PivotWhy is the Justice Department Investigating Fed Chair Jerome Powell? | Pivot
EVERY SPOKEN WORD
75 min read · 14,866 words- 0:00 – 0:55
Intro
- KSKara Swisher
I gotta say, everyone's like, "Why's Scott out?" And I'm like, "Uh," and they're like, "Facelift." [upbeat music] Hi, everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher, and guess who's back, back again?
- SGScott Galloway
It's Audie Cornish.
- KSKara Swisher
[chuckles] You wish. [laughing]
- SGScott Galloway
She's good.
- KSKara Swisher
She's good.
- SGScott Galloway
You know what I learned from her?
- KSKara Swisher
What?
- SGScott Galloway
She said something. She had the best line of any guest host. She said, you asked her for advice on the economy or asked her for input, and she said, "No, this isn't my area. I'm here to learn." I have got-- I sent her a note saying, "I took real notes from that," 'cause I have yet to find the confidence to actually say that I don't know, and that everything doesn't demand my judgment. Anyways, Audie Cornish gets co-host or gets substitute host of the week. How are you, Kara? Did you miss me?
- KSKara Swisher
I did.
- SGScott Galloway
Did you miss me?
- KSKara Swisher
I need
- 0:55 – 16:47
Where Has Scott Been?
- KSKara Swisher
you to explain where you've been to people, sir.
- SGScott Galloway
I was presented with an opportunity to bring potable water to the good people of sub-Saharan Africa.
- KSKara Swisher
[chuckles] No. Try again.
- SGScott Galloway
Uh, which is, which is Latin for, "I have had cosmetic surgery," Kara.
- KSKara Swisher
Yeah.
- SGScott Galloway
Um, and-
- KSKara Swisher
Yeah
- SGScott Galloway
... uh, essentially, uh, I just wanted to look natural, and I guess if looking natural means look, looking like you're surprised all the fucking time, and your nose looks like a minivan from the '80s, [chuckles] we've achieved that, Kara.
- KSKara Swisher
[chuckles] Sweet.
- SGScott Galloway
We have lift off. So the camera is off. Sorry, folks. I'm, I'm confident enough to be transparent. I'm not confident enough for the comments that we would receive right now.
- KSKara Swisher
Yeah, you-- I have seen the pictures, the pictures. Scott kindly sent me a picture, and I was-- at first I was like: "Oh, come on, how bad could it be?" And then I'm like: "Oh, no." [chuckles]
- SGScott Galloway
And there was no response. You usually respond within, like, ten seconds with something really crisp and funny or supportive. You're ac- you're a very-
- KSKara Swisher
Couldn't really tell me, no
- SGScott Galloway
... People notice about you.
- KSKara Swisher
I-
- SGScott Galloway
You're actually, you're a very loving, kind friend.
- KSKara Swisher
[chuckles]
- SGScott Galloway
People don't get that vibe. And you were just silent for fifteen minutes, and I'm like: "Is she gonna respond? [chuckles] Anything?"
- KSKara Swisher
Oh, you were off the Tramadol by then.
- SGScott Galloway
I told, I told my doctor, I said I wanted to look... People have compared me to Ryan Reynolds' older brother, and I'm like, "That's the look I'm going for." And I do look like him, but I look like his grandfather after he's gone into witness protection from literally trying to flee narco-terrorists and has had bad cosmetic surgery in, in Brazil.
- KSKara Swisher
This is good. I hope it's good. But you're gonna see. We're gonna see what, what it is, but, uh, when you have the big reveal or something like that. Ca- l- I'd love you to actually talk about it because men don't talk-- most people don't talk about their plastic surgery or, or whatever. Ta- and there's been a huge boom in men doing this, like, huge-
- SGScott Galloway
Huge. It's the fastest-growing part of the market.
- KSKara Swisher
Yeah. Explain why you did it. I have never had plastic surgery. I do not judge it. A lot of people I know have it. Um, a lot of blephs. That's what they keep saying, the word bleph to me. Um, I, I don't... I, my mother had it. Like, but tell me, tell me, uh, it's mostly women. I don't know a lot. I mean, I do know some VCs who have gotten it, and I can't say, this was many years ago, it worked well, but-
- SGScott Galloway
I, I am glad to be back with these questions masquerading as virtue signaling. What is this not being able to make a shit ton of money because you're not so fucking talented thing that people complain about?
- KSKara Swisher
[chuckles]
- SGScott Galloway
Um, you are so going under the knife. Give me a fucking break.
- KSKara Swisher
I am not.
- SGScott Galloway
By the way, you were asking me questions.
- KSKara Swisher
Are you kidding? I never will.
- SGScott Galloway
Anyways-
- 16:47 – 27:28
DOJ Investigates Powell
- KSKara Swisher
Department has opened, this just happened yesterday, has opened a criminal investigation into Fed Chair, uh, Jerome Powell, over the central bank's renovation of its headquarters and whether he lied to Congress about it. The inquiry includes analysis of Powell's public statements and spending records. Powell called the investigation unprecedented in a video released by the Fed on Sunday. Let me say, he's finally said, "Enough is fucking enough." Let's listen to the clip.
- SPSpeaker
The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead, monetary policy will be directed by political pressure or intimidation.
- KSKara Swisher
This guy is a fucking corrupt octopus. When asked about the investigation, not, not Powell, it's Trump, President Trump said he didn't know anything about it. He's a liar. Powell's term as chair ends in May, and his term as governor, though, runs through January 2028. What in the world is he doing? They've, but they've been lowering interest rates. I, I think they were gonna keep them the same for this particular next session. But what in the world? He's gonna get his guy in May. What... He, he actually appointed Powell, but let's move on from that. Thoughts?
- SGScott Galloway
Well, before Chairman Powell released that statement, there was a 15% likely- likelihood that he would resign before August. By the end of his statement, it had dropped to 5%, and that is the market where the wisdom of crowd said, "This guy's going nowhere. He's very good. He nailed his speech. He did exactly what he needed to do. He wasn't defensive. He just stated the obvious." This is prosecuting or criminally pursuing your political enemies, and I think even most Republicans, deep down, acknowledge that. Also, Republicans, who are supposed to be the ones that are more fiscally responsible, recognize that one of the keys to the most prosperous economies in the world, and the majority of Western economies that grow their economies while not risking, uh-... spiraling inflation have one thing in common, and that is they have an independent equivalent of a monetary fund or, or excuse me, a monetary association or a Federal Reserve that is independent because of the following: Presidents are under huge pressure to perform, and usually there's term limits, and they're only there for a limited amount of time. So it would be almost near impossible for them not to believe that it would be good for them, their country, and the world to lower interest rates. 'Cause people don't typically realize lowering interest rates is full stop, putting more money in people's pockets. If you lower interest rates, you pay a lower fee on your credit cards, your mortgage, your auto loan, your student loan. If you take mortgage rates, or excuse me, if you take interest rates from 5% to 2%, you're putting somewhere between a few hundred dollars or a few hundred thousand dollars every month in the pocket of consumers, corporations, CFOs. Everyone in the short run is happy. But the problem is, you risk having too much money ch- chasing few, too products, the supply chain doesn't increase, and you end up with upward spiraling inflation. And the thing about inflation going up is that if people get to a point where they start panic buying, and that is they don't hold the currency, and they constantly transfer it into goods, it can spin out of control. And a lot of revolutions start because of inflation. The primary job of an independent Fed is to say: Look, we're gonna appoint you for 12 years, and your job is not to listen to anybody but the data, and make sure this entire society doesn't crumble under massive spiraling inflation. And just a few data points on Chairman Powell. He had an unprecedented increase in rates when he saw inflation peak at 9%, and he's brought it down to about 2.8%. He will go down arguably as one of the most seminal figures, uh, uh, positively in terms of the US economy. The in- inflation has mostly moved towards its target. He avoided a deep recession. He pulled off a Mary Lou Retton, like sticking the economy landing, but-
- KSKara Swisher
Yeah, there was a little complaint about a little too much, uh, uh... Remember that part when they were doing-
- SGScott Galloway
Everyone was complaining when he was doing it. The far left is like, "You're hurting Americans." The far right was, "You're being-- You're hurting corporations." But this is the bottom line: He managed to cool inflation massively while avoiding a recession.
- KSKara Swisher
Yeah, he did.
- SGScott Galloway
People don't-
- KSKara Swisher
I mean, before this, what is it called? He kept something going too long, and then like-
- SGScott Galloway
Easing?
- KSKara Swisher
Easing.
- SGScott Galloway
Quantitative easing?
- KSKara Swisher
Yeah. Yeah.
- SGScott Galloway
Well, uh, Janet Yellen basically said, and I've made this argument: "We pumped $7 trillion into the economy, and 85% of it wasn't spent."
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
"It's impossible to argue we didn't overdo it."
- KSKara Swisher
Yeah.
- SGScott Galloway
Her viewpoint is, the risks of overdoing it are far outweighed by the risks of underdoing it.
- KSKara Swisher
Yeah.
- SGScott Galloway
If you look at the real economic strife throughout our society, it's when... The thing that, that took the ris- the Great Depression and turned it in from a great recession to a Great Depression is we decided to tighten rather than loosen.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Anyways, also, he's done, i- including up until the point of their speech yesterday, the Fed has maintained institutional credibility and independence.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
The, the piece of insight is, I think everyone realizes this is prosecuting or pursuing your political enemies.
- KSKara Swisher
Like Letitia James. Those cases are all falling apart, by the way, but go ahead.
- SGScott Galloway
They couldn't even get an indictment against her.
- KSKara Swisher
Yeah.
- SGScott Galloway
Um, the evidence, the grand jury or the evidence presented, they said it's not even worthy of an indictment. The, the piece of nuance that I found interesting here, the, the little bit of insight that people may not know is the following: This isn't about trying to intimidate him into resigning. That's not what this is about. This is about trying to intimidate him into resigning from the Board of Governors. Because his role on this board, uh, basically, on every board, this is the dynamic. There's 12 board members, say, on a board, a public company board. It's usually less than that, but let's say it's 12. There's everybody speaks, everyone nods, and then there's one or two people, when they speak, everyone fucking listens. You gotta believe that when Chairman Powell is just, is no longer chairman, but the governor, when he speaks, everyone's gonna listen. He's gonna have huge influence, and Trump, Trump wants him off. Trump wants someone... Trump wants a Board of Governors that is not independent, that will take interest rates way down and give him the sugar high he wants. And if Powell is still on this board, what we are going to have is a much safer, much more robust economy.
- KSKara Swisher
Yo, he's not going anywhere.
- SGScott Galloway
This isn't about-
- 27:28 – 36:58
Minneapolis ICE Shooting Fallout
- KSKara Swisher
by an ICE agent in Minneapolis. This, as Homeland Security Secretary Kristi Noem says she's sending hundreds more federal agents to Minneapolis this week. Vice President J.D. Vance and others are arguing that the footage supports a claim of self-defense. Most people don't... Well, most people aren't lying, don't agree with that. Meanwhile, Good's wife spoke out, saying, "On Wednesday, January seventh, we stopped to support our neighbors. We had whistles. They had guns." Um, you, you shared your thoughts with me, and, you know, this is, uh... This is a terrible, uh, thing, and, and, and of course, you know, I think people rightly point out that, um, that it's- it gets an enormous amount of attention. This is a, a White woman coming back from school. The, the... I mean, the narrative is really quite something, but it still has sparked protests everywhere, um, because a- and it's-- When it's-- Especially when it's combined with all these videos of these thugs going around with masks on, um, you see reaction from s- sheriffs and local police who don't like it. They don't wear masks. Um, talk a little bit about what you, you think is happening here right now.
- SGScott Galloway
Well, I just want to acknowledge the point you referenced, that the Black community is like: "Yeah, welcome to our world." The... Look, the very founding of America, the very principles and the reason why people took so many risks and brought together such thoughtful people to start this new experiment called America, the very cornerstone of why America was found- founded was to avoid this shit, was they didn't want an autocrat with unchecked power that could harm them. And so this, in so many ways, is just a violation of everything we're supposed to stand for. And the worst thing you could say about, uh, Ms. Good is that she was, [sighs] I don't even want to say fleeing the scene, but leaving a controlled environment without permission. That is absolutely the worst thing you could say about her, but Department of Justice policy clearly states, you cannot discharge a weapon or use lethal force when someone is fleeing the scene, and I'm not even sure it qualifies as fleeing the scene. But take the worst interpretation of what she was doing, you still cannot justify-
- KSKara Swisher
That's right
- SGScott Galloway
... what this agent did. And also, if you're in front of a jury talking about situations like this... And look, federal agents and police deal with very hot, in-the-moment, complicated situations.
- KSKara Swisher
They do.
- SGScott Galloway
And a lot of it goes to, um, what they refer to in court as state of mind. Let me give you this guy's state of mind: Fucking bitch.
- KSKara Swisher
[chuckles] Thank you.
- SGScott Galloway
He put three bullets in the torso and face of a woman who has not physically threatened him, and then decided, after she had clearly been killed and ran off the road, to say, "Fucking bitch."
- KSKara Swisher
Yep.
- SGScott Galloway
That was his state of mind.
- KSKara Swisher
[chuckles]
- SGScott Galloway
This is a tragedy on a meta level for American principles. It's obviously a huge tragedy for her and her family. What was even more disappointing and salt in the wounds of the current state of America is conservative media, including Fox, used a lot of code words when describing Ms. Good, and I'm sure you saw this.
- KSKara Swisher
Oh, I saw it.
- SGScott Galloway
Uh, first off, a self-proclaimed poet. Bullshit! She was an award-winning poet. A divorced pers-- Oh, divorced people aren't as worthy. And then the one I'm sure you noticed, they kept referring to her as a lesbian.
- KSKara Swisher
Yep.
- SGScott Galloway
Okay, the guy who shot her three times in the face-... I would bet, ninety-five percent probability, he sleeps with women. That makes him no more or no less guilty, and the fact that she sleeps with women makes her no less or more guilty of, of anything, or m- no less a tragedy or a victim. And when Fox consistently describes her as a lesbian activist, what they're saying is: "Dear viewers, we think you are such raging fucking homophobes, that if we highlight that this woman sleeps with other women, you will have an easier time justifying the murder of this woman, because being gay is a bad thing." In other words, "Dear viewers, we think you, too, are homophobic." All of this co-
- KSKara Swisher
Yeah, we took out a mouthy lesbian. That's exactly what they're doing.
- SGScott Galloway
All of this coded language to try... Is basically an acknowledgement that the viewers of con- of whatever conservative media starts using those words, uh, i- it makes no, it makes no g- If we ever get to a point of America, it makes no sense in any trial or jury to talk about someone's sexual orientation. I have long said, and, and also, I think the left sometimes has a problem with wrapping virtue around people [chuckles] if they're of a certain special interest group. No, they're no better, and they're no worse.
- KSKara Swisher
This had, this had nothing to do with that. It was terrifying as a, uh... You know, because I think it was someone who has-- There's some personal thing happening here with him and gay women.
- SGScott Galloway
Well, supposedly, he'd had another altercation with a car.
- KSKara Swisher
Uh, yeah, and, uh, I- I don't know, something else-
- SGScott Galloway
Her heirs are gonna be rich. [chuckles]
- KSKara Swisher
Fucking bitch says a lot to me.
- SGScott Galloway
Yeah.
- KSKara Swisher
Something else was going on here.
- SGScott Galloway
Yeah, a hundred percent.
- KSKara Swisher
Um, and so, uh, y- you know, the, the, what really... Look, this guy, hi- is clearly a thug, right? Just wanted... And this is what they hire. This is the... The people that killed all those people in Germany were thugs. W- i- Hitler did not kill everybody; he hired people who did so. And one of the things, um, that y- you notice from this is the reaction from people who know better, the J.D. Vances, the Kristi Noem's, et cetera. And Trump himself, who immediately, y- you know, uh, d- decided she was guilty, no matter what, and kept pushing this thing before any investigation. The only person who tried to say, "Well, let's just wait and see," was, of all people, Tom Homan, and then he was slapped back. Like, i- it was incredible. He had the correct response, which is, "Let's wait and see." Like, because, you know... And then, of course, now we're, we're living in an era of video, and when they release that thing and let "fucking bitch" out, like, they think that helps their case? It sounds like this guy was in a rage from someone, and she-- Her last words of her, of her life were, "I'm not mad at you, dude." Like, honestly, the juxtaposition and her "Naying good," um, it was... And it's so clear what's happening in that video. I think what's really gonna-- What's grotesque is, and I have to give credit to Jake Tapper for riding Kristi Noem about this, which was, "How can you, you..." She showed pictures, obviously, of January 6, where they were squeezing a police officer, hitting them with, with, with, um, pipes, and, and, and flags, and, and squeezing one officer in a door. And h- they got pardoned, you know, and she was like, "Everyone gets the same law." And he's like: "But they don't." And she goes, "Everyone gets the same law." And then he shows the pictures again and says, "She's saying, 'I'm not mad at you, dude,' and driving away. They are attacking police officers. You cannot say this." I mean, as far as I'm concerned, Kristi Noem needs to be impeached and hopefully go to jail. J.D. Vance is particularly loathsome in this thing, and, uh, this, uh, I- I... J- That, to me, was sort of a shock, this idea of, like, trying to impugn this victim long before there's an investigation, and then not letting the state also be participatory. This is not gonna end well for any of these people at some point.
- SGScott Galloway
Well, the, it's- the administration has been consistent. It's the Roy Cohn communication strategy: double down, deny, attack, attack, attack. Never admit any guilt. If they'd had a really talented communications person with the presidency, what would have actually helped the administration is if the president had done the following: "I saw the video. Quite frankly, I found it very upsetting. Americans, you know, ICE is there for a reason. Uh, I need to review this. I need to see what the full investigation says, but I found what I saw disturbing," and then say nothing else. I think that actually would, quite frankly, have given ICE more cloud cover and license if he had just said that. I don't know if you remember when George Bush... They had video of when Saddam Hussein was hanged, and I remember him saying, "Yeah, I watched the video, and I, quite frankly, I found it very disturbing." And I- it, it was a real moment where you said, "Okay, I, I feel better about this guy being president." He, you know, as angry as he was, as much military hardware as he'd committed, he knew he had been, he had been sentenced to death, but he just said, "I f- I found the whole thing disturbing." Th- they, they would've helped themselves if they had just said, "We need to have a full investigation. Anyone who saw the video, including us, uh, found this disturbing."
- KSKara Swisher
And we need to investigate it.
- SGScott Galloway
Yeah.
- 36:58 – 45:48
Trump’s Oil Deals
- KSKara Swisher
But, uh, he's also trying to roll over, uh, big oil companies. He says he'll invest one hundred billion dollars to rebuild Venezuela's oil industry, but executives do not say this, and they did not say it in public. Um, at a White House meeting, oil company execs expressed interest but didn't commit to spending, which means they don't want to. And I have talked to several people, and they're- they do not want to, with Exxon CEO calling Venezuela uninvestable under current conditions. Trump is now saying he's inclined to keep Exxon out. I guess he's doing them a favor. They don't wanna be there. He's also turning up the heat on Cuba, warning the country will receive zero oil and money from Venezuela and telling them to make a deal before it's too late. I mean, this guy is like a mobster. If you were an oil company executive... I mean, most of them are like, I, I- N- no matter what he says, they're not gonna waste their money on things. They've already lost... He-- As correctly, these oil executives pointed out, they lost money there. It's sunk costs that they're never getting back, and they've written down a lot of these assets. They had to explain a lot of this to him, um, you know, which- 'cause he's, he, he just didn't have any idea what, seemed not to have any idea what had happened in Venezuela. Um, so what do you think about this? That was really interesting for the Exxon, the biggest oil company, to say, "Yeah, no, I don't think so," right in public and at the White House.
- SGScott Galloway
I, I know what's gonna happen here. The, the oil companies will just, you know, give him a hand job, say they're very interested in looking at it, wait him out, but economics are gonna win here. And then the economics, at a very basic level, are the following: The type of oil that Venezuela has, and it does sit on the largest untapped reserves of oil in the world, but it's heavy crude, and heavy crude requires special chemicals and more efforts to re- extract, and basically, the cost-
- KSKara Swisher
And refine.
- SGScott Galloway
Yeah, that's right. But the cost just of extraction are seventy to eighty bucks a barrel, and right now in the open market, it's at about sixty-two bucks. Now, they continue to do that because they have fixed costs they need to cover, but right now, with the current marketplace, it just doesn't make an economic argument for any incremental investment. In addition, big oil companies have made massive multibillion-dollar investments in Venezuela twice, and each of those times, their assets have been seized. So they're kinda like: Okay, fool me once, fool me twice, [chuckles] fool me three times?
- KSKara Swisher
Yeah. We don't need it. They don't need it.
- SGScott Galloway
Well, uh, uh, there is something, and I will come back to Venezuela because I have a lot of thoughts on it, and I was, I was jonesing to talk about it. But what I do think Rubio, but the President doesn't seem to understand, is that while oil has shaped the world, where it is now is that it's not about the... It's not about the amount of oil. The US is a net exporter. We have more oil than we need. On an inflation-adjusted basis, oil is cheaper than it was fifty years ago, but the control of the flow of oil is actually very important because you can, in fact, shut China off without... So ninety percent of their oil exports from Venezuela were going to China. There was a shadow fleet coming in and out of Venezuela, and it was going to the people, quite frankly, that we don't like. So the ability to turn off that tap, if China-- I- if you were able to basically sequester China from supplies of energy, they'd be out of business in about six to eight weeks and cannot wage war, whereas the US is energy independent.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
That is a big-
- KSKara Swisher
It is
- SGScott Galloway
... big deal. But for Exxon or Chevron or name, you know, na- name your fossil fuels company, they have shareholders, and on a risk-adjusted basis, they look at this thing. It might be worthy of some incremental investment if they get guarantees or backstops from the government or something like that, uh, to upgrade certain facilities. But be clear, this isn't going to be a massive... It just doesn't, it doesn't pencil out when oil is at sixty-two bucks a share. Now, if oil goes to one hundred and ten dollars a share, then they're gonna get, you know, they're gonna get their wallets out and say: Okay, we'll buy futures to lock in that price, and we'll make sure that the president gives us a sweetheart deal and security guarantees from the Venezuelan government. But the, uh, the old regime was wildly corrupt. Guess who's there right now?
- KSKara Swisher
The same people.
- SGScott Galloway
The same regime.
- KSKara Swisher
I know. [chuckles]
- SGScott Galloway
So i-i-i-i-i- we're not gonna see... I don't see, in the near future, a wave of additional incremental investment capital. Where you could see massive investment capital is Chipotle and the Four Seasons. There's a lot of companies that are probably interested, and I'm actually more optimistic about Venezuela than I am, say, about Iraq or Afghanistan, where you had basically these countries that are a mishmash of different tribes with borders drawn up by, you know, the British. Venezuela has been a democracy a, many times. It's a homogenous population. I, I'm actually quite optimistic, not with this administration, but I'm opt- optimistic in general about the prospects. Anyways, I'm getting off track. We were not gonna see big capital investments in the short term from-
- KSKara Swisher
Yeah
- SGScott Galloway
... from oil companies.
- KSKara Swisher
Yeah. No, but it's true, and you have to think about the economic benefits of this country, right? I mean, in terms of what he's done here. Um, and i- i- it was really interesting because I think he expected them all to follow the script, and as the tech bros tend to do, um, and they absolutely didn't, which when he said that, I-- my head jerked up. I'm like: Oh, wow, that's a big word, unin- [chuckles] uninvestable. Like, it wasn't like: Oh, it's problematic, but we'll figure it out. It was unin-- It was sort of very clear, um, and he was obviously irked by that. But leaving them out, they're, they'll... Listen, he's not gonna be able to leave them out if they wanna be in there. They're the oil companies, they'll do what they want. Um, as, a- as much as he thinks he controls everything, because he likes to say that. The, the more he says, "I control everything," the more I know he doesn't in so many ways, but-
- SGScott Galloway
We don't have an embassy in Caracas.
- KSKara Swisher
[clears throat] Yeah.
- SGScott Galloway
We don't have boots on the ground.
- KSKara Swisher
Yeah.
- SGScott Galloway
I'm not exactly sure, other than the threat-
- KSKara Swisher
Yeah
- SGScott Galloway
... I'm not exactly sure how we, uh, control this-
- KSKara Swisher
Nobody wants to go there. Do you think America- Americans want to be, especially his base? They absolutely don't wanna go there, uh-
- SGScott Galloway
I think Venezuela could be one of the most attractive tourist de-... uh, destinations in the world-
- KSKara Swisher
Yeah, tourists.
- SGScott Galloway
-if, if this is handled rightly. This is, uh, it, it- [sighs] and again, this might, might have been me thinking about this under the influence of opiates. I think the way... The analogy I would use is a Bond film, and that is Bond films always have amazing openings.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
They always nail the opening.
- 45:48 – 57:33
Iran Protests
- KSKara Swisher
President Trump is considering very strong options to intervene in Iran amid a violent crackdown on anti-government protests. He likes to help protesters in other countries, but human rights groups say over 500 people have been killed in the last two weeks, with over 10,000 arrested pe-... Other, other estimates are much higher. M- people are saying, uh, reports are coming out of much higher than 500. Internet access has also been shut down, telephone service. Iran's foreign minister said just a little while ago that the country is ready for war, but prepared to negotiate. Um, obviously, most, most smart people on this issue, whether it's Fareed... There's all kinds of people talking about it. This, this, this regime is facing some... You know, they have-- This has happened before, but most people feel this is really bad for the regime, which is good for everybody. Um, but, uh, uh, taking military action again, is, ugh, quagmire. Feels quagmire and, and rather dangerous. Although, it's the, maybe the point to attack, 'cause the, this, this country is, is on the brink, I think, from most... From what I can read from experts.
- SGScott Galloway
I can't think of a military operation that has a higher ROI for the world, and for women, and for feminism right now.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
We have been here before, where it looked like the regime was gonna fall.
- KSKara Swisher
Yeah.
- SGScott Galloway
And, uh, because of the IDF and, uh, the US Air Force, uh, we have taken out Iran's air defenses. It is clear that the Mossad has penetrated the highest levels in terms of, uh, soft assets and espionage. We should absolutely be supporting incredibly brave young women and men who are risking their lives every day, and we should be striking civilian support centers. We need to help these folks finish the job. This is argu... We are on the precipice, Kara, of what is arguably the greatest unlock for women's rights, and, and to unlock what is an incredible civilization, and turn and stabilize the Middle East for decades. There is so... In my opinion, there is nowhere in the world that connotes a better reason and a bigger opportunity for why we spend more than the next 10 militaries combined. We should be coordinating with our allies in the West, although-
- KSKara Swisher
Well-
- SGScott Galloway
... they're not gonna coordinate with us anymore, but Israel will coordinate with us, and we should absolutely be providing military cloud cover and on-the-ground, uh, assets, to make sure that this isn't the 11th hour for the regime. This is, this is lights out.
- KSKara Swisher
This is it. Right, lights out. So, uh, again, as you noted, this has happened before. There have been protests across the country, and they've managed to tamp them down over and over again, this regime.
- SGScott Galloway
But so many people still... Supposedly, I read this morning that 2,000 people have been, have been murdered.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
Uh, uh, the, the best way to end a war, is to win it.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
We have the resources. They have no air defenses. We have assets. Russia is preoccupied. Uh, uh, d- I, I mean, I'm a hawk.
- KSKara Swisher
Mm-hmm.
- SGScott Galloway
I don't think there's any reason to p- to spend $1.1 trillion on the US military, and then not use it in situations like this.
- KSKara Swisher
So, so what does that look like? Does it look like... Again, I mean, you know, does it, it, it, does it have that Bush feel to it? That, that, that of course, I suspect-... much regret for the United States' involvement there, whether it was Afghanistan or Iraq, et cetera?
- SGScott Galloway
I think, I think that's a fair question, because the reality is, we are, we are very good, and I think it would not incur much danger to our men and women to foment regime change here. The problem is, is when we decide to start trying nation build. But Iraq, I think that, that there is an infrastructure and a populace, and they even, you know-- Everyone's excited about the Shah son potentially coming back, and he has said the right language, that he wants to be a transition le- leader to free and fair elections. But the current-- What we know is the current state is not good for the people of Iran, especially bad for the women of Iran, who have been, uh, subject to what is arguably one of the worst gender apartheids-
- KSKara Swisher
Absolutely
- SGScott Galloway
... in the world. Keep in mind, Iran, just a year ago, was considered the superpower of the Middle East. In addition, I mean, when you look at geopolitics, you're not only going to look at what's happened, but what's not happened. Have the Houthis been causing problems in the Suez Canal? No. Has Hezbollah been firing rockets into their neighbors? No. We need to finish the job here, and just personally, having grown up at UCLA and having friends, David Asil, my mentor, Hamid Mo- Moghaddam, Bitak Basiri, Alex Tasseli, I have never met a group of people who are more American than Americans than Iranians, and I think they could actually be an outstanding ally for us. I think the cultures are much more similar between the US and Iran than a lot of our existing allies.
- KSKara Swisher
Well then, weigh in what the hell he's doing with Greenland then?
- SGScott Galloway
I'll, I'll tell you exactly what-
- KSKara Swisher
That news conference-
- SGScott Galloway
I'll tell you exactly what's going on, Kara. It makes abso-fucking-lutely no sense.
- KSKara Swisher
Yeah.
- SGScott Galloway
It's all downside. Anyth- anything they, that we say we want, they're like: "Fine, put military bases here. Do you want-
- KSKara Swisher
Yeah.
- SGScott Galloway
Do we have rare earth?
- KSKara Swisher
We can. We're allowed to, as Da-- I interviewed David Sanger. We can put them there.
- SGScott Galloway
Yeah.
- 57:33 – 1:06:02
California’s Proposed Wealth Tax
- KSKara Swisher
Scott, we're back with some more news. Google co-founders Sergey Brin and Larry Page are cutting some business ties with California ahead of a proposed billionaire wealth tax in the state. They aren't the only ones plotting for a way around it. Silicon Valley elites have been privately organizing to block the tax through a signal chat group called Save California. The tax would be a one-time levy on people worth more than a billion dollars. It's a couple hundred people, actually. It's not that many people, but, uh, some of them are not, are not having a problem with it. Jensen Huang said he's perfectly happy to pay it. Um, uh, at the end of the day, uh, I'm not so sure these people will cut ties. Uh, they all seem to come back to California over and over again, and that's happening right now, as you saw. San Francisco is, is, is, is sort of back, baby, kind of thing, um, in general. I, I know you have an issue about this if the ballot passes, um, but a lot of... It's not a great look, and I suspect, this is my feeling, and I've been talking to some of these people, is they'll have some sort of-- they-- I think the smart ones understand the jig is up on them being rich, like being, behaving the way they're behaving and the image of Silicon Valley, and they know they need to do something to, to... 'Cause they, I think they feel, the smart ones do, feel that there is a, a real backlash against enormous wealth and the gimmes they get. And so I suspect behind the scenes, there's a deal at play here. Um, but I know behind the scenes there's a deal at play, but, uh, thoughts that you have on this? I mean, I think these, the Google guys benefited from California, so did all these billionaires, the, the, the wonderful state of California, and it's not a great look, the way they're behaving. At the same time, they can move anywhere they want, so.
- SGScott Galloway
So if the objective is to signal to billionaires that income inequality is out of control and their weaponization of the tax code has really damaged America and created income inequality that threatens and tears at the fabric of our society, and you want to reduce receipts in the California government, then this is your bill. Because, uh, this is the bottom line, regardless of what you think is right or ethical, um, billionaires are the most mobile people in the world, and, uh, this has been tried before, and whoever wrote this bill has just not done their work. One of the people who's senior in this effort reached out to me thinking that I would get on board with it, and I said: "There's no reason to do a call 'cause I'm against this." In nineteen ninety, there were twelve European countries with wealth taxes, and now only three remain. France repealed its wealth tax in twenty seventeen. Sweden repealed it in two thousand and seven. Finland, two thousand and six. Denmark repealed its wealth tax in nineteen ninety-seven. Ireland repealed its wealth tax in nineteen seventy-eight. Austria repealed its wealth tax in nineteen ninety-four. Where I'm living now in the UK, they have a non-dom act, and ethically and logically, it makes a lot of sense. For a long time, if you moved from Dubai or Hong Kong to London and you were paying zero taxes there, you got to bring your zero tax status to London. That's kind of unfair if you're using the UK infrastructure, so they said, "Fuck that. You've been here five years, you got to pay UK taxes." Makes all the sense in the world. Over a thousand million, ten thousand millionaires have left. The UK government is going to collect less revenue this year, not more. Ethically also, or principally, I'm against it because I think once you get through the gauntlet of taxes, it's private property, and I think one of the things about the West is we respect private property. I don't think you can go after people's assets retroactively. What they should have done, or what they should do, and I love tax policy, they should have an AMT. We don't care who you are and how many tax goodies you've come up with, you're gonna pay at least forty percent above a million dollars AMT. Um, uh, uh, do away with the inheritance tax, uh, deduction, or vastly reduce it. D- raise corporate taxes. There's better ways to do this.
- KSKara Swisher
Yes, but impossible.... by the way, because they have all the money, to stop every single one of those things. I don't mind the signal here to these people at all, and I think it is a signal. I'm not so sure, and I know there's some-
- SGScott Galloway
I think higher taxes are coming for the wealthy.
- KSKara Swisher
You are-- It's enough with you people, and I think the signal is enough to begin the discussions. And they, they-- listen, they don't look good. Like, here's, especially the Google guys, they made their fortune in California. So did Elon, by the way. All of them did. And to, like, kick it on the way out is such a look of, of greed, and it was really interesting that Jensen Huang, because he probably knows it's not gonna really-
- SGScott Galloway
Jensen doesn't think this is gonna go through.
- KSKara Swisher
That's right.
- SGScott Galloway
That's such signaling.
- KSKara Swisher
So he's saying, so he's saying, "I'm happy to pay my fair share."
- SGScott Galloway
"I'm a good guy. I'm one of you. I'm in favor of this." He's not worried about it. [chuckles]
- KSKara Swisher
He's not worried about it, but he also knows, he understands what's coming. See, I find him much more canny. They're just so fucking dumb and greedy. Like, there's-- They just, they just always have to react when anyone wants them to do the right thing. Like: "Ooh, I don't want to have to do what I want to do," that kind of thing. And so I think there's a real interesting interplay here with these wealthy people because I do think brand Silicon Valley is not good, is not-
- SGScott Galloway
Oh, no shit!
- KSKara Swisher
You know? So they, they need to make a deal here.
- SGScott Galloway
The UK is talking about-- UK, Australia, and Canada are talking about banning, banning X.
- KSKara Swisher
X.
- SGScott Galloway
Uh, uh, and it's only gonna go, it's only gonna get worse. I think Europe is probably gonna consider banning Meta if this shit continues with Trump. But just going back to tax policy, a better tax policy that would be more effective... I mean, this is the problem, is this, with this ballot and some of the conversation we're having here, is something I've struggled with my whole life professionally, the difference between being right and being effective. Billionaires paying more tax in California to support the incredible infrastructure, the Cal State, the UC system, the hospitals, the environment, a- absolutely, that's right. But the question is, how do you be effective? How do you actually increase the treasury to invest in the middle class and the infrastructure that made these people rich? And one thing you could do, it's boring, but it would be effective, is the following: You get taxed when you recognize a capital gain based on where the wealth was accreted. So when Bezos accretes, whatever it is, eighty or a hundred and twenty billion dollars in wealth, and then he recognizes it, the tax authorities go, "Okay, it's-- we estimate that ninety of that hundred billion dollars was accreted while you were a resident of Washington State, and so you are going to pay Washington State taxes on ninety billion dollars." Instead of like, "You know, I'm thinking about selling my stock. I'm gonna peace out to Miami and shit-post San Francisco, and then pay and pretend that I'm seeing my father. I couldn't handle San Francisco politics or homeless anymore, so I'm peacing out to a zero-tax state." And you can literally be there for twelve months and then recognize the entire capital gain without paying anything back to the great infrastructure. I think there are much more, much more elegant-
- KSKara Swisher
Yeah
- SGScott Galloway
... ways.
- KSKara Swisher
No, I think this is the beginning of a dialogue. I just, I don't, I don't know, but I have a f-- They-- Let me just tell you, they can walk, you know, do their angry walk out of California, but they're coming for you folks. You're not... Nobody likes you, and they don't think you're heroes, and they don't think you're great, and they don't think what you've done is great. And so of, if there's one brand that's been more, that has, has shot itself in the foot more, it's Silicon Valley. Um, not everybody, but a lot of people. Anyway, um, one more quick break. We'll be back for wins and fails. [upbeat music] Support for today's show comes from Upwork. If you're a small business owner, your inbox is in the double digits before you even logged on, it might be time to bring in some help. Even though it may feel like it, you don't have to be the CEO, CFO, and COO. Upwork says that with their help, you can start hiring top candidates and stop doing everything yourself. With Upwork Business Plus, you don't need to spend weeks sorting through random resumes. You can source and vet a curated shortlist of proven candidates for skills and reliability. Upwork Business Plus gives you instant access to the top one percent of Upwork's talent in fields like marketing, design, AI, and more, all ready to jump in and make your life easier. Upwork Business Plus gets rid of the hassle of hiring and sends top talent right to your inbox. That way, you're never stuck spinning your wheels when you need a skilled pro, and your projects don't stall. You can visit upwork.com right now to post your job for free and connect with top talent ready to help your business grow. That's U-P-W-O-R-K dot com, upwork.com. [upbeat music]
- 1:06:02 – 1:15:08
Wins and Fails
- KSKara Swisher
Okay, Scott, let's hear some wins and fails.
- SGScott Galloway
Okay, uh, my win is actually, uh... Well, [exhales] the, uh, the US military that executed the capture of Maduro, Delta Force, 1st Special Forces Operation Detachment Delta, which is an elite Army special unit, um, that led the direct raid and the apprehension of Maduro, the 160th Special Operation Aviation Regiment. Um, and then there are these quiet helicopters, uh, just on, uh, night prowlers. And then supporting the, uh, our brave men and women on the ground there were, uh, uh, elements from multiple, um, units, intelligence, mobility. Uh, the United States Air Force, United States Navy, the Marine Corps, all had, all had a role in this. I just think, i- if you think about kind of soft power, if you think about America's influence around the world, of the seven billion people in the world, six point seven billion don't live here, and six billion are never going to come here, and four billion are never gonna have any interaction, or three billion are probably never gonna have any interaction with an American, to an extent. So our ability to do business, to, uh, continue to attract the best and brightest, to convince them maybe not to cooperate with people planning to come here and harm us, is based on our brand, and part of that brand should be soft power in a positive way, and that's why the cancellation of USAID was so terrible. But also, some of it is, is, quite frankly, as Madeleine Albright said, Secretary Albright said, our-... reach as far and our memory is long. The brand message of this military flex and how it was executed, has sent a chill down the spine of every adversary globally. Jesus Christ! Did you see what they did, and how easily they did it? Uh, I think that the win here-- And I, I'm actually in favor of the operation. US, Russia, and China were operating a shadow fleet. We also actually didn't get enough press. We seized a Russian tanker like it was s- wiping sweat from our brow. They did it so elegantly, even though it was being shadowed by an Ekila-based, uh, or class Russian sub. It could be an amazing ally. Uh, anyways, we talked about this, but my win is the best-performing organization in the history of, uh, of the world, and that is the US military. I just don't-- I, I'm just fascinated by what people... My loss here is the moral color code of America, where unfortunately, my business academics have created a zeitgeist of oppressor and oppressed, and we've decided the shorthand for that is the color of the skin of the oppressor. And we go into moral paralysis, whether it's in Sudan or Afghanistan, uh, or in this case, Iran, when the oppressors are brown. And I, I just am disappointed that there's not more attention to what-- I don't think you can call yourself a feminist if you're not talking about, excited, and very supportive of robust, of robust action to overthrow what has been one of the most oppressive regimes globally. Uh, and I just don't see that nearly the type of coverage that some of [chuckles] some other conflicts have received, and I think it's because in America, we do have what I would refer to as a mo- a moral color code, and that is the, the damage done to the oppressed, the violation of human rights, the pursuit of democracy, the out-of-control misogyny, are not what dictates our response. What largely dictates our response is the color of the skin of the oppressor. That's my fail. Also, I would be remiss if I didn't credit a lot of my thoughts around this to this, this really impressive woman who I had the pleasure of meeting, a woman named Elika LeBon, and if you're not following her, you should. Uh, I think she's just so brave and so thoughtful around the issues as it relates to Iran and other conflicts around the world.
- KSKara Swisher
All right. Um, it's kind of funny that you say that because there was a story on Fox about wine moms, white wine moms-
- SGScott Galloway
White wine moms [laughing]
- KSKara Swisher
... being dangerous. [laughing] Oh, my God, sweet.
- SGScott Galloway
I love that.
- KSKara Swisher
Maldy lesbians and white wine moms.
- SGScott Galloway
The wom- the women of white wine.
- KSKara Swisher
Oh, my God, Jesus Christ. Jesus Christ.
- SGScott Galloway
That got started with that, that justice's wife, who had drank wine and still, and hung the flag upside down.
- KSKara Swisher
Yeah, oh, well, she's a different white wine mom. She's [chuckles] on the other side. Um, uh, my win is, uh... Well, no, let me do my fail first. I just had them in my head, now I've forgotten them. Oh, what's happening with Grok? Uh, we didn't even talked about it, and we, we should on Thursday, but, uh, this, th- a- and the fails are Apple and Google, and of course, Grok, as always, is in terms of, um, allowing child abuse and misogyny to just thrive and pretending it's free speech. Um, what, i, i, back in the day, I feel like child pornography was something we all agreed shouldn't happen. Um, the fact that these companies haven't thrown Grok out or demanded changes or anything, or been vocal about this issue, and maybe they are behind the scenes, but I don't care. They should say it publicly, um, about what, uh, Musk has been doing at Grok, which is disturbing. Uh, there were pictures of the woman who was killed in Minnesota with bikinis on in his spicy mode. Look, uh, uh, people are gonna make these things, stupid anti-women things all the time, but this is really repulsive when it comes to, um, uh, children. And, uh, and, and this is something we shouldn't-- I'm gonna do a whole show on it 'cause I'm just so tired, and I, I do, I, I don't think the media has paid enough attention to this, but I don't think it's the media's fault, so I'm not gonna, like, slap the media for it. I, I think Apple and Google ha- have some influence here in terms of the App Store and everything else, and, um, I, I know, for example, that a federal judge just ruled that the lawsuit against OpenAI should go to trial, and that's perfectly fine, but the behavior of Grok is really pretty heinous. And so, um, uh, a- a- and if-- They're never gonna do something 'cause it's Elon Musk, and he has no values whatsoever at this point. Um, but Apple and Google certainly should and stand up, and the, the lack of standing up by many companies these days is pretty disturbing on every level, but this, this, to me, is the most disturbing that I've seen so far. And my win is, um, my win continues to be, uh, people that, um, uh, you know, that, that are standing up, whether it's Jerome Powell, whether it's, uh, the [chuckles] even the Exxon executive, but he just said the truth out loud, um, about things. This is an administration of, of cronies and hacks and terrible people that are still doing damage, even if they're incompetent. And so anybody who speaks out and says things, I'm really... And Jerome Powell this week sort of gets that, uh, that for me, absolutely, even in a small way. Um, I, I, I, I don't love when actors do it from stages, and I thought actually Jean Smart, uh, at the-- besides saying she's a greedy bitch for winning three times, which was very funny, was really, uh, did it well. Like, she said something very clearly, and at the same time, she understood. She's like: "I understand that people don't like to hear actors talking about these things, but I'm a citizen, and this, we have to do the right thing." I thought she did it in a really classy way. So that was a small way. I think Jerome Powell is doing the same thing, and I think everyone who calls attention to all this n- fucking nonsense, um... And also, Jake Tapper, for doing that excellent interview with Christine Rome, um, deserves credit for, for, for just saying: "Oh, c- come on, fucking enough with you people." Anyway, we wanna hear from you. Send us your questions about business, tech, or whatever's on your mind. Go to nytmag.com/pivot to send a question for the show, or call eight five five five one pivot. Okay, that's the show. Thanks for listening to Pivot, and our new Scott Galloway. She's so pretty. Be sure to subscribe to our YouTube channel. We'll be back on Friday. Scott, welcome. [laughing]
- SGScott Galloway
[laughing] Stop laughing. Stop laughing.
- KSKara Swisher
I just, I love every-
- SGScott Galloway
It's lucky it's not at my expense.
- KSKara Swisher
You know what? I gotta say, everyone's like: "Why is Scott out?" And I'm like, "Uh..." And they're like: "Facelift." [chuckles]
- SGScott Galloway
No, it wasn't a facelift. Uh, that's coming.
- KSKara Swisher
Whatever, that was what you said.
- SGScott Galloway
That's coming.
- KSKara Swisher
[chuckles] That's coming.
- SGScott Galloway
That's coming.
- KSKara Swisher
All right, read us out, you pretty little lady.
- SGScott Galloway
Today's show is produced by Lara Naaman, Zoë Marcus, and Taylor Griffin. Ernie Bertot engineered this episode. Rich Shibley edited the video. Thanks also to Drew Bros, Miss Vera, and Dan Chalon. Nishat Kurwa, Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at edmymag.com/pod. We'll be back later this week for another breakdown of all things tech and business. I asked the surgeon just to look natural, and I think he misheard me and said, uh, "I wanna look naturally surprised." [chuckles] Uh, I'm looking at Ferraris, Kara. I'm looking at Ferraris. [laughing] What is the hole I'm trying to fill here? What is the hole?
- KSKara Swisher
Oh, it's a big one.
- SGScott Galloway
See you later in the week. [upbeat music]
Episode duration: 1:15:08
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