Pivot - Instagram Knows it’s Toxic, Amazon’s Starting Wage Hike, and Another Big Week for Apple

Episode Date: September 17, 2021

Kara and Scott talk about the newest revelation in the Wall Street Journal’s Facebook Files series, Amazon raising their starting wages, and what we’ve learned from the California Recall Election. And Kara reminds us all to update our Apple devices. Plus, Scott gives a prediction on the SPAC market. 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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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. Get started at HubSp warm. Yeah. Yeah. Yeah. It's hot. Yeah. You're ignoring my COVID comment. Our cases have declined to the outbreak of a small NATO nation. So we're excited about that. Governors really lost the narrative. The fortunate thing is we have fantastic leadership here who's very focused on totally winning over, if you will, the 8,000 hard right whack jobs in Iowa as he's convinced

he's going to be president versus stuff like, so he's fighting things like mass mandates. And I don't know, it's like, you know what it is. It's fucking crazy down here. It is, I have to say. But it's great to be back. Good to be back. You have a beautiful place. So that's nice. Just stay there. That's all I got to say. We've got a couple of topics for banter today. First up, the results in California recall election are in and Gavin Newsom won handily. And he gave a very lovely speech. Let's listen to some of it.

No is not the only thing that was expressed tonight. I want to focus on what we said yes to as a state. We said yes to science. We said yes to vaccines. We said yes to ending this pandemic. said yes to vaccines. We said yes to ending this pandemic. So the Times had one estimate that the whole thing cost $450 million and Newsom is still governor. So what have we learned? Well, that it's very smart. I mean, democracy really in action when you spend a half a billion dollars to confirm an election you had 24 months ago when you're about to have an election in another 24 months. I think this is democracy gone apeshit. I think there were some very big egos fueling a campaign without actually thinking through second order effects. And I've said this a lot. I think that the

argument around unless you commit, do something really wrong, the notion that voters should be able to figure this out of the ballot box. I don't like this voting democracy as a service where we've decided that if we get pissed off, we can distract. Well, the Republican Party has such a, they're so lame in California, really, truly lame. I mean, you're a Californian, you know the governor. Well, you know, I'm actually not a California citizen now. I couldn't vote in the I certainly would have voted for Newsom. But the fact that I would have had to vote is ridiculous. I mean, one of the things that's crazy, you know, there's a budget surplus. They're doing great on COVID.

There's, you know, this French laundry thing. Someone said it's the biggest check from the French laundry ever. That was stupid. But it's the lame Republican Party of California, which has lost ground continually. I think it's a two-to-one thing. Is there a Republican Party in California? I mean, two-thirds of the voters are Democrats. There is, but they're trying any shitty way.

And they don't have the levers of power that they do in, say, Arizona to be shitty. And so they're trying anything. And they're going to close up this loophole in California. It looks like the legislature is going to, you know, you have to be convicted of a crime, et cetera, et cetera, and put some more strictures on it just because you can get so many signatures. Also, the judge extending the amount of time you could do this, as we've discussed. It's just, the whole thing is just, it's ridiculous. And of course, he won, and he had a gracious speech. I think, you know, there may be some question whether he's going to run for office maybe in 2024 for president. But I thought the speech was nice. I think what was super interesting was that the Republicans, of course, are calling foul in the beginning. And that's their tactic, which doesn't seem to work as well. But what Newsom did was making Trump the issue. And that's what he did. That's when he started to gain ground, when he when he linked Larry Elder directly to Trump and scared the shit out of people.

of a lack of voting booths in West Hollywood, implying there's some sort of conspiracy against voting by the Democrats. And I had to remind him, boss, you realize that if you make voting less accessible in West Hollywood, that helps Republicans, right? Right, right, right. I mean, have you really thought this through? The other thing is, I think this is, I'd like to think this is a turning point in that some of the more aggressive actions in the battle against COVID-19, whether it's vaccine mandates or distancing or masking, I think this was largely on the ballot. And I think California, which does have a tendency to lead the rest of the nation, has said, if you make mistakes toward overcorrecting, if you will, and that's what Newsom was accused of by the right against the battle of COVID-19, we're down with that. I think this is more important. The larger or broader issue nationally here is that Newsom, who was seen as being more aggressive, if you will, in his decisions,

he was opting for caution over, quote unquote, your liberties. And I think that millions of people have said, okay, we're fine with that. So I think this was a victory for those of us who believe that COVID-19 warrants an aggressive response and real leadership. Yeah, it will be interesting to see. I had an interesting Q&A with Chamath Palihapitiya, one of the people who gave a small amount of funding to this, but was very vocal about it, among other tech people. And on the other side, it's- He's contemplating running for governor, wasn't he? He was. He answers that question. And you should listen. You should read it. It's really interesting.

But I think, you know, there are definitely serious problems in California, but there's so much more overwhelming than any political party wildfires and climate change and things like that. Anyway, congratulations, Governor Newsom. And it was ridiculous that you had to run. Anyway, Apple had a lot of news this week. Besides a new phone and related products, it also issued an urgent security update. Did you update your phone? You know, it was nice of you. You texted me and said, update it. And I tried to do it, but I'm still getting this weird shit on my calendar. I'm not entirely sure what to do here. And I get these messages saying I need to install Norton. And I don't know if that's the hack. I'm

totally, I'm overwhelmed. I'm overwhelmed and confused. You need to do it on all your devices. Scott, all of them. Your Mac. You know what I need to do? I need to become an emerging world-class tech journalist and move into your basement

so I have someone on hand to help me with my iPhone. No, my son is there already. I'm going back to journalism school. Look, you need to do it. And I will do it for you if need be. You can fly me down to Florida to do it. In any case, please update your phones. It's critically important. You need to do it, and I will do it for you if need be. You can fly me down to Florida to do it. In any case, please update your phones.

It's critically important. And I've updated all my family's phones and everything else. So the other news is that there's new phones out, the iPhone 13, Lucky 13, I guess. We are so excited for iPhone 13. With all of its power and capability, we can't wait to see what our customers will do with it. It's essentially the iPhone 12, but with a better battery. The battery on the 12 is quite good. Better screen.

Yeah, better screen. You know, same thing. They cleaned it up a little more. The new iPad mini comes with a USB-C instead of the lightning. Whoa, now you get my juices flowing. What was that? A universal phone charger that Europeans want, regulators. This USB 3 is the way it's going. It's really irritating because you've got the lighting, you know, on lots of things.

I have an iPad mini. So they just keep barreling on through. They lose the EPIC case, they've got the security update, and they just keep making things. So, you know, it's an interesting time for Apple, but they definitely haven't stopped innovating on the products that make them all the money that makes people accuse them of being too powerful, which, and so it goes. And speaking of regulators, breaking up big tech only helps China. That's the message that a dozen former U.S. intelligence officials sent to Congress in a letter obtained by Axios. The officials claim that recent congressional antitrust could give China a strategic advantage. They caution that any tech oversight bill

should also apply to Huawei, Tencent, Baidu, and Alibaba. I would agree with the last part. The first part, I heard from Mark Zuckerberg three years ago, same thing, same message. Yeah, you're right. We can't let their monopolies come in. But generally speaking, if you look throughout economic history, trying to support national champions and not use antitrust doesn't work, whether it's Bombardier in Canada or Air France. They're generally trying to prop up, or I forget, Mintel, whatever that company was in France. Minitel. They're trying to prop up and ignore the economy. You want to opt for what's best for the economy as opposed to national champions, and there's a lot of evidence that smaller, more nimble companies would be just fine. And also the notion that AWS would be this little

competitor overwhelmed by the Chinese is a little bit ridiculous. Or that if Google was just, if YouTube was its own company, that AI powered warriors from China would invade our nation. I just, you know what, Kara, I'm not buying it. Are you buying it? I just don't buy it. I'm not buying it. I didn't buy it from, you know, there is a threat from China. Like, that's the problem. There is a very serious digital threat from China. And they are moving forward, especially in, you know, I did an interview with Ann Wojcicki yesterday in the genome space, for example, and lots of spaces. They really understand the value of investing in all kinds of technologies, including genome health technologies, digital

technologies, AI. And so I think the issue is that they understand that they need to invest. We shouldn't be investing more instead of just talking about not breaking up big tech. I think we win by innovation from the bottom, not from the hegemony from the top. We win by innovation from the bottom, not hegemony from the top. You are good. You are good. You could live in Kara Swisher's house in San Francisco. Thank you. Oh, by the way, I was on Megyn Kelly's podcast yesterday. Oh, how'd it go? She talks a lot about you. She's like, you know, Kara Swisher is so smart and so nice. And even though our politics are different, it reminded me right after I got out of college in the 80s and I would brag about having gay friends

because I thought it made me more interesting. interesting. She would not stop talking about how close you and her are. We were. Not were, not close. I mean, you know, colleagues kind of thing. But I liked her. I'm really troubled by her shift and what she's doing to get attention. I think she's a lot smarter than that. I know people don't really don't like Meg Kelly for lots of reasons. I try to look at people from all sides. I think she's a really terrific interviewer. I've always thought that. I think she's a very smart person.

But some of the tweets are unfortunate, I would say. It's one of those podcasts. I know almost nothing about Megyn Kelly. What are you talking about? What are you talking about? You didn't know anything about Megyn Kelly. She was so controversial. You didn't pay attention.

I know almost nothing. I don't think I've ever seen know anything about Megyn Kelly. She was so controversial. You didn't pay attention. I know almost nothing. I don't think I've ever seen or listened to Megyn Kelly do anything. There have been other such not so great moments. Have you ever gone on a podcast and you knew a little bit about it, but not a lot about it? No. And then you're on a podcast. And of course, I'm a narcissist, so I immediately listen to it when it comes out. And literally right after they say, thank you, Scott Galloway, they have a person call in and a woman complain, a bus driver complain about the mask mandate.

And Megan and her go off about these mask mandates. I told you. And I'm like, how the fuck did I end up before this story? I told you. I told you. Yeah. Yeah. There's a little bit of crazy going on there.

I wish that wasn't the case. She's very good, though. She's got a very, she's very good though she's got a very she's a good interviewer and smart and she but some of the things she said have been like deeply deeply offensive and not in the oh i can't say what i want way it's just like stop it like stop it girl like well you and her are very close she's a huge fan of yours you know what it's really disappointing like i i try really hard to reach out to people who don't agree with me or have different political beliefs.

I really actually do. I do. I do. You're wrong. I do. Look, I had Jason Miller on my podcast. You know how much endless shit I got? We'll smell you.

We'll smell you. No, but I do. I promise you, I do. I do. I do. I just disagree with you and your outlandish ideas about whatever Chipotle and penis is. You're the fucking navy seal defending wokastan i mean you are literally no i'm not you're that last japanese

soldier here's what i am stuck in a cave of eo g mother refuses to no i'm a liberal person who's not going to take shit from the right i'm i understand their tactics and woke is and not asleep that is bullshit to take that just because Just because you believe in the dignity of everyone based on their qualities. Not me. I don't believe in the dignity of everyone. I'm sorry. I'm not going to.

I don't put up with any shit from the right wing. You figured us out. You know what? Here's the thing. Lesbians don't put up with any shit. Guess what? You know the only people having lots of children? Evangelicals and lesbians.

So I'm just saying we're toe-to-toe on that kind of thing, except we're vaccinating ours. That's one of those comments where I think to myself, don't say anything. Don't say anything. Don't say anything. You can say whatever you want. Evangelicals and lesbians.

They're having the kids, keeping up with the imminent. Anyhow, let me just say, I'm glad you went on. I will listen to it, and I will come back with comments next week. All right, we've got- You've heard everything I said before. I said nothing new. I would like to hear you. I think you're a wise person.

I'm sure you added value to her world. I'm sure you added value. I'm wise. Really? You believe in dignity for all, and I'm wise. Listen to me. Here's the deal. She is there to talk about mask mandates, unfortunately all and I'm wise. Listen to me. Here's the deal. She is there to talk about mask mandates, unfortunately, and rant about it.

I wish she would do smarter shows. How's that? How's that? That's a little strange. That's, I think, fair. I think that's a fair assessment of what's going on. Well, here's the thing. I'm serious about this.

Because mask mandates pay the bill. That's what happens. That's why. I agree with you. What I have decided, and I thought about this with my friend posting conspiracy theories that made no sense, and this is what I like to call a lesson to our younger viewers. If you don't separate the person from the political ideology, you shut off 50% of potential relationships. friendships with people who had really strong political beliefs that I just found were just kind of noxious. And what I've decided is I don't want to say I ignore it. I acknowledge it. And I've decided that that's not going to be the driver of who I'm friends with or not. And I think that's good advice. I would say separate the person from the political ideology.

To that, sometimes you just have to leave people behind them. I have to say, or you have to really cut my, as you know, my mom was terrible about me being gay, and I had to really drop the frigging hammer. And it worked. Dropping the hammer worked. I think that's more deeply personal, and that's, anyway, I'm not even going to go there. I think that's rough.

You can leave relations behind if it becomes untenable, if they don't accept the person you are and stuff like that. That's a different story. But you're right. We have to learn how to disagree in ways that are more productive. How's that? Yeah. Does that make sense?

Is that too woke for you? Yes. Is that too woke for you? Yes. Well, I'm wise, so I will contemplate on this. Yeah, okay. Let me just say, we will smack the shit out of people, too, just so you know. We're not always cooperative.

That's right. Anyhow, let's go on to our big story. We're not always cooperative. That's right. Anyhow, let's go on to our big story. The Wall Street Journal is calling Instagram toxic for teen girls, which Scott has been doing for a long, long time. But they have found internal Facebook research that showed that 32% of teen girls said that they felt bad about their bodies. Instagram made them feel worse.

Facebook knows this. Mark Zuckerberg reportedly learned about it in 2020, although we've been talking about it for a long time. Adam Masseri, the head of Instagram, issued a statement saying the story focuses on a limited set of findings and casts them in a negative light. That's right, Adam. It does, because it's negative. The comments from him are just appalling, as far as I'm concerned. He made several. Well, he's taking a page out of

Sheryl Sandberg. I'm proud of the progress he tried to do this gymnastic move. It took us too long to understand this. Scott, I'm going to let you rant here. Please go. Well, as society, Peter Drucker said that an economy exists to create a middle class. And that's the balance of an economy economically. But from an anthropological or from a spiritual or from an instinctual standpoint, the most rewarding things in our lives

are our ability to provide a safe and loving environment for our children. And when that does not happen, when one in eight UK girls who are contemplating suicide highlight Instagram as the primary reason they have started contemplating suicide. Facebook hasn't failed.

We have all failed. Facebook has failed. What could be more serious than an uptick in teen depression, self-harm, and suicide that can be reverse engineered to a corporation? And we haven't done anything about it, that we've let this happen. Meaning we haven't stopped Facebook is what you're saying. We haven't moved in. I think at some point you got to start holding ourselves responsible and our elected leaders responsible. But let's focus on Facebook for a minute.

They knew this research. Look, this is research that's been out, and a lot of people are suggesting that everybody knows it. But here they are just doubling down on it. They're supposed to put Instagram for kids out. They aren't acknowledging what the problem is. Can you believe that? Yes. Yes, I can. Yes, I can. You've got to admire their gumption. I can. They write everything down because they're proud of it. And 44 states have asked them not to. And that's where we are. States ask Facebook not to do something.

Right. So this obviously could apply to other people, not just teen girls, but teen girls are very vulnerable. Instagram already does warn users who view tags like anorexia and directs them to seek help. But I think one of the things you've talked about a lot is envy and depression are just built into this. It's not fixable. It's not the way it is. I asked my kids about this last night, actually, and they're like, I see people on there and it makes me feel bad about myself. Like, you know what I mean? Like, they're pretty confident as people, but it's.

A third of girls under the age of 22 and 40% of the users are under the age of 22 cite that it makes them feel worse about their bodies. Yeah. Yes, that's what one of my kids was saying that. I just find it so. I agree with you that Mark Zuckerberg is ultimately responsible, but they have deployed Sheryl Sandberg around this notion around saying she has incredible gravitas. And a lot of it is deserved around being presented and built by 900 people in their communications department as a real champion for women. And then she talks about personal loss. And the comment I thought that ran through my mind was, and I like the stuff she said about her kids and dealing with

grief, is they need a safe space to grieve. And I thought, where is our children's safe space from her and Mark Zuckerberg? And the person who's having a moment, a scholar, a colleague of mine, Jonathan Haidt. Jonathan Haidt has been doing a ton of depression and raising or sounding the alarm on this emerging crisis in teen depression. He has been talking about this for five years. And you know what he found when it started? It started really seriously upticking, self-harm, suicidal thoughts, and actual suicide.

It started happening in 2013. When did Facebook acquire Instagram? I mean, this is literally- Yeah, you can make it draw a very sharp line. Depression and mental health are so complicated, and attribution is so difficult, and you're going to see an increasing number of academic papers that say there appears to be a link between Instagram's growth and the increase in damage done to our young people. That's what I would think about it. Now, senators asked Zuckerberg for the company's research on the topic. Facebook replied and called the information proprietary. What's fascinating is all these

people releasing information, like whether it was about the celebrities last week. This is this very good Wall Street. I thought, I literally thought Facebook had hit bottom, but no. You know what I mean? I'm like, literally, next week we're going to find out that they like. We'll talk for a minute about the celebrity thing because we didn't get that much attention. So last week, this is the part of a Wall Street Journal series. It looks like there's a lot of whistleblowers going on here. And they're tired of it.

They're like, they're releasing the research that Facebook knew about this stuff. And one of the things they were doing is they were letting millions of people off rules of Facebook, a VIP list, essentially. I suspect we're on it. I don't use Facebook, but, you know, I suspect. I think one of us is on it. No, we're probably both on it. And it's the evangelical in us. It's the evangelical.

God help us. Yeah, they gave special treatment. Everyone has standards and then if your name are yeah a soccer player with 100 million followers and someone accuses you of sexual assault and you go on facebook and start showing on your phone nude pictures of this woman which is called revenge porn yeah that's what it's called they decide to ignore that ignore it so this this this basically this lie this narrative that they've tried to fall back on that, no, we want to give voice to everybody, we treat everyone the same, has been basically a lie. And they've had billions and billions of views of this content that would otherwise be banned because it's from someone powerful and famous.

Yeah, because of their current rules. So, one of the things is that they told even the oversight board the wrong thing. Right. They said they will only use it in a small number of cases. Turns out to be millions of cases. And, you know, I think what I said last week was, look, Trump has shown, brought into sharp relief this stuff. Like, because he's so bad an actor on these platforms.

He's shown how much you can push them, and he's shown that they don't have actual rules in place that they actually follow. It's like a city that says it has rules, but it doesn't. It just doesn't. It has, you know. So what do we do? What do you think we should do here? The next one, I'm like waiting.

There's more coming from the Wall Street Journal. Like, literally, I think the next one's going to be Facebook stole the Lindbergh baby. I don't know what's going to happen. They have dog fights at lunch or something. Oh, my God. You know, I just feel like it's at the center of this, and I don't say this lightly, is the mendacity. That's what gets at the heart of this is they do this thing they said they weren't doing, and then they find out they were doing it. And then this thing is,

we don't know anything about this. And then they have this stuff, even though we, you and I both understood that this is what was happening, but they knew and did nothing. And that, like, I agree with you, it's the fault of senators, congressmen, regulators, but in many ways, as you said last week, they overwhelm us with bad behavior and mendacity. Well, it's Trump. Every day you're like, I can't believe it. And then the next day, oh, my gosh, I can't believe this. They're smart that they continue to damage the Commonwealth every day.

And we're just almost numb to it. But my question to you, because I have an idea, is what do we do about it? I don't know if anything can be done. I'll be honest with you. I feel like that about the Republican. That is not the evangelical lesbian I know. That's not the go-getter I know. I think very, just continuing to shed light on, this is, you know, many years ago I did an interview with Mark Benioff and he's coming to Code next week. And he talked about them being cigarette companies very early on. Everyone went, oh, how dare Mark Bonioff do this? He's 100% right. These are cigarette companies. These are

the Sacklers. And well, look, nothing's happened to the Sacklers, not much. But these are cigarette companies. That's what these people are. Big oil. And because it's not physical, like you don't die of it, lung cancer, or because it doesn't have a physical manifestation, people think it's not as serious. And my mind, this idea of what's happening to teenage girls, and especially that I have a daughter, I hate to say that. It's like, are you kidding me? I would never let her use any of these things. Never. And I actually don't want my sons to use it.

When they started to talk to me about it, I was like, they felt adrift in what to do because it's the way people talk to each other too. But this is what's so, you used the word mendacious. They know that anyone who says, oh, I'm not giving my kid an iPhone doesn't have kids. Your kid turns 13 and this is how they communicate. This is how they socialize. This is how you track your kid when he walks down to the Ave, which is Atlantic Avenue in Delray. And then you find out they're onray. And then you find out they're on TikTok. And then you find out they're on Snap. And you do your best. You say, I need your

passwords. I need to go on these platforms. And what you realize with a lot of these platforms is you can be a great parent. I mean, the Jed Foundation, which is this fantastic foundation focused on helping kids lead more healthy mental lives or be more mental wellness, focused on helping kids lead more healthy mental lives or be more mental wellness. A lot of times, a lot of parents who have had kids who with self-harm, they had no idea. And there weren't a lot of external signals. A lot of the suffering takes place in the dark in their room. They do.

And it is a really, it is more, it is easier to smell marijuana or nicotine on your child's breath and to figure out they are being shamed on Instagram, or that they're starting to have body issues because of all these fitness and makeup influencers creating this unattainable bar. But, well, let me put out there, why wouldn't we do the same thing we did with tobacco, we did with alcohol? We found that, okay, realistically, 70, 80%, maybe more of people under the age of 21, say between the ages of 18 and 21 or 16 or 15 and 21, could handle alcohol. But some, for some, it has really negative, a negative impact or negative externalities. Why wouldn't we age gate Instagram? Why would we say no one under the age of 18? Well, you know, they're doing that in China around video games.

It's interesting. That's right. But they're doing it, of course, by fiat. And so we've got to do it by democratic means or something. Well, we just don't do it. Right, right. That's exactly right, because we don't have an authoritarian country. Why wouldn't we age-gate it?

Why wouldn't we age-gate a certain social media? This is one thing I'm hoping is, one thing I've noticed with my kids, because I don't really bar them from doing anything, is they've started to use their phones more. They don't use those things anymore. I think they are aware how bad that makes them feel. And what they use more now, and I've noticed this, I just, you know, just from watching Casualty, is they're doing a lot more streaming of shows. Like they're using it more for content watching. And I don't mind it because they've come up with some really, like my other son showed me a great documentary. I was like, I didn't know about that. Like they seem to be using it more for stuff that isn't this,

which that's one thing I'm hoping it'll be like, this makes me feel bad. I'm going to stop doing it. But for a lot of people, especially teenage girls, a lot of this stuff is unavoidable in, in lots of ways. Like it's irresistible and unavoidable.

And it's also create, you know, the next story probably come out the addictive nature of all nature of all this and how Facebook knows about it. Has engineered it. Has engineered it. I mean, we all know this, and there's been lots and lots of research. But let me just say, the last thing I'll say, these comments from Facebook saying that it's not news and it's not— No, they've tried to spin it as positive.

Not just positive. The head of Instagram has said he's proud of the research. You know what? I'm sorry, but fuck that like it is just ridiculous that they pretend it's not a problem and then say we should have done better they need to stop they need to stop and and we need to stop tolerating them and one of the things that happened years ago when i started being so tough on them um about these things for a long time, they played this game. And I am literally like, fuck you.

Like, that is how I feel about it. Because this stuff is, they can make it better, and it's necessary. I don't want to bar these things like you were talking about. But they really have got to stop their pretend faking of those sides. So, I would add to that. I agree with you. And I think that's powerful that they got to stop their pretend faking of those sizes. So I would add to that. I agree with you. And I think that's powerful that they need to stop. But we also need to start asking our legislators and lawmakers to hold them to account.

And for example, for example, I think Section 230 will probably get another review here around this. Because if you look at what happened, for example, with Robin Hood, a young man, Alex Kearns, thinks he's down $700,000, can't get a hold of anybody because they're not interested in customer service, they're scaling, and decides he doesn't want to indebt his family and throws himself in front of a train. By the way, no evidence of any mental illness there, just to be clear. And the Kearns family, correctly, sues Robinhood, and Robinhood and the Kearns family settle out of courtes Robin Hood, and Robin Hood and the Kearns family settle out of court. And I believe now that Robin Hood has real incentive not to have dozens or hundreds of

parents of people who committed suicide. They've decided to de-engineer some of the addictive things. They have increased not a lot. They've tripled their customer service, but their customer base has tripled. So I would argue they haven't done a damn thing. But they have economic incentive not to convince, not to put in place dark psychological techniques that go very bad places. The problem is Facebook doesn't have those economic incentives. There are parents who say, who have said directly after their child has committed suicide that Instagram drove my child to suicide. But they can't sue Facebook because the content on Facebook is not subject to legal review unless it's of a certain type.

I've always thought this. Yep. I've thought there's some level of lawsuits. Yeah, some level of lawsuits. They have to be legally liable. I hate to say it. But I appreciate you saying they need to stop it. Don't hold your breath, Kara.

No, I won't. Don't hold your breath. Trust me. Do you think I think they will change? No, I don't. They write it down. They write it down. They are proud of this.

And so, you know, I know Scott and I sound like, you know, broken records, but here we are. This is what happened. Anyway, let's go on a quick break. When we come back, we'll talk about Amazon's pay raise and take a listener mail question. 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

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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, 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. Scott, we're back with our second big story. Amazon's starting wage has gone up to over $18

an hour on average. Needs to get to 24, according to an interview I did with Cori Bush just recently. It also plans to hire more than 125,000 workers. It had 500,000 over the last year. It's crazy. One Amazon executive said fierce competition is behind the pay raise, and probably true, It had 525,000 workers. It had 500,000 over the last year. It's crazy. One Amazon executive said fierce competition is behind the pay raise, and probably true because you see signs everywhere. Most of these roles are to accommodate growth, not replace lost workers, according to Amazon. Earlier this month, Amazon announced it would cover 100% of college tuition for most of its hourly employees. Very interesting stuff. Amazon is trying to get ahead of this, for sure.

Tell me your thoughts on this. Well, largest employer in the world. I was really excited about some of the competition. I believe that finally there was an effective union for the middle class and lower middle class in the form of stimulus that gave people options versus working for nine bucks an hour and living in their car. That's true. That's fascinating. The problem is some of the analysis shows that the inflation that's hitting kind of middle-income workers especially hard has basically wiped out any increases in wages. But I'm seeing this. I told you I'm in a board meeting this morning. The wage pressure is really substantial, and it's overdue. So I think these raises are smart. It's overdue.

So I think these raises are smart. I think Amazon has recognized that as now the largest employer in the nation and the fact that they have access to such cheap capital that they should stay ahead of this. No, they're the second largest private employer. They're the second largest. I thought they're now the largest if you look at their – I think Walmart is. I'm pretty sure. I thought they had surpassed – They're close.

They're very close. Well, Amazon is now the biggest retailer if you look at third-party gross merchandise. Anyways, thank you. But what I think is visionary of Amazon, and most aren't doing this, is Amazon has said, if you're paying an employee $14 an hour and you have a lot of turnover, you're paying them $20 an hour. You're just paying a non-economic cost of upskilling and retraining. You're paying them $20 an hour. You're just paying a non-economic cost of upskilling and retraining. And having greater levels of retention, attracting a higher caliber workforce, having better morale at work, those all pay off in terms of productivity.

And so I think this is – I think Amazon is ahead of the curve here. I think they're smart. I bet it's $20 within 12 months because they can afford it, and it's smart. Let me try two things out on you. 12 months because they can afford it and it's smart. Let me try two things out on you. I interviewed two people who were talking about this. Obviously, Cori Bush slept on the steps of the Capitol, Representative Bush from Missouri, about issues around rent evictions, eviction moratoriums.

And she was saying it has to be, she said, you don't want to give them like kudos for something that should be $24 an hour and it has to go up. This is one thing she said. And then I interviewed Dave Eggers, who is a great writer. Why wouldn't she propose minimum wage? She's the one that's failed. Oh, and by the way, sleeping outside, that's going to help. We talked about the stunt nature of that. Yes, we did. But in any case, I'm just putting this out there. And then the second one I did interview Dave Eggers, whose new book is called The Every, and it's about Amazon and Google merging, a company of a merger between an Amazon-Google kind of companies,

which can you imagine? And it's- I can't. Yeah, I know. It's crazy. It's actually a very funny book. Gamazon? Gamazon.

No, it's called The Every. The name of the company is The Every, which I love the name. That's actually a great name. Well, as a protest, I'm not going to sleep outside. I'm going to sleep with evangelicals. All right, listen to me. Let me read. Just to make a point.

Listen to the quote. I want to see what Elon Musk is doing with his rocket program. I think there's a way to do it that's valuable to humanity. The Bezos way, paying people $15 an hour, a sub-living wage. They hold onto that like it's such a badge of honor. You know, when they were sort of tweeting back at the possible regulation, well, healthcare from day one and $15 an hour. I don't understand how that is such a point of pride. What do you think of that quote, Dave Eckers?

I think it's powerful, but look, two people living together have partnered making 18 bucks an hour plus healthcare. In many regions of the US, you can't string together a reasonable life. And so, look, I think this is headed in the right direction. And I think Amazon, I think when they make these incremental steps, I think they should be applauded. I agree that it's self-serving, but that's what corporations do. But the good news here is that finally, finally, in the tension between capital and labor, where capital has been kicking labor in the nuts for about 40 years, labor finally has a tiny bit of leverage. And I think this is a good thing. And Jerome Powell actually, to his credit, a couple 18, 24 months ago said, we need to keep the printing presses going because we're finally,

finally, the economy is reaching in to the middle class and lower middle class in terms of wages. And he was right. And this is a good thing. This is the first time. And what's so amazing is when, so CEO pay was up like 23% through the pandemic and everyone's like, oh, okay, yeah. They roll their eyes and CEOs make a ton of money. We're used to that. When all of a sudden wages escalated on our frontline workers, everyone just fucking freaked out. Like the world was coming to an end. Like, oh my God, we can't find workers. I'm like, yeah, you can. If you raise your wages, things will start and to fall into place. And, oh, restaurant isn't going to survive. And I'm like, well, and you've made this point. Restaurants that can't

survive unless they pay people nine bucks an hour should go out of business. But it's just shocking how shocked the media is and horrified that they can't find people at nine bucks an hour. When the pressure goes away, they might, well, I guess they can't go back to the old prices, right? But one of the things is what keeps up the pressure if it's not going to be unions, and you've talked very eloquently about the weakness of unions. I'm using that. I'm saying that a nice way.

How do you get those wages to continue to go up without the resistance and for people to focus on these things? We as a society, you'd like to think, and in some ways we've decided, that when you just have labor be supply and demand driven, you end up with one in five households with children that are food insecure. So we have things called minimum wage. We have OSHA. It ends up people are so desperate for money that they will work in unsafe conditions. And so we have OSHA. It ends up that you can't find 14-year-olds to work for five bucks an hour, but we don't allow that. We have child labor standards and it's enough already. We've seen since 2009, the NASDAQ has quintupled, CEO salaries up 300% and minimum wages exploded from

725 to 725. So to the representative sleeping outside, get some rest, sleep indoors, and then pass fucking minimum wage legislation. 15, 18 bucks an hour across the nation because there will always be states run by Republicans. That was a huge pushback when they tried. They did try. Let's be fair. They did. They tried. It didn't work.

Well, in the words of the Jedi Master, there is no try. They have failed us. There's do or do not. And they have failed to raise minimum wage. Okay, it's great you're sleeping outside. Pass fucking legislation. Yeah, Republicans focused on mask mandates will not be allowing that to happen because they're protecting business. But business, I think business does understand this.

And when Amazon, I'll tell you of all the things that are going to matter, Amazon raising it $18 a year over there at Panera or, you know, Wendy's, you see all these signs everywhere. Like there's a couple of places not opening in my neighborhood because I'm going to have workers. Guess what? You have to raise the rates. That's it. And maybe not make as much money and maybe go out of business. Like that's really, and a lot of these things, they absolutely, these small businesses operate on the, on the slimmest of margins. And so that's the problem. I mean, obviously, a whole kind of thing's got to go into it. Rent's got to go down. There's a lot of solutions. You know what Germany does? What?

Germany mandates that a certain percentage of your board of directors has to be representatives of your workers. And what do you know? Oh, I agree with that. For years, I've thought that. They haven't had the same massive erosion in the middle class, because guess what? There's a bunch of middle class people on the boards of these companies. And it creates, as we were just talking about with Megyn Kelly, it creates an ability to see each other. I know it sounds dumb and possibly woke to you, but I think the ability to see each other is very powerful. I agree.

Very powerful. 100%. All right. We'll see what happens here, but I think they should do 20, above 20. We should just stop eking little wins from the rich on this topic. Jeff Bezos, when he was bragging about everybody paying for his trip, I don't think that was a good quote for him to make. It's another weapon of delusion where they say all these small businesses, which we create this romanticize and have idolatry of the small business person and we make a cartoon of that. It's not. There is no free

lunch. If you wanted to do federal minimum wage at 20 bucks an hour, which would be dramatic, that IE up 140%, 120%, who we would transfer wealth from is the cohort that has aggregated more wealth and economic power than any cohort, and that is the shareholder class. And that is the majority of corporations would still stay in business. They just wouldn't be as profitable, and the share price would go flat or go down. Maybe they could pay their CEOs a little less. Well, yeah, it's hard to engineer that because that – anyways, that's another talk show. But the bottom line is the shareholders have done really well.

They've done really well. And so the notion that all of a sudden every cupcake bakery and dry cleaner that we love and we make a cartoon of is going out of business, no. It means the owners, the people who own shares, who by the way, the wealthiest people in America are small business people who we, again, romanticize. But it's the shareholder class that has basically overrun government. romanticize, but it's the shareholder class that has basically overrun government. You're completely right. All right, Scott, we're going to pivot to a listener question. You've got, you've got, I can't believe I'm going to be a mailman. You've got mail.

Hey, Scott and Kai, this is Jason from London. I'm a big Peloton fan, and I'm just curious, what are your thoughts on Apple Fitness Plus as it continues to scale. Is there space for both of them to be successful? Or is a combination of Apple Fitness Plus plus the pandemic kind of coming to an end going to hurt Peloton's long-term business? Will it be like Apple Music chopping into Spotify's low margins? Or is there space for both to make a lot of money? Thanks. I think that's the perfect analogy. I think this is the next Spotify versus Apple Music, and that is Peloton is more innovative. The specific crowds out there in general, Focus is a fantastic means of differentiation. Peloton, I think, is an amazing company. I think their content, their celebrities, the profiles, they've built the platform, the compensation,

a connected device, their ability now to go to private label apparel. And not only that, some of the highest NPS scores of any consumer company in the world. It's created one of the most rabid, passionate fans. A decent percentage of their revenue comes from an app or their fitness app, which is recurring revenue and is not linked to a connected device. And Apple Fitness is going to start to take share from them with an inferior product. But guess what? They control-

It's not a bad product. Let me be clear. It's not a bad product. It's inferior to Peloton. Yes, that is true. Yes. Apple Music isn't a bad product, but it's inferior to Spotify.

I'm going to push back on that. Both my kids switched over to Apple Music and there was no reason for they love Spotify. They think the product is- But why did did they switch because it's integrated with other things because there's no no no well why did they switch they like the product better i asked them really both of them did i'm still on spotify yeah i think it's it's it's competitive it's competitive for sure there were some certain things they liked about it better than other things and it had nothing to do with integration. But go ahead.

I think that's the perfect example. And Apple will do a great job here. They will figure out, I mean, having the billion wealthiest people in the world who tend, by the way, there is a correlation between wealth and success and working out. And I'm going to go off script here. But one of the biggest life hacks you can do as a young person right now is finding something that takes four to six hours a week that's unproductive and reallocated into physical fitness. I gave up golf when I moved to New York, and I took that six hours I was spending a week on golf and decided I was going to be in great shape. And the benefits, the accoutrements, the self-esteem of being in great shape are more powerful than even golf. And I love golf. And so this fitness is a gift. And I think it's great that Apple's going into fitness,

but I would predict they'll come up with a good, not a great product, and they will start to put real pressure on Peloton because they own the rails. They can put this thing in front of everybody. I do agree with it here. It's a really interesting issue. I think, if you notice, Peloton just cut the prices on its original. People think there's a lot of pressure, there's going to be a lot of slowdown because of the pandemic. I haven't used mine as much, only because I'm very busy with code coming up, and I will

get back. I was thinking I've got to get back to it. And I like it. But I'm not going to go back to, say, SoulCycle or anything outside. I'm going to continue. That's the product I'm going to use. But what they're competing for here is time. And if Apple makes it easier for you, you certainly are going to use it with a good product, with a strong product. So it's definitely a challenge for Peloton. Scott and I have always talked about Apple

buying Peloton. I still think that's going to happen. What do you think? I've never seen two brands line up better than Peloton and Apple. And then when you think about the war for your attention and trying to find an accretive acquisition in terms of cementing or strengthening that interface and that attention with a cohort that Apple absolutely wants. I think the most powerful people in the world, the most influential people in the world have one thing in common, and that's Peloton. Whenever I hear someone has a Peloton, I'm like, oh, that person's influential or wealthy. That is the cohort you want. Now, the valuation is pretty striking, but at this point, at $2.5 trillion in valuation, it would be about a 2% dilution for Apple. So I've always thought Apple is going to wait till Peloton maybe hiccups and come in, or maybe they've already approached them. I don't know if there'd be any trust there. I don't think

so. No. It's sort of like Amazon MGM. But if you think about two brands that feel clean, somewhat feminine, somewhat elegant, but at the same time, wealthy, almost like luxury hits hardware and tech. I think of two brands. I think of Apple and I think of Peloton. They could go from kind of letter C to letter L and fit. They would basically own fitness. I would agree. I think you're absolutely right. I think you're a hundred percent right. We'll see what happens. We're going to continue. And then when it happens, we're going to say we're the best, aren't we? No, no, no. Look, as evangelical lesbians, we're more humble than that, Cal. We're more humble than that. We're going to have us an election.

Oh, I knew you'd pull out the... We're going to have us an election. Listen, boss hog. Anyway, that was a fun question. Send us more. If you've got questions you're curious about, go to nymag.com slash pivot and submit it to the show. All right, Scott, one more quick break. We'll be back for predictions. I want a good one from you. While you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results.

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that puts humanity first. To learn more, visit anthropic.com slash clawed. That's anthropic.com. What is that, Kara? It's a rally of, like, super MAGAs. They're, like, the ones with the guns. Smagas? Whatever. They're coming to town. They're coming to town, and they're carrying, apparently, and the District of Columbia is preparing for it. And I am staying in my neighborhood and not moving.

Anyway, they're all coming. We'll see. You know, people are worried there's going to be some bad things happening, but we'll see if they try their ridiculous tactics over again. So my prediction is I think the SPAC market may have officially jumped the shark. I've been reading the investor deck of a company called Aspiration. Have you heard about this? It's a former Elizabeth Warren protege or someone who worked in Senator Warren's office as the founder. It's a credit card company or a debit card company, actually, that you fund,

and you get good cash back, and they claim to be very carbon neutral. They also have, you can allocate your funds to invest in an ESG-like fund, and they also provide consulting to companies. And this thing literally looks like kind of like we SG, so to speak. It's supposed to go out a $2.1 billion valuation. As far as I can tell, it's a kind of a small debit card company, but they've taken advantage. They call themselves, I love this, sustainability as a service. And they claim their consulting revenue is going to go from $4 million to $50 million. And it's basically a debit card company, for all I can tell, that sends out a card that is not plastic. Okay, there's real innovation there.

What is it, like bacon? Some sort of material or something that doesn't or degrades or doesn't degrade. They got, I think it's Leo DiCaprio or Drake involved. So you got celebrity. Those are the real woke people. I'm not down that road. You got celebrity influencers, you got ESG, you got sustainability as a service, and you got SPAC. And supposedly this thing is trying to get a $2.1 billion valuation. It's 50 million from consulting, 50 million from their money management or debit card business.

It's supposed to go out at 21 times revenues. I look at this thing and I'm like, okay, this makes absolutely no fucking sense. And if you look at what's happened to SPACs in the last 60 days, I think this could, if this thing gets out, I don't know if it will, I think it's going to be the poster child for literally Fonzie jumping over a shark. So I'm looking at this company called Aspiration and new SPACs. Only two SPACs got out in July and one was off 16%. Oh, and my favorite is they have something called Mibida or Ibadam. Ibadam, and that is Ibida. No, no, stop. Ibida before, hold on, Ibidam, Ibida before their marketing expense. And your only real expense in a company like this is marketing.

So they want to tell you what their profits are before their marketing expense, which reminds me of community-based EBITDA at WeWork, where they said, all right, we're a real estate company, and we're going to present our profits before real estate costs. So we have it all here. EBITDA- Can I just say, the right is just deconstructing itself. We don't have to do anything. And then we pull this kind of stuff. This isn't the right. This isn't the right. I know, it's the left. I get that. I'm just saying, we should stop doing stuff like the laughable stuff like this. This is the crown prince of Wokistan trying to cash in. I know that. That's what I'm saying. We shouldn't do, we should like go with the Gavin Newsom strategy. Like just say nothing, look handsome, et. Yeah. Okay, Scott.

That is really horrifying. We'll see how it goes. Let's see. We'll check in on how it does, okay? We will check in. We'll see what happens to that stock. That's right. We'll keep tracking it.

All right, Scott. That is the show. We'll be back on Tuesday for more. Lots of news happening. As always, you can submit a question to the show at nymag.com slash pivot. We really appreciate them.

That one on Peloton was great. Scott, read us out. Today's show is produced by Lara Naiman, Evan Engel, and Taylor Griffin. Thanks also to Drew Burrows. Ernie Ingetot engineered this episode. Make sure you subscribe to the show on Apple Podcasts. Or if you're an Android user, get an iPhone. And also check us out on Spotify or, frankly, wherever you listen to podcasts.

Thanks for listening to Pivot from Box Media. We'll be back next Friday for another breakdown of all things tech and business. You and I are going to roll with... Who? Governor Newsom. We are. Support for this podcast comes from Anthropic. It's not always easy to harness the power and potential of AI.

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