Elon Steps Back from DOGE, Wall Street Whiplash, and Meta’s Antitrust Trial Continues

Transcript

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Speaker 22 Support for this show comes from Upwork. If you're overextended and understaffed, Upwork Business Plus helps you bring in top quality freelancers fast.

Speaker 22 You can get instant access to the top 1% of talent on Upwork in marketing, design, AI, and more, ready to jump in and take work off your plate.

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Speaker 23 You're going to have no gums and I'm going to, I'm going to laugh at your dentures someday.

Speaker 23 Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network.
I'm Kara Swisher.

Speaker 7 And I'm Scott Galloway.

Speaker 23 How are you doing, Scott? Guess what? Guess what? We are Webby winners

Speaker 23 again.

Speaker 23 Oh, yeah.

Speaker 7 I just want to thank the Academy.

Speaker 23 Okay, the Pivot won the Webby Award and the People's Choice Award, both of them. Yeah.
We like the People Love Us for the Best Business Podcast.

Speaker 7 And the judges, right?

Speaker 23 And the judges, yeah. The judges and the people.

Speaker 23 We've got a lot to get to today, but let's take a moment. And also, you won for Prof G.
What did you win over there?

Speaker 7 We run

Speaker 7 for Prof G Markets or for Raging Moderates, we were an honoree, which just means please send in your $1,300 a year next year to be considered for something. Yeah.

Speaker 7 And then, by the way, this business, we should be in the awards business. Yeah.
This is such a racket. And then Profit G Markets won the People's Choice Award, but not the Judge's Award.

Speaker 7 So the cultural elite or the deep state of podcasting

Speaker 7 has decided they're smarter than the people who picked Profit Markets. But Pivot, there was just sort of no argument across anybody.

Speaker 23 Across the board. Will this make us more obnoxious or less obnoxious? Probably more.

Speaker 7 I think we're pretty much hitting the limit of obnoxious. I can't imagine.
Yeah, I don't see us getting that.

Speaker 23 Yeah, I got a lot of congratulations and I'm like, it's the Webby. It's a Webby.
We're very happy. We have to think of a five-word acceptance speech for that, by the way.

Speaker 7 Oh, yeah. Yeah.
That's right.

Speaker 23 Scott Galloway is my husband.

Speaker 7 There you go.

Speaker 23 I don't like that at all. Do you have any idea? Think of one.
Think of a, you're going to go get it. Maybe

Speaker 23 someone's going to go get it.

Speaker 7 My team's been to the dinner. They love it.
They say it's a ton of fun.

Speaker 23 It is. Oh, I love it.
Remember, I got the Lifetime Achievement Award. Oh, Jesus, of course.
You're going to get one at some point.

Speaker 7 It was Lifetime Achievement Award.

Speaker 23 It was lovely. I had a lovely time there.
I had met lots of lovely celebrities that I liked.

Speaker 7 I want a Midlife Crisis Award. I want an award for best midlife crisis, like really leaning in.

Speaker 23 Let me ask you a pressing question. If you could win any award, right? You and I are not award people.
We really are.

Speaker 23 But what would it be? What award would you want to have?

Speaker 7 Other than the adult video tripod award?

Speaker 23 Obviously.

Speaker 7 tripod award that's good i just made that up my nickname in the fraternity don't ask me why yeah don't ask me why okay what would be the award a real life award one i don't know the national medal of freedom whatever it is with at the white house they pin it on you put the thing maybe it'll be at the kennedy center i don't know yeah no not anymore no that'll come back though um yeah i know i don't really care about priests don't want a nobel

Speaker 7 um i don't know did you win any awards in your life if you won i was thinking about that the last award i won from these, other than these Webbies, is in, did you have a high school poll?

Speaker 23 No, not really.

Speaker 7 You know, Most Handsome, Most Successful, Most Likely to Succeed.

Speaker 23 You didn't have that in your high school? No, I went to a snotty private school, but go ahead.

Speaker 7 I did. I won Most Comical and Steve Martin, which dates me.

Speaker 23 Oh, wait.

Speaker 23 Is there a Steve Martin award and Most Comical?

Speaker 7 Well, they did these things like, you know, Richard Pryor, so we could give the black kids. I mean, we didn't really, we thought we were being woke and yet we were being very racist.

Speaker 23 And we had all these, you know, celebs that you were supposed to be in the 80s like you know the the blondie or you know they said this is who you are and they picked steve martin that's perfect i want steve martin and i want most comical oh i see that i see that most comical that's so funny you weren't like best you know handsomest no not most likely to succeed not smartest not most likable none of that yeah none of that no yeah no i i have won uh i won the bun award in my freshman year of college which something to do with journalism yeah yeah it was i i was i won as a freshman of seniors it, and it upset the entire ecosystem, and the seniors hated me for winning it.

Speaker 7 I think they hated you for other reasons. I'm just going to go out on another limb.

Speaker 23 Fair point.

Speaker 23 I won a Loeb Award once.

Speaker 7 Oh, that's big.

Speaker 23 That's journalism, right? Yeah. Yeah.
It's all the journalism awards.

Speaker 7 This was all, you're doing what I'm doing. You asked me not really caring.
You just wanted to do that.

Speaker 23 No, I'm just. I'm just, I didn't know.
I wanted to.

Speaker 7 Keep in mind, we only have 90 minutes here, so rifle through your award.

Speaker 23 No, I haven't won much.

Speaker 23 I would like to win the MacArthur Genius Award.

Speaker 7 Oh, that would be pretty cool.

Speaker 23 That's the one I want. You can't be thirsty for it to win it, though.
You have to pretend you're very.

Speaker 7 You know what award I aspire to, but will never happen just through randomness is there's something called, I think it's called the Carnegie Award.

Speaker 7 And it's basically the burning car award. And that is, they give about, I think, between 60 and 100 a year to people who have risked their own life on the spot to save someone else's life.

Speaker 7 So it's literally rushing into a burning house.

Speaker 23 I would run into the burning house to save that. I think you would.
I would. I would.
I would burning house runner into. That's a good award.

Speaker 7 It's a really interesting, I love those sorts of philosophical questions, though, that in faced with that type of situation. And by the way, to be more thoughtful,

Speaker 7 men are more likely to run out of the field and try and save their comrades and get shot doing it.

Speaker 7 And women are more likely, and we hate to establish any sort of gender rules here, but women are more likely to like, let's think this through and not be idiots.

Speaker 7 Like, how do we accomplish the mission?

Speaker 23 Without dying.

Speaker 7 And slow down and be more thoughtful. And quite frankly, that peanut butter and chocolate is really useful in all situations, including combat situations, right?

Speaker 23 Are you good

Speaker 23 in a jam? I did outward bound. I was pretty good in a jam a lot.

Speaker 7 I'd like to think that I.

Speaker 23 Are you panicky?

Speaker 7 I don't.

Speaker 23 We're all going to die.

Speaker 23 We're all going to die. We should do like a survival thing.

Speaker 7 That would be interesting. Yeah.
And now you'd want me off.

Speaker 23 I'm good at calming down emotionally emotionally fraught situations when people get upset i break up fights a lot at bars not a lot i've done it like three or four times i always establish dominance and that's the how i work oh really yeah and those i was surprised i was really kind of like it was sort of lord of though i do outward bound and a bunch of other things like that and i i literally was like i she'll be running this now we shall do what i say i find as i get older i'm really happy for someone else to take charge yeah yeah really you'd be a good team member you'd be especially if she's wearing leather and i have to pay her a couple hundred euros with leather yeah anyway

Speaker 23 We have a lot to speak about. A lot of people.
Congratulations on the Webby again. We're very excited.
Thank you, Webby Award.

Speaker 7 And congratulations to our team.

Speaker 23 And team, yes, all the team.

Speaker 23 Should we name them? Go ahead.

Speaker 23 Zoe, Taylor, Lara, everybody. And name everybody.
Drew is amazing for us. We've got who's Drew.

Speaker 7 Oh, the tech who's been with me 15 years. Memo to self.
Remember Drew.

Speaker 23 Anyway, we thank. Do we thank Fox? Yeah, Vax.
Sure. Sure.
Zinshot. Yay.
Yay.

Speaker 23 Vox. Vox.
Yay. The suits.

Speaker 23 The corporate. They don't really wear it.
The headquarters.

Speaker 7 That's not fair.

Speaker 23 They don't wear suits. They're not suit people.
They're not suit people. They're actually lovely ones.

Speaker 7 Can you imagine if we've been with them seven years? What does that say about how easy going and nice they are?

Speaker 23 They have to be.

Speaker 7 Jim Bank. Between the two of us, we've been with them.
The chances for a blow-up between you, me, and any third party.

Speaker 23 Yeah. Yeah.
Are big. Has he ever yelled at us? No.

Speaker 7 He never does. No, Jim's the nicest guy.
Jim's the nicest guy in media. Yeah, he is.
He really is. He's the nicest guy in media.
Anyway, enough about us.

Speaker 23 Enough about us. Thank you, Webby Awards.
It's well deserved by us, let's just say. Okay.
All right. We've got a lot to get to today, including there's so much going on.

Speaker 23 Elon announcing he's stepping back from Doge following Tesla's terrible earnings report, just as we predicted. Trump sends the markets on yet another wild ride because he's so ridiculous.

Speaker 23 But first, Instagram co-founder Kevin Systrom testified this week that the app was underfunded after Meta bought it, boosting the FTC's argument the company was illegally anti-competitive.

Speaker 23 Systrom said Zuckerberg was not investing in the Instagram app because he saw it as a threat to Facebook, which he felt was better. He was incorrect, but that's what he felt.

Speaker 23 I've interviewed Systrom and let me, let's listen to this clip because they used it in the trial to try to impugn Kevin Systrom.

Speaker 24 We were struggling to keep the setup, $500 million valuation, and then Mark came along and was like, hey, how about I double that? And you get to keep working on what you love.

Speaker 24 And you get all the expertise of Facebook. You get to work with me, Cheryl, Shrepp, et cetera.

Speaker 24 And that sounded like a really good deal. And if you look in retrospect, I think it was a great deal.

Speaker 24 Think about all the things we've accomplished being part of Facebook, all the things we've plugged into, whether it's hiring, spam fighting, the ad system.

Speaker 24 I mean, we have thousands of salespeople who are basically selling ads for Instagram, and we snapped our fingers to access them. So a lot of really great stuff is.

Speaker 23 I don't snap your fingers. Yes, I snapped my fingers.

Speaker 24 No, but I guess my point is like.

Speaker 23 Yeah, no, you had, no, I get it.

Speaker 22 I get it.

Speaker 23 It's like, which would have happened without the other kind of thing.

Speaker 28 I mean, if you have a lot of people.

Speaker 24 And I bet you we would have been successful as an independent company as well.

Speaker 23 So they were using this to say that he was happy there. And now let's listen then to a clip from 2023 at South by Southwest where I interviewed Kevin.

Speaker 24 I think the worst part of the sale was just like trying to both accomplish something great with the company.

Speaker 24 and also merge it into a company that didn't quite know how to look at you. Were you a competitor? Were we excited to own you?

Speaker 24 Like, it's like a roommate who moves in and you're like, oh, like this person's really cool, but also their stuff's everywhere.

Speaker 23 Right.

Speaker 24 That's kind of what it felt like for eight years. And

Speaker 23 bad roommate. Yeah, it's like, are there any good roommates?

Speaker 7 I don't know.

Speaker 24 Maybe that's the reason why people shouldn't have roommates. But

Speaker 24 it was challenging, but we did great things.

Speaker 23 That's the attitude that Kevin had for a long time. He was very frustrated internally.
Mark was petty with him, I think, and jealous. I think that's no question.

Speaker 23 It was an interesting, it's an interesting trial.

Speaker 23 It was interesting that they had Kevin there and not interesting Evan Spiegel, who turned down, who I interviewed yesterday, by the way, in Washington,

Speaker 23 at Snapchat, who had turned down. And then Facebook proceeded to blast them by taking all their ideas.

Speaker 23 Any thoughts on this? I mean, I think people

Speaker 23 publicly try to put on a good face, right? You've been in these situations, Scott.

Speaker 7 Yeah, look,

Speaker 7 Kevin strikes me as a very talented entrepreneur. I don't doubt that anything he says is there's some veracity to it.

Speaker 7 But, you know, he cashed their check. What a shocker.
The current CEO or the CEO was on top and

Speaker 7 wanted to maintain his platform, his kind of firstborn, Facebook, maybe even at the expense of Instagram.

Speaker 7 But the thing that sort of countered all this is whatever he was feeling or whatever resources he was trying to starve one of the kids from, he clearly changed his mind because Instagram is now responsible for over half of ad revenue and it's growing faster.

Speaker 7 And so at some point, better product. At some point, Desuck realized this and has absolutely turned it into

Speaker 7 a monster of business. So that may have been true then, but clearly,

Speaker 7 if that was true,

Speaker 7 Mark has seen the light. And

Speaker 7 what

Speaker 7 I have found or what is interesting, I had dinner with Jonathan Haidt the other night. and he actually said, you know, I get so emotional and biased about this stuff.

Speaker 7 He said some of the controls that Meta has put in place for parents, even though they're not easy to use and, you know, you can criticize them.

Speaker 7 He said the one that gets away with more than or doesn't get the scrutiny it deserves and he thinks is actually the most mendacious is SNAP.

Speaker 23 Really? Interesting. Why?

Speaker 7 Well, things like their add-on feature where you can, the core components of it,

Speaker 7 he kind of said are sort of tailor-made, likely unintentionally, for drug dealing and for people reaching out to minors because that feature where you can add on people near to you, immediately it adds people near to you is perfect for a drug dealer.

Speaker 23 I suppose.

Speaker 23 I would push back because I think they've always been done a lot of moderation. They've always, when they have a problem, they fix it.
They don't like

Speaker 23 bellyache about it.

Speaker 23 They had a whole problem with AI. Streaks? Yeah.
I'm just saying they fix things quickly and they do moderate. They moderate much heavier.

Speaker 23 And they don't, what I'm saying is the attitude isn't, ugh, what are you talking about? It's like, oh, we should fix that. Like, I think I would agree.

Speaker 23 I think it's a, it's a locational thing and it's more for your friends and therefore it opens it up more. But I, you know, I have kids on it.

Speaker 23 I would rather have them on Snapchat than Facebook because I think they got inundated on Facebook.

Speaker 7 Well, they're not going to be on Facebook.

Speaker 23 No young person's on Facebook.

Speaker 23 Or Instagram.

Speaker 7 I think Snap is actually pretty scary. And also the whole zeitgeist of it, where it's disappearing messages.

Speaker 23 It was. Right.

Speaker 7 I mean,

Speaker 7 isn't that kind of perfect for people looking to reach? Doesn't that promote a certain level of lack of accountability?

Speaker 23 But in this war, in this information, I don't think that's why they did it. I think it was because they thought privacy was critical.
That's not why they did it. I was there.

Speaker 7 Regardless of what they're, I don't think any of those people are looking to harm children.

Speaker 7 But when they have features that make it easy for adults to reach out to minors, you know, isn't that a problem?

Speaker 23 It is, but I don't agree with Jonathan. I think Facebook has done less and been more resistant to dealing with things.
And they're the big dogs. I would agree with you.

Speaker 23 And

Speaker 23 I think Snapchat is, I'd rather have my kids. And I get the locational feature.
And if kids open it up, there are things you can do to it to stop that, right?

Speaker 23 You can, you, it has, it's much more open to fixing. And it certainly has had

Speaker 23 issues around drug dealers and things like that. Every one of these platforms has.

Speaker 23 I'm just saying platforms like, who have had problems like Reddit and Snapchat have always been willing to change in ways and admit in ways Facebook never has.

Speaker 23 And, you know, I ultimately, I think Facebook doesn't really matter because they're the biggest and they have the most impact on everybody.

Speaker 7 I think that's a fair point.

Speaker 23 Especially through Instagram. And so they should be the most responsible.

Speaker 7 My kids are on Snap, though. Aren't your kids on? Or I guess your kids have aged out of it.
It's really about Snap.

Speaker 23 I think Louis doesn't use it as much, but he definitely, that was the only one he used.

Speaker 23 And there was one incident where I did catch him with a girl on Snap, but using the location features.

Speaker 23 I told you that, didn't I? I caught, he went out he left the house and i found him on snap because he's so dumb with his technology and i said i know exactly where you are i'm coming to get you

Speaker 23 come on be a brother no help him actually his brother turned him in his brother's the one that turned him into me um uh

Speaker 23 his brother narked on him yeah well he's like louis not here and then we're like let's use the snap feature it's a long story but he wrote me the most legendary text of all time which is why i love him so much he i i wrote him and i said i can't he took an uber he used my uber to get to a do some sort of host so a lot of breadcrumbs it sounds like he wanted to he was i was like literally so he wrote i wrote i'm like you are so grounded i texted him he was so grounded i'm gonna kill you and he he writes back he goes sometime it gonna be like that chief and that's what he wrote i'm gonna read it at his wedding i love that line sometime it gonna be like that chief anyway when i when i was um you're about to enter into this period of when i was a

Speaker 7 senior in high school i asked four four women to my prom and all of them said no. And my friend Adam Markman, who I think felt empathy for me,

Speaker 7 set me up with a woman,

Speaker 7 actually one of the most beautiful women I've ever met. This woman named Lena.
I posted the picture of her on my Instagram. Anyways, Lena and I went to the Windward prom

Speaker 7 and I was so excited. I was telling my mom I was going to a prom and she went with me and I rented a tuxedo and I didn't know how to put the fucking thing on because I'd never worn a tuxedo before.

Speaker 7 I didn't know how to do cufflinks or anything.

Speaker 7 anyways um i said and she said well what are you going to do and i'm like well the after party's near here and i'm like and i'm like and i've got a key i just might bring her back after all of this to here and

Speaker 7 And I did manage to get her back to my place. And you know,

Speaker 7 there was firewood in the fireplace that my mom had put in there.

Speaker 23 Oh, no. Your mom's so good.
Wasn't that nice?

Speaker 23 She looked at me.

Speaker 7 I was 6'2 ⁇ , 140 pounds with bad acne. And she's like, he needs all the help he can get.

Speaker 23 He needs

Speaker 7 well you are about to enter this period you're young man that you have so i hope you've done a good job anyway anyway my kids are great you know what my mom used to say to me she would say when i was talking about my women troubles which was mostly an inability to get a woman in my life she would look at me and she'd be like wine wine

Speaker 23 wine wine wine i did do i mean

Speaker 23 you have to do the responsible things the sex talk the condom talk everything else but um just treat women well was the one that I really pushed on him.

Speaker 7 Well, I told you about the sex talk I had with my son, right?

Speaker 23 Yes, you did. We're not going to do that again.

Speaker 7 When I went into his room with a banana and a condom.

Speaker 23 I know you told this to me.

Speaker 7 And he said, what's the banana for? And I said, well, I can't get hard on an empty stomach.

Speaker 23 Oh, my God. Boom.
Never gets old. You can't tell that joke.
Never gets old. It gets old.
It gets old. Never gets old.

Speaker 7 I'll be here all week. Try the veal.

Speaker 23 All right. We're going to, the invading Poland one is not allowed anymore.
Oh, by the way.

Speaker 7 No, that's wrong.

Speaker 23 That joke's not allowed anymore. I need to correct it.

Speaker 7 It's wrong.

Speaker 7 The Polish cavalry, that was an attack meant to divert German forces, and it was effective. And it's an insult to the brave men of the Polish cavalry.

Speaker 7 That attack was actually an effective diversion of German, they weren't tanks, but German armored vehicles. I've had literally...
eight Polish historians reach out to me and say, stop saying that.

Speaker 23 For your dick joke. Yeah, stop the dick.
I think just because it's not funny. But anyway, let's keep going.
It's not the only legal trouble Meta is dealing with.

Speaker 23 Meta and Apple are the first companies to be fined for violations of the EU's Digital Markets Act. Of course, this is going to happen, antitrust rules.
Meta about $230 million, Apple's $570 million.

Speaker 23 Both have been giving $60 to comply. It's hardly any money.

Speaker 23 So any thoughts on that? Any thoughts on that?

Speaker 7 On the antitrust?

Speaker 23 Yeah.

Speaker 23 The Europeans are extracting funds. I think they're probably not going to pay and they'll just keep

Speaker 23 objecting to it for.

Speaker 7 The question I have,

Speaker 7 I'm hoping you know more about this than I do, but is it okay, everything's fine and continue?

Speaker 23 Because that's a parking ticket in terms of their no, they have to comply with the rules. So they have to decide what to do.
They can pull out of the things. They can close down services.

Speaker 23 They've done that in various countries. I think in Canada, Facebook pulled out of news.
They don't put news on there.

Speaker 23 And only right-wing, there was a great piece about how sort of right-wing blather invades social media there because Facebook has pulled news organizations out of it because of something they didn't like.

Speaker 23 So they'll have to either comply with the rules or they're going to have to leave.

Speaker 7 And this is, I mean, okay, so the good guys, you could argue, are winning here.

Speaker 7 So the EU finded both, they find them both for violating the new Digital Markets Act. And it's the first time that the law has been, has been enforced.

Speaker 7 It was $570 million for Apple and $230 million for Meta.

Speaker 23 I just said that.

Speaker 7 But

Speaker 7 we'll say it again.

Speaker 23 All right. Okay.
Okay.

Speaker 7 So anyways, I'm saying saying it again.

Speaker 23 I know you have research in front of you, but go ahead. Keep going.

Speaker 7 Yeah. And then,

Speaker 7 so what is that? Half of what Apple and Meta make in one day. So the question is, the question for me is, is it going to happen every month unless they change their behavior?

Speaker 7 Or is this like that old fine where they effectively

Speaker 7 are like, okay, you were bad, now continue to be bad. And you got caught this time and we're finding you, but it's not going to really change future behavior.

Speaker 23 I shall find out. I do not know that.
Any Europeans can write us, but I don't know.

Speaker 23 I think they're going to do other things to not comply because compliance is problematic across the globe, from what I understand.

Speaker 23 They'll figure out some workaround of some sort, but I will find out and I will let you know next week. Is there any predictions for that meta case from your perspective?

Speaker 23 Most people think it's pretty weak, but Systrom's testimony was definitely strong, I think. Well,

Speaker 7 I do believe one of these companies, I don't know which one, is going to prophylactically spend something.

Speaker 7 I think that they're so smart that when they feel the wolves circling, they're going to get out ahead of it and go to them and say, all right,

Speaker 7 what's our blot offering here?

Speaker 7 What if we sold Chrome to OpenAI or what if we spun Instagram? I don't know, or WhatsApp? I think one of them, I think we're going to see our first spin in the next 12 months.

Speaker 23 All right. That's a good prediction.
I don't think it's going to be Facebook. He's very stubborn.

Speaker 23 But I suspect Google, which has a much tougher case. This case, they feel very confident over Meta about this particular case, just so you know, they're very confident.

Speaker 23 Although they sort of communicate on social media like they're desperate, which is interesting.

Speaker 23 So the next one: former Alaska governor Sarah Palin has lost the retrial of a 2017 defamation lawsuit against the New York Times.

Speaker 23 Palin filed a lawsuit after the Times ran an editorial claiming she had engaged in a political incitement ahead of the 2011 shooting of Gabby Giffords, incorrectly drawing ties to an advertisement.

Speaker 23 The Times issued a correction in under 24 hours, but Palin's legal team argued the mistake was actual malice. The bar for actual malice is high, established in

Speaker 23 1964 case, very famous, New York Times versus Sullivan, which the Trump administration is trying to get overturned and changed, protects news outlets from liability when they publish false statements

Speaker 23 as long as they did not do so knowingly or willingly or with actual malice.

Speaker 23 Supreme Court Justice, again, Thomas and Gorsuch have called for the court to revisit the malice standard for well-known people. If you're not a well-known person,

Speaker 23 you can sue for defamation much easier. Obviously, Palin is super well-known.

Speaker 23 So she came back the second time. It was like in two hours.

Speaker 23 The Times had great lawyers, FYI, and also the person who made the mistakes, James Bennett, who has since left the Times, apologized to Palin on the stand this time and actually cried.

Speaker 23 I know him pretty well.

Speaker 23 I thought it was quite dignified for him to do so, like to apologize like that. I think it probably really helped the case.

Speaker 23 I don't think Ishuat's ever going to win, but I think this is over. This is a last stop for her.
I don't know if she can keep appealing, but any thoughts?

Speaker 7 I think she's just a trivial question at this point.

Speaker 7 She caught this moment of charisma and fire. And then over the course of the last 10 or 12 years, Governor Palin has just revealed herself to not be a serious person.

Speaker 23 I usually do jokes, but go ahead.

Speaker 7 Well,

Speaker 7 and then

Speaker 7 I think this is actually really important because I think this would have inspired a ton of

Speaker 7 the reality is when you're

Speaker 7 one of the key tenets of America that's really wonderful is pretty much anyone can say pretty much anything about pretty much anybody.

Speaker 7 If you if it ends up you know you're spreading misinformation against someone less powerful than you, not famous, and it it creates economic harm or undue stress, then you have a libel or slander case.

Speaker 7 And I think the you know the law mostly gets it right. And they said, in this case, look,

Speaker 7 you are doing, you are such a public figure. You continue to say like kind of, you know, insane things.
People respond. People cover you.
People are, quite frankly, biased against you.

Speaker 7 And they're allowed to be biased against you. And she was unable to prove that.

Speaker 7 Look, to me, this seemed fairly obvious.

Speaker 23 And so. But people were worried about this case and a lot of others, including why George Stephanopoulos, they settled for that thing that he did with Nancy Mace.

Speaker 23 They were, I think there were probably some some sort of text that he was warned several times in that case or something. So there was something there for the reason Disney caved.

Speaker 23 There must have been.

Speaker 23 But I talked to people at Disney, they were worried that it would go to the Supreme Court.

Speaker 23 Like they, everyone's worried about a Times versus Sullivan case getting to the Supreme Court, which it eventually will, because the right is very much intent on cutting back.

Speaker 23 You know, they're trying to get rid of slap laws, they're trying to get, which protects journalists from being, you know, nuisance lawsuits in many states, not every state, which is why they try to sue in places like Texas and other places.

Speaker 23 But they're on the march trying to overturn these things, just like Trump tried to overturn the Civil Rights Act this week.

Speaker 23 Anyway,

Speaker 23 it was good for the New York Times. It was the right decision.
You're right. And lastly, late Zappos co-founder, Tony Shea, did have concrete plans for his $1.2 billion fortune when he died.

Speaker 23 The recently found will, according to the Wall Street Journal, this was interesting. I know Tony very well.
It was a sad end to a lovely person who was quite troubled.

Speaker 23 The document notes that if any family members challenge his wishes, all will receive nothing.

Speaker 23 Marks $3 million for Shea's alma mater, Harvard, and allocates a whole bunch of money to undisclosed recipients he wanted to surprise. He left a lot of post-it notes of things.

Speaker 23 And so he was sort of, he had a real problem,

Speaker 23 really essentially a drug problem at the end of his life. They thought he had died without instructions, but and he really, the last part of his life during COVID was really disturbing, I think.

Speaker 23 So, you know, it's a coda. I'm glad he gave money to Harvard and other places, but it just reminded me of a very sad story of Potecha.

Speaker 7 It is really sad. And it's a,

Speaker 7 I remember being invited. He had created this kind of, for lack of a better term, kind of cool e-commerce hub commune kind of thing.
In Vegas, yeah. In Vegas.
And

Speaker 7 he invited me to speak. They used to do these little gatherings.
And everyone said, oh, you should go. It's a total party.

Speaker 7 And I never went.

Speaker 7 But his is sort of a tragic lesson on if you don't keep some perspective around why people are around you.

Speaker 7 And also he, he made, he's a big boy. He made his own decisions.

Speaker 7 But there's, you know, they say, there's this, I forget the adage, the more famous you become, the lonelier you get is essentially. And he struck me as someone who really struggled with loneliness.

Speaker 7 And when I was with, I met with the head of

Speaker 7 Warner Brothers Film, and I like to, we spitball ideas. And one of my ideas, I think the most, you know, there was that whole raft of big tech.
There was Bad Blood, We Crashed, the one about Uber.

Speaker 7 And I said, the most interesting one hasn't been told. I think the story of Tony Shea is actually the most interesting story.
I would agree.

Speaker 23 That's a great idea. It is interesting.
I mean, I spent a lot of time with Tony and interviewed him many times. He was a gentle soul.
We would have a running joke because he was a hugger.

Speaker 23 He'd always be like, come in. He did this happiness tour, which sort of was a tell.
He was so sad. He needed to have a happiness tour.

Speaker 23 But he's always like, You know, I'm going to hug you. And I said, I'll break your arms if you do.
I did a video, which I would send you, but you wouldn't watch of my tour of their Zappo's office.

Speaker 23 It was a very cult, like, kind of, you know, how

Speaker 23 Japanese companies do calisthenics together and that kind of stuff. He was trying to have this sort of happiness thing.

Speaker 23 And he had a guy who was head of happiness there and would take you through on the tour. And, you know, they'd have all this

Speaker 23 candy happening, a lot of sugar, a lot of like creative stuff in the, in the office with the people, and everyone had their own little teams. It was, I found it, I said, I called it forced fun.

Speaker 23 I was like, I don't want to have any forced fun with people at work.

Speaker 23 And, um, but he, he tried to create these ethos and he did the same thing in Vegas, you know, creating, trying to revive downtown Vegas. And it was, a lot of it was very about much about him.

Speaker 23 And he had this holocracy thing. We wrote about it a bunch in at all at Recode.
He had a whole theory of management.

Speaker 23 And it just was i remember last time i saw him i thought which was he came to code every year and he played he's a very good poker player and he was drinking he had a certain drink he drank a lot of it was not absinthe but it was like that it was something fernet he loved furnette that was it um and um and he was so sad you could tell and was sort of was jocular you know forced forced jocularity and uh but a very gentle soul anyway so um back to me um and i'll relate this to nitrous.

Speaker 7 I love nitrous, and I have terrible dental hygiene. I've come out of the closet as somebody.
I brush my teeth twice a day. That's it.
I think I've flossed maybe six times in my life. I love flossing.

Speaker 7 And it's like, it's literally like social shaming. And I go, and every time I go into the dentist to get my teeth clean, they're like, you know, your gums are a little bit inflamed.

Speaker 7 You really should do this. And I'm like, look, you're going to give me a bunch of shit, a bunch of pics, a bunch of devices.
I'm not going to use any of it. I get my teeth cleaned every three months.

Speaker 7 I want you to turn the nitrous up. I want you to turn on Tom Petty.
I will be back here in three months, but save the fucking speech.

Speaker 23 I don't have good Dell heights. You can fix it if you don't do that.
You need to have like everything. You have to do

Speaker 23 that. Water, the pulsing.
The pulse industrial complex?

Speaker 7 No. If you get your teeth cleaned every three months,

Speaker 7 that helps.

Speaker 23 You're going to have no gums, and I'm going to laugh at your dentures someday. You need to do those things.
You need to have a, I'm sending you a water pick. You need a water pick at least.

Speaker 23 Water picks are great. I do a water pick twice a day.
I love it. It's great.
My gums are excellent. Anyway, let's go on a quick break.
We come back. Enough with a water pick.

Speaker 7 No joke, my son, my youngest son, won't come into our bathroom anymore because I traumatized him by chasing him around with a water pick. Oh, okay.

Speaker 23 Okay.

Speaker 23 It's not a weapon. When we come back, Elon heads back to Tesla, and Scott makes a great prediction.

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Speaker 23 Scott, we're back. Elon says he's shocker of shocker.
Elon says he's scaling back this time at Doge starting in May, claiming his work is mostly done, which means he got nothing done.

Speaker 23 He will instead be allocating more of his time to Tesla. The announcement came in the wake of Tesla's brutal earnings report, with net income falling 71% during the first quarter of 2025.

Speaker 23 In a letter to shareholders, the company referenced changing political sentiment that could have meaningful impact on demand for our products in the near term, you think.

Speaker 23 Tesla's shares were up over 5% following his announcement that he's returning to the company, which is shocking because I think him not returning to the company is probably better for it.

Speaker 23 And as of this recording, it's still up. We've, of course, been calling this for weeks.
Scott, let's listen to what you said back in February.

Speaker 7 Doge and Elon Musk are going to fade away because you can be sure he's doing the math and he's like,

Speaker 7 even if I can get rid of all those pesky regulators, I'm still losing money here because my sales are plummeting because the general public across the U.S., much less Europe, when they see these idiots surrendering to Putin and when they see the type of recklessness and they see that they're not saving any money, all they're doing is making our government less competent.

Speaker 7 You're going to see Tesla sales continue to plummet, Tesla stock continue to go down. And I think he's going to fade into the, he's going to fade back to the corporate sector.

Speaker 23 Boom goes Scott Galloway.

Speaker 23 This is why we won a Webby. This is why.
This is why. So it all came true.

Speaker 23 Obviously,

Speaker 23 besides the shares being up, though, if you look, take apart the report, they would have been drastically non-profitable had it not been for selling emissions things that Trump is trying to get rid of and investments, I think, in Bitcoin or something like that.

Speaker 23 It earned this $595 million. And again, these regulatory credits to other automakers, which are going to be be rolled back, was critical to that.
It wasn't because of cars.

Speaker 23 Do you think the company, let's go for more? Has the company been permanently damaged? And again, I would underscore it's not just the political stuff. They haven't made a great product.

Speaker 23 They made the Cybertruck, which is a dud. And they haven't rolled out great products at other car makers because all other car markets are going up in EVs and hybrids.

Speaker 23 So more than 47% of Americans have a negative view of the company, according to a new CNBC survey.

Speaker 23 And more than 52% have a negative view of Musk. So how do they get out of the brand hole also financially?

Speaker 23 He's touting robo-taxis, which he says will move the financial needle in a significant way, but this is not true. He's got competitors with Waymo.

Speaker 23 He's predicting 1 million units of the Optimus Robots in less than five years. I think Optimus Robots is the cyber truck of the next thing that he's doing.

Speaker 23 So what do you see in the next couple of, let's have some predictions from Scott Galloway on this topic.

Speaker 7 Yeah, but whatever I predict about Tesla tends to be wrong.

Speaker 23 I'm not talking about the stock because I think you were right about, I'm talking about can he pull pull out of this hole? One, can they pull out?

Speaker 23 I think they can't, but I don't, I'd love to know what you think.

Speaker 7 Well, it all comes down to one thing.

Speaker 7 It's very mundane. It's product.
If they come up with a hit product, they're kind of back. The problem is, is that this has become a meme stock.

Speaker 7 And keep in mind, automotive revenue declined 20% year on year, Kara.

Speaker 7 They're now the fastest declining automobile company, I think, in the world.

Speaker 7 I'm having trouble thinking of an automobile company that declined 20% year on year.

Speaker 7 And what is just so fucking cynical about Elon Musk is he goes after, he, you know, parachutes into town with a chainsaw and starts talking about government waste.

Speaker 7 Without government subsidies, this company would have lost money. It's just so incredibly cynical.
It's government largesse and subsidies

Speaker 7 that are the only reason that Tesla kept in, was in the black. And then the thing about Tesla that said that we're not even an automotive company, and if we are

Speaker 7 an automotive company, we're an entirely different type of automotive company, is they could point to the fact that electric cars have much fewer parts, dramatically collapsing the supply chain.

Speaker 7 He milled a lot of his own products, which would increase margin.

Speaker 7 He's technically the most vertical automaker in the world. And also, to Tesla's credit, it's the most American-made car in America, meaning more parts that go into their car are from America.

Speaker 7 And as a result, in 2022,

Speaker 7 Tesla had operating margins of 20%,

Speaker 7 which is staggering. That's double.
That's at least double what the other big automakers report in terms of operating margin.

Speaker 7 But what's happened this year, this quarter, their operating margins have dropped to 2.1%.

Speaker 7 So this is an unprofitable government subsidized. I mean, this is DeLorean.

Speaker 7 This is a company that's riding on government subsidizes.

Speaker 7 Oh, do you remember John DeLorean? So John DeLorean was kind of a man's man in the 70s. I think he came from Chrysler GM and he was considered the best automobile designer.

Speaker 7 He designed the Pontiac GTO and he raised a shit ton of money to start a new automobile company called DeLorean that was famously portrayed in Back to the Future.

Speaker 7 And he got huge subsidies from the United Kingdom to say the United Kingdom said, all right, we're going to give this company enormous subsidies to try and re-inspire manufacturing domestically, similar to a tariff.

Speaker 7 And then the car was kind of underpowered and just didn't have any consumer reception. And then this photo came out of, I think it was a warehouse in Ireland showing thousands of

Speaker 7 DeLoreans just sitting there. He was on the ropes.
The UK said no more subsidies. It was not selling.
And basically they set up a sting, the U.S. government, to try and entrap him.

Speaker 7 And they did, and gave him the opportunity and seduced a guy, in my opinion, unfairly, who was desperate to pull his company out of this tailspin.

Speaker 7 And he agreed to finance or take part in what was ultimately a cocaine trade. And he was arrested on the spot.

Speaker 7 I believe he served some time and then he converted to Christianity. And, you know,

Speaker 7 he was the, you want to talk about a fall from grace? He was also married to one of the most beautiful women in a big model at the time, the Christina Ferrara, I think her name was.

Speaker 7 But he was an American icon that really fell from grace. And there's a couple, I mean, a lot of life lessons here, but more specifically, cars are almost impossible to make on a single platform.

Speaker 7 Rivian, which is an amazing car, if you buy one for 80 grand, it's costing them 120 grand. It's all about scale.
And when the sales of Tesla go down,

Speaker 7 it's an especially big hit to earnings because this is a business all about scale. And when you start descaling, your profits are the tail of the whip.

Speaker 7 But it's insane that this company and the stock went up.

Speaker 23 That's what I don't get. Well, because they think, you know, it's a meme stock.
Like it's never, here's the problem. He has been warned by his own employees about the cyber truck.

Speaker 23 He was warned about variety, you know, different things where they warned. The other thing is, as we talked about last week,

Speaker 23 rolling odometers faster, all stuff like that, saying we're going to, like, I think this week he said he was, he keeps going on and on about self-driving that it's not, he is nowhere near, he's been bragging, as you noted, you put the list of things he's told untruths about, or just, well, he's dreaming.

Speaker 23 I'll say his his dreams of what's going to happen.

Speaker 23 And so, if he's got to deliver and not promise, and the same thing with Doge, two trillion or one, two, two trillion, not one trillion, two trillion, I'm going to save. And then

Speaker 23 they can say $160 billion. And even that, David Fahrenhold has taken apart.

Speaker 23 He probably has cost the government more through this Doge thing than he has created.

Speaker 23 What he's done is he's destroyed things the right wing wants destroyed, like USAID or the regulators that are against him.

Speaker 23 He's not done any significant changes to the way the government works, which, you know, and again, as we both pointed out, maybe the government works a lot better than you think.

Speaker 23 There's fewer government officials. Evan Spiegel was pointing this out.
There's fewer government workers than there were 20 years ago. And there's just more regulations, that's for sure.

Speaker 23 But he just hasn't, this is like, he has now become an over-promiser, an under-deliverer. And that's what he's doing here with these ridiculous talking about the Robo-Taxi.
Let me just,

Speaker 23 Uber has $12 billion in revenue. That's it.
That's far from a trillion-dollar business. The second one, Optimus Robots.

Speaker 23 Are you going to buy an Optimus robot, Scott? I don't know. Are you? Like a million units?

Speaker 7 This is okay. These guys are geniuses in saying that we have to put something out there in the future that's exciting and exotic.

Speaker 23 Love it.

Speaker 7 They will never have to deliver up to that people can at least fill their dreams and somewhat justify such that I can have Kathy Wood say there's going to be a billion robots and justify my irrational valuation.

Speaker 7 By the way, just I need to correct this. He was found, DeLorean was found not guilty.
And I just want to go back to this for a second.

Speaker 7 In 82, he was charged with cocaine trafficking after FBI informant James Hoffman solicited him as a financier in a scheme to sell 220 pounds. It was total entrapment.
At the time,

Speaker 7 you know, Tesla, or sorry, DeLorean was on the verge of bankruptcy.

Speaker 7 And a guy approaches you who's a federal agent and says, I have a way for you to make a lot of money if you finance, if you sell 200 pounds of cocaine. And he said, yes.

Speaker 7 And then they try and charge him. I mean, you want to talk about government overreach.
And then, anyways, but I don't, I'm sorry, back to Tesla. The robots, give me a fucking break.
I mean, come on.

Speaker 7 That is even more pie in the sky than a million self-driving Tesla taxis. That is just insane.
And by the way, the robots they featured at that big event were being controlled by people 50 feet away.

Speaker 23 Self-driving. Same thing with the self-driving.

Speaker 7 So you want to talk about Jazz hands.

Speaker 7 But people are excited that he's back and focused on Tesla. So good for them.
I have learned to stay away from this stock, but this is a company now that is underperforming Ford Motor by

Speaker 7 a long shot and yet trades at 70 times earnings and Ford trades at whatever 10. So

Speaker 23 also

Speaker 23 I got to tell you,

Speaker 23 he did the Cybertruck, guys. He did the cyber truck.
And it's talk about a disastrous car and the costs.

Speaker 23 When he could have been doing smaller cars, the way they were doing them in Japan, adorable ones, I bet they would have done a great job at those. Like, and all the different, there's ones in Japan.

Speaker 23 There's ones in China. Instead, he had to do his ridiculous.
I have a small penis cyber truck. And this is where we are.
We'll see what he does. We'll see.
Interesting to see if one last thing.

Speaker 23 Steve Bannon, who was at this conference I was at yesterday, was noting.

Speaker 23 and I can't believe I agree with Steve Bannon on many things, but he said, we need an absolute detailed list of the fraud he found, a detailed and checked independently list of the fraud he found, and a detailed list of any data that he has touched so that we know if he took it anywhere.

Speaker 23 Like these two things, like the data they've been collecting and coalescing around in a certain,

Speaker 23 what have these people done with the data?

Speaker 23 Steve Bannon is correct about this because it's going to show that very very little was saved and we have to have an independent assessment, which we're not going to have until the end of the Trump administration.

Speaker 23 But, you know, I would agree with that. And we're not going to get that, but that's, that's, we'll see.

Speaker 23 We don't know what's going to happen to this stock because people have a thing with this guy, but he's definitely on a downward plunge, I think.

Speaker 7 Well, let's talk a little bit about Doge. He's claimed on stage he was going to find $2 trillion in savings.

Speaker 7 He's claimed $150 billion, which is obviously a lot less than $2 trillion. And so far, it looks as if it's approximately,

Speaker 7 they claim, now they're saying $150 billion. It looks like it's more like $60 billion, and they can't even validate or confirm those savings.

Speaker 7 If you were to look at this as an audit of a $7 trillion company, the fact that they have gone in with full license and what I'll call incredible adjectives and embellishments and exaggerations around quote-unquote fraud and waste, the U.S.

Speaker 7 government has come out with literally the cleanest bill of health of any organization that would undergo this type of reckless audit.

Speaker 7 The people, the auditors weren't there to give them a clean bill of health. The auditors were there to try and make them look stupid and exaggerate inefficiency.

Speaker 23 And get rid of certain things, as I noted. Yeah.

Speaker 7 And every time they think they found something, or not every time, but most of the time they think they found fraud, waste, or inefficiency, and they posted it,

Speaker 7 someone did a little bit of research on Google and said, actually, that's not accurate. You're exaggerating the savings or the waste or the fraud here.

Speaker 7 And by the way, I don't think there's been a single case where they've said there's fraud here and

Speaker 7 we're charging these people.

Speaker 7 So what entity, what organization in the world could you have this type of biased, aggressive, unbridled audit that's doing $700 billion a year in sales, much less $7 trillion, and get this clean bill of health?

Speaker 23 Although I don't even think they did a very good job. Like who knows what's there?

Speaker 23 I'm certain there's fraud all over the place, Medicaid and everything else, but they didn't. Like now do the Pentagon.

Speaker 23 And a lot of this spending, we can't, it's already, it's stuff we can't touch. And that's the real problem, whether it's Medicare, whether it's defense spending.

Speaker 23 There's certain stuff that can't be touched, Social Security. And it's a bigger problem of, listen, at the heart, we shouldn't have these deficits, these enormous deficits.
We overspend.

Speaker 23 We have too many regulations. And that's a really good thing to attack.
But this has just been a ridiculous jazz hands.

Speaker 7 This was nothing but a weapon of mass destruction. If the U.S.
was a household, it makes $50,000 a year, it spends $70,000,

Speaker 7 and it has household debt of $370,000. And the bad news is that all of the kids in that house are going to have to inherit that debt even after mom and dad die.

Speaker 7 And we don't want to have an adult conversation. The adult conversation is the following.

Speaker 23 It's a chainsaw.

Speaker 7 If you believe that fiscal responsibility means not spending $7 trillion and $5 trillion in tax revenue, all roads lead to the same place, folks.

Speaker 7 You either have to cut costs or cut spending, or you have to raise taxes. And if you want to cut spending, you have to go after one or all of three areas.

Speaker 7 And that's either entitlements, Social Security, Medicare, Medicaid, defense spending, or

Speaker 7 the interest rate, the interest on our debt. Those are the three.

Speaker 7 If you don't go after one or all of those things, you're not serious about cutting.

Speaker 7 our expenses or you have to acknowledge that the wealthiest in our society have figured out a way to weaponize the tax tax code and have an alternative minimum tax.

Speaker 7 The majority of very wealthy people pay very little in tax relative to their income or increase corporate taxes. And what's the answer, folks?

Speaker 23 All of the fucking above. Yeah, but you're not going to do.

Speaker 23 They talked about it this week, Trump people, and then they just have been indicating no taxes on rich people.

Speaker 7 When we interviewed leader Jeffries, I think there's an opportunity for the Democrats to say, we're the adults in the room. We're going to have to means test Social Security,

Speaker 7 move the age up. People like Kara Swisher and Scott Galloway should not get Social Security.
It's called a Social Security tax, meaning you pay into it, it might not get it back.

Speaker 7 It's for the better common good. It's not called the Social Security Pension Fund.
We are going to have to figure out a way to get our medical costs from $13,000 a person down to $6,500.

Speaker 7 We're going to do that by lowering the age eligibility of Medicaid and Medicare, which do a great job until we have nationalized health care.

Speaker 7 And we're going to have to cut military spending at some point or make it more efficient.

Speaker 7 And we're going to have to announce that we are going to put $40 billion a year, $7,000 a year in every baby's 401k, that they don't have access to their 65, and announce that we are doing away with all Social Security in 65 years.

Speaker 7 And then in 30 years, interest rates will come down as people see a light at the end of the tunnel. We'll get to do away with this $1.3 trillion and growing tax on young people.

Speaker 23 But nobody wants to have a full-time. Halloway is running for president.
That's a really nice, I like all that, Scott.

Speaker 7 But the Democrats have an opportunity here because the reality is the swing voters in every election that determines the president, it's not based on transgender transgender rights.

Speaker 7 It's not based on Ukraine. As much as, as important as those issues are, they don't swing elections.

Speaker 7 What swings elections is people in their 30s who are moderates who basically vote on who they think will give them the best prospects to establish economic security and have a reasonable life.

Speaker 7 And it swings back and forth. It's a swing issue.
And over the last 40 years, Democratic administrations have created 40 million jobs. Republicans have created 1 million.

Speaker 7 Democrats need to seize we're the adults in the room. We have to have an honest, hard hard conversation around our deficits and our fiscal and monetary policy because this is not sustainable.

Speaker 7 And you know what? People will respect it. And then when I ask leader Jeffries, what they say is, well, at some point we're going to have that conversation.

Speaker 7 At some point, tomorrow needs to be today.

Speaker 7 I think citizens are ready for this conversation.

Speaker 23 Yep, I agree. I think you need to run for president, as Ed said.
Apparently, Ed was telling you you should run for president. That's not so very good.

Speaker 23 You should be more involved in politics, Scott. I think you should.
Anyway, by the way, Tesla, we think is in the grapper.

Speaker 7 By the way, I just want to acknowledge. I've been doing research.
You blew my mind with the notion of a combined Tesla, XAI, and SpaceX.

Speaker 7 And I'm just like, that has totally blown my mind about it.

Speaker 23 As long as you attribute it to me, just attribute it.

Speaker 7 I do. But the idea of him merging all of those companies, like I can't wrap my head around what that would be.

Speaker 23 He's got to.

Speaker 23 It's the only move. And he would do it.
That's the two things.

Speaker 23 Knowing him, I don't know him well anymore, but knowing him as I had known him, and it's the move. It's the jazz handsome move of all time.
It'll be loud, noisy. It'll be, what a genius.

Speaker 23 Here's the last thing I'm going to say about this. All you people that were like slathering like over Elon when he was visiting Congress and pretending, we all love Doge.
You don't all love Doge.

Speaker 23 You just,

Speaker 23 you are, the Republicans should be embarrassed for all the, all the cassassery they did to this guy and what he was doing and

Speaker 23 abrogating their responsibilities as legislators. Just handing it over to this guy and saying, you fix it was the most irresponsible thing.
And someday there is going to be a reckoning at some point.

Speaker 23 And you are not going to be looking,

Speaker 23 you've not bathed yourself in any kind of glory. You've bathed yourself in embarrassment and suckuppery.
And so that to me is really

Speaker 23 the lesson here. We'll see where it goes.
But I see why Donald Trump did it. The rest of you are grotesque.
So is Donald Trump.

Speaker 23 But anyway, I'll note alphabet earnings earnings are coming after we record, so we don't know what's going to happen and or anything they might say about the case that they've both cased they've lost.

Speaker 23 But we'll discuss next week because they're really at a crossroads. Google certainly is.

Speaker 23 All right, Scott, let's go on a quick break. When we come back, we'll talk about Trump trying to calm the markets down after his own comments created chaos.

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Speaker 23 Scott, we're back. It's another whiplash week on Wall Street.

Speaker 23 President Trump's attacks on the Fed chair Jerome Powell, calling him a major loser and criticizing his policies, rattled the market earlier this week, triggering a major sell-off of stocks and bonds.

Speaker 23 Trump later said he had no intention of firing Powell. By the way, he can't.
It's very hard to do so, so it doesn't matter what he thinks. He also indicated some easing of tariff tension with China.

Speaker 23 But as of Thursday morning, China is calling any reports of tariff talks, quote, baseless rumors directly aimed at Trump there, sending the Dow down briefly, although the SP 500 has been staying steady.

Speaker 23 Once the, again, the markets seem to have spooked Trump

Speaker 23 as they should.

Speaker 23 He met with CEOs of Target, Walmart, and Home Depot on Monday. It was interesting Amazon wasn't there, but who reportedly warned about tariffs leading to price surges and empty shells within weeks.

Speaker 23 A dozen states also sued to block Trump's tariff, arguing he doesn't have the authority to impose them. Even though he says he's not firing Powell, he's been undermining him.
He's trying to blame.

Speaker 23 He's going to blame him for all this with the attacks. He continues to act like he has some sort of control over this.

Speaker 23 Let's talk about that for a minute. Well, actually, let me go through everything.

Speaker 23 And with China, Trump said this week that tariffs on Chinese goods will come down substantially, but won't be zero, and that the U.S., they weren't before. And the U.S.

Speaker 23 and China are actively talking, which I said China denies.

Speaker 23 One White House senior official told the Wall Street Journal that China tariffs would likely get reduced any roughly between 50 and 65 percent. Another Trump blink seems imminent.

Speaker 23 Again, Scott Bessant and Elon Musk got in a fight. I think it's sort of in our rearview mirror.
Scott Bessant won with the IRS pick. This kind of chaos is just insane, it seems.

Speaker 23 Like he's just shooting himself in the foot over and over again and then pretending, declaring victory when he goes back on the stupid thing he did.

Speaker 23 Let's hear what you think about this, Scott Galloway.

Speaker 7 Well, the only two things you have to remember in a negotiation are not to make it emotional, emotional, not to have it be a win-lose,

Speaker 7 and to always show a credible willingness to walk away.

Speaker 7 This guy gets an F on each of those. He's insulted them.
His vice president has called them peasants. He makes it emotional.
He pisses off. People are human.

Speaker 7 If I'm a Canadian, I don't want to work with you. I'm willing to sacrifice my own economic prosperity.

Speaker 23 Travel's down. Everything's down.

Speaker 7 You want to talk about, and I was thinking about it today. Bill Ackman, on an unrelated note, Bill Ackman came out with this tweet that sent Hertz stock up 100%.

Speaker 7 And he said he'd been aggregating a stake for a long time. And he said that because of these tariffs, the value of Hertz's automobile fleet is

Speaker 7 a $14 billion fleet or $12 billion fleet.

Speaker 7 The cost of cars is going to go up so much because of these tariffs that it's an underappreciated asset in the sense that their Hertz fleet is now worth $1.2 billion more.

Speaker 7 And I'm like, this is the ultimate interpretive dance. Because one, that's like saying my liver and my lungs are more valuable than they are to me.
Well, I'm sort of fond of them.

Speaker 7 Like, how are you going to harvest unless Hertz announces it's selling its auto fleet, which they're not going to.

Speaker 23 Well, they sell some of it.

Speaker 23 They do have a division that sells cars. Yeah, but they have a division that buys cars.
Yes, that's correct.

Speaker 7 So it should be a net neutral. right actually a net negative because new cars will be more those costs will be more than the increase in the value of the used cars you sell.

Speaker 7 And then the countervailing force of this, what I'll call gymnastics, an interpretive dance to try and turn chicken shit into chicken salad is that the majority of the automobile rental market is based on tourism.

Speaker 7 And tourism is absolutely crashing. And let's just talk about reality here as we're trying to boost the manufacturing sector that employs 11 million people.

Speaker 7 Has anyone noticed while we were sleeping that tourism is fucking crashing and also employs 12 million people?

Speaker 7 So all of this interpretive dance around these sycophants trying to either pump a stock they have an activist

Speaker 7 position in or trying to claim that this guy's playing 4D chess just can't look at data.

Speaker 23 And

Speaker 7 also,

Speaker 7 back to Trump.

Speaker 23 He's been very emotional. He's not turned on Blackman the way I had.
But go ahead. He's been, well, it's hot.

Speaker 7 I mean, it's like, I would describe the day he announced that as, remember when you go to interpretive dance, you look at modern art and you're like, oh, you don't want, you want to be cool and you want to say, oh, it's beautiful.

Speaker 7 And then you look at the next person, you're like, this makes no fucking sense. I mean, this is his announcement that they have this undervalued asset is really modern art/slash interpretive.

Speaker 23 Also, may I note? They have a lot of Teslas that nobody wants to rent. They did this whole member.

Speaker 23 They have tons of Teslas that they rented.

Speaker 7 When's the last time you rent? It's a shitty business in structural detail.

Speaker 23 But I'm just saying they have a high level. It's a big whack deal.
Every time they try to give me one, I'm like, no, I shall not. And apparently, nobody wants to rent a Tesla.

Speaker 7 Anyways, it speaks to his brand, to Bill Ackman's brand, that he puts out a tweet of an insane thesis that makes no sense if you actually look at the data. So thirsty.
Well, the stock doubled.

Speaker 7 You got to give it to him. The guy's brand

Speaker 7 clearly still means something in the market. But back to Trump.

Speaker 7 Highly emotional, creating enemies and agitative where he doesn't need to, that will only reduce our negotiating leverage when people will put their own ego now, like him, ahead of actual prosperity and fidelity to their stakeholders and to citizens and to their economy.

Speaker 7 And two, a credible willingness to walk away. He imposes 145% tariff and then hours later says that the tariffs on Chinese goods will come down substantially, but won't be zero.

Speaker 7 Then why the fuck did you go to 145%?

Speaker 7 This guy has, he is competing against people who are willing to starve millions of their own people. And he thinks he's going to intimidate them with 145.
I meant, no, but they're going to come down.

Speaker 7 They're going to do, do, you're about, we're about to enter the stage where they try to figure out a way to basically somehow put lipstick on a pig here and call victory and stop all this nonsense.

Speaker 7 The tariffs are going to be remarkably similar to what they did, what they were before all of this nonsense.

Speaker 7 But you're going to have all these people trying to spin how it's some sort of great victory.

Speaker 23 The deals. They're coming to me for deals.
They're trying to kiss my ass, that whole thing.

Speaker 7 And all we have done here, sad, pathetic. All we have done here is massively erode brand America.

Speaker 7 It's gone from freedom, generosity, military might, prosperity, risk aggressiveness, opportunity, rule of law, to toxic uncertainty. And that brand does not command margins.

Speaker 7 It commands negative margins.

Speaker 23 So, what does he do? Okay, you look.

Speaker 23 First of all, Besson's trying to affect him, obviously, and he seems to have gained a bit of an upper hand against the two clowns, the clown show of Howard, whatever his name is, and Elon. And

Speaker 23 there was an altercation, a very loud altercation between Bessett and Musk over an IRS head, which the Treasury Secretary should pick FYI, not Elon Musk.

Speaker 23 He was trying to pick a sycophant to take over the IRS, where our money comes from.

Speaker 23 And what would you do if you were Bessett right now? Like what

Speaker 23 besides leave, like immediately? What would you do?

Speaker 7 Well, he's kind of already done it. He clearly leaked

Speaker 7 that interaction and he's saying, I'm on top and I've had it with this guy.

Speaker 7 Trump is scared.

Speaker 7 He's seen as, Besant is seen as like a sycophant, but is potentially the guy in the Oval Office that will take stuff off his desk so he doesn't even see it, that he is sort of an adult in the room.

Speaker 7 He has a reputation versus Luttnick that's just considered

Speaker 7 a clown that is now engaged in full-scale corruption with his son starting a crypto company. Jesus Christ.

Speaker 23 I know the crypto stuff.

Speaker 7 Just when you thought thought this couldn't get any more corrupt, Bissett is seen as a very credible guy and behind the scenes is basically saying, okay, I'm going to do my best here.

Speaker 7 I know this is fucking batshit crazy. This is, we know where this goes.
Blink, blink, blink.

Speaker 7 Try and run Vaseline over the lens of incompetence here and pretend this is a victory.

Speaker 23 I never made this mistake and I'm not.

Speaker 7 The tariffs are going to be, look remarkably similar to where they were before. And all that's happened is we have eroded our image around the world to the detriment of what would you do?

Speaker 23 You're sitting in the Oval Office, he has you in, you, for some reason, go, and he's listening to you. What would you say to Trump to do right now?

Speaker 7 If he would listen to me,

Speaker 7 I would immediately, I would pretend to have discussions, declare victory and leave.

Speaker 7 Just like literally find a country that's willing to do something for you, come up with a bunch of fake reasons for why this was anything but what it was, which was insanely damaging, and literally get back to the economy and try and repair as many of our alliances as possible and

Speaker 7 go on the mother of all behind-the-scenes apology tours because this is going to start showing up in earnings calls. I think China might say, oh, you want to go back to where we were? Fuck you.

Speaker 7 You've been out banging hookers and doing blow and ignoring our children. Now you've decided you want to be married again.
Sorry, boss.

Speaker 7 Sorry. I'll be at my sister's.

Speaker 23 That's a nice metaphor. Isn't it? Yeah.
Anyways, speaking for a friend, speaking for a friend, I think, I don't know.

Speaker 23 I think the Chinese and the and the Europeans are now like, huh, what a life without these obnoxious Americans.

Speaker 23 100%.

Speaker 23 Like, hey, I think a divorce sounds great. Like, I'm sure that's what they're thinking.
Do you know what I mean?

Speaker 7 My tennis bro is texting me.

Speaker 23 Wait a minute. Just a minute here.
My tennis bro is.

Speaker 23 My friends are going to St.

Speaker 7 Bart's. That sounds pretty good.

Speaker 23 He needs to. Ugh, what an idiot.
What a fucking idiot. I mean, the thing is, if he did a couple of things, all his stupid followers would, would like clap, clap, like the same thing.

Speaker 7 Yeah, they'll, they'll, they'll pretend that it was genius and 40 chess. So move to that part of the program as soon as possible.
You, you, I mean, you, you literally have to put the fire out here.

Speaker 7 You have to put the fire out. But I don't know if he's.
He won.

Speaker 23 He wants the 10. He's been listening to Wall Street.
Wall Street is the one that speaks with the.

Speaker 7 The adult in the room is the tenure. We've been saying that.

Speaker 7 Look, I don't, I'm glad Besenta's there, but I do think the raft of them, I think we're about, I think we're on the cusp of a few of them being fired.

Speaker 23 Yeah, because he's going to go.

Speaker 7 What a thirsty

Speaker 7 most of them should go, but I think he's going to try and blame a lot of this on incompetence and saying, you know, I got some bad information. These folks did the wrong thing.
I've moved them out.

Speaker 7 He's going to, he's going to throw a bunch of them as a, as a, you know, into the volcano, if you will. Right.

Speaker 23 Yeah.

Speaker 23 Yeah. But they're certainly not going to tax the rich.

Speaker 7 Look, a step back from the wrong direction is a step in the right direction.

Speaker 7 So if you were really, if you were really advising the guy, you'd say as elegantly, as gracefully, and as respectfully as possible, you need to stop this shit really, really quickly.

Speaker 7 And behind the scenes, say, call Prime Minister Carney and say, congratulations. And by the way, you're a fantastic friend.
A lot of this was posturing. I want to apologize to you personally.

Speaker 7 What can we do? This makes this better for both of us.

Speaker 23 All he needs is affirmation. It's so sad.
It's such a sad, sad state at this age in his life that this is all he needs. But here we are.
Anyway, Scott, one more quick break.

Speaker 23 We'll be back for predictions.

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Speaker 23 Okay, Scott, let's hear our predictions. You've kind of let loose a few during the show here.
Pick up the

Speaker 23 good ones. I hope that.

Speaker 7 This is always dangerous, but I'm going to do it anyways. Alphabet's reporting.
We're talking on Thursday. Alphabet's reporting at the end of the day.

Speaker 7 And I think rumors of Alphabet's struggles have been greatly exaggerated.

Speaker 7 I still think while ChatGPT is ascending dramatically and presents, does present an existential threat to search, YouTube is just an absolute juggernaut.

Speaker 7 And you talk about Waymo. I just think this company is so well run

Speaker 7 and Google continues to be the largest toll booth in the history of mankind. I think that they're going to beat and

Speaker 7 I think they're going to have, I think they're going to beat expectations this afternoon because I think some of those expectations have been beaten down.

Speaker 7 And then another one, I think in the next 12 to 24 months, we're going to see a spin prophylactically in big tech for the first time.

Speaker 23 And then I'll pick one. Pick one.
I'm going to pick. We'll each pick one.
I say YouTube. Well, maybe the advertising.
I think it's the ad business. Ad business, you're right.

Speaker 7 I'm sorry.

Speaker 23 We would like YouTube, but it's probably the ad business.

Speaker 7 And then the most interesting one, and this is, I'm putting words in your mouth or taking your words, and I will credit you.

Speaker 7 Tesla right now has,

Speaker 7 I think it's like a $750 billion market cap, right?

Speaker 7 And when you think about if you, when you're essentially when you're doing acquisitions or mergers, you want to do them when your stock, it's

Speaker 7 $806 billion.

Speaker 7 You want to do mergers when you have a really strong valuation because you end up, Steve Case sold AOL when he knew there was no way it was going to be worth a fraction of that in a matter of months or years.

Speaker 7 So that's when you sell your company. The problem is no one will buy Tesla for $805 billion

Speaker 7 except XAI,

Speaker 7 right, or SpaceX.

Speaker 7 And so your idea is so interesting because what he could try to do is say, okay, jazz hands will only last so long. At some point, people start saying, okay, enough is enough here, folks.

Speaker 7 That $800 billion market cap is going to come way down.

Speaker 7 So the idea of taking a large revenue base, which you get from an automobile company, putting on top of it the impression and the valuation of AI with the data set of X

Speaker 7 and also maybe some of the gross and RIS and unbelievable coolness of SpaceX, which would, that would be a lot. Maybe it keeps that independent.

Speaker 7 But I think your idea is really insightful, that the way to maintain that ridiculous $800 billion valuation is to cash it in now and he'll have maintain a huge stake and potentially do kind of

Speaker 7 one that's going to 0.5 plus one plus one equals four or five. I think you're right.
I think there's going to be, I think Tesla is going to be folded in to a

Speaker 23 merged or an AI company that makes robots.

Speaker 7 Yeah, I just,

Speaker 7 I love that because when you said it, the moment you said it, I thought, oh, that would be really fucking smart from a shareholder perspective. Yeah, it makes sense.

Speaker 23 It's also like him. It's very like him.
He's hiding it. Very bold.

Speaker 7 And he has control of his board. Right.

Speaker 23 Yeah.

Speaker 7 He doesn't care. He'll tell the board this is what we're doing.
Yeah. He's not scared of shareholder lawsuits.

Speaker 23 I wonder if he'll take it private then. There's not a lot of revenue in any of these things.

Speaker 7 Can't take it private. No one will fund it.

Speaker 23 Yeah, no one will think it's a lot of revenue. Well, you know,

Speaker 23 I don't think the Starlink part, I mean, the SpaceX is part of it.

Speaker 23 They don't, my guess,

Speaker 23 they don't make that much money. They probably,

Speaker 23 and they've been hurt themselves, but I think they're very expensive to run that thing. And

Speaker 23 I'd love to actual see the numbers from that. If someone wants to send them to me, I'd love to see them.
I don't think they're wildly profitable by any stretch of the imagination, but, you know.

Speaker 7 And finally, Kara, the prediction,

Speaker 7 the geopolitical prediction.

Speaker 7 So Donald Trump is having a huge impact globally, including what leaders are elected or not elected, but it wasn't the impact he thought he was going to have in the Canadian elections for

Speaker 7 prime minister. My prediction is that Mark Carney of the Liberal Party is going to prevail, and that is after overcoming a 25-point deficit coming into the year.

Speaker 7 And why is the Liberal Party going to prevail here?

Speaker 7 Donald Trump, he has so pissed off Canada and the Conservative Party nominee for prime minister is aligned with Trump and considered a more Trumpian candidate. And boy, has Canada turned off Trump.

Speaker 7 So in sum, Trump has elected, in my opinion, or will elect

Speaker 7 Prime Minister Mark Carney of the Liberal Party and has swung the Canadian elections 25 points

Speaker 7 because of how repellent they find Donald Trump and the Conservative Party has been contaminated by Trump.

Speaker 7 So he is getting world leaders elected, just not the world leaders that everyone had anticipated or certainly not the ones he had hoped for.

Speaker 7 In sum, I think the underdog here, Mark Carney is about to be the next Prime Minister of Canada solely because of the unpopularity of our American president.

Speaker 23 Do you you have a prediction? I don't. I don't.
I predict I'm going to go to White House correspondent dinner parties this weekend.

Speaker 7 Oh, I was going to go, but I'm not in town. Why not? I got asked by a friend of yours to be their date, and I was really excited.

Speaker 7 She's much, she's totally cool.

Speaker 23 I won't say who it is, but a friend of mine asked you for a while. Oh, a friend of ours.
Oh, okay. Oh, yeah.
You should have. Oh, I know who it is.

Speaker 23 You should have come. Emily Radikowski.
Just saying. It's not Emily.

Speaker 23 Yeah, there's a bunch. There's every single meeting comes.
Like, Axios is having something, Substack. It looks like so much fun.

Speaker 7 Substack fun.

Speaker 23 You've been, right?

Speaker 23 The parties are fun.

Speaker 23 I hate to say it.

Speaker 23 Parties are fun. I love to go.
I don't go to the event itself ever, but there's like NBCs having a party after the French Embassy. Ooh, the NBC party.
No, it's fun. It's fun.
I'm telling you.

Speaker 23 I love that French embassy.

Speaker 23 It's so ridiculous. It's so like end times kind of partying kind of stuff.

Speaker 7 The NBC party. Will David Hasselhoff or

Speaker 7 Courtney Cox be there? I was wrong. I don't want to go.
You literally said nothing that sounds remote.

Speaker 23 Let me think. Oh, UTA has a really cool party.
It's really fun.

Speaker 7 Oh, I had that. You just take erythromyosin.
Oh, wait, I'm sorry.

Speaker 23 UTA? No, they're fun. They're fun.
They're fun parties. They are indeed fun parties.
And my friend Tammy had it, has the famous White House correspondence in her brunch.

Speaker 7 I'm convinced Tammy's running the CIA.

Speaker 7 She's so quiet, and then she'll pop up and be like,

Speaker 7 the president of Gabon wants to meet with you to talk about a shipping lane deal. And I'm like, what the fuck? Who is this woman?

Speaker 23 She has a famous brunch that's really fun. That's really fun.

Speaker 7 Where did she get all her power?

Speaker 23 She's everywhere. She's everywhere.
She's a fucking.

Speaker 7 I literally, I couldn't get into it, I couldn't get my visa done. I couldn't get my passport.
It's like, give me five minutes.

Speaker 7 And all of a sudden, like the ambassador to Britain is calling me and sending me a car with my passport.

Speaker 7 It's like, who is this woman?

Speaker 23 Tammy Haddett is the queen of White House Correspondence Weekend. She is.

Speaker 7 She's Michael Clayton. She's a total fixer.

Speaker 23 Seriously. She's also lovely.
May I say she brings the best

Speaker 23 toys and went to Pitt. Went to the University of Shelley.
She did. She's from Pittsburgh.
She was in Pittsburgh this weekend. She's the best.
We love that Tammy Hadded. Anyway,

Speaker 23 so I wish you were here. We'd have a good time.

Speaker 7 I met Tammy Hadded before I met you. We were doing a conference together.
I don't think I'd ever met you, or I'd met you for a podcast, but we went to

Speaker 7 South by Southwest, but I showed up and this woman came up to me and she was so nice and saw in my face. I'm like, who is this very friendly woman? And I said, and I saw, I saw, it was so adorable.

Speaker 7 In the back, it was in the makeup room. There was this little adorable boy asleep on the couch.
And I'm like, I should probably pregame with Kara. And they go, where is she?

Speaker 7 And she goes, and then they pointed to the little boy. You were sleeping on the couch.
You look like a nine-year-old boy. It was so loud.
I'm like, she can sleep here? I can't.

Speaker 7 And that was one of my first images of you where you were just on a couch sleeping with hundreds of people around you. I love to sleep.

Speaker 23 Like grabbing sleep. You're such a good sleeper.

Speaker 7 You're like Winston Churchill.

Speaker 23 I can sleep anywhere. It's so true.
Anyway, Tammy, that's great. And

Speaker 23 she's very tall and she's got this great shock of white hair. And she's fantastic.
She's a fantastic lady. Anyway, Tammy, good luck this weekend.
I will see you at the party. We want to hear from you.

Speaker 23 Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 85551Pivot.

Speaker 23 Elsewhere in the Scott and Carrie universe, this week on Prof G Markets, Scott, who's on a tear, spoke with Ryan Peterson, the founder and CEO of Flexport, who was the, he replaced someone that he brought in from Amazon.

Speaker 23 It's a leader in global supply chain management about the impact of tariffs. What a great person to tap.
Let's listen.

Speaker 62 If they don't change anything and this 145% duty sticks on China, it'll take out like mass bankruptcies. You're talking like 80% of small business that buys from China will just die.

Speaker 62 And millions of employees will go, you know, we'll be unemployed. I mean, it's sort of why I'm like, they obviously have to back off the trade.
Like, that can't be that they just do that.

Speaker 62 I don't believe that they're that crazy.

Speaker 23 That's a great idea to do an interview there, Scott.

Speaker 7 That's great. I love supply chain stuff.
I invested one of my best investments of the last few years was I invested in a company called Zero 100, which was supply chain research.

Speaker 7 I think if you look at everything.

Speaker 23 Dull investments. That's where you make your big bucks, isn't it? Dollish.

Speaker 7 Quick lesson. Quick lesson.
When you're thinking about how to allocate and invest your most precious assets, your financial capital and even more precious, your human capital, it's very easy.

Speaker 7 ROI on the X side of the scale, sex appeal on the X axis, it essentially, the sexier the business, the lower the ROI.

Speaker 7 If someone wants you to invest in a members club downtown for artists and creatives, join the club. Do not invest.

Speaker 7 If someone wants you to invest in software as a service for scheduling healthcare maintenance workers, if it sounds so fucking awful you wouldn't want to work there, that's where you write a check.

Speaker 7 Because anything that's sexy is overinvested, which drives down returns. The less sexy, the more return on your invested capital.
Also, think about that in terms of your career.

Speaker 7 If you're going for something sexy, you better get bright green lights that you're in the top 1%. Otherwise, find something boring.

Speaker 7 And this is what creates passion, mastery, artisanship, and be able to take care of your kids and your parents.

Speaker 23 I love that, Scott. So don't invest in Scott Gallery because he's dead sexy.
Hello, ladies. Okay, that's the show.

Speaker 23 Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel. We'll be back next week.
Scott, read us out.

Speaker 7 Today's show was produced by Larry Names, Doe Marcus, and and Taylor Griffin. Ernie Inner Todd engineered this episode.
Jim Mackle edited the video. Thanks also to Jude Burrows, Ms.

Speaker 42 Severo, and Dan Shallon.

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Speaker 7 You can subscribe to the magazine at nmymag.com/slash pod. We'll be back next week for another breakdown of all things tech and business.

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