Pivot - Facebook is So Meh-ta, Biden's Budget Package, and Friend of Pivot, Aswath Damodaran

Episode Date: November 2, 2021

Kara and Scott talk about Facebook’s rebrand, Biden’s big week at COP 26, the spending bill drama at home, and the CEO who actually asked for a pay cut. Plus, Friend of Pivot Aswath Damodaran on taxing billionaires, the future of SPACs, markets, meme stocks, and more. You can find Aswath at @AswathDamodaran. Send us your Listener Mail questions, via Yappa, at nymag.com/pivot.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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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 Sonnet can generate code, help with writing, and reason through hard problems better than any model before. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. Hey, FETA, META. It happened after we had our taping last week, just so you know. Yeah, but we guessed it, right?

We guessed it. Well, you didn't guess it. We knew it. I knew it, that that was the name. You knew it was going to be META? Yes, I said so. It's on Thursday and it's going to be META. Yes. Yes, indeed. Last week. Sorry. It's called reporting. But they, yes, they changed their name. What do you think? You summarize it perfectly in your article. This changes nothing. All right. We're going to talk about it a lot more later. So get ready. Although I also agree, meh. But let's talk about a few other things. Okay, Boomer. Okay, Boomer. Okay, Boomer. Three million baby boomers retired early during the pandemic, according to data from the St. Louis Fed. Their exit impacted the labor shortage.

Meanwhile, millennial bosses are afraid of their Gen Z employees, according to a piece in the New York Times. There's a lot of labor stuff going around still. American Airlines just dumped a whole bunch of flights, canceled a whole bunch of flights today and yesterday because of that. Because they still haven't gotten back up to speed, even though they say they get thousands of applicants for their various jobs. It's a very long chain of employment there at these airlines, bag handlers, things like that. So what thinks you about this, the baby boomers leaving the party? It's understandable when you think about, first off, their opportunities to not work have increased exponentially.

Specifically, baby boomers still control the majority of the wealth in the country, and they've seen that wealth up 40%, 60%, 80%. So when you have more money and retirement becomes an opportunity or, quite frankly, just not working at the current job, which might be more difficult. They might want you back in the office. You've gotten used to being at home. If you're in any sort of consumer-facing position, you're dealing with more technology. You're dealing with more ridiculous consumer demands. I think a lot of people are reevaluating their life, and change is a function of a couple things. It's a function of you have to make a change or you have the opportunity to make a change. And I think in this instance, if all of a sudden you were planning to retire in five to ten years because you were going to have a wealth of X, when you get to X five to seven years before you'd anticipated that and the world has dramatically changed and you like this new world of working at home and doing stuff. Yeah. Why not? Well, you know, someone called it the, you know, they're calling it the great resignation. Someone, I can't blank, it's someone who wants to dub it the great reassessment.

The great reassessment. That's a much better term. Yeah. That's a much better term. Yeah, because they don't know what to do. But then what do they do? What does everybody do? If the workplace isn't changing as fast as their opinions of the workplace are changing,

it's really going to be an interesting crunch time, I guess, in terms of how things get done. It's a really interesting point because the gig economy just doesn't apply to frontline workers. If you're a lawyer and you say, you know, I'm just not going to go into the office every day, but I have a few clients I can do on the side. I can work from home. I can charge an hourly rate. The world is much more comfortable virtually now. I mean, I'm sort of, quote unquote, this is going to sound strange, but I've semi-retired from Stern in the sense that I used to teach five classes a year at Stern. Now I'm going to teach one. Why? I've gotten really used to not commuting to New York. Two, I have more economic flexibility than I've ever had because my cohort has done disproportionately well during the pandemic. And I've gotten used to just not – and also teaching in person.

Do you know what teaching in person means right now? No. Your entire class is masked. You're supposed to be masked talking to a group of people. You can't read the room. You can't see their faces. So it's like, let me get this. Well, that'll change.

That'll change, Scott. That'll be different in six months. Well, OK, but as you're reevaluating what you do for the next year or two years, you're like, you know, the idea of teaching one class a year remotely or hybrid as opposed to just figuring all this shit out and dealing with. Also, the other thing that's really changed, Cara, from a consumer standpoint,

is we don't realize just what assholes we've become. I do. And I say that as consumers. Yeah. And that is every year we were taught that the consumer was king, was royalty, was God. And the expectations have just gotten so out of control around what I should get from you and my rights, not only as a consumer, but as a human. In terms of the behavior I will demonstrate towards someone that I am giving money to, whether it's a concierge or at a hotel, whether it's someone's maitre d'. My son says this from working in a retail environment.

My son says this from working in a retail environment. It's just all of a sudden you've decided I have total domain over you. And any infraction in mood, service, the amount of time it took to get my iced tea, I have the right now to be totally unreasonable with you. Yeah. And the other side of that is people are going, well, now that I have more opportunities, I've decided I don't want to continue to be a flight attendant and have people get violent with me and my colleagues. There was a really interesting tweet that I reached out to you about, like, about half of the country have decided being an asshole is okay as a practice. You know what I mean? Like being just for the hell of it, just saying things, dunking on people, stuff like that. And it's a really interesting every... Social media, it's Twitter. I do it too on social media,

so I shouldn't speak. But I just put up some pictures from Halloween last night with the golden child who loved it, by the way. She was like, next house. The whole racket occurred to her, like the penny dropped for her. She's like, candy in each house. She figured it out.

Totally. You could see it. She's like, aha, the racket of my childhood. But someone had put up, a lot of people had these graveyard signs or he believed in science. He did his own research. He's this and that. And they're, you know, you probably should make fun of all these people dying. But at the same time, it's what people do when they're expressing.

They're all over the place. It's not like it's an uncommon thing. But they're like, how dare you put this up? Like, I had this whole, like, either the people on the right who were like, don't Democrats die of COVID? I was like, I don't, yeah. Like, what do you want from me? I was like, I'm just saying. All I said was this is the kind of Halloween it is.

Because there were a lot of these signs. It's the same thing with this Let's Go Brandon thing. I was thinking about it because everyone's going crazy. You know about this Let's Go Brandon thing, right? All over the internet, everywhere. So, say more. Oh, there was a big story about the southwest pilot saying let's go brand it's a thing to say fuck joe joe biden i

believe that's what it translates to they've got all these little code fucking words they write does i don't want whatever they're having all these in jokes with each other whatever and so there's one of them is let's go brandon which is fuck fuck joe biden i believe something like that it's some version of that. And instead of saying that, I forget the origins. I can't remember. It's some sports person, I believe. I don't even know.

Anyway, so half the people are really offended by it, everyone else. And then some people are like, oh, just smile and let them do it. And I'm sort of in that camp, like, oh, just if they want to act like assholes, I don't quite know what, I'm not their mommy kind of thing. But there's this sort of degeneration of discussion, which I think goes right back to this story of people retiring. It's like, no, thank you. I think it's reasonable for people to say, you know what, Halloween and the welcome from the pilot should be safe spaces from politics. It's just like, whether you think it's funny or not, it's just, you know, come on, it's fucking Halloween for God's sakes. And by the way, the pilot that gets on and says anything in code around politics, he should probably be suspended.

That's just not appropriate. It's not. You're supposed to instill credibility and security. You're supposed to get on in a voice and just give everyone the sense that you're in charge. And fly the fucking plane. And we don't need to hear your political views, period. Fly the plane and don't crash it. That's your job. Yeah, fly the fucking plane. And we don't need to hear your political views, period. Fly the plane and don't crash it. That's your job.

Yeah, fly the plane. I think we all have an obligation to just take the temperature down. I find myself getting angry and wanting to dunk on people. And I've decided I'm not going to argue with strangers, demonstrate more grace. But I think we all have a role. There was a great George, you know, the whole Chappelle thing. There was a great George Carlin interview that went around where he's like,

you don't like, you don't punch down so much. It was a really, I have to send it to you because I thought you'd like it because I love George Carlin. I thought he was such a room breaker. And he was talking about this idea of,

I think he was talking about Andrew Dice Clay at the time, who, you know, he did his whole weird thing and he's sort of, I don't know what happened to him, but he was very like wise about it. I was like, oh, why isn't anybody, and he's sort of, I don't know what happened to him, but he was very, like, wise about it. I was like, oh, why isn't everybody like George Carlin anymore?

Just reasonable, that kind of thing. Anyway, speaking of- And he didn't go after individuals. George Carlin went after ideas and politicians and groups, but he didn't go after people. He did. So, one thing that I liked was the CEO of Activision Blizzard, Bobby Kotick, who I like very much,

asked the board for a pay cut. He cut, there's an investigation going on at Blizzard, Bobby Kotick, who I like very much, asked the board for a pay cut. He cut, there's an investigation going on at Blizzard, the Blizzard unit around sexual harassment and discrimination by California and the EEOC. He made a lot of money last year, $155 million from stock, mostly from stock. So he's asked for only a salary of 63, around $62,500, $63,000, with no equity or bonuses is where he made his money. And then, so this is the pay cut until things are resolved. Then he put out a list, I wrote about it, a very clear list of things that he wanted done that were specific. And it was a very, I was sort of struck by like how, you know, it could be like, oh, it's a PR thing. But I thought,

this is a pretty decent letter. This is a pretty decent way to deal with it. And I sort of liked that. I was like, oh, someone's actually saying, look, this is my fault. We don't agree with everything they're saying about it. But you know what, here's the 10 things we're going to do. And they were all specific. Now, we'll see if he does them, right? That's the thing is, but it was kind of like, he's really actually taking a pay cut, an actual pay cut. Not, I'm not taking any, I'm only taking salary, or I'm only not taking salary, I'm taking a dollar. None of that, that rigmarole.

But I kind of enjoyed reading it, because it was sort of like, all right, okay. Like, I'm stepping up, I'm an adult. We fucked up. I should have done this. I'm not saying I didn't, you know, I think from people internally, he didn't really have control over the Blizzard unit as they operated quite independently. But nonetheless, he's not saying that either. Right? He's not saying that.

I've heard that from people inside the company. But anyway, I really appreciated it. I really appreciated it. Yeah, I thought, I read the letter too. And my first thought was it felt a little bit performative. But at the end of the day, if the CEO takes responsibility, and it was a thoughtful letter. But again, it reflects something, an underlying sickness. And that is CEOs, boards have become so weak that here's the bottom line in terms of compensation as CEO.

You unfairly get credit and blame for anything that happens on your watch. Right. Yep. yep, yep. And what we need is not kind of thoughtful, already wealthy CEOs saying out loud, I'm taking a cut in my pay as a means of, I don't want to call it political expression, but value expression. We need boards to go, oh, we have sexual harassment

that's come to light in this company. Maybe you weren't doing it, but guess what, you're the CEO. Right. So you're not making any money this year. Oh, I've given up on boards 100 years ago. But well, then corporate governance doesn't work because they get to decide this stuff. And so when we actually have CEOs going, because the board doesn't have the backbone to do this

stuff, I'm going to cut my own pay. It reflects something. The CEOs shouldn't be deciding their own pay. And while everybody's freaking out about frontline workers actually wanting to make a living wage, there's very few articles talking about the fact during the pandemic CEO pay is up 23% year on year. It is. Twenty-three percent. So boards, you know, I've been on these boards and this is what happens. Yes, I know you're in trouble right now. None of us want to do any real work. So we bring in Towers Perrin. They do a CEO compensation study and they say, given the size of the company, given the performance of the company, your peer group,

50% pay would be $4 million. And you never pay them 50% because you like them and you know them. And the way they became CEO is they're outstanding at developing relationships. And so you go, well, let's at least pay them 60 or 70. And that doesn't sound crazy, right? You're paying them just above the mean. But the problem is 80 to 90% of boards are all paying 60 to 70%, which creates this exponential upward spiral. When you're going, you're not going one squared, you're going 1.2 squared every year, and their compensation explodes. The board just stepped in with Bobby, but he did, he's not taking that. That's a lot of money. That's a lot of dough to leave on the table. In any case, I appreciated it. I agree with you. Some of this is performative, but

it is what it is. But actually, we have to move on to the big story. We did discuss at the beginning, the rebrand that launched a zillion memes, some of them very funny. I am proud to announce that starting today, our company is now meta. Facebook became meta last week, and Mark Zuckerberg expanded his vision of the metaverse. The company says it will hire 10,000 workers in Europe to bring the vision to reality. That's in addition to the 10,000 employees who currently work on AR and VR at Facebook. Obviously, he's putting a lot of wood behind this arrow. I don't think he's addressing anything, and he was somewhat arrogant.

That's what I thought. Yeah, I love the term, like, this ridiculous notion, like, okay, let's all just move on. That's what I said, yeah. The let's move on strategy. Let's, you know, it's like what Don Draper said. If you don't like the conversation, change the conversation. Yeah. Well, it's like what Don Draper said. If you don't like the conversation, change the conversation. So the conversation around teen mental health, the conversation around insurrection, the conversation around our discourse becoming more cross. We don't like that conversation.

So let's talk about the metaverse. And he's creating a human shield with a new position called the CEO of Facebook. Not yet, but he's going to. 100%. We need to stay vigilant and hold this company accountable. And I mean, when you think about how nihilistic and maniacal this whole thing is, your herb gardens and your dating are getting in the way of my ability to control your whole life. And it's like, okay, the universe or the metaverse that is Instagram and Facebook right now, we want that to envelop our entire lives? Said nobody ever.

Let me just say, it's not going to. They don't have the talent there on Facebook. It's not going to work. They don't have, let me flat out say, they are not innovators. They are also stealing from everyone else's ideas here. There's already metaverse versions in Roblox and all kinds of places. It already exists. And they're trying, I think the smartest take, I think it was Neil Dash said it's a land grab. It's an absolute land grab attempt by throwing money against a wall. And it's going to be, I think it's like Microsoft doing the phone. Like, you know, it's just not going to work.

You're not good at it. You're not good at any of this stuff. And you need to answer for your sins. That's all. You just do. And I think the idea of moving on, this is exactly the tone. He did a lot of interviews. Let me just, I noted, all

four white men that he talked to, which is fine. The best one was Ben Thompson, who does a great job. And he was focused in on the theories and stuff, and I appreciate Ben Thompson quite a bit. I would appreciate if he would ask tougher questions on the other stuff, but he did a great, that was a very good interview.

And so, one of the things that he was talking about in creating this metaverse is that just because he says it's so doesn't mean it's so, right? And he had the same attitude when I asked him about Myanmar and stuff like that, when I'm like, how do you feel about what happened? And he's like, I just want to fix it, Kara. I want to get my arm, you know, I want to roll up my sleeves. I want to fix it. I'm like, yeah, you broke it. You're the one who broke it. I want to know how you did that and how you feel about it. He would refuse to answer that question. Instead, kept going, I'm a fixer. I'm an engineer. I like to get in there and fix it.

And I was like, listen, arsonist, I want to understand why you burnt it down. What were you thinking? And so, it was really, it was the same attitude, like, we're going to get, we're going to go here now, because this isn't, I found that really irritating, because that means he hasn't evolved at all in that many years, or has decided this works, sort of the brazing it out, which does work, you know, for Trump or for anybody else. Well, the idea of the metaverse on its own is scary enough, and that is, there's so many individuals. Well, I think your force, there's a wonderful thing about the real world without your phone, and that is you're forced to interact with people and you're forced to learn uncomfortable skills like socialization and person-to-person contact and looking people in the eye and handling disappointment and, you know, blow-drying your hair. All the things that's required around socialization and this notion that at a young age you might invent your own universe and find out or dictate

what happens in that metaverse, and then have Mark Zuckerberg deciding the context and flavor and nuance of relationships in our economy. It's just like, literally, the last person in the world, here's the decision. I don't think it's going to work. But if it did work, effectively what you're doing is the person controlling that metaverse who has the only voting shares becomes the closest thing we've had to what I'll call a scientific god. And who would nominate Mark Zuckerberg for that role? It's just not going to work. It's not a fresh new idea.

Everything he presented has been around forever. And creating and making it, I did four questions in my columns week with Ethan Zuckerman, who was one of the very earliest metaverse people. And he was like, I invented the metaverse 30 years ago, and it sucks, and it still sucks. The smart technologist, this is super interesting. And what we just talked about, people working from home, changing the workplace, we are going to have these worlds. They're going to happen.

I have no question. Directionally, just the same way, when Google Glass was a disaster, I'm like, directionally, it's correct. Executionally, it's wrong. Like, that was the deal. But directionally, we are going to that AR, VR world. We certainly are.

But, you know, I think one of the things they talked about was him doing an end run around Google and Apple because he didn't have the phone. He tried to do home. And I think Ben talked about that. I think that was the things they talked about was him doing an end run around Google and Apple because he didn't have the phone. He tried to do home. And I think Ben talked about that. I think that was a really good – I mean, I pointed it out, too. He's trying to get around the power they have in the phone area because he wasn't there. He's hoping –

He needs distribution. Yeah. He's hoping everyone will employ these headsets. They have a new headset called Project Cambria. And that's supposed to have – I forget. It's something through video or whatever. People aren't wearing these. Kids, there's no way that people are going to be

constantly living in these environments the way he thinks. It's such a flawed thinking of how we're going to use this. I do think we're going to use it for work. I think we'll use it for some play, but it's not going to envelop us. It's not their Hail Mary for this company. It's not. They should fix their very good business and make it better. That's what they should do. So, anybody who has kids, especially boys, and lets them spend too much time on their iPad or

playing FIFA, you realize this thing happens where they become assholes. Yeah. It's like their brain gets rewired, they get short, they get easily, they get very over-emotional. And the idea that Mark Zuckerberg would decide to do that to the rest of the world is really frightening. The other thing that's just sort of weird about all of this is the people with the most options in the world, the Bezos, the Musk, the Zuckerbergs, the wealthiest people in the world have all decided they want to leave this universe. And it's just, it feels like just such an abdication of, you know, they either want to go into space or they want to go into a different universe.

And it's just, it's really disappointing. It's like, is that your role in society? That's how you're going to improve the world? Is you're going to give up on this universe and try another one? I just, there's something very nihilistic about it, very disappointing. Yeah, I agree. And I would have to say, everyone expects me to sort of dunk on Mark Zuckerberg. I just was wholly unimpressed with the ideas.

But I am always wholly unimpressed by the innovations from Facebook. You know, if Evan Spiegel showed me some of their AR, VR stuff, and he's like, the way he talked about it, it's like, this is really early. We're trying to fix it, you know, the right way. It's like, and it was cool. There was like this thing where there were planets around me. I was like, the way he talked about it, he's like, this is really early. We're trying to fix it, you know, the right way. It's like, and it was cool. There was, like, this thing where there were planets around me. I was like, okay. And he's like, you know, it doesn't work right here.

And he was just, like, honest about it, like what he's doing here. And I was like, he's an innovator. You know, Bezos is an innovator. Musk, whatever you think of Musk, is an innovator. And this is just, these are sad little ideas that were elsewhere. And then the whole, I watched the thing again. I forced myself to watch the demo again. And, you know, he's talking to Andrew Bosworth, et cetera.

Like, hey, huh. I was like, this is like Bill Gates, worse than Bill Gates ever presented. And he thinks he's like Steve Jobs. He thinks he's Steve. And I was like, I literally was like, I knew Steve Jobs. Steve Jobs was not my friend, but I knew him really well, and you know Steve Jobs. That's all I kept thinking. Like, stop it.

Fix what you made that is problematic, that is actually a good business, is what I would say. But the paradigm shift that, and this would have been a prediction if it had been a Thursday, but here's the thing. AR, or the metaverse, whatever you want to call it, this is the mistake I think they're making. And that is the metaverse or AR, they're focused on the wrong sense. And that is they think that the new metaverse is going to be about visual stimulation. It's not. It's going to be audio.

The company that's going to make the most progress around the metaverse is going to be the company that has the best wearable in history, and that is the metaverse or the entry point into the metaverse isn't going to be the company that has the best wearable in history, and that is the metaverse of the art. Entry point into the metaverse isn't going to be around vision or the Oculus. It's going to be around audio, and it's going to be from Apple on AirPods. AirPods will install a camera, and they will use AI to figure out different things, different noises and sounds and information and updates that go into your ears. It'll have a camera to recognize things. But AirPods are what Mark Zuckerberg is hoping this $10 billion and 10,000 people would accomplish.

I'm at your concert. I'm at the concert with him. I'm like, no, that's not happening. Imagine your best friend is at a concert somewhere across the world. What if you could be there with her? Yo. You're here! I'm like, not

happening. Like, I was at, I did this thing with Katie Couric on Saturday, and she asked about it. I'm like, everyone in the audience, you're going to be dead. It doesn't matter. Don't worry about it. Like, you're not going to suddenly have hologram images in the audience here. But what Mark Zuckerberg envisions, people aren't

going to wear this fucking pocket. I've worn them. I've worn every one of them. You wear it for 20 minutes and you want out of the thing. And you want to vomit. Here's the difference. Not just that. That's gotten better.

The most popular accessory in history, the most popular wearable in history is AirPods. I find myself just walking around the house with them in my ears, even though I don't have anything on. That's the dream of your entry point in your distribution around the metaverse. And Apple will come up with some incredibly elegant camera that brings in some sort of visual signal collector, and it'll start informing you of things. And cool glasses that you just put on really quickly.

It's like when I'm away from my phone and I have my AirPods on, it goes, a call from Kathleen Dillon. Would you like to accept? And I say yes. Yeah. So Apple is best positioned here. Helpful. I think that this thing is going to be like, I think it's going to be the $10 billion, 10,000 person turkey.

I'm glad. Good. Take his money, people. Do whatever you want. Anyway, we're going to go on a quick break. When we come back, we'll see if there's any progress in the Build Back Better bill. And then we'll talk to a friend of Pivot on how to pay for it. 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. I just don't get it. I just wish someone could do the research on it. Can we figure this out? Hey, y'all. I'm John Blenhill, and I'm hosting a new podcast at Vox called Explain It To Me. Here's how it works. You call our hotline with questions you can't quite answer

on your own. We'll investigate and call you back to tell you what we found. We'll bring you the answers you need every Wednesday starting September 18th. So follow Explain It to Me, presented by Klaviyo. All right, Scott, we're back for our second big story. President Biden is in Scotland this week at COP26 Climate Summit. He wrapped up the G20 Summit on Sunday with new commitments around climate change. Meanwhile, the Build Better Back bill could get a vote as early as this week, probably in tomorrow or the next day. On Sunday, his energy secretary told MSNBC that the bill has unanimous support. The bill includes universal pre-K, expansions on climate and Medicare spending, supply chain improvements, and much more. Lots of come out. Paid family leave, free community college, which would have been nice, dental

and vision and Medicare, lower prescription drug prices. All of those were cut because of Joe Manchin and Kyrsten Sinema. I'm going to put it right on their plate. No one got everything they wanted, including me. But that's what compromise is. I think pre-K is very important. And some other things are here. And now Jonathan Cantor is in place.

So what happens? So what do you think? Would the build better back and also the climate stuff? Well, it's just frustrating as a Democrat. We just, we never miss an opportunity to miss an opportunity. And we have, you know, it's like, what is it? Republicans fall in line, we fall in love. And we're creating this interesting warfare. And rather than, we are pulling things out, and not only that, we're diminishing the

budgets instead of doing a few things well. We're going to be one of seven nations left in the world that doesn't have maternity leave. I mean, we've had a 20- or 30-year regression in the participation by women in the labor force, and we're not going to offer, I mean, it just seems like it makes sense economically to offer maternity leave for a lot of reasons. So, and I'm disappointed that we can't, McConnell gets the Republicans in a room and says, what do you need? What do you need? Okay, we're leaving with a unified voice here. We're all on board. And we have what are, in my opinion, people who are posing as moderates. They're narcissists jonesing for the camera in Manchin and Sinema. And then we have the far left also holding this whole thing hostage,

saying we have to have X, Y, and Z, and it's not enough. And it strikes me as a lack of leadership and a lack of recognition. If we don't get this done, the Democrats are going to get clocked. It's like, okay, you have all three houses of government and you can't figure this out? Yeah. Well, we're in an unusual position. Let's be honest. I mean, come on. We're with these two, like, ridiculous narcissists that are now, you know, Manchin I kind of get.

I kind of get. Her, I don't even understand. Like, you know, at some point you're like, really? Well, how come McConnell's able to deal with his narcissists and we're not? Yeah, it's true. It's true. What are you going to do to him? What are you going to do?

Hit him on the head with a stick? There's not a lot. Yeah, I don't know what the leverage is, but it seems like McConnell finds that leverage. It feels like the Republicans find that leverage to get their people in line. Or they get them to leave, like Adam Kinzinger is leaving. All these people are leaving. If we don't get this through, if we don't show, if we can't deliver against the promises we've been making for a decade around what's needed, and we control all three houses of government and we can't start to deliver against it, right now we look very weak. I would agree.

It looks like the president doesn't have control of his own allies. Yeah. Or doesn't have a rapport. Paid family leave would have been nice. Community college, that was, I mean, that's been a dream for Democrats forever. Never seems to come to pass. Dental and vision seems like the most normal thing

to add in. Well, all the things that kind of were the most popular, expanding Medicaid, paying for hearing aids with an aging population, there was just family leave. Anyways, this stuff seems intractable and disappointing until it isn't and usually sorts of deadline that come together. But they keep making these new deadlines. Everyone was hoping that when Biden left for the summit, he would be able to announce something.

So they tried to pretend that they'd all come together, but it's clear they haven't. I know. I just, I find it frustrating. The infrastructure bill is supposed to follow, by the way. The infrastructure bill is after that. Yeah. I think they'll get it through on some, like. I hope so.

It'll just be, you know, the tendency is to focus on everything that didn't mark rather than what did work. Universal pre-K is amazing. Isn't it amazing? Yeah. And child tax work. Universal pre-K is amazing. It's an amazing improvement. Yeah, and child tax credit. That could be huge. Yeah, it's just not quite as exciting as it was. We'll see.

You know what, they're down, but maybe that's a good thing to be down at this moment in time, and then you sort of pop back for the midterms. Who knows? Also, the climate change stuff is a little less, more disappointing without Russia and China there. You know, I think we just decided to die. I don't know what to say.

Like, okay. Let's just cook. Let's just cook. Let's just see what happens. And then the rich among us will float our way out and the others can, good luck with that. That's what I feel like. It's like, yeah, we're going to just wait for a major climate disaster.

And then even then, even though we've had many of them, we're going to just see what happens. That's just what I feel like. Maybe not. Maybe I had too much candy corn. I can't tell. I don't know. So we spread out. We went through the ritual.

We went through the ritual of my son came home, my two kids came home, and now my 14-year- old has decided he doesn't need it he doesn't need an outfit but he'll still collect candy oh right so then he puts on like a sheet or a bad stage right and my son my youngest is still into me we went as both went to soccer players which is nice and i love the ritual where they come home and they spread out all the candy and they sort it into yeah you know the hundred thousand dollar bar and the yeah you know the the the the candy corn and the uh you know on the almond joys and everything and the first corn and the Almond Joys and everything. And the first thing my youngest son does is he says to me, all right, this is what is off limits for you, Dad.

And we spend 10 minutes with him going through, okay, you can have this Tootsie Roll, but you can't have the jumbo-sized Tootsie Roll. And he goes through all these things. And it's a great life lesson, negotiation. And then I listen really thoughtful. And as soon as he goes up to the room, just so he can hear, see out of the corner of his eye, I take all the shit that I wasn't supposed to eat and start unwrapping it all. Because I think that's a life lesson. I think negotiating. You don't touch their candy. Oh my God.

Oh my God. He literally went through for 10 minutes. Don't eat the big Tootsie Roll. You can have the little one. You can have the blow Pop, but don't have the Great Blow Pop. I only have one. And I took total meticulous notes. And then the moment he started heading upstairs, grabbed all that shit and started unwrapping it and eating it all. Well, you know, it's actually a lesson. That's a life lesson. It's a lesson in economics is what it is.

So I think it's time to bring in our friend of Pivot. So, our friend of Pivot today is Aswath Damodaran, who's a professor of finance at NYU Stern, where he has literally retired the best professor award and went to one of, I don't know, seven of the last seven years, it feels like. And he's also maybe one of a dozen people in the world that can actually move markets. When Aswath goes on CNBC or other media, he will actually move the markets. And most importantly, Aswath each on CNBC or other media, he will actually move the markets. And most importantly, Aswath each year is invited to a gathering where he teaches other teachers how to teach. So he is not only a colleague, but a real role model. Anyways, welcome, Aswath. Thank you, Scott. Glad to be on.

Yeah, Scott's really jealous. No, he doesn't have to be. Scott's a great teacher. He is. Go on, go on. So I think let's start off. We were just talking about the bill back better. Is it back better? Whatever.

The packages that are going through Congress right now. And let's start with one that you've called the proposed billionaire's tax, which is sort of, I think, off the table. Or no, it's on there. It's still on the table. A terrible idea. Can you go through why? No, when I think about tax code, I think about something designed to generate revenues that are predictable and stable over time that you can draw on as a government.

The problem with the billionaire tax law is I think the main objective seems to be to punish people who people think deserve to be punished, billionaires. seems to be to punish people who people think deserve to be punished, billionaires. It's directed at a very small number, 750 people, which already is a problem because any tax law directed at relatively small numbers is inherently more unstable than tax law that hits a lot of people. Sales tax is a much more predictable, solid source of revenue than one that hits only 100 or 1,000 people. The second, it's based on capital gains. You're saying, so what? Of all of the bases you can use for computing taxes, it's the most unstable. It's positive one, you're negative the next.

And just as an example, I gave the example of how much revenues California collects in taxes versus Florida. California is disproportionately dependent on capital gains taxes because a lot of people here will make their money in capital gains, and it taxes them as ordinary income. And if you look at the volatility over time, California tax revenues are much more volatile. Third, it's based on unearned capital gains. And I think the problem with any time you tax, let me take the word unearned back, it's unrealized capital gains. Anytime you tax unrealized profits of any kind, you create frictions. Frictions in what sense? Somebody has to do something to pay those taxes. You don't have the cash on hand. You either have to sell

shares, you go to borrow money, and that creates consequences and costs which have to be borne, not just by the taxpayer, but the rest of us. For instance, if you make Elon Musk pay $50 billion, which is roughly what he have due coming next year, he doesn't have $50 billion in cash. He might be worth close to $300 billion, but much of it is tied up in Tesla stock. So you're saying, okay, that's fine. He can go out and sell $50 billion worth of Tesla stock. That's going to have a disproportionate impact on Tesla stock price because it's not just the selling, it's who's doing the selling. He's saying he can borrow the money. I've heard people say, you know, you'd

be crazy to borrow $50 billion in Tesla stock. It could be worth one-fifth of what it is a year from now, in which case you're going to be in real trouble, even if you're Elon Musk with 50 billion in debt. So on those three dimensions already of an issue. And the fourth is, and let's be on, let's be much more direct. If you wanted tax billionaires, tax billionaires. If you wanted tax wealth, tax wealth. Don't hide behind this isn't a wealth tax. It's an incremental wealth tax. I would have much more willingness to think of this seriously if the people proposing it were open about what they were doing. It's a one-year incremental wealth tax. Much of the revenue will be collected next year.

And then it's going to be trench warfare after that because people are going to figure out how to move their assets. For instance, even within the original law, you're going to do one set of rules for liquid assets, things you could, you know, shares and bonds, and one for, you know, real estate and illiquid assets, where the tax wouldn't be due, you'd just be upping the basis each year. And when you sold it, over time, the billionaires are going to find a way to move their money from liquid to illiquid assets. So from the perspective of just efficiency, it seems to deliver on none of the dimensions. It's an inefficient tax.

It's not even going to be that punitive on the people that's directed it after year one. And it's going to create side costs for the rest of us. You've got to punish billionaires. Find a more direct, more honest way of doing it because I don't think this is the way to do it. Which would be? Which would be what? Which would be if you want to, I mean, I think to start with that step up that we get at inheritance. Let's face it, that is one of the reasons you're never collecting on capital gains taxes, is there is no step up. So if you can tie it to an event, either sale or inheritance, you're going to get a big chunk of these revenues.

Of course, you've got to wait for these people to die, and that might be a long time for some of these people. But remember, 750 billionaires, there are quite a few geriatric billionaires on that list. So you're going to start collecting revenues. It'll be just more gradually over time. If you want to create a wealth tax, let's have an open debate about what that wealth tax is

and how you deal with the liquidity issues. Don't try to hide behind, this is not a wealth tax. I was watching Janet Yellen trying to tiptoe her way around the fact that this was a wealth tax. And it was embarrassing for an economist who clearly knows better to be able to say, this is really not a wealth tax. it's a capital gains tax. It is a wealth tax, no matter how you dress it up. So I'd prefer you be more open about what you are trying to do.

Yeah, well, it's easy to smack billionaires, Scott. It feels like at the end of the day, it's kind of a windfall tax based on just massive wealth accretion among 700 people over the last 24 months. Basically, 2021 will be a big tax revenue year, right? Because you can't go back and fix things that you've done over the last 24 months. So basically 2021 will be a big tax revenue year, right? Because you can't go back and fix things that you've done over the last 20 years. From that perspective, it'll collect a lot of revenues next year.

And this is sitting in the tax code, creating problems for the rest of the world for the rest of eternity. Right. So I want to just draw back a little bit. And Aswad literally wrote the book on valuation. And I want you to just give us your comments on the market right now. We've got Apple trading at a PE of 35. It typically trades somewhere between 10 and 15 through its history. You've got Tesla worth

more than the entire automobile industry combined. What is your view on the market and specific sectors as it relates to valuation? I think the first thing that's happened is there aren't too many places you can go in this market we can earn a nice safe return, right? Dividends, you know, put your money in bonds. When the T-bond rate is one and a half percent, your alternatives are already shredded. And where alternatives are shredded, everything is relative in markets. So stocks look expensive relative to history, but not relative to bonds. This is a market where everything to begin with is being driven by the fact that interest rates are so low. And when interest rates are low, everything else gets pushed up. I mean, holding all its constant,

if I make the T-bond rate go from 5% to 1.5%, the P-E ratio for every stock will double, maybe go up by even triple, simply because you've made the alternatives less attractive. So the real debate is, are T-bond rates at 1.5% sustainable? That, I think, is the core. It's not whether stocks are overpriced. It's whether the level of interest rates we're observing are sustainable, given the fact that inflation seems to be back. And we can debate about whether it'll drop back down to 3% or stay at 5%. But it's not going to go back to half a percent. I mean, it's a, and to me, a world in which inflation is 3% and the T-bond rate is 1.5% is not a word that's sustainable. Because you're buying bonds and accepting a rate less than the inflation rate. I think what's keeping this market

afloat is this unholy belief that the Federal Reserve can do whatever it wants and rates will be set by the Fed. It's amazing how deep this belief is, that if Jerome Powell wills it, the T-bond rate can stay at 1.5%. I wish I could have that faith. It would make life a lot easier for me from a valuation perspective. I just think that this is a market of contradictions. On the one hand, stocks are being priced on the assumption

that the economy is going to come back, earnings growth is going to be strong. On the other hand, the bond market seems to be saying, don't, not so fast, guys. We don't think growth is coming back. We think this market is going to lapse back to what it was after the 2008-2009 crisis, a low inflation, anemic growth market. Both groups can't be right. And the interesting question is, as you see this fought out over the next year, is which group is going to come out on top? Because either bond rates will have to go up or stock prices have to come down.

And that adjustment is going to be painful no matter which way it happens. So you said that the market, everything is sort of relative. Do you think at some point, and are we here now, that the American tech trade, if you will, gets played out or gets exhausted, whereas valuations in Europe and LATAM just seem much more reasonable? Do you think there will be sort of a rotation out of the U.S. trade, which has been on a 13-year bull run? I think that, you know, anytime you've had a decade of winning like tech has, you always have to think about some degree of pullback. But I think part of tech domination reflects a real change in our lives. I tell people about how much of our lives we live in the ecosystems of just the top six companies, right? Facebook, Amazon, Netflix, Google, Apple, and Microsoft. I mean, I actually chronicled one

day, I just sat down and said, every minute of the day, I'm in the ecosystem of one of these companies. And I think what you see reflected in market caps now is where we're spending our lives, not where we're spending our money necessarily, but where we're spending our time, our risk. And I think that, I think we've kind of stretched it too much. I think that, you know, as you look at tech companies, we can see their reach, but I think we're overestimating the profitability that's going to come from the reach because outside of the big winners in the tech space, there are a lot of tech companies that grow but don't deliver the profits to justify that growth. So for the next decade of our investing, I would direct my money away from

the big winners of the last decade. Doesn't mean I'm going to sell all my tech stocks, because some of them I think I can still justify. But as I add stocks, I'm more likely to add stocks that are outside that space. But the other force I'm working against is this notion of ESG, which is a discussion for another day. Because let's face it, some of the run-up you're going to see in tech companies is going to come from the pressure to invest away from fossil fuel companies, companies that create carbon footprints. And that's been one of my arguments against ESG is sometimes by focusing so much on carbon footprints and climate change as your focus in ESG,

there might be other measures, dimensions of goodness that you're giving up on. I mean, you look at the 10 biggest holdings of ESG funds, they're all tech companies. I mean, I am old enough to remember when Microsoft was the Darth Vader of technology. And today, if you look at the most widely held stock in ESG funds, it's Microsoft. There's Facebook. And it's amazing how tech companies dominate those holdings. So I think there are forces at play that will keep tech afloat. And I think that there are forces both in the economy and in investing. But if I were investing from scratch, I would hold a larger proportion of European and Latin American companies. Asia has its own version of a tech bubble. You look at Chinese stocks,

in spite of the giveback on Tencent and Alibaba and JD, I mean, you look at the top 10 Chinese companies, there were no tech companies 12 years ago. Now there are three or four tech companies on that list. You look at India, the biggest IPOs of the last few months have been Zomato, an online delivery company like DoorDash, and Paytm, which is an online payment processing company. This is not just a US tech issue. I think it's a tech, I don't want to use the word bubble because that prejudges it, but it's a tech run-up we're seeing around the world. Around the world. So speaking of which, one of the things that tech was quick to grab onto was SPACs, obviously, among other things.

And it was a lot of some different electric car companies, electric truck companies and this and that. Have we hit peak SPAC? I mean, I guess Trump, of course, President Trump. Tell us about that. How do you feel about the Trump SPAC, for example? I think SPACs in general represent the outsourcing of thinking on the part of investors. Because think of what we're doing with the SPAC. We're saying, as investors, IPOs are so confusing. We don't know what's going on. It's tough to screen what a good IPO is. You know what?

We're going to outsource it. We're going to outsource it to a sponsor who will do all the work for us. The only group that consistently wins on SPACs are the sponsors. And they win because they keep 20% of the proceeds. It's an extraordinarily expensive way of outsourcing. So I think SPACs will stay, but the percentage that sponsors get to keep is going to keep dropping. Because I wrote about this when I wrote about IPOs, that the IPO process is broken. The old banker-led IPO comes with costs. And you're saying, what am I paying for?

Bankers are terrible at pricing stocks. I don't need them to sell me if I'm Peloton or I'm Facebook. I don't need Goldman Sachs to tell the world who I am. I can do it myself. So the banker-led IPO is under threat. Direct listings are problematic because of the way they're restricted. SPACs have kind of stepped in. We're in this middle part of the process where we're trying to figure out a new way of going public that's less expensive and more efficient. Which is? Spacks are not it, but this is an intermediate style. What would you imagine?

A hybrid kind of thing? I think you're going to get some kind of a hybrid. A direct listing process where there's some degree of oversight, right? Because a direct listing process is completely market set. And for many companies that have no visibility, that's not going to work. I think you're going to get some merging of these three that's going to emerge where you're not going to get somebody taking 20% of the raised proceeds and keeping it for themselves. But I think we're in that process of disruption of the disruption process. Interesting. Scott?

disruption process. Interesting. Scott? So, this sort of fake it till you'll make it means or strategy seems to be much more prevalent when valuations get to this point. And we found out that Sweetgreen's CEO was saying they were profitable when they weren't. Yeah, Takara Swisher. Takara Swisher, that's right. And then the rent the runway IPO, that just appears to me to be a business that for every dollar they make, they lose a dollar, whether they scale or don't scale. They're remarkably consistent. Does it feel like this fake-it-till-you-make-it trend is getting worse? And does it reflect the kind of crazy valuation some of these companies are getting? I call it storytelling run amok, which is every IPO you're telling a story,

you're trying to convince people. 40 years ago, that story had to have an element of how are you going to make money as part of the story. Microsoft and Apple, by the time they got public, had pathways. By the time Uber came along, people had kind of given up on the making money part of the story. It was all about growth. Look at how much we're growing, about users. Now people seem to, we seem to be in that post-growth period. People aren't even talking about growth in the conventional sense. They're talking about, you know, I was listening to the Paytm CEO saying, don't even look at revenues and growth.

We're about social change. And I said, we're now truly in territory where nobody's been before because you want my real money so you can create social change. I think we've lost all degrees of accountability in this process. The danger as we move further and further away

from business model-based IPOs is we have fewer metrics to hold these people accountable. How do we know that the Uber model is not working until it's too late? And I think that is part of the reason CEOs like it, because if I can't hold them accountable, there's no metric I can look at each year and say, you're not moving anywhere towards where you told me you'd be. It'll be too late before I actually catch them. So I can understand why they do it. What I don't understand is why investors are not pushing up. I can actually understand why CEOs do what they do. But why the heck do institutional investors actually buy these shares without asking the tough questions?

So I think the blame here lies both with the companies and the investors who are willing to invest in these companies with these kind of no business model stories. All right. Speaking of somebody who doesn't have a business model, Facebook. I'm just curious what your thoughts are on the rebranding and what they're doing. It was a lot of vaporware, very nice demos, actually not very good demos. But how do you look at that as a business and what they're doing as an example of sort of hand-waving? I did buy Facebook in 2018 when the Cambridge Analytica scandal hit. Because now I saw a lot of hypocrisy among people who are invested in Facebook, posting on Facebook, complaining about Facebook privacy. I actually sold the day they changed their name from Facebook to Meta.

Because in my experience, when you change your name, it's a sign that your name has become too odious to be connected to a company. That's never a good sign. It's never a good sign. Wasn't a good sign when Valiant decided to rename itself Bausch & Lomb. It basically means that you have no friends left, right? I mean, that's part of the problem with Facebook is, I mean, who can defend Facebook from the perspective of, and I don't think that's a

good place to be. And I think they would not, that doesn't mean they're going to crash and burn, but I think that in a sense, it's going to be trench warfare from now on from Facebook. It's not going to be easy. They're going to have to fight to keep their market share rather than increase their market share, I mean, historically. So to me, I mean, I won't even go into whether meta even makes sense to me because when I think of meta, I think of world peace and a basketball player who should not have been on the court. A basketball player who should not have been on the court. But to me, Facebook, I think, has, you know, it's always had a good business model in terms of making money. It's been terrible at managing the rest of its interactions with society.

So I think it's blown up. And finally, this is a manifestation that things are out of control. Well, Microsoft came back. But go ahead, Scott. So back to the notion of a story, it feels like stocks typically trade on either fundamentals or technicals, but now they're stocks trading on the notion of a movement, these meme stocks. And yet AMC and GameStop have sustained or at least leveled out at much higher levels, indicating some sort of fundamental support. What is your thought on meme stocks? I think especially with smaller cap companies, what we're recognizing is,

what I think of as crowd trading. We've had crowdsourcing, crowd reviewing, now we have crowd trading, which basically means a group of people gathered together on a social media platform, whether it's Reddit or Facebook or whatever it is, and they all buy at the same time. They tell each other the same story. And they can, I mean, but the stock, you know, the market cap of GameStop or AMC doesn't take a lot of people moving,

you know, together to keep the stock price up. I mean, one interesting feature is if you go to the, I mean, I spent a few weeks on the Wall Street bets segment, right, when they were talking about, especially when GameStop was on its rise. And I was looking, I mean, I was trying to give them the benefit of the doubt that they had some kind of a business model for GameStop that could explain why they wanted the stock to be 10 times. It's not there. It's not there. You know what the primary forces driving the trading were? Greed and revenge. Greed, I understand. It's always been there. Revenge in the sense, it's amazing. 80% of the polls were, we're going to teach the hedge funds a lesson.

And the problem was, hedge funds are malleable. They can be either side of the transaction. The biggest winners on the GameStop run-up were actually some of the hedge funds on the other side of the transaction. But I've always drawn this distinction between pricing and value. Pricing is driven by emotion, by mood, and it's an extraordinarily powerful force. I think in finance, we've discovered that momentum can trump any fundamental. And if there's enough mood on your side, you can keep the price up. Now you see the Tesla, right? $1,000 per share. I can't think of an intrinsic explanation for the $1,000 per share,

but I'd be out of my mind to sell short on Tesla because the mood is there. The mood could shift, but who knows when that'll happen. So I think that we're discovering the power of pricing yet again. I mean, this time around, I think with social media, the pricing, the power of pricing has become even greater than it ever was because these people can now chat with each other

in platforms with thousands of people on and kind of egg each other on. But I think that pricing has always been powerful. It's just become even more so. We only have time for two more questions. So I'm going to ask the one from our listeners. Why can't the U.S. rein in its tech industry like China? How do you answer that, Aswad? Do you really want them to do what China is doing? No, I don't. Of course I don't. I think indulging in outsized, outright extortion of its tech companies. I think there are ways in which we can rein them in, but it's not the collective reining in, right?

Because you've got to figure out what type of behavior on the part of tech companies you find, that you think hurt the economy, hurt people. And you've got to, if you make this a bludgeon and you go after all tech companies, I think you're going to create more you make this a bludgeon and you go after all tech companies, I think you're going to create more damage than good. Agreed.

You've got to decide what behavior on the part of tech companies you don't like, and you've got to specifically rein that in. I mean, let's not make the EU our model either, right? I mean, the EU can do what it is, what it does simply because it is a shrinking part of the world economy and it doesn't have any great tech companies. I know it's maybe Spotify, but even Spotify, I think, is out of its reach. So I think what the EU does, we are where the tech companies were born and they've grown.

So we've got to figure out our own way of reining them in. But it's got to be focused and narrow on the type of behavior we don't want these tech companies to involve in. And it's got to start with the data. I mean, let's face it, these tech companies have business models built on learning from the data they collect from you. And I think that, no, we have to start to behave differently around tech companies. We can't complain about tech companies invading our privacy and keep giving them location details and other specifics of our lives because we get a convenience. For free GPS, we're allowing Waze and Google Maps and Apple Maps to track us wherever we are. So I think part of this is we've got to accept the fact that we got some conveniences

because of what tech companies have given us. And unless we're willing to give up on some of those conveniences, we're not going to like what the government does. Yeah, fair point. But nobody likes seatbelts either. And here we are. So just to continue with this theme of storytelling, if you think of tech as somewhere between 49% and 51% storytelling versus the underlying fundamentals, and then you start talking about the meme stocks, and we're getting to kind of 90-plus percentage of the values driven by the story. It feels like crypto is arguably bumping up against 100% story. And NFTs, right?

And NFTs. They don't create cash flow. Their valuations have no metrics. What is your view on cryptocurrencies and NFTs as it relates to valuation? It's great because I'm going to circle back to the first thing I said, which is we live in a world where the alternatives look less and less attractive in terms of investing. So if you don't, if you think stocks are overpriced, well, bonds, you make too low a return. But let's face it, there's a subset, and it's not a small subset of people who believe

that all financial assets are being held afloat by central banks gone crazy and rates being too low. It's a doomsday scenario because there's no safe place within financial assets to hide then because you're convinced that the whole thing is going to come crashing down. Is it any surprise? In the old days, you'd have gone and bought gold, right? 50 years ago, if you thought that the whole financial system was an edifice that was going to come down, you bought gold, you bought diamonds, you bought... You know what the millennial version of gold is?

You buy Bitcoin, you buy NFTs, because you say, I don't trust any of these financial assets. These central banks are all crazy. And that segment is not small and it has fairly strong consumption power and investing power. And guess where all that money is going? It's going to cryptos, it's going to NFTs. And the argument for them is not so much that they are good, but that the rest of the world is going to come crashing down. And therefore, I'm going to buy something that's not connected to anything that is part of the system.

It's kind of the 2020, 2021 version of I don't like the system and I'm going to rebel against it. But that's a myth, right? It is connected, isn't it? It is connected, and I think that's what they, you know, but at this point lecturing them is not, because we're all part of the system, right? Yeah.

Yeah, okay boomer is the response I get to anything. When we tell them this, they say, of course you're going to tell us that you're part of the system. So I've given up on lecturing them. The only way they'll find out is by feeling the pain. Feeling the pain. All right, this has been so fascinating. Will you come back and tell us exactly how to think? Because I think you're smarter than all of us.

I can't tell you how to think, but I'll tell you how I think, and I'm confused all the time. Well, you're fantastic. Thank you so much for doing this, Scott. He's one of your biggest fans, just so you know. He talks about it. He's always quoting you. And I can see why you're— Scott's one of my favorite people, so I'm glad we have him at Stern Shake, you know, stirring the pot and...

Making trouble? Creating trouble, exactly. You know, one thing you can do in teaching is you can provoke, you can anger, but you can never bore. And Scott is never boring. That is fair. Anyway, thank you so much, Aswath. We really appreciate it.

Thank you. All right, Scott. He is as advertised. Fantastic. Can I tell you a story about Aswath? Sure. The man, not only like, he literally is the man in the world of finance and valuation. About 10 years ago, I was working for a hedge fund. I was advising them. And he said, can you bring in someone to teach our analysts just about valuation? I said, well, I've got the guy. His name is Aswath the Motor. And he said, fine. And I said, but he's super busy. Everybody in the world wants Aswath. We're going to have to offer him real cab. And he said, I don't care. So I

called Aswath and I said, all right, eight lunches, Tuesday afternoon. I think it was like $50,000 a lunch. So $400,000 for eight lunches. And he said, so he said two things. First thing he said was, Scott, you're a friend. I don't want to get paid. That's the kind of guy he is. And then a week later, he did the first one. And then a week later, he called me back and said, I'm so embarrassed, but I can't do the next seven because my daughter has soccer practice on Thursday. I mean, he literally, when you think about molding a teacher from clay, this is the guy you want. He's great. He's just such a, he's literally the Michael Jordan of NYU, and he's like a very decent man.

Well, fantastic. I'm glad you brought him here. Okay, we're going to go on a quick break, and we'll be back for wins and fails. be back for wins and fails. 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. 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. Easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Okay, Scott, wins and fails. Wins and fails. What do you say? So my win is I actually think that the Climate Summit in Glasgow, in addition to, it's great as a Glaswegian to see Glasgow on the world stage, I might say. If you do look at the narrative coming out of the conference, climate change has become a known known.

And that wasn't true before this. And so I'm actually hopeful. There's no more bullshit. There's no more people trying to say climate change is not manmade. There's been that UN report that came out looking at the 11,000 papers written on it. There is now general consensus and acknowledgement. And we didn't have that before. So while people are focused on, well, unless we get China and India to the table, it's not going to happen. One of the things we miss in America is a truth. And that is that science is the closest thing we have to a truth. And I do believe for the first time there was a general acknowledgement that climate change is a truth and that everybody

acknowledges that truth. And I don't think people remember that it wasn't that long ago where there was still debate, there was still senators and representatives coming into the rotunda with a snowball saying, see, climate change isn't happening. I do think there's progress. I think we have a truth, which is really important. And I think that's the basis for progress. So, that is my win. Do you have a truth, which is really important, and I think that's the basis for progress. So that is my win. Do you have any wins, Kara? I would say the internet's reaction to the name Meta. I just laughed in that. You like that?

And in Brazil, it was like a worldwide fun time. You know what I mean? Like there was Feta, there was Twisted Condoms, there was Suzanne Somers Thighmaster. It just was so enjoyable. This is what I love on the internet. And then, you know, the penises, drawing penises everywhere. I thought Colbert had the best take.

From now on, we're going to be metaverse first, not Facebook first. But don't you worry, the self-esteem of teenage girls will always be last. I just think it brought out all kinds of creativity, which I thought was a huge win. And then my fail is the Washington Post article about how millennials scare their bosses. That was New York Times. That was New York Times.

Excuse me. I think we, the key to any company, the greatest return on investment of any company is if you can attract and retain really talented young people. They're just – they work harder. You get 80% of a very talented senior executive for about 10% of the price. They're great culture carriers. They're much more facile with technology. technology, pretty much my focus for every company I've started is how do I create an environment through mentorship and environment and acceleration of salary where you attract the secret sauce, and that is this younger generation of workers.

I'm just struck by how incredibly talented they are. And the notion, we impart all this bullshit wokeness on them. Yeah, they're most socially conscious, but I think they're generally, for the most part, like us. They want to develop economic security for them and their families, and they want to learn. And these articles about how their bosses are scared of them. I don't know. I just don't think they're that different, except that they're more talented than us.

And I find this narrative emerging about how different they are and speaking about them and disparaging and infantilizing. I just find it all very strange. I'd say something, but I'm scared of them. You're scared of our producer? It's just, it's always, this is like, you know what? Every culture, every age goes through that. Every, like, the people coming up behind them. You know, people are here to replace us, really.

That's the point. It's like when you have kids, they're here to replace. That was an old Seinfeld thing. And so, these are normal. I just, these stories always, how different this group is, they're here to reply. That was an old Seinfeld thing. And so these are normal. I just, these stories always are. How different this group is, how different that group is. And they're always more socially conscious than us. I'm waiting for the generation that just wants to smoke cigarettes and gamble.

Yeah. We always impart our better angels on them. Yeah. Yeah, I guess so. I would say the thing I thought was a fail was Mark's demo. I watched it again. It just is so arrogant. It's so arrogant.

It's so arrogant. But doesn't he, I mean, it's like, who the hell is advising to the guy? because he could have done a lot of things. He could, he reminded me of when Bill Gates did that.

When they were dancing on stage? No, that was Steve John Bomber. When he did the testifying in the trial, when he was arrogant to the questioner. Who was at this executive staff meeting? Probably members of the executive staff. Something shifted with people, like, who is this asshole?

I thought this idea that he could just, moving on, was really offensive. I get that he doesn't want to dwell in this world, but that's what being an adult is all about. You dwell in the hard places. And so I thought that was, I just was like, oh, you know, that's what being an adult is all about. You dwell in the hard places. And so I thought that was, I just was like, oh, you're kidding me. And I think, you know, who knows if it's going to matter? I think it does. I think it actually does.

I feel like it does. Because of the, Kevin Roos wrote a really good piece about, you know, some of the data that's coming out about the young people. I think there, he said it had the vibe of a millennial, a late-stage millennial who doesn't know what the kids are doing and is worried that the kids don't like him. I feel like it was Ted Bundy on the witness stand going, you know what, guys? I get it. Can we just all move on?

Can we just all move on? I realize there's dead people everywhere, but look, it's just time to move on. Yeah. Let's all just move on. Yeah, and we'll see. I think it will result in things. I don't know if every – I think there's some things like nobody's paying attention. Let's all just move on. Yeah. And we'll see if it, I think it will result in things, you know,

I don't know if every, I think there's, there's some things like nobody's paying attention. That's not true. People ask me, regular people who do not have anything to do with tech are asking me about Facebook all the time, all the time.

They never did before. They're very interested in it. And so we'll see on lots of stuff, especially around data, just like Aswath was talking about. Anyhow, this has been a fantastic show. What a, what a especially around data, just like Aswath was talking about. Anyhow, this has been a fantastic show. What a delight it was to talk to Aswath, I have to tell you.

What a great, Scott brought him in and it's really, it was so smart. I feel smarter already. He's the man. Yes, he is. So thank you for getting him. On Friday, we'll take a listener question. So send us a good one. Go to nymag.com slash pivot and ask away.

Okay, Scott, that's the show. We'll be back on Friday for more. Read us out. Today's show was produced by Laura Naiman, Evan Angle, and Taylor Griffin. Ernie Indretat engineered this episode. Make sure you subscribe 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 liked our show, please recommend it to a friend. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business, insurrection, teen depression, making our discourse more coarse. Okay, fine. Let's move on.

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