Amazon might acquire AMC theaters and Friend of Pivot Stephanie Ruhle on business, CARES Act, wins and fails

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Kara Swisher: Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Kara Swisher.

Scott Galloway: And I'm Scott Galloway.

Kara Swisher: Kara, do you know you predicted something on Friday that looks like it's coming true? You said that Disney would be acquiring movie chains, and Amazon is in talks with AMC to acquire the AMC and Odeon.

Scott Galloway: Not Disney. No, but still.

Kara Swisher: Not Disney. But you know what? I thought they'd be acquired. I thought these would be acquired, all these. That vertical integration thing would be over.

Scott Galloway: That's right. But you can bet that all of a sudden, when Amazon does anything, you can bet that Disney and Time Warner or AT&T have suddenly got their pencils out and are thinking, should we be acquiring movie studios?

Kara Swisher: Well, which ones are available? Which ones are? AMC is obviously one of the biggest.

Scott Galloway: Well, there's only two now that are kind of left. Landmark?

Kara Swisher: Is it Landmark? No, AMC and I forget who the other one is. But I mean, it's literally like Sears or JCPenney. These guys are in real trouble. And you're exactly right. It's powerful in terms of vertical control. If you look at the companies that have really excelled over the last 10 years, they have one thing in common, and that is they control their distribution.

Scott Galloway: And last week, who was it? Somebody said to Comcast... AMC said to Comcast they were going to come out with the *Trolls World Tour* and bypass mitigators. Right? And they fought. And I said, you're not allowed to do that. It's a typical distribution fight. Similar to in the 80s and 90s, JCPenney said to Levi's, "If you try and sell direct-to-consumer via the website, we're not going to carry you." And finally, Levi's said, "This is the future," and stuck up the middle finger and started selling direct. And now you see the content makers have all the leverage and are bypassing the theaters, especially in a time of COVID.

Kara Swisher: Well, here's the issue. If it's Amazon... See, if Disney bought it and wouldn't distribute Universal, there's got to be a lot of regulatory scrutiny, even though they're going to sort of give up on the old vertical integration laws that they had. But there is some issue around who owns it. Nobody, I think, in Hollywood wants Amazon to be owning this particular distribution channel because they both have entertainment and they're so well known for strangling distribution. They wouldn't say that. They'd call it "helping grease the kids of distribution." But I think probably media people, lawyers today, were probably like, "What the hell?" And then, of course, Congress will get involved. This is going to be not a one-step, quick thing, I think. It'll be really interesting.

Scott Galloway: I don't know about you.

Kara Swisher: But it's really interesting because everybody thinks about it one way. They think, "Okay, Amazon is going to buy movies or produce movies or these content makers. AT&T or whoever or Comcast are going to start skipping theater distribution and it goes straight to your TV set," which makes sense, right? You should be able to, if somebody wants to spend $200 to see the next installment of *Star Wars*, everybody wins there, right? But there's opportunities to go the other way. I think if Amazon owned AMC, they might do a special evening and release the first four episodes of season three of *Jack Ryan* in the theater. They might say, "All right, we're doing a *Fleabag* evening, a girls' night with drinks in the lobby and reserved 12 seats, and we're showing the first four episodes or the last four episodes of *Fleabag*." I think there's a lot of opportunity to do interesting things with theaters and do away with the shitty food.

Scott Galloway: And also, what if it just becomes a membership of Prime, where you have speakers, you have... I mean, these are essentially gathering places and fantastic real estate, and they need to be reimagined.

Kara Swisher: Well, you know, there has been that one thing that they do operas and stuff like that, which I've always thought was interesting. When they do opera, I can remember what it's called. When you go to a movie theater, you say, "Come here and watch the Metropolitan Opera," or whatever. But I do think that what's really interesting is what's going to happen from a legal point of view. Because I think these media companies have got to... This is really right at their heart with Amazon. Amazon making things is one thing, but owning this distribution channel. And there's only limited amounts of this, right? It's a limited product. I think it's not that big. And there aren't as many theaters. It's not that big anymore.

Scott Galloway: Yeah, it's not that big.

Kara Swisher: But still, it's perceptually big. It's in people's minds. We're going to the movies. And so it'll be a really interesting fight. And Amazon, once again, is showing it has no bounds to its ambitions, which I think is really the story.

Scott Galloway: It's, again, whenever I get together with elected officials or talk to the media, my ideas aren't that novel. They've heard my rap. What I do that usually kind of shocks and awes them is I talk about proportionality. So AMC supposedly is going to open up 48% or something today. And the stock right now, the company AMC, a big brand, distribution is important, movie theaters all over the nation, influential, right? It's got a total market cap of $480 million. So Amazon's at $1.2 trillion. In an average business day or average trading day, why wouldn't you go shopping? Amazon goes up or down $25 billion. So in sum, Amazon loses or gains 50 AMCs every trading day. So Amazon right now, they don't give a good goddamn about the acquisition price. It's literally the sweat on the sweat on their brow. They try to figure out, "Okay, is this strategically important? What kind of antitrust flags has it raised for us? Do we distract key employees with this horrible department store of media called movie chains?" But the fact that this company, the fact that Amazon literally trades up or down AMC about every three seconds gives you a sense for just how gargantuan these companies are.

Kara Swisher: I want you to think about for next time what else they must be thinking about then. All right? I won't say anything yet because you got a prediction right. But they must be like, "What else can we buy? What the hell? This is buy-in time." Like you were talking about, those with cash or those with stock that's valuable are going to go on a buying spree of the good stuff. It's sort of like the bargain basement at Filene's right now with all the good stuff there and you get in first. If you know that reference, it's an old retail reference. Filene's.

Scott Galloway: Filene's. And then we go to the opera tonight. And that's why we live alone with cats.

Kara Swisher: No one's going to the opera tonight unless you're going by yourself. Listen, you also got one right. Uber earnings. You predicted on Thursday that Uber would be expressing optimism in their earnings, and you were right. Uber's CEO, Dara Khosrowshahi, said the ride-sharing was picking back up. Uber Eats' business was up 50%. That's probably no surprise. And I want to... Care to explain? Do you have an insider there? How did you know this? Tell me your process.

Scott Galloway: Yes.

Kara Swisher: Also, Grubhub had record first earnings, which is not good for restaurants. Would you invest in Grubhub? Tell me how you knew this, first of all. Uber? What was your theory of figuring this out?

Scott Galloway: Yes. Unless you're best friends with Dara Khosrowshahi.

Kara Swisher: Oh, yeah. He and I are thick as thieves.

Scott Galloway: No, that was an easy one because what we forget is that these people are human. No CEO is going to announce the morning of earnings that he's making what feels like a little bit either genius or mercurial or nonsensical investment in a scooter company in the midst of a pandemic. The only way you announce that is if you're going into the earnings with your shoulders back and your chest out. There's just no way any CEO would want to say, "Well, I'm going to announce shitty earnings the same day I'm announcing this kind of what could be perceived as a strange investment." He would have waited to see how the market reacted and then announced. But to announce what I'd call... I don't want to call it risky, but something where a lot of people would tilt their head around the investment and lime, unless you're feeling your mojo. So that was just straight human behavior. The investor relations people all lined up and said, "When do we announce the investment?" And someone said, "Make it the morning of earnings because we're going to have momentum going into our earnings. And our earnings, we're going to show better than expected numbers." So these people, they're people, right? This is human psychology.

Kara Swisher: By the way, AMC up 46% in morning trading this morning.

Scott Galloway: All right. Look at that. Look at that. In the last five years, it's gone from $30 to $4.

Kara Swisher: What's the other firm? AMC and what's the other? What is the other one?

Scott Galloway: I don't know what the other one is.

Kara Swisher: Well, they'll all sell. They'll all sell.

Scott Galloway: Yeah, they can't survive as independent companies. The question is, is there value there?

Kara Swisher: I was wondering what was going to happen to Alamo Drafthouse, which is trying to do different things. What will happen to that? I think it's privately owned. But in any case, they're all for sale. Everybody's for sale. Scott, are you for sale? Would you buy into Grubhub? And then we're going to get to the big story. Would you buy Grubhub right now? Or do you feel like they're a rapacious company taking advantage of the weakness of restaurants? You know more about this space than I do. What do you think?

Scott Galloway: I think that they're going to get a lot of scrutiny. I think restaurants, especially locally, because restaurants have a lot of... If all the storefronts start going out of business and they're taking this biggest... They've got to have a better relationship with restaurants. I think there's something... I think probably everybody uses them. I use Caviar more than Grubhub, because I'm fancy. But I think that they have to question how much they're charging and work out something with a better relationship with restaurants. I don't know. I think it's probably a good investment right now, but at the same time, I think there's going to be a lot of ire among the people.

Kara Swisher: It feels like straight out of an economics class when you have two or three really well-funded competitors. There's DoorDash, there's Grubhub, and there's Uber Eats, and then there's a bunch of dogs and cats down here in Florida. We have delivery dudes. When you have a consolidation of power on one part of the supply chain and then you have literally hundreds of thousands of suppliers, there's just so much leverage and power that goes to the consolidators. For a while, what was strange is the consolidators were there was such a market share grab that they were showing up and saying, "For a while, we'll pay you to deliver your stuff." But that appears to be over, and now you're hearing these stories about restaurants giving Grubhub $1,100 worth of orders and ending up with $380. So that's going to be a super interesting analysis by economists and the antitrust folks to figure out, should they be regulated? But all of a sudden, they have new life. I thought there was going to be consolidation in that space. And it's all of a sudden become...

Scott Galloway: The other really interesting thing that you've been looking at is what is going to happen to ghost kitchens? Because if the physical places are no longer physical places, they really become liabilities given that the joy of welcoming your friends to your restaurant and density becomes the enemy, but people want more food delivered. It feels like it plays right into this notion of ghost kitchens.

Kara Swisher: Yep. Yep.

Scott Galloway: And it's interesting. Travis Kalanick has an investment in ghost kitchens, which I think is interesting. Good timing for Travis Kalanick, as long as he can keep workers.

Kara Swisher: And of course, he'll probably get himself wrapped around the axle around that. I don't know. It's nice to see him catching a break after... He's so smart. He's really smart, but I think you've got to be careful about workers again, how the safety of workers. And this is something we talked about Amazon doing, having a virus-hardened supply chain. In any case, we'll see. You wonder if Amazon's not going to get into this.

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Kara Swisher: Anyway, let's talk about white-collar workers and how big companies are extending work from home. Last week, Google CEO Sundar Pichai announced that a majority of employees who carry out their jobs from home will be able to do so until the end of 2020. Facebook also said that anyone who could work from home was free to do so until the end of the year. If you work at Amazon, well, not in the warehouse, you won't be expected back in the office until October. The same goes for Microsoft. Let's talk about how this will change the companies and how they interact with cities that are headquartered. And it also talks about a pandemic for different people, how it's conducted. So what do you think about this? I mean, it's just not a surprise they're trying to keep the work going and allowing their knowledge workers to do so.

Scott Galloway: It's just... there are so many second-order ramifications. We know that we're not going back to the same commute, take a train in for an hour from Short Hills, New Jersey or Greenwich, Connecticut because you have to because it's the rote process. Get in at nine, leave at six. We just know that 20 or 30% of that is literally going away. And you can see all sorts of things. You could see cities, commercial real estate in cities just plummet. You could see stocks like Best Buy, Restoration Hardware, and Sonos skyrocket as this new class of information age workers spend 20%, 30% more of their waking hours at home and decide to reallocate capital to buying a better desk, a better computer stand, a better carpet, and a better intelligent speaker system. The home is going to start to get... a lot of the capital that flows out of commercial real estate is going to go into the home. You could see office towers in Midtown being turned into condos, which puts additional pressure on real estate. There are just so many second-order effects.

Kara Swisher: I think it's going to have a huge impact on young versus old. So for example, the Google cafeteria just became incredibly valuable and a point of differentiation for a young person. If you're 25, you don't want to work from home. You want to meet your husband at the cafeteria, the coffee bar at Pinterest. And so the socialization and the ability to go into work is going to become a feature, not a bug.

Scott Galloway: I just lost this really talented young man to Google. And I was just so shocked because he loves our company. And I generally believe it's because he wants to go socialize somewhere. We're all working from home.

Kara Swisher: Yeah. So you don't have enough of a cafeteria there.

Scott Galloway: Well, but think about it. You and I-

Kara Swisher: I'm teasing. I'm teasing.

Scott Galloway: You and I, we have snacks. We have snacks.

Kara Swisher: Snacks. Good snacks.

Scott Galloway: A little snack table. But think about it. If you're our age, you probably have a decent home. You like being at home. But if you're 25, you're living in a 200-square-foot apartment in Williamsburg, you want to go to work.

Kara Swisher: But they're not going to go to work. They don't have to now. They have to stay home, really. I think they're probably encouraging people to stay home, too. If you want to go to work, you can. If not, you can stay home. But this is the thing. It'll become a feature. Google will say, "We have testing." I mean, it all, again, comes... Every road leads back to testing. What if I show an ID when I come into Stearns campus? At some point, will you have the equivalent of a 15-second screening process that tests you, where immediately they swab your cheek and go, "Boom, green, go ahead, go in"? Google will figure that out. Google will figure out ways to have amazing on-campus activities, socialization. Socialization is an enormous benefit of work.

Scott Galloway: It is.

Kara Swisher: It is. It'll be a different kind of socialization, though. It'll be more distant. It'll be interesting to see what will change. I was talking to my kid the other day. He was bumming out about not having to go to school, obviously. He actually wants to be at school. He wants to be socializing, essentially.

Scott Galloway: Is this the one headed to college?

Kara Swisher: No, he doesn't care. The younger one. I mean, you know, he finally got... He's really tall. He's six foot two. He now looks good. He feels good about himself. And then, boom, no social life, right? And so it's hard. He wants to see his friends. He plays lacrosse and stuff like that. So what's really interesting is how much that's the most important part of it. And then what do you do? Are they going to have them wear masks at school? Are they going to do... I was just trying to sort of think this through of how you do it. Do you test them going in and then coming out a week later? Do you isolate them? And the whole experience just changes. I was trying to compare it to him. I don't think much like the comparison to when I was a kid, a long time ago, you could walk right through to the airport gate. I don't know if you remember this, but when I was a kid, I remember doing that to meet people, my grandmother or whoever was coming in.

Scott Galloway: Oh my gosh. Isn't that wild? I think about that a lot. Do you remember that?

Kara Swisher: And I was like, and then you didn't have to go. And he's like, "Are you comparing this to like an airline thing?" I'm like, "Yes, it's a bad metaphor." But it just was like, it's just the new reality of what it is. And you wonder if all these workplaces, these remote workplaces, are going to affect people when they get into the analog situation. And so then what are those products? How do you conduct work? How do you have a good workplace where everybody's wearing masks and sitting six feet apart? I don't know. It's a really interesting question, but they're going to have to sort of have the best practices of these tech companies. You know they will.

Scott Galloway: There is, I mean, education, which I think about a lot, is going to be... There's going to be, and again, I love this quote. Lennon said, "Nothing can happen for decades and then decades can happen in weeks." Education is about to have decades happen in weeks. There are so many things that could happen here. There might be finally the great trickle up. And that is every kid on the waiting list at MIT and Harvard is going to get in this fall for the first time ever because the wealthiest people have the most options and a bunch of wealthy kids who got in on the first admissions roll are going to decide... A lot of them, 10% to 30% of them, are going to decide to take gap years. So to a certain extent, there are unintended winners. Every kid who's willing to show up for a substandard experience in the fall and has wealthy parents who can afford their tuition is going to get into a better school than they would have last year. The waiting lists are going to be cleared. And then it's going to domino down. If MIT clears their waiting list, then all of a sudden, Boston College doesn't have as many people accepting. Their yield goes down. And then they have to clear their waiting list. And pretty soon, it dominoes down to the second-tier universities that don't have waiting lists. And all of a sudden, those guys are financially strained because they have been building up so many costs.

Kara Swisher: Well, interesting. How interesting you talk about this. By the way, I'm applying to Harvard now to see if I can get in finally. You have a cover at *New York Magazine* saying, "The Coming Disruption to College," Scott Galloway predicts a few elite cyborg universities will soon monopolize higher ed. "Is college worth a fortune if you can't be this?" And it's pictures of people hugging trees and drinking essentially and hanging out. So talk a little bit about what you were trying to get at. "Is college worth a fortune if you can't be this?" This elite cyborg universities, what the heck is that?

Scott Galloway: Well, big tech is going to go into education. You're seeing an incredible disruption in education, and big tech is going to go into education, not because they want to, but because they have to. If you're Apple and you do $250 billion a year in top-line revenue, you have to be able to tell your investors you're going to double your stock in five years, which translates to somewhere between $100 and $150 billion in incremental top-line revenue, which limits you to a small number of industries: defense, healthcare, and you guessed it, education. And the top schools, we all like making a good living. And so we're going to, via Zoom, a lot of people are saying, "I am not going to continue to wash down this jagged little pill of a $68,000 tuition because I can no longer wash it down with the fact that I get to ship my kid out of my house. And also, he or she loves this four years of maturation and experimenting with pot and getting their heart broken."

Kara Swisher: Experimenting, Scott.

Scott Galloway: And bringing me to a football game that makes me feel good about the tuition. Everyone's like, "No, I'm not paying $68,000 for this." So you're going to see massive disruption. At the same time, the best schools will be able to replace that increase in pressure on pricing by increasing their enrollment with technology. And you're going to have a series of... I think the top schools are going to have a V in terms of their revenue. But you're going to have just this massive, massive disruption at second and third-tier schools. In other words, the guy who used to get admitted to USC is going to get to go to UCLA. The one who got into Pepperdine is now going to go to USC. And Pepperdine is going to be sitting there thinking, "Okay, how do we support this massive cost structure?" So you're going to see just a disruption, a decline, absolute chaos among second and third-tier universities.

Kara Swisher: And what about... Well, let's go back to companies. Is that the same case at companies? You're going to want to work at a safe place. You're going to work at someone who has testing and things like that. You don't want to go back. People are going to be thinking... It's interesting about this opening up thing. People, I don't know if I want to go to a restaurant right away. I have to have things in place. Now, I'm different than other people who are just like... There was a horrible story about this Cape Cod ice cream place that opened up and they were trying to do it in a really organized way. And everybody went nuts. Everyone was screaming at the poor teenagers who were trying to scoop it up. You're supposed to call ahead and order and then people would bring it out to you or hand it out to you. But it was like, people were saying, "Give me the ice," really abusive. So, I mean, it's going to be really interesting going back to work places and people sort of looking at each other. How it's going to happen is going to cause a lot of disruption.

Scott Galloway: But if you're a great warehouse manager, if you're a great operations manager and knows how to manage a warehouse, do you go to work for the warehouse that's outsourced to a third party on the Kentucky-Ohio border that Wayfair releases? Or do you go to work for Amazon who says, "We have made this massive multi-billion dollar investment in ensuring that you don't contract this virus"? I mean, they're just going to have their pick of the litter. There are so many unintended consequences. You know who might benefit in education over the next year is public schools for the first time in 30 years. People are going to take a hard look at public schools again, because they're going to decide if it's going to be a substandard experience, the variance between substandard and sort of substandard is not that great. Maybe I'll check out that whole free thing called public schools. And if there's a rush of the wealthiest parents who have the luxury to be more engaged in school, which is the key to making a school better, there might be this great upward spiral among public schools again, which would be, in a word, wonderful.

Kara Swisher: You've got education on the brain. I'm trying to get you to companies, but you are correct. You are correct. I am thinking myself of public schools. I really am. Hard, hard.

Scott Galloway: Well, think about it. Or, I mean, there's just so many things. Or what about makeshift schools among the wealthy? What about a bunch of wealthy parents getting together with classes?

Kara Swisher: Well, they do that in San Francisco already. Bring them together informally. That's among the wealthy in San Francisco. Hire one teacher. You put them... They do that. There's one called The Center in Silicon Valley. I can't remember. I forget. And it's like, "Did you get into The Center?" It's weird. It's like something like The Center. I forget. No, The Center is L.A. Anyway, there's one like that in San Francisco and the Silicon Valley where they make their own schools. One was focused... some of the Google people were doing one of them. So it's... yeah, you're right. But I don't know if everyone can do that.

Scott Galloway: There's going to be a surge in child therapy. And you're going to see a bunch of remote child therapy startups because a lot of kids, a lot of 5, 7, and 11-year-olds, as is understandable, are really struggling with the lack of social interaction, the lack of structure.

Kara Swisher: And you're going to see a therapist, rather than having someone come to their house and figure out, is going to say, "Go online, fill this out." And there's going to be all sorts of interesting startups helping kids manage their emotions through this.

Scott Galloway: I'm not so sure you can do that remotely, but it certainly is going to be a search.

Kara Swisher: It's coaching the parents. Yes, coaching. It's coaching the parents on how to deal with it. You're right. You're right.

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Kara Swisher: And the last thing in this section, because we have a friend of Pivot coming up. We were following the Amazon HQ2 story for a long time. They made arguments about having headquarters in cities that would benefit the city. Will Amazon still reap the tax? This idea of bringing companies... Now are cities going to have to pay more to keep these companies in these cities? Or do companies have the advantage going forward?

Scott Galloway: Oh, you mean Elon Musk pulling a Jeff Bezos and going, "That's it, I'm leaving Alameda."

Kara Swisher: I'm leaving Alameda. And Alameda, what was the Alameda City Councilwoman's response? She had what I believe is really the appropriate response. I missed this entire... I'm trying to zone out of Elon right now.

Scott Galloway: She said, "Fuck Elon Musk." That was her response. I think she perfectly summarized it.

Kara Swisher: Did she either say that or "Fuck Tesla"? I don't know. But basically it's like, "I'm leaving. I'm taking my auto manufacturing and leaving." And you know what? That is such bullshit. That is just such bullshit. Right now, Elon, everyone is calling bullshit on you. You're not going to move your factory.

Scott Galloway: Careful. Careful, he might.

Kara Swisher: You think he might?

Scott Galloway: Let me just say. If anyone would, he would.

Kara Swisher: How about that?

Kara Swisher: I heard he's putting it on Mars.

Scott Galloway: Oh, stop.

Kara Swisher: I heard he's putting it on Mars. Yeah, I know, I know. He doesn't like the shelter in place. It's affecting his business. It's fascist.

Scott Galloway: It's fascist.

Kara Swisher: It's fascist, whatever. He wants to make that cool truck, his Cybertruck, I guess. But, you know, that's... Stay strong, Alameda. There's going to be lawsuits. There's going to be lots of lawsuits from the companies. But he could move to Nevada. He certainly could move to Nevada.

Scott Galloway: Sure, that's where his Gigafactory is, right?

Kara Swisher: Yeah. You know, I don't know if he will. I think it's an interesting fight between Alameda and cities like it in California. And it's going to go on. It's going to go on. There's going to be lots of lawsuits. Anyway, it's time for a quick break. We'll be right back. We have someone you love that's going to get you going talking about these economic issues. We'll be right back. I'm not going to say who it is with a close personal friend of Pivot. I'm going to say who it is. It's Stephanie Ruhle. She sent a multi-part text chain last night that was full of fire and brimstone. So get ready for Stephanie Ruhle.

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Kara Swisher: Okay, Scott, don't get too excited. We have someone online. They're both friends with Stephanie Ruhle. She is the NBC News senior business correspondent and the anchor of MSNBC Live with Stephanie Ruhle. Stephanie, you've been killing it on this economy thing. I hate to say it, but this pandemic is kind of perfectly made for someone of your insight. So let's talk about job losses, the shrinking economy. A record 20.5 million jobs were lost this April. The U.S. GDP has already shrunk in the first quarter by 4.8%. So give us a lay of the land.

Stephanie Ruhle: First, I think, thank you for your kind words. Thank you both for having me. I'm a super fan of both of yours. I think first, the unemployment number, we can't look at it with any historical perspective because this has never happened before, right? This wasn't a natural shedding of jobs. We said we need to turn off the U.S. economy in order to address this health crisis. And of course, the result of that is a massive amount of unemployment. The thing that is sticking out to me is this idea that we're going to have this V recovery and we're going to just jump right back. When you drop this far, this fast, you simply can't get back. And just think about this from a health perspective. We keep talking about what we're going to do and this is going to be with us for the next 12 months or maybe we don't get a vaccine for 18 months. But from an economic perspective, we're only addressing it for a couple of months. We've got a bespoke special bailout package just for the airline industry, which Steve Mnuchin is essentially the de facto czar for. Yet the restaurant industry, if you want to look at unemployment numbers, shed five and a half million jobs last month, and there is no specific program for the restaurant industry. In fact, one of the reasons the PPP program hasn't run out of money is that now that people have looked closer at the rules, it's not going to help lots of small businesses.

Kara Swisher: Yeah. Well, this is something, Scott, go for it.

Scott Galloway: Well, PPP, it feels as if all we're doing is flattening the curve for rich people. And you've talked a lot about a lack of oversight. Where do you think, I mean, three, six months down the road, does this just look like Bernie Madoff times a million?

Stephanie Ruhle: I'm worried that it will. Remember, Occupy Wall Street happened when Obama was in office. It's not political. And I worry that 10 months from now when the rich have gotten richer and the poor have gotten sicker and poorer, we're going to face a scenario of social unrest. And while Democrats are thinking, well, that'll be on Trump's watch, no it won't. It won't matter who's in office. It's going to matter that the system could break. So, you know, you and I, we all think, hey, the original form of American capitalism is all well and good. But if the greed pushes too far and if there's no oversight here, the whole thing is going to blow up. On Friday, right, the CARES Oversight Committee, right? You've got Donna Shalala on this. This was the whole idea. We're going to create CARES, but there was going to be this Oversight Committee. That Oversight Committee still has no chairperson, and it still hasn't been funded. So the way the law works, 30 days after money is given out, and this is like the big money from the Mnuchin side, a report is supposed to be written. No report was written because they don't have anything, right? They're going, well, we're going to ask the questions. Well, it's like the FEC. It's like a lot of these agencies that are either not funded enough or don't have a quorum or there's no oversight whatsoever. We don't know. PPP, we keep talking about the big companies. We only know the names of public companies that got the money. And the only reason we know the names is because they had to file with the SEC. All of those other businesses, we have no idea. Do you remember after 2008 when TARP happened, every single dollar, and that was only a little over 700 businesses, we knew where it went. We have no idea where this money is going. So behind closed doors, Secretary Mnuchin, Jared Kushner can be playing kingmaker, and it's going to be a long time before we know where the money actually went.

Scott Galloway: I'm curious. Which we will eventually.

Stephanie Ruhle: Great, eventually.

Scott Galloway: Well, we know how this administration treats subpoenas. They blow their nose with it. So you have one of two options. Either the president will still be in office and they're going to laugh at oversight, which they've successfully done, or they won't be in office and Democrats are going to be left holding the bag while people in this country are saying, I got screwed. Aren't we as Democrats sort of complicit in this? So I was really disappointed that the speaker didn't – I was really frightened that Katie Porter was held off of the Oversight Committee because she brings accountability and math. And it feels like – Kara summarized it. Would you rather be the player or the plate? And I feel like we as Democrats have been played and that Democrats are enabling this. I mean, don't we have a job to provide or demand better oversight?

Stephanie Ruhle: A hundred percent. The fact that Democrats are sitting here still today going, "I can't believe Ruth Chris took the money." They were allowed to take the money, right? You have the people that designed the program now bitching and moaning about people who took the money. The only reason we know who took the money is because the media reported on it. So those who set the rules should consider, do these programs work and do we know where the money is going?

Kara Swisher: All right. So that's the first part. Now it's mid-May and the government has not reissued any UBI checks. What do you think the next step? You're talking about it not reaching real people, not reaching small businesses. So how do you turn that around, or is it unturn-aroundable, or what do you imagine happening? I mean, we have to reconfigure this to figure out how do we keep people okay? How do we keep people safe and solvent while the rest of the system works itself out?

Stephanie Ruhle: Well, we sit in a situation where we're choosing which business has been hurt the most and who do we have to solve for. I don't know how that solves for anything in this country. And the thing is, some businesses should go away. You've got businesses, let's say in the retail industry, that were suffering before this happened. If the cruise industry is going to go away, that's okay. That's how capitalism should work. Bankruptcies should exist. And then there can be a rebirth after that. But for us to pump money into businesses and also not put any rules or regulations around where those businesses are spending that money while individuals are suffering, it just doesn't make any sense to me. I mean, Scott, I ask you, do we need to have JCPenney?

Scott Galloway: Oh, look, JCPenney has been dead for five years. I mean, this is, you're right, in retail, those guys, it's just taking companies that are in the bottom of the seventh inning and putting them in the bottom of the ninth. And to your point about cruise lines or airlines, airlines have gone bankrupt 66 times in the last 10 years. And if Carnival Cruises goes out of business, first off, they don't pay any taxes. They're terrible polluters. And if they go out of business, it just means the debtors are going to own the ships, not the equity holders. It's almost as if we've decided that rich people get special treatment and the equity holders in the cap structure get better treatment than the debt holders. You're right. Certain seeds don't germinate in fire. We should have some fire here. We should have some bankruptcy. By the way, give younger people a chance to own companies. I mean, Stephanie is exactly right.

Kara Swisher: Angry pair?

Scott Galloway: Angry pair.

Kara Swisher: I want to know what the path forward is then for the current administration, or how should the Democrats be planning for the economic recovery? Because it is what it is. We have an economy that stopped, a badly done rescue package so to speak, which is rescuing rich people. What needs to be done? Let me propose this to Stephanie. Stephanie, respond. Why wouldn't we take this trillion stimulus, take the lower medium of households and give them each, instead of creating artificial zombie little companies, create demand, and then let it figure out where that demand goes and create healthy companies? Why wouldn't we protect people, not companies?

Stephanie Ruhle: That's 100% what we should. But the answer is those individual people don't have a voice. They don't have a say. Okay, we keep saying, "Oh, we're doing things for small businesses," but we're really not. And one example would be the liability shield. This idea that businesses can't open up right now because if they were to open up and risk getting sued by their employees or their customers. If I owned a little gym, I would say, "You know what, Kara, I'm gonna stay shut down. I can't reopen. I can't afford it." But that's not really who they're fighting for the liability shield for. They're fighting for it for big, enormous companies, right? So while you've got a meatpacking plant with 600 people who stand shoulder to shoulder getting sick from the coronavirus, that company doesn't have any rules or regulations to force them to do the right thing, okay? So we need to figure out, should we create some sort of economic bear hug so we help absolutely everyone to create a true economic holiday? Or do we do what Scott says and figure out a way to just help individuals? My concern in the way Scott wants to do this, I am very, very concerned, and maybe I'm romantic or nostalgic, about small business. Just think about this, Kara. Where you live in Washington, D.C. Well, maybe not in Washington, but I'll talk about New Jersey because New Jersey is completely shut down. Where I live, all the small businesses are shut. And two months ago, that was an excellent idea. And still, I understand this idea that we have to put health first. But you know what's open? The big box stores. Walmart, Lowe's, Home Depot, Target. And they were open because of the idea, "Well, they're selling just essential goods." But they don't just sell essential goods. I could walk in there. I could buy a surfboard. I can buy a boogie board. I can buy toys. I can buy books. And then all those little mom and pop shops can't even make their rent. And all they need are 20 people a day to come in and buy something in order to make their rent. So I understand Scott's point, "Let's just help people." But I worry that if we are helping businesses, we're choosing businesses that don't need our help.

Kara Swisher: It's a fair point. Right. Like the big, the Walmarts. This has been the best for Amazon, Walmart, all the ones that don't need the business are getting the business, or the big grocery chains. People are getting sick at an Amazon or a Walmart, which is terrible. But we're saying those companies can figure it out when their employees get sick, but the little guy can't. I have a politics question. Can I ask a politics question, Kara? Well, I want to know what do you think about that, Scott? Look, you and I are brothers and sisters from another mother on this. And my sense is I think you are being nostalgic about small business. I think small business in America used to be the wolves of the global economy, and the government is turning us into a bunch of poodles waiting for daddy to come home and feed us. I think bailouts are terrible ideas. But only the big businesses get to be poodles. The little ones don't.

Scott Galloway: 100%. And by the way, when you tell Amazon and Walmart, "We're going to put stimulus in everyone's pocket, and then we're going to have the mandatory closure of 98% of your competition," this care should be called the Amazon and Walmart Shareholder Act. It's scary. Amazon is up 28% this year. But anyway, quickly to politics, because you're constantly interviewing people, but there's always sort of an insider view at places like MSNBC, and I'm curious what you think. So I just want you to react right away. Newsom, Cuomo. Awesome, awesome. I mean, and I actually think Newsom deserves it. Any chance of that? Any chance of that? I mean, I think you're kind of living in a dream world, right?

Stephanie Ruhle: Yeah.

Scott Galloway: Like, yeah, that would be great in a world of logic. And I don't even think from a personal standpoint, I don't think Joe Biden would mind it. I really do think Joe Biden, in my experience with him, really wants what's best for the country. And I think he'd be the first to say, if somebody else can get the job done, let them do it. I don't think he ran for president from an ego perspective, but from a nuts and bolts logistics standpoint, I don't know how it happens. But Newsom specifically, I actually think Gavin Newsom deserves more credit than he gets. Think about this, it hit California first, right? Think about London Breed in San Francisco. San Francisco was one of the first cities to shut down. And when they did, we're like, "Man, they're kind of overplaying this one." And look at the outbreak there. It's been de minimis compared to New York. And a great job. And granted, it's much smaller than New York. New York has different challenges. But listen, both governors have done a great job. Actually, Kara, you and Stephanie, you're talking to people kind of quote-unquote "in the know" every day. You have not heard any real credible whispers of another ticket and going straight to the convention. Because Biden, I'll be honest, I am worried we are about to snatch defeat from the jaws of victory with Biden.

Kara Swisher: Yeah, that's right, from Biden.

Scott Galloway: I don't think he's up to it. I know that's a terrible thing to say. I just don't think he's up to it.

Kara Swisher: I think you're wrong. I think you're overestimating it. This is not the most – no. If he picks the right running mate, he'll be fine. Listen, think about – I'll use Mike Bloomberg as an example. And I don't mean Mike Bloomberg as a candidate for president. But what is Mike –

Scott Galloway: Yeah, that didn't work out for the two of you, the Bodegas.

Kara Swisher: But what is Mike Bloomberg's skill set as a leader, okay? It's not that he's inspirational. It's not that he connects with humans because he doesn't do either one of those two things. But he's a brilliant operator who puts in place the smartest and best people at any task. Like, I can't think of a better convener of talent than Mike Bloomberg. Joe Biden can do that. He's a manager.

Scott Galloway: Yeah.

Kara Swisher: Joe Biden can do that. Joe Biden can walk into the job and say, "Here's my squad team." And that's why a lot of people have said, why doesn't Joe Biden do his own counter press conferences every day with his squad, with his squad of experts and say, "Here's how we're going to do it." Because remember, with President Trump, this is that "I and I alone" president. You've got people going to work at the White House today that know in the last week they were exposed to coronavirus. In part, as per reporting, because they know you've got to be near the president to get your voice heard. Who's the Veep candidate? Yeah, let's do it, Paul. Stephanie, you first.

Stephanie Ruhle: All right.

Kara Swisher: And then we've got to go to break for wins and fails. But go ahead. Who's the Veep? Who's the Veep?

Stephanie Ruhle: Kamala Harris, Stacey Abrams.

Kara Swisher: Okay, go ahead. Kara Swisher.

Kara Swisher: Michelle Obama. She's Secretary of Defense. Do you think she wants that job? Do you think Michelle? Oh, my God. I am going with Michelle Obama. That's why I've decided I'm going to go there. Here's what I'll tell you. Because my mother will vote for Michelle Obama, and she does not want to. I'm just telling you. If there's a Michelle Obama there, she'll pick a Michelle Obama.

Scott Galloway: I'll tell you what Wall Street is afraid of and what could be likely.

Kara Swisher: What?

Scott Galloway: Elizabeth Warren as Treasury Secretary. I think it's one of the reasons banks were willing to take the public lashing on PPP, but they were sure they got every single T crossed and I dotted. Because they know if Joe Biden wins and Elizabeth Warren is the Treasury Secretary, if there was wrongdoing around PPP, she's coming for you. She Teddy Roosevelt, too.

Kara Swisher: That's what I'm saying. She's coming for you.

Scott Galloway: The only thing tech fears is Vice President Elizabeth Warren.

Kara Swisher: Anyway, this is very fascinating. Last thing, very quickly, why is the stock market doing well and the economy is tanking? Nice face there, Stephanie. I can see you.

Stephanie Ruhle: Because it's just what we were talking about. It's forward-looking, and this is great for big business, right? The stock market isn't where the economy is today, it's where is it in six months or a year? And in six months or a year, A, we know the Fed is doing a lot to help it, but we know in six months to a year, those big giant companies can pivot. They were already pivoting to the digitization. You don't think that lots of banks out there would have loved to shut down all their little branch offices that weren't doing anything but helping them with PR? This only moves that further. So all those mom and pops get pushed out. The big companies can easily sign on to Mark Benioff's work.com and create the workplace of the future because they can afford to do that. But those non-public companies, those middle companies, those smaller ones get pushed out. So the big guys win bigger market share. And you cannot forget this is a global pandemic. We're still the United States compared to the rest of the world. And you've got to put your money somewhere. U.S. stocks are better than stocks in Nigeria.

Kara Swisher: All right. Good, fair point. All right. We're going to take a quick break and we're going to come back for wins and fails with Stephanie Ruhle.

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Kara Swisher: Okay, we're back. Usually Scott and I go through our winners and losers, but Stephanie, I'm going to give over to you for my wins and loses. So who do you think is winning and losing? I want to ask you. Who are yours? I'm not going to have any today. You just go right ahead.

Stephanie Ruhle: Go right ahead. Let me bail you both out because you haven't prepared. You haven't done your homework. So I'll go first and you can respond. A loser, PPP going to religious institutions. A total constitutional violation of church and state. We have Brigham Young getting $25 million because a disproportionate number of their students are married, which qualifies them to not include their parents in their income. So we have a $100 billion endowment known as the Latter-day Saints getting PPP. Should we have religious institutions that are tax exempt taking PPP funds? That's my lose. Thoughts?

Scott Galloway: Okay. Oh, well, yeah, I agree. What's not to agree with? I agree with you wholeheartedly. And again, PPP is an example of a good idea, bad execution. And Democrats are worried about what do we create in the next CARES Act? We need to take a look at where the money has gone so far and retool this. It doesn't make sense. Now, the one thing I would argue to you, Scott, in terms of religious institutions, a lot of them are tied to schools. And I don't even take huge issue with fancy, you know, everyone's going, "I can't believe these fancy private schools that took the money." Listen, this was billions and billions of dollars, and you're never going to see me fight anything associated to teachers getting paid more money, getting more financial security. Because while we are all parents with our –

Stephanie Ruhle: Private schools get PPP but not public schools?

Scott Galloway: No.

Stephanie Ruhle: Then we need to figure out a plan for public schools because the fact of the matter is in states like New York and New Jersey, we could see school budgets get cut by 20 percent. And you've got private schools that are eligible to get PPP. I wish – I'm just not going to – I'm not going to get on my soapbox and scream and yell about those private schools because I got bigger things to scream about. And I want every school to have all the resources.

Kara Swisher: What do you think about Amazon acquiring AMC? Did you see that this morning?

Stephanie Ruhle: I did. Listen, I think – I'm always going to go, who's the winner of the week, Amazon, right? And I think that –

Kara Swisher: Every week.

Scott Galloway: Every week it's Amazon.

Stephanie Ruhle: And I think a headline that got missed two weeks ago is when Jeff Bezos wrote in his letter, "Shareholders sit down, shareholders take a back seat." Wasn't that great? That was the gangster quote. That was enormous to me. So Jeff Bezos' approach to his shareholders and Jeff Bezos, when he has to testify performing before Congress, could make him the biggest winner. And here's why. Congress is going after Jeff Bezos for a number of reasons, but because he's the easy target and he's a super rich guy. So let's bring him down to the hill and let's humiliate him because that's what they do. While at the same time, regulations for payday lenders are getting rolled back. These are the most predatory lenders that take poor people, lend them money, and have them on the hook indefinitely. There were huge regulations put in place after the '08 crisis to get them in order. And those regulations are slowly being rolled back during the Trump administration. They had their lobbying conference at the Doral Resort in Florida last year. And so for me, Jeff Bezos acquiring AMC, Jeff Bezos saying to his shareholders, "You're going to need to take a back seat because I'm going to focus on how I can address my employees, my customers, and corona," is massive. Because what has happened in capitalism is every business leader out there, even government leaders, are so focused on short-termism that there's not one single CEO that can make a long-term decision. Because every quarter, he or she has to put on their high heels and push-up bra and dance for Wall Street analysts.

Scott Galloway: I got mine on.

Stephanie Ruhle: I just... And it's time that businesses stopped dancing for Wall Street analysts and started performing for long-term solutions.

Kara Swisher: Be Bezos is what you're saying. Be like Jeff. I got it. All right, so he's your winner then. He's your winner? Is he your winner?

Stephanie Ruhle: Yeah, you know who my loser is?

Kara Swisher: Who?

Stephanie Ruhle: The American people.

Kara Swisher: Oh, big monster. There we go. Go.

Stephanie Ruhle: Big monster. Go, girl. Here's why. Go, girl. Ready? Okay, let's go. We keep talking. Should we open? Should we close? Coronavirus is a health crisis turned economic crisis that of course in true 2020 style has sparked a culture war. Last week I interviewed the CEO of Walmart for the Americas. And I said, "What's the number one concern for all of your employees?" And he said that customers follow the safety rules. And I was like, really? Like when I go into a store, I'm so careful. But what's happened is regionally, you've got redder states that have become corona deniers. They haven't really faced that much of an outbreak yet. And they're starting to buy into this idea that it's all a conspiracy to hurt the president. And the president dog whistles at them. He doesn't wear a mask. Mike Pence doesn't wear a mask. And the places where it's gotten hit the hardest are the places they hate the most, New York and California. And the net result, more people are going to get sick. Okay. We need the government, we need business, and we need Americans to obviously go back out there, but we have to go back out there and be careful. So when you watch stores packed, all I need to see is one single video of somebody screaming at an employee at a CVS, and that breaks my heart for this country.

Kara Swisher: Yeah, I agree with you. I think it's interesting because one of the gatherings in Wisconsin, they're seeing tons of COVID sicknesses from the people that went to that gathering. And when you go to that gathering, do you sign a waiver that says, "I will not use public funds, I will not go to the emergency room. I will not go to the hospital." When you see people say, "Well, more people die from tobacco deaths," tobacco deaths don't get your friends and neighbors and nurses sick.

Scott Galloway: Yep, exactly.

Kara Swisher: The American people. So coronavirus, PPP, social unrest. I have a much more serious question. Should the three of us move to Utah, get married, and open a wild animal park? Think about it. Take your time. Think about it.

Scott Galloway: That throuple would make you. There's no reason.

Kara Swisher: That is the most awesome throuple in the world. Once you procreate, there's no reason to ever – I would far rather spend the rest of my life with my best girlfriends. Now that I've procreated, if I'm ever going to get married again, there's no chance it would be to a dude.

Stephanie Ruhle: Well, let me tell you, Stephanie, it's called lesbians, and we would welcome you to the tribe. You can join the militia at the Ridge anytime you want.

Kara Swisher: Living our best lives. Listen to me. Last question. Living our best lives. Last question for both of you. Last question. You cannot join the militia at the Ridge, Scott. We're going to come hunting you. We're going to hunt you. That's going to be our sport. Scott Exotic.

Scott Galloway: Listen, Scott, well, Hunt, Scott will give you like one kombucha and a 10-minute head start. At this point, I'm willing to try.

Kara Swisher: Listen to me. I'm willing to try. Listen to me. Last question for both of you. One year from now, the economy. Each of you, try to be thoughtful. Then we have to go. Who are the biggest winning companies?

Kara Swisher: However you want to say, one year from now, our economies. Stephanie first.

Stephanie Ruhle: I think the biggest, most sophisticated, successful companies before the crisis are going to be significantly more powerful. And we're going to have a lot fewer businesses out there. I'm very worried about the future of mom and pop. I think we could lose 40 percent of our restaurants.

Kara Swisher: All right. Scott.

Scott Galloway: Yeah, I think that's right on. The bigger are going to get bigger. The government, the CBB, and the Fed are going to continue to print money, which will save a lot of big companies from facing the music. I do think, though, at some point you issue so much debt that the equity value gets wiped out in the form of... I think the NASDAQ gets cut 30%. I just don't understand how the NASDAQ is up. If you're telling me January 1, the economy was less strong than it is now, I just don't get how. We're going to test new lows in terms of the markets. I think it's going to get very ugly pretty fast. But who knows?

Kara Swisher: All right. But it should. I agree. The market shouldn't be based on expectations and smoke and mirrors.

Scott Galloway: At some point, Kara, it has to be about earnings. And over the last few years, companies haven't earned more. It's been P/E ratios.

Kara Swisher: Time to get real.

Scott Galloway: Time to get real.

Kara Swisher: All right. That was really real. It was Stephanie Ruhle. Thank you so much. Anyway, last thing before we leave. All right, Scott and Stephanie, anything making you happy this week? Stephanie, happiness. Scott requires this little exercise.

Stephanie Ruhle: Yes. You know what? It was the nicest, nicest Mother's Day. Because even if people didn't get to see their families, this whole thing has gotten a lot of us to shut up with our bullshit. We're not mad at our family members over crap that didn't matter. We're actually knowing our neighbors' names. We might even be getting groceries for them. So the best thing is we've seen an injection of humanity that we are in desperate need of.

Kara Swisher: Yeah, yeah. Even as Walmart people are rioting. Anyway, Scott?

Scott Galloway: I've been trying to spend more time in nature with my 9-year-old, which has been really nice for him. That's my win.

Kara Swisher: I had a shitty Mother's Day. I did too many edibles Saturday night, and I just wasn't in the right mood Sunday. But anyway.

Stephanie Ruhle: Well, that was a choice.

Kara Swisher: That was a choice. That was a choice. Thank you. Stephanie, I love you. You are the best person ever. I had a beautiful Mother's Day, too. My lovely sons had been cooking for me all week, and then Clara learned to play the piano, so it's great. Terry Blossom, yes, it was very beautiful. Anyway, all right, everybody. Stephanie, thank you so much. Don't forget, there's a story in the news. We're not going to Utah. In the news, you're curious about and want to hear our opinions. We could think of a better state, Hawaii. And email us at [email protected] to be featured on the show. Scott, can you read us out?

Scott Galloway: Today's episode was produced by Rebecca Sinanis, our executive producers, Erica Anderson. Special thanks to Drew Burrows and Rebecca Castro. If you like what you heard, please download or subscribe. Catch Stephanie Ruhle on MSNBC or the Today Show. Everyone stay safe, and we look forward to seeing you or hearing from you at the end of the week.