Pivot - Bezos vs. the world, retail in India and Scott’s earnings predictions

Episode Date: January 24, 2020

Scott co-hosts with Erica Anderson (Pivot's indomitable Executive Producer!) and they talk about the Saudi's hacking Jeff Bezos' phone. They talk about how Amazon has the power of its own nation and the implications of that. They talk Apple encryption part II, after a Reuters story revealed that the company had ended its plan to encrypt the iCloud at the request of the FBI. In listener mail, a former NYU student wants to know how Jeff Bezos' promised $1 billion investment in India will affect the country. Britain's new policy to protect minor's data is a win. Netflix admitting that Disney+ is cut into their subscriber growth is a fail. Scott predicts Uber is going to show poor earnings next week. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi, hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for business can always be a pleasure. Hi, everyone. Get started at HubSpgy. I want details. This is such bullshit. This is so, you're going on probation as an employee of Vox. I got a picture from

Cheryl last night where she was out partying with a bunch of her friends. And I think things got a little dirty. And now she's nursing the mother of all hangovers, and she tells you to step in. I think this is total bullshit. What was she really up to last night? I mean, Scott, let's be honest. You're projecting. That's more you than Kara. I think—

I'm just angry I wasn't invited. If you have the photo, I implore you to post it. Otherwise, I know that Kara, she doesn't get sick often. So let's be nice to Kara. Or do you want to troll her since she's not on? Well, we'll soon know as I sent her a video to download on WhatsApp. So I'll soon know everything by the end of the day. Great.

All right, good. See, that's some political humor there. Okay, so now that she's out, let's do what we should do best, and that is talk about Kara behind her back. I think Kara is the type of person that remodels a home just so she can drive up in a pickup truck and yell at everybody. Your turn.

Yeah, oh, do you? Your turn. Well, I think Kara, I don't know, man. It's so hard. I can't talk shit about my boss, Scott. Let's be honest. Oh, that's right. She's your boss.

That's right, yeah. She's kind of my boss, too. She doesn't get mad, but she's direct. Oh, she gets even. Yeah, she gets even. It's been a good year working for her. I started a year ago, and we've had some fun experiences, like going on the set of Silicon Valley. And, you know, I insist that I'm on her rider and get to go in the trailer with her and eat all the food.

But the reality of that situation was, is like she didn't, you know, she didn't even want to run her lines before the show. So I had to sit her down and prep her. But, no, to be honest, she's such a pro. She's fun to work with. And you were at Twitter and Google before taking this job, right? Yeah. Yeah. I mean, I think like my career has been a bit of a, I don't know, it's been all over the place, but actually very specific. I mean, I'm obsessed with media and I'm also really interested in strategy. So, like, my work with Kara is combining those two things. Like, how do we take this ecosystem that Kara's built for herself, which is the column, the podcast, the appearances on CNBC, and, you know, make her bigger. And it's

part editorial strategy and it's part business and partnership. So, yeah, we kind of do it all together. It's really fun. Yeah, actually, Kara's enabled me to bring two of my favorite things together from a professional aspect, indignance and anger. She's helped me meld those two things. So, let's get on. What's the news today? A lot of news, Erica. Yeah, there is. Let's talk about Bezos. So, last year, Scott, as you remember, Jeff Bezos had his phone hacked and some embarrassing pictures came out. Well, it turns out now the story that's unfolding is how the hack happened. And spoiler alert, we are back to the Saudis. So this week, reports came out that Jeff Bezos had his phone hacked by the Saudi crown prince months before the assassination of the Washington Post journalist Jamal Khashoggi.

In 2018, Jeff Bezos had a running WhatsApp conversation with the crown prince of Saudi Arabia. And MBS sent Bezos a corrupt video file, which then got a lot of information on Bezos' phone. And Saudi Arabia denies the claim that they were behind this hack. But experts at the UN say that they have a medium to high confidence that the phone was hacked by the crown prince's corrupted video file sent through WhatsApp. And the UN also concluded that the hack likely led to the leak of personal pictures of Jeff Bezos, later leaked to the National Enquirer. So the National Enquirer has also denied having any connection to MBS. But I guess before I toss it to you, as part of the UN statement, they added,

at a time when Saudi Arabia was supposedly investigating the killing of Mr. Khashoggi and prosecuting those it deemed responsible, it was waging a massive online campaign against Mr. Bezos and Amazon, targeting him principally as the owner of the Washington Post. What do you think about that? So it reminds me of when Cara and I were talking about Davos. And I remember the first time I was at Davos, they had Thomas Friedman speak at a dinner and he talked about the emergence, and this is in 1999, of these supranationals or individuals that would take on nation-state-like complexions in the sense that they would become so wealthy and so powerful. And because capital can permeate geographic boundaries, that they would take on sort of this nation-state feel. sort of this nation-state feel. And it strikes me that in the geopolitical tension between the kingdom of Saudi Arabia and the U.S., they've co-opted us mostly by saying, all right,

they're the guy in charge. I'll finance your next 10-carat display of garishness in Lisbon or in Riyadh. If I'm going to be a source of money for you, I've kind of won you over. It's kind of sickening how silent the administration or what apologists for the kingdom the current administration have been. And now they've essentially decided that this nation state they're going to war with is Bezos, who has tremendous economic power and also owns the Washington Post, who they clearly see is an adversary to their interests. And so they decide to, A, kill journalists and, B, try and discredit Bezos. And this is, I mean, this is pretty full-body contact, geopolitical, adversarial. I don't know what its term is.

You know, this is thunderdome, right? And what strikes me is that one of the many things that have weakened us as a nation is the administration's actions embolden people to do things, including killing journalists, including going after our citizens. And does anybody actually think the U.S. is going to do anything? So it's creating—it could also lead to a sense of chaos where you have people worth $150 billion or worth the GDP of Norway decide to take matters into their own hands. He has his own security experts now, his own security team. He has his own propaganda—I don't own security team. He has his own propaganda, you know, I don't want to call it propaganda machine, but he has his own vehicle for his own

side of the story in the form of one of the great media companies in the world, Washington Post. So it's turning into, we now have three nation states going at it. We have the Kingdom of Saudi Arabia, we have the United States, and we have, you know, Bezos, the country and nation. It's just it's so ripe with tells for our time and our era. But the notion, I mean, you're going to see a lot of people refusing to open files. That's the most immediate thing. It also brings up the notion that this very shadowy industry around hacks is not regulated. And supposedly this wasn't supposedly, they don't think

this is a government action, but you can pay people. And there's a lot of firms, a lot of them located in Israel, to basically extract information from almost any phone. And it's a very shadowy industry that requires more scrutiny and more regulation. But it'll be interesting to see how this plays out, whether or not the administration actually acknowledges anything went wrong here, if they continue to be an apologist for Saudi Arabia, or if they just ask them to buy another destroyer or finance another hotel. Not coincidentally, both Jared and his brother Josh were in Saudi Arabia recently. So this is really ugly. And unfortunately, when you look at the attention graph, we're all focused on this impeachment. So we're missing things like continents on fire, and we're missing things like geopolitical actions by adversaries that used to be our allies or claimed to be our allies, and we're not punching back.

We don't seem to be—we seem to be feckless. What I was just thinking about as you were saying this, it's such a great angle, is like geopolitical conflicts are now being waged through corporations. The fact is that as these companies are global and they have a footprint around the world and they rely on trade, that they're dependent on other countries. One of the ways in which governments are kind of fucking with each other is through these companies. We have Huawei in the U.S. with Trump kind of making it difficult for Huawei to get, I think, semiconductors from U.S. manufacturers this year. There's just a lot of, like, it's not so subtle anymore, but these big companies are becoming really important tools for these geopolitical chess moves, I guess.

Well, it sort of all comes down to money, right? If you have an individual, again, with the GDP of a small northern European nation, I mean, we're about to see war break out, and it won't be a direct war. It won't be a shooting war. It'll be how wars are fought now, and that is proxy wars using third parties and cyber attacks. And I just can't imagine, I mean, quite frankly, you know, they fucked with the wrong cowboy. And that is, this is an individual who has tremendous resources, is probably more, you know, has more access to, I mean, think about it, the technology he has access to, the resources he has access to. I don't think Bezos is the kind of

guy that scares easily. And he's not, typically, if an individual was attacked or their security was compromised or they were abused or threatened by a foreign nation, the government would step in and say, okay, we got this. And instead, he's just going to ignore them or ignore their—realize that they are going to be apologists, and he's going to go around them and start fighting his own proxy wars. So we now have—when you think about it, we now not only have geopolitics between nations, we have politics between nations and very wealthy individuals. Yeah, right. It's a strange situation.

I know. I remember Bezos, remember his response last year to the leaked photos to the National Enquirer where he like basically didn't hold back and was basically like, you threatened me, I'm going to come at you. And so that's also kind of interesting that he's the target. But the thing I want to say before we move on is like, what do you think Facebook's response should be to this? Like, WhatsApp, they own it. You know, do you think they're going to do anything? Do you think they

care? So, I'm always one looking for reasons to be angry at Facebook. But if you're, in this instance, if a file is transmitted over a technology and that file isn't downloaded knowingly by the person and that file contains malware. I mean, an opportunity is that supposedly Apple is better or it's not as easy to send malware over iOS as it is across other platforms or Android. So, it's an opportunity for an organization to say, all right, we're better at screening stuff or checking it or, you know, you get those alerts saying we weren't able to check this, be, you know, downloaded at your own risk. But I don't, at least immediately, I don't see how Facebook here is guilty.

A lot of people immediately came out on Twitter and said, oh, this is about encryption. I'm like, well, no, this is about cyber attacks and about nation states versus individuals. It's not really about encryption. It's about malware and cyber attacks. I don't think, I mean, at least on the face of it, I don't think you can really hold Facebook or WhatsApp accountable here. What are your views? Am I missing something? Well, no, I mean, I think that's a good point. I mean, there's a few issues here.

One is that these tools, like, you know, WhatsApp and chatting with people, they are, as Kara would say, being used as exactly as they were meant to. The problem is that there are unintentional consequences that occur, which this is one of them. And this is a malicious attack to your point. And it's dangerous. I think one of the biggest issues is the literacy of people who are using these tools

and that don't really have, let's say they're at fives or sixes where they should be at tens in terms of understanding how to use this technology. So Jeff Bezos is like, probably should have known better not to download something. But I get emails all the time from my family members sending me files saying, you know, download it. This is so funny. This is a thing though. These companies tend to pass that off. They say, well, it's not our job to teach society

how to use these tools. And maybe they'll invest some money in, you know, literacy efforts or training people on things. But there's a gap. A lot of people just don't understand the severity of their actions using these tools. And I think that's a concern. I think that'll continue to be an issue for these companies. The other, just to put a dot on the exclamation point here about how potentially damaging this is, one of my colleagues at NYU, Professor Paul Romer, Nobel Prize winner, is one of my colleagues at NYU, Professor Paul Romer, Nobel Prize winner, just such an incredible thinker. And he sort of pioneered, he was into cities before it was cool. He was talking about the power of cities, that all the economic growth would go to cities. And I don't know if he coined the term, but when ideas have sex, and that is people bumping off each other in close proximity, creates a tremendous amount of innovation and new ideas. And one of the most harmful things,

but he creates a tremendous amount of innovation and new ideas. And one of the most harmful things, amongst many other things, around some of these terrorist attacks that involve aircraft, is that when people are scared and don't travel, ideas don't travel, ideas don't bump off each other, global commerce comes to a halt, and ideation and people being in the same room comes to a halt, and the economy and the global economy becomes less innovative and less productive. room comes to a halt and the economy and the global economy becomes less innovative and less productive. And then the same is true of if all of a sudden data gets scared or we get scared to transfer or let data travel, you're just going to have less innovation and less ideas. If all of a

sudden we're very reticent to download data, we're very reticent to communicate with people online, we're very, you know, we're cautious about the business we can track online. And all of a sudden, the global travel of zeros and ones gets slowed, and there's more restrictions put in place. Fewer ideas are going to have sex. So, this is not only a threat geopolitically, it's a threat to innovation and the productivity of our economy. That's interesting. I mean, I think that we have gone from, like, zero to 1,000 in terms of, you know, in the last 20 years of sharing ideas and information and traveling across borders. So, especially for those people who are

privileged enough to do it, but I don't know. I don't know if it's a bad thing that there's a little bit of correction, you know, in the other direction. That's an interesting point. My sense of WhatsApp though, is it's primarily where it's really on traction is among a lot of the global middle-class or people who couldn't afford traditional long-distance rates across telco. I mean, it's just gotten such... True. And again, I'm all of a sudden selling a Facebook apologist, but I do think WhatsApp has been an incredible boon for people in terms of some of the onerous long-distance charges they were

having to pay through their own local monopolies. But anyways, we shall see. Yeah, we shall see. So listen, the next story I want to talk about, speaking of privacy and data, so we're continuing to follow the balance between user privacy with tools like encryption and a government's right to access that information through things like backdoors. And in this area, we have Apple Encryption Part 2. So this is a story that Reuters came out with a few days ago. It basically said that Apple had been working on an encryption system that would allow iPhone users to fully encrypt all of their iCloud data. And Reuters reported that the company halted these

efforts after pressure from the FBI to keep that information accessible. So, you know, what do you think? Like, this happened over a few years ago that Apple sources who were not named in the story said that probably one or two reasons why this feature or this plan got killed. One is the legal team killed it for various reasons that, you know, they didn't disclose. The second is that actually users would get super confused and lock themselves out of their iCloud data if this encryption occurred. We, as a side note, Scott, we should have people on, encryption experts, with you and Kara since we got, you know, hundreds of emails about this from occurred. As a side note, Scott, we should have people on, encryption experts, with you and Kara since we got hundreds of emails about this from listeners.

But what's your take on this move from Apple? They're saying, look, it's just not true that we're not cooperating with the government. We've done this around iCloud. I also think that they're coming to the realization slowly but surely

that encryption poses a lot of downsides, that there's a lot of kind of low-probability, high-se high severity scenarios that Apple could come under tremendous fire. It's sort of that Jack Bauer moment where we say we don't ever want to torture anybody and we need to put in place an absolute that we don't torture people. But you find a guy, you find out that there's six nuclear bombs about to go off, and you say, okay, it's that Jack Bauer moment. find out that there's six nuclear bombs about to go off, and you say, okay, it's that Jack Bauer moment. And are there going to be certain moments if we decide to build a failsafe box? And I got a couple quotes here. First off, I want to apologize to the Daniel Kahneman fans or disciples. The Nobel Prize winner talked about, wrote this great book around fast and slow thinking. And I misquoted

him last week saying that people were subject to slow thinking. Slow thinking is actually the good part when you rely on the better notions of your instincts or your brain to slow down and really think through stuff and offer some nuance. And I'm worried about the encryption debate that immediately people go to fast thinking and go, okay, encryption is Apple, who we like, and Tim Cook seems like a thoughtful, likable guy, and the backdoor solution is Trump and Bill Barr. And it's strange that, and we were talking about this, if you do a heat map of iOS versus Android, basically iOS is Democrat and Android is red state. That if you look at a city, concentration around a city and where there's wealth, it lights up iOS for the wealthy areas

and it lights up Android for the lesser wealthy areas because the general compact with people around Android is we'll molest your data and in exchange for that we'll give you cheaper phone, cheaper data.

And iOS has said you deserve privacy. Privacy is now a luxury item. You'll have to pay more but we'll only pull 80 to 120 data points. But where that heads is one of the places it goes, is that people immediately assume this debate. They take a shortcut because they're busy, and they go, okay, encryption bad because it equals Trump and Barr.

But if you look back at what Obama said, we should be able to find a solution and to go immediately to an absolutist to fetishize the phone. Hillary Clinton and Bernie Sanders both said there should be some compromise here. There should be some middle ground. And so I hope this debate moves from attaching it to Tim Cook and or Donald Trump to actually the issue and that we do it, Mr. Kahneman suggested, and take advantage of our frontal lobe and cortex and have some slow thinking around this. I think slow thinking is right. I mean, I think what Kara was saying in the episode last week was like, there just has to be a public debate on this.

It can't happen behind closed doors. And it's an interesting debate about this being completely politicized. I think, you know, on your point on Android versus iOS, you know, Android has historically had lower price points. And that was the whole, the reason that they scaled pretty quickly. But, you know, they just came out that Pixel, which obviously they're trying to get into that market, which is the same price point as the Apple iPhone. But listen, I think that it's really interesting. I think from an optics standpoint, we have Trump tweeting last week that, you know, Apple should kind of get on board and help the government. And then it's kind of like the right hand, maybe not knowing what the left hand is doing. The other side of the government

working closely with Apple. But the reality is, is like, I don't know if it's that Trump might know all of this. It's just the fact that like he's building a narrative. He's building kind of an us versus them narrative, which, you know, is the great creativity and the great, I think, thing to watch of this administration is they know how to build narratives. And, you know, a lot of people follow them. So. But wait, I found the quote. I found Obama's quote. He said, you cannot take an absolutist view on encryption. If your view is strong encryption, no matter what, that does not strike the balance that we've lived with for 200 to 300 years. And it's fetishizing our phones above every other

value. That can't be the right answer. Go on, Barack. Go on, you crazy young man who managed to leave Washington with your reputation pretty much intact. Yeah. Did you see his photos of Barack and Michelle that he posted for her birthday? I did not. Let me guess. He's like the wonderful husband? Yep. Is he the wonderful hubby?

The internet loved it. Yeah. Really sweet. All right, Scott, it's time for a quick break. We'll be right back with Listener Mail Wins and Fails. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see?

For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale. There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings.

And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple. We need to talk to each other. We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim and we have these

conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash Zelle. And when using digital payment platforms, remember to only send money to people you know and trust. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today.

Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Capital Client Group, Inc. All right, Scott, we're back. So let's dig into some listener mail, shall we? You've got, you've got. I can't believe I'm going to be a mailman. You've got mail. Hey, this is Bhutani.

I'm from India, former NYU student. Kara and Scott, I had a question for you around Jeff Bezos' recent trip to India. It seems like a Puyar tour where he's promised a billion dollars, a lot of jobs, and has been wooing a lot of businessmen as well as small and medium business owners, who he's promising a lot of employment to. Very curious what you think about what he's actually trying to achieve with this, especially given how Amazon India now competes with essentially Walmart-owned Flipkart and where this e-commerce war is headed in India? So Scott, this is an NYU alum, so I want you to start us off. But let me just give a little

context. Obviously, Jeff Bezos announced last week that he would be investing a billion dollars into India over the next five years. I think the Indian retail market is $1.3 trillion, so it's a bit of money. But there are's a bit of money, but there are obviously a lot of challenges. But I want to hear your take. What do you think about this move? Well, committing a billion dollars or Amazon or Jeff Bezos committing a billion dollars to investments in India is tantamount to the world's wealthiest man committing $961,000 to fight the fires in Australia. It's just a ridiculous, oh, wait, he did that. He did that. This is pretty much insignificant. It just doesn't, that's a drop in the bucket. India is going to be in the news a

lot more around sort of the innovation or obsession with the innovation economy. So I went on the board of Gateway Computer, which, and I always like to talk about the boards I'm on because it makes me feel better about myself and signals just how ridiculously fucking impressive I am, Erica. Right, right. Yeah, that's right. As you would say, go on. Go on. Uh-huh, say more.

30 years ago or 20 years ago, there was Gateway Computer and there was Dell. And they were neck and neck. And Gateway decided to go after consumer, and Dell went after small and medium-sized business focusing on supply chain. Fast forward 10 years later, Dell is one of the 10 most valuable companies in America, and Gateway is on the verge of bankruptcy. And we have to basically sell it, not for scrap, but we sold it for, you know, literally it was a shadow of itself. And if you go back 30 years ago, China and India were seen as being somewhat neck and neck. They had these incredible emerging middle classes, an incredible consumer economy emerging.

Everybody knew something big was happening in both these nations. And a lot of people, it wasn't entirely clear who was going to win or emerge as the next superpower. And you had China, which had unbelievable manufacturing processes already in place, the ability to create infrastructure investments. You had India, where more PhDs than anywhere in the world, more English speakers. And also the thing we loved was that it was a democracy. feature in that it ends up autocracy or central planning around moving towns to run a bullet train through it or relocating people to focus on how you allocate capital around manufacturing ended up being a feature, not a bug. And then 30 years later, China has absolutely, on every dimension economically, absolutely buried India. And so now people are looking

to India and saying, all right, with just this massive population of young people, a decent or an opportunity, there is a fairly impressive education system. My most impressive colleagues, in my view, at NYU all went to the same university in India. I think it's called IIT. Now people are turning, eyes turning to India. What's interesting, though, is that we have to go all the way around the world to see kind of Amazon versus Walmart part two. That's just interesting how it's shaping up to be the same battle here. The other thing that's interesting is the pushback they've received from small shop owners.

And I know you had some thoughts on this. But effectively, we're net gainers in the U.S. and we have an obsession with innovators and the consumer. That's not necessarily true in other nations. They've looked at big tech and said, well, I'm not sure nations outside of the U.S. have been net gainers from big tech. And the idea that Amazon's going to come in and it might be good for Indian consumers, but it's basically going to decimate the retail market,

decimate tax collection, create anti-competitive behavior. I think there's sort of like, do we want to be other nations that let big tech come in and start to kind of suck all the oxygen out of the room? So I'm not sure that India is as fascinated with Amazon as Amazon is with itself. It's going to be interesting to see to the extent to which they embrace or don't embrace Amazon. Well, it doesn't seem like they're embracing Amazon. I mean, aside from like some great photos that came out of the event, and obviously Jeff Bezos probably had

a great time over there with kind of the 1%. But I think like what I've noticed, and I think those are all great points, is your point about the shopkeepers, like you kind of have to win over the shopkeepers in order to make Amazon India successful. And one of the challenges in India is there's like a zillion shopkeepers selling a zillion products, and they so far haven't really been on board. I think there's a lot of fear of what this means for them and their ability to sell. And maybe they are not seeing the big picture of like the, you know, the pitch will obviously be scale and access.

You get your products to more people. But, you know, that's going to be some tension to watch of what happens between the shopkeepers and the government and if the shopkeepers are able to sway the government one way or the other. The other issue is, Scott, I've been to India like, you know, four or five times. I went when I was 11 years old, left Indiana, went on a trip to India. My aunt and uncle had moved over there. It's a really interesting experience in the 90s at the beginning of U.S. multinationals going over there. And the, you know, interesting point is like India is totally organized chaos, which is logistically antithetical to Amazon's business. I mean, you know, you order something from Amazon India and it comes broken, which is the experience that a family member of mine had in India recently. So it's like a hard market for so many reasons to get right.

So it's kind of obvious that Bezos wants to go to India and love your point about competing with Walmart and Flipkart over there. But it's a hard market to get right. I had about two, three years ago, just as Amazon was showing up on the shores of Australia, I had the CEO of this Australian conglomerate ask to come speak to me. And they owned, I think, either the second or third largest retailer in Australia. And he said, how do we prepare for Amazon showing up on Australia's shores? And I said, well, what's your objective here? Do you want to talk about employment? Do you want to talk about national interest? Or do you just want to talk simply about shareholder value? And he said, well, let's approach it from a shareholder value standpoint. And I said, okay, you're a conglomerate, meaning you can sell any division

and kind of do what you want. You're not dependent upon, you don't have 100 years. It's not your family. It's not your legacy. It's not kind of the family name. You're not the Nordstrom. And he said, no, we're not. We look at these things very, I don't want to say in a Darwinian way, but a very shareholder-driven way. And we get into industries and out of industries. I think they were insurance and a bunch of other industries. And I said, well, if you're truly shareholder-driven with Amazon showing up on your shores, you should do the following. You should sell your retail unit and take those proceeds and buy Amazon stock. Because if you were to look at Amazon's entry into almost any market, it's generally there's a transfer or reshuffling

of stakeholder value. And that is consumer's benefit and Amazon shareholders' benefit, but jobs and businesses and the market capitalization of that specific market as the retail valuation gets crushed. I mean, even just on the day that Amazon announced it was coming into Australia, you saw the Australian retail sector shed billions of dollars. So, this has become, you know, again, back to kind of Bezos, the level of the implication, the impact these companies have on a global economy, where frictionless flow of capital and a company's ability to scare entire industries in other nations, it's just, in my opinion, it's more evidence that Amazon, in my view, has become too big and too powerful. And a lot of nations, we're net gainers from Amazon in the U.S., which isn't an excuse

for not regulating them or not breaking them up. But on the whole, we're net gainers from Amazon in the U.S., which isn't an excuse for not regulating them or not breaking them up. But on the whole, we're net gainers. I wonder if you do the hard analysis in a place like Australia or India, if they're coming to the conclusion that when you take everything into account here, we're net losers. And they don't have the same fetishization of Steve Jobs and all innovators and the need to fulfill this religious and spiritual void that's been created by a decline in church attendance and lack of dependence on a super being that we have now filled with people like Elon Musk and Steve Jobs. I don't think they suffer from that same deficiency as us. That uniquely American issue.

That's it. Exactly. Well, and you're right. I mean, Bezos said that he was going to bring jobs to India, but sure, they bring jobs in terms of building, you know, construction jobs, building logistics centers, et cetera. But long term, you know, I feel like that's probably doubtful. Oh, Amazon, like most innovators, he'll be a job destroyer. I mean, Amazon will grow a lot of jobs, but if you do, you're going to see, you would see massive, just in the U.S., you've seen a massive hemorrhaging of jobs. And a lot of people would say, well, that's a function of innovation and productivity, and there's some truth there. It's just, again, going back to Daniel Kahneman, we need to think this through.

So, India. So, last thing before we move on from India because there is a through line here of Bezos. One of India's government officials after this visit came out and made a comment to Jeff Bezos about The Washington Post's coverage of India. And I just find it hilarious. This is also, you know, what's happening with MBS and not liking The Washington Post's coverage of Saudi Arabia. But like, I just have to say, my perspective is this is insane. Like, from what I understand, Jeff Bezos has no role in the day-to-day running of The Washington Post editorial newsroom. It's like there's always a bit of a church and state or should be between the owner of a newspaper and their editorial staff.

But it just felt like a cheap shot to me, like kind of irrelevant. Like, you know, to say, yeah, bring your business to India, but stop covering us in a negative way. I just think that's insane. But that's my two cents. So, again, and it feels weird to be defending Bezos, but I think it's hard to argue that Bezos hasn't been a wonderful shepherd and steward for what is a national treasure in the form of The Washington Post. He's not Rupert Murdoch, you know, creating talking points and essentially creating a narrative that not only attacks. And essentially, I'm creating a narrative that not only attacks—I mean, now that Kara's not here, I think the first time I ever questioned going on Fox, I thought, you know what, I'm not going to go on Fox anymore. As Fox does these—News Corp does these coordinated attacks on strong, emerging, progressive female voices across The Wall Street Journal, the Post, and Fox. And I'm like, okay, how is that good for America when one, quote, unquote,

and I put this in quotes, journalistic institution starts attacking, has a preponderance or over-indexes around attacking other journalists that happen to be liberal emerging, you know, powerful female voices, and it's happened to some other really strong emerging female journalists. And Kara was in their sights. And that was the first time I thought, you know, this really isn't – this is just bad for everyone involved. That doesn't happen. Bezos has been – or you look at Sheldon Adelson and how he uses his media. Bezos has been a very responsible hands-off.

He has a lot of – my sense is he has a lot of respect for the separation between ownership and editorial. And it totally came back to his benefit, because when that whole, you know, profile or amateur photography of Big Ed and the twins got out, the media was so inclined to come to his defense because they do appreciate—they want to like Jeff Bezos around that kind of stuff because he does—he has been seen as a great steward of The Washington Post. Well, let's—okay. The thing about Fox, though, is that a lot of what you're talking about is entertainment. It's not news. I actually think, like, news gets a bad name when you consider Fox News to be all news.

Like, the majority of the stuff that's super salacious, like, they don't have any editorial standards. They're just, like, going all out, you know, doing whatever they need to do for their agenda. And it's not just attacking female journalists. It's attacking, you know, legitimate ideas and facts. Like, facts are under attack at Fox News, and it's actually really destructive. But listen, let's go to wins and fails.

So, Scott— You first! Yeah, okay. All right, I'll go first. Well, you know what my win is? My win is Cara taking fails. So, Scott. You first. Yeah, okay. All right, I'll go first. Well, you know what my win is? My win is Kara taking a day off, Scott. Just. Oh, fuck that.

Enough of that. Enough of that. Whether it was her binge last night or the fact that she's legitimately sick, Kara, thanks for forcing me out of the nest and onto the mic. But, okay. There are three naked prostitutes on her couch that she's about to kick out. Come on, get on with it.

Couldn't be further from Kara, but I love this fantasy. So actually I don't. All right, so listen, my win is Britain's new privacy legislation that would protect miners' data. It will require platforms like YouTube and Instagram to turn on the highest possible privacy settings for default for minors and turn off by default data mining practices like targeted advertising and location tracking.

So good for Britain on the privacy legislation. Good. Happy to hear about that. taxes on big tech and basically to try and incentivize the OECD to get their act together and create a kind of a pan-European approach to taxation around big tech as, again, going back to this notion that other countries aren't as in love with big tech as we are and realize that they can't continue to have these companies transfer billions of dollars of capital outside of their country and not leave any behind in the form of taxes. But yeah, I agree, Britain, that was a strong move and a nice win. So my win

is Michael Bloomberg, who has placed fourth in the new Monmouth National Democratic poll. Biden came in at 30%, Sanders at 23, Warren at 14. And Bloomberg actually came in ahead of Buttigieg at 9 percent. So Bloomberg looks as if he's about to reach double digits. And I think the gangster move from the mayor here and something I thought was just, A, the right thing to do and B, an incredible brand move, is that he has announced that regardless of whether he's the nominee, he's going to maintain his staff. And it just sits in such stark contrast to these other billionaires who claim to be very concerned about the nation and say their number one priority is to get Donald Trump out, but only as far as spending their own

money on their unique vision and their unique role as commander-in-chief. And I wonder, is Howard Schultz continuing to fund moderate candidates? He claimed there was such a need for moderates, but now that he's no longer in the race and he said he was willing to fund, I think, up to a couple hundred million dollars, has he decided that there's still such a need for moderates that he's funding, continues to fund moderates, or was it only his unique special vision? I assume Tom Steyer, and to his credit, he's continued to do this, and I trust it wasn't political messaging. It's going to continue to be a warrior for the environment. But I think Bloomberg, my win as Bloomberg, A, obviously coming up in the polls, but B, committing that he is about getting Trump out of office as opposed to solely being about him being president. And I think that there is a path. And I think that there is a path. You can see Iowa, New Hampshire, the Democratic frontrunners beat the shit out of each other and then show up to Super Tuesday where there's Michael and his $250 million that he's already spent driving up the prices of political ads, supposedly 20 to 25 percent all on his own, which raises a host of issues we need to address around money and politics.

But my winner is Mayor Bloomberg. Wow. Wow. Okay. I wasn't expecting that, but that's great. Who's your loser? I mean, so many losers, but I, no, I'm too upbeat for that. I think my fail, actually, my fail would probably be Netflix because I think it was Reed Hastings earlier this week acknowledged that Disney Plus may have taken a bite out

of their subscriber growth during the last quarter of 2019. So as a consumer, I'm overwhelmed by the amount of things I need to subscribe to now to see great content. But yeah, a fail for Netflix that they're starting to see a cut in their business. And I'll be curious to see how that actually plays out. Yeah, it's hard to imagine. So Netflix largely will live and die by international growth or lack thereof because they kind of have everybody in the U.S. And there's a decent argument that people aren't swapping out Netflix. Netflix is kind of a car, and Hulu is whether you want leather seats, and Apple TV Plus is whether you want a steering wheel or heated steering wheel, whatever. Everything else is kind of an accessory to the car, which is Netflix. But it's hard to imagine that this sort of massive investment in the category doesn't

begin to drive margins down or drive growth down. There are now 510 original scripted television programs. 10 years ago, there was 220. We're going to spend more on original scripted television this year than I think was allocated in the entire decade of the 90s. So it's hard to imagine just economically how that, one, doesn't drive down margins and increase competition, and two, doesn't start to give the market a little bit of a chill around the prospects for a Netflix stock.

So yeah, I agree with you. It's going to be very interesting. My lose or loss or fail, whatever you call it, is a lot more serious and weird. I've been thinking a lot about family planning, and it's always the stuff you're not focused on. I think that kind of the two biggest issues, it's the shit you don't see coming that really hurts you or that you're not talking about. And we were talking about the deficit a lot six or seven years ago. Now we're no longer

talking about it. I think our deficit has become not only a moral issue but a real threat to our economy given just the incredible reckless spending that we've engaged in with deficit spending. The notion that the Republicans can claim that we have a strong economy when effectively I would argue we're in recession if you take out that trillion dollars a year in sugar high stimulus in the form of debt in record low unemployment. And I think it's incredibly dangerous. The deficit is getting to dangerous levels, and we're not even talking about it. The other thing we don't talk a lot about is family planning and choice. And I think that there's a bit of a misnomer or misperception. We always tend to couch choice in the context of it's a woman's choice. I saw your tweet yesterday. Tell us about this. Well, it is a woman's choice. I get that, and it should be a woman's choice, but it's deeper than that. And that is the number one reason cited for women deciding to terminate a pregnancy is finances. Access.

Yeah, access. And then the number two is their partner, or specifically their lack of a partner. And while we like to think that we want to afford women this choice, oftentimes women don't really have a choice because they lack the financial means to support another child. The majority of pregnancies terminated are terminated by a woman who already has kids. So it's not that she doesn't want kids, doesn't love children, doesn't want to have a family. It's that four out of five

men, when they get pregnant, do not end up marrying the mother of their child. It's that young men and young women don't have the financial wherewithal because of this systematic transfer of wealth from young people to old people that's taken place across America over the last 30 years. And the notion that women aren't massively influenced, their choices are getting more and more limited around how do you responsibly raise a child and bring a child into this world because of the poor choices and the poor responsibility a lot of men exhibit in this process. Scott, you're so woke. Bring it on! Yeah, I mean, Scott, this is really deep. Okay. Well, we should talk more about this, but we've got to just do a quick prediction and we're getting kicked out of the

studio. So, Scott, what do you have? From abortion to stocks. I'm making some stock picks. So, next week is earnings. We're going to see Uber shit the bed. It's stock off 5% to 10% within 48 hours of their earnings release. And we're going to see Facebook announce monster earnings and an all-time high off the back of Instagram commerce. So tech marches on. Ride hailing is shitty business. It'll be interesting. Uber has now gone full into what I call fraud-splaining, and they're starting to report this bastardized form of EBITDA called segment-based EBITDA, where basically they take a bunch of costs out and pretend that those costs

are for some reason at some point going to go away. They're not. They will begin to downplay Uber Eats as they will either exit that business or sell it to Grubhub as it makes ride-hailing look like a good business, and ride ride hailing is a shitty business. So my prediction, Facebook on the back of earnings, all-time high. We'd like to think that their gross negligence and their tearing at the fabric of American depression will show up in their numbers. It will not. And we're going to see Uber's decline resume in earnings next week. Those are my predictions. All right, cool. We'll be back next week to talk about it. God, it was a pleasure. Thanks for letting me sit in. I hope I- I had no say in this. Yeah. I had no say in this next week. Those are my predictions. All right, cool. We'll be back next week to talk about it. Scott, it was a pleasure. Thanks for letting me sit in. I hope I had no say in this. Yeah, I had no say. Thanks for just going along with it, Scott.

My gosh, that's it. You know, what are you saying, Scott? If you had to say you wouldn't allow this to happen? I'm up for any. We need we absolutely need new blood. I mean, Tara, that's not enough already. Let's bring in the clowns. She's not going away, Scott. She's not going away. We're stuck with her. Cara, we hope you feel better. Clean up that apartment. Get Javier and Luisa. I was trying to come up with ethnically ambiguous names and I failed there. Done. Out of your apartment. Oh, God. Put away the meth. Put away the meth. Come back. We need you.

I mean, all right. All right, Scott. She's a saucy little minx. What do you think she was doing last night? Okay, Scott. All right. Remember, to all of our listeners, we love your questions.

If you have a question about a story you're hearing in the news, email us at pivot at voxmedia.com to be featured on the show. Thank you so much for our listener question today. Today's show was produced by Rebecca Sinanis. Erica Anderson, that's me, is your executive producer and stand-in host. Thanks also to Rebecca Castro and Drew Burrows.

Make sure you're subscribed to the show on Apple Podcasts, or if you're an Android user, check us out on Spotify, or frankly, wherever you listen to podcasts. If you like our show, please recommend it to a friend. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. And Cara will be back. Thanks, Erica.

Well done. Thanks, Scott. Support for this podcast comes from Anthropic. It's not always easy to harness the power and potential of AI. For all the talk around its revolutionary potential, a lot of AI systems feel like they're designed for specific tasks performed by a select few. Well, Claude, by Anthropic, is AI for everyone. The latest model, Claude 3.5 Sonnet, offers groundbreaking intelligence at an everyday price.

Claude's Sonnet can generate code, help with writing, and reason through hard problems better than any model before. You can discover how Claude can transform your business at anthropic.com slash Claude. Do you feel like your leads never lead anywhere? And you're making content that no one sees, and it takes forever to build a campaign? Well, that's why we built HubSpot.

It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers.