Disney Sues DeSantis, Meta's Good Quarter, and the Case Against TikTok with Senator Michael Bennet

Kara Swisher: Not all journalism is the same. Take The Guardian. Our coverage has something unique. Fierce independence. Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe. Expose corruption wherever we find it. And give fresh perspective on everything. From wellness and soccer to culture, the climate and more. Read, watch and listen to The Guardian for free at theguardian.com.

Kara Swisher: AI agents are getting pretty impressive. You might not even realize you're listening to one right now. We work 24-7 to resolve customer inquiries. No hold music, no canned answers, no frustration. Visit sierra.ai to learn more.

Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And Scott, I did not find Doja Cat last night with my son, Louis Swisher. I have no idea what that means.

Scott Galloway: And I'm Scott Galloway. I went to the Time 100, which is a big event in New York by Time Magazine. Mark Benioff was there. And Doja Cat was one of those on the 100 list. And so was Elon Musk. He wasn't there. Thank goodness. Louis would have had to intervene.

Kara Swisher: Oh, you wrote that thing up on Elon. You had actually...

Scott Galloway: Yeah, I did.

Kara Swisher: You had a great line. The last line, you said something along, "What is the opposite of progress, Elon Musk in 2023?" I thought that was a great line.

Scott Galloway: I only had 175 words, so I had to be choice. Anyway, it was really cool. I wish you were there. You would have liked the party. It was fun. Natasha Lyonne was there.

Kara Swisher: I was invited last year. I wasn't invited this year.

Scott Galloway: Oh, you have to write something, I think.

Kara Swisher: I think that's what I did. Anyway, it was really great. I went with Louis Swisher, which was really fun.

Scott Galloway: That's nice. You're one of those people that brings your kids. It's incredibly indulgent and spoiled. That's nice.

Kara Swisher: Yet, that's who my date was. That's who it was.

Scott Galloway: Did you guys go drinking afterwards?

Kara Swisher: He's 21 now. He's not 21. He's 21 in a few weeks.

Scott Galloway: Oh, he's not going on yet. Okay.

Kara Swisher: He's going out with the dog. He is. That's right. He's going to roll with the dog. Optionality. I can teach him how to endure rejection from home. I can show him how it's done.

Scott Galloway: Okay. You've now become like a little dad figure. Jeff Swisher is going to be mad, but they do listen to Scott Galloway. They like Scott Galloway. Thanks for sharing that.

Kara Swisher: I know. It's a really bad influence. After years of lesbian child raising, you're going to come and ruin it all. I made these nice men.

Scott Galloway: First off, I'm an enormous fan of lesbians.

Kara Swisher: Yeah. I get that.

Scott Galloway: Just through a different lens.

Kara Swisher: Just through a different lens. Don't. Don't. I've gotten a lot of emails about your penis jokes. I'm supposed to bother you about it, but I'm not going to.

Scott Galloway: Just tell your friends I'll help them on the hard parts.

Kara Swisher: No. That was good. A penis joke on a penis joke. These are emails from listeners. Do you know it's a lesbian appreciation week? By the way, I went out with my friends from the L Word, including Jennifer Beals. It's Lesbian Appreciation Week. You should appreciate the lesbians. They were at the White House.

Scott Galloway: Every week it's Lesbian Appreciation Week. That's a fair point.

Kara Swisher: Anyway, I appreciate lesbians for sure. We have a lot to talk about. Earnings are in for tech giants. Guess what they're talking about? Also, Disney ramps up its fight with Ron DeSantis. And we'll speak with Senator Michael Bennett, one of our favorites, about TikTok, Twitter, and the Supreme Court. But first, First Republic Bank may be collapsing after all. The bank reported an over 40 percent drop in deposits. As you predicted, Scott, that this was going to be a problem. Stock of First Republic has fallen almost 95 percent year to date and trading has been halted several times this week for volatility. According to the latest earnings call, the bank is pursuing strategic options and taking actions to restructure its balance sheet. Reminder, last month, 11 larger banks gave First Republic a $30 billion attempted rescue. Scott, I defer to you.

Scott Galloway: Yeah, but this is... I don't want to say it's a good thing, but when the crisis erupted, there was a fear that it was going to take down the entire economy. And then it got ring-fenced to regional banks and SVB went away. And now it looks as if it's ring-fenced to one bank. You're not seeing headlines about the next bank to fall and seeing its stock crater. So I actually see this as the remnants, or the seventh or eighth inning, in what is a short-term crisis. The other thing that was shocking: it lost a dramatic amount of its deposits, but it said 97% of its clients were still with it. So how does this end? I can't imagine that the Treasury Secretary isn't on the phone with a lot of different banks saying, "Who wants a deal here and will facilitate it?" Banks are calling around saying, "Okay, most of the bad news is out. Would you like to acquire this bank for pennies on the dollar?" You can bet that the folks at the Fed and Treasury are trying to facilitate a transaction because they just want this out of the news. The last thing they want is someone else going, "Oh, wait, what about this bank?" The next potential shoe to drop is which banks are most vulnerable to what people see as the other real soft tissue in the economy right now: commercial real estate. But I would argue that the circumference of the ring fence is getting tighter and tighter, meaning the crisis appears to be in its late stages. And just when that happens, the debt ceiling fight with Kevin McCarthy deciding to play chicken with the economy. But we'll get to that in another show as it moves forward.

Kara Swisher: Yeah, I agree. I think I'm a little less panicked. But with the debt ceiling talks and other things and the signs of more recession, it makes me a little more worried than you. Another thing that happened: Microsoft's acquisition of Activision Blizzard continues to face hurdles. The antitrust regulator in the UK has blocked the deal, not unexpected, over competition concerns, saying Microsoft already holds 60 to 70 percent of the global share in cloud gaming. Both companies plan to appeal the decision, with Microsoft President Brad Smith saying it reflects a flawed understanding of the market and the way cloud technology works. I have to say I agree with Brad Smith. They're so much bigger, and they're all Chinese-owned companies in this area. Shares of Microsoft are up almost 6% in the last five days, while shares of Activision are down almost 10%. What do you think? They are appealing it, and they think they have a good case, but you don't tend to win in Europe on these things, historically speaking. Thoughts?

Scott Galloway: Well, two things. I now believe there's a decent chance it's not going to go through. And two, I think it's good for Microsoft. If you look at the stock, the stock's up. Activision stock is off 11%, but Microsoft is up. Microsoft is firing on all 12,000 cylinders right now. My colleague, Aswath Damodaran, always says two-thirds of acquisitions don't work. They don't need to do anything to keep winning. Everything is working right now. So you're going to inject new risk with an acquisition. Granted, Microsoft is in such a position of power here — heads they win, tails they win. If the acquisition goes through, okay, fine. If it doesn't go through, the market seems to be down with that. They seem to be absolutely fine with it.

Kara Swisher: I had someone tell me the money was better spent elsewhere. That's what someone pretty high up said. And I was surprised. They said, "Well, they can take that $70 billion and focus on AI where they're winning." They don't need it. And it's small now. Before they needed a little bit of juice and now they don't need juice. So a lot of people... It would be interesting. They will have to pay a breakup fee. And that company, which had a lot of sexual harassment allegations and a bad culture, that's been cleaned up a little bit. People have passed that. So they may be able to sell it again to someone else. It's a great company. The takeout premium, they'll lose the takeover premium, but it's a great company with great titles.

Scott Galloway: Yeah. And it will get a breakup fee, a big breakup fee.

Kara Swisher: Is it a big breakup fee?

Scott Galloway: Yeah. So I don't... Nobody... It sounds to me like everyone's going to be just fine.

Kara Swisher: Although I have to say the regulators are wrong. The big companies are Chinese-owned, all the big companies in this area. They are not the biggest player here. If you look at the real overall market, it's dominated by Chinese companies and Japanese companies. And I think you're right. They're going to abandon it, would be my guess. Peter Thiel is also speaking of abandoning, over culture wars. The Republican megadonor reportedly won't be donating to any politicians in 2024. Why? Because of the party's focus on culture issues like abortion and transgender bathroom laws and all kinds of anti-trans bills and anti-gay bills. Peter Thiel obviously is gay. People know that. But I think he just doesn't like the culture issues being focused on. He's an economic kind of guy. In the 2022 election cycle, Thiel donated over $35 million to 16 federal Republicans, 12 of whom won their races. He had some big losses, obviously, in Arizona in particular. What do you think? What do you think about this? He's not going to be a player. He's been a big player in the Republican Party.

Scott Galloway: Yeah, but it's more spectacle than significant. The thing that this highlights is that our elected officials — I'm saying this in a very reductive way — are not only whores, they're cheap whores. For $35 million, which in the context of being a billionaire isn't a lot of money, you can basically become more powerful than any senator or congressperson by just spreading the money around. The thing that's always really disappointed me about these individuals is not that they're pay for play, but they're so cheaply bought. Shouldn't they raise their prices?

Kara Swisher: I think so.

Scott Galloway: For $35 million, Peter Thiel literally makes $100 million or loses $100 million in a good or bad week in the market. And for $35 million, he can be a player on a federal level. It's striking how cheap it is to be this kind of player. In any case, I think he'll return right back in if he needs to. With Trump, he'll probably back Trump. He was one of the first and early backers of Trump.

Kara Swisher: Agreed. I think he'll just come right back in when he needs to because he's so cynical.

Scott Galloway: 100 percent.

Kara Swisher: I think this was... He woke up with weird blood sugar and said, "I'm out, I'm done."

Scott Galloway: Well, I suspect he thinks it's stupid. I don't think he cares about abortion. I don't think he cares about gay rights necessarily. I don't think that's his issue. I think it's like, "Oh, this is a waste of my time. I want them to do other things like destroy the EPA." That's where he is. I think he's just not getting what he's paying for, for cheaply.

Kara Swisher: You're right. We should have that. We should start doing this, spread our money around and start doing influence.

Scott Galloway: Yeah, let's start a PAC. What would we call it?

Kara Swisher: Spread our money around to whores. I do that.

Scott Galloway: Oh, you mean politicians.

Kara Swisher: Let's call it Whore PAC.

Scott Galloway: Let's call it Whore PAC. I'm in.

Kara Swisher: I'm in.

Scott Galloway: No, let's call it Les PAC.

Kara Swisher: Les PAC. I'm in.

Scott Galloway: I think Whore PAC.

Kara Swisher: I don't know. We'll see. Well, we're thinking of it. Everybody get ready for Scott and Kara in the political arena. Sorry, Peter. We're going to take your place. We got to make money first.

Scott Galloway: You know, us together makes a Peter Thiel, I think.

Kara Swisher: I'm not sure. Let's think. Oh, God. Let's get to our first big story. Earnings are in for some of the largest tech giants, and there's only one thing they can talk about on the earnings call: AI. Microsoft mentioned artificial intelligence 50 times during its victorious earnings call, as you noted. It also beat expectations for quarterly revenue, but AI wasn't what put it over the top. It was actually strong growth in cloud computing. The two aren't totally distinct. Microsoft says in the next quarter, AI will account for 1% of its growth in the cloud business. Meanwhile, Alphabet also had good things to report on cloud computing. Sales rose for Google Cloud and shrank slightly for Google's ad business. Again, not a surprise. But AI was still a huge talking point for Alphabet CEO Sundar Pichai. He talked up the company's Bard AI and other efforts. Alphabet also announced a $70 billion stock buyback. That certainly helps the stock. Even Meta had good news this week. Its revenue jumped this quarter after three straight quarters of losses. In his opening statement on the earnings call, Mark Zuckerberg spent six minutes discussing AI and what happened to poor little Metaverse? For the Metaverse, he gave it 90 seconds. 90 seconds. What do you think?

Scott Galloway: I was trying to muddle through the earnings report. It looks to me like there's been some sleight of hand here. As they've taken some costs and reallocated them out of cloud and into other things, for the first time they could report that their cloud division is profitable, which is a really exciting thing to say on an earnings call. But they have to come up with a certain amount of jazz hands here because they've been caught flat-footed by Microsoft and others with AI, 100%. Also, I thought the more interesting earnings call and stock acceleration is Meta. If you look at Meta's stock in the last six months, it has doubled, but that only takes them back to where they were 12 months ago because the stock crashed so much. I believe the stock's comeback is based on a few things. First and foremost, people believe that Mark Zuckerberg is coming back from this big gulp, ayahuasca, grande venti hallucination around the Metaverse, which is, as far as I can tell, just a giant incel panic room that no one's going to. This is my favorite stat: MySpace will get more traffic today than Meta's Horizon Worlds, than its Metaverse.

Kara Swisher: [Laughs] I'm still laughing about that joke. That's a good joke.

Scott Galloway: And by the way, Twitter has turned into a 50-plus incel panic room as far as I can tell. Anyway, the number that really stuck out: $4 billion loss on $300 million in revenue in Reality Labs. And their revenue's down 50%, meaning no one's even buying an Oculus anymore. And this is what the market is so excited about, Kara. Everyone goes, "The news is so bad. And Mark is talking about other things." They're like, "Oh my God, he's out of rehab. He's back. It's the mendacious fuck, but the smart mendacious fuck we know, who's back focused on the business that's growing." The other thing here, you've got to give it to them. You know who's benefiting more from people going after TikTok? Meta, specifically Reels. Reels' business was way up. If you look through the numbers, while their impressions were up 27%, the costs or what they were able to charge were down 17%. So they're able to grow the revenues while making the product much cheaper. What it looks like here is they have used, I don't know if it's AI or something else — they will claim it's AI — to do a workaround of the privacy regulations imposed by Apple that hamstrung their efforts. It looks like they've kind of figured it out. Reels is firing, taking advantage of a weakened and distracted ByteDance/TikTok. And investors are like, "Oh, thank God, the old Mark is back focused on this cash volcano." Now, what if the quarter AI doesn't live up to the hype? If it doesn't bring the year of efficiency that he's hoping for, besides doing layoffs, that's one of the things. If they lean too hard into AI before it's a real business, I think that's an issue.

Kara Swisher: There was a stronger quarter for advertising and Google's ad business was better. Is that a good tell for the strength of the economy? Because every indication is recession, recession, recession. We've been a month away from recession for 18 months. I'll say it again: if the media wasn't telling you a recession isn't pending, you wouldn't think it is. I mean, where do we see the recession coming from? Is it employment at historic lows? I'm reading you: "Amid new recession fears, U.S. economy grew at 1.1% in early 2023," pointing to significant slowing. So there's a lot of indications. Meta, I think... It's so interesting. Twitter and Elon Musk have provided so much cloud cover. The percentage of Meta's workforce that has been laid off is 24%. Meta, under the cover of dark, has laid off a quarter of its workforce. That is enormous. And all of that flows to the bottom line. Let me ask you this: does Instagram feel any different for you?

Scott Galloway: No. No. I think it's quite good. I've been using it a lot lately. Again, I can't believe I'm returning to Mark. I've got to say, it's so good. Let me just tell you, the ads are... I want to buy pretty much every ad I see. And when I go to Twitter, I'm like, "Get the fuck off my feed, you weird little companies." They feel like late-night cable, like real late night.

Kara Swisher: I had such a disturbing moment on Instagram. It served me this reel for a cruise. And I thought, "I'd like to take a cruise." And I'm like, "Oh my God, I'm old. I've officially become old."

Scott Galloway: We should do a cruise.

Kara Swisher: Yeah, here you go.

Scott Galloway: We should go on a cruise together after we start our PAC. Just saying. People love us. We would have a cruise.

Kara Swisher: I know that. I know. People love us. I know. They do. I was in a restaurant in New York and the hostess, as I was leaving, this is what she said: "I love you and Scott." This is the hostess at a fancy Greek restaurant.

Scott Galloway: Really?

Kara Swisher: I was like, "Thank you." Yes. I'm just telling you. I mean, we should do a cruise. That would be great.

Scott Galloway: I feel like we should.

Kara Swisher: That's on the backside of our career when we start being the entertainment on cruises, just so you know. That's our winter. And next up: dinner theater with the dog and the jungle cat.

Scott Galloway: I'm just trying to increase our relationship. I want to do Whore PAC. I want to do a cruise.

Kara Swisher: I just feel like it's...

Scott Galloway: Whore PAC. Whore PAC. Whore PAC.

Kara Swisher: I'll do Whore PAC. You love that. I will do that. You like that idea. I can see it. Yeah, I do that. Anyway, let me ask you about the stock buyback. That feels like an old company thing to do. President Biden called for a tax increase on stock buybacks in the State of the Union. And Google's going for a $70 billion one. Stock buybacks are currently taxed at 1%. So what do you think of buybacks?

Scott Galloway: Look, buybacks are a great way to return, or a very efficient way to return money to shareholders. Rather than a dividend, you don't have to pay, or the taxes on your stock going up are deferred until you sell it. Sometimes a mature company needs to realize it's no longer 18 and should return money to shareholders. Having said that, there is some truth to the notion that when companies are constantly... Here's how a company behaves. If you really want to try and predict how a company is going to behave, you think, "What's good for the company?" Nope, that's not how they behave. "What would be good for growth?" Nope, that's not how they behave. What drives behavior at companies is what will get the stock up in the next 12 to 36 months because that's how the people making the decisions get compensated. Quite frankly, the fastest way to get a sugar high in the stock price is to do a share buyback with your cash on your balance sheet. The volume of capital that's been allocated to stock buybacks has been so extraordinary, and people are worried, rightfully so, that shouldn't we create more incentives that balance CEO desires for greater compensation — where 97% comes from the stock price — such that they invest back in the economy? They say, "We need to hire more people. We need to find investments we can make to try and grow the economy." So I do think it probably makes sense to increase the taxation on buybacks, but it's still a very efficient way to return money to shareholders.

Kara Swisher: I get it. I also think, don't they have something to do with the $70 billion that's not a buyback?

Scott Galloway: Well, that's the argument.

Kara Swisher: That's the argument. They're still too young. It's like a grandpa move. It feels like a grandpa move. "Here, here's a dollar for your birthday," that kind of thing. And I think they also missed the boat. Again, I like Sundar Pichai, but on this AI stuff in search, they never innovated search. Search has not been innovated, and they're going to pay the price for that. But we'll see if they can do it, and they could use that $70 billion dollars to do so. Anyway, let's go on a quick break. And when we come back, Disney versus DeSantis goes to the feds. We'll speak with Senator Michael Bennett about TikTok bans.

[Ad Break]

Kara Swisher: Avoiding your unfinished home projects because you're not sure where to start? Thumbtack knows homes, so you don't have to. Don't know the difference between matte paint finish and satin, or what that clunking sound from your dryer is? With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top-rated pros, see price estimates, and read reviews all on the app. Download today.

Kara Swisher: Support for Pivot comes from LinkedIn. From talking about sports to discussing the latest movies, everyone is looking for a real connection to the people around them. But it's not just person to person. It's the same connection that's needed in business. And it can be the hardest part about B2B marketing: finding the right people, making the right connections. But instead of spending hours and hours scavenging social media feeds, you can just tap LinkedIn ads to reach the right professionals. According to LinkedIn, they have grown to a network of over one billion professionals, making it stand apart from other ad buys. You can target your buyers by job title, industry, company roles, seniority, skills, and company revenue, giving you all the professionals you need to reach in one place. So you can stop wasting budget on the wrong audience and start targeting the right professionals only on LinkedIn ads. LinkedIn will even give you $100 credit on your next campaign so you can try it for yourself. Just go to linkedin.com slash pivotpod. That's linkedin.com slash pivotpod. Terms and conditions apply. Only on LinkedIn ads.

Kara Swisher: Scott, we're back. Don't mess with the mouse. That was Disney's message to Governor Ron DeSantis this week. The company filed suit in federal court accusing DeSantis of engaging in a, quote, "targeted campaign of government retaliation" after the company came out against the so-called Don't Say Gay Bill. That's what it was, as it's turned out. Disney says that the governor's actions violate the company's constitutional rights, including protected speech. This is amazing that he did this. I'm not surprised. I think Iger has nothing but disdain for DeSantis. He thinks he's a piker. And it was interesting. Let me point out, a lot of people say — there's a joke on the internet, I can't remember who said it — but a lot of people said Disney is a law firm that runs a theme park around IP and all kinds of stuff. So I wasn't surprised they did this, but the antipathy they have for DeSantis is quite significant. What do you think?

Scott Galloway: Oh, I think the mouse, specifically Bob Iger, is going to rip the governor limb from limb on this. Disney has so much goodwill. They're the biggest private employer in Florida. This is overreach. This feels like political retribution. There's just so much wrong with this. It's really... As much as I hate his policies, Governor DeSantis has been very disciplined around messaging. I think this is the beginning of the end of his presidential campaign.

Kara Swisher: Oh, most people do. Because I don't think he has the presence or the maturity to walk it back and try to make peace with the guy. The best thing you could do right now is figure out a way to fly to Burbank and kiss and make up, swallow his pride and say, "We've come to an agreement." He won't. He can't. He's gone all in on Disney.

Scott Galloway: I don't think Iger would meet with him. I think he thinks he's an imbecile.

Kara Swisher: I mean, he thinks he's an imbecile. You're probably right. And why would you? I think everything feels emotional. It does not feel calculated. And I think Iger has been quietly analyzing it and then doing this. They don't do things with... Disney does things with total calculation. I think they know what he's doing it for: Iowa, the base in Iowa. And they find that repugnant and they don't care. They don't care what he does. It's just not against them. They're not using Disney as a... to smack around, and you just can't smack around Disney. I just feel like this is so outmatched in terms of quality of intellect and quality of execution. The judge in the case has struck down DeSantis' laws in the past, including one that restricted voting rights. The issues around their employment in the state — they're the biggest employer, big taxpayer. You can argue about this Reedy Creek Improvement District all you want, but there hasn't been a real problem with it. That's the other thing. He has a solution in search of a problem. And he doesn't need to then put a DeSantis board who's unqualified to run it. Disney's been running it rather well. They've been running it rather well and paid taxes, et cetera. There are lots of special innovation zones that tech companies want. No one was complaining about Disney. Nobody. People were complaining about an overreaction to COVID. He ran through that. People were complaining that a certain woke narrative had overtaken our schools. Whether you believe in those things or not, he stepped in. He ran a truck through those opportunities. This was a bridge too far. This will be seen as his undoing. Even Nikki Haley had, I thought, the best statement on it. She said about Disney, she said, "Come to South Carolina. We're not woke, but we're not sanctimonious either."

Scott Galloway: South Carolina. South Carolina, excuse me.

Kara Swisher: South Carolina, South Dakota. That's Kristi Noem or whatever. Yeah, there you go. Anyway, I just... This is serious damage control right now. All I have to say is I want an Iger-Bennet ticket in 2024.

Scott Galloway: Yeah, that would be... He told me we don't need another white guy, and them's two of them. So he said that explicitly on stage.

Kara Swisher: But I think this culture war stuff works only so far. They've got to find the right targets. They spent years on the bathroom thing that didn't work. Then they went for the athlete thing with trans people. That did work. I think the boycotts on Disney... They used to always say this when they let gays in. But what killed me, which I thought was so funny, is the day that he was doing this, Disney announced a massive gay event at Disney World. And I was like, "You're not even trying not to troll this guy." This has been a fight for years. But Disney has just been very consistent on being friendly to gay and lesbian customers. So what? They are happy with all kinds of customers. Also, I think Florida, distinct of our governor who is passing these... There's something quite depressing about this. The end of Governor DeSantis might be that he took on Disney. Not the fact that he's trying to send women back to old Spain with what is a primitive abortion law. Not the fact that you can now — he passed, under the cover of dark, a law that says you can carry a concealed weapon without a permit. If you want to terminate a pregnancy because of incest, you have to get a police report. I mean, this stuff is just so vile. And yet it's like, the thing that's actually going to take him down is taking on Disney.

Scott Galloway: Well, it doesn't matter.

Kara Swisher: But it's true. The other thing is that he just, I think, underestimated. Florida has a really robust and wonderful gay community. And they drive a lot of business. I mean, there are whole parts... I've spent a lot of time in Key West. The gay community is thriving there. I just can't believe at some point the demo and democracy does kick in here. One would assume.

Scott Galloway: But I'm thinking of the Weimar Republic, where it was a huge Berlin gay community and then they killed them. So I think it can go a lot of terrible ways.

Kara Swisher: But I would agree this is dumb. This is so...

Scott Galloway: That escalated fast.

Kara Swisher: I'm sorry. Haven't you seen Cabaret? Haven't you seen Cabaret Berlin stories?

Kara Swisher: Yeah, you're right. No, people think it couldn't happen here. It can. I agree. They can come at you. But I do not think that that's where the country is in a different way. We have a much more vibrant democracy, a much more diverse democracy than they had in the Weimar Republic. And they had all kinds of economic issues post-war, all kinds of differences. But they can come at you. When I told you they were going to come at 12th graders, you said, "No, they're not. It's young kids." And I was like, no, they're not. It's everybody. They're trying to win what they lost back, and they will stop at nothing. They never go away. They're like mold, these people.

Kara Swisher: I don't know. But as it relates to Disneyland, Disneyland is exactly like sex with my ex. I'd have to wait in line for an hour, and then I was told I wasn't big enough. That's good Disney humor. Okay. All right. On that note, anyway, bye-bye, your nice work. I got to say, oh, God. And just think, in the same show, we'll have a senator on. Yes, exactly. All right. Let's bring in our friend Pivot, speaking of which. Senator Michael Bennett represents Colorado in the United States Senate, where he serves on the Select Committee on Intelligence. He's also co-sponsor of the Restrict Act, which, if passed, could ban TikTok. And full disclosure, Scott donated to the senator's 2020 presidential campaign. I did not, Senator. I'm really sorry, but welcome to Pivot.

Michael Bennet: Well, Scott's one of the only people in America that noticed that I had a presidential campaign, which I deeply appreciate, and the donation as well. Thank you.

Kara Swisher: In any case, you probably did a lot better than Ron DeSantis is about to do. Anyway, a little joke, a little tech joke. Can I ask you this about Ron DeSantis? How you can claim that you're the freedom guy when you're banning abortion at six weeks, when 75 percent of Floridians, including 60 percent of Republican Floridians, say they're against it. I don't understand.

Michael Bennet: Yeah, he's a conundrum, as they say. A mystery wrapped in a conundrum.

Kara Swisher: Anyway, before we get into tech, we want to ask you some of the biggest news facing the Senate right now. There are ethical concerns around two Supreme Court justices: Clarence Thomas around Harlan Crow and the travel and his mother's house, and Neil Gorsuch, who sold property to the head of a law firm shortly after confirmation. Senators Markey and Blumenthal have called for Thomas to resign. A handful of representatives have said the same. Chief Justice Roberts has declined to testify before the Senate Judiciary Committee on the topic. Should the chief justice testify, and does the Supreme Court need an enforceable code of ethics?

Michael Bennet: I think the most important thing is that they should have an enforceable code of ethics, and they should be standing for that. The chief justice, I think, should have a particular responsibility for that. One of the reasons why he's not testifying, I'm sure, is that he views it as an incursion on their prerogatives as an independent branch of government. Well, if they are going to be an independent branch of government, maybe they ought to think about setting up some rules that could give the American people some much-needed confidence in the Supreme Court. So I hope they will do that.

Michael Bennet: I am a lawyer myself and really, really discouraged about the point where we've gotten, not just in terms of where the Supreme Court is, but where the Senate confirmation process has led us, which is to create just one more partisan food fight that the American people aren't even paying any attention to anymore. I think we collectively have done damage to our own reputation and the reputation of the court as well.

Kara Swisher: Wouldn't you think there'd be a food fight there, given how important the Supreme Court has been on abortion, for example, which you mentioned?

Michael Bennet: It should be. Well, I'm not saying it shouldn't be a food fight, but I am saying that there was a time, at least when I was in law school, which wasn't actually that long ago, where these issues would be debated. But if a justice was qualified for the court, they could get 95 votes or 98 votes. And every time we did that, I think we reestablished the idea of the independence of the judiciary, something separate from our hopefully temporary, insane, partisan politics.

Michael Bennet: On the point of choice, the true travesty here is that a 50-year campaign that was started when Ronald Reagan was president, that was supported by Justice Scalia and a bunch of other people for 50 years, has put three so-called originalists on the court, people whose ideology would have banned them from any service on any court in the land. And now they form a majority of the Supreme Court of the United States. On the case of abortion, they took the position that if it wasn't a right in 1868, it's not a right today. If I had read that in a judicial opinion when I was in law school, I would have thought I was reading *The Onion*, not Justice Alito's opinion for the court. But that is Justice Alito's opinion for the court. The point I'm making is not just to complain, but to say that is the result of a 50-year effort that's been waged by national Republicans to put those folks on the Supreme Court so they could demolish Roe versus Wade, which is what they've done.

Kara Swisher: Should Justice Thomas resign?

Michael Bennet: I'm not going to get into that.

Kara Swisher: Okay. This is something Scott's talked about. Dianne Feinstein missed a vote that came out 50 to 49 with the Democrats losing. Had she been there, the vote would have tied, and Vice President Harris would have been the tiebreaker. Just for the sake of advancing the Democratic agenda, including judges and especially judges, should Senator Feinstein move aside and let other Democrats finish out her term? Gavin Newsom would appoint a replacement, by the way.

Michael Bennet: Look, obviously, that's up to Senator Feinstein. I serve on the Intelligence Committee with her. I do think it is important for the United States Senate to be able to operate. It's important for the Democratic majority to be able to put judges on the court. And we're going to have to come to some sort of agreement that moves us forward on this. And I'm not in a position, thank goodness, to be in a place to make that decision on behalf of Dianne Feinstein or anybody else.

Kara Swisher: Well, if you were, what decision would you make?

Michael Bennet: Well, I'm not.

Scott Galloway: Good job. When Chuck moves somewhere else and there's another option, you know, yeah.

Michael Bennet: Yeah. I'm not going to make his job any harder than it already is.

Kara Swisher: Okay. Good to be with you, Senator. Before we talk about the Restrict Act, there seems to be a lot of momentum around legislation involving age-gating social media. Any thoughts?

Michael Bennet: Yeah. I mean, as you know, Scott, I was a school superintendent before I was in this job. If you had asked me before COVID what the big change in schools was from the time you were superintendent until today, I would have said mental health, mental health, mental health. And that's before COVID. Then we had COVID on top of the social media and what it's done to our kids over these years. Now, when I hear somebody in my office, which is not infrequently, tell me that somebody the age of my own kids, who are now 23, 22, and 18, has died, I no longer wonder whether that was a car accident or leukemia. My questions are: was it a suicide? Was it fentanyl? Or was it guns? That's the country we live in today with our kids.

Michael Bennet: I had a mom, one of many, who said, "I don't blame social media for everything that happened to my kid, the suicide that they had, but it had something to do with it." I think you're seeing people in Washington finally start to respond to the epidemic that exists today that is ripping through our young people. And we have to address it.

Scott Galloway: Do you think this bill that was just introduced by Josh Hawley and Senator Chris Murphy? The Communist Party in China just dictates and says young people can't do this. And I know we age-gate all kinds of things: liquor, guns, movie-going even. Is this more problematic given it's speech related?

Michael Bennet: Look, here's what I would do. I wrote the first piece of legislation that would create a new regulatory body to regulate these big digital media platforms. And I still believe that's what we should do. I think Congress will never do it well. We will mess it up, if you excuse the expression, and we would be much better off having something like the FCC, staffed by experts, to help us think about all these issues: the constitutional issues, the civil rights issues, the antitrust issues, the mental health issues, the national security issues. These are all today completely unregulated by the United States of America.

Michael Bennet: People are mad at me at my town hall sometimes because they've seen me talking about TikTok. And they say, "What about these other platforms?" I say, "You know what? You're right about that. And that's why we should have an agency to do that." I think until we do, we're going to have a hard time not legislating in a way that doesn't create unintended consequences or doesn't anticipate every single permutation. Even with a regulatory agency, we're going to have those problems.

Kara Swisher: Well, that gets us into TikTok and the Restrict Act. The bill would give the Secretary of Commerce the ability to ban foreign technologies and companies from operating in the U.S. if they pose a threat to national security. For some reason, I feel like foreign ownership rules are already in place, but talk about it because there's speculation, but we need the evidence. And obviously, you've seen evidence, but I guess everyone else has to in some fashion, correct?

Michael Bennet: The Restrict Act isn't targeted at TikTok, but it does make it possible for us to consider inbound technology and inbound platforms like TikTok rather than just thinking about export controls of stuff going from the United States to other places. As a member of the Intelligence Committee, that is what we're trying to address here, because export controls are not enough when you're thinking about things like the importation of Huawei's technology or TikTok.

Michael Bennet: I think considerations for the Commerce Department would include national security considerations and privacy considerations. I think it's really legitimate to consider the way that the Chinese government might try to manipulate TikTok's users here to see issues like Hong Kong and Taiwan on their way. Frankly, you already see that in my mind when you've got these television advertisements that are now running every single day in Washington, D.C. that are targeted at Congress saying, "Oh my God, we're going to destroy every small business in America if we turn off TikTok." And this is a Beijing-controlled enterprise we're talking about who's lobbying on behalf of small business. You think that's a problem? I think that's a problem when there are 150 million people on TikTok. Think about what that might look like six months from now or six years from now. That's why I hope the Commerce Department takes a very hard look at this.

Scott Galloway: So none of this legislation, there's fears of overreach under the umbrella of national security with the Restrict Act, First Amendment rights with banning a platform. But we've always had imperfect legislation or regulation. And it seems like there's one industry that's bigger by market cap than any industry in the world that more of us spend more time on. And yet there's a total absence of any regulation. How did we get here where Democrats have controlled several houses of government for a long time, and yet we have been unable to get anything through? Why is this unlike any industry with respect to our inability to have any type of regulation?

Michael Bennet: Well, it might not be like any industry. It's possible. We don't know the end of the story yet. It might feel a little bit today like the cigarette industry when that was something that just couldn't be regulated by anybody. And these guys, Scott, in a way, your question answers itself because we have never seen, probably in human history, but certainly not in our history, enterprises go from the size Facebook was when Mark Zuckerberg founded it in his dormitory at Harvard to the size that it is today. We've never seen Google and the other companies that today comprise 50% of the market cap of the American stock market. So to me, I'm not surprised that Congress would be behind the eight ball. And then on top of that, you see the economic domination that these firms are wreaking on the American economy.

Michael Bennet: But all of that suggests to me that we have to regulate. But the reason to regulate, in my mind, is not for the sake of regulation. It is for the first time in America to put the American people in a negotiation with Zuckerberg about our privacy rights, to put the American people in a negotiation with Zuckerberg about our economic rights to decide how we want to monetize our identities or those of our children and our families, to put the American people in a negotiation with these firms about our values around the algorithms that they have imposed on our children, around our mental health, around our national security. That's what we have to be in the business of working on here.

Michael Bennet: I'm concerned, as anybody is, that we would legislate or regulate in a way that violated the First Amendment or wasn't aligned with American values. But today, I believe these enterprises are acting in a way that on a whole host of issues are completely out of line, not just with our values, but with the mental health of our children and with our national security.

Kara Swisher: Are you more worried about TikTok than you are them? Because there are different issues. They have an advertising business. This is a foreign-owned entity.

Michael Bennet: I think I'm worried about them all. I'm worried about them.

Kara Swisher: No, I just think, look, to Scott's point, these guys—look, this may sound a little bit like an exaggeration. I don't think it is. The small businesses in Boulder, Colorado are subject to more regulation than these guys are subject to. These guys, I certainly mean our own platforms, but I also mean a company that's owned by ByteDance that could be reporting back to the CCP.

Kara Swisher: I sat in this office with you years ago when you said to me that part of the problem here was that we built a city that had no regulation in it about how the sewers would work, about how the infrastructure worked. Well, I have to say you were 100 percent right in what you said.

Michael Bennet: Yes.

Kara Swisher: But the cost has been much higher than any of us could imagine.

Michael Bennet: Much higher.

Kara Swisher: Speaking of costs, one of the nation's most influential social media networks owned by a man who removed the state-affiliated labels from Russian and Chinese news accounts, proposed a Ukrainian peace plan that read like a Russian talking point, does billions of dollars in business with China with another one of his companies, controls a game-changing technology in the Ukraine war, misrepresents the relationship of his social network to U.S. intelligence agencies. Does Twitter pose a threat to national security? Could it be banned under the Restrict Act? I would love your thoughts on this because I'm sure you're watching carefully.

Michael Bennet: I don't know. It could not be banned under the Restrict Act because it is not coming from—

Kara Swisher: I figured it out. I'm just being obnoxious.

Michael Bennet: Yeah. Well, look, Twitter has had a profound effect on our democracy. And it's not obvious to me—it might have been to other people, it wasn't obvious to me—that social media was necessarily going to have as detrimental an effect as it has on our democracy and on our democratic way of life. It could have been a democratizing influence in our society. And I still think that's possible. I was with college students yesterday where I was begging them. I said, "Somebody in your generation has to figure this out because nobody in my generation can figure it out, to make it into something that can actually support and strengthen the democracy instead of eroding it or sending a whole bunch of people to Washington, D.C. to invade the Capitol under false pretenses."

Kara Swisher: I'm asking about this particular owner, Elon Musk. He's got a lot of influence all over your areas. Just love your thoughts on that.

Michael Bennet: All the more reason why we've got to—I think the thing that we could do that would be most substantially or most significantly important, whether you're talking about Elon Musk or anybody else, is having a regulatory body in Washington, D.C., staffed by experts whose job is to put the American people in a negotiation with Elon Musk, in a negotiation with Mark Zuckerberg. None of these people have ever had a negotiation with anybody about privacy, about the economics of their entire business model. They never have, and they should. And they're treating it like the robber barons of old who got to dictate all of this for the American people. I don't think the American people are going to take it anymore. The reason is not the same kind of environmental toxins that we faced in prior generations, but the kind of toxins that have affected our children's mental health—that's something that parents aren't going to stand for anymore.

Scott Galloway: I know your emotions run deep here. Your mother was separated from her parents in Nazi-occupied Poland. What are your thoughts on America's role in supporting Ukraine and what is another invasion of Europe?

Michael Bennet: It's such an interesting question for me because my mom is still alive, Scott, and I appreciate your talking about her. She's 85 years old. She just spent a month in the hospital and she's out of it. She's at home. She can't believe she's lived long enough to see another land war in Europe. But what she would say is we have to stick in there. We've got to make sure we're doing everything that we can do to support the courage of the Ukrainian people. And I think we do.

Michael Bennet: By the way, all these threats are all related. These are not unrelated questions. All these threats we're seeing to our democracy and the fragility of our democracy, we have all that on the one hand. And on the other hand, you have, in the case of Putin's invasion of Ukraine, a stumbling, incoherent, despotic action on Putin's part that was caused in part because of who Putin is, but also because he's sitting on top of a totalitarian society. And that society wouldn't tell him the truth about the quality of his army, about the way the Ukrainians would fight back, about how the rest of the world would come together. Wouldn't tell him the truth. And now the world has come together. And you've got people living in free countries all over the world, in democracies, who are saying to their elected officials, people like me, "Do more, do more, do more."

Michael Bennet: So what I would say is the fight is on, that democracy is rising to the occasion, that it's a demonstration that we might be fragile, we might be down, but we're not out. I think the elections last November in the United States say the same thing. So I think we ought to be hopeful about where we're headed. I think that we ought to be supportive of the Ukrainian people who have stood up here in ways that never could have imagined. Only they could maybe have imagined because like my mom, they went through the brutality of the Second World War and they know what's at stake. When you have a tyrant on the march, we need to stand with them.

Scott Galloway: Given all the huge issues we face, given this moment in time, given that 70% of Americans do not want to see Biden run again and the majority of Democrats do not want to see him run again, don't you think it would be in the spirit of democracy to have several people throw their hat in the ring here and say that we need the American people to decide who should be the Democratic nominee for president?

Michael Bennet: I think the practical reality of this, Scott, is that he's the one guy out of 330 million people who beat Donald Trump. I think that he has a record that is better than virtually any record in modern American history to run on. I just ran on that record myself running for reelection in Colorado. It's nice to have a chance for once to be able to run on stuff like capping drug prices for seniors, like requiring Medicare to negotiate drug prices on behalf of the American people, like the most important bipartisan infrastructure bill since Eisenhower was our president, like the Chips Act, which is bringing back an industry for the first time since Reagan was president, like our climate bill. And Joe Biden has been president during all that stuff. I think that he's got a record to run on, and I think that he's going to beat Donald Trump. So I'm glad he's running, and I sure hope he wins.

Kara Swisher: All right, Scott. It's not going to work, Scott. Scott keeps trying to get him to not run. Come on. Anyway, Senator Bennett, you would have made a great president, too, and maybe you will. Keep running. Keep running.

Michael Bennet: Thanks for having me, you guys.

Scott Galloway: Keep fighting the good fight, Senator.

Kara Swisher: All right. Thanks, Senator Bennett. I appreciate it. See you down the road.

Michael Bennet: Thanks, guys.

[Michael Bennet exits]

Kara Swisher: Isn't he smart? He's so smart.

Scott Galloway: I like that. Every time I hear from or have the opportunity to spend any time with Senator Bennett, I just feel better about America.

Kara Swisher: Yeah, yeah. All right, Scott, one more quick break. We'll be back for predictions.

[Break]

Kara Swisher: Okay, Scott, we're going to do some predictions. I have a prediction. I have decided to have one today. I was fascinated by Tucker Carlson's video on Twitter. It looked like it was from *Wayne's World*, like he was down in the basement. He's so small on Twitter. He's such a tiny little thing. And I thought, "Oh, Elon's going to fund him. That's what he's going to do." He's been talking about having a media company. I don't think Tucker knew this was happening, so there weren't necessarily plans in place. But if I had a guess, that's one of the—and of course he got an offer from RT, the Russian news, of course, because he's their best friend. But I thought, "Oh, Elon will do something with him." He's an opportunity because he's got a big following and he could be like Joe Rogan. And if he brought him into Twitter, I just don't know. I can't stop thinking about it. And I've heard rumblings of it. Some people were telling me there were some talks. What do you think?

Scott Galloway: We have great minds, right? We must be destined to go on a cruise together and announce Whorpak because I agree with you. My prediction was going to be that Elon and Twitter are going to launch a TV show or some sort of media property centered on Tucker Carlson. I think he was setting it up for that, saying that traditional media is lame, we don't have a voice. And also, I feel as if Twitter has gone so red pill and that Elon is fine with that. And I can just see him saying—

Kara Swisher: No, I think he's a perfect opportunity for Elon. A hundred percent.

Scott Galloway: And he'll say to Tucker, "Look, I claim it's worth $20 billion. I'll give you one percent of it. That's $200 million. And I want you to start a daily 30 or 60 minute show on Twitter."

Kara Swisher: Yeah, it makes total sense. It's actually a good idea. You know, someone was saying, I like Tucker—I don't like Tucker Carlson. I think Tucker Carlson is vile, but you can't deny he's got appeal to the audience that he has. They're terrible people, but nonetheless. I do think it was interesting though, I don't think he'll still have the same impact because he's small. He looks so small in that little thing. And I thought he doesn't have the same thrust, so to speak, for rockets as he does on a big platform like Fox. So I'm not sure the Fox audience will find him necessarily. So he's got to really do some heavy lifting to become sort of Joe Rogan-esque. And I don't think it's as easy.

Scott Galloway: What I really was irritated by in that particular little speech he gave, besides wearing his weird clothes that he wears—he should loosen it up—was that he's talking about, "I've spent the past few days looking at TV and it really is stupid." I'm like, you were in the center of stupid. You were like king of stupid.

Tucker Carlson (from video): The other thing you notice when you take a little time off is how unbelievably stupid most of the debates you see on television are. They're completely irrelevant. They mean nothing. In five years, we won't even remember that we had them. Trust me, as someone who's participated. And yet at the same time, and this is the amazing thing, the undeniably big topics, the ones that will define our future, get virtually no discussion at all.

Kara Swisher: And so him just pretending like now he sees that the debate is not really that—that was kind of disingenuous. He is disingenuous. What are we talking about? He says he hates Trump and then he praises him in person on the air. So that was interesting to me. I think he's small in the thing. Do you think it'll work?

Scott Galloway: I don't know. What history tells us is that these individuals without their platforms become—

Kara Swisher: Their original platforms.

Scott Galloway: —increasingly small. And that they're just—well, let me put it this way. Name a Fox host that has gone on to bigger and better things. I think they've made a lot of money. I think Bill O'Reilly does pretty well, but he doesn't have influence, right? Megyn Kelly screams all day long on her podcast.

Kara Swisher: Well, he's got a book franchise.

Scott Galloway: He's got a book franchise. Megyn Kelly's got her podcast. I think it does pretty well financially. I don't know, but you never know. Glenn Beck, he's sort of screaming away somewhere into the abyss. We'll see what happens with Dan Bongino. Maybe he ropes a couple of these people in and makes a new Fox. Everything they do is a different version of *Troop Beverly Hills*, and that is Shelly Long decides she's too big for the greatest sitcom in history at that point, *Cheers*.

Kara Swisher: Shelly Long. Come up with a better one. Okay. Shelly Long. You've got to move on from Shelley Long. So, do you think he could rope in more people? Dan Bongino just got fired. You could bring in Maria Bartiromo, who is still at Fox, but there's lots of rumors. No one is there. They're going to ride out that whole Fox thing, recognizing at some point they'll probably get fired and get a big severance payment. No one's going to leave under their own volition.

Scott Galloway: But 100%, Dan and Tucker and Elon will structure an interesting deal for them and say, "I've got 350 million." I mean, the thing that's so amazing about—or I find so striking—is that these audiences, Tucker Carlson had the biggest audience in cable television at 3 million. Anderson Cooper, who's the star of CNN, is a million. We talk about CNN, and this goes to Senator Bennett's point about the need for regulation. We are obsessed with CNN and Fox. And the reality is they're a dumpster fire compared to what happens on Instagram and Meta every day in terms of actual influence. TikTok, 1.7 billion people.

Kara Swisher: Okay, Lucky's on Fox two hours a day.

Scott Galloway: Two, try eight, but go ahead.

Kara Swisher: But she's one of a couple million people there. Relative, we are obsessed with cable television. And you know what? It's a pimple on the elephant of actual media and influence. I'd agree. Anyway, we'll see. We'll see if he has influence. I don't know if he will translate. I think others will, right?

Kara Swisher: There'll be a Joe Rogan of this, and I wonder, or someone like that, who it is. And we'll see. But that's where he's headed. It's so, that thing was like, it was a big sign. Anyway, good luck, Tucker.

Kara Swisher: We want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT.

Kara Swisher: Scott, that's the show and an excellent show we've had. We'll be back next week for more. Can you read us out?

Scott Galloway: Today's show was produced by Lara Name and Evan Engel and Taylor Griffin. Ernie Andretot engineered this episode. Thanks also to Drew Burrows and Mil Silverio. 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.

Kara Swisher: Whore pack, making the world a better place and embracing Scott's hobby. Thank you.