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I'm Cara Swisher. And I'm Checkout, and Cara, our dishwasher, that bitch doesn't know what hit it. Oh, my God, are we abusing the dishwasher? This thing had not been turned on in two years, and now it is being asked to work over time.
My dogs are sick of me. My dogs are like, Jesus Christ, get out of here already. I haven't sicked for you since I met you, but that's okay. That's no problem.
So you're actually eating at home, in other words, correct? Yeah, a lot of eating at home. I think about loading the dishwasher and unloading the dishwasher, and occasionally I do it, but we pass the hours playing this game called, why do you do it that way? No, it never wins.
No, it never wins. There's never a winner. Why do you do things this way? That's when the great Simon Hollney's is a total dad joke guy in Twitter.
Oh, it is. Yeah. Well, everyone's trying their hardest, I think. I try to keep that in mind.
Every time I go to be irritated, I try. I've done it a couple of times, but I've felt bad about it. And then I'm like, extra nice because it's really just the tension of the situation. Although last night, Amanda wanted me to buy one of those Rose Quartz rollers that you roll on your face, and it makes you feel better.
Rose Quartz rollers. I find, I find I get shitty drunk and just say, I hate you. That to me is my therapy. That's my therapy.
Well, what you can't do is listen to President Trump touting a drug. I have this feeling there are links somewhere with the drug companies. Some of the crime is happening as he keeps touting this hydroxychloroquine. Back and forth with all these crazy, either Bitcoin, I don't know who they are.
They're just like insane. Like, there are studies. And when you click to them, they're not really studies. They're trying to do clinical trials on this anti-malarial drug.
And they have the president doing this and he wouldn't let Fauci answer. Fauci, they do it all quackery, I think, and has sort of said so. And, you know, there's trials in place to deal with it, but it's a very dangerous drug. It's just used, but people are just like lost their frigging minds.
It's really crazy. So I'm very exercised about that. That's what I got mad about. I was ranting when I was sitting in bed about the situation.
About crimes in plain sight. Well, it's what Jonathan Hyde said that 9-11 was our last share experience. What I find about hydroxychloroquine is that people's legitimacy around it is a function of their political party, which is very strange. We used to, in this country, have a respect for science.
We would all get, and it's on both sides. I find that a lot of people who immediately think that there's no way it might be helpful. And who knows? It might be.
It might be helpful. It's worth looking into. It's worth getting into. It is being looked into.
That's the thing. I just think that's bullshit. It is being looked into. Nobody doesn't want to cure.
I'm glad you're being so even handed. It's not both sides. We're trying to have people not die from something that's unproven. Right.
But what I have found is that me and my progressive friends immediately are just 100% skeptical that there's no hope for this thing. And the reality is, who knows? There might be, right? There might be.
My point is we are having two pandemics, and Republicans believe this is a knockout drug. Go back to work. This works, and this is great news. And Democrats think this is just irresponsible junk science, and this will never have any value around this disease.
And the reality is both don't know. What we are finding on the right, though, is that they seem to have believed that we can circumvent all standard norms around science and how we test drugs. And it's not about finding some... I mean, if you see Fox News, Fox News might as well be an infomercial for this shit.
I know, but they're just trying to go back to work, because lawsuits have happened, have started to occur against this terrible, terrible network. But yeah, I agree. I don't even understand why you would do this. I don't know why you would put people's lives further.
It feels like the GOP is suicidal. It's really crazy. And listen, everybody would like a cure to this work. That would be great, but I think you have to do at least a minimum number of clinical trials to make sure it's fine.
Today and the times they were talking about what happens if it goes right. It can cause heart arrhythmias in healthy people. And I know every drug has its thing. I get it that sometimes that's the case, but it just...
I don't know. I think the concept... I was objecting to Rudy Giuliani's trying to get subscribers to his website by touting it saying it's the miracle cure. And whenever I hear the word miracle cure, I think of like a peddler wandering around the United States killing people, and especially him.
He's just become such a ridiculous, doddering menace that it's hard to contain myself anyway. We haven't heard a lot from Mayor Giuliani. They're not 11 of mayors. He's trying to become relevant again by talking this ridiculous thing.
I am certain he has these stocks of these drug companies. I don't even... I don't have certain. It's like there's got to be some scam happening here.
And the ability of people to take advantage of a crisis like this is just really... Who had pooed it before? That's why I have no belief in that situation. Anyway, it's really irritating, especially using Twitter to do so.
It's really irritating. But speaking of technology, let's talk to technology in our big story today. Zoom had a few big weeks, and now the answer has to answer some even bigger questions. University of Toronto released a paper looking into Zoom's encryption practices and found significant weaknesses in their system, including service in China, which is not uncommon.
The Washington Post reporter Drew Harwell and his colleagues found that as a result of the weaknesses, thousands of personal Zoom videos were available on the open web without a password. This is a huge privacy concern. Those videos include therapy sessions, job training, calls with doctors. Zoom wrote a blog post trying to explain what their version encryption meant, and they said, well, we never intended to deceive any of our customers.
We recognize there's a discrepancy between the commonly accepted definition of end-to-end encryption and how we were using it, which is like a fantastic sentence. The goal is of our encryption design is to provide maximum amount of privacy as possible supporting the diverse needs of our client base. And then there's not just the privacy, but the security, of course, as you know, I have a victim of Zoom bombing as I've noted 103 times. But they've had a massive few weeks.
They've reached more than 200 million daily users last month in December. They only had 10 million. Zoom says that over 90,000 schools across 20 countries have started using the company for remote education and not the New York school system, which is moving away from Zoom to rival service Microsoft Teams. Google also has software hangouts available to schools.
And on CNN, Eric Yuan, who I'm trying to get to come on Rico Vico, he apologized on the privacy issues saying we've learned our lessons. He's taken a step back to focus on privacy and security. So tech really always comes through in these moments of crisis, just like amazing. Again, it's just complex.
Go ahead, Scott. Go for it. Well, it's the same complexion, right? The thing that's the thing, everything's about scale, everything's about demoting and or you don't get promoted if you suggest anything.
Anyone who's in the background of the breath that says, have we thought about if this happens? And anything that gets in the way of, well, we can go from 10 to, how would we go from 10 to 200 million daily active users? Anyone who says, well, have we thought about the security risks, gets sent to the island and miss big careers? And it's the same, it was a total disregard for scale that got Facebook in trouble with Cambridge Analytica and GRU.
It's been a total lack of concern around what the scale is. It's resulted in content on YouTube. It is radicalized young men. And it's the same thing at Zoom, the temptation to be worth more than U.S.
auto industry and be the new Mark Zuckerberg and the guy that gets invited to speak at Stanford Business School and be seen as kind of the new idol in our capitalist society. It's so great that you just kind of hope that the security concerns don't come behind you. And also, they're the poster child for kind of big tech right now in this. So they're getting a lot more scrutiny.
But also, there again, it's so hard to do the right thing in these situations. And the right thing should have been, we screwed up here. We're absolutely slowing this down and we're going to implement all kinds of new security features. Because this gets, it's funny at first.
You hear stories that are kind of funny. And then you hear about the fact that there are a lot of classes with eight-year-olds that are now public. I mean, this could get pretty ugly pretty fast. 100%.
And they thought that the New York school system was too quick. I noticed on a lot of reaction to it was like, well, so what? And I was like, so what? There's children involved.
And what was another thing that was disturbing was the University of Toronto researchers also found that Zoom appears to own three companies in China through which at least 700 employees are paid to develop Zoom software. Again, not uncommon. But it shows this interconnected world. And of course, China's under great scrutiny for under reporting the Washington Post had a terrific story this weekend about the delays and what part of it was about China not allowing our researchers to have examples of this virus.
So China's no winning place for anything going on with this virus. But at the same time, still continues to be a problem on the global scale of security, of privacy security. Yeah. Well, again, it's just another, it's too bad for the tech community because Zoom was an incredible story.
And it's sort of like, oh, God, this should again. Another tech company that prioritizes shareholder value over stakeholder value. What do you think of this reaction? I think it was reaction.
I think it was right. I just don't think it was strong enough. I think it should have been. This is unacceptable.
We screwed up here where these are all of the things we're doing. But to come out and say, you say encryption, I say, not really, that this wasn't, that was somebody in comms, that was too many communications consultants that was saying, we failed here full stop. We did not anticipate the scrutiny and the opportunities and the leakage that come with this type of scale. We're setting down the following features and we are all over security and our own priority.
Well, I really think I understand that. That is, we were using it a lot. I mean, I know it would work. We used it a lot before this.
And so then I'm like, what did they take pictures of? Very confidential meetings happening with a lot of people. I think previously, what happened to all that information? Where did it go?
Well, people though have said that if the GRU, the CIA and the MI6 got together and tried to invent and imagine the ultimate reconnaissance tool, they couldn't have been the wildest dreams thought up Facebook in terms of how effective it would be for tracking people or understanding where they are, what they're doing, who their friends are, and if they can hack into their account, begin manipulating the relationships. But the probably even better tool would be, well, what if we could see everyone's communication on video, including the charts and graphs, they're sharing with other people. So this is, I got, you got to imagine, for example, coming out of this, I bet, there's just going to be so many layers here. There's going to be insider trading laws that have been broken.
I'm almost certain that people have hacked into this to find out confidential meetings from lawyers and acquisitions and find out non-public information material inside information. There's just so many, there's just so many, you can just see this, it's going to go so many, so many, so many. Let me have to see if Microsoft Teams or Google Hangouts gets better. Now, you know, there's always that old thing you get to pay for and Zoom is free, and that's why a lot of people use it.
And it's easy. It's easy. You just click on it and it pops up. It's biggest asset.
It's biggest flaw. They made it just so easy that it's easy for everybody, right? It's kind of easy to pull up and start zooming, if you will. Well, would you go to Microsoft Team or Google Hangouts?
I always have issues putting on Google anything. I have nested my house and I don't have my other house that I'm moving to, it doesn't have it. I think I might consider using Microsoft Teams because it seems like they're at least, although again, I can't believe I'm trusting Microsoft or privacy and security. It's really, there's nowhere to go except for shouting over the fence, essentially.
Shouting over the fence, I like that. I've always thought that Slack and Zoom are shorts because Microsoft basically calls the IT guy or your CTO. And your IT or your CTO guy, who you think it should be very strategic and some are at some honestly there with one job and that is not to fuck up, not to have the system go down, not to have your entire IT network go down and have someone from Albania call you in demand $45,000 in Bitcoin to make sure people show up every day and can turn on their computers and things sort. Their job is mostly, they're invisible until they fuck up.
It's one of those jobs that is just incredibly, I think, rewarding. Having said that, the opportunity and the reason why I think Slack and Zoom are shorts is that Microsoft has one very powerful sales tool and that is the sales guy calls and says, you know we're secure, you know we're in the enterprise and when you let people use collaborate on Slack instead of team and you let them use Zoom instead of our product, you're taking a risk for the enterprise and you have been warned. And people freak out and say I'm going with the enterprise solution that has shown itself to be pretty secure and that's Microsoft. Well that's true.
I mean one of the things that, you know, you say about Zoom or Slack is look they made better products, they made better products than one of the problems with, you know, easier to use or simpler or more, you know, even the name Zoom makes, you know, feels better and somewhere with Slack same thing. And so I think that's always been the push pull is the people that make sort of like Spotify think is better than any of the music services but now the others have caught up essentially. But there's a reason they, you know, they jumped out. Any of these companies jump out is because they make better, they have more nimble companies.
And I think what happens along the way is they get sloppy in terms of design. And so they have some weird version of encryption that isn't encryption. And you trust them initially because you assume that they're behaving like the bigger companies that you, even them, you don't trust as much. So it's a real problem for consumers especially right now.
But you talk about the psychology of it. And I believe the psychology is linked to the economic cycle. And that is, and we forget this because it's been so long that we are at this point in the economic cycle. And that is, we are right now sitting here today at this moment, we are heading into a recession.
And we don't know, we haven't had that feeling in that dynamic in 12 years. And what happens going into a recession is that people are drawn towards gray hair. People are drawn towards the big and the conservative. In the last 10 days, I have lost two key employees to Google and to Nike who I would not have lost during a boom time because during a boom time or coming out of a recession, people want to go with the innovators.
They want to go with the new thing. They want to try stuff. They want to be a part of the startup. And they're going into a recession.
People get fearful and they immediately draw back from the new shit and they go to the tried and true and they go to safety. There's a fight to safety. And you're going to see that across tech products and coming out. I mean, unfortunately, it's like you said, I love that.
What did you say? We're all yelling over the fence. Everyone's like, okay, this is a fearful time. Okay.
Are we moving too fast? You know, next door, we're going to talk about legislation and everything kind of goes back to safety. And what's safe? Amazon, Apple, Facebook and Google?
Yeah. Presumably. I don't trust the money of them either. So that's the problem.
I think it's real. It's sort of we have given our lives over this, but these companies, they sort of hop out. And again, they are showing the way of things that are easier to use and easier to think. And then they just can't help but take advantage of the situation.
That's really, you know, it's really quite it. That's their job. I don't. It's you read that story and we're leaking now into the next story where all the tech companies can't resist and are taking advantage of the cloud cover of this crisis to say, well, maybe we should delay these privacy regulations.
Yeah. We're going to get into that. We're going to go to a quick break and come back with one more big story and then a friend of Pivot. Support for the show comes from Odo.
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For your next home project, try Thumbtack. Hire the right pro today. Okay, Scott, we're back. Let's talk about that topic.
We're just talking about Silicon Valley lobbyists and what they're up to under the COVID-19 cloud cover, which is a great way that you put it. The New York Times David McCabe has a following story. Many industries like travel and hospitality have experienced immediate devastation by the virus and are seeking bailouts, not Silicon Valley. Google and Facebook lobbyists have asked California legislators to slow the rollout of the new California Consumer Privacy Act.
Remember, CCPA is the biggest privacy legislation to happen in the United States and looks like Europe's GDPR. It's different, it has differences. The CCPA requires businesses to give people a copy of the data that has been collected about them. Companies have complained that the rules would place too many obligations on businesses right now.
And now that COVID-19 has slowed everyone's work, companies are saying that delaying the regulations is even more urgent. What should California governor Newsom do? Gavin Newsom do? And it's such as California, McCabe reported that reps for Amazon and Alphabet are asking legislators to lose some regulations to limit where drones can deliver some delivery.
Look, they're saying they're taking advantage. Well, you know, under the cloud cover. Boy, boy. Yeah.
Yeah, it's easy to tackle from the cheap seats and just say the governor and the respective governors and legislators just say no. I don't know if there's, you know, I don't know the situation there because you always think in, I think you're more, you're more, I don't know, knowledgeable about the inner workings of government. But I've never understood how lobbyists, I guess it's because they are very knowledgeable, very nice, have big expense budgets. I don't know what it is or just give away money, but how it appears that these incredibly smart people are just so vulnerable or susceptible to lobbyists.
But it feels like it would seem just very nakedly, greedy or self-serving to be showing up in this time and saying, shouldn't we use this as an opportunity to press the pause button? We do, we really want to be making changes right now because a lot of these companies are saying, and the company that maybe's done this maybe isn't, but the company that is in my opinion, the company that has the most cloud cover to get additional relief or, or benefit or regulations waived right now is Walmart. It has struck me through this crisis, how important Walmart is to the nation. They're essentially right now the nation's food supply chain.
I mean, when we talk about the supply chain for essentials, yeah, Amazon will get you to your door, but right now you could not, if, if Walmart closed down, you could have chaos. Yeah. That's kind of so important to people's basic essentials. That is a really good insight.
And if they, you know, you could see it, I don't, I don't have no evidence he's done this, but you could see the CEO of Walmart going and saying, we need out all sorts of regulations around, you know, distribution, taxation, food distribution, food safety. I don't know what it is because we are feeding the nation right now. But I want to be clear, I see no evidence that Walmart's done that, but I'm shocked. It seems to me the one company that's in the position to go and say, Hey, we are, we are America right now.
It would be Walmart, even more so than Amazon. Yeah. Well, I think the idea of this cloud cover is really interesting, especially when it becomes self-serving. And that's, you know, I don't know.
I know there's that famous saying, I guess it was Rahm Emanuel or someone like they don't let a good crisis go away, but it becomes ghoulish at this point. You know, they just, they're ghouls that I can tell, not, you know, making basic mistakes is one thing. But, and then in the case of Zoom, for example, uncovering problems we didn't notice before. That's really what's happened in that case that were there security and privacy issues.
And not, but not doing something about it really quickly. That's the problem there. And in this case, what, I'm sure there was a meeting where they sat around and said, what do we need? What's good?
And then they did it under the covers, we're trying to help people so they can give themselves the cover, emotional cover that they're doing the right thing for American people. We're only here to help, essentially. So, you know, I can just see that meeting where they probably patted themselves on the back for pushing for drone, you know, things that are possibly dangerous for people or pushing back on privacy legislation. And I think the real question is, are these companies now beyond this stuff going to say we need to be this big in order to battle things like coronavirus or China?
Well, and then we came to the rescue here and they'll take advantage of the fact that I think coming out of this, there is going to be, I don't want to call it goodwill, but less ill will towards big tech. Although Zoom might reignite it, Zoom might just be another data point that these guys are all about increasing their shareholder value distinctive of the damage to the commonwealth. So, my reinforce is basic notion. But the big tech right now, especially Cheryl Sandberg, is on the mother of all charm tours saying, all of a sudden embracing, you know, we have a key role to play here and educating people and they're trying to get this right, they're trying to, they're trying, the word is redemption.
You know, they see this as an opportunity redemption, hoping that people are less inclined to offer the breakup. I think it would be wonderful if effectively just this thing is ending, that the FTC and the DOJ make more and more noises about actions against each of these companies. I think it would basically say the government just sees they're sorry, girlfriend, we're not fooled that easily. Well, I don't think that's going to happen because they needed more money.
They need, these were already, these are all divisions of the government that were suffering because of lack of money, lack of staff and we're out matched. I don't think there's more money coming now for the FTC or there's going to be like a sort of speaking of calling of the government is we can't afford to do that today, maybe later. And so that's, you know, all of them, the FTC, the FTC, the Justice Department in terms of enforcement, I think they were all sort of doing it on like bubble gum and veiling wire. And so to think of the federal government as much weaker than these big companies, but they really are.
Yeah, they've been overrun. DC's been overrun. And I like, and this is a naive thought. And I know this is true of the CDC.
I'm hoping that it was leaked. I think that I'm hoping a new generation of leadership, and this is more of a longer term, comes out of millennial agency that says, look, it's clear that defunding our government and defunding our institutions and delegitimizing our institutions is bad for the world. And they learn from the sins of the father and they recognize the things such as income and equality, climate change, threats of big tech. The government is really the only entity that's the countervailing force here.
That's probably naive. But I'd like to think that there's a whole wave of voters that see these agencies, not as bureaucracy, not as cost, but as key safeguards for our society. I think we're learning that right now, whether we actually, whether that learning actually takes purchase or not, we'll see. I just, I don't know.
It's like the slim suit crowd under Jared Kushner, who's probably the most incompetent person to handle it. Did you see the slim suit crowd? Yeah, that was in the New York Times, or the post. That's what they call it.
You can urban dictionary. You know, why you're a dictionary? They wear slim suits. Slim intelligence is how I think of it, but they are doing a lot of stuff in it.
Let me just say, you know, using corporations, I want to finish on this, and then we have to get to our friend at Pivot, is they're working hand-in-glove the tech companies with Jared via Ivanka, you know what I mean, like they, she used to develop relationships and others. And so they're just right in there doing stuff with the Trump administration. So sort of solidifying in case he wins again, or if he wins. You guys have brand strategy 2012, grad, and everything goes from the dog.
Oh, please. Didn't you see in your class? You shouldn't. You're in my class.
I'm a student. Nice kid. Nice kid. All right.
Good. You shouldn't be running our response to COVID-19. No, I didn't. I did.
One of my sessions was how to handle the opioid crisis, and then my next class was how to bring about peace in the Middle East. So this is all, this is all my doing. Oh, my God. I think when someone says to you, hey, you're responsible for Middle East peace, am I taking on the opioid crisis?
And you say, yes, it reflects a lot of self-awareness, a lot of self-awareness. That's the only thing I'm happy about is that he was your student. Maybe you inherited it. I'm giving you a compliment.
I'm hoping that some of your intelligence says, oh, yeah, rest easy to not America. Rest easy tonight. Oh, my God. A beacon of hope.
He took Professor Galloway. That's how far we've fallen. Oh, my God. Oh, my God.
I really do think you're a good teacher. Oh, no. No. I don't think that's going to save us.
Thank you, though. Thank you, though. Honestly, it's the slimmest of reads that I'm holding my hand up for. I lack off self-awareness, and I realize I shouldn't be in this position.
I'm going down and I'm grabbing onto the thin read of Scott Galloway. You want to talk about a slim suit of intellectual behavior? Jesus Christ. I am slim bit on steroids.
I have a girl that figure actually. I have a lot of slim suits. Lord, Scott, you can feel better not worse. Anyway, moving on.
We have a friend of Pivot with us. Someone very smart. His name is Jean Spirling. He was Director of the National Economic Council under President Clinton and President Obama.
He's the author of a new book, Economic Dignity, coming out May 5th. We're going to have Monrico Dico to talk about the book. But right now we want to talk about the economy. As of last week, 6.6 million people have filed for unemployment in the United States.
March was the worst month for job loss in the US. It's the great recession. Jean, welcome to Pivot. Thank you.
Thanks for having me. So I'm going to ask the basic question. Are we actually in a recession now? And what makes this recession different from the 2008 recession or perhaps all of the recessions?
We are in, I think you would call it, jobs depression right now. And I think it is different from virtually not only anything we've seen in our lifetime, but even different than the great depression in many ways. And here's why. You look at anything we've lived through or that we've studied.
It has kind of at least two characteristics. It was caused by some economic or financial negative dynamics on this function that you're trying to correct and quell. And then secondly, you're then trying to inject demand. You're trying to Keynesian stimulus.
You want to get money out going so people buy things. So asset values go up, but mostly so that more people go back to work and they get paychecks and they start buying things. You know, that really is what we've all been taught is what we do have a recession or depression. This is not like that.
Number one, it's not caused by anything economic or financial. It's caused by a pandemic. And there is no economic or financial remedy that will ultimately get us out of this. It's got to be a public health crisis response.
And at first, but then second, think about it. We're not really trying to stimulate people, give them money so that they will go back and travel more or go out to the restaurant more or have more cars being produced now. We are not trying to, in a sense, do a stimulus that gets people back buying all sorts of things and getting people back to work. We are purposely shutting down whole parts of the economy.
And we don't want people to get back to work. This is fundamentally different. So this is really an economic survival plan. This is how do we really care for each other as a people?
How do we make sure that our families, people live through this with the degree of dignity, with that they can support themselves, that they can get through? That's one big thing. I guess what I'd say the second thing, though, is that we do want to prevent as much unnecessary harm and destruction. Or I like to think of our negative downward cycles that hurt people.
In other words, I heard somebody say you're almost trying to freeze the economy. There's many things that happen in life that don't just hurt. They lead to a downward spiral. When a person's unemployed for a few months, it kind of hurts.
It's difficult, but they usually get back on their feet. If they're unemployed for two years, they start having a personal downward cycle. They may not recover from the same happens with community. If you guys drive out another podcast because you're so good, you're so insightful.
You're so witty. Go on, Gene. Go on. I'm trying to suck up.
It's my first time on. But that's creative destruction, right? People are just like a small business who's done everything right in life. You have great service.
You have a great restaurant. You have great food. There's nothing good. It's just pure destruction.
I think that's why you're seeing this debate going forward to phase four between two different types of approaches. One says, let's just give money directly to people. That's one of the best things in the package that happens. The CARES package was this huge unemployment insurance bump, $600.
If a lot of people are getting 100% of their wages in UI, they will survive. They will be able to care for their families. They're getting their paychecks. Others are saying, no, you really should take a bit more of a European approach and try to keep the businesses going and essentially pay the businesses to keep idle people on their payroll.
They're making the argument that will actually lead to less unnecessary destruction and will put us in a better position to reopen as an economy, as a people. You finally get a health question. I have a question, Jane, just along the idea, I keep hearing this concept of permanent balance sheet damage. That is 100%.
This is a health crisis. Let's be optimistic and assume that the curve begins to flatten. This virus does burn out. Obviously, we have to worry about relapsing the fob.
Let's assume. Let's be hopeful that it does burn out. How much balance sheet damage has been done? Is there a way?
I mean, we're all hoping. If you listen to the President and you listen to Fox News, you'd think that the economy is going to look like a V. That it's immediately going to snap back. This notion that there's going to be permanent damage and destruction done to our psyche and to balance sheets here.
If this thing does burn out or if it does look as if at some point we'll have turned the corner and call it, I don't know, early summer. It feels normal from a public health standpoint. What do you think of the lasting effects on the economy? How long would it take to bounce back?
Is there a bounce back coming or are we going into a sustained economic crisis? Well, it's the question. An economist like to say, is it a V shape? Do you go straight down?
Would you come back up? Sometimes like the 1980 free recovery, there was all this pent up demand. People went back and bought the houses and cars. They didn't and you kind of boosted up.
Or you can get more of that slower recovery, which you got after the financial crisis. Because when it was over, people were paying down their credit cards, their balance sheets. Everybody was from companies to people to state governments. And so you didn't get that big bounce up.
Here you're really talking about a degree of human nature that is hard for some of us to know. I think there's, think about it even for yourself. If you've lost your spring vacation, you might be thinking, man, if things were really great, I'm going to go out and spend a little more for an August vacation. But you might also think, but I'm not going to go too far.
I'm not going to go overseas. I'm not going to do anything. And you just don't know. I mean, we've obviously seen people who survive the Holocaust or babies of the Great Depression, where that affected their behavior for years to come.
I think we'll see a mess. I think you'll see some bounce back where people will want to get out, go to restaurants, do things, purchase. I do think if we do things right, if we can keep more small businesses open, all of those things I think will help to restart. But whether or not there's kind of what the psychological impact is or whether people become worried about this, how do people act when it's not hypothetical and they've actually lost a loved one or friends lost a loved one?
How much risk averse does it make them? Right, it could become a big question. My grandmother was like that. She was a child of the Great Depression.
And I think she never spent much. She had quite a bit of money in the end, and she never spent it. She wore the same clothes. It was really interesting, psychologically, from her point of view.
She was always, you know, she had a handful of pennies that she kept all the time, for example. But one of the things that's interesting is the idea of how and when you turn the economy on and what to do, and obviously President Trump had talked about, like we're going to be open by Easter and we're not, obviously. That's not happening. But is there a danger of turning it on too late in terms of how many months people can take in terms of the economy?
Or is it just, look, this is what you're going to lose for this many months and then later you'll make it back or you'll have to just wait until everything returns to normal? You know, Kara, I mean, when the President and there were some CEOs, and I think some of them will not make comments that will not age well, that we're talking about, like, the decision to reopen. When do you reopen? I think that there are a lot of people, and I think this is united, a lot of economists and economic policy makers, like myself, on the progressive side and my counterparts on the conservative side, who said this is much less of a choice than you think.
It just goes to what we're talking about. If somebody said to me today, it's reopened, we're still not going to go to the restaurant. If you're worried that if you take a trip overseas, you might get stuck and not be able to get back, you're not going to go. So I think this is the thing, and this is why this is a fundamentally public health crisis.
As long as those risks and fears are worried and legitimate, people are going to behave in a certain way that's going to pull back whether or not their local leader tells them to. So you can, you know, yes, you should be able to reopen some. I mean, you can imagine that if you had massive testing, if we could know through antibodies who had had it, many of those things would encourage, you know, a bit of economic activity. You'd have a family member that could feel comfortable working with other people buying for you, shopping for you.
But remember, those are kind of reopening the economy that's related to solving the public health crisis. I just don't think you can make that decision as if it's somehow separate from the legitimate fear that people are going to feel of a second wave, even if things look a little better. Hey, let's go to the end. I'm definitely a glass FMP guy in this in economic crises that end.
There's a notion that, okay, the economy is coming back, and that's what you're looking at the metric of the telltale sign to begin investing as a business or being spending as a consumer when there's a war and war ends. There's a sense of victory. There's a sense of collective accomplishment. There's a sense of optimism typically coming out of pandemics.
There's a recognition of grief and a real sense of heaviness and a real sense of weight that does not lend itself to going out and buying that new Hyundai. This to me feels like from a consumer confidence standpoint that this is pretty bad that we're going to come out of this and slow down and we're going to look at ourselves in the mirror and say, okay, simply put, we did not handle this well. This is something we're not prepared for. And I think a lot of people are reevaluating that kind of what I call sleep test and that is how much cash I need to have, how much money do I need to have, if something like this happens again.
And I just don't see how it doesn't permanently structurally shift the economy for the next several years. It's just a notion of a V regardless of the health seems delusional to me. I'm curious to get your thoughts. You're right.
I mean, I think a V is delusional. I think you hope for kind of a U that, you know, things start to come back. I mean, look, human nature has many components. If my mother is, you know, I fly from Los Angeles to Ann Arbor once a month to see my mother.
Now I can't. I mean, I'm going to do that when things get better. People love the people. They want to see people.
They're going to do some travel. People aren't going to buy some things that they put off because they didn't want a repair person coming into their house now. There will be a certain amount of rebound. But yeah, there's also likely to be a certain amount of lasting effect.
Now, I also think how we handle this matters. If the lesson is that, look, our country can respond with, with bigness. They actually were able to say, we had to shut down and they made sure I had 100% of my wages replaced that I still had health care. Well, that might make you feel more that you can spend because if something like this happens, the government is not going to let you go into one of these negative cycles.
And I think the hard part that we're dealing with right now, but we've got to grapple with, is, you know, as much as this is harmful for our country, it's not really hurting all 320 million people equally. It's hurting. What is it going to be? What is it going to be?
30, 50, 70 people, million people brutally. They're losing their jobs. I have many family members, people doing your show now that are doing fine. Many people are doing fine.
But a large chunk of Americans are going to lose everything. And so what we're starting to see is, how do we do, you know, I mean, how do we do major relief to help those people, those small businesses, you know, stay afloat? And, you know, I think, you know, sending out a $1,200 check is good. It helps a lot of people.
But the thing you're going to need is that major response for the tens of millions of people who will get crushed. And if we can do that well enough, the baby will be in better shape. And maybe, and I, one of many, you'll hope this, this will lead us to rethink our entire economic security. Word, my brother.
We're gene. A couple of observations, Cara. The first is that the happiest countries in the world are necessarily the ones that have the most or the ones where their citizens don't have to live in fear of things being taken away. And I think this is where we're seeing how much can be taken away in this kind of Hunger Games capitalism that we have created in this country.
And Cara, I learned so much on the show. I have decided that I'm going to adopt gene. I'm going to adopt gene. I need a competent, loving person to come visit me every six weeks.
So, Gene. No one's visiting Scott. I'm adopting. You heard it here.
I'm adopting Gene. Scott, I'm not even unload the dishwasher. So, please don't become his. I'm looking forward to seeing you.
How come you didn't call me last night, Gene? Last question, Gene. Scott from his incessant obsession of being cared for. My new son.
So, what you were talking about this. I think it does is going to further these lines of income inequality that's been happening for a long time. Obviously, this is the real challenge of this country. And the second thing is, which companies are going to do it on that tech companies were affected by the 2008 crisis.
How do you think, sorry to be a tech focus, but they look like they're going to cut. We think they're going to come out of this looking great and be doing well and being less regulatory scrutiny and everything else. How do you think, you know, we know hotels are going to be hit. We know planes or airplane airline industry is going to be hit.
What about tech from your perspective? Well, you know more than I do that. Obviously, the big tech companies here are enormously well off. They have enormous cash files.
They have enormous wealth. I don't see how they are going to face much of a threat. I think you'd worry more about people, companies that were going to be potential competitors who are somehow not related to, you know, helping us telecommunicate, et cetera. So I do think that one of the things you'd like to see from the tech community, the venture capital community is, look, if you believe in a startup, you think they have a great vision.
Don't let them go under because we're down for six months or 12 months. And I don't necessarily, you know, you should help keep something sustainable if you feel it's a great long-term investment. But I think compared to others, just by definition, tech does help us social distance. I still can FaceTime with my mother.
We're all used. You know, you've talked about Zoom, Kara, on the show and other things. You know, so those things are not going to be the hard hit parts of our economy. And people there have the resources that they should keep their workers 100% employed.
But, you know, so that's not where my, I would not have a big worry about big tech. I might be worried about what happens to some of the smaller competitors. And just on the income inequality point, I mean, I do feel like this also makes it real in ways we haven't seen. It's one thing that gives them statistics about, you know, this person has, the top one percent has this much and they're doing so much better.
But we're seen at a more human level. Really, only some people get paid sick leave. You know, we're seeing people on the front lines who are literally saving our lives and they don't get 15 bucks an hour. I think this will change our, will change us in a positive way.
I think it will make us ask, why do we have these holes in the social compact? And I think a big company who said, yes, please give me some payroll because it's so important for me to help keep all my workers going. It's going to have a little harder time explaining why they located as a tax facility in Bermuda to not pay their fair share. Or why it's just the worst thing in the world if we were to have a mandatory paid sick leave or universal health care for everyone.
To your point, Jean, aren't we finding that the quote unquote essential services and essential workers are the ones that have been the lowest paid, which is sort of the irony of all this. The quote unquote the essential, the people on the front lines here, other than our health care workers, but the people in warehouses, the people in the supply chain stays open. The people giving us our food are some of the lowest paid. And the other notion is that over time when you get to these levels of income inequality, you do have a self-gracking mechanism.
And while to your point, 30, 50 million Americans are really getting hurt, doesn't this sort of medium term serve as a leveler? That perhaps you're seeing workers sort of flex their muscles. Warehouse workers saying we need to make more money if you're going to ask us to show up and take risks. Don't events like this usually swing some balance back from capital to labor?
I certainly hope so. I mean, look, I kind of philosophically always feel that way. But I think even if you're a hard-hearted libertarian, you have to be saying yourself, wow, the person delivering food to me, the person who is the lowest level person in that hospital, they are the MVPs of our economy right now. They're the MVPs of our society.
And I think we need to do everything to help the people who are working and putting themselves in danger. The idea they don't have every bit of protective equipment they have is inexcusable. And I think that those who've lost their jobs, we have to help 100%. And I also think of forgiving massive assistance.
We've got to do it swift. It's got to be sweeping, but it should be fair too. I was disgusted to see and hear stories of people running small tax and consulting companies, making millions of dollars who are doing just fine, who were trying to apply for the small business loan when they hadn't had the revenue go down a penny. I mean, I think there's a special place in hell for people like that.
And I think we're going to need to give more support to bigger companies. I don't know why it's okay that Ford Union workers are losing their jobs. And I think we're going to have to make sure when we do that, that the public does have confidence that the money going there is going there exclusively to help people who would be laid off, stay afloat, help the company stay afloat, and that if it ends up looking like a lot of that money went to the well off or to protect high salaries or investors, I think it's going to create more anger justifiably. But if there's a hope of anything good that comes out of this horrible crisis, tragic crisis, it would be that it made us all see the value and work of each other in a way that strengthened our social compact for decades to come.
That would be the happy outcome. We're going to end on that because it is compassionate capitalism. A lot of tech people talk about it. I think they're making it up for them.
But we really appreciate this. Scott, you have anything last to say to Jean who was fantastic? No, I'm just, again, every time we have one of these guests on who gives sort of a sober, thoughtful, competent assessment of the facts. I think this is what we need.
This is what the public wants to hear. They want a sober assessment from someone competent who actually does this for a living. And I will say, rock on Jean, rock on. And on a down note, but I was just looking at the state unemployment numbers.
And I don't know if the unemployment claims will be as high as $6.6 million again, but I think it will still be something like four or five million more. And, you know, we're going to be headed to 20% plus unemployment, possibly, things we haven't seen since the Great Depression. So this is a moment for us as a people. All right, Jean, thank you so much.
We really appreciate it. Again, it's Jean Spirling. He was Director of the National Economic Council under President Clinton and President Obama and is the author of a new book called Economic Dignity. I'll be talking to him much more in the coming weeks.
Thank you so much, Jean. Thank you. All right, Scott, Jean, it was fantastic. But one more quick break.
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Hey, Scott, we're back. That was something else. What do you think? Do I bring in good guests, Scott Galloway?
Isn't that good? I'd like to say it's my new son. It's my new adopted son. Wouldn't that be nice?
My son's just beat each other up. I would love to have a son like that. They will. They will.
You promise? No, my son will be like that. My son tells me every day. No, but mine will.
You're just so young. They're young and they're selfish mode. It's like a rack of insurgents took over the household. No, they'll be fine.
It's hard. It's hard on them. It's hard on them. I think about my son not going to do a prom.
He's not going to do a graduation. He's a lucky kid. Sure. They're going to zoom that up.
It sucks. It sucks. It's a give a break. Give a break.
We had one of those moments yesterday that really brought this crisis home in a very poignant and sad way. Have you heard about these drive-by birthday parties? No. So my youngest is nine and his classmate is a lovely young kid, a boy named Harrison has birthday, like most nine-year-olds loves his birthday and they didn't know what to do because we can't get all the kids together.
So they did this drive-by where all the cars pulled up and all the little kids stood outside their sunroof and we all turned on. So today's your birthday and we all sang to him. And this kid was on his porch and he just lit up and it was so moving and sad. Oh, but it's lovely.
I'm going to go with love. Well, it was really nice. I think that's not a fail anyway. That's a win.
It's a sad win, but it's a win. Yeah. Come on. That's wonderful.
That's really lovely. You guys did that. My son's birthday is coming up, but he didn't want a birthday party. He's turning 15 and so I was like, I don't do that anymore.
It's like Halloween. I don't do that. Give me a car. Give me a car.
I hate you. All right, wins and fails. I think I'd like you to go, Scott. What are your wins and fails?