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- [00:01]
Scott Galloway
Avoiding your unfinished home projects because you're not sure where to start. Thumbtack knows homes, so you don't have to. Don't know the difference between matte paint finish and satin or what that clunking sound from your dryer is. With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top rated pros, see price estimates and read reviews all on the app. Download today. Support for this show comes from Pure Leaf iced tea. When you find yourself in the afternoon slump, you need the right thing to.
- [00:33]
Jessica Charlev
Make you bounce back. You need pure leaf iced tea.
- [00:36]
Scott Galloway
It's real brewed tea made in a variety of bold flavors with just the right amount of naturally occurring caffeine. You're left feeling refreshed and revitalized so you can be ready to take on what's next. The next time you need to hit the reset button, grab a pure leaf iced tea.
- [00:52]
Jessica Charlev
Time for a tea break.
- [00:53]
Scott Galloway
Time for a pure leaf. Welcome to Raging Moderates. I'm Scott Galloway.
- [01:02]
Jessica Charlev
And I'm Jessica Charlev.
- [01:04]
Scott Galloway
Jess, thanks for your patience. Another logistical nightmare with Scott Galloway leaving his computer on the plane.
- [01:10]
Jessica Charlev
I just can't believe you're not freaking out about it. You seem so chill.
- [01:15]
Scott Galloway
Well, it's like when I don't know if you're in combat long enough, I.
- [01:20]
Jessica Charlev
This is your war.
- [01:21]
Scott Galloway
My ex wife used to say if my dick wasn't attached, we'd find it on a card deck table in soho next to a script of Goodfellas.
- [01:28]
Jessica Charlev
Oh, how romantic.
- [01:30]
Scott Galloway
Yeah, no, I. I'm five minutes away from losing my keys. Anything that is not hermetically sealed to my body or my person will not be with me for very long. And that's also one of the limit tests for when I know I'm stressed out, I start losing everything. Like, I can't everything all the time.
- [01:45]
Jessica Charlev
Oh, well, anyways, can we help with the stress in any way?
- [01:50]
Scott Galloway
Enough of my logistical issues. What did you do this weekend?
- [01:53]
Jessica Charlev
I mean, it's not particularly interesting, but my uncle, for his 75th birthday had us all out to Westchester. He does ballroom dancing, him and my aunt.
- [02:06]
Scott Galloway
Wow.
- [02:07]
Jessica Charlev
And we did like a dance class, and they're really good. And so we were doing the cha cha with a bunch of his pals.
- [02:15]
Scott Galloway
That's nice.
- [02:16]
Jessica Charlev
Yeah, it was cute. It was nice.
- [02:17]
Scott Galloway
That's really cute.
- [02:18]
Jessica Charlev
Yeah. I'll send you some video. I know you're dying for it.
- [02:21]
Scott Galloway
Yeah, I was at the French Open. Oh, enough of you. Back to me.
- [02:26]
Jessica Charlev
Well, that's Cool.
- [02:27]
Scott Galloway
It was cool. I'd never been before.
- [02:29]
Jessica Charlev
It was really, well, Yarrow says, nice.
- [02:31]
Scott Galloway
It's really well done.
- [02:32]
Jessica Charlev
Yeah, it's fun. The slip and slide effect. It's sad to not see Nadal do it, though.
- [02:36]
Scott Galloway
Yeah, I'm not into tennis. I go mostly just to be fabulous. I don't really even know who's playing. And then for two hours, bomb in and out. We've been going to Paris lately where I took my son to a PSG game. I forgot how beautiful and wonderful Paris is. My God, it's so nice.
- [02:52]
Jessica Charlev
The real deal.
- [02:52]
Scott Galloway
It's the real deal. It's the know, it's the Paris of Paris, right?
- [02:55]
Jessica Charlev
You want to hate it because they hate us so much. Just the Parisians, not the French in general. And then you're there and you're like, I love you. I love everything about you that's happening here.
- [03:07]
Scott Galloway
I feel like there's a new esprit de corps among sane people across all nations right now. I feel as if, you know, we made fun of the French. They turned up their noses at us. Now we're like, this is some serious shit going on here. All this nationalism and weirdness and, you know, the breaking of the post World War II order. And everyone is sort of like, okay, if you're reasonably sane, you're my ally. I've found generally people are pretty friendly and kind of, hey, how are you? What the fuck is going on over there? That's the general vibe you get in Europe right now.
- [03:36]
Jessica Charlev
That's a fair point. They still don't think that we can dress. Our accents are terrible, even when we try to speak the language. And they know that they're our cultural superior. So as long as we're comfortable with that, I do find them to be friendly.
- [03:49]
Scott Galloway
Yeah.
- [03:50]
Jessica Charlev
Did you. I didn't listen to every single piece of your content last week. Did you talk at all about Brigitte Macron pushing Macron's face as the plane door opened?
- [04:01]
Scott Galloway
Yeah.
- [04:01]
Jessica Charlev
I've been fascinated by that interaction that's called marriage. Well, that's what he said. And French marriage that they were playing.
- [04:08]
Scott Galloway
But I don't know if that was contempt or friskiness. I don't know if they're about to go in the back of the plane and get it on or if she's just had it with them. I don't know if she's going Melania or. I was thinking about just a tangent here. What Bruce Springsteen said about the White House I thought was so powerful. He said, this is The White House with no music, no kids, no sports, no pets, no culture, no joy, no wife. You know, Melania's never there, and essentially he just escapes and goes and plays golf. There's just no humanity in the White House. I thought that was really powerful, the way he said that.
- [04:44]
Jessica Charlev
Yeah, he had a lot of good things to say. And then he doubled and tripled down on it once Trump got aggravated, which I always enjoy because it is easy to back off a bit, but the boss knows.
- [04:55]
Scott Galloway
There you go. So today we're talking about Trump's trade war running into serious legal limbo, the Senate taking up the House's budget bill, and the White House's ongoing attack on Harvard. All right, let's bust into it. Last Thursday, the U.S. court of International Trade struck down the president's use of emergency powers to impose sweeping global tariffs. The three member body voted unanimously and included a judge that Trump himself appointed. But later the same day, an appeals court paused the ruling, suggesting that the issue will probably need to be decided by the Supreme Court. The legal turmoil led Trump to lash out publicly at the Federalist Society for giving him bad advice on judge appointments. And it added some juice to the acronym taco, meaning Trump always chickens out. By the way, that's from People Don't Credit. It's Robert Armstrong from the Financial Times. Jaz, first off, what do you make of this kind of this term taco? Is it accurate, the term coined by FT reporter Robert Armstrong?
- [05:50]
Jessica Charlev
Well, I think there are now over 50 waffles, at least in terms of things that he said he's going to do or deals that he has made that we now know. He hasn't even spoken to anyone or his team hasn't even spoken to anyone. So, yeah, I'd say it's pretty accurate. But I live in abject terror of what happens when Trump feels bullied or embarrassed he became president because Obama made fun of him at the 2011 White House Correspondents Dinner. So think about the level of rage that he had pent up then. Then you add to it that he's coming in and no matter what's going on in public, I still feel like he maintains some core strength or core level of belief in the project. The project this time being the tariffs. Whereas any normal person, I think, would kind of take the win to when the courts keep batting these things down to just say, hey, it's law fair, right? Everyone's out to get me, even if I appointed them. We're going to relax a little bit, we're going to put 10% tariffs, you know, here and there. We'll do let's say 20% on China and let's get back to business. He's going to dig in because he's a little kid and he's mad and that's what scares me about Taco. But it seems accurate and also amusing. How are you feeling, Taco wise?
- [07:09]
Scott Galloway
Yeah, it's interesting, essentially. So it's a term meant to describe a financial trade, and that is the trade is. That's paid huge dividends, is when the market moves because of a threat from the Trump administration about them imposing a tariff. You bet the other way. Because essentially he doesn't follow through and that he negotiates against himself, backs out, chickens out. So, for example, the shipping stocks that were very dependent upon Chinese US shipping crashed because of this 135% tariff. And so the trade was to go long, those stocks, after they had declined, believing that in fact he would back down, which he eventually did. And this trade has been hugely consistent and profitable. Just go the other way. If there's a big movement based on a threat, go the other way, believing that he's going to back down and it's paid huge dividends and the number used is the right 1, approximately 50 announcements around tariffs or reductions in tariffs. And as far as I can tell, one sort of deal with the UK where they're agreeing to talk more and they reduce some tariffs on autos and jet airplane manufacturing.
- [08:15]
Jessica Charlev
Oh, is it like Aston Martin engines?
- [08:17]
Scott Galloway
Yeah, I mean, nothing.
- [08:18]
Jessica Charlev
Things we all really desperately need in our daily lives.
- [08:20]
Scott Galloway
Big Nothing Burger. And I used to believe that, okay, Trump makes these irrational threats as a means of trying to get nations to come to the table. And I now believe that that's not the primary objective here. I believe in, you know, in the fullness of hindsight and when a light is shined on this period, we're going to find that this incredible manufactured volatility was the vehicle or the inspiration for the most massive insider trading grift in history. And I think what's happening here is that he takes the market of a specific nation's equities or specific stocks way up or way down based on threats, and he leaks that information to people close to him, to allies or to parties related to him. They make billions, I mean, literally billions. When he announces that he's imposing a new trade on EU products, a sophisticated trader could figure out a way to make billions that day, knowing that the stock's about to crash. I mean, when you have your own attorney General trading stocks the morning before he announces tariffs, knowing the market's going to crash. So she goes out and sells her Donald Trump media stock. I mean, essentially you have a totally lawless administration. The ability to move markets like this and then anticipate those moves and trade on them is billions. So I no longer think this is even about national interest. The fear was that in an attempt to advance national interests, he was going about it in sort of this primitive 19th century way that made absolutely no sense and historically has never worked. But that's not it. It's worse than that. He's just moving markets up and down and trading against it. At least that's my thesis. Your thoughts?
- [09:57]
Jessica Charlev
It seems right to me. I mean, I have certainly no personal experience and then a little by extension experience, because I hang out with people like you about the psyche of people with like a lot, a lot of money. I know people who certainly have enough money. But when you're talking about billions of dollars, that's not really in my, my day to day circle. And you said people just never think they have enough money. And I always thought that there had to be some sort of limit on it. Not that you would go backwards and start making bad investments on purpose, for instance, or whatever, but that there could be a limit to it. And that's why anyone must actually be interested in doing something good for the government. This is months ago that I thought this or that maybe Donald Trump knows that he's not going to get a peace prize, for instance, for just making billions of dollars off of the American people. And now it's pretty much affirmed that this is just a grift in general and for every single person that is part of the high levels of the administration and anyone who can frankly, get their claws into him. So whether it means that you're going to be able to build a new resort in Qatar or in Vietnam, whether you have a coin that you're profiting off of, whether you're just showing up and paying a million dollars for dinner so that your son can get out of jail. Like there are just so many ways that he is expanding his bank account that it's tough to keep track of it. There's a huge New Yorker pie. And I feel like everyone has gotten the message that this is the right talking point, that we have to say that this is unprecedented, that we've never seen anything like this. And Adam Schiff is talking about all of the investigations that we're going to have. But as per usual, nothing feels like it's Meeting the moment. And this is what does happen when things are so scrambled and are being done in such a way that there's no precedent for it because we don't have the laws to govern it. Like, it's clear that this is an enormous ethics violation, for instance, but there's no immediate backstop to any of it. And they're just running out the clock. They're like, we have three and a half years to get as rich as humanly possible and to cause as much damage as possible. And from Trump's perspective, he knows well that to go through the courts, it takes a long time. He's been granted basically complete immunity by the Supreme Court. And no one's going to put an 85 year old in jail. Like, worst case, right? He has an ankle bracelet around Mar A Lago, so who really cares about that? He'll just be hanging out with his friends. And I feel oftentimes at my other job like I'm shouting into the void. But not so much the degree to which that I do about this particular problem, because the fact that anyone is even coming back and talking about the quote, unquote, Biden family corruption or whatever it is that Hunter Biden did, in contrast to what's happening now with Trump Inc. It almost doesn't deserve a response. But you know that there is a large swath of the American public who actually feels that way. And I feel a bit at a loss.
- [13:00]
Scott Galloway
Yeah. I think one of the failures of the Democratic Party in terms of getting people to recognize the level, the grift here is that they think, okay, there's always been grift. This is on a bigger scale. He's being more transparent about it. But what they don't connect is that this is in fact a zero sum game. And that is when Attorney General Bondi sells Donald Trump media stock the morning that he later that day announces sweeping tariffs that take the markets way down. There's someone on the other side of that trade that bought her stock, say at 20 bucks a share because they didn't have inside information, knowing that this exogenous event was about to take the value of those shares down to 15 bucks. The key to the modern financial services industry is trust. Take Russia for example. People don't feel confident taking their hard earned money and putting it into the market because they know that there are people in and around Putin's inner circle that have access to information. There's kleptocrats. And there are certain things that are outside of their control, influence or they Just don't have the knowledge where they're likely to be on the wrong side of a trade. They're going to find out that oh so and so knew they were about to announce a new government contract to build a new nickel mine or give a nickel mine to a publicly traded company run by an oligarch close to Putin. And they were in on the trade and they were on the wrong side of the trade. And so people just don't participate in the markets. There's no sense of rule of fair play. Now the US Markets, we attract these incredibly deep pools of capital because people believe, okay, maybe I don't have inside information, but nobody is allowed to have inside information. It's supposed to be, I'm supposed to be betting on a gut feeling sense of the market. I believe Apple's going to go up. This is why I believe it's going to go up. And the person on the other side selling the stock doesn't have access to material non public information. And so when you start to erode trust in the markets, essentially what happens is people decide, I'm not going to play this game, I'm not going to invest in the markets. What does that mean? It means companies don't have access to capital. It means it's much more difficult to save money for your retirement. It means if you work for a company that is compensating many of its employees through stock options, they don't get nearly as wealthy. In some, it punctures what is one of the modern marvels of our economy, and that is the financial services industry, where we're able to access capital from all over the world, thereby making our ability to borrow money and grow faster, less expensive. Giving people the opportunity to participate in the prosperity and incredible growth of these amazing companies, even if they don't know anybody at Google or at Dow Chemical. So all of this sort of insider trading and grift, it has an absolutely devastating effect over the middle and the long term. And that is our pools of capital dry up, people just aren't willing to participate and the cost of borrowing goes up. Everything gets harder for companies. People have fewer options to build wealth. And it just creates a level of distrust where people are cynical about the government, about institutions. And when you have this happening at the highest levels and they're just totally immune from prosecution, which I'm not sure they are, but they clearly believe they are. It basically, it's almost as if somebody said between tariffs, insider trading and the grift of the Trump family, it's as if there was this incredibly deft strategy to say, how can we reduce the prosperity as quickly and as severely and as structurally as possible in the U.S. it's like I almost sort of admire it. It feels like the most elegant way to take an economy and a nation down, kind of drip by drip.
- [16:30]
Jessica Charlev
It feels that way to me as well. But I'm wondering when the moment will be where the plan is revealed. Because we have all of these theories, right. But we're also trying to apply some degree of logic to it and it feels like there has to be some illogical foundation actually, because they're taking us so off course of what you would expect because there is a world in which, you know, Trump got elected, it wasn't this massive mandate, but he certainly got elected one all seven swing states, etc. There was a good amount of goodwill coming into this. People were enthusiastic. He had new voters coming to the coalition, Latino men, more black men, more women. Right. The red arrows all over the country are going in the upward direction, the blue arrows going in the downward direction for the Democrats. So he could have taken that as a moment to come together and to win on these things. And you take normal economic policy, you want to judge it a little bit and add in some tariffs. I understand that we have protection as Democrats that are into these kinds of things, but he's clearly tried to go in the villain direction. And do you think we'll ever actually understand the total plot line here or they're going to go out of office in 2028 and we will never really know why certain decisions were actually being made.
- [17:47]
Scott Galloway
Oh, I think we know everything. Reverse engineers to how do I become the richest man in the world? I think that's his.
- [17:53]
Jessica Charlev
But why hurt people? No, that part I understand, but that he wants to hurt so many average people, people who have supported him enthusiastically is what I don't understand.
- [18:05]
Scott Galloway
I think it's indifference. I think he. I just.
- [18:08]
Jessica Charlev
So it's just the cruelty is the point and it doesn't matter. If you're in my way en route to getting richer, then I don't care.
- [18:15]
Scott Galloway
I don't think, and I might be wrong here, but I don't think he's a sadist. I think he's just a narcissist. I don't think he wakes up and thinks, I can't wait to shut down a hospital, a food kitchen in Ukraine in a war torn area. I don't. I think he just thinks, oh, we can save some money there. I don't care about these People in these shithole countries. I don't care about 7 or 8 million people losing their insurance. I don't think he wakes up and thinks, I can't wait to do it. I think he's just totally indifferent. And his total focus is, okay, I'll threaten this tariff against Vietnam. And then what do you know? They've announced a one and a half billion dollar golf course and he's scaling back on it. And something you'd said earlier, you constantly hear people say, it's like that scene from Wall street where Martin Sheen. Is it Martin Sheen, the kid?
- [18:57]
Jessica Charlev
Who's Charlie Sheen?
- [18:57]
Scott Galloway
Charlie Sheen, sorry. Charlie Sheen says to Michael Douglas, Gordon Gekko, how many, you know, how many yachts do you need to water ski behind? And I have known and do know a lot of billionaires. And what people don't realize is that there's this total act. They get in front of a crowd and say, you know, I never really thought about money. I just wanted to build something great. That's just bragging. That's saying, I'm so fucking talented that money just rained on me because I'm so amazing at what I do. To a T. Pretty much every rich person I have met, really wealthy person, and I suffer from this. They're fucking obsessed with money. Obsessed with it. And in a capitalist society, every point of light and incentive is to become obsessed with it. Because the more money you get, the more rights you get, the more opportunity for your children. The largest election set of mates. The more political influence you have, the more status. So that number, if it goes up 1%, you have 1% more worth as a human. In a capitalist society, at least that's all the signals are telling you. In addition, to be really good at money, you have to be thinking about it all the goddamn time. And that's what I talk about on our other show, Property Markets. If you're serious about economic security, I hate to say this, and it's not fun. You gotta be thinking about money a lot. You gotta be thinking about this new tax package. How does it impact you? Should you be acting on certain things? How will SALT impact you? Should you be thinking about buying rental property? Should you be thinking about putting money into a truck? I spend four to eight hours a week doing nothing but managing and thinking about taxes. My money, my investments. Because there are so many laws. The tax code gone from 400 pages to 4,000, and those incremental 3,600 pages are there have been constructed to help people who have some money and think about money. All the time. Because it's essentially a maze that, if you understand it, you get to wealth, whereas other people run into walls. And so this is what happens. You meet someone who has 1 billion, then 3 billion, then 5 billion, and they're still working their ass off, sometimes at the cost of their own health and their own relationships. And they maintain that obsession with money, and it's never enough until what I have found, sometimes the thing that does in fact slow them down is a health scare of either them or somebody they love. But until that point, this notion that don't you have enough money? No, people never have enough money because the reason they're there, the reason they're billionaires to begin with, is they think about money all the time and they've gotten huge reward. And they never get off that hamster wheel, these people. Never. The notion that Donald Trump isn't gonna take his last breath trying to get from 3 billion to 5 million to 7 billion. No, that's all he cares about. This is his worth. This is his total value system.
- [21:42]
Jessica Charlev
It seems like such a squandered opportunity.
- [21:45]
Scott Galloway
It is.
- [21:45]
Jessica Charlev
I mean, when you look at what he could achieve, and I do know that the Peace Prize is on his mind, he thinks he should have gotten it for the Abraham Accords from the first administration. And they're looking for an expanded Abraham Accords in the second administration. They're are so many more people who are open to Donald Trump being even remotely decent at this job that I look at it as just depressing, frankly, that he is not taking, like, an easy ramp with any of this, with any of the court decisions. I mean, it's staggering. And Mark Elias told us months ago, he said the courts are going to be what saves us. It looks like that's what's saving us, at least from economic ruin at this point. 96% of the court rulings in the last month have gone against the Trump administration. So that's 90 cases. And district courts have blocked him. 73 judges across seven presidents in 25 districts across 10 circuits. So basically, everybody who has been appointed and is still alive, Republican or Democrat, is saying no to him. And this is, you know, not just about tariffs. This is about what he's doing on immigration. This is restoring as many of the Doge cuts as they can. We're going to talk about Musk in the next section. But they are hitting brick wall after brick wall after brick wall, and they're not stupid people. I mean, there are a lot of really smart folks that have been in or around the Trump administration. And they just seem hell bent, I guess, on money first and not caring about the prestige of it, because world leaders would be happy to have him, at least to his face, if he was going to behave in any sort of normal fashion.
- [23:25]
Scott Galloway
But the incentive system is such that it encourages them to, quote, unquote, break the law. And if it's found they are in fact breaking the law or don't have the license to do what they're doing, what's the downside? They just say oops. And they even maybe accomplish some of it along the way. Oh, you, you served congressional authority illegally. Well, guess what? All those hospitals in that usa, it's all gone, it's closed. We're not going to rebuild it. Oh, we laid off a third of people at, you know, the epa. Well, they're gone, they're not coming back. Even if it was found that you didn't do it legally, it's similar to what's happened with Big Tech, that the incentives are, if you had a parking meter outside of your house that costs $100 an hour and the ticket was 25 cents, I mean, what happens, okay, they have to stop, but they're not being punished. So all of the incentives are just go at it, be brazen, do whatever the fuck you want. And if the courts tell you to stop, okay, maybe you have to stop. But guess what? The majority of the damage, the majority of the objective has already been accomplished. And what we're referring to here specifically is the International Emergency Economic powers Act of 1977. The IEEPA that rolls right off the tongue has never been invoked by a president to impose import tariffs before until now. So essentially it's meant to be kind of a wartime or something you invoke in a time of extreme, extreme threat. And essentially these courts are saying, no, this really doesn't qualify. Trump has imposed select tariffs on steel, aluminum, and cars and car parts under this Section 232 authority. In March, Trump imposed a 25% tariff on steel imports under this authority. But during a visit to a U.S. steel facility in Pennsylvania last Friday, the President indicated that he might be doubling this to 50%, which means he has no fucking understanding of economics. Because everything from steel to furniture will go up in price because our domestic manufacturers will have this incredible gap or pricing power such that they can start charging non market rates for their steel because people can't access foreign steel anyways. The courts are basically saying, okay, you can't do this. But my question is, why wouldn't they Continue doing this. What's the downside side? They don't get fines, they don't go to jail. They get most of what they want. They get to, you know, cosplay, far right wing leadership, promises made, promises kept. And if they have to turn back on it, okay, well the lawyer said we have to do it, so we'll do it. But they still get the majority of the credit for it. What is the disincentive here?
- [25:49]
Jessica Charlev
Well, everyone hates you so.
- [25:51]
Scott Galloway
Or loves you. A lot of people love this.
- [25:54]
Jessica Charlev
I mean, not in the polling. So he is negative 16 in terms of handling the economy, negative 26 on tariffs, negative 32 on inflation and cost of living. A majority of Americans say that he doesn't know what he's doing. You know, we had that moment where we weren't seeing Navarro and Lutnick on TV that much. That was peace time. Right. That was after the Wall Street Journal piece about how Scott Besant slipped into the Oval Office when he saw Navarro going out the other door and said, you have to take these retaliatory tariffs off. I mean this is like 50 trade wars ago. But we had this moment where they weren't around that much. Now they're back on the Sunday shows, they're back in prime time and they've clearly got the reins of this. Besson is complaining that China is withholding some things that we need. Well, of course they're fucking withholding things. You think that they're just going to sit there and take it from us? You know, China has a hundred year plan, 200, 300, 400 year plan. They can wait this out as long as they possibly want.
- [26:52]
Scott Galloway
Yeah.
- [26:52]
Jessica Charlev
And frankly they're enjoying watching us suffer this way. So the eu, they're preparing for counterterroriffs against us right there, said by July 14th we're going to put these in place. If you go up to 50% on steel and aluminum. And there is going to be a lot of suffering from those of us who make $50,000 or less up to the CEOs of Walmart and Jeff Bezos who are all speaking out about these kinds of things. So I think that part of it does matter. The second thing that should matter, but I'm not confident that it does to these folks, is that there are elections that are going to come and people are going to vote on the economy. And historically speaking, the party that's out of should do well in the midterm. So that means that it could be a bit of a mirage if Democrats do well. But My question back to you about 2028 at least. Do you think they're even thinking about wanting to keep power, continue to consolidate power going forward? Or they're just saying this is a four year bonanza, let's get as rich as possible as quickly as possible. And we're not real Republicans anyway. I mean, when you look at Trump criticizing Leonard Leo, who got him all three of his Supreme Court appointments, really solidified his legacy. The guy who runs the Federalist Society, you think they're not ideologues anyway, so what does any of this matter in terms of electoral consequences?
- [28:13]
Scott Galloway
Yeah, I don't think they care. I think it's a chance for them. So you have the Republican Party's gone full maga and Trump appears to have the power to primary them and boot them out of office. And then the people in its closest inner circle are just making a shit ton of money. He's going to be dead in 10 years. So does he really care about the structural decline of the US or the debt that young people are going to have to pay back? And also the glass half empty part of me is that in the thing that I find most upsetting and maybe it's not true, I think that the corporate elitists have defined the Democratic Party where they rail against income inequality as they fly to their campaign events in private jets and go from a net worth of 1 million to 11 million as senators, that Americans are angry Democrats. And they see so much prosperity in the US and similar to the way William Gibson described the future, it's here, prosperity is here. It's just not evenly distributed. And then with social media where they spend the majority of their days, they see two things. This chocolate and peanut butter are more really this nitroglycerin of exceptional coarseness and algorithms pitting people against each other. You know that your enemy is not Russian troops pouring over the border in Ukraine. It's not people who are the Islamic Republic who has an apartheid against women. Your enemy is your neighbor who supports Trump or supports Harris. That these algorithms have an economic incentive in figuring out a way for you to hate other Americans. And then so much wealth porn is rubbed in their face that if you're one of the 40% of American households that can't even afford to get a crown or has to borrow money such that your wife can have an emergency appendectomy and you're in debt, you're working hard, you're trying hard, and all you see every fucking day is really elegant incentive to be angry at your Neighbor and to feel as if everyone around me is doing well but me. I think it creates a level of harshness and coarseness where quite frankly, you want a blood offering. You don't mind hearing about these elitist jerks at Harvard getting fired or international students having to return home. Or maybe, yeah, it's sad some of the people who are suffering overseas, but I can't afford to get dental work and I'm supposed to be worried about a hospital closing down in Rwanda. I do think there's just this very unfortunate acid running through the veins of Americans right now. You know, I'd like to think that we're better than this and America's better than this and they're going to gag on this harshness, this cruelty and this coarseness. But deep down I worry that this is a lot of Americans expressing their anger and their frustration and quite frankly their hatred that has been fomented by social media algorithms that have an economic incentive in fomenting rage and hate. God, that's ugly.
- [31:12]
Jessica Charlev
No, but it's accurate. And it's just on top of how ugly and sad it is. It is then extra sad to me that it's Democrats that bear the brunt of it.
- [31:22]
Scott Galloway
He'd still win as of last week. He'd still win, right? The election.
- [31:26]
Jessica Charlev
Yeah. I mean now we're up like 9 on the generic ballot. There was one pollster who had it that Harris would win, but generally speaking, yeah, I still think that. Cuz he's directionally going where people wanted to go. And we have yet to put out.
- [31:38]
Scott Galloway
A platform to respond.
- [31:41]
Jessica Charlev
You know, what's your three point plan? You know, we're going to talk about the reconciliation bill, but like, where's our version of the bill? That would be the easiest thing to not just say they're doing all these things wrong. This is how we would do it better. These are where our cost savings would come from. These are the programs.
- [31:56]
Scott Galloway
We're preserving our budget proposal 100%.
- [31:58]
Jessica Charlev
Exactly. It's like you pay staffers and you make them work miserable hours anyway. So have them work on this. That I would fully support that if that's how they spend their time. You just have a team that's going to say that our own, everything that they're going to do, we're going to do better. And that's how you spend your time. And then when you go to run in 2026 and 2028, you can say, this is our work product. This is how much better off the country would have been if we had been the ones in charge. And it's strange because we talk to so many politicians and, and smart political minds and I feel like we bring this up constantly and they say, oh, that's a great idea, right? Or we have X, Y or Z things. And I say, I never have something in my hand, right. I don't have something that I can refer to on the five. Right. To say, oh, this is actually what our Doge plan would look like. This is how we would redux the 1990s to today. And so even though they're lying through their teeth, I mean, the Sunday shows was a bevy of, of untruths, lies, all of it from Mike Johnson.
- [33:00]
Scott Galloway
There are no Medicaid cuts in the big beautiful bill.
- [33:04]
Jessica Charlev
We're not cutting Medicaid, Lutnick, etc.
- [33:07]
Scott Galloway
That's crazy.
- [33:08]
Jessica Charlev
Lying with impunity. Lying to your face, lying straight into the camera, all of it.
- [33:12]
Scott Galloway
So what's going to happen is we're going to take that up to higher courts.
- [33:15]
Jessica Charlev
The President's going to win like he always does.
- [33:18]
Scott Galloway
But rest assured, tariffs are not going away.
- [33:22]
Jessica Charlev
And still no one walked away with anything from the Sunday roundup in the positive direction for Democrats. Right? They didn't say, oh, this was a really powerful message or this really sunk in, or I know what the Democrats stand for, etc. And you know, CNN released this poll. They asked which party is the party with strong leaders. Republicans 40%, Democrats 16%, neither at 43% but still 40% to 16%. And then which party can get things done. Now keep in mind that this is the most ineffective Congress in terms of passing things that has ever existed. Right? With Republicans in charge of everything and the Republicans still at 36% and US at 19% and then 44% neither. So everyone's fed up, up with both parties. But if they got a pick and it's a binary choice, they're picking them.
- [34:12]
Scott Galloway
All right, let's take a quick break. Stay with us. When we come back, we're going to talk about the Senate taking up the House passed budget reconciliation bill. Stay with us. Support for the show comes from ExpressVPN. Just like how in nature documentaries the wild predators aim for the slowest prey. Hackers target people with the weak, weak as security. And if you're not using ExpressVPN, that could be you. We often overlook how vulnerable our Internet connection is. Every time you connect to an unencrypted network in CAFES, hotels, airports, etc. Your online data is not secure. Any hacker on the same network can gain access to and steal your personal data. And it doesn't take much technical knowledge to do that. Just some cheap hardware is needed. But ExpressVPN stops hackers from stealing your data by creating creating a secure encrypted tunnel between your device and the Internet. It's easy to use and works on all of your devices, phones, laptops, tablets, and more. That means you can stay secure on the go. This is the Ad Lib section. I love ExpressVPN because it does offer me greater security. I've been actually an ExpressVPN user for, gosh, the better part of a decade. Secure your online data today by visiting expressvpn.com that's E X P-R-E-S-S vpn.com moderates to find out how you can get up to four extra months free. Expressvpn.com moderates craftsman days are here at Lowe's with big savings on the tools you need. Save 100 on the Craftsman V26 Tool Power Tool Combo Kit now at $199. No matter what the project is, Craftsman's high quality, high performance products empower you to build on. Stop by your nearest Lowe's store and check out the full line of Craftsman tools today, valid through 618 while supplies last selection varies by location. This week on Profit G Markets, we speak with Aswath Demoderan, professor of Finance at NYU's Stern School of Business. He shares his take take on the recent tariff turmoil and what he's watching as we head into second quarter earnings. This is going to be a contest between market resilience and economic resilience as to whether in fact the markets are overestimating the resilience of the economy. And that's what the actual numbers are going to deliver is maybe the economy and markets are a lot more resilient than we gave them credit for, in which case we'll come out of this year just like we came out of 2020 and 2022 with much less damage than we thought would be created. You can find that conversation exclusively on the Prof. G Markets feed. All right, Jess, welcome back. This week the Senate is taking up the House passed budget reconciliation bill and Senate Republicans have already indicated they'll look to make a number of changes. First, they'll have to contend with the rules of reconciliation where anything that's not related to mandatory spending is stripped out. Some Republican senators, including Josh Hawley, have already said they'll look to remove cuts to Medicaid, but Spending hardliners, including senators who accept Scott and Ron Johnson, have vowed to seek even more drastic cuts. Jess, what do we expect to happen this week and what will become of this big, beautiful bill?
- [37:30]
Jessica Charlev
It's not looking great for the big beautiful bill. You have opposition from all corners of the Republican Party for a host of reasons you already talked about. You know, some people actually care about Medicaid like Josh Hawley and Susan Collins. Then people are saying there are no cuts here. We know that it balloons the deficit no matter what Mike Johnson wants to say about the CBO scoring. I love how the CBO is totally right when a Democrat's in power, but as soon as a Republican comes into power, it's a Democrat run organization that doesn't know how to count. But I've kind of bucketed the four main reasons that folks are opposing this bill. So you have Medicaid cuts, ballooning the deficit, raising the debt ceiling. Rand Paul is hot on that one. And then also an end to the energy tax cuts. And that was one that I wasn't expecting to see. You have Thom Tillis, who's up for reelection in North Carolina, talking about that and Lisa Murkowski from Alaska. So these are tax credits that came into play because of the Inflation Reduction Act. So something that the Democrats got passed. And they said that businesses in their home states are going to be dramatically hurt and probably go out of business if we get rid of those energy tax cuts. I should note as well. And we'll talk about Musk's farewell tour. But Tesla has been rage tweeting about the cuts, the energy energy tax cuts going away as well, saying that we're going to lose our energy independence and that the grid won't be able to hold up if we get rid of them as well. So that was the kind of left field objection to the bill that I wasn't waiting for. And then a few people have said it's sad when people lose nutritional assistance, but they can still plow on with that.
- [39:07]
Scott Galloway
Yeah, I love your idea. I think that absolutely the right strategy would have been for a group of Democratic representatives to get together and propose their own bill and basically use it as a means of proxy for comparing and contrasting. And I think the big opportunity for Democrats right now is to kind of usurp the pole position that Republicans are used to owning. And that is where the adults in the room fiscally and propose over the next 20 or 30 years raising the age on Social Security, having it means tested, talking about maintaining or holding flat military spending the one I really like that I've been exploring, what do you want in a tax? You want something that is the least taxing tax, right? And the one I'm zeroing in on that I think it's a big opportunity that we're not talking enough about is to basically zero out or reduce the exemption on all inheritance tax. And right now they're talking about increasing it, I think, from 26 million to 30 million. Meaning that you and your husband could combine, put $30 million of assets into a trust and then that can grow and you're young, say you live another 50 years, say that goes up four, eight fold. You could feasibly have 100 to 200 million dollars pass through to the next generation tax free. And I think that similar to what they do in the UK and other nations, I think they should lower the exemption or the ceiling to a million. And the reason why I like that is there's about $120 trillion in wealth that's going to be passed on to the next generation in the next 30 or 50 years. And a lot of it is going to be passed on tax free. And I think it should be taxed and I think they should raise it from 40% to 50 or 60%. Now why is that? It would raise a great deal of revenue. And two, it doesn't come at a very big cost. Say you're really fortunate, economically blessed and you can pass on $10 million in wealth to your kids. Having no exemption and a 40 or 50% tax means they get 5 million versus 10 million. And what Daniel Kahneman and a lot of psychologists have determined that above a certain amount of money, your kids really don't benefit. So the difference between them getting 100,000 and a million, there's a difference, right? That's the difference between them being able to buy a house and their kids too. That does increase their happiness, their privilege. But the difference between having 5 or 6 million and 8 or 10 million for kids, I know a lot of rich kids, they are no happier. I think they're happier than poor kids, but I don't know if they're happier than wealthy kids. And I think this is something we could really generate a lot of sustainable, predictable additional tax revenues from. That would slowly but surely the bond market would love and take down interest rates, which would lower costs for all Americans. Means testing Social Security, make hard decisions around Medicaid, increase alternative minimum tax for corporations, many of whom don't pay any taxes at all, have a multinational agreement of a 30% not 15%, but 30% alternative minimum tax on corporations, which, by the way, would not take it even back to what has been historically the averages. Corporations are now paying the lowest taxes since 1929. And you couldn't go much further than that because you don't want to put the economy into a coma. But if you took the deficit each year from 2 billion, then to 1.6, then to 1.4, and said in 8 to 12 years, we're going to have neutrality and we're going to grow such that our debt to GDP goes from 140% down below 100%, you would see interest rates come down and sort of the positioning is, we're the adults in the room. Are we going to have to raise taxes or cut spending? The answer is yes, and it's time for us to be adults for our children. I think that is a positioning that is so naked, that is so wide open that no politician has the stones to try and occupy. They're either hardcore fiscal conservatives that want to cut funding for SNAP, or they're Democrats that never, ever want to contemplate cutting spending at all. And everybody agrees to maintain defense spending, and everybody agrees. I love that negative 40 term, that Fahrenheit and Celsius meet at negative 40. That's a fairly inhospitable place to meet. And where the far left and the far right meet at 40 is around anti vaccination, around antisemitism, and around just fiscal irresponsibility. But I like your idea. I think the Democrats should pull together a proposal, enforce that proposal. The media would love it. The media would compare the budget proposal from the Republicans and the budget proposal from this group of Democrats. It would have no hopes of passing. But people would say, the Democrats are the leaders here. They're the ones that are actually making hard decisions and being fiscal adults here. They're the ones managing the government the same way I have to manage my own goddamn household. Anyways, what are your thoughts? Democrats put forward a fairly sober bill that pisses off everybody.
- [44:01]
Jessica Charlev
I love it. I love to aggravate people. And what you were laying out makes a lot of sense to me. And I would just add to it that I think it would be very effective to benchmark it to points in history. I like that people do that often with the 90s. Right. Because everyone liked the Clinton years, financially speaking. And you just say, how did 1993 feel to you? This is where we were right anytime. You could even go back if it was a Republican that was in charge. I don't care. This doesn't have to be partisan, but you just say you were living good, your parents were living good, your grand whatever it was. And I think that people need something more that they can hold on to. All of this feels too amorphous, like we're just spewing out into the ether, right. And none of it makes sense because they need to see the brass tax of it. And so I really like the idea of being able to paint a full picture like what your life looked like in X year or what your parents life looks like in X year. And you can tack that directly to being able to achieve the American dream again, which is what Rahm Emanuel was talking about when he was on the podcast last week. There are a couple things I just wanted to add that would be smart fixes or ways that Democrats could push back. And I mean what the Republicans are doing and how irresponsible it is, is they're using the guise of these very popular policies like no tax on tips, right. Or no tax on overtime. And first of all, they're only doing it for a few years, which surprised me in the bill. But what they do that Democrats don't do is they don't limit it in terms of what you're earning. And we talked about this before that like a hedge fund manager will be able to use no tax on tips or corporate lawyer will be able to use no tax on overtime. And that should be pretty clear messaging coming from the left where you just say there is no reason that someone is who's earning millions of dollars needs to benefit from this policy and so you could save money that way. I also think that the argument that they are making about Medicaid work requirements requires so much more forceful pushback with the exact numbers and the explanations of what's going on here because a work requirements don't work. So they tried this in Arkansas in a super conservative state in 2018. All it did was lead to 18,000 people not having their insurance. There were not extra people that were working as a result of it. And it's also a complete farce that people are just mooching off of the system. So 92% who receive Medicaid are either working full or part time, caregiving, have a disability or in school. So basically the program is working as it's supposed to. And what they're trying to trick us into thinking or pawn off, and Mike Johnson was doing this in his Sunday show interviews, is they want to make us think that this is millions of people that are Cheating the system.
- [46:50]
Scott Galloway
We're not cutting Medicaid. What we're doing is strengthening the program. We're reducing fraud, waste and abuse that is rampant in Medicaid to ensure that. That that program is essential for so many people, ensure that it's available for the most vulnerable.
- [47:05]
Jessica Charlev
And to your point about social media and what we think about those around us, they also want us to think that the people who live amongst us are stealing from us because they want to turn us into a. A Hobbesian hellscape. Right where we think that we have to be in a state of war constantly. The war is not on Medicaid recipients. The war is not on the 40% of births in this country that are paid for by that program. The war is with people who think that they need a tax cut when there is no sane world in which they are deserving of it or a world in which people will believe that all they're trying to do is just extend the 2017 tax cut cuts. That's one of the big fake news banners that are blaring across cable news, interviews, podcasts, etc. Well, we're not actually trying to give people more of a tax cut. We're just extending what we already have. And it'll turn into a tax hike if we don't do this. There are poison, extra poison pills in this bill. And the 2017 tax cuts were actually a lot more reasonable than what we're looking at here, which will be the largest transfer of wealth from the poor to the wealthy that we've ever seen in American history.
- [48:13]
Scott Galloway
So you brought up something. You said, do you want to feel like it's 1993 again? So I couldn't help.
- [48:18]
Jessica Charlev
Is 1993 actually not that great?
- [48:20]
Scott Galloway
I was young, I was just out of business school in 93, but I thought, how did I feel in 93? And for any attempt to understand the sensation of happiness or an emotion, I go to movies. These are the top grossing domestic box Office Films in 1993. Number one, Jurassic Park. I don't know if it's a warning about AI. I think it's one of Spielberg's lesser efforts. By the way, Jeff Goldblum has been in like four of the ten top grossing films. The Fugitive. Great film. Great film.
- [48:45]
Jessica Charlev
I don't have we. Well, I already have talked about how much I love Chicago, but the Fugitive is my number one. If it's on, I watch it movie, no matter what.
- [48:53]
Scott Galloway
And Chicago, the Broadway plague turned movie.
- [48:57]
Jessica Charlev
No, I love the city of Chicago.
- [48:59]
Scott Galloway
Oh, okay.
- [48:59]
Jessica Charlev
Where the Fugitive is based.
- [49:01]
Scott Galloway
I can totally see that. I can totally see you in Chicago. The firm, basically. Tom Cruise figures out being a lawyer sucks. Sleepless in Seattle. I just didn't buy either of them having sex together. I didn't get that.
- [49:13]
Jessica Charlev
Why?
- [49:13]
Scott Galloway
Oh, God, Billy Crystal's so unattractive.
- [49:16]
Jessica Charlev
That's not Sleepless in Seattle. That's Tom Hanks.
- [49:18]
Scott Galloway
Oh, he's hot. I get it. I take it back.
- [49:20]
Jessica Charlev
Also, you always say it's about the humor. That's why you sleep with Billy Crystal.
- [49:25]
Scott Galloway
Yeah, that's a fair point, Mrs. Doubtfire. Gender affirmation. I'm totally against it.
- [49:30]
Jessica Charlev
This is, like, the best year ever.
- [49:32]
Scott Galloway
I'm totally against it.
- [49:33]
Jessica Charlev
A. Come on, Scott.
- [49:34]
Scott Galloway
Indecent Proposal. Robert Redford pays a woman much younger to sleep with him. That's called New York. Just call it New York. In the Line of Fire. That was good. John Malovich is an assassin. Clint Eastwood. That was a great film. Aladdin. Didn't see it. Cliffhanger.
- [49:48]
Jessica Charlev
What?
- [49:48]
Scott Galloway
Stupid. A Few Good Men. That was a great film.
- [49:51]
Jessica Charlev
Yeah.
- [49:51]
Scott Galloway
Free Willy. Oh, God. Groundhog Day. Funny.
- [49:55]
Jessica Charlev
Oh, amazing. Classic Dave. Oh, like one of the best president movies of all time.
- [50:01]
Scott Galloway
The best movie of the year. It was actually the 15th top grossing film. Scent of a Woman. Did you see Scent of a Woman, Jess?
- [50:09]
Jessica Charlev
Years and years ago.
- [50:10]
Scott Galloway
Al Pacino. Philip Seymour Hoffman's first film, I think.
- [50:13]
Jessica Charlev
Anyways, R.I.P.
- [50:14]
Scott Galloway
That was 1993. Okay, back to our regular scheduled program here.
- [50:17]
Jessica Charlev
But that seems good, right? I know you had a lot of criticism, but, like, it was a mediocre.
- [50:22]
Scott Galloway
Year for movies, but, yeah, that's okay. All right, let's move on here. Speaking of. Of, I don't know, art becoming reality. Before Elon Musk's farewell ceremony last Friday even, he criticized the budget for increasing the deficit, saying a bill could be either big or beautiful, but not both. House Republicans are said to be waiting on the White House for details for a rescissions bill which would formally claw back some of the discretionary funds that Doge determined to be wasteful. Is Elon's departure an important moment at all, or is this just smoke and mirrors?
- [50:54]
Jessica Charlev
Just a little bit of both. I think what will be more important is what the lessons of this are. So I'm not into you, Maya. Culping or admitting that perhaps you misread things. You know, he comes out and he says, the big, beautiful bill is a crock afterwards. And he says, I'm stuck in a bind where I don't want to speak up against the administration, but I Also don't want to take responsibility for everything. This administration, well, you didn't have to do it, right? You're the richest man in the world. You didn't have to have this sideshow. You could have just stayed at Tesla and gone about your Neuralink business and your Starlink business, and everyone pretty much would have still liked you. But the Doge master Musk is representative of something very important culturally for the Trump administration. The younger men are obsessed with him. Hardcore conservatives, like a Ron DeSantis, for instance, think that he did a great job in identifying the waste, fraud and abuse, even though he only found 175 billion and had promised us 2 trillion. But what happened is that the conservatives in the reconciliation bill are only codifying $9 billion of savings that Musk had identified. And so there's a lot of conservative criticism, actually, of what the administration is doing, and representatives in Congress and in Senate versus Musk. So he's still a little bit of a hero in all of this. But people have been asking, like, what will the legacy be of Musk in government? And I think that there's kind of two parts to it. One that you can just buy an election, right? I forget the exact amount, 284 million, something like that, that he donated to Trump that got him elected. So that's part of it. And we know about that from Citizens United. But if he actually ended up having such a small monetary effect, it actually had outsized impact in these cuts to USAID. So 80% of USAID grants were cut. And a global health professor at BU has estimated that these cuts have already resulted in about 300,000 deaths and that it will get up into the millions. Because guess what? Food and medicine are things that you need right away. These aren't things that you're waiting for. And I really hope that people don't get lost in the theater of what Musk meant in the government. They don't talk about big balls or the team of kids that he had running roughshod through our systems, but understand that the richest man in the world came in and he cut off food and medical assistance to kids in Africa.
- [53:26]
Scott Galloway
Yeah, I think he'll go down. I think in 50 or 100 years, he'll be seen as sort of similar to the way we view Charles Lindbergh, this incredible person of incredible achievement who ended up on the wrong side of history and just made very bad decisions in terms of who he supported and where he felt the direction of America should go. And it's sort of, I think, Elon Musk sort of embodies everything that's really gone awry about America. You know, the wealthiest man in the world is now killing the poorest children in the world and has saved $9 billion while doing tremendous damage. And we would could save more if we just cut subsidies to Tesla and then takes to Twitter and has the gumption to rail against a proposed cut to the subsidies for his companies, by the way, which Tesla would be unprofitable if it wasn't for their ability to sell their carbon tax credits. So the hypocrisy. Also, some of the reporting the New York Times has done about what appears to be just rampant drug abuse.
- [54:25]
Jessica Charlev
The ketamine.
- [54:26]
Scott Galloway
Yeah, well, amongst other things. And it just got me thinking that there's so much interesting research coming out about the fact that there's this trope, and I think a lot about relationships and young men. And there's this trope that young women are really the losers and that they're the ones that are desperate to find a husband and have kids. And almost all the research recently is pointing in the same direction, and that is, relationships are more important or romantic, monogamous relationship is more important and more beneficial for the man than the woman. That widows are happier after the dude dies than when they were married, whereas widowers are much less happy after their wife dies. And that a man by the age of 30 who hasn't cohabitated or been married has a 1 in 3 chance of becoming a substance abuser. And that when men don't have a romantic relationship, they pour that additional energy into porn and video games and conspiracy theory and a worship of strongmen. When women don't have that, they pour that additional energy back into their social networks, their friend networks, and their professional lives. But there really is a decent amount of evidence showing that this loneliness crisis, some of it is just simply that women are waking up to the fact, especially as they become more economically secure, that traditional heteronormative relationship just isn't as good for the woman as it is for the man. And I think young men really need guardrails. And without the guardrail of a romantic relationship, men come off the tracks. And I think this is true of Elon Musk. And this is a guy that has absolutely no relationships as guardrails, sleeps with a loaded gun next to his bed, and is massively abusing drugs. And yet this is the person deciding if kids and veterans should get SNAP or benefit payments. It just sort of embodies what America is. And we decide to put him in this position, despite the fact that he's probably the least qualified person for this position, given his mental state and his drug abuse. And why do we do it? Because we have conflated money with character and insight. And the world's wealthiest man must have insight and character around any decision, even if he is totally unqualified and is exactly the wrong person to be making these decisions. But I see this. What's come out about him and the reporting is fantastic in the New York Times, is evidence that men really need to, even more so than women really need to seek and invest in deep, meaningful relationships. Because without those guardrails, especially young men, quite frankly, just come off the rails. And I think this guy, because he has so much power, we like to think there's credibility there because he has so much money, because his companies are so credible. This guy has come totally off the fucking rails. Totally off the rails. Your thoughts?
- [57:07]
Jessica Charlev
I agree with it. And I think there are a number of reasons that it's not a good thing that people are pushing getting married and having kids later and later in life, not only leading to an uptick in fertility issues, just based on biology and than us having less kids and we have a global population problem. But you're spending more time by yourself when your life could be enhanced by being with somebody else. And the amount of people that talk about that, looking back in retrospect. Right. Like the way that they behave when they were young. If only I had just met the right person. I happen to believe I'm very happy with the husband that I ended up with. But there are multiple people that you can have a fantastic life with. So I hope that more people are on the lookout for someone to journey with. On the Elon front, he does seem like he's come completely off the rails. I still have a ton of respect and reverence for what he has created or been a part of. You know, every story that you hear about what Neuralink has done when you see the effects of Starlink. I was in Best Buy over the weekend and we were looking at Starlink. I was like, this is pretty fucking amazing, right? That you can have this in your house for $400 now. Yeah. What a product. And I'm glad the government was working with Starling for North Carolina, for instance. But Starling saves the day in those kinds of circumstances. But it does seem like he's losing it. And one thing that he did that was particularly upsetting to me is he was asked a question about the report in the New York times about the drug abuse. And he said, oh, the same New York Times that won a Pulitzer for their fake Russia reporting. Next question. And that has become so mainstreamed and so normal to diminish good journalism, push it aside and act like it never happened. All of the hoaxes. And every defender of Donald Trump can rattle off, you know, 10, 15 hoaxes or what they see as hoaxes. That therefore invalidates any negative criticism of the president or those in his orbit. That we have an American populace who believes nothing and nobody. And that's really dangerous for us as a society.
- [59:19]
Scott Galloway
We'll take one more quick break. Stay with us. Welcome back. Before we go, another ruling by a federal judge last week blocked the Trump administration from changing rules around Harvard's admission of international students. For now, at least, it's the latest flashpoint in an escalating war between Trump and the elite university and other elite universities. Harvard's already suing the administration over a 2.2 billion freeze in federal funds, which the White House tied to demands including scrapping DEI programs, banning massive protests and shifting to merit only admissions. Trump even floated the idea of capping foreign student enrollment at 15%. Jess, do you think this is really about visas or is it a broader attempt to redefine what higher education should be be?
- [60:04]
Jessica Charlev
It's definitely a broader attempt to redefine what education should be. And this has been going on since day one. They always squander a good opportunity. There's an anti Semitism problem on college campuses. Just stick to the script and work with these campuses to combat that. I can understand wanting to more thoroughly vet visas of Chinese nationals that are tied to the ccp. That makes good sense. Sense to me. Understanding how the Chinese Communist Party works and how many folks are spies for them or want to get educated here, work here, and then they're going to go home and turn over all of our information. All of that makes sense, but they always just have to go too far. And this is going to be another. Well, it's going to be another series of losses in court. We're going to be seeing that. And when the mega showdown in court happens with Robert, her and Bill Burke, Bill Burke, who used to be an advisor to the Trump administration. And now Trump has pushed him out because he's defending Harvard in this. That is going to be like, get your popcorn level. People are going to be watching those opening statements and, and the back and forth there for sure. But this is just going to be a huge economic hit to the country, like the tariffs again. So foreign students bring in $44 billion into our economy on an annual basis. They pay rent, they go to restaurants, they travel. It's also a lot of rich kids, right, that are coming, paying full freight, over 6 billion to California's economy annually, nearly 4 billion to Massachusetts, 2 1/2 billion to the Texas economy. And I don't know if what it's going to take is a bunch of conservative governors showing up and saying, like, what the F are you doing here? You can't go around doing this. For the moment, it seems like the sites are really focused on Harvard. And I don't know if you read Professor Steven Pinker piece in the New York Times where he talks about Trump's Harvard derangement syndrome and that he seems wildly obsessed with Harvard, as many people are, but we're gonna have a huge brain drain. You can already see in the searches for PhD programs in the US that is plummeting. There was a look at scientists coming from Bangalore in India. They talked to 30 scientists who are looking to be placed. Only one coming to the US Only one of them, right? They're going to take their goods and services elsewhere. They're going to make the rest of the world smarter. They're going to make the rest of the world more profitable. And we are going to fall behind as a result of this, which maybe to our earlier conversation, the administration doesn't care. They can't connect the dots on this, or they just have Harvard derangement syndrome. What do you think?
- [62:48]
Scott Galloway
90% of the funds they're talking about cutting have nothing to do with antisemitism. It's basic cuts to research, which Harvard does an amazing job of. And the end result is the following around the research cuts. If you have someone in your life who's struggling with ms, as I do, they are less likely to find a cure before they die. If you're, you know, thinking about Alzheimer's or dementia, if you're thinking about diabetes treatments getting them less expensive, if you're thinking about investing into technologies that will inspire the next generation of unicorns and create economic growth and jobs for our children, that research and that funding has been the greatest investment in the history of the modern economy. So this does not have anything to do with anti Semitism. It's been an effective steelman or straw man, whatever the right term is, for them to have an excuse to go in with this overcorrection. It's more about tickling the sensors of the far right who hates Harvard, and also creating a distraction from this tax bill. Which I think is a much bigger deal. It'll impact many more people. You know, just some basic stats here. And I do think this is going to be swept away. The problem is the best and brightest are no longer going to want to come to the U.S. is that true? I still think they will, just not in the same volume. But 20% of the NASDAQ by market cap is not only run by immigrants, it's run by Indian immigrants. Just immigrants from one country are responsible for one fifth of the Nasdaq. Over half of all unicorns in the United States were founded by at least one immigrant. A third of November Nobel Prize winners are immigrants. And your number 44 billion is the right number. And just to give you some context for that, the money we make selling our movies and TV shows abroad, of which we are the best in the world, is 40 billion. So arguably one of the biggest exports we have is selling elite education to people overseas. And Xi Jinping and his rival in China don't agree on much, but they both agreed they should send their kids to Harvard. So this again is the Democrats as embodied by Harvard, which is sort of the Mecca of the Democratic Party, you could argue. In some ways, both good and bad, in my opinion, really made themselves vulnerable. And then there's this overreach and an excuse to go in and try and dismantle higher education or what they see as the center of wokeness or whatever you want to call it, and really damage our country structurally. I don't think it's going to hold. I think the courts are going to swat this away. The damage is that we get the number one draft choice every year from every nation in the world. The best and brightest all have one thing in common, and that is they want to move to America. And the richest people in the world all. See, the biggest luxury item in the world is not to go to Sanofa Fushi in the Maldives or buy an Hermes Thai or hang out at the French Open or whatever. It's to send their kids to an elite university that is the premier luxury item. There is no product in the world that you can charge $288,000 a year, which is four years of NYU tuition and we get about 95 points of gross margin. It is just not expensive to educate that student in terms of gross of incremental costs. There is no product in the world that has those margins at that price point. And the fact that these kids are now going to decide to go to Cambridge or some of the other great universities that are coming up. It's also going to give those universities more mojo to make big investments and start recruiting some of our best researchers.
- [66:13]
Jessica Charlev
They'll say, we have a lab waiting for you.
- [66:15]
Scott Galloway
Oh, yeah, come here.
- [66:16]
Jessica Charlev
Can I add. Because I really quickly. And then I want to get reaction or if this causes you to update your thinking. So you have the attacks on the universities themselves. And then you have also what's going on with immigration, because people abroad are thinking about that as well, that if There's a Turkish PhD student who can be picked up off the streets of Boston in broad daylight, that I'm not necessarily safe in this country. And I think that those two things working in concert are going to have more of an effect than you perhaps are thinking that they will in terms.
- [66:48]
Scott Galloway
Of discouraging people from.
- [66:50]
Jessica Charlev
From coming here.
- [66:51]
Scott Galloway
Oh, yeah. The most horrific image I've seen. I mean, I've seen a lot of horrific images lately. I saw one wonderful image and that was strategic bombers in Russian airfields being blown up by Ukrainian drones. I watched that video over and over and it just gave me no endless sense of pleasure. But on the exact opposite side, this horrific image of what look like 13 and 14 year old boys in zip ties who are being deported or incarcerated by ICE. Yeah, that's just. It's just so bad for our brand. It calls back to such ugly times in our points in our history. I think it's just a really bad look for us. Just horrible. And again, it just goes back to our primary brand. The best brand association is kind of strength and reach. Generally speaking, you don't fuck with the US both legally, physically, because our memory is long and our reach is far. But that peanut butter and chocolate of that strength is that we're kind of seen as the good guys and we're losing that association. So, yeah, I 100% agree with you. I just don't think. And if they just toned it back, okay, Ice, you don't put anyone under the age of 18 in handcuffs or a zip tie. You just don't do that. We don't do that. I think a lot of Americans want to see these folks, many of these folks deported and they don't even mind some quote, unquote, inefficiency, which is Latin for inhumanity. But it seems like the inhumanity and you've said this, the cruelty is the point. But yeah, I 100% agree with you. All right, that's all for this episode. Thank you for listening to raging moderates. Our producers are David Toledo and Eric Danikis. Our technical director is Drew Burrows. Starting next week, you'll find Raging Moderates every Wednesday and Friday. That's a change. We used to come out every Tuesday and Friday, but now starting next week, we're on Wednesday and Friday. Don't ask me why. I don't know. I don't care. I left my computer on a plane and subscribe to Raging Moderates on its own feed to hear exclusive interviews with sharp political minds you won't hear anywhere else. This week, Jess is speaking with Wesley Morris, the Pulitzer Prize winning critic at the New York Times.
- [68:52]
Jessica Charlev
Speaking of Pulitzers.
- [68:53]
Scott Galloway
There you go.
- [68:54]
Jessica Charlev
Thank you.
- [68:55]
Scott Galloway
I said Pulitzer. It's Pulitzer. Make sure to follow us wherever you get your podcast so you don't miss an episode. Just have a great week.
- [69:01]
Jessica Charlev
You, too.