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This is a test of the hotel's not safety down system. The manual here is part of this test. Scott, what is that? What was that?
I can't interact with other people right now. Hi, everyone. This is Pivots, New York Magazine, and the Vox Media Podcast Network. I'm Kara Swisher.
Scott, what is going on there in Vegas? Have you done something bad? Are you in an episode of The Hangover? No, I just didn't like the current speaker, so I pulled the fire alarm.
Word is he's a Christian nationalist. I figured if I pull the fire alarm at the wind, I could delay the vote. Is that wrong? Is that wrong?
It's stupid, not wrong. Well, I went to the sphere, which, by the way, is incredible. I saw you too. I haven't seen that many white people since I saw Taylor Swift.
It seemed like the Lexus to Remember September event. It just couldn't have been any whiter. I mean, it was just wonderful. Lawn would look great, and Lady Gaga came out, and the sphere.
Oh, that's good, yeah. It really is incredible. Yeah, I think the sphere is what I'd be looking at. I literally could not go see you two.
I can't. I just can't. Why not? I've never liked them.
I've never liked them. Oh, that's amazing. They're like the Dave Matthews band to me. I'm like, oh, no, thank you.
Did you like them? Really? Oh, I love you too, and Vegas is awesome. I'm here with three friends.
My friend Greg, who I've known for 30 years, my friend Lee, who I've known for 40 years, and my friend Adam, who I've known for 49 years. Oh, that's lovely. That's a lovely talk to all of you there. There's no good way to make this transition in any way, although it's nice to be with your friends, but I want to mention the horrifying news out of Lewis in Maine, where these 18 people were killed, 13 injured in mass shootings at a restaurant in a bowling alley on Wednesday night.
As of this recording, the suspect is still at large, if you can believe that. There's an intensive manhunt underway, and a shelter-in-place order for several towns in the area. This is another gun tragedy, another mental illness tragedy, it looks like, from what they're talking about, the person of interest. I just, this is, I don't, there's no words.
I don't have any. Yeah, difficult to say anything that hasn't been said. Yeah. I think it's important, and I appreciate you bringing it up, because you said something that always struck me, that humans are adaptable, and unfortunately, we've adapted to this.
It's been unnormalized in our society. Yeah, it's a big gun culture in Maine. I have a lot of friends from Maine, and, you know, I just, it's not the reason for it. It's fine if you are safe, and they have all kinds of gun checks, but they don't.
And so, this person had been, that's the suspect, let me just underscore, he's a person of interest, or the suspect, had been in a mental health clinic, apparently, and so I don't know why he still had a gun after that. I don't know, we'll find out more, because it's an unfolding story, but again, our hearts go out to the people in Maine. But that'll be, the NRA will spin into action and talk about his mental health issues, and what bears repeating is that we do not have a monopoly on mental health issues. We do not, other than teen depression, which is, there is some evidence that we might be doing worse in other countries, but in terms of mental illness, we don't disproportionately over-index or under-index, but we disproportionately over-index this if we give everyone, including people struggling with mental health, access to weapons of war.
That's the Delta here. In Maine, people don't realize this, they tried to pass gun control laws, and it ended up being even looser restrictions under the previous governor. Anyway, it's a tragedy. It's another, it's American tragedy, is what it is.
Speaking of another issue in the news, Republicans finally chose a speaker, but who exactly is Mike Johnson? Listen, I'm not liking what I'm reading about him, plus the landmarks who filed against Meta and Elon's first year at X. But first, the UAW and Ford have reached an agreement on a new contract that could bring an end to the nearly six-week strike for at least that company. The UAW says the deal includes a roughly 25% pay increase over four years, cost of living wage adjustments, and major gains on pensions and job security.
The deal also needs to be approved by the UAW local leaders and ratified by a majority of Ford's 57,000 union members. It continues to negotiate with GM and Stellantis, which were the other two big auto companies, but Ford is the first one to, I assume they'll settle relatively quickly. Again, this is something you thought would happen. Look, I like this.
In about 1975, wages and productivity disarticulated from one another. When productivity went up and there was greater shareholder value, wages went up and everybody shared. And then the wage line went flat and capital kept, productivity kept going up to the right. And this is an instance of what, you know, where I think unions played a productive role.
I think what happened here should have happened, and that is the auto industry is healthy. It's not like writers or actors where there's 10 people who want to move to LA and do it despite throwing up jobs. So these workers actually have some leverage. The industry is doing well.
The increases in wages will cost them, or the increase in labor costs will cost them about an additional $1.3 billion, I think, which are $1.5 billion, which is about 13% of their operating profit. So I think this is a good thing. I think that these workers were due. They hadn't had a raise in a while.
25% of their own money. They have other stuff, including pensions and bigger starting salaries. And people get to senior status faster. We need to push money from shareholders and capital back into labor.
And the UAW handled this well. They were targeted. They were strategic. They understood where they had leverage, but they didn't.
The initial deal was for 20%. Their vote was 40%. They ended up at 25%. And to your point, Jim, and Solantis will probably settle soon after.
So I think it's a good thing. Yeah, probably. And it'll be a four-year deal, which is good. In other news, President Biden is set to unveil an executive order on artificial intelligence next week.
This will be the government's most significant attempt to regulate the technology. They're letting us in the White House. How is that? We're influencers.
They're bringing in influencers, they said. And that is us, apparently. But maybe you can answer the question. Sure.
My kids asked when I showed them. I got the invite. I was very excited. It was a nice moment.
My kids were really impressed. Why are they inviting us? Because we're influencers. Because we influence them.
Are you being serious? They think that we're going to be fond of this? Yes. Yeah.
They want us there. You know, maybe a little, you know, hello, Mr. President Biden. That kind of thing.
You know, I think us being there, we'll see if we like it. We don't, let me tell you, White House, if we don't like it, we'll say so. I mean, it's great if the president will tell the agencies how to behave, and I think that's appropriate. But ultimately, this is something Congress has to do, you know, pass laws around AI.
It's not going to be by executive order. But it's good. He's been doing this a lot on AI, and because the Congress refuses to act, but it's still not enough, certainly. And best practices, that's a good thing.
You know, I've been having a lot of these meetings. And we're there to just be the pretty ones. I have a feeling that you're going to have six or seven Secret Service people on you alone, and we'll see what happens when you go there, if you ever come out again. Well, I heard you're having an affair with a female spy that referred to it as lesbianage.
That's good. That's good. Oh, my God. That's not good.
That's so bad. Why is that good? That is not good in any way. I think the idea of you and I at the White House is fantastic.
I think it's fantastic. We're going on these adventures. We just were in California. We had a really good time at this beautiful resort in Napa, and now we're doing this.
This is nice. Our little adventures. But if you get in your situation room, I'm going to order them to tackle you. That's the situation.
Well, hold on, hold on. Let's just stay a little bit behind the music here. I get invited, and so you find a way to muscle your way in. I didn't find a way.
I was also, it's a Kara and Scott. By the way, my name first. No, I got it. I will send you the invitation to both of us, and they forgot to forward it to me.
It came into our pivot email, and they were wondering why I hadn't responded. I have been hauling a suit around the grade. You're wearing a suit? Oh, not me.
I'm at the White House. You're not wearing a suit? No, I've been there a hundred times now. You've never been there.
Yes, I know you're a hundred times more important than me. No, I've never been there. I didn't say that. I've been there a hundred times.
I've lived in Washington. Well, yes, you did. A little bit. I didn't say that.
I have a weird insecurity about everything. I just happened to be there. My insecurity is called Common Sense. Have you met me?
I covered it as a reporter, so I've obviously been there. It's wonderful. You're going to love it. I'm really excited.
It's a thrill every time I go there. I'm really excited. There's a lot of checking. A lot of people, you have to give your things.
It's going to take a minute to get in there. I think that's the smart thing to do. And I'm going to get you a special tour, because I know people. I'm really excited.
I can't wait to see what the White House. Anyway, we'll see what happens. We'll see what the executive order is saying. We'll have a commentary on it.
And then hopefully Scott will not be jailed. That's a 50-50 chance on that. You know, I have never had any interaction with law enforcement. I've managed to avoid all that.
I'm just about to. There's a lot of it at the White House, and it needs to be there. My friends in the agency, I hang out with the ICX. I hate that Apollo thing around.
You know what's interesting about AI? A couple of things I learned from the AI panel. I think you may have posted it or moderated it. I probably did.
You want to listen to it. But someone said that they think that it'll be great for agencies. And the example they used was the IRS. They said that AI would be able to sort through very complicated tax returns and say, they ended up, in the majority of times, coming to the same agreement or price settlement as lawyers.
Yeah, faster. Yeah, like a tenth of a second, right? Yeah, it's really an impact law. That is absolutely true.
And also what I would say is there was someone from the Central Intelligence Agency, a former CIA individual in charge of cyber defense, Andy, I forget his last name, really impressive guy. And also we had former Secretary of Defense Esper there. Impressive, man. And then the former Ambassador of Russia at Stanford.
And I'll tell you, every time I meet these individuals, I just feel better and better about America. These are both sides of the aisle, all of them super smart, super devoted, very honest, very open. And you can tell a lot of these guys, you know, they were hanging out with a lot of masters of the universe who had made tens, if not hundreds of millions of dollars, and the only difference is when people decided to serve their country. Yeah, I agree.
And these are really impressive, hardworking people. I would agree. I would point out that Esper was fired by Trump for doing his job. That's like a merit badge of moral compass.
I know, but it's incredible that this is who Trump was firing. This very impressive guy. Just to be noticed, a very quick thing we mentioned last week, it's been a year since Elon Musk purchased Twitter and the report card is, as we have said, not great, which we predicted. Daily active users are down compared to a year ago.
U.S. app deal loans are down 57%, according to third-party data. X's top five advertisers are spending 67% less on ads than they did before the acquisition. There's also, the subscription plan hasn't paid off, content moderation on fire, seems to be getting worse every day.
Elon tweeted that he was going to buy Twitter to help humanity. I don't think he's helped himself. He is all saying these are all wrong, of course, has said that, and everything's up and to the right, and so has Lindy Agarino. But it's pretty clear the business is cratering in a really significant way.
A lot of it having to do with just changing the name. I want to share a prediction you made right here a year ago as the acquisition was about to go through. If you're going to see in the next three to six months a direct, credible new competitor to Twitter, there's just too much opportunity here. It's been so poorly run for so long.
There's so many addictive, wonderful qualities to the notion of a microblogging platform. There's just too much opportunity here, and so many users, so many advertisers are just sick of the Dorsey, Elon, Sideways. There's so much human capital that's experienced in the sector, so my prediction is you're going to see a competitor merge. Yeah, some certain threads, I would say, is probably the most significant one, but there's a lot of them.
Yeah, the thing I got wrong was I didn't think there was going to be threads. Obviously, we haven't heard of threads yet, but essentially, Twitter had 100% or 99.9% of the quote-unquote microblogging market, and now has 82% because a new competitor of Threads has 18%. Yeah, and there's more others. The real thing, the real stat here is that a year post-acquisition, X is singular.
Twitter is singular. I cannot think of another company in non-wartime that has lost somewhere between 55% and 70% of its revenue. There's over a billion dollars in a 12-month period. This is the greatest meltdown or poor business performance in history, and my theory, my theory is that he wants the company to go down so much that he can buy back the debt on pennies on the dollar, and he has hired a CEO, and he said, go to that, go to Cariswitch's conference and act aloof, stupid, ignorant, and like you don't know what the fuck you are doing, and Ms.
Yaccarino said, I got this. I don't think she meant to do that, but that's funny. There's a lot of rumors around her, whether she's going to say, just recently, I have quite a few. Really?
And is there a rumor she's going to be fired, or she wants out? I'm trying to track it down. I just have heard a lot of it recently, just this week, and I don't know why there's so much noise. You never know.
You never know that there's names of people who would replace her. Maybe she's sick of it. I don't know. I'm sure she'd deny it or say we're wrong.
I'm just telling you there's a lot of noise out there, Linda, about you. Whether it's true or not, I don't know, because I haven't done enough reporting. By the way, traffic to his account has doubled. He's basically said, I don't want advertisers to see anything, and if they see anything, there's a chance to be next to a swastika, because I fired the whole safety team.
But I want more and more people to come to Microfile. Yeah. What's interesting is, I talked to some people about that, about what's happening, and the reason why, you know, there's the expression you've used, that banks are not storage facilities, they're moving companies, right? They move money, and that some things are storage facilities, right?
Some financial instruments are stored, and that these banks should not be holding this debt, but that they can't get rid of it because of the loss is so big, and so they're sitting there, and it's sort of a death grip between Elon and them of who's going to play first, right? And so if it goes down to the price it is, he's hoping to get it out from under them, this $13 million in debt, and there are buyers out there, but Elon will always pay a penny more, right? And so, you know, who's going to be, will he declare bankruptcy? Will they force him into it?
Doubtful. I don't think he'd want to take the L here and be like Cersei walking through Westeros naked, having someone behind her. That's a visual thing. Shame, shame, shame.
Anyways, but I don't think he, the reason why when I talk to big investors, I say, if this thing goes out, they're saying that they think it's going to go out at 85 cents. And what you're referring to is that the banks have to report the loss on their next earnings call when it trades, the first trade when they move it. And they experienced an unprecedented acceleration interest rates for 12% coupon on debt on a company that has massively declined in value in concert with a dramatic increase in interest rates. They just got caught holding a melting ice cube.
And once they sell it, they have to recognize those losses. So they're hoping, they were all, and the three of them are coordinating, Sparkleys, B of A, and Morgan Stanley. They're all hoping that the markets would recover. But my guess is not officially, but Musk has sort of a rofer here, a right of first refusal, and that is they'll go get the best offer they can from a big credit investor.
And then he'll turn around to Elon and say, wouldn't you rather just not have anyone with any debt against you? Who will fire you, by the way? Who will fire you? Well, they won't have that power, though.
As long as he makes those interest rate payments. Well, you have debt, you don't have governance, right? What you have is just a claim against the company that's first line in the cash structure. Yeah, well, he's saying if he doesn't pay.
You're right, he can hold it. He can wait them out. As long as he's willing to lose money, which he has been, obviously. He's plenty of it.
He's in the power position, sort of, in a weird way. Yeah, I mean, some people have said that he's massively over-levered, but I just think the increase in value of his holdings, that at the end of the day, 12% on 13 million is, what is that? That's 1.56 billion a year in interest payments. He has that change in his couch cushions.
Yeah. So I don't think he's going to... As long as he wants to hold it, as long as he's interested in it, he can do it. And their banks are fucked.
The banks should never make that loan, but they did. And here we are. Well, actually, make a prediction now. Do you think he'll get a hold of it?
I think he'll get a hold of it. That's my guess. He'll get a hold of it. I don't know.
I really don't. If he has to buy the debt... I mean, keep in mind, it's face value of 13 billion. If it comes out, if they get 85 cents on it, free market...
They're not 85 cents. Everyone says 40 to me. I have to say... No, I like 40.
If it was 40 cents, that would be an effective coupon of 25 or 28%. And anyone would take that risk, because Twitter is worth 5 billion. Anyways, but I read 85 cents, so whatever it is, but he still costs 70 cents. That makes it come up with $9 billion to buy that.
I don't know. I don't know. It's a lot of money. You're right.
It's a death group. That's what they said. But then again, the guy's worth $250 billion. And this is the problem.
There was a wealth tax that was being proposed as rearing its head again. I used to be against it. I think it's sort of private property must pay taxes. You can't really come in and start taking money from people.
I'm now with the mind when I see our deficits and just how much money has been crowded in the top 1%. And you have an individual who can make these sorts of decisions that have such an enormous impact on the world. Because of the aggregation of wealth, I'm not starting to think we do need a multilateral, some sort of wealth tax. But anyways, I just think it's insane that someone can make these sorts of purchases.
Yeah, interesting. We'll see what happens. But, you know, I do think he's in the full position in this case. I didn't really lose her way, but still.
Okay, let's get to our first big story. After three weeks, three failed candidates and hours of closed-door negotiations sounded rather testy. We finally have a Speaker of the House, Louisiana Congressman Mike Johnson. Yes, you have never heard of him.
That is correct. Johnson was elected on the first ballot Wednesday in a 220-209 vote with the support of all House Republicans. They all got exhausted, I think. I think this guy got lucky that way.
To give you a sense of who he is, since no one's ever heard of him. He's an evangelical Christian, a social conservative. And let me just say, he's a social conservative. A social conservative who's opposed to certifying the 2020 election.
In fact, he was at the forefront of that. The forefront of that. Not just one of the many. He was at the top of that pile.
Voted against H. Ukraine. Is anti-abortion. Has worked to ban same-sex marriage.
And last year, sponsored a bill that basically a national version of Florida's don't say gay law. As you might imagine, I'm loving him. No, he's really unqualified for this job. And the fact that he's second-line to the president is terrifying.
This guy is unqualified for this job. And so far to the right of most Americans, it's really quite astonishing that they went with him. I can't believe it, but Jim Jordan's less problematic than this guy. Yeah, I mean, based on my initial read, it's David Duke without the baggage.
You know, it's just, if you read this guy, his background. First off, his statement was really troubling. He said that God has ordained us. And when someone actually believes that God has ordained us.
And then don't say gay bill. I think he believes it, yeah. I think the most, he claimed that school students were a function of them teaching evolution in school. And then, and even equally disturbing, not more disturbing, he used a more elegant, you know, legal language means of trying to arrest the peaceful transfer power.
So the second-line, it's just enormously disappointing. If you think more broadly, I believe our government is essentially being run by, or kind of on three pillars, if you will. The first is, economically, our policies are dictated by what's best for the top 1%. Whether you look at our tax policy, whether you look at bailouts, it's really like, okay, throw some loaves of bread and some circuses for the bottom 90.
But it's really all about ensuring the 1% stay as wealthier or wealthier. On social policy, we've become this white Christian nationalist government. I mean, if you look at what has happened from a public policy, a social policy standpoint, whether it's Roe being overturned, I mean, school, ridiculous proposals. It's very hand-based, Dale.
It's white Christian nationalist. And then the third thing is, in order to pacify the far left of the left, well, let's engage in reckless spending and have $7 trillion in expenditures with $5.5 trillion in receipts. Well, the only thing that passes for anything bipartisan is reckless spending. Oh, you want to cut taxes?
You want more social spending? I know. Let's do both. And so what you have is a country that is, in my opinion, where every country is making progress, is regressing.
And the notion that, as you said, the second-in-command, try to get in the way of the peaceful—on an economical— He was a key lawyer. This is not just some guy who's just like, oh, Trump's going to yell at me. This guy went into it with great enthusiasm and threatened other members. It's a very different level of involvement, and this guy was right at the top of this thing.
He believes God doesn't like gay people. I mean, this is—I just hope Kamala and the vice president and the president don't travel together. I agree. I was thinking that myself.
They thought that this guy might be president. Yeah. Also, the other Republicans are worse. The ones that don't believe—these middle swishes who actually resisted Jordan didn't resist that because he's friendlier and wears a nicer suit.
No, no. No, no. But here's the thing. What was really disturbing was that photo of all of them when a reporter asked a legitimate question about his election denial stuff, and the Republicans, including some old lady in the front, were booing and yelling, shut up.
In response to that video, I tweeted, here I'll self-emoliation combine the toxic stuff up very empathetic power gossling and a desperate need for attention. This is the GOP 2023. I can't believe they voted for this guy if they wouldn't vote for Jordan. I don't even get it.
Jordan's less so of this guy. Let me just say, he also has a podcast with his wife, Kelly. Their podcast co-hosts. They have a show called Truth Be Told.
Let's listen to a clip from earlier this year where the two talked about what scared them about some members of Congress. Some of these voices now are in this chamber arguing that our rights do not come from God. Think about how scary that is. If you believe your rights come from government, then it means you don't really owe any allegiance at all to God.
Yeah. You have no accountability. Well, you're not free. You're not free because the people who are governing you and giving you things in exchange for those things always come to sacrifice of your liberty.
Absolutely. Okay. It's called the Constitution, sir. This is the guy in charge of the Constitution right now.
I think I met them. I actually think I met them at a key party in Boca Raton. Yeah, no dick jokes on that podcast. They sound like fun people to roll with.
I'm sorry. So as an atheist, I don't have an invisible friend. What does this mean for me? I shouldn't make taxes.
That means you cannot make dick jokes on this podcast next year when he takes over as king. He's not exactly a household name. Do you think that's an asset? This is kind of where we are in terms of our politics.
It's easier if you don't have a track record to run on. People knew who Jim Jordan is. And it's not him. Nobody knows who this guy is.
They didn't have enough time to look into the fact that he's blatantly homophobic. That if you look at the most unstable nations in the world, they generally are run by people who you can't reason with and can't negotiate with because they think God is on their side. When good people do good things, bad people do bad things. When good people do really bad things, it's usually because they live in a society where old men have convinced them that God is on their side when they do these things and that they are morally superior because of the God they worship.
It's one of the basic foundations of our society is that we're secular. We say, look. He also rules over one of the poorest districts in the United States, by the way. Real problems of poverty there.
Even Susan Collins, a reporter, asked what he'd like to work with him. And she said she'd have to Google him. I mean, you've got to be kidding me. But now we know.
It's very clear what this guy is pretty quickly once you start to read up on him. Yeah, I don't know what this means. I'll be very curious. What do you think this means for the Republican Party and for the elections?
Do you think this hurts them? I think they're fucked. I think, you know, he's super. He's not just anti-abortion.
He's real anti-abortion. He's way down that lane. So I think that's a problem because the electorate has indicated that they're not. There's, of course, the government shutdown coming up.
So who knows where he stands on this? I think he's inexperienced at running this. So that's an issue. I don't know.
I think he's anti-gay and anti-abortion is not particularly good. That ship has sailed for most of the electorate, not for these people, but most of the electorate. You know, I can't tell how much of it is just my anger and depression growing as I go older. But I look at the far right white Christian nationalists.
I'm incredibly disappointed, quite frankly, by some, what you would think of as bastions of far less progressive leadership or thought on campuses. I can tell you the faculty on these campuses. We're just absolutely flummoxed at what we're saying. Yeah, I agree.
You know, I liked Ronald Reagan when I was 17 years old, so I don't know what to tell you. I think people come around as they become better educated. I can't get over that. I was actually, I was, I got so much shit in my fraternity.
I was literally, I don't want to say ostracized. We've got a lot of shit because I was the one guy who was supporting Mondale. I don't know why I liked Reagan. Oh my God, it's impossible not to like.
Yeah, like a message of hope, mourning America. I was tired of Jimmy Carter. I think that was all. I don't know.
I think Ronald Reagan is cuddly compared to these guys. Oh, come on. He's just your basic conservative, although he was heinous on AIDS and things like that. But nonetheless, you know, he's, you can see why.
You can understand, you know, he was much more, um, anyway, we're so far away from Reagan. I can't even tell you what this guy, this guy is a dangerous person. And by the way, I think, you know, interestingly, everyone's like, he's, he's like, um, Jim Jordan with a jacket and a smile. I think he looks, when I looked at a picture of him holding gavel and he had a little smirk on his face, I thought, oh, he's preening.
He's a preener. The word preening completely. And I thought he's a very flossey preener. And I don't know what to take away from that, but that was my first.
I was like, oh, he knows exactly how he looks all the time. And I don't think Jim Jordan does. And that's a compliment actually for him. That's the only one he's going to get from me, but he's quite a dangerous choice.
Anyway, Scott, let's go on a quick break. When we come back, we'll talk about meta getting sued and take a listener mail question about leadership styles. When is it okay to be an asshole? This is not the place to get the news, but it is the place to feel a little better about it.
That sounds like a lot. Part of the Vox Media Podcast Network. I'm Maria Sharapova, and I'm hosting a new podcast called Pretty Tough. Every week, I'm sitting down with trailblazing women at the top of their game to discuss ambition, work ethic, and the ups and downs that come on the path to achieving greatness.
We'll dive into their stories and get valuable insights from top executives, actors, entrepreneurs, and other individuals who have inspired me so much in my own journey. Follow Pretty Tough wherever you get your podcasts. Scott, we're back with our second big story. Meta is facing a major legal battle.
41 states in the Washington DC are suing meta, saying the company harms kids by building addictive features into Instagram and Facebook. No shit, Sherlock. A 233-page federal complaint alleges the company engaged in a, quote, theme to exploit young users for profit by misleading them on safety features and harmful content. Another no shit, Sherlock.
Consequences for Meta include financial penalties and restitution. Meta said in a statement to agree with commitment to providing teams with safe positive experiences online, but also expressed disappointment when the state officials taking this path. This is something you've talked about a lot. What do you think of this sweeping action?
And there's lots of other multiple lawsuits. Attorneys General from 33 states filed the federal suit together, and eight states in D.C. are filing separate suits. There's a lot of legal activity.
Yeah, it reminds me a little bit of the tobacco litigation. I think it'll be drawn out. I think it'll get to the right place, but I think it'll be a decade. And unfortunately, the numbers are just so enormous, they'll be able to register tens of billions.
I don't know if you saw Meta's earnings. They're nothing short. Staggering. Yeah, we're going to talk about those in a minute.
That was funny. But, you know, and I was hard enough that my first office were the nine states that didn't join us. I said, look here, I think when we look back on this era of big tech, I think we're going to feel bad about the monopoly abuse. The decile companies who are the most valuable are running away with the stock market.
And that's just not good for the economy. I think we're going to look back on the weaponization of our elections, you know, vaccine, misinformation, and we're going to regret all of it. I think it's all going to be dwarfed by the one regret. And as I think we're going to look back on this era of big, how the fuck do we let this happen to our children?
Yeah. And I think right at the center of that is going to be Meta. And so I hope this grinds through the courts more quickly than it should. I don't know what the legal complaint is.
I don't know how they attribute it back to specific harm when they'll have very talented psychiatrists and experts saying, no, it's... They'll have to be able to see emails. They'll be able to see what they thought at the time. Yeah.
And the problem is, again, the fines to date haven't been an algebra of deterrence, have been an algebra of incentive. It's like, well, this is just the cost of doing business when we get these civil penalties. So I hope that... I just, for example, I just feel like you can't understand why social media isn't educated.
Why does a 14-year-old girl need to be on Instagram right now? It just doesn't make any sense to me. They want to do Instagram for kids. Come on.
They don't. They're way beyond that. If you were Meta, how would you handle this? Just wait them out.
Wait them out. I would do exactly what they are doing. And that is ignore the damage I'm doing to the world because I'm making a lot of money and having a great career. And everyone around me is so friendly and so nice that this can't be that terrible a place.
And let the good people, the chief legal officer and our army of lawyers, ask really thoughtful questions, hold us up in court, pretend to give a good goddamn and call for regulation. No problem because we've got a lot more than that. Depressing little Becky. Although, interestingly, I've been talking to a couple of Meta people who are there and all of them are like, it's the best company I've worked for.
So well, well run. And we'll talk about that in a second. And they're like, I hate myself, right? Every one of them has a version of I hate myself for this.
And so it's a really, you know, and they're definitely like, how can I get out of here intact with my soul in some ways? And it's interesting. At different jobs, like what they do, like some of them are involved in these particular products, but they get it, right? They understand what's happened here.
And they've been there a long time, I'd say. My theory has always been that the more, I don't know, sinful or damaging to society the company is, the more talented and the more likable and the better they treat their employees. Smartest, when I was working at profit, a strategy firm, smartest organization, top to bottom, nicest people, some of the best treated employees, Chevron. Right up there, Altria.
Right up there, Exxon. These are smart. They treat employees really well because they're usually really profitable. It's really strange.
And then, you know, you meet with management like Tom's and like, God, what assholes? I just, it's really weird. The more socially minded, I think there's an inverse correlation between how well companies treat their employees. Patagonia does a nice job, I think.
They're nice. I mean, it comes back to the same thing, the more romantic and sexy business sounds, the more awful the industry is. Go to work in fashion and see how much fun that is. Yeah.
So, listen, here's the thing. They are really good at business. We should note it wasn't bad news for Meta this week at all. Company, More Money for Lobbying, just reported that revenue rose 23%.
How impressive on a huge company. The $34 billion in the third quarter profit was $11.6 billion, more than double from last year. They had a lot of cost last year because the metaverse, they made that shift back. They had a lot of problems last year, including recovering from the pandemic, et cetera.
By the way, another company, which is also running ahead of everyone else, also posting strong earnings, adding 8.76, this is Netflix, adding 8.76 million global subscribers during the third quarter, doing, I think it's this password thing that they're working on, et cetera, 8.5 billion, revenue rising from 7.9 billion a year ago. Whoa, good job, both of these guys from a business point of view. The most unreported business story this week was Meta and Netflix's earnings because what they have pulled off, I think, is arguably unprecedented. And that is, the majority of big tech's massive acceleration shareholder value is a function of one thing.
They're investing in growth. They're smart. They know how to spend their money. Their expenses go up 15%.
Their revenues go up 18%. Their profits go up 20 or 30%. What Meta pulled off this quarter, I have never seen before. And that is, they spent less money.
Their operating expenses fell 7% year-on-year as they reduced their headcount by 24%. So they reduced headcount, they reduced investment, and their revenue accelerated 23%. So when you have the champagne and cocaine of reduced costs but accelerating revenue growth, you end up with an increase in year-on-year earnings of like 100 plus percent. I've never seen it.
And Netflix is the same thing. The Writer's Guild effectively transferred well from the linear guys to Netflix. And what was central to Meta's performance was AI. And that is, they're using AI to increase engagement on the real function of Instagram.
And also, they've used AI, and this gets less coverage. They've used AI to circumvent the non-tracking functionality put in place by Apple. And their advertisers are actually claiming that they did. You're right, you're right.
And they also are being a little creative with Threads. I have to say, I think it's a good product. They moved away from their metaverse bullshit. You know, they say it costs there.
Threads isn't making any money yet. No, it isn't, but I'm saying they're doing something interesting, right? You know, they could turn on, they could make some money from that easily, the way they did at Instagram. You can see it on a path towards money.
You can see that thing very easily, making money. He's just a very good operator, Mark Zuckerberg, and the people around him. That's Bill Gates was, and then he's AJ. Just a good business person.
Not every founder is, but he happens to be. The other thing at Netflix is, first of all, they're cleaning up passwords, which I think a lot of people converted to maybe their ad tier that weren't paying before, the cheaper tier, to raise the prices. Their advertising business system is going as well as yet, but I don't think. It doesn't mean it won't, right?
I think you have an opportunity there. And they have costs across the globe compared to these other media companies. They can equalize across the globe and, of course, save money from everything. So they're in an excellent position.
And they're good at what they do. Again, another good managed product. They're good at managing a product. And someone said, the thing we were at, like, did anybody cancel?
Netflix went up, I don't know, $4, $3. Who canceled? No one canceled. No one canceled.
They raised their prices 15%. Coming out of a strike that was supposed to cripple content makers for five months, they felt confident entering reduced costs. They raised their prices because the delta between what they offer and everyone else offers, including linear television, is so great. They have the confidence to raise their prices 15%.
I believe the ad product will eventually go away or they'll just let it die. Really? Why? Tell me.
Because I've always said it's not core to the brand. I think core to Netflix's brand is that the key attribute of any company that wants to build a company worth over $100 billion is they build a time machine. And I've always believed the core attribute of Netflix is if you only let your children watch Netflix, they save 11 days a year watching commercials. And that ad tier, I just don't think it's going to be worth the version.
I think it's worth the rest of the world. I don't think it's necessarily for Americans, but I do think it's fine to have that product. It's like a cheaper iPhone, I guess. I don't know.
I feel it's fine. I think it's fine. They did fire some other ad people that were initially with them. But we'll see where it goes.
We'll see where it goes. But just in contrast, let's talk a little bit. I think Snapchat is a great company with a great product. They did well at this point.
Facebook added the value, added the revenue of Snap in one quarter. It grew, their revenue, Snap's revenue grew 5%, which is great because it reversed two straight quarters of revenue declines. They have 400 million people. They have a 12% increase in daily active users, engagement increase.
But we're talking about kind of a little engine to a certain extent that couldn't. Their losses are up. Their net losses expanded from 72 million. Same quarter, two years ago, 368 million this year.
I mean, quite frankly, it just wasn't great. It was just okay. And then really, the other thing that people missed was the market has decided to transfer revenues from Google to Microsoft. And that is, Microsoft inspired investment in AI across the incorporating Microsoft Office.
They're incorporating their search. The revenues were up and people are punishing Google and AlphaBet, which all of a sudden seems undermanaged and transferring that capital to Microsoft. And if you look at the multiples now on kind of end price value to our price to sales, Meta's at 7X, Snap's at 3, Microsoft's at 12, and Google's at 5. Google actually looks cheap.
I personally think Snap will be bought up by someone because it's a great product. It should be. It's upscale. Listen, their $4 a month subscription service has 5 million subscribers.
It's 250 million bucks. The intelligence thing, the AI, my AI is working really well. But who? I don't know.
I don't know who should buy them, but it's actually not a bad property to look at given, you know, they continue to, it's a little engine that tries or could try, so I don't know, I feel like it's a really good product. It's my kids use it. It's fantastic, and it's upscale. It's really, it's really good at.
Hans, what I just said, and I think they're screaming by it to someone. Anyway, we'll see where that goes. Maybe Apple, I don't know, it's Apple or, Apple, it's anywhere near so far. Netflix, Netflix, Netflix.
Seems to me, the business is fine on its own. That's the problem. Snap makes for a great acquisition, but buy who? Buy who, right, right.
I did an interview with Darkoaster Shahi that's appearing soon, and one of the things he was talking about was his ad business on Uber, on Uber and Uber Eats, getting big, getting interesting. Anyway, that makes total sense. They know where you're going. They know where you're going.
They're doing rather well in that area. Surprise, Freight was not doing as well, but that certainly is. Anyway, let's pivot quickly to a listener question. You've got mail.
This question comes from Marcus in Sao Paulo, Brazil. I'll read it. Hi, Karen, Scott. A quick question on leadership.
Scott talks a lot about how he's learned to be more positive, thoughtful, and considerate leader. However, he did reach a considerable level of success and wealth while he still had a much different style. Well, I do appreciate when he promotes his humane attitude. I wonder if a thoughtful, considerate person would have had the same opportunity when the market dynamics and social status dynamics to an extent still seem to reward asshole-ness rather than kindness in a nutshell.
Scott, do you think you'd be in this position that you are today had you been a nicer version of yourself when you started off? Thanks. Much love to the show, Marcus. What a good question.
Scott, did you be where you are without being an asshole? You mean hungover in Vegas after being a CEO with friends? Yes, yes. The answer is yes because the way I would describe effective leaders in business is they have three attributes.
The first is they demonstrate excellence. Typically, the CEO is as good or better than anyone in the building at one thing, whether it's selling or they have a great analytical mind. I just don't think you can be a professional manager. You have to be really good at something.
That's what I found. The CEO is very good at something. David Solomon was a great trader at some point. Anyways, the second is that they hold people accountable and you can call that being an asshole but set out very clear goals for people and then when people aren't meeting those objectives they sit them down and they say, look, you're not meeting your objectives and you need to let me know how I can be helpful here but you're not going to survive here if you continue to miss your numbers.
And it's a difficult conversation that is really easy to avoid but I think great leaders hold their people accountable and also I've said strategic hiring. I never bought this notion in this Hallmark Channel movie that oh, if we just find the right role for them or it's the culture's fault. No, some good people sometimes would just be like oh, they're just not working out for whatever reason and I think that we're too slow to do that. I mean, I know that sounds terrible but I've always been slow to hire and you're quick to fire.
I know how terrible that sounds but in a small company you can't have people who aren't working out and you can fire them the more generous you can be in terms of severance payments and then finally the team of the best players wins and I think empathy is a form of compensation and that is I'm going to get to know you and what you really value and people value different things. You're trying to really figure out what's right for them and people follow excellence that they think you're going to make a lot of money and generate a lot of money and they'll follow you because they'll get to draft off your success. What I do think you can do and I didn't do was I thought that I was raised in an era of Steve Jobs where occasionally in a meeting calling out people or saying provocative, rude or aggressive things demonstrated leadership that if I was talented and a bit of an asshole then I was a genius whereas if I'd been talented and just a little kinder on occasion in my era that was considered you were sort of just talented and I really do regret there are just situations especially with young people they needed more watering there's a few people I fired and I regret it I thought you know what I should have worked harder to figure it out especially a young person I don't know I don't think you're as much an asshole as you think you were and I don't think Steve Jobs you also were kind of like just more strange than anything else as I recall I love to read let me do a dramatic reading from my book Burn Book in the section about Scott in 2017 I attended a tech event in Germany called DLD Digital Life Design I watched as Scott Galloway an NYU Stern business professor of brand strategy and digital marketing delivered what was a wacko presentation that included him donning a wig and lip syncing to George Michael's Freedom 90 for way too long while Scott's casual I think there's more to you than that yeah but I don't I don't know if you feel this way I feel as if I had what you realize is if you attain any level of power and influence a tiny bit of kindness a tiny bit of generosity it goes so far the most wasted resource in the world is good intentions when someone's doing a good job when you admire somebody especially when they're younger and you're in charge of the company to bring them pull them into a conference room and go this was outstanding or you are such an impressive person yeah more phrases definitely as someone who has been in both sides it does it goes so far yeah although I'll tell you it works the other way too a lot of people really tough on me also I learned from so it just depends yeah I don't know I wasn't much of a screamer as a boss I don't like being a boss I don't think I was necessarily people would imagine that I was like that but I wasn't actually it's not I don't really like managing I know I don't like managing actually is what it was it's like teaching I really don't like it like there's something wrong with it but anyway good question from Brazil Marcus thank you so much Scott remains an asshole trust me he's an asshole and strange you are still strange and you would put on a wig if you could much more than you would hello what's this weekend oh my god I told you I'm going as Deadpool after the fire people think I look like Ryan Reynolds after he's mutilated in that fire I love Halloween I hate it I hate costumes I'm going as Carol Swisher that's why I'm going as I'm going as Carol Swisher I'm wearing soft pants and you know in general I can't stand the attitude although I have to say I do enjoy taking the kids trick-or-treating because Claire's all into it now and she's had 17 costume changes etc but this is the year Saul gets it he sort of got it last year but he's two now close to being two and what happens in that year when they become two and they do trick-or-treating all of a sudden the penny drops and they're like this is a fantastic fucking racket free candy I dress up it's amazing you know I remember Claire you could see her go wait a second here this is fantastic I'm super excited for that moment for us all anyway I forget what he's going as a giraffe or something I absolutely love Halloween I had little kids my favorite outfit was my youngest one is Einstein my oldest one is an artist once a good friend of mine his daughter this year they're Jews but it's hilarious the daughter's going to Santa Claus so I thought it was hilarious but the power move as a parent as a dad is I not only I used to sneak their candy when they were asleep I eat it now I eat it in front of them that's the power move so we are 250 years into this American experiment and I say it's going okay I give us like a C plus there is no perfect past but there is also no exclusively negative past because humans are human that's what we do I think the story of America is the struggle of people who have not been included in the promise of America to expand those principles to include more people what's going to determine the next 250 years of America and how do we write a new social contract that can give us the democracy we deserve okay so I'm just going to be a jerk here because I'm a historian so we have to have a prologue explaining you know we the people oh okay you know I just don't remember from Schoolhouse Rock we the people adore the former perfect union establish justice what is it ensure domestic tranquility so you're talking about a foundational document so I'm building a document that will protect American democracy that's this week on America Actually this week on Network and Shell I'm joined by Tank Sinatra the meme king with over 15 million followers across Tank's good news influencers in the wild and his personal account Tank is breaking down what the meme economy really is how much a single sponsor post pays why major brands are throwing serious money at jokes and how meme culture thinks preparation age starter packs and a perfectly timed screenshot is actually reshaping how we think about money and value get ready for a conversation that'll change the way you scroll make you rethink what going viral is really worth and prove that sometimes the most serious money moves are wrapped in the silliest of jokes listen wherever you get your podcasts or watch on youtube.com slash you're rich VFF okay Scott let's hear a prediction okay so I just want to acknowledge this sounds tinfoil hat and a bit paranoid but that doesn't mean I'm wrong I think at some point in the future we're going to find out that the CCP was using TikTok to manipulate and divide America with a disproportionate amount of anti-Israel content that they're elevating I think they see this as an issue that is dividing America and it means you're actually manipulating it isn't just people all I can tell you is if I were to the NSA and CIA and I had a neural plant into every Chinese youth into their brains I would be putting my thumb on the scale of content that diminished their view of their leadership and their society they'd be they would be stupid not to be doing this well I know but you know they do deny this rather vehemently the US people running the company and I'm just saying I doubt the US people have anything to do with it I think this would be so easy and elegant and insidious and I think there's data coming out and I got to mention data from a guy who's been tracking this pretty closely it certainly looks like it it doesn't mean it's proof you know I've been the one that's been sounding well it's ridiculous but I think you're going to find out I don't know when it might be a year it might be 10 years I think you're going to find out that when the CCP saw an opportunity to create more I mean here's the thing the biggest threat globally isn't Hamas I think that's a huge threat it isn't Putin the biggest threat in America is that we are dividing internally and technology and gerrymandering and minority rule is ripping this nation apart and the greatest political weapon against us isn't tanks it isn't kinetic power we spend more than anybody else we have the finest fighting force in the world it isn't economic we continue to attract the most seminal breakthrough technology in history but you know it's all within a bike ride of SFO called AI the only way to come after us the only way to reduce our power and what is the greatest experiment in history called US democracy is to get us to continue to hate each other and the cheapest most elegant most insidious way to do this when you again have control over America's youth is to start raising topics and divide us I think they would be stupid not to be doing this and some preliminary research on anti-Israel content and I realize it sounds paranoid and as a Jew I realize there's some bias here but I have been shocked at the amount of pro-Palestinian and anti-Israel content coming out of high schools and colleges and then when I think where do they get their information where are they getting this information and all roads lead to the same place it's TikTok so we'll see but I think in several years we're all going to say oh that was obvious they were doing it and find out they were I think it's happening right now interesting prediction I'm going to make a short prediction there's something off about this speaker there's something creepy off weird no but I think he's in for a world of hurt I think not just this crazy shit just that one black ass name he ran was like already problematic but there's something wrong with him and I don't know what it is this is just me as Karis which are Spidey Sense reporter I think he's in for a world of hurt not because people are trying to get him it's that I don't know there's something off there's something off about him I don't say this about Jim Jordan I think Jim Jordan's a terrible person I think he looked the other way but we knew him he was a devil we knew what you're saying is he hasn't been vetted the deep corners of this guy's life have not been there's been no flashlight on I mean the same about Jim Jordan is pretty much everything that's been aired he's so performative this guy you know I have a lot of relatives who are religious in his the way he is and I find them genuine I don't like a lot of what they say but there's something off about this guy that's what I'm saying something will he be at this White House tonight I don't know let's see he's a speaker right yeah make a pass at him make a pass at him yeah I don't know I'll make a pass at him anyway we'll both make a pass at him what is more disturbing anyway we're gonna have a good time otherwise we still won't be there when we tape next it'll be before we go so not until Thursday we'll have a report which you may read of in news accounts but we will be we'll be here in Washington together on Monday yeah I feel bad now that I was being cynical I feel really honored to be invited and I'm looking forward to it I know you are you are super excited Scott Galloway is super excited he's never been there we'd like to put the dog on as they say for Scott Galloway and there's a ton of fans in the White House just so you know it'll be fun all right Scott we're almost done but I hear you're gonna be on Bill Maher fourth time tomorrow wow I'm going on with that total gangster the woman from Fox he's like insanely reasonable she's my friend say hi Jess Carlow you're friends with her? yeah of course I am she seems like an impressive person and you know who they're interviewing in the beginning of the show?
Who? Andrew Cuomo. Oh. Yeah, that should be interesting.
Wow, you got a good one. Jessie is great. Jessie's great. Say hi to her.
She's amazing. Yeah, I will. I'm excited about that. She's so smart.
Just basically, you know, bitchless, judge whatever the fuck, whatever her name is. No, I turned on. I remember I turned on the TV a few weeks ago and I saw this woman making all sorts of sense and then I looked down and there was a Fox logo and my mind literally slipped and broke a head. I'm like, what show is this?
She's great. I'm excited you're going here. Say hi to Bill. Say hi.