Pivot Q3 Quarterly Review and Friend of Pivot, Senator Amy Klobuchar

Kara Swisher: Nobody knows your customers better than your team, so give them the power to make standout content with Adobe Express. Brand kits make following design rules a breeze, and Adobe quality templates make it easy to create pro-looking flyers, social posts, presentations, and more. You don't have to be a designer to edit campaigns, resize ads, and translate content. Anyone can in a click. And collaboration tools put feedback right where you need it. See how you can turn your team into a content machine with Adobe Express, a quick and easy app to create on-brand content. Learn more at adobe.com slash express slash business.

Kara Swisher: Rinse takes your laundry and hand delivers it to your door, expertly cleaned and folded, so you can take the time once spent folding and sorting and waiting to finally pursue a whole new version of you. Like Tea Time You. Mmm. Or this Tea Time You. Or even this tea time you. Said you hear about Dave? Or even tea time, tea time, tea time you. So update on Dave. It's up to you. We'll take the laundry. Rinse. It's time to be great.

Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm excited about Halloween. My favorite holiday is fast approaching.

Scott Galloway: Of course it is. The Stephanie Rule will remind you 40 times a day on Instagram.

Kara Swisher: That it's your favorite or her favorite?

Scott Galloway: Oh, well, I think it's both of our favorites.

Kara Swisher: I love it. I get to put on a wig, same costume. Dressing up like a woman. I go as an emotionally stable person, and no one recognizes me.

Scott Galloway: No one. That would be hard to recognize. I would agree.

Kara Swisher: That's right. What do you actually go as?

Scott Galloway: When I was a kid, every year I went as Snoopy. I had an obsession with Snoopy. I put on something, sweat my face off just for a box of raisins. Now I go every year, every year the same outfit. Starship Commander, Jean-Luc Picard. Huge crowd pleaser.

Kara Swisher: I bet you're good at it.

Scott Galloway: Huge crowd pleaser.

Kara Swisher: Do you shave off your mustache, et cetera?

Scott Galloway: I don't have a mustache.

Kara Swisher: I do. You have a beard.

Scott Galloway: I have a little goatee. It's very natural. Picard did not have that.

Kara Swisher: Sexy goatee.

Scott Galloway: And this year I might go with something different. I want you to guess my costume.

Kara Swisher: I don't know. An orange jumpsuit. Yeah. And a massive amount of sunblock on my face.

Scott Galloway: Oh, Donald Trump headed to jail.

Kara Swisher: Mark Zuckerberg.

Scott Galloway: Zuckerberg. Oh, nice, nice, nice, nice. The Zuck. You need more hair. He has more hair than you.

Kara Swisher: He's catching up.

Scott Galloway: He's catching up, but he's still got more hair than you. You know what I probably gonna go as? So the people who I mentioned on this podcast that my kid watches Teletubbies and Sesame Street, the Teletubbies people sent me a box of Teletubby things, including a full adult-sized Teletubby outfit. So that's what I'm doing.

Kara Swisher: I think that's a conflict for a journalist. Let's be honest. I've been watching your coverage of Teletubby and it's been really, it just hasn't been unbiased, Kara.

Scott Galloway: Okay.

Kara Swisher: I love the Teletubbies.

Scott Galloway: Teletubbies. I am.

Kara Swisher: How is the golden child?

Scott Galloway: Good golden child is great. And the next golden child is progressing nicely. So everything is going rather well.

Kara Swisher: She's great. So you check in on that? I don't know how any of that works. I feel so alien to me. I'm not going to go into this with you.

Scott Galloway: No.

Kara Swisher: It's a stork. And they deliver the baby on the last day. Anyway, this is a special episode. So we have to feel very smart today because it's our quarterly review. We'll round up our biggest wins and fails for the third quarter and see how well we did with our predictions. We'll also hear from some friends of Pivot on what's coming up in Q4 and beyond. And we'll talk to Senator Amy Klobuchar about Facebook's rough week and what she thinks will happen next.

Scott Galloway: Gangster. Hello. There's a new sheriff in town and she's from Minnesota.

Kara Swisher: Yes, yes. It was a big week for Facebook in Congress. And Senator Klobuchar has been on their ass and she will talk about it with us. So let's start by talking about some of the biggest topics and issues for Q3 so far and declare some wins and fails.

Kara Swisher: All right, first off, the past three months have been major for spaceflight. The newest international astronauts, the crew of New Shepard. "I want to thank every Amazon employee and every Amazon customer, because you guys paid for all this." In July, Virgin founder Richard Branson flew more than 50 miles above the New Mexico desert in his Virgin Galactic rocket plane. Later that month, Jeff Bezos soared nearly 70 miles above the Texas desert in his Blue Origin Shepard launch vehicle that looks like a penis. Lastly, SpaceX launched the first all-civilian crew into a low-Earth orbit in September. They were up there for three days. What are your wins and fails here, Scott?

Scott Galloway: Well, okay, so in general, we have a tendency to just group space. Space tourism is, in my opinion, a terrible business that is going to slowly go away. And the ground zero for that implosion, if you will, is Virgin Galactic, which is a Mach 3 train wreck after what was probably the branding event of the year. I mean, the whole world watched that thing. They built a massive customer list, a waiting list of 600 people. And also the stock continues to decline. And any large shareholder that knows the company really well continues to sell stock. I just don't think it works. I think it's literally all squeeze, no juice.

Kara Swisher: Blue Origin.

Scott Galloway: All squeeze, no juice.

Kara Swisher: When you squeeze, you get juice. Help me out here. I had a few drinks last night. Just go with that.

Scott Galloway: You were squeezing something. Some lemons with the vodka. Anyway. I have my Makers and Ginger deep voice today. Anyway, so Blue Origin, fine. You know, $400,000 T-top Corvette crashes into a hair plugs clinic. Let Jeff be Jeff. Fine. He's a bright guy. He'll get bright people. It'll do something. Hands down, the winner here is SpaceX. While everyone's taking their penises 50 miles into space or to the Kármán line, he's orbiting the earth three times with civilians. And it was flawless. It's kind of the difference between over-promising and under-delivering. Blue Origin with all this ridiculous "this is amazing," and Richard Branson saying "imagine what you'll do in the future." And it's like, no, imagine what we did 50 years ago, boss. It was much more impressive.

Kara Swisher: Yes, you're very on this. I mean, we talked, I talked with Elon about this, and of course I got him to make several penis jokes. Well, if you are only going to do suborbital, then your rocket can be sort of shorter. My son this morning on the drive to school was like, "I can't believe you got him to make all those jokes." I said, "I can't believe you can't believe that I got him to make all those jokes." But I think you're right. I think Elon's really head and shoulders above everybody else in this department. What's interesting is some of it's nice that Wally Funk went up, she trained to be an astronaut in the 60s. That's nice. But she should have been on Elon's ride, essentially. And Shatner is going up. William Shatner, Captain Kirk. It's all very cute, but it doesn't make for a business.

Scott Galloway: And here's the thing. There's a key component of this business or two key components that will be really successful. The first is space hauling. And the key is, again, it's the boring shit that makes all the money. The key is the cost of getting a kilogram out of orbit, which has been incredibly expensive.

Kara Swisher: Which Elon talked about, yeah.

Scott Galloway: And the new SpaceX Falcon booster rocket is bringing the cost down. And Elon has basically put more satellites into space than anybody else. So SpaceX is quite frankly just a man among boys who are taking very long showers. Anyways, I won't even go there. But this is just so ridiculous. And then there's a real business. And the real business here is SpaceX. The other two are just literally such a midlife crisis kind of weird.

Kara Swisher: It is weird. And also, it reminds you a little bit of when all the cities tried to compete with Amazon for the warehouse and we're never getting them. The state of New Mexico has invested a lot in Spaceport America for Branson, but hasn't seen much in the way of results. You know, we'll see. Elon's had some back and forth with some of the people in Texas. It's a business. Where he's going is the right way to do it. He talked about a moon base. He talked about how you get there, reusable everything, bringing down the cost. That's what you want to hear.

Scott Galloway: Well, in the business, the winners here from an investor standpoint is SpaceX. I believe, and I get shit for this, I believe SpaceX is going to be worth more than Tesla. Because I think one is going to go up and one is going to come way down. But also the business or the stocks or the companies we want to look for are the picks and shovels here, and that is the companies building infrastructure and materials for all these people who are going to spend massive amounts of money to try and do things in space.

Kara Swisher: And the Tesla competitors are actually doing good things, right? So it's not like, here they're kind of doing stunts and he's continuing to do his great business and in cars, you know, they're all investing heavily into the future.

Scott Galloway: Oh, they're all coming for them.

Kara Swisher: I mean, we've been predicting that for a long time.

Scott Galloway: Yeah, it's like streamers in Netflix. That's where they are.

Kara Swisher: That's exactly the right analogy. Netflix had it to themselves for eight years, and then everyone said, "Okay, we got to get into this."

Scott Galloway: Do you realize the auto market has gone from a kind of low-margin manufacturing-based business worth $100 billion globally to a higher-margin software-driven $800 billion business? And that's about to – that blood in the water is about to attract one of the biggest sharks in the world, and that's Apple. I mean, I think Apple's coming for Tesla.

Kara Swisher: Anyway, Scott, a little bit off script there. Space is weird. Space is a weird thing right now. It is.

Kara Swisher: All right, next up, the China crackdown. This past quarter saw China tighten regulations on a number of industries, particularly tech. Beijing announced a blanket prohibition against all cryptocurrency transactions and mining. The government passed time limits on the amount of time kids can play video games. China also banned ride-hailing giant Didi from signing up new customers right after the company's IPO. And even Elon said, "Where's Jack Ma?" Who is, of course, the most prominent entrepreneur that's come out of China from a global perspective in terms of excitement and energy and very well known. I know him very well. I don't know where he is. So what are the wins and fails here, Scott?

Scott Galloway: Well, first off, I just want to acknowledge I predicted that Alibaba was a great buy three months ago, and I think it's off 25 or 30 percent since then. And I think what's shaping up here, I think this is the most undercovered story in business. You have these juggernaut companies and basically I think we should learn from what China has obviously learned from us. China looks at our society and says, "Okay, where has this thing really come off the tracks?" One of the things they've clearly registered is that big tech has overrun government and subverted national interests to private interests. So they've gone after tutoring companies because they found that their equivalent of Harvard, I think it's called Tsinghua, got a 1% admissions rate. And increasingly, it was being filled with the children of rich people because they get to participate in the tutoring industrial complex. So China comes in and literally kneecapped these companies that have like $100 billion in market cap and said, "Sorry, you're out of business." Didi wasn't sharing their data or they didn't like what they were doing. They cut them in half. They disappeared Jack Ma. I mean, Jesus Christ, can you imagine if all of a sudden we woke up one day and no one could find Jeff Bezos for two weeks?

Kara Swisher: Yeah.

Scott Galloway: And so the mother of all macro bets. This has sent a chill through the markets. And you have companies like Alibaba, which quite frankly are kind of Amazon plus. They're Amazon, but they're growing faster and even more dominant and arguably even more innovative. And they're trading at a forward PE of 16 or 17 versus Amazon at 60. So this is either the mother of all fire sales or the beginning of the end for Chinese tech access to global markets. I personally believe this is an unbelievable opportunity because is Xi Jinping going to wrap the knuckles or is he going to cut off their hands? He still has to bring 10, 20 million people out of poverty every year. He's got a revolution. I don't think he's going to totally bury these companies. He's got a lot of challenges.

Kara Swisher: Yeah. It's hard to keep entrepreneurship under wraps, I think, ultimately. But they're trying.

Scott Galloway: Yeah.

Kara Swisher: Or entrepreneurs. Yes. Yeah. Because they'll just move or whatever. They'll go somewhere else. And also stopping kids from playing video games creates a lot of unhappiness within the society. At the same time they're talking about addiction and a lot of the things the whistleblower was talking about, that Facebook has a problem with. Crypto regulations had no effect on the price of cryptocurrency at all. So interestingly, listen to this, my brother, my family has a coal company, you know this, right?

Scott Galloway: That fits.

Kara Swisher: He was saying-

Scott Galloway: All right. I have nothing to do with it. That fits.

Kara Swisher: He was telling me all these coal companies are doing great now because of cryptocurrency, which I thought was fascinating.

Scott Galloway: Because they need electricity?

Kara Swisher: Because energy, electricity generation. And so that was, I was like, "You're kidding." He goes, "No, it's like crazy." And he's like, "You should write about it." I said, "No, I shall not because you are in that business." But nonetheless, it's really-

Scott Galloway: But I'll write about Teletubbies.

Kara Swisher: I'm sorry, go ahead.

Scott Galloway: Teletubbies. Yes, that is my corruption, Teletubbies.

Kara Swisher: So it's a fascinating time in that it gives opportunities across the world to other countries that are not going to do this. And it doesn't have any impact on the price of cryptocurrencies.

Scott Galloway: Well, there's a lot there. That's the really fascinating thing. If the second largest economy banned Apple, say, or banned Nike, I think those stocks would be off 30%, 50%. And I'm not sure they'd recover for a long time. China bans crypto. And for a hot minute, it goes down. And then it comes back. I mean, crypto is bigger than China is what you take from this. Your comments about coal surging in price fly in the face of the crypto Taliban that likes to say that actually crypto is now the largest consumer of marginal alternative energy. So it's actually financing hydroelectric plants. And a lot of people have said, no, it's bad for the environment.

Kara Swisher: Actually-

Scott Galloway: I'm sorry, go ahead.

Kara Swisher: May I interject? It's actually, they're using these clean coal technologies that are really interesting and innovating in them.

Scott Galloway: I'm sorry, does clean coal mean just less fucking awful?

Kara Swisher: No, but there's all these innovations going on.

Scott Galloway: Listen, we shouldn't be burning coal at all.

Kara Swisher: But as we're doing it, they're prompting – he was telling me – innovations in this area of scrub coal.

Scott Galloway: Oh, my God. You're officially the Koch family.

Kara Swisher: No, I'm not. You're defending coal. Why don't you actually do your research? I'm not defending coal. No, I'm not. But it's interesting that it creates other industries. And, of course, it's not marginal. And it is, hydroelectric is doing great. It's just China getting out of it gives opportunities to others to take up the slack.

Scott Galloway: It is fascinating. And typically, and a lot of people pointed this out, whenever China bans anything, it's a buy signal. Whether it was Google, whether it was Reddit, whether it was Twitter, and now crypto. You go look back a few years later and you wish we would have bought. It's usually a buy signal when China decides this technology or this company is a threat to our society. That's basically saying this shit is gangster and we can't control it, which from a long-term investment standpoint means it has attributes that are attractive.

Kara Swisher: Yeah. Anyway, it's interesting. It's fascinating. And I don't think video gamers are going to do all kinds of cheats. There's already hackers doing that. I think it's very difficult to stop people from playing things they like. And I get the idea of it. And it's interesting. But it's just like telling your kid not to smoke pot or something. It just doesn't, it's just hard.

Scott Galloway: You know what I found out? In our house, we're very, as you can imagine, we have a lot of conversation about social media. My youngest ratted out his older brother and was like, "Alec has a TikTok account." And I'm like, "You're kidding me." No, no. And so I immediately go on and look at it, expecting to see, I don't know, something terrible. And he created these soundtracks, these funny soundtracks of monkeys, and he's getting 3 million views. And I'm like, "Hello, college scholarship." And I immediately tracked him down. And I'm like, "You have a TikTok account?" And the look of fear over his face. And I'm like, "This is awesome. This is how we're getting you into college." And I'm all hot and bothered about it. And he's like, "Oh, I thought I'd take a break from it." I'm like, "You are not taking a break from social media. Get your face back into the phone and start producing more content."

Kara Swisher: You're like a social media chain gang. I think this is, I literally, it's like finding out your kid's an amazing diver. They're not going to do what you want. FYI. My kid made a beautiful video, a cooking video on TikTok that was hysterical. Instagram, one of them. And it was wonderful. And I was like, and I sent it to some people. I'm like, "Is this any good?" And they're like, "This is really good." And who would know? And he won't do another one. I was like, "You need to. This is a business for you." And of course, he's like, "Yeah."

Scott Galloway: We'll have a dance-off. You put up Louie's cooking video. I'll put up my son's monkey video.

Kara Swisher: Okay. I'm sure they're both great.

Scott Galloway: Why can't they both be great? It's a competition.

Kara Swisher: No. Let's just celebrate their talent. But I'll tell you, he's like, "No, I'm not doing it. I'm not doing it."

Scott Galloway: Yeah.

Kara Swisher: I'm like, "Finally, we have an edge to get you into college here. And you don't want to." And he's like, "No, I've enjoyed it, but I want to move on to other things. I just liked it, yeah."

Scott Galloway: Don't be so fucking mature. Get addicted. Get addicted. I was like, "It's a business. Millions to be made and only idiots running this place."

Kara Swisher: Anyway, let's stick to the last one. Delta variant, Scott. It was not the hot vax summer everyone was hoping for. What are the wins and fails here?

Scott Galloway: Well, I'm a glass half empty kind of guy. When you're the second most vaccine hesitant nation in the world, and you're looking at literally one of the biggest blessings, the most important product in history. And we have these geniuses who have leveraged their human capital and the infrastructure that is American, incredible supply chain such that we are the home and the producer of the most important product and the greatest volume of any nation. And we're going to let tens of millions of doses go to waste. Talking about these Facebook hearings, and we have Senator Klobuchar coming up, there's really two big things plaguing our society. The first is polarization. That gets a lot of attention, that it ends up that the Zuck and Sheryl have their soft, delicate hands on a dial to turn up and down rage. And they've learned that the more they turn the dial up, the more profitable they are. And that's the problem. The second thing that we don't talk a lot about is that the algorithms do something very dangerous: they go crazy with our confirmation bias. If we go on Facebook and say, "I'm worried about the vaccine," it immediately serves you content to convince you that the vaccine is dangerous, hasn't been tested, is a conspiracy. And all of a sudden we have lost the connective tissue of truth. Without truth, you can't have a productive society. As a result, we are blessed with incredible innovation, but we don't have to be here, Kara. That's the bottom line.

Kara Swisher: I agree, but I think these anti-vax people have exhausted us all. You know what I mean? We just now quietly hate them. Facebook and the media gave them the tools to exhaust us before. There used to be a truth. There used to be in the 60s, "Oh, this vaccine for measles, rubella, it works. And we've done peer-reviewed research and you can trust it." And we trusted the truth in science. And now we trust Facebook. And Facebook is sending us – Facebook can't be trusted. It's been so damaging to our society. Business travel hasn't rebounded. Surging cases with kids. Hospitals overwhelmed. People just aren't quite out there. Although in little ways, I've done a couple business trips now. Very few, but a couple. But not as many as I used to, for sure. On the other hand, these vaccine mandates by companies, now almost all the airlines have them. People are getting vaccinated. There's a little less. It's now sort of more closed down to the crazy crew at the end that used to hate gay marriage, that kind of stuff. And instead of the people who are like, well, cases are dropping everywhere, which everybody expected. They don't know what's going to happen in the winter. They're probably expecting another surge if we don't get more vaccines. Some states, like Tennessee, have very low vaccination rates, and high ones are doing better. They're just doing better. You can just look at the economic changes where people feel more confident.

Scott Galloway: This is an inflammatory statement. I think in retrospect, when we do the data and do the attribution, I think it'll be very difficult to find a trifecta that has resulted in more death, disease, and disability than Trump, Fox, and Facebook. Whether it's DeSantis trying to mimic Trump and his incredible success among the far right and making really dangerous mandates and creating tons of misinformation across the great state of Florida and creating higher infection rates than many NATO countries. Whether it was pretending to give a good goddamn about the health crisis and continuing to spread misinformation both from Fox and then Facebook takes it and turns a dumpster fire into a mushroom cloud. If you look at the map of infections and deaths, it literally looks like a Fox viewership or a Trump voting map. I mean, it's just not hard to connect the dots here. There has to be a truth. Now, cases in Florida are going down.

Kara Swisher: Well, they're going down everywhere.

Scott Galloway: That's true. It's just the cost. It's just the cost that it took to be this stubborn is really what it's about. I believe we don't need to be here. We have the assets, the innovation, the blessing, the science, the distribution to not eliminate this but dramatically reduce this. And it got politicized. Misinformation ran amok. In the U.S., we become fat and lazy and selfish and we conflated liberty with selfishness. This is just so incredibly discouraging. This is kind of how Marx and the GRU predicted the end of American capitalism, that we would start eating our young and going after each other and that we would be subject to misinformation. There are some very hopeful things: incredible new business starts, innovation. I think healthcare is going to come out of this more robust. The spending plan, if it goes through, could reduce child poverty by 60%. I think a lot of people are waking up to the notion that if we're going to be the wealthiest country in the world, we should start acting like it. There's just no getting around it. We come out of this deeply scarred and looking terrible. We don't deserve to be global leaders at this point.

Kara Swisher: Yeah, it's interesting. Florida has a vaccination rate, I'm just looking up, almost 58% of the state's population has taken two doses. Seniors have been, and DeSantis deserves credit for getting a lot of seniors vaccinated very early. And the seniors in Florida are typically, oftentimes, seniors who have relocated from the Northeast who are educated, have decent incomes. And guess what? They're smart and they're like, "Give me the goddamn vaccine." And it's worked for them. And then you have the rest of these parts of Florida that have bought into this notion where I don't want my nine-year-old to wear a mask in school. I mean, how does that make sense? The punishments the state is meting down for people, if they're talking about do what they want, of course it only has to do with themselves. It's kind of ridiculous that they're trying to punish parts of the state that want to do mandates. Anyway, hopefully it will rebound. Everybody thinks we'll go down. There's a lot of unnecessary death in places where they're promoting vaccine hesitancy. But hopefully we won't have a resurgence in the winter, although many expect it. We'll see where this is going.

Kara Swisher: Anyway, Scott, let's go on a quick break. When we come back, we'll do our self-evaluations with a look about how well our predictions held up in Q3. Let's look in the mirror.

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: 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 1 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: And we're back. Scott, let's take a look at some of the predictions we made this past quarter and see how we did. I think I'm going to start with one that you made a few weeks ago. My prediction is around Facebook. I think that there are building, mounting political motivation to criminalize or start criminal investigations. Obviously, we're going to ask Senator Klobuchar about that. But I still don't think that's going to be the case. I want you to continue to make your case. Nothing's happened, obviously. There's SEC cases happening. I don't know if the SEC has the stones to do it. What is your thought on this?

Kara Swisher: So almost everyone who I've talked to, I have a lot of respect for, including you, disagrees. I talked to Preet. I asked point blank to Preet, who's a great legal mind. And he said it would be really difficult. Most of the people he's talked to said a criminal action would be difficult. My thesis is that there are so many politicians who will now feel that there's cloud cover to file criminal action against a company or someone at one of these firms that it's just going to be too irresistible. If Michael Milken was the head of a fintech company today that did what he did, I just don't think he'd be sentenced to prison for 10 years. Anyone who experienced the slow moving terror of a child with an eating disorder knows that this company knew that was happening and was suggesting additional content that made things worse. I just think there's going to be mounting pressure and air cover for a criminal action.

Scott Galloway: But you did ask Preet. Explain what Preet said.

Kara Swisher: We were backstage. I have a lovely picture of the two of you, by the way.

Scott Galloway: Yeah. He essentially said, the problem is they've been very savvy about it. They really haven't committed a crime because of 230. You can't go after them for defamation. They're technically not liable for the content. So it's probably like going after Al Capone by going after his lawyer or his accountant and getting him to flip. What do you have here? I think you could federalize the antitrust case – I'm sorry, the cartel pricing case in Texas because the remedies for cartel pricing are criminal. I also believe – and I want to ask Senator Klobuchar this – I think that there's now evidence that they lied before Congress. I also think there's evidence that there's certain disclosures they should have made to the SEC. When Mark Zuckerberg testified in front of Congress that "I've seen the research, and while it's not conclusive, it shows that spending time on social media is positive." That was a lie.

Kara Swisher: That was a lie.

Scott Galloway: Well, okay. All right. Okay. I think that's a – I don't know. No one ever goes down for that.

Kara Swisher: Look, the Trump administration right now, the people that used to be there are resisting congressional subpoenas. It's hardly a –

Scott Galloway: Well, it's time for our government to start pretending that they're supposed to be there to protect the long-term interests of the American public and prevent a tragedy of the commons. And you know what just drives me apeshit? I was on Anderson Cooper last night and expressed this view.

Kara Swisher: I see that. You're always with him. You're cheating on me.

Scott Galloway: We keep talking about what will Facebook do next? That's not the question. The question is, what the fuck are we going to do next? We, us. What are we going to do next? We keep hoping and begging that their better angels are going to show up or that we're going to shame them into something. We need Senator, i.e. Sheriff Klobuchar to come in. And if the laws can't put them in prison, we need to change the laws. We put so many people in prison over the last 30 years for so much less than what these executives have done to America. It is just – so while I agree –

Kara Swisher: We are an unfair society.

Scott Galloway: I don't have the legal background to say whether any of these criminal actions will result in prison time for anything. But I'm telling you, Kara, someone is going to go some AG somewhere. Scott's going to go one Hacker Way and arrest you people. He's going to make a citizen's arrest. Someone, some AG is going to wake up in the morning, look in the mirror and go, "Hello, Madam Governor," and file a criminal action against one of these companies. It's time. It is overdue. You should do it. I think you should show up at one Hacker Way with some handcuffs.

Kara Swisher: You had a prediction about public and private markets. Let's play the tape.

[Audio clip plays]

Scott Galloway: [In clip] I think that in the latter half of this year, despite an increase in GDP, despite incredible new business formation, I think you're going to see the private markets do well. I think the public markets are going to incur incredible volatility, and we're going to see some of the most step change downs in the market. I think we're going to have some of those volatile days in the market in the next six months.

[End clip]

Kara Swisher: All right, Scott, what do you say now? Because the markets are doing okay still. There hasn't been an October surprise. We're not that deep into October. And there's been some public offerings here and there.

Scott Galloway: Actually, I like to think I hold myself pretty accountable. I think we actually got this – we're sort of on the right side of this. If you look at September, it was the worst month for the market since early 2020, and it was the worst quarter for the market since early 2020. The SPAC market has all but gone away. There were only two offerings in July.

Kara Swisher: You said volatility. You didn't say crash, but go ahead.

Scott Galloway: But there's absolutely what feels like a de-throttling or a check back, and there's much more insecurity in the market. So I would call this like met okay. I think most people would say, I mean, September was the worst month for the market since early 2020.

Kara Swisher: Yeah, I think a lot of people, not just you, are predicting a real crash very soon. But the month isn't over and people are still waiting on this infrastructure bill and everything else and whether the debt ceiling. So I don't think you're going to see anything until that stuff sorts itself out. Everybody's focusing on that. And the money running out, we'll see.

Scott Galloway: I think we'll see. It always comes when you don't expect it and from a place you don't expect it.

Kara Swisher: Yeah. Something weird.

Scott Galloway: I have Bill Silber on Prop G, and he's right. Whenever we're worried...

Kara Swisher: Can you explain who Bill Silber is? I'm sorry.

Scott Galloway: He's a legendary finance professor at NYU, and he just retired. A real professional role model, just such deep domain expertise, taught for 40 years. He always says the markets climb a wall of worry. Whenever we're really worried about the markets, they seem to creep up. It's when you think, "Oh, everything's great. It's a new economic model." Some of the articles were in late '99 that we've moved to a new model of productivity and the markets could go to... and then all of a sudden, wham. It started with bad numbers out of Japan that infected the B2C internet market, and then it leaked to the B2B and then everything just collapsed. The fear I have is that we haven't let the markets fall to the natural level, that we bailed out everything and everybody. There's a decent ecological metaphor: if you don't have regular controlled burns and the dry brush just continues to accumulate, when you do have that lightning strike, wow, it just feels like we're setting ourselves up for a pretty serious super fire in the markets.

Kara Swisher: Interesting. You're using the wildfire metaphor. Interesting. There you go. You know, I had a relative who wasn't interested in stocks, and when I was young, I said, "What do you think about the stock market? What advice can you give me?" He was a businessman. He goes, "It'll either go up or it'll go down." And I was like, "Okay, thank you for that." And it was an entirely good piece of advice. Anyway, we'll see. I think this is a wait and see. I don't think there's an answer yet.

Scott Galloway: Well, nobody knows. That's the gorgeous thing about the markets is nobody knows.

Kara Swisher: Yeah, but I mean this year. I think if it doesn't happen in this year, you're wrong.

Scott Galloway: How's that?

Kara Swisher: If it doesn't happen this year, you're wrong.

Scott Galloway: Oh, yeah. In this calendar year. But think about this. There's a weird complexion or viewpoint forming. The majority of people working at Goldman and Alternative Investments have never experienced a down market throughout economic history.

Kara Swisher: The history of the Dow. They do that story all the time.

Scott Galloway: Yeah. So they don't know what it's like to get their hand cut off. Since the beginning of the Dow, one out of every five years, it checks back 20% or more. A 20% drop right now would be about 7,000 points. That happens every five years. And the market has not been down in 13 years. How does the market even respond if the market checks back 7,000 points? How does our society respond? How do all these Robinhood traders who've come to believe that they just lever up on margin with money they don't have, and all of a sudden they wake up and they're down 80%? What happens? I think it's going to be very interesting.

Kara Swisher: Yeah, you know what mine is? Ignore it. I just ignore it. I totally ignore it. And by the way, that's one of the reasons you're wealthy. A great strategy is to buy good companies and never think about them again. I never do. I never look at it. In fact, the woman who does my – I have an all-lady team, a lawyer, accountant, finance – I literally, they cannot get a meeting with me.

Scott Galloway: That's sexist. I'm triggered. That's sexist.

Kara Swisher: I know it is, but somehow.

Scott Galloway: Yes, go ahead. Speaking of adding a woman to this situation, here is, I did a prediction. Yeah, go ahead. It's about the infrastructure bill. Listen, I think he's right at the same time.

Kara Swisher: Really? I don't think the child care policy is going to pass. What do you think?

Scott Galloway: You don't think it's going to pass? You don't think it's being included in the infrastructure bill?

Kara Swisher: No.

Scott Galloway: Hmm.

Kara Swisher: Right now, it's one of the items on the chopping block. And guess who's the holdout? Manchin and Sinema.

Scott Galloway: Well, if someone had come to – if the government was a person and came to every one of us and said, "I'm not going to tell you how, but it's going to be expensive, but it won't bankrupt us and we'll spend a lot more money on other things. But we have a means of taking child poverty down 62%." I mean, how can you say no? I'm not sure. Senator Bennet summarized it perfectly for me. He said one of the terrible things about our country is that kids can't vote. And so we spend trillions of dollars upgrading Nana from Carnival to Crystal Cruises with all sorts of benefits for seniors. I think Social Security has been a successful program. But we ignore the people who don't vote in the Iowa caucus, and that's children. So for God's sakes, there's a lot of things you could strip out of that bill. But we're not going to reduce childhood poverty? I mean, Christ, again, we're the wealthiest nation in the world. We need to start fucking acting like it.

Kara Swisher: This is so discouraging. Yeah, they don't vote. That's exactly it. That's all she wrote. They don't vote. And Senator Manchin and Senator Sinema should be ashamed of themselves on this one. Ashamed of themselves.

Scott Galloway: I used to be from the camp that they're doing their job. They're moderates. They're trying to negotiate. Now I just think they're jonesing for the camera and they're drunk with their power being the holdout. Because some of the stuff they're claiming that they're not for, I just don't – how can you not be for this? Public support is high for this. Childcare subsidies, universal pre-K, a two-year free universal community college, an extension of the current expanded child tax credit.

Kara Swisher: It's the same thing with gun violence, gun control. Most Americans want some sort of gun control on some level. Not taking away your guns, just background checks and things like that. Go get them, Senator Klobuchar.

Scott Galloway: Yes, exactly. Exactly.

Kara Swisher: Let's bring in our friend of Pivot, Senator Amy Klobuchar, who was present for the Facebook whistleblower hearing with Frances Haugen. I think the time has come for action, and I think you are the catalyst for that action. You have said privacy legislation is not enough. I completely agree with you. Welcome, Senator Klobuchar.

Amy Klobuchar: Well, thank you so much, Kara. Hi, Scott. It's great to be on again.

Kara Swisher: Great. So let's get right into it. The Facebook misbehavior is back in the spotlight, something we seem to always be discussing. So what are the next steps here? And I'd love your overview of the hearings and what you think the impact was.

Amy Klobuchar: It was a bombshell. After working in this area for years and years, taking on everything from political ads to Russian interference in the election to app stores, you name it, this broke through. And Frances Haugen, I believe, will be a catalyst to action. Maybe it's because finally with my colleagues who have talked a lot, but then never seem to be willing to push these bills through. You know, maybe when you find out that content is being pushed out to teenage girls to glorify eating disorders with accounts like "eternally starving" and "I need to be perfect," maybe that's the jumping the shark, so to say, and that's it. That's what I'm hoping happened. She was so calm. She was so methodical in going through what happened. And she also had some solutions and opened people's minds in a way that I hadn't seen before. I think you know there's been bipartisan support for moving forward in this area that actually is not new. But it's galvanizing people for action instead of just hearing after hearing after hearing.

Kara Swisher: Yeah. What does that mean, galvanizing? So what are the next steps?

Amy Klobuchar: That means actually moving on, and I put it in a few major areas. The first is privacy. We can talk about that. As you know, the gigantic industry of tech comes in, a lot good, a lot bad, whatever. No changes to federal privacy law. That has to happen. States having to fill the gap creates a patchwork of action, and there should be changes to federal privacy law. There should be some updates to the Children's Online Privacy Protection Act, something my colleague Senator Markey has been pushing. There should be antitrust overhauls. I think we all know that this consolidation has led to a lot of these problems. That is not as intuitive, but I do think the senators get this. When you limit innovation, when you allow a bully on the block to make all the decisions, this happens. So finally, algorithms and how you handle that with liability and the like. Those are the four areas, all of them mentioned at the hearing. People are starting to be aware that maybe the children's online bill is different than privacy. There's new information in people's heads now, and I think they're starting to sort it out. And again, we already had movement. You know, Kara, we passed more money for the agencies out of the U.S. Senate. Senator Grassley and I passed the merger update fees. We got a venue bill that allowed the state AGs to take on tech as they want to through the committee. We have got the App Store bill introduced. Senator Grassley and I are very close to a bill that we've been working on for months now. So there is a lot of things happening. Pharma bills starting to go through, big ag bills gaining support, we've never seen this momentum. And then finally, this Frances Haugen comes forward and says, "Why are you waiting?"

Scott Galloway: Senator, the regulation and antitrust, all super important. You've been a leader around those issues. But they tend to be a pretty slow process and Facebook with all their lobbyists and their capital are pretty good at slowing it down and watering it down. I'll put forward a thesis and I want you to agree or disagree. I don't believe any of this really stops until there's a perp walk. One, do you agree with that? And two, do you think this new information that comes to light will inspire any sort of criminal actions at a state or federal level?

Amy Klobuchar: Well, as a former prosecutor, I'm cautious about throwing around words about criminal actions because I think you have to have the evidence. I've always been like this. And then you go forward and you allow people to look at that. So I will leave that for the state prosecutors or the Justice Department. But when you talk about a perp walk, I was thinking of those words. There are many ways to do that. Some is a hearing, right? That's been happening before. Sometimes I feel it's just like people throwing popcorn at the screen. But then there is also major accountability from the public. And by the way, the images of Mark Zuckerberg sailing while this was going on and the anger that people felt about that – you can have all kinds of versions of perp walks. And what I want to see is action, not just anger. I want this anger translated into action. That might be a better way of putting it. And there are some really straightforward things we can do here. Senator Markey's work to make the Children's Online Privacy Protection Act apply to older children. The work that we can do when it comes to privacy. And we know from what happened with Apple when they gave their customers the option to opt in, 75% did not opt in. Well, what if you did that with the other platforms? You require that. These are some of the things that Senator Cantwell and I and others are working on with a privacy bill. And I think they'll finally be – you are correct, every corner you walk around, there's another lobbyist. They have stopped this stuff from going forward. And I've already talked to our leaders about this in the Senate. I've talked to multiple Republicans in the last few days. I've seen increased interest in the actual bills. I'm saying things like, "So we just had this hearing and then we're going to do nothing? Come on. Look at this. This is months of work we've done on various bills that have been in the works on antitrust." I think the committee, when you look at the bills we have taken on, an inordinate number of them have involved competition policy so far, not just in tech, in pharma. An inordinate number of hearings that were just as bipartisan as the hearing I took part in that Senator Blumenthal and Blackburn headed up. So I just see the time on multiple fronts. You cannot just say one front. You can't just say this is all about children and Facebook. It's also going to be antitrust because it's got to apply to other platforms. The algorithm piece of it I think is the most interesting because how do you do that while still protecting speech? You could look at what has been suggested. Do you remove the immunity when there is amplification and they are making profits off the amplification? The answer is, "Well, what happens to the recipes that we want to amplify in the cookbook?" Oh, guess what? You're not going to be sued for that. So those kinds of things have to be part of the discussion. I've already put forward a bill to allow for the lifting of the immunity when it comes to vaccine misinformation when it is in the middle of a public health crisis. Senator Warner and I did one about discriminatory conduct. So that is another way. And finally, letting the researchers in. We can easily do that.

Kara Swisher: Yeah. And allowing for more transparency on algorithms. So one of the things that Facebook did this time was, and I wrote a column about it, they were very aggressive. They attacked her and said nobody knows nothing. She wasn't in the room. And my response was, if you work in a sausage factory and anyone knows the sausage is bad who works there and understands what happened, you don't have to be in the C-suite making bad decisions about sausage. So what did you think of the reaction? Because it was quite aggressive at her. I just saw Monica Bickert, who I thought was really quite sly, but terrible. She's the head of whatever she's the head of there. And it's been a very aggressive movement. I was sort of surprised. What did you think of that?

Amy Klobuchar: I was actually surprised. But I guess when you track back and come out publicly, I mean, they made it very clear, no apologies, right? They're not going to apologize. And that's what you saw in action. You saw the tweets from people that work there, the kind of things they were saying. And I actually asked Frances Haugen, I said, "They attacked the research" when she noted that Facebook was known for putting together – they boasted about it – this huge research team. And anyone that's read *The Ugly Truth* knows the story of how they put together these research teams and what happened. And then they undermine them and they basically throw them under the bus. Well, we know at the same time they were cutting out the access for NYU and some of the other places. So I thought that was aggressive. I think it's always – you know, the common attack from tech is, "Oh, you don't know anything about it. You're mistaken. You don't have the kind of knowledge we do." They do it to anyone that takes them on. But I was kind of surprised they did it to her.

Kara Swisher: Yeah. And what was the reaction from Capitol Hill with that?

Amy Klobuchar: I think anyone could listen to her for a few hours. She had this amazing ability to take subjects and explain them, which actually takes more smart sometimes than just knowing the complex subjects. And I think that no one believed that. Her calm manner, her actual embracing – she liked people that worked there. She liked some things about the company. She wasn't all just, "The company should be destroyed and abolished." That wasn't her tone. Her tone was, "I want to make this better," which is what everyone should believe, whether they're in the company or leading the company. And that's what I thought was so appealing about her as a witness. She also wasn't partisan. She was respectful. And I think it made – I just think we've been waiting for this moment. And I've loved our hearings we've had on big data and on home devices and all this. They've been really good. And they've been important because we collect the actual information and the senators involved. But this thing broke through, not just to the senators working on tech. It broke through to everyone in Congress and to the public.

Scott Galloway: In the 80s, one out of two fatalities on the road involving youth involved alcohol. Then mothers bound together and put tremendous pressure on Washington to pass laws that resulted in a raising of the age to drink alcohol. This does feel different because it feels like parents are really incensed around this. Does it feel different for you because you hear from your constituents? It does feel like this has taken it to a new level of mistrust, malevolence, mendaciousness, whatever you want to call it. Why wouldn't we just consider age-gating? We age-gate alcohol, tobacco, pornographic content. Why wouldn't we just age-gate algorithmically driven content, especially across some of these platforms? And does it feel different this time?

Amy Klobuchar: Yes, that is one approach that I think is worth looking at and it's certainly supposed to be happening and they're not. They're allowing younger kids on Instagram, we now know like 40% of these kids are on it, even though they're not supposed to be. So that is a piece of it. And you look at the wealth of these companies and they should find a way to do this. But beyond that, I think your bigger question, which I loved, is that – I wrote in my book about how in the old days it was farmers with their pitchforks and union organizers that really got this thing going to a pitch scream so that Washington finally acted. And some of it was states acting in their own ways. And that pushed the action in Washington. By the way, you've already seen this with privacy. The moms and dads, they have been through hell with this pandemic already. Everyone's much more aware. They've been hanging out with the kids at home, balancing their toddlers on their knees and their laptops on their desks, teaching their first graders how to use the mute button. And guess what? They've realized how their kids are looking at these devices all the time, the kind of sites they're looking at. And I think what Frances Haugen stirred up – it wasn't all as much as the eating disorders for me as someone who's led a bill, passed a bill in this area, and knowing it's the number one mortality rate for people with mental illness – how viscerally bad that was. I think a lot of parents heard all this and they thought, "Wait a minute. Yeah, I'm so mad that these things are targeting my kids and these ads of whatever kind it is." And I think that today, parents trying to raise their kids in a really hard world and realizing they're up against this big Facebook and all these platforms that are making it harder for them – I think that's going to be the demand for action. By the way, I saw that happen with EpiPen. I took that on and we were not making much progress on some of these issues. And the moms basically all taking it on made a difference to force some rebates and other things that brought the price down. That was my own experience. My daughter has an EpiPen, so I was able to see that and was on the front line of getting that done. But I think certain things involving parents are about as personal as it gets. And in a moment where you don't have as many connected groups working on things and it's much harder to do it, especially in the pandemic, you have to rely on this kind of broader anger. And I think that tapped in with parents.

Kara Swisher: It's interesting. My dentist was mad at Facebook and he never has spoken of it. He was like, "Those assholes."

Scott Galloway: Did he get so mad? Did that affect your dentist?

Kara Swisher: No, he was good. The crown is excellent. But I've never heard him say anything. He definitely had opinions, which was fascinating. Now, last thing, Haugen is not on board for breaking up Facebook, although she did suggest some sort of ministry or data privacy agency. That makes me nervous. I have to say that one made me nervous. I'm like, no, the government should not be in the business of content whatsoever.

Scott Galloway: Yeah, I don't.

Kara Swisher: Let me just ask the question. So one is, what do you think about that solution she had? And then the one she didn't want, which is your area of expertise, antitrust. A lot of the courts are overturning things because of current antitrust law. They have to. It's not that they're conservative. It's just that the law is written. And that's how Facebook is getting out of certain things and making it difficult. Do you think there needs to be a change in the antitrust? You said this, but breaking up Facebook, this is not probably going to happen. So I'd love to get your thought on those two things.

Amy Klobuchar: Yeah, I'm so glad you're clarifying this because I did note some of my Republican colleagues go to the nth degree. And by the way, that's probably not about Facebook. It's about them, certain people with other interests, with businesses. The answer, how I handled it after she'd said that, is I actually asked her about a bunch of the stuff we're working on in the antitrust. She literally gave a thumbs up from the witness stand, which is about discriminatory conduct, self-preferencing, exclusionary conduct where because you're the big guy on the block, you're the big platform, you make it harder for others to compete because you own all the data, because you put your search preferences for your own products up at the top. You know all of this conduct going on. So she was way into doing something on that. I think she – and I'm going to talk to her in the near future here – I think she gets that that actually limits innovation when you have that ability. That is all antitrust. It doesn't sound like antitrust, but that is the area of competitive policy. So, you know, what she's basically saying is, "I don't want to demolish the company." That's how I read it. "I don't want to get rid of it." But part of what you do with antitrust, as you know, Kara, is when a merger comes before you, they look to see, does this hurt competition in some way? Existing laws have allowed the DOJ and the FTC – they're using them right now to go after those cases against Google and Facebook. And it's not easy. It has allowed them to take on some major mergers even as we know now, either before or after. But I think we need to upgrade the laws to make it easier. My guess, given how she answered the questions when I asked about some of that stuff, she would agree with this. It's just when people just say, "Should we break up all these big companies?"

Amy Klobuchar: You know, people are going to go, "Well, no, that's not quite the answer." I get that. But it doesn't mean that you don't, when you start going under the hood, this is about stopping mergers that are anti-competitive. This is about possibly divesting some assets, but not destroying a company. This is about consent orders where you tell two merged companies, the Justice Department says, "You can do this, but you're not going to be able to do that because then there'll be no competition in an area." And it's about updating our laws so they're as sophisticated as the companies that are participating in our economy, when we have done nothing because everyone's listening to all these people that have been paid by the tech companies, literally millions of dollars, throwing them around at fundraisers, throwing them around everywhere. And that's what I said at the hearing. Let's be honest. That's who you're listening to when you go around the corner. And you better be listening to Francis Hogan.

Kara Swisher: All right. Senator Klobuchar, good luck. I can't wait to see all these bills.

Amy Klobuchar: As you can see, I'm energized. I finally got this on the front page. We've got it in the thing. People are actually — we have to get up and nuts on this moment or there's going to be the next thing. And then everyone, that's what the tech companies will want. They want it to go away.

Kara Swisher: They do. Keep fighting the good fight, Senator. Keep fighting. We appreciate it. Thanks for coming on.

[Interview ends]

Kara Swisher: All right, Scott, that was fantastic. We love Senator Klobuchar, don't we? We really are fans. We're fans of hers. We think she's rock and she should be president. Smart, hardworking, no nonsense, very honest, high integrity. I'm behind her for president.

Scott Galloway: Yeah. What do you think? I'm on team Klobuchar. I agree with you. I think she's fantastic. I told you my encounter with her about it. I said, "Hello, Madam President." And she goes, "Oh, Kara." And I go, "I'm not talking to you. I'm talking about the golden child."

Kara Swisher: I like her a lot.

Scott Galloway: She got into — I thought she was getting into a big, one of those big, you know, black limo things at a party we were at. And she got into like a, I don't know, it was like a Toyota Corolla. And someone else got into the big car.

Kara Swisher: Anyway, he's very Minnesota.

[Transition]

Kara Swisher: We'll be back with more Friends of Pivot and their predictions for Q4 and beyond, as well as some of our own reviews, all on the app. Download today.

[Ad break]

Kara Swisher: All right, back with predictions. Segment for our quarterly review, looking into Q4 and beyond with our friends at Pivot. Let's start with one on supply chain by Kevin O'Mara.

Kevin O'Mara: [Recording] Hey, Kara. Hey, Scott. Kevin O'Mara here, co-founder of Zero100. Here's a supply chain prediction for 2022 that I'd love to see happen. It's about Apple's next big platform, cars, and the bet that Tim Cook will end up doing for the American economy what Henry Ford did in 1914, when he blew people's minds by doubling wages in his auto plants to $5 per day and helped give rise to the middle class. My bet is that next year we'll see the first serious steps toward ramping up a U.S.-based production of cars, batteries, charging infrastructure, and most important, a service and content ecosystem like Apple stores, but for cars. And with all of this, the creation of tens of thousands of high-paying, middle-class friendly careers. Tim Cook is the most supply chain savvy CEO in the world. I bet he'd love to have this be his legacy.

Kara Swisher: So basically a renaissance in American manufacturing that we're going to start reshoring or onshoring more manufacturing. I think that's interesting. By the way, let me just correct Kevin. Elon Musk is Henry Ford here, has been doing all the pushing. I don't know if he can do it like Cook can. Or at least the Edison, right? He's the one that started this, started the fire here in this area. That said, I agree.

Scott Galloway: I agree.

Kara Swisher: He's comparing them to Henry Ford because Henry Ford is the one that had the supply chain, essentially the assembly line.

Scott Galloway: Yeah, well, the assembly line. You figure it out. So what do you think about this? There's no doubt about it. I was on the board of a consumer products company, and we were reshoring because we're using automation. And what COVID has done is realize that a lack of diversity in your supply chain, specifically if you're a company that gets the majority of your shoes out of Vietnam, for example, it creates tremendous vulnerability. If you get 90% of your tops in your specialty retail are out of China, it just creates real vulnerability. So a lot of companies have decided that in addition to the interesting technology, the proximity, and also a reduced risk and supply chain interruption, you're seeing a lot of onshoring, a lot of more kind of high value add manufacturing.

Kara Swisher: What's the downside? That Americans cost too much and don't work hard enough?

Scott Galloway: Well, no, the downside is that we have a tax policy that makes it much cheaper to hire a robot than an individual. If you hire an individual, you have to pay payroll taxes. Whereas if you hire a robot or put a robot in place, you get to amortize it, you get tax deductions, you don't have to pay payroll taxes. So I think we have to figure out a way that we reinvest in people such that they have the skills to program, maintain this automation because it's coming. But people — or I think Andrew Yang summarized it perfectly: people demonize immigrants. If you're looking for a culprit of manufacturing job loss, you should stop robots at the border. Robots. Bill Gates talks about that, tax robots. So on the whole, I think it's a really good thing, onshoring. But we just have to be thoughtful about the jobs it displaces and how we reinvest some of those proceeds from that productivity back into retraining and apprenticeships. We can't do what we did with globalization, and that is it translated to enormous prosperity, but no progress. We didn't retrain or invest in the people left behind.

Kara Swisher: Excellent point. Something that could be interesting. Apple definitely is going to move, as you've talked about, into this space rather significantly. I agree with you. They have to, and they're good at it. Let me ask you this: would you get on that waiting list?

Scott Galloway: I would get on the waiting list for an Apple. I would. I would. Yeah.

Kara Swisher: Although I, the reason I don't get a Tesla is because it seems too expensive. I don't want to pay that. But it's got to be a pretty cheap price, I have to say, for a car. I don't love cars that much that I need to.

Scott Galloway: It won't be cheap. Apple is a luxury brand. It will be expensive.

Kara Swisher: I always say I'm not paying that much for a car. I just, if it's over, I won't pay for it. And even then, I say no. So that's why I have a Kia. Anyway.

[Transition]

Kara Swisher: All right. Next, a prediction on antitrust actions from Scott's best frenemy, Preet Bharara.

Preet Bharara: [Recording] Hi, Kara and Scott. An update to my predictions for antitrust actions in the coming months. The Senate Judiciary Committee at long last is about to hold a confirmation hearing for Jonathan Cantor, Biden's nominee to head the Department of Justice's antitrust division. He's a vocal critic of big tech, and he enters the scene as the DOJ mulls a lawsuit against Google's dominance of online advertising. Google also continues to have trouble in Europe, where the company is currently appealing $5 billion in antitrust penalties over the Android operating system, which is a potential sign of things to come in the U.S. And Apple may see further litigation related to its app store after a federal antitrust suit filed by Fortnite creator Epic resulted in a split decision.

Kara Swisher: Preet. Antitrust. That's what we just talked about with Senator Klobuchar. So what think you of Preet's feelings on this issue?

Scott Galloway: I think he's right. I think Jonathan Cantor's a really interesting character. I like him. I got to be honest, I wasn't even listening. All I could think about was at Code, we had that party on that roof deck and I saw this semi-circle of people just enraptured. And I walked over to see what was going on. I'm like, "Is there free cocaine over here? What's going on here?" And it was Preet with like a glass of wine talking about something. And literally, it was like that. Did you ever see the movie *Tootsie*? And Bill Murray is at a party just talking about pop philosophy and everyone's just entranced. Literally Preet is the most interesting man in the world. And I just couldn't stomach it. Everyone's like laughing and like, "Oh, Preet. Oh, Preet. Oh, my God." Anyways, I wasn't even listening to what he said.

Kara Swisher: Oh, my God. He said antitrust is coming with Jonathan Cantor, Google's dominance, Europe, Fortnite, et cetera. What do you think?

Scott Galloway: Well, we know it's coming. We just don't know if it's a year or 10 years. I'm an investor in Epic and Fortnite. I think it's a monster company. I think it's — everyone talks about the metaverse. I think Fortnite is the leader, if there is a leader in the metaverse.

Kara Swisher: But like you've been passing out those mugs of Cantor, Woo and Khan, whatever it is. I just sort of sick of talking about it. I'm ready for it. I'm ready for the cases.

Scott Galloway: You're sick of talking about everything. You just want things to happen.

Kara Swisher: That's what I want, right? Well, the problem is they wait us out, right? They wait till there's another tragedy. They wait till there's another thing that distracts us, but they keep pounding away on the front lines with their lobbyists and their money, and then the fires subside.

Scott Galloway: No, no. May I make another point?

Kara Swisher: Yes, go ahead, Kara.

Scott Galloway: Sooner or later, a fox runs out of tricks and gets caught. Don't sell peanuts to feed the monkey. Don't sell your soul to feed peanuts to the monkeys.

Kara Swisher: There you go. There you go. This will happen. I think this will happen. I think everyone's ready. And this is what happened with Microsoft. It went on for years and years. It seemed endless. Bill Gates would run us all. And then he didn't. So I'm just saying things happen. Things have their time. We're not China. This is how it works. Something's coming. I don't know what it is, but it is going to be antitrust.

Scott Galloway: All right, that's my song from *West Side Story*.

Kara Swisher: What is going on? First you call, now you're singing show tunes? Jesus. What is going on here? Who are you? And what have you done with Kara Swisher?

Scott Galloway: My voice is back. That's why it's almost back.

Kara Swisher: There you go.

[Transition]

Kara Swisher: The next prediction comes from Abdul El-Sayed.

Abdul El-Sayed: [Recording] Hey, Kara and Scott. This is Dr. Abdul El-Sayed, physician, epidemiologist, former Detroit health commissioner and host of Crooked Media's Health and Society podcast, *America Dissected*. I predict that by the end of this quarter, we'll have seen a massive reduction in COVID-19 cases, hospitalizations, and deaths, and that the Delta wave will largely be behind us. Let me explain why. Even though there's a safe and effective vaccine out there, nearly 30% of eligible people have chosen not to take it. Instead, a substantial proportion are picking up some immunity. They're just doing it the hard way, by way of infection. Every time someone's infected and recovers, they pick up some natural immunity. Don't get me wrong, that immunity is much more specific to a given strain and less durable, but it still protects that individual for a short period of time, inching us all closer to that herd immunity that is so critical to keeping COVID at bay. You know what would really make my prediction come true, though? If people quit messing around and got their vaccine. Either way, let's hope I'm right about this so we can all have a happy holiday.

Kara Swisher: A lot of people don't think — I just read an article about herd immunity, we're never going to reach it. But I see that, you can beat this thing one way or another. Tons of needless deaths and hospitalizations and strain on the healthcare system that shuts other people who have other illnesses out. Or you can just get the fucking vaccine and stop it. Like, what is the — people don't mind the cost, either to them or other people. That really, that really chaps my ass, I'll tell you that. But to his prediction, and you're scared to say this out loud, and that's where I think the veracity of this prediction comes in. I had Dr. Saeed on the Pivot show. He's a very impressive guy and a comer. A lot of people, really thoughtful people, say the same thing, that this is — we're beginning, if you will, to see the burnout of the virus. And Scott Gottlieb, former FDA commissioner, I think the CEO of Pfizer, and these are responsible people who don't make those types of statements without real data. But what they're saying is — I mean, the problem is we're getting there the most painful way. But they think that there's a lot of smart people saying they think this is the last kind of wave, if you will, and then it's going to start. I mean, eventually these viruses do burn out, at least in history. It's just a pain we're going to incur to get there.

Scott Galloway: Yeah, I think that's absolutely right. Of course they do. We're still not having the 1918 Spanish flu. But it's how we do it, right? There are thousands of people, tens of thousands of people that didn't need to die, many more than that. And the hospitalizations — if I read another story about some guy that had a heart attack or a minor thing, a relatively easy to treat thing and couldn't get in the hospital because at that particular moment, that particular state was full of people who hadn't been vaccinated. And it'll pass. Of course, those people will get out of the hospital. But what was that cost? Why did that guy have to die? It's like — what's it called? Collateral damage. Like, why? That's the part. We're so easy to push that away. I was thinking about solutions for the next enormous tragedy of the commons. And one of the great prophylactics against these tragedies is film and camera. That is a big component that ended the Vietnam War — journalists were allowed to go on cameras and film the horror that is war. And then the American government said, "You know what? That's a bad rap, get rid of the cameras." And then when we go into Iraq and hundreds of thousands of people die going to Afghanistan, they don't allow cameras. And we don't see up close the horror. And I think something that really could have had a material impact is if we'd figured out a way to blur out the faces and had sites that showed what was going on in ICUs around the nation.

Kara Swisher: Well, they had a few of those, right? And they were incredibly depressing.

Scott Galloway: Well, they should be. They should be horrifying. And it's like Upton Sinclair. It's like Jacob Riis with children working way back with photographs. This is what it — look at it and see.

Kara Swisher: One of the things that's driving me crazy is like a lot of these sort of VCs that are what I consider anti-vax. They're like, "Oh, Florida's going up." I'm like, "Yes, but the cost." They don't care about the cost. Right? They don't care who died or who got affected. They're like, "Well, it turned out." Of course it's going to turn out. Everyone knows that. It's what it costs to get there.

[Transition]

Kara Swisher: And finally, Sheera Frenkel, co-author of *An Ugly Truth: Inside Facebook's Battle for Domination*.

Sheera Frenkel: [Recording] Hey, Kara and Scott, Sheera Frenkel. My prediction is the next year is likely going to mean a lot of time spent in Washington for Mark Zuckerberg, who, as we know from people close to him, has always joked that he is allergic to the nation's capital, to Washington, D.C. But lawmakers seem incredibly energized by the recent reports from the Wall Street Journal regarding the harm that Facebook causes to teens. And while antitrust regulation and the looming question of whether Facebook is a monopoly are something that could take years for them to sort out, lawmakers can act very quickly when they want to on issues like, are young people, especially teens and preteens, safe online? So I imagine that the next year is going to be a difficult one for Facebook and that Mark might want to reconsider his feelings on Washington.

Kara Swisher: He doesn't like spending his time on this stuff. And he's going to spend most of his time on this. This is the era that Bill Gates moved into and stayed for a very long time. And I agree. Historically, this is where we are. Much faster for Mark Zuckerberg than Bill Gates. But this is where he's going to spend his time. And that means the already not — he's so many compares to Bill Gates, by the way, in terms of a product that many people didn't consider innovative, et cetera, et cetera. The obstreperousness, Bill Gates was quite obstreperous. And so that's what she's talking about, is that he's moved into this era. I think that's 100 percent right. What do you think?

Scott Galloway: Well, it's interesting. What Senator Klobuchar said was really interesting, and she said there's different forms of purple.

Kara Swisher: Yeah, I like that.

Scott Galloway: And you can't imagine that when the Zuck is sitting before a group of people who are elevated. I mean, any room he walks into, him or Sheryl Sandberg walks into, and this is what happens, and this is the arrogance of CEOs and how they become vulnerable and how we as people, when we recognize success, become vulnerable. And that is we ultimately, accidentally and unintentionally surround ourselves with people who just want to figure out what we think and get there first. And you end up surrounding yourself with a bunch of people who agree with you. So you're not used to standing in front, sitting in front of people who can interrupt you, who are there to make you look stupid, who are there to call you a liar because you are a liar. So that's got to be a really uncomfortable experience. And he's got to spend at least five days with these — basically getting just like gang banged by all these communications consultants who say, "When they ask this, slow down, look thoughtful, repeat the question, say, 'Senator, this is an important question' and try and run out the clock. And then when you get really panicked, say, 'I need to get back to you.'" I mean, he's got so much. It can't be fun. There's no upside to this for him. But quite frankly, I'm beginning to believe testimony of Francis Haugen is worthwhile. More testimony from Jack or Sheryl or Mark, quite frankly, it's just a cheap thrill. It's empty calories. We know they're lying. We know they don't have our best interests at heart. It's time. It's time for senators to do press releases saying, "We have just passed this bill."

Kara Swisher: Agreed. I think you're right. It's kind of enough already. The theater is great. The theater is great. Enough. Let's move to it. Well, she said that. She did say that. I agree. I think it's a really interesting time. I think he might get tired. This is when Bill Gates left Microsoft, you know, despite his incredible power over it — it was after this when he realized he wasn't, you know, and he could go off and make things. I know Mark, Mark has an idea that he's a little more innovative than he is, rather than a borrower, which I think he does well. And so I think that the driver of the car is someone — I was texting with someone pretty prominent from that company or former person. And they were like, "I finally realized the driver of the car is the problem. We need a new driver of that car." And I would agree. I would agree. I think you're right to talk about that. I don't agree there's going to be a perp walk that you talked about. I think it's more what Senator Klobuchar talked about.

Scott Galloway: You know what I think? I actually think there is going to be a perp walk. I'm not sure it's going to be one of the big names, though. That's the thing. I mean, when they go after them, they try and find someone mid-level usually to get them to flip, to put pressure on them, right? It's going to be very interesting. But I also want to acknowledge the majority of people I've spoken to agree with you. I don't. But by the way, they also are going to dig their heels in.

Kara Swisher: I have gotten — we may just publish them. I have asked every major Facebook executive for an interview. All declines. I'm just going to publish all the emails to show you. Like, "Why don't you talk to them, Kara?" I go, "Oh, we ask." So it's really quite astonishing that none of them will talk to me. And they give the bullshit reason that I mean to them. Like, too bad. They can deal with a mean lady.

Scott Galloway: Oh, you know what? You nailed your prediction literally on cue. You said they're going to start needling and trying to undermine our credibility. And literally on cue the next day — I forget his name, Andy Stone, the latest person to basically arbitrage his reputation for millions of dollars — is saying, "Just to be clear, the documents were stolen." First off, these documents aren't stolen. When the SEC grants you whistleblower status, that means you didn't steal anything. That means you're trying to help the world or help the government or comply with laws. And as a result of that, you decided to turn over evidence of the wrongdoing. These documents are not stolen.

Kara Swisher: Oh, I know what they're doing. You're exactly right. The Trump thing, like, "Oh, she was never really in a decision-making."

Scott Galloway: Yeah, decision-making.

Kara Swisher: It was literally on cue the next day they did exactly what you said they were going to do. I hate being right about these assholes. When they constantly say their go-to is, "What this shows is we desperately need regulation." Talk to any elected representative about how Facebook is actually embracing regulation in Washington. They're like, "They talk a big game and they want to shape it to their advantage," which quite frankly, I think they did in Europe. I think this regulation has ended up helping them in Europe. But the notion that they want a warm embrace of regulation, like, "Help us. Throw me in that briar patch. Help us figure out how to be better people."

Scott Galloway: Anyway, Senator Klobuchar is on to you.

Kara Swisher: Anyway, that's the show. We'll be back on Tuesday for more. Scott, read us out.

Scott Galloway: Today's show is produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Indertide engineered this episode. Thanks also to Drew Burrows. Make sure you subscribe to the show on Apple Podcasts or if you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business.

Kara Swisher: Mothers against Mark and Cheryl. Mams.