Scott Galloway · 48:02
And it's incredibly robust, meaning there's a ton of competition. What does that mean? It means that Americans can buy more at a lower price. On an inflation adjusted basis, the price of apparel has been cut in half. And by the way, folks, when things get cut in half in price, it means your prosperity skyrockets. We want competition. We want... And if you if you if you don't realize what tariffs are gonna do, about 99% of our clothes. No. I'm sorry. 97% of our clothes are made abroad.
Kara Swisher · 48:34
What... What's a good US retailer that competes with Sheehan and Tmall? Like, who would you say? I mean, they're all the expensive ones. Right? The Gap sort of doesn't.
Scott Galloway · 48:43
No. There's no low cost maker.
Kara Swisher · 48:44
There's no low cost. There's expensive ones like Hannah Anderson Rocks, or there's all kinds of really wonderful higher end children's clothing, for example. I'm I'm just thinking of children's clothing. But it's... I mean, I'm trying to think. H and M, I like a lot. I like the the other one.
Scott Galloway · 49:01
H and M's not US.
Kara Swisher · 49:02
I mean No. They're not US.
Scott Galloway · 49:04
The iconic US fashion specialty retailers are, in my opinion, Urban Outfitters. Urban and Free People are two of the hottest brands. But the majority, if not all, of their manufacturing is abroad. I remember, I always love an opportunity to have a professional flex. One of the first consulting clients I had, one of my mentors was a guy named Warren Hellman of Hellman and Friedman, and he said, I have a great assignment for you. I was 27 and I'd started this quote unquote strategy firm. Said, I wanted you to come to Levi Strauss and Company board meetings. I don't want you to talk to anybody. I want you to listen to the entire board meeting, then I want you to stand up and give your view. And it was me and a guy named Lee Clough from Chiat Day got to do this for four board meetings. And one of the first things I said was they had, back in the '90s, Levi Strauss and Company still had domestic manufacturing. And the Haas family, who are very paternal and really civic minded, were very committed to keeping domestic manufacturing. And the CFO got up there, and I can do math. I said, what is the cost per unit producing domestically? And it was like, I think it was $11 a pair. And the cost to bring in the same quality from just across the border in Mexico, or I forgot where we were, Honduras, was $3.80. And so I'm like, okay. But just to be clear, what you have decided is that you're giving people naturally artificially high wages that once they're laid off, there's gonna be nowhere else to go. And eventually, of course, they outsourced all of their production. We are meant to go to the lowest cost provider for more prosperity. We need to maintain a certain level of domestic production. For example, the shoe industry has these ridiculous tariffs claiming that if we go to war, need domestic manufacture of boots, which is just stupid. Right? We could spin up a factory to build boots pretty quickly. But the clothing industry is an example of an increase in prosperity because we've globalized it and we don't have massive tariffs. So, I mean, it's it's striking how Timu and Shein, like, one out of five things purchased over the holidays were from those two companies. But Forever twenty you know, it just... Like you said, it just didn't... It just couldn't compete, nor should it. I I like it when nations compete for our dollar.
Kara Swisher · 51:15
Sucked. It just sucked. Ugh. They never could go in that store. It was, like, terrible. And I like a cheap clothing store. In any case, we'll see what happens with the others. But, obviously, as Scott said, it's global. Okay, Scott. Let's pivot to a listener question. The question comes from Kyle. Let's listen.
Speaker · 51:30
Hey, Scott, Kara. It's Kyle from New York. Big fan of the show. I had a question about Trump's proposed federal income tax elimination for anyone making less than a $150,000 a year. I've heard a lot of discussion recently about how Trump's economic policies really only benefit the wealthy and harm the younger, less wealthy portion of the population. This policy seems like it's in response to that discussion. I'm curious from your perspective, is this a moment where credit is given or credit is due, or is this more hand waving? Curious your thoughts. Thanks, guys.
Scott Galloway · 52:13
I would like to see a tax holiday on anyone making under a certain amount or people under the age of 40 similar to what Portugal's done. The problem is, will this come at the cost of Social Security? We need to we need to hear more. I hope it's not populous bullshit. I need to do more do more analysis. I think it makes a lot more sense in this ridiculous no tax on tips. The waiter gets a tax cut but not the dishwasher, and the reality is the majority of people in the services industry don't pay any taxes anyways because they don't make enough money. But I just need to understand more about this. We'll see.
Kara Swisher · 52:45
Yeah. We'll see. I mean, in concept, it's a great idea. And, you know, again, what's really the point is rich people need to pay more taxes. Like, I I don't know why that
Scott Galloway · 52:54
And corporations.
Kara Swisher · 52:55
Corporations. That's really bad.
Scott Galloway · 52:56
Lowest lowest amount of GDP as represented by the taxes since 1939. People... It's worth noting that Americans in this income range who make less than a $150,000, they pay more in payroll taxes than in income taxes.
Kara Swisher · 53:08
And soon tariffs. Yeah. So hand waving for right now. Anyway, you got a question of your own? Go to nymag.com/pivot, submit a question for the show, or call 85551 Okay, Scott. One more quick break. We'll be back for predictions.
[Ad break]
— Predictions segment begins —
Kara Swisher · 55:09
Okay, Scott. Let's hear a prediction.
Scott Galloway · 55:12
Look. I'm I'm gonna go off script here, and I'm going to... I don't have a prediction, but I'm especially slow today because I was up till 4AM, binge watching all four, episodes of what I think is, so far the the media property... Other than White Lotus, of course, the media property of 2025 or the media achievement. Have you seen adolescence, Kara?
Kara Swisher · 55:38
No. I haven't. No. I haven't seen it at all. I... I've heard about it. I've heard it's amazing and and depressing and upsetting, but everyone... I've heard several people talk about
Scott Galloway · 55:46
It is really powerful. So I'm not gonna give anything away here. It's a British crime drama miniseries from Jack Thorne and Stephen Graham and directed by Philip Barrantini. It's about a 13 year old schoolboy who's arrested for the murder of a female classmate. And the interesting thing from a creative standpoint is each each scene is shot in one take, and it is so powerful. It it brings up social media. It's, you know, obviously, violence, crime, father son relationships, families, the impact of social media, the anxiety and depression that young people are dealing with. It is it is it's like if you wanted to explain to someone the stress that young people or adolescents are under and facing and what it means and how it ripples out in so many negative ways, it would be it would be really hard to do it more efficiently than watching this this four part series.
Kara Swisher · 56:46
Can I ask you a question? Is it is it... Because I tend to avoid these things now, even though I've heard a lot about this show and also Euphoria or any of these... There was a documentary about teens. There's there's all kinds of these things. I kind of avoid them because they're so upsetting to me. How do you deal with that? Because you're writing a book on it, obviously, which comes out when?
Scott Galloway · 57:03
I'm moving it up. I'm turning in my manuscript early. I'm hoping that it'll come out in November. It was supposed to be streamed next year, but I feel like the the moment is gonna pass if I don't get it out soon.
Kara Swisher · 57:12
No. You should. You've been the leading
Scott Galloway · 57:14
Josh Hawley's writing a book on masculinity. I mean, I gotta get it out.
Kara Swisher · 57:17
You need to you need to dare him to a fight. But how how is it watching these things? Because I think I I have noticed I have tended towards happy things when I'm watching things, like... And severance because it's so good. By the way, season end or this Friday, I just... They either have to be really astonishing like severance or very happy like running point. Right? I can't talk a little bit about this because you're writing a book on it. These topics are dire. How do you manage to feel hopeful watching any of this? And that's one of the reasons I avoided adolescence.
Scott Galloway · 57:47
Well, it's easy, Kara. I've leaned into my anger and my depression. I mean, I'm not the person to talk to about maintaining a positive outlook. I struggle with this shit. And what you... One of the things you referenced, which is a social norm, which is kind of interesting, is that in boom times or positive times, tragedies and dramas are more popular. And then in depressing times, romantic comedies are much more popular. People want to get out of the mood they're in.
Kara Swisher · 58:12
Or like White Lotus, something that's like
Scott Galloway · 58:14
That's just pure entertainment with some subculture. By the way, Sam Rockwell's monologue from last week is incredible.
Speaker · 58:22
I heard.
Kara Swisher · 58:22
I haven't seen it yet.
Scott Galloway · 58:24
But this is... I mean, it talks a lot about school bullying via social media centered on incel subculture, and people don't realize how powerful that is. This week's post, I'm writing about porn, which I think is playing an unfortunately increasingly not important large role in But young men's this... If you've read about this stuff but don't understand it and wonder, wanna see how it's really impacting people on a ground level in an exceptionally compelling and gripping way. So... But you asked me how I deal with it. I... To be honest, Kara, I'm having trouble dealing with it. I... For the first time in my life, I was thinking about this the other day. I've always been able to disassociate from the news. Since this last election, I'm having trouble disassociating. I'm I'm I'm just a... I'm that guy who's that fucking downer at a dinner party that turns everything into... Well, yeah. Has anyone
Kara Swisher · 59:15
You are posting happy things on on I've noticed good press. You really have.
Speaker · 59:19
A lot
Kara Swisher · 59:20
of them are delightful, by
Scott Galloway · 59:20
the way. Thanks. Yeah. But, yeah, I'm not... So the answer is how do I how do I handle this shit? The answer is not well. But this is such a powerful piece of media that it is... It's so satisfying because you feel as if you've learned, and you can't. I want... I watched... I I turned the thing on at midnight, and I was up till four in the morning. I just couldn't
Kara Swisher · 59:41
There you go.
Scott Galloway · 59:42
Couldn't turn away from it.
Kara Swisher · 59:43
Alright. Adolescence is a recommendation and a prediction, I guess. Okay. Elsewhere in the Kara and Scott universe, this week on Professor G Conversations, Scott spoke another happy thing with doctor Fiona Hill, a senior fellow at Brookings, chancellor at Durham University, and former White House Russia expert who also testified during the impeachment hearings. Really smart person who worked for us and now does not. Let's listen to a clip.
— Predictions segment ends —
Guest · 1:00:07
The big difference between Trump and Putin is Trump is a totally one man show. He's destroying the state. Putin operates within the state. He's a creature of the deep state. He's not dismantling the Russian state. That was already dismantled, you know, under Mikhail Gorbachev and Boris Yeltsin. For Trump, he doesn't really pay any attention to any the people around him. He uses them as emissaries and envoys, but he doesn't do his homework. They can't actually advise him on anything, and that makes Trump very unpredictable. So I think if Putin's looking at his own crystal ball, he also can't say where this is gonna go.
Kara Swisher · 1:00:39
Well, that's heartening. What... That was... That's an interesting thing to say. She's brilliant, actually. She's really brilliant. I'm glad you had her on. Okay. That's the show. Thanks for listening to Pivot. Be sure to like and subscribe to our YouTube channel. We'll be back on Tuesday. Scott, read us out.
Scott Galloway · 1:00:53
Today's show was produced by Lara Nayman, Zoe, Marcus, and Taylor Griffin. Ernie and her Todd engineered this episode. Thanks also to Drew Burrows, miss Severio, and Dan Shalon. Nishat Kerouwat is Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. 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, Adolescence on Netflix.
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