 So I’m not sure it’s net a total
0:33:06 like $20 billion change of hands.
0:33:08 There’s also other dynamics in here
0:33:10 that we need to put in play.
0:33:13 So I totally agree that if I were now
0:33:15 presently given a choice between DuckDuckGo,
0:33:17 and in fact I am in a way given a choice
0:33:21 between DuckDuckGo, Bing and Google, I would pick Google.
0:33:27 However, it would seem that that 94% share
0:33:30 is vulnerable in a world in which
0:33:32 there’s not this exclusive default.
0:33:36 Otherwise, what was Google paying for?
0:33:39 And so over time, I think it’s reasonable to assume
0:33:41 that if you open up these barriers,
0:33:43 something will change within this market.
0:33:45 It kind of unfreezes the market
0:33:50 and does it on day two, really alter Google’s market share?
0:33:51 Maybe not right away.
0:33:53 Does it make that market share more vulnerable?
0:33:54 I think so.
0:33:57 – One thing I found really interesting
0:34:00 is that the Google’s stock
0:34:03 wasn’t actually affected too heavily by this decision.
0:34:06 It did fall, but so did the rest of the market.
0:34:10 And this drop wasn’t that much more pronounced
0:34:11 than the rest of the stock market,
0:34:14 which leads me to believe that Wall Street
0:34:18 isn’t worried about this from a shareholder perspective.
0:34:21 Perhaps they think Google won’t be punished
0:34:23 or that if it is punished,
0:34:25 the punishment is gonna be extremely light.
0:34:27 I’m wondering if you have any thoughts on that
0:34:29 and is Wall Street correct
0:34:31 if that’s what they’re assuming here?
0:34:32 – Okay, well you have a lot more expertise
0:34:35 about whether movement of the markets
0:34:37 actually reflects real information
0:34:39 about whether the future will happen.
0:34:41 And I tend to be a little skeptical about that,
0:34:45 but I think the fact that the markets didn’t move
0:34:48 in a way that reflected panic about Google
0:34:50 makes perfect sense to me for a few reasons.
0:34:54 One, reasonable antitrust law enforcement
0:34:56 is not gonna destroy these companies.
0:34:58 It is going to shift their tactics.
0:35:01 It’s gonna make them compete harder.
0:35:04 I don’t see that meaning that Google’s not a good bet, right?
0:35:09 I don’t think that that’s a reason to sell your Google stock,
0:35:12 that the only reason why this company is worth investing in
0:35:15 is because it has a lockdown illegal monopoly
0:35:18 and when that’s threatened, the company’s worthless.
0:35:20 That’s just sort of a straw man argument,
0:35:21 which is another reason why I think
0:35:22 when the tech companies say,
0:35:24 “Why are you trying to destroy us, America?
0:35:26 “We make your most valuable products.”
0:35:29 That’s also a little bit of a straw man argument.
0:35:31 The other thing is this is gonna take a very long time.
0:35:34 This is gonna take potentially years.
0:35:36 I would say potentially up to a year
0:35:37 before we know what the remedy is,
0:35:40 whether it’s strong or weak or whatever.
0:35:42 And probably another year before it’s implemented.
0:35:44 And so this is where I defer to the experts
0:35:46 on how markets move,
0:35:49 but I think it would be strange to sell off in a scenario
0:35:52 where you’re worried about losing value two years from now.
0:35:53 – Yeah, that makes a lot of sense.
0:35:55 And also Google will appeal, right?
0:35:57 – Yeah, that’s why it’s gonna take,
0:35:59 so I think that we may have a decision
0:36:01 on the question of remedy within a year,
0:36:03 but then the whole thing will be appealed.
0:36:06 – What do you think their argument would be?
0:36:09 If we were to try to steal man the other side of this,
0:36:11 how do you think Google will argue
0:36:14 that those $20 billion payments to Apple were kosher
0:36:16 and that they are in fact not a monopoly?
0:36:18 – Well, I mean, they made these arguments at trial.
0:36:22 The argument that they’re not a monopoly is pretty weak.
0:36:26 I think that they gave the government more of a run
0:36:27 for its money on the question of,
0:36:30 what did these payments really represent?
0:36:34 And they presented them as profit sharing.
0:36:35 We have an extremely valuable product.
0:36:37 People love it, people use it a lot.
0:36:40 And we have so many eyeballs on our stuff day in and day out
0:36:43 that we make a lot of money off of advertising revenue.
0:36:47 It’s only natural that we would wanna share that revenue
0:36:50 through our distribution channels
0:36:52 with our distribution partners like Apple.
0:36:54 That was sort of the thrust of their argument.
0:36:56 And the place where it fell apart was on the idea
0:36:59 that, okay, fine, share it.
0:37:01 Why does it have to be exclusive?
0:37:04 What is the value?
0:37:06 Not to Google, which is clear, the value,
0:37:10 but what is the value to consumers that this be exclusive?
0:37:13 (upbeat music)
0:37:14 – We’ll be right back.
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0:39:41 What do you think this will do
0:39:43 for antitrust moving forward?
0:39:46 I mean, you talked about the fact
0:39:49 that there are several other antitrust cases
0:39:51 in litigation at the moment.
0:39:53 I also like your point that I’m saying nothing’s happened,
0:39:55 but the reality is these things take a while
0:39:57 and I’ve just been impatient.
0:39:59 But it is annoying how long it takes.
0:40:01 But do you think this decision
0:40:04 will have any effects on those cases?
0:40:06 Does the fact that Judge Mehta ruled
0:40:08 in favor of the Department of Justice
0:40:12 do anything to affect what’s going on with Metta
0:40:14 and Microsoft and all these other big tech companies?
0:40:17 – Absolutely, in ways that are big and small
0:40:19 and short-term and long-term.
0:40:20 So it’s hard to know where to start.
0:40:24 But the first is just that this is an indication
0:40:26 of the times that we’re in now.
0:40:31 This is a data point of how a sort of careful legalistic,
0:40:34 pretty much down the middle federal judge
0:40:37 thinks about this kind of monopolization case
0:40:39 of which there are four other ones pending.
0:40:41 So it’s just kind of like a test case.
0:40:43 And I think for that reason,
0:40:46 we can think about what it means about the other cases.
0:40:48 Not that they’re all as strong as this one.
0:40:49 They have their own problems,
0:40:52 but it is a data point that I think is very relevant.
0:40:54 And the other is in specific holdings that he made,
0:40:56 that these are not gonna be presidential,
0:40:58 you don’t have to follow them
0:41:00 if you’re a judge in another case.
0:41:03 But he said a lot about how you define a market in tech,
0:41:06 about the power of defaults,
0:41:09 about the importance of scale in tech markets
0:41:12 that are in various ways relevant to these other cases.
0:41:14 And so I think that it could be hugely influential
0:41:16 in those ways too.
0:41:17 – Quick question, professor.
0:41:20 Imagine there’s a presidential candidate
0:41:22 and a VP candidate and his VP
0:41:25 are basically sort of bought and owned by the tech industry.
0:41:27 That some tech bros have said,
0:41:30 we’ll get you a billion dollars,
0:41:32 but we want you to take a very much of free markets,
0:41:34 laissez-faire, hands-off approach to tech.
0:41:35 Could they–
0:41:36 – Is this a hypothetical?
0:41:38 – This is a total hypothetical.
0:41:40 So imagine a different world
0:41:41 where you had an insurrectionist
0:41:43 and a rapist running for president.
0:41:47 – Okay, so they get elected.
0:41:49 Could they effectively, if they decided,
0:41:51 could they undo this decision
0:41:54 or just make it essentially neuter the whole thing
0:41:55 and stop it?
0:41:58 – Yes, technically.
0:42:03 So they could, from a legal perspective,
0:42:06 they could not appeal.
0:42:08 For example, they could abandon their appeal.
0:42:11 They could change what’s being sought on remedy.
0:42:13 So I think the remedy phase
0:42:15 is going to last probably through the election.
0:42:18 But I will remind you that this hypothetical
0:42:21 presidential candidate was the president
0:42:22 when this case was brought.
0:42:27 So it’s actually not a Biden administration case.
0:42:29 So it would be optically odd
0:42:34 for this particular case to switch horses in that way.
0:42:36 – You mean hypocritical and inconsistent?
0:42:40 – So maybe the answer is that definitely will be abandoned.
0:42:44 I think the conventional wisdom is that it won’t be.
0:42:49 And for that, I defer to some regulators
0:42:53 and former heads of these agencies that have said that,
0:42:56 that this will kind of survive into the,
0:42:58 I mean, part of it is like,
0:43:00 so now we’re talking politics and not antitrust
0:43:01 and I’ll do my best here,
0:43:06 but I could see somebody spinning this
0:43:09 to their own advantage as their own win
0:43:11 in a way that actually was politically expedient,
0:43:14 even if it is against a big tech company.
0:43:14 – When I saw this,
0:43:18 I saw that the biggest or the most important feature
0:43:21 of this decision wasn’t what happens to Alphabet
0:43:24 or even to its partners.
0:43:28 It’s just that it feels like antitrust has its mojo back.
0:43:30 And that this is sort of,
0:43:33 there was a general almost a bereft resignation.
0:43:36 That’s a redundant that we had been overrun
0:43:38 by these guys or government just couldn’t compete,
0:43:40 the government couldn’t,
0:43:42 they kind of show up and almost dare them
0:43:43 to try and do this shit,
0:43:45 that they had more lawyers,
0:43:47 public sentiment behind them,
0:43:49 consumers love their products,
0:43:52 try to take us on.
0:43:56 And the DOJ and the FTC have,
0:43:59 and they’ve taken on one of the biggest
0:44:01 and most well-resourced and most overlawered
0:44:04 and over lobbyist and they’ve won.
0:44:08 And this to me represents a change in the tide
0:44:10 where the government and the kind of antitrust folks
0:44:13 have their mojo back and might inspire
0:44:16 some of these companies to prophylactically,
0:44:18 I mean, I can see Alphabet spinning YouTube,
0:44:21 I can see Amazon spinning AWS going,
0:44:23 you know, we’re gonna become more valuable
0:44:25 and we wanna get out in front of this
0:44:27 because clearly these guys are no longer afraid of us
0:44:29 and judges are no longer afraid to rule against us.
0:44:33 It feels like momentum has shifted dramatically here.
0:44:34 Your thoughts?
0:44:36 – I mean, I could not have put it better than that.
0:44:39 That is what I think is so important about this case.
0:44:41 You know, what it does for Google
0:44:43 and the specific search market in question,
0:44:46 I think is a little bit unclear at this point.
0:44:47 But what it definitely shows,
0:44:49 well, first of all, the holding that Google
0:44:53 has monopoly power also opens the door
0:44:56 to everything else that’s gonna now do with that power.
0:44:59 So let’s say that they’re negotiating contracts
0:45:02 to get content for AI.
0:45:06 Well, now they’re negotiating contracts for AI content
0:45:09 to train their models as a monopolist.
0:45:10 In America, that, you know,
0:45:13 you’re halfway to a monopolization verdict
0:45:14 if you have that first half.
0:45:15 So now they’re gonna have to be thinking
0:45:18 about how exclusive are those contracts gonna be?
0:45:21 So even for Google, I think before we even get to remedy,
0:45:23 it’s meaningful.
0:45:25 But I agree that the biggest important thing here is that,
0:45:28 as you said, Antitrust has its mojo back.
0:45:30 And I don’t think a change in administration
0:45:31 can really change that.
0:45:33 I take a long view.
0:45:34 There was a big shift in the way
0:45:36 that we did Antitrust in the ’70s.
0:45:38 I think we’re at the beginning of that same kind of shift
0:45:40 in the other direction now.
0:45:44 – Professor, where do you stand on consumer harm?
0:45:47 I feel like that’s been one of the big arguments
0:45:49 from Big Tech that, yes,
0:45:53 they have these sort of monopolistic-esque practices,
0:45:56 but ultimately they’re delivering great product.
0:45:59 Everyone still loves buying from Amazon
0:46:03 because stuff is cheap and people, as you said,
0:46:05 would choose, if they were given the option,
0:46:08 would probably choose Google over Bing and DuckDuckGo.
0:46:11 Where do you stand on that side of the argument
0:46:13 that consumers aren’t being harmed?
0:46:15 So what’s the problem?
0:46:17 – I think consumers are being harmed.
0:46:21 And I think that’s what the opinion says.
0:46:23 The question is how innovative are these companies?
0:46:27 How much energy is Google putting into defending
0:46:31 its monopoly that it could be putting into competing?
0:46:34 What other smaller search engines,
0:46:38 like Neva is an example that came up during the trial,
0:46:39 could have been bringing something new
0:46:41 to the table that aren’t?
0:46:43 I think the most striking thing about this opinion
0:46:46 is that it actually uses this idea of innovation,
0:46:48 which the big tech companies have been using
0:46:51 as kind of trying to beat back antitrust laws,
0:46:53 saying antitrust enforcement is gonna stifle innovation.
0:46:56 And it says, “No, it’s you that’s stifling it.”
0:46:57 – You want that innovative.
0:46:59 – Well, so I mean, the idea that antitrust law
0:47:01 can be used to improve innovation,
0:47:04 I think it’s really squarely in this case.
0:47:06 – I’d love to get your view
0:47:09 on the rest of these antitrust cases.
0:47:15 There are cases out against Meta, Microsoft, Apple.
0:47:20 Which company in your view is the worst
0:47:22 when it comes to antitrust?
0:47:24 Which is the most monopolistic,
0:47:26 which has violated the most amount of laws?
0:47:28 And in your view, which one needs,
0:47:32 is most in need of some sort of enforcement or break up?
0:47:34 – That’s a hard question to answer
0:47:38 because I’m inclined to say Amazon
0:47:42 has the worst impact on markets
0:47:46 and is the most problematic,
0:47:49 but it is also, I think the least likely
0:47:51 to be found to be a monopolist.
0:47:55 And that’s because of some defects in the way
0:47:58 that antitrust law has evolved over the last 40 years
0:47:59 that need to be undone
0:48:01 and they can only be undone incrementally.
0:48:03 So in other words,
0:48:06 I think that the pending suit against Amazon is the weakest,
0:48:09 but it’s the one maybe that I’m most rooting for.
0:48:12 So I can’t predict that they’re gonna win.
0:48:17 I think the strongest of the pending suits,
0:48:19 I think the suit against Apple
0:48:22 came out a lot stronger than I thought it was going to.
0:48:23 – Around the App Store,
0:48:25 and kind of useless pricing around the App Store?
0:48:27 – No, it’s more the green bubble, blue bubble
0:48:30 is the way that people are kind of shorthanding it.
0:48:32 It’s the idea that they’re degrading
0:48:34 the quality of Android on the phone
0:48:39 so that people choose the Apple ecosystem kind of artificially
0:48:42 and they’re holding back interoperability
0:48:45 in order to basically keep Android at bay.
0:48:47 That’s a decent complaint.
0:48:49 – The thing you said that I found fascinating
0:48:53 with Amazon is probably the most in need of a break up.
0:48:56 I imagine because you believe it suppresses competition,
0:49:01 but it’s the least likely to be broken up on legal grounds,
0:49:04 which connotes a need for the change in antitrust law
0:49:08 and all cosplay and antitrust lawyer here.
0:49:11 Isn’t that, don’t we need sort of a return
0:49:15 from the Bork kind of test around consumer pricing
0:49:18 to more brand-ising around what makes markets
0:49:20 less or more competitive?
0:49:22 Isn’t it, don’t we need to move from the consumer test
0:49:25 back to just the competitive test?
0:49:30 – So I actually believe in the consumer welfare standard,
0:49:32 but I find that when I talk about it,
0:49:35 often people who also believe in the consumer welfare standard
0:49:38 describe it in a way that I don’t recognize.
0:49:41 They’ll say things like consumer welfare standard
0:49:46 demands present short-term numerical harmed consumers
0:49:48 to make for an antitrust violation.
0:49:50 I don’t believe in that.
0:49:53 I think all of these lawsuits describe long-term
0:49:55 meaningful consumer harm.
0:50:00 And to me, I think that you can get 95%
0:50:03 of what the brand-isians want through a sort of common sense
0:50:06 and reasonable understanding of what consumer welfare
0:50:07 really is.
0:50:10 So I’m kind of actually in my own work struggling
0:50:13 with whether I say I believe in the consumer welfare standard
0:50:16 because that phrase often means something
0:50:18 that I can’t endorse.
0:50:21 On the other hand, I do feel like moving away
0:50:24 from consumer protection, you lose a lot of like,
0:50:26 well, what are we doing here exactly?
0:50:27 What does competition mean?
0:50:30 So I feel ambivalent about that question.
0:50:33 – Just as we wrap up here, one observation,
0:50:36 Professor Ellensworth, you are outstanding.
0:50:37 You are outstanding.
0:50:39 Your ability to take these topics
0:50:41 and make them seem somewhat interesting,
0:50:45 which is nearly a miracle of oration and presence.
0:50:48 You are in the right seat helping shape legal minds.
0:50:52 We very much appreciate you coming on.
0:50:55 And again, really enjoyed this conversation.
0:50:55 Well done.
0:50:56 – Thank you.
0:50:57 That’s really nice to hear.
0:50:58 Thank you so much.
0:50:59 – 100%.
0:51:01 Rebecca Hall Ellensworth studies antitrust
0:51:02 and professional licensing.
0:51:05 Her work on antitrust focuses on how to adapt competition
0:51:07 policy to address competition problems
0:51:08 posed by tech platforms.
0:51:10 She teaches contracts and antitrust law
0:51:13 at Vanderbilt University and is a six-time winner
0:51:16 of the Hall Hartman Outstanding Professor Award
0:51:18 for Excellence in Teaching.
0:51:20 Clearly too qualified to be on this podcast.
0:51:22 Thank you very much for joining us, Professor Ellensworth.
0:51:23 – Thank you.
0:51:26 (upbeat music)
0:51:34 – Ed, what’d you think?
0:51:35 – Incredible.
0:51:36 I loved all of her points.
0:51:37 – Right?
0:51:41 And by the way, she won the best teaching award
0:51:43 every school graduate school has this.
0:51:45 And she’s won that six times.
0:51:47 I would imagine the faculty at the Law School of Vanderbilt
0:51:49 have between 100 and 200 profs.
0:51:51 For her to win it six years, that means she’s out.
0:51:52 She’s out.
0:51:56 That is, that’s like, that is literally like being MVP
0:52:00 or yeah, the MVP in a league six years in a row.
0:52:01 That is so hard to accomplish.
0:52:04 There was one guy who’s done that at Stern
0:52:05 who we also have asked about the motor.
0:52:08 And I’ve been nominated a couple of times
0:52:08 for that award, Ed.
0:52:10 I haven’t yet to win it.
0:52:11 – What do you think you’re doing wrong?
0:52:12 – You know, let’s be honest.
0:52:15 The reason I haven’t won it is just simple jealousy.
0:52:18 It’s just that that I got to be honest.
0:52:20 That’s an award I coveted.
0:52:22 I think I’ve been nominated once or twice.
0:52:25 You want to hear, okay, this is my life.
0:52:28 My department chair calls me and says,
0:52:29 I’ve got great news.
0:52:31 You won best teaching, the best teaching award.
0:52:32 This is like 10 years ago.
0:52:34 And he’s like, we’re so proud of you.
0:52:36 This is such great news.
0:52:37 I was so excited.
0:52:39 I called a bunch of people and he calls them back.
0:52:40 He goes, oh, we fucked up.
0:52:42 Glenn Oaken won it.
0:52:42 Sorry about that.
0:52:47 And I’m like, I just called pretty much everyone I know
0:52:49 and told them I just won best props.
0:52:51 – It’s like the Steve Harvey Miss Universe Blunder.
0:52:52 This is terrible.
0:52:53 – This happens all the time.
0:52:55 It happened to-
0:52:56 – I went to the Oscars too.
0:52:59 – Yeah, and it happened to Paul Romer,
0:53:01 who is an outstanding professor,
0:53:04 especially the dean of our university called him
0:53:05 and told me to win the Nobel Prize
0:53:07 and it ended up he hadn’t.
0:53:09 But the good news about Professor Romer
0:53:11 is he did eventually win the Nobel Prize.
0:53:13 – I have not.
0:53:14 I’m still waiting, but-
0:53:17 – Yeah, that was similar to when I got an email
0:53:19 about the Webby Awards.
0:53:21 I thought that we had won a Webby
0:53:22 or that I had won a Webby.
0:53:24 And it turns out that I had won an honorable mention
0:53:26 for the Webby Award.
0:53:29 Did not win the actual Webby, so that’s it.
0:53:31 – The Webby’s have adopted the same business model
0:53:32 as Amazon.
0:53:35 So if you write a book on and you put it on Amazon,
0:53:37 they slice it into so many categories.
0:53:40 It’ll be your number seven in professors
0:53:43 with erectile dysfunction, who have a shaved head,
0:53:45 who write books about the economy.
0:53:48 – Come to our dinner and spend $1,000 just to show up.
0:53:51 – That’s the Webby’s, is they just slice,
0:53:53 they slice the cheese a million different ways
0:53:55 to get people engaged.
0:53:57 Anyways, you’ll get there, Ed.
0:53:58 – Okay, let’s take a look at the week ahead.
0:53:59 We’ll see the consumer price
0:54:01 and producer price indices for July.
0:54:03 We’ll also see earnings from Home Depot,
0:54:05 Walmart, and Alibaba.
0:54:08 Scott, do you have a prediction for us?
0:54:10 – I would bet over the next couple of weeks
0:54:12 you’re gonna have a lot of very smart people
0:54:14 at all of the big tech firms, get in a room and say,
0:54:17 “Okay, the jig is up.”
0:54:19 And these guys clearly have Mojo now
0:54:21 are gonna allocate more resources, more lawyers,
0:54:25 and Judge Metta has given permission to other judges
0:54:28 to say, “No, you’re guilty of monopoly abuse.”
0:54:31 And I think some of them might decide
0:54:34 to prophylactically stave off the wolves at the door here
0:54:36 and break themselves up.
0:54:39 I think you’re going to the next 24 months
0:54:44 see a prophylactic spin of an AWS or a YouTube
0:54:46 because these guys are so smart.
0:54:49 And also, I generally believe that
0:54:51 it would increase shareholder value.
0:54:52 So anyways, the prediction,
0:54:55 you’re gonna see some spins that attempt
0:54:57 to immunize them against antitrust.
0:55:03 – This episode was produced by Claire Miller
0:55:04 and engineered by Benjamin Spencer.
0:55:06 Our associate producer is Allison Weiss,
0:55:07 our executive producer is Catherine Dillon.
0:55:09 Mia Silverio is our research lead
0:55:11 and Drew Burris is our technical director.
0:55:13 Thank you for listening to “Prophecy Markets”
0:55:15 from the Vox Media Podcast Network.
0:55:16 If you liked what you heard,
0:55:18 give us a follow and join us on Thursday
0:55:21 for our conversation with Ramit Sethi,
0:55:22 only on “Prophecy Markets.”
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0:55:36 ♪ You help me ♪
0:55:41 ♪ In kind reunion ♪
0:55:48 ♪ As the world turns ♪
0:55:53 ♪ And the dark lights ♪
0:55:58 ♪ In love ♪
0:56:00 (upbeat music)