Trump’s Economic Playbook Is Failing

22:46Scott Galloway:Yes. It creates a, saving for a home is a fantastic motivator and guardrail. And I worry that a lot of people your age have just given up, just totally given up on that notion. There's like, there's no way I can find the 20 % I'm going to need. And also, not only is it an incentive, it's like a prerequisite for having a kid. If you're going to need, you're going to need a place to live and it's going to need to have another room or not but that's i mean it's it's i mean it's it seems very very simple and logical like not only is it a motivator it's like you need to have the ability to get your hands on property and make your life make it easier to actually build a family the other thing you mentioned there is like this idea of the vibe session which has been a really interesting point that Kyla Scanlon came up with, our friend Kyla, and it's become very popular.

23:42And it points to this idea of like, there's a divergence between the way that the economy is actually doing versus the way that people feel about the economy. And that is an interesting and fair point. But where it gets into trouble, I think, is when people start to say to voters and to consumers, like, you just have high standards. Like, you think that your life is bad, but your life is actually good. Trust me, I'm looking at this data here, and I can tell you, and I'm going to wag my finger at you and tell you, your life is actually good. And in the world, I mean, if we're talking about the world of politics, which we are here, that doesn't work.

24:26Like, You can't just tell someone that their life is actually great and then point at a GDP growth chart and then point at the price of a smartphone today versus the price of a smartphone 30 years ago and say, see, your life is good, actually. Because that's not giving nearly enough credit to the person themselves, who's probably evaluating all the things in their life, and they're making the call themselves. Actually, this isn't working out for me. This doesn't work for me. And you can make the argument, yeah, but you can order Uber Eats and you couldn't do that 30 years ago. It's like, well, is that really changing fundamentally the way people feel about their lives?

25:06The fact that they can order food and it gets delivered to their door at a slightly cheaper price than 10 years ago? Or do we need to think about the more fundamental things? The ability, as you say, to be able to get your hands on a home and build a family. The idea that you could really build up a career that can build an actual asset base from which you can then launch your life. Like these are the things that actually matter. So I think it gets it's not going to work, essentially, is my point when the administration says, yeah, but look at GDP growth. Look at the stock market. That's not going to fool people into being convinced that actually their life is the way they want it to look when they're literally telling you, no, it isn't.

25:48Yeah, people don't optimize for GDP growth.

25:51Scott Galloway:They optimize for security, progress, emotional health, and also in relative standing. I also think there's something to the notion that I don't think young people just have as much fun and joy in their lives. I don't think they have a sense of community. They're not going to religious church attendance is at an all-time low. Sports, being outdoors, being in the company of strangers, drinking is at an all-time low. I just don't think, quite frankly, people of your generation are having that much fun. And then when they do have fun, they feel as if they need to work and post it. And, you know, okay, let's show how much fun we're having.

26:30Scott Galloway:Let's not eat the food. Let's take pictures of it.

26:35Scott Galloway:And then constantly being reminded that they're falling behind on a relative basis. I just think it just attacks their emotional well-being. And the thing that there's a study that came out that when daughters hear their mother's voice on the phone, almost immediately their blood pressure goes down. When do young people's blood pressure go down? When are they in the company of strangers? When are they with friends? When do they unplug from a cycle of dopahit from their phone such that they can just sort of relax and experience joy and fun? I think it's tough. And to tell them that, wait, but you actually on a lot of levels have a better life than most people.

27:21Scott Galloway:I get it. Everyone's freaking out about a 10 % youth unemployment rate. That's not actually historically. That's about average. But again, that's not how people think. People think in relative terms, not in absolute terms. I think it would explain the approval ratings, which are now for Trump, some of the worst approval ratings we've seen. His approval rating has hit a 36 % low. and most of it is about the economy. Only 29 % of Americans approve of his handling of the economy. That's one of the lowest ratings ever. It is now lower than the really bad lows that we saw during the Biden administration when we saw that historic inflation coming out of COVID.

27:59And his worst issue is inflation and prices. Net approvals down to negative 39. It continues to decline. Seven in 10 Americans say the cost of living is not very affordable or not affordable at all. 61 % say the economy is not working for them personally, and that is up from 57 % in May. So people, I mean, we could tell people, oh, your perception's wrong, but that perception is all that matters here. At least if you're trying to get votes. If you're trying to win a political body, you can't just tell them, don't trust your own thoughts. You have it wrong. Things are great. They will decide that for themselves and they've decided that things are not working out right now.

28:44We'll be right back. And for an exclusive live stream on the science of storytelling from our research lead Mia Silverio, sign up for our Substack at profgmedia.substack.com. She will be going live with paid subscribers tomorrow. It is an excellent presentation. Don't miss it. Subscribe now.

29:10Scott Galloway:Support for today's show comes from Framer. Let's say your marketing team wants a new landing page, so the design team mocks it up, and then your engineering department, who's already got too much on their plate, responds with, yeah, we'll get to it. Thousands of businesses, from early-stage startups to Fortune 500s, are choosing to build their sites in Framer, where changes take minutes instead of days to solve this very problem. Framer's enterprise-grade no-code website builder used by teams and companies, including Perplexity and Miro, to move faster. with real-time collaboration, a robust CMS with everything you need for great SEO and advanced analytics that include integrated A-B testing.

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30:21Scott Galloway:Support for the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward to their ingenuity and determination. And for generations, everyday Americans could be part of that journey through perhaps the greatest innovation of all. The U.S. stock market. It didn't matter whether you were a factory worker in Detroit or a farmer in Omaha. Anyone could own a piece of the great American companies. But now that's changed. Today, our most innovative companies are staying private rather than going public. The result is that everyday Americans are excluded from investing and getting left further behind, while a select few reap all the benefits.

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31:29Scott Galloway:This is Advertiser Content brought to you by Virgin Atlantic Ed. a couple weeks back. I got you a birthday gift, not to pat myself on the back, but it was a pretty good one. It was indeed. You surprised me with Virgin Atlantic upper-class tickets to London. So tell us all about it. It was pretty incredible. From the moment I entered that upper-class cabin, I have to tell you, I felt like a VIP. Anything I needed, a drink, snack, assistance with the seat. Flat seats. Flat seats. That's the key. Cat seats, exactly. Had the four-course meal, got my champagne, very delicious, enjoyed the food. And the journey home?

32:05The journey home was great. I went to the Virgin Atlantic LHR Clubhouse, that's the Heathrow Clubhouse. Heathrow Clubhouse was awesome. Got myself a coffee, headed over to the meditation pod that they call the Soma Dome. Kind of felt like a sort of spaceship where you relax and think nice thoughts. So I did that for a little bit. Then we went over to the wing, which are these acoustically sealed booths where you could do some work. You could even record a podcast. I didn't do that, but maybe I should have. It was a very enjoyable experience.

32:37Scott Galloway:So, Ed, the real question here is what are you planning to get me for my birthday? See the world differently with Virgin Atlantic. Flying should be more than just transport. It is part of the adventure. Go to virginatlantic.com to learn more. Tickets and lounge access provided by Virgin Atlantic.

33:04We're back with Prof G Markets. A new bipartisan bill could shake up one of the fastest growing corners of finance, prediction markets. Two senators introduced legislation that would ban sports-related betting on CFTC-regulated platforms such as Calci and Polymarket. It would also prohibit them from offering casino-style games in the future. That includes everything from slots and blackjack to video poker and bingo. Notably, this is the first bipartisan Senate effort aimed at regulating prediction markets. So, Scott, this new proposal, it's called the Prediction Markets Are Gambling Act. Just a quick summary of what it would actually do.

33:44It would essentially just ban all forms of sports betting on these prediction markets. That's the main event. It also says it's banning these prediction markets platforms from hosting games like casino-style games like poker and blackjack, bingo, all this stuff. I think that's a misleading provision because none of these platforms actually host those games. They're not—you can't play blackjack on Calci or any of the other platforms. But they're basically saying you can't do that in the future. So the real meat of this proposal is no more sports betting, which has become a very significant market on these platforms.

34:27So I guess we'll just start with your reactions here to this proposal that is bipartisan.

34:33Scott Galloway:So first off, I should disclose, just before I make my comments, that CalSHE is a data provider for ProfG. We absolutely love their data on economics and earnings predictions and geopolitics. With respect to this legislation, this is a tough one because putting the opportunity for wagering in a more risk-aggressive, less developed prefrontal cortex, we've seen how that can go wrong. I think the challenge is parsing between these different segments. There's gaming, quote unquote, traditional gambling. There's the prediction markets. And then there's options contracts. And effectively, what the prediction markets are doing is they're offering what feels, smells, and looks like an options contract.

35:22Scott Galloway:And that is you're paying for a certain amount on an outcome against someone else who believes in another outcome. So what will be interesting is if, I mean, my viewpoint is whatever legislation they should have should apply to all of it, right? Something I would like to see, you can't, my 15-year-old is dying to go to Vegas with me. I'm not sure it's going to be that much fun for him because you can't be on a casino floor if you're under the age of 21. I would like to see age gating across all these things. I'm not sure a 19-year-old needs to be playing options, zero-day options. Zero-day options are gambling.

35:59Scott Galloway:80 % to 90 % of stock market purchases and sales are effectively speculation. You're not investing for the long term. And then there's no getting around it. If you're on BetMGM or in certain instances on these prediction markets, you are essentially trying to get a DOPA hit on a belief that you want to have insight into something and you're trying to make money and the risk of winning or losing creates a hit. The question is, Should there be legislation disparate by market? Because I don't think the options markets would want age gating at 21. I think you'd see stock exchanges or stock market platforms try and fight against that.

36:44Scott Galloway:So the question is, what I'd love to see is, look at those three categories. What is the ramifications on the mental health and the rates of addiction across those three categories? And does it warrant distinct or different levels of regulation? And if not, why wouldn't you just have one set of regulation around age gating, certain limits on how much you can spend, or not being able to use your parents' credit card, whatever it might be, or have certain AI -driven prediction algorithms that say, you need to take a break, or we've shut down your house. account, whatever it might be. But this is definitely going to be a very interesting period because you know who's most scared of the regulation of prediction markets is the options markets.

37:34Scott Galloway:Because the options markets are looking at this and going, okay, how are they going to be regulated? And then how are we going to say we're different? Because our contracts look shockingly similar. I mean, you started with this is a tough one. And then I think you actually did the tough part, the hard part of the task here, which everyone's been talking about, which is, I mean, the question is, where do you draw the lines? Like, how do you categorize these different things? But you did that. And in my view, you did that correctly. And that is, you said, there's sports betting, which is a form of gambling.

38:10And there's options and futures trading, which you could maybe say is kind of like gambling. but we both probably agree it's different from betting on the outcome of sports games and you know this is the i think some of the slightly facetious pushback that we've gotten from the prediction markets players they say how are you supposed to draw the line here where do you draw the line and my favorite line from from john oliver the great john oliver he said where you draw the line you draw it somewhere so what we've done here and what you've just done is you've drawn a line, which I completely agree with, and that is that there is sports betting, which has its own form of regulation and it has its own federal framework.

38:51Most of the regulation does happen at the state level. And depending on what state you're in, there are different laws. In some states, there is an age requirement. You have to be 21. In other states, you can be 18. Most of the states have similar rules around how to gamble safely. You have safe advertising rules. You have rules on displaying resources for problem gamblers. There are all of these different rules, but you need the framework, you need the lines and the boxes to be drawn in order to start regulating this stuff, which we have done with sports betting. And it doesn't work totally, but it gets us somewhere.

39:29Then there's options and there's futures trading. And currently, we treat that legally as a different thing. This is where you bet on the price of stocks going up and down. You bet on the price of commodities. It's regulated by the CFTC. The minimum age, as you mentioned, is 18. Maybe you could have an argument as to why you might want to make it 21. But the point being, the framework is there and it's in place, and it is different from sports betting. And so I think what we have here is actually a good piece of regulation. I was thinking that maybe regulators would go overboard and say, ban prediction markets entirely.

40:04They're all bad. It's all gambling. No. Instead, what they've decided is they said, hey, a lot of people are betting on sports on these things. That looks a lot like gambling. And it does look a lot different from the stuff that we actually like on this program, which is the financial events contracts. The contracts and the prediction markets which say, what's going to happen to interest rates? What's going to happen to inflation? What's going to happen to gas prices? To me, that's basically options trading. That's basically futures trading. Yes, it's risky. And yes, you could make arguments that it's similar to gambling.

40:37But it is far and away a different thing from betting on the outcome of the Super Bowl or the World Cup or trying to figure out who's going to be in the Sweet 16. Those are two separate things. So I think this is actually sensible here. It's like, look, keep trading these financial contracts because what we've learned is they're actually really great for predicting things about the future better than Wall Street in a lot of cases. They're also really helpful for understanding the news. that's why we use that data all the time because if we want to understand how did this big event affect what is going to happen in the future we often look to a market a platform like calci and we say okay yeah the probability of of interest rates coming down or going up has gone up x y percent and that's a useful thing but you have to start drawing the lines and figuring out what is the category of each different thing.

41:31And once you do that, then you can start to reach some semblance of sensible regulation. But if you keep saying, oh, it's all too blurry, it's all gray zone, you're never going to get anywhere.

41:40Scott Galloway:There's two ends of this. There's the end consumer, and then there's, I don't know, the B2B side. So Federal Reserve economists have said that Calci is better than professional economic indicators of predicting inflation and Fed fund rate decisions. This data has real value to media companies and analysts, you know, like ourselves. CalShit has a perfect forecast record on Fed rate decisions. Perfect. So far, they're batting 100 % on Fed rate predictions. And also, it's not just macroeconomic data. CalShit's earnings predictions are as accurate as Wall Street's. Now, the question is, all right, on the sports side, we don't care, nor do we talk about what the odds are of the Rams winning NFC playoffs, right?

42:30Scott Galloway:We don't care. That's not the business we're in. Should it be more difficult for a 21-year-old to bet in Las Vegas or bet on a prediction market on a sporting event than it is to go to Vegas or a Native American reservation and bet on sports there. I mean, why are these guys, and maybe they're just being subject to the same things, but it strikes me, I struggle with the line between infantilizing people and also recognizing there's real potential for harm here. And I imagine that's what the regulators were struggling with. But when you were in Vegas, you could bet on sports, right? Oh yeah, for sure.

43:13Scott Galloway:So what's the argument, I'll just, straw man, what's the argument or steel man is, What's the argument for why you shouldn't be able to do that on the predictions markets? I think you should, but it should be regulated like gambler. I mean, that's basically it. If it's gambling, regulate it like gambling. So, I mean, I think the real problem for these companies is the workaround that is beneficial is that if you're regulated not like gambling and you're regulated like options, which is what the current laws are, then you're not subject to any gambling regulations, which means that you can operate in states in which sports betting is illegal.

43:54So that's a problem. That's a fair point. So for me, it's just like, okay, the stuff that's gambling, regulate that like gambling. You shouldn't be trading sports events contracts in states in which they've decided that sports gambling is illegal. That shouldn't be happening. But in states where it is legal, Let them have it.

44:14Scott Galloway:Another question. You're betting on the Green Bay Packers, right? You're betting against someone who thinks they're going to lose and you think they're going to win. Zero-day options. I'm betting Apple stock's going to go up. You're betting it's going to go down. You're writing the contract. I'm buying it. Is one more or less gambling than the other? Yeah. I believe that the sports gambling is more gambling than the other. I think the zero-day option makes a case. It's pretty close to gambling. But again, if we're drawing lines, which I'd like to do, I think that's a pretty easy line to draw. One is about a financial product.

44:55Scott Galloway:What if the Apple analyst puts on a helmet and a jersey? I don't see the difference. I see zero-day options by that definition as gambling. Then we just throw our hands up and say, okay, let them all have it. I mean, we have drawn a line already in our regulation where we say, if you go on DraftKings and you bet on the game, that's gambling. If you go on your Robin Hood and you bet on options, that's something else. When I saw zero-day options and I went on a platform to look at it, to me, it was Vegas with a strong Reddit component. And so I don't see much of a difference. Totally agree. The people who are actually the most nervous here, the prediction markets are phenomena.

45:40Scott Galloway:They're exploding across a number of dimensions. I think the people who are most nervous here are whatever it is, the CFTC, the governing body of options contracts, because where they have gone with zero-day options, it's getting awfully close to gambling. And I think they're going to have a difficult time saying why we should be subject to different regulations and other things deemed as gambling. What I think we need more of is research on the effect and the impact this is having on people. You know, there's some research saying that gambling, once gambling is legalized in the state, bankruptcies immediately go up, right?

46:23Scott Galloway:That's a negative. what's happening specifically to young people, what's happening to their mental health, what's happening to their financial well-being. So, look, it feels like there needs to be more research across these categories and a really solid justification for if and how we create a distinction that warrants different legislation across these categories. I don't think we need to complicate things that much. Just by saying, yes, that's gambling, doesn't mean that you're just saying you're not allowed to do it anymore. All it's saying is you should be regulated like gambling now, which means, yes, you won't be able to operate in this number of states where this thing is illegal.

47:06But of course, you go set up camp in Nevada and do the sports betting there. But let's just regulate the things for what they are. One thing is more similar to options trading. One thing is more similar to sports betting. We'll be right back after the break. And if you're enjoying the show, please follow our new Prof G Markets YouTube channel starting next week. That is where you will find our content on YouTube.

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48:46Zootopia 2 has come home to Disney Plus. Let's go! Get ready for a new case. We're going to crack this case and prove we're the greatest partners of all time. New friends. You are... Gary the Snake. And your last name? The Snake. Dream Team. New habitats. Zootopia has a secret reptile population. You can watch the record-breaking phenomenon at home. You're clearly working at it.

49:11Scott Galloway:Zootopia 2. Now available on Disney Plus Rated PG. For the last 10 years, everything in American politics has basically revolved around one man. And as a political journalist who came of age during Donald Trump's rise in 2016, I've had a front row seat. I am officially running for president of the United States. It's going to be only America first. America first. Thousands of supporters of President Trump stormed the U.S. Capitol building. But is it possible to talk about politics without talking about Donald Trump? That's the question I'm going to ask in our new show from Vox. The idea of like a post-Trump or not exactly Trump-focused show can exist because he's not really driving any agenda items.

50:00It really does feel like so reactive.

50:02Scott Galloway:You know, I think this Iran thing is also going to cause a big split in the GOP. So far it doesn't among like people who say they're MAGA voters are still with Trump. But like, for the first time, you see on a major issue, open opposition from the start of this war. I'm Estet Herndon. And welcome to America Actually.

50:25We're back with Prof G Markets. Two major court rulings last week could mark a turning point for social media companies. First, a New Mexico jury found Meta had violated state law by failing to protect its users from child predators. Meta was ordered to pay$375 million in damages. Later in the week, a Los Angeles jury found Meta and YouTube liable in a social media addiction case, concluding that their platforms were intentionally addictive and contributed to a young user's mental health issues. Meta has to pay$4.2 million in damages, and YouTube must pay$1.8 million. The trial is the first in a wave of more than 1 ,600 related cases brought against these social media companies.

51:10Many are calling the decision a bellwether, saying it could open the door to a surge of new lawsuits focused on user well-being. Scott, this is basically the first ruling we've seen of its kind against big tech, a subject you have been railing against for many, many years. It was literally the subject of your first major book. And they ruled in favor or they ruled against big tech in both of these trials. What do you make of it?

51:42Scott Galloway:It is a big deal. And it's not the beginning of the end, but it's the end of the beginning is the way I would describe it. And that is typically with harmful substances or practices that have an externality that really damages the public. We usually figure it out. It took 30 years with tobacco. It took 20 years with opiates. And if you look at when social went on mobile in 2013, it looks like it's going to take about 20 years. I do think that these companies are now facing juries, and these juries have children who have gone through phones, smartphones with social media, and they've seen firsthand just how damaging it is, and they feel lied to.

52:22Scott Galloway:When I wrote The Four in 2017, the argument was over whether these companies were bad or not. It was who was going to be president, Jeff Bezos or Sheryl Sandberg. I mean, the affection for these companies, these innovators and these tech executives was extraordinary. And social media was helping connect parents of kids with childhood, you know, strange childhood diseases. It was reconnecting your friends from college. I mean, it was all like rainbows and unicorns. and when i initially started writing the book it was like it was a love letter to these companies and then as i really started looking at data i'm like okay this doesn't something's wrong here this feels this feels dangerous and slowly but surely and over the last nine years they have weaponized government created unbelievable tactics around delay and obfuscation leveraging citizens united and exceptionally star PR people, exceptional comps people, exceptionally charming and likable executives from Nick Clegg to Sheryl Sandberg to, you know, I forget his name, Evan.

53:25Scott Galloway:He's super likable. Had a snap, I forget his name. And the reality is our kids started self-harming and we started not liking each other And we started believing that the enemy wasn't Russian troops pouring over the border in Ukraine. It was our neighbor with the wrong presidential sign. And we started attacking each other online. And then outside actors with who couldn't beat us economically or kinetically took advantage of a porous shareholder driven platforms to start planting incendiary content that got us divided. I don't think Americans are actually divided, but we have people dividing us.

54:03Scott Galloway:And these companies are the agents for it. And now there's this enormous economic incentive to create a series set of content, much of which is useful, much of which is benign. But some of it just gets you angry at yourself, angry at others. And going back to the last story about why young people feel bad, even though maybe they've made modest gains, they're told every day that they're failing, that they're not hot enough, they're not wealthy enough, they're not impressive enough. And these firms, what came out in this trial, which was so incredibly disturbing, is the New Mexico attorney general created an account posing as an 11-year-old girl.

54:41Scott Galloway:and almost instantly the 11 the account got bombarded with explicit images from known sexual abusers from kids preying on kids so let me get this you can serve me you can tell when i'm at a beyonce concert and serve me an ad for a ride home from that location or you know when my kid's about to turn get his learner's permit and start serving me ads for auto insurance for a kid in Florida, but you didn't know this? You didn't know this was going on? And what this shows, the discovery here is going to be so horrific for these companies because the reality is they knew what was going on. But anything that introduced friction to the business model, they ignored.

55:30Scott Galloway:And I want to be clear. I think these companies are a net good for society, except for Meta. I think Meta's jumped the shark and is now a net negative. But big tech is a net positive for society. The problem is with the word net. And that is we're net beneficiaries from pesticides and fossil fuels, but we still have an EPA and emission standards. We have no regulation around these companies. And they have fought. They pretend to give a flying fuck about children with child safety features that are impossible to navigate and figure out. and then of course the people who've really paid the price here are low-income households because i have the resources to try and make my kids try and keep my kids off screens i have the money to pay for after school stuff i have the time and attention to be at home to ensure they can't go into the room alone with the screen which is a rule we have when i was growing up you know my mom was out of the house before i got up sometimes didn't get home until after i was asleep or later if I'd been at home bored with an iPad and YouTube and Instagram and YouPorn and Reddit and Discord, I'm not sure I would have ever left the house.

56:46Scott Galloway:And then my brain being rewired as I'm going through puberty around a constant need and access to doper right away whenever I wanted to squeeze it. I think this generation, unfortunately, my kids at 15 and 18 had to endure this bullshit. I don't think your kids, I think we're figuring it out. And I think in three to five years, it wasn't the fines that are the big deal. It's the fact that now the other thousands of lawsuits against these companies have legal precedent to go after them. And last interesting feature that our old colleague Maria Petrova highlighted to me is that the insurance companies meant to insure these companies against this type of liability are saying that they're not going to pay, that they're not covered because they intentionally did this.

57:36Scott Galloway:They knew they were doing it and they intentionally did it. And if the insurance companies had known they were intentionally breaking the law, they couldn't insure them. Now, far be it for any insurance company to actually, you know, insurance companies are famous for trying to get out of when you actually call on them to pay for it. But this is, this is that big tobacco moment. I forget it was 1991. I forget what it was, but this is that moment. So again, I don't think social media is going away, but this is the end of the beginning. This is the end of the wild West when these companies could operate with total immunity.

58:13Scott Galloway:So I'm, I think this is a big moment. I'm excited about it. I've said that before. I've been disappointed. But I think this is different this time. And the fact that both these cases came down with the same verdict within hours of each other also says something. This is a pattern here. And it's going to give a lot of plaintiff's attorneys and a lot of parents newfound mojo. And by the way, the market agrees. And that was the big standout moment for me. The meta actually fell on Thursday down more than 5%, 10-month low. So that's the market telling you actually, yes, this does have teeth. This is a big deal.

58:49And I just want to go back to a point you made at the beginning there about the fact that this was a jury trial. So both of these trials were ruled by a jury. And it was decided in both cases that what big tech was doing was illegal. But most of the major big tech cases that we've seen, they've been benched trials. They've been decided by a judge. So in the FTC versus Meta trial, that was a bench trial. The judge ruled in favor of Meta. We had the DOJ versus Google trial, which was decided on again by a judge. Judge Amit Mehta said that Google actually was a monopoly. They were operating this monopoly.

59:32But when it came time for the penalties and the remedies, he said, actually, we're not going to issue any remedies. We're not going to issue a penalty because OpenAI is coming up and coming and it's going to start to eat Google's lunch. And so that would be unfair to Google. And then what do you know? Google starts to crush OpenAI with Gemini. So that argument didn't make any sense. But too late. The decision is made. We had the same thing coming up in 2026 in the FTC versus Amazon case, which will also be decided by a judge. So usually these cases haven't been decided by a jury. They've usually been decided by a judge.

1:00:06And I think that is something that big tech really likes because I think that they would prefer to not have these issues adjudicated by the democracy, by the people. By parents. By parents. It's basically the judge's job to remove all of the emotion out of the equation. This is literally what they get trained to do and get really into the minutia of all of the statutory elements. And that's what you have to focus on overwhelmingly. But when you open it up to the people, as you say, whose children have gotten addicted, whose children have engaged in self-harm, all of that starts to build up. And it means that eventually you're going to say, you know what?

1:00:52I'm not going to go lenient on you guys. I'm not going to give it. I'm not just going to play it so easy and roll over so easily here. I'm going to be very, very harsh because the things that you have done to my life, the things that you have done to our society at large, are egregious and they need to be punished. And that's something that I think these big tech companies really don't want to see, which is why I think it is so notable that it was a jury in both cases. I believe one of them, the decision was unanimous across all of them, because there is so much pent-up anger and frustration among the American people right now against big tech.

1:01:31And that actually matters. it actually is important to have a moment of catharsis where you can actually express, look at all of the wrongs that you have done to us over many, many years. And yes, we are going to use this moment and this trial as our moment to express that to you and say, actually, this isn't okay. So I hope that we will see many more jury trials. And I think that what we'll find is that the more jury trials that we have, the more they're going to be ruling against big tech.

1:02:03Scott Galloway:Whenever anyone says the time on screens is about bad parenting or good parenting, that's a tell that they don't have children. They get their homework on their screens now. This is how they communicate with their friends. And Adam Alter, a colleague at NYU, doesn't get nearly the recognition because he's overshadowed by Jonathan Haidt and, anyways, other profs that or more retail whores would start multiple podcasts. But he wrote a book called, what was it called? Addicted or Relentless? Anyways, he wrote a great book about the addiction of these products. And he said that the really sad thing is if you don't have a collective ban, if you take your kid, if you tell your kid you can't be on Snap and you can't be on Instagram, they're more depressed because they're isolated socially.

1:02:54Scott Galloway:And so unless there's collective bans, unless there's, I mean, for God's sakes, these counties will claim that it's hard. And my favorite is when Mark Zuckerberg claimed to give a flying fuck about a 14-year-old's First Amendment rights. Yeah, I bet he wakes up at night thinking 14-year-olds need free speech. I mean, he literally used that as an excuse that they were worried about their First Amendment rights, a ninth grader. But unless, I don't see why we have, I mean, a simple one, age gating. I think that's coming. I don't think there's, I don't think there's any reason anyone at the age of 18 should ever be on a social media platform.

1:03:27Scott Galloway:And I get it. Maybe they can learn from YouTube. Maybe they can learn how to do algebra. It's not worth it. Or you have the cleanest G-rated version. And what Jonathan Haidt says is just go to China and see what they're serving up on their social media platforms. It's like kids running around and doing dances in front of the flag about how much they love China and the CCP. And then the other example Jonathan uses is if you go to the wealthiest high schools in Silicon Valley, they literally have no screens. They don't. And so it is nearly impossible to keep your kid off of this stuff. And there have been so many horrific stories about self-harm and kids and that Meta knew about this stuff.

1:04:12Scott Galloway:The discovery here is going to be a horror film. When they see the emails and the research and when we find out what we knew, what we knew was going on. And I always go back to, I don't think these are, I do think Mark Zuckerberg and Sheryl Sandberg have made more money while damaging more young people's lives than arguably any people in modern history. But we're the ones that are ultimately culpable because we have to elect people who have the backbone and the domain expertise to regulate these companies. And General Motors would still be pouring mercury into the river if we didn't have regulation, because if they didn't, they would be at a cost disadvantage to Ford and Stellantis who continue to pour mercury into the river.

1:04:52Scott Galloway:So we need to remove Section 230 for algorithmically elevated content. We need to age gate and we need to break these companies up. And we need, and this fourth leg of the stool, if you will, of the chair has happened, is civil liability. Because these cases, if these cases stopped, if this was it, nothing would change. Because this amount of money is chump change for these guys. This really is an incentive. I also think we need to move to a civil penalty construct where it's a percentage of market cap. So when Elon Musk is found guilty of market manipulation for saying, I'm funding secured to take the company private, he's fine.

1:05:30Scott Galloway:I figured it was$200 or$300 million. That's like you or me being fined$8. It's not a disincentive, right? If you have a parking meter in front of your house, the ticket is 25 cents and it costs 10 bucks a day, you're going to break the law. My first boss at Morgan Stanley, Carter Cordner, used to talk about occasionally, you know, you're always commuting in your car. And a lot of time, back then, cars broke down. Cars were not very good. And a car would break down and the traffic would be backed up on the 4 or 5 and you'd go by and you'd see a car with its hood up and steam would be coming out of it because cars were shitty back then, mostly American cars.

1:06:06Scott Galloway:And his idea was anytime you break down on the road, you're charged 10 % of the value of your car. And you watch, you're going to see maintenance standards go way up. So I think we have to start finding these companies a percentage of their market capitalization or their revenues. Otherwise, the incentive is just to continue to break the law and throw lawyers at the problem until there are so many lawsuits that represent so much capital that they finally have to, you know, they have to change their ways of doing business. But let me finish where I started. This is a big moment. But a good place to start is just charge them anything.

1:06:41And I think that is kind of what's striking here. I mean, the penalty for Meta here is$4 million. That's literally like a fraction of a percentage of what they pay AI engineers these days. Like that's literally nothing. And yet the stock fell more than 5 % on the news. So I think what that is telling you is like, this is the beginning of a very large chain of lawsuits that are coming. And it also shows regulators and it shows prosecutors that actually, like, you can do something if you simply apply a penalty, as opposed to what we saw with Google, where you say, yes, you did something illegal, but we're not going to punish you for it.

1:07:22Final stat I just want to mention here because it blew me away. I learned this from a former Meta employee on a CNN program. He said that one in eight children on Instagram have received unwanted sexual advances. And this was, I think, the point that you made that the attorney general made. This is like an unbelievable level of exposure and just, I mean, it's hard to put words to it, how bad it's gotten. The fact that we are putting children out there, and you've made this analogy before, which I think is a very good one. And I mean, how would we feel if a bunch of kids were playing around in a playground and then a bunch of old men, in some cases, just showed up naked and started looking at them and trying to talk to them?

1:08:12That's literally happening every single day on these platforms. It's happening to one in eight children on Instagram today. Like, I don't think that we fully appreciate how bad it's gotten. It's not just that kids are lonely and they're spending too much time on their phones. It's like we're literally exposing them to sexual predators every day, and it's now become normalized.

1:08:36Scott Galloway:Well, it's worse than that. What if the park said, hey, you'll be really popular at this park, and your friends will be impressed if you show up in a thong in a bathing suit. Yeah. We're going to sexualize you. Oh, and then strange men can speak to you. Or, hey, I'm going to talk to you. I'm the algorithm. Oh, you're not feeling good about yourself? Why aren't you feeling good about yourself? Oh, really? Wow. wow, you're thinking about self-harm? Well, this is how you do it. Here's what a razor looks like. Do you know how to cut yourself? Oh, wait, you know that mom's pills? Here's some images of nooses, razors, and pills.

1:09:14Scott Galloway:That's what was sent to a 14-year-old girl who started talking about suicidal ideation. She got an email saying, here are some images on self-harm we thought you might find interesting. I'm not suggesting someone at Meta, I think it was Pinterest, said, I want this girl to self-harm. What they did is said, no, we have a business model where when we pick up on certain words, we just automatically send images and we haven't put in any safeguards because that would slow us down and get in the way of our profitability. So Jonathan Heights got this perfect. We overprotect our kids offline. My kid, I used to leave my mom's house at 8 a.m.

1:09:54Scott Galloway:or 9 a.m. on a Saturday morning with a Schwinn bike, an Abizabba bar and 35 cents, and I'd get home at like 10 p.m. when maybe she'd start calling the neighbors and saying, if you see Scott, tell him to come home. Gone for 14 hours. Rabid dogs, 14-year-olds who'd beat me up, break into the school because for some reason we thought it was cool to break into the school on a Saturday. you know just all kinds of havoc and whatever my kids 10 minutes home 10 minutes late from school we call mi6 we're guilty of this but what what is happening on a screen and we install all these monitors and everything and then my kid figures out a hack around them but it we vastly under protect them online because we don't understand these technologies but the key here is that we have juries that are going to be made up of parents or people who know people whose kids have really struggled here.

1:10:47Scott Galloway:And our biggest regret, I still think our biggest regret isn't, I mean, I think Trump is a stain on the American experience, but my thesis is in 20 years, our biggest regret isn't going to be income inequality or climate change. We're just going to look back and go, how the fuck did we let that happen to our children around social media? I don't think, I think the combination of COVID and device addiction and an unfettered social media platform of people who are really have just ignored the commonwealth for shareholder value. I think these kids, I think we're going to see so much addiction that can be reverse engineered to setting up a constant, at a very critical age when their brain was being wired, the ability to squeeze at any moment and get DOPA.

1:11:31I think we have literally, we are flushing tens of millions of youth into our society

1:11:40Scott Galloway:that demand constant DOPA and don't have the skills for focus, attention, investing in long-term relationships, or even just having the ability to sit through a movie, much less sit at a desk and get shit done. And just to clarify, Met is actually now down 8%. So this is just the beginning. Okay, let's take a look at the week ahead. We'll see earnings from Nike. We'll also see consumer confidence and the employment report for March. Scott, do you have any predictions? So I love Nike. Yeah, I think it's one of the great brands. I think it's arguably one of the most impressive advertisers in history, and they built an incredible direct-to-consumer unit.

1:12:18Scott Galloway:The stock is now at a 10-year low. And the revenue is actually, versus 10 years ago, the revenue was$30 billion. And this year, revenue will be fiscal 2025. Revenue will be$46 billion. So despite the fact that top line revenue has grown 50%, and this just goes to the notion that the market values growth and hates decline, and basically the company is struggling under profitability and margin compression. But despite the fact it has a 50 % bigger top line, it's trading at the same level as it was when it was growing at$30 billion, which just speaks to the notion that you just get an entirely different multiple when you grow.

1:13:02Scott Galloway:But the thing that I dug in on around is that from 2020 to 2025, they went from 75 ,000 people to 78. So they've actually grown their employee base 3 % since 2020. So I think what you're going to see here, given the basically what is just an unbelievable staggering fall, in five years, the company has lost almost two-thirds of its value. In the last year, it's lost another 21%. you are going to see an activist come into the stock and you're going to see massive layoffs. And if the massive layoffs don't, you know, unless the massive layoffs come first, but this company, there's quite frankly, this company needs to massively right size.

1:13:47Scott Galloway:It's lost its growth and investors are going to demand that it starts growing EBITDA again. And in my estimation, they have not made the hard decisions they need to make around employment. So you're going to see an activist and you're going to see, my prediction is you're going to see 10 to 20 ,000 people laid off from Nike in the next two to three years and or an activist show up. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Acoste. Our research team is Dan Shalon, Isabel Kinsel, Chris Nodonoghue, and Mia Silverio. Jake McPherson is our social producer.

1:14:25Drew Burrows is our technical director. and Catherine Dillon is our executive producer. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and tune in tomorrow for a fresh take on the markets and also subscribe to our new Prof G Markets YouTube channel.

1:14:57Reunion As the world turns And the dark flies In love, love, love, love