LIVE! From the Lesbians Who Tech Summit

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Join the 15,000 companies using Vanta to prove trust. Go to vanta.com. Hi, this is Pivot from the Vox Media Podcast Network. I'm Kara Swisher.

And I'm Scott Galloway. This week, we did Pivot Live in New York City at the Lesbians Who Tech Summit. We came on right after Roxanne Gay, so I had to behave myself or risk an all-out war on Twitter. Yeah, which you would lose, Scott.

Yeah, no kidding. We're live in New York to talk at the Lesbians and Tech and Allies Summit. Everybody say hello. So, how do you like being here, and we're going to talk about all the different tech issues of the day?

Yes, and yes, Kara. All right, so one of the things that we did talk about is how you can be a better ally. Yes, same more. And so what I did is, naturally, what I think is really important for you to wear is I brought you a T-shirt, says Les Bro.

Who wants to say a 54-year-old man-changer shirt? Scott, no one's interested in you here. Well, most places, actually. Fantastic.

Thank you, Scott. Okay. All right, so we have a lot to talk about this week. We're going to use Pivot.

You know, we use Pivot as a different platform, but it's really important that we use it to talk about the issues in tech that affect all communities and try to push for more diversities. We're very excited to be here. So, once speaking of sort of interesting things, I interviewed Mary Ann Williamson this week, and tomorrow I'm going to interview Bill de Blasio. So, I'm going on the people who didn't get into debate tour, essentially.

So, it was a really interesting interview with Mary Ann Williamson. Yeah, and I'm actually hosting Michael Bennett, another guy I did make. Right. And it's interesting to think about kind of unexpected consequences.

So, the Democratic National Committee wanted to ensure that it was more inclusive. They were accused of basically railroading Hillary through. So, they tried to be more inclusive. And they came up with all these rules.

And, you know, they started to end with the end of the day, but the notion that you would have to get a certain number of donors. Right. And what's ended up happening is that people are paying 70 bucks to Facebook and Google to get a $1 donation. Right?

Right. And it's also, I mean, I feel as if we have some people on stage. The big winners through all of this are the off-card people. The Andrew Yangs, the folks you're talking about who've got incredible awareness.

And they're going to have to flip it back because you're going to literally see 100 people run for president. The next cycle. Is that a good thing or a bad thing? Yes.

I think your point is that it shouldn't just be people who've been politicians their whole life. But I think the DNC has an obligation to probably screen out earlier some people who shouldn't be on the stage. I think it's taken a lot of oxygen away from people who haven't imported message. Who should?

I mean, that was an interesting discussion. I have with Mary Williamson. She feels she's more in tune with Americans than she was saying she's in 2019 politics and most of the candidates are in 1985 politics. Which was kind of interesting.

And when actually you meet her in person, it is kind of interesting that the media sort of has to portray her. It was really interesting David Brooks wrote a column where he called her a wackadoo and then agreed with everything she said. Which was fascinating. It's really interesting how she's portrayed because there's some controversy around what she said about vaccinations.

Which she had a relatively good explanation for but a lot of people don't believe her. She didn't say she was praying away the hurricane. She was talking about prayer in general which I think a man would be allowed to do very easily. So it was a really interesting interview and I was surprised one of the things she said.

I think you'd like her too. I think a lot of people would like her in person. She thinks that if we don't make a change that young people are going to storm the best deal. So that was the most interesting thing she was talking about.

And she was talking about how the populism in this country and the hate that's going is problematic for politics. I think it's, well, one, there's a huge divisiveness but typically throughout history when we get to this level of income inequality. Yeah. It's self-corrects and it's self-corrects of war, famine, and revolution.

And I think we're going through a soft revolution where people have just had it. Just had it with, well to be, most of them are tech people. Well, the top 1% have doubled their income while the income of the bottom 50% have been half. 13 people are worth the same wealth as the southern hemisphere plus India.

And it's pretty basic logic. At some point, when three and a half billion people go the easiest way to double our wealth is to take away the wealth of these 13 people. They figure out a way to do that. And it's kind of happened over and over in Central American different economies where if you don't have some level of empathy or redistribution and all the wealth and all the spoils and all the good stuff aggregates a few and fewer people, at some point everybody else says, all right, we've had it.

And when you see all these very wealthy people talking about, we need to, you know, we need higher taxes. It's not that they're being progressive. It's self-preservation. They recognize at some point people are just going to show up with, you know.

And you point out this week at Co-commerce that Amazon, you're specifically talking about Amazon, didn't pay any taxes or pay very low taxes given how much money they make. So since 2008, or approximately the last 10 years, Walmart has paid $64 billion in corporate income tax, Amazon has paid $1.4 billion. And a huge, a huge, our economy is just not used to a company being this successful and never paying taxes because it's not profitable. Typically the markets demand a company becomes profitable at some point, our taxation system is based off of profits.

In addition, you have this genius. And Bezos is a genius who's figured out a way to perfectly gain a system where he never pays taxes. So remember, and we talked about this at Co, in the 1980s, it was basically this racist whistle call where Reagan had this caricature of what he called a welfare queen, right? The mother of all welfare queens in our society is Jeff Bezos.

Because he owns approximately 17 or 20% of Amazon, Amazon extracts billions of dollars in tax subsidies by gamifying the process to put their data center here. He makes it irresistible for a municipal official who wants to be the one to detonate a prosperity bomb in their city, not to fork over tons of benefits and tax subsidies. So say $2 to $3 billion gets transferred from the city of Phoenix or Denver to Amazon to put their new data center there. That's technically a transfer from all of us who are taxpayers to Jeff Bezos of approximately a half a billion dollars.

In addition, he himself never pays taxes because anyone who's worth that kind of money just borrows against his holdings at a low interest rate of 2%. But he's worth $164 billion to the richest man in the world. And he is a net debtor or taker. So the National Park Service, Central Intelligence Agency, the Navy and Jeff Bezos are taking money out of the treasury, not putting it in.

So hands down, mother of all welfare queens for the ages, the wealthiest man in the world. Alexis is a good thing. So I'm going to move into actual news this week because we do news and predictions and everything else and we have questions from you guys. I'm going to put on AR glasses, which are from Focal.

They're at least as in the audience. And what's augmented right now? What's happening? There is a screen right here that I'm looking at and getting some information about you Scott.

And it comes with this. It's really interesting. I just think I was interesting because I'm kind of fascinated where AR is going. And where these glasses, because as you know Google Glass, while it was not a hit, technically it was the right thing.

It was the idea that we're going to have glasses on our face. I think these are pretty attractive. And what you do is you wear this ring. It kind of looks, no?

No, not yet. That's not a wearable. It's a prophylactic. No, not quite yet.

Oh, that's nice. But let me listen. I like these better. I think eventually these are going to get amazing.

What happens is you use this as a joystick and I can see time right now. Yeah. You're going to touch my joystick. All right.

And so what happens? So I get all kinds of information right now. I'm looking at Spotify, whether I want to turn it on and play it. I've got messages.

I can see it in this little eye thing here. And then you can just, oh, it's on. I don't know if it's on. But anyway, so it goes to time, messages, all kinds of stuff that your calendar.

Just pretty much all I think. And I can call an Uber on it, which is interesting. And I'll actually send out texts, which is in my calendar and things like that. So eventually this will have a lot of information on it.

There are technologies you want to over-invest in. There are technologies you want to under-invest in. This is absolutely when you want to under-invest. I think you're wrong.

I think you're utterly wrong. You know who's in this? Intel and Amazon. Well, and Mark Zuckerberg said it was going to unlock new worlds.

No, it hasn't done anything. Yes, but because it's early. You're wrong. Everyone's going to have something on their face that's going to happen.

In any case, everyone's going to have these. And as you move through it, I agree. Google Glass was the first iteration of it. But eventually this is how we're going to get our information.

We're not going to be looking down at phones and staring and wandering around the streets. I think you're going to have a heads-up display and you're going to look at it. And this one is getting there. This is absolutely getting there.

It's really interesting that Amazon and Intel would put this amount of money. And I think a lot of people do believe it. Supposedly Apple's coming out with their own pair, right? I'm sorry?

Supposedly Apple's coming out with their own pair. Yes, Apple's coming out here, which will probably be super attractive. So eventually this will get really interesting. It'll not be as heavy on the side.

But this is a quantum leap from Google Glass. Yes, 100. What's the name of the company? This is Focal.

They're from Canada. So they're very nice. So I'm really, you know, if they make Ray Vans, I may wear them, which will be great. But I think it's really interesting that this is kind of the news, kind of investments that are being made in these kind of things, in food and agriculture and stuff like that.

But let's get to the news today. Big story breakdown. Speaking of large, state AGs go after Google and Facebook. 50 state AGs.

So basically all of them, including DC and Puerto Rico, joining an antitrust probe of Google spearheaded by Texas state AG. California and Alabama are out. They'll figure. They'll probably do it on their own.

Last week, Leticia James announced that she would lead a similar probe into Facebook. Antitrust pros might be the thing that brings Republicans, Democrats, together in this country, which is amazing, because they can't agree on lunch. And it's, you know, it was sort of spearheaded by Elizabeth Warren. She was talking about early.

What do you think about what's happened? What has occurred here this week? So I'm really the thing has dropped or whatever. I'm really hopeful, right?

There's finally a bipartisan issue that people, now they're going after tech for different reasons in the red states and the blue states. I think it's really exciting. And the fact that they're coming together, it's well overdue. It'll take a while.

But it's similar to tobacco. They said, look, we're sick of waiting on DC. We're going to do it ourselves. So it looks like the states are coming for Google.

And we said this earlier. Do you think something will actually happen? What would you predict would happen? What would actually occur?

How long will it take and how long can they agree to it? It'll be years, no doubt about it. But at some point, there'll be a grand bargain, either for an enormous fine or prophylactically, Google will break itself up and come to some sort of deal. So what do you think they're going to do?

Break off YouTube, presumably? Well, you talked about this. You predicted this. You think it's going to be a spin of YouTube.

What's interesting is they're going after the ad part, the kind of the double click part. But something the breakup has started. And what the markets get wrong is if the stock is going to skyrocket once people start doing that. Then why is that?

Well, we make the mistake of believing that antitrust is bad for companies when they get broken up. It's some sort of punishment. And what we have to, I believe we have to do is not look at it through the rubric of they're bad, so we're doing, we're punishing them. But a natural part of our economic cycle is that when a company becomes an invasive species and kills small companies and prematurely euthanizes big companies, then it's healthy for the economy to go in and break them up.

And when we broke up AT&T within 10 years, each one of those nine companies was worth more than the original company. It was broken up into nine pieces. When eBay's mud and PayPal, PayPal's now worth five or ten times, what are you're going to see? So you're going to see a massive unlock and shareholder value.

Breaking up Google, pulling off YouTuber, the ads off of Google are taking Instagram off of Facebook, which it seems to be integrating even further with Facebook dating. Are you using Facebook dating? Just curious. Not yet.

Okay, not yet. Ever would you ever use, if you weren't married, would you use Facebook dating? I'd use all of them. Okay.

And I would just be, you know, at work for some reason they call me Swipe Left, that's my nickname. What? Yeah, I would use all of them. But you feel good about Facebook.

But they're using Instagram as it is. I think Instagram's the right brand for it. I think Facebook is. I don't think people trust Facebook.

I think Instagram's a great brand for it. I think it could be huge for that. But now it's called Instagram by Facebook. So this is interesting too, right?

And this kind of signals the end of the brand era. And that is Facebook has decided to say, all right, Instagram by Facebook, or WhatsApp by Facebook. And every marketing professor in the world had a grand mal seizure when they heard this. Because what this really indicates, and I thought about it, is the end of the brand era.

And that is the way we've traditionally created shareholder value is to come up with a marginal product and wrap great associations around it. An American car that's kind of a mediocre shitty product but make it feel tough and American and like a rock. And then print money with your marginal product, the great associations and great margins. And I think we've officially left the brand era for the monopoly era.

What Mark Zuckerberg has decided. I mean, this is equivalent of folks who I know. Let's call it Porsche by Volkswagen. Or Boeing going, okay, the 787.

Let's call it the 787 Max. Right? This just makes no sense. But what they decided is they want to conjoin the triplets.

And if they can in any way reduce the likelihood that they're broken up, which is a half a trillion dollar franchise and monopoly, that that is worth the erosion of tens of billions of brand value and brand equity. So they're trying to stick together in order to avoid being broken. They're trying to put the three together such that he can say when the DOJ or the states come in, that he can say, look, if you try and separate the babies from one another, you're going to kill the whole being. That sounds sneaky on Mark Zuckerberg's part.

Yeah. What do you think? I hope it's not going to work. If I were the DOJ or the FTC, I would move in right now and I would say, look, whatever you do right now, just be clear, if we find- They have said that.

We'll break your ass up. The head of the Justice Department of Trust. So do you predict a breakup? You think that's what's going to happen?

I think a combination of antitrust and regulation. I think all of them at some point either themselves proactively break themselves up. So predictions by 2025, the most valuable company in the world will be AWS. Amazon Web Services.

AWS will be the most valuable company in the world. Because right now, there's no pure play way to play the cloud. Right. The cloud is the fastest, most growing, most profitable part of technology right now globally, the cloud.

How do you invest as a retail investor, an institution, or a diamond in the cloud? If you invest, you've got to crawl over a search engine to get to Google. Or Microsoft or Google? You've got to crawl over a software company at Microsoft and you've got to crawl over any commerce company and a bunch of other things.

The Marvel's Mrs. Mizel to get to the cloud of AWS. If AWS, if the fastest growing pure play company in the fastest growing sector in the most profitable sector was a stock, we all own it, or all of our pension funds, all of our needs. Interestingly, I've actually spoken to the CEO of AWS and he said he's not going to go public several times.

But we've had this conversation. No one can say, you know what? I'd like to be king because they end up dead the next day. No one can say that.

All right. No one can say that. Yeah. So, but be clear, Andy Jazzy wakes up in the morning and looks in the mirror and goes, hello CEO of the most valuable company in the world.

Right. Well, we'll see if he does that. It seems, it seems, it seems, interestingly, as much as they protest going public, we work. Yeah.

Go on. Go on. Go on. He's a real luxurious hair and says a lot of things about feelings and happiness and whatever.

Yeah. But he's a real estate company and they've been proliferating like Cudzoo all around the country. And when this S1 came out, it was pretty shocking how much he owned a lot of the buildings in it which is about self-dealing. He got a giant $700 million loan, essentially, or took $700 million out.

Yeah. He owned the brand. And then the business is just terrible. It's a terrible business.

So, we started, especially Scott started banging on this IPO which was comical. Like it was weird that they even put out this S1. Well, first off, you've got to be dangerous of cults. Cults are personalities are usually terrible stocks.

So it's typically a CO. Apple. Hello. That's not true.

Come on. I'm on a roll. Okay. All right.

So on average unicorn CO prospectus, they mentioned the name. They mentioned the name Dara and Uber in the Uber S123 times and Lyft was like 18 times. The term Adam is used 169 times in the out of Newman the CEO. You have a company that is scaling its losses so it'll be $3 billion in revenues this year and it'll lose almost that much.

So if I take Uber, which is SoftBank all the time because for a $15 ride you pay $10 for. So it is economically irresponsible not to take Uber everywhere because it's being subsidized by SoftBank. And right now we work as losing almost a dollar on the dollar so you have a company and it has no gross margins meaning that as the company scales it just loses more money. And the thing that's going to actually probably is probably going to ruin the, we work IPO is Uber because Uber has shown that you can't scale a company with negative gross margins.

You just scale your losses. And they're starting what I believe is an in it. Well, I guess we had a lot of, we had Uber's had at code and even Uber Eats looked like it wasn't making much money and that's considered a growth engine which was interesting. But Uber's talking about, there's rumors of layoffs, there's marketing issues, there's obviously the costs coming in and that's also a SoftBank investment that's often put an enormous amount of money in at the end.

So Uber is showing what, that you can't run these business, we can't have businesses that lose money into eternity. Correct. Well, it's okay. So if you, smile direct is going public I think tomorrow.

I envision, I don't know if anyone else knows, it's nice to be doing orthodontia 54. But it's a great company, great technology and a company came in at a lower price point, about half the price point and cut out the orthodontist and has stores and spends some money on marketing and is growing, it's going to grow to a billion dollars this year, it's going to be 150% of year, it's incredible technology and it's got gross margins of 69%. So it's losing money but when you're making 69 cents on every dollar product you sell, at some point if you get big enough you're going to start making money. But the thing about Uber and WeWork is that for every dollar in incremental business they lose a dollar five or a dollar 50 or two bucks.

So this company shows no signs that scale or size would ever result in profitability, they would fundamentally have to change their business model and Uber's showing that doesn't work. There's just a very basic analysis showing that the companies that have lost the most money the year before they go public are generally terrible performing stocks. And all of a sudden the market which is prone to fits of sanity has kind of sobered up and said look what happened on Lyft, times that by two and that's what we're looking at with WeWork. So WeWork by the way great product, actually I think it's a great, you know an interesting company, it's probably worth five or seven billion dollars but the problem is they've invested 12 to build a company worth five to ten billion and the market is realizing that, there's going to be this ripple effect with SoftBank because they have raised money based on debt that was securitized by the value of their stake in WeWork which they valued at 47 billion and the markets are about to remark that debt or that collateral at a much lower price.

So what happens SoftBank has wandered into the handing out $200 million checks to everyone in Silicon Valley. They have that money comes from the Saudis, we'll get into that in a minute, Doug's is what I like to call them, from Jamal Khashoggi and so this money has sort of changed venture capital in Silicon Valley. This has been like a crazy time because what happens is someone does a deal that's already crazy and SoftBank walks in with their giant checks and makes it ten times crazier venture capital's hate who are never really controlled in Silicon Valley at all, there's not enough rat holes to shove all the money down there but they hate what SoftBank has been doing to the company. Yes SoftBank has basically come in and blown all the traditional masters of the universe out of the water.

So typically what's been happening is you're the leading something in cloud and you want to raise $50 million and you get a term sheet from a tier one, VC and Andrews and Horowitz and then SoftBank shows up and says you were raising money at a valuation of $100 million, you wanted to raise $50 so we get a third of the company, tell you what, we'll raise your valuation to $200 million, we're going to invest $100 million and if you don't do this we're going to the number two space and we're giving them $100 million and they're literally blowing every other VC and every other term sheet out of the water so they're hugely disruptive but what it looks like now is that they've been drunk, that they've been throwing too much money at too high valuations and I think we're going to start to see an unwind and whenever you have a recession, largest post-war expansion in the history of our economy 11 years, the recession's always happened, that's the bad news, the good news is to go away but we're due and it always comes from an area we're not expecting and this could be an area, when we see the information economy start to unwind and implode, that could be it, I personally think it's going to be the deficit, we're not worried about the deficit, it's ridiculously managed to have the lowest unemployment in the greatest deficit in the history of the country, that's like hard to do and we're doing it but it could also be, SoftBank could be ground zero for the recession, if all of a sudden all the stuff starts unwinding and all these unicorns start crashing and all these private companies can't get out, there's layoffs in the part of the economy that we thought was going to drive all the innovation, this could be SoftBank and this story could end up being much bigger than we think. People are like, well we work might be the moment, I've gotten so many texts. It's the firewall. Yeah, everyone's going to go just a second, even though it's kind of a relatively silly company in comparison to a lot of them, but it'll be interesting to see if they go public or not, you don't think they're going public, you said that.

I don't think they get out, I think the consensual hallucination between companies and the markets is ending and this company makes absolutely no sense that governance is terrible. Does that ruin the IPO market, all the, you know, there's a lot of people startups here, they're trying to get funded, what would you do if you're like in this market as it starts to unwind, is it curtains for everybody or? I hope not, I don't think so, I think there's a lot of fantastic companies out there but companies that lose money. Here's what's happened, this really weird dynamic.

Amazon invests so hugely invested, we've never seen a company make those sorts of investments and keep losing money. But Amazon has positive growth margins, Amazon was able to create this flywheel effect and spawn these amazing businesses. But everybody has adopted, not everybody, but a lot of companies have adopted this philosophy that if we just grow, regardless of the losses to fund that growth, we're going to be Amazon and we're going to be fine. Yeah, they keep calling themselves Amazon, we're Amazon of?

No, I thought the most outrageous one is they've decided let's take the names of the words of the most profitable sectors. So the fastest growing most profitable sectors of cloud were arguably in software SaaS. So they decided to call themselves SaaS as a service, SaaS, but use the word technology in their perspective, it's 123 times, there's no technology that we work, they're a real estate company. They have an app for meetings.

They've got an app for meeting, that's right. They invest long. They pointed that out to me and emailed. They invest long, they do ten releases, they have a $43 billion in long-term application.

Very analog. $43 billion in long-term obligation, so they'll do $3 billion this year in short-term leases. What could go wrong? And there are companies that build nice businesses investing long and then are being out short-term rental.

Hurts does that. They buy a car long-term and they are a bit out short-term to people who just want to car today, and they make money. That company trades at .2 times revenues. We work as claiming that it's worth 17 times revenues, Amazon is worth four times revenues.

IWG, it's biggest competitor, closest analog, regis, bad plans, bad coffee, but it's basically we work. They trade at two times revenues, and they're profitable. Do you feel better about the scooter companies? You know, my beloved scooter companies.

Didn't they just open? Didn't they just drop in Brooklyn? Aren't there scooters in Brooklyn? Yes, they're coming to Brooklyn.

I have to be in Brooklyn now a lot, which is interesting, but they're giving scooters, which are like underserved. So you scooter break down the scooter world and who wins and who loses and that? I think it's an interesting thing because they do. They don't have the drivers.

They don't have a thing. They start to figure out the execution and the usage of these things. They can do that. They can be like, I don't have to be worth billions of dollars.

But I think the two independent ones, I think, are really interesting. Lime and Bird. Lime is run by a really smart guy just in a podcast from Joe Krauss and some others there. And I think it's the way he explained it.

He seemed to convince me and maybe I'm being stupid, but I really enjoy it. I use them a lot. And you can start to see, it's much more sustainable than an Uber or Lyft, I think, in terms of making money. I don't think it's worth the crazy amounts that are worth.

So just as a citizen, I think they're a menace and the equipment of littering. I hate cities with scooters. I think they're everywhere. Well, get ready, my friend.

Get mad. Well, I don't agree. I think it's a great last mile solution. You love it.

I've seen you on them. It's one of the disturbing images. I mean, Austin, and I see Karakim rolling with you. I think it's like the weirdest, strangest invasion of an alien force in history.

Like, here she comes. You know what? I look good. I look good.

And I like them. And I carry my helmet around. You should wear your helmet by the way. Lime and others are trying to innovate and helmet.

That is a big problem. It's safety. Their biggest problem is safety. I think safety and figuring out the logistics of it.

And that's I think their issue is the people hurting themselves. My brother is always like, if you want to enjoy no elbows, Karakim go right ahead. He's a doctor. Anyway, so speaking of not scooters, I wrote a call this week about Joey Ito of the Media Lab, an appalling, sexist, horrible story of pedophiles, dirty money.

They had taken money from Jeffrey Epstein quite a bit of it. And the head of it, Joey Ito, I know very well, had to resign from the MIT Media Lab because it turned out through a story by Ronan Farrow that he tried to cover up the giving of the money. And they had given a name to Jeffrey Epstein within MIT Media Lab, which was Voldemort. He must not be named.

It was just one appalling detail upon the necks for this thing. And it turned out a lot of their scientists were hanging out at Jeffrey Epstein's island. He was involved in a lot of these dinners. I've been to one or two of them, not with Jeffrey Epstein, thank God.

But he was pervasive within these science and tech communities. And there's going to be more coming out, I think. And one of the things that was interesting is that the emails that Ronan surfaced about that. And so one of the things, I wrote a column in New York Times.

It was pretty tough, Joey, who I've known a long time. And I guess what I wrote was not every fortune is clean. It is impossible for every donor investor and advisor or leader in tech to be perfectly pure. But if you can't manage to say a hard note to those responsible for the dismemberment of a journalist or to a predator of young girls, I am not sure what to say.

So I was trying to, it was incredible though. I'll tell you, I got a ton of pushback from lots of people in the comments and I did a live Twitter. And they're like, what's wrong with taking money from Jeffrey Epstein if it's further good. And I was literally like, he's a pedophile and you shouldn't take his money.

I feel like that should be the way it is. And it was really interesting. There was a big debate going on whether to take money from bad people. But what happened here at the Media Lab was they were covering it up.

So because they knew that taking money from someone who was a convicted sex offender was probably a PR problem. So. Good. So I'm arguing here to learn not to write.

Go back to when he took the money. They took the money. He was a guy who was a sex offender. No, they took it after he was convicted.

Yeah. But he quote unquote served his time. Were they cognizant of the additional crimes? Yes.

No, they were cognizant of the crimes. And it was, I think, you know, there had been rumors about this guy for a long time. But he had been, even that sort of shitty conviction that happened that got overturned, that's why he was brought to New York to be tried here and he killed himself, resting on peace, Jeffrey Epstein. But he, they were aware of the problem.

And so what was interesting to watch in the emails was how much, what links this Media Lab, which is an important tech, a lot of big people, my ex-wife is on the advisory. There's like a dozen, a hundred people in this advisory. It's all luminaries and stuff. She went there.

And what was fascinating was the links they went to hide the money this guy was giving. Yeah. And I just, I was sort of like, every day I think tech cannot get worse. And I thought this is just an astonishing display of lack of any kind of judgment, the same thing, lack of consequences, lack of ethics, lack of care about anything.

And it was sort of like, I was like, I've had it with these people. Yeah. Like this is insane that you have to argue whether it's good or, it's sort of like it's reached Trumpian levels. Like we have to argue about the weather or we have to argue about that kind of stuff.

We've reached a really weird place, I think. And now he had to resign, obviously, and we'll see who they put in his place. But I think this thing goes a lot further because a lot of these dinners that Jeffrey Epstein was at organized by another group called the EDGE.org, which he had given a ton of money to. You know, you had Gates there, you had Sergey Brin, you had Larry Page, you had Marissa Mayer.

They all sort of were, not too like, they didn't hang out with Epstein all the time, but it's just like a really interesting sort of weird, very male-centered environment where things just get passed over. And it was, you know, there was clearly very few women, very few people of color, very few diversity. It was sort of this weird little club, and he managed to like take his reputation and re-wash it. But I wonder if the bigger story, I don't know if this is as much a negative indicator on tech as it is on higher education.

And that is, in the U.S., there's a direct correlation between your ranking as a university and the size of your endowment. So I know this firsthand. You're at NYU, Scott is at NYU. There's tremendous pressure to be raising money all the time, and you can see how these people, the institutions would rationalize, you know, weaken to ethics to raise more and more money.

And it's, I think it all kind of reverse engineers down to this really terrible gestalt in the world of academia, where we no longer see ourselves as public servants, we see ourselves as luxury brands. And we want to raise billions and billions of dollars, but we don't want to expand our freshman seats. So Stanford has tripled the applicants for its freshman class, but they refuse to expand the number of seats each year, such that people like me can stand up in faculty meetings and listen to our deans say we rejected 90% of our applicants and say it with pride, which in my view was tantamount to a homeless shelter bragging that they turned away 90% of the people who showed up last night. Money has totally, money and prestige has totally invaded academia.

And we no longer, we think of ourselves as luxury brands. We've totally lost the script as opposed to public servants. And it's a race to become the Vuitton or whatever the premier luxury brand is. And they need to, they need to totally, we need to totally shift in my view.

I think we should start taxing endowments unless you grow your seats faster than population. And we need to dramatically expand the number of seats. It's, it was, it will be interesting to see what happens at these companies, but it really does sort of, it's not just an MIT, it's Harvard. All of them.

It's all of them. Stanford, USC keeps getting dragged into one normal story at the next. And so what's interesting is a lot of these places are centers of tech or sort of like that, where it's sort of, you know, you sort of wonder, to me, the biggest question is, what kind of influence do Epstein have? And he had some weird ideas about genetics.

Yeah. You know, because he wanted to actually use his sperm to create more Epstein's, which is horrible. But he, how much it influenced the actual science itself by who's funny. And so it's the same idea of why we're taking our cues from very wealthy tech people.

And I think on, on, on, on, Gear Gardeau's talks about this is, why do we go to someone like Mark Zuckerberg and let him determine how education should be reformed? Why don't we just tax him? And then we decide, which is fascinating. Anyways, an interesting question.

Why is, why is space, why is space exploration and the cure of infectious disease now the domain or the sole domain of rich people? Yeah. I want NASA putting us in space, not fucking Elon Musk. Yeah.

Why? It's, so it's very simple. And I'm a capitalist, you know, I don't, I've started companies. I think it's important that we have billionaires.

We, it's literally out of the point. Should we have people worth the GDP of Norway? Does that make any sense? Yeah.

And so all of these unbelievable, inspiring things that we used to pull together around government and have so many negative consequences because we can't pull together as a people, right? Curing disease is something we can all get behind. And we can respect our government, we can all feel a collective investment in that. Putting a man on the moon is something we can all get behind.

Now we've all got a worship at the, I call it the Pablo Escobar effect. He built parks. He cared about Columbia. Is that where we are?

That only people who get money, you know, through what I think is fairly repacious behavior and a lot of genius. They're the ones that build the parks because the rest of us can't afford it. We are, we are, we are becoming that nation. Yeah.

I would agree with you. I don't think they should determine anything. All right. We need to take a quick break.

We'll be back with more live pivot in just a moment. I'm Seth Herndon. And this is America actually. I'm in Washington, D.C.

this week to interview Ruben Geigo. He's a Democratic Senator from Arizona. And he's been thinking openly about running for higher office. But he's recently running to some hot water because of his connection to Congress with Eric Swallow.

I have to learn from this. And I will learn from this. But, you know, for me, it's not a 20, 28 question. It's about what it means to be a better first boss in my office and also a better Senator to my constituents.

This week on America, actually, we asked Geigo about predatory behavior in Washington. His plans for immigration reform and more. This week on Network and Chill, I'm breaking down the institution everyone's talking about right now, but nobody actually understands the federal reserve. With all the drama happening between Trump and Fed Chair Jerome Powell, you're probably seeing headlines and wondering what any of this has to do with your money.

Spoiler alert, it's everything. I'll explain what the Fed actually is, why it exists, and how this one institution controls the interest rates on your mortgage, credit cards, student loans, and more. We're diving into why raising or cutting rates isn't just boring policy talk. It's the difference between affording a house or watching prices spiral out of control.

Plus, I'm breaking down the current controversy over firing Fed board members and why both Republicans and Democrats are freaking out about it because this fight isn't just political theater. It could mean real chaos for your wallet. Listen, wherever you get your podcasts or watch on youtube.com slash your rich BFF. Okay, Scott, let's get back to Pivot at the Lesbians Who Tech Summit in New York City.

Let's get to winners and losers. I'm going to do the first win. Yeah. Obviously, Chrissy Teigen's Twitter feud with President Trump.

Whatever you do, don't make hashtag President Pussy, it's a trend. In the middle of the night, Trump tweeted about how John Legend and his, quote, filthy mouthwife had not given enough credit for his work in criminal justice reform, but he messed with the wrong woman. Obviously, Chrissy Teigen is an expert tweeter, and she called him a pussy ass bitch. And that's where we are in our presidential day.

Nice. Yeah. But he was busy with the Alabama stuff going on for a long time, and then she got his attention. Yeah.

Yeah, that's where we are. Yeah. So she's a winner. I love Chrissy Teigen.

I think she's a great tweeter. I think she's funny, and she manages to, she doesn't keep it clean. That's not true. But I think she does a great job.

And I kind of am fascinated by his continued attacks trying to best her, which is going to end in tears for Donald Trump. So that's my win. What's your win? I hope so.

My win is California, the state legislature, the state senate at AB5, had independent contractors or Uber or driver partners, which is Latin for no health insurance, no minimum wage protection. They've decided that if you, they've reclassified what it means to be an independent contractor. And they've said, okay, to be an independent contractor you have control of your own time, you have to kind of have your own business, and Uber drivers or partners could qualify as that. But you also can't be offering the services core to the business.

And it's going to be very difficult for Uber to argue that the drivers aren't core to the business. And this is an enormous victory. If you see union memberships been cut in half, and it's pretty straight math. Everybody complains about the fact or we're like, how did we get to this point where the bottom 50% of America has about the same wealth as seven families in America?

And it's a direct correlation to the absolute shit kicking that unions have had and the fact that we haven't really had a minimum wage raise in about 30 years. So this is, I'd like to think that this is a firewall. This is us saying enough. I know, I know, I know, I know who just signed it into law.

Uber says it doesn't apply to them. Or is making the argument that it doesn't apply to their contractors. Oh, they've already funded, significantly funded. They've allocated $20 or $30 million along with some other companies, DoorDash, et cetera, to fight this and take it to the Supreme Court.

Yeah. But it's time. I mean, it's absolutely time for workers to rise up and for us to, I mean, I remember you. Well, there are business plans even further.

Like, and I, you know, one of the best interviews I've ever done in terms of getting someone to say something just awful, which is my goal in every interview, was when Travis Kalnick, who was the previous CEO and one of the founders of Uber, I asked him what, I said, you know, your business has some financial difficulties in getting profitable. And he goes, well, you know, when the problem I have is that guy in the front seat. I'd like to get rid of him. Yeah, he's a cost.

And once I get rid of him, I have a great business. Yeah. And I was like, what? And the whole audience went, what?

And I'm like, like you say, go on. Yeah. And he just, it was fascinating for him to, like, admit because he was evil and that's what a villain does in a Bond movie. So I'm going to kill you now, Mr.

Bond, by cutting you with a laser in six parts. So it was really interesting. But I think that they are not going to be able to, I'll run this, do you? I don't think they will.

No, I don't. Let's get rid of the guy in the front seat. Yeah, and let's go to our losers. Losers.

It's all about shareholders. And 50, 70, 80 years ago, companies were evaluated. It was prestigious to have a lot of employees. That was prestigious.

It was prestigious to be seen as a really good citizen. It's paying your people well. Those were signs, those were markers, not just your share price. People probably had a stronger view of the company based on those things and didn't know what the share price is.

And we've seen Twitter basically file suit in San Francisco refusing to pay that tax. Yep. Going after that, I think that's a big lose. And I think also Amazon, you want to talk about heroes and I brought this up a lot.

Amazon supposedly got very angry at questions around unionization and the pushback that got from local officials here in New York. And so they quote, unquote, took their bottom at home and they pulled out of New York. Remember that? That was six months ago.

LinkedIn is amazing. You can go on LinkedIn and you can scrape data and you get a ton of insight. Apple has about 15 or 20 open job positions. Google, 100 open job positions in New York.

Amazon has 800 open job positions in New York right now. In the last six months since Amazon pulled out, they've increased their hiring. They've hired 1,000 people at Amazon in the last six months. They've hired 500 people at AWS.

That means they are on pace to bring those 25,000 jobs. Right? Why? Because Jeff Bezos was always coming here.

A three-year-old man with $160 billion wants to roll in New York, not Indianapolis or Denver or Columbus, Ohio. That was ridiculous to begin with. And guess what? They are bringing those jobs here to the greatest city in the world.

And you know what? That guy had to put his fucking hand back in his pocket. AOC, State Senator Gianaris saved us all $3 billion by saying, you know what, boss? You're coming here.

This is the greatest pace in the world. We do not need to pay you for your midlife crisis. This is a huge victory for us. I love when you go all AOC on me.

It's really nice. Not so much when you go other ways. But I like AOC. But it's true.

Absolutely true. We don't need to pay them. Like the idea that we subsidize. You pay to be in New York.

All right, exactly. My fail is Trump tweeting. All this tweeting about Alabama. The tweeting about running in the election for 2024.

Don't you love when presidents talk about subverting the Constitution. Which is just Wednesday for us in the United States anymore. And the whole Alabama thing, it was insanity. The only thing I didn't know how to feel about was the whole John Bolton tweets.

Because I hate John Bolton. So I was like, who do I vote for here? Like, who do I root for? Like, you know what I mean?

That's right. He's out of the government. That guy has really been a persistent asshole for 20 years. So it was an interesting thing.

That was my thing. But they're tweeting about this. It's really weird. I think looking at his mental illness is something we need.

Well, we know this already. But I think it needs to be taken seriously by journalists to start to. Can I have a second win? I think there's a lot of good things going on right now.

I'm really hopeful. All right. All right. All right.

We have questions to get out of here. But the repudiation. Boris Johnson. Yeah.

Yeah. So the line to the queen. One of the things I don't like about being a Democrat or I don't like about us is I think we're wimps. So Fox Talks has a week called socialism for capitalism and constantly calling a socialist.

And I think it's time we started saying, you know what? No. As a matter of fact, the worst side of socialism is cronyism which is happening on the other side. I think we need to say no.

And I'm hoping that we're having a sort of reverse d-day when the British parliament, when the conservative party, there are 23 members to fact and go to the other side which we haven't seen among Republicans here with this what all calls soft fascism. And let's be clear. This is a soft form of fascism. Fascism is nationalism, demonizing immigrants are refusal to condemn violence.

And that's to me perfectly describe some of the actions that are happening across the extremist right wing in Europe in the US. So yeah. You call me a socialist. No, no boss.

You're the fascist. And Britain just said no. So we start to push back on a president who's taking money out of our defense budget without a discussion or legislation or any sort of discourse with our legislative body. And Boris Johnson tried to do the same thing in the UK and said not here boss.

We need to do the same thing here. We need less fascism. I like you in a lesbian. You've gone full lesbian, which is really nice.

I wish that lesbian Lindsey Graham would do that. What? Come on. That's good.

That's good. Literally. I think everyone has the photos or something going on there. Anyway.

Come on. I'm going to talk about the questions from the audience. All right. Marianne in the audience.

I don't know where you are. What can large tech platforms Twitter YouTube, et cetera, do to protect vulnerable communities while not accidentally preventing members of the community from reclaiming what used to be hateful slurs. What can they do? Do you want to go first?

No, you go. I think as long as there's a dollar bill at the end of it, they're not going to. I don't think we can call on their better angels. I think they've shown a masterful, delay and obfuscation with like a full concern.

And we continue to see that here's the problem. The underlying business model and the algorithms. species we'd like to think we're a generous empathetic people and there's a large vein of that but we're more tribal than we are generous or empathetic and we're very drawn to violence and conflict and it's the ultimate business model to create a model where advertising gets to target conflict so when we talk about engagement on these platforms what we really mean is engagement so there's an economic interest in letting anti-vaxxers go on and talk about this stuff without stepping in and saying you know what this is not only not true it could potentially be very harmful right it results in an outbreak of meningitis or would have you and so they will always they will always default to well okay rage and hate we're worried about it we're concerned about it but don't get in the way of it so the bottom line is we need legislation we pay 23 cents on the dollar to DC into our state government such that they can prevent a tragedy of the commons and these companies will never make that connection so what we need to do our elect officials that hold them to the same standards and scrutiny we've held other industries and companies but folks they're not gonna get there on their own when it's raining money your vision your vision gets blurred absolutely I agree with you on that one all right what will happen to lift an uber drivers because you do predictions mostly so what will happen to lift you well I think all of us probably need to take fewer ubers you know I don't know I don't know if it makes sense for a professor to be taking a suburban or what I'm gonna be taking for 80 bucks I should probably be angry that it's takes a long to get to the airports and vote for people and be willing to pay taxes such that there's public transportation to these places you know like they've done in Europe for the last 50 years right so I'd like to think the workers get a little bit more dignity the wages go up that we go to minimum what by the way remember all this all the fear mongering about what happens if you raise minimum wage to 15 bucks yeah that hasn't panned out anywhere no hasn't panned out anywhere so I hope I hope it just across the board the gig workers and everybody else just that this California legislation goes national yeah do you think it's gonna have I do I think you know it's interesting I did have a discussion with Gavin Newsom and his lieutenant governor and he didn't have anything to do all day so he'd have lunch with me we talked about this a lot this idea of reclassifying workers and creating a new kind of worker so I do think this I think California I'll be writing about this next week in the New York Times is really the de facto national legislator for everything whether it's a privacy bill whether it's a five with a car deal the deals are making with car so I think in weird way Gavin Newsom in this in the Senate there is determining a lot of our regulations for tech and Margarita who just got a giant job and she got quantumly more scary for which she's fan she's a badass speaking about us women who here is in a union anybody here in the Union when I was I went to UCLA and I was I was I turned on the Washington but I'm not now but so junior UCLA every summer UCLA I had basically twelve weeks to make twenty three hundred bucks so I got four to go back to school and I worked as a box boy at San Vicente Foods and this guy took an interest in me and he said do this do this and he had me fill out a bunch of paperwork and he says gonna cost you eighty bucks up front I have any dollars like we're putting you in the union and I went from four dollars an hour to eleven dollars an hour like someone taking an interest in me in the power of unions and by the way everybody seemed to be fine shopping in Bellaire at San Vicente Foods and it literally paid for my junior year at college was somebody saying there's there's dignity and work and anyone who shows up here impacts other people's groceries should pay get paid eight or nine bucks an hour in 1986 as opposed to four bucks an hour and it so I got through my junior college and I think that needs to happen across millions of households we need to raise I mean I'm really on my soapbox now but I think it's I would really love to see a reinvigoration of unions well it's interesting that it's happening actually at internet media companies it's a there's been unionization efforts more anywhere else than well but the internet media companies Vox had went unionized they're obviously working on BuzzFeed and by snooze and stuff like that so it's a really interesting time because it's the it's the media companies that are doing that internet media companies and I know it's a struggle at Vox but they ultimately came to a deal with with the unions it was interesting but I also did I'm not in the designation now for the vox union but but it's an interesting trend we'll see unions have been so kneecapped it's kind of hard to imagine that's right last two 2020 tech IPO predictions got Galloway the biggest IPR the most successful IPO of 2020 is gonna be Airbnb Airbnb yeah we're gonna see bullish on this one Airbnb is gangster Airbnb is an incredible concept because with uber uber has no moats the core business has low margins Airbnb is the exact opposite you have to have global supply that means you have to have people who are know about Airbnb coming up from Copenhagen in Tokyo so that's incredible mode it's well run you you like the CEO I do very much they have issues around what they do to cities and removing rental properties at big cities but in general he's very aware of these things and he's not just saying I would I don't get from him I was I get a really strong and interesting discussion and you can really shame him which is always helpful but I find I don't get a you know we'll do better yeah we've made some mistakes but we'll do better what kind of internet do we want what kind of internet do we want first amendment I'm proud of our product knowing what the first amendment is what yeah and then and then it's easier to pick the losers uber uber lift Tesla beyond meat all down 20 to 80 percent in 2020 how about you I think Airbnb Airbnb maybe Pinterest yeah we'll see you think I'll do well Pinterest I have no idea yeah Pinterest I'm paid attention in years they've done well Pinterest is actually interesting all right thank you so much this is Kevin Scott Galloway our les grow thank you very much Scott always lovely to see you in person and thanks to Lesman's attack for inviting us today show was produced by Rebecca Sinanas and Eric Johnson Eric Anderson is pivots executive producer thanks also to Rebecca Castro Drew Burrows and a shot Kerwa thanks again to lesbians who tech for having us make sure you subscribe to the show on Apple podcast if you like this week's episode leave us a review thanks for listening to pivot from Vox Media will be back next week with another breakdown of all things tech and business