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0:01:28 Episode 347.
0:01:30 347 is the area code serving parts of New York City.
0:01:35 In 1947, fruit flies became the first animals to travel to space.
0:01:35 True story.
0:01:39 I was training to be an astronaut, and during training, I vomited.
0:01:41 And I asked the instructor, is this normal?
0:01:43 And he said, not during the written exam.
0:01:47 Go, go, go!
0:01:58 Welcome to the 347th episode of the Prop G Pod.
0:01:58 What’s happening?
0:02:01 The dog is in Hamburg, Germany.
0:02:05 The most interesting thing that’s happening, I’m speaking of something called online marketing
0:02:07 rock stars, which gets about 12,000 or 13,000 people.
0:02:09 I’ve been here six years in a row.
0:02:10 It’s one of my favorite events.
0:02:11 Love the city.
0:02:16 It’s like Karl Lagerfeld exploded into a city, the juxtaposition of cement and industrial
0:02:22 stuff, and then all these rich people constructing steel and glass condos.
0:02:23 Remember Wallpaper Magazine?
0:02:26 It’s like Wallpaper Magazine exploded into a city.
0:02:28 I really, really enjoyed here.
0:02:30 And one of the really nice things about living in London is everything is close.
0:02:32 It took me an hour and 12 minutes to get here last night.
0:02:33 Can you get over?
0:02:34 Hour and 12 minutes.
0:02:34 Boom.
0:02:37 Like when I lived in LA, it took me an hour and 12 minutes to get to work.
0:02:41 I’d either go to work, Figueroa, downtown in LA, or now I can go to Hamburg.
0:02:42 Incredible.
0:02:44 The world is getting smaller.
0:02:45 Quick thought.
0:02:48 I was on stage today and they asked me, what are the most seminal things happening in the
0:02:49 world?
0:02:55 I said, one, the reversal of the rivers of capital flowing, human and financial flowing into
0:02:58 the U.S. that have reversed flow and are now flowing back to other parts of the world.
0:03:05 And two, if we’re going to get serious about our deficit in the United States, we could
0:03:07 tax rich people to death, which I think we should do.
0:03:09 Let me be clear, but that wouldn’t do it.
0:03:11 We could cut Social Security or extend the age.
0:03:12 That wouldn’t do it.
0:03:13 Also, I think we should do that.
0:03:18 Counting on the interest rates plummeting to reduce the third largest expenditure, which
0:03:20 is our interest on our national debt.
0:03:21 That’s out of our control.
0:03:22 The military.
0:03:23 I believe we need a strong military.
0:03:24 Are there inefficiencies?
0:03:24 Sure.
0:03:28 But I think there’s, unlike a lot of people on the far left, I think there’s a lot of
0:03:31 very resourceful, mean people who would like to kill us.
0:03:34 And I think that it’s important that we have the biggest military in the world.
0:03:36 So where do we go from here?
0:03:38 I think all roads lead to the same place.
0:03:43 And that is, until we figure out a way to bring the cost of our health care system down from
0:03:49 $13,000 a person to $6,500, which is what it is in the other six of the G7 nations, despite
0:03:53 the fact we have worse outcomes, we live less long, we’re more obese, depressed, and anxious,
0:03:55 none of this is going to get fixed.
0:04:01 I think our only opportunity to balance the budget and also suppress or obviate a lot of
0:04:05 unnecessary or manufacturing anxiety is to reduce health care costs.
0:04:10 We pay eight times the price for Ozempic or for Humira.
0:04:13 Our hospital systems are more expensive.
0:04:16 We spend more on pharmaceuticals, despite the fact that many of these innovations are actually
0:04:17 invented in the U.S.
0:04:24 Why is it that the Gulf states get cheaper oil or cheaper gas?
0:04:24 Why?
0:04:25 Because they produce a lot of it, right?
0:04:30 If you’re in a nation that has incredible agricultural output, usually the bananas are less expensive,
0:04:30 but not in the U.S.
0:04:31 Why?
0:04:37 Because into the middle has slipped lobbyists who have weaponized a government with absolutely
0:04:42 flooding the zone with a lot of money, such that pharmaceutical firms can convince a legislator
0:04:46 that it makes sense for Americans to pay eight times more for pharmaceuticals, despite the fact
0:04:49 they’re invented, manufactured, and distributed here in the U.S.
0:04:49 Why?
0:04:53 Because there’s money involved, and every senator needs to raise $60 to $100 million to be reelected.
0:04:54 So I know.
0:04:58 Let me take money from the pharmaceutical lobby to make sure that seniors and everybody else
0:05:01 pays a shit ton way more than they should for health care.
0:05:07 All roads, and I’ve been thinking a lot about the deficit, lead to one thing, and that is
0:05:10 we need to do all of it, raise taxes, cut spending, and entitlements.
0:05:14 But the only way we’re going to get there is if we figure out a way to dramatically lower our
0:05:15 health care costs.
0:05:17 It’s also the ripest place for disruption.
0:05:22 That’s probably going to have to involve some sort of, I don’t know, executive action or laws
0:05:27 that get rid of or at least reduce the amount of money in Congress or shaming these companies
0:05:29 or these individuals, although that doesn’t appear to be working.
0:05:33 But anyways, I’ve been thinking a lot about what are the kind of, what’s the best idea
0:05:35 and what’s the biggest change in our economy.
0:05:39 One, the river of the Amazon has changed flow twice in its history.
0:05:40 It’s happening right now.
0:05:45 Human capital is reversing flow out of the United States, which is not a good forward-looking
0:05:47 indicator for the United States.
0:05:52 And any serious conversation around our deficit and getting our fiscal house in order leads
0:05:56 to a very boring place, and that is how do we figure out a way to rank down to lower the
0:05:59 costs of health care, which probably means figuring out a way to get money out of
0:06:00 politics.
0:06:01 Easy squeezy.
0:06:01 Done.
0:06:02 We’re done.
0:06:08 Anyways, in today’s episode, we speak with Anne Applebaum, a Pulitzer Prize-winning historian
0:06:09 and staff writer at The Atlantic.
0:06:13 We discussed with Anne the rise of kleptocracy in America, the global playbook of autocrats
0:06:16 and solutions to our democratic slide.
0:06:17 I really enjoyed this conversation.
0:06:18 She’s definitely having a moment.
0:06:24 I love it when people who are just in a very narrow area, her kind of, especially as
0:06:26 autocracy, she’s a historian and writing about it.
0:06:30 And when I say narrow, I don’t mean it’s not important, but she is probably the leading
0:06:32 authority in the world in autocracy.
0:06:36 And she is having a moment, which is unfortunate to be like, if all of a sudden, if someone were
0:06:41 to tell you that someone who wrote about famine or urban violence was having a huge moment,
0:06:43 that probably was not a good thing.
0:06:47 And unfortunately, Anne is having a real moment, not because she isn’t incredibly talented,
0:06:48 which she is.
0:06:53 She’s both forcefully yet dignified, but because autocracy, kleptocracy, whatever you want to
0:07:00 call it, whatever I think of it as a cacistocracy, has unfortunately taken root in the United States.
0:07:04 Anyways, with that, here’s our conversation with Anne Applebaum.
0:07:16 Anne, where does this podcast find you?
0:07:19 I am in Washington, D.C., our nation’s capital.
0:07:21 How’s the mood there right now?
0:07:24 A little paranoid, a little stressed.
0:07:26 I mean, it depends a little bit on who you are.
0:07:30 But, you know, I have a next-door neighbor who works for the Department of Education.
0:07:34 I know lots of people who worked for HHS.
0:07:37 I know plenty of people who worked for USAID.
0:07:43 And all of them are watching things they’ve worked on all of their lives be destroyed.
0:07:44 So it’s a tough moment.
0:07:48 You recently wrote a piece for The Atlantic arguing that under Trump, the U.S. is sliding
0:07:53 towards kleptocracy, a system where leaders use political powers for financial gain.
0:07:57 Before we get into the specifics, can you help ground us?
0:08:03 What exactly is a kleptocracy, and how is it different from other forms of autocracy or corruption?
0:08:09 So a kleptocracy, maybe it’s a fancy word for a profoundly corrupt dictatorship.
0:08:18 But it’s a political system in which the leaders of the country not only exercise political power,
0:08:23 but they also exercise economic power and probably own a lot of the economy.
0:08:25 So Russia is a kleptocracy.
0:08:32 You have people who have both political and economic power, you know, at the top of the system.
0:08:39 And they use, I think maybe this is the key point, they use their political influence to make money for themselves.
0:08:44 In other words, the policy of the Russian state, its foreign policy, its domestic policy,
0:08:49 is not being made for the benefit of Russians, of ordinary Russians.
0:08:56 The policy is being made for the benefit of a group of very wealthy people who earn their money out of state decisions.
0:09:00 And the U.S. is very rapidly moving in that direction.
0:09:04 There are questions now to be asked about some of our foreign policy.
0:09:14 Is it being conducted in the interest of Americans, or is it being conducted in the interest of Trump, maybe his family, maybe the business community around him?
0:09:17 That’s where you would have a real change.
0:09:27 You know, we’ve had presidents before who were incompetent or who made mistakes or whose foreign policies failed in various different ways.
0:09:37 But I don’t think we’ve ever had a president whose foreign policy and whose perhaps domestic policy are not designed for the purposes of making American life better.
0:09:39 And I think that’s where we’re heading.
0:09:51 So just to double click on that, by some estimates, the Trump family has increased their personal net worth approximately $3 billion since the launch, the Friday before inauguration of the Trump coin.
0:10:06 Can you think of any other instance in history anywhere where one president, prime minister, dictator, you know, general consul, whatever, has managed to sequester $3 billion from the economy in 100 days?
0:10:07 Obviously not.
0:10:11 You can point to many other instances of corruption around the world.
0:10:16 In U.S. history, there have been corrupt presidents in the past or people who were thought to be corrupt.
0:10:23 But that usually was, if you look at the details, there were people who perhaps tolerated some corruption around them.
0:10:29 I don’t know, Ulysses S. Grant supposedly let his wife’s family make money off government contracts, that kind of thing.
0:10:37 But there is no incidence of a president while in office, while in office, enriching himself like this.
0:10:41 I don’t think there’s any precedent for it, and I don’t think we’ve seen anything like it before.
0:10:48 How do you respond to the notion or the argument that we’ve been a kleptocracy for a while?
0:11:04 When you have Speaker Emrita Pelosi meeting with HHS and getting a sense for they’re considering using AI for payment systems, and then she goes and buys call options on Tempest AI, and when it’s disclosed, she’s purchased those call options.
0:11:12 They surge that, I mean, effectively, isn’t Trump doing what everyone’s been doing, but he’s not doing it for small ball?
0:11:15 The Democrats do it for hundreds of thousands, and he’s doing it for billions.
0:11:18 But hasn’t this been going on for a while?
0:11:25 You can certainly talk about the slide into corruption, which goes back, as you say, a while.
0:11:39 I mean, I don’t want to put a date on it, but both the—I think certainly since the Citizens United Supreme Court decision that made U.S. elections a kind of Las Vegas free-for-all, where almost any amount of money can be spent.
0:11:50 And certainly the change in ethics, I think, that meant that more and more members of Congress were using insider information to play the stock market, both Democrats and Republicans.
0:11:59 And those are, you know, those are pieces of the story and the buildup to where we are, and maybe they explain part of why so many people tolerated Trump.
0:12:16 Again, I don’t think there’s an example of any politician using office while in office to become a multibillionaire, and I don’t think it’s just a matter of numbers.
0:12:19 I think it’s a completely different attitude.
0:12:26 I don’t think Nancy Pelosi’s entire policy while she was Speaker was designed to make herself personally rich.
0:12:28 I don’t think that was her goal.
0:12:43 I don’t think that’s—and actually, I don’t say that—I don’t think there were Republicans, speakers of the House, whose political philosophy was deliberately designed to make themselves rich or who were doing things solely for that purpose.
0:12:46 And I think you can ask whether Trump is doing that.
0:12:58 You know, one of the—you mentioned his cryptocurrency business, which did a deal in the last, you know, in the last day, a day or two, with the Emirates.
0:13:01 It was a sort of major Emirati investment into that company.
0:13:16 And this actually—Trump also has a financial relationship with the Saudi government, whose state-owned Saudi companies sponsor his—a golf tournament that took place at his golf course a few weeks ago.
0:13:22 And they—the head of the Saudi sovereign wealth fund was at that tournament and as one of its sponsors.
0:13:32 In other words, these are countries with which the U.S. has political relationships and whose, you know, and whose leaders are interested in influencing U.S. politics.
0:13:39 And the president, meanwhile, has an ongoing financial relationship with those governments and with those leaders.
0:13:42 That’s not anything that Nancy Pelosi did in the past.
0:13:45 I actually see the more damaging part of this.
0:13:59 It’s not as romantic or interesting as that companies now, there’s—I would describe this sort of domino of cowardice in the private sector, where nobody wants to speak out because you do his bidding, he’ll make you rich.
0:14:07 I believe about 30 people within a few hours made $700 million in the launch of the Trump coin.
0:14:13 And then over the course of the next few weeks, when it crashed, about 80,000 retail investors lost several billion dollars.
0:14:14 So there’s upside.
0:14:16 But there’s also a downside.
0:14:21 And that is, if you speak out, he might decide that you don’t get an exemption for the tariffs.
0:14:27 Or he might, you know, implement some sort of crazy policy that just distracts or hurts your company.
0:14:29 Is that the difference?
0:14:32 Is that a slide from kleptocracy to autocracy?
0:14:49 It certainly makes the state, and in particular Trump himself, an arbiter of the economy in a way that we used to think as Americans, and I think this is even both Democrats and Republicans, was, you know, was damaging and immoral.
0:14:58 It puts the White House in a position of being able to decide who wins and who loses, you know, at least for large companies and at least in some businesses.
0:15:07 And that is a—that does make us, you know, certainly on the path to becoming a Russian-style political system, yes.
0:15:15 Speaking of going from depressing to really depressing, this isn’t like we’ve uncovered something.
0:15:19 It’s been not transparent, it’s been not transparent, but it’s been transparent, but it’s out in the open.
0:15:34 And it appears that despite what is obviously a slow creep or a fast, you know, train barreling down the tracks towards a kleptocracy, that if America doesn’t want it, it’s tolerating it.
0:15:39 I just saw a poll saying that if the election were held again today, Trump would still beat Harris.
0:15:43 And the Democratic Party is less popular than Trump.
0:16:02 Hasn’t the failure been, or do you think, the failure kind of rests with us, educators, the media, the lack of civics courses, our inability to communicate to the populace that the kleptocracies don’t typically serve the citizenship well?
0:16:08 Because as far as I can tell, America has decided they’d rather have a kleptocrat than a weak party.
0:16:10 Your thoughts?
0:16:14 I don’t know that most people understand yet what’s happened.
0:16:17 I mean, you know, these stories come very fast.
0:16:20 I actually started collecting the kleptocracy stories.
0:16:28 Some of them are in that article I wrote for The Atlantic a couple weeks ago, but I’m also collecting them, you know, for future use.
0:16:29 And there is something almost every day.
0:16:46 Either it’s a violation of the Emoluments Clause of the Constitution, which says that Trump shouldn’t, or the president, sorry, shouldn’t take money or any favors from foreign governments or foreign countries, or it’s a immersion of a new conflict of interest.
0:16:53 Somebody in the administration has clearly conflicted both a business and a political interest in something there.
0:17:02 I mean, the classic example of that is Elon Musk, who has influence now over government agencies who regulate his own companies and who subsidize his own companies.
0:17:07 I mean, that’s an outrageous conflict of interest of a kind that, you know, we would have thought was illegal.
0:17:09 Or it’s a legal change.
0:17:28 You know, the administration announcing, for example, it won’t, it will no longer enforce the Foreign Corrupt Practices Act, which prohibits American companies from bribing, using bribery abroad, or the Corporate Transparency Act, which was supposed to make the world of shell companies and anonymous businesses more transparent.
0:17:38 You know, or it’s just plain corruption of the kind that we’ve been discussing, you know, the Trump family just taking money in exchange for political favors.
0:17:41 And there’s many, many of those stories every day.
0:17:47 And I am not sure how much people are yet able to pay attention to them or to understand them.
0:17:49 I mean, there’s another problem.
0:17:57 There’s been a problem for a long time with the world of kleptocracy and the world of money laundering and shell companies and so on, which is that it’s very, very complicated.
0:17:59 It can be hard to explain.
0:18:01 I mean, I’ve read a lot of books about money laundering.
0:18:04 There have been some good ones in recent years.
0:18:06 There’s a good book called American Kleptocracy.
0:18:07 There’s a good book called Kleptopia.
0:18:12 And almost all of them would be hard for laymen to grasp.
0:18:15 I mean, it’s a story about moving money around the world very quickly.
0:18:17 It’s about shell companies.
0:18:18 It’s about manipulation.
0:18:21 And I’m not sure that people get it yet.
0:18:28 You know, what will have to happen is for people to begin to connect these stories to their own personal lives.
0:18:35 personal experience when they understand that they are poor because the Trump family is rich.
0:18:40 And this is something when you look at anti-corruption campaigns around the world, this is what the moment when they succeed.
0:18:44 So, I mean, the most famous example of this is Alexei Navalny’s campaign in Russia.
0:18:51 So, this was the great Russian dissident who died in a Russian prison some months ago.
0:18:57 And he was the most successful campaigner against Vladimir Putin.
0:19:09 And he did so by talking about theft and by talking about corruption and also by talking about how bad the roads are in Russia and how bad the hospitals are and how underpaid the doctors are.
0:19:15 And he made the case that there was a connection between these things and people understood him.
0:19:19 He made these spectacular – they were documentaries, really.
0:19:21 I was going to say videos, but they were long.
0:19:22 They were an hour or two hours.
0:19:29 And he would sketch out these elaborate schemes that the president was carrying out or the president’s entourage.
0:19:32 And he would show that sometimes they were funny.
0:19:34 They used video.
0:19:35 They used drone footage.
0:19:40 But they also showed the connection between that world and the world of ordinary Russians.
0:19:50 And that is the link that the Democratic Party will have to make and that I hope journalists who cover this stuff will also begin to make.
0:19:53 You know, it’s not enough to talk about crypto or schemes or fraud.
0:19:56 That’s something that I don’t think people get.
0:20:21 But when you explain, as I said, that they are doing this in order to benefit themselves and not you and that the policy of the United States, whether it’s the foreign policy or the domestic policy or the economic policy, is being twisted and manipulated to benefit them and not ordinary Americans, then I think you’ll begin to get some political leverage from this.
0:20:25 So there’s so many-ocracies to think about.
0:20:33 And the thing that feels even more differentiated with this administration is, OK, there’s other kleptocracies, but kakistocracy.
0:20:38 And that is, I would argue that Putin and Xi have competent people around them.
0:20:41 And I don’t think that’s the case here.
0:20:47 Any thoughts on what I think could be fairly described as a kakistocracy now in the United States?
0:20:49 Do you do much thinking or writing about this topic?
0:20:53 I don’t think I’ve ever used the word kakistocracy in my writing.
0:21:01 But maybe I’ve addressed the idea, which is that it’s the rule of the worst people or, you know, of the least competent.
0:21:11 I mean, there is something about who Trump attracts to his orbit and what kind of people want to work with him and be around him.
0:21:31 Almost anybody who has real character, who has any ideals, who has any commitment to truth-telling, to evidence, to even just to reality itself, to the world of real facts, is almost immediately made uncomfortable in the presence of Donald Trump.
0:21:47 Because Donald Trump is somebody who’s constantly seeking to shape reality to his own benefit, to change the facts, to tell a story or make up a myth, and who’s perfectly capable of being totally inconsistent from one day to the next or even from one hour to the next.
0:21:49 I mean, the tariff story.
0:21:54 One minute, he was justifying the tariffs because it’s going to bring back manufacturing to America.
0:22:01 Another minute, he was justifying them a few minutes later on the grounds that he was going to do great deals with countries.
0:22:05 But if you’re going to do deals and lift tariffs, then that’s not going to bring back manufacturing to America.
0:22:28 And so anybody who does, anyone who cares about telling the truth or about presenting accurate vision of the world, or who cares about making policy based on reality and not on this fiction that Trump promotes, is uncomfortable.
0:22:42 And that means that all the people around him are either, they’re simply manipulable and they’re willing to just do whatever he says, or they’re people who have made a big, a kind of moral sacrifice, you know, who are doing something they know to be wrong.
0:22:45 You know, and you can, sometimes you can see it on their faces.
0:22:48 I mean, I think this was the core problem that Mike Waltz had, actually.
0:22:55 You know, the reason why he didn’t fit into Trump’s inner circle wasn’t just because he put my editor, Jeffrey Goldberg, on a Signal chat.
0:23:05 It was also because he, at least in the past, had had an attachment to a certain ideas about foreign policy, a certain belief of America, what role it should play in the world.
0:23:15 And he was just unable to lie convincingly on behalf of Trump when that violated his own, you know, his own morality or his own sense of the world.
0:23:18 And he just couldn’t be around Trump any longer.
0:23:21 And, of course, that happened repeatedly in Trump’s first term.
0:23:24 And in his second term, these are people who are self-selected.
0:23:28 They’re people who know what kind of person Trump is, who want to be there anyway.
0:23:36 And so, as we used to say about Polish communists, for listeners who don’t know, I lived part of the time in Poland, either they’re liars or they’re stupid.
0:23:42 I mean, either they go along with it because they don’t know better or they go along with it but know, you know, but know it to be wrong.
0:23:45 So let’s move to potential solutions.
0:23:48 And granted, this is a naive take.
0:23:56 But my sense is the only way to step back from a kleptocracy is fairly swift punishment that sends a very strong signal that this won’t be tolerated.
0:23:59 And I don’t know if America is capable of that.
0:24:07 So, one, do you agree that it’s hard to pull back from it without pretty swift punitive action, imprisoning people or worse?
0:24:18 Or more generally, how have you seen large economies that claim to be democratic walk back from this type of kleptocracy or autocracy?
0:24:23 The country that I know best that is trying to move back is actually Poland.
0:24:28 Poland had an autocratic populist government in power from 2015 to 2023.
0:24:35 And one of the features of that government, like all autocratic populist government, is that it became very corrupt.
0:24:37 The scale was different.
0:24:39 This is Poland, not the United States.
0:24:44 You know, they weren’t, they were, they were bound by the rules of the European Union.
0:24:50 And so, as I said, it wasn’t the stunning theft that we’re seeing take place inside the United States.
0:24:55 Nevertheless, there was a lot of money stolen, in effect, from the state and put into people’s pockets.
0:25:08 And we now have, there was then an election which was unfair, but yet the opposition was able to win, partly by putting together a broad coalition, sort of center-right, center-left, liberal coalition.
0:25:15 And now they are seeking to prosecute the previous government and hold them to account.
0:25:16 And it is indeed very difficult.
0:25:25 It’s very difficult, partly because the judiciary was changed and manipulated by the previous government.
0:25:28 So that makes, that’s part of the story.
0:25:34 It’s partly difficult because the president, although this may change in a few weeks, is still from the previous government.
0:25:40 And so, and he’s been blocking a lot, he’s able to, to pardon people, actually, and block a lot of the changes.
0:25:51 But even, even mobilizing the, the prosecutors, mobilizing the state to go after in a fair and systematic and legal way is pretty difficult.
0:26:08 I mean, I think actually Poland is a lesson of how, once you destroy things and once you destroy, particularly the ethos of government, you know, once you’ve kicked out of government all the people who are there for idealistic reasons, you know, who don’t mind working for less money because they think they’re doing something on behalf of Americans.
0:26:14 And once you’ve replaced a lot of those civil servants with loyalists, it’s very hard to find new ones.
0:26:18 And that’s another, that’s a, that’s a related piece of the story I’m worried about in the U.S.
0:26:40 That once you have kicked out everyone who works for the American government because they love America and instead have people who work for the American government because they think they might make money doing it corruptly or because they’re loyal, not to America, but to Donald Trump, you’re going to, you’re, you’ll, you’ll find in later years that the government lacks capacity to do things.
0:26:46 That the people who should be there to fix problems or to manage risks aren’t there anymore.
0:26:49 It’s a long walk, walk backwards.
0:26:54 I mean, in our case, there are really three ways in which, in which this could be stopped.
0:27:09 I mean, the, the, the, actually the simplest way would be for, I don’t know what it is, three or four Republican senators and a handful, six or seven members of the House to decide they want to stop it, to join with the Democrats.
0:27:24 You know, to elect, you know, an independent or a, a bipartisan speaker and a bipartisan leader of the Senate and begin to, certainly they could end this, this fake emergency decree that Trump is using to, to impose these tariffs.
0:27:29 They could certainly begin to conduct investigations into what’s going on.
0:27:37 I mean, it’s Congress that has the investigative power to do this, but right now we don’t have, you know, we don’t have a majority in Congress that’s able to do that.
0:27:40 So that would be, that’s actually the fastest thing that could happen.
0:27:49 The second way it could happen is that voters decide at the next election, which is, you know, still many months from now.
0:27:58 But they could decide to, to hand Congress to the opposition political party to enable them to conduct this and enable them to do it.
0:28:06 But that would require a really decisive vote from a lot of people, including in red states, because the moving the Senate is, is not so easy.
0:28:13 And then, you know, finally, we would need the courts to begin to respond.
0:28:18 This would have to probably happen via lawsuits to begin to demand some kind of change.
0:28:28 I mean, the, the, the, of course, the tragedy is that the real, the bodies in our system who are supposed to investigate federal corruption are the Department of Justice and the FBI.
0:28:31 And those are controlled by Trump.
0:28:35 So they’re not available to us right now as, as, as tools to do that.
0:28:42 But maybe it would, it would, we would now have to wait for a future president, unless, of course, this president was impeached.
0:28:45 We’ll be right back after the break.
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0:30:05 Should university presidents take public stances on political issues or remain neutral?
0:30:12 And I think people like me who have access to platforms like yours should speak out to stop authoritarianism.
0:30:14 I’m Preet Bharara.
0:30:20 And this week, Wesleyan University President Michael Roth joins me on my podcast, Stay Tuned with Preet,
0:30:26 to discuss the role of college leaders in turbulent times and why he has chosen to speak out
0:30:29 as the Trump administration takes aim at higher education.
0:30:32 The episode is out now.
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0:32:01 My understanding is that in leading up to World War II, that the private sector in Germany basically did sort of a deal or several deals with Hitler that said,
0:32:07 you bust our trade unions, you financially favor us, and we’ll support you.
0:32:10 And then it kind of spun out of control, so to speak.
0:32:13 And it got to a point where they were powerless to do anything about it.
0:32:20 Do you see any parallels in terms of the private sector in Germany enabling Hitler with what’s happening here?
0:32:27 Specifically, I’ve just been shocked that all of these independent thinkers who think of themselves as leaders have been so quiet.
0:32:36 And it’s just sort of gone along, whether it’s paying $30 or $40 million for some documentary on the First Lady or deciding that,
0:32:47 no, just kidding, I’m not going to put tariffs on the pricing page or just not saying anything when you know that they’re very much against some of these policies.
0:32:56 What’s your observation around the private sector in America right now as it relates to this and any historical references?
0:33:04 So I’m always reluctant to compare America to Nazi Germany because then all anybody can think about is how Nazi Germany ended.
0:33:13 And I didn’t feel like there’s going to be a Holocaust here very soon, so it always creates the wrong image.
0:33:17 It also creates an image of dictatorship that’s wrong.
0:33:24 You know, when people think of Nazis, they think of stormtroopers and people goose-stepping through the streets and that that’s what authoritarianism looks like.
0:33:27 And, of course, in the modern world, that’s often not what it looks like.
0:33:39 You know, the democracies end nowadays usually because they are a democratic elected leader slowly takes over the institutions of the state or quickly.
0:33:44 And it can take some time and it can be very smooth and it doesn’t necessarily involve violence.
0:33:47 And so that’s the way democracies fail.
0:33:59 If you look at Hungary, if you look at Turkey, if you look at Venezuela, if you look at what almost happened in Poland but wasn’t completed, you know, that’s not a – there isn’t mass violence or street violence of the kind.
0:34:01 So that’s why I didn’t like the comparison.
0:34:21 However, having said that, you are right that there are multiple instances of company heads, business people, you know, in Nazi Germany, in other autocracies, thinking that they can do a deal or they can benefit from the system and that they won’t eventually suffer.
0:34:23 And there are also multiple instances of them ultimately suffering.
0:34:31 I mean, of course, the German economy, you know, the stock market went up and up and up, I think, until Stalingrad or, you know, some turning point of the war.
0:34:34 And then it collapsed never to recover.
0:34:39 And, you know, many businesses were destroyed and people’s lives were ruined.
0:34:40 I mean, that’s an extreme example.
0:34:54 But even in – even if you look at Hungary, you know, lots of business people who thought at first, you know, Orban was talking, you know, talking the talk of free markets and he was somebody who was going to be friendly to them.
0:35:10 I mean, they too slowly lost control of their companies as the Hungarian state played a bigger and bigger role, somewhat like Trump wants to do, in deciding essentially who got rich and who didn’t, in making the rules of the system so that they would benefit a particular group of companies who are close to him.
0:35:18 In his case, it’s his son-in-law who became very rich rather than his sons and a couple of his childhood friends.
0:35:22 And eventually, I mean, I know a Hungarian businessman who wound up leaving the country.
0:35:25 I mean, he eventually sold his businesses in the country.
0:35:26 He moved away.
0:35:32 He was very – he had some – still had relatives there, so he’s been rather quiet.
0:35:39 But he understood finally that he couldn’t operate anymore in his system unless he was going to have a kind of corrupt relationship with the ruling party.
0:35:52 And I’m afraid that American businessmen, I mean, especially the big businesses, are making a huge mistake by imagining that it’s going to be good for them in the long run to go along with this.
0:36:10 Because if they cede that kind of power to the White House, you know, if they let the White House make arbitrary decisions, whimsical decisions about who can do this deal and who can – who’s allowed to escape the tariffs and who can’t, then first of all, it’s bad for the economy in the long term.
0:36:26 But also, at some point, they could very well end up on the wrong side of that deal as the whim moves in the other direction and as others become favored.
0:36:35 And, you know, there’s – you know, in almost every case that I’ve mentioned, sooner or later, the economic decline catches up.
0:36:37 I mean, Hungary is a great example.
0:36:43 It’s a country that was the – you know, the early 1990s, which is when I first started going there.
0:36:46 It was the kind of gem of Central Europe.
0:36:49 They started privatization early in the 1980s.
0:36:52 By the time communism fell, they were ready for it.
0:36:54 There were a lot of good investment opportunities.
0:36:56 A lot of foreign companies moved into Budapest.
0:36:57 It’s an attractive city.
0:36:59 Food was good.
0:37:03 And, you know, and it felt like it was moving upwards.
0:37:09 But since Orban has taken over, you saw the boom continue for a while.
0:37:22 And in recent years, you’re now beginning to see this very distinct decline, so much so that Hungary, depending on which measurement you use, is either the poorest country in the European Union or the second or third poorest.
0:37:30 But it’s – you know, it’s – and it’s behind in all kinds of measures of productivity, of governance, has a very poor healthcare system, poor education.
0:37:41 It’s sliding downwards, and the slide downwards is directly connected to the authoritarian system that Orban built and, of course, which many people around Trump admire.
0:37:43 You know, it enabled corruption.
0:37:45 It gave too much power to the state.
0:37:53 It gave too much power to the people around Orban to – again, to decide, to make rules and laws that benefited them and their friends.
0:37:56 And ultimately, it was bad for everybody else.
0:38:00 It also encouraged a lot of educated Hungarians to leave the country.
0:38:02 I mean, they have an emigration problem.
0:38:08 And despite all this kind of pro-family rhetoric that Orban uses, people don’t seem to want to have children there.
0:38:11 And they often leave if they can.
0:38:15 And so that’s a – it’s a good indicator.
0:38:19 I mean, almost every one of these countries – I mean, and there are more extreme examples like Venezuela.
0:38:31 You know, countries that are – that lose out where too much power goes to one person, where institutions decline, where the independent judiciary declines, where the rule of law declines.
0:38:34 Sooner or later, there’s an economic impact, and it’s negative.
0:38:36 And, you know, Jeff Bezos should know that.
0:38:42 And, you know, everybody who runs a large company or a bank in this country should be aware of that.
0:38:44 I mean, they’re – and they have some other options.
0:38:48 I mean, I understand that nobody wants their company to be picked out or attacked on true social.
0:38:58 But there are ways in which they could work together, you know, which universities could work together, law firms could work together, and companies could work together too and begin to speak collectively.
0:39:00 And I think that might make a difference.
0:39:11 Just for the purposes of some discussion here, just some pushback, I find that I get a lot of pushback whenever I compare the U.S. right now to 1930s Germany.
0:39:13 You know, he’s not a genocidal maniac.
0:39:14 Say what you will about him.
0:39:15 Okay, granted.
0:39:27 But I see a nation that was arguably over the last 200 years the most progressive enlightened nation in the world, and it wasn’t the U.S., it was Germany, that descended into this darkness for 11 years.
0:39:29 And what did they have?
0:39:32 They started demonizing immigrants at an economic shock.
0:39:35 They started – I mean, what do we have in the U.S.?
0:39:45 We’re essentially in some form – it’s a new form – but we are rounding up people, in a sense, and sending them to the equivalent – I won’t call them concentration sites, but black sites.
0:39:50 We have someone with extreme nationalist rhetoric who sees the world as a zero-sum game.
0:39:54 All of our problems are because of the gains of other nations.
0:40:06 And also, what I think is the most dangerous component that’s similar to 30s Germany, we have a huge group of a population that tends to be more risk-aggressive and more prone to violence, specifically young men who are really struggling.
0:40:19 And what I would offer a question and ask you to respond is, is the U.S. that much less likely to get to that very dark place in four years than Germany was in 1935?
0:40:28 So, again, the only reason I hesitate with the Germany comparison, as I say, is because of how it ended and because we know the end of the story.
0:40:38 But you are right that if you look at Germany in 1933, which was the beginning of the story, you can find some parallels.
0:40:49 And you’re also right that the – you know, one of the important comparisons to make is the speed with which a country can transform itself.
0:40:56 You know, that we have – we all have this image in our head of the United States as being on some kind of even keel.
0:41:00 You know, everything has been the same for so long and it will go on being the same.
0:41:03 But countries do experience rapid declines.
0:41:05 You know, they do experience rapid change.
0:41:08 And we had it once before in our history during the Civil War.
0:41:15 I mean, you know, we – our country plunged into violence and thousands of people killed thousands of other people.
0:41:21 I mean, I don’t foresee that happening now, but you can have moments of profound change.
0:41:36 And you are right that people who are too complacent and who believe it could never happen here because of our history, because of who we are, because we’re exceptional, whatever story they’re telling themselves, are missing the frequency with which this can happen.
0:41:39 So, you know, I agree.
0:41:47 You know, it’s also useful because you’re also right that what happened in the early 30s is a pattern that you see in other places.
0:41:58 So, again, it’s a leader who is legitimately elected or chosen, as Hitler was initially, you know, then deciding to take over the institutions of the state.
0:42:06 In other words, take over the civil service, politicize that, take over the judges, politicize them, attack the media.
0:42:12 Actually, Hitler had this phrase Lugin Presa, which means lying presa, which is something like fake news.
0:42:21 The same institutions that he was attacking – and these are, of course, also the institutions that Orban attacked or that Chavez in Venezuela attacked.
0:42:25 By the way, this doesn’t have to be a right-wing – it doesn’t have to be a right-wing leader who does it.
0:42:27 You can also have left-wing version as well.
0:42:35 You know, all these moments when you see a rapid period of decline, it’s the same institutions being attacked and undermined.
0:42:36 And that is happening here.
0:42:39 And in that sense, your comparison is correct.
0:42:44 Some of your writing and the writing of others is really – is illuminated.
0:42:46 And let’s be honest, I’m a glass-half-in-the-be kind of guy.
0:42:51 I’m always thinking about the end of America, how it might happen.
0:42:58 And some of the stuff I’ve read, to your point, made me believe that it happens not with a bang, but with just a thud or a whimper.
0:43:12 And an example or a scenario, and I want you to respond, 2028, four major states refuse to certify the election and say, we don’t – we don’t recognize this president.
0:43:19 And California, basically, fifth-largest economy in the world, starts doing trade with the Asia-Pacific room.
0:43:22 It’s a technology-based economy, develops its own leadership, its own currency.
0:43:27 Texas, oil and gas economy starts its own currency.
0:43:34 Different set of values, maybe Florida in the south and maybe the northeast is more about finance with strong relationship with Europe.
0:43:43 But basically, we become four nations the size of, I don’t know, France and the UK, lose all of our scale, lose a lot of our power, infighting,
0:43:46 don’t like each other, start putting up fences and borders.
0:43:54 And America just slowly kind of fades, not to black, but fades to a much less powerful, inspiring form of black and white.
0:43:59 Your thoughts on that scenario and could it happen?
0:44:03 And if it could, what – I mean, well, I’ll start there.
0:44:07 Do you think that is in any way a reasonable scenario?
0:44:13 So I would like Americans to be open to the idea
0:44:19 of thinking and imagining scenarios like that because – precisely because of how you ended your question,
0:44:24 because it will help us think about how and why we might want to prevent it.
0:44:33 You know, I don’t know if it’s reasonable to imagine California breaking off or whether Texas having its own currency is possible.
0:44:50 Well, I can imagine very easily, I can imagine a challenged election in which some states either don’t certify or some – or don’t accept the result.
0:44:55 And you can imagine in many different versions of how that could work out.
0:45:01 And there is a president who’s not recognized by some state governors.
0:45:04 And as I said, we came very close to that in 2020.
0:45:12 And there are still – I don’t know what the percentages are now, but at some – it was at one place between 20 and 30 percent of Americans thought the 2020 election was stolen.
0:45:16 What if that number was 60 percent or 70 percent?
0:45:21 You know, what if most people thought that the president was illegitimate and had good grounds for thinking that?
0:45:31 Then all kinds of – you know, then you have all kinds of federal institutions losing credibility and people asking whether they still need to obey the law.
0:45:38 You know, what happens to the FBI in those circumstances or the Department of Justice or the instruments that the president has to use.
0:45:49 So a kind of radical weakening of the presidency following this period of kind of hyperpower being given to the presidency is something I can easily imagine.
0:46:00 And the fact that Donald Trump introduced into our system this profound doubt about elections means that you can now hear it on both sides, actually.
0:46:06 I mean, you can hear – you know, I don’t know how much time you spend on social media, probably not so much.
0:46:15 But you can see there’s a piece of the left who believed the 2024 election was stolen by Elon Musk, you know, or by Trump.
0:46:27 And that uncertainty about results and that doubt about the system, you know, what if that grows to a level that makes people question the legitimacy of the whole system?
0:46:31 And that’s the version that I think we could be quite close to.
0:46:35 So, yeah, and I think people – it’s useful to imagine it.
0:46:41 It’s useful to think through scenarios because that reminds people, I think, of what’s at stake.
0:46:48 I mean, one of the things I find so frustrating is gearing up for the House races in 2026.
0:46:56 I mean, I think I’m, like a lot of Democrats, frustrated that we haven’t had a more robust response, if you will.
0:47:08 Do you have any thoughts – I’m sure you’re going to ask for your advice – on what, based on what you’ve seen historically, what – if people do, in fact, think this is dangerous and bad for America,
0:47:18 what is sort of a playbook for a more greater viscosity, more tensile strength response than what is happening now?
0:47:30 Well, first of all, in every time you see the rise of an authoritarian in any country, one of the first things that happens is that the opposition splinters.
0:47:37 Because the rules of politics have changed, sometimes in ways that people don’t initially understand.
0:47:43 And the – whatever was the previous opposition doesn’t understand the new rules.
0:47:47 And they fight with each other and they split into different parties.
0:47:55 You know, look, a country like Iran, the political opposition, you know, had dozens of parties who fought with each other and, you know, for years.
0:47:57 Russia, same story.
0:48:00 Venezuela, until recently, also the same story.
0:48:02 You know, Hungary, the same story.
0:48:18 That, you know, you had the rise of Orban and in response, you know, you had the left and the Greens and others, you know, fighting one another, you know, rather than unifying or finding a way to push back against the damage that he was doing.
0:48:21 So this is normal.
0:48:24 And so some of that – some of what we’re seeing is the same.
0:48:27 I mean, I heard this kind of frustration in Poland in 2016 and 17.
0:48:28 It was the same thing.
0:48:30 You know, the opposition is powerless.
0:48:31 They can’t fight back and so on.
0:48:38 One of the things that needs to happen is for people to understand the rules are different, that the things that divided us before can’t divide us now.
0:48:48 You know, there was a scene just – was it yesterday or the day before – of, you know, Palestinian activists attacking AOC at one of her events.
0:48:50 I mean, this is a kind of own goal.
0:48:51 Allies turning on allies.
0:48:55 And that’s kind of – you know, that’s something that has to be avoided.
0:49:18 But also, I think the Democrats need to look for what are the stories, what are the narratives, what are the – what are they going to find that unifies not only them and not only brings together different kinds of Democrats, but also reaches people who voted for Trump or people who stayed home, you know, people in the rest of the country.
0:49:31 And actually, one of the things that might eventually work once people – once it begins to sink in is the idea that I spoke about before, this idea of corruption and its link to your well-being.
0:49:37 You know, and you hear – you’re already hearing some of it, you know, when AOC and Bernie Sanders talk about oligarchy.
0:49:46 When – I think it’s Elizabeth Warren who keeps saying, you know, they’re getting rich and you’re not – you know, and you’re losing your – you’re going to lose your health care.
0:49:56 Beginning to make those links between what people are seeing and hearing, you know, even if vaguely about Trump and the people around him and how it affects people.
0:50:05 I mean, the same is true actually for the decline in the justice system is that, you know, when you talk to people about judicial independence, that can be a little bit too theoretical.
0:50:15 When you begin to say, you know, look, these are – you know, you’ve had these, you know, illegal deportations of people who are in this country legally.
0:50:18 You’ve had, you know, even U.S. citizens being detained at the border.
0:50:25 There – you know, this is a new, you know, a new system and eventually it could be coming for you.
0:50:36 And when you link together people’s personal experiences and the political, you know, mess that they see around them, I mean, I think then you begin to get powerful narratives that move people.
0:50:45 I mean, there’s a – you know, there are probably, you know, names and tactics I could – I could – you know, that might work here that you’ve seen in other countries.
0:51:08 But I think the most important thing is for not just Democrats but for Democrats and for company bosses and for heads of law firms and for, you know, disappointed and distressed Republicans to begin to coalesce on a definition of what’s wrong that can be made clear to people and to begin to offer an alternative.
0:51:11 We’ll be right back after the break.
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0:54:11 We’re back with more from Ann Applebaum.
0:54:16 I just want to move to the business of Ann Applebaum.
0:54:24 My sense is you’re having this extraordinary moment, and I imagine it’s been a lot of, you know, successes.
0:54:29 I love the statement, after working my ass off for 30 years, I’m an overnight success.
0:54:31 I see you everywhere.
0:54:34 And by the way, I think it’s wonderful.
0:54:44 How are you, I don’t want to say taking advantage of it, but how do you think about this moment for you, and how do you try and get your message out there?
0:54:51 Are you trying to write more, get better at social media, trying to hire people to manage your social media?
0:54:53 Tell me about, like, Ann Applebaum, Inc.
0:55:07 How do you manage to scale your message such that it can have as much impact as it can, given this, quite frankly, this moment in time where your work has real resonance?
0:55:17 So, I’m not sure that I think about myself as a business that needs to be managed, but, and for better or for worse.
0:55:22 I mean, I think it is, you can, it’s fair to say that I have changed some of what I do.
0:55:29 So, I did spend, I don’t know, the 90s and 2000s and into the 2010s, a lot of what I was doing was writing history books.
0:55:34 You know, I wrote histories of the Soviet gulag, the Ukrainian famine, and so on.
0:55:48 And it was really, for me, there was a big turning point in 2015, when first in Poland and in Hungary, and then in the UK and the US, I saw, you know, I felt, I suddenly realized that I was watching a very big change.
0:56:01 I was, there was a, there was an intellectual shift going on around me, particularly among, because I was kind of part of a, I was an anti-communist, and I knew a lot of conservatives, and a lot of my friends were in the conservative world.
0:56:05 And I saw this conservative world begin to split, and part of it begin to radicalize.
0:56:11 And then I wrote a book about that, and then I, I, I, I wrote another short book.
0:56:30 And, and, and, and you are right that I do now think more about how to find ways of telling the stories that I studied and telling the, you know, describing the bad ends that I know from history and, and warning Americans not to go down those roads.
0:56:38 And I don’t know, I, I, I, I’m not sure that I do it systematically or well, but I do it through, I, I talk a lot more than I used to.
0:56:40 I mean, I do podcasts.
0:56:46 I, I didn’t used to do any television, partly because I didn’t want to, and now I do it if you ask me, if I, if I have time.
0:56:53 You know, I understand that there are different ways to reach people, that not everybody’s going to read my 500-page history of the Gulag.
0:57:03 And so if I, if I have to talk about what a concentration camp is, which, by the way, they, those concentration camps in Guatemala, I mean, in El Salvador are, that’s what they are.
0:57:09 And, and the definition is a site that’s not subject to the laws of the, the country sending people to that site?
0:57:11 Is that the right definition?
0:57:18 A concentration camp is a camp where people are sent who are neither prisoners of war nor necessarily convicted criminals.
0:57:19 It’s somehow outside the law.
0:57:25 It’s people who are being sentenced not for necessarily what they’ve done, but for who they are.
0:57:28 And that’s, certainly that defines some of the people who have been sent to.
0:57:43 So, so, so yeah, I feel obligated to, to, to, to talk and speak more, but, um, I don’t know, may, if there were, if there were something that I could do to get the message through more effectively and to more people, I would do it.
0:57:50 Um, I, um, you know, I, I, I don’t come from a show business world or a, or a, or really a television world.
0:58:04 Uh, you know, I, I, I’m, I’m somebody who writes books and articles, figuring out how to make what I studied and what I do, how to, how to make it clear and simple and to transmit it in a way that people understand.
0:58:07 I mean, that I do spend time thinking about how to do that.
0:58:08 I guess that’s the best way to put it.
0:58:14 So we entered college the exact same year, uh, you at Yale, me at, uh, UCLA.
0:58:19 You’re now, um, I think a senior fellow at Johns Hopkins.
0:58:19 Is that right?
0:58:20 Yep.
0:58:22 There’s something called the Agora Institute there.
0:58:23 And I’m, I’m fellow there.
0:58:33 I’m curious, well, I’ll put forward a thesis that at universities, our inclinations are Democrats, almost like Democrats, our inclinations are correct.
0:58:35 Our heart’s in the right place.
0:58:38 We take things too far and we invite an overcorrection.
0:58:44 How would you, what role, if any, do you think universities have played in inspiring an overcorrection?
0:58:47 If that, if you believe that’s true.
0:58:53 And two, what role do you think university leadership has to play in an attempt to push back on this autocracy?
0:59:11 So when you’re talking about universities, it’s actually a really fraught subject because the truth about what actually happens at universities and what was written about universities and what people think about universities can sometimes be quite separate.
0:59:22 And this was true both during the cancel culture moment of a few years ago, you know, and it was very true of the Gaza protests, for example, last spring.
0:59:24 I’ll just give you an example of what I mean.
0:59:32 I was a, I did a lecture at Northwestern University last year, and it was right at the height of the protest movement.
0:59:34 And there were a lot of protest movements there.
0:59:43 And I talked to a group of journalists who, student journalists, who were, who were, it was a class I spoke to before the lecture.
0:59:53 And I asked them to tell me about how many people on the campus, which is about 20,000 people or 22,000 people at Northwestern, how many people actually cared about these protests?
0:59:55 What, how, what number did they guess?
0:59:59 And they said, well, there’s probably about a thousand people who care, who know about it, who follow it.
1:00:00 Okay.
1:00:03 How many people have actually been to a protest?
1:00:04 Maybe 500.
1:00:10 You know, how many people go regularly, live in tents, you know, care about it intimately?
1:00:14 That was certainly no more than 50.
1:00:15 And sometimes it was just a couple dozen.
1:00:22 So out of 22,000 people, there were a few dozen who were making the news.
1:00:27 Then we started talking about the slogans that were used at the protest.
1:00:28 And these were kids.
1:00:30 I mean, they were sort of in their early 20s.
1:00:31 They’d never done journalism before.
1:00:32 They were editors and work.
1:00:34 They worked on the student newspaper.
1:00:47 And one of them said to me, you know, the thing that had been most shocking for him was to learn that every time, whatever was the most extreme slogan, whether it was anti-Semitic or anti-Muslim, you know, whatever was the most extreme thing.
1:00:55 If someone took a picture of that on a given day, that slogan was the one that would be in the Chicago Tribune the next morning.
1:01:04 And so, you know, you had, I don’t know, 21,500 students on this campus who were not involved in this.
1:01:09 You know, you had 22, 25 kids who were very angry.
1:01:13 You know, one of them made a poster, and that was the news story.
1:01:23 And so there were stereotypes and exaggerations about what students were up to and what they did that I think became very unfair.
1:01:53 So I think, you know, it’s also become the case that because of the nature of social media and the way that news spreads, you know, one incident, you know, one crazy person at Yale or at UCLA or at wherever, you know, University of Colorado can do something crazy or make a statement or disrupt a lecture or post a blog or do something that suddenly will make him or her the focus of a kind of frenzy, you know, of one kind or another.
1:01:59 And I don’t think that was ever very representative of everybody’s life on a university campus.
1:02:05 And I’ve had kids who’ve been through university since then, and I know, I teach a little bit, so I know kids that age.
1:02:15 And I mostly found them, you know, they were wary of this kind of extreme politics, you know, on both sides.
1:02:17 They were mostly pretty moderate.
1:02:30 You know, most of them were, you know, did their homework and, you know, went to their, you know, lacrosse matches and weren’t engaged in the kind of bitter campus wars that you read about in the newspaper.
1:02:43 And so I think the, I think a lot of, you know, and then of course the campus wars became important to conservatives and to some on the left as a, as a way of fighting about other things.
1:02:48 And so I think, I think the, the campuses were really did, you know, it was a bad service was done to them.
1:03:02 And having said that, there were plenty of university professors and in particular, but also university presidents who weren’t clear enough about the basic, what should have been the basic rules for any university.
1:03:14 You know, we, you know, we, you know, free speech, tolerance of views, you know, due process for people accused of things, whether they were accused of political crimes or, or, or sexual assault.
1:03:20 You know, the, the, the, the, the presidents and the faculty also became caught up in these various frenzies.
1:03:28 And in some cases became afraid of, you know, they, they, they, these institutions also became afraid of becoming the subject of attack.
1:03:45 And so, you know, we had a, we had a, we had a long and ugly moment that actually, I think we were beginning to recover from until, you know, until the Trump administration came, came to office and decided that what it really wanted to do was destroy the universities altogether, which I do believe is their goal.
1:03:53 I mean, I think they, I think their goal is, and it’s not just about correcting some kind of lefty excesses on campus.
1:04:00 I think they want to, they, they see universities much as, again, Orban did, or, or indeed almost any authoritarian did.
1:04:06 The Chinese apparently are very interested in what’s going on in the U.S. because they see echoes in their own history, the cultural revolution.
1:04:13 You know, they see them as places where, you know, people exchange ideas, where they, they seek for truth.
1:04:17 They try to establish facts, whether those are scientific facts or historical facts.
1:04:28 And, and, and those are the kinds of people who’ve been taught critical thinking and who’ve been taught to ask questions that are a problem for a president who wants people to accept his lies.
1:04:31 You know, he, he, this is a president who lies every day, several times a day.
1:04:33 He lies about the price of gas.
1:04:36 He lies about, you know, his tariff policy.
1:04:40 He lies about everything and he doesn’t want people to question him.
1:04:46 And they, they want to be their, their, you know, their movement to be accepted and not questioned.
1:04:51 And they see universities as the source of a kind of, it’s not even a political opposition.
1:04:53 It’s the source of intellectual and moral opposition.
1:04:56 And I think that’s why they want to destroy them.
1:05:05 So, so although there was a case for university presidents to be braver, for university faculty to, to, to become, to be less political.
1:05:10 And by the way, you know, keeping in mind that it was always a small percentage on any given campus.
1:05:16 And certainly when looked at, at the thousands of universities across the country, there was a, certainly that you could make that case.
1:05:21 But it seems to me that what’s happening now isn’t even an overcorrection.
1:05:23 It’s a, it’s a, it’s a different project.
1:05:24 It’s a much more extreme project.
1:05:27 So last question.
1:05:33 I’ve been shocked whenever I meet an actor, one of the, and I’m talking about kids, they almost universally said,
1:05:35 I just would not want my kids to go into this industry.
1:05:44 Would you encourage your kids to be authors or write for a magazine or be a historian?
1:05:48 How, do you think your industry is a good industry for young people to enter?
1:05:52 So I don’t think, I have two kids and neither of them is interested.
1:05:56 So we’re, you know, I don’t have to, I don’t, I don’t have to worry about it.
1:06:02 All those, um, look, I, I, I still know a lot of really great journalists.
1:06:12 I know people who are dedicated to investigating important stories, who write about crises around the world.
1:06:20 I was just corresponding this morning with a photographer who I’m working with, who’s in Sudan and who’s witnessing a horrific moment in that war.
1:06:22 There are refugees escaping into Chad.
1:06:23 She happens to be there.
1:06:23 She’s taking pictures.
1:06:25 I’m going to write something short.
1:06:29 I was, I was there a few weeks ago and I’m going to write something short to go with her photographs.
1:06:40 And, you know, I see that people who are, you know, who, who, who believe in this kind of work and who want to do good work are, are still there and they have interesting careers and great lives.
1:06:45 I mean, you don’t become super wealthy and you don’t necessarily become super famous.
1:06:47 It depends on, you know, maybe you get lucky or maybe you don’t.
1:06:53 But, but I, but it’s a, I see that the people in the industry feel they’re doing something good.
1:06:56 And so, yeah, I would recommend that people do it for the moment.
1:07:02 We still have, there are still places to write for some big places, some small ones.
1:07:17 If you’re, if you’re interested in doing investigative journalism, if you’re interested in reporting, if you like writing, if you want to convey ideas, if you care about ideas, if you want to be engaged in, in political debate, there’s, there is space to do it.
1:07:25 I mean, there is a lot of junk out there and a lot of really bad journalism and a lot of video clips that, you know, we don’t all need to see.
1:07:33 But, but, but there, but there’s a, there’s a, there, there’s a real world and, and I hope younger people join it.
1:07:35 There’s still space to do it.
1:07:39 Ann Applebaum is a Pulitzer Prize winning historian and staff writer at The Atlantic.
1:07:42 She is also a senior fellow at Johns Hopkins.
1:07:50 Her books include Gulag, A History, Red Famine, Stalin’s War on Ukraine, and her latest Autocracy, Inc.
1:07:55 She joins us from her home or office or home office in Washington, D.C.
1:08:09 And I just love seeing people such as yourself who have gone a million miles deep on a, not a fairly narrow topic, but you, you, you, you literally are the Autocracy person.
1:08:13 And it’s just very rewarding to see the kind of recognition and influence you’re having.
1:08:22 And you’re forceful, yet dignified, and you’re one of the few people that, and this is one of my many flaws, I fall in love with my own ideas and look for reasons to validate them.
1:08:29 But whenever you say something that isn’t congruent with my current thinking, I stop and I question my own beliefs.
1:08:30 And I think that’s really important.
1:08:33 So I really appreciate your good work.
1:08:35 That is a really kind thing to say.
1:08:36 Thank you very much.
1:08:42 You know, I’m a listener and a follower and, and I look forward to hearing what you have to say in the future too.
1:08:43 Thanks, Dan.
1:09:03 Oswer of Happiness, this notion of autocracy, kleptocracy, and I brought up the notion of cacostocracy with Anne.
1:09:16 And what I would argue, the difference between, you know, a lot of individuals who are really talented make good livings, but the reason they don’t make exceptional livings, and maybe that’s not their goal, maybe they just want to do their thing and make a good living.
1:09:17 There’s nothing wrong with that.
1:09:22 But I would argue if you want to make a great living, obviously you have to be talented.
1:09:28 And I can’t figure out if raw talent is 51% or 49% of the whole package of making a really exceptional living.
1:09:29 I’ve managed to make an exceptional living.
1:09:30 I think I’m talented.
1:09:31 I’m not humble.
1:09:36 But hands down, the secret sauce of my success is two things.
1:09:45 One, an ability to endure rejection and never get afraid to ask investors to invest in me, ask talented people to come to work for me, ask clients to be my client.
1:09:47 I was never, you know, no never held me back.
1:09:52 I’ve gotten a lot more no’s than yeses, and that’s the key to yes, is a lot of no’s and the willingness to endure it.
1:09:58 But two, I have always understood from a very young age that greatness is in the agency of others.
1:10:12 I’ve always invested a lot in people, and constantly I am thinking about, I think more about, what do I think more about than clients or expenses or the product, whatever it is I’m offering at the companies I’ve been running?
1:10:16 I think about, who is really good, and how do I make sure they stay?
1:10:23 Because the cost of replacing someone really good is just genuinely going to be a lot more than the cost of trying to keep someone.
1:10:28 And the way you keep them is one, first and foremost, you pay them well.
1:10:33 I want to make it really difficult for anyone to leave, especially anyone who’s really good.
1:10:35 And that comes down to compensation strategy.
1:10:44 And you don’t like to say this at all hands, but I generally believe there’s a small group of people that drive the majority of the value at medium and big firms.
1:10:47 At a small firm, you can be kind of a SEAL team.
1:10:49 You can pick mostly or have mostly really outstanding performers.
1:10:54 Your ratio of A performers to B performers can be like 50-50.
1:11:01 It’s never going to be 90-10 because the really best performers, no matter how profitable you are, it is very hard to pay everyone really, really well.
1:11:04 But most big firms, it’s usually 10-90.
1:11:09 And that is 10% of the people drive 120% of the value, and the other 90% are negative 20.
1:11:15 And you have to have B players to scale a business because A players want a lot of compensation and equity or they want to go start their own businesses.
1:11:21 And you have to convince them, better than doing your own thing or going to Salesforce or Google, you’re going to do really well here.
1:11:23 So you have to give them a lot of equity, a lot of compensation.
1:11:26 But I’ve now gotten to the point where I get a lot of joy.
1:11:27 And I’m rounding third.
1:11:41 I’m monetizing a lot of the brand equity and work that I’ve invested over the first four decades of my career, more of the last four decades, hopefully, and trying to overcompensate people, not only financially, but I’ve got a good manager in place.
1:11:42 I think about kids.
1:11:43 I send them on vacations.
1:11:53 I try to, you know, invite them to cool stuff, try to give them a little bit of, I don’t know, some of that riz or fame in terms of speaking gigs or whatever it is.
1:11:56 But loyalty is a function of appreciation.
1:12:00 And loyalty is absolutely a function of shareholder value, or shareholder value is a function of loyalty.
1:12:01 So then how do you get to loyalty?
1:12:03 It’s appreciation.
1:12:04 You pay them well.
1:12:05 I try to overcompensate them.
1:12:08 And you try to make their job rewarding or somewhat cool.
1:12:09 Also, what do you do?
1:12:11 You hold people accountable.
1:12:13 And that is, on a regular basis, you let people go.
1:12:14 And that’s not what you hear at all hands meetings.
1:12:21 But it’s important because everybody at a firm needs to be able to look left and right and say, maybe I don’t love this person, but I get why they’re here.
1:12:29 And if they are looking at someone who’s not very good or not working very hard or not as committed, it reduces their commitment.
1:12:33 Or they start thinking, maybe I should go somewhere else where I’m compensated for my additional commitment.
1:12:38 In sum, if you have a lot of talent, you’ll make a good living.
1:12:42 But if you want to make a great living, you have to understand how to build an organization.
1:12:47 And recognizing that greatness is in the agency of others is paramount.
1:12:49 It’s the difference between a practice and an enterprise.
1:12:52 It’s the difference between making a good living and making a great living.
1:12:56 It’s the difference between having a voice and having an enormous impact.
1:13:00 This episode was produced by Jennifer Sanchez.
1:13:02 Our intern is Dan Shallon.
1:13:04 Drew Burrows is our technical director.
1:13:07 Thank you for listening to the Prop G Pod from the Box Media Podcast Network.
1:13:12 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn.
1:13:18 And please follow our Prop G Markets pod wherever you get your pods for new episodes every Monday and Thursday.
1:13:22 We will catch you on Saturday for No Mercy, No Malice.
1:13:22 We will catch you on Saturday for No Mercy.
1:13:24 We will catch you on Saturday for No Mercy, No Malice, and we will catch you on Saturday for No Mercy.
1:13:24 We will catch you on Saturday for No Mercy.

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0:00:50 Finding your personal style isn’t easy
0:00:52 and the fashion powers that be
0:00:54 aren’t making it any easier on us.
0:00:56 The best way to make sure they move a lot of units
0:01:01 is to make stuff that is, to put it indelicately,
0:01:01 sort of boring.
0:01:03 This week on Explain It To Me,
0:01:05 how to cut through the noise
0:01:07 and make sense of your own fashion sense.
0:01:09 New episodes every Sunday morning,
0:01:11 wherever you get your podcasts.
0:01:17 People of many different ideologies,
0:01:18 when taken to the extreme,
0:01:20 actually start to resemble each other.
0:01:23 Although you might be feeling like you’re fighting
0:01:24 for completely different missions,
0:01:28 you’re psychologically engaged in a very similar process.
0:01:30 So what is that process?
0:01:33 This week on The Gray Area,
0:01:36 we’re talking about how our psychology
0:01:37 affects our ideology.
0:01:41 New episodes of The Gray Area drop every Monday,
0:01:42 everywhere.
0:01:48 Welcome to Office Hours with Prof. G.
0:01:49 This is the part of the show
0:01:50 where we answer your questions
0:01:52 about business, big tech, entrepreneurship,
0:01:53 and whatever else is on your mind.
0:01:56 Today, we’ve got two great listener questions lined up,
0:01:57 and then after the break,
0:01:59 we’ve got the Reddit hotline,
0:02:01 where we pull questions straight from Reddit.
0:02:04 If you’d like to submit a question for next time,
0:02:05 you can send a voice recording
0:02:06 to officehourswithprofgmedia.com,
0:02:08 or if you prefer to ask on Reddit,
0:02:11 post your question on the Scott Gallery subreddit,
0:02:14 and we just might feature it in our next episode.
0:02:15 First question.
0:02:19 Hi, Prof. G.
0:02:21 I’m a solopreneur in my late 30s,
0:02:23 running a modestly successful online business.
0:02:26 My partner and I have deep ties in the U.S.,
0:02:28 but work independently and could live anywhere.
0:02:30 As we consider having kids
0:02:32 and the life we would want them to have,
0:02:34 we also discuss moving abroad for three main reasons.
0:02:36 Lifestyle arbitrage,
0:02:38 a more supportive environment for children,
0:02:41 and as a hedge against U.S. instability.
0:02:42 Given your recent thoughts
0:02:44 on diversifying your investments globally
0:02:47 and your current residency in the U.K.,
0:02:48 do you think younger Americans
0:02:51 should be diversifying their residency options
0:02:51 when possible?
0:02:54 If so, which countries would you look into
0:02:57 that still offer some of the economic opportunities
0:02:58 that the U.S. currently does?
0:03:00 Thanks for all the great content and advice.
0:03:02 I love this question.
0:03:04 According to a Harris poll released in March,
0:03:06 roughly 40% of Americans have considered
0:03:08 or are actively planning to move abroad.
0:03:09 The number one reason?
0:03:10 Cost of living.
0:03:12 More than half of Americans say they believe
0:03:14 they’d have a higher quality of life abroad.
0:03:16 Among those that planned on leaving,
0:03:20 their top choice destinations were Canada,
0:03:21 the U.K., and Australia.
0:03:23 As for non-English-speaking countries,
0:03:25 Americans indicated they were eyeing moves
0:03:27 to countries including France, Italy, Japan,
0:03:28 Mexico, Spain, and Germany.
0:03:30 Countries ranked among the most receptive
0:03:33 to digital nomads are Spain,
0:03:35 the UAE, Montenegro, and the Bahamas.
0:03:39 Okay, so in sum, I love a lifestyle arbitrage.
0:03:40 And you want to lean into your strengths.
0:03:42 And if your strengths are you have a career
0:03:44 that is not location-dependent
0:03:45 or geographically dependent,
0:03:48 then you want to do the lifestyle arbitrage.
0:03:52 The key is to make a urban city-like salary
0:03:55 without having urban city-like costs
0:03:56 unless you’re in love with cities.
0:03:58 And then, okay, some people,
0:03:59 I know some people who are like,
0:04:01 I am leaving New York feet first.
0:04:02 And I don’t care what it costs.
0:04:04 I don’t care what sacrifices I have to make.
0:04:06 Most people, by the time they have kids in New York,
0:04:09 peace out because it just gets prohibitively expensive.
0:04:12 And the lifestyle is just tough.
0:04:13 I remember walking around with my boys in Manhattan
0:04:15 and thinking I always had to have their hands
0:04:17 for fear they’d run out into the middle of traffic.
0:04:20 So 100%, I would say,
0:04:22 really be thoughtful about the lifestyle arbitrage.
0:04:25 My general assumption or general reductive analysis
0:04:27 after having molested the earth for the last 30 years
0:04:29 is that America is the best place to make money
0:04:31 and Europe is the best place to spend it.
0:04:32 So if you can make an American salary and live in Europe,
0:04:34 that’s a decent arbitrage.
0:04:37 Also think about different places in the U.S.
0:04:40 And that is there’s a lot of cities in the South,
0:04:41 quite frankly, that I think are just a great,
0:04:45 so for me, arbitrage is one,
0:04:47 I think college towns are great arbitrages,
0:04:50 whether it’s Charlottesville or Ann Arbor or Chapel Hill.
0:04:53 These cities typically, if you can call them cities or towns,
0:04:54 typically bring this great peanut butter
0:04:57 and chocolate combination of a bourbon sensibility
0:05:00 with rural beauty and hopefully rural pricing.
0:05:02 And you can have a great quality of life in a college town.
0:05:05 I also think there’s a lot of cities in the South right now
0:05:07 that offer what I think is a great lifestyle arbitrage,
0:05:08 specifically the weather,
0:05:11 that aren’t as expensive as some of the blue cities
0:05:13 in the North.
0:05:15 In some, if you were to look at migration patterns in the U.S.,
0:05:18 it’s driven by two things, low taxes and sunshine.
0:05:21 And I would also think about, you know,
0:05:23 think about this a lot, but the tax arbitrage.
0:05:25 By moving to Florida from New York,
0:05:27 and you have to move, you can’t fake it.
0:05:29 You have to spend 183 days there and enroll your kids there.
0:05:30 You really, you can’t fake it.
0:05:31 You legitimately have to move.
0:05:34 The 13% swing, I reinvested purposely
0:05:37 that entire 13% over 10 years,
0:05:38 and it helps have a bull market.
0:05:43 But basically, you know, my cars, my housing,
0:05:45 my kids’ school were paid for in that tax swing
0:05:46 because I make really good money,
0:05:48 but a lot of it was current income,
0:05:50 so 13% of that, then you invest it.
0:05:52 If you make $300,000,
0:05:53 you’re not saving $39,000.
0:05:56 You’re saving, you have $39,000 in capital
0:05:59 that should grow to 78 or 100, 150 10 years on.
0:06:01 And you do that every year, you wake up,
0:06:04 and you might have seven figures in additional wealth
0:06:06 that you didn’t have had you not moved.
0:06:07 So I love a lifestyle arbitrage.
0:06:09 Some cities that I think
0:06:12 offer incredible lifestyle arbitrages at the moment.
0:06:14 By the way, it used to be Florida.
0:06:15 When I moved to Delray Beach,
0:06:18 our first home that we rented there
0:06:19 was on the water, on the intracoastal,
0:06:21 and cost us $4,500 a month.
0:06:24 It no longer costs $4,500 a month.
0:06:25 Word is out about Florida.
0:06:27 That lifestyle arbitrage has been starched out
0:06:29 as they usually are starched out.
0:06:31 Some cities I would consider.
0:06:35 If you were single and male,
0:06:37 I would think about Cape Town.
0:06:40 I think the crime there is a factor.
0:06:43 But if you can make a Western salary in Cape Town,
0:06:45 you’re just gonna have an extraordinary quality of life.
0:06:47 I love Cape Town.
0:06:49 I’ve been there several times now.
0:06:51 And I can’t get over how good the food is,
0:06:52 how deep the culture is,
0:06:54 and how inexpensive everything is.
0:06:55 Now, crime is an issue.
0:06:58 So I wonder if it’s a place for a family.
0:07:00 I’m sure other people will weigh in.
0:07:02 But I think in terms of just pure raw beauty,
0:07:05 colliding with an incredible city
0:07:06 and incredible food, incredible culture
0:07:08 at an incredibly low cost,
0:07:09 that is really hard to beat.
0:07:12 Madrid, or somewhere in Spain.
0:07:14 I just think the Spanish get it
0:07:16 in terms of being able to get a great bottle of wine
0:07:19 for $8, walking around fairly safe,
0:07:21 incredible culture, history,
0:07:24 proximity to other great cities in Europe.
0:07:26 I think Spain offers an incredible lifestyle arbitrage
0:07:27 and pretty good weather.
0:07:30 The other city I would consider is Mexico City.
0:07:32 And I’m assuming it kind of likes cities.
0:07:34 Maybe you just want to do a rural arbitrage.
0:07:36 By the way, move everywhere but Connecticut
0:07:38 or some suburb or Tiburon where it’s beautiful,
0:07:40 but it’s the same.
0:07:42 I’ve never understood anyone that lives in the Northeast
0:07:43 and doesn’t live in Manhattan.
0:07:44 I just don’t get it.
0:07:46 It’s like all the cold, all the bullshit,
0:07:48 and all the taxes and expenses.
0:07:49 If you’re going to live in the forest somewhere,
0:07:52 move to a place with low taxes
0:07:54 and low rent and low housing costs and good schools.
0:07:55 Anyway, it’s not easy to find.
0:07:58 But I think Mexico City right now
0:07:59 is an incredible lifestyle arbitrage.
0:08:00 It’s safer than people think.
0:08:02 The food’s amazing, great art scene,
0:08:05 and I would say kind of 30 to 60% of the price
0:08:06 of, say, Los Angeles.
0:08:10 I think it’s a fantastic strategy,
0:08:11 a lifestyle arbitrage strategy.
0:08:13 Jesus Christ, Floripa.
0:08:16 I think Sao Paulo is incredible right now.
0:08:19 I think there’s just a ton of really interesting cities
0:08:22 that are coming up and offer somebody with nomad
0:08:25 or digital nomad skills the ability to arbitrage.
0:08:28 Even a place like Tokyo with the yen as weak as it is right now,
0:08:30 if you like that culture,
0:08:32 Tokyo is the most different yet the most sane place,
0:08:35 and that is it’s capitalist, it’s democratic,
0:08:37 incredibly safe, incredibly…
0:08:39 The thing that struck me also, though,
0:08:41 it’s so similar in terms of their systems and democracy,
0:08:42 their rights,
0:08:44 their focus on capitalism growth,
0:08:46 but it’s also the place that’s most similar
0:08:47 while being the most different.
0:08:49 I went to what is their Times Square,
0:08:51 and it’s entirely quiet.
0:08:53 Everyone’s just so respectful and so quiet,
0:08:55 and no one jaywalks,
0:08:56 and the food’s incredible,
0:08:58 and the relentless pursuit of perfection
0:08:59 is a tagline for Lexus,
0:09:01 but it should be a tagline for Japan
0:09:02 because everything they do,
0:09:04 they take such pride in the symmetry
0:09:07 and the design and the beauty of everything.
0:09:09 So if you really wanted something
0:09:10 a bit off the beaten path,
0:09:11 another great city in Asia, Bangkok.
0:09:13 Oh, my God.
0:09:15 What a cosmopolitan city with great food, great people.
0:09:18 And again, I would bet about a third of the cost
0:09:20 of living in an L.A. or New York.
0:09:20 So where do you move?
0:09:21 No, that’s not the question.
0:09:23 The question is where do you not move?
0:09:26 I would look at time zones as it relates to your work,
0:09:28 where you think you can find human capital
0:09:29 to scale your business,
0:09:31 where your partner’s excited about moving,
0:09:33 if you’re planning on having kids,
0:09:34 where you can find a decent education,
0:09:37 proximity to the people you love
0:09:38 in terms of direct flights,
0:09:40 and where you want to kind of explore and adventure.
0:09:42 Some people are more cut out for Europe.
0:09:43 Some people are more cut out for Asia.
0:09:45 Some people like to be more adventurous,
0:09:47 a place like Latin America or South Africa.
0:09:48 But my brother,
0:09:50 this is what you call a good problem.
0:09:52 A good problem.
0:09:54 Email us and let us know what you decide.
0:09:56 Thanks so much for the question.
0:09:57 Question number two.
0:09:59 Hey, Scott.
0:10:01 I’ve been struggling with your perspective on work-life balance,
0:10:03 or the lack thereof,
0:10:04 in your 20s and 30s.
0:10:08 You often frame those years as a time for relentless ambition,
0:10:10 even at the cost of relationships,
0:10:11 health,
0:10:13 and personal well-being.
0:10:17 I’m particularly curious about how you discuss your first marriage.
0:10:21 You emphasize that meaningful relationships are the key to happiness,
0:10:26 yet also seem to suggest that sacrificing them is necessary for success.
0:10:29 That feels like a contradiction, no?
0:10:32 If you could go back,
0:10:34 would you do anything differently to preserve those relationships?
0:10:37 For context, I’m 28,
0:10:39 putting everything into a new business,
0:10:42 and dating an incredible woman I hope to spend my life with.
0:10:45 Should I expect to lose my partner
0:10:47 and friends to succeed,
0:10:49 or is there a better way?
0:10:51 Thanks for your time
0:10:53 and for the impact you have on young men like me.
0:10:55 Thanks for the question.
0:10:56 You sound awfully serious.
0:10:58 So first off,
0:10:59 I can’t blame
0:11:02 the dissolution of my first marriage
0:11:03 on my ambition or my career.
0:11:06 I say that my
0:11:08 relentless focus on work
0:11:09 took a toll on me physically
0:11:10 and my relationships,
0:11:10 and it did.
0:11:12 But the bottom line is,
0:11:13 without violating privacy,
0:11:15 is the end of my first marriage
0:11:17 was a function of my immaturity.
0:11:20 And the fact that I was working around the clock
0:11:22 probably didn’t help in terms of stressors,
0:11:25 but I can’t just lay it at the feet of my career.
0:11:26 I want to be clear.
0:11:28 My way was to do nothing
0:11:30 but pretty much work from the age of 22
0:11:30 to kind of
0:11:33 my late 40s, early 50s.
0:11:35 That was my way,
0:11:36 but I’m not sure it’s the right way.
0:11:38 And I have some proximity bias,
0:11:39 and that is the people I
0:11:41 am close to
0:11:43 are mostly other very ambitious,
0:11:44 economically ambitious people
0:11:46 that want to be successful
0:11:47 and live in places like LA and New York
0:11:49 where you have to make a shit ton of money
0:11:50 to have the lifestyle we want,
0:11:52 and also MBA students.
0:11:54 And when I survey my MBA students,
0:11:56 about 70, 80% of them
0:11:57 expect to be in the top 1%
0:11:58 income-earning households
0:11:59 by the time they’re 35.
0:12:01 And what I suggest is that
0:12:04 if you are that ambitious economically,
0:12:06 or from an influence or relevant standpoint,
0:12:07 you just have an honest conversation
0:12:09 around the trade-offs and the sacrifices,
0:12:10 you might decide
0:12:12 that you want the trade-off
0:12:13 on the other end of the spectrum,
0:12:15 that you’re going to move to St. Louis
0:12:18 and have a nice life and work,
0:12:20 but you’re going to work to live,
0:12:21 not to live to work.
0:12:22 And there’s absolutely
0:12:24 nothing wrong with that.
0:12:26 And you can maintain healthy relationships,
0:12:27 you know,
0:12:28 coach Little League,
0:12:30 work a reasonable amount of hours,
0:12:32 have your church or country club
0:12:34 or whatever it is
0:12:35 that gives you spiritual
0:12:37 or relationship reward
0:12:38 and have a wonderful relationship
0:12:40 with your partner and your kids.
0:12:40 I don’t,
0:12:42 I think that’s possible.
0:12:42 Unfortunately,
0:12:43 I think it’s less possible.
0:12:44 What we’ve seen is
0:12:45 than it used to be.
0:12:46 What we’ve seen is
0:12:47 the majority of cities
0:12:48 have brought up their prices
0:12:48 because of inflation.
0:12:51 So I think in a capitalist society,
0:12:52 the cruel truth is
0:12:53 you need a certain level
0:12:54 of economic security.
0:12:55 but if you’ve decided
0:12:56 you don’t want to work
0:12:58 40 hours a week,
0:12:58 not 60,
0:13:00 and that you’re going to
0:13:01 prioritize your relationships
0:13:02 and your health
0:13:03 and your fitness
0:13:04 and the pursuit of other
0:13:05 outside interests,
0:13:06 more power to you.
0:13:07 I don’t,
0:13:08 I get it.
0:13:08 I get it.
0:13:09 But you also have to recognize
0:13:11 that means you probably
0:13:12 aren’t going to make
0:13:13 a million,
0:13:14 two million bucks a year
0:13:15 and live in LA or Manhattan.
0:13:16 You’re just not going to get there
0:13:17 doing,
0:13:18 you know,
0:13:19 an ordinary amount of sacrifice
0:13:20 around your career.
0:13:21 So what I would say is
0:13:23 it’s a spectrum
0:13:24 and that is you have to decide
0:13:25 and get alignment
0:13:26 with your partner
0:13:27 around where on that spectrum
0:13:28 you want to be.
0:13:30 And I’ve always assumed
0:13:31 that the majority of people
0:13:32 I come in contact with,
0:13:33 and maybe that’s incorrect,
0:13:35 but actually it’s not.
0:13:36 The majority of the young people
0:13:36 I meet,
0:13:38 where they fall flat is
0:13:39 they get used to
0:13:41 these Instagram life
0:13:41 and the algorithms
0:13:42 that they’re going to be
0:13:43 on a jet
0:13:44 and vacationing
0:13:46 at the Allman
0:13:46 in Utah,
0:13:48 partying in St. Barts
0:13:49 or Saint-Tropez
0:13:51 and that they’re going to get there
0:13:52 at a very young age
0:13:53 and just,
0:13:53 you know,
0:13:54 they’ll find a job
0:13:55 that’ll carry them there
0:13:55 or they’ll find
0:13:56 the right cryptocurrency
0:13:57 that’ll carry them there.
0:13:58 No,
0:13:59 that involves
0:14:00 a lot of luck
0:14:03 and working your ass off,
0:14:04 which comes at a sacrifice.
0:14:07 So I think that’s where
0:14:08 what I’ll call
0:14:10 the dissonance is,
0:14:10 is that people,
0:14:11 a lot of people
0:14:13 don’t recognize
0:14:14 the sacrifice.
0:14:15 A lot of people
0:14:15 on the other end say,
0:14:15 well,
0:14:16 you can make that sacrifice
0:14:18 and still not get there,
0:14:19 which is also true
0:14:20 because luck plays
0:14:20 a big role.
0:14:21 So why would I make
0:14:22 that trade
0:14:24 when I can just be
0:14:24 a good citizen,
0:14:26 work relatively hard,
0:14:27 find a good partner
0:14:28 and just enjoy life?
0:14:30 I also want to acknowledge
0:14:30 that I’m more,
0:14:32 I wouldn’t say I’m more,
0:14:34 not as materialistic,
0:14:36 but I’m very economically driven
0:14:36 because I didn’t have money
0:14:37 growing up
0:14:38 and it was very stressful
0:14:38 for me.
0:14:39 So I’ve always been
0:14:40 focused on it.
0:14:41 So I probably
0:14:42 over-focus on it
0:14:43 and also
0:14:44 the fact that I’m around
0:14:45 people who are all
0:14:46 very ambitious.
0:14:47 but the thing
0:14:48 I can’t stand
0:14:51 is very successful people
0:14:51 when they give me
0:14:52 this bullshit
0:14:53 that when they’re
0:14:53 in front of a crowd,
0:14:53 well,
0:14:54 I never thought
0:14:54 much about money.
0:14:55 Yeah,
0:14:55 fuck you.
0:14:56 You think about money
0:14:57 every minute
0:14:58 and I think
0:14:59 if you want to be
0:15:01 financially very successful,
0:15:01 you need to be
0:15:03 somewhat financially literate
0:15:04 and really know
0:15:05 your budget,
0:15:06 know how much
0:15:06 you’re making,
0:15:07 know taxes,
0:15:09 really understand this stuff.
0:15:09 I don’t think
0:15:09 you can be great
0:15:10 at tennis or anything
0:15:11 without thinking
0:15:12 about it a lot
0:15:13 and talking about it a lot
0:15:14 and one of those
0:15:15 conversations
0:15:18 is to get alignment
0:15:18 with your partner
0:15:19 and say,
0:15:20 where do we expect
0:15:21 to be economically?
0:15:22 What is the lifestyle
0:15:23 we want to have
0:15:24 and what are the trade-offs
0:15:24 we’re willing to make
0:15:25 and where on that spectrum
0:15:27 are we comfortable
0:15:28 and getting alignment
0:15:29 with your partner
0:15:29 because I think
0:15:30 what creates a lot
0:15:30 of tension
0:15:31 in relationships
0:15:33 is that sometimes
0:15:34 one,
0:15:35 it’s not that they’re
0:15:36 not making a lot of money,
0:15:36 it’s just that they
0:15:37 don’t have alignment.
0:15:38 One person would be,
0:15:40 would rather they work
0:15:40 less hard
0:15:41 and spend more time
0:15:42 with each other
0:15:42 and their kids
0:15:44 and not be a member
0:15:45 of the Tony Country Club
0:15:46 or have the fancy car
0:15:47 and the other
0:15:48 does not want that,
0:15:50 wants to work really hard
0:15:51 and have the accoutrements
0:15:52 of wealth and relevance.
0:15:53 So I think the key
0:15:55 is getting just alignment
0:15:55 with your partner
0:15:57 and then making sure
0:15:59 your expectations
0:16:00 foot to the reality
0:16:01 of the situation
0:16:03 in terms of where you live,
0:16:03 your lifestyle,
0:16:04 your spending patterns.
0:16:05 But my brother,
0:16:07 I’m not suggesting
0:16:08 my way is the only way.
0:16:09 Everyone’s got to find
0:16:10 their own route here.
0:16:11 Thanks for the question.
0:16:13 We have one quick break
0:16:13 and when we’re back,
0:16:15 we’re diving into the depths
0:16:17 of the ocean of Reddit.
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0:18:48 One of the hardest parts
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0:18:54 in South Beach.
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0:19:47 Welcome back.
0:19:48 Let’s bust right into it.
0:19:53 Our question today
0:19:54 comes from Captain Athens.
0:19:55 They ask,
0:19:56 Prop G,
0:19:58 what gives you hope?
0:20:01 Huh.
0:20:01 Okay.
0:20:02 I just interviewed
0:20:04 the historian Timothy Snyder
0:20:05 and he’s really inspired
0:20:05 by some of these
0:20:07 protests or marches
0:20:08 in the United States.
0:20:09 I like that.
0:20:10 You see hundreds of thousands
0:20:11 of people protesting.
0:20:12 That makes me feel,
0:20:13 it makes me feel hopeful.
0:20:14 There’s this wonderful graph
0:20:15 showing that
0:20:16 not in the U.S.,
0:20:17 but globally,
0:20:18 people are spending more time
0:20:19 volunteering time
0:20:20 to help people
0:20:21 they will never meet.
0:20:22 so more people
0:20:23 are planting trees
0:20:24 the shade of which
0:20:26 they will never sit under.
0:20:27 That’s very hopeful.
0:20:28 I’m hopeful that the EU binds
0:20:29 together to push back
0:20:30 on Ukraine.
0:20:32 I think we’re starting
0:20:33 to pay more attention
0:20:34 to the struggles
0:20:35 of young men,
0:20:36 mostly led by the concerns
0:20:37 and recognition
0:20:38 of these struggles
0:20:39 by their mothers.
0:20:41 I love that we’re beating
0:20:42 back Putin.
0:20:42 I love,
0:20:43 you know,
0:20:45 there’s a lot of things
0:20:46 I’m excited about.
0:20:47 A certain amount
0:20:47 of drug discovery.
0:20:49 I’m,
0:20:50 you know,
0:20:51 I am fairly hopeful.
0:20:53 It sounds very passe.
0:20:54 My boys give me hope.
0:20:55 I just think they’re
0:20:57 funny and nice
0:20:58 and interesting
0:20:59 and,
0:21:00 you know,
0:21:01 and beautiful.
0:21:02 Everyone thinks their boys
0:21:02 are the most beautiful thing
0:21:03 in the world.
0:21:04 And I like seeing
0:21:06 life through the lens
0:21:08 of what they see.
0:21:09 my youngest son
0:21:10 is starting to get
0:21:11 into fashion.
0:21:12 I just think it’s hilarious
0:21:13 what he finds fashionable
0:21:14 and he wants me
0:21:15 to buy him a chain.
0:21:16 And we were looking
0:21:16 at chains together
0:21:18 and just what he finds
0:21:19 interesting and cool.
0:21:19 And I used to do
0:21:20 a college tour
0:21:21 with my oldest
0:21:22 and we got to
0:21:23 this one university.
0:21:25 We did eight universities
0:21:26 in six days
0:21:26 and then we got
0:21:27 to this one university
0:21:28 and it was like a dog
0:21:28 off a leash
0:21:29 running ahead of me.
0:21:30 And I’m just trying
0:21:30 to figure out
0:21:31 what is it about
0:21:31 this university
0:21:32 or this environment
0:21:33 that all of a sudden
0:21:34 he’s decided
0:21:35 this is the college
0:21:36 he wants to go to.
0:21:37 So kids give me hope.
0:21:39 But I think
0:21:40 there’s a lot
0:21:41 to be hopeful around.
0:21:43 So also dogs.
0:21:45 Dogs give me hope.
0:21:45 Anyways,
0:21:46 hope that’s enough.
0:21:47 Thanks for the question.
0:21:56 This episode was produced
0:21:57 by Jennifer Sanchez.
0:21:59 Our intern is Dan Shallon.
0:22:00 Drew Burroughs
0:22:01 is our technical director.
0:22:02 Thank you for listening
0:22:02 to the Prop G pod
0:22:04 from the Vox Media Podcast Network.
0:22:05 We will catch you
0:22:06 on Saturday
0:22:07 for No Mercy, No Malice
0:22:09 as read by George Hahn.
0:22:10 And please follow
0:22:11 our Prop G Markets pod
0:22:13 wherever you get your pods
0:22:13 for new episodes
0:22:15 every Monday and Thursday.

0:00:07 Support for the show comes from ServiceNow, who are enabling people to do more fulfilling work, the work they actually want to do.
0:00:10 You know what people don’t want to do? Boring, busy work.
0:00:20 But now with AI agents built into the ServiceNow platform, you can automate millions of repetitive tasks in every corner of a business, IT, HR, customer service and more.
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0:00:31 It’s your turn. Get started at ServiceNow.com slash AI dash agents.
0:00:46 Finding your personal style isn’t easy, and the fashion powers that be aren’t making it any easier on us.
0:00:53 The best way to make sure they move a lot of units is to make stuff that is, to put it indelicately, sort of boring.
0:00:59 This week on Explain It To Me, how to cut through the noise and make sense of your own fashion sense.
0:01:02 New episodes every Sunday morning, wherever you get your podcasts.
0:01:12 People of many different ideologies, when taken to the extreme, actually start to resemble each other.
0:01:20 Although you might be feeling like you’re fighting for completely different missions, you’re psychologically engaged in a very similar process.
0:01:22 So what is that process?
0:01:29 This week on The Gray Area, we’re talking about how our psychology affects our ideology.
0:01:34 New episodes of The Gray Area drop every Monday, everywhere.
0:01:40 Welcome to Raging Moderates. I’m Scott Galloway.
0:01:41 And I’m Jessica Tarlath.
0:01:42 How are you, Jess?
0:01:43 I’m good, Scott. How are you?
0:01:44 Yeah.
0:01:46 Where do I find you? Because that is not home.
0:01:52 I’m in Hamburg, Germany, for this big conference called Online Marketing Rockstars.
0:01:53 There’s a lot of old money here.
0:02:07 And the juxtaposition of like this industrial town with big cranes and waterborne factories or water-based factories with all these brand new steel condominiums, steel and glass condominiums.
0:02:10 It feels like Karl Lagerfeld exploded into a city.
0:02:15 It is such a cool, interesting city.
0:02:16 And I absolutely love Germany.
0:02:18 Work hard, play hard, very progressive.
0:02:21 I just, if I spoke German, I would live here.
0:02:22 Have you been to Germany, Jessica?
0:02:33 I have, just to Berlin, though, and I had an incredible time on every cultural level, like the museums and walking around and kind of ingesting the history of it.
0:02:40 And then also the partying and the scene and just absolutely adored it.
0:02:40 Yeah.
0:02:49 I was, one of my favorite tourist things in the world is the fat bike or fat tire bike tours, especially the one in Berlin that goes everywhere.
0:02:53 And they look at the guard towers and Hitler’s bunker.
0:02:57 And anyways, I’m officially like 100 years old.
0:02:59 I’m fascinated by anything to do with World War II.
0:03:00 All right.
0:03:01 Banter done.
0:03:07 In today’s episode of Raging Moderates, we’re discussing the economy is one quarter away from a possible recession.
0:03:09 Mike Waltz gets pushed out.
0:03:13 Trump says he doesn’t know if he has to uphold due process.
0:03:23 And we have one of our favorites, Senator Chris Murphy, joining us to talk about the GOP budget bill and what Democrats are doing to message the possible harms to Americans.
0:03:24 All right.
0:03:25 Let’s get into it.
0:03:28 We’ve got our first major shakeup in the West Wing.
0:03:35 Trump has ousted National Security Advisor Mike Waltz, best known for launching the world’s most famous group chat, and nominated him as U.N.
0:03:36 Ambassador.
0:03:39 OK, so you’re fired, but you get a free toaster.
0:03:41 Yeah, you get a demotion.
0:03:43 Yeah, that’s it.
0:03:53 Stepping in, at least for now, is Jack of all trades and master of none, Secretary of State Marco Rubio, who will now be juggling four top-level roles in the administration.
0:04:00 Meanwhile, the White House is touting strong April job numbers, but the economy shrunk in the first quarter.
0:04:04 And Trump’s tariffs have really haven’t really fully kicked in yet.
0:04:09 One of them, 100% tariff on foreign-made movies, which he claims is a national security issue.
0:04:10 Huh, OK.
0:04:17 He’s also warning of higher prices and toy shortages this holiday season and says he’s OK with that.
0:04:22 All right, got banging porn stars that has a tacky 757 laced in four-carat gold that costs every other day.
0:04:24 He should lecture us about consumption.
0:04:32 Trump’s new budget proposes $163 billion and cuts to education, health, and the environment while boosting law enforcement and border security.
0:04:45 He also floated reopening Alcatraz as a symbol of law, order, and justice, and said he’s unsure whether due process rights must be honored during these mass deportations, though he’ll follow the Supreme Court’s lead.
0:04:46 He hasn’t so far.
0:04:56 All this comes as Trump and GOP leaders ramp up for the midterms, warning that a Democratic majority could bring a third impeachment, something they’re hoping will rally the MAGA base.
0:05:00 Jess, let’s start with Waltz and the shakeup.
0:05:04 Why do you think he was pushed out, and how realistic is it for Rubio to wear all those hats?
0:05:20 So someone had to go, and Trump invested so much in getting Pete Hegseth through the confirmation process that it was increasingly looking like it had to be Waltz.
0:05:28 And he didn’t want to do anything within the first hundred days because even though it’s kind of a made-up marker, I think he wanted to say, you know,
0:05:34 no problems for the first hundred days besides the fact that everyone thinks that you’re bringing us into a recession.
0:05:36 So that seems like a pretty good problem, big problem.
0:05:40 But that’s how it kind of ended up being Waltz.
0:05:46 And I keep thinking about the management of SignalGate after it first happened.
0:05:50 And, you know, how Trump came out pretty quickly and he said Mike’s learned his lesson.
0:05:58 And I think I’ve mentioned this before on the program that I’m part of a foreign policy group with Waltz, and he’s a very nice man.
0:06:00 Ew, smell you.
0:06:03 No, I just, I don’t know if there’s, like, conflict of interest.
0:06:05 I’m a member of Shea Margot, the new hot members club downtown.
0:06:06 That’s pretty cool.
0:06:07 Taylor Swift went there.
0:06:09 That’s cooler than knowing Mike Waltz.
0:06:09 Me and Taylor.
0:06:09 Maybe.
0:06:10 Me and Taylor.
0:06:11 Okay.
0:06:15 Well, you’ll have to take me is basically what has to happen now.
0:06:15 100%.
0:06:16 I’ll get a babysitter.
0:06:17 Maybe we’ll see Katy Perry.
0:06:19 Is that that exciting now?
0:06:22 She’s not, have you seen the weird dancing videos?
0:06:23 She’s not that good.
0:06:26 I’m convinced she was replaced with someone on the way back.
0:06:27 Like a robot?
0:06:28 No, some alien.
0:06:30 There’s something going on there.
0:06:31 Something bad is happening.
0:06:38 But Waltz, so he got Trump’s sign of approval where he said, you know, Waltz is safe.
0:06:40 And then he went on television.
0:06:44 And he went on with Laura Ingraham, and he had a pretty testy interview.
0:06:50 She was pushing him pretty hard about it, mostly about how was Jeffrey Goldberg in your phone in the first place.
0:06:58 And we know that the mix-up was that he thought he was putting in the trade representative, Jameson Greer, with the same initials as Jeffrey Goldberg.
0:07:12 But we also know in Trump world that there is nothing more offensive than being someone that talks to the mainstream press, let alone Jeffrey Goldberg, who was responsible for the suckers and losers story that keeps Trump up at night still.
0:07:22 He’s so mad about that and how it kind of turned public opinion as to how he feels about those who have served, even though we know what he said about John McCain from the start.
0:07:23 So it was pretty obvious what he thought.
0:07:31 But it was interesting looking at Waltz being pushed out, and he was given some options, some ambassadorships.
0:07:36 He could have been the ambassador to Saudi Arabia, for instance, or the U.N. job, which was supposed to be at least Stefanik’s.
0:07:48 But because Mike Johnson has no margins, he had to keep Stefanik in her district, her New York district, so that they would at least have another vote because he thought it was feasible that they could lose that seat.
0:07:53 But I was like, oh, my God, does this all really come down to a cable news hit?
0:07:55 And I think that it does.
0:08:14 And that Waltz choosing to go on TV, even though he had already appeased his audience of one, and to essentially look like he was out there for himself, was something that might have just been sitting in Trump’s craw for the last month or six weeks, however long it’s been.
0:08:31 And that when push comes to shove and he needed to get someone out and Hegseth has had more scandals since then, more signal problems, has had to fire some of his deputies who he says are all, you know, liars and leakers, though he threatened a polygraph and never gave any one of them a polygraph.
0:08:42 That, you know, would things have been different if maybe Waltz hadn’t done that interview or seemed like he was more concerned with his own fate than the fate of the administration?
0:08:43 Potentially.
0:08:44 That’s what I was thinking about.
0:08:45 What’s your take?
0:08:49 It’s so hard to try and decide who was most ripe to be fired.
0:08:50 I mean, Waltz did invite.
0:08:59 It’s just so hilarious that they’re not, you know, that the real sin here wasn’t a breach of national security that put our servicemen and servicewomen at risk.
0:09:08 And, you know, when you, as I’ve always referenced before, if you get pulled over for a DUI, it means you’ve likely driven drunk an average of 80 times.
0:09:10 I mean, what else has gone on here?
0:09:15 I think it should have been Hegseth, but he likes the way Hegseth looks.
0:09:17 He’s been more combative on TV.
0:09:19 I agree with you.
0:09:25 And then the real crime was having the phone number, the contact information of who’s seen as a progressive journalist.
0:09:26 That was the real sin.
0:09:29 So they needed a blood offering.
0:09:32 I actually got to say, I don’t think it’s gotten much attention.
0:09:35 You know, I think they kind of accomplished what they wanted.
0:09:39 I think it’s poor leadership to say, oh, here, you go do this now.
0:09:46 And I just thought that was, and you, an ambassador, I mean, talk about, talk about, that’s like what they did with Carrie Lake.
0:09:49 Now she’s in charge of what, Radio Free Europe as they cut funding for it.
0:09:54 It reminds me of, did you ever see the movie Broadcast News with William Hurt and Holly Hunter?
0:09:55 Just a wonderful film.
0:09:58 And Julia, I forget her name.
0:10:00 She played a Bond girl.
0:10:03 She played Holly Goodhead in one of the Bond films.
0:10:06 And she was in the movie Broadcast News.
0:10:10 And she’s a competitive threat for William Hurt’s affections to Holly Hunter.
0:10:15 And Holly, who’s the assigning producer, basically sends her to do stories in Alaska.
0:10:18 So she still has a job, but she’s in Alaska.
0:10:22 I feel like Carrie Lake and now Mike Waltz are in Alaska, if you will.
0:10:28 So Laura Loomer, who, you know, self-describes as an investigative journalist, but is really just a crackpot.
0:10:29 And Trump loves her.
0:10:41 And they’ve had to get her away from him, essentially, because she fills his head with even more craziness, apparently played a key role in Waltz’s ouster.
0:10:48 And her big thing is that Trump, in order to effectuate his agenda, needs to be surrounded by true believers.
0:10:50 And Waltz is not a true believer.
0:10:51 He’s a convert.
0:11:01 And Marco Rubio is a convert as well, though it seems like he’s, you know, making the cut in very serious ways now that he has, like, four jobs or something like that.
0:11:06 But Laura Loomer, you know, she posted on X after Waltz was kicked out and just wrote Loomered.
0:11:08 So, you know, take your victory lap.
0:11:17 But she said something that I thought was right and that we should keep in mind as we’re evaluating the administration as it unfolds.
0:11:28 If there’s anything that’s going to torpedo Donald Trump and his agenda after he survived indictments and mugshots and multiple assassination attempts, it’s going to be the vetting crisis and unforced errors of his administration.
0:11:31 Contrary to what’s been said, he doesn’t hire the best people.
0:11:36 That’s why it’s so important that there’s people to help support the president because nobody is perfect.
0:11:44 And that feels like a really good Trumpian organizing principle for whatever we are about to see over the next three and a half years.
0:11:46 But this guy hasn’t learned this guy.
0:11:50 The president hasn’t learned the basis of greatness and success.
0:11:53 And that is greatness is in the agency of others.
0:12:02 And you essentially, when you’re on a board, your job is to basically decide if and when to sell the company.
0:12:06 But more than anything, you really, your only job is to ensure you have the right guy or gal.
0:12:11 And the right guy or gal needs to be good at what they do, set strategy, be an external spokesperson.
0:12:14 But the best CEOs, the best leaders recognize that greatness is in the agency of others.
0:12:19 And they surround themselves with just incredibly competent people.
0:12:33 Your ability to build a great company, a great staff, a great cabinet is your ability to attract the most talented people, hold them accountable, and get them to work together and not be threatened by and show the ability to retain people that are more talented than yourself.
0:12:38 And when you have the White House and the flag behind you, you can call on almost any individual.
0:12:49 And the fact that he’s brought together this peewee, bad news bears, village idiot, keystone cops group of people, he’s even doing himself a disservice.
0:12:55 Because an incompetent who’s really loyal to you isn’t going to serve you well because they’re just going to make you look stupid all the time.
0:12:59 It’s not—loyalty will be absolutely—and I believe this has already taken place.
0:13:00 He has huge loyalty.
0:13:02 Peter Navarro thinks the guy’s a god.
0:13:09 And Peter Navarro is probably going to be the Nigel Farage of this age.
0:13:17 And that is, he will be the architect—he will go down in history—is the person we wish this guy, the president, had not listened to.
0:13:36 And he doesn’t understand that if he wanted to—if he had gone about this stuff with less volume and not made as many really stupid decisions, case in point, the one he just passed or is threatening to pass, 100% tariff on any movies coming into the U.S., he would probably be one of the more popular presidents of the first 100 days.
0:13:43 Because to his credit, he’s doing what he said he would do on things that are largely, at least thematically, popular in the U.S., right?
0:13:54 Deport immigrants, go after government waste and inefficiency, restore trade balance, which Americans incorrectly have determined has been asymmetric to our disadvantage.
0:13:55 But he just doesn’t get it.
0:13:57 He’s surrounding himself with idiots.
0:14:02 It will absolutely undermine any benefit he gets from loyalty.
0:14:04 Let’s take a quick break.
0:14:05 Stay with us.
0:14:13 Support for this show comes from NetSuite.
0:14:15 The future is unpredictable, especially for small businesses.
0:14:21 Even experts who are looking at every indicator they have access to can overlook a variable that changes everything.
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0:14:32 NetSuite brings accounting, financial management, inventory, and HR all into one fluid platform.
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0:15:02 Speaking of opportunity, download the CFO’s guide to AI and machine learning at NetSuite.com slash prof.
0:15:06 The guide is free to you at NetSuite.com slash P-R-O-F.
0:15:09 That’s NetSuite.com slash prof.
0:15:18 The regular season is in the rear view, and now it’s time for the games that matter the most.
0:15:22 This is Kenny Beecham, and playoff basketball is finally here.
0:15:29 On Small Ball, we’re diving deeper into every series, every crunch time finish, every coaching adjustment that can make or break a championship run.
0:15:32 Who’s building for a 16-win marathon?
0:15:37 Which superstar will submit their legacy, and which role player is about to become a household name?
0:15:42 With so many fascinating first-round matchups, will the West be the bloodbath we anticipate?
0:15:44 Will the East be as predictable as we think?
0:15:46 Can the Celtics defend their title?
0:15:51 Can Steph Curry, LeBron James, Kawhi Leonard push the young teams at the top?
0:15:56 I’ll be bringing the expertise, the passion, and the genuine opinion you need for the most exciting time of the NBA calendar.
0:16:00 Small Ball is your essential companion for the NBA postseason.
0:16:04 Join me, Kenny Beecham, for new episodes of Small Ball throughout the playoffs.
0:16:06 Don’t miss Small Ball with Kenny Beecham.
0:16:08 New episodes dropping through the playoffs.
0:16:11 Available on YouTube and wherever you get your podcasts.
0:16:16 Support for the show comes from the Freedom From Religion Foundation.
0:16:20 Have you ever been on a road trip when one person insists on controlling the music?
0:16:24 You’re just trying to enjoy the ride, but now you’re stuck listening to nothing but their favorite band.
0:16:28 No discussion, no compromises, just their way or the highway.
0:16:31 That’s kind of what’s happening with Christian nationalism.
0:16:35 Some folks want to take over the radio dial and make everyone follow their beliefs.
0:16:39 But this country was built for everyone, not just one group.
0:16:42 That’s where the Freedom From Religion Foundation comes in.
0:16:47 Think of them as GPS keeping church and state in separate lanes, just like the founders actually intended.
0:16:56 So whether you’ve always been secular or have left religion behind, if you don’t want someone else dictating the trip for you, the Freedom From Religion Foundation has your back.
0:17:06 Go to ffrf.us slash freedom or text my first name, Scott, to 511-511 and become a member today.
0:17:13 Text Scott to 511-511 or go to ffrf.us slash freedom.
0:17:16 Because when it comes to freedom, we all deserve to choose our own route.
0:17:20 For membership information, text Scott to 511-511 today.
0:17:22 Text fees may apply.
0:17:30 Moving on here.
0:17:34 The economy shrunk in the first quarter and we haven’t seen the full impact of Trump’s tariffs yet.
0:17:40 Any sense for, have you heard anything about, quote unquote, this line out the door of people looking to do deals with him?
0:17:42 I have heard it said a lot.
0:17:46 I have not seen much evidence that that’s really what’s going on.
0:17:56 And when the other countries release statements, like, I feel as though the Japanese have been pretty transparent about how concerned they are about what’s going on.
0:18:00 Because obviously they want to maintain a good trading relationship with us.
0:18:05 But they basically said the U.S. team is a bunch of yahoos.
0:18:08 And they sit down at the table and they don’t even know what they want.
0:18:15 You know, when you go on a first date and you realize maybe you’re not up to it, you know, when you’re not feeling it or whatever.
0:18:17 Or you’re just not in the mood so you can’t even make conversation.
0:18:20 And within 10 minutes you’re just kind of staring at each other.
0:18:22 I feel like that’s what a lot of these trade.
0:18:25 I just want you to know I have sat across from that a lot.
0:18:27 Just a lot.
0:18:29 I’ve experienced that a lot from the other side.
0:18:30 Yeah, that’s what happens.
0:18:31 The women aren’t up to it.
0:18:32 Yeah, I see a lot of women.
0:18:33 Just staring at you.
0:18:34 Oh, yeah, I got to tell the story.
0:18:36 I moved to New York on my first date.
0:18:39 I met a woman who was a hostess at a restaurant uptown.
0:18:40 Asked her out.
0:18:41 She said, yeah, I got her number.
0:18:43 We went to a hotel downtown.
0:18:44 I walked in.
0:18:45 We ordered drinks.
0:18:46 I said, I got to go to the bathroom.
0:18:49 I came back and I got a text saying, my friend’s in the emergency room.
0:18:49 I had to leave.
0:18:50 Really?
0:18:51 And I’m like, yeah.
0:18:53 Which was, in my opinion, total bullshit.
0:18:59 I mean, that was my first date in New York is the woman.
0:19:06 As soon as she got on the cab ride to the restaurant, she decided her friend was going to get hit by a car and she had to leave immediately.
0:19:07 Anyways.
0:19:13 Those are like the old school escape plans where you tell a friend, call me 15 minutes into the date, right?
0:19:15 And say, oh, my God, you’re having an emergency?
0:19:16 Yeah.
0:19:17 No, not even.
0:19:18 Didn’t even go through that.
0:19:19 But why’d she say yes then?
0:19:20 She’d met you.
0:19:24 This wasn’t like a weird online, you know, maybe he doesn’t look like his pictures.
0:19:32 No, I think there’s something about that Galloway charm that really just really started to scare the shit out of her.
0:19:34 She’s probably full of regret now.
0:19:35 Oh, can you imagine?
0:19:37 I mean, I host a successful podcast now.
0:19:47 Look, speaking of the tariffs, what do you make of this 100 percent or proposed 100 percent tariff on foreign movies coming into the U.S.?
0:19:48 It’s totally bad shit.
0:19:54 I mean, we have a 15.3 billion trade surplus on Hollywood.
0:19:55 That’s the thing.
0:20:00 Like when the Australians said, excuse me, you have a trade surplus.
0:20:07 And I think it was Senator Warner was asking Jameson Greer, the trade representative, about that in particular.
0:20:11 And he said, well, how does this make any sense if we have a surplus?
0:20:14 If his idea is that we have to be even Stevens about everything.
0:20:26 And the trade representative had no answer because there is no answer beyond Peter Navarro was the only one who satisfied this tariff itch that Trump had.
0:20:28 And I don’t know if you saw in the Wall Street Journal.
0:20:30 So we’re recording this on Monday morning.
0:20:32 Scott Bessent has an op ed out.
0:20:38 So now he is trying to do damage control and he’s defending the strategy.
0:20:46 He says Trump has this coherent three-pronged strategy that will benefit Main Street because their obsession is saying that this is for the little guy, tariffs, tax cuts and deregulation.
0:20:53 And to the average Republican, that does sound good as long as the tariffs aren’t the way that we’re doing it.
0:20:55 They love tax cuts and deregulation.
0:21:05 But it’s all anchored in a complete misread of what the tariffs are doing to our economy and also what these 2017 tax cuts were.
0:21:11 And Republicans, I get this all the time at work, where they say the 2017 tax cuts benefited everybody.
0:21:14 But they don’t talk about the level of benefit that it had.
0:21:22 So 81 percent of the tax benefits from the 2017 cuts went to the top 10 percent and 24 percent to the top 1 percent.
0:21:33 So just because the average person got another $800 in their bank account as a result of this doesn’t mean that it still wasn’t this massive giveaway to the ultra wealthy.
0:21:44 And I was watching Bloomberg TV, which I don’t do very often, but I thought, oh, they’re probably going to have people on that are making a lot of sense and understand this a lot better than me.
0:21:49 And they had this guy, Gene Sirocco on, who’s the executive director of the Port of Los Angeles.
0:21:54 I learned more in three minutes from this guy about what’s going on.
0:21:55 He had the numbers, right?
0:21:57 We have a 35 percent drop in volume.
0:22:00 We are going to go under a hiring pause.
0:22:03 The truckers are going to be decimated because of it.
0:22:05 The dock workers, we don’t know what’s going to happen there.
0:22:09 Five to seven weeks, the retailers are saying that you’re going to have shelving problems.
0:22:15 And then if it takes more than a month to get these deals done, which with China, I don’t even know if there’s ever going to be a deal.
0:22:17 They seem up for whatever this battle is.
0:22:27 That spring and summer fashion and then back to school are going to be the big events that really jolt the American economy when you realize that you can’t get the stuff that you need.
0:22:32 And I don’t want to put myself out of a job because I love being on the five and I really enjoy it.
0:22:38 But I want more Gene Sirocco on TV talking about this than Jesse Tarloves.
0:22:53 I hope my bosses aren’t listening because you get more information about the on the ground effects of these tariffs from somebody who’s actually living it day to day and knows the people directly affected than you do by all of these talking heads.
0:23:03 Yeah. So just to return to the 100% tariff on movies, I’ve established a nice friendship with a guy who used to run Warner Brothers Europe.
0:23:20 And basically his job was to take the IP of Warner Brothers, whether it’s Big Bang Theory or Batman or Harry Potter, and then travel around the 27 or 29 member nations of the EU and collect money from them.
0:23:25 Oh, you’re in Poland and you’re the streaming network and you want to run, you know, Warner Brothers films?
0:23:27 This is how much you’re going to pay us.
0:23:32 Oh, you want to run the Harry Potter play on, you know, in the London Theater District?
0:23:33 This is how much money you’re going to pay us.
0:23:35 I mean, we collect there.
0:23:41 America actually does a relatively small number of things really, really well.
0:23:43 Tech and software, education.
0:23:47 We make the best weapons in the world and hands down, we have the best media in the world.
0:23:59 And we’re running a 24 by 7, essentially commercial on American culture, whether it’s Baywatch or whether it’s friends and neighbors talking about the wealth problems of people in Connecticut, which I’m watching and I think is great.
0:24:00 Jon Hamm, incredible presence.
0:24:01 Oh, I know.
0:24:02 Incredible presence.
0:24:05 Is that your way of saying he’s so hot?
0:24:05 It’s nauseating.
0:24:06 Oh, he’s ridiculously hot.
0:24:07 It’s crazy.
0:24:11 And he’s like aging in the best possible way.
0:24:14 He’s still Don Draper, but he’s also like a great dad.
0:24:17 He’s a bad dad, technically, in your friends and neighbors.
0:24:17 But you know what I mean.
0:24:18 Oh, no.
0:24:20 He’s like the victim.
0:24:21 It’s such a ridiculous thing.
0:24:21 I know.
0:24:22 He’s everything.
0:24:23 Yeah.
0:24:26 Anyways, yeah, he’s very attractive.
0:24:28 Anyway, let’s just cut to what’s going to happen.
0:24:39 Other nations will say, OK, we’re going to put a 100 percent tariff on any of your media coming in here, which means we’re going to consume a lot less media.
0:24:49 We one of the things we negotiated away with Canada at one time, Canada, and maybe it’s still in place, but I don’t think so, said that 25 percent of media on Canadian cable has to be produced in Canada.
0:24:53 And so they basically had a lot of shitty Canadian TV shows.
0:24:56 I’m sure that, you know, the boys in the hall or something came out of it.
0:25:02 But effectively, this would be a boon to the local for in the short term.
0:25:09 It’d be terrible for consumers in Poland, but they would get a short-term sugar high from domestically produced content.
0:25:12 I don’t even know how you would calculate the tariff.
0:25:15 But over the long term, all it does is the following.
0:25:18 Media becomes much more expensive in those nations.
0:25:26 The media industry in America, which employs millions of high-paid jobs, gets crushed, right?
0:25:29 Because this truly is a frictionless export.
0:25:30 You don’t need ships.
0:25:32 You don’t need docks.
0:25:35 You don’t need retail distribution channels or trucks.
0:25:39 Media can be transmitted over cables with zeros and ones.
0:25:43 And we make unbelievable margins.
0:25:54 And to think that these nations aren’t going to impose reciprocal tariffs, which will dramatically decrease the demand of our content overseas, which we haven’t, as you pointed out, an incredible trade surplus.
0:25:55 And this is what will happen.
0:25:56 He will threaten it.
0:26:06 Ted Sarandos from Netflix will call and say, you realize that this is going to take Netflix stock down dramatically as we do 51 percent of our content production is overseas now.
0:26:09 We don’t even know how to calculate what the tariff would be.
0:26:11 It’ll take our stock way down.
0:26:16 We’re going to get very pissed off, as will the 315 million people who are on Netflix.
0:26:21 And he will do exactly what he’s done across every single step in this process.
0:26:21 He will blink.
0:26:24 Netflix will be the new Apple.
0:26:36 And that is, people say, well, what would happen to the price of Netflix in all these nations and in our nation if all of a sudden content produced overseas, of which 51 percent of Netflix content is now, whether it’s the umbrella,
0:26:44 the Academy or money heist, or money heist, or money heist, and Netflix says, oh, we might have to raise prices from $12.99 to $17.99.
0:26:55 Americans started a revolution that basically resulted in the formation of our nation based on the action of people trying to raise taxes on tea.
0:26:57 The whiskey rebellion.
0:27:12 So this is, again, nothing but chaos and paralysis, where the most talented people in the world and media, which happen to reside in America, essentially have to spend all this time figuring out what the fuck does this mean?
0:27:14 How do we even respond to it?
0:27:16 Just in case, let’s stop production overseas.
0:27:18 Let’s reroute our supply chain.
0:27:29 We got to spend all of our time on earnings calls talking about how we respond to this instead of how we’re actually trying to acquire consumers or produce more media that’s more effective on a lower budget in our business models.
0:27:33 And at the end of the day, he’s going to do the same thing he did with Apple.
0:27:34 He’ll do the same thing with Netflix.
0:27:47 But if, in fact, the tariff does go through in some form, it’s the small independent producers, the smaller media companies that will be shit out of luck, that don’t have lobbyists and don’t have a cult following, similar to Apple and Netflix.
0:27:50 This, again, is nothing but a self-inflicted injury.
0:27:54 There’s all downside and just shows this guy just does.
0:27:59 Even in the industries we are dominating, we are dominating globally.
0:28:05 The last thing we want to do is give any nation the excuse to raise tariffs on our content.
0:28:23 And this is one of the things we have negotiated tooth and nail, our trade representatives, is that we have ensured that if we produce great IP, which we produce the best in the world, when we produce, you know, Fast and Furious 12, that Czechoslovakia can’t decide to start tariffing it.
0:28:32 We have fought for so long to let our content flow free overseas because it is better content and we reap the majority of those benefits.
0:28:39 And now he’s decided to wind back the clock and give all of these nations an opportunity to tax our media anyways.
0:29:02 It also opens the door for people to be concerned about his mental health state because there is a not insane thesis that perhaps last night he was watching a movie about Alcatraz and then decided to start posting that we need to reopen Alcatraz.
0:29:13 And we know he likes prisons and show a force that way with the Gitmo stuff, but he says, OK, we’ll reopen Alcatraz and also we want to use tariffs in the movie industry.
0:29:17 Or maybe he was talking to Jon Voight, who works for the administration somehow.
0:29:20 He’s like the Hollywood ambassador or something like that.
0:29:25 And Politico even had Jon Voight mentioned in their article talking about this.
0:29:40 And that makes you think who is in charge here and to be even more deeply concerned that in the GOP bill, they have taken the way the right from Congress to administer tariffs, which is constitutionally protected.
0:29:45 And that that’s the game here, that it’s all consolidation of executive power.
0:30:03 Mike Johnson is fine with it as long as he gets his tax cuts through and the cuts that he likes and that we have a one man show and that one man show can be swayed by a visit by Laura Loomer or perhaps a movie that he was watching.
0:30:05 That’s a little concerning.
0:30:13 Just to give you a sense, we think, well, it’s not that big a deal if it’s just going to create some uncertainty and then ultimately we end up back where we think it is.
0:30:15 And that looks more like it did before than not.
0:30:18 Uncertainty is the death metal of markets.
0:30:20 The markets hate uncertainty.
0:30:27 And so far this year, the S&P 500 is down 6%, wiping out $6.5 trillion in value of public companies.
0:30:30 The value of the U.S. dollar has plunged nearly 10%.
0:30:35 And ETFs that track companies outside of the U.S. is up over 7%.
0:30:48 I feel like we’re having the biggest lawn sale in the world of $27 trillion in our economy that other people are thinking, okay, especially China and some EU nations are saying, okay, how do we take advantage of the fact that the U.S. seems to be getting into a trade war with China?
0:30:53 I know, let’s get a bunch of stuff on sale as the fixed costs in Chinese factories.
0:30:56 They want to keep those factories humming so they have excess supply.
0:31:01 And the EU nations are going to be able to strike incredible deals on that additional capacity.
0:31:05 In addition, all sorts of trade deals being done outside of the U.S.
0:31:10 This is essentially, well, okay, this is a yard sale at the wealthiest home in the world.
0:31:16 This is, you know, I don’t know, the Louvre, if it was a private residence.
0:31:19 Oh, everything’s for sale right now in terms of this economy.
0:31:21 Everything is up for grabs because this person has gone crazy.
0:31:26 They’re not dead soon, but they’ve gone absolutely crazy.
0:31:35 And the notion that consumers aren’t going to freak out, when consumers show up to a store and the shelves are empty, at least American consumers,
0:31:39 their first instinct is to go buy something else, specifically a gun.
0:31:42 Consumers freak out.
0:31:48 I mean, this is a country that started hoarding toilet paper and hand cleanser.
0:31:49 I did that.
0:31:50 You did that?
0:31:54 I had a whole office full of toilet paper.
0:31:55 Yeah, I didn’t get that at all.
0:31:56 What would you do if you couldn’t wipe?
0:31:57 Let’s be real about this.
0:31:59 My dad was also obsessed with it.
0:32:01 He told me, he’s like, go to every drugstore.
0:32:03 I lived in Union Square at the time.
0:32:05 He’s like, you got a lot of drugstores there.
0:32:09 Please go get as much toilet paper as possible and then bring it down to me and try back.
0:32:12 Yeah, I was more focused on getting the vaccine.
0:32:14 But I did that, too.
0:32:14 Yeah.
0:32:20 But just for the sad final note on this, all the things you say is true.
0:32:22 His approval rating is down.
0:32:24 Stock market, all of it.
0:32:30 And yet CNN asked who would be doing a better job right now, Trump or Kamala Harris?
0:32:33 And Trump still edges Kamala.
0:32:36 I mean, within the margin of error, it’s just two points.
0:32:42 But my guess would be actually that he would still get reelected if we had the election, if we did a do-over.
0:32:44 Well, people I’ve watched.
0:32:48 I don’t know if you saw anything from the Berkshire Hathaway Agora where they all get together.
0:32:54 And basically, it was kind of a farewell to a great American, Warren Buffett.
0:32:57 And he said he was really appreciative in his comments.
0:33:04 He said that you want the world to be prosperous, that when other nations do well, we do really well because we make fantastic products.
0:33:06 And when they have more money, they buy more of our products.
0:33:07 And it’s an upward spiral.
0:33:18 And one of the problems with this administration in terms of mentality that is just not prosperous or foots to the age is that they approach everything as a zero-sum game.
0:33:21 That if another nation is prospering, it must be bad for us.
0:33:26 And China’s ascent into the global economy as a kind of a tier-one nation has been great for us.
0:33:28 And you might say, well, it’s not great for us.
0:33:33 Only 3% of clothes in America are manufactured domestically.
0:33:34 How can that be a good thing?
0:33:39 Okay, in the last 40 years, on an inflation-adjusted basis, the price of clothing has been cut in half,
0:33:43 which means Americans can focus on manufacturing things with much higher margin.
0:33:46 I don’t know, chips, media.
0:33:52 And with that additional gross margin, by focusing on high-margin products and additional profitability,
0:33:54 we get to buy more shit.
0:33:57 And at the end of the day, America is about rights.
0:34:00 It’s about defending our nation and giving people the opportunity to buy more shit.
0:34:01 People don’t come here.
0:34:07 I mean, a lot of people do come here escaping totalitarian regimes or they want or asylum.
0:34:10 But the majority of people who come here come here because they want more shit.
0:34:12 And what I mean by that is they want to have a more—
0:34:13 We call that opportunity.
0:34:16 Yeah, they want a more prosperous lifestyle.
0:34:18 They want to be able to afford nice things for the kids.
0:34:19 They want to take nice vacations.
0:34:21 They want to have a nicer car.
0:34:23 They want to buy better beer.
0:34:25 They want to wear cooler clothes.
0:34:26 They want to wear Nikes.
0:34:27 They want to watch better media.
0:34:33 And the notion that somehow we have not benefited—
0:34:36 Since World War II, we have 8X’d our GDP.
0:34:40 Our average household income is about $80,000.
0:34:45 Granted, it is not—it is absolutely not fairly distributed, but that’s our choosing.
0:34:47 That has nothing to do with trade policy right now.
0:34:50 But the notion that we haven’t won.
0:34:51 We’ve won, folks.
0:34:52 We’ve won.
0:35:01 And a big part of that is because of our incredible trade policy, where we’ve usually been both parties win, but we win even more.
0:35:10 And he was very eloquent and said, by the way, when other nations are more prosperous and their children are more prosperous, your children are safer.
0:35:21 And that is, when nations don’t do well, you know, they’re just more inclined to declare war on their neighbors or be really angry at those gluttonous Americans who appear to be doing well and pulling head without us.
0:35:23 I thought his comments were really solid.
0:35:29 But just a quick rundown of some of the products from China that are imported into the U.S.
0:35:32 Ninety-nine percent of shoes are imported.
0:35:35 Ninety-percent of microwaves are imported from China.
0:35:36 Eighty-two percent of pots and pans.
0:35:38 Seventy-percent of utensils.
0:35:40 Forty-percent of coffee makers.
0:35:42 Ninety-three percent of children’s books.
0:35:43 Eighty-six percent of gaming consoles.
0:35:45 Ninety-eight percent of umbrellas.
0:35:47 Eighty-two percent of blankets.
0:35:50 Ninety-six percent of fireworks.
0:35:58 The Republican Party really is genius at figuring out a way to get people to vote against their own interests.
0:36:02 And as a result, J.P. Morgan is now predicting a 60 percent chance of recession.
0:36:05 Goldman Sachs, 35 percent chance of recession.
0:36:09 Barclays, B of A, Deutsche Bank all warn of higher recession risks.
0:36:15 What they’re not talking about, which I think they soon will be talking about, is what’s even worse than a recession.
0:36:19 And you’re too young to even remember this, but I remember this from my graduate student instructor days.
0:36:21 Stagflation.
0:36:27 And that is traditionally when the economy slows, interest rates come down because not as many people are feeling confident and want to borrow money.
0:36:29 So banks lower the cost to borrow money.
0:36:31 People get more aggressive.
0:36:32 It’s sort of a self-healing mechanism.
0:36:37 And then when consumers are trying to buy too much stuff and there’s too many dollars facing too few products,
0:36:41 banks take advantage of that and say, if you want to borrow money as confident as you are, you’re going to have to pay us more.
0:36:47 And then the higher interest rates temper or dampen the economy and bring inflation down.
0:36:51 The worst thing in the world is where we’re headed, and it’s the following.
0:36:59 And that is productivity goes down because the demand for our products from reciprocal tariffs decreases, so the economy shrinks.
0:37:06 But at the same time, we’re seen as a less sure bet, and capital leaves the U.S. driving up interest rates.
0:37:07 So what do you have?
0:37:13 You have interest rates going up, which further chases down, slowing productivity, and you have something called stagflation.
0:37:17 And we haven’t registered that in so many decades.
0:37:19 People don’t even really understand the concept.
0:37:20 But here’s what it is.
0:37:24 Stagflation is a bridge to depression.
0:37:27 Recession is a fucking Easter party compared to stagflation.
0:37:29 That’s the worst of both worlds.
0:37:37 And it strikes me that essentially these tariffs and so far the economic policy are effectively said, how can we bring back stagflation?
0:37:41 How can we bring back measles and rubella and stagflation?
0:37:43 I’ve got an idea.
0:37:44 Massive tariffs.
0:37:46 All right, moving on for a second.
0:37:49 What do you make of Trump’s comments about due process?
0:37:50 Concerning.
0:37:52 But when have I not been concerned?
0:37:58 You know, Kristen Welker asking him, do you agree that everyone who is here deserves due process, citizens and non-citizens?
0:38:02 And spoiler alert, the Constitution guarantees it, even for people who are here undocumented.
0:38:05 And Scalia, amongst others, has said as much.
0:38:06 And he goes, I don’t know.
0:38:07 I’m not a lawyer.
0:38:13 And Trump has spent his entire life hiding behind, I don’t know, ask somebody else.
0:38:18 And that somebody else is usually Stephen Miller, which spells disaster for all of us.
0:38:26 And I should have mentioned when we were talking about the National Security Advisor stuff that I wouldn’t be surprised if it was really Stephen Miller doing it and not so much Marco Rubio.
0:38:40 But the administration is out with an idea for a new proposal that I would love to get your take on, because it, at first blush, sounds pretty smart to me, that they’re going to pay people who are here undocumented $1,000 to self-deport.
0:38:43 And I believe that they’re also considering paying for their flights home.
0:38:55 And it is deportations and border security, not immigration overall, but those two criteria or those two aspects are the only areas where he is still above water.
0:39:03 And I think that if there are people here who are willing to go for $1,000, that that is a very good use of our taxpayer dollars.
0:39:04 Well, it’s an interesting idea.
0:39:14 And just on a cost level, it’s a hell of a lot more efficient than renting planes for, you know, a quarter of a million dollars and putting them in handcuffs and shipping them to a place where they have no family or support.
0:39:17 But it’s how we’re doing this.
0:39:22 People don’t want to acknowledge that, OK, the secret sauce of America, a lot of people admit, has been immigration, right?
0:39:34 But the most profitable part of that secret sauce has been illegal immigration because undocumented workers, as I’ve said before, pay taxes but don’t stress local, you know, local services.
0:39:37 They don’t stick around long enough to usually collect Social Security.
0:39:39 There are some examples of crime.
0:39:44 There are some examples of them taxing social services beyond the value they’re adding.
0:39:48 But that is the exception, not the rule.
0:39:58 And the reason why we have turned a blind eye to illegal immigration for so long is it’s been this magnificently flexible, inexpensive workforce that comes in when there’s jobs and leaves when there isn’t.
0:40:13 And the thought, you know, to me, if you were really going to be, quote unquote, smart about this, you would say to certain individuals, I mean, you need to massively increase immigration, but have it be thoughtful and have it be measured and have some, you know, some sort of logic to it.
0:40:13 Right.
0:40:24 If the price of pistachio is quadruples because we can’t come find anyone to come harvest those crops, well, let’s think about how we have some sort of temporary visa, similar to what Trump does at his hotels.
0:40:36 But in terms of deporting, offering them incentives, but we still don’t want to talk about the solution that actually probably most effectively decreases or encourages people to self-deport.
0:40:38 And that is going after these nice people who are business owners.
0:40:45 And that is in some states or some regions, they estimate somewhere between a quarter and a third of fast food workers are undocumented workers.
0:40:52 You could make a pretty decent estimate with a pretty tight confidence interval of what percentage of your workforce is undocumented workers.
0:40:57 And then you go to the employer and you say, we’re going to start fining you $100,000 a day unless you get this down.
0:41:03 If the jobs go away, they will self-deport on their own without a $1,000 bounty or a $1,000 incentive.
0:41:08 Because the real solution here is something we just don’t want to talk about.
0:41:15 We don’t want to acknowledge that, okay, drugs coming across the border, well, let’s punish them for letting phenyl in.
0:41:16 You can’t keep drugs out of a prison.
0:41:30 As long as there’s demand for drugs in the United States as a function of people, either addiction or, you know, a man who doesn’t get married or in a relationship by the time he’s 30 has got a one in three chance of becoming an abuser.
0:41:45 As long as there is demand for drugs they’re going to get into the U.S., as long as there is a demand in jobs, right, for illegal immigrants, they’re going to figure out a way to get here.
0:41:52 Now, to their credit, it does seem like immigration has dramatically just cauterized or stopped.
0:41:54 I think that’s a good talking point for them.
0:41:55 Are they going way too far?
0:41:58 Are we probably going to see a massive hike in inflation?
0:42:01 I absolutely think that’s coming.
0:42:02 But let me put it this way.
0:42:05 I think that’s the least bad idea they’ve had in a while.
0:42:05 What do you think?
0:42:07 Yeah, that’s how I feel.
0:42:12 And listen, I perhaps got too excited that it was something that didn’t sound insane to me.
0:42:14 And so I said, I think this is a good use of our taxpayer dollars.
0:42:15 I don’t know.
0:42:22 I need to see what the plan is fleshed out, but they are doing well with, frankly, putting the fear of God into people.
0:42:24 And folks are self-deporting.
0:42:27 Border crossings are basically nil at this point.
0:42:30 You don’t see any action on the southern border.
0:42:35 And this was a key promise that we would get people out of the country who are here illegally.
0:42:38 Now, I want the asylum system to continue to work.
0:42:39 Everybody deserves their due process.
0:42:48 There are innocent people in a foreign prison essentially serving now a life sentence that the El Salvadorian president isn’t even comfortable with.
0:42:52 That’s how depraved what the American administration has done, that Bukele is uncomfortable with it.
0:43:00 That said, $1,000, when you look at the cost and how overburdened our immigration system is, we don’t have enough judges.
0:43:03 We don’t have enough lawyers for these people.
0:43:09 I think maybe if it can help the process along about whether they should stay or go, this is something to explore.
0:43:10 It’s just so funny.
0:43:13 In some nations, they pay people to actually come there because they need labor.
0:43:13 Yeah.
0:43:14 Yeah, it’s going to be.
0:43:29 But it feels as if the administration has somewhat snatched a feed from the jaws of victory because had they not had this El Salvadoran stupidity, most Americans agree with a pretty hardline approach.
0:43:31 And the results, I don’t think you can argue with that.
0:43:33 The results have been dramatic, right?
0:43:36 And it’s like, okay, it’s one thing to break a few eggs.
0:43:39 It’s another thing to, like, burn the village to save it, right?
0:43:41 To totally go after due process.
0:43:44 And some of these stories really are heart-wrenching.
0:43:45 Okay.
0:43:47 Let’s take a quick break.
0:43:50 When we come back, our conversation with Senator Murphy.
0:43:51 Stay with us.
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0:47:17 Welcome back.
0:47:20 Joining us today is Connecticut Senator Chris Murphy.
0:47:21 Welcome to the show, Senator.
0:47:22 Hey, Scott.
0:47:23 Thanks for having me back.
0:47:34 So, there’s a viewpoint that, despite all the tumult, anxiety, general recognition that a lot of these actions from the administration are damaging to the economy,
0:47:43 and essentially kind of waving a middle finger at the Constitution, that while his popularity is down and he’s had the worst first hundred days,
0:47:47 the Trump administration, or Trump, is still more popular than the Democratic Party.
0:47:55 And the thesis is that the Democratic Party is seen as weak and that the American public would rather have an autocrat than a party that’s weak.
0:48:01 And you gave a very fiery speech called The Hundred Days of Corruption.
0:48:10 But in addition to these sort of fiery speeches and, you know, generally highlighting how corrupt this administration is,
0:48:12 it doesn’t feel like that’s enough.
0:48:18 It doesn’t feel as if the Democratic Party has shown any real tensile strength in terms of their ability to push back on the administration.
0:48:22 Other than speeches, what could possibly be done here?
0:48:25 Yeah, I mean, Scott, I think there’s a couple things to talk about here.
0:48:30 It is true that the approval ratings for the Democratic Party are in the toilet.
0:48:35 They’re bad, but not much worse than the approval ratings for the Republican Party.
0:48:38 People are just down on organized political parties right now.
0:48:45 And a lot of the reason why the Democratic number is very low is because Democrats are upset with the Democratic Party.
0:48:49 And that’s because, you know, Donald Trump has punched this entire country in the nose.
0:48:56 And a lot of Democrats are taking out their frustration with Trump on the leaders of their own party,
0:49:01 who they don’t believe have stood up in effective resistance.
0:49:05 Some of that is, I think, justified.
0:49:06 Some of that is not.
0:49:11 But it is also true that the Democratic Party is not seen as a strong enough alternative.
0:49:19 One of the things I worry about is that, well, it is true that this is the most corrupt White House in the history of the country.
0:49:30 Any one of these scandals from the meme coin to Starlink would have potentially taken down a previous president in a previous time.
0:49:36 The Democrats aren’t really seen as a credible anti-corruption messenger for a couple of reasons.
0:49:42 One, because, you know, we weren’t really serious about taking out corrupt members of our own party.
0:49:49 But also, we don’t really talk with enough volume about the ways in which we would clean up government if we were put in charge.
0:49:59 When I started out in politics 20, 25 years ago, you know, campaign finance reform, getting big money, corporate money, lobbyist money out of politics.
0:50:02 That was a top two or three issue for Democrats.
0:50:10 Somewhere along the line, we stopped explaining and maybe we stopped caring as much about unrigging the democracy.
0:50:15 Our sort of democracy talk became voting rights talk, which is really important.
0:50:25 But that’s actually not the thing that sort of scratches the itch that most Americans have today, which is the influence of billionaires and corporations inside politics.
0:50:36 So I think, you know, some of the low approval rings for Democrats are just a function of sort of the first six months of the Trump administration and people taking out their anger against anybody, including Democrats.
0:50:45 But some of it is because we just don’t talk enough about, you know, what we would do to unrig the democracy if we were put in charge.
0:50:54 And people aren’t going to really listen to our message of Trump’s corruption unless they really believe that we’re serious about changing the rules so that there’s less corruption.
0:51:15 So in addition to being taken seriously about being effective change agents, in terms of just our ability to kind of arrest or cauterize what a lot of people think is sort of an undoing of the post-World War II order that will take years, maybe even decades, to repair, I thought we hit a low point last weekend when Schumer said that we had sent a strongly worded letter to the president.
0:51:30 Well, I’ll put forward a thesis, start proposing laws that say if you’re operating black sites in your country or engaging in crypto scans with this current administration, if and when we get control of the House, we’ll propose laws that economically impair your nation.
0:51:43 Or remind some of the statute of limitations on fraud, corruption or a variety of other crimes, the statute of limitations is longer than three years and nine months.
0:51:50 I mean, just to put it bluntly, doesn’t the Democratic Party need to start acting like sort of the party of not fucking around, quite frankly?
0:51:52 I mean, what we’re doing just does not appear to be working.
0:51:56 Yes, that’s that’s right to an extent.
0:52:01 I mean, listen, his approval ratings are sinking and that is really important.
0:52:07 When a president gets down into the 30s, his enablers do start to get cold feet.
0:52:19 I mean, it will be harder for him to pass this massive cut in Medicaid funding in order to finance a billionaire tax cut if his approval ratings are at 35 percent.
0:52:33 So I don’t necessarily know that the message is in whole not working if in part what your goal is when you’re the majority party is to make the majority party really, really unpopular so that their legislative agenda gets jammed up.
0:52:42 But, yes, we have to be more willing to engage in risk tolerant behavior and we have not.
0:52:57 I mean, part of the reason that, you know, I argued that we should be willing to vote against that Republican continuing resolution was to show that we are not going to be complicit with Republicans on a budget that they wrote without any Democratic input.
0:53:07 The reason why I thought we all should have skipped the State of the Union speech is because that would have shown a level of seriousness about not wanting to legitimize his corruption and theft.
0:53:13 And you’re also probably right that we’re going to have to be clearer about the legal consequences.
0:53:22 You know, should somebody who’s on the level eventually get into the DOJ for the people who are blatantly violating the law?
0:53:48 I think sometimes people expect a little bit too much of the opposition party, but I think if we were engaging in tactics that were a little tougher and had, frankly, a little bit more potential downside for Democrats, that would cause people out in the public to be more willing to engage in riskier behavior themselves or institutions to engage in more riskier behavior as they’re trying to stand up a response to Trump’s extortion campaign.
0:53:58 I wanted to pick up on what you were saying about this risky behavior because there are a few people within the party and you’re one of them that have been looked to as the ones that are willing to push the envelope.
0:54:05 So Bernie and AOC out on their tour, you had a huge fundraising quarter, $8 million, right?
0:54:07 And you’re not up for reelection for a very long time.
0:54:13 So people are obviously appreciative of what you’re doing and the energy that you’re bringing to this fight.
0:54:22 But we know that elections are decided on issues and the big issue for the midterms is going to be the GOP reconciliation bill, the big, beautiful bill.
0:54:28 So we have $880 billion cut to Medicaid, also huge tax breaks for the wealthy.
0:54:35 How do you think that Democrats can effectively message what it is that this administration is doing?
0:54:40 If wealth inequality is a huge issue for them, this is it, you know, signed, sealed and delivered, wrap it up in a bow.
0:54:47 There is no clear indication that Main Street is irrelevant to them than what this bill has in it.
0:54:48 So what’s the plan?
0:54:53 Well, the plan has to be to not be distracted, and that’s tough.
0:55:03 But, you know, we are being gift-wrapped a piece of legislation that tells the entire story about the Trump administration’s priorities.
0:55:07 And as you mentioned, it’s a pretty simple story.
0:55:14 You’re talking about throwing millions of people off of their health care, potentially tens of millions of people off their health care.
0:55:23 Medicaid insures 24 percent of Americans in order to finance a massive tax cut for the richest Americans.
0:55:31 It’s about a trillion dollars in cuts to child nutrition programs and Medicaid and a trillion dollars of tax cuts for the richest 1 percent.
0:55:36 And so that’s a story we need to tell over and over and over again.
0:55:41 And the best result here is, frankly, to stop it from ever becoming law.
0:55:43 And I think we have a really good chance of doing that.
0:55:48 Nobody thought that we were going to be able to stop the repeal of the Affordable Care Act in 2017, but we did.
0:55:50 But they still paid a price for it.
0:55:55 They got walloped in the midterms because people didn’t really care that it didn’t pass.
0:56:01 They just saw loud and clear what their values were, which was to, at the time, throw 20 million people off their health care.
0:56:11 So we needed to dual track this, try to kill this bill, but also message it in a way that even if it disappears, they have to own the space.
0:56:38 And I think it’s OK to still talk about the assault on democracy because I would argue it’s all the same story, that this president’s agenda is so historically unpopular, so wildly unpopular, that the only way that the Republican Party survives this is for them to destroy democracy, destroy the rule of law, destroy the traditional means of accountability like a free press, a free university system, lawyers who can defend our rights.
0:56:39 So it’s all the same story.
0:56:48 They’ve got this deeply unpopular agenda, which is about destroying the middle class to empower the billionaires, and they have to destroy democracy in order to get away with it.
0:56:50 I think that’s an elevator pitch.
0:57:04 Like, that doesn’t take more than a minute, a minute and a half to explain to people and just don’t let his, you know, constant distraction campaign about talking about a third term or invading Canada stop you from being able to repeat that story five times a day.
0:57:09 Do you think that talking about Kilmer Obrego Garcia is one of those distractions?
0:57:21 No, because I think that is sort of central to this case of his attempt to destroy the rule of law because it’s the only way that he gets away with this thievery.
0:57:48 I mean, what he is, you know, essentially doing with a lot of these disappearances, standing on top of the legitimization of political violence through the pardoning of all the January 6th protesters is to try to put a chill when it comes to people who are going to stand up to him politically so that you don’t see the kind of crowds that you’ve seen in the past several weeks and months out there protesting his deeply unpopular agenda.
0:58:02 And I think, you know, that there is deep crossover potential in a way that maybe is unexpected on issues like Abrego Garcia that dovetail pretty nicely with the crossover message on stopping the cuts to Medicaid.
0:58:07 It turns out there are actually a lot of pretty conservative folks out there who don’t want any of this.
0:58:18 You know, I’ve, you know, said to folks, it’s, you know, a lot of the people who voted for him thought that he was serious about lowering costs and he wasn’t serious when he talked about being a dictator.
0:58:21 They’re finding out that the opposite is true.
0:58:23 He’s not serious about lowering costs.
0:58:26 He’s going to increase health care costs by kicking people off of Medicaid.
0:58:28 And he is serious about being a dictator.
0:58:37 And that’s a message that that sort of gives a permission structure for a lot of his vote and his base to think about crossing over.
0:58:39 Yeah. Steve Bannon could be used in a whole lot of ads.
0:58:41 He understood this perfectly.
0:58:41 Scott.
0:58:55 So Governors Bashir, Newsom, Whitmer, Moore, Secretary Buttigieg, Senators Bennett, Klobuchar, Murphy, we have an outstanding bench.
0:59:05 A lot of very strong moderates who I believe you’re going to have to have a moderate to triangulate and have a shot at getting through or winning in the general.
0:59:06 I’m going to talk about the primary.
0:59:16 Why, just as a tactic, and I’m not asking you to indicate your plans or what you’re planning or not planning to do, it feels like right now we’re leaderless.
0:59:27 That if the leaders of the Democratic Party are Senator Schumer or Leader Jeffries, I think most people think they’re not up to the job of pushing back on this onslaught of corruption and autocracy.
0:59:44 What do you think of the idea of one of you or more of you announcing now that you’re running for president such that we at least have effective pushback and someone that the media and the public can turn to on a daily basis for arguments and evidence around how wrong this is?
0:59:51 I mean, it seems to me that part of the problem is we just don’t have visible, vocal leadership right now.
0:59:56 What do you think of the idea of one or more of you announcing sooner rather than later that you’re running for president?
0:59:57 Yeah, I don’t know.
1:00:04 I mean, I hear this critique a lot, and there have been different suggestions about how to tackle this perceived problem.
1:00:12 That’s the first time I’ve heard the suggestion about starting the presidential campaign, you know, two years earlier than normal.
1:00:16 There’s also this idea about creating a shadow cabinet, you know, for instance.
1:00:21 I guess I don’t perceive that problem to be as acute or as real as you do, Scott.
1:00:24 I actually think that this party is pretty entrepreneurial.
1:00:31 Even though Bernie Sanders and AOC have no official role, they are still drawing tens of thousands of people.
1:00:32 I’m a rank-and-file member.
1:00:34 Max Frost is a rank-and-file member.
1:00:36 But we’ll have a couple thousand people in Florida.
1:00:40 We had a couple thousand people in Missouri and North Carolina last weekend.
1:00:42 I don’t know.
1:01:00 I think it might be just a little unrealistic to expect that you are going to have, three years prior to a presidential campaign, there be some consensus in the political class and the media class about who the one sole leader of the Democratic Party is.
1:01:07 Posit for a second that, you know, one of those high-profile names did jump out and declare their presidential aspirations really early.
1:01:10 Well, that might mean that the others do the same.
1:01:13 And then all that you have now is dem-on-dem violence.
1:01:23 You just have, you know, a presidential campaign starting way earlier than it should instead of all of our energy being trained on explaining the corruption and the thievery in the White House.
1:01:28 So I don’t see this as big a problem as it is.
1:01:47 I think what you’re frankly seeing is a lot of folks rise to the moment and, you know, get amplified voices and bigger stages that might not exist if you had some early contest to decide who the one person was that is the legitimate anti-Trump voice inside the progressive movement.
1:01:49 All fair points.
1:01:59 So one of the strategies that the administration or President Trump has deployed that I think has been very effective straight out of the GRU’s handbook of flood the zone.
1:02:06 So many outrageous things every day that you’re flat-footed, don’t know what to respond to, enter into a state of paralysis, end up running after things that aren’t that important.
1:02:12 And it feels as if we do need to focus on a small, finite number of issues in a very forceful yet dignified way.
1:02:14 One, do you agree with that?
1:02:18 And two, if you in fact agree with that, what would be Senator Murphy’s one thing?
1:02:28 If you could only talk about one issue that you think the Americans should be focused on in terms of how the administration is bad for America, what would be that one issue for you?
1:02:38 Yeah, listen, right now it’s this budget bill that proposes the most massive transfer of wealth from the poor and the middle class to the rich in the history of the country.
1:02:41 It tells the entire story about the values of this party.
1:02:48 They are trying to hand over our government to the billionaire class, and they are willing to run over regular people to get there.
1:02:53 It exposes him as a false populist in a way that no other issue does.
1:02:59 But as to kind of the tactical way that you deal with how he floods the zone, you have to flood the zone in return.
1:03:02 You have to create as much content as he does.
1:03:05 And that is a legitimate debate inside the party right now.
1:03:20 There’s a feeling that, you know, maybe we should just sort of sit back and, you know, let them destroy themselves, that we shouldn’t be acting every single day with five alarm urgency because that kind of wears people out.
1:03:22 I actually don’t think that’s true.
1:03:26 I think we have to, you know, put just as much content out there every day as he does.
1:03:34 I think it’s OK for us to sort of have our hair on fire on a daily basis because the democracy is under daily assault.
1:03:44 And as long as we stay, you know, pretty laser-like focused on that transfer of wealth, the cut to Medicaid, to finance the tax cut for millionaires, I think we’re on pretty, pretty safe ground.
1:03:49 You mentioned being out with Max Frost at town halls in Missouri and in Florida.
1:03:53 And I’d love to hear a little bit about what you saw there on the ground.
1:04:10 But also, by doing it with Max Frost, who’s the youngest member of Congress, you implicitly blessed this next gen, which I think is so important in the conversations that we’re having right now about people being too old for these roles, not passing the torch soon enough.
1:04:16 And someone like Max Frost understands flooding the zone because that’s just how a 20-something operates, right?
1:04:19 I wake up, I get on my phone, not me, I’m a 41-year-old.
1:04:25 But Max Frost wakes up and he starts posting because that’s just what’s built into his DNA.
1:04:36 And that feels like a natural way for us to be combating flooding the zone where it doesn’t feel like you have a 75-year-old in their car, you know, yelling into the abyss to create a video.
1:04:42 You have someone like a Max Frost or an AOC doing this, and it’s like inherent to who they are.
1:04:48 So can you talk about your town halls and also bringing in the next generation in a substantive way?
1:04:58 You know, it certainly is about volume, and you are right that this generation, right, doesn’t think twice, right, about posting dozens of times a day.
1:05:04 That’s just how online communication works, and it’s important for, you know, the older generation to understand that.
1:05:06 Second, it’s about authenticity.
1:05:12 It’s about removing the filter between you and your constituents and the voters, and Maxwell does that.
1:05:13 I do that.
1:05:23 But most sort of high-level politicians, governors and senators, still have that filter, still vet their communication through their communications staff.
1:05:24 So you don’t?
1:05:26 You post without approval?
1:05:33 I don’t, yeah, I mean, I don’t, so my, the feed that I control is my, is my, my Twitter feed, and that, yeah, that is just me.
1:05:38 Nobody sees those tweets before I send them out, and that provides sort of the foundation for most of my other content.
1:05:40 But voters are savvy today.
1:05:52 They now know the difference between authentic communication and non-authentic communication, in part because they’ve watched Donald Trump show the country what authentic communication full of mistakes looks like.
1:05:54 The town halls are amazing.
1:06:00 You know, any Democrat can show up anywhere right now, and, you know, you will have thousands of people coming out.
1:06:12 I think it’s really important to be in Republican districts, in part because if you are trying to build a true national movement, you have got to sort of show that even in the red parts of the country, folks are having second thoughts.
1:06:19 And so if you’re just having big turnouts in blue states, that doesn’t really ultimately move the needle.
1:06:43 So I don’t think it’s coincidental that, you know, once we started to see red states turning out, like what Bernie did in, you know, Idaho, and I think he was in, you know, somewhere in the Mountain West other than Idaho, you started seeing Trump’s blue ratings, you know, move down into the low 40s because Republican or prior Trump voters looked around and they said,
1:06:52 oh, I guess others who voted for Trump, others who live in places that look like the place I live in, have now have the same misgivings that I do.
1:06:57 So that’s why Max and I have been primarily going only to Republican districts, and I think we’ll continue doing that.
1:07:05 Yeah, you see, it’s pretty rough out there even for like Chuck Grassley, and I feel like his constituents love him, but they can’t help but be upset at what we’re seeing.
1:07:11 I love a little bit of a background perspective on how your Republican colleagues are feeling.
1:07:19 I know what they say to the cameras, but are they feeling as tense about this as I would imagine they should be?
1:07:25 So I have a little bit of a different perspective than a lot of my colleagues do on Republicans right now.
1:07:39 I really worry that we’re giving Republicans too much credit, this idea that they know what the right thing to do is and they aren’t doing it because they are scared of Donald Trump or scared of losing an election.
1:07:45 I think way more Republicans than you think have in their heart given up on the project of democracy.
1:08:00 You know, this work to undermine democracy inside the Republican Party that’s been, you know, handled and midwifed in part by the pseudo-intellectual infrastructure that surrounds MAGA, you know, it’s been ongoing for a decade.
1:08:01 It’s deep, it’s deep, it’s serious.
1:08:13 And so especially in the House of Representatives, I think the vast majority of Republicans there are absolutely willing to give up on elections if that guarantees Republicans rule forever.
1:08:22 Many Republicans, most Republicans in Congress have come to the conclusion that progressives writ large are an existential threat to the nation.
1:08:29 And so their number one goal, their mission is to stop Democrats from ever ruling again.
1:08:35 They’d like to do that without destroying democracy, but if that’s what it takes, then they’re willing to do it.
1:08:43 I just think you have to understand that instead of living in this world where, you know, they, oh boy, they’re all really wringing their hands about what Trump is doing to our democracy.
1:08:47 And they just, you know, can’t say it out loud because they’re so afraid of him.
1:08:53 In the Senate, yes, there’s, you know, a good group of maybe 15 to 20 who do know what he’s doing is wrong.
1:09:09 And those approval ratings sitting in the 30s for a period of months, you know, that may be the key to getting more of those Republicans to speak up or perhaps voting against some of the worst of this agenda, including the Medicaid cuts.
1:09:11 But I don’t mean to paint a hopeless picture.
1:09:17 I just think it’s really important not to sugarcoat what’s happened inside the Republican Party.
1:09:31 And it’s a it’s a decade long effort to try to explain why it’s time to transition America to a kind of autocracy or quasi democracy that can keep up with China.
1:09:32 Democracy is just antiquated.
1:09:33 It’s outdated.
1:09:36 It doesn’t work in a 2025 global context.
1:09:38 That’s what a lot of Republicans think today.
1:09:45 Senator, young women going slightly more moderate or progressive, young men significantly more conservative.
1:09:51 And I would argue that it’s not that they’re moving towards the Republican Party.
1:09:53 It’s the Democratic Party has moved away from them.
1:10:00 And when I was at the Democratic National Convention, I saw a parade of special interest groups really robustly representing their constituents.
1:10:06 But the one group that wasn’t discussed or referenced is the group that, in my view, has fallen furthest fastest, and that is young men.
1:10:09 And I think it really hurt us at the ballot box.
1:10:12 One, do you agree with that?
1:10:25 And two, if you do agree with that, what specific programs or ideas can the Democrats deploy to try and arrest the decline or at least nod how poorly young men are doing in our country?
1:10:27 I completely agree with that.
1:10:31 I mean, how can’t you, if you, you know, look at a lot of this polling data?
1:10:44 I think that, you know, what’s important to understand is that while a lot of the attention has been on young men, there has been a significant pull away by young women from the Democratic Party as well.
1:10:50 This is a phenomenon that exists most acutely with young men, but it exists with young people writ large.
1:11:07 I do think it’s worth really examining why the only movement on the left that has drawn large numbers of young people, but especially young men, over the last 10 to 20 years is Bernie’s movement.
1:11:17 And I think you really have to, there’s a lot of people who say, well, you know, Bernie’s brand of politics is toxic, it’s, you know, going to be the downfall of the Democratic Party.
1:11:25 But let’s be honest, you know, whatever you thought of the Bernie bros, there were a lot of young men who were attracted to what Bernie was selling.
1:11:40 And that’s because, you know, young men and young women together, but maybe young men in particular because of the very quick downfall of the sort of the economic patriarchy, see the consequences of a system that is totally and completely rigged.
1:11:44 And they are looking for an explanation about who did it to them.
1:11:49 For young men, you know, the conservative movement says, well, women did this to you.
1:11:59 Women did this to you, their rise in the workforce combined with the Me Too movement has been the source of your unraveling and undoing.
1:12:07 Well, what Bernie says is that, yes, somebody did this to you, but it’s not women, it’s the billionaire class.
1:12:15 It’s the corporate class who has rigged an economy to make sure that no young person can succeed as quickly as they could 30 or 50 years ago.
1:12:30 And I just don’t know that you’ll win young men back or you’ll win young people back if you don’t have a source for them to root their frustration is if you don’t have a story to tell about why their life got so difficult and so miserable all of a sudden.
1:12:34 So, you know, you talked earlier about a moderate candidate being the only path forward.
1:12:43 I’m not even sure that kind of center right left works any longer in describing sort of how the sort of political positioning exists today.
1:13:11 I think you probably win with a candidate who is more big tentest on social and cultural issues, who is less judgmental about people who may not, you know, think the way the most progressives think on climate or guns or gay rights, but is pretty populist on economic issues, is willing to sort of call out the way that corporations have rigged the economy and have some pretty big solutions, especially for young people about how their life is going to get better much more quickly.
1:13:18 Sherrod Brown was a loss on a whole host of levels, but you’re basically describing him in what you just said.
1:13:27 Yeah, and Sherrod, you know, I mean, Sherrod’s bona fides on choice and gay rights, on climate, right, rock solid.
1:13:34 But like Bernie, Sherrod, A, just chose to spend 80% of his time talking about an economic message.
1:13:43 And B, I think the perception in Ohio, even though he lost, was that he was less judgmental of people who thought differently than him.
1:13:48 And, you know, we have applied these litmus tests we just have as a party.
1:13:58 And, you know, we let the online left engage in a pretty regular shaming of anybody who isn’t inside the conventional orthodoxy.
1:14:00 And I think in the past, I’ve been a part of that.
1:14:05 I think a lot of us have been a part of that, either in taking part in it or looking the other way when it happened.
1:14:14 And when I think about how the Democratic Party recovers, I don’t necessarily think it’s in sort of becoming more moderate on economic issues.
1:14:24 I think it probably is, you know, confronting the failure of neoliberalism pretty directly, but it probably does mean becoming less judgmental and less preachy on the non-economic issues.
1:14:33 So if we were a household, we’re taking in $50,000 a year, we’re spending 70, a household debt of $370,000 that when we die, our kids will assume that debt.
1:14:38 We’re either going to have to, it appears to me, raise taxes or cut spending.
1:14:40 And the answer is probably both.
1:14:57 And I’m now of the mind that probably the only way to substantially decrease spending would probably be to attempt to really go after health care costs, which is the biggest part of our, you know, biggest consumer economy, our biggest consumer spending item with terrible outcomes.
1:14:59 One, do you agree with that?
1:15:19 And two, how could we, in fact, address a health care system where we spend eight times more for Humira or Ozempic than other nations and where hospital systems have figured out a way to make pricing totally non-transparent?
1:15:25 What, I mean, it just feels like Washington, quite frankly, has just been weaponized by the health care industrial complex.
1:15:30 And as a result, we have worse health outcomes with, for, you know, for more money.
1:15:32 How would you address health care costs?
1:15:37 So this is at the heart of the corruption story, and it’s a bipartisan corruption story.
1:15:43 This town is owned by the health care industry, and that’s been true for 30 years.
1:16:03 The reason health care costs are so high in this country is because the for-profit health care industry has been able to rig the rules so that they are able to collect a large amount of the total dollars spent in health care, whether it be, you know, on the private pay side or on the Medicare and Medicaid side,
1:16:10 And keep it for-profit returns to shareholders or massive CEO salaries.
1:16:22 It’s just not a coincidence that America, you know, is obviously spending twice as much as other nations on a per capita basis, and we don’t utilize the power of the federal government to control and regulate prices.
1:16:43 So there’s no way, ultimately, to solve for this problem the massive, massive amount of money that the government spends on health care without the government getting involved in helping to curb the amount of profit that the drug industry, that the hospital industry, that the hospice industry is making off of health care.
1:16:52 And it’s frankly a really critical moment right now because you are now seeing the sort of private equity game in health care at scale.
1:17:12 And, you know, the for-profit hospital companies and the drug companies, you know, they are thieves, but at least you can kind of see the thievery when you get to the point, you know, five, ten years from now where half of the, you know, health care system is owned by third parties, by private equity or hedge funds.
1:17:15 And you can’t even see the ownership structure.
1:17:20 It makes it a lot harder to kind of understand how to pull the levers to try to keep costs down.
1:17:26 So, you know, part of the reason that I think Democrats haven’t done as well as we should when it comes to health care is that our ideas are too small.
1:17:34 You know, we talk about, you know, our prescription drug policy for a long time was, you know, bulk negotiating the price of the top ten prescription drugs.
1:17:36 Which is like a good policy, but it leaves people feeling cold.
1:17:40 People want a hard cap on all drug prices, all drug prices.
1:17:43 They want a limit to the amount of profit that drug companies can make.
1:17:50 Like they want the ads off the air and all of that money plowed back into, you know, prescription drug price reductions.
1:18:03 So, I just think the Democrats are going to, you know, whether it’s a single payer system or not, the Democrats are going to have to talk about the government getting involved in the health care system to limit the amount of profit that the private sector makes and taxing along those savings to consumers.
1:18:11 So, speaking of big ideas, we of the G7 spend double what the other G6 spend on health care with worse outcomes.
1:18:15 And most of them have nationalized or socialized medicine, whatever you want to call it.
1:18:25 Would you be up for something along the lines of lowering the age eligibility of, say, Medicare by two years for 30 years and eventually having national health care?
1:18:28 I’m certainly game for that.
1:18:41 There’s another idea that I prefer, which is a national Medicare buy-in, right, to put Medicare as an option for every single individual and every single business.
1:18:48 It’s not an easy thing because you’d have to price Medicare, you know, into the private sector, but I actually have a piece of legislation to do it.
1:18:50 There’s other pieces of legislation out there.
1:18:55 And so, Medicare then would exist on every individual insurance exchange.
1:19:01 Every business would have the ability to buy the Medicare plan for its employees.
1:19:03 And it’s a way to kind of test the idea, okay?
1:19:07 You think private insurance is better insurance?
1:19:08 It’s cheaper insurance?
1:19:10 Well, let it go toe-to-toe with Medicare.
1:19:17 I think what would happen is very quickly individuals and businesses would choose to go on Medicare because it just is better health care for a lower price.
1:19:28 And you’d have a very natural market-based transition away from what we have now to something that looks like, you know, Medicare for all.
1:19:35 And once Medicare had, you know, 60%, 70% of the business, you know, frankly, the other companies probably couldn’t operate.
1:19:53 So, that to me is the big idea that, you know, gets it to where we probably need to get to, but it does it through consumer and business choice, which is just a whole lot more politically easy than what Bernie is proposing, which is to just have a big legislative fight over requiring that everybody be on Medicare and banning private health care insurance.
1:19:54 That’s really interesting.
1:19:55 It’s interesting.
1:19:56 I hadn’t heard that.
1:19:56 Yeah.
1:19:58 That’s why we have him on, Jess.
1:19:59 That’s why we have him on.
1:20:00 That’s why we have you on.
1:20:04 There’s a couple good ideas out there that you guys haven’t thought of yet.
1:20:05 Well, it’s hard to believe.
1:20:06 It’s hard to believe.
1:20:10 We need a new title for the podcast because moderates aren’t where it’s at.
1:20:11 We have to be more lefty.
1:20:12 All right.
1:20:14 Senator Murphy, thank you so much for your time.
1:20:16 Hopefully, you’ll come back again sometime soon.
1:20:17 Thank you, Senator.
1:20:18 Thanks, Jess.
1:20:18 All right.
1:20:19 That’s all for this episode.
1:20:21 Thanks for listening to Raging Moderates.
1:20:24 Our producers are David Toledo and Shanene Onike.
1:20:26 Our technical director is Drew Burrows.
1:20:30 You can now find Raging Moderates on its own feed every Tuesday and Friday.
1:20:31 That’s right.
1:20:32 Its own feed.
1:20:36 That means exclusive interviews with sharp political minds you won’t hear anywhere else.
1:20:40 This week, I’m talking to Representative Ro Khanna, who’s a personal favorite of mine.
1:20:44 Make sure to follow us wherever you get your podcasts so you don’t miss an episode.
1:20:45 See you later, Scott.
1:20:46 See you, Jess.

0:00:10 Finding your personal style isn’t easy, and the fashion powers that be aren’t making it any easier on us.
0:00:17 The best way to make sure they move a lot of units is to make stuff that is, to put it indelicately, sort of boring.
0:00:23 This week on Explain It To Me, how to cut through the noise and make sense of your own fashion sense.
0:00:26 New episodes every Sunday morning, wherever you get your podcasts.
0:00:39 Hey, it’s Marques from the Waveform Podcast, and I wanted to tell you about a special episode we just released called Your Favorite Creators’ Favorite Cameras.
0:00:42 This is pretty much the biggest behind-the-scenes video on the internet.
0:00:47 We talked to Casey Neistat on why he switched cameras after shooting Canon for so many years,
0:00:53 one of the hosts of the travel game show Jetlag, The Game, whose award-winning show is entirely shot on iPhones,
0:00:56 and tons of other tech, food, and filmmaking creators.
0:01:03 So, if you want to see how your favorite creator is filming their videos, be sure to check out Waveform wherever you listen to your podcasts.
0:01:06 Today’s number, $16.6 billion.
0:01:11 That’s the record amount American consumers lost to scammers and cybercriminals last year.
0:01:15 Ed, I just don’t have a joke about that, but I heard a lot of young men listen to this podcast,
0:01:18 so I have the ultimate pickup line.
0:01:18 You ready, Ed?
0:01:19 Mm-hmm.
0:01:21 You go up to someone you’re attracted to, and you say,
0:01:22 Can you take a picture of me?
0:01:24 Everyone always says yes, right?
0:01:25 No one ever says no to that.
0:01:26 Yep.
0:01:27 And then you say,
0:01:29 Can you turn on the mirror function and take a picture of the two of us?
0:01:31 And she’ll say,
0:01:32 Why?
0:01:33 And you say,
0:01:36 Because someday I’m going to show it to our kids.
0:01:38 Boom!
0:01:51 Ed, that’s how you lose your virginity at 19.
0:01:52 No, it isn’t.
0:01:54 Absolutely not.
0:01:55 Well, hold on.
0:01:56 Claire, would that work?
0:01:57 That’s a good line, no?
0:01:58 I don’t know.
0:02:00 It depends how cute he is.
0:02:00 Yeah.
0:02:02 Better be very handsome.
0:02:04 This guy better be incredibly handsome.
0:02:06 That’s a very telling comment,
0:02:08 because the difference between romance and creepiness
0:02:12 is the perceived attractiveness of the person making the overture.
0:02:15 And it’s impossible to know,
0:02:17 is this creepy or romantic?
0:02:21 Scott, have you ever actually used one of these pickup lines in real life?
0:02:22 I think they’re hilarious.
0:02:23 I love the whole,
0:02:25 Do you believe in love in first sight,
0:02:27 or should I walk by again?
0:02:27 Or, you know.
0:02:28 I love that shit.
0:02:35 But, no, my current and hopefully future partner
0:02:39 20, whatever, 21 years ago,
0:02:41 I just went up to her at the pool at the Raleigh Hotel
0:02:42 and I said, where are you guys from?
0:02:43 So, that wasn’t much of a line.
0:02:45 That wasn’t that creative.
0:02:47 But I was much more handsome then,
0:02:49 so I didn’t need to be that creative.
0:02:51 I think pickup lines are more for banter.
0:02:52 Certainly on this show.
0:02:53 Yeah.
0:02:53 How about you?
0:02:55 What’s been your approach?
0:02:57 I’ve always been, where are you from as well?
0:03:00 But I feel like it would be cool
0:03:03 to have an actually good pickup line
0:03:05 that’s provably worked.
0:03:07 But I feel like the thing that we’re learning,
0:03:09 at least in the past two minutes,
0:03:11 is that a lot of this has to do with,
0:03:12 are you handsome?
0:03:13 I don’t know.
0:03:15 I don’t think that’s as true or not as true for men.
0:03:16 I think women,
0:03:17 I think men get turned on with their eyes
0:03:18 and women get turned on with their ears.
0:03:20 I think if a guy has a good rap.
0:03:22 Yeah, but to get in there at the very beginning.
0:03:23 If you can make a woman laugh,
0:03:26 you can ask her out on a date.
0:03:29 I think it’s all about the rap.
0:03:31 I think women are much more thoughtful
0:03:34 in terms of their criteria for mating than dudes.
0:03:36 Well, by the way, Ed, I didn’t say handsome.
0:03:37 I said cute.
0:03:37 Cute.
0:03:40 Which could mean funny, charismatic, confident.
0:03:42 It’s all about the way he says it.
0:03:43 That’s a good point.
0:03:45 Ed rolls up and dials up the English accent.
0:03:46 He’s like, I’m from Princeton.
0:03:49 I went to Princeton.
0:03:51 Get to the headlines, Ed.
0:03:54 Let’s start with our weekly review of Market Vitals.
0:04:04 The S&P 500 climbed, the dollar rose, Bitcoin jumped,
0:04:06 and the yield on 10-year treasuries fell.
0:04:07 Shifting to the headlines.
0:04:11 U.S. GDP shrank 0.3% in the first quarter,
0:04:14 marking the economy’s first contraction in three years.
0:04:16 A surge in imports as companies raced
0:04:19 to get ahead of tariffs led to a sharp drop in net exports.
0:04:21 The major indices all fell in that news.
0:04:25 China’s factory activity fell into its worst contraction
0:04:26 in nearly two years.
0:04:29 New export orders also dropped to their lowest level
0:04:30 since December 2022.
0:04:34 In response, Chinese officials have pledged support
0:04:36 for affected businesses and workers.
0:04:38 And finally, Amazon has launched
0:04:41 its first internet satellites into orbit
0:04:43 in a bid to compete with SpaceX’s Starlink.
0:04:46 The company’s plan, called Project Kuiper,
0:04:49 should begin providing broadband service later this year
0:04:51 and eventually will deploy a constellation
0:04:54 of 3,200 satellites.
0:04:58 So let’s start here, Scott, with this GDP report.
0:05:02 A lot of people are seeing this report and they’re saying,
0:05:04 look how bad this is, look at what Trump’s done,
0:05:06 look how bad this is for the economy,
0:05:08 the economy’s contracting, etc.
0:05:11 And I just want to point out, before we dig into it,
0:05:13 that’s not really what’s going on here.
0:05:15 I think there are two things to note.
0:05:18 One, this is a measurement of the economy
0:05:20 before the tariffs went into effect.
0:05:23 This is Q1, so we’re not actually seeing the impact
0:05:24 of the tariffs themselves.
0:05:28 And two, the reason you’re seeing this contraction
0:05:31 is more of an accounting blip than anything.
0:05:35 And I just want to remind us of what GDP actually is,
0:05:37 just some macro 101 here.
0:05:41 GDP is an equation.
0:05:43 I mean, it’s a measurement of our economic output,
0:05:46 but the way we get to that number is an equation.
0:05:49 And one of the elements in that equation
0:05:51 is something called net exports,
0:05:55 which is basically you take our total exports
0:05:57 and you subtract our total imports.
0:05:59 And that’s supposed to tell you
0:06:01 how much stuff we actually made in America.
0:06:04 And so what that basically means,
0:06:07 if you have a giant increase in imports
0:06:08 into your country,
0:06:12 that’s going to mean that the net exports number goes down,
0:06:14 which means that the GDP number will go down.
0:06:17 And that’s what happened last week
0:06:20 because everyone knew in Q1 that tariffs were coming.
0:06:24 And so everyone scrambled to ship as many products
0:06:26 as they possibly could into the US
0:06:27 before the tariffs went into effect.
0:06:32 And that’s why we saw imports into America surge 41%,
0:06:35 which ultimately had a negative impact on GDP.
0:06:39 This isn’t the big tariffs are bad report
0:06:40 that you might think it is.
0:06:44 It’s the next GDP report that we will see in July.
0:06:47 That’s the one that’s going to tell us what’s really going on.
0:06:49 And that’s the one where I think we can have
0:06:53 a more honest analysis of what tariffs have done to America.
0:06:55 But Scott, your reactions to this GDP report,
0:06:57 which made a lot of headlines
0:06:59 and a lot of people were quite freaked out about it.
0:07:00 I don’t love GDP.
0:07:03 And also GDP is a bit of a lagging indicator.
0:07:07 And I think that the Trump administration can rightfully say
0:07:11 this is more about the economic policies of Biden
0:07:12 than it is about us.
0:07:15 And your analysis around the surge in imports
0:07:18 kind of contaminating the data is the correct one.
0:07:20 But why have we had a surge in imports?
0:07:24 Because people feel insecure about the economy
0:07:25 or specifically these tariffs.
0:07:28 And when I look at the uncertainty index,
0:07:31 which has hit a new high since like the 80s,
0:07:32 and consumer confidence,
0:07:34 which has hit a new low since COVID,
0:07:37 what it largely pretends is that
0:07:40 we’re going to see a decline in GDP in the next quarter.
0:07:43 I believe you’re going to see a dramatic decrease
0:07:45 in inventory in stores.
0:07:49 If you just look at those incredible kind of heat maps
0:07:50 of shipping lanes,
0:07:54 there are all these ships in kind of Hong Kong Harbor
0:07:56 that are just waiting to be loaded
0:07:57 and aren’t being loaded.
0:07:59 And then the port of Los Angeles,
0:08:00 which I believe is the biggest port
0:08:02 in the Western Hemisphere,
0:08:05 there’s very little offloading taking place.
0:08:06 So at some point,
0:08:08 and I don’t know if the lag is two weeks or two months,
0:08:10 you’re just going to see an absence of inventory
0:08:13 in stores.
0:08:14 And consumers have gotten to the point
0:08:16 where if they can’t get what they want,
0:08:18 they’re so used to such a robust supply chain,
0:08:18 they’re going to think,
0:08:20 A, if they’re not feeling good
0:08:21 about the consumer economy,
0:08:23 they don’t want to as aggressively buy
0:08:25 that new home gym or whatever.
0:08:28 And B, if the products they want are available,
0:08:30 they use that as an excuse just not to buy.
0:08:33 So I think winter is coming.
0:08:34 And that is,
0:08:36 I would imagine the next quarter,
0:08:36 there’s going to be,
0:08:37 you know,
0:08:38 they’ll find another reason to blame
0:08:39 Hunter Biden or something.
0:08:41 But this is,
0:08:43 they get a pass on this one, right?
0:08:46 But the fact that there’s,
0:08:47 again,
0:08:49 this massive surge in imports
0:08:50 is because our economy
0:08:53 is making asymmetric,
0:08:55 irrational decisions
0:08:58 based on an unpredictable administration
0:09:01 and unpredictable economic policy.
0:09:02 That sort of reminds me of
0:09:03 one of his latest,
0:09:06 Trump’s latest truths on Truth Social.
0:09:08 I hate that we have to call them truths,
0:09:09 but that’s what they are.
0:09:12 But he basically said,
0:09:14 so when the stock market ripped
0:09:15 after he was elected,
0:09:16 he said,
0:09:18 welcome to the Trump stock market.
0:09:20 And today,
0:09:21 I think last week,
0:09:23 he posted this truth,
0:09:25 this tweet that said,
0:09:27 this is the Biden stock market
0:09:27 that I inherited.
0:09:30 And it was sort of marking
0:09:31 his first hundred days in office,
0:09:31 which have been
0:09:33 one of the worst
0:09:34 stock market performances
0:09:36 for the start of a presidency
0:09:38 ever in America.
0:09:40 And it is sort of
0:09:41 a reminder
0:09:42 of how
0:09:45 basically his strategy
0:09:47 to distract
0:09:49 us from what is really going on.
0:09:50 You mentioned there
0:09:52 that GDP is a lagging indicator
0:09:54 and we can’t necessarily blame
0:09:55 Donald Trump
0:09:56 entirely
0:09:58 on this contraction
0:09:58 or at least
0:10:00 that’s not the right
0:10:01 argument to make.
0:10:02 But when it comes
0:10:03 to the stock market,
0:10:05 which is not a lagging indicator.
0:10:06 Forward-looking indicator.
0:10:07 The stock market is live,
0:10:08 real-time,
0:10:09 forward-looking indicator.
0:10:10 That’s the thing
0:10:11 to focus on.
0:10:12 And that’s the part
0:10:14 where you cannot say
0:10:16 this is the Biden stock market.
0:10:17 The stock market is live,
0:10:18 it’s real-time,
0:10:20 this is the Trump stock market.
0:10:22 S&P down 4%,
0:10:24 the Nasdaq down 8%
0:10:25 year-to-date.
0:10:26 So that’s the argument
0:10:28 that you definitely cannot make,
0:10:29 which of course he is making.
0:10:29 Agreed.
0:10:31 Let’s move on to this
0:10:32 manufacturing data.
0:10:34 China had its largest drop
0:10:36 in manufacturing activities
0:10:37 since 2023.
0:10:39 Export orders fell
0:10:39 to their lowest level
0:10:40 since COVID.
0:10:41 UBS,
0:10:42 Goldman Sachs,
0:10:43 are now lowering
0:10:44 their GDP growth forecast
0:10:45 for China
0:10:47 to lower than 4%.
0:10:49 And just for some context there,
0:10:51 we discussed this earlier
0:10:51 this year.
0:10:52 China,
0:10:53 at the beginning of the year,
0:10:54 had a growth target
0:10:56 of 5%
0:10:57 positive GDP growth.
0:10:59 So it looks like,
0:11:00 you know,
0:11:00 they’re not going to come
0:11:01 anywhere near that.
0:11:02 In fact,
0:11:03 I think we actually predicted that
0:11:05 or we at least said
0:11:06 that 5% was too ambitious.
0:11:09 So this manufacturing data
0:11:09 has come out.
0:11:10 It’s not looking good.
0:11:10 Scott,
0:11:11 your reactions
0:11:12 to this new data?
0:11:13 They likely will be hurt
0:11:15 more than us
0:11:15 in the short term.
0:11:17 But their tolerance
0:11:18 for pain
0:11:18 is much greater
0:11:19 than ours.
0:11:21 And I think
0:11:21 over the medium
0:11:22 and the long term,
0:11:22 China’s actually
0:11:23 a winner
0:11:25 because I think
0:11:25 they’re going to be
0:11:26 more aggressive
0:11:26 about establishing
0:11:27 relationships
0:11:29 with new partners
0:11:30 that’ll be more apt
0:11:32 or less reticent
0:11:32 to engage
0:11:33 in business
0:11:33 with them.
0:11:34 And also,
0:11:35 you’re already seeing
0:11:36 that basically
0:11:37 we’re thrusting
0:11:38 the EU
0:11:38 into the arms
0:11:39 of China
0:11:40 and vice versa.
0:11:41 Chinese e-commerce
0:11:42 exports to the US
0:11:43 fell by 65%
0:11:44 last month,
0:11:45 but exports
0:11:45 to Europe
0:11:47 rose by 28%.
0:11:48 And also,
0:11:48 what we forget
0:11:49 is that Europe
0:11:49 is actually
0:11:50 a bigger trading partner.
0:11:52 So that’s 28%
0:11:53 on a bigger number.
0:11:55 So the big winner
0:11:56 in the short term
0:11:58 is the EU
0:11:59 because you’ve got
0:11:59 to think
0:12:00 that a lot
0:12:01 of these factories
0:12:01 want to keep
0:12:02 their assembly lines
0:12:03 humming.
0:12:05 And so they’re going
0:12:05 to call a lot
0:12:06 of potential customers
0:12:07 in Europe
0:12:08 and say,
0:12:08 hey,
0:12:09 I can get you
0:12:09 a great deal
0:12:10 on this widget.
0:12:11 I mean,
0:12:12 this is effectively
0:12:12 the way I would
0:12:13 describe it.
0:12:14 America’s not dead,
0:12:15 but it’s the equivalent
0:12:16 of a death
0:12:17 of the kind of
0:12:18 existing post-World War II
0:12:21 world order
0:12:22 as led by
0:12:22 the United States.
0:12:23 And that is
0:12:24 these traditional
0:12:25 trading alliances
0:12:26 that were built up
0:12:27 over the last 80 years
0:12:28 of trust,
0:12:29 rule of law,
0:12:30 intellectual property.
0:12:32 It feels like
0:12:33 that is dead.
0:12:33 And what we have
0:12:35 is the largest yard sale
0:12:37 from an estate sale
0:12:37 from this rich old lady
0:12:38 down the street
0:12:39 who died.
0:12:41 And everyone’s showing up
0:12:42 and trying to figure out
0:12:43 how do they get their piece
0:12:44 of a $25 trillion economy.
0:12:46 I think our economy
0:12:47 is going to shrink
0:12:48 and a lot of other nations
0:12:49 are going to try
0:12:49 and figure out
0:12:50 how they fill that void
0:12:51 by either trade relationships
0:12:52 with each other,
0:12:53 making,
0:12:54 you know,
0:12:55 grabbing market share
0:12:56 from U.S. companies
0:12:57 that will no longer
0:12:58 have the same
0:13:00 most favored nation status
0:13:01 that they enjoy
0:13:02 with their international partners.
0:13:03 And you’re going to see
0:13:03 a lot,
0:13:04 in my opinion,
0:13:04 you’re going to see
0:13:04 a lot of small
0:13:05 and medium-sized businesses
0:13:06 go out of business
0:13:08 in the U.S.
0:13:11 and that economic activity
0:13:12 will be picked up
0:13:13 by other people
0:13:15 when the global economy
0:13:18 fills in those holes,
0:13:18 if you will.
0:13:20 So it’s interesting
0:13:21 to try and think about
0:13:22 who are the winners
0:13:22 in the short,
0:13:23 the medium,
0:13:24 and the long-term.
0:13:25 Biggest loser
0:13:25 in the long run,
0:13:26 hands down the U.S.,
0:13:27 both short,
0:13:27 medium,
0:13:28 and long,
0:13:28 I think.
0:13:30 But I think the EU
0:13:31 is actually going to be
0:13:32 a big winner here
0:13:34 because I got to think
0:13:35 China’s showing up
0:13:36 and saying,
0:13:36 hey,
0:13:37 the sale of the century
0:13:38 is right now
0:13:40 on Chinese goods.
0:13:41 I think this data,
0:13:43 it sort of highlights
0:13:43 the point that
0:13:44 Ryan Peterson made
0:13:45 when he came on the podcast,
0:13:46 which was he was really
0:13:47 trying to emphasize,
0:13:49 which the Trump administration
0:13:50 doesn’t seem to understand,
0:13:52 that trade is
0:13:53 a positive sum game.
0:13:54 You know,
0:13:56 when you make something
0:13:58 and I decide to buy it,
0:13:59 we’re actually
0:14:00 both benefiting there.
0:14:02 We’re both receiving value
0:14:03 from the transaction.
0:14:05 So when we decide
0:14:05 as a nation
0:14:06 that we want to get
0:14:07 into a trade war
0:14:07 with China,
0:14:09 it means that
0:14:10 we lose out
0:14:10 in a lot of ways
0:14:11 in America
0:14:12 in the form of
0:14:13 we have less stuff,
0:14:14 which leads to higher prices.
0:14:16 And also China loses
0:14:18 because they’re losing business.
0:14:19 They want to make stuff
0:14:20 and ship it over to us.
0:14:22 And we’re now beginning
0:14:22 to see that
0:14:24 reflected in the data.
0:14:24 And that’s what
0:14:26 this manufacturing activity data
0:14:27 tells us.
0:14:28 China is losing.
0:14:29 It’s actually
0:14:30 negatively impacting
0:14:31 their GDP.
0:14:33 But of course,
0:14:33 that’s going to be
0:14:34 the same story
0:14:35 over in America.
0:14:36 And your point,
0:14:37 I think,
0:14:37 is the right one.
0:14:39 Who are the winners here?
0:14:40 And it is so interesting
0:14:41 to see Europe
0:14:43 being reflected
0:14:44 or proven
0:14:44 as a winner
0:14:46 in this data.
0:14:46 You know,
0:14:47 we talked recently
0:14:48 about how China
0:14:49 is trying to rekindle
0:14:50 these relationships.
0:14:51 They’re sending
0:14:52 all these trade delegations
0:14:53 to Europe.
0:14:53 They went to Hungary
0:14:54 and Sweden
0:14:55 and Germany.
0:14:57 And I was sort of thinking,
0:14:59 I wonder if that’s going to work.
0:14:59 Like,
0:15:00 I wonder if Europe
0:15:01 buys that.
0:15:02 And to me,
0:15:04 those numbers
0:15:04 you mentioned,
0:15:06 exports to the U.S.
0:15:07 down 65%,
0:15:07 but exports
0:15:08 to Europe
0:15:10 up 28%.
0:15:11 And as you mentioned
0:15:12 as well,
0:15:13 off a large base,
0:15:14 my takeaway
0:15:15 is it’s working.
0:15:17 Europe is also
0:15:18 beginning to lift
0:15:19 some of these tariffs
0:15:20 that they had on China,
0:15:22 specifically EVs.
0:15:22 They’re beginning
0:15:24 to open negotiations
0:15:24 back up.
0:15:26 It does certainly feel
0:15:27 that as we close off
0:15:28 this relationship
0:15:29 with China,
0:15:30 we’re basically
0:15:31 sending China
0:15:32 into the arms
0:15:35 of all of our allies,
0:15:36 essentially.
0:15:37 I think Americans
0:15:38 are about to get a very,
0:15:39 eat a very cold lunch
0:15:40 in terms of
0:15:42 recognizing
0:15:43 just how
0:15:45 good they had it
0:15:46 past tense
0:15:47 that we had
0:15:48 so many amazing
0:15:49 trading relationships
0:15:49 that resulted
0:15:51 in a robust supply chain,
0:15:52 really inexpensive products,
0:15:53 tremendous opportunities
0:15:54 for entrepreneurs,
0:15:55 that whenever you start
0:15:56 an American company,
0:15:57 you have access
0:15:58 to global markets.
0:15:59 when I started L2,
0:16:00 when we got
0:16:01 like employee 30,
0:16:02 we opened an office
0:16:03 in London
0:16:04 and then when we got
0:16:05 to employee 60,
0:16:07 we started pitching
0:16:08 clients in China
0:16:09 and when you go over there
0:16:12 as an American company,
0:16:14 you’re pretty well received
0:16:15 and you understand
0:16:16 the cultures
0:16:17 and it’s easy
0:16:18 to do payments
0:16:19 and the contracts,
0:16:20 the business contracts
0:16:21 were not that difficult.
0:16:23 I think that’s
0:16:25 all about to change.
0:16:25 Let’s talk about
0:16:26 Project Kuiper.
0:16:28 We’ve been hearing
0:16:28 about this
0:16:29 for a while now.
0:16:30 This is Amazon’s
0:16:31 satellite internet project.
0:16:32 It’s basically
0:16:33 Amazon’s equivalent
0:16:34 of Starlink
0:16:35 and last week
0:16:35 they launched
0:16:36 their very first
0:16:38 satellites into orbit,
0:16:40 27 satellites to be exact.
0:16:41 The plan is to
0:16:42 eventually increase
0:16:43 that number
0:16:44 to 3,200.
0:16:46 So potentially
0:16:47 a big moment
0:16:47 for Amazon,
0:16:49 also potentially
0:16:50 a big moment
0:16:51 for Starlink,
0:16:52 but I think it’s
0:16:54 mainly just a reminder
0:16:55 of how far ahead
0:16:56 Starlink is
0:16:58 in this satellite race
0:16:58 right now.
0:16:59 I mentioned those
0:17:01 27 satellites
0:17:02 that Amazon launched.
0:17:03 Starlink has
0:17:05 7,200 satellites
0:17:06 in orbit
0:17:07 right now.
0:17:08 It makes up
0:17:09 62%
0:17:11 of all of the
0:17:11 active satellites
0:17:12 that are currently
0:17:13 orbiting the Earth.
0:17:14 So even if
0:17:15 Amazon were
0:17:15 to hit
0:17:16 that target
0:17:18 of 3,200
0:17:18 and who knows
0:17:19 when they’ll hit it,
0:17:20 they would still be
0:17:21 way behind Starlink.
0:17:22 Starlink is
0:17:24 the undisputed
0:17:24 leader
0:17:26 in satellite broadband.
0:17:27 No one comes
0:17:27 even close.
0:17:28 So Scott,
0:17:29 your reactions
0:17:30 to Amazon
0:17:30 trying to get
0:17:31 in the game here
0:17:32 and how they
0:17:33 might compete
0:17:34 with Starlink.
0:17:34 I think I’m
0:17:35 more bullish
0:17:35 on Amazon
0:17:36 than you
0:17:36 and just to call
0:17:37 balls and strikes,
0:17:38 we had the
0:17:39 internet go out
0:17:40 here in London
0:17:42 and Drew
0:17:43 immediately
0:17:44 scrambled the jets
0:17:44 and we had
0:17:45 someone,
0:17:45 this guy
0:17:46 came over
0:17:46 and he went
0:17:47 out and bought
0:17:48 a Starlink
0:17:48 a portable
0:17:49 and he hooked
0:17:49 it up
0:17:50 and it wasn’t
0:17:50 as good
0:17:51 but within
0:17:51 four hours
0:17:51 we had
0:17:52 pretty robust
0:17:53 broadband.
0:17:53 The product
0:17:54 is exceptional
0:17:56 and I just
0:17:57 think it’s
0:17:57 strange
0:17:58 and almost
0:17:59 kind of weird
0:17:59 that we would
0:18:00 let one
0:18:01 man control
0:18:02 two-thirds
0:18:03 of low-Earth
0:18:03 satellites,
0:18:04 low-Earth
0:18:05 orbit satellites.
0:18:05 That to me
0:18:06 feels almost
0:18:06 like a security
0:18:07 risk.
0:18:08 Where I’m
0:18:10 more bullish
0:18:10 on Amazon
0:18:12 is that I don’t
0:18:12 think Amazon
0:18:14 needs to get
0:18:15 to product parity
0:18:16 because I think
0:18:17 the vision here
0:18:17 if I were
0:18:18 Jeff Bezos
0:18:18 I’d wait
0:18:19 until I had
0:18:19 a decent
0:18:20 product
0:18:21 and then
0:18:21 you know
0:18:21 what I’d
0:18:22 stitch it in
0:18:22 with?
0:18:23 The Kuiper
0:18:23 offering?
0:18:24 What?
0:18:25 Amazon Prime.
0:18:27 82% of
0:18:28 Americans
0:18:30 have Amazon
0:18:31 Prime,
0:18:31 it’s arguably
0:18:32 the most
0:18:32 successful
0:18:33 and largest
0:18:33 loyalty
0:18:34 program
0:18:34 in history
0:18:35 and maybe
0:18:35 the second
0:18:35 largest
0:18:36 recurring
0:18:37 revenue
0:18:37 product
0:18:38 in history
0:18:38 maybe
0:18:38 behind
0:18:39 Netflix
0:18:39 or
0:18:40 I guess
0:18:40 Microsoft
0:18:41 Office.
0:18:42 Their brand
0:18:43 is so deep
0:18:44 in terms of
0:18:44 trust in a
0:18:45 consumer offering
0:18:47 and I think
0:18:48 that Musk is
0:18:48 beginning to
0:18:49 contaminate his
0:18:50 brands.
0:18:51 Bezos will
0:18:52 close the gap,
0:18:52 they have the
0:18:53 gap capital.
0:18:54 To your point,
0:18:54 I’m not sure
0:18:55 they ever
0:18:55 actually catch
0:18:56 up,
0:18:57 but they’re
0:18:58 talking about
0:18:59 they want
0:18:59 to have
0:18:59 3,200
0:19:00 satellites.
0:19:01 But I think
0:19:02 if they get
0:19:02 there,
0:19:03 say to 80
0:19:04 or 90%
0:19:05 of Starlink,
0:19:06 it’ll force
0:19:07 Starlink’s
0:19:07 hand and I
0:19:08 think or SpaceX
0:19:08 and it’ll have
0:19:09 to go public
0:19:09 for access to
0:19:10 more cheap
0:19:10 capital.
0:19:11 But this is
0:19:12 going to be a
0:19:13 celebrity death
0:19:13 match.
0:19:14 Also,
0:19:16 one of the
0:19:16 things we talk
0:19:16 about in
0:19:17 brand strategy
0:19:18 is one of
0:19:18 the keys or
0:19:19 kind of pillars
0:19:20 of branding
0:19:20 is just
0:19:20 awareness.
0:19:22 if you think
0:19:23 about the
0:19:23 products you
0:19:24 purchase,
0:19:25 you’re really
0:19:26 unlikely to
0:19:27 purchase a
0:19:27 product you’ve
0:19:28 never heard of
0:19:29 or you’re much
0:19:29 more inclined to
0:19:30 purchase anything
0:19:32 you hear of the
0:19:32 brand.
0:19:32 Oh, I would
0:19:33 buy a Toyota.
0:19:34 For big
0:19:34 purchases, you
0:19:35 just don’t want
0:19:36 to buy anything
0:19:36 that you haven’t
0:19:36 heard of.
0:19:37 Think about it
0:19:37 just on a
0:19:38 personal level,
0:19:39 people’s brands.
0:19:40 I think it’s
0:19:40 something like 40
0:19:41 times more likely
0:19:42 to respond to
0:19:42 an email from
0:19:43 someone you know
0:19:44 or even if you
0:19:44 don’t know them
0:19:45 well, you’ve
0:19:45 just heard of
0:19:46 them than
0:19:47 someone whose
0:19:47 name you don’t
0:19:48 recognize.
0:19:49 So awareness
0:19:50 is enormous
0:19:51 and I think
0:19:52 Kuiper is
0:19:52 about to
0:19:53 become one
0:19:53 of the fastest
0:19:54 zero to 60
0:19:55 brands in
0:19:56 history and
0:19:56 that is I
0:19:57 would bet less
0:19:59 than 1% of
0:19:59 the US
0:20:00 population knows
0:20:01 brand Kuiper
0:20:02 right now and
0:20:02 I would bet 60
0:20:03 to 80% by the
0:20:04 end of the
0:20:04 year know it
0:20:06 because it’s
0:20:06 going to be
0:20:07 constantly in
0:20:08 the news,
0:20:08 right?
0:20:09 I mean it
0:20:09 ends up that
0:20:10 maybe shooting
0:20:11 Katy Perry
0:20:11 into space
0:20:12 wasn’t a bad
0:20:12 idea.
0:20:12 It was probably
0:20:13 a bad idea
0:20:13 to bring her
0:20:14 back but
0:20:15 maybe this
0:20:18 technology that
0:20:18 he’s spending
0:20:19 all this money
0:20:20 on is for a
0:20:20 reason, right?
0:20:21 Other than
0:20:21 sending his
0:20:22 girlfriend into
0:20:23 space and
0:20:24 Amazon has the
0:20:25 capital, they
0:20:25 have the
0:20:25 technical
0:20:26 expertise, I
0:20:27 bet they’re
0:20:27 going to find
0:20:28 a lot of
0:20:28 people from
0:20:29 SpaceX are
0:20:29 willing to go
0:20:30 to work for
0:20:30 them.
0:20:31 This could be
0:20:33 to Starlink
0:20:33 what Old
0:20:33 Navy is to
0:20:36 get 80% of
0:20:37 the quality for
0:20:37 50% of the
0:20:38 price and
0:20:38 there’s a
0:20:39 market for
0:20:39 that.
0:20:40 And the
0:20:41 moment they
0:20:41 stitch it
0:20:42 into Amazon
0:20:43 Prime, I
0:20:43 think the
0:20:44 thing gets
0:20:44 10, 15,
0:20:45 20% of
0:20:45 households.
0:20:47 It made
0:20:47 me, you
0:20:47 know, I’ve
0:20:49 been slowly
0:20:50 but surely
0:20:50 burning down
0:20:51 my U.S.
0:20:51 equities.
0:20:52 I’ve been
0:20:52 selling Apple
0:20:53 and a little
0:20:53 bit of Amazon
0:20:54 and I’m
0:20:54 actually now
0:20:55 thinking about
0:20:55 holding on to
0:20:55 my Amazon
0:20:56 because I
0:20:56 think the
0:20:59 countervailing
0:20:59 forces here,
0:20:59 speaking of
0:21:00 China, two
0:21:01 thirds of
0:21:02 Amazon’s
0:21:02 businesses in
0:21:03 the U.S.
0:21:03 and I think
0:21:03 the U.S.
0:21:04 can be negatively
0:21:04 impacted.
0:21:05 But I
0:21:05 think this
0:21:05 is very
0:21:06 exciting for
0:21:07 Amazon and
0:21:08 I just love
0:21:09 seeing a
0:21:10 company that’s
0:21:11 as important as
0:21:12 SpaceX get a
0:21:12 competitor.
0:21:12 I think it’ll
0:21:13 make them both
0:21:13 better.
0:21:13 So I’m
0:21:15 actually really
0:21:15 excited.
0:21:16 Starlink, by
0:21:16 the way, so
0:21:17 far has
0:21:18 projected revenue
0:21:19 in 2025 of
0:21:19 $12.3
0:21:20 billion.
0:21:20 That’s up
0:21:22 57%.
0:21:23 7.6
0:21:23 million
0:21:24 subscriptions
0:21:24 projected by
0:21:25 the end of
0:21:25 2025, a
0:21:27 65% increase.
0:21:28 Again, 7.6
0:21:28 million.
0:21:28 Keep in
0:21:30 mind, Amazon
0:21:31 I think has
0:21:33 about 110 or
0:21:34 120 million
0:21:34 households.
0:21:35 have Prime.
0:21:36 Over 200
0:21:37 million subscribers
0:21:39 globally, 180
0:21:40 million adults in
0:21:41 the United States
0:21:42 are Amazon Prime
0:21:43 members.
0:21:44 That’s like most
0:21:44 of them.
0:21:45 Basically, more
0:21:46 people have
0:21:46 Amazon Prime
0:21:47 than have a
0:21:47 Christmas tree,
0:21:48 own a gun,
0:21:49 or have kids.
0:21:50 You’ve honestly
0:21:51 completely sold me
0:21:51 on it.
0:21:52 I’m totally with
0:21:53 you and it seems
0:21:53 to make so much
0:21:54 sense for Amazon’s
0:21:55 business, which
0:21:56 they have a
0:21:57 history of getting
0:21:58 into businesses
0:21:59 that are somewhat
0:21:59 indispensable.
0:22:00 You know, they
0:22:03 get into household
0:22:04 products, they get
0:22:04 into groceries,
0:22:05 buy Whole Foods,
0:22:07 they get into
0:22:08 healthcare, content,
0:22:09 all these kinds of
0:22:10 businesses where
0:22:12 it’s like something
0:22:13 you just have to
0:22:14 have, and then
0:22:15 they make it a
0:22:16 recurring subscription.
0:22:18 And it does feel
0:22:19 like the next
0:22:20 planet to conquer
0:22:21 is broadband and
0:22:22 the internet.
0:22:23 And so I think
0:22:23 you’re probably
0:22:24 right.
0:22:25 Just a question of
0:22:26 how it would
0:22:27 actually work.
0:22:28 What do you think
0:22:29 the offering would
0:22:30 actually look like?
0:22:30 Do you think it’s
0:22:32 like a premium
0:22:33 Amazon Prime
0:22:34 subscription that
0:22:35 gives you some
0:22:36 sort of discount
0:22:39 on a Kuiper
0:22:40 satellite dish?
0:22:41 Yeah, it’ll be
0:22:41 something like
0:22:42 Amazon Prime Plus
0:22:43 where it’s like,
0:22:44 okay, flip the
0:22:45 switch on here,
0:22:46 tell us when you’re
0:22:47 home, give us a
0:22:48 window, and we’re
0:22:48 going to come
0:22:49 install this cool,
0:22:50 elegant, whatever it
0:22:51 is, and overnight
0:22:52 you have massively
0:22:54 blinding internet
0:22:55 speeds.
0:22:57 And the thing that
0:22:57 people underestimate
0:22:58 is just how lazy
0:22:59 consumers are.
0:23:00 I got so excited
0:23:01 about Jeff Bezos
0:23:02 standing up to
0:23:03 Donald Trump and
0:23:04 deciding to post
0:23:04 tariffs next to
0:23:06 every product that
0:23:07 I went out, no
0:23:08 joke, or I went
0:23:08 out, I went on
0:23:10 Amazon, and I
0:23:12 ordered 16 Bose
0:23:14 Ultra headphones for
0:23:14 the team.
0:23:15 And I thought,
0:23:16 okay, I’m going to
0:23:18 spend $6,400 on
0:23:18 Amazon, and I’m
0:23:19 going to go on
0:23:20 Threads and Blue
0:23:21 Sky and Virtue
0:23:22 Signal about how
0:23:22 great it is that
0:23:23 Amazon is doing
0:23:24 this.
0:23:24 And then that
0:23:25 motherfucker
0:23:25 caves.
0:23:28 And so I’m
0:23:30 like, I’m
0:23:31 threading, good
0:23:32 for him, he
0:23:32 reached down, and
0:23:33 despite all the
0:23:33 human growth
0:23:34 hormone, he
0:23:34 found these
0:23:35 little, little,
0:23:36 tiny, little,
0:23:37 wee things called
0:23:38 testicles, and
0:23:39 decided to put
0:23:40 them into action,
0:23:40 good for him,
0:23:41 good on Bezos.
0:23:42 If only he’d
0:23:43 known he would
0:23:43 have gotten the
0:23:44 backing of Scott
0:23:45 Galloway, maybe
0:23:45 he would have
0:23:46 stuck with it.
0:23:47 Literally, I’m
0:23:48 like, I am
0:23:49 literally, I
0:23:50 thread, this is
0:23:50 what leadership
0:23:52 looks like, send,
0:23:52 and all of a
0:23:53 sudden I get a
0:23:53 text from Kara
0:23:54 Swisher, he
0:23:55 caved, he
0:23:56 caved.
0:23:57 She saw
0:23:59 my thread, and
0:23:59 literally as she
0:24:00 saw my thread, she’s
0:24:00 like, he
0:24:01 caved, you’re
0:24:02 wrong, he
0:24:03 caved, he’s a
0:24:04 fucking wimp and
0:24:04 a loser.
0:24:06 And I’m like, and
0:24:07 so I go back to
0:24:08 Amazon, and I
0:24:09 cancel my order.
0:24:09 I was just
0:24:10 going to say, do
0:24:11 we get the
0:24:11 headphones?
0:24:11 No, we
0:24:12 don’t.
0:24:13 No, bitch,
0:24:13 call Amazon,
0:24:15 call Bezos and
0:24:16 tell him to start
0:24:16 acting like an
0:24:17 American.
0:24:17 All right, I’ll
0:24:18 take it up with
0:24:18 him.
0:24:19 But the
0:24:19 moral of the
0:24:21 story is it is
0:24:23 so seamless to
0:24:23 add and take
0:24:24 things away from
0:24:26 Amazon Prime that
0:24:27 the moment it
0:24:28 pops up and it
0:24:29 says, Scott, Amazon
0:24:31 Prime Plus includes
0:24:32 this blinding
0:24:35 broadband, wow, I
0:24:37 would bet, God, I
0:24:37 don’t know, I
0:24:38 would bet by the
0:24:42 end of 27, you
0:24:43 could very easily
0:24:44 see Kuiper have
0:24:45 more penetration
0:24:46 than Starlink.
0:24:46 You’ve
0:24:46 certainly
0:24:47 convinced me.
0:24:48 I’m definitely
0:24:49 more bullish today
0:24:50 than I was
0:24:51 yesterday.
0:24:53 We’ll be right
0:24:54 back after the
0:24:55 break with a
0:24:55 look at big tech
0:24:56 earnings.
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0:28:44 markets.
0:28:46 All right, let’s get into
0:28:47 big tech earnings.
0:28:49 Microsoft, Meta, Apple, and
0:28:50 Amazon all reported earnings
0:28:51 last week.
0:28:52 We’re recording this a day
0:28:53 later, hence why we’re
0:28:54 dressed differently so that
0:28:55 we could react to these
0:28:55 earnings.
0:28:56 We’ll start with a look at
0:28:59 Microsoft and Meta, whose
0:29:00 shares both rose pretty
0:29:01 significantly after earnings
0:29:02 here.
0:29:03 Microsoft posted record
0:29:05 revenue and record
0:29:05 profits.
0:29:07 Beat on the top and bottom
0:29:07 lines.
0:29:10 shares rose 9%, which
0:29:11 now makes Microsoft the
0:29:13 most valuable company in
0:29:14 the world, ahead of
0:29:14 Apple.
0:29:17 Meta was also a beat, beat
0:29:18 on the top and bottom
0:29:18 lines.
0:29:20 Revenue rose 16%.
0:29:22 Shares in Meta rose 6%
0:29:22 after hours.
0:29:25 Really great quarters for
0:29:26 Meta and Microsoft.
0:29:28 Scott, your reactions to
0:29:29 these two earnings?
0:29:30 Well, Daddy went deep in
0:29:31 the paint last night.
0:29:34 I’m not used to working
0:29:35 on Friday.
0:29:36 I’m used to long walks
0:29:37 with the dog and trying to
0:29:38 get this newsletter out.
0:29:39 As you can tell by the
0:29:40 way I’m dressed.
0:29:42 Yeah, my green juice.
0:29:44 Most importantly, the
0:29:45 door women from
0:29:47 Children did a pop-up last
0:29:48 night at the Broadwick
0:29:49 Hotel, and it was pretty
0:29:49 good.
0:29:50 It was pretty good.
0:29:51 I spilled drinks on all
0:29:53 my friends, which at the
0:29:54 time was kind of a bummer,
0:29:55 but it’s brought me real
0:29:56 joy today, just thinking
0:29:58 about that moment.
0:30:00 I mean, literally, I went
0:30:01 and got four drinks, and
0:30:03 not an ounce of it was not
0:30:05 on them within about 30
0:30:06 seconds.
0:30:06 Anyways, okay.
0:30:08 So, look, there’s just
0:30:09 no getting around it.
0:30:10 All of these terms have
0:30:12 kind of gone from, it’s
0:30:13 like good, better, best in
0:30:14 terms of their earnings.
0:30:16 Revenue up 13%, as you
0:30:17 said.
0:30:18 What was really impressive
0:30:19 was their cloud unit.
0:30:20 Revenue rose 33%.
0:30:22 That’s just incredible, and
0:30:24 then net income up 18%.
0:30:26 The CapEx was interesting.
0:30:28 You highlighted the first
0:30:29 thing I noticed, and that
0:30:30 is CapEx declined for the
0:30:31 first time.
0:30:32 And I wonder how much of
0:30:35 that is DeepSeq has given
0:30:35 them a little bit of
0:30:36 pause saying, maybe we
0:30:37 don’t need to build nuclear
0:30:40 power plants, and we’re not
0:30:41 in an arms race, that maybe
0:30:43 there is a fork in the road
0:30:45 here, or a plan B, where our
0:30:48 AI future may not require the
0:30:49 CapEx we’d initially
0:30:50 thought, so it feels like
0:30:51 they’re maybe taking a
0:30:52 pause on that.
0:30:54 And then, its stock is up
0:30:57 13%, because people keep
0:30:58 saying, all right, if
0:31:00 you’re, how do I, what is
0:31:01 the defensive play?
0:31:02 What is the recession-proof
0:31:02 stock?
0:31:04 And Microsoft brings you
0:31:04 kind of the peanut butter
0:31:07 of a tech company with
0:31:09 pretty decent growth, with
0:31:10 the chocolate of a
0:31:11 defensive company, right?
0:31:13 Because it really is, it’s
0:31:15 pretty well diversified, it’s
0:31:16 global, and it’s hard to
0:31:18 see how, other than impact
0:31:20 on the global economy, how
0:31:21 it can, you know, it would
0:31:23 be really hurt versus an
0:31:26 Amazon by its, by the
0:31:26 tariffs.
0:31:27 I think it gets about half
0:31:27 its revenues from
0:31:28 overseas, whereas Amazon
0:31:29 gets two-thirds of its
0:31:30 revenues here.
0:31:31 So, it has both this
0:31:32 recurring revenue stream of
0:31:34 the largest corporate
0:31:36 recurring revenue base in
0:31:37 history with Microsoft
0:31:38 Office that I think, you
0:31:40 know, 5,000 of the
0:31:41 corporate 5,000 companies
0:31:44 use, and then it has the
0:31:46 rocket fuel of a nice AI
0:31:46 overlay.
0:31:49 So, it benefits from
0:31:50 probably some of this
0:31:51 insecurity because it’s
0:31:53 seen as quality in what is
0:31:54 arguably right now a flight to
0:31:55 quality.
0:31:55 Your thoughts?
0:31:56 Yeah, I think that’s all
0:31:56 right.
0:31:57 And I think the most
0:31:59 important number was the
0:32:00 cloud growth.
0:32:01 I mean, I’ve said this
0:32:03 before, but I think if
0:32:04 you’re in the AI business
0:32:07 today, that’s all Wall
0:32:08 Street really cares about.
0:32:09 You can beat on overall
0:32:10 revenue, which they did.
0:32:12 You can beat on overall
0:32:13 profits, which they did.
0:32:14 But the thing that Wall
0:32:15 Street really wants to
0:32:16 see is, are you
0:32:18 outperforming in terms of
0:32:20 their expectations for
0:32:22 cloud growth or, in other
0:32:23 words, AI growth?
0:32:25 And that is what they
0:32:25 proved here.
0:32:27 Microsoft Azure, which is
0:32:28 their cloud unit, and we
0:32:29 should just call it their
0:32:30 AI unit.
0:32:30 That’s where they’re
0:32:32 selling compute to AI
0:32:33 companies.
0:32:36 That revenue rose 33%.
0:32:37 And Wall Street’s
0:32:38 expectations for that
0:32:39 business was 29%.
0:32:41 Also, the guidance for
0:32:42 that unit for Microsoft
0:32:44 Azure, they expect the
0:32:45 number in this current
0:32:47 quarter, so when they
0:32:48 next report earnings, they
0:32:50 expect growth to be 35%,
0:32:51 so even higher.
0:32:52 And that also beat
0:32:53 expectations.
0:32:55 So that’s the number that
0:32:56 Wall Street really cares
0:32:56 about.
0:32:57 The opposite effect
0:32:59 happened with Amazon,
0:33:00 which we’ll get to in a
0:33:00 second.
0:33:03 But yes, the CapEx that
0:33:04 you mentioned, that also
0:33:04 jumped out to me.
0:33:07 $21.4 billion, that’s a
0:33:08 lot.
0:33:09 But it is a decline from
0:33:11 the previous quarter, and
0:33:13 it’s the first CapEx
0:33:14 decline for Microsoft in
0:33:15 more than two years.
0:33:17 You pointed out that maybe
0:33:18 this is a response to
0:33:18 DeepSeq.
0:33:20 I think that’s definitely a
0:33:21 possibility.
0:33:22 I was wondering if maybe
0:33:24 it’s a response to just
0:33:25 the tariff environment.
0:33:26 I mean, we’re just living
0:33:28 in a more uncertain
0:33:30 economic environment right
0:33:31 now, and I wonder if
0:33:33 because of that, they
0:33:35 were thinking we’re going
0:33:36 to go all in on AI
0:33:37 beforehand, and now they’re
0:33:38 beginning to pare back
0:33:39 some of those
0:33:40 ambitions, start to play
0:33:41 things a little bit
0:33:41 safer.
0:33:43 CapEx is still going to
0:33:44 grow, but it’s just not
0:33:44 going to grow as fast as
0:33:45 they said it would last
0:33:45 year.
0:33:47 So I wonder if that’s, it
0:33:48 could be DeepSeq.
0:33:49 I wonder if it could be a
0:33:50 tariff response too.
0:33:51 What’s interesting about
0:33:53 Meta, moving on to
0:33:55 Meta here, Meta had the
0:33:55 opposite.
0:33:56 They are actually
0:33:58 accelerating their CapEx
0:33:58 investment.
0:34:00 They raised CapEx
0:34:01 guidance from what was
0:34:03 previously a high end of
0:34:05 $65 billion to now
0:34:06 $72 billion.
0:34:08 So Microsoft, meanwhile,
0:34:10 is playing it safe.
0:34:12 Meta appears to be
0:34:13 actually leaning into the
0:34:14 uncertainty.
0:34:16 The number that really
0:34:18 jumped out to me was
0:34:19 3.43 billion.
0:34:21 That’s the number of
0:34:23 users who use a Meta
0:34:25 app every single day.
0:34:26 That’s the daily active
0:34:26 user number.
0:34:28 It’s up 6% year over
0:34:30 year, which means that
0:34:31 more than 40% of the
0:34:34 entire world population
0:34:36 is getting on a Meta
0:34:36 app, whether it’s
0:34:38 Instagram or Facebook or
0:34:39 WhatsApp, they’re using it
0:34:40 every single day.
0:34:41 I find the most
0:34:42 interesting application of
0:34:43 AI from a shareholder
0:34:44 standpoint is actually
0:34:45 pretty boring, and that
0:34:47 is it’s Meta’s ability
0:34:49 to increase the
0:34:50 targeting of their
0:34:51 products.
0:34:53 So they are not only
0:34:54 increasing their
0:34:57 revenue, I think their
0:34:59 revenue or the way they
0:35:00 monetize their traffic has
0:35:01 gone up, their CPMs have
0:35:03 gone up, or they’re able to
0:35:03 charge more.
0:35:05 But not only that, their
0:35:08 AI, which feeds into the
0:35:10 recommendation engine or the
0:35:11 recommendation systems,
0:35:13 contributed to a 35% increase
0:35:14 in time spent on threads,
0:35:17 7% increase in time spent on
0:35:18 Facebook.
0:35:18 That’s amazing.
0:35:19 That’s like getting
0:35:20 younger people to watch
0:35:21 MSNBC, right?
0:35:23 If you can get more people
0:35:24 to spend more time on
0:35:25 Facebook, that’s not easy at
0:35:25 this point.
0:35:27 6% increase in Instagram.
0:35:30 And then if you think
0:35:32 about, you know, one of the
0:35:33 predictions we have for this
0:35:34 year was that Meta was
0:35:35 going to be the AI company
0:35:36 at 25 because they’re the
0:35:38 second largest purchaser of
0:35:39 GPUs from an NVIDIA.
0:35:41 And I personally, I don’t
0:35:42 know if you’ve noticed this,
0:35:44 I have found that Instagram
0:35:46 Reels is increasingly taking
0:35:49 time from TikTok for me.
0:35:52 And I noticed a tangible
0:35:56 difference in the quality of
0:35:57 the algorithm, of TikTok’s
0:35:59 algorithm to serve me content
0:35:59 that was relevant.
0:36:01 And it feels to me like
0:36:03 Instagram Reels has somewhat
0:36:04 closed that gap.
0:36:06 And I think that’s leveraging
0:36:08 AI and all this back and
0:36:10 forth and nonsense between
0:36:12 Trump and China over banning
0:36:13 TikTok, not banning it, and
0:36:14 the fact that Meta has such a
0:36:16 built-in user base already.
0:36:17 I think it’s starting, I
0:36:18 think there’s, quite frankly,
0:36:19 I think they’re actually
0:36:20 starting to pull back or
0:36:22 claw back some of that share
0:36:24 from TikTok.
0:36:27 Let’s move on to Apple and
0:36:27 Amazon.
0:36:30 So Apple, they had better than
0:36:32 expected sales, up 5% overall.
0:36:34 They missed their sales
0:36:35 estimates in China, falling
0:36:36 more than 2%.
0:36:38 They also warned about
0:36:38 tariffs.
0:36:39 They said tariffs will add
0:36:41 $900 million to its costs
0:36:42 this quarter.
0:36:45 Shares fell 4% in after
0:36:45 hours.
0:36:46 And then we also saw
0:36:48 earnings from Amazon, which
0:36:49 was also a beat, same as
0:36:50 Apple.
0:36:52 But they gave guidance that
0:36:53 Wall Street considered
0:36:54 cautious, and they also
0:36:56 missed slightly on their
0:36:57 AWS growth.
0:36:59 And shares in Amazon fell
0:37:00 more than 3%.
0:37:02 So both companies actually,
0:37:04 when you just look at the
0:37:05 earnings compared to
0:37:07 expectations, pretty solid
0:37:09 quarters at face value.
0:37:11 But there were just some
0:37:13 signs of weakness in there
0:37:13 that Wall Street didn’t
0:37:16 like, and both stocks
0:37:16 fell.
0:37:17 Your reaction?
0:37:18 I thought Apple had the
0:37:19 least impressive earnings
0:37:20 of the bunch, although I
0:37:22 was surprised that they, I
0:37:23 think last quarter, their
0:37:25 revenue was basically flat
0:37:26 year-on-year, which is
0:37:28 weird for a company or
0:37:28 unacceptable for a
0:37:29 company trading at a
0:37:31 price-earnings multiple of
0:37:31 34.
0:37:34 And even 5% isn’t sort of
0:37:34 tech.
0:37:35 It’s no longer really
0:37:36 considered a growth
0:37:36 company.
0:37:38 And I think, was it
0:37:40 Catherine Rampell, or I
0:37:43 forget who was on the
0:37:44 pod and summarized it
0:37:45 perfectly, or maybe it was
0:37:46 Kyla Scanlon, who said
0:37:47 that Apple is a mature
0:37:49 company trading as if it’s a
0:37:49 growth company.
0:37:50 I think that was me.
0:37:51 That was you?
0:37:54 What is it about you that
0:37:55 reminds me of thoughtful
0:37:57 women in economics?
0:38:01 Anyways, Edwina.
0:38:06 The services revenue was the
0:38:06 highlight.
0:38:08 It grew 12% to $27 billion,
0:38:10 even though that has slowed
0:38:12 down, or it’s a slow since
0:38:13 2023, it’s still double-digit
0:38:14 growth.
0:38:16 Wearables fell 5%, missing
0:38:18 estimates, so that’s kind of,
0:38:19 that’s not good.
0:38:22 The other thing that kind of
0:38:25 shows an unusual operational
0:38:26 misstep, I was really excited
0:38:27 about Apple Intelligence.
0:38:29 I thought that if anyone could
0:38:31 sort of consumerize other
0:38:32 people’s massive cat-backs
0:38:35 around AI, I thought it was
0:38:36 going to be Apple, that they
0:38:37 would just organize my
0:38:38 photos and come up with sort
0:38:40 of very useful ways to speak
0:38:42 to my AirPods and say, oh,
0:38:44 we’re out, it’s loud, I’m
0:38:44 taking the volume down.
0:38:45 They do that a little bit,
0:38:47 but I would have thought there
0:38:48 would be a bunch of cool
0:38:49 things, little features that
0:38:50 they would be able to
0:38:50 leverage.
0:38:51 Totally drop the poll on
0:38:51 that, yeah.
0:38:53 And they’ve branded it
0:38:53 brilliantly.
0:38:54 They call it Apple
0:38:55 Intelligence, the AI
0:38:57 features, but they’ve been
0:38:58 delayed again.
0:39:00 And it’s kind of, it’s
0:39:00 unusual.
0:39:02 Apple usually kind of under
0:39:03 promises and over delivers.
0:39:06 So that, they don’t appear
0:39:08 to have the same depth of
0:39:10 human capital around AI, some
0:39:11 of the other guys.
0:39:13 I still feel that, I still
0:39:14 own some Apple, I’ve been
0:39:15 selling it down.
0:39:16 I think it’s overvalued at a
0:39:19 PE of, you know, it’s net
0:39:22 income growth in 2024, negative
0:39:24 3% versus Microsoft at up
0:39:28 21, Alphabet up 36, Amazon
0:39:30 up 95, Meta up 65, and
0:39:32 NVIDIA up 145%.
0:39:34 And yet Apple trades at the
0:39:36 same PE multiple as
0:39:40 Microsoft at 33, more than
0:39:41 Amazon, it’s at 31, and
0:39:42 Alphabet’s at 18.
0:39:43 I mean, if you just look at
0:39:44 these things from a pure
0:39:45 valuation bottoms-up
0:39:47 standpoint, it looks like
0:39:48 Alphabet’s the least
0:39:50 expensive, and it looks like
0:39:50 Apple is the most
0:39:51 expensive.
0:39:52 Yeah, absolutely.
0:39:53 And there was just another
0:39:54 red flag in terms of this
0:39:56 idea that Apple is this
0:39:57 mature company that’s
0:39:58 trading as if it were a
0:39:58 growth company.
0:40:00 They announced another
0:40:01 buyback program.
0:40:02 Yeah.
0:40:03 $100 billion in buybacks.
0:40:04 They also boosted the
0:40:06 dividend by 4%.
0:40:08 If you’re trading at 30 to
0:40:11 33 times earnings, you’re
0:40:13 trading as a growth company,
0:40:14 which means that the market
0:40:15 should be expecting that
0:40:16 you’re investing in growth.
0:40:17 you’re investing in new
0:40:19 products, you’re investing in
0:40:19 new services.
0:40:21 Instead, they’re just using
0:40:22 all of this capital and all
0:40:25 this cash to just repurchase
0:40:26 shares.
0:40:28 And as Aswata Motrin says, I
0:40:29 mean, this is sort of the
0:40:30 bread and butter of the
0:40:31 corporate life cycle.
0:40:33 That’s what you do when you’re
0:40:34 in the mature stage.
0:40:35 That’s what you do when you’re
0:40:36 a middle-aged company and
0:40:37 you’re on the way out.
0:40:39 You start buying back shares.
0:40:42 So, I mean, I was a little
0:40:45 surprised by how the stock
0:40:46 pulled back because I thought
0:40:48 overall, the earnings compared
0:40:50 to expectations were pretty
0:40:50 solid.
0:40:52 But I wonder if people are
0:40:54 starting to realize that
0:40:55 actually, the multiple here
0:40:57 doesn’t really make sense.
0:40:59 This is not the growth company
0:41:00 that we thought Apple was,
0:41:02 you know, 10, 15 years ago
0:41:03 when it was on the cutting
0:41:04 edge of technology and
0:41:05 innovation.
0:41:06 Because what we’re seeing here
0:41:08 is that, I mean, every time I
0:41:09 see a buyback, I’m like, oh,
0:41:10 you’re running out of ideas.
0:41:11 Understood.
0:41:13 You’re being sensible about it,
0:41:14 but you are running out of
0:41:14 ideas.
0:41:16 And that’s sort of the vibe I
0:41:17 get from Apple right now.
0:41:20 And I wonder if Wall Street’s
0:41:21 getting the same message.
0:41:23 This is, I think Apple is
0:41:24 ground zero for what I call
0:41:26 the great, you know, reversal
0:41:27 of flows in the rivers.
0:41:28 And that’s what I’m writing
0:41:29 about in today’s No Mercy,
0:41:30 No Malice.
0:41:31 And that is, I think Apple
0:41:33 could increase its earnings
0:41:34 by 20 or 30 percent over the
0:41:35 next five years.
0:41:36 And I think the stock’s still
0:41:37 going to go down because
0:41:39 trading at that multiple,
0:41:41 I just don’t think it can
0:41:41 outrun the multiple
0:41:42 contraction that it’s about
0:41:43 to experience.
0:41:46 I bought Apple in 2000, I
0:41:48 think in 10 or 11, and I
0:41:48 bought it.
0:41:49 It was growing much faster.
0:41:50 I think it was still growing
0:41:51 high single or low double
0:41:51 digits.
0:41:53 And I think I bought it at a
0:41:54 PE of 10.
0:41:56 So the company could continue
0:41:57 to perform.
0:41:58 And I still think the stock is
0:41:59 going to struggle because I
0:42:01 just think that it’s the most,
0:42:02 I think it’s the most widely
0:42:03 held stock in the world.
0:42:06 It kind of identifies or marks
0:42:07 American tech.
0:42:09 And I think as these rivers of
0:42:11 capital begin to reverse flow,
0:42:12 there’s just no way that won’t
0:42:14 come out of what is the most
0:42:16 valuable, iconic company in
0:42:18 America when people look at it
0:42:19 and say, great company, we love
0:42:19 it.
0:42:21 But if it’s really, if it’s
0:42:23 growing low single digits, does
0:42:24 it really connote a growth like
0:42:25 valuation?
0:42:26 Yeah, I agree.
0:42:28 It’s also quite telling that the
0:42:30 day that the company, the day
0:42:31 that a company announced a
0:42:33 $100 billion share buyback
0:42:36 program was the same day that
0:42:38 that same company was ousted as
0:42:39 the most valuable company in the
0:42:39 world.
0:42:41 Like that’s just not a good, you
0:42:43 would not expect those two things
0:42:44 to be true at the same time, but
0:42:45 they were last week.
0:42:47 Let’s just quickly go to Amazon.
0:42:50 They also beat on the top and
0:42:52 bottom lines, pretty strong
0:42:54 quarter actually, the ad business
0:42:56 was a big beat, ad sales grew
0:43:00 19%, but the stock fell almost
0:43:00 4%.
0:43:03 And why did that happen?
0:43:04 As I mentioned earlier, what
0:43:07 Wall Street cares about is AI and
0:43:09 AWS, which we could also just say
0:43:11 is their AI unit, their cloud
0:43:13 unit, their compute unit, that
0:43:15 actually slightly missed on revenue
0:43:15 expectations.
0:43:18 Still, it grew 17%, pretty
0:43:21 good, $29.3 billion.
0:43:23 But Wall Street wanted more.
0:43:25 They wanted 29.4.
0:43:28 And if you’re in the AI business, it’s
0:43:29 the dynamic we’ve discussed.
0:43:32 Beating expectations here means you
0:43:33 need to blow expectations out of
0:43:34 the water.
0:43:37 Even a slight miss on that one
0:43:38 business unit, that’s a big problem
0:43:40 for Wall Street, which is why I think
0:43:42 the stock fell so significantly.
0:43:43 Any thoughts on Amazon, Scott?
0:43:45 Well, Amazon is the most vulnerable
0:43:47 probably the magnificent seven to
0:43:48 tariffs.
0:43:50 One, two-thirds of its businesses in
0:43:52 the US versus most of big techs is
0:43:54 somewhere between half and one-third.
0:43:55 Medica only gets a third of their
0:43:56 business domestically.
0:43:58 And obviously, they import a lot of
0:44:00 products that will have tariffs on
0:44:00 them.
0:44:04 In addition, as goes AWS, goes Amazon.
0:44:05 I mean, Amazon is essentially a cloud
0:44:07 provider now with a retail unit.
0:44:09 And when you don’t beat expectations
0:44:11 on what is considered the white meat
0:44:13 of your business, that your stock’s
0:44:14 going to get hit.
0:44:17 Also, and this is a prediction, and I’m
0:44:19 as everyone who listens to this
0:44:21 podcast know, I am rotating out of US
0:44:23 stocks and my Amazon position into
0:44:25 European and Asian holdings.
0:44:28 And I’m about to sell down some Amazon
0:44:30 and put it in Alibaba because I think
0:44:32 what you’re going to see over the next
0:44:36 year is that Alibaba’s cloud unit will
0:44:40 get an unnatural surge from European
0:44:43 purchasers who are fed up with always
0:44:44 defaulting to American companies for
0:44:46 their cloud and infrastructure needs.
0:44:49 And I think a year ago, if you’d showed
0:44:52 up to the CEO of Mercedes or LVMH as
0:44:56 the CEO, as Joe Tsai would probably, or
0:44:57 the head of the cloud unit for Alibaba
0:44:59 and said, we’d like to handle your data
0:45:00 like China, no fucking way.
0:45:03 Now, I don’t think they’re seen as much
0:45:05 more mendacious as the US.
0:45:08 So I think Alibaba’s cloud unit is going
0:45:09 to get more meetings across Europe and
0:45:12 Latin America than they would have before
0:45:15 this nonsense from the US.
0:45:15 Yeah.
0:45:18 And plus, if you’ve got China investing
0:45:19 heavily in AI, if China’s made it their
0:45:22 mission of AI self-sufficiency, that’s
0:45:26 certainly going to be a win for Alibaba if
0:45:27 they can just start selling more compute to
0:45:28 Chinese companies.
0:45:33 Just one clarification before we finish up
0:45:34 here on this story.
0:45:37 I just want to clarify, like, this quarter,
0:45:39 it was very strong.
0:45:43 And I’ve seen people, probably not very smart
0:45:45 people, but people saying like, oh, things
0:45:46 are going well.
0:45:47 Look, look at the tech earnings.
0:45:50 Like, maybe things aren’t all so bad when
0:45:51 it comes to tariffs.
0:45:54 I just want to clarify, this is the quarter
0:45:56 ending March 31st.
0:45:58 So this doesn’t, none of these earnings
0:46:00 reflect anything about the tariffs.
0:46:02 The only thing that they might reflect,
0:46:04 which is what I was kind of looking for,
0:46:06 and which we sort of covered when we
0:46:09 discussed the GDP report, is it could
0:46:12 reflect this pull-forward dynamic, which
0:46:15 is this effect where, you know, consumers
0:46:17 know that tariffs are coming.
0:46:19 They know that prices are about to go way
0:46:20 up.
0:46:23 And so maybe they’re actually rushing to
0:46:25 buy in big numbers in this quarter, in this
0:46:28 previous quarter that was just reported.
0:46:31 And so I was interested to see, like, you
0:46:33 know, especially with Apple, for example, where
0:46:35 we saw all these headlines of how iPhone
0:46:37 prices are going to go way, way up.
0:46:40 We would have seen that reflected in this
0:46:43 previously reported quarter.
0:46:45 We would have seen, if that was really what
0:46:47 was happening, people are sort of panicked
0:46:49 buying an iPhone, or if you want to upgrade
0:46:52 your iPhone, you do it right before tariffs
0:46:52 happen.
0:46:54 That’s what we would have seen in this quarter.
0:46:57 And actually CNBC asked Tim Cook about this
0:46:58 specifically.
0:47:02 They said, you know, did you, is this pull-forward?
0:47:04 Are you seeing pull-forward in the earnings?
0:47:07 And he said that he saw, quote, no evidence
0:47:08 of pull-forward.
0:47:11 And I just, I don’t know, I wonder about that.
0:47:15 Like, I wonder, one, what would evidence actually
0:47:16 look like?
0:47:20 Like, how would you know that that was what was
0:47:20 happening?
0:47:24 And two, if we’re seeing signs of pull-forward
0:47:27 everywhere else, in the car industry, in the
0:47:30 clothing industry, even in those GDP numbers where
0:47:33 you saw this massive influx of imports, you know,
0:47:35 why wouldn’t we see it with the iPhone?
0:47:37 And why wouldn’t we see it with all the rest of
0:47:37 these tech earnings?
0:47:43 So on that aspect, I’m a little bit hesitant or
0:47:46 just suspicious of how strong these earnings were
0:47:47 across the board.
0:47:50 And I do wonder if the dynamic that we’re seeing is
0:47:54 everyone rushing in to buy right before prices go way
0:47:55 up with the tariffs.
0:47:59 And it’ll be interesting to see in the next quarter, that’s
0:48:00 when we’re going to see the real tariff effect.
0:48:03 It’ll be interesting to see if we see a drop-off in
0:48:03 demand there.
0:48:04 That’s really insightful.
0:48:08 It’s sort of the AR-15 effect that whenever a Democrat
0:48:11 would get elected, people go out and buy more guns
0:48:13 for fear that gun legislation is actually going to get
0:48:13 some traction.
0:48:16 But Apple really doesn’t have anything that interesting
0:48:19 right now or new or fresh, so to speak.
0:48:22 And that’s really, I would have guessed that they would
0:48:22 have been flat.
0:48:25 And I think you’re absolutely right that there was
0:48:27 probably some pull forward.
0:48:30 And also, there is no way that Tim Cook would
0:48:31 acknowledge that.
0:48:33 Because what that’s saying is, oh, it’s not our
0:48:35 products, it’s not our marketing, it’s not the quality
0:48:36 of our offering.
0:48:39 It’s an unnatural sugar high that’s going to suppress
0:48:42 product sales in the following quarters because a lot
0:48:44 of people have pre-purchased things that we’re going to
0:48:46 purchase the next or subsequent quarter.
0:48:48 So I think that’s really interesting.
0:48:49 I hadn’t thought about that, and I think you’re
0:48:49 absolutely right.
0:48:52 We’ll be right back with a look at what’s happening
0:48:53 to student debt.
0:48:56 If you’re enjoying the show so far, hit follow and leave
0:48:58 us a review on the ProfitU Markets feed.
0:49:13 Tell me if this sounds interesting to you.
0:49:18 A pickup truck with no screens, no stereo, no paint,
0:49:22 no automatic windows, basically no features of any kind.
0:49:26 But it costs less than $20,000, and you get to decide
0:49:28 almost everything about it.
0:49:31 That is the story of the Slate truck from a company called
0:49:32 Slate Auto.
0:49:35 And it might be the most interesting car we’ve seen in years.
0:49:38 This week on The Verge Cast, we talk all about the Slate
0:49:42 truck, plus what’s going on in the antitrust trials against
0:49:46 Meta and Google, and why the App Store on your iPhone might
0:49:47 change forever.
0:49:50 All that on The Verge Cast, wherever you get podcasts.
0:49:57 The regular season’s in the rearview, and now it’s time for the
0:49:58 games that matter the most.
0:50:01 This is Kenny Beecham, and playoff basketball is finally here.
0:50:04 On Small Ball, we’re diving deep into every series, every crunch
0:50:08 time finished, every coaching adjustment that can make or break a
0:50:09 championship run.
0:50:11 Who’s building for a 16-win marathon?
0:50:14 Which superstar will submit their legacy?
0:50:17 And which role player is about to become a household name?
0:50:21 With so many fascinating first-round matchups, will the West be the
0:50:22 bloodbath we anticipate?
0:50:24 Will the East be as predictable as we think?
0:50:26 Can the Celtics defend their title?
0:50:30 Can Steph Curry, LeBron James, Kawhi Leonard push the young teams at the
0:50:30 top?
0:50:33 I’ll be bringing the expertise, the passionate, genuine opinion you need
0:50:36 for the most exciting time of the NBA calendar.
0:50:40 Small Ball is your essential companion for the NBA postseason.
0:50:43 Join me, Kenny Beecham, for new episodes of Small Ball throughout the
0:50:44 playoffs.
0:50:47 Don’t miss Small Ball with Kenny Beecham, new episodes dropping through the
0:50:50 playoffs, available on YouTube and wherever you get your podcasts.
0:50:58 Should university presidents take public stances on political issues or
0:50:58 remain neutral?
0:51:03 And I think people like me who have access to platforms like yours should
0:51:05 speak out to stop authoritarianism.
0:51:10 I’m Preet Bharara, and this week, Wesleyan University President Michael
0:51:14 Roth joins me on my podcast, Stay Tuned with Preet, to discuss the role of
0:51:19 college leaders in turbulent times and why he has chosen to speak out as the
0:51:22 Trump administration takes aim at higher education.
0:51:25 The episode is out now.
0:51:29 Search and follow Stay Tuned with Preet wherever you get your podcasts.
0:51:38 We’re back with Prof G Markets.
0:51:42 For the first time in five years, the Department of Education is restarting forced
0:51:46 collections on borrowers who have defaulted on their federal student loans.
0:51:52 The move affects 5.3 million people who were in default before the pandemic and could put
0:51:53 millions more at risk.
0:51:59 Although federal loan payments resumed in October 2023, forced collections had remained
0:51:59 paused.
0:52:04 Until now, borrowers who have fallen behind are already seeing their credit scores drop,
0:52:10 And the White House has warned that it can and will seize wages, tax refunds, and even
0:52:12 pensions to recover unpaid debts.
0:52:20 So, Scott, I just want to clarify what’s really happening here and where things stand.
0:52:24 Just a reminder, Trump paused these student loan payments when COVID hit.
0:52:28 And so if you had student loans at that time, you weren’t getting billed.
0:52:31 Now, that was supposed to expire in Biden’s term.
0:52:34 But then Biden decided to extend this student loan freeze.
0:52:39 He actually tried to go even further, tried to cancel $340 billion worth of student debt,
0:52:42 but it was struck down by the Supreme Court.
0:52:45 So he ended up only partially forgiving these student loans.
0:52:48 And then these payments resumed in 2023.
0:52:54 But what didn’t resume and what will resume today is this forced collection of student loans.
0:52:59 This is where the government comes in and they just start taking the money if you are in default.
0:53:02 And what does being in default actually mean here?
0:53:08 It means that you have missed your payments for 270 days or more.
0:53:12 So for people in that position, if you haven’t made your payment in 270 days,
0:53:18 those are the people from whom the government is now going to start collecting these payments.
0:53:22 So, Scott, your reactions to this news and what it might mean for our economy.
0:53:24 There’s a lot of moral hazard here.
0:53:26 And that is my understanding is most student debt,
0:53:29 most people with student debt haven’t made a payment in five years.
0:53:35 And keep in mind the people who have student debt are the most fortunate third of Americans
0:53:37 who got to go to college.
0:53:43 And also debt is, it sucks to be a grownup, but if you take out debt, you’re supposed to pay it back.
0:53:49 And also there’s a bit of a mythology here or semantics or incorrect nomenclature,
0:53:50 and that is payments have been stalled.
0:53:53 No, payments have been made, but they’re being made by all taxpayers
0:53:57 because someone has owed this money and someone needs to collect interest on it.
0:54:02 And so it’s the U.S. government or U.S. taxpayers, all of us,
0:54:09 who are registering now the financial imposition of these student loans not being paid back.
0:54:11 And I think it sucks to be a grownup.
0:54:13 I think you take out this debt, you got to pay it back.
0:54:17 The same way if you took out an auto loan or a mortgage and you weren’t paying it,
0:54:19 they’d come for you or they’d come for the asset.
0:54:21 And in this case, they can’t repossess your degree.
0:54:25 The real issue is that the cost of higher education is just too high,
0:54:27 and it’s just kind of much faster than inflation.
0:54:28 That’s the culprit.
0:54:30 So then the question is, well, how does it come down?
0:54:33 And one of the reasons it continues to accelerate faster than inflation,
0:54:36 similar to any other bubble, is because of cheap credit.
0:54:41 And that is you go into a university and there’s a nice lady in a pantsuit
0:54:43 with a big college logo over her head saying,
0:54:45 always invest in yourself, you’re going to be fine.
0:54:49 And then you get a degree from a Joey Bag of Donuts University
0:54:53 that is part of the cartel where we all raise our prices exactly the same amount.
0:54:56 And then you get out and find out you can’t get a job and end up as a barista
0:54:58 and you have $150,000 in student debt.
0:55:05 And the issuing university of that debt or the sponsoring university is not on the hook
0:55:05 for any of that debt.
0:55:08 Whereas Toyota does some diligence.
0:55:10 Toyota says, okay, if there’s no way this person can pay back the money,
0:55:12 we’re not going to loan them the money.
0:55:15 Because if we have to repossess the Toyota, it’s going to cost us money.
0:55:17 We’re not going to be able to resell it for as much.
0:55:22 Whereas the incentive for any university with government-backed student loans and accreditation,
0:55:24 and by the way, the people accrediting these universities are the incumbents,
0:55:29 is just to encourage people to take out more and more student loans, regardless of the credit risk.
0:55:35 And until consumers start shopping around or holding their university accountable
0:55:37 and saying, this fucking sucks.
0:55:41 I borrowed a lot of money and I can’t pay it back and it’s your fault.
0:55:49 There’s no pressure on these universities to lower their tuition and they still have access to cheap credit.
0:55:54 The real solution here would probably be to put these universities on the hook for a portion of that bad student debt.
0:56:03 Such that they would say, okay, we have found that 40% of people with philosophy majors have a difficult time paying back their student debt.
0:56:08 So if you are a philosophy major, we’re going to limit the amount of student debt you have to X.
0:56:16 And because they want to have as much cheap free capital, they won’t be able to raise tuition as fast as they have.
0:56:22 So I’m really mixed here because I feel for younger people who I think have gotten a raw deal on so many levels.
0:56:29 I like the idea of programs where some sort of, you know, working in industries where you don’t,
0:56:35 that traditionally aren’t that high paying, whether it’s education or practicing medicine in rural areas or national service,
0:56:40 you should have your student loans, debt repayment, delayed, lower interest, whatever, forgiven.
0:56:46 But the idea of a generation of people just believing that debt doesn’t really count for them,
0:56:49 I don’t think that ends up anywhere good either.
0:56:51 But net-net, we got to go after the problem here.
0:56:55 And the problem is skyrocketing higher education costs.
0:56:56 Yeah.
0:57:03 But I think that highlights a big problem, which is that for all these people going into college and taking on this debt,
0:57:11 the trouble is that a lot of these young people don’t really understand what the debt is because no one’s fully explained it to them.
0:57:18 And just some statistics here, one in five student loan borrowers say they borrowed more than they needed just because it was offered.
0:57:22 One in five also say they don’t even know their current loan balance.
0:57:29 And then you throw into the mix the fact that the president, the previous president, said, don’t worry, it’ll all be forgiven.
0:57:32 And then suddenly we have a turnaround.
0:57:35 It’s not going to be forgiven.
0:57:39 And actually it’s business as usual starting today, starting May 5th.
0:57:48 And I think Trump criticized Biden actually correctly here and said he sort of made you a false promise that he couldn’t make good on.
0:57:49 And that is what happened.
0:57:50 He made a false promise.
0:57:52 The Supreme Court struck it down.
0:58:02 And what I worry about is that there is now a generation, my generation, who believes that maybe it’ll be canceled in the future.
0:58:04 Maybe something will happen.
0:58:06 Maybe this is actually on the table.
0:58:21 And so the consequences of that are going to be really bad because I think there are going to be a lot of people who say, you know what, I’m just not going to pay it because who knows, maybe in a few years Congress will vote on this and I won’t have to pay the debt.
0:58:23 And what is that going to do?
0:58:27 That’s going to absolutely obliterate my generation’s credit scores.
0:58:31 I mean, we can talk about the forced collections and what that’ll do to people.
0:58:35 But to me, the big downside is what it’s going to do to credit ratings.
0:58:37 And Liberty Street did this analysis.
0:58:47 They found that each time you miss a student loan payment, every delinquency on your student loan debt, your credit score drops by around 150 points.
0:58:53 And I think this is the real concern for young people and the part that they don’t take seriously.
0:59:00 And I just want to paint a picture of what a bad credit score can do to you in case people don’t really realize.
0:59:04 I mean, for starters, you pay higher interest rates.
0:59:06 Two, it can affect your employment.
0:59:09 I mean, a lot of employers actually check your credit.
0:59:10 And if you have bad credit.
0:59:11 I was just going to say that.
0:59:12 Yeah, it can cost you a job.
0:59:15 It affects your ability to rent.
0:59:18 I mean, landlords check your credit.
0:59:21 If you have a low score, you pay higher security deposits.
0:59:26 In many cases, you’re flat out rejected from getting that apartment or that home.
0:59:34 And then four, and this is probably like the worst of it, is it just completely hamstrings your ability to access credit.
0:59:37 I mean, you can get rejected for mortgages.
0:59:39 You can get rejected for auto loans.
0:59:42 You can even get rejected to have a basic credit card.
0:59:47 It just completely cripples your financial freedom.
0:59:52 And with long, long-term consequences that aren’t necessarily your fault.
0:59:59 And I just worry that these young people don’t understand that or they don’t take it that seriously.
1:00:06 And they’re going to sort of hedge their bets on this very unlikely scenario where it’s all just forgiven overnight.
1:00:08 I don’t think that’s going to happen.
1:00:11 You need to pay these loans.
1:00:13 You can’t just go into delinquency.
1:00:14 You can’t go into default.
1:00:17 It’s going to completely ruin you for a long time.
1:00:22 I know someone who got a job at a prestigious bulge bracket investment bank and literally showed up the first day.
1:00:24 And they said, we need to speak to him.
1:00:25 So we have to rescind the offer.
1:00:26 We did a credit check and you have terrible credit.
1:00:33 And we can’t have you selling or structuring securities when you have a low credit score.
1:00:42 Also, if you really want evidence that we are fucking your generation, one of the only forms of debt that’s not dischargeable in bankruptcy is student loan debt.
1:00:47 So if I declare bankruptcy, I can get out of almost every piece of debt.
1:00:49 Now, granted, I have to give up all my assets.
1:00:50 Actually, that’s not true.
1:00:55 If I own a home in Florida, I can homestead it and I get to hold on to my home, even if I declare bankruptcy and clear out all my debts.
1:00:57 But except for student debt.
1:01:05 So if you think about the one person who, if they hit hard times, deserves kind of a do-over button, it should be young people in student debt.
1:01:08 It’s a very upsetting situation.
1:01:14 But and also, I think it calls up the need for what I call in high school adulting classes.
1:01:14 Yes.
1:01:17 I think that there should be a class.
1:01:18 It’s just like basics.
1:01:20 Like, what does the interest rate on my credit card mean?
1:01:21 Right?
1:01:22 Yeah.
1:01:23 Basic adulting.
1:01:25 What is required to get an apartment?
1:01:30 When you want to rent an apartment, what do you need to do and possess and have?
1:01:32 And what’s a general ratio for how much you should be spending?
1:01:36 We need to make sure that young people understand the rules.
1:01:42 They need to we need to make sure that young people understand what debt is, what they’re signing up for by taking on debt.
1:01:51 And then the other thing I think that this brings up, which we need to young people to really think about, is like, what is actually the value of a college education?
1:01:54 Like, is it really worth it for you?
1:01:58 And for many people, for different people, there’s going to be a different answer.
1:02:00 I mean, we know it leads to higher earnings.
1:02:04 We’ve seen the data on higher marriage rates, better health outcomes.
1:02:09 You know, so, you know, we we know some of the data.
1:02:14 But I wonder if we need to sort of change the conversation to instead of, is college worth it?
1:02:19 We need to be more specific and say, is college worth it if you’re taking on debt?
1:02:26 If you’re not taking on debt, if your parents are paying for it, it’s an absolute no-brainer because you’re essentially going for free.
1:02:27 Of course, you should go to college.
1:02:33 But if you’re levering up to go, I think that’s a completely different question.
1:02:45 And there’s this one stat that our team found, which I find very illustrative here, which is that for college grads who took on student debt, one third of them say that college is not worth the cost.
1:02:49 For college grads who didn’t, that number is 16%.
1:02:59 So there’s a massive gap in the ROI on college, depending on whether you are taking on debt for it, which of course makes sense.
1:03:02 If you’re getting the product for free, there’s only upside.
1:03:03 It’s great.
1:03:06 But if you’re putting yourself in a hole, it’s a totally different thing.
1:03:11 So I guess, one, we should reframe the question, and two, I will pose it to you.
1:03:16 Is college worth it if you’re going to take on significant student debt?
1:03:18 There’s no yes or no answer there.
1:03:19 It’s a function of nuance.
1:03:20 That is one.
1:03:23 A lot of it comes down to the university you get into.
1:03:32 If you get into MIT and you are cut out and feel like you can get through four years at MIT, I don’t care if you have to borrow a quarter of a million dollars.
1:03:33 It’s worth it.
1:03:35 For the rest of your life, you’re taken seriously.
1:03:38 For the rest of your life, people have an inclination to hire you.
1:03:48 And the scary thing, and the thing that’s good in some ways and bad in others, is your school, Princeton, if you have any economic hardship, they have so much money, they’ll give you financial aid.
1:04:03 So what happens is really good kids, because of this bullshit rejectionist, exclusivity, LVMH strategy that every elite university has adopted such that they can raise tuition faster than inflation, and the faculty and the alumni feel good about this luxury brand they have.
1:04:07 And it makes the value of the degree go up because it’s harder and harder to get them.
1:04:10 We’ve been able to raise tuition faster than inflation.
1:04:11 The alumni love it.
1:04:12 They give us a bunch of money.
1:04:15 And anyone who gets in who needs economic help gets it.
1:04:21 But the problem is a lot of kids don’t get into an elite school, and they get arbed down to a second-tier school.
1:04:26 So my strategy with these kids is always, I need you to get into more than one school.
1:04:37 And once you get into the school, the university, all of a sudden, it goes from they’re a seller to a buyer in the sense that they really want you once you get in, because they have something called yield.
1:04:44 And their ranking is largely determined by a variety of factors, including what percentage of people who are admitted actually end up going.
1:04:51 So ideally, what you want to do is to get admitted to more than one university, and ideally competitive universities.
1:05:03 So, for example, if you get, and I don’t know if that’s the way any longer, but it used to be, if you got admitted to both Duke and UVA, and UVA saw you got into Duke, UVA would give you a full ride if you went to UVA, because they were direct competitors with Duke.
1:05:06 So the key is, you need to be a consumer.
1:05:12 You need to get into more than one university and then start calling them and saying, you know, finances are a struggle for me.
1:05:13 What do you offer in terms of financial aid?
1:05:17 I’m into several universities, including your closest competitor, this university.
1:05:18 What can you offer me?
1:05:20 But students don’t take a consumer.
1:05:26 They’re much more likely to negotiate on a hotel room or shop every store in the world.
1:05:31 But once they get into the university, they kind of sit back and just take their price takers.
1:05:32 They shouldn’t be.
1:05:34 But this is the thing that’s so tough.
1:05:35 It’s their kids.
1:05:50 I mean, you’re describing this and you’re describing the habits of a very sophisticated and experienced negotiator who knows exactly what’s at stake, knows all the dynamics at play, knows exactly what to say and what the leverage is.
1:05:55 Which is actually, I mean, most grown adults don’t understand that.
1:05:56 I barely understand that.
1:05:58 It’s actually a very hard thing to do.
1:06:01 And I think it’s very important what you’re saying.
1:06:05 And I hope there are young people applying to college who could hear this.
1:06:11 But I think what’s so unfair and so upsetting is, like, we’re telling children to do this.
1:06:20 Children who have no experience, who have no understanding of what any of this means, who don’t even really understand what interest rates are or what a loan is.
1:06:22 And that, to me, is what’s so upsetting.
1:06:32 The standards that we are holding them to, to evaluate these actually quite complex and nuanced economic issues, are just unbelievably high.
1:06:37 And we don’t seem to hold regular functioning adults to those same standards.
1:06:39 And to me, it’s just so unfair.
1:06:44 Ed, everything we do in our society is a subtle transfer of wealth and opportunity from the young to the old.
1:06:47 And we used to love young people.
1:06:48 We used to love more than that.
1:06:52 When I was your age, we used to love unremarkable young people, right?
1:06:53 I mean, think about it.
1:06:54 I got Pell Grants.
1:07:00 I had access to a world-class university that had a 74% admissions rate.
1:07:03 And once I got there, my tuition every year was $1,300.
1:07:12 And I could work my ass off over the summer and have part-time jobs and show up the next year, despite the fact I wasn’t getting any financial assistance from my parents.
1:07:28 And that, for me, started an upward spiral of prosperity where I got to engage in the economy, I got to find a mate, I got to have children, I got to build a business, and all of that reverse engineers to America used to love young, unremarkable people.
1:07:29 And now it no longer does.
1:07:38 Now it feels America is about trying to identify the children of rich kids and a freakishly remarkable one-percenters and try and turn them into billionaires.
1:07:42 And higher ed is the tip of that spear in terms of losing the script.
1:07:56 We’ve become hedge funds that offer classes at the elite side, and the mid-tier are basically terrible value for kids that puts a lot of them into debt that they can’t discharge and starts them with this anchor around their neck.
1:07:57 And what a shocker.
1:08:00 We have the most obese, anxious, and depressed generation in history.
1:08:04 So that question around whether college is worth it, it’s a nuanced conversation.
1:08:08 What is an easy question to answer is, are we fucking young people?
1:08:10 That’s an easy one, 100%.
1:08:13 Let’s take a look at the week ahead.
1:08:19 We’ll see earnings from Palantir, AMD, Novo Nordisk, Uber, Disney, and Shopify.
1:08:23 And the Federal Reserve will also meet and announce its next interest rate decision.
1:08:26 Scott, any predictions for us?
1:08:27 Well, I made it.
1:08:43 I think by the end of 27, Kuiper is—it’ll be hard to suss out because it’ll be in a larger Amazon umbrella, but that Kuiper will be worth more than Starlink and will have greater penetration in the United States as it’ll be stitched into the Amazon Prime++ program.
1:08:45 They should change the name first.
1:08:46 Kuiper is not a very good name.
1:08:51 It kind of sounds like the AI villain in a Bond film, Kuiper.
1:08:52 What does Kuiper say?
1:08:56 Yeah, change that, and then I think the prediction comes true.
1:09:01 This episode was produced by Claire Miller and the engineer by Benjamin Spencer.
1:09:03 Our associate producer is Alison Weiss.
1:09:04 Mir Solverio is our research lead.
1:09:06 Isabella Kinsel is our research associate.
1:09:08 Dan Shallon is our intern.
1:09:09 Drew Burrows is our technical director.
1:09:12 And Catherine Dillon is our executive producer.
1:09:15 Thank you for listening to Prof G Markets from the Vox Media Podcast Network.
1:09:21 Join us on Thursday for our conversation with Michael Semblist, only on the Prof G Markets feed.
1:09:53 We’ll see you next time on Thursday for our conversation with Michael Semblist, only on the Prof G Markets.
1:09:58 We’ll see you next time on Thursday for our conversation with Michael Semblist.
1:09:59 We’ll see you next time on Thursday for our conversation with Michael Semblist.