Scott Galloway · 47:25
Baby bonds, and he was very passionate about it, and he's been very involved in it. I I love the concept of, at the very outset, giving... You know, for every infant born, giving them some money and letting compound, you know, the most powerful force in the universe. I would have gone much deeper than this. For $40,000,000,000 a year, you could give $7,000 to every baby, and then I would totally infantilize them and not let them touch it till they're 65. You give... You spend $40,000,000,000 a year, and then in twenty or thirty years, you announce in another twenty or thirty years, we're no longer gonna need Social Security because everyone's gonna have a million bucks at 65. Interest rates die, and it pays for itself. But our congress doesn't wanna think faster than their fucking two inch dicks. So
Kara Swisher · 48:04
Is there danger here of riskiness for people's... Like, I mean, this is free money. That's what I can... You know, someone... The cheapest has said, oh, I took a Trump account. I'm like, are you kidding? Grab it. Like, absolutely take a Trump account. Yeah. It's a year old.
Scott Galloway · 48:18
Just to give you a sense of compound interest, you know, my kid's going to college next year. When he was born in 2000 and... When was my kid born? Two thousand two thousand and seven. I put $10,000, and I think it's called a $5.29 I do. New York account.
Kara Swisher · 48:35
I
Scott Galloway · 48:35
do too. And I'm like, I'm worried about college. I don't... I was a clinical professor making a $160 a year living in faculty housing. And so I thought, okay. I'll scrape together $10. And I didn't do it again. I was stupid. I didn't do it again. I just looked it up online because I'm like, oh, what about that $5.29 I did? Now granted the markets have ripped. Do know what that $10,000 is worth right
Kara Swisher · 48:55
thousand dollars?
Scott Galloway · 48:57
No. 85.
Kara Swisher · 48:58
Oh, okay.
Scott Galloway · 48:59
But still, in eighteen years, it went from 10 to 85.
Kara Swisher · 49:03
Oh, I put more in. I did them for both boys. Mhmm. I paid for all of college with Louie and Alex. And people have controversies around five twenty ones. Could have done better in the market, but I just put it away and forgot about it. And I kept... I added the maximum amount to it at the time.
Scott Galloway · 49:16
Yeah. But it's tax it's tax free. You can take it out if you
Kara Swisher · 49:19
tax free. I just was like, I don't even wanna fi... I know I could probably do better in the market, but I don't care. I had the money.
Scott Galloway · 49:25
I don't think you It
Kara Swisher · 49:25
was a certain bet.
Scott Galloway · 49:26
I don't think you could've because because the difference, just to explain it, if you invested $10,000 and I had 85 in the market, say, a 100, I'd have to pay I'd have to pay capital gains on it. Whereas if you apply it towards tuition or school supplies, you get to... You don't have to pay taxes on the gains. My point is the idea of giving kids, every baby born, a retirement account, I wouldn't let them have access to 18 or 25. The problem is, and the thing that's gonna bankrupt our nation as we continue to send more and more old people who vote, old people more... Vote themselves more money, We have to reduce entitlements for old people, and this is the way to
Kara Swisher · 50:05
do it. Not entitlements. They're investments. I mean, I think the danger, obviously, is if we remove it completely is people are, you know, subject to whatever the vicissitudes of the market. And that's that's the... Always been the worry. Right? That's why it's called Social Security.
Scott Galloway · 50:21
There has never been... Okay. But there has never... You could buy any five stocks since the beginning the beginning of the markets. You could buy any five stocks in the S and P, and if you hold on to them for ten years, you've never lost money. Because of demographics and innovation, the long term trajectory of the market... Now there's been there's been decades where it's gone flat, but over the over the long over the long term, there's nothing like the up into the right of the markets. And I think this is a great idea.
Kara Swisher · 50:51
I put I put that money away for my kids, and I never paid a dime for college because it had been saved
Scott Galloway · 50:56
But this is the flaw.
Kara Swisher · 50:57
And put away. I... And it was all tax free. It paid for their their their dorms. It paid for their food, and Alex eats a lot. And it was it was it was great. And I was like That
Scott Galloway · 51:08
meal plan. Yeah. Michigan is losing money on Alex.
Kara Swisher · 51:12
And and the only... Louis... The very end of Louis' college thing, Alex went to a less expensive college, was just a little bit of money, but it was zero. It was the best money I ever invested, I have to say. Anyway, I was just speaking of which, Alex Wisscher turned 21. Congratulations, Alex. You're on your own.
Scott Galloway · 51:30
Alright, Alex.
Kara Swisher · 51:31
I know.
Scott Galloway · 51:31
Good for you.
Kara Swisher · 51:31
I know. Of course, he was studying last night. I was like, Alex, go get a drink. Like
Scott Galloway · 51:36
Go get a drink.
Speaker · 51:37
He said
Scott Galloway · 51:38
My guess is he's already he's already done that.
Kara Swisher · 51:39
No. I know. But he's like, that might be a good idea. I was like, I have to study for fluid dynamics.
Scott Galloway · 51:45
Look. The... This is the bottom line, or or this is a theory you wanna tap into. The most profitable businesses in the world tap into one thing, and that is a flaw in our instincts. We're desperate for affirmation. We're desperate for free gaming. We're desperate for opportunities to procreate. So we buy Ferraris. We go on Instagram, and we gamble. The highest margin products in the world tap into a flaw in our instincts. You wanna reverse that and tap into the following flaw, and that is humans are really bad with respect to the time space continuum. What do I mean by that? Because for the majority of our time on this planet, we haven't lived past 35, and now we live to 80, people have no sense
Kara Swisher · 52:32
Yep.
Scott Galloway · 52:33
Up above fast time is going to go. And they say, well, the markets are up nine to 10% a year. That's nothing. I'm not gonna invest in the markets. I can make more money as a baller opening a restaurant or hoping my company goes public. You are gonna graduate from college. You're gonna blink. You're gonna have a couple kids. You're gonna have some joy. You're gonna have some grief. And you're gonna wake up, and you're gonna be fucking 60 years old. Agreed. It happens so fast.
Speaker · 52:57
It's great save money. Save money.
Scott Galloway · 52:59
You wanna, at a very young age, figure out a way where you don't even get the cash in your hands, matching programs at work, five two nines, baby bonds, automatic withdrawals, and just a little bit of money from an early age, and then blink. You're 65, and you look at that account, and you have a shit ton of money. This is a flaw. This is your revenge Mhmm. On the... This is a way you put scaffolding on the instincts that are flawed.
Kara Swisher · 53:25
Yeah. I agree. Scott, one more quick break. We'll be back for predictions.
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— Predictions segment begins —
Kara Swisher · 55:34
Okay, Scott. Let's hear up predictions. Is it about Allbirds now that it's an AI business? No. Just move along.
Scott Galloway · 55:40
Oh, I had two, and one of them was Allbirds. Okay. Go for So I'll I'll go to that one because that... You're... You prompted me. My my prediction was gonna be Anthropic IPS before OpenAI, but that's boring, and I've already talked about Anthropic. So I'll go to the one you suggested. The Allbirds pivot to AI will inspire a bunch of copycats. You're gonna see Chegg, GameStop, Rent the Runway, all decide their AI companies. All... So this is what's happened. Allbirds, the once hyped sneaker brand, that just sold its IP for 39,000,000 two weeks ago, down from a $4,000,000,000 peak valuation, is rebranding as
Kara Swisher · 56:17
Uncomfortable sneaker business, but go ahead.
Scott Galloway · 56:19
Rebranding as Newbird AI and pivoting to leasing AI chips. GPUs. The company is buying $50,000,000 or secured 50,000,000 in financing to buy GPUs and lease them to customers. And shares spiked nearly 900% at intraday highs on the announcement. So what is this gonna do? Just like... Remember when Bitcoin treasury companies went crazy? Yeah. And all these different companies decided they were now Bitcoin treasury companies? So we've seen this movie before, and it doesn't end well. Long Island Ice Tea Corp rebranded as Long Blockchain in 2017 to ride the crypto wave, and its shares were eventually delisted, and the SEC brought insider trading charges.
Kara Swisher · 56:58
Shocker.
Scott Galloway · 56:59
New bird, if you will, what I call New Bird, will soon be no bird. So the prediction is the following. Allbird and this ridiculous fucking jazz hands pivot to AI that resulted in a massive one day spike, ton of competitive, ton of copycats, and it doesn't end well.
Kara Swisher · 57:14
Oh, what what does it end? How does it end?
Scott Galloway · 57:16
These companies have short term pops. The insiders who get the shares before they announce it dump the bag, and then the people who think this is anything resembling an... A company with enterprise value end up losing a shit ton of money. It is similar to all the Bitcoin treasury companies. When you try and... It's like... Remember in the early two thousands when... I remember being in a meeting, a board meeting in Williams Sonoma where we seriously contemplated changing the name of the company to williamssonoma.com because we thought that would add shareholder value. And Howard Lester, who was one of, like, the clearest blue flame thinkers in retail, is like, that's just fucking stupid. We're not doing that. Anyways, when you're just trying to create the illusion you're in a hot area with absolutely no domain expertise, IP, or advantage, sure. Call it AI a pop. If you're in Allbirds right now, just take it from me. Sell. But you're gonna see a dozen of these things announced in the next ninety days.
Kara Swisher · 58:14
So stupid. People did mock it, which is good. Alright. I I have no predictions today. I predict that Scott Galloway will be a star of my show this weekend. Everybody watch it because Scott is very funny and actually has a lot of serious and significant things to say about health care and longevity, and it's... He's really good.
— Predictions segment ends —
Scott Galloway · 58:33
He I don't remember that part.
Kara Swisher · 58:34
You do? I remember falling asleep.
Scott Galloway · 58:36
I don't remember saying anything substantive.
Kara Swisher · 58:37
And it... You sound great. You sound really good. You actually say a lot
Speaker · 58:41
of substantive things.
Kara Swisher · 58:41
Anyway, he looks great, and he's... And you get to see him sleep. Anyway, we wanna hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com/pivot. Submit a question for the show or call 85551 Elsewhere in the Care and Scott universe this week on Prof G Market, Scott spoke with Catherine Ann Edwards, PhD economist and Bloomberg News columnist, on why AI is only one factor behind the challenges young workers are facing. Let's listen to a clip.
Speaker · 59:08
It's not as if the only thing standing between young workers and a job is what private employers are doing or say they are doing or will do with AI. We have a weak economy and a weak labor market with terrible social supports and almost no investment in people that don't have a job. There are solutions that don't have to come from just knowing more about AI, but have to come from holding our policymakers accountable for economic mismanagement. AI is today's story, but there will be another one. Weakness is weakness in the labor market. We don't have great infrastructure for helping people who don't have a job.
Kara Swisher · 59:40
That's a 100% right. It's so true.
Scott Galloway · 59:42
She's super smart. You'd like her.
Kara Swisher · 59:44
Yeah. Anyway, that's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll have lots to talk about next week. There's so many topics happening, and we'll be back next week to do so.
Scott Galloway · 59:57
Today's show is produced by Lara Nayman, Zoe, Marcus Taylor Griffin, and Todd Wiseman. Ernie or Todd engineered this episode. Manolo Moreno edited the video. Special assistance from Kate Gallagher and Brad Sylvester. Thanks also to Juberos, mister Variant Dantjaland. Can AI replace all these people? Nishad Kerwa is Vox Media's executive producer of podcasts. Make sure to follow Pivot on your favorite podcast platform. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com/pod. We'll be back next week for another breakdown of all things tech and business. Have a great weekend, Kara.
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