Billionaire Campaign Spending, Apple's Budget Gamble, and Hegseth vs. CNN

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0:00

I'm curious what you think because you have sons. I have sons.

1:23

They don't gamble.

1:27

Yeah, but you're a better parent than me, so.

1:27

Yes. Yeah. Hi, everyone, this is Pivot from New York magazine and the Vox Media Podcast Network. I'm Kara Swisher.

1:29

And I'm Scott Galloway.

1:39

And we are live from south by Southwest in Texas. So before we get to it again, we're excited to be here this live episode. We want to thank our presenting sponsor, Odoo. They've supported, they sponsored our Pivot tour last year, so they're really into us. Anyway, we've got a lot to get. Well, first of all, you having a good time here? Are you enjoying it?

1:40

I'm having a great time. I went out last night. I'm so sick of rolling up to the parties now kind of suck because you meet some guy and you're like, I want to grab a drink. And he's like, I'm eight years sober and now I'm a peloton influencer. Fuck you. I want to find the guy who's in a custody battle so he can never see his kids. That dude I'll roll with. No, I'm having a nice time.

2:09

You're having a nice time.

2:31

Everyone is working on their sleep. Well, good for you.

2:32

So you're leaving. You're going to the Vanny Fair Oscar party. That should be fun.

2:36

Hello.

2:39

Yeah, that should be good. I'm not going there.

2:40

I'm so excited.

2:42

I'm staying here.

2:42

I was the plus one and the +1rsvp'd yes, and Kara said no.

2:43

So you'll have a good time. Try not to bother the celebrities. That's my only advice. Just be cool. Okay? Can you do that?

2:48

Thank you for that. That's hugely helpful. Thank you. Just be cool.

2:56

Is there anyone you want to meet? Is there like Sean? He probably won't be there.

3:01

I want to meet simple. I want to meet the. I was going to say the gay hockey guys. What's it called?

3:05

Heated rivalry.

3:11

Heated rivalry. I'm sorry, I'm just announcing now. Executive producer, season two, heated rivalry, Swedish women's team. Biggest show of next season. Biggest show of next season. Oh, God, I might go for two here.

3:12

I'm gonna alert security at the Vanity Fair Oscar party for this. But anyway, just be cool. Say nice things. You'll probably get recognized by some of them. It'll be nice.

3:28

I'll be at the bar.

3:37

Not too early or. All right. Excellent. All right, we've got a lot to get to today. We've got a lot to talk about. There's so much. It's crazy amounts of news all the time and every moment. But first thing, surprise, surprise. Wealthy people are swaying elections with their money. Billionaires up about 19% of all reported campaign donations of 2024 federal elections. This is a quantum leap in numbers. Within the 19%, for every dollar that went to Democrats, $5 went to Republicans. The billionaire families gave an average total of $10 million each, roughly equal to the amount 100,000 typical donors give combined. Scott, before Citizens United, the share of billionaire spending was under 1%. This is 19%. That's an enormous amount of people. Enormous number for a small amount of people. Let's talk a little bit about that. Because obviously billionaires taxes are being discussed. There's all manner of things happening here, but their influence is absolutely clear.

3:37

Yeah, I mean, if you think about 19% from 900 people, it's the boring stuff that kind of moves the needle. That's not that interesting to talk about. But we're going to wash, rinse and repeat a cycle of autocrats. I actually believe there's if you look at history, there's as much danger of an autocrat coming from the far left as from the far right. I believe the far left is as dangerous as the far right. It's the extremes that present a threat to society. And the two things that are probably most important to avoiding a strong man or a strong woman from either side of the party are very boring things. But until we have them, we're going to have the weaponization of a decline in the structural and economic standing, in my opinion, of middle class, especially middle class males, who tend to be unfortunately more violent and upset when they don't have economic or romantic prospect. But the two major reforms that need to happen or we're going to have a cycle of strong men and strong women for the next 50 years is one we need to gerrymander the US because the general election no longer matters. It's the primary, and who turns out in the primary, the crazies. So every district now is hard blue or hard left, and we keep sending 535 very far left or very far right. People who share no commenting, no collective values, don't want to work together and nothing happens. And they genuinely don't like each other. And the, the narrative from our leadership is not how do we work together and get something done, it's that the other guys are wrong. And so it creates a level of division and stasis that's really unproductive. And then the other thing is Citizens United. We can't have a small group of people who aren't evil, but incrementally will say, hey, Charles Schumer. And I'll use the Democrat as an example because we always talk about Republicans. Democrats take a lot of money, too. It's Republican, it's Republican donors, typically, but also Democrats do bask in a lot of the PAC money. And what happens is Republicans are much more overt about trying to get tax cuts for who they think are the most productive people and corporations in the world. What Democrats do is just wring their hands and kill stuff in committee and say they have concerns about things. But if you have. Until we have Citizens United overturned and de gerrymander, we're just gonna ping from the far left to the far right for the foreseeable future.

4:37

I do think that Republicans are sort of doing things in plain sight in an effective way by channeling all this money. Right. But the number from going from 1% to 19%.

7:06

Incredible.

7:18

And you're right, it's a very small amount of people. And actually it's A small amount of people from Silicon Valley. So it's a very particular. I mean, there's the Ulanes, the box people, there's a bunch of other rich people you don't know as well. And by the way, look on your bottom of your bo, that's what you're getting from Amazon is from this very far right family. But one of the things that's the problem here is that this stuff is done in plain sight and they're not gonna overturn Citizens United, from what I understand. I interviewed Larry Lessig recently, who has another case that could hollow out Citizens United in terms of super PACs and dark money. What is the solution until then? Because I don't think they're letting up. I think they won't let up in this presidential election. It doesn't seem like all of a sud. Elon Musk is gonna start calling himself they them. It's not happening for us. So what could be done in the interim? Because he will continue to spend. He's sort of the poster child for this. But then you quietly have a whole bunch of them doing the same thing.

7:19

The honest answer is I don't know. I don't know if there's a way to prohibit certain political spending across certain more targeted media. So I have a movement called Resist and Unsubscribe. And neither Alphabet nor Meta would take my dollars to drive traffic. But if you want to promote coal and get in the way of the earned child tax credit, spend away. So also I think there might be some workarounds that people have talked about by going state by state. But until, I think, until, unless it's overturned, which I agree with you, it doesn't. Look, this is all a word salad of saying I don't know.

8:21

Yeah. So when you think about, we've talked a lot about the billionaire tax. You have proposed other things like an AMT tax. And there's some things in committee right now, speaking of Democrats, which seem much more effective, which is giving tax relief to people under a certain number and then at the same time making the group of people taxed larger.

8:57

Well, there's three different tax proposals. So the Democrats, to our credit, have finally wised up and realized that they need to move from their objective of redistributing virtue, telling other people they're not as worthy, constantly talking through identity politics about what's right and what's wrong with the world. And if you tell billionaires they're evil and white people they're racist and young men that they're Predators, they'll leave the party. I'm like, okay, this party's not for me. And if you look at those three groups, they have largely abandoned the Democratic party. So what they realize is that the key to 26 and 28 is to talk less about redistributing virtue and redistributing income. And also that the best narrative for redistributing income is tax cuts, not handouts. Now the three, there's the Khanna proposal, there's the Booker proposal, and then there's the Warren proposal. Warren is basically class warfare. It's a 5% tax, wealth tax every year. That may not sound like a lot, but the majority of people don't have 5% liquid taxes sitting around. I can't imagine the hundreds of thousands of people who would be hired to try and diminish or decrease or lower the value assessed value of billionaires wealth. It goes after basically 900 people. Actually that's not true. People over a billion. It's 5%. But to tell billionaires they have to come up with 5% of their wealth every year, I do think that that's the tipping point where you would lose somewhere between a quarter at least from a residency standpoint to a third of billionaires in the U.S. the example is the non dom tax in the United Kingdom. It was, theoretically it made all sense in the world. It's like, you've been here for a while, you should pay UK taxes. The tax receipts this year are going to be lower because 10,000 millionaires have moved away in the last year and people have this populist bullshit of let them go, well, okay, who's going to pay for the nhs? So the wealth tax doesn't work. The wealthy are the most mobile people in the world. They have homes all over the world. They can have really nice lives in Milan or in London. So if you're looking to actually be effective, not just right, the wealth tax doesn't work. Rose is more about social services and corporate taxes, expanded child tax credit. The one I like the most is Booker's. He's saying, okay, it's the first 75,000 that's tax free right now. What people don't realize is that first off the myth that wealthy don't pay their taxes. The top 1% paid 19% in 1980, now they pay 42%. It's the 0.1% that are getting away, quite frankly with murder, that can use all sorts of tricks to lower their tax rate into the high teens. But the 1%, the workhorses mom's a baller at a law firm. She's a partner making a million and a half, 2 million bucks. Dad owns three chiropractic clinics. He's making 800 grand. They make 2.3, 2.8 million. They probably live in a blue state, in a blue city. They're paying 48 or 52% marginal tax rates. So the whole notion of tax the rich doesn't go very far. What I think what Booker's saying is essentially, if you go the first 70, the first 29,000, pay no federal taxes. Right now he's saying, be at the first 75,000. Now, the devil in the details is that even though it sounds like, oh, that benefits people who make up to 75,000 the most, it actually benefits people who make 150,000 the most because they get to apply that free 79 in the lower tax rate on a larger base. It's a good idea. It's time that we level up the middle class. So I like that. And it's a little bit more elegant. Whenever you send money to Washington, as opposed to lowering taxes, there's some inefficiency and friction in Washington. So I think it's a good idea. But I think there are more elegant ways to raise tax revenue lower. Basically do away with or lower the estate tax, the exemption on money that's inherited from 30 million to 1 million. We're creating dynastic wealth, and the key is to have taxes that are least taxing. If your kids inherit 11 million instead of 14 million, you're obviously knows the less happier because you're not around to see it. And the kid isn't any less happier if he gets 11 million or she gets 11 million versus $14 million. The other thing we need is AMT, and that is if you make over, say, a million bucks or you're a corporation that makes over 10 million bucks, use the 4,000 pages of loopholes to skirt it down, skirt it down, 1202 depreciation. But if you're not paying at least 40%, there's an AMT, so an alternative minimum tax, and then triple the budget of the irs. Because the biggest tax cut in history that we don't talk about is that the Trump administration has essentially neutered the irs. So crime is going to go up when there's no cops on the beat. Supposedly $750 billion a year is called the tax gap, which is uncollected taxes that are owed. So get rid of the estate tax exemption. Alternative minimum tax of 40%. Support the IRS and support the IRS as opposed to what feels a little bit like class warfare.

9:18

Yeah, it's an interesting thing. I don't think it works very well because people are aspirational. That said, the tech people, especially, who are the wealthiest, have not really slathered themselves in glory in terms of people. We. I mean, the brand has gone down, and so I think people don't. When Jeff Bezos rents Venice or Alex Karp talks about disenfranchising white Democratic women, I think that's what he was sort of saying in his statements the other day. It feels like, let's get them. Like they're sort of. They're creating an anger toward them that. That I think is unnecessary and unproductive. And at the same time, you sort of want to take all their, you know, leave them naked without clothes. Well, I don't want to see them naked. That's not true. But it's a real conundrum. And I do think one of the things that has to happen is there's got to be some neutering of Citizens United in that regard, because I think it's very clear what the trends have been.

14:28

On a middle meta level, the biggest tax cut would be having the stones to go after entitlements because we spend $7 trillion and $5 trillion in receipts. And every time we do that, in order to keep the government pumped up and going and the asset prices, the assets which you and I own, keep them elevated, we issue more debt. So the biggest tax cut in history would be fiscal responsibility. And it's a tax cut on your kids in the future who are going to have absolutely no money in the government to invest in education or technology. And if you really want to get serious about, quote unquote, taxing future generations, some Democrat is going to have to be the adult in the room and say that if you make over a million dollars a year as a senior citizen, you're not getting Social Security. And we need to move back the age and we need to means test it and we need to distribute GLP1 and bring down health care costs. But if we're serious about lowering taxes on future generations, we can have populist ideas. But what we need to do, quite frankly, is just have more fiscal responsibility because the deficit every day is a $2 trillion tax on generations because someone's going to have to pay this shit back.

15:25

Well, that may be true, but it's the Trump administration who's brought up the deficit more than any other of any

16:32

of the that's been a bipartisan thing,

16:37

certainly, but Trump is 7 trillion.

16:40

George Washington to George Bush. 30 trillion since George Bush, but Trump's been the worst.

16:42

So we're going to move on to March Madness kicks off this week, and sportsbooks are expecting to take in $4.5 billion in bets on the NCAA college basketball tournaments. Now, only 11% of that will come from. From the prediction markets this year, which is a large amount. But that's a perfect time for Polymarket to announce that it's bringing in Palantir and TWG AI to monitor sports contracts and flag anything suspicious. Reminder. Polymarket is backed by Peter Thiel and 1789 Capital, which is Donald Trump Jr. S fund. An AI system monitoring predictions markets. Seems like that's the fox guarding the hen house.

16:47

But is it meant to? Is it meant to? So in the Mamdani race, what was strange when you see billboards everywhere saying that Mamdani chance of winning 91% if you're voting for Cuomo or some other candidate. Right. I supported a guy named, you know, Whitney Tilson. I'm not a New York resident, but my friend Whitney Rand. Anyways, you don't show up or you think, oh, great, you get excited. So these prediction markets, actually, the polls have. The polls have an influence on the actual voting, I think AI in terms of monitoring, I like the idea. I've always felt that AI could be used for defensive measures as much as offensive measures. Whether or not Peter Thiel has other objectives, that's a little bit superior.

17:26

Do you think? Maybe he does.

18:07

So you're right. It's not AI as a defense mechanism or for compliance. It's the fact that Peter Thiel, who believes in.

18:10

No, democracy, I believe is his.

18:18

Yeah. Feels like democracy is an outdated mode, so. But just in terms of gambling, huge threat to young men. And what people don't know about gambling as an addiction is that it's got the highest suicide rate of any addiction. Because if you have a meth addiction, people notice it and they weigh in. You can spend your kids, college fund, mortgage your house, spend everything, and people have no idea. And oftentimes people feel like it's just too late. And in states where they legalize gambling, bankruptcies skyrocket 35% in that same year. I was just in Vegas. Vegas is dying because why be in Vegas when Vegas is in your pocket? And I'm curious what you think. Because you have sons. I have sons.

18:19

They don't gamble.

19:05

Yeah, but you're a better parent than me, so, yes, yeah, but the question is, speaking theoretically as a parent, I don't think they gamble for young men. Do we infantilize them? Do we have more regulation? Is it a lifelong?

19:07

You know, I think young men do have a higher risk profile. I mean, just between my daughter, it's more comparable my daughter, who's 6, and my son, who's 4. He's so risk. I mean, penis out every moment of the day. And you're always like, wow, that's gonna hurt when you get to the bottom of those stairs on your head. And my daughter is very careful. So it's a really. I hate to say that, cause I don't like the plane to gender tropes, but it's true. It just is

19:21

trope away. We're different and that's okay.

19:51

She happens to be. I was very risk taking when I was a kid. I'm with you, aren't I? Hello. And someone's like, what's your biggest risk? I go that any moment it will be over with Scott, which it never happens. It's like a really exciting series that ends on a cliffhanger every episode. But one of the things that I think about with gambling is my sons don't gamble, which is interesting. And I kind of like gambling better than they do, which is interesting. But I think the fact that you're right, AI should be used in positive ways and we should mitigate the negative ways. But again, a lot of this is controlled by people with self interest that you never understand. And so what are they? And earlier today I did an interview with the cast of the Audacity, which talks about these issues. It's a new Silicon Valley show. And the idea of the manipulation of our information in all manner of way. I think we do not understand where it's about to go. And so who owns it and who's running it. Same thing with media. Where are the interests is gonna be a huge problem going forward.

19:53

But your point is the right one in what you just said. And that is AI should be applied to monitoring and compliance. It should just be an AI that reports to a federal agency that's trying to prevent a tragedy that comments not to Peter Thiel, but keep in mind, I mean, this is a difficult one because I think a lot about young men and between 24 7, porn and gambling and an economy that's basically linked to dopa hits that's trying to evolve a new species of asocial, asexual. I believe that our economy now is essentially tied to evolving this new species of male that is basically a shitty citizen who starts blaming immigrants. Prone to conspiracy theory, prone to misogyny, prone to obesity, depression, anxiety, never develops the skills outside of their house. Males age 20 to 30 are now spending less time outdoors than prison inmates. And unfortunately they're up against this indomitable foe of an AI driven platforms that at the exact right moment will convince you, hey, don't go to class, bet on the jets game or hey, you know, you can get rich. And screenshots of people trading crypto. And why go through the effort? Perseverance, cost showering, resilience, developing a wrap. You know what movement I'm going to go off script here? You know, a movement I hate. I think the worst movement in America right now, besides some of the far right crazy shit, is the incel movement. And involuntarily celibate. And I speak to a lot of young men and some of them identify as being incels. And they say it as a point of pride, like they have found their community and that it's not their fault. And they just come out and say I'm an incel. And they give up. 62% of men under the age of 30 aren't even trying to date. 42% of men 18 to 22 have never asked a woman out in person. And this movement infuriates me because just a heads up, a spoiler alert for 99% of history. 99% of men have been involuntarily celibate. I was involuntarily celibate the first 19 years of my life. I absolutely wanted to be in celibate, but I couldn't find anyone to participate in my program.

21:05

I was so surprised by that.

23:17

I know shockers. Six' two, 140 with bad acne, not a great rep.

23:18

I totally got along, but this is the basis just. Scott, I got a lot.

23:25

You've told me that over and over. The basis of evolution and the basis of mating and civilization is the following women. If we were at the Alanis Morissette concert last night and there was alcohol involved, the majority of the men in this hall would have sex with the majority of the women. The majority of the women in this room would have sex with none of the men. That is the basis of evolutionary progress. Men are exceptionally promiscuous and feel their job is to spread their seed to the four corners of the earth. Women feel their job is to put up a much finer screen and select the smartest, fastest and strongest seed. So what do you know? The majority of Us are ins celibate. And this is what we do. We level up. We get certification, we get a plan. We get a sense of humor. We start making girl friends that teach us how to behave around girls and maybe find we're a decent guy. We start thinking about dress. We develop a sense of humor, a plan, a kindness practice such that over time we can be voluntarily ins celibate. And the notion that somehow this is a movement. Well, welcome to the fucking work week. Level up, bitch. It's been hard for all of us.

23:29

You know what? I feel like there's a book in there. Anyway. Speaking of someone I wish was in celibate. In case anyone's wondering where the Defense Secretary Pete Hegseth stood. Oh my God. Stood on the Paramount Warner deal. We know now at a briefing on Friday, Hegseth, who's a moron called that's just. I mean, it's factual. Called a CNN report on the war in Iran fake news and said the sooner David Ellison takes over the network, the better. Also, Brandon Carr Morin number two, oddly enough, not even as smart as Pete Hegthast, which is an awfully low bar, is threatening networks because he doesn't like their coverage of the war and is calling it fake news. It's astonishing that the head of the FCC says these things. It's actually illegal what he's saying. And he's threatening the broadcast licenses of networks who do not comply with the correct news. Teamsters are also, by the way, urging the DOJ to block the deal unless Paramount agrees to protect jobs and increase US Production. Talk about this because you'd think they'd be on their back foot at this point, but they're doubling down on lack of. Well, just everything terrible. But this was sort of astonishing to hear from him. And then followed by the FCC chairman around a deal where obviously the. The Ellisons licked Trump up and down like it wasn't even. I mean they did. They didn't even pretend this is not what they were doing. They made promise. They're making. They apparently made promises well reported about CNN and what they're gonna do there. Talk a little bit about this and where you him saying the loud part out loud, I guess.

24:40

Well, three, it's not only wrong, but it's stupid because it creates. But it creates legal. It's exhibit A in a case trying to block this to say it's an unfair merger and that it's not based on market dynamics. It's based on government interference which it's not supposed to. I'm not as worried and I mean you're the journalist here. But I am not as worried about suppression of speech because what I see is alternative media, niche media thriving despite these threats. And it only brings oxygen, you know, bulwark and you know, Puck. They'll have their biggest days today being outraged about this on YouTube. So I don't think, I don't think that as much as these folks would like, I still think the courts will hold around First Amendment. But what it indicates in my opinion is something more dangerous and that is we generally decide we have regulated competition and if we have regulation, it applies to everybody and that everybody gets to play by the same rules. And when the president starts deciding, I know how to run a steel company, which microchip companies we should invest in and who's saying the right speech and who isn't. It reflects, I just think, I think we're just going to get, and I've said this before, we're going to get poorer. Our earnings trade at the highest price earning multiple because of systemic laws where you don't get on the wrong list and get the wrong call. I'm not as worried about, I mean it's just so nakedly anti first Amendment. But I think it'll be slapped down in court.

26:36

Yeah, but the tactics they use is they create a problem and they get slapped down in court like they just did with Jerome Powell with box of, you know, prosecutor, box of wine, Jeanine, whatever box of wine lady. Watch Cecily Strong on her perfect. You know, they do the thing, create the damage, cause a chilling effect and then move on when they lose in court. Right. Or they get pushed back and then they're outraged about losing in court and then attack the court. I mean it just goes, it does cause actual damage to people and not just outrage. It's not just I can't believe they said that. I totally believe they said it. I don't find it outrageous. I just find it astonishing that they do it in order to create the kind of crisis that will occupy people until they're slapped back. And by the time they're slapped back, it's too late.

28:02

The tension, the fear is that it creates a chill and people think twice before writing an article about the Trump administration and are more promiscuous writing articles, truth telling about Democrats and Republicans. We start having a chill around speaking openly around Republicans. My sense is that if you look at Kimmel Colbert is that quite frankly, it's only emboldened journalists and institutions to write. And also, I don't know if the chill is working and I think it's giving rise to a new set of media players who can honestly say we're about truth to power and we're unafraid and that there's a market for it.

29:01

Well, why not just remove the broadcast networks from those rules? Why are they.

29:44

I'm saying they shouldn't be applicable.

29:49

They shouldn't be bound by that moron Brandon Karl.

29:50

Agree.

29:53

Who's clearly looking for this job which will be dancing with the Nazis. But anyway,

29:54

it's wrong. I guess the question is we always talk about the difference between being right and being effective. They're wrong in my sense is so far they've been ineffective. I think the best thing to happen to Colbert and Kimmel, the ratings exploded when the FCC threatened them. So my sense is the autoimmune response of Americans who value free speech is kicking in here and it's working really well.

30:01

Perhaps. But at the end of the day, the Ellison's own will own this and then we'll have say over it and we'll quietly do, you know, smother people possibly. I don't even know if they will. Honestly, I don't. I don't care to stick around and find out. But one of the things is that you create a situation where you don't trust your owners. Right? You don't. I mean, when I worked at the Washington Post, I mean it was a different environment for media and everything else, but I completely trusted the Grahams. I didn't feel like they would toss me over under a Bezos thing. And I know he was just there this week talking to some of the reporters and was answering questions which he should. I have no idea what they do and in fact probably opt to go to Mar A Lago over protecting something he bought.

30:24

Look, you're going to forget more about journalism than I'm going to know, so I'm going to defer to you. But what I see happening is the following. They make these ridiculous, onerous, fascist, autocratic statements trying to control the press and trying to put a chill around free speech. I feel like that attempt to chill free speech is backfiring. I also don't have any nostalgia or think that we've talked about this. I don't think the cnn. I think CNN and the Washington Post can go away and it's not going to mean anything. I just don't. I think that these folks, quite frankly many of them, I think Fareed Zakaria starts a podcast and a newsletter and has the same reach with A lower cost of production. I think these incredible journalists go to different places, start alternative media. That quite frankly is maybe more effective. So I think that you're going to see a dispersion of truth to power in journalism. The key is as long as the courts at the end of the day support those people and fall in the light of First Amendment. But I think what happens a lot of times when we talk about this is that journalists and these organizations see themselves as iconic and very precious. What's precious is First Amendment protection to speak truth to power. And what I see is that every person who's laid off from the Washington Post or CNN who has any talent now finds incredible platforms and outlets and subscribers. I just launched on Substack and it's so much fun. You see subscribers and you can make good money. You know, a lot of people who've left big institutions and are doing well now. So I feel like the attempt to chill is like when they hit CNN, it breaks into 100 different alternative niche media companies.

31:16

The only issue with that is covering a war costs money. You have to have a larger thing. And so one of the things, instead of reforming the costs of something like a CNN or whoever, fill in the blank NBC, instead of reforming that economy, they're doing damage to it so it can't revive itself in a way that's cost that those things cost like that kind of thing.

32:58

Fair point.

33:20

You're not going to have a logger go over to Iran and do the correct coverage anyway. We'll see what happens. Okay, we need to take a quick break and when we come back, we'll get to more of the latest headlines.

33:20

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33:38

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Scott, we're back recording live from south by Southwest. So Apple is entering its affordable era. Affordability counts. The company just introduced the MacBook Neo, a laptop priced at $599, roughly half the price of a MacBook Air and powered by an iPhone chip. While some analysts are saying this is a smart way of getting new market share, others online are wondering if the budget Apple laptop is a, quote, recession indicator. Talk about this about Apple, what's happening over there and where it goes as they start to figure out their next leadership group, which has been in there since forever, actually, since its revival back 25, 30 years ago. It's the same executives.

36:05

So I think the strongest luxury brand in the world is not Chanel or Vuitton. I think it's Apple. And essentially Apple says Apple is the most. The perfect luxury brand is one that says you're wealthy, you're part of the creative class, but you're not trying to exhibit your wealth. When you roll around with a Birkin bag. You're saying, I'm rich and I want you to know it, or I have such an incredible sense and passion for this type of design, I'm willing to sacrifice a great deal of resources for it. The iPhone, basically, the iPhone has become so dominant in identifying the billion wealthiest people in the world. There are a billion iPhone iOS contracts and the other 6 billion. When you pull out an Android, it's like sending a date, a request or a Venmo, you're not getting laid. It's sort of. When you have an Android, you're essentially saying to the world, life hasn't really panned out the way I'd hoped. And I should be starch from the gene pool and the pricing people don't recognize. I'll go back to my substack. I'm waiting. Most substacks are 8 bucks a month or 12 bucks a month, 100 bucks a year. We purposely did 20 bucks a month and 200 bucks a year because pricing is a signal. And one of the case studies I love that we talk about in my brand strategy course, the most successful or fastest zero to billion alcohol brand in history was Grey Goose. And I do a taste test in class and everyone thinks, oh yeah, you know all these young douchebags, I can tell the difference. And none of them could tell the difference between Smirnoff, Sky, Absolut and Grey Goose. None of them like 9 out of 10, not even that can tell the difference. But the owners of Grey Goose said, All right, the fifth of vodka, whatever costs about 35 bucks, charge 55. Because think about it, when you walk into a store and you're looking at anything, you immediately sort of want to check out the most expensive thing. Pricing is a really strong signal. And I think that Apple's genius is its self expressive benefit. The strongest self expressive benefits in the world are the country you come from. I'm proud to say I'm from the US as much as head up our ass as we are right now. I still like telling people when I'm overseas and I'm American, it makes me feel good. The second strongest self expressive benefit is where you went to college. If you have two people in a mating environment and the dude went to a good school and doesn't have much else going on, he's like, well at Cornell, that's the second strongest self expressive benefit. The third strongest self expressive benefit is your phone because it's immediately apparent and Apple has really become.

36:58

Do you think this Neo is a mistake?

39:52

I would Always be premium priced. If I were Apple, I'd always be unattainable for 78, 85% of the world's population.

39:55

Really? What do you think is an indicator of that?

40:03

I don't know. More market share. They see a market for the near luxury or they want to expand their market. And by the way, these are some of the smartest marketers in the world. Second most valuable company in the world. So if it's like the strategy team at Apple or Scott Galloway, you go with the strategy team at Apple. But I think this is a luxury brand and I mean keep in mind what Apple's been able to pull off. Margin is Latin for irrational. When you pay a lot of margin for something, it's either because you think it'll make you feel closer to God, it's a monopoly, or it thinks makes you more attractive to potential mates. Margin means irrational. And the irrational margins that Apple has been able to garner. I was on the board a gateway computer, remember then, which I realize is the weakest flex in the world. But our margins were 8%. If we sold a computer for 1000 bucks, it cost us 920 to assemble the thing. Meanwhile, Apple was getting 30 and 40 points of margin because people wanted to. I remember when the seatbelt light goes off, do you grab a Dell computer that says you work for a corporation? Do you grab an Asus, which means you work for a bad corporation or do you pull out you're Apple and say I'm in the creative community, I'm interesting. I think different. Right. And so what you have with Apple, they have pulled off the impossible. The impossible. And that is they have.

40:05

I want you to say why they're doing it then. Okay, you're in that meeting, we're going to sell a $575 computer.

41:34

Just let me finish my last sentence here. Apple has the margins of Ferrari with the production volumes of Toyota. No company has ever pulled that off before. They think they're going to expand, share and clear out a bunch of their competition is why they're doing this.

41:43

And good, bad, you think it's a big.

41:57

I think it works in the short run, I think in the long run. If Chanel came out with a $400 bag, they would sell a shit ton of them. And then over time it erodes their margins and the truly aspirational people start buying more Hermes or what have you. So I think it's a trade off of market share in the short run for what is the core asset. And that is a rational margin as the premier luxury brand and consumer products.

42:00

And very briefly, how are you feeling about their stock right now as they transition away from Tim Cook?

42:26

Well, I've been selling down my Apple stock because I think Tim Cook is a duplicative motherfucker who's benefited from the American society and has not been, but is not giving back.

42:32

Okay, but that's why you did.

42:42

I would hold on. Since you're investing, I would hold on to Apple stock. I think Apple is, I think these are incredible companies. It hurts to sell the stock. I'm just trying to walk, trying to walk the walk and virtue signal.

42:47

So resist and unsubscribe.

43:02

You know it.

43:04

Anyway, we need to take a quick break and we come back. We'll get to wins and fails.

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Please consult a qualified tax professional. It's crunch time at work and you need to bring wings to your workday. Visit redbull.com gettingitdone and answer a couple questions about your work style to get a Spotify customized playlist tuned to your productivity. Plus score a can of Red Bull on us while you go from to do to done. And remember, Red Bull gives you wings. Supplies are limited. Terms apply. Visit the website for more information. Scott we're back recording live from south by Southwest. All right, we're gonna do one win and one fail each. I think I am going to start. I think the win this week for me was the impression I don't know the guy's name of Tucker Carlson on SNL last night. If you watched it, it was fucking superb. And oddly enough, in some cases, in some of the things he's Tucker Carlson's a terrible person, I'm not gonna agree with him. But I thought it was a beautiful rendition of a lot of the these sort of noisy right wing people who are parodies of themselves. And I thought it just got to the heart of the problem with him that I thought was just beautiful and it was highly entertaining. It made me laugh. And by the way, Harry Styles was terrific. And I love Harry Styles so much. I don't know why, but I do. I find him incredibly appealing. The negative this week was Elon Musk saying Grok didn't quite work as planned at the same time and everybody leaving. Granted, even though it has these incredible valuations, nine of the 11 original founders have left. Obviously you have Mecca Hitler. You have all manner of things that it's doing. You have non consensual sexual images, child pornography. It's not doing great as an AI product and again, a low bar. But I thought it was interesting that he admitted what a mess it was. It still will not have any effect on the valuation because anything Elon does they will invest in no matter what. But I thought it was a moment where he sort of admitted what a disaster Grok is. And I Think you're gonna see more of that going forward. And at the same time, in continuing disasters wrought by Elon Musk, the two. Do yourself a favor and watch the testimonies, the interviews on video of two of the Doge bros. They're worse than you thought. Like in. I couldn't believe they were worse than you thought. But these were. Speaking of incels, like an incel mode. I don't know if they're incels or not, but they should be. Any women thinking of dating them should watch these. I thought they were just sort of this banality of evil kind of thing where you just watch these ignorant, stupid young men telling you why they were cutting and essentially in many cases murdering people across the globe. And by using ChatGPT and search to decide and make decisions. And someone. I couldn't believe this kid asked. I mean, maybe I could. I kept thinking, who raised. I want to find this parent and go have a discussion with them. But one of the things they said is, why did you cut it? And he's like, do you think you're qualified to make the decision on something that was very complex around expertise and everything else? And he said, yeah, I'm qualified. And he goes, why? And he goes, well, you don't have to read all the books to know things. I was like, actually, you need to read all the books to know things. And if you do yourself any favor, it was such a failure of these obviously probably very good coders in technology that had talents in a certain area being unleashed upon things that took a lot more. And I don't think you can't cut government programs. I'm not one of those people. But the fact that they made these decisions in such a haphazard, ridiculous, stupid way is something. It's a real sight to see. And one of the things. Many years ago I found a column I did that I wrote about the need for ethics, history and philosophy courses with technology people, and vice versa, by the way, liberal studies people should understand AI and everything else. And one of the things that I thought. One of the better things I think I did as a parent and Megan, my ex wife, is here too, is our son. Alex, for example, is in technology, but he takes. He's really interested in history. He's got a wider range of interests around politics and everything else. And that's not our fault, but I think we encouraged him to have a wider range of. Louis could learn more about AI. Our older son could probably learn more about AI than he does. But it was really a moment where I thought, what are we making? What kind of children are we making here that they think this is right? And so I thought it was a real. So it's an eye opener to watch these testimonies, and they sit there with these very fresh young faces, and it was so disturbing to me on every level. So I encourage you to watch it and be disturbed yourself. Go ahead, win and fail.

45:10

I like that. My fail is that the Save act, the one that's trying to. It looks like it's going to be dead on arrival, but the act would force people to show up with either a passport or a birth certificate. Only 50% of Americans have a passport. They cost $160 to get. A lot of people have to change their birth certificate because they get married or they hyphenate their name. This is just such a naked attempt to suppress voter turnout. It's just. It's difficult. And I do. It does feel like it's dead on arrival, but it's difficult to imagine anything more anti American.

50:14

Yeah. They're doing everything to pass it.

50:45

Yeah. I'm hoping.

50:47

Getting your senator, John Cornyn, who is just literally the worst. I mean, Ken Paxton's already sort of criminalicious criminal adjacent, but this guy used to have values and now has anything

50:48

to be in office and to the other side. My win is. We interviewed State Representative James Tallarico yesterday, and he had. He had the most moving description of. And he wasn't framing it this way of masculinity. And he said that his father every weekend would mow his lawn, and then without asking, without talking about it, would go next door and mow their lawn. And he said that was masculinity. I thought that was just so perfect. You know, I struggle with trying to identify it through a series of adjectives. And it just. It just. Without asking, mowing your neighbor's lawn. I just love that. That's my mom.

51:02

I can mow my lawn. I have several lawns.

51:50

I'm not gonna go there.

51:52

I did watch this.

52:00

That is just too easy and too wrong. I'm just. Season two Swedish US Women's hockey.

52:01

All right, I got to meet him. He is the baby G. Jesus is very.

52:09

Oh, my gosh.

52:14

Yeah, I really am.

52:15

I was planning to ask all these zingers like, dude, we follow the same people on Instagram. You'll get it. He's supposedly.

52:16

Look it up.

52:23

Supposedly follows all these hot women on Instagram. I wanted to ask him if he dates, and I just couldn't do anything. He's so Earnest.

52:24

That's right.

52:32

He's so real and so earnest. And you're just looking. I'm like, literally, like, take my money.

52:32

Yeah, yeah, yeah. Anyway, it's a really. It's going to be an interesting race. Anyway. Okay, we need to take a quick break and when we come back, we'll take some questions from the audience.

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Hard seltzer with flavors, 8% alcohol by volume. White Claw Seltzer works Chicago, Illinois. When you think about wealth inequality in America, there's probably one man whose name comes to mind. And yes, he did compare America's billionaire era to the Gilded Age.

53:50

We're living in a moment where the top 1% owns more wealth than the bottom 93%. Where one man, Elon Musk, owns more

54:08

wealth than the bottom 53% of American households.

54:18

Where while 60% of our people are

54:22

living paycheck to paycheck, the billionaire class has seen its wealth increase by a trillion and a half dollars since Trump was elected.

54:25

How's that they doing?

54:36

Pretty well. I talked to Senator Bernie Sanders about his latest bill for a wealth tax and his call for a moratorium on AI data centers. Plus how much he uses AI himself today explained every weekday and now on Saturdays, too.

54:37

All right, Scott, we're back recording live from south by Southwest. All right, we're ready to take some questions from the audience. We only have time for just a few, so keep them short that we can answer quickly and easy for Scott, please. Hey, guys. Melissa Richards person and I'm from Louisville, Kentucky.

54:59

Wow.

55:20

My dad is turning 103 months. And the reason I offer that. Thank you. Is that he was A civil engineer and he was engineering things. Built to last. Got it. And I think about us, have we lost the ability to think long term as opposed to short term? That's a great question. That's a great question, Scott.

55:20

Well technically we're focused on shareholder value and the markets reverse engineer earnings way out in the future. So technically these big capex investments that are driving the economy you would argue are actually long term investments. So I think the financial markets would say no, we are actually still the second largest manufacturer in the world. I think people have a fondness and a nostalgia for building stuff but the reality is 80% of Americans think we should have more manufacturing but only 20% of Americans want to work in manufacturing. You can't bring your dog to the factory floor. So I would argue that Americans still do have more risk capital to invest long term. But quite frankly, just like we were talking about cnn, Washington Post, we have this romanticism for manufacturing but very few young people other than Carousel when you ask them what they want to do, say I want to go into manufacturing. So I still think we're thinking long term and make great things. I think our products are still some of the best in the world.

55:42

I do think we go through cycles of that and I think we're probably headed into a more long I think especially if you anyone who's a young person, they're moving away from a lot of this quick, fast. I've noticed just a little more community. There's a lot more of a need and a desperation for community, connection, long termness. I picked it up and that's just anecdotal. Next one.

56:44

Hey Kara and Scott, thanks for taking questions. Eve Grant, Scott, you talked about the attempt to chill. Free speech is backfiring. Alternative media will fill the gap as long as courts protect them. I like your optimism.

57:06

What about the Gawker Gawker media lawsuit

57:17

that demonstrated the courts didn't protect money wins. It's a fair point. I'll turn to my journalist.

57:20

I think you're right. I am much more concerned. I think they can chill people. I worry myself. You think about it, I don't do it. I of course immediately run right into the breach. But I do think it does create a situation when and I always like to see the enemy, right like back in the day when everyone was like how dare these anti gay people. I'm like I can see them. It's the ones I can't see I'm worried about. And so I like to I see what their move is and so it's an easier person to fight when you see who they are and what they're up to. And what they're up to is very typical of autocracies, is try to slowly bring it down. I do think there's a lash back because we do have so many tools available to us and power has shifted from the typical broadcast networks to people like us, to others. And so it does tend to unintended consequences of being such incredible morons is what's going to happen. And again, I think Brennan Carr is an embarrassment and it will end badly for him eventually. Just cause you don't know the end. Just because you don't know the end of the story doesn't mean that's how it's going to end. That's how I look at things. All right, thank you. All right, that's all the time we have for today. We really appreciate south by Southwest and we do appreciate all our fans. Thanks for listening to Pivot and be sure to like and subscribe to our YouTube channel because we have a face for radio. We'll be back later this week. Thank you so much. South by Southwest.

57:27

Today's show was produced by Lara Naiman Zoe Marcus Taylor Griffin with ground support from Trish Harnato and the Vox Media experiential team. Ranier Todd entered into this episode. Rich Tibley edited the video. Thanks also to Drew Bros Misleverio on Dan Shalon Nishad Khoras, Vox Media's executive producer podcast. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Vivid from New York magazine and Vox Media. You can subscribe to the magazine nymac.com pod we'll be back later this week for another breakdown of all things tech and business. Thank you to the great state of Texas. Thank you.

59:00

Thank you.

59:33

Thanks again to Odoo for supporting this show. Odoo wants to be your ultimate all in one, fully integrated platform to handle everything. Seriously, everything. Inventory, CRM, accounting, HR and much more. No more shopping around or settling for expensive services that can only handle a fraction of your business. Thousands of businesses have made the switch, so why not you try Odoo for free at odoo. Com. That's O D o o.

59:44