Racism is Costing Us All — with Heather McGhee

Heather McGhee, the author of The Sum of Us, tells us her definition of zero-sum thinking and how racist policy decisions have left us all worse off. Heather is also the chair of the board of Color of Change, the nation’s largest online racial justice organization. Follow her on Twitter, @hmcghee. (17:53) Scott opens with why he’s feeling optimistic at the moment. We also hear from a previous Prof G Pod guest, Joost van Dreunen on Netflix’s potential entrance into the gaming space (9:00). 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.

• 0:01Scott Galloway?

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• 0:48Speaker 01

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• 1:18Scott Galloway?

  Episode 76, The Atomic Number of Osmium, the biggest film of 1976. Rocky. Good news, there will be a Rocky 8. In this film, Sylvester Stallone fights bladder control. Go, go, go!

• 1:40Scott Galloway?

  Welcome to the 76th episode of the Prof G Pod. Did you hear that? We're now the Prof G Pod. What a thrill. Not sure what that means. Don't remember what we were before. But then again, then again, I don't remember what I had for breakfast. Anyways, in today's episode, by the way, this morning, no joke, I reintroduced the same two people again. I introduced them two weeks ago and sent another email introducing them again. Anyways, where am I? In today's episode, we speak with Heather McGee. Heather is the author of The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together. She's also the Chair of the Board of Color of Change. We discussed with Heather the definition of zero-sum theory,

• 2:24Scott Galloway?

  the economics of racism, and working towards solidarity. Okay, what's happening here at Prop G? We typically see the glass as half-empty, but not today. Not today. Sunshine coming to my ass, rainbows coming out of my ears. You cannot suppress the optimism. I'm the fucking Hallmark Channel today. Anyway, we are feeling reluctantly optimistic about the state of the world. Why? Why? Here in the United States, the FBI pulled two absolute gangster moves. That's right, G-men. That's right. It recovered the majority. It, as in the FBI, recovered the majority of the payment that Colonial Pipeline sent to Darkside. What a gangster name for a bunch of criminal fucking weak jerks.

• 3:08Scott Galloway?

  Anyways, for context, Colonial had paid 75 Bitcoins worth more than $4 million to Darkside. Federal investigators tracked the ransom as it moved through a maze of at least 23 different electronic accounts before landing in one that the FBI had secretly gained access to. Ooh, well, well. That's very exciting. This is, this is a great story. Something tells me we're going to see this on TV from a series from Dick Wolf. The FBI seized the Bitcoins, which were only worth 2.3 million cents. Bitcoin's price had collapsed in the intervening days. The FBI also announced over 800 arrests based on a long-running sting operation. For years, criminals had been using an encryption platform hidden behind the calculator app

• 3:52Scott Galloway?

  and cell phones procured on the black market. I use the calculator app. I do. Anyways, the entire network. Hmm, does that mean they're watching me? Are they watching me? That kind of turns me on. The entire network, codenamed Project Trojan Shield. God, these guys are macho. What do we name it? Trojan Shield! Anyways. It was actually a sophisticated sting run by the FBI in coordination with the Australian police. By the way, American and Australia, our bond is so strong. I think it's because we fought shoulder to shoulder in World War II. Love, love Australians. The project was used to intercept over 20 million messages in 45 languages and resulted in the arrest of at least 800 people. I think we already said that.

• 4:33Scott Galloway?

  In addition, the operation led to 700 house searches, seizures of tons of drugs, firearms, luxury vehicles, and 48 million in several currencies and cryptocurrencies. I think when the FBI or local authorities in any country recover that kind of loot, they should get 10% of it for an awesome weekend in Vegas. Who else could have done this? I'll tell you, no one, except for the US and its allies. Netflix couldn't have fucking pulled this off. Microsoft and PS5 wasn't going to go into the dark web and recover, not only recover ransoms, but go after the people, the perpetrators, and what was, I think, just brilliant execution. This is just such a wonderful moment for the good guys. Furthermore, Congress is continuing its attention on antitrust.

• 5:18Scott Galloway?

  That wasn't a great segue, but I'm excited about antitrust. Last Friday, a group of bipartisan House members proposed a package of five antitrust bills that are all aimed at limiting big tech's monopolistic and anti-competitive behavior. According to CNBC, the bills include measures such as restricting large platform companies from owning other types of businesses, which could mean that Google would have to divest YouTube or Amazon's spinning. Guess what? AWS, which I predicted for a while would be the most valuable company in the world by 2025, that is a pure play AWS, limiting future acquisitions made by big tech, maintaining certain standards of data portability and interoperability, and giving government antitrust agencies more resources by requiring higher fees for mergers valued at $1 billion or more. So the last one is a gimme. That's an easy one.

• 6:01Scott Galloway?

  It's the first three that'll be a little bit more difficult. I think that, look, the worm has turned. People are fed up. This seems to be a bipartisan issue. Everybody hates big tech. The right, they hate them because they believe that they're censoring or limiting free speech, which is bullshit, but fine. You know, my enemy's enemy is my friend, so let's be friends. With the right on this one and the left hates them for the job destruction, anti-competitive behavior, but I do think this is an opportunity to finally push back or do what government is supposed to do, and that is be a counterbalance to private power. One of the key steps to tyranny is when private power overruns the government. And with more full-time lobbyists from Amazon in DC than there are sitting US senators, and more people manicuring the image of Mark and Cheryl at Facebook, 900 people in their

• 6:45Scott Galloway?

  PR and comms department than there are journalists in the newsroom of the Washington Post, we have been overrun. As a matter of fact, there are about six times as many PR and comms people spinning us all into believing that these people are ethical, interesting people. Anyways, this is, we need to push back. And that is, it's not only the right thing to do, but it's pretty good self-preservation for the top 1% because in a lot of countries typically, especially in Central American countries, there's sort of a standard cycle. And that is wealthy people aren't necessarily bad people, but always serve their own interests as we all do. That's kind of a function of our species. We'll figure out ways not to pay taxes and figure out ways to use the government treasury to bail them out as we did in this latest round of massive stimulus such that they

• 7:30Scott Galloway?

  can slowly but surely control more and more of the economy. And guess what? The other 99% suffer. And at some point, the 99% go, you know what? We could double our wealth by either killing or getting rid of the eight biggest families. And they knock on the doors of the family that owns the brewery in the majority of Atlanta and say, hi, we're here from the people and you need to pack your shit and get out of here or we're going to kill you and your family. Wash, rinse and repeat. This continues to happen and it's going to happen, but it's going to take on different mechanisms and cadence in the US. I think you're already seeing it. I think a lot of these movements, they attempt to shame or go after powerful people are a function of, almost like the warning shots or the shots across the bow of a revolution

• 8:12Scott Galloway?

  coming saying, look, that guillotine, that fake guillotine they built in front of Bezos' house or man cave on the Upper East Side, that guillotine is going to start to look more and more real if the shareholder class doesn't acknowledge at some point that the sort of weaponization and massive corruption, legal corruption, what would the term for legal corruption be? I guess it would be cronyism. Anyways, paying lesser taxes, hiding, delay and obfuscation around regulation for their companies is just getting sort of out of control. CEO pegging from 50 times the average worker's earnings to 300. And I don't think of myself as like a whacked out crazed liberal. I'm whacked out and I'm crazed, but I don't think of myself as liberal. I'm just whacked

• 8:57Scott Galloway?

  out and crazed. Anyways, this is a good thing. We need some pushback here. It's healthy for the economy. The government is supposed to be a counterbalance to private power and it has been totally overrun. So this is really exciting. Okay, that's the end of a reluctantly optimistic dog. I hate my life, but I hate it less today. I hate it less. Let's take a look at what's happening over at Netflix. According to the information, Netflix is looking to hire an executive to oversee gaming. Axios also reported that a source familiar with the matter, I love that term, a source familiar with the matter, couldn't be familiar with my matter, you bitch. Anyways, according

• 9:41Scott Galloway?

  to this person close to the situation, they think of it as a smaller Apple Arcade. Apple Arcade is a series of free games included with Apple. I think it's called the Apple One subscription. It's potentially a baller move for Netflix, but they're going to have to get creative. If you think about Netflix, they've become an operating system for media. A lot of people just have Netflix and have cable anymore. They say, all right, outstanding content coupled with, coupled with this fantastic recommendation engine such that it figures out, it uses signal liquidity to figure out my preferences and recommend stuff that I will most likely like. And if they put that, if they put that massive investment or they took that fire hose of cheap capital towards game development and created a platform

• 10:22Scott Galloway?

  that was great at recommending, maybe even within games, different, I don't know, different worlds. I don't know much about gaming. I'm trying to reconnect with my 10-year-old son and he loves gaming, so I'm trying to play games. God, it's difficult. Anyways, this is a huge opportunity for Netflix, but they're going to have to get, again, creative.

• 10:40Speaker 02

  The question is not what impact will Netflix have on the game space. The question is to what degree will participating in the game space impact and change Netflix?

• 10:53Scott Galloway?

  That was Joost van Dreunen. Joost is, not only has he been on the Prop G pod, he's a colleague at Stern. He's also the author of One Up: Creativity, Competition, and the Global Business of Video Games. I think video games, it's just, it's one of those things where we are just, you're always just struck by how big a business it is relative to the attention it gets. It gets a lot of attention, but it's a gigantic industry. I think it's like 20 times bigger than the domestic box office industry. Anyways, Joost, Joost, just, Joost. Not entirely convinced Netflix has a chance at disrupting the game's industry.

• 11:28Speaker 02

  Unlike video, where it was really a pioneer early on, there exist quite a few apex predators in the game space already. So the incumbents like Nintendo and Sony and Microsoft, they've been working on cloud gaming, game streaming for years, invested billions of dollars into it. For them, it's already a component of their broader, you know, set of activities. So the success of something like Xbox Game Pass, right? But Microsoft investing $7.5 billion last November in an acquisition of Zenimax Media, you know, telling us that they now have, at least according to the latest, most recent numbers, 18 million subscribers.

• 12:12Speaker 02

  And then last week, they just announced during E3 that they are going to launch 27 new titles coming to the service. You know, that is a really high bar for Netflix to go against. So it's like, you can't really match that in either purchasing enough content of the same scope and scale and the same depth and credibility. And even if you could, which they can't, but even then, like, it's incredibly difficult to make that sing cohesively, right? To formulate a strategy and a personality as a platform that's going to be uniquely different enough to pull people away from other platforms.

• 12:52Scott Galloway?

  Okay, so Yoss is a bit of a skeptic here. His attitude is come on in the water is fine, that I underestimate how difficult a business this is. And he thinks that Netflix is going to run up against or walk into this, walk on the field here and find out the players are much bigger when you're down on the field than they look from the stands. So, okay, Yoss, what should Netflix do?

• 13:12Speaker 02

  If I, if I were to run the Netflix game division, what I would do, very simply put, is to take lots of positions in specific types of studios and become more of a venture fund. And thereby, you know, figure out what's going on in the market, figure out where creativity really comes from, and use that as a way to gradually build up a credible portfolio. That's going to be very difficult. Don't be too exuberant and run it like a maniac. Slow it down, learn the space, really do your due diligence, earn your credentials. And you don't really see that in other tech firms.

• 13:53Speaker 02

  They still think very much of it as something where you could just buy a bunch of stuff and be done with it.

• 13:59Scott Galloway?

  Again, that was Joseph van Druin, the author of One Up: Creativity Competition and the Global Business of Video Games. He's also probably one of the premier scholars on the sector of video games. And it's interesting what he's saying. First off, I think you have a lot of outsiders, whether it was, remember the Japanese came in and bought Columbia Pictures, or hedge funds going and buying MGM? Typically speaking, people who kind of roll into Hollywood with a lot of money leave with less, except for Amazon, who has so much money, they can wallpaper the Hollywood Hills with money and it doesn't matter as long as they can sell more paper tiles than the rest of the 49 states. I'm especially happy with that metaphor. I just thought of that.

• 14:43Scott Galloway?

  Sometimes, sometimes the edibles kick in and the shit just works. It just rolls. By the way, I haven't had an edible in at least like 72 hours, so I don't think that was it. So you also have, what I thought was interesting in his comments, was that he's recommending kind of the VC approach, and that is place a lot of bets and see what pops up and what It works. I personally think that HBO should get into gaming. I think the most extendable franchise that hasn't been extended, when I look at what they've done with Marvel, I was watching Loki last night with my kids. I can't stand Marvel. I can't stand superhero movies, but the production values and extendability of every character on The Avengers and Pixar, and gosh, look what they've done with Star Wars. Ashoka is my new hero. Ashoka,

• 15:27Scott Galloway?

  played by Rosario Dawson. Anyway, I think the most under-leveraged franchise right now is Game of Thrones. I gotta think there's just like 10 different series or video game franchises out of that. I also think Sopranos could be an interesting video game series, but HBO, oh my gosh, Game of Thrones, Prince of Dorne, Pedro Pascal. Oh my God. I kill you or I fuck you. It's Dorne one or it's Dorne two. I don't know what accent that is. Anyway, HBO Game of Thrones, I think that is the franchise here that could build the next multi-billion dollar set of ancillary or new programming and also video games. But then again, I don't know what Yost would think. Stay with us. Stay with us. We'll be right back for our conversation with Heather McGee.

• 16:15Scott Galloway?

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• 18:34Scott Galloway?

  Welcome back. Here's our conversation with Heather McGee, the author of The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together. All right, Heather, where does this podcast find you?

• 18:44Speaker 03

  I'm in Brooklyn, New York.

• 18:46Scott Galloway?

  Brooklyn with all the other cool kids.

• 18:48Speaker 03

  No, they've left.

• 18:49Scott Galloway?

  That's right. That's right. So let's bust right into this. Can you walk us through your definition of zero-sum theory?

• 18:56Speaker 03

  Yeah, so for me, I'm a person who has worked for a long time in economic policy. And the zero-sum in my world is a worldview that sees that instead of us all being on the same team in our economy with us wanting all the players, scoring as many points as possible to promote economic growth, this lie that we're actually not on the same team, that there's an us and a them, and progress for them has to come at our expense. And particularly in the American economy, that's been seen through a racial lens, that progress for people of color has to come at white folks' expense.

• 19:37Scott Galloway?

  Does it, let me ask you this, does it work both ways, though? Do you think that there's a fear that people coming out of college also see it as a zero-sum game? That there, that identity politics play into this notion that any sort of progress against this will come at the cost of another group?

• 20:00Speaker 03

  So, the zero-sum that's identified in the social science research that I reference in the book is really, I think, actually, just that, right? That it's more often a worldview held by white Americans that sees racial justice, progress for people of color, sometimes even just the presence of people of color, as necessarily coming at their expense. Whereas, we know that, on pure economic terms, the opposite is true, right?

• 20:31Scott Galloway?

  Yeah.

• 20:32Speaker 03

  McKinsey says the racial wealth gap is costing the economy a trillion and a half dollars. Citigroup, all the racial economic divide, 16 trillion over 20 years. And that makes more intuitive sense, right? If you have so many of your players on the sidelines not able to score points because they're saddled with discrimination and debt and disadvantage, you know, your team is not going to be as successful. But there's the "we're not all on the same team" fallacy that's holding our entire economy back.

• 20:57Scott Galloway?

  It does seem as if it's kind of coming down to this confrontation, where there's the white patriarchy that says, you know, "The world has worked well," or "fairly well," under the auspices of some sort of white patriarchy, and that any progress by non-white patriarchal cohorts is going to be bad for us and bad for everybody, which doesn't make sense, right? If young people, which are increasingly less white, less heteronormative, don't succeed, our society's not going to succeed. What has led to this, this zero-sum game thinking?

• 21:33Speaker 03

  You know, I asked that question, right? Because I didn't want to naturalize it. I didn't want to think, oh, that's just the way people think, right? And, and what became clear to me in my research for the book was that this is all about storytelling. Everything we believe comes from a story we've been told. And so I asked myself, you know, who's telling this story? Who's selling it for their own profit? And whose interest is this story? And as it turns out, it really is about the people, as you say, Scott, who are, you know, kind of the manifest winners of an unequal society, who have really marketed this idea to people in the middle and working classes to try to get them to ally with their race

• 22:18Speaker 03

  instead of their class. And that's actually been the story since before our nation's founding, when a plantation colonial elite sort of broke the burgeoning alliance between indentured servants, who were white skinned, and black African slaves and indigenous enslaved people by basically selling this idea of whiteness as this other thing that people could aspire to that made them feel better than the person, you know, tilling the soil right next to them who had darker skin. And so it was, I'm going to sort of ally myself with my race over my class. And, you know, that was a very kind of historical moment when we started seeing those white

• 23:00Speaker 03

  skin privileges get codified into law for the first time in the early 18th century. But of course, it's relevant today when you look at the politics of today, right? Of this sense of, you know, Donald Trump, for example, as a, someone who was really loved to sort of market himself as an aspirational figure to the white working class, pointing his finger at, you know, black people and immigrants and, and, and saying, you know, they're to blame for your problems, but stick with me. And of course, all they really got was, you know, some fun rallies and a massive tax cut for people who had way more money than them, or way more money than they would ever have.

• 23:41Scott Galloway?

  Do you think this is a war between races or a war between economic classes? Or are the two inextricably linked?

• 23:52Speaker 03

  You know, there's a line in my book when I'm talking about the financial crisis and how, you know, for me, I spent the first half of my career working on issues of financial regulation and, and I had this sort of front row seat to what felt so clearly to me like it was a problem of discrimination, you know, explicitly targeting black equity-rich communities with subprime loans that were more expensive than they even qualified for.

• 24:17Scott Galloway?

  Yeah.

• 24:18Speaker 03

  And that that sort of spiraled out of control. And so I, but often people say, well, it was really about greed, right? It wasn't about racism. It was about greed. People were printing money. Of course they did it. And in the book, I say, well, what is racism without greed? Right? In that history, you, you have the very idea of racial categories coming to justify an economic model of, of exploitation and chattel slavery. And so it is hard to disentangle class and race or racism and greed. But ultimately, I think, if your question is about today, sort of in today's politics, what is really active? I would say that if I look at who is really benefiting from this zero sum story, these

• 25:03Speaker 03

  dog whistle politics, the story of racial resentment, you know, the, the latest panic over cancel culture, identity politics and all of that, like, follow the money? It's people like Rupert Murdoch. It's, you know, people who are extremely wealthy backing a right wing economic agenda and using racial panic and racial grievance to market that agenda to the majority of white people who actually need universal healthcare and childcare and paid family leave and an industrial policy and new good jobs and, you know? And so I see them as, it's like racism is the tool to further an economic agenda.

• 25:43Scott Galloway?

  So when you look at, I think of it like you, or I look at it through the lens of economics, Hispanic and black households average net worth around 20 or 25 grand, white households 160 grand. And you look at this and you go, okay, there's just economic apartheid in our nation. And that's got to be just an amalgam of different things come to bear to create one cohort that on average has an eighth of the wealth, which is translates to opportunity, security, absence from stress. What are the, I wanted to see if we can disarticulate the problem before such that we can better craft solutions.

• 26:24Speaker 03

  So for me, wealth, which exactly Scott, is the thing. Like your paycheck's a paycheck, right? The income gaps are narrowing, education gaps are narrowing. It's about wealth. But see, wealth is where history shows up in your wallet. Wealth is about compound interest on, and in this case, really explicitly racist decisions made long before most people today were born. So that racial wealth divide you talked about, a black college graduate has less wealth on average than a white high school dropout. So that helps you. Okay, so maybe it's not about education, right? Maybe it's not about income. Maybe it's about intergenerational wealth and the opportunity that comes from it.

• 27:09Speaker 03

  And then you look at history, and I loved going back into this history and telling it in my book, how did we get that wealth in the first place? Where did the sort of white middle class come from? You know, it actually came from massive deliberate government investments in wealth building, in public policies that, you know, were born of the crucible of the Great Depression and the New Deal that said, you know what, we're going to build millions of units of affordable housing. We are going to give the working class something they'd never dreamed of, which is a mortgage and a no to low down payment opportunity to own a home. And the federal government is going to subsidize all of that.

• 27:48Speaker 03

  And in the maps that we draw and in the contracts that we require, even of private developers, it will be racially restrictive. Literally drawing maps of the country, coding it by how ethnic and racialized the community is and saying to the black and brown areas, do not lend and saying, we're not going to subsidize these developments, Levittown, et cetera, if it is not racially exclusive. Caucasians need only apply, even in places that weren't segregated. So when you have that massive investment in economic security and asset building that then compounds, right, the GI Bill, racially neutral on its face, not like redlining and the exclusive

• 28:32Speaker 03

  covenants, but those benefits for returning GIs, of which there were tens of thousands of black ones, you know, was filtered through higher education, free government grant to college, highly segregated educational sector, mortgages, no down payment mortgages, highly segregated mortgage market. And so it's really about that sort of window of time, honestly, like the 30s, 40s, 50s and 60s, when most of the wealth that is today operative. It's the difference between graduating from high school and finding out that an uncle who worked at GM had a pension that helps to pay for your state college, right? I mean, it's like that simple thing. It's not like, when I talk about wealth, I'm not talking about millionaires and billionaires. I'm talking about that little bit of intergenerational

• 29:16Speaker 03

  wealth. And so much of it was fixed at a time of massive middle class expansion where everything from, you know, the way that those unionized jobs were often locked black folks out, right? The homeownership locked black folks out, higher education at that time locked black folks out. And so what my book tells the story of is what happened to that American dream, that sort of middle class prosperity, the idea that I talk about in terms of the public pools, just the sense of public goods, right? The idea that it's the government's responsibility to create these foundations for a decent standard of living for people once. The beneficiaries became all Americans who were contributing to our prosperity and not

• 29:59Speaker 03

  just white folks. And that happened in the 60s. And then you saw this turn away from that model. Then we started making college something you had to pay for in tuition, not free. Then we started deregulating the financial sector. And so you could get a loan at any interest rate. And we started stagnating the minimum wage. And we started lowering taxes on the wealthy and corporations and not investing as much in public goods. And for me, the metaphor that I use is the drained public pool, right? What happened in so many communities across the country, once those lavishly funded public swimming pools were integrated, because they were usually segregated, is that many towns and cities just drained their public pools. And for me, that has become a metaphor for what

• 30:43Speaker 03

  happened to create the inequality era for a more diverse society, as opposed to when we had, honestly, the kind of middle class security that Donald Trump and the like, you know, were hearkening back to when they said, make America great again. There was sort of an economic common sense about that. But they want a lavishly funded public pool, sort of for whites only.

• 31:04Scott Galloway?

  It seems as if we were, and tell me if you agree with this, it seems as if we were making progress. And then the Great Recession and the housing crisis was especially hard on communities of color. Is that, would you agree with it? And if so, why?

• 31:19Speaker 03

  I completely agree. I think the Great Recession and the financial crisis is a wound that, you know, we just, we haven't even diagnosed it, right? Like, people mostly have sort of moved on. And yet, the homeownership rate among black families has not recovered. The homeownership gap is 30 percentage points. It's higher than it was before the Fair Housing Act. And honestly, of all the chapters in The Sum of Us, the one that I care the most about is the one where I sort of re-narrate the story of the financial crisis as I saw it from my eyes and from the eyes of people who were working on the ground five, eight years before the word "sum prime" was a household word. And where we saw where these mortgages

• 32:01Speaker 03

  were being tested out. It was in black neighborhoods where people had owned their homes despite everything, and were relentlessly marketed these

• 32:12Speaker 03

  Deregulated financial instruments that had no correlation to their credit score, right? It was sort of, you just were marketed these loans. And in fact, the majority of subprime loans by 2007 had gone to prime credit score holders. The racial gap, three times is likely, if you were black, to have a subprime loan marketed to you than if you were white, even with the same credit score. A vast majority of these subprime loans in the early stage were refinances, not, you know, us putting people into houses that they couldn't afford, which is

• 32:51Speaker 03

  kind of the conventional wisdom. And so if you have that kind of testing out of what would end up being this like massive moneymaker in the communities that were the least protected and the least respected, then the wheels came off, right? Then it was like, oh, my gosh, look at how much money you can make if you can sell this sucker a nine percentage point refi instead of three, you know, which is printing money. And if you can use securitization to do the, I'll be gone, you'll be gone and keep passing the buck. So that's for me, the sort of untold story of how the financial crisis sort of got away from policymakers, because I sat in meetings

• 33:33Speaker 03

  where there was that idea that, well, yeah, but maybe they shouldn't have been able to afford those houses in the first place. And they were risky borrowers when that was often not the case, right? So, and that it was the loans that were risky and not actually the borrowers. But it was, it was in many ways, kind of racial stereotypes that blinded the people in power from doing something before it was too late. So, you know, I mean, I think the sort of elephant in the room here is that, you know, we had this financial crisis, we had a foreclosure crisis, all

• 34:08Speaker 03

  You know, the foreclosure crisis, the Great Recession, happened when we had our first black president. And the response to that crisis was really, in many ways, hemmed in by the racial politics of the time. Meanwhile, that was also the era in which the right-wing media really coalesced around this narrative of racial resentment, that government had been the enemy for a long time in the right-wing narrative. But now, it had a racialized boogeyman explicitly at the top. Instead of just the welfare queen and government giving things to poor black people, it was actually like, oh, no, now they've got the power. And this is really scary.

• 34:49Speaker 03

  And I think that paved the way for Donald Trump.

• 34:55Scott Galloway?

  As a segue to solutions, it strikes me, and again, I'll put a forward thesis, and you tell me if you agree, and if so, what can we do about it? It strikes me that whenever you offer a solution that is race-based, whether it's affirmative action, or whether it's reparations, it evokes such an emotional reaction that rather than focusing on whether you're right, you can't be effective because it just creates such dissent. Are there better ways to approach it, to talk about affirmative action that is economically based, or UBI, as opposed to reparations? I'm trying to get to, how can we be effective and not just right here?

• 35:34Speaker 03

  No, I think that's the right question. So, I think that targeted universalism has its place here. Because of 50 years of drained-pool politics, the plurality of American families don't have what they need to make ends meet. Before the pandemic, 40% of adult workers were paid too little to meet their basic needs for things from housing to food. You've got a lot of people with a lot of needs. And so in that mentality of scarcity, it is hard to talk about, oh, we're just going to give money to these people. Right. And that's why I think it's important to refill the pool of public goods for everyone, but to recognize that we're not all standing at the same depths.

• 36:18Speaker 03

  And so that's why, you know, something like Baby Bonds, which is, you know, an account for every child born, but where the government cedes the money, you know, in a progressive manner, based on family wealth, not just their income, but their wealth. And then you really get at the historical compounding effect of, of the denial of asset building policies over the 20th century. That's something that I think could pass in our current politics and should.

• 36:50Speaker 03

  You know, this is just the basic stuff, right? It's wealth, it's homeownership. We've still got a massive homeownership gap in this country by race because of public policy. And what, what does it really come down to? It comes down to the down payment, right? Do, am I sitting on a chunk of change that I can use to fund, you know, my, my, my first home? And for black, young people and young families, the answer is undoubtedly no. And any chunk of change I'm sitting on is actually going to pay down student debt because we drained the pool of public college so that now we have to go into debt to pay for college. Right? So I, I think that, you know, there are proposals in Washington to do, again, a sort

• 37:32Speaker 03

  of wealth-based down payment refundable tax credit that would help first time home buyers with a down payment. That would really make the difference. And that's the kind of thing we used to do, right? There were so many now no down payment programs for, you know, white working class folks throughout the first half of the 20th century.

• 37:55Scott Galloway?

  Where it's two or 3% instead of 20% or something like that, right?

• 37:58Speaker 03

  Exactly. You know, Freddie Mac found that there are 2 million black millennials who have the income and the credit scores to be homeowners. And what are they missing? Largely the down payment. So I think we need to look at those wealth building things. And I think we need to talk about reparations and, and race-based policies. Not through a zero sum lens.

• 38:20Scott Galloway?

  Mm hmm.

• 38:21Speaker 03

  Right? There's this weird like purse clutching and wallet clutching that happens when we talk about reparations. That doesn't happen when we talk about F15s. Right? Right? It's like somehow, you know, this money is going to come directly out of your pocket and go into the bank account of your black neighbor. Whereas what this really is about is seed capital for the America that's becoming. Right? The descendants of a stolen people gave this country the math to return the moon landing, gave this country open heart surgery and the furnace and the, I mean, like all of these incredible things with very little wealth, with nothing but in fact,

• 38:59Speaker 03

  multi-generationally stolen wealth so often. And I think we need to start seeing as the economists and people like McKinsey and Citigroup are starting to make the case for, which is that we actually can't afford these divisions any longer. It's costing us all too much. And you know what? It wasn't individuals and banks that made up the system of redlining. It was the federal government. And so the government has to pay to redress those harms. It's not about you or me or any individual, bad white person thinking bad thoughts about black people. It's about the government that frankly, generations

• 39:41Speaker 03

  of black people paid into and have never gotten, you know, the real promise of this country's prosperity they've given and given and given to.

• 39:51Scott Galloway?

  Coming up after the break.

• 39:53Speaker 03

  There are all of these different ways in which our really backwards and outlier in terms of our PR OECD countries' approach to supporting the family unit is costing us tremendously.

• 40:08Scott Galloway?

  Stay with us.

• 40:15Scott Galloway?

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• 41:59Scott Galloway?

  So I was raised by a single mother, a single immigrant mother, and people always said, people say, well, it must have been hard, you know, not having your dad around. And I said, well, what was harder was not having any money. And, and there's a communities of color over indexed in terms of households had by single parent.

• 42:21Speaker 03

  Yeah.

• 42:22Scott Galloway?

  And what, to me, that's, in a certain extent, Dan Quayle was right. I think kids are better off with two parents. It doesn't matter what sex they are. It doesn't matter.

• 42:31Speaker 03

  They're biologically connected to your kid. Just have a couple of adults in the room.

• 42:35Scott Galloway?

  Yeah. It's zone coverage, right? Having two people with two incomes who partner to help, you know, get this thing, get this thing out of the house and be a successful, loving citizen. It strikes me that, that single parent homes, it's just not as good for kids. It's a problem. And having been raised as one, any, any thoughts there about legislation or changes in terms of perspective as zeitgeist in communities?

• 42:57Speaker 03

  So I think it's a really, I'm glad you're asking this question. I too was raised by a single mom. I mean, my dad was around, but they were divorced. And having a single parent, first of all, having parenthood be this major predictor of a dip into poverty is a policy choice, right? We don't have a family policy in this country. We don't have paid family leave. We don't have universal childcare. We don't have universal healthcare, right?

• 43:24Scott Galloway?

  Yeah, earned income tax credit.

• 43:26Speaker 03

  Right. So we just don't have public goods around the most important public good, which is the family, right? We just don't have that. And, and I didn't even include this in my book, but a big piece of why we don't have that was, you know, racist opposition to universal childcare, for example, as being another sort of front in the, the march towards integration, right? The Southern Democrats were opposed to it when it was proposed by Nixon. So there are all of these different ways in which our really backwards and outlier in terms of our peer OECD countries' approach to supporting the family unit is costing us tremendously. So there's that piece of it.

• 44:09Speaker 03

  I think you're exactly right to say that, you know, basically, we know how much it costs to raise a kid. And if employees are not going to pay enough, the government is not going to, you know, provide any of that kind of benefit or stability, then we're going to reap the, the cost of that as a society. You know, it's interesting, at my organization, Demos created this tool to model different

• 44:37Speaker 03

  Changes in policies or sort of different, basically statistical inputs on the impact of the racial wealth gap to try to test is the problem of the racial wealth gap, one of education, one of income. And we did test, is it a two-parent household problem? Right? So what we found was that, because the typical white, single parent has 2.2 times more wealth than the typical black two-parent household. So, you know, it's, this is one of those places where I'm really glad we're having this conversation because we tend to, in our very individualized American worldview, look for the individual response.

• 45:16Speaker 03

  And I think now, 50 years into the inequality era, where we're seeing just so many ways and was trying to put everything on the shoulders of the individual family, it's just not adding up anymore. And so honestly, I'm shocked at the array of public policies that have been proposed by this administration that could do so much to make it easier for every family, black, white, and brown, to survive and thrive. And I'm disappointed that there's sort of universal objection to it by a party that, you know, doesn't have any other answers for what we're going to do about climate change and jobs and inequality

• 45:56Speaker 03

  and, you know, families that need both parents working and poverty wages. They just don't have answers. And my sort of parting idea in The Sum of Us is that if we can come together across lines of race, if we can reject the zero-sum lie, we can start to unlock these solidarity dividends, which are gains that we can only achieve by coming together.

• 46:20Scott Galloway?

  So I usually end and I ask the guests to give advice to their 25-year-old self. And I want you to do that. But what I also want to ask you is that, so our listenership, excuse, young, very male, and very white. Our listenership makes a room more diverse by leaving it. And but I like to think, I'd like to think, and I'll include myself in this group, that we want to be allies in this fight. We want to be allies.

• 46:47Speaker 03

  Yeah.

• 46:47Scott Galloway?

  So what advice would you have for us, if people say, you know, I want to be part of the solution, I want to be an ally?

• 46:53Speaker 03

  Yeah.

• 46:54Scott Galloway?

  Because you do get mixed signals. Silence is violence, or you should just listen. So one, advice to your younger self, and then advice to listeners who want to be part of the solution.

• 47:05Speaker 03

  Okay. So let me take the second one first.

• 47:10Scott Galloway?

  Sure.

• 47:11Speaker 03

  You know, in many ways, I wrote this book for your listeners. Some of Us is about what racism costs everyone, and about how white people and white men have skin in the game to benefit from racial equity. It's not a zero sum. And that's something I'd never heard in all the anti-racist teachings I'd been given. For me, I think I am not on the, in the camp of white people shut up about race. And I think that camp is often like over-indexed on Twitter than it is in real life.

• 47:47Scott Galloway?

  Yeah, I think that's right.

• 47:49Speaker 03

  If you go into the DEI committees of any large corporation, you have lots of women of color saying, where are the white men? Please come in and be part of this committee. Black people have never made massive progress without white allies and white co-conspirators every step along the way. And so this book is an invitation. In terms of to myself, you know, it's funny, when I was 25, I had just had my, my first big legislative defeat in my life as a policy advocate. It was the bankruptcy bill of 2005, which, you know, sort of written by the credit card lobby to make it harder for people to

• 48:33Speaker 03

  get a second chance after bankruptcy. And I would say to that person, every incentive in your world wants you to look away from race and to...

• 48:48Speaker 03

  Think about it in purely economic terms. And you won't get promoted by being the race girl, right? You'll get promoted by being the smart black woman with the statistics. That's what the society is telling you to do. But the truth is right there in front of your eyes, right? That, that it is often racial stereotypes that make up the common sense for bad economic policy decisions. And I wouldn't really learn that or allow myself to see that for another decade, decade and a half. But ultimately, I feel like I understand much more what's going on with the policies and politics that are driving inequality now that I see how racism is at the wheel.

• 49:33Scott Galloway?

  Heather McGee is the author of The Sum of Us: What Racism Costs to Everyone and How We Can Prosper Together. She's also chair of the Board of Color of Change, the nation's largest online racial justice organization. Heather has testified in Congress, drafted legislation, and developed strategies for organizations and campaigns that one changes to improve the lives of millions. For nearly two decades, Heather has helped build a nonpartisan think and do-tank demo, serving four years as president. She joins us from her home in Brooklyn. Heather, thanks for your good work.

• 50:05Speaker 03

  Scott, thanks so much for this conversation.

• 50:18Scott Galloway?

  Algebra of happiness. After achieving a certain level of success and emotional and mental fitness, I think of myself as a generous person, and I like to help others. And I realize what incredible virtue signaling that is. But the reason I do it is it makes me feel powerful and it makes me feel successful. And what I've noticed lately is that I don't like asking others for help. And that is, I never want to, I want to be the one helping others. I want to be the person they call when they need something, or they need advice, or they need, need money, or they, I like being in a position of being powerful and sort of unassailable, and I'm somewhat reticent to reach out and ask others for help. And what that means at the end of the day is that you aren't as good a friend as you

• 51:02Scott Galloway?

  could be, in that you are a bit of a narcissist and an egomaniac. And what do I mean by that? And that is, if you want to be a real friend to somebody, you want to have some equivalence in the relationship. And they're going to be less likely to ask you for help if you never asked them for help. And to not reach out to people and ask for their advice and ask them for help when you need help, and we all need help, and we all need advice. But it's also generous. It's also giving. It's also, people want to help you. If you have people in your life that you're more successful than, or you have greater emotional or physical fitness than, and you're in a position to help them, at some point, they want to help you. And

• 51:44Scott Galloway?

  if you don't ask them for help, if you don't give them opportunities to enter your life and to help you, they're going to stop asking you for help because they're going to feel, not like your friend, but they're going to feel sort of pathetic, and they're going to feel subservient to you. So if you want to be a good friend, if you want to be a good friend, if you want to be a good family member, if you want to be a good brother, if you want to be a good sister, simple, ask people for help.

• 52:13Scott Galloway?

  Our producers are Caroline Chagrin and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to The Prof G Show from the Vox Media Podcast Network. We'll catch you next week on Monday and Thursday.

• 52:33Scott Galloway?

  Oh, isn't it great that Jeff Bezos is going into space? I love it that a man with $150 billion, who gets a $10 billion subsidy from the government for his rockets, decides to auction off a seat next to him for $28 million and then try and wrap himself in the glow of being a good guy by donating it to charity. Here's an idea. I think we should paint on the side of the rocket, not an American flag, but something that just says, "Pay your fucking taxes."

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