Trump’s Economic Playbook Is Failing

Scott Galloway and Ed Elson break down the key ways consumers actually experience the economy, from groceries and gas to housing, and how those everyday touchpoints have deteriorated under this administration. They then discuss a new proposal to ban sportsbetting on prediction markets. Finally, they unpack the result of the Meta and Google social media addiction trial and consider if it could be a turning point for accountability in big tech. 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. Subscribe to No Mercy / No Malice 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.

• 0:00Speaker 00

  From the Goldman Sachs trading floor in 10 minutes or less. Investors and analysts share timely analysis on the week's market activity. The markets podcast from Goldman Sachs. Listen now.

• 0:16Speaker 01

  Are you a pet owner? Every six seconds, a pet owner in the U.S. gets hit with a vet bill over $1,000. Always an unwelcome surprise. That's where Fetch comes in. Fetch is the most complete pet insurance for dogs and cats. According to consumeradvocate.org, you get paid back up to 90% of vet bills at any vet in the U.S. and Canada with claims paid back in as little as two days. Go to fetchpet.com/save right now for your free quote. That's fetchpet.com/save.

• 0:54Speaker 02

  The world of business is constantly evolving and Comcast business keeps you in step with secure AI-backed networking in more than 100 countries, powering over 90% of the Fortune 500 and millions of small businesses. And behind it all, thousands of experts answering your call at 2 a.m. like it's 2 p.m. One partner, that's it. Powering how business gets done for companies around the globe. When you add it all up, no one does business like Comcast business. Go to Comcastbusiness.com/enterprise to learn more.

• 1:32Scott Galloway?

  Today's number 175. That's how many days OpenAI's Sora app lasted, 25 days fewer than Quibi. Ed, what did AI say after crossing the road?

• 1:43Ed Elson?

  What?

• 1:44Scott Galloway?

  I have no fucking idea, Ed. It's not that funny. Hold on. How does AI identify? How does AI present?

• 1:52Ed Elson?

  How?

• 1:53Scott Galloway?

  If then?

• 1:54Ed Elson?

  That's not bad. That's not bad.

• 2:08Scott Galloway?

  All right, bitch, you tell the joke now.

• 2:10Ed Elson?

  I do. Three days, three days a week.

• 2:12Scott Galloway?

  You do a joke? Oh, wait, that's right. I've watched the show. Those are jokes. Yeah, those are jokes. Those, I thought those were clever British Princeton twists of phrase. Indubitably.

• 2:24Ed Elson?

  My jokes are good. My jokes, and they've gotten better. But that's because I spent hours late at night trying to figure out what to say.

• 2:31Scott Galloway?

  Have you guys heard about the new AI robot that can take off all your clothes and then give you a whole new outfit?

• 2:36Ed Elson?

  No.

• 2:37Scott Galloway?

  I've seen it change people.

• 2:41Scott Galloway?

  Thought it was going dirty, but it didn't.

• 2:44Ed Elson?

  Yeah, no, it's good, clean. I think I like the if then. I think that's good. It's a good nerdy joke. It's a dad joke. It's like, kind of slightly maybe politically incorrect, but not really. It's perfect. It's exactly what we need.

• 2:57Scott Galloway?

  Well, you know, May, MLI units, their reputation for when they have sex. They just nut and bolt.

• 3:03Ed Elson?

  So that, it's interesting you mention that joke, because that is the joke that got you canceled from.

• 3:10Scott Galloway?

  They got me canceled. They got me canceled from Bloomberg Television. Tell the story, Ed. Tell the story.

• 3:17Ed Elson?

  Favorite.

• 3:18Scott Galloway?

  Oh, Clara's waving her hand.

• 3:19Ed Elson?

  Everyone's heard the story.

• 3:21Scott Galloway?

  Really? Ah, that's good.

• 3:25Ed Elson?

  Yeah, that was, I'll give the, I'll give the five second summary. That was the joke that Scott told when we were producing a show for Bloomberg. Bloomberg heard it, didn't like it, canceled the show. End of story.

• 3:36Scott Galloway?

  That's right. We are who we are. What's going on with you, Ed?

• 3:39Ed Elson?

  Um, let's see, I'm in New York. I'm, I'm doing a, a panel tonight with Chris Evans, who you may know as Captain America, which I'm pretty excited about. He has this new organization and they're gonna have me in to talk about affordability issues for young people. So I'm gonna meet Captain America tonight. I'm very excited.

• 3:58Scott Galloway?

  I'm not sure, but I think I peed next to him at the Oscar party. I'm serious. Ask him. I complimented him on his jacket. I think that was Chris Evans. Handsome guy, movie star.

• 4:08Ed Elson?

  Handsome, very tall. I mean, exactly, yeah.

• 4:10Scott Galloway?

  Yeah, so I'm, I'm, in all seriousness, I think we, we peed next to each other at the Oscar, at the party.

• 4:18Ed Elson?

  Well, that will be my opening line. You peed next to my boss.

• 4:20Scott Galloway?

  Say the guy who complimented your coat in the men's room, which is a little strange.

• 4:28Scott Galloway?

  I generally try not to initiate a lot of banter in the men's room, but say that's my colleague and my co-host.

• 4:35Ed Elson?

  I will let him know and I'll let you know how he responds.

• 4:38Scott Galloway?

  Your job is to bring this panel back to me.

• 4:42Ed Elson?

  Yeah. So how are you doing? What's going on with you?

• 4:46Scott Galloway?

  I just did a wonderful pocket. I love Dan Harris from 10% happier. He gave me therapy. He's like so comforting. He's like human Xanax. I just feel my blood pressure just comes down. He interviewed me about my book and yeah, it was a.

• 5:04Scott Galloway?

  Yeah. What else did I do? I had lunch with a, with a, someone who's doing a financing. And so I advised her that was rewarding, you know, like to, like to give back, Ed.

• 5:14Ed Elson?

  Well, we have a lot to get into here, but before we do it, I am excited to announce that starting next week, all of our Prof G Markets YouTube content will go to its own Prof G Markets YouTube channel. So if you watch on YouTube, we're spinning off from the Prof G Pod channel. We're going to have our own channel. So if you want to go subscribe to that channel, please click the link in the description. And you will get all of our episodes on that channel starting next Monday. So please do it. Very important that we really smash it coming out of the gates here. Otherwise, I don't know, Scott's going to fire me or something, something bad's going to happen to us. He's going to fire Claire.

• 5:51Scott Galloway?

  Unlikely.

• 5:54Ed Elson?

  You have any, any exciting thoughts on our new YouTube channel?

• 5:58Scott Galloway?

  I'd be honest, I didn't know we had a new YouTube channel, but I know it's going to be great.

• 6:04Ed Elson?

  Very good.

• 6:05Scott Galloway?

  Yeah, we're spinning out. So the, the whole point is, I would like to bring this back to business. You want to have diversity of revenue streams. You want to have enterprise value. You want to have multiple assets. And one of the ways of multiple assets or the ways of creating a distinction between your products. Is we we put them initially on the mothership on our RSS feed of Prof G, which gives them sort of gets them from A to call it G fast because it gets the people show up to the YouTube channel and the RSS feed, they automatically get the stuff downloaded or they get it sent to them. And then, once something has its own momentum and its own identity, we spin it out and try and create it as a distinct asset. And that's what we're doing here.

• 6:47Scott Galloway?

  The now property markets has a big enough following such that it should have its own enterprise value, its own branding, its own YouTube channel.

• 6:54Ed Elson?

  That's right. It's very exciting, really exciting stuff. Okay, well, I'm going to move us along to our show here. Today, we're discussing Trump's economic problem, prediction markets, legislation, and the results of the meta Google social media trial. So let's start with our first story.

• 7:15Scott Galloway?

  Now is the time to buy. I hope you have plenty of the wherewithal.

• 7:22Ed Elson?

  The US economy might look strong on the surface, but that strength isn't translating to how consumers actually feel. There are only so many ways people actually experience the economy, and in most of those areas, the trend is moving in the wrong direction. Just to name a few, people are struggling to buy homes. Mortgage demand fell 10% last week and refinancing dropped 15%. People are struggling to find jobs. Jerome Powell said the job creation in the private sector was, quote, "effectively zero," and just 28% of workers say now is a good time to find a quality job, down from 70% in mid 2022. And even everyday costs are rising. As we've discussed, gas prices have jumped 30% since

• 8:04Ed Elson?

  the start of the Iran war. So Scott, I think this is quite an important point here, especially when it comes to Trump and his approval ratings and the polling that we're seeing, which is, as we will get to, it's sort of tanking right now. But it seems that there are two different ways that you can kind of, there are two categories of economic data. There's the economic data that technically matters to economists and to analysts, things like

• 8:31Ed Elson?

  GDP growth, things like uh stock market growth and those both of those things are pretty good. GDP grew more than 2% last year, S and P rose around 15% last year. And these are things that the administration is really talking about. They're also talking about these investments that they're getting from other nations. It's not actually clear if that's really happening, but those are the kinds of things that the administration likes to brag about right now, the kind of macro stuff. But on the other hand, you've got this real problem, which is that all the ways in which regular Americans and voters actually experience the economy through their job, through their housing, through the price of groceries, the price of gas, et cetera. All

• 9:13Ed Elson?

  of those signals are flashing bright red and it is getting quite dark to the point where we are seeing real issues in terms of polling. It's going to have ramifications probably in the midterms, perhaps in the next election cycle too. What do you make of what's happening here in the economy, specifically the the economic touch points that consumers and voters are actually experiencing?

• 9:38Scott Galloway?

  The way I would describe it is how William Gibson described the future and that is prosperity is here, it's just not evenly distributed. And that is the top 1% now owns 32% of total US wealth. And that's roughly equal to the bottom 90% combined. So the top 1% versus the bottom 90%. And my favorite stat that I keep talking about is the Gini coefficient. When it's in zero, it means everybody has the same amount. When it's a one, it means one person owns everything. And when France was at point eight three, they started separating people from their heads and we're at point eight five. So GDP growth, yeah, it's strong. There's prosperity. We've had what is still historic gains in the stock market. I still think we're only about four or five percent off of highs, which means it's incredible. But

• 10:25Scott Galloway?

  And the top 1% since 2016 have captured 33% of the total wealth gains. And the bottom 50% have only captured 6%. So they aren't even beating inflation. And essentially, the top 1% have gained more than 100 times more wealth than the median household. And the top 0.1% gained nearly 1,000x more than the bottom 20%. And the problem is, the bottom 99.9 are reminded 210 times a day via notifications on their phone that they're not in the 0.1%. And look how amazing the life is for the 0.1%. And also, I think there's just a disparity in life now in a capitalist society.

• 11:08Scott Galloway?

  And that is, when I was a kid growing up, my dad's boss had a, you know, he had a Cadillac and we had a Gran Torino. We had a three-bedroom house, he had a five-bedroom house. But it was in the same neighborhood. We were all members of the same country club and used to golf together, went to the same schools. Now, if you're in the 0.1%, you have, you have, first, you live in a different planet. You're not subject to healthcare or healthcare debt because you can afford it and you have a private concierge that maybe comes to your house. You don't have, you have your own security. You probably have a doorman and live in an area that is overpoliced or that has security

• 11:53Scott Galloway?

  cameras everywhere. You're not subject to the fears around teachers not getting paid enough and the eroding quality of our public education system because your kids are in private school. There really is a substate of America that is the most prosperous country, offering the most unbelievable services in history. And essentially, the bottom 99, I would even describe, the bottom 99% are nutrition for the 1%. So the top 10 US billionaires gained $700 billion in a single year last year.

• 12:29Scott Galloway?

  And effectively, what we have is that in 1989, the top 1% used to have 23% of wealth globally. Now it's 31% and it's even more skewed in the US. And even when we talk about, not even about assets, but income, the top 1% income is up 162% since 1980. It's only up 36%. Now, so it leads a notion, a very real notion, that the system is rigged. And what the incumbents will claim is that it's network effects and our most talented. No, these are decisions that we have consciously made through legislation. Mortgage tax, interest rate deduction, capital gains, favored treatment are all conscious decisions we have voted through.

• 13:14Scott Galloway?

  Or that have been voted through by a passive minority ruled by special interest groups. Who get one or two centers to block legislation. And money has, here's a stat, 300 people, 300 billionaires are now responsible for 20% of all political giving. And not only that, they can be, that doesn't even tell the story because that 20% has way more influence. Because a PAC representing, you know, unions or services workers, they have to give their money to certain people who are focused on certain issues. Whereas billionaires can be much more flexible with their money and give it strategically on a specific issue for a specific vote coming up.

• 13:58Scott Galloway?

  So what we've lost is that lawmakers used to take very seriously the following truth or puncture. They'd never bought the myth that the far right or the right will tell you. And that is that the middle class is a self-healing organism. And if you just let the market run, the middle class will be fine. No, when the market is left to its own devices, a middle class goes away. It is the greatest innovation in history, but it requires constant investment. And let me use the R word, use constant, it requires constant redistribution. And Wealthy people and corporations have gotten in the way of that wealth redistribution, and we are actually moving back the general law of the jungle, the way the majority of

• 14:42Scott Galloway?

  societies have been through the majority of time, and that is more and more capital and opportunity aggregates to the top 1%, and then at some point, the bottom 99, see above, point 83, Gini coefficient, rise up and get very, very angry.

• 14:58Ed Elson?

  Yeah, I think that this is indicative of the problem here, which is you have the people who are in power right now, the fact that they are bragging about things like GDP growth right now is an indication that they don't understand the severity and the significance of those economic touchpoints that most Americans are actually experiencing, like, you know, housing prices continuing to rise, the fact that mortgage demand is falling. Those are things that the very wealthiest, who are generally in power at this point, I think this is the kind of the point you're making, those are economic touchpoints that they don't really feel, because they're generally price insensitive. Gas prices rising 30%, again,

• 15:43Ed Elson?

  not really a problem for the people in power. Airline tickets rising 20%, that's what the United CEO told us, because of what we're seeing in the price of oil. Again, that's not going to be a real problem. The TSA line lasting four and a half hours, which is the highest wait time in TSA history, if you're extremely wealthy, if you're someone like Trump, then that's probably not going to be a problem for you, because you're going to fly private and you're going to fly Air Force One. And you made a very important point yesterday, which I think is worth mentioning, which is if all private air travel were forced to be grounded today, this TSA funding issue would probably be resolved within 24 hours. You'd figure out some way to get the funding to the DHS such that we could reopen air

• 16:28Ed Elson?

  travel once again and figure out this TSA problem. But the trouble is there are two different classes of people, and it seems that the people in power don't really experience all of the things that the rest of Americans actually experience. And this is true of many, I mean- We're just talking about TSA lines because it's a very obvious example. We're literally experiencing it on the ground right now. But inflation is another important one, like grocery prices, which have risen faster than pretty much every other category over the past year. That's another thing that the people in power don't really feel. So they're probably not going to get that worried about it. And I want to play you a clip from from an interview with Kevin Hassett, who is the director of the National Economic Council.

• 17:12Ed Elson?

  He's really in charge of a lot of the economic policy under President Trump. This is what they were asking him about what this war does to the economy and how it might affect American consumers, basically just regular American people. And he essentially said the quiet part out loud. So let's play that clip.

• 17:31Speaker 05

  If it were to be extended, this it wouldn't really disrupt the US economy very much at all. It would hurt consumers and we'd have to think about, you know, if that continued, what we would have to do about that. But that's like really the last of our concerns right now because we're very confident that this thing is going ahead of schedule.

• 17:48Ed Elson?

  He essentially says, I mean, not essentially, he does say, if the war hurts consumers, that will be the last of our concerns, which seems to be literally the policy from this administration right now. Don't worry about all this stuff that's affecting your life. Don't worry about the gas prices. Don't worry about the food prices. Don't worry about any of that. The stock market's up and GDP grew because we're building a shit ton of AI data centers. Meanwhile, we're all sitting here like, who cares? I can't afford anything. What did you make of that clip?

• 18:18Scott Galloway?

  That was just plain stupid. We don't care about consumers. We're in a consumer economy. Two thirds of our GDP is from if consumers aren't doing well, the consumer economy isn't doing well. I think if I think he'd have a lot more credibility if the Dow went down 10,000 points. And he said, look, the majority of 10% of the stockholders own 90%. The bottom 60 through 90 own 10% and the bottom 50 own debt. So a recalibration of the markets and the wealthiest among us and corporations losing some equity, that's not a big deal. But to say that we don't care about consumers. And just going back to the point of this kind of vibe session, if you will. The way people evaluate or feel their own success or lack thereof,

• 19:03Scott Galloway?

  it's relative versus absolute. And that is, people don't evaluate their lives in a vacuum. They ask themselves, how am I doing relative to others? Not relative to how I was doing 10 years ago, not relative to a 26 year old Princeton grad in 1945. Right? They say, how am I doing relative to others? And I think we underestimate the impact. When everybody has an incentive to vomit a faux, much wealthier fake version of their life out to everyone 24 hours a day, it's just impossible not to think, wait, how on earth did she get to Mykonos on a private jet?

• 19:46Scott Galloway?

  And I'm struggling to figure out a way to get, you know, to Ron Kongoma for a weekend at the beach on the subway. So you don't, people don't think that way. Telling people GDP is up, you're actually, things aren't that bad. What they see is my success relative to others is just, is it feels like I'm failing. Even though my life might be, you could argue that young people's lives have tangibly increased over the last couple of decades, certainly over the last several decades. But they don't see it that way. They see it as they should, relative to other cohorts.

• 20:26Scott Galloway?

  And when they look up and they see that people, a lot of the people in their 40s and 50s own a home. And they're like, there's no way I can own a home. I'm killing it and I still can't own a home. Right?

• 20:37Ed Elson?

  That one relative to previous generations has gotten worse, just flat out. I mean, previous generations of my age were able to, or approaching being able to buy a home. That's not the case now. The average age of a first time buyer is now 40. It was literally 31 just 10 years ago.

• 20:56Scott Galloway?

  I'll use a personal example. When I got out of business school in 2002, 92, I was offered a job for a hundred thousand dollars at a consulting firm. And I bought my first house with my partner in Petronal Hill, San Bruno and 18th for $285,000, 2.85 times first year salary out of business school. Now, the kids at Haas, average first year salary is around 200 grand. That's an exceptional living. The average home in San Francisco is 2.1 million. So it's gone from 2.8 to 10.1 in San Francisco. And I think that's largely indicative of what's happened across the US.

• 21:36Scott Galloway?

  And what's interesting is that I did a deep dive on our Substack around declining birth rates. For every increase in housing prices of 10%, birth rates decline 1%. And that is, it ends up that increasing home prices are effectively birth control. And think about it, if you, you and Claire are in relationships, you don't realize how powerful a means of connection and path towards commitment, monogamy and children, saving for, buying a home, painting a room blue or pink in case a little one comes along,

• 22:16Scott Galloway?

  getting a dog, you get on a path towards commitment and for savings. And when you're saving for a house, you stop doing stupid shit like going to Vegas or, or, or spending money on a new pair of shoes. No, you know what I mean?

• 22:33Ed Elson?

  Yes.

• 22:34Scott Galloway?

  It creates a, saving for a home is a fantastic motivator and guardrail. And I worry that a lot of people your age have just given up, just totally given up on that notion. There's like, there's no way I can find the 20% I'm going to need.

• 22:48Ed Elson?

  And also, not only is it an incentive, it's like a prerequisite for having a kid. If you're gonna need, you're gonna need a place to live and it's gonna need to have another room or not, but that's, I mean, it's, it's, I mean, it's, it seems very, very simple and logical, like not only is it a motivator, it's like you need to have the ability to get your hands on property and make your life, make it easier to actually build a family. The other thing you mentioned there is like, This idea of the vibe session, which has been a really interesting point that that Kyla Scanlon came up with, our friend Kyla, and it's become very popular. And it it points to this idea of like, there's a divergence between the way that the economy

• 23:33Ed Elson?

  is actually doing versus the way that people feel about the economy. And that is an interesting and fair point. But where it gets into trouble, I think, is when people start to say to voters and to consumers, like, you just have high standards. Like, you think that your life is bad, but your life is actually good. Trust me, I'm looking at this data here, and I can tell you, and I'm going to wag my finger at you and tell you, your life is actually good. And in the world, I mean, if we're talking about the world of politics, which we are here, that doesn't work.

• 24:13Ed Elson?

  Like, you can't just tell someone that their life is actually great and then point at a GDP growth chart and then point at, you know, the price of a smartphone today versus the price of a smartphone 30 years ago and say, see, your life is good, actually. Because that's not giving nearly enough credit to the person themselves, who's probably evaluating all the things in their life, and they're making the call themselves. Actually, this isn't working out for me. This doesn't work for me. And and, you know, you can make the argument, yeah, but you can order Uber Eats, and you couldn't do that 30 years ago. It's like, well, is that really changing fundamentally the way people feel about their lives? The fact that they can order food and it gets delivered to their door at a slightly

• 24:57Ed Elson?

  cheaper price than 10 years ago? Or do we need to think about the more fundamental things? The ability, as you say, to be able to get your hands on a home and build a family? The idea that you could really build up a career that can build an actual asset base from which you can then launch your life? Like, these are the things that actually matter. So I think it gets, it's not going to work, essentially is my point, when the administration says, yeah, but look at GDP growth, look at the stock market. That's not going to fool people into being convinced that actually their life is the way they want it to look, when they're literally telling you, no, it isn't.

• 25:35Scott Galloway?

  Yeah, people don't optimize for GDP growth. They optimize for security, progress, emotional health, and also in relative standing. I also think there's something to the notion that

• 25:49Scott Galloway?

  I don't think young people just have as much fun and joy in their lives. I don't think they have a sense of community. They're not going to religious church attendance is at an all time low. Sports, being outdoors, being in the, being in the company of strangers, drinking is at an all time low. I just don't think, quite frankly, people of your generation are having that much fun. And then when they do have fun, they feel as if they need to like work and post it. And, you know, they go, okay, let's, let's show how much fun we're having. Let's not eat the food. Let's take pictures of it. And so I, and then constantly being reminded that they're, that they're falling behind on a relative basis. I just think it just attacks their emotional well being.

• 26:33Scott Galloway?

  And the thing that, there's this study that came out that when daughters hear their mother's voice on the phone, almost immediately their blood pressure goes down. Wait, when do, when do young people's blood pressure go down? When are they in the company of strangers? When they, when are they with friends? When, when do they unplug from a cycle of dopamine hit from their phones such that they can just sort of relax and experience joy and fun? I think it's, um, I think it's tough. And, and to tell them that, wait, but you actually on a lot of levels have a better life than most people. I get it. Everyone's freaking out about a 10% youth unemployment rate. That's not actually historically, that's about average. But again, that's not how people think.

• 27:17Scott Galloway?

  People think in relative terms, not in absolute terms.

• 27:19Ed Elson?

  I think it would explain the approval ratings, which are now for Trump, some of the worst approval ratings we've seen. His approval rating has hit a 36% low. And most of it is about the economy. Only 29% of Americans approve of his handling of the economy. That's one of the lowest ratings ever. It is now lower than the really bad lows that we saw during the Biden administration when we saw that historic inflation coming out of COVID. And his worst issue is inflation and prices. Net approval's down to negative 39, continues to decline. Seven in 10 Americans say the cost of living is not very affordable or not affordable at all. 61% say the economy is not working for them personally.

• 28:04Ed Elson?

  And that is up from 57% in May. So people, I mean, we could tell people, oh, your perception's wrong, but that perception is all that matters here. At least if you're trying to get votes. If you're trying to win a political body, you can't just tell them, don't, don't trust your own thoughts. You have it wrong. Things are great. They will decide that for themselves and they've decided that things are not working out right now.

• 28:32Ed Elson?

  We'll be right back. And for an exclusive live stream on the science of storytelling from our research lead, Mia Silverio, sign up for our Substack at profgmedia.substack.com. She will be going live with paid subscribers tomorrow. It is an excellent presentation. Don't miss it. Subscribe now.

• 28:58Speaker 06

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com slash apple watch series 12.

• 29:28Speaker 02

  If you're looking to hire, you need Indeed. With Indeed sponsored jobs, you can spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. And listeners of this show will get a $75 sponsored job credit to help your job get the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed sponsored jobs.

• 30:13Speaker 01

  Are you a pet owner? Every six seconds, a pet owner in the US gets hit with a vet bill over $1,000. Always an unwelcome surprise. That's where Fetch comes in. Fetch is the most complete pet insurance for dogs and cats. According to consumeradvocate.org, you get paid back up to 90% of vet bills at any vet in the US and Canada with claims paid back in as little as two days. Go to fetchpet.com/save right now for your free quote. That's fetchpet.com/save.

• 30:56Ed Elson?

  We're back with Prof G Markets. A new bipartisan bill could shake up one of the fastest growing corners of finance, prediction markets. Two senators introduced legislation that would ban sports-related betting on CFTC-regulated platforms such as Calci and Polymarket. It would also prohibit them from offering casino-style games in the future. That includes everything from slots and blackjack to video poker and bingo. Notably, this is the first bipartisan Senate effort aimed at regulating prediction markets. So Scott, this new proposal, it's called the Prediction Markets Are Gambling Act. Just a quick summary of what it would actually do.

• 31:37Ed Elson?

  It would essentially just ban all forms of sports betting on these prediction markets. That's the main event. It also says it's banning these prediction markets platforms from hosting games like casino-style games like poker and blackjack, bingo, all this stuff. I think that's a misleading provision because none of these platforms actually host those games. They're not, you can't play blackjack on Calci or any of the other platforms. But they're basically saying you can't do that in the future. So the real meat of this proposal is no more sports betting, which has become a very significant market on these platforms.

• 32:19Ed Elson?

  So I guess we'll just start with your reactions here to this proposal that is bipartisan.

• 32:26Scott Galloway?

  So first off, I should disclose, just before I make my comments, that Calci is a data provider. For Prof G, we absolutely love their data on economics and earnings predictions and geopolitics. With respect to this legislation, this is a tough one because putting the opportunity for wagering in a more risk aggressive, less developed prefrontal cortex, we've seen how that can go wrong. I think the challenge is parsing between these different segments. There's gaming, quote unquote, traditional gambling, there's the prediction markets, and then there's options contracts. And effectively, what the prediction markets are doing is they're offering what feels,

• 33:11Scott Galloway?

  smells, and looks like an options contract. And that is, you're paying for a certain amount on an outcome against someone else who believes in another outcome. So what will be interesting is if, I mean, my viewpoint is, whatever legislation they should have should apply to all of it, right? Something I would like to see, you can't, my 15 year old is dying to go to Vegas with me. I'm not sure it's going to be that much fun for him because you can't be on a casino floor if you're under the age of 21. I would like to see age gating across all these things. I'm not sure a 19 year old needs to be playing options, zero day options. Zero day options are gambling. I, you know, 80% to 90% of stock market purchases and sales are effectively speculation.

• 33:56Scott Galloway?

  You're not investing for the long term. And then, and then there's no getting around it. If you're on Bet MGM, or in certain instances on these prediction markets, you are essentially trying to get a dope a hit on a belief that you want to have insight into something and you're trying to make money and the risk of winning or losing creates a hit. The question is, should there be legislation disparate by market? Because I don't think the options markets. Would want age gating at 21. I think you'd see, I think you'd see stock exchanges or stock market platforms try and fight against that.

• 34:36Scott Galloway?

  So the question is, do, what I'd love to see is, are, look at those three categories. What is the ramifications on the mental health and the rates of addiction across those three categories? And does it warrant distinct or different levels of regulation? And if not, why wouldn't you just have one set of regulation around age gating, certain limits on how much you can spend, or, you know, not being able to use your parents' credit card, whatever it might be? Or have certain AI-driven prediction algorithms that say, you need to take a break, or we've shut down your account, whatever it might be. But they, this is definitely going to be a very interesting period, because you know

• 35:21Scott Galloway?

  who's most scared of the regulation of prediction markets? Is the options markets. Because the options markets are looking at this and going, okay, how are they going to be regulated? And then, and then how are we going to say we're different? Because our contracts look shockingly similar.

• 35:36Ed Elson?

  I mean, you started with, this is a tough one. And then I think you actually did the tough part, the hard part of the task here, which everyone's been talking about, which is, I mean, the question is, where do you draw the lines? Like, how do you categorize these different things? But you did that, and in my view, you did that correctly. And that is, you said, there's sports betting, which is a form of gambling, and there's options in futures trading, which you could maybe say is kind of like gambling, but we both probably agree, it's different from betting on the outcome of sports games. And, you know, this is the, I think, some of the slightly facetious pushback that we've gotten from the prediction markets, players, they say, how are you supposed to draw the

• 36:21Ed Elson?

  line here? Where do you draw the line? And my favorite line from, from John Oliver, the great John Oliver, he said, where do you draw the line? You draw it somewhere. So what we've done here, and what you've just done, is you've drawn a line, which I completely Completely agree with, and that is that there is sports betting, which has its own form of regulation and it has its own federal framework. It most of the regulation does happen at the state level. And depending on what state you're in, there are different laws. In some states, there is an age requirement. You have to be 21. In other states, you can be 18. Most of the states have similar rules around how to gamble safely. You have safe advertising rules. You have rules on displaying resources for problem gamblers.

• 37:05Ed Elson?

  There are all of these different rules, but you need the framework, you need the lines and the boxes to be drawn in order to start regulating this stuff. Which we have done with sports betting and it doesn't work totally, but it gets us somewhere. Then there's options and there's futures trading. And currently, we treat that legally as a different thing. This is where you bet on the price of stocks going up and down. You bet on the price of commodities, it's regulated by the CFTC, the minimum age, as you mentioned, is 18. Maybe you could have an argument as to why it might, you might want to make it 21. But the point being, the framework is there and it's in place and it is different from sports betting.

• 37:47Ed Elson?

  And so I think what we have here is actually a good piece of regulation. I was thinking that maybe regulators would go overboard and say, ban prediction markets entirely. They're all bad. It's all gambling. No. Instead, what they've decided is they said, hey, a lot of people are betting on sports on these things. That looks a lot like gambling and it does look a lot different from the stuff that we actually like on this program, which is the financial events contracts. The contracts and the prediction markets would say, what's going to happen to interest rates? What's going to happen to inflation? What's going to happen to gas prices? To me, that's basically options trading. That's basically futures trading. Yes, it's risky and yes, you could make arguments that it's similar to gambling, but it is far and away a different thing

• 38:32Ed Elson?

  from betting on the outcome of the Super Bowl or the World Cup. We're trying to figure out who's going to be in the Sweet 16. Those are two separate things. So I think this is actually sensible here. It's like, look, keep trading these. Financial contracts because what we've learned is they're actually really great for predicting things about the future, better than Wall Street in a lot of cases. They're also really helpful for understanding the news. That's why we use that data all the time because if we want to understand how did this big event affect what is going to happen in the future? We often look to a market, a platform like Calci. And we say, okay, yeah, the probability of of interest rates coming down or going up has gone up X Y percent.

• 39:15Ed Elson?

  And that's a useful thing, but you have to start drawing the lines and figuring out what is the category of each different thing. And once you do that, then you can start to reach some semblance of sensible regulation. But if you keep saying, oh, it's all too blurry. It's all gray zone. You're never going to get anywhere.

• 39:32Scott Galloway?

  There's two ends of this. There's the end consumer and then there's, I don't know, the B to B side. We so Federal Reserve economists have said that Calci is better than professional economic indicators who predicting inflation and Fed fund rate decisions. This data has real value to media companies and analysts, you know, like ourselves. Calci has a perfect forecast record on Fed rate decisions. Perfect. So far, they're batting 100% on Fed rate predictions. And also, it's not just macroeconomic data. Calci's earnings predictions are as accurate as Wall Street's. Now, the question is, all right, on the sports side, we don't care, nor do we talk about

• 40:17Scott Galloway?

  what the odds are of, you know, the Rams winning the NFC playoffs, right? We don't, we don't care. That's not the business we're in. Should it be more difficult for a 21 year old to bet in Las Vegas or bet on a prediction market on a sporting event than it is to go to Vegas or a Native American reservation and bet on sports there? Or, I mean, why are these guys, and maybe it's they're just being subject to the same things, but it strikes me, I struggle with the, the, the line between infantilizing people and.

• 40:55Scott Galloway?

  And also recognizing there's real potential for harm here. And I imagine that's what the regulators were struggling with. But when you were in Vegas, you could bet on sports, right?

• 41:03Ed Elson?

  Oh, yeah, for sure.

• 41:05Scott Galloway?

  So what's the argument? I'll just straw man it is what's the argument or steel man it is? What's the argument for why you shouldn't be able to do that on the predictions markets?

• 41:14Ed Elson?

  I think you should, but it should be regulated like gambling. I mean, that's, that's basically it. If it's gambling, regulate it like gambling. So, I mean, I think the real problem for these companies is the, the workaround that is beneficial is that if you're regulated not like gambling and you're regulated like options, which is what the current laws are, then you're not subject to any gambling regulations, which means that you can operate in states in which sports betting is illegal. So that's a problem.

• 41:48Scott Galloway?

  It's a fair point.

• 41:48Ed Elson?

  So for me, it's just like, okay, the stuff that's gambling, regulate that like gambling. You shouldn't be trading sports events contracts in states in which they've decided that sports gambling is illegal. That shouldn't be happening. But in states where it is legal, let them have it.

• 42:06Scott Galloway?

  Another question, and as you're betting on the Green Bay Packers, right? You're betting against someone who thinks they're going to lose and you think they're going to win. Zero day options. I'm betting Apple stock's going to go up. You're betting it's going to go down. You're writing, you're writing the contract. I'm buying it. Is one more or less gambling than the other?

• 42:28Ed Elson?

  Yeah, I believe that the sports gambling is more, more gambling than, than the other. I think the other, I think the, the zero day option makes a case. It has a, it's pretty close to gambling. But again, if we're drawing lines, which I'd like to do, I think that's a pretty easy line to draw. One is about a financial product.

• 42:47Scott Galloway?

  What if the Apple analyst puts on a helmet and a jersey? I don't see the difference. I, I, I see zero day options by that definition as gambling.

• 42:55Ed Elson?

  Then we just throw our hands up and say, okay, let them all have it. I mean, we, we have drawn a line already in our regulation where we say, if you go on DraftKings and you bet on the game, that's gambling. If you go on your Robin Hood and you bet on options, that's something else.

• 43:11Scott Galloway?

  When I saw zero day options and I went on a platform to look at it. To me, it was just, it was Vegas with a strong Reddit component. And, and so I don't see much of a difference.

• 43:26Ed Elson?

  Totally agree.

• 43:27Scott Galloway?

  The people who are actually the most nervous here, the prediction markets are phenomena. They're, they're exploding, right, across a number of dimensions. I think the people who are most nervous here are whatever it is, the CFTC, the governing body of options contracts. Because where they have gone with zero day options, it's getting awfully close to gambling. And I think they're going to have a difficult time saying why, why we should be subject to different regulations than other things deemed as gambling. What I think we need more of is research on, on the effect and the impact this is having on people. You know, there's some, there's some research saying that gambling, once gambling is legalized

• 44:12Scott Galloway?

  in a state, bankruptcies immediately go up, right? That's, that's a negative. What's happening specifically to young people? What's happening to their mental health? What's happening to their financial well-being? So, look, I, it feels like there needs to be more research across these categories and a really solid justification for if and how we create a distinction that warrants different legislation across these categories.

• 44:40Ed Elson?

  I don't think we need to complicate things that much. Like, just by saying, yes, that's gambling, doesn't mean that you're just saying you're not allowed to do it anymore. All it's saying is you should be regulated like gambling now, which means, yes, you won't be able to operate in this number of states where this thing is illegal. But of course, you go, go set up camp in Nevada and, and do your, do the sports, sports betting there, but let's just regulate the things for what they are. One thing is more similar to options trading. One thing is more similar to sports betting.

• 45:15Ed Elson?

  We'll be right back after the break. And if you're enjoying the show, please follow our new Prof G Markets YouTube channel starting next week. That is where you will find our content on YouTube.

• 45:35Speaker 07

  Do you love the luxuriant flavors of fine dining? Then make a reservation at the most hands-off restaurant in town: Udi Chef. Five-star chefs at Udi Chef provide expert suggestions on how to prepare your meal, so you pay them, and then they say au revoir, while you try and figure out the difference between escargot and escarole. No dish is too simple or too fancy for us at Udi Chef, because there are literally no cooks in our kitchen. Just you, all alone. Prepping produce you don't even know how to pronounce. Bon appétit.

• 46:09Speaker 08

  Fortunately, Udi Chef isn't real. That would be ridiculous. Kinda like AI that suggests what your employee should do, but can't help them do it. That's like a restaurant that only tells you how to cook your own meal. ServiceNow doesn't stop its suggestions. It puts AI to work, connecting your AI, workflows, data, systems, and governance to take action and get the job done. That's why the world works with ServiceNow.

• 46:35Speaker 09

  You're listening to Deepgram Flux TTS. Different voices, same model, all ready to speak.

• 46:41Speaker 10

  Flux TTS is a streaming text-to-speech model built for voice agents.

• 46:45Speaker 09

  Flux reads the room. It holds context across the conversation, turn after turn.

• 46:49Speaker 10

  With consistent tone, interruption handling... And plenty of personality.

• 46:53Speaker 09

  So your agents keep it flowing and customers can just keep talking.

• 46:57Speaker 10

  Try Deepgram Flux TTS free now until September 12. Visit deepgram.com/keeptalking. Terms apply.

• 47:06Speaker 11

  Support for the show comes from Honest. Parents want the very best for life's most delicate skin. That's why Honest holds every product to their highest standard: the Honest standard. From Honest Clean Conscious Wipes, to Bath & Body Essentials and Diapers, everything Honest makes is designed for the delicate details that matter most. Because when caring for a baby comes with so many little decisions, you need products you can trust. Your peace of mind starts with Honest. Shop Honest on Amazon, Walmart, and Target.

• 47:45Ed Elson?

  We're back with Prof G Markets. Two major court rulings last week could mark a turning point for social media companies. First, a New Mexico jury found Meta had violated state law by failing to protect its users from child predators. Meta was ordered to pay $375 million in damages. Later in the week, a Los Angeles jury found Meta and YouTube liable in a social media addiction case, concluding that their platforms were intentionally addictive and contributed to a young user's mental health issues. Meta has to pay $4.2 million in damages and YouTube must pay $1.8 million. The trial is the first in a wave of more than 1,600 related cases brought against these social media companies.

• 48:30Ed Elson?

  Many are calling the decision a bellwether, saying it could open the door to a surge of new lawsuits focused on user well-being. Scott, this is basically the first ruling we've seen of its kind against big tech, a subject you have been railing against for many, many years. It was literally the subject of your first major book. And they ruled in favor or they ruled against big tech in both of these trials. What do you make of it?

• 49:02Scott Galloway?

  I think this is a big deal. And it's not the beginning of the end, but it's the end of the beginning is the way I would describe it. And that is typically with harmful substances or practices that have an externality that really damages the public. It takes, we usually figure it out. It took 30 years with tobacco, it took 20 years with opiates. And if you look at when social went on mobile in 2013, it looks like it's going to take about 20 years. I do think that these companies are now facing juries and these juries have children who have gone through. Phones, smartphones with social media, and they've seen firsthand just how damaging it is, and they feel lied to. When I wrote the fore in 2017, the argument was over whether these companies were bad or not.

• 49:46Scott Galloway?

  It was who was going to be president, Jeff Bezos or Sheryl Sandberg. I mean, the affection for these companies, these innovators and these tech executives was extraordinary. And social media was helping connect parents of kids with childhood, you know, strange childhood diseases. It was reconnecting your friends from, from call. I mean, it was all like rainbows and unicorns. And when I initially started writing the book, it was like, it was a love letter to these companies. And then as I really started looking at data, I'm like, okay, this doesn't, something's wrong here. This feels, this feels dangerous. And slowly but surely, and over the last nine years, they have weaponized government, created unbelievable tactics around delay and obfuscation, leveraging Citizens United,

• 50:31Scott Galloway?

  and exceptionally star PR people, exceptional comms people, exceptionally charming and likable executives, from Nick Clegg to Sheryl Sandberg to, you know, I forget his name, Evan, he's super likable, had a snapper, his name. And the reality is, our kids started self-harming. And we started not liking each other. And we started believing that the enemy wasn't Russian troops pouring over the border in Ukraine, it was our neighbor with the wrong presidential sign. And we started attacking each other online. And then outside actors with, who couldn't beat us economically or kinetically, took

• 51:12Scott Galloway?

  advantage of a porous shareholder-driven platforms to start planting incendiary content that got us divided. I don't think Americans are actually divided, but we have people dividing us. And these companies are the agents for it. And now there's this, this enormous economic incentive to create a series, set of content, much of which is useful, much of which is benign, but some of it just gets you angry at yourself, angry at others. And going back to the last story about why young people feel bad, even though maybe they've made modest gains, they, they're told every day that they're failing, that they're not hot enough, they're not wealthy enough, they're not impressive enough. And these firms, what came out in this trial, which was so incredibly disturbing, is the New Mexico Attorney General.

• 51:58Scott Galloway?

  Create an account posing as an 11 year old girl. And almost instantly, the 11, the account got bombarded with explicit images from known sexual abusers, from kids preying on kids. So let me get this, you can serve me, you can tell when I'm at a Beyonce concert and serve me an ad for a ride home from that location, or you know, when my kid's about to turn, get his learner's permit and start serving me ads for auto insurance for a kid in Florida. But you didn't know this? You didn't know this was going on? And what this shows, the discovery here is going to be so horrific for these companies.

• 52:40Scott Galloway?

  Cause the reality is, they knew what was going on. But anything that introduced friction to the business model, they ignored. And I want to be clear, I think these companies are a net good for society, except for Meta. I think Meta's jumped the shark and is now a net negative. But big tech is a net positive for society. The problem is with the word net. And that is, we're net beneficiaries from pesticides and fossil fuels, but we still have an EPA and emission standards. We have no regulation around these companies. And they have fought, they pretend to give a flying fuck about children with child safety features that are impossible to navigate and figure out.

• 53:22Scott Galloway?

  And then of course, the people who've really paid the price here are low income households. Because I have the resources to try and make my kids, try and keep my kids off screens. I have the money to pay for after school stuff. I have the time and attention to be at home to ensure they can't go into the room alone with a screen, which is a rule we have. When I was growing up, you know, my mom was out of the house before I got up. Sometimes didn't get home till after I was asleep or later. If I'd been at home bored with an iPad and, and, you know, YouTube and Instagram and YouPorn and Reddit and Discord, I'm not sure I would have ever left the house.

• 54:07Scott Galloway?

  And then my brain being rewired as I'm going through puberty around a constant need and access to DOPA right away, whenever I wanted to squeeze it. I think this generation, unfortunately, my kids at 15 and 18 had to endure this bullshit. I don't think your kids, I think we're gonna, I think we're figuring it out. And I think in three to five years, it wasn't the fines that are the big deal. It's the fact that now the other thousands of lawsuits against these companies have legal precedent to go after them. And last interesting feature that our old colleague Maria Petrova highlighted to me is that the insurance companies meant to insure these companies against this type of liability

• 54:49Scott Galloway?

  are saying that they're not going to pay, that they're not covered because they intentionally did this. They knew they were doing it and they intentionally did it. And if the insurance companies had known they were intentionally breaking the law, they couldn't insure them. Now, far be it for any insurance company to actually, you know, insurance companies are famous for trying to get out of when you actually call on them to pay for it. But this is, this is that big tobacco moment. I forget it was 1991, I forget when it was. But this is that moment. So again, I don't think social media is going away, but this is the end of the beginning. This is the end of the Wild West when these companies could operate with total immunity.

• 55:33Scott Galloway?

  So I'm, I think this is a big moment. I'm excited about it. I've said that before and been disappointed, but I think it's, I think this is different this time. And the fact that both these cases came down with the same verdict within hours of each other also says something. This is a pattern here and it's going to give a lot of plaintiff's attorneys and a lot of parents newfound mojo.

• 55:53Ed Elson?

  And by the way, the market agrees. And that was the big standout moment for me. Meta actually fell on Thursday down more than 5%, 10 month low. So that's the market telling you actually, yes, this does have teeth. This is a big deal. And I just want to go back to a point you made at the beginning there about the fact that this was a jury trial. So both of these trials were ruled by a jury and that was and it was decided in both cases that what big tech was doing was illegal. But most of the major big tech cases that we've seen have been decided, they've been bench trials, they've been decided by a judge.

• 56:35Ed Elson?

  So in the FTC versus Meta trial, that was a bench trial, the judge ruled in favor of Meta. We had the DOJ versus Google trial, which was decided on again by a judge. Judge Amit Mehta said that Google actually was a monopoly, they were operating this monopoly. But when it came time for the penalties and the remedies, he said, actually, we're not going to issue any remedies, we're not going to issue a penalty because OpenAI is coming up and coming and it's going to start to eat Google's lunch. And so that would be unfair to Google. And then what do you know, Google starts to crush OpenAI with Gemini. So that argument didn't make any sense, but too late, the decision is made. We had the same thing coming up in 2026 in the FTC versus Amazon case, which will also be decided by a judge.

• 57:19Ed Elson?

  So usually these cases haven't been decided by a jury, they've usually been decided by a judge. And I think that is something that big tech really likes because I think that they would prefer to not have these issues adjudicated by the democracy, by the people. By parents. By parents. It's basically the judge's job to remove all of the emotion out of the equation. This is literally what they get trained to do and get really into the minutia of all of the statutory elements. And that's what you have to focus on overwhelmingly. But when you open it up to the people, as you say, whose children have gotten addicted,

• 58:04Ed Elson?

  whose children have engaged in self harm, all of that starts to build up. And it means that eventually you're going to say, you know what? I'm not going to go lenient on you guys. I'm not going to give it, I'm not just going to play it so easy and roll over so easily here. I'm going to be very, very harsh because the things that you have done to my life, the things that you have done to our society at large are egregious and they need to be punished. And that's something that I think these big tech companies really don't want to see, which is why I think it is so notable that it was a jury in both cases. I believe one of them, the decision was unanimous across all of them because there is so much pent

• 58:46Ed Elson?

  up anger and frustration among the American people right now against big tech. And that actually matters. It actually is important to have a moment of catharsis where you can actually express, "Look at all of the wrongs that you have done to us over many, many years." And yes, this, we are going to use this moment and this trial as our moment to express that to you and say, "Actually, this isn't okay." So I hope that we will see many more jury trials. And I think that what we'll find is that the more jury trials that we have, the more they're going to be ruling against big tech.

• 59:23Scott Galloway?

  Whenever anyone says the time on screens is about bad parenting or good parenting, that's a tell that they don't have children. They get their homework on their screens now. This is how they communicate with their friends. And Adam Alter, a colleague at NYU, doesn't get nearly the recognition because he's overshadowed by Jonathan Haidt and, and, and anyways, other, other profs that are more retail whores would start multiple podcasts. But he wrote a book called, what was it called, Addicted or Relentless? Anyways, he wrote a great book about the addiction of, of these products. And he said that the really sad thing is if you don't have a collective ban, if you

• 1:00:06Scott Galloway?

  take your kid, if you tell your kid you can't be on Snap and you can't be on Instagram, they're more depressed because they're isolated socially. And so unless there's collective bans, unless there's, I mean, for God's sakes, these, these companies will claim that it's hard. And my favorite is when Mark Zuckerberg claimed to give a flying fuck about a 14-year-old's First Amendment rights. Yeah, I bet he wakes up at night thinking, "14-year-olds need free speech." I mean, he literally used that as an excuse that they were worried about their First Amendment rights, a ninth grader. But unless, I don't see why we haven't, I mean, a simple one, age gating. I think that's coming. I don't think there's, I don't think there's any reason anyone of the age of 18 should ever be on a social media platform. And I get it, maybe they can learn from YouTube, maybe they can learn how to do algebra. It's not worth it.

• 1:00:51Scott Galloway?

  Or you have the cleanest G rated version. And what Jonathan Haidt says is just go to China and see what they're serving up on their social media platforms. It's like kids running around and doing dances in front of the flag about how much they love China and the CCP. And but, you know, and then the other example Jonathan uses is if you go to the wealthiest high schools in Silicon Valley, they literally have no screens. They don't. And so it is, it is nearly impossible to keep your kid off of this stuff. And there have been so many horrific stories about self harm and kids and that, and that Meta knew about this stuff. The discovery here is going to be a horror film.

• 1:01:35Scott Galloway?

  When they see the emails and the research and when we find out what we knew, you know, what we knew was going on. And I always go back to, I don't think these are, I do think Mark Zuckerberg and Sheryl Sandberg have made more money while damaging more young people's lives than arguably any people in modern history. But we're the ones that are ultimately culpable because we have to elect people who have the backbone and the domain expertise to regulate these companies. And General Motors would still be pouring mercury into the river if we didn't have regulation, because if they didn't, they would be at a cost disadvantage to Ford and Stellantis who continue to pour mercury into the river. So we need to remove section 230 for algorithmically elevated content. We need to age gate and we need to break these companies up and we need, and this,

• 1:02:20Scott Galloway?

  this fourth leg of the stool, if you will, of the chair has happened, is civil liability. Because these cases, if these cases stopped, if this was it, nothing would change. Because this amount of money is chump change for these guys. This really isn't incentive. I also think we need to move to a civil penalty construct where it's a percentage of market cap. So when Elon Musk is found guilty of market manipulation for saying, I'm, you know, funding secured to take the company private, he's fine. I figure it was $200 or $300 million. That's like you or me being fined. Eight dollars. It's not a disincentive. Right? If you have a parking meter in front of your house, the ticket is 25 cents and it costs 10 bucks a day, you're going to break the law.

• 1:03:05Scott Galloway?

  My first boss at Morgan Stanley, Carter Cordner, used to talk about occasionally, you know, you're always commuting in your car. And a lot of time, back then, cars broke down. Cars were not very good. And a car would break down and you'd, the traffic would be backed up on the four or five and you'd go by and you'd see a car with its hood up and steam would be coming out of it because cars were shitty back then, mostly American cars. And his idea was anytime you break down on the road, you're charged 10% of the value of your car. And you watch, you're going to see maintenance standards go way up. So I think we have to start finding these companies a percentage of their market capitalization or their revenues. Otherwise, the incentive is just to continue to break the law

• 1:03:45Scott Galloway?

  and throw lawyers at the problem until there are so many lawsuits that represent so much capital that they finally have to, you know, they have to change their ways of doing business. But let me finish where I started. This is a big moment.

• 1:03:59Ed Elson?

  But a good place to start is just charge them anything. And I think that is kind of what's striking here. I mean, the penalty for Meta here is $4 million. That's literally like a fraction of a percentage of what they pay AI engineers these days. Like, that's literally nothing. And yet, the stock fell more than 5% on the news. So I think what that is telling you is like, this is the beginning of a very large chain of lawsuits that are coming. And it also shows regulators and it shows prosecutors that actually like, you can do something if you simply apply a penalty. As opposed to what we saw with Google where you say, yes, you did something illegal, but we're not going to, we're not, we're not going to punish you for it. Final stat, I just want to mention here because it blew me away.

• 1:04:44Ed Elson?

  I learned this from a former Meta employee on a, on a CNN program. He said that one in eight children on Instagram have received unwanted sexual advances. And this was, I think, the point that you made, that the Attorney General made.

• 1:05:00Ed Elson?

  This is like an unbelievable level of exposure and just, I mean, it's hard to put words to it, how bad it's gotten, the fact that we are putting children out there. And you've made this analogy before, which I think is a very good one. I mean, how would we feel if a bunch of kids were playing around in a playground? And then a bunch of old men, in some cases, just showed up naked and started looking at them and trying to talk to them. That's literally happening every single day on these platforms. It's happening to one in eight children on Instagram today. Like, I don't think that we fully appreciate how bad it's gotten.

• 1:05:45Ed Elson?

  It's not just that kids are lonely and they're spending too much time on their phones. It's like, we're literally exposing them to sexual predators every day, and it's now become normalized.

• 1:05:56Scott Galloway?

  Well, it's worse than that. What if you, what if the park said, hey, you'll be really popular at this park and your friends will be impressed if you show up in a thong and a bathing suit?

• 1:06:05Ed Elson?

  Yeah.

• 1:06:06Scott Galloway?

  We're going to sexualize you. Oh, and then strange men can speak to you. Or, hey, I'm going to talk to you, I'm the algorithm. Oh, you're not feeling good about yourself? Why aren't you feeling good about yourself? Oh, really? You're, wow, you, are you, you're thinking about self harm? Well, this is how you do it. This is, here's what a razor looks like. Do you know, do you know how to cut yourself? Oh, wait, you know, the mom's pills? Here are some images of nooses, razors and pills. That's what was sent to a 14 year old girl who started talking about suicidal ideation. They, she got an email saying, here are some images on self harm we thought you might find interesting. I'm not suggesting someone at Meta, I think it was Pinterest, said, I want this girl to self harm.

• 1:06:51Scott Galloway?

  What they did is said, no, we have a business model where when we pick up on certain words, we just automatically send images and we, we haven't put in any safeguards because that would slow us down and get in the way of our profitability. So we, Jonathan Haidt's got this perfect. We overprotect our kids offline.

• 1:07:10Scott Galloway?

  Right? My kid, I used to leave my mom's house at 8:00 AM or 9:00 AM on a Saturday morning with a Schwinn bike, an Abba Zaba bar and 35 cents. And I'd get home at like 10:00 PM when maybe she'd start calling the neighbors and saying, if you see Scott, tell him to come home. Gone for 14 hours.

• 1:07:27Scott Galloway?

  You know, rabid dogs, 14 year olds who'd beat me up, break into the school because for some reason we thought it was cool to break into the school on a Saturday. You know, just all kinds of havoc and whatever. My kid's 10 minutes home, 10 minutes late from school. We call MI6. We're guilty of this. But what, what is happening on a screen? And we install all these monitors and everything and then my kid figures out a hack around them. But we vastly underprotect them online because we don't understand these technologies. But the key here is that we now have juries that are going to be made up of parents or people who know people whose kids have really struggled here. And our biggest regret, I still think our biggest regret isn't, I mean, I think Trump

• 1:08:12Scott Galloway?

  is a stain on the American experience, but my thesis is in 20 years, our biggest regret isn't going to be income inequality or climate change. We're just going to look back and go, how the fuck did we let that happen to our children around social media? I don't think, I think the combination of COVID and device addiction and an unfettered social media platform of people who are really have just ignored the Commonwealth for shareholder value. I think these kids, I think we're going to see so much addiction that can be reverse engineered to setting up a constant at a very critical age when their brain was being wired, the ability to squeeze at any moment and get DOPA.

• 1:08:52Scott Galloway?

  I think we have, we have literally, we are flushing tens of millions of youth into the, into our society that demand constant DOPA and don't have the skills for focus, attention, investing in long-term relationships, or even just having the ability to sit through a movie, much less set this, you know, sit at a desk and get shit done.

• 1:09:13Ed Elson?

  And just to clarify, Met is actually now down 8%. So this is just the beginning. Okay, let's take a look at the week ahead. We'll see earnings from Nike, we'll also see consumer confidence and the employment report for March. Scott, do you have any predictions?

• 1:09:27Scott Galloway?

  So I love Nike, I think it's one of the great brands. I think it's arguably one of the most impressive advertisers in history and they've built an incredible direct-to-consumer unit. The stock is now at a 10-year low and the revenue is actually, versus 10 years ago, the revenue, the revenue was 30 billion and this year revenue will be fiscal 2025, revenue will be 46 billion. So despite the fact the top-line revenue has grown 50%, and this just goes to the notion that the market values growth and hates decline and basically the company is struggling under profitability and margin compression, but despite the fact it has

• 1:10:11Scott Galloway?

  a 50% bigger top-line, it's trading at the same levels it was when it was growing at 30 billion, which just speaks to the notion that, you know, if you just get an entirely different multiple when you grow. But the thing that I dug in on around is that from 2020 to 2025, they went from 75,000 people to 78, so they've actually grown their employee base 3% since 2020. So I think what you're going to see here, given the, basically what is just an unbelievable, staggering fall, in five years, the company has lost almost two-thirds of its value and the last year it's lost another 21%. You are going to see an activist come into the stock and you're going to see massive

• 1:10:56Scott Galloway?

  layoffs. And if the massive layoffs don't, you know, unless the massive layoffs come first, but this company, there's, quite frankly, this company needs to massively right-size. It's lost its growth and investors are going to demand that it starts growing EBITDA again and in my estimation, they have not made the hard decisions they need to make around employment. So you're going to see an activist and you're going to see, my prediction is, you're going to see 10,000 to 20,000 people laid off from Nike in the next two to three years and/or an activist show up.

• 1:11:33Ed Elson?

  This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Acartey. Our research team is Dan Schlann, Isabel Kinsel, Kristin O'Donoghue and Mia Silverio. Jake McPherson is our social producer. Drew Burrows is our technical director. Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets and also subscribe to our new Prof G Markets YouTube channel.

• 1:12:40Speaker 06

  Your heart can tell you a lot about your health. Apple Watch Series 12 measures your heart rate every five seconds with the most accurate heart rate sensing in wearable. So your vitals app, now with heart rate variability, can tell you when something is off. And your readiness score can let you know when to rest and when to push. Hear the story in every heartbeat with Apple Watch Series 12. The features described are for wellness purposes only and not for medical use. iPhone 11 or later required. Based on Apple conducted study of heart rate accuracy, August 2026. Visit apple.com slash Apple Watch Series 12.

• 1:13:10Speaker 01

  Support for the show comes from Delta Airlines. Every athlete at the top of our game knows that greatness isn't just a destination. It's a grueling, lifelong journey. It's built on early mornings, silent sacrifices, and an unwavering drive to out climb the achievements of yesterday. That is the journey of a WNBA athlete. And Delta is there every step of the way. Delta is proud to host these competitors, providing charter flights for every WNBA team, to elevate their travel experience and champion equity on every leg of their trip. Keep climbing with Delta Airlines, the official airline of the WNBA.

• 1:13:56Speaker 12

  Trying to locate news sources that reliably separate fact from fiction can seem like looking for a needle in a haystack. That's why The Guardian is launching Stateside with Kai Wright and Carter Sherman, a conversation with experts who slow down the news and wrestle with the questions we all have about what's actually happening in the world. Three times a week, hosts Kai and Carter utilize all the reporting resources The Guardian has to discuss the news, international affairs, climate, culture, sports, lifestyle, fashion, and wellness. And The Guardian is not billionaire-owned, meaning they're free to report the whole picture without interference. Go to theguardian.com/stateside to learn more. And listen wherever you get your podcasts, or watch on YouTube. That's theguardian.com/stateside.