Moody's Talks - Inside Economics - Scott Galloway, the Optimistic Pessimist

Episode Date: March 19, 2026

The Inside Economics team is joined by Scott Galloway, bestselling author and professor of marketing at NYU Stern, for a wide-ranging conversation spanning geopolitics, technology, and generational justice. The group touches on the escalating conflict in Iran before turning to the transformative — and disruptive — potential of artificial intelligence. The conversation takes a sharp turn as Scott examines what may be the defining economic story of our time: the systematic transfer of wealth and opportunity from the young to the old. Rising asset prices, unaffordable housing, and policy choices that favor incumbents have left many young adults locked out. Rising loneliness and the economic disenfranchisement of young men are among the consequences the group explores. Scott delivers his trademark mix of provocation and hope in a discussion as entertaining as it is sobering. Guest: Scott Galloway For a deeper dive on AI and the macroeconomy, see our new paper, The Macroeconomic Consequences of Artificial Intelligence, where we model four potential economic paths over the next decade. We also walk through the scenarios in a companion webinar available now on-demand. Read the paper: https://www.economy.com/getfile?q=2B555C90-1118-4A49-BDAA-5C0A99F83A9E&app=download Watch the webinar: https://bit.ly/3OF6dn9 Email us at [e-mail] for more info about the Moody's Summit '26 Conference in San Diego Hosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, and Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s Analytics Follow Mark Zandi on 'X' and BlueSky @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy, the chief economist of Moody's Analytics, and I'm joined by my two trusty co-host, Chris DeReedies and Minister De Natalee. Hey, guys. Hi, Mark. Good to see you. Well, you know, I've got a lot of recommendations

with regard to the best pasta in the world, but we're not going to go into that. We'll hold that for the... Actually, a master chef weighed in on the best pasta in the world. So I can't wait to tell you what that is. but you're going to have to wait until the next podcast because we got a great guest Scott Galloway Scott hey good to have you on Mark's great to be with you and just a moment of history here

20 years ago practically to the date I was sworn in as a board member at the New York Times and immediately shuttled into a lunch where they had a guest speaker and the guest speaker was Mark Zandi so you were you were my first experience as a new board a new board member on the New York Times company and you came in and basically, you know, you have a very nice. Anyways, I can see why boards bring you in to tell them about the state of the world. Did I get it right, Scott? I don't remember.

I was so focused on myself and feeling imposter syndrome. I don't remember a word you said. You know, it was so interesting because back in the day, the New York Times was one of my first clients. And believe it or not, impossible to believe. but the single most profitable industry on the planet was the newspaper industry at the time. They were just minting cash, right? The health wanted.

Monopolis, yeah. What a comeuppance. Yeah, it's pretty amazing. Well, great company. Yeah, things have changed. Yeah, I saw you had their CEO on just your last market. Yeah, I had Meritathon. Actually, I had Meredith on yesterday.

He was a very talented CEO. Yeah, she's got her work cut out. They do a great job. Hey, you know, I would. I have to say, introducing you is very difficult because, you know, mostly I say this chief economist of this institution, CEO of that company, I looked at your bio and I go, my gosh, I mean, what a renaissance man. I mean, I'm not sucking up.

I mean, it's like amazing. I mean, tell me how you did. I think you have six books. Is it six books? Is that right? Yeah, something like that. Yeah. And, you know, oh, the thing that most impressed me, Scott, and I, you know, oh, the thing that most impressed

me, Scott? And I'll tell you what impressed Marissa. You were a fixed income analyst at Morgan Stanley. For all the wrong reasons, when I was a senior in college at UCLA, by the way, graduated with a 2.27 GPA. My roommate desperately wanted to be an investment banker. And I was very competitive with them. And I literally thought, if he wants it, I'm going to get it. I had no idea what investment banking was. I just knew that Morgan Stanley didn't check transcripts or do a drug test. So I thought this is the investment bank for me. And I got, as you can imagine, I'm a decent interviewer. And I had road crew and they got ran fixed income road crew.

So they said, you got an automatic hire because you're willing to kill yourself. And we like that amongst analysts. And of course, on day one, they handed me a cup and said, go pee in this. And I thought, I'll fuck. I've been here a day and I've already got to get fired. And I thought they were going to come back and say, we found some urine in your ganja. It was longer story, Mark. Longer story.

They didn't fire me. Well, and on to greater success. I'm NYU professor, marketing. You know, what haven't you done? I mean, it's just an amazing point. You're being generous. It's a lack of attention. It's trying to reinvent myself to feed my family is what it is.

Now the podcast and everything else. I mean, oh, Marissa, tell Scott what you. So we're talking about your bio. And so Marissa emails. And what did you say, Marissa? That you had a voice camera. in the white last season of the white lotus that's really impressed me of all your accomplishments yeah well marissa i'm glad you recognize that i absolutely carried that season

but but the funniest part is people start texting me going oh you're going to love this the lawyer sounds just like you on the white lotus oh it's funny no it is but i uh you got to be careful with every prompt i can take a 40 minute detour the they they got the producers are fans and called and said We'd love to do a voice cameo. I said, yeah, I'm in, fine. And I did it, and they called me and said, it's great, but it could be better. And I've heard, I've known enough about Hollywood to know that means they're about to cut it.

And it sucked. And the guy, Lucius Mulfei, whatever's name is from, Jason Isaacs, this handsome actor comes over and they say, we're going to send Jason, who is the star of the season over to help you. And for an hour, the guy would say, okay, with this line, I need you to, you're confronting the guy who has stolen everything from you and slept with your wife. Hit it.

And like taking my emotions up or down. Now you're embarrassed. Hit it. Hit that line. After an hour, I was sweating. And it gave me an absolute newfound respect for the creative community. You know, I thought, oh, just be me. But anyways, that was my 15 minutes of fame.

Even my kids were sort of impressed. That is impressive. And I didn't connect the dots, but I'll have to go back and take a lot. look. But I just also want to just let you know, I really enjoy coming on with Ed Elson. He's fantastic. He's fantastic. He's really good. He's 26, Mark. No. He's 26. Seriously? Wow. Yeah, I hired him out of Princeton. That's the most impressive thing about Ed Elson. He's 26. What were you doing at 26? Yeah, he digs deep, too, because he's really into this consumer price inflation, CPI. He's like into the, I thought I was into the weeds. He's going

into the DNA of the CPI. I go, Ed, you know. Yeah. No, he's good. Yeah, but he's very good. But anyway, so let's get to the meaning of the matter. There's so much to talk about. What obviously is top of mind, you know, for everybody is what's going on in Iran in the

Middle East. And, you know, let me frame it this way and can take it any way you want. But, you know, we're forecasters, right? We forecast the economy and we generate scenarios. And as part of that work, we have to make assumptions about lots of stuff. And in this case, we've got to make assumptions about how this is going to play out in the Middle East. You know, it's kind of what's in the middle of the distribution of possible outcomes. Obviously, this can go in a gazillion ways.

But what is the middle of the distribution look like, the so-called baseline? So with that, how do you think this is going to play out? You know, what do you think the kind of the endgame here is? Do you have a sense of that? Oh, gosh. I would say of all the predictions I make, I'm the worst at geopolitical. I find the markets are the closest thing we have to a crystal ball, because they're totally immoral. It's not an opinion supporting Democratic or Republican ideals.

It's not about your own beliefs. If people are willing to put money at something, that's kind of the best litmus test for what think is actually going to happen. And I find it, and I'd be curious to get your viewpoint, I'm almost a little rattled at how little the market seems to care outside of the oil market. I mean, what were 5% off highs, I think if you looked at the market right now, other than the oil spike, you wouldn't know what is happening. And if you were just to pull the aperture back, it looks like it's going to have a pretty damaging effect on Asian nations. You saw the Cospy off 7% in one day, you know, 20% of the world's oil flow, but 70% of some countries get their energy

through the Straits of Hormuz. I think long-term huge reputational damage to the U.S. I would describe the operation so far as operational excellence, but strategic incompetence. And on a macro level, I think the president's biggest mistake is not understanding that our superpower as a country and a species is cooperation in that he's under the impression with a third of the world's GDP, we can be the tail. to wags the dog of the world, not recognizing that the reason we were the operating system of the world is because 70% of the world's GDP, the West, decided to operate on it and respected our laws. We controlled the flows of oil, you know, escorting them with our Navy, our 700 bases overseas,

made sure that no rogue nation went to rogue. Now we are that rogue nation, and we've gone from 60 or 70% to 30. And I think that chickens are coming home to roost. I don't know where that manifests in terms of the market. because I think what's happening here, and I'm genuine, I want to get you and your co-host view, is that in past conflicts, the markets go down, and it ends up that that dip was a buying opportunity. And it feels like the market is saying, let's skip right to the buying opportunity and is a shock absorber, and not the markets haven't been that affected.

In addition, the reality is the majority of our blessings in America are not our fault. We have two oceans, friendly Canada to the north, harmless Mexico to the south, energy independent, food independent. What other nation can boast these things? You know, China, unbelievable economy, if we shut off their energy supply, they're kind of out of business in seven weeks. You know, Russia is way too dependent upon. I mean, we are so blessed with such, we're pretty much, you know, independent. What is it? 15% of our economy is imports, meaning most of them is like LVMH bags or BMWs, so we could survive without them. So despite the fact, we're the one moving the king. I feel as if the way I would describe it is we have someone

who's never played chess, who's decided to move the king to the middle of the square, middle of the table, and is wondering why he's getting attacked. But at the same time, we kind of own the room that chess has been playing in. It feels very unfair that we can wreak this sort of havoc and not feel the ramifications. But I'll end with a question. If you didn't know what was going on and you just looked at the markets as an economist, would you know what was going on? No. I mean, you can make a good point. I mean, my interpretation of that is that the markets think that Trump will stand down, that Trump is focused on the S&P 500, on the cost of a gallon of regular on leaded, on mortgage rates, on the 10-year treasury yield. And at the point where all those

things are signaling red and it feels like we're getting to that point. that he will stand down. And that's his secret sauce, right? That's his, that's a superpower that he can and will pivot and declare victory and move on to the next thing that he's going to do. That's my interpretation. It's a pretty dangerous kind of fragile equilibrium, I would think, but that kind of that's my interpretation of, you know, why markets haven't sold off, at least not yet.

Makes sense? Makes sense to me. Yeah. So, you know, do you follow the good judgment project? Do you look at that at all? That this is the super for. I've heard you talk about it. Yeah, the super forecasters.

This is, Chris, is this? U.S. U.Pen, isn't it, the University of Pennsylvania? Tetlock. Yeah, Tetlock, yeah. And they get these folks that are, you know, very well, they're highly educated, you know, very thoughtful from various disciplines. and they are asked these questions about the outlook,

what the forecast is. And one of the questions was, you know, when do you think we'll get a ceasefire in the Middle East? And ceasefire in a fulsome sense, you know, that the cessation of hostilities. Not that we solve every problem, but the hostilities are solved. And right now, last I looked, Chris sent this to me, about three quarters of the super forecasters are saying that we'll get this ceasefire no sooner than a month from now.

So sometime after mid-April, three-quarters, and almost half, say, after mid-May, so two months from now. Does that sound right to you? Does that feel right to you? Or you just, if you were a super-forecaster, I think you are a super-forecaster, where would you land on that question? You know, I'm finally at this age, finally, comfortable with saying, I don't know. You know, I feel like one of the pieces of advice I give to some of the people I'm mentoring when I'm on a board is not every issue demands your opinion or your judgment. And the, but the observation I have around Super Fork, I love that stuff. I make, I do a, every year my most viewed, you know, YouTube videos, I do a predictions deck.

and I look at a ton of data. I'm marinated in it with the team, and I make a series of predictions, right? What are we, the tech of the year, the stocks of the year, geopolitical predictions. I just absolutely love it, and I think that predictions are useful.

It's like what Eisenhower said. Plans are useless, but planning is invaluable. I think it's really interesting to make predictions because then people can challenge them and hopefully you learn and you can shape better outcomes.

What I have generally found is that thought leaders, analysts, economists, as a group, have incentives to catastrophize. And that is, if I give a prediction that, you know what, generally speaking over the next three to five years, everything's going to get a touch better every day. That doesn't get me a quarter of a million dollar speaking gig. That's just not, it's not that interesting. And also, the data is undeniable. The optimists, the Pollyanna have vastly outperformed the pessimists. And so every time I look at something, I always try to ask myself, and I say this out loud, and I want to be, I want to, I want to normalize being open about it. I struggle with anger and depression, which means I see everything, not everything, but most things through pretty dark colored glasses. I'm a glass half empty kind of guy. I'm so sick of everyone saying they're a fucking optimist. I'm not. You need an optimist to fly a plane. You need pessimists for seatbelts. We have a role too. But what I constantly have to ask myself after I make any,

prediction is the following. What could go right? And the people who have asked that in the markets and Bet Long have annihilated the pessimists and the catastrophes. So I find when you get a group of high IQ over-degraded individuals, be careful there's a bias to the downside. It's just much more interesting to talk about self-healing weapons that become sentient and kill us all rather than, yeah, it'll slightly increase productivity and we'll have autonomous cars. The former makes for a much more interesting presentation. So I always look at predictions as there's a bias to the downside and also it's the stuff you don't see that gets you. We weren't, we weren't, we weren't Antisic-1 CIA analyst predicted plane slamming into buildings, but we weren't worried about it.

I was not worried about, you know, a virus shutting down the economy. It's the stuff you don't see. So I think that, but anything we're all really worried about, do you remember when we're all freaking out about Greece defaulting? Oh, yeah. We spent a year talking about how Greece was going to default and all the Europe was going to come down on the globe. The moment of fear becomes the conventional wisdom.

you naturally start preparing for it and avoiding it. So I would argue, I try to make predictions around where I think the string that gets pulled. The most obvious string that gets pulled is 40% of the S&P is around AI. I think it's almost impossible for AI to live up to its expectations or valuations. One or two things needs to happen. We either need a massive destruction in the labor force over the next six months, six to 18 months, or we need these companies to be cut in half in terms of valuation. I absolutely think it's the latter.

I think the catastrophizing about this no one's going to have a job is basically an investor relations pitch to invest in my company. So I find some of that is way overdone. But generally speaking, whenever I hear these forecasts, I think it's really healthy to say, well, what could go right? And also, if we're talking a lot about a doomsday scenario, there might be a doomsday, but it's not going to come from where you see it. So the string I think that gets pulled is a massive decline in the valuation of companies. and now represent 40% of the SMP. And if you look at all of these big tech companies, at one point they've all been down 50% or more in 12-month period.

You know, Facebook was off 75% in 2020. Amazon was off 97% from 99 to 2001. It's different this time, though, if these guys go down, 50, 70%. If Nvidia goes down 70%, everyone's going to feel it. You're going to feel it in Indonesia, right? And then the other second thing, if I were to predict a scenario, it would be that these smaller markets,

Philippines, Pakistan, Afghanistan, Sri Lanka, who are hugely energy dependent, have massive increase in their energy costs, currency begins to implode, real risk because they have dollar denominated debt. I wonder if that puts huge stress on Deutsche or BNP Paribah, and then we start, those dangerous question that takes down markets is, who's next? Does this infect J.P. Morgan, where our banking system is. way too concentrated. Anyways, I love scenario planning. I think it's super interesting, but I try and focus on the stuff we're not looking at, because I find if about the moment everyone's worried

about something, wasn't the world supposed to come to an end and elevators are going to stop operating on Y2K? I find the moment everyone's talking about a fear, you need to fear it less. Anyways, that was my word style. Well, I mean, it's interesting how you pivoted like that. I mean, we were talking about Iran and you pivoted to AI. I do something. said before we go back to AI, because I definitely want to talk about those risks that you just mentioned, I just saw a clip you did with Kara Swisher. I don't know what podcast that was, but it sounded pretty dystopic. And you did mention the debt in some of these emerging markets. So it sounds like you are broadly pessimistic about the economy's prospects here, and Iran's

kind of front and center in that. Or am I just misremis. reading things. Look, Jamie Diamond was asked what a recession is, and he said something that happens every seven years. Mark, have you ever seen an, has there ever been an 18-year run like the one we're on? When has the market had the kind of bull run it's been on since 2008? Right, right. And then every time there's an exogenous event, which should be a transfer of wealth back

from owners to earners from old to young, the factory gets blown up, the owner loses money, labor has power because someone needs to rebuild the factory, we decide to keep the owners wealthy by pulling out the credit cards of the next generation. I don't know how long we can keep doing that. At the same time, it's not that bad for us because everyone's doing the same trick. So it's like, what is the, it's not even, we're no longer a safe haven. We're at least shitty haven. Or a less shitty haven. We're, we're, okay, so you're going to go into the end of the Franklin? Like, what's better right now than Treasury? So look, I think that I do think we're in for, I just think it would be weird to not have a 20 or 30% correction.

And quite frankly, I don't want to say I'm ruining for it. But the reason I get to live the life I lead is that in 2008, when I was coming into my prime income earning years, we bailed out the banks, but we didn't bail out the economy. And we let stocks crash. And I got to buy Apple, Amazon, and Netflix for $8, $10, and $12 a share. I got to buy a home in New York. And it was, I think, you know, $800 a square foot, not $2,500 a square foot. Where does a young person find disruption and opportunity now? So it seems to me there's just this mindset where the people who control the government and the purse are the owners.

And the owners aren't willing to see their wealth go down, but they are willing to, you know, the joke I use is, the club doing champagne and cocaine, and the closest that the younger generation gets to the club is they can throw their credit card in in case mine gets declined, and I can use theirs. I don't know when that stops working. At some point, it's got to stop. But to me, if we woke up, well, let me ask you this. If in say, don't say by the end of 26, I was going to time around, but by the end of 27, if the S&P was down more in the 30s, as opposed to 47,000 winner, wouldn't we look back and say, well, of course it is. Of course it is. Look at the PE ratio. Look at the fundamentals. Look at the income inequality. Look at the risks. And also, my question is, as long as it doesn't involve viruses or too much war, or any war, I should say, would that be the worst thing? Right, right. I mean, I agree with, I tend to, I'm sympathetic to what you're saying. So going back to AI and AI stocks, I think you pointed out that 40% of the S&P is tied up in these hyperscalor stocks. And it's, it's rising. And I think if Open AI and what's Musk's company? SpaceX, you know, went public. It probably be those companies would be,

together with the hypers, 50% of the market, and valuations are very high, that in fact the risks there are quite significant. But, you know, kind of the way I think about it is that if you told me, the SMP 500 today is just under 7,000, if you told me it was 7,000 a year from now and 7,000, two years from now or 7,000, three years from now, that sounds about right to me, something along those.

We might get a correction, but, you know, that wouldn't be my baseline forecast. That would be, that's a possibility. the risks are high, but basically the market goes flat here and lets earnings and everything else catch up with it. But, you know, clearly a ton of risk around that. Let me ask you, it sounds like on AI, though. I'm sorry, I said 47,000. What am I thinking of the Dow? It might have been the Dow. Yeah. Yeah, there you go. On AI, you mentioned two risks. One was the correction in the equity market, a decline in stock prices. The other is this kind of dystopic view

that's kind of come to the fore here about AI actually generating a lot of productivity gains, profitability, justifying these high market valuations, but only because it wipes out a lot of jobs, that you get a lot of job destruction here in not over the next 10 years, but in the next year. And particularly in the context of an economy that is not creating any jobs anyway, that feels pretty uncomfortable because we'll get some outright job loss. It sounds like you acknowledge that as a risk, but that's less pressing of a threat than the correction in the equity market. That AI is not going to live up to the hype or to the promise that people have put forward. One of three things needs to happen.

If you look at the valuations and the revenue growth that's needed to justify the valuations of AI-centered companies, they either need to help their clients that are buying, making huge expenditures, mostly in the enterprise market, around site licenses, is to come up with new products that drive new revenues and new markets. I don't see a lot of new AI moisturizer. I don't even say, I mean, I just don't see a lot of new AI products other than the LLMs themselves that are getting people to go, these AI driven curtains are just a superior. There's just not a lot of quote unquote AI consumable products other than AI itself that promises that L'Oreal, if you sign a $3 million site license with Anthropic,

will increase the revenues. I don't see almost any incremental revenues right now from the people who are signing up for these huge expensive site licenses. Now, that means you've got to go to efficiencies. We're going to justify the cost and the valuation of this company and maintain 4 and 500% of your growth

because everyone's going to spend more and more in these things because we'll get efficiencies you'll cut your costs, which is Latin for layoffs. Right? And I do see some of the, that. I see it personally. I'm not using my lawyer as much, you know, but, but what I think you have is the following. What's a better narrative for a CEO? One, I overhired during the pandemic. I need to lay off people because I overhired. Two, I hate to admit it, but demand appears to be softening,

so I'm going to rationalize my employee base, or I'm part of the Pepsi generation, and I get technology. And I understand AI, and I'm going to lay off 40%. You know, Jack Dorsey laying off 40% of his staff is more managerial and competence than it is leveraging AI. So which narrative takes your stock up instead of down? I'm not very good at what I do. I overestimated demand, or I am one of these new masters of the universe who knows how to drive AI. And using AI, I can lay off X thousands of employees. So one, you either need to have, incremental revenues that are dramatic, don't see it almost anywhere. Two, I need to cut costs or give people the ability to do more with less. That's the narrative. I don't think the reality,

the music nearly matches the words in terms of the reality. Supposedly the listing, the job listings for computer programmers is up this month. I see a no hire, no fire environment. I don't see, and I do see some layoffs, but youth unemployment, 10%, unemployment, four and a half. It doesn't look like it's a labor catastrophe right now, which takes me to door three. And then as, yes, some incremental revenue, mostly around autonomous and things like that, new products, a decent amount of efficiencies, which will put strain on certain job sectors. What door number three is, these companies come down 40, 60, 70 percent to 30 times revenues instead of, you know, 40 or 50 times revenues. So, and also I can't.

stand the catastrophizing from these AI founders after they vest their shares, sell them on the secondary market, and claim that the world is in peril. I think that's another thinly veiled buy my stock. I'm not going to tell you what the peril is or how to solve it. I'm just going to claim that this is so scary that you should invest. I think that's a giant wrap around buy my stock. And then I don't think we're talking about the real risks of AI. And again, it's not where you see them usually. You know, what are the risks? They become, it's become sentient and in a millisecond decides that it should kill us. I always think there's an off switch. I'm not a philosopher. A lot of people smarter than me think it's a much bigger threat.

I get it. I was fine. There's a wizard behind the curtain and you can turn it off. It becomes self-healing weapons that come for us. I don't see any reason why AI can't be leveraged as much for defensive capability to identify soft tissue around terrorist attacks, to identify opportunities for arms reduction, to create a shield. Why can't it be used as effectively defensively, as offensively. Income inequality? Yeah, but guess what? Don't blame it on AI, folks. Blame it on all of us. We continue to vote for people in both parties who put up with massive tax breaks for the wealthy. And the incumbents want to pretend that its network effects or globalization or technology bullshit. It's carried interest loopholes. It's not having alternative minimum tax.

It's a tax code that's gone from 400 pages to 4,000, and that 3,600 pages are there to screw the middle class and transfer wealth from young to old full stop we've all engaged in it it's happened citizens united gerrymandering etc the real risk in my view is something we're not talking about from a i and that is loneliness and that is men age 20 to 30 are spending less time outdoors now than prison inmates 42% of men have never asked a girl out in person 62% of men age 20 to 30 are not even trying to date because they unfortunately Fortunately, we have connected our economy to an attempt to mature or evolve a new asocial, asexual species called a young male.

And they're up against this indomitable foe that every day is trying to convince them they can have a reasonable facsimile of life on a screen with an algorithm. Why go through the pecking order of friends when you have Reddit and Discord? Why go through the bullshit of it the corporate world when you can trade stocks or crypto on Robin Hood or Coinbase? And why on earth would you make the effort to shower, look nice, have a run, wrap, have a plan, the expense, find someone with better taste than you to dress you, go through the rejection of approaching a stranger and expressing interest while making them feel safe,

having girl friends who can teach you how to behave around women and maybe introduce you to some of their friends. Why would you go through all of that expense and effort and rejection when you have life like porn? So I worry that we are evolving the most dangerous person throughout history, and that is a young man who is not economically or emotionally viable, and AI is speedballing it. It's giving these young men the sense they can have a life sequestered from the most important thing in life, and that is relationships. Jesus, I was a TED talk. Thank you. No, no, that was great. That was great. And it gets into your book. But I do want to take again one step back on AI. You know, you sound like an economist. I'll have to tell you. Economists say,

oh, you know, I look at forecasting. I look at history to do my forecast. I look at past technological innovations, even big ones like the Internet. And they diffuse the economy slowly enough that, you know, that we can all adjust. You get some job losses over here. You get some job gains over there,

and they're all kind of nets out. But, and you might have a bump along the way, like the Y2K bubble bursting. It all kind of works out. And that has been the history, and that's what economy state is going to happen here in the future. But I'll have to tell you, and that's kind of my position on this, too, that I take the same view. But I listen to these folks in the tech world and how certain they seem to be with regard to how massive the changes that are coming. And I see it in my own work.

You know, I can, you know, we, we are an information company and AI will play a big role in what we do. And it is changing the way we think about, you know, our workforce. So it used to be the case, you know, that there was a high correlation between the number of people that work for you and your revenues and profitability. So if you had more people, that was a good thing. That was just an indication that you were doing, right? Now it's just the opposite. The more you can say I'm producing my work force, at the same time growing my revenues and profitability, you know, I'm rewarded for that. I'm, you know, that is, and it's expected because of the new tools of AI proffers.

So, you know, I'm with you, but I just, I'm so worried I've got this wrong because I've got such bright people on the other side of this that are so certain or seemingly certain about, you know, the promise. and I can kind of feel and taste that promise myself. That doesn't bother you that, you know, you've got these strong voices on the other side. Look, I've got to be honest with me. I think they're full of shit. Okay. Okay.

All right. I think you feel better. I think the people who are so certain are the founders of these companies who are supporting their valuations. Okay. You're going to be able to lay off 40% of your workforce if you just buy more site licenses for me. Right.

I don't hear. And the CEOs claiming that it's AI destroying the labor force are the ones trying to wallpaper over their managerial incompetence to forecast demand. I don't doubt that there's going to be an impact. And it's all relative. When I graduated from business school in 1992, 40% of us had jobs. I teach at Stern. A couple years ago, we had to tell kids to stop interviewing once they got to five jobs. So if things get a little rough for a little while, I think we've absolutely. you know, been through worse. Also, I don't see any reason why this isn't like any other technological revolution, and that is in the short run, there's job destruction, but we end up with more jobs. 150,000 new business applications in 2000. It's probably going to be 600,000 this year. When I graduated in business school, there were only two entrepreneurs, and the second one was my co-founder. There was very little opportunity to start a business at 27 back then. I can't imagine the kind of new businesses they're going to come out of basements and dormant. room rooms using AI as a scaler where with three people you can do what 10 or 20,

automation was supposedly going to gut the middle class, or at least got all employment in the Midwest. And we did lose some jobs on the factory floor, but we didn't anticipate heated seats or car stereos. Now there's more people employed in the global auto industry. So I don't understand why this wouldn't follow the same pattern, and that is some job destruction. The V might be deeper here. I want to acknowledge that.

But then over time, we transition to better jobs, higher paying jobs. What we're bad at in the U.S. is taking care of the people on the wrong side of the trade. What is it? Norway spends 2% of GDP on retraining and vocational. Our attitude is we believe in winners and losers. The safety net here is basically a concrete floor, right? So I think there's going to be real pain. But all these big projections and all this catastrophizing, I find, is 60, or 70% is either someone saying, buy my stock, because this is a world-changing technology,

or a CEO wallpapering over the fact that, okay, I need an excuse for why I overestimated demand or over-hired during COVID. I want to be clear, a lot of really smart people totally disagree with me. And you brought up an interesting thing around, I serve on a bunch of boards. I find that AI is like corporate OZMPIC. And by the way, I think GLP1, and I've said this, I think GLP1 is a more transformative technology than AI. Oh, is that right? Oh, interesting. Talk to someone who uses AI every day and is on a GLP1 and ask them what's having a bigger impact on their life.

Okay, good point. Anyways, on a board, we're now, you summarized it perfectly. When you're on a board, the CEO comes to you and says, okay, this is my plan for next year. I'm going to grow revenues by 8%. EBITDA by 12%, and I need approval to hire another 6%. It's just like, if I'm going to keep growing, I need more calories, and calories are people. For the first time, for the first time, AI has said, let's turn off the switch that growing revenues automatically needs I need more caloric intake.

And no one likes to talk about this because it doesn't make very good all hands. But every board member is asking the CEO, how can you do more with less? because I think the most similar learnings call was, I think, three, four quarters ago. When Meta said, we grew our revenues by 23%, oh, with 20% less headcount. And every board of every tech company in the world said, can we have some of that great taste with less calories? But it doesn't make for good all hands to say, I've got good news we're going to grow revenues by 10%. I've got even better news I'm going to do it with 5% fewer of you. but I find that AI is basically now all board members and investors looking at their CEO and saying,

can you grow with fewer employees? But those layoffs, I mean, I hear all these people crying into TikTok that they just got laid off from Alphabet. This is what it means if you got laid off from Alphabet. You went to an elite school. You have an amazing resume, and you're probably sitting on somewhere between a half a million and four million in options. Cry me a fucking river. And you and some other of your laid off. off friends or friends that you went to Princeton with, understand technology, understand the

intersection between health care and manufacturing and AI. And if you've been an alphabet longer than four years and you just say I was on the AI team, you can probably go raise $10 million. So I think we're going to, again, I like to ask here, what could go right? Yeah. What could go right? But I find the catastrophizing is a little bit overdone. Yeah. I'm just saying it's guys. I don't see this glass half empty kind of person in front of the field just the opposite to me. That's a head fake. It's wanting to be contrarian,

so I get invited on podcasts like this. That's definitely a head fake. We're running out of time. I can't believe the conversation is moving here pretty quickly. But I do want to turn to your teasing this about the kind of the angst on we among, I don't know if that's the right word, but the kind of existential dread that many young men feel.

You know, I guess the question I have for you first is, is it just young men or is it just young people in general? I mean, Gen Z, men and women. Is there a really distinction there? Well, it goes from bad to worse. Young people economically, people under the age of 40, 24% less wealthy than they were 40 years ago. People over the age of 70s, 72% wealthier than we were 40 years ago. My generation just doesn't seem interested in paying it forward. If you look at in the past decade, I mean, people under 40 used to hold 12% of household wealth in 1990.

Now they hold 7%. And over 55, it used to be 56% of wealth. Now it's 73%. So young people, you know, we call them entitled. I think they're entitled to be enraged. And the means of getting ahead, forming a family, developing wealth are primarily college certification and housing permits. And because the alumni and administrators get to sequester the supply of college degrees,

me and my colleagues have decided that the ultimate strategy for reducing our accountability and increasing our compensation is an LVMH strategy where we reject 90% of our applicants, despite the fact that if I'm sitting on an $8 billion endowment and in the middle of nowhere and I could let in 6,000 people, not 600, Dartmouth, my alumni and the donors love this scarcity mindset. And then taking housing permits out of the hands of bureaucrats and putting them into homeowners was a terrible idea. Because the moment you own a home, you become very concerned with traffic and don't want any more housing permits. And the result is that college costs and education, which are key to forming a family, building wealth, building, you know, skills to get, they've skyrocketed and costs. When I got out of Berkeley, I made $100,000 a year.

I didn't take the job, but I was offered $100,000 a year in consulting. I bought a house in Petrero Hill, San Francisco, for 280,000, 2.8 times revenues. Now the kids coming out of Haas make 200 grand, great salary. Average cost of a house is 2.1 million. My industry is the ultimate luxury brand. Ferrari sells a car at 400,000, at 40 points of margin. We sell a four-year degree in an elite college for 500 grand total costs at 90 points of gross margin. There's never been a luxury brand that has transferred more wealth from middle-class households

to the faculty and administration and endowments like college. So I think what we have in the U.S. is this dangerous, rejectionist culture that is transferring money continually from young to old, from earners to owners. Each year we transfer $1. trillion from young people to the wealthiest generation in the history of the planet, Social Security. And if you bring up Social Security, it means I can never run for office.

Why on Earth are we transferring $1.3 trillion to the most fortunate generation in history? I'm not suggesting we should let old people die on the street, but for God's sakes, if you have assets worth over a few million dollars, you shouldn't get Social Security. And let's move it back to 75. What 65 year old is retiring right now? Anyway, so we have purposefully screwed young people to prop up my wealth, and that affects men and women, who it disproportionately impacts as men, because we don't like to talk about this, but women are disproportionately evaluated on their aesthetics unfairly, men are disproportionately and unfairly evaluated on their economic viability. And when a 25-year-old dude doesn't have very many economic prospects, didn't get the right

certification and is living at home, which one and three men under the age of 25 are and has no romantic prospects, he comes off the rails. When a woman doesn't have a relationship, only one and three men are in a relationship under the age of 30, it's two and three women. You think, well, Scott, that's mathematically impossible. It's not because women are dating, it's not because women are dating older because they want more economically and emotionally viable men. And when a woman doesn't have a relationship, she tends to pour that additional energy into our friend network and her work. And when dudes don't have the guardrails of a relationship, they end up pouring that energy into conspiracy theory, misogyny, anti-immigrant behavior,

and some they become shitty citizens. So while we have this cartoon of poor Lisa in our 30s, never found romantic love and she's in the corner on a rainy day with her cocoa, lightly crying. Lisa's just fine. It ends up men need relationships much more than women. If a man hasn't cohabitated with a woman or a male partner or been married by the time he's 30, there's a one in he's going to be a substance abuser. So the economic gutting of young people and the transfer of wealth we have all engaged in from young to old has been bad for all young people. It has been especially hard on young men. I got a stat for you.

So we construct estimates of spending, consumer spending personal outlines by different demographics, so we do it by age. And, you know, we have to, it's, we use Federal Reserve data, so there's a lot of calculations and some assumptions, and there's, you know, easily criticized. But given all that, if you look at spending since the, right before the pandemic, so the, you know, right six past six years right before 2019 till now, average annual spending growth by

those under the age of 35 has been 1.5 percent, 1.5 percent per annum. By the way, inflation in that period, 4 percent per annum. And if you look at above 35, you know, all the way through over 55, the average annual growth I'm rounding is 5%. So people over the age of 35, they've gotten real income gains, you know, after inflation of 1% per annum. Those below the age of 35 has seen real income declines of, you know, you can do the arithmetic, but three, about two and a half percent per annum. And I think that, I'm an economist, everything looks like the economy to me.

That kind of sums it up, you know, that I think that's why. And a lot of this spending done by the folks in the bottom, 35, as you pointed out, is done based on taking on debt, you know, credit card debt and other things. So just highlights the stress that they're under, particularly in the context of the lack of hiring. And then the result is 40 years ago, 60% of 30-year-olds had a child in the house, not the 27%. And I'm very open about my finances when I was in my 20s and 30s and even 40s. And I was an academic, you know, starting companies. And I was making, I was making a really good living, like high hundreds of thousands, five to $800,000, which seemed like a lot of money to me.

Living in San Francisco in New York, I was paying 45 to 50% tax rate. And then I got really lucky. I started a company, a couple companies that I sold. And I made real big money. My tax rate, and then I moved to Florida, my tax rate plummeted to the high teens. So that make any fucking sense? My last company, I sold for $160 million. The first $10 million was tax free. What? I mean, enough already. Enough. And then the Republicans will say, well, we want to encourage our most productive citizens and we want to encourage entrepreneurs to start companies. No entrepreneur knows the tax code when they start a company. Yeah.

That's not, you don't think, oh, there's 1202. I think I'll start a business. No, we have incrementally, moment by moment, voted for tax policies that transfer money. It's not even from the poor to the rich. Bottom 50% don't pay that much federal tax. It's from young to old. And what do you know? They're anxious, they're obese, depressed. Well, why wouldn't they be? They can't afford to find a mate. They can't afford to have a kid. They can't afford to save for a house.

So fuck it, I need dope. I think I'll hit the gambling apps. Or I'll just stay at home and have, I mean, think about what young people are up against right now in terms of this thing in their pocket, a million times a day, a second, trying to figure out the next. cute video, the next incendiary video, life like porn, a chance to bet on the next pitch, or whether it's going to be a run or a pass in the Jets game. And they're supposed to build a life. Who watches the Jets? Why did you put the Jets? There you go. That's where I lost you. That's where it became unbelievable. I'm just saying. Anyway, you know, I want to throw out one other stat. just again, everything looks like the economy to me that might be a little more encouraging in this this male versus female discussion is that, you know, males tend to work in goods producing industries, or at least historically, manufacturing, construction, transportation, distribution,

that kind of thing. Women, they work, tend to work in health care. And interestingly enough, about, I think it's about 15 years ago, the number of people working in the goods industries fell below the number of people working in the healthcare industry. And right now, it's a big difference. I was just looking at the data. Twenty-eight million people now work in health care in about 17, excuse me, 20 million work in the goods producing industries. But that, I think we might be seeing the apex of that, you know, given everything that's going on. So we might start to see more jobs in the good producing side of the economy, and that would, you know, if everything stays the same, help to lift the economic fortunes of males versus females. What do you think?

That's hope. Well, that's hopeful. And I think hopefully. Chris is shaking his head, no, by the way. He's saying no. Well, we've tried to degenderize or figure out, I think up until three years ago, there were more CEOs named Bobbed and there were female CEOs in the Fortune 500. Oh, wow. And we have seen a dramatic increase in sea level executives that are women, we have done, we're doing a better job at degenderizing senior level positions, but we also need to degenderize and defeminize, if you will. There should be more male nurses. There should be more male school teachers, right? Instead, it feels like, well, I'm not a real man or I'm embarrassed to say I'm a nurse, right? So I think that there's opportunity there,

but also, and just in terms of mental health, there's a real argument that if you're middle class and you have Netflix and cheap calories, you're living better than the richest person was 100 years ago. There's really good arguments economists can make. Like, stop complaining. If you take a hot shower, you know, you're doing okay. And you can afford cheap calories and Netflix. You're doing okay.

But that's not how the human brain works, especially young people go on Instagram and go, oh my God, I don't have Kylie Jenner like cheekbones and I don't look ridiculously hot in a bathing suit and my boyfriend doesn't have ripped abs. And I haven't made $10 million on crypto and I can't afford to fly to St. Bart's in a G650. I must be a loser.

So every day people are young, especially young people who are glued to their phones, are reminded that they're, or told they're kind of they're failing. So I think they're up against, I think so much of this is big tech, which is just ripping at the fabric of society, dividing us,

and just destroying the self-esteem of young people. And also it's just going to make to young people, especially hard on teenage girls, how it just attacks her self-esteem and creates just an impossible benchmark for them to live up to. So I think young people are really up against it. And then we come back and say, well, hold on, your income's fine.

You know, you can get streaming media and, okay, but I just feel shitty. I feel terrible. And then going back to the men's crisis, if you walk into a morgue, if you walk into a morgue, there's five people who died by suicide, four men. And teen depression and teen self-harm has skyrocketed since social went on mobile in 2012. So I think there needs to be a series of public policies and initiatives and a reconfiguration of our tax policy that says, okay, we need to level up young people.

We need to stop this transfer of wealth. Washington, D.C. has become a cross between the walking dead and the golden girls. And we basically vote old people who vote themselves more money. Enough already. The child tax credit, $40 billion, get stripped out of the infrastructure bill, but the $120 billion cost of living adjustment for Social Security flies right through. It's time for, can you, Mark, I think you're about my age. I don't know how old you.

I was born in the 60s. Can you think of a generation that has ever recognized the type of prosperity with the low taxes we have paid in the history of the world? No, I'm sympathetic to what you're saying. Absolutely. I've always thought that the Social Security and other entitlement programs should be more like insurance policies than entitlements. Right?

I mean, the argument against that is that you lose political support. If everyone doesn't get Social Security. You don't get elected. Yeah. But, I mean, or you wrote the underlying base. Right now, everyone's Social Security, so everyone's in support of it. But I am sympathetic to that. I don't know that we can pay, you know, people like us, you know,

get the same kind of benefits and more because we can take care of ourselves. And we need those resources for the older individuals that can't afford it. And for the young people, you're right. I think we are, you know, making life very difficult for them. I want to be respectful of your time, Scott. Do you have a – I monopolized completely the conversation. Can we do a lightning round with Chris and Marissa? Would you be up for that or do you need to hustle here?

No, no, no, I wanted Lyra, especially I want I want a woman under the age of 40 to provide some feedback. Oh, thank you. I am not under the age of 40. So you want to fire away Scott? Lightning round? Sure. Yeah, there's a lot. There is, yeah.

I totally agree about your comments about social media. and what it's doing to younger people. Me and Chris are actually in the generation we're not talking about, right? We're in the Gen X's who always get overlooked. Overlooked. Gen X, who's Gen X? Exactly. Me and Chris.

Yeah. Oh, okay. Yeah. So are you advocating? And I also think that AI is just going to make that much, much worse, what we've seen with social media. I mean, AI is the next generation of that. So are you advocating for policy? What would you advocate for from a policy perspective in terms of social media or social media

companies? Is that part of what you're advocating for? Sure. First off, shout out to my Gen X brothers and sisters. We're the real gangsters. I used to leave my mom's house at 8 a.m. on a Saturday with a Schwinn bike, 35 cents, and an Abbasabab bar. And she wouldn't see me for 14 hours.

I would navigate bullies, dogs. you know, gangs of 13-year-olds. And the idea, like now, if my 15-year-old is five minutes late from school, we call MI6. I mean, we were the real gangsters. Anyways, I'm absolutely about regulation. And the delusion or the illusion of complexity stops us from being, or makes us bereft in believing we can't fix this.

We screwed this up. We can unscrow it. One, removal of Section 230 for algorithmically elevated. content. If you can reverse engineer content to a teen girl killing herself, you should be liable. And at some point, someone to go to jail. And they'll figure out how to use this technology to identify when people are having suicidal ideation and stop that content or notify the authorities. There was an 18-year-old woman, girl on Open AI. Was it Open AI? I don't know, on AI and an AI platform casing a school and then showed up and started shooting them. If I'm drinking in a bar and I'm really

drunk and they keep drinking and they keep serving me alcohol and I kill someone, the bar is liable. If these folks can figure out a way to the exact moment to serve you an insurance ad, they can figure out when you're downloading floor plans of a school and asking questions that clearly indicate you're going through psychosis and planning violence, they should be liable. This rule is written in 1997. It needs to be done away with or at least reform. We need antitrust. These companies are way too powerful. And when you have this type of economic concentration, you have a transfer of rents from consumers and labor to shareholders. We've optimized for shareholders, not for the Commonwealth, not for labor. So break them up. And then we need to absolutely age gate.

There's just no reason anyone under the age of 18 should be on social media. And the notion that Mark Zuckerberg gives a flying F about the First Amendment rights of a 14-year-old, which he claims he's worried about the free speech of a 14-year-old. There are basic common-sense solutions we all agree on. But unfortunately, because of Citizens United, both Democrats, and Republicans have been weaponized. Republicans will make the argument that's about the free market, and Democrats will have thoughtful questions. They want to talk about a committee as Senator Schumer's daughter continues to work in META.

We need to elect a group of individuals who do their goddamn jobs, and that is prevent a tragedy of the commons. And when we look back on this era, apologize for the non-lightening lightning round. When we look back on this era, we're going to regret income inequality. We're going to regret divisiveness, polarization, the coarsening of our discourse. But the thing we will regret most is we will ask ourselves, how did we let this happen to our kids? And I am not immune to this. I'm a father of two boys, 15 and 18. They have both struggled with device addiction.

I can't figure this out. I have resources. I am very aware of these problems. And I can't handle it. 70% of the anxiety in my household between me and my kids, between me and my partner is over that fucking phone. Enough already. We need elected representatives who have the domain expertise in the backbone to start doing their job and regulating these companies. Okay, Chris, are you going to bring us home? I guess. I don't know. Hopefully, a short answer, but we'll see. Sorry about that.

Not at all. I like the riffing. Yeah. Yeah. So back to AI. And along the lines of device. I'm the father of a nine-year-old son. So a lot of what you've said certainly resonates me, things are.

I'm thinking about trying to keep the devices away. But in terms of AI, this is happening. This is not a potential. Maybe it comes, maybe it's transformed. There's a question of the degree of transformation, as we've suggested. But clearly, there's going to be a transformation here. And it's certainly, as you pointed out, going to continue to have a very deleterious effect on young men and on the younger generation. I'm wondering what your solution or what your thoughts are around being able to leverage the power of AI in a positive way.

You mentioned that we can solve a lot of problems with it and avoid the downfalls here. I don't have a lot of solutions for the upside of AI other than in some. I think it creates tremendous economic value and we should have a more progressive tax structure. I just think we need an AMT, an alternative minimum tax on corporations and the super wealthy. that says, okay, if you're in a blue state paying 48%, fine. But if you're a corporation or a wealthy individual, and for whatever reason leveraging tax loop policy, you're paying less than 40%, we're going to charge you 40%.

I think the basis of a capitalist society is we let our thoroughbreds run, engage in full-body contact violence, such that they can innovate, create tons of margin, and we get to tax that at a fair rate. I like the way that works. And then smart people allocate that money towards our Navy or food stamps or et cetera. I see simpler solutions for young men and your son. I actually think, I think we'll have most of this figured out, not or a lot of it.

Your son's at the right age. It took us 30 years of tobacco, 20 years with opiates, social and on mobile, 2012. I think by 2032, we'll actually have some common sense regulation here because it's getting that bad. But in terms of your son, the fact you're even asking this question means your son is going to be probably fine. and that is the most important thing for his son is the involvement of a male role model. If you were to reverse engineer when a man came off the tracks,

if you were to look at the single point of failure, it's when he loses a male role model through death, divorce, or abandonment. The moment a boy loses a male role model through one of those three things, at that moment he's more likely to be incarcerated than graduate from college. And what's interesting is that girls in single-parent homes

have similar outcomes of college attendance and income and self-harm. What it ends up is that while boys are physically stronger, they're mentally, emotionally, and neurologically, much weaker than girls. And so your involvement in your son's life is the pivot point, the strongest indicator to the upside of a good outcome.

And then what I would encourage Chris and Mark and Scott to do is that men of our generation aren't stepping up. there are three times as women, three times as many women applying to be big sisters in New York as men applying to be big brothers. I think the ultimate demonstration of masculinity is to get involved in the life of a child that isn't yours. And there are single mothers everywhere. And it's very easy. You find them at work and say, hey, does your son want to come over and hang out with me and my boy were going to a game and washing my car with your son? And the answer is yes, always. Because moms recognize pretty quickly, especially single mothers, that the presence of a male role model is

really important. And when I started saying that five years ago, it triggered people. Women can't raise men? Yeah, I was raised by a single immigrant mother, lived and died of secretary, a lot of my life. But she understood I needed to have men in my life. So anyways, Chris, you're the answer. I think the text's mostly going to be figured out or at least be regulated. But the fact you're even asking a question, being involved in present in your son's life, that, quite frankly, is the strongest signal that your son's going to be fine. You know, Scott, I'll have to say, you ought to think about running for president. I'm just saying, I mean, make a lot of sense and very, very convincing and highly articulate and really appreciate the opportunity to have a conversation with you. So,

thanks for coming on. And with that, dear listener, we're going to call this a podcast. Talk to you next week. Take care now.