Loading summary
Transcript135 lines
- [00:01]
Scott Galloway
Recommendations can be great. Maybe someone recommended this podcast and here you are. But home projects are a little different. If the podcast isn't your thing, you might lose a few minutes from your day. But if you hire your cousin's neighbor to mount your tv, you might end up with a lopsided screen and wall damage. I know a guy isn't a good strategy for your home. That's why thumbtack works so well. It matches you with top rated local pros with photos, reviews and credentials all in one convenient place. For your next home project, try thumbtack. Hire the right pro today. Support for the show comes from Amazon. There are the things you can plan for A first birthday party, a movie marathon, a renter friendly bathroom reno. And then there are the things you can never plan for. A surprise rainstorm, a Blu Ray player calling it quits. Stick on tiles that looked way better on the package. For all things planned and unplanned, Amazon has you covered. You'll find low prices on everyday essentials and last minute lifesavers. Shop Amazon and save on essentials. Save the everyday. Where is Pteradelpha?
- [01:23]
Ed
A minor.
- [01:24]
Scott Galloway
Don't miss the return of Marvel Television's Daredevil Born Again. So what's next? I feel liberated. Take this city back over medicated in an all new season now streaming only on Disney plus. They're hunting us. It's time we started hunting them. I can work with them. This should be tons of fun. Marvel Television's Daredevil Born Again now streaming only on Disney Plus. Today's number, $42 million. That's how much the Met Gala raised for the costume Institute last week. A new record. Ed, this is a true story. As you know, I was invited to the Met Gala and decline. But I was working on my costume and it came down to three finalists. The first was I was going to go in my underpants as a premature ejaculator and just say I came in my underwear. Or two. Two. I forget what the second one was. F. Oh God. Claire, help me out.
- [02:34]
Ed
What I don't understand. I don't understand why you don't pick one. Like you should pick one, joke and commit.
- [02:39]
Scott Galloway
Okay, Mr. Fucking Easter Parade. Life of the party. What a funny guy. Said no one ever. Ed Elson. Yeah, yeah, Ed. You might be tall, you might be handsome, you might be inordinarily rich because you lucked out at a young age. But no, you're not known as that hoot and hollering. Ed Elson. Yeah, no, I'm sorry, Ed.
- [03:00]
Ed
I Never claimed that.
- [03:01]
Scott Galloway
I own the humor part of this. Who won most comical in the ninth grade? Ed. Was it Ed Elson? No, I don't think so. Who won? Steve Martin in high school. That's right, Steve Martin.
- [03:11]
Ed
I have to give you some news. My senior superlative in high school was Klaus Clown. Gotta drive back. I'm not the hooter in hobbies.
- [03:19]
Scott Galloway
Are you serious?
- [03:20]
Ed
Yeah, I'm serious.
- [03:21]
Scott Galloway
I'm literally speechless. In your senior class, you were a class clown. What happened?
- [03:27]
Ed
What happened to me? I know exactly what happened. You ground me down. Something happened.
- [03:34]
Scott Galloway
I mean, okay, for me it's divorce, bankruptcy, loss of my mother. The joy has been driven from my soul. What is your excuse?
- [03:42]
Ed
Yeah. No, I don't have an excuse.
- [03:44]
Scott Galloway
You were really most comical your senior year in high school. Yeah.
- [03:48]
Ed
Class clown. I don't know if it means most comical, but that's what I got.
- [03:51]
Scott Galloway
Wow.
- [03:52]
Ed
How was your journey trip?
- [03:54]
Scott Galloway
It's amazing. I would go to. Every year I go to Hamburg. I speak at online marketing. Rock stars. You couldn't be nicer. People are great again. See above beer and sausage. People are fun. They're so literal. You have to show ID to get into your hotel. And I got picked up in some. All these crazy German cars and people are friendly and beer and did I mention the beer? Oh, God, I just love it there. And I go running around the lake, wherever it is. In Hamburg they have this lake. And I thought I was such a fucking baller running seven miles. And then someone reminded me it's the little lake and it's three miles. I thought I was running seven miles in record time, so that's the only downside.
- [04:34]
Ed
Three miles is still pretty good. I hate running. It is so boring.
- [04:38]
Scott Galloway
There is a high you get from running, though.
- [04:39]
Ed
Yeah, I know. I need to. You clearly need to just keep on doing it and then achieve that high and then you're good. I've never experienced it. I try to like it and I just can't do it.
- [04:50]
Scott Galloway
How tall are you, Ed?
- [04:51]
Ed
Six. Three.
- [04:51]
Scott Galloway
You're six three. And how much do you weigh?
- [04:53]
Ed
185.
- [04:54]
Scott Galloway
Almost exactly the same height and weight. Um.
- [05:00]
Ed
That's good. That's good. The dog's in shape, so I'm. I. I'm happy to hear that.
- [05:04]
Scott Galloway
Yeah. And what do you do? How. How often do you. You work out every morning?
- [05:07]
Ed
I try to.
- [05:07]
Scott Galloway
What is your program?
- [05:09]
Ed
Weights. And then try to run once a week.
- [05:12]
Scott Galloway
That's funny because you're not that muscular.
- [05:15]
Ed
I know. I have the same problem as you
- [05:17]
Scott Galloway
when I see you with your shirt off, it's kind of a little, little pasty, a little soft. You kind of look like the Princeton version of that alien from Close Encounters of the Third kind in high school. That was good. Should we get to the news? I can't do any better than that.
- [05:34]
Ed
Let's do it. That's pretty good. We'll start. By the way, I'll just note that we are three weeks out from the Prof. G Markets tour which is kicking off with a sold out show in San Francisco on May 27th. But we have tickets still available in LA, Miami, Chicago, and we are finishing things off in New York City with special guest Anthony Scaramucci. The mooch, the man, the myth, the legend. So if you want to come see him anti Scott and see me, go visit profmarkets tour.com to get your tickets. Now. I personally can't wait. More guests to come, but the mooch, I mean, no better guest for New York. That is, that is ideal.
- [06:13]
Scott Galloway
Yeah. So we're, we're working on a really great guest in Los Angeles that rhymes with. But I don't want to tease it until it's confirmed. And also by the time this show airs, New York will be sold out. I think in New York only had. We have like a 1200 seat auditorium there and I think there were like 40 tickets left. Um, so folks, we will sell out. So please buy your tickets now. And it's really shaping up nicely. We got some really good, some good and controversial guests. I'm super excited.
- [06:44]
Ed
It's gonna be very fun. Let's get into our stories. We've got a lot to talk about.
- [06:49]
Scott Galloway
Now is the time to buy. I hope you have plenty of the wherewithal.
- [06:56]
Ed
The conversation around AI and jobs is evolving. It's no longer just about AI replacing individual workers. More companies are starting to suggest that it could eliminate layers of management as well. Coinbase CEO Brian Armstrong announced plans to cut roughly 14% of staff last week, citing both market volatility and the speed at which AI is reshaping the business. PayPal made a similar move, saying it plans to reduce its workforce by 20% over the next two to three years because of AI. And perhaps the clearest expression of this new thinking came from Jack Dorsey, who said, quote, most companies using AI today are giving everyone a co pilot, which makes the existing structure works slightly better without changing it. We're after something different. A company built as an intelligence with no need for a permanent middle management layer. So, Scott, there's kind of a Lot to this story here. Obviously we've got the layoffs. Coinbase laying off 14% of the staff. That's 700 employees. PayPal saying they're going to lay off a fifth. We've had other announcements of layoffs. Freshworks laid off 11% of the staff block, which is Jack Dorsey's company. They laid off 40% of the staff. That was 4,000 employees. Employees. They did that before we saw these layoffs. Now there are questions over why are these layoffs actually happening? Is it AI washing as we've discussed? Is it actually the AI? Are they actually enabling their AI? But I think what is interesting is that we are now seeing a new thesis in the AI economy, which is that AI isn't just going to replace workers, but it's going to replace managers. That is what Brian Armstrong said in his letter, which we can get into to employees. He wants to cut out middle management. And that is exactly what Dorsey, Jack Dorsey has described too. Let's just listen to a short clip of Jack Dorsey explaining this and then let's get your reactions.
- [08:49]
Scott Galloway
One measurement of how far along we are would be the depth from me to any other individual in the company. And I would say our max depth right now is probably five folks between me and anyone in the company. I would want to get that down to 2 to 3 this year. And in the most ideal case, there is no layer. Everyone in the company reports to me.
- [09:18]
Ed
That is the vision with AI. No layers, no middle management. Everything just goes directly to the CEO, assisted and enabled by AI. Scott, what do you make of this trend? Do you think it's going to happen?
- [09:30]
Scott Galloway
Well, keep in mind, Jack Dorsey is the person of put out the following tweet, Bitcoin will save humanity. That's an actual tweet. And he believes it. He believed it. Look, we always have these fever dreams of flattening the organization. And AI will flatten organizations is in my view, executive speak for we think we can fire the people who remember why this place works. Everyone on a regular basis romanticizes deleting middle management until they realized middle management was mostly absorbing the chaos from their fucking incompetent leadership. The only way an organization scales is if you have reporting relationships and metrics and cultural norms that are enforced by people with some maturity and seasoning. And I hate to to tie this, folks. This is management. As a company grows and there's more and more layers, is it a healthy thing to take out people? And in the 1980s. This started in the 1980s with a book called Re Engineering and basically these guys wrote a book saying America, because of its monopoly power and manufacturing, had grown just fat and happy and never went through the culling of the organization. And what they did was Basically every Fortune 500 company laid off anyone with a VP in their title and they found out that they really didn't miss them and they juiced their earnings. My father basically got re engineered out of work by the time he was 53 and kind of never recovered. And that created additional strain on our relationship and he never really found the confidence to apologize for abandoning me. But anyways, most comical in high school, dealing with the pain, Ed dealing with the pain. I couldn't cry, so I made others laugh. But anyways, exactly this. There's always a fever dream of flattening the organization. Now there's something to the notion that everyone does their work. So let me just use Prof. G. I do work, you do work. Even the person who's considered who manages the company, Kathryn Dillon, she does a lot of actual work and it makes her a better manager. I'm all for the player coach, but people who are growing their careers, especially young people, need mentorship. They need reviews, they need feedback. People value compensation. Economic compensation is great. When I was in Morgan Stanley, I went in for my review once a year and it was a number. No feedback not. This is where you're good, this is where you're bad. This is where you need to improve. We're giving you 60% of your salary bonus. Let's go get drinks. That was the feedback. And I find that thoughtful feedback. And I've gotten better at this since I got older. When someone does something especially strong or whether I think they need to improve, I go memo to the file. And then in the review we talk about it. Young people, not even young people, everyone really appreciates feedback. And the idea that when we review you and Claire and bring you in and just have the AI review you and then decide your bonus. What horseshit. I mean the funniest thing about this is this is billionaires describing this as empowerment while simultaneously installing surveillance software and demanding 24,7 output from the three remaining employees. A lot of companies going through this, my prediction are about to discover that institutional memory was not inefficiency, it was the fucking company. So the connective tissue oftentimes is management. Does that mean there aren't cases of where it becomes fat, inefficient and the management becomes to actually add negative value? Yes. In my opinion the greatest example of this, hands down, is academia. What you have in academia is tenured faculty become unproductive about the time they get tenure and you can't fire them. Universities actually have to put millions of dollars aside in an escrow account because they acknowledge this person's about to become very unproductive. The problem is because we have been able to really effectively sequester supply or artificially constrained supply, we've been able to raise tuition faster than inflation. And universities have become so fat, MIT has 16 people working at MIT for every one who actually teaches. But in the private sector, I mean, this is. There's a bit of a healthy cycle around going through and trying to flatten the organization, make sure everyone's doing their job. There's more transparency, there's less bureaucracy, there's more speed or reducing time to market. I get it. But somehow the notion that AI, you're going to work for an AI and then it's going to reduce the management or leadership or guidance or mentoring or giving people their compensation or solving problems in hr. So anyways, my point is this is yet again another example of these guys who overhired who are looking for a way to juice their valuation and thinking big thoughts about AI. Can AI supplement management? I'm sure it can, but I actually think this is one place where AI is absolutely not going to live up to the hype.
- [14:55]
Ed
So that's a really interesting point and I agree. And we should recognize that the stock market hit another record high last week and the reason that it hit another record high is because of AI. It's because of these chip stocks which are absolutely ripping right now. AMD, Samsung, Intel, Micron, Seagate, SanDisk, which as we've discussed is up 4,000% in the past year. And you think about the supply chain going downstream, why do we need these chips and why do we need this memory infrastructure? We need it for the data centers. Need the data centers to power the AI. Why do we need the AI? And it appears that increasingly among large tech companies, large, generally speaking, white collar organizations, we're seeing that there is a goal in mind, which is for AI to replace management, to replace all middle management, to get rid of all of the grunt work that you have to do in terms of managing people and trim all of that fat. And I just want to go back to Brian Armstrong's letter because he really articulated his vision, I think quite well. And I think that it is indicative of where a lot of these CEOs are trying to take their businesses. So in terms of why he did it, what he's trying to achieve. He said, quote, we are not just reducing headcount and cutting costs. We're fundamentally changing how we operate. Rebuilding Coinbase as an intelligence with humans around the edge, aligning it. So in other words, the whole thing is AI and the humans are just there to kind of like shepherd the AI into the right direction. He says we want fewer layers, faster decisions, no pure managers, AI native pods. We be concentrating around AI native talent who can manage fleets of agents to drive outsized impact. We will also have one person teams with engineers, designers and product managers all in one role. And this idea of the one person team is also very popular right now. I've heard Daria Ahmade talk about it. Sam Altman is talking about it. Sam Altman is very obsessed with the idea of a one person, billion dollar company. Can one person operate a billion dollar startup? Is that possible? And the idea is that you'll have one person managing the agents who will do everything for you. The AI is going to completely transform the business. You're saying that's probably not going to happen. And I think I agree with you. The idea of you walk into your performance review, which is a big part of what it means to be in an organization and be at a company, and an AI shows up and evaluates you on all these different metrics and you disagree with the AI for various reasons and you try to prompt it and either it vociferously agrees with you because it's just a sycophantic technology, or it doesn't make any sense, or it has the wrong data, et cetera, that to me is just never going to happen. But it seems to be increasingly the basis on which this entire stock market is kind of rallying behind, and I'm just not sure it's going to work. I can get behind the idea of AI doing menial tasks, but the idea of managing people, the idea that an AI would be the core of a business and the humans are around it, which is becoming very popular. I'm just not. I'm just not sure about it. And I wonder if it does mean that we're seeing too much hype here.
- [18:09]
Scott Galloway
My last year before I sold the company at L2, I took someone into a conference room and I said, it's obvious to me you have a substance abroad problem. What's going on? And within 10 minutes I found out this person had tried to take their life twice in the last three months. Are you supposed to go to fucking Claude for that? I mean, and AI takes you to the average of everything that's been out there. You think Claude's going to come up with breakthrough products that are just so fucking crazy they end up being crazy genius. We're mammals. And the other thing this indicates is that these guys are so nihilist and so void of any real fucking emotion. I get the notion of wanting to be more profitable with fewer people. I'm in a services company. We're in a services company. The expenses go home in the elevator every night or go home to Brooklyn park or leave their basement. Whatever it is you guys do. I have no idea. I heard we have an office in Brooklyn. I'm never coming. Anyways, I heard there's a cardboard cut out of me there which makes me me happy.
- [19:09]
Ed
We go to the cutout for our reviews.
- [19:12]
Scott Galloway
Anyways, I get it. We're about to launch our eighth podcast and I've challenged the team. We're not going to have any incremental hires. Use AI and technology to figure out how we all become more productive and launch another podcast. Fine, I get it. But the notion, the fever dream of no one managing you in one person teams. When I was in Hamburg, as is always the case when I'm alone, I got upgraded to this beautiful room with a deck and it was a spectacular sunset and I'm overlooking the lake and it's as if it didn't happen because no one is with me to share just doesn't matter. There's nothing. And the idea that you're going to find purpose and motivation and work without sharing it with a team, I mean, you're building something. You're building a business within a business with profit and markets and it's fun to build it with Claire. And if you were just in your apartment in Brooklyn building a nice little business called Profit and Markets and you didn't have fans and you weren't going on a live tour and I wasn't giving you a hard time and you weren't high fiving Claire virtually and in person and getting together at all hands and at some point reviewing people and giving them their bonuses. It's like you've literally sucked the soul and the humanity around what it means to work. And that is all right. Yeah, we do it for economic prosperity, sure, we do it to create shareholder value. But the whole. I think the biggest part or the shooting match of work is you have the opportunity to build something with someone else. It all comes back to a very basic thing. I think the most rewarding thing in life is relationships and the things that fuse. Relationships are building things Together you have experiences. Together, you achieve things. Together, maybe you raise kids that aren't horrible. Together you build a business. The most rewarding businesses I've had, hands down, I have a core set of technically co founders and we build something together. So the idea, their fever dream of I want to. They all want a singularity where one of them controls everything and gets 100% of all revenue and all profits by distilling all economic value to no human but them. They're the one. And there is a certain nihilism in it all. And that is there is something to be said of. And there's a balance here in my companies. I'm doing some virtue signaling right now. I've always said there should be two or three people. I've always had small companies, right? They started zero. Once we have someone in HR or cfo, I either step, step down from the CEO role, become the chairman because I don't have those skills to scale a company and I don't want to deal with that stuff. But until then, I've always said we should have two or three people that are one or two bad decisions away from living in their car. They're not, you know, they're, they have bad judgment, they do stupid shit all the time. They're not what I'd call there's no way they're leaving us for Google, let me put it that way. A little bit down on their luck maybe. And guess what? The business can be a great means of a little bit of social good. And also the notion, this is basically the notion that part of an organization, if you think of stakeholders, and I didn't get this, I always thought my goal was to pay people less than market and figure out other tricks of the trade to get them to stay and retain them. And then what you realize as you get older is that what is more rewarding is to build a profitable company and slightly overpay people. And if there's some fat in the organization and if there's a few people who quite frankly are not going to get a job anywhere else but work hard, are good people. And maybe they're not amazing, okay, that's okay too. And in some countries, the objective of a lot of the owners is to increase employment. Now you have to balance that with making sure the organization can survive and has profitability. But this is again this singular messiah complex that is nothing. There's only one stakeholder and it's shareholders. And I can figure out technology to replace people and we can all work singularly and then eventually the AI will take out those singular teams and replace them and then there will just be one. It'll be Jack Dorsey and Elon Musk, who each own 49% of the world and do a lot of ketamine. And if they're good enough, they will provide UBI for all of us such that we don't rise up and kill them. I'm not a fan, Ed. I'm not a fan of this whole line of thinking. I think it's bullshit and I think it's unhealthy and I think it's nihilistic and it's creepy.
- [24:08]
Ed
The extent to which they are glorifying this thing. They are very excited about this notion of the one person, the dream, if they can do that. And to your point, it's like I don't think the, the one person, one billion billion dollar company is going to happen and I don't think that's not going to happen because it can't happen. I think it won't happen because people don't want it to happen. Like you don't want to create this billion dollar company and then you didn't share it with anyone. You're going to celebrate your success with your AI agents and Claude and ChatGPT like it's just a depressing. It goes back to that crazy quote that we saw from Sam Altman where he said that AI consumes less energy than. Than and it's like you've got the entire system wrong. You don't understand what the point of any of this is. And to go back to your point about like we're heading towards a place where Elon Musk owns half of world gdp. I mean, I would just point out John D. Rockefeller was the richest American in history. Everyone agrees that he's supposed to be the guy, the richest guy ever. He owned about his net worth was about 1 1/2% of US GDP. If the SpaceX IPO goes to plan, Elon is going to be worth closer to three and a half percent of gdp. So he'll be more than double as rich as the richest American ever. So Elon is now the richest American in history and by a huge, huge margin. And it is getting to a point where it is quite scary. And it is downstream of this glorification of how much value can we accrete into the hands of a smaller and smaller set of people? And they literally glorifying let's do a it into one person's hands. One person's going to create all of this it's just strange. It's a strange thing to be so excited about. We'll be right back after the break. And by the way, we are heading out on tour at the end of the month, so if you want to get a ticket to a show near you, head to profgymarketstor.com.
- [26:13]
Scott Galloway
Support for the show comes from Deleteme. Deleteme makes it easy, quick and safe to remove your personal data online. At a time when surveillance and data breaches are common enough to make everyone vulnerable, digital privacy isn't just a concern for those with a high profile. The truth is that even private citizens are at risk and we should all be thinking about how to keep our personal data safe as well as our families. The experts at Deleteme can do the heavy lifting to protect your online privacy. They can do the tedious work of hunting down your personal information on data brokers and search sites that look for people and meticulously work to remove it. Our producer Jennifer tried Delete Me Jennifer, this is personal experience. I've really enjoyed Delete Me. I think what stood out is the ongoing support. I still get regular reports showing where my data is showing up and they handle everything. I don't even have to think about it. Take control of your data and keep your private life private by signing up for Deleteme now at a special discount for our listeners. Get 20% off your Delete Me plan when you go to JoinDeleteMe.com propg and use promo code propg at checkout. The only way to get 20% off is to go to JoinDeleteMe.com Propg and enter code propg at checkout. That's JoinDeleteMe.com propg CodeProfg. Support for the show comes from Indeed when the pressure's on and you need to hire the right person for the job. Indeed Sponsored Jobs has got your back and matches you with quality candidates fast, so you don't need to spend tons of time searching for that elusive new talent. According to their data, Sponsored Job posts directly on indeed are 95% more likely to report a hire than non sponsored jobs. Join this 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. Spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results when you need the right person to cut through the chaos. This is a job for Indeed Sponsored Jobs and listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves@ Indeed.com podcast just go to Indeed.com podcast right now and support our show by saying you heard about Indeed on this podcast podcast. That's indeed.com podcast. Terms and conditions apply. Need the ride? Hire fast then this is a job for Indeed. Sponsored Jobs.
- [28:37]
Ed
Support for this show comes from Vanta if you run a business, you don't need us to tell you that risk and regulation are rising. More and more customers expect clear proof of security before they'll commit. Building that trust is essential to closing deals, but it can also be costly, confusing and time consuming. Vanta says they can help. Vanta automates your compliance process to bring compliance, risk and customer Trust together on one AI powered platform. So whether you're prepping for a SoC2 or running an enterprise GRC program, Vanta keeps you secure and keeps your deals moving. And with continuous monitoring, Vanta helps with real time reporting and security reviews you can share instantly. Instead of searching through audits and spreadsheets, you get a system working quietly in the background, keeping you compliant, reducing risk and helping your business grow faster. With confidence, you can get started at vanta.com markets that's V A N T A dot com markets vanta.com markets foreign. We're back with Profshi Markets. The wealth tax debate is escalating and it is increasingly becoming a mainstream political issue. Billionaire investor and Citadel CEO Ken Griffin is now publicly feuding with New York City Mayor Zoran Mamdani over a proposed pied a terre tax. Meanwhile, Governor Hochul recently unveiled a 260 billion doll budget deal that includes a new tax on multimillion dollar second homes in New York City and in California. A proposed wealth tax on billionaires has officially qualified for the November ballot after supporters gathered more than one and a half million signatures. That was well above the 875,000 signatures that they needed to qualify for the ballot. So now voters in California will weigh in on whether or not states should tax wealth. So Scott, we have been talking about this for a while. I think we've been having quite nuanced conversations on the wealth tax debate. I think our perspective is the right one, which is that you do need to figure out how to redistribute the wealth, but this probably isn't the best way to do it. There are other alternatives, but now it is becoming a mainstream political issue. It's starting to sort of dominate the cultural conversation. And then we saw this proposal from Mamdani where he wants to tax Pierre Tez I. E. Second homes in New York City that are worth more than $5 million, whose owners don't live in the city full time, which I think is actually a great idea. And then he puts out this clip that announces that, and it's a little controversial. We hear the response from Ken Griffin. Let's just listen to the clip as well as Ken Griffin's response, and then let's get your reaction.
- [31:38]
Scott Galloway
I'm thrilled to announce we've secured a pied a tear tax, the first in New York's history. This is an annual fee on luxury properties worth more than $5 million whose
- [31:47]
Ed
owners do not live full time in the city.
- [31:49]
Scott Galloway
Like for this penthouse, which hedge fund CEO Ken Griffin bought for $238 million.
- [31:55]
Ed
What really upset me about the video was the fact that he put me in harm's way. You know, he seems to have forgotten that the CEO of another American company was assassinated just blocks from where I live in New York. And to put any citizen in harm's way is just inappropriate for one of our political leaders.
- [32:14]
Scott Galloway
I have a lot of thoughts on this. And by the way, if you're new to the show, just let me clue you in on the major theme of the show. And that is this is an opportunity for Scott and Ed to talk about what?
- [32:23]
Ed
Money?
- [32:24]
Scott Galloway
No, Scott.
- [32:26]
Ed
Anyways, I forgot. How could I forget?
- [32:29]
Scott Galloway
How could you forget? All right, so let's bring this back to May. I did the math, math with this tax. This tax, if it goes through because I am a Florida resident and because I split time between London and Florida and don't spend that much time anymore in New York. But if this tax goes through because I qualify, it's a pied a terre. It will cost me $100,000 a year. In addition to the mor. I don't have a mortgage on it. But in addition to the taxes, HOA fees, all the current, another an incremental $100,000 in carried costs. It's a form of a wealth tax, if you think about it. Because if my place worth 10 million costs another $100,000 a year, say a cap rate or return of 6 or 7%, that means kind of overnight, technically, the place goes being worth from 10 million to 8.5, right? So that's real cabbage. Having said that, having said that, I am in favor of this tax, and that is. Look, you can always talk about how a government needs to cut costs. I've read the articles that it takes 12 times. It costs 12 times more per mile to build a subway in New York ver Paris. I get it. I don't doubt there's fat to be cut and I trust they're going to try to do that. I'm not in a position, I don't have the domain expertise to start talking about the cuts that the mayor should make.
- [33:49]
Ed
But we think that they should be efficient with their spending as everyone does. I mean the idea when we get caricatured it's like, oh, you just want government bloat. Obviously not obviously we want spending to be efficient.
- [33:59]
Scott Galloway
I'm going to assume they do a reasonable job of allocating capital. That may be right, it may be wrong. I don't want to have that argument right now. So I'm going to assume they do a reasonable job of managing the city's expenses. Okay, so let's go to the tax. It's pretty clear that if there's any group in America that is not paying their fair share and can best afford an incremental tax, that this tax would, that new taxes would be the least taxing on that would decrease their well being, happiness, happiness and health. The least it is the very, very wealthy. And if you have a second home in Manhattan, not your primary residence but your second home, the chances that you are very, very wealthy are very high. Now they have other options. They could tax corporations, which is the Democrats favorite boogeyman. But here's the bottom line. J.P. morgan has gone from 30,000 people in New York to 20,000 over the last 10 years and gone from 10,000 to 30,000 in Texas. Because at some point corporations will leave or start. The easiest people to fire are the ones you haven't hired and they'll start hiring more in Florida and in Texas. And by the way folks, JP Morgan is just not the guy running M and a making $7 million a year. It's a ton of assistants, people working in the kitchen, people cleaning the place, people in low level compliance jobs, people in mid level administrative jobs making 80, 100, 150, $200,000 a year that are one of the 6 or 7 million people that migrate into Manhattan from Gowanus or Queens or New Jersey aren't ballers. And if J.P. morgan and the biggest companies in the world, the biggest, most important companies in the world, at some point they will leave. And quite frankly, a lot of them have already left. So I'd be very careful with corporate taxes. Well, let's increase taxes in general, right? It's already 12 or 13% incremental tax. If you're in New York making over a certain amount of money at some point, the earners, the Ballers who are making a lot of money or what feels like a lot of money. Think, you know what? What? I'm gonna peace out to Florida. And it's already happening. So what do you want? You want a tax that raises money that, quite frankly, probably doesn't drive people out of the city. And I'm only speaking for one person, but I think it's indicative of probably how most people will behave. If it costs me another $100,000 to have a second home in New York, I don't love it. I'm bummed about it. But here's the bottom line. If I can go to Jack's wife, Frida, and watch the freak show and all the hot men and women and the world passed me by, and then I can go out for the best food in the world and go to Equinox and walk around and see the absolute wondrous freak show that is New York. Fucking A. I'm not going anywhere. It is the most amazing experiment, the best example, the pinnacle of America, the pinnacle of capitalism. The greatest collision of culture, commerce, creativity in general, aggressiveness, commerce, fashion, art, media. 100,000. Don't get Mamdani. Don't get any ideas. People who own second homes there will spend a lot more than that to stay and be witness to that amazing experiment. I think no one likes taxes. I hate this tax less than any other idea. In sum, I'm in favor of this tax.
- [37:31]
Ed
It's so funny to hear the argument where people say, well, if you do that, all of them are gonna leave. And it's like, brother, they already. Well, sorry, but they already left. It's their second home that we're talking about, so. But they're gone already, is my point.
- [37:44]
Scott Galloway
That's a great second home. They left already.
- [37:46]
Ed
I love that. If you're figuring out ways like they already left.
- [37:51]
Scott Galloway
So I left in 2010.
- [37:53]
Ed
Tax.
- [37:53]
Scott Galloway
You're exactly right. I left in 2010 because I couldn't afford to live in New York. And then when I made a bunch of money, I thought, I'd really like to spend more time in New York. And I bought a second home there. I bought a pieta terre, which increases
- [38:03]
Ed
housing prices because you have less supply. And of course, this is exactly what happens if you've got people who have left the state of New York, who have left the city. Their income isn't being taxed in New York, but their house is still there, which all it does is drives up the price of housing across the city, which is exactly what we've seen so, yeah, we should figure out a way to extract some value. There's. I think it's perfect. It's exactly what we should be doing.
- [38:25]
Scott Galloway
It is the least awful tax I have heard of in a while. And by the way, here in London, in Mayfair, you go by really high end buildings, there's not a single light on in the summer because it's a lot of people from outside of the country, a lot of people from the Gulf, and they're here in the winter and then they leave. And by the way, the local bodegas, the local stores, there's not a single light on in my building at any time. There's 12 or 14 units, I think. I never see anybody. I never see anybody. I'm in. Someone else is in the elevator. 2% never see anybody. I would bet 25% of the time I am the only person in the building. And 50% of the time there's maybe. I remember my next door neighbor is this wonderful guy, Michael. I won't say his last name. And his kid discovered the drums and they came over and they're like, we're so sorry. He loves the drums. I'm like, you know what? It's kind of cool just to have a little bit of life and pulse in this building. I don't mind at all. Tell him to bang on his drum all day. And anyways, this is. I actually think this is a really thoughtful, elegant talent. Having said that, boy, did our mayor fuck up. The idea of a tax is that one you discourage behavior, right? A carbon tax. But more than anything, it's to raise revenue so we can pay for our navy, our parks and food stamps. The idea is to raise money, right? To increase the treasury. When he shows up in front of Ken Griffin's condo and starts personalizing this shitposting him. Ken Griffin's done nothing wrong. Most billionaires are really good people. Some are okay and some are bad. Most poor people are really good people. Some are okay and some are bad. The demonization of rich people and the demonization of success is how we get J.D. vance as president. If the Democrats keep up with this bullshit. The whole point of America, One of the most attractive things about America, it's the reason why our incredible immigrants, including undocumented immigrants, risk their lives to come here. Why the best and brightest scientists all come here. Why the most ambitious people in the world come here, is because we celebrate success. We don't demonize it. And when he shows up in front of his house and starts shitposting him, and what is he going to do? It's like I've said this about the Democratic Party. If you keep saying young men don't have problems, but they are the problem. If you keep saying that white people unconsciously or consciously are racist and you keep saying that billionaires are evil, you're going to lose billionaires, you're going to lose white people and you're going to lose young men. Hello, J.D. vance, number 48 or whatever number it is. Stop. This is class warfare. If someone is worth a hundred million, does that mean they're only a tenth of as bad as a billionaire, but they're 100 times as bad as someone making a million dollars? This bullshit that your character and your decency is inversely correlated to your wealth is an Elizabeth Warren, Bernie Sanders, now Mamdani. Dangerous bullshit that does the following. This type of far left wokeism literally has annoyed America into fascism. It results in a bunch of strong men and weirdos who start demonizing people people and saying we embrace success even if it means. And by the way, wink, wink, I love billionaires. And show up and just give me money and I'll get in the way of all AI regulation. And what is he going to do if this backlash, this justified backlash from Ken Griffin. Good for fucking Ken Griffin. He's like, you know what? Fuck you, bitch. And this is similar to the bullshit non dom here in London in where all this virtue signaling they're trying to raise revenues. I get it. So they say we're going to go after people who haven't paid their fair share. Okay, I get it. Theoretically. But guess what? 10,000 millionaires have left and the treasury receipts are down. So if the objective is to raise money, then stop demonizing success and chasing tax revenues out of the city.
- [42:53]
Ed
I also think we should point out that it's ineffective to the mission. And this is a shame because I actually think that Mamdani so far has. Has been highly effective in putting forward his progressive agenda, winning that election and then convincing the establishment and convincing institutions that he's not off his rocker, which I don't think he is. I think he's actually got some really good ideas. I started out thinking that he was a little bit crazy and didn't understand the issues. And then eventually he sort of proved over time, actually, no, he really does understand the issues. But the trouble with this is it's ineffective to the mission of figuring out a system of redistributing the wealth such that we aren't living in this Hunger Game scenario, which we are every Day getting closer and closer to. And the reason it's ineffective is because how the billionaires feel about it actually matters. Because they can buy our elections. Because we did see Citizens United and billionaire spending on political campaigns went up 160x in literally the course of a decade. So the idea that, like, you already have, have the majority of Americans on your side on this issue. We already know that a lot of people do not like billionaires. We can go through the numbers. 67% of Americans believe billionaires are creating a more unfair society. It's up 8% from last year. 55% say that billionaires make it harder to achieve the American dream. Up 9% from last year. I mean, we know that the general American public wants to tax the rich. They don't like rich people. They don't like billionaires. We got it, everyone. The majority of the voting citizens are on your side on that issue. So why do you need to then go and demonize the billionaire, Basically out dox him in front of the entire city, and then give him a real reason to do everything he can to make sure that this doesn't pass. And by the way, that is exactly what we're seeing in California, where there has been, I mean, whether Gavin Newsom has actually demonized billionaires or not, that is the way they feel. And now they are contributing millions of dollars to these campaigns. Sergey Brin teaming up with E. Schmidt. They just raised $80 million in the last quarter alone to stop the California wealth tax proposal, which, by the way, I also don't think is the right way to do it. I think you should come up with more nuanced ideas, such as a borrowing tax or such as this Pierre Terre tax, which I think is great. But the point being, like, if they want to stop this stuff, they will. And because of this one video where he had this great idea, he had a lot of momentum. This one video is going to just completely change the sentiment on the way he's handling this. And now everyone has a reason to say, well, the billionaires have a reason to say Mamdani is out of control. We cannot deal with him. We have to put a stop to it. Which otherwise could have been reasonable policy in which we could have gotten maybe rich people and poor people to get behind on both sides, but it's not gonna happen now. So I 100% agree with you.
- [45:49]
Scott Galloway
Yeah. And by the way, just to be fair or just to talk about the tax, Florida, and I think there's a couple states that are considering a similar tax right I mean we have to pay for our government. Similar taxes proposed in 2014 and didn't pass, resurfaced again in 2019, but didn't pass. Oh. Montana and Florida are also exploring similar second home tax measures. And property taxes are the largest source of income in New York City. And the thing that's good about property taxes is that if you tax an individual at some point, individuals are very mobile. When you tax housing, it raises costs and it's sort of an indirect wealth tax. But it is probably, it's a tax that typically increases revenue before it drives people out. It's been shown to be an effective means of raising revenue. The wealth tax in California is just stupid. It's a one time thing. So it really doesn't address the systemic problem of spending more than we take in. It can only be spent on certain things. It's wealth tax. And we've said this before, in the 16 countries that have had a wealth tax, 13 have repealed it because very wealthy people are incredibly mobile when you start taxing. Anyway, that tax is not a good idea. But I do think that this tax and also New York property taxes. So my primary is in Florida. Florida, those, those property taxes are a lot because there's no state income, there's no state income tax. So they got, they've got to get there, they've got to pay for their schools in the fire department. So somewhere. So the, the real estate taxes in Florida are actually quite high in some. If you were just an economic animal, you would make your money in Florida and you would rent. But anyways, my point is I think this is a good tax. The class warfare was an own goal and the wealth taxes generally trying to assess people, so trying to do an audit. Real estate actually has a pretty recent mark that you can value it on the last transaction. Whereas trying to assess someone's wealth, I can't imagine what a boon that's going to be for tax lawyers and appraisers to claim that, oh wait, Ken Griffin's worth, he's actually has negative net worth. Remember when Donald Trump all the stuff around his taxes in the same year he was saying his golf course was worth whatever, 200 million and then for tax purposes, no, it's worth negative 100 million. The games here will be extraordinary. And the thing about a property tax is that you just go off the last transaction or a recent transaction of a similar property in the same building and other other words it's enforceable. And what Mandami is doing is the same thing. We have a tendency to do on the left. And that is we have a tendency to be right but not effective. And I would argue the right has a tendency to be wrong but effective. They're very good at getting really bad ideas.
- [48:56]
Ed
Bad ideas through.
- [48:57]
Scott Galloway
Yeah, bad ideas through. Whereas we emotionally they should pay their fair share. Yeah. And then we wake up and our tax receipts have gone down. But we feel good about ourselves.
- [49:10]
Ed
We'll be right back. And for even more markets content, sign up for our newsletter@profgmarkets.com.
- [49:25]
Scott Galloway
Support for the show comes from hims if you want to know what's really worth your time when it comes to losing weight, skip the guesswork and get weight loss by HIMS. HIMS offers access to an affordable range of FDA approved GLP1 medications that now include the Wegovy Pill and the WeGovy pen. Plus lifestyle tips to support you along the way. With WeGovy at HIMS, you can lose up to 20% or more of your body weight find with diet and exercise. It helps you regulate your appetite and eat less so success is within reach. Ready to reach your goals? Visit himss.com markets to get a personalized affordable plan that gets gets you. That's H I M S.com markets himss.com markets Weight loss by HIMSS is not available in all 50 states. WeGovy is the registered trademark of nodonortisk. As to get started and learn more, including important safety information, WeGovy clinical study information and restrictions, visit HIMSS.com. Support for the show comes from Amazon. There are the things you can plan for a first birthday party, a movie marathon, a renter friendly bathroom reno. And then there are the things you can never plan for. A surprise rainstorm. A Blu Ray player calling it quits. Stick on tiles that looked way better on the package for all things planned and unplanned, Amazon has you covered. You'll find low prices on everyday essentials and and last minute lifesavers. Shop Amazon and save on essentials. Save the everyday. I'm Mitch Purse, two time IndigoCell champion, championship MVP and forward for the US Women's National Team. Before I went pro, I graduated from Harvard with a degree in psychology, which comes in handy more than you think. Any athlete pursuing greatness knows there's a certain mentality you have to have have. What people don't know is what that costs. In my podcast, Confessions of an Elite Athlete, I sit down with the best athletes in the world and explore the psychology, mindset and unseen battles on the path to greatness. So take a seat and learn from the Confessions of an elite athlete on YouTube or wherever you get your podcasts. Foreign.
- [51:56]
Ed
We're back with Prof. G Markets. Two very different earnings stories emerged last week, and together they say a lot about where consumer behavior is headed. First, the alcohol industry continues to struggle. Diageo, the maker of Johnnie Walker and Smirnoff, reported a 9.4% decline in North American sales year over year. Constantly Brands, the company behind drinks like Corona and Modelo painted a similar picture, citing softer demand and withdrawing its fiscal 2028 guidance. Meanwhile, the companies behind GLP1 drugs crushed their earnings. Novo Nordisk reported surging demand for its new Wegovy pill and raised its full year guidance. Eli Lilly said that revenue from Mounjaro, which is their GLP1 drug, jumped 125% year over year, more than doubled to $8.7 billion. And now the CEO' the beverage companies did not explicitly blame GLP1s for the pain. While that is true, the correlation here is pretty clear and it's something that we have been talking about for a long time. Scott, you said as early as 2023 that alcohol would be one of the first casualties of the rise of GLP1 drugs. Let's just play a clip of what you said.
- [53:13]
Scott Galloway
I even saw some data saying that people on Ozempic reduced their drinking by 60%. Diage alcohol guys, oh my God. These stocks, in my opinion, are going to get absolutely hammered. We could see alcohol really taken on the chin.
- [53:30]
Ed
I think that's exactly right.
- [53:32]
Scott Galloway
Your reactions among people aged 18 to 34, 1 and 2 say they drink. It used to be 3 and 4 just 20 years ago. And also, and I've said this publicly, I think the risks of social isolation are greater than the risks to a 25 year old liver. If you have addiction in your family, if any, anyone close to you is saying it's getting in the way of your other parts of your life, your ability to work well, your health, maintain relationships, or just generally speaking, you don't enjoy drinking, by all means don't feel pressure to drink. But social isolation increases your risk of premature death by 32%. I was on Andrew Huberman's podcast a couple weeks ago and we went back and forth about alcohol because he's kind of, I think he's sort of credited with kind of kicking off the anti alcohol movement or and we had a really, I thought what was a really productive conversation. But shares of the world's top listed beer, wine and spirits makers have shed a combined 830 billion since 2022. Get this. In the last four years, these guys have lost 4/5 of a trillion dollars. The Bloomberg gauge of global alcohol stocks is trading at around 15 times forward estimated earnings less than half its 2021 high. Remember Covid? I don't know about you. Every now night I was doing those virtual cocktail hours with my friends. Did you. Were you doing those?
- [54:54]
Ed
I think that was my 21st birthday. Was 10 days into Covid and I got everyone together on a Zoom and we, yeah, we all got hammered on Zoom. It was fun, but pretty weird.
- [55:04]
Scott Galloway
I didn't know that about you. That explains a lot. You're a Covid kid. You. You graduated from college during COVID I didn't know that.
- [55:11]
Ed
Yeah, exactly.
- [55:12]
Scott Galloway
Yeah, yeah.
- [55:13]
Ed
Senior year was remote.
- [55:15]
Scott Galloway
Anyways, these guys. So obviously a lot of this and I think. I think a more. I've said this a bunch. I think a more transformative technology with a greater impact on the world is going to be GLP1, not AI. 12% of Americans are currently taking GLP1s for weight loss as of late 2025, up from 6% in February 2024. According to Morgan Stanley, GLP1 patients consume up to 75% less alcohol. Other second order effects that we talked about back then. GLP1 users will drive an estimated 4% lift in clothing volume sales this year. Because what's the first thing you do when you lose weight? You go get new outfits. The four largest US airlines could together save as much as $580 million per year on fuel, thanks to GLP1s. I love that stat.
- [55:59]
Ed
So funny.
- [56:00]
Scott Galloway
And even small weight changes matter. A 2% reduction in aircraft weight could boost earnings per share for airlines by about 4%.
- [56:08]
Ed
It's so weirdly rude to overweight people, that stat. It's sort of like you're the reason that their earnings are. Their margins aren't large as they could be.
- [56:19]
Scott Galloway
I think it's going to kick off a baby boomlet. I can't get over how hot everyone is. Maybe it's because I'm just old and I have bad vision and I just see any young person, I'm like, jesus, that person's hot. But I think, well, you're not old enough to know this. I can't get over how many hot people there are out there right now. And I. People can now pretty much if they have money, they can lose weight on demand. And also I'm writing a book called Reckoning and Renewal about public policy. And I'm convinced that GLP1 is the best chance we have for reducing our deficit. I think if you really look at our deficit, all roads lead to one thing. It's healthcare. And if you really look at healthcare, the only way to substantially reduce the expenditures all roads lead to obesity or specifically a reduction in obesity and its second order effects. So I think this technology is an absolute landmark breakthrough. At some point those alcohol stocks will be a buy because I do think at some point I think that it'll level out. Like for example linear tv. By the way, Profg is launching a channel called the Prof. G channel on Swerve TV where it's basically Internet tv where there's a segment of America that likes watching live TV and is willing to endure commercials to have it for free. Every year for the last 30 years, that ratio has gone from whatever it was. When HBO was introduced it was 96% watch linear and 4% had HBO streaming has eaten into share every year. Three years ago it leveled out, it was 50 50. It hasn't increased its share. There's still a large segment of America, about half of Americans in terms of viewing time that don't want to pay and like watching linear TV and kind of channel surfing. I think the same thing's going to happen with alcohol. At some point it will bottom out and these companies will be overshot. To the downside, they have incredible brands. Also in terms of the business, there's few businesses with greater margin than alcohol. So they will ride size that certain types of alcohol will come back in. I do think there's always going to be a role for alcohol. I've said for a long time it's my favorite drug and I've tried. Have I tried most of them, Tried a lot of them. Nothing for me works better than alcohol anyways. I wonder when that dip is, but I think it still has some way to go. But typically these companies bottom before their business, their stocks bottom before their business bottoms because it's the anticipation of the continuation of the slope down. But these companies have been just absolutely hammered. What are your thoughts? I'm curious to know your and Claire's approach to drinking and what you think of this.
- [59:18]
Ed
I don't drink as much as before. I think that's definitely a trend and we can get into that just to go through some of the earnings that we saw here. So we mentioned Diageo spirit sales down 15%. Tequila sales declined double digits. Constellation Brands, they reported that and spirit sales were down 58%. So these companies are getting hammered in the alcohol department. But we are seeing an explosion in non alcoholic sales. So AB and BEV, their non alcoholic sales grew 27% this quarter and that actually drove an overall growth in sales performance. So they are figuring out a way to avoid the alcohol boogeyman and that is stop selling alcohol and start selling non alcoholic products. But I would also like to point you to what I thought was one of the greatest quotes that we saw on CNBC last week from the AB&BEV CEO who was recognizing this trend among young people, which is that we're not so much excited about going out and getting super fucked up on alcohol, but we're more interested in these sort of healthier experiences. We're more health conscious and we'll get into that as well. And this was his pitch as to why beer is the new healthy product. Let's just play this clip. Beer naturally has product protein because the barley that we use is rich in protein.
- [60:41]
Scott Galloway
Okay.
- [60:41]
Ed
So when you analyze the components of
- [60:44]
Scott Galloway
beer, beer has naturally protein. I want to believe it. I believe it. I believe it. I, I'm 100%. That feels right as rain to me. Yeah, it feels right as rain to me.
- [60:56]
Ed
Right. The sales pitch works. It worked. Prof. G's down with beer again because beer has protein. I love that as a, as a pitch. And it does get to what these, what these CEOs are recognizing, which, yes, we are moving into a healthy, healthy experience direction. Just some of these stats here. Gen Z and millennials make up 36% of the US adult population, but they drive 41% of the annual wellness spend. And Gen Z is four times more likely to want to meet people working out than at a bar. And this gets to another clip which I'd like to get your reactions to. This was an interview that the Wall Street Journal did with Diplo and they were asking him about what is the future of the nightlife industry. Diplo is of course the and incredible DJ who is known around the world. They asked him what's happening to nightlife? What's happening to how young people get together? This was his response. I think less people go out because
- [61:52]
Scott Galloway
they experience a lot of social activities online. Even young people, they don't go to clubs as much anymore, but they will go to experiences like our run club or you know, the, the sauna world is exploding. You know, people go to like other ship here in New York, the communities. And I think a lot of kids want to have those experiences more and more and less and less like want to drink. I do think there's a Move back to experiences and touching grass and people are, are embracing more of a healthy lifestyle. Those look, those are all good things as long as they get out and they socialize. The thing that's missing from this analysis about young people is that. And I think these firms, these drinks firms are going to have to recap. Calibrate. Drinking's just so expensive. When I go out of New York, I mean, some of these places, drinks are 24 bucks. You're a young person. Say you're making 100 grand. You take home 70, that's six grand a month. You spend, you know, maybe you have a roommate and you spend 3,000. You got, you got, you know, a thousand bucks a month maybe of disposable income. You're going to spend two or three hundred dollars going out on alcohol. That's not even dinner or that's not even including dinner. I, I think that drinking has become almost like housing, almost like kind of unaffordable. At least drinking socially. And also, I just don't. And let me just say, I just don't think you ever. One, one thing I think is a bad idea, don't ever drink alone. I don't think that's a good idea. Anyways. I. The missing piece here. What I hope happens, I hope they're forced to dramatically lower their prices. People don't realize how severe it it is. In, in, in London, my friend, I have a couple friends who are super into wine. I've never been into wine or art. I just don't, I don't drink wine. But they've said you can get amazing wine now for 70% less than you could get it three or four years ago. Like there's a glut of wine. There are wineries supposedly in Italy and France where if you just take on the debt, you can own the winery because they just can't sell. There's wineries that it's costing them 30 bucks to produce a bottle of wine. And they used to sell for 70 and now the retail market for it is 18. The clearing price is 18 bucks. And they just don't know what to do. These family wineries that have been in business for generations have just been absolutely flipped upside down.
- [64:16]
Ed
But I think the Diplo clip gets to a potential point, which is that it's not necessarily that young people just don't want to have fun anymore. I mean, that might be the case. And the data around that is a little bit concerning. And it seems that we are spending most of our time on our phones scrolling, but it could be that it's not that we're not trying to have fun, it's that we want to have fun just without alcohol. Which to me means that there is a huge opportunity for, I mean any kind of investment, any kind of industry. I mean, just some stats here. Sober curious gatherings, which is a ridiculous term. But on Eventbrite, Sober curious gatherings have risen 92% on the platform. And sauna raves, these are DJ sets and dance parties that happen in saunas, are up 256% this year. Now I'm sure that's off of a very small base because what the hell is a sauna rave? And I would add that I'm not interested in raving in a sauna myself, but I don't know, maybe you are, Scott. But still it gets to the point that there are new experiences happening.
- [65:23]
Scott Galloway
I have a stroke. Raven Sauna makes me want to slip and break a hip.
- [65:27]
Ed
This sounds terrible, but it's happening.
- [65:30]
Scott Galloway
The idea of young people getting out and touching grass and doing stuff that's more affordable, more healthy, great. I'm here for it. I think what's missed or that you haven't commented on what I have found when I'm around young people in quote unquote aspirational environments, they're still getting fucked up, Ed. They're just not getting fucked up on alcohol. I think think the amount of mushroom chocolates, ketamine, psilocybin, mdma, X, Molly, Tusi, whatever you want to call, feels to me like a lot of young people have basically said, especially among kind of the young aspirational set have decided that alcohol is old technology, but they haven't given up on getting up. And the thing I don't like about it is I find many of these drugs are more smart. Small crowd, isolating drugs. They're not social drugs. It's like one or two of you do ketamine. It's not.
- [66:29]
Ed
You do ketamine, then you just black out in the middle of.
- [66:31]
Scott Galloway
And you go to a K hole. I don't know. I don't think people are doing psilocybin and then approaching the dude across the bar and say, hey, what's your name?
- [66:39]
Ed
Some would say you are, but I think it probably depends.
- [66:42]
Scott Galloway
But this notion that all young people are, you know, moving towards more health, healthy, thoughtful. I think that drug use, I wish you get the data on it. I think a lot of people are. I mean, in Manhattan, I'm sure alcohol consumption is down. Have you seen how many marijuana dispensaries there are, they're everywhere. So I'd love to see the data on alcohol consumption versus drug use. What is the level of, of intoxication or substance consumption? How much does that actually decrease across young people? Or have they just changed? Are they just picking a different poison?
- [67:25]
Ed
Well, I would just bring up a point that one of our research team members, Dan Shalon made, which is, you know, there seems to be this idea that if Gen Z isn't drinking alcohol, then they must not have a substance abuse problem. His point, which I agree with, is actually they do have a substance abuse problem. And that substance is, is screens. It's just screen addiction. Flat out.
- [67:47]
Scott Galloway
It's a different addiction.
- [67:48]
Ed
Exactly. And it's like the reason we're not getting out and we're not socializing with people is because we are just spending most of our time on our screens 109 days out of the calendar year scrolling on our phones. That is our vice. That is the substance that we are addicted to and that we are abusing. And it is eating into the amount of time and the amount of money I would add that we would spend and consuming alcohol with friends. So it's a different type of addiction, but it certainly is having negative effects and some would argue even worse effects than previous substances.
- [68:23]
Scott Galloway
I'm one of those people that argues it's even worse because look, 95% of people are able to integrate not only alcohol but drugs should they decide to use them into their life without serious ramifications. There's this general demonization of substances, of all substances that, oh, one trip of a drink of alcohol or if you smoke a blunt, that's it, you're going to be homeless soon. Or, you know, I, it just. The vast majority of people are. And also a big component of that, a large component of people and an increasing component decided they don't want to integrate it at all. They want to find joy and reward from other things. More power, have access at it. But the notion that alcohol and drugs, the data is just not there. The vast majority of people that engage in both those things are able to integrate them in their life in a fairly safe and sane way. What I have found or what I'm doing is I've gotten older. I just don't. When I started work like you, I pretty much gave up all substances because I'm like, okay, it's go time. And I realized the only thing I could control was how hard I worked. I didn't. I could not get up and be downtown of Morgan Stanley on Figaro Avenue in Los Angeles. Hungover. I just didn't want to endure that type of. So I pretty much gave up substances even mostly through I would say from the age of like 22 to like probably 34 until I moved back to New York. And then daddy hit it hard again. Then daddy went deep in the paint. And by the way, Ed, it was so worth it. Double seven Lotus Gia. Oh my God. God. So worth it.
- [70:01]
Ed
You love that time of your life.
- [70:02]
Scott Galloway
Whatever fatty deposits or scars are on my liver, those are badges of honor. Badges of honor anyways. But as I've gotten older I realize my liver can't process alcohol the way it used to. So I'm trying to tone it down. But now you know. And of course I'm doing more edibles now. So I don't know. I don't know. Which supposedly creates psychosis. Andrew Huberman told me that by my age I would have discovered if it was going to cause psychosis. So I've been cleared by Huberman lab to do edibles. Oh, just. So back to the whole markets part of this Joey Baggadonas podcast. So Diageo in 2016 was 100 bucks a share. Now it's 85. Okay. The S and P has had to have doubled it. It should be a two or three hundred bucks. Bucks. It's at 85. Brown Foreman, Jack Daniels fame, 45 bucks in 2016 it's at 27 now. Anheuser Busch AB InBev was 125 bucks. Now it's 80. Heineken 70. It's actually gone up. One of the steadier performers is at 90. Pernod Ricard was at 95. Now it's at €65. I mean this set sector, it's hard. It would be hard to find a sector that has underperformed with such incredible brands in the drinks business. It has been a disaster over the last decade.
- [71:29]
Ed
But beer has protein. So that's, that's the new marketing campaign.
- [71:33]
Scott Galloway
I am so here for it. When I went to World cup in Qatar, I stayed at the AB InBev Hotel and they were introduced there.
- [71:41]
Ed
They need to not have hotels. Maybe that's what they should do. Talk about shedding assets.
- [71:45]
Scott Galloway
They took it over.
- [71:46]
Ed
They took it over. Okay.
- [71:47]
Scott Galloway
Yeah. Who knows? I would stay there. I would stay at the Makers Inn.
- [71:55]
Ed
That's good actually.
- [71:56]
Scott Galloway
But they introduced their non alcoholic beer and it actually tasted pretty good. I just didn't feel as good about myself and the rest of the world. But they. Anyways, I think we've beaten this drunk horse to death.
- [72:11]
Ed
Yeah, yeah. This drunk horse is dead. Let's take a look at the week ahead. We'll see inflation data from the consumer price and producer price indices for April. We'll also see earnings from Constellation Energy, AST Space Mobile, Alibaba, Figma and Klarna. Scott, do you have any predictions?
- [72:30]
Scott Galloway
My prediction is that I don't know if you saw this ad. I thought of you but earlier in the week this really talented TikTok, it was so interesting. 32 year old TikToker crowdfunded 132 million in non binding pledges to buy Spirit Airlines.
- [72:50]
Ed
Whoa.
- [72:51]
Scott Galloway
Did you see this?
- [72:52]
Ed
No.
- [72:53]
Scott Galloway
His name's Peterson. What's his name? I can't remember. It's something Peterson, Hunter Peterson. He had a TikTok the same day a website one day zero, day one a website website and then 6 million views and 130,000 people have pledged about a thousand bucks each for this non binding pledges to try and buy Spirit airlines. And when you think about. He's really compelling. He's back of the napkin math was that 20% of American adults paying the average spirit fare of $30 to $40 equals enough to buy an airline. And look, it's unlikely to happen but the idea of using AI, AI and remote payments and AI agents to respond to questions and get people to sign and then transfer money and held in escrow until certain things, you know, they used to say in the blockchain with certain rules but it's AI now go through to execute the transaction he wants to do to Spirit. What like the Green Bay packers is mutualized, like the community owns it. I think we're going to see a company in distress. It's got a big brand be crowdfunded and either brought out of bankruptcy or acquired in the next. I think it's a really interesting take or kind of combination of AI social crowdfunding and meme stocks.
- [74:22]
Ed
Sort of like the Gen Z activist investor. It's really interesting.
- [74:26]
Scott Galloway
That's exactly, exactly right. And that is, you know someone with a media platform who knows that maybe hosts a markets podcast, says this company's undervalued or maybe there's a social purpose here. We've set up a site here if you're interested. Here's the diligence, here's the work we've done on it. Here's how you pledge, here's what you sign, here's the rules on when your cash is actually actually called on and pledged and transferred. Here's what you get in exchange. And this is going to happen. Someone is going to figure out enough prompts, enough doConnects, enough legal SEC compliance to crowdfund the acquisition or the. Or the funding for to pull a company, bring a company out of bankruptcy. It's got to happen.
- [75:19]
Ed
You've inspired me. I think we should take over ebay. We'll pay half cash, half stock, and then we'll turn it into a sauna raving company where people can get together and I like experience things.
- [75:29]
Scott Galloway
I like it.
- [75:30]
Ed
And we'll try to get some sort of cryptocurrency edge to it as well. Maybe we'll use blockchain to power our sauna raving business. My prediction is a little bit of a boring one, but I think it's going to happen. I think this Ken Griffin issue is going to be kind of the calling cord that inspires a lot of billionaires to get together and do whatever they can to stop these wealth taxes. And I think this debate is, it started out as kind of this crackpot idea that was mostly being espoused by AOC and Bernie and people kind of wrote it off. It's now becoming very much core and central to the political conversation. And I think that that moment where he outed him and kind of doxed him will be the moment that billionaires use as their reason as to why they need to put a stop to this. And I'm not sure I'm very happy about that because I think we do need some sort of redistribution proposals, but I do think that that will be the outcome of outing Ken Griffin in that video. All right, good to go.
- [76:30]
Scott Galloway
Good to go. Good to go, my brother. I'm about to literally. It's 8:44. I'm meeting someone at 9 at Roof Gardens, and guess what I'm going to do?
- [76:38]
Ed
Drink.
- [76:38]
Scott Galloway
You know what, my brother? You know it. I'm going to bring back who owns makers. I don't even know who owns makers. Anyways, I'm going to reinvigorate this industry. I'm bringing sexy back and I'm bringing makers back.
- [76:54]
Ed
This episode was produced by Claire Miller and Allison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Coti. Our research team is Dan Shalon, Isabella Kinsel, Kristen O' Donoghue and Mia Silverio. Jake McFuss is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Property Markets from Property Media. If you liked what you heard, give us a follow and tune in tomorrow. For a fresh take on the markets.
- [77:30]
Scott Galloway
You happy and kind reunion as the world turn.
- [77:47]
Ed
And the dark light
- [77:51]
Scott Galloway
in love.