EVERY SPOKEN WORD
50 min read · 10,314 words- 0:00 – 5:26
Intro
- KSKara Swisher
Support for this show comes from Odoo. Running a business takes everything you've got, and a lot of the tools out there that are supposed to make your life easier just aren't great at talking to each other. And that means you end up having to toggle between a dozen different apps and services just to keep the lights on. Enough of that. Now there's Odoo, the all-in-one fully integrated platform that actually might help you get it all done. Thousands of businesses have made the switch, so why not you? Try Odoo for free at odoo.com. That's O-D-O-O.com. Why not just remove the broadcast networks from those rules? Why are they... I, I'm some, like-
- SGScott Galloway
They shouldn't be.
- KSKara Swisher
They shouldn't be bound by that moron Brandon Carr, who's clearly looking for his next job-
- SGScott Galloway
Exactly
- KSKara Swisher
... which will be dancing with the Nazis. [upbeat music] Hi, everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
- SGScott Galloway
And I'm Scott Galloway.
- KSKara Swisher
And we are live from South by Southwest in Texas. [cheering] So before we, before we get to it, um, again, we're psyched to be here, uh, this live episode. We wanna thank our presenting sponsor, Odoo. They've supported, uh, they sponsored our Pivot tour last year, so they're really into us. Um, we will get to everything else, but Scott, I have a surprise for you. I don't know if you know this, but I have a television [laughs] show coming up on CNN.
- SGScott Galloway
Really?
- KSKara Swisher
Yes. [laughs]
- SGScott Galloway
I heard it's a horror film called Kara's Gonna Live Forever.
- KSKara Swisher
Yes. [laughs]
- SPSpeaker
[laughs]
- KSKara Swisher
So I'm gonna play-
- SGScott Galloway
Sounds good
- KSKara Swisher
... a little clip for it 'cause someone that I work with is in the show itself. 'Cause largely I felt sorry 'cause he's had so many disasters in television.
- SPSpeaker
[laughs]
- KSKara Swisher
I thought he should be part of a hit series.
- SGScott Galloway
Zero for five.
- KSKara Swisher
Zero-
- SGScott Galloway
Five TV series. Haven't seen any of them, have you?
- KSKara Swisher
Yeah. All right, let's go. This is gonna be a huge hit, and it's gonna really chap his ass, so go ahead.
- SGScott Galloway
Wow.
- KSKara Swisher
Wow. [upbeat music]
- SGScott Galloway
Doesn't this land in the backyard of a Colorado household owned by a woman named Mindy?
- KSKara Swisher
[laughs] Mork. Mork and Mindy.
- SPSpeaker
It's a state-of-the-art sound therapy pod that is using sound playing in your body, so there's a lot of science-based frequencies designed to calm your nervous system at a cellular level. We typically call it an inner and outer body experience.
- KSKara Swisher
You know those moments where you suddenly have to ask yourself, "How did I end up here?"
- SGScott Galloway
This feels like the lamest crypt in the world, and I'm stuck with Kara.
- KSKara Swisher
[laughs] Well, Emily Ratajkowski was busy. This was one of those. I was deep inside a concrete basement in New York City, about to embark on an auditory journey that is designed to help my body repair, restore, and transform itself.
- SPSpeaker
We're going to take you on a beautiful sound journey.
- 5:26 – 18:29
Billionaires and Taxes
- KSKara Swisher
uh, s- first thing, surprise, surprise, wealthy people are swaying elections with their money. Billionaires made up about 19% of all reported campaign donations of 2024 federal elections. This is a, a, well, it's a quantum leap in numbers. Within the 19%, for every dollar that went to Democrats, $5 went to Republicans. The billionaire families gave an average total of, uh, $10 million each, roughly equal to the amount 100,000 typical donors give combined. Um, Scott, before Citizens United, the share of billionaire spending was under 1%. This is 19%. That's an enormous amount of people, uh, an enormous number for-A small amount of people. Let's talk a little bit about that, because obviously billionaires taxes are being discussed, um, there's all, there's all manner of things happening here, but their influence is absolutely clear.
- SGScott Galloway
Yeah. I've-- I mean, if you think about nineteen percent from nine hundred people, and it's, um, look, it's the boring stuff that kinda moves the needle that, that's not that interesting to talk about. But we're gonna wash, rinse, and repeat a cycle of autocrats. Uh, I actually believe there's, uh, if you look at history, there's as much danger of an autocrat coming from the far left as from the far right. I believe the far left is as dangerous as the far right. It's the extremes that present a threat to society. And the two things that are probably most important to avoiding a strong man or a strong woman, uh, from either side of the party are very boring things, but until we have them, we're gonna have the weaponization of a decline in the structural and economic standing, in my opinion, of the, the middle class, especially middle class males, who tend to be unfortunately more violent and upset when they don't have economic or romantic prospects. But the two major reforms that need to happen or we're gonna have a cycle of strong men and strong women f-for the next fifty years is, one, we need to dege- gerrymander the US, because the, the general election no longer matters. It's the primary. And who turns out in the primary? The crazies. So every district now is hard blue or hard left, and we keep sending, um, five hundred and thirty-five very far left or very far right people who share no comity, no, no collective values, don't wanna work together, and nothing happens, and they genuinely don't like each other. And the, th-the narrative from our leadership is not how do we work together and get something done, it's that the other guys are wrong. And so it creates a level of division and stasis that's really unproductive. And then the other thing is Citizens United. We can't have a small group of people who aren't evil, but incrementally will say, "Hey, Charles Schumer," and I'll use a Democrat as an example because we always talk about Republicans. Democrats take a lot of money, too. It's Republican, it's, it's Republican donors typically, but also Democrats do, do bask in a lot of the PAC money. And what happens is Republicans are much more overt about trying to get tax cuts for who they think are the most productive people and corporations in the world. What Democrats do is just wring their hands and kill stuff in committee and say they have concerns about things. But if you have-- u-until we have Citizens United overturned and de-gerrymander, we're just gonna ping from the far left to the far right for the foreseeable future.
- KSKara Swisher
So, you know, it, it-- I, I do think the Republicans are sort of doing things in plain sight i-in a, in an effective way by channeling all this money, right? And-- But the number from going from one percent to nineteen percent-
- SGScott Galloway
Incredible
- KSKara Swisher
... it's a very-- And you're right, it's a very small amount of people, and it actually, it's a small amount of people from Silicon Valley. So it's a very particular... I mean, there's, there's the Y-Yu Lanes, the Box people, there's a bunch of other rich people you don't know as well, and by the way, look on your bottom of your boxes, that's what you're getting from Amazon is from this very far-right family. Um, but one of the things that's the problem here is that, that th-this stuff is done in plain sight, and what's-- Uh, they're not gonna under- overturn Citizens United from what I understand. D-- I interviewed Larry Lessig recently, who has another case that could hollow out Citizens United in terms of super-
- SGScott Galloway
Right
- KSKara Swisher
... PACs and dark money. Um, but what is the solution until then? Because I don't think they're letting up. I don't-- I think they won't let up in this presidential election. It doesn't seem like all of a sudden Elon Musk is gonna call, start calling himself they, them. It's not happening for us. So what, what could be done in the interim? Because he will continue to spend. He's sort of the, the poster child for this. But then you quietly have a whole bunch of them doing the same thing.
- SGScott Galloway
The honest answer is I don't know. I don't know if there's a way to prohibit certain political spending across certain more targeted media.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Um, so I have a movement called Resist and Unsubscribe, and neither Alphabet nor Meta would take my dollars to drive traffic. But if you want to, you know, promote coal and get in the way of the earned child tax credit, spend away. So I, also, I think there might be some workarounds that people have talked about by going state by state.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
But until I, it-- I, I think until un- unless it's overturned, which I, I agree with you, it doesn't look... This is all a word salad of saying I don't know.
- KSKara Swisher
Yeah. So when you think about, we've talked a lot about the billionaire tax, um, you have proposed other things like an AMT tax, and there's some things in committee right now, speaking of Democrats, which seem much more effective, which is giving tax relief to people under a certain number, um, and then at the same time making the group of people taxed larger.
- SGScott Galloway
Well, there's three different tax proposals. So the Democrats, to our credit, have finally wised up and realized that they need to move from their objective of redistributing virtue, telling other people they're not as worthy, constantly talking through identity politics about what's right and what's wrong with the world, and if you tell billionaires they're evil, and white people they're racist, and young men that they're predators, they'll leave the party and like, "Okay, this party's not for me." And if you look at those three groups, they have largely abandoned the Democratic Party. So what they realized is that the key to twenty-six and twenty-eight is to talk less about redistributing virtue and redistributing income. And also that the best narrative for redistributing income is tax cuts, not, not handouts. Now, the three, there's the Conner proposal, there's the Booker proposal, and then there's the Warren, um, proposal. Warren is basically class warfare. It's a five percent tax, wealth tax every year. That may not sound like a lot, but the majority of people don't have five percent liquid taxes sitting around. I can't imagine the hundreds of thousands of people who would be hired to try and diminish or decrease or lower the value, assessed value of billionaires' wealth.It goes after basically nine hundred people. Actually, that's not true. People over a billion, it's five percent. But to tell billionaires they have to come up with five percent of their wealth every year, I do think that that's the tipping point where you would lose somewhere between a quarter, at least from a residency standpoint, to a third of billionaires in the US. The example is the non-dom tax in the United-- uh, in the United Kingdom. It was theoretically it made all the sense in the world. It's like you've been here for a while, you should pay UK taxes. The tax receipts this year are gonna be lower because ten thousand millionaires have moved away in the last year, and people have this populist bullshit of, "Let them go." Well, okay, who's gonna pay for the NHS? So the wealth tax doesn't work. The wealthy are the most mobile people in the world, they have homes all over the world. They can have really nice lives in Milan or in London. So if you're looking to actually be effective, not, you know, not just right, the wealth tax doesn't work. Rose is more about social services and, and corpo-corporate taxes, expanded child tax cre- tax credit. The one I like the most is Booker's. His, uh, he's saying, okay, it's the first seventy-five thousand that's tax-free. Right now, what people don't realize is that, first off, the myth of wealthy don't pay their taxes. The top one percent paid nineteen percent in nineteen eighty, now they pay forty-two percent. It's the point one percent that are getting away quite frankly with murder, that can use all sorts of tricks to lower their tax rate into the high teens. But the one percent, the workhorses, mom's a baller at a law firm, she's a partner making a million and a half, two million bucks. Dad owns three chiropractic clinics, he's making eight hundred grand. They make two point three, two point eight million. They probably live in a blue state, in a blue city. They're paying forty-eight or fifty-two percent, uh, marginal tax rates. So the whole notion of tax the rich doesn't go very far. What I think what Booker's saying is essentially if you go the first seventy-- the first twenty-nine thousand pay almost no-- pay no federal taxes right now. He's saying be it the first seventy-five thousand. Now, the devil in the details is that even though it sounds like, oh, that benefits people who make up to seventy-five thousand the most, it actually benefits people who make a hundred and fifty thousand the most because they get to apply that free seventy-nine in the lower tax rate on a larger base. It's a good idea. It's time that we level up the middle class, so I like that, and it's, it's a little bit more elegant. Whenever you send money to Washington as opposed to lowering taxes, there's some inefficiency and friction in Washington. So I think it's a good idea, but I think there are more elegant ways to raise tax revenue. Um, lower-- basically do away with or lower the estate tax, the, uh, the exemption on money that's inherited from thirty million to one million. We're creating dynastic wealth, and the key is to have taxes that are least taxing. If your kids inherit eleven million instead of fourteen million, you're obviously no less happier 'cause you're not around to see it, and the kid isn't any, any less happier if he gets eleven million or she gets eleven million versus fourteen million. The other thing we need is, uh, AMT, and that is if you make over, say, a million bucks or you're a corporation that makes over ten million bucks, use the four thousand pages of loopholes to skirt it down, skirt it down, twelve oh two depreciation, but if you're not paying at least forty percent, there's an AMT. So an alternative minimum tax, and then, um, triple the budget of the IRS 'cause the biggest tax cut in history that we don't talk about is that the Trump Administration has essentially neutered, uh, the IRS.
- KSKara Swisher
Correct.
- SGScott Galloway
So crime's gonna go up when there's no cops on the beat. Supposedly seven hundred and fifty billion dollars a year is called the tax gap, which is uncollected taxes that are owed. So get rid of the estate tax exemption, alternative minimum tax of forty percent.
- KSKara Swisher
Support the IRS. Right.
- SGScott Galloway
And support the IRS.
- KSKara Swisher
Yeah.
- SGScott Galloway
As opposed to what feels a little bit like class warfare 'cause right now-
- KSKara Swisher
Yeah, it's an interesting thing. I don't think it works very well 'cause people are aspirational. That said, the, the tech people, especially who, who are the wealthiest, um, have not really slathered themselves in glory in terms of-
- SGScott Galloway
Oh, terrible
- KSKara Swisher
...people we-- I mean, they-
- SGScott Galloway
Yeah
- KSKara Swisher
...the, the, the brand has gone down and so I think people don't... When, when Jeff Bezos rents Venice or, uh, you know, or, or Alex Karp talks about disenfranchising white Democratic women, I think that's what he was sort of saying in his statements the other day, um, it, it feels like let's get them. Like they're, they're sort of-- They're, they're creating an anger toward them that, uh, that I think is unnecessary and unproductive, and at the same time, you sort of wanna take all their, you know, leave them naked without clothes. Um, not-- Well, I don't wanna see them naked, that's not true. Um, but, uh, it's a real, it's a real conundrum, and I do think one of the things that has to happen is there's gotta be some neutering of Citizens United in that regard-
- SGScott Galloway
Yeah
- KSKara Swisher
...because I think it's very clear what the trends have been.
- SGScott Galloway
On a middle meta level, the biggest tax cut would be having the stones to go after entitlements because we spend seven trillion dollars on five trillion dollars in receipts, and every time we do that, in order to keep the government pumped up and going and the asset prices, the assets which you and I own, keep them elevated, we issue more debt. So the biggest tax cut in history would be fiscal responsibility, and it's a tax cut on your kids in the future who are gonna have absolutely no money in the government to invest in education or technology. And if you really wanna get serious aboutQuote unquote, taxing future generations. Some Democrat is going to have to be the adult in the room and say that if you make over a million dollars a year as a senior citizen, you're not getting Social Security. And we need to move back the age, and we need to means test it, and we need to distribute GLP-1 and bring down healthcare costs. But if we're serious about lowering taxes on future generations, we can have populist ideas, but what we need to do, quite frankly, is just have more of a fiscal responsibility because the deficit every day is a two trillion dollar tax on future generations because someone's going to have to pay this shit back.
- KSKara Swisher
Well, that may be true, but the, it's the Trump Administration who's brought up the deficit more than any other, of any of the, of any of them.
- SGScott Galloway
We've-- That's been a bipartisan thing.
- 18:29 – 25:07
March Madness and Betting Markets
- KSKara Swisher
um, we're gonna move on to March Madness kicks off this week. The f- the-- and sports books are expecting to take in four point five billion dollars in bets on the NCAA college basketball tournaments. Now, only eleven percent of that will come from the prediction markets this year, which is a large amount, but that's a perfect time for Polymarket to announce that it's bringing in Palantir and, uh, TWGAI to monitor sports contracts and flag anything suspicious. Reminder, Polymarket is backed by Peter Thiel and, uh, Seventeen Eighty Nine Capital, which is T- uh, Donald Trump Jr.'s fund. An AI system monitoring predictions markets seems like that's the fox guarding the henhouse.
- SGScott Galloway
But is it meant to, is it meant to... So s- In the Mamdani race, what was strange, when you see billboards everywhere saying that Mamdani chance of winning ninety-one percent, if you're voting for Cuomo or some other candidate, I, I supported a guy named, well, you know, Whitney Tilson. I'm not a New York resident, but my friend Whitney ran. Anyways, you don't show up or you think, "Oh, great." You get excited. So these prediction markets, actually, the polls have, the polls have an influence on the actual voting. I think AI in terms of monitoring, I like the idea. I, I've always felt that AI could be used for defensive measures as much as offensive measures.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Whether or not Peter Thiel has other objectives, that's a little bit scarier.
- KSKara Swisher
I-- You think maybe he does?
- SGScott Galloway
So that-- You're right. It's not AI y- as a defense mechanism or for compliance. It's the fact that Peter Thiel, who believes in an, in an-
- KSKara Swisher
No democracy, I believe is his thing.
- SGScott Galloway
Yeah. Feels like democracy is an outdated mode. So-
- KSKara Swisher
Right.
- SGScott Galloway
But just in terms of gambling, huge threat to young men. And what people don't know about gambling as an addiction is that it's got the highest suicide rate of any addiction. Because if you have a meth addiction, people, people notice it and they weigh in. You can spend your kid's college fund, mortgage your house, spend everything, and people have no idea. And oftentimes people feel like it's, it's, it's just too late. And when-- And in states where they legalize gambling, bankruptcies skyrocket thirty-five percent in that same year. I was just in Vegas. Vegas is dying because why be in Vegas when Vegas is in your pocket? And I, uh, uh, I'm curious what you think because you have sons.
- KSKara Swisher
Yeah.
- SGScott Galloway
I have sons.
- KSKara Swisher
They don't gamble.
- SGScott Galloway
Yeah, but you're a better parent than me. So-
- KSKara Swisher
Yes. [audience laughing] Yeah.
- SGScott Galloway
The-- But the question is, speaking theoretically as a parent-
- KSKara Swisher
I don't think they gamble
- SGScott Galloway
...if we're young men, do we infantilize them? Do we have more regulation? Uh, is it a life lesson?
- KSKara Swisher
No, I, you know, I think young men do have a, a higher risk profile. I mean-
- SGScott Galloway
Mm.
- KSKara Swisher
...just between my, my daughter, it's, is more comparable, uh, my daughter who's six and my son who's four, he's so risk t-- I mean, penis out every moment of the day. Like, and it's, you're always like, "Wow, those, that's gonna hurt when you get to the bottom of those stairs on your head." [audience laughing] Like, and my daughter is very careful. So it's a really... It-- I hate to say that because I don't like to play into gender tropes, but it's true. It just is. Um, but, but when-
- SGScott Galloway
Trope away. We're different, and that's okay.
- KSKara Swisher
Ri-- She happens to be. I was very risk-taking, uh, when I was a kid. Um, I, I, I'm, I'm with you, aren't I? Hello. [audience laughing] Um, and if someone's like, "What's your biggest risk?" I go, "That any moment it will be over with Scott." [audience laughing] Like, which, which it never happens. It's like a really exciting series that ends on a cliffhanger every, every episode. Um, but one of the things that I think about with gambling is I, I... My sons don't gamble, which is interesting, and I kinda like gambling better than they do, which is interesting.
- SGScott Galloway
Yeah.
- KSKara Swisher
But, um, y- y- y- I think the fact that it's f-- You're right. AI should be used in positive ways, and we should mitigate the negative ways. But again, a lot of this is controlled by people with self-interest that you never understand. And so what are they, um... And earlier today, I did, uh, a, an interview with the cast of The Audacity, which talks about these issues. It's a new Silicon Valley show.
- SGScott Galloway
Yeah.
- KSKara Swisher
And the idea of the manipulation of our information for, in all manner of way, I think we do not understand where it's about to go. Uh, and so who owns it and who's running it, same thing with media, where are the interests is gonna be a huge problem going forward.
- SGScott Galloway
But your point is the, y- y- your point is the right one in what you just said, and that is AI should be applied to monitoring and compliance. It should just be an AI that reports to a federal agency that's trying to prevent a tragedy like Commons-
- KSKara Swisher
Right
- SGScott Galloway
...not to Peter Thiel. But keep in... I mean, it's, this is a difficult one because I think a lot about young men, and between, uh, twenty-four by seven porn and gambling and an economy that's basically linked to dopa hits that's trying to evolve a new species of asocial, asexual males, I believe that our economy now is essentially tied to evolving this new species of male that is basically a shitty citizen who starts blaming immigrants, prone to conspiracy theory, prone to misogyny, prone to obesity, depression, anxiety, never develops the skills outside of their house. Males aged twenty to thirty are now spending less time outdoors than prison inmates. And unfortunately, they're up against this indomitable foe of an AI-driven platforms that at the exact right moment will convince you, "Hey, don't go to class. Bet on the Jets game," or, "Hey, you know you can get rich," and screenshots of people trading crypto. And why go through the effort-Perseverance, cost, showering, resilience, developing a rap. You know what movement... I'm gonna go off ter-script here.
- 25:07 – 34:56
Trump Administration’s “Fake News” Complaints
- KSKara Swisher
speaking of someone I wish was incelibate, um, in case anyone was wondering where the Defense Secretary Pete Hegseth- [audience laughter] [laughs] stood... [laughs] Oh, my God, stood on the Paramount, uh, Warner deal, uh, we know now. Uh, at a briefing on Friday, Hegseth, who's a moron, called a-
- SGScott Galloway
[laughs]
- KSKara Swisher
That's just... I mean, it's factual.
- SGScott Galloway
Yeah.
- KSKara Swisher
Um, called a CNN report on the war in Iran fake news and said, "The sooner David Ellison takes over the network, the better." Um, uh, also, Brandon Carr, moron number two, oddly enough, not even as smart as Pete Hegseth, which is an awfully low bar, is threatening networks because he doesn't like their coverage of the war and is calling it fake news. It's astonishing that the head of the FCC says these things. It's actually illegal, what he's saying, um, and he's threatening the broadcast licenses of networks who do not comply with the correct news. Um, Teamsters are also, by the way, urging the DOJ to block the deal unless Paramount agrees to protect jobs and increase US production. Talk ab- talk about this, 'cause they, like you'd think they'd be on their back foot at this point, but they're doubling down on w- lack of cons... Well, just everything terrible. But this was sort of astonishing to hear from him and then followed by the FCC chairman around a deal where obviously the, the Ellisons licked Trump up and down. Like, it wasn't even... I mean, they did.
- SGScott Galloway
Mm-hmm.
- KSKara Swisher
Um, they didn't even pretend this is not what they were doing. They made promise, they're making, they apparently made promises, well reported, about CNN, uh, and, and what they're gonna do there. What... Talk a little bit about this and where you, him saying the, the loud part out loud, I guess.
- SGScott Galloway
Well, uh, uh, three, it's not only wrong, but it's stupid-
- KSKara Swisher
Yeah. Well-
- SGScott Galloway
... because it creates, but it creates legal... It's exhibit A in a, a case trying to block this to say it's an unfair merger and that-
- KSKara Swisher
Mm-hmm
- SGScott Galloway
... it's not based on market dynamics, it's based on government interference, which it's not supposed to. I'm not as worried, and I mean, you're the journalist here, but-
- KSKara Swisher
I am worried
- SGScott Galloway
... I am not as worried about suppression of speech, 'cause what I see is alternative media, niche media thriving-
- KSKara Swisher
Mm-hmm
- SGScott Galloway
... despite these threats, and it only brings oxygen. You know, Bulwark and, uh, y- you know, uh, Puck, they'll have their biggest days today being outraged about this on YouTube.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
So I don't think, I, I don't think that as much as these folks would like, I still think the courts will hold around First Amendment. But what it indicates, in my opinion, is something more dangerous, and that is we generally decide we have regulated competition, and if we have regulation, it applies to everybody, and that everybody gets to play by the same rules. And when the president starts deciding, "I know how to run a steel company," which microchip companies we should invest in, and who's saying the right speech and who d- isn't, it reflects, I just think... I think we're just gonna get, and I've said this before, we're gonna get poorer. Our earnings trade at the highest price earning multiple because of systemic laws where you don't get on the wrong list and get the wrong call. I'm not as worried about... I mean, it's just so nakedly anti-First Amendment, but I think it'll be slapped down in court.
- KSKara Swisher
Yeah, but the, the, the tactics they use is they create a problem and they get slapped down in court, like they just did with Jerome Powell, with Boxo, uh, you know, Prosecutor Boxwine, uh, Jeanine, uh, Pir- J- whatever, Boxwine lady.
- SGScott Galloway
[laughs]
- KSKara Swisher
Watch Ce- Ces- Cecily Strong on her. Perfect.
- SGScott Galloway
[laughs]
- KSKara Swisher
Um, y- you know, they do the thing, create the damage, cause a chilling effect, and then move on when they lose in court, right? Or they get pushed back, and then they're outraged about losing in court, and then attack the courts. I mean, it just goes, it, it does cause actual damage to people. And not just outrage. It's not just, "I can't believe they said that." I totally believe they said it. I, I, I don't f- I don't find it outrageous. I just find it astonishing that they, they do it in order to create the kind of crisis that will occupy people until they're slapped back, and by the time they're slapped back, it's too late.
- SGScott Galloway
The, the, uh, the tension, the fear is that it creates a chill, and people think twice before writing an article about-
- KSKara Swisher
Right
- SGScott Galloway
... the Trump Administration and are more promiscuous writing articles truth-telling about Democrats, and Republicans-
- KSKara Swisher
Mm
- SGScott Galloway
... we start having a chill around speaking openly-
- KSKara Swisher
Right
- SGScott Galloway
... around Republicans. My sense is that if you look at Kimmel, Colbert, is that quite frankly, it's only emboldened, um, uh, journalists and institutions, uh, to write. And also, I don't know if the chill is working, and I think it's giving rise to a new set of media players who can honestly say, "We're about truth to power, and we're unafraid," and that there's a market for it.
- 34:56 – 42:55
Apple’s Affordable Era
- KSKara Swisher
So Apple is entering its affordable era. Affordability counts. The company just introduced the MacBook Neo, a laptop priced at five hundred and ninety-nine dollars, roughly half the price of a MacBook Air and powered by an iPhone chip. While some analysts are saying this is a smart way of getting new market share, others online are wondering if the budget Apple laptop is a, quote, "recession indicator." Talk about this, about Apple, what's happening, uh, over there, and where it goes as they start to figure out, uh, their next leadership group, which has been in there since be- a long, forever, actually, since i-its revival back twenty-five, thirty years ago. It's the same executives.
- SGScott Galloway
So I think the strongest luxury brand in the world is not Chanel or Vuitton. I think it's Apple. And essentially, Apple says, Apple is the most... The perfect luxury brand is one that says you're wealthy, you're part of the creative class, but you're not trying to exhibit your wealth. When you roll around with a Birkin bag, you're saying, "I'm rich, and I want you to know it," and I, or, "I have such an incredible sense and passion for this type of design, I'm willing to sacrifice a great deal of resources for it." The iPhone, basically, the, the iPhone isBecome so dominant in identifying the billion wealthiest people in the world. There are a billion iPhone iOS contracts, and the other six billion, when you pull out an Android it's like sending a date a request through Venmo. You're not getting laid.
- KSKara Swisher
[laughing]
- SGScott Galloway
It's, it's sort of... It, it, it... When, when you, when you have an Android, you're essentially saying to the world, "Life hasn't really panned out the way that I'd hoped"
- KSKara Swisher
[laughing]
- SGScott Galloway
"And I should be starched from the gene pool."
- KSKara Swisher
[laughing]
- SGScott Galloway
Um, and the pricing, people don't recognize... I'll go back to my Substack.
- KSKara Swisher
I'm waiting [laughs] .
- SGScott Galloway
Most Substacks are eight bucks a month or, you know, 12 bucks a month, 100 bucks a year. We purposely did 20 bucks a month and 200 bucks a year 'cause pricing is a signal, and one of the case studies I love that we talk about in my brand strategy course, the most successful or fastest zero to billion alcohol brand in history was Grey Goose. Uh, and I do a taste test in class, and everyone thinks, "Oh, yeah," you know, all these young douchebags, "I can tell the difference." And none of them can tell the difference between Smirnoff, Skyy, Absolute, and Grey Goose. None of them. Like, nine out of 10, not even that, can tell the difference. But the owners of Grey Goose said, "All right. The fifth of vodka," or whatever, "costs about 35 bucks. Charge 55." Because think about it, when you walk into a store and you're looking at anything, you immediately sort of wanna check out the most expensive thing. Pricing is a really strong signal, and I think that Apple's genius is its self-expressive benefit. The strongest self-expressive benefits in the world are the co- are the country you come from. I'm proud to say I'm from the US, as much as, as head up our ass as we are right now, I still like telling people when I'm overseas that I'm American. It makes me feel good. The second strongest self-expressive benefit is where you went to college. If you have two people in a mating environment, and the dude went to a good school and doesn't have much else going on, he's like, "Well, at Cornell."
- KSKara Swisher
[laughs]
- SGScott Galloway
Um, that's the second strongest self-expressive benefit. The third strongest self-expressive benefit is your phone 'cause it's immediately apparent, and the Apple has really become-
- KSKara Swisher
So you think this Neo is a mistake?
- SGScott Galloway
I would always be premium price if I were Apple. I'd always be unattainable for 78, 85% of the world's population.
- KSKara Swisher
Really? What do you think is an indicator of that?
- SGScott Galloway
I don't know. They... You know, but more market share. They see a market for the near, near luxury or y- they wanna expand their market. And by the way, these are some of the smartest marketers in the world, second most valuable company in the world, so if it's, like, the strategy team at Apple or Scott Galloway, you go with the strategy team at Apple. But I, I think this is, this is a luxury brand. I mean, keep in mind what Apple's been able to pull off. Margin is, is Latin for irrational. When you pay a lot of margin for something, it's either because you think it'll make you feel closer to God, it's a monopoly, or it thinks you make, makes you s- um, more attractive to potential mates. Margin means irrational, and the irrational margins that Apple has been able to garner... I was on the board of Gateway Computer, remember them? Which I realize is the weakest flex in the world.
- KSKara Swisher
[laughs]
- SGScott Galloway
But our margins were 8%. If we sold a computer for 1,000 bucks, it cost us $920 to assemble the thing. Meanwhile, Apple was getting 30 and 40 points of margin because people wanted to... I was... I remember when the, the seatbelt light goes off. Do you grab a Dell computer that says you work for a corporation? Do you, you know, grab an Asus, which means you work for a bad corporation?
- KSKara Swisher
[laughs]
- SGScott Galloway
Or do you pull out your Apple and say, "Oh, I'm in the creative community. I'm interesting. I think different," right?
- KSKara Swisher
Right.
- SGScott Galloway
And so what you have with Apple, they have pulled off the impossible. The impossible, and that is they have-
- KSKara Swisher
I, I want you to q- say why they're doing it then.
- SGScott Galloway
Okay.
- KSKara Swisher
You're in that meeting. We're gonna sell a $575, $95 computer.
- SGScott Galloway
Just let me finish my last sentence here.
- KSKara Swisher
All right.
- SGScott Galloway
Apple has the margins of Ferrari with the production volumes of Toyota. No company has ever pulled that off before. They think they're gonna expand share and, and clear out a bunch of their competition is why they're doing this.
- KSKara Swisher
And, and it... Good, bad, you think it's a brand tarnish?
- SGScott Galloway
I think it works in the short run. I think in the ba- in the long run, if Chanel came out with a $400 bag, they would sell a shit ton of them.
- 42:55 – 50:04
Wins and Fails
- KSKara Swisher
live from South by Southwest. All right, we're gonna do one win and one fail each. Um, I think I am going to start. Um, I think, um, the win this week, uh, for me was, um, the impression, I don't know the guy's name, of Tucker Carlson on SNL last night, if you watched it. It was fucking superb. And oddly enough, in some cases, um, in some of the things he s- Tucker Carlson's a terrible person. Let's, I'm not gonna agree with him. But I thought it was a beautiful rendition of a lot of these sort of noisy i- right-wing people who are parodies of themselves, and I thought it was, it just got to the heart of the problem with him, um, that I thought was just beautiful. And it was highly entertaining. It made me laugh. And by the way, Harry Styles was terrific, and I love Harry Styles so much. I don't know why, but I do. I find him incredibly appealing. Um, the negative this week was, uh, Elon Musk saying Grok didn't quite work as planned at, a- at the same time, and they're, and everybody leaving Grok, even though it has these incredible valuations. Nine of the eleven original founders have left. Um, obviously, you have Mecha Hitler, you have all manner of things that it's doing. You have, uh, consensu- uh, non-consensual sexual images, child pornography. It's not doing great as an AI product, and again, a low bar. Um, but I thought it was interesting, uh, um, that he admitted what a mess it was. Um, it still will not have any effect on the valuation, 'cause any- anything Elon does, they will invest in no matter what. But I thought it was r- a moment where he sort of admitted what a disaster Grok is, and I think you're gonna see more of that going forward. And at the same time, uh, i- in continuing disasters wrought by Elon Musk, the two... I- do yourself a favor and watch the, the testimonies, the, the, the interviews on video of two of the DOGE br- bros. It, they're worse than you thought. Like, it's-- I couldn't believe they were worse than you thought. But these were, speaking of incels, like an incel mode. I don't know if they're incels or not, but they should be. Uh, wom- any women thinking of dating them should watch these. Um, I thought they were just sort of this banality of evil kind of thing, where you just watch these ignorant, stupid young men telling you why they were cutting and essentially, in many cases, murdering people across the globe by do, using ChatGPT and Search to decide and make decisions. And someone, I couldn't believe this kid asked, I mean, maybe I could. I don't, I kept thinking, who raised, I wanna find this parent and go have a discussion with them. But one of the things they said is, "Why did you cut it?" And he's like, "Do you think you're qualified to make the decision on something that was very complex around expertise and everything else?" And he said, "Yeah, I'm qualified." And he goes, "Why?" And he goes, "Well, you don't have to read all the books to know things." [chuckles] I was like, "Actually, you need to read all the books to know things." [audience laughing] And, uh, if you do, if you do yourself any favor, it was such a failure of these obviously probably very good coders in technology and, uh, uh, that, that had talents in a certain area being, being unleashed upon things that took a lot more. And I don't think you can't cut government programs. I'm not one of those people. But the fact that they made these decisions in such a haphazard, ridiculous, stupid way is something, it's, it's a real sight to see. And one of the things, many years ago, I found a column I did, um, that I wrote about the need for ethics, history, and philosophy courses-
- SGScott Galloway
Yeah
- KSKara Swisher
... uh, with technology people. And vice versa, by the way. Uh, l- liberal studies people should understand AI and everything else. And one of the things that I thought I, one of the better things I think I did as a, as a parent, and, and Megan, my ex-wife, is here too, is our son, Alex, for example, is a tech do- is in technology, but he takes design. He's really interested in history. He's, he's got a, like, a wider range of interests around politics and everything else. And I, I don't, that's not our fault, but I think we encouraged him to have a wider range of... Well, he could learn more about AI. Our older son could probably learn more about AI than he does. But, um, but it was, it was really a moment where I thought, "What are we making? What kind of children are we making here that they think this is right?" And so I thought it was a real... It's an eye-opener to watch these testimonies, and they sit there with these very fresh, young faces, and it, it was so disturbing to me on every level. So I encourage you to watch it and be disturbed yourself. Go ahead. Win and fail.
- SGScott Galloway
I like that. Um, my fail is at the SAVE Act, the one that's trying to... It looks like it's gonna be dead on arrival, but the act would force people to show up with either a passport or a birth certificate. Only fifty percent of Americans have a passport. They cost a hundred and sixty dollars to get. A lot of people have to change their birth certificate 'cause they get married or they hyphenate their name. This is just such a naked attempt to suppress voter turnout. It's just, it's, it's difficult, and I do, it does feel like it's dead on arrival, but it's difficult to imagine anything more anti-American-
- KSKara Swisher
Yeah
- SGScott Galloway
... than-
- KSKara Swisher
They're doing everything to pass it.
- SGScott Galloway
Yeah, I'm hoping-
- KSKara Swisher
Including getting your senator, John Cornyn-
- SGScott Galloway
Yeah
- KSKara Swisher
... who is just literally the wor- the worst. I mean, Ken Paxton's already sort of criminalicious or criminal adjacent, but this guy used to have values, and now he's anything to be in office.
- SGScott Galloway
Uh, and to, to the other side, my win is we, uh, interviewed, uh, Rep, uh, State Representative James Talarico yesterday, and he had-He had the most moving, um, description of, and he wasn't framing it this way, of masculinity, and he said that his father, every weekend, would mow his lawn, and then without asking, without talking about it, would go next door and mow their lawn. And he said that was masculinity. I thought that was just so perfect. You know, I struggle with trying to identify it through a series of adjectives, and it just, it just, without asking, mowing your neighbor's lawn. I just love that. That's my way of-
- KSKara Swisher
You can mow my lawn. I have several lawns.
- SGScott Galloway
I, I'm not gonna go there. [laughs]
- KSKara Swisher
Okay.
- SPSpeaker
[laughs]
- SGScott Galloway
I'm-
- KSKara Swisher
I, I, I [laughs] I did walk into-
- SGScott Galloway
That is just too easy and too wrong.
- SPSpeaker
[laughs]
- SGScott Galloway
And I'm just, just season two Swedish US women's hockey team.
- KSKara Swisher
Oh, right. [laughs]
- SPSpeaker
[laughs]
- KSKara Swisher
Uh, he's g- I got to meet him. He's, the baby Jesus is very attractive.
- SGScott Galloway
Oh, my gosh.
- KSKara Swisher
Yeah. Yeah, I really love him.
- SGScott Galloway
I was planning to-
- KSKara Swisher
That's what I call him
- SGScott Galloway
... to ask all these zingers. Like, "Dude, we follow the same people on Instagram."
- KSKara Swisher
[laughs]
- 50:04 – 54:44
Q&A
- KSKara Swisher
Scott, we're back recording live from South by Southwest.
- SPSpeaker
[cheers] [claps]
- KSKara Swisher
All right, we're ready to take some questions from the audience. We only have time for just a few, so keep them short that we can answer quickly and, and easy for Scott, please.
- SPSpeaker
Hey, guys. Melissa Richards Person, and I'm from Louisville, Kentucky. Um-
- SGScott Galloway
Wow.
- SPSpeaker
My dad is turning 103 months-
- KSKara Swisher
Wow, congratulations
- SPSpeaker
... and the reason I offer that, thank you, is that he was a civil engineer, and he was engineering things built to last.
- KSKara Swisher
Got it. Okay.
- SPSpeaker
And I think about us.
- KSKara Swisher
Okay.
- SPSpeaker
Have we as a, have we lost the ability to think long-term as opposed to short-term?
- KSKara Swisher
That's a great question. That's a great question. Scott?
- SGScott Galloway
Um, well, technically, we're focused on shareholder value, and the markets reverse engineer earnings way out in the future, so technically, these big CapEx investments that are driving the economy, you would argue, are actually long-term investments. So I think the financial markets would say no. We are actually s- still the second largest manufacturer in the world. Um, I think people have a fondness and a nostalgia for, quote-unquote, "building stuff," but the reality is 80% of Americans think we should have more manufacturing, but only 20% of Americans wanna work in manufacturing. You can't bring your dog to the factory floor. So I, I would argue that Americans still do have more risk capital to invest long term, but quite frankly, just like we were talking about CNN, Washington Post, we have this romanticism for manufacturing, but very few young people, other than Kara's son, when you ask them what they wanna do, say, "I wanna, I wanna go into manufacturing." Um, so I-
- KSKara Swisher
Yeah
- SGScott Galloway
... still think we're thinking long term and make, make great things. I think our products are still some of the best in the world.
- KSKara Swisher
I do think we go through cycles of that, and I think we're probably headed into a more long... I think, especially if you, if anyone who's a young person, they're moving away from a lot of this quick, fast, it, it... I've noticed just a little more community a little. In doing this series, there's a lot more of a need and a desperation for community connection long-termness. I picked it up, and that's just anecdotal.
- SPSpeaker
Hey, Kara and Scott. Thanks for taking questions. Eve Grant. Um, Scott, you talked about the attempt to chill free speech is backfiring. Altern- alternative media will fill the gap as long as courts protect them. I like your optimism. What about the Goktor- Gawker Media lawsuit-
- KSKara Swisher
Mm-hmm
- SPSpeaker
... that demonstrated the courts didn't protect them-
- KSKara Swisher
That's the beginning
- SPSpeaker
... and money wins?
- SGScott Galloway
It's, uh, it's a fair point.
- KSKara Swisher
Yeah.
- SGScott Galloway
I'll, I'll turn to my journalist, Kara.
- KSKara Swisher
Yeah, I think you're right. I, I am much more concerned. I think they can chill people. Uh, I, I worry myself. I like, uh, you, you think about it, you know? I don't do it. I, of course, immediately run right into the breach, but I do think it does create a situation when... I always like to see the enemy, right? Like y- back in the day when everyone was like, "How dare these anti-gay people?" I'm like, "I can see them." It's the ones I can't see I'm worried about. And so I like to, I see what their move is, and so n- it's an easier person to fight when you see who they are and what they're up to. And what they're up to is very typical of aut- autocracies, is try to slowly bring it down. I do think there's a lash back because we do have so many tools available to us, and power has shifted from a, uh, the typical broadcast networks to people like us to others. And so it does tend to, um, unintended consequences of being such incredible morons is, is, is what's gonna happen. And again, I think Brendan Carr is an embarrassment and will end, it will end badly for him eventually, just maybe, uh, uh, just 'cause you don't know the end, uh, just 'cause you don't know the end of the story doesn't mean that's how it's gonna end.
- SPSpeaker
[claps]
- KSKara Swisher
That's how I look at things. All right, uh, that's all the time we have for today. We really appreciate South by Southwest, and we do appreciate all our fans. Thanks for listening to Pivot, and be sure to like and subscribe to our YouTube channel 'cause we have a face for radio. Uh, we'll be back later this week. Thank you so much, South by Southwest.
- SPSpeaker
[cheers] [claps] [upbeat music]
- SGScott Galloway
Thanks again to Odoo for supporting this show. Odoo wants to be your ultimate all-in-one fully integrated platform to handle everything. Seriously, everything. Inventory, CRM, accounting, HR, and much more. No more shopping around or settling for expensive services that can only handle a fraction of your business. Thousands of businesses have made the switch, so why not you? Try Odoo for free at odoo.com. That's O-D-O-O.com. [upbeat music]
Episode duration: 54:44
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