Apple’s Buy-Now-Pay-Later, Texas’ Twitter Investigation, and Buzzfeed’s Stock Drop

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

Scott Galloway: And you've done it again. Everyone thinks we're getting divorced. I emceed the Jed Foundation fundraiser last night. Literally everyone came up to me and said, "I'm so sorry to hear about the news." And I'm like, "What are you talking about?" And they're like, "Kara, she's doing her own thing." Everyone assumes you've left me.

Kara Swisher: No, no, I have not. But the thing that bothers me... It says, "I am binding myself further to you," which is a massive mistake. Hello. I'm in a titanic situation. Squeeze a little harder. Squeeze a little harder. I am binding myself harder to Scott Galloway, if you can believe that.

Scott Galloway: The thing that pisses me off is a lot of people misunderstand because it shows their affection for us in the program. But they immediately assume for getting a divorce that it's you leaving me. Everyone's like, "What did you do?"

Kara Swisher: Oh, exactly. But that would be the way it is, right? I mean, let's be honest.

Scott Galloway: Yeah. So, okay, just clarify what's going on here. I'm not sure I understand.

Kara Swisher: All right, I'm going to. But can I just say, speaking of that, I just was coming back from something. I went to visit Brian Koppelman, who does Billions on something. And I was standing down in the Village. A guy went around the block in his car, double parked, ran over and said, "I love you and Scott." His name was Johnny. He wanted to take a selfie, and he asked me all kinds of questions about us. He goes, "I'm shaking. I can't believe I met you." It was lovely. So just people still like our marriage. So just be aware of that.

Scott Galloway: Be aware.

Kara Swisher: It was lovely. I mean, literally, he jumped out of a car. It was a little frightening at first. I felt like I was in an episode of Taken. But nonetheless, he asked me if I was creeped out by people doing this.

Scott Galloway: Where's Liam Neeson when you need him?

Kara Swisher: I know, right? Liam Neeson. Anyway, so here's the thing. Okay, here's the deal. I started off – I don't mind the whole history – but I created Recode after All Things D, but that's another story. It was sold to Vox Media, and then I started Recode Decode, which was an interview show at Vox, and it was me and an intern many, many, many years ago. Then I got lots of offers, and one of them was from The New York Times to write for them, which I did, and then they offered to start a new podcast, which I did. I still continue to create this with you, which has been a huge hit. We're thrilled with this thing. I had done the Times thing for writing for about four years, the podcast two and a half. I think things are changing in the media space and I can't go into a whole lot of detail about it, but I have a lot of interest in being slightly more entrepreneurial. Again, nothing about the Times. It's a wonderful place, great people, but they're a traditional media company and I'm a little more entrepreneurial. I want to do different things. You'll see a lot more stuff coming out for me that I can't do when I'm affiliated with them. I was never an employee. But Vox Media is open to that, has been long open to things like that and has a different approach toward talent in a different way. By the way, neither is better or worse. They both work. I just felt like I was more free to do some things here that I couldn't have done if I was continuing to do Sway. I think Sway is amazing. We've done some astonishing interviews, including with Matthew McConaughey, who was in the news this week around guns, and all kinds of people. I feel really great about that. But you know me. I like to move around, Scott. I'm a move around kind of gal.

Scott Galloway: So why do you hate the New York Times?

Kara Swisher: Sorry. I am not one of those. But I just want to clarify, are you still writing for the New York Times? No, no. You're no longer doing a column for the New York Times. Look, I did a lot of things. I quit several contracts I had this year because I don't want to be – I'm a free bird. I'm a free bird. That's what I told Mark Cuban. He asked me.

Scott Galloway: Don't get too close to your flame. You might get burned.

Kara Swisher: I know. That's true. I feel like I want to be a free bird. I don't want to sign exclusive contracts at this moment, or maybe I will if the money's big enough. But I just felt like I wanted to control. What I said was right. I want to do what I want to do, and I want to do it when I want to do it. I'm at the point in my career where I can do that. So therefore, I am. I'm interested. I didn't want to start a Substack or things like that. They're fine. But I feel like I want to own what I make a little. I've made thousands of interviews, none of which I own. I felt that was important. I want to be part of the business part of it. You know how much I love doing business. I've learned so much from you, by the way. I get into these startup mentalities at points in my life, and this is the one I'm at. I want to make Pivot bigger.

Scott Galloway: I hear you, sister. I've never been able to work for organizations. What Vox is, and the genius of Jim Bankoff, he sees himself as a platform for other people. He doesn't come to it with expectations or this traditional organization-employee relationship. He's there like, "How can I help? How can I make you successful?" So, it's going to be called Pivot Conversations? What's it going to be called?

Kara Swisher: No, no, we don't have a name. We can have a naming contest if you like. I have something in mind.

Scott Galloway: Is it going to be an extension of the Pivot brand? If it sounds like I don't know what's going on, I don't.

Kara Swisher: You don't. You really don't. It's not an extension. Yes, it's an extension of the Pivot brand. Yes, in a way. But it's a little bit. It's going to be...

Scott Galloway: Pivoted? What do you mean "in a way"?

Kara Swisher: In a way.

Scott Galloway: Does it have the term "pivot" in it?

Kara Swisher: No, not in this moment. It might, but probably not. It's going to be called Scott. That's what it's going to be called.

Scott Galloway: You sound like my 11-year-old when I ask him if he studied for his math test. I'm getting a lot of "blah, blah" here.

Kara Swisher: Well, I can't. I don't know yet.

Scott Galloway: What is going on? I wasn't suspicious until you started talking.

Kara Swisher: It's unclear. It's unclear. There might be a video element to it. There's all kinds of things.

Scott Galloway: And when did your relationship with your assistant begin? I mean.

Kara Swisher: No, listen, I'm not part of that grifty group of people that have this trash in the New York Times going out. I bid a wonderful run there. I love Vox, too. I said it in the article. I want to do what I want to do, and I don't want to ask permission. I don't feel like I have to. I'm 100 years old. Why should I ask anybody? You're like that, too. 100%. I've been that way my whole life, though.

Scott Galloway: Anyways.

Kara Swisher: And let me see. I'm as free as a bird, and this bird you cannot change. That song. That's what I'm feeling like. That's my theme song.

Scott Galloway: I think it's wonderful. And whatever it is you, we, and us are doing, I'm all for it.

Kara Swisher: Yeah. Pivot's going to get bigger. Pivot is so popular. Just that guy stopping. People, even people that don't like us, like us. Do you know what I mean? They like to trash on us and this and that. I kind of like it.

Scott Galloway: The worst thing – not a half, but a third of the people come up to me and say, "I like Pivot mostly because of Kara." And they look at me and wait for a response. I'm like, "Okay, I don't care." The advertisers can't tell.

Kara Swisher: Yeah, that's right. So I'm really interested in the Pivot. I like our freewheeling. I'm rethinking the interview process and we'll see how it goes. There'll be Code. I'm doing that with Vox too. I may do other things. So we'll see.

Scott Galloway: So you know I'm the best business partner ever?

Kara Swisher: You are. Yes.

Scott Galloway: Well, I am. One, because I make us a shit ton of money. I understand business. But more than anything, anything you want to do, anything, it's fine with me. Scott's a yes. Yeah. Whatever. Scott's a yes. Scott is always a yes. Whatever makes you happy.

Kara Swisher: I like a yes. That is correct. Anyway, it'll be fine. We'll be great. There'll be lots of cross stuff, and it's going to be great. By the way, Naima Raza, who I worked on Sway with, is coming over to work with me on this. Naima. That's the new announcement. She's coming over. She's amazing. She is a fantastic producer and one of the only people I literally let tell me what to do. Very few people. I argue with her about something and then she's always right. I'm like, "Oh, you're right." I never do that.

Scott Galloway: I have to say. I don't know. Maybe I listen to Lara a lot, too. I'm pretty good at listening. But Lara runs Pivot and she's amazing. So is the whole staff, Evan and Taylor and Drew and others.

Kara Swisher: Don't forget Ernie and Tratad who engineered this episode who I've never met. I literally was going, "Who have I forgotten and not get in trouble for?" Anyway, we'll see. A lot more cursing on my new interview show. Today we'll talk about Apple's entry into the buy now, pay later area, also mounting political problems for Twitter. We'll also hear from a listener about ethical billionaires. I didn't know they existed. Anyway, but first, you don't have to go to the movies to watch Tom Cruise fly planes. The actor's four private jets are now being tracked via Twitter bot. The account called Celeb Jets also publishes movements of planes carrying Jay-Z, Kim Kardashian, and Taylor Swift. The bot creator is the same team behind Elon Jet, which tracks you-know-who. I kind of hate to say this. I follow these things that I shouldn't. Does that make sense? They are kind of weird and tracky. At the same time, I do use it, so I don't know how I feel. What do you think?

Scott Galloway: I have mixed emotions here. My colleague at NYU, David Yermak, who is the head of the finance department and is one of the most thoughtful people on Web3. He's more bullish on it than I am. Whenever I speak to him, he articulately and politely disagrees with me and evolves my thinking. He did some great research about a decade and a half ago where he tracked the tail numbers of CEOs. What he found is if they were planning to go on vacation after the earnings call, it meant the earnings call was going to be positive because they had the confidence to go on vacation. So when they were filed, it would fly. Everyone found out. Immediately that information goes into the ecosystem. CEOs and investors freak out and start trading on it. Now you can anonymize or attempt to anonymize if you own a jet or not. I personally think, while it's easy to be snarky and anything that chafes Elon tickles my censors, I think there's value to a society that gives you a certain amount of anonymity. I'm not sure I'm comfortable with people believing they have a right to understand people's movements. Okay, fine, they're billionaires. Maybe at some point you should track their climate footprint. I get it. But people have somewhat of a right – I don't want to say to be anonymous. But should you know? Is it a public right to know where someone is? I don't know. I think I come down on not being down with this, Kara. What do you think?

Kara Swisher: I agree. I'm not down with it. But I use it. So I feel like I have mixed emotions. In any case, we'll see where it goes, but it's going to continue. There's just no way around it because information is so everywhere now. One thing that's not soaring, to use a plane metaphor, shares of BuzzFeed dropped more than 40% on Monday when a ban expired allowing trades by executives and institutional investors. That's the stock's worst percentage drop yet. What do you think?

Scott Galloway: I'm bummed out. Keep in mind, BuzzFeed – what happened was insiders, the lockup expired. The lockup means the insiders can sell. The day that New Enterprise Associates and Hearst, who are investors who have been in this thing for a long time, longer than they wanted to be, the day they could sell, they're probably selling at a price, they're probably taking a loss on this thing. They're like, "You know what? We are so exhausted. Just get me out." Unfortunately, when everyone is thinking the same thing and it doesn't look like the company has tremendously strong prospects, you see a 40% decline in the price of the stock. It was up at 10 when it went public, obviously around nine or late high nines, and now it's giving it a market cap of $290 million. Numbers are hard. We understand numbers in terms of relativity until the proportions get so crazy. Here's one you can understand and one that's harder to understand. When AOL bought Huffington Post, which BuzzFeed now owns, AOL paid more for the Huffington Post than BuzzFeed is worth now, who owns Huffington Post. Huffington Post is just a part of BuzzFeed. The thing that's discouraging about this – here's another number. As of today, Meta, despite its massive decline in shareholder value, is worth approximately 2,000 times more than BuzzFeed. Google is worth 6,000 times more than BuzzFeed. It all comes back to the same thing. Unless you're a media company that has incredible scale and focuses on using or leveraging creator content – which is Latin for free content – and creates addictive attributes and has great technology and can scale to billions of people and get unbelievable advertising at low cost of content to produce, the oxygen is being sucked out of the room every day. It's very difficult for any sort of – I don't love BuzzFeed, but I would have liked to have seen it do better than this. It literally feels as if every day it's getting closer to just going away.

Kara Swisher: Yeah, yeah. It's sort of sad to see because it was considered one of the bigger ones. It certainly had a lot more relevance in terms of stories. I don't see them as much as I used to. I don't know why. Maybe I'm not going to places. You don't see them on Twitter as much. But this price of $300 million is very low. Do you see a buyer out there?

Scott Galloway: I don't see a buyer. I see consolidation. That probably at some point includes us at Vox. Vox, fortunately, has higher margins and is considered the Tiffany of the digital content space. But there's just no getting around it. Everyone's going to have to bulk up and find efficiencies or synergies, which is Latin for "okay, we have two CFOs and in 30 days we're going to have one." There just doesn't appear to be a big market for digital media unless you're TikTok, Facebook, or Google. Or you have these deep, deep brands that are owned by billionaires that can do a fantastic job, such as the Washington Post or the Wall Street Journal.

Kara Swisher: I think it's strange. I think what the BBC does or the British government does where actually everyone pays a tax to subsidize – that's not happening in this country.

Scott Galloway: Are you kidding? How politicized would that get?

Kara Swisher: It already was PBS if you remember. Every couple of years that happens.

Scott Galloway: That's a fair point.

Kara Swisher: Anyway, we'll see. We like the BuzzFeed people, but yes, it's not a good day for them. Okay, let's get on to our first big story. Apple's getting in on the buy now, pay later game. The company announced a raft of new features in iOS 16 this week, including the ability to edit and unsend iMessages, which I kind of like. But the most eyebrow-raising feature is Apple Pay Later, which lets users split purchases into four payments. The program will operate anywhere that Apple Pay is accepted. Scott, this is your area. I want to hear you pontificate on this. Affirm's stock price dropped 6% on Monday after Apple's announcement, though it's recovered. Klarna is already hurting. It was laying off staff. So what's going to happen with these smaller players? It looks like Apple's not buying them or whatever. So what do you think?

Scott Galloway: There's two things. There's the business dynamics, and then there's the larger societal impact that Buy Now, Pay Later has. Let's talk about the competitive dynamics. Apple coming into this with great technology and vertical control of the device where they can put it on the home screen. I've been using Apple Pay. I went out with my 11-year-old, and we went to get a little batch of cupcakes. I said, "I don't have any cash." He said, "Dad, they can take Apple Pay." I said, "Do they take Apple Pay?" He looked at me like an idiot and goes, "Everyone takes Apple Pay."

Kara Swisher: That's not true, son. That's not true. I use it all the time. I don't have cash anymore, and sometimes they don't. But go ahead.

Scott Galloway: Well, it is pretty powerful. Apple controlling a billion devices of the billion wealthiest people in the world – it's just such an incredible advantage over any other provider. This is just bad news for Affirm or Klarna. There's just no getting around it.

Kara Swisher: What about regulators? Buy now, pay later is being regulated. As you talked about quite eloquently last week, there's all these issues around consumer debt levels on these platforms. What do you imagine the U.S. Consumer Financial Protection Bureau, for example, is going to do?

Scott Galloway: It expands your basket size by like 45%. It goes back to what Crystal Todd said last week. We should probably be teaching less calculus in high school and more financial literacy. When you offer a 19-year-old on their way to Coachella the chance to have $500 in instant credit – my colleague Aswath Damodaran would say the best regulation is life lessons, and maybe these people learn these life lessons. But this instant credit. Klarna is reporting that the majority of their losses come from people with late payments. The financial literacy and young people getting into a hole – you don't want to infantilize them. They have to learn on their own. They have to get their hands burned. But I also think there's a role here for society to either educate people. We regulate payday loans. We put a maximum interest rate on them because we realize there's a lot of people who are not financially literate and these organizations prey on that illiteracy. This has been positioned as innovation. It's not. It's putting young people in debt. I really don't like this. I hope Apple takes a more responsible approach to it.

Kara Swisher: They may turn people down more, right?

Scott Galloway: Well, that would be a more responsible approach.

Kara Swisher: Yeah. I suspect they're going to tread very carefully into this area. They're going further and further into financial services. I have their credit card, tap to pay. Supposedly, they're working on fraud detection, credit checks, and other consumer financial services. It makes sense because I literally use this phone for all of that. Everything. Payments, whether I'm using an app like Venmo. I would use Apple to pay for it rather than Venmo or PayPal in a second.

Scott Galloway: Yeah. Some stats here. BNPL spending among Gen Z users has increased 925%.

Kara Swisher: Wow.

Scott Galloway: Among Gen Z users, one in three have been charged a late fee for getting behind on BNPL payments. Affirm increased average order value – I was wrong, I said 35% – by more than three and a half X. You think, "OK, that's great for the retailer." But it's terrible for the – at the end of the day, if somebody can all of a sudden buy three and a half times what they were going to buy before they had this cheap credit. We do the same thing with kids around student loans. We say, "Oh, get student loans." Then what do you know? The school isn't on the hook for this. In this case, the retailer isn't on the hook. What you had is companies that had infinitely cheap capital decided to take that credit risk. Now a lot of that credit risk is coming back to them. Supposedly 65% of Klarna's losses, which were dramatic, was bad credit or basically missed payments. I hope Apple comes in. This is a situation where I'm not rooting for the innovators here. I hope they take a more responsible approach. There's probably going to be some regulatory issues. They'll probably complain. But it's not in Apple's best interest to have these articles coming out, to have these TikToks showing all the stuff that people bought on Apple Pay Later that they can't pay for. That's not a good look for Apple, especially as Tim Cook has tried to position himself and the brand as being a little bit more civic-minded.

Kara Swisher: That is a good look for them, and they should maintain that posture. Yeah, I would agree. Speaking of Apple charges, the EU is killing Apple's lightning port. I'm thrilled with this, actually. I mean, they do this themselves sometimes. The new EU agreement could unify gadgets like phones, tablets, cameras, and eventually laptops around the USB-C port. Interestingly, my new MacBook Pro has both. Tech companies will have until 2024 to comply with slightly longer time for laptops. The agreement still needs approval of the European Parliament in 27 EU countries. But they pushed back at first, but now they're developing an iPhone with a USB 3. I hate having different stuff. I don't know how many chargers and dongles to fix the chargers I've bought over the years. It'll be interesting the government's trying to regulate it. It would be nice to have just one regulation. There's USB-A that people use and it's all over the place. I have so many gadgets that do different things, the old Apple stuff, and I have converters. So what do you think about this?

Scott Galloway: I remember being at the Hoxton Hotel in Paris on business.

Kara Swisher: Ah, the Hoxton.

Scott Galloway: The Hoxton. I just want to say it like that. I looked into my bag, and I realized I'd forgotten my Apple charger. I called the concierge and said, "Is there an Apple store here?" He said, "Yes." I said, "We'll run out and get you an Apple charger." He came back, and it was $260. For a charger that probably costs three dollars to produce. A lot of this – they'll come up with reasons for why they need to do this. This is simple. I don't know what this is. The mother of all planned product obsolescence. It's basically making consumers' lives harder. They don't hold the brand responsible, and they can charge so much money for what is probably the most profitable segment – accessories. It's nuts how much this shit costs.

Kara Swisher: Yeah, they've been doing this. Not just Apple. Everybody is. Then you have the Android ones. Years ago at one of our conferences, when it was an All Things D conference, not a Code conference, Martha Stewart was talking to the CEO of Sony, Howard Stringer. She got a bag and pulled out a bag of all these wires for everything that she had – dongles and wires. She started to try to take them apart and ask this great question, like, "What is going on? Can't you fix this?" This was 10, 15 years ago. It was hysterical because it was Martha Stewart, and I've never seen her with something that wasn't organized. But she was totally on. She's like, "What are you doing to consumers? Why are you doing this, Sony? Why are you doing this, Apple?" It was really a fascinating moment because she was 100% right. We'll see where they go. They're going to have to make these things simpler or have something to be unified.

Scott Galloway: I've always thought the two biggest opportunities in personal technology are, one, passwords, whether it's biometrics. I spend a lot of time every day trying to figure out how to log into Netflix on a different TV or how to – I just got locked out of my Stern email for some reason. I've got to call some nice kid at Stern and figure out how to get my email back unlocked. Also, where I think there's enormous opportunity for innovation is charging. I feel like I'm constantly – the first 10 minutes of every day, and mostly the more stressful part, is as I'm winding down and thinking about sleep, I start thinking about what things do I need to plug in before I go to sleep. It feels like nothing has ever charged. It feels like my kids are always stealing my chargers.

Kara Swisher: Oh, Alex is a total charger thief.

Scott Galloway: Yeah. There's got to be some sort of – somebody is going to rightfully become –

Kara Swisher: It's got to be Apple. It's got to be Apple or someone.

Scott Galloway: You'd think, but it hasn't happened.

Kara Swisher: I don't know. Yeah, they've definitely been foisting all kinds of dongles on us. Speaking of Huffington Post, one time Arianna Huffington gave me a little charging bed that you put your phone in at night.

Scott Galloway: Oh, you're supposed to pretend it's going to sleep and leave and not check it?

Kara Swisher: Yes, and then you put it in. I still have that bed. No one wants to take that. Anyway, are you supposed to put it outside your room? In any case, this is interesting. We'll see if legislators can legislate this. But I think one way to charge would be great or no charging at all. It just would be on all the time. All right, Scott, let's go on a quick break. When we come back, we'll talk about Twitter's political troubles and take a listener mail question about billionaires.

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Kara Swisher: Scott, we're back with our second big story. Twitter is getting it from all sides of the political aisle. On Monday, Texas Attorney General Ken Paxton, whom I like to call the dumb one, announced that his office is investigating the number of bots on Twitter. How interesting. Just Twitter? Huh. I wonder why. Who lives in Texas?

Kara Swisher: Scott, we're back with our second big story. Twitter is getting it from all sides of the political aisle. On Monday, Texas Attorney General Ken Paxton, whom I like to call the dumb one, announced that his office is investigating the number of bots on Twitter. How interesting. Just Twitter? Huh. I wonder why. Who lives in Texas?

Scott Galloway: Paxton says he wants to know if the company's reporting on real versus fake is deceptive. Of course, Elon Musk has been complaining about this, trying to get out of his deal.

Kara Swisher: Meanwhile, the January 6th committee wants Twitter to turn over internal communications about content moderation. Earlier this year, the committee said it was looking at what steps social media companies took to prevent their platforms from breeding grounds for radicalizing people to violence. Twitter has pushed back on the request, saying it violates First Amendment rights. So let's talk about Texas first. I don't think there are any risks here. This guy is such a... he's investigating the pet issue of the world's richest man who is newly Texan, Elon Musk. It's ridiculous.

Scott Galloway: Yeah, this is just stupid and gross on several levels. You have the attorney general of the second or third largest state. I'm trying to think who's under investigation. I'm trying to think what recently has happened in Texas that he might want to devote scarce government resources to. Instead, he decides to perform oral sex on Elon Musk and position himself as the friend of someone who's increasingly positioning himself as a conservative. It's a waste of taxpayer money. If he got through constitutional law classes at law school, which I imagine he did, he knows this case is going nowhere.

Kara Swisher: Yeah, it'll get slapped back by the Supreme Court. He's a stuntmeister. He was indicted on two counts of first-degree securities fraud and lesser charges of failing to register with state security regulators around a company he had. He misled investors. It hasn't been tried, but he was indicted. He's just such a ridiculous person. He was behind a lot of these election law stunts. And he's up for re-election. He beat George P. Bush for the job. Probably very popular in Texas. But this is a waste. You might want to investigate the police behavior in Uvalde. Spend time on actual things that could help people. Instead, he's doing this nonsense.

Scott Galloway: My governor is investigating Disney, trying to revoke their taxes. Now he's trying to revoke the tax status of the Tampa Bay Rays because they wrote... It's like, come on. These people, their corruption in plain sight is really quite astonishing. Not only does this not make any sense, not only is it a waste of scarce government resources, not only is it nakedly posing for the whack jobs in Iowa... Both of these people think they have a future in politics. Maybe they do, because the only people who turn out for Republican primaries are whack jobs. But this is really in the agency of something more threatening. When governments are totally overrun and weaponized by the private sector, it's a key step to tyranny. The very notion of being elected to office is that you are supposed to think long term and be somewhat immune from corporate interests. When you're doing nothing but pandering to the CEO of a company because you see this person as famous, in a case that will absolutely be laughed out of even the most conservative court, you're doing a disservice to government.

Kara Swisher: Absolutely. Why not other bots? Why not this? Why not that? He does this a lot, this particular attorney general. He's always like, "I'm fighting big tech again." Someone who likes him wrote me, "You should like him. He's fighting big tech." I said, give me a break. There are real issues we have to deal with with tech, and this clown is wrecking it for everybody else. I have no interest in what he's doing. It's not going to work, and he's doing it stupidly, and it's all political. There are serious issues we need around regulation of tech, and this guy's making a joke of it.

Scott Galloway: But the January 6th committee, I don't think is a joke. It's going to be broadcast. The committee is going to... social media is dead. I think the real aim of this committee will be Trump, Trump, Trump, Trump, Trump.

Kara Swisher: The important part for the January 6th committee, which I talked about on Sway, is how they communicate on social media. They're doing it live primetime broadcast. Nobody watches television that they need to really convince. They've got to have a big game on social media.

Scott Galloway: Yeah, they've got to orchestrate it well. Hollywood and the role that production plays here is really important. They just need to show how brazen, how planned. It's worse than we think, folks. When you really dig in, we're all exhausted from this. But when you really look at what happened and who said what to whom and what they were trying to do, it's even worse than you'd imagined. I hope they do a good job bringing that to light.

Kara Swisher: I'm excited to see it. I'm going to try to use my platforms to bring some sunlight to it because I think people are fatigued.

Scott Galloway: Well, Liz Cheney needs to do TikTok. That's all I have to say.

Kara Swisher: Liz? Yeah. She should get help from Crystal. Anyway, we'll see where it goes. Let's pivot to a listener question. You've got mail. The question comes from Molly D. I'll read it. "Hi Kara and Scott, longtime listener and fan of you both. My question is, is it possible to become a billionaire or part of an ultra-rich elite without cheating the system and or exploiting others? Are ethically made billionaires a thing?" There's a famous Balzac quote that says the simplified version is behind every great fortune lies a great crime. I don't know, Molly. The one billionaire I met who I thought was super interesting was a guy who created Kind Bars. Daniel Lubetzky?

Scott Galloway: Yeah. I know Daniel well. He's got to be a billionaire, right?

Kara Swisher: Probably. Daniel's a wonderful guy. That's the nicest ethical billionaire I've met. I think Pierre Omidyar tries very hard. The eBay founder. He gives to a lot of causes. I don't know. Scott, you do this one.

Scott Galloway: No. 100%, yes. You're falling into the trope that the far left wants to create, that billionaires, by virtue of the fact that they've been so successful and aggregated a lot of wealth, that inherently makes them bad people. That's not true at all.

Kara Swisher: I didn't think bad people. Can they get there without exploiting others or cheating the system?

Scott Galloway: Brian Chesky. Did he exploit other people? No. People say he exploited that people don't have housing. Every one of them has done something that is deleterious to society? I just don't buy that. Orrin Hellman, this wonderful man in private equity who was enormously important to Planned Parenthood. I know a lot of billionaires. On average, they're better than most people because they have to make allies along the way. They traditionally are very civic-minded people. Some are bad. Some got there by exploiting our worst instincts, like Rupert Murdoch. The majority of them got there with an incredible business mind and by creating a lot of allies. They generally are high character, patriotic, strong citizens. The worst you could say about billionaires is on average, they're no better or no worse than anyone else. What I have found is that on average, they are really good people. It is very hard to ascend to a position of power and influence and economic security if you make enemies along the way. You want to be the person that people are rooting for. The majority of billionaires... I think Mark Benioff is a really good man.

Kara Swisher: But I'm talking about getting there. The fact that someone gets that much money all by themselves when there's poverty all over the world is a disconnect that everyone's just not going to ever get used to. The money differences are so vast now.

Scott Galloway: I feel shamed. I feel shamed.

Kara Swisher: This wealth gap is so profound, which you talk about. That's a different issue, Kara.

Scott Galloway: That means you and I are failing to elect people who have the backbone to create and maintain a progressive tax system. You're right. We shouldn't have people worth $220 billion. I'm finally at the point where I'm like, does an individual need to have a quarter of a trillion dollars? Probably not. What that means is we need to elect people that enforce what has been a stalwart of our democracy. Capitalism is a progressive tax structure. When you have someone that can aggregate a quarter of a trillion dollars in wealth, that probably means the tax system is screwed up. Does it mean they're a bad person? No.

Kara Swisher: Fair. Let me just say, billionaires, we like some of them. How's that? Who's your favorite billionaire? You said Mark Benioff?

Scott Galloway: I think there's a lot of wonderful... I think Brian Chesky is a wonderful young man. I think Beyonce is an amazing, impressive woman.

Kara Swisher: Beyonce. Oprah. Is Oprah a billionaire? She's got to be, right?

Scott Galloway: She's a billionaire, yeah.

Kara Swisher: Okay, Oprah's my favorite billionaire. I don't think she cheated the system or exploited others, did she? I don't begrudge any of them. Something I don't like about the far left, when Senator Warren goes on and says they're money-grubbing investors and starts calling them the billionaire class... It's called politics. Welcome to politics. But that doesn't help us.

Scott Galloway: How would you get... we need to tax these people because they have a lot of money. That's not going to work as much as... look, it's Simon Legree. Let's grab his money. Demonizing him doesn't work either. We need a progressive tax structure to pay for everything from parks to our police to our amazing Army Rangers. When Bernie Sanders says they need to pay their fair share, I think that's a legitimate argument. But when he calls them the billionaire class and calls them money-grubbers, it just isn't true. What happens? Does that mean $990 million in wealth, you're an okay person? If I'm worth $100 million, does that mean I'm tenth as bad? It's a trope. It's a cartoon. Judge people on their character and their actions. The thing about billionaires is everything they've done gets greater scrutiny, as it should be. But the guy running three car washes has also done some shit in his day.

Kara Swisher: Let me just say, the Sacklers are different than Benioff. 100%. You have to have a little more justification.

Scott Galloway: Pivot, colon, a safe place for billionaires. Billionaire safe. Come visit us. We'll just hit you a little bit. We'll take your money and hit you a little bit.

Kara Swisher: Anyhow, it is an interesting thing. I think I would agree. But Molly, thank you for the question. I think in some cases, a lot of ultra-rich elite did cheat the system and exploited others. And others...

Scott Galloway: What I will agree with Molly on, we absolutely need... and this is where we've spoken. We need less billionaires and more millionaires. We need a system...

Kara Swisher: How about we need enough people who are getting a working wage? That's the American dream. And unfortunately, it's less possible. $30 an hour. $25. If you're a good citizen, you work hard, you save some money. There is absolutely no reason why in this America, by the time you are ready to retire, you can't be a millionaire. That is the American dream. When you let people aggregate so much wealth without reinvesting in the same infrastructure and the same freedoms that got them there, you reduce the number of millionaires. It becomes a lottery economy where we all incorrectly assume, "Well, my son is going to figure out a way to be a billionaire." No, she's not. And she's less likely to become a millionaire and economically secure unless we reinvest by taxing these people at the rates they were supposed to be taxed.

Kara Swisher: A larger problem is it does create a very unstable society. Income inequality throughout economic history... when you have people at the very tippy top with obscene fortunes, and you have the middle cut out and very poor people on the bottom.

Scott Galloway: 100%. I did say this to a billionaire: "You need to do something about this or you can armor plate your Tesla."

Kara Swisher: They were like, "Cool, armor plate my Tesla."

Scott Galloway: The poor, as a percentage of GDP, have held their own. It's the middle class that got kicked in the nuts.

Kara Swisher: That's correct. The middle has been squashed. We've got to stop this myth that rich people who give money to elected representatives... there's this trope that the middle class will restore itself. No, it's not organic. It has to be supported. The only way you support it is with taxes. The only way you have an effective democracy is through a progressive tax system.

Scott Galloway: Income inequality... here's the good news. When we get to these levels of income inequality, it always self-corrects. The bad news is the mechanisms of self-correction are war, famine, and revolution. What we have in this country, in my view, is famine, pestilence, and because of income inequality and politicization, it killed more people than it should have. We have revolution. People get so upset about so many things because there's no connective tissue, no common narrative. In other words, billionaires are good. Billionaires are bad, Molly. That's the situation.

Kara Swisher: All right. If you've got a question you'd like answered, send it our way. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. All right, Scott, one more quick break. We'll be back for wins and fails.

[Break]

Kara Swisher: Okay, Scott, I can get to your win, but I'm going to go first if you don't mind.

Scott Galloway: Please.

Kara Swisher: Okay. You're the one with a new podcast. Everyone is totally fucking confused. We're not getting a divorce, for fuck's sake. We are not. I will tell everyone. Not at all. I'm doubling down on Pivot. My 14-year-old asked me, "So you're going to have your own podcast?" I'm like, "I already have my own podcast. Do you know nothing about me? Have we met?"

Scott Galloway: He listens to mine, probably.

Kara Swisher: Anyway, I give the win to Matthew McConaughey. I did a great interview with him on Sway, which he didn't do very well on because he didn't know things that were happening in Texas. But he appeared at the White House on gun reform. Let's listen to it.

[Audio clip plays]

Matthew McConaughey: Look, this should be a nonpartisan issue. This should not be a partisan issue. There is not a Democratic or Republican value in one single act of these shooters. It's not. But people in power have failed to act. So we're asking you, and I'm asking you, will you please ask yourselves? Can both sides rise above? Can both sides see beyond the political problem at hand and admit that we have a life preservation problem on our hands?

Kara Swisher: Wow. He went full McConaughey. I thought it was very effective for the White House to bring him in. I don't always love celebrities, but he's from Uvalde. I think he was thinking of running for Texas governor and decided he wasn't. I think it was important to bring someone like him in. I don't think it was a stunt. That was a win for me. Scott, your win?

Scott Galloway: First off, I think that is a great win. You're right, it was smart. He's not seen as political. He's really likable. It's important and effective to use celebrity. I like it when they have celebrities address the U.N. Effective use of celebrities.

Kara Swisher: I think it's fine. People admire them and listen to them, and it gets attention to the issue. I like Matthew McConaughey. A lot of people really like Matthew McConaughey. That's a great win. Well done. So my fail is... there's been really important gun legislation that's going to pass that bans pistols. The majority of gun death, despite the headlines which are understandably tragic and crazy, the majority of gun deaths are people who feel as if they have no way out and everything around them is just so black. The first thought they have is, "I have a gun," and they take their own lives. The good news is it looks like gun legislation around banning pistol sales and assault weapons is going to happen. The bad news is it's going to happen in Canada. If you look at democracies that look strikingly similar to ours on a lot of levels, whether it's Australia, the United Kingdom, or Canada, none of them are immune from mass shootings. They have all had them. The difference is literally within days of them happening, the political parties get together. Granted, it's usually a parliamentary system, which is much easier to govern in. If you look at U.S. and European diplomats, we usually encourage a parliamentary system for emerging democracies because rather than having three checks and balances which just creates total gridlock and minority rule, which is what we have here, they get together and say, "All right, kids have been shot up. Why don't we do the following three things?" And everyone says, "That's reasonable," and they do it. My fail is that it is just so obvious our system needs real serious reform because every other nation like us... our society is not totally unique here. It's not exceptional on most levels. What's exceptional about us is we can't get anything done. It struck me that almost right away we have a mass shooting in Canada, and they respond with gun legislation because they are reasonable people who get along and decide to pass it. New Zealand, everyone else, immediately.

Kara Swisher: 100%. That testimony was wrenching from the survivors. Of course, they've had so much wrenching testimony. You're correct.

Scott Galloway: Okay. My win is there's an artist named Marina Amaral. I just reached out to her and asked her to commission a piece of work. She does this amazing colorization of historical photos. There are a lot of cool colorized photos. If you ever go on Google, look up colorized photos. The Lincoln ones are particularly gripping. Occasionally you find an image that really moves you or stills you. On the 78th anniversary of D-Day on June 6th, there's this incredible image of soldiers getting off a landing craft. It struck me that imagine all of these individuals wading into cold water, knowing there's a really decent chance they're not going to make it out of that water. Imagine all the women in factories trying to provide armaments. Imagine all the fathers and mothers that lost people. Do you think any of them would look at our problems and think, "Oh, you can't solve teen depression? Oh, you can't solve polarization?" It was such a striking reminder that if America can push back fascism, if we can bring AIDS to its knees, if we can reduce the number of drunk driving deaths, if we can absolutely push back on this pandemic... to believe that we can't address gun violence, to fall into the ridiculous notion we can't address teen depression is such an insult to people who have turned back things much more menacing, much more dangerous. This photo was so moving. She put out a bunch of them. The power of images... this woman has done a great job colorizing all of this. It brings forward that the issues we face are not intractable. What's disappointing is the notion that we believe they're intractable. We have faced down much scarier shit than this.

Kara Swisher: Yeah. The anniversary of D-Day really brought home that I think what people would be disappointed in is that we are letting this tear apart our country. Agreed. In that regard, I think my fail has to be the defensive coordinator for the Washington Commanders, Jack Del Rio. He called the January storming of the U.S. Capitol building a "dust-up" in comparison to the racial justice protests that followed George Floyd's death in 2020. He apologized for it, but so many people think this. You don't have to like looking at one of the worst times in our history, and there have been many, but you can't minimize it. Stop it. It's not a dust-up. Jack, honestly, keep it to yourself. I usually don't say celebrities should keep their mouths shut, but focus on football at this moment. Don't use diminishing words. People died there. The police tried to hold it back. Stop it. It's the Capitol. I get your issues around Black Lives Matter destroying some businesses, but this is a very different situation. Trying to stop an election by violence... if I have to stack rank these things, Jack, you better believe I stack rank this much higher. Most people do if they're being sensible.

Scott Galloway: Anyway, Scott, that's the show. We'll be back on Tuesday with more Pivot because I am doubling down on Scott Galloway.

Kara Swisher: That is why I'll be back more.

Scott Galloway: That's a good bet. As Peter Drucker said, invest in your opportunities, not your problems.

Kara Swisher: Well, you're both. That's really good. I'm good at you both. Okay. Scott, read us out.

Scott Galloway: Today's show was produced by Lara Neyman, Evan Engel, and Taylor Griffin. Ernie Injertot engineered this episode. Thanks also to Drew Burrows and Mil Severo. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. We turned back fascism, HIV, drunk driving, the pandemic... gun control, gun violence. Come on. We can absolutely fix this. We have the will. We will do this.