Security program on spreadsheets, new regulations piling up, and audit dread? It's time for Vanta. Vanta automates security and compliance, brings evidence into one place, and cuts audit prep by 82%. Less manual work, clear visibility, faster deals, zero chaos.
Call it compliance, or call it calm clients. Get it? Join the 15,000 companies using Vanta to prove trust. Go to vanta.com.
Support for the show comes from Odo. Running a business is hard enough. So why make it harder? With a dozen different apps that don't talk to each other.
Introducing Odo, it's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier. CRM, accounting, inventory, e-commerce, and more. And the best part?
Odo replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you? Try Odo for free at Odo.com.
That's O-D-O-O.com. What's the problem? What's the problem? They're very demanding.
They're very demanding. They want to engage with me. Mm-hmm. But you know what we're doing?
We're watching moments of engagement, which my book agent, Jim Levine, taught me to do. My youngest son and I have decided to watch the Simpsons. Yeah, that's great. At 31 seasons, we're on season two.
If we're still watching season seven, I think that means about half the world's population has been wiped out. Oh, Jesus. God, Scott, Scott, Scott. You're not in a good place then, in other words.
This is what's happening now. You were in a very happy, upbeat place last week. People were tearing up about your different speeches that you were giving last week, but now you're in a darker place right now. Yeah.
Glass is half empty right now, Kara. Anyway, how are you doing? You're back in D.C.? I am.
Indeed. I'm sheltering in place in my home here. I would like to leave. I would like to leave.
I would like to have my life back. But with all these people dying, it's hard to complain. You really can't. I mean, you start to see the reports from New York, which sound horrifying in hospitals there.
It's sort of the future for the rest of us, I think, in a lot of ways. And maybe not in quite that intensity, given the density of that city. But there was a piece in The New York Times by a woman who worked for The New York Times magazine about taking care of her husband, who was quite sick, but not hospitalization sick. And it sounded, it was a wonderful piece that I hate to compliment someone on sort of dystopian writing, but it was really disturbing.
And the last line was, you know, people are sort of still walking around touching doors and things like that. And she's coming back with her husband from one of the doctor's appointments. And she's like, we're like ghosts and we're like your future and you can't see us. You know what I mean?
We're visiting from the future. And so it was really, it's really getting difficult. But there's certainly a lot going on in the stimulus bill and people are trying to get their hands around all the issues around testing around ventilators, around all kinds of things that they need. I never thought I'd know this much about ventilators in my life.
And I hope never to learn more about them again. But let's get to the big stories trending as everything is changing so rapidly. I wrote a column this week. Zoom is worth more than United, Delta, American, and JetBlue combined is assumed the new superpower business.
In 2019, Zoom's market cap was $18.8 billion, which we all thought was too much. Well, airlines, 2019 market cap was at $78.1 billion. Now, Zoom market cap is around $44 billion. Airlines running a current market cap of $27 billion.
Zoom filed to the public last year. I think it stock is up from $62 to $150 somewhere in that. The first time installations of the mobile app were up to $13% last week compared to a week before that. Zoom's mobile app is installed 3.7 times more than Skype's and 8.6 times more than Google Hangouts.
This is, I hate to say, but the greatest branding situation in history, I think, which is really interesting. Scott, what do you think about this? Should people buy Zoom stock? This seems crazy.
I called it insane. This was happening. But how do you look at it? Well, so, and granted, we've gotten a lot of stock calls wrong in the last several weeks, but we did say Zoom was a decent offensive play when it was at about $100.
Look, it's in terms of the evaluation here, you referenced it's now worth more than the general motors. The PE ratio is $1,800, which is like a point. It's 20 times revenue. On any traditional metric, it's crazily overvalued.
The question is, what do you do if you're a shareholder and employee, the firm itself? I would argue that, and we never talk about employees, if you're an employee, what I've finally learned as I got older is when things are going really well, your tendency is to hold on. I can just imagine everyone's holding on to their stock. The employees there should be selling their vested shares like there's no tomorrow.
I hope you're wrong, but you should absolutely be getting some liquidity. When I tell every employee at a tech company that's doing well is until you have a million dollars of liquidity and you can ensure your kids will be able to go to college, ensure that you'll be financially secure, always be on a path to sell and hope you're wrong. The company itself should be doing a couple of things. One, they should be doing a secondary and raising $1 to $3 billion in cash.
We're seeing now that when the tide goes out, you want to have cash wrapped around you. This is an opportunity, just as it was an opportunity to Tesla miss when it was at $900, but this is absolutely an opportunity for Zoom to bulk up and build a gigantic cash war chest. The other thing they should be thinking about strategically is they should have every middle market investment bank searching for acquisitions for them right now, and they should be thinking about services they can think about getting into an offering. I would love Zoom plugins where I could see CNN streaming or CNBC tickers streaming across the top.
I could see this company getting into some sort of video on demand, B2B video on demand. They should be thinking about, they should assume, all right, we have a window here to get into other things and traditional business strategy, courtesy of C.K. Parahala is state focused. When you have cheap stock like this and you have this currency, you absolutely want to start making a bunch of different bets on different things.
But in terms of an investor, a shareholder, I would be very careful here because even if it lives up, it's not even price to perfection, it's price to mania. Those are difficult. If the stock got cut in half, it would still look expensive by traditional metrics. Right.
It was expensive back in 1962. I think it was $170 million in revenue in one of the quarters. It was very small. Obviously, it's going to go up two things.
I've got to keep it tight in terms of delivering on the promise of what they're doing because these other competitors, it's really interesting that it's more popular than Skype or Google Hangouts, which are very good services and have been around forever, which I found interesting. It's interesting why people pick Zoom versus those because they're very similar. And those are from Microsoft Skype and Google Hangouts from, obviously, Alphabet. The brand is doing so much better.
That's an interesting kind of unusual trend, I find. And then secondly, just the numbers just don't add up. And even if they execute perfectly, like last week, I was doing a Zoom thing with Jessica Lesson of the information about women in tech. But we got Zoom-bombed, which was a number of times more.
I've heard about this. Describe exactly what happened. Describe an interesting detail about this. There is no such thing as bad porn.
There's just porn that doesn't work for you. I'm telling you, as I don't use as much porn as you Scott Galloway, I'm guessing by a factor of 103. But I have to say- Don't work on my hobby. Don't work on my hobby.
There's a guy who had an entire arm of someone's ass. That's really one of them. You need genres? It was beyond that.
I'm not going to get it with you. No, I'm not moving down this road. That's as far down this road as I'm going. The 80s, REM, U2, and Fisting porn.
Listen to me. Listen to me. That's enough. Sorry.
How did that happen? And if there's all these kids using it, I just was thinking if there's these public zooms. And it's happened all over the story about Zoom-bombing. So that is like execution.
This stuff has to work while people are using it. People are sort of comfortable with a little bit of glitching us right now because they figure it's overwhelmed. But the numbers, you know, it's interesting to see two things. One, if people will continue to do more at home working after this is over, and of course, this company stands to benefit.
And if they don't, what happens to it, what they're doing. And I think you're right. This is the time to make hay. I hate to say that about someone, a company, but they have to make hay while the coronavirus goes on.
Well, hold on. Let's be in the moment. First off, I get about 11 emails a day from Jessica Lesson at the information, even though I'm not a subscriber and I will. It seems like every day it's a new offer and a new opportunity to subscribe.
And they do a great job of teasing you. And I think I got to say, well, I know I'm getting there. I'm getting there. I got anyway.
So I get an email saying that I join us for a podcast or whatever it is live webinar with Kara Swisher to talk about women in tech or some such. And my first emotion is always a little bit of jealousy. Like why don't they invite the dog? Okay, fine.
I'm happy for you. Obviously. And then I got to follow up email like email 14 the next day from Jessica saying, you know, and the assholes who zoom porn or zoom bombed and inserted porn into my discussion. What do you think my emotion was right there?
You're thrilled. Joy. Your toy. Oh my God.
That is that was literally one of the best things that happened to me this week. Hearing that your your webinar with Jessica lesson on women in tech was porn bombed. I mean, that is wonderful. Life.
Life is worth living. Shot in Freud is your life is worth living. Your life is worth living. Anyway.
Kissed out. Like what do they have? They have to like make it work. But I do think this is going.
I mean, four weeks, five weeks when people aren't using this as much or whatever this sort of goes down. And I think they'll be a resurgence. But I don't know if people will return to stay in the work at home mode as much as people think. People are fine with it.
I don't think everybody likes it. And they prefer to be at the office. I still think that's going to be a tough one to shake, even though there's all these predictions in that case. I think people are not, do not like it.
Do not like being on these things. I think my kids really hate it. They don't like doing school on it. So I don't know.
We'll see. But in the bigger picture, big tech, I think my column is going to come out just fine. They have oodles of cash. They're going to shake out.
As you said, the herd is going to be called of their rivals and anybody. And then when this moves on, they're going to be in a position to take advantage of it. Yeah. Sorry to imagine they don't come out stronger.
I also think that if there's a winner here, I don't want to say there's a winner, but of the of the big tech firms, I think Amazon's reputation is going to come out of this, the most burnished. And I have a lot of friends at Amazon. I have a lot of former students, a lot of my classes, Amazon. And I'm a critic of Amazon, specifically Jeff Bezos and believe that they need to be broken up for the health of the economy as any company that gets this power powerful should be broken up.
But there's just no getting around it. Amazon employees have really risen to this occasion. And whether it's the folks in the trucks delivering, the people in the warehouses, the decision making, they've made around moving to essentials to ensure their supply chain remains robust around key items. I think Amazon has shown a really a lot of grit and fortitude and the employees there and the management there should be recognized for the risk they're taking.
And it's important that people get stuff. And I think they've shown a lot of leadership here. I think right now, people said, well, who do we put in charge of this global pandemic? People would say, Dr.
Fauci sitting on top of Amazon would be a pretty good cocktail. Yeah. They're going to come out of this stronger than ever. You know, there are stories of course of people being infected in warehouses and things like that.
And you're right. The risk is the risk is the delivery people. What's amazing is these delivery people who do any of the delivery people who are doing all these things or people in restaurants and hardware stores and things like that do not get enough. You know, except the people obviously health care workers on the front line are the most heroic here.
But it definitely is interesting to be able to keep working and especially with some of these people who should pay they get from these companies. I think Amazon got to step up and start paying a lot of these delivered people and people that stores more in these warehouses more for what they do. I always thought they do take it. I think all these companies take advantage of these people's livelihoods.
And now when there's going to be less employment, they're going to get a better deal. Like their numbers are good. Same thing with where everybody else is going to get a better deal now with people desperate to pay their money. You know, despite the fact we're getting this massive stimulus.
But let's go over to the live sports industry. It's an unprecedented crossroads. This is something that is so analog with the cancellations of postponements. It's also leaving a media that covers them reeling in the way.
You know, I don't know what Bill Simmons is going to do all day. Thursday was Major League Baseball's opening day, which of course was not happening. Earlier this week, the 2020 Summer Olympics were postponed. The NBA season was canceled.
NASCAR was postponed. March Madness was canceled. Back to the Olympics. It's the first time in modern Olympic history, the games will be postponed.
And I think probably to 2021, they were talking about NBC and Discovery who paid more than $1 billion to show the 2020 games left a schedule thrown into chaos, really. NBC, Universal was counting on the Olympics to promote some drive subscriptions to Peacock, the company's direct to consumer streaming services scheduled to launch in July, which is probably not launching in July. Meanwhile, the NFL plans to stick with this April schedule for this year's draft despite conflict on how to proceed between team, general managers and NFL commissioner, Roger Goodell. This is a big, big area of business, both analog and from an advertising point of view and everywhere.
This reaches everywhere. Yeah. It's a huge industry. And the thing that's just new about all of this so that we didn't model out is that a recession revenues go down.
40% of you can reduce costs, 20% so you lose $200 million on a billion in business. Certain businesses have just gone from running at full capacity to zero. Right. And no one, the NHL, the Premier League, no one modeled for this.
And so you're seeing, I mean, there's really triage right now in some of these businesses. And if you look at how it ripples through the supply chain, whether it's StubHub or LiveNation or the vendors or the bonds, the back, the facilities, the leaseback bonds, the back, the venues. I mean, it's just the people who have the concession contracts, the people who work in business to go from full capacity to zero just overnight. And then what do you do in terms of scheduling?
I'm not sports fan, so I literally haven't noticed it. But when we did one of those family meetings and we decided I read somewhere, you're supposed to communicate openly with your kids about what's going on. And they just sort of knotted their heads. They didn't really get it.
They got a little scared when I said we can't go see Bob Shenja because they're more vulnerable and they wanted to know what I meant by the word vulnerable. But, and then I told them that a lot of events are being canceled in about two minutes later, my son said, is this the Premier League game? So they being canceled? And I said, most likely.
And that's when he lost it and began to cry is like, don't take away as Byron Munich versus Barcelona game. But sports matter. They get people, you know, it's a collective shared experience getting together. But that industry, it'll be very interesting to see.
There's a company called FIVO that is a startup that does social. It's a means of creating social groups where you say, all right, Karen and I, you and I want to go to the wizards game and we announce it on our social networks and we get a group of people to buy tickets and groups so we can sit together. It's a cute idea. I mean, imagine that social app for live events.
Imagine that business right now. I know. I mean, it's beyond that. I mean, just think about, you know, the Ringer SB Nation.
Leisure Report, Barstool Sports ESPN. I mean, you know, Bill Simmons was smart for having sold before. Oh my gosh. Oh my gosh.
Can you imagine? No, I can't. Lucky him. He's the second lucky guy in the world.
The lucky guy in the world is his kid. Richard followed him and his wife for inspiration. He was a student of mine and literally I love this guy as a classic entrepreneur. He started buying $5,000 worth of cotton and sending it to Israel and milling it and bringing over to Brooklyn and selling sheets and betting packages.
And it's called Brooklyn and he sold he closed three weeks ago on selling his company. Right. I mean, if you look at Time Warner, they look like, I mean, it's really knowing when to sell it's definitely, it's probably more luck than an art, but I'll tell you, it's interesting to look at it until they're getting its money, the billion dollars from, from, from their group. 100%.
Yeah. They're stocks off 20 or 30% and they wouldn't have got. And not quite frankly, this is probably saved Jack Doris. You know, one's really worried about activism right now.
Activism is sort of a luxury we don't have right now. But also if you look at Disney was the best performing media stock of the last 10 years other than Big Tech, I think it was up 700%. But now that it's come down, it's up 500% in Time Warner, having sold at the peak two years ago was up 600%. So now actually Time Warner is the best performing media stock because they sold.
Mm-hmm. Yeah, which is interesting. So what do you do? What do you just like?
You just like right off a year, right off a year. It'll come back obviously. I think people still will want, once it starts up again, they'll want to pay attention. But I don't think that's going to, suddenly we're not going to go, oh, we don't need sports.
But like if you're NBC Universal and Peacock, how do you get people watching it? If you're, how do you, how do you make up for what's happened? Well, a lot of these companies just won't. I mean, they just won't.
It's not, it's not like if people say, okay, I've had, I haven't eaten McDonald's in all of April. I'm going to eat twice as many burgers as I may. Just the real truth, demand destruction. The broader question is the crisis is a terrible thing to waste and on all the calls I'm on, we spend the first half of the probably two thirds of the call talking about how do we triage and just cut costs and this is a difficult time because you're going to see, and the unemployment numbers, I believe, are unemployment.
Yeah, they're up there. From 200,000s to 3.5 million. Yeah. Yeah.
So it's striking that I. You know, my viewpoint is you can't protect jobs. You can protect people and what I'm telling entrepreneurs and the companies that I work with is that you got to be fairly Darwinian and harsh around job cuts, but in it, for doing that, what you should do is compensate and try and provide as much severance as possible but Every company, and this is harsh especially small companies, I think you have to go over every expense line and say, we either got to cut it or negotiate it right now. But coming out of this, there's a lot, I do think there's a lot of silver linings kind of post-corona.
You're going to see a lot of great businesses started as we come out of this because everything will be less expensive, people will be more open to innovation. But it's really an opportunity for larger companies to rethink their business. And that is if we got a clean sheet here, how would we change the way we go to market, what cost would we keep, where would we invest, what bigger bets would we make, how do we right size, what is the right size of our labor force, looking at their compensation strategies. I was talking about this with several CEOs.
In fact, I interviewed Stuart Butterfield from Slack and he said that's exactly what they're doing. Even though they're doing rather well during this time, he's like, I can now look at everything. I'm spending a lot of time within the cost structure of our company and what we're doing and getting rid of stuff. When you sort of stuff we're on the bubble, they're not on the bubble anymore, they're off the bubble, they're off the bond.
And so I think it does make, and you can say, ah, coronavirus, somebody get rid of that. You've got to clap cover. You've got to make big decisions, take a hit to earnings because most big decisions and big investments require a hit to earnings. It's doing away with your dividend or spending stuff, but it gives you the cloud cover to make some big, bold bets.
Two things. Where does this advertising money go to? What is it just sitting there quietly, like holding their powder? Where does the advertising money go somewhere else?
Some people told me companies like Quibi and Netflix are still spending because they want to have stuff. Where does the advertising money go to? Where does the media money go to? Well, it depends what we're talking about.
In the case of Netflix and Quibi, they have access to incredibly cheap capital. They keep spending because they're on the verge of launch and they don't suffer from an absence of capital. The steady state companies, typically, the money goes back to it. They just pull back because they go into survival mode.
But it's an interesting question because if you look at periods when there's been a dramatic reshuffling in market share amongst players in a sector, it's typically because of one or two things. The first is extreme product innovation where tie comes up with tie pods or Pepsi comes up with bubbly, and there's an incredible, they capture lightning in a bottle and they just come in and grab share. The other time you see a dramatic shift in share is in a period of chaos, one company kind of has the capital and leadership to make a huge, continue making big investments in marketing and supporting the brand. A seminal moment in dryers and weird CPG history was in recession in 91, Unilever and all the other ice cream companies pulled back on marketing and dryers decided to increase their marketing spend and they grabbed a dramatic amount of share.
The bottom line is just it's a great time to have cash right now and start thinking about offense in terms of the stocks you buy in the market. It's a great time to be a company that has the resources to say, how could we play offense and is everyone else is retreating? Can we decide to maintain our marketing or rethink our marketing or make some big bets? But the companies that are in triage right now, it's not like they're just saving their marketing money and they're going to double their investments in advertising and radio.
That money, a lot of that money probably does not come back. Does not come back as I agree with you. I think it just starts again and you start to think really hard. But very quickly before we go to break, we work at it again while everyone else is shuttering.
We were paying people to come into the office. No, it's going into co-working offices. We work. Talk about putting the fork in this company.
Like, wow, wow, wow, this is a hit. The hits keep on common, as they say. We work websites that only two of its co-working offices in North America were closed and none were closed. In Europe, we work as a lot of employees and normally staffs locations to work from home.
But this week, it started to entice them with $100 a day bonuses. I mean, I don't know what to say. You don't have to shuttering play. I mean, DC just had to shuttering plays.
And most of the governors are ignoring Trump's April surprise, you know, thing, whatever, resurrection of the United States. What an incredibly inappropriate way to compare it to. But Scott, go ahead. Well, we were going to think about the good old days when the spectacle or the shit show that was the collision of hubris, third base venture capitalists, people who mistake their good luck for talent and the charismatic 30-something Jesus-like figure who raised it.
Or billions of dollars out of the Middle East only to take it in the street and burn it. It all seems very quaint now, right? The whole world has much bigger fish to fry. But if you've been following the story, we made this prediction last year.
We work even after the bailout was eventually going to be a bankruptcy that they were just kicking the can down the road. And I don't know if you noticed this, but stop and quietly decided to re-nig on their deal and it's a extraordinary force to measure circumstances. And they're not going through with the buyback of employee and investor shares they had agreed to. And they're trying to use this cloud cover.
But again, this company, it's done. They brought in a new CEO, a very intelligent guy. And I guess as they guaranteed him $25 or $50 million, regardless of what happens here. But this company is going to be one of those companies that got swept off the decks here.
SoftBank will have the opportunity to cast it as they can now stay face. Oh, it was Corona. This was one of the many companies taken down by Corona, but we work as we know it is now the Walking Dead. And that is, I mean, think about mismatched durations.
You buy long. You buy tenure leases. But their customers, most of them on 24 hours notice, can stop renting their space. And who the hell is going to go into a we work right now?
I know. It seems very dirty. So you're going to see announcements. I would bet in the next 30 days when we work that they're going to start either filing individual property bankruptcies based on how these things are set up.
But that whole space for obvious reasons is going to get absolutely right. But is it 100% going to be that way? Is it going to absolutely have to have no places like that? Because the people like working in those places or just the business is gone.
No, the concept works and it'll come back. It'll just be right sized. Most of the equity will be wiped out. A lot of the spaces will be given back.
They'll be chapter 11s across. So the way hotels are usually set up is they're set up in separate LLCs that you can actually declare bankruptcy on one property without taking the whole company down. It's not guaranteed by the whole company. And I would imagine that we were probably did the same thing.
But we work as a concept. I mean, they're going to go from 500 locations. I would bet to 100 to 200. There's going to be some sort of reorg here.
I got to imagine the revenues have gone to zero. Sopping has already said, basically said, all right, we're out. When they've going back on this deal was announced a week or two weeks ago is basically said, okay, we're pieced out. We're done.
And stopping to their credit is selling some assets, including I believe shares in Alibaba. They're showing up their balance sheet and such that they can begin to play offense. And the day they announced they were increasing their liquidity and kind of kind of calling back to the core. The stock, I think, was at 14% that day.
So SoftBank, which is in my view, a well-run company, is probably going to try and also get out of the business division fund. But this gives them, again, a crisis is a terrible thing to waste. This gives them the cloud cover to make some hard decisions that would have been a loss of face if they had closed. Right.
So they can just do that. They can just say goodbye. Goodbye out of it. That's right.
What's the most unlucky company this year? I would say we work correctly. I think that's... Oh, no.
Those are self-inflicted ones. They're not unlucky. There's a lot of companies that are just incredibly, you know, I don't know. Some people, some good companies that were measured and smart.
I mean, you know, every retail I've talked to, every retail I've talked to has stopped paying rent. Yeah. And that's today, April. I mean, next week, April 1st, which I think is coming around.
All right. When we get back, we're going to have listener mail. Hold, please. And we'll be back.
Support for the show comes from Odo. Running a business is hard enough. So why make it harder? With a dozen different apps that don't talk to each other.
It's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier. CRM, accounting, inventory, e-commerce and more. And the best part?
Odo replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you? Try Odo for free at Odo.com.
That's O-D-O-O.com. Recommendations can't be amazing. I mean, maybe someone recommended that TV show you've been obsessed with lately. But when it comes to home projects, it's different.
If you don't like a show, you might lose a few minutes. If you hire a friend, a friend, a friend to fix a leaky ceiling, you could end up with a flooded kitchen. Maybe I know a guy just isn't enough for your home. That's why Thumbtack works so well.
They'll match you with a top-rated local pro, and you can see photos of past work, credentials and reviews all right in the app. For your next home project, try Thumbtack. Hire the right pro today. OK, Scott, we're back on Pivot.
Let's dig into a listener at Mail question. You've got to keep believe I'm going to be a mailman. You've got mail. Hi, Scott and Cara.
Given the fact that Congress just passed a relief package to help with the economic fallout from the COVID pandemic, what are some legal mechanisms which should be put in place to prevent corporate opportunism? Examples include a stipulation of no executive bonuses for a certain number of years, requirement to appoint an employee rep on the board, and a prohibition on stock buybacks. Already I've seen at least one story of a CEO attempting to secure corporate benefit by using employees' leverage. I'm wondering if it also could be realistic to implement some of these mechanisms going forward to prevent further well transfer from the bottom to the top.
Thanks. Keep doing what you do, Mike. Mike, I'm sorry to tell you, Mike. I think it's already done, correct?
I mean, I haven't gotten into the bill, but it looks like they've gotten this inspector general on oversight committee. The Trump's can't benefit, although somehow they will. I somehow they'll get something in there. And there's the pandemic response accountability committee to oversee the loans, but this looks pretty happy towards corporations.
This is a bailout, right? I mean, although Americans will be getting checks, the amount of money is going largely to businesses. Yeah, I actually think this is pretty good legislation. It was A, it was done quickly, and it was bipartisan, which is something we haven't seen a lot of.
I think people want their governments and situations like this to intervene. Every country has done something sort of similar. It does put cash in most people's pocket. Unfortunately, if you don't have a bank account on file, it could take up to four months.
It's like, you know, government has to rear its bureaucratic head, and there's a lot of people who aren't going to get money for a while. And the notion is not to, it's kind of strange this time. We're not encouraging people to seek work. We're encouraging people.
We're encouraging companies to keep jobs. So the idea is that there's aid to small businesses as long as you don't furlough people. I do think there's some interesting things in here, the fact that the Trump's can't benefit. Can you think about it?
It's not just the Trump's. It's the Congress heads of any of their children and their children. Yeah, which I think is really good. And the other thing that was shocking, I was thinking the other day I work at a venture-back company, I'm like, would it be ethical for us to take advantage of these small business stipulations?
And there's something in the bill that says that venture-back companies can't take advantage of it, which I think is the right thing to do. I think it makes sense that it's income-adjusted, that if I think you make over $90,000 a year, you're not going to get a check, which is absolutely the right thing to do. I actually think this is given the situation that we're in, given the speed with which they acted, given the size of it. I think it was bold.
It feels to me like bold smart legislation. I think the government's doing what we're supposed to do. What's interesting is focusing on this. You obviously want to focus on businesses, keep people working, like not to lay people off.
And I think that's the idea, as we were just talking about, you know, making hay, while coronavirus rages is something that we just said, people should do. In this case, you know, businesses could sort of fix problems, right? You can use them as cover, and that's the danger of this, is they'll be like, well, you know, I was going to do that anyway, or I was going to do that. And so I think that's really what it is.
I do think that there should have been more focused on workers more than anything else, giving relief. But you know, they're going to do that. But what I think is interesting here is the government, you know, instead of doing loans, there was one Congress, a senator I never agreed was pet to me from Pennsylvania, because it was, he was like, you should be loans and not bailouts, essentially. You know, they're grants is what they are.
And I kind of, in that camp, like I think it worked in the last time, but this may be an unprecedented situation that we can't do that. But I agree with you. They did it very quickly. And except for the wrangling that went back and forth, it was relatively calm.
There was just a little bit of insulting going back and forth. There's a tiny bit. And even in the insulting when the Republicans tried to make Kay out of this Kennedy Center grant, Trump was like, oh, I like the Kennedy Center for goodness sake. Let's not focus on that.
And I was like a moment of clarity from Donald Trump, which was amazing. So I agree with you that was overall, but it does still feel like bailout versus another more creative. But I don't think they have time. They had the Wall Street had to hear this.
And so did the global financial and credit markets. Yeah, it's in to our listeners question. There's sort of short term. You don't want perfect to be the enemy of good.
And in these types of environments, the key here is speed. And you'd rather have legislation that is 60 or 80% of what you want ideally, but done early and quickly, because there are a lot of people that it's a matter of days before they're kind of living in their car or taking unnecessary risks or really feeling tremendous amount of stress or companies deciding to lay off 3,000 people instead of 1,000 because they're worried. And the airlines could have gone away in the next four to six weeks. So you'd rather, I think you have to be a little bit ready fire aim here.
Some of the things she's talking about inequality and wealth. It's very hard to restrict stock buybacks because they're a form of dividends. It's hard to get when the government gets involved in setting compensation limits. I think that's dangerous.
I'm on the board of the company and obviously we're thinking about, okay, management and the board need to show some great here and take an executive cut in compensation. But at the same time, if none of your executive team is going to make any money in terms of options, are you going to potentially lose them to other people when the markets come back? So you end up with some inefficiencies, you end up with some injustice. And if you're seeking justice, you're not going to find it in the corporate world.
But in general, I think it's very dangerous. Most attempts at goodwill and equity through legislation, around compensation, around forms of capital structure, end up failing. I do think you'd rather put up, let the New York Times go after some people and talk about the anomalies and talk about the integrity. If they do anything egregious, then they'll get caught for one.
And there was a really good story. I think it was in the Washington Post about most of the people that are getting balance are people who've acted badly over the past couple of years in terms of employees and everything else. So anyway, it's an interesting time. I think they will get caught if they misbehave for sure.
And I think that's really, you're waiting for that story a year from now of someone who did that. And then the same part is that they really, a lot of these, like the airline industry, all kinds of industries have been doing things that benefit the top echelons, and they are getting a break here. But I do think this is an unusual situation where we just have to just suck it up and say, yeah, they acted badly and we're going to still have to save them. We're going to have to like pull the shitty person into the lifeboat.
They just have to be. They have to pull into the lifeboat. Well, I think he referenced it sort of interesting. I don't know if we're going to think this way, but in Germany, which really never had a recession, which still has a, they have any quality, but not to the same extent we do, it's mandated there that somewhere between a third and half of the directors are represented by employees.
I think that's a big great idea. I've always thought that. I'm just perplexed why that doesn't happen in this country more. Yeah, it would definitely shift power.
It would be what that effectively does at the end of the day. It's a transfer from shareholders to employees. It's a transfer of wealth from one stakeholder to the other. In the US, we have always opted for shareholders.
It's kind of, it goes shareholders first. Well, actually it goes consumer first, then shareholders and employees in terms of the pecking order. And I think people are starting to rethink that balance. Just because you can pay your people minimum wage doesn't necessarily mean you should.
Right. So I think we're going to rethink, there's going to be so many interesting things we rethink coming out of this. Look at the collective versus capitalism. Can you have, is a society such as ours really set up to handle such as this global cross-border cooperation?
We're just going to look at a lot of things. If you think about, I did a interview yesterday with Professor Jonathan Hyde, who's sort of my role model as an academic. And he was talking about, he said that, and I didn't notice it, pestilence and plagues and pathogens have killed multiple more people than wars or violence. And if you think, well, if a government's job in a liberal democracy, meaning institutions are really here as management and then to allocate capital effectively, what that means is that technically speaking, the CDC should have a $580 billion budget and the Defense Department should have a $3 billion budget.
And I think you're going to see a re-shifting. You're going to see a re-shifting. You're going to see a re-shifting. I would think in budgets.
You've got to think of CDC and there'll be something like Interpol, a global CDC that will probably be better funded. And it's also going to make, I think it's going to make us realize that a democracy demo means people, that it's dangerous. It's got, if you ask people, they will always work for in the short term, more benefits to me, my group and lower taxes. But if you defund the institutions that are responsible for climate change, upgrading our Canadian infrastructure.
I'm not with you on this one, Scott. I think people are like, we're like the one, the grasshopper. Yeah, we're just going to play our little music when this goes on and end up right back in the same place. I'm actually, you're usually the optimist.
I think this could be the mother of all vaccines where, hopefully, this is my hopeful diet shot. And that is, hopefully, we learn from this. We realize that in the US believing you're going to be rich and will never get sick is not perhaps the best way to live your life. That global cooperation is important.
That being rich doesn't immunize you against things that are things more important than money, and that this generation coming up that was subject to social media and incredible indulgence from the parents might actually take from this. The cooperation and comity of man is more important. I'm hoping. You are a very awful man.
I don't think that about the opposite. I think people get worse. I think, you know, some of the things, and again, it's sometimes just the media coverage. For example, what's happening in New York right now?
I think a lot of people like, oh, it's New York. Like, whatever. What I think they should do, which is interesting. Because they do show these things.
Europe, you saw the bodies, you saw the numbers, you saw these. There was a piece on the Times showing a refrigerated truck where they're going to put bodies in these places. It was a really incredible video with a doctor there who just brought her camera in. It's like, fuck this.
Because the people who I'm working with are saying everything's fine. It's not fine. I'm going to show you why it's not fine. I think we have to show it.
I think it's really, we're very antiseptic in this country in terms of showing death. And this has got to be shown. What's going to happen in New York? And then it'll iterate around largely.
To your point, one of the things I got us out of Vietnam was the first time photo journalists were allowed onto the front lines censored. And you know what? We decided to do away with that shit in Iraq. We said no.
So we didn't see what 550,000 Iraqi citizens dead look like. And I agree with you. I think maybe just having some live cams in the emergency admittance rooms in New York and in Milan or wherever is Northern Italy might give people a certain wake up call around the severity here. But I do think this might be going back to the moment of optimism.
The mother of all vaccinations that this might, I think I'm hoping that we come back from the stronger and more thoughtful about the importance of institutions and global cooperation. I would hope so. And of course, next week we're on Monday. We're going to talk about Corona, Corona divorce and Corona babies because we're having Esther Perel on to talk about relationships.
I think relationships will be an interesting thing. Just what you're talking about. We're going to take one more quick break. We'll be back for your prediction, Scott, because we need a prediction.
Mr. Hopeful. Let me get back. Support for the show comes from Odo.
Running a business is hard enough. So why make it harder? With a dozen different apps that don't talk to each other. Introducing Odo.
It's the only business software you'll ever need. It's an all-in-one fully integrated platform that makes your work easier. CRM, accounting, inventory, commerce and more. And the best part?
Odo replaces multiple expensive platforms for a fraction of the cost. That's why over thousands of businesses have made the switch. So why not you? Try Odo for free at Odo.com.
That's O-D-O-O.com. No, no, that's on Monday. We're going to do it today. It's predictions.
I have a win in fail though. Quickly. Go ahead. My fail is back to work movement being sponsored by the President and Fox.
This lieutenant governor, Dan Patrick, trying to position us as seniors. That seniors are caring that if you want to express love for your children and your grandchildren, you should go back to work because it's more important. The risk to your health is compensated by ensuring that Johnny and Jenny have a 401k. I just find that so insane.
He can go right ahead and die. My mother, I read it to my mother who's Miss Fox News sale. And she's like, I'm not dying. What an idiot.
He's crazy. Like that's not going to put a stress on us. I'm so jazzed. I'm so glad back.
Glenn Beck said the same thing. And you know what? It's not just them. I have a lot of friends who are business owners and private equity guys saying that we should think about certain people getting back to work sooner.
If you had Dracula come into town and start killing people and hopefully, and this hasn't even happened yet. We still haven't flattened the curve. But let's assume he flattened the curve. Let's assume he injured Dracula and you saw him leaving town.
You wouldn't just say, okay, let's wait until he gets back. He'd hunt his ass down and put a stake through his heart. We absolutely. The notion that some people should go back to work under the auspices of some bullshit protective paternal notion of the economic well-being of our grandkids.
You know what our kids want? They want us to be alive. They don't. I mean, that is just so insane.
I would urge. He's a big Trump supporter. And even the governor of Texas, this guy's the lieutenant governor, is sort of backing away from killing. Oh my God.
They're killing off their constituents, which is amazing. This is like the Fox News group. But you know what? This was the new message on after Fox News.
Let me just say, Fox News really needs to think hard about what is culpability in this whole thing. And now they sort of got okay for five minutes just like the president and now they're moving into this ridiculous narrative. It's just, you know, Tucker Carlson for five seconds was decent. And so now he's not.
He's in decent in this regard, bringing this guy on. It was on the Tucker Carlson show. So I need a prediction from you, Scott. Well, I'm sorry.
I'm not done. I'm not done. Let us shock her. Care is disappointed in Fox News.
Oh, come on. Think about this. Think about this. If we let us assume we flatten the curve and keep socially distancing.
If this thing comes back, it goes from being a pandemic to a plague. Think about most of us about cancer in our lives. And it's it's meaningful when if someone gets cancer, what's profound is when it recurs. That's when you go, okay, we got to really start thinking about what this means.
And if this thing goes away and comes back because because Lieutenant Governor Dan Patrick convinces some old people, the most vulnerable amongst our population to go back to work, that could be that could go from a pandemic to a plague. That could go from tragic to absolutely devastating on a on a global level. I just think that is good. The height of recklessness and irresponsibility.
You certainly can die for the rest of us. Dan Patrick, I make this offer now just so you can get in touch with the risk adjusted risk. You are asking people to take care. Go on a ventilator for an hour and just check out how much fun that is and whether you think this is worth the risk.
But anyways, that's a bit incendiary. My win is the Netflix series. This is a hard side. My win is the Netflix series Tiger King.
Have you seen this thing? No. Oh my God. It's it's genius.
It's this guy. He is a gay polygamist who carries a gun and has one of these big cat zoos. This guy is this guy is living his best life. Quick fun fact.
There are more big cats and captivity in the US and there are in the wild. It's a very strange segment of people also people that own monkeys are weird, but people that own big cats are mean. I'm learning that now. But it's not Netflix.
It's this fantastic series about just how strange America is. Anyways, that's my win. Tiger King on Netflix. And loses his back to work.
You want a prediction, right? Yes. I want a prediction. Okay.
A prediction. So what companies are going to give me some companies. I'll go bigger than that. You said carnival before.
I'm thinking maybe you're wrong on that. I'll go bigger than that. I'm going meta here. The markets never form a V.
If you look at all economic crises in the past, we usually bounce across the bottom, go up a little and then retest the retest the lows. And then about three to five months later, typically you have the market revert to its 20-week average. That happened in 2008. It happened in the 70s.
It happened in the Great Depression. This is two-day run we've had for the first time since February. We've had two back-to-back obsessions. This is a head fake here.
We're going to test new lows. It just feels... Wow. When you start to see some of the footage that's about to come from the surge, unfortunately, and some of the employment numbers and the recognition that government stimulus can only do so much, I think the markets are going to test new lows here.
This is a head fake. We don't have a V here. We're going to have something bounce along the bottom and then go down again and then the markets will begin to recover. So anyways, I don't like this prediction, but I think we're going to test new lows in the down in the S&P over the next 15 to 30.
Wow. Wow. Anyway... It's just money.
It's just money. You know what? I'm not going to watch it. I'm just going to wait 20 years from now.
I'll look again. That's what I'm going to do. I need to actually retire. I'm just looking 20 years.
That's my plan. That's my pandemic plan. It's like hopefully we'll be better in 20 years than when I need to sell out. Anyway, before we end the show, I want to talk about an interview I did with Deepak Chopra for Recode Decode about the global pandemic.