Scott Galloway · 33:56
Believe I'm gonna be a mailman. You've got mail.
Kara Swisher · 33:59
This question comes from Elizabeth. It came via email. I'll read it. Hi, Kara and Scott. Once again, Kara is first in that thing. Absolutely love your podcast. What do you understand to be the potential downsides of a US law or administrative action that bans TikTok. What will we say if a foreign government took a similar action against a US company? How might a ban on TikTok set a precedent for further social media bans? To be clear, I thought your points on the dangers of TikTok were well founded and beautifully made, as they always are. I understand you can't discuss everything. I'm just hoping for a fuller conversation next time you address the issue. This is good because I'm about to interview the The US CEO of TikTok. But go ahead. Tell me, Scott. But, yeah, give us some fuller thoughts on this so I can then borrow them from my interview.
Scott Galloway · 34:42
Well, first off, let's look at our question. What would we say if a foreign government took similar action against The US company? Well, we've said it over and over because China's done it consistently.
Kara Swisher · 34:51
Yep. They do.
Scott Galloway · 34:52
And let's acknowledge the point that banning media, banning a company, a media company, right away should raise red flags. Because one of the pillars of a modern economy or a democratic society is that pretty much anybody can say pretty much anything about pretty much anyone else. That is a hallmark of a free society. So when you start using the words ban and media in the same sense, you should naturally have a gag reflex similar to what the person who put the question in. The difference here, though, is that one, on a trade level, I do believe that Trump got this right. I think there's an asymmetry there. And then when they ban anything that reeks of any sort of Western media or technology
Kara Swisher · 35:37
Everything.
Scott Galloway · 35:37
I mean, they let it in long... It's even worse than it. They let it in long enough to steal its IP, prop up a local entrepreneur, finance it, and then kick the American company out so they can capture the domestic value because they're like, we have a large enough market to create hundreds of billions of dollars behind a search engine or social, so we'll let you in just long enough to steal your IP and then kick you out. So just on a trade level, tit for tat, we have license, I believe, to kick them out. I think what you'd like to see, and then on a societal level, I'm just totally, I know what the term is, freaked out, seeing incredible, incredibly addictive nature of this platform. And the fact that young people are now spending more time on this platform with the exception of YouTube and spend more time on this platform than
Kara Swisher · 36:20
all It streaming to be. Obsessive watching was YouTube, and now it's this, and it's even better. You know who's who's obsessively watching TikTok right now? Jim Bankoff. He called me. He said he can't stop.
Scott Galloway · 36:30
Anyway Hankoff likes likes he likes
Kara Swisher · 36:33
He just started doing it. Now he can't stop.
Scott Galloway · 36:36
I'd be curious what he's watching. I get the I get the sense he's a saucy little mix. He's too nice and buttoned up on the outside. I bet there's some crazy shit in his feet.
Kara Swisher · 36:45
Let's investigate. There's still a podcast about that. Anyway, so go ahead. Further thing. Okay. So it's addictive. So are the others. So I don't think they... They're more addictive. Addictive?
Scott Galloway · 36:54
This is different, though. It's it's not social. It's a streaming media platform. That's one thing, no decisions.
Kara Swisher · 36:59
Good Quibi.
Scott Galloway · 37:00
More than 50% of our youth is on it, more than every streaming media combined. And I just believe the opportunity for them... And if you read their privacy agreement, you're agreeing that TikTok can track your keystrokes on any other app. And the idea that I just think it would just be so incredibly easy for them to put their thumb on the scale of anti American content. And just as Meta is the ultimate espionage tool, I think TikTok is now the ultimate propaganda tool. I do not want to see America raise a generation of future military, civic, social, and business leaders that feel worse about America. And what I've said is two things. One, if I was in the CCP, this is exactly what I would be doing, exactly what I would be doing.
Kara Swisher · 37:42
Putting money into this.
Scott Galloway · 37:44
And two, I believe the people at TikTok deserve huge economic upside for what they have built. And what I'd like to see is some sort of spin to US interests and also regulation by US regulators and ensure all the data is... It's all about incentives and ensuring there is a true Chinese wall here. But in my view, it is an existential threat for it to exist as it stands. And then the final point I'll make is Mhmm. I've gotten a lot of pushback from some journalists that you're distracting from the issues, the privacy issues of Meta. I'm like, well, we can walk and chew gum at the same time. This isn't a zero sum game. This doesn't this doesn't let Meta off the hook for its weaponization of elections or teen depression or delay in obfuscation. Privacy.
Kara Swisher · 38:25
Privacy.
Scott Galloway · 38:26
But this is a this is a national security risk.
Kara Swisher · 38:29
Alright. Let me ask you a question then. Let me just change it around. What if they were successfully able to put up a wall? Should it be limited because it happens to be so addictive just on that thing? If it was... Say it was not used for propaganda. Say it was not... They were not able to manipulate it if they wanted to. What would you... What say you then, Scott Galloway?
Scott Galloway · 38:50
Then whatever you do around the addictive nature, you'd have to apply to all platforms. Yeah. Because you can't be xenophobic or jingoist and start saying, well, Chinese platforms are a bigger threat because they're Chinese. Well, If you got of the propaganda and the espionage risk, then you would just have to group it into whatever legislation or regulation you were going to And enforce against all if you
Kara Swisher · 39:12
remove the propaganda and espionage part, is it a better product than others? Is it doing well? Because one of the things that when I do the interview, wanna talk about why it's such a good product. Why is it... Is it a very good product when you use it? People get dragged into it. It's not just addiction. It's entertain... It's like you and I in Twitter. Like, we like we like scrolling Twitter. But I'll tell you, I don't get to... I don't use TikTok because I know I would like it so much. What what do you what do you do about the fact that the product is so infectiously fun to to use?
Scott Galloway · 39:43
But here's TikTok's genius.
Kara Swisher · 39:46
Okay.
Scott Galloway · 39:46
Is that everyone thought about social media, this is not social.
Kara Swisher · 39:49
Entertaining.
Scott Galloway · 39:50
And that is... The reason why TV was the most revolutionary medium to that point is it required nothing of you. It was passive. You sat on your couch, and other than trying to find or dig out your remote in between cushions, it asked nothing of you. I always thought interactive television was an oxymoron. When I watch TV, I don't even want to decide. And that's what TikTok does. It says, No decisions, totally passive. You're not going to get bullied by the 13 year old girl who thinks you're a jerk. You're not going to feel bad that you don't have great abs. You're not going to feel bad that you're not rich enough to be sitting by the pool at the Almond in Utah. We're just going to calibrate, based on a few finger swipes, what content you absolutely love, and you can just lie on your side and go into a rabbit hole in an opium like dream state.
Kara Swisher · 40:33
Or just make up your air fryer or whatever the heck you want.
Scott Galloway · 40:36
Or chiropractors adjusting people or Great Danes. I'm getting served amazing content about Great Danes or Yeah. These poor animals that decide to go get a little sip of water in an African watering hole and have a very unpleasant experience at the hands of a 10 ton crocodile. I cannot stop watching that shit. Anyways, I'm... I have dope of firing just talking about TikTok. Yeah. Those people... And and I'm a capitalist. I think Vanessa and her colleagues, I think they deserve to be really, really rich.
Kara Swisher · 41:02
Yeah. So what
Scott Galloway · 41:02
happened was what doing.
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Scott Galloway · 41:05
Separate. Here's why they're going to figure it out. There is so much money on the line. The difference between this company being worth $50,000,000,000 and $500,000,000,000 is their ability to create this Chinese well, I don't know how they do that. You summarized it perfectly. They have to separate the product from the ownership. As long as it's owned by Chinese interests, as long as there are engineers in China, it's too much of a risk. I think there's so much money on the line here. I think they're going to figure it out. But if you were just to say we wanna ban it because it's addictive, well, okay. Now we gotta talk about every platform. Yeah. Yeah. Yeah. Just not true.
Kara Swisher · 41:37
So if it would work for you, you... If it was separated, except for the product was separated Ownership. From the
Scott Galloway · 41:44
It's all about ownership. Alright.
Kara Swisher · 41:45
Okay. Listen. Any need to... Keep going. Okay.
Scott Galloway · 41:47
And then we have to have identity for all of it. I don't see any reason why anyone under the age of 15 needs to be on any of these things, quite frankly. We need to carve out section two thirty such that if it shows they're weaponizing our elections or causing teen depression or spreading misinformation about vaccines. Liable the same way as any other media company. I mean, there's a bunch of things we need to do across all of them. But TikTok is a special, its own unique threat because of its ownership. What do you think? Where do I have it going?
Kara Swisher · 42:12
I would agree with you. I'm thinking a lot about it because I want to when I'm interviewing you, you obviously have to talk about the China thing, but it's a great product. So what do you do with this great product that also has such potential for national security risk, propaganda, etcetera? You can't even get to the other things that plague other social media companies, but I think you're dead on right that it's... I've always thought of it, and I I think I wrote this when I I wrote a column saying I'm using a burner phone to use it because I don't trust the Chinese government. I don't particularly trust ours, but I really don't trust them. And I love it too. So what what do you do? But I'm still using a burner phone, which means it's sort of like... It was such an interesting dichotomy of my love of the product from the the not so much love of the ownership. And so I think it's social entertainment. You're a 100% right. It's social it's social. There is a social element to it, but it's entertainment. And it's creativity. I think there's a lot of creativity on that platform. And and and inside that can be mixed propaganda. That's the whole point propaganda is to hide among the flowers, you know, and really get you get you going on whatever. And and in your interest in your interest. Last thing, and then we'll go.
Scott Galloway · 43:19
Well, no. My last thing is I have a burner phone. I only use... Really use it for one thing, to communicate and FaceTime with Marjorie Taylor Greene's ex. He rubs his feet, and I Is that weird?
Kara Swisher · 43:30
See, you told me you don't wanna talk about this, and then you cannot get away from it. Anyway, if you've got a question of your own that you'd like answered, send it our way. Go to nymag.com/pivot to submit a question for the show or call 85551 Alright, Scott. We're gonna have a quick break, and we'll be back for your fantastic and stellar prediction. I get so many headaches every month. It could be chronic migraine 15 or more headache days a month, each lasting four hours or more.
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Kara Swisher · 44:47
Why wait? Ask your doctor. Visit botoxchronicmigraine.com or call 4 to learn more.
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— Predictions segment begins —
Kara Swisher · 45:18
Okay, Scott. Let's hear a prediction. I already did by saying I think they're gonna settle soon. Twitter.
Scott Galloway · 45:25
Okay. So get this. This is from arguably my favorite economist, although I have a ton of favorite economists. But Liz Ann Saunders, the chief economist at Schwab. I think she's a great follow on Twitter. And she put out this amazing stat for basically in early twenty twenty one. If you could afford a house, a monthly house payment of $2,500 or a mortgage payment of $2,500 and you could come up with 20% down, that meant you could afford a house that costs $759,000 So if you were a couple going shopping, we can spend about $2,500 a month. We've got $101,150,000 dollars to put down. We can afford a $760,000 house. Now, with interest rates over 7%, that same couple, their purchasing power, they can buy a house for $476,000 So the purchasing power for a lot of middle class people has gone down $300,000 So the prediction is really easy. The housing market is about to get the shit kicked out of it. And there's some belief that, Okay, haven't produced enough houses, and that increase in interest rates creates handcuffs for people who can't actually sell their house, decreasing supply. There's some offsetting factors. I just don't think there's any getting around it. I think The US housing market, you're going to see more and more articles about prices coming down because people still need to move. They still need to they get divorced, they die, they get sick, whatever it is, they upgrade, they downgrade. And the affordability around houses for the same house, the same couple, same purchasing power, same income, can now afford much, much less. Anyways, my prediction is we're about to see a lot more articles about cracks and declines in The US housing market.
Kara Swisher · 47:08
Alright. Even despite the lack of inventory. Yeah. Probably. Yeah. I would agree. Anyway, things are sitting on the market, I've noticed. I... You know, I'm like one of those speaking of things that I spent a lot of time looking at Zillow. No good reason. And it's... A lot of stuff is really staying on the market longer. You can just see it. Okay, Scott. That's the show. We'll be back on Tuesday with more pivot. Obviously, get ready for our crossover episodes around the Twitter trial. But until then, we have lots more to talk about. Scott, read us out.
— Predictions segment ends —
Scott Galloway · 47:35
Today's show is produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie and Jotot engineered this episode. Thanks also to Drew Burrows and Miel Soverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. I'll see you later on, you ghosting bitch on my ring phone.
Kara Swisher · 47:57
Ghosting bitch. Okay.
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Scott Galloway · 48:55
See you
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