Rachel Chanfaza (3:13)

Hey guys, it's Rachel Chanfaza here at the Bulwark and this week we're bringing you the the first in a series of a few shows that will focus on Gen Z that will drop every so often. You may notice I am not Sarah Longwell. I am not the publisher of the Bull Work, but I do publish the up and Up, a substack newsletter about Gen Z culture and politics. You can think of me as Sarah Longwell's Zoomer understudy for the time being. Today I want to talk about the way some Gen Zers we talk to in some recent focus groups are thinking about their financial future and also their financial present, because some common financial habits of Gen Z might not be obvious to the listeners of this show. My guest today is Ed Elson, host of the Prof. G Markets podcast with Scott Galloway. Thanks for being here, Ed.

Ed Elson (4:02)

Thank you for having me excited you're here.

Rachel Chanfaza (4:05)

So I want to ask you, as someone who also ends up speaking on behalf of all Gen Z ers in the media, what do you think older generations get wrong about us kids these days?

Ed Elson (4:17)

I like your intro. Speaking on behalf of all Gen Z is I think this is the big caveat that we always have to make. We can't speak for literally everyone in this giant demographic, which is literally 13 to 28 year olds across the board, but we can do our best. I think all that we can really do here is generalize, because we're talking about an entire demographic of people. What do older generations get wrong? I think that the biggest thing that they get wrong about our generation, they look at our struggles and the fact that we tend to kind of complain. And I think that's true, that we do complain about our situation, but I think that they tend to assume that this is all our own doing and generally that it's a function of us being lazy, or that the fact that we are struggling economically is because we're too obsessed and constantly going out and buying avocado toast and chai tea lattes. That's just not true at all. And it's a complete misdirect from all of the issues that we're struggling with, which are a lot more structural. When you look at the housing market, which is the most expensive it's ever been, it's six times our annual income. You compare that to my grandparents when they were my, my age, it was three times the annual income. We look at the cost of college, which has just skyrocketed over the past 20, 30 years. We were also sold this, I would say something of a lie about college, or at least they didn't really tell us what the terms and conditions really were. Many of us got into crippling debt. And that is again one of the big struggles that we're seeing among young people who are emerging out of college today, also emerging into an entry level job market that is beginning to wane and get a lot more difficult. It's becoming a lot tighter. That's not being made easier because of AI. The point being there are a lot of these structural differences that make it actually harder to be a young person today in America, economically speaking, than it was 50 years ago on average. And that's something that I think that older people need to recognize. And this argument that we're spending too much on avocado toast that I've heard a million times, which is why I continue to bring it up in this episode right now, that argument doesn't work anymore. So that would be my, my biggest misconception.

Rachel Chanfaza (6:38)

Totally. I actually just had the listening session a few nights ago and I asked what is the biggest misconception about how our generation views work? And this idea came up front and center of we're not lazy. And that's what everyone tells us, we're lazy. And also when everyone tells you that over and over again, you start to somewhat believe it. So for this show we talked to a couple of groups of young men, ages 18 to 24. So they're on the younger end of Gen Z, or as I like to call it, they're part of Gen Z2. And they all identify as politically moderate and most of them did not vote in the last election even if they could. There were a few Trump and Harris voters in there, but that's not really the point of this show. I just wanted to make that known. I want to level set the show and our conversation with how these guys were feeling about their economic futures and talking about their financial habits. And then we'll get to some of your reactions. Let's listen.

Gen Z Focus Group Participant (7:32)

First, my goal is probably going to be try to max out my 401k each year having it set to the max limit and then trying to go from there. At least my parents are. They think the market's rigged against them or whatever. I don't know why, because they probably made more money off of it than anyone else because they've been in it so long. But I would say it's just something I've learned. It's for all my PhD and vibe professors. That's the one thing that they've been drilling in my head is invest. Now because of inflation, stock has just been going up continually. It's better get in and try to preserve any kind of value you can get. So it's better to have like compound interest? Definitely a little, just pessimistic because of the value inflation houses are super expensive compared to how they were back in the day. And just with the extra stuff that you have to maintain if you got to get a mortgage because if you can't pay it out of pocket, dealing with those costs is definitely going to be a hassle. This past summer I actually inherited some property in New York in Manhattan and stuff like that. That the rent is very cheap. But it's like what I have to really figure out is like eventually when I start living there by myself, how exactly am I supposed to like make sure I can pay for this and make sure that like, you know, I'll be good in the future and stuff like that. You know, mainly focusing back on that like kind of owning a home. But I would say like my short term financial goals. I'm mainly like more so focused on like traveling the world and stuff like that right now because I feel like that type of exposure, it's just really good for the human body and the human mind and stuff like that. Just to see what different lifestyles and stuff is like. I like to start with small habits. And I've always been interested in finance is part of the reason why I'm studying business. But I've done a lot. I've opened two or three certificates of deposits. That was way back when that was like my first moves. And then I opened up a Roth IRA. However that was before I turned 18. So my dad has control of it till I turn 21. But it's okay because I give him money for him to dump in. I think that AI is going to create so many jobs that people will have a lot more opportunity than they even do today. And the reason I say that is AI is like the tractor laid people off originally, but it only made people more productive long term. Right. But as far as personal I would say that I'm in the have nots. I actually, I moved back in with folks. I was living in Ohio and I moved to Indiana just to kind of start getting ahead financially so I can buy, you know, buy a house on my own here in the next few years.

Rachel Chanfaza (10:04)

Okay, so Ed, we just heard a lot of, of takes and I saw you giving some thumbs up, some reactions. What do you think in general is at the root of Gen Z's approach to money? How we make it or spend it or save it. And how do you think that differs from our parents generation?

Ed Elson (10:22)

I got to say, listening to all of those clips, I feel really encouraged about how these people are thinking. I think you must have found a pretty good group of young men there. I mean, it sounds like everyone in that group is taking investing seriously. The first guy discussed the importance of maxing out his 401k, which it sounds like he is doing. Another said that he's looking to max out his Roth ira. He had the issue of his, of opening it up before he was 18, but he's figured that out with his dad. He's given the money to his dad. They're all wary of inflation and the concerns there. They're all thinking about their futures. They're all recognizing what's happened to the cost of housing and how that's put them at a disadvantage. I mean, I gotta say, like, I don't really have many notes for these individuals. I mean, you look at the way that the rest of the generation is thinking about these issues. I mean, most Gen Z is do not know what a 401k is or the Roth IRA is. So these guys are already ahead. And if this is an indication of the trend, if the word is getting out there that this is how you're going to have to level up yourself, then I think that that is honestly really great. I also love what the first guy said at the beginning about how his parents say the stock market's rigged against them and yet that is the source of probably their entire wealth. And that is again another piece of misinformation. There are some nuanced ways in which the stock market and the markets at large are rigged against regular people. And we can discuss those another time perhaps. But for the most part, the stock market has been the greatest economic miracle for regular Americans in the history of this country. I mean, 10% average annual returns over the past 30 years. This is how the older generations and the boomers, this is how they got rich. And so the fact that these young guys are coming in and saying, well, this is the way to do it. And yes, there are some structural disadvantages, but what other choice do I have but to get on board, save more money than I spend and invest it in the stock market versus just leaving it in cash for inflation to devalue what little I do have? Well, these guys have got it right. I do have one complaint about them, which I can maybe air in a moment, but I'd be interested to hear your reactions too.

Rachel Chanfaza (12:48)

The thing that I think about a lot when I'm having these conversations about how young people are spending, saving, investing, is that there's a lot of noise around us that says you don't know what you're doing. And in reality I find that in conversations people actually are figuring it out. To your point, you know, you kind of don't have a choice, especially given the constant chaos, the world that we've grown up in. You either make it or you don't. And I think most people want to make it. It also just flies in the face of this idea that, you know, we're wasting our money spending it on matcha lattes, etc. When in reality, I think, I think there was a time when that sort of feel good economy where amid lots of chaos, people are are spending on a little sweet treat. I kind of think that has, and I'm hearing a lot more of this investment era mindset of people wanting to spend on things that actually have longer term value, whether that's a trip with friends or something, a memory that they can look back on. And it's not just something momentary that disappears and is gone when you finish it. It's something that can can last. Or a piece of jewelry or a watch, something that lasts a little bit longer than the initial purpose. But you know, you alluded to this. Is Gen Z justified in being more cranky about the housing market than our par?

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Ed Elson (14:56)

It's unbelievable what's happened in the housing market. The housing market has gotten so overpriced every, every year. I think, okay, well, this has got to be the year that something snaps. This has got to be the year where we figure something out. I mean, people have been talking about this for years, getting on to decades now. Like, everyone acknowledges that there is a real problem, that the cost of housing and the price of house, of the average home, which is now close to $450,000, the median across the country, that it's just gotten ridiculous. But somehow we always seem to figure out a way to snatch defeat from the jaws of victory. I mean, the best example being, I thought we all agreed when Trump was running the campaign that we all agreed that we need to get down the cost of housing in some way. And it seemed that there was some momentum on this issue. And the idea seems to be that, and I think that, I mean, certainly the abundance Democrats were putting this proposal forward. I think some Republicans agreed with it too, which is we need to build more housing, we need to increase the supply and therefore that will put a little bit of a temper on demand, which will hopefully bring down prices. I thought that was the plan. And then Trump comes out and he says, actually, I want to make sure that the price of housing goes up. Why? Because a lot of people own homes. I want the value of their home to increase. What does that actually mean? It means he wants to help the older Americans in this country who already have homes who show up to, to the polls and show up to the voting booth. And he wants to win them over by saying, no, the value of your house is going to go up even further. And all we're going to do is do a little bit of pinching pennies on rates here. And so we're going to go and we're going to spend $200 billion in the mortgage bond market. And that's how we're going to increase access, is by bringing down the interest rates, which is just a totally ridiculous non solution. I mean, you have to work on prices. Prices are out of control in America. And we've decided that actually, no, we don't want to do it because we love our, our older Americans who are already getting their Social Security checks. And who cares what happens to the younger generations because they don't even show up to vote anyway. And this brings me to my complaint about the People that we've interviewed here, I didn't know this, I didn't know that none of them voted even if they had the opportunity to. And so my view on this is we can complain and we can say, you know, this is unfair, which it is. But if we're not voting to vote our interests to change the status quo that we've all just accepted, then what are we doing here? I mean, there's a reason we live in a democracy, there's a reason we can vote. It's that we can change policies such that our lives improve. So if you want to do something about it, my suggestion to a lot of these young men that we're speaking to, and it sounds like it'll be the case for all of these people, show up and vote. It doesn't get more simple than that.

Rachel Chanfaza (17:51)

Yeah, and some of these young men did, to be fair. But not all, Certainly not all. And, and that's a problem. And you know, I focus specifically on Gen Z's politics. And our generation is different because we are turning out to vote at higher rates than prior generations of young people did when they were our age consistently. And even this past year in the local elections in 2025, there was higher youth voter turnout than in 2021 in New York City, in New Jersey and in Virginia. So that's a positive sign. But yes, it's critical to vote when you're talking about this administration. They floated this idea of a 50 year mortgage and I wrote about it at the time and spoke to young people about it who completely rejected it, including many Trump supporters and people who did vote for him in 2024. So that's not going to work either. Shifting gears a little bit, I want to talk about crypto we heard in these focus groups. It was really interesting because I think crypto runs under the radar in a lot of the Gen Z punditry. So let's listen to how these guys are using or are not using crypto and how they're feeling about it.

Gen Z Focus Group Participant (18:56)

I know when I had just graduated high school and I was barely starting, I was like 1920, I dropped like probably 5,000 or something to Bitcoin and Ethereum and then I think it was pumping at the moment. And then crypto goes. It dies really hard down. And being naive and young and stupid, I just panicked. So I lost 5k basically. And then in terms of sports gambling, I feel like everyone in our age group right now, especially guys or everyone's almost sports bang. I think more people are sports betting nowadays and Investing too. And so I have friends who've lost probably like overall total, probably a couple thousand throughout the year, you know. So luckily it was, it was part of like my scholarship money. So it's like technically not money that I work for. So that's why I gambled that money onto crypto.

Ed Elson (19:42)

And so.

Gen Z Focus Group Participant (19:43)

But of course I was like upset, depressed a bit, you know, after I lost 5k, but now I'm kind of over it. I'm pretty good now. It didn't really, didn't really ruin my financial status for my money situation at all. You can do like the meme coins and you can hit it big, but it's kind of like playing the lottery. I think for the last 10 to 15 years, especially with the growth, the YouTube, like those kind of crypto and FX and like all these kind of methods of learning and educating yourself on how to make money has been a good thing and a bad thing. Because I've seen people, I've known people personally and I've seen people in social media really lose it all or really lose their families or really lose things that they didn't think was going to happen. So I think me jumping into it, I jump in in a small capacity with maybe a leader or an advisor or a group of people, and we're doing this together. I don't think going in cold turkey with large sums of money without knowing clearly how this works and what's going on is the best idea. Everybody has their own hustle and if so. And so is getting rich off of crypto and they're not doing anything legal. So I don't really see the problem. Like, obviously, yes, it's very risky, especially with everything that's going on with the stock market and the economy and stuff like that. But it's just like you shouldn't really like say it's a scam if someone is making like fucking millions of dollars off this, you know, so that's my two cents. I feel like it is very rare though for someone to really make like thousands or hundreds of thousands of dollars off of crypto. And you see it all the time over like TikTok and Instagram. There'll be these people trying to like sell you their course, tell you to like, invest in crypto when in the end they're just gonna rug pull you. I have invested in crypto before. I certainly wouldn't consider myself an investor, only ever put like a couple hundred dollars into it. But I would say that it's very unregulated and I think that's the problem. It gets a lot of hate because there is not a lot of legislation around it, especially compared to the stock market where the consequence of insider trading is jail time.

Rachel Chanfaza (21:44)

All right, you obviously have 101 reactions. But to start off, how do you think the FTX collapse affected perceptions of crypto, of the crypto industry, and is it actually responsible to make a significant part of your portfolio?

Ed Elson (21:59)

I thought that the FTX collapse would levy more structural damage on the crypto industry. I, I'll just put it out there right now. I hate crypto. I think it provides no value to society. I think it mostly just is a mechanism for what the guy described at the end there, where you have people with large social media platforms going out pumping a useless token that has literally no, no actual value in the real world. No cash flows, no fundamentals, nothing. And then they pump it up. They pump it up. They usually target young men who are feeling a little desperate in some cases don't really understand this stuff fully. I think that's changing now. But in many cases they feel that they don't have access and so they want to get rich quick. So it's similar to gambling. They get hooked in like it's a casino and then they rug pull them, they just sell all of their tokens. And then the young guy, it's the classic story that the guy just explained there where he invests 5,000 and then it tanks and then he gets scared and then he sells. This is what happens over and over again. Crypto has done nothing but eviscerate what little wealth young people in America actually have. And only a few handful of grifters are actually making out very well and making millions of dollars off of this stuff. I was open to crypto at first and trust me, I've listened and read all the books, I've listened to all of the, the arguments for it and I was, took it seriously for a long time. And then I concluded, actually, you know what, this stuff is kind of useless. FTX collapsed. And I thought, okay, good, people are realizing what's happening here. This is basically a giant scam which FTX was, and they put him behind bars, Sandbank freed and the crypto industry had an implosion. And then it got some momentum back largely because of the additional scamming abilities and scamming powers that were accorded by President Trump who said, I'm going to embrace this stuff and I'm going to pardon all of these people who were investigated and in some cases actually convicted of fraud. And crimes, which sort of gave this extra juice to the crypto market. And then it came ripping back, back again. Now it's back into a downturn. We'll see what happens. I'm honestly like just kind of done with trying to predict when is it going to collapse, when is it not going to collapse. But I think that the FTX collapse did a lot of damage in the short term. I was surprised that it didn't last a little bit longer and that it didn't really structurally damage this industry. I think that Trump and the optimism he brought back for the crypto industry was kind of the saving grace of the crypto industry. But those stories that you heard that, I mean, that sort of describes the whole system. The guy who puts $5,000 in and you know, some people would say that's a lot, some people would say that's not a lot. The reality is that's what the guy had and he lost it. And those are the stories that you don't hear, which I'm, which is why I'm glad that we're listening to them on this show right now. Because the stories that we're mostly hearing about are the Andrew Tate's of the world, who make all of their millions rug pulling their unwitting fans on Instagram and on live streaming platforms, and then they go around and they post videos and images of their Lamborghinis and their Bentleys and their weird compounds in Romania. And then everyone thinks, oh, that's going to be me. I'm going to be that guy. I'm going to be smoking a cigar in the Jacuzzi with paid Eastern European women sitting around me. So that's obviously not what usually happens. What the most common scenario is what we saw with this guy on this podcast here, you lose your money. And I think we need to have more transparency, more data explaining how frequent this actually is. It's very frequent anecdotally, but for the most part, young men who have gotten into the, into crypto and have traded this stuff. Same with the sports gambling and the betting, for the most part, they've gotten killed.

Rachel Chanfaza (26:13)

We're definitely going to get to the sports gambling and the betting in a little bit. I think when it comes to crypto, you know, I was really struck by this young man who said that he used his scholarship money. Like that just blew my mind. And it's so volatile and it just disappeared and it's, it's. You know, I think you also mentioned this is the conversation about crypto is happening around young People, people. There's not much research on the correlation between. But like we are constantly scrolling, seeing the way that other people are spending their money or are investing their money and what it leads to and then think that that will translate to results because that's what happened for someone else. And we talk a lot about the role that social media plays in terms of comparison culture when it comes to the way that people dress or the way that people socialize or the way that people eat, but less about the way that people spend their money or where they put their money. And I think that's a big part of this too is the relationship that social media plays in all of this and this sort of stigma. And it's a FOMO of sorts because you're like, oh, all these other people are doing it. I should be doing it too.

Ed Elson (27:18)

Yes. And, and that is a scam. That is what a scam is. It's like there's a, there's a poster board with an advertisement. This could be. You just put your money in here and you, you too can, can be Andrew Tate or any of these other Gen Z crypto influencers. This could be your future. And then you do it and then you lose all your money because they literally steal it from you. From the rug pull transaction.

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Ed Elson (29:13)

Like one of the guys in this, in those videos said, I don't think it's a scam because they're just, you know, trying to make some money. I don't know what your name is, sir, but it's a scam. You're describing a scam. Look at Trump Coin, for example. I think this is a good example where there was a good amount of coverage and research such that we were able to actually, like, put a number. On what. On how deep and awful the grift in the scam actually was. The numbers are. So obviously Trump comes out with this Trump coin after he becomes the president. He also did Melania Coin. But we'll focus on Trump Coin and a handful of insiders who were associated with him who already knew what the timing of the announcement would be. And it's all about timing because it's all about marketing, because it's a scam. Those insiders made $1 billion on Trump coin. So they're great. And it was just a very small handful of them. What we don't hear about are all the retail investors, and there was analysis that added it up, who lost $4 billion on Trump coin. And it's because there were. There were thousands, hundreds of thousands of those guys, like, who we just heard from, who put in maybe $1,000, maybe $2,000, maybe $3,000. Maybe they put their scholarship money into this stuff, and then they put it in at the top when there's a lot of hype and Trump's talking about it and he's posting about it on social media, and then it crashes, inevitably, because there's nothing backing this stuff. It's a total scam. And then they sell at the bottom and they lose their money and they just swipe it aside and they say, oh, like, I guess that's the crypto industry. Like, it's really volatile. Things go up and down. No, your money was stolen. It was stolen by the guy who was pumping this stuff in your face in the first place. And so we should be a lot more angry about what is happening here. We should be angry about the fact that we are getting swindled and grifted by the most, literally the most powerful people on the planet. It's totally insane.

Rachel Chanfaza (31:12)

Yeah. So you actually just previewed this Next section entirely, because in the conversation we had with these young men, there was a lot of talk about Donald Trump's relationship with crypto, especially the Trump coin. So let's listen to how these guys talked about that.

Gen Z Focus Group Participant (31:28)

I don't know if anybody's aware, but Trump and even his wife created meme coins. And what they basically did was a money grab. They created Megan coins, they put their own capital in and then they basically pulled out all of their capital. And also their friends that they had investors or whatnot that were in on it did the same thing. So all the regular, you know, common folk who invested, lost all their money. Like, if any of any other president did something like that, it would probably be like the biggest headlines ever. But with Trump, it's like it was maybe in like two to three news cycles and I was just brushed under the rug because the way things are is just like that is probably one of the lesser kind of things that's been known going on with him in terms of Epstein files, the border and everything else. Rifter, I think it's a classic case of pump and dump. I think him and his family have had large stakes being the underlying word in Trump coin. I think he had NFTs in the past, which is a whole nother thing. And then it got publicity, it got all exactly what they were expecting. It got got to a certain price, they sold it and then it sold off. And I think they knew exactly what they were doing. Many things can be said about Donald Trump, but he knows how to make money. Not necessarily in an honest way, but he does know how to make money, willingly or by force. So I think it was a classic cash grab. I think he preyed on his base, or not even his central base, but people who were followers of his because especially the younger base, because, you know, they're a little bit more apt to things like cryptocurrency and all that, and just capitalize it on it. 100. There's also someone who was a bit viral maybe about a year ago at this point, or, you know, eight months ago, for putting like a million dollars of their grandma's inheritance into the DGT or DJT fund, which is Trump's. I think it's his stock fund. It's not necessarily a meme coin, but he does have a meme coin too. And I think that it was right before one of the big rug pulls. And it was funny because people were posting that. Well, it's not really funny. It's pretty sad. It's kind of heartbreaking. But people are posting that Trump just like directly took his grandma's inheritance, which is just something that he's able to do. Why does he need to keep doing it? He's literally like a billionaire. How much more money does he need back to like the crypto thing and our sovereignty as people? The universe is infinitely abundant. So I think people get misconstrued when they view crypto and it reaches limits of their imagination and they think that it's not real.

Rachel Chanfaza (34:13)

So to me, it is really interesting a the degree with which people followed the mechanics of the Trump coin and how much they knew about Trump's involvement in the crypto industry. And also one of the young men spoke about how this is kind of the cohort that isn't necessarily Trump's, Trump's base, but was part of that persuadable group of young men that we all spent and continue to spend all of our time talking about, about that swung for Trump in 2024. And so one thing about young voters and that specific cohort of young voters is they're very fluid and they may have appreciated this specific piece of, you know, Trump was talking about something that felt relatable to them or was getting involved in an industry that felt relatable to them. But just because they swung in his favor because he was talking about crypto in 2020, 24, doesn't mean that they're not paying attention to what he's doing about it now. Sounds like from these guys, they're not in his favor anymore because of some of his actions. So let's just level set for a second. You explained the Trump meme coin a little bit, but what's a pump and dump? And can you just like give us a lay of the land here, a little bit of these terms that these guys were talking about?

Ed Elson (35:21)

Yeah. And I would just add the fact that they know all of these terms seemingly across the board. Pump and dump, rug pole. They, they clearly have a fluency of this language and they understand this stuff. And more importantly, they understand what a gigantic scam it was in a way that I don't think older Americans totally get. And I think that explains why we didn't see that much coverage. I take one of the guys points there, that there's other stuff that's distracting us away from the crypto situation, like Epstein and like ICE and all of this stuff. But what is interesting to me is that these young people seem to really understand exactly what is happening here and thus why it is so awful and illegal. And of Course, we have no regulation on this crypto stuff, as one of them also pointed out. But that is striking to me and it's actually quite heartening to me. It makes me optimistic because it makes me think these young people who understand how crypto works, they live to see the proliferation and the birth of this industry. They understand all of the language that is usually a tool of complexity to distract you away from the grift and the crime that is actually happening. They understand it. They have their finger on the pulse. So that's great. The terms pump and dump, this is. I mean, we could just describe what happened with the Trump Coin. Basically, Trump comes out and he says, I have issued a new token, a new cryptocurrency called Trump Coin. We're going to have, let's say, a million tokens of Trump Coin. I don't know how many actual tokens that they issued, and we're going to put it on the crypto exchanges and that's it. Have at it. If you want to buy it, you can buy it. They do a ton of pr, a ton of. A ton of media work to get the, get the word out there. They'll often promise some kind of stupid things like, oh, this will be tied to some level of, like membership benefits, or you might get some potential upside or exclusive access to such and such. I mean, they, they give you this, these kind of. This bait that is usually meaningless and usually doesn't really pan out. But the point being, the reason that people buy the thing is because they know that there is going to be so much media hype and so much momentum, so much buying pressure, that the token, the price of the token is going to go up and up and up and up and up. And that's going to happen, and it often does, especially if you have someone very, very famous and influential like Donald Trump pumping the token. And then once it reaches a price that is acceptable and exciting to the insiders of the coin, the insiders dump it. They sell it at that exaggerated, ridiculous price level. And then, of course, once the selling begins, then the dumping begins and the cascade unfolds and the price goes down and down and down. And then eventually you have people like our, our friend here who, who sold his Bitcoin and his Ethereum at the bottom and he lost $5,000. So that's the pump and dump. Rug pull is the. Is. Is a synonym for the pump and dump. A rug pull is. You, you promote the token, you promote the cryptocurrency, and then right at its peak you sell, thus pulling the rug from under the neath. The other investors. I'd like for us to be a little bit more aggressive with our language. Someone said that it was in that clip, that it was a transfer, something I think he said his grandmother's million dollars was transferred to Donald Trump. It was stolen. It was stolen by Donald Trump. We can discuss exactly how it was stolen. And yes, there were some intermediate steps, but let's not distract us from the fact that it was stolen. And I'm hoping that as more and more people understand this and we start to get a bit more real about what is actually happening here, they will start to realize that this is not a guy that we should be trusting whatsoever.

Rachel Chanfaza (39:17)

I've heard this in my own listening sessions with Gen Zers is that they actually do want regulation on these things because they, you know, as. As anti system everyone says that they are. They don't want to be taken advantage of when there aren't systems in place to protect them. And then similarly, I think something that's been coming up recently in looking at sort of the young men who swung for Trump who are now kind of moving away from him is this one young man that we heard from, he was sharing how there are a lot of things going on that are happening at once. And so it's hard to pay attention. Attention to any one thing, whether it be the Epstein files or what's going on with ICE or Trump building a ballroom. And all of these things are now showing us that Trump, who spent years railing against the establishment and saying that he wasn't a part of it, now has become a part of the current establishment that young people are very disillusioned by. And I'm curious how you see that playing out as well.

Ed Elson (40:16)

Well, this is the thing that, that has always driven me insane about him. And he was able to. To play that card in 2016 a little bit more because he didn't have a full majority. He was still kind of seen as an outsider, and he was still able to use this deep state calling card and say, there's the Russia collusion, there's the Russia hoax. I mean, all of these people don't want me. They're against me. And that's why I can't get what I want done. I'm still the outsider, which was always ridiculous to me because. Because I'm just like, you're literally the most powerful person on the planet, and you're trying to argue that you're the underdog and that you're the outsider. It's like, no, no, you are the definition of the establishment you because you are now the president. But still he was able to use this argument that, you know, the deep state is is is colluding against him. And you know, who knows, maybe they were. Well now the year is 2026.

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Ed Elson (42:42)

n. He has all of the power in the world. Every single tech executive is literally coming to the Oval Office and getting on their knees and handing him trophies. He has the majority in Congress. He's got all of the power. And he's still trying to pretend that he is against the system. He is the system. And I think young people are beginning to understand this. I think, I hope it happens. One concern of mine is that the Supreme Court striking down the tariffs will be his next ammunition to say they didn't let me do anything that I wanted, when in reality what he tried to do was simply illegal by the laws of the Constitution. But he's going to say they tried to stop me. This is the deep state they're preventing me from doing what I want to do and I hope, I really hope, I pray that people are going to realize that actually we're going to call BS on this. You're literally the President of the United States. So any excuses that we hear from you at this point, we're not going to take them seriously. Everything that I see in our country today, when I look at the cost of housing, when I look at the cost of tuition, when I look at the cost of grocery bills that have been inflated because of these ridiculous tariffs that make no sense at all, it's all your fault. The buck actually does stop with you this time because you're the person in charge and we'll see how things play out over the next three years. Maybe things will improve for young people. I highly doubt it. The big beautiful bill was one of the most anti young people bills we've ever seen in the history of America. So I'm not, I'm not feeling too optimistic about it. But yes, I think it's a very important point. He is the system, he is the establishment, because guess what, he's the President of the United States.

Sarah Longwell (44:25)

Right.

Rachel Chanfaza (44:26)

And yet, even though to your point, the buck does stop with him and he's now been president twice. It's not like this is, he's a new candidate who came up on the scene. He still spent the whole State of the Union last week talking about how this is Biden and the Biden administration's fault. All of the problems that exist in our economy today are problems the Biden administration, when he was president before then. So anyway, going back to crypto for a second, just like the industry more broadly, what is the political valence of crypto and has it firmly become Trump coded? Do you think there are any Democrats who are handling this in an interesting way or is the whole party kind of out, out to lunch on the whole thing?

Ed Elson (45:06)

I think the party is pretty much out to lunch. I believe there are a couple of Democratic elected leaders who are trying to come up with some pro crypto policy. But I mean, regulating crypto is kind of an oxymoron. The reason that crypto is even, even exists is because the whole premise is to exist outside of regulation. That's really the whole point. Bitcoin I'm going to make an exception for because bitcoin has, has it somewhat of an argument that it is the digital gold. I still think it's, it's useless, but it's a digital, it's digital gold. You know, if gold exists, why don't we create a digital version of that. And it is kind. It's kind of made an argument for itself on that front. So we're going to put that aside. Every other cryptocurrency and especially the meme tokens, they really serve no value whatsoever. They're not doing. They're not producing anything that is of any use to anyone in the real economy. And the only real use case is for illegal transactions and for scams and for people to speculate. It's basically like gambling. I mean, it's. That's the only real thing that is useful about it. So then people come in and they say, oh, well, we want to regulate this thing. And even Coinbase says, please, please regulate us. And I was just laughing seeing this happen, because I knew. You realize as soon as they regulate you, as soon as they decide what you are, which is a useless share of something that is kind of pretending to be a stock and kind of pretending to be a commodity, but ultimately what it is is just a share of nothing, which people are then going out and promoting and then stealing money from people through that mechanism, mechanism of complexity. You realize as soon as they decide what you are, you're out of business, because the whole premise is that you're not regulated. And so what happens? They come up with some regulation, and then suddenly the crypto industry, including the CEO of Coinbase, comes out and says, this is not what we wanted. This is actually going to kill us. This is going to be a bad thing. At which point I'm like, yeah, obviously, because the whole, the whole point that you're here is because the idea was to not be regulated. That is the whole innovation. It's that we came up with a new definition of a thing which exists outside of SEC laws and outside of CFTC laws. That's what's happening here. I'm just shocked at how many billions of dollars have been invested into this industry, which is. It's just. It's not doing anyone any good unless you're a crypto billionaire in Abu Dhabi. Otherwise, like, no one, no one's benefiting off of this stuff.

Rachel Chanfaza (47:56)

I mean, I think that there's been plenty of young people I've spoken to talk about that decentralized nature of it as something that is the appeal, as something that feels like they have autonomy because this is something that they control that is not controlled. And then also, of course, you do hear once it's kind of they feel that they've been victim to a rug

Ed Elson (48:16)

pull, then you press them on it and it's like Tell me why. Like, so decentralized. So let's, let's take power away from the establishment and let's decentralize it across the system, which was the argument for crypto, which does sound pretty good, actually. I like that idea. And then you ask, so, so how has this empowered you? Tell me how this has actually empowered you. And that's when they go, well, it's. It's screwing over the people in Washington. Well, no, it isn't, because the people in Washington have exploited this thing and they're making billions of dollars off of this thing at your expense. Oh, well, it's going to be a counteract into the way that we transact and the way we use currencies. Okay, how is that going to benefit you as well? The arguments. When you actually drill down into what does this even do for you? Suddenly it disintegrates. Because there was this kind of interesting and fun vision that they sold to us, which I too, was quite excited about at the outset. But the more and more that we let watch this thing play out, the more and more it screwed young people. I mean, the marketing of this stuff was just pristine. It preys on the feeling that we have we've live in a system that is stacked against us, which is in a lot of ways true, that things are unfair. And then it's just the same thing again, except now you get grifted like, great. That's not empowering anyone.

Rachel Chanfaza (49:41)

You talked about how this is a form of gambling. Stock market can also be considered a form of gambling. You know, there's lots of ways which people can gamble. I want to talk now in our last little bit of time here about an interesting trend that these young men brought up. And it's not always a great one, but sports betting and prediction markets, which. The conversation mostly ended up focusing on sports betting. And they shared various thoughts on and feelings. Let's listen to how they talked about not just their own sports betting, but their friends and family.

Gen Z Focus Group Participant (50:13)

I'm in this group chat. I mean, I love these guys, good friends, but the way that they're thrown around their money is like insane.

Ed Elson (50:19)

Like, you could be tossing this and

Gen Z Focus Group Participant (50:21)

I don't know, like an etf, like triple Q, anything spy.

Ed Elson (50:24)

And they're just throwing their money down

Gen Z Focus Group Participant (50:25)

with these crazy, like, six leg parlays, putting like $50, $100 on it. And I'm just like, this is insane. Like, and then eventually, yeah, maybe one will hit and they'll win big. But all in all, like, they're still losing Money all the time, when they can be, you know, investing that, it's a lot better. Even though obviously investing is also risky, but you could be smart about it. A lot of people think it's our age group or the younger demographic of people, but it's also people who have more access to means over a long period of time of accumulating, who end up in these periods of their life. And I'm talking about someone I know, my uncle. He really went into well past six figures with the sports gambling, with the being up late night, coming home from dinner and getting on the computer and clicking and clicking and clicking, and you get addicted into that life. I'm in the libertarian camp, so I know there's a lot of calls for, you know, sports gambling to be banned, and I know a lot of people might be in favor of that. But I think even seven years ago, you could not dial up your phone and put money. And the reality is most people are not putting money enough money to where it really matters on a specific game or crypto coin or whatever it may be. I think that a lot of people are gambling with money they can afford to lose, and I think it provides a lot of social entertainment for a lot of people. My position is just more of a moral one. My religious tradition prohibits gambling. So I just view any increase to access or freedom, what we allow is representative of what we believe and what we value. So I just view it as a net negative. Expanding any access and just kind of like freedom of choice for personal, like autonomy, making your own choice. I think that's really cool. But also just kind of like in a net negative that I could see that. I know people with super, like, addictive personalities, and they just kind of, you know, they win that one time, then they just, they're chasing that. That next big hit, gambling. And I could just see them going down that rabbit hole. Definitely a side hustle. It's. It's not for fun at all. Like, it's only, like, just for money. But, I mean, actually, I wouldn't say that because, you know, like, you know, maybe in the future if I. If I have the. The money for it, you know, it's the super bowl or whatever, the. The NBA Finals. Why not place a bet? You know, just because, you know, but mainly, like, side hustle for sure, like the money. It's strictly for money because, like, my

Ed Elson (52:49)

favorite team is, like, the Warriors, Golden State Warriors. And whenever I bet on them, like, all I really think about is the bat. It's pretty stressful and I can't really

Gen Z Focus Group Participant (52:57)

like enjoy the game like as like I would as like a casual fan.

Ed Elson (53:01)

So I mean I personally like would only do it like strictly for money.

Gen Z Focus Group Participant (53:05)

I don't see myself in a position where I would need to earn money from gambling. Like I work part time so I get paid from there. So whenever I do, it's just like a five dollar, ten dollar hand on like NBA basketball. It'll just be something to entertain me for the night and if I win, I win. If not, I'm only bet like a little bit. I'm afraid that I'd get like too addicted if I rely on it for like a monetary purpose. My brother sports bets pretty regularly and he'll like text me about and whatnot and I'm like, okay, good for you dude. He's not necessarily trying to pull me into it, but I see how it is definitely like a fun thing for him to do on his free time. Not necessarily like it takes up the bulk of it, but it takes up a good chunk of it. But I mean, as of now he's positive. So I mean, I can't necessarily knock him for his habit, but I just, I hope it doesn't necessarily fester into anything worse. My dad and this girl that he was messing with, they have regularly like went to the casino, but just like it's not necessarily sports betting, but they have, you know, gambled away a lot of money and not really want any. So yeah, I see a lot of detrimental behavior coming from that. It said rush. So people easily get addicted.

Rachel Chanfaza (54:18)

Okay, so obviously gambling is not new, but now everyone has a casino in their hand essentially. And I think what I was struck by here is how many of the young men were saying that this is a side hustle. Like this is legitimately something that they see as a way to make additional income on top of whatever income they're making from their primary job. You're out with a new interview with Tarek Mansour, the founder of Kalshi. What do you make of how he's handling the criticisms of that prediction markets are getting needing safeguards around insider training and heavy losses by people who can't afford them.

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Ed Elson (55:24)

If you're a maintenance supervisor at a

Gen Z Focus Group Participant (55:26)

manufacturing facility and your machinery isn't working right, Grainger knows you need to understand what's wrong as soon as possible.

Ed Elson (55:33)

So when a conveyor motor falters, Grainger offers diagnostic tools like calibration operation kits and multimeters to help you identify and fix the problem. With Grainger, you can be confident you have everything you need to keep your facility running smoothly. Call 1-800-GRAINGER clickranger.com or just stop by Granger for the ones who get it done. Well, he's responding in the right way, actually, and that is he's figuring out how to track insider trading and how to hold insider traders accountable. And he's also worked very hard on figuring out how to comply with regulators, which is something that the other prediction markets aren't doing. So on that point, I've be completely honest. I give Tariq Mansour, who's the Kalshi CEO. I give him credit for making those efforts because it is really important. The thing that struck me in those clips was it was the comment from the guy who said he, he is a libertarian, therefore he believes this certain view. And he said some things that were correct and he also said some things that were completely incorrect. The thing that was correct is that a lot of people use sports betting apps and use gambling apps for fun and for entertainment and they only put a little bit of money in and they find it to be enjoyable and exciting and it's a form of entertainment, which is true. And we heard some of those, some of those accounts from some of the people in those clips there. What he said that is not true. He said no one's putting huge amounts of money that is actually going to be meaningfully damaging to their, to their income and to their earnings. No one's doing that. That's not true. We're seeing plenty of that. We're seeing plenty of people who are getting addicted and who are putting huge amounts of money on these sports betting and sports gambling apps and they're losing it. And the same thing is happening in prediction markets as well. And I think the thing that frustrates me is it's become such a, such a debate where you, where you try to place a lot of emphasis on one story or the other and people say, no, they're lying. It's not all people getting addicted and losing their money. Yeah, I know it's not all people, but it is some people, and that's a bad thing. And we should be doing whatever we can to prevent that from happening. I mean, the story that one of the guys described there, I think it was his uncle who gets home every night and spends the entire night clicking on his computer screen trying to win back his losses on these sports gambling apps. Like that. That is so depressing. Like, we should all be able to agree that we don't want that to happen. And this isn't some psyop from regulators who are trying to clamp down on business from happening by using these sensationalist stories. No, these are real stories. This is stuff that is actually happening. And so we have to ask ourselves, like, I don't think we need to ban sports betting and ban sports gambling, because I agree, like, we shouldn't infantilize people, we should let people have fun and use it for entertainment, but we should do whatever we can to protect people from getting into this unbelievable addictive downward spiral of getting addicted to the gambling apps and then losing more and more money. And then as we've seen the bankruptcy numbers go up also, suicidal ideation goes up, suicides themselves go up. These are all really, really dark things. And we have regulation and rules on things like cigarettes and alcohol and even prescription drugs such as opiates. And we need to do the exact same thing with prediction markets and with sports betting and with gambling at large.

Rachel Chanfaza (59:17)

Yeah, I was going to make a point similar. You know, like there's other substances and addictive substances that we have that are not. They should not be banned and there's a time to enjoy them, etc. But there are regulations around it. And also, you know, you have a road and you have speed limits, so they're. Just because something exists doesn't mean that it should go completely unregulated. There are ways to moderate. And I think, again, this is something that young people have said themselves that they want to see because they think it would be helpful not just for themselves, but for their friends, for their family members that they're concerned about. And there's a balance. I don't think it has to be zero sum. In the spirit of prediction, what's your biggest bet on where the future of prediction markets goes from here?

Ed Elson (60:01)

I think it's only going to keep growing. I think it's. I think it's become massive. There are two different products, let's call it. On the one hand, there's prediction markets as an information machine, which I have to say is actually really useful.

Rachel Chanfaza (60:17)

Yeah, it's like crowdsourcing.

Ed Elson (60:18)

It's crowdsourcing information. And you know, one of the things that I try to do, I mean, I host Prof. G Markets. We talk about markets, we talk about where the price of stocks and the price of commodities, where things are going to move, what's going to happen with business deals. We've been looking at this Paramount, Warner Brothers acquisition, trying to figure out what's going to happen, who's going to win, Is it going to be Netflix? Obviously Netflix bowed out recently. But where do I go when I want to understand what is the likely outcome? I go to Kalsha. I go to the prediction markets where I love to look at the odds of what is going to happen. In the same way that it's useful to see what happens if a business deal falls through. Somewhere you read something in the Wall Street Journal. And then I go to the stock market and I look at the price of the stock to understand, okay, what are investors feeling about this? How are prices moving as a result of this? All of that I find to be incredibly useful. And I like prediction markets for that reason. Now, as a trading and gambling machine, I would not recommend it. I wouldn't recommend actually going onto these platforms and putting up your own money and betting on this stuff unless you are incredibly experienced and you have the qualifications and doing all the research and are kind of treating it like a full time job. Unless you're doing all of that work in the same way that you'd find a trader on Wall street who's making money trading on stocks and trading on options and futures and commodities. Unless you're treating it like that, then gambling on this stuff is an awful idea because the odds are stacked against you. I mean, there's just huge information asymmetry. There's also still, I mean, Kelsey's trying to deal with it, but it's still rife with insider trading, which means you're going to lose. So I see it as two different things. But ultimately I think these things are going to continue to grow. I think the question we have to ask and answer is how do we want to regulate these things? Do we want to just sit back and just say, let it be free, libertarian free markets. Figure it out and let people lose a lot of money and let people become subject and victims of insider trading. We can do that or we can figure out a way to regulate it responsibly. And I think that's what we need

Rachel Chanfaza (62:30)

to do in order to have them as information Sources, don't you need people to be betting on them?

Ed Elson (62:36)

Yeah, exactly. And this is the problem with markets, this is the paradox. Because you look at the stock market, for example, what we try to teach on our show is you want to be an investor, you don't want to be a trader. You want to be looking at these businesses, looking at the fundamentals, and you want to be investing that money for 10, 15, 20 years. At the same time, that's not what a lot of Wall street does. A lot of Wall Street, I mean, these high frequency trading firms, they're not doing that at all. They're just looking at prices and they're trading and they're trading and they're moving money around and moving it here, selling, creating the option, selling the option, call options, puts, et cetera. And that's something that I don't think should be illegal, but it's not very productive unless you are literally dedicated to that business, Unless you're literally a quant trader at Jane street or Citadel. Those guys probably are going to make some money because they're benefiting from huge amounts of infrastructure and huge amounts of information. And they've been training at this for years. It's literally their job. But then when retail investors go out there and say, oh, I'm going to predict the price of this meme coin and I'm going to go out there and figure out how to trade all this money, I mean, we can just look at the stats. 95% of those traders lose money. I always have to be like, okay, there are, there's benefits and there are, there are also some, some negatives.

Rachel Chanfaza (63:58)

Yep, I hear you. All right, Ed, Allison, thank you so much for joining us. We really appreciate you being here.

Ed Elson (64:04)

Credit to you guys for finding them. And credit to those young men who spoke on this podcast. I thought that was really interesting. Awesome.

Rachel Chanfaza (64:12)

Well, thanks to you all for listening to another very different episode of the focus group podcast. We'll see you again soon. Remember to subscribe to The Bulwark on YouTube and become a Bulwark plus member

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Ed Elson (64:54)

If you're a maintenance supervisor at a manufacturing facility and your machinery isn't working

Gen Z Focus Group Participant (64:58)

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Ed Elson (65:02)

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