America’s Casino Economy — with Kyla Scanlon

Scott Galloway speaks with Kyla Scanlon, an economic commentator, educator, and author of In This Economy? How Money and Markets Really Work. Kyla explains how gambling culture has seeped into markets and everyday investing, why America has effectively become a giant bet on AI, and what the rise of “risk-aggressive” leadership means for the next generation. They also explore the widening gap between Wall Street and the real economy, the dangers of over-concentration in Big Tech, and how social media and polarization are reshaping economic behavior. Follow Kyla, @kylascan. Algebra of Happiness: are you unafraid? Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:30Speaker 01

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• 0:46Speaker 02

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• 1:13Scott Galloway?

  Episode 371. 371 is the country code for Latvia. 1971, Starbucks opened its first store in Seattle. True story, I've gotten really into VR. And like many technologies, the first great real application is porn. And I tell you, you cannot get over how immersive it is. I got totally lost in this porn film in VR. Unfortunately, I forgot I was at a Starbucks.

• 1:42Scott Galloway?

  Go, go, go!

• 1:52Scott Galloway?

  Welcome to the 371st episode of the Prop G Pod. What's happening? I'm home in London now, but heading to New York soon to kick off my press tour for our latest book, Notes on Being a Man. And truth be told, I'm looking forward to getting to New York and I'm looking forward to seeing friends, but we're doing... Doing literally everything from The View to Morning Joe to Bill Maher. And quite frankly, I'm intimidated. I'm just really wanting it to be over. I want to do really well. And I guess that's good. That's part of it. But I have, I wouldn't call it anxiety, but I'm not, I'm more intimidated. And it's, sometimes it's better to be lucky than good. I know this book is going to sell a lot.

• 2:36Scott Galloway?

  And I know that sounds arrogant, but I usually have a feel for this stuff. And again, more lucky than good. The timing is right. This is a conversation that's sort of evolving and pivoting from, okay, the manosphere, where some really ugly voices entered into the void. To the far right's credit, or to the right's credit, they recognized the problem before other people. They said, something is wrong in Mudville. The problem was their answer was to regress to the 50s, where non-whites and women had much less power, much less agency. That's not the answer. And then to start these weird fucking videos from Tucker Carlson, or nominate for president people who conflate masculinity with cruelty and coarseness. So that's not correct either.

• 3:19Scott Galloway?

  So I think there's an understandable, or has been an understandable gag reflex. Anytime you start talking about the crisis of young men, or the crisis young men are facing, my producer says, what is the point of the book? I'll give you sort of a distillation. And that is, I think that young people really benefit from a code. And that is, you have to make hundreds, if not thousands, of decisions every day, big and small. And it's difficult to make these decisions just floating in space and responding to them real time. And where do you get this code? You can get it from your religion. You can get it from the military. You can get it even from your corporation. You can get it from your parents. What does that mean? It means you should immediately feel that that physical strength is used to help others, to protect others.

• 4:02Scott Galloway?

  So let me get to what I think are sort of the three legs of the stool of basically masculinity and one overarching theme. Provider, protector, and procreator. Provider. I think in a capitalist economy, every man should, at the outset, as a young man, assume that he is going to need to take economic responsibility for him and his family. And by the way, sometimes that means getting out of the way and being more supportive of your partner who's better at the money thing than you. I think we have to, from a very young age, teach boys that the greatest demonstration of strength is protection. And it's not just physical. People are badmouthing someone else. Your default is to protect them and to defend them. Finally, procreation.

• 4:44Scott Galloway?

  I think we need to celebrate a young man's horniness, his desire to have sex, his desire to have a partnership. One of the key attributes of a man that will yield dividends is their ability to establish friendships, express friendship, but also demonstrate and communicate romantic interest, and here's the key part, while making that person feel safe. But real mating and real interest begins in person. I went to temple and I saw how kind he was. I worked with him and saw how outstanding he was at what he does. I hung out with him and just found that he was funny and nice and responsible and wasn't a fucking idiot staying out late. He went home because he had a plan.

• 5:27Scott Galloway?

  I always felt safe around him. Providing, protecting, procreating. And what does it all add up to? What is the litmus test for when a boy becomes a man? It has nothing to do with age. I know a lot of males that have never become men. It has nothing to do with a religious ceremony. It certainly doesn't have anything to do with sex. What it has to do with is, one term, surplus value. You witness people's lives. If you are able to someday, towards the end, think, I loved so many people so much that while I received a great deal of love back, I go out on the plus side of this column, I have achieved surplus value, then you leave this earth a man. All right, enough of that.

• 6:11Scott Galloway?

  In today's episode, we speak with Kyla Scanlon, an economic commentator, educator, and bestselling author of "In This Economy: How Money and Markets Really Work." We discuss with Kyla Trump's casino economy, what to make of the AI bubble, and why the markets no longer reflect reality. So with that, here's our conversation with Kyla Scanlon.

• 6:38Scott Galloway?

  Kyla, where does this podcast find you?

• 6:41Kyla Scanlon?

  I'm actually in Florida right now, Marco Island.

• 6:45Scott Galloway?

  Marco Island? Wait, you have grandparents or parents who vacation in Florida? No? What's going on?

• 6:51Kyla Scanlon?

  No, no. I'm here for the Equipment, Leasing and Finance Conference. Yeah. No, my grandparents don't vacation here.

• 6:56Scott Galloway?

  I heard it's a crazy party. Has it gotten out of control yet? The ELF party?

• 7:02Kyla Scanlon?

  Yeah, Michael Phelps is here today. So it's fun. Yeah, I spoke yesterday. So I'm leaving later today, but that is where you find me, is Marco Island.

• 7:14Scott Galloway?

  Thank you for being here. We wanted to bring you on because you had a, what was I thought? A really interesting and provocative piece in the New York Times arguing that the American economy is really Trump casino, you said. Can you walk us through that thesis?

• 7:32Kyla Scanlon?

  Yeah, so that piece, you know, the economy has always been somewhat of a casino. But underneath the Trump administration, like there's a lot more room for gambling. Like you could see tariffs as a gamble on the American economy that our allies will want to continue to work with us, that the dollar will remain stable. But then also in private markets, you're seeing a lot of gambling-esque things too, like private credit is looking a little bit shaky. Venture capital firms are funding, like debt roulette startups. And then, of course, you have the AI bubble that everybody is talking about right now. So it just feels like everywhere you turn around, from the government shutdown to the stock market, like gambling has become the status quo.

• 8:16Scott Galloway?

  Do you think, I'm trying to reverse engineer this to something very basic, and that is, so I would argue that geopolitics is just an administration that's somewhat ignorant and hasn't done the game theory and overestimates their power at the poker table. They show up with cards that they don't actually have. And that's, I would call that poor judgment. I'm not sure it's gambling. But at the same time, on the other end, what I see is a lot of young people who are constantly reminded every day that they're failing because they don't have, you know, ripped abs or aren't on a Gulfstream or didn't make 300% yesterday on some meme coin. And they believe that that is a normal part of the economy, taking these sorts of crazy outsized

• 9:01Scott Galloway?

  risks and are engaging in it. And they have access to this type of risk-taking in their pocket. As someone who is younger, have you done any research or any thoughts about how this, it strikes me this gambling economy seems to be especially prevalent among your generation. Your thoughts?

• 9:20Kyla Scanlon?

  Yeah, John Cohen wrote a great book that came out a few months ago about the rise of sports gambling. And so he did a lot of on-the-ground reporting with young people. Like, one of his primary interviews was an early twenties person named Kyle, who was living in Colorado, who had had his life destroyed by gambling. And so you do see a lot of people go towards that path. Like, one of the theories that I've been testing is that there's this idea is that young people have like zero risk tolerance or like all the risk tolerance. So you see, you know, Gen Z becoming the tool belt generation, going back to the trees. I think that's primarily to reduce risk. Like, when I talk to people who are going down that path, they're like, I don't think a college degree is going to pay off, so I'm just going to take this staple job

• 10:04Kyla Scanlon?

  at the factory. And then you see other young people who are going into meme coins, they're going into sports betting. They're, you know, betting it all on companies that are doing AI things. And so it has become increasingly prevalent, I think, because we, people are just grasping for straws to try and climb the economic ladder.

• 10:25Scott Galloway?

  You outlined three likely outcomes for this casino economy. The more probable one being that we see smaller crises unfolding as low growth persists through a series of disparate shocks. Do you see any kind of initial signs of the trouble that you're monitoring in this casino economy?

• 10:43Kyla Scanlon?

  I mean, lots of people are starting to talk about private credit. I think that's a bit concerning, like we're seeing some of the auto lenders start to go bankrupt. First Brands, Try Color, J P Morgan lost, I think, a hundred and seventy five million dollars on that company going under. Primaland. So you're starting to see some ruptures begin to happen in the private market where all of this risk was taken on and there was like zero regulation, which is always a recipe for disaster. So I think we're starting to see that begin to show up. And then I think we're starting to see young people begin to suffer from the consequences

• 11:26Kyla Scanlon?

  of the unfettered access to gambling, which you talk a lot about as well. And so I think we are starting to see some of these pain pockets begin to pop up for sure.

• 11:38Scott Galloway?

  What do you think of these predictions markets? Like, what do you, one is businesses and two is a reflection on our kind of society and economy?

• 11:46Kyla Scanlon?

  I mean, I think it is kind of like gamble on everything. It's, I don't know, like, I think the idea makes sense. And like, if you're trying to find consensus for information, I think that makes sense and like, sure. But I think what they incentivize is people finding some sort of way to gamble on everything. Like, one of the comments underneath my New York Times article on Twitter was like, how can I bet on how many views this article is gonna get? And so I think everybody is just seeing the world through the lens of gambling, which is not a very stable or well-structured society. And when I say everybody, obviously, like, I'm, you know, being dramatic. It's not everybody.

• 12:28Kyla Scanlon?

  But it is a lot of people, because again, it seems like the one way to make money is to bet on everything and that's concerning.

• 12:37Scott Galloway?

  Do you think some of it, and again, this is, this really is a question looking for illumination and potentially pushback, but I wonder if some of it is kind of our role models for a younger generation, where I think about the president is always going to be a role model, whether we want him to be or not, and the wealthiest person in the world in a capitalist society. In both of these individuals, it feels like they're sort of conflating or creating an image where you can easily conflate masculinity and leadership with being incredibly aggressive and incredibly risk aggressive, like doing things that have never been done before, saying things that have never been done before, shooting a rocket into space that scissors

• 13:22Scott Galloway?

  can capture. I mean, there's a positive side to this risk aggression, but it feels as if our leaders are no longer measured in any way, that they're taking these outsized risks and that sort of, is that potentially what's going on here, that our role models are just more risk aggressive on, from, you know, any angle?

• 13:40Kyla Scanlon?

  I think a little bit, and like, not all risk is bad. Like, in order to grow an economy, you know, you have to be able to catch a spaceship inside of scissors. You have to take on some element of risk. But I think like the risk that is being encouraged now, like when you look at the president, just objectively, like the guy bankrupted because he knows, like he took on a ton of risk and, you know, that wasn't always successful, but he had like some form of a safety net to catch him, whereas a lot of people are taking on risk now are doing it because they have no safety net. And so I think people are looking at the billionaires, maybe soon to be trillioners, and saying like, okay, they took these big leaps, like they figured it out, like hopefully I can do that too.

• 14:24Kyla Scanlon?

  But the path is not always that clear and it's not that stable and those people had a lot of help along the way. But I do think it encourages behavior that might not be conducive to cohesiveness. Like when we think about Twitter and, you know, even just like quote unquote, taking a risk on saying something polarizing on Twitter, like a lot of people are monetizing their accounts that way. So yeah, that sort of gambling mindset applies to both money and to communication.

• 14:55Scott Galloway?

  We now have 10 companies responsible or make up 40% of the S and P. The S and P is 50% of global market cap. So 10 companies are now arguably 20% of the world's value, at least in the public markets. That to me feels like a concentration of risk that typically we didn't like to have or tolerate. What are your thoughts on the concentration of of value across a small number of companies?

• 15:19Kyla Scanlon?

  Yeah, I don't think it's great because also it's, you know, 40% of GDP growth is coming from the AI companies and the 20% of companies that you referenced are like primarily dabbling in AI. It's the big tech companies and, you know, they're 75% of S and P 500 earnings growth. And so like our whole economy is becoming this like really big risky bet on AI. But when you think about, you know, the jobs that we're adding, they're primarily in healthcare and social services, at least the last time that we got data from the government. And so like these companies are taking on more and more value. They're growing bigger and bigger, but they're maybe not adding to the economy in a way that we would expect outside of building data centers. Like data centers don't add that many jobs. You don't need that many people building them. Like what the US needs is jobs.

• 16:04Kyla Scanlon?

  And so I worry about that. Like, I think I do worry about the concentration risk, especially when we think about 401Ks and people who are going to try to retire soon, like all of the onus of their retirement is on them. And therefore it's on the S and P 500 continuing to succeed. And then I also worry about these companies really just sucking the life out of the market and then not not contributing to the economy in a way of a growing labor market.

• 16:29Scott Galloway?

  Yeah, I pair a comment you made that just sort of summarized the economy right now. You said, America is essentially a giant bet on AI. And I thought that was just such a kind of cogent distillation of what's going on right now.

• 16:45Scott Galloway?

  My sense of history is the stuff you're expecting to go right oftentimes doesn't and the stuff you're expecting to go wrong oftentimes doesn't. Like upticks in the market are from areas we weren't expecting and crises, you know, nine 11 and COVID, very few people were predicting those things. If you were, if someone said to you at your conference, Kyla, do you think it's a good time or a bad time to invest in this AI economy? What are your thoughts?

• 17:13Kyla Scanlon?

  I mean, what I've been telling people and obviously like it's not investment advice, but I still think it's important to have some exposure to the companies, not all exposure. Like that's kind of one of the issues with younger investors is like 70% of their portfolio will be in tech companies, which is like, you know, decent rule of thumb, but with the concentration risk, I think it's, it's pretty dangerous. And so a lot of investment advisors will advise you to diversify across gold, across utility companies, across like things that are a little bit more stable, you know, across international companies too. So not having your whole, whole portfolio just exposed domestic.

• 17:55Kyla Scanlon?

  So I, I think that's like one way to navigate the uncertainty and, you know, the potential bubble popping that we might have. So that's, that's been a good rule of thumb.

• 18:05Scott Galloway?

  What does Kyla Scanlon do with, with her money? How do you invest? What's your approach to investing?

• 18:11Kyla Scanlon?

  Yeah, Kyla Scanlon does what I just said. So yeah, that's what I do.

• 18:15Scott Galloway?

  Index funds or?

• 18:16Kyla Scanlon?

  Yeah, yeah, primarily. And then I, you know, I've been taking advantage of high yield savings accounts as well. Um, you know, the Fed is probably going to cut rates, so that's going to get less and less exciting. But when rates were high, that was pretty cool. But yeah, no, I'm, I'm pretty exposed across ETFs. I'm a very boring, very plain vanilla investor. I, you know, put aside 20 bucks a month toward the S and P and then I've been investing more and more in gold. But the reason run up in gold, that's been a bit like, oh, this feels a little, little dangerous too, which is crazy that like people are looking at gold as something that's too risky to invest in. I have some exposure to crypto as well.

• 18:58Kyla Scanlon?

  So I just try to like have a, a diversification as one of the only free lunches in investing, as they say. So I try to take advantage of that.

• 19:07Scott Galloway?

  And do you buy the thesis that the surge in gold and the increase in crypto over the last couple of years is essentially the debasement of the dollar and trust in America?

• 19:18Kyla Scanlon?

  I mean, that's, you know, that's an interesting topic that a lot of people have gone back and forth on. I mean, crypto is a levered NASDAQ, so I don't think you can really say that about crypto. It's been unfortunate to watch that industry lose itself. And I used to work in crypto and thought it could be something really cool. And I just think it's become also a part of the gambling economy. But with regards to gold, like, I think the interesting thing there is that China is really trying to become the place where people park their gold reserves to kind of, you know, navigate around the US dollar, saying like, hey, everybody, like, invest in gold and then invest that gold with us. And I think that might work in some regards because I do think people might be trying to find

• 20:00Kyla Scanlon?

  some alternative to the dollar. I think that's going to take a long time if that does eventually happen. But I think there's some element of truth in people trying to not have as much exposure to the US.

• 20:13Scott Galloway?

  You said a couple of things I want you to unpack there, that crypto is levered NASDAQ. What do you mean by that? And then secondly, you said you were in crypto, but you think the industry has lost itself. Say more about that.

• 20:24Kyla Scanlon?

  Yeah, I mean, I'm not the first person to call crypto levered NASDAQ. It's essentially like the way that tech stocks move, crypto will move like three times bigger. So if tech has a big sell off, then crypto will have a gigantic sell off. If tech moves up, crypto will move up. It's interesting because, you know, now JP Morgan is allowing institutional clients to use Bitcoin and Ethereum as collateral. So there is like that institutional backing to crypto, but that also means it tends to trade a bit like tech stocks because institutions have sort of flattened it and like flattened the moves. So I just think it's like not any different than

• 21:04Kyla Scanlon?

  tech, which is probably a very unpopular opinion. But to the point that I used to work in crypto, yeah, I used to work. With several crypto companies and thought it was really great. A lot of my very early writing was about crypto and kind of about what it would look like to have the future of finance, like what decentralized finance could look like, you know, what it could look like to sort of build this online world that was had its own form of money. And yeah, I mean, when you even think about Bitcoin, like the original proposal was a payments to pay like a person to person payment system. And I don't think it really can be that just because it's so speculative. So it's not necessarily a bad thing. It's just, I don't know if crypto knows what it, what it is. It's definitely not a currency. It's just an asset.

• 21:49Scott Galloway?

  And you feel as if it's sort of lost itself, or it sounds like your tone was you soured a little bit on the industry. Why?

• 21:55Kyla Scanlon?

  This is just one of the things that happens when people get really, really, really rich is they forget what they're doing something for. And I think a lot of people in crypto, you know, saw tremendous wealth. And I think you can kind of lose the plot when all of that money comes pouring in and you might forget the mission of what you're originally doing. I think Ethereum has kept to the plot pretty closely. Like Vitalik, one of the founders, seems pretty focused on like what he wants that thing to be. But that's not, you know, that's not the whole industry.

• 22:29Scott Galloway?

  We'll be right back after a quick break.

• 22:36Scott Galloway?

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• 23:39Scott Galloway?

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• 24:50Scott Galloway?

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• 25:59Scott Galloway?

  What are you seeing when you look at economic data? What do you think are the biggest stories unfolding that get the least amount of coverage relative to the impact they might have? What are we not talking about that we should be talking about? Everyone's, I feel like we're on to kind of the AI bubble. There's a lot of, there's a lot of media around that. This reminds me of 1997, and that is everyone had consensus, we were in an internet bubble, and the Nasdaq went up another 100%. It's when everyone decides we're in a new model and it's different this time, and maybe all rules, you know, all bets or the rules have been broken. That's when you need to watch out. So I feel like the AI quote unquote bubble has been covered. What are you seeing in your data and your research that you don't think is getting enough coverage?

• 26:43Kyla Scanlon?

  So you think we're in 1997 right now relative to the AI bubble?

• 26:47Scott Galloway?

  The good news is when you're my age, you have some historical perspective. The bad news is you have historical perspective, and that is you want to make your life easier with pattern recognition. And the reality is most of these patterns are, you know, the history does repeat itself. Well, what is it? It doesn't, it, you know, it rhymes, it doesn't repeat. I see a lot of similarities. These circular deals really worry me. You know, Nvidia investing $100 billion in a company with the agreement they're going to buy their chips. And that is accretive in the short run, but setting up kind of a house of cards in terms of, you know, capital structure, capital formation. I see euphoria, but at the same time, it's different this time in the sense that these companies, their earnings growth hasn't matched their PE expansion, but it's, it's pretty strong.

• 27:32Scott Galloway?

  These are real companies with real cash flows. But what I was referring to is that the economists called the dot bomb implosion perfectly. They said how it would start, why it would happen, the damage it would do. Problem is they called it in 1997. And from that point, if you'd stayed in internet stocks, you would have made a ton of money. Now granted, you would have given it all back, but I don't. You know, what I have come to believe is that when everyone, when all economists agree on something, you should go the other way. And it feels like all economists, at least right now, are saying AI is, you know, somewhat overvalued, which lends me to believe that, okay, it's probably going to run further.

• 28:14Scott Galloway?

  I mean, every instinct in my body is saying sell all stocks right now. But typically, when I have that emotion, or a lot of people are having that emotion, and it's not the thing to do. But so, yeah, I see echoes of it, but the reality is I don't trust, I don't trust my gut on this stuff a lot because I try to be emotionless into what you're doing, and that is just be diversified and not try to time the market and not try and convince yourself you're smarter than the market. But are there things out there that, you know, it's, it's, it's the iceberg you don't see that takes the ship down? Are there things you see, you see that we're not talking about?

• 28:48Kyla Scanlon?

  I mean, I, yeah, I agree with you that everybody's talking about the AI bubble and how bad it could be if it all explodes because it is such a big part of the economy. You know, forty percent of GDP growth is, is no joke. But I think like, a lot of people are talking about it, but the government shutdown, I feel like has not, like, we're kind of like, oh, no, it's still shut down. And we're, it's like about to be the second, I think it is the second longest shutdown ever. And, you know, a bunch of people, forty million people are about to lose access to food stamps. And I just think like, there's such a clear distinction, and I'm curious if it was the same way in the 1990s. There's such a clear distinction and

• 29:33Kyla Scanlon?

  divergence between the stock market and the economy. So like with the government shutdown, like that's severely affecting the economy, but you have this huge run up in stocks. And I think a lot of people are kind of covering that idea, but when we talk about the AI bubble, I don't think we necessarily talk about that idea. It's more like, oh, no, Nvidia gave OpenAI a hundred billion, billion, billion dollars. So was it like that in the 1990s too, like that? Did you feel that divergence between the two?

• 30:00Scott Galloway?

  So really thoughtful. You know, in the 90s, I was building internet companies and not that thoughtful, or I didn't have much situational awareness beyond the e-commerce company I was running, trying to raise money for and trying to hire people. I didn't think a lot about big picture societal issues. Also, we just didn't have the concentration of wealth. We didn't have, it felt like a more gentle time. It was George Bush who looked soft and cuddly back then, although progressives thought he was evil incarnate. Now we look back and think, God, he was so adorable and so nice. And there wasn't nearly the polarization. And also, we didn't have, we were blessed with a lack of social media showing.

• 30:45Scott Galloway?

  I mean, social media has figured out that I'm a progressive and that every video they show me of a masked person from ICE separating a woman from her husband knows I'm going to be so fucking enraged that I'm not going to be able to look away from the phone. And so I don't know how much, you know, there's an interesting statement, another statement I love is that we're not that divided, but we have the most powerful companies in the world trying to divide us. So it is different. I don't envy people of your generation whose media consumption is so anxiety ridden, is so trying to tune you up, to enrage you such that you'll be engaged. One, where does someone like you get the majority of your information? What is your media diet?

• 31:29Scott Galloway?

  And have you found, and this is more of a question around, you know, the psychological impact, but if you found that it takes a toll on you and people your age, I, I'm, and I don't, I can't figure out if it's I'm just getting older and angry or more depressed, but I literally have to have self-imposed blackouts from the media now because I find that algorithms are purposely trying to take me down really, really ugly rabbit holes. Anyways, your media diet and thoughts on the impact on your generation?

• 31:55Kyla Scanlon?

  Yeah, I mean, my media diet is I, I read a lot of the, you know, major news publications. So New York Times, Wall Street Journal, Bloomberg. I also love like the other magazines, like N plus one, Phenomenal World. So I read a lot, but I also use Twitter a lot and it's been, or X. So, and that's been like the biggest bummer in the world is that used to be such a place for economists and finance people to really get together and like talk about ideas. Like it used to be, you know, this, this place to really connect and even back in 2021. And, and now it's, it's not, it's like so polarized and the algorithm is being tweaked to totally fry everybody.

• 32:40Kyla Scanlon?

  And so I definitely see that with a lot of young people. And I have an account that I've tuned to be quite conservative. So this is like a, like a burner account that I don't post or anything, but I just view. That account to make sure I'm not missing anything because my feed is also, you know, pretty attuned to what what Democrats are up to or the center left or center right. And yeah, this account is is very MAGA oriented and it's wild, like the amount of rage bait that that account gets served. And it's it's pretty concerning. And so I also have to make sure that I don't fall down a rabbit hole because one thing that's really tough about

• 33:25Kyla Scanlon?

  these big companies is that they weaponize empathy, right? And so a lot of people are pretty good hearted and they just want to help and they just want to make sure everybody's doing okay. And that's when you can get in trouble is because you watch these videos or you read these things, like trying to understand, trying to figure out how you can help. And that's really when it becomes dangerous. Because you, you know, oh, I think a lot of people care so much that they they go a little bit crazy. And so I have to really watch myself with that kind of stuff. Yeah, as I think it sounds like you do, too.

• 33:58Scott Galloway?

  You mentioned the the fissure, the growing disparity between kind of the Wall Street economy and the real economy. We've said on the show that the Dow Jones and the Nasdaq have been just incredibly damaging metrics because they give people the illusion that things are okay, oftentimes when they're not. And as long as the Nasdaq goes up, or my thesis is as long as the Nasdaq keeps going up, the president can send troops into American cities and get away with it. Curious to get your thoughts on these metrics and also what metrics you look at that you think are better indicators of the health of quote unquote, the real economy?

• 34:34Kyla Scanlon?

  Yeah, I wrote this piece in my newsletter a few weeks ago called AI is the stock market and the stock market is the government. It's sort of that idea where the government, yeah, the government has a lot of latitude. If the stock market continues to go up, like if the market was selling off right now, he would not be allowed to send troops onto the street. I think Congress would have a lot more pressure to reopen the government. And because so because the stock market is so disconnected from any sense of reality, we're actually in, I think, deeper trouble. Then we should be and it's it's uh yeah, it's like wild to watch this stuff where it's like, oh, AI earnings are gonna continue to go up like stock market's gonna go up forever.

• 35:18Kyla Scanlon?

  It's just so bizarre to me and even you know, we got this inflation data the other day, even though the government shut down, they brought back a small team of the BLS because we needed to readjust uh social security payments according to inflation. And the stock market rallied on the idea that inflation was somewhat going down, even though it's still three percent year over year, that the Federal Reserve is gonna cut rates. It was like, woo-hoo, everything's going well, even though like people can't find jobs. Inflation is still very high and the Fed is cutting into that. Um, and so, yeah, I I think like the metric said, I try to pay attention to it's a lot of anecdotes right now, um, because we don't have have data and I I know that's always that's a bit dangerous.

• 36:00Kyla Scanlon?

  But I, you know, I post videos about the economy almost every day on social media and a lot of people message me and tell me what they're feeling and what they're paying attention to and what they're worried about. And so I kind of absorb all of that and and try to get a better sense. But then in terms of like real data, the Chicago Fed has some real time labor market indicators that are pretty pretty useful. It pulls from public and and private data. And so I found that to be helpful. There isn't an inflation metric that I've found to be super uh good outside of the numbers that we get from from BLS. Um, so I'm still trying to piece that together. And uh, yeah, and then I think another interesting thing is when we think about the stock market,

• 36:42Kyla Scanlon?

  it's important to look at the number of companies that are booming that have no revenue. So a lot of the boom in the stock market right now is being led by these companies that don't have a lot of profits, you know, they have essentially no revenue. And I think that's a good indicator for the actual underlying health of the stock market and the fact that it's not being led by fundamentals. And it tells a different story than like the Dow Jones going up. It's like, what, why is the Dow Jones going up? It's because these companies that aren't making money are going up because people are gambling on them.

• 37:14Scott Galloway?

  The administration trying to interfere with the Fed, what feels like socialism or government intervention or attempted influence on private markets, picking companies they invest in or wanting a golden share in US deal. Tariffs, which is when I was in graduate school and I was a graduate student instructor in macro and microeconomics, it was just a case study and look at how stupid we were at one point in history with tariffs. All right, I'm surprised, I'm curious if you're surprised. Are you surprised the economy is as strong or not as bad? I would have thought the economy would not be holding up the way it is right now. What are your thoughts?

• 37:50Kyla Scanlon?

  You thought it would have imploded because of the tariffs or just because of everything else going on?

• 37:55Scott Galloway?

  All of it. Fear around, fear around lack of independence of the Fed, tariffs, a move towards a cross between socialism and cronyism. I just think all of these things, to me, the market would have had a stronger gag reflex. And the numbers, to be fair, a lot of the underlying numbers are concerning, but a lot of them are stronger than I think people were expecting. Right? The inflation number is not good, but it's not terrible. You know, there's the AI boom. I keep reading about this quote unquote reindustrialization of America. I'm not entirely sure what that means, but I keep reading about it. I don't know how much of it is just propaganda.

• 38:36Scott Galloway?

  But are you, what are your current thoughts on the state of the economy versus your expectations? And if you're comfortable talking about what you think might unfold in, say, 26?

• 38:47Kyla Scanlon?

  Yeah, I mean, to the point of the reindustrialization of the economy, Iowa, a state that is very reliant on manufacturing is like essentially in a recession. So there's a really interesting map, and I cannot remember who made the map, but it showed the number of US states that were in some type of economic contraction, and it was over half of them, I believe. And so I think when we like zoom in on these individual cases, like states that were really reliant on manufacturing actually working out.

• 39:19Kyla Scanlon?

  You see a lot of, a lot of that not happening. Like, one of the things that Trump did promise was that he would bring manufacturing back to the US. And the way that he's doing that is through tariffs, um, which is not that intuitive, right? Ideally, you would use a carrot instead of a stick method in order to, to bring people back. And it takes a long time to rebuild manufacturing. And so you do see these, these pockets of pain for these, um, places, uh, that overwhelmingly did vote for Trump. And the longer the government stays shut down, like a lot of these red states that voted for Trump, they're heavily reliant on the social safety net.

• 40:00Kyla Scanlon?

  Like, they're reliant on food stamps, they're reliant on Medicaid, the thing that is being, the reason the government is shut down, right? Healthcare, um, and yeah, I think it's gonna get more and more painful, uh, because people need those things. People need an economy that works outside of AI, um, like they need jobs that are more than just data center. And the argument there is that, like, the economy has always gone through some turmoil with technology. Uh, like nails used to be zero point five percent of GDP, like hammer and nails, uh, back in the eighteen hundreds. And so, like, there's always some shift, but I think, like, this, this, I'm curious what you think about this.

• 40:42Kyla Scanlon?

  Like, the combination that we have right now of political turmoil and technological turmoil is, like, quite pronounced. And it seems the way that politics are unfolding, just objectively, as you said, is, like, pretty destructive. Just net on net, like, it, it's harmful. And I think the market is ignoring that because of the AI stuff. It's like, okay, who cares if, like, the economy implodes outside of AI as long as AI succeeds? Because it'll take over everything. And so I think that's the divergence, but like, this transitional time, if it does end up working, is really painful. But like, how do you sort of see that combination of politics and technology?

• 41:25Kyla Scanlon?

  Like, do you think they're feeding off of each other in a harmful way or protecting the economy?

• 41:30Scott Galloway?

  Well, I would bifurcate them. I, I don't think you can get in the way of innovation, and that is, AI is going to replace a lot of jobs. I actually think automation and GLP-1 are perhaps even more impactful technologies than.

• 41:42Scott Galloway?

  You know, I just wrote a post saying I think GLP one is more impactful on the real economy than GPT five. I just think people reducing their, the fat economy or the diabetes industrial complex is just enormous right now. And if people, you know, if GLP one were to permeate the households, like I think it's possible. I think that's going to have a bigger impact on people's lives and quote what we, we were talking about before the real economy. I think my, I don't know where you are, but I'm with Trump. I just don't get these policies. I'm trying to figure out, it's as if, if I wanted to elegantly really screw the economy for the mid and the long term and reduce our prosperity inch

• 42:25Scott Galloway?

  by inch every day. I think this is a genius playbook. Tariffs, cronyism, lack of respect for rule of law. I, um, we're going to place tariffs on people. Young people feel bad because they can't buy a home. So what are we going to do? We're going to tariff drywall, gypsum from Mexico and lumber from Canada and make building houses more expensive. I just don't, it's as if they look at every pain point and say, how can we rub salt in the wound of this pain? So I don't, I have a difficult time understanding any of the rational or logic behind this, or that there isn't quite frankly, more sort of small revolutions in our society. What I would, you said something there that I thought was really powerful

• 43:08Scott Galloway?

  and I want to pose on, and that is America needs an economy outside of AI. I think that's really powerful. And what you were saying before about data centers not having that, not needing that many people to build them. They need even less people to operate them. They don't even need to turn the lights on during the day. There's just no one, no one's needed there. The story I'd love to get your feedback on that I think is the really big story right now is Amazon, I don't know if you saw this, Amazon just announced they're laying off 30,000 corporate jobs. And I gotta think when they announce it, they're gonna, there was this seminal earnings quarter that I can't get over or call about three quarters ago. It was Meta saying they'd increase their revenues 23% while decreasing.

• 43:52Scott Galloway?

  Headcount by 20%. I don't think any company's ever done that because generally the way it works is if you're growing, you tell your head of HR to hire more people. And I've said that AI is corporate Ozempic and that it's turned the switch off amongst CEOs, that they need to eat more or hire more to grow. And I think Amazon is about to have one of those quarters where announces great earnings or great revenue growth with a huge destruction or decrease in costs, i.e. people being laid off. And their stock is going to surge. Their stock and their earnings are going to surge. We're about to see this arbitrage of human capital

• 44:32Scott Galloway?

  arbted into greater earnings and a surge in some of these information intensive companies. I think it's coming at Goldman, JP Morgan, all of those companies. Anyways, your thoughts on Amazon and this kind of labor destruction or the announcement they're laying off 30,000 people at corporate?

• 44:49Kyla Scanlon?

  UPS is doing the same thing. Like I think they announced that they were going to cut 20,000 jobs and I don't know if it's at the corporate level, but they actually ended up cutting 34,000 instead. So even more. Yeah. And then Target, I think, is cutting 1,000 jobs. GM is cutting a couple hundred jobs. So I think we are going to see more and more of that. And to the point of the investment banks, like all of the AI companies are launching their AI Excel, like Claude Anthropic's model just announced that. I think perplexity has something like that, too. I believe that one of the AI labs has employed former investment bankers to actually train

• 45:30Kyla Scanlon?

  an investment banking version of AI. And so I do think we are going to see the expedited attempt to replace humans. Yeah. And at the corporate level, too, like that is one of the interesting things about AI as a technology is that normally technology replaces. What we might call blue collar work, but this is going after white collar work. It'll be interesting to see if it works. I mean, Klarna and Duolingo, they were some of the first companies to let people go and be like, we're going to replace everybody with AI. But then they had to hire people back because it doesn't always work that well. That's the other funny thing about AI is it needs quite a bit of nudging still. It's still new technology.

• 46:15Kyla Scanlon?

  But um, so yeah, I think that's going to be very strange. And with that portion of the workforce being displaced, it'll be interesting to see how they respond politically. You know, what they start asking for, what they want. Right now, we have like zero regulation on AI. And so I think if this, if all the big companies start cutting their corporate workforce, we could sort of see a lot more groups begin to coalesce around the idea that there has to be some sort of human AI partnership, rather than companies just gutting people and giving jobs to technology.

• 46:55Scott Galloway?

  We'll be right back.

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• 49:00Scott Galloway?

  We're back with more from Tyler Scanlon. We have our own problems. I mean, the stock market, the Nasdaq and the Dow Jones are doing really well, touching new highs, but it definitely feels like there's a lot of political division. People are more anxious. You know, it doesn't feel like the US is a role model for the rest of the world, but I struggle to point to another economy that's doing better. Do you spend any time thinking about China or the European economy? Who is doing well? Or also, just a follow-up, I'd just love to know any thoughts you have about the China, the state of the Chinese economy right now.

• 49:37Kyla Scanlon?

  China is really interesting. Like China, you've, have you heard of Breakneck, Dan Wang's new book?

• 49:45Scott Galloway?

  Uh, yes, I have.

• 49:46Kyla Scanlon?

  Yeah, I mean, he kind of captures it pretty well, like you, uh, China has like an engineer economy. The US has a lawyer economy. A lot of people have said that about other economies in the past, like the US has always been this this sort of lawyerly economy relative to everybody else being an engineer economy. And I think that's pretty true, is that it feels like the US is having all of this in fighting. And then China's over there like developing bullet trains, or I believe um, they just found like a cure for baldness or something like that. And so it seems like they're able to like really capture technology and use it in a way that the US isn't, but like they have their own problems. Like they are also staring down a demographic crisis, right?

• 50:31Kyla Scanlon?

  And they also have the life flat problem where a lot of their young people don't necessarily want to work. Um, and so I think that's an economy that's really complicated and it works really well because it's a command economy. Um, the US is is not, and therefore it tends to flounder. I I think what's disappointing with the US right now is that we just have a bunch of money going into like the dumbest things possible, and that's pretty frustrating relative to China. Like China also just announced that the people who post information about certain um, sectors on tech, on social media have to have like degrees in the subjects that they're talking about on social media, or else they get fined.

• 51:13Kyla Scanlon?

  And I think that could be really useful um, in terms of the polarization and the division that we see in the States is people actually being educated on the topics that they talk about. Uh, and so, yeah, I mean, I think Europe is like a different case. They've just been struggling for a really long time to find their footing, to grow. Um, they also are suffering underneath the demographic crisis. Like, I think that's the thing that everybody's gonna have to grapple with over the next couple of years. Is we have a rapidly aging population. The economy is going to have to change to accommodate that, all of these economies. And economies rely on an influx of young people to continue to grow, as you've talked about. And I just, I I don't know how we're gonna fix that. Like, that's the number one thing.

• 51:58Kyla Scanlon?

  That's the number one thing I worry about is is demographics, and both China and the US are are suffering from that.

• 52:05Scott Galloway?

  Specifically, the ratio of young to old is headed in the wrong direction. Do you think we can solve that with immigration?

• 52:11Kyla Scanlon?

  That's one way to solve it. It's immigration or having more babies. Having more babies is hard to incentivize. South Korea tried to pay people $1,000 and that didn't really work either. So immigration, high skilled immigration is one way. The Economic Innovation Group has a good paper on high skilled immigration and like how much it does add to the economy. Like it is a boom, you know, paying taxes, adding to the local community. But yeah, the politics gets in the way with that.

• 52:41Scott Galloway?

  So I want to pivot and talk a little bit about kind of Scanlon Inc. And that is, I think, a lot of, we have a lot of young people listen to the pod and I think they probably have seen the ascent of your career and your relevance in the last 24 months. And I think that is really cool. Like, how did she do that? So, any, any tips for what platforms have been, you know, breakthrough for you? What's worked? What hasn't? If someone thinks I would like to be the Kyla Scanlon of art or of fashion or of, you know, of engineering in Europe, whatever it is. I want to be a domain expert. I want to have relevance. I want to be invited to conferences in Florida.

• 53:27Scott Galloway?

  Like, what, what has worked and what hasn't worked is you've developed this, you're essentially an entrepreneur. I mean, it's, my understanding is it's just, just you, or maybe, maybe not. That's just you.

• 53:39Kyla Scanlon?

  No, it's just me. It's just me.

• 53:41Scott Galloway?

  And you put out, that's extraordinary. The amount of content and the relevance you have as a sole proprietor is really extraordinary. Anyways, what advice would you have given yourself, your younger self, three or five years ago in terms of where you would have invested more and where you would have invested less?

• 53:59Kyla Scanlon?

  So I guess like very quickly, the way I got started was it was during the pandemic. So I had moved from Kentucky, where I'm from, to Los Angeles to work at Capital Group. So buy side firm, you know, I had majored in econ, finance and data analytics and just really loved teaching and like wanted to get a PhD, but my professor told me to go corporate first. And I was like, that sounds great. Six months into that job, the pandemic hit and I was all alone in this 350 square foot apartment in Los Angeles, had no friends. And so I started making videos and the videos were weird. You know, they were skits where I was pretending to be Jerome Powell, which I don't know if anybody has ever done besides me.

• 54:40Kyla Scanlon?

  And I just, I just really wanted people to understand the economy. And so I think like that is always my biggest piece of advice is like, do it in the way that feels very authentic to you. And so for me, it was like these really bizarre, strange skits where people were like, oh, I didn't know, like you could have fun and talk about economics at the same time, which is what I was trying to do. And I just had a big, I still have a big passion for educating about the economy. I think it's a total disservice that we do to the public, sending them out into the world and not teaching them things. And so I started my company officially four years ago now.

• 55:22Kyla Scanlon?

  So I've been doing this for what feels like a long time, but really isn't even that long. And I just think it was consistency. Like I've posted almost every day since and I've written, you know, hundreds and hundreds of articles, I wrote a whole book. So consistency, staying authentic to what you truly care about and messaging it in a way that feels relevant to you. And yeah, not letting the fear of being perceived get to you. Like I'm an introvert. It's funny, like my friends from when I was growing up or I think it's so weird that I have this like public lifestyle because I do prefer to research. And so I think that's the biggest thing is like, there is a whole big world out there

• 56:07Kyla Scanlon?

  and there's people who want to see what you want to message. You just have to do it in a way that feels good for you.

• 56:15Scott Galloway?

  But if you, last question, if you look at all of the Distribution channels and platforms, whether it's YouTube or TikTok or Substack or your newsletter or books, I stack rank the things that have worked the best for you. If you were to say to someone, all right, you have a limited amount of human capital. This is what, so we started doing 15 years ago, me and my business partner, my old firm, L2, started doing these videos called winners and losers on YouTube. And it was just breakthrough for us. No one knew who I was, no one who knew who L2 was. People thought they were funny. Sounds a little bit like what you did with mimicking Jerome Powell. So YouTube was seminal for us 10 or 15 years ago.

• 56:58Scott Galloway?

  What has been, what platform or medium has really worked for you?

• 57:03Kyla Scanlon?

  Well, what's disappointing is it was Twitter because that's where all the finance and econ people went to go hang out. It's not that anymore. Don't post, I mean, still post on Twitter, but be careful. It's really become bad. Instagram reels, like the discoverability on there. I know, you know, we kind of talk down on Mark Zuckerberg sometimes, but the platform is still pretty good for discoverability.

• 57:25Scott Galloway?

  Yeah.

• 57:26Kyla Scanlon?

  YouTube is still, yeah, it's still, I mean, you have to, like, you gotta, that's the thing.

• 57:31Scott Galloway?

  You gotta give it to them.

• 57:31Kyla Scanlon?

  Eat from the, it's the worst. It's the worst. But it's a tool. It's a tool. At the end of the day, social media is a tool. If you can interrupt somebody's scroll with like really good information, as you do about like markets, economy, culture, like that is worth it to go and use these platforms for what they provide. But Instagram reels, a lot of people have Substacks now. I had like one of the first Substacks, I think, and that was really cool, like a decentralized newsletter. YouTube is still really powerful. Podcasts are really powerful. Like, that's, I think, a really good tool. But yeah, TikTok, maybe not so much right now, but it's still all the main platforms and kind of being in many places at once. So I think they're all equal in that regard, is you want

• 58:15Kyla Scanlon?

  to have as many touchstones as you can with people because they're all on different platforms.

• 58:20Scott Galloway?

  But it's It is a cumulative effect, isn't it?

• 58:23Kyla Scanlon?

  Yeah.

• 58:23Scott Galloway?

  Sort of a flywheel.

• 58:25Kyla Scanlon?

  Yeah, it is. Social media captures us all that way, right?

• 58:29Scott Galloway?

  That's scary. Kyla Scanlon is an economic commentator, educator, and founder of Bread, a financial education platform reaching millions through storytelling and analysis. She's also the bestselling author of In This Economy: How Money and Markets Really Work. So, Kyla, I think you are an inspiration. And one of the things I tell people is we were one of the... I found you on TikTok, I think. And I remember forwarding, I think this was like, two years ago, I remember forwarding the TikTok to our producer saying, "We have to have this woman on. She's just such a unique voice." And I love, one of the things I do like about these mediums is that raw talent does break through. You

• 59:11Scott Galloway?

  didn't have to go to CNBC or be a junior reporter at the Wall Street Journal for 15 years and finally get your shot and then get guest appearances on CNBC and then some, you know, at some point, like 45 or 50, finally get your own platform. I really do think you're a case study in one of the more positive things around social media. And I'm so enjoying watching you have a, you know, your career ascend. I think it's, I think it's just fantastic. And it's got to give a lot of young people a lot of confidence to kind of bust out on their own. Anyways, keep doing what you're doing and very much appreciate your time today.

• 59:46Kyla Scanlon?

  Thank you so much.

• 1:00:09Scott Galloway?

  Odds of Happiness. Who controls the algorithms or do they control you? When I first got on social media, probably 15 years ago, you post something and you see how many likes it gets. And it's really rewarding when you post something or a piece of content or a viewpoint that resonates. I still get very excited when I see... You know, I put out a stupid meme or a statement and it gets 10 or 15,000 likes. It still feels really good. And also, it feels bad when I get negative comments. And slowly but surely, you start adapting and shaping your narrative and even your own thinking to an algorithm designed by other people. Now, you think, well, it's okay to want to please the crowd.

• 1:00:53Scott Galloway?

  Shaming is a very powerful concept. And that is, for the majority of our time on this planet as a species, if we were expunged or expelled from the tribe, you would die. We're, you know, nomads and we need each other. There's a tribe of 100 people. 20 people do the hunting, 20 do the gathering, 20 take care of the kids, 30 build housing and 10 are the village elders that help make better decisions. And everybody, or almost everybody, gets to live a lot longer than they would if they were on their own. So being expunged, expunged is the wrong word, being expelled or cast out from into the wilderness meant almost certain death. So that type of shame is really powerful and it hurts.

• 1:01:36Scott Galloway?

  The problem is that the people deciding these algorithms and shaping the likes and shaping your views and your narrative do not have your best interests at heart. They're not trying to promote a discourse. They're not trying to help you get more educated. They're not trying to help improve your self-esteem. They're trying to make more money. And unfortunately, what the algorithms have discovered is that enrage and conflict create engagement, more Nissan ads and more money. So what happens is you put out something that's cute with puppies. The algorithms love that. It makes people feel good. It keeps them glued to their phones, lot of likes. You put out something controversial, maybe even something aggressive,

• 1:02:19Scott Galloway?

  and it makes the other side look bad or makes somebody look bad. The algorithms really like that and they will elevate your content so more people get it, more people see it, and there's more likes, which creates a feedback loop where you think, well, the more aggressive, the more pointed, the more terse, the more puncturing I get, the more dope I feel, the more reward I get. And slowly but surely, the narrative that you start to develop is one of being more terse, more angry, more polarized, more puncturing, less grace.

• 1:02:54Scott Galloway?

  And then the narrative, if you will, becomes a function of the algorithm and the algorithm owns you. And you no longer dictate, you no longer own the technology, the technology owns you. And I have a victim of this. I, there are certain issues I feel really strongly about, and I hesitate to say things because I know I'm going to get a lot of negative comments. And sometimes these comments are from bots that have been weaponized by people who don't share my beliefs. Okay, fine. Or I'm inclined to jump on a bandwagon and start saying what I know my followers will like as a progressive. And the problem is when we all start barking up the same tree, we all get stupid. So where I've landed is the following. I go to my role models.

• 1:03:37Scott Galloway?

  I'm a huge, I have a small list of people that I really admire and I try to model them.

• 1:03:43Scott Galloway?

  A couple of examples. Margaret Thatcher and Muhammad Ali. And the thing I take from them is that the reason why they're my role models, the reason why I think they'll be remembered in a hundred years was they were not afraid to put forward a viewpoint and behave and acquit themselves at the moment in ways and with words and with viewpoints that were wildly unpopular. Wildly unpopular. But they did their homework and they believed them and they were the, they were their truth selves. So the question I would ask is in the recommendation I would make and the script I'm trying to follow is I don't want the algorithms to own me.

• 1:04:26Scott Galloway?

  If you just have positive feedback in your comments, if you're just getting, if you're just stating, if you're just putting shit out there that everyone agrees with, then okay. You're not taking any chances, you're not being a leader. I, I always say to myself, if I don't have people pushing back on me, it means I'm not saying anything. If everybody agrees with me, it means I'm doing something that's funny about dogs or I'm stating the obvious. And that doesn't mean the comments don't affect me, but I realize that if I say something and it gets a lot of negative feedback, okay, learn from it, reflect on it. But it doesn't necessarily mean you're wrong. I hope that when I look back on the content that I have put out there, that people say, sure, a lot of it was wrong, but he was in the,

• 1:05:10Scott Galloway?

  his heart was in the right place and he was intellectually honest and he was unafraid. And that's the question I would put to you. Does the algorithm own you? Or are you unafraid?

• 1:05:27Scott Galloway?

  This episode was produced by Jennifer Sanchez. Our assistant producer is Laura Janer. Drew Burrows is our technical director. Thank you for listening to the Prop G Pod and Prop G Media.

• 1:05:42Speaker 05

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