AI’s New Trillion Dollar Mission: Delete Middle Management

Scott Galloway and Ed Elson discuss the growing belief in Silicon Valley that AI won’t just replace workers, but managers too. Then, they break down the proposed pied-à-terre tax in NYC and why they believe taxing luxury second homes makes sense. Finally, they unpack why alcohol stocks are struggling while GLP-1 drugs are booming, and what that says about the future of American consumer behavior. Get your tickets to the Prof G Markets tour Subscribe to the Prof G Markets Youtube Channel Subscribe to the Prof G Markets newsletter Order "Notes on Being a Man," out now Note: We may earn revenue from some of the links we provide. Follow the podcast across socials @profgmarkets Follow Scott on Instagram Follow Ed on Instagram, X and Substack Send us your questions or comments by emailing [email protected] 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.

• 0:01Speaker 00

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest, or rush the field the fastest. Winner gets an ultra. Because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 0:31Speaker 01

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web. Like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:57Speaker 02

  Hogging seats on a crowded train, not saying excuse me, watching videos on your phone with no headphones in. Sometimes it feels like we don't know how to act anymore. What we have been seeing increasingly is people breaking rules. Why should I play by the rules if nobody else is going to do that for me? This week on Explain It To Me: How To Mind Your Manners. New episodes Sundays, wherever you get your podcasts.

• 1:26Scott Galloway?

  Today's number, $42 million. That's how much the Met Gala raised for the Costume Institute last week. A new record. Ed, this is a true story, as you know. I was invited to the Met Gala and declined, but I was working on my costume and it came down to three finalists. The first was, I was gonna go in my underpants as a premature ejaculator and just say, I came in my underwear. Or two...

• 1:53Scott Galloway?

  Two.

• 1:57Scott Galloway?

  I forget what the second one was. Fuck.

• 2:09Scott Galloway?

  Oh, God, Claire. Help me out.

• 2:10Ed Elson?

  What I don't understand, I don't understand why you don't pick one, like, you should pick one joke and commit.

• 2:15Scott Galloway?

  Okay, Mr. Fucking Easter Parade, Life of the Party, What a Funny Guy, said no one ever, Ed Elson. Yeah, yeah, Ed. You might be tall, you might be handsome, you might be inordinarily rich because you lucked out at a young age. But no, you're not known as that, that hooten, hollerin' Ed Elson. Yeah, no, I'm sorry, Ed.

• 2:37Ed Elson?

  I never claimed that.

• 2:37Scott Galloway?

  I own the humor part of this. Who won most comical in the ninth grade, Ed? Was it Ed Elson? No, I don't think so. Who won Steve Martin in high school? That's right, Steve Martin.

• 2:47Ed Elson?

  I have to give you some news. I, my senior superlative in high school was class clown. Gotta drop it. I'm not, I'm not the hooter, hooter and hollerer.

• 2:55Scott Galloway?

  Are you serious?

• 2:56Ed Elson?

  Yeah, I'm serious.

• 2:58Scott Galloway?

  I'm literally speechless. In your senior class, you were class clown? What happened?

• 3:03Ed Elson?

  What happened to me? I know exactly. What happened? You, you, you ground, you ground me down. Something happened.

• 3:10Scott Galloway?

  I mean, okay, for me, it's divorce, bankruptcy, loss of my mother. The joy has been driven from my soul. What is your excuse?

• 3:19Ed Elson?

  Yeah, no, I don't have an excuse.

• 3:20Scott Galloway?

  You were really most comical your senior year in high school?

• 3:24Ed Elson?

  Yeah, class clown. I don't, I don't know if it means most comical, but that's what I got.

• 3:27Scott Galloway?

  Wow.

• 3:28Ed Elson?

  How was your, how was your journey trip?

• 3:30Scott Galloway?

  It's amazing. I go to, every year I go to Hamburg. I speak at Online Marketing Rockstars. It couldn't be nicer. People are great. Again, Sea Above Beer and Sausage.

• 3:42Scott Galloway?

  People are fun. They're so literal. You have to show ID to get into your hotel. And I got picked up in some, all these crazy German cars and people are friendly and. Beer and did I mention the beer? Oh God, I just love it there. And I go running around the lake, wherever it is in Hamburg, they have this lake and I thought I was such a fucking baller. Running seven miles and then someone reminded me it's a little lake and it's three miles. I thought I was running seven miles in record time. So that's the only downside.

• 4:10Ed Elson?

  Three miles is still pretty good. I hate running. It is so boring.

• 4:14Scott Galloway?

  There is a high you get from running though.

• 4:16Ed Elson?

  Yeah, I know. I need to, you clearly need to just keep on doing it and then achieve that high and then you're good. I haven't, I, I've never experienced it. I try to like it, uh, and I, I just can't do it.

• 4:26Scott Galloway?

  How tall are you, Ed?

• 4:27Ed Elson?

  Six, three.

• 4:28Scott Galloway?

  You're six, three and how much do you weigh?

• 4:29Ed Elson?

  One eighty-five.

• 4:30Scott Galloway?

  Almost exactly the same height and weight.

• 4:36Ed Elson?

  That's good. That's good. The dog's in shape, so I'm, I'm happy to hear that.

• 4:40Scott Galloway?

  Yeah. And what do you do? How, how often do you, you work out every morning?

• 4:43Ed Elson?

  I try to.

• 4:44Scott Galloway?

  What is your program?

• 4:45Ed Elson?

  Weights, uh, and then try to run once a week.

• 4:49Scott Galloway?

  That's funny because you're not that muscular.

• 4:52Ed Elson?

  I have the same problem as you.

• 4:53Scott Galloway?

  When I see you with your shirt off, it's kind of a little, little pasty, a little soft. You kind of look like the Princeton version of that alien from Close Encounters of the Third Kind.

• 5:04Scott Galloway?

  Most comical in high school.

• 5:08Scott Galloway?

  That was good. Should we get to the news? I can't do any better than that.

• 5:10Ed Elson?

  Let's do it. That's pretty good. We'll start, by the way, I just note that we are three weeks out from the Prof G Markets Tour, which is kicking off with a sold out show in San Francisco on May 27th. But we have tickets still available in LA, Miami, Chicago, and we are finishing things off in New York City with special guest, Anthony Scaramucci, the Mooch, the man, the myth, the legend. So if you want to come see him, Anthony Scott, and see me, go visit profgmarketstour.com to get your tickets now. I personally can't wait. More guests to come, but the Mooch, I mean, no better guest for New York. That is, that is ideal.

• 5:49Scott Galloway?

  Yeah. So we're, we're working on a really great guest in Los Angeles that rhymes with. But I don't want to tease it until it's confirmed.

• 6:00Scott Galloway?

  And also, by the time this show airs, New York will be sold out. I think in New York only had, we have like a 1,200 seat auditorium there. I think there were like 40 tickets left.

• 6:09Scott Galloway?

  So folks, we will sell out. So please buy your tickets now. And it's really shaping up nicely. We got some really good, some good and controversial guests. I'm super excited.

• 6:20Ed Elson?

  It's gonna be very fun. Let's get into our stories. We've got a lot to talk about.

• 6:25Speaker 05

  Now is the time to fly. I hope you have plenty of the well with all.

• 6:32Ed Elson?

  The conversation around AI and jobs is evolving. It's no longer just about AI replacing individual workers. More companies are starting to suggest that it could eliminate layers of management as well. Coinbase CEO Brian Armstrong announced plans to cut roughly 14% of staff last week, citing both market volatility and the speed at which AI is reshaping the business. PayPal made a similar move, saying it plans to reduce its workforce by 20% over the next two to three years because of AI. And perhaps the clearest expression of this new thinking came from Jack Dorsey, who said, quote, "Most companies using AI today are giving everyone a co-pilot,

• 7:11Ed Elson?

  which makes the existing structure work slightly better without changing it. We're after something different, a company built as an intelligence with no need for a permanent middle management layer." So Scott, there's kind of a lot to this story here. Obviously, we've got the layoffs. Coinbase laying off 14% of the staff, that's 700 employees. PayPal saying they're gonna lay off a fifth. We've had other announcements of layoffs. Freshworks laid off 11% of the staff. Block, which is Jack Dorsey's company, they laid off 40% of the staff. That was 4,000 employees. They did that before we saw these layoffs. Now, there are questions over why are these layoffs actually happening? Is it AI washing, as we've discussed?

• 7:54Ed Elson?

  Is it actually the AI? Are they actually enabling their AI? But I think what is interesting is that we are now seeing a new thesis in the AI economy, which is that AI isn't just going to replace workers, but it's going to replace managers. That is what Brian Armstrong said in his letter, which we can get into to employees. He wants to cut out middle management and that is exactly what Dorsey, Jack Dorsey has described too. Let's just listen to a short clip of Jack Dorsey explaining this and then let's get your reactions.

• 8:25Speaker 06

  One measurement of of how far along we are would be the depth from me to any other individual in the company. And I would say our max depth right now is probably five.

• 8:38Ed Elson?

  Okay.

• 8:39Speaker 06

  Folks between me and anyone in the company.

• 8:43Speaker 06

  I would want to get that down to two to three this year. And in the most ideal case, you know, there, there is no layer. Everyone in the company reports to me.

• 8:54Ed Elson?

  That is the vision with AI, no layers, no middle management. Everything just goes directly to the CEO assisted and enabled by AI. Scott, what do you make of this trend? Do you think it's going to happen?

• 9:06Scott Galloway?

  Well, keep in mind, Jack Dorsey is the person that put out the following tweet. Bitcoin will save humanity.

• 9:14Scott Galloway?

  That's an actual tweet and he believes it, he believed it.

• 9:18Scott Galloway?

  Look, we always have these fever dreams of flattening the organization. And AI will flatten organizations is, in my view, executive speak for. We think we can fire the people who remember why this place works. Everyone on a regular basis romanticizes deleting middle management. Until they realize middle management was mostly absorbing the chaos from their fucking incompetent leadership. The only way an organization scales is if you have reporting relationships and metrics and cultural norms that are enforced by people with some maturity and seasoning. And I hate to tie this, folks, this is management.

• 10:03Scott Galloway?

  As a company grows and there's more and more layers, is it a healthy thing to take out people? And in the 1980s, this started in the 1980s with a book called Reengineering. And basically these guys wrote a book saying, America, because of its monopoly power and manufacturing had grown just fat and happy and never went through the culling of the organization. And what they did was basically every Fortune 500 company.

• 10:27Scott Galloway?

  Laid off anyone with a VP in their title and they found out that they really didn't miss them and they juiced their earnings. My father basically got re-engineered out of work by the time he was 53 and kind of never recovered. And that created additional strain on our relationship and he never really found the confidence to apologize for abandoning me. But anyways. Most comical in high school, dealing with the pain, Ed. Dealing with the pain. I couldn't cry, so I made others laugh. But anyways. Exactly. There's always a fever dream of flattening the organization. Now, there's something to the notion that everyone does their work. So let me just use prof T.

• 11:10Scott Galloway?

  I do work, you do work, even the person who's considered, who manages the company, Catherine Dillon, she does a lot of actual work and it makes her a better manager. I'm all for the player-coach. But people who are growing their careers, especially young people, need mentorship, they need reviews, they need feedback. People value compensation. Economic compensation is great. When I was at Morgan Stanley, I went in for my review once a year and it was a number. They didn't, they, no feedback. Not this is where you're good, this is where you're bad, this is where you need to improve. We're giving you 60% of your salary bonus. Let's go get, let's go get tranks. That was the feedback. And I find that thoughtful feedback, and I've gotten better, that's such like, got older, when something, someone does something especially strong or where I think they need

• 11:55Scott Galloway?

  to improve, I go, man, move to the file. And then in the review, I, we talk about it. Young people, not even young people, everyone really appreciates feedback. And the idea that when we review you and Claire and bring you in and just have the AI review you and then decide your bonus, what horseshit. I mean, the funniest thing about this is this is billionaires describing this as empowerment while simultaneously installing surveillance software and demanding 24 by 7 output from the three remaining employees. A lot of companies going through this, my prediction, are about to discover that institutional

• 12:38Scott Galloway?

  memory was not inefficiency, it was the fucking company.

• 12:44Scott Galloway?

  So the connective tissue oftentimes is management. Does that mean there aren't cases of where it becomes fat, inefficient, and the management becomes to actually add negative value? Yes, in my opinion, the greatest example of this, hands down, is academia. What you have in academia is tenured faculty become unproductive about the time they get tenure and you can't fire them. Universities actually have to put millions of dollars aside in an escrow account because they acknowledge this person's about to like become very unproductive. The problem is because we have been able to really effectively sequester supply or artificially constrain supply, we've been able to raise tuition faster than inflation and universities have become so fat.

• 13:29Scott Galloway?

  MIT has 16 people working at MIT for everyone who actually teaches. But in the private sector, I mean, this is, there's a bit of a healthy cycle around going through and trying to flatten the organization, make sure everyone's doing their job, there's more transparency, there's less bureaucracy, there's more speed or reducing time to market. I get it. But somehow the notion that AI, you're going to work for an AI and then it's going to reduce the management or leadership or guidance or mentoring or giving people their compensation, I just, or solving problems in HR.

• 14:09Scott Galloway?

  So anyways, my point is, this is, this is yet again, another example of these guys who overhired, who are looking for a way to juice their valuation and thinking big thoughts about AI. Can AI supplement management? I'm sure it can, but I actually think this is one place where AI is not, is absolutely not going to live up to the hype.

• 14:32Ed Elson?

  So that's a really interesting point, and I agree. And, you know, we should recognize that the stock market hit another record high last week. And the reason that it hit another record high is because of AI. It's because of these chip stocks, which are absolutely ripping right now. AMD, Samsung, Intel, Micron, Seagate, SanDisk, which as we've discussed is up 4,000% in

• 14:53Ed Elson?

  The past year and you know, you think about the supply chain going downstream. Why do we need these chips and why do we need this memory infrastructure? We need it for the data centers. Why do we need the data centers to power the AI? Why do we need the AI? And it appears that increasingly among large tech companies, large, generally speaking, white collar organizations, we're seeing that there is a goal in mind, which is for AI to replace management, to replace all middle management, to get rid of all of the grunt work that you have to do in terms of managing people and trim all of that fat. And I just want to go back to Brian Armstrong's letter because he really articulated his vision, I think, quite well.

• 15:35Ed Elson?

  And I think that it is indicative of where a lot of these CEOs are trying to take their businesses. So in terms of why he did it, what he's trying to achieve, he said, quote, "We are not just reducing headcount and cutting costs, we're fundamentally changing how we operate, rebuilding Coinbase as an intelligence with humans around the edge aligning it." So in other words, the whole thing is AI and the humans are just there to kind of like shepherd the AI into the right direction. He says, "We want fewer layers, faster decisions, no pure managers, AI native pods. We will be concentrating around AI native talent who can manage fleets of agents to drive outsized impact.

• 16:14Ed Elson?

  We will also have one person teams with engineers, designers and product managers all in one role." And this idea of the one person team is also very popular right now. I've heard Dari Amadee talk about it. Sam Altman has talked about it. Sam Altman is very obsessed with the idea of a one person billion dollar company. Can one person operate a billion dollar startup? Is that possible? And the idea is that you'll have one person managing the agents who will do everything for you. The AI is going to completely transform the business. You're saying that's probably not going to happen.

• 16:51Ed Elson?

  And I think I agree with you. The idea of you walk into your performance review, which is a big part of what it means to be in an organization and be at a company, and an AI shows up and evaluates you on all these different metrics, and you disagree with the AI for various reasons, and you try to prompt it, and either it vociferously agrees with you because it's just a sycophantic technology, or it doesn't make any sense, or it has the wrong data, et cetera. That, to me, is just never going to happen. But it seems to be increasingly the basis on which this entire stock market is kind of rallying behind. And I'm just not sure it's going to work. I can get behind the idea of AI doing menial tasks. But the idea of managing people, the idea that an AI would be the core of a business

• 17:35Ed Elson?

  and the humans are around it, which is becoming very popular, I'm just not sure about it. And I wonder if it does mean that we're seeing too much hype here.

• 17:46Scott Galloway?

  My last year before I sold the company at L2, I took someone into a conference room and I said, "It's obvious to me you have a substantive problem. What's going on?" And within 10 minutes, I found out this person had tried to take their life twice in the last three months. You're supposed to go to fucking Claude for that? I mean, and AI takes you to the average of everything that's been out there. You think Claude's going to come up with breakthrough products that are just so fucking crazy? They end up being crazy genius? We're mammals. And the other thing this indicates is that these guys are so nihilist and so void of any real fucking emotion. I get the notion of wanting to be more profitable with fewer people. I'm in a services company.

• 18:30Scott Galloway?

  We're in a services company. The expenses go home in the elevator every night or go home to Brooklyn Park or leave their basement, whatever it is you guys do. I have no idea. I heard we have an office in Brooklyn. I'm never coming. Anyways, I heard there's a cardboard cutout of me there, which I mean, makes me happy.

• 18:46Ed Elson?

  We go to the cutout for our reviews.

• 18:49Scott Galloway?

  Anyways, I get it. We're about to launch our eighth podcast, and I've challenged the team, we're not going to have any incremental hires. Use AI and technology to figure out how we all become more productive and launch another podcast. Fine, I get it. But the notion, the fever dream of no one managing you in one-person teams.

• 19:08Scott Galloway?

  When I was in Hamburg, as is always the case when I'm alone, I got upgraded to this beautiful room with a deck and it was a spectacular sunset. I'm overlooking the lake and it's as if it didn't happen because no one is with me to share it. It just doesn't matter. There's nothing. And the idea that you're going to find purpose and motivation and work without sharing it with a team? I mean, you're, you're building something, you're building a business within a business with Profitey Markets and it's fun to build it with Claire. And if you were just in your apartment in Brooklyn, building a nice little business called Profitey Markets and you didn't have fans and you weren't going on a live tour

• 19:53Scott Galloway?

  and I wasn't giving you a hard time and you weren't high fiving Claire virtually and in person and getting together at all hands and at some point reviewing people and giving them their bonuses. It's like you've literally sucked the soul and the humanity around what it means to work. And that is, all right, yeah, we do it for economic prosperity. Sure, we do it to create shareholder value. But the whole, I think, the biggest part of the shooting match of work is you have the opportunity to build something with someone else. It's, it all comes back to a very basic thing. I think the most rewarding thing in life is relationships

• 20:35Scott Galloway?

  and the things that fuse relationships are building things together. You have experiences together, you achieve things together. Maybe you raise kids that aren't horrible together. You build a business. The most rewarding businesses I've had, hands down, I have a core set of like technically co-founders and we build something together. So the idea, their fever dream of like, I want, they all want a singularity where one of them controls everything and gets 100% of all revenue and all profits by distilling all economic value to no human but them. They're the one. And there is a certain nihilism in it all. And that is,

• 21:19Scott Galloway?

  There is something to be said of, and there's a balance here. I've, in my companies, I'm doing some virtue signaling right now. I've always said there should be two or three people. I've always had small companies, right? They started zero. Once we have someone in HR or CFO, I either step, step down from the CEO role, become the chairman, because I don't, I don't have those skills to scale a company and I don't want to deal with that stuff. But until then, I've always said, we should have two or three people that are one or two bad decisions away from living in their car. They're not, you know, they're, they have bad judgment. They're, they do stupid shit all the time. They're not what I'd call, there's no way they're leaving us for Google. Let me put it that way. A little bit down on their luck, maybe. And guess what? The business can be a great

• 22:04Scott Galloway?

  means of a little bit of social good. And also, the notion, this is basically, the notion that part of an organization, if you think of stakeholders, and I didn't get this. I always thought my goal was to pay people less than market and figure out other tricks of the trade to get them to stay and retain them. And then what you realize as you get older is that what is more rewarding is to build a profitable company and slightly overpay people. And if there's some fat in the organization, and if there's a few people who, quite frankly, are, you know, not going to get a job anywhere else, but work, you know, work hard or good people, and maybe they're not, you know, amazing. Okay, that's

• 22:46Scott Galloway?

  okay, too. And in some countries, the objective of a lot of the owners is to increase employment. Now, you have to balance that with making sure the organization can survive and has profitability. But this is, again, this singular Messiah complex that is nothing, there's only one stakeholder and it's shareholders. And I can figure out technology to replace people and we can all work singularly. And then eventually the AI will take out those singular teams and replace them. And then there will just be one. It'll be Jack Dorsey and Elon Musk, who each own 49% of the world and do a lot of ketamine. And if they're

• 23:27Scott Galloway?

  good enough, they will provide UBI for all of us such that we don't rise up and kill them. I, I, I'm not a fan, Ed. I'm not a fan of this whole line of thinking.

• 23:40Scott Galloway?

  I think it's bullshit and I think it's unhealthy and I think it's nihilistic.

• 23:43Ed Elson?

  And it's creepy the extent to which they are glorifying this thing. They are very excited about this notion of the one person company. It's like the dream if they can do that. And to your point, it's like, I don't think the one person, one billion dollar company is going to happen. And I don't think that's not going to happen because it can't happen. I think it won't happen because people don't want it to happen. Like, you don't want to create this billion dollar company and then you didn't share it with anyone. You're going to celebrate your success with your AI agents and Claude and ChatGPT. Like, it's just a depressing, it goes back to that crazy quote that we saw from Sam Altman where he said that AI consumes less energy than than human beings and children. It's like, you've got the entire system wrong. You don't understand what the point

• 24:27Ed Elson?

  of any of this is. And to go back to your point about like, we're heading towards a place where Elon Musk owns half of world GDP. I mean, I would just point out, John D Rockefeller was the richest American in history. Everyone agrees that he's supposed to be the guy, the richest guy ever. His, he owned about, his net worth was about one and a half percent of US GDP. If the SpaceX IPO goes to plan, Elon is going to be worth closer to three and a half percent of GDP. So he'll be more than double as rich as the richest American ever. So Elon is now the richest American in history and by a huge, huge margin. And it is getting to a point where it is quite scary and

• 25:09Ed Elson?

  it is downstream of this glorification of how much value can we accrete into the hands of a smaller and smaller set of people and they're literally glorifying, let's do it into one person's hands. One person's going to create all of this. It's just strange. It's a strange thing to be so excited about. We'll be right back after the break. And by the way, we are heading out on tour at the end of the month. So if you want to get a ticket to a show near you, head to profiteymarkets.com.

• 25:50Speaker 00

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest, or rush the field the fastest. Winner gets an Ultra. Because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser-Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 26:20Speaker 01

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 26:46Speaker 07

  So like any good millennial, I have a love-hate relationship with Gen Z. It's the phenomenon rattling millennials. They just look at you.

• 26:54Speaker 08

  They want something bigger themselves. Lifestyle is a priority. Motivation is being inspired.

• 27:00Speaker 07

  But regardless of how you feel about Gen Z, it's undeniable that they're changing national politics.

• 27:06Speaker 09

  Generation Z is increasingly showing less loyalty to traditional political parties. Many now more likely to identify as independent.

• 27:14Speaker 07

  So what is going on with the kids?

• 27:17Speaker 10

  I think the biggest misconception about Gen Z's politics right now is that all of a sudden, they're all socialist. That is just not the case.

• 27:22Speaker 07

  Yeah, yeah.

• 27:22Speaker 10

  They are embracing candidates who are offering new, bold ideas in the absence of those ideas from establishment Democrats.

• 27:30Speaker 07

  This week on America Actually, Gen Z researcher Rachel Jamfaza joins us to separate Gen Z fact versus fiction.

• 27:38Speaker 10

  It's not rocket science. And this is, you know, I keep saying, like, young voters aren't that complicated. After all, it's pretty simple.

• 27:43Speaker 07

  Catch us every Saturday on YouTube or wherever you get your podcasts.

• 27:57Ed Elson?

  We're back with Profty Markets. The wealth tax debate is escalating and it is increasingly becoming a mainstream political issue. Billionaire investor and Citadel CEO Ken Griffin is now publicly feuding with New York City Mayor Zoran Mamdani over a proposed pied-à-terre tax. Meanwhile, Governor Hochul recently unveiled a $260 billion budget deal that includes a new tax on multimillion-dollar second homes in New York City. And in California, a proposed wealth tax on billionaires has officially qualified for the November ballot after supporters gathered more than 1.5 million signatures. That was well above the 875,000 signatures that they needed to qualify for the ballot.

• 28:40Ed Elson?

  So now voters in California will weigh in on whether or not states should tax wealth. So Scott, we have been talking about this for a while. I think we've been having quite nuanced conversations on the wealth tax debate. I think our perspective is the right one, which is that you do need to figure out how to redistribute the wealth, but this probably isn't the best way to do it. There are other alternatives. But now it is becoming a mainstream political issue. It's starting to sort of dominate the cultural conversation. And then we saw this proposal from Mamdani where he wants to tax pied-à-terres, i.e.

• 29:21Ed Elson?

  second homes in New York City that are worth more than $5 million, whose owners don't live in the city full-time, which I think is actually a great idea. And then he puts out this clip that announces that, and it's a little controversial. We hear the response from Ken Griffin. Let's just listen to the clip as well as Ken Griffin's response, and then let's get your reaction.

• 29:43Speaker 11

  I'm thrilled to announce we've secured a pied-à-terre tax, the first in New York's history. This is an annual fee on luxury properties worth more than $5 million whose owners do not live full-time in the city, like for this penthouse. Which hedge fund CEO Ken Griffin bought for $238 million.

• 30:00Speaker 12

  What really upset me about the video was the fact that he put me in harms way. You know, he, he seems to have forgotten that the CEO of another American company was assassinated just blocks from where I live in New York. And to put any citizen in harms way is just inappropriate for one of our political leaders.

• 30:19Scott Galloway?

  I have a lot of thoughts on this. And by the way, if you're new to the show, just let me clue you in on the major theme of the show, and that is this is an opportunity for Scott and Ed to talk about what?

• 30:28Ed Elson?

  Money?

• 30:29Scott Galloway?

  No, Scott.

• 30:31Scott Galloway?

  Anyways.

• 30:32Ed Elson?

  I forgot. How could I forget?

• 30:34Scott Galloway?

  How could you forget? All right. So let's bring this back to me. I did the math with this tax. This tax, if it goes through, because I am a Florida resident and because I split time between London and Florida and don't spend that much time anymore in New York. But if this tax goes through, because I qualify, it's a pied-à-terre, it will cost me $100,000 a year in addition to the more, I don't have a mortgage on it, but in addition to the taxes, H-2 fees, all the current, another, an incremental $100,000 in carried costs. It's a form of a wealth tax, if you think about it, because if my place were 10 million, costs another $100,000 a year, say a cap rate or a return of six or seven percent. That means kind of overnight, technically, the place goes being worth from 10 million

• 31:19Scott Galloway?

  to eight and a half, right? So it's, that's real cabbage. Having said that, having said that, I am in favor of this tax. And that is, look, you can always talk about how a government needs to cut costs. I, I've read the articles that it takes 12 times, it costs 12 times more per mile to build a subway in New York versus Paris. I get it. I don't doubt there's fat to be cut and I, I trust they're going to try to do that. I'm not in a position, I don't have the domain expertise to start talking about the, the cuts that, that the mayor should make.

• 31:54Ed Elson?

  But we think that they should be efficient with their spending, as everyone does. I mean, the idea when we get caricatured, it's like, oh, you just want government bloat? Obviously not. Obviously, we want spending to be efficient.

• 32:04Scott Galloway?

  I'm going to assume they do a reasonable job of, of allocating capital. That may be right, it may be wrong. I don't want to have that argument right now. So I'm going to assume they do a reasonable job of, of managing the city's, the city's expenses. Okay. So let's go to the tax.

• 32:21Scott Galloway?

  It's pretty clear that if there's any group in America that is not paying their fair share and can best afford an incremental tax, that this tax would, that new taxes would be the least taxing on, that would, that would decrease their wellbeing, happiness and health the least, it is the very, very wealthy. And if you have a second home in Manhattan, not your primary residence, but your second home, the chances that you are very, very wealthy are very high. Now, they have, they have other options. They could tax corporations, which is the Democrats' favorite boogeyman, but here's the bottom line. JP Morgan has gone from 30,000 people in New York to 20,000 over the last 10 years,

• 33:05Scott Galloway?

  and gone from 10,000 to 30,000 in Texas, because at some point, corporations will leave or start, the easiest people to fire are the ones you haven't hired, and they'll start hiring more in Florida and in Texas. And by the way, folks, JP Morgan is just not the guy running M&A making $7 million a year. It's a ton of assistants, people working in the kitchen, people cleaning the place, people in low-level compliance jobs, people in mid-level administrative jobs, making 80, 100, 150, $200,000 a year, that are one of the six or seven million people that migrate into Manhattan from Gowanus or Queens or New Jersey that aren't ballers. And if JP Morgan and the biggest companies in the world, the biggest, most important companies in the world, at some point, they

• 33:47Scott Galloway?

  will leave, and quite frankly, a lot of them have already left. So I'd be very careful with corporate taxes. Well, let's, let's increase taxes in general, right? It's already 12 or 13% incremental tax if you're in New York, making over a certain amount of money. At some point, the earners, the ballers who are making a lot of money, or what feels like a lot of money, think, you know what? I'm going to piece out to Florida, and it's already happening. So what do you want? You want a tax that raises money that, quite frankly, probably doesn't drive people out of the city. And I'm only speaking for one person, but I think it's indicative of probably how most people will behave. If it costs me another $100,000 to have a second home in New York, I don't love it. I'm bummed about it. But here's the bottom line.

• 34:33Scott Galloway?

  If I can go to Jack's wife Frida and watch the freak show and all the hot men and women and the world pass me by, and then I can go out for the best food in the world and go to Equinox and walk around and see the absolute wondrous freak show that is New York, fucking A, I'm not going anywhere. It is the most amazing experiment, the best example, the pinnacle of America, the pinnacle of capitalism, the greatest collision of culture, commerce, creativity in general, aggressiveness, commerce, fashion, art, media, 100,000, don't get

• 35:15Scott Galloway?

  M'Donnie, don't get any ideas. People who own second homes there will spend a lot more than that to stay and be witness to that amazing experiment. I think, no one likes taxes. I hate this tax less than any other idea. In sum, I'm in favor of this tax.

• 35:35Ed Elson?

  It's so funny to hear the argument where people say, well, if you do that, all of them are gonna leave. And it's like, brother, they already, well, sorry, but they already left. It's their second home that we're talking about. So, but they, they're gone already, is my point.

• 35:49Scott Galloway?

  That's a great, that's a great, they left already. I love that.

• 35:52Ed Elson?

  This is the perfect, if you're figuring out ways, like, they already left. So.

• 35:56Scott Galloway?

  I left in 2010.

• 35:57Ed Elson?

  It's the perfect tax.

• 35:58Scott Galloway?

  You're exactly, I left in 2010 because I couldn't afford to live in New York. And then when I made a bunch of money, I thought I'd really like to spend more time in New York. And I bought a second home there. I bought a pied-à-terre.

• 36:07Ed Elson?

  Which increases housing prices because you have less supply. And of course, this is exactly what happens. You've got people who have left the state of New York, who have left the city, their income isn't being taxed in New York, but their house is still there, which all it does is drives up the price of housing across the city, which is exactly what we've seen. So, yeah, we should figure out a way to extract some value there. I think it's perfect. It's exactly what we should be doing.

• 36:30Scott Galloway?

  It is the least awful tax I have heard of in a while. And by the way, here in London, in Mayfair, you go by really high-end buildings, there's not a single light on in the summer because it's a lot of people from outside of the country, a lot of people from the Gulf, and they're here in the winter, and then they leave. And by the way, the local bodegas, the local stores. There's not a single light on in my building at any time. There's 12 or 14 units, I think. I never see anybody. I never see anybody. I'm in, someone else is in the elevator, 2%, and never see anybody.

• 37:11Scott Galloway?

  I would bet, I would bet 25% of the time, I'm the only person in the building and 50% of the time, there's maybe, I remember my next door neighbor is this wonderful guy, Michael, I won't say his last name, and his kid discovered the drums. And they came over and they're like, we're so sorry. He loves the drums. I'm like, you know what? It's kind of cool just to have a little bit of life and pulse in this building. I don't mind at all. Tell him to, tell him to bang on his drum all day. And anyways, this is, I, I, I actually think this is a really thoughtful, elegant text. Having said that, boy, did our mayor fuck up.

• 37:55Scott Galloway?

  The idea of a tax is that one, you discourage behavior, right? A carbon tax, but more than anything, it's to raise revenues so we can pay for our navy, our parks and food stamps. The idea is to raise money, right? To increase the treasury. When he shows up in front of Ken Griffin's condo and starts personalizing this, shitposting him, Ken Griffin's done nothing wrong. Most billionaires are really good people. Some are okay and some are bad. Most poor people are really good people. Some are okay and some are bad. The demonization of rich people and the demonization of success is how we get J.D.

• 38:37Scott Galloway?

  Vance as president, if the Democrats keep up with this bullshit. The whole point of America, one of the most attractive things about America, it's the reason why our incredible immigrants, including undocumented immigrants, risked their lives to come here, why the best and brightest scientists all come here, why the most ambitious people in the world come here, is because we celebrate success. We don't demonize it. And when he shows up in front of his house and starts shitposting him. And what is he gonna do? It's like, I've said this about the Democratic Party. If you keep saying young men don't have problems, but they are the problem. If you keep saying that white people unconsciously or consciously are racist, and you keep saying that billionaires are evil, you're gonna lose billionaires, you're gonna lose white people, and you're gonna lose young men.

• 39:22Scott Galloway?

  Hello JD Vance, number 48, or whatever number it is. Stop. This is class warfare. If someone is worth 100 million, does that mean they're only a tenth of as bad as a billionaire, but they're 100 times as bad as someone making a million dollars? This bullshit that your, your, your character and your decency is inversely correlated to your wealth is an Elizabeth Warren, Bernie Sanders, now Mumdani, dangerous bullshit that does the following. This type of, of far-left woke-ism literally has annoyed America into fascism. It results in a bunch of strongmen and weirdos who start demonizing people

• 40:06Scott Galloway?

  and saying, "We embrace success." Even if it means, and by the way, wink, wink, I love billionaires and, and show up and just give me money and I'll, I'll, I'll get in the way of all AI regulation. And what is he gonna do? If this, if this backlash, this, this justified backlash from Ken Griffin, good for fucking Ken Griffin. He's like, you know what? Fuck you, bitch. And this is similar to the bullshit non-dom here in London, where all this virtue signaling, they're trying to raise revenues, I get it. So they say, "We're gonna go after people who haven't paid their fair share." Okay, I get it theoretically. But guess what? 10,000 millionaires have left and the Treasury receipts are down.

• 40:49Scott Galloway?

  So if the objective is to raise money, then stop demonizing success and chasing tax revenues out of the city.

• 40:58Ed Elson?

  I also think we should point out that it's, it's ineffective to the mission. And this is a shame, because I actually think that Mumdani so far has been highly effective in putting forward his progressive agenda, winning that election, and then convincing the establishment and convincing institutions. That he's not off his rocker, which I don't think he is. I think he's actually got some really good ideas. I started out thinking that he was a little bit crazy and didn't understand the issues. And then eventually he sort of proved over time, actually, no, he really does understand the issues. But the trouble with this is it's ineffective to the mission of figuring out a system of redistributing the wealth such that we aren't living in this Hunger Games scenario, which we are every day getting closer and closer to.

• 41:42Ed Elson?

  And the reason it's ineffective is because how the billionaires feel about it actually matters because they can buy our elections, because we did see Citizens United and billionaire spending on political campaigns went up 160x in literally the course of a decade. So the idea that like you already have the majority of Americans on your side on this issue. We already know that a lot of people do not like billionaires. We can go through the numbers. 67% of Americans believe billionaires are creating a more unfair society. It's up 8% from last year. 55% say that billionaires make it harder to achieve the American dream, up 9% from last year. I mean, we know that the general American public wants to tax the rich.

• 42:26Ed Elson?

  They don't like rich people. They don't like billionaires. We got it. Everyone, the majority of the voting citizens are on your side on that issue. So why do you need to then go and demonize the billionaire? Basically outdox him in front of the entire city and then give him a real reason to do everything he can to make sure that this doesn't pass. And by the way, that is exactly what we're seeing in California. Where there has been, I mean, whether Gavin Newsom has actually demonized billionaires or not, that is the way they feel. And now they are contributing millions of dollars to these campaigns, Sergey Brin teaming up with Eric Schmidt. They just raised 80 million dollars in the last quarter alone to stop the California wealth tax proposal,

• 43:10Ed Elson?

  which by the way, I also don't think is the right way to do it. I think you should come up with more nuanced ideas such as a borrowing tax or such as this pied-à-terre tax, which I think is great. But the point being like, if they want to stop this stuff, they will. And because of this one video. Where he had this great idea, he had a lot of momentum. This one video is going to just completely change the sentiment on the way he's handling this. And now everyone has a reason to say, well, the billionaires have a reason to say Mamdani is out of control. We cannot deal with him. We have to put a stop to it, which otherwise could have been reasonable policy in which we could have gotten maybe rich people and poor people to get behind on both sides. But it's not going to happen now. So I 100% agree with you.

• 43:54Scott Galloway?

  Yeah. And by the way, just to be fair, or just to talk about the tax, Florida. And I think there's a couple of states that are considering a similar tax, right? I mean, we have to, we have to pay for our government. This similar taxes proposed in 2014 and didn't pass. We surfaced again in 2019, but didn't pass. Oh, Montana and Florida are also exploring similar second home tax measures. And property taxes are the largest source of income in New York City. And the thing that's good about property taxes is that if you tax an individual at some point, individuals are very mobile. When you tax housing, it raises costs and it's sort of an indirect wealth tax.

• 44:34Scott Galloway?

  But it is probably, it's a tax that typically increases revenue before it drives people out. It's been shown to be an effective means of raising revenue. The wealth tax in California is just stupid. It's a one time thing, so it really doesn't address the systemic problem of spending more than we take in. It can only be spent on certain things. It's a wealth tax, and we've said this before, in the 16 countries that have had a wealth tax, 13 have repealed it because very wealthy people are incredibly mobile when you start taxing. Anyway, that tax is not a good idea.

• 45:15Scott Galloway?

  But I do think that this tax, and also New York property taxes. So my primary is in Florida. Those, those property taxes are a lot because there's no state income. There's no state income tax, so they got, they've got to get their, they've got to pay for their schools in the fire department somewhere. So the, the real estate taxes in Florida are actually quite high. In some, if you were just an economic animal, you would make your money. In Florida and you would rent. But anyways, my point is, I think this is a good tax. The class warfare was an own goal and the wealth tax, wealth taxes generally are trying

• 45:59Scott Galloway?

  to assess people's or trying to do an audit. Real estate is actually has a pretty recent mark that you can value it on, the last transaction. Whereas trying to assess someone's wealth, I can't imagine what a boon that's going to be for tax lawyers and appraisers to claim that, oh, wait, Ken Griffin's worth, he's actually not, he's actually has negative net worth. Remember when Donald Trump, all the stuff around his taxes? You know, in the same year, he was saying his golf course was worth, you know, whatever, 200 million and then for tax purposes, no, it's worth negative 100 million. The gains here will be extraordinary. And the thing about a property tax is that you just go off the last transaction or a recent transaction of a similar property in the same building. In other words, it's enforceable.

• 46:44Scott Galloway?

  And what Mondami is doing is the same thing we have a tendency to do on the left, and that is, we have a tendency to be right, but not effective. And I would argue the right has a tendency to be wrong, but effective. They're very good at getting really bad ideas. Bad ideas through. Yeah, bad ideas through. Whereas we emotionally, they should pay their fair share. Yeah. And then we wake up and our tax receipts have gone down, but we feel good about ourselves.

• 47:13Ed Elson?

  We'll be right back. And for even more markets content, sign up for our newsletter at profgmarkets.com.

• 47:30Speaker 00

  This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends, like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior light beer, it's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.

• 48:00Speaker 01

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration blog, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus.

• 48:26Speaker 07

  AI panic is everywhere. We do not want a data center in this county.

• 48:33Speaker 13

  AI models are becoming superhuman in their ability to break in and out of computer systems. The clock damn rose, bro. I hate those things.

• 48:40Speaker 07

  But where is that panic really coming from? According to a poll from the New York Times and Sienna, less than 1% of voters listed artificial intelligence or data centers as their top priority in this year's midterms. I'm an old school person. I don't care about AI. Saying that doesn't register for you. And sometimes I wonder, do they care about AI in so-called real America? What people in my district are saying is we think the risks outweigh the benefits. This week on America Actually, I'm talking to Michigan congressional candidate Will Lawrence on why he shaped his entire campaign around confronting the AI revolution. Really, it's about control, I think, above all. Who decides?

• 49:22Speaker 07

  Because people feel like they just are not really given any say so in the whole matter. Catch us every Saturday on YouTube or wherever you get your podcasts.

• 49:36Ed Elson?

  We're back with Prof G Markets. Two very different earnings stories emerged last week, and together, they say a lot about where consumer behavior is headed. First, the alcohol industry continues to struggle. Diageo, the maker of Johnnie Walker and Smirnoff, reported a 9.4% decline in North American sales year over year. Constellation Brands, the company behind drinks like Corona and Modelo, painted a similar picture citing softer demand and withdrawing its fiscal 2028 guidance. Meanwhile, the companies behind GLP-1 drugs. Crushed their earnings. Novo Nordisk reported surging demand for its new Wegovy pill and raised its full year guidance. Eli Lilly said that revenue from Monjaro,

• 50:19Ed Elson?

  which is their GLP-1 drug, jumped 125% year over year, more than doubled to $8.7 billion. And now the CEOs of the beverage companies did not explicitly blame GLP-1s for the pain. While that is true, the correlation here is pretty clear and it's something that we have been talking about for a long time. Scott, you said as early as 2023 that alcohol would be one of the first casualties of the rise of GLP-1 drugs. Let's just play a clip of what you said.

• 50:54Scott Galloway?

  I even saw some data saying that people on Ozempic reduce their drinking by 60%. Diageo, the alcohol guys, oh my God, these stocks, in my opinion, are going to get absolutely hammered. We could see alcohol really take it on the chin.

• 51:10Ed Elson?

  I think that's exactly right. Your reactions.

• 51:13Scott Galloway?

  Among people aged 18 to 34, one in two say they drink. It used to be three in four just 20 years ago. And also, and I've said this publicly, I think the risks of social isolation are greater than the risk to a 25-year-old liver. If you have addiction in your family, if if anyone close to you is saying it's getting in the way of your other parts of your life, your ability to work well, your health, maintain relationships, or just generally speaking, you don't enjoy drinking, by all means, don't feel pressured to drink. But social isolation increases your risk of premature death by 32%. I was on Andrew Huberman's podcast a couple of weeks ago, and we went back and forth about

• 51:56Scott Galloway?

  alcohol because he's kind of, I think he's sort of credited with kind of kicking off the anti-alcohol movement or. And we had a really, I thought it was a really productive conversation, but shares of the world's top listed beer, wine and spirits makers have shed a combined 830 billion since 2022. Get this, in the last four years, these guys have lost four fifths of a trillion dollars. The Bloomberg gauge of global alcohol stocks is trading at around 15 times forward estimated earnings, less than half its 2021 high. Remember COVID? I don't know about you, every night I was doing those virtual cocktail hours with my friends. Did you, were you doing those?

• 52:34Ed Elson?

  I think that was my 21st birthday was 10 days into COVID and I got everyone together on a Zoom and we, yeah, we all got hammered on Zoom. It was fun, but pretty weird.

• 52:44Scott Galloway?

  I didn't know that about you. That explains a lot. You're a COVID kid? You graduated from college during COVID? I didn't know that.

• 52:51Ed Elson?

  Yeah, exactly. Yeah, senior year was remote.

• 52:55Scott Galloway?

  Anyways, these guys, so obviously a lot of this, and I think, I think a more, I've said this a bunch. I think a more transformative technology with a greater impact on the world is going to be GLP-1, not AI. 12% of Americans are currently taking GLP-1s for weight loss as of late 2025, up from 6% in February 2024. According to Morgan Stanley, GLP-1 patients consume up to 75% less alcohol. Other second of order effects that we talked about back then, GLP-1 users will drive an estimated

• 53:26Scott Galloway?

  4% lift in clothing volume sales this year because what is the first thing you do when you lose weight? You go get new outfits. The four largest US airlines could together save as much as $580 million per year on fuel, thanks to GLP-1s. I love that stat.

• 53:39Ed Elson?

  So funny.

• 53:40Scott Galloway?

  And even, even small weight changes matter. A 2% reduction in aircraft weight could boost earnings per share for airlines by about 4%.

• 53:48Ed Elson?

  It's so weirdly rude to overweight people, that stat. It's sort of like you're the reason that their earnings are, their margins aren't as large as they could be.

• 53:59Scott Galloway?

  I think it's going to kick off a baby boom. I can't get over how hot everyone is. Maybe it's because I'm just old and I have bad vision and I just see any young person. I'm like, Jesus, that person's hot. But I think, well, you're not old enough to know this. I can't get over how many hot people there are out there right now. And I, people can now, pretty much, if they have money, they can lose weight on demand. And also, I'm writing a book called Reckoning and Renewal about public policy. And I'm convinced that GLP-1 is the best chance we have for reducing our deficit. I think if you really look at our deficit, all roads lead to one thing. It's healthcare.

• 54:42Scott Galloway?

  And if you really look at healthcare, the only way to substantially reduce the expenditures, all roads lead to obesity, or specifically a reduction in obesity and its second order effects. So I think this technology is an absolute landmark breakthrough. At some point, those alcohol stocks will be a buy because I, I do think that, I do think at some point, I think that it'll level out. Like, for example, linear TV, by the way, Prof G is launching a channel called the Prof G Channel on Swerve TV, where it's basically internet TV, where it's, there's, there's a segment of America that likes watching live TV and is willing to endure commercials

• 55:27Scott Galloway?

  to have it for free. Every year for the last 30 years, that ratio has gone from whatever it was when HBO was introduced, it was 96% watched linear and 4% had HBO. It has, streaming has eaten into share every year. Three years ago, it leveled out, it was 50/50. It hasn't increased its share. There's still a large segment of America, about half of Americans in terms of viewing time, that don't want to pay and like watching linear TV and kind of channel surfing. I think the same thing's going to happen with alcohol. At some point, it will bottom out and these companies will be overshot to the downside. They have incredible brands.

• 56:08Scott Galloway?

  Also, in terms of the business, there's few businesses with greater margin than alcohol. So they will ride size. That certain types of alcohol will come back in. I do think there's always going to be a role for alcohol. I've said for a long time, it's my favorite drug and I've tried, have I tried most of them? Tried a lot of them. Nothing for me works better than alcohol. Anyways, I wonder when that dip is, but I think it still has some way to go. But typically, these companies bottom before their business, their stocks bottom before their business bottoms. Because it's the anticipation of, of the continuation of the slope down. But these companies have been just absolutely hammered. What are your thoughts?

• 56:52Scott Galloway?

  I'm curious, I'm curious to know your and Claire's approach to drinking and what you think of this.

• 56:58Ed Elson?

  I don't drink as much as before. And I think that's definitely a trend and we can get into that. Just to go through some of the, the earnings that we saw here. So we mentioned Diageo, spirit sales down 15%. Tequila sales declined double digits. Constellation Brands, they reported that wine and spirit sales were down 58%. So these companies are getting hammered in the alcohol department. But we are seeing an explosion in non-alcoholic sales. So AB and BEV, their non-alcoholic sales grew 27% this quarter. And that actually drove an overall growth in sales performance. So they are figuring out a way to avoid the alcohol boogeyman.

• 57:40Ed Elson?

  And that is stop selling alcohol and start selling non-alcoholic products. But I would also like to point you to what I thought was one of the greatest quotes that we saw on CNBC last week from the AB and BEV CEO, who is recognizing this trend among young people, which is that we're not so much excited about going out and getting super fucked up on alcohol. But we're more interested in these sort of healthier experiences. We're more health conscious and we'll get into that as well. And this was his pitch as to why beer is the new healthy product. Let's just play this clip. Beer naturally has protein because the barley.

• 58:19Speaker 05

  That we use is rich in protein. Okay. So when you analyze the components of beer, beer has naturally protein.

• 58:26Scott Galloway?

  I want to believe it. I believe it. I believe it. I I'm a hundred percent. That feels right as rain to me. That feels right as rain to me.

• 58:36Ed Elson?

  All right, the sales pitch works. It worked. Prof G's down with beer again because beer has protein. I love that as a as a pitch. And it does get to what these what these CEOs are recognizing, which is yes, we are moving into a healthy, healthy experience direction. Just some of this, some of these stats here. Gen Z and millennials make up thirty six percent of the US adult population, but they drive forty one percent of the annual wellness spend. And Gen Z is four times more likely to want to meet people working out than at a bar. And this gets to another clip, which I'd like to get your reactions to. This was an interview that the Wall Street Journal did with Diplo, and they were asking him about what is the future of the nightlife industry.

• 59:18Ed Elson?

  Diplo is, of course, the famous and incredible DJ who is known around the world. They asked him, what's happening to nightlife? What's happening to how young people get together? This was his response.

• 59:29Speaker 14

  I think less people go out because they experience a lot of social activities online. Even young people, they don't go to clubs as much anymore. But they will go to experiences like our run club or, you know, the sauna world is exploding. You know, people go to like other ship here in New York, the communities. And I think a lot of kids want to have those experiences more and more and less and less like want to drink.

• 59:51Scott Galloway?

  I do think there's a move back to experiences and touching grass. And people are are embracing more of a healthy lifestyle. Those look, those are all good things as long as they get out and they socialize. The thing that's missing from this analysis about young people is that.

• 1:00:10Scott Galloway?

  And I think these firms, these drinks firms are gonna have to recalibrate. Drinking is just so fucking expensive. When I go out in New York, I mean, some of these places, drinks are 24 bucks. You're a young person, say you're making a hundred grand, you take home 70, that's six grand a month. You spend, you know, maybe you have a roommate and you spend 3,000. You got, you got, you know, a thousand bucks a month, maybe of disposable income. You're gonna spend two or 300 dollars going out on alcohol? That's not even dinner. Or that's not even including dinner. I, I think that drinking has become almost like housing, almost like kind of unaffordable. At least drinking socially.

• 1:00:53Scott Galloway?

  And also, I just don't, and let me just say, I just don't think you ever, one thing, one thing I think is a bad idea. Don't ever drink alone. I don't think that's a good idea. Anyways, the missing piece here, what I hope happens, I hope they're forced to dramatically lower their prices. People don't realize how severe it is in, in, in London. My, I have a couple of friends who are super into wine. I've never been into wine or art. I just don't, I don't drink wine. But they've said, you can get amazing wine now for 70% less than you could get it three or four years ago. Like, there's a glut of wine. There are wineries supposedly in Italy and France where if you just take on the debt, you can own the winery because they just can't sell.

• 1:01:38Scott Galloway?

  There's wineries that it's costing them 30 bucks to produce a bottle of wine and they used to sell for 70. And now the retail market for it is 18, the clearing price is 18 bucks. And they just don't know what to do. These, these family wineries that have been in business for generations have just been absolutely flipped upside down.

• 1:01:56Ed Elson?

  But I think the Diplo clip gets to a potential point, which is that it's not necessarily that young people just don't wanna have fun anymore. I mean, that might be the case. And the data around that is a little bit concerning and it seems that we are just spending most of our time on our phones scrolling. But.

• 1:02:14Ed Elson?

  It could be that it's not that we're not trying to have fun. It's that we want to have fun just without alcohol, which to me means that there is a huge opportunity for, I mean, any kind of investment, any kind of industry. I mean, just some stats here. Sober curious gatherings, which is a ridiculous term, but on Eventbrite, sober curious gatherings have risen 92% on the platform. And sauna raves, these are DJ sets and dance parties that happen in saunas, are up 256% this year. Now, I'm sure that's off of a very small base because what the hell is a sauna rave? And I would add that I'm not interested in raving in a sauna myself,

• 1:02:58Ed Elson?

  but I don't know, maybe you are Scott. But still, it gets to the point that there are new experiences happening.

• 1:03:04Scott Galloway?

  I have a stroke. Raving sauna makes me want to slip and break a hip.

• 1:03:07Ed Elson?

  It's terrible, but it's happening.

• 1:03:10Scott Galloway?

  The idea of young people getting out and touching grass and doing stuff that's more affordable, more healthy. Great, I'm here for it. I think what's missed or that you haven't commented on, what I have found when I'm around young people in quote unquote, aspirational environments, they're still getting fucked up, Ed. They're just not getting fucked up on alcohol. I think the amount of mushroom chocolates, ketamine, psilocybin, MDMA, X, Molly, Tusi, whatever you want to call it. It feels to me like a lot of young people have basically said, especially among kind of the young aspirational set, have decided that alcohol is old technology, but they haven't given up on getting fucked up.

• 1:03:55Scott Galloway?

  And the thing I don't like about it is I find many of these drugs are more small, crowd isolating drugs. They're not social drugs. It's like one or two of you do ketamine. It's not.

• 1:04:09Ed Elson?

  You do ketamine and then you just blackout in the middle of the.

• 1:04:11Scott Galloway?

  And you go into a K-hole. I don't know. I don't think people are doing psilocybin and then approaching the dude across the bar and say, hey, what's your name?

• 1:04:19Ed Elson?

  Some would, some would say you are, but I think it probably depends.

• 1:04:22Scott Galloway?

  But this notion that all young people are, you know, moving towards more healthy, thoughtful.

• 1:04:30Scott Galloway?

  I think the drug use, I wish you had the data on it. I think a lot of people are, I mean, in Manhattan, I'm sure alcohol consumption is down. Have you seen how many marijuana dispensaries there are? They're everywhere. So I'd love to see the data on, you know, on alcohol consumption versus drug use. Like, what is the level of intoxication or substance consumption? How much does that actually decrease across young people? Or have they just changed? Are they just picking a different poison?

• 1:05:05Ed Elson?

  Well, I would just bring up a point that one of our research team members, Dan Shalane, made, which is, you know, there seems to be this idea that if Gen Z isn't drinking alcohol, then they must not have a substance abuse problem. His point, which I agree with, is actually, they do have a substance abuse problem, and that substance is screens. It's just screen addiction, flat out.

• 1:05:27Scott Galloway?

  It's a different addiction.

• 1:05:28Ed Elson?

  Exactly. And it's like, the reason we're not getting out and we're not socializing with people is because we are just spending most of our time on our screens, 109 days out of the calendar year, scrolling on our phones. That is our vice. That is the substance that we are addicted to and that we are abusing. And it is eating into the amount of time and the amount of money, I would add, that we would spend consuming alcohol with friends. So it's a different type of addiction, but it certainly is having negative effects, and some would argue even worse effects than previous substances.

• 1:06:03Scott Galloway?

  I'm one of those people that argues it's even worse. Because, like, 95% of people are able to integrate not only alcohol, but drugs, should they decide to use them, into their life without serious ramifications. There's this general demonization of substances, of all substances, that, oh, one trip of a drink of alcohol, or if you smoke a blunt, that's it, you're going to be homeless soon. Or, you know, it just, the vast majority of people are, and also, a big component of that, a large component of people, and an increasing component, decided they don't want to integrate it at all. They want to find joy and reward from other things. More power have at it.

• 1:06:45Scott Galloway?

  But the notion that alcohol and drugs, the data's just not there. The vast majority of people that engage in both those things were able to integrate them into their life in a fairly safe, insane way.

• 1:06:58Scott Galloway?

  What I have found, or what I'm doing, is I've gotten older. I just don't, when I started work like you, I pretty much gave up all substances because I'm like, okay, it's go time. And I realized the only thing I could control was how hard I worked. I didn't, I could not get up and be downtown at Morgan Stanley on Figaro Avenue in Los Angeles, hungover. I just didn't want to endure that type of bullshit. So I pretty much gave up substances, even mostly through, I would say from the age of like 22 to like, probably 34 until I moved back to New York and then daddy hit it hard again. Then daddy went deep in the paint. And by the way, Ed, it was so worth it. This is the best thing. Double seven, Lotus, Pangea. Oh my God, so worth it. You love that time of your life.

• 1:07:43Scott Galloway?

  Whatever fatty deposits or scars are on my liver, those are badges of honor. Badges of honor. Anyways, but as I've gotten older, I realize my liver can't process alcohol the way it used to. So I'm trying to tone it down. But now, you know, and of course I'm doing more edibles now. So I don't know, I don't know, which supposedly creates psychosis.

• 1:08:06Scott Galloway?

  Andrew Huberman told me that by my age, I would have discovered if it was going to cause psychosis. So I've been cleared by Huberman Lab to do edibles. Yeah. Oh, just so back to, back to the whole markets part of this Joey Bagadon's podcast. So Diageo in 2016 was a hundred bucks a share. Now it's 85. Okay. The S and P has had to have doubled or it should be a two or 300 bucks. It's at 85. Brown Foreman, Jack Daniel's fame, 45 bucks in 2016. It's at 27 now. Anheuser Busch, AB and Bef was 125 bucks. Now it's 80. Heineken 70. It's actually gone up. One of the steadier performers is at 90. Prenault Ricard was at 95.

• 1:08:51Scott Galloway?

  Now it's at 65 euros. I mean, this, this sector, it's hard, it would be hard to find a sector that has underperformed with such incredible brands in the drinks business. It has been a disaster over the last decade.

• 1:09:09Ed Elson?

  But beer has protein. So that's, that's the new marketing campaign.

• 1:09:13Scott Galloway?

  I am so here for it. When I went to World Cup in Qatar, I stayed at the AB Inbev Hotel and they were introduced their.

• 1:09:21Ed Elson?

  They need to not have hotels. Maybe that's what they should do. Talk about shedding acid.

• 1:09:25Scott Galloway?

  They took it over.

• 1:09:26Ed Elson?

  They took it over. Okay.

• 1:09:27Scott Galloway?

  Yeah. Who knows? I would stay there. I would, I would stay at the, the makers end.

• 1:09:36Ed Elson?

  That's good.

• 1:09:37Scott Galloway?

  But they had, they introduced their non-alcoholic beer and it actually tasted pretty good. I just didn't feel as good about myself and the rest of the world. But they, anyways, I think we've, I think we've beaten this drunk horse to death.

• 1:09:51Ed Elson?

  Yeah. Yeah. This, this drunk horse is dead. Let's take a look at the week ahead. We'll see inflation data from the consumer price and producer price indices for April. We'll also see earnings from Constellation Energy, AST Space Mobile, Alibaba, Figma and Klarna. Scott, do you have any predictions?

• 1:10:10Scott Galloway?

  My prediction is that, I don't know if you saw this ad, I thought of you, but earlier in the week, this really talented TikToker, it was so interesting, 32-year-old TikToker crowdfunded 132 million in non-binding pledges to buy Spirit Airlines.

• 1:10:30Ed Elson?

  Whoa.

• 1:10:31Scott Galloway?

  Did you see this?

• 1:10:32Ed Elson?

  No.

• 1:10:34Scott Galloway?

  His name's Peterson. What's his name? Oh shit, I can't remember. It's something Peterson, Hunter Peterson. He had a TikTok the same day, a website, one day, day, day zero, day one, a website, and then six million views and 130,000 people have pledged about a thousand bucks each of those non-binding pledges to try and buy Spirit Airlines. And when you think about. He's really compelling. He's back of the napkin math was that 20% of American adults paying the average spirit fare of $30 to $40 equals enough to buy an airline. And it's, look, it's unlikely to happen, but the idea of using AI and remote payments

• 1:11:16Scott Galloway?

  and AI agents to respond to questions and get people to sign and then transfer money and held in escrow until certain things, you know, they used to say in the blockchain with certain rules, but it's AI now, go through to execute the transaction. He wants to do to spirit what like the Green Bay Packers is mutualized, like the community owns it. I think we're going to see a company in distress that's got a big brand be crowdfunded and either brought out of bankruptcy or acquired in the next. I think it's a really interesting take or kind of combination of AI, social crowdfunding

• 1:12:00Scott Galloway?

  and meme stocks. Sort of like the Gen Z activist investor. It's really interesting. That's exactly right. And that is, you know, someone with a media platform, who knows, that maybe hosts a markets podcast says this company is undervalued, or maybe there's a social purpose here. We've set up a site here. If you're interested, here's the diligence. Here's the work we've done on it. Here's how you pledge. Here's what you sign. Here's the rules on when your cash is actually called on and pledged and transferred. Here's what you get in exchange. And this is going to happen.

• 1:12:41Scott Galloway?

  Someone is going to figure out enough prompts, enough docu-signs, enough legal SEC compliance to crowdfund the acquisition or the, or the funding for, to pull a company.

• 1:12:56Scott Galloway?

  Bring a company out of bankruptcy. It's gonna happen.

• 1:12:59Ed Elson?

  You've inspired me. I think we should take over eBay. We'll pay half cash, half stock, and then we'll turn it into a sauna raving company where people can get together and

• 1:13:08Scott Galloway?

  I like it.

• 1:13:09Ed Elson?

  experience things.

• 1:13:09Scott Galloway?

  I like it.

• 1:13:10Ed Elson?

  And we'll try to get some sort of cryptocurrency edge to it as well. Maybe we'll use blockchain to to power our sauna raving business. My prediction is a little bit of a boring one, but I think it's gonna happen. I think this Ken Griffin issue is gonna be kind of the calling card that inspires a lot of billionaires to get together and do whatever they can to stop these wealth taxes. And I think this debate is, it started out as kind of this crackpot idea that was mostly being espoused by AOC and Bernie and people kind of wrote it off. It's now becoming very much core and central to the political conversation. And I think that that moment where he outed him and kind of doxed him will be the moment

• 1:13:51Ed Elson?

  that billionaires use as their reason as to why they need to put a stop to this. And I'm not sure I'm very happy about that because I think we do need some sort of redistribution proposals, but I do think that that will be the the outcome of outing Ken Griffin in that video. All right. Good to go.

• 1:14:10Scott Galloway?

  Good to go. Good to go, my brother. I'm about to, literally, it's it's 8:44. I'm meeting someone at nine at Roof Gardens. And guess what I'm gonna do?

• 1:14:18Ed Elson?

  Drink.

• 1:14:19Scott Galloway?

  You know what, my brother? You know it. I'm gonna bring back, who owns Makers? I don't even know who owns Makers. Anyways, I'm gonna reinvigorate this industry. I'm bringing sexy back and I'm bringing makers back.

• 1:14:34Ed Elson?

  This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Shalane, Isabella Kinsel, Chris Nodinehue, and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thank you for listening to Profiteer Markets from Profiteer Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets.

• 1:15:10Ed Elson?

  You held me In kind reunion As the water

• 1:15:27Ed Elson?

  And the dark skies In love