What the U.S. Can Learn from Canada's Safety Net + The Real Cost of Private Schools and Clubs

Get a first look at the new Office Hours format, with more questions per episode. Starting next week, Office Hours airs exclusively on Mondays. Scott Galloway tackles whether a stronger safety net dampens ambition, what private schools and clubs cost the communities around them, Mayor Zohran Mamdani's economic agenda, whether America's affordability crisis is real, and the luxury he can't live without. Want to be featured in a future episode? Send a voice recording to [email protected], or drop your question in the r/ScottGalloway subreddit. Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪(201) 472-3656‬ 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

  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.

• 0:36Scott Galloway?

  Welcome to Office Hours with Prop G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to [email protected]. Again, that's [email protected] or post your question on the Scott Galloway subreddit and we just might feature it in our next episode. Question number one.

• 0:58Speaker 02

  Hi Scott, I'm Betty from Edmonton, Canada. At the Toronto Pivot Live event, Scott said that innovation basically stops the Canadian border. My daughter, who now lives in the US, argues that Canada's stronger social safety net kills ambition and makes people less hungry to innovate. My question is, how would you strengthen the US social safety net without dampening the country's innovation engine or ambitious culture? And second, do you think the US could adopt any parts of Canada's safety net without losing what makes its economy dynamic in the first place? Thanks.

• 1:34Scott Galloway?

  Okay, so just some data. The US and Canada spend about the same share of their economies on social programs, but they do it very differently. Canada mostly uses public benefits. The US leans heavily on private ones, including employer health, insurance, and pensions. On average, a family gets about $21,000 a year in support from Canadian provinces compared to about $12,000 from US state programs. When it comes to startups, the US massively outperformed Canada at almost any scale. Canada needs about 55% more investment to produce a single big startup success. Over the last decade, US metric capital exits totaled $2.6 trillion in the US compared to just $56 billion in Canada. And while some

• 2:15Scott Galloway?

  of that is misleading because of the population, it's still, on any level, dwarfs what happens in Canada. And the US produced more than 4,000 exits over 10 million. Canada had fewer than 200. The trade-off is security versus upside. Canada offers a stronger safety net that isn't tied to having a job. In the US, healthcare benefits are often tied to work, so losing a job or a startup can mean losing coverage, too. In some, America delivers bigger wins, Canada delivers more protection. So let's take a step back. Why do we do startups? Why do we want economic growth and exits? Economic security is a wonderful thing, but if you look at happiness and where people are the happiest, it's not only, it's not

• 3:00Scott Galloway?

  typically the countries that have the most upside. It's countries that oftentimes have a decent amount of upside and less real harsh downside. In other words, happiness is not only a function of what you can get or what you have, it's a function of an absence of anxiety of what can be taken from you. I think four, six of the 10 happiest countries are in Northern Europe, where there's still capitalism and upside opportunity, but there's some dignity knowing you're not going to be homeless or lose your house or be able to, you know, find healthcare for, for your kid. I would argue that in the US, we believe in winners and losers. And if you want to enter into kind of the Thunderdome of unlimited

• 3:38Scott Galloway?

  upside that is America, that we have actively decided to have a lower safety net. The question is, when that safety net is just a cement floor and it ends up being economically damaging and just inhuman. There's just no reason that people should feel like they risk bankruptcy if their wife is diagnosed with lung cancer, no child, one in five households with children are food insecure. We have, we now spend more money on ice than we spend on children. We have a healthcare system that results in extraordinary additional healthcare costs because of a lack of preventive care. We end up spending more on the homeless or the mentally

• 4:19Scott Galloway?

  ill because we don't have, I would argue, kind of a social safety net that is just not only empathetic, but it's just not smart in terms of preventing more expensive downstream solutions, whether it's incarceration or hospitalization. So I think that beyond the basic humanity and kind of the social safety net, I think America has entered into an environment where we're just not making investments that would pay off and actually reduce government expenditures down the road because we have become so harsh or cut so many programs in order to fund tax cuts. I think that almost everything we do in America is essentially a thinly veiled transfer of wealth from, from the poor to the rich and from the young

• 5:03Scott Galloway?

  to the old. And a lot of that comes at the expense of social safety programs. It does feel as if the war on the young continues in the United States. I think it was John Tudor Jones, I think, said that in the last 40 years, we've increased benefits for seniors by $900 billion a year and we've increased them for kids by $20 billion a year. That's just not, that's just not sustainable. And young people, 60% of 30-year-olds used to have one child in the house, now it's 27%. And I think a lot of that is because we have essentially made it more difficult for young people to be economically viable and choose to have a family. The child tax credit gets stripped out of the infrastructure bill, but the $120 billion cost of living adjustment for social security flies right through Congress.

• 5:47Scott Galloway?

  The D and democracy is working a little bit too well in the US, and that is old people vote and we keep, they keep voting themselves more money. It might be a society where there's a lack of empathy because everybody thinks that they're going to be rich so they don't need to worry about social programs or Veterans Affairs. But I think America has the money to create a more, I don't know, elastic or stronger social safety net, but chooses not to and allocates it to things that, in my opinion, just aren't economically productive, where they're taking our military budget from $900 billion to one and a half trillion in the last few years. That's just stupid. When you think about the asymmetry of warfare right now and where we should be spending money and not. And also tying health insurance to people's jobs creates a lack of economic mobility where human capital isn't allocated

• 6:30Scott Galloway?

  to its best source, creates tremendous strain. $12,500, I think it's maybe $13,500 per capita on healthcare versus $6,500 in other, the other six of the G7 nations who get better outcomes for half the price. So the monetization of certain aspects of social service, whether it's privatizing prisons, privatizing education, or monetizing education, and most specifically privatizing and monetizing healthcare, has resulted in this constant or this leakage or reallocation of capital. If you think of, if you think of the economy, loosely speaking, as three parties, the worker, the owner, the shareholder, and the consumer, essentially we've passed a series of laws and allowed for regulatory capture such that more power

• 7:15Scott Galloway?

  prosperity and money has leaked from the consumer and the earner to the shareholder. So that's great if you're already a shareholder, but if you are an entrant, things have just gotten harder for you. And I think a lot of that is a constant decision to keep capital gains tax lower and favor shareholders and corporate, keeping corporate tax lows in exchange for investments in things like education and infrastructure that benefit younger people and also a safety net. So I'm not as familiar with the social safety net in Canada and what we can learn from it. What I would say is that the primary difference, I get asked a lot, what's the difference between the UK and America in terms of success? And a

• 7:57Scott Galloway?

  lot of it is economic programs, but there's a decent amount of strong universities in Europe. The question is, why is the US so successful versus other nations? I think more about its success relative to Europe. And the answer I give a European audience is the following. You're the ones that decided to stay. America promotes a very risk aggressive culture, and that is the people who initially came here were risk takers. My parents came here, left their families, safety, and had nothing in the US and decided to come here with little money because they were risk takers. And then we, even within the US, the most successful companies with the biggest exits tend to be on the West Coast, where the riskiest of the risk takers kept, you know, go west, young man, and risk starvation or scurvy over

• 8:39Scott Galloway?

  the Rockies during a winter trying to get to the West Coast. And I just don't think it's any accident that within a seven-mile radius of San Francisco International Airport, you have exits that are greater than the GDP of Germany just in the last 10 years. So part of that risk culture is that the upside's greater and the downside is greater. I think of Germany where if you graduate from A high school in Stuttgart, you can, in your senior year or junior year, start a vocational program and kind of slipstream into working for Daimler Benz or Volkswagen and make 70,000 or 80,000 euros right out of high school. And then the housing there is less expensive.

• 9:19Scott Galloway?

  And also, there just seems to be more of a culture on or focus on how the middle class can live a good lifestyle. The example I use is a pedestrian one. There's beer gardens there that also have trampolines, so there's kind of something for everybody. So the downside risk of not getting a college degree, not doing a startup, not really going for it, is lesser because you can have a good life. So there's not, you know, and in addition, there might be a little less upside because we have a tendency to cut taxes when people get rich and America is so focused on money and the idolatry of the tech innovator. And the downside is lower. So it creates an environment where there's not as much risk aggressive behavior.

• 9:59Scott Galloway?

  And also, just culturally, I don't think they've had that DNA kind of burnt into them. So where are we in the US? We believe and actively promote in winners versus losers, which means more risk to the downside and more risk, if you will, to the upside in a good way. The question is whether it's gone too far, and the result is a series of expenses and anxiety and depression among young people because of a total absence of a social safety net or a reduction in it such that we can continue to fund this transfer of wealth from the young to the old. I would argue that it's gone too far. I do believe that shelter is a basic human right for Americans, or just more basically, I don't even like saying the term "human right."

• 10:42Scott Galloway?

  A lot, you know, there's just not enough rights to go around for what's deserved or enough resources to give every individual the human rights that we all like to think they deserve. What I would argue is in a country like America that is registered the prosperity it has, that just too much of it has been crammed into the people who are the most fortunate and at some point just don't need any more resources and those resources would be better allocated across a middle class that requires constant reinvestment in terms of infrastructure, lack of anxiety from healthcare scares, more money in terms of unemployment insurance, more investment in the young that will ultimately have a positive ROI. Sorry for the word "solid" here, but I think that the US, having a more risk aggressive

• 11:26Scott Galloway?

  culture, believing in winners and losers is a good thing, but at some point, it's become the Hunger Games. And what's most tragic about it is not that we don't take care, to the extent we should, of our less fortunate, but that we have the money to do it. We've just decided to reallocate it to people who, quite frankly, at some point just don't need it. I appreciate the question. Question number two comes from Clay Davis on Reddit. Clay says, "What do you think about the effects of private schools and private clubs? What are the long tail effects on a community having places for people of different economic means?" The question here is what happens when wealthy people increasingly opt out of shared institutions? So let's talk about private member clubs. Demand for private clubs is rising.

• 12:11Scott Galloway?

  About 60% of clubs say they grew membership in 2022 to 2023. The private club market hit 32 billion in 2024 and is on track to reach 59 billion by 2033, roughly 7% annual growth, outpacing most of the hospitality industry. So I'm a member of a lot of private clubs, and I would argue that the value proposition is mostly knowing if you're lazy, or not lazy, but you want to know somewhere you're going to go with a certain vibe, you don't want to worry about reservations. It's curated, the economic model creates capital such that they can invest in an infrastructure. And quite frankly, you curate the people that you want to be around.

• 12:53Scott Galloway?

  The bad news is more generally, there's a very ugly trend because what it's creating is that essentially wealthy people are opting out or sequestering from the things that give them an vested interest in the success of America. What do I mean by that? Do you care that TSA is on strike if you're flying private? Are you worried about crime when your neighborhood has cameras everywhere and crime has hit historic lows, which has in most wealthy cities and actually across America, crime is way down? Do you care about ACA subsidies going away if you have, well, you know, great insurance or just more enough income, as I do, that I don't need healthcare insurance? I can absorb a hit.

• 13:36Scott Galloway?

  Healthcare, health insurance is essentially a transfer of wealth from the lower and the middle class for people who can't absorb the risk of a big one or a big hit to wealthier people who can absorb. I try not, I don't even have oftentimes fire and flood insurance on my homes because I could lose one and still survive it. And 45 cents on the dollar in insurance goes to profits and administration, so technically you're giving an insurance company a dollar for 55 cents on risk-adjusted claims. So you're, you know, do you care that 40% of third graders can't read or write when your kid goes to a school? Then, on average, private schools spend $75,000 per student and the average public school spends $15,000.

• 14:16Scott Galloway?

  So a kid from a lower middle income household that goes to private schools is getting approximately $600,000 or $700,000 less invested in that kid over 12 years. And just think about that. Think about how better prepared, emotionally stable, secure, warm, well-fed, an 18-year-old coming out with a 3/4 of a million of additional investment through an infrastructure called primary education. So the private member clubs are essentially just at the tip of the iceberg of something of a dangerous, of a dangerous trend where the wealthy who have a disproportionate amount of control over our policies don't feel as invested in the success of America, so quite

• 15:00Scott Galloway?

  frankly, don't put as much pressure on the leadership to solve problems and invest in things that the benefits they don't accrue or don't, quite frankly, don't need. Let's talk a little bit about private schools. In the US, private school enrollment was flat or declining for years until around 2019, when it started rising again. From 2019 to 2020, private school enrollment grew about 3% to 4%. From 2020 to 2021, it jumped nearly 6%. But over the last 50 years, who goes to private school has changed. Middle income families are sending the kids far less, down almost by half, while wealthy families are enrolling at about the same rate as always. The result? A much wider gap between rich and middle-class students in private schools, see above, an

• 15:45Scott Galloway?

  additional 3/4 of a million dollars in investment. On the SAT, the difference between a lower middle income home kid in terms of scores is 130 points on average. Now, this is what's crazy. That delta is significant, but it goes parabolic when you compare the average SAT score of a middle-class student or a student from a middle-class home versus an upper income home. It goes to 250 points of difference. So if we were really honest about leveling up the SAT, if you went from a lower income home, we'd spot you 380 points to get you up to what is expected from that kid who's enjoyed an additional 3/4 of a million dollars in investment. Look, primary school is a complicated issue because you're talking about individual schools.

• 16:28Scott Galloway?

  And also, I think the populist argument is, let's tax private schools and reinvest that money in public education and start spending money, more money on public education. That's a fair argument. I would argue that also there needs to be, in concert, greater accountability across many of our institutions in, in public education, where a failing school, it shows that more resources aren't having any impact. So I think there needs to be greater accountability and, and stronger metrics across our K through 12. A lot of people push back on that and say that schools are now studying the test versus actually educating students. But they're generally speaking, the biggest problem is the following. America's superpower is our optimism.

• 17:12Scott Galloway?

  It's all our Achilles' heel because each of us believes that our kid is that remarkable kid where private or public schools can excel and do really well. And I can prove to all of us mathematically that 99% of our children are not in the top 1%. And so there's tremendous optimism that we and our kids will figure it out, and so we like lower taxes on rich people because a lot of us believe we'll be rich someday, and that our kid is an exceptional kid who's going to overcome some of the structural hurdles that face lower middle income families. I think it's become a huge source of anxiety when we have colleges that engage in this rejectionist bullshit, LVMH strategy of sequestering supply. We could dramatically expand freshman seats and provide more opportunity to young people.

• 17:55Scott Galloway?

  When we consistently transfer, you know, assisted lunch, I got assisted lunch and they're cutting that. Pell Grants, that's how I got through college. And guess what they're doing? I'll give you one guess. They're cutting that. And these aren't huge numbers relative to the amount of money we're spending on social security, interest on our debt, our military, what it's costing, the loss in revenues from tax cuts. So we're not only trading off the health and well-being of our lower medical, lower middle income households for continued tax cuts for the wealthy and corporations, it just wouldn't be that expensive to shore up many of these programs. We're talking about, you know, we're talking about just, you know...

• 18:38Scott Galloway?

  Sometimes a mouse of investment versus the elephant of what it costs to maintain some of these other programs which benefit corporations, the wealth and the wealthy. So, you know, what's to be done here? I think there needs to be more accountability and hiring and firing and closing and opening of schools in the public sector. But I do think you are going to need to probably tax private schools such that wealthier and middle income people decide to keep their kids and middle classes are doing this, I think for economic reasons, they have less disposable income on some discretionary purchase like a private school. And provide the resources and the accountability to level up public schools such that more

• 19:21Scott Galloway?

  wealthy people send their kids to public schools. Because what's the number one indicator of a success of a school? It's not resources, it's actually parental involvement. And when you have a dual parent household that's upper income, one or more of the parents has more time to be engaged in the school and hold the school accountable. That's the strongest indicator, just as the strongest indicator of your health outcomes is actually having an advocate by your side, asking questions, following up by other people in the healthcare industrial complex. An engaged parent in school has some downsides, and we all see these videos of the Karen giving the principal a tough time, a drop off. But it's that type of involvement that makes for better schools. So I think all roads lead to the same place. I think we need to have a more equitable redistribution of capital back into the middle class.

• 20:05Scott Galloway?

  That includes infrastructure for education, infrastructure for technology investments, and also putting more money in the pockets of young people, specifically during their childbearing years, such that they can relieve, be relieved of some of that anxiety and kids have a likelihood for a better outcome. And, and, you know, the same shot I had where I had assistant lunch, Pell Grants, you know, $400 a quarter tuition. So I think there are, there are solves here that aren't as expensive and aren't as complex as the incumbents would like you to believe to justify what are extraordinarily expensive tax cuts and investments in the military and corporate bailouts.

• 20:45Scott Galloway?

  So what is, my progressive argument is a redistribution of income into the middle class. The middle class is not a self occurring or a self healing organism, but at the same time, holding the public sector to the same account with metrics and willingness to close schools and fire teachers, the same, some of the same standards that private schools hold themselves to as do other organizations in the private sector. But again, very hard not to be accused of being reductive here because there are some school districts that do an amazing job, there are others that don't, and you kind of have to go, it's pretty situational. Anyways, appreciate the question.

• 21:28Scott Galloway?

  We'll be right back after a quick break. Support for the show comes from Odoo. If your business runs on five different apps, 12 browser tabs, and one spreadsheet that everyone's afraid to touch, it's probably time for Odoo. Odoo is an all in one business management software that connects every part of your business into one powerful, easy to use platform. So instead of wasting time switching between disconnected systems, your entire business works together in real time. Your team moves faster, your data stays accurate, and you can actually focus on growing your business. Let one unified system run your entire business. From the first opportunity to the final payment, everything works together in one place.

• 22:12Scott Galloway?

  Whether you're a small business or managing a large operation, Odoo gives you one flexible platform built to grow with you. Try today for free at Odoo.com/PropG. That's O-D-O-O dot com slash PropG. Support for the show comes from AG1. Back to school season is a wonderful time of year, especially if you're a parent. Moms and dads out there know what I'm talking about. The only drawback is that your kids will probably bring home colds, flus, and other bugs. While the school year is still young, you might want to give your own immune system a little boost. Enter AG1. Just one scoop and eight ounces of cold water in the morning can help you maintain energy, support gut health, and immune system all day long.

• 22:55Scott Galloway?

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• 23:06Speaker 03

  I've made it part of my morning routine. I mix it with cold water before my coffee and I've felt good since I started. And honestly, I like knowing I'm beginning the day with at least one healthy habit.

• 23:19Scott Galloway?

  AG1 can help you keep one thing consistent, high quality nutritional support every single day, no matter where you start your morning. For a limited time, save 20% on your first subscription order of AG1 Next Gen or AG1 Pro at drinkag1.com/PropG. That's drinkag1.com/PropG. Support for the show comes from Fora. There's a big difference between having an idea for a business and actually launching one. Fora bridges that gap by giving you access to the technology, partnerships, and training you need to start operating a successful travel business immediately. Fora is a modern travel agency platform designed for entrepreneurs who want to build and scale their own travel business without starting from zero. It combines technology, training, and supplier relationships into one unified system.

• 24:04Scott Galloway?

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• 24:42Scott Galloway?

  ForaTravel.com/PropG. Welcome back. Our next question comes from F. Sharman on Reddit. They say, "As a host of raging moderates, what do you really think of Mayor Zohran Mondani, both in terms of changing the economics of New York City and as a potential model for Democrats to learn from, both emulating and avoiding?" I get this a lot. It seems like, I don't know, I'm kind of like, I'd rather just stay out of it, just like I stay out of UK politics. Okay, so just some data. One of the things I don't like is, I think on an economic level, I think some of the

• 25:23Scott Galloway?

  DSA, if you will, wants to implement economic policies that are populist and will likely be popular in the short run, but in the long run, don't work. So for example, one of those things is freezing the rent. In June, the Rent Guidelines Board voted to hold rents flat, a 0% increase on nearly a million rent stabilized apartments starting October the 1st. Essentially, rent control or rent freezes are very popular in the short term because whoever's in those apartments feels very passionate about the fact that rents aren't going up and votes for the incumbent. The problem is the people who are most hurt by this don't directly connect the rent freeze with the fact that there's going to be less supply as developers aren't going to start new housing projects because they worry their upside is capped or that it's just not economically

• 26:08Scott Galloway?

  viable. So you don't miss what you don't have. So are there are tens of thousands or hundreds of thousands of units of housing stock that never come onto the market? So what rent freezes do is just transfer wealth from the 90% of people who aren't renting or homeowners yet to the people who are currently in an apartment that get to enjoy this rent freeze. De Blasio froze rents three times, but only ever on one year leases. This is the first on two year leases. The board's own research found operating costs for stabilized buildings was 5.3% this year, and a nonprofit lender found 32% of them no longer generate enough income to cover their debt up from 26%. So, look, the, I just don't think rent control works.

• 26:49Scott Galloway?

  I think it's a populist, short term transfer of wealth that ends, the whole ends up making rent more expensive for, for future renters. Regarding taxes, the million, the millionaire income surcharge died. Governor Hochul refused it. I believe a candidate, Mondani, knew it wouldn't go through. But the pieta tear tax passed in May, projected to raise over half a billion dollars a year. I am in favor of the pieta tear tax. No one likes a tax. It's going to cost me, I think, somewhere between 15 and 100 grand a year. I own a second home in New York. And I was in favor, publicly in favor of the taxes. I believe that an absentee owner who's wealthy, and this describes the people who are affected

• 27:34Scott Galloway?

  by this tax, I think it's fair for them to subsidize or try and pay a greater share of taxes than a nurse working at NYU Langone who has to spend 40% of her income on her rent. I, I get it. I, I think the 0.1% or the 1% have garnered a disproportionate amount of the spoils, so it's a tax I'm at a greater rate. Kind of makes sense for me. I actually think it's a very elegant way of implementing a tax on our wealthiest and most fortunate citizens. In favor, it's going to cost me money, I'm in favor of it. What I wasn't in favor of is the populist bullshit around doxing people, standing in front of Ken Griffin's apartment and making it sound as if he's done something wrong because of his extraordinary success.

• 28:16Scott Galloway?

  I believe my home and my name was on a list of publicly available data that was then reorganized and released and felt like doxing. It felt like they turned a progressive tax into a wanted poster. And I feel long term, this really hurts Democrats' ability to implement progressive taxes because the Republicans will make the argument that connects taxation with persecution. So I think that the mayor screwed up there. So just on some economic policies, city owned grocery stores, five stores for 70 million, promising a 30% discount on staples. The first one opens in Hunts Point at the end of 2027. This is an example of something that will, short term, very, very popular. Current grocery stores in, in New York operate at very low margins, usually operated

• 28:58Scott Galloway?

  by immigrants and they pay taxes. These stores will cost taxpayers money and be very popular in the short run, but eliminate a source of tax revenue. And generally speaking, the government isn't good at operating businesses like this cost effectively. I think a better investment of capital than investing in government run grocery stores would just be distributing money and food stamps to lower income households and letting them decide where they spend their money and letting people compete for their dollars. So I think this is another example of a socialist policy that will be popular in the short run, but long-term end up costing more people more money. With respect to antisemitism, the NYPD released hate crime

• 29:39Scott Galloway?

  data this week. Of 360 confirmed hate crimes this year, 205 targeted Jews. So 50% of the hate crimes are in a city where Jews make up 10% of the population. So hate crimes against Jews are over indexing at six X the rate of hate crimes against non-Jewish groups. That's up from 189 and it's about, so we're talking about one antisemitic hate crime every, basically every 25 hours. In July alone, 23 of the 33 confirmed hate crimes are antisemitic, 70%, up 53% from July of last year. Also, to be fair, anti-Muslim incidents also rose a much smaller rate or volume, 26 so far this year versus 16 last year. For scale,

• 30:23Scott Galloway?

  the next highest bias category, sexual orientation was, was 34. The other thing that I find disturbing or concerning about Mamdani is that I feel a lot of his rhetoric and beliefs and past activities sort of cross the line or blur the line between, I'm anti-Netanyahu, but I'm pro-Israel. I think a lot of people are pro-America but anti-Trump. I get that and I understand that. But I think sometimes the anti-Israel rhetoric bleeds over into antisemitism. And that is couching terrorist attacks against Muslims, attaching them to an ideology of right Christian, white Christian nationalism, which I think is fair. But when a Jewish

• 31:05Scott Galloway?

  man is stabbed by a man who's attached and clearly says he was motivated by jihadist ideologies, claiming that that's mental illness. When 11 people have been convicted by the International Criminal Court, Imam Dami makes a point of saying he would arrest the Jew, the one Jewish person on that list. You know, that gives Jewish people, I think, cause for concern. But I think of myself as a critical thinker and trying to be intellectually honest. There's other things I like about the guy. I think he's a fantastic politician. I, I just saw that he's planning to propose an increased expenditure to make New York greener with

• 31:46Scott Galloway?

  this massive tree planting program. I think that's incredible. As I said, the Pieta Terror Tax, one of the things I like about him and admire about him, he's action oriented. He took, he was sworn in and immediately started implementing things, many of which I don't agree with, but I appreciate his action orientation. So, look, it's a mixed bag. I think there's some very exciting things about the creativity and dynamism coming from the DSA and guys like Mamdani. I think you have to admire his action orientation. I think you have to respect his incredible political instincts, but using what I call anti-Israel and sometimes what feels like antisemitic ideologies, a litmus test for who he's going to endorse. You know, this, the three candidates he endorsed, he is a

• 32:30Scott Galloway?

  regional kingmaker at a minimum, the three candidates he endorsed for Congress. And it seemed to be the litmus test for endorsement is, well, okay, are you anti-Israel? That's not enough. Are you willing to call it a genocide? Okay, getting warmer. All right. Are you willing to, are you willing to show up to an anti-Israel where Ali on October the 8th, as Representative or soon to be Representative Chevalier is, okay, bingo, we have a bingo. You're, you have my endorsement. So, look, I don't, I want to give the guy a chance. I think it's important people rally around their elected officials. I'm not as triggered. I find that on, a lot of my friends find everything he does, find, you know, malice and demonize everything he does. I don't think that's fair. At the same time,

• 33:13Scott Galloway?

  I think there's some very troubling and ineffective ideology that will not pay off from the DSA that will serve as talking points for the Republican Party. We Democrats have an unbelievable ability to snatch defeat from the jaws of victory. And I think Representative Chevalier is going to be a star in the sense that the Republican Party is going to highlight some of her policies, which include no borders, no prisons, no incarceration. Literally, she's said these things. I'm worried about some of the policies. I think they are void of economic rationality and ignore history. At the same time, I understand that the DSA has basically appealed to a voting populace on the left that says, your rhetoric about

• 33:54Scott Galloway?

  capitalism just isn't working for us and your policies, you know, look what happened to Michigan. Dr. El-Sayed won the primary there because essentially the institutional support that his, that Haley Stevens had, Americans and voters have just had it with Democratic leadership and I understand that. So Mayor Mamdani, I wish him the best. I like some of the things he's done. I find other things irrational and sometimes a little bit troubling for me. But I want the guy to win. I appreciate the creativity and dynamism and youth that's coming from the DSA. And I think the answer here is that we need to leverage some of that creativity and diamond dynamism and those of us in a center need

• 34:39Scott Galloway?

  to do a better job of communicating a type of capitalism and policies that actually work and actually benefit people and aren't just Vaseline rubbed over a lens of continued income inequality and capture by our wealthiest Americans, which both Republicans and Democrats have engaged in. Very much appreciate the question. We'll be right back after a quick break. Our next question comes from a listener who emailed us. They say, total fan here. All right, thanks. A recent Economist article, downplayed affordability as a crisis, noting that wages for the working class and working poor have kept pace with inflation or better.

• 35:23Scott Galloway?

  Do you agree? My understanding is that the percentage of homeownership in recent decades has ranged between 16 and 70%. Is that still the case? Or are those 30% who don't own homes just coming to the sad realization they are in that 30%? Appreciate your thoughts on all of the above. So the article you're referring to is called America's affordability crisis is mostly a mirage. Published in late December, it claims the real wages have risen across much of the income distribution and purchasing power is still relatively strong, undermining the idea that Americans on average are dramatically worse off than previous generations. This is a direct quote from the article. "Real wages are close to record highs across the income spectrum, but the strongest of all, for the poorest, never has life been so affordable in America for so many." The argument there isn't much of

• 36:07Scott Galloway?

  the feeling of a crisis. It's driven by psychology, what people refer to as kind of a vibe session, people focusing on price levels rather than inflation rates and politics rather than actual deterioration and fundamental affordability metrics. So let's provide some more context. First off, wages. The Economist, it's sort of, there's a kernel of truth in there. According to the article, price levels are up around 25% versus before the pandemic, which means people are actually paying higher prices. But it also points out that nominal wages have risen by about 30% over the same period. Real wages means wages adjusted for inflation. And they've also recovered since the pandemic. Inflation adjusted pay today is slightly higher than 2019 and lower income workers actually saw faster wage growth. But that's,

• 36:50Scott Galloway?

  if you will, it's a bit misleading because it talks about the average. It doesn't reflect where the pressure actually is, which is housing. As the question points out, so it's some additional data, about 1/3 of US households spend more than 30% of their income on housing. For renters, it's basically half. Over the long run, housing has completely outpaced income. Since the mid 1980s, home prices are up 400%, while household incomes are only up about 250%. The typical home now costs about five times the median household income. That's near historic high. And regarding homeownership, rates have been around 60 to 70%. Today, it's around 65, according to the Fed. So yes, about 35% of Americans have always been renters. What's changed is who's priced out of owning a home, specifically

• 37:33Scott Galloway?

  young people, people under the age of 35, only about 1/3 of them own a home. And first time homeowners only make up, or first time buyers now make up barely 20% of home purchases and that's been cut in half. And the median age of a first time buyer is now about 40 years old. That's the highest number ever recorded. And some wages may be keeping up with inflation, but they are not keeping up with the price of entry into wealth. The things that cost, that have experienced the greatest inflation are the things that young people generally see as the way to start building wealth, start building a family, start getting ahead. And that is certification from college and then housing. Ends up housing is a form of birth control, that every 10%, housing prices go up, there's a 1% decline

• 38:15Scott Galloway?

  in birth rates. But what's really going on here is the following. So you could very easily make the argument that, and this has been made before, and Warren Buffett says the poorest person in America is now living a better life than the wealthiest person 100 years ago. Or maybe it's the middle class, average middle class person is, has a better life than the wealthiest person 100 years ago. And that's true. Netflix and Novocain are, are just incredible. And we have access to cheap calories, access to cheap entertainment. Netflix costs 30 cents an hour based on average usage. People, you know, I would, when I was 15, I wasn't taking Ubers and having Deliveroo and a lot of middle

• 38:57Scott Galloway?

  class families enjoy those types of things. But here's the thing, those arguments don't hold up in terms of actual happiness and satisfaction and purpose because our species is memetic. What do I mean by that? Happiness isn't, satisfaction isn't a function of what you have. It's a function of what you have relative to your expectations. And while the averages have gone up, at the 1%, things have gone parabolic. So seniors are 72% wealthier than the senior was 40 years ago. People under the age of 40 are 24% less wealthy. See above massive transfer. And when people are-

• 39:37Scott Galloway?

  Getting 105 notifications a day on their smartphone that they're failing because their boyfriend doesn't have a six pack, or they just haven't made $3 million trading ETH, they just feel depressed and angry. And to tell them that you're better off than the richest person was 100 years ago, that doesn't make them feel any better. What makes them feel like shit is constant reminders that everyone else appears to be killing it with their faux wealth porn that's been vomited on them all day long. And also, very fear criticism that there are some people making so much goddamn money, especially in big tech, and it doesn't appear to be impacting my life. All I worry about is it's

• 40:20Scott Galloway?

  harder for me to get healthcare. Getting a house seems unaffordable. Getting an education seems unaffordable. And yet, everyone around me, according to my phone, is in Ibiza, getting $10,000 tables to watch Black Coffee. And if you're a middle-class household, when people get angry, it's not because they don't have a job. They get angry when they have two jobs and they can't afford, you know, to go to Disneyland. So, yes, the data says that, on average, things are better and that there has been actual prosperity, wage growth that has outpaced inflation. But when people see this kind of extraordinary prosperity

• 41:01Scott Galloway?

  and wealth, and it feels like it's everywhere, but not really impacting them, they're unhappy. So just as Warren Buffett said, "The key to a successful marriage is low expectations." Our happiness and how people feel is a function of their expectations, and there's just no getting around it. The top 10% have, you know, basically taken or been on the right end of a transfer of somewhere between 50 and 90 trillion dollars from the bottom 90%. And even though the bottom 90 are still better off than they were 40 or 50 years ago, when their phone is telling them that the expectation is that everyone should be in the top 10%, and they see that lifestyle. I had never heard of Saint Tropez Mykonos or St. Bart's

• 41:45Scott Galloway?

  when I was 25. I went to my first vacation at Morgan Stanley was at Club Med, this cheesy one in Mazzolone. I thought it was the most fucking amazing thing I'd ever been to, because I didn't know about these other places. My expectations were much lower. So, expectations are unreasonable, in my view, and they do get to see how the 1% live. And the 1%, life has never been better. So, we're a memetic species. We're comparing ourselves to the other people. We're under the impression that the 1% are the 90%, and we're the 10% that are failing. And there has been a slow but steady decision to create policies that

• 42:28Scott Galloway?

  magnificently reward the most fortunate and most talented among us, and that the bottom 90 is just not keeping pace. Even if they're doing better, they're not doing as well as the top 10%, who they constantly compare themselves to because the algorithms are throwing it in your face. Anyways, very much appreciate the question. That's all for this episode. To submit a question for next time, email a voice recording to [email protected]. Again, that's [email protected], or post it on the Scott Galloway subreddit. This episode was produced by Jennifer Sanchez, Laura Janier, and Asher Schwartz. Our editor

• 43:12Scott Galloway?

  is Brad Williams. Kami Reek is our social producer. Drew Burrows is our technical director, and Catherine Dillon is our executive producer. Thanks for listening to the Prop G Pod from Prop G Media.