Author: The Prof G Pod with Scott Galloway

  • What Does It Take for Brands to Deteriorate? Tips on Using Your Name to Build Your Brand, and Scott’s Bucket List

    AI transcript
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    0:02:03 – Welcome to the PropG Pods Office Hours.
    0:02:05 This is the part of the show where we answer your questions
    0:02:07 about business, product, entrepreneurship
    0:02:09 and whatever else is on your mind.
    0:02:11 If you’d like to submit a question,
    0:02:14 please email a voice recording to OfficeHours@PropGmedia.com.
    0:02:17 Again, that’s OfficeHours@PropGmedia.com.
    0:02:18 I have not seen these questions.
    0:02:21 So, no matter who knows.
    0:02:23 – Hi, PropG.
    0:02:24 This is Ben from Chicago.
    0:02:26 I work in consulting for a well-respected firm
    0:02:29 and want to get your perspective on brand deterioration.
    0:02:32 Specifically, how long and what needs to occur.
    0:02:35 Thanks for the great work and advice every week.
    0:02:38 – So, who ranks poorly in terms of brand reputation?
    0:02:41 According to the 2024 Axios Harris poll,
    0:02:44 100 reputation rankings, meta ranks number 97
    0:02:49 in overall reputation with a very poor score of 59.6.
    0:02:52 That’s just three spots above the Trump organization
    0:02:54 and two spots above X.
    0:02:56 And one spot above Spirit Airlines.
    0:02:59 So, what do these companies all have in common?
    0:03:01 Brand is synonymous with differentiation.
    0:03:05 I got five different brands of frosted flakes.
    0:03:06 Which one is different from the other
    0:03:09 and why am I gonna pay kind of unearned margin,
    0:03:10 if you will.
    0:03:11 Or differentiation equals margin.
    0:03:14 In addition, a brand is sort of trust.
    0:03:15 And that is you have to trust
    0:03:17 it’s gonna deliver against its promise.
    0:03:20 And the end user wants to feel like they can trust the brand.
    0:03:23 And the thing that all of these companies have in common
    0:03:26 is that people don’t trust Spirit Airlines
    0:03:30 to kind of not to deliver.
    0:03:32 People I think are worried when they got on Spirit Airlines
    0:03:35 that they’re just gonna have a shitty experience.
    0:03:38 The Trump organization I think has developed
    0:03:40 a reputation for its vendors
    0:03:44 and people not being able to trust the organization.
    0:03:47 X has been in the news for destroying
    0:03:49 a lot of shareholder value,
    0:03:54 a lack of safety standards and just overall vitriol.
    0:03:57 So, it kind of comes down to trust how you handle crises,
    0:04:00 whether you’re seeing this treating your customers well,
    0:04:02 whether you’re seeing this being honest,
    0:04:03 all that kind of good stuff.
    0:04:05 Who’s doing it well?
    0:04:08 Right now it’s NVIDIA followed by 3M and Fidelity.
    0:04:09 That’s interesting.
    0:04:11 I wouldn’t have guessed Fidelity.
    0:04:15 So NVIDIA, nothing helps a brand like success.
    0:04:17 And I guess people trust NVIDIA because of its success
    0:04:22 and beating expectations are always.
    0:04:24 And I think Jensen is seen as a fairly good person
    0:04:27 and the firm feels future forward.
    0:04:29 So I think a lot of that just comes down to success.
    0:04:33 3M is seen as somewhat of a paternal company
    0:04:34 that’s good to its employees
    0:04:36 and constant history of innovation.
    0:04:39 Very sort of American, if you will.
    0:04:40 I think people feel good.
    0:04:42 It’s, I think their headquarters is in Minnesota
    0:04:46 and people just like those Minnesotans.
    0:04:47 Fidelity, I don’t know why.
    0:04:48 I guess Fidelity handles money
    0:04:52 and people feel pretty good that they’re good fiduciaries.
    0:04:55 Look, brands are hard to kill.
    0:04:57 They’re just becoming what I’d call less relevant.
    0:04:58 What do I mean by that?
    0:05:02 The algorithm for printing cash was to come up
    0:05:06 with a mediocre car, shoe, salty snack, sugary drink
    0:05:08 and wrap it in amazing brand codes
    0:05:11 using this incredibly cheap and efficient
    0:05:13 brand building infrastructure called broadcast television
    0:05:15 where 60% of America was watching
    0:05:17 one of three channels every night.
    0:05:19 Then broadcast media became very splintered,
    0:05:22 very expensive and people started cutting out the middle man
    0:05:24 and going to content that didn’t,
    0:05:26 but it wouldn’t be pelted by commercial telling them
    0:05:29 they had restless legs and their social graph
    0:05:31 and their new weapons of mass diligence,
    0:05:33 including Google, their social graph,
    0:05:35 TripAdvisor said you don’t need to always defer
    0:05:39 to the mass diligence or the shorthand of a brand as often.
    0:05:41 Now, having said that, it’s very rare
    0:05:43 that an individual purchases anything
    0:05:44 they haven’t heard of before.
    0:05:47 Think about your inclination to return an email
    0:05:49 from someone you’ve never heard of before
    0:05:51 and someone you have heard of, right?
    0:05:53 It’s exponentially greater likelihood
    0:05:55 you’ll respond to the latter.
    0:05:57 And the same is true of brands.
    0:06:01 So just a general level of awareness is really meaningful
    0:06:03 and then you infuse it with associations,
    0:06:05 hopefully has self-expressive benefit.
    0:06:07 Probably the best brand attribute after trust
    0:06:09 would be scarcity and that is this notion
    0:06:11 that it’s a limited supply.
    0:06:15 So now let’s talk a little bit about B2B.
    0:06:17 I think right away you need to identify
    0:06:18 what the culture is gonna be
    0:06:20 and to a certain extent the culture is your brand.
    0:06:23 When my first firm in business school,
    0:06:24 I started a chemical profit when I was 26,
    0:06:27 I used to say we have a passion for brand,
    0:06:29 attention to detail and a sense of camaraderie
    0:06:32 and give people a sense of what those core associations are.
    0:06:37 But at the top, these firms are delivering across
    0:06:40 the two points of a brand and that is the promise
    0:06:43 and then the performance has to match the promise.
    0:06:45 So when we say we’re proud of our progress
    0:06:48 as Cheryl Sandberg said at Facebook,
    0:06:53 we found out that she was lying over and over and over.
    0:06:55 Thanks for the question.
    0:06:57 Question number two.
    0:07:00 – Hi Prop G, Naomi here from Sydney, Australia.
    0:07:03 We were in my late 20s working in finance
    0:07:05 and I just made the big move to New York City this year,
    0:07:08 taking your advice to get to a big city.
    0:07:11 Now here’s the thing, in the midst of meeting
    0:07:14 all these new people, both personally and professionally,
    0:07:18 I’ve hidden unexpected and rather awkward problem.
    0:07:24 My name, I share it with a very popular adult show star
    0:07:28 who is very, very famous for her book fetish content.
    0:07:30 And while I doubt that any reasonable person
    0:07:34 would confuse my accomplishments with her accomplishments,
    0:07:37 it’s wreaking absolute havoc on my personal brand.
    0:07:40 I realize, of course, that I can’t win an SEO battle
    0:07:43 against the adult entertainment industry,
    0:07:46 but before my name becomes collateral damage
    0:07:50 in the pursuit of a rebrand, I’d love to get your take.
    0:07:53 Given how seamlessly you have integrated your name
    0:07:57 into your personal brand, what would you do in my shoes?
    0:08:02 And more broadly, how would anyone approach a name change,
    0:08:04 whether it’s from marriage or divorce
    0:08:07 or immigrant simplifying non-ango names?
    0:08:09 How should they think about this?
    0:08:12 Anyway, I’m really looking forward to hearing your thoughts
    0:08:14 and thank you Scott for all the work that you do.
    0:08:17 – God, to be honest, I wasn’t expecting this one.
    0:08:20 Okay, I had sort of a similar issue
    0:08:24 when I first developed a bit of a public footprint,
    0:08:24 if you will.
    0:08:28 Initially, being the narcissist I am,
    0:08:30 I’d always Google my name and what came up first
    0:08:33 about 10, 12 years ago, a gentleman named Scott Galloway
    0:08:37 who played for the West Marine Mariners
    0:08:39 or the New Wales Mariners of football,
    0:08:42 a soccer player in Australia.
    0:08:43 And he was just more famous than me.
    0:08:45 So he came up and I’m like, ah, fuck,
    0:08:46 there’s someone else named Scott Galloway
    0:08:48 that’s more famous than me.
    0:08:50 But over time, if you’re good at what you do,
    0:08:52 eventually, especially I would imagine
    0:08:56 an adult film star, that career wanes.
    0:08:59 I imagine feet age better than most parts of your body,
    0:09:02 but the thing about being an athlete, a musician,
    0:09:03 a model, all the vanity industries,
    0:09:05 and I would imagine being a porn star
    0:09:06 is the reason these industries suck
    0:09:08 is you get worse at them as you get older.
    0:09:10 If you’re an accounting and 98% of industries,
    0:09:12 you get better as you get older.
    0:09:16 I would imagine this adult film stars brand is gonna wane.
    0:09:17 And if you’re good at what you do
    0:09:21 and you have a strong social footprint and you keep at it,
    0:09:22 and this is what happened to me.
    0:09:24 Now, if you do a search, you know,
    0:09:27 Scott Galloway, the Australian football player,
    0:09:29 comes up way, way down the list
    0:09:32 because nothing builds your brand like excellence
    0:09:33 and continuing to do good work.
    0:09:35 Now, in terms of practically,
    0:09:39 what you might wanna do on your social media handles
    0:09:43 is maybe even jokingly say your name and then open paren,
    0:09:47 not the foot fetish woman or not the adult star,
    0:09:51 or always make sure, you know, like add something.
    0:09:54 I say prof G, so people know I’m a professor.
    0:09:58 Professor has a really nice, really nice connotation to it.
    0:09:58 And at the end of the day,
    0:10:01 I think of myself as a teacher, so it fits well.
    0:10:02 It’s easy to say.
    0:10:04 If you were to go through the hassle of a name change,
    0:10:06 which I don’t recommend,
    0:10:09 what you want is something that is easy to spell
    0:10:11 and that there aren’t that many other people
    0:10:12 with the same name.
    0:10:13 And those two are in contradiction with each other.
    0:10:16 Again, though, the key to anything
    0:10:20 is just having, doing good work constantly.
    0:10:23 That’s over the long term, what builds brands.
    0:10:26 Anyways, interesting question.
    0:10:29 We have one quick break before our final question.
    0:10:30 Stay with us.
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    0:13:47 – Welcome back, question number three.
    0:13:48 – Hey there, Prof. G.
    0:13:51 This is Glenn calling from beautiful Brooklyn, New York.
    0:13:53 I recently turned 39 and decided
    0:13:55 to create a pre-40 bucket list
    0:13:56 as a way to challenge and inspire myself
    0:13:58 heading into middle age.
    0:14:00 I’m a senior software engineer and musician,
    0:14:02 have a decent financial plan full in motion,
    0:14:05 and I’m unmarried, although I have a lovely partner
    0:14:07 and neither of us are interested in having children.
    0:14:09 My question for you, Scott,
    0:14:11 is have you ever created bucket lists
    0:14:12 either for a specific milestone like age
    0:14:14 or simply before death?
    0:14:16 And do you have any advice for someone like me
    0:14:18 to set myself up for happiness after 40
    0:14:20 that isn’t just work and play hard?
    0:14:23 Love the pods and thank you for taking my question.
    0:14:25 – Jesus, Glenn, I immediately started searching
    0:14:26 for something more profound,
    0:14:29 and the reality is my only bucket list
    0:14:31 was really just to be rich and awesome
    0:14:33 in that order when I was your age.
    0:14:35 I grew up not with a ton of stress,
    0:14:37 ’cause I was never in poverty,
    0:14:41 but my mom, I was raised by a single immigrant mother
    0:14:42 who lived and died a secretary,
    0:14:44 and money was a real issue for us.
    0:14:46 We were never hungry or anything like that,
    0:14:48 but it was just, I don’t know,
    0:14:49 just from a very early age,
    0:14:52 I connected the dots in a capitalist economy.
    0:14:53 So my only goal, quite frankly,
    0:14:57 was to have economic security.
    0:14:58 I did have a goal around meeting somebody.
    0:15:01 I wanted, I always thought I’d be a really good boyfriend,
    0:15:02 and I was younger.
    0:15:04 I didn’t have a lot of experience with women.
    0:15:06 I caught up fast after,
    0:15:10 I was kind of a late bloomer sexually and romantically,
    0:15:13 but I was tall, skinny, with bad skin,
    0:15:14 so I didn’t get a lot of opportunity.
    0:15:17 And then my skin cleared up, I joined crew,
    0:15:19 I got ripped, started making some money,
    0:15:20 and all of a sudden I’m like,
    0:15:23 “Wow, this whole mating thing,”
    0:15:25 or at least practicing to mate is a lot of fun,
    0:15:28 and I really enjoyed that through my 20s.
    0:15:31 But I never really had a really solid relationship
    0:15:34 like you have until I was older.
    0:15:36 This is kind of an existential question
    0:15:39 that I think you wanna talk to some of your friends about.
    0:15:42 If you have economic security and you’re with a family,
    0:15:44 or you have a good partner,
    0:15:46 then the question becomes more of a,
    0:15:49 “All right, time is gonna go really fast.”
    0:15:54 And you’re gonna be at the end sooner than you think.
    0:15:59 I just had a big birthday, I just turned 50, 60,
    0:16:03 and I was your age, what felt 40 to 60 just flies by.
    0:16:04 And the question is,
    0:16:06 what will you have wanted to accomplish?
    0:16:10 Will you want a set of experiences that are extraordinary?
    0:16:12 Will you want to have established domain expertise
    0:16:13 around something?
    0:16:15 Will you want to have helped others?
    0:16:19 Will you want to be the best in the world at something?
    0:16:21 Will you want to have, at that point,
    0:16:24 your parents will probably be older towards the end,
    0:16:26 have a better relationship with them?
    0:16:28 Do you really wanna explore
    0:16:30 having a very deep and meaningful relationship
    0:16:31 with your spouse and your partner?
    0:16:32 Do you wanna give back?
    0:16:35 I mean, just sort of sit down and say, “Work backwards.”
    0:16:38 But it sounds to me like you’re tracking.
    0:16:40 I mean, I’m just, I’m trying to squeeze the shit
    0:16:42 out of this line called life.
    0:16:44 And for me, getting to a certain level
    0:16:46 of economic security, I saw as paramount in that.
    0:16:48 And that’s probably a bit of an overstatement.
    0:16:50 You can still have an exceptional life without
    0:16:51 having a crazy amount of money,
    0:16:54 but you do need a certain level of economic security.
    0:16:56 And it feels like it’s there.
    0:16:58 And then the thing I love,
    0:17:00 and is finally kicked in for me,
    0:17:01 and it didn’t till later in life,
    0:17:04 but something I get tremendous gratification from,
    0:17:05 is planting trees the shade of which
    0:17:06 I will never sit under.
    0:17:09 And that is getting involved in nonprofits
    0:17:13 and trying to help and provide time, treasure, and talent
    0:17:14 to affect change and improve the lives of people
    0:17:16 who I will never meet.
    0:17:17 That makes me feel very strong.
    0:17:20 These are deeply personal issues.
    0:17:23 I work through and I try and limit it to two or three things
    0:17:26 ’cause once you get beyond two or three things,
    0:17:28 you know, you forget the first one
    0:17:31 and also maybe even work with somebody around this stuff.
    0:17:34 But my brother, this is the mother of all good problems,
    0:17:35 the fact that you were thinking this way.
    0:17:38 99% of the world’s population is trying to figure out
    0:17:40 how to keep the lights on, pay the rent,
    0:17:41 make sure their kids are safe,
    0:17:44 have decent healthcare, put food on the table.
    0:17:48 So just take stock of your blessings as indicated by
    0:17:51 that this is a quote unquote really, really good problem.
    0:17:53 Glenn, I appreciate the question.
    0:17:56 That’s all for this episode.
    0:17:57 If you’d like to submit a question,
    0:17:58 please email a voice recording
    0:18:00 to officehours@proptimedia.com.
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  • Raging Moderates — Democrats Point Fingers as Trump Assembles Cabinet

    AI transcript
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    0:01:15 (upbeat music)
    0:01:16 – Many songs are written to make us dance,
    0:01:18 others to deal with heartbreak,
    0:01:21 but it’s the rarest song that makes us feel freaky.
    0:01:23 I’m musicologist Nate Sloan,
    0:01:25 and I’m songwriter Charlie Harding.
    0:01:26 And on this week’s episode of Switched On Pop,
    0:01:29 we delve into a trilogy of new releases
    0:01:32 from well-established Freaks, Lady Gaga,
    0:01:35 Tyler the Creator, and a long-awaited return, The Cure.
    0:01:39 Listen to the musicology of freaky songs
    0:01:41 on Switched On Pop, presented by Nissan.
    0:01:45 (upbeat music)
    0:01:48 – Welcome to Raging Moderates, I’m Scott Galloway.
    0:01:49 – And I’m Jessica Tarlove.
    0:01:50 – Jess, how are you?
    0:01:52 – I’m okay.
    0:01:54 – Yeah? – I’m here, how are you?
    0:01:57 – I would describe my condition as stable.
    0:01:58 – Okay, yeah.
    0:02:00 – I’m still processing, but I’m out of my pajamas.
    0:02:02 Actually went outside today.
    0:02:03 – Yeah, you look lovely. – It got above 60,
    0:02:07 so it’s like, that’s the equivalent of a visa for London.
    0:02:10 And I went and had lunch.
    0:02:12 I was social.
    0:02:14 I didn’t order alcohol.
    0:02:17 I haven’t been watching Netflix nonstop.
    0:02:18 Some of my stocks are down today,
    0:02:21 so it’s back to kind of regular times.
    0:02:22 – Why are stocks going down?
    0:02:25 Are we not Trump high anymore?
    0:02:26 – Well, they went up three or four days in a row,
    0:02:29 but I think they’ve taken a bit of a,
    0:02:31 well, at least my stocks are down today.
    0:02:33 I don’t know what’s going on.
    0:02:36 But in general, it just feels like slowly, but surely.
    0:02:38 Just amazes me that you always overestimate
    0:02:40 the impact of everything in the moment.
    0:02:42 One of my learnings in life is nothing is ever as good
    0:02:43 or as bad as it seems.
    0:02:47 And I think you always estimate the ripple effects
    0:02:49 of things that seem big in the moment
    0:02:51 and underestimate the knock on effects,
    0:02:52 or second order effects of things
    0:02:55 that don’t seem that big at the time.
    0:02:57 – Yeah, the long tail on despair,
    0:02:59 maybe, that will be coming or-
    0:03:01 – I like that.
    0:03:02 – The long tail of despair.
    0:03:03 – That’s my biography.
    0:03:05 You just titled my biography.
    0:03:07 The long tail of despair.
    0:03:09 – All right, I want to write her credit though,
    0:03:10 when it comes out.
    0:03:13 But I think that probably is happening for people
    0:03:18 because they don’t want to do 2016 again.
    0:03:20 Like, however you felt about it,
    0:03:24 we can all agree that it was a colossal overreaction
    0:03:28 or underreaction, depending on what camp you were in.
    0:03:30 And I think people these days
    0:03:33 want to seem really cool and together.
    0:03:37 Like, let’s be real guys, the sun will shine tomorrow.
    0:03:38 I will get out of my stretchy pants
    0:03:41 and I will have lunch and won’t have a cocktail,
    0:03:42 like Scott Galloway.
    0:03:45 But your lunch cocktail will probably come
    0:03:49 in like three months when the deportation force starts.
    0:03:50 – That would work.
    0:03:51 – And the long tail of despair finds him.
    0:03:53 – The deportation force.
    0:03:56 – I mean, they do know branding, right?
    0:04:00 Like, these are great marketers over there at Trump HQ.
    0:04:01 – Okay, in today’s episode of Raging Moderates,
    0:04:04 we’re discussing Democrats start the blame game.
    0:04:07 Trump’s cabinet starts to take shape
    0:04:08 and how we think the media should handle
    0:04:09 political coverage moving forward.
    0:04:12 And we try to end on a positive note.
    0:04:14 So, Harris conceded last week,
    0:04:16 oh my, this is my favorite stat.
    0:04:20 Did you see that bar graph of mentions
    0:04:22 of election interference on Twitter
    0:04:23 and how it was just enormous?
    0:04:26 And then about the moment it became clear
    0:04:29 he was going to win, they just stopped.
    0:04:30 They just stopped.
    0:04:33 So, when the Democrat has a shot,
    0:04:35 there’s election interference anywhere.
    0:04:38 When the Republican is winning, it’s democracy at work.
    0:04:40 Anyways, sorry I couldn’t help that.
    0:04:41 – Funny how that works plus the algorithm.
    0:04:42 – Crazy, right?
    0:04:45 So anyways, they began pointing fingers,
    0:04:46 Democrats behind the scenes,
    0:04:48 some blame Biden for running it all,
    0:04:49 saying you should have stepped aside sooner.
    0:04:51 Others argue Harris should have been tougher on issues,
    0:04:55 including attacking Trump’s billionaire ties.
    0:04:56 Jess, where do you think?
    0:04:57 I think it’s more productive actually
    0:04:59 to talk about why he won than why she lost.
    0:05:02 But anyways, we’re not here to be productive.
    0:05:03 We’re here to be entertaining.
    0:05:05 Where do you think the real blame lies here?
    0:05:07 What do you think happened?
    0:05:09 – Well, too many things happened for the way
    0:05:11 that people are doing the blame game.
    0:05:14 Like picking a lane is not smart here.
    0:05:15 There are, you know, in Texas,
    0:05:18 their highways have like six lanes on each side.
    0:05:21 That’s basically the road to loss here.
    0:05:24 And I think the road to winning for Trump as well,
    0:05:26 since we should do this evenly.
    0:05:29 And I like your framing about how he won as well,
    0:05:32 because that shows the Democrats’ weakness in all of this.
    0:05:35 And I’m really in two minds about it,
    0:05:37 because on the one hand,
    0:05:42 what looked like a monster landslide on election night
    0:05:45 is not that once all the votes are counted.
    0:05:49 And this was part of the fake results
    0:05:51 or the blue pilling of it where people were like,
    0:05:53 well, where did those 15 million votes go?
    0:05:54 You know, ’cause Biden, on election night,
    0:05:57 Kamala had 15 million less votes than Biden had gotten,
    0:05:59 but they hadn’t counted the West Coast
    0:06:02 and some states go more slowly, et cetera.
    0:06:05 And now it’s looking like it’ll be a little bit less
    0:06:07 than it was in 2020,
    0:06:10 but his win is gonna be about 1.5% in the popular vote,
    0:06:12 which puts his margin at number 50
    0:06:15 among all 55 presidential elections.
    0:06:18 And his electoral college win will be number 43
    0:06:21 amongst all 60 presidential elections.
    0:06:24 Now, I’m not saying that to minimize
    0:06:25 what Donald Trump pulled off,
    0:06:26 because putting together a coalition–
    0:06:27 – Oh, you’re a little bit.
    0:06:28 You’re minimizing a little bit.
    0:06:33 – I am trying to be a realist in the sea
    0:06:35 of hyperbole about this.
    0:06:38 And I think it is important that people
    0:06:40 who care about this election,
    0:06:42 who dedicated their time,
    0:06:44 who got out there and knocked on doors
    0:06:46 and made phone calls, et cetera,
    0:06:51 understand that this was not the biggest shellacking
    0:06:52 that ever existed.
    0:06:54 It was a loss and it was really bad
    0:06:55 because it was to Donald Trump,
    0:06:56 but that’s a big part of it.
    0:06:59 – I think we got the absolute shit kicked out of us.
    0:07:01 And this election isn’t the popular vote,
    0:07:03 it’s the electoral vote.
    0:07:06 But the bottom line is they went 100% where it mattered.
    0:07:08 And we were all, I don’t know about you,
    0:07:10 but all my friends were texting me
    0:07:12 from the ground in Scranton, Pennsylvania,
    0:07:14 saying we’re 10 to one knocking on doors.
    0:07:15 You know what technology did not work?
    0:07:17 Knocking on doors.
    0:07:19 And in a age of polarization,
    0:07:21 in this type of divisiveness,
    0:07:22 where everyone’s in their own bubble,
    0:07:26 I don’t ever think you’re gonna see 45, 55, or 60, 40,
    0:07:28 like you did with LBJ.
    0:07:29 I don’t think there’s any getting around it.
    0:07:30 The Democrats are trying to say,
    0:07:32 “Well, slow your roll.
    0:07:34 “It wasn’t as big a victory as you think.”
    0:07:35 They fucking destroyed us, Jess.
    0:07:39 I said I’m in two minds
    0:07:41 and you’re only picking on one of my minds.
    0:07:42 Sorry, I interrupt you.
    0:07:42 Go ahead, go ahead.
    0:07:45 No, give us the other mind.
    0:07:46 Give us the other mind.
    0:07:47 That’s correct.
    0:07:49 Obviously, I mean, sweeping all the battlegrounds,
    0:07:52 I mean, that was the number one model
    0:07:56 out of Nate Silver’s probability model.
    0:07:59 And the number two model that happened the second most times
    0:08:01 was Kamala Harris wins all seven states.
    0:08:02 And that’s what happens
    0:08:04 when you have a margin of error race.
    0:08:07 I was just saying like in Wisconsin, for instance,
    0:08:10 she got more votes than Joe Biden did in 2020
    0:08:12 and the margin was like 30,000 votes.
    0:08:15 My point is that that could have been winnable.
    0:08:19 We’re not talking about he won 300,000 more votes
    0:08:21 in Wisconsin or something like that.
    0:08:22 But now I’m looking to–
    0:08:25 We almost won Wisconsin.
    0:08:29 Well, Wisconsin matters a lot every four years to people.
    0:08:30 It should matter more in general.
    0:08:33 On the shellacking front,
    0:08:37 I think this coalition that he put together,
    0:08:40 if it holds, will cause
    0:08:42 one of the biggest political realignments,
    0:08:45 certainly that we’ve seen in modern history.
    0:08:48 And that there appears,
    0:08:51 besides having more of a working class economic message,
    0:08:54 which frankly, I think Biden and Harris
    0:08:55 had a decent amount of.
    0:08:57 I mean, they’re walking picket lines, right?
    0:08:59 They’re talking about raising the minimum wage.
    0:09:02 They’re giving the teamsters their pensions, et cetera,
    0:09:07 and Trump’s up there like I should cut taxes for my pals.
    0:09:08 I don’t know how you put that back together.
    0:09:09 And I was digging into,
    0:09:12 ’cause we definitely have to talk about the men.
    0:09:14 The men are not all right, as you’re always saying,
    0:09:17 but the women weren’t all right either, the young women.
    0:09:18 I’m not just talking about, you know,
    0:09:21 Gen X women in the suburbs who were like, you know what,
    0:09:25 maybe I had an abortion referendum that I could vote yes on
    0:09:26 and then I’m gonna vote for Trump.
    0:09:31 Talking about Gen Z women won seven points in his direction.
    0:09:34 So yes, the spread was still massive between them,
    0:09:36 but young people, I think because of how
    0:09:39 they are consuming information and the data on that is wild
    0:09:44 that like if you read newspapers or watch linear TV,
    0:09:46 you are voting for Harris.
    0:09:49 If you watch YouTube, listen to podcasts
    0:09:52 and go on Reddit, then you’re voting for Trump.
    0:09:55 And the level of misinformation that it was like they did,
    0:09:58 the Washington Post did a blind test of all the policies,
    0:10:01 the most popular ones were Kamala Harris’s policies.
    0:10:05 And then there was also a survey that looked at
    0:10:08 what Republicans and Democrats think about reality,
    0:10:11 like where the economy is, where crime is.
    0:10:16 And we live in two absolutely diametrically opposed worlds,
    0:10:20 one of which accurately reflects the numbers out there.
    0:10:22 That’s the Harris supporters in this.
    0:10:25 And then one that reflects a different reality
    0:10:27 that I don’t wanna say isn’t real,
    0:10:31 but it’s a lived experience that doesn’t coincide
    0:10:33 with the facts on the ground, I guess,
    0:10:35 is the polite way of saying it.
    0:10:38 But I give it to you, Shalakar.
    0:10:40 – So look, you brought up a couple different
    0:10:43 special interest groups, which are worth talking about.
    0:10:45 Unions, the sister soldier moment
    0:10:47 that I think they should have had,
    0:10:49 and that I’ve been talking about,
    0:10:51 and I get a decent amount of pushback,
    0:10:53 is that unions are now a failed construct.
    0:10:57 And to continue to cater to 9% of the workforce
    0:10:59 or 3 1/2% of the population
    0:11:01 because they do give a lot of money.
    0:11:03 And quite frankly, in this campaign,
    0:11:04 they were threatening, they were flirting
    0:11:06 with the other side.
    0:11:09 I just don’t think the juice is worth to squeeze.
    0:11:12 Now, minimum wage needs to come up substantially.
    0:11:14 And this falls into the special interest group.
    0:11:16 There should be one union in my view in the US.
    0:11:17 It should be the US federal government
    0:11:20 that pays people, raises minimum wage such that
    0:11:23 if you work 40 hours a week, you’re not in poverty.
    0:11:23 It’s pretty simple.
    0:11:26 And that would be like 20 bucks in some states,
    0:11:27 25 in others, and if the minimum wage
    0:11:30 you just kept paced with productivity or inflation,
    0:11:31 it would be there.
    0:11:34 Because in my view, the majority of unions
    0:11:36 are disorganized, inefficient,
    0:11:39 and there’s also a decent DNA of corruption.
    0:11:43 The head of UAW, it seems like a bright guy,
    0:11:44 serves as a constituent as well.
    0:11:47 The former CEO or president of UAW’s in prison
    0:11:52 and the former CEO before him is also in prison.
    0:11:53 So I just think they were stupid
    0:11:57 not to continue to pander to unions.
    0:12:00 I’m a hammer, ideological, everything I see as a nail
    0:12:03 in the sense that I genuinely believe
    0:12:06 everything came down to, almost everything here
    0:12:07 came down to one thing.
    0:12:10 And that is a 30 year old man or woman isn’t doing as well
    0:12:11 as his or her parents were at the age of 30.
    0:12:15 And that has disproportionately impacted young men.
    0:12:19 And if you look at the age group that swung the most violently,
    0:12:22 it was young people who swung 11 points
    0:12:23 towards Trump versus 2020.
    0:12:26 And then the second group that swung most violently
    0:12:28 was 45 to 64.
    0:12:32 And the thing that kind of drove me a little bit nuts
    0:12:36 was Stephanie Ruel, who I adore had a guy on her program,
    0:12:37 I forget his name, he’s a talented guy
    0:12:40 and he gave this very impassioned speech for,
    0:12:42 “America doesn’t wanna face the hard reality
    0:12:44 “that they’re just not comfortable
    0:12:45 “with the browning of America
    0:12:48 “and they weren’t comfortable with a black president.”
    0:12:51 And quite frankly, I just don’t think that’s true.
    0:12:52 That not only is inaccurate,
    0:12:57 but it continues to promote a trope that hurts us.
    0:13:01 And that is Democrats continue to see everything
    0:13:05 through the lens of identity specifically race,
    0:13:08 which is implicitly accusing the other side of bigotry.
    0:13:09 And the other side will say,
    0:13:12 and what I believe with some credibility,
    0:13:14 that folks, you guys are the guys,
    0:13:18 you guys are the folks obsessed with race, not us.
    0:13:20 – Your thoughts.
    0:13:21 – Yeah, I think the racial realignment,
    0:13:24 especially with the Latino population,
    0:13:26 we should be specific that the only group
    0:13:30 where a majority went for Trump were Cubans.
    0:13:34 So breaking it down is important
    0:13:36 instead of talking about this as a monolith
    0:13:39 or maybe even 53% of Venezuelans,
    0:13:42 but 66%, 67% I think of Cubans did,
    0:13:47 which makes a lot of sense kind of looking at people’s past
    0:13:49 where they came from and where they live.
    0:13:54 But I think honestly the answer to this question
    0:13:58 and the Republicans are going to have work to do as well
    0:14:01 in 2028 when they don’t have Trump running
    0:14:05 because the Republican brand itself is not a good one.
    0:14:08 It’s not as bad right now as the Democratic brand,
    0:14:12 but we need to really get rid of all of the labels on this.
    0:14:15 And the success stories that have come out
    0:14:18 of the Democratic side in this election like Colorado,
    0:14:21 which is the only state that moved to the left in full
    0:14:24 and Jared Polis, the governor, gave an interview about it
    0:14:27 and said, well, you know what I did?
    0:14:30 I built affordable housing and I cut taxes
    0:14:32 and I balanced budgets and I told people,
    0:14:35 you know what, you’re actually in charge of your family,
    0:14:36 not the government, right?
    0:14:38 Like if you want your kids to play unsupervised
    0:14:40 on your coldest sack, that’s none of my business
    0:14:44 and anyone who’s narking on you, I don’t really care, right?
    0:14:47 Or Pat Ryan, the congressman from upstate New York,
    0:14:52 won I think by 13 points and he just ran on common sense
    0:14:55 and he’s like, I campaigned with AOC
    0:14:57 when it made sense to campaign with AOC
    0:14:59 and I leaned into the moderate wing of the party
    0:15:01 when I needed to do that.
    0:15:04 And I almost feel like we should become
    0:15:09 like a blind taste test election system in this country.
    0:15:11 Like what Dan Osborne was doing in Nebraska
    0:15:14 where the guy was getting within two points
    0:15:17 of a two-term sitting senator running as an independent
    0:15:19 where he just said, this is who I am
    0:15:21 and this is what I believe in.
    0:15:23 And you put that into whatever box you might need to
    0:15:25 but like just check my name
    0:15:27 and I’m going to deliver on these things.
    0:15:31 Last week I talked about that prison guard
    0:15:32 who was interviewed and said,
    0:15:34 I think the Democratic party doesn’t respect me,
    0:15:36 they don’t like me very much.
    0:15:40 And there was a focus group over the weekend, CNN did,
    0:15:42 and a woman was asked to describe Trump
    0:15:45 and the GOP and Harris and the Democrats as well.
    0:15:48 And she called the GOP crazy and the Democrats preachy.
    0:15:50 And when they asked for her preference,
    0:15:53 she sounded broken having to say this,
    0:15:58 but she said, crazy doesn’t look down on me, preachy does.
    0:16:03 And I think that all of these people just took a flyer
    0:16:07 on the guy who, yes, is positioned
    0:16:09 as a successful businessman in the economy
    0:16:09 as a top concern.
    0:16:11 So you think that that’s going to work out.
    0:16:13 But someone that they genuinely don’t believe
    0:16:16 actually cares that much about them as an individual,
    0:16:20 like how they live, who they love, what they practice.
    0:16:23 They’re like, Donald Trump, he just exists, right?
    0:16:25 And he doesn’t align with anything.
    0:16:28 He likes some Republicans, he hates other Republicans.
    0:16:31 Like he’s not a party guy.
    0:16:32 And you saw it like in Nevada,
    0:16:33 this was crazy to Jackie Rose
    0:16:37 and the Democrat was able to hang on and she won her race.
    0:16:39 There are 70,000 people who showed up
    0:16:41 and voted for Donald Trump
    0:16:43 and didn’t bother with the bottom of the ballot.
    0:16:46 Because what do they care?
    0:16:49 They’re just voting for the guy who managed to convince us
    0:16:51 like Kamala broke it, Trump will fix it.
    0:16:53 There’s no party attached to that.
    0:16:55 It’s a one man brand.
    0:16:59 – Okay, let’s take a quick break.
    0:17:00 Stay with us.
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    0:18:17 Many songs are written to make us dance,
    0:18:19 others to deal with heartbreak,
    0:18:22 but it’s the rarest song that makes us feel freaky.
    0:18:24 I’m musicologist Nate Sloan
    0:18:25 and I’m songwriter Charlie Harding.
    0:18:27 And on this week’s episode of Switched On Pop,
    0:18:30 we delve into a trilogy of new releases
    0:18:31 from well-established freaks.
    0:18:34 Lady Gaga, Tyler the Creator,
    0:18:36 and along the way to return the cure.
    0:18:39 Listen to the musicology of freaky songs
    0:18:42 on Switched On Pop presented by Nissan.
    0:18:46 Thumbtack presents the ins and outs
    0:18:49 of caring for your home.
    0:18:52 Out, indecision, overthinking,
    0:18:55 second guessing every choice you make.
    0:18:58 In, plans and guides that make it easy
    0:19:00 to get home projects done.
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    0:19:09 In, knowing what to do, when to do it,
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    0:19:24 – So I wonder if I don’t think that for example,
    0:19:25 he’s gonna get through these tariffs
    0:19:27 ’cause something I keep thinking about
    0:19:29 is I think he’s a lame duck president
    0:19:31 after about 90 days.
    0:19:33 He’s gonna be a lame duck president
    0:19:35 and around economic issues,
    0:19:37 I think and it’s gonna be such a close call
    0:19:40 and it’s basically a divided government.
    0:19:41 And everyone’s like, well, they got a majority,
    0:19:43 they’ll do whatever they want.
    0:19:45 I’m not as certain about that
    0:19:47 because I think especially when it comes to tariffs,
    0:19:50 there’s a lot of Republicans that understand economics.
    0:19:52 And I think they’ll decide it would win in their district
    0:19:55 to talk about a populist argument of,
    0:19:56 this is nothing but a tax increase
    0:19:57 and I’m not down with this.
    0:20:01 And he doesn’t have the same power to ruin careers,
    0:20:05 especially post-2026.
    0:20:06 You really had to kiss the ring here
    0:20:09 ’cause Republicans saw accurately quite frankly
    0:20:12 that he could ruin their careers.
    0:20:15 I think he’s not gonna have nearly the power.
    0:20:17 The question, one question I would have for you
    0:20:21 is as both of us are Jews,
    0:20:24 do you think that her stance on Israel Gaza played a role?
    0:20:26 Do you think she should have taken
    0:20:27 a more supportive position on Israel?
    0:20:29 People including Jackie Rosen,
    0:20:33 Elisa Slotkin and Josh Stein all outperformed her.
    0:20:36 Do you think she should have been more assertive
    0:20:38 around support of Israel
    0:20:43 or more supportive around her support of Palestinians?
    0:20:45 – This is where if we’re doing the blame game,
    0:20:48 I actually have some shade
    0:20:51 that I would like to throw at the Biden camp
    0:20:53 because now all of this, quote unquote,
    0:20:55 internal polling that they had is leaking out.
    0:20:58 And they knew that we were losing Muslim voters
    0:21:01 that like Dearborn could have gone for Trump
    0:21:04 before October 7th, right?
    0:21:07 Like that this isn’t something that just popped up.
    0:21:11 And when you look at a majority Muslim district like that,
    0:21:12 that ends up going for Donald Trump
    0:21:14 who has said things like,
    0:21:17 “I’m going to turn Gaza into a parking lot.”
    0:21:21 You have to think that that’s bigger than what one person,
    0:21:22 even if they are running for president,
    0:21:25 is saying at their campaign speeches, right?
    0:21:28 Like that is something that was almost pre-ordained
    0:21:29 in a different kind of way.
    0:21:32 But yeah, I think that she’s probably looking at it now
    0:21:37 and thinking we, like her and Biden
    0:21:39 should have been tougher out of the gate
    0:21:42 about the college campus protests.
    0:21:46 I think that’s one of these notches in the disorder belt
    0:21:48 as it were where people just feel like
    0:21:51 what is going on in this country, right?
    0:21:54 That there are kids being blocked from going to the cafeteria
    0:21:56 or to their libraries or being beaten up
    0:21:58 in the worst case scenario.
    0:22:03 And you look at these other open Zionists
    0:22:04 that outperformed her.
    0:22:07 I mean, Jackie Rose, I mean,
    0:22:09 she was the president of her synagogue,
    0:22:10 which is probably the hardest job
    0:22:13 you could possibly have if you know Jews.
    0:22:14 – I can’t even imagine.
    0:22:16 – No, like the Senate is nothing, right?
    0:22:18 Dealing with those characters.
    0:22:22 And all the high-profile Jews were just fine
    0:22:23 and they never waffled on this.
    0:22:26 Of course they supported the First Amendment,
    0:22:30 but they were 24 hours a day, bring them home.
    0:22:33 We support a two-state solution and they did really well.
    0:22:37 And we should note that Jewish voters came out for Kamala.
    0:22:40 So 71%, I think it’s the tally as of now.
    0:22:42 So we’ll see where it shakes out, but she’s gonna get around.
    0:22:45 – Do you know how it compares to 2020?
    0:22:45 – It’s about the same.
    0:22:47 He got like 70%.
    0:22:49 So there was no mass exodus.
    0:22:50 And I think that that is,
    0:22:52 well, a lot of that is driven by Jewish women,
    0:22:54 which were the second most supportive group
    0:22:56 for her behind black women.
    0:23:01 But American Judaism is now intertwined
    0:23:05 with a lot of general liberal values, right?
    0:23:08 Like it’s not just about what do you think is going to happen
    0:23:11 in the Middle East in the next four years.
    0:23:15 It has to do with supporting education,
    0:23:16 a woman’s right to choose,
    0:23:18 that people have a better quality of life,
    0:23:20 cutting taxes for middle-class people,
    0:23:22 raising taxes on those that can afford it.
    0:23:24 I mean, that’s all part of, as a Jew myself,
    0:23:26 that’s part of my identity.
    0:23:28 And people voted accordingly.
    0:23:32 I think they also saw Trump as someone
    0:23:34 that talks out of both sides in their mouth, right?
    0:23:37 And that today he sounds really good for us,
    0:23:39 but what does he sound like tomorrow?
    0:23:43 And what will he do to our life at home here in the US
    0:23:46 that’s going to make it so whatever is offset
    0:23:49 by what’s happening in Israel isn’t necessarily worth it.
    0:23:52 So yeah, I think she could have leaned into that more
    0:23:54 I don’t know if it would have made up the difference,
    0:23:59 the 50,000 votes, 60, 70, I think in Pennsylvania,
    0:24:02 but I would have liked it.
    0:24:06 I mean, we talked about this as a moral issue of our time,
    0:24:10 right, almost akin to being pro-life
    0:24:12 and saying if we end up losing elections,
    0:24:15 because of this, because of our pro-life stance,
    0:24:17 so be it because it’s that important
    0:24:19 and supporting Israel at this moment,
    0:24:21 I think is a bit of a pro-life stance.
    0:24:24 And that doesn’t mean disregarding the Palestinians
    0:24:27 who have needlessly passed away and the children,
    0:24:30 it’s horrific, but I would have liked that.
    0:24:31 What about you?
    0:24:33 – I think voters would rather disagree with you
    0:24:36 on an issue as long as you seem resolute.
    0:24:37 – Yeah.
    0:24:40 – And that is, in my view, to be supportive of Israel,
    0:24:42 full-throated supportive of Israel,
    0:24:44 and this is the problem, they were.
    0:24:47 Biden and Harris actually were more supportive of Israel.
    0:24:50 Anytime anyone gave Biden shit for Israel,
    0:24:51 I’m like, who’s been more supportive?
    0:24:53 Who else sent two carrier strike forces
    0:24:56 to the Mediterranean to tell around to sit the fuck down?
    0:24:56 Who else did that?
    0:25:01 But they couldn’t get credit for it
    0:25:04 ’cause they kept conditioning everything with,
    0:25:06 I don’t like the way they’re prosecuting the war.
    0:25:09 And if you look at Reagan, I think of him,
    0:25:11 people would read his issues and where he stood
    0:25:12 and the majority of Americans disagreed with him,
    0:25:14 but the majority of Americans voted for him
    0:25:16 ’cause he seemed very resolute.
    0:25:19 And the ultimate example of that was Bush, W,
    0:25:22 never seemed to waver over what is arguably
    0:25:23 the greatest geopolitical catastrophe
    0:25:26 since our entry into the war in South Vietnam
    0:25:28 or in the Southeast Asia of Vietnam.
    0:25:31 He seemed very resolute about Iraq,
    0:25:34 probably the stupidest war we’ve ever fought.
    0:25:36 Americans want someone who’s resolute,
    0:25:39 so I believe supporting Israel would have been the best move.
    0:25:41 Quite frankly, the second best move
    0:25:43 probably would have been going all in and saying,
    0:25:47 we need a ceasefire now, we are putting huge pressure on ’em,
    0:25:50 this is not humanitarian, you know,
    0:25:53 really gone and very pro-Palestinian.
    0:25:55 The worst thing that could have done is what they did.
    0:25:58 And that is they came across as mealymouth.
    0:26:01 They came across as, yeah, but,
    0:26:05 and I just think that made them look weak.
    0:26:06 And what’s interesting is the stuff I’ve seen,
    0:26:10 the exit polling I’ve seen around Muslim Americans,
    0:26:12 a surprising number of them in Michigan went Trump
    0:26:16 and the interview I saw, the guy said,
    0:26:19 I’d rather be stabbed in the face than stabbed in the back.
    0:26:22 And then the other point that you,
    0:26:24 I don’t know, that you’ve inspired,
    0:26:27 I love Maureen Dowd, and every time I mention her name,
    0:26:29 I can’t get over the amount of hate mail I get.
    0:26:31 I think she’s such a talented woman.
    0:26:34 And she’s actually quite lovely personally.
    0:26:36 – Yeah, and she is incredibly talented,
    0:26:39 but the Maureen Dowd anger goes back to the ’90s
    0:26:41 and what she wrote about Hillary, but yeah.
    0:26:43 – She’s polarizing, there’s no doubt about it.
    0:26:45 But I just, I love her writing.
    0:26:47 And she wrote this interesting article,
    0:26:49 basically saying woke is broke.
    0:26:51 And it wasn’t her article, but there was a comment in there
    0:26:55 that I thought was so incredibly intelligent.
    0:26:57 I wish I had the person’s name.
    0:27:01 But they basically said, this was a vote against hypocrisy.
    0:27:04 And that is Democrats believe in free speech
    0:27:08 until a center right conservative person shows up on campus.
    0:27:12 They believe in rule of law until people start
    0:27:15 brazenly and openly stealing from stores
    0:27:18 in Democratic cities or trespassing on campuses.
    0:27:20 They believe in COVID lockdowns
    0:27:23 until there’s a Black Lives Matter march.
    0:27:25 They believe in science
    0:27:27 until someone born with a penis
    0:27:29 wants to play in women’s sports.
    0:27:33 You wanna talk about a layup for the Republican party
    0:27:36 to let people born with a penis
    0:27:40 have testosterone flow over their bone structure
    0:27:41 and muscle structure.
    0:27:44 And then compete in women’s sports.
    0:27:48 I mean, have we gone fucking insane?
    0:27:53 And then, I mean, there was just so many kind of layups.
    0:27:55 Anyways, this point was saying
    0:27:59 we just come across as hypocrites.
    0:28:01 And it really struck me.
    0:28:03 I thought, wow, that was a really
    0:28:06 prescient point that this individual was making.
    0:28:10 But I don’t think that it was that she lost Jews.
    0:28:12 I think she lost a lot of voters
    0:28:15 because she came across as trying to dance
    0:28:17 between the raindrops.
    0:28:19 And I hate to say it, but a guy who says,
    0:28:20 turn the place into a parking lot.
    0:28:23 Yeah, you go, that’s not a very thoughtful position.
    0:28:27 But I appreciate his balls and his willingness to say,
    0:28:28 this is how I feel.
    0:28:32 I’m not morally struggling with this.
    0:28:34 I have moral clarity on it.
    0:28:36 And I’m not saying that’s the way people should vote.
    0:28:38 There’s a nuanced view here.
    0:28:41 This is a complicated situation.
    0:28:45 But I think that even more Muslim Americans
    0:28:48 than anticipated, people want a president who’s resolute,
    0:28:51 not necessarily a president who is right.
    0:28:55 Well, that speaks to this feeling
    0:28:58 that’s been communicated across all minority groups,
    0:29:01 which is the belief that actually everybody is racist,
    0:29:04 that black voters are saying, Latino voters are saying,
    0:29:08 it’s not as if we think Democrats aren’t racist.
    0:29:12 It’s just packaged up instead of told to our face.
    0:29:15 Like you said, the stab in the front versus stab in the back.
    0:29:18 And one thing that I’ve been thinking about a lot
    0:29:22 is this pervasive feeling of betrayal
    0:29:26 that core Democratic voters have been feeling
    0:29:29 and it’s been pent up for years,
    0:29:32 going back to COVID policy.
    0:29:36 Like you can’t be with your loved ones as they’re dying.
    0:29:38 Your kids can’t be in school.
    0:29:39 We need to shut everything down.
    0:29:41 Inflation is transitory.
    0:29:44 Oh, the border isn’t open.
    0:29:48 Oh, Joe Biden is fine until he’s not fine.
    0:29:51 And I feel part of the problem for sure,
    0:29:54 because I definitely sat on TV saying like,
    0:29:55 he can do this job.
    0:29:58 And I think generally he could with the support
    0:30:00 of his cabinet, once the debate happens,
    0:30:02 it was obviously the right thing for him
    0:30:05 to not be running anymore.
    0:30:08 But taken together with how people were feeling
    0:30:10 that we were repeatedly asking them
    0:30:13 to not believe their lying eyes, right?
    0:30:15 What they had seen on the subway to the grocery store.
    0:30:18 Sarah Longwell from the Bulwark has this great line,
    0:30:20 she was being interviewed and said,
    0:30:22 over and over in focus groups,
    0:30:24 people didn’t know what authoritarian meant,
    0:30:27 but they could tell you exactly how much their eggs cost.
    0:30:31 Right, like the disconnect between the messaging on that.
    0:30:34 But over the weekend, it leaked out that,
    0:30:37 this wasn’t exactly Nancy Pelosi and Obama’s plan,
    0:30:39 that they wanted Biden out and they were supposed
    0:30:43 to be a primary and as kind of like an FU to them,
    0:30:48 Biden endorsed Kamala and sent us on this journey.
    0:30:53 And I think Nat Nat, she did run as good of a campaign,
    0:30:57 I guess as was possible considering the timeframe
    0:31:01 and also certain issues that she had,
    0:31:04 like not being able to answer questions directly,
    0:31:07 like on the view, which James Carville says,
    0:31:10 it’s the moment this ended.
    0:31:11 Essentially, when Sonny Hostin was like,
    0:31:12 how will you be different than Biden?
    0:31:14 She couldn’t do it.
    0:31:16 – Let’s take a quick break.
    0:31:17 When we come back, we’ll talk about
    0:31:20 how Trump’s cabinet is taking shape, stay with us.
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    0:33:45 a message from the government of BC.
    0:33:47 Welcome back.
    0:33:49 Trump’s transition efforts are in full swing
    0:33:50 at his Mar-a-Lago residence.
    0:33:51 He made his first major appointment,
    0:33:54 selecting Suzy Wiles as his White House Chief of Staff,
    0:33:57 making her the first woman in history to hold this position.
    0:33:59 Trump also announced that Tom Homan
    0:34:01 will oversee the nation’s borders
    0:34:02 and offer Rep Elise Stefanik,
    0:34:04 the role of U.S. Ambassador to the U.N.
    0:34:06 He’s expected to announce Stephen Miller
    0:34:08 as Deputy Chief of Staff for policy,
    0:34:09 and he’s ruled out cabinet positions
    0:34:11 from Mike Pompeo and Nikki Haley,
    0:34:13 who held top foreign policy roles
    0:34:14 in his previous administration.
    0:34:17 What are your thoughts on his pick so far?
    0:34:19 Well, I think it’s cool that Suzy Wiles
    0:34:23 is the first female Chief of Staff in American history.
    0:34:27 I’m not one who says that she deserves to be on the cover of Vogue
    0:34:29 just ’cause that’s what the Democratic version
    0:34:31 would get of this, but I do think that
    0:34:34 moves towards parity should be celebrated,
    0:34:37 and Suzy Wiles did an incredible job, right?
    0:34:41 She got someone like Donald Trump
    0:34:42 who had high unfavorables who people think
    0:34:44 is a misogynist and a racist
    0:34:46 and all of these things elected presidents.
    0:34:48 So hats off to you, Suzy.
    0:34:50 And I think that she’ll run a tight ship
    0:34:53 and it feels like there will be order,
    0:34:56 even if it’s an order that I do not enjoy.
    0:34:59 Nikki Haley, was it worth it?
    0:35:01 Whatever you just went through
    0:35:03 over the last year and a half or two years
    0:35:05 to be publicly embarrassed once again
    0:35:08 with the first thing he does basically saying,
    0:35:11 “You’re not gonna get anywhere near my new house
    0:35:14 “or my administration is embarrassing.”
    0:35:19 And Mike Pompeo, people had kind of normy Republicans
    0:35:22 had hoped that he would play a big role in this administration
    0:35:27 because he sees the world as kind of a traditional neocon,
    0:35:29 I guess, who has understood the MAGA vibe,
    0:35:33 but very pro-Ukraine, very pro-Israel.
    0:35:35 Thinking about Secretary of State,
    0:35:37 will that end up being a Rick Rennell
    0:35:39 or Tennessee Senator Bill Haggerty
    0:35:40 who came out of Bushworld
    0:35:42 but is very MAGA?
    0:35:44 He was a Trump’s ambassador to Japan,
    0:35:47 but he’s very pro-Ukraine, which is good.
    0:35:48 That was top line.
    0:35:51 But Stefanik to the UN is interesting to me
    0:35:53 because one of her big issues is that
    0:35:57 if the UN continues to be so anti-Semitic,
    0:36:00 maybe we shouldn’t be there at all.
    0:36:02 And I feel like that’s probably one of the reasons
    0:36:05 that he put her in that role.
    0:36:08 – Yeah, that definitely sparks a gonna fly at the UN.
    0:36:11 And I can’t figure out, I’m two minds around the UN
    0:36:13 and that is it’s so important
    0:36:16 and such took so much effort to get everyone together.
    0:36:17 And I think it’s important
    0:36:20 that people get together and talk even.
    0:36:22 But what I’ve seen come out of the UN recently for me
    0:36:24 has been just such blatant anti-Semitism.
    0:36:26 I think, why are we participating
    0:36:28 and or funding this place?
    0:36:32 Or not funding it, depending on who you’re speaking to.
    0:36:33 She’s an interesting one.
    0:36:37 I feel as if his picks are sort of more performative
    0:36:39 than anything ’cause if I know Trump,
    0:36:42 90% of him will be gone within 18 months.
    0:36:45 I mean, he just churns through people.
    0:36:47 Like there’s no tomorrow.
    0:36:50 I don’t, I know nothing about his chief of staff.
    0:36:52 She’s probably in terms of a ratio
    0:36:54 to people who are important in history
    0:36:55 who are the least well known.
    0:36:56 She’s right up there right now.
    0:36:58 Nobody knows who she is.
    0:37:01 And it sounds to me like she just schooled
    0:37:05 the Democratic apparatus on how to run a campaign.
    0:37:08 And people said, oh, they weren’t disciplined or whatever.
    0:37:12 My sense is he was a lot more disciplined this time.
    0:37:14 And even the decision not to debate again
    0:37:15 while we were outraged by it.
    0:37:16 The decision not to have
    0:37:18 to put that many resources around a ground game.
    0:37:19 Oh, aren’t they idiots?
    0:37:23 Well, no, it ends up, she was a lot smarter than we were.
    0:37:26 So it’ll be, I’ll be very curious what happens there.
    0:37:29 I also heard rumblings and it might be Steve Mnuchin
    0:37:31 for treasury secretary.
    0:37:32 – Oh, I didn’t, I hadn’t heard that.
    0:37:35 If he comes back, yeah, that would feel orderly
    0:37:36 to me.
    0:37:36 – Yeah.
    0:37:39 And I think people generally speaking
    0:37:40 think pretty well of him.
    0:37:42 – The Tom Holman thing though,
    0:37:45 we got a double click on that or whatever the right term is.
    0:37:46 It’s interesting to me.
    0:37:49 So Tom Holman, who was a head of ICE,
    0:37:53 has some of the most anti-immigrant views of anyone
    0:37:56 I have listened to give interviews.
    0:37:58 And he was made borders are,
    0:38:01 they didn’t try to get him to be the Homeland Security
    0:38:03 ’cause that requires confirmation.
    0:38:06 And that right away sent up the bat signal, right?
    0:38:08 That this is a workaround to get the guy in
    0:38:11 who talks about the deportation force all the time.
    0:38:14 And if you haven’t seen Tom Holman,
    0:38:17 who by the way is associated with the Heritage Foundation
    0:38:20 and Project 2025, check out his 60 minutes interview
    0:38:23 where he’s being asked about family separation,
    0:38:26 which is usually something that people don’t want to happen.
    0:38:27 Right?
    0:38:28 And this is also fueling a lot of the anger
    0:38:30 within Latino families.
    0:38:33 You see a lot of content online of young women
    0:38:38 who are mad at their brothers and mothers mad
    0:38:40 at their sons and their husbands in some cases.
    0:38:43 They’re like, you just voted to deport ex-member
    0:38:46 of our family, mother, aunt, uncle, whatever it is.
    0:38:49 But Tom Holman has asked about family separation.
    0:38:52 And he said, of course I’m not for a family separation.
    0:38:54 And the interviewer, I forget who it was,
    0:38:56 it says, well, then what’s the plan?
    0:38:57 And he said, they can all go.
    0:39:01 So you are now talking about a landscape
    0:39:06 in which people who are naturalized American citizens
    0:39:11 may be forced out of the country with their family members.
    0:39:12 And of course the talking point today
    0:39:15 is we’re starting with the bad guys, right?
    0:39:16 The bad hombres.
    0:39:19 It will be the criminals, you know,
    0:39:21 the people who are violating our laws,
    0:39:23 not the original sin of crossing the border,
    0:39:24 but actually have committed a crime here.
    0:39:27 But that was what they said in 2016 as well.
    0:39:29 And that is not how it turned out.
    0:39:32 It just moved into deporting people
    0:39:34 who are here illegally writ large.
    0:39:37 And I’m very concerned about Tom Holman.
    0:39:39 – Do you think, and granted,
    0:39:44 I don’t wanna in any way diminish the prospect
    0:39:48 that’ll do what he actually says he’s gonna do.
    0:39:51 But when you talk about the logistics here,
    0:39:53 potentially the blow to the economy,
    0:39:56 the cost, the idea that anything that reeks
    0:40:01 of putting people in any ring fence geographic area
    0:40:05 for deportation is going to feel eerily similar
    0:40:06 to a concentration camp,
    0:40:09 or take us back to at least at a minimum,
    0:40:12 the very dark spot staying in our history.
    0:40:14 And that was when we interned Japanese Americans
    0:40:16 who were good citizens.
    0:40:17 – Yeah.
    0:40:19 – And his lack of focus,
    0:40:22 especially on things that are this logistically complicated.
    0:40:25 You think it might not just be easier for him
    0:40:27 to make it even more difficult to get into the country,
    0:40:31 maybe do away with asylum or reform the asylum system
    0:40:34 as opposed to actually knocking on doors
    0:40:36 and taking grandma Luisa away,
    0:40:38 whose kids are citizens here.
    0:40:43 And again, I don’t wanna in any way reduce the threat
    0:40:45 of him doing, I didn’t think the Republicans
    0:40:47 would actually ever go after Roe.
    0:40:50 And my podcast co-host Kara said, yeah, they will.
    0:40:53 These people are, they are that.
    0:40:57 So I’m not suggesting we don’t take what he says seriously.
    0:41:00 I just wonder if logistically it’s so complicated,
    0:41:04 so expensive, so ugly that it might not actually happen.
    0:41:09 You think this guy, Homan will actually execute a plan
    0:41:14 that involves, I mean, convicted Falons or whatever
    0:41:16 who get deported back to their home country.
    0:41:17 I would imagine the majority of Americans
    0:41:21 aren’t worried about that or are gonna rise up around it.
    0:41:24 But when the mother of their, you know,
    0:41:28 their home health worker who has kids here,
    0:41:29 all of a sudden gets a knock at the door
    0:41:31 and is told to report to a center
    0:41:33 and somewhere outside of Philadelphia.
    0:41:35 I don’t know, that could, to me,
    0:41:37 that could get very scary, very fast.
    0:41:39 What are your thoughts?
    0:41:41 – Yeah, well, that really shakes the foundation
    0:41:43 of what the country is about, right?
    0:41:45 Which I don’t think protecting someone
    0:41:47 committed a crime here is.
    0:41:50 And that’s why you did get broad-based support
    0:41:51 for Trump in this.
    0:41:54 And it was interesting looking at the Fox News Voter Analysis,
    0:41:55 which is our huge poll.
    0:41:59 We talked to like 120,000 people about this.
    0:42:01 Still a majority of people wanted to find a pathway
    0:42:05 to citizenship for those who are here and are working
    0:42:07 and are valuable members of society.
    0:42:10 That’s actually how Americans feel about this.
    0:42:14 But one of, if not the smartest thing
    0:42:16 that Republicans ever did about the border
    0:42:20 was busing migrants to cities like mine
    0:42:23 and making this a national problem
    0:42:26 and not just a localized problem along the border.
    0:42:29 And Eric Adams has already, first thing,
    0:42:33 maybe he wants to pardon when that comes.
    0:42:36 But immediately congratulating Trump
    0:42:38 and saying that the debit card program
    0:42:40 for people who are here undocumented
    0:42:43 is going away right away.
    0:42:45 And there have been across a number
    0:42:46 of different issue areas.
    0:42:50 You see an immediate impact of the Trump effect.
    0:42:53 Like Cutter has said, Hamas has to get out of here.
    0:42:55 Like you have 20 minutes to get out of here,
    0:42:56 whatever the amount of time.
    0:42:58 – Under pressure from Biden.
    0:43:02 – I understand that, but it came right after the election.
    0:43:05 And that will be to your point
    0:43:08 about people are not following the complicated story.
    0:43:10 They’re not following the diplomacy of it.
    0:43:12 They’re looking at who said a thing
    0:43:14 and then it had a direct reaction.
    0:43:17 And Donald Trump said a thing and it had a direct reaction.
    0:43:19 And that’s how I think honestly,
    0:43:22 a presidency that was pretty mediocre,
    0:43:27 his ends up being lionized in a lot of people’s eyes
    0:43:31 because he is a person that scares the shit
    0:43:36 out of so many people because he is so frantic and frenzied.
    0:43:37 I mean, he was being interviewed
    0:43:38 by the Wall Street Journal editorial board
    0:43:40 and they asked him about his foreign policy.
    0:43:41 He said, how are you gonna pull this off?
    0:43:44 And he said, well, people know that I’m crazy.
    0:43:47 That’s things that like Anasad says, right?
    0:43:49 Or Kim Jong-un.
    0:43:53 And I think that’s what people even voting for him thought.
    0:43:55 They thought, this guy is crazy.
    0:43:58 And so he might be able to pull this off,
    0:44:00 crazy versus preachy.
    0:44:05 So I just can’t believe we miss the boat
    0:44:07 on dealing with immigration to this level
    0:44:09 that we’re having a conversation now
    0:44:12 about whether Holman and his deportation force
    0:44:14 will be able to pull this stuff off.
    0:44:18 I mean, if we had just acknowledged a real problem
    0:44:21 and talked to people like normal human beings
    0:44:24 and accepted a little bit of blame even,
    0:44:26 you don’t need to take the whole shebang,
    0:44:28 but just say, I understand that this is a problem.
    0:44:33 There’s a border town, majority Latino 97% support for Trump.
    0:44:35 And they were talking about it on the view,
    0:44:37 Alyssa Faragriffin says, why do you think that happened?
    0:44:38 And Sunny Hostin says, racism.
    0:44:40 And she goes, it’s the border.
    0:44:42 This is not racism.
    0:44:44 It’s not misogyny.
    0:44:49 – We fall absolutely into their talking point
    0:44:52 when our go-to is to immediately accuse the other side
    0:44:55 of being racists and misogynists.
    0:44:57 It is the worst thing we can do.
    0:45:00 The Democratic party has decided
    0:45:02 that they’re kind of the self-appointed cop
    0:45:05 for social justice and no one appointed them.
    0:45:08 I’m curious, what do you think of the idea?
    0:45:10 I’m trying to think of how we move forward.
    0:45:14 What do you think of the idea of the US being a platform?
    0:45:16 And it really is for two things.
    0:45:17 First and foremost, to defend Americans,
    0:45:20 defend our shores, but two,
    0:45:23 to provide economic security for Americans and their families.
    0:45:25 And that’s not to say we shouldn’t have laws
    0:45:28 around civil rights and equality.
    0:45:30 And there’s still important issues we need to discuss.
    0:45:34 But to move back, the Democratic party should embrace
    0:45:36 an active foreign policy, stick to that.
    0:45:38 I think that’s the right idea,
    0:45:41 but really try and embrace this notion
    0:45:42 that we are going to be the party
    0:45:45 that provides more economic opportunity for young people
    0:45:48 and be the adults in the room, talk about the deficit,
    0:45:49 talk about vocational programming,
    0:45:54 talk about national service, talk about a tax policy
    0:45:56 that doesn’t run the credit card of our younger people
    0:45:58 to pull prosperity forward for older people
    0:46:02 who now control 40% of government spending,
    0:46:05 which is not a real investment, it’s true spending.
    0:46:08 It’s not in things like R&D or education.
    0:46:10 How do you think the Democratic party realigns
    0:46:13 in terms of a message moving forward?
    0:46:14 – Well, I would love that,
    0:46:18 because the economy is the grounding of everything,
    0:46:21 of every issue that we talk about.
    0:46:24 And there is very little way for people to feel good
    0:46:26 about their lives if they don’t feel
    0:46:30 like their economic future and the economic future
    0:46:33 of those that they care about is in good hands,
    0:46:36 or is going to see brighter days.
    0:46:38 And I think that that’s great.
    0:46:42 That is, you know, at core of what Bernie Sanders
    0:46:44 has been saying forever, but said in that little manifesto
    0:46:47 that he put out after the loss,
    0:46:52 I think he’s always too quick to pick on the party apparatus
    0:46:55 and that people haven’t been buying what Bernie
    0:46:56 is selling for a long time.
    0:46:58 And he always kind of skips past that,
    0:47:00 at least on a national level.
    0:47:04 But I think, yeah, if we had an easy to understand slogan,
    0:47:07 like, we’ll make you richer.
    0:47:10 – It’s the economy, stupid. – That would be great.
    0:47:13 – Yeah, you know what I love?
    0:47:14 I don’t know if you’ve heard about this,
    0:47:17 but Portugal, I think this is a great idea.
    0:47:20 Portugal is becoming sort of,
    0:47:22 it’s done really well on the whole,
    0:47:25 but they recognized that they’re essentially becoming
    0:47:28 a place for rich expats, hedge fund managers
    0:47:32 who want to avoid taxes, and tourism, and seniors,
    0:47:34 ’cause they have very generous social service programs.
    0:47:38 I think 60% of employment there is civil servants.
    0:47:40 And anyone who’s really talented and young
    0:47:42 has one thing in common, they leave.
    0:47:43 They go to school in another country
    0:47:45 and they don’t come back.
    0:47:46 So they have announced a, I think,
    0:47:48 I don’t know how long it’s gonna last,
    0:47:51 but anyone between the ages of 20 and 30, zero taxes.
    0:47:52 – Amazing. – What do you think
    0:47:53 of that idea?
    0:47:55 Because it wouldn’t cost that much
    0:47:57 ’cause people 20 to 30 don’t make that much money,
    0:48:00 but say we need to level up young people,
    0:48:03 take it, read the tea leaves in this election,
    0:48:05 no taxes, no federal income taxes
    0:48:07 between the ages of 20 and 30.
    0:48:08 – I think it’s great.
    0:48:11 I think, I mean, lowering also the barriers
    0:48:13 to getting decent jobs, like this was actually
    0:48:16 one of the impacts of Josh Shapiro on Kamala,
    0:48:17 ’cause he has a policy in Pennsylvania
    0:48:20 that you don’t need a college degree
    0:48:22 to get a government job, which you shouldn’t need.
    0:48:23 There are all sorts of people
    0:48:25 that are very qualified for those things.
    0:48:28 So yeah, thinking outside the box
    0:48:31 about how to get people to stay and to be happy
    0:48:32 should definitely be a priority.
    0:48:35 But I also think, and it’s connected to this,
    0:48:38 like how do you make people love their home again,
    0:48:40 love their country again?
    0:48:44 Like I went abroad for school and I wanted to come home
    0:48:46 because I love where I’m from
    0:48:49 and I love the people in my orbit
    0:48:51 that made growing up fantastic,
    0:48:54 that had great impact on me.
    0:48:57 And that’s part of the issue.
    0:48:58 It’s a wonderful thing about the European Union
    0:49:01 and I wish that the UK was obviously still part of it.
    0:49:04 But with the mobility options
    0:49:06 that you could just go off and go to school in Germany
    0:49:08 or you could go to school in France or whatever,
    0:49:10 they had to work harder to make sure
    0:49:14 that people come back and invest in where they’re from.
    0:49:18 And there’s so many people, especially young people
    0:49:22 who just, they don’t get how great America is.
    0:49:24 Like Bill Gates always talks about this,
    0:49:27 like what are you guys talking about?
    0:49:28 That this isn’t the greatest nation in the world
    0:49:32 that has delivered the best results at home and abroad.
    0:49:34 And that kind of project,
    0:49:36 reinvigorating the American dream,
    0:49:39 I think could be a great piece of what the Democrats
    0:49:43 build going forward and to hopefully help them win elections.
    0:49:45 But just to make us feel better
    0:49:48 about where we’re from and what we’re all about.
    0:49:50 – So we’re still watching the final uncalled
    0:49:52 legislative races to see if Republicans
    0:49:54 will retain control of the House of Representatives,
    0:49:57 which would, if that happens, complete an electoral sweep.
    0:49:58 What’s going on?
    0:49:59 How does it look to you?
    0:50:01 – Less sunny than it did,
    0:50:03 which is kind of the theme for this election.
    0:50:05 I came in, you know, big smiles.
    0:50:09 Oh, what a beautiful sunny day and left depressed.
    0:50:12 It would take a bit of an electoral miracle
    0:50:15 for us to be able to hold their much closer.
    0:50:17 And for the races that are outstanding,
    0:50:18 you need stuff like, you know,
    0:50:22 it needs to win 73% of the outstanding ballots
    0:50:25 and things like that, not completely impossible,
    0:50:26 but very unlikely.
    0:50:28 I’m kind of taking solace in the fact
    0:50:31 that when they had control of all three branches
    0:50:33 of government, when Trump first came in
    0:50:36 that they only got tax cuts passed
    0:50:38 and didn’t get anything else done.
    0:50:40 They, I mean, they voted to reveal
    0:50:43 Obamacare and millions of times, but that never happened.
    0:50:46 So I think it’ll be much of the same.
    0:50:49 And that’s your lame duck point, right?
    0:50:52 That the hope is that he can’t actually
    0:50:53 accomplish all that much.
    0:50:56 And this Tom Holman thing,
    0:50:59 appointing people for non-confirmable spots,
    0:51:01 I think is going to be his approach.
    0:51:02 That’s how RFK Jr. will get in.
    0:51:04 That’s how Elon Musk gets in.
    0:51:07 That’s how Tom Holman gets in.
    0:51:08 – So before we wrap up here,
    0:51:12 how do you think the media as a member of the media
    0:51:14 should approach covering Trump this time around?
    0:51:17 Connor Friedestorff made the case in the Atlantic
    0:51:19 that the media should treat him like a normal president,
    0:51:21 especially since an opposition that claims
    0:51:23 to defend democracy can’t just ignore the legitimacy
    0:51:26 of someone who’s won so clearly.
    0:51:28 Jess, what’s your take on that?
    0:51:30 – I think that’s generally right.
    0:51:34 I think outrage and meltdown has failed us
    0:51:39 and that we have also revealed ourselves
    0:51:42 to actually not fear him that much.
    0:51:44 My colleagues on the five always say to me,
    0:51:46 well, what are people going to do?
    0:51:47 Now you’ve called him Hitler
    0:51:49 and you have to have tea and crumpets with him
    0:51:51 because you need to show him around the office
    0:51:52 and Biden will write–
    0:51:54 – You’re talking about vice president Banser.
    0:51:58 – Well, he repented earlier than we did.
    0:52:02 But I think that people stopped believing us
    0:52:06 that he was fascist, that he was authoritarian.
    0:52:08 And they just said, well, he’s going to fix the economy
    0:52:11 or I’m going to be better off than I was before.
    0:52:14 So yeah, I would like to treat him normally
    0:52:18 which doesn’t mean not covering the things that he is doing
    0:52:20 but it cannot be a daily meltdown.
    0:52:22 The public will not have it.
    0:52:25 And I think that links to the way
    0:52:28 that they’re consuming information.
    0:52:31 Like I took a step back and I thought,
    0:52:33 oh, the liberal media is so powerful.
    0:52:35 We have all these ways to reach people
    0:52:37 but then you look at the kind of content
    0:52:40 at least younger people are taking in with these podcasts.
    0:52:43 Most of the time when they end up getting a political message
    0:52:45 it’s not ’cause they listen to a political podcast
    0:52:46 it’s ’cause they listen to a wellness podcast
    0:52:49 that started talking about something RFK Junior likes.
    0:52:53 I mean, Joe Rogan is not a political podcaster.
    0:52:58 And until we can get a good foothold in that kind of space
    0:53:01 I think that we have lost that battle.
    0:53:03 And then if the mainstream media,
    0:53:05 whatever that means these days
    0:53:10 is only saying that we haven’t seen this since the 1930s
    0:53:12 we’re never gonna win an election again.
    0:53:13 What do you think?
    0:53:16 – Yeah, I think that’s, that feels right.
    0:53:18 But just I feel the need to,
    0:53:21 I feel we are literally like Debbie Downer
    0:53:23 and like disaster Debbie here.
    0:53:26 I do wanna highlight that there was actually
    0:53:29 several historic victories amongst LGBTQ candidates
    0:53:33 this election including the first transgender candidate
    0:53:36 elected to Congress, a black gay man elected
    0:53:37 to the Georgia legislature.
    0:53:39 There were some bright spots here.
    0:53:41 And I think it’s important to keep in mind
    0:53:44 I’m also already, I’m wondering if this will be really
    0:53:45 healthy for the Democratic Party to get back
    0:53:48 to the good work of just helping being,
    0:53:50 instead of trying to be righteous all the time
    0:53:52 be effective, something I’ve struggled with my whole career
    0:53:54 is the difference between being right and being effective
    0:53:56 and focus on things like the economy
    0:53:58 and struggling young people.
    0:54:02 And that I’d like to think this is just setting us up.
    0:54:05 Americans like reversing to the mean, they like a balance.
    0:54:08 In a weird way, I’d like to see Republicans
    0:54:11 get control of the house because I think it’s more symbolic
    0:54:11 than effective.
    0:54:13 I think he’ll be a lame duck president.
    0:54:16 I think a lot of Republicans will find their backbone
    0:54:20 in terms of not just being a blank check for him.
    0:54:23 That might be naive and that this is gonna set up
    0:54:25 if we get our act and our messaging together.
    0:54:30 I think it’s, it sets up incredibly well for 2026
    0:54:32 which will start getting pelted with ads in about,
    0:54:34 I don’t know, six or eight weeks.
    0:54:35 – I think it happened while we were recording, yeah.
    0:54:38 – Yeah, it’s already happening.
    0:54:39 All right, Jess.
    0:54:41 – But the ultimate positive point,
    0:54:43 and you may have thought of me at the start of the podcast,
    0:54:44 we didn’t lose by that much.
    0:54:50 – All right, I’ll define by that much, white woman.
    0:54:53 – All right, all right, okay.
    0:54:55 – That much, that much.
    0:54:57 Anyways, that’s all for this episode.
    0:54:59 Thank you for listening to My Raging Moderates.
    0:55:02 Our producers are Caroline Chagrin and David Toledo.
    0:55:04 Our technical director is Drew Burroughs.
    0:55:07 You can find Raging Moderates on its own feed every Tuesday.
    0:55:11 That’s right, Raging Moderates on its own feed.
    0:55:13 We’ve been accused of being more raging than moderate,
    0:55:15 but love us, don’t judge us.
    0:55:18 Please follow us wherever you get your podcasts.
    0:55:19 – See you soon.
    0:55:22 (upbeat music)
    0:55:28 – Many songs are written to make us dance,
    0:55:30 others to deal with heartbreak,
    0:55:33 but it’s the rarest song that makes us feel freaky.
    0:55:35 I’m musicologist Nate Sloan.
    0:55:36 – And I’m songwriter Charlie Harding.
    0:55:38 – And on this week’s episode of Switched On Pop,
    0:55:41 we delve into a trilogy of new releases
    0:55:43 from well-established Freaks, Lady Gaga,
    0:55:47 Tyler the Creator, and a long-awaited return, The Cure.
    0:55:50 – Listen to the musicology of freaky songs
    0:55:53 on Switched On Pop presented by Nissan.
    0:55:55 (upbeat music)

    Scott and Jessica dig into the Democratic blame game as party leaders clash over what went wrong. Did Biden’s decision to run set them back, or was it Harris’s approach on key issues? They also break down Trump’s latest cabinet picks and what they reveal about his plans for his return to power. Plus, how the media should cover Trump’s second term. 

    Follow Jessica Tarlov, @JessicaTarlov

    Follow Prof G, @profgalloway.

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  • Prof G Markets: Winners and Losers Under Trump’s Second Term

    AI transcript
    0:00:04 Support for this show comes from Constant Contact.
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    0:00:34 Go to ConstantContact.ca and start your free trial today.
    0:00:38 Go to ConstantContact.ca for your free trial.
    0:00:41 ConstantContact.ca.
    0:00:48 Everything about music is secretly a story about technology.
    0:00:52 How we listen to it from vinyl to iPods to Spotify.
    0:00:56 How we make it from pianos to computer plugins to AI prompts.
    0:01:00 How we discover it from music blogs to TikTok.
    0:01:04 All this month on The VergeCast, we’re telling stories about those changes
    0:01:09 and how technological change changes not just the way we experience music,
    0:01:10 but the music itself.
    0:01:16 All that, all this month on The VergeCast, wherever you find podcasts.
    0:01:21 Thumbtack presents the ins and outs of caring for your home.
    0:01:24 Out, uncertainty, self-doubt,
    0:01:27 stressing about not knowing where to start.
    0:01:33 In, plans and guides that make it easy to get home projects done.
    0:01:38 Out, word art, sorry, live laugh lovers.
    0:01:42 In, knowing what to do, when to do it, and who to hire.
    0:01:45 Start caring for your home with confidence.
    0:01:49 Download Thumbtack today.
    0:01:53 Today’s number, $446 million.
    0:01:55 That’s the combined payout.
    0:01:59 Election Betters will get from Prediction Sites Polymarket and Kalshee.
    0:02:00 Wow.
    0:02:11 Welcome to Prophogy Markets.
    0:02:15 Today, we’re discussing winners and losers in the markets under a second Trump term.
    0:02:20 But first, here with the news is Prophogy Analyst Ed Elson.
    0:02:20 Ed, how are you?
    0:02:22 I’m doing very well today, Scott.
    0:02:23 The sun is shining.
    0:02:23 It’s a new day.
    0:02:24 I’m feeling pretty good.
    0:02:25 How are you feeling?
    0:02:29 So, I did, I don’t know if I told you.
    0:02:31 Did I tell you about my Peroni and Xanax prescription?
    0:02:32 Panics.
    0:02:34 I did hear about that.
    0:02:37 But I didn’t hear how the bet fully shaked out.
    0:02:39 I know you bet on the election.
    0:02:42 So you’re feeling a little more upset than you otherwise would have, right?
    0:02:44 Well, no, it’s better to be lucky than good.
    0:02:48 So what happened was I went to Polymarket thinking I had great insight.
    0:02:51 It was trading at about 60/40, meaning you get a pair out of two and a half bucks on
    0:02:53 what I thought was a coin flip.
    0:02:55 I was going to go on Polymarket.
    0:02:58 I started registering and it said, “Oh, you’re not in the US or you’re in London.
    0:02:59 You can’t do it.”
    0:03:00 And I’m like, “No, fuck.”
    0:03:02 And so I went to this thing called Bet 365.
    0:03:07 And as you can imagine, I’m really good and have a lot of patience with registering at sites.
    0:03:08 So I didn’t end up doing it.
    0:03:09 I thought, “Well, I still want to do this.”
    0:03:13 So I did a collared option strategy.
    0:03:18 And that is I sold, in Donald Trump media, a bunch of calls at a strike price of 20,
    0:03:21 thinking it could crash to 20 if she got elected.
    0:03:24 But because I was worried it might go to 100 or 200,
    0:03:27 I bought some calls at 60 way out of the money.
    0:03:30 Sort of what I think is referred to as a collared strategy.
    0:03:34 I got $21 in premium for selling the calls.
    0:03:37 And it cost me six bucks for the insurance on the back end at 60 bucks.
    0:03:40 So a net proceeds of $15.
    0:03:44 And I also thought that even if he wins,
    0:03:47 that stock has become a bit of a meme stock or a prediction vessel for the election.
    0:03:51 But once the prediction is over and it’s obviously wins,
    0:03:53 we’re left with a shitty company.
    0:03:55 And so I thought there was a decent chance.
    0:03:57 I knew it would go down if she won.
    0:04:00 And I thought there was a decent chance it still might go down if he won.
    0:04:02 Anyways, as we sit here today,
    0:04:05 I think the stock is falling up dramatically.
    0:04:08 I think it’s trading at about 28 bucks right now.
    0:04:11 So I’ve actually made money on this trade.
    0:04:13 See above, it’s better to be lucky than good.
    0:04:14 But here’s the asterisk here.
    0:04:15 I’m self-conscious.
    0:04:19 I like to be transparent about money because I think people should talk about money.
    0:04:21 This is not investing, this is gambling.
    0:04:22 I want to be clear.
    0:04:23 I know I’m gambling.
    0:04:26 And whenever you write an option, especially if you write calls,
    0:04:30 I would say be very careful and think about buying calls at a very upper end
    0:04:32 such that you don’t get hurt too badly.
    0:04:36 And also don’t ever gamble more money than you can afford to lose.
    0:04:39 And my personal metric is I can lose enough money
    0:04:44 that it would ruin my morning or my afternoon, but it couldn’t even ruin my day.
    0:04:47 So because be clear, when you are playing with options,
    0:04:49 you know, what is it, 80% or 90% expire worthless.
    0:04:51 So this is a highly risky strategy.
    0:04:53 This is not investing, this is gambling.
    0:04:57 But I was so confident that Harris was going to win that I wanted to play this.
    0:05:00 And I got lucky by doing this option strategy
    0:05:05 and the fact that Donald Trump media is no longer seen as a bellweather that he’s going to win.
    0:05:07 He’s won.
    0:05:12 Now it’s just a shitty company that’s got three million revenues and is hemorrhaging money.
    0:05:13 But we’ll see.
    0:05:14 There’s still time here.
    0:05:16 They don’t expire till next Friday.
    0:05:18 OK, so just quick message to our listeners.
    0:05:21 Please do not short squeeze my boss.
    0:05:22 Please don’t do it.
    0:05:25 We don’t want it to go to 60.
    0:05:27 And with that, we’ll start with the weekly review of market vitals.
    0:05:36 The S&P 500 climbed.
    0:05:37 The dollar strengthened.
    0:05:41 Bitcoin hit a new record and the yield on tenure treasuries spiked.
    0:05:42 Shifting to the headlines.
    0:05:51 The Boeing strike is over after workers voted to accept an offer that includes a 43% compounded raise over four years.
    0:05:53 However, the deal does not restore the pension plan,
    0:05:56 which was a sticking point for many union members.
    0:06:01 Perplexity CEO Aravind Srinivas has offered to provide technical infrastructure support
    0:06:04 to the New York Times amid the tech guild strike.
    0:06:09 That offer comes less than a month after the Times sent a cease and desist to perplexity,
    0:06:12 demanding the startup stop using its content to train AI models.
    0:06:18 And finally, shares of data analytics firm Palantir rose 23% to a record high
    0:06:20 after its earnings beat analyst expectations.
    0:06:25 The strong earnings were primarily driven by robust US government spending on its products,
    0:06:28 with the company securing a $100 million military contract.
    0:06:33 Shares are up more than 218% so far this year.
    0:06:38 Scott, let’s start with Boeing and I’ll just quickly go over the agreement here.
    0:06:45 So they’re getting an immediate 13% bump followed by three more bumps over the next three years.
    0:06:50 So ultimately, over four years, when you factor in compounding,
    0:06:55 they’re going to get a 43.65% increase from their current wage.
    0:06:59 They’re also going to get a $12,000 ratification bonus.
    0:07:02 They are not getting that traditional pension plan that many of them wanted.
    0:07:06 They’re going to get the defined contribution plan.
    0:07:10 If they invest 8% of their salary into their 401(k),
    0:07:15 Boeing will co-invest that same amount into the 401(k).
    0:07:17 So this kind of turned out the way that we expected.
    0:07:20 The workers got that pay rise that they were looking for.
    0:07:21 We predicted that.
    0:07:23 We said it was a reasonable request.
    0:07:24 They got it.
    0:07:26 They didn’t get that pension plan.
    0:07:27 We also predicted that.
    0:07:29 Scott, your reactions to the end of the Boeing strike.
    0:07:30 I think you summarized it.
    0:07:32 This feels right as rain.
    0:07:37 Clearly, they hadn’t had a raise in, I think, five years when inflation was up substantially.
    0:07:39 43% is real cabbage.
    0:07:42 It’s a little bit misleading because my understanding is it’s over four years.
    0:07:46 So it’s more like eight or 9% a year, I think, if it compounds.
    0:07:47 Right.
    0:07:51 13%, 9%, 9%, 7% specifically.
    0:07:52 There you go.
    0:07:53 So it’s a real raise.
    0:07:55 That’s going to be hopefully much faster than inflation.
    0:07:58 So their purchasing power will go up.
    0:08:01 But yeah, this was an easy call around the pension.
    0:08:06 Companies can’t subject shareholders to a pension plan that might end up becoming like
    0:08:10 an unexploded device within the company where they have all these obligations after the
    0:08:11 asset has left the company.
    0:08:13 So good for Boeing.
    0:08:14 Good for Boeing employees.
    0:08:16 Good for the planet.
    0:08:17 Perplexity.
    0:08:19 This is a pure publicity stunt.
    0:08:21 And it’s smart because we’re talking about it.
    0:08:27 And he’s not going to win a lot of favors with, you know, NYT employees.
    0:08:30 But it’s a little bit misleading or requires you to know what you’re saying.
    0:08:34 NYT is doing everybody that’s using their content.
    0:08:39 They’re not specifically going after, I mean, they’re going after all of them.
    0:08:39 Right.
    0:08:42 They’re saying they’re trying to build some IP and they’re trying to re-infense their
    0:08:44 content, which is smart.
    0:08:48 If they were smarter, they’d be binding together or creating a consortium such that
    0:08:53 they could speak with a louder voice because even as strong as all the NYT are valuable,
    0:08:57 as all the NYT content is, it’s still not strong enough to go toe-to-toe with any
    0:08:59 of these guys.
    0:09:00 Any thoughts from you on perplexity?
    0:09:05 I think you’re exactly right that this is a publicity stunt and we should just confirm
    0:09:06 it worked.
    0:09:13 This was covered by 13 different news publications, just the simple act of the CEO going to the
    0:09:17 New York Times and saying, hey, you want to use our AI in the midst of your strike, those
    0:09:22 publications include the New York Post, they include TechCrunch, several others.
    0:09:26 And here’s the most important statistic, which is that in the past seven days, Google
    0:09:32 Search Volume for the CEO, Aravind Srinivas, has increased 70%.
    0:09:37 So as far as publicity stunts go, this was sort of a smashing success.
    0:09:38 Yep.
    0:09:39 And then Palantir.
    0:09:41 So I got to give it to them.
    0:09:42 I was very skeptical of this company.
    0:09:48 I thought it was very opaque and creating this kind of cloak and dagger feel to create
    0:09:51 differentiation or deep dark technology where there wasn’t any.
    0:09:55 They’re clearly continue to perform, continue to beat expectations.
    0:09:58 The CEO understands storytelling.
    0:10:03 So nothing like a company that’s kind of got this deep, cool, innovative AI, spy versus
    0:10:07 spy feel combined with beating earnings consistently, combined with the CEO who goes on Bill Maher
    0:10:10 and is really great at messaging.
    0:10:18 So this company in my mind is still incredibly overvalued, but good for them.
    0:10:22 Stock is tripled in the last year, second best performer in the S&P.
    0:10:27 Right now, our S&P 500 Vista and electricity provider that has benefited from the AI power
    0:10:33 boom is number one, but their government revenue was up 40% year on year to 320 million, making
    0:10:37 up about two thirds of the company’s total revenue.
    0:10:43 They traded a P of 130, which is more than three times the valuation on a P basis of
    0:10:44 NVIDIA.
    0:10:49 And NVIDIA is growing four times faster than Palantir and has 50% net profit margin compared
    0:10:50 to Palantir is 20%.
    0:10:56 So one of two things that’s true here, either Palantir is dramatically overvalued or NVIDIA
    0:10:58 is dramatically undervalued.
    0:11:03 It has a ton of short interests more than its competitors as a percentage of its float,
    0:11:10 Palantir is up around 5%, Snowflakes at 4%, and IBM is at about 2.5%.
    0:11:14 And then people are very bullish on Palantir because of the incoming administration, thinking
    0:11:19 that defense spending typically goes up under Republican administrations.
    0:11:22 And in the first two and a half years of the Trump administration, Palantir’s revenue
    0:11:27 from the US government contracts surpassed its total under President Obama’s entire second
    0:11:28 term.
    0:11:31 So this is a government contractor, but it’s a good business to be in.
    0:11:32 Yeah.
    0:11:36 Well, the defense spending point is interesting because, yes, exactly, they’re still heavily
    0:11:41 reliant on government revenue, makes up 64% of their overall revenue.
    0:11:46 Most of that is analytics for the military and for the Department of Defense.
    0:11:52 And what the market is telling us is, one, they had a great quarter, but at the same
    0:11:57 time, they’re also bullish on the fact that we have a Republican in charge, that Trump
    0:11:59 is now in charge.
    0:12:03 And theoretically, that means that defense spending will go up.
    0:12:09 But then there’s the other side, which is Trump, his whole campaign has been that it’s
    0:12:12 going to be an isolationist foreign policy.
    0:12:17 His whole shtick is that we’re going to be pulling back from all of our military exploits.
    0:12:21 That’s at least the argument that I’ve been hearing from my Republican friends.
    0:12:24 And so it feels like we’re at a bit of a crossroads.
    0:12:28 It’s not really clear what we think is going to happen in terms of defense.
    0:12:32 He said he’s going to cut spending, but the market is telling us, no, we actually think
    0:12:36 that Trump’s going to increase the amount that we spend on the military, which, yes,
    0:12:38 would benefit Palantir.
    0:12:40 If he cuts back, it would be harmful to Palantir.
    0:12:45 So I think that’s just an interesting dilemma right now, but I think it’s something to keep
    0:12:46 an eye on.
    0:12:51 I think Palantir is going to be a good tracking stock for trying to understand where are we
    0:12:53 headed in terms of our defense spending.
    0:12:54 I think the market’s got a ride.
    0:12:55 I can’t see Trump.
    0:12:56 First off, Trump is not afraid of deficits.
    0:12:58 He loves being able to beat his chest.
    0:13:04 I just can’t see the whole affinity testosterone driven macho bullshit resulting in him ever
    0:13:06 cutting spending on the military.
    0:13:11 I think he, I just don’t think all the incentives are lined up to either keep at best military
    0:13:12 spending flat.
    0:13:14 I would be surprised if it didn’t go up.
    0:13:20 It’s just the kind of guy is, he wants to be able to go to Putin and go to Tim Jong-un
    0:13:25 and say, yeah, our military continues to spend more than the next 10, nine biggest
    0:13:26 spenders combined.
    0:13:31 We’ll be right back after the break with a look at the market’s winners and losers under
    0:13:33 a second Trump administration.
    0:13:37 And quick reminder, Prof.G Markets has its own feed now.
    0:13:39 There, you’ll get two episodes every week.
    0:13:45 So if you’re still listening on the Prof.G Pod, move over, type in Prof.G Markets wherever
    0:13:47 you get your podcasts and hit follow.
    0:13:58 We’ll be right back.
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    0:16:53 We’re back with Prof2Markets.
    0:16:58 Donald Trump has laid out a broad economic plan for the US that includes tax cuts, tariffs,
    0:17:02 deportations, a reduction in energy prices and much more.
    0:17:06 Over the next four years, this plan will affect the economy in a variety of ways.
    0:17:11 So Scott, we’re just going to look at the market’s reaction to Trump’s win and we’ll
    0:17:15 go through some of the winners and some of the losers under this new administration.
    0:17:18 So we’ll start with the winners.
    0:17:20 Our first winner is the US stock market overall.
    0:17:27 So the S&P 500 surged, so did the Dow and this is all in broad expectation of corporate
    0:17:28 tax cuts.
    0:17:33 Trump plans to bring down the corporate tax rate from 21% to 15%.
    0:17:38 In addition, volatility is down as investors finally know the result of the election.
    0:17:41 So that has been a help for the stock market too.
    0:17:48 Going to more specific companies and more specific sectors, our second winner is Tesla.
    0:17:51 So Tesla rose 14% after the election result.
    0:17:56 Investors believe that Tesla will benefit from this administration largely due to likely
    0:18:01 his relationship, Elon Musk’s relationship with Donald Trump.
    0:18:04 And there are some other more concrete economic explanations.
    0:18:09 So for example, Trump’s China tariffs, as we know, Trump is planning to increase tariffs
    0:18:13 on China, which will keep Chinese competitors out of the US.
    0:18:17 As we’ve discussed before, one of Tesla’s greatest threats is BYD, a Chinese vehicle
    0:18:18 maker.
    0:18:22 In addition, Trump plans to remove subsidies for electric vehicles.
    0:18:27 You would think that would hurt Tesla and maybe it will, but more likely is that it
    0:18:29 will hurt small EV makers in the US.
    0:18:33 The less established and less profitable EV makers.
    0:18:37 In other words, it is going to solidify Tesla’s position as the market leader.
    0:18:42 And the final implication, which I’d like to get your reaction to is that Musk might
    0:18:46 be able to advise on autonomous driving regulations.
    0:18:50 That’s one of the biggest hurdles for Tesla and the robotaxi mission.
    0:18:55 So if Elon Musk has one foot in the White House and the other at Tesla, it could be
    0:19:00 that he’ll be able to fast track his vision of the robotaxi fleet and that is certainly
    0:19:03 what investors are pricing in right now.
    0:19:08 So Scott, let’s get your reactions to Tesla as a winner of this Trump administration.
    0:19:16 Well, first, in terms of the broader market, stocks represent essentially how corporations
    0:19:21 and management and the wealth you’re doing who control or own 90% of stocks.
    0:19:25 And essentially, the reason the stock market is rallying is there’s an anticipation of
    0:19:30 a tax cut or an extension of the corporate tax cuts, which will increase earnings and
    0:19:34 thereby logically increase the value of the shares.
    0:19:40 Now, what the Harris campaign was unable to do, which seems fairly obvious to me, is
    0:19:43 that all that’s happening is the following.
    0:19:48 The stock market has gone up, the credit markets have actually gone down in the sense that
    0:19:53 the 10-year, the yield has gone up and the bonds on the 10-year have gone down.
    0:19:54 Why?
    0:19:59 Because the credit markets look long-term and say, “Okay, we think that Donald Trump
    0:20:01 is going to be inflationary.”
    0:20:05 And the dots that I don’t think people have connected is the following.
    0:20:12 This market rally is essentially a transfer of wealth from you to me because all that’s
    0:20:16 happening here is Trump is signaled and the market believes him he’s going to cut taxes
    0:20:18 on corporations.
    0:20:20 He is not going to fund that.
    0:20:26 My prediction will be it’ll be deficit-funded, meaning the stocks I already own are up substantially
    0:20:32 the last two days, Ed, on the anticipation of a bigger deficit, which will increase your
    0:20:38 interest rates and lower your stock returns when you’re my age and own stocks.
    0:20:42 So all the market is saying right now and doing right now is transferring wealth from
    0:20:50 people your age to people my age and the credit markets recognize this and yields have gone
    0:20:51 up.
    0:20:57 So I think the Harris campaign was totally incapable of connecting the dots and saying
    0:21:02 we need to stop the transfer of wealth from young to old.
    0:21:09 In terms of Tesla, my understanding is he spent about $120 million on the Trump campaign
    0:21:14 and his wealth increased I think something like $15 billion.
    0:21:20 The best investment, the best trade of this year was Elon Musk participating, going all
    0:21:24 in and giving $19 million to the Trump campaign.
    0:21:30 He’s already got $15 billion back because people assume that he’s all in.
    0:21:31 Trump loves him.
    0:21:36 Trump is a kleptocrat and Trump will give Tesla government contracts and this will just
    0:21:40 be really good for Elon who’s going to get to say I like this regulation because it hurts
    0:21:45 BYD, I don’t like this one because it would hurt me.
    0:21:51 This is basically the market says Tesla is about to become a recipient on the good end
    0:21:54 of a kleptocrat here known as the Trump administration.
    0:21:58 I’m just waiting for all the comments to say that you have Trump derangement syndrome,
    0:22:04 but please, if you’re going to make an argument against that, I just hope that people ground
    0:22:09 it in like an actual argument that’s based in facts because I think what you’ve said
    0:22:13 is completely fair and like that’s exactly what the market is pricing in right now.
    0:22:19 Well, just let me add to that, and the last few trading days, I have made a fuck ton
    0:22:20 of money.
    0:22:21 Yeah.
    0:22:22 And by the way, everyone says why are you complaining?
    0:22:23 You’re going to get richer.
    0:22:27 It’s like, yeah, I know we’re going to get richer for now if we own a bunch of stocks.
    0:22:31 I’m getting rich or on your credit card.
    0:22:32 Yes.
    0:22:37 You’ve fundamentally changed about the R&D or the education or innovation or anything
    0:22:40 that’s actually fucking sustainable in this country.
    0:22:41 Yeah.
    0:22:47 We’re not going to produce smarter kids or fewer depressed young adults or create R&D
    0:22:48 for our universe.
    0:22:49 None of that is here.
    0:22:50 This is simple.
    0:22:57 He’s going to run up your credit card to reduce the taxes on companies I own shares
    0:22:59 in presently.
    0:23:00 Great.
    0:23:05 And then if I live long enough and I probably won’t, people are going to have to pay the
    0:23:12 taxes on poverty, increased incarceration, and exceptional interest rates from the Chinese
    0:23:17 don’t show up or do show up and say we want 10, 15, 20% yield if you want us to continue
    0:23:22 buying your treasuries, which is going to crowd out all investments and forward leaning
    0:23:28 investments, technology, R&D, education, because basically our entire budget, by the time you
    0:23:33 are my age and have any real money, is going to go to places to seniors who are unproductive
    0:23:37 through entitlements or to paying the interest on our debt.
    0:23:41 This is nothing but pulling prosperity forward from younger people to me.
    0:23:43 So yeah, it feels good.
    0:23:44 I’m going to enjoy it.
    0:23:46 It is bad for America.
    0:23:47 Exactly.
    0:23:52 Let’s move on to another winner of this new Trump administration, which is the bank stock.
    0:23:53 So shares of J.P.
    0:23:57 Morgan, Bank of America City Group, Goldman Sachs, and Morgan Stanley all soared on the
    0:23:58 election news.
    0:24:03 Goldman Sachs and Morgan Stanley rose as much as 13% in addition.
    0:24:08 Private equity firms rose, such as KKR and Blackstone, Blackstone hit a record high.
    0:24:12 So in other words, this was a big win for banks and for financial services.
    0:24:13 Why?
    0:24:17 Because again, the expectation is that Trump will significantly roll back financial regulations.
    0:24:22 And as we’ve discussed, M&A has been down over the past few years.
    0:24:26 There are likely a lot of factors contributing to that, but many believe that the biggest
    0:24:30 one is because of regulation from people like Lena Kahn at the FTC.
    0:24:34 Many believe that Lena Kahn, who we had on this podcast, will be out of a job in this
    0:24:35 administration.
    0:24:42 So in some, looser regulation leading to more M&A, leading to larger investment banking
    0:24:45 fees, and so more revenue for the big banks.
    0:24:48 I assume you’re going to have a similar take to what we just said, but what’s your reaction
    0:24:53 to the soaring market values of the bank stocks?
    0:24:59 A move of 12 and 13% among J.P. Morgan and Wells Fargo is much more dramatic than a 20
    0:25:01 or a 30% move in a tech stock.
    0:25:04 These companies’ volatility or the sharp ratios are much lower.
    0:25:10 These are huge moves for these companies because it’s the perfect storm for them.
    0:25:11 One, less regulation.
    0:25:16 We can go buy small banks and become even bigger and bigger and become way too fucking
    0:25:19 big to fail, which is bad for the economy.
    0:25:24 So less regulation, I probably won’t have the same stress tests that Elizabeth Warren
    0:25:30 and Sarbanes Oxley, we might roll back some of that shit so I can make more loans with
    0:25:36 less scrutiny, I can start acquiring more companies, and with interest rates going up
    0:25:40 because of an inflationary presidency of Donald Trump and the anticipated deficit spending
    0:25:45 such that I get richer or the incumbents get richer, the spreads on loans will go up.
    0:25:50 So if you’re loaning out money on 8% mortgages, you get to borrow it five and a half.
    0:25:55 Your spread is 250 basis points, whereas three years ago, when you were taking out loans
    0:25:59 at two and three-eighths and borrowing money at one and a half percent for them, you’re
    0:26:01 only getting 84 bips of spread.
    0:26:03 So this is the perfect storm.
    0:26:10 Less regulation, we get bigger and bigger, too big to fail, more spread on our loans.
    0:26:13 I mean, this is nitrome glycerin for banks.
    0:26:14 Yep.
    0:26:16 And then our final winner here, we have small cap stocks.
    0:26:21 So these are public companies with smaller market caps, generally speaking, a market
    0:26:23 cap below $2 billion.
    0:26:25 These stocks ripped off the electoral result.
    0:26:31 The Russell 2000, which includes many of those smaller companies, rose 6% to its highest
    0:26:32 in nearly three years.
    0:26:34 So what is the market expecting here?
    0:26:39 Well, one, Trump is reducing the corporate tax rate, so that benefits all American corporations,
    0:26:41 at least in the short term.
    0:26:47 As for small caps in particular, many of these companies are very US-centric.
    0:26:51 So their supply chains are not as global as some of these larger corporations.
    0:26:56 They’re not multinational in the same way that a company like Amazon is.
    0:26:58 They do the majority of their business in the US.
    0:27:03 And the expectation is that with Trump and his more isolationist policies, in addition
    0:27:07 to these global tariffs that we’ve talked about, we’re going to see more investment in
    0:27:12 companies who do their business in America and America alone.
    0:27:16 So that, generally speaking, should benefit small caps.
    0:27:20 Scott, your reaction to the increase in small cap stocks?
    0:27:22 It’s a really interesting point.
    0:27:27 I understood that, okay, lower tax is good for these companies.
    0:27:33 Tax cut puts more money in people’s pockets, so stimulus, or at least short-term stimulus.
    0:27:36 I hadn’t seen what you just saw, and it’s absolutely correct.
    0:27:40 And that is, small cap companies tend to probably get the disproportionate, if not all of the
    0:27:44 revenue domestically, they’re less hurt by tariffs, because what happens in a tariff
    0:27:51 if we put 60% tax on consumer goods coming in from China, they respond.
    0:27:55 And if I’m selling a lot into China, I get really hurt.
    0:27:59 But if I’m just a domestic producer, I’m not insulated from tariffs, but I’m not as badly
    0:28:03 hurt by a multinational in terms of a trade war.
    0:28:04 Yeah.
    0:28:06 And just to be clear, in my opinion here, this is an outcome that I have.
    0:28:10 They’re actually like, okay, I think this is, generally speaking, a good thing.
    0:28:16 The amount of concentration of capital and power to the top, few companies, as reflected
    0:28:19 in their market cap, I don’t think has been a good thing.
    0:28:21 Let’s just do one more winner here.
    0:28:24 It’s probably worth mentioning, which is cryptocurrencies.
    0:28:26 So Bitcoin just hit a record high.
    0:28:32 The expectation is that Trump is going to have a lot looser and more lenient or kinder
    0:28:34 regulation to cryptocurrencies.
    0:28:38 Scott, your reaction to that final winner, particularly Bitcoin?
    0:28:41 I wouldn’t have been surprised if the following conversation took place.
    0:28:45 He said to the crypto brothers and Andreessen Horowitz, you guys figure out a way to raise
    0:28:46 me a billion dollars.
    0:28:51 I’m going to fire Gensler and I’m going to announce not only would be less regulation,
    0:28:57 but on the demand side, I’m going to announce a trillion dollar or I don’t know, a hundred
    0:29:04 billion dollar fund that invests in, I’m going to do something that puts not only limits
    0:29:10 regulation, but creates more demand for crypto currencies.
    0:29:14 So I can just see him saying, guys, you raised me a billion dollars, I’ll take Bitcoin to
    0:29:16 a million and this is how I’m going to do it.
    0:29:22 I’m going to fire that pain in the ass Debbie Downer, Gensler, and wouldn’t you like it
    0:29:26 if all of a sudden Bitcoin became one of the default currencies or we tried to give
    0:29:31 it some sort of dollar backing or I don’t know, something that makes it, I’m sure the
    0:29:37 crypto community is out of all kinds of things that would be great to legitimize this market.
    0:29:38 So what are you going to see?
    0:29:42 I think you’re going to see Bitcoin go up substantially, you’re going to see venture
    0:29:49 capital firms start deploying capital against blockchain and crypto companies and unfortunately
    0:29:53 the downside will be a lot of tiers in an unregulated market that attracts a lot of
    0:30:00 Maverick Cowboys, which has a fair share of grifters in it and the grift is going to
    0:30:04 be grifting with a lack of oversight from the SEC.
    0:30:08 There will be some innovation here, there is a lot that can be done and a lot of intelligent
    0:30:12 people said it was over-regulated and we needed to kind of let these horses run a little
    0:30:13 bit more.
    0:30:17 I think that’s a valuable argument or a legitimate argument, but you’re just going to see with
    0:30:20 the total absence of regulation, which is what I think you’re going to see here, you’re
    0:30:25 just going to see the Miami coin again or the Ed Elson coin or there’s just going to
    0:30:26 be all kinds of shit.
    0:30:27 That’s a good idea actually.
    0:30:28 You like that?
    0:30:29 I work on that.
    0:30:33 I’m an investor in Ledger, which is a cold storage hardware wallet, 12% of all crypto
    0:30:34 stored on these things.
    0:30:35 You can also trade on it.
    0:30:39 I would imagine the value of that company went up 30% in the last two days even though
    0:30:41 it’s a private company.
    0:30:43 This is a big win for that community.
    0:30:46 Gary Gensler, do you think he’s around in 12 months?
    0:30:47 He’s absolutely gone.
    0:30:48 He’s on the green mile.
    0:30:53 The more interesting question is whether Lena Kahn survives because she actually has fans
    0:30:56 on both sides of the aisle and my prediction is she actually survives.
    0:30:58 I think JD Vance quite likes her, right?
    0:31:00 So does Matt Gaetz.
    0:31:01 Yeah.
    0:31:02 Now, she is an antitrust.
    0:31:07 She’s a trust buster, but I think this issue is so complex that I think Trump’s going to
    0:31:10 get bored of it and just say, “Oh, fuck, leave her in place.”
    0:31:15 Also, I just don’t think he has the patience to deal with this.
    0:31:19 Everybody who advised Trump or everybody who was close to him, when someone would come
    0:31:24 in and talk to Trump, they would say the following, “Fewer words, more pictures.”
    0:31:26 You were literally told on some of the most complex issues.
    0:31:32 He likes pictures and very few words that the guy literally doesn’t read with supposedly
    0:31:33 his reputation.
    0:31:37 And I imagine talking about the complexities of an antitrust case or the monopoly maintenance
    0:31:42 case of Google and if they didn’t do it, what would it mean?
    0:31:46 He’s also himself, President-elect Trump, does not like these companies.
    0:31:51 He has been very aggressive and very upset with Meta and Alphabet.
    0:31:56 So if he can soften his image and keep the young woman in that position who’s going
    0:32:01 after them, I think she survives and she’s one of the few people that has something resembling
    0:32:02 bipartisan support.
    0:32:05 So I think it’s going to be chairperson Khan for a while.
    0:32:07 We’ll be right back.
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    0:34:28 We’re back with ProfG Markets.
    0:34:30 Let’s move on to the losers.
    0:34:33 So our first loser on the list here is clean energy stocks.
    0:34:37 So solar stocks plummeted, wind energy stocks plummeted, basically all the renewable stocks
    0:34:39 tanked after this result.
    0:34:40 Why?
    0:34:44 We expected Trump wants to put these renewable energy projects on hold.
    0:34:46 He wants to leave the Paris Climate Agreement.
    0:34:49 He wants to repeal the Inflation Reduction Act.
    0:34:54 He wants to scrap our offshore wind projects that obviously harms the revenues of clean
    0:34:55 energy companies.
    0:34:57 It helps fossil fuel companies.
    0:35:04 So we’ve seen stocks like ExxonMobil up, natural gas companies like EQT and Ontario.
    0:35:06 They also rose pretty sharply.
    0:35:11 I think most people understand this, so let’s not dwell on it, but perhaps you have a brief
    0:35:15 thought on the fact that clean energy is getting a little bit taken to the woodshed
    0:35:16 right now.
    0:35:23 I woke up on November the 5th and I thought, let me get this, two really qualified women
    0:35:30 have been beaten by a man who has convicted felon, inspired an insurrection and has been
    0:35:33 found guilty of rape.
    0:35:36 I feel like there’s just no getting around it.
    0:35:43 The misogynist tendencies, and I don’t use that word lightly, in the U.S. still runs
    0:35:48 pretty deep and strangely enough, I think it’s affected here, and that is anything associated
    0:35:55 with estrogen, anything that’s seen as feminine in its energy quality, wind, solar, oh, you
    0:35:56 pussy-ass bitch.
    0:36:00 I’m not interested in wind and solar.
    0:36:06 However, I actually think in a strange way, this is going to be really good for nuclear,
    0:36:10 because nuclear, for whatever reason, is seen as badass.
    0:36:14 Well, didn’t that fry a bunch of Russians in that whole Chernobyl?
    0:36:20 For some reason, nuclear has a macho feel to it, and that’s, I realize how ridiculous,
    0:36:27 this election was won on a very mannisfir impression of masculinity.
    0:36:31 When I look at the results, who showed up, who didn’t.
    0:36:34 No one gave a shit about bodily autonomy, and I know that’s hard to say, but they didn’t
    0:36:40 believe President Trump was that pro-life, five of the seven referendums on bodily autonomy
    0:36:43 passed so people think the states are handling it.
    0:36:44 They just didn’t care.
    0:36:48 More, fewer women voted for Harris than voted for Biden.
    0:36:52 Bodily autonomy played no role.
    0:36:57 What showed up was young men, fears about how young people are doing, and an embrace of
    0:37:02 the mannisfir, that you, Democrats, are too fucking sensitive, stop lecturing us, stop
    0:37:08 acting so high and mighty, stop being such snowflakes, and so offended at everything
    0:37:09 for us.
    0:37:10 Stop being so feminine.
    0:37:16 It’s like this giant fear and an upset that we’re like, our society is becoming feminized.
    0:37:20 I think that’s a really good point, especially when it comes to certain companies and people.
    0:37:25 The thing that Elon Musk cracked was that he figured out a way to make electric vehicles
    0:37:29 feel macho and masculine, and as soon as he did that, suddenly the people like Trump
    0:37:30 were on board.
    0:37:32 I think that’s definitely true of nuclear.
    0:37:38 I’d love to somehow create a rubric of which companies and which products are more feminine
    0:37:44 versus masculine, and I bet we could figure out a perfect line between Democrat and Republican
    0:37:46 support for those initiatives, right?
    0:37:47 I like that, yeah.
    0:37:54 My next podcast is just going to be called “Gorilla Seaman.”
    0:37:56 That’ll win them over.
    0:37:59 Suddenly we’ll stop being beta snowflakes as soon as we call it that.
    0:38:05 The new government contract podcast, “Gorilla Seaman.”
    0:38:06 I really like that take.
    0:38:11 Let’s move on to our second loser, which is companies that are exposed to this new tariff
    0:38:12 policy.
    0:38:18 These are companies whose businesses are reliant on importing goods into the US.
    0:38:21 That’s a very broad category.
    0:38:25 There are many types of companies who fall into that category.
    0:38:31 In retail, you’ve got companies like William Sonoma, you got Best Buy, Nike.
    0:38:37 These are companies that have highly international supply chains, and so when the tariffs come
    0:38:43 about, or if the tariffs come about, it’ll just make everything they do more expensive.
    0:38:48 Also, people said we were going to see it in tech, so there was some concern that these
    0:38:52 tech companies that import their chips from abroad would be affected.
    0:38:53 That was a big concern.
    0:38:56 We actually haven’t really seen that yet.
    0:39:00 Some tech companies dropped a little bit on the election result, but broadly speaking,
    0:39:05 they’re bouncing back, so the jury is still out on whether this administration and the
    0:39:08 tariff policies will benefit or harm tech.
    0:39:14 What is clear though is that if you are an American company and you rely heavily on an
    0:39:17 international supply chain, you are very nervous right now.
    0:39:21 You are trying to bring all of your supply chain, you’re trying to bring everything back
    0:39:29 to the US, so Scott, your reaction to tariff-exposed companies being a loser in the Trump administration.
    0:39:35 Republicans are supposed to be the more fiscally-minded or better on business, right?
    0:39:43 I can see at least a handful of Republican senators and/or representatives saying 88%
    0:39:48 of our gifts under the Christmas tree, the good consumers work all year to be able to
    0:39:51 afford come from China, and we don’t need to raise cost.
    0:39:54 I think there will be tariffs.
    0:39:57 The ones in place will either stay or get increased.
    0:40:01 I don’t think it’s going to be anything near what he’s proposing because anyone who can
    0:40:08 do math is going to be able to find five or seven Republicans to say, “This is a really
    0:40:09 bad idea.”
    0:40:14 The way for you to look really smart is to say, “This would hurt the good people of
    0:40:23 Alabama and raise their costs for whatever, tires or tractors by 22%.
    0:40:30 The farmers in Iowa would raise the cost of whatever it is, feed imported from, name
    0:40:33 it Ecuador by 15.”
    0:40:37 As soon as people actually do the math and see what’s going to happen in terms of impact
    0:40:43 at a ground level, you’re going to see all sorts of constituents pop up and say, “Basically,
    0:40:45 what the fuck?”
    0:40:50 It’s going to stiffen the backbone of some Republicans to say, “I am not down.”
    0:40:54 The margins, even if they get a control of all three branches, the margins here are going
    0:41:00 to be so narrow that on a topic like this, I think that Democrats will be able to find
    0:41:06 a few defectors to cross their arms and hold firm on tariffs.
    0:41:11 I don’t think tariffs are going to be nearly at the scale that he’s threatening.
    0:41:17 Some companies that are being hit a little harder related to this tariff issue, foreign
    0:41:24 stocks, emerging market stocks, so companies in Europe, in Mexico, in China, they’re down.
    0:41:29 Many of these companies rely on selling stuff to Americans, so let’s just focus on Germany
    0:41:30 as an example.
    0:41:36 BMW is down, Porsches is down, Mercedes is down, Volkswagen is down, 13% of Germany’s
    0:41:41 cars are exported to the US, so this is not great news for foreign car makers.
    0:41:47 If we look at Europe as a whole, the US accounts for one-fifth of their exports.
    0:41:51 They shipped half a trillion euros worth of goods to America last year.
    0:41:56 That number should come down under Trump, so you just sort of think of every foreign
    0:42:04 staple that we enjoy in America, whether it’s beer from Mexico or computers and smartphones
    0:42:10 from Japan or even GLP1 drugs from Denmark, if you’re in that business and you need to
    0:42:15 ship it over to America, you are hurting at least a little bit right now based on the
    0:42:17 market’s reaction.
    0:42:20 Scott, your reaction to what’s happening to foreign stocks right now?
    0:42:26 Well, I think you have to discern the difference between foreign supplies, if you are a foreign
    0:42:32 suppliers, and then foreign competitors, and that is, I think there will be, he’ll see
    0:42:38 a political win in showing up to Michigan and Detroit and saying, we’re going to increase
    0:42:44 demand for Ford because the trade relationship with Germany is asymmetric, so I’m announcing
    0:42:50 a 15% tax on all cars coming from Germany, whereas if he were to announce new tariffs
    0:42:57 on metal coming in from Canada that’s just going to increase the cost for Ford, I think
    0:43:01 that will be more politically unpalatable, despite the fact they both kind of end up
    0:43:05 in the same place, and that is an increased cost on US consumers.
    0:43:12 But again, I don’t know if it would be much easier for him to put a tariff on a product
    0:43:16 where there’s an American substitute, at least in the short run, not recognizing over time
    0:43:20 all that that means is that American companies have less competition, take advantage of that
    0:43:26 and increase their prices thereby raising prices and creating inflation on American consumers.
    0:43:30 But I think in the short run, it’s just much easier to tax a competitive product than it
    0:43:38 is feed coming in from Ecuador that raises the price, raises the costs of goods for farmers.
    0:43:42 It’s sort of a question, and it feels very similar, it is very similar to what happened
    0:43:47 with Brexit where the UK was like, we can do this all on our own.
    0:43:50 So let’s just cut off ties and we’re going to be fine.
    0:43:55 And the question here is that it’s like, okay, I’m down with the idea of bringing everything
    0:43:56 to America.
    0:44:02 And the question that we’re asking right now is, can we do everything truly on our own?
    0:44:07 Can we just sort of put a giant tax on everything that comes from abroad, or do we actually
    0:44:12 need these countries and do we rely on them to sustain our society?
    0:44:19 And I think it certainly was not a valid question to be asking in the UK, the UK was completely
    0:44:23 dependent on the rest of Europe, and that’s why it’s struggling so much right now.
    0:44:28 And I think it is a more valid question when it comes to the US, but that is certainly
    0:44:30 the direction we’re moving in here.
    0:44:34 We’re basically saying, we don’t need all you guys, we can do it on our own.
    0:44:38 And I think what we’re about to find out is whether that is indeed true.
    0:44:44 Our final loser that I’ve got here, this is the most interesting in my opinion.
    0:44:48 The housing market generally, and specifically so real estate stocks.
    0:44:55 So you’ve got real estate brokers like Redfin, like Zillow, Compass, they’re all in the red
    0:44:56 right now.
    0:44:59 They all reacted quite badly to the election result.
    0:45:04 You’ve got real estate services, companies like CBRE and Cushman and Wakefield, they
    0:45:05 all fell.
    0:45:07 You’ve got home building stocks.
    0:45:13 So companies like DR Horton, which constructs houses, the largest American house construction
    0:45:19 company, and companies like Lena, all of the home builders are down right now.
    0:45:25 And this is the most interesting to me because basically what the market is saying, the expectation
    0:45:31 despite Trump’s promise to bring down housing costs is that buying a house is about to get
    0:45:32 even more expensive.
    0:45:39 So we’ve seen yields rise in expectation of higher inflation as a result of the tariffs
    0:45:41 that we’ve just discussed.
    0:45:43 And when yields rise, that means that rates rise.
    0:45:48 And when rates rise, that means you’re paying a larger mortgage payment.
    0:45:52 So that’s sort of an accepted principle in the markets right now.
    0:45:54 We’re going to see higher mortgage rates.
    0:45:58 So to counteract that, Trump needs to figure out a way to significantly reduce housing
    0:46:00 prices.
    0:46:02 He’s laid out some plans.
    0:46:08 He wants to make it easier to build, which I think we both agree with is a good thing.
    0:46:15 However, the tariffs are expected to increase the cost of goods needed to build houses.
    0:46:16 That’s one problem.
    0:46:22 And the deportation and immigration crackdowns are expected to make the construction labor
    0:46:27 market even tighter, which means it’ll be even more expensive to build a home.
    0:46:31 So what the market is telling us right now is that mortgage rates are going to go up,
    0:46:37 and housing prices are going to go up, which is just a total nightmare for someone like
    0:46:42 me who, one, wants to buy a house, and two, who believes that the cost of housing is basically
    0:46:46 one of the biggest issues at least in the country right now.
    0:46:50 So Scott, your thoughts on what this new administration could do to the housing market?
    0:46:54 Well, just as we said, this is the perfect storm of good things for bank stocks.
    0:47:01 It’s the perfect storm of bad things for housing because his fiscal policy, what we know about
    0:47:03 it is it could be inflationary.
    0:47:07 The credit markets have already predicted that interest rates are going to go up, the
    0:47:09 10 years already going up.
    0:47:15 So one of the things that has made housing increasingly unaffordable is a massive increase
    0:47:18 in interest rates, right, and mortgage rates.
    0:47:23 And then, if you, I remember during COVID, I was building a house, and the guy said,
    0:47:26 we can’t get garage doors, he said, and he looked at the pulley on the automatic, you
    0:47:32 know, when you press it and there’s an engine and a chain, the pulley between the chain and
    0:47:38 the door, he goes, that thing’s made in Czechoslovakia, and it’s all closed because of COVID.
    0:47:43 If that thing, I mean, your washing machine, so many parts, even the lumber, so many things
    0:47:48 in your house come from foreign entities, that the idea that he’s going to do anything
    0:47:51 resembling this level of tariffs.
    0:47:55 So let me get this, my mortgage, my interest rate on my mortgage is going to go up and
    0:47:57 the cost of build is going to go up.
    0:48:03 Something’s got to give here because this is one place, you’re going to see a pretty
    0:48:06 significant gag reflex from the US population.
    0:48:12 If all of a sudden, it becomes obvious that an already vastly unaffordable housing market,
    0:48:15 we’re just in the last five years, it’s gone from two-thirds of Americans can afford a
    0:48:17 home to just one-third.
    0:48:23 If that goes down any further because of Trump’s tariff policy or because inflation starts
    0:48:27 to send mortgage rates up, I think he’s going to get a very swift message back from the
    0:48:31 American people that look, boss, housing is a crisis.
    0:48:38 We need all hands on deck, more permits, more housing, and again, in addition to supply,
    0:48:42 the cost of building and the mortgage rate are really important.
    0:48:45 So this is the perfect storm of bad things for housing.
    0:48:48 I don’t believe a lot of this.
    0:48:53 If you look at the markets, the markets have sort of said it’s going to be a divided government,
    0:48:57 that he’s not going to be able to push through other than maybe extending the tax cuts is
    0:48:58 how I read it.
    0:49:03 They will continue to favor rich people and corporations, but a lot of this stuff is not
    0:49:07 going to happen at nearly the scale that he’s threatened.
    0:49:09 That’s all I’ve got for the winners and losers here.
    0:49:14 I also just do want to point out that what we have said about this has been based on
    0:49:16 the market’s reaction.
    0:49:22 So what we’re explaining right now, your take on the idea that mortgage rates and housing
    0:49:26 prices are going to go up, that’s not our hot take.
    0:49:28 That’s what the market is telling us right now.
    0:49:30 We don’t know what’s going to happen.
    0:49:36 I hope and I would be really happy if Trump figures out a way to get the cost of housing
    0:49:38 down and I’m so for it.
    0:49:45 Like I’m 100% in support of that happening, I’m in support of him bringing inflation
    0:49:46 down.
    0:49:49 I mean, I want things to work out.
    0:49:55 Do you have any final thoughts or takeaways from this winners and losers session?
    0:49:58 What I would say across a lot of this stuff is I think it’ll modulate.
    0:50:00 Nothing’s ever as good or as bad as it seems.
    0:50:04 I think the market tends to, the pendulum is never kind of the bottom.
    0:50:06 I think it’s probably overreacting one way or the other.
    0:50:09 So I would think the stocks that have been hammered the most are probably buying opportunities
    0:50:16 and I think the stocks that are up to most, I don’t know, I’d be careful going into them.
    0:50:25 I think we’re going to find that the intransigence, the multiple branches of government, the slow
    0:50:29 grinding gears of our, I don’t even call it our democracy, but our capitalist system
    0:50:34 and the fact that you’re going to have a president that I’m not sure is going to have
    0:50:37 the attention span to enact a lot of this.
    0:50:41 I mean, to a certain extent, what’s strange is kind of a month in, he’s the lame duck
    0:50:43 president.
    0:50:46 So I don’t think the winners are going to win as much here and I don’t think the losers
    0:50:48 are going to lose as much as we think.
    0:50:49 All right.
    0:50:50 Let’s take a look at the week ahead.
    0:50:55 We’ll see the consumer price and producer price indices for October and we’ll also see
    0:50:58 earnings from Disney, Alibaba and Home Depot.
    0:51:01 Scott, do you have any predictions for us?
    0:51:07 My prediction is that Intel will either be acquired or go private in the next, I don’t
    0:51:08 know, six months.
    0:51:10 I think this is such a storied firm.
    0:51:15 There are few firms that have fallen further faster than Intel and this sector has added
    0:51:19 a ton of market capitalization except the leader, the market leader, the dominant player,
    0:51:25 the one that was held up as the icon of great management has consistently thrown up on itself
    0:51:28 for the last 20 odd years.
    0:51:33 And I think the stock’s gotten to the point where there’s so much IP, so many supply relationships,
    0:51:38 so few companies that can produce this type of very complex capital intensive product,
    0:51:44 heavy design product and it’s trading at I think 1/30th the value of NVIDIA that if
    0:51:49 this thing shows any pulse, it will triple except I think the changes in investments
    0:51:54 it needs to make would be more easily done outside of the purview of the public markets.
    0:52:00 So if it’s not acquired, I think that somebody shows up and takes it private.
    0:52:04 This episode was produced by Claire Miller and engineered by Benjamin Spencer, our associate
    0:52:08 producer is Alison Weiss, Mia Silverio is our research lead, Jessica Lange is our research
    0:52:12 associate, Drew Burroughs is our technical director and Catherine Dillon is our executive
    0:52:13 producer.
    0:52:17 Thank you for listening to ProfG Markets from the Vox Media Podcast Network.
    0:52:21 Join us on Thursday for our conversation with Josh Brown.
    0:52:45 He’s back only on ProfG Markets.
    0:53:07 Hold on one second, yeah buddy come on in, yeah, it’s alright.
    0:53:09 Do you want wings or burgers?
    0:53:10 Wings or burgers?
    0:53:13 Oh, I love it when mom’s gone.
    0:53:14 What do you want?
    0:53:16 I can’t decide.
    0:53:18 Burgers from where?
    0:53:21 Either file, that’s our shake shack.
    0:53:29 Let’s do, let’s do, when’s mom going to be home, is she going to find out what we ate?
    0:53:30 No, she’s fine.
    0:53:34 Oh, then burgers and shake, I want a black and white shake and shake shack.
    0:53:37 I want a burger and a black and white shake.
    0:53:38 Great, it’s not all right.
    0:53:39 Okay, don’t tell mom.
    0:53:40 Don’t tell mom.
    0:53:41 She knows.
    0:53:42 Okay.

    Follow Prof G Markets:

    Scott and Ed open the show by discussing the end of the Boeing machinist workers strike, Perplexity’s offer to help the New York Times, and Palantir’s earnings. Then Scott and Ed break down the sectors that they expect will see the biggest gains and losses under the Trump administration. They also discuss which regulators will survive the Trump administration and explain what the market is telling us about the future of housing prices. 

    Check out Prof G Markets in Spanish and Portuguese on Youtube. 

    Order “The Algebra of Wealth,” out now

    Subscribe to No Mercy / No Malice

    Follow the podcast across socials @profgpod:

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  • No Mercy / No Malice: The Podcast Election

    AI transcript
    0:00:00 (upbeat music)
    0:00:04 Support for this show comes from Constant Contact.
    0:00:07 If you struggle just to get your customers to notice you,
    0:00:10 Constant Contact has what you need to grab their attention.
    0:00:14 Constant Contact’s award-winning marketing platform
    0:00:17 offers all the automation, integration, and reporting tools
    0:00:20 that get your marketing running seamlessly,
    0:00:23 all backed by their expert live customer support.
    0:00:25 It’s time to get going and growing
    0:00:28 with Constant Contact today.
    0:00:30 Ready, set, grow.
    0:00:34 Go to ConstantContact.ca and start your free trial today.
    0:00:39 Go to ConstantContact.ca for your free trial,
    0:00:41 ConstantContact.ca.
    0:00:47 – Everything about music is secretly a story
    0:00:49 about technology, how we listen to it
    0:00:52 from vinyl to iPods to Spotify,
    0:00:57 how we make it from pianos to computer plugins to AI prompts,
    0:01:00 how we discover it from music blogs to TikTok.
    0:01:01 All this month on The Vergecast,
    0:01:04 we’re telling stories about those changes
    0:01:06 and how technological change changes
    0:01:11 not just the way we experience music, but the music itself.
    0:01:13 All that, all this month on The Vergecast,
    0:01:15 wherever you find podcasts.
    0:01:20 – This episode is brought to you by Secret.
    0:01:22 Secret Deodorant gives you 72 hours
    0:01:24 of clinically proven odor protection,
    0:01:28 free of aluminum, parabens, dyes, talc, and baking soda.
    0:01:30 It’s made with pH balancing minerals
    0:01:33 and crafted with skin conditioning oils.
    0:01:36 So whether you’re going for a run or just running late,
    0:01:40 do what life throws your way and smell like you didn’t.
    0:01:42 Find Secret at your nearest Walmart
    0:01:44 or Shoppers Drug Mart today.
    0:01:52 – I’m Scott Galloway and this is No Mercy, No Malice.
    0:01:54 The election proved that podcasting
    0:01:56 is the mass medium of our time.
    0:02:00 The podcast election as read by George Hahn.
    0:02:09 – I’m still in my pajamas,
    0:02:12 haven’t changed since Tuesday night.
    0:02:13 I’m also drinking a fair amount
    0:02:16 and toggling between Netflix shows.
    0:02:19 Nobody wants this, which is pleasant but Uber cliche,
    0:02:21 i.e. stupid and monsters,
    0:02:23 which as the father of two boys,
    0:02:26 I find just plain disturbing.
    0:02:29 In sum, for me, it’s COVID again.
    0:02:32 Even my stocks are going up, so 2021.
    0:02:37 I’ve received 22 emails in the past 24 hours.
    0:02:39 When I’m down, I obsess over inconsequential data
    0:02:41 as a coping mechanism.
    0:02:45 Asking for my thoughts on the election,
    0:02:48 my reflexive desire or megalomaniacal belief
    0:02:50 that I can comfort strangers
    0:02:53 leads me to remind them that nothing is ever as good
    0:02:55 or as bad as it seems,
    0:02:58 and that the US remains the US,
    0:03:02 the richest and freest country on earth.
    0:03:05 This election was neither what I wanted nor expected,
    0:03:07 but I’m still very much looking forward
    0:03:08 to moving back to America.
    0:03:11 I just read the previous paragraph
    0:03:15 and it’s sort of true, sort of.
    0:03:20 My disbelief and despair are shapeshifting to anger.
    0:03:23 A narcissist, President Biden,
    0:03:25 crowned an untested candidate
    0:03:28 and asked her in 107 days
    0:03:31 to overcome the crises of immigration and inflation
    0:03:35 and the burden of an unpopular incumbency.
    0:03:38 When 2/3 of the country says we’re on the wrong track,
    0:03:42 there’s no way someone from the current administration
    0:03:45 can credibly claim to be a change agent,
    0:03:48 much less the disrupter people are looking for
    0:03:50 in an age of rage.
    0:03:56 I am going on AC 360, MSNBC and Smirkanish
    0:03:58 to discuss the mail vote.
    0:04:00 This election gave us the opposite
    0:04:04 of the expected referendum on bodily autonomy.
    0:04:07 It was the testosterone election.
    0:04:10 The only thing I’m fairly certain of
    0:04:12 is what medium played a pivotal role
    0:04:15 for the first time in young people’s decision
    0:04:17 to violently pivot to Trump.
    0:04:22 Podcasts and that’s what this post is about.
    0:04:26 New forms of media periodically
    0:04:29 reshape our culture and politics.
    0:04:33 FDR mastered radio, JFK leveraged TV
    0:04:36 and Reagan nailed cable news.
    0:04:39 Obama energized young voters via the internet.
    0:04:43 Trump hijacked the world’s attention on Twitter.
    0:04:46 This year, it was podcasting.
    0:04:49 The three biggest media events of this fall
    0:04:53 were the debate and Harrison Trump’s respective appearances
    0:04:56 on Call Her Daddy and the Joe Rogan Experience.
    0:05:02 Almost half of adult Americans, 136 million people
    0:05:05 listened to at least one podcast a month.
    0:05:09 The global audience is now 505 million,
    0:05:12 a quarter of the internet’s reach.
    0:05:16 When Trump went on Joe Rogan, Lex Friedman,
    0:05:18 and this past weekend with Theo Vaughn,
    0:05:21 he was embracing the manosphere
    0:05:24 and riding a tectonic shift in media.
    0:05:26 The most efficient way to reach
    0:05:28 the largest and most persuadable audience,
    0:05:31 i.e. young men, is via podcast.
    0:05:34 Nothing comes close.
    0:05:38 Rogan has 16 million Spotify subscribers
    0:05:39 and can reach many more people
    0:05:42 across a variety of other platforms.
    0:05:45 In just three days after the live podcast,
    0:05:48 his three hour long conversation with Trump
    0:05:51 was viewed 40 million times on YouTube.
    0:05:56 The audio downloads likely exceeded 15 million.
    0:05:57 There will be a lot of second guessing
    0:06:00 regarding what the Harris campaign should have done.
    0:06:03 Getting on a plane to Austin to visit Rogan
    0:06:04 would have been a layup.
    0:06:09 By comparison, when Trump appeared on Fox News’ Gutfeld,
    0:06:11 which averages about three million viewers,
    0:06:14 he reached five million people,
    0:06:16 and the full episode has been viewed
    0:06:18 2.3 million times on YouTube.
    0:06:23 To reach as many people as he did via Rogan,
    0:06:25 Trump would have had to do at least
    0:06:28 three separate one hour hits on cable TV shows
    0:06:31 with numbers comparable to Gutfeld.
    0:06:34 There is really a handful of those,
    0:06:38 and they’re all on Fox, the top-rated news channel.
    0:06:41 Any other news network would have been a waste of his time.
    0:06:45 The typical viewership for CNN is below one million,
    0:06:48 and CNBC’s is less than 100K.
    0:06:53 Anyway, the comparison is apples to cocaine.
    0:06:55 Specifically, the audience on the pods
    0:06:58 is not only exponentially bigger,
    0:07:00 but also much more valuable,
    0:07:03 i.e. younger, more male, and more persuadable.
    0:07:06 What if a campaign could gather the tens of millions
    0:07:09 of undecided or persuadable voters
    0:07:11 who may or may not vote,
    0:07:13 and put their candidate in front of them
    0:07:15 for three hours in an environment
    0:07:18 that sets the candidate up for success?
    0:07:23 The Trump campaign achieved this by prioritizing podcasts.
    0:07:29 Among Fox’s 3.5 million regular viewers,
    0:07:34 70% are 50 and over and 45% are women.
    0:07:39 The number two cable network, MSNBC,
    0:07:43 reaches 1.5 million viewers most days.
    0:07:47 Its median viewer is a 70-year-old woman.
    0:07:50 So, a big audience of young men
    0:07:53 versus a small audience of older women.
    0:07:57 People listen to pods to learn.
    0:08:01 They watch cable TV to sanctify what they already believe.
    0:08:04 The former is much more appealing
    0:08:06 to candidates and advertisers.
    0:08:11 Rogan’s demographic is 80% male,
    0:08:16 93% under 54, and 56% under 34.
    0:08:22 Men under 34 are the great white rhinos of advertising,
    0:08:26 the most valuable beast in the consumer jungle,
    0:08:29 and they’re increasingly difficult to find.
    0:08:32 The average listener of My Prop G podcast
    0:08:37 is 35 male and makes about 150K a year.
    0:08:42 This is an audience I sometimes affectionately call stupid.
    0:08:45 They have disposable incomes
    0:08:47 and are in the meeting and mating years,
    0:08:49 meaning they’re prone to buying all kinds
    0:08:50 of high-margin stuff
    0:08:53 to try to increase their sexual attractiveness.
    0:08:59 They’re also the cohort ambitious politicians want to reach.
    0:09:02 Both Minnesota representative Dean Phillips,
    0:09:05 who launched a short-lived primary challenge to Biden,
    0:09:08 and Massachusetts representative Seth Moulton,
    0:09:10 who loudly called on the president
    0:09:14 to drop out after his disastrous debate performance,
    0:09:17 have come on the Prop G pod and been nice to me
    0:09:19 and they’ll likely come back.
    0:09:21 It’s not my charm.
    0:09:24 Both want to be president and recognize
    0:09:28 they have to build name recognition with young men.
    0:09:31 The calculus is simple math.
    0:09:35 Just as newspapers lost relevance to Google and Meta,
    0:09:39 cable news is losing relevance to podcasts.
    0:09:44 We have transitioned from a fossil fuel-based economy
    0:09:47 to an attention economy, full stop.
    0:09:51 If you command attention, revenue will follow.
    0:09:56 Note, the best performing tech IPO of 2024
    0:10:00 is the fourth most trafficked site in the U.S.
    0:10:05 Yet, the company was valued at only $5.7 billion
    0:10:10 when it debuted on the Nasdaq seven months ago.
    0:10:15 Since then, the market cap of Reddit is up 274%.
    0:10:20 The only ad-supported medium growing as fast
    0:10:25 as Meta, TikTok, Alphabet, and now Reddit is podcasting.
    0:10:29 Podcasting revenue grew 18% this year,
    0:10:34 similar to Alphabet at 15% and Meta at 17%.
    0:10:39 Podcasts share of attention is well ahead
    0:10:41 of their share of ad revenue.
    0:10:44 This delta will converge.
    0:10:47 I believe podcast revenue is going to grow faster
    0:10:49 than that of every other digital platform
    0:10:53 with the possible exception of TikTok.
    0:10:55 My guess is that next year,
    0:10:58 pods ad revenue will grow by 20 plus percent.
    0:11:01 Listenership will continue to grow as well
    0:11:04 and the ARPU like those of Meta and Alphabet
    0:11:06 will increase dramatically too.
    0:11:08 As advertisers discover,
    0:11:12 this is where young successful consumers have been hiding.
    0:11:17 Podcast CPMs now are about $18 for a 30 second ad
    0:11:20 and $25 for a 60 second ad.
    0:11:24 When people approach me in the wild,
    0:11:27 it’s easy to discern where they’ve been exposed
    0:11:28 to my content.
    0:11:32 A high five in some rowy banter, video.
    0:11:34 If they greet me like a friend they haven’t seen
    0:11:37 in a while, podcast.
    0:11:39 It’s a very intimate medium.
    0:11:42 You are physically in somebody’s ear
    0:11:44 in a private setting washing the dishes,
    0:11:46 working out, walking the dog.
    0:11:49 It’s just you and them.
    0:11:52 That’s one reason advertisers like podcasts
    0:11:57 as the audiences I’m being sold to screen is more porous.
    0:12:00 A listener’s guard isn’t up.
    0:12:03 Tom Brokaw never had that kind of relationship
    0:12:04 with his audience.
    0:12:08 That level of intimacy also makes podcasting
    0:12:10 a great medium for interviews.
    0:12:12 In his conversation with Rogan,
    0:12:15 Trump seemed unusually relaxed and comfortable,
    0:12:17 a guy you could grab a beer with.
    0:12:20 – I always got more publicity than other people
    0:12:22 and I didn’t, it wasn’t like I was trying.
    0:12:25 In fact, I don’t know exactly why.
    0:12:26 Maybe you can tell me why.
    0:12:27 – Oh, I can definitely tell you.
    0:12:29 You said a lot of wild shit.
    0:12:30 – Maybe.
    0:12:33 – And that’s typical for a pod.
    0:12:36 The medium has a zeitgeist where hosts generally try
    0:12:39 to present their guests in a good light.
    0:12:41 Unlike cable TV, the hosts aren’t looking
    0:12:42 for a gotcha moment.
    0:12:45 We let the guest run.
    0:12:49 Initially, people accused pods of being radio.
    0:12:50 They aren’t.
    0:12:52 Pods aren’t shackled to the clock
    0:12:54 for the listener or the podcaster.
    0:12:57 They’re on demand, i.e. streaming.
    0:13:02 And hosts decide how much time a topic deserves or doesn’t.
    0:13:04 Think about this.
    0:13:07 One of the key commercial advantages of movies over TV
    0:13:10 was the producer’s control over the cadence
    0:13:12 and length of their content.
    0:13:15 They didn’t have the 21 or 41 minute guardrails
    0:13:17 that network TV later imposed.
    0:13:21 Rogan thought Trump’s story was worth three hours
    0:13:24 of his audience’s time, not one or four.
    0:13:28 TV anchors and radio hosts are asked
    0:13:33 to create differentiated art using a one size canvas.
    0:13:35 (gentle music)
    0:13:38 Broadcasters sink a lot of capital
    0:13:41 into state of the art studios, satellite trucks,
    0:13:46 transmitters, fiber optic cables, people, et cetera.
    0:13:50 Podcasts don’t need any of that stuff.
    0:13:52 That capex was a moat that created leverage
    0:13:54 for the networks and their shareholders
    0:13:58 who captured most of the medium’s profits.
    0:14:01 They controlled the means of production.
    0:14:03 The moats now been crossed.
    0:14:06 When I go on CNN or another TV network,
    0:14:09 I travel to a studio staffed by numerous
    0:14:11 skilled technical people.
    0:14:14 The network pays their salaries and benefits
    0:14:16 and gives them offices and snacks.
    0:14:21 A decent TV studio can easily run 400K.
    0:14:23 It’s also inefficient.
    0:14:27 My show on CNN Plus, Weak Flex,
    0:14:30 took a dozen or more people the better part of a week
    0:14:34 to pull together 21 minutes of content.
    0:14:37 Awesome content, but still.
    0:14:41 Now my studio looks like a pretentious footballer’s
    0:14:42 Dopp kit.
    0:14:45 I doubt it cost a thousand dollars.
    0:14:47 Assembled by my tech guy Drew,
    0:14:49 it travels with me everywhere.
    0:14:52 Any place that has broadband or just sell reception,
    0:14:55 I have a studio that can produce content.
    0:14:58 I’d speculate a third of my podcasts
    0:15:01 are done from somewhere other than my home studio.
    0:15:04 Think about how efficient that is.
    0:15:08 It enables me to host or co-host three pods a week
    0:15:10 and appear on many more.
    0:15:13 That kind of portability wasn’t physically
    0:15:15 possible pre-COVID.
    0:15:19 Meanwhile, net neutrality ensures that any podcast
    0:15:24 I go on is available to anyone anytime.
    0:15:28 There is no technical reason I could not, in theory,
    0:15:31 reach every one of the 5.25 billion humans
    0:15:33 on the planet with a digital device.
    0:15:37 In broadcast and cable TV,
    0:15:40 the platform has always been bigger than the talent.
    0:15:44 In podcasting, it’s the other way around.
    0:15:46 There is little sustainable enterprise value
    0:15:48 in a podcast company.
    0:15:53 What matters isn’t CAPEX or infrastructure, it’s talent.
    0:15:57 That’s why a lot of individual podcasters are getting rich,
    0:16:00 but not a lot of podcast companies’ shareholders.
    0:16:03 All you really need to start
    0:16:06 is a computer and an internet connection.
    0:16:08 You don’t have to run the obstacle course of suits
    0:16:11 you’d encounter trying to get into TV or radio
    0:16:13 or any other old media,
    0:16:17 which is another reason advertisers love podcasts.
    0:16:20 There are fewer hands in the talent’s pocket
    0:16:22 and fewer hands in their pockets,
    0:16:26 resulting in a greater ROI on ad spend.
    0:16:30 Low CAPEX means the profits can be enormous
    0:16:32 once a podcaster covers the costs
    0:16:34 of producing two pods a week,
    0:16:38 like two or three producers and a part-time sound engineer.
    0:16:42 The ProfG podcast portfolio, ProfG,
    0:16:45 ProfG markets, Raging Moderates,
    0:16:50 will register 2025 revenue of approximately $10 million.
    0:16:54 We employ five producers, two analysts,
    0:16:57 and a technical director and sound engineer.
    0:17:02 Few businesses garner $1 million plus per employee.
    0:17:06 Pivot, the podcast I co-host with Kara Swisher,
    0:17:10 does more revenue with even fewer resources.
    0:17:12 Note, Vox, our distribution partner,
    0:17:14 is responsible for ad sales.
    0:17:18 The pods that make the jump to light speed,
    0:17:21 covering their fixed costs, and few do,
    0:17:24 are very profitable businesses.
    0:17:28 The best part, A, as I have a great team
    0:17:31 with some people I’ve worked with for over a decade or more,
    0:17:36 I spend eight to 12 hours total per week on the pods.
    0:17:40 The leverage on my time is substantial.
    0:17:43 The cocktail of broad reach and low overhead
    0:17:48 translates to more for less for advertisers and talent.
    0:17:52 All the moons have lined up,
    0:17:55 and podcasting is on an upward spiral.
    0:17:58 But as with most everything digital,
    0:18:03 podcasting is a winner-take-most-or-all proposition,
    0:18:06 because everyone has access to everyone.
    0:18:09 A scant handful of pods,
    0:18:12 those with the biggest listenerships,
    0:18:15 capture nearly all the ad revenue.
    0:18:18 By some estimates of the 600,000 podcasts
    0:18:21 that produce content each week,
    0:18:25 the top 10 get half the revenue.
    0:18:28 Put another way, to build a business in podcasting
    0:18:31 that pays people well and keeps the attention
    0:18:34 of a host with high opportunity costs,
    0:18:39 you likely need to be in the top 0.1% by listenership.
    0:18:44 The odds of success are admittedly long.
    0:18:46 If you’re a high school drama student
    0:18:49 who goes on to join SAG-AFTRA,
    0:18:51 you’re two times more likely to win an Academy Award
    0:18:54 than have a sustainable pod.
    0:18:57 As a member of UCLA’s crew team,
    0:19:01 I was 3.5 times more likely to end up in the Olympics
    0:19:04 than telling dick jokes and making a good living
    0:19:06 on a successful podcast.
    0:19:07 I could do this all day.
    0:19:09 The political power of podcasting
    0:19:12 is only beginning to be felt.
    0:19:15 This election was supposed to be a referendum
    0:19:17 on bodily autonomy.
    0:19:18 It wasn’t.
    0:19:22 Historically, the candidate who raises the most money wins.
    0:19:24 She didn’t.
    0:19:25 In each election,
    0:19:29 the victor is likely to be whoever best weaponizes
    0:19:31 an emerging medium.
    0:19:33 He did.
    0:19:36 By far, the most potent media weapon this time
    0:19:39 was podcasting.
    0:19:44 Life is so rich.
    0:19:47 (gentle music)
    0:19:51 (gentle music)
    0:19:53 (gentle music)
    0:20:02 [BLANK_AUDIO]

    As read by George Hahn.

    The Podcast Election

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  • Trump vs Democracy: Two Historians’ Perspectives

    AI transcript
    0:00:04 Support for this show comes from Constant Contact.
    0:00:07 If you struggle just to get your customers to notice you,
    0:00:10 Constant Contact has what you need to grab their attention.
    0:00:15 Constant Contact’s award-winning marketing platform offers all the automation,
    0:00:20 integration, and reporting tools that get your marketing running seamlessly,
    0:00:23 all backed by their expert live customer support.
    0:00:27 It’s time to get going and growing with Constant Contact today.
    0:00:30 Ready? Set. Grow.
    0:00:34 Go to ConstantContact.ca and start your free trial today.
    0:00:38 Go to ConstantContact.ca for your free trial.
    0:00:41 ConstantContact.ca.
    0:00:46 Support for PropG comes from Anthropic.
    0:00:48 It’s not always easy to harness the power potential of AI.
    0:00:50 For all the talk about its revolutionary potential,
    0:00:55 a lot of AI systems feel as if they’re designed for specific tasks that are only performed by select few.
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    0:01:04 The latest model, Cloud 3.5 Sonnet, offers groundbreaking intelligence at an everyday price.
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    0:01:14 You can discover how Cloud can transform your business at anthropic.com/cloud.
    0:01:23 Food and security still affects millions of individuals around the globe.
    0:01:26 Nestle, a global leader in nutrition, health, and wellness,
    0:01:31 understands the importance of working together to create lasting change.
    0:01:34 Nestle’s partnerships extend beyond just financial support,
    0:01:37 from building urban hoop houses to producing custom seasoning for food banks.
    0:01:41 Nestle and their partners actively engage with local communities,
    0:01:45 listening to their needs, and working together to find innovative solutions.
    0:01:51 Nestle is committed to helping support thriving, resilient communities today and for generations to come.
    0:01:54 Together, we can help to build stronger, healthier communities.
    0:01:56 Learn more at Nestle.com.
    0:02:04 Welcome to another episode of The Prop G Pod.
    0:02:09 In place of our regularly scheduled programming, we’re sharing an episode of “On” with Cara Swisher.
    0:02:14 She’s this journalist, nice lady, nice lady.
    0:02:19 Cara is the co-host of Pivot and twice a week Cara interviews power players across industries,
    0:02:21 including business tech, media, and politics.
    0:02:26 Cara has kind of the deepest Rolodex in the world, literally.
    0:02:33 In this episode that we’re sharing today, Cara speaks to historians Lindsey Shervinsky and Tim Naftali.
    0:02:36 Lindsey is the executive director of the George Washington Presidential Library,
    0:02:40 and Timothy is the former director of the Richard Nixon Presidential Library and Museum.
    0:02:42 I know that sounds like a fucking snooze fest.
    0:02:44 It’s actually quite interesting.
    0:02:48 They discuss the birth of American democracy, the structural weaknesses in our system.
    0:02:54 Trump’s authoritarian tendencies and whether or not American democracy could survive another Trump presidency.
    0:02:59 I like Cara’s interviews because she knows when to interrupt, she knows when to let them run.
    0:03:04 She tries to set people up for success, but she’s absolutely not scared to push back on them, which I like.
    0:03:10 I’m often self-conscious whenever we do an interview together, because it’s just every time I finish an interview with Cara,
    0:03:12 I think she’s just better at this.
    0:03:14 And interviewing is a vastly underrated skill.
    0:03:17 You know, very rarely do you say, “Wow, that was a great moderator. That was a great interviewer.”
    0:03:20 It’s whether you liked the person being interviewed, and she’s very good at it.
    0:03:24 Anyways, enough of that. Here’s the episode.
    0:03:45 Hi, everyone, from New York Magazine and the Vox Media Podcast Network, this is On with Cara Swisher, and I’m Cara Swisher.
    0:03:53 My guests today are Dr. Lindsay Trevinsky and Dr. Timothy Naftali, two historians who will help us put the reelection of Donald J. Trump
    0:04:02 into historical context and understand if and how American democracy will stand up to his obvious authoritarian impulses.
    0:04:05 If you’re anything like me, you’re feeling, “Look, badly today.”
    0:04:09 And you should let yourself feel badly. It’s okay.
    0:04:13 Secondly, get up after you feel badly, because there’s a lot of work to do.
    0:04:20 Thirdly, he is a terrible person, and half of our country voted for him knowing that.
    0:04:27 But it’s also important to step back and take the long view with two historians who will help you see this moment with a little more clarity
    0:04:31 and perhaps make you feel better. Maybe not, but at least we can try.
    0:04:37 Lindsay is a presidential historian and the executive director of the George Washington Presidential Library,
    0:04:43 and her newest book is Making the Presidency, John Adams and the Presidents that Forged the Republic,
    0:04:49 but she’s written extensively about our first president and probably our best one, George Washington.
    0:04:55 Tim is a senior research scholar in the Faculty of International and Public Affairs at Columbia University
    0:05:00 and the former director of the Federal Richard Nixon Presidential Library and Museum.
    0:05:04 He is the author, co-author, or editor of eight books.
    0:05:10 Our expert question comes from Bill Adair, the creator of Politifact and author of Beyond the Big Lie
    0:05:15 and a professor of journalism and public policy at Duke. Let’s get to it.
    0:05:29 Lindsay and Tim, thank you for being on on. Pleasure.
    0:05:33 Thank you so much for having us, a longtime listener, first-time caller.
    0:05:37 Former President Donald Trump is now President-Elect Donald Trump.
    0:05:42 He won a surprisingly resounding victory. His Republican Party won the Senate and we are still waiting for the results from the House,
    0:05:45 but the GOP has a good chance of holding it. We’ll see.
    0:05:49 We’re taping this on Wednesday, November 6th, the morning after the election,
    0:05:54 and I wanted to start by getting your initial reactions to Trump’s victory, Lindsay and then Tim.
    0:05:57 I’m surprised. I’m really surprised.
    0:06:04 I think that I have to completely rethink everything I knew about how elections work and what matters.
    0:06:10 I also think that at this moment, I feel like I need to rethink my general optimism about
    0:06:16 the world and democracy and the American people, but I also recognize that there’s a lot we don’t know yet
    0:06:20 in terms of how people actually made decisions and why they made decisions.
    0:06:26 So I’m trying to leave space for learning, but mostly I’m just really, really surprised.
    0:06:28 Okay, just be clear. It’s half the American people.
    0:06:31 Correct, yes, about half the American people.
    0:06:41 I guess I’m shocked that what blows me away is that 2016, a lot of people I think didn’t have a sense of who he was,
    0:06:52 but now more people have voted for the explicit cruelty and veniality, and that feels like a very intentional choice.
    0:06:54 Absolutely, Tim.
    0:07:08 I wasn’t as surprised because I had sadly come to the understanding that January 6 didn’t matter for half the country.
    0:07:19 And for me, as a historian and citizen, that was the hardest realization that at the very least,
    0:07:27 being guilty of dereliction of duty on that day wasn’t enough to disqualify someone from national leadership.
    0:07:34 You could have a disagreement as to whether he criminally provoked January 6,
    0:07:40 but there’s absolutely no doubt the evidence is overwhelming that he did nothing.
    0:07:51 And the idea that someone like that could be elevated again to national leadership is very, very difficult to swallow.
    0:07:56 And that became clear to me when it was so close.
    0:08:10 The fact that Donald Trump remained not just a viable candidate, but a powerful and successful candidate on the national level told us a lot about ourselves.
    0:08:27 And so I’m afraid, as a result, I grasped for myself the fact that Donald Trump had been normalized by enough of the country that he could win.
    0:08:31 And the fact that he was normalized tells us something about ourselves.
    0:08:36 So we’re going to bounce back and forth between the founding of the country, the Nixon era, and the present.
    0:08:39 Washington helped create our democracy, Nixon certainly damaged it.
    0:08:43 And the question for today is, how will democracy weather a second Trump presidency?
    0:08:47 Lindsay, you’ve talked about the parallels between 1790s and today.
    0:08:54 Back then, they also saw a threat of political violence, contested elections, foreign interference in our elections, just different foreign interferers.
    0:08:56 The questions over who belonged is a citizen.
    0:09:01 This has been an ongoing situation in our country forever, pretty much.
    0:09:05 Walk us through some of the parallels and the key differences.
    0:09:08 Well, as you said, there are so many parallels.
    0:09:17 Many of the challenges that we face in this current moment, and we have faced in previous iterations of American life, existed in the 1790s.
    0:09:35 Weak political parties, really intense partisanship, foreign interference in elections, questions about citizenship and who belongs, xenophobia, legislation that tackles citizenship and freedom of speech, political violence, actual political violence and the threat of political violence.
    0:09:38 And I think weak institutions.
    0:09:50 There have been times in American life where our institutions have been quite strong in the 1790s because they were so new, and they didn’t have the long scope of decades and centuries of sort of building them up.
    0:09:52 They were quite weak and fragile.
    0:09:55 So all of that sounds similar to us, and I think it should.
    0:10:03 What I see as the key difference is, in the 1790s, there was a shared sense by both parties, both the Democratic Republicans and the Federalists,
    0:10:11 that one misstep might cause the nation to completely fall apart because it was so new and it was so fragile.
    0:10:17 And I think, yeah, and I think the difference is that most of those people had skin in the game.
    0:10:26 They had either literally fought in the revolution to found the nation or they had participated in the institutions, whether it be Congress or state legislatures.
    0:10:29 And so they knew how hard it was to build something.
    0:10:32 They knew what fragile looked like.
    0:10:40 And I think the election of 1800, they were all sort of chastened by how close it came to being completely blown apart.
    0:10:48 And as a result, most people stepped back from the brink and stepped back from some of that violence and attempted to build bridges.
    0:10:55 I think today we’re complacent because we think, oh, well, the country’s been around for 200, however many years.
    0:10:57 Of course, it will continue almost.
    0:11:00 Of course, it will continue to survive.
    0:11:01 Of course, it will be fine.
    0:11:03 Because that’s what it has always been.
    0:11:07 But we know from looking at other nations, republics don’t always survive.
    0:11:08 They don’t.
    0:11:10 In fact, they never do.
    0:11:11 That’s true.
    0:11:18 And the 300 year mark is usually a pretty good indicator of when things can sometimes start to go sideways.
    0:11:20 So that is something to keep in mind.
    0:11:25 So Trump has told his voters that he will be their retribution, which is a very unusual word to use.
    0:11:28 His campaign has promised mass deportation camps.
    0:11:31 He said he will prosecute his political rivals and the voters rewarded him.
    0:11:36 And he now has possibly the total power over all three branches, by the way.
    0:11:42 Tim, there are other examples in our history and presidential candidates campaigned as a strongman and won a broad mandate of voters.
    0:11:45 Has there been anyone else similar?
    0:11:56 I’ve been thinking a little bit about the election of 1828 simply because Andrew Jackson ran seeking vengeance.
    0:12:04 He and his supporters believed they had been deprived of the White House in 1824.
    0:12:14 And much of his candidacy in the intervening four years was about removing John Quincy Adams.
    0:12:20 The difference is that Andrew Jackson wasn’t seeking vengeance against half the country.
    0:12:26 He was seeking vengeance largely against one man and those around that one man.
    0:12:33 But he certainly presented himself as a strongman, though he wouldn’t have used the term dictatorship.
    0:12:43 But he intended to make the presidency a much more powerful instrument or institution than it had been.
    0:12:48 He intended to veto things he did not agree with.
    0:12:56 He believed himself to be on the same level as the Supreme Court in determining the constitutionality of American laws.
    0:12:58 But again, there’s a big difference.
    0:13:04 First of all, we’re not talking about the national security state of the 21st century.
    0:13:15 So the presidency, the executive branch is a much weaker, smaller branch, less pervasive in our life than now.
    0:13:22 And Andrew Jackson was not seeking vengeance against whole classes of people.
    0:13:28 So we’ve had sort of a vengeful, successful candidate.
    0:13:37 But I think that the consequences in this era are enormous and much bigger than they were long ago.
    0:13:43 He did have vengeance against Native Americans and wouldn’t fulfill laws that the Supreme Court even passed.
    0:13:46 He declined to do so.
    0:13:49 He didn’t run for office.
    0:13:55 This was an approach to people that he had before.
    0:14:04 No, his particular treatment of Native Americans stands as one of the blots on our nation’s history.
    0:14:15 Donald Trump has made it clear that he doesn’t want any guardrails, that he doesn’t intend to have establishment Republicans around him.
    0:14:25 He doesn’t intend to have, and this was not used by him, but by others, any adults in the room to tell him what he cannot do.
    0:14:35 He’s also made clear that he wants to use the instruments of the federal government to hurt his enemies.
    0:14:44 We are going to enter, at least if he does what he says he is going to do, another era of the enemy’s list.
    0:14:49 Something we have not actually experienced since the 1970s.
    0:14:51 With a mandate of some sort, some kind of mandate.
    0:15:00 So if we go back to our founding, President George Washington could have easily become a monarch, as everybody knows and hears about, but instead he helped art the first modern democracy.
    0:15:09 Talk about the opportunities Washington had to consolidate power around himself and how he reacted to them, Lindsay, because he certainly had the ability to do so.
    0:15:19 Oh, he had an enormous ability. I mean, one of the real openings for his presidency was that the Constitution is extraordinarily short, especially prior to our amendments.
    0:15:26 It was only about 4,000 words, and Article 2, which controlled the executive branch, was very, very short.
    0:15:29 And I think partly that was by design.
    0:15:34 The delegates at the Constitutional Convention didn’t really want to talk about the presidency with Washington in the room.
    0:15:45 That would have been extremely uncomfortable, and they also trusted him to make good decisions to establish precedents that would be wise and cautious for his successors.
    0:15:58 And I think they also understood that a certain amount of vagueness and silence was required in order to give flexibility to people once they were in office to meet the challenges that could not yet possibly be foreseen.
    0:16:16 So much of the presidency wasn’t defined, and instead Washington had to figure out how he interacted with other branches of government, how he interacted with citizens, how he was supposed to govern in a crisis, whether it be a foreign crisis or domestic insurrection.
    0:16:22 All of those things are not really articulated in the Constitution and very little legislation.
    0:16:26 And who were his intellectual and moral forces? What were the thinkers who molded him?
    0:16:29 Well, he was largely self-taught.
    0:16:35 He had had a little bit of schooling, but he was largely self-taught, and he did so by buying books throughout his entire life.
    0:16:44 So he read most of the Enlightenment tracks, but I wouldn’t necessarily think of him as an Enlightenment man like I would Thomas Jefferson, for example.
    0:16:53 Instead, I think he was largely shaped by his own experiences and his failures as a younger man, his successes during the Revolution.
    0:17:02 And he brought that experience into his presidency with an understanding that he did not have all the answers and that he had real weaknesses and there were things he didn’t know.
    0:17:10 And so as a result, he surrounded himself with people who had different types of expertise and knowledge and he listened to them.
    0:17:17 And so we’re talking about people like Alexander Hamilton and Thomas Jefferson and Henry Knox and Edmund Randolph, which were his first administration.
    0:17:22 But he was also close with John Jay, who was the first Chief Justice of the Supreme Court.
    0:17:30 And so he was actively seeking out as much information as possible to try and form this office in a responsible fashion.
    0:17:35 All right, let’s fast forward. Richard Nixon believed that JFK and the Democrats had stolen the election from him in 1960.
    0:17:38 And I just interviewed Chris Wallace and it looks like he made of.
    0:17:42 So when he became president, it was time to run for reelection in 1972.
    0:17:45 He was happy to play dirty tricks in order to win.
    0:17:47 And it was his proclivity anyway.
    0:17:53 Talk about those two elections, 1960 and ’72, both were problematic for different reasons.
    0:18:01 How do you look at them and are they speed bumps on the road to democracy or are they signs our system wasn’t as strong as we think?
    0:18:07 Well, in 1960, John Kennedy was taking a risk.
    0:18:19 The risk was whether the American people were ready to break that era’s glass ceiling, which was to elect a Catholic to the presidency.
    0:18:21 And it was a tough election for him.
    0:18:26 In many ways, the Catholic issue weighed on him.
    0:18:32 He lost a lot of votes for religious reasons.
    0:18:43 And yes, we’ll we’ll never quite know with certainty the shenanigans in Texas and the extent to which
    0:18:50 democratic efforts in Chicago counterbalanced Republican efforts in the south of this of the state.
    0:19:01 But what I think is is is important to understand about 60 is that there was a glass ceiling to break and it made that election much closer.
    0:19:14 Nixon’s dirty tricks of the ’72 campaign were prefigured in his dirty tricks against his opponents starting in 1971.
    0:19:31 And in many ways were prefigured in the dirty trick that he authored in 1968 to try to undermine the negotiations between the Johnson administration and North Vietnam as a way to make the Vietnam war as salient as possible in the election.
    0:19:46 And in it, not exactly the same because it didn’t involve covert actions in this case, but the way in which Donald Trump undermined the possibility of some kind of legislation regarding the border.
    0:20:01 Nixon did not want the Vietnam situation to appear to be on the road to resolution in ’68 because that was his strongest issue against at that point his opponent, Vice President Hubert Humphrey.
    0:20:23 What I wanted to to mention about 60 that I think is so important is that even though Kennedy’s victory was narrow and even though Kennedy himself didn’t feel he had a mandate, which is one of the reasons why he nominated so many Republicans for his cabinet and for his inner circle.
    0:20:35 A whole generation of young Americans began to see him as the personification of the White House and John Kennedy would go to shape the way in which people ran for the White House.
    0:20:43 And this, this was something that that became a huge chip on Richard Nixon’s shoulders.
    0:21:00 Richard Nixon was not only angry because he felt that the Kennedy money and the Kennedy allies had deprived him of victory, but there was something about the about the Kennedy charisma that had free space in his brain.
    0:21:12 And a lot of the Nixon administration, a lot of Nixon’s own turmoil, inner turmoil can be explained as this inner debate between himself and the dead John F. Kennedy.
    0:21:15 He never got over that.
    0:21:15 Right.
    0:21:22 So getting back to Donald Trump in 2019, he tried to bully President Zelensky of Ukraine into announcing investigation to his rival Joe Biden.
    0:21:30 After he lost the 2020 election, he did everything he could to steal and including calling the Secretary of State in Georgia and pressuring him to commit fraud and then sending a mob to attack the Capitol in January 6.
    0:21:34 I do blame him if even if you don’t.
    0:21:39 How difficult is the idea of free and fair elections with Trump in the Oval Office?
    0:21:41 I think people are worried about that today.
    0:21:44 Already, Lauren Boebert has said, let’s do a third term.
    0:21:45 Lindsay and then Tim.
    0:21:54 Well, I think that we have the infrastructure in place to have free and fair elections because we have been having unbelievably free and fair elections.
    0:22:01 However, the part of this that we don’t know that’s unprecedented is that a lot of this stuff just isn’t tested.
    0:22:08 A lot of the things that Trump could potentially do kind of requires the honor system.
    0:22:18 So, for example, the Insurrection Act gives the president enormous leeway to call up the military to use in a domestic and a domestic scene.
    0:22:26 And so we don’t know if in four years he would call up the military under some false pretense and that could be challenged in court.
    0:22:30 But that takes a really long time and we don’t know how it would go.
    0:22:32 And so our infrastructure is great.
    0:22:36 It’s just this question that’s so much of our system, especially the presidency.
    0:22:39 What he could do when he always, he’s a violator of norms.
    0:22:39 He’s a violator of the Constitution.
    0:22:41 Yes, absolutely.
    0:22:46 And he’s a reminder, I think, how much of it does require someone who’s generally acting in good faith.
    0:22:50 Good faith. Tim, briefly.
    0:23:00 My great concern is that Trump feels he was not successful at reshaping the presidency in his first term.
    0:23:08 And that so many of our, most of our presidents, in fact, until Trump, let the office shape them to some degree.
    0:23:13 Of course, they wanted to stamp it with their imprint.
    0:23:19 Dwight Eisenhower wanted to make sure the floors were full of cleat marks from his golf shoes.
    0:23:23 But they didn’t ignore the norms of the office.
    0:23:27 They learned them and Trump ignored them.
    0:23:36 And he is making clear, has made clear to us that, that he will define the interests of the United States.
    0:23:42 And that the office will be a means by which to achieve those personal interests.
    0:23:48 And, you know, John Bolton in his memoirs makes clear that it wasn’t just once.
    0:23:51 It wasn’t just the Zelinsky call.
    0:24:03 It was Trump’s approach to foreign policy in general that whatever was good for him and good for the Trump business was, by definition, good for America.
    0:24:08 That is completely unique in our history.
    0:24:25 And in terms of the threat to our constitution, we have to keep in mind that we still have institutions and the U.S. military hasn’t been tested in this way.
    0:24:38 But we have to keep in mind that there are many people with decades of training in the military and it would be very hard for Trump to remove all of them.
    0:24:53 And their, their lessons, what they have learned is that the military does not play a domestic police role and that the military respects the Constitution because their oath is to the Constitution, it’s not to any president.
    0:24:55 So that would be severely tested.
    0:24:59 We’ll be back in a minute.
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    0:28:04 Let’s talk about wannabe authoritarians.
    0:28:08 Let’s talk about democratic norms around that.
    0:28:11 Washington certainly, as we noted, could have been an authoritarian if you wanted to.
    0:28:12 Trump may become one.
    0:28:15 This summer the Supreme Court decided the presidents are essentially immune from prosecution
    0:28:16 for official acts.
    0:28:20 Lindsay, you’ve written about how Washington used the cabinet to strengthen a weak executive
    0:28:21 branch.
    0:28:25 How does that Washington reacts to a SCOTUS ruling and the massive increase in executive
    0:28:27 power since he was president?
    0:28:32 Well, I think generally if someone says to you, “The Founders thought that,” that is
    0:28:36 a red flag that whatever they’re going to say next is full of crock because the Founders
    0:28:41 rarely agreed on anything, with perhaps one exception, and that was we were not to have
    0:28:42 a king.
    0:28:43 It’s not supposed to be a king.
    0:28:46 The president is supposed to be accountable to the law.
    0:28:50 The president, once they leave office, is a citizen just like anyone else.
    0:28:55 And so while usually I’m sort of loathe to predict what they would think, I can be pretty
    0:29:00 confident that they would be horrified at the notion that a president would not be held
    0:29:05 accountable for their actions or would retain some sort of immune status once they stepped
    0:29:06 down.
    0:29:07 Okay.
    0:29:12 So, authorities by definition try to consolidate power, the military, the media, et cetera.
    0:29:15 Nixon completely abused the executive office for his own personal gain, by the way, sometimes
    0:29:17 for unbelievably petty reasons.
    0:29:21 Tim, walk us through some of his more egregious abuses of paramount why he was able to get
    0:29:23 away with them.
    0:29:26 And after Watergate, there were a number of reforms passed to place guardrails on the
    0:29:27 executive branch.
    0:29:33 What were the consequential ones, and are they still effective today?
    0:29:39 Richard Nixon wanted to do much more damage than he was able to get away with.
    0:29:43 Let me give you some examples.
    0:29:52 Richard Nixon had an intense fear of Jewish Americans and believed that there was a conspiracy
    0:29:55 of Jewish Americans in the federal government.
    0:30:02 And he ordered the removal of Jewish Americans from any position of great sensitivity in
    0:30:03 the U.S.
    0:30:04 government.
    0:30:05 It’s on tape.
    0:30:06 It didn’t happen.
    0:30:10 And he was surrounded by some anti-Semites, but there was a limit to what they were willing
    0:30:15 to do to basically undermine the U.S. government.
    0:30:25 And so they satisfied him by moving around some Jewish Americans in an obscure part of
    0:30:29 the Labor Department, but it was a part of the Labor Department that is still, by the
    0:30:35 way, it’s not the same people, of course, but still the source of our monthly unemployment
    0:30:37 figures, which are politically sensitive.
    0:30:41 They were then, they are now.
    0:30:44 Nixon wanted to do more, but then he moved on.
    0:30:52 One of the things about Nixon is that he would vent, and sometimes it would go away
    0:30:55 and he would not follow up and want something done again.
    0:30:58 And in other cases, he would keep pushing.
    0:31:02 And there was a team around him that understood they could not implement everything that he
    0:31:04 ordered.
    0:31:12 In the tax issue, he vented and wanted to go after prominent Democrats and prominent
    0:31:14 opponents of the war.
    0:31:22 And fortunately for the country, the Republicans in the Treasury Department in the IRS wouldn’t
    0:31:28 do it, but they had to stand up to Nixon and they were able to do it because the Secretary
    0:31:35 of the Treasury, George Schultz, wouldn’t let his people audit the three or 400 names
    0:31:37 that were given to them by the White House.
    0:31:42 Nixon got upset, but in the end he decided it was too much of a problem for him to fire
    0:31:46 George Schultz and then he got absorbed by Watergate.
    0:31:52 So we’re relying in that regard on the kindness of these people?
    0:31:56 More than the kindness, we’re relying on the fact that they were actually American patriots
    0:31:57 and following the law.
    0:31:58 Right.
    0:32:01 So Trump will have a team of sycophants who will be ready to ask you to his whims every
    0:32:02 time he comes.
    0:32:03 That’s my concern.
    0:32:09 And my great concern is that we not only have a president who’s promised us that he will
    0:32:18 build that kind of system, but he now has a Supreme Court that has just recognized the
    0:32:25 fact that there’s presumptive immunity for official acts and asking the IRS to look into
    0:32:31 somebody’s taxes could be viewed as an official act, the president could say, “Well, I just
    0:32:33 thought they might be cheating on their taxes.
    0:32:34 There might be no evidence of it.”
    0:32:44 But my great concern in this next Trump administration will be these abuses of power that Nixon wanted
    0:32:49 to do on a grand scale but didn’t, did it on a small scale because of guardrails.
    0:32:54 And without those guardrails, the president has enormous power to do damage.
    0:32:58 So in 2020, Trump told General Mark Milley, who was chairman of the Joint Chiefs of Staff,
    0:33:02 to just shoot anti-racism protesters and to crack their skulls and beat the fuck out of
    0:33:03 them.
    0:33:05 Luckily for the country, Milley did not comply.
    0:33:10 In October, Trump said this terrible thing during an interview with Maria Bartiroma, who
    0:33:12 is perfectly off herself.
    0:33:13 Let’s hear it.
    0:33:16 I think the bigger problem is the enemy from within.
    0:33:17 We have some very bad people.
    0:33:21 We have some sick people, radical left lunatics.
    0:33:26 And I think they’re, and it should be very easily handled by, if necessary, by National
    0:33:32 God or if really necessary by the military because they can’t let that happen.
    0:33:36 Lindsay, put Trump’s calls for turning the military against American citizens into historical
    0:33:37 context for us.
    0:33:41 Washington dealt with the Whiskey Rebellion in the 1790s when he mobilized American troops
    0:33:45 against Americans to smother an insurgency, and Hamilton was quite involved with that.
    0:33:48 How does that compare to what we saw in 2020?
    0:33:53 So Congress had passed a whiskey excise tax a couple of years previous, and there had
    0:33:56 been a number of protests, and then they became violent.
    0:34:02 A house was burned down that belonged to a federal tax collector, and shots were exchanged.
    0:34:08 There was an act that was passed in 1792 which gave the president the right to call up local
    0:34:13 militias if Congress was out of session because Congress was out of session most of the year.
    0:34:17 They were never around when anything interesting happened, and it took a really long time to
    0:34:18 get them back into session.
    0:34:23 So if there was an emergency, the president could submit evidence that immediate action
    0:34:26 was required to a Supreme Court justice for approval.
    0:34:33 Now Washington did try a number of peaceful methods to get this violent protest to disperse.
    0:34:34 That didn’t work.
    0:34:38 He then called up the militia and sent it out.
    0:34:42 He actually turned around, which was really important because he didn’t want to be seen
    0:34:45 as arresting his own citizens.
    0:34:48 Most of the protesters, the cases against them, were dismissed.
    0:34:52 Those that were convicted, he pardoned because it wasn’t actually about the punishment.
    0:34:58 It was about proving that the government had the right to actually pass attacks.
    0:35:03 I think what’s really important is over the course of American history, the military has
    0:35:08 at times been used in ways we would be uncomfortable with, especially in the South to enforce slave
    0:35:11 codes, especially in the wake of slave uprising.
    0:35:13 So it’s not like we have a perfect history here.
    0:35:14 We don’t.
    0:35:20 However, what strikes me about Trump’s language in that particular instance is not necessarily
    0:35:24 the military part, although that is quite important.
    0:35:26 It’s the enemy within.
    0:35:32 It’s drawing a distinction of American people who deserve to be punished by the military.
    0:35:37 And that is language that I know a lot of the other historians you’ve had on have demonstrated
    0:35:41 that is language that authoritarians use as part of their playbook.
    0:35:42 Right.
    0:35:46 Authoritarians oftentimes willing to use violence to maintain a grip on power.
    0:35:50 In 1971, Nixon was battling a growing anti-war sermon in May of that year.
    0:35:54 He responded to a huge protest with 10,000 federal troops and the largest mass to arrest
    0:35:55 in US history.
    0:35:58 A fake bomb was found under a bridge and Nixon mused.
    0:36:01 He wished it would have been real because it would have allowed him to respond even
    0:36:02 more forcefully.
    0:36:06 Tim, what was Nixon’s stance on using state force against Americans?
    0:36:10 Did he ever seriously consider turning the military against fellow citizens?
    0:36:11 Yes.
    0:36:12 He did.
    0:36:19 In fact, on the tapes, he ordered the use of violence against the Native Americans at
    0:36:20 Wundeni.
    0:36:27 Again, it was yet another Nixon order that was not followed through by his people.
    0:36:35 At one point, the Secretary of Defense was ordered to attack these planes that were full
    0:36:43 of hostages in Jordan to stand off with the People’s Liberation Front for Palestine, PFLP,
    0:36:47 and the Secretary of Defense just didn’t do it.
    0:36:56 I want to mention that Nixon’s frustration with the guardrails around him were one of
    0:37:03 the reasons why he created an investigative unit, the plumbers in the White House.
    0:37:13 He also okayed the payment to the Teamsters to go out and break the bones of American
    0:37:14 anti-war demonstrators.
    0:37:17 They didn’t use the US military.
    0:37:21 They found another way of using violence.
    0:37:27 Nixon certainly not only conceived of the use of violence as appropriate, but in some
    0:37:35 cases used it smaller scale, but it showed his capacity to do that.
    0:37:42 One thing about Nixon that isn’t true about Trump, Nixon had shame.
    0:37:45 Nixon wanted to be remembered as a great president.
    0:37:50 Nixon did not want to be remembered as someone who had violated presidential norms.
    0:37:51 He cared about them.
    0:37:52 He just wanted to do it secretly.
    0:37:54 It had to be done covertly.
    0:38:00 With Donald Trump, we have someone who has no shame and doesn’t care about presidential
    0:38:01 norms.
    0:38:05 First of all, he doesn’t know the history of the office, despite the fact having occupied
    0:38:06 it.
    0:38:11 He doesn’t care, which means that’s a major problem because there are no self restraints.
    0:38:18 Nixon for all of his egregious behavior, his criminal acts, his abuse of power still had
    0:38:23 a sense that there were red lines, at least that he didn’t wish to cross overtly.
    0:38:26 Donald Trump knows such red lines.
    0:38:29 Lindsay, one of our greatest national myths is the story of George Washington and his
    0:38:34 cherry tree and suppose it inability to lie, which of course is a myth, but were American
    0:38:39 politicians generally more truthful during his era and around that time, or is it an
    0:38:41 increasing level of dishonesty?
    0:38:42 No.
    0:38:47 I mean, they got up to all sorts of no good and they would print just outrageous lies
    0:38:48 in the newspaper.
    0:38:54 In fact, what I think is different about our news media ecosystem today is at the time,
    0:38:56 they had very intensely partisan newspapers.
    0:38:58 There were the Democratic Republican papers and the Federalist papers.
    0:39:01 The difference is that people understood that.
    0:39:04 They understood that they were reading a partisan production.
    0:39:08 They didn’t have this idea that people on their television or people that are printing
    0:39:14 things online were acting with the same sort of incentives as a Walter Cronkite.
    0:39:19 So it’s actually like a media literacy problem that I think that we have today that compares
    0:39:25 to the 1790s because they were happy to just print garbage in the newspapers, but I want
    0:39:30 to pick up on that shame piece that Tim mentioned because I think that that is actually a really
    0:39:31 important shift.
    0:39:34 It’s not just that the president has to have shame.
    0:39:40 It’s that our society has to have sort of an embrace of shame and a certain standard
    0:39:45 of decorum, norms and precedents that we all buy into because otherwise elections don’t
    0:39:51 work as an accountability mechanism if we are not willing to enforce those things.
    0:39:57 And so certainly the norms and expectations about social behavior were different in the
    0:40:03 1790s, but there was still an agreed upon set of social behavior and that has evolved
    0:40:04 over time.
    0:40:07 What’s different now is we seem to have lost the ability to enforce it.
    0:40:08 Can I add?
    0:40:09 Yeah.
    0:40:13 I’m going to ask you a specific question is actually, authoritarians create an alternative
    0:40:14 reality.
    0:40:15 They’re followers.
    0:40:19 In Trump’s case, it’s part of a strategy called Gish Gallup or Steve Bannon calls it
    0:40:20 flood the zone with shit.
    0:40:25 Trump also has an Elon Musk helping spread propaganda widely and lies on X. The social
    0:40:29 media platform is an abandoned content moderation, so they’re just willing enablers and not
    0:40:33 so active as Musk, but it’s easier never to spend conspiracy theories.
    0:40:35 Nixon was an infamous liar.
    0:40:41 Give us some historical context for this seemingly unending stream of untruths.
    0:40:48 The interesting thing about the two areas of lying is that Nixon’s lying was tethered
    0:40:51 to some kind of reality.
    0:40:58 Nixon did not attempt to create a completely alternative reality.
    0:41:06 Trump is inventing complete history, Andrea, I mean, for example, give a famous one, not
    0:41:12 as important as some of the other examples, but when he talked about inflation, saying
    0:41:17 that inflation under Biden was the worst inflation we had ever had.
    0:41:22 That is of course utter nonsense since when we had the inflation, the huge, much worse
    0:41:27 inflation of the ’70s, when he talked about Afghanistan, the pullout of Afghanistan, which
    0:41:33 I think was debacle for the Biden administration, but he described it as the most embarrassing
    0:41:37 event for America in its history.
    0:41:38 That’s utter nonsense.
    0:41:43 Both Lindsay and I and you too, Kara, could come up with many more examples of much more
    0:41:45 embarrassing moments.
    0:41:51 This is something that Nixon had too much self-respect as a debater and as a policy intellectual
    0:41:54 to ever do.
    0:42:03 What he would do is Nixon’s deceit was calculated to protect himself, so the public didn’t
    0:42:05 know him.
    0:42:11 Trump’s deceit is part of how the public knows him, and as Lindsay said, we are in an era
    0:42:18 now where the public doesn’t mind embracing someone, I’m talking about half the public,
    0:42:22 but enough, embracing someone they know is lying.
    0:42:28 The one thing I just wanted to add quickly was the shame issue isn’t just important in
    0:42:31 elections, it’s important in impeachments.
    0:42:38 The assumption was that members, first of all, there wouldn’t be political parties, Lindsay
    0:42:42 knows this way better than I do, but the founders didn’t or framers didn’t expect that.
    0:42:49 More importantly, they thought that each member of Congress would feel shame if they didn’t
    0:42:56 defend the Constitution, and we live in an era now where the shame is if you don’t defend
    0:42:59 the president of your party.
    0:43:07 That vitiates, neutralizes completely the sanction of impeachment or removal.
    0:43:20 We’ll be back in a minute.
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    0:46:18 All right.
    0:46:22 So every episode we have a question from an outside expert.
    0:46:24 Let’s hear the one for you guys.
    0:46:25 Hi.
    0:46:26 It’s Bill Adair.
    0:46:30 I’m the author of Beyond the Big Lie, a new book about lying in politics.
    0:46:35 I’m also a professor of journalism at Duke University.
    0:46:41 Given each of your backgrounds, I’m curious if George Washington and Richard Nixon were
    0:46:43 to meet for a beer today.
    0:46:48 What would each of them say about the state of lying in politics?
    0:46:49 Go ahead.
    0:46:51 First you, Lindsay, and then Tim.
    0:46:57 I think George Washington specifically would be horrified by it because while his supporters
    0:47:02 often engaged in lies on his behalf, he really actually tried to stay above that partisan
    0:47:03 fray.
    0:47:07 And so he would feel that it was a significant decline in our political culture.
    0:47:13 I think Richard Nixon would consider Donald Trump an unintelligent man, but a very clever
    0:47:18 man and would be envious of the media ecosystem in which Trump lives.
    0:47:24 Richard Nixon felt that it was way too difficult for him to spin his reality.
    0:47:27 And he felt that the media, that there was no Fox News.
    0:47:32 And he desperately wanted, when in fact some of his followers ultimately created the alternative
    0:47:38 media environment in which Donald Trump has been so successful.
    0:47:41 Authoritarianists also try to encourage a cult of personality around them.
    0:47:45 And Trump inspires the most, almost religious devotion among his devotees.
    0:47:47 What does he do to create that reaction?
    0:47:51 Are there other American presidents who are able to provoke such rabid loyalty among
    0:47:52 their followers?
    0:47:55 Well, there certainly have been presidents who have been enormously popular.
    0:48:00 You know, FDR was enormously popular, Reagan was enormously popular.
    0:48:04 And Washington to a certain extent, I wouldn’t necessarily call it a cult, but he was seen
    0:48:08 as the father of the nation and sort of put on this pedestal that was separate.
    0:48:14 What I think Trump does is that he has convinced a lot of people that whatever they’re seeing
    0:48:15 isn’t happening.
    0:48:17 What he says is what is happening.
    0:48:22 And so, and it starts to become a fulfilling prophecy because if they reject the things
    0:48:26 that they previously believed, then that is a very uncomfortable feeling.
    0:48:31 And so it’s almost like a sunk cost fallacy where you can’t acknowledge you were wrong
    0:48:35 and you have to continue to lean all in to this process.
    0:48:39 So Nixon was also an insecure man, he wasn’t loved by the public, but he retained support
    0:48:44 about one in four Americans, even after all the Watergate revelations came out.
    0:48:47 And he was very uncharismatic.
    0:48:49 But how did he hold onto so many supporters?
    0:48:53 And what does that tell us about Trump’s grip on his supporters’ psyches?
    0:48:57 Well, Nixon would love to have Trump’s grip on his supporters.
    0:49:02 Two quick things, one, Nixon didn’t have coattails.
    0:49:08 There were very few members of the Republican Party who owed their position to him.
    0:49:14 And so he did not have followers in the Washington elite to the extent that Trump does.
    0:49:19 Let’s keep in mind, the Washington elite is partly created by Trump.
    0:49:25 The second thing is that Americans, while there were many that revered Nixon, he was
    0:49:29 not beloved even by his own supporters.
    0:49:31 They respected him.
    0:49:36 And what happened was that respect depended on his ability to govern well, too.
    0:49:39 They didn’t love him as a man.
    0:49:48 And so once he began to lie to Americans, he undermined some of his own appeal to his
    0:49:49 base.
    0:49:51 So his base shrank.
    0:49:57 Trump’s base never shrank to the extent that Nixon’s did after Watergate.
    0:50:03 One of the reasons why we had such a corrective moment is that not only did the Washington
    0:50:12 elite reject Nixon, including of course Republicans, but the American people sought a better government.
    0:50:19 And both Gerald Ford and Jimmy Carter had public support for the new guardrails that
    0:50:21 Congress created because of Nixon.
    0:50:28 So there wasn’t that emotional attachment to Nixon that Trump has engendered.
    0:50:33 And for that reason, the country, I would think, did not have the corrective moment,
    0:50:37 with the exception of one law regarding electoral counting, did not have the corrective moment
    0:50:46 after the first Trump term that we saw in the ’70s after both Watergate and Vietnam led
    0:50:49 to this effort to try to restrain the imperial presidency.
    0:50:53 And so right now, and there was also forgiveness after Andrew Johnson lost his reelection bid
    0:50:57 to Ulysses S. Grant, he pardoned the Confederate leaders and generals who were meant to stand
    0:50:59 trial for treason.
    0:51:03 After Nixon resigned, President Gerald Ford pardoned him, much to his detriment.
    0:51:06 Trump is going to essentially pardon himself when he fires Jack Smith.
    0:51:08 He’s pledged to go after political opponents.
    0:51:11 A lot of people think he’s bluffing, but we’ll have to wait and see.
    0:51:14 I don’t think he’s bluffing.
    0:51:19 Is there any other example of this of a president using his Paris office to go after rivals?
    0:51:25 Nixon obviously tried it, and relative failure in that regard, but not a total failure.
    0:51:28 Is there anyone else you can think of who’s done this?
    0:51:30 To a very small extent.
    0:51:34 I mean, Jefferson, when he was president, he hated Aaron Burr because Aaron Burr had
    0:51:38 not stepped aside once the election was tied in 1800.
    0:51:42 He really didn’t like some of the Federalist Supreme Court justices, so he sort of encouraged
    0:51:47 an impeachment and then sort of encouraged people to pursue charges against Burr for
    0:51:50 his conspiracy out west.
    0:51:52 Also Hamilton, famous.
    0:51:53 Exactly.
    0:52:00 But it wasn’t an explicit, you need to put this person in jail because they’re my enemy.
    0:52:04 They had done something that was appeared to be wrong, and he encouraged the prosecution
    0:52:06 of it, but notably he failed.
    0:52:12 He failed in both cases because the institutions and the other people around him felt that
    0:52:16 the rule of law was more important than this vendetta.
    0:52:17 Two questions for both of you.
    0:52:22 In his farewell address, Washington said that, “Sooner or later, the chief of some
    0:52:26 prevailing faction would manipulate the public’s emotions and their partisan lawyers.”
    0:52:31 These, to quote, “the purposes of his own elevation on the ruins of public liberty.”
    0:52:34 It’s almost as if Trump or someone like him was inevitable, and Washington knew that the
    0:52:39 political system he helped create had vulnerabilities that could be exploited by a leader, really
    0:52:43 a grifter who puts himself above the interests of the country.
    0:52:48 Is it capable of handling the stresses it now faces under Trump?
    0:52:50 First Lindsay, and then Tim.
    0:52:51 I don’t think we know.
    0:52:56 I mean, it was the first time, but I think the best way to think of guardrails is like
    0:52:57 a car.
    0:53:01 If you get into an accident and your airbags deploy, then they’ve saved you.
    0:53:05 You might be bruised and battered, but then the car is totaled, and you have to have it
    0:53:08 fixed, and it’s not going to be able to save you in the same way.
    0:53:13 I think our guardrails have been bruised and battered, or the airbags have been deployed,
    0:53:16 and so I’m not sure.
    0:53:20 What’s notable after the Nixon moment is that Congress did take action and did implement
    0:53:21 reforms.
    0:53:26 We have seen very few of them in the last four years, and I fear that we are going
    0:53:27 to come to regret that.
    0:53:28 Tim?
    0:53:31 I agree with Lindsay.
    0:53:37 One of the great concerns I have is what a generation of young Americans is learning
    0:53:46 about power and responsibility, and the fact that Trump could come back after January 6,
    0:53:55 and his other abuses in the first term is signaling to many that that is not only a useful and
    0:54:01 effective approach to leadership, but it’s a good approach to leadership because it’s
    0:54:05 now been embraced by enough of the country.
    0:54:08 To my mind, those are the norms that I worry most about.
    0:54:17 John F. Kennedy created, with all his flaws, an ideal of how one should run for office
    0:54:19 and how one should act in office.
    0:54:22 Again, they didn’t know fully what he was up to in office.
    0:54:26 I believe that it is possible that Donald Trump will become that ideal for an entire
    0:54:34 generation of young Americans who are striving for power, and that to me is what could undermine
    0:54:39 our institutions because it takes more than just eight years to destroy institutions,
    0:54:41 but a generation can destroy institutions.
    0:54:42 Absolutely.
    0:54:45 That brings me to my last question.
    0:54:49 Ever since Trump won in 2016, people have debated whether he’s a symptom or a cause of
    0:54:54 the fear, division, anger, racism, and xenophobia, we see almost every day during his campaign.
    0:54:59 It was a dark vision of America, which it’s been in our veins forever.
    0:55:00 Let’s be clear.
    0:55:02 He’s not a new thing.
    0:55:05 Where do you come down, Lindsay, and then Tim, finish up?
    0:55:08 I think that he let it come out of the shadows.
    0:55:16 He made it permissible to speak a lot of these things out loud, and that has therefore accelerated
    0:55:22 the growth and the expanse of this wildfire of hate.
    0:55:23 Tim?
    0:55:28 I think of Lady Bracknell in the importance of being earnest.
    0:55:30 In this case, I’m paraphrasing.
    0:55:31 I’ll ask you a while.
    0:55:32 I’ll ask you a while.
    0:55:33 That’s much persecuted.
    0:55:41 Yes, to elect Trump once is misfortune.
    0:55:44 To reelect Trump is carelessness.
    0:55:48 I think that this is on the American people, and I believe the world is looking at this
    0:55:49 now.
    0:55:53 The times that they said, “Oh, that’s Trump being Trump,” I think a lot of the world
    0:55:56 and a lot of many Americans are saying, “No, that’s America being America.”
    0:56:03 I think we need to come to terms with things in the next little while that we haven’t come
    0:56:04 to terms with.
    0:56:09 One, the effect of inequality on this country, which has produced a populism that is both
    0:56:10 on the right and the left.
    0:56:19 Two, the real deep effects of the pandemic, and three, the very fact of the consequences
    0:56:27 of technological change on feeling of hope and despair in rural areas, plus those deep
    0:56:36 dark impulses of racism, xenophobia, and bigotry that have been in our country from
    0:56:42 the beginning, and we’ve been wrestling with them from the beginning, and they have occasionally
    0:56:44 won out against our better angels.
    0:56:48 This is not a good moment for our better angels, but just like those dark impulses have all
    0:56:52 always existed, so too have our better angels.
    0:56:54 That is the struggle in front of us right now.
    0:56:56 I will end on one last thing, and I hope for things.
    0:56:59 I think I’m just going to do that today because this is my podcast.
    0:57:06 Each of you, what should opponents of all of this do in a sentence or two, each of you,
    0:57:07 Tim and then Lindsay?
    0:57:15 One of the most effective ways that authoritarians take power is by scaring people.
    0:57:18 And even the worst of them don’t necessarily like to outlaw action.
    0:57:23 What they want to do is make you so afraid of consequences that you outlaw it yourself.
    0:57:29 We saw a little of that already with, for example, a little small example, the Gerald
    0:57:34 Ford Foundation not giving Liz Cheney an award for fear that they might lose in a Trump
    0:57:35 administration.
    0:57:41 They’re 501(c)(3) exemption, and Jeff Bezos at Washington Post, it’s self-restraint.
    0:57:48 I would argue that remember your civil rights, exercise your civil rights, be who you want
    0:57:52 it to be, who you want to be now, who you want it to be before Trump.
    0:57:57 Don’t let Trump stand in your way of enjoying the full benefits of the Constitution.
    0:58:02 If enough people do that and don’t lose hope, it gets harder for the authoritarian.
    0:58:05 And I believe Trump is lazy.
    0:58:11 I believe that Trump actually, at times, would rather not take risks.
    0:58:20 So if people make it hard for him to abuse power, it would lessen the effect of his vengeance.
    0:58:21 The word you’re looking for is no.
    0:58:22 Yes.
    0:58:23 No.
    0:58:24 You may not.
    0:58:26 Lindsay, last word.
    0:58:29 Well, I agree with so much of what Tim said.
    0:58:34 I think also there are still ways that even if Trump can’t always be held accountable,
    0:58:39 the people around him can be, whether it is through the rule of law, through our court
    0:58:42 system, through public accountability.
    0:58:47 And we have to continue to try and use every mechanism of accountability possible, which
    0:58:53 is I think the legal side or the public side of the don’t obey in advance.
    0:58:59 But the best and most long-lasting way to combat authoritarianism is through accountability.
    0:59:03 And so we just have to keep trying because the most pernicious thing will be if we do
    0:59:04 give up hope.
    0:59:08 So we cannot give up and we have to keep trying to hold people to account.
    0:59:09 That’s perfect.
    0:59:13 And the word you’re looking for is, oh, no, you didn’t, something like that.
    0:59:14 Anyway, thank you so much.
    0:59:17 You’re exactly the people I want to talk to on a day like today.
    0:59:22 We have had a long history and we’ve gone through some difficult times over the many,
    0:59:24 many centuries we’ve been around.
    0:59:27 So let’s have some hope.
    0:59:28 Thank you so much.
    0:59:29 Thank you, Kara.
    0:59:35 Thank you.
    0:59:40 One with Kara Swisher is produced by Christian Castro-Rossell, Kateri Yocum, Jolie Meyers,
    0:59:42 Megan Burney, and Kaelin Lynch.
    0:59:46 Nishat Kirwa is Vox Media’s executive producer of audio.
    0:59:49 Special thanks to Kate Gallagher and Claire Hyman.
    0:59:55 Our engineers are Rick Kwan and Fernando Aruda, and our theme music is by Trackademics.
    0:59:59 If you’re already following the show, I’ll tell you, I just saw the movie “Wicked” and
    1:00:01 it comes out on November 22.
    1:00:07 I urge you all to see it and it’s time to try defying gravity, and don’t let them bring
    1:00:08 you down.
    1:00:13 If not, yep, we’re the Wicked Witch, but we look fantastic in green.
    1:00:17 Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast
    1:00:18 Network, and us.
    1:00:20 We’ll be back on Monday with more.
    1:00:21 (upbeat music)

    This is an episode we think you’d enjoy of On with Kara Swisher

    President-elect Donald J. Trump has won a resounding victory against Vice President Kamala Harris, and now, the man who promised political retribution and said he may use the military to go after “the enemy within” is headed back to the White House. Only this time, there will be no guardrails — only enablers. In order to understand the threat Trump poses to our democracy, Kara talks to two historians who know a lot about the birth of American democracy and the last time we came close to losing it: Dr. Lindsay Chervinsky and Dr. Timothy Naftali. 

    Chervinsky is a presidential historian and the executive director of the George Washington Presidential Library. Her newest book is Making the Presidency, John Adams and the Precedents that Forged the Republic. Naftali is a senior research scholar in the Faculty of International and Public Affairs at Columbia University and the former director of the federal Richard Nixon Presidential Library and Museum.

    Questions? Comments? Email us at on@voxmedia.com or find us on Instagram/TikTok as @onwithkaraswisher

    You can listen to more of this podcast by searching for On with Kara Swisher in your podcast app. 

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  • Uber’s Potential Acquisition of Expedia, Why Is Europe Always Lagging Behind the US? and How to Outsource to Grow Your Company

    AI transcript
    0:00:05 Support for this episode comes from The Current. The Current podcast is back with an exciting
    0:00:09 new season featuring marketing executives from the world’s most influential brands.
    0:00:13 Tune in to hear what’s driving conversation in the fast-moving world of digital advertising.
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    0:00:26 a national political advertiser like the National Republican Senatorial Committee and
    0:00:33 a major CPG brand like Hershey can learn from each other. Listen in and subscribe to The
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    0:00:43 Support for PropG comes from Anthropic. It’s not always easy to harness the power of potential
    0:00:47 of AI. For all the talk about its revolutionary potential, a lot of AI systems feel as if
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    0:02:01 Welcome to the PropG Pods Office Hours. This is the part of the show where we answer questions
    0:02:05 about business, big tech, entrepreneurship, and whatever else is on your mind. If you
    0:02:10 would like to submit a question, please email a voice recording to officehours@profitmedia.com.
    0:02:15 Again, that’s officehours@profitmedia.com. So with that, first question.
    0:02:21 Hey, PropG. This is Ryan. I’m coming to you from Denver, Colorado. I have a question
    0:02:27 just regarding the recent rumors that surfaced about Uber’s potential acquisition of Expedia.
    0:02:32 We’d love to get your thoughts on just the financial feasibility of this deal. Thanks
    0:02:36 for all you do, PropG. I’m a weekly listener of all the pods and love the content you
    0:02:38 put out. Keep doing what you’re doing.
    0:02:42 Ryan, from Denver, Colorado. Thanks for the question and the kind words. By the way,
    0:02:46 I think just Colorado should run America. I think they do a great job there. Hey, it’s
    0:02:51 spectacular. They’re beautiful. I just bought a home in Colorado. Anyways, where am I going
    0:02:52 with this?
    0:02:56 All right. So the Financial Times reported that Uber recently explored the possibility
    0:03:01 of buying Expedia, the $20 billion travel booking giant. By the way, they have a fantastic
    0:03:06 new CEO. They do a great job. I actually use Expedia. I think they are incorporating
    0:03:09 AI in very subtle ways to kind of remember who I am when I show up at the site and they
    0:03:13 know my economic weight class, kind of tells I stay up. They do a very good job and I like
    0:03:16 kind of the UI, if you will.
    0:03:19 Big picture, this would be Uber’s largest acquisition to date and would further diversify
    0:03:24 the ride-hailing company. In the past few years, Uber has expanded into other businesses,
    0:03:29 including train and flight bookings, food delivery, logistics, and advertising. Some
    0:03:34 of Uber’s deals since the one public in 2019 include its expansion into food and beverage
    0:03:38 delivery via the acquisition of Postmates for, I think it was about $2.7 billion and Drizly
    0:03:44 for $1.1 billion. I bet they overpaid for that thing. Drizly, $1.1 billion, really.
    0:03:47 It also went into the freight and logistics business through a two and a quarter billion
    0:03:53 purchase of Transplace. Uber also purchased Karim, a Middle Eastern ride-hailing business
    0:04:00 for $3.1 billion. Wow, that’s serious shit. So this is essentially, companies can either
    0:04:06 expand horizontally or vertically and that is they can go after similar businesses or
    0:04:12 they can try and find, basically offer more businesses to the same consumer.
    0:04:18 I kind of like the idea of one app that uses AI and I say, “Okay, so tonight I’m going
    0:04:23 home to London. I like the idea of hitting the app and then using AI.” It says, “Okay,
    0:04:28 when do you want to travel? How many people?” And it kind of does the whole thing. It says,
    0:04:33 “All right, these are the flights we think you’d want to go. These are the hotels we
    0:04:38 think you’d want to stay at. By the way, we’re going to ask you a bunch of questions once
    0:04:42 you figure it out and say, “I want this. Use voice-enabled AI. We’re going to set up the
    0:04:45 Ubers. We’re going to set up the right seat for you on the plane because we know your
    0:04:51 preference.” There’s going to be a travel app that just takes you off the table. And
    0:04:57 I also think that Uber has such an incredible, Uber’s primary asset is it has user interface
    0:05:03 and custody of the consumer, incredible trust with, I don’t know, I don’t know what they
    0:05:08 have, 100, 200 million people. Also, I would absolutely be going shopping if I was Uber’s
    0:05:12 head of corporate development right now. The stock is up 56%, meaning they’re kind of playing
    0:05:16 with the house’s money. And Expedia’s market cap, just under $20 billion, they probably
    0:05:22 have to pay $25 or $30. Their stock is up 24% a year to date, but Uber’s market cap is
    0:05:28 173 billion. So you’re talking about what is potentially probably about a 15% dilution.
    0:05:33 For them to have those assets and those additional consumers, I do think there’d be synergy there.
    0:05:40 More Uber towards Expedia than Expedia towards Uber. Also, Dara knows the company really well.
    0:05:44 What are the successful acquisitions? Well, first off, there are a few of them. Only one
    0:05:49 in three acquisitions works or pays off. Why? Because it’s kind of the lazy CEO’s way to
    0:05:55 greater compensation. What do I mean by that? All behavior in a company can be reverse engineered
    0:06:01 to the compensation of the senior executives. And the way compensation works for CEOs the
    0:06:08 following, the compensation committee looks at the compensation of CEOs in that industry
    0:06:14 of companies that size. So there is an incentive to get bigger. Also, there’s an incentive
    0:06:19 to diversify into other fields such that it smooths out your earnings. And everyone’s
    0:06:24 looking for the transformational acquisition that’s going to do for their company what
    0:06:30 Instagram did for Metta or what YouTube did for Alphabet. A great acquisition can be transformational,
    0:06:34 but you almost always overpay because the assets you want are expensive and they want
    0:06:39 a premium and they can only sell once. And they almost always, generally speaking, overpay
    0:06:45 for the acquisition. So most acquisitions don’t work out well. And the most valuable company
    0:06:48 in the world, Apple, effectively does almost no acquisitions because they see their cultures
    0:06:53 being very important. They don’t want overpay. And they’d rather build stuff. Anyways, in
    0:06:58 this instance, I think it’s a really interesting idea. I like it. The dog likes it. Question
    0:06:59 number two.
    0:07:05 Hey, Scott, this is Barton in San Diego. I’m a longtime listener and I always appreciate
    0:07:11 hearing your good faith, a well thought out point of view, even when I disagree. Something
    0:07:17 you bring up a lot is how Europe has stagnated economically while the US enjoys growth over
    0:07:23 recent decades. For me, it seems like the growth is mostly on paper and mostly for the rich
    0:07:30 while the average European enjoys, in practice, a much higher and more secure quality of life.
    0:07:38 What am I missing here? And what do you think the US can do to ensure that security while
    0:07:39 maintaining growth?
    0:07:43 Barton, that is a really thoughtful question. And also, I just want to acknowledge there
    0:07:48 is some truth to what you’re saying because most of our stats look at economic growth
    0:07:53 and aggregate. Look at household income and aggregate. First off, let’s acknowledge the
    0:07:59 US has been driven by the prosperity of the top 1%. And I think one of the unhealthiest
    0:08:04 metrics we have out there is the Dow Jones or the NASDAQ because it gives you the impression
    0:08:08 that the economy is doing really well. Well, guess what? 1% of the American populace owns
    0:08:13 90% of the economy. So essentially, the Dow Jones industrial average in the NASDAQ are
    0:08:20 metrics on how well the 1% is doing. And guess what? 71 new highs this year. So, okay, spoiler
    0:08:26 alert, the top 1% are absolutely killing it. But also, the American public lets it happen
    0:08:32 because one of our superpowers is our optimism. And people believe there’s a shot they’re
    0:08:37 going to be in the 1%. So how would you categorize or how would you summarize the American economy?
    0:08:43 I still believe that America is the place that if you’re talented and want to go flat
    0:08:47 out, you just want to run so fucking hard. You want to leave it on the field. You’re
    0:08:51 not working to live. You’re living to work. You want to be economically secure. You really
    0:08:57 want to go after influence, power, and economic security. America is absolutely the best place.
    0:09:03 Things just go slower in Europe. Average incomes in Europe lack 27% behind the US with wages
    0:09:09 that are 37% lower. If you took out London out of the UK, essentially the household income
    0:09:15 is lower than it is in our poor state in the US, Mississippi. Between 2010 and 2023, the
    0:09:23 US saw its GDP grow by 34% while the EU managed only 21%. So, a lot of people say, “What’s
    0:09:29 different between Europe and the US?” I mean, it’s a few things. On a very base DNA level,
    0:09:35 the US is everyone who decided to leave, and Europe is everyone that decided to stay. Think
    0:09:41 about that. The people who left, and by the way, they’re selfish. My mom left two siblings
    0:09:46 that were still in an orphanage. Both her parents were gone. That was a selfish move,
    0:09:52 but she came to America and off a secretary’s salary. My mom lived and died a secretary,
    0:09:57 but we as an upper, lower, middle-class family, I think we had better lives than the majority
    0:10:04 of our family that stayed in the UK. Now, why is that? Risk-taking, infrastructure, natural
    0:10:09 resources, incredible education institutions, geographically blessed with friendly Canada
    0:10:15 to the north and harmless Mexico to the south, more oil reserve with the largest energy producer
    0:10:20 in the world, largest coal. I mean, we’re just so blessed. We’re one of the largest
    0:10:24 agricultural producers in the world. We produce the brightest minds. Not only that, the brightest
    0:10:28 minds in the world all have one thing in common. They want to come to the US. So, we’re just
    0:10:34 blessed with a ton of attributes. And back to risk aggressiveness, one of the stats I love
    0:10:38 is that there are dramatically more per capita entrepreneurs in the US coming out of college,
    0:10:43 but even more importantly, we have the capital to fund their dreams. For every startup in Europe,
    0:10:48 there’s 1 million in venture capital raised. For every startup in the US,
    0:10:53 there’s 5 million in venture capital. So, we have five times the risk capital.
    0:10:57 Anyways, long-winded way of saying, I’m not entirely sure, but I think it’s about risk
    0:11:02 aggressiveness. It’s about capital and some of the natural blessings we have. And if Europe
    0:11:06 wanted to inspire growth, they would need to have government subsidies to tech companies and also
    0:11:14 a bigger investment in a world-class engineering educational institutions. Thanks for the question.
    0:11:18 We have one quick break before our final question. Stay with us.
    0:11:26 Support for PropG comes from Vanta. Whether you’re starting or scaling your company’s
    0:11:31 security program, demonstrating top-notch security practices and establishing trust
    0:11:38 is more important than ever. Vanta automates compliance for SOC2, ISO 27001, and more, saving
    0:11:43 your time and money while helping you build customer trust. Plus, you can streamline security
    0:11:46 reviews by automating questionnaires and demonstrating your security posture with a
    0:11:52 customer-facing trust center all powered by Vanta AI. Over 8,000 global companies, including
    0:11:57 Atlassian, Flow Health, and Quora, use Vanta to manage risk and improve security in real time.
    0:12:07 You can get $1,000 off Vanta when you go to vanta.com/propg. That’s vanta.com/profg for $1,000 off.
    0:12:17 Support for PropG comes from Masterclass. This holiday season, sure, you could give your loved
    0:12:21 ones some trendy junk that may be the love for a few weeks before they inevitably get bored,
    0:12:28 or you could give a gift with the potential to last a lifetime with Masterclass. Masterclass is
    0:12:33 the streaming platform that brings invaluable insights from the world’s greatest minds straight
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    0:12:53 Personally, I’d be interested to check out, and I did, Bob Iger’s view on managing the
    0:12:58 creative process. I think he’s an interesting manager and wanted to learn more about managing
    0:13:03 creatives as we do here at PropG Media. Masterclass always has great offers during the holidays,
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    0:13:16 That’s up to 50% off at Masterclass.com/PropG. Masterclass.com/PropG.
    0:13:28 Support for PropG comes from The Washington Post. Wampo, daddy loves the post! He does.
    0:13:32 There’s a lot of information in the world, but there’s a lot of misinformation as well. That’s
    0:13:37 why it’s so important to have a great source that can help you separate what’s fact and what’s
    0:13:43 fiction. Thankfully, there’s a Washington Post right now. You can go to theWashingtonPost.com/PropG
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    0:13:53 considered coverage on a huge number of topics. The paper can be a great place to find thoughtful
    0:13:58 stories about Capitol Hill, the economy, climate change, and so much more. I love The Washington
    0:14:03 Post. I find myself reading it more and more. I’d say I have any media company that I spend more
    0:14:07 time on relative to what I was spending on it five years ago. It’s The Washington Post. And
    0:14:12 increasingly, I spend more time reading their views on business. With the election rapidly
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    0:14:34 for just 50 cents per week for your first year.
    0:14:42 Welcome back, question number three.
    0:14:50 Hi, Scott. I’m in my mid-30s married and have a two-year-old. I manage three properties while
    0:14:56 working two jobs. Growing up, my parents always did everything themselves to save money. So I’ve
    0:15:03 had a hard time outsourcing tasks to contractors. Even though I know hiring help would make things
    0:15:10 easier, I tend to focus on money I save doing it myself, which ends up taking more time and adding
    0:15:16 stress. It’s becoming harder to manage, especially with the two jobs and caring for my toddler.
    0:15:22 I want to scale up and start investing in commercial properties, but the amount of work I
    0:15:28 already have is holding me back. Do you have any advice on how I can change my mindset
    0:15:32 to be more comfortable with the outsourcing so I can grow my business?
    0:15:40 So Anonymous, first off, you’re a young man who’s raising a kid and you own real estate.
    0:15:46 This puts you in the top 10% of men in terms of your success. You’re already building
    0:15:52 a future for yourself, for your family. So the first is, yeah, you’re stressed out,
    0:15:57 but just be clear, don’t be hard on yourself. You’re doing really well. And if you are feeling
    0:16:01 stressed and occasionally sort of overwhelmed, that’s kind of where you should be. The arc of
    0:16:09 happiness where you have the y-axis is happiness and the x-axis is age. It looks like a smile and
    0:16:17 that a zero to 25 is beer, prom, you know, making out. It’s a lot of fun in Star Wars. 25 to 45 is
    0:16:22 what I call the shit gets real part of your life. It’s hard, economic stress. Kids are stressful.
    0:16:27 I mean, I know it’s supposed to be all like fun and hallmark moments and things to make TikTok.
    0:16:32 It’s not. Generally speaking, when people have kids, they’re less happy. They’re happier over the
    0:16:38 long term, but during the child rearing years, it is stressful. So look, in terms of how you
    0:16:43 develop a mindset around growth, what I have found, I mean, it’s a double-edged sword because
    0:16:50 you kind of want to be all over everything. I think that’s the attribute of a founder and an owner,
    0:16:56 but at the same time, if you’re fortunate enough to find someone good, a good property manager,
    0:17:00 someone who comes to work with you as an intern and they’re good, this is what you got to do.
    0:17:06 You got to be generous with that person and make it near impossible for them to leave. Why?
    0:17:13 Because greatness, right? And a more boring word for that is scale. Greatness and scale is in the
    0:17:21 agency of others. And my kind of core competence is storytelling, but my superpower is the ability
    0:17:26 to attract and retain really talented people. And by the way, that’s not just paying everyone more.
    0:17:30 If someone isn’t working out, you got to get rid of them. You’re a small company. You don’t have
    0:17:35 time to find the right role for them. I am pretty harsh that way. To get to the first 10 or 20 super
    0:17:40 people, it takes me 30 to 50. And it’s not fun. It’s not aspirational. It’s not pleasant, but
    0:17:44 it’s hand down combat in the beginning. But when you find someone really good,
    0:17:48 you got to sit them down and you’re going to say, this is our plan. We’re going to buy commercial
    0:17:55 property here. We’re going to build this asset and I’m going to give you 1, 2, 3% of the profits,
    0:18:00 whatever it is. Give them ownership. You want them to act like owners. And the only way to make
    0:18:05 them act like owners is to make them owners. And that is say, I have my shit together. This is
    0:18:09 my plan. This is how we’re going to raise capital by commercial properties is the opportunity. And
    0:18:16 this is why you are going to participate in our success. You’ll, you should be able to recognize
    0:18:22 those people and to let go and to not be all over them. So give them some slack. But the key
    0:18:27 to any type of scale, the key to you not being totally stressed out. And by the way,
    0:18:32 you’re going to be stressed out. Owners have to be all over almost everyone, almost all of the time.
    0:18:40 Greatness is in the agency of others. Focus on finding the right others and keeping them.
    0:18:45 That’s all for this episode. If you’d like to submit a question, please email a voice
    0:18:50 recording to officehours@proppgmedia.com. Again, that’s officehours@proppgmedia.com.
    0:19:03 This episode was produced by Jennifer Sanchez and Caroline Shagren. And Drew Burroughs is our
    0:19:07 technical director. Thank you for listening to the ProfG Pod from the Vox Media Podcast Network.
    0:19:12 Please follow our ProfG Markets Pod wherever you get your pods for new episodes every Monday and
    0:19:18 Thursday. Hey, it’s Scott Galloway. And on our podcast Pivot, we are bringing you a special
    0:19:23 series about the basics of artificial intelligence. We’re answering all your questions. What should
    0:19:27 you use it for? What tools are right for you? And what privacy issues should you ultimately watch
    0:19:33 out for? And to help us out, we are joined by Kylie Robison, the senior AI reporter for The Verge,
    0:19:38 to give you a primer on how to integrate AI into your life. So tune in to AI basics,
    0:19:44 how and when to use AI, a special series from Pivot sponsored by AWS wherever you get your podcasts.
    0:19:52 What software do you use at work? The answer to that question is probably more complicated than
    0:19:58 you want it to be. The average US company deploys more than 100 apps. And ideas about the work we
    0:20:04 do can be radically changed by the tools we use to do it. So what is enterprise software anyway?
    0:20:10 What is productivity software? How will AI affect both? And how are these tools changing the way we
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    0:20:21 series, Decoder is surveying the IT landscape presented by AWS. Check it out wherever you get
    0:20:22 Get your podcasts.
    0:20:24 (upbeat music)

    Scott explains why Uber’s potential acquisition of Expedia would be a strategic move toward building an all-in-one travel platform. He then discusses why America is the best place to make money and Europe is the best place to spend it. He wraps up with advice to a listener looking to outsource work to grow his business. 

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  • Raging Moderates – The Final Stretch and What To Look for on Election Night

    AI transcript
    0:00:04 Support for this show comes from Constant Contact.
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    0:00:41 ConstantContact.ca.
    0:00:47 Hey, it’s Scott Galloway, and on our podcast Pivot,
    0:00:51 we are bringing you a special series about the basics of artificial intelligence.
    0:00:52 We’re answering all your questions.
    0:00:55 What should you use it for? What tools are right for you?
    0:00:58 And what privacy issues should you ultimately watch out for?
    0:01:01 And to help us out, we are joined by Kylie Robison,
    0:01:03 the senior AI reporter for The Verge,
    0:01:06 to give you a primer on how to integrate AI into your life.
    0:01:10 So, tune into AI basics, how and when to use AI.
    0:01:13 A special series from Pivot, sponsored by AWS,
    0:01:15 wherever you get your podcasts.
    0:01:19 What is AI actually for?
    0:01:21 Everybody is talking about AI.
    0:01:23 Wall Street is obsessed with AI.
    0:01:25 AI will save us. AI will kill us.
    0:01:28 It’s just AI, AI, AI, everywhere you turn.
    0:01:33 But what does any of that actually mean, like, in your life right now?
    0:01:35 That’s what we’re currently exploring on The Vergecast.
    0:01:40 We’re looking for places and products where AI might actually matter in your day-to-day life.
    0:01:43 And I don’t just mean for making your emails less mean,
    0:01:45 though I guess that’s good, too.
    0:01:49 Lots of big new ideas about AI this month on The Vergecast, wherever you get podcasts.
    0:01:55 Welcome to Raging Moderates, I’m Scott Galloway.
    0:01:56 And I’m Jessica Darlove.
    0:01:58 How are you, Jess?
    0:02:00 I’m really good. How are you?
    0:02:01 I don’t believe you. And to…
    0:02:05 No, it’s true. My algorithm doesn’t hate me anymore.
    0:02:08 I’m, like, coconut-pilled again. I’m having the best time.
    0:02:13 I don’t know if Elon just wants to spare me or what, but no, it’s genuine.
    0:02:19 So, I can’t tell if this election that I’m now older and wiser in this election
    0:02:23 really is a consequential and there’s no reason to be stressed,
    0:02:27 or I’m just older and stressed over anything.
    0:02:32 And I found the only thing that helps is I listen to 80s music
    0:02:35 that plays over, like, peanuts cartoons.
    0:02:35 Okay.
    0:02:39 That really calms me down, especially the cure
    0:02:41 and all the peanuts characters dancing.
    0:02:43 That brings me a moment of calm.
    0:02:45 Also, the traveling will vary strangely enough.
    0:02:47 Their music seems to calm me.
    0:02:49 Okay, in today’s episode of Raging Moderates,
    0:02:53 we’re discussing what the campaign trail looked like during the final week,
    0:02:55 what to watch out for on election night,
    0:02:59 and, of course, we’ll wrap up with our final predictions.
    0:03:02 The thing that has absolutely blown my mind
    0:03:04 is that poll that came out of Iowa.
    0:03:05 Yeah.
    0:03:06 And actually, I’m going to let you take this
    0:03:09 because you’re the pollster and you’re so much better at this than me,
    0:03:13 but explain for the listeners why that is significant and what it is.
    0:03:16 Well, I wouldn’t say that I’m better at it than you.
    0:03:19 And I’m interested in your thoughts
    0:03:21 because I feel like I spend too much time
    0:03:24 crosstab diving or whatever it’s called.
    0:03:28 But J. Ann Selzer, who is the pollster there in Iowa,
    0:03:33 is widely considered one of the top pollsters in the country,
    0:03:36 certainly the top one in Iowa and probably the top one in the country
    0:03:37 for most people.
    0:03:39 And I think that there is going to be,
    0:03:42 depending on the outcome Tuesday night,
    0:03:46 there is going to be another reckoning with the polling industry
    0:03:49 that seems to have been “herding” all of these polls.
    0:03:52 No one wants to be an outlier in any way.
    0:03:56 So they’re just telling us in like 50 different languages,
    0:03:57 this thing is really tight, this thing is tied.
    0:04:00 Maybe it’s one point advantageous way, one point the other way.
    0:04:05 And Ann Selzer comes out with her final Iowa poll
    0:04:08 that has Kamala Harris up three in Iowa.
    0:04:09 Iowa, yeah.
    0:04:10 In Iowa.
    0:04:15 So Donald Trump won Iowa in 2020 by eight points.
    0:04:18 So this is a significant swing.
    0:04:22 And I think he was up like 18 on Biden before Biden left the race,
    0:04:24 which is not that surprising,
    0:04:27 because a lot of people felt like Biden should have left the race.
    0:04:30 So maybe then you take it down to an actuality,
    0:04:32 he would be like up eight to 10,
    0:04:34 something that you would feel is more normal.
    0:04:39 But this is a complete earthquake in the polling conversation.
    0:04:41 A lot of people want to dismiss it,
    0:04:43 but most of the pollsters and commentators
    0:04:45 who know what they’re talking about
    0:04:49 are looking at this as a harbinger of a trend.
    0:04:52 So even if Donald Trump wins by five points,
    0:04:54 let’s say she’s eight points off on this,
    0:04:57 that’s still a really shitty result for Donald Trump
    0:04:58 and what he needs in all of this.
    0:05:01 And it would be indicative of the fact
    0:05:04 that Harris should be winning Wisconsin and Michigan
    0:05:06 and probably Pennsylvania.
    0:05:10 And the big underlying story in the poll was the gender gap,
    0:05:12 which we’ve been talking about a lot.
    0:05:14 The Harris up 20 with women,
    0:05:18 up 28 points with women who are affiliated with no party,
    0:05:20 who are “independence.”
    0:05:22 But the thing that was blowing everyone’s mind
    0:05:24 is the granny gap.
    0:05:28 So Harris is up two to one with seniors,
    0:05:29 with female seniors.
    0:05:33 And she did a ton of interviews over the weekend.
    0:05:35 She was on with Tim Miller on the Bull Work podcast.
    0:05:37 And I would really recommend everyone listen to it
    0:05:39 if you’re interested in getting to know her a little bit better
    0:05:43 and hearing a deeper dive into the methodology.
    0:05:47 But she was talking about how Iowa’s abortion ban
    0:05:48 came into effect.
    0:05:50 So it was litigated through the courts
    0:05:53 and it actually was implemented over the summer.
    0:05:55 So this is fresh in people’s minds.
    0:05:59 She said, these older women are not only looking at a world
    0:06:01 where their daughters and their granddaughters
    0:06:03 are less free than they were,
    0:06:05 which frankly pisses anyone off, right?
    0:06:07 No matter what the subject is,
    0:06:10 you know, abortion, a healthcare issue or otherwise.
    0:06:13 But what was really interesting is this line
    0:06:18 between what people think of as abortion,
    0:06:19 typically pro-life people
    0:06:21 and what people think of as healthcare.
    0:06:23 And now that we live in a world
    0:06:25 where you can have a miscarriage
    0:06:27 and be denied care for that,
    0:06:29 people are saying like,
    0:06:32 how dare you lump this in with abortion?
    0:06:34 And Iowa has this very restrictive ban
    0:06:37 that came into effect just a few months ago.
    0:06:40 And there are other factors that could be playing into this.
    0:06:42 Like tariffs have hurt farmers really hard.
    0:06:45 It started under Trump and frankly did continue under Biden,
    0:06:47 the soybean farmers in particular.
    0:06:50 And one kind of wild card in this
    0:06:53 that I was wondering if you thought had any impact
    0:06:55 is Tim Walls.
    0:06:57 ‘Cause you would think that Tim Walls would be someone
    0:07:01 that was very resonant with an Iowa voting base.
    0:07:06 And if they thought maybe Kamala was a San Francisco lefty,
    0:07:10 that Walls would have felt like a moderating factor
    0:07:11 in all of this.
    0:07:13 But net net, my mind is blown.
    0:07:15 And what was really interesting
    0:07:16 for those who want to dismiss it,
    0:07:18 and I brought it up yesterday.
    0:07:19 I was on Fox a couple of times on Sunday.
    0:07:23 We did normal programming in the lead up to the election.
    0:07:27 There was a poll out that Trump is only up five in Kansas,
    0:07:29 only up three in Ohio.
    0:07:31 And in Nebraska’s second congressional district,
    0:07:35 you know how there’s one vote in Nebraska that is separate.
    0:07:37 Kamala is up 12 and I believe Biden only won it
    0:07:39 by seven or eight.
    0:07:43 So that speaks to a regional shift
    0:07:47 versus just Ann Selzer is out over her skis.
    0:07:50 What do you think about all of the things that I said?
    0:07:54 – So, first off, I think there’s more than a kernel,
    0:07:57 a bushel of truth in everything you believe
    0:07:58 and that I believe.
    0:08:01 The issue is we are absolutely cherry picking data
    0:08:02 that makes us feel better about ourselves
    0:08:03 or better about our views.
    0:08:05 – That’s fine, it’s our show.
    0:08:10 – That’s right, it’s confirmation bias gone crazy.
    0:08:12 So it wasn’t the Iowa poll,
    0:08:16 it was that this woman Ann Selzer who is from the heartland,
    0:08:18 she doesn’t live in LA or New York
    0:08:23 and has this annoying habit of being remarkably correct
    0:08:26 with her polls, arguably the best pollster in the nation.
    0:08:30 – And she caught Obama’s rise and Trump’s rise.
    0:08:33 – Yeah, and doesn’t appear to have a bias,
    0:08:35 it appears to be doing what she’s supposed to be doing
    0:08:38 and for Harris to be up three or four,
    0:08:40 that would be like if all of a sudden a poll came out
    0:08:43 in Florida and showed Harris up
    0:08:46 by almost outside the margin of error.
    0:08:49 And if this in any way is a harbinger of what’s going on,
    0:08:51 it’s just exceptionally good news.
    0:08:55 And then I look at Holly Market, I was going to,
    0:08:58 and I’m still trying to, I’m thinking about doing it today,
    0:09:01 but I wanna make Wednesday morning either really good
    0:09:03 or really bad for me.
    0:09:08 So I am gonna wager a significant amount of money
    0:09:10 for me on Harris, one, because I do think
    0:09:13 she’s gonna win, but two, supposedly,
    0:09:15 I know a lot of media is looking at this thing
    0:09:18 and I like the idea of giving her a little bit of a bump.
    0:09:20 And also I think I told you this,
    0:09:23 she is on a risk-adjusted basis just a great bet right now
    0:09:25 ’cause if you assume it’s a coin flip,
    0:09:30 right now the odds are 39.6% likelihood that she wins,
    0:09:34 meaning to get a million dollars back,
    0:09:36 you have to bet $396,000.
    0:09:39 Now, if I’d had bigger balls last week
    0:09:41 and I’d done this last week when I said I was gonna do it,
    0:09:45 I would have only needed to wager $333,000
    0:09:47 and I would have got three to one,
    0:09:48 I would have got a million bucks back.
    0:09:51 Now, her odds have dramatically increased on Holly Market,
    0:09:52 which I think has an underlying bias
    0:09:54 ’cause the people who are likely gonna go on
    0:09:56 an online gambling site are younger and more male,
    0:09:58 i.e. more Trump.
    0:10:00 But the fact that even these sites
    0:10:04 are seeing momentum with her, I was big.
    0:10:07 And the thing that we talked about,
    0:10:10 Tony Hinchcliffe, the thing you mentioned,
    0:10:15 I heard that we have 300,000 people in swing states
    0:10:17 doing what I love, the term used, souls to polls,
    0:10:20 helping people get to the ballot box
    0:10:22 and that they have somewhere between 30 and 50,000.
    0:10:26 So we’re running somewhere between six and 10 to one
    0:10:29 in terms of actual ground game in these swing states.
    0:10:31 And then, and I mentioned this last time,
    0:10:34 my friend Whitney Tilson says all of his friends
    0:10:36 on the ground are saying that the Latino vote
    0:10:38 is more energized.
    0:10:40 The thing you haven’t mentioned that I think
    0:10:44 is gonna play a role is in not one, not even two,
    0:10:48 but three of the most recent Trump appearances,
    0:10:50 it feels as if in the last three months,
    0:10:52 he has aged 10 years.
    0:10:56 The last one I saw of him, he had that.
    0:10:59 When I saw, remember when Joe Biden popped up
    0:11:02 to do the stupid garbage comment?
    0:11:05 First up, I’m like, oh wait, I forgot, Joe’s still here.
    0:11:09 And it was if he was sending a video to his grandkids
    0:11:11 as he was going into hospice, I’m like, Jesus Christ,
    0:11:13 this guy’s dying.
    0:11:14 – We made the right decision.
    0:11:16 – Oh, unfortunately we made it six months too late
    0:11:20 in my view, but anyways, or maybe six months too late.
    0:11:24 But Trump, in that last rally, he looked edled,
    0:11:29 he looked weak, he’s getting that weak breath, weak voice.
    0:11:30 Maybe he’s just exhausted.
    0:11:32 I don’t know, it doesn’t matter.
    0:11:36 But he has always presented himself as much more robust.
    0:11:39 Fairly, he comes across as more robust as Biden.
    0:11:41 But the last few times I’ve seen him speak,
    0:11:46 his America has basically said we’ll take obnoxious,
    0:11:52 we’ll take offensive, we’ll take whatever it is,
    0:11:55 someone whose policies we won’t agree with
    0:11:58 on the Biden side, what we will not tolerate
    0:12:00 is old and weak.
    0:12:01 That’s it.
    0:12:02 That’s what kicked Biden out of the race,
    0:12:04 came across as old and weak.
    0:12:09 It feels like the momentum huge through the debate
    0:12:12 and the momentum flipped back to Trump dramatically
    0:12:14 over the ensuing three weeks.
    0:12:18 And I would argue in the last 96 hours,
    0:12:20 maybe the last five days,
    0:12:25 it feels like the momentum has swung back substantially
    0:12:26 towards Harris.
    0:12:28 And I can’t tell if the only people I know knocking on doors
    0:12:31 are Harris people reporting back positive news
    0:12:32 that I wanna hear.
    0:12:35 But, and that my algorithm is just serving me the shit
    0:12:36 I wanna see.
    0:12:39 I went on Diary of his CEO with Stephen Bartlett,
    0:12:41 who’s the biggest podcaster in the UK
    0:12:43 and this is incredibly impressive young man
    0:12:46 to talk about the election and the comments.
    0:12:49 It was just 10 to one people railing against me.
    0:12:51 You know, the same comments they give to us.
    0:12:53 These people are not moderants, da, da, da.
    0:12:55 The last week has been all Kamala.
    0:12:58 Also, even did you see the SNL sketch?
    0:13:02 – Yeah, I thought she was so charming and funny.
    0:13:03 – And kudos to them.
    0:13:05 Kudos to the writers who figured,
    0:13:07 I mean, these people naturally aren’t that funny themselves.
    0:13:07 Some of them are.
    0:13:12 I thought actually Obama had decent instincts around humor.
    0:13:16 But the writers, you get the sense, spoiler alert,
    0:13:19 that SNL writers are probably pretty regressive
    0:13:20 and that they sat down and they said,
    0:13:22 “All right, this shit is serious.
    0:13:24 “We have got to make her likable, intelligent
    0:13:27 “and it’s got to be funny, yet poignant.”
    0:13:29 And they just nailed it.
    0:13:31 I mean, they just nailed it.
    0:13:34 She came across as likable, funny, poking fun at herself,
    0:13:38 but not enough while depositioning Trump
    0:13:40 and keep Kamala and carry on a lot.
    0:13:41 I mean, it just–
    0:13:43 – Give me your Pamala.
    0:13:43 – Oh my gosh.
    0:13:46 That was, it was, it was wonderful.
    0:13:47 I keep hearing about the ground game.
    0:13:49 Every time I see him, I think,
    0:13:51 “Wow, he looks older and older and older.”
    0:13:55 – Yeah, I think the SNL moment was definitely worth
    0:13:59 the FCC violation, so NBC had to give Trump,
    0:14:01 I think like a minute and a half commercial
    0:14:05 during a car race yesterday or something like that.
    0:14:06 I don’t think they care.
    0:14:08 – Okay, let’s take a quick break.
    0:14:09 Stay with us.
    0:14:16 Support for Prop G comes from Wondery
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    0:14:20 Did you know that McDonald’s Happy Meal
    0:14:23 has sold over 35 billion boxes,
    0:14:26 possibly making the best-selling meal in history,
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    0:14:55 From the Happy Meal to Pest Dispensers to Air Jordans,
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    0:16:23 – What software do you use at work?
    0:16:24 The answer to that question
    0:16:27 is probably more complicated than you want it to be.
    0:16:31 The average U.S. company deploys more than 100 apps,
    0:16:33 and ideas about the work we do
    0:16:36 can be radically changed by the tools we use to do it.
    0:16:38 So what is enterprise software anyway?
    0:16:40 What is productivity software?
    0:16:42 How will AI affect both?
    0:16:44 And how are these tools changing the way
    0:16:45 we use our computers to make stuff,
    0:16:48 communicate, and plan for the future?
    0:16:50 In this three-part special series,
    0:16:52 Decoder is surveying the IT landscape
    0:16:54 presented by AWS.
    0:16:56 Check it out wherever you get your podcasts.
    0:17:02 – Welcome back.
    0:17:05 We, of course, had a great guest
    0:17:07 because I believe you know them or are friends with them.
    0:17:09 We had Charlemagne the God on.
    0:17:12 Let’s hear a quick clip from that appearance
    0:17:14 with Charlemagne the God.
    0:17:16 – Like, you know how many people I run into every day
    0:17:21 who literally have not heard 95% of the crazy rhetoric
    0:17:23 that has come out of Trump’s mouth
    0:17:25 or come out of people in his camp’s mouth?
    0:17:27 And so it’s like, you should keep putting that
    0:17:30 in people’s face to let folks know what he’s saying,
    0:17:31 what he’s planning to do,
    0:17:34 and you should keep drilling home your message,
    0:17:37 your plan for the economy, especially her,
    0:17:40 ’cause he’s only been running for 100 days.
    0:17:42 – So to find the rest of that interview,
    0:17:44 type in Raging Moderates wherever you get your podcasts
    0:17:46 and hit follow.
    0:17:47 We have more election coverage coming out,
    0:17:49 so please subscribe so you don’t miss an episode
    0:17:51 or write enough of the mid-pod ad.
    0:17:54 Jess, let’s get on with the show.
    0:17:55 So both campaigns have been
    0:17:57 crisscrossing across battleground states.
    0:18:01 We had Harris wrapping up her message on the ellipse
    0:18:02 and appearing on SNL.
    0:18:05 Biden making a gaffe that Republicans jumped all over.
    0:18:09 Trump dressing up on Halloween as a garbage truck driver
    0:18:11 and RFK Jr. declaring he’s going to take charge
    0:18:13 of vaccines and food safety,
    0:18:16 which I saw again as yet another unforced error.
    0:18:19 What other moments are, are there any other moments
    0:18:20 than these that stand out to you and do any
    0:18:23 of these moments, do you think make a difference?
    0:18:25 – I mean, those were the big ones.
    0:18:27 Obviously, if you don’t want to get into the minutiae
    0:18:30 of the specific things that he said at a rally,
    0:18:33 you know, the Giannis-Antigio Compo lines,
    0:18:36 I do think that the prominent role of RFK
    0:18:39 in health and safety is something
    0:18:41 that low key matters a lot to people.
    0:18:45 And I think that because they are the island
    0:18:48 of the misfit toys, which I know is how you describe
    0:18:50 your business as well.
    0:18:52 – My staff, not my business, my staff.
    0:18:54 – Oh, your staff.
    0:18:55 – Yeah.
    0:18:57 – I don’t see them in that way, by the way.
    0:18:58 They seem–
    0:18:59 – Oh, you don’t know them.
    0:19:00 You don’t know them.
    0:19:02 It’s like the functional family.
    0:19:03 The functional families, you know,
    0:19:05 are the dysfunctional ones.
    0:19:07 I always say in our reviews that this person
    0:19:08 isn’t doing this well.
    0:19:09 And I’m like, if they could do this well,
    0:19:11 they’d be working at Google, not for you,
    0:19:13 here at this Joey Bagadonis podcast.
    0:19:16 Anyways, love my staff, love my staff, go ahead.
    0:19:21 – So because you have this wild cast of characters
    0:19:23 and you can’t get a lot of the people
    0:19:26 that you would want to be out there,
    0:19:29 you end up with a showcase that has Dana White,
    0:19:33 Hulk Hogan, RFK Jr., Tulsi Gabbard, et cetera.
    0:19:36 And I think for a certain piece of the base,
    0:19:41 that’s really resonant, but RFK Jr. for a normal person
    0:19:45 is really like anathema, you know,
    0:19:49 because he’s not even representing a departure
    0:19:51 from the Democratic Party that I think is resonant
    0:19:52 with a lot of people.
    0:19:55 The reasons that it happened, for instance,
    0:20:00 because he holds these kinds of beliefs about health
    0:20:04 because of what a terrible person he has been morally
    0:20:07 himself in terms of what he put his former wife through
    0:20:10 and ended up resulting in her suicide.
    0:20:11 And just the weird stuff, right?
    0:20:14 Like having a whale head strapped to the top
    0:20:17 of his station wagon and dead bear cubs
    0:20:19 in Central Park, et cetera.
    0:20:23 And I think that, you know, Trump this time around
    0:20:26 can’t say I’ll be surrounded by great people
    0:20:29 because 40 out of 44 cabinet secretaries have said
    0:20:31 that they’re not for Trump anymore.
    0:20:34 So then you think, okay, well, maybe there’s this other layer
    0:20:36 of like not the worst people in the world,
    0:20:40 but kind of okay people that might go into the administration.
    0:20:42 And listen, people love a fancy title.
    0:20:45 I’m sure he will be able to get some good people
    0:20:48 from the business community to go work for him.
    0:20:50 People who have served the country
    0:20:53 and feel that this is their patriotic duty.
    0:20:58 But RFK Jr.’s views on vaccines and health and safety
    0:21:01 are so far outside the mainstream.
    0:21:02 I mean, did you see the latest one
    0:21:05 that he wants to remove fluoride from the water?
    0:21:07 – We’re drinking water, so it’s a cause of cancer, yeah.
    0:21:12 – Yeah, not only does it, does water turn frogs,
    0:21:13 trans or something like that.
    0:21:15 Now we want to get fluoride out of our water.
    0:21:16 And Tim Scott was being interviewed
    0:21:19 the senator from South Carolina and he was asked
    0:21:22 about this and he tried to do the usual dance of like,
    0:21:25 oh, I don’t know what you’re talking about, blah, blah, blah.
    0:21:28 And it turns out that he co-sponsored a bill
    0:21:30 to make sure that there was fluoride in water
    0:21:32 in underserved communities in 2018.
    0:21:35 Because guess what, fluoride is really important.
    0:21:39 You know, I take a two and a half year old to the dentist.
    0:21:43 They start talking to you about fluoride at one, right?
    0:21:48 And I think that it will really hurt Trump’s candidacy
    0:21:53 to have that be someone that we can identify
    0:21:57 as a harbinger of quote unquote professionalism
    0:21:59 that he would have in there and then to add to it
    0:22:02 that he would also be in charge of women’s health,
    0:22:05 which is frightening to have someone who’s so,
    0:22:07 first of all, disrespectful towards women anyway,
    0:22:11 but this weird pro-life Democrat sometimes,
    0:22:12 he used to be pro-choice,
    0:22:14 I guess he says that he’s pro-life now,
    0:22:17 but someone who has never taken any interest
    0:22:21 in this issue whatsoever or moderated the party on it
    0:22:23 since he switched over.
    0:22:24 – I thought that was another tactical error.
    0:22:27 I thought he should have said we’re gonna put him
    0:22:29 on something around the environment.
    0:22:30 – In a corner?
    0:22:30 – Well, he’s actually–
    0:22:31 – Yeah, actually, yes.
    0:22:33 He believes in climate change.
    0:22:34 He has some good, yeah.
    0:22:35 – He’s good around the environment.
    0:22:37 It was soft in this position.
    0:22:39 I forget, who was the, who was the guest
    0:22:42 when you and I were panelists on Bill Maher together,
    0:22:44 which is how we met, how we fell,
    0:22:47 how I fell in love with Jess Tarlaugh.
    0:22:48 What, who was our guest?
    0:22:50 Who was the third person or the person?
    0:22:53 – It was Cuomo and Melissa DeRosa.
    0:22:54 – Oh, and then you bailed, right?
    0:22:55 – For the interview, it was when Maher,
    0:22:57 it’s still only two people.
    0:22:58 It was like post-COVID, so it was only–
    0:23:00 – It’s still, yeah, but it’s still only two.
    0:23:03 That was easily the most impossible.
    0:23:05 I had to sit around and talk about post-COVID
    0:23:10 with the guy who, with Cuomo as he started his apology tour.
    0:23:12 That was the most uncomfortable TV I think I’ve ever,
    0:23:14 and you got to bail ’cause whatever Fox
    0:23:16 doesn’t want it on CNN, anyway.
    0:23:18 – It’s Melissa DeRosa who was,
    0:23:21 who worked for Cuomo as the other person.
    0:23:22 – Yeah, who worked for him.
    0:23:23 I didn’t understand the whole thing.
    0:23:25 Anyways– – They were promoting a book.
    0:23:26 It was a thing.
    0:23:29 – Yeah, and I said, oh, anyways,
    0:23:32 but I met RFK Jr. backstage.
    0:23:34 He’s very handsome, he’s very charming,
    0:23:37 he’s very likable, and he started texting,
    0:23:38 “Can I come on your pod?”
    0:23:40 And I thought, “Well, yeah, sure, why not?”
    0:23:43 And I checked with the team and the team was resounding now.
    0:23:46 We’re not gonna platform this guy.
    0:23:48 And I think they made that, you know,
    0:23:51 my island here is the wisdom of crowds.
    0:23:53 It’s always good for me to check in
    0:23:55 ’cause occasionally, or actually quite frequently,
    0:23:57 they get it right and I get it wrong.
    0:24:00 And he seems like he’s just gotten crazier.
    0:24:03 And the interesting thing, the reason I bring it up,
    0:24:04 is that he was the guest.
    0:24:05 He did the long form interview up front.
    0:24:09 And I thought Bill Maher tried to be as kind as possible,
    0:24:12 but asked hard questions and torn limb from limb,
    0:24:14 just made him look like an idiot, in my opinion,
    0:24:17 just pointed out inconsistencies left and right.
    0:24:20 And then RFK Jr., you know,
    0:24:23 he’s supposed to come out for the conversation afterwards.
    0:24:25 He didn’t come out, he refused to come out.
    0:24:26 – Really? – And so, yeah.
    0:24:27 – Oh, I didn’t know that.
    0:24:28 – Yeah, he didn’t come out.
    0:24:29 He was supposed to come out, and I was looking-
    0:24:31 – So he’s a baby on top of you.
    0:24:32 – Well, his comms person.
    0:24:34 And what’s interesting is just a couple of days ago,
    0:24:37 I got a text message from his comms person saying,
    0:24:38 “We need to speak.”
    0:24:40 And I’m like, I immediately texted back,
    0:24:40 “What’s up?”
    0:24:41 And I haven’t heard back from him,
    0:24:42 but I can’t imagine,
    0:24:44 I have no idea what they want from me.
    0:24:49 Anyways, this is, again, another absolutely unforced-
    0:24:52 – A forced error.
    0:24:53 – Unforced error.
    0:24:57 So, they’re pivoting through the swing states here.
    0:25:00 Do you think there’s anything, if you’re advising them,
    0:25:01 I mean, this is pretty much it.
    0:25:03 This is go time, right?
    0:25:04 – Yeah, I mean, it’s election day.
    0:25:06 – If you were advising either of the candidates,
    0:25:08 anything they should do tomorrow to put a cherry on the top,
    0:25:11 or is it kind of like the ball is out of their hands?
    0:25:13 – I mean, I think for Trump,
    0:25:15 he is facing, as you said, a rally scene
    0:25:17 that is not tip-top.
    0:25:21 You know, it’s emptier, people are less engaged,
    0:25:23 and he is descending a bit.
    0:25:27 And if he can muster a few lines of unity,
    0:25:32 or even re-centering around his economic message,
    0:25:34 I mean, that has been the big problem here.
    0:25:36 She has totally matched him
    0:25:39 in terms of who’s best to handle the economy,
    0:25:42 because he won’t talk about anything normal, right?
    0:25:44 He’s advertising on anti-trans issues,
    0:25:47 and he’s giving no specifics on his economic plan
    0:25:49 anyway, when he does talk about it.
    0:25:50 So, I would say to him,
    0:25:52 if you could do all of your rallies
    0:25:53 and really be talking about the economy,
    0:25:55 that would be best for you.
    0:25:57 For Kamala, you know,
    0:26:01 she can only do with what has been working for her,
    0:26:03 staying on message, and I did love that line
    0:26:05 that she had to Charlemagne when she did the town hall
    0:26:07 with him, where he said, you know,
    0:26:11 there are people who say you’re all relentlessly on message,
    0:26:14 you stick to your script, you can’t weave at all,
    0:26:16 or whatever, and she said, “I say you’re welcome.”
    0:26:18 That’s my response to you.
    0:26:21 You know, you want somebody that understands
    0:26:24 why they’re there to help the American people.
    0:26:25 These are the ways that I’m gonna do it.
    0:26:27 So, I wanted her to stick to that message,
    0:26:31 but I do love when she, first of all,
    0:26:34 like genuinely asks people for their vote.
    0:26:37 I have found it to be one of her more compelling sides,
    0:26:40 where she says, “I’m taking nothing for granted,
    0:26:41 and I’m here asking for your vote.”
    0:26:45 And I want more, as many of those human moments as possible
    0:26:47 in the last few hours of all of this,
    0:26:50 where she says, “I know that we are building a coalition
    0:26:54 of people who are strange bedfellows.”
    0:26:55 You know, that we have these Republicans,
    0:26:59 like you have Liz Cheney and AOC backing the same ticket.
    0:27:01 That’s rare.
    0:27:04 And that she will be a president for all Americans,
    0:27:07 and that her cabinet will reflect that,
    0:27:10 and that she is not too prideful
    0:27:14 to change the way that she thinks about things,
    0:27:15 and to take advice from people
    0:27:18 that she wouldn’t typically do so.
    0:27:20 And I wanna hear that kind of stuff,
    0:27:23 ’cause I think people are looking for the reassurance
    0:27:25 that if they’ve gone out on a limb,
    0:27:28 like if you are a Republican in Iowa,
    0:27:32 that is going to end up with a Kamala Harris presidency.
    0:27:34 You have gone out on a limb to do that,
    0:27:37 and she really needs to continue
    0:27:41 talking about how she’s going to meet them in the middle,
    0:27:44 and respects what they’ve done.
    0:27:46 -Before we break, just a quick review
    0:27:49 of the most recent New York Times-Santa College poll.
    0:27:52 In Nevada, the poll, the New York Times-Santa poll,
    0:27:55 has Harris up by three.
    0:27:57 In North Carolina, Harris up by two.
    0:27:59 Wisconsin, Harris up by two.
    0:28:01 Georgia, Harris up by one.
    0:28:03 Pennsylvania tied, Michigan tied.
    0:28:06 Arizona, Trump up by four.
    0:28:07 The way I read this,
    0:28:09 and maybe I don’t have the math correctly,
    0:28:13 but then doesn’t it all come down to Pennsylvania?
    0:28:15 I guess if, yeah, I think it all–
    0:28:17 -Always, but she has more,
    0:28:18 I mean, what they’re emphasizing is
    0:28:21 she has more paths than he does.
    0:28:24 Like the Sun Belt is still in play for her,
    0:28:26 and he needs Pennsylvania,
    0:28:28 but it has to go through the Georgia-North Carolina path,
    0:28:30 and he’s having to spend way more time
    0:28:32 in North Carolina than he would have hoped.
    0:28:35 My takeaway from the New York Times-Santa poll,
    0:28:38 what I was excited to see back to normal levels
    0:28:40 of Democratic support with black voters,
    0:28:44 and Latino voters, and the gender gap there,
    0:28:46 I think it was the gender gap they were saying
    0:28:49 was the least in Pennsylvania, which surprised me.
    0:28:50 We’ll see how it all bears out,
    0:28:55 but I’m still concerned about minority support
    0:28:57 for the Democratic candidate.
    0:28:59 And one other thing that popped up during the week,
    0:29:00 I don’t know if you caught this,
    0:29:03 Gallup released a survey around enthusiasm,
    0:29:06 and Democrats are right now more enthusiastic
    0:29:09 than they were in 2008 with Obama,
    0:29:13 and 10 points more enthusiastic than Republicans.
    0:29:14 Have you been feeling that?
    0:29:16 It honestly surprised me.
    0:29:19 -It’s so hard because I live in London,
    0:29:21 and I’m in a bit of a bubble around my social media algorithm,
    0:29:24 and the people I talk to are so–
    0:29:25 -I shouldn’t say everyone.
    0:29:27 I have a lot of friends in LA.
    0:29:29 A lot of my Jewish friends are very–
    0:29:33 I don’t want to say pro-Trump, but squarely Trump.
    0:29:35 And there’s just no getting around it, though.
    0:29:38 I’m getting emails with, like, check out this data.
    0:29:41 Everyone’s sort of– people are feeling almost a little bit.
    0:29:44 The way I describe it is bereft about a week
    0:29:46 and a half, two weeks ago, and people
    0:29:48 are starting to get their mojo back.
    0:29:50 OK, let’s take a quick break.
    0:29:52 Stay with us.
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    0:31:32 Welcome back.
    0:31:34 Let’s switch gears to the battleground states.
    0:31:36 Georgia, Michigan, and North Carolina
    0:31:38 might get called fairly quickly, but we
    0:31:40 could be waiting for a while for Arizona, Nevada,
    0:31:44 Pennsylvania, and Wisconsin, especially if it’s a close race.
    0:31:46 Justice gets a little bit to predictions.
    0:31:48 Do you think there’s any potential surprises here?
    0:31:51 Obviously, Iowa would be a big effing surprise.
    0:31:54 Is there any– my gut is one way or the other.
    0:31:56 We’re going to have two or three states pop up
    0:32:00 on the screen with Steve Kornacki or Bill Hammer.
    0:32:01 Who, by the way, is a lovely guy?
    0:32:03 I met him in the Hamptons.
    0:32:04 He’s a very nice man.
    0:32:05 Very handsome, too.
    0:32:06 He’s a big SAG harbor guy.
    0:32:08 Very, very handsome.
    0:32:09 I mean, I hope HR is not listening.
    0:32:11 I didn’t mean it that way, but he’s handsome.
    0:32:11 You know what?
    0:32:13 It’s OK if you objectify.
    0:32:14 Let me give you a little tip.
    0:32:16 As someone who is an HR nightmare,
    0:32:20 it’s OK to objectify people as long as you objectify men.
    0:32:22 Then it’s OK.
    0:32:26 Anyways, Bill Hammer is a tall drink lemonade.
    0:32:29 So what states do you think might
    0:32:31 be surprises here one way or the other?
    0:32:32 Obviously, there’s Iowa.
    0:32:33 That would be a shocker.
    0:32:36 Any states that are traditionally
    0:32:39 or Harris thinks she has in the bag that could potentially
    0:32:41 pop up Trump?
    0:32:43 I don’t think so.
    0:32:44 Obviously, if North Carolina, Georgia
    0:32:47 are going in Harris’s direction, then
    0:32:48 we know it’s a big night.
    0:32:51 In her favor, Trump really needs to hold those.
    0:32:55 What I’m still curious about is that inefficient vote.
    0:33:01 If he’s running up the tally in New York and Florida–
    0:33:03 I mean, we actually haven’t talked about Florida a lot.
    0:33:06 If Harris is performing well in Florida,
    0:33:09 that will also be a harbinger of something to come.
    0:33:13 And obviously, they have a huge Latino and Puerto Rican,
    0:33:15 specifically, population there.
    0:33:20 But if Trump is banking votes in New York, Florida,
    0:33:22 California, these places, he’s been going.
    0:33:24 I mean, he was in New Mexico.
    0:33:27 All of this is so bizarre if you’re actually
    0:33:28 being strategic about it.
    0:33:29 And I get it.
    0:33:30 It’s fun to win the popular vote.
    0:33:31 Republicans should try it sometime.
    0:33:36 I think they’ve only done it once in the last eight elections.
    0:33:41 But it will be interesting if it ends up
    0:33:43 that Republicans somehow win the popular vote
    0:33:44 and lose the electoral college.
    0:33:47 But it will be a very poor reflection
    0:33:52 on the electoral strategy that Suzy Wiles, who’s very–
    0:33:54 supposedly very, very good at her job,
    0:33:55 has taken with all of this.
    0:33:57 And I get that he’s hard to control,
    0:34:00 and he wants a rally at MSG, and he wants to go to Coachella.
    0:34:02 But that’s something that I’ll be looking for.
    0:34:06 And also, his effect down ballot, because New York should
    0:34:09 decide control of the House.
    0:34:12 And we talked about those close congressional races
    0:34:15 last week on the podcast.
    0:34:17 Trump is not a lift for most of these people
    0:34:19 that are in these tight races.
    0:34:24 So inefficient vote is what is fascinating me currently.
    0:34:26 One thing that’s clear, this race is expected
    0:34:28 to be the most contested in history.
    0:34:31 Trump is already toying with the public’s trust in the results.
    0:34:34 Both campaigns have teams of lawyers prepped and ready to go.
    0:34:36 Lawsuits have been filed for weeks now.
    0:34:39 And we can be seeing legal fights over results for months
    0:34:41 if the margins are thin.
    0:34:43 There are even zombie lawsuits, cases
    0:34:44 that Trump could bring back.
    0:34:47 If there’s a chance, they might shift the vote.
    0:34:49 What do you make of all these legal challenges, Jess?
    0:34:50 Have you spoken to many of these lawyers?
    0:34:52 How do you see them unfolding?
    0:34:56 Does one side have an edge over the other?
    0:34:58 Well, the Democrats have the edge.
    0:35:01 And the Republicans even openly talk about that.
    0:35:05 Mark Elias, who is our top elections lawyer,
    0:35:09 and you can see him, he goes on MSNBC pretty regularly,
    0:35:11 is a big target.
    0:35:13 And the Republicans just talk about him.
    0:35:15 They’re like, we didn’t have a Mark Elias in 2020.
    0:35:17 And I don’t think they have one guy,
    0:35:20 but they certainly have a better operation this time around.
    0:35:24 But they’re throwing everything they can at the wall
    0:35:26 and seeing what sticks.
    0:35:29 I mean, part of the problem is the way
    0:35:32 that what they are perceiving or what they are, frankly,
    0:35:39 lying about as being unfair election practices
    0:35:40 are getting amplified on social media.
    0:35:44 And either if they are getting community-noted or not,
    0:35:46 it’s not making a difference to people.
    0:35:47 And they’re running with this argument.
    0:35:50 There was this whole thing about that a bunch of ballots
    0:35:54 were just getting dropped off by this random person outside
    0:35:55 the door.
    0:35:57 I think it was in Allegheny County in Pennsylvania.
    0:35:59 And it turns out that it was a postmaster that
    0:36:01 was doing his job.
    0:36:04 Or they went after Bucks County, because they were saying
    0:36:06 it was election interference, that there were long lines.
    0:36:07 No, baby.
    0:36:09 Sometimes there’s just long lines.
    0:36:12 Like a lot of people showed up to vote and they were understaffed.
    0:36:15 And in Georgia, they had to come into the courtroom
    0:36:16 to defend this.
    0:36:20 There were more boxes for dropping off mail ballots.
    0:36:23 You can mail your ballot in, or you could put it in a drop box,
    0:36:24 which a lot of people like to do.
    0:36:27 My sister in California, that’s how they vote, that they go.
    0:36:30 And drop off their mail ballot in person.
    0:36:33 And there were, I think, four new drop boxes that were added.
    0:36:35 And the Republicans were saying that it was illegal.
    0:36:36 And they were brought in front of the judge.
    0:36:38 I think it was like 8 AM on Saturday morning.
    0:36:41 And the judge was like, what are you talking about?
    0:36:45 Like everything has– and I’m not saying that it’s impossible
    0:36:49 that there’s some minor fraud somewhere.
    0:36:53 But the theme is always that Republicans want less people
    0:36:55 to be able to vote.
    0:37:00 And they hide behind this facade of election integrity.
    0:37:03 But we know that election integrity in 2020
    0:37:05 looked like calling up Brad Raffensberger
    0:37:10 and threatening him, trying to stop the count in Arizona
    0:37:13 and continue the count in Pennsylvania.
    0:37:15 And it’s really so disheartening.
    0:37:21 And I’ve been reading a lot of articles about former Trumpers
    0:37:23 and what turned them off.
    0:37:25 And an interesting one, actually, or part of it,
    0:37:28 has been that he went too left on abortion, which I never
    0:37:30 expected to see.
    0:37:31 I would think getting rid of Roe v. Wade
    0:37:33 would have been this huge miracle.
    0:37:36 But they feel that he’s too left on it.
    0:37:39 But a lot of it is about this disrespect
    0:37:44 for the electoral process and not being able to take a W.
    0:37:46 It’s more than a disrespect for the electoral process.
    0:37:48 It’s a lack of respect for institutions, which
    0:37:50 is a lack of respect for the country.
    0:37:54 A country is a series of structures, protocols,
    0:37:57 legal entities that create an infrastructure that
    0:38:01 can impose taxes, uphold laws, prosecute, defend those laws,
    0:38:03 and set up an operating system.
    0:38:05 In this instance, 50 different operating systems,
    0:38:08 50 different protocols to try and create a diversity
    0:38:11 around the process to maintain election integrity such
    0:38:13 that no one system can be hacked.
    0:38:17 And when Governor DeSantis spends $3 million
    0:38:21 for, quote unquote, election integrity, that is so cynical.
    0:38:22 There’s no reason that Florida needs
    0:38:25 to spend $3 million on what are–
    0:38:27 it’s like 60 contested votes.
    0:38:30 And I have a close friend who I went to college with,
    0:38:33 who I would describe as a reasonable intelligent guy.
    0:38:36 And his entire Instagram reels the last few days
    0:38:38 has been, what to do if you’re worried about your vote
    0:38:39 being counted?
    0:38:41 And he’s a pretty hardcore Trumper.
    0:38:42 And I called him, and I said, you
    0:38:44 realize you’re inciting violence?
    0:38:45 And he was like, what do you mean by that?
    0:38:48 And I said, look, there’s absolutely no evidence
    0:38:55 that there’s anything more than 0.0001% of election fraud.
    0:38:57 Both Republicans and Democratic commissioners
    0:39:01 have done a great job of having fidelity for the Constitution
    0:39:02 and their responsibility.
    0:39:05 There are few processes that involve humans
    0:39:08 that have had the same integrity as our elections.
    0:39:11 And basically the last time we had kind of a split decision,
    0:39:14 a Republican or a conservative Supreme Court justice
    0:39:17 said, OK, Bush is the president.
    0:39:21 And then, in what has become a very unusual move,
    0:39:23 Vice President Gore conceded the election,
    0:39:25 recognizing he didn’t want to have violence,
    0:39:27 he didn’t want to have a revolution.
    0:39:30 And all of this, we don’t trust the CDC,
    0:39:33 we don’t trust the American Pediatric Association,
    0:39:38 we don’t trust the secret service when our guy gets
    0:39:42 shot out, we don’t trust any of these institutions.
    0:39:45 The Fed, Jesus Christ, the Fed has put on a fucking master
    0:39:47 class here.
    0:39:50 But this notion that you can’t trust institutions,
    0:39:53 you need to trust your emotions and your feelings
    0:39:56 and what you get on a social media feed that
    0:39:59 is purposely there to take you further to the left,
    0:40:01 further to the right, and enrage you.
    0:40:04 So it’s more than just a lack of trust in elections.
    0:40:07 But this, I mean, you just see, it’s just so naked.
    0:40:09 If we win, it’s democracy at work.
    0:40:14 And if we lose its election fraud and our institutions,
    0:40:19 and you can already see on these ridiculous social media
    0:40:23 feeds, somehow laying the groundwork for cases,
    0:40:25 someone burned a ballot box.
    0:40:26 OK, I believe that.
    0:40:30 What on earth does that have to do with a conspiracy
    0:40:31 around election fraud?
    0:40:33 Someone lit a ballot box on fire.
    0:40:34 OK, you win.
    0:40:37 Is there any evidence that that ballot box had more votes
    0:40:38 for Harris than for Trump?
    0:40:41 It’s just, it’s so–
    0:40:46 I mean, it’s what the head of propaganda for the Kremlin
    0:40:49 said back in the days of Gorbachev,
    0:40:50 that this is how we win.
    0:40:52 We just flood the zone with misinformation.
    0:40:54 We make no one trust institutions,
    0:40:57 which is Latin for no one trusts America anymore.
    0:40:59 And we just overwhelm them with information left and right
    0:41:01 and just confuse this shit out of them.
    0:41:03 And they no longer believe in their government
    0:41:05 or in their country.
    0:41:08 But it is this lack of respect for our institutions,
    0:41:10 especially I think it went crazy in COVID.
    0:41:13 I think people were kind of mentally unwell
    0:41:15 and were so upset about what was going on,
    0:41:18 didn’t know what to trust, and said, oh, we can’t trust the CDC.
    0:41:21 And when the American Pediatric Association says,
    0:41:23 there is no correlation between these vaccines
    0:41:27 that we can see in myocardia and teenage boys
    0:41:30 or in large tarts, no one wants to believe them
    0:41:32 because they know somebody whose kid had an arrhythmia.
    0:41:34 OK, fine.
    0:41:38 But that doesn’t mean there’s a there there.
    0:41:42 So I find all of this very dangerous.
    0:41:44 It’s just another example of,
    0:41:47 there really is a double standard here.
    0:41:48 You can tell it’s going to be,
    0:41:51 I mean, Kerry Lake sort of embodies this, right?
    0:41:53 That in Arizona voters,
    0:41:54 I just can’t get over the fact
    0:41:56 that they decided to put her up.
    0:41:58 That is going to be my ointment.
    0:42:01 That is, if things go wrong for us tomorrow,
    0:42:06 I’m just gonna watch the numbers coming over and over
    0:42:09 on the Gallegos Lake Senate Contest
    0:42:12 ’cause my understanding is things are probably gonna go.
    0:42:13 Yeah.
    0:42:14 Representative Gallegos way, but so–
    0:42:16 Kamala may not win Arizona.
    0:42:18 Ruben Gallego is going to win.
    0:42:19 Just take it, right?
    0:42:20 Yeah, that’s probably gonna be–
    0:42:22 I mean, people, yeah, people are doing it.
    0:42:25 But hopefully she can pull it out.
    0:42:27 Arizona looks tough, though, for Kamala right now.
    0:42:28 And what do you think?
    0:42:30 Do you think there’s any chance that the Supreme Court,
    0:42:32 if something ends up in the Supreme Court,
    0:42:33 that they’ll impact the election?
    0:42:38 I mean, I don’t wanna say no
    0:42:41 because the Supreme Court has been quite activist
    0:42:44 and activist in Trump’s direction.
    0:42:46 Pretty sure that all of them don’t wanna have anything
    0:42:49 to do with this and that they’ll try to keep it
    0:42:52 in lower courts as much as possible.
    0:42:57 But again, it has to be very normal polling errors
    0:43:03 could lead to huge wins on either side of this.
    0:43:07 And I continue, if I was a praying gal,
    0:43:11 I would pray for a decisive win, most of all.
    0:43:15 And Trump actually this weekend, for the first time,
    0:43:17 acknowledged that he could lose.
    0:43:20 Like he said something like, yeah, we could lose.
    0:43:22 We shouldn’t lose, but it could happen.
    0:43:25 And there was a report, I think, in Axios
    0:43:29 that Suzy Wiles had put out a memo to the campaign
    0:43:33 that said, we’re optimistic,
    0:43:37 but no matter what happens, blah, blah, blah, blah, blah.
    0:43:40 And that’s a bit of a different tone
    0:43:43 from the usual Trump triumphalism.
    0:43:44 And I’m sure they still think that they’re gonna win.
    0:43:49 And again, it may happen, but even having a little glimpse
    0:43:53 into the fact that there is some understanding
    0:43:55 that it might not be a Trump victory
    0:44:00 is a tiny bit heartening for me at this moment.
    0:44:02 – Okay, Jess, this is it.
    0:44:03 It’s go time.
    0:44:05 Your prediction and any nuance
    0:44:08 or any wrinkle around your prediction.
    0:44:11 – Notiously optimistic that Kamala wins.
    0:44:15 One thing that I had been actually feeling
    0:44:18 a little bit better about is there was some good polling
    0:44:21 for our friend, John Tester, in Montana.
    0:44:24 And that story about Ryan Sheehy, his opponent,
    0:44:28 who lied about getting shot in Afghanistan.
    0:44:30 Who did the shooting?
    0:44:33 It was in a parking lot at a national park.
    0:44:37 That that story has actually been breaking through to people.
    0:44:39 And I think that there’s a lot of folks out there,
    0:44:42 especially in the age of Trump,
    0:44:46 that are looking for good people to put in office.
    0:44:51 That they feel that there’s some baseline level of okay
    0:44:55 that they’re going to be if you have ethical
    0:44:58 and morally sound folks in office.
    0:45:01 And John Tester is that.
    0:45:04 And so I’m a little bit more hopeful about that,
    0:45:06 still feel that the Republicans
    0:45:07 are going to control the Senate.
    0:45:09 But was excited to see that.
    0:45:13 And I think the Democrats are going to take the house back.
    0:45:14 What about you?
    0:45:18 – Yeah, I agree with you, both the Senate and the House.
    0:45:20 The markets are predicting that regardless of who wins,
    0:45:22 it doesn’t matter that it’ll be a split government
    0:45:27 and that the populace and the media are overestimating
    0:45:28 the impact one way or the other.
    0:45:30 And essentially that’s what the market is saying.
    0:45:34 Is that no one individual is going to have that much power
    0:45:36 to get much done over the other.
    0:45:37 – Won’t that be fun?
    0:45:40 – Because it’ll be a split government.
    0:45:43 My prediction is it’s going to be a,
    0:45:45 actually a decisive win for Harris.
    0:45:49 All of the things I’ve seen breaking our way,
    0:45:54 the poll from Seltzer in Iowa absolutely blew my mind.
    0:45:56 All of these self-inflicted wounds.
    0:45:59 You mentioned the story about Tester.
    0:46:02 It just feels like all the atmospherics indicate
    0:46:06 whether it’s on the ground reporting back from canvassing,
    0:46:07 whether it’s the amount of money,
    0:46:11 the 10 to one people on the ground trying to turn out the vote.
    0:46:13 And again, I just might be in a bubble
    0:46:15 where I not only have a social media algorithm
    0:46:17 but I have a friend algorithm
    0:46:18 and people are only sending me things
    0:46:20 that are going to make me feel better.
    0:46:23 But I was pretty honest, I think with myself
    0:46:26 in the two weeks leading up to the last four days.
    0:46:28 Seven days ago, I was pretty convinced
    0:46:31 that the edge was distinctly Trump.
    0:46:32 And then these videos of him,
    0:46:34 which have been going around,
    0:46:35 showing that he’s just old,
    0:46:38 even little stupid things like him,
    0:46:40 trying to open a door and having a tough time.
    0:46:41 – Or the garbage truck door.
    0:46:42 – Yeah, the garbage.
    0:46:45 I feel like he’s aged 10 years in the last three weeks.
    0:46:47 Even this is, this polymarket thing,
    0:46:50 I’m becoming addicted, I’m like a kid trading crypto.
    0:46:53 In just the time we’ve been on this pod,
    0:46:56 Jess, the likelihood according to polymarket
    0:46:58 that Harris will win the presidency
    0:47:03 has gone from a low of 38.6% to a high of 43.2.
    0:47:07 And now it’s back to 42.3.
    0:47:10 I mean, the market is just so volatile around this stuff.
    0:47:13 You can just feel the tension,
    0:47:16 but every piece of media I’m seeing
    0:47:18 points to more people turning out.
    0:47:20 And then I think this will,
    0:47:23 this race will be remembered for a couple of things.
    0:47:26 One, if Harris loses,
    0:47:28 I think Biden is gonna have some explaining to do,
    0:47:29 so to speak.
    0:47:30 I think people are just gonna be furious
    0:47:33 at the Democratic Party and Biden
    0:47:35 and the people around him for not getting him
    0:47:37 to drop out sooner than how on earth
    0:47:39 did we not run away with this?
    0:47:42 And I do think that if he loses,
    0:47:44 the things that they’re gonna remember here
    0:47:48 is that this was the podcast election.
    0:47:49 I think her going on Caller Daddy
    0:47:52 and him going on Rogan were more kind of seminal
    0:47:54 in terms of identifying this new medium.
    0:47:57 And also I think this is,
    0:47:58 you know, I hate it when people say,
    0:48:00 oh, this is the election of women or whatever,
    0:48:02 but having raised boys,
    0:48:07 I just see the way we had a Halloween party for my son.
    0:48:10 The party was supposed to be at 9 p.m.
    0:48:12 And the girls show up on time.
    0:48:14 They help clean up.
    0:48:16 Their costumes were perfect.
    0:48:19 They’re just more organized.
    0:48:20 And I think you’re just gonna see,
    0:48:24 I think women have a big issue here
    0:48:26 and they’re organized.
    0:48:28 I just think women are gonna show up
    0:48:32 because especially if you look at the demographics here,
    0:48:34 I think demographics are destiny.
    0:48:36 There’s 12 million fewer people on the voter rolls
    0:48:38 ’cause they’ve died since 2016.
    0:48:40 There’s 20 million new voters.
    0:48:42 And the 12 million that have died generally are older,
    0:48:45 wider and more Republican and the new voters,
    0:48:48 the 20 million new voters are generally younger,
    0:48:53 more non-white and I believe more progressive.
    0:48:59 And I think you’re gonna see that women showed up here
    0:49:03 and we’re just more organized across every age group
    0:49:05 and that leans Harris.
    0:49:07 So I’m predicting, I believe this is gonna be Harris
    0:49:10 and it’s gonna be decisive.
    0:49:12 – I love it.
    0:49:14 I agree with you about the women showing up
    0:49:17 and I do hope that a consequence of this though
    0:49:22 is not kind of brow beating men about the victory
    0:49:24 but figuring out a better way forward
    0:49:29 to have a more balanced party where everyone feels included
    0:49:34 because young men have basically the same political beliefs
    0:49:36 as young women.
    0:49:39 They’re just not being spoken to in a way
    0:49:42 that is resonant and that’s on us.
    0:49:43 – I love that, that’s where we’re gonna leave it.
    0:49:45 All right, that’s all for this episode.
    0:49:46 Thank you for listening to Raging Moderates.
    0:49:50 Our producers are Caroline Shagrin and David Toledo.
    0:49:52 Our technical director is Drew Burroughs.
    0:49:55 You can find Raging Moderates on its own feed every Tuesday.
    0:49:57 That’s right, Raging Moderates is on its own feed.
    0:49:59 What a thrill.
    0:50:02 Please follow us wherever you get your podcast
    0:50:05 or I’m sending an incredibly intelligent person
    0:50:07 who is almost six feet tall.
    0:50:10 And by the way, her husband’s even bigger.
    0:50:13 You don’t mess with the tarloves.
    0:50:15 Jess, stay safe. – No, large people.
    0:50:18 – Enjoy your evening on Fox.
    0:50:21 Watch cure videos or REM or Tom Petty.
    0:50:24 If things get really scary, I promise it’ll calm you down.
    0:50:25 – Happy voting.
    0:50:28 – Happy voting where this will still be America.
    0:50:29 All right, Jess.
    0:50:30 – Probably.
    0:50:32 – Probably, America-ish.
    0:50:34 (upbeat music)
    0:50:37 (upbeat music)

    Scott Galloway and Jessica Tarlov dive into the Election Day buzz and what to watch as the results start rolling in. They’ll break down the final campaign twists, the surprising Ann Selzer Iowa poll, weigh in on which battleground states might tip the scales, and explore potential legal battles that could unfold.

    Follow Jessica Tarlov, @JessicaTarlov

    Follow Prof G, @profgalloway.

    Learn more about your ad choices. Visit podcastchoices.com/adchoices

  • Prof G Markets: Meta’s AI Promise, Microsoft’s Disappointing Beat & Why Google Should Spin Youtube

    AI transcript
    0:00:04 Support for PropG comes from BetterHelp. What comes to mind when you hear the word gratitude?
    0:00:07 Maybe it’s a daily practice or maybe it feels hard to be grateful right now.
    0:00:10 Don’t forget to give yourself some thanks by investing in your well-being.
    0:00:14 BetterHelp is the largest online therapy provider in the world connecting you to qualified
    0:00:20 professionals via phone, video, or message chat. Let the gratitude flow with BetterHelp. You can
    0:00:30 visit BetterHelp.com/PropG today to get 10% off your first month. That’s BetterHelp/HELP.com/PropG.
    0:00:35 Support for this show comes from Constant Contact. If you struggle just to get your customers to
    0:00:42 notice you, Constant Contact has what you need to grab their attention. Constant Contact’s award-winning
    0:00:47 marketing platform offers all the automation, integration, and reporting tools that get your
    0:00:52 marketing running seamlessly, all backed by their expert live customer support.
    0:01:00 It’s time to get going and growing with Constant Contact today. Ready, set, grow. Go to Constant
    0:01:08 Contact.ca and start your free trial today. Go to Constant Contact.ca for your free trial. Constant
    0:01:20 Contact.ca. Thumbtack presents the ins and outs of caring for your home. Out, procrastination,
    0:01:26 putting it off, kicking the can down the road. In, plans and guides that make it easy
    0:01:36 to get home projects done. Out, carpet in the bathroom, like why. In, knowing what to do,
    0:01:44 when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today.
    0:01:52 Today’s number, $20,000. That’s how much Russia has found Google for blocking its news channels
    0:01:59 on YouTube. A sexual predator, a racist, and a Russian spy walk into a bar, Ed. The bartender
    0:02:16 says, “What can I get you, President Trump?” Boom, a little election humor there. We’re going to
    0:02:21 have us election. We’ll count some votes, says James Carvel. That guy’s got to be like 110.
    0:02:25 DLSM. That guy’s, that guy, I like him. Do you like him? Do you like James Carvel?
    0:02:29 I think I prefer your impression of him. I think that’s sort of my highlight so far.
    0:02:34 I appreciate that. It must be bonus season. Someone’s kissing someone’s ass. Hello,
    0:02:41 plucker up, you little podcast co-host bitch. Today, we’re discussing earnings from Google,
    0:02:48 Microsoft, and Meta. But first, here with the news is PropG analyst Ed Elson. Ed,
    0:02:50 what is the good word? How are you? I’m doing very well.
    0:02:57 I didn’t know that 20 decillion was a number, but I looked into it. It’s 20 trillion times a
    0:03:04 trillion times a billion, and the global GDP is 100 trillion. So, I should put it into perspective.
    0:03:08 It just shows you the Russians have their head screwed on straight. That’s what I’ll say about
    0:03:12 that. That’s actually what our producer, Claire, requested as a bonus for managing
    0:03:15 young irresponsible podcasters. That’s right.
    0:03:20 We can’t quite get there. This is a profitable business, but no. I had never heard the term
    0:03:24 “decillion” either. Where are you at? Are you in New York? I’m in New York, as always.
    0:03:29 We’re past Halloween. I need more banter, pretend I’m interested in your life. What are you doing
    0:03:33 for Thanksgiving? I haven’t made a Thanksgiving plan yet. I know what that’s like. It’s okay,
    0:03:37 those soldiers. Things will get better. I could go back to London, but it’s kind of weird to
    0:03:42 celebrate Thanksgiving in London. It’s not really… Yeah, they don’t have Thanksgiving. We left them.
    0:03:46 Yeah, exactly. What are you doing with Thanksgiving? Are you going to celebrate now you live in
    0:03:51 London? No, I’m doing my world tour. I’m back. I got back to London yesterday, and in two weeks,
    0:03:59 I had to New York for a speaking gig, then to Los Cabos for Baja Summit, where I’m speaking,
    0:04:03 and talking about vertical farming, and doing mushroom chocolate at night, and listening to
    0:04:09 some DJ who supposedly is hot. Then I got to Vegas, or I got LA for another writer’s room,
    0:04:14 because I don’t know if you’ve heard them working on an original scripted drama for Netflix.
    0:04:21 So, what do you do in the writer’s room? Do you shout over them at things they’re doing wrong,
    0:04:26 or how does it work? No, it’s the guy, the showrunner, and the lead writer will say, “Well,
    0:04:31 what do you think, Scott?” And I’ll say, “No, they would never say that, even though I’m not listening.
    0:04:36 I just pretend that what they’re saying is unrealistic.” Okay, so I’m kind of on the right
    0:04:40 track. I’m supposed to be the person that puts you in the room that makes it feel authentic,
    0:04:45 and I’m supposed to be the person that understands these people, which is kind of comical.
    0:04:49 But yeah, it’s fun. It sounds very fun. You don’t actually have to do the writing,
    0:04:55 you just kind of like opine on what’s happening. You know me, I don’t like to actually work.
    0:05:03 There’s no real work involved in this whole Prop G enterprise for the Prop G. It’s actually a lot
    0:05:08 of fun. I get to envision scenes, and I’m working with this really talented guy named Scott Burns,
    0:05:15 and Meteoraz, and all these super talented people. So far, we’re in the honeymoon period. We’ll see.
    0:05:17 Sounds like the best job ever.
    0:05:19 All right, enough of that shit. Ed, stop delaying. Get to the news.
    0:05:23 Well, before we get started, just a quick reminder to subscribe to Prop G Markets
    0:05:27 on its dedicated feed. Type in “Prop G Markets.” Wherever you get your podcasts,
    0:05:33 hit follow, and tune in to our interview with Anthony Scaramucci on Thursday. That interview
    0:05:37 will only be available on the dedicated feed. And now let’s start with our weekly review of
    0:05:50 market vitals. The S&P 500 declined, the dollar fell, Bitcoin rose, and the yield on 10-year
    0:05:56 treasuries increased, shifting to the headlines. US GDP grew 2.8% in the third quarter. That was
    0:06:01 slightly slower than the previous quarter, and just below expectations. However, economists
    0:06:06 were largely encouraged by the growth, driven by strong consumer spending on goods.
    0:06:08 Reddit turned a profit for the first time ever,
    0:06:13 with revenue reaching almost $350 million in the third quarter. That’s up 68%
    0:06:18 from a year earlier. The company also reached nearly 100 million daily users,
    0:06:24 and those strong earnings sent shares up more than 40%. Shares and drugmaker Eli Lilly fell
    0:06:29 more than 6% after its third quarter profit and revenue missed analyst expectations.
    0:06:34 The company also reported disappointing sales of its weight loss and diabetes drugs.
    0:06:40 And finally, Elon Musk’s artificial intelligence startup XAI is in talks for a funding round
    0:06:45 that would value the company at $40 billion. That’s nearly doubled the valuation from its
    0:06:51 previous round. Your thoughts, starting with this national economic data GDP growth in America,
    0:06:58 2.8% in Q3. A GDP number doesn’t mean a lot unless it has a benchmark. So just some benchmarks
    0:07:05 there. Japan’s annual GDP growth was up 0.3%. So we’re growing nine times faster than Japan.
    0:07:13 France up 1.1% and Canada up 1.3%. I mean, this is just the economy here. It’s just really striking
    0:07:17 to listen to these kind of person on the street interviews about how people feel about the economy.
    0:07:23 It’s so obvious that there’s kind of a vibe session, as Kyle Scanlon called it, or people,
    0:07:27 again, have this habit of crediting their character and their grip for the raises and blaming
    0:07:32 everyone else or blaming the government for whatever price hikes there are. But our growth is
    0:07:39 impressive. And 2.8% may not seem a lot, but what that means is about every 25 or 27 years,
    0:07:45 the size of the American economy would double. In addition, we have this new inflation data that
    0:07:52 just came out. It’s down to 2.1%. In other words, inflation has officially been dealt with. Meanwhile,
    0:07:56 you look at other developed nations that have struggled with not only higher inflation than we
    0:08:02 had, but also longer inflation. So it sort of makes the case, or not sort of, it does make
    0:08:07 the case for Kamala Harris. If you believe that Kamala Harris is just a continuation of the current
    0:08:13 administration, and if you care about the economy, then this is a big reason to vote for Kamala Harris.
    0:08:20 But if you’ve made this point before, she should be making a way stronger argument about how she’s
    0:08:25 sort of the economy vote. If you care about the economy, you should be voting for Kamala Harris.
    0:08:30 It hasn’t really resonated. But for those of us that care about statistics, that care about
    0:08:34 data, what the data is actually telling us. And when you look at the U.S. compared to other
    0:08:41 nations that have struggled with problems way worse than ours, the answer is pretty clear.
    0:08:44 Statistically speaking, Kamala Harris should be your answer.
    0:08:48 I so badly want to be head of comms for like 11 days for the Harris campaign.
    0:08:50 I’ve heard people saying you should be, by the way.
    0:08:53 I just think she should have in her back pocket. Every time someone starts complaining about the
    0:08:59 economy, saying the economy is saying, okay, Sean Hannity, there’s 190 sovereign nations,
    0:09:03 you’re an intelligent guy. What economy globally is stronger than ours right now?
    0:09:09 Name it. Instead, they always go to this democratic self-hate of,
    0:09:12 I know things are tough out there and we have work to do. It should be,
    0:09:16 bitch, we are on fucking fire. Get your head out of your ass.
    0:09:21 Anyways, okay, Reddit, why don’t I listen to my own advice? I bought some stock here,
    0:09:28 but not enough. I believe the stock is now at about triple where it priced in its IPO about
    0:09:32 two months ago. Can I ask how much you bought? You can ask. May you answer.
    0:09:39 I think I bought about $3 million for the stock, but I paired some of it, so I don’t own nearly as
    0:09:44 much as I’d hoped, but I’ve done very well. But it pops so big the first day, I trimmed some of my
    0:09:50 holdings and I just didn’t listen to myself. I knew this thing. I still think it has more room to run.
    0:09:57 Anyways, its revenue up 68% year on year. Daily users is up 47%. They’re going global. They’re
    0:10:02 being really smart. They’ve translated their posts via AI in the French, Spanish, Portuguese,
    0:10:05 and German and its international daily active unique visitors increased 44%.
    0:10:11 Which was huge and it’s just such a simple innovation. It’s such a great use case for AI,
    0:10:19 just simply translating the language of your content, but it’s so, so effective. It essentially
    0:10:24 just 10X is your total addressable market. And that is what we’re doing, or at least we’re trying
    0:10:31 to do it. We’re using AI to translate this podcast into Spanish and Portuguese at the moment.
    0:10:49 But I think this is something that everyone in content should be looking at. How can we figure
    0:10:55 out a way to just overnight flip a switch and make this all available to the 8 billion people
    0:11:01 across the entire globe? It’s just a really quick and nice way to just skyrocket your total
    0:11:06 addressable market. So that would be the first thing that I would commend Reddit on.
    0:11:11 The second key driver of their growth actually was not intentional, but it’s very interesting.
    0:11:18 And that is Google recently changed the way it ranks search results. So they made this update
    0:11:24 called the hidden gems update. And what they’ve done with the algorithm is they’re now preferencing
    0:11:29 what they call authentic content, which is the content that is generated by users content you
    0:11:35 find on forums and on chat rooms. And so as a result, you will find that Reddit is showing up
    0:11:41 more and more when you search things on Google. It’s also appearing higher in your rankings.
    0:11:47 And here’s a great stat. Reddit is now the sixth most Googled word in the US. So it’s this great
    0:11:53 combination of, you know, this intentional play with AI, but also the market dynamics are shifting
    0:11:58 to Reddit’s benefit. And it’s just, it’s just translated to this explosion
    0:12:02 in the business and in the stock. So incredible quarter for Reddit.
    0:12:07 But when you were talking about flipping a switch and accessing a global market using AI,
    0:12:12 and again, the operative term there was flip a switch and go global. You sound like me and our
    0:12:18 all hands last week, where at that point, the person who runs the company, Catherine Dillon said,
    0:12:22 “Bitch, you translate this shit into Farsi and try and find the equivalent of Zip Recruiter in
    0:12:28 Iran to advertise.” I think it’s not quite flipping a switch is what the pushback I got.
    0:12:33 It’s flipping a million switches. Yeah. It’s, and someone actually has to build
    0:12:38 the switch and manage it while I just, you know, the podcast hosts say, “Flip a switch and let’s go
    0:12:42 global.” This is strategy versus operations. Yeah. This is the difference between being front
    0:12:48 of front of house and back of house, right? So I interviewed the CEO at their annual advertiser
    0:12:54 event and they had big, they had big advertisers in the room. I saw the CMO of Mars, they had the
    0:13:00 biggest media agencies there. It feels to me a little bit like kind of, I don’t know, meta or
    0:13:05 Pinterest or Snap in the early days. One of the reasons I’m going to kind of kiss the ass to the
    0:13:09 CEO, other than he seems like a nice man is I bet my prediction is they’re going to have an
    0:13:14 amazing party at Cannes in the next one or two years. They’re going to decide we need to be,
    0:13:20 you know, stroking the hair of people who we are putting out of business and bring them to some
    0:13:27 great party and get Dua Lipa or Bad Bunny or somebody. Anyways, we’re going to the Red
    0:13:31 and Beach party. That’s what I take away from all of this. I can’t wait. I’m waiting for my
    0:13:38 invite. Let’s move on to Eli Lilly, as many of our listeners probably know. Eli Lilly sells Zep
    0:13:45 bound and Munjaro, which are these GLP1 drugs. They are the alternatives to Ozempic and Wagovi,
    0:13:49 and it’s not selling as much as people had thought, or at least that Wall Street had thought,
    0:13:54 and the obvious question is, of course, why? What is going wrong? Now, what’s interesting is that
    0:14:00 the CEO’s answer to that question was that there isn’t a problem with demand, but there is a problem
    0:14:07 with supply. So supposedly the suppliers of the inventory for these drugs, those suppliers cut
    0:14:14 down on their stock and it affected Eli Lilly’s ability to get the drugs out. But as a Barclays
    0:14:21 analyst pointed out, if that’s true, that could only have accounted for around 20% of that drop
    0:14:27 off in revenue. In other words, there must be something else afoot here, something else is
    0:14:36 going wrong in the Eli Lilly GLP1 drug story. And it can’t just be this sort of chokehold on
    0:14:42 inventory, and certainly Wall Street doesn’t believe that story either. So I have a few
    0:14:46 thoughts of my own as to what might be going on, but I will throw it back to you. What do you think
    0:14:53 could be the problem at Eli Lilly that the CEO did a bad job of explaining or at least won’t tell us?
    0:14:59 I wonder if we keep hearing about all these compounded GLP1 producers being able to sell,
    0:15:04 I don’t know if you call it off market, but there’s a bit of a glitch in the matrix or a loophole
    0:15:09 where if a product is sold out, you can build almost like a generic version of it that costs
    0:15:16 much less. I got to think that that’s denting demand a little bit. And I would think that in
    0:15:22 not only that, you have a lot of these kind of upstarts are sort of scrappy and maybe don’t
    0:15:27 take as institutional approach, but are great marketers and understand new mediums. So I wonder
    0:15:33 if it’s some of the new guys or these compounded GLP1 producers maybe slowed their growth. What
    0:15:37 are your thoughts? I was thinking that too. And if you look at Hymns, which we have discussed
    0:15:43 before, they have been getting into the GLP1 game. Yes, the compounded version, their revenue
    0:15:49 increased 52% last quarter. And a large part of that was their weight loss drug business.
    0:15:53 And there are several other companies that are offering these compound alternatives.
    0:15:58 It’s sort of becoming a growing space. And I think it is possible that this
    0:16:05 duopoly that we’ve seen on semi-glutide that has been owned by Novo Nordisk and by Eli Lilly,
    0:16:10 it could be a little more fragile than we think. The other thing I think is worth mentioning, which
    0:16:16 one of our team members, Jessica Lang, points it out. And it’s a simple but important point is
    0:16:23 when you think of GLP1s, Manjaro and Zep bound do not come to mind. The two names that come to
    0:16:30 mind are Osempic and Wagovi. And so it could be just a simple brand recognition problem that these
    0:16:35 products just aren’t present in the public discourse enough. If you’ve been watching the
    0:16:42 World Series recently, you will likely have seen this Wagovi ad over and over this new Wagovi jingle
    0:16:46 that is probably stuck in a lot of people’s heads right now. So I think the other explanation here
    0:16:51 could be a very simple issue. It’s just a marketing problem and a brand awareness problem.
    0:16:55 We know what Zep bound and Manjaro is because we study this stuff for a living,
    0:16:59 but for the average American, you just think Osempic and Wagovi and you probably don’t even
    0:17:04 know what GLP1 is either. It’s interesting. I agree with you. I usually don’t like the idea of
    0:17:09 typically when I walk into a brand and they say they want to show me a brand campaign and they’re
    0:17:13 going to spend money on advertising. I usually say, well, if you’re spending a lot of money on
    0:17:17 advertising, usually you have somebody who wants to hang out with really cool, interesting people,
    0:17:22 which ad agency people are, or you’re out of ideas because the companies are the best products,
    0:17:26 don’t need a lot of brand marketing. In this case, I think an awareness campaign,
    0:17:32 exactly how you said around Zep bound and Manjaro. Awesome. Manjaro is awesome. If I came back and
    0:17:38 in my next life as an MMA fighter, I want to be called Manjaro. I think that’s a badass name.
    0:17:42 It’s a really cool name, Manjaro. Anyway, but I agree with you. I think they need fire up the
    0:17:47 ad budgets. Yeah, it gets some awareness out of that. There’s so much money on the line here.
    0:17:54 Also, supposedly there’s a lack of scarcity that finally there’s enough production here to meet
    0:17:59 demand. I wonder what’s going to happen though when it reaches into the markets it should be in.
    0:18:04 I’m just such a huge fan of this technology. Speaking of which, let’s bring this back to me,
    0:18:08 Ed. I’m doing this NAD treatment. Have you heard of this? Only from you mentioning it last week.
    0:18:15 Ed, that’s it. I’m fine. I’ll leave. No desilient dollar bonus for you.
    0:18:18 I’ll make my way out. Just Claire’s getting a desilient dollars.
    0:18:25 Anyways, this NAD stuff is really, really powerful, but I wonder if it has a similar compound,
    0:18:34 this GLP-1, because I have noticed. I’m losing my taste for the sauce. I’m going to fit right
    0:18:38 into Baja Summit. I told you about Summit last year. They all take drugs, but they don’t drink.
    0:18:43 I would bet, going back to Eli Lilly, I apologize, I’m all over the place. This fucking NAD is
    0:18:49 supposed to give me focus. Maybe it isn’t working. I think this is probably a buying opportunity.
    0:18:56 I think anyone in this market with two great brands, or one great brand, Monjato, and ZepBound,
    0:19:02 that’s a terrible, you’re bound for Zep. Is that bound? That sounds awful. That’s like some
    0:19:07 rock climbers started some bad ropes company or something. I think other than the CEO making
    0:19:16 lame excuses, I’d say on this one, buy the debt. Our final headline is XAI, which Elon, this is
    0:19:25 Elon’s AI company, which he is supposedly trying to raise around at a $40 billion valuation.
    0:19:31 Just a reminder of what this company is. People may remember the premise of this company was to
    0:19:39 create a competitor to chat GPT that was “more truth seeking.” For a while, Elon was calling it
    0:19:47 kind of jokingly “truth GPT.” He saw how successful chat GPT had become, and he wanted to make
    0:19:54 a competitor that was also less woke pretty much. XAI did build that product, and the product is
    0:20:01 called GROC. Many people may have heard of it, and it’s available to all paid users of the X
    0:20:06 platform, formerly known as Twitter. I’ve used it. It’s fine. There was a period where it tried to
    0:20:14 be anti-woke and funny, and it felt like a not very funny guy who’s trying to just crack jokes
    0:20:19 at every second. It wasn’t a great product. Yeah, it’s the Tony Hengecliffe of LLMs.
    0:20:25 It’s exactly right, and they fall flat. I’ll get your reactions to XAI in this
    0:20:29 funding round. There are a few more details we can go into, but what are your thoughts on this
    0:20:37 round? I think this is Musk’s next opportunity to turn $40 billion into 10. My sense is this
    0:20:44 is now a distant fourth or fifth in the LLM market. He did some sleight of hand trying to give,
    0:20:51 take the rights to the data I think of Twitter and spin out XAI, and he got a disproportionate
    0:20:54 amount of the firm. I would have gone apeshit crazy if I was a shareholder in Twitter,
    0:21:01 but it’ll GROC right now is a distant fourth, fifth, or sixth, trying to trade at the same
    0:21:07 valuation as Anthropic, and that’s the analog here. I would imagine that Anthropic has dramatically
    0:21:15 more traffic, revenues, better technology, etc. And what they keep leaking is that Jensen Huang did
    0:21:21 say that it’s easily the fastest supercomputer on the planet. XAI has built its own data center,
    0:21:25 but I’m not, I’m not sure if that ends up being much of a competitive advantage.
    0:21:30 Anyways, I think that’s an important point is, is that a competitive advantage? And
    0:21:36 when I look at XAI, it’s like there are three main differences that make it different from other
    0:21:42 AI companies. The first is that Elon Musk is leading. So that’s a big deal. It means you can
    0:21:48 raise a bunch of money. The second is, as you said, they’re building their own data centers,
    0:21:54 and that’s what sets it apart from open AI. Open AI does not own any data centers. Instead,
    0:21:59 they essentially rent their compute from Microsoft, and that’s why they have that partnership.
    0:22:06 And then the third big difference is that XAI is building its own frontier models. And that’s
    0:22:12 where it’s similar to open AI, but not similar to a company like Perplexity, which is building
    0:22:17 models on top of the models that are built by other companies like open AI. So in other words,
    0:22:22 their sort of strategic differentiation is that they want to own everything that they create.
    0:22:28 They want to be a truly independent AI company, which is a little rare these days because it’s
    0:22:33 developed into this massive supply chain where you have the chip manufacturers
    0:22:38 selling to the data centers and the data centers selling the compute to the model makers and the
    0:22:44 model makers selling their models to the app makers. It’s a big supply chain. And XAI has decided
    0:22:48 we’re just going to own all of it ourselves. I just don’t know if XAI is going to have the
    0:22:52 capital. They’re starting from less than zero versus everybody else, and they want to raise
    0:22:59 it the same valuation as the number two or the number three player anthropic. So I have a bias
    0:23:03 because I’m not a fan of Musk, but on just a straight valuation standpoint, this feels to me
    0:23:10 like a bad deal. Yeah. I mean, it sounds like the Elon Musk premium, but it’s why he still deserves
    0:23:16 a premium like this to me is beyond me. The fact that he’s destroyed 80% of the market value of
    0:23:23 Twitter, that was his last venture. I mean, it’s crazy. It’s loco. He’s gone mungado on us.
    0:23:30 We’ll be right back after the break with a look at big tech earnings. If you’re enjoying the show
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    0:25:17 government of Canada. We’re back with Prof. G. Mockets. Most of the magnificent seven reported
    0:25:22 earnings last week bringing AI demand and spending into sharper focus. Google and Microsoft both
    0:25:29 reported cloud revenue growth above 30% beating expectations. But while Google stock rose,
    0:25:34 Microsoft’s fell as the company advised its overall revenue growth would slow in the
    0:25:40 current quarter. Meanwhile, Metastock also fell after the company missed expectations on user growth
    0:25:48 and warned that its AI expenditures would continue to increase in 2025. So I think let’s just start
    0:25:53 here. A lot of tech earnings telling slightly different stories. Let’s just start with what
    0:26:00 Wall Street thought about these earnings. So for Google, Wall Street was very happy. Revenue grew
    0:26:07 15%. Cloud revenue skyrocketed and the stock rose 4%. I think the main story with Google is there
    0:26:12 was nothing that you could really fault the company for in that earnings report. Everything was going
    0:26:18 well. Microsoft and Meta on the other hand, Wall Street was not so happy with. It’s a very
    0:26:23 similar story that we’ve seen before in tech, which is the top and bottom lines were very
    0:26:31 strong. They beat expectations at both companies. But there was just one tiny little pimple on the
    0:26:36 earnings report for both of them. And for Microsoft, it was that their guidance was a little bit soft,
    0:26:42 not as strong as Wall Street wanted. And for Meta, the user growth was slightly weaker than
    0:26:50 expected. 3.29 billion active users versus 3.31 billion expected. I should remind you that’s
    0:26:55 daily active users. So it’s still pretty incredible. As a result, Microsoft stock fell 4%
    0:27:02 and Meta stock fell 3%. So I think the summary with these earnings here is that it’s very strong
    0:27:08 overall. But again, incredibly high expectations for these companies. Let’s just start with your
    0:27:12 headline reactions to the tech earnings that have come in this week. What you said
    0:27:19 was really prescient and insightful a few months ago. And that is the expectations are now that
    0:27:26 you’re going to blow away expectations. So Meta actually, the revenue earnings beat expectations,
    0:27:32 increasing 19 and 35% respectively. But investors were disappointed by weaker than expected daily
    0:27:38 active user growth. And also, I think the thing that freaked everybody out is when Zuckerberg
    0:27:43 wasn’t threatening to spend tens of billions of dollars and mixed reality headsets. He was
    0:27:50 promising and he did it. And he kept spending well beyond any evidence that this was working.
    0:27:55 And when Zuckerberg says, “No, we’re going in on AI and get ready, folks, hold on to your hats,”
    0:28:02 it kind of spooked, I think as investors a little bit, just because relative to the earnings and
    0:28:08 the revenue beat, the revenue and earnings were amazing here. And at the same time,
    0:28:13 let’s go to the other end of the spectrum. Everyone’s sort of waiting and anticipating
    0:28:21 Snap to start a death rattle. And even though their sales jumped 15%, not as much as the other guys,
    0:28:30 their stock was up 10% because the expectation, when people listen to a Meta call, they’re waiting
    0:28:35 to see just how amazing it is. When people listen to a Snap earnings call, they’re kind of a little
    0:28:41 nervous. Like, is this the quarter that Snap announces that Meta is just putting them out of
    0:28:47 business? And the expectations here have gotten so crazy. And I know I’m jumping around a lot,
    0:28:52 but let’s talk a little bit about Microsoft. They also beat revenue and earnings expectations.
    0:28:59 The stock was off 4%. And after hours trading on weaker guidance, good CEOs, sandbag guidance.
    0:29:04 You always want, in my opinion, under promise and over deliver. And when you start getting desperate
    0:29:08 or you’re worried about losing your job, you start over promising and under delivering their total
    0:29:16 revenue increase. Get this at 16% off a huge number. That means that they have, they found
    0:29:20 another eight or $10 billion per quarter in incremental revenue. And also the revenue mix
    0:29:28 is getting more solid because their cloud offering Azure revenues were up 33%. And that is a business
    0:29:36 with incredible margins. And 12 points of growth came from AI services. So in sum, this was just,
    0:29:44 this was just striking. And the only wrinkle here, the thing I would offer that I noticed,
    0:29:50 and we’ve been talking about this a lot, is that if I were to ask you, what comes to mind when
    0:29:56 I think of the, when I ask you, who is the leader in the streaming market? Who comes to mind?
    0:30:01 Well, you know, you know my real answer, but I think the average person would say Netflix.
    0:30:09 That’s right. And yeah, but, but it isn’t right. It’s YouTube. And YouTube’s combined ad and
    0:30:15 subscription revenue over the past four quarters has surpassed $50 billion. So Netflix is at $37
    0:30:22 billion over the same period over the last four quarters. So, so YouTube is a bigger streaming
    0:30:26 network, bigger revenue. I’d be curious what the growth rate is there. I’m not sure they break it
    0:30:32 out. But if you applied the same multiple to YouTube, you’d have a half a trillion dollar
    0:30:36 market cap company. And I wonder if there’s opportunity for Alphabet to cut a deal with
    0:30:42 the DOJ and among other things in their remedy trial, say, look, what if we spin YouTube? But
    0:30:48 across all of these folks, you know, whether it was Reddit, which looks like it’s becoming a truly
    0:30:55 big tech company, Meta, all of them, Snap, showing it, we’re still here. Snap’s like,
    0:31:00 hey, don’t forget us. We’re still here. We’re still growing. We’re still doing really well.
    0:31:05 And the other guys, the big guys, the Alphabets, the Metas of the world are just,
    0:31:11 you know, still on fire. Yeah, a lot, a lot there. We’ll start with YouTube. I just want to
    0:31:18 reemphasize that number. You said $50 billion in revenue in the past four quarters compared to
    0:31:27 Netflix at $37 billion. With the same multiple, YouTube would be a half a trillion dollar company
    0:31:32 in market cap. It would probably be higher given the margins and given the growth rate.
    0:31:37 But if it were broken up into its own company, which you have just suggested,
    0:31:41 just want to point out, it would be one of the top 20 most valuable companies in the world.
    0:31:46 It would be more valuable than Oracle. It would be more valuable than Mastercard. It would be
    0:31:52 more valuable than Johnson Johnson. And yes, of course, it would be more valuable than Netflix.
    0:32:00 So I mean, we’ve discussed why we believe YouTube is basically the most underrated asset in the
    0:32:04 market right now. I think this should really drive it home for people. It’s something that
    0:32:09 people don’t seem to talk about that much. And I think to your point, it’s a little bit of the
    0:32:14 conglomerate tax. It sort of gets lost in the noise because of all of the other things that
    0:32:20 Google is doing. But this is just a juggernaut in the entertainment space. I am just fascinated
    0:32:25 by this business of YouTube and they continue to crush it. One of the other things you pointed
    0:32:35 out there is the idea that Meta, they spent really big on the Metaverse and it freaked everyone out.
    0:32:40 And now they’re spending really big on AI. And so the numbers are,
    0:32:47 Meta is raising its Carpex forecast for 2024 to between $38 billion and $40 billion. And that is
    0:32:53 slightly freaking the market out. They don’t love how much that expense line is going to grow.
    0:32:59 Having said that, though, all the other tech companies are doing it. So over at Google,
    0:33:06 their Carpex rose 62% from a year ago to $13 billion. Microsoft is doing it too.
    0:33:12 Microsoft’s Carpex doubled from last year to $20 billion. And this is just for the quarter.
    0:33:16 The ultimate business strategy has become capital as a weapon. Mark Zuckerberg goes,
    0:33:21 we have access to cheap capital, so I’m going to outspend you. I mean, there’s kind of three or
    0:33:28 four. No one can keep up with these guys except each other. The biggest companies in the world
    0:33:33 that aren’t big tech can’t make these types of investments any longer. They’re spending more
    0:33:38 money on GPUs and exxon spent on oil exploration at their peak.
    0:33:44 I mean, so just some data here. Microsoft, Meta and Alphabet will spend more than $150
    0:33:53 billion on Carpex in 2024. And more importantly, Microsoft, Meta, Alphabet and Amazon account for
    0:34:01 roughly 40% of NVIDIA sales. So what we’re seeing here is a dynamic where NVIDIA is pretty much
    0:34:08 propping up the stock market. We’ve all kind of identified that. And NVIDIA’s entire top line
    0:34:14 is being propped up by the Carpex spend of Microsoft, Meta, Alphabet and Amazon. So in a way,
    0:34:21 that Carpex number is the most important number in the entire global stock market right now. We
    0:34:28 should all care a lot about how much they’re spending. But as you mentioned, the competitive
    0:34:34 aspects to this, the idea that they’re all ramping up spending, I wonder to what extent this is
    0:34:41 becoming a little bit of a big dick contest. Where if you’re if you’re Mark Zuckerberg and you’re
    0:34:47 seeing, you know, you’re seeing Sundar Pichai invest billions and billions into this space and you’ve
    0:34:52 decided to get into the space too. I wonder to what extent they’re just going to start outbidding
    0:34:57 each other, not because it necessarily makes sense for the business, but because they don’t want to be
    0:35:02 caught out and they don’t want to look to the world like the loser or like the coward who wasn’t
    0:35:08 down to double down on AI. And, you know, maybe I’m not giving them enough credit,
    0:35:13 but I could certainly see if I were in their position, how I could get caught in that dynamic.
    0:35:17 Google’s doing it, Microsoft is doing it, so we better do it too.
    0:35:25 Well, I think correctly, in hindsight, it looks like the stimulus plan during COVID that the Fed
    0:35:29 and the White House overdid it. They spent more money than was needed.
    0:35:34 And Janet Yellen, when faced with that question, did you overdo it? She said, we decided. She said,
    0:35:40 yeah, we probably did. But at the time, the analysis was it’s much riskier to underdo it than
    0:35:47 overdo it. And I think that’s how these guys are approaching AI. And that is, if they overdo it,
    0:35:53 they spend too much. That’s not the same risk as being the company, one of the big tech companies
    0:35:59 that had all of the assets, all of the IP, all the customer interface, but got bested and saw
    0:36:03 their stock lag everyone else’s because they underinvested in what appears to be the most
    0:36:09 seminal technology trend of the last 20 years. So, I got to imagine that they’re like, okay,
    0:36:15 we need 10 billion. The range of requisite capex to meet our plans is somewhere between,
    0:36:21 I don’t know, call it 20 and 30 billion. You got to think the CEO says, with a stock at an all-time
    0:36:28 high with access to cheap capital, I’m not going to be the CEO that missed on AI. You say 20 to
    0:36:34 30 billion, here’s 32. We’ll be right back. And if you’re enjoying the show so far, hit follow and
    0:36:53 leave us a review on ProfG Markets. This episode is brought to you by A Real Pain. From Searchlight
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    0:38:33 We’re back with Prof2Markets. Meta’s revenue jumped 19% to $40.6 billion. That’s its record revenue.
    0:38:37 Staggering number. And you mentioned earlier about revenue mix.
    0:38:44 The point that Microsoft has done a really good job of diversifying its revenue, which makes it
    0:38:49 that revenue a little bit more stable. They’re able to weather a storm. It’s a great reason
    0:38:55 to diversify your revenue. Just want to point out this one start about Meta. 96% of their revenue
    0:39:05 still comes from advertising. So they’re not in a very strong position from a longevity perspective,
    0:39:12 but it sort of highlights just what a juggernaut this advertising business is. The fact that
    0:39:17 this company is one of the top 10 most valuable companies in the world, and it’s all just from
    0:39:21 all of that advertising, you talked about how they’ve been getting into AI, which has been
    0:39:27 massively increasing their ability to accumulate users and also monetize
    0:39:32 those users. I’m just amazed that Meta is worth this much and making this much money,
    0:39:36 and it’s still just a pure play ad business. I just thought that was quite fascinating.
    0:39:42 I mean, these companies combined probably have ad driven revenue growth of somewhere between,
    0:39:49 I don’t know, $20 billion and $40 billion in incremental ad growth. I had dinner the other
    0:39:57 a week ago with this iconic broadcast anchor, and this is someone who likely,
    0:40:00 I don’t know what this person makes, but I imagine it’s tens of millions of dollars,
    0:40:04 household name, outstanding or what they do. You have to tell us.
    0:40:08 Now, I can’t in this instance because we’re good, good friends and I don’t like to
    0:40:13 prostitute my relationships. I’m imagining it’s Anderson Cooper and I’ll just let you not comment.
    0:40:17 What I will say is it wasn’t Anderson Cooper. I have a second friend. I have a second friend
    0:40:21 now in the media ecosystem. Anyways. Oh, Tucker Coulson. Got it. Okay.
    0:40:28 Me and Tucky. Yeah, we fisted each other and we were screaming out the ghost of Rick Santorum.
    0:40:34 I don’t know where I got that name. That’s an image. That’s an image. Anyways,
    0:40:39 and he said that every contract renewal that’s coming up across the biggest anchors,
    0:40:44 the biggest stars in broadcast television, the conversations are going something like
    0:40:49 this. As you know, it’s a stressed ecosystem. We know you are making 10 million a year. Now,
    0:40:55 we’re going to pay you three and a half and it’s directly correlated to these earnings
    0:41:01 because the economy is growing 3% a year and all of these companies are growing 18%.
    0:41:07 Ad spending is not up 18%. This has become a bit of a zero-sum game and that is,
    0:41:12 say ad spending is up because it’s a strong economy. Say, okay, fine, it’s up 5%.
    0:41:18 Ad spending is an up 15. So that incremental 10% is coming from somewhere else and I can tell you
    0:41:22 where it’s coming from. It’s coming from, generally speaking, ad-supported media that
    0:41:30 isn’t one of these guys. Whereas if you hosted the ultimate morning show program,
    0:41:37 and they were just printing money, they could pay Hoda 7 or 10 million a year and now they’re like,
    0:41:43 Hoda, we love you, but revenues are down 30%, profits are down 60%. We’re going to pay a
    0:41:48 two-man and it’s like, fuck that, I’ll just go drink white wine all day. Also, just more generally
    0:41:55 speaking, I have spoken to two individuals. I like to think I’m trying to be good about my
    0:42:00 word and I’m coaching young men. I’ve heard I’ve had two men reach out to me and ask to speak to
    0:42:06 me and they’ve both been men who are my age, who are both very successful in the media market
    0:42:10 and they’ve either quit or been laid off and they have no idea what to do right now.
    0:42:16 Because the motion picture and television market in Los Angeles and generally speaking,
    0:42:21 the media market is really strained if you’re not working for one of a handful of companies that
    0:42:28 are just killing it. And it strikes me that these folks haven’t connected the dots. There is real
    0:42:34 pain on the other side of these revenue numbers and that is it is a terrible time to be a CBS
    0:42:42 or an MTV. Does anyone even remember what MTV is? Newspaper revenue is off 80% in the last 30 years.
    0:42:50 Billboard’s drive time, if it wasn’t for the election, local news stations would be just gone.
    0:42:55 Yeah, that’s a great point. And you think about the other beneficiaries of that revenue growth,
    0:43:01 where is that advertising going? It’s going to the people who are creating content on Instagram
    0:43:06 and on TikTok and on YouTube. Those are the beneficiaries. Granted, they’re not getting
    0:43:11 multi-million dollar contracts, but the reason you’re seeing those millions getting shaved off
    0:43:16 of the Anderson Coopers of the world is because frankly, it’s going to the Scott Galloway’s of
    0:43:21 the world and people are a lot less famous than you. People who are creating content on Instagram,
    0:43:26 who are making videos, who are commentating on things in the news. There are thousands,
    0:43:32 probably millions of these people out there who are making a living and who are making real money
    0:43:38 by creating on the digital platforms. And what I just can’t wrap my head around is how those
    0:43:44 people continue to not be taken seriously by the mainstream media. It’s been almost like
    0:43:49 mainstream media just sort of covers their eyes and pretends like they’re still in their heyday.
    0:43:55 Well, what’s happening is we’re seeing the social media companies having this explosion in growth
    0:43:58 and meanwhile, legacy media is completely drying up.
    0:44:02 Well, it’s really interesting. So election night, and I’m bragging right now, but I was
    0:44:09 asked to appear on a variety of cable networks. They go for 12 hours straight. They have a lot
    0:44:14 of time to fill. So they’re like, “Oh, bring in the guy on young men. Just tell him not to tell
    0:44:19 dick jokes.” So almost every network called and said, “Do you want to come on and election
    0:44:25 night?” And the one I chose, I’ve been going on Amazon with Brian Williams. And that’s kind of
    0:44:30 telling, right? It used to be going on CNN or Fox or CBS or ABC because those are the high
    0:44:35 prestige. Now I’m like, “No, I’m going with the new guy.” And today on Pivot, we interviewed Margaret
    0:44:41 Brennan, who I just think is so talented and sober. And as I was listening to Margaret, I thought,
    0:44:48 she’s going to get hired by YouTuber Amazon and she’s going to be positioned with the right
    0:44:53 technology in the right format in one of these mediums. And she’s going to drive so much more
    0:45:00 economic value for the parent company and herself. And even our little podcast, we just started
    0:45:06 posting our videos on YouTube. We’re now making $40,000 or $50,000 a month in incremental ads
    0:45:12 from YouTube just by putting our stuff on YouTube. Not to mention all the stuff that’s
    0:45:18 happening on Instagram where you’ll post an Instagram reel and it’ll go viral and then you’ll
    0:45:24 get speaking engagement requests. I mean, the flywheel is up and running in social media.
    0:45:29 One of the things I’ve learned over the last 10 years, we’re in an attention-based economy,
    0:45:34 full stop. If you can command attention, you can get revenue. Otherwise, the person running the
    0:45:40 firm should be let go. And what you want to find is companies where there’s a delta between the
    0:45:44 two. So newspapers used to get 30% of the advertising and they were getting 10% of the
    0:45:50 attention. You knew they were in trouble. And the web was getting 30% of time and had 8% advertising.
    0:45:57 You knew those two were going to true up. Right now, the greatest delta in terms of attention
    0:46:06 to revenues is podcasting. Total consumption is up 15 or 20%. And revenues are solid and growing,
    0:46:11 but they’re nowhere near the attention. And in addition, I think if you collapse that with
    0:46:19 the following, and that is, there are very few ways or increasingly fewer ways for an advertiser
    0:46:25 to reach you. You’re the great white rhino for advertisers. And that is at the age of 26,
    0:46:32 you’re what I would actually refer to as stupid. And that is you’re in your mating year. So you’ll
    0:46:39 spend 150 bucks on that stupid crew net shirt you’re wearing. You’ll join Soho House. You’ll
    0:46:44 spend $7 on coffee. You on the other hand would never do any of these things. No, no, I’m much
    0:46:48 more down to earth. I’m much more down. By the way, did I tell you about the global express? I flew
    0:46:56 back here from Miami. Anyways, I’m not nearly as superficial as you are. Anyways, but advertisers
    0:47:00 love young people because they’re stupid. And they’re in their mating years. So they will spend
    0:47:06 a ton of money on high margin products trying to attract a mate. They are the ultimate target.
    0:47:13 And the problem is MSNBC’s average viewer is aged 70. MTV is like 52 or 54.
    0:47:19 And you or in your cohort is listening to podcasts. So you not only have growth and attention,
    0:47:26 but you have growth and attention across a group that is increasingly difficult for advertisers
    0:47:32 to reach. So I think you’re going to see, in one of my predictions, I’m doing predictions that
    0:47:37 I think the podcast revenue is going to grow faster than every digital platform’s revenues,
    0:47:40 maybe with the exception of TikTok who align claim their numbers are lower. But I think you’re
    0:47:48 going to see next year revenues, ad revenues grow 25% plus. I think 2025 is going to be the
    0:47:55 year a podcast busted open by these election or candidate interviews, attention, and advertisers
    0:48:03 are figuring out the media landscape is dramatically shifting under our feet. Let’s take a look at the
    0:48:08 week ahead. We’ll see the Fed’s interest rate decision for November. We’ll also see earnings
    0:48:14 from Palantir, Nova Nordisk, Airbnb, and Paramount. I doubt we will care about any of that
    0:48:19 because we’ll have bigger fish to fry tomorrow. Scott, your predictions.
    0:48:24 Well, like it’s the election, Ed. I’m predicting that Vice President Harris is going to win the
    0:48:32 election. The gambling markets say that it’s two to one in favor of Trump. You correctly pointed
    0:48:38 out that that might be skewed because of these markets overindex young men who are much more
    0:48:42 biased towards Trump. A lot of people think these markets are being manipulated to send a signal
    0:48:48 of confidence around the Trump campaign. I also want to recognize I have huge confirmation bias
    0:48:54 here. I’m very emotionally caught up in this. I could not get over. I was happy to get back to
    0:48:58 London. I don’t know if you’ve noticed it, and maybe you don’t notice it when you’re in boiling
    0:49:06 water, but I cannot get over how tense things are. I wonder, and again, confirmation bias here,
    0:49:13 that people are just fucking exhausted and think, “How can I take some of this temperature down
    0:49:20 and distinct of the policies, distinct of whether perfect is not on the menu?” I think a lot of
    0:49:26 people are going to go, “You know, I just rather not go back to that shit.” Anyways, my prediction
    0:49:33 simply put is that it’s not only going to be a Harris win, but I think it’s going to be a decisive
    0:49:39 win. All of the odds and all of the data say that that’s unlikely. Anyways, in some, I’m predicting
    0:49:43 that in January of 2025, we’re going to inaugurate Vice President Harris.
    0:49:49 People forget how much it sucked, not from a policy perspective, but from just a day-to-day
    0:49:55 discourse perspective. Having that guy plastered over the news, people freaking out about him,
    0:50:03 24/7, every single conversation is about politics and about how the U.S. is in decline. And whether
    0:50:11 or not you believe any of that is true, are you really down for that to just dominate your life
    0:50:20 all day, every day for the next four years? That to me is just, that was the big nightmare of the
    0:50:27 Trump presidency is how I just, we could never escape him. We had four nice years of some kind
    0:50:32 of boring politics, and I really hope that we can have four more of them.
    0:50:36 My favorite thing about Senator Bennett, I did a fundraiser at my place for him,
    0:50:40 and he said, they said, “What would you be like as president?” Someone asked me,
    0:50:43 he’s like, “I’m going to be the president you never hear about.” And I thought,
    0:50:47 Jesus Christ, wouldn’t that be refreshing? I absolutely love that.
    0:50:51 He said, “I want to be the president you don’t think about. I’m going to do the job.
    0:50:55 I’m not going to say incendiary things. I’m not as charismatic as some of these other people.
    0:50:59 I’m just going to be the guy that gets the job done.” Anyways, I hope that the guy that gets the
    0:51:06 job done is a she, and I really hope that when I move back to the U.S., it feels less tense,
    0:51:12 less anxious that we keep this economy going, that young men recognize that their default
    0:51:17 operating system should be one of protection, and that I genuinely do believe that women are
    0:51:25 under threat here, and that men don’t recognize how much this could affect us. So I’m hoping,
    0:51:32 I’m hoping and trusting that some of these things enter people’s brains as they enter
    0:51:35 the voting booth. And I’d also just like to highlight, I acknowledge that a lot of people
    0:51:40 don’t come to this podcast for politics. I endorse Harris, my newsletter, No Mercy, No Mouse.
    0:51:44 We have the greatest number of unsubscribes we’ve ever received, and as I’ve said before,
    0:51:48 there’s no point in having economic security and people who love you unconditionally if you
    0:51:53 can’t speak your mind. And also to all the people who unsubscribe, I just want to tell you a full
    0:51:58 refund is coming your way. Why don’t you read us out, Ed? This episode was produced by Claire Miller
    0:52:02 and engineered by Benjamin Spencer. Our associate producer is Allison Weiss. Mr. Vario is our research
    0:52:07 lead. Jessica Lange is our research associate, Drew Burroughs is our technical director, and
    0:52:11 Catherine Dillon is our executive producer. Thank you for listening to ProfG Markets from
    0:52:16 the Vox Media Podcast Network. Join us on Thursday for our unpack on the election with
    0:52:31 Anthony Scaramucci, only on the ProfG Markets field.
    0:52:57 [Music]

    Follow Prof G Markets:

    Scott and Ed open the show by discussing the U.S.’s GDP growth, Reddit’s earnings, Eli Lilly’s third quarter drug sales, and xAI’s new funding round. Then Scott and Ed break down big tech’s earnings and discuss how the tech companies are using capital as a weapon. They also examine the shifting media landscape and explain why advertisers have been cutting their spending on legacy media. Finally, Scott offers his prediction for the Presidential election. 

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  • First Time Founders with Ed Elson – How Kalshi Made it Legal to Bet on this Election

    AI transcript
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    0:01:59 Scott, we’re two days away from the presidential election.
    0:02:02 I know who you’re voting for, but who do you have your money on?
    0:02:04 I’m actually thinking of going into one of these
    0:02:08 in gambling markets and placing some money on Harris.
    0:02:09 They have 300,000.
    0:02:12 This is where the money and the ground game kicks in.
    0:02:16 They have 300,000 volunteers getting people to the polling
    0:02:19 station, making sure they know where the polling station is,
    0:02:19 banging on doors.
    0:02:21 When you bang on a door and someone says, yes,
    0:02:23 I’m voting for that person, they are much more
    0:02:25 likely to actually go vote.
    0:02:28 Supposedly they have 300,000 people on the ground,
    0:02:30 feet on the street over the next two weeks.
    0:02:34 And estimates are Trump claims he has 50,000, which
    0:02:35 means he probably has 30.
    0:02:37 So I like our ground game.
    0:02:38 I like our choices.
    0:02:40 I recognize I’m hugely biased here.
    0:02:45 But I wonder if people are just sick of the chaos.
    0:02:49 Anyways, I think Harris is going to be our next president.
    0:02:54 [MUSIC PLAYING]
    0:02:55 Welcome to First Time Founders.
    0:02:57 I’m Ed Elson.
    0:03:01 This election is very unique for a lot of reasons.
    0:03:03 But one of them is that for the first time
    0:03:08 in our nation’s history, Americans can bet on it legally.
    0:03:11 My next guest is responsible for that change.
    0:03:15 He created the country’s first CFTC-approved prediction
    0:03:17 market that lets you trade on future events,
    0:03:20 including the election.
    0:03:22 And if you’re a regular consumer of politics,
    0:03:25 you’ve likely heard of this company before.
    0:03:27 This is my conversation with Tarek Mansour,
    0:03:31 co-founder and CEO of Kalshee.
    0:03:33 Tarek Mansour, thank you for joining me.
    0:03:34 Well, thanks for having me.
    0:03:34 I’m excited.
    0:03:36 I’m just going to start with–
    0:03:38 I was driving over here, I was in the Uber over here,
    0:03:40 and I was just scrolling on TikTok.
    0:03:41 Yeah.
    0:03:44 This is 100% true about 20 minutes ago.
    0:03:47 And this was the video that came up.
    0:03:49 I’m just going to show you what this video is.
    0:03:50 Can you see this?
    0:03:51 Yeah, I’m looking and looking.
    0:03:53 Captions, Uber driver kicked us for saying
    0:03:54 he’s going to lose his bet on Trump.
    0:03:56 Uber driver is literally kicking us out
    0:03:58 because we’re not Trump supporters.
    0:03:59 That’s not why I’m kicking you out.
    0:04:01 I’m kicking you up because you make fun of me.
    0:04:03 Because we made fun of you for betting.
    0:04:05 You’re betting while driving.
    0:04:07 Why are you doing that?
    0:04:09 OK, if you want to do it, you’re out.
    0:04:10 You’re out.
    0:04:11 You’re out.
    0:04:13 For people who are not watching on YouTube,
    0:04:18 it is an Uber driver who is betting on Kalshi,
    0:04:21 on Tarek’s platform, on the election,
    0:04:23 on his actual screen on the Tesla,
    0:04:26 and then the passengers are complaining about it,
    0:04:27 and he’s kicking them out.
    0:04:30 Your reactions to that TikTok I saw 20 minutes ago?
    0:04:33 Well, I mean, it’s pretty ridiculous.
    0:04:36 But like, I mean, first of all, don’t bet and drive.
    0:04:40 I mean, you know, so we legalize betting in the US,
    0:04:42 but not betting and driving at the same time.
    0:04:43 That is actually dangerous.
    0:04:44 It’s good, OK.
    0:04:47 You know, I think betting on the election is not dangerous.
    0:04:48 Betting on the election while driving,
    0:04:49 that is actually dangerous.
    0:04:50 Very different thing.
    0:04:51 So do not do that.
    0:04:53 Kalshi is not advocating for doing that.
    0:04:55 But pretty cool, though.
    0:05:00 It’s crazy, and I will also say, you are everywhere right now.
    0:05:04 There are articles about you, a lot of very negative articles,
    0:05:07 or about your company.
    0:05:10 We’ve talked about your company multiple times on the pod.
    0:05:14 We’ve had debates about whether it should exist or not.
    0:05:18 So I would like to just get your, on a personal level,
    0:05:22 how does it feel to be everywhere right now?
    0:05:24 Yeah, we are in a lot of places.
    0:05:26 I mean, I think, you know, we are obviously
    0:05:28 ramped up the marketing with billboards.
    0:05:30 I don’t know if you saw these live billboards.
    0:05:31 I did, in New York.
    0:05:32 These are actually, if you bet on Kalshi right now,
    0:05:36 it will show up live on billboards in New York, Vegas, LA,
    0:05:37 pretty much every single major city.
    0:05:39 So yeah, I mean, it’s a big moment.
    0:05:40 Look, personally, on a personal level,
    0:05:44 I mean, I think there’s ups and downs in companies.
    0:05:47 I think what Luana, my co-founder, and I have learned,
    0:05:49 you just got to write it out.
    0:05:51 We’re less volatile now.
    0:05:53 We feel the ups a bit less, and we feel the downs a bit less.
    0:05:57 And everybody’s super excited and loves us right now.
    0:05:59 And in four months, we’re not the news anymore,
    0:06:00 and people forget about it.
    0:06:01 And it goes on and on.
    0:06:04 And that’s what building a company is, right?
    0:06:07 The street today is like, oh, Kalshi is the newest quote unquote
    0:06:09 overnight success, but they’ve been writing it out
    0:06:10 for God knows how many years.
    0:06:12 So it’s a grind.
    0:06:14 There’s been a lot of down moments, a lot of pain,
    0:06:16 but these up moments make it worth it.
    0:06:17 It’s really fun to do.
    0:06:20 But honestly, I don’t think we really care about the attention
    0:06:23 so much, as much as like, we just love this product.
    0:06:25 We love that people can trade on the election right now.
    0:06:27 We’re having these real-time odds.
    0:06:28 We love that we’re providing,
    0:06:30 and we believe we’re providing more truth
    0:06:30 than we can talk about that.
    0:06:33 But it’s been tiring as well.
    0:06:34 We’ve been working 24/7.
    0:06:36 – For people who don’t know, I think most do,
    0:06:38 what actually is Kalshi?
    0:06:41 – So Kalshi is the first legal prediction market in the US.
    0:06:43 So the first legal place in the US
    0:06:45 where you can bet yes/no or trade yes/no
    0:06:47 on any future events.
    0:06:50 So who will win the election as of this October?
    0:06:52 We can talk about us winning the lawsuit,
    0:06:54 but also will it rain tomorrow?
    0:06:56 Will inflation go up?
    0:06:57 Will the Fed raise interest rates?
    0:06:58 Will COVID come back?
    0:06:59 Will TikTok get banned?
    0:07:00 Really anything you can think about?
    0:07:03 We don’t do violence, war, terrorism, assassinations.
    0:07:05 And as of now, we don’t do sports.
    0:07:06 – And how did you come up with this idea?
    0:07:09 – So I worked at Goldman Sachs when I was at MIT.
    0:07:12 So at MIT, I interned at Goldman Sachs in 2016.
    0:07:14 And I also worked at Citadel and a few other places.
    0:07:16 But at Goldman, something striking happened.
    0:07:20 In 2016, that summer, most of the institutional money,
    0:07:24 like high net worth individuals, family offices,
    0:07:26 just big, rich corporations or people,
    0:07:29 it was crazy because they weren’t asking
    0:07:31 about the instruments that we were trading.
    0:07:33 There’s options and swaps and quite a default.
    0:07:34 So all these complicated things,
    0:07:35 but no one actually gave a shit about that.
    0:07:37 Like what people cared about, they were like,
    0:07:39 what do we do about the election?
    0:07:40 What do we do about Brexit?
    0:07:42 So those two were happening right in that fall.
    0:07:44 And it was like, we want to bet on the election
    0:07:46 or we want to hedge against Trump,
    0:07:47 like bet on Trump or hedge against Trump,
    0:07:49 bet on, at the time it was Hillary against Hillary.
    0:07:51 And so we come up with these bundles.
    0:07:53 And you see them right now, like Goldman and J.P. Morgan,
    0:07:56 they’re all like the Trump bet, the Trump bundle, whatever.
    0:07:59 And it was weird because one, it was a proxy.
    0:08:00 It wasn’t exactly what they wanted for it.
    0:08:01 It was indirect.
    0:08:03 Two, we would charge them crazy fees.
    0:08:05 It’s over-the-counter, not on exchange traded.
    0:08:07 And three, this is the thing that hurt me the most,
    0:08:09 which is like, why is it not accessible for everyone?
    0:08:10 Well, they’re doing it.
    0:08:11 Why can’t anyone do it?
    0:08:13 So the idea of building, hey, like,
    0:08:14 what if you build a New York Stock Exchange,
    0:08:16 where this is actively traded, it’s transparent,
    0:08:18 everyone can see, and anyone can access.
    0:08:20 It’s like an exchange where you can bet on an event,
    0:08:21 where you can trade on an event
    0:08:22 the same way you trade a stock.
    0:08:23 That was the generous of calcium.
    0:08:24 It was illegal.
    0:08:25 We spent three years getting it regulated
    0:08:27 and we did get it regulated by the federal government.
    0:08:29 – So you said at the time,
    0:08:32 betting directly on an election was illegal.
    0:08:33 Why was it illegal?
    0:08:36 – It was kind of never regulated in the US,
    0:08:37 but it was done a lot.
    0:08:38 So it was insane.
    0:08:40 If you look at the New York Times and publications,
    0:08:42 back in 1900s, 1800s,
    0:08:45 they had like live tabloids of live bets,
    0:08:46 live election bets, yeah.
    0:08:47 And it was huge.
    0:08:48 It was huge, like, even back in the time,
    0:08:50 it was like, you know, hundreds of millions,
    0:08:52 if you adjust for inflation.
    0:08:54 But I don’t think it’s election specific.
    0:08:56 I think it’s like financial instruments
    0:08:59 consistently, consistently, whenever they come in
    0:09:01 and they’re new, they face scrutiny.
    0:09:02 And it’s like, is this gambling, is this not?
    0:09:03 – Yes.
    0:09:04 – I don’t know if, did you know grain futures,
    0:09:05 do you know that at some point
    0:09:07 they were gonna get illegalized?
    0:09:08 – Is that right?
    0:09:09 – People were saying it was gonna be gambling
    0:09:11 and there was a Supreme Court decision in 1905
    0:09:13 that legalized them.
    0:09:14 They said like, look, some people speculate.
    0:09:15 Yeah, sure.
    0:09:16 Some people are quote unquote gambling
    0:09:17 or betting on grain futures, which is true.
    0:09:20 It’s still true today, but they have economic value
    0:09:22 because people hedge and people use them to know
    0:09:24 what the price, the future price of grain is gonna be.
    0:09:26 And that’s very economically relevant.
    0:09:30 – So why was the election contract,
    0:09:31 the one they said no to?
    0:09:34 They said, yeah, we’re down with you trading on the weather.
    0:09:35 – Why elections?
    0:09:39 – Yeah, as you point out, the economic value argument
    0:09:42 doesn’t seem to hold up because there’s no economic value
    0:09:44 necessarily in understanding what,
    0:09:46 if it’s gonna be rainy tomorrow.
    0:09:50 So what was the sticking point on the election question?
    0:09:53 – So look, I mean, I think there’s like a,
    0:09:55 well, first of all, I do think whether it’s gonna rain tomorrow
    0:09:55 or not is very important.
    0:09:56 – Okay.
    0:09:57 – I do think it has economic value.
    0:09:59 – Let’s hear that, let’s hear that first.
    0:10:03 – Well, I mean, I think the OG traders of the weather
    0:10:05 are actually the farmers.
    0:10:08 It’s like, you know, there’s this lingo of orange futures,
    0:10:11 forecast the weather better than the weather channel.
    0:10:12 – I didn’t know that, but I love that,
    0:10:13 and I’m sure that’s true.
    0:10:15 – And they do because actually oranges fluctuate a lot
    0:10:18 with the weather, like the harvest and the prices
    0:10:19 of oranges fluctuate a lot with the weather.
    0:10:24 But so forecasting the weather is very important actually.
    0:10:26 And you can extend it to knowing whether a hurricane
    0:10:28 is gonna hit a certain territory versus not.
    0:10:31 Like we actually have people in the keys in Florida
    0:10:34 and every hurricane season, it’s interesting.
    0:10:36 We do have a phone number on Kashi.
    0:10:36 We keep it very hidden
    0:10:38 because we don’t want a lot of people to call us
    0:10:39 and support, we get flooded.
    0:10:40 No one uses it, right?
    0:10:42 People use Zendesk and chat and,
    0:10:44 but actually around hurricane season,
    0:10:45 we start getting phone calls.
    0:10:48 And it’s basically people from the keys in Florida
    0:10:51 that usually, you know, it’s a bit kind of like older,
    0:10:53 older generation and so on.
    0:10:55 Insurance companies have pulled out of the keys in Florida.
    0:10:57 They don’t insure, they don’t love insuring
    0:10:59 and taking the risk because there’s been so many hurricanes.
    0:11:00 It’s kind of like a very dangerous area,
    0:11:02 but we have a market about that.
    0:11:05 So people put on a hedge on Kashi
    0:11:07 against damages to their properties,
    0:11:08 against a hurricane hitting their time.
    0:11:10 So that’s economically relevant.
    0:11:11 That’s insurance, that’s important.
    0:11:12 Like that’s important to do.
    0:11:13 And yes, some people are speculating,
    0:11:14 but that’s true for insurance, right?
    0:11:16 If you’re insuring against something bad happening,
    0:11:18 someone else is speculating on that on the other side,
    0:11:21 which could be the insurance companies and so on.
    0:11:22 You asked about elections.
    0:11:24 I mean, okay, I can’t speak on behalf of regular,
    0:11:26 but the thing that happens is like,
    0:11:29 there’s always a sort of official and unofficial like,
    0:11:30 I think the official response was like,
    0:11:35 hey, trading on the election is gaming.
    0:11:38 That’s no different than, you know,
    0:11:41 going to a casino and betting on a slot machine
    0:11:45 or betting on the outcome of roulette.
    0:11:46 And I think you’re asking a good question.
    0:11:49 Like how is that gaming, but whether it’s not?
    0:11:52 That sounds like a weird line to be drawing.
    0:11:53 So there’s an unofficial answer.
    0:11:55 It’s just like people have found it to be taboo.
    0:11:58 DC doesn’t love the idea of people trading on the election.
    0:12:00 Generally speaking, that has always been true,
    0:12:02 but that does not mean it’s a bad thing, right?
    0:12:04 And so we argued in court, actually,
    0:12:08 it’s a tremendous proposition to be arguing
    0:12:09 that elections are a game.
    0:12:10 – Right.
    0:12:12 – If elections are a game, what are we all?
    0:12:13 – What are we doing?
    0:12:14 – What are we doing, right?
    0:12:15 Like, what if people get some?
    0:12:18 I mean, you know, elections have no economic impact
    0:12:23 on society that is hedgeable, like clearly like,
    0:12:26 hedgeable and you can transfer risk with respect to,
    0:12:27 then what do we care so much?
    0:12:29 Like, you know, and we won, right?
    0:12:32 I mean, the law is on our side very squarely.
    0:12:33 – How did the ruling go down?
    0:12:36 What were some of their reasons for why you are correct?
    0:12:38 – So, I mean, we’ve always been consistent about the law.
    0:12:42 We’re like, look, I think the law says the underlying,
    0:12:44 the thing that you need to be trading on
    0:12:46 cannot be gaming, right?
    0:12:50 And we argued elections are not a game, right?
    0:12:53 Elections are different from looking at, you know,
    0:12:57 two boxers fighting and betting on the outcome, right?
    0:12:59 Like, or rolling a dice and betting on the outcome.
    0:13:01 And at a high level, the way to think about that
    0:13:03 and how do we differentiate these from betting?
    0:13:05 Look, I’m okay with people calling this betting.
    0:13:06 I’m actually okay.
    0:13:08 People, when CME launched Water Futures,
    0:13:10 one of the most economically relevant commodity,
    0:13:13 like financial instruments you can imagine, it’s water,
    0:13:15 people call it betting.
    0:13:16 Oh, now you can bet on the water.
    0:13:17 Okay, fine.
    0:13:19 So that’s fine because betting is very similar
    0:13:21 to speculation, are people betting on the stock market?
    0:13:22 Yes, in some forms, but that doesn’t mean
    0:13:24 the stock market in and of itself is bad.
    0:13:26 But there is a line to be drawn.
    0:13:29 And the line is artificial risk versus natural risk, right?
    0:13:31 If you and I, right now, I don’t know,
    0:13:36 like pick dice and roll it and we bet on the outcome,
    0:13:39 we create an artificial risk so we can speculate on it.
    0:13:40 That’s entertainment.
    0:13:42 We’re having fun with it, right?
    0:13:46 Brexit happening or not, hurricane hitting somewhere,
    0:13:49 TikTok being banned or not, legislation,
    0:13:50 elections are natural risks.
    0:13:53 They exist independently of you and I.
    0:13:55 And once there’s a risk that exists,
    0:13:58 you now have the need for a market to transfer risk
    0:14:00 from people that have it, but do not want it.
    0:14:02 They cannot bear it to people that don’t have it
    0:14:03 and have capacity for it.
    0:14:06 It could be hedge funds, it could be large institutions,
    0:14:06 it could be people, it could be people
    0:14:08 that want to speculate and so on and so forth.
    0:14:09 And that’s why we have a derivatives market,
    0:14:11 it’s risk transfer essentially.
    0:14:15 I think that the majority of transactions
    0:14:18 that are happening on the stock market are gambling.
    0:14:19 – Sure.
    0:14:21 – I think that’s true of options too.
    0:14:26 I think that’s true of trading and that’s okay.
    0:14:29 And we’re down with that.
    0:14:32 I don’t think it’s necessarily a good thing,
    0:14:34 but I almost don’t feel like it matters
    0:14:36 whether it’s a good thing or not.
    0:14:37 It just is.
    0:14:40 It’s something that people do and that’s okay.
    0:14:43 And so that’s how I view Kalshi.
    0:14:47 I’m like, in my view, I think it is gambling in most cases.
    0:14:50 I’d be interested to see if you agree with that.
    0:14:51 But that’s fine with me.
    0:14:54 If you want to gamble, you can gamble and that’s okay.
    0:14:59 And the other side to this is gambling is legal.
    0:15:01 You can go to the casino and gamble
    0:15:05 and you can bet on a boxing match.
    0:15:08 So why, I still don’t fully understand
    0:15:10 what the regulatory questions are here
    0:15:14 because there are many, in many states,
    0:15:16 you can gamble on sports.
    0:15:18 You can do whatever you want.
    0:15:20 – Look, honestly, I think that’s a very informed view
    0:15:23 and I love that because I’ve learned to believe
    0:15:27 that the simple statements like gambling on elections is bad
    0:15:29 just resonate better.
    0:15:33 Then telling people, like, hey, you should get informed.
    0:15:35 Like, read why economists love these markets.
    0:15:36 Why?
    0:15:38 People don’t like going below the surface.
    0:15:40 They just hear the thing and like, great.
    0:15:43 – And by the way, I just want to point out, again,
    0:15:45 I kind of agree with that.
    0:15:48 Personally, I don’t want to gamble on the election personally.
    0:15:49 – But you think it’s fine.
    0:15:50 – But it’s fine.
    0:15:54 I also don’t want to like smoke, chain smoke cigarettes.
    0:15:57 – Yeah, I mean, again, I think like,
    0:15:59 I would say a few things and I kind of like,
    0:15:59 I’ll address a few.
    0:16:01 So let’s talk about some of the kind of alternatives
    0:16:02 and then we come back to our market.
    0:16:05 So quite a default swaps,
    0:16:08 which are basically a way to insure against company debt.
    0:16:11 So generally, the market for that is around,
    0:16:13 like I think it per year today,
    0:16:15 it’s like in the tens of billions of dollars,
    0:16:18 like maybe close up to a hundred billion, right?
    0:16:21 That’s the market for hedging actual debt.
    0:16:22 But the trading volumes,
    0:16:25 the volumes are actually closer to trillions.
    0:16:28 So you have a solid like 10 to maybe even like 50x factor.
    0:16:29 – Exactly.
    0:16:31 – What is the rest of that?
    0:16:32 – Yeah, for exactly.
    0:16:33 – That’s speculation.
    0:16:34 – Speculation.
    0:16:36 – No, no, I mean, it’s speculation.
    0:16:38 So my point is we’ve just established
    0:16:38 that in traditional market,
    0:16:40 and by the way, this is also true for grain futures,
    0:16:41 for commodity futures,
    0:16:43 all these things that have a lot of economic value
    0:16:46 that are important and the stock market.
    0:16:48 I actually do think that most of transaction stock market
    0:16:50 are not capital allocation.
    0:16:52 And the reason why you cannot stop speculation,
    0:16:54 if you take out speculation from the stock market,
    0:16:55 you know what would happen?
    0:16:57 There’s no more liquidity.
    0:16:58 It dries up.
    0:17:00 There’s no more stock market.
    0:17:01 There’s no transactions anymore, right?
    0:17:03 Like there’s no life-taking prices.
    0:17:04 Nothing is happening.
    0:17:06 So the people that need the capital at that point,
    0:17:08 the very purpose of the stock market fades away.
    0:17:09 And we’ve seen that.
    0:17:11 No stock market weakens capitalism.
    0:17:14 It, you just start airing on the side
    0:17:15 of telling people what to do
    0:17:17 and what not to do with their money.
    0:17:18 So it’s the same thing here.
    0:17:19 Yes, there’s a lot of speculation.
    0:17:20 And I’ll tell you like,
    0:17:22 majority of things are going to be stuck.
    0:17:23 If the market is liquid on cash,
    0:17:25 it will be a lot of speculation.
    0:17:26 Because for every hydra,
    0:17:27 you need multiple speculators.
    0:17:28 You need that market to be vibrant
    0:17:30 and you need that type of speculative activity.
    0:17:33 But it doesn’t make the market itself bad.
    0:17:35 Gambling and betting in my view though,
    0:17:37 like I’m okay with calling betting and speculation.
    0:17:38 Gambling is a bit weird.
    0:17:41 It has some negative connotations historically,
    0:17:45 which come with I’m betting against the house, right?
    0:17:47 Like I’m going to casino and I’m betting against the house.
    0:17:50 And if I make a lot of money, they’ll kneecap me, right?
    0:17:52 There’s like odds that are tilted against me
    0:17:54 because the house usually wigs the game
    0:17:55 so that they always win.
    0:17:56 That’s a really good distinction.
    0:17:57 Whereas on cow sheets,
    0:17:59 and this is why I called maybe speculation or betting
    0:18:00 or like the stock market,
    0:18:02 you’re trading against other people.
    0:18:02 It’s fair game.
    0:18:03 You’re not trading against like,
    0:18:05 we’re not the one setting the odds.
    0:18:07 It’s not tilted towards us.
    0:18:08 You’re trading against other people.
    0:18:10 – That is a good point. – We just take transaction fees.
    0:18:14 And so that’s a different type of dynamic.
    0:18:15 – Right.
    0:18:18 – You’re not always negative EV in our markets.
    0:18:19 Hopefully, if you’re informed.
    0:18:20 I mean, I’ll ask you a question.
    0:18:23 – I’m just trying to think like how sports betting works.
    0:18:24 I guess that’s kind of like–
    0:18:25 – A lot of it is against the house.
    0:18:26 – The house sets the–
    0:18:29 – You bet against DraftKings or you bet against FanDuel.
    0:18:31 There are some new ones where it’s like kind of more
    0:18:34 exchange driven where I’m betting against you
    0:18:36 or other people and we are setting the odds
    0:18:38 by putting orders against each other.
    0:18:39 So our prices are not set by anyone.
    0:18:42 It’s like actually market supply and demand.
    0:18:43 It’s like the stock market.
    0:18:43 – Totally.
    0:18:44 I hadn’t thought of that
    0:18:46 and I think that’s exactly right.
    0:18:49 So I’m gonna go along with you on this
    0:18:53 that we’re down and propose some potential issues
    0:18:56 now that let’s assume we agree.
    0:18:58 One of the events you can trade on
    0:19:01 is whether or not Elon Musk will be nominated
    0:19:03 to the cabinet, to Trump’s cabinet.
    0:19:05 Let’s say you’re Elon Musk.
    0:19:07 You’ve just had a private conversation with Trump.
    0:19:11 He tells you, “I wanna have you in the cabinet.”
    0:19:16 What is stopping Elon legally from rigging that market
    0:19:20 and thus rigging all the other gamblers, sorry.
    0:19:23 – And that example applies to a lot of event contracts
    0:19:24 in prediction markets.
    0:19:25 I mean, that’s definitely true
    0:19:28 and guess what that example applies to as well.
    0:19:29 – Stock market.
    0:19:30 – Stock market, right?
    0:19:32 – I should just rephrase.
    0:19:34 How do you prevent insider trading?
    0:19:36 – There’s so many interesting things.
    0:19:38 So first of all, actually, weirdly enough,
    0:19:41 insider trading is not illegal and commodity derivatives.
    0:19:45 Yeah, because the farmers are trading on grain prices
    0:19:47 and obviously farmers have insider information
    0:19:48 on grain prices.
    0:19:49 – Okay.
    0:19:52 – To be clear, that said, we have it in our own rules.
    0:19:54 Our designation is a designated contract market.
    0:19:55 It’s like a legal designation
    0:19:57 and what we are is a self-regulated organization.
    0:19:59 Think of it as a little bit of an extension
    0:20:01 of a government where we have our own set of rules
    0:20:05 and these rules basically can go from civil prosecution
    0:20:07 all the way to criminal prosecution.
    0:20:08 And we have a rule against insider trading.
    0:20:09 We do have it, actually, calcium.
    0:20:10 But that’s not because of the law.
    0:20:13 We impose the rule that you cannot trade
    0:20:15 on material and non-public information
    0:20:17 on prediction markets, on our prediction markets.
    0:20:19 So if you do, you’re actually violating the law
    0:20:22 because violating the rules of an SRO is violating the law.
    0:20:23 – This is fascinating.
    0:20:24 – Yeah, yeah.
    0:20:25 So if you violate the calcium rules,
    0:20:27 you’re violating the law and you can impose fines
    0:20:29 all the way to criminal prosecution,
    0:20:30 you can be prosecuted by the CFTC.
    0:20:32 Basically, same way that if a Goldman trader
    0:20:34 commits insider trading, they’ll be prosecuted by the SEC.
    0:20:35 So same thing.
    0:20:36 – Yes, yeah.
    0:20:37 – So from a legal perspective, it’s the same thing.
    0:20:38 We established that.
    0:20:41 Now the question is like, how do you enforce against it?
    0:20:43 – Exactly.
    0:20:44 – Same thing as a stock market, right?
    0:20:46 Like if Elon has a product announcement
    0:20:48 or actually anyone at Tesla
    0:20:50 has an upcoming product announcement
    0:20:52 and they call their cousin and they say,
    0:20:53 “Hey, this is coming.
    0:20:56 You should load up on Tesla options.
    0:20:58 How does the New York Stock Exchange police against that?”
    0:20:59 Right?
    0:21:01 They have actually a very good mechanism.
    0:21:02 We have the same ones that we’ve built over the years.
    0:21:05 So we have, first of all,
    0:21:06 like we have surveillance systems
    0:21:08 that are constantly ingesting trading data
    0:21:10 and seeing weird artificial patterns, right?
    0:21:12 Like if someone is loading way out of the money,
    0:21:14 buying stuff that’s trading at 10%
    0:21:16 and suddenly it moves to 90 the next day,
    0:21:17 those usually get flagged.
    0:21:19 Especially if the transactions are large,
    0:21:21 they get flagged and they go to investigation.
    0:21:22 We have a whole investigation department
    0:21:24 that basically investigates who they are
    0:21:26 because we KYC people, we know who they are.
    0:21:27 We ask them questions.
    0:21:28 It’s like opening a brokerage account.
    0:21:30 So we have their SSN and so on.
    0:21:32 And then they can be escalated for an investigation
    0:21:33 where we figure out why did you place that trade
    0:21:35 and how did it come to fruition.
    0:21:38 Very similar to how insider trading is monitored on stocks.
    0:21:39 Is this perfect?
    0:21:42 No, but people do do insider trading on stocks.
    0:21:44 The most important thing to flag
    0:21:46 when insider trading becomes vile
    0:21:48 and bad is when it’s large.
    0:21:51 Like the larger, the more important it is to flag.
    0:21:54 Like if someone puts $10 on Tesla options
    0:21:57 because they had some of their cousin told them something,
    0:21:59 like is that gonna be flagged?
    0:22:00 Probably not.
    0:22:02 Now, if that $10 turns into $20 million,
    0:22:03 that’s a very different story.
    0:22:05 But also $20 million is much easier to flag.
    0:22:07 You figured out the regulation.
    0:22:10 That’s your big innovation, exactly.
    0:22:14 And you described how when you’re working at Goldman
    0:22:16 and these family officers who wanna make bets
    0:22:19 on the election, I would bet that Goldman
    0:22:21 is looking at Kelsey right now
    0:22:23 and they’re thinking, holy shit,
    0:22:26 they’re about to take our entire trading business
    0:22:28 or at least in that aspect of things
    0:22:32 where people wanna make these sort of narrative driven bets.
    0:22:35 And why wouldn’t they just do it on Kelsey?
    0:22:37 They don’t need Goldman to bundle up
    0:22:39 this special options package for them.
    0:22:41 They can literally just bet on the story.
    0:22:46 And it’s all because you guys figured out the regulation.
    0:22:47 How did you do that?
    0:22:51 And what did you learn about the regulatory system?
    0:22:54 What about your process actually pushed this through?
    0:22:55 – It took a long time.
    0:22:57 Like because you need to imagine it’s three years,
    0:22:58 all we’re doing is regulation.
    0:23:00 I’m drafting law and policy and regulations
    0:23:02 all day, all night.
    0:23:03 Everyone around us was saying
    0:23:04 this is never gonna happen.
    0:23:05 Every single lawyer, I mean,
    0:23:06 for when we first started a company,
    0:23:08 one day we called 65 lawyers, all of them said no.
    0:23:10 It’s not happening, this is stupid, yeah.
    0:23:12 And the safety wasn’t giving us any like,
    0:23:13 oh yeah, we’re gonna do this.
    0:23:14 It was like mostly like,
    0:23:15 oh, here are all the issues with this thing.
    0:23:17 And we would go and take these issues, fix them.
    0:23:18 And then there’s more issues and more issues.
    0:23:21 It was like rocking through this desert.
    0:23:24 You have no evidence whatsoever that the desert ends.
    0:23:25 Actually, all evidence is pointed
    0:23:27 that this desert is not gonna end.
    0:23:28 And we kept going.
    0:23:29 And I really think that was it.
    0:23:31 Like I think a lot of it is actually
    0:23:32 you just have to stick it through
    0:23:33 and it’s a war of attrition.
    0:23:35 And you have to just like keep pushing
    0:23:37 and keep your conviction.
    0:23:39 And what kept us convicted is like,
    0:23:42 look, we will stop when we get what we want
    0:23:44 or we are proven wrong.
    0:23:45 And until we are proven wrong,
    0:23:47 like literally mathematically proven wrong,
    0:23:49 like why shouldn’t these markets not exist?
    0:23:50 – Yes.
    0:23:52 – So we’ll keep going and see what happens.
    0:23:54 – We’ll be right back.
    0:24:12 – Hey, it’s Scott Galway.
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    0:26:47 – We’re back with first time founders.
    0:26:49 I want to move on to another topic.
    0:26:53 So this has become super, super politicized because–
    0:26:55 – Yeah, the odds are off.
    0:27:00 – Yes, and a lot of people are looking at the odds
    0:27:03 on Calci right now, which as of today,
    0:27:06 I think they’re around 60%.
    0:27:07 Is it 60 right now?
    0:27:08 – Let me try.
    0:27:10 (laughing)
    0:27:12 – It was, I think, 60 a day or two ago.
    0:27:14 I thought it might have dropped to 58, I think.
    0:27:15 – 59%. – 59, yeah.
    0:27:17 – 59%.
    0:27:20 So a lot of people are saying that this is,
    0:27:22 one of the arguments in favor of this,
    0:27:23 which I don’t fully agree with,
    0:27:27 is that this is an alternative to polls.
    0:27:29 Because it’s more accurate than the polls
    0:27:32 because people are actually putting their money forward.
    0:27:34 You’re drawing from the wisdom of crowds.
    0:27:40 My belief is that this is not necessarily the base truth
    0:27:45 because one of the biases that I’ve noticed,
    0:27:47 which I saw you guys put your numbers out
    0:27:51 on your demographics, is 90% of the people on Calci are men.
    0:27:56 And so my view is, baked into this is a level of bias
    0:28:01 that means that it can’t just be the exact truth.
    0:28:03 Your points on my thoughts on that.
    0:28:05 – Yeah, I think that’s a great point.
    0:28:07 Let me address a few things.
    0:28:09 Like, you know, and I kind of keep repeating this,
    0:28:10 and I know you know this,
    0:28:12 but it feels like general population doesn’t understand this.
    0:28:14 Like, market odds are pricing the probability
    0:28:15 of a candidate winning.
    0:28:16 That’s not what polls do.
    0:28:17 – That’s not what polls are.
    0:28:19 – Like, if you’re up two points on the polls,
    0:28:21 you’re kind of, you’re up more like 5% to 10%
    0:28:24 in prediction markets and in odds.
    0:28:25 That’s not the same thing, right?
    0:28:28 Like 60% odds is not 60% in polling.
    0:28:31 If you’re polling 60% up, you won.
    0:28:34 You’re like 90% chance of winning in a certain place.
    0:28:38 So I think people are overreacting to this
    0:28:39 in either case.
    0:28:40 Like the Republican candidate.
    0:28:41 – They’re going crazy.
    0:28:43 This has been crazy on this question.
    0:28:45 – I know, it’s been crazy.
    0:28:46 I agree.
    0:28:47 Like, I think the Republicans are like kind of taking it
    0:28:48 as a strong sign of victory
    0:28:51 and the Democrats are taking as a strong sign of defeat
    0:28:53 and it’s rigged and all that.
    0:28:55 But like, I’m telling everybody, like calm down.
    0:28:57 First of all, this is a still coin flip.
    0:28:58 It’s slightly biased.
    0:29:00 And if it was in the sports context,
    0:29:02 like if Barcelona is slightly disfavored
    0:29:04 versus Real Madrid, Barcelona wins very often.
    0:29:06 Like, you know, so that’s one.
    0:29:09 Two, 10 days is a very long time for these markets.
    0:29:11 10 days ago, the odds were 51% Kamala Harris.
    0:29:13 Now there’s 60, it moves.
    0:29:14 That’s like the whole point is it moves
    0:29:16 and it’s pricing in real time.
    0:29:17 So that’s kind of putting that out there.
    0:29:21 Now, I don’t think sampling bias is a real thing
    0:29:23 in prediction markets, to be honest.
    0:29:24 I don’t think so.
    0:29:27 And I don’t actually really agree with that.
    0:29:28 The basic point is actually, so fine.
    0:29:30 There are more men than women on Kashi, that is true.
    0:29:33 We released that, we said that publicly.
    0:29:34 90% is men, 10% is women.
    0:29:38 But amongst the women, like if you just see
    0:29:40 where women, what women are buying and betting,
    0:29:42 they’re actually buying more Trump than Kamala.
    0:29:45 There is zero evidence right now that if we had 50/50 women
    0:29:46 that it would actually change.
    0:29:51 Actually, the Trump bias is slightly higher amongst women
    0:29:54 than it is amongst men.
    0:29:54 – Interesting.
    0:29:57 – So does it definitely, like this is not a poll by the way,
    0:29:59 this is not saying that more women
    0:30:01 is gonna vote for Trump than Kamala, not at all.
    0:30:02 That’s not what this is saying.
    0:30:03 All that this is saying is,
    0:30:04 I don’t think this bias is really there.
    0:30:09 – So, one of the issues with polling that has often happened
    0:30:14 is that Democrats, historically speaking,
    0:30:17 have been more down to pick up the phone
    0:30:19 and to answer the polling question.
    0:30:20 – Sure, sure.
    0:30:23 – And Republicans, historically speaking,
    0:30:24 when they hear someone,
    0:30:26 “Hey, I’d like to ask you a few questions about the election.”
    0:30:27 Fuck off.
    0:30:29 So that’s historically been what’s happened.
    0:30:31 And that could totally change.
    0:30:34 The point being, there is a very specific
    0:30:38 and kind of weird bias baked into the polling,
    0:30:40 which means that you can’t take it as base truth,
    0:30:42 which I think all of us already know.
    0:30:46 What I would say about Kalshi is that,
    0:30:47 you mentioned that the women on Kalshi
    0:30:49 are actually more pro-Trump.
    0:30:51 I would bet that Kalshi is also attracting
    0:30:53 a certain type of woman.
    0:30:55 And the certain type of woman
    0:30:57 is probably more likely to bet Trump.
    0:31:00 Would be my guess, but again, that’s total speculation.
    0:31:03 And my point being, both of these things
    0:31:08 are trying to draw the base truth out of what’s happening.
    0:31:08 – But it’s biased, yeah.
    0:31:11 – But they’re biased in small different ways.
    0:31:15 And so the idea that either is more accurate than the other,
    0:31:17 to me, isn’t true.
    0:31:18 – That is a fair point.
    0:31:20 And I think that there is a difference, though,
    0:31:22 and that’s why that was my second point, actually.
    0:31:24 So first, I mean, that’s kind of the face value.
    0:31:26 Maybe, maybe, maybe these women are actually more pro-Trump
    0:31:26 than they are pro-Kamala,
    0:31:29 and they wanna buy more Trump, that’s possible.
    0:31:32 But, and that’s important to understand.
    0:31:34 In polls, if that happens, it’s done.
    0:31:35 You poll the bunch of people,
    0:31:36 and you get the number, and that’s it.
    0:31:41 In markets, if the true value, if the fair value,
    0:31:43 the theoretical correct answer is 50,
    0:31:46 and there is weird flows that are biasing it to 60,
    0:31:49 arbitrageurs and traders that like making money.
    0:31:51 I hope that we can all agree that people in America
    0:31:53 are really everywhere like making money.
    0:31:56 Like, I hope that, like, there’s no disagreement
    0:31:57 about– – No, I don’t,
    0:31:58 I don’t care about money. – Like, people are greedy.
    0:32:00 Like, as long as you trust that people are greedy.
    0:32:01 – I love it, yeah.
    0:32:05 – People are studying these insanely obsessively.
    0:32:07 They study the polls, they study how the polls
    0:32:08 are being made, they study statements,
    0:32:11 they study historical data, they study the markets,
    0:32:15 they study other markets, like stocks and so on.
    0:32:17 Now, if this is true, if we are really at 50-50,
    0:32:20 and the others saying 60-40,
    0:32:24 there is a multi-10 million dollar incentive to bring it back.
    0:32:25 And we have institutional liquidity.
    0:32:27 We have institutional liquidity on the platform,
    0:32:29 like really smart money, it is there.
    0:32:30 It could be individuals that are really smart,
    0:32:32 I mean, we have Susquehanna on the platform,
    0:32:35 SIG, one of our main partners that, you know,
    0:32:37 has been pricing and trading these things forever.
    0:32:39 We have other prop shops and hedge funds,
    0:32:41 some of the smartest people on earth, like, you know,
    0:32:43 you can imagine all the names, they’re not,
    0:32:45 SIG is public, the others didn’t make it public,
    0:32:48 but smart money brings back the prices to where it should be
    0:32:50 because there is incentive to do so.
    0:32:54 Like, fine, there is a Trump bias in the flow.
    0:32:59 That is like what people consider to be the best type of flow
    0:33:01 for the Citadels and Susquehannas of the world,
    0:33:02 because they come and trade against it
    0:33:03 and bring the prices down.
    0:33:05 And these people are actually trading at a loss
    0:33:07 at a negative expected value,
    0:33:08 and the market makers are trading
    0:33:10 at a positive expected value.
    0:33:11 – That makes a lot of sense.
    0:33:13 What I would say is that, you know,
    0:33:15 the stock market has a lot of liquidity,
    0:33:17 and oftentimes, as we have seen in the past,
    0:33:19 the stock market can be wrong about things.
    0:33:22 People can be just sort of wrong
    0:33:23 and they can get things. – Irrational, yeah.
    0:33:24 – They can be irrational.
    0:33:26 So that is my view on this,
    0:33:29 is that people are irrational,
    0:33:31 therefore, polls are irrational,
    0:33:32 and therefore, markets are irrational.
    0:33:37 And so this debate over this one’s true and this one isn’t,
    0:33:39 to me, feels a little bit useless.
    0:33:42 And I guess the question that I would sort of wrap up
    0:33:44 at this specific point to you with is,
    0:33:49 do you think that Kalshi should be replacing polling in some way?
    0:33:50 – I think let me address liquidity
    0:33:52 and then the sort of irrationalism of markets,
    0:33:53 which I agree with, by the way.
    0:33:55 So we are very liquid, actually.
    0:33:57 – By the way, could you just give us the statistics
    0:33:59 on how much money has been wagered?
    0:34:00 – It’s different, by the way.
    0:34:03 So liquidity, and people confuse this a bit with volume.
    0:34:05 Liquidity is how much you can take at a point in time
    0:34:06 without moving the price a lot.
    0:34:09 How robust is the pricing and how much you can take?
    0:34:10 On Kalshi, you can take multi-million dollars
    0:34:12 without moving the price at all.
    0:34:12 It doesn’t move it.
    0:34:13 The price won’t move.
    0:34:14 You can take multi-million dollar position,
    0:34:16 the price won’t move.
    0:34:18 You can take up to a hundred million dollars.
    0:34:19 – Which is reflective, by the way,
    0:34:21 of how much money is here.
    0:34:23 – But also how much the liquidity providers,
    0:34:25 the institutional market makers,
    0:34:27 that makes a difference in a small betting market
    0:34:29 versus a stock market.
    0:34:30 You can take up to a hundred million
    0:34:33 and it won’t move the price by more than one to two cents.
    0:34:34 A hundred million.
    0:34:36 So it’s very hard to move the prices.
    0:34:37 You need tens of millions
    0:34:38 and the impact will be very marginal.
    0:34:40 So that’s one.
    0:34:43 Two, I have never said, by the way,
    0:34:45 these markets are always accurate, nothing else.
    0:34:48 We can’t say what the future holds, right?
    0:34:50 That doesn’t make any sense.
    0:34:51 But what I can say is these markets
    0:34:52 are more accurate than alternatives.
    0:34:54 And I do stand by that, right?
    0:34:56 Like if you look at the mean error of our forecast
    0:34:57 to everything else,
    0:34:59 we’ve been the most accurate on inflation forecast,
    0:35:01 better than the Blueberry Economist survey,
    0:35:02 a variety of other surveys.
    0:35:05 Yeah, Fed interest rate decisions, climate and weather,
    0:35:07 even earthquakes.
    0:35:09 That doesn’t mean we can forecast earthquakes.
    0:35:10 That’s a crazy statement.
    0:35:11 I’m not making that statement at all,
    0:35:12 but the alternative is like,
    0:35:13 you hear a pundit on the news
    0:35:14 or like, hear someone saying something crazy
    0:35:16 because they want to get some press or whatever.
    0:35:17 But now you have a mechanism to like,
    0:35:19 hey, if you have some information about this,
    0:35:21 come put it to market and get paid for it.
    0:35:22 And then we get an accurate price from that.
    0:35:25 But these should not replace polls.
    0:35:26 They’re doing something different.
    0:35:29 This is an additional source of data.
    0:35:31 I keep saying more truth.
    0:35:33 I don’t say exclusive truth
    0:35:35 or like we’re the only truth.
    0:35:36 No, we’re not.
    0:35:38 Like more truth, just get informed.
    0:35:40 Look at the markets, look at the polls.
    0:35:42 Maybe don’t look at all the crazy videos on TikTok.
    0:35:44 Like this misinformation left and right, right?
    0:35:46 Like if you, but I don’t think they should replace polls.
    0:35:48 They’re doing something different.
    0:35:49 Polls are important.
    0:35:51 And by the way, these markets rely on polls.
    0:35:51 Right.
    0:35:53 Yeah, that’s how they’re informing their bets, right?
    0:35:54 Yeah, like how are traders, like traders,
    0:35:56 a lot of, I don’t know about any traders
    0:35:58 that doesn’t have polling in their methodology.
    0:36:00 Let’s talk about the business itself.
    0:36:02 How does Kalshi make money?
    0:36:04 How has this worked out for you as an actual business?
    0:36:05 Yeah, so it’s again,
    0:36:07 it’s kind of one of the decisions I’ve drawn.
    0:36:07 So we’re in exchange.
    0:36:10 So our business model is like New York Stock Exchange or CME.
    0:36:12 We take transaction fees, like trading fees.
    0:36:14 So you do a few thousand dollars,
    0:36:15 we take one to two percent in fees.
    0:36:18 So we take 20 bucks on that transaction.
    0:36:18 That’s how we make money.
    0:36:20 Over time, I think we have a lot of requests for our data,
    0:36:22 like people want to poll data and more granular data.
    0:36:23 But for now, we’re making it open source.
    0:36:24 We want everyone to have it.
    0:36:25 It’s part of the mission.
    0:36:26 We’re not charging for it.
    0:36:27 And specifically on the election,
    0:36:29 we’re not charging fees right now.
    0:36:31 We just want to have, like we want to promote.
    0:36:32 Just get everyone in there.
    0:36:32 We want to get everyone in there.
    0:36:34 We want the market to do their thing.
    0:36:36 No kind of barriers, fully efficient and so on.
    0:36:39 And we’re also actually, we pay back the interest.
    0:36:41 We don’t take the interest ourselves.
    0:36:43 I don’t believe in making money off of people’s interests.
    0:36:45 So if you deposit money on Kalshi,
    0:36:48 both your cash, but also your open bets.
    0:36:50 So if you buy, like if you put a position on Kamala or Trump
    0:36:54 right now, that bet will pay you 4.1% annualized variable
    0:36:56 interest as it’s outstanding.
    0:36:59 And it’s cool because if your position goes up in price,
    0:37:01 like if you bought at 50% and then now it’s 60%,
    0:37:04 you get paid on the marked up position.
    0:37:05 So you have no opportunity costs.
    0:37:08 We’re paying your interest based on your kind of outstanding
    0:37:10 bets and positions on Kalshi.
    0:37:12 And the expenses, is it an expensive thing to run?
    0:37:13 Yeah, regulatory.
    0:37:15 I mean, we have to think of building the new stock
    0:37:16 exchange from scratch.
    0:37:17 So we run a clearing house.
    0:37:19 We have one of the handful of clearing houses in the US
    0:37:24 that can really move money and clear derivatives exchange.
    0:37:27 We have the surveillance systems, you know,
    0:37:28 a lot of very, very heavy infrastructure
    0:37:30 that took years to build.
    0:37:31 So it is expensive to run.
    0:37:33 It’s a lot of upfront costs, but the marginal costs
    0:37:34 are very low.
    0:37:37 So it is very hard business to get into and get
    0:37:38 the flywheel running for the marketplace.
    0:37:40 But once it does, it’s a very profitable business
    0:37:43 because the unit economics, the marginal expense
    0:37:43 is very low.
    0:37:44 It’s AWS.
    0:37:47 And you have some significant competitors,
    0:37:49 but from my understanding, no competitors
    0:37:52 that have been approved in the US.
    0:37:54 What is the competition?
    0:37:56 So I mean, like, look, there’s always been–
    0:37:58 so there’s like offshore, like polymarkets offshore
    0:38:02 unregulated crypto-based pollution market.
    0:38:03 Oh, it’s crypto-based, I didn’t know that.
    0:38:05 Yeah, yeah, they actually did get enforcement action
    0:38:06 from the CFC two years ago.
    0:38:08 So they’re not allowed to cater to US.
    0:38:11 And there are a lot of others similar to polymarket.
    0:38:13 What I would say is don’t trust the volume on these sites,
    0:38:15 because it’s not actually true.
    0:38:16 There’s a lot of wash trading.
    0:38:18 So it’s a lot of bots, fake bots just trading against each other.
    0:38:19 But it’s not economics.
    0:38:21 Like, I give you 100, you give me back 100.
    0:38:24 And is that because they haven’t verified their customers
    0:38:25 as well as you have?
    0:38:27 Yeah, it’s like, there’s no KYC, you don’t know who’s trading.
    0:38:28 It’s not reported to the government.
    0:38:29 We can’t do that type of thing.
    0:38:32 But it’s like, I give you 100, you give me back 100.
    0:38:35 That’s called wash, which is like not real trading.
    0:38:37 But the volume just went up by 200.
    0:38:39 So imagine we do that 10,000 times, 100,000 times a day
    0:38:42 with bots, suddenly the volume is very large, but it’s not real.
    0:38:45 So that’s why we always say, trust the one that’s safe,
    0:38:48 regulated, trusted, and we’re only Americans.
    0:38:51 We don’t have foreign kind of participation for now.
    0:38:53 We’re just only Americans and so on.
    0:38:54 Look, honestly, competition is good.
    0:38:58 It’s more like, I always think more people being educated
    0:39:00 about these markets is a good thing.
    0:39:02 I believe the regulated approach is the only approach.
    0:39:03 That’s what I believe.
    0:39:05 That’s a strong belief we firmly hold the company.
    0:39:07 The last thing I always say is, I always worry a little bit
    0:39:10 about the unregulated doing something bad.
    0:39:12 And I always worry about nascent asset classes.
    0:39:15 I always try to advocate, trust the regulated actors
    0:39:17 and less the unregulated actors.
    0:39:19 And I hope the unregulated actors come and get regulated
    0:39:21 and do it the right way so that people can trust this asset
    0:39:24 class because things can go wrong in unregulated venues.
    0:39:28 And when they do, people don’t blame the unregulated venues.
    0:39:30 Regulates blame the asset class.
    0:39:31 We’ll be right back.
    0:39:34 (upbeat music)
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    0:42:51 (funky music)
    0:42:58 – We’re back with First Time Founders.
    0:43:01 I want to shift gears to your personal journey
    0:43:02 as an entrepreneur.
    0:43:04 Tell us a little bit about your background.
    0:43:06 Like, what inspired you to get into this?
    0:43:09 You mentioned you worked at Goldman, you went to MIT.
    0:43:12 What sort of led up to Kalshi in your life?
    0:43:13 – It’s interesting because both Michael Vander and I
    0:43:15 had very similar backgrounds.
    0:43:17 So I was born in LA, I grew up in Lebanon.
    0:43:20 Loana grew up in Brazil.
    0:43:21 We were both math geeks in school.
    0:43:22 Go to MIT.
    0:43:24 – This is your co-founder, Loana Lopez.
    0:43:25 – Lara, yes.
    0:43:28 – And you met at MIT?
    0:43:29 – Yeah, so we met at MIT.
    0:43:31 It was kind of like, we were both math geeks.
    0:43:32 We were like, love getting into MIT.
    0:43:33 That was the place for math geeks.
    0:43:35 And then we both kind of love finance.
    0:43:37 But we didn’t, we weren’t like the type that was,
    0:43:38 you know how like there’s a persona.
    0:43:40 I was like the entrepreneur, the person that’s always
    0:43:41 building products.
    0:43:43 I want to be kind of like, we weren’t that.
    0:43:45 Yeah, we didn’t have that.
    0:43:47 We weren’t reading books or listening to podcasts.
    0:43:49 I think I was fairly firmly convinced
    0:43:51 that I was going to be a trader.
    0:43:52 I was going to be at Citadel.
    0:43:53 I love working at Citadel.
    0:43:53 Citadel was amazing.
    0:43:54 It was incredible.
    0:43:57 But it was one of those things that the idea was just,
    0:44:00 wouldn’t let go basically.
    0:44:03 It was just like, the idea was so kind of like,
    0:44:05 constantly in the back of our minds.
    0:44:07 And it was like pulling us to it slowly.
    0:44:09 It kept on popping up, right?
    0:44:13 Like it’s always the idea pulled us into building the company
    0:44:14 rather than the vice versa.
    0:44:15 Like we’re looking for an idea.
    0:44:16 It’s like the idea just kind of pushed us.
    0:44:18 And we kind of loved it.
    0:44:20 It’s like this beautiful notion of,
    0:44:24 what if you can apply markets to price the future, right?
    0:44:26 Like we price anything now.
    0:44:27 Why don’t we price our future, right?
    0:44:29 Like imagine we can ask questions like,
    0:44:32 will GDP go up if Trump gets elected?
    0:44:34 Will GDP go up if Kamala gets elected?
    0:44:36 And you can have a market-based pricing for that.
    0:44:37 Let the market tell you.
    0:44:38 Market truth, right?
    0:44:39 And that was the elegance of it.
    0:44:40 And we really liked that.
    0:44:44 And so slowly, we basically just kind of got dragged into it.
    0:44:46 And they were like, all right, we’re going to have to build
    0:44:48 this company now because we would regret not doing so.
    0:44:52 It’s almost like there are some ideas that are so obvious
    0:44:53 that they have to get done.
    0:44:56 Like if it, I feel like if it wasn’t going to be you,
    0:44:58 someone else was going to do it.
    0:45:03 And it’s so interesting to me that the hurdle was the regulation.
    0:45:04 And you want it to be a trader.
    0:45:06 You clearly have a massive math brain.
    0:45:08 I doubt you’re doing any math these days.
    0:45:09 Not anymore.
    0:45:12 Well, we do some, I mean, we’ve hired people
    0:45:15 that are a lot smarter than us, which is-
    0:45:16 Helpful.
    0:45:17 Which is helpful.
    0:45:18 Yeah, yeah.
    0:45:19 We do less for sure.
    0:45:23 We were making jokes this week, actually, like I’ve slowed down.
    0:45:24 I was better at math before.
    0:45:25 Yeah.
    0:45:26 I had to practice.
    0:45:27 I had to practice for sure.
    0:45:29 I’m sure you’re going to lobby in now.
    0:45:30 Yeah, better.
    0:45:31 Yeah, yeah.
    0:45:32 I mean, not, you know, but like engaging regulators
    0:45:33 and politics.
    0:45:34 Yeah.
    0:45:35 Definitely better.
    0:45:36 But yeah.
    0:45:37 I would like to hear a little bit about that.
    0:45:40 I mean, first let’s talk about maybe fundraising.
    0:45:43 I mean, you’ve had a huge success in fundraising.
    0:45:44 You’ve got some very big name investors.
    0:45:48 What would you say makes you a good fundraiser
    0:45:51 and what are the qualities of a founder
    0:45:52 who can go out and raise a lot of money?
    0:45:54 I think I’m a good fundraiser in some ways,
    0:45:56 but like there are better fundraisers for sure.
    0:45:59 But I think like I build relationships with people.
    0:46:00 I don’t play a lot of games.
    0:46:02 I’m very honest and transparent up front.
    0:46:03 Yeah.
    0:46:06 And I’ve always kind of had that approach to raising money.
    0:46:08 And I explained to people like, hey, this is a long journey.
    0:46:13 This is a company I’m committed to and we want to build long term.
    0:46:15 And I think a lot of investors kind of appreciate that
    0:46:17 because they’re used to the games and the kind of…
    0:46:20 So I just usually build relationships with people that I kind of like
    0:46:22 and I talk to them about the business.
    0:46:25 And I genuinely consider it as a two sided interview.
    0:46:26 It’s like, do I like this person?
    0:46:28 Do I think they get what we’re trying to build?
    0:46:30 And I think like all things, it’s a bit like dating.
    0:46:33 And you have to be convinced that what you have is valuable.
    0:46:35 And I never meant to claim like cash sheet is going to be…
    0:46:38 I hate these claims, and all funders do that.
    0:46:39 We’re the next Apple.
    0:46:40 Yeah.
    0:46:41 We’re the next Apple.
    0:46:42 We’re going to be a hundred billion dollar company.
    0:46:44 And I’m like, I don’t know that, right?
    0:46:45 Like I don’t say that.
    0:46:48 There’s a lot of things that have to go right for us to get there.
    0:46:50 But what I do say is it has the potential to.
    0:46:51 And I do think so.
    0:46:53 Like I think we have the potential to be a hundred billion dollar company.
    0:46:56 And if things go our way, that’s the size of the time.
    0:46:58 That’s the potential opportunity.
    0:46:59 Will that happen or not?
    0:47:00 I don’t know.
    0:47:01 I can’t say for sure.
    0:47:02 But I will work as hard.
    0:47:04 I mean, I’ve shown how hard I’m willing to work and how much I’m going to sacrifice
    0:47:06 to make it happen.
    0:47:08 And I think a lot of people appreciate that.
    0:47:11 It gets to the basics of just negotiating, right?
    0:47:17 And it sounds like what you are is an incredibly skilled negotiator and you’ve kind of proven
    0:47:21 that through getting this through in your dealings in DC.
    0:47:28 And what I have found in negotiating is that it does all start with kind of your initial
    0:47:35 position, which is like, how confident am I in myself and in the product that I’m trying
    0:47:36 to sell?
    0:47:39 So you mentioned like a two sided thing.
    0:47:41 It’s like, this is where I stand.
    0:47:43 This is what I’m looking for.
    0:47:45 And this is what I’d like to get from you.
    0:47:46 That’s my position.
    0:47:50 And it sounds like you’re very, very confident about that.
    0:47:56 And I think the question is for people who want to get good at that, where do you get
    0:47:57 that confidence from?
    0:48:00 Like, what do you sort of hype yourself up before you go into a meeting?
    0:48:05 How do you sort of walk into the room and say, yep, this is who I am and I’ll be unapologetic
    0:48:06 about it.
    0:48:07 I’m always like interested.
    0:48:11 People around me say like, hey, where’d you get the confidence from?
    0:48:12 But it always rings the bell.
    0:48:17 I’m like, I have long periods of lack of confidence.
    0:48:18 You know what I mean?
    0:48:20 It’s like, I have a lot of insecurities and variety of different ways.
    0:48:24 And maybe I’ve gotten tougher over time.
    0:48:26 People don’t see it as much.
    0:48:31 But people over assume how confident founders are and how it feels on the inside.
    0:48:36 I think I’ve really taught myself a few things.
    0:48:38 You’ve gotten punched down and beat down so many times.
    0:48:42 Press loves us at some point and the press hates us at other points.
    0:48:44 And everything that happens at the company is always your fault.
    0:48:47 And everything that happens at the company is always because you’re a legend.
    0:48:50 Anything good you get congratulated for and everything that you get ready for.
    0:48:54 And then you realize actually, it’s not like, I didn’t do anything in the last two months.
    0:49:00 All the work was actually the day in, day out of chopwood, carry water.
    0:49:05 So I realized actually less things are in my control than I think are in my control.
    0:49:06 Or that people think so.
    0:49:10 Two, I think I genuinely try to start loving the process.
    0:49:11 I really do.
    0:49:16 I’m trying not to love too much the attention and not to hate too much the bad times.
    0:49:19 I’m trying to just like like my job and like my work.
    0:49:24 And I would say the last one is, it’s a bit of absurdity of life.
    0:49:26 Like don’t take yourself too seriously.
    0:49:27 Yes.
    0:49:28 You know?
    0:49:29 It’s like, I’m not a legend, I’m not.
    0:49:31 I think I’m a pretty good founder.
    0:49:33 I think I work and the reason is not because I’m this mythical genius.
    0:49:35 I like work really, really hard.
    0:49:36 I really do.
    0:49:38 Anyone around me knows how hard I work and how much I’m willing to sacrifice.
    0:49:43 I’m reasonably smart, like, you know, I’m neither a genius nor, but I, you know, and
    0:49:47 that’s because I’ve partly because of one and I’ve worked on my EQ over time.
    0:49:50 Like I, and I like engaging with people and meeting people and so on.
    0:49:52 But number one is by far and large, the most important.
    0:49:53 That’s it.
    0:49:54 I just work really hard.
    0:49:55 Yeah.
    0:49:57 And I, and if you really understand why, where the success or lack of success comes
    0:50:01 from, then you’re like, it doesn’t get to your head.
    0:50:02 100%.
    0:50:03 Yeah.
    0:50:07 Because as you are, you’re becoming more and more famous.
    0:50:08 Yeah.
    0:50:09 The company is special.
    0:50:15 I mean, this company is everywhere and, you know, when this episode airs, it’ll be a few
    0:50:17 days before the election.
    0:50:25 I will bet that you or Kalshi are going to be just somehow in the crosshairs of all of
    0:50:28 the political craziness that is going to happen.
    0:50:31 And maybe it’s already happening to you.
    0:50:35 Do you read the comments?
    0:50:37 Do you read what people say about you?
    0:50:41 I mean, I know there have been these articles that have been saying Kalshi is a problem.
    0:50:42 Do you read those?
    0:50:46 Like what do you think about when the public starts talking about you?
    0:50:47 I don’t really read anymore.
    0:50:48 You don’t read?
    0:50:49 I don’t really read the press.
    0:50:50 I read it.
    0:50:53 I barely, like people call me like, oh, sometimes they call me about my own quotes and I’m like,
    0:50:55 I don’t even remember saying that.
    0:51:01 Like I really like, look, I think the way I view it and Luana Kofana is very good at
    0:51:02 this.
    0:51:06 If you’re long-term oriented, there’s going to be ups and downs in the short term.
    0:51:10 It’s a bit like a stock, but it all stabilizes over time.
    0:51:13 And so be long-term oriented, so you don’t worry too much about the short term, whether
    0:51:14 good or bad.
    0:51:16 Like don’t be too happy about the good and be too worried about the bad.
    0:51:20 But then the second thing is actually do good.
    0:51:24 I really believe in that because like, look, honestly, I was working at Citadel.
    0:51:27 I think I might have been actually richer if I stayed at Citadel.
    0:51:30 I mean, maybe now it’s compared, well, like, you know my point, like it’s cash, you get
    0:51:31 paid a lot at Citadel.
    0:51:33 Like frankly, it’s insane now.
    0:51:35 Like the things I’m hearing are truly insane.
    0:51:37 So like, yeah, I’m not doing this out of pro bono.
    0:51:41 Like I want to make money and so on, but I really genuinely want these markets to exist
    0:51:42 and I want to do good.
    0:51:47 And so as long as we’re doing the right things day in, day out, I believe that there’s going
    0:51:48 to be mean reversion.
    0:51:52 Like when people overestimate us, it’s going to come down and be what it actually is.
    0:51:55 And when people think it’s worse than what they should be thinking, I think it’s going
    0:51:56 to be mean reverts.
    0:51:58 I believe that.
    0:52:02 My favorite saying from Scott, he has a quote that he always says, which I love, which is
    0:52:06 nothing is ever as good or as bad as it seems.
    0:52:07 It’s so true.
    0:52:10 And I actually read this, there’s this, you know, this Chinese proverb or story about
    0:52:11 the Chinese farmer.
    0:52:12 Oh, I know a bit.
    0:52:13 Tell it.
    0:52:18 I say a lot to the company multiple times, which is like, you know, so there’s a Chinese
    0:52:19 farmer in a village.
    0:52:24 He’s a farmer in China and like so, you know, he had this horse that he really loved and
    0:52:25 the horse basically disappears.
    0:52:26 It’s just like fleas.
    0:52:31 So the village comes down and it’s like, Hey, like, you know, Oh my God, it’s so unfortunate.
    0:52:32 So sorry to hear the news.
    0:52:35 And he’s like, you know, his answer is like, I don’t know, we’ll see.
    0:52:38 And the next day, the horse comes back with a flock of horses and it’s like, wow, you
    0:52:41 know, this dude is like, you know, rich and he has a flock of horses.
    0:52:44 And again, they come back, they, the farmers come in and it’s like, how fortunate you’re
    0:52:45 so lucky.
    0:52:46 Like it’s crazy.
    0:52:48 Life loves you and you know, God loves you.
    0:52:49 I don’t know.
    0:52:50 We’ll see.
    0:52:54 His son next day is riding one of the horses, falls, gets, you know, injured.
    0:52:55 Same thing.
    0:52:56 I don’t know.
    0:52:57 I don’t know.
    0:52:58 And so on.
    0:52:59 Next day, China goes to war.
    0:53:01 All the young people are get, you know, drafted into war.
    0:53:02 His son is injured.
    0:53:03 So he doesn’t get drafted into work.
    0:53:05 You’re the luckiest man alive.
    0:53:06 You’re so fortunate.
    0:53:09 And it ends with this kind of like, you know, he smirks and he’s like, I don’t know, we’ll
    0:53:10 see.
    0:53:11 And I always say, like, I don’t know.
    0:53:12 We’ll see.
    0:53:15 Like, you know, like just, just chop wood, carry water, do the, do the work the end day
    0:53:16 out.
    0:53:17 And, and, and we’ll see what happens.
    0:53:20 That is a great place to end.
    0:53:23 Do you have a prediction for the election?
    0:53:25 That’s what people really want to know.
    0:53:28 I’d love to get it from you just before we wrap up.
    0:53:31 You don’t have to say who’s going to win unless you’re down.
    0:53:37 I’d love to hear if you, you are the, the, the expert on prediction markets.
    0:53:38 What’s your prediction for this election?
    0:53:41 It’s funny because a lot of people are asking me this question now, but I will answer.
    0:53:42 You’re the guy.
    0:53:43 You’re the guy.
    0:53:46 I don’t have any different, like I just want to say I’m, I’m still a regular dude when
    0:53:47 it comes to this.
    0:53:50 Like, you know, if I trade on cashier, I may be, I may lose money, you know, I can’t
    0:53:52 trade because I run the exchange.
    0:53:55 I, I’m legally not allowed to trade, but I don’t know if I’ll make, I’d be that good
    0:53:56 at doing this.
    0:54:00 So, so I, I think trust the markets as the whole point, right?
    0:54:01 And get informed.
    0:54:02 Like, I think look at the markets, look at the polls.
    0:54:07 I think the markets are accurate gauge, 60% doesn’t mean a hundred percent.
    0:54:10 But I think right now 60% seems to be what fair value is.
    0:54:13 And that doesn’t, you’ve got your money on truck.
    0:54:17 I, I, I don’t have, but I really think trust the market, but no, but I think 10 days is
    0:54:18 long.
    0:54:19 It’s going to move a lot.
    0:54:20 Yes.
    0:54:21 Whether up or down, but it does move.
    0:54:22 We’ve seen this.
    0:54:23 People are so short-term driven right now.
    0:54:24 It’s like, oh my God.
    0:54:26 I see tomorrow that it’s moves and moves and moves.
    0:54:30 Um, so it’s a very long day, 10 days is a very long time.
    0:54:34 Um, and, and two, I really think 60, 40 is, is close to a coin flip.
    0:54:35 It really is.
    0:54:39 So, so what, what you should take from these markets, it’s a very tight race.
    0:54:43 Tarik Mansour is the CEO and co-founder of Kalshee, a regulated exchange and prediction
    0:54:44 market.
    0:54:45 This was awesome.
    0:54:47 I’m really happy you came in and thank you for doing this for me.
    0:54:48 Yeah.
    0:54:49 Well, this was really fun.
    0:54:50 Thanks for having me.
    0:54:57 Our producer is Claire Miller, our associate producer is Allison Weiss and our engineer
    0:54:59 is Benjamin Spencer.
    0:55:02 Thank you for listening to First Time Founders from the Vox Media Podcast Network.
    0:55:16 Tune in tomorrow for Prodigy Markets.
    0:55:20 Do you feel like your leads never lead anywhere and you’re making content that no one’s
    0:55:24 sees and it takes forever to build a campaign?
    0:55:27 Well, that’s why we built HubSpot.
    0:55:31 It’s an AI-powered customer platform that builds campaigns for you, tells you which
    0:55:36 leads are worth knowing and makes writing blogs, creating videos and posting on social
    0:55:38 abrees.
    0:55:41 So now it’s easier than ever to be a marketer.
    0:55:45 Get started at HubSpot.com/Marketers.
    0:55:48 Support for this podcast comes from Stripe.
    0:55:52 Stripe is a payment and billing platform supporting millions of businesses around the world, including
    0:55:56 companies like Uber, BMW and DoorDash.
    0:56:00 Stripe has helped countless startups and established companies alike reach their growth targets,
    0:56:04 make progress on their missions and reach more customers globally.
    0:56:08 The platform offers a suite of specialized features and tools to fast track growth like
    0:56:12 Stripe billing, which makes it easy to handle subscription-based charges, invoicing and all
    0:56:15 recurring revenue management needs.
    0:56:19 You can learn how Stripe helps companies of all sizes make progress at Stripe.com.
    0:56:21 That’s Stripe.com to learn more.
    0:56:22 Stripe.
    0:56:23 Make progress.
    0:56:26 (gentle music)

    Ed speaks with Tarek Mansour, co-founder and CEO of Kalshi, a regulated exchange and prediction market that lets you trade on future events. They discuss Kalshi’s fight to legalize betting on the election, how to deal with negative press, and his prediction for the outcome of the election.

    Learn more about your ad choices. Visit podcastchoices.com/adchoices

  • No Mercy / No Malice: High Anxiety

    AI transcript
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    0:01:21 Do you feel like your leads never lead anywhere?
    0:01:23 And you’re making content that no one sees,
    0:01:26 and it takes forever to build a campaign?
    0:01:29 Well, that’s why we built HubSpot.
    0:01:32 It’s an AI-powered customer platform that builds campaigns for you,
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    0:01:52 I’m Scott Galloway, and this is No Mercy, No Mouse.
    0:01:54 College is a wonder drug.
    0:01:58 College admissions is a nightmare.
    0:02:02 High anxiety, as read by George Hahn.
    0:02:11 I just returned from the U.S. and was struck by how tense things are.
    0:02:16 It feels similar to what I imagined the mood was during the Vietnam War.
    0:02:20 So let’s take a break and discuss something even more stressful.
    0:02:24 College admissions. Yay!
    0:02:27 Last week, I did a college tour with my son.
    0:02:31 It was a chance for us to bond and bask in the infinite possibilities
    0:02:33 that stretch out in front of him.
    0:02:35 The previous sentence is a lie.
    0:02:41 The college admissions process has kicked off two years before he sets foot on a campus,
    0:02:44 and it’s already a flaming bag of shit,
    0:02:49 where a flaming bag of shit is a ton of unnecessary stress.
    0:02:54 My industry, higher ed, is corrupt and second only to poverty
    0:02:58 regarding preventable stress in U.S. households.
    0:03:02 Note, you likely had the reflexive SNAPS fire of,
    0:03:05 “Reducing poverty is not that simple.”
    0:03:09 No, it is that simple.
    0:03:15 It would just mean lower stock prices and a more progressive tax policy.
    0:03:18 The incumbents deploy the illusion of complexity
    0:03:22 as a weapon of mass distraction from a simple hard truth.
    0:03:28 The U.S. chooses to let one in five households with children live in poverty,
    0:03:31 but that’s another post.
    0:03:34 Despite the lie we tell ourselves,
    0:03:35 you don’t need college,
    0:03:38 in a vain attempt to opt out of the stress,
    0:03:43 higher education is in fact a wonder drug.
    0:03:47 A pill that extends life makes you happier, healthier and wealthier
    0:03:51 and strengthens your relationships.
    0:03:54 America is the world’s premier manufacturer,
    0:03:59 producing a compound at a purity no other manufacturer can rival.
    0:04:05 No nation dominates any industry the way the U.S. dominates higher ed.
    0:04:09 Millions come to the U.S. to access this drug.
    0:04:12 In a rational world, we’d scale it.
    0:04:16 Instead, we sequester it behind ivy-covered walls
    0:04:21 and tuition that commands a gross margin of 90% plus.
    0:04:28 And for centuries, we prescribed this cure all exclusively to white men.
    0:04:32 Despite a 6% increase in applications this year,
    0:04:37 there’s a narrative questioning the value of a college degree.
    0:04:40 I’m often asked, “Is college worth the price?”
    0:04:43 My answer? Mostly yes.
    0:04:47 My hunch is that decades of news stories
    0:04:52 about for-profit scam schools, student loan debt and income inequality
    0:04:54 have dinged the college brand,
    0:04:59 as those narratives speak to a sense of stagnation for people
    0:05:04 who once viewed universities as an on-ramp to a wealthy lifestyle.
    0:05:07 In a digital economy where everyone has access to everything,
    0:05:10 there are more students applying to the top schools,
    0:05:13 giving the top schools access to better students,
    0:05:18 all of which creates an upward spiral of strength among the strong.
    0:05:22 Lower-tier schools, however, are struggling.
    0:05:28 Since 2020, 64 colleges have either closed or merged.
    0:05:31 Meanwhile, the myth of “education always pays off”
    0:05:34 has been busted at tier two schools,
    0:05:39 many of which offer a Hyundai for a Mercedes price.
    0:05:46 The strongest brands in the world, MIT, Apple, Hermes, the US,
    0:05:49 are built on the artificial choking of supply
    0:05:54 via rejectionist admissions, premium pricing strategies,
    0:05:59 limited production, and rationing visas, respectively.
    0:06:01 My business intelligence firm, L2,
    0:06:04 advised nearly every luxury business.
    0:06:07 The firm was founded on a simple premise.
    0:06:11 Prestige brands trade at higher multiples of revenue
    0:06:14 due to increasing income inequality
    0:06:18 and their ability to manufacture scarcity.
    0:06:22 We sold the company in 2017 for eight times revenue.
    0:06:24 Mirroring our client base,
    0:06:26 we were disciplined about pricing
    0:06:30 and said no to many potential clients.
    0:06:34 My first consulting firm, Profit, said yes to every client,
    0:06:38 and it sold for 2.8 times revenue.
    0:06:39 It was the right decision at the time,
    0:06:42 as I didn’t have the capital to utter the sexiest word
    0:06:46 in the English language, no.
    0:06:48 Saying no is the correct strategy
    0:06:52 for a consulting firm or a luxury brand,
    0:06:55 but not for a university.
    0:06:58 Yet the top 2% of institutions
    0:07:01 have decided they are luxury brands,
    0:07:05 saying no to more than 90% of their applicants.
    0:07:09 When I applied to UCLA, the acceptance rate was 76%.
    0:07:14 Last year, it was 9%.
    0:07:16 Throughout the second half of the 20th century,
    0:07:18 higher education was the key
    0:07:22 that allowed remarkably unremarkable kids, like me,
    0:07:26 to unlock America’s promise of upward mobility.
    0:07:31 Today, higher ed is a bouncer at the entrance to an exclusive club
    0:07:33 where wealthy kids and a cadre
    0:07:36 of freakishly remarkable 18-year-olds
    0:07:38 build lasting relationships
    0:07:41 and lucrative networks with elite peers
    0:07:43 while obtaining certification
    0:07:44 that gives them access
    0:07:48 to the greatest wealth-generating vehicles in history.
    0:07:53 S&P 500 companies.
    0:07:55 In my sophomore year at UCLA,
    0:07:58 I learned my limits were not my real limits.
    0:08:00 Crew.
    0:08:02 Realized I would not be a doctor.
    0:08:04 Chemistry.
    0:08:07 Became less insecure about my insecurities.
    0:08:09 Psychology.
    0:08:11 Fell in love for the first time
    0:08:13 and developed resilience.
    0:08:16 Heart broken.
    0:08:17 I’d like to think all these things
    0:08:21 would have happened whether or not I attended college,
    0:08:23 but they likely wouldn’t have happened
    0:08:26 in such a safe and joyous place.
    0:08:28 But my sense is the college experience
    0:08:32 isn’t as appealing as it once was.
    0:08:34 The University of Michigan, for example,
    0:08:36 is a world-class institution
    0:08:40 that also provides students with the college experience.
    0:08:43 Except there’s something rotten in Ann Arbor.
    0:08:48 Michigan invested $250 million in DEI programs
    0:08:50 over the past decade.
    0:08:52 The result?
    0:08:54 More conflict.
    0:08:55 A culture of grievance.
    0:09:00 And a 33x increase in complaints involving race,
    0:09:03 religion, or national origin.
    0:09:07 Meanwhile, Michigan’s pro-Palestinian student assembly
    0:09:11 voted to withhold $1.3 million in funding
    0:09:12 for student activities
    0:09:16 until the university divested from Israel.
    0:09:18 Two months into the fall semester,
    0:09:21 the same student assembly reversed course
    0:09:24 when they realized defunding ultimate frisbee
    0:09:27 made zero fucking sense.
    0:09:30 In response, pro-Palestinian activists
    0:09:37 accused the assembly members of complicity in genocide.
    0:09:40 It may be this march of the zombies at elite schools
    0:09:43 that explains why southern universities
    0:09:46 experienced a 30% jump in applicants
    0:09:51 from kids in the northeast between 2018 and 2022.
    0:09:54 Georgia, 48% acceptance rate.
    0:09:58 Clemson, 51% acceptance rate.
    0:10:02 And Alabama, 83% acceptance rate.
    0:10:06 Aren’t elite schools, but southern schools
    0:10:07 are generally less expensive
    0:10:10 and seen as less political.
    0:10:12 They’re also more likely to embrace
    0:10:14 the traditional college experience,
    0:10:20 i.e. football games, Greek life, and fun.
    0:10:24 State schools have registered an 82% increase
    0:10:27 in applications since 2019
    0:10:31 as they offer a better value.
    0:10:34 The whales of high-tuition prestige universities
    0:10:37 are international students.
    0:10:41 At NYU, they constitute 22% of our student body
    0:10:44 and likely half our cash flow
    0:10:47 as they’re ineligible for financial aid.
    0:10:50 We claim we let them in for diversity.
    0:10:52 This is bullshit.
    0:10:57 International students are the least diverse cohort on earth,
    0:11:01 i.e. they are the richest kids on campus.
    0:11:05 Letting in the daughter of a Taiwanese private equity billionaire
    0:11:07 isn’t helping diversity,
    0:11:10 but claiming it is illustrates just how far we’ve fallen
    0:11:14 from the original goal of affirmative action.
    0:11:18 Note, international PhD students, whom we pay,
    0:11:23 are some of the most impressive young people on the planet.
    0:11:27 In 1960, Harvard, Yale, and Princeton
    0:11:30 had a total of 15 black students
    0:11:33 out of a combined enrollment of 3,000.
    0:11:35 That was a problem,
    0:11:39 and shifting to race-based admissions made sense.
    0:11:47 In 2024, 65% of students at Harvard identified as non-white.
    0:11:49 The Ivy League, as a whole,
    0:11:55 now scores high in the U.S. News & World Report Diversity Index.
    0:11:56 This is a wonderful thing,
    0:12:01 as black students, along with Asians, women, LGBTQ people,
    0:12:03 and folks from other groups,
    0:12:06 have historically been excluded from elite colleges.
    0:12:11 But at this point, the cost of race-based affirmative action
    0:12:13 outweighs the utility.
    0:12:19 Affirmative action should be based on one color, green.
    0:12:22 It’s poor kids who need a hand-up.
    0:12:27 Identity politics have been weaponized by a DEI apparatus
    0:12:31 on campuses that doesn’t translate to progress,
    0:12:35 but student debt.
    0:12:37 When the University of California system
    0:12:40 banned affirmative action in 1995,
    0:12:43 the number of black and Latino first-year students
    0:12:47 plunged by nearly half at UCLA and UC Berkeley.
    0:12:51 But over time, the numbers rebounded.
    0:12:56 By 2021, UCLA’s first-year class included more black students,
    0:13:00 346 or 7.6%,
    0:13:07 than its 1995 class, 259 or 7.3%.
    0:13:10 While the UC Chancellor submitted an amicus brief
    0:13:14 supporting affirmative action at elite private schools,
    0:13:18 they achieved similar results by implementing
    0:13:23 an admission guarantee to top-performing students statewide,
    0:13:27 as well as an admissions process that factors in the location of an applicant’s
    0:13:32 home and high school.
    0:13:35 While the Supreme Court banned race-based admissions,
    0:13:39 affirmative action for the rich, aka legacy admissions,
    0:13:43 continues. Not so fun fact?
    0:13:47 Elite schools began using legacy admissions in the 1920s,
    0:13:50 along with standardized tests, interviews,
    0:13:56 and extracurricular activities to keep out Jews.
    0:14:00 Despite its ugly origins, more than half the schools
    0:14:03 in the U.S. continue to use legacy admissions,
    0:14:10 and 40% of students nationwide benefit from such preferences.
    0:14:17 At Harvard, legacies accounted for 36% of the class of 2022.
    0:14:21 Culture wars center the fight around race-based preferences,
    0:14:26 but elite universities are businesses, and the only color that really matters
    0:14:31 is, again, green. For loyal, wealthy customers,
    0:14:36 the legacy advantage is remarkable. Here’s the thing.
    0:14:38 I don’t have a problem with legacy admissions.
    0:14:43 When I was at Haas, there was a student who was obviously a legacy, i.e. their
    0:14:46 billionaire father donated to get them into business school.
    0:14:50 That’s a good thing if the money is used to expand
    0:14:55 access for other students. My problem with higher education
    0:14:59 is that we’re whores who aren’t transparent about being whores.
    0:15:03 Many faculty and administrators forego higher paying careers
    0:15:08 as they believe in the mission. Most, like the rest of us,
    0:15:13 wake up every day and ask, “How can I increase my compensation
    0:15:18 while reducing my accountability?” They found the answer in the LVMH
    0:15:24 strategy, only hitch. College degrees aren’t Birkenbags,
    0:15:28 and higher ed is not only the best path to economic security,
    0:15:32 it will also shape the view of many, if not most,
    0:15:36 of the people running the world for the next century.
    0:15:41 The last time I wrote about higher ed, I received three cease and desist letters
    0:15:46 from universities we said were likely to perish.
    0:15:53 DEI, ethics, sustainability, leadership, and near anything with the word
    0:15:57 “studies” in its title, is no longer about helping people,
    0:16:04 but welfare for the overeducated. Here’s the dirty secret. Using AI,
    0:16:09 software, the abolishment of tenure, and higher standards for faculty,
    0:16:17 we could cut costs 30% and tuition conservatively in half.
    0:16:21 We wouldn’t need student debt bailouts because kids wouldn’t need
    0:16:24 student loans.
    0:16:31 Five states and a handful of elite schools recently banned legacy admissions.
    0:16:35 My Prof. G. Markets co-host Ed Elson believes the practice will be gone in a
    0:16:40 few years, as donations no longer guarantee acceptance.
    0:16:45 I disagree. Donating isn’t entirely transactional.
    0:16:50 When I gave to UCLA and UC Berkeley, the chancellors were explicit.
    0:16:55 A donation wouldn’t make it easier for my kid to get in.
    0:16:59 In fact, it likely makes it harder. And that’s fine.
    0:17:03 I donated to give an overdue nod to the Californian
    0:17:08 and American taxpayers who invested in me. I also donated out of ego.
    0:17:14 It wasn’t anonymous. Being a provider makes me feel masculine.
    0:17:18 Still, Ed has a point about why many people donate.
    0:17:22 Last year saw a 2% drop in private donations to universities
    0:17:26 despite the strong economy and the market hitting new highs.
    0:17:31 The $1.5 billion that might otherwise have gone toward donations
    0:17:35 is likely up for grabs, as parental admissions anxiety is closely
    0:17:38 correlated with the size of your bank account.
    0:17:43 Such anxiety will likely supersize the emerging college admission consulting
    0:17:47 complex. Soon it won’t be an advantage to hire a
    0:17:52 consultant, but a disadvantage if you don’t.
    0:17:56 I’m not suggesting we shouldn’t have elite schools that have exceptionally
    0:18:00 high standards, but embracing a for-profit business model
    0:18:04 more suited for Panerai than a public service,
    0:18:07 unnecessarily restricting supply for money and ego,
    0:18:13 is just plain wrong. We have the pill, the miracle
    0:18:17 drug. Any university that has an endowment
    0:18:21 over a billion that’s not expanding its freshman class
    0:18:25 faster than the population should lose its tax-free status,
    0:18:29 as they are no longer a place of learning but a hedge fund
    0:18:34 offering classes. And schools should be on the hook for 50% of bad
    0:18:40 debt from student loans. I can’t imagine the economic stress levyed across
    0:18:46 American households who don’t have a spare $250,000 lying around.
    0:18:51 It should be noted that many schools like ASU, Purdue, the University of
    0:18:54 Illinois system offer free tuition to students who
    0:19:01 meet minimum academic requirements. Also, 17 states provide tuition free
    0:19:06 vocational programs via community colleges.
    0:19:12 If grief is love’s souvenir, then anxiety is love’s tax.
    0:19:16 I never cared much about anything until I had boys,
    0:19:20 but now I’m anxious all the time despite having the funds for my boys’
    0:19:25 education. We’ve lost the script. The leadership and
    0:19:29 faculty of elite universities have morphed from public servants
    0:19:35 to Birkenbags. Whether you’re a stressed kid in high school,
    0:19:40 a family saving for college, an anxious parent, a college grad or dropout
    0:19:45 struggling with student debt that’s difficult to discharge in bankruptcy,
    0:19:48 or someone being asked to bail out someone who had opportunities not
    0:19:55 afforded to you, we’re all paying the price.
    0:20:05 Life is so rich.
    0:20:09 [Music]
    0:20:17 [BLANK_AUDIO]

    As read by George Hahn.

    High Anxiety

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